Sustainable Logistics

Running head: FRAMEWORK 1

FRAMEWORK 6

Supply Chain Framework

Calvin Blount

Colorado Tech

SCM430

06/12/2020

Supply Chain Management incorporates procurement and transformation of materials into finished items, and their transportation to the final consumer. Coca Cola’s supply chain framework involves all partners that Coca cola works with. It aims at integrating all organizational units to fulfill customer demands and improve the competitiveness of its supply chain (Bowers et al., 2017). The goal of performance measurement on the other hand is to improve the business processes. A minimal number of performance metrics should be instituted in a manner that provides maximum benefits during the implementation of Coca Cola Company business processes.

Several frameworks exist which can be used to measure the supply chain performance. These frameworks measure the tactical, strategic, and operational level of performance in a supply chain (Bowers et al., 2017). The metrics are separated into financial and non-financial. The first Key metric used is the perfect order index, it orders the error-free rate of the entire supply chain process. However, due to the expansive supply chain process, it must be divided into stages and customized for the various regions it operates. The other metric used is the cash to cash cycle. This process is known as cash conversion. It measures the time spent when a company is sending cash to its suppliers and when it receives cash from the customers (Bowers et al., 2017). It is composed of three supply chain measurement: days of payables, days of inventory and days of receivables. Coca cola Company can use this method, but it must be customized too given its expansive supply chain network.

Another metric used is the inventory turnover. It measures the number of times an entire inventory is sold in a specified period. Being a large company, Coca Cola might have a lower inventory turnover which could be misinterpreted for having excess inventory inferring weak sales. To obtain more accurate results, the company should delegate some of the supply chain measurement metrics to the local partners.

Coca Cola Company has also adapted supply chain tracking and analytics while focusing on real-time location and supply chain insights technology. This is used to improve the delivery. In the U.S, it has partnered with Four kites, a supply chain analytics company, to track the location of its cargo and predict arrival times of the shipments (Li et al., 2020).

There are also other designed frameworks such as the Metrics for the Performance Evaluation of a Supply Chain (Li et al., 2020). Invented in 2001, it is used to measure the tactical, strategic, and operational level performance of a supply chain. It is classified into financial and non-financial factors. In Coca cola, the financial factors are measured in terms of tangible and intangible benefits and cost saved in the supply chain process (Li et al., 2020). The non-financial factors analyze the flexibility, deliverability, and quality of the process.

Lastly, we have the Supply Chain Performance Metrics, which incorporates four major supply chain processes which are: planning, sourcing, manufacture, and delivery. The measures are grouped into cells where the supply chain implementation intersects with the planning activity. Items in the cells are arranged in the order of importance. It is critical in the supply chain management.

Section 2: Global Supply Chain

Globalization of supply chains has enabled goods produced in one part of the globe to reach the other part. Coca-Cola boast of about 1.9 billion servings in a single day (Li et al., 2020) in more than 200 countries. It has many different plants where the processing takes place. The soft drinks usually arrive at the partner’s production sites in syrup and are then mixed with carbon dioxide and sugar (Li et al., 2020) among other processes to from the final products. The global supply chain is greatly enabled by the supplier relationship and continuous monitoring of partners.

The company has also adapted new technologies in its supply chain such as warehouse automation. It currently uses block-chain. The company aims at optimizing cooperation with partners to reduce the lag experienced in the processes as well as make them cost-efficient (Li et al., 2020). The company also aims at reducing the duration taken in order-reconciliation from50 days to around a week. A well-coordinated inter-organizational transparent ledger will provide real-time insights to all the transactions done by all partners within its supply network.

One of its major bottling companies is the Coca Cola Enterprises (CCE) that has production, bottling and distribution rights in most European rights. The company recently launched the Genesys program in its 17 European plants (Tate & Ellram, 2019). This is a Systems Applications and Products (SAP) enabled system that will deliver technological solutions as well as enable training of users on the new processes. It will result to an improvement in the required speed of deployment. This program has shortened the cycle time in the global supply chain processes, boosted visibility and improved the decision-making process.

The company promotes local sourcing among its partners to keep the supply chain short and fast, to keep up with the demand. It also supports its partners in sourcing for new investments that can improve the efficiency of its operations (Tate & Ellram, 2019). An example is automatic storage and retrieval system at a distribution center owned by Coca Cola enterprises in Dongen, Netherlands (Bhardwaj, 2016). It is also testing new technology such as 3D printing and Bluetooth beacon technology.

The supply chain should improve on its communication channel with the retail partners. The productions systems should be well linked with the retail partners to know when to raise or lower capacity and meet demand peaks through cross-linked communication channels. This systems should also be localized.

Having a global supply chain network, the company should focus on how to continuously modernize and optimize its supply chain. It should lay a keen emphasis on how its partners are managed to prevent any inefficiencies (Bhardwaj, 2016). It should also ensure maintenance of smooth communication with the partners and subsequently smooth distribution until the point of sale.

The company should also embrace sustainable processes of utilizing corporate social responsibility by addressing environmental issues and appealing to their customers to do the same. Packaging its products in plastic bottles has made it one of the largest contributors of plastic in the globe. It should also use sustainable fuels on its supply chain conduits such as trucks to reduce carbon emission. Lastly, the company should also develop innovations on use of carbon (IV) oxide from the atmospheres for its carbonation to reduce the effect of global climate change.

References

Bhardwaj, B. R. (2016). Role of green policy on sustainable supply chain management. Benchmarking: An International Journal.

Bowers, M. R., Petrie, A., & Holcomb, M. C. (2017). Unleashing the potential of supply chain analytics. MIT Sloan Management Review, 59(1), 14.

Li, H., Shao, J., & Zhu, S. X. (2020). Impacts of power dynamics and gray markets on supply chains. International Journal of Production Economics, 222, 107488.

Tate, W. L., & Ellram, L. M. (2019). Sustainable supply chains and social networks: an overview. In Handbook on the Sustainable Supply Chain. Edward Elgar Publishing.