Introduction
Consumer behavior and increased competition are factors that are forcing companies to develop new products and change their supply logistics faster that ever before. Reducing the product life cycle causes significant changes in the supply chain of a business. The company needs to adjust various processes for them to maintain the demand forces, stream line their supply networks and also improve reverse logistics. Some changes in demand may also require a company to clear the inventory of unwanted goods. Monitoring the inventory level provides insight into how a company can reduce the costs at the different phases of a product life cycle. Most importantly, the company is able to save costs as the product moves through different stages in its lifecycle that the manufacturing of raw material, production of the product, packaging and transportation, the in-use stage and finally the disposal, re-use and recycle stage (Dyckhoff, 2013). Coca Cola Company indicates cost savings and improvement in its reverse inventory management process at the corporate and other single units’ level during the life cycle of their products.
Product’s Life-cycle flow-chart
A product life cycle refers to a form of business analysis that helps in identifying the set of phases in the life of a commercial product. It is normally used to map a lifespan of a product in the phases through which it goes through from when it was first developed until after it is used or eliminate from the market. Life cycles includes the idea that particular products have different an interrelated logistical actions during their economic life-time. The figure below shows the different stages of the life time of a product that relates to the supply chain partners according to the current ecological and economic criteria. It includes the coordination, the support and the management activities of the company that ensures there is an efficient use of a product as well as an intelligent use of resources during the planning, initiation, production, operations and final phases of a product’s economic life time.
Stages Coca-Cola Products Life Cycle
Raw Materials Extraction
Production of Raw Materials, Components, Packaging Materials, chemicals etc
Disposal Recycling
Production, Bottling and Packing,
Disposal, Re-use and Recycling
Re-use
Transportation and Unpacking
In-use Period
Summary of both the forward and backward stages of the product life cycle
Complexity in the supply chain can lead to increased input in resources, time and effort. This increases result to high costs and also high impacts on the environment that will also harm the company financially. Product life cycle logistics treats both the forwards and backward logistic processes involved in the products economic life-time. Actions in one phase provide an insight in the better management of the downstream phases (Dekker, 2013). This approach will enable the company to avoid supply chains that are fragmented and also enable the make prompt decisions that will reduce the handling costs, increase the movement of its products and also improve the performance of its supply chain both in long term and in short term. Resources are utilized efficiently and products will move easily through their economic life-cycle. The forward logistics in the life cycle of the products include the production of the product by the company. a company needs to understand he needs of their customers together with the demand of their products and make the decisions on the level of output to produce. The next stage is bottling and packaging. Organizations need to ensure optimum efficiency when packaging. Packaging material is subject to environmental pollution. It is important to use material that can be recycled when packing. The next stage involved transportation to warehouses, retailer or customers depending on the most effective distribution channel. After the transportation the products are used by the customers and finally, they are disposed. End products may be reused while some materials such as the packaging materials can be recycled. Organizations must implement the best strategy to deal with the product at its end of life stage. Damaged products can be returned for repair. This increase customer loyalty and the company will benefits in terms of profit and sales. Recycling also reduces packaging costs and the costs relative to environmental pollution by the packaging materials (Dyckhoff, 2013).
How the stages of the product life cycle relate to Coca Cola company.
In the coca cola company, the company produces brands and flavors that are preferred by their customers. They produce in response to the tastes and preferences in the beverages category. Customers’ demands are constantly evolving and for the company to maintain profitability, they need to constantly evolve with the market by establishing and producing relevant brand priorities. During the packaging phase, the company uses the packaging that is important in meeting the needs of their consumers. In the company, packages comprise 22% of the total cost of goods sold. This percentage can be reduced through reducing raw material used and this can be through the reverse logistics of re-use and recycling of packaging materials (Dekker, 2013). The company also ensures that the containers used guarantee safety and quality. They work closely with their supplier to determine the new ways that will improve packaging and create mutual value. The company aims at increasing the renewable and recycled content of bottles and cans. In the distribution phase, the company uses its well established distribution network to sell their products across the world. After the customers use the products, the containers and bottles are renewed and recycled by the company as shown in the figure above.
Reverse life cycle of coca-cola products is well established. This has been beneficial to the company. The recycling of glass and metal bottles is well established in the company with the recycled content accounting for half the material in their bottled and cans (Jain, 2012). They also use refillable packaging. This enables the company to save on the cost of packaging materials. The company is also able to prove that it is environmentally friendly and this has created a positive image for the company. The company has in turn benefited by gaining more customers who have made the company very profitable. The company has also partnered with its suppliers and distributors in each region of operations to ensure that unwanted goods, damaged goods and packaging material are collected back from the end users (Jain, 2012).
Conclusion
Reverse logistics promote efficient and effective management of a supply chain. It includes activities such as physical movement of products, supplier partnership, supply chain information sharing and meeting customer demands. All these activities are found in the product life cycle. During the lifecycle, a company needs to estimate customer needs, establish effective and efficient deliveries, collaborate with suppliers in the supply chain and share relevant information. This will help a company in the planning, implementation and control a cost effective and efficient flow of raw material, inventory, finished goods and the related information from the company to the consumption point. Companies also engage in reverse logistics which involves moving goods from the end of life cycle for proper disposal, re-use or capturing value (Dekker, 2013). The revere logistic includes activities such as collecting unwanted or damaged stock to improve their quality and also the packaging material for the purpose of proper disposal, maximizing liquidation values, re-use them or to recycle them.
References
Dekker, R., Fleischmann, M., Inderfurth, K., & van Wassenhove, L. N. (Eds.). (2013). Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.
Dyckhoff, H., Lackes, R., & Reese, J. (Eds.). (2013). Supply chain management and reverse logistics. Springer Science & Business Media.
Jain, V. (2012). Special issue on sustainable supply chain management and reverse logistics. International Journal of Production Research, 50(5), 1239-1242.
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