Cola is still one of the most popular beverages in the world, and one of the most prominent brands is Coca-Cola. Every day in more than 200 countries, more than 1.9 billion servings of Coca-Cola are sold globally.
This is a huge challenge, logistically speaking. Thus, a fascinating supply chain, even though the secret recipe in this blog post is sadly not published. This is because the soft drink arrives in syrup form at the processing facilities of its partners and is then combined with carbon dioxide and sugar. The only minimal hint of the drink’s hidden composition is the name. In the original recipe, the name Coca-Cola is based on the ingredients used: coca leaves and cola beans.
The standard workflow inside the supply chain of Coca-Cola:
- The Atlanta headquarters of the Coca-Cola Corporation produces the condensed syrup and sells it to Coca-Cola Enterprises (CCE) or another bottling partner responsible for the North American and Canadian distribution of the substance.
- It is sent to a processing facility by the bottling partner, which combines the syrup with other ingredients, such as filtered water and sweeteners. After that, the finished product is packaged by the bottler and sold to distribution partners (stores, restaurants, vending machines, etc.)
- The Coca-Cola Export Company (TCCEC) partners around the world with local bottlers and distributes the drink to the local markets concerned.
Supply Chain Partner: A Multinational Network
Coca-Cola is a multinational corporation working on a local basis. This implies that there are about 225 bottling partners worldwide at present. The supply chain starts with the purchase of raw materials, which also include agricultural products (e.g. sugar cane or fruit) and water, in the case of Coca-Cola. The most important ingredients, such as water and sugar, are sourced locally, and only the type of sugar used can be chosen by the partners. Beet sugar is used primarily in Europe, cane sugar in Asia, and sugar from corn syrup in America.
The processing of concentrate, which is combined with water, sugar, and carbon dioxide by the bottling plants, is one of the first steps in Coca-Cola’s supply chain. At other facilities, the concentrate itself is processed. The secret recipe is stored in a safe in Atlanta, according to legend. The legend also notes that there should never be more than two individuals who have access to it and know the exact formula.
The bottlers box, sell and distribute the finished drinks to grocery stores, restaurants, cinemas, etc., after mixing. Therefore, it is of great importance to the company to control supplier relationships and to constantly track suppliers.
Successful Supply Chain promotes Emerging Technologies
The business needs to constantly improve its supply chain management with the aid of technologies like warehouse automation. Portfolio diversification and customization are also critical problems that the organization plans to pursue the use of emerging technology.
The Blockchain is the latest example of the use of emerging technology in the Coca-Cola supply chain. At present, in communication and cooperation with partners, there are still many intermediaries that slow down the processes and thus make them cost-intensive. As part of the cooperation with the technology company SAP, Coca-Cola wants to maximize its partners’ cooperation with 160,000 orders per day, create more transparency, and use blockchain technology to minimize costs. Coca-Cola already uses an IT website explicitly for bottlers to interact. For instance, if a partner has a bottleneck, the quantities can be purchased from another partner. Coca-Cola plans to reduce the length of order-reconciliation from 50 days to only a few days with the blockchain. An inter-organizational, open distributed ledger can provide real-time visibility into the transactions made on the network by all the various bottlers, producing revenue of more than $21 billion per year.
The processing of bottles from plastic waste from the beaches and the sea is another example of creative innovations at Coca Cola. Using 25 percent of recycled marine plastic, almost 300 sample bottles were made. To demonstrate the potential of improved recycling technologies, sample bottles were made. These revolutionary processes allow used plastic of any quality to be transformed back into high-quality plastic. The components of the plastic (polymers) are broken down in the process and impurities in the material are extracted. The individual components (monomers) can then be reassembled such that the resulting material is as good as new. This ensures that inferior plastics, which have also been incinerated or discarded in landfills before, will also stay in the material chain and again be used for food packaging. The amount of recyclable content in the cycle is increased by this. This, in turn, decreases the amount of new PET and thus the number of fossil materials necessary for the manufacture of new packaging, and may therefore contribute to major changes in the supply chain of Coca Cola.
Closing Views
Coca-Cola has been a global player for a long time. The business is therefore constantly refining and modernizing its supply chain. The supply chain relies on the management of partner firms because of the large sales of soft drinks. Smooth interaction with the partners and the resulting smooth delivery to the points of sale play an important role here.
Coca-Cola is and continues to be a very popular soft beverage. For this reason, it is even more remarkable that for decades the company has managed to keep its exact formula secret and thus also the exact steps of the supply chain of Coca-Cola. The supply chain is definitely a little mysterious and impressive because of the hidden formula.