Inbound logistics for the Pepsi and Coca Cola consisted of largely the same operations. Both companies purchase their own ingredients through use of future contracts (to avoid market volatility) and produce their concentrate from their own facilities. Once this is done, these companies send their concentrate out to bottlers upon approval of contract for bottling company. Once the bottling company receives the shipment of concentration, it is diluted to the correct concentration by adding the correct amount of carbonated water, and sugar, and bottled for sale. This is done for two reasons. One reason is so that Pepsi and Coca Cola can maintain their exact mix of ingredients as a well-kept secret, and not let the bottling companies know what exactly goes into their product. This affects the image of the product, and preserves it as something of higher value, and actually applies a sense of prestige to the Pepsi and Coca Cola products that are kept such excellent secrets. Inbound Logistics (Suppliers)
Some of Coca Cola's most notable suppliers include Spherion, Jones Lang LaSalle, IBM, Ogilvy and Mather, IMI Cornelius, and Prudential. These companies provide Coca Cola with materials such as ingredients, packaging and machinery. In order to ensure that these materials are in satisfactory condition, Coca-cola has put certain standards in place which these suppliers must adhere to (The Supplier Guiding Principles). These include: compliance with laws and standards, laws and regulations, freedom of association and collective bargaining, forced and child labor, abuse of labor, discrimination, wages and benefits, work hours and overtime, health and safety, environment, and demonstration of compliance (Coca Cola 2006).