Product Supply Chain for Cocacola

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PRODUCT SUPPLY SYSTEM
Brian Kelley
Chief Product Supply Officer Coca-Cola Refreshments

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CCR Integration:
Leveraging Our Size And Capabilities To Deliver Sustainable Growth From
Supply Chain Ops CCE North America Operations

Use CCE logo
Part of CCE Headquarters

Foodservice

Minute Maid

From Bottling Investments Group

Odwalla Commercial Leadership Functions (HR, Finance, Legal, IT, PAC) From

2

CCR Integration:
Make It Work, Make It Better, Make It Best  Built for growth

 Nationally integrated plants, logistics, and planning
 Product supply excellence in all markets  Utilize best practices from all sources  Common systems and metrics MAKE IT WORK MAKE IT BETTER

MAKE IT BEST

 Strong talent development and career paths

3

The CCR Product Supply System
Manufacturing
78 Plants 6 Mfg Processes 290 Lines

Field Operations
416 Distribution Centers 5 Billion Cases 33K Fleet – 22MM Deliveries

Standardize

FY 2010

Procurement
$13 Billion Buy Coca-Cola Recycling Customer Business Solutions Coca-Cola Bottlers’ Sales and Services

Zero Defects

Transportation, Planning and Commercialization
2,000+ SKUs 7 Product Categories 1.6MM Inbound Deliveries

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The CCR Product Supply System Objective

People

To Become “A Competitively Advantaged Product Supply System”

Partners

Productivity

Planet

Portfolio

Profit

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THREE CULTURAL MANDATES

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The Power Of Standardization
Standardizes: – Processes

– Controls
– Metrics

Enables:
– Less variation – Speed of improvement – Leveraging the network effect

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The Power Of Standardization: Warehouse Optimization
 Standardize 97 processes  Consistent metrics  Replicate best practices

 >$20MM annual savings  Improved service  Improved safety

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The Power Of Standardization: The Network Effect
One Percentage Point Improvement Yields:
- Cost Of Goods Sold - Manufacturing Cost - Out Of Stock - On Time In Full - Fuel Usage ~$2MM ~$20MM

- Carbon Usage
- Water Usage - Worker’s Compensation - Returns - 1 day Cash-To-Cash Cycle Time 9

~300MM liters

Zero Defect Mentality
 Redefine expectations in all areas  World’s best is the benchmark  Engaged, passionate culture

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The Genius Of “AND”…
Customer Satisfaction
Inventory Reduction Cost Control Successful Launches

Productivity
On Time In Full Quality Low Breakage, Damage & Loss

Sustainability Improvement
Supplier Quality

Lower Cost
Ongoing Value

Operational Excellence
Zero Safety Defects

Associate Engagement
Productivity
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CUSTOMER SERVICE

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Service: On Time In Full Trend – U.S. Regions
100%
95% 90% 85% 80% 75% 70% 65% 60%
2010 OTIF % 2011 OTIF % 2011 OTIF Goal

55%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Week

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Service: Warehouse Out-Of-Stock Trend – U.S. Regions
1.6%
2010 OOS %

1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2%

2011 OOS % 2011 OOS Goal

0.0% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Week

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Service: National Foodservice And On-Premise
CCR North America – June 2011 YTD
2011 On Time Performance
100.0% 99.5% 99.0% 98.5% 98.0% 97.5% 97.0% 96.5% 96.0% 95.5% 95.0% 1 Total 95.8% 2 96.4% 3 99.4% 4 99.1% 5 99.0% 6 98.6% 97.5% 1 Total 99.2% 2 99.2% 3 99.3% 98.0% 98.5% 99.0% 99.5% 100.0%

Customer Example

2011 Fill Rate Performance

4 99.3%

5 99.3%

6 99.2%

On Time and Fill Rate performance remain above agreed-to success rates 15

Service: National Foodservice And On-Premise
CCR North America – June 2011 YTD

Customer Example

Average order size continues to decrease, delivery frequency continues to increase.

Average Order Size
2010 2011

Average Days Between Deliveries
2010 2011

Jan

Feb

Mar

Apr

May

Jun

Jan

Feb

Mar

Apr

May

Jun

• Average order size: down ~10% vs. prior year • Delivery frequency: up ~8% vs. prior year...
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