Things Go Better With Coke’s Supply Chain

Coca-Cola had a business pain and a goal. To go from one to the other, the Atlanta-based soft-drink giant needed a plan.

Coke’s global supply chain is a vastly complex network of plants, bottlers, warehouses and customers, along with multiple product lines following multiple supply chains with differing objectives. The challenge: achieving consistent reporting and having real-time information on which to base tactical and strategic decision making.

“The object was a supply chain and decision-making strategy [achieved] through fast information and metrics,” said Venktesh (Venky) Kumar, Global Leader of Supply Chain Consulting, for ITC Infotech. “Coke couldn’t get consistent metrics across the plants. It was difficult to get accurate information to compare. Plus, Coke had new ventures; reporting rules weren’t consistent and some people went back to spread sheets and had only their own information.”

Because the same set of rules was not used throughout the company, the existing metrics system wasn’t sufficient for Coke. Even when using different KPI’s (Key Performance Indicators), simple things like stock out and fill rate were different.

Despite implementation of Advanced Planning & Optimization (APO) and SAP software, Coke still struggled with the right intelligence that was relevant for its routes and markets.

“They said, ‘Can you innovate with us?’ recalled L N Balaji, President of U.S. Operations for ITC Infotech. “So we united our supply chain management with SAP.”

The system went live with Coca-Cola North America, combining SAP BusinessObjects with ITC’s Supply Chain Performance Management. The implementation – completed in cooperation with SAP Consulting – has been rolled out across the North American region and is a key milestone for Coca-Cola, allowing it to effectively align supply chain goals with business goals, providing visibility into end-to-end supply chain processes to help drive process consistency.

Coke established a set of supply chain guiding principles it wanted implemented:

  • Focus on metrics needing no manual intervention
  • Focus on metrics to drive profit consistency and metric consistency across the supply chain
  • Focus on industry standards that are not Coke specific
  • Develop a robust system for reporting hierarchies that change when business changes

“SAP BusinessObjects Supply Chain Performance Management aligns very well with the guiding principles of our project,” said Russ Rodal, Metrics Program Manager, Coca-Cola Co. “The application tightly follows the Supply Chain Council’s SCOR model, and while it allows for customizing the metrics, we are trying not to. And because the SAP NetWeaver Business Warehouse captures significant details about business transactions, we can aggregate the data on the fly in the application and not be bound by a static data model. So when the business re-organizes, we change dashboards, not solution configuration.”

The project began with Coca-Cola North America in Atlanta and will be rolled out thereafter. After the planning stages, it went live in November, 2010. ITC and SAP created what they call a “different” solution because of understanding of metrics and score management framework and change management, says ITC’s Kumar. “We installed a three-phase approach:

1. Proof of concept: Primarily to validate functionality, scalability and flexibility in Coke’s environment, which we completed early in 2010;

2. Foundation phase: Create a robust foundation for metrics and reporting, a measurement that’s easy to implement out of the box. We completed that in November.

3. Exploitation phase: Identify long-term metrics and improve them on an ongoing basis. This step is under way.”

The implementation of SAP BusinessObjects Supply Chain Performance Management was begun by ITC Infotech in July 2010. A project team of 12 experts was involved in the implementation, focusing on supply chain, business warehouse, enterprise portal, delivery and project management. After multiple rounds of tests and architectural reviews, the application today reports the supply chain performance for the areas of demand planning, production and customer service. The performance scores are available on a real-time basis and users have the flexibility to create their own reports and dashboards based on their areas of interest and priority.

“With globally extended and complex supply chains, it’s critical for companies to enable actionable insight that supports continuous improvement with an end-to-end view of performance and root-cause analysis,” said Thad Dungan, vice president, Solution Management at SAP. “Aligning supply chain strategy with corporate objectives across key lines of business in a timely and cost-effective manner can make all the difference in achieving superior supply chain performance.”

As the North American application advances, Coca-Cola is planning a global rollout that will help it map, manage and monitor supply chain strategy, have consistent definition and common data sources for metrics. The strategy will help empower Coke’s supply chain strategy and tactical decision making through real-time access to critical information.

Takeaways:

  • Align supply chain strategies with corporate objectives
  • Focus on metrics to drive profit consistency and metric consistency across the supply chain
  • Support continuous improvement with an end-to-end view of performance and root-cause analysis

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