Coca Cola Process Improvement Proposal
Started in Atlanta, Georgia, the company is now incorporated in Delaware and has operated a franchised distribution system for over 130 years. The company manufactures the concentrate and this product is shipped to the various different bottling companies in different countries, in every continent who hold exclusive territories. Currently, the company's products are sold in more than 200 countries throughout the world and more than 50 billion bottles of its various products are sold on a daily basis. Over the years, the company has been involved in a number of major acquisitions and if this is the trend, it can only be expected that the reach that the company has will only continue to grow. The Manufacturing Process-The Bottling Process The purpose of this essay is to analyze a manufacturing process of the company, which is the bottling process, as well as determine the weaknesses in the process, and the different ways through which the same can be improved.
Step-by-step Description of the Process and Inefficiencies Before understanding any processes that the product undergoes within the company facilities, it is important to understand the manufacturing method that is employed by the company. There are five major manufacturing process structures and they include; job shop, project, batch process, assembly line as well as continuous flow. The Coca-Cola company uses the continuous flow method and with good reason. This method of manufacturing is best suited for companies whose materials are constantly undergoing motion. This means undergoing chemical and physical changes with each stage addition to the raw material in order for the final product to be a summation of each process of the stages. The seventh step of the process is the laser inspection.
In this stage, the bottles are inspected for whether they are over or underfilled in the previous stages. The eighth step involves encoding and this is where the bottles are filled with closure. The ninth stage involves the grouping together of the filled bottles into cases. The tenth step of the process involves wrapping the cases in a plastic sheet. One main issue affecting the Continuous Flow Management processes such as the one that is implemented by the Coca-Cola company is the fact that an inefficiency at one stage of the production process causes efficiencies in other segments as well. The first inefficiency noted above is inventory management with the company trying to hedge the unreliability of suppliers with an overt demand of inventory.
This causes an inefficiency with the forecasting processes since production at the company is completely dependent on forecasting demand. Overproduction or underproduction of the beverage leads to loses for the company. This points to inefficiencies in inventory management. Subjective/Objective Forecasting Methodologies The current process employed by bottling companies contracted by Coca-Cola depends greatly on forecasting but does not have a solid forecasting technique in place to exact the process. The recommended solution would be to employ a hybrid forecasting method combining both subjective and objective forecasting methods. Forecasting is important for the company for the purposes of inventory management and well as to approximate sales so as to ensure quality control and manage costs. Combining both methods of forecasting methods will allow the company to enjoy the best of both worlds (Kotler, 2000).
With objective forecasting methods such as extrapolation allows the forecaster to based the forecasting analysis on data while subjective forecasting is similar to market research. The companies should ideally look at competitor processes in order to find a superior process and improving based on innovation and not replicating (Kotler, 2000). An example of a perfect tool that can be used in this process is the benchmarking surveys and the company can hire external specialist support to gather the necessary data for comparison. Possible Road Blocks in Implementing the Process Change There are some challenges that should be considered when it comes changing the production process. One of the major challenges that affect major changes in organizations regardless of whether they are a huge company like Coca-Cola, is the cash flow.
The implementation of the modifications to the process would require that the company spends a substantial amount to implement the changes. The implementation of the process would indeed require that the process experiences some downtime for the new changes to be put in place and also ensure that the new process is evaluated for efficiency. This would limit production for a company whose daily production requirements need to be met. The roadblocks listed above are some of the most relevant that would potentially affect the implementation of the policy change. While these should be considered by the company first and foremost, there are other factors that the company should consider and the list above is by no means exhaustive. Benefits of the Improved Process After the process is improved, one of the major benefits that will be seen is better capacity management (Blackstone & Cox, 2002).
The company will also benefit from reduced costs of production. One of the inefficiencies mentioned above is the fact that the company has been having a problem when it comes to forecasting in terms of demand for the product, therefore, affecting the demand for inventory. The plan proposes the usage of both objective and subjective forecasting methods so as to capitalize on the benefits of both methods of forecasting as well as minimize the demerits that characterize the same (Wysocki, 2004). Proper forecasting is of vital importance to manufacturing companies such as Coca-Cola. The combination of both objective and subjective methods will affect most of the other stages of the process in a positive manner. Upper Saddle River, N. J. : Prentice Hall.
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