Coca-Cola Supply Chain Management & Coca-Cola Facebook Analysis
Dr. R. LeWayne Johnson
Importance of Standardization in Supply Chain Management
Supply Chain Management (SCM) according to May School of Business at Texas A&M University is defined as the strategic management of supply chain activities to maximize customer value and achieve a sustainable includes all the activities that must take place to get the right product into the right consumer’s hands in the right quantity and at the right time – from raw materials extraction to consumer purchase. SCM focuses on planning and forecasting, purchasing, product assembly, moving, storage, distribution, sales and customer service. ...view middle of the document...
Roussos (2010) argued that standardizing the supply chain processes with a focus on keeping things simple and speedy certain supply chain costs can be minimized, and that “...all goods and services moving through the supply chain be unequivocally identifiable at all times...” (p. 4). Therefore, according to Roussos, by using worldwide data standards, open architecture infrastructure, common IT approaches, thus streamlining the supply chain management “...for globally unique product identifiers and product classification systems, combined with internet worked information services...” (p. 5) goods can be better tracked and more effective services to the customers’ can be provided.
Coke’s Sharing its Software Services with its Bottlers
Do you think Coke charges the bottlers for these software services? Cokes’ bottlers are integrate parts of its supply chain management process. In Cokes efforts to standardize its supply chain management with a goal of creating a standardized business and technology model across its product lines, integration into this model would be its bottlers. With some bottlers being independent franchises and not as profitable or as big as Coke, charging its bottlers for a software service that Coke implemented, and forcing them to create the requisite IT infrastructure to support this software change, with benefits for Coke, could pose a financial hardship on the bottlers. Coke in having a vested interest in making its operations more efficient by implement its new line of software services and by making this service free to its bottlers could potentially improve the quality and the performance of the bottlers and Coke itself.
This collaborative partnership and sharing with its bottlers could be a “Win-Win” situation for Coke by improving the speed by which its product get to the consumers, driving the cost of productions down and making it more profitable.
How is My Coke Rewards an Example of a Switching Cost?
Switching costs, according to Business Dictionary.Com (2013) are fixed costs incurred by a buyer when changing suppliers. Elsenmann (2011), suggested that “...switching costs are incremental expenditures, inconveniences, and risks incurred when a customer changes from one supplier to another...” (p. 1). The rationale for this cost is predicated on how close the buyer’s product specifications, production equipment, and purchasing cycle are tied to current suppliers’ products and operations. My Coke Rewards is an example of a switching cost because after acquiring points towards products offered by the Coke Rewards program, if a customer switches to Pepsi, they forfeit the points towards the products offered by Coke and must buy the Pepsi products and invest time in accumulating points for Pepsi. Through the Coke Rewards program customers have the opportunities of collecting points and redeeming them for everything from coupons and free Coca Cola to gift cards and products. Often, the...