OPERATION MANAGEMENT ON SUPPLY CHAIN MANAGEMENT OF COCA COLA

SUBMITTED TO:- SUBMITTED BY:-Prof. M S Kumar Pavan Kumar Gautam PGFA1431

Supply Chain Management(SCM) is the management of the flow of goods and services. It includes the movement and storage ofraw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and nodebusinessesare involved in the provision ofproductsandservices required by end customers in asupply chain. Supply chain management has been defined as the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.Supply chain management is a cross-functional approach that includes managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end consumer. As organizations strive to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other firms that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing managerial control of daily logistics operations. Less control and more supply chain partners led to the creation of the concept of supply chain management. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement.Supply chain management professionals play a role in all kinds of organizations - manufacturers, retailers, transportation companies, third party logistics firms, government agencies and service firms.Successful supply chain professionals are typically detailed-oriented with an ability to prioritize, plan and organize. In addition, they are usually quick-learners, possess excellent communication skills, can effectively manage relationships and work in teams, and effective problem-solvers.What kinds of people pursue SCM degrees?The profiles of SCM professionals are varied, but in general, such individuals possess many of the following traits: good problem solving skills ability to effectively manage time and resources a clear vision of the big picture as well as the small details a desire to work closely with other people excellent communication skills ability to think strategically about technology a desire to take responsibility for developing and implementing their own ideasSupply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems, and shared information. Operating an integrated supply chain requires a continuous information flow. However, in many companies, management has concluded that optimizing product flows cannot be accomplished without implementing a process approach. The key supply chain processes stated by Lambert (2004)are: Customer relationship management Customer service management Demand management style Order fulfillment Manufacturing flow management Supplier relationship management Product development and commercialization Returns management.One could suggest other critical supply business processes that combine these processes stated by Lambert, such as: Customerservice management Procurement Product development and commercialization Manufacturing flow management/support Physical distribution Outsourcing/partnerships Performance measurement Warehousing management

Process of Supply Chain Management

Customer ManagementMaterial Flow/Information Flow

SupplierManagement

ConversionsSchedule/ Resources

Delivery

Stock Deployment

SCM team flawlessly execute the following processes: Planning theplanprocess seeks to create effective long- and short-range supply chain strategies. From the design of the supply chain network to the prediction of customer demand, supply chain leaders need to develop integrated supply chain strategies. Procurement thebuyprocess focuses on the purchase of required raw materials, components, and goods. As a consumer, you're pretty familiar with buying stuff! Production themakeprocess involves the manufacture, conversion, or assembly of materials into finished goods or parts for other products. Supply chain managers provide production support and ensure that key materials are available when needed. Distribution themoveprocess manages the logistical flow of goods across the supply chain. Transportation companies, third party logistics firms, and others ensure that goods are flowing quickly and safely toward the point of demand. Customer Interface thedemandprocess revolves around all the issues that are related to planning customer interactions, satisfying their needs, and fulfilling orders perfectly.Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed)Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-basedapplication service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service.Supply chain management flows can be divided into three main flows: The product flow The information flow The finances flowThe product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.There are two main types of SCM software: planning applications and execution applications. Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties.Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems, ordata warehouses, at several different sites andcompanies.

Supply chain management is facilitated by : Processes Structure TechnologySupply Chain and Demand Chain Demand chain is defined as the system by which organizations manage sales and distribution of products and services to end users. Conceptually incorrect to look at demand chain separately Look at the pipe as a whole.SUPPLY CHAIN DRIVERS Demanding customers Shrinking product life cycles Proliferating product offerings Growing retailer power in some cases Doctrine of core competency Emergence of specialized logistics providers Globalization Information technology

Supply Chain Goals Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on Revenue growth Better asset utilization Cost reductionCritical Success Factors today Cross functional management and planning skills Ability to define, measure and manage service requirements by market segment Information systems Relationship management and win-win orientation.

Coca Cola Supply Chain Process

A typical supply chain process of coca cola involves a variety of stages: Customers Retailers Wholesales/distributors Manufacturers/ Plants Component/raw material suppliersBottle Plant of Coca Cola

Value Chain Process

PUTTING IN PLACE A WELL OILED SUPPLY CHAINSupply chain as an efficient customer satisfying processThe steps involvedStep1- Designing the supply chainDetermine the supply chain networkIdentify the levels of service requiredStep 2 - Optimizing the supply chainDetermine pathways from suppliers to the end customerCustomer markets to Distribution centersDistribution centers to production plantsRaw material sources to production plantsIdentify constraints at vendors, plants and distribution centersGet the big picturePlan the procurement, production and distribution of product groups rather than individual products in large time periods- quarters or years .

Step 3- Material flow planningDetermine the exact flow and timing of materialsArrive at decisions by working back from the projected demand through the supply chain to the raw material resourcesTechniquesStep 4 - Transaction processing and short term schedulingCustomer orders arrive at randomThis is a day to day accounting system which tracks and schedules every order to meet customer demandOrder entry, order fulfillment and physical replenishment.Information flows in Supply Chain Management Information is overriding element Need for databases Master files: Information about customers, products, materials, suppliers, transportation, production and distribution data- do not require frequent processing Status files- heart of transaction processing- track orders and infrastructure status- updated daily.Essentially using the same information to make all plans right from structuring the network to processing every day supply chain tasks.Issues in customer management Penetration vs Spread Concentration is necessary to commit the necessary resources for true customer integration Depth of customer contactR&D - sharing information vs developing new products togetherLogistics - Pros and cons of methods of transportation vs reengineering the logistics process

While doing my SIP in Coca Cola I will focus on to understand the inventory,warehouse system and information flow try to find out the solutions of these problems if possible it pertains. Inventory and Warehouse system will include A-B-C classification Studying the demand and finding the best method for forecasting. Studying the inventory problems. Building the dynamic inventory model. Determination of economic order quantity. Determination of stock level. Determination of safety stocks. Selecting the proper system of ordering for inventory. Ending up with the final inventory model, which will be solution for our problem with numerical example.

Information Flow System will include Detecting and identifying the problems and the area for improvement. Build the information system for the company with the improvements and modifications. Ending up with final information flow system, which will be the solution for our problem. The information model deals with the integration of supply chain members and concentrates on the flow of information among the chain members. Information technology plays a vital role for increasing collaboration among supply chain members. From the information point of view the effective supply chain management must provide the right amount of relevant information to the right person at the right time. Information is the key to successful supply-chain management because no product flows until information flows.

ConclusionIn order to have successful and smooth supply chain process we should focus on following factors:- Segmentation of customers based on service needs Customization of logistics network Listen to signals of market demand and plan accordingly. Differentiate product close to the customer Source strategically Develop a supply chain wide technology strategy Accept channel spanning performance measures

Inventory and Warehouses system in Coca Cola A-B-C classification Studying the demand and finding the best method for forecasting. Studying the inventory problems. Building the dynamic inventory model. Determination of economic order quantity. Determination of stock level. Determination of safety stocks. Selecting the proper system of ordering for inventory. Ending up with the final inventory model, which will be solution for our problem with numerical example.

Supply Chain Management(SCM) is the management of the flow of goods and services. It includes the movement and storage ofraw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and nodebusinessesare involved in the provision ofproductsandservices required by end customers in asupply chain.Supply chain management has been defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.Supply Chain Management (SCM) includes all the activities that must take place to get the right product into the right consumers 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. SCM professionals are involved in every facet of the business process as they strive to achieve a sustainable competitive advantage by building and delivering products better, faster and cheaper.Supply chain management professionals play a role in all kinds of organizations - manufacturers, retailers, transportation companies, third party logistics firms, government agencies and service firms. Supply chain management, then, is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.The organizations that make up the supply chain are linked together through physical flows and information flows. Physical flows involve the transformation, movement, and storage of goods and materials. They are the most visible piece of the supply chain. But just as important are information flows. Information flows allow the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and material up and down the supply chain.Supply chain management is as much a philosophical approach as it is a body of tools and techniques, and typically requires a great deal of interaction and trust between companies to work. For right now, however, lets talk about three major developments that have broughtSCMto the forefront of managements attention. The information revolution Increased competition and globalization in todays markets Relationship management

A firmsSCMefforts start with the development and execution of a long-term supply chain strategy. Among other things, this strategy should: Identify what supply chains the firm wants to compete in. Help managers understand how the firm will provide value to the supply chain. Guide the selection of supply chain partners, including suppliers, subcontractors, transportation providers, and distributors.As firms struggle to understand what supply chains they compete in, it is often valuable to map the physical flows and information flows that make up these supply chains. From these maps, firms can begin to understand how they add value, and what information is needed to make the supply chain work in the most effective and efficient way possible.Supply chain management flows can be divided into three main flows: The product flow The information flow The finances flowThe product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.There are two main types of SCM software: planning applications and execution applications. Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties.Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database. What kinds of people pursue SCM degrees?The profiles of SCM professionals are varied, but in general, such individuals possess many of the following traits: good problem solving skills ability to effectively manage time and resources a clear vision of the big picture as well as the small details a desire to work closely with other people excellent communication skills ability to think strategically about technology a desire to take responsibility for developing and implementing their own ideas as systems, ordata warehouses, at several different sites and companies.Supply Chain ProcessCustomer ManagementMaterial Flow and Information Flow

SupplierManagement

Schedule /Resources

SsConversion

Delivery

Stock Deployment

Integrating SCM Applications