Group Members

Nosharwan Khalid
12-arid-2546
Shahjehan Khan
12-arid-2547
Summiya Mukhtar
12-arid-1665
Shailla Anjum
12-arid-1759
Zill-e-Huma
12-arid-1625
Saira Altaf
12-arid-1659
Topic
Supply Chain Management at

INTRODUCTION
The Coca-Cola Company is an American multinational beverage.
Headquartered in Atlanta, Georgia.
Dr. John Syth Permberton a pharmacist produced the syrup of Coca-Cola in 1886. He took the
syrup to the Jacobs Pharmacy in 1889 where it was placed on sale as Coca-Cola fountain drink
for five cents of a glass.
The Coca-Cola formula and brand was bought in 1889 by Asa Griggs Candler and he
incorporated The Coca-Cola Company in 1892.
The Coca-Cola Corporation entered in Pakistan market in 1953 after purchasing local plant
located in Karachi, Hyderabad, Gujranwala, and Sialkot.
In 1970, Fanta and Sprite were introduced in Pakistan. The Coke Company entered into the
entertainment business in 1982. In, 1984 Coke foundation was established to utilize resources
to benefits society.

 Current CEO Muhtar Kent

Over 146,000 employees around the world
More than 500 brands in over 200 countries or territories
More than 1.7 billion servings per day
Sponsorship: Olympics, FIFA, etc.
Charity and contributions 1% from the total income
The Coca Cola Foundation, 1984. Financial support for improving
society.
2002-2010 more than $690 millions of contribution and charity.

Coca Cola in PAKISTAN

Strategies at coco cola:

Maintaining
its
differentiatio
n strategy.

Differentiation
by utilizing soft
sell approach.

CONT.
Company has successfully positioned it self on the following standards:

Quality
&innovation

Strong
brand
portfolio

Strength is
communica
tion

Fun &enjoy

LOCATION
Location selection decision of Multan beverages was done in 1964 with the help of
parent company. This selection seems to be dependent on following considerations.
Multan Center of Southern Punjab
Southern Punjab is highly populated area of Pakistan. It possesses plenty of
potential for consumer product companies.
The corporate decision-makers also realized the fact and made the decision to start
production in Multan.
Multan is the center of the Southern Punjab so is southern Punjab Multan was
selected for facility locations.
Due to centralization proximity to customers on all these sales of Southern Punjab
become easy.
This factor also decreases high transportation expenses because Beverage Company
like Coca-Cola could not afford to be at a long distance from the market.

PRODUCTION PROCESS
Production process at Multan beverages could be divided into following heads.
Purchase of Bottles
Collection of Bottles
Washing of Bottles
Inspection section (empty bottles)
Soak process
Light room (empty bottles)
Filling of bottles
Light room (Filled bottles)
Loading
Packing

MANUFACTURING OF COCA-COLA
Filling
a.
a.

Capping

Level detecting Warming

Depalletizer

Labeling

Step 4

b.
b.

Inspection

Bottling & Distribution

Coca-Cola beverage

Decoder on tray Shrink Wrapper

Warming

Attach Bar Date coder

Tray Packer
code stickeron bottle

Lahore

INVENTORY POLICY
The COCA COLA BEVERAGES PAKISTAN is currently operating and using the
FIFO (first in first out) method for its inventories in the accounts and finance
departments. However the actual information of the inventories can not be disclosed
and provided here as it is the companys confidential matter.
Coca-Cola Company determines cost on the basis of the average cost or first-in, firstout methods(FIFO).
First-in-first-out stock valuation
A-B-C classification
Firms normally try to keep stock moving in Assumes that the first inventory
purchased is the first inventory sold.
line with purchases dates to prevent old items from being shop-soiled, outdated.

RAW MATERIAL / PROCUREMENT

Concentrate
Multan beverages have to get the concentrate from Lahore, which is the Franchiser
Company of Coca-Cola. This concentrate is a major component of the finished goods.
The parent company is itself quality conscious company so Multan beverage has never
had any complaint about the concentrate quality.
Sugar
Sugar is purchased from different suppliers. When there is major or regular need then
order is placed to the Ittefaq sugar mills or Sheikhupura Sugar Mills.
Company also receives the certificate of analysis from the supplier before delivery.
Sugar is also tested in the lab of the company.
Very high standards are kept to process. the water and then several checks are made
whether the quality of water is up to the required standard or not.

WORK IN PROCESS (LAHORE)

Syrup treatment
The syrup produced is treated at about 9.2 F.H to make hygienic. This process
makes the quality of product more reliable. Coke Company already has given the
standards to check the syrup.
Lab test
When carbon dioxide and ammonia are added to the syrup then a lab test is made
of the ingredients of the products. This test is most important test as it is the final
test before the converted into the finished product.

FINISHED PRODUCT
Finished good test
Finished product is randomly selected and tested in the lab. This test also checks the
ingredients and preservation status of the bottles. In the finished goods test two type of test
are used to maintain the quality of finished products.
Appraisal
Internal failure
External failure
Multan Beverages company have not any external failure cost but they have internal
failure cost associated with finished products inspection. When the bottles are under or
over filled, higher or lower sugar quantity and higher or lower gas volume than standard
then the internal failure cost incur. Company also has Appraisal cost which is related to
detect the causes before the product is going to complete.

SAFETY STOCK
The company does maintain the safety stock of all the raw material used, but does
not have any dead line for the safety stock. The average safety stock of concentrate
and sugar is as follows.
Concentrate
One week safety stock
Sugar
Five days safety stock

LEAD-TIME
Lead-time is the time between order reached and orders received. Lead-time for
different raw materials in the Coca-Cola Company is as follows
Concentrate
Two days lead-time
Sugar
One day lead time
Co2
Three day lead time
Consideration for other locally available raw material is not troublesome as this
material are commonly available in the market.

PRICING STRATEGY
Following factors Coca Cola kept in mind while determining the pricing strategy.
Price should be set according to the product demand of public.
Price should be that which gives the company maximum revenue.
Price should not be too low or too high than the price competitor is charging from their
customers otherwise nobody will buy your product.
Price must be keeping the view of your target market.
The price of Coca Cola, despite being market leader is the same as that of its competitor Pepsi
Cola. Sometimes, Pepsi places its customers into some psychological pricing strategies by
reducing a high priced bottle and consumers think that they save a lot of money from this.

PRICING STRATEGY Cont.

COMPETITION BASED PRICING APPROACH

Coca Cola has intense competition with neither Pepsi so its pricing cant exceed too much nor
decrease too much as compared to the price of Pepsi Cola. If price of the Coca Cola exceed too
much from the Pepsi then people will shift to the Pepsi Cola and on the other hand if the price of
Coca Cola decreases people might get the impression that its quality is also low.
PROMOTIONAL PRICING POLICY
Coca Cola has offered promotional prices very frequently. Especially on some occasion Coca Cola
reduces its rates like in Ramzan Coca Cola reduces its rate unto 5 Rupees on 1.5 liter bottle.
MARKET PENETRATION PRICING POLICY
Prices in beverage industry are determined by the consumer. In an economy like that of Pakistan,
consumers tend to switch towards a low priced product. Coca Colas objective is to target every
consumer of the country so Coca Cola has to set its prices at such a level which no one can offer to
its consumers. That is why Coca Cola charges the same prices as are being charged by its
competitors. Otherwise, consumers may go for Pepsi Cola in case of availability of Coca Cola at
relatively high price.

SOURCING
Sourcing There are three types of sourcing
Sole
Multiple
Single

Sole source of supplier implies that the organization is forces to use only one supplier such as
Patents, raw material location, only one organization producing items
Multiple Source is used of two or more suppliers for an item usually three suppliers are chosen, and
their portion of the business is a function of their performance in term of price, quality and delivery.
It is also eliminate disruption of supply duet strikes and other problems
Single sourcing is a planned decision by the organization to select one supplier for an item when
several sources are available. It results in large long term contracts and a partnering Relationship.

FACILITY LAYOUT
In Multan beverage was installed then due to limited space the washer placed in side
the production hall. Heat comes inside the production hall due to washer temperature.
This washer should be out side the hall for the health of employees.
The company realized this thing while installing the second unit. Now the washer of
second unit is placed out side the hall.
Other layout designing has been set according to the standards prescribed by the
parent company.

LOGISTICS
PARAMETERS
1) Average order size
a) Distributor to company
b) Retailer to Distributer

2) Order placement
a) Distributor to company
b) Retailer to distributer

3) Transit Time
4) Order frequency

Based on Demand, Season

Phone
Distributor Representative
2 Days
Daily

LOGISTICS Cont.
PARAMETERS
5) Inventory Maintained
6) Unsold/Damaged Merchandise
7) Technology
8) Mode of Transportation
(company to distributor)

9) Transportation Expenses
a) Company to Distributor
b) Distributor to retailer

10)Warehousing
a) Storage Capacity
b) Ownership

11) Stock keeping responsibility

1 day
Replaced
a) A/C Keeping
b) Stock keeping
c) Complaint Handling
Company vehicle

Company
Distributor
Minimum 30 m2
Owned / Rented
Stock keeper

Full Coverage - 59
Routes

No return
Retailers Loss

Owned & contracted vehicles

Retailer Handling

Transporting Vans
1 Driver + 2 Loaders

FLOW OF THE PRODUCT

On a
tablet or
manual
sheet

Cont.

Cannot
take more
than
order

Only cash
except for a
few

DISTRIBUTION CHANNELS
Coca Cola Company makes two types of selling
Direct selling
Indirect selling
DIRECT SELLING
In direct selling they supply their products in shops by using their own transports.
They have almost 450 vehicles to supply their bottles. In this type of selling
company have more profit margin.
INDIRECT SELLING
They have their whole sellers and agencies to cover all area. Because it is very
difficult for them to cover all area of Pakistan by their own so they have so many
whole sellers and agencies to assure their customers for availability of Coca Cola
products.

Cont.

Area wise distribution & promotion schemes

Focus on high traffic locations
Railway stations
Airports
Bus stand
Coke distributes using 2 routes
Direct
Indirect