Download - Final Operation Management Project
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06/06/2011
Presented by:Asia Shoukat(L1s10mbex0027)Ayesha Sadia(L1s10mbex0017)Nabeeha Raza(L1s10mbex0008)Rizwan Ellah ()Hafiz Shahzad(L1s10mbex0003)
Presented To: Mr. Marrif Sohail
OPERATIONMANAGEMENT Coca cola
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Contents
ACKNOWLEDGEMENT ................................................................................................. 4
COMPANY PROFILE ...................................................................................................... 5
1)MISSION ............................................................................................................... 5
HISTORY ..................................................................................................................... 6
OPERATING STRUCTURE ............................................................................................. 7
MANAGEMENT ............................................................................................................ 7
MARKET SHARE ........................................................................................................... 8
GLOBAL MARKET SHARE ............................................................................................. 8
PRODUCTS ............................................................................................................... 10
STRATEGIC PLANNING .............................................................................................. 11DESIGN .................................................................................................................... 12
FACILITIES LAYOUT ................................................................................................... 13
Objectives ............................................................................................................. 14
Types of layouts
............................................................................................................................ 14
Process Layout .................................................................................................. 15
Product Layout .................................................................................................. 15
Fixed-Position Layout ........................................................................................ 15Combination Layouts ......................................................................................... 15
Cellular Layout ................................................................................................... 15
Ingredient Delivery ................................................................................................ 15
Washing and Rinsing ............................................................................................. 16
Mixing and blending .............................................................................................. 16
Filling ..................................................................................................................... 17
Capping ................................................................................................................. 17
Labeling ................................................................................................................. 18
Coding ................................................................................................................... 18
Inspection .............................................................................................................. 19
Packaging .............................................................................................................. 19
Warehousing and Delivery .................................................................................... 19
Delivery to Agents and Machines .......................................................................... 20
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CONCLUSION ............................................................................................................ 20
REFERENCES ............................................................................................................. 21
APPENDIX ................................................................................................................. 22
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ACKNOWLEDGEMENT
This report has been prepared with a specific purpose in mind. It outlines the history
and current scenario of the Coca-Cola Company globally and locally. The first part ofthe study takes us through the present state of affairs of the beverage industry andCoca-Cola Company globally.
We think if any of us honestly reflects on who we are, how we got here, what we
think we might do well, and so forth, we discover a debt to others that spans written
history. The work of some unknown person makes our lives easier every day. We
believe it's appropriate to acknowledge all of these unknown persons; but it is also
necessary to acknowledge those people we know have directly shaped our lives and
our work.
First of all we would like to thank our teacher Mr. MAARIF.SOHAIL for their
guidance throughout the semester.
Then we would like to thank our friend and our group co-operation providing us the
information that was required for completion of this project.
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COMPANY PROFILE
Coca-Cola is the world's leading beverage company. The company is the world's
leading manufacturer, marketer, and distributor of nonalcoholic beverage
concentrates and syrups, used to produce nearly 500 beverage brands.
The company makes and distributes sodas, waters, fruit juice, teas and coffees
and energy drinks. Through the world's largest beverage distribution system,
consumers in more than 200 countries drink the company's beverages with over
1.6 billion servings each day.
Major brands include Coke, Diet Coke, Sprite, Bacardi, A&W, Minute Maid,
Dasani, Nestea, PowerAde, Vitamin Water, Simply and Georgia Coffee.
In 2010, revenues were $35.1 billion and net income was $11.8 billion.
Worldwide volume increased 5%.
The company acquired the North American operations of Coca-Cola Enterprises
in 2010, its largest bottler's, for $12.3 billion in cash and assumption of debt.
1)MISSIONOur Roadmap starts with our mission, which is enduring. It declares our purpose
as a company and serves as the standard against which we weigh our actions
and decisions.
To refresh the world...
To inspire moments of optimism and happiness...
To create value and make a difference.2) VISION
Our vision serves as the framework for our Roadmap and guides every
aspect of our business by describing what we need to accomplish in order
to continue achieving sustainable, quality growth.
People: Be a great place to work where people are inspired to be the best
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they can be.
Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
Partners: Nurture a winning network of customers and suppliers,
together we create mutual, enduring value.
Planet: Be a responsible citizen that makes a difference by helping build
and support sustainable communities.
Profit: Maximize long-term return to shareowners while being mindful of
our overall responsibilities.
Productivity: Be a highly effective, lean and fast-moving organization.
HISTORY
Coca-Cola Enterprises, established in 1986, is a young company by the
standards of the Coca-Cola system. Yet each of its franchises has a strong
heritage in the traditions of Coca-Cola that is the foundation for this
Company.
The Coca-Cola Company traces its beginning to 1886, when an Atlanta
pharmacist, Dr. John Pemberton, began to produce Coca-Cola syrup for sale
in fountain drinks. However the bottling business began in 1899 when twoChattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead,
secured the exclusive rights to bottle and sell Coca-Cola for most of the
United States from The Coca-Cola Company.
The Coca-Cola bottling system continued to operate as independent, local
businesses until the early 1980s when bottling franchises began to
consolidate. In 1986, The Coca-Cola Company merged some of its company-
owned operations with two large ownership groups that were for sale, the
John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to
form Coca-Cola Enterprises Inc. The Company offered its stock to the public
on November 21, 1986, at a split-adjusted price of $5.50 a share. On anannual basis, total unit case sales were 880,000 in 1986.
In December 1991, a merger between Coca-Cola Enterprises and the
Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger, stronger
Company, again helping accelerate bottler consolidation. As part of the
merger, the senior management team of Johnston assumed responsibility
for managing the Company, and began a dramatic, successful restructuring
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in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were
$5 billion
OPERATING STRUCTURE
MANAGEMENTThe hierarchy of Coca Cola Company is as follows.
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V P , C u s to m e r
D e v e lo p m e n t
(N ita P e n n a rd t)
O P E R A T IO N S
(G le n n G e m m ill)F IN A N C E
(M a tt H o ffe r)
H R
(S to rm y B ro w n)
S A L E S
(C h ri s tin e D o d g e )
S p e c ia liz e d
S a le s T ea m s
C u st o m e r
S e rv ice
W o rk fo rc e
D e ve lo p m e n t
C u s to m e r A ctio n C e n
A n n a p o lis
(M a r ia K lu g )
S al e s
O p e ra tio n s
T ra in in g &
C o m m un ic a tio n
Q ua lity
A ssu ra nc e
W o rk fo rce
O pt im iza t io n
C u st o m e r
S u p p o rt
( B o b C a n in o )
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MARKET SHARE
Being the biggest company in the soft drink industry, Coca Cola enjoys the
largest market share. This company controls about 59% of the world market.
GLOBAL MARKET SHARE
The following table can show the worldwide operating segments.
Unit case growthNon-
alcoholic
Drink
All commercial
Beverages
10 yearcompound
annual growth
5-year compoundannual growth 2001 annualgrowth 2002 2002
Compa
ny
Industr
y
Compa
ny
Industr
y
Compa
ny
Industr
y
Company
share
Compa
ny
share
Compa
ny per
capita
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Chairman
Board of
governors
Vice Chairman and chief
operating officer
Executive Vice
Presidents
Senior Vice Presidents
Vice Presidents
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Income
6% 5% 5% 5% 4% 4% 18% 9% 70
This shows that the market of the company is geographically vast and it is
controlling it with great success. In 2002, the company grew their carbonated soft-
drink business by nearly 250 million unit cases and generated record volumes.
Because carbonated soft drinks are the largest growth segment within the
nonalcoholic ready-to-drink beverage category measured by volume, that is why
they are focusing more on this and they are continually increasing the pace
because they know that accelerating this pace is crucial to their future success.
Thus they are increasing their market day by day. The operation income earned by
Coca Cola Company can be illustrated by the following pie chart.
This strategy has worked a lot and it has helped them to become the Worlds
leading Soft Drink Company. The global unit sale of the Coca Cola Company is
increasing from the last ten years. The data of the global unit sale of the Coca Cola
Company can be represented by following chart.
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(Figure)
0
2
4
6
8
10
12
1971 1981 1991 2002
unit sale in billions
So there is positive growth in the market of the Coca Cola Company. There is a worldwide volume increase by 4%
with strong international growth of 5%. This is only due to the innovative marketing programmers, which has
deepened the relationship of the customers and Coca Cola. The financial health and success of their bottling
partners is a critical component of The Coca-Cola Company's ability to build and
deliver leading brands.
In 2002, the company had worked with their bottlers to turn good intentions into
reality by improving the system economics. The results in 2002 reflect this steadily
improving and mutually constructive relationship between the Company and their
bottling partners. The main reason behind this relationship is to continue realizing
shared opportunities for growth, with closer coordination of operations including
customer relationships, logistics and production.
PRODUCTS
There are different brands of the Coca Cola Company, which are currently in use
throughout the world. This company not only deals in the carbonated drinks but alsoother drinks. While launching its product, the marketing team considers the culture
of the country.
Major brands of coca cola
Coke
Sprite
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Fanta
Diet coke
Coke classic
STRATEGIC PLANNING
In the year 2002, the company had a great success, as the strategy worked which
resulted in making Coca Cola Company the worlds leading company. In 2001,
company accomplished the crust of its strategy as
Worldwide volume increased by 4 percent with strong international growth of 5
percent and clear signs that our North American business is growing solidly and
predictable.
Earnings per share grew by 82 percent, as we delivered on our commitment tocreate volume growth while aggressivelyReturn on common equity grew from 23 percent in 2000 to 38 percent this year.Return on capital increased from 16 percent in 2000 to 27 percent in 2001.
The company has generated free cash flow of $3.1 billion, up from $2.8 billion in2000, a clear indication of its underlying financial strength.
The strategy for the future of the company is very straightforward. The marketing
strategyfor the year 2002 is as follows,
Accelerate carbonated soft-drink growth, led by Coca-Cola.
Selectively broaden the family of beverage brands to drive profitable growth.
Grow system profitability and capability together with our bottling partners.
Serve customers with creativity and consistency to generate growth acrossall channels.
Direct investments to highest potential areas across markets.
Drive efficiency and cost-effectiveness everywhere.
Currently John Farrell is vice president for strategic planning for the coca-cola
company. he leads the development of the overall strategy of the company along
with the global planning process. the strategic planning of coca-cola is to reexamine
their strategic models, based upon carbonated soft drinks (cola, lemon-lime and
orange) and move to new beverage categories. Also be able to renovate bottling to
make it flexible enough to provide manufacturing and sales distribution of all new
products.
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These are the major issues to consider when assessing this stock, according to analysts:
Key Positive Arguments Key Negative Arguments
Lower Interest Expense and CostControl Aid Margins: The decreasinginterest expense has offset the recentincrease in operating costs. Coca-ColaEnterprises prefers to maintain its costdiscipline.
Increasing Commodity Costs: Increasing
commodity costs, including PET (plastic forbottles) resin costs, are negatively impactingCCEs margins and earnings.
Restructuring Savings: Therestructuring initiatives undertaken by theCompany are expected to enhancesignificantly its operating profit growth.
Severe Competition: Higher growth and superior margins are being achieved byPepsi in non-carb categories, which mayplace CCE at a disadvantage.
Strong Cash Flow: The Companygenerates a strong cash flow and Coca-Cola Enterprises is financially wellleveraged.
Capital Intensive: The bottling business is capital intensive.
DESIGN
Pallet Design (decoration) is one of the most creative ways of highlighting the secondary placement andattracting customers for your products.You can choose from various types and options, and the best solution according to your specifications will beprepared by our sales representatives.
Suitable combination to boost the campaign impact:- Floor Graphic- Standing Frame
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- Leaflets- Banner
Coke bottles aims to transform the structure of the product to cubic bottled drinks,
allowing a significant gain in storage space and efficiency for recycling. The bottle
would be made of 100% sugar cane by products, and collapses 66% smaller than its
original size. An interesting and innovative idea.
Be that as it may, redesigning iconic items such as the Coke bottle can be risky
business, in terms of the products market place. Products and their design take on
a relationship quality in peoples lives. Many consumers have difficulties dealing
with a shift in a products appearance, even if there is no other change.
With this said, it would be a huge gesture on Cokes behalf to implement a much
needed change to our global situation regarding the use of plastic bottles. And
really, eventually people will get over it.
FACILITIES LAYOUT
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They established main plant at Dasna at Ghaziabad. Dasna is the largestmanufacturing facility to coke in India and covers an areas 80 acres. The plant
manufactures more than 2 million units a day during peak season which extends
from March Sept.
Objectives
1) To study and understand the process of layout selection and different types
of layouts.
2) To observe the layout of a manufacturing unit and understand its working
Types of layouts
Process Layout
Product Layout
Fixed Layout
Hybrid/ Combination Layout
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Cellular Layout
Process Layout
Process layouts are found primarily in job shops, or firms that produce
customized, low-volume products that may require different processing
requirements and sequences of operations.
Product Layout
Product layouts are found in flow shops (repetitive assembly and process or
continuous flow industries). Flow shops produce high-volume, highly
standardized products that require highly standardized, repetitive processes
Fixed-Position Layout
A fixed-position layout is appropriate for a product that is too large or too
heavy to move. For example, battleships are not produced on an assembly
line.
Combination Layouts
Many situations call for a mixture of the three main layout types. These
mixtures are commonly called combination or hybrid layouts.
Cellular Layout
Cmachines are grouped according to the process requirements for a set of
similar items (part families) that require similar processing. ellular
manufacturing is a type of layout where
Ingredient Delivery
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Sweetener
Secret Formula
CO2 Formula
Water
Materials
Washing and Rinsing
Washing
Rinsing
Sanitization
Hydro wash
Mixing and blending
H20 and Sugar
Secret Formula
H20 and Syrup
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CO2 Adding
Filling
Once all the ingredients have been mixed and blended and the bottles have been
cleaned and sanitized, every thing is ready to start filling. This is a surprisingly
complex process requiring accuracy at each step.
Capping
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Once filled, bottles are then capped.
Coke uses different caps for different bottles glass bottles are topped with ametal crown
"PET BOTTLES" are stopped with a plastic screw-top.
Labeling
Then they move on to be labeling
A special machine dispenses labels from large rollers, cuts them and place on
the bottles.
Coding
The bottle is now ready to be coded. Each one of Cokes beverages is markedwith a special code that identifies specific information about it.
These codes identify the date, time, batch no. and the MRP
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Inspection
Coca-Cola inspects bottles at many points during the process.
With refillable bottles, when they are first brought into the plant They are washed and again after they are filled
After filling, each plant sample bottles are analyzed in its lab to ensurequality is up to standards.
Packaging
Final inspection,Packaging
Warehousing and Delivery
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Maintain beverages
Delivery on time
Delivery to Agents and Machines
CONCLUSION
Coca Cola products can be found practically anywhere in the world, such as on
the tables of people in Tanzania, one of the poorest countries, and on the tables
of the wealthiest people in the United States, where the company was founded.
The success of this worldwide organization can be attributed to more than just
its flavorful beverages.
The Coca-Cola Company exists to benefit and refresh everyone it touches. The
company is the world's leading manufacturer, marketer, and distributor ofnonalcoholic beverage concentrates and syrups, used to produce nearly four
hundred beverage brands.
The Coca Cola Company has come a long way from selling a few servings of
carbonated beverages in a pharmacy, to an international scale business. The
company has accomplished that objective thanks to dedicated people who have
collaborated through the years with the mission to attain high quality standards.
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Their product line has grown with the approach of cultural appreciation and
understanding, which has been a key factor in the introduction of the products in
over 200 countries. Coca Colas commitment to remain at the forefront of the
changing social values in developing their marketing strategy has proven to their
advantage. Undoubtedly The Coca Cola Company has developed all the
elements necessary to run a multi-million, worldwide enterprise and refreshes all
the people that come in contact with their products.
REFERENCEShttp://www.scribd.com/doc/16945054/marketing-plan-of-coca-cola
http://www.scribd.com/doc/19336990/Plant-Lay-Out-of-Coca-Cola-Co
http://finapps.forbes.com/finapps/BuyHoldSellAnalysis.do?tkr=CCE
http://pos-media.eu/products-services/point-of-sale/pallet-design
http://www.scribd.com/doc/36461844/Final-Report-on-Coca-cola
www.thecoca-colacompany.com
www.news.bbc.co.uk
www.india-server.com
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http://www.scribd.com/doc/19336990/Plant-Lay-Out-of-Coca-Cola-Cohttp://finapps.forbes.com/finapps/BuyHoldSellAnalysis.do?tkr=CCEhttp://pos-media.eu/products-services/point-of-sale/pallet-designhttp://www.scribd.com/doc/36461844/Final-Report-on-Coca-colahttp://www.thecoca-colacompany.com/http://www.news.bbc.co.uk/http://www.india-server.com/http://www.scribd.com/doc/19336990/Plant-Lay-Out-of-Coca-Cola-Cohttp://finapps.forbes.com/finapps/BuyHoldSellAnalysis.do?tkr=CCEhttp://pos-media.eu/products-services/point-of-sale/pallet-designhttp://www.scribd.com/doc/36461844/Final-Report-on-Coca-colahttp://www.thecoca-colacompany.com/http://www.news.bbc.co.uk/http://www.india-server.com/ -
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www.magindia.com
www.coca-colaindia.com
www.wikiinvest.com
www.open2.net
APPENDIX
QUANTITY PREFERENCE:
From Fig 2.13, we infer that about 47% of respondents prefer to purchase PET bottle of Coca-
Cola Products. About 27% prefer to purchase glass bottles, 19% prefer Can of 300ml and only
8% prefer 1 & 2 litre bottles of Coca-Cola.
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http://www.magindia.com/http://www.coca-colaindia.com/http://www.wikiinvest.com/http://www.open2.net/http://www.magindia.com/http://www.coca-colaindia.com/http://www.wikiinvest.com/http://www.open2.net/ -
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Fig 2.14
Fig 2.15
BRANDING & PRICING:
From Fig 2.14, it is concluded that respondents find Coca-Cola products better than that of Pepsi
products. About 62% respondents said that they find Coca-cola products better than Pepsi and
only 38% supported Pepsi products.
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From Fig 2.15, we infer that about 62% of the respondent considers the pricing of Coca-Cola
much more reliable than that of Pepsi. About 38% respondents think that Pepsi have better
pricing than that of Coca-Cola.
Fig 2.16
Fig 2.17
QUALITY & TASTE:
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From Fig 2.16 & 2.17, its clear that Coca-Cola products have better taste and quality than that of
Pepsi. About 73% respondents consider that Coca-Cola products have very good quality and
taste. 27% respondents consider Pepsi products have better taste and quality.
Fig 2.18
Fig 2.19
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Jo chaho ho jaye coca-
cola enjoy