MIS2101 Section 702 – Amy Lavin – Spring 2014

Coca-Cola SAP

Coca-Cola Supply Chain Management Success Story

A Modern Supply Chain for a Classic Beverage

When it comes to the world’s most powerful brands, Coca-Cola is still number one. The iconic beverage maker, which has dominated the global soft drink market for more than a century, continued its 12-year reign at the top in 2011, according to Interbrand’s latest global rankings.

For Coca-Cola, achievements like this are byproducts of a vision and an operating framework that is built on excellence. At Coca-Cola Enterprises (CCE), the exclusive Coca-Cola bottler for its territories in Western Europe, the company’s goal is to be the number 1 or strong number 2 choice in every category it competes in.

But on the road to long-term, sustainable growth, CCE faces similar challenges to many other manufacturing and logistics businesses. A top priority is replacing dated systems with a modernized platform across markets to create a cohesive view of metrics and streamlined processes.

Bottling iconic brands in Europe

CCE is one of the world’s largest marketers, producers and distributors of Coca-Cola products. CCE buys concentrate from The Coca-Cola Company and combines it with other ingredients to create some of the most popular beverages in Belgium, Great Britain, France, Luxembourg, the Netherlands, Norway and Sweden.

In 2010, CCE completed a significant transaction with The Coca-Cola Company, selling its North American operations, while retaining its European territories and acquired new bottling rights for Sweden and Norway.

CCE’s executives recognized that establishing a uniform IT program across all of its business units would be critical for expanding CCE’s footprint in Europe.

“It is very important for us to have a set of consistent standards and processes, so that when we acquire and integrate new territories into our business we can easily put those practices in place in a short time,” says Kemal Cetin, vice president of European deployment at CCE.

Driving regional expansion with IT

As part of its Genesys program, CCE set out to deploy a new supply chain management solution at all 17 of its European plants. The new system would replace and automate many of CCE’s supply chain processes and required new skill sets to ensure the required speed of deployment.

CCE needed a partner to help deliver this new SAP-enabled business transformation. This would involve not only delivering a technology solution, but also training users on the new processes to ensure the full benefits were realized.

CSC was selected because it has combined a strong ‘front office’ business transformation and change management consulting capability with a ‘back office’ technology delivery capability for CCE since 2008. Prior to Genesys, CSC had already been supporting CCE’s applications with SAP, including order processing, manufacturing, financial transactions, human resources, procurement and other related processes.

“We started Project Genesys not as an IT project, but as a business transformation project to enable CCE’s day-to-day business to work in a harmonized way,” says Cetin. “Since CSC knew our processes, people and solutions, we thought that would carry over very well into the deployment process, and especially from an acceleration perspective, because the learning curve would be relatively short.”

“Beyond that,” Cetin adds, “CSC has very experienced and capable people from an implementation perspective. And, we needed to make sure the cost-quality equation worked for us. CSC met our criteria and satisfied us from that perspective as well.”

Filling a gap between supply and demand

The Genesys program is an integrated SAP Enterprise Resource Planning (ERP) solution that will replace CCE’s legacy systems in the processes of “order to cash,” “requisition to payment,” and “record to report.”

Genesys will allow CCE to shorten cycle time in these processes and be more productive. It will also help bring more visibility into the business and improve decision making.

“We are a shelf-replenishment company, a supply chain company, a sales and customer services company,” says Esat Sezer, senior vice president and chief information officer of CCE. “It is very important for us to integrate our manufacturing plants all the way up to the replenishment of shelves in the retail outlets. Through the information side of the equation, we are basically tying those two ends of the business process together: the manufacturing side, which drives the supply of our product, and the shelf-replenishment side, which drives the demand part of our product.”

CSC is playing a major role in expediting the delivery of Genesys across CCE’s operations, allowing CCE to deploy Genesys at multiple-country locations at a much faster pace than if CCE had forged ahead alone.

“There are a lot of technology areas that require some capacity that we might not have or some technology areas that we might not have the knowledge about,” says Sezer. “So whenever we have those knowledge gaps, we turn to our strategic partner CSC to fill in. Whenever an accelerated deployment need arises, we leverage CSC, and we can generate value much more quickly.”

 

Questions:

1)  If you were the Chief Executive Officer of Coca-Cola Europe would you develop your own team to customize a Coke SAP system or hire an outside company to implement the new SAP system?   

2) How would you approach transitioning the 17 manufacturing plants, secondary bottling companies and numerous warehouses?  Would you transition one plant at a time and have two systems in place for a period of time or transition all of the locations at the same time?      

3)  If you were Esat Sezer (CIO at CSC) would you be nervous knowing that if your transition does not go well, you could cost Coca-Cola Europe millions of dollars as well as hurt their brand equity? 


 

 

4 Responses to Coca-Cola SAP

  • 1) If you were the Chief Executive Officer of Coca-Cola Europe would you develop your own team to customize a Coke SAP system or hire an outside company to implement the new SAP system?
    This is a very hard question, CCE is a very well know established company and I believe they got to that point by hiring the best to improve and grow their company. Although they might have very educated employees I feel if they are looking to improve on their current efficiency then the right idea would be to bring in a professional outside company to help create and implement the new SAP.

    2) How would you approach transitioning the 17 manufacturing plants, secondary bottling companies and numerous warehouses? Would you transition one plant at a time and have two systems in place for a period of time or transition all of the locations at the same time?
    I defffinatly think that in order to not slow down or lose any production time it would be best to transition each plant at a time. There could be bugs to work out with implimentations and if you change everything at once it might create a delay which would cause a lot of problems for shipments and possibly losing brand recognition and clients.
    3) If you were Esat Sezer (CIO at CSC) would you be nervous knowing that if your transition does not go well, you could cost Coca-Cola Europe millions of dollars as well as hurt their brand equity?
    I semi addressed this questions above I think it is very important to be sure every problem is anticipated in advance so that minimal problems occur. I think it is a risk for any business but obviously the CIO feels it is a decision that is worth the risk since it will increase efficiency. And like I said if the change is slow then it will bring issues up at the beginning so they can be fixed before spreading the system to all locations.

  • Great article and questions, Nick! I look forward to hearing your opinions tonight (and sharing mine!)

  • 1. If i were Chief Executive officer of Coca-Cola I would hire in house the best IT majors out of college. One because they would be the cheapest and second because their young and optimistic. With this I would try to bring in someone who worked on a major manufacturing platform for another major company or along that line. With major professionals and bright college kids I feel I could create a great platform for much cheaper than outsourcing.
    2. I would do it a section at a time not necessarily a plant at time. But for that particular function. So the secondary bottling companies I would create their their own production storage system to up date them. Then make my way to the warehouses and last the manufacturing plants. I would try to be careful and test the manufacturing one as rigorously as possible because if it does not perform it could adversely affect my profits to an extreme degree. It could also make my workers want to leave and perhaps be unsettled.
    3. If I were Esat I wouldn’t necessarily be nervous about the transition but more concerned that the workers would embrace the difficult change that this may be. I would try to invest in communication efforts and tutorials to educate my company and workers on how to operate the new systems and a brief overview of what was happening. The biggest problem with employees is keeping them motivated and working for you.

  • Coca Cola has manufactures all over the world. Every country has different cultures and Coca Cola need to produce perhaps different shape or label for the bottles. It may need local professional people who can create or authorize another system beside the unite system, so their products can meet the market demand or requirements.

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