Assignment NO 1

Subject

Operations & Supply Chain

Management
Presented to

Presented by
Waqar Haider
Roll No MBA2Y02183017

Lahore Business School

University of Lahore

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 Coca Cola Beverages Pakistan limited

Coca-Cola Pakistan History.

Coca-Cola Pakistan entered the Pakistani market in 1953, with the first plant being set up in
Karachi. For several years, the bottling operations were conducted by independent
franchisees. Then in 1996, Coca-Cola Beverages Pakistan Limited (CCBPL) was established
to acquire all the bottling plants and operate these to the highest standards of quality for
which Coca-Cola is well-known, throughout the world. The acquisition process was
completed in 2006 and CCBPL thus became the sole organization holding all manufacturing
and selling rights of Coca-Cola products in Pakistan. CCBPL plays a key role in maintaining
the quality, ensuring availability and driving the sales of all Coca-Cola brands marketed in
Pakistan. At the end of 2013 it was operating 6 bottling plants and 13 warehouses throughout
the country, serving a population of more than 180 million people through an extensive
network of distributors, retailers and key accounts. Currently almost 50% shares, along with
management rights of CCBPL lie with Coca-Cola Içecek (CCI), the sixth largest Coca-
Cola bottler in the world. CCI has a presence in 10 countries including Azerbaijan, Iraq,
Jordan, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey and Turkmenistan. CCBPL
thus manufactures, packages, merchandises and distributes the produced branded beverages.
As the bottling company, CCBPL is also responsible for developing local networks, so that
the product reaches the consumer in its best quality. This includes customer development,
market investment, order collection, delivery and lastly cash collection.

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 1. Product Design
The global nature of our business requires that the Coca-Cola system has the highest
standards and processes to ensure consistent quality across our entire value chain – from our
concentrate production to our bottling and product delivery. Our consumers deserve safe,
refreshing and high-quality beverages, and across the Coca-Cola system, we work hard to
meet the highest standards of product safety and quality. It is our goal to offer safe and
refreshing beverages to all our consumers around the world. We follow stringent product and
ingredient standards designed to ensure the safety and quality of each of our products.

1.1 Approach
To achieve consistent safety and quality, we have strong governance practices in place, and
we work diligently to ensure compliance with applicable regulations and standards. We stay
up to date with new regulations, industry best practices, and marketplace trends and
conditions.  We also engage with standard-setting and industry organizations.

Our strict product manufacturing and distribution policies, requirements and specifications
are managed through our integrated quality management program called the Coca-
Cola Operating Requirements (KORE). The quality and safety of all systemwide operations
are monitored and measured against the same rigorous standards. Our quality management
program helps us identify and mitigate risks and drive improvements. We stringently test and
measure the quality attributes of our beverages in modern laboratories at every step of
production. This due diligence is performed in all of the countries and territories where our
products are produced and sold. We also consistently reassess the relevance of our
requirements and standards and continually work to improve them across our supply chain.

1.2 Integrated Quality Management

KORE enables the Coca-Cola system to address the changing business landscape while
supporting The Company's strategic growth plans by creating an integrated quality
management program.  This program holds our system-wide operations to the same standards
for production and distribution of our beverages.

KORE promotes the highest standards in product safety and quality, occupational safety and
health, and environmental standards across the Coca-Cola system by outlining clear
requirements for the policies, specifications and programs that guide our operations. With
endorsement from leadership throughout the Coca-Cola system, KORE:

 Integrates business and quality objectives and aligns them with consistent metrics to
monitor performance;

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  Integrates preventive action as a management tool with more rigorous demands when
introducing new products and services;

 Incorporates Hazard Analysis and Critical Control Points (HACCP) into our system
standards;

 Manages risk in our Company, bottling operations and across our supply chain; and

 Defines problem-solving methods and tools to drive consistent quality with

improvements.

To stay current with new regulations, industry best practices and marketplace conditions, we
consistently reassess the relevance of our requirements and guidelines not only in
manufacturing, but throughout the supply chain. We refine our requirements to further ensure
that KORE embodies the most recent and stringent manufacturing processes.

To establish a governance process, each business within the Coca-Cola system implements,

documents and maintains a safety and quality system in accordance with KORE. Compliance
is monitored system-wide to further support the integrity of our products.

1.3 Managing Product & Ingredient Safety In Our Supply Chain

We drive effective product safety and quality compliance through unannounced audits of our
manufacturing facilities around the world. Unannounced audits help ensure that
manufacturing facilities across our system are “audit-ready” always and are operating in
accordance with KORE standards. We recognize that quality “risks” are not all equal;
therefore, we evaluate risks to focus our system resources where they can create the most
impact.

Our Supplier Management Program is designed to identify and assess potential supplier risks.
It provides assurance and documentation that our suppliers are capable of consistently
providing our plants with ingredients and packaging materials that meet our Company’s
stringent specifications. One of the focus areas of the program is to ensure that corrective
actions are taken on a timely basis. This minimizes or eliminates risks that could potentially
cause issues with continuity of supply. Our program includes the requirement for an annual
risk assessment of each supply point and the periodic evaluation of the supplier’s
performance and facilities based on risk level.

2. Manufacturing
Coca-Cola Beverages Pakistan Ltd. (CCBPL) uses continuous flow for manufacturing its
products and uses the product-focused strategy. It has set standards of its products that are
produced in high volume with low variety. CCBPL currently has five plants operational.
These plants use continuous planning for production. They forecast their sales for each week
and then produce accordingly. Each line produces a maximum of 140000 cases of beverages

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in a day. For every change in beverage the equipment is cleaned which is time-consuming (4-
6 hours) and costly. Once the Coca-Cola Company converts the ingredients into the syrup.
The product concentrates are shipped to bottling plants across the globe. At the bottling plant,
the process starts from manufacturing of bottle and preparation of final syrup. The treated and
cooled water is mixed with the final syrup and, for sparkling drinks, with the carbon dioxide
that gives the product its characteristic effervescence. CCBPL bulk buys raisins inventory of
up to 2years in advance. The manufacture of bottles starts from the preform tubes. The
preform tubes are made of plastic and thrown into the equipment that blows these tubes into
bottles in milliseconds. The bottling process, whether in glass or PET (plastic), is very similar
except for the change in material from which preform is made and blowing equipment. These
bottles are then filled by the drink and then forwarded to next line to be sealed by the closure.
After being sealed, the bottles are labelled and then dated by a laser machine. The bottles are
then ready for inspection. Surprisingly, even the quality check is automated: the machine
rejects any bottle filled below or above the required level. Lastly, the bottles are put together
in form of their cases: six bottles in a case of 1.5L bottles and 12 bottles in a case of 0.5L
bottles. The cases are clinked individually with a plastic sheet and then wrapped together to
be sent to the warehouse. There are many plants of the Coca Cola Company in whole over
Pakistan. The plants are in Karachi, Hyderabad, Multan, Gujranwala, Sialkot, Faisalabad,
Rahim Yar Khan and Lahore. Location in Lahore Coca-Cola Beverages Pakistan Limited. 5-
E-II, Gulberg IV, Lahore 54660, Pakistan. In the Lahore factory, that we visited coke was
prepared by adding fizz to the syrup and then they were bottled, labelled and packed.

As with each successful company, there needs to be some sort of structure. Coca cola’s
process flow for bottling coke is as follows;

1. Ingredients are delivered to the factory. 2. Small pieces of plastic known as ‘resin’ are
converted into the preform of a bottle. 3. The preform is blown into the size of bottle needed.
4. Bottle is filled with the beverage. 5. Bottle is sealed with the closure. 6. Label is pasted. 7.
Laser inspects for over or under filling of cola in bottle. 8. Bottle is encoded. 9. Bottles are
grouped together in form of cases. 10. Plastic sheet is wrapped around the cases. 11. A bundle
of cases is packed together. 12. Cases are moved to warehouse. 13. Distributors collect order
from warehouse. Ingredients brought to the plant Preform Prepared Preform blown to bottle
filled with the beverage prepared Bottle sealed with closure Laser inspection for quantity
Labeling of bottles Encoding Bottles grouped in form of cases Plastic wrapping: shrink age
and cooling Cases packed together Moved to warehouse Product collected by distributors

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2.1 Our Brands,

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Since the plant operates 24 hours a day and have outsourced many of its processes, supply
chain management is the most critical part of their operations. As Coke operates its inventory
management as per Just-In-Time and the production facility only holds raw materials for 4-5
days’ worth of production so delivery of preform, raw materials for the preform and as well
as the syrup and other ingredients has to be on time and without any disruption. This leaves
little room for mistakes during forecasting, production and supply chain management. This
calls for constantly updating its forecasts as per changing demands and ensuring that the
forecasts are done timely and accurately. In Pakistan this movement to JIT system will be
even more cumbersome due to instable political and law & order situations.

3. Disposal

Food and beverage packaging is an important part of our modern lives, yet, the world has a
packaging problem that we have a responsibility to help solve. By investing in packaging
innovations, collecting a bottle or can for everyone we sell, and working together with
partners to address waste challenges, we aim to be part of the solution.

Global businesses like The Coca-Cola Company have the opportunity and responsibility to

lead in building more sustainable packaging portfolios. In 2017, we worked internally to
create an industry-first, ambitious goal to help collect and recycle the equivalent of every
bottle and can we sell globally by 2030. This goal is the centerpiece of our new packaging
vision for a World Without Waste. We intend to back this vision with a multi-year investment
that includes ongoing work to make all our packaging 100% recyclable by the year 2025 and
to include 50% recycled content across all our primary packaging globally by 2030.

From our decades of experience with packaging, we are familiar with the challenges—
economics, lack of necessary infrastructure and collaboration needs–in advancing more
sustainable packaging solutions. And we know more challenges are ahead. Our hope is that

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our ambitious World Without Waste vision, along with our dedication to addressing gaps
with industry, government and civil society, will greatly contribute to reducing our world’s
packaging pollution problem.

3.1 Making the Packaging and Climate Connections

Packaging accounts for 25-30% of our climate goal to reduce the carbon footprint of the
“drink in your hand” by 2020. Of this, our calculations show approximately 50% can be
attributed to aluminum cans and slightly less than 25% can be attributed to plastic and glass.

While the exact figure is dependent on the technology and infrastructure in use, recycling
saves a significant amount of energy compared to processing virgin materials in the
production of our packaging materials. There is approximately 95% energy savings in
primary aluminum production using recycled materials. In polyethylene terephthalate (PET)
resin production, using recycled materials saves between 40% and 60% in energy. Our goals
of 100% collection, as well as including 50% of recycled material in our primary packaging
materials by 2030, will contribute significantly to our carbon emissions reduction goals.

As climate change impacts are progressively felt throughout the world, there is increasing
momentum to shift toward low-carbon energy sources and technologies. We are working
with our packaging suppliers through the Carbon Disclosure Project (CDP) Supply
Chain program and our procurement processes to understand opportunities related to moving
to these energy sources and technologies. These transitions will, in addition to increasing
recycling, help to drive down the carbon footprint of our packaging materials and help to

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future-proof our supply chains.

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