Coca-Cola looks to its supply chain for cost savings

One of the most recognized brands around the world, Coca-Cola is feeling a bit of a pinch as consumers’ preference shifts to non-carbonated beverages. In fact, this pinch resulted in the company’s 2013 revenue declining 2% while global sales volume increased only 2% for the year.

Coca-Cola is a huge global company and with a complicated supply chain to serve both its business and consumer customers. As such, along with its earnings announcement, Coca-Cola also announced plans to improve upon its supply chain optimization and IT standardization. Combined, the company expects to achieve a cost savings of over $1bn during the next few years.

While Coca-Cola mostly uses SAP, many of its distributors/bottlers are beginning to shift towards cloud-based systems. For example, Coca-Cola Enterprises has been shifting to cloud-based systems in Europe since 2009. In fact, it successfully moved from its SAP CRM platform to Salesforce on mobile. This is an interesting move and is a trend worth monitoring – the shift from laptops to smartphones. Over 2,000 sales representatives in Europe are turning in laptops and are receiving Apple iPhones. According to Coca-Cola Enterprises’ director of enterprise mobility, the switch to mobile allows for improved efficiency and productivity. “Think about inventory checking. We have over 500,000 coolers over multiple different countries. Knowing where they are at any one time is challenging. What we wanted to do is take all this information, streamline it and make it as easy to access as possible… Now they just have to enter the account number into their phone or capture it with the camera. We’ve also created Bluetooth aspect tags. This means sales reps can go into a store and scan the Bluetooth tags to find everything they need.”

Another example is that of Coca-Cola Bottling Company Consolidated, the largest independent bottler in the U.S. The bottler, which supplies products to 11 states, uses SAP ERP software to manage everything to do with product manufacturing. However, it turned to Coupa Software to develop a mobile, cloud-based solution to manage its indirect spend.

Lastly, Coca-Cola Femsa Philippines has also moved to the cloud with Microsoft’s Office 365 for Business, which is a strategic move to communicate and engage with its partners, employees and customers. According to the company, the benefits of moving to the cloud are collaboration, familiarity and mobility.

Even though most of its bottlers and distributors operate independently, the need to interact with each other on a common platform is necessary. So, although Coca-Cola has not made public its plans for supply chain optimization and IT standardization, it is quite likely it will include a combination of traditional IT and cloud-based IT.