Supply Chain Management

Introduction

Supply chain management is the movement of products and services from a manufacturer to the consumer. In order for this process to be carried out effectively and within the shortest time possible, the supply chain manager needs to understand his or her local area of supply thus being able to reach each and every corner effectively. Supply chain management is a principle area which determines the flow of the market of goods from the company to the clients, thus the company depends on this department since it determines the way goods are transferred to different parts of the country or otherwise the world. This paper is therefore going to analyse the effectiveness of the four key flows in supply chain management, and recommend the necessary improvements through applying theories and concepts of supply chain management.

The Coca-Cola Company is a soft drink company which is situated in Nilai, which is a state of Negeri Sembilan, in Malaysia. The company produces different brands of soft drinks and water. The company is well known by the Malaysians and its brand is the market leader in soft drinks production in Malaysia. This success has been attributed to high quality supply chain management and good communication skills. Coca-cola is an iconic brand which is able to attract the attention of the consumers due to the shape of the Coca-Cola bottles, and its nutritional contents. This has made it easy for the company to be able to market its products all over Malaysia and its neighbouring countries at ease without any problems at all (Gurnani, Mehrotra, & Ray, 2012). The company’s products are therefore able to reach most people simply because the company has partnered with different companies in order to increase the supply of its products all over Malaysia and Asia in general. The company also sponsors different sporting activities which is also a way of marketing its products all over Asia (Jacoby, 2010). Moreover, the company is able to supply its products to the market in less than 48 hours. This makes sure that the retail distributors do not run out of stock. On the other hand, the company ensures that when its products reach the retail stores, they are stored under good conditions, and this is done through providing the retail stores with fridges free of charge (Brockhaus, 2013).

The Coca-Cola Company is currently using the new technology in order to boost the market of its products. Goods and products can therefore be bought by the clients over the internet through placing orders on the products that one needs. After the client has placed the order, the company processes it and it delivers the goods to the clients (Gurnani, Mehrotra, & Ray, 2012). Moreover, the company has also adapted social media marketing, which is one of the best way of marketing goods to many people within the shortest time possible. In addition, the company offers promotions which are used to reward loyal customers and to also communicate and attract new customers. Through promotions, the company increases its sales and it also increases the number of customers (Brockhaus, 2013). The company recently invested in a 20 million Euros automatic storage system to ensure their products are stored safely.

The company should be able work according to the Resources Based View theory (RBV), in such a way that it should be able to look at the disadvantages of other companies in order to beat them. This will really help in reducing the costs of using new strategies by the company and thus being able to remain as the market leader (Gurnani, Mehrotra, & Ray, 2012). Moreover, the company should use its resources effectively to beat other companies without having to invest on very expensive projects. On the other hand, the company should be able to provide more than it is expected of it by its consumers. This will really boost the sale of the product because the company will be operating in a very unique and distinct way. There will therefore be no room for competition from other companies since the company will be doing exceptionally well (Brockhaus, 2013). Producing high quality and very unique products will help the company to set a gap between it and its competitors.

Quality (q) against Demand (d) Curve

 

 

                        

 

                      200                                                        

                        

Quality         150       

     (q)            

                       100

 

                        5

                                          250              500                  750              1000

 

                                                                  Demand

                                                                                       (d)

            Manufacturing high quality products helps in increasing the demands of the products, since increase in quality is directly proportional to an increase in demand. This therefore means that the company will be able to increase its sales thus realizing huge profits from low investments. Moreover, the company will create a huge gap between it and its competitors in the competitive market.

            The company should also come up with new technics that should however boost its performance without having to pump in money. This can only be done through coming up with employee projects (Gurnani, Mehrotra, & Ray, 2012). Employees from different departments should be grouped into teams and be given projects where they should be able to look at carefully. This move will enable the company to be able to get new strategies that would otherwise save its implementation and investment costs (Brockhaus, 2013). This is so because, the company spends a lot of money in coming up with new strategies in order to stay strong in the ever changing market. This approach will not only enable the company to save costs, but it will also enable the employees to work hard and improve the performance of the company. On the other hand, the employees should also be rewarded for their hard work. This will boost the performance of the employees in the company, and thus being able to perform better hence impacting the company positively (Jacoby, 2010).

            The coca-cola company plans its financial year at the end of every year, this is to make sure that the company is able to reach its goals. Moreover, the company comes up with new manufacturing strategies due to the stiff competition and the changing trends in the market. After each and every year, the company adopts a new strategy and drops an old strategy which has not been effective. Moreover, the company rates itself according to the way it has been performing and thus making changes where necessary (Gurnani, Mehrotra, & Ray, 2012). The demand of the products is therefore calculated annually and thus giving the correct number of consumers using the Coca-cola products. The company therefore increases the number of production in order to cater for the ever increasing demands of its products. This is a move which is carried out in order to ensure that the supply does not exceed demand or otherwise, the demand does not exceed the production. This therefore ensures consistency in the production of goods and products by the company (Jacoby, 2010).

            In case of a drop in the number of consumers, the company comes up with new strategies which are supposed to help it to attract new customers (Jacoby, 2010). These strategies may include, outsourcing, outsourcing really helps particularly in attracting customers particularly in areas where coca-cola products are new. Through partnering with other companies, the coca-cola company boosts its sales in such areas and thus being able to win the market in such areas. On the other hand, the company budgets for new marketing trends which may emerge in the course of the year and thus being able to avoid any obstacles that the trend might pose (Gurnani, Mehrotra, & Ray, 2012).

After getting the number of clients that the company has, the company goes on to predict the number of customers that it is likely to attract and thus being to regulate the production of goods and services (Jacoby, 2010). The time frame within which the company aims to attract a given number of consumers is also calculated thus coming up with a correct figure. This figures therefore make it easy for the company to be able to plan for the materials needed in the production of the beverages.

The coca-cola company should be able to come up with strategies that can reflect its outcome. This is so because, the company can be able to avoid losses simply because it will have known and planned for the possible outcomes of using such strategies. According to the Strategic choice theory, this can really help in avoiding negative outcomes that the company might be likely to face, such as political and social conflicts (Gurnani, Mehrotra, & Ray, 2012).

Qualitative Forecasting

This method is basically subjective and it therefore depends on the judgement of human beings (Jacoby, 2010). Qualitative forecasting method is usually suitable particularly when there is little or no historical information, or when specialists have market astuteness which is likely to affect the forecast. This methods may also be used to forecast the demands of a new industry for a set period of time. Mostly small and new companies may be able to use this methods since they are only applicable when the historical background of the company is not known (Brockhaus, 2013).

Time Series Forecasting

            This methods rely on the historical background of a company in order to be able to make a forecast. They therefore make assumptions based on the historical activities encountered in the company, thus predicting the future outcomes. These methods therefore work under the principle, history indicates the future demands. They are appropriate particularly when the main demand array is not variable from a year to another year (Gurnani, Mehrotra, & Ray, 2012). These methods are also advantageous since they are the easiest to implement and they can also operate as a better preliminary point for a request forecast.

Casual Forecasting

            These models make assumptions that demand estimate is majorly linked with specific aspects in the surroundings. These factors include the following: the interest degrees, and the condition of the economy in a country (Brockhaus, 2013). Therefore, this model finds the relationship between demand and the surrounding factors and, use the approximations of what the surrounding aspects will be, in order to predict the future demands. For instance, the valuing of products is mainly related with its demand. This methods can therefore enable companies to be able to determine the effect of price elevations on demand.

Simulation Forecasting

These models emulate the selections of the consumers which gives rise to demand thus arriving at a forecast. Simulation, enables the company to use both causal methods and time series in order to answer the following question; What will be the effect of a price elevation? What will be the effect of an opponent starting a store next to another one? This method is usually used by Airlines in order to understand if their businesses are at stake (Gurnani, Mehrotra, & Ray, 2012). This method is very effective and should therefore be used by large companies which are not facing competition (Jacoby, 2010).

I recommend Coca-cola to use casual forecasting method since it provides the company with ways through which it can be able to set prices and its goals (Gurnani, Mehrotra, & Ray, 2012). This method is very effective since it uses the environmental situations in order to forecast, thus it will really help coca-cola in order to boost its performance and realize profits without any problems at all. Moreover, due to the change in the state of the economy, this method will help the company to be able to regulate the profits that it will be making (Brockhaus, 2013). Furthermore, the company will also be able to use its resources effectively and thus reducing the costs of implementation.

Conclusion

            Supply chain management determines the flow products from the manufacturer to the retailer. This method is therefore responsible for determining the effectiveness of the production of goods and services in a company. Coca-cola is a leading brand in beverage, and it has been able reach a wider market due to the effectiveness of its supply chain management. The company operates in different parts of the Asia with its main offices in Malaysia, and it has been able to be consistent in the production of high quality beverages all over the world. The company holds annual strategic planning at the end of every year in order to control the production and supply of its products in the market. Moreover, the strategic planning aims at enabling the company to be able to win new markets, and to cope with the ever changing markets and the technology. Thus, the company operates freely and at ease because of the plans that it usually puts in place each and every year. Casual forecasting is the best method for the coca-cola company as it will enable the company to avoid any losses through predicting the future economic trends.

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