Study of the Supply Chain

Rajesh Bagrecha (069) Shubhajit Roy (084) Subhash Wagle (089) Somanath (088)

HINDUSTAN COCA COLA BEVERAGES PVT. LTD (HCCBPL)

Mentor: Mr. R. Dattir

Flows in Supply Chain

Customer

Information

Product

Funds

- A roadmap for the study of the supply chain

HCCBPLHCCBPL

A Framework for Structuring Drivers

Competitive Strategy

Supply Chain Strategy

Efficiency Responsiveness

Facilities Inventory Transportation

Information

Supply chain structure

Cross Functional Drivers

Sourcing Pricing

Logistical Drivers

• Coca-Cola returned to India in 1993 after a 16 year hiatus, giving a new thumbs up to the Indian soft drink market

• In the same year, the Company took over ownership of the nation’s top soft-drink brand and bottling network

• Indian operations comprises 50 bottling operations, 25 owned by the Company, with another 25 being owned by franchisees. That apart, a network of 21 contract packers manufacture a range of products for the Company

Coca-Cola in India

• HCCBPL commenced marketing operations in the year 1993 and manufacturing activity in the year 1998

This promise drives their supply chain strategy Coca Cola strives to deliver high quality product to the point of demand in 24 hour time span

Challenges: – Logistics Infrastructure– Unorganized retail sector– Coordination with widespread customer base– Able competitors

Coca-Cola is...

•The Symbol of Quality •Customer and Consumer Satisfaction•Responsible Citizen of the World

Products of HCCBPL

• Thums Up (200 ml/ 300 ml)• Limca (200 ml/ 300 ml)• Sprite (200 ml/ 300 ml)• Fanta (200 ml/ 300 ml)• Coca Cola (200 ml/ 300 ml)• Kinley soda (200 ml/ 300 ml)• Kinley mineral water(500 ml / 1000 ml/ 2000 ml)

Information FlowRaw Materials

Mineral Water and soft drink bottles

Suppliers Plant

Customer

RetailerDistributor

Depot D-56

THE CHAIN OF SUPPLY..

Empty bottles

Primary sales Secondary sales

High market

penetration and reach

Suppliers

Distribution zones (districts)

Upstream Supply Chain of HCCBPL

RM Items Supplier Supplier Location Inventory levels (qty / days of supply)

Sugar Renuka Sugar (single source) Karnataka 300 tons/1 week

Non-alcoholic beverage base

Coca Cola India (single source) Pune 15 days

Glass bottle Hindustan National Glass

Sinner (MH), Hyderabad 1-1.5 lac pcs

Crown ManakshayaL&T Daman 3-7 days

Crates Nilkamal Daman One time buy

CartonsNMT packaging,

Shivam Cartons, Cam Enterprises

Wada, Pune 2-3 days

Water MIDC supply (single source) Nashik 2 days

Internal Chain of supply

Receipts Invoicing Weighing Quality Check Picking & Staging for Stores Batch Making

Other activities at HCCBPL

Dispatches House Keeping Crate Washing & Management Transportation related MIS & coordination Tracking of costs of transportation Negotiating contracts with transporters MIS preparation

Automated Chain of Internal Supply

Downstream Supply Chain• Inventory

– 62 Distributors are contractually bound to carry minimum 3000 cases in lean season and 5000 cases in peak season & sell predetermined amount in specified time; not allowed to carry beyond a pre-determined upper limit

• Transportation cost optimization– Transportation costs are optimized through proper vehicle selection (HCV 16

tons, HCV 9 tons or LCV 6 tons)– FTL is achieved by consolidation of supplies with the depot (D-56)– The same vehicle is used for carrying empty bottles back from distributors

• Distributor selection process– Distributors are selected through a well defined process by cross-functional

team from Coca Cola, India

Cycle view of HCCBPL Supply Chain

Customer Order Cycle

Replenishment Cycle

Manufacturing Cycle

Procurement Cycle

Customer

Retailer

Distributor

Manufacturer

Supplier

PULL PROCESSES

PULL PROCESSES

PUSH / PULL PROCESSES

PULL PROCESSES

Supply Chain Coordination

Distributors

Coca-Cola, India, Pune

DAS

Sales Executive

Invoice, Physical products and

dispatch informationSales details,

inventory and demand information

Demand information and quantity of empty bottles

available at distributor

N.B: “Best Before Dates” to be given due priority

Forecasting Model

Pyramid forecasting – Done at Corporate office, Pune

Rolled up fo

reca

st

Forced down adjustment

Flow of funds in the chain Distributors make advance payments for supply of beverages by

EFT/Cheque in favor of Coca Cola India, Pune

Retailers buy on credit from distributors and pay in predetermined time intervals

HCCBPL pays its suppliers in 20-25 days which is the lead time for payment processing from Coca Cola India, Pune

Efficient Cash Flow

Management

Managing seasonal demand

• Seasonal pattern of demand considered during forecasting

• Workforce added just before peak months• Transport arrangements planned as per forecast• Fully machinery utilization in peak months

Peak Capacity Normal capacity UOM

CSD Beverages4000 cases / shift 2800 cases / shift Case (24 bottles)

Packaged water 3300 cases /shift 2500 cases / shiftCase (15 bottles)

Supply Chain metrics for HCCBPL

• KPI – Service Index – target 100 % order fill rate within 24 hours– Challenges:

• Transport shortages• Manpower shortages• Finished goods shortages

• Maintain transportation cost within pre-determined levels (changes based on fuel prices, toll taxes considered)

Supply Chain Macro processes

• Source• Negotiate• Buy• Design Collaboration• Supply Collaboration

SRM ISCM CRM

• Strategic Planning• Demand planning• Supply Planning• Fulfillment

• Market• Price• Sell• Order management

Not under control of HCCBPL