COCA COLA INTRODUCTION

Coca-Cola (also known as Coke) is a popular

carbonated soft drink sold in stores,
restaurants and vending machines in over
two hundred countries. It is produced by
The Coca-Cola Company, which is also
occasionally referred to as Coca-Cola or
Coke. It is one of the world’s most
recognizable and widely sold commercial
brands. Coke's major rival is Pepsi. Although
Coke has been the target of urban legends decrying the drink for its supposedly copious amounts
of “acid”, or the "life-threatening" effects of its carbonated water but still it is the most in-style
soft drink. About its safety and the ethics of the company that produces it, it is widely accepted
as the most dominant soft drink in the world today.
Originally intended as a patent medicine when it was invented in the late 19th century, Coca-
Cola was bought out by shrewd businessman Asa Griggs Candler, whose aggressive marketing
tactics led Coke to its dominance of the world soft drink market throughout the 20th century.
Although faced with accusations of perverse side-effects on the health of consumers and
monopolistic practices by its producing company, Coca-Cola has remained a popular soft drink
well into the first decade of the 21st century.

History:

The Coca-Cola Company began operating in Pakistan in 1953. Benjamin H. Oehlert Junior, former senior
vice president of The Coca-Cola Company, served as United States Ambassador to Pakistan from 1967 to
1969.

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 Famous Globally BRANDS
Globally, the Coca-Cola Company owns or licenses nearly 450 brands in the nonalcoholic beverage
business. Many of those brands are considered among the worlds most valuable. Some of these include:

Carbonated soft drinks

Such as Coca-Cola, Diet Coke, Fanta, Sprite and Fresca

Juices and juice drinks

Such as Minute Maid, Qoo, Fruitopia, Maaza and Bibo

Sports drinks

Such as PowerAde, Aquarius and Monster

Water products

Such as Ciel, Dasani and Bonaqua

Teas

Such as Sokenbicha and Marocha

Coffee

Such as Georgia coffee, the best-selling noncarbonated beverage in

Japan.

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 COCA-COLA IN PAKISTAN
Introduction:

The Coca-Cola Company is a global company with some

of the world's most widely recognized brands, the
Coca-Cola business in Pakistan own by CCI.

Bottling Information:

CCI is the sixth largest bottler in the Coca-Cola System

in terms of sales volume.

CCI produces, distributes and sells sparkling and still beverages of The Coca-Cola Company (TCCC) across
Turkey, Pakistan, Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq, Syria and Tajikistan.

CCI employs close to 9,000 people and has a total of 26 plants.

Bottling Information:

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CCI System in Pakistan

The CCBPL CCI Pakistan produces, distributes and sells

sparkling and still beverages of The Coca-Cola company in
Pakistan. Having first started in 1996, Coca-Cola bottling
operations in Pakistan came under the roof of Coca-Cola
İçecek in 2008.

CCI Pakistan serves a consumer base of 208 million with 6

plants and more than 3000 employees across Pakistan. Its
product portfolio comprises Cappy, Coca-Cola, Coca-Cola
zero, Diet Coke, Fanta, Kinley, Monster, Rani, Sprite, Sprite 3G
and Sprite Zero.

Core Brands in Pakistan:

Coca-Cola, Fanta, Sprite.

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 CCI PROFILE
MISSION:

Our mission is:

 To refresh the world - in mind, body and spirit.

 To inspire moments of optimism - through our brands and actions.
 To create value and make a difference everywhere we engage.

VISION:

Our corporate vision is to become:

“The undisputed leader in every market in which we compete”.

Be the best FMCG company.

PURPOSE:

“Bring togetherness, spread happiness and inspire a better future”.

VALUES:

Our values serve as a compass for our actions and describe how we behave in the world.

Authenticity: we act with integrity, and do what is right, not just easy

Excellence: we strive to amaze, with passion and speed

Learning: we listen and have a natural curiosity to learn

Caring for our people: we believe in our people invest in them, and we empower them

Performing as one: we believe in the power of working together, contributing in every occasion

Winning with our customers: our customers are at the heart of everything we do.

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 SC ORGANIZATION CHART
9,000 employees are currently working in the CCI Company. According to the organizational
chart below is the territory hierarchical levels

INFORMATION FLOW OF THE COMPANY

Information Flow is crucial to a company since it provides data, information and knowledge access to
everybody from senior management to the least employee. It is this information that acts as
“lifeblood” in the success of a company. Coca Cola Company has invested much in Information
Technologies in order to realize its goals.

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 TYPES OF SOFTWARE USED IN COCA-COLA

SAP R/3 from IBM together with ERP system is the

most widely used software in Coca Cola Company.
These IT solutions have enabled the company in fast
decision making and better product quality while at
the same time reducing the costs of operation. All the
entities thus; Operations, Marketing, Accounting,
Inventory and Human resources have a common
system that enables consistent reporting of
management and operational units. Apart from this
closing of books either locally or globally, purchasing,
financing are all done concurrently. It also ensures
that employees, customer, and suppliers are on the
same frame of reference. In Atlanta, SAP application include Accounting, Planning and Budgeting,
Procurement, Employee self-service and others that run on an Internet network. Manufacturing
plants have Project Systems implementation that oversees Inventory Management, Material
Management, Production Planning and Sales and Distribution. The IBM server RS/6000 enables
more than 1000 users concurrently.

PROCESS MANAGEMENT AT CCI

SAP:
 SAP is an abbreviation for Systems, Applications and Products.
 It helps in working more quickly and cost-effectively – connecting people directly to business
processes and delivering the information and capabilities they need to make decisions and
take action.
 SAP is an integrated ERP solution, providing solutions from Production to HR modules.

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Material management (MM):
 Supports the procurement and inventory functions occurring in day to day business
operations it includes requisitions, purchase orders, goods receipt, accounts payable,
inventory management.

Financial Accounting (FA):

 Maintains the financial information of the company for eg. Cash, a/c receivable and payable
fixed assets and so on.

Quality Management (QM):

 A process that is used to ensure a certain level of quality in a product.

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Sales & distribution (SD):
 Manages problems in sales & distribution with the help of quality notifications and by
processing customer complaints.

Plant maintenance (PM):

 Application provides a comprehensive software solution for all maintenance activities
that are performed within a company, consequently maintaining spare levels in
accordance to ROQ and ROLs.

Production Planning (PP):

 Handles all the details of production postings and yield calculations.

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Supply Chain Management (SCM)
The company produces the syrup which in turn is used in making beverages. The franchised
companies then make the final product. This has been optimized by Information Technology
implementation of SAP R/3. The movement of the final product from the manufacture to the
customer encompasses supply chain. The CCI Company employs a number of strategies that make
this possible including compliance with local laws human rights and that all suppliers have contracts,
are audited to form a comprehensive report. The suppliers are entrusted with provision of
ingredients, ware and packaging. In turn, the company produces drinks which are taken to
warehouses and distributors for availing to customers. The Coca Cola Manual Distribution Center
model has seen the company sell even to the remotest part of the world.

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CCI Group Procurement Policy

DEFINITIONS

BP: Business Planning

CAPEX:Capital Expenditure
CBT:Country Business Technology
CCI: Coca Cola İçecek A.Ş.
CEPG:Cross Enterprise Procurement Group
CESIM:Cooling Equipment System Improvement Manager
CHR:Country Human Resources Director
CLM:Country Logistics Manager
CoA:Chart of Authority
CP:Country Procurement
CPL:Country Planning
CPR: Cost Performance Report
CRC:Cooler Refurbishment Center
CSC:Country Supply Chain
DPO:Days payable outstanding
GBT:Group Business Technology
GES:Group Engineering Services
GHC:Group Hedging Committee
GP:Group Procurement
GPD:Group Procurement Director
GSC:Group Supply Chain
KO:The Coca Cola Company
PO:Purchase Order
RACI:Responsible, Accountable, Consulted, Informed
RFI:Request for Information
RFP:Request for Proposal
RFQ:Request for Quotation
SGP:Supplier Guiding Principles
SME:Sales and Marketing Equipment
SPM:Supplier Performance Management
SRM:Supplier Relationship Management
TCCC:The Coca Cola Company

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OBJECTIVES

The objective of this guideline is to adequately describe the basic principles to be followed in
Procurement in Coca-Cola İçecek AŞ with particular reference to the Group Procurement team to
align Coca-Cola İçecek’ s practices in the procurement of goods and services, and to give the
relevant processes in order to:

a. Optimize costs and improve DPO for Coca-Cola İçecek

b. Improve the value chain
c. Support business growth and integration of acquired companies
d. Ensure the transparency, the objectivity and the integrity of the procurement
process
e. Enhance flexibility and effectiveness of procurement by sharing resources,
using information and building knowledge management
f. Ensure legal, audit, social compliance of all processes

Procurement Mission

Coca-Cola İçecek Central Procurement Team vision and mission is:

‘Be a World Class Procurement Team w/best in class Capabilities ensuring cross-functional
end to end governance, securing supply and on time management while
creating savings and value for all CCI Operations”

ROLES AND RESPONSIBILITIES

The Role of the Group Procurement

Group Procurement supports Country Procurement, using technical expertise and know-how,
leveraging the ability to aggregate volumes across the countries to create value for Coca
Cola İçecek A.Ş.

GP is Responsible and Accountable for following categories:

    Material
Sweeteners Crystal Sugar, Liquid Sugar, HFCS
Ingredients
Gases CO2, Nitrogen
Can
Resin and Preform
Direct Primary
Glass
Material Pack Packaging
Aseptic Packaging (Tetra Packs)
Material
Closures, Crown
Secondary Label, Shrink, Stretch, Sleeve, Crates, Bag
Packaging in Box, Corrugated

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 SME (Cooler, Other CEPG Managed Categories)
Chemicals
Indirect Fleet (Operational Car Rental)
Material and Forklifts and Pallets
Services Group CAPEX projects managed by Group Supply Chain and
related Spare Parts of main equipment suppliers
Group IT Projects (Above 100kUSD annual spend)

Exception: *GP leads, CP manages

Indirect Logistics*
Material
and
Services Spare parts* (Production Line and Equipment)

GP’s main roles and responsibilities for all categories above are:

Category Strategy Building

 Develops expertise in the GP Categories.

 Provides functional leadership, subject matter expertise, best practices and knowledge to
CP and Country Supply Chain.
 Manages strategy development and implementation.
 Leads supplier selection and negotiation process. GP shares negotiated terms and
conditions with CP. CP gives the order to selected suppliers only, according to negotiated
terms and conditions.
 Consults content of country agreements according to negotiation results. CP prepares
contract with all country specific terms and conditions.

Supplier Management

 Determines relationships to engage in with different suppliers in order to create new value
and reduce risk with respect to overall business strategy
 Defines Key Performance Indicator’s and measurements to track supplier performance.
Measure and track internal performance within each spend category.
 GP advises how to communicate with the supplier in case of a need.

Risk Management and Pricing

 Collects market information and trends from Cross Enterprise Procurement Group and
other sources (banks, commodity analysts etc) and reviews CCI past hedging performance
for related commodities.
 Proposes price ranges and quantities for hedging. GP shows the potential opportunity gain
or loss of these price ranges compared to best case, most likely and worst case market price
estimation scenarios for Group Hedging Committee.
 Provides Procurement budget and Rolling Estimate assumptions to CP.
 CP prepares Cost Performance Reports and GP checks data validation.

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Value Generation

 Works closely with key stakeholders to develop effective cost reduction strategies and
implementation plans.
 Enables sustainable use of resources and reduction of carbon footprint.
 Optimizes asset and capital utilization by effectively using supplier partnerships.
 Within CEPG, represents CCI and supports The Coca Cola Company wide programs to
achieve better access, value and information (technology/innovation).
 Provides guidelines and supports the organization and performance of country
procurement operations.
 Maintains confidentiality and code of ethics.

Vendor Qualification

Procurement personnel, aided where necessary by end user countries, must maintain up-to-date
lists of qualified vendors (e.g. TCCC approved supplier data base). Those Vendors requiring
TCCC qualification must be detailed on vendors list and include relevant information on their
qualification status and expiry of qualification. Qualification involves consideration of such factors
as past performance, testing of products against specifications, ability to respond in good time
and dependability of products.

Also it is procurement personnel responsibility to ensure Supplier Guiding Principles (SGP)

compliance of the suppliers. Suppliers with more than 60kUSD annual spend are due for SGP
audit.
Core suppliers in SGP scope are: Ingredients, Packaging, Trade Mark Equipment, Co-Packing.
It is country procurement responsibility to track SGP status for Promotional material suppliers.
SGP scope for promotional materials are: our brand is on the material, end product is distributed
to consumers and annual spend is above 60kUSD.

Vendors who lose their qualification must be de-listed. However, should the criteria be met in the
future, they may be re-listed. The market must be regularly surveyed in order to identify new
vendors.

In uncompetitive markets procurement personnel must work with potential vendors in order that
they may become qualified.

Request for Quotation

The RFQ is used when Coca-Cola Icecek has a fully defined requirement and specification
against which the suppliers may bid.

As the requirement is fully defined, price will be a principal deciding factor in the purchase
decision. Other influential factors which have a verifiable cost implication and could also be
considered might be: after sales service, lead times, etc.

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Request for Information / Request for Proposal

A request for information (RFI) is a standard business process whose purpose is to collect
written information about the capabilities of various suppliers. Normally it follows a format or
written documentations that can be used for comparative purposes. An RFI is primarily used to
gather information to help make a decision on what steps to take next. RFIs are therefore
seldom the final stage and followed by Requests for Proposal (RFP).
The RFP is used when Coca-Cola Icecek is unable to define its requirements with a precise
specification. Rather, Coca-Cola Icecek defines its need and invites suppliers to propose
solutions.

The RFP should be specific as to our needs and any terms, conditions or considerations, which
are non-negotiable. It should not be so inflexible as to prevent a supplier from proposing an
innovative solution.

The RFP must indicate that it is not an order, and that Coca-Cola Icecek is not obliged to accept
any proposal.

Bid Analysis

Bid analysis includes an evaluation of the bidder’s responsiveness to the bid specifications and
an initial consideration of the bid price. Vendors who do not match the bid specifications should
be disqualified at this stage. If there are insufficient qualified bidders, a disqualified bidder may be
informed of the reasons for disqualification and invited to re-submit.

CONTRACTS

Contracts are needed to apply the needs of CCI according to the negotiated terms and
conditions with the suppliers.
Contracts must be in place to support all purchases and verify invoices. Purchase Orders against
contracts are opened by the country procurement responsibles. Contracts and Purchase
Orders must be approved according to the local CoA.
Also, CEPG signs Master Terms and Conditions document for CEPG category suppliers.

For categories under Group Procurement responsibility, negotiations about commercial terms
and validity (short term-long term) of the contract are led and finalized by Group Procurement.
Legal contract process (preparation of the contract, review of the contract with country Legal
Departments, approval process) is led by Country Procurement Departments based on the
negotiated terms. Contract renewal/re-tendering process is managed by Group Procurement
Department. In case of any risk or delay in the contracting process, Country Procurement
Department contacts with Group Procurement Department to get the needed support.

All contracts should also include the latest version of the Supplier Guiding Principles. This
document governs the ethical business requirements to suppliers who have business with Coca-
Cola İçecek and the latest version is also published on our CCI Cokeport Portal Procurement
Pages.

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Material Requirement Procedure at CCI

MRP, MRP List, Stock Requirement List MD01, MD02,

MD04, MD05,
MD06, MD07
Purpose
MRP, MRP List, Stock Requirement List
Trigger

MRP is the process which reads the production plan and explodes it down to the raw material by reading
production versions, BOM and Routing. It calculates raw material requirements and generate proposals
(Planned Orders/PRs) for Finish/Semi-Finish and Raw Materials.

MRP List and Stock requirement list are tools to evaluate MRP results and to evaluate current planning
situation of any material. All MRP elements (Planned Orders, PRs, POs, Reservations, Dependent
Requirements, Stock) can be viewed in these lists.

Prerequisites
All Master data has been created and production plan has been entered in the system.

Menu Path
Use the following menu path to begin this transaction:
 Select SAP Menu [Symbol] Logistics [Symbol] Production [Symbol] MRP [Symbol] Evaluations [Symbol]M
D04 – Stock/Requirement List

Transaction Code
MD04

Additional Information
None

Procedure
Start the transaction using the menu path or transaction code MD04

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SUPPLY CHAIN FUNCTION:

Supply chain function incorporates the following phases:

PLANNING:

This department is headed by Purchase and logistics managers who has an array of advisors and
analysts reporting to him. On territories he is provided by planners who manage day to day planning
cycles. Advisors and analysts perform long term planning (usually one business cycle i.e Fiscal
year).

After inventory forecasting consecutive requisitions are made and purchase orders are provided to
the vendor. Lead time to deliver is taken into consideration by system. Production plan is shared with
production team weekly and productions orders are shared in SAP for production postings.

WAREHOUSE:

Raw material enters production facility from vendors site, Quality and WH departments vet it against
standards respectively Good receipt indicator is marked by each department. Raw material is then
shifted physically as well as in system to production shop floor.

Warehouse department accepts material from production and removes it from production’s shop
floor (both physically and in the system). The material is then stacked in WH keeping in mind FIFO
standards. All physical movements are done on third party vehicles.

PRODUCTION:

Production department accepts production plan, gives reservation in system for required raw
materials. Initiates production engines, in result finished goods are produced. The goods are posted
in system using all the raw materials in real time. Finished goods after inspection from quality
department are handed over to WH.

SALES:

Sales are broken into two facets, Direct and indirect sales

 Direct sales, where Coca Cola dispatches goods to premium customers itself (Hyperstar,
Imtiaz, etc)
 Indirect sales, where regions are split into third party distributors and they monitor and demand
sales with assistance and training from Coca Cola sales department. Distributors outreach is
till kiryana stores, wedding halls and whole sale markets.

Sales trends are monitored by sales and planning divisions accordingly. WH assists in inventory stock
keeping and day to day sales updates. This data is compiled and shared daily across territories for
planning and replenishment of all facets. (Raw material to Finished goods)

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COMPETITOR- PEPSI COLA:

• Competitor, uses manual systems and automation isn’t available in planning nor purchase.

• ERP is being used but it isn’t integrated, and all levels are maintained on excel sheets

• Sales is done direct, competitor owns vehicles and sales officers whose outreach is till
domestic shops and large supermarkets

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 WEB SITES

• The Coca Cola Company has a very reliable website “www.coca-cola.com” which details all
its operations. It is also well arranged and updated to ensue correct information reaches the
viewer always.
•

• ONLINE- BUSINESS STORE FRONT

• Online business involves selling of products using Information Technology tools like the
mobile phone and the Internet. The CCI Company is in the initial stages of rolling out
services to enable online transactions take place. In Finland for example, CCI has
implemented an accepted payment system using SMS for their products.
•

• DATA COLLECTION AND PROCESS

• Various types of data that can be analyzed at CCI Company include production volume,
water, packaging, raw material volumes and Environmental Safety data. All this data is
collected individually from respective companies and traceability is attached to enable final
analysis. Data is collected scientifically and analyzed using spreadsheets to give detailed
results.
•

• CUSTOMER CARE PROVISION

• Customer care is professionally provided in

CCI Company ranging from simple queries to
more complex company processes. Through
their website one can track his orders or even
return a product at any time of the day. The
service is sometimes outsourced to third
parties to ensure every query and assistance
is accorded.

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Demand &Sales Forecasting Model:
(Quantitative forecasting Technique)

Year Sales Qty

2013 12173
2014 21758
2015 24488
2016 35297
2017 36320
2018 25664
Grand Total 155700

Annual Sales of Coke

35297 36320

24488 25664
21758

12173

2013 2014 2015 2016 2017 2018

Reference: Excel file is attached for the sales data imported from SAP.

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Salas forecasting equation using historical data from 2013 to 2018

Regression Statistics
Multiple R 0.724724442
R Square 0.525225517
Adjusted R Square 0.406531896
Standard Error 6929.047925
Observations 6

ANOVA
Significance
df SS MS F F
Regression 1 212454321.4 212454321.4 4.425052616 0.103235222
Residual 4 192046820.6 48011705.14
Total 5 404501142

Coefficients Standard Error t Stat P-value Lower 95% Upper 95%Lower 95.0% Upper 95.0%
- - - -
Intercept 6996627.857 3338393.293 2.095806948 0.1041452 16265493.57 2272237.861 16265493.57 2272237.861
- -
Year 3484.285714 1656.359263 2.103580903 0.103235222 1114.504854 8083.076283 1114.504854 8083.076283

Sales Function Annual Sales = -6996628 + 3,484 * Year

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