When the Coca-Cola Co. bought the North American operations of bottler Coca-Cola Enterprises (CCE) in February 2010, the result was a lot more uniformity across the business, including its direct-store-delivery operations, one of the biggest DSD networks in the world.
Coca-Cola Refreshments (CCR), the North American unit created from the merger, now operates a national supply chain organization, as opposed to CCE’s regional business. “Since the acquisition, one of the most important changes has been a drive to employ standardized processes throughout North America,” said Patrick Plunkett, vice president, customer solutions, CCR, which received SN’s Supplier Leadership Award in the DSD Logistics category.
These standards are helping CCR improve execution in inventory planning, transportation and delivery of more than 500 sparkling and still brands, 15 of which are billion-dollar brands, including Coca-Cola, Diet Coke, Fanta, Sprite, Powerade and Minute Maid. “Through continued system improvements and centralized planning, CCR can forecast customer needs and produce the required SKUs, ensuring they are available when and where they are needed while minimizing out-of-stock occurrences on customers’ shelves,” Plunkett said.
CCR has also invested in numerous new systems, planning tools and delivery innovations. For example, telematics, which includes GPS (global positioning system) technology on its delivery trucks “enables the DSD supply chain team to maximize our delivery service,” said Plunkett.
The improvements cited by Plunkett helped to drive a recent merchandising partnership with Kroger Co. supporting Vitaminwater products. During the inception of the program, CCR and Kroger collaborated to identify the optimal display size to sustain promotional activities by store. Once that was determined, CCR leveraged Kroger’s database to plan the product mix needed to drive optimal sales, in-stock position and visual inventory levels.
“Our supply chain utilized this information to develop store-specific executional plans ensuring delivery of the right product at the right place at the right time,” said Plunkett. “Coordination across our sales and supply chain teams made possible high sell-through, as well as maximized in-stock conditions for Kroger shoppers.” As a result of the program’s success, Coca-Cola and Kroger will do it again next year.
Leveraging a retailer’s data is something Coca-Cola has been cultivating for some time. In 2008, the company engaged in a collaborative store ordering program with Wegmans Food Markets — part of Wegmans’ “New Ways of Working Together” program — in which Coca-Cola used store sales data to create “the perfect order” that optimized sales and inventory.
“We recognize the value of store-level POS information across a variety of product supply operations — from production planning, forecasting and inventory management to order fulfillment and delivery,” said Plunkett.
The company has recently invested significantly in the development of a Demand Signal Repository (DSR) system — based on POS data — for the entire Coca-Cola North American Bottling System. During the past 18 months, CCR has been collecting daily store-level POS information from many retailers in the grocery, drug, value and convenience channels. Using DSR intelligence has led to a more than 50% improvement in store in-stock position in several ordering pilots, he said.
“We are in conversations with other retailers about collecting data through a variety of B2B interactions to expand our DSR engagements and enhance our ordering and replenishment activities for improving in-outlet stock levels,” he noted.
Coca-Cola has also been a pioneer in the use of advanced shipping notices (ASNs) in DSD shipments, giving stores a heads-up on what’s to be delivered. The company now has more than 30 implementations of ASNs, which use the 857 EDI (electronic data interchange) transaction set. The upshot has been an improved order-to-cash process, said Plunkett, adding that ASNs and price data, along with expanded exchange of trading partner information, have resulted in reductions in invoice reconciliations.
In its 2013 plans with retailers, CCR will continue to employ ASNs to reduce back-door receiving time for its drivers and retailer receiving clerks. “Our engagement with ASN has guided our expansion of capabilities like NEX [Network Exchange of data] with continued focus on non-traditional delivery times and further reduction in back-door check-in,” Plunkett said.
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