Coca-Cola's production process and supply chain management

Coca-Cola has a number of products, but their core product is the eponymous flagship beverage. But what is Coca-Cola? In essence, it is a syrup that is mixed with carbonated water in order to produce a soft drink. The production method is to gather the base ingredients, and then to create the syrup, which is a mixture of these flavoring ingredients, sugars and some water. This syrup is then blended with the carbonated water in order to produce the final product. When you get a Coke at a soda fountain, the blending occurs at the fountain. When you get a Coke in a bottle or can, it is blended at the manufacturing facility right before it is packaged, so that the packaging maintains the carbonation.

The process looks like this:

source: Process Flow Sheets (no date)

Supply Chain

The Coca-Cola supply chain is complicated mainly by the volumes that the company requires, and the fact that it needs near-constant production to minimize costs. The ingredients are a collection of flavors and syrups, which are processed agricultural products. So Coca-Cola needs to ensure a high volume of supply, delivered at frequent intervals throughout the year, of products that are derived from crops. That is a significant challenge for the company. One of the reasons why the company switched from sugar to high-fructose corn syrup, for example, was to ensure a domestic supply of its main sweetener -- sugar crops in the U.S. are less reliable than corn crops, and can cost more.

Coca-Cola makes a specific point to control its supply chain through contracts so as to ensure a reliable supply of the different ingredients.

With respect to solid goods, such as bottles, Coca-Cola also uses fixed contracts with a variety of suppliers as well. The suppliers are responsible for ensuring that they are able to meet the requirements of Coca-Cola, who are most likely the supplier's largest customer. Coca-Cola has a high level of bargaining power that allows it to dictate the terms of most of the contracts throughout its supply chain.

Newspaper

The article summarizes the discovery of cocaine at a Coca-Cola factory in France. Basically, a shipment of cocaine was found in a shipment of orange juice concentrate that came from South America to a Coca-Cola factory in the south of France. The company maintains that its workers were not involved. The newspaper had no choice but to point out the irony of the situation.