Coca-Cola's sustainable water management and recycling operations

Operation Management

Coca-Cola and recycling

Definition of Sustainability and Sustainable Water Management

The definition of Bruntland Commission regarding continuous development investigates the connection between social impartiality, quality of environment, and economic growth. Development in these sectors fulfils the present needs without negotiating the needs of the generations in the future (Rogers, Jalal and Boyd 2008). One of life's important elements is water which is facing a lot of problems due to increase in population and availability of fewer resources. There are less water resources to look upon to which is coming out to be a threat as well as a risk and is affecting every region and sector in the world. The Water Resources Group estimates that the requirement for water will increase to 40% in 2030 and around 1/3rd of the population of the world especially in the countries still developing will face 50% of water shortage (2030 Water Resources Group 2009). Keeping in mind the supply and demand gap of water as predicted, the management of water is an important priority in order to make sure that there are enough resources of water to fulfill the needs of the future generation.

Some of the main subject matters for Sustainable Water Management involve the part of urbanization, agriculture, competition for water resources and connection between energy and water. The themes mentioned are not comprehensive but by talking about these themes, the gap of water could be reduced and there can be a manageable system of water resources to match the demands of supply. 70% of agriculture consumes water and this would be one of the main challenges to address continuous supply of water in time of expansion of population and production of food. Some of the solutions of sustaining water involves expanding irrigation productivity, accommodating harvesting in the season of rain, producing crops through bi-engineering so that less water is used, switching to water-intensive crops that requires less use of water (Walsh and Dowding, 2012).

The Global Water Crisis

In 2008, The Economist gave water the position on oil in the twenty first century (Running Dry, 2008). Even though, the price of the water has not been increased yet like with oil; many parts around the globe are facing deficiency of water as the aquifers, lakes and rivers are reducing. According to World Wide Fund (2010), around 9 billion people around the world are facing deficiency of water. If the population is further increased in 2050, the demands of water and foods will increase which requires proper management of resources of water so that everyone gets equal supply of water. Agriculture is an important part of food production which also requires use of water; so proper management will allow equal distribution to every sector. Other than that, a lot of beverage companies also use water. Coca Cola states that their growth of the company relies a lot on fresh water which is an important ingredient. The company has also positioned sustainability of water as their top priority. With collaboration of different community projects and NGOs, Coca Cola is working to reuse, recycle and replenish water that is being used by them so that they become 'water neutral' till 2020 (Coca Cola corporate website 2010).

Body

Coca-Cola Operations Tools

During the operations periods, Coca-Cola produces the beverage content which consists of raw materials such as:

Caffeine

Sugar

Caramel color

Flavoring (passed through heating, mixing and cooling process and passed for quality assurance)

Electricity is powers Coca-Cola's automatic manufacturing factory. Coca-Cola transports the concentrate to CCE where a final product is formed; the process consists of a reverse process:

Osmosis purified water

CO2

Added sugar to the concentrate

Further testing for quality control

The majority of the water (95%) is used by CCE is taken from local municipal sources, while 10% of ground water is used. At present, one liter bottle of Coca-Cola is produced from 1.67 liters of water, commonly known as the water source ratio. According to this, 0.67 of water goes to waste. CCE plants made use of 26 billion liters of water in 2009 for producing Coca-Cola while disposing around 29 billion of waste water in recycling plants owned by municipal treatment centers (Coca-Cola Enterprises 2009).

Apart from that, CCE is involved in manufacturing PET plastic bottles for Coca-Cola by the process of resin heating to 600 degrees, the molten form of plastic is molded and then reshaped with hot pressurized air, and lastly cold water is poured on cold water (American Chemistry Council 2010). Coca-Cola further decided to reduce the plastic materials in its PET bottles to 25% in 2008, a large improvement since 2004. It has directly resulted in reduction of contamination and energy consumption in the plant. In the year 2009, Coca-Cola inaugurated the Plant Bottle, employing 30% of materials made on plant while having a negligible carbon footprint. Now CCE is involved in testing of Dansai water with Plant Bottle. Plant Bottle is at present not a viable commercial option since it's expensive to manufacture plastic bottles from petroleum waste products (Coca-Cola Enterprises 2009). Coca-Cola is rooting for recycling process and inaugurated the biggest recycling plant in USA yet. Coca-Cola has taken a nose dive into raising awareness about recycling plastic bottles and tin cans. Coca cola recycled 30% of the plastic bottles and tin cans, while 70% were disposed in a landfill.

In case of the outbound logistics phase, energy is employed for shipping and circulating Coca-Cola manufactured in the plant to local retailers and Coca-Cola machines. Coca-Cola has made an investment of 336 hybrid trucks, lessening the carbon contamination by 32%, whilst cutting down fuel costs by 37%. In case of the marketing and sales period, Coca-Cola has invested in 100,000 brand new eco coolers spread across the North American and European landscape. They are 40%-50% eco-friendly and energy efficient cutting down on carbon discharges in the atmosphere.

Coca-Cola's Sustainability Strategy

The management strategy of 2008/2009 Sustainability Review as outlined by Coca Cola give importance to three main areas which will help Coca Cola make a big impact. These strategies are climate or energy protection, sustainable packaging and stewardship. The company has targeted replenishing, recycling, reusing and reducing the carbon emissions and restoring the water that is used in the beverages and its production, improvement of packaging and recycling. The sustainability targets of Coca Cola are mentioned below along with the impacts.

Lean Tools: Continuous Flow

The strategy of continuous flow includes the manufacture of work and its smooth flow with production of less or no safeguard between the processes of manufacturing steps. This strategy also removes the wastes like transport, waiting time and inventory (Lean Production, 2013). This lean tool of continuous flow was observed in 2009 around the time when the Coca cola Company had increased the ratio of water efficiency of one liter to 2.43 liters of every beverage that is produced. Coca cola on replenishment has taken part in around 250 communities in more than seventy countries for production of water that is safe for drinking in areas with water deficiency (Coca Cola, 2008/2009, Sustainability Review).

Lean Tools: Kaizen (Continuous Improvement)

Kaizen is one of the strategy in which the workers work with collaboration in order to achieve increasing improvements in the process of manufacturing. This situation then combines the composite talents within the company in order to create a proper engine that would eliminate waste from the process of manufacturing (Lean Production, 2013). This lean tool can be evidently observed in Coca Cola's operations as its CEO Muhtar Kent envisions the type of world with safe water access to everyone. Under the leadership of Kent, the company has gone through big changes of setting their priorities, expectations and values which has made waves towards the sustainability of water. The strategy of the company has joined its operations, culture and processes and it also receives a lot of support from the senior management of the company. The accountability and responsibilities regarding the strategy are very clear and the main managers of the company are responsible for taking responsibility of the agenda set by the company. The coca cola company is also partnering with different bottling companies in order to meet their goals of sustainability and it is also focusing on expanding their strategies with suppliers. The company has overall achieved three levels for framework execution.

Lean Tools: Value Stream Mapping

Value stream mapping is the tool used for visuals that show the production flow. It also shows the present and future processes which helps in highlighting the room for improvement. With the help of visual maps, the wastes are exposed before time which helps the company for improving any process that requires improvement (Lean Production, 2013). Value stream mapping is carried out by the Coca Cola company because it has fixed sustainability to be their culture due to which annual audits are conducted of their partners in bottling to see whether the plants are up-to-date with the goals of the company or not. The reputation and future of the company not only depends upon it being a better corporate company or working to help different communities, but it also depends on the availability of water supplies in the future in order to produce their product. Around seventy percent of the beverages of Coca Cola are sold in countries outside of North America and the population growth in the world is expected to rise in India, Brazil and China where there is deficiency of water, it is highly essential for the company to work with communities and governments to make sure that the resource of water are available to people in different areas (Coca Cola 2008/2009 Sustainability Review). Coca cola has taken a strong position in managing the needs of water in the future and has partnered with WWF in the Water Protection Plans regarding the plants of bottling by 2013 to make sure that their sources of water are fit for future use. Around three hundred billion liters of water was used in 2009 by the company (Coca Cola 2008/2009 Sustainability Review). Regarding the company's targets of water sustainability, it focuses on growth of revenue which also means that the use of water by the company will increase with time.

Conclusion

Coca Cola's case of sustainability goals is very clear and it can be clearly seen that these strategies will be a part of many companies in the future because of the scarcity of water. As it is argued that water is the right of humans as well as a commodity that is used to earn profit by selling, a solution that comes up for reducing corruption is that the rights should be shared in both communities which include the government as well as the businesses. The present private giants of the company like Suez are managing the supply of water and can cause the prices to go much higher with the decrease of water in different parts of the world especially in India and China. Agriculture is set to be an important part of the solution in managing the crisis of water. The company of Coca Cola should also focus of managing agriculture and develop different programs for the suppliers for their sustainment. They should work in promoting different farming technologies and train the farmers according to them. Furthermore, the water crisis has to be solved with clear collaboration of communities, NGOs, governments and businesses while the company should continue to play its role and set an example for other companies as well.