Coca Cola Voluntary Inter-Industry Commerce Solutions Association

Coca Cola

Voluntary Inter-industry Commerce Solutions Association (VICS) Case

"True or false: Coca-Cola's experience with inventory forecasting supports the principles set forth by CPFR"

There was a time in which supply chain management was a rather straight forward process. However, as business has grown substantially larger throughout the years so have their supply chains and distribution networks. As the case mentions, Coca-Cola used to come in little green bottles and the drivers unloaded the products to retail locations from the truck as needed. Today however, the second-largest Coca-Cola bottler in the world delivers more than a hundred and twenty five million cases to different types of customers all with different requirements and promotional activities (Murphy, 2002). Today's modern organizations have to integrate the latest in technology and supply chain management in order to effectively meet the demands for their products on such a massive scale.

Coca Cola's experience with inventory forecasting is definitely consistent with the principles set forth by the CPFR with one separate consideration. Although Coca Cola's efforts didn't explicitly collaborate with their customers, they seemed to make provisions for it in the future. Instead Coca Cola focused their efforts on internal collaboration with the involvement of the retailer being a future possibility. To provide a higher level of internal collaboration, the Coca Cola operation created a system that would allow production and warehousing to communicate through a central command center. This allowed for inventory excesses in one location to be shifted to another in the event that there was a shortage elsewhere.

Complexity in Supply Chains

Supply chains are often a culmination of various evolutions in the growth of a business that are pieced together over an extended duration of time to meet demand. It is seldom that a company gets to design or redesign the entire supply chain altogether. Rather changes are usually incremental and far less than comprehensive (Carter & Easton, 2011). Given the trend of how supply chains evolve, even though Coca Cola didn't necessarily adopt a framework for full collaboration with their customers, they definitely made a step in a positive direction towards that goal through an incremental change. Few organizations would have the luxury to disrupt operations sufficiently enough to completely redesign the supply chain and thus, in practice, it is often the case that incremental change is the best that can be done.

However, at the same time, having an end goal being an environment where retailers, manufactures, and service providers can jointly identify opportunities, barriers or obstacles that could be addressed within the goals of the CPFR framework serves as an appropriate goal for many of the incremental changes (VICS, 2011). The CPFR has outlined maintained many goals for future collaboration efforts and research including maintaining its stewardship, creating a common language between all stakeholders, and creating and sharing a set of best practices for collaborative initiatives.

Although there is immense complexity in today's supply chains, it is not unfeasible to learn how to effectively manage this complexity. Furthermore, there stands an ideal solution for every situation one might find in supply chain management according to some authors (Almyta Systems, n.d.). This perspective provides value by changing the narrative to view inventory controls and systems as a technical problem that can be solved by employing various models that can simplify the complexity. Furthermore, these models can be further refined to deal with the dynamic and ever changing environment that the modern business world demands.