Production Planning and Control Management

Question: Discuss about the Production Planning and Control Management. Answer: Introduction For this report Coca Cola Company has been chosen since it has the largest supply chains in the world. The supply chain of the beverage companies is similar to that of other manufacturing companies with distribution, retailers and consumers all playing their respective roles. This report will basically focus on an overview of the company supply chain. The company has a unique supply chain management in that in that it only produces syrups concentrates then sells them to bottling enterprises over the world. The paper will analyze the main key flows of supply chain applied by Coca Cola, how effective they are, and suggest recommendations of how company can improve. Also the report addresses the make processes well as the supply chain forecasting. Coca cola is one of the powerful brands in the world, an iconic beverage manufacturer that has dominated the market for more than a whole century. Currently offering about 500 brands in over 200 countries serving around 1.8 customers all over the world on daily bases, it prides for top four non-alcoholics beverages which are Diet Coke, Fanta, and Sprite among others like juices, energy drinks, and water. Its success has been as a result of a vision and a system based of excellence. (Hayes, 2007) Coca Cola Enterprises which is the companys main bottler in Western Europe, the company aims at being the leading or a strong number two in all sectors it competes in. Coca cola just like any other organization with long term goals faces numerous challenges to achieve a sustainable growth. To ensure continued consumption of their products regardless of the recipes for products being similar the company uses diverse multiple formulas in preparation of their drinks, this ensures successful supply chains over and over again. It also strives to ensure that it delivers fresh products throughout, makes sure their shelves as well as those of their distributors and retailers are always stocked; this is the long run results into satisfied and happy customers (Rodgers, 2011) The supply chain of Coca Cola contains of the bottling plants, bottling plants as well as the raw materials supply. The company has a distinction between their direct suppliers (of the ingredients, packaging, market equipments promotion services and materials) and the supply of raw materials food their ingredients. Coca cola has managed to create a sustainable supply of raw materials from its suppliers as well as ensuring there is a continued flow of products to its consumers at all times. This is made possible through the various retailers and distributors that the company has worldwide. Information needs to have a smooth flow both internally and externally, information on purchase orders, monthly schedules, technological change requests are among the internal information that Coca cola ensures flows smoothly internally, on the other side still the company maintains a smooth flow of external information ,for example it ensures there is quality complaints handling, suppliers information flow, the company ensures this is achieved through constant interactions between customers and suppliers, also it incorporates distributors, retailers, and providers of logistics into their overall network of information (Koh, 2007) According to the Coca-Cola Enterprises report (2015) the company through the help of other IT systems is able to provide more accurate inventories, maintain information on sales and orders. The information is then gathered and consolidated into the APS system, this helps in having smooth information thought the company. Coca cola has system that allows for quotations, purchase orders, quality complaints, reports on supplier performance flows from the side of the customers to suppliers By applying the game theory in future the company can see its revenues shoot from their current position, then company should realize this by analyzing the conflicting perspectives that exists between decision makers in the different business scenarios , to increase and create a sustainable supply chain its recommended that they strive to achieve a win situation. Due to the numerous transactions the company carries out every day the company has to ensure there is a clear illustration of the flow of money in the company, cash in and cash out must be clearly indicated and the information on all transactions should be clearly recorded (Harford, 2007) .For Coca cola based on the transactions and suppliers invoices, the customer must be issued with the invoice and go through them for correctness, if its correct money flows from the customers flows to the suppliers., at times money also flows from suppliers to customers in form of debit notes. In future to further the companys sales transactions the company should combine all its components, this includes the human , capital, information, raw materials and financial resources, this helps the company come up with a sub system as part the large system that assists the company in its networking. It will as well see to it that the internal and external factors which results into cash flows are harmoniously integrated. Return flows entails the backward flow of the activities, its not possible to have a zero products return in a companys supply chain. Mostly return flows occurs as a result of delivery mistakes, for Coca-Cola Company being a large company conducting online transactions, offering direct-to-home/ store shipments, as well as complexities that come along with global sourcing exposes the company to some delivery mistakes (Malone, 2004).Returns flows has negative impact on all parties involved in the companys transaction, dissatisfied customers who sends back the purchased products, the supplier who have to receive back the products, the manufacturer who used the raw materials to produce unwanted products. This therefore leads us to the critical need for carrying out return flows planning and being prepared for such eventualities at all times. Coca-Cola like any other company should embrace it and the outcome will be planned and regulated costs of operating the business, satisfied customer s that in the long run impacts positively on the companys Return on Investments(Malone, 2004) Coca cola is the one of the leading world best known beverage brands globally; its brands are found all over especially in supermarkets. A coca cola enterprise (CCE) is the one responsible for the manufacturing and distribution of its products. For its production it buys syrup concentrates from the main company Coca cola, combining it with other relevant ingredients to produce the iconic beverages. In planning for its production activities the company has established a uniform IT system program along all its strategic business units, this allows for a consistent products standards and product processes. This enables the company to easily integrate new technologies and business practices into their systems, which enables management of dependentdemand records, as well as carrying out necessary order replenishments. The system gives information on the quantity of end products produced during certain periods of time .in planning for its material requirements the company takes note of the bill of materials, usage quantities, the inventory records, overall item components and the parent-component relationship and finally the future is segmented into time periods(Jacoby, 2009) Coca-Cola Company has 100% timely deliveries to their customers, in all its facilities as well as a fulfilled order fulfillment. On the suppliers each of the companys facility has an efficient and timely delivery performance strategy, with improved business processes that have great reductions in cycle times between the purchasing order time and the customer order processing time. Material Requirement Planning (MRP) of the company time-phased information consists of the scheduled receipts, overall gross requirements, planned order releases, the projected on hand inventory and has achieved Class A MRP II performances over time. Its inventory turnover continues to improve as on hand inventory has declined from 50 to 75%, with productivity gains rising from 85% to 100 %(Krishner, 2014). In future the company can apply Organizational buying behavior theory to pre contract and managing the demands of the company from its customers, this can be effectively done at the procurement department, its impacts and application differs depending on the companys risks at different times(Handfield Nichols, 1999) The company should incorporate political decision-making models in solving interdepartmental conflicts and create smooth production activities. It also helps in choosing the potential customers, assessing the purchase bid expressed on its products as well as in choosing the right suppliers. The company should as well use game theory in making future economic decisions that affect the company and customers as well as the suppliers; this will help in making anticipations about the other partys moves. By applying this theory the coca cola will be in a position to make predictions regarding the behavior of its customers as well as that of its suppliers based on their repeated interactions. This will help reduce inventories and regulate the return flows(Handfield Nichols, 1999). Supply Chain Forecasting Supply chain has several techniques that organizations can use in forecasting their productions trends. These include; This is based on judgmental evaluations, its useful in cases where by the available data is very scarce, or data is no longer relevant, or in extreme cases the data is no longer available at all. Examples of such forecasts in a business are forced sales estimates, visionary market forecasts and the Delphi methods (Blanchard, 2010) Coca cola can make use of the qualitative forecasts when opening up new branches by making a vision on the possible market availability of its products before setting up facility, they will give them a rough idea of the possible market in the region. This method use the past or historical data to forecast on the supply chain, it helps is estimating the nature of demand at given times, in deciding on these both internal and external factors must be considered (Greene .Armstrong, 2012) In the example we have above of the Coca cola company application of this model can be done by taking the sales records as well as the purchase orders at a given time of the year in the past then deriving the anticipated sales demands and supply chains in the future , at such times of the year in the future. This is a visual model, in that visual information is used to predict the sales patterns, the information to be used is plotted graphically, with the use of graphs it gets easier to monitor the sales and purchase trends, hence becomes easy to fore tell on the anticipated trend (Ellis, 2008). As manager its easy to convert data on spreadsheets into graphs which are simple, easy and quick to analyze and come up with the desired forecasts. This method entails making forecasts on sales data when a definite pattern are present in the company , be it upward or downward, trend models includes the regression model, exponential smoothing as well as the triple smoothing. Coca Cola is best suit to use these forecast methods since it has both upward activities and downward activities patterns, hence suitability of their application (https://www.apics.org/) In conclusion market as well as demand forecasts are useful tools in deciding on prices, assessment of future capacities needed, as well in making an analyses and settling on decisions on new marketing entrance or on product expansions or setting up new markets for the available products. Its important to have real data when carrying out an analysis of the overall market demands that gives an estimate of the volume of products that would be purchased by a certain consumer group in geographically defined regions. Each company therefore irrespective of the industry should have clear records stored in their inventories and a Coca-Cola is no exemption. References Blanchard, D. (2010). Supply Chain Management Best Practices (2nd ed.). (J. W. Sons, Ed.) ISBN 9780470531884. Ellis, K. (2008). Production Planning and Inventory Control Virginia Tech. McGraw Hill. Greene, K. C., .Armstrong, J. S. (2012). Strutrured analogies for forecasting. Handfield, R. B., Nichols, E. L. (1999). Introduction to Supply Chain Management. New York: Pritience Hall ISBN 0-13-621616-1. Harford, T. (2007, May 11). The Mystery of the 5-cent Coca-Cola. Why its so hard for companies to raise prices. Slate. Hayes, J. (2007, July 10). Coca-Cola Television Advertisement. Dr. John S. pEMBERTON. Nation Restaurant . Jacoby, D. (2009). Guide to Supply Chain Management: How Getting it Right Boosts Corporate Perfomance (1st ed. ed.). (E. Books, Ed.) Bloomberg Press. Koh, N. I. (2007). Production Planning Control. The Management Operations, 16, 545-554. Krishner, A. (2014). Material Requirements Planning. Coca-Cola MRP. Malone, R. (2004). Closing the Supply Chain Loop: Reverse Logistics and SCOR Model. Digital Editions. Rodgers, K. (2011, February 15). This American Life bursts Coca Cola bubble. What is in the Original Recipe.