The Coca-Cola Company’s Enterprise Resource Planning System

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Summary

Coca-Cola is an American company that operates a multinational beverage corporation under Delaware’s General Corporation Law, headquartered in Atlanta, Georgia. The company manufactures, retails, and markets nonalcoholic drinks and syrups, including bottled water, energy drinks, and sports drinks. The company’s most popular drink is Coca-Cola which was invented in 1886 by pharmacist John Stith Pemberton (Butler, 2019). However, after three years, the formula was sold to Asa Griggs Candler for $2,300, who based the company in Atlanta (Butler, 2019). It has been involved in franchise distribution since 1889. The client base for its products is located globally. As the competition became stiff in the early 1990s, the company decided to place refrigerators branded Coca-Cola at every point where Pepsi and other soft drinks were located (Lin, 2016). This strategy helped the Coca-Cola company win the competition from Pepsi among other beverage companies.

Coca-Cola is one of the leading companies in sales globally. Based on the 2005 Coca-Cola company annual report, it had sold beverages in more than 200 countries (Butler, 2019). In 2010, Coca-Cola was reported to have made £1 billion in the United Kingdom’s annual grocery sales. However, in 2017 following consumer tastes shifting from sugary drinks, the company’s sales were down 11% (Butler, 2019). Current reports have indicated that the company’s 36.7% of total revenue is generated from the North American segment. As of 2018, Coca-Cola had 62600 employees globally (Butler, 2019). The global operating firms included an Atlanta-based corporate division and 300 bottling partners globally (Conway, 2021). Coca-Cola sales are driven by solid customer preference choices globally and the strategic setting of retailers.

How Coca-Cola Uses Enterprise Resource Planning (ERP) System

Enterprise Resource Planning (ERP) system is the backbone of the organization for providing fundamental decision-making support. ERP provides an infrastructure where all departments in an organization collaborate and communicate effectively. Large organizations have entirely depended on ERP systems as information reservoirs for decisions that drive a company’s performance. ERP is, therefore, important in bringing together all units of an organization for increased revenue, market share, lower costs, and improved supplier and customer relations.

ERP works via collecting information and sending it back across all ERP systems and individual application components that support diverse business operations, including accounting and marketing, among others. If information is updated in one module by a user, the system automatically updates it. The benefits of ERP include automation of such services as taking orders from clients, packaging, and client rating.

Coca-Cola company incorporates SAP ERP system across a wide array of services. Coca-Cola adopted SAP ERP in 2003, which gained 15,000 users across 45 countries incorporating 175 legal entities and 18 languages (Conway, 2021). Under the SAP ERP, the module rolled out the included supply chain, Human Resources (HR), and Finance. Coca-Cola uses ERP in multiple services, including sales and marketing, accounting services, production and supply chain management, Human Resources, and managing customer relations. Data sharing with the accountant and finance department is the most essential thing in ERP. Intuitively, Coca-Cola company uses SAP ERP for smooth transactions across these departments.

Supply Chain Management systems (SCM) can elevate revenues across the organization

Keeping the manufacturing cost as low as possible, leads to high production and profitability. However, this will lead to increased costs for procuring raw materials and inventory costs for finished products. An integrated supply chain would be efficient in uncovering these issues allowing the organization to adjust operations to increase profitability. Supply chain management performs three core duties, including material flow from suppliers, transforming them into semifinished products, and distributing products to customers.

For a big company, such as Coca-Cola, the SCM begins with the procurement of such materials as agricultural products and water. The other step is concentrating, which is mixed with water and sugar and packaged by bottlers, marketing and distributing the finished product. With the help of SAP, Coca-Cola has adapted blockchain to optimize cooperation with partners who make 160,000 orders in a day (Walendy, 2020). The company uses an IT platform to liaise with bottlers for information on bottle types. With blockchain, the company reduces the duration for order reconciliation to a few days. With the help of an inter-organizational, transparent distributed ledger gives real-time insights into transactions made across different bottlers generating more than 21 billion per year.

The company has an efficient Customer Relationship Management (CRM) technology that engages marketing, sales, and customer service. The company has a customer tracking and analytics software program offered by Davis Software called Telescope. Telescope has three modules for the Customer Communication Center (3Cs). Customer Service Representatives (CSRs) engage the Agent module to enter orders, and manage services and customer leads such as calls and surveys, among miscellaneous data (Walendy, 2020). The company has also initiated Automated Call Distribution Module (ACDM) that distributes calls to available (CSRs). The last module is the Interactive Voice Response System that associates call made from outside centers to enter orders, retrieve delivery and enter market surveys.

How SCM and CRM Provide Value Processes for Competitive Strategies

Through the use of an ERP system that combines SCM and CRM, Coca-Cola company has gained a competitive advantage. For the SCM, the company has created Supply Chain Event Management (SCM) that enables the company to react quickly to resolve supply chain issues. As noted, SCM brings together the vendors, clients, and other warehouse facilities. With the use of an ERP system for SCM, the company can track goods from warehouse processes such as receiving procedures and distribute them via cross-docking (Simeonidis, 2016). This will cut inventory costs while simultaneously giving top priority to value goods with a short life cycle. For the CRM tenet, the company maintains close ties with its customers via the application of CSRs (Devault, 2021). Overall, it will lead to high client loyalty, which will lead to return clients.

Possible Challenges in Moving to New ERP System

Moving to a new ERP system might present unique challenges. One of the critical issues is the shifting of pre-existing functionality that calls for organizations to make strategic decisions on changing the business to fit the system or change the design to match the system (Ahmed, 2021). As a company shifting to ERP, Coca-Cola will be faced with this issue, and hence, a strategic decision is needed.

A solid desire to fit the new ERP into the existing system is not the case. The appropriate way to approach this would be to redesign the current processes to work in the new ERP system (Ahmed, 2021). Other challenges that would be prevalent include lack of management support, inadequate skills to handle end-to-end systems, and lack of change management. Shifting to ERP might not be easy as it presents challenges that need tactical decision-making.

ERP is significant for a wide array of services, including supply chain, Human Resources (HR), and Finance. Coca-Cola uses ERP for multiple benefits, including sales and marketing, accounting services, production and supply chain management, Human Resources, and managing customer relations. ERP efficiency has been identified in SCM and CRM services which lead to elevated sales and profitability. Shifting to ERP comes with benefits as services are automatedly bring a new experience to internal and external clients. However, it presents challenges involved with changing both.

References

Abdelhadi, M. (2016). The Success of CRM. Journal of Accounting & Marketing, 05(04).

Ahmed, M. (2021). 9 drowning ERP implementation risk factors you need to be mindful of. SCMDOJO. Web.

Butler, D. (2019). History of Coca-Cola: Timeline and facts. The Street. Web.

Conway, J. (2021). Coca-Cola: Number of employees 2018. Statista. Web.

Devault, G. (2019). Coke fans are loyal despite brand changes. The Balance Small Business. Web.

Lin, H. (2016). Coca-Cola vs. Pepsi: The economics behind coke’s dominance. Essa. Web.

Simeonidis. (2016). ERP implementation Coca-Cola Hellenic. SlideShare. Web.

Walendy, L. (2020). The amazing supply chain of Coca-Cola. All Things Supply Chain. Web.

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"The Coca-Cola Company's Enterprise Resource Planning System." BusinessEssay, 19 Jan. 2023, business-essay.com/the-coca-cola-companys-enterprise-resource-planning-system/.

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BusinessEssay. (2023) 'The Coca-Cola Company's Enterprise Resource Planning System'. 19 January.

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BusinessEssay. 2023. "The Coca-Cola Company's Enterprise Resource Planning System." January 19, 2023. https://business-essay.com/the-coca-cola-companys-enterprise-resource-planning-system/.

1. BusinessEssay. "The Coca-Cola Company's Enterprise Resource Planning System." January 19, 2023. https://business-essay.com/the-coca-cola-companys-enterprise-resource-planning-system/.


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BusinessEssay. "The Coca-Cola Company's Enterprise Resource Planning System." January 19, 2023. https://business-essay.com/the-coca-cola-companys-enterprise-resource-planning-system/.