MANAGEMENT

Running Head: MANAGEMENT

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Management

Abstract

The Coca Cola drink was invented by John Pemberton. At first, it was sold at a soda fountain in Atlanta in 1886. In 1889, Pemberton sold the Coca Cola formula to Asa Candler, who formed the Coca Cola Company in 1892. The company functions as a franchise, producing only the syrup and giving permission to bottlers all over the world to dilute and carbonate it. The company has been and still is one of the most profitable companies in the world owing to its devotion to quality management and customer satisfaction (George, 2003). To supply almost every nation in the world, the company has to maintain a well-organized supply chain, quality management and measurement, and come up with solutions to problems that hinder its operations.

Supply Chain

Generally, the supply chain involves getting raw material, processing them, manufacturing the product, and selling the final product to the consumer. For the Coca Cola Company, these steps are divided into six components. The first one is getting and maintaining relationships with agricultural organizations for the procurement of corn, citrus and other raw materials required by the company. Though the company requires a lot of corn and spices for its processes, it does not own its own farm. Being a popular produce, corn is likely to be in short supply especially in periods of drought. By fostering positive relationships with its suppliers, Coca Cola ensures a constant supply of the spices they need, even in times of shortage.

The second component is processing and cleaning the water it needs; and processing the agricultural raw materials into flavor and syrup. Being a beverage company, it must have unlimited access to all the water it needs. Together with the water, the flavors and syrups produced are used in the production of Coca-Cola syrup (Hellriegel & Slocum, 2007). This third component is the reason behind the company’s long time success and its dominion in the soft drink industry. Coca Cola Company has for a long time succeeded in keeping secret the procedure for manufacturing the soft drinks. To keep this secret from being leaked, only a few technicians know this recipe, and are responsible for ensuring consistency in the taste. The pre-mixed mixture is then sent to the fourth component in the supply chain.

In the forth step, the company undertakes to sell this syrup to the Coca Cola Bottling Company. The fifth step of diluting and carbonating the syrup is executed by the bottlers and ultimately, packaging and distributing the product. The bottling company sells the drink to the consumer. The drink may either be bottled, canned or a fountain. The last component of this supply chain is the distribution of the soft drink to companies, facilities, shops and other groups who may have ordered for them. In an effort to make the supply chain more efficient, the company merged three of its units in North America to form a more efficient unit called the Coca Cola Enterprise (Hellriegel & Slocum, 2007). To achieve this, the departments of information technology, procurement and supply chain were re-organized.

With such a big company, managerial problems are likely to arise, with the parent company dominating over its subsidiaries. Instead of controlling its subsidiaries, the Coca Cola Company works closely with the allied companies or partnerships, a system known as Extended Enterprise. This comprises the Bottling Company, soft drink distributors and vendors and restaurant owners coming together to meet their mutual interests. By allowing other companies to work with it, the Coca Cola Company relieves itself of some duties, while still making the high profits it so desires.

Importance of Quality Management and Measurement in the Global Context

Quality management is an important factor for organizations and more so for global organizations. Global companies have to ensure that the quality of each of their products is consistently high to meet the demands of both the market at home and outside. In this dynamic world, companies must continuously find ways of improving the quality of their products or services through the increased efforts of their employees. The idea is to increase returns by improving the product. Quality control is important in a number of ways. Improving quality drives down costs while improving productivity at the same time. The result is the creation of more employment opportunities, securing a greater market share by the company and ensuring the organization’s continued existence in the long-term.

Quality management also saves on the time required to produce a product. With the knowledge on the level of standards expected, manufacturers produce goods that measure up to these expectations. Without the standards, manufacturers would produce sub-standard products hoping they will be accepted in the market. Satisfied customers give the most convincing referrals, increasing the company’s customer/ client base. Clearly defined quality measures reduce the margin of error in the course of production. In addition, they make it easy to train new staff on the roles expected of them. A company that maintains high standards of quality will have a good reputation in the community, and therefore a high credibility, staying well ahead of its competition (George, 2003).

Comparison of the Global Operational Processes

The control chart below shows the relationship between the operational activities and the quantity of products sold. In this example, the operation chosen is procurement of materials.

Generally, the greater the amount of raw materials procured, the more the number of bottles of soda produced. However, this may not always be the case due to other influencing factors. The aspect of quality control is a critical one in determining the number of units of the product that will be released to the market for sale. In addition, in the course of processing and manufacturing, unforeseen losses may occur, reducing the number of units of the final product.

Enterprise Resource Planning

Enterprise Resource Planning (ERP) combines information on management from within and outside the organization. This is carried out by software, aiming to improve the flow of information between various departments in the organization, leading to increased efficiency in operation. In addition, the system serves to control the links with stakeholders outside of the organization (Shanks, Seddon & Willcocks, 2003). Linking the different departments means that changes made in accounts receivable for example, will be automatically reflected in the cash flow statement. Due to improved co-ordination, the management will be able to make informed decisions. The ERP covers eight major areas of concern listed below:

Finance and accounting (ledger, cash flow, accounts payable, accounts receivable, long-term assets and budgets)
Management of the supply chain (purchases of inventory, product inspection, organizing the supply chain, among others)
Human resource (recruitment and training of new staff, payroll system)
Project management (cost, time and activities in project implementation, monitoring and evaluation)
Manufacturing (division of labor, quality control and determination of the lifecycle of the product)
Maintaining customer relations
Controlling access to important information
Provision of data services

References:

George, W.W. (2003). Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value. New Jersey: John Wiley and Sons.

Hellriegel, D. & Slocum, J. W. (2007). Organizational Behavior. Kentucky: Cengage Learning.

Shanks, G., Seddon, P.B. & Willcocks, L. (2003). Second-wave Enterprise Resource Planning Systems: Implementing for Effectiveness. New York, NY: CambridgeUniversity Press.