Inventory Management – Coca-Cola And Pepsi

Inventory Management Assignment Instructions

Research two (2) manufacturing companies that manage inventory and complete this assignment:

Write an eight (8) page paper in which you:

  1. Determine the types of inventories these companies currently manage and describe their essential inventory characteristics.
  2. Analyze how each of their goods and service design concepts are integrated.
  3. Evaluate the role their inventory plays in the company’s performance, operational efficiency, and customer satisfaction.
  4. Compare and contrast the four (4) different types of layouts found with each company; explain the importance of the layouts to the company’s manufacturing or service operations.
  5. Determine at least two (2) metrics to evaluate supply chain performance of the companies; suggest improvements to the design and operations of their supply chains based on those metrics.
  6. Suggest ways to improve the inventory management for each of the companies without affecting operations and the customer benefit package. Provide a rationale to support the suggestion.

Coca-Cola And Pepsi Inventory Management Sample Paper

Types of Inventories Coca Cola And  Pepsi Currently Manage Their Essential Inventory Characteristics

Coca-Cola is a large company with vast resources and covers a wider area in the international market where it concentrates on the production and sale of beverages, juices, bottled water among other products. The inventory of Coca Cola consists of finished goods and raw materials that it uses in making its products. Finished goods consist of syrups and concentrate more on those that make part of the different products of Coca-Cola. Packaging is another product that is inventoried, and it is necessary for the production process especially packing the finished products. Coca-Cola has various inventory characteristics that are mostly association with bulk ordering, supplier information, lead times and cost of products, unit of measures about the products of the company products among other characteristics. Coca-Cola, therefore, maintains its inventory through the ordering of raw materials associated with the making of its products like bottles, caps, and labels among its other items that are used in the manufacturing of its products.

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Pepsi is also another company that deals with beverages especially soft drinks, juices, and water. Pepsi is one of the most successful companies second to Coca-Cola in the beverage industry; it deals with different products, and the inventories of the company include finished goods together with raw materials like the concentrates and syrups used to produced finished products (Zhang et al., 2014). Filling machines, trucks, equipment that rinse, wash and dry the bottles and check for impurities are also part of their inventory. The company has driven inventory together with sensory inventory associated with the equipment for processing different components for the product the company offers.

Goods and Service Design Concepts Integration

The goods and service design takes place in a systematic manner by the company to ensure that the products are clearly processed as they pass through the different sections of machines and equipment that are designed to handle specific stages of production. The design of product manufacturing follows various factors like the demand for the products, organization capacity and while at the same time marching the demand of the services and goods in the market. Pepsi focuses on meeting customer needs by making a strategic decision through effective management of business operations. Pepsi mostly carries out market development and research together with the use of innovation in their products to integrate their services and good’s design.

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In this case, the company carries out research to determine the various trends that include the lifestyles of the customers to determine how they can bring about a product that fits that market. As such, the research gives the company information that can be used to make a decision about the future of some of their products, especially where they can consider coming up with new products for a specific market. Innovation is greatly employed in coming up with new products in the company especially those that meet the need for the population with the ever-changing preferences and tastes and further considering its strong competition from Coca-Cola, which makes similar products. Therefore, in its services design and goods integration, it has to consider its toughest competitor and ensure that its products goods that are going to be a success in the market (Heisinger, 2010).

Coca-Cola engages in various operations that help integrate the goods and services design to meet its goals in the market of being the top company in the provision of beverage among other products in the market. Different equipment is used to manufacture various products of their line. Such products are usually made in a manner that focuses on the market. The design of the products usually follows market research and the way the customers respond to them. Since Pepsi has different products that include water, juices, and soft drinks, they integrate the products by coming up with management systems tailored to study the market and further divide the market into segments. Coca-Cola ensures that the research done focuses on how it can change the design of its products that are for different sectors of the market. It further employs the use of innovation to come up with goods that integrate easily and further uses the media to reach out to the market in a large way.

Role Their inventory plays in the Company’s Performance, Operational Efficiency, and Customer Satisfaction.

The role of the inventory at Pepsi is to ensure that the specific designs made by the company are tailor fit for the market. The inventory contributes significantly to the company’s performance especially since the production process consists of various plants which help in the production of different components like bottles, caps, and mixing of the final product together with filling the bottle and capping them which produces the final product that is ready to be sold to the market. The company maintains the proper functioning of the inventory involved in the manufacture of its products through strategical using the equipment removing any other equipment that is in excess especially those that require similar sensors used in different production processes.  As such, optimal performance is maintained leading to an excellent performance in the market especially in meeting the demand from various market segments. The company, therefore, uses the inventory primarily to serve the needs of the customers in the market on an annual basis through monthly targets. The bottles are designed and shaped by machines in the company, which further ensure that they are standard and conspicuous on the finished products. Raw materials as part of the inventory play a significant role since they are used in making complete or incomplete products, which are further used in making the final products. The products produced in this case are labels, concentrates, sugar among others, which are further used to make the final products. The company in this instance has the Uncaser machine, which removes bottles from different cases while packing them at the same time and maintaining the stability of the bottles together with the washer machines, which have had the function of washing the bottle from any impurities.

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The purpose of inventory at Pepsi is to ensure predictability. As such, predictability helps the company to engage in the planning of scheduling and capacity associated with the control of the amount of raw products to be used, sub-assemblies and parts at a certain instance. Another role that inventory plays is in determining the demand in the market. Therefore, the inventory is used in producing the final product with equipment and the raw material in a strategic manner and preventing any wastage in how the products are mixed, handled and packaged to ensure optimal performance and efficiency (Joshi, 2013).  The company buys raw material in bulk and gets great discounts, which further reduce the costs and improve on its profits as a result.  The company thus produces its products in bulk and takes advantages of economies of scale.

Coca-Cola also takes advantage of the great discounts by obtaining materials early and in bulk in its production units. It father ensures that there is constant supply by keeping raw materials readily available. Since Coca-Cola makes its concentrates that are used in the production of their soft drinks it thus saves on money since it does not have to rely on other companies in the market. Coca Cola further buys material in bulk to prevent cost inflation and any rise or fall in prices as a result. As such, the operations of the companies are not affected much as the employees in the organization have enough inventory to continue production. Customers are satisfied since there is a sufficient of the products into the market (Rajagopal, 2009). Shortages may only be caused by transportation difficulties, but not production challenges as the company is geared towards constant production.

Compare and contrast the four (4) different types of layouts found with each company; explain the importance of the layouts to the company’s manufacturing or service operations.

Coca-Cola as a company uses cellular layouts. Since it makes different products that are either bottled in the same way they employ the use of cellular layout especially in the packaging and branding of some of its products. Pepsi all deals with the production of bottled beverages, juices, and water and some of the equipment still worked in processing the bottles particularly where bottles are washed checked before the onset of the production process. The process layout at Cola involves the different arrangement associated with the manufacturing process. At Coca-Cola, the process starts with the ingredient section, rinsing and washing section with the respective equipment, then mixing, filling and capping equipment follow respectively. Labeling equipment occupies the last position. Fixed -position layout for both Coca-Cola and Pepsi are quite similar, particularly when machines are placed to process the various ingredients, and in bottles preparation. The product layout for both companies is further similar since the arrangement focusses on the sequence of different processes from washing the bottles to filling them, labeling and capping them. Both companies thus exhibit many similarities when it comes to the plant layout and production processes. The packaging process in the different layouts is different for all companies as they both produce either bottles or cans of various sizes.

Determine at least two (2) metrics to evaluate supply chain performance of the companies; suggest improvements to the design and operations of their supply chains based on those metrics.

Cost and delivery of the products associated with both companies are part of the critical metrics that help measure the supply chain and help in determining whether the company is successful in meeting its goals (Sarmah & Sinha, 2011). The cost metrics involves administration, storage, transportation and purchases costs to name a few. The activities incurring such cost should be management to the extent that more costs are reduced regarding making their products and distributing them. Obtaining raw materials through different transportation mechanisms and at the same time selling the production through distributors is another important issue that both companies face. The companies are established and have their transportation channels especially where they distribute their products from their warehouses or open retail shops to sell their products. Delivery is a vital measure associated with the supply of the products. The metric focuses on the timing and scheduling together with the customer and supply deliveries. Since Pepsi and Coca-Cola have their supply channels most of the product sin, the supply chain reach the consumer on time unless their problems with transportation of the goods. Improving the supply chain of both companies would ensuring that the transportation is boosted form the manufacture to the customers and then to the final consumers. Doing more research will father help to study the market and determine various ways of boosting supply in the market through intermediaries.

Suggest ways to improve the inventory management for each of the companies without affecting operations and the customer benefit package. Provide a rationale to support the suggestion.

Since there are inventories, which are similar, it is better for each company to use those sensors in doing similar work and reducing any surplus sensors. Integrating the sensors to other similar activities, swill help in reducing the number of sensors and thus, the costs associated with them. Since both companies, use sensors they can reduce them if there are other similar sensors.

The adoption of technology especially information systems that track inventory has helped Coca-Cola follow up on its inventory and should be further advanced to calculate the costs associated with the inventory together with the output from the production processes. Comparing the costs of production for each unit will help the company make the right decisions particularly when they need to make changes in the manufacturing section (Aaker, 2009).

Business process reengineering is another tool that has been used by companies in changing their different processes to suit the current needs of the market. Coca should thus focus on changing its production processes about consumer needs to ensure it does not lose out to the competitors who are acclimatizing to the dynamics of the market.

Pepsi Cola is in the league of coca though it comes second as one of the largest beverage drinks manufacturers. Reducing inventory is important to the company as it enables the company to reduce the cost of production and further enhance its manufacturing processes through integrated production in its plants. Reducing the various parts in the production process especially sensors that perform the same functions is vital. Pepsi in this regard should ensure that it does not have a surplus of sensors, which are similar, and in different production facilities. The sensors should be merged in their function to work towards investing similar brand concepts while reducing on the sensors at the same time.

Therefore, Pepsi as a company should focus on reducing similar equipment that can live the remaining equipment to perform the same function on the different brands. The company should further re-engineer its business processes to ensure efficiency in both the marketing and production process. Changing processes will help the company to away with old processes that are inefficient and outdated (Wan & Dresner, 2015). As such, the company needs to c study the market continuously to ensure that it develops processes that are in tandem with the changing trends in the manufacturing process and the needs of the market.

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