Wherever you happen to be when thirst strikes—a gleaming office tower in Manhattan, a dusty village in Zimbabwe, or an airplane 45,000 feet above the Pacific Ocean—chances are there's a can of Coke within reach. That's no accident. Since the 1920s, the Coca-Cola Co. has been engaged in an aggressive global expansion campaign— even resorting to riverboats and what the company calls "four-legged power" to deliver its flagship product to locations like the highest elevations of the Andes. It appears that the company's efforts have paid off. Coke is now available in more than 200 countries, and the Coke brand has become one of the most widely recognized on the planet.
The challenges of keeping that worldwide distribution machine firing on all cylinders keep Mark Lynch and his team on the go. These days, Lynch and his fellow members of the company's global supply chain development team travel the world over seeking out ways to shave the last one-hundredth of a cent off distribution costs and the last 10 seconds off the delivery cycle.
A U.S. Army veteran with a bachelor's degree in engineering and a master's degree in business administration, Lynch joined the Coca-Cola Co. 12 years ago to lead a team that provided consulting support to bottlers in 30 countries. He was later promoted to supply chain director for global concentrate operations and spearheaded the creation of Coke's Global Supply Chain Council and the Coca-Cola Co. Corporate Supply Chain Development function.
In his current role as director, supply chain capability development, Lynch leads a small team that's focused on providing strategic support for the company's supply chain initiatives, including the expansion of its global ERP solution. His docket for 2008 includes systems implementations for China, Australia, New Zealand, Germany, and the Philippines.
Lynch spoke recently with DC VELOCITY Group Editorial Director Mitch Mac Donald about a career that has taken him from the night shift at a Pepsi bottling plant in Cranston, R.I., to Coca-Cola's corporate headquarters in Atlanta; the upside of functional silos; and the right and wrong ways to launch a career in supply chain management.
Q: Tell us a little bit about yourself, your background, and your career migration.
A: After high school, I went into the Army for a bit. Then I went on to the University of Massachusetts to get a degree in mechanical engineering, though I stayed involved with military service through the ROTC program. In addition, with my bachelor's degree, I also got my commission in the Army, so I kept the military thing alive for a few more years. From there, I moved on to a job with Pepsi, which at the time was recruiting fairly heavily for junior military officers with engineering degrees. So the combination of, I guess, some leadership experience and some engineering capability was a good fit for the bottling industry at that time. My career at Pepsi started in a bottling plant in Cranston, R.I., on the night shift.
Q: What came next?
A: I spent a couple of years there and had the opportunity to work as production supervisor and then later to get involved in some of the basic logistics of the day. And that was at a time when technology was just starting to really change the way business was done.
Q: How so?
A: At that time, the PC and the spreadsheet were starting to catch on. When I walked in, people were keeping track of things with green sheets and pieces of paper with lines on them—a lot of pencils with erasers were going through the production office back then. While I was there, different and now pretty basic things like spreadsheet analysis and so forth were just coming into fashion. I had the opportunity to get involved with how to apply that technology in areas like production scheduling, some early supply planning, and requirements planning. I spread my wings a little bit into the warehousing side. The good part about working on the night shift is that you are the person in charge of everything, more or less. You get the chance to really go out and learn more than you might if you just fell into a slot some other way.
Q: You know, we hear a lot about folks who spent the early part of their careers in a variety of different roles and how well that prepared them for supply chain assignments later on.
A: That only makes sense, at least from my perspective. I think that supply chain management has got an awful lot to do with awareness of multiple functions and trying to make the whole enterprise work better. Sometimes you have to be a little bit careful that you don't become too specialized. As I was coming through my career, certainly the normal path and the coaching would have been to stick with heavy engineering, do some time in maintenance or in quality manufacturing, and then go straight up to be a plant manager and that sort of thing. Early on, I took the chance to go out and do a few other things, so I got involved in the logistics function. I got involved in learning how we were doing back-hauls. I learned about yard management, load planning, and the warehousing part of the equation. While some of my manufacturing friends would laugh at me for getting dirty playing with the trucks, I think it was really good experience to do it back then.
Q: Sounds like you were actually being exposed to a lot of what we now think of as supply chain functions. What was the next phase of your career?
A: I had a chance to do a brief stint in corporate in what was really a plant optimization assignment. I was part of a small team that went out and visited the different plants in North America for the Pepsi system and helped do broadbrush operations assessments. We aimed to help the leadership teams of those plants create what wasn't really called a supply chain plan back then—it was called an operations plan—but it was really bringing the warehousing, the distribution, the transportation, the manufacturing, and the procurement areas together. That gave me the chance to be part of the team in the Pepsi system that helped create the sales, inventory, and production process.
My next assignment was in southern Ohio as a product availability manager, which essentially is a supply chain manager with a Pepsi-specific title. In that job, I had direct responsibility for all the logistics and planning and scheduling as well as for sales inventory planning. That was a good experience, and I also picked up my MBA from Xavier University while I was in Ohio.
Q: What prompted you to seek out the graduate degree?
A: I saw it as a natural complement to my engineering degree and my work up to that time. The MBA was really more about learning the language of the other partners in the chain—learning the language of finance, the language of marketing, and the language of legal—and having a little bit better insight into what was important to them and why. That's been very valuable in the supply chain world, where a lot of assignments involve getting people to work together toward a common goal.
Q: It sounds like you came to the realization early on that supply chain excellence was all about breaking down functional silos and looking at the enterprise as a whole.
A: Perhaps. It is a bit funny. We talk a lot about functional silos here in the Coca-Cola system. Our CEO, I think, expresses that point really well.He says,"Don't get me wrong. I don't want to get rid of functional silos. I want deeper, stronger silos. I just want better bridges connecting them."
Q: So you're fortunate to have management that recognizes the value and importance of efficient supply chain operations. That must be a huge help.
A: It is. There's no doubt. And to his point, I think you have to have that good functional expertise in your organization. You have to be good at something. It's even better when you are good at it and you are good enough to be confident enough to connect it.
Q: You began your career with Pepsi but wound up at one of its biggest competitors. How did you come to join the Coca-Cola family?
A: I left Pepsi in the mid '90s when the company went through a restructuring. In 1987 and 1988, Pepsi had spent about $4 billion to buy the franchise bottling system back. Then it dedicated a few years to bringing in a lot of talent to try and shore it up. Basically, management wanted to fix it and set it on the right path. By 1994, that work was more or less done, and we were told, "You guys did a great job, but the same kind of talent that we brought in to change is not what we need moving forward. Plus we can't keep paying you as much." So, through some networking, I met up with a vice president at Dial Corp., who had been at Pepsi and was also a Xavier grad. He gave me a call and offered me a chance to go work with him. I became a logistics director for the East Coast and Canada for Dial.
At the time, liquid detergent sales were growing at a phenomenal rate. Dial had a brand called Purex that was a good competitor for the Tides of the world. They had a problem, though. They had more of an old school CP (consumer products) model, where they did everything through third-party distribution centers, moving truckloads of product to the retail distribution centers and then out to the stores. Really what they wanted to do was introduce a better, stronger, faster direct-store delivery model. I ran the plant within the distribution center in Hazelton, Pa., and had responsibility for really starting up sales and operations planning processes and direct store delivery processes. We pulled a lot of costs out of there by cutting out middlemen and being able to do a better job of promotion support, a better job with direct-store delivery, that sort of thing.
That was a great experience because I learned a lot about the warehouse delivery model. I had come up through the direct-store delivery model, so I could bring them that, but I also got to learn about how the warehouse system works.
After a couple of years there, I was faced with a choice. Dial wanted me at headquarters in Phoenix. I also had some old friends from Pepsi who were now with Coca-Cola in Atlanta. They had been calling, and they were working on something that sounded really interesting.
In their view, and I agreed with them, the international beverage distribution system was ripe for some big efficiency improvements. The bottlers needed help and didn't really know where to get it. So I figured I'd give it a try, and so I found my way to Atlanta. My role when I joined the Coca-Cola Co. was to serve as what we then called a "value chain consultant."
Basically, Coca-Cola is a franchise model. I got to spend a few years traveling around the world. As a matter of fact, in the first three years I visited 30 countries. I spent time with bottlers working on infrastructure planning, network design, demand and operations planning, maintenance management, computer maintenance management systems, plant management, manufacturing, education systems, warehouse management, and warehouse management systems.
Q: How about your role today? Has it changed since you joined the company in 1997?
A: It is interesting. It has gone a little bit of a full circle, I guess. I started in that consulting piece. We had a small team here in Atlanta that provided that service to the bottler network. After that position was eliminated during a 2000 corporate restructuring, I took the role of supply chain director for the concentrate operations. I was responsible for the Coca-Cola Co.'s plant operations that produce concentrate and deliver it to the bottler system.
I did that for a few years, then I helped start up our global supply chain development team. In many ways, it has been like reconstituting what we had back in the late '90s, but getting a team that would provide thought leadership and strategic support for key initiatives on supply chain development of the Coca-Cola system. That is the team that we have put together now. I lead the plant operations and manufacturing, warehousing, distribution, and planning sections of that team. We also have someone looking after network design, product lifecycle management, and commercialization. We have someone else looking after training and someone else looking after customer development and customer integration. So now we've got that team up and running. I have just in the past six weeks or so taken on the responsibility for supply chain capability director for our "Program Scale," which is our global ERP [enterprise resource planning] solution. We are looking to take the concept of ERP to sort of the next generation. Our objective is to move from survive to thrive.
Q: Great phrase!
A: The early rounds of the ERP implementations were really mostly about transactions, automation, and record-keeping. They did a lot for the finance side, but the early implementations of ERP have not delivered on the supply chain side. They really haven't made it easier to run the business day to day.
Q: In a broad sense, what is the Coca-Cola Co.'s overall mission from a supply chain perspective?
A: Well, I think the Coca-Cola Co. endeavors to be the number one beverage provider in the world. I guess some of our lasting mission statements are to bring refreshment within an arm's reach of desire. In our view, our work is not done until you have it in your hand. That means we have to make sure that at every opportunity for a sale, we have the right product—in the right package and at the right price—at the right place. For us, Coke is all about refreshment. I don't care where you are in the world—if you pick up a bottle or a can that has Coca- Cola on the label, you expect a certain level of quality. You expect a consistent taste. You expect a consistent experience, a high-quality refreshment experience. That is what you want, and that is what you are going to get. We have to make sure that it is as efficient as possible and it is doing that everywhere in the world.
Q: So everyone, every link in the chain, has a role in assuring product quality and satisfying customer demand?
A: Absolutely. And it is not just the product integrity inside the can; it's also the look and feel of the can. It is the design of the package. It is the design of the product. It is having the right price for each market.
Q: It seems clear that you see achieving peak efficiency as a never-ending job— no matter how good it gets, it can always be better. Are you always looking for "what's next" in terms of even greater optimization?
A: Yes, and that's always going to be the case because, frankly, things are always changing. The same things that won yesterday don't win tomorrow. The fact that we are very, very good at moving twelve-packs and two liter bottles of Coca-Cola directly from our production lines in North America out to the shelf at a Kroger or a Wal-Mart or a Publix doesn't mean much as it relates to our other products. You've also got to figure out what you're going to do with Coke Blak, what you're going to do with our chilled juices line, what you're going to do with the new iced coffee venture, what you're going to do with Minute Maid juice drinks, and what you're going to do with Powerade. They are all different. There are different packages. There are different storage requirements. There are different shelf lives. There are different consumers. There are different price points. They are even sometimes at different kinds of stores. If you think you can have one solution for all, you are probably leaving a lot on the table in terms of optimization.
Q: What is your biggest challenge moving forward?
A: Number one, you can never lose focus on building discipline and efficiency into your process to really cut out that last one-hundredth of a cent, to cut out that last 10 seconds of the time to market. When you think about things like moving twelve-packs, thousands and thousands and thousands of twelve-packs every hour through a production line then through a distribution channel and then onto a shelf of a Wal-Mart, that is something that you really want to nail down and optimize. It is a process that is highly repeatable. You want it to be highly automated. You want it to be very disciplined. At the same time, you have to be willing to embrace every new project. It is a never-ending optimization process. You might be optimizing something and investing that way and then all of a sudden the product will die. Well, tough. That is why you came into work that day.
You did the best you could. You got it going in the right direction. If the product dies, you apply that learning to the next project. You have to be able to do both of those things at the same time, which I think is not easy for most people.
Q: If you could share one piece of advice with a young person starting out on a supply chain career, what would it be?
A: Get into a plant. Get into a distribution center and work. Do the hands-on work. Two, three, five years, whatever time frame you like. First of all, it is a lot of fun. It is a lot of work, but it is a lot of fun. It is the right place to work, closest to the shop floor, closest to the loading docks, closest to the manufacturing lines. That is learning that you cannot get anywhere else and it is at least as powerful as an MBA or any other degree you are ever going to pull.
I don't mean to be critical, but I see too many folks who come straight out of school and go into consulting roles, then they find themselves at the age of 28 having really worked hard and with a pretty good-sized paycheck asking "What's next?" They think they could be in charge of an operation, but they can't do it. They've got to go back and start at square one basically. You can't go be a supervisor and can't go be a department manager and can't go lead people and work with unions and understand the real day-to-day stuff if you haven't learned the operation from the ground up.