Coca-Cola bottler takes holistic approach to supply chain resiliency

Coca-Cola Bottling Co. Consolidated has faced a whole host of unforeseen challenges during the past 18 months as the pandemic wreaked havoc with the national economy. However, the company, which is the largest Coca-Cola bottler in the United States, has found that taking a holistic approach to supply chain decision making has helped it weather the storm.

During an educational session at the Council of Supply Chain Management Professionals’ EDGE Conference and Exhibition, Dave Cruz, director of logistics, recounted the wild ride that the company has been on, which includes:

• Dramatic shifts in demand. When the pandemic shut down all but essential businesses, Coca-Cola Consolidated saw demand for what it classifies as “immediate consumption” (such as fountain drinks and single bottle purchases) completely dry up. Demand rose, however, for what the company calls “future consumption” (such as cases of cans). Now that restaurants and other businesses have opened back up, the immediate consumption demand has returned, but, at the same time, the future consumption demand has also continued to grow. Coca-Cola Consolidated has been struggling to keep up with demand.
• Can shortage. The shift in demand toward cases meant that the bottler had an increased need for aluminum cans as opposed to plastic bottles. This phenomenon occurred throughout the beverage industry, and as a result, there was a nationwide can shortage. Interestingly, this was not due to a raw material shortage. Rather it was a production capacity problem. For a while, Coca-Cola Consolidated was actually importing cans from Brazil and South Korea to meet demand. The can shortage is beginning to be alleviated as the can industry has begun to get more production lines up and running.
• Labor turnover. The company’s biggest challenge is finding and retaining labor, particularly for merchandiser positions, which involves stocking product at stores. These jobs are physically demanding and typically involve 12- to 13-hour workdays. As a result, sales representatives and management is helping out with performing merchandising.

The company found that the key to responding well to these changing conditions was creating an agile response team, which consisted of the senior vice president of supply chain, the marketing vice president, and the revenue growth management vice president. According to Cruz, all three of these executives have strong personalities but agreed to leave their egos at the door. Instead, they are have been making decisions that are based on data and take a holistic view of what would be best for the entire organization (and not just their own particular portion of it). (See slide above.)

Initially the company launched this team to deal with the problems associated with the early days of the pandemic. But this “portfolio solutions team” has proved to be so successful that it has become a permanent part of the organization and is now being replicated at lower echelons at the business.