1.

a) Coca-Cola is probably the worlds best-known brand with a presence in every

country on earth. We reckon that you would be hard pushed to walk into any
supermarket, grocer or retail outlet without finding one of its products.
Wendy Manning, vice president of customer logistics as Coca-Cola Enterprises (CCE)
gives us some insight by talking about the distribution of products across Western
Europe.
Manufacturing Global reveals 14 key facts about Coca-Colas supply chain.
You are likely to see at least one Coca-Cola product in supermarkets or newsagents
the world over.
CCE is responsible for manufacturing and distributing a wide range of soft drinks
under the Coca-Cola umbrella from Coke itself to Fanta, juices, water, sports and
energy drinks.
Its operations span eight territories in Western Europe, delivering more than 600
million cases of product to retailers every year, which are then sold to over 170
million consumers.
So how is this vast operation handled? How does the company ensure that every
bottle produced makes it into the hands of consumers on time and at the highest
quality? Well, according to Manning it all starts on the factory floor.
CCE has 17 state of the art manufacturing sites across Europe and 95 percent of
drinks are made in the country in which theyre sold.
CCE also keeps much of its sourcing local, helping to keep the supply chain short
and fast, which is important for keeping up with demand.
Once the ingredients and components arrive through the factory doors, the focus is
to produce high-quality drinks, in the right quantity and at the right time, in order to
meet customer demand.
CCEs factories run some of the fastest production lines in the world.
The company is able to get drinks from its factories to supermarket shelves within
48 hours.

CCE is continually look for new investments to improve the efficiency of its
operations it recently opened a new 20m automatic storage and retrieval system
at its distribution centre in Dongen, The Netherlands. The new facility is designed to
hold and automatically move pallets of bottles and cans enabling CCE to more
efficiently serve the needs of customers, as well as to maximise the cargo space
used in trucks.
The company is also continually testing new technology and innovations, such as
Bluetooth beacon technology and 3D printing.

Sustainability is key to developing an efficient supply chain. Throughout the

manufacturing process, sustainability and efficiency are always front of mind. At the
Wakefield production facility in the UK, CCE recently introduced a new combined
heat and power system, which will save 1,500 tonnes of CO2 every year. This kind
of innovation has helped the company reduce its operational carbon footprint by 23
percent since 2007.
While the technology and machinery in CCEs factories is undoubtedly crucial to
getting bottles out and into the market, its people are just as vital. Our 166-person
strong logistics team provides exceptional day-to-day operational support seven
days a week, 364 days a year to ensure on-shelf availability. It is this team that
oversees all operations and ensures that once bottles are filled, each and every one
makes it onto the trucks and on to the roads, says Manning.
The job doesnt finish once bottles and cans are on the road.
Once products are delivered to the stores, the company also has a role in ensuring
that bottles make it all the way to the shoppers fridges. The companys marketing
departments has exceptional relationships with retailers to ensure that in-store
merchandising makes Coca-Cola products easy to find.
Throughout the journey of our bottles, its important that we communicate with our
retail partners, especially because retail can be unpredictable and even the smallest
changes, such as the weather, can affect shopper behaviour. Our production
systems are networked to allow us to raise or lower capacity, allowing us to meet
demand peaks (expected or unexpected) by flexing up production at several sites if
needed. And were fully prepared for exceptional levels of demand, for example
during Christmas or major sporting events like the Olympics, explains Manning.
One way the company remains close to its customers is by promoting closer
collaboration to ensure its delivering what they need, when they need it and in a
way that works for them. For example in 2012, it pioneered a unique 12-month job
swap between rising stars of CCE and one of its customers, Tesco. Not only did this
add value to the careers of the individuals involved, but it also proved an effective
means for sharing knowledge and insight between the businesses, helping to align
strategies and develop plans to drive sales.
From the beginning of each bottles journey when raw ingredients enter the factory,
to the very end when it is chilling in the fridge; collaboration, sustainability,
innovation and efficiency are the key factors that make that factory to fridge
journey seamless and successful.

2.
The economic order quantity (EOQ) is a model that is used to calculate the optimal
quantity that can be purchased or produced to minimize the cost of both the
carrying inventory and the processing of purchase orders or production set-ups.
Economic Order Quantity is the quantity that minimizes all these costs. The model

was first developed by Ford W. Harris in 1913 but R. H. Wilson, a consultant, is given
credit for his in-depth analysis.
Formula:
Q= (2DS/H)
Where,
Q = optimal order quantity or economic order quantity
D = demand of the item
S = fixed ordering cost or setup cost
H = inventory holding cost per unit
The economic order-quantity model considers the trade-off between ordering cost
and storage cost in choosing the quantity to use in replenishing item inventories. A
larger order-quantity reduces ordering frequency, and, hence ordering cost/month,
but requires holding a larger average inventory, which increases storage (holding)
cost/month. On the other hand, a smaller order-quantity reduces average inventory
but requires more frequent ordering and higher ordering cost/month.

Economic batch quantity (EBQ), also called "optimal batch quantity" or economic
production quantity, is a measure used to determine the quantity of units that can
be produced at minimum average costs in a given batch or production run.
Economic Production Quantity model (also known as the EPQ model) is an extension
of the Economic Order Quantity model. The Economic Batch Quantity model, or
production lot-size model, is similar to the EOQ model in that an optimum is to be
calculated for the batch quantity to be produced.

In working with this EBQ model, principal assumptions are:

The demand (D) is known and constant within a certain period of time.
The unit cost of the inventory item (U) is constant.
The annual holding-cost per unit (Ch) is constant.
The setup-cost per batch (C) is constant.
The production time (tp) is known and constant.
There is one kind of product.
There is no interaction with other products.
The aspect of time does not play a role, just the setup time does.

The setup cost is constant and does not act upon the batch quantity.

3.
a) William Edwards Deming was an American engineer, statistician, professor,
author, lecturer, and management consultant. Educated initially as an electrical
engineer and later specializing in mathematical physics, he helped develop the
sampling techniques still used by the U.S. Department of the Census and the
Bureau of Labor Statistics. In his book The New Economics for Industry,
Government, and Education Deming championed the work of Dr. Walter Shewhart,
including Statistical Process Control, Operational Definitions, and what Deming
called The Shewhart Cycle which had evolved into PDSA (Plan-Do-Study-Act). This
was in response to the growing popularity of PDSA, which Deming viewed as
tampering with the meaning of Shewhart's original work. Deming is best known for
his work in Japan after WWII, particularly his work with the leaders of Japanese
industry. That work began in August 1950 at the Hakone Convention Center in Tokyo
when Deming delivered a seminal speech on what he called Statistical Product
Quality Administration. Many in Japan credit Deming as the inspiration for what has
become known as the Japanese post-war economic miracle of 1950 to 1960, when
Japan rose from the ashes of war to become the second most powerful economy in
the world in less than a decade founded on the ideas Deming taught:
Better design of products to improve service
Higher level of uniform product quality
Improvement of product testing in the workplace and in research centers
Greater sales through side [global] markets

b)
Joseph Moses Juran was a Romanian-born American engineer and management
consultant. He is principally remembered as an evangelist for quality and quality
management, having written several influential books on those subjects. He was the
brother of Academy Award winner Nathan H. Juran

c)
Kaoru Ishikawa was a Japanese organizational theorist, Professor at the Faculty of
Engineering at The University of Tokyo, noted for his quality management
innovations. He is considered a key figure in the development of quality initiatives in

Japan, particularly the quality circle. He is best known outside Japan for the Ishikawa
or cause and effect diagram (also known as fishbone diagram) often used in the
analysis of industrial processes.

d)
Philip Bayard "Phil" Crosby was a businessman and author who contributed to
management theory and quality management practices. Crosby initiated the Zero
Defects program at the Martin Company. As the quality control manager of the
Pershing missile program, Crosby was credited with a 25 percent reduction in the
overall rejection rate and a 30 percent reduction in scrap costs.

4.
The fundamental objective of the Six Sigma methodology is the implementation of a
measurement-based strategy that focuses on process improvement and variation
reduction through the application of Six Sigma improvement projects. This is
accomplished through the use of two Six Sigma sub-methodologies: DMAIC and
DMADV
DMAIC
The set of Six Sigma methodologies that is most applicable to the manufacturing or
production side of a product or service, DMAIC includes these project stages:
Define - address the identification of specific processes to be examined
Measure - record data and use metrics to track effectiveness and evaluate
efficiencies
Analyze - utilize critical thinking skills to review data and clarify goals
Improve - create changes in business processes geared toward improvement and
better alignment with corporate goals
Control - build a system of checks and adjustments for ongoing improvement in
production processes

DMADV
The complementary set of Six Sigma processes that is most applicable to examining
and improving the customer relations side of a company, DMADV includes these
project stages:
Define - address customer needs in relation to a product or service

Measure - involve the use of electronic data collection to measure customer needs,
response to product, or review of services
Analyze - utilize metrics to evaluate areas where product or service can be better
aligned to customer goals and needs
Design - overlap the improvement of business processes that streamline corporate
goals to best meet client and customer needs
Verify - build a system of tests and models to check that customer specifications are
being met through on-going improvements

5.
MRP
Material Requirements Planning, or MRP, was developed in the 1970s to help
manufacturing companies better manage their procurement of material to support
manufacturing operations. MRP systems translate the master production schedule
into component- and raw material-level demand by splitting the top level assembly
into the individual parts and quantities called for on the bill of materials, which
reports to that assembly, and directs the purchasing group when to buy them based
on the component lead time which is loaded in the MRP system.

MRP2
Manufacturing Resource Planning, or MRPII, goes several steps beyond MRP. While
MRP stopped at the receiving dock, MRPII incorporates the value stream all the way
through the manufacturing facility to the shipping dock where the product is
packaged and sent to the end customer. That value stream includes production
planning, machine capacity scheduling, demand forecasting and analysis modules,
and quality tracking tools. MRPII also has tools for tracking employee attendance,
labor contribution and productivity.

6.
Game theory is a tool used to analyze strategic behavior by taking into account how
participants expect others to behave. Game theory is used to find the optimal
outcome from a set of choices by analyzing the costs and benefits to each
independent party as they compete with each other.
Game theory explores the possible outcomes of a situation in which two or more
competing parties look for the course of action that best benefits them. No variables
are left to chance, so each possible outcome is derived from the combinations of
simultaneous actions by each party

7.
The House of Quality is the first matrix in a four-phase QFD (Quality Function
Deployment) process. Its called the House of Quality because of the correlation
matrix that is roof shaped and sits on top of the main body of the matrix. The
correlation matrix evaluates how the defined product specifications optimize or suboptimize each other.
It looks like a house with a "correlation matrix" as its roof, customer wants versus
product features as the main part, competitor evaluation as the porch etc. It is
based on "the belief that products should be designed to reflect customers' desires
and tastes".[3] It also is reported to increase cross functional integration within
organizations using it, especially between marketing, engineering and
manufacturing.

8.
Total quality management (TQM) consists of organization-wide efforts to install and
make permanent a climate in which an organization continuously improves its
ability to deliver high-quality products and services to customers. While there is no
widely agreed-upon approach, TQM efforts typically draw heavily on the previously
developed tools and techniques of quality control. TQM enjoyed widespread
attention during the late 1980s and early 1990s before being overshadowed by ISO
9000, Lean manufacturing, and Six Sigma.
Total quality management can be summarized as a management system for a
customer-focused organization that involves all employees in continual
improvement. It uses strategy, data, and effective communications to integrate the
quality discipline into the culture and activities of the organization.

Customer-focused. The customer ultimately determines the level of quality. No

matter what an organization does to foster quality improvementtraining
employees, integrating quality into the design process, upgrading computers or
software, or buying new measuring toolsthe customer determines whether the
efforts were worthwhile.

Total employee involvement. All employees participate in working toward common

goals. Total employee commitment can only be obtained after fear has been driven
from the workplace, when empowerment has occurred, and management has
provided the proper environment. High-performance work systems integrate
continuous improvement efforts with normal business operations. Self-managed
work teams are one form of empowerment.

Process-centered. A fundamental part of TQM is a focus on process thinking. A

process is a series of steps that take inputs from suppliers (internal or external) and
transforms them into outputs that are delivered to customers (again, either internal
or external). The steps required to carry out the process are defined, and
performance measures are continuously monitored in order to detect unexpected
variation.

Integrated system. Although an organization may consist of many different

functional specialties often organized into vertically structured departments, it is the
horizontal processes interconnecting these functions that are the focus of TQM.
Micro-processes add up to larger processes, and all processes aggregate into the
business processes required for defining and implementing strategy. Everyone must
understand the vision, mission, and guiding principles as well as the quality policies,
objectives, and critical processes of the organization. Business performance must be
monitored and communicated continuously.
An integrated business system may be modeled after the Baldrige National Quality
Program criteria and/or incorporate the ISO 9000 standards. Every organization has
a unique work culture, and it is virtually impossible to achieve excellence in its
products and services unless a good quality culture has been fostered. Thus, an
integrated system connects business improvement elements in an attempt to
continually improve and exceed the expectations of customers, employees, and
other stakeholders.
Strategic and systematic approach. A critical part of the management of quality is
the strategic and systematic approach to achieving an organizations vision,
mission, and goals. This process, called strategic planning or strategic
management, includes the formulation of a strategic plan that integrates quality as
a core component.

Continual improvement. A major thrust of TQM is continual process improvement.

Continual improvement drives an organization to be both analytical and creative in
finding ways to become more competitive and more effective at meeting
stakeholder expectations.

Fact-based decision making. In order to know how well an organization is

performing, data on performance measures are necessary. TQM requires that an
organization continually collect and analyze data in order to improve decision
making accuracy, achieve consensus, and allow prediction based on past history.

Communications. During times of organizational change, as well as part of day-today operation, effective communications plays a large part in maintaining morale

and in motivating employees at all levels. Communications involve strategies,

method, and timeliness.
These elements are considered so essential to TQM that many organizations define
them, in some format, as a set of core values and principles on which the
organization is to operate .

9.
Overlooking the continued growth of e-commerce as a channel in the industrial
sector
Two years ago, Amazons presence as a major seller of industrial products was
non-existent. Today, via Amazonsupply.com, the company commands 2 percent of
the channel and is growing. One need only to look at what Amazon did in the
consumer products sectorand, especially, what the online giant did to established
physical retailers of booksto see how this story will play out. To avoid being the
next Borders, small and midsize industrial manufacturers and distributors must take
ecommerce seriously. That means building multi-channel fulfillment networks that
can simultaneously process orders from multiple ordering channels and fulfill them
from the source that provides the highest level of customer satisfaction and the
lowest fulfillment cost. With customers today expecting more and better ways to be
served, multi-channel networks have become key to keeping prices low, providing a
leg up on competition, and driving customer loyalty.

Inattention to potential risks

An inability to define potential risks and develop mitigation strategies for those
risks that have a high probability of taking place could jeopardize business
continuity and profitability. Conversely, companies that tackle risk as a top priority
are less likely to face major issues related to scalability and responsiveness to
volatile demand. Therefore, small and midsize companies need to create a robust
risk mitigation plan that addresses some of the most common and critical supply
chain-related risks including supplier quality and performance, commodity price
volatility, more complicated product and service mix, lack of visibility to outsourced
operations and relationships, inadequate physical distribution infrastructures, and
volatile transportation costsjust to name a few.

Unrealistic assumptions that supply chain management technologies will fix

everything
Theres no doubt the modern supply chain is now powered by technology, and that
technology has become vital to making informed, timely business decisions about
how to maximize operational and financial performance. However, for technology

to work most effectively, a company must have an explicitly stated and shared
corporate vision and missionnot just among external customers and service
providers, but also internal constituents involved in the supply chain, including
warehousing, transportation, and sales. Furthermore, supply chain management
technologies are most effective when they support tight collaboration among these
parties and provide visibility into all key aspects of the business.

Overreliance on past performance to predict future sales

If theres one certainty about todays economic environment, its that nothing is
certain anymore. Customer needs are continually evolving, and massive shifts in
market dynamics can hit with speed and without warning. That makes plotting a
course for the business extremely challenging. Best-in-class companies track actual
sales as they happen so the supply chain network has the information necessary to
react more quickly to any changes and fluctuations in customer demand. But they
also use more than just sales data to help make critical business decisions. Realtime inventory levels, cash flow, and financial metrics also are important to giving
decision makers what they need to create forecasts that recognize current and
potential future changes that could affect customer buying patterns and the
companys ability to fulfill evolving customer needs.

Continued complexity being added to supply chain operations

As more technologies, processes and red tape continue to be layered onto their
operations, companies increase their costs of doing business and create confusion
about what must be done to realize the corporate objectives and vision. This is
especially true of companies with multiple business or operating units. Companies
must be vigilant about finding and stamping out unnecessary complexity wherever
it existsfor instance, identifying ways business or operating units can share
common processes and technology platforms, or having suppliers provide a
reverse report card that grades the companies they work with on how easy it is to
do business with them and illuminates areas that could be streamlined.

Lack of understanding of the full capabilities of suppliers and service partners

In most companies today, suppliers are key extensions of the business model and
play an important role in enabling companies to meet customer demands. Thats
why its critical for companies to know the full range of capabilities and offerings
suppliers can bring to the table, as well as any shortcomings among suppliers that
could disrupt the business. The last thing a company wants to do is promise
customers an increase in response time or the launch of desired new products
without being sure key suppliers can support those initiatives. When selecting new
suppliers, companies should be rigorous in evaluating all aspects of suppliers
business (including financial stability and how well suppliers cultures mesh with
their own). But the work shouldnt stop there. Companies should conduct regular

audits and assessments on an ongoing basis to make sure suppliers are keeping
pace with their business