Supplire Partnership Coca Cola Multan TQM


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Total Quality Management
Supplier Partnership Coca Cola Multan.

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Supplire Partnership Coca Cola Multan TQM

  1. 1. Report On Supplier Partnership of Coca-Cola Multan. Submitted To: Madam Qurat-ul-ain Submitted By: MBA 5th      Hasan Raza Malik Ghulam Murtaza MUHAMMAD Tayyab Ali Hayyan Ahmad Saad INSTITUTE OF SOUTHREN PUNJAB, MULTAN
  2. 2. Preface This Report is based on Coca-cola Pakistan Multan Punjab, a successful and popular Beverages Brand. It focuses on different aspects relating to marketing and on Total Quality Management or Supply partnership of Coca-Cola in the Pakistan market. The reason of choosing of Coca-Cola as the object of our report is it is successful Supply Partner. This report provides an insight on the marketing tools and their supply partnership used by Coca-cola with all information gathered from reliable sources. This report is also includes an introduction of Coca-cola Pakistan Multan. We have concluded our report with our own personal suggestions and recommendations for the improvement of our selected brand, based on marketing knowledge.
  3. 3. Acknowledgment Before commencing this report on Total Quality Management we would like to thank Almighty ALLAH. We would also like to thank to acknowledge the contribution of some people without those help and assistance this report would not have been possible. We extend or heartiest gratitude to our course instructor, Ms Qurat-ul-ain whose able guidance and assistance showed us the right path to approach this report. Lastly, we would like to thank our parents and all our well-wishers, whose prayers made this report possible. Our Hard Work and Exposure based Efforts are dedicated to Our Respected Course Instructor and Our Beloved Parents.
  4. 4. Executive Summary This report has been written as a sequel to the series of lectures conducted on “Total Quality Management” during the MBA program. The subject assigned to the group was “Supplier Relationship”. The group made an earnest and whole hearted effort to collect the possible relevant material. Also visit were conducted to at an organization of Multan (Coca cola Beverage Factory, Vehari Road Multan), for obtaining all possible current information from the concerned. In the process, in addition to Teaching staff was interviewed for obtaining expert opinion on the Topic. The report has four major parts covering important aspects. In first Chapter introduction of the topic has been explained with special reference to its definition, objectives and factors. In second Chapter contains the literature review and Hypothesis or background assumption of Organization citizenship behavior. In Third Chapter describe the method, which sampling techniques and data collection instruments are used in it and also describe which test Formulas of hypothesis is used in it. In Fourth part contains the Analysis and complete discussion of the topic and also contains result and table.
  5. 5. TABLE OF CONTENTS Sr. # Contents: Chapter # 1 Introduction Introduction to Coca-cola Who is Supplier What is Supplier Partnership 10 Principles of customer and Supplier Chapter 2 Relationship Development Sourcing Supplier Selection Chapter 3 Methodology Production Process Questionnaire Chapter 4 Conclusion Chapter 5 Recommendation Chapter 6 Results / References
  6. 6. Chapter 1 Introduction Coca-Cola Corporation in Pakistan The Coca-Cola Corporation entered in Pakistan market in 1953 after purchasing local plant located in Karachi, Hyderabad, Gujranwala, and Sialkot. Now Company has 10 manufacturing plants in Pakistan. These are located in: 1. Karachi 2. Hyderabad 3. Lahore 4. Sialkot 5. Gujranwala 6. Multan 7. Faisal abad 8. Rawal pindi 9. Peshawar 10. Rahim Yar Khan The company has plants to purchase more plants in the country to get a good hold in the market and compete the rival Pepsi. Devaluation of Pak rupee also affects the industry because one of the ingredients „concentrate‟ is imported from outside the country. Coca-Cola Company in Multan. Coca-Cola was originated in Atlanta, Georgia. Dr. John Syth Permberton a pharmacist produced the syrup of Coca-Cola. He took the syrup to the Jacob‟s Pharmacy where it was placed on sale as Coca-Cola fountain drink for five cents of a glass. When carbonated water was teamed with the new syrup, refreshment history was made. Dr. Permberton‟s managing partner Frank M Robinson suggested the name Coca-Cola and prepared its logo. In 1888, Mr. Asa G. Candlor purchased all rights of the business. He paid $ 2300 for it. The business was incorporated as “ the Coca Cola Company” in 1882. In 1894, Joseph A. Biedelharn of Vicksberg, Mississippi became the first to bottle the Coca-Cola by installing bottle machinery in his candy store. 1
  7. 7. Coca-Cola was exported for the first time to Canada and Hawaii in 1897. In 1900 Coca-Cola was exported to Europe for the first time. In 1905 its trademark was registered in Canada. In 1970, Fanta and Sprite were introduced in Pakistan. The Coke Company entered into the entertainment business in 1982. In, 1984 Coke foundation was established to utilize resources to benefits society. Who is Supplier? In Total Quality Management Point of view? A party that supplies goods or services. a contractor or subcontractor, who A supplier commonly adds may be distinguished from specialized input to deliverables. Also called vendor. What is Supplier Partnership? In Total Quality Management point of view? in quality control, extended relationship between buyers and sellers based on confidence, credibility, and mutual benefit. The buyer, on its part, provides long-term contracts and assurance of only a small number of competing suppliers. In reciprocation, the seller implements customer's suggestions and commits to continuous improvement in quality of product and delivery. An Organization spends a substantial every sales dollar on the purchase of raw material components and services. In fact 60% of the cost of goods sold in 2000 sited of purchased goods. This is increase in 1970‟s.Therefore supplier quality can substantially affect the overall cost of a product. One of the keys to obtaining high quality products and services is for customer to work with suppliers in a patterning atmosphere to achieve the same quality level as attained within the organization. Customer and supplier as have the same goal to satisfy the end user to better the supplier quality. and they have the limited resources. 2
  8. 8. 10 principles of customer & supplier By DR. KAORU ISHIKAWA. 1. Control of quality. 2. Independent and respect-able 3. Clear and sufficient Requirements 4. Enter in No adversarial contract 5. Satisfaction 6. Method to evaluate the Quality 7. Amicable Settlement 8. Exchange Information and Ideas 9. Performing Business Activities LAST. Best interest of End user Mind 3
  9. 9. Chapter 2 Relationship Development Sourcing There are three types of sourcing 1. Sole 2. Multiple 3. Single  Sole source of supplier implies that the organization is forces to use only one supplier such as Patents, raw material location, only one organization producing items  Multiple Source is used of two or more suppliers for an item usually three suppliers are chosen, and their portion of the business is a function of their performance in term of price, quality and delivery.  It is also eliminate disruption of supply duet strikes and other problems  Single sourcing is a planned decision by the organization to select one supplier for an item when several sources are available. It results in large long term contracts and a partnering Relationship. Supplier Selection The supplier Selections Decision is based on 3 Basic Rules 1. How critical is the item to the design of the product or service? 2. Does the organization have the technical knowledge to produce the item internally? If not, should that knowledge be developed? 3. Are there suppliers who specialize in producing the item? If not, is the organizational willing to develop such a specialized supplier? Contribute to the establishment of the relationship. And some other topics like 4
  10. 10. Inception Training Team Approach Recognition Explanation. Inception Is that eliminate substantially reduce or automate the inspection activity. There are four phases of inception.  100% inception  Sampling  Audit  Identity check Training In small organization the senior‟s managers perform many different functions. Frequently no one has expertise in quality or the ability to train the work force. Therefore the customer must start the training process. Larger organization may invite the supplier to attend their courses or present the course may be a requirement for partnership. Training should be viewed as an investment, not an expense. Team Approach Supplier Teams are established in a number of areas such as product design process design and the quality system. It is a good idea to involve suppliers when the team is first assembled rather than at the end of its activities. Team meetings should occur at both parties‟ plants so they obtain a greater understanding of the processes. 5
  11. 11. Recognition/Rewards Creating Incentives for suppliers is one way to ensure that they remain committed to a quality improvement strategy. Incentives may be in the form of a preferred supplier category with its rewards. Usually the suppliers is interested in recognitions such as publications of outstanding contributions in the customer newsletters the letter can be posted on TQM bulletin board or a plaque that can be mounted in the Suppliers reception area. Multan Beverages Limited Multan Beverages was established in year 1964 on Vehari road as a franchised unit for CocaCola Company. It supplies soft drink facilities to the people of Multan, D.G. Khan, Vehari and Khanewal. Initially it produced Coca-Cola only and at that time its production capacity was 35 bottles per minute. In early 80‟s the plant was modified, thus increased its capacity up to 180 bottles per minute, then plant had the capacity to produce 320 bottles per minute and company also started production of Fanta and Sprite. It has engaged in a contract of producing Simba. In 1988, the liter bottle was introduced , which was greatly appreciated by the customers. Present Multan Beverages has modified their plant with double line process and is producing 2*320 bottles per minute, due to the crying need of the customers. Now, the factory produces 75% of Coke, 20 % Sprite ,4% Fanta while no return and liter bottle has only 1% share in the overall production. The factory has the empty bottle stock of 400,000 bottles. The Multan Beverages has installed a new flexible plant, producing all sizes. Bottle size of Coca-Cola Height 233.8mm major diameter 58.13 mm pinch diameter 51.3 mm weight 424grams Sugar level in the Beverage Coca Cola 10.37 Fanta 12.00 Sprite 10.00 6
  12. 12. Current Status of Coca Cola Now the company‟s products are sold through 3500 fountain wholesalers and distributors. Now the soft drink are asked for by name more than 524 million time a day, in more than 80 languages and in approximately 168 countries. The Coke company directly employees 17000 people and 15000 jobs have been created through wholesalers and distributors. It is the largest selling non-alcoholic drink in the world. Diet coke represents of 47 % of low choleric drink market. Today, the Coke Company operates through three business sectors.  North America soft drink business sector  International soft drink business sector  Food business sector More than 15000 bottling plants in Coke systems are with few exceptions owned and operated by independent business people native to countries in which they are located. The current report examines that the productivity of the coke can be imagined by the statement “Cans up to the moons” It means that if the cans of Coke are put on one another they will touch the moon. The independent bottles provide the required investment of land, building, machinery, and equipment. The company supplies not only the syrup or concentrate but also actively engages in management guidance to ensure the profitable growth of the bottles business. Some Basic Information about Coca Cola The nature of Soft Drink Soft drinks produced and marketed by the Coca-Cola Company are refreshing thirst quencher, which provides psychological and physiological satisfaction. Soft drink basically contains carbonated water, nutritive of intense sweeteners and flavors. Depending on the beverages some contain color acidulates and emulsifiers. 7
  13. 13. Nutrition Carbonated soft drinks can provide people with sum of the daily liquid, which is important to good health. Soft drinks, which use nutritive sweeteners, provide calories, which the body uses, for the energy. Health The Coca-Cola company safe guards at every stage of the manufacturing and bottling process to minimize the process of a product developing an off-taste or containing a foreign object, however should you encounter any problem with the beverage product it should not be consumed and if possible should be returned to the point of purchase. Quality The Coca-Cola Company ensures the quality of its product by continually analyzing the treated water, sugar and other ingredients to make certain that they are of highest quality. To ensure uniformity, the company maintains laboratories around the world to regularly examine the sample of beverages produced by individual bottling plants. Consumers perceive taste in very different ways. It is however possible for the same soft drink to vary slightly in taste due to such factors such as temperature at which it is consumed, the foods with which it is consumed or the conditions of storage of the product prior to consumption. All company bottling plants adhere to guidelines called good manufacturing practices (international Quality standards) which ensure the highest quality controls for sanitary conditions and plant and production cleanliness. Why formula of Coca Cola is kept secret Coca-Cola is a wholesome beverage and is in compliance with the pure food laws and practices of all the countries throughout the world where it is sold. The formula is kept because it is a valuable property right of the Coca-Cola Company. 8
  14. 14. Sugar level In general the amount of sugar in most soft drinks including Coca-Cola is between 8 % and 13% of the finished products. This is to the amount that is found in fruit juices. Current Consumption of Coca Cola Ranks Country Volume Consumed Share (%) (Millions) 1 USA 9466 34.8 2 Mexico 2129 7.8 3 Brazil 1665 6.7 4 Germany 1169 4.3 23 India 207 0.8 Carbonated Drink Industry in Pakistan The carbonated drinks are the ones, which are prepared using aerated, water (water charged with air or with carbon dioxide or other gas) as base. Besides the local brand names in the informal market, the major players are Coca-Cola, Pepsi Cola and 7 up, while the informal sector is said to be available mainly in villages and small towns. There are 35 plants of carbonated drinks in the formal sector which are located mainly in cities wh8ich produce an estimate 60 million crates of 24 bottles of 280 ml. Have carbonated drinks per annum. Coca-Cola and Pepsi Cola control the main market. Out of 35, 11 beverage plants are manufacturing Coca Cola, 7 R.C Cola, 2 plants making 7 up, 4 manufacturing a famous local brand drink Pak Cola, while one plant, locate in Hyderabad also new factory a local drink under a brand name Gold drink. 9
  15. 15. Chapter 3 Methodology In Methodology we will discuss the Production System of Coca-cola Multan And with some Questionnaires. Production process Process management is the selection of inputs, operations, workforce and methods for producing goods and services. Input selection includes choosing the mix of human skills, raw materials, outside services and equipment consistent with organization‟s positioning strategies and its ability to obtain these resources. Production process at Multan beverages could be divided into following heads. Purchase of Bottles Whenever there is need of new bottles, the company orders the contractors Glass Company to send new bottles. This step is basic in case of disposable (NR) bottles. Every time when production process starts there is a need to purchase new bottles. Collection of Bottles Ordinary bottles of Coca-Cola are collected from dealers and contractors in the factory area. Some bottles are not returned from dealers and customers which decreases the quality of empty bottles stock. Then there is need for purchasing of new bottles. In case of breakage it also need arises and order is sent to purchase new bottles of that much quality. Decaser These empty bottles are then sent to the washing department by the decaser. Washing of Bottles Washing department has an automatic plant. This plant automatically washes al the bottles. The process of washing is as follows. There are four tanks called soak washers through which the bottles have to pass. These soaks are filled by water with caustic soda and sodium gliucnate. 10
  16. 16. Inspection section (empty bottles) In the inspection station the light inspector having lights checks bottles. The light inspectors pick up unacceptable bottles.  First soak  In this soak, bottles are passed under the pressure of 40 to 50 C0.  Second soak  In this soak bottles are passed under the temperature of 55 to 60 C0. There are certain types of jets in this section, which rotate the bottles upwards to downward, hot water tank.  Third soak  In this soak temperature is between 65 to 75 C caustic wash is provided to the bottles.  Fourth Soak This is last water soak in the washing department. In this soak chlorine is mixed with water to purity the water. Water temperature is 45-55 C.. after this washing treatment washing process is completed and then bottles come out of this tank for further processing . Light room (empty bottles) In this section, again, the light inspectors pass bottles. if any bottle is reached unwashed then this bottle is again sent to the washing department for washing. Water treatment Water is obtained from the turbines of the company and then this water is treated according to the international drinking water standards. All the hardness of water is eliminated and the water is made pure for the use in the syrup manufacturing. Syrup manufacturing Water is mixed with the sugar and concentrate according to the fixed ratio of the formula for Coke. First, brix is manufactured according to the following ratio. Coca Cola 54.80 (concentrate . sugar ) Fanta 57.30 = Sprite 53.00 = 11
  17. 17. Then beverage is prepare according to Coca Cola 10.37 Fanta 12.00 Sprite 10.00 Then water and Co2 is added to the brix, which concentrate it Co beverage. Then beverage is passed through ammonia gas which cold the beverage. Filling of bottles The company has modern automatic filling machines where by bottles is automatically filled and then automatic machine puts crown corks or cap corks on the bottles. The capacity of this mach8ne is 7.5 cycles per minute and per cycle 40 bottles can be filled. Light room (Filled bottles) In this stage the quality of the filled bottles is checked. Any less filled or over filled bottle is filtered out in this stage. Loading After the inspection an automatic machine is used to print the certain things on the caps of the bottles, e.g. code number, line , expiry date etc. Packing The bottles are put into the crates. The standard of the crate is 24 bottles per crate. Packing of bottles is done manually by workers. Store room or Godowns Then bottles are sent to the storeroom or godown. Loading and delivery Loading and delivery is done according to the demand. Bottles are loaded by the fork differs into the trucking of the company and then sales department then is responsible for its distribution into the market. 12
  18. 18. Facility layout Layout planning involves decisions about the physical arrangement of economic activity centers within a facility. An economic activity center can be anything that consumes space, a person or a group of people, a machine, workstation and a department. In Multan beverage was installed then due to limited space the washer placed inside the production hall. Heat comes inside the production hall due to washer temperature. This washer should be outside the hall for the health of employees. The company realized this thing while installing the second unit. Now the washer of second unit is placed outside the hall. Other layout designing has been set according to the standards prescribed by the parent company. Capacity Capacity is the maximum rate of output for a facility. Capacity can be measured in terms of input and output. Capacity of Multan beverages in term of machine cycles. This machine is used to fill the bottles. Maximum or peak capacity of the system is 9 cycles per minute. In a cycle forty bottles can be filled so it means that capacity is 320 bottles per minutes. Currently company‟s utilization capacity is 6 cycles per minute, which is 240 bottles per minutes. Keep in mind that this is the peak season for the company. Utilization capacity of the company is the average utilization capacity in the high demand day company increases the cycle to 8 cycles per minutes. Company is planned to install third line in the year 2000. Company has two bottling plants in the facility, which can produce 720 bottles per minutes. Capacity Cushion Company has a capacity cushion of 3*2 cycles per minutes which is the cushion of 240 bottles per minutes. Quality management In a general sense, quality may be defined as meeting or exceeding the expectations of the customers. Company gives special type of consideration to the quality of raw material, work in process and finished goods. 13
  19. 19. Raw material Concentrate Multan beverages have to get the concentrate from Lahore, which is the Franchiser Company of Coca-Cola. This concentrate is a major component of the finished goods. The parent company is itself quality Consciousness Company so Multan beverage has never had any complaint about the concentrate quality. Sugar Sugar is purchased from different suppliers. When there is major or regular need then order is placed to the Ittefaq sugar mills or Sheikhupura Sugar Mills. Company has a minimum acceptable level as standard to check the quality. Company also receives the certificate of analysis from the supplier before delivery. Sugar is also tested in the lab of the company. Only the sugar of high quality is used in the manufacturing of the process. Water Very high standards are kept to process the water and then several checks are made whether the quality of water is up to the required standard or not. Following are the technical names of tests.  Upper lab test  Water softness test  Sound filter test  Carbon purifier test These tests assure that the quality of water used in the products is equal to the standards of mineral water. 14
  20. 20. Work in process Syrup treatment The syrup produced is treated about 9.2 F.H to make hygienic. This process makes the quality of product more reliable. Coke Company already has given the standards to check the syrup. Lab test When carbon dioxide and ammonia are added to the syrup then a lab test is made of the ingredients of the products. This test is most important test as it is the final test before the converted into the finished product. Finished good test Finished product is randomly selected and tested in the lab. This test also checks the ingredients and preservation status of the bottles. In the finished goods test two type of test are used to maintain the quality of finished products.  Gas volume  Sugar quantity These bottles are selected randomly after every half an hour and tested in the lab 15
  21. 21. Appendix Questionnaire Dear All, We are graduate student at Institute of Southern Punjab (ISP) preparing for a Master‟s degree in business administration. Would you please take a few minutes to participate in a research study? The purpose of the study is to examine the buffering effect of organizational politics in the relation between organizational commitments and Supplier relationship. I request you to be as truthful as possible to enhance the value of this study. The questionnaire does not require any name so you can be sure of complete confidentiality of your response. The data analysis of this study will also be performed on all the respondents and will thus, produce aggregate results. Thank you very much in advance for your time cooperation and participation. Yours Sincerely, 1. Ghulam Murtaza 3. Hasan Raza Malik 5. Ali Hayan 2. 4. Muhammad Tayab Ahmad Saad 16
  22. 22. Section 1: Please tick (  ) in the appropriate space for your response. 1. Gender ( ) Male ( ) Female 2. Age Group ( ) 20 years or below ( ) 21 - 25 years ( ) 26 - 30 years ( ) 31 - 35 years ( ) 36 - 40 years ( ) 41 - 50 years ( ) 51 – 60 years ( ) Above 60 year ( ) Ph.D. ( ) MS/ M.Phil/ Post Graduation ( ) ( ) Bachelor/Graduation 3. Qualifications Master 4. Country ( ) Pakistan ( ) Other 5. Status ( ) Student ( ) Employed ( ) Self-employed Circle your Answers: 17
  23. 23. QUESTIONAIRE This Questionnaire was filled by Mr. Blah blah Head of Supply chain Department 1. What do you mean by Supplier? (a) (b) (c) (d) Who have ability to buy a share? Who provide Raw material to Coca-cola? Is His/her a Company Retailer? A Person who tells his demand for his Shop? 2. What is meant by supplier Partnership? In Coca-cola Multinational company point of view? (a) (b) (c) (d) A partner who is Shareholder of a company? A partner who gives you raw material? A partner who take over a company? A partner who is a power of mutual holding company Authorities? 3. From when Coca-Cola adopt supplier partnership? (a) (b) (c) (d) 1884 To 1890s 1900 To 1950s 1960 To 1990s 2001 To 2010s 4. How Many employees worked in Supplier Partnership department in Multan (a) (b) (c) (d) 2-10 10-30 40-60 60-70 18
  24. 24. 5. What is the Qualification of Manger of Supplier partnership department? (a) (b) (c) (d) MBA with Major of Marketing BBA With Major of Marketing MBF MPhil In Business administration 6. What Type of sourcing coca-cola used? (a) (b) (c) (d) Sole Multiple Single None 7. For where you purchase the Sugar for making Formula? (a) (b) (c) (d) Rahem Yar Khan DG khan Lahore Shaikopura 8. From where you got Treated water? (a) (b) (c) (d) Self plants Pepsi Gourmet Nestle 9. Who is you Supplier of Such Ingredients? Like: Soda, Stabilan, Cloven , Soft water, carbon water, filter sheet, filter powder? (a) Itehad Chemicals (b) Sharjha Chemicals (c) Stira chemical (d) Luck Beverages 10.Who was Your bottle cup contractor for Regular Bottle? Or you import? (a) (b) (c) (d) BGL(BLOCHISTAN GLASS FACTORY PVT) Khan Traders Lucky Beverages Self made plant 11.Where is you ware houses? Are you borrowing it on rent or companies have its own in Multan? (a) Multan self own (b) Dg khan 19
  25. 25. (c) Rahem Yar khan (d) Lahore (e) Karachi 12. Are you transport you beverages to retailer on company truck or you transport trucks are on rent? (a) Company Truck facility (b) Other Transport facility (c) Retailer Receive its own behalf (d) Transport Trucks are on rent I and My Group Members are very thankful to you for your Time and effort 20
  26. 26. Chapter 4 Conclusion The coca cola company is well ahead of the game with their marketing effort and their relationship with their suppliers or retailers, which has allowed them to sustain profitability for over 100 years. This conviction that coca-cola company is the obsolete best beverage company communicated throughout the world. The company is not only making profit or Advertising but making a difference in every corner in the world in which they operate. The coca cola company going beyond simple market and reach into the hearts and lives of consumers. Our Focus Group Presentation gave us the inner view of consumer psychology Before doing this practice we expected some different behavior but result were surprisingly different. From Marketers point of view, after conducting this session we do not think the way normal consumer think, rather we know the inner secrets of Consumer buying and their supplies System. Our survey of coca-cola factory Multan gives the brief knowledge how they make formula, and where they purchase the commodities or raw material to making these formulas. Mr. blah blah tells us what he have experience or what they salary got, they tells the whole procedure of making the bottle. 21
  27. 27. Chapter 5 Recommendation o They Should Purchase their own transport for delivery. o They should import sugar from Thailand. o They have their own soda making and other plants like their own treated water or other plants. o They have their more ware house in Multan. o They must have increased his man power in Supply chain department. o They must deal with 2-4 suppliers who provide them material because they are stuck on one since past. 22
  28. 28. Chapter 6 Results/References Book: Total Quality Management by DALE H. BESTERFIELD Manager Supply Chain Department Multan Mr. blah blah (MBA WITH MAJOR OF MARKETING MANGMENT) ment+DALE+H.+BESTERFIELD&hl=en&sa=X&ei=EHjnUr7QKMvYygOv4G4Dg&ved=0 CC0Q6AEwAA#v=onepage&q=total%20qulaity%20mangment%20DALE%20H.%20BEST ERFIELD&f=false Multan 23