The document compares the supply chain designs of Coca Cola and Sony Ericsson. Coca Cola uses an economic model and relationship matrix to design its global supply chain. Sony Ericsson's design is based on principles of trust, information sharing, and continuous improvement. Both companies make strategic decisions in their supply chains, with Coca Cola using the HAPTIC model and Sony Ericsson using a six-step process. Customers play an important role in both supply chains by providing input for demand forecasting and requirements. Quality management is also crucial, with both companies evolving their roles to assure quality and delight customers.

1. SUPPLY CHAIN MANAGEMENT
Comparison between Coca Cola and Sony Ericsson

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Table of Contents
Introduction................................................................................................................................2
Supply Chain Designs................................................................................................................2
Decision- Making in Supply Chain............................................................................................3
Role of Customers in Supply Chain...........................................................................................5
Quality in Supply Chain Management.......................................................................................6
Conclusion .................................................................................................................................7
References..................................................................................................................................8

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Introduction
In the current era of globalization, main competition is not only amongst the businesses, but
also amongst the difference in supply chain. A supply chain is referred to as a network of
materials, services, information and organizations that have been experiencing
transformation, supply and demand (Malhotra 2006). Management of supply chain is referred
to as the management of information, physical and financial flows in each and every stage
related to the supply chain for provision of profit and customer value for each and every
member in the chain of supply. The practices and theories of supply chain management vary
from business to business and product to product.
By the application of relevant practices and principles of supply chain management, this
essay will be comparing two different systems of supply chain management in context with
the categories of two different products. The products that have been chosen for the purpose
of this essay are the mobile phones of Sony Ericsson and Coca Cola. The products of these
two companies have been chosen as both the organizations are known for its highly
successful and differentiated supply chain.
Supply Chain Designs
The main goal being focused upon by the supply chain of Coca Cola is to provide its tailored
services to each and every customer across the globe, irrespective of the demographic
boundaries. The organization is known for having common capabilities, processes, and
practices of supply chain management. The organization is known to be using the economic
model of supply chain (Liker 2008). This particular design or model helps in developing a
game- theoretic and economic framework to model the relationship between the supplier and
the buyer in the chain of supply.

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The organization of Coca Cola is known to be following the relationship matrix in the chain
of supply for supplying its products across the globe (Malhotra 2006). The relationship
matrix is used for the identification of conditions within which each and every category of
relationship is highly desired. These particular conditions seems to be ranging from low to
high specificity of process, and from low to high specificity of product. This helps in making
assumptions for the relative risks. For example, buyers make assumptions of risk if the
specificity of process is low and hence, assumption of risk can be made by the suppliers.
On the other hand, Sony Ericsson considers the design of supply chain as an important
element in the operational strategy of the company that is mainly and completely based on
the production system of Sony Ericsson. The key components that are involved in the design
of supply chain are trust and mutual understanding, control systems, interlocking structures,
sharing of information, compatible capability, learning and Kaizen, and joint improvement
activities (Liker 2008). This design is a systems that helps in organizing the decision rules
and information flows of resources that help the organization for realizing the benefits related
to the principles of this design. This helps the organization to be pro-active in the exposure of
problems, pull production on the basis of Kanban, waste being eliminated, total quality
management, continuously improving, improvement of machinery, and to focus on co-
operation.
Decision- Making in Supply Chain
Both the organizations, irrespective of the different types of products, have been highly
competitive and they are able to avail competitive advantages with the management of supply
chain. Both the organizations are known to be taking strategic decision in order to avail more
significance by the supply chain (Malhotra 2006). However, both the organizations do agree
to the fact that the process of decision making is extremely difficult in the chain of supply for

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the managers of both the companies who have been comprehending, when considering the
accountability of high degree of competition. Hence, both the organizations are known for
enlarging the scope of internal impacts.
The organization of Coca Cola has been using the HAPTIC model for taking decisions with
respect to supply chain. This particular model is a framework of decision based on trust that
helps an agent in predicting the actions of the partner in the present trade and using these
predictions for taking decisions if the partner should be trusted or not. The main insight in
this model is that it helps in separately modelling integrity and competence (Liker 2008).
Modelling of competence is done as the probability that a provided agent will be having the
ability of executing a specific action within a specific situation. Integrity is the attitude of
agents in order to honour the commitments, and is impacted by the perceiving of probability
related to the future interactions.
On the other hand, the organization of Sony Ericsson has been using the strategic model of
decision- making for supply chain. This particular model is used as a foundation for the
rational model of decision making (Lo 2005). This has been considered as most suitable in
order to structure the complex process of decision making. This helps the decision makers for
logically processing each and every information that requires consideration when the
strategic decisions are taking within the chain of supply. There is an involvement of six key
steps in this particular model. These steps are as follows (Liker 2008): 1) Defining the key
issues, 2) Identifying the concerned members of supply chain; 3) Identifying the criteria for
strategic decisions, 4) Development of alternatives, 5) Evaluation of alternatives, and 6)
Selection of the most appropriate alternative.

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Role of Customers in Supply Chain
The organization of Coca Cola is known to be having the design of supply chain that is
driven by the customers. This particular formula is followed in all of the places where the
products are supplied. The organization gives huge importance to the individual requirements
of the customers (Liker 2008). Coca Cola has been working with the customers for the
determination of each and every step regarding packaging, what equipment are supposed to
be used, and what requirements of service will be delivering the image of success related to
what is in mind of the client. This design of supply chain helps the organization for tailoring
the services the needs of the clients and the customers. It is all in the planning of supply and
demand and in the planning for the operations of sales.
The planning of supply is done by the forecasted input of customer demands, promoting or
changing the process to merchandize the stores and the seasonality as well. This is also in the
case of the organization of Sony Ericsson (Liker 2008). Management of supply chain is done
by the customers as well. Considering the service of customers, the shippers have been
showing willingness for the provision of entire system of packaging. In the current complex
and diversified environment of supply chain, the service of customers amongst the shippers
as well as the providers of logistics refers to not only just a friendly tone on the alignment
when something ends up going wrong (Malhotra 2006). This is more than the ability and
capability for tracking a shipment process or expediting the delivery. The shippers have been
expecting that their providers of logistics will be taking up the approach of cradle- to- grave
to the service of customer, provision of insight, guidance of strategies, and a broad range of
capabilities right from the initial stage to the final procedure in the chain of supply.

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Quality in Supply Chain Management
With an increase in awareness of the public, rapid coverage of global media related to higher
expectations of customer and the incidents have been forcing the manufacturers for taking a
fresh perspective at the approaches for the management of quality. The response of the
companies is extremely important in this context (Lo 2005). Since the past few decades,
being driven by the impacts of globalization, expanding the rights of the customers and the
higher expectations of customers, quality of service and products has been becoming
extremely relevant.
The supply chain management at Sony Ericsson has a direct impact on the quality of products
as well as the complete profitability of the organization. Due to these particular reasons, the
control of quality within the chain of supply is crucial for the maintenance of a competitive
edge within the place of market and reduction in the costs of operations. Without the control
of quality, waste seems to be becoming prevalent ahead of the tolerable value (Lo 2005). This
is considered as the traditional role related to the function of quality manager, but there are a
number of limitations in this context. The stage of empowerment has helped in proactive
utilization of the quality within the management of customers that is a significant feature with
respect to this particular role.
On the other hand, in consideration with the organization of Coca Cola, bad news related to
the defects in quality spreads at an extremely fast pace all across the globe, and the
immediate financial impacts and reputational impacts can end up being highly devastating.
As a server of soft drinks, the organization of Coca Cola has been into a number of
controversies with respect to the quality of their products (Liker 2008). This has resulted in
motivating to change the roles of quality management in the organization and the chain of
supply. Hence, in this context, there has been evolution of certain stages that include
assurance, empowerment, and customer delight. These particular stages have helped the

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organization to shape the services and the products for the customers and that have helped in
appealing the customers.
Conclusion
For driving continuous improvement, empowerment and accountability, more often, the
functional model of quality has been moving away to be a soiled and at times a centralized
organization to make a move for being decentralized in a significant manner. Out of all of the
functions, it is important to understand that both the organizations have been giving huge
importance to quality management (Liker 2008). Quality management in supply chain has
been playing a key role for playing within the interpretation and capture of customer
intelligence that not only includes the complaints, but also the more complex and richer data
that currently has availability by a number of different categories of digital sources or
channels. Hence, the supply chain management can be made effective by giving importance
to customers as well as quality.
However, there is no denial in the fact that all of these stages are being evolved by both the
organizations as the key goal is to focus on the management of quality (Malhotra 2006). The
assurance of quality tends to be focusing on the achievement of zero per cent defects and the
reduction of warranties along with the costs of complaint by enabling an enhancement of
processes with clarity in the responsibilities and the Key Performance Indicators.

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References
Liker, JK. 2008, “The Coca Cola Way and Supply Chain Management”, Presentation for
OESA Lean to Survive Program: The University of Michigan.
Lo, Y. 2005. “Effects of trust mechanisms on supply-chain performance: A multi-agent
simulation study,” Int. J. Electron. Commerce, 9(4), pp. 9-112.
Malhotra, A. 2006, “Operations Management: Processes and Value Chains,” Prentice Hall.