FOR THE PARTIAL FULFILLMENT OF PGDM-GEN.

(2010-2012)

SUBMITTED TO: PROF. S.K. DUBE (153) FACULTY (164) PRODUCTION & OPERATION (165) MANAGEMENT

SUBMITTED BY: SUDHAKAR KUMAR VIJAY KUMAR SHARMA VINEET KUMAR DUBEY

INSTITUTE OF MANAGEMENT STUDIES GHAZIABAD LALQUAN

INTRODUCTION
Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the worlds leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates and syrups to bottling and canning operators, distributors , fountain retailers and fountain wholesalers. Coca-Cola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 in Atlanta, Georgia when he concocted caramel-colored syrup in a three-legged brass kettle in his backyard. He first distributed the product by carrying it in a jug down the street to Jacobs Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed delicious and refreshing, a theme that continues to echo today wherever Coca-Cola is enjoyed. Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. The Companys beverage products comprises of bottled and canned soft drinks as well as concentrates syrups and not-ready-to-drink powder products. In addition to this, it also produces and markets sports drinks, tea and coffee. The Coca-Cola Company began building its global network in the 1920s. Now operating in more than 200 countries and producing nearly 400 brands, the Coca-Cola system has successfully applied a simple formula on a global scale. Provide a moment of refreshment for a small amount of money- a billion times a day.

The Coca-Cola Company and its network of bottlers comprise the most sophisticated and pervasive production and distribution system in the world. More than anything, that system is dedicated to people working long and hard to sell the products manufactured by the Company. This unique worldwide system has made The Coca-Cola Company the worlds premier soft-drink enterprise.

From Boston to Beijing, from Montreal to Moscow Coca-Cola, more than any other consumer product, has brought pleasure to thirsty consumers around the globe. For more than 115 years, Coca-Cola has created a special moment of pleasure for hundreds of millions of people every day. The Company aims at increasing shareowner value over time. It accomplishes this by working with its business partners to deliver satisfaction and value to consumers through a worldwide system of superior brands and services, thus increasing brand equity on a global basis. They aim at managing their business well with people who are strongly committed to the Company values and culture and providing an appropriately controlled environment, to meet business goals and objective. The associates of this Company jointly take responsibility to ensure compliance with the framework of policies and protect the Companys assets and resources whilst

limiting business risks. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today.

COCA COLA IN INDIA

Coca-Cola was the leading soft drink brand in India until 1977, when it left rather than reveal its formula to the Government and reduce its equity stake as required under the Foreign Regulation Act (FERA) which governed the operations of foreign companies in India. Coca-Cola reentered the Indian market on 26th October 1993 after a gap of 16 years, with its launch in Agra. An agreement with the Parle Group gave the Company instant ownership of the top soft drink brands of the nation. With access to 53 of Parles plants and a well set bottling network, an excellent base for rapid introduction of the Companys International brands was formed. The Coca-Cola Company acquired soft drink brands like Thumps Up, Goldspot, Limca, Maaza, which were floated by Parle, as these products had achieved a strong consumer base and formed a strong brand image in Indian market during the re-entry of Coca-Cola in 1993.Thus these products became a part of range of products of the Coca-Cola Company. In the new liberalized and deregulated environment in 1993, Coca-Cola made its reentry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca-Cola Company. However, this was based on numerous commitments and stipulations which the Company agreed to implement in due course. One such major commitment was that, the Hindustan Coca-Cola Holdings would divest 49% of its shareholding in favor of resident shareholders by June 2002. Coca-Cola is made up of 7000 local employees, 500 managers, over 60manufacturing locations, 27 Company Owned Bottling Operations (COBO),17 Franchisee Owned Bottling Operations (FOBO) and a network of 29 contract Packers that facilitate the manufacture process of a range of products for the company. It also has a supporting distribution network consisting of 700,000 retail outlets and 8000 distributors. Almost all goods and services required to cater to the Indian market are made locally, with help of technology and skills within the Company. The complexity of the Indian market is reflected in the distribution fleet which includes different modes of distribution, from 10-tonne trucks to open-bay

three wheelers that can navigate through narrow alleyways of Indian cities and trade marked tricycles and pushcarts. Think local, act local, is the mantra that Coca-Cola follows, with punch lines like Life ho to aisi for Urban India and Thanda Matlab Coca-Cola for Rural India. This resulted in a 37% growth rate in rural India visa-vie 24%growth seen in urban India. Between 2001 and 2003, the per capita consumption of cold drinks doubled due to the launch of the new packaging of 200 ml returnable glass bottles which were made available at a price ofRs.5 per bottle. This new market accounted for over 80% of Indias new Coca-Cola drinkers. At Coca-Cola, they have a long standing belief that everyone who touches their business should benefit, thereby inducing them to uphold these values, enabling the Company to achieve success, recognition and loyalty world wide. The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as consumers seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows.

OBJECTIVE
To study the coca cola bottling plant. To understand the coca cola bottling process. To know the different steps used in bottling process. To know what are the technologies used in the process & technological development. To understand the management of the bottling plant & the production unit. To know how the coca cola bottling unit works as per the demand of the market. To understand the management behind the relation between the different units under a bottling plant. To know how the different products produced under one bottling plant.

MANUFACTURING PROCESS IN COCA COLA BOTTLING PLANT

Coca-Cola are committed to manufacture the products with utmost care and with quality at top priority which makes it the world leader in the soft drink industry. Following is the overview of the stringent processes adopted in manufacturing before our quality product reaches finally to proud consumers.

WATER TREATMENT:
We at HCCBPL Varanasi follow a batch treatment which includes coagulation & flocculation. The method ensures disinfection and settling of all macro impurities and thereafter it pass tosand, carbon filters to remove off odour, off colour, off taste, and thus it is strictly bought inline with the WHO requirements. We are also using state of art micron filtration process where the water is filtered up to the extent of 1 micron before it is fed to the process. This extensive treatment of water under strict monitoring and sampling for quality leads to pure hygienic water with the highest quality meeting the Coca-Cola standards.

SYRUP PREPARATION:
Coca-Cola uses highest quality of sugar which is controlled and ensured by its stringent pre-laid standards, which serves as the strict criteria before acceptance of a lot. To ensure high quality of syrup, it is subjected to hot treatment wherein it is given a contact time with hyfloand carbon at elevated temperature. It is then passed through a filter press, which removes the carbon particles and other impurities before it declared fit for concentrate mixing. All this process takes place under the strict vigil by the quality department which maintains the appropriate records of the numerous tests carried out in the entire process which makes it a full proof process. In the ready syrup tank the pre-decided quantity of concentrate is mixed to the simple syrup in very strict hygienic condition to yield final syrup. The entire syrup manufacturing area is maintained under a constant positive pressure, which rules out the possibility of any external particles entering into the process room.

CONTAINER WASHING:
Container washing has been identified as one of the major critical control point in the entire manufacturing process & thats the reason that company has laid some of the very stringent and foolproof coca cola product to be of the highest quality and reflects our commitment towards delivering the best in class product to the consumers. The bottles received from the market are loaded on the conveyor by the uncasing machine and the arrays of the unwashed bottles passes through the four pre-wash inspections stations which ensures removal of rusty neck bottles, excessively dirty bottles, bottles carrying foreign matter, foreign bottles. And thus the good bottles pass into the bottle washing machine, which uses intensive mechanical and chemical processes to clean and disinfect the bottles thoroughly and ensures the bottles to be ready for filling. However as an additional safety, there is again a post wash inspection station comprising of 4 sub-stations, which ensures removal of the chip necked bottles and suspected bottles from the lot. Thus the bottles are subjected to series of stringent inspections before it is fed to the filler for filling.

MIXING, PROPORTIONING:
Proportioning is basically a process where ready syrup is diluted in a predetermined fixed proportion with water and carbonated concentrate in to beverage conforming strictly to companys norms and specifications. It is carried out by an Italian Machine-MOJONNIER.

FILLING & CROWNING:

The chilled carbonated beverage fed by the MOJONNIER is filled into the bottles through a rotator machine named FILLER. The bottles are immediately crowned by crowner (adjacent to the filler) and thereafter bottles passes through the date coding machine which enable the consumer to be 100 percent sure of consuming a perfectly safe and fresh product.

FINAL INSPECTION:
After date coding, there is once again a final inspection station where light inspectors all low or high filled bottles and permit only the saleable product to pass through for casing to the caser machine. MANAGING THE WASTE WATER: Production lines maintain the waste water from the bottle washers, Syrup and Filler rooms. Entire waste water generated is treated at Waste Water Treatment Plant and discharged through a 800 meters long pipeline specially laid to discharge the treated waste water away from inhabited areas. Part of this water is being used for gardening purpose within the plant premises.

STEPS OF COCA COLA BOTTLING

At The Coca-Cola Company, through our globally accepted and validated manufacturing processes and Quality Management Systems, we ensure that our manufacturing facilities are equipped to provide the consumer with the highest possible quality beverage each time. Let us now take you through the processes and Quality Assurance Programs followed by our world-class manufacturing facilities in India. Even before the plant is constructed, the site is selected based on the availability of source water meeting the portability quality standards. At all our carbonated and non-carbonated soft drink manufacturing locations, the source water is tested for all requirements of potable drinking water. The analysis is always conducted by independent third party accredited laboratories. The source water is then properly protected and re-tested periodically to ensure conformance to portability standards.

The water is then drawn through sealed pipelines into the storage tanks in secured water treatment areas of the manufacturing plant. 1. The first step in the manufacturing of soft drinks is the disinfections of water using the globally approved procedure of chlorination. This treatment ensures the destruction of microorganisms including pathogens and oxidation of heavy metal ions and organic impurities. 2. The second step is the filtration at the molecular level, which is achieved either by coagulation/flocculation or reverse osmosis. Contaminants commonly removed by this process include: Dirt, clay and any other suspended matter in the water. Microbial matter (including bacteria, yeast, moulds, virus, protozoa). Heavy metals and compounds which may cause an off-taste.

When coagulation/flocculation is used, colloidal materials and suspended particles are removed by settling plus enhanced filtration through multi-media. If needed, alkalinity reduction may also be achieved by lime softening or ion exchange filters. 3. The third step to stop potential contaminants is water purification using granular activated carbon filters. The granular activated carbon, with its large and porous surface area, ensures effective removal of trace levels of organic compounds (including pesticides and herbicides), colour, off-taste and odour-causing compounds using the principle of absorption. 4. The last step is polishing filtration, which is passing water through high efficiency 5-micron filters to ensure every drop of treated water is free from any activated carbon fines and is safe for use in beverages. Similar to the stringent norms used for water, we buy high-grade sugar from authorized sugar mills in India and this is treated with a globally acclaimed carbon treatment which removes any impurities and is then used for the preparation of purified sugar syrup. This sugar syrup is then blended with the soft drink concentrate. Carbon-dioxide from authorized suppliers meeting international purity standards is procured, which goes through stringent quality control checks before being used in the beverage process. The three ingredients of syrup, treated water and carbon-dioxide are blended as per The Coca-Cola Company's specifications.

An employee operates a proportioner, where the syrup, carbon-dioxide and water are blended.

The glass bottles returned from the market are thoroughly cleaned and sanitized with specially formulated cleaning agents at high temperature that use sophisticated state-of-the-art Bottle Washers or Bottle Rinsers (incase of PET). These bottles are then transported to the filler using a fully automated conveyor system after a thorough visual inspection. The beverage is then filled into glass containers or virgin food grade PET bottles using a high-speed automated filling machine. The entire filling operation is fully automated and untouched by human hands. The bottles are finally capped/crowned, date coded and packed into crates/cartons to make them available to our consumers. The complete manufacturing process has a well defined and structured Quality Control and Assurance Program. All the manufacturing facilities employ qualified, experienced and trained professionals for manufacturing and testing of our products.

Analysts examine water samples using a UV spectrophotometer.

All the bottling facilities follow the Good Manufacturing Practices requirements as applicable to the food industry. All manufacturing equipments fulfills the stringent requirements of GMP and sanitary design. The entire quality management system of each plant is documented, managed and continually improved through a world-wide accepted system of TCCQS (The CocaCola Quality System). The Company also has a strong internal audit system to monitor compliance to international and local standards. The manufacturing facilities also get audited by accredited external audit agencies against quality management standards. This internal checks and balances system works virtually in every aspect of our business and gives us the confidence to reassure our promise to consumers every day. At The Coca-Cola Company, we are committed to delivering high quality products to our customers and consumers throughout the globe. Each and every time.

DISTRIBUTION NETWORK
HCCBPL has a wide and well managed network of salesmen appointed for taking up the responsibility of distribution of products to diverse parts of the cities. The distribution channels are constructed in such a way that the demand of customers is fulfilled at the right place and the right time when it is needed by them.

A typical distribution chain at HCCBPL would be: Production--- Plant Warehouse--- Depot Warehouse--- Distribution Warehouse--- Retail Stock--- Retail Shelf--- Consumer The customers of the Company are divided into different categories and different routes, and every salesman is assigned to one particular route,which is to be followed by him on a daily basis. A detailed and well organized distribution system contributes to the efficiency of the salesmen. It also leads to low costs, higher sales and higher efficiency thereby leading to higher profits to the firm.

DISTRIBUTION ROUTES
The various routes formulated by HCCBPL for distribution of products are as follows: Key Accounts: The customers in this category collectively

contribute a large chunk of the total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month. Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc. Future Consumption: This route consists of outlets of Coca-Cola products, wherein a considerable amount of stock is kept in order to use for future consumption. The stock does not exhaust within a day or two, instead as and when required stocks are stacked up by them so as to avoid shortage or non-availability of the product. Examples: Departmental stores, Super markets etc. Immediate Consumption: The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace. Examples: Small sized bars and restaurants, educational institutions etc.

General: Under this route, all the outlets that come in a particular area or an area along with its neighboring areas are catered to. The consumption period is not taken into consideration in this particular route.

DISTRIBUTION SYSTEM
Direct distribution: In direct distribution, the bottling unit or the bottler partner has direct control over the activities of sales, delivery, and merchandising and local account management at the store level. Indirect distribution: In indirect distribution, an organization which is not part of the Coca-Cola system has control on one or more of the distribution elements (Sales, delivery, merchandising and local account management) Merchandising: Merchandising means communication with the consumer at the point of purchase to convey product benefit, value and Quality.Sales people and delivery personnel both have this responsibility. In certain

locations special teams who go into business locations to specifically merchandise our products.

DEPARTMENTS INVOLVED IN THE DISTRIBUTION PROCESS

The Distribution process mainly consists of three departments: Distribution Department: It appoints distributors and establishes a distribution network, processes approved sale orders and prepares invoices, arranges logistics and ship products, co-ordinates with distributors for collections and monitors distribution stocks and their set-up. Finance Department: It checks credit limits and approves sales orders in compliance with the credit policy followed by the firm, records collections from distributors, periodically reconciles outstanding balances from distributors, obtains balance confirmation from distributors and follows up outstanding balances. Shipping or Warehousing Department: It dispatches goods as

per approved by order, ensures that stocks are dispatched on a FIFO basis, ensures physical control over load out area and updates warehouse stock records in a timely manner.

SWOT ANALYSIS

STRENGTHS
DISTRIBUTION NETWORK: The Company has a strong and reliable distribution network. The network is formed on the basis of the time of consumption and the amount of sales yielded by a particular customer in one transaction. It has a distribution network consisting of a number of efficient salesmen, 700,000 retail outlets and 8000distributors. The distribution fleet includes different modes of distribution, from 10-tonne trucks to open-bay three wheelers that can navigate through narrow alleyways of Indian cities and trademarked tricycles and pushcarts. STRONG BRANDS: The products produced and marketed by the Company have a strong brand image. People all around the world recognize the brands marketed by the Company. Strong brand names like Sprite, Fanta, Limca,

Thums Up and Maaza add up to the brand name of the Coca-Cola Company as a whole. The red and white Coca-Cola is one of the very few things that are recognized by people allover the world. Coca-Cola has been named the world's top brand for a fourth consecutive year in a survey by consultancy Inter brand. It was estimated that the Coca-Cola brand was worth $70.45billion. LOW COST OF OPERATIONS: The production, marketing and distribution systems are very efficient due to forward planning and maintenance of consistency of operations which minimizes wastage of both time and resources leads to lowering of costs.

WEAKNESSES
LOW EXPORT LEVELS: The brands produced by the company are brands produced world wide thereby making the export levels very low. In India, there exists a major controversy concerning pesticides and other harmful chemicals in bottled products including Coca-Cola .In 2003, the Centre for Science and Environment (CSE), a non-governmental organization in New Delhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants PepsiCo and Coca-Cola, contained toxins including lindane, DDT, malathion and chlorpyrifos- pesticides that can contribute to cancer and a breakdown of the immune system.Therefore, people abroad, are apprehensive about Coca-Cola products from India. SMALL SCALE SECTOR RESERVATIONS LIMIT ABILITY TO INVEST AND ACHIEVE ECONOMIES OF SCALE: The Companys operations are carried out on a small scale and due to Government restrictions and red-tapism, the Company finds it very difficult to invest in technological advancements and achieve economies of scale.

OPPORTUNITIES
LARGE DOMESTIC MARKETS: The domestic market for the products of the Company is very high as compared to any other soft drink manufacturer. Coca-Cola India claims a 58 per cent share of the soft drinks market; this includes a 42 per cent share of the cola market. Other products account for 16 per cent market share, chiefly led by Limca. The company appointed 50,000 new outlets in the first two months of this year, as part of its plans to cover one lakh outlets

for the coming summer season and this also covered 3,500 new villages. In Bangalore, Coca-Cola amounts for 74% of the beverage market. EXPORT POTENTIAL: The Company can come up with new products which are not manufactured abroad, like Maaza etc and export them to foreign nations. It can come up with strategies to eliminate apprehension from the minds of the people towards the Coke products produced in India so that there will be a considerable amount of exports and it is yet another opportunity to broaden future prospects and cater to the global markets rather than just domestic market. HIGHER INCOME AMONG PEOPLE: Development of India as a whole has lead to an increase in the per capita income there by causing an increase in disposable income. Unlike olden times, people now have the power of buying goods of their choice without having to worry much about the flow of their income. The beverage industry can take advantage of such a situation and enhance their sales.

THREATS
IMPORTS: As India is developing at a fast pace, the per capita income has increased over the years and a majority of the people are educated, the export levels have gone high. People understand trade to a large extent and the demand for foreign goods has increased over the years. If consumers shift onto imported beverages rather than have beverages manufactured within the country, it could pose a threat to the Indian beverage industry as a whole in turn affecting the sales of the Company. TAX AND REGULATORY SECTOR: The tax system in India is accompanied by a variety of regulations at each stage on the consequence from production to consumption. When a license is issued, the production capacity is mentioned on the license and every time the production capacity needs to be increased, the license poses a problem. Renewing or updating a license every now and then is difficult. Therefore, this can limit the growth of the Company and pose problems. SLOWDOWN IN RURAL DEMAND: The rural market may be alluring but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence

on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media. All these problems might lead to a slowdown in the demand for the companys products.

Observations and Conclusion

The Coca-Cola Company has one global standard. Coca-Cola India follows the same international quality standard across all the bottling operations within India. Every ingredient use in the manufacturing of beverages meets all the local regulatory, Company and International standards. All ingredients undergoes extensive testing and inspection prior of being released for use. On periodic bases external validation and testing is performed by independent and accredited laboratory in all our ingredients used in the manufacture of beverages. Coca-Cola India procures the ingredients from pre-selected lots approved from authorized suppliers. The Coca-Cola Company has only one quality system around the world.

REFERENCES :
www.coca-colaindia.com http://www.coca-colaamatil.co.id/ina/ourbusiness/index.php?act=manufacturing http://www.coca-colaindia.com/quality/quality_commitment_sboq.aspx http://www.docstoc.com/docs/19407667/introduction-to-coca-cola http://www.scribd.com/doc/4075259/Coca-Cola-Report www.thecoca-colacompany.com en.wikipedia.org/wiki/Coca-Cola