Coca-Cola Innovation Sparks Supply Chain Revolution
Although The Coca-Cola Company’s drink offerings grew from sparkling to sports drinks, waters, juices and more, the choices in its fountains were limited. With the need to offer a greater number of beverage choices from a fountain dispenser, Coca-Cola was challenged to reinvent the fountain business.
Engineers and scientists at Coca-Cola realized that micro-dosing technology (typically used to measure precise amounts of medication) might be able to dispense “recipes” of different beverages to increase the amount of choices in a single machine. Thus, Coca-Cola Freestyle was born.
“Coca-Cola Freestyle changes the fountain model from eight choices in a standard fountain to more than 100,” explains Richard Gross, Group director of Enterprise Business Solutions, Product Supply Systems, Coca-Cola Refreshments. “Coca-Cola Freestyle also provides valuable data collection to customers. On a daily basis, each dispenser can gather data related to machine performance, micro-dose cartridge usage and beverage consumption.”
While the technology for the dispensing machine is unique and ground-breaking, what is revealing is how the data is now being leveraged, particularly for rapid replenishment. Coca-Cola Freestyle fountains are connected to the Coca-Cola network and are constantly reporting sales data – by brand, location, and day part.
In the era of Big Data, the machine is also providing game-changing insights. “By innovatively using the data in our SAP Supply Network Collaboration (SNC) module we can react for the first time in a pure demand driven Supply Chain ecosystem to keep the brand cartridges in stock,” adds Gross.
In order to ensure replenishment occurs reliably and efficiently, The Coca-Cola Freestyle Replenishment System captures detailed data on every pour, plus data on the remaining quantities in each of the cartridges. Consumption data for each machine is received into SAP’s enhanced SNC module where it is consolidated by outlet and combined with past historical consumption history, future forecasted demand, and any promotional uplift forecasts for the specific time period to calculate a replenishment order.
The system also determines and plans shipments to outlets for full micro-dose cartridge case quantities, so in the event a full case cannot be built, the SNC module will forecast future demand and fill the case.
The enhanced SNC technology completes the Supply Chain ecosystem for Coca-Cola Freestyle. By dispenser, consumption data by micro-dosed component is automatically received and then utilized to drive automated order replenishment as well as production planning and scheduling of materials and logistics.
Beyond Basic Visibility
Coca-Cola Refreshments is working to complete a connected supply chain ecosystem for Coca-Cola Freestyle through automated rapid replenishment of the dispensers. By processing the data received each night, the company can calculate and create replenishment orders for any machine that requires it, then automatically process the orders and send them to the distribution center for shipping to the outlets.
“This ‘ideal’ Supply Chain ecosystem creates a win for our consumers, our customers and our company... This system will also help to facilitate the continued roll-out of Coca-Cola Freestyle in the years to come,” concludes Gross.
In 2009, the first Coca-Cola Freestyle dispensers were introduced providing more than 100 brands from a single machine.
Company at a Glance
The Coca-Cola Company markets and sells the drink concentrate to bottlers throughout the world and to Coca-Cola Refreshments. Coca-Cola Refreshments is the largest bottler in the world. In October 2010, The Coca-Cola Company purchased Coca-Cola Enterprises and formed Coca-Cola Refreshments.
Currently, there are more than 9,000 Coca-Cola Freestyle dispensers in use across the United States, with tests being conducted in Canada, Great Britain and Japan.
Words of Wisdom
“For innovation to succeed it takes vision to challenge an organization to do great things. It takes strong leadership to drive and support the innovation design and development process, and it takes a talented team of individuals that can execute and bring to the innovation to life.”
— Richard Gross, Group Director Product Supply Systems Process & Solutions, Coca-Cola Refreshments