Report on Coca-Cola in Multan and Pakistan Brief history of Coca-Cola 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 Jacobs 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. Permbertons 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. 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. Karachi Beverages Limited. Initially it produced Coca-Cola only and at that time its production capacity was 35 bottles per minute. In early 80s 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 Karachi 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 Karachi 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 CURRENT STATUS OF COCA COLA Now the companys 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 colour acidultants and emulsifiers. 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.

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 (Millions) Share (%)

1 2 3 4 23

USA Mexico Brazil Germany India

9466 2129 1665 1169 207

34.8 7.8 6.7 4.3 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 which 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. COCA COLA 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. The price of a bottle of size 250 ml. Is Rs. 7 which is reduced from Rs.8 due to intense competition between Coca-Cola and Pepsi Cola. Devaluation of Pak rupee also effects the industry because one of the ingredients concentrate is imported from out side the country.

Operations Management by the Coca Cola Company LOCATION SELECTION Facility location is the process of determining a geographic site for a firms operations. Location selection depend on the factors which are Sensitive to location High impact on the companys ability to meet its goods. Location selection decision of Multan beverages was done in 1964 with the help of parent company. This selection seems to be dependent on following considerations. Southern Punjab

Southern Punjab is highly populated area of Pakistan. It possesses plenty of potential for consumer product companies. The corporate decision-makers also realized the fact and made the decision to start production in Multan. Multan Center of Southern Punjab Multan is the center of the Southern Punjab so is southern Punjab Multan was selected for facility locations.. Due to centralization proximity to customers on all these sales of Southern Punjab become easy. This factor also decreases high transportation expenses because Beverage Company like Coca-Cola could not afford to be at a long distance from the market. Cheap Labor In Southern Punjab, labor is cheaper than upper Punjab. This factor was also considered when locating the facility. Free of Cost Land Additionally company enjoyed land facility free of cost, which played a dominant role in the location selection with in the Multan City. 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 organizations posi tioning 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 andsodium gliucnate. 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 type 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 = 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.

Facility layout Layout planning involves decisions about the physical arrangement of economic activity centers within a facility. An economic activity center can be any thing 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 in side the production hall. Heat comes inside the production hall due to washer temperature. This washer should be out side 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 out side the hall. Other layout designing has been set according to the standards prescribed by the parent company. Capacity Capacity is the maximum rate of out put for a facility. Capacity can be measured in terms of input and output. Capacity in the 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 companys 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 cycle 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. 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 consciouses 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. Work in process Syrup treatment The syrup produced is treated at 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 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. These tests are following. X bar chart X-bar chart is used to check the gas volume and the sugar quantity in the filled bottles. These bottles are selected randomly after every half an hour and tested in the lab. The results of these tests are then drawn on the X-bar chart. Carbon dioxide gas volume

X bar +A2 * R bar X bar bar X bar A2 * R bar

Sugar

Upper Limit X bar bar Lower Limit

This X-bar chart tells that weather the standard of quality is maintained or not. If the test incharge sees teat there is a

trend or higher fluctuation in the observations then he tells to the concerned shift incharge to check the problem and find the solution. Mean of the x-bar chart, which is X double bar always, remains same and never change. This shows the consistent quality policy of the Gauge test company.

To check the under filled or over filled bottles, forty bottles are selected sequentially and then tested on a gauge scale. On this scale following limits are given. 1/8 0 1/8 1/4 0 line shows that bottle is up to the filled. lines are the maximum acceptable deviations. Any bottle away from these lines showing under or lower filled. These bottles are selected sequentially twice in a shift. Each and every bottle in a sample is tested so by doing this company can check that which filling pipe has a fault because there are forty filling pipes in a cycle of machine. After delivery test A test is conducted after delivery of the bottles to the dealers. A sample is selected from the market place and then tested. This test tells that whether bottles quality remains same with in the expiry date or not. Empty bottle check mark not over or under

The empty bottle department checks purchased empty bottles. During the test following thing are checked to maintain the standard size of bottle. Appraisal Internal failure External failure Multan Beverages company have not any external failure cost but they have internal failure cost associated with finished products inspection. When the bottles are under or over filled, higher or lower sugar quantity and higher or lower gas volume than standard then the internal failure cost incur. Company also has Appraisal cost which is related to detect the causes before the product is going to complete. Forecasting In this regard company do not have any formalized procedure, company uses a very simple procedure for forecasting. They look on the previous years sales for a certain period (usually for a month) and add or subtract any future projection made up by the judgement of executives. These executives made forecast which is then used as target for the managers. These managers have to fulfill the target with in the given date. Manager divide these target into parts and then supervisors who are working under managers has a target of one part Production planning On the basis of forecast of sales, the production department of the company makes production plan. Usually the difference between two is of the dates. As the production has to start before sales requirement. These plans may be daily, weekly, monthly or quarterly. For the season of summer company some times stores the bottles in advance to meet the high demand. This anticipating inventory is kept for few days. Production plan bridges the gap between high demand and low demand time period. In the Coca-Cola company production planning, although is informal but it very much effective as it is based on the experience of the executives.

Material requirement planning Multan beverages do material requirement planning informally. Material requirement planning of different type of materials has the following dimensions. Concentrate Company has to get concentrate from Lahore. Multan beverage has to inform Lahore office in advance, gross requirement of six month. Then company according to the need place order and gets concentrate. As concentrate takes two days to come, company places the order four or five days before the finish of concentrate. Company keeps safety stock of three days to avoid stock out. The quantity of the order and period between order is not fixed. Sugar

Its demand depends on the demands of bottles. Company gets the sugar from two sugar mills regularly. Company can get sugar from local market if the demand is increased uncertainly. Company has not any particular type of relationship with the suppliers. Company has to get sugar on cash basis. So on the basis of cash on hand company buys sugar. Company prepares a form in which all per unit requirement of all materials is written the company does not name (it). Company determines the requirement of raw material by multiplying the demand of finished product with the per unit requirement. Company keeps the stock of sugar. Sugar reaches in the factory in three days after placing the order. Company places the order before five days of reaching the inventory level to zero. Company keeps the safety stock of five days to avoid any stock out. Empty Bottles Requirement of empty bottles is determined by the formula Actual requirement - present stock + breakage = present requirement Empty bottles are come from Ravi glass factory. Company has a contract with the supplier. Standards and specifications are already given to supplier. Crowns and caps Crowns and caps are same as the requirement of finished products, but some stock of breakage or loss crowns and caps is there. Company brings the crowns and caps in heavy amount from the supplier. Carbon dioxide Company has per unit requirement of 3.8 pounds of Co2. So by multiplying the figure with the requirement with the finished goods company determines the amount needed. Company purchases Co2 from K.A gases, Pak gases, and Kaka khail gases Faisalabad. Company keeps safety stock and order is reached in three days after placing. Other locally available raw material The policy of the company about all locally available raw materials is same. That is procurement of raw material according to production plans and avoids any stock out. Safety stock The company does maintain the safety stock of all the raw material used, but does not have any dead line for the safety stock. The average safety stock of concentrate and sugar is as follows. Concentrate One week safety stock Sugar Five days safety stock Quantity discount consideration When Company has adequate funds available it enjoys attractive quantity discounts. But again there is no hard and fast rule regarding quantity discount. It depends highly on the financial status of the company at that time. Lead-time

Lead-time is the time between order reached and orders received. Lead-time for different raw materials in the Coca-Cola Company is as follows Concentrate Two days lead-time Sugar One day lead time Co2 Three day lead time Consideration for other locally available raw material is not trouble some as this material are commonly available in the market. Inventory management Effective and efficient inventory management system of manufacturing concern means satisfaction of customers, no back orders and better cash projections. All of these things lead to ultimate success and prosperity. The inventory system helps the management in the following ways. Current record of all sort of inventory is kept and can be inquired at any time. The recorder level can be checked at any time and order can be placed for new purchases of raw materials. Thus avoiding back orders and cancellation of orders. The projection can be made regarding the cash to be required for purchases and the required amount can be arranged to fulfill the cash requirements. By controlling the finished goods inventory the amount to be generated as revenue is calculated and amount of tax can be estimated. The order frequency and order size regarding different customers is calculated and it can be determined that which customers are more profitable for the business. The lead-time calculation can tell about efficiency of receiving cell and the supplier. The computerization has added to the efficiency and profitability of the business and provides a lot of benefits. Following effective reports are made for the effective management of inventory. Summary of empty issue / receipt It shows the overall incoming and out going details of empty bottles. This document involves the following. Date Vehicles Party name and code No. Of issued, filled or empties Parties sales vouchers It shows that all the particulars about the customer requiring the products. It involves the following. Serial number Date Parties names and codes Vehicle no. Driver names

Details of liquid filled in. Inward gate pass. (Empty) This is the permission to the customers of Multan beverages for delivering required products. It having the following details. Serial number Date Customer name and code Truck no. Driver name Particulars and details about products and quantity Rough unload report It is related with the return of the bottles, which shows the following. Gate pass no. Vehicle no. Total load Station Parties name and code Total sound bottles Breakage Brust Daily sales report This report show all the records of the customers individually and particulars about the products. It has the following details. Gate pass no. Parties name and codes Station Vehicle no Details about product and quantities Daily Godown report It shows the details of godown involving finished goods issued and empty bottles stocked as under. Opening balance Details of the received Details of sales Returns Closing balance Sales load and target reports This report shows the sales load and target achieved during the specific period of time. It has the details of targets of the supervisors, sales managers and marketing manager. It shows all the statistical calculations about load and target. Aggregate planning Aggregate planning is concerned with determination of the sizing and timing of production for the immediate future. Operation managers try to determine the best way to meet the forecasted demand by adjusting production rates, labor, land, inventory level, overtime work and other control able variables. There is no forma aggregate planning procedure but the executives at Multan beverages do aggregate planning informally. They foresee the high

demand in summer and produce extra to stock for summer. They also hire contractual daily wage employees for their organization, in the high demand days and fire them after the seasons. There is no change in the level of permanent employees with respect to season. There is no concept of under time in the company where as over time is usual thing among the employees. Company uses aggressive strategy for meeting the demand. Company gives incentives to the middleman and increases the demand. Company also requires efforts from sales force to increase the sales and meet the target of sales. Promotion The Multan beverages also use local area promotional tool and tactics. These tools include Point of purchase display Stickers and posters Public relation efforts and publicity Banners and hoarding Bill boards The parent company is responsible for the TV commercials only. The parent company distributes the cost of commercial on all the companies manufacturing Coca-Cola in Pakistan.