Coca-Cola’s main IT firm responsible for managing its bottle manufacturing supply chain is using blockchain to make operations more efficient.
Coke One North America (CONA) is the tech firm that manages IT operations for Coca-Cola’s bottlers. The company said it is tapping into the blockchain solution developed by German software firm SAP to track and validate transactions that occur between 70 franchises.
Managing complex operations
Supply chain visibility is a major sticking point for businesses as well as modern consumers. For Coca-Cola, globalization and growing complexities in the marketplace have made it more difficult for the soda giant to get a handle of its supply chains. For this reason, the company tasked CONA with managing the franchises that manufacture, bottle and ship nearly 160,000 orders of Coca-Cola products daily.
Currently, CONA is overseeing 12 suppliers with hundreds of thousands in orders. But that set up has brought with it several challenges which CONA hopes to resolve using distributed ledger technology. In particular, the firm will be using blockchain to speed up the time it takes to process orders and ensure that organizations are paid promptly.
The ultimate goal is to increase efficiency, reduce costs, and accelerate cash flow in a supply chain worth $21 billion in yearly revenue. With SAP’s blockchain solution, CONA will be able to reduce the duration of order-reconciliation from 50 days to just a few days. It will also provide real-time insights into shipment information and the transactions made by all the different bottlers on the network.
Andrei Semenov, CONA senior manager said:
“There are a number of transactions that are cross-companies and multiparty that are inefficient. They go through intermediaries; they are very slow. And we felt that we could improve this and save some money.”
Two bottling franchises – Coca-Cola United and C.C Clark – were active in deploying the SAP blockchain solution. However, due to the success of these pilot programs, it has been expanding to all 70 franchises.
Coca-Cola blockchain to enhance supply chain transparency
Providing greater transparency in the supply chain is critical. CONA is hoping the platform can help streamline operations for all bottlers on the network. If a bottle maker is short of stock for a looming order, the network quickly provides options for filling the shortfall. Moreover, the system offers a transparent and more efficient mechanism for recording transactions and managing inventory. This translates into fewer shipping errors, less missed deadlines, and lower operational costs.
The head of SAP Innovation Center Network, Torsten Zube said that the success of the blockchain solution involves simplifying. By simplification, he means the flow of information across the supply chain.
“There’s usually not that dispute anymore because the information that has been shared, it’s clear and transparent everywhere,” he explained.
Leading as a Global Brand
Coca-Cola is one of the leading global brands that have taken a “wait-and-see” approach when it comes to integrating blockchain into supply chain management. Meanwhile, its main competitor—PepsiCo—was quick to jump into the blockchain bandwagon. PepsiCo announced in May 2019 that it had conducted a blockchain trial on the Zilliqa blockchain platform. In turn it brought a 28 percent boost in supply chain efficiency. The supply chain trial is known as “Project Proton”. It has a main goal to examine if blockchain could address “industry challenges” in digital ad buying and delivery.
With Coca-Cola now entering the blockchain space, more implementations are likely to continue. More companies seek to differentiate their products in ways that appeal most to consumers. Using blockchain can help these businesses re-invent their supply chain. Furthermore, it employs solutions that are cost-effective, fully transparent, and more reliable than existing solutions.