Introduction
Demand forecasting refers to the act of planning or estimating demand to guarantee the provision of correct items and in the right quantities to fulfill customer demand without surplus production (Datta, 2017). The term global distribution means worldwide networking and outsourcing of businesses (Unilever, 2020). Worldwide supply chain management is the efficient distribution of products and services throughout the global network to minimize waste and maximize revenues while offering the best possible service to consumers.
It is critical for businesses to overcome difficulties posed by global distribution to compete effectively on a worldwide scale. The above has raised questions about how some companies have utilized their economic gain in supply chain practices to contest successfully on a wide level (Rojo-Gallego-Burin et al., 2020). The markets are currently under intense competition, forcing businesses to explore tactics and strategies to improve their global supply chain procedures. Thus, managing global distribution is critical for businesses to remain viable in an extremely competitive market.
Producing high-quality goods is no longer enough to improve sales volume in today’s market. The organization must have an active sales staff that guarantees commodities are supplied to the appropriate market at the appropriate time, relevant clients, and acceptable prices. As a result, a firm should focus on the need for effective sales procedures in modern-day corporate operations (Dellana & Kros, 2018). This case study will evaluate Nestle, Unilever, and Coca-Cola’s goods, sales forecasts, and processes. It will focus on the forecasting methodologies and global distribution employed by these businesses to anticipate sales quantities. These firms’ primary goal is to ensure that technology improves the organizations’ sales effectiveness (Njuguna & Ngugi, 2020). The three multinational firms chosen are the food and manufacturing industries. Due to this, the analysis will present managerial implications for the three firms.
Supply Chain Practices
Supply Chain Management (SCM) is the comprehensive information, financial muscle, activities, and knowledge proficiencies that are directly associated with the transformation and movement of goods and services from their initial raw materials to their final product. The goods are then delivered to intended consumers by suppliers, eventually meeting or exceeding consumer (market) needs (Dellana & Kros, 2018). Several studies have been undertaken, finding various supply chain techniques in various domains. Furthermore, experiments have been conducted to evaluate and assess manager reactions and access management tools regarding the link between organizational performance and supply chain management (Rojo-Gallego-Burin et al., 2020). Among the elements involved are training, supplier quality control, management direction, product development, participation of suppliers, employee interactions, choosing a supplier, customer interaction, process administration, benchmarking, and accurate data reporting.
Introducing the study of a company’s strengths, weaknesses, opportunities, and threats (SWOT). It is a useful technique for supervisors and other company partners to appreciate the characteristics and flaws of a business venture while determining the opportunities and dangers that the venture will most likely face (Rojo-Gallego-Burin et al., 2020). A SWOT analysis can be carried out for a person, a company venture, an industry, or a location, depending on the type of business and the data clients’ requirements.
The major goal of doing a business SWOT analysis is to assist management in developing a good business strategy by ensuring that all of the company’s strengths and weaknesses are taken into account. Openings that are interested in the business, as well as the risks that it faces in the business, should be addressed. The Coca-Cola Company Limited’s strengths and weaknesses in the beverage business will be revealed through a SWOT analysis, as well as the opportunities for the company to improve and the risks it confronts while running its operations (Rojo-Gallego-Burin et al., 2020). The SWOT analysis is used by Coca-Cola’s top management team and the full administration to position the company’s products, design change procedures, and evaluate open doors.
Coca-Cola Company
Company Overview
The Coca-Cola Company is the world’s leading beverage producer, producing a wide range of beverages subsequently marketed internationally. For example, some of its products include Sprite, water, Fanta, and Coca-Cola soft drinks. The company’s success may be ascribed largely to coca-(drink) cola’s aggressive marketing techniques, which have positioned the drink as enjoyable (Datta, 2017). The company’s supply chain is one of the most extensive and smooth operations. For 70 years, the Coca-Cola drink was the only product offered by the corporation. However, in 1995, the company began growing and broadening its product line, which resulted in the inclusion of beverage options of various sizes (Dellana & Kros, 2018). The firm presently offers over 500 sparkling and still goods and about 3900 beverage options ranging from effervescent (Dellana & Kros, 2018). Additionally, the company sells ready-to-drink coffee and tea.
Demand Forecasting and Supply Chain Planning of Coca-Cola Company
Demand forecasting serves as the foundation for sales and supply chain planning. As a result, Coca-Cola bases the scheduling of its numerous promotions on the demand prediction for the next quarter. The sales force’s promotion decisions are then included in a revised demand estimate, which is critical in capacity and production decisions (Datta, 2017). The revised prediction based on the campaign is then communicated with the bottlers to guarantee that there is enough supply to meet the demand created by the offer.
Future sales may be forecasted using several techniques, such as long-term or current-year sales forecasts based on an organization’s business cycles. During the forecasting process, assumptions are formed based on management’s experience, judgment, and talents. Coca-Cola projections are made using a variety of methodologies, including regression analysis, the Delphi methodology, and the Box Jenkins models. Coca-Cola incorporates demand, supply, and execution planning into collaborative scenarios using forecasting technology. The Coca-Cola Company estimated in 2016 that its sales would increase by an average of 6% every year (Datta, 2017). The term enhanced product refers to additional consumer advantages and services offered to customers.
As soft drinks are consumable, the increased amount is strictly regulated. On the other hand, Coca-Cola has a customer care line and a complaint phone line for customers who are unhappy with the product or want to express feedback (Akhavan & Beckmann, 2017). As a result, the fundamental strategic goal, vision, and objectives of the Coca-Cola Company are to refresh the world, create moments of optimism and pleasure, develop value and make a difference in people’s lives, be known as a premium beverage brand, and anticipate and satisfy customers’ wants. The Coca-Cola plan is controlled by the company’s working requirement’s administrative structure, which enables the company to respond to changing business conditions while managing the company’s planned development paths, with the express objective of maintaining such boldness and unwavering quality.
Global Distribution of Coca-Cola Company
Coca-Cola is the world’s most popular consumer brand, and this firm has a global presence in over 200 countries. The firm works in the worldwide beverage sector, producing, retailing, and marketing non-alcoholic and alcoholic syrups. The company’s success in the global market may be linked to its fusion of global standards and localization strategies (Ramdiwakar, 2019). Coca-Cola has integrated global standards into its worldwide strategy. Branding and advertising are two areas where standardization is employed extensively. For example, the corporation has created worldwide marketing efforts in which the same message is shared across many countries. The corporation has kept its classic packaging and labeling in terms of branding.
Wendy Manning (Customer Logistics) of Coca-Cola once asserted that the business could easily transport beverages from the plant to local outlets in 48 hours. Because most of the beverages are made in the nation where they are sold, local sourcing has had a huge impact on their success (Ramdiwakar, 2019). Furthermore, the corporation has over 900 bottling and manufacturing facilities worldwide, with factories boasting the quickest production lines.
Other factors contributing to Coca-Cola’s supply chain success include innovation, people, supplier relationship management program, long-term connections with retail partners, quality control, global supply chain council, and collaboration with bottlers (Bastas & Liyanage, 2018). Coca-Cola drinks pass through the following stages in the supply chain: the producer, the company that distributes them, the shopkeeper, and the customer. As a result, their items are easily identified in the worldwide market. The company’s worldwide marketing approach focuses on lifestyle, emotions, and brand association. Their products are touted as something that brings together family and friends. The message is tailored to the culture and requirements of people in various markets. As an international business strategy, localization entails adapting to the target market’s language and culture (Dellana & Kros, 2018). The culture of target markets varies depending on nationality and ethnicity.
For example, by employing the local language, the corporation boosts the acceptance of its worldwide brand. Thus, the firm has spent a significant amount of money and effort to adapt its brand and guarantee that its goods are congruent with the tastes and demands of local consumers (Dellana & Kros, 2018). As a result, localization has bolstered the company’s position in both the domestic and foreign markets. Furthermore, including the people’s culture fosters a sense of ownership and loyalty, which increases sales.
Recommendation
Coca-Cola should attempt to build complicated sales and distribution systems that include resource management, delivery orders, order status, customer identification, a digital map for monitoring shipments, and order processing. Salespeople will be aided in determining and designing the most effective distribution strategy with such skills (Landy et al., 2017). The sales management marketing and distribution system should have real-time updating functionalities to maintain sales force control and client engagement.
Nestle Company
Company Overview
In the seventeenth century, the company was founded as a countrywide Swiss Nestle Company. Initially, the organization exclusively distributed its foodstuffs only through sales agents and nations outside of its market are allowed. Furthermore, Nestle firm has gone through various modifications and alterations. Since its current state, the organization has transformed into a wholly different company that has changed through time to adapt to new circumstances. Nestle began to shift its business strategy in the 1900s, shifting from an emphasis on worldwide expansion to buying local enterprises in foreign areas (Landy et al., 2017). Nestle reacted to an upsurge in demand for dairy products in the United States some years later during World War I.
Nestle is a prominent food manufacturing company in the globe, with its goods marketed in over 100 countries. The firm expanded rapidly during the twentieth century, expanding into new countries and diversifying its goods, particularly following a merger with the Swiss General Chocolate Company (Landy et al., 2017). The company’s goods include Nescafe, Nido, kit kat, Buitoni spaghetti, perrier sparkling water, and Milo, and it has expanded into medicines (Akhtar et al., 2017). Despite experiencing tumultuous economic conditions over the years, the corporation has cut across several groups to capitalize on worldwide market leadership through initiatives such as Global Business Excellence (GLOBE). The company has standardized and streamlined its business operations.
Its success may be credited largely to its dynamic business tactics, which have included and integrated product renovation and innovation. This includes adopting essential values such as cultural diversity, brand strength, customer value creation priorities, consumer contentment, high-performance goals, and high-quality goods. As a result of incorporating the components mentioned above into its dynamic global economic climate sensitivity, Nestle has gained a competitive edge over its competitors (Lima-Junior & Carpinetti, 2017). It is vital to emphasize that it recognizes the significance of supply chain management.
Nestlé’s operation management success has been strongly affected by the innovation and renovation of product conceptions, wherein new goods and ideas are developed concurrently in a perpetual cycle to meet the needs of market dynamics. Furthermore, innovation and renovation have strengthened and enhanced the current product portfolio to meet target market demands, causing the conglomerate firm to become more receptive to technical, opportunity trends, and market behavior dynamics. Pragmatic and dogmatic methods, as well as adopting global market tactics, have been used.
Demand Forecasting and Supply Chain Planning of Nestle Company
Nestle is one company that utilizes forecasting to estimate future demand, namely demand-driven forecasting. Demand-driven forecasting examines past promotions and uses that information to anticipate future promotions. Charles Chase is a chief Industry Consultant who pioneered technology that, instead of trend and seasonality, detects demand signals, automatically notifying a company about which demand signals are genuinely influencing consumers’ purchases of things up and down a hierarchy (Luthra & Mangla, 2018). It constantly watches advertising and pricing and can use that information to predict the impact of future promotions. What if another sales offer is added in August and advertising is increased by 10% for the year, and how will this impact demand in the future?
Nestle was able to recognize demand signals in a variety of areas, including sales and in-store merchandising, because of the techniques that Charles Chase, the chief industry consultant, taught them. This quantitative research aided them in forecasting future demand (Rojo-Gallego-Burin et al., 2020). They measured these outcomes and could use the “what-if” scenario of repeating the process in the future. Nestle noticed that their previous method of predicting, which was to use excel spreadsheets and then pass them over to people for analysis, was biased due to the humans.
Nestle supply chain specialists play a critical role in ensuring the quality of commodities delivered to its clients and consumers. Nestle collaborates with business organizations to boost the interest figure and their suppliers all over the world to ensure properly sourced resources (Makris et al. 2019). Nestle balances stock levels following activities to put up the appropriate stockpile of their goods. Once delivered, the inventory network is responsible for safely storing and distributing the things to handle their client’s and customers’ concerns completely and on time. Nestle is an adaptable, agile organization focused on delivering outcomes, both inside the production network and on the side of general business demands.
Production network specialists may advance their careers at Nestlé in various ways. They will help Nestle achieve the right edge by bringing them closer to Nettle’s clients and ensuring our things are available at the best time in the best shape. The above is regardless as to whether they work with Nestle in demand and supply planning, procurement, physical coordination, or customer administration (Makris et al., 2019). Thus, people may change roles and industries at Nestlé since there are so many options, even worldwide.
Global Distribution of Nestle Company
The corporation adopts a supply chain management idea by outsourcing some activities and ensuring the supply chain procedures function smoothly with its workforce of over 280,000 people. Customer satisfaction is critical to the company’s performance in supply management and is its major platform where profitability and competitive advantage can be credited (Bastas & Liyanage, 2018). Furthermore, all of the operations involved, from obtaining raw materials to delivering final products, are time-consuming. Therefore, it is critical to have timely and precise deliveries. Nestle must maintain a cohesive supply chain to guarantee that product standards and quality are maintained.
Nestle has developed operational standards and standardized systems to avoid management control difficulties. Supply chain management (SCM) is critical for ensuring product quality. Furthermore, the corporation has accepted responsibility for its SCM to defend its reputation. Notably, regardless of the source, people frequently evaluate the goods’ quality on the product’s corporate logo. In acknowledgment of the necessity of SCM, Nestle USA engaged Red Prairie, whereas Chile (South Africa) contracted Ryder System Inc. for product distribution and transportation management. Such operations have ensured that there are no delays, that the product is of high quality, and that there are no delays (Snyder et al., 2019). Nestle has taken significant strides to capitalize on the advantage, which has been made even simpler by the rise of e-marketplaces.
Recommendations
An efficient supply chain is critical for success today and Nestle has integrated it into its operational management and other business efforts (Mees-Buss et al., 2019). The company’s propensity to emphasize consumer requirements has a significant impact. However, there is a need to improve on innovations so as to fit in the market trends. More research and development must be done by the company, and it must be included in its operations management. It is critical to incorporate them into the company’s present operation management to earn maximum profits and be efficiency oriented. After reorganizing its IT department and improving the E-marketing, e-procurement, and other technological operations, more work needs to be done to ensure the operation management’s long-term sustainability. Develop logistical plans that center around all pillars of the supply chain so that the organization can have successful operation management. Logistics effectiveness is dependent on balancing all variables, including procurement management, risk management techniques, efficient inventory management, and buying procedures. Thus, organization, control, and planning are critical throughout the supply chain. As a result, they must enhance their SCM.
Unilever Company
Company Overview
Unilever is a global consumer goods conglomerate founded in 1930 by the merger of the Dutch company Margarine with the British company Lever Brothers. Considerable research and papers have proven that Unilever utilizes a Lean Supply Chain, resulting in cost savings via a centralized SCM (Naik, 2022). Unilever is now looking to increase its supply chain’s agility. The technique removes all redundancies in the supply chain, lowering costs and shortening delivery times (Snyder & Shen, 2019). The strategy’s policy exposes the concept of meeting demand by providing the item at the right time, at the right place, and in the right proportion to accomplish a low-cost approach.
Unilever manufactures and distributes food products, cleaning chemicals, and personal care items. Its operations management leverages the end-to-end supply chain strategy through eight components: engineering, logistics, safety, procurement, and, most importantly, customer service, quality, and planning. The company boasts over 255 factories and 450 warehouses located across various countries, which have significantly aided the corporation in operating and serving over 2.5 billion people globally (Mees-Buss et al., 2019). However, the major problem they have faced is the sustainability of their supply network. Take, for example, order placement rates. Consumers have been concerned mostly because of late deliveries, and as a result, there have been several complaints that the wait time for delivery of items is longer than planned (Mees-Buss et al., 2019). The problem is exacerbated by the deterioration of procurement processes when procuring resources and supplies, resulting in significant delays between customers and the firm. Another critical concern is the well-being of the personnel, particularly those working in warehouses.
Demand Forecasting and Supply Chain Planning of Unilever Company
Several fundamental aspects influence the functioning of a business depending on demand. Forecasting demand can be difficult because it is impossible to be 100 percent accurate due to the numerous factors that influence demand in the market. The key element influencing demand is the link between the cost of production and the price that the consumer is prepared to pay (Mees-Buss et al., 2019). Many clients want to buy the goods at the lowest feasible price, but as a business, the firm must offer its product at a profit while still competing with its competitors. Another consideration is the economy, as well as consumer income and sustainability.
Soaps and shampoos are not ordinary commodities, which means that changes in income do not correspond to increased or reduced demand for these items, although there may be a trend toward more luxurious goods during periods of great economic growth. For example, when the economy is doing well, we might expect highly perfumed and specialized items to be in more demand than basic ones, and vice versa. Finally, the quantity of users in the market significantly influences Unilever and the manufacture of shampoos.
Global Distribution of Unilever Company
Global distribution has been recognized as an essential component of the supply chain, and the company’s logistics contribute considerably to the supply chain’s success. Some of the methods employed by the organization include frequent product manufacturing, weekly worldwide meetings, movement of production plants closer to their target customers, and the introduction of seamless procedures that are eventually shared across all supply chain stakeholders. Automation has helped the organization enhance its SCM due to technological improvements (Rashid et al., 2016). For example, consider blockchain integration. Today, the organization employs several intermediates in communication and collaboration with key partners, resulting in a slow process that is ultimately costly. As a result, Unilever wishes to develop a more transparent system at a lower cost by utilizing blockchain technology. Unilever is regarded as a worldwide player, and it has consistently focused on enhancing optimization and its supply chain throughout the years. Supply chain management focuses on managing partner firms impacted by the beverage’s strong demand. As a result, good communication with interested parties and effective distribution to target sites is essential.
Recommendations
Unilever has taken comprehensive measures to mitigate the challenges and guarantee its supply chain remains unaffected. On the other hand, the company should consider diversifying its sources of supply to a variety of locations, especially given the different restrictions imposed as a result of the epidemic. Nestle and Coca-Cola should adopt blockchain technology to improve supply chain security. The blockchain technique might be utilized as a backup plan for control and monitoring or employed alongside the present system. Furthermore, the multinational corporation should apply sustainable development strategies and adhere to other sustainable techniques such as World Wildlife Fund and Greenpeace. This is due to their failure to completely commit to creating a sustainable living environment (Statista, 2020). For example, some of the leaders in plastic trash disposal allege that enormous deforestation and water scarcity exist where the corporation manufactures goods.
Discussion and Conclusion
The supply chain is an important feature and a tool that connects businesses with suppliers who manufacture and distribute goods and services. Many businesses encounter numerous problems connected to supply chain sustainability regularly (Tomic & Brkic, 2019). Many businesses, for example, are concerned about the rate at which customer orders are placed (Tannous & Yoon, 2018). Untimely delivery difficulties are frequently caused by a decline in procurement procedures of resources and materials, which are the leading causes of large delays between producers and customers. Businesses must decrease waste and eliminate resource utilization while maintaining a top-tier manufacturing operation.
The study revealed the significance of a sufficient information flow to increase supply chain agility by being responsive to market needs. Logistics is critical in establishing a successful and efficient supply chain. For example, having a strategic logistics structure has aided Coca-Cola, Nestle, and Unilever in managing the risks caused by demand fluctuations. It has been proven that conglomerate firms should consider outsourcing part of their tasks to cut octopuses while expanding their overall services.
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