Coca-Cola and Marussia Supply Chain Management

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Table of Contents

Introduction
Differences between Operations Management Practices of Small and Large Firms
Five Objectives of Operational Performance
Summary
References

Introduction

According to Das (2015), Modgil and Sharma (2017), operations management refers to the process of designing a firm’s processes to create the highest level of efficiency. Using a firm’s core activities as the baseline for maintaining operational development means that small and large organizations naturally have to develop different plans that suit the scope of their operations (Srinivasan, 2017). Subject to this understanding, this paper compares how operations management in small organizations is fundamentally different from those adopted by larger ones.

To get a deeper understanding of this area of discussion, reference will be made to the four Vs of operations management (volume, variety, visibility, and variation) and the five objectives of the discipline – dependability, cost, quality, flexibility, and speed (Jones and Robinson, 2019; Williamson, 2014). However, before delving into the details of this analysis, it is important to understand differences in operations management practices for small and large firms.

Differences between Operations Management Practices of Small and Large Firms

Although small and large businesses often compete in the same market, the scope of their operations are fundamentally different and may affect their overall performance (Donaldson, 2015; Burke and Noumair, 2015). For purposes of this investigation, a comparison of the operations management of a small and large organization is essential in comprehending how such businesses could remain competitive in a fast-paced business environment. To gain a deeper understanding of this discussion, Coca Cola will be used, as an example of a large organization with a vast supply chain network that spans multiple continents, while Marussia Beverages, a United Kingdom (UK)-based distribution company for alcohol and spirits, will be used as a representation of a small firm.

Stated differently, Coca-Cola is a globally renowned beverage company with large-scale operations around the world, whereas Marussia Beverages is a small company in the UK with relatively smaller operational management needs (Marussia Beverages, 2020). Differences between such small and large companies can be best evaluated by analyzing their areas of specialization, the scope of distribution, resource needs, the scope of distribution, and bargaining power.

Bargaining Power

Supply chain systems of small and large-scale businesses differ based on variations in their bargaining power. This is true for Coca-Cola and Marussia. Indeed, the latter has a low bargaining power compared to its more established peers. Consequently, it is limited from negotiating for better deals as larger companies do. Therefore, such companies are at the mercy of largescale suppliers. Comparatively, larger companies can negotiate better deals with suppliers because they enjoy economies of scale (Coca-Cola Hellenic, 2019).

Specialization

Another difference between the supply chain systems of small and large firms is the dedication of their employees to this function. For example, most managers of large-scale organizations have a dedicated team, which is usually led by a supply chain manager to oversee associated functions (Ivanov, Tsipoulanidis, and Schönberger, 2016). Comparatively, smaller organizations cannot afford such luxury; instead, they often dedicate this function to a common manager who oversees supply chain management duties alongside others (Ivanov, Tsipoulanidis, and Schönberger, 2016).

The role of specialization in the management of supply chain systems can be best understood through the knowledge-based view of operations management, which presupposes that employee involvement in the realization of organizational goals helps to develop a stronger competitive advantage for companies that adopt this philosophy as opposed to those that do not (Meredith and Shafer, 2019). Therefore, based on this discussion, the knowledge-based view presupposes that Marussia’s supply chain system would be fundamentally less competitive than Coca-Cola’s.

Scope of Distribution

The extent and sophistication of the supply chain systems of Coca-Cola and Marussia Beverages also highlight another difference between the supply chain systems of small and large organizations. Particularly, the small scope of Marussia’s supply chain is an advantage to the firm because it offers its managers a firmer control of its activities. Comparatively, Coca-Cola, which has a larger and more sophisticated distribution system, is vulnerable to several types of risks. Therefore, the operations management practices of such large organizations are naturally more complicated than smaller ones because of the presence of multiple relationships to manage.

Resource Differences

Most supply chain management systems that are operational today are managed using software (Zijm et al., 2018). Companies invest a lot of money in developing such assets because they not only provide a source of competitive advantage but also act as a management tool for promoting organizational efficiency (Zijm et al., 2018). Small companies are disadvantaged from having the best teams to undertake such tasks because of their resource limitations. However, large companies have more resources to develop the best virtual systems and may end up having superior supply chain systems.

This is true for Coca-Cola and Marussia because the latter cannot match the level of resources Coca-Cola could use to develop the best supply chain assets. Consequently, its virtual supply chain system may be less impactful. This analogy is represented by the resource-based view of operations management, which suggests that companies could use their resources to sustain their competitive advantages (Nikolaou, Tasopoulou, and Tsagarakis, 2018; Nason and Wiklund, 2018).

The development of sound supply systems using advanced technology and financial resources is an example of such competencies. Therefore, it is difficult to compare the efficiency of a small supply chain system as Marussia with that of Coca-Cola. However, it is possible to compare both models using the 4Vs of operational management – volume, variety, variation, and visibility. Table 1 below outlines the outcome of this analysis.

Table 1. 4Vs Comparative analysis (Source: Developed by Author)

4Vs	Coca Cola	Marussia
Volume	The supply chain system is characterised by a high volume of product sold and distributed in different parts of the world.	Marussia’s activities are characterised by a small volume of products (Marussia Beverages, 2020). Therefore, there is less sophistication in the supply chain model.
Variety	Coca Cola’s supply chain and operations management system has less variety because of its standardised nature (Coca Cola Hellenic, 2019).	It is difficult for Marussia to develop a low-cost operations management model for its supply chain system because it has more variables in its operations management system based on its customisable nature.
Variation	Third parties in different regions of the world undertake supply chain management functions on behalf of the parent company (Coca Cola Hellenic, 2019). However, there is low variability in operations because retail and distribution processes are standardised by the parent company	Marussia has a high variation of its supply chain dynamics because its processes are less standardised due to their customisable nature (Marussia Beverages, 2020).
Visibility	High Visibility based on the global nature of the Coca Cola brand	High visibility because goods can be tracked online after purchase

Five Objectives of Operational Performance

Dependability: Both the supply chain systems of Marussia and Coca-Cola are dependable because of their timely delivery of products and services. Particularly, the ability of Coca-Cola to maintain the same refreshing taste for all its products throughout the years is a mark of dependability as well (Coca-Cola Hellenic, 2019).
Cost: Marussia’s products attract a higher cost model compared to Coca Cola’s because Marussia stocks a wider variety of products that make it difficult to achieve mass production because of unique product specifications standards, which makes it difficult to enjoy economies of scale that would support a reduction in production costs (Marussia Beverages, 2020). Comparatively, Coca-Cola has a low variety of products, thereby enabling it to sport higher volumes and low costs per unit.
Quality: Both Coca-Cola and Marussia’s supply chain systems are modeled on the delivery of quality products (Slack, 2016). Particularly, Coca-Cola does not share the formula for developing its products, as it is a trademarked secret. The quality of Marussia’s products is also safeguarded by high safety and health standards.
Flexibility: Coca-Cola’s supply chain model is not flexible because of tight distribution and operational controls from the parent company (Coca-Cola Hellenic, 2019). Comparatively, Marussia’s framework is open to customization, which makes it flexible enough to accommodate market changes.
Speed: This objective of operations management is concerned with how fast a supply chain system could deliver goods or services to customers. Based on this definition, Coca-Cola has a sophisticated supply chain network that allows it to deliver products to the market fast (Coca-Cola Hellenic, 2019). The model is based on the presence of a regional bottler who can manufacture the product on notice and store it at a warehouse ready for delivery. Comparatively, Marussia’s supply chain is slower to deliver goods because it depends on third-party agents, such as airlines, for efficient delivery (Slack, 2016).

Summary

This paper has shown that large and small organizations have major differences in the manner they undertake supply chain management functions. These differences stem from their varying legal obligations, financing arrangements, and market dynamics. Furthermore, their scope of operations influences the extent they could integrate this function into their daily operations. The comparative analysis of Coca-Cola and Marussia’s supply chain functions highlights these differences. Particularly, the 4Vs and five index analyses mentioned in this study suggest that a large company could better initiate and manage its supply chain functions than a smaller corporation. The difference stems from their resource and knowledge endowments.

References

Burke, W. and Noumair, D. (2015) Organization development (paperback): a process of learning and changing. New York, NY: FT Press.

Coca Cola Hellenic. (2019) Supply chain overview. Web.

Das, A. (2015) An introduction to operations management: the joy of operations. London: Routledge.

Donaldson, L. (2015) The meta-analytic organization: introducing statistico-organizational theory: introducing statistico-organizational theory. London: Routledge.

Ivanov, D. Tsipoulanidis, A. and Schönberger, J. (2016) Global supply chain and operations management: a decision-oriented introduction to the creation of value. New York, NY: Springer.

Jones, P. and Robinson, P. (2019) Operations management. 2nd edn. Oxford: Oxford University Press.

Marussia Beverages. (2020) Featured products. Web.

Meredith, J. R. and Shafer, S. M. (2019) Operations and supply chain management for MBAs. 7th edn. London: John Wiley and Sons.

Modgil, S. and Sharma, S. (2017) ‘Information systems, supply chain management and operational performance: tri-linkage – an exploratory study on pharmaceutical industry of India’, Global Business Review, 18(3), pp. 652-677.

Nason, R. S. and Wiklund, J. (2018) ‘An assessment of resource-based theorizing on firm growth and suggestions for the future’, Journal of Management, 44(1), pp. 32-60.

Nikolaou, I. E. Tasopoulou, K. and Tsagarakis, K. (2018) ‘A typology of green entrepreneurs based on institutional and resource-based views’, The Journal of Entrepreneurship, 27(1), pp. 111-132.

Slack, E. (2016) Coca-Cola. Web.

Srinivasan, G. (2017) Quantitative models in operations and supply chain management. New York, NY: PHI Learning Pvt. Ltd.

Williamson, J. (2014) Getting a big data job for dummies. London: John Wiley and Sons.

Zijm, H. et al. (2018) Operations, logistics and supply chain management. New York, NY: Springer.

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