Material Managemannt and Determination of Material Requirement in Coca-Cola

1

By:- Archi Jain

Definition• Material Management is a branch of logistics that

deals with the tangible components of supply chain. Specifically this covers the acquisition of spare parts & replacements quality control of purchasing & ordering such parts & standards involved in ordering, shipping & warehousing.

• Materials Management thus can be defined as that function of business that is responsible for the Coordination of planning, sourcing, purchasing, moving, storing and controlling materials in an optimum manner so as to provide service to the customer, at a pre-decided level at a minimum cost.

Objective 0f Material Management 1. To buy at the lowest price , consistent with desired

quality and service 2. To maintain a high inventor y turnover , by

reducing excess storage , carrying costs and inventory losses occurring due to deterioration, obsolescence and pilferage

3. To maintain continuity of supply , preventing interruption of the flow of materials and services to users

4. To maintain the specified material quality level and a consistency of quality which permits efficient and effective operation

5. To develop reliable alternate sources of supply to promote a competitive atmosphere in performance and pricing

6. To minimize the overall cost of acquisition by improving the efficiency of operations and procedures

7. To hire, develop, motivate and train personnel and to provide a reservoir of talent .

8. To develop and maintain good supplier relationships in order to create a supplier attitude and desire furnish the organisation with new ideas , products, and better prices and service.

9. To achieve a high degree of cooperation and coordination with user departments.

10. To maintain good records and controls that provide an audit trail and ensure efficiency and honesty

ScopeMaterials planning and control: Materials required for any operation are based on the sales forecasts and production plans. This involves estimating the individual requirements of parts, preparing materials budget, forecasting the levels of inventories, scheduling the orders and monitoring the performance in relation to production and sales.

Purchasing: Basically, the job of a materials manager is to provide, to the user departments right material at the right time in right quantity of right quality at right price from the right source.

Purchasing: Basically, the job of a materials manage r is to provide, to the user departments right material at the right time in right quantity of right quality at right price from the right source.

Stores: Once the material is delivered, its physical control, preservation, minimization of obsolescence and damage through timely disposal and efficient handling, maintenance of records, proper locations and stocking is done in Stores.

7

Determination of

Material Requirement

As the world’s largest beverage company, we bring safe, great-tasting, quality beverages to consumers at a rate of 1.8 billion servings per day.

Material requirement planning

• Material requirement planning or MRP is a production planning, scheduling, and inventory control system used to manage manufacturing process.

• Most MRP systems are software based• It is possible to conduct MRP by hand as well

Objectives

• Ensure materials are available for production• Ensure products are available for delivery to

customers.• Maintain the lowest possible material and

product levels in store.• Plan manufacturing activities, delivery

schedules and purchasing activities.

Scope

• MRP deals with following problems:-– What items are required?– How many are required?– When are they required?

Process

• Management System: Establish, document, implement, maintain and continually improve the quality and food safety management system in accordance with the requirements of the Coca-Cola Company that covers products and packaging materials supplied to the Coca-Cola system. Appoint a designated person to ensure the management system is effectively implemented and maintained, and that performance is reported to senior management.

Risk Assessment: Use a risk assessment process to determine quality control points and food safety risks (based on the HACCP seven-principle, twelve-step model described in the Annex to Codex Alimentarius General Principles of Food Hygiene CAC/RCP 1-1969), which allows any identified risks to be reduced or eliminated.

Facilities and Equipment Design: Design facilities and equipment used to manufacture, handle or store materials (raw materials, intermediate and finished products, auxiliary materials, processing aids, and packaging materials) that are suitable for their intended use. Maintain facilities and equipment to preclude potential contamination by or exposure to outside elements, odorous substances, pests, hazardous materials, microbial contaminants.

Specified Requirement

General : Meet the specified requirements defined by The Coca-Cola Company and any specific additional local needs. Refer to Supplier Requirements – General (SU-RQ-005) for requirements for authorization purposes, category-specific requirements, specifications and other relevant documents.

Food Safety : Primary packaging suppliers must obtain certification to one of the GFSI-recognized food safety management schemes

Regulations Implement a process to ensure compliance to applicable regulatory requirements to where the packaging materials are manufactured as well as delivered. Facilities and Equipment Design: Design facilities and equipment used to manufacture, handle or store materials (raw materials, intermediate and finished products , auxiliary material s, processing aids, and packaging materials) that are suitable for their intended use. Maintain facilities and equipment to preclude potential contamination by or exposure to outside elements, odorous substances, pests, hazardous materials, microbial contaminants. Validate the capability of new or changed equipment, new technology, or process changes.

Implementation and Operation

Purchased Materials and Services Implement a program to approve and monitor the suppliers of purchased materials that includes the following: • Written specifications for purchased materials.

• A process to ensure materials or services purchased from upstream suppliers meet the specifications.

• A system to prevent the use of purchased materials that do not meet specifications.

Process of Monitoring and Control

Good Manufacturing Practices (GMP) : Plant personnel, visitors and outside contractors must comply with the GMP requirements as set forth by applicable regulations. Refer to Codex General Principles of Food Hygiene (CAC/RCP 1) a minimum (for those suppliers who are not yet certified to a GFSI-recognized scheme).

Good Laboratory Practices (GLP) Plant or contract laboratories and laboratory personnel must implement GLP principals. The laboratory must use published, recognized and validated testing methods. Where published test methods are not available, internally developed methods must be validated for their intended use consistent with GLP requirements. The laboratory design, equipment and processes must ensure the test results are consistent and reliable.

Pest Control: Implement a documented pest control program to effectively prevent pest activity in the facility and the surrounding area. Assign a trained plant personnel or an approved external contractor to manage this program. Assign certified pest control operators or personnel with equivalent training to perform pest control activities.

Housekeeping and Sanitation Controls: The program must also ensure raw materials, packaging, in-process components and finished goods storage areas, shipping trailers, cars and containers are clean and pest-free.

Weight Controls: Where applicable, the supplier must have a weight control program compliant with applicable regulations. Establish operating limits and quality monitoring procedures to achieve tolerances documented in the specifications or purchase contract.

Foreign and Extraneous Material Control: Implement controls, procedures and equipment in place to prevent foreign and extraneous material from entering the products. Examples include the use of metal detectors, magnets, screens and filtration systems.

Finished Goods: Where local regulatory authorities require the chemical treatment of wooden pallets, ensure the pallets do not contaminate package materials during shipment and storage. If pallets are chemically treated, declare the treatment to the Coca-Cola system. The following restrictions apply: No use of chlorinated or brominated phenolic compounds; No use of halogenated phenols; or Conformity with applicable heavy metal regulations.

Transportation: Implement processes to ensure transportation conditions do not affect the packaging and to prevent the shipment of nonconforming packaging. Inspect transportation vehicles for structural integrity, cleanliness, security and suitability prior to loading. Control the security of the trailer/container/tanker to prevent tampering. The supplier must demonstrate the security of the delivery container.

Scientific and regulatory affairs

•Materials used in the manufacturing of packaging must meet both corporate and local business unit requirements and performance criteria.•Materials that have a potential for direct contact with The Coca-Cola Company products must comply with regulatory requirements for food contact use in the •country where the finished product will be distributed.•Materials must be approved by the Company scientific and Regulatory Affairs (SRA) and additionally, if required, by the group’s SRA.•Suppliers must provide complete and accurate information for components of materials used for contact with The Coca-Cola Company product.

Security

Trademarked Protection: Maintain control of The Coca-Cola Company’s trademarked materials/promotional materials and/or graphics (“Intellectual Property”) until point of delivery. This requirement includes the control, use and destruction of scrap and/or obsolete materials. Acknowledge and comply with requirements pertaining to The Coca-Cola Company’s intellectual property ownership rights as outlined in the Supplier Authorization agreement.

Information: Secure access to information that pertains to the Coca-Cola system.

Auxiliary Material: Materials used in manufacturing processes, storage and product delivery that come into intentional contact with equipment, packaging, or surfaces, or unintentional contact with raw materials, intermediate or finished products. Examples: cleaning and sanitizing agents, container cleaning agents (including bottle washer additives), lubricants, solvents, glues, date code ink.

Coca cola purchase syrups and concentrates from TCCC and other licensors to manufacture products

Coca cola purchase sweeteners, juices, mineral waters, finished product, carbon dioxide, fuel,

PET (plastic), glass, aluminum, and plastic bottles; aluminum and steel cans, other

packaging materials.

The beverage agreements with TCCC provide that all authorized containers, closures, cases, cartons and other packages, and labels for the

products of TCCC must be purchased from manufacturers approved by TCCC.

25

•In the U.S. and Canada, high fructose corn syrup (HFCS) is the principal sweetener for beverage products of COCA COLA.

• Sugar also can be use as sweetener.

•Requirement of plastic bottles full fill by multiple suppliers.

•Requirement of steels for cans full fill by purchasing bulk quantity of steel sheets.

•Water is use from surrounding area of plant.

•Plastic mostly coming from the recycling plant.

Chronology of Glass Package of Coca-

Cola

Refferences

• http://www.wikinvest.com/stock/Coca-Cola_Enterprises_(CCE)/Raw_Materials_Other_Supplies

• http://www.wikinvest.com/stock/Coca-Cola_Enterprises_(CCE)/Raw_Materials_Other_Supplies

• http://en.wikipedia.org/wiki/Material_requirements_planning

• http://en.youtube.com