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Client TRACC Journey: Coca-Cola

coca-cola

In 1886, Coca-Cola® originated as a soda fountain beverage selling for 5c a glass. While early growth was impressive, it was only when a strong bottling system was developed that Coca-Cola became the world-famous brand it is today. The Coca-Cola bottling system, comprising more than 250 bottling partners worldwide, grew up with roots deeply planted in local communities. These bottling partners manufacture, package, merchandise and distribute the final branded beverages to Coca-Cola’s customers and vending partners, who then sell the soft drink giant’s products to consumers at a rate of more than 1.9 billion servings a day.

 

CCi’s first engagement with a large Coca-Cola bottler dates back to early 2000 when Amalgamated Beverage Industries (ABI), the soft drinks division of SABMiller (now part of AB InBev), identified a need to optimize production management and process efficiencies at its five South African plants. With a shortage of safe, potable water in Africa, increasing tourism and a hot climate, there’s a huge demand for safe drinks to quench the thirst of locals and visitors alike. Such a challenge calls for a structured and balanced approach to meet consumer demand without putting too much strain on the continent’s natural resources.

Based on SABMiller’s demonstrable CI successes with the TRACC Value Chain Improvement Solution on the brewing side, ABI didn’t hesitate to use the same platform from which to drive its business performance improvement strategy. This became the precursor to similar implementations at numerous Coca-Cola bottlers across the globe.

TRACC MILESTONES

2003

In 2003, ABI introduces TRACC as part of a three-year manufacturing strategy. The objective is to increase internal capability, progress toward a more effective and efficient organization, and provide central assessment capability across the group. The main aim of ABI’s Business Centred Maintenance (BCM) journey, as the improvement initiative is called, is to improve line efficiencies, reduce maintenance costs and develop a multiskilled workforce. During the two-year facilitation period, ABI achieves significant results with some 17 efficiency improvement projects — mainly by identifying focused improvement areas and initiating Profit Improvement Projects (PIPs).

HIGHLIGHTS
  1. Inventory turnover saw a 100% improvement. This and other improved efficiencies at the five South African sites have put ABI firmly on the road toward becoming a world class company and most importantly, the best bottler in the industry.
  2. Not only were significant cost savings realized, but for the first time in ABI’s history it achieved record-breaking line efficiencies, thereby equaling world class standards in the beverage industry. Line efficiencies were up by 75% on all five ABI sites, including an improvement of 45% to 65% on one site within a 10-month period.

2005

The world’s largest noncarbonated beverage manufacturer, SCMC (Coca-Cola Supply Chain Management Company) launches world class manufacturing at its Dongguan plant in China with TRACC as the implementation vehicle. Based on the initial successes at this plant, TRACC is subsequently rolled out across 10 of their 12 plants.

HIGHLIGHTS
  1. Having identified setup time reduction as a key constraint, SCMC Xiamen achieved a remarkable turnaround within the first 12 months by reducing setup time from 12 hours to 4 hours. This became an internal benchmark for all other SCMC sites. The turning point was to get the frontline operators involved and engaged in the plant-wide continuous improvement effort. This resulted in a highly motivated workforce that believed they could contribute significantly to the success of the company.
  2. The Wuhan greenfield site reached full plant capacity within three months of start-up, and 85% machine efficiency within the first four months. Previously, new greenfield sites took more than 12 months to reach this level of efficiency. Wuhan became the first Coca-Cola bottlers manufacturing site to benchmark this remarkable achievement.

It is wonderful that our sites can learn from one another, making the gains that much more exponential.
— Gao Dai, SCMC Foshan Plant Manager

 

2006 – 2007

In June 2006, the Coca-Cola FEMSA group’s operational leadership selects TRACC to assess the practices at one of its leading Mexican plants, Cuautitlán. Based on this assessment, and after carefully reviewing the TRACC content and implementation approach, the group chooses TRACC as the framework for strengthening and supporting the High Performance System throughout its Mexican plants. This is part of a drive to standardize business systems across its plants in that country.

The strategy to reinforce the High Performance System became known by its Spanish acronym, Prácticas Operativas del Piso, or “POP”. In 2007, FEMSA made significant progress with the implementation of the POP strategy.

HIGHLIGHTS
  1. With a focus on building long-term capability, Coca-Cola FEMSA’s High Performance System successfully standardized business systems across multiple operations.
  2. In 2012, Coca-Cola FEMSA was awarded the 2012 Tlaxcala Award for Competitiveness due to its continuous work for the development and strengthening of key capacities in its operations.

2009

The phenomenal growth of the Coca-Cola brand in China prompts Swire Beverages to look for a solution to manage the forecasted growth of 13 of its plants, as well as build internal capability. Rather than selecting a pilot project on a specific bottling line, Swire management opts to roll out the full bundle of TRACCs at two pilot sites — Nanjing and Zhengzhou. The main aim is to improve net line utilization (NLU) and machine efficiency (ME).

HIGHLIGHTS
  1. Since the introduction of TRACC, Swire was able to cope with rapid growth in both complexity and sales volume against a background of more demanding customer service levels.
  2. More than 600 manufacturing and supply chain PIPs were completed successfully over the past seven years — culminating in savings of close to *RMB 57 million. (*Chinese Yuan)
coca-cola

2012

Mexican-based Arca Continental, Latin America’s second largest Coca-Cola bottler, kicks off their journey to world class with the implementation of the Leading and Managing Change, and Teamwork TRACCs. Three pilot areas were identified in these early stages: Salta — Line 1 (returnable glass bottles 237, 350, 500, 1,000 and 1,500 ml) and syrup room; Tucuman —
Line 1 (one-way PET bottles 500, 1,500, 2,250 and 3,000 ml) and syrup room; and Formosa — Line 3 (returnable glass and PET bottles).

HIGHLIGHTS
  1. The Salta plant delivered three successful PIPs. The most successful PIP by far in terms of financial savings was the reduction of changeover time on the pilot line. Historical data showed that the average changeover time was 127% above the changeover matrix. The objective of the PIP — to reduce the changeover time to comply 100% with the changeover matrix — was easily achieved.
  2. The Tucuman plant completed four PIPs. The most successful PIP in terms of financial savings was a reduction in loss of empty returnable bottles (from 6.2% to 5%).
  3. The Formosa plant also completed four PIPs successfully. Similar to the PIP in Tucuman, the most successful PIP in terms of financial savings was a reduction in loss of empty returnable bottles. A PIP was also carried out to reduce the time of mechanical line stops caused by a lack of critical spare parts. The time of stops caused by the unavailability of such parts was reduced by an impressive 63% per year.
  4. As a result of the continuous improvement of its production processes, Arca reduced the average amount of water used in its processes by almost 20%, reaching one of the best standards on a global level. Arca also underpinned its global leadership position in Product Quality Index with a consolidated rating across its operations in Mexico, Ecuador and Argentina of 97.36, which is above the industry average. The Salta plant is recognized by The Coca-Cola Company for achieving the highest product quality rating in the region.

May 2013

The journey to world class at Coca-Cola Andina’s plant in Monte Cristo, Córdoba begins in May 2013 with the Site Steering Committee (SSC) workshop and the implementation of the Leading and Managing Change (LMC) TRACC. The improvement program is called SEA: “Sistema de Excelencia Andina”, which translates to “Andina Excellence System”. Four pilot areas are identified in the early stages: production line 1 (soft drinks, returnable Refpet bottles 2 liters), production line 6 (soft drinks, one-way PET bottles 1.5 and 2.25 liters), production line 30 (water, one-way PET 0.5, 1.5 and 2 liters and glass bottles 0.5 liters), and the returnable bottles sorting line.

HIGHLIGHTS

The most noticeable progress was made in the areas of Teamwork best practices and Profit Improvement Projects (PIPs). Unplanned line stops, caused by two machines on one of the pilot lines, were reduced by 16% and 38%, respectively. Breakage of returnable bottles was reduced by 35%. Raw material loss was reduced by 21% (sugar) and 72% (concentrate).

 

2013 – 2015

COFCO Coca-Cola Beverage Ltd, a joint venture that is 65% owned by the state-run grain processor China National Cereals, Oils and Foodstuffs Corp. and the largest bottler in the country, introduces TRACC in the early part of 2013.

HIGHLIGHTS
  1. Water consumption was reduced from 1.85 hectoliters to 1.78 hectoliters and net line utilization increased from 92.66 to 93.24 over a three-year period.
  2. Total PIP savings amount to a significant RMB 4.4 million at the Tianjin plant over a three-year period (2013-2015), and RMB 1.15 million at the Hebei plant in 2015.
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