|Since 2005, Coca-Cola Supply Chain Management Company (SCMC) has engaged in a strategic partnership with Competitive Capabilities International (CCi) to build their world class operations (WCO) model through the TRACC Integrative Improvement System. This incremental, maturity-based approach — plus the right level of people engagement and innovative management principles — has paved the way for SCMC to adopt digital technologies at the correct pace, as illustrated in this article. The “digital factory” project introduced at the pilot plant in Suzhou not only realized impressive savings, but also walked away with the 2017 Coca-Cola China Operational Excellence Award.|
Having built up rapid deployment experience for more than a decade, SCMC’s technical team has grown exponentially in terms of seeking innovation in operational excellence. The number of awards they’ve won over the years bears testimony to this:
- 1st place in the Coca-Cola Asia Pacific Best Practice Award
- Two 2nd places in the Coca-Cola Global Technical Engineering Committee (GTEC) Project Award
These best practices have helped to control downtime, line utilization, unit maintenance costs, utilities consumption and quality in the Coca-Cola global system, all of which contributed to keeping the company in a leading position in aseptic beverage products.
However, these projects were carried out independently to solve specific problems in equipment management. As a result, there was little to no data connection and information exchange between production and operational management, engineering management, quality management, and other subsystems. The speed of production line information and critical data collection was disturbingly low, while the paper trail caused by Excel reports in each department wasted many man-hours on manual copying, information entry and calculation. The multiple feedback tiers and level-by-level reporting system slowed the process down even more – it took a long time to collect data from every plant and data was often distorted.
China Smart Manufacturing 2025
Around this time, the Chinese government proposed China Smart Manufacturing 2025, a concept based on Germany’s strategic manufacturing initiative Industry 4.0. According to Industry 4.0, businesses will, in future, establish global networks that incorporate their machinery, warehousing systems and production facilities in the shape of Cyber-Physical Systems (CPS). In the manufacturing environment, these CPS comprise smart machines, storage systems and production facilities capable of autonomously exchanging information, triggering actions and controlling each other independently. This facilitates fundamental improvements to the industrial processes involved in manufacturing, engineering, material usage, and supply chain and lifecycle management.
Inspired by these developments and based on the aforementioned data management problems, the executive team at SCMC decided to develop a tailor-made digital factory solution. The fact that competitiveness in the food and beverage industry is increasingly being defined by the degree of digitalization made the decision that much easier.
In Suzhou, a major city in southeast Jiangsu Province, SCMC operates one of its most successful noncarbonated bottling plants. Managed by one of its subsidiaries, Coca-Cola Bottlers Manufacturing Co. Ltd., SCMC selected this as the pilot plant. It was important to select a plant with a high enough level of maturity in operational excellence. If operational maturity is not at a sufficiently high level, an organization will struggle to gain the benefits of any new technology.
Competitiveness in the food and beverage industry is increasingly being defined by the degree of digitalization.
The aim of Phase 1 of the project, led by a cross-functional team consisting of members from SCMC’s technical team (operational excellence) and IT, plus members of the plant’s Quality function, was to:
- Interconnect the production line equipment, peripheral auxiliary equipment and online quality inspection unit
- Computerize the report forms of key areas so that production, quality control (QC) and engineering personnel can capture real-time information on quality, line performance and equipment condition
- Drive a timely response of focused improvement by improving short-term visual management to improve quality, output and reduce manufacturing cost
- Develop a complete data flow (using the big data platform as basis) across workstations, production lines, departments, plants and group and connect it to the ERP system
The litmus test came when Phase 1 was officially implemented. The bigger challenge is often organizational and cultural convergence. This convergence is essential to truly break down barriers and eliminate silos of information and isolated systems. The Suzhou plant came through with flying colors as plant personnel embraced the new digital approach with gusto. It’s not difficult to understand why.
Organizational and cultural convergence is essential to truly break down barriers and eliminate silos of information.
Production forms no longer need to be completed manually. Whenever the QC data exceeds the upper or lower limit of normal value, or abnormalities are detected by statistical process control (SPC), an alarm is triggered and sent directly to QC personnel. When a machine-connected condition-based maintenance (CBM) detection probe finds an abnormal condition, a warning message will be generated and displayed in the system so that relevant engineers are instantly alerted to machine faults.
Critical data of production processes are now displayed centrally on a big screen on site, giving managers a sweeping view of relevant information. The key control points of the production process are also displayed centrally so that abnormal situations can be monitored in real time. With the SAP Plant Maintenance (PM) system, engineers used to send out work orders triggered by natural time and then collected them later to manually enter into the system to form a closed loop. Now, based on equipment state or its actual running time, CBM will automatically trigger work orders directly to a handheld terminal of relevant engineers. Work orders will be closed automatically once engineers fill in the required information.
The real-time display of system and CBM data makes it easier for personnel to understand the operational status of the key components of critical equipment. Engineers can draw up relevant maintenance plans according to actual conditions of the equipment. Therefore, over-maintenance and unplanned downtime are being reduced, and production equipment utilization is being enhanced. Also, the up-to-date information of the running state of the equipment is helping to reduce spare part inventory. This makes maintenance of all equipment more timely, efficient and productive.
With the implementation of the digital factory project at the Suzhou plant, manual report forms have dropped by 20% while machine efficiency (ME) of the production line has improved by 2% – culminating in annual savings of close to RMB1 million. As the total investment in this project was less than RMB300,000, the ROI was significant. To top it all, the project was awarded first place in the 2017 Coca-Cola China Operational Excellence Award.
Done correctly, digital factory building can reduce workload substantially, increase line efficiency and bring about impressive overall savings. However, a digital factory is far from an unmanned factory. It requires employees to be more capable and skilled and, as such, will remain people-oriented. The building of best management practices is also a prerequisite for digital factories, because only optimized processes can ensure correct data.
The building of best management practices is a prerequisite for digital factories, because only optimized processes can ensure correct data.
Competitive capability will not necessarily come from automation or technology alone, but rather from the adaptation and creative use thereof. Already we are seeing that the fundamental people engagement practices — teamwork, leadership, goal alignment, and so on — are becoming even more important as technology becomes more sophisticated. These practices, combined with innovation in management principles and processes, can create long-lasting advantage and produce dramatic shifts in competitive position.
|Founded in 2002, Coca-Cola Supply Chain Management Company (SCMC) is the only noncarbonated beverage manufacturer in the Chinese market. The company is a Sino-foreign joint venture owned by Coca-Cola South Asia Holdings, Mount Limited; COFCO Beverages Limited; and Coca-Cola China Industries (Beverages) Limited. When SCMC was established, the company had seven hot filling lines and one can line across its one plant and a few contract manufacturers. SCMC mainly produced hot filling beverage products with an annual output of less than 300,000 tons. Today, the company has 32 world class aseptic lines, two hot filling lines and one can line across a total of seven of its own plants, and seven co-owned plants with Coca-Cola bottlers and three contract manufacturers. Its annual output exceeds three million tons.|
|ABOUT THE AUTHORS|
|Jerry Yang is the Technical Director at Coca-Cola Bottlers Management Service (Shanghai) Co. Ltd. and has over 20 years’ experience in the food and beverage industry in the ASPAC region. He and his teams have won several project awards in the global Coca-Cola system, as well as gold (two) and silver (two) Leadership in Energy and Environmental Design (LEED) awards in new factory projects. Jerry holds an MBA from Tongji University and a Bachelor of Food Science and Engineering from Jiangnan University.|
|Pei Qinghua has been a Senior Consultant and General Manager at CCi since 2007. He provides training and support to numerous global organizations, including Coca-Cola, DuPont, AkzoNobel, SNOW and Cofco. He has extensive lean manufacturing managerial experience, and was Engineer and Assistant R&D Department Manager at the Chinese Academy of Space Technology for six years.|
This resource has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained herein without obtaining specific professional advice. Competitive Capabilities International (CCi) does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this resource or for any decision based on it.