Technology: Bubbling Under Pressure

Jan. 1, 2009
Software helps a Coca-Cola bottler manage China’s explosive consumer demand.

Swire Beverages is a holding company of Swire Coca-Cola HK Limited, the franchise bottler for all brands of Coca-Cola Co. in Hong Kong. Swire’s brand portfolio consists of carbonated and noncarbonated beverages, including Coca-Cola, Coke Light, Sprite, Sprite Light, Fanta, Schweppes and Hi-C, as well as Nestea, Nescafe and Powerade sports drinks.

The company’s seven bottling facilities, 75 production lines and 200 distribution centers serve five export markets and juggle more than 280 SKUs. Swire provides more than 42 million cases of beverages annually to seven million people in Hong Kong alone.

Managing Complexity
Swire’s network of bottling production facilities had been using a manual system that was reaching a breaking point as the beverage market in China accelerated. The company needed a better way to manage forecasted growth for its seven bottling plants in central, eastern and southern China.

It also had to deal with a supply chain that was becoming more complex by the day. Each of the plants operates relatively independently, but each facility does not manufacture all SKUs that it sells. As a result, additional plants were needed to alleviate capacity restraints.

Swire was also faced with more demanding customer-service levels, and its advanced planning and scheduling (APS) center was tapped to provide planning support for a new supply chain joint venture that services all of China’s bottlers. Forecasting difficulties were compounded by the seasonality of the beverage industry.

“Initially, the number-one challenge was simply how Swire would cope with the forecasted growth of the business and increasing complexity,” says Maggie Huang, Swire’s APS center manager of supply chain. “Factor in Swire’s joint venture with Coca-Cola Consolidated, as well as other industry-related opportunities, and we realized the need to implement strategic solutions for Swire to maintain its industry position and to have one synchronized view of demand integrated into all of Swire’s manufacturing, bottling, planning and execution activities.”

Adding Effervescence
Swire called on JDA Software to synchronize its supply chain operations with real-time consumer demand. The company selected JDA Demand, JDA Collaborate, JDA Strategy, JDA Sequencing, JDA Fulfillment and JDA Monitor.

JDA Demand helps Swire predict customer demand for forecasting, and JDA Collaborate allows the bottling plants to share information over the Internet. JDA Strategy helps plan capacity and sourcing based on costs and constraints across Swire’s network.

“JDA Demand enables us to set up the forecasting structure in a threedimensional hierarchy–by location, by brand and by customer–for all seven of Swire’s bottling facilities across China,” adds Huang.

JDA Sequencing was implemented at the plant level to optimize materials and resource capacities across each stage of the bottling process, improve plant throughput by reducing changeovers and perfect the product mix of individual bottling lines. JDA Fulfillment helps position the right inventory in the right distribution centers. Lastly, JDA Monitor allows Swire managers to receive early warnings of potential problems.

According to Swire, the resulting synchronized view of demand has helped it evolve into a more consumer-driven enterprise. “JDA Sequencing enables Swire to generate an optimized, feasible manufacturing schedule down to the minute,” explains Huang. “Its optimization engine considers unique product attributes, changeovers, complex bottling constraints and policies to make sure service levels are met while plant utilization is high. It also provides an interactive schedule board that allows users to easily make adjustments to the schedule during the day.”

Quenching Challenges
Swire estimates it achieved 12% improvement in forecast accuracy; 12% increase in production-line efficiency, despite tripling its SKUs; and 75% decrease in out-of-stock rate. “JDA’s understanding of Swire’s business, combined with its expertise and realistic can-do approach, have effectively contributed to the successful implementation and real results achieved,” says Huang.

From strategy to operations, Swire synchronized its supply chain. And, that allowed it to overcome operational challenges and maintain a competitive advantage in China’s booming beverage market.

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