HOW COCA-COLA IS DRIVING INNOVATION IN DISTRIBUTION TO SPUR GROWTH
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1 HOW COCA-COLA IS DRIVING INNOVATION IN DISTRIBUTION TO SPUR GROWTH Shawn Hodges Senior Director of Operations & Customer Process Sharon Campbell Director of Solution Delivery
2 Accelerate Growth of Consumer-Centric Brand Portfolio Drive Revenue Growth, Led by Sparkling Strengthen Our System Digitize the System - Click s Reach of Desire Unlock the Power of Our People Making the Right Choices and Investing for Growth
3 Who We Are Coca-Cola Bottling Company Consolidated 4th generation, family operated bottler In business since 1902 Largest independent bottler in the United States Traded on NASDAQ under the symbol COKE In 1902 In 1996 J.B. Harrison launched North Carolina s first Coca-Cola bottling company, selling Coca-Cola in Greensboro, NC. Board Chairman J. Frank Harrison, III, great-grandson of the company s founder, becomes CEO. 3
4 What We Are About CHARITABLE DONATIONS YOUTH PROGRAMS HOUSING VOLUNTEERING FUNDRAISING YEAR-ROUND SUPPORT MYCOKE REWARDS HUMANITARIAN 4
5
6 SERVANT LEADERS MATRIX COMMUNITIES FAMILIES TEAMMATES FOCUS Mind Body SPIRIT
7 Social Responsibility CCBCC IS SERIOUS ABOUT SUSTAINABILITY Water Conservation Protecting Wildlife Diversity Recycle & Win Program Reduced Landfill Disposals Reduced Energy Usage by 2,400 tons since 2010 by 6% in the last year (enough to power more than 1,600 homes) We not only reduce water use in our plants but we recycle wastewater from our manufacturing process Since 2008, Coca-Cola Bottling Co. Consolidated has partnered with the World Wildlife Fund (WWF) to promote sustainable water policies Encourages consumers to recycle via partnerships with city and county governments, local media and local retailers In 2016 we served more than 50,000 people through 380 local organizations 1. Quantifying Replenish Benefits in Community Water Partnership Projects-LimnoTech, April 15,
8 Transformation BEFORE NOW 270M+ Cases 350M+ Cases 8
9 Managing Growth TEAMMATES 6,500 15,800 CONSUMERS 21M 50M STATES Since the first announcement of our territory expansion in 2013, we have nearly doubled our net sales to over $3 billion in 2016, the highest in our history. MANUFACTURING CENTERS TODAY 9
10 What is DSD/ Merchandising? DSD (Direct Store Delivery) Product is ordered, delivered, stocked and billed directly to a retail outlet via a supplier After delivery, the product is Owned by the store on a pseudo- consignment The Supplier owns responsibility for all in store product movement, along with damage, out of date, and overstock product Merchandising Replenishment of shelf and display stock from back room inventory Includes building shoppable displays, proper back room management 10
11 Challenges SKU Proliferation puts pressure on shelf holding capacities Increasing points of interruption impact merchandising productivity SKU Variety impacts backroom time and holding performance Ordering becomes more complex, must be more precise Store expectations for in stock have increased Store expectations for Ready for Business times have increased 11
12 Problem We Needed to Solve Large (2K) Unsupervised Work Force No visibility to: Time in Outlet Length of Day Payroll Accuracy Manual Mileage Reimbursement Route Plan Adherence 12
13 Our Solution Implemented Pega mobile merchandising solution Put Samsung devices in the hands of every full time and part time merchandiser Standardized process through technology Improved oversight of remote workforce 13
14 Pega s Solution Provides Clock In/Out Features Reporting Based on Geocode Reporting time in Outlet GeoCode Based Time in Outlet Automated Mileage Reimbursement Based on actual GPS Travel Data Ability to Manage Labor Costs Based off of customer level productivity data Working toward the correct staffing levels Working towards the correct customer service levels Focus in on Training Opportunities Using merchandiser efficiency metrics 14
15 Ancillary Benefits Ability to Analyze Service Time Cost to Serve Models Customer Scorecards Address Customer Concerns with Data Cost savings over Teletime Cost savings with more accurate mileage reporting over self-reported mileage Ability to Push Safety Messages, etc. Ability to Create Simple Surveys Historical data archiving Efficiency and productivity reporting Incident investigating 15
16 Business Results Mileage Reimbursements Significant reduction in reimbursable mileage going from self-reported to device reported Unproductive Visits Since 2011 unproductive visits have dropped 5% This reduction translates into over 41,000 less unproductive visits for a $500,000 annual savings Visit Reduction Decisions on how often and when to visit/revisit accounts can be made based off of the actual historical productivity data Improved customer service using fact-based information on store needs/expectations Since 2011 we have removed over 3500 weekly revisits from the system, a 27% reduction for a $6 million annual savings 16
17 Business Results Supervisor Focus Supervisors can efficiently check dashboards to make sure that all of their customers are being properly serviced by merchandisers. Supervisors can shift their focus from daily administrative tasks, such as managing the whereabouts of merchandisers, to coaching and training them Merchandiser Efficiency Able to quantify merchandiser efficiency and target training opportunities more easily In 2016 we logged 1,397,255 service hours. The improved CPH (Case Per Hour) efficiency, 1.7 CPH increase between 2011 and 2016, equates to 2,433,803 more cases pulled in
18 Future Vision DYNAMIC TARGETED PLANOSHOW Right account at the right time Do the right things at the account at the right time Provides the merchandiser exactly what each account should look like based off of location Allows us to allocate labor to the right place at the right time Will allow the merchandiser to perform only value added work, minimizing time inside of the account Necessary for dynamic routing 18
19 Business and IT Partnership Yesterday IT is the organization of NO Doing our own thing IT is too busy IT is too slow IT doesn t get it Business doesn t appreciate how hard IT really is Today IT is the organization of enabling options IT will prioritize highest value IT will always make time to advise IT will adjust supply for value-add initiatives IT takes time to understand the why They don t nor do they care 19
20 Evolution of Business and IT Partnership Conversation Change From functional silos to crossenterprise collaboration Utilize business unit understanding to prioritize future investments in technology solutions Process Change From an IT supply push model to an IT demand pull model Value-driven for IT supply to respond to IT demand Co-develop new solutions as a collaborative team Mindset Change From we are the developers and providers of technology and we will decide what you need To you (business) are the consumers and users of technology and we need to work together to figure out how to get you what you need This is a journey NOT a destination 20
21 Alignment / Maturity Model FUSION ALIGNMENT COLLABORATION RECOGNITION ISLANDS ALIGNMENT GAP
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