Supply chain management analyze coca cola vietnam’s supply chainmanagement

Trang 1 THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION & TRAININGHO CHI MINH UNIVERSITY OF BANKING SUPPLY CHAIN MANAGEMENTANALYZE COCA COLA VIETNAM’S SUPPLY CHAINMANAGEMENTGROUP 8

THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION & TRAINING

HO CHI MINH UNIVERSITY OF BANKING

  

SUPPLY CHAIN MANAGEMENT

ANALYZE COCA COLA VIETNAM’S SUPPLY CHAIN

MANAGEMENT GROUP 8

Van Dinh Loi 050609212027

Nguyen Minh Phi 050609211108

Tran Nhu Quynh 050609211229

Vu Xuan Son 050609212174

Table of Contents

PART 1: Overview of Coca Cola Vietnam 1

1.1 Overview of global Coca Cola 1

1.2 Introduction of Coca Cola Vietnam 1

1.2.1 General information 1

1.2.2 Scale and position in the market 1

1.2.3 Production system/line 1

1.2.4 Opportunities and challenges 1

2 Theoretical basis 1

2.1 Supply chain and supply chain management in manufacturing operations 1

2.2 How to choose right suppliers and distributors 1

2.2.1 Criteria for selection 1

2.2.2 Contract negotiation process 1

PART 3: COCA COLA Vietnam product supply chain management activities according to the SCOR framework 1

3.1 Plan 1

3.1.1 Demand Forecasting 1

3.1.2 Identifying and Analyzing the Most Prioritized Competitive Factors in COCA COLA Vietnam's OSCM Strategy 2

3.1.3 Product Pricing 3

3.1.4 Warehouse Management 3

3.2 Source of SCORE of COCA COLA Vietnam (Supplier) 3

3.2.1 Network of suppliers 3

3.2.2 The purchasing process of Coca-Cola Vietnam 7

3.2.3 Supplier selection criteria 8

3.2.4 Method of selecting and evaluating suppliers 9

3.2.5 Supplier management policy 10

3.2.6 Contract negotiation 11

3.3 Make (Mục 3.2.) + phần mà thầy nói (manufacturer) 15

3.2.1 Structure and Characteristics 15

3.2.2 Production process 17

3.4 Delivery 18

PART 4: EVALUATION AND RECOMMENDATION 18

4.1 General assessment of the Coca-Cola Vietnam supply chain model 18

4.1.1 Notable Actions of Coca-Cola Vietnam in Supply Chain Management 18

4.1.2 Business performance results 19

4.1.3 Limitations in the Supply Chain Management of Coca-Cola Vietnam 20

4.2 Recommendation 22

CONCLUSION 24

REFERENCES 25

OPENING STATEMENT

Choosing Coca Cola Vietnam as the main focus for a presentation on supplychain can be a strategic decision for several reasons:

 Market Leadership: Coca Cola is a leading brand in the beverage industry

worldwide, and focusing on Coca Cola Vietnam allows you to explore thesupply chain strategies of a major player in a specific market This can providevaluable insights into successful supply chain management practices

 Global Perspective: Coca Cola is a global brand, and studying its supply chain

in Vietnam allows you to explore how a multinational company adapts itssupply chain strategies to local market conditions This can be insightful forunderstanding the challenges and opportunities of operating in a diverse globalmarket

 Competition Dynamics: Coca Cola faces competition from other beverage

products, such as Pepsi, in Vietnam Analyzing how Coca Cola navigates thiscompetitive landscape through its supply chain strategies can provide lessonsand best practices applicable to similar industries

 Innovation and Sustainability: Coca Cola has a history of innovation in its

packaging, including the iconic Coca Cola bottle Exploring how the companyincorporates sustainability practices and innovation into its supply chainoperations can provide relevant and timely content for a presentation

 Consumer Insights: By focusing on Coca Cola Vietnam, you can delve into

consumer preferences and behavior in the Vietnamese market Thisunderstanding can be crucial for shaping supply chain strategies that align withthe demands and expectations of local consumers

In summary, choosing Coca Cola Vietnam as the main focus for a supply chainpresentation offers a combination of global insights from a well-established brand and

a specific understanding of how these strategies are applied in the Vietnamese market

PART 1: Overview of Coca Cola Vietnam

1.1 Overview of global Coca Cola

The Coca-Cola Company, headquartered in Atlanta, Georgia, has witnessed along and positive journey since its establishment in Wilmington, Delaware As one ofthe leading players in the beverage industry, Coca-Cola is not only a manufacturer butalso a pioneer in retail and promotion of non-alcoholic beverages and syrups acrossthe United States

The story begins in the early days of the 19th century when pharmacist JohnStith Pemberton created a unique formula in Columbus, Georgia, in 1886 Thisproduct, a syrup, was tested for sale at Jacob's Pharmacy for 5 cents, transformed into

an effervescent soda drink when combined with carbonated water This innovative andflavorful idea became the foundation for one of the world's most famous brands.Pemberton's partner, Frank M Robinson, made a significant contribution to namingthe new product The suggestion to use the two "C"s in the brand created an appealingand memorable icon Thus, the brand name Coca-Cola was born and became anintegral part of global beverage culture

Although Pemberton did not realize the potential of his invention, Asa G.Candler, who purchased the business from him in 1888, recognized the tremendousvalue of Coca-Cola Candler not only took over but also founded The Coca-ColaCompany in 1892 and initiated a strong franchised distribution system from 1889.With the acquisition of Minute Maid in 1990, Coca-Cola continued to expand itsbrand portfolio and reshape the beverage industry From Pemberton's initialinnovation to the present day, Coca-Cola is not only a brand but also a symbol ofinnovation and collaboration in the global beverage industry

1.2 Introduction of Coca Cola Vietnam

1.2.1 General information

In Vietnam, Coca-Cola's full name is Coca-Cola Vietnam Beverage CompanyLimited Coca-Cola was first introduced in 1960, but in January 2001, Coca-Cola

Vietnam Beverage Company Limited was officially established after merging 3 Cola businesses in 3 regions of the North, Central and South to become one unifiedcompany.

Cola is one of the most famous international brands in Vietnam Cola Vietnam currently has factories located in Ho Chi Minh City, Da Nang andHanoi, creating about 4,000 direct jobs as well as indirectly creating 6 to 10 timesmore jobs from activities in its supply chain With the orientation of becoming acomprehensive, consumer-oriented beverage company, the company constantlyimproves and provides a variety of quality beverages, including low-sugar and sugar-free product lines, while diversifying designs and expanding business coverageeverywhere

Coca-Some milestones of Coca-Cola Vietnam:

 In August 1995, Coca-Cola Indochina Pte Ltd (CCIL) entered into a jointventure with Vinafimex, a state-owned enterprise under the Ministry ofAgriculture and Rural Development, to form Coca-Cola Chuong ChuongCarbonated Drinks Company Duong in Ho Chi Minh City

 January 1998 CCIL continued its joint venture with Da Nang BeverageCompany, forming Coca-Cola Non Nuoc Carbonated Drinks CompanyLimited

 In October 1998, the Government approved a joint venture in the South toconvert to a 100% foreign-owned company

 In March 1999, the Government allowed Coca-Cola Indochina to buy back allshares in the joint venture in the Central region In August 1999, theGovernment allowed the Coca-Cola Ngoc Hoi joint venture to be convertedinto a 100% foreign-owned enterprise with the name Coca-Cola HanoiBeverage Company

 In January 2001, the Vietnamese Government allowed the merger of 3businesses in the North, Central and South into one Coca-Cola VietnamBeverage Company Limited, with headquarters in Thu Duc, Ho Chi Minh City.Chi Minh and 2 branches in Ha Tay and Da Nang

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 From March 1, 2004: Coca-Cola Vietnam was transferred to Sabco, one of thefamous Coca-Cola Bottling Groups in the world.

 According to statistics, as of 2010, Coca-Cola Vietnam had over 50 distributorswith a network of more than 300,000 agents nationwide and is constantlydeveloping its network to every corner in every region

 In 2019, Coca-Cola Vietnam was recognized as the top 2 sustainablebusinesses in Vietnam by VCCI and the top 1 most popular employer byCareer Builder

1.2.2 Scale and position in the market

In Vietnam, Coca-Cola segments the market according to two combinedcriteria: Geographic and demographic

 Geographical division: Coca-Cola has determined: Demand for carbonated softdrinks is concentrated in large cities - places with high population density andhigh frequency of use Therefore, the company has built manufacturing plants

as well as representative headquarters in the three largest cities in Vietnam(Hanoi, Da Nang, Ho Chi Minh City) and gradually expanded to other urbanareas

 Demographic segmentation: Although Coca-Cola is known as a product foreveryone, every family However, young people - people aged 16 - 30 - are themain market that Coca-Cola wants to target Because young people in this agegroup have characteristics that bring many potential opportunities such as:liking to gather to eat, their love level and frequency of using carbonated softdrinks is higher than the other age groups

1.2.3 Production system/line

a Soda:

Coca-Cola: Needless to say, we know the global popularity of Coca-Colacarbonated drinks - a symbol of soft drinks for hundreds of years Coca-Cola is arefreshing carbonated drink, with a distinctive Cola taste and a touch of caffeine;

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Helps users not only feel refreshed but also make moments of rest and meals moredelicious.

Sprite: Sprite soft drink is also famous and equally popular than Coca-Cola Sprite has

a fresh lemon flavor and refreshing bubbles that help quench thirst immediately.Fanta: Fanta soft drink is a very popular carbonated orange flavored water Fanta withits rich and fresh fruit flavor helps users feel alive and maximize fun moments whenconnecting with friends

b Fruit Juices and Fruit Milk Drinks:

Minute Maid: It is a type of juice made from fresh, clean fruits to createdelicious, nutritious juice Minute Maid Teppy orange juice with real orange cloves inthe product, with Vitamin C, Vitamin E and calcium, supplementing essentialnutrients for the body

Nutriboost: It is a nutritional drink that combines milk and fresh fruit juice, isdelicious, nutritious, and replenishes energy for an effective working day

c Filtered water and Tea:

Dasani: Dasani bottled water products are built on the foundation of providingclean and pure water in an environmentally sustainable way

Aquarius: It is a carbonated mineral water drink with a formula to enhance andsupplement electrolytes and minerals to help rehydrate and remineralize the body,helping to make life more active

Fuze Tea: Fuzetea+ tea's flavor is created from a combination of tea and natural

- healthy ingredients, while also supplementing Vitamin C and essential nutrients forthe body

d Sports Drinks and Energy Drinks:

Thunder: Thunder energy drink has fruity flavor and high caffeine, restoringenergy to help stay alert and focused during a long working day

e Other products:

Schweppes: Schweppes Soda Water, Schweppes Tonic Water, SchweppesGinger Ale, Schweppes Sarsi, Crush Sarsi, Georgia canned coffee, Coca-Cola Energyenergy drink and Samurai energy drink

1.2.4 Opportunities and challenges

Opportunities:

 Large market: According to the General Statistics Office, Vietnam's population

is at 96 million people (2021) with an average age of 32.9 (2019) Thus,Vietnam has a relatively young population, suitable with Coca-Cola's targetmarket

 Abundant human resources with competitive prices

 Stable political environment and policies to attract foreign investment areregularly adjusted in favor of foreign investors

 The infrastructure system is increasingly upgraded: the infrastructure system isrelatively good, especially in big cities, ensuring smooth traffic (road, sea,railway, air)

 Enhance Growth Potential: Vietnam is going through a period of rapideconomic development, opening up growth opportunities for beveragebusinesses like Coca-Cola Rising incomes and lifestyle innovations can creategreater demand for diverse products

 People do not have the habit of regularly consuming carbonated soft drinks

 Distribution System Challenges: Maintaining and expanding an effectivedistribution system can be challenging, especially as markets expand anddemand from multiple geographies needs to be met

 Labor quality is not high: although resources are abundant and people areindustrious and creative, they have not been properly trained, so they cannotfully utilize their abilities

PART 2 Theoretical basis

2.1 Supply chain and supply chain management in manufacturing operations

2.1.1 Definition

a What is a supply chain ?

“A supply chain consists of all stages involved, directly or indirectly, infulfilling a customer request The supply chain not only includes the manufacturer andsuppliers, but also transporters, warehouses, retailers, and customers themselves ” -(Chopra, Sunil, and Peter Meindl, 2003)

“A supply chain is a network of facilities and distribution options that performsthe functions of procurement of materials, transformation of these materials intointermediate and finished products, and the distribution of these finished products tocustomers.” - (Ganeshan, Ram, and Terry P Harrison, 1995)

So we can say, a supply chain is a group of firms that cover all stages, fromsupplying materials to distributing finished products to customers

b What is supply chain management ?

According to Hugos (2006), “supply chain management is the coordination ofproduction, inventory, location, and transportation among the participants in a supplychain to achieve the best mix of responsiveness and efficiency for the market beingserved”

2.1.2 General characteristics of a beverage supply chain

2.1.3 SCOR framework

Supply chain operations reference (SCOR) model is designed to evaluatesupply chain’s effectiveness and efficiency As a framework, SCOR focuses on allcustomer interaction from the moment an order is placed until the invoice is paid.The SCOR model contains five management processes:

 Plan: During this process, we forecast demands, plan ahead product’s price andinventory management for the purpose of balancing the supply and demand andoptimizing resources

 Source: In this process, the company decides what to buy, from whom, at whatprice and quantity… to make sure the company meet the forecast or actualmarket demand.

 Make: At this stage, we define product’s design, production scheduling andproduction models

 Deliver: This refers to managing orders, delivery scheduling and returnprocessing to make sure the company delivers the right products to the rightcustomer at the right time

 Return: This refers to receiving returned products from customers and returningthe faulty productions from suppliers

2.2 How to choose right suppliers and distributors

2.2.1 Criteria for selection

Credibility: The upmost important factor when choosing a supplier is their

credibility and reputation So we need to examine the following information:

 Physical evidence: Do they exist ? What is their address ? How can we contactthem ? Do they have business license ?

 Integrity and credibility: Do they always fulfill customer’s order ? Can webuild long-term relationship ? What do other companies say about them ?

 Legal issues: Do they comply with the law ? Is there anything illegal in theirprevious contracts ?

Quality: The quality of input decides the quality of output, so you must choose

the supplier that can and willing to serve the quality you need Here are the factorsyou need to consider:

 Functionality and features: Does the product/service meet your requirement ?Does it fulfill the the intended purpose ?

 Durability: Is it durable enough to meet your requirement ?

 Order defect rate: Is the rate of getting faulty product acceptable ?

Delivery performance: You need the delivery to be on point so your company

can operate effectively, so you might have to consider these factors:

 Order Fulfillment Cycle Time: Does this align with your company?

 Quality of delivery: Do they always send the right products to their customer ?

Do they always send it on time ? Do they always send the right quantity ?

 Flexibility: The suppliers’s ability to adapt to when their are sudden changes

Price: Price affects your company’s profit so you have to choose the supplier

with the best offer (not the lowest price) You should consider:

 Price reference: Is this supplier selling at a much higher or lower pricecompared to others ? Is it better to buy substitute instead ?

 Price stability: Do they commit to keep the price reasonable in long-term ? Dothey tell you changes in price in advance ?

Customer’s services: You will want to choose a supplier that is willing to help

when your company’s order runs into problems like getting the wrong products,getting the wrong quality or quantity…

Sustainability: Having a long-term relationship with suppliers benefits your

company in many ways, so it is necessary to work with suppliers who have greatsustainability Factors that affects sustainability:

 Environmental sustainability: Policies related to waste management, wastereduction, energy usage…

 Technology: The supplier’s ability to adapt to technology advance

 Financial status: Financial stability is very important for a company to sustain.Companies that are at financial risk or usually get into are not reliable in term

of sustainability

2.2.2 Contract negotiation process

Preperation: Set your goals, build your strategy, understand your strengths

and weaknesses, learn about your partner, prepare alternative solutions…

During the negotiating process:

 Before going to the main points: Start random conversations to break the tension, build trust, show your goodwill, notice your partner’s gestures and attitudes to assess the situation…

 When negotiating about the main points: Clearly express your proposal, listen carefully to your partner, always try to offer a win-win scenario, arrange for

another negotiation or ask for support from a third party if both sides cannot reach an agreement.

PART 3: COCA COLA Vietnam product supply chain management activities according to the SCOR framework

3.1 Plan

3.1.1 Demand Forecasting

Before expanding operations into the Vietnamese market, Coca-Cola focused

on market segments with high demand and dense populations The brand was verystrategic in concentrating on major cities such as Hanoi, Da Nang, and Ho Chi MinhCity After market research, Coca-Cola identified that these cities had a high potentialfor consuming their products In addition to population density as a factor in selectingtarget markets, Coca-Cola Vietnam also emphasized population demographics,particularly young individuals with high product consumption needs Thanks to thisintelligent selection of target markets, Coca-Cola has been able to reach variousmarket segments and meet the diverse needs and preferences of customers Thecompany has built a positive brand image in each market segment, helping to maintainits position as one of the leading beverage brands in Vietnam.About 94% of the globalpopulation recognizes the red and white logo of Coca-Cola, and "Coca-Cola" is thesecond most widely understood word in the United States, following only "OK"(according to Forbes research) When it comes to carbonated beverages, people oftenimmediately think of Coca-Cola Coca-Cola is considered one of the industry leaders.Regarding Coca-Cola's revenue in Vietnam, there has been a consistentincrease, from over 5,000 billion dong in 2014 to nearly 9,300 billion dong in 2019.And according to the business performance report for the first 6 months of 2023,Coca-Cola Vietnam recorded over 5,600 billion dong in revenue, equivalent to morethan 30 billion dong per day

Notably, in recent years, the overall trend in the beverage market has been asignificant decline in carbonated drinks and an increase in the consumption of non-carbonated beverages In Vietnam, many people have been paying attention to

choosing alternative drinks sourced from nature, rich in vitamins and minerals, andwith fewer artificial flavorings and colors Recognizing this trend, Coca-Cola Vietnamhas actively invested in production lines, equipment, and technology to processbeverages that meet consumer preferences.

3.1.2 Identifying and Analyzing the Most Prioritized Competitive Factors in COCA COLA Vietnam's OSCM Strategy

Coca-Cola Vietnam's operational supply chain management (OSCM) strategy

in 2023 is shaped by a multifaceted approach that addresses key competitive factors

A pivotal aspect of this strategy is the emphasis on enhanced supply chain visibility.Through real-time monitoring, data analytics, and advanced reporting capabilities,Coca-Cola Vietnam seeks to attain a comprehensive view of its supply chaindynamics, allowing for proactive decision-making and optimization

In tandem with its commitment to visibility, Coca-Cola Vietnam places astrong emphasis on cost efficiency within its supply chain operations The companydiligently works to optimize costs throughout the entire supply chain, fromprocurement to distribution Initiatives to reduce transportation costs, minimize waste,and streamline production processes underscore Coca-Cola Vietnam's dedication tooperational excellence and competitiveness in the dynamic beverage industrylandscape This dual focus on visibility and cost efficiency forms a cohesivefoundation for the company's OSCM strategy in 2023

warehousing system is also applied with the smart technology to enable automatedexport and import as well as the transport management system integrated with a globalpositioning system to make freight transportation more convenient.

3.2 Source of SCORE of COCA COLA Vietnam (Supplier)

3.2.1 Network of suppliers

Beverage Ingredients:

 Water: water is the most basic raw material for production, usually pure water

(pure water) purified to many different levels depending on technology andwater treatment equipment If not guaranteed, the product will be cloudy,sediment, many microorganisms,

 Flavoring: most soft drinks contain artificial flavorings at varying levels to

create a natural aroma and create a pleasant feeling

 Food grade: is a must for soft drink manufacturers.

 Preservatives: Because soft drinks contain sugar and some nutrients that can

cause spoilage Preservatives will prolong the shelf life of the product Withfood production processes, the amount of preservatives is often low

 CO2-saturated water: Coca Cola soft drink is a carbonated drink, meaning it

contains CO2 The CO2 contained in Coca Cola is the factor that creates theproduct's characteristics, not only affecting the value sensory experience butalso contributes to increasing their biological durability

These ingredients are either produced directly by Coca-Cola or sourced from thecompany's headquarters in the United States to create distinctive characteristics for itsproducts Materials such as CO2, food coloring, phosphoric acid, and caffeine aresourced externally from local suppliers However, to ensure competitiveness andpricing confidentiality for its brand, Coca-Cola does not publicly disclose itssuppliers

 Refined sugar: Extracted from cane sugar provided by KCP Vietnam Industry

Company Limited The KCP Sugar Plant, under KCP Vietnam IndustrialCompany Limited, originated from the well-established KCP group in India In

Vietnam, KCP Industrial Company Limited is a reputable and influentialenterprise in the sugarcane industry, making significant contributions to itsdevelopment With high-quality and stable products, KCP's sugar plants havebecome traditional suppliers to domestic and internationally renownedcorporations in the beverage and food processing industry in the Vietnamesemarket, with Coca-Cola being a prominent customer KCP's premium refinedsugar is registered with the best standards among sugar types in Vietnam,meeting technical requirements and confirmed by laboratories both locally andinternationally KCP Vietnam Industrial Company Limited is recognized as aleading enterprise in the Vietnamese sugarcane industry in terms of quantityand quality, reputation, efficiency in production and business operations,receiving the "National Quality Gold Award" in 2018 The information aboveindicates that Coca-Cola's chosen sugar supplier is a top, highly reputableprovider in this industry Coca-Cola is the primary consumer market for KCP'spremium refined sugar, along with Vinamilk, which together capture more than60% of the market for this product The stable development of KCP and thehigh quality of the raw materials have positioned this company as a key partnerfor Coca-Cola."

 Coca leaves and cola seeds: The main original ingredients of Coca Cola syrup

are cola seeds (contains a lot of caffeine) and coca leaves to extract intocaffeine, the main ingredient in the product provided by Stepan Company,Illinois, United States Stepan is a leading manufacturer of industrial chemicalsand solvents widely used in various industries Stepan is a top producer ofsurfactants, a key component in household and industrial cleaning chemicals,

as well as agricultural and oilfield solutions The company operates a modernnetwork of manufacturing facilities in North America, South America, Europe,and Asia With an abundant supply of raw materials by Stepan Company, CocaCola Company extracts raw materials and then provides Coca Cola VietnamCompany in syrup form to prepare finished products according to Coca Cola'ssecret formula

 Other ingredients: Samurai DEFGH powder, Samurai IA powder, sunfill lime

powder and sunfill orange powder Some chemicals are: tricalcium phosphate,xanthan gum, mono calcium phosphate chemicals

Coca Cola, the world's best-selling soft drink, is a type of water that previouslycontained cocaine and is still being reduced to enhance its flavor with a non-addictivesubstance, caffeine, extracted from Coca leaves used to produce cocaine) Forthousands of years, in the high Andes mountains of the West Coast of the SouthAmerican continent, spanning across 7 countries: Argentina, Bolivia, Chile,Colombia, Ecuador, Peru and Venezuela, coca leaves have been used by people as anherbal tea Because Coca leaves are actually rich in essential nutrients that helpsupport the respiratory and digestive systems It is considered a stimulant and a naturalpain reliever According to the traditional experience of indigenous people and manyscientific studies, it has been confirmed that in its natural form, coca leaves arecompletely safe and non-addictive, but to create cocaine, an addictive substance fromCoca leaves, it is necessary to go through a process The processing process is verycomplicated and requires the use of toxic chemical ingredients

Packaging provided:

 Packaging: Regarding bottle packaging, the main supplier for Coca-Cola is

Dynaplast Packaging LLC, a part of the Dynaplast Packaging groupheadquartered in Indonesia Dynaplast Packaging is one of the largest rigidplastic packaging manufacturers in Southeast Asia, supplying a diverse range

of customers and industries with 34 manufacturing plants across Indonesia,Thailand, Malaysia, China, and Vietnam In Vietnam alone, there are 7 plantsstrategically located across the country for convenient transportation, ensuringthe fastest product delivery to customers Dynaplast has its own molddevelopment center and headquarters in Indonesia, allowing for the design anddevelopment of molds according to customer needs, accommodating varyingcapacities from small to large orders The company is characterized byadvanced technology, a skilled workforce, and high product quality InVietnam, alongside Coca-Cola, Dynaplast Packaging has been chosen as asupply partner for other major brands such as Unilever, P&G, Phillips, Johnson

& Johnson, Astra, Honda Motor, Heineken, Dutch Lady VN, Masan, amongothers, and is highly regarded in the industry With continuous efforts toimprove packaging design, it becomes more beautiful and more convenient tobring customers a new, unique, happy and optimistic feeling They alsointroduce special bottles and cans to mark special days and events.

 Carton Packaging: This company provides Coca-Cola with its main product,

premium paperboard cartons for storage and domestic consumption of Cola beverages in Vietnam It is a Vietnamese enterprise, part of the Dong NaiFood Industry Corporation Bien Hoa Packaging Joint Stock Company, underthe Sovi brand, is a leading and reputable brand in the packaging supplyindustry, with over 40 years of experience, annual high growth rates, moderntechnology, and numerous prestigious awards Currently, the company hasmore than 150 customers, including large corporations and multinationalcompanies such as Unilever Vietnam, Kinh Do, Castrol Vietnam, LG Vietnam,Pepsi, and Coca-Cola Paper used to package products is printed with manycolorful images and is flexible in innovating designs through eye-catching,vivid images

Coca-Coca-Cola Vietnam has established cooperation with more than 300 suppliers acrossthe country Each supplier for Coca Cola Vietnam is carefully selected based on manyimportant criteria such as product quality, company operating procedures, financialsituation and customer reviews Among small suppliers, the supplier company thatcannot meet the requirements of Coca-Cola Vietnam will be quickly eliminated andreplaced with another reserve supplier Since then, Coca-Cola has built a large andquality supplier network, ensuring adequate and timely supply of raw materials to thecompany during the production of beverage products

As a result, localizing over 70% of Coca-Cola's raw materials can significantly reduceinternational freight logistics costs Coca-Cola will also benefit by minimizing waitingtimes, helping cut associated warehousing costs as materials can be purchased on-demand Additionally, shorter transportation routes reduce the risk of shipment delaysdue to weather factors, and the likelihood of delays caused by political differences is

almost negligible Coca-Cola has the opportunity to visually inspect products moreeffectively through surveys conducted at supplier facilities.

3.2.2 The purchasing process of Coca-Cola Vietnam

In Vietnam, Coca-Cola has been implementing a traditional procurementprocess to ensure a prompt, sufficient, timely supply of raw materials and strictinternal control The process applied by Coca-Cola consists of the following 5 steps:

 Step 1: Determine the company's needs Coca-Cola forecasts the demand forraw materials in the upcoming period through qualitative and quantitativemethods to determine the required supply for the next production cycle

 Step 2: Identify and select suppliers Coca-Cola Vietnam carefully andthoroughly selects suppliers based on various criteria: the quality of rawmaterials, the company's operating methods, reasonable prices, promptdelivery, customer service, the company's status, customer satisfaction, etc.Companies that meet Coca-Cola Vietnam's supplier selection criteria undergotraining and deep consultation from the company to ensure that all members inthe supply chain align in terms of quality and production volume

 Step 3: Place an order At this stage, Coca-Cola plans the order placementbased on agreements with suppliers regarding the quantity, price of goods, anddelivery time and location

 Step 4: Receive and pay Based on the terms in the contract and relateddocumentation, the Production Department will compile a payment file

 Step 5: Check and store After receiving the goods, the company checks thequality and quantity of the raw materials If the goods meet the standards, theyare stored in the warehouse; otherwise, defective goods are returned to thesupplier

3.2.3 Supplier selection criteria

To choose the most suitable supplier for producing the best product, everycompany needs to establish specific criteria to evaluate and decide on the selection ofthe best supplier For Coca Cola Vietnam, the company has its own set of criteria, and