Coca-Cola moves to tighten control on supply chain
Coca-Cola will attempt to split its operations in an effort to better control its distribution network.
The global soft drink company announced this week that it will split into three organizations: Coca-Cola America, Coca-Cola International and Bottling International Group. The move is expected to help the firm control costs associated with its international distribution by giving each region more control of transportation management.
"By consolidating leadership of our global operations under two large, but similar sized geographic regions and BIG, we will streamline reporting lines, intensify our focus on key markets and create a structure that leverages synergies and gives us flexibility to strategically adjust our business within those geographies in the future," chairman and chief executive Muhtar Kent said.
Coca-Cola has already started to reorganize some of its international operations. The company recently told employees at its Lisburn, Ireland, bottling plant that it is seeking to outsource distribution in Northern Ireland to another company, the BBC reported.
Additional moves are to be expected as the company attempts to reduce transportation and order fulfillment costs. Coca-Cola's earnings fell slightly during the second quarter, despite higher sales, because of additional expenses. Reducing costs in its supply chain as a result of the reorganizing could help the firm boost its outlook.
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