The Re-Engineering Project In Beverage Industry

The Re-Engineering Project in Beverage Industry

The burning issue

Today, beverage industry has very high competition in global market. Marketing and brand position may be the first thing which a company probably thinks that they are the most important but the fact is supply chain management (SCM) can strongly indicate the company successful as well. Effective SCM is the most favorable key in the market strategy because SCM drives every activity of a firm to the end customer. Without effective SCM, company will probably be eliminated, Bommer and O’Neil (2001, pp11-12). In the last decade, Enterprise resource planning (ERP) deserves as a key of supply chain achievement and it is the reason that many beverage manufacturers try to replace their old style supply chain management with a brand new ERP system to outperform their competitors. The report will mainly discuss about case study of Red bull China and several beverage manufacturers.

The overview

A commercial drink such as beer, soft drink, energy drink or juice is usually contained in a can or bottle, it can be a small or large packaging depends on the market approach. A beverage manufacturer normally does not sell its product directly to the end customer but prefer to distribute product through retailers. As a result, retailer satisfaction is considered to the most important of beverage industry. In recent years, beverage industry is been under pressure from retailer to reduce price and also from new born beverage firms (Bommer and O’Neil, 2001, p18). Nevertheless, because of the high competition, manufacturers are not able to reduce Marketing cost. Therefore, the answer seems to be efficiency of SCM to satisfy retailer and customer, manufacturer must improve its SCM process. Several concepts are involved in SCM improvement in recent decades such as “lean production” is for reducing waste in manufactory and “just-in-time” delivery is to satisfy their retailer. However, no matter what concept that company desires, it need to be conducted by “IT”, or it can rephrase as business process re-engineering or ERP. An ERP system mission itself is to integrate and analyze data from various sections such as finance, logistics, inventory, sales, et cetera in an organization (sometimes between organizations). According to Al-Mashari, there are various resources to prepare for implementing ERP system; infrastructure resources planning, local area network, servers, terminal PCs, trainings, human resource planning and education about ERP (2002, pp166-167). As a result, it can be seen that most tasks are about information technology and human resource approach.