THE COCA-COLA COMPANY

THE COCA-COLA COMPANY TRANSFORMS ITS GLOBAL SUPPLY CHAIN WITH CONNECTED LEARNING We are changing the way our industry builds talent. -Scott Figura, Global Director of Productivity and Operational Excellence at The Cola-Cola Company CHALLENGE Coca-Cola s new CEO challenged the company to double the business in ten years without doubling infrastructure or costs. This aggressive goal came at a time when Coke s supply chain was grappling with a growing global challenge: access to water. These two urgent drivers made revamping Coke s supply chain management mindset a mission-critical priority. ACTION To migrate Coca-Cola s supply chain mindset, Scott Figura, Global Director of Productivity & Operational Excellence, developed a residential executive education program for top supply chain leaders with Georgia Tech s Scheller College of Business. But Coke also needed to train over 8,000 supply chain managers and front-line employees across the globe. To reach these leaders, Figura invested in a virtual development solution rooted in connected learning an expert-led virtual learning experience that is tied to relevant business challenges, integrated into real work, and engineers collaborative problem solving by groups of learners. In Coke s case, virtual teams of leaders worked together on real supply-chain improvement projects, supported by frameworks and tools delivered online by subject matter experts and facilitators. RESULT Coca-Cola estimates that the projects undertaken as part of the connected learning program have identified in excess of $25M in cost avoidance and productivity enhancements, a return of roughly 15-to-1. The program received a rating of 4.54 out of 5 from participants and garnered a 90% completion rate. Coke now ranks #9 in Gartner s Supply Chain Top 25 ratings, with the company s investment in supply chain leadership cited as a key factor in its success. 2014 CUX Inc 1

Coke s achievements are also reflected in the 2013 Gartner Supply Chain Top 25 ratings. Coke now ranks at #9 worldwide, and the report calls out Coke s investment in its supply chain leadership and university partnership model as a critical factor in its success. Vision, supply chain leaders need to think broadly about end-to-end management of the supply chain. According to Scott Figura, Coca-Cola s Global Director of Productivity & Operational Excellence, We needed strong leaders, operational excellence, capable people, and an understanding of a holistic supply chain to build our system capability. When Muhtar Kent became the CEO of one of the world s biggest companies Coca-Cola in 2008, he set a goal that he later described to the Harvard Business Review as not for the fainthearted. Kent s plan, 2020 Vision, called for the organization to double its business in ten years without doubling infrastructure or costs. In the 2011 HBR interview, Shaking Things Up at Coca-Cola, Kent said, I felt that we needed a vision, a shared picture of success both for us and for our bottling partners. It was a daunting prospect. Coke is one of the world s largest employers, encompassing a widely distributed network of supply, production, bottling and distribution facilities. Building a better supply chain meant harnessing and aligning the leadership of a vast and diverse international workforce. Figura and Coke s learning organization realized they needed to redefine how the company developed supply chain talent. Although it had long focused on building supply chain excellence in its managers, the company needed to emphasize strategic thinking, leadership and network performance rather than task-level and individual performance. 10 YEARS without doubling infrastructure or cost Imperatives of the 2020 Vision were to support growth, protect Coke s brands, and ensure sustainability, both commercial and environmental. Revamping the supply chain was critical to the success of each priority. And Coke s supply chain organization faced an additional challenge. As the maker of products for which water is the main ingredient, Coke is confronting the fact that water is becoming scarcer around the world due to population growth and climate change. Beyond water-asingredient, volatility of water availability creates other problems as well. Coke cites the threat of drought and flooding on the company s supply of sugar cane and sugar beets, as well as citrus for its fruit juices. To support the emphasis on commercial and environmental sustainability in 2020 Complicating the matter further, a large chunk of Coke s supply chain workforce will be retirement-eligible in the next five to ten years and in undeveloped markets the company needed to develop a base of talent for the first time. We didn t have the core foundation of knowledge that we needed to drive our business forward, noted Figura, so we had to keep pace to replace existing talent and leadership; but in emerging and growth areas, we had to build new talent to support our expanding business needs. Adding to the pressure, this new supply chain mindset had to be realized in time to power the performance expectations of the 2020 Vision. THE CHALLENGE FOR THE LEARNING ORGANIZATION: CASCADING TRAINING DEEP INTO THE EXTENDED SUPPLY CHAIN Figura turned to Coke s corporate university and to Soumen Ghosh, the academic faculty director at Georgia Tech s Scheller College of Business, Coke s longtime university partner. Ghosh helped Coke develop face-to-face training for the company s top 200 leaders, a custom- 2

designed executive education program to develop the attributes needed to take on the challenges of the 2020 Vision. Georgia Tech is known for its supply chain expertise, and best-in-class academic thinkers and subject-matter experts partnered with key supply chain leaders from across Coke s system to design the right content. 8,000 supply chain managers & front-line employees virtual learning experience that is tied to relevant business challenges, integrated into real work, and engineers collaborative problem solving by groups of learners. In Coca-Cola s case, a connected learning approach had two key benefits over standard e-learning. First, connected learning orchestrated collaboration among participants. This was important because the terrain is complex and requires collective problem solving and because cross-silo collaboration is one of the key competencies supply chain leaders need to learn in order to capture efficiencies across the system. Second, learners remained in their seats. This was not only important for time and cost reasons, but also because leaders worked on real projects together in real time, supported by development throughout the experience. Everyone was comfortable with the custom-designed face-to-face content, but the challenge became cascading the training throughout the Coca-Cola supply, bottling and distribution system. Cost aside, a residential program would be unable to touch all the people necessary to transform the supply chain mindset in the required timeframe. Figura commented, The top-level program was more of a traditional face to face an immersion program. We could do that with a small group of leaders but we couldn t do that as we moved down in the organization. We had geographic constraints, language constraints. We had to figure out a creative way to reach a greater scale across all five geographies that we operate in. Coke confronted the logistics of cascading to more than 8,000 supply chain managers and an even bigger population of front-line employees scattered across the globe. How could the company extend the training to the next level of the organization and its partners? And how could they do it in a way that encouraged socialization of material in groups as well as collaborative development of holistic solutions rather than just internalization of the content? BUILDING A LEADERSHIP CULTURE THROUGH CONNECTED LEARNING Coke found their solution in an approach called connected learning an expert-led In short, rather than giving a few leaders a one-time injection of knowledge, a connected learning approach would help build a lasting culture of leadership for the organization. A key benefit is that this program complements our current strategy, said Figura. It s a means of activating the right leadership mindset and connecting people to collaborate and meet goals that they couldn t meet as effectively other ways. It s a source of knowledge and inspiration for employees to take their capabilities and perspectives to new heights. We had geographic constraints, language constraints. We had to figure out a creative way to reach a greater scale across all five geographies that we operate in. Participants in the program experienced a highly produced blended learning approach engineered to foster engagement. Guided, paced cohorts engaged with virtual content structured specifically to foster collaboration and learning on common business challenges. Teams were challenged to learn new frameworks focused on developing endto-end solutions to difficult supply chain problems. Besides navigating a series of interactive virtual coursework, participants learned from Coca-Cola leaders and Georgia Tech faculty, discussed successful practices and ideas for performance 3

improvement, reflected on transferring key ideas to their work, and developed plans that applied new knowledge and skills. Most importantly, cohorts were grouped strategically to allow collaboration both vertically along the supply chain and horizontally to gain a global perspective. The formal development program was situated within a Virtual Learning Community (VLC) platform where participants can share ideas in between formal development experiences. One of the most important features of the program is an application project. Each cohort was split into smaller teams who were tasked with defining a problem, proposing a solution, testing their hypothesis, and then presenting the results and the final recommendation. The project needed to address performance improvements around quality, customer service or cost. This took place throughout the program, both in between and during the formal coursework. One example of a project pertained to basic assumptions in the bottling process. A group identified a time-consuming activity that necessitated significant downtime. It was assumed that this step saved time later in the process. The team experimented to validate whether it actually saved time and found that the process was not efficient enough to justify itself. The blended design of the program became important for what happened next. The team shared this insight with other learners who were able to test and verify the same observation in their production lines, creating an immediate impact in productivity. That simple step may not have happened if the program did not provide the opportunity for sustained collaboration only possible virtually. ROLLING OUT THE PROGRAM AND MEASURING RESULTS: A 15-TO-1 RETURN ON INVESTMENT Although it is still scaling up, Coke s new global, scalable supply chain leadership development program is already very successful by several measures. We re really encouraged by what we re seeing, says Figura. With 304 leaders and 224 managers having completed the program, Figura reports that projects undertaken as part of the connected learning program have identified in excess of $25M in cost avoidance and productivity enhancements. Eventually the middle management program will reach Coke s approximately 8,000 $99M in cost avoidance & productivity enhancements operational leaders at their 1,000 facilities around the world. The application projects have generated an average 15-to-1 return. It s a simple calculation between the investment of the tuition, plus putting that student in the class, and then the financial return that they achieve coming out of the completion of the project. We needed strong leaders, operational excellence, capable people, and an understanding of a holistic supply chain to build our system capability. Figura particularly values the communities of practice that he has seen spring up around the program so far in the informal Virtual Learning Community (VLC) part of the platform. New connections have been fostered among supply chain leaders, creating valuable bridges across Coke s global supply chain network. One of the things we really wanted to accomplish through this program was to connect people with content, and people with people, notes Figura. One of the consequences of that approach has really been sharing the diversity of thought. We have people from different organizations, different geographies, sharing their experiences and practices and developing new ideas and broadening people s vision, which is really exciting because it brings up the entire organization to that desired level of performance. He says he also appreciates the broad accessibility of the connected learning product, at work, at home, on iphone, ipad. From a participant perspective, the experience is engaging. Ninety percent completion rates and an average evaluation score of 4.54 on a 5-point scale suggest 4

that the program is creating engagement in addition to business outcomes. Coke s commitment to supply chain leadership has been recognized in Gartner s 2013 Supply Chain Top 25 ratings. Coke now ranks at #9 worldwide, and the report calls out Coke s investment in its supply chain leadership and university partnership model as a critical factor in its success. Additionally, Coke was recently named one of ELearning! Magazine s Top 100 on the strength of its supply chain management program. At the beginning of our journey, we ve already hit a global home run. REFERENCES Ignatius, A. Shaking Things Up at Coca-Cola: An Interview with Muhtar Kent, Harvard Business Review, 2011. Davenport, C. Industry awakens to threat of climate change, New York Times, January 23, 2014. The Gartner Supply Chain Top 25 for 2013. <https://www.gartner.com/doc/2493115/ gartner-supply-chain-top-> At the beginning of our journey, we ve already hit a global home run, says Figura. We re building relationships and onboarding partnerships, driving business improvements in growth areas and getting the return on investment back into the business. We are changing the way our industry builds talent. 5