Coca-Cola European Partners’ sustainable supply chain
2016 has been a momentous year for Coca Cola European Partners’ (CCEP) bottling plant at Dunkirk. Not only has the facility maintained its commitment to exemplary sustainability and ethics standards, but has also delivered a never before seen packaging line in time for this month’s Euro 2016 tournament. On top of that, it has emerged seamlessly from a successful combination of Coca-Cola Enterprises, Inc., Coca-Cola Iberian Partners S.A.U., and Coca-Cola Erfrischungsgetränke GmbH at the end of May.
Supply Chain Digital explores in-depth how the award-winning Dunkirk site has made a significant contribution to radically increasing sustainability across the board. We speak to Site Manager Etienne Van Poucke to learn more about the how the plant is leading the industry for sustainability.
CCEP has focussed on innovating across its manufacturing and supply chain operations, while continuing to play an influential role through various local and international sustainability schemes. The company is well-positioned to lead the industry towards a low-carbon, zero waste operating model. CCEP seeks to deliver today’s sustainability targets while ensuring that its work is a guiding light for a future of sustainable innovation.
Spotlight on Dunkirk
CCEP’s bottling plant was established in 1989 and since then has gone from strength to strength, becoming its first European plant to use SAP systems in 2003, and was recognised for its exemplary energy saving operations in 2011, 2012 and 2014 by the company’s internal Oscas Energy award. Van Poucke says: “We are on track to deliver a green scorecard for the end of the year. This means all important Key Business Indicators are on track according to what has been budgeted; we have worked very hard to prepare a compelling sustainability vision for 2020 as well as introducing the new packaging in March for EURO 2016.”
The plant consists of four can lines (0,33L), one aseptic line PET (0,5L) and one large-PET line; these are supported by 379 staff in a warehouse that has capacity for 20,000 pallets and 329 SKUs. All of these provide 56 different Coca-Cola flavours to countless consumers across France and beyond.
“We have around 50 people are working in distribution. Our main key business indicator is customer service level – that means what we can deliver in time with good quality and with the right number of pallets and cases. For us, the result is more than 99 percent.” Van Poucke adds, “We have a big focus on training and coaching. People development is very important to us”.
Case Study: Panini sticker campaign
Such is capability and experience housed at the Dunkirk site that it was naturally chosen to produce Coca-Cola’s Panini Euro 2016 stickered bottles – a first for both the site and the company. In total 260 million stickers were deployed across Belgium, France, Spain, Switzerland, Bulgaria and Romania.
“This was a high risk project because we were working on lots of avenues in parallel and had to buy lots of additional materials. Another challenge was the changing nature of the project. We had to consider who was going to qualify for EUROs. Volumes and targets were constantly changing because of this.” Van Poucke adds.
“Our aim, right from the start, was to ensure that we sustained environmental standards despite an increase in production levels. The biggest challenge was producing the Panini label on the PET bottles. After the PET bottles are filled, they need to be rinsed with water to clean them and then the bottles need to be dried before labelling. We agreed to extend the capacity of our driers on the line to dry the bottles outside before labelling.”
Although taking months to plan, the timely execution of this project lay in the Dunkirk teams’ ability to adapt processes fast enough to be able to react as quickly as possible - while not once failing to uphold the company’s sustainability directives.
The teams at the Dunkirk plant have consistently demonstrated their commitment to the company’s CRS goals through a number of impressive achievements. Since 2008, the plant has reduced its energy consumption by 27 percent, its packaging by 28 percent (50 percent for rLPET ) and its water consumption by 15 percent. Supporting these savings are a range of innovations which include low-energy LED lighting and low-pressure moulds that work together to reduce consumption.
“We are using a real-time measuring system for efficiency, yield, water, electricity and gas consumption. This monitoring and tracking system gives us the capability to manage our processes well.” Van Poucke adds.
“Can weight has been reduced by 28 percent since we started in 1989; we are using smaller closures and lightweight preforms for our bottles - we optimised our boiler house and we are using much less pressure for blowing our bottles. We are also working closely with the local community and in four areas: environment, sports, employment and culture.”
The company has backed up its sustainability initiatives with some serious investments, totalling $75 million over the past four years. This year alone CCEP invested $41 million in bringing a can line closer to its customers in Paris to reduce the distance travelled.
By improving the way in which it receives (fronthauling) and collects (backhauling) the company has been able to ensure that its trucks move with full loads. Through initiatives such as these 1,897 tonnes of CO2 were saved last year, and backhauling saved an impressive 2.5 million kilometres.
“I call it being responsible and sustainable,” Van Poucke adds, “First of all, we take care of our people and we are doing everything we can to ensure people do not have accidents – we have gone 865 days without a loss-time incident.
“Secondly, we closely follow our environmental ratios, particularly energy. We have improved our energy ratio; we have a monitoring and tracking system of all usage of electricity. We really look at electricity and gas.”
Having recognised its potential to lead its industry, as well as its supporting suppliers, the company has embarked on a new era of sustainable, ethical and profitable business. Having consistently delivered and developed its sustainability targets over the past decade, the plant at Dunkirk is looking forward to leading the business for years to come.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”