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ATLANTA — The Coca-Cola Co. announced it has formed a new National Product Supply System (NPSS) in the United States in order to build a stronger, more streamlined production system in its flagship market. The NPSS' mission will be to facilitate optimal operation of the U.S. product supply system for Coca-Cola bottlers in order to:
- Achieve the lowest optimal manufactured and delivered cost for all bottlers in the Coca-Cola system;
- Enable system investment to build sustainable capability and competitive advantage; and
- Prioritize quality, service and innovation in order to successfully meet and exceed customer and consumer requirements.
Under the new NPSS, existing independent producing bottlers Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling Company United and Swire Coca-Cola USA, as well was the company-owned Coca-Cola Refreshments and Coca-Cola North America, will be members of Coca-Cola's National Product Supply Group (NPSG). The NPSG will administer key national product supply activities for these bottlers, which currently represent approximately 95 percent of the U.S. produced volume.
"Our U.S. operating model continues to become stronger, more aligned and more competitive. Today, we are taking further action to enable profitable growth for our entire U.S. system," stated Coca-Cola Chairman and CEO Muhtar Kent. "We will leverage the strengths and capabilities of the four largest producing bottlers in our U.S. system, CCR, Consolidated, United and Swire to operate as one highly aligned and highly competitive national product supply system."
Coca-Cola Refreshments is expected to divest nine production facilities to the NPSS bottlers based on the location of their transitioning distribution territories. This transition is anticipated to take place between 2016 and 2018, according to the announcement.
"The National Product Supply System will benefit all of our U.S. bottling partners by driving our production system to manufacture products at the lowest optimal cost," said Sandy Douglas, executive vice president and president, Coca-Cola North America. "The board of the NPSG will focus on infrastructure planning, innovation planning, and optimal sourcing. Importantly, we believe the NPSS structure allows us to leverage our significant system scale with the unique competitive advantage of being able to act with speed. This will be enabled by the outstanding commercial capabilities of a strong local bottling system."