In preparing for this week’s class, I was particularly
interested in the article “How technology can drive the next wave of mass
customization.” First, I started to
consider all the customized products that I could think of, for example:
vistaprint.com, Hungry Howie’s pizza, Charles Tyrwhitt shirts and
Starbucks. When I then started to
consider technology and supply chains alongside customization, I focused on
Coca-Cola’s Freestyle machines.
You may have seen these machines at local restaurants, like
Five Guys Burgers and Fries, Qdoba or Moe’s.
The machines are soft drink dispensers that allow customers to choose
their own beverage from more than 100 options or customize their own drink. The machines are fun and excite customers,
but they do more than just amuse customers, they provide valuable supply chain
information for Coca-Cola and its partners.
Sean Culley wrote “Transformers: Supply
Chain 3.0 and How Automation will Transform the Rules of the Global Supply
Chain,” which discusses the innovative Coca-Cola Freestyle project. Culley explains that the machine was designed
by an Italian car firm and that it uses pharmaceutical technology to create its
specialized beverages. The machine
automatically reports supply and demand information to both Coke and the
restaurant/organization where the Freestyle is located.
The article quotes a Coca-Cola
spokesman, who says, “Freestyle’s data tracking technology gives us the
ability to gather consumption data to optimise our product offering and assess
where there are opportunities to create new retail brands. These machines also
help our trade customers to manage their beverage inventory more effectively so
they have the right brands in stock.” Not only does the Coca-Cola Freestyle
help the supply chain, it also drives sales up by hundreds of percentage points
where it is installed.
In another article, “Driving the Top Line with Technology,”
Coca-Cola’s CIO, Ed Steinike, discussed the
consumer-packaged goods’ trend of demand driven supply chain systems, and he also
talked about the Coca-Cola Freestyle, explaining that it “is effectively a
complex and sensitive enterprise-resource-planning environment.”
Steinike describes the machine’s supply
chain system: “The computer records all
the data involved in every single pour. Each fountain knows when it’s running
low on certain products. We are also using automated ordering in many Coca-Cola
Freestyle locations, whereby the fountain can build its own orders for supplies
and place them directly into the system. It would even optimize the order so
that you pay the lowest possible delivered cost.”
The article also conveys that while the
machines make customers happy and aid the supply chain, they also serve as an
important source of customer data for Coca-Cola. Coke is able to monitor the drink choices of
customers, which enables them to develop new products and predict their demand
in different regions.
Finally, “Coca-Cola Freestyle Provides
Company with Valuable Supply Chain Research” is a blog article that further
details the way that Coca-Cola Freestyle gathers continuous and instant data on
the preferences of their customers.
Richard Gross, Group Director of Enterprise Business Solutions for
Coca-Cola, describes the Coca-Cola Freestyle project as allowing Coke to have a
“pure demand driven Supply Chain ecosystem.”
I was instantly intrigued when I first
saw the Coca-Cola Freestyle, and I thought about all the marketing innovations
it brought, but I never considered its ability to aid the supply chain. The technology’s ability to provide instant
information on supply levels and demand for products should simplify some of
Coke’s business processes and allow them to avoid stock outs. I know that the machines have been used for
several years, but I wonder what their plan is for further expansion.
I am also interested to see if other
industries or companies will be able to use this technology to create
additional instant customization opportunities.
Maybe a popcorn manufacturer could create a machine for movie theaters
that allows customers to choose special flavors or mixes to create their own
personalized snack. Gyms could develop a
machine where customers could input preferences and goals, and the machine
would create customized, original workouts for them. This machine would be able to collect data
about gym preferences to allow the gyms to meet the needs of customers by
assuring that the right amount of the right equipment was available. These ideas may already exist or may not be
worth the investment, but it is exciting to think about what the future might
hold for customization.
Questions:
1. Have you ever used
a Coca-Cola Freestyle?
What was your experience? Was it
easy to use? Did you notice people
experimenting with flavors or sharing ideas for new beverages? Do you think Coke should expand the program
further?
2.
Can you think of ways to apply this idea or technology to other products
or industries?
Sources:
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.