Is Coca-Cola hunting zombies?
Yes, but in this case a zombie is a product whose sales have not grown over the last three years. Coca-Cola CEO James Quincey requests “zombie reviews” for each market using a guide that was developed for these reviews.
Already this year, Coca-Cola’s Middle East and North Africa business units have identified over 125 zombies that have been or will be removed by the end of the year.
This post is based on the Beverage Daily article, Coca-Cola Steps Up the Zombie Hunt: More Than 100 Products Identified For Elimination, by Rachel Arthur, August 13, 2018. Image source: Shutterstock / Gillian Entress.
1. Why eliminate zombies?
Guidance: As the article states, removing zombies reduces complexity. Resources that went to zombies could be diverted to “star” products or to introducing new products. These resources cross the entire organization from the marketing department through the supply chain. This reduction of complexity make it easier to efficiently run the entire supply chain. Ideally, this will put the resources on the products that will produce the most revenues for the organization.
2. Any potential problems with killing the zombies?
Guidance: The fear is that one of these zombies will take off in the future. It is also important to know why their sales have not grown. For example is it from lack of promoting the product? If the organization knows why it is a zombie, they could take corrective action or discontinue if appropriate. The articles does point out that Coca-Cola intends to learn from these zombies. One benefit of knowing why they became zombies may be to reduce the likelihood of future zombies.
3. What areas of operations tend to run more efficiently with fewer product lines?
Guidance: Almost all areas of operations management run better with fewer product lines. Inventory decisions are easier and tend to result in lower inventory levels and higher service levels. Or from a financial perspective, more inventory turns. Production processes are easier to manage. More efficiency can be added to the production processes with fewer product lines. Logistics would be easier with fewer product lines. Forecasting would be simplified as you have fewer forecast to make.