Bob's Bottling Company Case Study

Introduction

A bottler’s core function is to mix the outsourced syrups with the required ingredient to produce the CSDs, fill it in bottles, package it and deliver it to distributors or final customers (B-18). This paper investigates the case of the bottler “Bob’s Bottling Company”, located in Hidd, Bahrain which had experienced several dilemmas due to poor inventory management. Despite their various production lines, this paper will only focus on the CSDs manufacturing. The aim of this essay is to study the case by categorizing the relevant inventory, allocate the causes of the inventory dilemmas and suggest proper solutions to be implemented.

Inventory classification

For Bob’s inventory to be managed efficiently, inventory classification

4&10). Bob’s raw materials of CSDs include syrups, supplied by the syrup suppliers, carbonated water and sweeteners such as sugar and HFCS (B-16). Further raw materials are bottles, cans, bottle caps, labels and packaging boxes each supplied by their manufacturers (C-37). Those materials are categorized as dependent inventory, as the quantity of the outsourced bottles is dependent on the amount of liters of soft drinks to be made, for instance (CILT, L1, P. 13). Also, according to (B-15), the recipes of the syrups differs based on the final product, however, the main ingredients are similar. Therefore, the de-coupling inventory concept is applied, where the main ingredients are held as an inventory, while syrups would be produced later based on customer demand (CILT, L1, P. 14).

Second, inventory carried during production is referred to as WIP (CILT, L1, P. 13). In Bob’s case, WIP inventory includes the mixture of syrups with the aforementioned ingredients being prepared and stored in tanks. Additional WIP stocks involves the process of moving the bottles by the conveyors through the stages of washing, filling, capping, labeling and packaging (B-16). Those dependent WIP inventory function as a de-coupled inventory, as the mixed drinks are stored in batch tanks until bottles arrive at the filling stations