Management Issues In Implementing New Logistics Strategies Commerce Essay


Adolph Coors was 26 years old has opened brewery in Golden Colorado in 1873. Coors is well known as finest brewery water maker and making best beers requires the best barley as well. Coors Company employs around 8,500 people around the world. In 2002 Coors acquired the England and wales business of bass brewers and Coors brewers (CBL), in United Kingdom Coors became a second largest brewer with more than 20% of market share with the UK's finest and number one brand, Carling. In UK Coors employs 2,500 people in the UK. In 2009 march 31st, Coors brewers changed name to Molson Coors Brewing (UK) Ltd.

Brands operate by Molson Coors UK ltd: Coors light, Blue moon, Key stone light, Carling, Carling C2, Molson Canadian, Cobra, Molson EX, Molson dry, Richards red, Cree more Springs.



Molson Coors UK ltd has maintaining the Logistics system in more advanced comparing to the other breweries in the UK. The main elements in the Logistics management are Procurement+ materials management+ distribution


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Procurement means the complete process goods and services from the preparation and process and sending with the right quality and right quantity with in the right time from the suppliers to the production process.

Molson Coors has maintaining the highest quality levels of raw materials and the services at the lowest prices. Molson's select global suppliers for the raw material, the main raw materials are using in the BEER industry are BARLEY. The sources of their raw materials from two primary providers HOPS and STRACH, Hops are the main providers for supplying the raw materials to the Molson Coors in the US, EUROPE, NEW ZEALAND. Water is the main one which is using in the making of BEER. So Coors has a strategy of utilising the water resources locally with the understanding of local government policies.

Brewing and packaging materials

Molson Coors maintaining materials management globally, effective utilisation of global materials management to reduce the risks in managing materials like aluminium cans, glass bottles, and other packaging materials

Glass bottles: Molson Coors maintained single source supplier in 2008 but, in 2009 Molson Coors maintaining three suppliers for their glass bottles. It is a big recycling process for maintaining the glass bottles and aluminium cans in huge amount. So, company has dedicated to the third party supplier maintained for their supplying of the packaging materials.

Kegs: Molson Coors has an approximately less than the 10% of selling steel can beers. So, Coors hasn't face not mush difficulties for their kegs suppliers.

Materials management

Molson Coors materials management has a safe side strategic policy in maintaining warehouses and packaging facilities finished good in the inventory.

Coors brewery limited has approx. 21% share of the UK market, the main sales in the UK is Carling brand. Molson Coors has a joint venture in maintaining the production and distribution of Grolsch in the United Kingdom. Sales and distribution is tied with the third party like DHL in trading policy.

Coors has maintaining the suppliers all over the world. Barley is the main agriculture product using beer industry. So, to overcome the product shortage Coors has maintaining global policy for their raw materials supplying.

Distribution and supply

In UK beer is distributed in two tire system involving of manufactures and retailers. UK strategy is different from the US; manufactures are not permitted to distributed beer directly to the retail. The major large quantity of beers is distributed directly to the retailers in UK.

Distribution system in the Coors brewery limited is maintained by the trade team which operates a system of satellite ware houses and transportation system. This team is also maintains the transportation management system for the Coors breweries supply.

In UK two types of market channels are currently operating: they are on-premise market channel and off-premise market channel.

On-premise market channel

On-premise market channel means, goods are consumed in pubs, restaurants, and hotels etc… on-premise market channel is sub dived in to two categories they are multiple on-premise market channel and free-on premise market channel. Multiple on-premise market channel means customers owned pubs, hotels etc… and free on-premise market channel means individual owner-operated hotels, pubs etc… Coors breweries Limited (CBL) in 2008 around 70% on-premise and around 30% are off-premise market business. (Coors-Brewing annual report 2009).

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Off-premise Market channel

According to the Coors Brewing annual report 2009, around 42% of CBL sales in this market premises. Main customers in this market channel are retail markets, whole sale retailers etc...


SWOT analysis are categorized as two types


Coors has highly integrated structure in business, finance, and IT departments.

Coors adopted latest technologies in IT like SAP, VIPER Program for the supply chain etc...

Coors retain strengths in primary supply and production activities

Competitive advantage exits within the inbound logistics and operations.

The main Coors brewery strength is long term supplier's relationship, supplier training and strategic sourcing.

Within the sales and marketing area Coors are succeeding in securing primetime advertising policy.

Coors maintaining very high profile in managing the packaging section.

Coors appears two strong categories they are inventory turnover and fixed assets turnover.


Coors maintained a follower strategy it is very dangerous in business market environment.

Coors has maintain top down management approach and it family owned business so, it is tough to get the new talent in that position.

Coors may not have right people in international level marketing.

Coors has failure in proper training up on SAP for their employees.

From the financial prospective, according to the Coors annual report it clearly shown less results compared to the other top 4 companies.


Coors has a great opportunity to merge with other foreign companies for expansion of their business in international level.

From the technology point of view opportunity is always exits drive out in efficient and to service to the customer more effectively.

Coors also has opportunity to produce more environmental products.

Coors has great long term water rights and long term suppliers for their business.


Beer business industry has always good competition in Europe market.

Number of substitute products exits in the industry sprits, wine and other alcohol are only a few substitutes.

Third party supplier treats are most common in the competition business strategy.

2.3 Porters value chain

Firm infrastructure

Coors firm infrastructure is strong in financing, legal support and accounting sections.

Coors firm infrastructure is based up on the top down approach like waterfall model.

Human resource:

Coors policy on human resource and adopting SAP for the integrating all the sections in the firm for easy to communicate policy.

Strong reputation and easy to recruit of its operational and market policy

Incentive systems help to the organisation in effective utilising the human resource policy.

Technology Development

VIPER program for its procurement

SAP program for the department integration

Route optimisation software

Instrumentation and controls

Temperature controls for easy to use the machines and controlled

Movement to paperless


Procurement policy for its supply

Adopting VIPER program

Inbound logistics

Coors has operated and maintained long term relationships with the suppliers

Coors supplier training help in supply chain management

Strategic source program

VIPER program for their supply chain


Waste minimization

Cold filtering process

Quality controls for production

Bottling and canning operation

Outbound logistics

Shipping bulk liquids not with glass bottles

Consolidated warehouses

Cold beer delivered

Marketing & sales

Pricing the multiple products

Automated retail pricing

Sport sponsorship

Advertising policy is main succeed in the firm for their new logistics

Adopting new methods


Freshness dates

Customer satisfaction helps lines.


3.1 McKinsey 7-S Framework


Inter department communication never a Coors strong suite, it has to be improved.

Family owned business structure top down approach.

IT, finance, HR strategy and technology department supports all aspects of the business


Maintain high standards in profile and taste of beers quality

To become a top most beer company in the world by adopting latest technologies for their supply and human chain

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Respond quickly to low carbohydrate opportunities


Coors concentrate on supply chain and adopting new IT technologies for their development.

Control cost through improved systems.

Require flexibility to meet distributors order timely

Shared values

Five core values are followed by Coors in sharing the values

Excellence: Coors are well historical and well excellence in beer industry

Quality: most consistent and high quality materials permitted by packing and brewery departments.

Service: requires carrier flexibility and perfectly meet distribution levels.

Creativity: new system ideas have often come from line employers.

Innovation: regarding product to market, Coors must improve in this area.


Coors has a top down communication approach and generally adheres waterfall communication model.

Follower is not a leadership. Follow the well success company formulate and implement in the market policy


Coors has well established staff with well experience to make bette business with the competitors.

Coors become more business savvy through national and global expansion like merging companies and joint ventures etc...

Recent market failures would help to concentrate and apply more skill for better business.


Localised company has face lot of difficulties with the experience staff to shown exposure in the international level

Coors has well structure in human management and create a peaceful work environment to remove the pressure up on the staff.

More stringent labour laws are considered a possible threat has a labour disruptions would have material impact on the company.

3.2 Business strategy

Coors business strategy is top down approach it involves the following things are

Corporate culture

In this culture it believes and values shared by the people who work in organisation.

In Coors mission statements to work together with adopting new technologies

Vision: where the organisation want to go in the future.

Corporate culture in Coors reflected in the work environment and the attitude and behaviour of the leadership.

Every corporate culture having logo to promote the vision and mission in the form of image to present to the outside of the world.

Strategic planning

In strategic planning involve the future thinking about the business to the top management. It is good move in Coors to think about the future business dominate by IT in beer industry. So, Coors adopting latest technology trends in their business environment.

The main objective of the strategic planning is to develop good relationship with the overseas suppliers and identify network of retail outlets.

Types of strategies:

Competitive advantage: Coors has maintaining its cost over their rival companies and maintaining successfully in taste policy to take over the market

Cost advantage: Global operator Coos has its cost advantage in importing materials for low costs.

Market dominance: market dominance in acquiring the foreign companies to merge and takeovers.

New product developments: Traditional Coors Beer has very good reputation in the Europe market so; consumers are accept the new products from COORS.

Price leadership: over the few years Coors maintain price dominance according to the taste and brand of the products

Global: Coors already expanded their business globally over the past decade. It acquisition with global companies and maintain beer business worldwide with long term suppliers.

Re engineering: Coors has better in adopting new technologies in re engineering all the categories in future business strategies.

3.3 Product strategy

"Product strategy deals with the generation and update of a future view of current and new products. It includes creativity and innovative thinking. The term 'Product' as used here refers to; Whole Product; Whole Product Range; including the intangible as well as the tangible elements which make up the total product, service and brand benefits which customers buy"


Coors has taken different strategy over the product. Expanding in to so many different segments. Coors has considered one additional brand which is most popular in the light beer segment.

This approach would have maintained natural high quality image and reduce cannibalisation of super premium products on Coors banquet and cost advantage and facilitated growth in western region.

Product strategy is directly involves in the supply chain strategy to make or move the supply n procurement.

3.4 JUST IN TIME Logistics

Pull principle

Just in time is the manufacturing policy which eliminates the waste associated with time labour and storage space.

The company will produce the goods according to the customer needs.

Company manage with their own resource and allocate them easily

Benefits for JIT concepts:

Reduce setup time waste in ware houses

Improved flow of goods from and through warehouses

Employees who posses multi skills are utilised more effectively

Better consistency of scheduling and consistency of employee work hours.

Increased emphasis on supplier relationship

Supplies continue around the clock keeping workers productive


4.1 Management issues in implementing new logistics strategies in IT and human resources

4.1.1Extended Warehouse management

Coors following the current ware house strategy method has been changed after implementing the SAP in the company (WITS) Warehouse information tracking is replacement with SAP extended warehouse management solution. The main objective of this technology to integrate all the available resources globally to run the business in a profit level.

4.1.2 Molson Coors E-recruited

Implementation of an electronic recruitment solution by BASS (UK) using various SAP technologies for Molson Coors is


4.1.3 Molson MRO- IVRA interface

Coors third party managing equipment using its own applications and subsequently update SAP. Business requirements were reviewed and infrastructure information exchange policy has been changed in Coors. This project has been hold in vendor selecting stage. Every vendor has its own system in exchanging the data.

The following key issues are involved in the when the organisation has adopted latest technologies in IT and in human resource

Adopting new technologies in IT and their practices

By adopting the new technologies the management would feel difficulties in implementing and running in the company. Everyone should adopt and make good practises up on the latest change trends in the organisation.

Make expertise employers for good practising up on the new development.

Otherwise it leads lot of money waste in investing latest it trends without good practises.

Mobile the basis and create owner ship

Roll out the change program at the base and management should make a calculation up on the change structure in the firm. Make the staff free to ask and free to adopt the change structure and make good policy over the latest's developments and sharing the knowledge from the expertise worker. Facilitate bottom up and to down communication.

Cascade down and break barriers

Break the barriers and create a cross functional teams to deign organisation wide change program and roll out communication policies from top to bottom and right to left.

Engaged the top and lead the change

Build the leader ship teams and establish the case change craft vision over the adopting latest trends in the organisation


5.1 Technology developments and future logistic strategy in BEER industry

The new technology trends in the beer industry is to adopting latest technologies in their supply chain , human resource, manufacture, procurement and processing materials.

The following list of new technologies currently exist in the beer industry for future developments in IT and its logistics strategies

5.2 EDI IN Supply chain

Electronic data exchange and extensible mark-up language are the two future developments in supply chain

The main effect sectors through EDI in supply chain are

Shipment status: it clearly shows the shipments in terms of date, time, location, routes, and identification numbers.

Purchase orders: It maintains a record of purchase order information for goods and services.

Bill of landing: it provides detail shipment bill of landing.

Advance shipment notice: it clearly notifies the advance shipment notice to the owner.

Shipment information: it provides bill of landing, rating and scheduling information.


SAP is the earlier Enterprise resource planning software produced by SAP AG. It coordinates the resource and information and activities to complete business process in materials management.

Production planning and control

SAP logistics module control over the production planning in the inventory, plant data collection, and costing and effective project management.

By using this resource it is easy to forecast the planning and control the production information in the plant.

Sales control

It is easy to manage the sale control and keep the stock in the warehouses according to the sales by using the integrated software SAP/R-3

Quality management

Quality management is the main one which boots the business strategy in the firm. So, using integrating the departments it is easy to manage the quality. Quality inspection and quality control and quality documentation leads top priority in today competitive business world.

Plant maintenance

Maintaining and inspecting the plant for processing the orders and manage the completion confirmations. To maintain the history of the plant history for future records if nay incident happened.

Material management

Warehouse management, goods, vendor consolidation, are the min activities which are helpful in manage the goods in inventory.