New SAP CRM ordering system helps Coke roll out new dispenser
A new beverage dispenser designed to revolutionize Coke's distribution system demanded a new way for the soda giant to service customers.
ORLANDO -- For the Coca-Cola Company, developing a new device to dispense its wide range of soft drinks meant big changes – for its supply chain, its distribution, its IT systems and, most importantly, its customers.
In a session here at SAP's annual Sapphire conference, executives from Coca-Cola and its system integrator Fujitsu described how the new dispenser, currently being tested in Atlanta and coming soon to southern California, meant massive changes to its CRM system.
The new dispenser, dubbed the Coca-Cola Freestyle, is designed to replace the traditional soda fountain, which offers only a handful of choices, with an uber-fountain, allowing customers to pour their own drinks from a choice of up to 100 flavors from the Coca-Cola line-up. The self-service dispenser will be set up in fast-food restaurants, convenience stores and grocery stores and is loaded with cartridges filled with concentrated syrups that store owners can replace.
"Think of it as a manufacturing site," said Scott Condra, project manager at Coca-Cola. "It manufactures your drink right there for you. If you want a Coke Zero with lime with vitamin supplements, that should be what you get."
The dispenser is not just a way to automate the process for those adventurous types who fill their cups with a little bit of each soda from the fountain. It will reduce distribution costs because the syrup cartridges are smaller and lighter and also relay information on usage and service issues back to Coca-Cola. With the system, Coca-Cola and store owners can forecast demand based on past usage and order new stock accordingly. It will also provide online tech support for store owners at the CokeSmart.com website.
"Today, with the static platform, you'd have to have a service agent dispatched out to diagnose the problem," Condra said. "Having it online gives you the opportunity to diagnose and potentially have the customer fix it."
Serving business and consumer customers
Yet, to truly take advantage of the Coca-Cola Freestyle, the company felt it needed a new portal for its end customers. Customers, for Coca-Cola, mean the end consumers and distributors and small store owners. Small businesses that have traditionally relied on hand-written invoices and phone ordering will be able to log into a self-service website and do their ordering from there.
"This will reduce write-offs and collection costs," Condra said, noting that it would help eliminate many of the write-offs associated with the hand-written invoices.
The site will also offer suggestions on what needs to be ordered, based on past consumption.
"For customers, it's driving profitability; now it's truly a partnership," Condra said. "With partners and distributors, it's about our supply chain. Over time, it's really going to be a response to their needs. They can go to this one location and have those needs met."
The project is a three-stage process. In the first stage, Coca-Cola will introduce the online ordering and the ability to do credit card processing for customers, and the improved order accuracy. The second stage will bring the legacy syrup-based stores onto the system and provide customer reporting to allow customers to see how their business performs compared with other outlets. The third stage will focus on asset management with equipment and parts.
Coca-Cola is turning to SAP for the underlying technology. While the requirements of the site demanded a business-to-business approach, the fact that it would eventually reach 3 million end customers, many of whom are small store owners, demanded a simple business-to-consumer interface.
"For an outlet manager to understand the dynamics would be very difficult, so we've assisted them in that process," Condra said. "The standard CRM out of the box from an e-commerce standpoint would have had a lot of steps. We tried to think about the mandatory clicks a customer has to enter."
Building a customer-focused website
Coca-Cola called in Edison, N.J.-based Fujitsu Consulting to help with the project. The first step in establishing the site was to form a creative design team made up of two business owners, a non-SAP Web design expert, a CRM functional e-commerce lead, and an SAP CRM technical Java lead. They supplemented that with end users that represented everything from a business owner running five outlets to small "mom and pop" shop owners.
The Web design experts presented their approach in html, and the SAP CRM experts outlined the gap between what was available within SAP and what needed to be customized. They then prioritized the development required.
"If the business impact is medium or lower and development time is 20, 30 or even 10 days, we go back to them," said Sathish Thandale, project manager with Fujitsu. "They always had the usability as the priority, and the SAP experts always had SAP CRM in their mind."
Because they were using SAP's B2B e-commerce product for the site but needed a B2C look and feel, the team was sure to approach the project carefully. The Web design team created a visual framework and gave it to the end users and asked them to browse through it and provide feedback.
"Before writing one line of code, we made sure it was easy for users," Thandale said. "It helped a lot in the change management. IT was afraid because you're changing the design. They knew customizations we were making and the level of customization. All three [business users, IT and end users] know what they're going to get before the coding starts."
The site is designed to limit the amount of keyboard entry and focus on mouse clicks instead. It's based on a standard SAP e-commerce shopping cart, but the design team strove to make the order process last an average of a minute and a half, with a two-minute maximum.
Stores typically submit orders once every 10 to 15 days. The new device sets up a consumption log that connects to SAP via a private network in the store. That data is fed into SAP BW on a nightly basis and pushed into SAP CRM. That provides the data for the predictive ordering system. For example, the system can alert users if they're ordering fewer cartridges than history suggests they should.
"The SAP portal is coming, but until it's done, we wanted to make it look like a portal," Thandale said.
Eventually, with an SAP portal, partners and distributors will be able to access the system to streamline their own processes, Condra said.
The system is also set up to look similar to Coca-Cola's existing order guide that users currently consult for their ordering needs. For Coca-Cola, the system will provide opportunities for up-sell, cross-sell and product availability data. The ordering engine runs its point-of-sale data management through NetWeaver BI, SAP CRM and SAP ERP.
Coca-Cola has tested the infrastructure based on 10,000 users and found it's worked well so far.
"We didn't want to invest in the infrastructure for 3 million users," Thandale said. "They weren't going to get there for a few years. We are going with the assumption SAP is scalable."