Things Go Better with Coke’s Data Warehouse
In the face of competitive pressures and consumer demand, how does a successful bottling company ensure that its vending machines are profitable? The answer for Hokuriku Coca-Cola Bottling Company (HCCBC) is a data warehouse and analytical software implemented by Teradata Corp. HCCBC built the system in response to a data warehousing system developed by its rival, Mikuni. The data warehouse collects not only historical data but also near–realtime data from each vending machine (viewed as a store) that could be transmitted via wireless connection to headquarters. The initial phase of the project was deployed in 2001. The data warehouse approach provides detailed product information, such as time and date of each sale, when a product sells out, whether someone was short-changed, and whether the machine is malfunctioning. In each case, an alert is triggered, and the vending machine immediately reports it to the data center over a wireless transmission system. (Note that Coca-Cola in the United States has used modems to link vending machines to distributors for over a decade.)
In 2002, HCCBC conducted a pilot test and put all its Nagano vending machines on a wireless network to gather near–real-time point of sale (POS) data from each one. The results were astounding because they accurately forecasted demand and identified problems quickly. Total sales immediately increased 10 percent. In addition, due to the more accurate machine servicing, overtime and other costs decreased 46 percent. In addition, each salesperson was able to service up to 42 percent more vending machines.
The test was so successful that planning began to expand it to encompass the entire enterprise (60,000 machines), using an active data warehouse. Eventually, the data warehousing solution will ideally expand across corporate boundaries into the entire Coca-Cola Bottlers network so that the more than 1 million vending machines in Japan will be networked, leading to immense cost savings and higher revenue.
1. How did Coca-Cola in Japan used data warehousing to improve its business processes?
2. What were the results of their enterprise active data warehouse implementation?