{"id":22803,"date":"2017-11-14T22:09:22","date_gmt":"2017-11-15T03:09:22","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/coca-colas-vending-machines-get-smart\/"},"modified":"2017-11-15T18:29:54","modified_gmt":"2017-11-15T23:29:54","slug":"coca-colas-vending-machines-get-smart","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/coca-colas-vending-machines-get-smart\/","title":{"rendered":"Coca-Cola\u2019s Vending Machines Get Smart"},"content":{"rendered":"

Blessed Beginnings <\/b><\/h3>\n

The vending machine was <\/span>invented<\/span> in the first century C.E. by Heron of Alexandria to dispense holy water. Temple goers had a penchant for taking extra dips of the blessing, so Heron created a coin based system that poured only as much holy water as was due. <\/span><\/p>\n

The early mechanics were very similar to today\u2019s system, but the vending machine was not seen again until many centuries later, in the 1880s, when it was resurrected for postcards and paper by Percival Everett [1].\u00a0<\/span>Since then, vending machines have been a staple of movie theaters, gas stations, corporate offices, and dorm room basements.\u00a0<\/span><\/p>\n

Now, the vending machine finds itself in an era of digitalization. When Amazon or Instacart drops off Doritos on doorsteps before you can scrounge up an old wrinkled dollar bill, and cash and coins have disappeared for credit cards and mobile payments, what is the use of vending machines? <\/span><\/p>\n

The challenge for the Coca-Cola Company, with millions of vending machines worldwide, is how to rethink the old technology for a new world.\u00a0<\/span><\/p>\n

The Digitalization of Supply Chains<\/b><\/h3>\n

In the TOM beer game simulation, we experienced how difficult it is to manage a supply chain with limited information. Among the challenges were unpredictable or unknown customer demand, stunted information flows, independent decision making, bullwhip effects, and general panic. In the real world, with firms managing multiple products and players, the task becomes significantly more complex. To address these challenges, effective supply chains integrate operations and information flows using digital platforms. <\/span><\/p>\n

With the<\/span>\u00a0digitalization of supply chains<\/span>, companies are faster, more flexible, more customized, and more accurate [2]. A key trend is “The Internet of Things.” The \u201cThings\u201d are products embedded with computers and connected to the internet. These devices offer beneficial monitoring, control, optimization, and autonomy to the firm [3].<\/span><\/p>\n

The rewards to the company and to the consumer are plentiful. Customers receive a more convenient, quick, and customized experience. Firms can expect a 4.1% increase in efficiency gains and a 2.9% increase in revenue annually [4]. To stay competitive, the question is not if but <\/span>how <\/span><\/i>will companies digitize their supply chains by making use of smart, connected devices. <\/span><\/p>\n

Coca Cola\u2019s Smart Vending Machines <\/b><\/h3>\n

Coca-Cola has an answer, and you guessed it: smart vending machines. Over the next couple years, the company is deploying a vast network of smart machines across the U.S. and New Zealand. The devices provide data on stock levels, customer behavior, and machine conditions. As a result, Coca-Cola is better at managing inventory, forecasting demand, and performing machine maintenance. The smart machines control temperature, keep a history of past transactions, and allow for dynamic pricing. <\/span><\/p>\n