Operations and Costs: The Core of the Conversion Process

Abstract

Although the UK market for soft drinks is expanding, profit margins are tight because of the competitive nature of the industry. To be successful, firms must keep costs low. Coca-Cola and Cadbury Schweppes, two of the largest firms in the industry, have formed a joint venture to manufacture and market their products. Their intention is to become the world’s lowest-cost manufacturer of soft drinks. They aim to reduce costs by introducing a high degree of automation at their new £60 million factory at Wakefield. The two firms’ existing combined workforce will eventually be cut by almost a third. lt is hoped that changed working practices — round-the-clock working, by well-trained operatives, organised in teams and remunerated with an attractive package of pay and working conditions — will enhance efficiency.