Ce
Center for Logistics, Trade and Transportation
1
and
College of Business
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
Coordinated by
Dr. Tulio Sulbaran
Tel: 601-266-6419 - Email: tulio.sulbaran@usm.edu
A Case Study: A Comparison of Logistics Practices &
Facility Layout of Baton Rouge Coca-Cola
Production/Distribution Center and Nestle
Manufacturer/Distributor in Panama City, Panama.
Presented by:
Sergio Chavez
Tel: 601-271-6247 Email: Sergio.Chavez@eagles.usm.edu
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad
in Panama
Jul 2013
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Video Preamble
Click image to play video. The
interview was with Gloria Reyes,
Director of Demand, Supply, and
Trade from
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Click on the image above to go to a
website with a video of the Baton
Rouge Coca-Cola plant.
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Outline
1- Introduction
2- Information/Data Collection Approach
3- Case Study
4- Results and Results Impact
Similarities
Differences
5- Summary
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Introduction
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Introduction
• Definitions:
Milk-run truck distribution involves when trucks pick up products at one or more
location(s) and delivers them to one or more destination(s).
• Cross-dock truck delivery moves products from suppliers to a cross-dock and from
the cross-dock to the destinations (Berman & Wang, 2006, p. 287).
• Value-added service warehouse is a facility “where key product customization
activities are executed, including packaging, labeling, marking, pricing, and returns
processing” (Frazelle, 2002, p. 3).
• Focus
The focus of this report is A Case Study: A Comparison of Logistics Practices & Facility
Layout of Baton Rouge Coca-Cola Production/Distribution Center and Nestle
Manufacturer/Distributor in Panama City, Panama. More specifically, this report compares
the logistics and warehouses of Baton Rouge Coca-Cola and Nestle Panama, by looking at
the business functions previously mentioned.
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Introduction:
Business Environment in Panama
•
•
•
•
•
•
•
Panama uses dollar-based economy and relies heavily on established services sector for over
75% of its GDP. “Services include operating the Panama Canal, logistics, banking, the Colon
Free Zone, insurance, container ports, flagship registry, and tourism” (CIA, 2013).
Approximately 30% of the population lives in poverty but it has been decreasing in recent
years along with unemployment.
There is a shortage of skilled labor and an abundance of unskilled labor (CIA, 2013).
Panama exports $17.97 billion
Main export partners are US (13.1%), South Korea (12.5%), Honduras (10.2%), Japan (9.3%),
India (7%), Canada (4.4%), and Mexico (4.2%).
It imports $24.04 billion
Panama’s major import partners are Japan (23.5%), China (23%), Singapore (18.1%), US
(13%), and South Korea (6%).
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Introduction
This report compares the logistics and warehouses of Baton Rouge CocaCola and Nestle Panama, by looking at the business functions of planning,
design, scheduling, and material management. These business functions are
critical to the comparison of Baton Rouge Coca-Cola and Nestle Panama.
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Information/ Data Collection Approach:
Internet
• Used Google
• Terms = “Coca-Cola” and “Baton Rouge” and “Panama” and
“Nestle.”
• There was an abundance of information about Coca-Cola
Bottling Company United and specifically about Baton Rouge
Coca-Cola available.
• There was very little information on the Internet regarding
Nestle Panama.
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Information/ Data Collection Approach:
Internet Results
• Multiple Articles
• Best from Packaging
World Magazine included
video of warehouse
• Company webpage
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
• Very little available on
web
• Some parent organization
business reports on profit
• Some articles on recent
union issues.
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Information/ Data Collection Approach:
Databases
Database
Library
Results
Academic Search Premiere
USM
No for Panama
Academic Search Complete
LSU
No for Panama
Business Source Complete
USM
No for Panama
Business Searching
Interface
LSU
No for Panama
Open/Gov
Country Information
Present on Both
Keywords
Coca-Cola + Baton Rouge
Nestle + Panama
United States
CIA World Factbook
ht t p s : / / w w w . c i a . g o v / l i b r a r y / p u b l i c a
tions/the-worldfactbook/index.htm l
Panama
EBSCO Electronic Journals
Service
USM
No for Panama
Economia Y Negocios
Fuenta Academica
JSTOR
MarketLine Company
Profiles
LSU
LSU
USM
LSU
No for Panama
Yes
No for Panama
No for Panama
SAGE Journals Online
LSU
No for Panama
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Information/ Data Collection Approach:
Database Results
• Multiple Articles in
multiple databases
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
• Nothing on Panama
Nestle
• Results were on other
South & Central American
Nestle locations
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Information/ Data Collection Approach:
Interviews
Planned:
• Joe Vergeron, Distribution Manager/Special
Problems of Baton Rouge Coca-Cola
• Ascanio Salas, Director of Operations for
Nestle Panama
Actual:
• Gloria Reyes, Director for Demand, Supply
Chain and Exporting Planning (Jefe
Planificacion Demanda, Abastecimiento y
Comercio Exterior).
• Joe Vergeron, Distribution Manager/Special
Problems of Baton Rouge Coca-Cola
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Information/ Data Collection Approach
Interviews
Question
What is the size of the facility?
What is the size of the property?
Does the facility hold any special certifications?
What is the product production?
How many SKUs can be handled on site?
How many production lines are there?
How many loading docks are there?
How many vehicles distribute the product?
What pallet system do you use?
What software systems are used?
How many employees are there?
What are the annual sales for last year?
What type of warehouse design is used?
Where is product shipped?
How many unique products are
manufactured/distributed from the facility?
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Business Function
Design
Design
Design
Material management
Materials management
Design
Design
Materials management
Materials management/Design
Planning
Scheduling
Planning
Design
Scheduling/Materials management
Materials management
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Information/ Data Collection Approach:
Interview Results
Question
What is the size of the facility?
What is the size of the property?
Does the facility hold any special
certifications?
What is the product production?
Baton Rouge Coca-Cola
781,000 square feet
112 acres
LEED
Nestle Panama
Info Not Available
Info Not Available
Info Not Available
How many production lines are there?
45 million 8-ounce serving
products per day
141 SKUs created on site; 400
SKUs total
4 production lines
How many loading docks are there?
98 loading docks
# vehicles distribute the product?
340 plus vehicles
What pallet system do you use?
Easy Pallet Distribution System
What software systems are used?
How many employees are there?
What are the annual sales for last year?
What type of warehouse design is used?
BASIS, MEI
520
$9,096,916
Warehouse Slotting (slotpicking)
Vending machines, stores, other Local, Chile, US and Caribbean - to the US they export
distributor
“sofrito” and to the Caribbean they export condensed
soups and to Chile caldo cazero
Over 400
NATA = 95 and Los Santos = 45
How many SKUs can be handled on site?
Where is product shipped?
# unique products are
manufactured/distributed from the facility?
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
33,000 TONS of product annually
300+
NATA has 3 (one evaporated, one dry and one condensed
milk line) and Los Santos has 6
NATA = 8 (4 for local and 4 for Exporting) and Los
Santos= 2
They employ 15 + 3rd party logistic companies
Push-Pull they also employ slip-sheet pallets that requires
a special fork lift
SAP
490
$17,500,000
Single and Double deep and/with drive in
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Case Study: Nestle Panama SA
• Categorized under Dry
Condensed/Evaporated Dairy
Prod Manufacturers
• Established in 1937
• First Nestle company in Central
America
• Produces and distributes local,
nationally, and internationally
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Case Study: Baton Rouge Coca-Cola
• Division of Coca-Cola
Bottling Company United
• Produces & distributes to
the greater Baton Rouge
area and region
(Mississippi & Louisiana).
• Founded in 1906
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Results and Results Impact: What was
compared
• Warehouse design
• Production
• Distribution
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Results and Results Impact: Similarities
Question
How many SKUs
can be handled on
site?
How many
production lines are
there?
Baton Rouge Coca-Cola
Nestle Panama
141 SKUs created on site; 300+
400 SKUs total
How many
employees are
there?
520
4 production lines
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
NATA has 3 (one
evaporated, one dry and
one condensed milk lines)
and Los Santos has 6
490
Center for Logistics, Trade and Transportation
And
College of Business
Results and Results Impact: Differences
Question
What is the product
production?
How many loading docks are
there?
How many vehicles
distribute the product?
What pallet system do you
use?
What software systems are
used?
What are the annual sales for
last year?
What type of warehouse
design is used?
Where is product shipped?
How many unique products
are manufactured/distributed
from the facility?
Baton Rouge Coca-Cola
45 million 8-ounce serving
products per day
98 loading docks
Nestle Panama
33,000 TONS of product annually
BASIS, MEI
NATA = 8 (4 for local and 4 for Exporting)
and Los Santos= 2
They employ 15+ 3rd Party logistic
companies to distribute
Push-Pull they also employ slip-sheet
pallets that requires a special fork lift
SAP
$9,096,916
$17,500,000
340 plus vehicles
Easy Pallet Distribution System
Warehouse Slotting (slotSingle and Double deep and/with drive in
picking)
Vending machines, stores, other Local, Chile, US and Caribbean - to the US
distributor
they only export “sofrito” and to the
Caribbean they export condensed soups
and to Chile a product called caldo cazero
Over 400
NATA = 95 and Los Santos = 45
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Results and Results: Impact
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
Summary
• Nestle Panama SA is a private company in Panama City, Panama.
• Nestle Panama distributes locally, nationally, and internationally.
• Baton Rouge Coca-Cola Bottling Company is a division of Coca-Cola
Bottling Company United, Inc.,
• Baton Rouge Coca-Cola distributes locally and regionally.
• Warehousing, distribution, technology, etc. are critical business
functions.
• Although Baton Rouge Coca-Cola produces more, directly distributes
more(no outsourcing), has more employees, a LEED warehouse, and
impressive technology, Nestle Panama’s profit is greater because of
national and international reach.
• Future studies = how the variety of product calls for different
warehousing functions and layouts and the types of distribution
used—rails, trucks, ship—for the two locations.
THE UNIVERSITY OF
SOUTHERN MISSISSIPPI
Study Abroad in Panama
July 2013
Center for Logistics, Trade and Transportation
And
College of Business
THE UNIVERSITY OF SOUTHERN MISSISSIPPI
founded in 1910
Thanks!
THE UNIVERSITY OF
SOUTHERN
Center for Logistics, Trade and Transportation
Center forStudy
Logistics,
Trade
Transportation
Abroad
in and
Panama
And
MISSISSIPPI
July and
2013
College of Business
College of Business