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