THE UNIVERSITY OF SOUTHERN MISSISSIPPI

1. Ce Center for Logistics, Trade and Transportation and College of Business THE UNIVERSITY OF SOUTHERN MISSISSIPPI Study Abroad in PanamaCoordinated byDr. Tulio SulbaranTel: 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 ChavezTel: 601-271-6247 Email: Sergio.Chavez@eagles.usm.edu Jul 2013

2. Video Preamble Click image to play video. The interview was with Gloria Reyes, Director of Demand, Supply, and Trade from Click on the image above to go to a website with a video of the Baton Rouge Coca-Cola plant.

3. Outline • 1- Introduction • 2- Information/Data Collection Approach • 3- Case Study • 4- Results and Results Impact • Similarities • Differences • 5- Summary

4. Introduction

5. 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 warehouseis 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.

6. 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%).

7. Introduction This report compares the logistics and warehouses of Baton Rouge Coca-Cola 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.

8. 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.

9. Information/ Data Collection Approach:Internet Results • Multiple Articles • Best from Packaging World Magazine included video of warehouse • Company webpage • Very little available on web • Some parent organization business reports on profit • Some articles on recent union issues.

10. Information/ Data Collection Approach:Databases

11. Information/ Data Collection Approach:Database Results • Multiple Articles in multiple databases • Nothing on Panama Nestle • Results were on other South & Central American Nestle locations

12. 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 (JefePlanificacionDemanda, Abastecimiento y Comercio Exterior). • Joe Vergeron, Distribution Manager/Special Problems of Baton Rouge Coca-Cola

13. Information/ Data Collection Approach Interviews

14. Information/ Data Collection Approach: Interview Results

15. 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

16. 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

17. Results and Results Impact: What was compared • Warehouse design • Production • Distribution

18. Results and Results Impact: Similarities

19. Results and Results Impact: Differences

20. Results and Results: Impact

21. 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.

22. THE UNIVERSITY OF SOUTHERN MISSISSIPPIfounded in 1910 Thanks! Center for Logistics, Trade and Transportation and College of Business