Coca-Cola FEMSA (KOF) or Coca-Cola Bottlers Philippines, Inc.

(CCBPI) Tacloban Plant has been serving Eastern Visayas since September 25, 1953 with their products. Coke has a long history and it has managed to stay on top with apparently a bigger share of the market. One of their competitive advantage was being the first company to serve carbonated drinks and similar products. How else Coke does it, thats a secret. But a trip to one of its plants might just give a glimpse of CCBPIs operations. KOF exists to Satisfy and please the beverage consumer with excellence with the vision of being the best bottler in the world, recognized for its operating excellence and the quality of its people. To help them achieve this, they treasure the values of Passion for service and Consumer Approach; Innovation and Creativity; Quality and Productivity; Respect, Comprehensive Development and Personnel Excellence; and Honesty, Integrity and Austerity. Weekly planning or forecasting is done by their officials to determine the production required for the current and proceeding periods. Table 1 shows the forecasted demand for the month of September. Such data is posted on a bulletin board at their factory and is updated daily. According to a factory Table 1. For the Month of September personnel, the amount showed as Required Daily Production to 667,048 Hit Balance is already above the Required Output (in cases) 137,744 average daily production, which Net of Beginning Inventory means that for the last two days 658,836 Volume to Date of September, they were already 8,212 rushing production to meet the To Produce (over) 4,106 demand. Demand are forecasted Required Daily Production to Hit Balance 30 to peak on Fiestas, Graduation, Bottling Days Period 28 and Holidays like Christmas in Days Utilized December.

Coca-Cola designs its products to achieve sustainability. In doing so, they practice the 3Rs. The most basic things they do are presented in Table 2. Part of their efforts in maintaining sustainability are programs related to Saving Water and Greener Energy use.

Table 2. 3Rs KOF launched new bottles with less glass Reduce content They distribute their products in Reuse Returnable Glass Containers (RGB) Recycle Broken bottles and plastic bottles are recycled

Moreover, the bottles themselves are designed to be sustainable (refer to Figure 1). From metal caps, KOF has moved to using plastic caps instead. Even the print of the Coca-Cola trademark is slightly depressed to avoid being corroded when placed side by side with other bottles during processing. Additionally, the bottles were designed to give it a distinctive look that consumers could recognize even if they felt it in the dark and even if broken, a person could tell at a glance what it was. KOF Tacloban produces coke products in glass bottles in their plant

Figure 1. Coke Bottle

but it imports products in-can and in plastic bottles either from Cebu or Sta. Rosa Plants. The three main ingredients are Treated Water, Concentrate, and Carbon Dioxide (CO2) which undergoes the process as shown in Figure 2. Treated Water which undergoes filtering is used to prepare a sugar solution The concentrate is added in correct proportion to make the syrup
Figure 2. Coke Preparation

The syrup is allowed to cool down and CO2 is added to give it a "punch"

Additionally, the plants capacity for producing these bottled products are shown in Table 3. Factory capacity is roughly 36,000 physical cases (RGB) per day and stores finished goods at 203,355 physical cases and 263,534 physical cases for empties. It also consumes an average of 600-900 m3 and uses 100,000-300,000 kwH or electricity per month.
Table 3. Capacity

TRUCK Leaves/Arrives 5. Packing and Loading (bottle are capped quickly to avoid contamination) Figure 3. Basic Process 4. Filling (bottles are 1st inspected by machines for dirts and stains then by humans; only perfect bottles are filled) 1. Unloading (empty bottles are brought in; separated and placed to conveyers)

3. Washing (biggest machine with 3 compartments: Wash, Clean, Sterilize)

2. Sorting (bottles are sorted and inspected by 6 people before cleaned)

CCBPI employs high end technology for its operations with global standards so it operates in the same pace and quality as with other Coke products in other countries. In other words, their products are standardized. CCBPIs production can be classified as a Mass Process producing high volume and low variety. In a repititive process, the plant uses the same machine in creating solutions for the different products and operates in two to three shifts depending on the demand. Figure 3 exhibits the flow of the process in preparing the products. When the trucks arrive, it is estimated that within 7 minutes after arrival it can already leave after unloading and loading cases.

Moreover, CCBPI tries to achieve lean production by eliminating the so called eight wastes namely: Defects, Overproduction, Waiting, Non-value adding processing, Transportation, Inventory Excess, Motion waste, and Employee waste. Currently, KOF Tacloban employs 70-76 workers in production alone. The capacity and the number of shifts in operation explains this number of workforce. According to a personnel, their employees are well compensated and are given incentives for good performance. Additionally, they also provide a gym for employees who want to work out. But for one to be employed, he or she is subjected to strict requirements and undergoes trainings up to three months before deployed. Each year, the company also provides a refresher training. The compound of CCBPI, which is about 2.4 hectares, utilizes a functional layout where departments are located according to function. However, the Factory uses a Product Layout or Line Layout as resources flow as a line through the process. The process explained in Figure 3 earlier is shown in its actual layout in Figure 4. The cases of empty bottles come in and are unloaded form the trucks and flows throughout the process as shown by the arrows until the bottles are filled, packed and loaded back to the trucks. In addition, KOF has implemented Disaster Risk Reduction Management (DRRM) to reduce the companys vulnerabilities to disasters and to deal with the environmental and other hazards that causes them.

Case Stacks
Empty Cases

Filled Bottles

Packing

Washing

Clean Bottles

Filling

Empty Bottles

Sorting

Cases with filled Bottles

Empty Cases

Figure 4. Facility Layout

Loading / Unloading

Lastly, KOF FEMSA Tacloban Plant is located in front of a major rotonda, in Marasbaras, which is about six kilometres away from the heart of Tacloban City. Tacloban, being the Capital of Eastern Visayas, is a good location with its proximity to its markets where it distributes its product. Also, a major factor for this location was the supply of water, which is the main input or ingredient for the coke products. To date, Coca-Cola is still one of the mostly recognized brands in the Philippines and in the world. Will it be able to keep it up? Operations Management along with the other functions of organizations and consideration external factors can answer that.

University of the Philippines Tacloban College Magsaysay Blvd., Tacloban City

THE OPERATIONS OF COCA-COLA TACLOBAN

A Review on Company Operations

Presented to MS. JOSHA OSIAS Division of Management

In partial fulfilment of the Requirements in BA 187 (Operations Management) First Semester, AY 2013-2014

By MARC JOSEPH T. LOYOLA BSA 5, 2009-37425

October 4, 2013