THE POWER OF A COCA COLA

Big companies are big for some reason. Today I want to speak about Coca Cola a big company with 500 brands and more than 3,500 products. The company, as can be seen in the figure, has approximately 24 million locations with more than 900 bottling plants. So, how can Coca Cola manage the product and information flows?

First of all, Coca Cola company prepares concentrates, syrups and beverage bases. It is also the responsible for consumer brand marketing initiatives. Then, these products are sold to bottling operations. Finally, the bottling partners of Coca Cola manufacture, package, merchandise and distribute the final product to the customers and vending partners, who then sell the branded beverages to consumers.

As can be deduced from the information above, the bottling partners of Coca Cola are one of the most important part of the chain. They work closely with restaurants, movie theaters, convenience stores, among many others and then these customers sell the product to the final consumer at a rate of more than 1.9 billion servings a day.

Figure 1. Coca Cola logistics. Source: Own elaboration.

Another interesting point which make Coca Cola a successful company is the marketing. Coca Cola needs to transmit the power of a Coca Cola so it makes announcements to achieve this. Typically, it creates advertisements that try to reach people showing situations of everyday life. Coca Cola creates different ads depending on the country and the target segment.

According with all this information, two of the most important points of the company are the logistics which facilitates the management of the product flow and permits the availability of the products at the final store, and the marketing which transmits the information to the consumer.

References:

http://www.coca-colacompany.com/our-company/the-coca-cola-system

http://www.coca-colacompany.com/

 

Aurea Jordán

TIME OF MEASURING

At present there are many car companies with assembly lines. Ford is one of the most famous assembly lines. This assembly line had its beginnings at the beginning of the 20th century, but the technology involved in these processes has changed a lot as can be seen in the video. The sequence of processes and the material flow of these factories must be perfectly synchronized to avoid wasting time and money.

When designing an assembly line, you must take into account the number of activities to be performed and the proximity between activities. If you want to minimize the distances traveled to minimize the cost, you can design a matrix that relates the activities and identify if: 1) It is absolutely necessary that two activities are together, 2) Especially needed, 3) Important, 4) Certain importance 5) Indifferent, or 6) Harmful. So in the case of a car assembly line it is important the proximity of the materials used in each activity.

To improve the assembly line it is necessary to know the initial times and, once the improvements are implemented, to verify that the changes have reduced the time spent on the activity. There are many tools to study times. You can use the timekeeping (the time should be multiplied by a correction factor, prevent that the timed person sees the timekeeping). It can also be used Methods Time Measurement (MTM) that breaks down the movement in micro movements. Another tool used for large magnitudes is sampling.

Here you have some templates to study times: http://www.systems2win.com/c/timeObservation.htm

The improvement of activities is facilitated through the use of process simulation tools. These tools allow you to make changes in the process and see how these changes affect the process. This reduces the costs of testing on the actual process, allows more testing, and reduces the need for pilot plants.

References:

http://www.history.com/this-day-in-history/fords-assembly-line-starts-rolling

https://www.uclm.es/area/ing_rural/AsignaturaProyectos/Tema%205.pdf

http://www.lean.org/common/display/?o=2192

http://www.mtm.org/

https://www.arenasimulation.com/what-is-simulation/business-process-modeling-software

Image: http://peru21.pe/multimedia/imagen/t-343055

DRONE, ANOTHER POINT OF VIEW

Nowadays drones appear as an innovative tool with many possibilities. One of the known uses of drones is as messaging tool for transporting products. According with this use, as my colleagues mentioned before, Amazon is working on the Prime Air program where the drones are used to deliver its products to the customers. But, can drones be used for another purpose?

At present, there are many companies which offers different services related with the use of drones. Being a flightless element with suitable proportions for carrying cameras and sensors, drones are used to take aerial images and videos. In the agricultural sector, drones are used for taking pictures of the field, create 3D maps, or for phytosanitary treatments. Drones can also be used as operational support to replace the use of helicopter monitoring for prevention and control of fires, people search or first aid transport, among others.

Figure 1. Phytosanitary treatment with drone. Source: Reproduced from <http://www.dronetools.es/control-de-plagas-y-tratamientos-fitosanitarios/>

The different uses of drones explained before help the logistics of the companies. A drone reduces time of delivery and costs, improves the treatment of the field, generates more security and, in general, improves life of people.

One interesting application of drones is the delivery of drugs to remote places where the people can’t achieve medicines in winter due to the snow, or because they need to travel a lot of kilometers to arrive to a pharmacy, or maybe because they are too old. This is an interesting example where a technology facilitates the distribution and at the same time the life of people.

References:

http://www.amazon.com/b?node=8037720011

http://xn--airdroneespaa-tkb.com/

http://www.dronetools.es/aplicaciones/

http://www.dronplanet.com/servicios-drone/

Aurea Jordán

INVENTORY LEVEL

When you create or work with products or materials, you must have a determined level of inventory in the warehouse to prevent breaking stock. If your stock breaks, you would not be able to serve customers and, consequently, you could lose them. For this reason, it is advisable to create a model that fits your demand and also create an inventory ordering system that fits your model. You should avoid having more inventory than necessary stored, which would increase the costs of storage, or to have less inventory than necessary, which could lead to breaking stock.

The reorder point method and the periodic review method can help us to achieve a level of effective and efficient inventory. These methods are explained below.

The reorder point method (ROP) is based on the request of some products to your supplier when the available quantity in your warehouse is below a certain level. As it is shown in the Figure 1, the quantity requested should cover the period from the reception of an order until it returns to receive another order. We should take into account the demand and the standard deviation to calculate the reorder point (R) because we should have enough product in stock to cover the period L.

Figure 1. Reorder point method graphic. Source: <http://www.infosysblogs.com/supply-chain/2013/01/rop_using_apo_ctm.html>

As it is shown in Figure 2, periodic review method is based on the periodic review of the inventory. When we check the inventory level we see if it is below the determined level. If it is below the level, we request product, if it is not below the level, we forget the inventory until the next review.

Figure 2. Periodic review method graphic. Source: <http://www.supplychainmusings.com/2008/05/replenishment-policies-and-inventory.html>

For example, if you work in a hospital pharmacy you need to have always the drugs that the patients need but you have a limited space so you have to control the inventory. You can apply the periodic review and check the inventory one time per day, but the best way to control the inventory is to have a reorder point because, thanks to the barcodes, the number of drugs in stock is always controlled and you can request more when the stock arrives to a certain level thanks to databases.

 

References:

https://docs.oracle.com/cd/A60725_05/html/comnls/us/inv/roplan.htm

Aurea Jordán

TECHNOLOGY FACILITATES LOGISTICS

When a business is created, the project must address three key aspects called triple bottom line which are the environmental, social and economic sustainability. In connection with this line of work I defined an agro-food related business called HOF3M.

My project is related with the creation of a garden in the roof of the buildings. This garden would be managed by two workers. The first one is in charge of the irrigation installation and its management. The second one is responsible of planting and caring for plants, this person must plant the seeds of season, set irrigation conditions and reap harvest.

Figure 1. HOF3M proposal. Source: Own elaboration.

This project aims to be:

• Environmentally sustainable. According with the web page of Plume Air Report (https://air.plumelabs.com/) nowadays it is increasing pollution in cities. By increasing the number of plants in urban areas CO₂ can be reduced.
• Residents can eat health food.
• Economic. New technology facilitates the management of the crop.

The logistic of this project should be facilitated by the application of new technologies. For example, there are companies such as Phytech and Modpow which provide agricultural sensors. These sensors can study the crop state and send the information obtained to a web application. There are also other companies such as Dynamax (http://www.dynamax.com/products) that allows you to have automated irrigation systems by the use of sensors.

Figure 2. Phytech technology. Source: Reproduced from <http://www.phytech.com/>

Figure 3. Modpow technology. Source: Reproduced from <http://www.modpow.es/es/tecnologia/>

Aurea Jordán

 

 

TYPES OF BARCODES

Today the industry progresses towards automation. For this reason there are symbols that, through the use of electronic scanning laser or cameras, can decode the information they contain. These symbols are called barcodes.

There are different types of barcodes like GS1-128, QR-code, code 39, PDF417, and Maxi Code, among others. Every barcode has different symbols, letters and numbers which encode the information.

Figure 1. GS1-128 barcode with Application Identifiers. Source: Reproduced from <https://pt.wikipedia.org/wiki/GS1-128>

For more information about the different barcodes you can see the next links:

http://www.barcodefaq.com/BarcodeMatch/

http://www.makebarcode.com/specs/speclist.html

http://www.scandit.com/2015/01/27/types-barcodes-choosing-right-barcode/

Barcodes have many uses. Through these codes you can identify the product containing a container, the expiry date, batch number, date of packaging, among others. In addition they are also used to determine how many products have been sold which facilitates the setting of the conditions to replenish a warehouse.

Some other advantages provided by barcodes and their applications can be viewed on the following video:

An important use of barcodes is in the Spanish health system. Inpatient and outpatient pharmacy by using barcode controlled the drugs that are dispensed to patients. This permits to achieve a complete database which contains the number of medications, treatments and diseases of each citizen. Thanks to these databases the Centre for Health Economics and Management (CIEGS, http://www.ciegs.upv.es/) at the Universitat Politècnica de València (UPV) can study the direct economic cost of the drugs of a particular disease and the treatment used in each case.

Figure 2. A pharmaceutical cut the barcode of a drug. Source: Reproduced from <http://www.elnortedecastilla.es/castillayleon/201505/04/medicos-enfermeros-enfrentados-prescripcion-20150501101326.html>

Aurea Jordán

WORKSPACE DISTRIBUTION

When we study the process time we need to see the useless time to determine the improvements. One important aspect which can help us to reduce the useless time is the design of the workspace. We need to establish the area required based on the type of process or product offered, which influences the number of workers and machinery needed.

For the calculation of the workspace must be determined three surface types: static surface, gravitation surface and evolution surface. The static surface is occupied by the worker and machinery, gravitation surface is the necessary space to develop the work, and the evolution surface is the surface required for the routes of materials and workers. Thus the total area required to develop a job is given by the following formula:

Total surface = Static surface + Gravitation surface + Evolution Surface

To learn more about this calculation see the following document:  http://personales.upv.es/jpgarcia/LinkedDocuments/4%20Distribucion%20en%20planta.pdf  (p. 16 – 18)

We can see applied this knowledge to the mascletá (https://en.wikipedia.org/wiki/Masclet%C3%A0). The mascletà is performed in an enclosure, in front of Valencia town hall, in which the static surface would be determined by the workers, firecrackers and machines. The gravitation surface would be the full enclosure because, as you can see in the video, the workers move in the enclosure to provide the service. Finally, the evolution surface for this workspace would be the route that is done to move firecrackers from the factory to the town hall square and the pyrotechnical travel to the town hall balcony of Valencia.

In the same way, if you work in an office, the static surface would be formed by the worker, the desk, the computer and the office supplies. The gravitation surface would be the office, and the development surface could be the route that is performed to other offices, the printer or the room material.

Figure 1. Office distribution. Source: Own elaboration.

Outstanding image: Reproduced from <http://valenciaplaza.com/donde-ver-la-mascleta-online-en-directo>

Aurea Jordán

PROCESS DESIGN

When a process is going to be designed we must know the different types of processes that exist, these are: 1) By projects: one or a few products with a long production period, 2) Batch: different products in the facility are obtained, it can be job-shop or flow-shop, and 3) Continuous flow: always the same product in the same facility. One tool which can help you to identify the process is the product-process matrix.

Figure 1. Product-Process Matrix. Source: Reproduced from <http://www.referenceforbusiness.com/management/Or-Pr/Product-Process-Matrix.html>

Some factors influencing the design processes are capital intensity, the flexibility of workers, vertical integration, the customer participation in the process, the nature of demand, the level of quality of the product or service, the learning effect, the planning, and financial evaluation.

To optimize the production system, it must be simplified, machined, automate and integrate. For this, often are used CAD / CAM tools. Waiting time, transport time, and processing time should be established.

In the following video you can see from minute 2 the logistics facility of Desigual (http://www.desigual.com/). The process is an example of simplification, machining, automation and integration. You can see more information about the process design of Desigual in http://www.ssi-schaefer.de/fileadmin/ssi/images/us/asd/asd_industry_software_case.pdf .

Aurea Jordán

THE FACILITY LOCATION

The location of a facility directly affects the logistics of a company. This affects the production system, the volume of production which will be manufactured and how it will be distributed. The location of an installation must be a strategic decision (long-term).

A new installation requires a major investment and also determines the competitiveness of the company (product costs, poor planning, operator costs, etc.). The location affects the operations department (transport), personnel, and finance, among others.

Source: Reproduced from <http://www.gaebler.com/Starting-a-Business-Location.htm&gt;. Accessed: 03/01/2016.

If a company has more distribution points, transport costs are lower but the cost of the facilities is higher. Therefore, it seeks to reach a point of equilibrium. When we choose the location we must take into account factors such as transport, labor supply, space for expansion, living conditions, among other factors.

Some important exact and heuristic (quantitative) methods used to select a location are: center of gravity method, factor – rating analysis, break – even analysis, and set covering models . We can also use other mathematical programming methods. To learn more about these methods, you can see the links below.

Center of gravity method	http://www.shmula.com/distribution-center-location-optimizing-your-logistics-network/9312/
Factor – rating analysis	http://www.prenhall.com/divisions/bp/app/russellcd/PROTECT/CHAPTERS/CHAP09/HEAD06.HTM
Break-Even analysis	(pp. 81-84) http://mde-lab.aegean.gr/images/stories/docs/HealthCare_FacilityLocation.pdf
Set covering models	http://www.geog.ucsb.edu/~forest/G294download/MAX_COVER_RLC_CSR.pdf
Mathematical programming methods	http://math.nsc.ru/LBRT/k5/Kochetov/Papers/Kochetov_Facility%20Location.pdf

Aurea Jordán

 

The importance of time

The time in a company acquires a vital importance when there are many processes. The time is money invested in the workers, in the service or in the product, but we can spend this money in a profitable way or not. To understand the time of our process, there are three important visual techniques to plan the process: Gantt chart, Program Evaluation and Review Technique (PERT), and Critical Path Method (CPM).

The three techniques mentioned before show the time taken by each component of a process. The Gantt chart is an intuitive method and easy to interpret, but it doesn’t establish the relationship between activities, however, the PERT and the CPM method do it.  The CPM and PERT facilitate the critical path and the time which an activity can be lengthened without delaying the process.

These techniques are closely related with the logistics of a company because they are used to plan, to implement, and to coordinate a business. These tools become more important in the process when there are bottlenecks, processes using the same equipment, various processes in the same plant or processes on demand (we need to know when the product will be ready), among others.

If you want to learn more about these tools and how to use them there are more information in the links.

Gantt chart:	What is a Gantt chart? http://www.gantt.com/ Gantt Chart Template for Excel: http://www.vertex42.com/ExcelTemplates/excel-gantt-chart.html
Program Evaluation and    Review Technique (PERT):	What is PERT? http://searchsoftwarequality.techtarget.com/definition/PERT-chart http://www.referenceforbusiness.com/encyclopedia/Per-Pro/Program-Evaluation-and-Review-Technique-PERT.html Steps in the PERT planning process: http://www.netmba.com/operations/project/pert/
Critical Path Method (CPM):	What is CPM? http://hspm.sph.sc.edu/Courses/J716/CPM/CPM.html Make a CPM (1’ – 5’): https://www.youtube.com/watch?v=SF53ZZsP4ik

Aurea Jordán Alfonso