Operation strategy- Bottler's Nepal

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Kathmandu University School of

Management

Operations Strategy ReportBottlers Nepal Limited

Prepared By: Nikhil and Group (BBA 6thSemester, Room: 208)

Members: Aashish Piya (11716) || Crystal Manandhar (11722)

Kamal Koirala (11732)||Nikhil Narsingh Shakya (11740)

Roshan Gautam(11758)||Sujan Adhikari (11775)||Suman Poudel (11776)

Submitted To: Mr. Sandeep ShresthaFaculty , Operations Management


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Acknowledgement:

This research paper would not be completed without the contribution from various individuals and

organization. We are really grateful for their generous help and support during the preparation of this

project report.

First of all, We would like to offer our sincere gratitude to the KUSOM management in general and Mr.

Sandeep Shrestha (Faculty of Operations Management) in particular who has given this wonderful

opportunity to engage in research at this undergraduate level. It is because of this project that we get to

learn many things regarding the operations of Real world organization like Bottlers Nepal ltd. His

guidelines and persistent support has been of great boost to complete this paper in time.

Further, We would also like to thank Bottlers Nepal ltd management for their generous acceptance of

plant visit ; To be particular, We would like to thank Miss Pallavi Gautam ( PAC executive) who

managed for our plant visit in such a short notice of 2 days, Miss Shraddha Khadka for continuously

keeping up with us regarding the visit and Miss Jarina Bajracharya, who guided us the whole time during

our tour and patiently answered our all the queries without hesitation

Finally, We would also like to thank Ms. Kriti Manandhar, for her consistent support during the

preparation of this paper being an Implant Trainee at the Bottlers Nepal ltd and to all our classmates for

their Ideas, Inspirations and Help as they are assigned with the same project ( But at different

organization).


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Table of Contents

Chapter 1: Introduction

1.1.Study Background ..............................................................................................................1

1.2.Objectives of the Project .....................................................................................................1

1.3.Scope of the project ............................................................................................................2

1.4.Limitations of the Project ...................................................................................................2

Chapter 2: Methodology

2.1.Data Collection Procedures..................................................................................................3

2.2.Variables Measured .............................................................................................................3

Chapter 3: Company Information

3.1.Brief Introduction to Coca-Cola Company ..........................................................................4

3.2.Introduction To The Bottlers Nepal Ltd ..............................................................................4

3.3.Company's Vision, Mission and Purpose ...........................................................................5

3.4.Operations Strategy and Competitiveness ...........................................................................5

3.5.Competitive Strategy ...........................................................................................................5

Chapter 4: Product Information

4.1.Product History ....................................................................................................................6

4.2.Product Design Specifications .............................................................................................6

4.3.Production System ...............................................................................................................7

4.4.Product Lifecycle .................................................................................................................7

4.5.Product Strategy ...................................................................................................................7

4.6.Product Development Process .............................................................................................8

4.7.Production/Operation System ..............................................................................................8


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Chapter 5: Process Design

5.1.Process of Manufacturing The Product................................................................................9

Chapter 6: Other Operations Strategies and Analysis

6.1.Location Strategy ...............................................................................................................14

6.2.Layout Strategy ..................................................................................................................15

6.3.Supply Chain Strategy .......................................................................................................15

6.4.Inventory Management/Warehouse Strategy .....................................................................15

6.5.Human Resource Strategy..................................................................................................16

6.6.Production Scheduling Strategy .........................................................................................16

6.7.Quality Control ..................................................................................................................16

Chapter 7: Recommendations ...................................................................................................17

Chapter 8: Conclusion.................................................................................................................18

Bibliography.................................................................................................................................19

Annex ............................................................................................................................................20


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1.3.Scope of the Project:

Bottlers Nepal Ltd in itself is a larger organization in perspective of Nepalese industrial sector.

As already stated in the introduction, The entire plant is divided into different managerial

departments as in the bureaucratic larger organizations:

Marketing section/Demand Creation Finance Section

Human Resource section (Administration section)

Supply chain (includes Production and Quality Control)

In this regard, since we were observing the major operation process in terms of production and

quality control, so our analysis and description is limited only to the supply chain department.

Other sideline operations in other department were not the part of our study. And with this

concentrated scope, this paper tries to provide in-depth description and analysis of the operations

within supply chain part of the organization and provide recommendation for any improvement

needed.

1.4.Limitations of the Project:

The limitations of this project can be listed out as:

The scope limited within the study of supply-chain Department of organization (i.e.

Production and quality control)

As a observer from management background, We didn't have any knowledge of technical

aspects (Like chemicals, Details of machinery etc), The analysis of the operations is

limited within the simple operation process without any use of jargons.

Some confidential information like the Water Treatment Plant layout chart were not

provided. So, in that context, The paper is limited by the ability to present detailed

information.

Focused more on the description and matching the actual operation with that of the

concept learned, This paper may however be limited by the researchers(group of

students) ability to do in-depth analysis regarding concerns and problems from operations


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2. Methodology:

2.1.Data Collection Procedures:Here is the list of method and procedures used for collecting

the data to be used in the paper

Primary Method: Primary method is the process of collecting the data first hand by the

researcher of the paper themselves. Here, in this report, we have relied majorly upon the

primary data collection procedure to make our paper more credible and accurate. Two major

process used under it are as follows:

Observation Method: As a part of the OM project, we, the group of seven people visited

The Bottlers Nepal ltd situated in Balaju Industrial District on the date 26th of may 2014.

The confirmation of same can be found on the annex which includes the confirmation

letter for visit by Bottlers Nepal ltd. For the major text/body of the paper i.e. process of

manufacturing, Detailed observation was inevitable. It is therefore we had a thorough

observation of the Plant for about half an hour guided by the Supervisor Miss Jarina

Bajracharya.

Direct Interview: Another primary method we relied upon is the direct interview method.

After half an hour session of plant visit, We indulged in another half hour for the direct

interview regarding the questions we needed to get answer of ,with Miss Jarina

Bajracharya( Touring supervisor) and Miss Pallavi Gautam( PAC executive at Bottlers

Nepal ltd)

Secondary Method: Apart from the primary source of the information, completing the

project required the use of secondary sources like the internet searches for the introduction

part ,for downloading some of the layout of Coca-Cola as suggested by Miss Jarina

Bajracharya herself and any other unclear part that we needed to search. Furthermore, A part

of implant report was also provided by one of the implant trainee Miss Kriti Manandhar, so

that we could understand the process better.

2.2.Variables Measured:

The following are the variables measured and analyzed not in the quantitative term but in the

qualitative term as :

Overall Operational effectiveness,

Quality Maintenance effort,

Employee efficiency ,

Inventory and warehouse effort

Supply chain effort.


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3. Company Information

3.1.Brief Introduction of The Coca Cola Company:

The Coca-Cola Company is an Americanmultinationalbeverage corporation and manufacturer,

retailer and marketer of nonalcoholic beverage concentrates andsyrups,which is headquartered

inAtlanta,Georgia.The company is best known for its flagship productCoca-Cola,invented in

1886 by pharmacistJohn Stith Pemberton inColumbus,Georgia. The company operates

afranchised distribution system dating from 1889 where The Coca-Cola Company only produces

syrup concentrate which is then sold to variousbottlers throughout the world who hold an

exclusive territory,except for the two countries Cuba and North Korea

3.2.Introduction to The Bottlers Nepal ltd:

As stated in the introduction part of The coca-cola Company, The Bottlers Nepal Ltd is the part

of a franchised distribution system holding the exclusive territorial right to bottle and sell theflagship product of The Coca-Cola company like Coke, Sprite, Fanta within Nepal. In fact,

Bottlers Nepal Ltd is a part of another large bottler of the Coca-Cola brand named Coca-Cola

Sabco which introduced bottling rights from The Coca-Cola Company for Nepal in

2004.However, with the establishment of Bottlers Nepal Ltd in 1979, local production had

already started .

Bottlers Nepal Limited(BNL), established in 1979 is located in Balaju Industrial District (BID) 7

km from central Kathmandu. The organization is a public organization occupying a total area of

23.6 Ropani with almost all area covered by the plant. Bottlers Nepal limited(BNL) is the only

bottler of Coca-Cola products in Nepal, and has two bottling plants; namely Kathmandu(BottlersNepal Limited-BNL) and Bharatpur (Bottlers Nepal (Terai) limited) which is 160 km from

Kathmandu, its capital. the company as of now is one of the major industry in Nepal under the

beverage sector with high end manufacturing plant and process as per the standard of the

CocaCola company. This plant currently runs under the country manager Salman Latif Rawn. B

The BNL plant located in Balaju (Our project is based on this particular plant, not that of

Nawalparasi, though there exists similar arrangements )has been divided into different sectors for

the proper management and running of the plant. Although the plant is divided into different

sectors, all the sectors are co-related to each other, and follow the motto to be successful in both

producing quality beverage and earn a good profit.The plant is divided into 4 major managerial departments:

Marketing section/Demand Creation

Finance Section

Human Resource section (Administration section)

Supply chain (includes Production and Quality Control)
http://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Syruphttp://en.wikipedia.org/wiki/Atlantahttp://en.wikipedia.org/wiki/Georgia_(U.S._state)http://en.wikipedia.org/wiki/Coca-Colahttp://en.wikipedia.org/wiki/John_Stith_Pembertonhttp://en.wikipedia.org/wiki/Columbus,_Georgiahttp://en.wikipedia.org/wiki/Georgia_(U.S._state)http://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Bottler_(company)http://en.wikipedia.org/wiki/Bottler_(company)http://en.wikipedia.org/wiki/Franchisinghttp://en.wikipedia.org/wiki/Georgia_(U.S._state)http://en.wikipedia.org/wiki/Columbus,_Georgiahttp://en.wikipedia.org/wiki/John_Stith_Pembertonhttp://en.wikipedia.org/wiki/Coca-Colahttp://en.wikipedia.org/wiki/Georgia_(U.S._state)http://en.wikipedia.org/wiki/Atlantahttp://en.wikipedia.org/wiki/Syruphttp://en.wikipedia.org/wiki/Multinational_corporation


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4. Product Information:

4.1.Product History:

The major product we focus in this Paper is the Coke or Coca-Cola itself with slight references

to other flavors of this carbonated Beverage brand like Fanta, Sprite and Kinley soda bottled by

the Bottlers Nepal Ltd within Nepal.

Originally intended as apatent medicine when it was invented in the late 19th century byJohn

Pemberton, Coca-Cola was bought out by businessmanAsa Griggs Candler,whose marketing

tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. As

a substitute for dangerous opiate The prototypeCoca-Cola recipe was formulated at Pemberton's

Eagle Drug and Chemical House, a drugstore inColumbus,Georgia,originally as acoca wine.

So, The product's initial history dates back to 1886 . From then, Till now, the major concentrate

is a still a outcome of secret recipe sold by The Coca-Cola company throughout the world.

Though the major aspect, the secret recipe still remains unchanged, The evolution has occurred

in other part of the product including bottling and introducing other flavors as well. With the

start of bottling in 1891, The bottle design has gone through continuous evolution which can be

seen in the picture attached here. Furthermore, Coke has itself introduced many other flavors of

the coke itself, like Diet Coke, Cola lime and so on , including other product line as well like

Fanta and sprite. In this Regard, BNL plant has a product with a really impressive history.

4.2.Product Design Specification:

As already stated, The product of the company is non alcoholic carbonated beverages. There are

4 different flavors. They are : Coca cola , Fanta , Sprite and Kinley Club Soda

They are packaged in
http://en.wikipedia.org/wiki/Patent_medicinehttp://en.wikipedia.org/wiki/John_Pembertonhttp://en.wikipedia.org/wiki/John_Pembertonhttp://en.wikipedia.org/wiki/Asa_Griggs_Candlerhttp://en.wikipedia.org/wiki/Coca-Cola_formulahttp://en.wikipedia.org/wiki/Columbus,_Georgiahttp://en.wikipedia.org/wiki/Georgia_(U.S._state)http://en.wikipedia.org/wiki/Coca_winehttp://en.wikipedia.org/wiki/Coca_winehttp://en.wikipedia.org/wiki/Georgia_(U.S._state)http://en.wikipedia.org/wiki/Columbus,_Georgiahttp://en.wikipedia.org/wiki/Coca-Cola_formulahttp://en.wikipedia.org/wiki/Asa_Griggs_Candlerhttp://en.wikipedia.org/wiki/John_Pembertonhttp://en.wikipedia.org/wiki/John_Pembertonhttp://en.wikipedia.org/wiki/Patent_medicine


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250 ml RGB

200 ml RGB

500 ml PET

1.5 lt PET

2.25 lt PETNote: Here RGB means returnable glass bottle, The one where the bottle is to be returned to the

seller and PET means Poly ethylene Terepthalate i.e. type of plastic. So basically one is

returnable glass bottle, other is plastic bottle which we can widely see in the Nepalese market.

4.3.Production System:

The production system can be more or less deemed as the continuous system. It is because the

plant operates 24 hours a day, under three shifts of 8 hours each. Only breakdown would be the

normal maintenance work every 48 hours that happens without dismantling. However, having

said that , This continuous working hour is only during the peak season that start from March to

October (summer season) and for the rest of the months the working hour is reduced due to lean

season (winter season). In fact, the major maintenance process happen in the month of November

and December every year when entire production come into an halt. They usually meet the

demand in this session through their stock.

4.4.Product Life Cycle

The product is in its maturity phase in terms of lifecycle. The fact that the Coke has established

itself as a quality beverage brand all around the world and successfully captured the major

market share of the beverage industry ( even in Nepal), shows that the product is in its maturity

phase. Another aspect of the Coke like developing another product flavor(line) like Sprite, Fantaand continuous promotion to reinforce the same perception of CocaCola is the things normally

done under maturity phase of the product. Finally, The competitors like Pepsi has already

established itself and there's a huge competition within these two beverage giants; Again the

common feature of product which is under its maturity phase.

4.5.Product Strategies:

Basically, Bottlers Nepal ltd under the authority of The Coca-Cola company focuses on the

poduct differentiation strategy. Apart from the secret formula that is directly obtained from the

parent company which helps to maintain the differentiation of the product (Coke) from

operations view point, The overall marketing strategy of Coke also adds on to differentiate their

brand and product perception into the mind of customer. For instance: Coca cola( BNL plant)

successfully markets Coke not just any beverage product, but something that spreads happiness

within the consumer's life. It has successfully established itself as the complementary part of

people's life and continuously reinforce the same belief.


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4.6.Product Development Process:

Basically, Product development if needed any starts with the research and recommendation of

the separate marketing department. Marketing Department under BNL continuously forecasts the

daily, monthly demand of its beverage product within Nepal. Apart from that, It continuously

research market for new opportunity as its one of the major focus is to make Coke available to allsegment of the customer. For instance: The recent introduction of 300 ml PET bottle of coke is a

result to penetrate the market further as per the need of customer.

Having said that, The above example is just the development of new bottle not the new product

in overall. As of now, The BNL plant in Nepal lacks separate product development department

for any kind of new product line as introduced elsewhere like Diet coke or Cola lime etc. After

the recommendation, The entire development process is directly handled by operations after

getting permission from the CocaCola Sabco Management.

4.7.Production/Operation System

The operation/system is continuous as already stated with following major aspects:

Input: The input i.e. raw materials like sugar, concentrate, packaging materials, crates etc are all

purchased from foreign countries like Egypt India, Bhutan , Pakistan etc. The more part of it will

be discussed on Inventory and supply chain strategy later.

Process: The process strategy is basically process focused as the facility for different processes

are separately maintained with Water treatment plant , Filling and bottling and Effluent

Treatment plant, separately maintained( The three major processes).Further details about the

process of manufacturing is the next topic to be discussed.

Output: The output from the manufacturing process is sent to the warehouse for the temporary

storage from where it is sent to distributors and retailers for sales. This will again later be

discussed under warehouse strategy.

Feedback: As stated previously, BNL plant strategy also focuses on rapid response especially

from customers. With a robust Consumer Response System, BNL plant addresses any

consumer/customer concerns, ideas, suggestions - either on product and its quality or on a sock

supply-maintenance of equipment etc in friendly and timely manner.

Random Disturbances: The Random disturbances in the production system usually comes from

maintenance work every 48 hours; But they have strict protocol to be followed in that period.

And for other emergencies like any type of disaster, leakage, employee problem, they have huge

board with detail about Emergency plan at front.


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5. Process Design

5.1.Process of Manufacturing the Product:

The overall process of manufacturing the product ( CocaCola) as per our observation and direct

interview can be highlighted by the four aspects:

Water Treatment Plantproducing processed or treated water that will be used as a input

later

Simple syrup manufacturingprocess that manufactures simple syrup ( again the input

to the final production process)

Mixing and bottling( The major process where treated water , simple syrup and major

concentrate as a input gives way to the final Coca-Cola product)

Effluent Treatment Plant that process the outgoing water before disposing so that noharm will be done to the environment by its excretion from the plant.

Out of these four aspect or separate processes, The first three directly links to the process of

manufacturing but the fourth one acts as the subsidiary/supplementary process after the

production. Even under those three aspects, The water treatment plant was not allowed to visit

and importantly it just provides input to an major manufacturing process. So, the major focus

hereafter will be on Simple syrup Manufacturing and Mixing and Bottling.

A. Water Treatment Plant:

The organization gets water from the BID supply and boring well of the organization. The water

needed in the beverage manufacture needs to be the Coca-Cola standard.

The WTP has two processing section of water:

Product water -used in Beverage manufacturing

Process water(chlorinated soft water) -bottle washing, Rinser

Process water(non-chlorinated soft water) -boiler, coolant

A series of actions are performed in water treatment process. Raw water is made usable byremoving undesirable matters that contribute unsafe for use. Some Basic steps of treatment

process of the water is that: The water goes through degasser, then product sand filter to remove

sediments. Then it goes through Product carbon filter to remove any leftover particle by sand

filter. And finally the water is processed into the micron filter for the filtration of the microbes

before passed to simple syrup, mixing and named as product water.


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B. Simple Syrup Manufacturing:

Simple syrup is the concentrated solution of sucrose. Basically it comes from the mixing and

processing of sugar, water, activated carbon and dicalite. Syrup concentration may vary with the

final product i.e. Coca-Cola, Fanta and Sprite but overall process is however same. First,

preparation of filter is done and syrup production is done.

Process flow sheet of simple syrup manufacture:

Calculated amount of treated water ( From Water Treatment Plant)

Maintain temperature at 75oC

Add half of the calculated amount of sugar

Add calculated amount of activated carbon and dicalite

Add remaining amount of sugar

Maintain and hold temperature at 85oC for half an hour

Filter the syrup tank with continuous circulation until clear solution is obtained

Syrup analysis for carbon residue

Lowering syrup temperature (if carbon is absent)

Syrup transfer to mixing tanks

Fig: process flow chart of simple syrup manufacturing

Calculation for sugar, water, activated carbon and dicalite:

Water: During preparation of simple syrup, amount of water and sugar is calculated in term of

unit of beverage where as carbon and dicalite is added in percentage basis of sugar added in

simple syrup tank. Water for syrup preparation is taken 100 times that of the unit of beverage.

Sugar: Sugar addition for simple syrup preparation depends upon the beverage type. For coke adsprite flavor sugar addition is done at the rate of 204kg/unit and for Fanta orange flavor sugar is

added at the rate of 270kg/unit.

Carbon and dicalite:Carbon and dicalite is added at the rate of percentage of sugar added .The

amount of carbon added should be 0.25% of total sugar in weight basis. Similarly, amount of

dicalite added should be 0.21% of total sugar during syrup preparation. Carbon is dissolved in a

tank and pumped to syrup tank. After completion of it, process is repeated for dicalite.

Syrup tank Steam


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C. Mixing And Bottling:

The first two manufacturing process were the important part of the final Process of mixing and

bottling. Providing the major input i.e. Treated water and The Simple Syrup , It makes way for

the final process of mixing and making the final syrup and bottling. The simple syrup is mixed

with the major concentrate in a fixed proportion as required by the Coca-Cola standards Thefinal syrup is called a Base or Beverage . The flow chart below shows the basic processes within

the mixing and bottling part of the manufacturing.

Fig: flow sheet of mixing and filling

With the mixing of the major concentrate directly distributed by The CocaCola Company with

the simple syrup manufactured as per the above process, Final syrup is obtained inside the

mixing tank of 1500 litres. Next step is to proportionately mix Treated water and final syrup to

make the final beverage which is then filled into the bottles under two production lines RGB and

PET . After this, The closure application like Date coding, Final Inspection and Casing is done .

Finally, The Ready product is sent to the warehouse for temporary storage.

Note: The Above mentioned basic processes are same more or less for two production lines

which in detail will be discussed below

concentrate Simple syrup

Treated water

Final syrup

proportioning

Final beverage

filler

filling

Crowning/closure application

Date coding

Final inspection

Casing/Crater Ware housing


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PET AND RGB SECTION:

Production Line I (PET bottle Filling)

This production line is for the PET bottle filling which is commonly known as the plastic

bottle coke. In Line I operation, the pre-form of the PET bottle imported from abroad is first up

all blown up to a required structure -1.5 liter or 500 ml with the help of blown mould. The

capacity of blown mould is 6500 per hour for 1.5 L PET bottle and 7800 PET per hour for 500

ml. Another machine in the same line called labeler attach sticker to the full blown PET bottle

.The bottles then are moved to the filler machine through air conveyor. The final beverage is

made in a same fashion as in Line II but the difference lies only in de-aeration where the gas of

the water is de-aerated by using vacuum compressor and CO2 gas is injected in the beverage.

This all operation is controlled by a device called Paramix. After the production of final

beverage, it is filled in PET bottle and are dispatched cleaned and dried before labeling and

packaging in a secondary pack to a storage house.

In this line, as PET (Poly ethylene Terepthalate) are not returned so, the bottle cleaning or

sanitizing is done by chlorinated water by sprinkling the water in the bottle before filling thebottle.

Production Line II (RGB Bottle Filling):

In the second production line, more sensitive filling is done in the Returnable glass bottle.

Firstly, The machine called Decrater helps the RGB to go through conveyer belt where

preliminary inspection is done by use of High intensity light to judge any unwanted material in

the bottle. Level 1 and level 2 being the signal for further travelling within conveyer belt, If it

shows so, The bottle needs to be washed properly into the bottle washer. The bottle washer

contains five steps:

Pre-rinse: The bottles are cleaned with water at 40C to remove the dirt and other wastage.Soaking 1:The bottles are soaked at 65C in caustic solution for disinfection.

Soaking 2:The bottles are soaked in caustic solution at 75-80C.

Soaking 3:The bottles are soaked in hot water at 60C to de-neutralize or remove the caustic

from the bottle which might contaminate the final product.

Final rinse:It is divided into pre-final and final rinse, where the bottles are finally cleaned by

water at 40oc before moving out from the bottle washer. The water for the pre rinse cleaning are

then from the pre final chamber.

After bottle washing operation the washed bottles are keenly inspected twice to see if the

bottles are washed with the Coca-Cola standard or not before moving to filling section.

Thus washed bottles are inspected in each 2 hours (Using sampling method)for any fault in bottle

washing. Some technical test is done for 33 samples to make sure that bottles do not have any

microbial colonies. Finally rinsed bottle should be free of caustic residue. The frequency of

production of RGB is 430 bottles per minute.Then , The bottle is sent for filling. Next with the

another conveyer belt metal crowning and date coding is done and sent for final inspection. And

finally another machine, Crater stocks the bottle into Crates before sending to the warehouse.


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6.2.Layout strategy: Layout strategy of the BNL plant falls more into product oriented though

its process strategy as we analyzed falls under Process focused. It is because the facility is

maintained so as to facilitate easy flow of materials within continuous production. However,

having said that each major process has separate facility for protection. The Overall plant

layout is pretty effective especially the fact that Warehouse facility, the largest within the

plant exists just backside of the production line and from there the product is loaded and

sent through the truck using back door. Finally, The layout is effective in the sense of

emergency exits. The plant layout is properly designed with emergency exits to vulnerable

places subject to fire and other hazards. Separating the actual production facility from other

departments but still easily accessible is another layout decision they have made right. The

overall layout of the plant can be found in Annex .

6.3.Supply chain Strategy: The supply chain management of The bottlers Nepal ltd limited is

very strong as it is supported by the parent bottler CocaCola Sabco. Every raw materialssuppliers are foreigners. The raw materials for the manufacture are brought from different

country such as concentrate comes from Egypt, chemicals from India, sugar from Thailand,

packaging materials such as perform are purchased from India, Bhutan, Pakistan; returnable

glass bottle (RGB) from India, cartons and crates which are secondary packaging are

purchased from Pokhara (Nepal) and India respectively. They don't do any type of backward

integration with their suppliers. The concern here is that: Importing raw materials like sugar

from outside ( providing reason that they need the Coca-Cola standard) will not prevent any

kind of obstacles from local potential supplier once properly backed by government.

6.4.Inventory Management/Warehouse strategy: Inventory as stated above is supplied by the

foreign suppliers. The Raw materials/Inventory are not stored for a longer period and are

brought to the industry as per the demand at appropriate time. The demand here is

determined by the forecast done by the marketing department. The raw materials are stored

properly in clean and sanitized area with an average storage period before it processing

nearly being 60 days. There is a separate store department with 5 types of stores, one being

for the raw materials, handled by the separate store manager. The stock rotation uses First in

First out (FIFO) process (The raw materials that are stored first in the store house need to beused first). For FIFO, batch no, date etc are properly coded within the inventory and is done

manually. Same FIFO method is applied for warehouse as well.


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6.5.Human Resource strategy: Human resource strategy of BNL is to maintain proper

employee for every aspect of production process, focusing on the labor pool within the

Nepal itself. There are altogether 280 number of employees, having the unskilled person

only centralized to the loading and unloading area. The rest are all semi-skilled or skilled.

Their experience and qualification is either vocational trainee matriculate or bachelors.

Apart from the normal wages, Insurance for any kind of damages and incentives. On the

consent of workers themselves, They can even swap their shift to any of three 8 hours

working shift creating the flex-time. So, Human resource strategy is well managed under

separate HR department.

6.6.Production Scheduling strategy: Basically, Production scheduling strategy of BNL plant

is based on the forecast by Marketing department for the demand of its product on daily

basis. As per the demand, They schedule to produce only one flavor either Fanta, Sprite Or

CocaCola on a day. Here, proper analysis of Demand is the essential part of this process as

improper forecasting can cost a lot. Though we were limited to the operations, but as per thedirect interview, The information for forecasting were collected from the distributors,

retailers and then analyzed. the methods of analysis are not known.

6.7.Quality Control: One of the areas where BNL is very much cautious is the maintenance

and control of quality. The quality control parameters for beverage production can be

divided into BPQI and PCQI which are discussed below:

Beverage Product Quali ty I ndex (BPQI):

Beverage product quality index is a list of parameters by that the quality of beverage is

affected. The sensory and storage quality is associated with BPQI. These are:

Gas volume (G.V.)

Brix

Appearance and Taste

Micro-organisms

It is a necessary parameter of the organization and is performed with a great care where the

Brix and gas volume are regularly checked in the small interval of time of the product to

meet with the coca-cola standard.

Primary Container Quali ty I ndex (PCQI ):

Container parameters are tested and defined by PCQI which is directly and indirectly related

to sensory quality, shelf life, finished product qualities and microbial standards. Theparameters are:

Container and closure condition

Closure function

Net content

Date code

By the virtue of these strict parameters, They've been Awarded ISO 9001:2008 certificate.


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7. Recommendations

As a student observer, we were new to the production process. So, this paper is in no way, in a

situation to recommend any improvement to the production process. That's very technical aspect

of this report. However, as per the analysis of other operations strategies and decisions, There

are something we strongly recommend BNL plant to improve. They are stated as follows:

First of all, The provision of separate product Development Department is something

desirable within the BNL. Considering their strategy to promote beverage of their brand

in every segment of Nepalese market and that the product is already in its maturity phase,

being limited to flavors like Fanta, Coke and Sprite may act as insufficient in the coming

days.

Second and the most important recommendation may be regarding supply chain

management. With every supplier being foreigner, It is highly likely that BNL may face

any kind of obstacles from local potential supplier, farmer of raw materials like Sugar.

The same case that happened recently with KFC. It is understandable that BNL wants to

have raw material with the prescribed coke standard and Nepalese farmer/supplier can't

meet that standard. But then, Investing on backward integration will help both them for

longer term as well as local suppliers, though initial fixed cost may be high.

Third recommendation would be regarding warehouse and inventory management.

Currently, FIFO method is used for both inventory and warehouse management. It

requires proper recording of batch no, lot no, date etc manually. This consumes time as

well as may not be accurate at times. It is therefore suggested to BNL plant to have RFID

technology to automate this system. Again, the cost will be very high, but given the

investment they have placed in this particular plant, it is better to improve this aspect aswell.

And the final recommendation would be regarding layout. The layout of the BNL plant

from the viewpoint of manufacturing is appropriate. But then, There is lack of proper

place for staff to hangout, sit within the premises. Further, There is no any kind of

waiting area for the visitors like us who were there for the visit. This may provide

negative image of the plant to the outsiders who visit the plant.


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8. Conclusion

The process of spreading happiness by the brand coke isn't indeed the simple process. Analyzing

and describing the major part of any organizations i.e. Operations of BNL, this paper can

conclude Bottlers Nepal Ltd indeed has a lot to cover in terms of operations. The way BNL have

managed every aspect of operations from layout to location, Quality to Process and Inventory to

Warehouse is way ahead in terms of general Nepalese Industrial Operations. Apart from the

slight loopholes, undisputedly BNL plant is one of the High end , properly managed plant that

continuous meets the standard of The CocaCola Company.

With huge investment in place, not only has it maintained its money's worth, but has maintained

itself as a benchmark and industry leader. The part of Operations in this regard is very much

crucial as the concerns that need to be addressed on various operations process is very complex.

Operations has been the major aspect in their overall strategy of maintaining the brand and its

history among the consumer. Having said that, It is highly recommendable for the Coke and

BNL in particular to continuously search for any kind of Improvement they can, like suggestedabove within recommendations, to grab the competitive advantage against its major rival Pepsi.


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19

Bibliography

CocaCola Sabco ( Bottlers). (2014, May 26). CocaCola Sabco : Our Company. Retrieved May

26, 2014, from CocaCola Sabco Official Web Site:

http://www.cocacolasabco.com/Page.aspx/OurCompany/vision

CocaCola Sabco. (2014, May 26). Cocacola Sabco: Territory Information. Retrieved May 26,

2014, from Cocacola Sabco Official Web Site:

http://www.cocacolasabco.com/territory.aspx/show/nepal

Khetan Group. (n.d.).Introduction: Bottlers Nepal ltd. Retrieved May 26, 2014, from Khetan

Group Web site: http://www.khetan.com.np/bottlers_nepal.htm

Mahato, Y. R. (2010). Student.A report on Implant Training at Bottlers Nepal Ltd, 10-15.


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ANNEX


25/27

ETP

WTP

ETP

lab

Control

Room

Mo-

bike

parking

Diesel

store

CO2

Room

Utility

section

Marketi

ng/

canteen

Work

shop

Union

room

Storeoffice

Toilet

Toilet

Hazardous wastecollection site

Hand wash

Broken glassdum in ard

Broken glassdumping yard

Waste collection

site

Guard

room

QC

lab

Micro

lab Pref

orm

storeRGB bottling Room

Security

post

Car parking

Administration

Toilet Administratio

Marketing Store

Sugar Store

Crown and Closure

Store

CR Final

Syrup

Simple

Syrup

Room

Blow

Mould

C

PET

Filling

PETPackaging

PET

Storage

CIPstore

Caustic

Store

Panel

Board

Room

Electrica

l Room

Retentio

n Room

Archive

Room

Chemical Storage

RGB Storage

RGB Storage

RGB

Storage

LWD

Office

LWD Office

Warehouse

Office

Quarantine

Area

RGB

ware

Fig: Overall Plant layout of BNL

ETP

WTP

ETP

lab

Control

Room

Mo-

bike

parking

Diesel

store

CO2

Room

Utility

section

Marketi

ng/

canteen

Work

shop

Union

room

Storeoffice

Toilet

Toilet

Hazardous wastecollection site

Hand wash

Broken glassdum in ard

Broken glassdumping yard

Waste collection

site

Guard

room

QC

lab

Micro

lab Pref

orm

storeRGB bottling Room

Security

post

Car parking

Administration

Toilet Administratio

Marketing Store

Sugar Store

Crown and Closure

Store

CR Final

Syrup

Simple

Syrup

Room

Blow

Mould

C

PET

Filling

PETPackaging

PET

Storage

CIPstore

Caustic

Store

Panel

Board

Room

Electrica

l Room

Retentio

n Room

Archive

Room

Chemical Storage

RGB Storage

RGB Storage

RGB

Storage

LWD

Office

LWD Office

Warehouse

Office

Quarantine

Area

RGB

ware

Fig: Overall Plant layout of BNL


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Plant Visit Confirmation Letter


27/27

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Operation strategy- Bottler's Nepal

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