Information Directing Delivery of Dole Bananas

This part shows how information is provided and used at sorts to transform the Dole bananas as described in the previous part.

Long-term production planning

Dole bananas are distributed based on long-term planning for this product.

This is described in fig. 4.21 below:

Fig. 4.21 Long-term planning of Dole bananas (Double-headed arrows show information exchange)

Dole Fresh Fruits Europe in Hamburg handles long-term production planning of Dole bananas in cooperation with its plantation suppliers. Dole Hamburg has a business relationship with Dole Fresh Fruits International (DFFI) located in San Jose, Costa Rica. This is the logistics actor within Dole who handles orders and supplies of bananas and other Dole fruits from Central America to customers world-wide, although mainly in Europe and North America. In Costa Rica, DFFI maintains a business relationship with Standard Fruits de Costa Rica, a Dole owned company that owns and runs banana plantations, the trucks that transport bananas and the banana packing stations. Standard Fruits is the production organisation with offices in San Jose, Costa Rica, and is responsible for the ownership of its facilities and long-term quality of the services it provides. It does not handle the day-to-day operations at its plantations. Dole Hamburg only very seldom has contact with Standard Fruits directly. Production of bananas by Standard Fruits is stable and based on forecasts supplied by DFFI. Dole owns about

BAMA Trading

Dole Hamburg

Other customers

DFFI Costa Rica

Standard Fruits EXCEL annual

forecast documents Annual forecast of orders

DECAR Package supplier Order

forecast

Carton forecast for each plantation Plantations

Production plans

70% of the plantations supplying Costa Rican bananas to Dole. Standard Fruits handles business relationships with its own plantations and the independent plantations. DFFI also handles the business relationship with DECAR regarding the supply of packaging including boxes, straps and corner boards used to stabilise pallets of banana boxes.

At the end of each year, BAMA Trading provides Dole Hamburg with a week-by-week forecast of the expected orders for the coming year. Due to competition from the German low price chain LIDL, which markets bananas at very low prices, BAMA is countering this retail competition by ordering an increasing amount of more low-grade, Ecuadorian bananas that are not supplied by Dole. There is no contract regulating the business relationship between BAMA and Dole. Dole Hamburg receives the annual plans from all its customers, all of whom Dole Hamburg has long-term business relationships with. The annual plans are entered into an EXCEL spreadsheet and a copy of this sheet is sent to DFFI in Costa Rica as an e-mail attachment. DFFI uses this information to inform its various suppliers, including Standard Fruit and DECAR, to coordinate annual plans for supplies of bananas from each plantation and the required packaging as well as other logistics facilities used to handle bananas.

Ordering by the retailer

Ordering by the retailer provides the document that is the basis for assigning goods to logistics activities that supply retailers with goods. The actors and information involved in ordering by the retailer are shown in fig. 4.22 below:

Fig. 4.22 Ordering Dole bananas

Ordering Dole bananas by the retailer involves the same procedures and documents as ordering Corona Strawberries. Dole bananas may be displayed for a few days in the store, and therefore smaller stores do not order bananas every day. Bananas are ordered by the number of boxes, pallets or half-pallets. Each day before 15:00 in the afternoon, the person in charge of produce at the supermarket checks the current supply of bananas, and can tell by the colour of the bananas whether some should be replaced. This person then fills in the order-list and sends it by fax to the BAMA

Retailer Distribution

centre Document:

Product order list

Dagligvare or BaRe distribution centre. Here, the orders from various supermarkets are accumulated and registered into the OLFI information system.

Informing to harvest, pack and transport bananas

This section focuses on how information is exchanged influencing how activities are carried out upstream in the flow of Dole bananas directed to BAMA. The actors and information involved in harvest, packing and transporting bananas are shown in figure 4.23 below:

Fig. 4.23 Informing about transport from the banana plantation

BAMA Trading confirms or adjusts orders according to the annual forecast of Bananas once a week. These order confirmations or adjustments are placed 8 weeks before delivery. Normally, they are adjusted to within 10%

of an average of the annual predetermined forecast. Dole’s customers, according to Dole Hamburg, strive to place orders as close to the annual plans as possible. This order is coordinated with orders from other customers of Dole Hamburg and adjusted on the EXCEL spreadsheet. This new, adjusted total demand for bananas is then e-mailed as an EXCEL spreadsheet to DFFI in Costa Rica where data are coordinated with orders from other Dole sales offices around the world. DFFI then creates harvesting plans for each plantation, giving them the information needed to have the necessary amount of packaging materials and create transport plans within Costa Rica for the designated week.

Based on the 8-week order adjustment from BAMA, bananas are first earmarked with ribbons at the plantation where they are harvested. Many vessels sail from Costa Rica to various world-wide destinations with banana

BAMA

Trading DOLE

Hamburg

DFFI (Costa Rica) 8 weeks advance order

option and final orders

LORRY Order options Plantations

Dole Moin Port Terminal

Goods volume Documents

Stowing plan

cargo on different days of the week. Therefore, harvesting and transport in Costa Rica are carried out continuously. The ship bound for Hamburg sails every Wednesday from Moin. Customers may adjust orders within 3 days of the ship’s departure in order to alter harvest volumes of bananas. About 24 hours prior to sailing, the bananas designated for transport are harvested, packed, and transported to the port where they are continuously loaded until the planned volume has been loaded on board. DFFI sends the Dole goods handlers at Moin transport documents and a stowing plan. Stowing plans are created based on drawings of specific units of packaging required to be unloaded in a certain sequence upon arrival in Hamburg. Also, Dole Hamburg makes stowing plans to secure the correct stowage of goods to secure against transport damage. DFFI also supplies Dole Hamburg with documents containing the necessary product information in accordance with EU demands.

Four documents are created for the transport: a bill of lading, a manifest describing the goods in further detail, a document stating the fruits’ sanitary condition, provided by the Costa Rican Government, and a document proving the country of origin of the bananas (called GSP). These documents are faxed to Dole Hamburg and copies are sent to Dole at Moin to follow the vessel. The original documents are sent by DFFI to Dole Hamburg via DHL courier and arrive after two days.

The bananas are still owned by Dole and are therefore also Dole’s responsibility. These bananas may be traded among different actors in Dole’s industrial network of customers; this also includes the quantities earmarked for specific customers. Every Thursday and Friday, while the goods are at sea, Dole has its sales days for these bananas. The exact amount of bananas registered in specific sizes of boxes combined into pallets is then sold to BAMA. BAMA Trading registers the amount ordered into the LORRY information system.

Coordinating deliveries to distribution centres and retailers

The coordination of supply from Dole and demand from BAMA Trading for volumes for Dole bananas involve the following actors, business relationships and documents shown in fig 4.24 below:

Fig. 4.24 Coordinating deliveries

The BAMA Trading banana product manager is the person responsible for operating the banana ripening facility in Oslo. Goods are collected at Dole’s terminal in Hamburg ex works. BAMA Trading uses the ordered volume to coordinate transport by Nor-Cargo Thermo and COLOR Line from Hamburg to Oslo. This information is registered in LORRY and the logistics department uses it to order the necessary transport capacity from both Nor-Cargo Thermo and COLOR Line. Transport documents are created based on the information in LORRY and faxed to the transportation providers. Upon arrival at the Banana ripening facility, the products are temperature-controlled and the volume is checked against documents. Transportation damage is registered and may be used as a basis for a complaint to Dole Hamburg. This very seldom occurs. Information about the received volume of bananas is registered in LORRY, the temperature registered in a temperature log, and product damage is reported to Dole through the product manager.

Supply of Dole bananas is registered in LORRY and coordinated with orders recorded in OLFI measured in boxes of bananas. However, bananas are at this time being kept at the banana ripening facility, and the daily volume ready for supply may be manipulated a few days in advance by adjusting the temperature in the various compartments of the facility. If the supply is too

DOLE

high, BAMA Trading may offer promotional campaigns to the distribution centres, meaning reduced price by accepting a higher volume. A salesman at the distribution centre carries this form of promotion out by phone with the produce responsible person at the specific supermarket. The banana product manager in cooperation with supermarket chain representatives, plans larger promotional campaigns: larger volumes of bananas are offered at a lower price. Unexpected excess supply may also be sold on the open market at Økern Torv. Small, independent fruit and vegetable retailers usually market these products.

Informing to deliver Dole bananas to the retailer

To deliver goods to retailers information must be provided to a sort that involve the following actors and information as shown in fig. 4.25 below:

Fig. 4.25 Informing to deliver (Picking list is provided and used within the distribution centre)

The picking and delivery of Dole bananas from the distribution centre terminals are done in the same way as with delivering Corona strawberries.

A picking list and transport label are made and used to create new logistics units destined for a specific retailer according to an order. The distribution-truck driver receives order lists and a transport document used to control the transport label on the goods against this transport document, and the goods are then delivered to the retailers according to the documents provided to the delivery truck-driver.

Distribution

centre Transport

company Order list,

Transport document Picking

list

Transport label

Informing about Dole bananas by the retailer

The following types of information exchange at the food retailer involving Dole bananas are shown in fig. 4.26 below:

Fig. 4.26 Informing about Dole bananas at the supermarket

Receiving Dole bananas is done in the same manner for all of BAMA’s products. In the store, bananas are displayed unpacked. A placard hanging over the bananas or a price label states the name of the product and price per kilo. The sticker on the banana informs the consumer about the brand,

“Dole”, and its country of origin, Costa Rica. At the cash register, the sales of bananas are registered in kilos. Therefore, inventory control must be carried out manually using a visually based estimate done by the produce responsible person in the store.