Dr Pepper Snapple Group’s (DPS) new Western distribution huband production facility in Victorville, Calif., is more than just a new facility for the company. It is the culmination of a five-year project dedicated to supply chain efficiencies across its entire system.

During the past five years, DPS developed a system of hubs and spokes — a distribution network that radiates out from a center hub and covers a specific geographic territory. DPS operates 21 plants in North America that now includes five regional hubs in Irving, Texas; Northlake, Ill.; Jacksonville, Fla.; Aspers, Pa.; Williamson, N.Y.; and Victorville.

“We developed these over the last five years to fill in distribution voids and to fill in our network to be the most efficient at getting products from our plants to our customers,” says Derry Hobson, DPS’s executive vice president of supply chain. “Our whole intent was to produce the largest volume products closest to the customers that we serve. That’s the whole reason that the network took this kind of configuration. … We covered 80 percent of the population in the United States with these five locations.”

The Victorville hub was necessary for DPS because many of the products that the company distributes in its warehouse direct system were shipping from the East Coast, Hobson says. For Clamato, DPS used to source the ingredients in the United States, ship the ingredients to Mexico to make the product and ship the product back to the United States. The new Victorville hub eliminated a plant in Mexico and in southern California along with a co-packer and three warehouses. The new Western hub’s distribution area will include territories from Denver to the West Coast.

“Putting a facility on the West Coast gives us a lot quicker response to the customer, a lot less road miles and a lot less working capital in the system,” says Eric Gold, DPS’s director of engineering.

The new Victorville facility offered a prime location in terms of ground, air and rail transportation. The facility is located in the Southern California Logistics Airport, the former George Air Force base, and is a Local Agency Military Base Recovery Area (LAMBRA), for which the state offers tax credits that reduce the cost of hiring new employees and investing in equipment. The city of Victorville also constructed an industrial wastewater treatment facility to accommodate industrial discharge for food and beverage manufacturing in the area.

In addition to the other logistics benefits, DPS’s largest supplier, Plastipak Packaging Inc., built a new plant in Victorville to make bottles for DPS. “You don’t want to move to a location like that and still ship bottles or materials in from hundreds of miles away,” Hobson says. “Luckily they are a really great company, and they do a great job for us all over the country. They made a pretty big investment themselves — $58 million to put a plant in right down the street.”

Built for flexibility

DPS purchased the land for the new facility on Feb. 23, 2009, and received its certificate of occupancy exactly one year later, Gold says. At the peak of building, the facility had 500 contractors in it at one time and, to date, has logged 245,000 man hours of labor.
 

“Fast tracking a project like this creates challenges,” Gold says. “If you talk to anyone in the construction industry, what we did here was very unique because we had a lot of staff working side by side, where ordinarily you do it sequentially in construction.”
 

The company already had forecasted what products it was going to manufacture at the new facility and what other facilities were going to be consolidated before the actual land was purchased. DPS also had much of the engineering of the building decided before the location was chosen, Gold says.
 

Located on 57 acres, the new 850,000-square-foot facility represents a $150 million investment by DPS. The Victorville facility features equipment to produce cold- and hot-fill products, including carbonated soft drinks (CSDs), energy drinks, teas, juices and bottled water. While the plant will not produce Dr Pepper, it will manufacture a range of DPS brands, including Snapple, Mott’s, Hawaiian Punch, Nantucket Nectars, Clamato, Deja Blue, ReaLemon and Mr. and Mrs. T. When the facility is fully operational, it is projected to produce 40 million cases a year and employ approximately 200 people, Hobson says.
 

The new facility offers 550,000 square feet of warehouse space and 300,000 square feet of production. The production space features five bottling lines with the room to add three more lines. While the current facility is a little more than 1,400 feet in length and 600 feet wide, it still only takes up about two-thirds of DPS’s acreage and allows for building expansion.
 

The facility’s first line became operational in March, and the final bottling line came online this month. The plant’s line one is a hot-fill glass bottling line that will fill products such as Snapple and Nantucket Nectars in 16-, 17.5- and 20-ounce bottles. The line fills up to 650 bottles a minute.
 

Line two is a hot-fill and ambient-fill PET line that produces bottles from 8-ounces to 32-ounces, with the bulk of the products being 32-ounce, 20-ounce and 500-ml. bottles. The line features fill level control technology and produces brands such as Mr. and Mrs. T, Clamato, Snapple and Mott’s. The line can fill 1-liter bottles of Mr. and Mrs. T mixers at a rate of about 700 bottles per minute.
 

Line three is hot-fill and ambient-fill as well, but it produces multi-serve bottles, such as 64-ounce and 1-gallon bottles. It can fill 180 1-gallon bottles per minute and 400 64-ounce bottles per minute. Products like Hawaiian Punch are ambient-filled while the line also produces hot-fill products, such as Mott’s Apple and Tomato juice and Clamato.

Line four is a can line, which offers capabilities not seen in many can lines, because it is able to fill ambient, hot-fill and CSD products, Gold says. The line fills 8-ounce squat cans to 16-ounce cans. The company will produce some of its CSDs along with Mott’s, Clamato, Snapple and Schweppes products as well as co-packaging products on the line. The can line fills at speeds up to 1,400 cans per minute.

Line five is a small-bottle PET line able to produce ambient-fill products and CSDs. The line will produce Deja Blue bottled water, Hawaiian Punch, teas, and other non-carbonated and carbonated beverages. The line can fill up to 600 1-liter bottles per minute.
 

About 85 percent of the equipment is new, but a few pieces were rebuilt and moved from facilities the company closed, Hobson says. For example, lines one, four and five contain moved and reconfigured equipment, while lines two and three are completely new lines. Each of the lines features a robotic palletizer at the end.

 

“For us going into robotics, it gives us a lot of opportunity toward sustainability as well as it is easier to play out different products,” Gold says. “Our consumers like us to be able to give them a lot of selection and being quick and being able to changeover is important too.”
 

The variety of equipment in the plant provides DPS with greater flexibility moving forward.
 

“Any of our volume growth or our sales initiatives that have anything to do with the West Coast, Victorville is going to be the site that it is going to go into,” Hobson says. “New product innovation — we have a new product coming out this summer called Mott’s Medleys, a juice that includes two servings of fruits and vegetables in every glass — will be produced in Victorville.”
 

While DPS has two other bottling facilities in California, one in Sacramento and one in Vernon, neither has the resources of the plant in Victorville. The Sacramento facility produces a variety of products but cannot manufacture hot-fill products, and the Vernon facility produces CSDs and supplies the Los Angeles area. For the amount of products the facilities can produce, it did not make logistical sense to remove production from those facilities either, Hobson says.
 

Victorville’s distribution center has been operational since the end of December. DPS distributes around 1,900 SKUs from the warehouse, which includes items not made at the plant, such as Mott’s applesauce, Hobson says.

 

“Those products used to have to go to several different warehouses,” Hobson says. “Then we had to move them back and forth, and that’s not an efficient model. Now, we can put it into one location and send mix loads back out to our customer, which is much more efficient.”
 

The facility offers 44 docks, with the dock that receives ingredient supplies positioned near the ingredient storage rooms so materials do not have to cross the entire warehouse, Gold says. Additionally, the building has a two tanker unloading bay, so products such as sweeteners and juices can be unloaded and loaded inside the building and away from the outside environment.

Located in a seismic area, the facility is designed to withstand earthquakes. “The building is built around multiple buildings so that all will move independent of each other if there is movement,” Gold says. “There is a maze of rebar underground here that ties it all together and heavy rebar under columns. These are all considerations for long-term reliability and lower maintenance costs for a building of this size.”

 

The utilities and support in Victorville are unique and larger than those found in many beverage plants as well, Gold says. “Since we have so many hot-fill products, we have a lot of capability when it comes to cooling and heating,” he says.

The facility features a total of 1,950 boiler horsepower, and the company chose an efficient cooling system. It built a stand-alone machine room where the refrigeration equipment and ammonia are contained. The ammonia is cooled with cooling towers, and instead of transporting ammonia outside, the system transports cooling water into its machine room.
 

Being a hot-fill/cold-fill plant, the company also made it a point to capture what would be wasted from heating and cooling processes.
 

Much of the facility’s equipment features advanced technology, including aspects that will aid the building in achieving Leadership in Energy and Environmental Design (LEED) status from the U.S. Green Building Council. The building currently is undergoing certification.
 

In addition to LEED pieces the plant includes like using low-emitting materials for carpets, paints and adhesives, the building uses a white membrane roof, lightly colored exterior concrete and high-efficiency lighting with occupancy sensors. One of the biggest LEED features is the plant’s water system, Gold says. The facility offers both nano and reverse osmosis water filtration systems within the plant. The reject concentrate from the reverse osmosis and nano systems is collected, and half of the water is recaptured through a brine recovery system.
 

“Our reject rate is actually half of what it would be from those systems, so we’re capturing more of the water,” Gold says.

In addition, the building contains a recycling center that separates recyclable materials, such as PET, glass, aluminum, shrinkwrap and straps. Waste water discharge also is designed to be treated onsite and then released to the city’s treatment plant.
 

For energy efficiency, the facility uses a variable frequency drive so the plant does not run equipment over capacity. The building also uses an energy management system for its heating, ventilating and air conditioning systems and Energy Star-rated equipment. Many of the technologies DPS included in the plant are environmentally smart and fiscally beneficial.

“It was financially the right thing to do, and environmentally it was just smart decisions of where we stood as an organization,” Gold says.
 

DPS has worked for the past five years at removing costs from its production and distribution network, and making its system more efficient will be on its docket for the foreseeable future. With the Victorville facility in its fine tuning stages, the company doesn’t have another big project on the drawing board right now, but “every day we look to improve our system and that won’t change,” Hobson says. BI

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