Productions and Operations Report of Cargill,

Incorporated: Pulilan Plant Branch

By

Alexander Justin Tanhueco

Daphne Cervantes
Renz Verzosa
Jericho Nicasio
Kyle Navarro
Paulo Marquez Tatang

An Improvement Plan Paper Submitted to the School of Far Eastern University in Partial
Fulfillment of the Requirements for the Degree of

Institute of Tourism and Hotel Management,

Productions and Operations Management

Far Eastern University

November 2020
 TABLE OF CONTENTS

TITLE PAGE i
TABLE OF CONTENTS ii
SUMMARY OF REVISIONS iii

CHAPTER I: INTRODUCTION TO PRODUCTION AND OPERATIONS

MANAGEMENT 1
Company Profile 1
Business Scope 2
History 3
Management Team 4
Industry 5
Cargill’s Mission, Vision, and Objectives 5
Organizational Strategies 5
SWOT Analysis 6
CHAPTER II: INTRODUCTION 7
CHAPTER III: OPERATIONAL ACTIVITIES 8
Plant Location 8
Technology 8
Scheduling, Inventory and Capacity Management 10
Process Design 10
Planning and Budgeting 13
Quality Management 13
Design 13
CHAPTER IV: DESCRIPTION OF SUPPLY CHAIN 15
CHAPTER V: RECOMMENDATION 15
REFERENCES 17
APPENDICES 18

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SUMMARY OF REVISIONS

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 CHAPTER I: INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT

Company Profile

Cargill provides food, agriculture, financial and industrial products and services to

the world. Cargill started doing business in the Philippines in 1947 when the vegetable oil

division started buying copra for export to the United States. It was Cargill’s first office in

Asia. Cargill Philippines now employs over 950 people throughout the archipelago. Our

primary offices are in Taguig City (headquarters), Bulacan, Batangas, Laguna and General

Santos City, with several satellite offices in strategic locations all over the Philippines.

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Business Scope

Animal Nutrition

Cargill is a leading animal nutrition supplier with an innovative portfolio to nourish

animals safely and efficiently. We provide swine, poultry and aqua feed, along with the

premix solutions. We also own and operate four feed mills located in Villasis, Baliuag,

Pulilan and Villanueva. We have also recently invested in an animal nutrition facility

dedicated to manufacturing Provimi premix solutions to serve primarily medium to large

livestock farms and feed millers.

Poultry Products

Cargill has partnered with Jollibee Foods Corporation for the formation of a joint-venture

poultry processing facility, Cargill Joy Poultry Meats Production, in Santo Tomas, Batangas.

The business will have an integrated supply chain to ensure high quality and safe food

products.

Grain and Oilseeds

Cargill a supplier of grain and meal, serving a wide variety of customers in both the

food and feed industries. We own and operate a copra crushing plant in General Santos

City, producing crude coconut oil and copra meal for domestic and export markets. Cargill

also operates several copra buying stations in the country to help coconut farmers gain

greater access to global markets.

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Food and Beverage Ingredients

We offer a broad portfolio of food and beverage ingredients including starches and

sweeteners, and texturizing ingredients. We operate a joint-venture carrageenan

(hydrocolloid) production plant, Philippines Bio Industries, in Canlubang Laguna which

produces refined carrageenan for export – one of our two global carrageenan

manufacturing plants. We also import refined palm oil from Malaysia.

History

● 1991 Pulilan Plant was constructed with a land area 41,000 sqm 

● 1992 Pulilan Plant inaugurated

● 1999 Cargill establishes an official Strategic Intent and revises its company

architecture, reorganizing its traditional divisions into 102 business units focused on

its customers, innovation and performance.

● 2000 Cargill started its operations in the Philippines for feeds where part of the

acquisition is agri-branch (producer of Purina Products)

● 2001 Pulilan and Villa Sis Plant merging and acquisition by Cargill

● 2003 For the first time in history, Cargill’s earnings surpass US $1 billion.

● 2008 Cargill introduces Truvia™ (pronounced Tru-VEE-a) natural sweetener, a great-

tasting, zero-calorie sweetener made from rebiana, the best-tasting part of the

stevia leaf.

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 ● 2011 Cargill significantly grows its global animal nutrition business by acquiring

Netherlands-based Provimi, adding premixes and additives to its portfolio of

products.

● 2015 Cargill celebrates 150 years of helping people and organizations thrive.

Management Team

The Cargill Pulilan plant has been operational since 1992 and was acquired by Cargill

in 2010 through a merger acquisition. Located at Pulilan, Bulacan, Cargill has around 135

employees on site. Aside from its manufacturing facilities which consists of 2 plants (Pulilan

1 and Pulilan 2), the district offices are also based here.

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Industry
The Cargill Pulilan plant mostly focuses on the animal nutrition industry. The plant

manufactures livestock feeds particularly for swine, poultry and aqua as well as basemixes

and concentrates.

Cargill’s Mission, Vision, and Objectives

Mission

“Our mission is to create distinctive value.”

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Vision

“Our vision is intended to unite, challenge, and inspire everything we do. By embracing and

acting on the following ideas, we will drive Cargill to achieve its vision for the future.”

Objectives

“Our objective is to be the global leader in nourishing people.”

Organizational Strategies

Cargill’s implements a top down leadership approach. Top-down management occurs when

goals, projects, and tasks are determined among your organization’s senior leaders, usually

independently of their teams. These goals, projects, and tasks are then communicated and

tasks are delegated to the respective teams within the organization.

SWOT Analysis

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 CHAPTER II: INTRODUCTION

The Philippine Animal nutrition industry plays an essential role in the agriculture and

fisheries development in ensuring food security by providing inputs to the livestock, poultry,

and aquaculture sectors. Cargill, as one of the major players of this industry, focuses mainly

in livestock feed processing as well as the processing of basemixes and concentrates. This is

a company that produces various kinds of feeds and provides farmers a broad array of farm

supplies for efficient livestock production. This study is about Cargill, Incorporated: Pulilan

Plant branch and assessing the plant’s current operations to identify its key strengths and

shortfalls. The researchers will analyze all data collected from the company and provide a

recommendation.

The objectives of the study are the following:

a.) To assess and evaluate the current production operations of the Cargill Pulilan plant

b.) To identify or determine problems with the operating procedures

c.) To come up with a recommendation that will help the company reduce if not completely

remove inefficiencies in the production of Cargill Pulilan plant.

Scope and Limitations

The study will only focus on the location, layout, operations and production of the lines 1

and 2 of the feeds production process of the plant in which they store their raw materials

and finished goods. Outside factors which are considered to be uncontrollable are not

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included in the study. Due to confidentiality, limited data regarding costings and the

production schedules were provided.

CHAPTER III: OPERATIONAL ACTIVITIES

Plant Location

The Cargill Pulilan plant has been operational since 1992 and was acquired by Cargill

in 2010 through a merger acquisition. Located at Pulilan, Bulacan, Cargill has around 135

employees on site. Aside from its manufacturing facilities which consists of 2 plants (Pulilan

1 and Pulilan 2), the district offices are also based here. The plant is situated near major

roads and near the express ways which makes the location suitable for distribution

operations.

Technology

The plant manufactures livestock feeds particularly for swine, poultry and aqua as

well as basemixes and concentrates. The Cargill Pulilan plant is a fully automated plant from

raw materials elevation, processing, up to the bagging of the finished products. Although the

Cargill Pulilan plant is automated  from raw materials elevation, processing, up to the

bagging of the finished products, only the bagging line of the production process utilizes the

use of robotics. The robot can palletize the products at a rate of 1200 sacks per hour (400

coming from line 1 and 800 from line 2). Sacks containing the products goes into the robot

work area through conveyor belts with sensors attached to it. Once the sensor detects the

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sacks, the robot would automatically grasp the sack and carry it over the pallets releasing

them and stacking them until 9 stacks of sacks is reached.

Once the stacks are complete, the conveyor under the pallet automatically moves forward

so forklift trucks can easily transport the pallet. An indicator light would blink yellow and a

buzzer will turn on once the stacks are completed, the machine will initiate “PAUS” to give

time for the forklift truck to relocate the pallet and will resume once done by pressing a

push button at the controller. The same thing happens when there is a problem, the only

difference is that indicator lights would blink red and robot would initiate the “BREAK”.

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 Advantages of CIM/Automation includes error reduction, speed, flexibility and a high

degree of integration. Advantages commonly attributed to automation include higher

production rates and increased productivity, more efficient use of materials, better product

quality, improved safety, shorter workweeks for labour with only machine operators the

needed laborers, and reduced factory lead times. Higher output and increased productivity

have been two of the biggest reasons in justifying the use of automation. Automated systems

performs the manufacturing process with less variability than human workers, resulting in

greater control and consistency of product quality. Also, increased process control makes

more efficient use of materials, resulting in less scrap.

Scheduling, Inventory and Capacity Management

The plant utilizes a 3-month moving average where forecasting is done based on a

percentage of the 3 months past actual regional sales data. The plant can process 144000

tonnes of product per year, this includes a mixture of swine, poultry, and aqua feeds as well

as basemixes and concentrates. It was noted from the interview that capacities for both

lines 1 and 2 are 400 bags and 800 bags per hour respectively.

Process Design

The plant implements a standardized processing of raw materials into finished goods

which is illustrated and explained below.

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1. Receiving of raw materials

Before delivery trucks enter the plant, biosecurity procedures are set to motion. The

raw materials undergo a rigid physical test and are examined to ensure that they are

free from infestation.

2. Storing of Raw Materials

The raw materials are poured to the pouring pit which are conveyed and elevated to the

cleaner, the coveryors are equipped with magnets in order to separate foreign materials

while the cleaner ensures that any remaining foreign and critical hazard materials are

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removed from the batch. The distributor machine that segregates the raw materials into

separate raw material bins which are then scaled and collated for the right product

formula mix.

3. Grinding

After collating and scaling, the product goes to a conveyor and elevator into the hopper

where the product mix is contained and are fed to the feed mill. The feeder controls the

amount of product being fed to the feed mill. After passing through the grinder, the

product is thoroughly mixed in the mixer in order to ensure even distributions.

4. Pelletixing

After mixing, the products are distributed into different mash bins. Depending on the

form of the product (mash, pellet, or crumble), the product would either go to the pellet

mill or go straight to bagging. Pellet and Crumble goes into the conditioner where the

products are binded and cooked from its powdered form, these are then pressed into

the pellet mills to form the pellets. The pellets then go into the cooler to avoid moisture

when bagging while crumbles go into the crumbler before going into the cooler. On the

other hand, mash goes straight into the bagging process.

5. Bagging and Palletizing

The products are weighted into either 25kgs or 50kgs, bagged into the sacks and sewn

shut. The products are then palletized, stored, and ready for distribution. 

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Planning and Budgeting

The company prepares their plans and budgets on a 5-year horizon. Targets and Key

Performances Indicators (KPIs) are set for the year to gauge overall company performance.

Quality Management

The visions of the company are being cascaded to managers and employees at the

beginning of the year. The management offers in-house training as well as on-line materials

to train their personnel depending on their job assignments. People are given stretched

roles to prepare them for the next-level roles. The company provides incentives based on

the individual performance as well as the company’s performance as a whole.

Design

The Cargill logo actually came together pretty quickly. Cargill was undergoing a strategic

shift from a commodities seller to a business solutions provider. Setting the logo in italics

signaled progressiveness, while the stylized leaf was a nod to the company’s old logo and its

agricultural heritage.

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The Cargill logo is a tribute to the company’s agricultural heritage. Green, being one of two

main colors of the brand’s visual identity, symbolizes nature with its energy and the

company’s progressive approach to it. The Cargill logo is composed of a wordmark with a

graphical symbol on its top and a company’s motto on the right. The brand’s name

inscription is executed in a bold italicized sans-serif typeface, which is close to Helvetica

Neue Cond Bold Oblique, created by Eduard Hoffman and Max Miedinger. The font looks

strong and solid and reflects the company’s power and trustworthiness. The stylized leaf,

placed above the wordmark, starts from the top of the letter “A” and ends above the “I”,

replacing its dot. Its elegant rounded shape adds brightness and sophistication to the logo,

celebrating the brand’s heritage. The symbol was inspired by the original Cargill logo,

designed in 1966. The company’s motto “Helping The World To Thrive” is placed in the right

from the nameplate and set in three levels, executed in black and “Thrive” in dark green,

corresponding to the emblem’s color.

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 CHAPTER IV: DESCRIPTION OF SUPPLY CHAIN

CHAPTER V: RECOMMENDATION

Automation has many advantages as compared to manual labor. First, machines can

perform work faster with precision than humans. In addition, most machines can work for a

full day without stopping as opposed to manual laborers, which as the labor code

mandates, are required to have lunch and fatigue breaks for an 8-hour normal work hours

with every exceeding hour charged as overtime. Machines also provides the opportunity to

relieve humans from repetitive, hazardous, and unpleasant working conditions which

greatly increases worker safety. Although automation can be beneficial in a company’s

operations, there are also disadvantages in adapting a fully-automated production system.

For instance taking into account socio-economic factors, manual operations enables the

company to provide the community with more job opportunities while switching to

automation decreases them. In addition, it may be costly to switch to an automated

process. The company would have to consider economical factors and be able to justify if

benefits derived from automation would outweigh its costs. 

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 In the case of Cargill Philippines, Pulilan Branch, although its downside is  that it

would take several years for them to get their return on investment (ROI) for the integration

of a fully-automated system into their production operations. It is remarkable that the plant

can produce 144000 tonnes of product per year with only a handful of workers manning

and overseeing the production process. Reports have shown a significant increase in plant

efficiency as opposed to when their operations were fully manual.

In addition, although location of the Pulilan plant is excellent with its access to major

roads making an easy sourcing of raw materials as well as supplying of finished goods, the

company should identify looking at where the big customers are located and consider

putting up warehouses near them so customers can easily get the feeds at a lower freight

cost.

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 REFERENCES

Cargill is committed to helping the world thrive. (n.d.). Retrieved November 10, 2020, from

https://www.cargill.com/

Cargill is committed to helping the world thrive. (n.d.). Retrieved November 10, 2020, from

https://www.cargill.ph/

Steiner, A., Writer, M., Schneider, G., & Writer, M. (2012, February 02). Cargill's new logo:

Why it works. Retrieved November 11, 2020, from

https://www.minnpost.com/business/2010/11/cargills-new-logo-why-it-works/

Ihor. (2020, July 31). Cargill Logo. Retrieved November 11, 2020, from

https://1000logos.net/cargill-logo/

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APPENDICES

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