proceedings of the international conference on … · usually located near the sugar cane fields....

Proceedings of the International Conference on Industrial Engineering and Operations

Management Bandung, Indonesia, March 6-8, 2018

© IEOM Society International

Implementation of Production Planning Tools in

Sugar Industry

Santosh Gudagunti

Master of Science in Industrial Engineering

Lawrence Technological University

Southfield, MI 48075, USA

[email protected]

Dr. Ahad Ali

A. Leon Linton Department of

Mechanical Engineering

Lawrence Technological University

Southfield, MI 48075, USA

[email protected]

Abstract The aim of this paper is to improve the condition of sugar industry by identifying and eliminating

the waste by applying the production planning tools and lean principles. Production lead time reduction is

an important means to improve productivity in manufacturing industries. The forecasting of sugarcane

supply is carried out using simple moving average, the forecasting of sugar production capacity of industry

and sugar market demand is studied and analyzed to see whether the company can satisfy the demand in

future. The MRP is also carried out for the chemicals like limestone, phosphate which are bought from

outside. The paper also focuses on reducing the break downs in an industry and reduce the waiting time of

the sugarcane delivery. The implementation procedure is discussed. The feasibility and the significance of

lean production are discussed and the results are also shown.

1. IntroductionThis research paper addresses the application of production planning and control concepts to Sugar industry

which is continuous processing industry. Continuous production is a flow production method used to manufacture,

produce, or process materials without interruption. Continuous production is called a continuous process or

a continuous flow process because the materials, either dry bulk or fluids that are being processed are continuously in

motion, undergoing chemical reactions or subject to mechanical or heat treatment. Shri Prabhulingeshwar Sugars &

Chemicals Ltd., founded by Mr. Jagadeesh S Gudagunti is an integrated company primarily engaged in the

manufacture of sugar and allied products. The company was founded in 1999 in Siddapur Village, Jamakhandi Taluka,

Bagalkot District.

1.1 Problem Statement Production planning and control have been widely used in discreet industry application but the application

of Production planning and control to the continuous process industry have been fewer. This is because such industries

are inherently more efficient and present relatively less need for such improvement activities. The sugar should be

produced continuously to meet the daily production target. The company is failing to meet the customer demand due

to lack of sugar cane availability, break downs, non-value-added activities.

1.2 Objective The objective of the study is to improve the production of sugar by reducing the time taken for non-value-added

activities such as Setup, Movement of material by using lean tools. The objective is also to improve operator safety

and reduce fatigue and reduce the break downs.

1.3 Literature Review Forecasting by moving average method:

If a time series is generated by a constant process subject to random error, then mean is a useful statistic and

can be used as a forecast for the next period.

Averaging methods are suitable for stationary time series data where the series is in equilibrium around a constant

value (the underlying mean) with a constant variance over time.

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mailto:[email protected]

mailto:[email protected]

https://en.wikipedia.org/wiki/Flow_production

https://en.wikipedia.org/wiki/Manufacturing




The Mean: Uses the average of all the historical data as the forecast

When new data becomes available, the forecast for time t+2 is the new mean including the previously observed data

plus this new observation.

This method is appropriate when there is no noticeable trend or seasonality.

Forecasting by Exponential smoothing method: The simplest exponential smoothing method is the single smoothing (SES) method where only one parameter

needs to be estimated. Holt’s method makes use of two different parameters and allows forecasting for series with

trend. Holt-Winters’ method involves three smoothing parameters to smooth the data, the trend, and the seasonal

index.

Material requirement planning: Material requirements planning (MRP) is a production planning, scheduling, and inventory control system

used to manage manufacturing processes. Most MRP systems are software-based, but it is possible to conduct MRP by

hand as well. ... Plan manufacturing activities, delivery schedules and purchasing activities.

2.0 Method of Producing Sugar in Sugar Industry The Below picture is a Prabhulingeshwar Sugar plant located in Karnataka, India. The crushing capacity of the plant

is 10,000 Tcd

Figure 1. Shri Prabhulingeshwar Sugars & Chemicals Ltd.

2.1 Raising the sugarcane Sugarcane is best grown in warm climate with adequate rainfall. The plant uses 150 to 310g of water to

produce 1g of dry substance. A total rainfall between 1150 and 1450 mm is adequate to give the proper yield.

Optimum temperature to grow the sugarcane is between 32 to 38 degrees, temperature above 38 degrees and below

20 degrees will be the worst case to grow sugarcane. High humidity between 80 to 85% favors rapid cane elongation

during growth period. A moderate value of 45 to 65% coupled with limited water supply is favorable during the

ripening phase.

Figure 2. Sugarcane separation from machine

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2.2 Sugar Mills Usually located near the sugar cane fields. Here the raw sugarcane separated from the plant and transported

to a refinery. First, the sugarcane stalks are washed and cut into pieces by rotating knives, then hammered before

entering through huge rollers. The huge roller presses the juice out of the shredded pulp. This juice is then. Figure 3

shows the conventional type of mills.

Figure 3. Milling process

2.3 Clarifiers By adding milk of lime and carbon dioxide. The Co2 reacts with the mixture to form the calcium carbonate,

this calcium carbonate attracts the plant material like wax, fats and gums from the juice. In a clarifier, the calcium

carbonate and other unrequired materials separates from sucrose solution and settle at the bottom.

2.4 Evaporators It is a stage where the water is removed from clarified juice in multiple stages under vacuum. Here the juice

is boil at lower temperature to protect caramelization. The juice become clear, rich brown syrup during this step.

2.5 Crystallization Here the last portion of water is evaporated under very tight controls in vacuum pan. Pulverized sugar (seed

grain) is fed into the pan as the water starts to evaporate the crystal starts forming this semi liquid is called magma

(mixture of molasses and sugar crystals). This magma is the sent to centrifuge. Centrifuge is a large perforated basket

spinning rapidly which separates the molasses from sugar crystal leaving behind a sugar. This raw sugar is wet. Then

the wet sugar is passed through hoppers which dries the sugar. The fig 4 shows the boilers used in the Sugar plant.

Figure 4. Boilers in Sugar industry.

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3. Forecasting Sugarcane supply using Moving Average method The table 1 shows the supply of sugarcane to the industry since 2010. The supply of sugarcane for 2017 is

predicted using simple moving average method. It is very important to predict the supply of sugarcane for present year

so that the production process go smoothly. Table 2 shows the summary of table 1.

Table 1. Forecasting the sugarcane supply

Year Actual Supplied

in (million Tons)

Forecasting m=3

(million Tons)

Forecasting m=4

(million Tons)

MAD for

m=3

MAD for

m=4

2010 0.86

2011 0.96

2012 1.04

2013 1.13 0.95 0.18

2014 1.24 1.04 0.99 0.20 0.25

2015 1.33 1.13 1.09 0.20 0.24

2016 1.44 1.23 1.18 0.21 0.26

2017 1.33 1.28

Total 0.19 0.25

Table 2. Summary of sugarcane supply

Year 2010 2011 2012 2013 2014 2015 2016 2017

Sugarcane

supply in

(million

Tons)

0.86 0.96 1.04 1.13 1.24 1.33 1.44 1.33

3.1 Forecasting Sugar Bags Production using Moving Average method The table 3 shows the capacity of industry since 2010. The weight of 1 bag is 50 kg’s. The production capacity

for year 2017 is forecasted using simple moving average method. Forecasting the production capacity will help to

know whether the company can satisfy the predicted demand or not. Table 4 shows the summary of table 3.

Table 3. Forecasting the production capacity of industry.

Year Actual bags

Produced

(million bags)

Forecasting m=3

(million Bags)

Forecasting m=4

(million Bags)

MAD for

m=3

MAD for

m=4

2010 1.72

2011 1.92

2012 2.08

2013 2.20 1.90 0.3

2014 2.48 2.066 1.98 0.41 0.5

2015 2.66 2.25 2.17 0.41 0.41

2016 2.88 2.44 2.35 0.44 0.53

2017 2.67 2.55

Total 0.39 0.48

Table 4. Summary of production capacity of industry.

Year 2010 2011 2012 2013 2014 2015 2016 2017

Sugar

production in

(million Bags)

1.72 1.92 2.08 2.20 2.48 2.66 2.88 2.67

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3.2 Forecasting Sugar Bags demands using Moving Average method Each bag is equal to 50 kg’s

The table 5 shows the demand of sugar bags since 2010. The demand for present year is forecasted using simple

moving average. Table 6 shows the summary of table 5.

Table 5. Forecasting the demand of sugar bags

Year Demand (million

bags)

Forecasting m=3

(million Bags)

Forecasting m=4

(million Bags)

MAD for

m=3

MAD for

m=4

2010 1.90

2011 2.10

2012 2.28

2013 2.40 2.09 0.31

2014 2.68 2.26 2.17 0.42 0.51

2015 2.86 2.45 2.36 0.41 0.50

2016 3.1 2.64 2.55 0.46 0.55

2017 2.88 2.76

Total 0.40 0.52

Table 6. Summary of demand of sugar bags.

Year 2010 2011 2012 2013 2014 2015 2016 2017

Sugar

Demand in

(million

Bags)

1.90 2.10 2.28 2.40 2.68 2.86 3.1 2.88

3.3 Analysis The demand of sugar bags in 2017 is 2.88 million bags whereas the production capacity is 2.67 million bags.

Since the capacity is lower than the demand it is very important to increase the efficiency of industry to meet the

demand by applying some lean tools.

3.4 Material requirement planning of Limestone (chemical used in process) The table 7 shows the material requirement planning of Limestone. Limestone is a chemical used in the

production of sugar for juice purification. Lime is used to capture and remove the impurities in the juice. About 100

kg of limestone is used for the production of one ton of sugar. The demand of the limestone in 2017 is as shown below.

The company runs for only six months from Oct to April. The material requirement planning helps to order the required

product well in time so that the product is never goes short while using.

Table 7. Material Requirement Planning of Limestone chemical.

Product: Limestone; Lead Time: 1 Month; Safety stock: 500 Bags; Inventory: 0

Month

Limestone 1 2 3 4 5 6

Gross Requirements

(# of 50 kg Bags)

6000 6000 6000 6000 6000 6000

Schedule Receipts 6000

On hand invenotry 0 -6000 -12000 -18000 -24000 -30000

Net Requirement 6500 6500 6500 6500 6500

Planned order release 6500 6500 6500 6500 6500 6500

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3.5 Material requirement planning of phosphate (chemical used in process) The table 8 shows the material requirement planning of phosphate. Phosphate is a chemical used in sugar

manufacturing process to get required Ph level. The requirement of the limestone in 2017 is as shown below. The

company runs for only six months from Oct to April. The material requirement planning helps to order the required

product well in time so that the product is never goes short while using.

Table 8. Material Requirement Planning of Phosphate chemical.

Product: Phosphate; Lead Time: 1 Month; Safety stock: 500 Bags; Inventory: 0

Month

Phosphate 1 2 3 4 5 6

Gross Requirements

(# of 50 kg Bags)

5000 5000 5000 5000 5000 5000


On hand invenotry 0 -5000 0 -5000 -10000 -15000 -20000

Net Requirement 5500 500 -5500 -5500 -5500 -5500

Planned order release 5500 500 5500 5500 5500 5500

3.6 Material requirement planning of empty sugar bags The table 9 shows the material requirement planning of empty sugar bags. The empty sugar bags in sugar

industry are used to fill the sugar. The bag has the capacity of 50 kg’s. The requirement of the sugar bags in 2017 is

as shown below. The company runs for only six months from Oct to April. The material requirement planning helps

to order the required product well in time so that the product is never goes short while using.

Table 9. Material Requirement Planning of Empty Sugar bags.

Product: Empty Sugar bag; Lead Time: 1 Month; Safety stock: 2000 Bags; Inventory:

Month

Empty sugar bag 1 2 3 4 5 6

Gross Requirements

(# of 50 kg Bags)

510000 510000 510000 510000 510000 510000


On hand invenotry 0 -510000 -1020000 -510000 -1020000 -1530000 -2040000

Net Requirement 512000 512000 0 512000 512000 512000

Planned order release

*512000

512000 512000 512000 512000

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3.7 Reducing the waiting time of sugarcane delivery tractors The waiting line of tractors outside the industry to unload the sugarcane is on an average of 300 double trolley

tractors. The average waiting time of a tractor is 3 days. The waiting line reduces the industry space and trouble to the

traveler on road. As this is very high waiting time my objective is to reduce it. Figure 5 shows the tractors waiting in

a queue to unload the sugar cane.

Figure 5. Queue of Sugarcane tractor for delivery.

Upon the detail study, it was found that the farmers rushed to unload the tractors to get paid early as possible.

So, the solution is to pay the farmers in installment throughout season with the irrespective of date they unload. This

solution is feasible as there are fixed and pre-known farmers providing the sugarcane. The second solution for this

problem is to set the dates for delivery village wise, so farmers from all the villages and places do not rush at a time.

3.8 Effects of the breakdowns Form the past is has been observed that the Industry was shut down for more than 60 hours in a season. This

break down effects a lot of on the performance. The table below shows the loss incurred by the company due to break

downs in year 2016. Table 10 shows the breakdown of the company in a season and the loss occurred to the company

due to breakdown.

Table 10. Break down hours and total loss due to break down.

Month Break down hours Loss amount in US Dollars

October 8 1,09,000

November 12 1,63,500

December 10 1,36.217

January 10 1,36.217

February 12 1,63,500

March 8 1,09,000

Total 60 8,17,307

Total amount of 0.8 million dollars is been the loss company faced due to breakdowns. Break down was

maximum observed in mill section. As per the survey the problem was with the motors and the alignment of rollers.

The solution for this problem is to keep the spare motors, so incase the motor is not working it can be replaced soon

as possible, by which the break down hours can be reduced.

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3.9 Demand and Production Analysis The table 11 shows the demand of sugar bags from 2016 to 2023. It is helpful to study the demand to know

whether the company can satisfy the demand in future or not.

Table 11. Demand of Sugar bags in future

Year 2016 2017 2018 2019 2020 2021 2022 2023

Sugar

Demand in

(million

Bags)

3.1 3.3 3.5 3.6 3.75 3.86 4.1 4.2

As the demand is gradually increasing in future the company cannot satisfy the demand with present capacity.

So, it is important to increase the capacity from 8500 TCD to 12000 TCD (Tons of Crushing per day). Therefore, to

increase the crushing capacity the extra mill, Boilers, Hoppers must be installed.

3.10 Cost calculation for increasing the capacity

Table 12 shows the additional resource required and cost involved in it for installment.

Table 12. Addition resource and cost calculation.

Sl No. Additional required

resource

Quantity Cost in million

dollars

1 Mill 1 0.8

2 Boilers 3 0.4

3 Centrifuges 2 0.3

4 Hoppers 4 0.2

5 Crystallizer pan 2 0.25

6 Other 0.4

Total 2.35

3.11 Payback period The table 13 show the time for earning amount spent in installing the extra resource to increase the capacity

of industry.

Table 13. Payback calculation

Year Present crushing

TCD

Required Crushing

TCD

Difference

TCD

Extra amount

Earned in million

2018 8000 8500 500 0.36

2019 8500 9500 1000 0.72

2020 9500 10000 500 0.36

2021 10000 10500 500 0.36

2022 10500 11000 500 0.36

2023 11000 12000 1000 0.72

Total 2.88

As the demand is increasing gradually it is not possible to satisfy the demand in future so it is very important increase

the capacity of industry from 8500 tons of crushing per day to 12000 tons of crushing per day. The progress of capacity

can be increased gradually as the demand is increasing. The cost the cost involved in increasing the capacity is shown

in table 11. The payback amount is also calculated as shown in table 12. From table 11 and 12 it is said that the money

required to improve the capacity is 2.35 million dollars, the money which is put in for the development can be earned

back in 6 years. So, it is feasible to put the initial investment to increase the capacity of industry.

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4. Results

From this paper, the forecasting of sugarcane supply is done from which the sugarcane supply for 2017 is forecasted

to be 1.33 million tons. This will help the industry to be prepared in advance to crush so much of sugarcane without

any breakdowns. The forecasted value of sugar production capacity of an industry in 2017 is 2.67 million bags

Whereas the demand in 2017 is 2.88 million bags. With the current capacity, the company falls short to satisfy the

demand. As the company is not able to meet the demand in future extra resource should be installed like Mills, Boilers,

Hoppers which cost around 2.35 million dollars. The payback period is also calculated to check the feasibility, the

payback period is calculated to be 6 years by the money made by the result of extra resource. Material requirement

planning of chemicals like Limestone, Phosphate and empty sugar bags is done as they are bought from outside. From

the MRP the material ordering date is found to get the material well in time. The waiting time of sugarcane tractors is

reduced to 6 hours from 72 hours meanwhile the breakdown of industry is also reduced.

5. Conclusion From this research, I could forecast the supply of sugarcane in year 2017. The production capacity and demand of

sugar bags was also forecasted for year 2017 which will help the company to know the status and work on it to meet

the future demand. The research also predicts the demand of sugar for next 6 years, it was found that the company

would not satisfy the demand, so it is recommended to increase the capacity from 8500 tons of crushing per day to

12000 tons of crushing per day. The amount associated in instalment of extra resource is 2.35 million dollars and the

payback period is 6 years from the money made by the result of extra resource allocation. Therefore, it is feasible to

invest to increase the crushing capacity.

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Biography

Santosh Gudagunti is studying Master of Science in Industrial Engineering at Lawrence Technological University,

Southfield, Michigan, United States. He has completed Bachelors in Mechanical Engineering from Shri Dharmasthala

Manjunatheshwara College of Engineering and Technology Dharwad, Karnataka, India. Mr. Gudagunti is serving as

the President of IEOM Student Chapter at Lawrence Technological University, Southfield, Michigan since September

2017. His Field of interest in research are Quality, Simulation, Productivity and Operations Research.

Ahad Ali is an Associate Professor, and Director of Master of Engineering in Manufacturing Systems and Master of

Science in Industrial Engineering in the A. Leon Linton Department of Mechanical Engineering at the Lawrence

Technological University, Michigan, USA. He earned B.S. in Mechanical Engineering from Khulna University of

Engineering and Technology, Bangladesh, Masters in Systems and Engineering Management from Nanyang

Technological University, Singapore and PhD in Industrial Engineering from University of Wisconsin-Milwaukee.

He has published journal and conference papers. Dr Ali has completed research projects with Chrysler, Ford, New

Center Stamping, Whelan Co., Progressive Metal Manufacturing Company, Whitlam Label Company, DTE Energy,

Delphi Automotive System, GE Medical Systems, Harley-Davidson Motor Company, International Truck and Engine

Corporation (ITEC), National/Panasonic Electronics, and Rockwell Automation. His research interests include

manufacturing, simulation, optimization, reliability, scheduling, manufacturing, and lean. He is member of IIE,

INFORMS, SME and IEEE.

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