project report

21
An Internship Project Report on WIP reduction at FCPL (An ITC CMU) Abstract - Reduction in Sp Cream Ex Oven WIP from 140 trays to “Nil” trays without reducing the current output level of 48 T /day (Start up/Changeover day). -- Kumar Anshul VLM/04/11

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Page 1: Project Report

An Internship Project Report on WIP reduction at FCPL (An ITC CMU) Abstract - Reduction in Sp Cream Ex Oven WIP from 140

trays to “Nil” trays without reducing the current output

level of 48 T /day (Start up/Changeover day).

-- Kumar Anshul

VLM/04/11

Page 2: Project Report

2

INTRODUCTION

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India

Limited. As the Company's ownership progressively Indianized, the name of the Company was

changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited

in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's multi-business

portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information

Technology, Packaging, Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle

Retailing, Education & Stationery and Personal Care - the full stops in the Company's name were

removed effective September 18, 2001. The Company now stands rechristened ‘ITC Limited’.

ITC's foray into the Foods business is an outstanding example of

successfully blending multiple internal competencies to create a new driver of business growth.

It began in August 2001 with the introduction of' Kitchens of India' ready-to-eat Indian gourmet

dishes. In 2002, ITC entered the confectionery and staples segments with the launch of the

brands mint-o and Candyman confectionery and Aashirvaadatta (wheat flour). 2003 witnessed

the introduction of Sunfeast as the Company entered the biscuits segment. ITC's entered the fast

growing branded snacks category with Bingo! in 2007. In eight years, the Foods business has

grown to a significant size with over 200 differentiated products under six distinctive brands,

with an enviable distribution reach, a rapidly growing market share and a solid market standing.

The Foods business carries forward this proud tradition to deliver

quality food products to the consumer. All products of ITC's Foods business available in the

market today have been crafted based on consumer insights developed through extensive market

research. Apart from the current portfolio of products, several new and innovative products are

under development in ITC's state-of-the-art Product Development facility located at Bengaluru.

Leadership in the Foods business requires a keen understanding

of the supply chain for agricultural produce. ITC has over the last 100 years established a very

close business relationship with the farming community in India and is currently in the process

of enhancing the Indian farmer's ability to link to global markets, through the e-

choupal initiative, and produce the quality demanded by its customers. This long-standing

relationship is being leveraged in sourcing best quality agricultural produce for ITC's Foods

business.

The Foods business is today represented in 5 categories in the market. These are:

Ready To Eat Foods

Staples

Confectionery

Page 3: Project Report

3

Snack Foods

Biscuits

In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged

in assisting outsourced manufacturers in implementing world-class hygiene standards through

HACCP certification. The unwavering commitment to internationally benchmarked quality

standards enabled ITC to rapidly gain market standing in all its 6 brands:-

Kitchens Of INDIA

AASHIRVAAD

Sunfeast

mint-O

CANDYMAN

Bingo!

ITC FOODS DIVISION, BISCUITS BUSINESS - SUNFEAST

In July 2003, ITC forayed into the Biscuits market with

the Sunfeast range of Glucose, Marie and Cream Biscuits. Sunfeast’s brand essence, "Spread the

Smile" connotes happiness, contentment, satisfaction and pleasure. The mascot Sunny reinforces

the emotional aspects of the brand. In a span of 6 years Sunfeast has launched many new

varieties and has its presence in almost all types of biscuit categories - a) Sunfeast Milky Magic;

b) Sunfeast Marie Light; c) Sunfeast Golden Bakery (Cookies) ; d) Sunfeast Dark Fantasy

(chocolate vanilla biscuits); e) Sunfeast Dark Fantasy Choco Fills; f) Sunfeast Glucose; g)

Sunfeast Dream Cream; h) Sunfeast Snacky; i) Sunfeast sweet 'n salt ; j) Sunfeast Nice; k)

Sunfeast Benne Vita Flaxseed Biscuits; l) Sunfeast Special cookies ; and counting…

ITC Biscuits has 13 contract manufacturing units (CMU) & 1

their own factory to manufacture these biscuits. The CMUs are been given the raw material &

required machinery & they have to arrange for manpower, land, & other utilities. The costing

done, in the contract, is on that basis & per ton rate has been given to them.

FOOD CREATIONS PVT LIMITED – BISCUIT FACTORY

It is the biggest CMU of ITC biscuit business by volume. It is located near Kadugodi, Bangalore.

At FCPL there produce basically five different biscuits – Cream biscuit, Cookies, Marie, Sweet n

salt & Snacky. There are three manufacturing lines – line 1 for cream biscuits, line 2 for Marie,

Sweet n salty & Snacky and the 3rd

line are for cookies (Butter, Cashew etc.). Raw materials

used for these biscuits are Maida, sugar, Palm oil as fat, color, flavor, & some chemicals. For

cream making basic raw material is sugar, hydrogenated vegetable oil, color, flavor etc...

Page 4: Project Report

4

PROJECT TITLE

Reduction in Sp Cream Ex Oven WIP from 140 trays to “Nil” trays without

reducing the current output level of 48 T /day (Start up/Changeover day).

PROJECT DELIVERABLES

Reduction of WIP of sandwiches & shells “Nil” trays.

Reduction in wastages from current level of 4.1% (usable + unusable).

Reduction in manpower deployed from current level of 152 ppl/shift.

Visible improvement in the packing/sandwiching section upkeep.

BACKGROUND OF PROJECTS

Current cream operations make use of inventory pile of shells in DH room & on

shop floor as well as sandwiches in packing section. This is leading to reduced

hygiene, increased wastages & utilizes additional manpower.

Page 5: Project Report

5

Understanding of the Project

Inventory is generally divided into four "buckets" called raw materials, consumables, work in progress

(WIP) and finished goods. Raw materials are the substances used to create a product like metal, wood

and screws that can still be identified in the finished product. Consumables are items that are needed to

create a product, but are unidentifiable in the finished goods, such as gasoline, oil and parts for

production machinery. Work in progress inventory consists of items that have started the production

process but are not finished, saleable goods. Finished goods or products have completed the production

process and are ready for sale to a consumer.

With higher inventory, capital will be tied up. In simple

words you get little cash by selling goods after investing large amounts of money in manufacturing it. Cost

will be high since there are related costs like interests. So either product will be sold with higher price tag

or the organization will loose money from its bottom line. Higher inventory and work in progress hides the

problems. Problems are hidden in higher work in progress and will be not possible to remove from the

system. In lean manufacturing context it is not possible simply to reduce or remove inventory and work in

progress from your system. Root cause to higher work in progress is one of the other seven wastes we

are discussing. So identifying the correct root cause and treating them will reduce the WIP and higher

levels of inventory. The usual causes of Work in process generation are either unbalanced line or uneven

batch sizes between the activities in a process. Unbalanced line is meant by different cycle time of the

operations in discrete manufacturing system & different throughput for continuous manufacturing system.

In dynamic situation as FCPL is in, the estimation of WIP is

also critical. WIP across the line keeps on varying from time to time, even within the shift. So a

measurement technique has to be decided before jumping of the project. The measurement technique

could be taking stock of WIP at different time in the day & by taking average. The number of data points

should be as large that it would cover all variations. But before everything the process has to be

understood with micro details.

Page 6: Project Report

6

PROCESS FLOW DIAGRAM

Page 7: Project Report

7

0

10

20

30

40

50

60

Production(in tons)

Average Production reqd

Average – 41.44 T

48 T

Ton

nes

----

----

----

--

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

3/J

an T

ota

l

4/J

an T

ota

l

5/J

an T

ota

l

6/J

an T

ota

l

7/J

an T

ota

l

8/J

an T

ota

l

10

/Jan

To

tal

11

/Jan

To

tal

12

/Jan

To

tal

13

/Jan

To

tal

14

/Jan

To

tal

15

/Jan

To

tal

17

/Jan

To

tal

18

/Jan

To

tal

19

/Jan

To

tal

20

/Jan

To

tal

21

/Jan

To

tal

22

/Jan

To

tal

24

/Jan

To

tal

25

/Jan

To

tal

27

/Jan

To

tal

28

/Jan

To

tal

29

/Jan

To

tal

31

/Jan

To

tal

Efficiency

Efficiency

Average – 70%

Day wise Production of Cream Line in Jan’11

Day wise OEE Fluctuation of Cream Line in Jan’11

Page 8: Project Report

8

The production quantity, efficiency & productivity, all three measures of production, are

fluctuating heavily inter-day basis. It is no trend also, which means that there are random

variations. While analyzing the graphs we will come to know that there are three low points in

terms of production on 8th Jan, 15Th Jan & 24th Jan 2011. The possible explanation can be found

from the graphs itself. There can be three reasons of low production a) Raw material Shortage-

When the all the graphs is at low; b) Machine Breakdown,- When the production is at low &

efficiency graph at lowest but productivity may not dip much; c) Manpower issue – When the

production is down & productivity is not much down. In this way we can tell that 15th Jan is the

case of Equipment down, 24th is the manpower issue or may be they have fewer requirements.

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Productivity (Kg/Man-Hour)

Productivity (Kg/Man-Hour)

Average – 6.84

kg/Man-hour

Day wise Productivity Fluctuation of Cream Line in

Jan’11

Page 9: Project Report

9

Measurement of WIP

Dynamic situation as at FCPL the measurement of WIP is very difficult. Following graph shows

the variation of the WIP of trays with respect to the number of packing machine running :-

Trend of WIP

0

50

100

150

200

250

300

350

400

4,1 0,2 3,2 5,0 6,0 5,1 5,1

Number of Trays

Number of Trays

WIP Varies with the no. of packing machine running.

Combination of Packing Machine running

It shows that as the number of packing machines is increasing the number of trays in WIP is

getting reduced.

DETAILS OF EFFICIENCY

There are basically three areas namely oven (pre sandwiching), sandwiching, & packing areas.

Since the capacity installed in all the three areas are different so maintain the flow the areas

should be working at different efficiencies otherwise there will be WIP or shortage.

Page 10: Project Report

10

Areas like packing & sandwiching has more capacity but because of several reasons resulting in

poor efficiencies & eventually lesser throughput from the line. In this analysis of efficiency data

more than or equal to 90% has been taken acceptable. Here availability gives the measure of

planned downtime in that area, productivity will give the measure of unplanned downtime &

quality will give the measure of good quality.

So the two main reasons for poor balancing of line are :-

a) Productivity of Sandwiching machine

b) Availability of Packing machine – Here the availability varies with the

manpower availability.

IMPORTANT POINTS FOR WIP REDUCTION

Page 11: Project Report

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DOWNTIME OF SANDWICHING MACHINES

Source – FCPL Team, ITC

Causes of Downtime at Sandwiching m/c

Source – FCPL Team, ITC

Page 12: Project Report

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Further Tear Down of Technical Issues In Sandwiching area

Issues

Time

(min.) for whole

month

Frequency M/C

Packing table geare box not working 650 1 PT4

MULTIPLIER PLATTEN DAMAGE 75 2 PT4

PUMP 2 DRIVE FAULT 55 1 PT4

Multiplier and platen replaced 85 3 PT4

MULTIPLIER DRIVE BELT CUT 30 1 MP4

Misc 60 MP4

Power cut and pump no-1 drive fault 35 2 PT4

top 3rd and 4th broken setting 10 1 MP4

OHT pusher pin opened 7 1 MP4

PUMP 1 DRIVE FAULT 14 1 PT4

CREAM CUTTER WIRE CUT 20 4 PT4

3rd line Broken setting 5 1 PT4

Source – FCPL Team, ITC

Issues are more or less sporadic in nature. So any maintenance plan is not coming out of this.

Issues Related to Downtime of upstream activities

Source – FCPL Team, ITC

Page 13: Project Report

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Steps Can be taken

• For the technical issues, major problem is Machine Damage, we can introduce the preventive maintenance of machines at the time of the cleaning of Sandwiching Machine.

• Points related to frequent issues will be added to check sheet & to be followed at the time of Machine Cleaning. Machine Cleaning time will be more.

Page 14: Project Report

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Availability of Packing machine

• Since the capacity installed for packing is much higher than the requirement, so the availability is directly related to manpower present for production.

• Oven area works on fixed plan & in sandwiching area things are dynamic which results to inefficiencies like WIP.

• Solution would be either making oven area dynamic or sandwiching area fixed.

Oven AreaSandwiching and

Packing Area

Oven Area Dynamic - Slowing down the Other process

• By slowing down the sandwiching & shell molding process, flows can be matched.

• Manpower availability is constant within a shift, so any possible change can be done on shift basis.

• Since total production is dependent upon the number of packing machine running, so slowing other process wont affect the throughput of the line.

Page 15: Project Report

15

Oven Area Dynamic - Possible ways for slowing the line

• Slowdown the Molder speed without affecting baking conveyor – There will be burning of biscuits in the oven because of increased distance between them.

Experiment done by increasing the distance between the biscuits.

Difference in color

Page 16: Project Report

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Oven Area Dynamic - Possible ways for slowing the line

• Slowdown of Molder speed along with respective change in baking conveyor speed & baking time.

• The flows across the line will be balanced, incase of any shortage of manpower resulting in non availability of Packing Machine.

• Manpower through out the shift (12hrs) is fixed, so a plan can be made to have different speeds for different levels of manpower available.

• There may be some wastages at the start, but lower speed hence would certainly reduce the further wastages.

S.No.

No of

Packaging

M/C working

( 60g)

No of

Packaging

M/C working

(129g)

Speed of

Packaging

(Sandwiches/min)

No of

Sandwiching

M/C working

Speed of

sandwiching

(/min)

No of Shells

Required

(/min)

Required Speed of

Molder

1 7 0 5390 2 3196 11194 27.6

2 6 0 4620 2 2740 9594 23.7

3 6 1 5370 2 3185 11152 27.5

4 5 0 3850 2 2283 7995 19.7

5 5 1 4600 2 2728 9553 23.6

6 5 2 5350 2 3173 11110 27.4

7 4 0 3080 2 1827 6396 15.8

8 4 1 3830 2 2271 7954 19.6

9 4 2 4580 2 2716 9511 23.5

10 4 3 5330 2 3161 11069 27.3

11 3 0 2310 1 2740 4797 11.8

12 3 1 3060 2 1815 6355 15.7

13 3 2 3810 2 2259 7912 19.5

14 3 3 4560 2 2704 9470 23.4

15 0 2 1500 1 1779 3115 7.7

Subsequent change in baking time & speed of baking conveyor to be done.

Page 17: Project Report

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Justification

• Wastages because of setting – 35 X 2 = 70 kg• Cost Of Biscuits (say) – 0.03p/g• So Loss – Rs. 2100• Average WIP , when usual 6 machines are running – 650 Kg• Manpower Saving – 2 Casuals – 7000 / month• Money stuck in the system – Rs. 84500• Loss is only 2.5% of the money stuck• Poor quality because of moisture capture while being idle can also

be minimized• And throughput will be same even if we don’t change the speed of

Oven.• Even if we loose 1.5 hr/ setting we still can reach the target of 48 T.

Page 18: Project Report

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Sandwiching Area Fixed - Another way

• The variation in production is mainly attributed to fluctuation in Manpower availability, correlation between the production & manpower is 0.79.

• The standard deviation of manpower availability is 19/ day & almost 10/shift.

• Two types of workers are there – Permanent Employees & Contract Labors.

• Almost 75% of feeders are permanent & rest others.

• Almost 90% of the casuals are contract workers.

• Have more manpower to counter the variation.

Manpower Availability

No. o

f Day

s

0

1

2

3

4

5

6

100 210 215 225 240 265 270 275 280 285

Frequency

Frequency

Page 19: Project Report

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Monetary Justification

• Variation In production – 8 T (st. deviation)i.e. equivalent to production from 1 packing machine.

• Variation in Manpower – 10 nos. (st. deviation)• Average Manpower – 127 nos. (excluding operators &

supervisors)• Additional Salary – Rs. 4000 X 15 (additional) = Rs. 60000• Loss of production – 150000 pkts (approx)• Assuming margin be 5 p/pkt, so total loss is around Rs.

7500/day.• Money retrieval , 60000/7500 = 8 days

Page 20: Project Report

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Conclusion

• There are two sources of WIP generation –a) Downtime of Machinesb) Manpower Shortage

• Since there are no chronic issue found in the analysis, so any maintenance plan couldn’t be formed.

• There are two possible ways of reducing WIP :-a) Slowing the baking speedb) Having more employees

Page 21: Project Report

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Acknowledgement

• Mr. Dominic Jose

• Mr. Amit Pal Singh

• Mr. Sangwan

• Mr. Bala & FCPL team