Production and Operation Management Project Report

Murree Brewery
(Rawalpindi Plant)

Submitted to:
Sir Tahir Masood

Submitted By:
Abdul Haq

Ali Hussan

Baqir Amin

Muhammad Irfan

Muhammad Sohaib

Pakistan Institute of Development Economics, Islamabad

Table of Contents
Chapter 1.....................................................................................................................................................4
1 Introduction.........................................................................................................................................4
1.1 Vision Statement..........................................................................................................................4
1.2 Mission Statement.......................................................................................................................4
1.3 History.........................................................................................................................................4
Chapter 2.....................................................................................................................................................7
2 Organization Structure.........................................................................................................................7
Chapter 3.....................................................................................................................................................8
3 Process Flow Diagram..........................................................................................................................8
3.1 Resource Flexibility......................................................................................................................8
3.2 Capital Intensity: Murree Brewery...............................................................................................9
3.3 Customer Involvement...............................................................................................................10
3.4 Operations process in Murree Brewery.....................................................................................10
Chapter 4...................................................................................................................................................11
4 Operation Strategies..........................................................................................................................11
4.1 Core competencies....................................................................................................................11
4.2 Competitive priorities................................................................................................................11
4.2.1 Quality...............................................................................................................................11
4.2.2 Cost....................................................................................................................................11
4.2.3 Delivery time......................................................................................................................11
4.2.4 Flexibility............................................................................................................................11
Chapter 5...................................................................................................................................................12
5 Vertical Integration............................................................................................................................12
5.1 Product Flow..............................................................................................................................12
Chapter 6...................................................................................................................................................13
6 Total Quality Management (TQM).....................................................................................................13
6.1 Operations.................................................................................................................................13
6.2 Customers..................................................................................................................................14
6.3 Employee Involvement/Empowerment.....................................................................................14
Table of Figures
Figure 1: Organizational structure...............................................................................................................7
Figure 2: Process Flow Diagram...................................................................................................................8
Figure 3: Capital Intensity............................................................................................................................9
Figure 4: Vertical Integration.....................................................................................................................12
Figure 5: Total Quality Management.........................................................................................................13
 Chapter 1

1 Introduction
1.1 Vision Statement
To fulfill customer requirements & expectations through CARE

1.2 Mission Statement

We the people of Murree Brewery Co. make personal commitment to first understand our
customer’s requirement then to meet & exceed their expectations, by performing the correct
tasks on time and every time through:

 Continuous improvement
 Alignment of our Mission & goals
 Responsibility and respect of our jobs and each other
 Educating one another

1.3 History
Murree Brewery was established in 1860 in response to the ever increasing demand for beer by
the personnel of the British Raj, and is currently the oldest continuing enterprise in Pakistan.

Consequent to the British annexation of the Punjab in 1849 from Sikh rule, and more so after
1857 when the British Crown formally extended its sovereignty over India, a structured
administration commenced in the Punjab.

To meet the beer requirements of British personnel (mainly army), the Murree Brewery was
established in 1860 and incorporated a year later at Ghora Galli, located in the Pir Punjal range
of the Western Himalayas at an elevation of 6000' above sea level, near the resort town of
Murree.

Between 1885 & 1890 the Company established Breweries in Rawalpindi & Quetta & acquired
an interest in the Oticumand (South India) & Norailiya (Ceylon) breweries. A distillery was also
established in the above period in Rawalpindi next to the Brewery.

The Murree Brewery at Ghora Galli was therefore among the first modern beer breweries
established in Asia. Murree Beer proved to be very popular among the British troopers who were
largely barracked in the 'Galis' of these hills. The virtues of beer brewed from barley malt & hops
as a light alcoholic beverage were not lost on the local population who rapidly became avid
consumers.

By the turn of the 20 century, the name "Murree" was famous for its beer in keg and bottle in the
bars, beer halls and army messes of British India. Murree Beer was first awarded a medal for
product excellence at the Philadelphia Exhibition in 1876, followed by numerous awards over
the past 140 years.

In 1935, a massive earthquake totally demolished the Quetta brewery as well as substantial part
of Quetta town, killing thousands of persons, including a number of our employees. At Ghora
Galli (Murree), the scarcity of water became an emerging problem. By the 1920s, brewing was
mostly transferred to the Rawalpindi brewery but malting continued at Ghora Galli till the 1940s,
when this property was sold. This historic brewery built in Gothic style architecture was burnt
during the partition riots of 1947/48.

Park Lodge a handsome residential property was purchased by the company from
Mrs.H. Whymper in 1888. It was the principal residence and head office of the company till
1959, when it was taken over by the Government of Pakistan to house the office of the President
of Pakistan. It remains an office of the Head of State of Pakistan from 1960 till the present day.

Two English families were closely connected with the founding of the original brewery. Edward
Dyer was the first General Manager of the company. He was also the founder of Dyer Meaken
breweries, Simla hills. Edward Whymper, a member of this family was the first person to climb
Matterhorn Mountain in 1865.

The Rawalpindi brewery is blessed with deep aquifers of good water. A railway siding was
extended to the premises in the 19th century, which is now derelict Under the present prohibition
law, only non-Muslims and foreigners are permitted to consume alcohol. Notwithstanding the
consequent reduction in demand, the Company decided as policy to concentrate on product
excellence. It was decided to modernize the plants.

A Ziemann (German) brew house was installed in 1967, 'Saladin' Box Maltings in 1971. Also in
the late sixties, it was decided to embark on an ambitious long-term program to mature Malt
Whiskies. Over the past four decades white oak casks and vats have been procured from North
America, Australia and Spain.

Our two underground cellars now hold over half a million liters of Malt Whisky for varying
periods of maturation up to 12 years under controlled temperature conditions.
Another wave of modernization was undertaken in the 1990s. New beer canning and modern
bottle filling facility from Holstein and Kappert (Germany) was installed. Two units of alcohol
rectification columns for producing extra neutral grade of potable alcohol from Molasses were
procured from France and Italy, respectively, to give our Vodkas and Gins a qualitative edge.
Also in this period, the beer fermentation capacities were renewed. It is pertinent to point out that
our basic beer fermentation system installed in the 1930s was then at the cutting edge of this
technology. Known at the time as the Nathan system, it incorporates fermentation and the
lagering of beer in a single double jacketed vessel. A variation of this system is now in extensive
use worldwide.

Tops Food and Beverages a division of the Company was established in 1969. It processes fruits
and markets fruit juices and allied food products. Two manufacturing units are located in
Rawalpindi and Hattar (KPK) respectively. A Tetra Pak packaging facility was added in 2001.
The Hattar plant was installed in 1992.

The plant is based on a Recuperative Melter and two Emhart I.S. container manufacturing
machines and has the latest quality control equipment for online inspection of containers.
The Murree Brewery is one of the oldest public companies of the sub-continent. Its shares were
traded on the Calcutta Stock Exchange as early as 1902, and are now the oldest continuing
industrial enterprise of Pakistan.

In 1997-1998 and 1998-1999, we were judged among the top 25 performing public companies
by the Karachi Stock Exchange.
 Chapter 2

2 Organization Structure

General Manager
M. Javed

Special Assistant to CEO

Isphanyar Bhandara

Sabih Ur Rehman

Technical Manager
CEO

Fakher-E-Mahmood

General Manger (Tops Food &

Production Manager
Beverages)
Malik Talat Yaqoob Mr. Javed

Plant Manager
(Murree Glass Division)
Zaka-ud-Din

Figure 1: Organizational structure

There are 300 hundred workers working in plant under three shifts and per shift is eight hours.
 Chapter 3

3 Process Flow Diagram

 Raw material from store to Dispensary Room
 One by one quality control (Ejectors, Sugar dissolver)
 Filtration: particles from sugar
 Storage tank (Syrup)
 Parameters check: PH + Bricks + Recipe Standard
 Batch: Carbo cooler send supply of Syrup, water and CO2 (Add up here at a time and
adjust volume according to recipe)
 Filling (Finished good)

Figure 2: Process Flow Diagram

3.1 Resource Flexibility

Production unit can produce three types of product with different flavors. Which are Big Apple,
Big lychee, and Big Peach. Production is flexible which changes according to demand of the
product. Production unit can produce two flavor at a time but operation manager favor to run one
flavor because it reduces CIP (Cleaning time waste). They also start producing new flavors like
big ice cream soda according to market demand in the same production unit. While the products
are as follows:

 Fruity Malts
 Soft Drinks
 Tops Tetra Pack 1 liter and 250ml
 Squash
 3 & 5 liter Pet Bottles
 NR juice
 Sauces
 Water
 Vinegar
 Bears
 Liquors

3.2 Capital Intensity: Murree Brewery

 Mass production of drinks.
 Different plants of different product line i.e. Bears, Soft Drinks and Juices.
 Flexible automation: plant is reprogrammed with a new sequence of operations for a new
product.

Mass Production
CI Customization
CI

Figure 3: Capital Intensity

3.3 Customer Involvement

Soft drinks available at every local shop in the market even Pan Wala and any
general store. Customer can easily approach to product.
3.4 Operations process in Murree Brewery
In Murree Brewery, operations are continuous. Production plan changes day by day and six
month data base depend on the demand by marketing department.

Volume of the production unit of Murree Brewery is 30,000 cases. Cases are of three types.

1. 24 bottles pack
2. 1 dozen pack
3. 6 bottles pack
 Chapter 4

4 Operation Strategies
4.1 Core competencies
 Murree brewery is oldest beverage companies in the world. It was founded in 1860 even
before Coca-Cola.
 Murree brewery operates in big apple products which is differentiated it from beverage
market. And there is no other competitor of carbohydrate Big Apple in Pakistan market.
 It is also biggest alcoholic company of Pakistan.

4.2 Competitive priorities

4.2.1 Quality
Murree brewery has consistent quality products. For example Big Apple by Murree Brewery
become one of the favorite drink for youngsters due to its taste. And due to their consistent
quality, people prefer their product in competitive environment.

4.2.2 Cost
Murree brewery has international standard cost which is higher than local market products like
Gourmet.

4.2.3 Delivery time

Storage size of the product is 50,000-60,000 batch due to expiry time of soft drink. While the
delivery time mostly depends on the market demand one week or two maximum.

4.2.4 Flexibility
Plant of Murree Brewery is flexible because it produces different products with flavor.
 Chapter 5

5 Vertical Integration
Murree brewery purchase raw material without glass and bottle. They own glass and bottle
division.

5.1 Product Flow

1. Raw material Supplier
2. Manufacturer (Murree Brewery)
3. Distributor
4. Retailor
5. Costumer

Forward Integration
Distributer
Murree Brewery
In-house process
Backward Integration
Raw Material(Glass And
Bottle Division only)

Figure 4: Vertical Integration

 Chapter 6

6 Total Quality Management (TQM)

Quality Quality
General Technical Assistant
Control Control
Manager Manager Chemist
Manager Officer

Figure 5: Total Quality Management

In production process they used check sheet system, monitor the process and discuss the results
after two hours.

6.1 Operations
Every day at 12pm there is a Production meeting in which Quality and Quantity issues are
discussed. The brewery works 24 hours and has 3 shifts of 8 hours each a day whereby Quality
Control Officer and other lower management changes whereas the distiller or the filling halls has
2 shifts of 8 hours each (may vary upon changes in demand). The production of beverages is
30,000 cases (1 case 24 bottles) per day. To minimize the initiation of unwanted bacteria and to
maintain quality, Sodium Fluoride is added to the raw material. Bottling Superintendent manages
the production.

6.2 Customers
The beverages are sold in local markets as well as exported internationally. The management is
conscious of the fierce competition in the industry and is hopeful to retain its market share. In
order to achieve targets the company is continuing its policy of balancing and modernization and
costs reduction. Customer satisfaction has been the priority according to the representatives of
the firm.
6.3 Employee Involvement/Empowerment
Low level workers are restricted and are not allowed to take any significant decisions. Bottling
Superintendent is authorized to take immediate decisions in case of any problem/issues.
Otherwise the issues are addressed by Technical Manager.
Process Strategy:

Murree Brewery is using Hybrid Production System. They use Batch and Line Process at the
same time. Auto-assembling include from empty bottle to final product and batch process include
the 17000 liter bottles batch.

Cost of Poor Performance:

Murree Brewery have a screening process of product from

Location:
National Park Road, Rawalpindi, Pakistan
Murree Brewery established in 1860, Located plant place was not include in urban area at that
time but now it is include in the high business areas where labor market, transportation and other
facilities are easily available.

Layout:
1. Empty Bottle Warehouse
2. Empty Bottle Warehouse
3. Plant Area
4. Plant Area
5. Production Manager Office
6. Final Product Warehouse
7. Final Product Warehouse
8. Wastage area
9. Gate No.3
10. Gate No.2
11. Gate No.1
12. Plant Offices

Capacity:
In Murree Brewery, There are three input source of machine for production. Their capacity is at
maximum level nowadays because now business season is at peak. The capacity of the input
source machine is as follows

 833 carton per hour

 333 carton per hour
 1005 carton per hour

So total capacity of plant is 2171 carton per hour and there is no bottleneck concept.

Utilization

Peak Capacity

Peak Capacity = Average output rate/peak capacity * 100

Average output rate = total out/24

Average output rate = 30000/24 = 1250

Peak capacity = 1250/2171*100 = 57.57% per hour

Revenue Maximization

Machine is running at maximum capacity level. If the revenue increases what will be your
procedure? “We will replace the plant” said by production manager.

Conclusion:

Recommendation:

 Plant Improvement:

During production, they use plastic bags for juice leakage material under machines which create
fuss in the plant area. So, they need to improve leakages during production through proper
channel or building leakages way under the plant area.

 Latest Technology:
They use same machine from their establishment of the plant. Product demand from the market
increases day-by-day. They operate plant at maximum capacity 2171 carton per hour. Latest
technology is operating at 35000 cartons per hour capacity.

 Infrastructure of Buildings:

Ware houses, plant building, and offices conditions of Big Apple plant are very poor.

Action Plan:

Bibliography

[CITATION htt \l 1033 ]

Annex: