A Project Report on

STUDY OF MANUFACTURING PROCESS MANAGEMENT IN

Ashok Sahakari Sakhar Karkhana Ltd.

Submitted to

Oriental Institute of Management, Vashi, Navi Mumbai

In partial fulfilment of the requirements for the award of the degree of

MASTER OF MANAGEMENT STUDIES

Project work carried out at

Under the guidance of

Sushma Patil Shri. Madhukar Devkar

Internal Guide External Guide

BY

Gage Sushant Nitin

1108

Oriental Institute of Management,

Vashi Navi Mumbai
2011-2013 Batch

1
 Acknowledgment

It is not just the formality, but it is my duty to say thanks to all those person,
who guided and co-operated with us directly or indirectly, during training and
preparation of this project report.

First we express our sincere thanks to my project guide Mr. Madhukar devkar for
their timely and valuable suggestion and co-operation during the completion of the
dissertation work

Special thanks to managing director Mr. kakade S.D For their helpful co-operation
entire training period.

Very special thankful to Mr. Bhanudas murkute chairman of ASSK for their co-
operation and giving Permission for training and site visit

Lastly, I would like to thanks my parents as their blessing are always works for
me. My friends also need thanks as there as there continuous encourage me net
leads me complete the seminar work.

MR. GAGE SUSHANT NITIN

2
 DECLARATION

I hereby declare that this report titled

“STUDY OF MANUFACTURING PROCESS MANAGEMENT IN

Ashok Sahakari Sakhar Karkhana Ltd.”

is a record of independent work carried out by me under the guidance and supervision of Sushma
Patil, Shri. Madhukar devkar towards the partial fulfilment of requirements for the M.M.S. degree
course UNIVERSITY OF MUMBAI

I further declare that this Project Report is the result of my own efforts and that it has not
been submitted to any other university or institute for the award of a degree or diploma or any other
similar title of recognition.

Sushant Gage

3
 CERTIFICATE

This is to certify that Sushant Gage, 1108, is a bonafide student of Master of

Management Studies course of the Institute (2011-2013), affiliated to University of

Mumbai. Project report on “Manufacturing Process Management” is prepared by

his/her under the guidance of Sushma Patil in partial fulfilment of the

requirements for the award of the degree of Master of Management Studies of

University of Mumbai.

Internal Guide Director

4
 EXECUTIVE SUMMARY

The project is about the study of Manufacturing Process Management of Ethanol at Ashok Sahakari
Sakhar Karkhana (ASSK). The project incorporates basics of Process at ASSK.

In ASSK production control process starts with marketing department, where it get demands on the
basis of current market trends and it acts as a basis for developing production plan. It involves
coordination with various departments of ASSK, like it starts with marketing department and ends
with logistics. ASSK‟s main focus is on customer building by fulfilling their demands on time with
great quality.

Overall Production Process in ASSK is carried out –

 Marketing department: Marketing department forecasts the demand and gives it to other
departments which are directly involved in production activities. 

 Production department: Production planning is carried out here based on the availability of
the raw materials, finished goods in stock. 

 Logistics: Logistics of ASSK works in coordination with production and marketing
department where it gets 

 Minimum Demand – In this, if the demand in the market is low then the ASSK must produce
minimum demand to sustain in the market. 

 Import finished products - ASSK thinks of its customer very much. If the plant is under shut
down because of certain reason, the company delivers the finished products by importing from
other companies to maintain good relationship with their customers. 

 Focused customers – ASSK gives discount to customers who are taking the Products in bulk
quantity and to its regular customers. 

 Overall project learning is about understanding all above aspects which are required for the
smooth functioning of the production planning and control. 

5
 INDEX
Content Page No.
A.1. INDUSTRIAL PROFILE
2. COMPANY PROFILE
2.1 Background
2.2 Nature of Business Carried
2.3 Vision, Mission, Policy
2.4 Product and Services
2.5 Area of Operation
2.6 Ownership Pattern
2.7 Competitors
2.8 Achievement & Awards
2.9 Work Flow Model
3 MCKENSY’S 7’S
3.1 Strategy
3.2 Structure
3.3 Skills
3.4 Style
3.5 System
3.6 Staff
3.7 Shared Value
4 SWOT ANALYSIS
5 ANALYSIS OF FINANCIAL INFORMATION
6 LEARNING EXPERIENCE

B.1. GENERAL INTRODUCTION

1.1 Statement of the Problem
1.2 Objective of Study
1.3 Scope of Study
1.4 Methodology
1.5 Limitation of the Study
2 ANALYSIS & INTERPRETATION
3 CONCLUSION AND RECOMMENDATION
4 BIBLIOGRAPHY
5 ANNEXURE
Case study
List of Table ,Graph

6
PART: A
1. INDUSTRIAL PROFILE:-
The discoveries of sugar from sugarcane have originated in New Guinea, and was spread
routes to Southeast Asia and India. The Sugar Industry is the second largest agro-based industry
next to textiles in India. In India, sugarcane is the key raw material for the production of Sugar.
Sugar is produced from Sugar Cane & Sugar Beet, App. 70% sugar is produced from Sugar Cane &
30% produced from Sugar beet. Sugarcane is grown in semi-tropical region; Beet is grown in
temperate climate.

The Indian sugar industry is the second largest agro industry located in the rural India. The Indian
sugar industry has a turnover of Rs.500 billion per annum and it contributes almost Rs.22.5 billion
to the central and state as tax, and excise duty every year. It is the second largest agro processing
industry in the country offers cotton textiles. About 50 million sugar cane farmers and a large
number of agricultural labourers are involved in sugar cane cultivation and ancillary activities,
constituting 7.5% of the rural population. Besides the industry provides employment to about 2
million skilled/semiskilled workers and others mostly from the rural areas. The industry not only
generates power for its own requirement but surplus power for export to the grid based on by -
product- bagasse. It also produces ethyl alcohol, which is used for industrial and potable uses, and
can also be used to manufacture Ethanol, an ecology friendly and renewable fuel for blending with
petrol. The sugar industry in the country uses only sugar cane as input; hence sugar companies have
been established in large sugar cane growing states like Uttar Pradesh, Maharashtra, Karnataka,
Gujarat, Tamil Nadu and Andhra Pradesh. In the year 2003-04 these six states contribute more than
85% of total sugar production in the country. Sugar production is spread across the globe; it is
produced in over 122 countries. Globally, two distinct raw materials are used for producing
sugar via sugar beet and sugarcane. The use of sugarcane or sugar beet for producing sugar
highly depends on the climatic conditions of the country. The tropical climate is apt for growing
sugarcane whereas temperate regions are suitable for growing sugar beet. Thus, countries in the
tropical or sub- tropical belts like Brazil, India and Thailand use sugarcane whereas in countries like
the US and EU, sugar beet is used for producing sugar. Globally, almost 70 per cent of the sugar is
produced from sugarcane and the rest of the 30 per cent from the sugar beet. It was expected that
the global sugar supplies would be back to comfortable levels after two years of shortfall, however
extreme weather in Australia and Indonesia will lead to shortfall in production. World sugar
production is estimated at 161.9 mn tonnes for the marketing year 2010-11 down by 1.9 mn tonnes
of early estimates. The consumption is estimated at 158.9 mn tonnes, up by 1.2 mn tonnes of early
estimates. Sugar production in Australia may plunge to its lowest level in 19 years to 3.58 mn
tonnes due to Cyclone Yasi hitting Queensland coast. Queensland accounts for about 90 percept of
Australian sugar production. The crop condition in Brazil, the largest producer and exporter of
sugar, is not very good due to poor rains. The entire South Brazil crop which meets two- third of
total global raw sugar requirement is rain-fed. As a result of these, global sugar prices have been

7
rising since February 2011 and we expect the prices of global raw and sugar prices to remain firm
over the next quarter due to tight demand supply situation.

Fig 1:-Global Production and Consumption (Sugar Season-Oct-Sep)

Global Production and Consumption (Sugar Season –

Source: United States Department of Agriculture (“USDA”)

India Sugarcane and Sugar – Area, Yield and Production (Sugar Season – October – September)
2005-06 2006-07 2007-08 2008-09 2009-10*

Area Under Sugarcane (Mn Hectares) 4.20 5.15 5.05 4.41 4.20
Production of Sugarcane (Mn Tonnes) 281.17 355.52 348.18 285.02 277.75
Yield of Sugarcane (Tonnes per Hectare) 66.90 69.00 68.90 64.60 66.10
Number of Factories in operation 455.00 504.00 516.00 489.00 490.00
Total Cane Crushed (Mn Tonnes) 188.67 279.29 249.90 144.98 185.54
Total Sugar Produced(Mn Tonnes) 19.26 28.36 26.35 14.53 18.91
Sugar Recovery (%) 10.21 10.16 10.55 10.03 10.19
Molasses Production (Mn Tonnes) 8.54 13.11 11.31 6.54 8.40
Molasses (% cane) 4.53 4.69 4.53 4.51 4.53
Source: National Federation of Cooperative Sugar Factories
*Provisional
India Sugar Consumption

The sugar consumption in India has grown at a steady pace over the years. It has grown at a
Compounded Annual Growth Rate (“CAGR”) of 4.3 percent during the period from SS1995-96
to SS2008-09. CARE Research expects the sugar consumption at 22.8 mn tonnes in SS2010-11
and 24.5 mn tonnes in SS2011-12. The growing population coupled with growing per capita
income will help the country achieve the projected growth rate. Due to the inelastic nature of
the sugar demand and comparatively lower per capita sugar consumption, there will be
minimal impact on sugar consumption owing to rising sugar prices.
8
 Fig.2. Sugar Production - Million Tonnes(Sugar Season – October – September)

Source: National Federation of Cooperative Sugar Factories (NFCSF), CARE Research

Fig.2. Sugar Consumption - Million Tonnes(Sugar Season – October – September)

Source: National Federation of Cooperative Sugar Factories Ltd (“NFCSF”), CARE Research

India sugar Import & Export

CARE Research expects that with rising stock-to-use ratio and higher international sugar prices
due to production shortfall globally will lead to sugar exports to the tune of 1 mn tonne during
SS2010-11e. Recently, the Government of India (“GoI”) allowed export of 0.5 mn tonnes of sugar
under the Open General License (“OGL”) during March 2011 for SS2010-11.

9
 India Sugar Exports and Imports (Financial Year – April to March)
Exports Imports
FY Exports (Mt) Exports (Rs. Crore) Imports (Mt)
Imports (Rs. Crore)
2005-06 0.32 569.11 0.56
651.59
2006-07 1.64 3127.47 0.00
3.49
2007-08 4.68 5412.16 0.00
2.24
Source:
2008-09Directorate General of Commercial Intelligence
3.33 4448.74 and Statistics (“DGCIS”)
0.39
583.11
State-wise Sugarcane and Sugar Production (Sugar Year 2009-10)
2009-10 0.04 110.23 2.42
Sugarcane
5961.24 Production Sugar Production

Source: (NFCSF)

Sugar Production Cycle

The Indian sugar industry is highly cyclical in nature. The production of sugar in India
completely depends on the acreage under sugarcane and the availability of sugarcane in the
country. Higher sugarcane and sugar production.
Results in fall in sugar prices and thereby fall in the margins of the sugar companies.
Decreased profitability of sugar companies increases sugarcane dues to the farmers. This compels
farmers to switch to other crops thereby causing a shortage of sugarcane and sugar, consequently
increasing sugar prices and profitability of the mill owners, resulting in prompt payment to the
farmers. With the fall in the sugarcane arrears, farmers switch back to the production of sugarcane
and the cycle continues. The typical duration of this cycle is around 4-5 years.
The cyclicality of the Indian sugar industry is fully supply-driven, as steady growth is
observed in sugar consumption. The cyclicality is also attributable to the regulated nature of the
industry, primarily in respect to the pricing of sugarcane.

10
 Sugar Production
Cycle

Source: CARE
Research

Regulation
Sugar being an essential commodity and on account of the higher weightage in the Wholesale
Price Index (WPI), the entire value chain of the sugar industry is kept under the tight control
of the Central and State governments. The sugar industry in India is regulated right from
cane procurement to cane pricing, allocation of cane area to distribution of sugar by the
Central government and the respective state government.

During every SS, the Central government decides the price at which sugar mill owners are
to procure sugarcane from the farmers and also the proportion of the sugar to be sold in
the open market. Apart from fixing the levy quota, the government also controls the
quantum of sugar to be sold in open market by each mill every month, in order to regulate
the price and the supply of the essential commodity. The Indian sugar industry is the
most regulated industry across the globe.

11
The Bagasse based co-generation
The Bagasse based co-generation projects helps the sugar mills in arresting the
cyclicality of the sugar industry through generating stable source of revenue. Power is
insulated from the price fluctuations and is not cyclical in nature. This helps the sugar mills
to shield their margins during the down cycle of the core sugar business. Over the years,
GOVERMENT has given various incentives in the form of soft loans, tax rebates and capital
subsidies to encourage Bagasse-based co-generation projects.
The co-generated power projects help the country to switch from fossil fuels to
renewable source of energy and to control the greenhouse gas emissions. In August 2002,
GoI had signed Kyoto Protocol (it is a protocol to the United Nations Framework Convention
on Climate Change (UNFCCC)) for combating against the global warming by reducing the
greenhouse gas emissions. Under this mechanism, for each tonne of carbon dioxide emission
avoided, the entity is likely to get a Certified Emission Reductions (CERs) or carbon credits
which can be sold to developed countries. Sugar mills are entitled to receive such CERs or
carbon credits as they generate renewable source of energy. This helps the sugar mills to
generate additional source of revenue.

State-wise annual co-generation

capacity in India
Co-generation capacity

State No. of Units Installed Exportable Cpacity (in Mw)

Uttar Pradesh 57 1255
Bihar 2 23
Punjab 3 41
Maharashtra 21 416
Andhra Pradesh 13 195
Tamil Nadu 24 527
Karnataka 27 610
Total 147 3067

Source:
sugarbazaar.com

In the span of three to four years, the co-generation capacity of the sugar mills in India
increased by more than four times. However, due to the various road blocks in setting
Bagasse-based cogeneration projects and selling power, the industry could not realize
its full potential. As per the Ministry of New and Renewable Energy, the sugar
industry has a potential to generate 5,000 MW of surplus power through Bagasse-based
cogeneration projects.
During the same period, cogeneration capacity in MAHARASHTRA has increased
substantially from 100 MW to 1,255 MW as most of the UP-based sugar mills have
succeeded in entering into long-term power purchase agreements with SEBs for supply of
surpluselectricity.

12
Alcohol Industry
Overview

The alcohol production in India is estimated at 1,680 million kls in FY10. The changing
perception of the people towards alcohol, rising youth population in the country coupled
with rising acceptability of alcohol consumption among the female population is driving
the growth story of alcohol in India. CARE Research expects the Indian alcoholic beverage
industry to grow at a CAGR of 9 percent to 2,175 million kls, during the period of FY10-
13. Currently, there are about 325 distilleries in the country with the total production
capacity of 3,540 mn litres. However, the licensed capacity is majorily concentrated in
three states of U.P., Maharashtra and Tamil Nadu.

Alcohol Production in India

(MN Kls)

Source: Business Brains, CARE

Research

The Alcoholic Beverage Industry in India can be broadly classified into four segments -
Beer, wine, Indian Made Foreign Liquor (“IMFL”) and country liquor.

Alcohol Industry
Segmentation

Source: CARE
13
Rectified Spirit (RS) –
Production in India
RS is produced from molasses, a by-product of sugar, and finds applications in
three main areas - chemical sector, fuel oil and potable alcohol. RS is widely used as
intermediates for manufacturing various chemical acidic products such as acidic acid and
other chemicals such as mono ethylene glycol (“MEG”), which is used to make fibre.

The production of RS remained range bound before falling by 25 percent in FY10. The RS
production in India stood at 1.01 mn kls in FY06 which grew to 1.14 mn kls in FY08 and then
fell to 0.72 mn kls in FY10. This was due to the high molasses prices in off seasons 2009 and
boiler shutdown in off season 2010. Sugarcane crushing is expected to be much higher than
the previous season in FY11. Therefore, the total molasses availability will also be higher,
which may lead to a substantial drop in the prices of molasses. Due to this, the production of
Rectified Spirit is expected to be higher during FY11.

Rectified Spirit – Production in India

Source: Centre for Monitoring Indian Economy (“CMIE”)

Production and Consumption of IMFL

India Made Foreign Liquor – Production &

Consumption

14
IMFL
Imports & Exports

India’s IMFL import grew at a CAGR of 11 per cent over the FY06 and FY10 period. The
imports grew from 0.012 million kls in FY06 to 0.019 million kls in FY10. Only 5-6 per cent
of India’s consumption is met through imports. On the other hand, the exports of IMFL
from India declined at a CAGR of 1.1 per cent from 10.2 per cent of the production in
FY06 to 6.3 per cent of the production in FY10. The fall in exports can be attributed to
the rise in domestic demand.

India Made Foreign Liquor – Imports

& Exports

Source: CMIE (Center for Monitoring Indian Economy)

Now as per data this are very biggest industry related to sugar and their by product.

15
2. COMPANY PROFILE
2.1 INTRODUCTION & BACKGROUND:

The factory is situated in Ashoknagar Village. It is an integrated manufacturing

company with strategic focus on sugar and its allied products in power and ethanol. The
company’s registered office is in Shrirampur, Maharashtra and corporate office is at
Shrirampur. The factory is 10 Kilo Meter from Shrirampur. Ashok sahakari sakhar karkhana
was established in 1954 at Co-Operative Basis. Ashoknagar Industries was founded by late
nivruttibhau Narayan P.Bankar with late Bhaskarrao Sadashiv P.Galande.

Initially it acquired 1060 TCP (Ton Crushing Per day) Permission from the Maharashtra
Government in 1952. This unit asset base was moved to its own location in Ashoknagar and
expanded its capacity to 1500 TCP in 1965. Indian technology machines and equipment are
installed those were provided by walchand industries. Then at year 1968 company was
expand sugar mill capacity up to 2600 TCP. As considering company progress in year 1987
government of Maharashtra gives permission for 2800 TCP. In year of 2002 as per sugar mill
improvement and sugar &their by-product a special act for ethanol give permission for
distillery. Power plant was established in 2010. Power plant machines and turbines are of
BHEL. A distillery and ethanol plant of 60 kiloliter per day capacity was added in 2002. The
sugar refinery was set up to progress raw sugar to produce refined sugar meeting European
specification. The current capacity of the sugar plant in Ashoknagar is 2800 TCD and 100 MT
(Million Ton) of raw sugar per day. The co-generation power plant is 15 MW plant. It is
growing very fast in industry. It is dynamic achievement of entrepreneur Mr.Bhanudas
Murkute. The company manufactured and traded over 500000 MT (Million Ton) of sugar in
2010-11 .Total trade flow puts the Company in the top 10 of sugar producers/marketers in
Maharashtra.

This plant is so designed that sugar can be produced not only from sugarcane
but also from raw sugar. This unit manufactures EC-II grade sugar conforming to European
standards, with negligible sulphur content. Its distillery is among the few, to manufacture fuel
ethanol from ethanol. Government of India is encouraging the use of fuel ethanol as mortar
fuel since it is considered to be less polluting and also a renewable source.

16
2.2 NATURE OF BUSINESS CARRIED:

Ashok Sahakari Sakhar Karkhana is integrated manufacturing company with Strategic

focus on sugar and its allied products in Power and Ethanol. Business is seasonal in nature.
sugar and co-generation units are operational during the sugar season i.e. October to April.
Further, any disturbances or disruptions caused due to extreme climatic conditions in a
particular season may lead to a drop in availability and supply of sugarcane to our Company
which in turn reduces the number of days of operation leading to reduction in revenues.
The Group's principal activity is to manufacture and market sugar. It also provides power
generation and ethanol production. The Group operates through four segments. They are
Trading, Sugar, Cogeneration, Distillery and Other. Manufacturing Division: Sugarcane
processing capacity 2800 TCD. Refining Capacity 2900 TPD. Primary Alcohol (Distillery)
1,20,000 litres per day. Ethanol Dehydration 60,000 litres per day. Cogeneration Power Plant
15 MW.

17
2.3 VISION, MISSION , POLICY:

Vision

The company’s vision is to become the most efficient processor of sugar and the largest
marketer of sugar and ethanol in the country.

Mission

“In our endeavour to be the torch-bearers of the Indian sugar industry, we are specially
committed to our farmers, workforce and shareholders. It is our endeavour to provide our
farmers the agreed price in time and to provide a transparent system of sugar cane
procurement. We also seek to provide a congenial atmosphere and work place for the
employees of the company, who are our lifeline. Adherence to the best corporate governance
practices and a deep-rooted commitment to excellence is our resolve. All these culminate in
our permanent effort to enhance shareholder value and wealth through growth of the
company.” To expand its installed capacity, achieve end-to-end integration for all its plants to
improve margins and reduce cyclically of business. Achieve greater raw material security.
Increase its focus of corporate and high value consumers. To reduce price risk in sugar by
hedging. Maintain a strong presence in export market and expand market for ethanol.

Objectives:

Ashok Sahakari Sakhar Karkhana, aims to become the most efficient and market driven
integrated processor of sugarcane in the world. To enable the team to grow in a learning and
motivating atmosphere. To participate in the all-round development of the community &
delivering consistently on returns to all its shareholders. Commitment to keep process
environment friendly.

Environment policy:

Environment policy has become a serious matter in the industrial scenario in India. Central
and State Governments have many guidelines, to be followed by Industries. Ashok Sahakari
Sakhar Karkhana commits to incorporate environmental issues an integral part of
management philosophy in sugar and distillery operations. Towards this Ashok Sahakari
Sakhar Karkhana., will 1. Produce ethanol in a clean, green and safe environment. 2. Comply
with all relevant statutory regulations. 3. Train and motivate employees on environmental
and safety through participation. 4. Maintain the motto of continual improvement
management 5. Strive for pollution prevention by optimizing resources.

18
2.4 PRODUCT & SERVICES PROFILE:

SUGAR-

Sugar is sweetly, white or brown, usually crystalline substance obtained chiefly from
sugarcane or sugar beets and used commonly in food products. Sugar means something
sweet in form of taste. Formula: 12CO2 + 11H2O = C12 H22O11 + 12O2 Carbon dioxide +
water = sucrose + oxygen In chemistry sugar refers to any of the class of carbohydrates to
which this substance belongs Glucose, lactose, and maltose are sugar most plants
manufacture sugar is soluge in water, sweet to the taste and either directly or indirectly for
men table. The chemist knows as “sucrose” one of the family of sugars otherwise known as
saccharides as the name implies, contain carbon and hydrogen plus oxygen in the same ratio
as in water. Sugar is controlled commodity in India under the essential commodities Act,
1955. The government controls sugar capacity additions through industrial licensing and
determines the price of the major input sugar cane, decides the quantity that can be sold in
the open market, fixes the prices of the levy quarter sugar and determines maximum stock
levels for wholesalers etc. Ashoknagar sahakari sakhari karkhana produced sugars is their
main product under sugar they produced various type like Raw sugar are produced for export
oriented approach for several countries like Russia, japan etc. Brown sugar is often produced
by adding cane molasses to completely refined white sugar crystals in order to more carefully
control the ratio of molasses to sugar crystals and to reduce manufacturing costs. Brown
sugars are granulated sugars with the grains coated in molasses to produce a light, dark or
Demerara sugar. They are used in baked goods, confectionery and toffees. Ashoknagar
sahakari sakhari karkhana produced M type sugar for domestic uses. Granulated sugars are
also called as Medium type are used at the table to sprinkle on foods and to sweeten hot
drinks and in home baking to add sweetness and texture to cooked products. They are also
used as a preservative to prevent micro-organisms growing and perishable food from spoiling
as in jams, marmalades and candied fruits. L type sugars are granulated sugars with the grains
their size is large. This are made for various approaches . In food processing industries and
customer want for special purpose like in festivals various sugar type made from this by
crushing. Ashoknagar sahakari sakhari karkhana produced M type sugar for domestic and food
industries uses. In the market after M type there should be more demand of S type sugar
Invert sugars also called S type and syrups are blended to manufacturer’s specifications and
are used in breads, cakes and beverages for adjusting sweetness, aiding moisture retention
and avoiding crystallization of sugars.

Harvesting and processing season:

Harvesting and processing season may vary from country to country and area to area and
factory to factory depending on the convenience. Usually the harvest starts in July/August and
continues to April/May. Some factories have the continuous supply of cane throughout the
year, and they process throughout the year without keeping the factory idle.

19
Handling and transport of cane:

The bulk of the world’s sugarcane is harvested and loaded by hand and transported by trucks,
Lorries, tractors, and bullock carts from growing place to factories. Some factories have
railway track for the purpose of transporting sugarcane and sugar.

By-Products of sugarcane:

The sugar mill produces many by-products along with sugar. A typical sugarcane complex of
2800 TCP capacity can produce 345 ton of sugar, 6000 liters alcohol, 3 ton of yeast, 15 ton of
potash fertilizer, 25 ton of pulp, 15 ton of wax, 150 ton of press-mud fertilizer and 750KW of
power from bagasse.

Molasses:

Molasses is the final effluent obtained in the preparation of sugar by repeated crystallization.
It is the end product from a refining process carried out yield sugar. Sucrose and invert sugars
constitute a major portion (40 to 60%) of molasses. The yield of molasses per ton of
sugarcane varies in the range of 3.5% to 4.5%. Molasses is mainly used for the manufacture of
ethyl alcohol (ethanol), yeast and cattle feed. Ethanol is in turn used to produce portable
Liquor and downstream value added chemical such as acetone, acetic acid, butane, acetic
anhydride, MEG, etc. Some of the alcohol based chemicals like MEG, acetic acid, and acetone
etc., face stiff competition from production through the petrochemical route. Nearly 70% of
molasses produced are consumed by the industrial alcohol manufactures and the remaining
30% is consumed by the portable alcohol sector. After alternating between control and
decontrol, the government adopted the policy of partial decontrol in 1967-68, which has since
been the mainstay of government policy except for two short periods of decontrol in the
1970's Under this policy, the government procures 40% of production at controlled prices
based on the Statutory Minimum price for sugar cane, for supply through the public
Distribution System and the balance 60% is allowed to be sold by the mills in free market
subject to the monthly release mechanism. The levy quota for sugar mills has been brought
down from the peak levels of 70% in 1968-69 to the present levels of 40% as a gradual process
of deregulation of sugar industry.

Bagasse’s:

Bagasse is a fibrous residue of cane stalk that is obtained after crushing and extraction of
juice. It consists of water, fibre and relatively small quantities of soluble solids, the
composition of bagasse’s varies based on the variety of sugarcane, maturity of cane, method
of harvesting and the efficiency of the sugar mill, the usual bagasse’s composition is given in
exhibit 5 as shown below. Content Range % Moisture 46-52 Fibre 43-52 Soluble solids 2-6
Bagasse is usually as a combustible in the furnaces to produce steam, which in turn is used to
generate power. It is also used as raw materials for production of paper and as feedstock for
20
cattle. By making use of bagasse, sugar mills have been successful in reducing dependence on
State Electric Board for electric supply. In the process of crushing of sugar cane, Bagasse, a
fibrous by-product is produced which is used in the boilers to generate steam. Ethanol:-

The Company produces alcohol from the molasses (Molasses is the brown coloured residue
after sugar has been extracted from the juice. Molasses still contains some quantity of sugar,
but this sugar cannot be extracted by usual technology) left after the extraction of sugarcane
juice, which can be used both for potable purpose as well as an Industrial chemical. Further,
this alcohol can again be purified to produce fuel grade ethanol that can be blended with
petrol.

Bio-fertilizers: The residue product from distillery operations blended with chemicals is being
sold as bio-fertilizers.

Power: The Company has a power plant with a capacity of 15 MW at its Ashoknagar Unit and
is using 4 MW for captive consumption in manufacture of sugar and balance 11 MW is
supplied to MSEB for domestic and industrial use. The Company produces power from
Bagasse, which is used in the manufacturing process as well as sold to the state electricity
boards. Further, this Bagasse based cogeneration plant is eligible for carbon credit
compensation under the Kyoto protocol.

21
2.5 AREA OF OPERATION:-

Registered office:

Ashok Sahakari Sakhar karkhana LTD, Ashoknagar, Tal. Shrirampur, Dist. Ahmednagar

Corporate Office:

2nd floor, kesharPrem complex, Shrirampur, Dist. Ahmednagar

Sugar and co-generation:

Ashok Sahakari Sakhar karkhana LTD, Ashoknagar, Tal. Shrirampur, Dist. Ahmednagar

Sugar refinery:

Ashok Sahakari Sakhar karkhana LTD, Ashoknagar, Tal. Shrirampur, Dist. Ahmednagar

2.6 OWNERSHIP PATTERN

Ashok Sahakari Sakhar Karkhana is running on the Co-Operative pattern of the ownership.

Current director body is Shri. Suresh Machindra Galande(Chairman)

Shri. Manik Barku Shinde(Vice Chairman)

Shri. Bhanudas Kashinath Murkute(Guidence)

Shri. S.D.Kakade (Managing Director)

2.7 COMPETITIORS

Shri Bhogawati SSK LTD.

Shri Datta Shetkari SSK LTD.

Shri Tatyasaheb Kore Warana SSK LTD.

Adivasi S.S.K. Navapur Nandurbar Vibhag Ltd (Tal. Navapura, Dist. Nandurbar)

Bahganga Sahkari Sakhar Karkhana Ltd. (Bhum, Dist.- Usmanabad)

Chhatrapati Sambhaji Raje Sakhar Udyog Ltd. (Sambhajinagar (Aurangabad))

22
Dongarai Sagreshwar Shetkari SSK Ltd (Kadepur (Raigaon))

Gurudatta Sugars Limited (Takliwadi, Tal. Shirol, Dist. Kolhapur)

Jai Mahesh Sugar Industries Ltd. (Pawarwadi, Tal. Majalgaon, Dist. Beed)

Khandoba Prasanna Sakhar Karkhana Ltd. (Tal. Karad, Dist Satara)

Mahadik Sugar And Agro Product (Radhanagri, Dist. Kolhapur)

Nira Bhima S.S.K. Ltd. (Tal:Indapur Dist.:Pune)

Priyadarshini Shetkari SSK Ltd (Shivaji Chowk, Udgir, Dist. Latur)

Saibaba SSK Ltd (Tal.Jintur, Dist.Parbhani, At Mankeshwar, Teh.Jintur, Dist.Parbhani)

Sarvodaya S.S.K. Ltd (Karandwadi, Tal. Walwa, Dist. Sangli)

Shree Ambadevi SSK Ltd (Nityanandnagar, Dahigaon (Recha) Road, Tal. Anjangaon, Dist.
Amaravati)

Sidhapana S.S.K. Ltd (Patoda Dist. Beed)

Yogeshwari Sugar Industries limited (Limba, Tq. Pathri Dist. Parbhani)

Sanjivanee S.S.K. Ltd (Kopergoan, Dist. Ahmednagar)

2.8 ACHIEVEMENT AND AWARDS:

The company is working as per ISO 9001 quality standards. The company is
working as per ISO 14000 environ mental standards. The company has also been awarded a 2
star export house status by the Director General of Foreign Trade (DGFT), Government of
India. The company’s Bagasse based cogeneration plant at Ashoknagar has qualified as a
Clean Development Mechanism (CDM) projects. The modern technology of Re-boiler cuts
down quantity of effluent produced 14% helping management of spent wash. Remarkable
reduction in generation of spent wash through various measures. Zero discharge status for
Distillery. Recycle and reuse adaptability in sugar plant, co-generation and distillery. Ashok
Industries has taken up an ambitious program of planting 30,000 trees in the campus of
factory and has successfully implemented it which improves the environment and adds to the
beautification of the sugar mill.

23
2.9 WORK FLOW MODEL:-

Sugar Production process:

Traditionally, sugar is produced from sugarcane, which is procured from the farmers of the
sugarcane command area. However, sugarcane is a seasonal crop available only during a
fixed period of the year i.e. from September-April. This limits utilization of the machinery,
especially the process house. Company set out below the flow chart enumerating the sugar
production and allied products (electricity, ethanol and bio-fertilizers) process:

Juice Extraction:

Harvested sugarcane is transported to the factory, weighed and prepared for crushing. The
cane is prepared to expose the sugar cells, for effective extraction of juice. Prepared cane is
then crushed in a series of mills and juice is extracted. Bagasse, which is the fibrous residue,
is used as fuel in the cogeneration plant.

Juice Treatment and Evaporation:

Juice from the mills is screened and heated in various heat exchangers. The juice is then
treated with Milk of Lime, which reacts with the impurities in juice. Sulphitation of the
juice is done by passing SO2 gas through the juice. The treated juice is further heated and
let into a clarifier where the impurities settle at the bottom and clear juice floats up and is
decanted. Water from the clear juice is evaporated in a series of evaporators. Steam from
the cogeneration power plant is used as heating media for the evaporation. Condensate
from the evaporators is recycled back to the boilers where it is again converted into steam.

Crystallization:

Concentrated juice (syrup) after evaporation is further subjected to sulphitation and

thereafter vacuum boiling in pans is done for complete exhaustion. Once the crystals are
formed in the pan, a mixture of molasses and sugar crystals known as massecuite is
formed. The process of crystallization starts taking place in the pans and is completed in
the crystallizers. The Massecuite is then centrifuged in centrifugal machines to separate
sugar and molasses. Molasses, another by-product, is sent to the distillery for alcohol
production.

Sugar Drying and Grading:

Sugar from the centrifugal separators is conveyed to a rotary drier. The lumps and very fine
powder are separated in the sugar grader. The segregation is done by vibratory process and
different grades of sugar are collected in different silos.The sugar from the silos are packed
in bags of 50/100 Kgs by auto weighing and bagging machines and conveyed to the godowns
24
by belt conveyors, where they are stored and thereafter sold as per the allocation made by
the Government.

Spirit Production Process

Fermentation:

Molasses containing 48% to 50% fermentable sugars from the sugar plant is diluted with
water in the ratio of 1:3. During the fermentation, yeast strains of the species
saccharomyces cerevisiae, a living micro- organism belonging to class fungi converts sugar
present in the Molasses, such as sucrose or glucose to Ethanol. Normally one (1) ton of
Molasses containing 50% fermentable sugars give an alcoholic yield of 250 litres. Optimum
parameters like pH and temperature control and substrate concentration are required for
fermentation.

25
Distillation:

The fermented wash is pre-heated and pumped to the top of analyser column. Steam or
vapors are indicted at the bottom of the analyser column, which strip the Ethanol from the
fermented wash. The vapours coming from analyser column consist approximately 50%
Ethanol and 50% water with impurities such as higher alcohols, aldehydes, acids, sulphur
dioxide, etc. Spent wash from the analyser column bottom is sent for treatment to the
Effluent Treatment Plant. The vapour draw from top of the analyser is fed to pre-rectifier
column for removal of low boiling impurities. The vapours coming out of the top of the pre-
rectifier column are fed to the condenser. The condensed liquid is collected in the pre-
rectifier reflux tank. Impure spirit draw is taken from the reflux and fed to the T.A. mixing
bottle where it is mixed with the impure spirit coming from rectified cum exhaust and fuel
oil column.
Ethanol water mixture from the pre-rectifier column bottom is fed to the rectifier cum
exhaust column. This column serves to strip out Ethanol from liquid stream flowing down.
Steam is sullied at the bottom of the column. The rectified spirit vapors coming out from top
of the column are condensed in the analyzer reboiler. Balance Ethanol vapors are condensed
in the analyzer vent condenser. The condensate from reboiler and vent condenser are
collected in rectifier reflux tank. Condensed liquid is pumped back to the Rectifier cum
exhaust column from the rectifier reflux tank by reflux pump. Impure spirit draw is taken to
the T.A mixing bottle. The rectified spirit is drawn from upper tray of the Rectifier cum
Exhaust column and sent to rectified spirit storage via rectified spirit cooler. High Fusel Oil
and Low Fusel Oil are drawn from Rectifier cum Exhaust column at the required rate. These
draws are taken to the fusel oil cooler and taken to the fusel oil column for further
concentration. Spent lees coming out of the Rectifier cum Exhaust column bottom is used to
pre-heat the feed to Rectifier cum Exhaust column in the rectifier feed pre-heater. A spent
lee is drained to gutter in a controlled manner by the level in the Rectifier cum Exhaust
column bottom. Fuel Oil Column basically is concentrating the fuel oil received from the
rectifier column so as have effective separation of heavy fuel oils. Steam is supplied as a heat
source to concentrate fuel oil.
The Ethanol both pure and impure is first led into separate receivers. The quantity of Ethanol
produced is assessed daily in the receiver and it is finally transferred to respective storage
vats in the warehouse. The spirit from storage vats will be issued for sale. There is strict
control of State Excise Department on raw material used, Ethanol produced, issue of Ethanol
and losses of Ethanol, during storage and transfer from one tank to other tank.

26
Co-generation

In the processing of sugarcane, Bagasse, a fibrous by-product is produced which is used in

the boilers to generate steam. Excess Bagasse from the mills is conveyed to the storage
yard by conveyors. This bagasse stored in the yard is used on two occasions, first
whenever there is any stoppage in the crushing and second during off season. Steam
which is produced by burning Bagasse is subsequently fed to steam turbines where it
expands and rotates the turbine rotor at high speed, which in turn rotates the alternator
to generate power. This power is used to meet the power requirements to operate the
plant and the excess power generated is fed to the grid after upgrading it to 110 KV. The
exhaust steam from the turbine, which is at a very low-pressure of 1.5 kg/cm2, is used for
boiling in the sugar process.
Bagasse is the dry, fibrous residue remaining after the extraction of juice from the crushed
stalks of sugarcane, which is used as a fuel for boilers to generate steam which is used in
production of sugar and for power generation.

Production Capacity &

Installation:-

Company have an installed capacity of 15 MW co-generation plant at our production

facility. Company use Bagasse as a fuel in our boilers to generate steam, which is used
to produce electricity. Company co-generation unit having an installed capacity of 15 MW
generates upto 14.1 MW of which 4 MW is used for captive consumption. Out of the
surplus of 10.1 MW is sold on a merchant sale basis under a Power Purchase
Agreement through Maharashtra state electricity company now called as maha-
distribution & maha-tranco.

27
3. MC-KINSEY’S 7-S MODEL:-

The 7-S Framework of McKenzie is a management model that describes 7 factors to organize
a company in a holistic and effective way. Together these factors determine the way in
which a corporation operates. Managers should take into account all seven of these factors,
for the successful implementation of strategy large or Small. They are all interdependent
organizational variables that need to be taken into account in organizational design. So if
management of an organization fails to pay proper attention to one of them, this may affect
all others as well. On top of that, the relative importance of each factor may vary over time.

Origin: The 7-S Framework was first mentioned in “The Art of Japanese Management” by
Richard Pascale and Anthony Athos in 1981. They had been investigating how Japanese
industry had been so successful. At around the same time that Tom Peters and Robert
Waterman were exploring what made a company excellent. The Seven S model was born at
a meeting of these four authors in 1978. It appeared also in “In Search of Excellence” by
Peters and Waterman, and was taken up as a basic tool by the global management
consultancy company McKinsey. Since then it is known as their 7-S model.

Key – Elements: There are seven interdependent key – elements in the McKinsey 7-S Model.
These are: Strategy, Structure, System, Style, Staff, Skills, and Shared Values. These seven
elements are distinguished in so called Hard S’s and Soft S’s. The Hard – S elements
(Strategy, Structure and System) are feasible and easy to identify. They can be found in
strategy statements, corporate plans, organizational charts and other documentations.

28
 The Soft – S elements (Style, Staff, Skills, and Shared Values) however, are hardly
feasible. They are difficult to describe since capabilities, values and elements of
corporate culture are continuously developing and changing. They are highly
determined by the people at work in the organization. So it is much more difficult to
plan or to influence the characteristics of the soft elements. Although the soft factors
are below the surface, they can have a great impact of the hard Structures, Strategies
and Systems of the organization.

STRATEGY:-

By “strategy” we mean those actions that a company plans in response to or anticipation

of changes in its external environment, its customers and its competitors. Strategy is the
way; a company aims to improve its position vis-a-vis completion, perhaps through low
cost of production or delivery perhaps by providing better value to the customer,
perhaps by achieving sales and services dominance. It is, or ought to be, an organization
way of saying, “here is how we will create unique value.” As the Sugar company’s has
chosen route to competitive success, strategy is obviously a central concern in many
business situations – especially in highly competitive by industries where the game is
won or loose on share points. But “Structure follows strategy” is by no means the be all
and end all of the organization’s wisdom. ASSK is providing ample opportunities to the
people at various levels to impart their skills and expertise in order to enhance growth
by taking positive strategic decisions. The management wants to empower the greater
heights of achievements and each one should be given opportunity to excel and show
their potential, effective and efficient performance. Now I am going to explain the
pricing strategy of ASSK. Pricing Policy: Unlike other consumer or other goods, sugarcane
will not be differing because it is subject to control of Government. Government will fix
the sugar price. Price for exporting will be fixed by the firm. It is management's policy to
fix the price for exporting. Sugar Prices: Sugar is a controlled commodity in India under
the Essential Commodities Act, 1955. Sugar prices in the country can be classified into
two broad categories at the user end as free market prices and prices of sugar through
public distribution system. The GOI (Government of India) announces PDS sugar prices
based on levy sugar prices fixed by it and the subsidy to be provided through budgetary
system. The realization to sugar mills from government levy quota is called levy prices.
Levy prices are fixed by the GOI based on SMP for the year. But usually levy prices are
very low and fall below the cost of production. Therefore the producers are left with
only free sale sugar quota to run the business profitably. GOI controls extend to free
market prices also through the issue of monthly dispatch orders to all the sugar mills in
the country based on demand supply situation in the country. In September 1998, PDS
sugar prices were increased from Rsll.40 per kg to Rs.12 per kg. The sugar price range in
the country for last few years is given below. The sugar prices move in close relation to
production of sugar and the inventory in the country. Sugar prices are the lowest in India
when compared to the leading sugar consuming countries in the world. Converted into
Indian rupees the price equivalent in Japan is of the order. Rs.64.8 per kg. USA. Rs.31.5
per kg. China. Rs.25.78 per kg. Indonesia. Rs.18.62 per kg. Brazil and Pakistan. Rs.17.9
per kg. Sri Lanka, Thailand and Malaysia. Rs.7.18 per kg.

29
1) Increasing our revenues from sugar, power and distillery products in the State of
Maharashtra.
Company propose to increase the capacity of our sugar unit from the present 2800 TCD to
5000TCD.Company believe this increase in the sugarcane crushing capacity will enable us to
become one of the largest sugarcane crushers in the State of Maharashtra at a single
location thereby leading to increase in revenues from all our business segments. Company
also proposes to increase its co-generation licensed capacity from the existing 15 MW
(installed capacity of14.4 MW) to 25MW in future. Pursuant to this increase in the capacity,
we believe our Company shall become one of the largest power generating company from a
single location in the State of Maharashtra.

2) Sale of surplus power generated by the co-generation unit.

Company have installed a power generation unit with 1 boilers and 1 turbines. It utilize
bagasse from the sugar unit as fuel in the boilers to generate steam for running the turbines
which generate an aggregate power of approximately 15 MW. Our co-generation unit
having an installed capacity of 15MW generates upto 14 MW of which 4 MW is used for
captive consumption. Out of the surplus of around 10 MW, 14 MW is sold on a merchant
sale basis under a Short Term Open Access (STOA) arrangement under a Power Purchase
Agreement (PPA) through Maharashtra state electricity board. The proposed expansion of
our integrated facility includes the installation of a new boiler with 150 TPH capacity of 110
kg/cm2 pressure and a turbine 25 MW. These additional installations will enable our
Company to increased capacity of 40MW which will generate around 35-40 MW of power
during the sugar season.

3) The proposed expansion of the co-generation unit of our integrated production facility
will lead to cost effective power generation.
Company proposes to install a 150 TPH boiler with operating parameters of 110 kg/cm2
pressure and temperature of 540 +- 5C. This high pressure boiler is much more efficient
than the existing 67 kg/cm2 pressure boilers being operated by our Company. The
proposed boiler will lead to lower consumption of fuel by more than 10% for steam
generation as compared to the existing boilers. Overhand above the fuel savings, the
steam temperature from this boiler is higher than the existing boiler which will generate
more power per ton of steam consumed in the turbine.

4) Expansion of our distillery unit will enable higher production and sale of IMFL products.

5) Increase the sale of IMFL products by entering into contract manufacturing

arrangements with licensed manufacturers.
ASSK’s existing business segments or revenue verticals include sugar, distillation
(alcoholic spirits, IMFL and ethanol) and co-generation. Presently, IMFL contributes
nearly 32% to the revenues of Company.

30
STRUCTURE:-

31
To understand this model of organization change better, let us look at each of its
dimensions, as most organizations do. The central problem in structuring today is not the
one on which most organization designers spend their time that is, how to divide up tasks. It
is one of emphasis and coordination how to make the whole thing work. The challenge lays

32
not so much in trying to comprehend all the possible dimensions of organization structure
as in developing the ability to focus on those dimensions which are currently important to
the organization’s evaluation and ready to re-focus as the crucial dimensions shift. The
activities are classified and based up on the job profile. The mangers perform the various
functions of the concerned departments. There is vertical communications in the
organization. The manager has a span of control on 10-20 members in a particular section.
The departmentalization in company as a whole is based on the Function because each
department has to perform their respective functions. The decision making is partly
centralized and partly de-centralized. The employees have to follow according to the
instructions given by their higher authorities.

Departmentation is a process of dividing the large functional organization into

small and flexible administrative units. The basic need of department ion arises because of
limitation on the number of subordinates that can be directly managed by superior. Basis
for Departmentation: Departmentation may be on the basis of function, products region,
customers, process time, and marketing channel. Functional basis is very popular method of
departmentation. It refers to grouping of actives of organization into major functional
department like, production, purchase, marketing etc. In ASSK’s departmentation is on the
basis of Function. The major Functional departments of Shri Renuka Sugars Ltd are as
follows.

PRODUCTION DEPARTMENT: The department deals with the production activities in the
production floor where men and machines are employed to convert the cane and chemical
into finished product (sugar) for handling them over to sales department. For sugarcane the
production process is carried in the following steps. Pressing of sugarcane to extract the
juice. Boiling the juice until it begging to thicken and sugar begins to crystallize. Spinning the
crystals in a centrifuge to remove the syrup, producing raw sugar. Shipping the raw-sugar to
a refinery where it is washed and filtered to remove remaining non-sugar ingredients and
colour. Crystallizing the drying and packing the refined sugar.

PURCHASE DEPARTMENT: The head of the department’s heads is the purchasing

department. Purchasing decisions are divided into two. One for purchase of capital assets
and another is regular purchase. Purchase of capital assets: It requires approval of
management. Considerable point while purchasing capital assets are, Life duration of the
assets. Cost of the assets. Capacity etc. Regular Purchases: Indent from the user is original
document to issue purchase order for regular purchase of materials and goods. Process:
Receiving indent from the users Calling tenders if necessary. Preparing purchase order.
Ordering to suppliers. Making purchase return if the material does not match the order.

STORES DEPARTMENT: Stores department holds the entire inventory required in the
organization all the materials coming are subject to record at stores and holds them at
stores until they are issued to the required department.

Functions: Receipt of materials. Inspect it with ordered quantity, quality and any
specification. Some of the materials like chemicals are to be sent to laboratory for
inspection and testing. Getting the indents from the departmental head and issuing it. To
make the purchase returns if the materials are rejected. Maintain minimum level of

33
materials. Informing purchase department when materials require. Materials Handled:
Engineering tools spares. Raw materials. Stationary. Packing materials.

ADMINISTRATIVE DEPARTMENT:

The administration controls and monitors the activities of the time office and security
personnel. Human Resource Development is the challenging function in- front of the
administration department.

PERSONNEL DEPARTMENT: Functions. Recruitment and selection: The advertisement for

recruitment of employees is made through leading newspaper. Apart from this as statutory
obligation, the company appoints trainee also among the application received eligible
candidates appointed for the job. Training and development: Training imparts skills to newly
employee. Training is necessary in production, mechanical and electrical department. On
the job training is arranged at the plant. Remuneration: Remuneration refers to the reward
for labor and service. Basically remuneration is on the basis of hours worked. Each shift is of
8hours and 3 shifts a day. Fringe Benefits Canteen facility. Transportation facility. . Housing
facility. . Free electricity. . Excreta (A type of bonus given during deepawali.). . KLE’S Health
Card (Rs.1 lakhs for the employee and Rs. 50,000 for spouse.) . Workmen compensation
policy depending upon the age and position of the employee. TIME OFFICE: Objectives of
time office are. . Keeping attendance records for administration and payment purposes. .
Maintains records for giving increment and promotion (Promotion is on the basis of Merit.)

FINANCE DEPARTMENT: Finance is the life blood of the business. One cannot imagine a
business without finance department because it is the central point of all business activities.
Finance department of ASSK plays a very important, as it is here that decision with regard to
procurement and utilization of funds are taken. Such decision includes the preparation of
various budgets, allocation of funds for various activities or division of the firm as well as
distribution of profits etc. Bankers : MS CO-OP BANK, BANK OF BARODA, NABARD, SBI

ACCOUNTING DEPARTMENT: Introduction: ASSK is an Industrial organization manufacturing

sugar, power and ethanol accounts department of ASSK plays a vital role in achieving
company's objectives. Need for accounting system: . To ascertain the profit / loss of the
business . To ascertain the financial position of the business . To provide control over assets
and properties of the company . To provide information to tax authorities like, sales tax,
income tax, control excise etc., . Assistance to management on: 1. Decision-making 2.
Forward Planning and budgeting. . To provide information to government central, state and
various local bodies

CANE DEPARTMENT: Cane is the only raw material for producing sugar. The department
keeps a direct link with farmers and helps the farmer to develop the cane. Objectives of
Cane Department: . To procure the cane at proper time and proper condition. . To look after
the transportation of cane from farmers through trucks tractors and carts. To develop the
cane and giving proper guidelines to grow. . To keep and maintain concerned land database.
. Hiring trucks and tractors. . Harvesting cane. Circle office: Assistant cane development
officer heads the circle office there are 20 circle officers located at different places
surrounding from where cane is being produced. Supervisor assists circle officer. There is

34
one supervisor for 1500 acre. Supervisors are to report corresponding circle offices. Weekly
report has to be sent the cane manager.

ELECTRICAL ENGINEERING DEPARTMENT: This department takes care of all repairs and
maintenance of fittings and fixtures of the plant. The electrical engineer is the head of the
department. Assistant electrical engineer and junior engineer assist him. Functions: . To
repair & maintenance of machines. . To develop power for prime movers & lighting. .
Attending electricity related works. . Maintenance of switch board etc

SALES DEPARTMENT: Sales manager is in-charge of the sales department. The sales
department takes care of all the sales. The Assistant sales manager has to supervise the
states. Marketing and advertisement are not necessary in sugar industry because the
customer do not ask for specific company produced and that not separable. Anyhow the
contacts with dealers and agents are maintained and developed. About 40% of the sugar
produced by the company is used for domestic consumption and the rest 60 % is exported.
Functions: As mentioned above, marketing and advertisement efforts are not made as
mentioned above, marketing and advertisement efforts are not made to promote sales. But
the sales department has to keep in contact with dealers and agents. . Getting orders from
parties. . Arranging for delivery to parties. . Maintains records of sales. . Sending reports to
managing director (head office).

CHEMICAL DEPARTMENT: Chemicals department is directly concerned with production.

When the production is on process, mixing proper quantity and proper chemicals is
necessary. Chemicals department is the production department here. Important Chemical:
Lime and sulphur dioxide.

POWER PLANT: Power plant uses the fiber of processed sugarcane (biogases) as fuel to
generate electricity in an environmentally responsible manner. An integrated 35MW power
plant generates and supplies electricity to the state grid produced from sugarcane waste.
Steam used to rotate turbines.

DISTILLERY: Distillery Plant was located in the year 2002 at the same location. Spirit is
produced at the distillery plant. Molasses converted into rectified spirit. Molasses is waste
product from sugar juice. It is the by-product in the sugar industry. Production of spirit is
subject to control of excise department (Maharashtra state government). The same
department makes distribution and sale of spirit only. Ethanol is also subject to control of
excise department. In India 5% ethanol is used in petrol. Industrial buyers for ASSK: Product
Customers Sugar.

35
SKILLS:

A skill is the ability, knowledge, understanding and judgment to accomplish a task. Skills may
be defined as what the company does best; the distinctive capacities and competencies that
reside in the organization. The skills of employees of organization are very appropriate, as
the business needs. The skills needed are both technical and clerical (finance and marketing
related). Sales executives are mainly from the branches of B.Com, BBM, and MBA. And
skilled people are mainly engineers. The firm knows what is its responsibility in the market
and complete knowledge in order to satisfy its customer delightfully. ASSK consists of the
personnel, having high technical and managerial skills. Ashok Sahakari Sakhar Karkhana is
having distinctive capabilities in comparison with the competitors. Training is provided to all
level of the employees, on specific tasks related to job and also on various other broad
aspects. They also contribute to the total customer value. The technical personnel are sent
Vasantdada Sugar Institute, Pune each year for up-gradation and post-graduation courses
and further choosing them on merit. Training: ASSK’s HR strategies focus on providing need
based training to its employees to develop their knowledge, skills and attitude in
compliance with ISO 9001/14000 standards. During the year, 49 in-house trainings were
organized covering: . Operation. . Maintenance. . Instrumentation. . Electrical. . Finance. .
Information Technology. On-the-job training was provided to 100 employees in Key areas of
operation.86 Executives were nominated for 60 external training programmes on various
topics. Awareness programme on Internal Quality Auditor Training on ISO 9001 (Quality
Management System), ISO 14001 (Environmental Management System) were conducted to
train 38 Executives in the above standards.

36
STYLE:

This part of McKinsey 7-S framework includes the leadership style of top management and
the overall operating style of the organization. It also includes the motivational style used in
the company. Some other important areas which come under style are: 1. How does top
management make decisions (Ex participatory v/s top-down)? 2. How do manager spend
their time (Ex: informal meeting, informal conversation in the field with customer)?
Leadership Style Leadership is different to management. Management relies more on
planning, organizing and communication skills. Leadership relies on management skills too,
but more so on qualities such as integrity, honesty, humility, courage, commitment,
sincerity, passion, confidence, positivity, wisdom, determination, compassion and
sensitivity. Some people are born more naturally to leadership than others. Most people
don't seek to be a leader. Those who want to be a leader should develop leadership ability.
Leadership can be performed with different styles. Some leaders have one style, which is
right in certain situation and wrong for others. Some leaders can adapt and use different
leadership styles for the given situation. A number of leadership styles are given below. .
Authoritative Leadership. . Democratic Leadership. . Participative Leadership. ASSK
Perspective: In the modern business situation of ASSK, the company is using “Democratic
Leadership style”. Anyone in the firm can directly meet any one. Daily meetings will be held
between the sales team and the team manager to solve the problems of the teammates and
to collect the sales details. Team manage will report to the AGM (Assistant General
Manager) on the same day. Once in a week AGM will meet the sales executives. Once in a
month Vice-Chairmen of the organization meets all the managers. The decision power is
handled By CEO. He will take major decisions regarding developmental activities and
relationship with other dealers and corporate buyers. Each department is given power and
responsibilities to operate and take decisions. ASSK has instituted adequate internal control
procedures commensurate with the nature of business and size of its operations. ASSK has
also prepared an ‘Internal Control Procedure Manual’ for all the departments to ensure that
the control procedures are followed by all departments. Internal controls are supported by
internal audit and management reviews. The Board of Directors has an Audit Committee
chaired by an Independent Director. The Audit Committee meets periodically the
management, . External-internal auditors . Internal-internal auditors . Statutory auditors and
reviews the audit plans . Internal controls . Audit reports and the management response to
the observations and recommendations emanated from the audit. All significant
observations and follow-up actions are reported to the Audit Committee. The Audit
Committee has met seven times during the financial year. 3.7

SYSTEM:

System refer to the formal process and procedure used to manage the PRESIDENT
organization including the management control system, performance management,
measurement and reward system, planning, budgeting, resource allocation, MIS,
distribution system, accounting system, trading system etc. Systems maintained by the
ASSK: The firm has both manual and also computerized systems. . Financial system/
Accounting System: Currently they are using Tally 7.2 as the accounting software. Each

37
branch and department is divided and each have their own files maintained, and at the end
of the day the data will be transferred to the main branch which will be processed together
by the finance manager. 2. Customer data base system: The details of the customers are
maintained in the software called SAP which helps in maintaining long relationship with the
customers, and also help in the process of any difficulty arises. This will help them to
shortlist the deliveries and timely delivery of cars. 3. Compensation system/ Reward system:
The salary details of various designations, payment dates and payments made are recorded
and also the incentives given are also maintained here. The software used for this purpose is
SAP. 4. Attendance System: The VB* Punching Machine is used to record the attendance of
the employees. The employees has to insert there thumb on the machine when they comes
to the company and at the time of going again they has to insert his thumb on the machine.
This enables the company to have proper recording of the attendance.

STAFF

Staff (in the sense of people, not line / staff) is often treated in one of two ways. At the hard
end of the spectrum, we talk of appraisal systems, pay scales, formal training program, and
the like. At the soft end, we talk about moral, attitudes, motivation, and behaviour. People
are one of the most important assets of the company. The technologies, Products and
structures of a company can be copied by competitors but no one can match the highly
charged, motivated people who care these things. People are firm’s repository of knowledge
and they are central to company’s competitive advantage. Well educated, coached and
highly motivated people are critical to the development and execution of strategies,
especially in today’s faster- paced, more perplexing world, where top management alone
can no longer assure firm’s competitiveness. The staff of ASSK – Top, middle and lower
management have nurtured following qualification thereby being able to meet the
expectations of their valuable customers. . Quality: ASSK staff maintains professional
attitude among all employees. . Line & Staff Relationship: Line refers to those positions of an
organization, which have responsibility, authority and is accountable for accomplishment of
primary objectives. The relationship existing between two managers due to delegations of
authority and responsibility and giving or receiving instructions or orders is called line
relationship. Line authority represents uninterrupted series of authority and responsibility
delegating down the management hierarchy. ASSK has adopted Line & Staff organizational
structure that offers individual the opportunity to meaningfully learn & participate across
diverse business processes. The Managing Director of the company responsible for the
Quality Management System. He is overall in-charge overseeing the overall growth of the
company, whereas plant heads look after day -to -day activities. The business process heads,
as shown in overall organization chart, are treated as top management to establish,
implement, maintain & continually improve effectiveness of Quality management to
establish, implement, maintain & continually improve effectiveness of Quality Management
System. The Deputy General Manager follows the Managing Director. The team leaders of
various departments report to the Deputy General Manager.

According to the company the As of November 30, 2011, we had 1,191 full-time employees
of which 111 are managerial, 158 supervisory, 288 are skilled and 562 are

38
workmen/trainees/semi-skilled workmen. Most of our employees are from nearby area
of factory. Company hired 709contract labour as on November 30, 2011.The average age of
our senior management team and skilled employees is approximately 42 years. Employees
are not currently unionized, and there have been no work disruptions, strikes or other
employee unrest to date. Our Company believes that it has maintained good relations with
its employees. We also sponsor our engineers, chemists, and other employees for various
advanced courses in sugar engineering, sugar technology and alcohol technology at various
institutes.

SHARED VALUE

Shared values are what engender trust and link an organization together. Shared values are
also the identity by which an organization is known throughout its business areas. These
values must be stated as both corporate objectives and individual values. Every organization
and every leader should have a different set of values that are appropriate to its business
situation. How To Establish Shared Values? Ensuring employee's understanding of
organization's values and vision requires the organization to have clearly defined values.
Without this, organization can get itself into real trouble. . Defining shared value is more
than putting words on the paper. Most organizations have values statements or mission
statements, yet many do not follow them. Winning organizations create successful cultures
in a systematic way using various approaches that may include visual representations,
training seminars, and/or socializing events. Unlike the other six ‘S’s, super ordinate goals
(Shared Values) don’t seem to be present in all, or even most organizations. They are,
however, evident in most of the superior performers. The different values system of
subordinates is to be responsible to their departmental duties as delegated by the
functional / departmental managers. The organization can work effectively and efficiently if
there is proper co-ordination. Culture of the company practice integrity, honesty,
commitment, promoting salesmen’s.) . The company promotes Team Work. . The company
value leadership. (Result oriented and innovative, positive attitude). The company have a
passion for excellence (competing with global standards). The company reward and
recognize the standard

39
SWOT ANALYSIS

INTRODUCTION:

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis
is an extremely useful tool for assessing and communicating the current position of an
organization or a particular reform option in terms of its internal Strengths and Weakness
and the external Opportunities and Threats it faces. 4.2 SWOT ANALYSIS: SWOT analysis
came from the research conducted at Stanford Research Institute from 1960-1970. The
background to SWOT stemmed from the need to find out why corporate planning failed.
The Research Team was Marion Dosher, Dr Otis Benepe, Albert Humphrey, Robert Stewart,
and Birger Lie. The research carried on from 1960 to 1969. 1100 companies and
organizations were interviewed and a 250- item questionnaire was designed and completed
by over 5,000 executives. During the research, initially SWOT analysis was called SOFT
(Satisfactory, Opportunity, Fault, and Threat) analysis which was nothing but good and bad
about operation in its present and future. “What is good in the present is Satisfactory, good
in the future is an Opportunity, bad in the present is a Fault, and bad in the future is a
Threat”. This was called the SOFT analysis. Afterward in a Long Range Planning in
Switzerland, the ‘F’ of SOFT changed to ‘W’ and then it called as SWOT analysis.

Strengths
-Fully integrated player
-Reduced impact of seasonally.
-Excellent relationship with Sugarcane farmers.
- Registering co-generation plant proper roads & highways leads to for carbon credits.
-Right products, quality and outputs.
-Superior product performance as compared to competitors.
- New technology in Manufacturing.
-Well planned infrastructure
-Abundant and Assured plan of Sugarcane
-Power Supply to state grid
-Lowest Process Losses
-Highly skilled and motivated workforce
-Self-sufficient in power and water
-ASSK is the second largest producer of sugar in the north nagar region after sanjivani.

Opportunities
-Integrated distillery.
-Well placed for exports.
-Superior Technology.
– Focus towards corporate and supply of sugar-cane.
- Track record of successful acquisitions.
-Machinery that can be upgraded for higher capacities
-Opportunity to get into value added business
-Opportunity to set up bagasse based paper plant
-High value of by-products for down stream industries.

40
-Huge potential to increase the productivity of cane and sugar recovery rate.
-Technology upgradation, new advanced technology available for the by-product utilization.
-Develop closer ties with the community and stakeholders
-Educate the community about local industry issues. - Superior utilization of fixed assets.

Weaknesses
- Extra cost of exporting raw sugar.
-Non availability of raw sugar in excess
-Cyclical Industry
-Highly regulated Industry
-Virtually No control over Raw Material Price
-Lackadaisical attitude of government in providing infrastructure such as roads etc
-They have found difficult to pay for the sugar cane supplied by the farmers.
-Most of the machinery (Nearly 50%) is more than 30 years old and still using the old
technology

Threats
- Competition from other Sugar Mills.
-Pricing policy of the government.
-Dependent on farmers for the industrial buyers.
-Import of Sugar
-Frequent changes in Government Policies
-Sugar sector is vulnerable to political interest.
-Ground water availability for irrigation.
-Quality of soil deteriorates due to overuse of fertilizer and pesticides to increase Sugarcane
yield.
-Increasing urbanisation in Ashoknagar areas.

41
Analysis of financial information
Balance sheet:

2010-11 2009-10
A) Source of Fund
1.Share Capital 93957994 76122475
2.Reserve &Surplus 1045745741 307730817.9
A.etc 734541138.8 633834297.3
3.Secured Loan 660838670.1 766204896.7
4.Unsecured Loan 11028781.08 19799617.08

TOTAL DEBT

5.Total Liabilities

TOTAL 2546112325 1803692104

B) Application of Fund
1.Gross Block 1222002761 452911602.7
2.Investment 24672415 56321415
3.Current Asset
C.A. 972708590.2 915050812.1
Capital 79198446.31 121902314.1
4.missleneus Expenses
Adv. 214858480.8 176883360.4
P L Ac 32671634.95 80622600

2546112325 1803692104

------------------------------------------------------------------------------------------------------------

2009-10 2010-11
PROFIT LOSS ACCOUNT
A INCOME
1 Sale
sugar 12749199.94 1510773154
by- product 71279301.4 73641556
2 Other income 31028984.04 47402913.48
by- product Profit 7215653.89 16612166.58

TOTAL 1384443890 1648429790

B EXPENDITURE
1 R.M. 819707131 973662399

42
 excise duty 26055458 29212044
transport 105881586 168076259
supply 3077727.86 7182190.51
development 25313594.93 42822640.21
salary 117129303.4 137853830.5
strore 65838341.53 86553777.96
selling expence 12233469.01 20919651.88
administration 26299972.87 34435833.97

interest 31921398.31 81655206.81

EBITDA
Depreciation - 16723057 18104992
EBT

SHORT TERM RATIO 2009-10 2010-11

1)Current Current Asset 2.5 1.71
Current Liabilities
2)Quick Liquid Asset 0.31 0.13
Liquid liabilities
LONG TERM RATIO
1)Debt. Equity Long Term Debt 0.73 1.66
Equity
PROFITABILITY RATIO
1)Interest cover EBIT & Depreciation 5.27 5.43
Interest
2)Return on
investment Net Profit 23% 15%
Capital Employed
3)Net profit Net Profit 9 11
Sale
TURNOVER RATIO
1)Return on Asset Net Profit 41% 15%
Total Asset
2)Inventory Turnover Cost of goods sold 7.59 6.66
Avg. Inventory
3)Deposit Turnover Sale 44.66 22.45
Avg.Debators
4)Capital Employed Sale 4.48 1.76
Capital Employed

43
LEARNING EXPERIENCES

It is a wonderful experience of being able to observe the working of an

organization first hand as it is my first time experience. This exposure to the corporate
working will help us in comparing the standards in other companies. It will also help us in
choosing our specializations and the career which one is planning to get into in the long run.
As my first exposure to the corporate word, the things which I have learned as a trainee in
this organization are as follows.

The first thing I learned as a trainee is to be punctual. First few days I was not punctual.
One day I did not go to the company and failed to inform the Senior Administrative officer.
The next day I went to the company, the officer asked me not to come for the next 2 days. I
realized my mistake and I was punctual for the rest of my training programme.

Human Resource: . The company recruits its manpower through various sources such as
internal sources, campus recruitments, advertising, etc. . The selection process consists of
Collection of applications blanks, Screening of applications, written tests (aptitude &
technical Personal interview, Technical interview, medical Examination, job offer, Placement
and induction). . Training is based on the requirements of the employee. Each employee is
given a questionnaire which consists of the various skills required to perform a particular
job. The employee rates himself on various aspects. Based on the ratings, the area in which
training is to be given is decided and a training calendar is prepared every year. . The
employees are appraised on their performance once in every 6 months. The appraisal
method is based on ‘Rating Scale’. The appraiser rates his subordinate based on the targets
set and how far the subordinate is able to achieve his set targets.

Marketing: . Marketing department is considered as the key department in this organization

as it is responsible for generating orders for the company’s product range. These work
orders are sent to respective department for processing. . At present the company is using
pull strategy for marketing its products. The company fixes to both distributors as well as to
marketing personnel to meet the desired objectives. If they achieve the target it provides
incentives to sales personnel.

Production: The Company has sugar laboratory which conducts tests and check for
suitability of product to health care. . All employees have to wear uniform on all working
days. This shows the discipline of workers. . The plant is designed in the shop floor and the
movement of materials from one machine to another is easily understood by me.

General: The company uses VB* punching machine to record the attendance of the
employee. The company has a strict security department. They will not allow any outsider to
enter the company unless the Administrative department gives permission. The trucks and
tractor are allowed to enter inside the company only after checking the invoice and the
license of driver. The depreciation is calculated on the Reducing Balance Method. . The
company follows more of an Organic type of structure which develops self-reliance and
decision making abilities among the departments. . The department’s functions as individual

44
teams. This creates a sense of team spirit among the group members in each of the division.
This also creates a competitive environment with in the organization. . The subordinates are
encouraged by their superiors to take initiatives in production planning and control which
could lead to reduction in cycle time.

CONCLUSION:-ASSK have state of art equipment and a highly competent technical team that
produces one of the highest quality sugars. It is growing very fast in the industry. It is
dynamic achievement of entrepreneur Mr. Bhanudas Murkute. ASSK is not only
concentrating in production of quality sugar, but also engaged in developing new seeds
which will be more suitable to the climate. Irrigation planning by ASSK is appreciable. It
arranges loans from banks for pipeline facilities to fanner's fields. Lots of irrigation is being
done under this scheme repayment to banks is made from the bill of concerned farmer.
Sugar industry is agro based and monsoon season hits the production. The reason as to why
sugar factories will be closed is because of inconvenience of harvesting and even
transporting the cane to the factory. Indian sugar industry is highly fragmented with
organized and unorganized players. The unorganized players mainly produce Gur and
Khandsari, the less refined form of sugar. The Company is the only one in the industry today
with a formal risk management system in place. As a significant step forward in hedging own
sugar price risk as well as that of customers, the company became an active corporate
member on NCDEX dealing in sugar commodities to trade in spot market and in futures.
With an able management and robust vision, Ashok SSK Ltd today is one of the fastest
growing sugar manufacturers in the country.

45
PART B
GENERAL INTRODUCTION

Aim

Study of process management & control and analysis of process improvement in

Ashok Sahakari Sakhar Karkhana

Nature and Scope of the study.

Manufacturing process management (MPM) is a collection of technologies and

methods used to define how products are to be manufactured and Optimized
manufacturing process. MPM differs from ERP/MRP which is used to plan the ordering of
materials and other resources, set manufacturing schedules, and compile cost data.A
cornerstone of MPM is the central repository for the integration of all these tools and
activities aids in the exploration of alternative production line scenarios; making assembly
lines more efficient with the aim of reduced lead time to product launch, shorter product
times and reduced work in progress (WIP) inventories as well as allowing rapid response to
product or product changes Manufacturing Process Management (MPM) is a business
strategy for the collaborative development and optimization of manufacturing processes in
enterprise.

MPM allows multiple alternative and resources to collaborate as one single enterprise
throughout the entire development of a manufacturing process. MPM leverages specific
technologies and methodologies to create a collaborative environment for authoring,
simulating and managing manufacturing processes.

MPM is a critical component of Automised-Manufacturing, a broader business strategy

that addresses the full industrial process, from the initial concept of a new product until it
is delivered to the customer. MPM enables manufacturers to use their product designs to
define how the product is going to be manufactured and then to deliver these processes to
the shop floor. Simply stated, MPM transforms “what” into “how” and hands it off to
“when” and “where”.

While the product design process defines an electronic bill of materials - the “what” -

46
MPM defines an Automized Manufacturing processes - the “how.” This information is
stored on a one source that allows easy access and management of data throughout
the enterprise.

MPM enables the optimization of the manufacturing process chain, significantly cutting
time-to-market and time-to-volume and production costs.

.Objectives of the study

1) To understand the nature of the ASSK ‘S existing Manufacturing Process Management &
its environment

2) To understand benefits and challenges of Manufacturing Process Management

respectively of ASSK.

3) Implementation of Manufacturing Process Management

4) To suggest the implementation of Manufacturing Process Management model for

effectiveness in ASSK.

5) The Primary objective of MPM is to study the scope and application of MPM in the
Organization.
6) The Secondary objective is to understand the benefits of MPM and the factors affecting
the successful implementation of MPM in Organization.
7) The sub objective is to Proposed a Model in Organization for effective Production.

Statement of problem
In Ashok Industries existing model of manufacturing process management of distillery as
well as sugar is not flexible with production. To enhance production of distillery proposed
new manufacturing process model.

Meaning of Research methodology.

The system of collecting data for research projects is known as research

methodology. The data may be collected for either theoretical or practical research for
example management research may be strategically conceptualized along with operational
planning methods and change management.
Some important factors in research methodology include validity of research data, Ethics
and the reliability of measures most of your work is finished by the time you finish the

47
analysis of your data.Formulating of research questions along with sampling weather
probable or non-probable is followed by measurement that includes surveys and scaling.
This is followed by research design, which may be either experimental or quasi-
experimental. The last two stages are data analysis and finally writing the research paper,
which is organised carefully into graphs and tables so that only important relevant data is
shown. The research work was conducted by participatory method using focused groups,
key informants, individual interviews, as well as observation by researchers. Data collection
covered technical, social, economic and environmental impact made by the installed
equipment. Participants in the research included owners of the sugar processing plants,
Sugarcane farmers (including out growers), employees in the sugar plant (operators), and
the surrounding communities. Action oriented research was adopted so as to feed solutions
to the problems relevant to the participating research partners. Sites for carrying out the
study were identified as in Ashoknagar regions, making a sample size of. These fall into two
main categories, namely those ones supplied with sugarcane from out growers and those
utilising sugarcane from their own farms. It was expected that the socio-economic
characteristics of the two categories would be different.
The basic information required for the study was collected as per sample questionnaire.
Separate questionnaires were also prepared for surrounding village governments, sugarcane
out growers, sugar consumers, and supporting mechanical workshops

Types of research technique

The various types of research which a researcher can apply in order to achieve one’s desired
objective. Therefore to achieve the objectives of my research I have used Qualitative
Descriptive along with scientific research. This is based on proper research design to meet
the objectives of the study.

Sampling is done with combination of judgement & Convenience The process of

judgement, or purposive, sampling is based on the assumption that the researcher is able to
select elements which represent a ‘typical sample’ from the appropriate target population.
The quality of samples selected by using this approach depends on the accuracy of
subjective interpretations of what constitutes a typical sample. It is extremely difficult to
obtain meaningful results from a judgement sample because no two experts will agree upon the
exact composition of a typical sample. Therefore, in the absence of an external criterion, there is
no way in which in the research results obtained from one judgement sample can be judged as
being more accurate than the research results obtained from another. A sample of convenience
is the terminology used to describe a sample in which elements have been selected from the
target population on the basis of their accessibility or convenience to the researcher.

Convenience samples are sometimes referred to as ‘accidental samples’ for the reason that
elements may be drawn into the sample simply because they just happen to be situated,
spatially or administratively, near to where the researcher is conducting the data collection.

The main assumption associated with convenience sampling is that the members of the target
population are homogeneous. That is, that there would be no difference in the research results

48
obtained from a random sample, a nearby sample, a co-operative sample, or a sample gathered
in some inaccessible part of the population. As for judgement sampling, there is no way in which
the researcher may check the precision of one sample of convenience against another. Indeed
the critics of this approach argue that, for many research situations, readily accessible elements
within the target population will differ significantly from less accessible elements. They
therefore conclude that the use of convenience sampling is likely to introduce a substantial
degree of bias into sample estimates of population parameters.

What Is a Real Hypothesis?

A hypothesis is a tentative statement that proposes a possible explanation to some

phenomenon or event. A useful hypothesis is a testable statement which may include a
prediction. A hypothesis should not be confused with a theory. Theories are general
explanations based on a large amount of data.

1) According to process Management

H0 = Manufacturing Process Management is not effective for improving the performance of

industries.

H1 = Manufacturing Process Management is effective in Sugar industries.

2) Application- Process Management in distillery

In sugar mill integrated plan for sugar as well as ethanol/spirit production. Company want to
improve the production in distillery. But basically it required large amount of steam. As per
steam generation with respect to Cost Analysis Company Want alternative solution for
production process. Following hypothesis for that

H0= Arrangement of Separate Boiler for optimized process.

H1= Sharing with Co-Generation Boiler for steam purpose.

H2=Tie up with 4 steam boiler for steam sharing purpose.

H3=Combined H1 & H2 Hypothesis

H4=Seasonal Production

Data collection

The data collection was done mostly during crushing season, which usually takes 180-210
days (6-7 months) a year, starting from the month of June or July. A good research required
for comprehensive data collection and analysis and also to investigate the dynamics of the
sugar industry in and the village level sugar processing plants in particular.
Data collected was analysed qualitatively as well as quantitatively by computer
coding using Microsoft Excel programmes. Descriptive statistics, mainly the frequency

49
distribution was used to analyse the level of impact made by the installed equipment.
Conferences, seminars and workshops were utilised to discuss and evaluate the existing
problems facing the sugar industry. Participants in those included key players in the sugar
industry and technology in general. These include international experts and officials from
government ministries (Industries and Trade, Agriculture, Planning Commission, Research
Institutions and Finance), and the private sector (potential entrepreneurs and traders).
The framework for technological appropriateness in rural development in
The project was to check the opinion of the Manufacturing Process Management users
about whether it helps in developing effectiveness in the business using primary as well as
secondary data. The primary data was obtained through observation, direct communication
with the people in industries.

Data Collection Tool

The data collection tool that I have used is Questionnaire & technical information of
industry . I have selected questionnaire as a data collection tool primarily because of
descriptive nature of sampling & secondly it was the most suitable tool that could help in
achieving all the objectives of the study & to do the analysis deeply and effectively.
I directly communicate with management body and employees working in Engineering,
Production department of the firm.

.
Primary data

Direct communication with people in the industries which are from various department.

Secondary data

Secondary data was collected from other organisations involved with the technology such
as Sanjivani SSK & other chemical industries/ distillery, relevant regional and district
government offices etc. Secondary data is also collected from industries documents

50
 2. ANALYSIS AND INTERPRETATIONS

What is Process Management?

Process management is the ensemble of activities of planning and monitoring the

performance of a process. The term usually refers to the management of business processes
and manufacturing processes. Business process management (BPM) and business process
reengineering are interrelated, but not identical.

Process management is the application of knowledge, skills, tools, techniques and systems
to define, visualize, measure, control, report and improve processes with the goal to meet
customer requirements profitably. It can be differentiated from program management in
that program management is concerned with managing a group of inter-dependent
projects. But from another viewpoint, process management includes program management.
In project management, process management is the use of a repeatable process to improve
the outcome of the project.

ISO 9001 promotes the process approach to managing an organization.

...promotes the adoption of a process approach when developing, implementing and

improving the effectiveness of a quality management system, to enhance customer
satisfaction by meeting customer requirements. Source: clause 0.2 of ISO 9001:2000

Manufacturing process management (MPM) is a collection of technologies and methods

used to define how products are to be manufactured. MPM differs from ERP/MRP which is
used to plan the ordering of materials and other resources, set manufacturing schedules,
and compile cost data.

A cornerstone of MPM is the central repository for the integration of all these tools and
activities aids in the exploration of alternative production line scenarios; making assembly
lines more efficient with the aim of reduced lead time to product launch, shorter product
times and reduced work in progress (WIP) inventories as well as allowing rapid response to
product or product changes.

Manufacturing process management (MPM) Solutions for Process Industries are integrated
applications that provide process manufacturers with the means to plan and schedule, track
and analyse, and direct and operate their operations.

The global manufacturing economy seems to be back on track with just about all regions of
the world ramping up spending, after a tumultuous couple of years. Over the past several
years, the market has been delayed due to the economic conditions and there is pent up
demand for MPM solutions that were postponed during the recession.

Companies are continuing to look for ways to improve operational efficiency, meet
regulatory compliance regulations, improve visibility, and reduce costs. Succeeding in
today’s global climate requires innovation and operational excellence along several
dimensions such as dynamic value creation, supply chain synchronization and visibility, and
51
achieving cost efficient operations. Manufacturers are using MPM to enhance their ability
to innovate and adapt their products and services to changing market conditions. MPM
provides the visibility to uncover opportunities for innovation and demand. It captures and
automates business processes and can include operations intelligence, workflow
management, so that they can be easily modified when needs change. Applications range
from operations intelligence, recipe management, material tracking and more. The MPM
market continues to grow because it improves visibility, track and trace, and the bottom
line.

Production Development Process

The core element of MPM is the Production Development Process (PDP) which was
developed in order to provide a global planning approach to our customers from the very
first ideas to the production launch. This process encompasses three main steps with seven
interdependent phases with specific tasks in each phase. The tasks ensure all areas of the
production are planned to the same strategy and quality level.

Concept Planning

 General boundary conditions

 Initial process development
 Floor space / Plant layout / Head Count
 Equipment and Investment
 First indication of Production Cost

Detailed Planning

 Supplier selection
 Process development
 Equipment build-up
 Pre-acceptance co-ordination

Realisation

 Installation management
 Production validation
 Ramp-up support

Each phase of the PDP has its own detailed process. Defined quality gates secure the
fulfilment of the required activities and release to the interdependent phase. This enables
us to ensure the production is developed in view of optimum manufacturing processes,
quality, and investment.

52
Fig. MPM functional Area

Process Development & Process Monitoring

The analytical techniques and expertise available at MPM are suitable for more than just
troubleshooting and addressing specific problems reactively, once they have occurred. They
can also be used proactively, during research and development, to provide information on
test or pilot samples as new processes are being developed. The use of good analytical
experimental design early and often in the development cycle can avoid costly trial-and-
error repetition and may uncover potential issues at an early process stage.

Once a process is up and running, EAG can provide on-going monitoring during the
production cycle, to help customers catch process deviations before they lead to potentially
very costly manufacturing issues. Routine testing of production samples can help detect
issues and quality variations in material suppliers, equipment vendors, and cleaning and
maintenance procedures before they become major problems.

Potential Use Scenarios

 Routinely monitor incoming material batches from suppliers before they enter
production
 Use routine analyses to monitor incoming and in-use process
 Monitor control samples to evaluate changing environmental conditions or
contaminants in a production facility
 Spot-check mid-production samples for characteristics such as layer thickness,
doping uniformity, or the presence of contaminants
 Compare new material parameters with an established baseline

53
Fig. MPM from concept to customer

Manufacturing processes within the production and quality areas such as assembly,
inspection, testing, receiving, fabrication, sterilization, packaging, and others all require a
careful process development method.

Taking a project from concept to the manufacturing floor allows flexibility to provide for a
carefully planned and thought out process enabling a smooth transition from engineering to
manufacturing. Each development project with the eventual serial production process in
mind.

Managers & engineers develop the process sequence, labor requirements and operator
work assignments in accordance with ISO 13485 / ISO 9001 and FDA to achieve an efficient
and safe production operation. This is ensured through the following process development
steps:

Proven Process gives you the opportunity and the confidence to outsource your entire
project. Proven Process can take a product from inception to delivery. Because we take the
time to fully understand and properly specify your requirements, Proven Process creates the
right design for your product. PROVEN PROCESS seamlessly transitions from product
concept through product approval and production. The process provides the assurance of
market delivery. Concept to Customer Turnkey Service includes every step in the process
that leads you to your own customer’s door:

54
Benefits of MPM

360 degree view of business

Organizational-level data sharing

Reduce cost on customer acquisition

Centralized process interaction

Improved processes support

Increase product & service quality

High rate of customer retention

Boost new business

Increase revenue at low cost

55
Application

1) H0= Arrangement of Separate Boiler for distillery to optimized process.

According to this option the following subcategories are explain

A) Cost

COST INCLUDE APP.COST REMARK

Operational cost Production Increase because Highly increased
,manufacturing boiler system is upto
30%
Financial cost Overall Budget increase upto Highly increased
10-16 crores

Fuel cost Bagasse Extra boiler fuel upto Highly increased

25%

Labour cost Supervisor, labour 20% Highly increased

Process cost Various parameter 20% Highly increased

Installation cost Boiler, civil work 7-8 crores Highly increased

,pipeline

B) Technical Aspect

TECHNICAL ISSUE STATUS LIMITATION REMARK

Steam Economy Good - Good for medium
scale boiler

Efficiency of Process Excellent - Highly increase in

efficiency of process

Effectiveness of Good - effective

Process
Flexibility of Process Yes - -

Optimization of Good - -
Process
Maintenance High maintenance Adding time Extra maintenance
for boiler & system

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3) Analysis of process

SUGAR ALCOHOL MOLLASES

PRODUCTION Good Good Good
PROCESS Good Good Good
SEASON OF 6-7 month 6-7 month depend 6-7 month depend
PRODUCTION
STORAGE Warehouse tank

2) H1= Sharing with Co-Generation Boiler for steam purpose.

A) Cost

COST INCLUDE APP.COST REMARK

Operational cost Co-Gen Boiler and 10% Slightly Increased
Production
,manufacturing
Financial cost Overall cost Increased by 20% Not much

Fuel cost For boiler only Increased 20% Not much

Labour cost Extra worker 10% Not much

supervisor

Process cost Various parameter 10% Slightly Increased

Installation cost Steam supply system 10% Slightly Increased

,pipeline

B) Technical Aspect

TECHNICAL ISSUE STATUS LIMITATION REMARK

Steam Economy Not good Sharing with co-gen Not good for boiler
boiler it not match steam economy
steam parameter
Efficiency of Process Bad Sharing purpose is Efficiency Is
not good purpose decreased both
system
Effectiveness of Not good - No
Process

57
Flexibility of Process Not Not flexible you have No
shared system that
affect both
Optimization of Bad - Slightly
Process

Maintenance High Two aspect that High

difficult

3) Analysis

SUGAR ALCOHOL MOLLASES

PRODUCTION Average Average Average
PROCESS Average Average Average
SEASON OF 6-7 month 6-7 month 6-7 month
PRODUCTION
STORAGE Warehouse Storage Tank -

3) H2=Tie up with 4 steam boiler for steam sharing purpose.

A) Cost

COST INCLUDE APP.COST REMARK

Operational cost Boiler, Production Increased up to 30% high operation cost
,manufacturing increased because 4
boiler & system
Financial cost Overall Up to 30% High

Fuel cost Bagasse Up to 20% High

Labour cost Supervisor, labour 10% High

Process cost Various parameter 27% High

58
Installation cost steam supply system, 15% medium
civil construction,
other installation

B) Technical Aspect

TECHNICAL ISSUE STATUS LIMITATION REMARK

Steam Economy Not good 25% of steam on average
each boiler is for
distillery is affect
main production
Efficiency of Process Bad - average

Effectiveness of No - average
Process
Flexibility of Process No - average

Optimization of No - average
Process

Maintenance high - high

3) Analysis of process

SUGAR ALCOHOL MOLLASES

PRODUCTION Average Average Average
PROCESS Average Average Average
SEASON OF 6-7 month 6-7 month 6-7 month
PRODUCTION
STORAGE warehouse Storage tank -

4) H3=Combined H1 & H2 Hypothesis

A) Cost

59
COST INCLUDE APP.COST REMARK
Operational cost Boiler, Production Up to 45% Highest
,manufacturing

Financial cost Overall Up to 35% Medium

Fuel cost Bagasse 25% Low

Labour cost Supervisor, labour 20% Highest

Process cost Various parameter 40% High

Installation cost steam supply system, 26% Low

civil construction,
other installation

B) Technical Aspect

TECHNICAL ISSUE STATUS LIMITATION REMARK

Steam Economy Good - average

Efficiency of Process Slightly effective - Good

Effectiveness of Not - Good

Process
Flexibility of Process No - Good

Optimization of No - Average
Process

Maintenance Very high - Bad

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3) Analysis of process

SUGAR ALCOHOL MOLLASES

PRODUCTION Nice Nice Nice
PROCESS Nice Nice Nice
SEASON OF 6-7 month 6-7 month 6-7 month
PRODUCTION
STORAGE Warehouse Storage tank -

5) H4=Seasonal Production

A) Cost

COST INCLUDE APP.COST REMARK

Operational cost Boiler, Production 10% Low
,manufacturing

Financial cost Overall 15% Medium

Fuel cost Bagasse 12% Low

Labour cost Supervisor, labour 16% Low

Process cost Various parameter 8% Low

Installation cost steam supply system, 25% Medium

civil construction,
storage tank, other
installation

B) Technical Aspect

TECHNICAL ISSUE STATUS LIMITATION REMARK

Steam Economy Good - Excellent

Efficiency of Process High - high

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Effectiveness of Good - High
Process
Flexibility of Process Good - Good

Optimization of Nice - Yes good

Process

Maintenance Low - low

3) Analysis of process

SUGAR ALCOHOL MOLLASES

PRODUCTION Excellent Excellent Excellent
PROCESS Excellent Excellent Excellent
SEASON OF 6-7 Month After sugar season 5- 6-7 Month
PRODUCTION 6 month
STORAGE Warehouse Storage tank Storage Tank

Existing model is 3:1 type means 3 boilers for sugar mill 1 boiler for distillery.

HYPOTHESIS ADVANTAGE DISADVANTAGE SELECTION PRIORITY

A) 1. - HIGH LOW
2. HIGH LOW HIGH
B)H0 Process Finance HIGH
H1 - Process , production low
H2 - Process , production low
H3 Process &finance Process , production good
H4 Process ,finance, Time HIGHEST
production

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3. CONCLUSION AND RECOMMENDATIONS

According to the various factors it suggests that Process management have assumed
importance as tools for creating and sustaining competitive advantage. The integration
strives to satisfy and promptly deliver the products, ensuring availability of product and
maintaining profitability of the manufacturer. It ensures that better quality is offered,
technology is implemented in a phased fashion and the connection from customer to
supplier is extended. The evolution and implementation of Manufacturing Process
Management is discussed. A Manufacturing model for efficiency of fully integrated
organization and its implementation is discussed. A case study of Process Management
is discussed to show the advantages of integration.

4. BIBLIOGRAPHY

www.wikipedia.org

www.microsoft .com/dynamix

A Typology of Production Control Situations in Process Industries Jan C. Fransoo Eindhoven

University of Technology, The Netherlands

Process industry supply chains: Advances and challenges Nilay Shah

Centre for Process Systems Engineering, Department of Chemical Engineering, Imperial
College London, London
1. Kochalka, T.S., “MRP in a Process Industry – Why Wait?”, Production and Inventory
Management Journal, Vol. 19 No. 4, 1978, pp. 17-20.
2. Duncan, R.M., “The By-product Bill of Material”, APICS Conference Proceedings, 1983,
pp. 288-92.
3. Nelson, N.S., “MRP and Inventory and Production Control in Process Industries”,
Production and Inventory Management Journal, Vol. 24 No. 4, 1983, pp. 15-22.
4. Taylor, S.G., Sewart, S.M. and Bolander, S.F., “Why the Process Industries Are Different”,
Production and Inventory Management Journal, Vol. 22 No. 4, 1981, pp. 9-24.
5. Connor, S.J., Process Industry Thesaurus, American Production and Inventory Control
Society, Falls Church, VA, 1986.
6. Wallace, T.F. (Ed.), APICS Dictionary, 5th ed., American Production and Inventory Control
Society, Falls Church, VA, 1984.
7. Sepehri, M., Silver, E.A. and New, C., “A Heuristic for Multiple Lot Sizing for an Order
under Variable Yield”, IIE Transactions, Vol. 16 No. 1, 1986, pp. 63-9.

63
5. ANNEXURE

Questionnaire
What strategy you used to improve your process?

Are you using Process management in your company?

Do you think it is effective?

How do you keep track of your production?

How do you know, which process are useful in your production?

Is there any improvement in the profits of business after you start working on MPM?

How it is helpful in Production?

Do you have any substantial increase in benefits with respect to profit?

What do you think MPM is related to Production?

If YES how it is related?

Can the integrated model of MPM and Finance be implemented in future? How?

Process Control Management at British Sugar’s Allscott Sugar Factory

British Sugar, part of the Associated British Foods (ABF) group is the leading sugar
supplier in the UK, providing sugar for the top brand names in sugar confectionery,
chocolate confectionery, soft drinks and preserves etc.
British Sugar has six sugar factories across the UK, and each factory is split between a “beet end”
and a “sugar end”. Typically, a factory processes “beet” between September and March, termed the
“Campaign”. The “beet end” employs various processes to create “thick juice” a liquid which has a
65% sugar content. The “sugar end” boils the “thick juice” and seeds it with tiny sugar crystals which
provide the nucleus for larger crystals to form and grow to create sugar. The business of processing
beet gives rise to several interesting challenges which directly affect process efficiency, sugar yields
from the beet, and ultimately factory profitability. British Sugar needs to consider several factors: They
must carefully manage relationships with beet growers so that the sugar content in the beet is at the
highest percentage at the time of harvest; The process plant needs to be thoroughly tested and
operational in time for commencement of the campaign and factory managers must quantify and
schedule the amount of beet which can be received at the factory to match process plant capacities,
knowing that once the beet is harvested, the sugar content in the beet reduces over time. Outside of
the “campaign” a factory undergoes an extensive maintenance programme. If a factory can store the

64
“thick juice” the “sugar end” processes can continue to produce sugar long after beet harvesting has
finished. This enables the factory to utilise its sugar end equipment, therefore maximizing a greater
Return on Capital Employed (ROCE). As part of a strategic business development program to
maximize economies of scale and usage of process plant across each sugar factory, the sugar factory
at Allscott,
Shropshire was identified for major expansion to meet overall business objectives. The
planned expansion would approximately double capacity to 850,000 tonnes of sugar beet every year
and extends the production cycle of the “sugar end” processes beyond the end of the campaign. This
daunting target was met by enhancing 50 percent of the factory (beet end) over a two-year time
frame. The expansion of the beet end processes involved the construction of two “thick juice” storage
tanks, and associated process control. These new tanks have a combined storage capacity of 86,000
tonnes. The scheme also involved the implementation of replacement process control schemes for
another six sub processes,
2001/2002 Allscott factory Upgrade
1 - Beet Intake
2 - Pre Scalder
3 - Wet Pulp
4 - Lime Kiln
5 - Rotary Vacuum & GP Filters
6 - Falling Film Evaporators (FFE)
7 - Factory Wide Heating Duties
8 - Thick juice import & export
Pre 2000 Process Enhancements
9 - Pelleting
10 - Boiler & Turbine Control
11 - Pans
12 - Sugar Screening
13 - Sugar Silo Air Conditioning

The Allscott factory has been producing sugar since 1927, and to date this project is the largest in the
history of the site. The selection of the correct process control specialist was critical to achieving a
smooth implementation, therefore particular emphasis was placed on proven project management
and in-depth knowledge of disparate control systems. In this case Rockwell Allen Bradley for
sequence control, and Eurotherm for complex continuous control. The process control aspects
required the re-configuration of redundant control equipment coupled with the integration of new
control equipment. Process control programming software was used to configure nine control panels
located geographically around the site, communicating over a fibre optic network to supervisor
workstations. The nine control panels contain numerous distributed processors.
To complement the changes carried out at the factory floor level the site’s
supervisory systems were upgraded. Servers were enhanced and workstations added to provide
operators with the high visibility required to control the new and modified processes. By factory start-
up over seventy graphic pages and windows had been created or modified, and in excess of a
thousand tags had been added to the various databases. Like many advanced manufacturing plants
British Sugar require significant amounts of data to be recorded for plant optimisation and product
traceability. In this instance a dedicated, high-availability server was assigned to manage the
collection and storage of factory floor data for various Manufacturing Execution System (MES) related
tasks. These included: the configuration and presentation of key trend data; the management of the
interface between factory data and the company’s Wide Area Network (WAN); the conversion and
archive of data onto the company’s Oracle database and the backup of all the control server images
and databases.
The significance of this project did not allow for any compromise, delay or partial
failure. Flexibility, reliability and best in class were the terms of reference. Any delay in factory start up
would directly affect the supply chain, and process failure could result in customer commitments not
being met and/or the implementation of costly alternative strategies. As before, British Sugar turned to
Charter Tech, an independent systems integrator with proven experience of integrating disparate
control systems and over ten years’ experience of providing solutions and services to British Sugar
across the majority of its factories. Charter Tech personnel assisted with all stages of the project from
initial consultation to final implementation and commissioning. Charter Tech engineers worked side by
side with the British Sugar project team, during the entire project life cycle to ensure the final solution

65
met the business requirements and maximized plant efficiency. The flexibility and approach of Charter
Tech personnel allowed British Sugar staff to develop solutions to problems as they occurred.
The British Sugar Project Engineer commented
“I enjoyed the way that the Charter Tech team responded, sometimes at short notice, to problems
without fuss to ensure the job got completed”.

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