CHAPTER I- INTRODUCTION AND RESEARCH METHODOLOGY

INTRODUCTION

Sugarcane is the primary cash crop among farmers of the western Maharashtra region. The sugarcane is
mostly sold to sugar mills for sugar production. Majority of these mills are cooperatives owned by the
sugarcane growers. The cooperative movement for the sugar industry started in the 1960s in Maharashtra with
the announcement of 12 places in the state where sugar factories could be established. The then Bombay state
government announced a capital share of one million rupees to establish sugar factories at these potential 12
places. A central committee was formed by Bombay State Cooperative Bank under the chairmanship of
economist Dhananjayrao Gadgil. Asia's first cooperative sugar factory was established at Pravaranagar in the
Ahmednagar District of the then Bombay state in 1950 by Vithalrao Vikhe Patil, & Gadgil. The sugar mill,
called Pravara Sahakari Sakhar Karkhana Ltd, had majority ownership by the local farmers.

At present there are 173 cooperative sugar factories in operation. Maharashtra accounts for 20% of sugar
production in India behind Uttar Pradesh at 24%.The presence of this industry has led to development of rural
places, from which the sugarcane is drawn to factories, including an improved road network, transportation
facilities, medical facilities, education facilities, and banking. Sugar mills in Maharashtra produced just over
100,000 tons of sugar in 2017-18 season, however the glut in global sugar production and the subsequent price
crash has led to sugar factories not being able to pay the farmers to the tune of 20 billion rupees (US $300
million).

Sugar Industry is the main agro-based industry in Maharashtra. Maharashtra was best in Sugar Industry’s
growth, the past initial records was about 160 percent as against 400 per cent growth recorded in the country as
a whole. In Maharashtra, the crop is generally of 18 months duration as on average 30 irrigations and 400 kg.
Net per hectare is used as against almost no irrigation or a maximum of two or three irrigations in irrigated areas
during summer season and not more than 30 kg. of net per hectare on as average used in sugar cane cultivation
In Bihar and crop is mostly of 12 months duration only.

The present study aims at examining the management of production in Shree Datta Shetkari Sahakari Sakhar
Karkhana Limited, Shirol. Production and productivity are the important aspects which affects the growth and
development of any industry. Production is such as aspect through which raw materials are transferred in to the
finished products.

Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd., Shirol was registered as a Cooperative Society under the
IV Maharashtra Cooperative Societies Act, 1960 on 9 June, 1969. An industrial license for establishing a sugar
factory on cooperative basis with initial crushing capacity of 1250 M. Tonnes per day was issued subsequently,
which enthused a sprite of cooperation, along with creating confidence and developing an attitude of self-
reliance amongst the economically and down-trodden farmers in this area. Shree Datta Shetkari Sahakari Sakhar
Karkhana Ltd., Shirol is situated in the industrially backward area of Kolhapur District near village Shirol and
the first Cooperative Sugar Factory in the state amongst the 12 contemporary licensees licensed in the year
1969. The project was implemented within a short span of about 22 months and trial crushing operations could
start on the auspicious day of Varsh Pratipada, the 16 March, 1972. The area of operation of the sugar factory
comprises of 115 villages from Shirol, Hatkanangale, Karveer and Kagal Talukas of Kolhapur district and
Chikodi and Ahtani Talukas of Belgaum Dist. Out of these 11 villages, 14 villages from Shirol Taluka have
been exclusively allotted to the factory and remaining villages are common with the other neighboring factories.

The extent of drop in Maharashtra’s sugar production will play a crucial role in determining the country's total
sugar production for the 2019-20 seasons. As impact of floods in the state, expected that a total of 518 lakh
tonnes of sugarcane to become available for crushing, while the total sugar production of Maharashtra will be
58 lakh tonnes against 107 lakh tonnes produced in the previous year.

The manufacturing of sugar is comprised of different processes which are chiefly as follows:

 Separation of the juice from the fiber by pressure

 Clarification and removal of impurities that interfere with the subsequent evaporation and crystallization
 Removal of high percentage of the water by evaporation
 Conversion of sugar from a dissolved condition into crystal form
 Separation of crystal sugar from the mother liquor or molasses by centrifugals.
 Drying and packing of sugar in bags

By- Products:

Inspite of the continuous and rapid progress of the Sugar Industry its By-Products have continued to
remain neglected. The fluctuating character of the supplies of the By-Products and lack of a viably developed
technology are said to be a limiting factors for the growth of by-products use. “It is well said that rich industries
make their country rich by utilizing their profitably.” It is to be noted that at present the realizations from the
by-products of sugar represents about 1 to 3 per cent of the value of sugar.

There are various By-Products, they are as follows:

1. Bagasse :
Bagasse is one of the most important by-products of the sugar industry. It is residue from cane left
after extraction of juice by milling diffusion. Of all the by-products of the Sugar cane bagasse is
produced in the large quantity. It accounts for 32 to 36 per cent of cane. The production of bagasse
depends upon the fiber content of sugarcane which fluctuates from 10 to 14 percent in Maharashtra and
 other parts of the South India and 14 to 18 percent in North including Bihar. The fiber content in sugar
cane is higher in North India than South. The percentage of bagasse also fluctuates from factory to
factory depending upon the equality of sugarcane available to it for crushing.

2. Molasses :
Molasses is another by-product of Sugar Industry. Molasses accounts for an output of 3.0 percent to
5.5 percent of cane in the case of vacuum Pan sugar factories and about 7 percent to 8 percent in the case
of Khandasari units. Molasses is the thick brown of Khansari units. Molasses is the thick brown liquid
left after the crystals are removed from the mother liquor. It is often boiled again for making lower
qualities of sugar and the molasses finally obtained, contains very little sucrose. According to the control
molasses order 1961 “Molasses means” the mother liquor product in the final state of manufacture of
sugar buy vacuum process from sugar cane or Gur. It is dark coloured viscous mass out of which further
crystallization or separation of syrup is not possible by ordinary means.
In fact that molasses is the second type of by-product and brings in came to all Sugar Factories either
by sale to distilleries or to private channels for the purchase of mixing with tobacco etc.
The production of molasses has increased more than four times during the last two decades. The
increase in the production of by-products provides very good scape for installation of new ancillary
industries using by-products.

3. Press Mud or Filter Mud :

Press mud or filter mud is an important by-products of the sugar industries. During the course of
clarification of Sugarcane juice, most of its impurities are precipitated. These are filtered in filter process
or in rotary vacuum filters and washed to remove sugar contents. The cake which is discharged after
washing is called Press Mud or filtered mud. It is also called filter cake. The resultant product known as
press mind contains certain mineral and organic matters.

1.1 STATEMENT OF PROBLEM

In the light of above discussion, the researcher intends to carry out his research endeavor entitled
as “A Study of Production Management with special reference to Shri. Datta Sakhar Karkhana
Shirol”

1.2 OBJECTIVES OF THE STUDY

1. To study production process of Shree Datta Shetkari Sahkari Sakhar Karkhana LTD. in production
of sugar.
 2. To study measures adopted for increasing sugar production in Shree Datta Shetkari Sahkari Sakhar
Karkhana LTD
3. To study impact of measures on productivity and performance in Shree Datta Shetkari Sahkari
Sakhar Karkhana LTD.
4. To study the strategies they are using for maintaining the highest productivity.
5. To study the scientific methods adopted in Shree Datta Shetkari Sahkari Sakhar Karkhana LTD
6. To evolve best approach for productivity measurement for the unit engaged in Shree Datta Shetkari
Sahkari Sakhar Karkhana LTD

1.3 METHODOLOGY OF THE STUDY

The present study is conducted using field survey. While carrying the survey researcher approach directly to
the members of different selected sugar factories in Kolhapur District and through viewing websites of the
respective sugar factories. For this purpose questionnaire were designed. Empirical data is collected from the
samples of eight selected sugar factories in Kolhapur District on the basis of criteria - crushing capacity of
TCD, 3000 and above 3000.

1.3 SOURCES OF DATA COLLECTION

There are number of research techniques which can be employed for market research. Different methodology is
employed according to the objective and scope defined for research.

Methods: Basically there are two methods

A. Desk Research or secondary research

B. Field Research or primary research

Primary Data: Primary data is collected from each selected sugar factory in Kolhapur District, from the
concern Production Manager by personal discussion. Data is collected through the direct personal observation,
information from the local sources and correspondence, data through questionnaires.

Field research is employed to collect primary data by:

A. Observation method
B. Survey method

Field Research focuses on consumer or buyers motives (e.g. Why they will buy your product instead of your
competitors product), which forms the basis of the positioning strategy.
The process of conducting field research on India sugar industry:
1. visiting the researcher own country
2. Visiting markets which involves

A. Planning of visits
B. Seeking /making appointments with target companies/organizations
C. Field research in exhibitions/trade fairs which involves “Right Timing”
D. Open ended questionnaire

Secondary Data: Secondary data is collected from the past records of selected sugar factories and by survey
and visit to various libraries and websites, journals and magazines, of an Autonomous Institution.

Secondary research is the search for information from relevant data already available. The data could take the
form of information from censuses or information readily available from industry and trade directories.
A. Desk Research uses secondary data from:
B. Internal sources i.e. company itself
C. External sources using libraries of industry and trade associations, chambers of commerce, export promotion
organizations, international bodies such as International Trade Centre, Geneva, CBI, Holland etc
D. Internet sites of various agencies/organizations such as ITPO,WTO,IMF,ITC etc
E. Publications (books, magazines, journals, newspapers)
F. Market study/survey reports
G. Trade delegation reports
H. Catalogues of MNC’s or leading world manufacturers
I. FOA’s reports
J. Market intelligence reports

Method Employed For This Study:

The data for determining the “Indian sugar Industry” was based on primary and secondary research. The data
from primary sources was collected by visiting the Shri. Datta Sakhar Karkhana Shirol. Data from secondary
sources such as official website of company, research papers, internet and magazines was collected.

1.5 TOOLS AND TECHNIQUES

1.5.1 Sample Design

Defining Population:
 This study is based on the Shree Datta Shetkari Sahkari Sakhar Karkhana LTD’s production and
management.

Sample size:

This study is based on production management of Shree Datta Shetkari Sahkari Sakhar Karkhana LTD.
is famous industry in Kolhapur.

1.5.2 Scope and Limitations of Study

The research study covers the study of Shree Datta Shetkari Sahkari Sakhar Karkhana LTD. The study looks
into production management of company and performance over years.
The research study puts special emphasis on relation of production and management operations.

The limitation of my study is due to the lack of time. This research is based on primary and secondary data and
already published and unpublished reports. Questionnaire was not taken for the field research and my research
constitute fully desk based research. Instead an open ended questionnaire was prepared and discussed with the
Management of Shree Datta Shetkari Sahkari Sakhar Karkhana LTD

1.5.3 Important Terms and Concept

CHAPTER II

2.1 PROFILE OF THE ORGANIZATION

Shree Datta Shetakari Sahakari Sakhar Karkhana Ltd., (SDSSSKL), located at Dattanagar was established in the
year 1969 with an initial sugarcane crushing capacity of 1250 TCD. The factory is situated at Dattanagar, Tal.
Shirol, Dist. Kolhapur in Maharashtra.
SDSSSKL has its registered office at Dattanagar, Taluka Shirol, District Kolhapur, in Maharashtra State.

2.2 ORIGIN

A pioneering effect of starting an Agro- Industrial project in the co-opeartive field for achieving social up
liftment through rural development was made for the first time in the Ahmednagar District in the year 1950 by
Pravara Sahakari Sakhar Karkhana Ltd., under the guidance of distinguished co-operative leaders like sevashri
vaikuntbhai Mehta and Shri Vithhalroa Vikhe-Patil and it proved to be very successful venture mainly on
account of efforts of the rural co-operative leaders. This has unshared in an era of Sugar Co-operative in
Maharashtra which has resulted in transforming rural economy in the vicinity of the Sugar Factories by ensuring
stability and better return to the cultivators.

Shirol Taluka of Kolhapur District is gifted by the presence of natural irrigation potential on account of five
rivers viz. KRISHNA, PANCHGANGA, WRANA, DOODHGANGA and VEDHGANGA are very fertile land
of alluvial type soil. The agriculturists in this area were very eager to have a Sugar Factory as to ensure all
round development and economic development and economic prosperity to the higher and poor and marginal
farmers. A preliminary meeting was therefore, held at kurundwad in Shirol Taluka on 31st Dec. 1960 for
organizing a Sugar Factory. After collecting requisite amount of share capital, an application for industrial
license was forworded to the Government of India. During initial phase late Shri. Dattajirao Baburao Kadam,
Late Shri. Dinkarrao Bhausaheb Yadav and Dr. Appasaheb alias S.R. Patil put their joint efforts to get the
license from Government of India.

The main promoters put hard efforts to ehtablish the Sugar Factory in adverse condition. The persistent efforts
put forth by the Promoters of the proposed Shree Datta Shetkari Sahkari Sakhar Karkhana Ltd., Shirol,
Ultimately proved to be successful and Gov. of India issued a letter of Intent in the month of May, 1969, in
accordance with its enlighted agro-industrial Policy. Shree Datta Shetkari Sahkari Sakhar Karkhana Ltd., Shirol,
was registered as a Co-operative Society under the Maharashtra Co-operative Societies Act. 1960 on 9th June
1969 vide Registration Number KPR/PRG/(A)-1. An Industrial License for establishing a Sugar Factory on co-
operative basis with initial crushing capacity of 1250 M. Tonnes per day was issued
Last four years Awards achieved by Factory:

1) 2011-2012 - Karkhana was awarded Late Vasantdada Patil Award for Best overall Performance of
sugar factory in Maharashtra by Vasantdada Sugar Institute , Majari BK, Tal. Haveli, Dist. Pune
2) 2011-2012 - For Best Financial Management Award in south zone of Maharahtra Vasantdada Sugar
Institute , Majari BK, Tal. Haveli, Dist. Pune
3) 2012-2013- Vasantdada Sugar Institute , Majari BK, Tal. Haveli, Dist. Pune for BEAST Chief
Chemist
4) 2012-2013 - Awarded by First Prize for Best Sugar Factory in India By National Federation
Cooperative Sugar Factories Ltd. New Delhi
5) 2012-2013 -Vasantdada Sugar Institute Pune awards Best Sugar Factory in Maharashtra to the
Karkhana
6) National Level Society viz.: National Cooperative Union, New Delhi awarded Best Co-operative
Society in the India in its 16th National Level Meeting
7) Cane Development Award : National Federation of Cooperative Sugar Factories Ltd (NFCSF)-
2018-19

Besides that in terms of expansion,

The working result of the Karakhana is one of the best in the country for which factory has been
Awarded first prize by National Federation of Co-operative sugar factory ltd. New Delhi over the
period of consecutive 7 years for excellent technical performance. The factory has also be awarded
first prize and commendation certificate by Government of India Ministry of Food for the year 1987-
88 and 1988-89 for the same performance.

2.3 BRIEF HISTORY

SDSSSKL established 30 KLPD molasses based distillery unit in the year 1983, as molasses is the by-
product from the sugar industry, there was an increase in availability of molasses due to the subsequent
capacity expansions of the sugar unit. In order to meet the demand, the capacity of the distillery unit was
expanded to 60 KLPD in the year 2002.
SDSSSKL has an existing sugar complex with 9000 TCD sugarcane crushing capacity and 60 KLPD
distilleries. In this region sugarcane availability is very high; therefore industry wants to further expand the
capacities of its various units as follows

Table 2 Expansion in capacities for a various unit of industry

Sr. No Description Existing

Capacity
1 Sugarcane crushing (TCD) 9000
2 Ethanol/RS/ENA (KLPD) 60
Cogeneration Power Plant
3 0
(MW)

SDSSSKL has organized a separate cane development cell to impart advanced knowledge of cane
development activities. Industry makes efforts to get the sugarcane properly harvested, cleaned and
immediately transported to the factory, in order to maintain the recovery and overall profitability.

Krishna/Panchganga River is the main source of fresh water. The industry has the water lifting
permission from Govt. of Maharashtra. The total fresh water requirement of the sugar complex after
expansion shall be 660m3/day. Due to excess condensate available from Sugar unit, there is no
requirement of water for sugar unit. In fact, an excess amount of 1425 m3/day is saved and is being
utilized for Distillery and other usages. The freshwater requirements for each operation are given in the
following Table.

The industry has its own land of 85.46 hectares out of which 29.64 Ha of land is reserved for Greenbelt
development, 4.61 ha is under built-up area of sugar and distillery units, 12.98 Ha. of land is under parking
and internal Roads, 13 Ha. of land is under ETP facilities of sugar and distillery units, 10 Ha. of land is
vacant. About 2 ha of land shall be required/utilized for the proposed expansion. No displacement of
habitation or acquisition of private land is required.

There are no sensitive, historic places, critically polluted areas, CRZs and wildlife sanctuaries, Heritages
etc. within a 10 km radius of the factory site. The latitude and longitude are 16045‟4.04”N &
74035‟19.38”E respectively. The Elevation above the Mean Sea Level is 542 m.

The power requirement of the existing sugar complex is 11.2 MW which is taken from Urjankur Shree
Datta Power Limited Company which is operating on BOOT principles. The additional 7.5 MW shall be
 required after the proposed expansion. Therefore, the total Power requirement of the sugar complex shall
be 18.7 MW, which shall be met through the Proposed 21MW Co-generation Power Plant based on
Bagasse and 5 MW from incineration boiler. The remaining power shall be sold to State Grids.

2.4 TYPE OF ORGANIZATION

Name of the Industry: Shree Datta S. S.S.K. Ltd.

Address: Dattanagar, Taluka- Shirol, District-Kolhapur, Maharashtra- 416120

Phone: 02322 - 236551

Fax: 02322 - 236600

This enterprise is a legal co-operative entity. The project proponents are known for their track records of
honest and transparent businesses. The company is well aware of energy crises and takes various steps for
conservations of energy. This industry is committed to prevent pollution, continually improve
environmental performance, comply with environmental legislation and regulations, health care etc.
reducing the spillages and fugitive pollution emissions, conserving energy and other resources with waste
minimizations. List of Board of Directors is detailed below

2.5 NATURE OF BUSINESS

SDSSSKL is an agro-based company focused on the manufacturing of sugar and allied by-products. The
proposed plant units will be established in the existing premises of SDSSSKL. 85.46 hectares of land is
available with the industry which is sufficient for the proposed expansion. Bagasse and Molasses to be
generated will be utilized in co-generation and distillery respectively.

2.6 LIST OF PROMOTERS AND DIRECTORS

Table 5 List of Board of Directors

Sr. Nam Designation

No. e
1 Hon.Shri. Ganapatrao Appasaheb Patil Chairman
2 Hon.Shri. Shrenik Jaygonda Patil Voice Chairman
3 Hon.Shri. Sidgauda Gurusidgauda Patil Director
4 Hon.Smt. Vinaya Ramesh Ghorpade Director
5 Hon.Shri. Anilrao Dinakarrao Yadav Director
6 Hon. Shri Babaso Shankar Patil Director
7 Hon.Shri. Sharadchandra Vishvanath Pathak Director
8 Hon. Shri Arunkumar Shankar Desai Director
9 Hon. Shri Raghunath Devgaunda Patil Director
10 Hon. Shri Vishwanath Dhondi Mane Director
11 Hon. Shri Shekhar Kalgaunda Patil Director
12 Hon. Shri Basgaunda Malgaunda Patil Director
13 Hon. Shri Pramod Vasant Patil Director
14 Hon.Shri. Nijamso Gaous Patil Director
15 Hon.Shri. Amar Babaji Yadav Director
16 Director
Hon.Shri. Anjum Rehem Mestri

17 Hon.Shri. Dagadu Dattu Kamble Director

18 Hon.Sou. Yashoda Balaso Koli Director
19 Hon.Sou. Sangeeta Sanjay Patil Director
20 Hon.Shri. Indrajeet Pasgonda Patil Director
21 Director
Hon.Shri. Ranjeet Ashok Kadam

22 Hon. Shri. Mahendra Appanna Bage Director

23 Hon.Shri. Vijay Nivrutti Suryavanshi Director
24 Hon.Shri. Raosaheb Annaso Bhosale Director
25 Director
Hon.Shri. Mahadev Vitthal Patil
2.7 ORGANIZATIONAL STRUCTURE

CHAIRMAN

BOARD OF DIRECTORS

2.8 PRODUCTS SERVICES BRANCHES BUSINESS OPERATIONS FUNCTIONAL

CHART

Sr. Existing
Description
No Quantity
Sugarcane crushing capacity
1 9000
(TCD)
2 Sugar (MT/M) 2760
0
3 Refined Sugar (MT/M) 5000
4 Molasses (MT/M) 1080
0
5 Pressmud (MT/M) 1080
 0
6 Bagasse (MT/M) 7830
0
7 Industrial Alcohol (KL/M) 1800
8 Ethanol (KL/M) 900
9 Fusel Oil (KL/M) 2.4
10 Electric Power (MW) --

2.9 FINANCIAL POSITION

Shree Datta Shetkari Sahakari Sakhar Karkhana Limited, Shirol (Datta Sugar) to benefit from its
established presence in the high cane yield and high sugar recovery Kolhapur region of
Maharashtra. Its forward integrated operations and Government support to the sugar industry are
other comforts. The outlook may be revised to Positive if substantial growth in revenue and
profitability, and better working capital management, strengthens the financial risk profile. The
outlook may be revised to Negative if cash accrual is lower than expected, or if any major capital
expenditure, or stretch in the working capital cycle weakens liquidity.

Sugar revenues have dominated the revenue profile of the company (close to 90% of the total
revenues in FY2018) followed by distillery revenues (close to 10% of the total revenues in
FY2018). Sugar revenues have demonstrated a fluctuating trend in the past fiscals; the same
registered a growth in the past two fiscals, given the remunerative realisations. The operating
margins have remained constrained in the past fiscals because of high cane procurement costs.
Operating margins remained at 4.36% in FY2018 as compared to 7.12% in FY2017. High
interest and finance charges led to constrained net profit margins in the past, the same remained
at 0.52% in FY2018 as compared to 2.46% in FY2017.

In FY2018, Datta Sugar acquired the ~67% stake owned by IL&FS Renewable Energy Limited in Datta
Power for Rs.88.00 crore. In FY2018, the company reported a net profit of Rs. 2.97 crore on an operating
income of Rs. 566.25 crore, as compared to a net profit of Rs. 13.56 crore on an operating income of Rs.
551.36 crore in the previous year.
 FY2017 FY2018
Operating Income (Rs. crore) 551.36 566.25
PAT (Rs. crore) 13.56 2.97
OPBDIT/OI (%) 7.12% 4.36%
RoCE (%) 10.30% 5.35%

Total Debt/TNW (times) 2.47 2.47

Total Debt/OPBDIT (times) 6.53 10.73
Interest coverage (times) 2.53 1.93

2.10 FUTURE PLANS

The sugar industry is one of the major agro-based manufacturer industries. India being the
largest Sugarcane producer country after Brazil, it is inevitable and unavoidable for India to
grow as the largest sugar and allied products manufacturing country. The major shareholder of
this sector is the farmer, producer of raw material sugarcane and it is estimated that around 45
millions of people in India are sugarcane growers. Sugarcane Potential, agro-climatic
conditions and the cost of conversion and overheads etc. are the major deciding factors for
fixing the crushing capacity of a sugar plant. It has been established that wages and other
overhead costs per ton of sugar get reduced substantially with higher plant sizes.

As there is excess cane available in the command area, industry shall have to make
arrangement for the timely crushing of sugarcane of not only its shareholders but also entire
farmer‟s community in the command area. Incidentally, the economic viability would also
improve not only by producing sugar more but also to generate power which can be exported
to the state grid and additional money can be distributed to farmers as cane price.

Besides the direct benefit, the expansion would help to crush sugarcane in time so that the
high recovery due to timely crushing would further improve the economy of the farmers.
Apart from this, the establishment of such institutions brings employment and other
developmental opportunities for the entire region. In the case of SDSSSKL, the proposed
expansion in sugarcane crushing, distillery capacity and co-generation of power would greatly
increase the productivity and profitability of the industry. By the means of newly proposed co-
generation and expanded distillery capacity, bagasse and molasses to be generated (due to
additional crushing) will be utilized in co-generation and distillery expansion, respectively.
Production of alcohol from molasses based distilleries is not only helpful in abating pollution
by utilizing molasses but also helpful in partly fulfilling the need for petrol by blending
ethanol in petrol. The co-generation power plant produces power, which helps in reducing the
load on state electricity grids and fulfilling the necessity of electricity for society. Thus, the
proposed project would immensely benefit not only it shareholders but also to the people of
the entire region around SDSSSKL.

To implement the above program, the management of SDSSSKL has appointed consultants
with the objective of expansion & capacity optimization of sugar plant, with emphasis on
reduction in the cost of production through improvement in milling efficiency and reduction in
process steam/energy consumption.

2.10.1 Demand-Supply Gap

Sugarcane availability in the command area of SDSSSKL surpasses the existing crushing
capacity due to the availability of an adequate amount of water by the courtesy of River
Krishna, and Panchaganga. Also, Sugar, Alcohol, and Power are having high demand and
monetary value as well. Hence, the efforts to supplement to the demands of society are
necessary in order to achieve profitability.

2.10.2 Imports vs. Indigenous products

Major products to be manufactured in this sugar complex are Sugar, Alcohol, and Power
(After establishing Cogeneration power plant). Sugar and Alcohol from this industry are
qualitatively better and competitive against imported products. Hence, the benefit of foreign
exchange saving could be achieved.
2.10.3 Export possibility

Sugar is mostly sold in the local market. Depending on the international market conditions and
prices, sugar could be exported. Alcohol produced is mainly utilized in blending with petrol
(additives).

2.10.4 Domestic / Export markets

Domestic markets are found to be more suitable, by the observations made over the years.
Convenience and profitability are always preferred by the management of SDSSSKL

2.10.5 Employment Generation (Direct and Indirect) due to the project

After the proposed expansion project, direct employment of about 200 people will be
generated and indirect employment of around 500 people is possible. Also, around a 25 %
increase in indirect employment is expected due to the additional transportation required after
the proposed expansion.
CHAPTER III THEROTICAL FRAMEWORK

3.1 INTRO

Production and operation management concerns itself with the conversions of inputs into outputs
using physical resources, so as to provide desired utilities-of form place, possession or state or a
combination thereof- to the customers while meeting the other organizational objectives of
effectiveness and efficiency and adaptability. It distinguishes itself from the other functions as
personnel, marketing etc. by its primary concern for ‘conversion by using physical resources’. Of
course there may be and would be a number of situations in either marketing or personnel or
other functions which can be classified or sub classified under production and operation
management.

For e.g.
1. The physical distribution of items to the customers
2. The arrangement of collection of marketing information
3. The actual process and recruitment process
4. The paper flow and conversion of accounting information in an accounts office
5. The paper flow and conversion of data into information usable by the judge in a court
of law, etc. can all be put under the banner of production and operations management.

The ‘conversion’ here is subtle, unlike manufacturing which is obvious. While in case (i)
and (ii) it is the conversion of place and ‘profession’ characteristics of product, in (iv) and (v) it
is the conversion of the ‘state’ characteristics. And this ‘conversion’ is effected by using physical
resources. This is not to deny the use of other resources such as ‘information in production and
operation management. The input and /or output could also be non physical such as
‘information’ but the conversion process uses the physical resources in addition to other non
physical resources. The management of the use of physical resources for the conversion process
is what distinguishes the production and operations management from other functional
disciplines.
3.2 MEANING AND DEFINATIONS OF CONCEPT

Production is the foundation on which every organization is built. Production and marketing of
goods and services are the fundamental objectives of an organization. The organization can be a
manufacturing unit or a service organization in a manufacturing unit or a service organization in
a manufacturing organization. Production is the intentional act of producing something in an
organized manner. It is the fabrication of a physical object through the use of men material and
equipment. Similarly in a service organization, Production means discharge of some function
which has some utility e.g. repair of an automobile, legal advice to a client, banks, hotels,
transport companies etc. The irrespective of the nature or organization . Production is some act
of transformation i.e. Inputs arer processed and transformed into some output. The main inputs
are Information and Management and Material and land Labor and Capital.

Thus, the basis of production is the transformation of inputs into goods and services.

The main objectives of production process are:

The objective of the production management is ‘to produce goods services of right quality and
quantity at the right time and right manufacturing cost’.

1. Right Quality

The quality of product is established based upon the customer’s needs. The right quality is not
necessarily best quality. It is determined by the cost of the product and the technical
characteristics as suited to the specific requirements.

2. Right Quantity

The manufacturing organization should produce the products in right number. If they are
produced in excess of demand the capital will block up in the form of inventory and if the
quantity is produced in short of demand, leads to shortage of products.

3. Right Time
Timeliness of delivery is one of the important parameter to judge the effectiveness of production
department. So, the production department has to make the optimal utilization of input resources
to achieve its objective.

4. Right Manufacturing Cost

Manufacturing costs are established before the product is actually manufactured. Hence, all
attempts should be made to produce the products at pre-established cost, so as to reduce the
variation between actual and the standard (pre-established) cost.

Definition of Production Management:

It is observed that one cannot demarcate the beginning and end points of Production
management in an establishment. The reason is that it is interrelated with many other functional
areas of business viz marketing, finance, industrial relation polices etc. Alternatively Production
Management is not independent of marketing, financial and personnel management due to which
it is very difficult to formulate some single appropriate definitions try to explain the main
characteristics of Production Management:

1) In the word of Mr. E.L.Brech:

“Production Management is the process of effective planning and regulating the
operation of that section of an enterprise which is responsible for the actual
transformation of materials in to finished products”.
This definition limits the scope of production management to those activities of an
enterprise which are associated with the transformation process of inputs to output.
The definition does not include the human factors involved in a production process. It
lays stress on materialistic features only.
2) Production Management deals with the decision making related to production
process. So that the resulting goods and services are produced in accordance with the
quantitative specifications and demand schedule with minimum cost

The main activities of production management can be listed as:

 1) Specification and procurement of input resources namely management, material, and
land, labor, equipment and capital.
2) Product design and development to determine the production process of transforming
the input factors into output of goods and services.
3) Supervision and control of transform process for efficient production of goods and
services

What is Production Management?

Production and Marketing of its goods and services are the two main functions of every
enterprise. The basis of production is the transformation of inputs (Factors of Production) into
good and services. The five input factors are information, management, materials, manpower and
capital.

In manufacturing organization men, materials and equipments are employed to produce

goods whereas in service enterprise the production is the discharge of some functions of utility. It
ranges from act of repairing the automobiles to providing a client with legal advice.

Marketing includes the activities like market research, sales promotion and distribution of
the goods and services produced by enterprise.

The management of transformation process of inputs into output is the essence of

PRODUCTION MANAGEMENT. In present competitive world the production process in every
enterprise needs some effective and scientific planning as well as proper control.

Thus Production Management can be defined as “Management which by scientific

planning and regulation sets into motion the part of an enterprise to which it has been entrusted
to task of actual transformation of inputs and output.” In the words of Mr. E.L. Brech,
“Production Management becomes the process of effectively planning and regulation the
operations of that part of an enterprise which is responsible for the actual transformation of
materials into finished products.”

This definition appears to be incomplete as it does not include the human factors involved
in a production process. It lays stress only on the materialistic features.To achieve the two goals
of goods and services which are produced in accordance with the quantitative specifications and
demand scheduled with minimum cost. To attain these objectives the two main activities of
production management are the Design and Control of production systems

In production management effective planning and control are essential. In the absence of
effective planning and regulation of any production activity the goals canot be achieved, the
customers may not be satisfied and ultimately certain activities may be closed which may lead to
social evils.

Conclusively production management is responsible for the following tasks:

1) Specifying and accumulating the input resources. Inputs are Management, Labor,
Information, Land, Material and Capital.
2) Designing and installing the assembly or conversion process that will be employed to
transform input resources into output goods and services.
3) Co-coordinating and operating the production process so that the desired goods and
services are made efficiently.

3.3 FEATURES SIGNIFICANCE

Production management is most often associated with factory management rather than with the
broader definition given above and logically so, because the significant problems of production
first occurred in the factory. Before evolving of factory system, the large number of one man
shops that produced goods presented insignificant problem of production management. With the
factory system, however, the situation changed and the problem to organize, layout facilities,
control quality and meet schedules had to be tackled with. Thus the field of production
management began to develop. In early stage, steps concentrated to control labor costs, since at
that time the labor costs constituted most of the production cost. With the continuing
development of factory system, tren towards mechanization and automation developed. In the
factory, indirect labor costs increased tremendously in relation to direct labor costs. Thus, in the
factory has, had develop in the fields of designing and packing of products, indirect labor cost
control and quality control. Since nearly 30 years the business has rapidly developed in to large
scale units. Here, the facility design, location, layout, quality control and inventory control take
on new significance. Thus, to-day the production management has to cover a wide range of
different types of activities to be performed in the factories and industries.

In short the following major activities constitute the scope of production management:

a) Designing and Packing the products;

b) Production Administration- Production Engineering, Production Planning and
Production Control;
c) Execution; and
d) Dependent services and Departments.
Production management thus consist of the activities relating to designing and
packing of production, product engineering, production planning and production
control in coordination with human element involved in production activities on a
sound morale.

4.5 Production Function:

We see production in the form of goods and services in factories, offices, hospitals and
markets etc. In other words, production is process by which the goods and services are created in
any field of activity. The factory, hospitals and the office etc. have their special characteristics.
The production system has inputs like material, parts paper works forms etc. The inputs are
processed in some way by a series of operations whose sequence and number are specified for
each input. The operations may vary according to any desired characteristics. The output of the
system is completed parts, products, chemicals, service to customers etc. It takes time to vary
from zero to any finite value for the storage in the system. Inputs are transported between all
operations in the system.

System may occur in series. For e.g. when finished products are transported from the
factory to the selling centre, the factory system is left to arrive at second production system
called a warehouse. Systems may also occur in parallel e.g. when a number of factories produce
similar products to supply several market areas these factories may be considered on large
production systems.
 Webster defines as “A regularly interacting or independent group of items forming a a
unified whole” Thus systems are some sense unified, organized or coordinated. They may have
many components and objects: but they are united in some common approach. Some of the
system may compel and take the alteration in one variable within the system. Thus the change of
production rate in production systems will luckily to affect inventories, overtime hours, hours
worked week etc. To understand and predict the complex interactors between variables, we have
to study production system very carefully.

The nature of problem in production systems mainly require two types of decisions, one that
relates to the long-run and the other that relates to the short-run decisions. Long-run decision
relates to the decision of the production system and includes the activities like selection of
equipment and processes, production design of items processed: job design location of the
system and layout of the plant. On the other hand short run decision relates to design of operation
and control systems and includes the activities like inventory and production control, quality
control, labor control, cost control and maintenance and reliability of the system.

The success of any enterprise largely depends upon its planning. Without planning production
becomes random and results are meaningless. As there is an environment of uncertainty, rapid
change and cut-throat competition among different production organizations, production
planning becomes a highly important function. Messrs, Harold Koontz and Cyril O’ Donnel in
their book ‘Principles of Management ‘ have established that “Planning may be likened to
navigation. The navigator lays out a plan and sets a course towards an objective. But this job is
not completed by doing so. Instead he constantly reaches his position as he proceeds towards the
goal, modifying his plan as errors or unforeseen circumstances prove that his course is leading to
some point other than the goal sought”

Production planning also sets objectives for an enterprise. In accomplishing its objectives
it selects best of all alternatives considering the available resources of the plant. With condition
of normality and certainty, production planning may be applied mathematically for selecting
alternative course which will yield the desired and predetermined results at the minimum cost on
the basis of known facts. And, after selecting best alternatives, it is of course necessary to
prepare a plan so that the goal may be achieved.
 Under the abnormal conditions, production planning must proceed and then adjust to
meet out the risk of unforeseen circumstances.

Further the production planning also stabilizes the use of equipments, the working
hour and production planning personnel by leveling of the normal, cyclical and seasonal peaks
and valleys in production to the end so that equipment and men can be kept busy in all session
as far as possible.

Planning also provides the basis for control in an organization. In planning goals and
target are being expressed quantitatively. It fixes the starting and finishing times for each job to
control actions of different employees. After a course action along with classification of
industrial objectives and timing consideration being decided, the request standard for work
performance may be measured. As control is to see that events confirm to plans there can be no
real control without planning.

Planning thus is of utmost importance in production management. Without effective

planning no enterprise can avail, success to its maximum satisfaction. An effective planning
should possess the following traits:

1) It should have well defined objectives

2) It should not be complicated, Rather it should have the qualities of simplicity and
flexibility;
3) It should be based on accurate data and records;
4) It should not have any weak link;
5) It should avail the facility of high standard managerial skill in decision making; it should
predetermine ‘norms’ or ‘standard’ for measuring and comparing the actual results
obtained.

4.7 Decision making in Production Management:

The production strategy can be planned in a number of ways and the organization wants
to select the best course of action. The decision making process involves proper analysis of these
alternatives and then to select the most suitable alternative. Thus decision making is the art of
taking rational decisions using various scientific and analytical techniques. Here a rational
decision for any organization is on which the management can achieve its goals with minimum
efforts of time nad money. The management should be able to evaluate the risk associated with
each alternative and the one with minimum risk should be preferred. In the opinion of Hebert
Simon decision making and management appears to synonymous terms. Decision making
approach in production management mainly consists of following steps:

1) Comprehension: A single unified awareness is derived from sensory processes about

the phenomenon under consideration.
2) Conception: It is the scheme of designing or formulating ideas or concepts about the
phenomenon generated from comprehension.
3) Investigation: The ideas or concepts from conceptions provides many alternatives
and then to compare atheir merits and consequences of various schemes.
4) Deliberation: This implies the mental weighing and assessment of merits and
consequence of various schemes.
5) Selection: Investigation and Deliberation provides the guidelines to select the best
alternative for the given situation keeping in view the overall interest of the
organization.
6) Implementation: This is the final stage of decision making process. The information
about the alternative selected is communicated concerned people for using it to get
the desired solution.
In recent year the production manager is generally involved in making decisions
under unpredictable and uncertain situation. There are many considerations for
factors associated with the final choice and the decision maker must be fully
acquainted with these factors. The decision making process can be divide d in two
categories
1) based on judgement and intuition and
2) based on some quantitative methods. In Production Management in most of the
cases a combination of to approach is necessary.

There are three objectives or criteria of performance of the production and operations
management system are

a) Customer satisfaction
 b) Effectiveness
c) Efficiency

The case for ‘efficiency’ and ‘productivity’ utilization of resources are clear. Whether the
organization is in the private sector or in the public sector is a ‘manufacturing’ or a ‘service’
organization, or a ‘profit making’ or a ‘non profit organization, the productive or optimal
utilization of resource inputs is always a desired objective. However effectiveness has more
dimensions to it. It involves optimality in fulfillment of multiple objectives, with a possible
prioritization within the objectives. This is not difficult to imagine because modern production
and operations management has to serve the so-called target customers, the people working
within as also the region, country or society at large. In order to survive the production
management system has not only to be ‘profitable’ and ‘efficient’, but, must necessarily satisfy
many more ‘customers’. The effectiveness has to be again viewed in terms of the short and long
time horizon (depending upon the operation system’s need to remain active for short or long time
horizons)- because, what may seem now like an ‘effective’ solution may not be ‘all that effective
in the future’. In fact, the effectiveness of the operations system may depend not only upon a
multi objectives satisfaction but also on its flexibility or adaptability to change situations in the
future so that it continues to fulfill the desirable objectives set while maintaining optimum
efficiency.

3.4 ADVT AND DISADVANTAGES

The success of production management is linked with proper forecasting, production planning

and control. Scientific planning of production function will result in enhanced productivity.
Increase in productivity will benefit all parties connected with business.

1. Advantages to consumers:
A well planned production function will lead to good quality products, higher rate of production

and lower cost per unit. The consumers will be benefitted from prices of goods and will get good
quality products. The availability of goods will also be satisfactory and the consumers will be
saved from a lot of botheration which may otherwise be caused by scarcity of products.

2. Advantages to Investors:
An enhancement in productivity will increase profitability of the business. The investors will get

higher returns on investment if profitability is better. This will also result in appreciation of
assets values and ultimately the prices of shares will go up which will also benefit investors.

3. Advantages to employees:
Higher productivity will benefit employees in the form of better remuneration, stability in

employment, good working conditions, etc. Better productivity to a worker will give him job
satisfaction and improve his morale.

4. Advantages to suppliers:
Every enterprise depends upon supplies of raw materials, finished goods, spare parts etc. The

suppliers will always like to deal with a concern having sound financial position. The company

and its suppliers will have an enduring relationship only if both are satisfied with each other’s
dealings.

5. Advantages to the community:

The economic and social stability of a- community is linked with growth and development of its
industrial structure. An overall improvement in productivity will improve economic welfare of
the society.

6. Advantages to the nation:

The advantages of various segments of society improve welfare of a nation. Better production

management will result in proper and economical use of natural resources and elimination of
wastages. An improved industrial climate will bring all round development and prosperity.
Disadvantages:

1. Production scheduling can be complex.

2. The production scheduler has to learn product numbers, part numbers and specific information
to make it work.

3. Another potential problem with using production scheduling is the cost of implementation.

4.When you implement a production scheduling system you may need to buy software and other
resources to help facilitate the process.

5.You will also have to pay to have someone trained so the software can be used.

6. This may require you to devote an employee to this training, which costs money. Before
implementing production scheduling, you must consider whether the added cost is worth it.
Chapter IV Data Analysis and Interpretation

Presentation Analysis and Interpretation of Data

4.1 The Process of Making Sugar:

Yield:
The yield of white sugar from sugar cane depends mostly on the quality of the cane and
the efficiency of the extraction of juice. The table below gives some extreme values.

High quality cane Poor quality cane

Juice per 100kg of cane 50kg 40kg

% sugar in juice 22 17

Gur per 100kg of cane 10kg 7kg

High quality cane has a good juice content with high sugar levels (20%+). Poor quality
cane or cane that has been harvested early may have similar juice content but the sugar levels
will be reduced.

The efficiency with which juice can be extracted from the cane is limited by the technology used.
The simple three roller crushers used by most artisanal producers will never extract more than
50kg of juice from each 100kg of cane.

Yields are also improved by careful control of the boiling process. Boiling should be
completed as rapidly as possible and the conditions kept as clean as possible.
 Sugarcane is a perennial herb belonging to the grass family. Native to tropical and
subtropical regions of the world, this tropical grass is 10-24-feet tall. bears long, pointed leaves,
and has several stalks. The segmented stalks have a bud at each joint and as the plant matures,
small flowers appear.

STAGE 1. PLANTING

Sugarcane cuttings are planted in fields by workers or mechanical planters. In order for
the cane to grow, the seeds must be planted in well-drained soil. Typical cane soil is made of a
mixture of silt, sand, clay particles and organic matter. Canes are spaced at least 4-feet apart and
lined in rows and covered with soil. Fertilizers are applied from the time of planting up until the
beginning of the ripening period. Cane fields are also routinely weeded to provide for optimum
growth of the cane. Depending on the region where the crop is planted, cane seasons last from 8-
22 months. In the United States, sugarcane is grown in Florida, Hawaii, Louisiana and Texas.

STAGE 2. COLLECTING THE HARVEST

Mature canes are gathered by a combination of manual and mechanical methods. Canes
are cut at ground level, its leaves are removed and the top is trimmed off by cutting off the last
mature joint. Cane is then placed into large piles and picked up, tied, and transported to a sugar
factory.

STAGE 3. CLEANSING AND GRINDING

Stalks are thoroughly washed and cut when reaching the sugar mill. After the cleaning
process, a machine led by a series of rotating knives, shreds the cane into pieces. This is known
as "grinding." During grinding, hot water is sprayed on to the sugarcane to dissolve any
remaining hard sugar. The smaller pieces of cane are then spread out on a conveyer belt.

STAGE 4. JUICING

The shredded pieces of sugarcane travel on the conveyer belt through a series of heavy-
duty rollers, which extract juice from the pulp. The pulp that remains or "bagasse" is dried and
used as fuel. The raw juice moves on through the mill to be clarified.
STAGE 5. CLARIFYING

Carbon dioxide and the milk of a lime are added to the liquid sugar mixture and it is
heated to the boiling point, as the process of clarifying begins. As the carbon dioxide travels
through the liquid it forms calcium carbonate, which attracts non-sugar debris (fats, gums, and
wax) from the juice, and pulls them away from the sugar juice. The juice is then pushed through
a series of filters to remove any remaining impurities.

STAGE 6. EVAPORATION

The clear juice which results from the clarifying process is put under a vacuum, where
the juice boils at a low temperature and begins to evaporate. It is heated until it forms into a
thick, brown syrup.

STAGE 7. CRYSTALLIZATION

By evaporating what little water is left in the sugar syrup, crystallization takes place.
Inside a sterilized vacuum pan, pulverized sugar is fed into the pan as the liquid evaporates,
causing the formation of crystals. The remaining mixture is a thick mass of large crystals, which
is sent to a centrifuge to spin and dry the crystals. The dried product is raw sugar, still inedible.

STAGE 8. REFINERY

Raw sugar is transported to a Cane Sugar Refinery for the removal molasses, minerals
and other non-sugars, which still contaminate the sugar. This is known as the purification
process. Raw sugar is mixed with a solution of sugar and water to loosen the molasses from the
outside of the raw sugar crystals, producing a thick matter known as "magma." Large machines
then spin the magma, which separate the molasses from the crystals. Crystals are promptly
washed, dissolved and filtered to remove impurities. The golden syrup which is produced is then
sent through filters to remove the color and water. What's left is a concentrated, clear syrup,
which is again fed into a vacuum pan.
STAGE 9. SEPARATION AND PACKAGING

Once the final evaporation and drying process is done, screens separate the different sized
sugar crystals. Large and small crystals are packaged and shipped, labeled as white, refined,
sugar.

SUGAR FACTS

REFINED white sugar is 99.9-percent sucrose.

WHITE sugar is pure sucrose, containing no preservatives or additives.

PRODUCTION DEPARTMENT

Table No. 5.2 Steps in Production of Sugar

Sugar cane Juice Juice final product

Crushing
yield Treatment Particalaction white sugar
INTERPRETATION

The above table exhibits production steps of sugar like sugar cane yield, crushing, Juice
Treatment, Juice Particalaction, etc.

The table represents that Shree Datta Shetkari Sahakari Sakhar Karkhana Limited under study
follows all the above steps of sugar production.

Table No. 4.1 Provision for Production Control

Sr. Description Significant

No.

1 Availability of Info YES

2 Use of suitable Equipments YES

3 Availability of Monitoring devices YES

4 Implementing monitoring measurement process YES

5 Implementation of real case delivery YES

INTERPRETATION

The above table showing the various provisions of production control namely
Availability of information, Use of suitable Equipments, Availability of Monitoring devices,
Implementing monitoring measurement process, Implementation of real case delivery, etc. and
revealing that Shree Datta Shetkari Sahakari Sakhar Karkhana Limited under study follows all
the above provisions for production control.
Table No. 4.3 Effective use of resources

Sr. Description Significant

No.

1 Man Power YES

2 Machines YES

3 Material YES

INTERPRETATION

The above table is representing various types of resources which have been used by Shree Datta
Shetkari Sahkari Sakhar Karkhana LTD factories like Man power, Machines, Materials etc.

It is also showing that Shree Datta Shetkari Sahkari Sakhar Karkhana LTD uses all the
resources effectively i.e. making optimum use of the available resources.

So, it is found that Shree Datta Shetkari Sahkari Sakhar Karkhana LTD under study
making optimum use of available resources as it is sign of efficient and effective management.

Table No. 5.6 Role of various Departments in Production operations

Sr. Description Significant

No.

1 Purchase and sales Dept YES

2 Production Dept YES

3 Inventory Dept YES

4 Mechanical Dept YES

 5 Agricultural Dept YES

INTERPRETATION

The above table shows the various departments which has participated in production
operation of sugar, like purchase and sales Department, Production Department, inventory
Department, Mechanical Department, and Agricultural Department.

Representing that Shree Datta Shetkari Sahkari Sakhar Karkhana LTD considered that all
departments under factory participating/ responsible for the production operations.

So, it is found that all departments in Shree Datta Shetkari Sahkari Sakhar Karkhana LTD
are playing important role in production of sugar.

Table No. 5.7 Regular and Timely Supply of Raw Material

Production Significant
Planning

Scheduling of YES
Inputs

Maintenance YES

Staff Management YES

Healthy and Safety YES

INTERPRETATION

Above table exhibits the information of regular and timely supply of Raw Material by Production
Planning, Scheduling of inputs, Maintenance, Staff Management,

Shree Datta Shetkari Sahkari Sakhar Karkhana LTD consider that above procedure is responsible
for regular and timely supply of raw material. It means Shree Datta Shetkari Sahkari Sakhar
Karkhana LTD considers that Healthy and Safety factor also contributes for the same as after
harvesting cane should reach to the factory before 90 hours.

Table No. 5.9 Steps in Levels of Control

Sr. No. Description

1 Programming

2 Ordering Plan Level

3 Dispatching Plan
Level

INTERPRETATION

The table is showing the response of Shree Datta Shetkari Sahkari Sakhar Karkhana LTD
regarding steps in level of control like programming , order planning and dispatching levels of
control etc. representing that Shree Datta Shetkari Sahkari Sakhar Karkhana LTD uses all the
three levels of control i.e. programming , order planning and dispatching levels of control etc.

So, it is found that Shree Datta Shetkari Sahkari Sakhar Karkhana LTD under study uses
all the levels of control as it the production process smoothly.
Table No. 5.10 Production of white sugar

Year Sugar Prod. (Qtls. in Lacs)

2004-2005 10.18
2011-2012 15.21
2012-2013 15.11
2013-14 15.19
2014-15 15.18
2015-16 16.44
2016-17 11.56

Sugar Prod. (Qtls. in Lacs)

18
16 16.44
15.21 15.11 15.19 15.18
14
Qtls. in lacs

12 11.56
10 10.18
8
6
4 Sugar Prod. (Qtls. in
2 Lacs)
0

Year

INTERPRETATION

The above table exhibits the information regarding the like White Sugar Production in
previous years.

From the survey it is found that 2015-16 was the highest sugar production year for Shree
Datta Shetkari Sahkari Sakhar Karkhana LTD. However, it keeps fluctuating on different factors
which include cane sugar supply and demand.

The fluctuation in sugar production can be observed by trend in 2015-16 and 2016-17 years.
 Lastly it is concluded that Shree Datta Shetkari Sahkari Sakhar Karkhana LTD produces
only white sugar.

Table No 5.11 Production of distillery

Alcohol Prod.
Year (Lit in Lacs)
2004-2005 64.96
2011-2012 92.3
2012-2013 64.75
2013-14 128.1
2014-15 131.86
2015-16 103.66
2016-17 106.3

Alcohol Prod.
(Lit in Lacs)
140
120 128.1 131.86
Alcohol Prod.

103.66106.3
(Lit in Lacs)

100 92.3
80
60 64.96 64.75
40
20 Alcohol Prod.
0 (Lit in Lacs)

Year

INTERPRETATION

The above table exhibits the types of alcohol produced by the Shree Datta Shetkari
Sahkari Sakhar Karkhana LTD and response regarding the production of the same. The By-
products is Alcohol.
 Firstly, graph indicates the steady rise in alcohol production by Shree Datta Shetkari
Sahkari Sakhar Karkhana LTD.

Secondly, 2012-14 and 2014-15 observed highest production over the years.

However, it is found that, production or processing of sugar fluctuate the alcohol production as
well. They are directly correlated with each other.

Capacity utilization versus white sugar production

Capacity utilization for Sugar Prod. (Qtls.

Year white sugar in Lacs)
2004-2005 109.58 10.18
2011-2012 107.9 15.21
2012-2013 109.9 15.11
2013-14 109.91 15.19
2014-15 108.74 15.18
2015-16 113.19 16.44
2016-17 105.32 11.56
 Capacity Utilization for white sugar and alcohol
production (Percentages)
120 109.58 109.9 109.91 113.19
107.9 108.74 105.32
100
Capacity Utilization (%)

80 71.16 73.25
57.58 59.05
60 51.3
36.09 36 Sugar Production
40
Alcohol Production
20

years

INTERPRETATION

Above table exhibits capacity utilization of Shree Datta Shetkari Sahkari Sakhar Karkhana LTD.
for White sugar and alcohol production. The values indicated are in percentages.

Firstly, graph and table clearly indicates that, Shree Datta Shetkari Sahkari Sakhar Karkhana
LTD. uses or utilizes the full capacity of factory for white sugar production.

Secondly, alcohol or distillery unit uses around 40-50 percent of production capacity.

Thirdly, it clearly indicates sales trend of Shree Datta Shetkari Sahkari Sakhar Karkhana LTD. as
well.
 Year Recovery % of white sugar
2004-2005 12.19
2011-2012 12.37
2012-2013 12.63
2013-14 12.75
2014-15 12.55
2015-16 12.7
2016-17 12.63

Recovery in years
12.8 12.75
12.7
12.7 12.63 12.63
12.6 12.55
Recovery (%)

12.5 12.37
12.4
12.3 12.19
12.2
12.1 Recovery
12
11.9

Years

INTERPRETATION

Table no. indicates recovery percentage while manufacturing white sugar. The recovery
percentage indicates constant percentage. Higher sugar recovery favours the revenue of sugar
industries. In India, all sugar growing states have a sugar recovery ranging from 8.96% to
10.55%. This means recovery percentage of Shree Datta Shetkari Sahkari Sakhar Karkhana
LTD. is above average sugar factories.
 Year Recovery (Lit./MT of molasses)
2004-2005 260.8
2011-2012 269
2012-2013 268.1
2013-14 269.5
2014-15 270.4
2015-16 257.3
2016-17 265.4

Recovery (Lit./MT of molasses)

275
Recovery (Lit./Mt of molasses)

270.4
269 268.1 269.5
270
265.4
265
260.8
260 257.3
255 Recovery (Lit./MT of
molasses)
250

Years

INTERPRETATION

Above tables and graph indicate the recovery of alcohol in Lit./MT of molasses.
Firstly, the recovery of alcohol remains in range of 260-270 of Lit./MT of
molasses. However, the 2015-16 year indicates fall at 257.3 Lit./MT of molasses.
Secondly, Recovery is not constant over years.
Years TCD

1972- 1973 1250

1980- 1981 2000

1990-1991 5000

1998-1999 5000

1999-2000 6500

2000-2001 7000

2001-2002 7000
2017-18 9000

TCD
10000
9000
9000
TCD (Tonnes of cane per day)

8000
7000 7000
7000 6500
6000
5000 5000
5000
4000
TCD
3000
2000
2000 1250
1000
0
1972- 1980- 1990- 1998- 1999- 2000- 2001- 2017-18
1973 1981 1991 1999 2000 2001 2002
YEARS

INTERPRETATION

Firstly, the trend indicates steady rise in TCD.

Secondly, it clearly indicates that sugarcane for processing seen high incoming of
sugarcane.

Thirdly, it indicates that sugarcane supply in the Shree Datta Shetkari Sahkari Sakhar
Karkhana LTD.
Chapter V Conclusions and Suggestions

Observations

Production Department

1) After conducting survey it is found that Shree Datta Shetkari Sahakari Sakhar
Karkhana Ltd. under study using the standard method of producing sugar, as it is found
that all these steps are important for producing best quality sugar. So, Shree Datta
Shetkari Sahakari Sakhar Karkhana Ltd. under study uses all standard level of production
process.

2) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. under study
uses different provisions as it resulted in controlling production process by proper
availability of information using efficient machinery, Monitoring devices, process and
delivery cases etc.

3) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. are not
forecasting demand for sugar as what quantity produced by them is getting sold and rest
factories producing sugar by forecasting as they need to keep inventory and only limited
stock is distributed at interval.
4) It is found that all departments under factory are given more importance for bets
performance as each department giving their best like Production Department, Sales
Department, etc. So, each department is responsible for best performance.
5) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. not considered
the factor Healthy and safety is helpful for timely supply of Raw Material as they think
that no role of safety and healthy in timely supply of raw material. But it is found that one
factory found it important as without health and timely supply consideration they would
not purchase raw material as it may affect productivity adversely.
6) Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. using levels of control, as it is
found that every factory under study uses different levels of control as these levels of
control helps in proper programming, order planning and dispatching, which become
convenient for it.
7) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. producing
refined sugar, as it is processed sugar and gives white fair color to crystals.
8) Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. producing all types of By-
Products, like Bagasses , Molasses, distillery etc. to make effective and efficient use of
resources.
9) It is found that majority of Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd.
producing sugar in the range of 10-12 lakh qtl. p a as the production depends upon
availability of cane and also on management.
10) Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. using all factors for
producing sugar like raw material, manpower, equipments and machinery as these factors
has been considered most important for the process of sugar production and each and
every factor plays an important role in production of sugar.
11) It is found that crushing capacity varies according to change in knifes and blades
and also on availability of sugar cane. So, it is found that crushing capacity of Shree
Datta Shetkari Sahakari Sakhar Karkhana Ltd. .
12) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. uses new
technology as they want to increase production of sugar. So, they keep on changing their
techniques of production.
ENGINEERING DEPARTMENT

13) It is found that crushing capacity varies according to changed knifes and blades and
also on availability of sugar cane. So, it is found that crushing capacity of each sugar
factory under study is different.

14) Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. uses new technology as they
want to increase production of sugar. So, they keep changing their techniques of
production.

15) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. uses primary and
secondary methods of production which relates to processing of juice and handling of
material to dispatching stage respectively.

16) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. under study
found plans for output product as it helps in reducing cost of production, efficient and
effective use of resources and use of new technology.

17) By using new technology it is found that Shree Datta Shetkari Sahakari Sakhar
Karkhana Ltd. production has increased by making use of available resources in effective
manner.
18) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. using standard
steps of dispatching final product as it helps in dispatching final product as and where
demanded in time otherwise may collapse the plan.

19) It is found that Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd. are alert about
the factors used in case of emergency alternative production, managing strategy helps in
managing process, technical strategy helps in using technology to keep continuous
process and production strategy plans to maintain production in emergency.

20) It is found that Annual average crushing capacity of factories 50% in the range of
7000-9000 25% in the range of 3000-5000 and rest 12.5% factories crushing in the range
of 5000-7000 and 9000-10000.

21) Every factory plans for effective employees training and efficient management, as
every factory prefers to improve performance of employees so, that it increases quality of
work and production.

22) Factory use to plan for time and motion, is fluctuating, some factory use to plan for
half yearly to get report after 6 months interval and rest majority of factory plans yearly
as they considers that it becomes time consuming and increase workload.

MAINTAINANCE DEPARTMENT:

23) All factories use to arrange assets and liabilities systematically as they think it
becomes convenient for factory records.

24) All factories using both layout method production layout and process layout method,
as it helps in proper plantation of product as well as machinery.

25) Every factory uses Material handling equipments like man machine and
electromagnetic equipments which helps in transporting Raw material, Finished goods
from one place to another for this transportation they use Trolley, Drum Trucks, manual
lifting, pumping equipments etc.
26) Out of 8 factories 87.5% factories using Manual handling equipments for sugar and
50% sugar factory using it for handling by-product, as sugar is the finished product need
to handle properly and also used Trolley for transportation but By-product is transported
by manual way.

27) Each factory under study have their separate maintenance department, as it helps in
maintaining records of all departments like Production, Sales, Warehouses etc.

28) Out of 8 factories 87.5% factories use both major and minor method and 12.5%
factory uses major maintenance method, as major maintenance method helps in solving
major problems of machinery by using Roll Mills, Screw Expeller and minor helps in
repairing minor machine problems like oiling, greasing, repairs, welding etc.

29) Out of 8 factories 100% factories using Preventive maintenance method where as
62.5% factories using breakdown maintenance method, as factory use preventive
maintenance method because it is effective speedy and easy to use and breakdown
maintenance method is used by some of the factories as they think it is effective as well
as speedy and less expensive.

INVENTORY DEPARTMENT

30) It is found that majority of use to inspect machineries whether it is in process or not
as it gives clear idea after particular interval about repairmen of machinery.

31) All factories under study inspect the records of inventory of finished goods as it
becomes easier for them to check the stock and distribute as per demand.

32) It is found that 50% factories are keeping inventory of sugar to meet fluctuating
demand of sugar where as 50% don’t keep inventory of sugar to meet fluctuating demand
of sugar, as they are producing sugar on the availability of sugar cane.

33) It is found that all factories under study uses A B C Analysis process whereas The
methods of Analysis are “ABC” Analysis, ’A’ means high consumption of inventory. ‘B’
means moderate consumption of inventory and ‘C’ means low consumption of inventory
34) It is found that no one factory has hired outside warehouse as they all have their own
warehouses.

35) It is found that storage capacity of each factory warehouse is different. It is found that
storage capacity of Panch ganga factory is 8,64000 qtl.,Datta sugar factory 1 lakh qtl
above, Dudhganga Vedhganga factory’s above 1 lakh qtl. kumbi kasari sugar factory’s
around 65000 lkh qtl,Warana sugar factory’s around 147000 lakh qtl., Jawahar around
160000 lakh qtl., Shahu sugar factory around 60000 qtl of sugar, Bhogawati sugar
factory’ around 50000 qtl.

Other Findings (Descriptive Answers)

1) Only Warana Sugar factory uses “Semi Auto Handling Equipment ”

2) It is found that all 50% factories are keeping sufficient inventory to meet
fluctuating demand and 50% no, in which Panch Ganga keeps nearby 7.02 lakh
qtl. whereas Warana Sugar factory keeps approximately 5 lakh M.T., and Datta
Sugar factory 2 lakh M.T., Jawahar not keeping particular quantity and other
factories denied to answer particular quantity.

3) It is found that 62.5% factories considers that their inventory of sugar protects
them against fluctuation on output and rest 37.5% factories answered it is not
applicable.

4) Not responded on exact amount spend on material handling equipments

5) Use of Assets for Minor Maintenance –each factory uses machinery’s small
repairy like bolt, nuts, gear wheels etc. i.e. break down method.

6) It is found that each sugar factory under study uses major maintenance method for
all types of machinery in factory, as each factory responded that it is beneficial for
the factory for continues process

7) Preventive Maintenance Method used by majority of factories

In assets – Manpower, Analyzing monitory equipments
In Goods – Tools & Tackals, Spanner
Facilities – PPE(for safety), Welding M/C, cutting sets
8) Breakdown method used by all factories as they found it beneficial ..it is
considered as Routine maintenance
In Assets- Manpower, Analyzing monitory equipments
In Goods – Welding Rods, Oxygen Gas, LPG Gas
In Consumable goods- Gasket, Diesel, Cotton waste, Nuts and Bolts
Equipments- Spares

6.2 Suggestion:

1 It is found that every sugar factory under study should forecast the demand for
sugar, so that they can meet suddenly occurred demand for sugar.

2 It is suggested that every factory under study should make effective and efficient
use of available resources, so that it can reduce cost of production

3 It is useful and helpful for the factory to use the three levels of control for their
better maintenance.

4 It is suggested that every factory under study should increase their sugar
production by making efficient use of resources.

5 Every factory should plan their sugar production as per sales programme, if it is
fixed then factory can get a target to achieve it.

6 Every factory should adopt new technology for improving their performance.

7 It is suggested that factory should plan for desired output by reducing cost and
using available resources in effective manner

8 Every factory should keep alternative emergency production strategies, so that

they can meet suddenly occurred needs.

9 Factory should have to more concentrate on availability of raw material and

crushing capacity by using changing knifes, blades and by implementing new
technology.

10 It is suggested that every factory should spend some money and time on training
new employees; it will become better for their production.
 11 Every factory should consider time and motion study whole yearly rather that
half yearly; it will make the factory to know the problem quickly can take
immediate action.

12 It is suggested that factory should use machineries for handling material; it will
save them without making any kind of loss.

13 Factory should use all quality control techniques, as it will make know the
factory to make improvement in quality of sugar quickly.

14 It is suggested that every factory under study should use both the inspection
process by inspecting product at semi inspection stage, the factory can improve
production quality, if any defect arises otherwise it may affect adversely.

15 Every factory should use material handling equipments, as it is convenient for

handling material.

16 It is suggested that every sugar factory should use material handling equipment
for transforming sugar bags rather than by manual way. It will save time as well as
loss.

17 Every factory should use major and minor maintenance method.

18 It is suggested that every factory under study should have to keep enough
inventory to meet fluctuating demand.

19 Every factory should use selective inventory control techniques like EOQ,
Standard Method, Codification , Maximum, Minimum” which can help to control
inventory.

20 Every factory should keep yearly records of its Crushing, Production,

Distribution, Sales, Inventory, Income, Depreciation, softcopy as well as Hardcopy, it
will become easier for factory itself to know, what is their progress in performance
from the establishment of factory.

21 For increasing production every factory should try to acquire majority of villages
for increasing quantity of Raw Material.

22 It is suggested that all factories should be in search of new technology or method

of increasing productivity
 23 Those factories having lower crushing capacity should follow the techniques used
by factories whose crushing capacity is higher, so that they can also increase their
production.

24 It is suggested that the factories whose production is lower should try to achieve
more Raw Material and must try to improve crushing capacity by changing blades,
knifes.

CONCLUSIONS

Datta Sugar has an extensive operational track record of close to five decades. Commencing operations from
October 1970 as a standalone sugar entity, the company has also added a distillery unitover the years. Datta Sugar,
given its long presence at Shirol in the Kolhapur region of Maharashtra, has developed established relationships
with farmers from the nearby villages. The company had close to 32,700 cane supplying members in SY2018 1,
which has increased from 32,400 in SY2017.

Datta Sugar is located in Maharashtra’s Kolhapur district, which has a higher sugar recovery rate (>12%) compared
to the state average of 11%, given the conducive topography and favourable environmental conditions. Datta
Sugar recorded a sugar recovery rate of 12.55% in SY2018 as compared to 12.63% in SY2017.Its capacity
utilisations have historically remained close to 100%. The company crushed close to 1,187,021 MT of cane in
SY2018 over 915,066 MT in SY2017.

The company’s sugar operations are fully integrated with 60 Kilo Liters Per Day (KLPD) of distillery operations,
which provides some comfort vis-à-vis cyclical sugar operations. In FY2018, the company derived Rs. 533.18 crore
(90%) of revenues from sugar operations, while Rs. 51.61 crore (9%) was derived from its distillery operations.

In FY2018, Datta Sugar acquired the 33.33% stake held by IL&FS Renewable Energy Limited in IL&FS Trust Company
Limited, the holding company of Datta Power. Thus, its stake in Datta Power has now increased to ~67%. Datta
Sugar supplies bagasse to the power unit free of cost and avails of steam and power, free of cost, in the
operational period in a given sugar season. Healthy cash flows in the power company are also expected to provide
support to the sugar operations, going forward, in form of royalty as well as potential dividend income. A
significant amount in the form of accrued power purchase rate differential is to be received from Datta Power by
March 2019 providing additional liquidity support.
Sugar revenues have dominated the revenue profile of the company (close to 90% of the total revenues in FY2018)
followed by distillery revenues (close to 10% of the total revenues in FY2018). Sugar revenues have demonstrated
a fluctuating trend in the past fiscals; the same registered a growth in the past two fiscals, given the remunerative
realisations. The operating margins have remained constrained in the past fiscals because of high cane
procurement costs. Operating margins remained at 4.36% in FY2018 as compared to 7.12% in FY2017. High
interest and finance charges led to constrained net profit margins in the past, the same remained at 0.52% in
FY2018 as compared to 2.46% in FY2017.

SUGGESTIONS

References:
http://www.fnbnews.com/Sugar/maharashtra-tops-1819-nfcsf-efficiency-awards-with-10-wins-out-of-21-
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