Production Operations Management

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Acknowledgments
We are highly grateful to Almighty Allah who gave us the power to complete this report. I am also highly thankful to my honorable Teacher for his guidance.

Without the encouragement and help of our teachers , We perhaps would not have been able to write what we have written, it would be virtually an unending list of persons who helped us in one way or other but then i t would be great injustice on our part not to mention the names of those who provided us with the much sought after information-moral support and cooperation.

People belonging to various walks of life contributed in one way or other, but teachers who heads this illustrious which in real terms provided us with foundation on which Inshallah, We will build my career much to the pride of our institution and my respected teachers. .

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We dedicate our assignment to them.Dedication First of all we will thanks Almighty Allah who has given us wisdom to do this assignment. 3 . We may never forget my parents and teachers who supported us throughout our life span. Without them it would have been really impossible for us to complete our assignment.

4 . That gives the real taste of fruit pulp with its soft and chilled feel makes a fresh and soothing and nutritious feel. maNNect This is our product that is based on rich mango juice that extracted from real Mangos.maNNect A Pulp Shot«.

it is sold in a bottled packaging in 250ml VISION: To be the leading food and beverage Filipino company competing with the multinational MISSION: Our mission is to be the leading manufacturer and distributor of juices. sweet. promote professional growth and wellbeing of our employees. for us is the means by which we can effectively participate in the social and economic development of the communities we serve. maintain mutually profitable relationship with our trade partners and achieve growth level equal to or better than the norms of the food industry. This. For centuries Pakistani farmers have been developing newer strains of fruit by grafting one exotic variety with another. 5 . Nature¶s goodness is meticulously persevered by MANNECT. The processing is carried out by qualified food technologists in MANNECT ultra modern plants in Lahore. The ever-increasing demand for MANNECT juice testifies o the consistently high quality of MANNECT mango juice Our company provides only mango juice that is a pure pulp of mango . MANNECT is a processor of fresh mangos.HISTORY: Pakistan is blessed with a climate ideally suited to the farming of all kinds of fruit-rich in taste and flavor. dairy and related food products that best satisfy the growing needs of the customers. mellow and juicy.

Once it is purchased the following steps are followed.Process manufacturing results in goods. As our company is concern wit making only mango juice so t e main raw material is mango.MA UFACTU I G P CESS Process manufacturing is t e production of goods t at are t picall produced in bul quantities. Mang are g Peeled Separate the eed Crushed Mang Pulp is llected Stored in drums at ( 7) temperature 6 . And it is purchased in bulk .

organic matter. Filtering. Filling and packaging The finished product is transferred into bottles at extremely high flow rates. Because juices are generally cooled during the manufacturing process. such as suspended particles. into the water. The chlorinated water remains in the storage tank for about two hours until the reaction is complete. Impurities. Mixing the ingredients The dissolved sugar and other are pumped into the dosing station in a predetermined sequence according to their compatibility. ruit based syrups generally must be pasteurized. and de-chlorinating the water The clarified water is poured through a sand filter to remove fine particles of flock. The containers are immediately sealed with pressure-resistant closures. sterilizing. steel crowns with corrugated edges. or floc (ferric sulphate or aluminum sulphate). and chlorination. making them larger and more easily trapped by filters. The water is pumped into a storage tank and is dosed with a small amount of free chlorine. containers are packed into cartons or trays which are then shipped in larger pallets or crates to distributors 7 . The water and syrup are carefully combined by sophisticated machines. They are generally removed through the traditional process of a series of coagulation. This is usually achieved by spraying the containers with warm water and drying them. The floc absorbs suspended particles. or pull tabs. and bacteria. may degrade taste and color. called proportioners. they must be brought to room temperature before labeling to prevent condensation from ruining the labels. The ingredients are conveyed into batch tanks where they are carefully mi ed. which regulate the flow rates and ratios of the liquids. inally. Sterilization is necessary to destroy bacteria and organic compounds that might spoil the water's taste or color. Coagulation involves mi ing a gelatinous precipitate. alkalinity must be adjusted with an addition of lime to reach the desired pH level. During the clarification process. Clarifying the water µThe quality of water is crucial to the success of a drink. filtration.The mango pulp then becomes ready to be mixed with the other ingredients. twists off.

The errors can be costly in this process. scheduling. and Faisalabad SR. and facility layout. Our future plans are to increase our product range and consume all fruits in juices We use NAIVE METHOD to forecast production for the next year and the production increases as we add a few percentage of the target that is set accordingly 8 . Forecasts are vital to every business organi ation and for every significant management decision. as well as for continual decisions about inventory. We are targeting the main cities of Pakistan that is Karachi. while underestimating will cause late orders. capacity planning.FORE ASTIN Production and operations personnel use forecasts to make decisions involving process selection. Overshooting in the forecasts will result in inventory costs.NO 1 2 3 4 KARACHI ISLAMABAD LAHORE FAISLABAD CITIES POPULATION APPROX.5 Million 2.which makes 3. Lahore. 12 Million 1. extra labor costs. and production planning.3 Million 6.3 Million TOTAL POPULATION IN THESE AREA 15% of the total population of these areas has an intake of the mango juice . and missed sales opportunities.5 Million 22. Islamabad.345 million The percentage is low because fi y drinks and many other drinks are also available and are liked by the consumers.

000 2.000 2.000 20.000 BUDGETED(2011) 682.Sales for the forecasting month =Last year¶s month sale+ (Target: increase by 5%) Year 2010 2011 Sales 19.450.000 1.400.995.000 630.000 2.000 600.890.500 1.680.600.000 2.000 840.450.000 1.000 2.800.500   9 .000 800.200.900.200.310.000 2.000 1.500.500 (forecasted) MONTH JANUARY FEBURARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL ACTUAL (2010) 650.000 2.422.625.000 1.000 19.422.260.000 1.000 1. 30.000 1.000 1.000 1.260.200.600.000 20.000 2.520.

G APH of 10 .

1 0.75 Profit margin Distributor margin Retailer margin Sales tax CONSUMER PRICE 2.8 0.1 Raw material 3.6 2.04 12 Each bottl i of Rs.5 repair.12 i cl i ¦£ ¥¤ £ ¢ ¡ all the expense etc as shown above. utilities. salaries. 11 .81 0. rent etc} Manufacturing cost 5. 1.75 FOH{depreciation.2 1.5 Crown cork 0. indirect.3 0.8 0.PRODUCT COSTIN Mango pulp Sugar Citric acid Water Color 1.

whether that is a machine. etc Our company makes a shift of 8 hours and produces 16000 bottles per hour. Duration No.CAPACITY: Capacity is often defined as the capability of an object.000 Each year 36864000 12 . work center or operator. which can be an hour. of bottles Per second 4 Per min 266 Per hour 16000 Each day 1. to produce output for a specific time period. a day.28000 Each week 768000 Each month 3072.

The quality are checked on the following stages 1. water¶s quality is measured as well and it is well treated when needed. our products have been awarded with ISO certification. Lines 4.QUALITY CONTROL Quality Assurance The product of maNNect is manufactured under the most hygienic conditions. Receiving 3. Great care is exercised in the selection & quality control of raw materials. packaged Juice is thoroughly checked by quality experts using the most modern equipment. packaging materials. According to quality management system. 13 . They conduct strict quality checks on the following quality parameters such as: y y y y Edible quality Hygiene Nutritive value Shelf life. And in managing the inventory of the raw materials our company makes it sure that FIFO method is used ant the storage place must be medicated so that the raw materials be safe for a long period of time. Owing to all these reasons. Our drink is made available in Bottles which retains the freshness of the drink for a long time. Every batch of drink. Bottles (finished goods) Quality assurance in raw materials: Raw materials have high standards as well like mango which is our main raw material is taken of a specific breed and similarly sugar is taken of the best quality. our Quality Controllers conduct various quality tests at each and every production stage. which assists us in maintaining a standard quality in our product. The special technology used in the packaging keeps the drink fresh for a longer period of time. Our company takes high measures to maintain the standards o the product by updating its f quality. Incomings of raw materials 2. Thus we are engaged in providing the new generation consumers with healthy and delicious drink to refresh. Rigid quality standards are ensured at every stage of the manufacturing process.

Quality control on the raw material that is received by procurement department 2. The finished good is stored in the shaded area where there is no exposure of sunlight this is because its tastes changes once when is exposed to sunlight. Similarly when it is distributed through vehicles they are cover to be safe from sun . Quality assurance of finished product: Firstly the packaging is monitored the product with defected packaging is left behind. 3. The finished good is kept dust free e and hygiene is taken as a very important point from the raw materials to the finished goods. The best part of our company is that we check the product after every 15 minutes from the product line . that drops those bottles which are not up to the standards like the bottles are dirty or are cracked etc Then once when the syrup is filled in the tank the quality is measured so see the taste and to check that the ingredients are mi ed in proper proportion. The next check is performed on the job like where the material is inserted. As the bottle is washed as it is reused the quality of bottle is checked visually.and our retailer ect are educated to avoid direct sunlight. Summari ing about quality management we use Total product management TPM method total product management in which the major checks are performed as well as in depth of: 1. the sweetness is check that so that it does not exceed the sweetness level.Bri that means sweetness.Quality assurance during processing: In the product line there are many inspection points that maintain the quality. The output of the finished goods 14 .

its been peeled then the seed is been separated from the mango then finally its been crushed . Main raw materials for mango juice Sugar Mango Pulp Color Water Citric acid Sugar One of the main ingredients is sugar which adds sweetness and body to the juice. Some times our company buys the pulp from ³Citro Park´ and if we think tha we have got t access amount of pulp so we sell it back to Citro Park. 15 . enhancing the "mouth-feel." an important component for consumer enjoyment of drink.INVENTORY MANAGEMENT Inventory management is all about managing the raw materials in such a way that during the production process company does not face any kind of problems like lack of raw materials available due to which the production process can halt.the pulp is been stored in drums. Our company buys sugar from these places mentioned below SHAHTAJ Sugar mills SKEIKHU Sugar mills  Mango Pulp: Mangoes are used to extract the pulp for the juice under totally hygienic conditions. Pulp is been extracted manually. liquid or powder. Our company adds a yellow color to the juice. Our company buys mangos from ShahNawaz farms which is in Multan Open market. this color is been purchased from TA OTEX and is been stored in tins under normal conditions. which is added to food or drink to change its color.  Color Coloring is any substance.

An impurity in water degrades the taste and color. Water Water is been extracted underground. taste to the juice. the quality of water is crucial to the success of a juice. WAREHUOSE: All the stocks of raw materials are store in our manufacturing plant where as the finished good are stored separately in near our plant across the road in RAIWAND ROAD 16 . Whenever water is been needed it¶s simply been extracted  Citric acid It is a natural preservative and is also used to add an acidic. To remove the impurities water passes through the process of filteri ation in order to purify the water. We purchase Critic acid from Tafotex which is in Fero pur Road The stock of raw material has lead time of ten days. And the method of inventory used by our company is FIFO. or sour.

and finished goods from point of origin to point of consumption ( upply s chain).SUPPLYCHAI MA AGEME T I MA (PAKISTA ) ECT Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. Supply chain management spans all movement and storage ofraw materials. Our company maximizing added value and reduces total cost across the entire process through focusing on speed and certainty of response to the market 17 . workin-process inventory.

SUPPLYCHAIN MANAGEMENT IN MANNECT (PAKISTAN) SUPPLY HAIN MANAGEMENT PRODUCTION PLANNING DEPARTMENT PRODUCTION DEPARTMENT PROCUREMENT DEPARTMENT QUALITY CONTROL DEPARTMENT TECHNICAL DEPARTMENT WAREHOUSING LOGISTICS 18 .

We have almost 450 vehicles to supply the bottles. These departments coordinated with each other and purchase things according to the plan keeping in mind the amount of production to be made. In this type of selling company have more profit margin. Logistics is the systemic management of the flow of the goods. information and other resources in a repair cycle between the point of origin and the point of consumption in order to meet the requirements of customers. Quality is described in detail in this assignment. DISTRIBUTION CHANNELS Our Company makes two types of selling  Direct selling  Indirect selling Direct Selling In direct selling we supply our product in shops by using our own transports. Once the product has been fully manufactured to the finish goods its send to the warehouse where the stock is stored for the upcoming days according to the demand and sales. Because it is very difficult for us to cover all area of Pakistan by their own so they have so many whole sellers and agencies to assure their customers for availability of our product (mango juice).FLOW CHART¶S EXPLANANTION: The procurements are done by the affiliation with the production planning department and the production department. Thus the finished good are distributed by two methods as discussed below. 19 . Indirect Selling We have whole sellers and agencies to cover all area. More over any faulty thing that are observed is then send to the technical department which repairs it or send them back. The raw material and the product lines are checked by the quality department to ensure quality in every point of inspection.

More attention has been taken to marketing strategies. By viewing advertising as an investment. finance etc to ensure that the customer needs are satisfied while generating profits for the organi ation. free sampling etc 20 . the finance department can make investment decisions with the marketing department. sales force and sales agents.the measurement of marketing performance and evaluation of marketing plans. Marketing activities involve designing. The product life cycle is a concept used in developing strategies. newspaper. The finance department can assist with forecasting of cash flows and profit-and-loss. The finance department needs to encourage marketing to measure the productivity of ads placed.COORDINATION WITH MARKETING AND FINANCE Marketing department is one of the most important components of a business¶s survival in the market. Marketing and finance departments in a company are generally at odds with each other due to their opposing orientations. can greatly enhance value of the corporation. But their qualities. macro and all other general stores Promotion Billboards. sales targeting and negotiating discounts. sales. The main aims of the marketing department revolve around understanding the customers and their needs.12 Manufacturing plant in Raiwand road Distributed to macro. Finance can contribute to marketing in two main areas . Product Price Place Mango juice Rs. new product development. The marketing management needs a variety of profitability information on customers and products to make marketing decisions such as pricing. hyper star. Marketing department needs to work in close coordination with the other departments such a purchasing. advertisements. pricing a product according to the needs of the market and customers. when integrated. promoting. They can also evaluate realism used in marketing plans to help marketing determine its possibilities of success.

Our manufacturing plant is situated in Raiwind Road. and searching for locations with offerings that are compatible with these needs and objectives. Massive area. A location strategy is a plan for obtaining the optimal location for a company by identifying company needs and objectives. location often plays a significant role in a company's profit and overall success. over here we get raw materials easily without any difficulty. 21 . there are many other big companies working here and are highly success full Raw materials. Noise pollution and many other factors were the road block for our company. This location was quite feasible for us. we wanted a large plant to run our business and this area was ideal for us. the roads are properly constructed and we can access to other towns Water quality. thus we decided to have our plant in Raiwind Road. the main component of our product had a good quality of water which really matters Cheap labor. this is a village area and labor here are quite cheap which will lower our cost Easy access of labor. We had another option as well that was Band Road but this area was highly developed and was more than a residential area rather than an industrial one.LOCATION: Being in the right location is a key ingredient in a business's success. Transportation. Consequently. in villages mostly people are unemployed thus we can get labor easily Other manufacturing plants.

C CLUSI : The visit to the plant and meeting various managers was quite fruitful. 22 . We got to know that how production operational management is being used practically. Thousands of queries have swapped away after working on this project. And now we areable to think of our own production unit.