FACULTY OF MECHANICAL ENGINEERING

BACHELOR OF ENGINEERING (HONS.) MECHANICAL

INDUSTRIAL MANAGEMENT (MEM575)

GROUP ASSIGNMENT

COMPANY NAME: RACKLUHHH SDN. BHD.

GROUP: EMD6M5B

LECTURER: IZDIHAR BT. THARAZI

GROUP MEMBERS’:

1. AHMAD LUQMAN NURHAKIM BIN SHUKIMAN 2020982345

2. FAIZ RAIMI BIN JOHARRY 2020982389
3. ADLAN HAKIMI BIN ABDUL HAMID 2020982901
4. SITI AINUN IZZATI BINTI JAAFAR 2020982549
5. ADELIN KHAIRINA BINTI MOHD SALLEH 2020982537

SUBMISSION DATE: 11 FEBRUARY 2022

TABLE OF CONTENTS

Introduction 1

Organization chart 2

Objective 2

Forecast 3-6

Plant Location 7-8

Plant Layout 9-11

Production Planning & Control 12-13

Project Management 14-15

Quality Management & Control 16-17

References 18

Appendix 19
 1.0 INTRODUCTION

1.1 Introduction of the company

Rackluhhh Sdn. Bhd. Is a specialized company in

providing a good quality of material handling system for almost
seven (7) years since the company was established in 2015. Our
company is expertise in producing flow racks. Since that, we
(Rackluhhh Sdn. Bhd.) able to make over the handling
equipment suit as per our client requirements. Due to the high
demand of Antabox products, our company has been chosen to
produce a new flow rack for their warehouses. As per request, we will provide a proper rack
handling system that can handle the products efficiently and safely from packaging station
to delivering station. Firmness and endurance of the rack flow handling system is our
priority.

1.2 Introduction Of the Product

Our flow rack consists of three lines, each

line consists of two layers and each layer can fit up
to three boxes or pallets. One flow rack can load
the boxes up to eighteen (18). We are focusing on
the durability, optimization, and functionality of
the flow rack. Durability is for how long it can be
used and prevent it from minor and major
malfunction in a short period. We will ensure that
our flow rack can be long-lasting up to two
years. Optimization can be reached by good functionality of the flow rack which takes
several aspects which are load of the boxes, it’s bearing or roller, and the handling of the flow
rack. We ensure that the lifespan of the flow rack is in range of about two years to ensure the
client can optimize the usage of the flow rack without any issue. The aspect of functional
refers to the maximization of its usage and times taken for the rack can transfer the boxes
from one station to another. From all these aspects, the client can boost up the output with
optimizing the space and utilize warehouse space.

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 1.3 Organizational Chart

1.4 Objective

● Able to expand knowledge to solve complex operation and project management

problems.
● Demonstrate knowledge and understanding of engineering, management principles
and entrepreneurial skills.

2
 2.0 FORECAST

Forecasting needs to be implemented on our sales to estimate potential sales of flow

rack systems, as it is the most common principle inherent in the system. The medium-range
forecast is becoming more popular since it is effective at estimating sales, budgeting, and
production planning. Demand forecasting is an excellent choice for prediction of current
items based on the information received. We will employ both qualitative and quantitative
forecasting strategies for our flow rack handling system.

A computation was done using a 4-month moving average and 4-weight moving
average to find which forecast methods are most suitable and accurate with the actual. Those
forecasts will be chosen based on the lowest value of MAPE and MAD. Forecast will
estimate the actual demand between April to November 2022. The mean absolute deviation
(MAD), mean squared error (MSE), and mean absolute percentage error (MAPE) are
calculated once the data and calculations are acquired.

Figure 3: Different of Forecast

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 Absolute Percent.
Month Actual 4-MA Error Error²
Error Error (%)
Dec-21 800 - - - - -
Jan-22 925 - - - - -
Feb-22 825 - - - - -
Mar-22 810 - - - - -
Apr-22 875 840 35 35 1225 4
May-22 950 859 91 91 8327 10
Jun-22 1100 865 235 235 55225 21
Jul-22 1200 934 266 266 70889 22
Aug-22 1050 1031 19 19 352 2
Sep-22 950 1075 -125 125 15625 13
Oct-22 850 1075 -225 225 50625 26
Nov-22 1200 1013 188 188 35156 16

TOTAL 11535 7691 484 1184 237423 114

Table 1: 4-Month Moving Average Table and Error

Figure 4: 4-Month Moving Average Forecast Graph

4
 Absolute Percent.
Month Actual 4-WMA Error Error²
Error Error (%)
Dec-21 800 - - - - -
Jan-22 925 - - - - -
Feb-22 825 - - - - -
Mar-22 810 - - - - -
Apr-22 875 844 32 32 992 4
May-22 950 867 83 83 6889 9
Jun-22 1100 843 257 257 66049 23
Jul-22 1200 887 314 314 98282 26
Aug-22 1050 975 75 75 5625 7
Sep-22 950 1055 -105 105 11025 11
Oct-22 850 1105 -255 255 65025 30
Nov-22 1200 1070 130 130 16900 11

TOTAL 11535 7645 530 1250 270788 121

Table 1: 4-Month Weight Month Moving Average Table and Error

4-WEIGHT MOVING AVERAGE

1400
1200
1000
Demand

800
600
400
200
0

Period (Month)

Actual 4-WMA

Figure 5: 4-Month Weight Moving Average Forecast Graph

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 From the calculation we gathered, MAD for the forecast 4-MA is 148 while for the
forecast 4-WMA is 157 measure the average of error between actual demand and forecast
demand. As a result, forecast 4-MA consists of the lowest value of error per month. To make
it more confident to be chosen, MAPE is measured, and 4-MA is less than the 4-WMA
forecast which is 14.25%. Thus, 4-MA forecasts are chosen. It’s good to measure whether it
is good or ideal for the forecast either it is acceptable or not compared to another forecast.

6
 3.0 PLANT LOCATION

One of the most crucial elements to consider optimising the company's profitability is
strategic location. The ideal facility placement is a secure investment to reduce cost and
hazards, so location selections must be carefully considered. One of the most significant
factors affecting location decisions is cost, which includes things such as factory rent, labour,
raw materials, and transportation.

One form of economic assessment of site options is the location cost-volume

(breakeven) analysis. The measurement of fixed and variable costs for each location is among
the steps inside the procedure for completing this analysis. Further from that, graphing costs
for each location is vital. Selecting a place can be based on the lowest total cost for the
predicted production volume.

Fixed cost – Rent, utilities, insurance, taxes, salaries of supervisor

Variable cost – Raw materials, labour, packaging

SELLING RM280 LOCATION FIXED COST (RM) VARIABLE COST (RM) TOTAL COST (RM)
VOLUM
700 UNITS PERAK 18500 110 95500
E
MELAKA 20500 90 83500
SELANGOR 24500 75 77000

Total cost = Fixed cost + (Variable cost × Demand)

Perak:
Total cost = 18 500 + (110 x 700) = RM 95 500 / month

Melaka:
Total cost = 20 500 + (90 x 700) = RM 83 500 / month

Selangor:
Total cost = 24 500 + (75 + 700) = RM 77 000 / month

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Cross point – Perak - Melaka
18 500 + 110x = 20 500 + 90x
x = 100
Cross point – Melaka – Selangor)989
20 500 + 90x = 24 500 + 75x
X = 267

Figure 6: Graph of location analysis

As the figure 1 shown, the ideal location for flow rack units of less than 100 units is in
Perak, for units between 100 and 267 is in Melaka and Selangor is an ideal location for above
267 units. According to the latest forecast in April 2022 by using a 4-Months Moving
Average which is 1055 units, it is preferred that Selangor is an ideal location for Rackluhhh
company to build because of lowest total costing.

8
 4.0 PLANT LAYOUT

Plant layout is referring to how various facilities such as equipment, materials, and
labor are arranged. It requires an understanding of space needs for the facilities as well as
their ideal arrangement to ensure that the production cycle moves in a continuous and
consistent manner. The goal of the layout design was to come up with a way to make work
activities more effective and less time demanding. Therefore, the process-oriented layout has
been chosen by our company to ensure the efficiency of our production. The figure below
shows the arrangement of our plant layout.

Figure 7 : Process-Oriented Layout of Our Company

ASSEMBLY TIME
TASK TASK LABEL TASK FOLLOW
(MINUTES)

Measurement and set-up A 12 -

Cutting Process B 10 A

Drilling Process C 9 B

Welding Process D 15 B

Inspection 1 E 7 C, D

Painting F 5 E

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 Drying Time G 10 F

Assembly Line H 15 G

Inspection 2 I 7 H

Table 2 : Task Arrangement

Figure 8: Precedence Diagram of Flow Rack

In the manufacturing of flow racks, a total of 20 flow racks must be produced per day within
8 hours of working. It is expected that each day will take 480 minutes. The time taken to
complete all the task is 90 minutes.

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Workstations Cycle Time Eligible Assign Task Task Time Idle Time

1 24 A A 12

12 B B 10

2 2

2 24 C, D D 15

9 C C 9 -

3 24 E E 7

17 F F 5

12 G G 10

2 2

4 24 H H 15

9 I I 7

2 -

Total Idle Time 4 minutes

Table 3: Workstation Task Time

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 5.0 PRODUCTION PLANNING AND CONTROL

As a production manager, we found that the aggregate plan is the most appropriate
production planning for manufacturing of the flow-racks. Therefore, an aggregate plan of 8
months production has been made. Below is the forecast demand for the product over the
next 8 months starting from April to November 2021.

MONTH April May June July August September October November

FORECAST
600 900 1150 1450 1500 1700 2100 1800
DEMAND
Table 4: Forecast demand for 8 months

The company information:

 Workdays = 24 days per period

 Current workforce = 10
 Labour hours = 8 hours per day
 Over time per day = 4 hours
 Regular time labour = Rm 8/hour
 Number of workers per overtime =5
 Overtime labour = Rm 15/hour
 Inventory = Rm 5/unit
 Subcontract = Rm 15/unit
 Labour hours needed to produce one flow rack = 1.5 hours per unit
 Backlog and backorder are not allowed in this company

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Period 1 2 3 4 5 6 7 8 Total
Forecasted
Demand (D) 600 900 1150 1450 1500 1700 2100 1800 11200
Regular
output (o) 1280 1280 1280 1280 1280 1280 1280 1280 10240
overtime(640 Max ) 320 320 320 960
Subcontract
Hire/Layoff
(o) - (D) 680 380 130 -170 100 -100 -500 -520 0
Inventory
Begin 0 680 1060 1190 1020 1120 1020 520
End 680 1060 1190 1020 1120 1020 520 0
Average 340 870 1125 1105 1070 1070 770 260 6610
Backlog
Costs
Regular time
15360 15360 15360 15360 15360 15360 15360 15360 122880
(Rm 12/unit)
Overtime
0 0 0 0 7200 7200 7200 0 21600
(Rm 22.50 /unit)

Backorders
Subcontract

Hire

Layoff
Inventory
1700 4350 5625 5525 5350 5350 3850 1300 33050
(Rm 5/unit)
TOTAL 177530

Table 5: Total costs for 9 months forecast

Regular time production

Overtime production

Average inventory

Regular time

Rm 15360

Overtime

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 6.0 PROJECT MANAGEMENT

Task Activity Task Time (min) Immediate Predecessors

A Measurement and set-up 12 -
B Cutting Process 10 A
C Drilling Process 9 B
D Welding Process 15 B
E Inspection 1 7 C, D
F Painting 5 E
G Drying Time 10 F
H Assembly Line 15 G
I Inspection 2 7 H

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Critical Path and Project Duration

Activity ES EF LS LF Slack Critical Path

A 0 12 0 12 0 YES
B 12 22 12 22 0 YES
C 22 31 28 37 6 NO
D 22 37 22 37 0 YES
E 37 44 37 44 0 YES
F 44 49 44 49 0 YES
G 49 59 49 59 0 YES
H 59 74 59 74 0 YES
I 74 81 74 81 0 YES

Total task time = 90 minutes

Slack time = 6 minutes
Critical path = A-B-D-E-F-G-H-I
Total completion time = 81 minutes

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 7.0 QUALITY ASSURANCE IMPLEMENTATION METHOD

Quality assurance methods are the procedures implemented by organizations to ensure the
quality of output and services provided to customers are always maintained at top notch level.
It is solely practiced to improve the organization’s standard and take immediate actions to
any problems that occurred. One of the method under the 7 QCC tools is the fishbone
diagram method or known as ishikawa diagram. This method is for scanning and detecting
the root cause of the problem and the downside of the problem that may occur. This gives a
clearer picture to the organizations about every details that may get overlooked during
constructing process. As we can see from the fishbone diagram attached below, we can
easily identify the source of low quality rack flow and other manufacturing difficulties. This
method can be started with approaching the issue by listing out the problem statement, then
conceptualizing the major categories for the major branches, the branches can contain
methods used in the process, equipments used, manpower, materials, measurement details
and others.The branches are then being narrowed down with questions with all the root cause
for each problem.

Structure Part measurements Labor force

-Wrong length -Not enough

-Few joints can be
of metal cutting manpower
loose after some
time -Wrong joining -Not enough
material size skilled worker
Defects that
may occur in
-Welding process, slag product
-May have cavity
inclusions, cracks may and flakes
occur
-May rust easily
-Cutting process, cut parts
may be slanted and
crooked, not accurately Material selection
straight

Manufacturing process

Figure 9: Fish bone diagram

16
Another method is by doing the process flow diagram. This method is a visual
representation on how work is done. By constructing the diagram we can see clearly what is
the function for each workflow and ways to improve the workflow. It is important especially
during the early stages of starting the project so that the priority of work can be sorted out and
it will be easier to detect the complexity or unnecessary steps.

Figure 10: Process chart diagram

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REFERENCE

1. Jay Heizer., Barry Render., Chuck Munson., (2017). Principles of Operation

Management. Pearson Education Limited. 10th Edition.

2. Christoph Roser. (2019, February 26). Production Sequences: FCFS, EDD, and others |
AllAboutLean.com. Retrieved July 9, 2021, from AllAboutLean.com website:
https://www.allaboutlean.com/fcfs-edd-etc/

3. Lee, D. H., & Lee, C. J. (2017). The plant layout optimization considering the operating
conditions. Journal of Chemical Engineering of Japan, 50(7), 568-576.

4. Evans, J. R., & Lindsay, W. M. (2002). The management and control of quality.
Cincinnati, OH: South-western. (Vol. 5, pp. 115-128).

5. Huicong, H., & Wen-Feng, L. (2020). Design specification representation for intelligent
product appearance design. In E3S Web of Conferences (Vol. 179, p. 02004

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APPENDIX

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