Feasibility Study on Implementation of Lean Manufacturing in Sugar Industry: A Case Study

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1 Feasibility Study on Implementation of Lean Manufacturing in Sugar Industry: A Case Study Indukuri Manoj Varma, manojvarma66@gmail.com, Shubham Gupta, shubham_gup@yahoo.co.in, Utkarsh Chaudhary, utkarshchaudhary911@gmail.com Dr. Ravinder Kumar * ravinderkumar.ap@gmail.com Abstract: Lean manufacturing is an applied phenomenon of objective, scientific methods that cause work tasks in a procedure to be achieved with a minimum of non-value adding activities resulting in major reduction of Waiting time, Takt time and bottleneck. The mediocre time between the start of production of one unit and start of production of another unit is known as takt time. Machine remains idle for certain amount of time which is known as waiting time. Limited capacity of one process reduces the capacity of whole chain termed as bottleneck. Value stream mapping is the tool of lean manufacturing process in which the current state of the processes is explored while on the other hand future state can be designed too.in the present research work, a case study of sugar industry has been done successfully. Based on Takt time for various parts, the production flow in the factory process was optimized thus minimizing several non-value added activities/times such as bottleneck time, waiting time, material handling time, etc. value stream mapping is used here for both states of the processes, and is successfully designed accordingly. This case study can be found useful in developing a more standard approach to design production and processes in lean environment in the factory. Keywords: Lean Manufacturing, Value stream Mapping, Takt time. 1. INTODUCTION Lean Manufacturing now a days have not only been applied to manufacturing industries but also to service industries as lean manufacturing helps in arrangement for effective flow of goods, services and technology from trader to consumers.in a recent survey it was found that approximately 39% of manufacturing industries in India have implemented lean manufacturing or are in the process of implementing lean [1]. Concepts of lean manufacturing are not same for every industry, Industries have to apply appropriate concepts in a correct manner, otherwise the concepts could be disruptive. Lean production uses less of almost everything such as human effort, inventory timing, production hours required to produce new products etc[2]. Lean manufacturing helps to eliminate 7 types of wastes such as 1)overproduction 2)inventory 3)waiting 4)motion 5)transportation 6)rework and 7) overprocessing [3]. Industries that have applied the concepts of lean manufacturing have substantial cost and quality advantage over those who still practice traditional mass production. Sugar which is consumed on daily basis by everyone is produced by sugarcane which is available for around 4-5 months and so sugar mill operate during this period. For this reason, they have to utilise this time at its best and produce sufficient amount of sugar which they can consume for the whole year. So, it is important to implement lean manufacturing is sugar industries. So, int this paper our main aim is to study the feasibility of lean manufacturing in sugar industry using value stream mapping as a tool and plot the current state map and future state map of ABC pvt.limited sugar Mill. 2. LITERATURE REVIEW Lean manufacturing was introduced by Toyota production system in 1950s. It basically means to make more out of less. In this increasingly global market many US industries have tries to adopt the concept of lean manufacturing in order to remain competitive. Due to several limitations concepts of lean manufacturing have been frequently used in discrete manufacturing industries as compared to continuous/process sector [4]. In automotive and electronics industries supply chain management have made substantial impacts since 1970s. Many sugar industries have tried to improve their supply chain from field to mill but till date the number that have been successful have been limited [5]. In order to increase customer value through cost reduction or through provision of additional value enhanced services it is necessary for food industries to implement the concept of lean manufacturing. Pull production is the core concept of lean manufacturing. The goal of pull marketing is to get the customers to come to you, hence the term pull, where salespersons are struggling to pull customers in. Common sales tactics used for pull marketing include mass media promotions, word-of-mouth referrals and advertised sales promotions.there are various tools used in lean manufacturing such as pace maker process, kanban, just in time(jit), cellular manufacturing, Value stream mapping, Kaizen, Total preventive maintainance etc. But the possibilities of cost reduction and stimulating companies to

2 work on further development projects are supported by value stream mapping[6]. Value stream mapping tool helps to see and recognize the course of material and information as a product or service makes its way through the value stream. A value stream map takes into account not only the product, but the management and information system that supports the basic process. Improved productivity leads to leaner operations, which in turn helps to expose further waste and quality problems in the system. Value stream mapping uses the predefined set of standardised icons. The first step in the process of creating a value stream map is identification of product or product family where improvements have to be made. Then there is the need to study the current process and understand the current process. Then begin to observe process. It starts with the end of process, with the last process closer to the customer. Then begin to plot the current state map from beginning to end. Then implement the concepts of lean manufacturing and create a future state map. it differs from the process mapping of Six Sigma in four ways: 1) It gathers and ceremonies a far broader range of information than a typical process map. 2) It tends to be at a higher level (5-10 boxes) than many process maps. 3) It tends to be used at a larger level, i.e. from delivery of raw material to delivery of finished goods. 4) It tends to be used to identify where to focus future projects, subprojects, and/or kaizen events. 3. FEASIBILITY STUDY The mill is certified with ISO 22000: 2005 and this given by food safety management of India. ABC even have a collaboration with Tate and Lyle (UK) which brings out the best technology of the sugar and make the life sweeter. This even takes care of workers and officers who work in the mill. The workers are divided into two categories they are as follows Temporary workers Permanent workers ABC mill not only produces sugar but also deals in the selling of press mud which can be utilized as fertilizer. Also, distillation of C grade (B- heavy) sugar takes place which results in formation of Ethanol. Bagasse which is obtained in the mill is used as a feed for boilers in order to produce electricity which can be used within the mill and sometimes this electricity is also sold for domestic purposes. The left over bagasse is sold to paper industry or it generates the electricity and sells it to the state government depending on the greater income on which the industry gets. Press mud obtained is sold to the farmers at a reasonable cost so they use it in the fields as an organic matter which helps the crop as well. I. Basic Information of company 1 lakh quintal sugarcane is crushed per day i.e. 12 lakh kg Sugar per day. Whole process takes place in 32 hours. Standard of sugar is maintained by ISS (Indian standard sugar) (31) and ICUMSA (international commission for uniform methods of sugar analysis) (30). In 2016, lakh quintal sugarcane was crushed. But this year 140 lakh quintal is expected. This year the mill has created 140 purchasing centers. Main consumers Pepsi, Nestle, Dabur, godrej and coca cola We visited ABC sugar mill and studied the whole process. According to our study we have divided the whole process in 3 cycles. II. Incoming of raw material and payment to farmers At the outset, Government decides the reserved area. Reserved area is not the exact circle; it is basically the area divided by the government. All the sugarcane produced in the reserved area is supplied to the reserved area. This reserved area is decided each year by cane commissioner at both district and state level. They also monitor the amount of cane crushed per year by the reserved factory. Buying and managing of sugarcane is done in 2 major ways 1) Gate (Direct entry) Farmers residing in the neighboring areas generally 5 7 Kms from Sugar Mill can directly come and deal with factory. 2) Purchasing center temporary dealing centers (above 7 kms but strictly in their reserved areas.) Currently, ABC sugar mill have 140 purchasing centers operating in the reserved areas. There is a mediator between the mill and the farmer known as cane society. It is responsible for sale and payment to farmers. It is also responsible for details regarding the total land owned and amount of sugarcane sown by each and every farmer in the reserved area. They also have data of plant (first sown sugarcane every year) and ratoon (after the plant when farmers sown the sugarcane again) type of sugarcane Order of preference of purchase of sugar cane - 1) Early Ratoon 2) Middle ratoon 3) Early plant 4) Middle plant These types of sugarcane are bought with a certain price that is decided by the central government, this year the price was decided at INR325 per quintal. Extra compensation is given if necessary to the farmers directly whether by the state government or by the central govt. Allocated area is the sum of reserve area and additional area given to the factory or mill. System of Procurement it is the act of obtaining the materials from the farmers and cane society, it is generally seen and observed that around 15% of the sugarcane obtained is used again for sowing while 15-20% is termed as extra usage (home usage, selling for jiggery and other products) rest 65-70% is available for crushing for sugar industry. Coding is given as per the total sugarcane is available and accordingly the mode of transport the farmers have, the bonding policy is decided by the state government accordingly. Before start of crushing season or the working

3 of factory in full-fledged way, they send their requirements to the cane society which is called as INDENT. Around 10k ton of sugarcane is crushed per day which generates about 1200 ton of sugar per day. A token or slip is given to the farmers with 3 days prior notice to supply the amount of sugarcane to the factory, in case if he fails to do so on that particular day that slip is valid for 3 days after that date too. For sugar the maximum amount of Sulphur content is 70ppm but in ABC mill this content is kept as low as 22ppm only. Steps for Payment As per the rule declared by the state government the factory has to give the payment to farmers within a span of 14 days. The factory gives payment directly to cane society. No farmer is directly included in payment. III. production cycle (from sugarcane to sugar) The cycle starts with the cane receiving at cane yard. Before using the cane for further processes cane weighment takes place. Weight of vehicle with cane and without cane is taken after which weight of cane is calculated. After that the sugarcane is unloaded from the vehicle and placed on a conveyer belt. After unloading the cane from vehicle and placing on conveyer belt next step is cane preparation. This process is the first mechanical process of direct contact of sugarcane with the machines, it consists of 4 processes and major machines. Chopper, leveler, cutter and shredder. Cane preparation takes place in around 9.53 minutes. These machines cut the sugarcane in fine parts so that for further processes the work becomes easier. After that these fine parts of sugar cane is passed through Magnetic separator. The next step is Cane milling. It is the process of taking out the juice from the sugarcane which is obtained after cane preparation methods. In this process juice is extracted in 5 steps, in 3 rd step of cane milling hot water is added and then squeezed so that maximum amount of sugar is extracted. In this process the remaining wastage is called baggase. This baggase is used as a feed for boilers which produces high pressure steam which is used in power turbines in order to generate electricity which is used by factory so that there is no need to purchase electricity by ABC mill at higher cost. Remaining baggase is sold to paper industries at a rate of 2.5Rs per Kg. Amount of baggase sold to paper industries and amount of baggase used to generate electricity is decided as per from which source the industry will generate maximum revenue. The Juice obtained after cane milling will then go through juice clarification. Initially there are 4 steps known as screening, weighing, holding and pumping respectively. After which the juice is heated at 70 degrees Celsius at constant mode without altering its temperature at any interval. Then, Juice sulphitation takes place in a juice sulphitor. Juice sulphitation is a process in which milk of lime and Sulphur is added to the juice alternatively. Sulphur is added in such a way that it does not cross the limitations of Sulphur which are set by the government. After this final juice heating takes place in a juice heater at degrees Celsius and ph maintained is 7. Through this we obtain clear juice which is send for clear juice screening which is the process of observation of juice and press mud which acts as manure in farms. The syrup obtained is then gone through sulphitation process (ph 4.8/4.9). The sulphite syrup is then stored in an inventory. Then comes the crystallization process in which the liquid or syrup is converted into crystals. Crystallization takes place in a PAN at degrees Celsius. The sugar then goes to pan for drying. Finally, it goes to crystallizer and crystals are formed. Grading according to crystal size i.e. Large, Medium and Small after which bagging of 3 types of sugar takes place and then it is stored in an Inventory for sale throughout the year. Molasses of sugar left at last is then stored in a separate area which is sold and goes to distillery producing alcohol (ethanol). As, a result there is no wastage of any product in ABC mill during production of sugar from sugar cane and the whole process takes place around 32 hours. Figure1 - Value Stream Map for the current state

4 IV. Marketing Marketing is done directly with other industries and as well as open markets. Special team of sales is present to sale the products and taking maximum amount of profits. They are also having knowledge of production of total sugar and the total requirements of the industries requiring sugar as them by product. There are 2 types of buyers- Institutional Buyer Trade (Wholesale). Institutional buyers are the big industries which uses sugar in bulk and produce their own goods and products. While trade market is the area of open market or wholesale areas. The major focus is to sell the sugar to institutional buyers rather than trade buyers. Sales Department directly approaches to institutional buyers whereas trade takes place in open market in which anyone can directly approach to company and buy sugar in wholesale. Some of the institutional buyers are nestle, Coca- Cola, Godrej, Dabur etc. In ABC sugar mill 2 types of sugars are sold Sulphated and refined in the packaging of 50 Kgs for institutional buyers and in the packaging of 1, 5, 10, and 25 Kgs for trade. In case of trade loose sugar is also sold as per demand by the consumer. The sugar is given accordingly to the institutional buyers and the requirements, accordingly the sugar type is produced in factory to fulfil the requirement of the buyers. In trade Payment In Case of institutional buyers mostly the payment is done hand to hand at the time of deal made by the sales department and the institution while in the case of trade payment may be done hand to hand and credit is also provided for 7-10 days. The total revenue and profits till 31 march 2016 were- #total revenue million INR #net profit million Sugar produced in was 2.37 lakh Metric ton Figure 2 - Value Stream map for future state 4. CONCLUSION According to working processes of ABC sugar Mill we have plotted the value stream mapping for current state and we have identified the following limitations 1) Cane Society distribute slips(parchis) to farmers 3 days before they have to supply sugarcane. 2) Amount of sugarcane supplied daily is not constant. 3) They currently use just 2 conveyer belts between cane unloading and cane preparation. 4) They instantly wholesale excess baggase to paper industries. 5) They use SO2 in sugar production process which is sometimes harmful for human health. After identifying the following limitations we have suggested some changes such as instead of distributing slips(parchis) they can send SMS to farmers informing them to deliver sugarcane, They can install CCTV camera to keep surveillance for direct gate entries for the day and estimate accordingly, they can have 3 conveyer belts instead of 2 for fast processing of sugarcane, to avoid fluctuation in daily supply we can set a safe house before cane preparation with a capacity of 50 quintal sugarcane, they can use a jet of hot water to remove excess dirt from sugarcane before cane preparation, They can have a safe house to where they can store baggase which could be used as a feed for boiler anytime, Sugar can also be manufactured without Sulphur known as refined sugar and they can have a supermarket which can store all 3 types of crystals i.e. large, medium and small discretely.

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