Beruflich Dokumente
Kultur Dokumente
APRIL 2010
ACCEPTANCE SHEET
The practicum study, attached hereto entitled “INCREASING THE CAPACITY OF THE
NESTEA LEMON ICED TEA FILLING SECTION OF DDC FOOD DEVELOPMENT
CONTRACTING SERVICES, INC. AT SAN FERNANDO, PAMPANGA”, prepared and
submitted by JAQUELYN MARGARET LAWAS MICIANO in partial fulfillment of the
requirements for the degree of Bachelor in Industrial Engineering is hereby accepted.
___________________________
ENGR. ROMARK O. CAYUBE
Adviser and Chairman, Guidance Committee
______________
Date Signed
_______________________________ _____________________________
ENGR. DIANA MARIE R. DE SILVA ENGR. MIKEL ANGELO B. YAP
Member, Guidance Committee Member, Guidance Committee
______________ ______________
Date Signed Date Signed
__________________________________
DR. AURELIO A. DELOS REYES JR.
Chairman, Industrial Engineering Department
______________
Date Signed
______________________________
DR. ARSENIO N. RESURRECCION
Dean, College of Engineering and Agro-Industrial Technology
______________
Date Signed
ii
ABOUT THE AUTHOR
The author was born in San Fernando, Pampanga on the 19th day of November,
1988. She is the youngest among the four children of Mr. Emmanuel R. Miciano and
Mrs. Thelma L. Miciano. Her siblings are Maximillian, Kathleen, and Jose Paolo. Her
parents and brother are currently residing in San Fernando, Pampanga while her sister
Pampanga at the age of five where she was given a chance to be accelerated to primary
education. But then she continued her primary schooling at Morning Star Montessori
School Inc in Los Baños, Laguna and graduated with academic excellence. From her
hard efforts, she was given an opportunity to finish her secondary education at Philippine
Science High School Diliman where she embarked her journey towards achieving the
In the year 2005, the University of the Philippines Los Baños keenly accepted her
to attend under the Industrial Engineering program that was newly offered by the
academe. She became a volunteer in assisting freshmen to cope up with the college
Division. Also, a onetime honor roll student in the College of Engineering and Agro-
Industrial Technology.
iii
ACKNOWLEDGEMENT
This paper would not be possible without the Lord God’s words that served
as my STRENGTH, GUIDANCE and INSPIRATION. So I’d like to thank Him firstly
for filling me with compassion, pointing me my true directions and surrounding me
with wonderful people who accompanied me throughout my journey.
From the very beginning, my parents, Manny & Thelma, have greatly
extended their support financially, emotionally and spiritually to make my whole
practicum experience be substantial and unproblematic. Thank you for all the
endless prayers, powerful words of encouragement and especially the efforts of
critically understanding my study. I’m grateful for making my heart strong enough to
face the challenges before me.
To my adviser, Sir Omak, thank you for all your efforts in helping me
construct a substantial work, for giving me conditional chances to finish my paper
and also for endowing upon me the principles of independence.
To my panelists, Sir Mikel and Ma’am Dianne, thank you for the docile
approach in criticizing my paper. Your suggestions greatly contributed into leading
my study towards a more technical portrayal.
To other members of the IED Faculty, Sir Arvin, Ma’am Kat and Sir Marc, I’d
like to extend my gratitude for effortlessly be a factor of significant concepts through
your different outlooks that made the interpretation of the paper more profound.
To my dear friend Ara, you have greatly influenced me through your simple
yet insightful technical advises in taking my brainstorming moments into the next
level. I deeply appreciate all the efforts you have made in assisting me finish my
paper not only in the technical areas but also for helping me get through it
emotionally without holding back the tears.
iv
To Mafei, your conniving advices on dealing with the manuscript writings
were very entertaining and helpful in a way that it refreshes my thoughts once in a
while. For all the troubles you came across just to lend me hand, I value all your
efforts.
To Yani, May, Agbu and Pii, I’m very pleased to have friends like you who did
not hold back in helping out especially at the last minute. Your support no matter
how small or great it may seem is highly regarded.
To Seph, Ronald, Marvin, Cale and Co., for suddenly reaching out and
sending your concerns through your means, thank you. I greatly appreciate all the
energy you gave out in backing me up and for lifting my spirits up in the end.
To Rie, Wewikinns, Cagayat, Daryll, Teves and others that I may have failed
to mention, I’m thankful for letting me feel your deep concerns notwithstanding the
constraints of time and distance.
To Roy, I’m thankful for willingly extending a hand in any possible way even
with your hectic schedule and tons of responsibility. You have saved me for lending
me one of the most important things that made this paper possible, Thank you!
To my ever faithful friend, Marco, I do not know where to begin thanking you
for all your devoted efforts in alleviating my endeavors in putting together this
manuscript. For all the long nights of gravelling with crucial theories (which were
later dismissed), for all the sensible instructions and advices, for imparting the
biggest of efforts throughout my manuscript writing with your prudent perspectives,
and for simply always being there for me whenever I’m in need, you are my rescuer
amidst the burdens and hardship I’ve stumbled upon. For that, my heart is filled with
deep respect, compassion and gratitude to you.
Writing this manuscript made my college experience complete with all the
knowledge, emotions and energy put into one document. Herewith, I feel that I have
arrived at the finishing point of my college education. Without this, I would not be
able to recognize my potential of independently bringing up this whole document
that serves as a symbol of one of my greatest achievements. To God be the Glory!
v
EXECUTIVE SUMMARY
vi
TABLE OF CONTENTS
TITLE P AGE
TITLE PAGE i
ACCEPTANCE SHEET ii
ACKNOWLEDGEMENT iv
EXECUTIVE SUMMARY vi
LIST OF FIGURES ix
LIST OF TABLES xi
1.0 INTRODUCTION 1
2.0 METHODOLOGY 13
2.1 Procedures 16
vii
TITLE P AGE
6.0 RECOMMENDATIONS 75
REFERENCES xiv
APPENDICES xv
viii
LIST OF FIGURES
4-2 Total Overtime Hours in the Filling Section for June to Nov 2009 38
ix
FIGURE NO. TITLE P AGE
x
LIST OF TABLES
1-2 Process Capacities for the three major Production Lines in DDC-
FDCSI 7
2-1 List of Technical Terms used in the research and their Meanings 16
xi
T ABLE NO . TITLE P AGE
xii
LIST OF APPENDICES
xiii
1.0 INTRODUCTION
1.1 Overview of the Company
2
1.1.2 Products
The main products handled by DDC-FDCSI are classified into two family
groups: Dehydrated Culinary Products and Beverage Products. All the products
processed in their plant are powdered products. The list of the specific products
handled by the company is shown in Table 1-1.
Table 1-1 List of DDC-FDCSI Products and their corresponding Package Sizes
Number of pouches per case
PRODUCTS
x net weight per pouch
Dehydrated Culinary
Stocks and Gravies
Chicken Stock 8x1kg
Beef Stock 8x1kg
Pork Stock 8x1kg
Seafood Stock 8x1kg
Chicken Gravy 8x1kg
Basic Brown Sauce 8x1kg
Cream Soups
Cream of Chicken 8x1kg
Cream of Corn 8x1kg
Cream of Mushroom 8x1kg
Cream of Asparagus 8x1kg
Cream Soup Base 8x1kg
Beverage
Milo Vending Mix 8x1kg
Nestea Lemon Iced Tea 12x360g
*Source: DDC-FDCSI, 2009
3
Figure 1-1 Sample Finished Goods of Dehydrated Culinary Products
Individual sizes of products are indicated in Table 1-1 where large net
weights of the products are packed. This specification is primarily set by Nestle to
be distributed to their respective clients. Delivery of finished goods directly to the
clients of Nestle is not part of DDC-FDCSI services. Instead, finished goods are
primarily delivered straight to Nestle North Distribution Center in Bulacan.
4
1.1.3 Organizational Chart
5
1.2 Background and Significance of the Study
From the list of products being handled by the company in Table 1-1, DDC-
FDCSI provided three separate production lines for the three major groups of
products being processed in the plant. These major production lines are manifested
in the organizational chart in Figure 1-2 and they are identified as the Dehydrated
Production Line, Milo Vending Mix Production Line and the Nestea Lemon Iced Tea
Production Line. Volume contribution of each product group is presented in Figure 1-
3 where the Nestea Lemon Iced Tea has the largest percentage of share compared
to the Dehydrated Culinary products and Milo Vending Mix. Focusing on cost-
efficient recommendations for Nestea Lemon Iced Tea would significantly have an
effect on the benefits gained by the company.
6
Volume in kilogram Distribution of the Major
Product Families in DDC-FDSCI
20.27%
Dehydrated Culinary
Table 1-2 Process Capacities for the three major Production Lines in DDC-FDCSI
Dehydrated
Milo Vending Mix Nestea Lemon Iced Tea
Section Culinary
(batches/hour) (batches/hour)
(batches/hour)
Batch
1.25 1 1.125
Preparation
Dry Mixing 1 1.5 1.5
7
Based on the comparison of volume distribution, Nestea Lemon Iced Tea was
resolved as the product focus of the study. From the processes involved in Nestea
Lemon Iced Tea Production Line, the Filling Section has the lowest capacity of 0.625
batches per hour that determines the process capacity of the whole line. This further
narrows down the extent of the research to be mainly engaged in the NLIT Filling
Section. The low capacity of the Filling Section creates a predicament with the large
volume levels of Nestea Lemon Iced Tea handled by the company.
To further evaluate the demand levels and the process capacity of the NLIT
Production line, it would be necessary to calculate the implied utilization. In computing
for the implied utilization, the capacity requested by the demand is to be divided by the
available capacity of the production line. Capacity requested by demand is equivalent
to the total production output per month since DDC-FDCSI completes the monthly
demand received. The available process capacity was obtained from the rate of the
NLIT Filling Section and the actual production hours from June to November in the
year 2009. Table 1-3 shows the computed values of implied utilization. This
performance measure conveys how much demand exceeds the capacity of the
process where values exceeding 100% entails the deficiency in the capacity of the
production line. The recurrence of this scenario is apparent in the monthly production
of Nestea Lemon Iced Tea which verifies an imperative matter needed to be
addressed.
8
Figure 1-4 shows the NLIT Production Line has a low capacity with respect to
the level of output being handled. DDC-FDCSI copes with the high levels of demand
by increasing the capacity through allowing scheduled overtime for the resource
constraint process.
8000
7500
7000
6500
6000
June July Aug Sept Oct Nov
Actual Output 8377 7204 7514 7025 8104 8331
Actual Capacity 6944.44 6655.09 6944.44 6655.09 7233.80 6655.09
The actual number of overtime hours accumulated in meeting the high levels of
demand for the six-month data obtained is shown in Figure 1-5 below.
110.00
105.00
100.00
95.00
90.00
85.00
June July Aug Sept Oct Nov
Overtime hours 115.80 99.59 103.87 97.11 112.03 115.17
Figure 1-5 Number of Scheduled Overtime Hours in the NLIT Filling Section
9
The number of scheduled overtime hours shown in Figure 1-5 represents the
production hours of the Filling Crew which consists of seven workers. The standard
labor cost for contractual workers is 325.00 Php. Workers in the Production
Department are all contractual. Using the overtime rate of 130% primarily set by wage
policies of DDC-FDCSI incurs additional cost during scheduled overtime of seven
workers of the Filling Crew which is computed from the actual overtime hours. The
total additional overtime cost is equal to 475,832.18 Php for the period of June to
November 2009.
The length of the overtime hours is correlated with the increase of demand.
Overtime hours represent the amount of work required to accomplish demand above
the maximum capacity of the NLIT production line. The General Manager has
established average demand projections in the year 2010. The level of demand is
expected to increase up to 15,000 cases per month which is equivalent to 1.35
batches per hour.
10
1.3 Statement of the Problem
The capacity of Nestea Lemon Iced Tea Production Line cannot keep up with
the level of demand DDC-FDCSI is accepting. Having the lowest capacity, NLIT
Filling Section determines the production output rate. Relative to the 6-month
average capacity requested by demand, the process capacity is deficient by 16.59%.
As a result, it experienced a total of 4505 scheduled overtime hours of the Filling
Crew that incurred a total cost of 475,832.18 Php for the six-month period.
The general objective of the study is to increase the capacity of the Nestea
Lemon Iced Tea Production Line by at least 44 % (see Appendix A for
computations).
• illustrate the current flow of processes in the NLIT Production Line through
diagrams and flow process charts,
• identify the resource constraint that hinders the capacity of the system in
meeting the demand for NLIT Production through capacity profiles,
• determine the factors that caused the limitations of the lowest capacity,
• elevate the capacity of the resource constraint and generate alternatives,
• evaluate the associated costs and benefits of the alternative solutions, and
• Recommend the most cost-efficient alternative.
The study opted for one product that contributes the largest percentage of the
total production volume of DDC-FDCSI which is Nestea Lemon Iced Tea. The focus
of the study is on the Filling Section of the NLIT Production Line since it has the
lowest capacity in the series of processes involved.
11
1.6 Date and Place of the Study
The plant and business office of DDC Foods Development and Contracting
Services, Inc. is currently situated at Block 14 Lot 26 Lazatin Blvd., Villa Victoria,
Dolores, City of San Fernando, Pampanga, Philippines. Figure 1-6 shows the road
map that indicates the exact location of the plant from the Jose Abad Santos Avenue
to Lazatin Blvd. The study began on April 13 and ended on June, year 2009.
Figure 1-6 Exact Location of DDC Food Development and Contracting Services Inc.
Figure 1-7 Schedule of Activities Performed during the whole study period
12
2.0 METHODOLOGY
2.1 Procedures
The identification of the possible areas of study was conducted during the
orientation of the basic processes being performed in the company. After the
comprehensive discussion and briefings regarding the policies, practices,
documentations, tests and responsibilities, the production facilities were observed.
The production supervisor provided indications of the possible areas where DDC-
FDCSI encountered problems. One of the possible areas that hold a critical
predicament was the Filling Section of the Nestea Lemon Iced Tea Production Line
since it has a lower production rate compared to the Batch Preparation and Dry
Mixing Section. In examining the weekly production schedule and the daily schedule
monitoring of production personnel, the filling process crew constantly experienced
scheduled overtime shifts to increase the capacity and keep up with the amount of
workload accepted. From this scenario, the need of increasing the capacity of the
NLIT production line was manifested. Data were gathered during the days when the
Filling Section was operating.
The seven processes in the filling process were thoroughly observed in the
succeeding days of production. Time Study was conducted during the Actual
Observation and Preliminary Data Gathering task in the schedule of activities as
shown in Figure 1-7. Snapback method was used to record the pace of the individual
processes. Stopwatch data is available in Appendix C where the recorded time is in
seconds. Rating factors of each observed time based on the current conditions
during the time of observation of the researcher which is supported by the
Westinghouse Rating System in Appendix D. Normal time was computed from the
observed time and performance rating where its average was used to obtain the
standard time of the system. Allowance Factors were included in the computation in
order to make the data more realistic. No outliers from the raw data were found thus
all recorded readings were used as samples for computations. From the statistical
data, the required number of samples was computed. All the computations are
shown in Appendix C according to the sequence of the time study procedure.
14
Further continuing the computations would bring about the actual number of
workers required for the whole operation in order to meet the target production rate
which was primarily set to the next resource constraint which is the Batch
Preparation Section with a rate of 1.085 cases per minute. Increasing the capacity
was limited to this rate to avoid formation of another bottleneck problem outside the
scope of the study.
From the initial data, analysis and documentation was made while
brainstorming for the main predicament. To further support the strength of the
problem identified, root causes were evaluated that contributed to the real problem.
Significantly knowing the source and generating solutions to small factors of cause
would in turn result to a greater improvement. Related production concepts were
deliberated to further illustrate the alternatives to be proposed. External research is
part of the evaluation where the applicable production concepts are selected to
appropriately quantify and exhibit the actual occurrences in the NLIT Filling Section
of DDC-FDCSI.
Generated alternatives were based on the root cause analysis and the
controllable, noise, and experimental analysis. Related causes were grouped
accordingly and each group has their corresponding alternatives based on the
identified root causes. Evaluating the alternatives was performed based on the
criteria relevant for the selection. At any alternative chosen, the other experimental
factors of the eliminated groups were as well solved with the chosen alternative. This
is true since the experimental factors are correlated relative to the main problem.
Cost-Benefit Analysis was conducted to assess the net benefits of the alternatives
using Factor Rating. The best alternative having the highest rating was to be
recommended. A summary and conclusion of the study was included and the areas
for further study are discussed in the latter part.
15
2.2 Definition of Terms and Symbols
The following tables serve as guide for technical terms used within the
company as well as the symbols used to describe certain processes.
Table 2-1 List of Technical Terms used in the research and their Meanings
Any resource that is a potential bottleneck
Capacity Constraint Resource
if not addressed carefully.
The amount of time each workstation has
Cycle Time to complete its set of tasks before the
product moves to the next station.
16
Table 2-2 List of Symbols used in charts and their Meanings
Symbol Meaning
Storage
Transport
Delay
Symbols were used to illustrate the flow of the processes involved in the
general procedure of the company as well as the detailed tasks in the production line
of Nestea Lemon Iced Tea which is further discussed in the next chapter.
17
3.0 SYSTEM DOCUMENTATION
3.1 General Processes
19
The Logistics Department uses the SAP software of Nestle from the encoding
of raw materials to releasing them into their system. This software exclusively
ensures the safe transfer of significant data from DDC-FDCSI to Nestle. In acquiring
supplies from the warehouse, a requisition slip is sent containing the list of raw
materials and packaging materials needed in the manufacturing plant. Inventory
levels of raw materials are manually recorded through backward tracing of the
logistics from the acquired production reports. From the standard procedures,
inventory level monitoring is performed on a monthly basis.
The three main processes involve in Production of dry products are Batch
Preparation, Dry Mixing and Filling. Each process is further discussed in the
following sections of the paper. Furthermore, the track of production is carefully
monitored every step through a Production Monitoring Scheme followed as a
standard basis for operations. Monitoring between the manufacturing lines is
specifically performed by the production assistant.
20
Sensory evaluation holds an essential role in product development and
quality assurance. The taste, smell, texture and appearance of food and beverage
products are important when defining the final quality and product standard. Sensory
is a significant aspect of the over-all characteristics of the product. The sensory
characteristics are noticeable to the consumer and can either give them pleasure or
displeasure. It is of utmost importance to know what the sensory characteristics are
of a given product and be able to maintain these consistently. For this reason, DDC-
FDCSI regards sensory evaluation as an important release criterion for the Nestea
Lemon Iced Tea.
21
Figure 3-1 Flow Process Chart of the General Processes in DDC-FDCSI
22
3.2 Product under Study
From the products being handled in the company, the study chose to focus
on Nestea Lemon Iced Tea based from its large production volume contribution. As
seen previously in Figure 1-3, 52.80 % of the total production volume is contributed
by the Nestea Lemon Iced Tea Product alone.
Figure 3-2 Actual Dimensions of 360g NLIT pouch and 12 x 360g case
The actual image of the product is seen in Figure 3-2 above. The net weight
of the product is 360 grams per pouch. Conversion of units used within the
production is based from the batch size of the production line. For the NLIT, the
batch size is 250 kilograms per batch. Every case contains 12 pouches of NLI.
Further conversion of units is indicated in Appendix B. The product unit size of NLIT
is relatively lower than the other products having a standard weight of 1 kilogram.
Despite of this, Nestea Lemon Iced Tea produces the largest production volume.
The raw materials used in the production of NLIT are citric acid, tea extract,
gum Arabic, flavor lemon, sugar, sweetener aspartame, Vit C ascorbic acid, and
sweetener acesulfame. The raw materials are weighed according to their
specifications during batch preparation and are homogenously mixed in the Dry
Mixing Section before being filled into pre-formed pouches in the Filling Section.
23
3.3 Production Capacity
From the six-month data of production volumes shown in Table 3-2 below,
the Nestea Lemon Iced Tea has an average of 32186.16 kg per month. High
demands have been constantly met by the production capacity with scheduled
overtime of workers. The amount of scheduled overtime workload is relative to the
difference between the Production Volume and the Actual Capacity per month.
Overtime hours rely on the actual production hours available in the Filling Section.
The actual capacity is determined by the Filling Section having the lowest capacity in
the series of processes involved. Master Production Schedule dictates the allocation
of workload in a weekly basis. Filling Section only starts production as the preceding
Sections provide a complete set of mixed batches.
Table 3-2 Production Volume in kilograms of NLIT during June to Nov 2009
Month Production Volume (in kg) Actual Capacity (in kg)
June 36188.64 30000.00
July 31121.28 28750.00
August 32460.48 30000.00
September 30348.00 28750.00
October 35009.28 31250.00
November 35989.92 28750.00
24
3.4 Production System
25
3.5 Process Documentation
In the Batch Preparation Section, the raw materials are obtained from the
storage area by pallets which are transferred with the use of a manual pallet jack.
Each raw material has its corresponding lot code which is used to monitor
material usage and inventory level. Lot codes used are exclusive only in the
DDC-FDCSI system which is manually recorded. This becomes relevant for
products having similar raw materials being used. Material usage recording uses
lot codes to hold information that would be relevant for tracing the raw materials
used for a specific batch in the NLIT production.
26
FLOW PROCESS CHART
OPERATION: Batch Preparation of Beverage LOCATION: DDC Plant
Production Line
COMPANY: DDC Food Development and Contracting SECTION: Beverage Line – Batch
Services, Inc Preparation Process
ANALYST: Jaquelyn Margaret L. Miciano TYPE: Summarized
METHOD: Present
SYMBOL
TRANSPORT
INSPECTION
OPERATION
STORAGE
STEP
DELAY
DESCRIPTION REMARKS
27
3.5.2 Dry Mixing Section
From the conducted trials and tests, eight minutes is enough for the dry
mixer to attain the homogeneity of the bulk mixture. Sensory Evaluation tests are
carried out as part of the standard quality protocols of the QA Department where
sampling is made per batch as exemplified in the General Processes Section of
the chapter. Labeling format depends on the batch number being handled. There
would be a resulting 10 polybags of mixed powder for every batch and are
labeled as follows: “Batch Number – A to J”. A new set of polybags is used to
transfer the batches to the Filling section.
28
FLOW PROCESS CHART
OPERATION: Dry Mixing of Beverage Production Line LOCATION: DDC Plant
COMPANY: DDC Food Development and Contracting SECTION: Dry Mixing Process
Services, Inc
ANALYST: Jaquelyn Margaret L. Miciano TYPE: Machine
METHOD: Present
SYMBOL
TRANSPORT
INSPECTION
OPERATION
STORAGE
STEP
DELAY
DESCRIPTION REMARKS
1 Setup of Machine
Transport Prepared
2 Batches to Dry Mixing
Process
Label Polyethylene according to
3
Bags batch numbers
Pour raw materials
4
inside Dry Mixer
Set to 8 minutes
5 Run Dry Mixer
for homogeneity
Pour bulk mixture into
6 bins with labeled PE
Bags
Recording of Batch
7
Completion
Stacking of Prepared
8
bulk mixture on pallets
Figure 3-5 Flow Process Chart of Dry Mixing of NLIT Production Line
29
3.5.3 Filling Section
The batches handled in the Dry Mixing Section are transferred to the
Filling Section and are processed in sequence according to their batch numbers.
Operations involve are labeling, coding, scooping, weighing, sealing, wiping,
stacking and lot coding. A better illustration of the flow of the operations is
presented through a Flow Process Chart in Figure 3-6. The standard time was
calculated from the time study conducted within the NLIT Filling Section as
presented in Appendix C. Inspection is done every 15 minutes in the weighing
operation as part of the standard procedure for the net weight control. It is
determined whether the net weight of the particular pouch is within the allowable
weight range set by the company. The allowable range is ± 0.5 % of the 360-
gram net weight.
30
FLOW PROCESS CHART
OPERATION: Filling of Beverage Production Line LOCATION: DDC Plant
COMPANY: DDC Food Development and Contracting Services, SECTION: Filling Process
Inc
ANALYST: Jaquelyn Margaret L. Miciano TYPE: Summarized
METHOD: Present
SYMBOL
Time (min)
TRANSPORT
INSPECTION
OPERATION
STEP
STORAGE
DESCRIPTION REMARKS
DELAY
Transport Packaging
1 Materials to Labeling
Process
Transfer prepared bulk
2 mixture in filling
process
Label Preformed
3 0.9
Pouches with stickers
Punch codes in
4 0.7
pouches
Place bulk mixture into
5
bin
Scoop bulk mixture into
6 0.6
pouches
According to
7 1.7 Weigh pouches
specification
Input Output Weight
8 Every 15 minutes
Content
Transport pallets in
13
dispatch area
14 Dispatch
31
3.6 Manpower Complement
The three main processes in the company have their own designated crews.
Four workers are assigned to accomplish the tasks in the Batch Preparation Section
while the Dry Mixing Section requires only three. Presence of a dry mixer made tasks
under the Dry Mixing Section to become more inclined on the standard operating
procedure of the machine. Table 3-4 shows the tasks and the number of workers
assigned to it.
Table 3-4 Number of Workers in the Sections of the NLIT Production Line
TOTAL 4
Operator 2
Dry Mixing Helper 1
TOTAL 3
Labeller 1
Coder 1
Scooper 1
Weigher 1
Filling
Sealer 1
Wiper 1
Stacker 1
TOTAL 7
*Source: DDC-FDCSI, 2009
Focusing on the Filling Section, its crew consists of seven operators in the
production line that includes the labeler, coder, scooper, weigher, sealer, wiper, and
stacker. Each operator is assigned to a single task within the production line. In
comparing the number of workers of each section, the Filling Section has the highest
number of workers involved in its operations.
32
3.7 Machine and Equipment
The Batch Preparation process has two equipments being used which is the
digital balance for the in acquiring the specifications of the raw materials. The 100-
kilogram capacity of the digital balance for Batch Preparation is larger than the one
used in the Filling Section.
The machine present in the production of Nestea Lemon is the dry mixer that
has a maximum capacity of 250 kilograms. The batch size in the production is
equivalent to the maximum capacity of the mixer. During operation, the whole cone
of the mixer rotates 360 degrees at the rate of 6 revolutions per minute. The
cylinders inside the cone rotate simultaneously with the cone ensuring the
homogeneity of the mixture.
In the Filling Section, there are four equipments being used within the
production line. These are the digital balance, horizontal band sealer, hot foil coder
and carton coder. Figure 3-8 shows the images of the digital balance and the
horizontal band sealer. Capacities of the two equipments are based from their
function. The digital balance has a capacity of 1200 grams. Transmission speed of
the horizontal band sealer is 3 feet per minute. Figure 3-9 displays the images for the
hot foil coder and carton coder. Its capacities are based on the maximum speed of
printing onto packaging materials. Printing speed of the hot foil coder is 20 to 50
prints per minute while the carton coder has a speed of 300 imprints per minute.
33
Figure 3-8 Digital Balance (left), Horizontal Band Sealer (right)
Given the capacities of the equipments used within the Filling Section, the
actual capacity is still determined by the production rate of the worker since these
equipments are manually used.
34
3.8 Plant Layout
An illustration of the actual floor layout of the plant is shown in Figure 3-10.
The three distinct production lines have their own area for Batch Preparation, Dry
Mixing and Filling. NLIT Filling Section is the focus of the study as stressed in the
figure.
35
3.9 Workstation under Study
Inside the NLIT Filling Production Area are the stations of the processes
executed in the whole Filling Section. The arrangement is presented in sequence
with the red arrows corresponding to its flow from the labeling to the stacking and lot
coding. Referring to the plant layout as basis, the bottom part of the workstation is
the partitioning wall from the NLIT Dry Mixing Area. Squares represent tables used
within the production line as processes are performed in standing position. Every
operation consists of only one worker to accomplish the task. The pallet at the side of
the scooper holds the mixed batches from the Dry Mixing Section while the pallet at
the end of the process would consist of the prepared NLIT cases in the Filling
Section. Proper palletizing is followed based on the required arrangement indicated
in the cases to ensure the locked position of the whole batch.
36
4.0 RESULTS AND DISCUSSIONS
4.1 Problem Identification
A resource constraint exists in the Nestea Lemon Iced Tea Production Line.
The actual capacity of each Section is based from their performances and production
output records. In comparing the capacities of the three production lines, the Filling
section has the lowest capacity indicating that it is the bottleneck of the system. The
production output rate is established by the bottleneck operation. As seen in Figure
4-1, the Filling Section limits the total production capacity to 0.625 batches per hour.
In the effort of attaining the capacity requested by demand, the filling process
increases its capacity by regularly extending work hours of the Filling Crew. The
overall overtime hours accumulated to 4505 hours from the seven workers involved
in the filling process. Figure 4-2 shows the overtime production hours in the Filling
Section alone for the given monthly period as illustrated below.
Total Overtime Hours in the NLIT Filling Section for the month of
June to November 2009
130.00
Number of Hours
110.00
90.00
70.00
50.00
June July Aug Sept Oct Nov
Overtime hours 115.80 99.59 103.87 97.11 112.03 115.17
Figure 4-2 Total Overtime Hours in the Filling Section for June to Nov 2009
Since the NLIT make up for 52.8 % of the total production volume, it would be
important to address capacity problems occurring in the NLIT Production Line. With
the high volumes of production, it is necessary to increase the capacity of the Filling
production line by dealing with the resource constraint.
38
4.2 Problem Analysis
From the three main processes in the NLIT Production Line, The Filling
section determines the average production rate since it has the lowest actual
capacity compared to the Batch Preparation and Dry Mixing Process. In
analyzing the factors that caused its low capacity, the factors were classified into
Man, Method, Machine and Material. The summarized first level factors of the
problem are presented through the fishbone diagram in Figure 4-3.
39
4.2.1.1 Man
40
Table 4-1 Average Observed Time and Standard Time of Filling Elements
1. Labeling of Pouches
1.150 1.261
41
4.2.1.2 Method
The factor associated with the Method used is the high processing
time of the Filling Section relative to the other processes in the NLIT
Production Line. Manual processes performed within the Filling
production line rely on the manpower capacity of the Seven-worker Crew.
The absence of a filling machine forces the Filling section to maximize
manpower capacity that is detrimental to the length of processing time. Its
significance is relative to the presence of a dry mixing machine in the
preceding process which is the Dry Mixing Section. Existence of a dry
mixer significantly increases the rate of production in the Dry Mixing
Section resulting to bottleneck processes within the NLIT production line
particularly the Filling process being next in line. Unbalanced capacities
within the line significantly contribute to additional production costs.
42
4.2.1.3 Machine
43
Machines involved in the Filling section include the digital balance,
horizontal band sealer, hot foil coder and carton coder. One of each
machine is available in the NLIT Filling section. The number of machines
restricts the capacity of the process since increasing manpower is not
viable without additional machines. The layout of the workstation in Figure
3-11 supports the design of having a single operator for each machine.
Primary investment for the NLIT Filling Section was constricted to a single
set of machines. This further restricts the capacity of the Filling section as
the number of workers is relative to the number of machines available.
Additional manpower entails additional machines.
4.2.1.4 Material
44
4.2.2 CNX Analysis
The associated root causes are further classified into C’s, N’s and X’s
which are controllable, noise and experimental factors respectively. Table 4-2
shows the summary of the root causes recognized and their corresponding
classification. Referring to Table 4-2, two noise factors, one controllable factor
and five experimental factors were identified. Factors classified under noise
entails that these causes would not be addressed by the study. Tackling the
controllable factor contributes to resolving the problem through adhering to the
standard practices within the manufacturing plant. Resolving experimental factors
by means of utilizing appropriate concepts related to the causes would in turn
result to determining alternative solutions to address the main problem.
Table 4-2 CNX Analysis of the Root Causes of Low Capacity of Filling Section
45
Noises are root causes that are beyond the control of the company and
beyond the scope of the study. These are the problems that the study would not
be able to handle as the limitation of the scope applies. Noise is identified in the
Material cause factors where the net weight of the product was observed to be
small. Required weight specifications are provided by the client. DDC-FDCSI is
not involved in determining the appropriate net weight of the product that makes
the cause to be out of scope. This requires versatility in the production of DDC-
FDCSI to handle difference in weights of products. Another noise factor is
associated with Machine causes. Expecting small volumes of production has
limited the availability of machines to a single series. The General Manager and
the Project Engineer are the ones responsible for determining the number of
machines required. Demand levels for the product were underestimated thus
leading to a low capacity of the NLIT Filling Section relative to the capacity
requested by demand. These are the factors excluded in the scope of the study
because it is difficult to control.
46
DDC Food Development Contracting Services,
Inc. San Fernando, Pampanga
PRODUCTION
MONITORING SCHEME
The experimental causes are the problems that can be altered in such a
way of achieving the objectives of the study. These are the ones that can have
quantitative solutions in order to improve the current system. To further address
each experimental factor, the initially identified experimental factors are to be
grouped.
47
The Experimental Factor Group B consists of only one cause factor as
shown in Table 4-4. Absence of a filling machine is recognized to have caused
the manual handling of the filling process. Because of this, the production output
rate is controlled and limited by the manpower capacity. Moreover, the
identification of this factor is as well relative to the preceding process in the Dry
Mixing Section where a dry mixer is present in the operation. This group
concerns the automation of the processes involved in the Filling Section through
introducing a filling machine. The need for a machine was developed from the
current rate of the preceding process. Attending to this need intends to resolve
the main problem as well as the other cause factors identified in the study.
48
4.2.3 Presentation of Alternatives
ii. Divide the date to four, which is the duration of the initial
and final inspection.
iv. Add the remainder to the start of the first four hours and
the last four hours of the shift.
49
Figure 4-9 Process Flow Diagram of Manufacturing Line Checks
50
The production area for the Filling Section is visited during the
hour of inspection as calculated from the random sampling method
outlined earlier. Specific minutes of the computed hour of inspection on
the production line would be subjectively determined by the Production
Assistant given that other responsibilities within the manufacturing plant
are still performed as well. The duration of the inspection estimated to last
20 minutes given that each processes in the Filling Section is overseen.
51
4.2.3.2 Experimental Factors
Experimental
Alternative
Factor
52
Table 4-7 Standard time of Operations in the Filling Section
Element No. Standard Time
And Description (min/case)
Total 10.127
53
Alternative A: Additional workers and Parallel workstations
1. Labeling of Pouches
1.261 1.368 2
Total 10.127 13
54
Table 4-9 Determining the Output Rate of Alternative A
Standard
Element No. Standard
Number of Time/
Time
Workers Number of
And Description (min/case)
Workers
55
ST LO
AC T C
KI OD
N I
G NG
AN
D
56
Table 4-10 Cost of Implementing Alternative A
57
Based on Table 4-11, the output rate of Alternative B is
determined by the longest operation which is the stack and lot coding.
Introducing a Filling and Sealing Machine increases the capacity of the
Filling Section to 0.702 minutes per case which is equivalent to 1.477
batches per hour. An additional capacity of 0.852 batches per hour is
made available by Alternative B.
1. Labeling of
1.26 0
Pouches
2. Coding of
1.05 0
Pouches
0.4 0.4
3. Scoop NLIT
0.90 0
mixture
58
Reallocation of the workers from the Filling Section to the Batch
Preparation Section would require one day training on the procedures
performed. Tasks of the four workers to be reallocated are sieving and
weighing. The Production Assistant will be the one responsible for training
the workers. A day’s training is sufficient enough since the task follows a
standard procedure. Breakdown of costs for Alternative B is presented in
Table 4-12.
59
Alternative C: Customized scoop, Additional workers and Parallel
workstations
60
Output Rate of Alternative C is dictated by the longest operations
in its series of processes which is the coding of pouches. This can be
compared with the output rate of Alternative A since the same operation
turned out to be the longest. Thus, the output rate of Alternative C is
similar to that of Alternative A which is 1.049 minutes per case or 0.988
batches per hour. Conveying the % improvement of its increase in
capacity, it is also 58.08% relative to the current output rate. Five workers
are added as estimated in Table 4-13 with their respective tasks. Since
additional workers are placed to operations requiring machines, additional
parallel workstations are as well needed to implement this modification.
Corresponding costs of additional resources is presented in Table 4-14.
61
4.2.4 Cost-Benefit Analysis
A 41,400 Php
B 301,700 Php
C 36,000 Php
62
Table 4-16 Annual Cost of Alternative A
Maintenance Cost Php Time Total
Average
Regular
40.62 production
Manpower 6 rate per 2304 561,600
5 hours per
hour
year
Average
Overtime
52.81 expected 1287.
Manpower 6 rate per 407,856.15
25 OT hours 12
hour
per year
Replace-
Frequency
ment of
Horizontal of replace-
2 Sealing 750 12 18,000
Band Sealer ment per
Belt and
year
Cleaning
Frequency
Digital
2 Repairs 500 of repair 2 2,000
Balance
per year
Cost
Cases per
Opportunity per Time
hour
case
Average
Opportunity loss production 230
7.928 450 8,220,000
in capacity hours per 4
year
Opportunity cost was computed relative to the ideal rate which is the
capacity of the next resource constraint, the Batch Preparation Section. This
was set as the Capacity Resource Constraint provided that it is the next
bottleneck in the system and exceeding this capacity would create further
problems in balancing the NLIT Production Line. Batch Preparation Section
has a capacity of 1.125 batches per hour. Comparing this to the proposed
rate of 0.988 batches per hour, the difference is 0.137 batches per hour
which is equivalent to 7.928 cases per hour. Refer to Appendix A for
conversion of parameters. The cost per case is equivalent to the net profit per
case given by the company.
63
Table 4-17 Annual Benefit of Alternative A
= 12,846,907.18 Php
64
Alternative B: Purchase Filling and Sealing Machine and Reallocation of
workers
Repair
Frequency
and
1,500 of repair 12 18,000
Mainte-
per year
nance
Filling and
Miscella-
Sealing 1
neous
Machine Frequency
(Parts
7,500 of repair 4 30,000
replace-
per year
ment and
others)
Cost
Cases
Opportunity per Time
per hour
case
Average
Opportunity loss in production
12.182 450 2304 12,630,000
capacity hours per
year
65
Table 4-19 Annual Benefit of Alternative B
% Improvement Benefit
Overtime
Average
OT Cost per
overtime man- Savings
hour
hours per year
9009.84 52.8125 475,832.18
136.32%
Increased Capacity
Additional
Service Rate
Capacity in Additional Profit
Per case
cases
113,600 450 51,120,000
TOTAL 51,595,832.18 Php
= 51,159,652.68 – 12,678,000
= 38,917,832.18 Php
66
Alternative C: Customized scoop, Additional workers and Parallel
workstations
Average
Regular
40.62 production
Manpower 5 rate per 2304 468,600
5 hours per
hour
year
Average
Overtime
52.81 expected
Manpower 5 rate per 1287.12 339,880.13
25 OT hours
hour
per year
Replace-
Frequency
Horizontal ment of
of replace-
Band 2 Sealing 750 12 18,000
ment per
Sealer Belt and
year
Cleaning
Frequency
Digital Ba-
1 Repairs 500 of repair 2 1000
lance
per year
Cost
Cases
Opportunity per Time
per hour
case
Average
Opportunity loss production
7.928 450 2304 8,220,000
in capacity hours per
year
TOTAL 9,047,480.13 Php
67
Loss in opportunity was derived from the ideal rate which is the Batch
Preparation. The ideal rate was set to avoid creation of new problems in the
system. Increase in capacity is limited by the Batch Preparation Section since
it is the next bottleneck in the production line. Batch Preparation Section has
a capacity of 1.125 batches per hour. Comparing this to the proposed rate of
0.988 batches per hour, the difference is 0.137 batches per hour which is
equivalent to 7.928 cases per hour. Refer to Appendix A for conversion of
parameters. The cost per case is equivalent to the net profit per case given
by the company.
% Improvement Benefit
Overtime
= 22,056,363.33 – 8,707,600
= 13,008,883.18.20 Php
68
4.2.5 Evaluation of Alternatives
Description Rating
Very Important 5
Important 4
Fairly Important 3
Irrelevant 1
32,000,000 – 40,000,000 5
24,000,000 – 32,000,000 4
16,000,000 – 24,000,000 3
8,000,000 – 16,000,000 2
0 – 8,000,000 1
69
The importance for ease of implementation is weighed based on the
ability of the company to execute and handle new developments. This
measure is considered important given the existing constraints in the
company that could cause additional problems. From the established rating
factors, each alternative were individually assessed based on the selected
criteria.
Alternative B was given a rating of “5” and “3” for the net benefit and
ease of implementation factor respectively. High returns were projected
through the cost-benefit analysis which entered the highest range for the net
benefit factor giving the alternative rate of “5”. Introducing a new machine
comes with necessary trainings for the new technology and the
implementation of a different set of standard procedures for the proper
handling of the Filling and Sealing Machine.
70
Alternative C has the same range of annual benefits as of the first
alternative for the reason that the two alternatives resulted to the same %
improvement as well as having close costs of implementation. Rating for this
alternative was affected by the computed Net Benefit value relative to the
high payback of Alternative B. Introduction of a customized design of the
scoop does not entail a new level of technology since the tasks were not
drastically altered in this alternative. Because of this, Alternative C is
considered easy to implement since only additional workers and machines
were modified with similar operations performed.
Rating Factor
B 5 3 37
C 2 4 36
Do Nothing 1 5 25
71
5.0 SUMMARY AND CONCLUSION
DDC Food Development and Contracting Services, Inc manufactures food and
beverage powdered products of Nestle Philippines. The Production Department consists
of three major production lines: Dehydrated Culinary Products, Milo Vending Mix and the
Nestea Lemon Iced Tea. The study dealt with the Nestea Lemon Iced Tea Production
Line which comprises of three processes: Batch Preparation, Dry Mixing and Filling.
Further focus was given to the Nestea Lemon Iced Tea Filling Section through the
recognition of its low capacity relative to the other processes.
From the concepts and tools for analysis used throughout the study, the results
pointed to the problem of the Filling Section having low capacity. It was determined that
the capacity of the current system lags 16.59% from the capacity requested by demand.
Analyzing the problems presented a number of root causes classified into Man,
Machine, Method and Material. These were further examined through CNX Analysis
where the experimental factors were identified as follows: 1. Amount of workload
exceeds manpower capacity, 2. The number of machines is insufficient, 3. There is an
absence of a filling machine, 4. The scooper creates large net weight discrepancies and
5. The volume capacity of the scoop is 450 grams. These factors were grouped
according to the aspect being addressed as well as the alternatives to be provided.
A set of alternatives were proposed to address the root causes identified in the
analysis. Alternative A provided solutions of additional workers and parallel workstations.
Alternative B deals with the absence of a filling machine through recommending an
investment on acquiring a filling machine and reallocating existing workers to the next
resource constraint of the production line. Alternative C concentrated on the remaining
the cause factors through customizing the volume capacity of the scoop. The %
improvements of the alternatives were determined from the increase in capacity
presented relative to the current production rate of the NLIT Filling Section. Calculations
resulted to 58.08 % increase in capacity for Alternative A and C while an increase in
capacity of 136.32 % is expected in the implementation of Alternative B. Large
differences in % improvement is apparent given that Alternative B automates the whole
process. To further filter the alternatives, a cost-benefit analysis was conducted to
project the net benefits of each alternative.
73
Costs of opportunity loss, modification of resources proposed, and maintenance
were considered upon implementing each alternative. Estimated costs of implementation
were 41,400 Php, 301,700 Php and 36,000 Php for Alternatives A, B and C respectively.
To further assess how the % improvement of the alternatives would reflect on monetary
terms, savings from overtime and expected additional profit from the increased capacity
were accounted and translated as annual benefits for each alternative. Projected annual
benefits were 12,846,907.18 Php, 38,917,832.18 Php and 22,056,363.33 Php for
Alternative A, B and C respectively.
The alternatives were evaluated with the selected criteria for assessment, net
benefits and the ease of implementation. Weighted rating was provided for each
criterion. Rates for each alternative were outlined from the given description of every
level presented in the criteria. Costs were determined from the additional investment
required by the alternatives presented. The ease of implementation was weighed
according to how the company is expected to acknowledge the alternatives presented.
Based from the evaluation, Alternative B has the highest rating.
74
6.0 RECOMMENDATIONS
Analyzing the operations of the company resulted to addressing major problems
encountered in the manufacturing line such as having a low capacity of the Nestea
Lemon Iced Tea Filling Section. Through comprehensively scrutinizing the predicaments
recognized, the study has provided recommendations.
The selected recommendation for increasing the capacity of the Filling Section is
to purchase an automated filling and sealing machine and reallocate workers in the
production line. This option would result to higher gains as compared to the other
alternatives. Automating the filling operation increases the capacity by 136.32 % relative
to the existing output rate of the Filling Section. Benefits corresponding to the increase in
capacity cover the initial investment required to implement this recommendations.
Addressing the causes of the factors classified to Machine, the other root causes is
expected to be solved at the same time given that all root causes attends to the main
problem identified in the study.
76
7.0 AREAS FOR FURTHER STUDY
The study focused on addressing the capacities of the Nestea Lemon Iced Tea
Production Line and particularly dealing with the Filling Section. Attending to the basis of
the master production schedule is a main interest for future studies as it can provide
great opportunities for improvement. Design of the production lines is currently in series
which creates problems of transfer and buffer batch sizes. Tackling this problem is a
different perspective where inventory system would be involved.
Two other main product groups, Milo Vending Mix and the Dehydrated Culinary
Products, can be further examined through individual studies. From the capacities
presented by the three production lines, the Dry Mixer of Milo Vending Mix is observed
to be underutilized. Since Milo contributes 27% of the total production volume, further
examining its status can contribute to the company as well.
The usage of polyethylene bags within the production line is not restricted as
seen in the Flow Process Charts of the NLIT Production Line. This is apparent in all the
three production lines. No control is imposed on the use of polyethylene bags and the
scraps are not accounted by the company. Further investigating this scenario would
promote green manufacturing in the company.
Lastly, the cleaning procedure of the tools and equipments used in all production
lines require the use of Oxonia solution. This is to keep all products pathogen-free by
constantly monitoring the area and the equipment being used. All the equipments are
cleaned with the Oxonia solution and its use is not regulated by the company. Effects of
the oxonia solution when released to the environment are not concerned by the
company. DENR has already questioned this issue of release of the chemical. Further
analyzing this and the possibility of introducing a water treatment facility within the
manufacturing plant would assure the company’s compliance to the environmental
standards.
78
REFERENCES
ANUPINDI R., S. CHOPRA, S. DESHMUKH, J.A. VAN MIEGHEM & E. ZEMEL. 2008.
Managing Business Process Flows: Principles of Operations Management.
International Edition. New Jersey: Pearson Education Inc.
ARNOLD, J.C. & J.S. MILTON. 2004. Introduction to Probability and Statistics: Principles
and Applications for Engineering and the Computing Sciences. 4th edition. New
York: McGraw-Hill Inc.
BAUTISTA, J.L.A. 2008. Minimizing Idle Times at the Powder Condiments Line of
Consolidated Packaging Enterprises, San Francisco Del Monte, Quezon City.
Undergraduate manuscript. UP Los Baños.
NIEBEL, B.W. 1993. Motion and time study. 9th ed. USA: Richard Irwin, Inc.
PARK, C.S. 2002. Contemporary engineering economics 3rd edition. New Jersey:
Pearson Education, Inc.
STEVENSON W.J. 2007. Operations Management. 9th edition. New York: McGraw-
Hill/Irwin Education Inc.
xiv
Appendix A: Computation for the Goal Improvement
For the purpose of having a definite objective of the study, the Six sigma concept
on Goal computation is used. (Bautista, 2008) The formula below was used to determine
the Goal.
The quantitative goal of the study is to increase the current process capacity of
the NLIT Production Line by 44 %.
The capacity of the Filling Section is the current baseline as it establishes the
average performance of the process. Using the capacity of the Batch Preparation as the
entitlement and the target performance, the difference in the capacities multiplied by
0.70 and subtracting this from the baseline would lead to the percentage of improvement
that the study aims to achieve.
xv
Appendix B: Nestea Lemon Iced Tea Conversion of Units
xvi
Appendix C: Time Study
The time study conducted was based from Niebel, 1993 as well as all formulas
used. The table below shows the observed time recorded with 10 initial samples:
Process Trial No. (Actual time in seconds)
No.
Name 1 2 3 4 5 6 7 8 9 10
Labeling
1 of 72.34 56.04 47.86 59.73 74.85 83.91 60.32 83.16 63.72 71.85
Pouches
Coding
2 of 35.77 47.72 64.07 84.42 59.75 60.28 54.27 76.34 71.93 48.43
Pouches
Scoop
3 Nestea 37.26 59.84 47.60 45.73 48.33 51.84 47.18 52.30 36.75 49.26
Mixture
Weigh
4 108.19 127.08 138.27 72.31 151.89 155.84 168.17 191.59 119.79 107.91
Pouches
Seal
5 123.57 160.72 126.78 106.94 145.06 113.87 157.28 175.17 133.79 104.86
Pouches
Wipe off
6 powder 59.67 71.54 55.78 57.85 72.36 59.89 89.24 62.74 68.09 60.37
residue
Stack
7 and Lot 31.43 43.10 41.85 44.69 46.72 41.38 35.07 52.18 47.13 33.26
coding
In computing for outliers within the observed data, the next table below shows
the computed range of acceptance using IQR.
Process No. And Description
Observation 3. Scoop 6. Wipe off 7. Stack
1. Labelling 2. Coding of 4. Weigh 5. Seal
Trial No. Nestea powder and Lot
of Pouches Pouches pouches Pouches
mixture residue Coding
1 47.86 35.77 36.75 72.31 104.86 55.78 31.43
2 56.04 47.72 37.26 107.91 106.94 57.85 33.26
3 59.73 48.43 45.73 108.19 113.87 59.67 35.07
4 60.32 54.27 47.18 119.79 123.57 59.89 41.38
5 63.72 59.75 47.6 127.08 126.78 60.37 41.85
6 71.85 60.28 48.33 138.27 133.79 62.74 43.1
7 72.34 64.07 49.26 151.89 145.06 68.09 44.69
8 74.85 71.93 51.84 155.84 157.28 71.54 46.72
9 83.16 76.34 52.3 168.17 160.72 72.36 47.13
10 83.91 84.42 59.84 191.59 175.17 89.24 52.18
AVERAGE 67.38 60.30 47.61 134.10 134.80 65.75 41.68
STD. DEV. 11.80 14.63 6.84 34.48 24.07 10.03 6.63
MEDIAN 59.73 48.43 45.73 108.19 113.87 59.67 35.07
xvii
Comparing the range from fence 1 to fence 3 of each operation, the observed
times in the first table have fallen within the range. There are no significant outliers in the
observations made. The number of samples made was also enough to support the
establishment of standard times.
xviii
In computing for the Normal Time, the following formula is used:
The table below shows the computed Normal times based from the observed time:
1.116
1. Labeling of Pouches
0.928
2. Coding of Pouches
0.793
3. Scoop Nestea mixture
2.206
4. Weigh pouches
2.185
5. Seal Pouches
1.112
6. Wipe off powder residue
0.621
7. Stack and Lot Coding
Total 8.962
Allowance factors were derived from the observations of the researcher during
production. These allowances are presented in the table below.
ALLOWANCE FACTORS
STANDING 2 0.02
MONOTONY 2 0.02
0.13
xix
Using total of the allowances identified, the value is used in computing for the
standard time of the operations in the Filling Section with the formula below:
The table below shows the computed Standard times based from the observed time:
Total 10.127
xx
Appendix D: Westinghouse System Ratings
xxi
Appendix E: Net Present Value of Alternative B
The Net Present Value of Alternative B would determine the equivalent worth of
inflows to outflows based from the costs and benefits identified in the alternative.
Assumptions were made upon projecting the net present worth of the annual cash flows.
Service life used was based on the useful life of the Filling and Sealing Machine which is
10 years. The interest rate was obtained from the current bank interest available, 13%.
The net cash flow was determined from the costs and benefits of the alternative for each
year. Present values for every year of the given useful life of the machine were
computed. Formulas from Park, 2004 were used to project those values by dividing the
net cash flow by 1 plus the bank interest rate raised to the equivalent service life.
Present Value at
Year Costs Benefits Net Cash flow
year 2010
2010 -301,700 -301,700 -301,700
2011 12,678,000 51,159,652.68 38,917,832.18 11,487,348.04
2012 12,678,000 51,159,652.68 38,917,832.18 10,165,794.72
2013 12,678,000 51,159,652.68 38,917,832.18 8,996,278.515
2014 12,678,000 51,159,652.68 38,917,832.18 7,961,308.42
2015 12,678,000 51,159,652.68 38,917,832.18 7,045,405.681
2016 12,678,000 51,159,652.68 38,917,832.18 6,234,872.284
2017 12,678,000 51,159,652.68 38,917,832.18 5,517,586.092
2018 12,678,000 51,159,652.68 38,917,832.18 4,882,819.551
2019 12,678,000 51,159,652.68 38,917,832.18 4,321,079.249
2020 12,678,000 51,159,652.68 38,917,832.18 3,823,963.937
Net Present Value 70,134,756.49 Php
xxii
Appendix F: Certificate of Completion
20 March 2010
Engineering Student of the University of the Philippines Los Baños underwent on-the-job
on
training (OJT) at DDC Food Development Contracting Services, Inc., from 20 April 2009
Materials Warehouse.
Issued this 20th day of March 2010 at City of San Fernando, Pampanga, Philippines
DANILO D. CANLAS
General Manager
xxiii