Dinesh Seth, Nitin Seth and Deepak Goel Journal of Manufacturing Technology Management

Abstract
Purpose - The purpose of this research work is to identify and address various wastes in the supply chain of edible cotton seed oil industry, (specifically processing side) using VSM approach to improve productivity and capacity utilization in Indian context. Design/methodology/approach Critical observations and Interviewing techniques were used with open ended questions to understand the processes involved in the value chain of cottonseed oil industry. Different chain links/ members were investigated through personal visits and discussions. VSM is applied as an approach on the industry to identify and remove non value adding activities. Findings Major findings obtained from the study are: 1) There is excess cumulative inventory of 244 days in the whole supply chain. 2) Industry is highly fragmented with large number of small players present which hampers the use of economies of scale. 3) There are non values adding activities present in the supply chain such as moving of cottonseed oil from expeller mill to refinery. 4) The industry still uses outdated old technology which hampers the productivity. Research limitations/implications This paper discusses the waste removal using VSM in Indian cottonseed oil sector which was hardly ever attempted. Replication of such studies in other oil seed producing and processing countries will be very useful as the concept of VSM is rarely applied to study edible oil processing and its supply chain. Practical implications Looking at the huge demand - supply gap that persists in Indian edible oil industry, attention needs to be given to boost the productivity of oil sector. Improving agricultural productivity to produce more oilseeds per hectare is beneficial, productivity improvement in the supply chain which includes the oilseed processing sector and its economic reach is also essential. Waste removal from the oilseed processing sector is one key to improve the productivity of sector. Originality/Value This paper addresses the various wastes in the processing side of supply chain of Indian cottonseed oil industry using VSM as an approach which was hardly ever attempted. Wastes are then individually attacked to reduce or eliminate it from the system. Suggestions to make the whole chain more productive can be generalized and can be replicated in context to other developing countries.

Research Methodology
S.No.
1 Cottonseed received 2 Cottonseed moved to drying platform 3 Cottonseed Unpacked 4 Cottonseed Dried 5 Cottonseed packed 6 Cottonseed moved to stores 7 Cottonseed Stored 8 Cottonseed moved to seed cleaner 9 Cottonseed unpacked and fed to seed cleaner 10 Cottonseed cleaned 11 Cottonseed moved to expeller 12 Cottonseed fed to expeller 13 Crushing of Cottonseed 14 (a) 14 (b) Cottonseed Oil from expeller moved to tank Cottondseed Cake moved to packing area

Step

Value
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15 Cottonseed Oil fed to neutraliser 16 Neutralisation of Cottonseed Oil 17 Neutralised Cottonseed Oil stored in tanks 18 Neutralised cottonseed oil shipped to refinery 19 Refining of Cottonseed Oil 20 Refined Cottonseed Oil stored 21 Refined Cottonseed Oil packed 22 Cottonseed Oil shipped to market

Current state of cottonseed processing supply chain

Process activity mapping

Discussion & Suggestions

Current state of cottonseed processing supply chain

State of Cottonseed Processing Industry

Summary:
Rother and Shook (1999) rightly argue that whenever there is a product for a customer, there is a value stream .The challenge lies in seeing and working on it. VSM can be done in the same way for practically any business activity and expanded upstream or downstream. Indian cottonseed industry has a huge potential due to fast rising demand and insufficient supply of edible oil in India. Use of inappropriate methods of processing, unorganized industry and presence of large number of non networked small players is making the overall supply chain inefficient and is causing losses and wastes. Thus the wastes of the industry in terms of overcapacity, unnecessary inventory, motion and transport etc need to be addressed to improve efficiency and effectiveness of supply chain. Four major recommendations come out of this paper for the industry. One, consolidation of the industry to form bigger players who can exploit economies of scale. Second, backward integration with the farmers to assure continuous supply of raw material (cottonseed). Third, forward integration with refineries or combining the refineries with the oil mills. Finally, last but not the least, use of solvent extraction to extract the maximum oil from oil meal. In the existing scenario of processing capacity and low capacity utilizationIndias processors operate their plants at a level where average costs are high. They can reduce unit processing costs by increasing capacity use. In the future, costs can drop further if larger, more technically efficient plants are built and can operate at high levels of capacity use. Lower processing costs would create a stream of benefits to processors that could be shared with producers (in the form of higher oilseed prices) and consumers (in the form of lower oil prices). With the above recommendations being in practice, the cottonseed oil industry might look into future with positive outlook. The future scope of work lies in exploiting other powerful tools of value stream to attack down stream wastes in the supply chain of edible cotton seed oil industry. Similarly, the concepts can be replicated for other edible oil industries to capture various scenarios and attack wastes in processing and distribution chains. Similarly, studies can be used to compare value streams in context to country specific situation.