J.D. Birla Institute Department of Management

Dissertation

Title Analysis of outbound logistics at Emami Agrotech Ltd., Haldia-

How to reduce turnaround time for drivers on site

Under the Supervision of

Name of the MentorMr. Tapobrata Ray

Submitted by

Name of the Student- Vivek KumarSemester- VI (sixth)

Specialization- MarketingClass Roll No. - 194

(Dissertation submitted in partial fulfillment of the requirements of the graduate degree, Bachelor of Business Administration (Honours))

Signature of the student: Signature of the supervisor:

1 | P a g e

To,

The Controller of Examinations

Jadavpur University,

Kolkata.

Respected Sir,

I, Vivek Kumar take full ownership of this work, titled “Analysis of outbound logistics at Emami Agrotech Ltd., Haldia- How to reduce turnaround time for drivers on site”.

All the references used are well acknowledged in the Bibliography.

This Term Paper is in partial fulfilment of the requirements of

Graduation Degree in Bachelors of Business Administration (Honours)

from Jadavpur University.

Yours Sincerely,

VIVEK KUMAR

Registration No: B2013111

Roll No: 194

2 | P a g e

DECLARATIONI declare the following:

The word count of the dissertation is 10,643 words.

The material contained in this dissertation is the end result of my own

work. Due acknowledgement has been given in the bibliography and

references to all sources be they printed, electronic or personal.

I am aware that my dissertation may be submitted to a plagiarism

detection service where it will be stored in a database and compared

against work submitted from this institute or from any other institutions.

In the event that there is a high degree of similarity in content detected,

further investigation may lead to disciplinary actions including the

cancellation of my degree according to Jadavpur University rules and

regulations.

I declare that ethical issues have been considered, evaluated and

appropriately addressed in this research.

I agree to an entire electronic copy or sections of the dissertation to

being placed on the e-learning portal, if deemed appropriate, to allow

future students the opportunity to see examples of past dissertations and

to be able to print and download copies if they so desire.

NAME: VIVEK KUMAR

ROLL NO: 194, Registration No. –B2013111

Batch of 2013-16.

MENTOR: Mr. Tapobrata Ray

3 | P a g e

ACKNOWLEDGEMENTI would like to express my gratitude to all those who gave me their

support to complete my dissertation. I express my feelings and gratitude

and sincere thanks to the director of our college, Dr. J. N.

Mukhopadhyaya.

I am deeply indebted to my mentor/supervisor at J. D. BIRLA

INSTITUTE (DEPARTMENT OF MANAGEMENT), Mr.

Tapobrata Ray for his unending support, direction and guidance

throughout the course of research of material for the project as well as

for the final compilation.

I would also like to express my heartfelt thanks to the coordinators and

staff of the Learning Resource Centre of our college, who assisted me

to avail the relevant books and allowed me to carry out the necessary

research for my project work.

The various websites from which information was acquired have proved

to be very helpful and valuable sources of information in my project.

I would further like to acknowledge my parents and friends for the

indispensable support to make this project a success.

4 | P a g e

ABSTRACTThis paper documents the experience of redesigning in-plant logistics

operations of a large biodiesel complex in India. The complex under

reference is expected to have a traffic volume of one tanker per 30 to 60

minute till date.

The existing systems and procedures to receive and inspect a tanker,

load material, and complete commercial formalities are designed with a

target tanker turnaround time of 1.5 hours. However, in reality the actual

tanker turnaround time is significantly higher than the target turnaround

time.

The plant is located in a growing industrial area. Inordinate delay in

tanker turnaround time is a major demotivating factor for the tanker

companies to place their tankers with this complex. Consequently, there

is a significant variation between the planned and actual dispatch of

finished goods.

This investigation systematically analyzes the reasons for significant

departure in the tanker turnaround time. A tanker driver survey is used to

identify and prioritize areas of delay.

5 | P a g e

As a consequence of this analysis, it is argued that deployment of

additional resources, optimizing the activity processing time, sub-

contracting some of the activities and extensive automation of the

process would only marginally improve the performance of the

turnaround time.

In order to improve the turnaround time substantially, there is a need to

redefine work, and fundamentally change the underlying process.

Accordingly, several initiatives are identified to ensure dramatic

reduction in the tanker turnaround time.

6 | P a g e

INDEX

S.No CONTENTS Page No

1

1.1

1.2

1.3

1.4

1.5

2

2.1

2.2

2.3

3

4

4.1

4.2

INTRODUCTION

Supply chain management

Overview

About the internship

Research Objectives

About Emami Agrotech Ltd.

LITERATURE REVIEW

Key Players in the industry

The Biodiesel Reaction

The Biodiesel Processes

RESEARCH METHODOLOGY

DATA ANALYSIS

Findings

Recommendations

9-11

11-12

12

13

14-19

20-27

27

28-35

36-54

55-58

59-63

63-67

68-69

7 | P a g e

5

6

7

CONCLUSION

ANNEXURE

BIBLIOGRAPHY

70

71-77

78-80

1. INTRODUCTION

1.1 Supply chain managementA supply chain involves facilities, functions, and activities for producing

& delivering product or service from suppliers to customers. Supply

chains usually include four functional components: (1) demand

planning, (2) manufacturing-planning and scheduling, (3) supply

planning, and (4) transportation planning. Supply chain

management (SCM) spans all the movement and storage of raw

materials, work-in-process inventory, and finished goods from

8 | P a g e

point of origin to point of consumption, (Chopra & Meindl, 2003). SCM

draws heavily from the areas of operations management, logistics,

procurement, information technology and strives for an integrated

approach. The main objective of SCM is to minimize supply chain costs

while keeping a reasonable service level leading to customer

satisfaction/quality/on time delivery, etc., (Christopher, 2011).

Logistics

Logistics refers to the management of the flow of resources between the

point of origin and the point of consumption in order to meet some

requirements, for example, demand from customers or corporations. The

resources managed in logistics can include physical items, such as food,

materials, equipment, liquids, and staff, as well as abstract items, such as

time, information, particles, and energy. The logistics of physical

items usually involves the integration of information flow, material

handling, production, packaging, inventory, transportation,

warehousing, and often security. The complexity of logistics can

be modelled, analyzed, visualized, and optimized by dedicated

simulation software. The minimization of the use of resources is a

common motivation. (Mentzer, 2004).

Outbound Logistics

9 | P a g e

Truck drivers play a very important role in the movement of material

associated with storing, transporting, and distributing goods to its

customers or distribution centers. One way to overcome this shortage is

making more effective use of the drivers’ time by reducing

the waiting times at loading and unloading sites. Reducing the waiting

times should also contribute to making the driver profession more

attractive. Also a more respectful treatment of the drivers at (un)loading

sites will increase the attractiveness of the driver profession. Turnaround Time

Turnaround time is defined as the time taken by the transport vehicles to

complete the whole process of loading finished goods, starting from the

point of entry to its exit from the factory premises. In Nestle India,

Nanjangud the break-up of the outbound logistics process (finished

goods) is shown in Figure 1. Turnaround time is probably the most

important key performance indicator in any logistics operation, as stated

in Bolstorff (2007). A short turnaround time is economically

advantageous, making the most efficient use of time and materials.

(Bowersox, Closs, & Cooper, 2002)

1.2 Overview

10 | P a g e

The logistics industry in India is evolving rapidly and it is the interplay

of infrastructure, technology and new types of service providers that will

define whether the industry is able to help its customers reduce their

logistics costs and provide effective services (which are also growing).

Changing government policies on taxation and regulation of service

providers are going to play an important role in this process.

Coordination across various government agencies requires approval

from multiple ministries and is a road block for multi modal transport in

India. At the firm level, the logistics focus is moving towards reducing

cycle times in order to add value to their customers. Consequently, better

tools and strategies are being sought by firms in order to enhance their

decision making. In this paper, I’m working on how we can reduce

the time spent by drivers on site which in turn will help us achieve

effectiveness and efficiency and hence I provide a perspective on these

issues, outline some of the key challenges with the help of secondary

information, and describe some interesting initiatives that some firms &

industries are taking to compete through excellence in managing their

logistics.

1.3 About the internship

I did my internship at Emami Agrotech Ltd., Haldia, West Bengal. It is

one of the leading Biodiesel and Palm oil manufacturers in this zone. I

was designated the Biodiesel department over here and in particular the

11 | P a g e

logistics aspect of the Biodiesel department. I worked here as a logistics

supervisor and my broader work area mostly include the supervision of

tankers right from when it enters the site; get loaded at the gantry point

and leaves for the destination. My basic responsibility at the workplace

was to see what is the time taken in each and every process and how we

can reduce the total turnaround of the drivers on site so that it inculcates

efficiency in loading of Biodiesel.

1.4 Research Objectives

The objective is twofold:

• Offer a number of concrete measures that could be taken to reduce the

time spent by a driver on a loading or unloading site. This can be

achieved by removing a number of constraints during the loading and

unloading processes, by adapting the lay-out of the site or by making use

of more adequate equipment.

12 | P a g e

• Suggest a number of actions that could be taken to improve the

treatment of the driver at loading and unloading sites.

This will ultimately result in improved efficiency, which will be of

benefit to both the sites and the transport companies, as well as in

making the profession of driver more attractive.

It goes without saying that the implementation of recommended or

suggested actions should in no way jeopardize the safety of drivers and

site personnel but to the contrary should even enhance the safety level.

1.5 Emami Agrotech Ltd.

Emami Agrotech Limited is a part of Emami group that started as a

manufacturer of toiletry and cosmetics in the year 1974 and

progressively forayed into a variety of businesses - personal and health

care products, health care services, writing materials, paper

manufacturing, retail initiative and presently into bio-diesel

manufacturing. The project activity involves production of bio-diesel in

a 300 tonnes per day (TPD) bio-diesel production facility of EBL

13 | P a g e

located at Haldia, West Bengal, India. The raw material proposed to be

used for the project activity primarily includes waste vegetable oils/fats

like used palm fatty acid distillate (PFAD), residue of refined, bleached

and deodorized(RBD) palm oil and jatropha oil for which dedicated

plantations are being developed by the project proponent as feedstock

for the project activity. Bio-diesel produced from the facility, will be

used either in pure or in blended form for both static and

dynamic purposes. This will in turn replace equivalent liquid fossil fuel

petro-diesel that would otherwise be continued to be used in

transportation and industrial sectors. Replacement of petro-diesel will in

turn reduce the GHG emissions associated with the combustion of the

fossil fuel. Thus the project activity will result in reduction of a quantum

of 127121 tonnes of CO2 per annum.

Emami Ltd.Emami Limited (Emami) was incorporated in 1983 with the name AMP

Udyog Viniyog Ltd. It converted into a public limited company under

the name Emami with effect from April 1, 1995. The company is

promoted by Kolkata-based industrialists, Mr. R.S. Agarwal and Mr.

R.S. Goenka. It is the flagship company of the Emami group, and a

leading player in the Indian fast-moving consumer goods space.

Key Highlights14 | P a g e

Strong brand presence with significant market share Emami has over 30

brands under its portfolio. The company’s products span various income

groups in both urban and rural India. Among Emami’s brands,

“Boroplus” holds ~74% market share and is the largest selling antiseptic

cream, not only in India, but also in Ukraine, Russia and Nepal. Other

brands include “Himani Fast Relief”, which holds ~13% market share in

India and “Fair & Handsome”, which holds ~84%. “Zandu Balm” holds

~61% market share, “Himani Sona Chandi Chyawanprash” ~15% and

“Boroplus” prickly heat powder holds ~17% in their respective

segments. New products, variants launched in FY10 The company

launched 2 new products in FY10 — Boroplus winter lotion and Emami

Malai Kesar soap — and a variant of the “Navratna Extra Thanda” hair

oil. The company also test-marketed the “Healthy & Fair” range of baby

products (baby oil, baby powder and baby soap) and “Emami 5-in-1”

shampoo. It launched “Emami Pure Skin” glycerine soap and

“Vasocare” petroleum jelly. The company also rejuvenated its Zandu

Balm product with innovative anti-spurious packaging and a fresh

advertisement campaign. Wide distribution network Emami’s products

are available in 425,000 Indian retail outlets. The company has 2,800

distributors, 1,500 sub-distributors, 30 depots and 6 regional sales

offices. They are present in over 2.6 million Indian retail outlets.

Internationally, its products are available in 65 countries with strong

15 | P a g e

base in Middle East, CIS and SAARC countries. The international

business contributes ~14% to the total revenue.

Key Risks• Increasing costs of raw material, transport and storage

• Competitive market conditions and new entrants to the market

• Inflationary pressures and other factors affecting demand for products

BackgroundEmami, the flagship company of the Emami group, is a leading player in

the personal and healthcare consumer products industry in India. The

company is engaged in manufacturing and marketing of health, beauty

and personal care products that are based entirely on Ayurvedic

formulations. The company has over 30 brands under its portfolio. Its

product categories consist of hair care, skin creams, soaps and lotions,

talcum powder and Ayurvedic healthcare products, with brands such as

“Navratna”, “Boroplus”, “Fair & Handsome”, “Sona Chandi

Chyawanprash”, “Zandu Balm”, “Himani Fast Relief” and “Emami

Malai Kesar Cold Cream”, etc, in the company’s stable. The company

has manufacturing plants at Kolkata (West Bengal), Guwahati (Assam),

Pantnagar (Uttaranchal), Vapi (Gujarat), Silvassa (Dadra & Nagar

Haveli) and Talasari (Maharashtra). The company has an installed

capacity of manufacturing 11,800 tonnes of cosmetics and toiletries, 16 | P a g e

47,129 tonnes of Ayurvedic medicines and 185 million Ayurvedic

tablets/ pills per annum.

Financial ProfileDouble-digit growth in top-line, operating margin up significantly

Emami’s top-line increased by 35% to Rs 9.7 billion (bn) in FY10, from

Rs 7.1 bn in FY09. Increase in revenue was primarily driven by volume

growth across products, coupled with growth in distribution.

Operating margin increased to 25.5% from 20.4% in FY09 — or 510

basis points — due to lower input cost and the company’s product mix

and value engineering initiatives.

PAT, however, fell to Rs 676 million (mn) from Rs 819 mn in FY09,

due to excess amortisation of goodwill consequent to the scheme of

arrangement with Zandu Pharmaceuticals.

Industry ProfileFMCG

Despite the global economic slowdown experienced over the last year,

India's Fast Moving Consumer Goods (FMCG) sector has continued to

show robust growth. The FMCG segment includes products like soaps,

detergents, oral care, hair care and skin care products. India's FMCG

market can be divided into two segments - urban and rural. The urban

segment is characterized by high penetration levels and high spending 17 | P a g e

propensity of the urban resident. The rural economy is largely agrarian -

directly or indirectly dependent on agriculture as a means of livelihood

with relatively lower levels of penetration and a large unorganized

sector. In the recent past the government has focused upon development

in the rural sector. This includes investments in development of

infrastructure and schemes for job creation (such as NREGA). This is

resulting in a rise in disposable incomes levels in the rural economy and

consequently in demand for FMCGs. The demand is increasing by 18%

in the rural areas and by 11% in urban areas. Over 300 million people

are expected to move up from the category of rural poor to rural lower

middle class between 2005 and 2025 and rural consumption levels are

expected to rise to the current levels in urban India by 2017. The FMCG

environment in India and overseas is competition intensive and

companies need to focus on branding, product development, distribution

and innovation to ensure their survival. Product innovations help to gain

market share while advertising and sales promotions create visibility for

the product.

18 | P a g e

2. LITERATURE REVIEW

A literature review is an analysis of existing research which is relevant

to a particular field or topic. It explains and justifies how your

investigation may help answer some of the questions or gaps in this area

of research. A literature review is not a straightforward summary and it

is not a chronological description of what was discovered in your field.

Importance of writing a literature review

19 | P a g e

New discoveries don't materialize out of nowhere they build upon the

findings of previous experiments and investigations. A literature review

shows how the investigation you are conducting fits with what has gone

before and puts it into context. A literature review gives an overview of

the field of inquiry.

A literature review demonstrates to your reader that you are able to:

• Understand and critically analyze the background research

• Select and source the information that is necessary to develop a

context for your research

• Shows how your investigation relates to previous research

• Reveals the contribution that your investigation makes to this field

(fills a gap, or builds on existing research, for instance)

• Provides evidence that may help explain your findings later.

2.1 For the purpose of this study articles from various journals and by

varied authors have been reviewed.

1. Over the past three decades the desires to establish national energy

self-reliance and to develop alternatives to finite fossil fuel resources

have resulted in the development of fuel technologies that are based on

the use of renewable agriculture based materials as feed stocks. In the

case of renewable fuels for compression ignition (diesel) engines, the

20 | P a g e

majority of efforts to date have focused on biodiesel, which consists of

the simple alkyl esters of the fatty acids found in agricultural

acylglycerol based fats and oils. Biodiesel has been shown to give

engine performance generally comparable to that of conventional diesel

fuel while reducing engine emissions of particulates, hydrocarbons and

carbon monoxide (Graboski and McCormick, 1998).

2. Information on the production, quality specifications, performance

and emissions properties of biodiesel has accumulated steadily over the

past three decades. In addition to extensive laboratory testing, millions

of miles have been traveled by test and demonstration vehicles running

on biodiesel. Announcements of its adoption by municipalities, school

districts, businesses, governmental agencies, entrepreneurs, and show

business entertainers appear on a regular basis. Thus, biodiesel

technology is making the transition from a research endeavor to a

worldwide commercial enterprise. In support of this increasing

consumption there have been substantial increases in biodiesel

production in recent years, a trend that is expected to continue. Europe

and the US are the leading biodiesel producers at this time, with

European production in 2003 estimated at 1.7 · 109 l (450 million gal)

(European Biodiesel Board, 2004), and US production in 2004 estimated

at 114 million l (30 million gal) (McCoy, 2005).

21 | P a g e

3. A supply chain involves facilities, functions, and activities for

producing & delivering product or service from suppliers to

customers. Supply chains usually include four functional

components: (1) demand planning, (2) manufacturing-planning and

scheduling, (3) supply planning, and (4) transportation planning.

Supply chain management (SCM) spans all the movement and

storage of raw materials, work-in-process inventory, and finished goods

from point of origin to point of consumption, (Chopra & Meindl, 2003).

SCM draws heavily from the areas of operations management, logistics,

procurement, information technology and strives for an integrated

approach. The main objective of SCM is to minimize supply chain costs

while keeping a reasonable service level leading to customer

satisfaction/quality/on time delivery, etc., (Christopher, 2011).

4. Logistics refers to the management of the flow of resources between

the point of origin and the point of consumption in order to meet some

requirements, for example, demand from customers or corporations. The

resources managed in logistics can include physical items, such as food,

materials, equipment, liquids, and staff, as well as abstract items, such as

time, information, particles, and energy. The logistics of physical

items usually involves the integration of information flow, material

handling, production, packaging, inventory, transportation,

warehousing, and often security. The complexity of logistics can

22 | P a g e

be modelled, analyzed, visualized, and optimized by dedicated

simulation software. The minimization of the use of resources is a

common motivation. (Mentzer, 2004).

5. Turnaround time is defined as the time taken by the transport vehicles

to complete the whole process of loading finished goods, starting from

the point of entry to its exit from the factory premises. Turnaround time

is probably the most important key performance indicator in any

logistics operation, as stated in Bolstorff (2007). A short turnaround time

is economically advantageous, making the most efficient use of time and

materials. (Bowersox, Closs, & Cooper, 2002)

6. The term supply chain management (SCM) was introduced in the

early 1980’s and subsequently attracted a great deal of attention. The

council of supply chain management professionals defines supply chain

management as encompassing, the planning and management of all

activities involved in sourcing and procurement, conversion and all

logistics management activities. According to Gunasekaran et al. (2004),

supply chain management has been a major component of competitive

strategies to enhance organizational productivity and profitability.

Supply chain management includes coordination and collaboration with

channel partners, which could be suppliers, intermediaries, third party

service providers, customers (Lambert et. al., 2006).

23 | P a g e

7. Within the organization, supply chain management refers to a wide

range of functional areas. These include supply chain management-

related such as inbound and outbound transportation, warehousing, and

inventory control. Sourcing, procurement, and supply management also

fall under the supply chain umbrella. Forecasting, production planning

and scheduling, order processing and customer service all are part of the

process as well. It also embodies the information systems necessary to

monitor these activities. Simply stated, ‘‘the supply chain encompasses

all of those activities associated with moving goods from the raw

materials stage through to the end user’’ (Zigiaris, 2000).

8. Logistics management is the governance of supply chain functions.

Logistics management activities typically include inbound and outbound

transportation management, fleet management, warehousing, materials

handling, order fulfillment, logistics network design, inventory

management, supply/demand planning, and management of third party

logistics services providers. To various degrees, the logistics

function also includes customer service, sourcing and procurement,

production planning and scheduling, packaging and assembly. Logistics

management is part of all levels of planning and execution: strategic,

operational and tactical. It is an integrating function that coordinates all

24 | P a g e

logistics activities. It also integrates logistics activities with other

functions including marketing, sales manufacturing, finance, and

information technology. The definition includes the flow of materials

and services in the manufacturing and services sectors. (Lambert et. al.,

2006)

9. The logistics as well as supply chain network design is and has been a

favourite topic of study among the supply chain research community.

Since the emergence of supply chain management (SCM) discipline in

1980s many have actively studied and rigorously researched this topic

and many facets of the field have been showcased in different hues and

cries. Since this paper discusses and proposes the design of an

innovative hybrid and flexible outbound logistics network for a

multi-objective, multi-stage (or multi-echelon), deterministic, single

period, single country, and strategic decision making problem in a

manufacturing supply chain, we consider here only the related literature

which fall under this purview. Researchers in the past have studied

OLND in supply chains under various names and terminology. To quote

them, we find in the literature terms like ‘supply chain network design

(SCND)’, ‘production-distribution network design (PDND)’

‘production-distribution system design (PDSD)’, ‘logistics network

design (LND)’, ‘outbound supply chain network design (OSCND)’,

‘supply chain configuration (SCC)’, ‘supply chain design (SCD)’, etc.,

25 | P a g e

where majority of these connote the similar meaning and concept of

planning and designing the physical structure of downstream supply

chain, with a significant variation in case of SCC and SCD which do

consider the entire gamut of supply chains i.e. from suppliers to

customers. Distribution, in plain terms, refers to the steps taken to move

and store a product from the manufacturer stage to a customer stage in

the supply chain. Distribution is a key driver of the overall profitability

of a firm because it affects both the supply chain cost and the customer

experience directly (Chopra et al. 2008).

10. Chandra and Sastry (2004) have pointed towards two key areas that

require attention in managing the logistics chains across the Indian

business sectors – cost and reliable value add services. Logistics costs

(i.e., inventory holding, transportation, warehousing, packaging, losses

and related administration costs) have been estimated at 13-14 per cent

of Indian GDP which is higher than the 8 per cent of USA’s and lower

than the 21 per cent of China’s GDP (Sanyal, 2006a). Service reliability

of the logistics industry in emerging markets, like India, has been

referred to as slow and requiring high engagement time of the

customers, thereby, incurring high indirect variable costs (Dobberstein

et. al, 2005).

2.1 Players in the biodiesel market in India

26 | P a g e

1. Shirke Energy Private Limited, Pune, Maharashtra

2. Universal Biofuels Private Limited, Hyderabad

3. Biodiesel Technologies, Kolkata

4. The Southern Online Biotechnologies Ltd., Hyderabad

5. Praj Industries Limited, Pune

6. Emami Agrotech Limited, Haldia, West Bengal

7. Bharat Renewable Energy Limited, Lucknow

8. Chemcel Biotech Limited, Vijayawada, Andhra Pradesh

2.2 The Biodiesel Reaction

For the reasons stated above, vegetable oil is transformed into biodiesel.

The components that support combustion in the oil are the basis for

biodiesel. These components, called fatty acids, have different properties

that can be characterized by the number of hydrogen and carbon atoms

and the way these atoms are bonded together.

27 | P a g e

Table 1 shows the melting point, boiling point, and names of the most

common fatty acids. It is important to note that vegetables oils are

usually composed of several fatty acids. This means that the properties

of an oil will be a mixture of the properties of the fatty acids it contains.

It follows that the biodiesel made from the oil will also exhibit a mixture

of these properties.

Common vegetable oils, along with the percentage of each type of fatty

acid, are shown in Table 2. Also affected by the different molecule

arrangements are ignition quality, low temperature viscosity, NOx

28 | P a g e

emissions and the stability of the fuel. Fatty acids with one double bond

(:1) are considered the best overall choice for biodiesel.3

The yellow grease listed at the top of Table 2 refers to most waste

vegetable oil available at restaurants. The class “yellow” is an industry

rating based on the quality of the grease. What is important to note in

this table is that the fatty acid composition of yellow grease is estimated.

The actual composition of yellow grease will reflect the source of the

original oil.

29 | P a g e

The basic biodiesel reaction is shown in Figure 1. This reaction is

known as transesterification (do-it-yourselfers often call it the one-step

process). The triglyceride is vegetable oil. R1, R2 and R3 represent any

of the fatty acids listed in Table 1. Reacting one part Vegetable oil with

three parts Methanol gives three parts Methyl Esters (Biodiesel) and one

part Glycerol. In practical terms, the volume of Biodiesel will be equal

to the input volume of vegetable oil.

30 | P a g e

Figure 1. Transesterification Reaction.

Notice in Figure 1 the addition of a catalyst. In theory, the catalyst is not

consumed by the reaction and is removed in the glycerol and the wash

water.

1.1 High Free Fatty Acid Grease

In the case of using waste vegetable oil (yellow grease) as a feedstock,

free fatty acids (FFA’s) may pose a problem. A free fatty acid is one that

has already separated from the glycerol molecule. This is usually the

result of the oil breaking down after many cycles of use. FFA’s create 3

major problems.

- More catalyst will need to be used leading to higher cost

- Soap (fatty acid salt) is formed, making washing the finished

product more difficult.

31 | P a g e

- Water is formed which will retard the main reaction

- The FFA’s are not converted into fuel, reducing the yield

Figure 2 shows the reaction of FFA’s and the catalyst NaOH.

Figure 2. Formation of Soap.

When the oil has less then 2.5% FFA, the problems listed previously are

negligible by using the single step (transesterification) only. Others have

reported good results up to 4% FFA. 2.2 Treating High FFA Waste

32 | P a g e

Vegetable Oil

There are several methods to treat high FFA waste vegetable oils in

small-scale systems. The easiest is to mix the high FFA oil with low

FFA oil. This will work for an occasional high FFA batch. Other options

require esterification (two-stage process) or intentionally make soap.

These options are:

- Add catalyst and water to change FFA to soap, and remove the soap

- Add acid and a large percentage of Methanol to covert FFA to

usable product

- Add acid, heat and a smaller percentage of Methanol to covert FFA

to a usable product

Adding catalyst and water to high FFA oil is the easiest solution, but it

also has some disadvantages. The percentage of feedstock that will be

lost is higher then the percentage FFA. 100 gallons of waste vegetable

oil will loose more than 10 gallons if it is 10% FFA. When this

procedure is carried out in the reaction tank, the resulting water and soap

created will collect above and below the oil. I found it time consuming

to skim the soap off of the top of the oil.

Adding acid and large quantities of methanol to the oil is the most

common method among small-scale producers. The disadvantage to this

method besides time is the cost of the methanol. For 10% FFA, over

seven gallons of methanol would be needed for the first stage to treat 40

33 | P a g e

gallons of oil. This is in addition to the eight gallons required for the

second stage. A methanol recovery system could returnthree gallons

from the first stage and 1½ gallon from the second, but this requires

additional time and energy. This option requires an extra tank.6

Adding acid with high heat (90 degree C) and smaller quantities of

Methanol is not widely used. WMRC is currently developing a bench

scale process to test the feasibility.

1.2 Observations on obtaining waste vegetable oil

Waste vegetable oil (WVO) can be acquired from grease recyclers or

directly from grease containers behind restaurants. Although it seems

that free (from restaurant grease containers) as opposed to $1 per gallon

(Dec, 2005 prices from grease recyclers) is a better deal, there are other

facets to take into account.

When obtaining grease from containers, note that Solids and impurities

will collect on the top and bottom of the oil. Better quality oil can be

found in the middle. Generally the clearer the oil, the better the quality.

Each time the center oil is removed, the concentration of contaminants

increases. Eventually, there will be only low quality oil in the container.

If this happens, it is best to wait until the grease recycler has dumped the

container before collecting oil again. Using this method, WMRC has not

had issues finding grease with FFA less then 2.5%. It is also important to

34 | P a g e

note that manual grease collection is a challenge in the winter. The cold

weather will solidify the grease.

Grease recyclers deal in large volumes of oil. Most will only sell

tankerloads (9,000 gallons) and not 55 gallons to individual customers.

The advantage of processed WVO is that it is free of solids and water. It

is also kept heated so that it is easy to transfer from one container to

another. Processed WVO has a surprisingly high percentage FFA.

Yellow grease from local recyclers (central Illinois) runs in the 8-15%

range in the winter and 12-20% in the summer. The rise of percentage

FFA in the peak summer months compared to the winter is attributed to

constant heat from the summer weather. Because processed WVO has an

FFA above 2.5%, it will require additional processing as discussed in the

next section.

35 | P a g e

2.3. Biodiesel Processes

4.1 Process flow chart

Implementing the previously described processes results in the process

flow shown in Figure 3.

36 | P a g e

Figure 3. Process flow for Biodiesel process.

This process has two separate starting points. If vegetable oils can be

obtained that are below 2.5% FFA, the esterification step is not

necessary.

4.2 Process Details

The processes described here are used by WMRC in a controlled lab

environment. We strongly recommend that you read and understand

handling requirements of all chemicals used in this report. Take time to

do additional research and obtain a thorough understanding of the

processes involved before proceeding.

4.2.1 Heating of Oil

In order to speed up the reaction, the oil must be heated. The ideal

temperature range is 120deg F to 140deg F. The reaction can take days

at room temperature and will be inhibited above 140deg F. Heating with

electric elements is usually the easiest way to bring the oil up to

temperature. Equation 1 will give an estimate for the amount of time it

takes to heat the oil.

37 | P a g e

It is important to stir the oil as it is heated. This will result in a more

even heating and reduce the temperature of oil exposed directly to the

heating element.

4.2.2 Titration

In order to determine the percent of FFA in the oil, a process called

titration is used. The vegetable oil is first mixed with methanol. Next, a

mixture of Sodium Hydroxide (NaOH) and water is added until all of the

FFA has been reacted. This is confirmed by checking the pH of the

mixture. A pH of about 9 signifies all of the FFA has been reacted.

Virgin vegetable oil from the same feed stock will usually titrate at

approximately the same level, so checking every batch is not necessary.

Waste Vegetable oil feed stocks will vary greatly. Every batch must be

titrated.

The following items are needed to perform an accurate titration.

- Two 50mL flasks

- One 5mL graduated pipette

- A 1mL dropper

- A 10mL dropper

- A mixture of NaOH and water in 0.1% concentration

- pH solution and color chart

The NaOH water mixture can be prepared by adding 1 gram of NaOH to

1000ml distilled water. The mixture will be more accurate if it is first

38 | P a g e

made as a 1% solution (10grams NaOH to 1000ml water). Next, add

100mL of the 1% solution to 900ml of distilled water. This will make a

0.1% NaOH solution.

The process for titration is as follows:

1) Place 10mL of Methanol in a 50ml flask

2) Add 1mL of vegetable oil (mix the oil thoroughly prior to drawing

1ml)

3) Mix the oil with the Methanol using the squirting action of the

dropper

4) Add the ph indicator solution (usually 3 drops, check instructions)

5) Place 15ml 0.1% NaOH (know as titrant) solution in a 50ml flask

6) Draw exactly 5ml of the NaOH solution into the graduated pipette

7) Add the 0.1% NaOH to the methanol/oil mixture one drop at a

time. Mix the solution using a swirling action between the drops.

Using the eyedropper to mix the solution may help if the oil forms

drops in the bottom of the flask.

8) Continue to add 0.1% NaOH until a pH of 9 (blue-green color) is

reached. This may require more than 5ml. Refill the pipette and

continue. Note the amount in ml that was required.

9) Look up the corresponding amount of NaOH required for the entire

batch in Table 3. Multiply the amount by the number of gallons of

oil to obtain the required amounts.

39 | P a g e

4.2.3 Mixing of Methanol and Catalyst

The purpose of mixing methanol and the catalyst (NaOH) is to react the

two substances to form Methoxide. The amount of Methanol used

should be 20% of the volume of the oil. Methanol and NaOH are

dangerous chemicals by themselves, with Methoxide even more so.

None of these substances should ever touch skin. Vapors should NOT

be inhaled. Gloves, goggles and ventilation are required at ALL TIMES

when working with these substances.

40 | P a g e

NaOH does not readily dissolve into Methanol. It is best to turn on the

mixer to begin agitating the Methanol and slowly pour the NaOH in.

When particles of NaOH cannot be seen, the Methoxide is ready to be

added to the oil. This can usually be achieved in 20 –30 minutes.

4.2.4 Draining of Glycerol

After the transesterification reaction, one must wait for the glycerol to

settle to the bottom of the container. This happens because Glycerol is

heavier then biodiesel. The settling will begin immediately, but the

mixture should be left a minimum of eight hours (preferably 12) to make

sure all of the Glycerol has settled out. The Glycerol volume should be

approximately 20% of the original oil volume.

Figure 4 and Figure 5 show the difference in viscosity and color between

the two liquids. The object is to remove only the Glycerol and stop when

the biodiesel is reached. Glycerol looks very dark compared to the

yellow biodiesel. The viscosity difference is large enough between the

two liquids that the difference in flow from the drain can be seen.

41 | P a g e

4.2.5 Washing of Fuel

The washing of raw biodiesel fuel is one of the most discussed subjects

among do it yourselfers. The purpose is to wash out the remnants of the

catalyst and other impurities. There are three main methods:

- Water wash only (a misting of water over the fuel, draining water

off the bottom)

- Air bubble wash (slow bubbling of air through the fuel)

- Air/water bubble wash (with water in the bottom of the tank,

bubbling air through water and then the fuel)

Which method works the best is dependent on the quality of the fuel.

The method used at WMRC for all fuel is a combination of water

42 | P a g e

washing and air bubble washing. Water is misted above the fuel at a rate

of 5 gallons/hour. (The rate really depends on the diameter of the tank.

The water should not break the surface of the biodiesel). The amount of

wash water should equal the amount of oil, and can be drained

throughout the washing process.

After the water is drained, the air washing process can start. At this

point, the biodiesel is usually a pale yellow color. Air should be bubbled

through the biodiesel mixture for approximately 8 hours. The bubbling

should be just enough to agitate the biodiesel surface. A final drain of

accumulated contaminants is done immediately after the air bubble wash

is finished. The fuel is now ready for use.

4.3 Transesterification (biodiesel reaction for oils < 2.5%FFA)

The transesterification process can be summarized in the following

steps:

1) Heat oil to 130deg F

2) Titrate the oil (determine how much sodium hydroxide to add)

3) Mix the sodium hydroxide and methanol to make methoxide

4) Mix the methoxide with the oil

5) Drain glycerol

6) Wash biodiesel

43 | P a g e

A detailed process and timeline are shown in figure 6.

44 | P a g e

4.4 Esterification of (pretreatment where FFA > 2.5%)

Esterification is done as a pretreatment step to the transesterification

procedure when the FFA content is higher then 2.5%. In practice, it is a

bit more complicated to implement then transesterification. A byproduct

of the process is water, which impedes the reaction. As there is more

FFA in the oil, more methanol percentage wise must be added to

compensate for the water. To overcome this, industrial producers use

counter current reactors that enable a continuous flow of high FFA oil in

and water out.

Esterification is not covered in this document because it has not been

thoroughly tested by WMRC.

5.0 Materials and Costs

5.1 Vegetable Oil Feedstocks

Virgin vegetable oils are the main feedstock for most biodiesel plants in

the U.S. Virgin oil varies little in FFA from batch to batch, so the

process can be repeated without change. Table 4 shows the amount of oil

that can be expected from different types of oilseed plants along with

estimated costs4. This is not an inclusive list, but contains the main

oilseed crops that can be grown in the Midwest U.S. region. For

reference, processed waste vegetable oil sells for $1 per gallon.

45 | P a g e

46 | P a g e

It is important to note that the last two columns of Table 4 show

different costs per gallon depending on the type of extraction used.

Columns 3 and 11 represent cold pressing, which is the normal process

used in small-scale operations. It is essentially a manual process where

the oilseed is crushed, separating the oil and expelling the solid as a

press cake. Column 3 shows that this method removes approximately

60% in most instances. The amount of oil removed is dependent on the

shell on the seed.

Hexane extraction is the method used by large-scale operations1.

Hexane is a hazardous air pollutant and also very flammable. It can be

found in gasoline. The facilities that use it for oil extraction have

recovery methods that keep it from escaping into the atmosphere. This

method is not considered to be adaptable to home use.

Comparison of prices in columns 11 and 12 to current gas prices would

indicate that biodiesel from local oilseed crops is not feasible. However,

these prices do not take into account the sale of the meal. Soybean meal

does have a market in Illinois, and when this is subtracted from the cost

of soybeans the price per gallon is a more reasonable $1.61. Table 5

shows the cost breakdown for soybeans, based on 7.6 lbs of oil per

gallon.

47 | P a g e

Other meals are valuable as livestock feed. This is particularly true with

cold pressed meals. The remaining oil contains nutrients and also

reduces the dust during handling.

5.2 Cost of Reactants

The costs of Sodium Hydroxide and Methanol vary greatly according to

purchase quantities and location of purchase. For this reason, Tables 6

and 7 have been created to quickly determine the cost of a batch of

biodiesel. All values are based on one gallon of oil.

Example 100 gallons yellow grease

$1/gallon =>Titration 2mL, NaOH $4/lb = 0.18 * 100 =>Methanol $3.50/gal = 0.70 * 100 =>Total =>

48 | P a g e

49 | P a g e

5.3 Glycerol

Glycerol is a byproduct of the biodiesel reaction. Although it is well

known that glycerol is used in soap, medicines and cosmetics, the

glycerol we are dealing with is not of the proper purity. Up to 20% is

methanol and it will contain other impurities such as lye2. The best way

to dispose of the glycerol is through a wastewater treatment plant. Any

hauler with a dumping permit (septic tank cleaners) should be able to

take the glycerol. Fees are very reasonable for this service, but will vary

over a wide range due to distance and ease of loading at the customer

site.

50 | P a g e

51 | P a g e

A complete transesterification biodiesel system is shown in Figure 7. All

tanks in this system can be constructed from polyethylene or stainless

steel. Steel is also an option for all except the catalyst reaction tank.

Usually polyethylene is used because of the low cost and availability.

Starting from the left, the first tank is the oil storage tank. The sizing of

this tank is dependent on the amount of oil that will be received at one

time. If oil is purchased by the tankerload, sizes up to 10,000 gallons

may be required. Another option when dealing with small quantities is to

store the oil in 55-gallon drums as needed instead of using a permanent

tank.

The second tank from the left is the reaction tank. This is most important

part of the system. The reaction tank requires either a mixer or pump to

agitate the mixture when a reaction is taking place. It also may require

heating, depending on if heating is done in the oil storage tank.

Polyethylene will stand the maximum 140 degrees F temperature,

however extreme care must be taken when using a heating element.

Steel or Stainless is preferred for this component.

The sizing of the reaction tank is estimated at 4.5 times the daily fuel

usage. This comes from two 8 hours days to make the fuel plus one day

buffer. The extra 1.5 times is to leave extra room for the mixing and the

wash water. Not allowing enough room for the wash water would

require the water to be drained often.

52 | P a g e

The catalyst reaction vessel is the smallest in the system. It is also shown

elevated above the top of the biodiesel reaction tank. It is important to

locate the catalyst tank higher to avoid the contents of the main reaction

tank from contaminating it. Some systems mount the catalyst tank lower

and use a check valve. This works to a point, but many times the valve

will stick due to catalyst residue. It is also harder to control the flow with

the check valve setup.

Sizing of the catalyst-mixing tank is 25% of the main reaction tank or

40% of the amount of oil used. The catalyst tank is filled to 20% of the

volume oil used, but because the mixture is hazardous it is best to double

the size to avoid spillage or splashing. A mixer must be used in this tank.

The fuel storage tank can be any size. It is best to locate it away from the

other equipment so that is will not be accidentally damaged.

The glycerol storage tank is not required, but is the best solution when

the glycerol is to be picked up by a waste hauler. The tank should be

sized according to what the waste hauler can move in a load. The

charges are generally the same regardless of how full the tanker is.

Location should be determined by ease of access as haulers charge by

the amount of time to load the tanker.

53 | P a g e

6.0 Safety and Environment

Biodiesel producers are regulated by two entities: OSHA and the

environmental protection agency. OSHA’s concern is with the

environment for the workers. It considers biodiesel production facilities

to be chemical plants. The handling/storage of class A flammable liquids

(methanol) can be found under section 29.1910.106. Some of the rules

that may apply are:

- Methanol storage containers must be metal, grounded, use masonry

supports and must not spill contents if connectors burn through

- Space required around tanks for firefighting access - Explosion

proof electrical wiring - No other operations in the room with the

equipment. The environmental protection agency (EPA) deals only with

the protection of the environment. In the case of biodiesel, most of the

concern is about containment from spills of the various fluids.

54 | P a g e

3. RESEARCH METHODOLOGY

3.1 Introduction to Research Methodology The design of any study begins with the selection of a topic and a

research methodology. The word “research” is used to describe a

number of similar and often overlapping activities involving a search for

information. It is basically gathering and analyzing a body of

information or data and extracting new meaning from it or developing

unique solutions to problems or cases. The word “methodology” can

properly refer to the theoretical analysis of methods appropriate to a

field of study or to the body of methods and principles or rules from

which specific methods or procedures may be derived to understand

different situations within scope of a particular discipline. Therefore,

research methodology refers to the way in which the data are collected

for the research project.

My Research data includes qualitative and quantitative data. In this

research paper, quantitative data , primary data and secondary data have

been involved.

QUANTITATIVE DATA- Information that can be counted or

expressed numerically. This type of data is often collected in

experiments, manipulated and statistically analyzed. Quantitative data

55 | P a g e

can be represented visually in graphs and charts. The behaviour of

consumers is recorded through it.

QUALITATIVE DATA - Qualitative data is extremely varied in

nature. It includes virtually any information that can be captured that is

not numerical in nature

3.2 Data Collection Methods Depending on the nature of the information to be gathered, different

instruments are used to conduct the assessment: forms for gathering data

from official sources such as police or school records;

surveys/interviews to gather information from youth, community

residents, and others; and focus groups to elicit free-flowing

perspectives. PRIMARY DATA - Primary data is data gathered for the first time by

the researcher. It is collected to address the specific issue or problem

under study. These data can be gathered internally or externally though

surveys, observations, experiments, and simulation.

SECONDARY DATA-Secondary data is the data that have been

already collected by and readily available from other sources. Such data

56 | P a g e

are cheaper and more quickly obtainable than the primary data and also

may be available when primary data cannot be obtained at all.

SAMPLING

A process used in statistical analysis in which a predetermined number

of observations will be taken from a larger population. The methodology

used to sample from a larger population will depend on the type of

analysis being performed, but will include simple random sampling,

systematic sampling and observational sampling.

TOOLS

Tools used in Research Methodology are as follows:

Questionnaire

It is a set of printed or written questions with a choice of answers,

devised for the purposes of a survey or statistical study.

Pie Diagram

A pie chart (or a circle graph) is a circular chart divided into sectors,

illustrating numerical proportion. In a pie chart, the arc length of each

sector is proportional to the quantity it represents. Pie charts are very

widely used in the business world and the mass media. Pie chart was

used to find the percentage of different factors and other asked

questions.

57 | P a g e

Column Chart

The column chart consists of a group of equi-spaced rectangular bars,

one for each category of given statistical data. The columns, starting

from a common base line, must be of equal width and the length

represents the values of statistical data. The column chart was used to

show the frequency of crates of different soft drink brands kept by

retailers.

58 | P a g e

4. DATA ANALYSISPDCA Cycle

PDCA Cycle is the core of the whole analysis leading to the execution of

the project involving reduction of total turn-around time for outbound

logistics (finished goods only). The concept of (Plan, Do, Check, Act)

PDCA is based on the scientific method, as developed from the work of

Francis Bacon. The scientific method can be written as

“hypothesis”–”experiment”–”evaluation” or plan, do and check. The

father of Statistical Quality Control Walter Shewhart described

manufacture under “control”—under statistical control—as a three step

process of

specification, production, and inspection. He also specifically

related this to the scientific method of hypothesis, experiment, and

evaluation. Shewhart (1980) says that the statistician “must help to

change the demand [for goods] by showing how to close up the

tolerance range and to improve the quality of goods.” Clearly, Shewhart

intended the analyst to take action based on the conclusions of the

evaluation. PDCA was made popular by Dr W. Edwards Deming,

who is considered by many to be the father of modern quality control;

however, he always referred to it as the “Shewhart cycle”. Later in

Deming’s career, he modified PDCA to “Plan, Do, Study, Act” (PDSA)

because he felt that “check” emphasized inspection over analysis.

59 | P a g e

Deming preferred plan, do, study, and act because “study” has

connotations in English closer to Shewhart’s intent than “check”.

Rate of change, that is, rate of improvement, is a key competitive factor

in today’s world. PDCA allows for major “jumps” in performance

(“breakthroughs” often desired in a Western approach), as well as

Kaizen (frequent small improvements). In the United States a PDCA

approach is usually associated with a sizable project involving numerous

people’s time, and thus managers want to see large “breakthrough”

improvements to justify the effort expended. However, the scientific

method and PDCA apply to all sorts of projects and improvement

activities.

The steps taken to implement PDCA cycle are shown in Figure 2:

60 | P a g e

Plan

The objective of the process was to analyze the entire data for a suitable

sample size of tankers and suggest practical ways of implementing the

recommendations in phases before the start of the loading.

Do

A total of 50 tankers were taken for a period of ten days. The average

number of tankers entering the premises to be loaded in a day was 6,

with a deviation of five tankers. With the help of statistical tools, we

determined the sample size to be five tankers per day (with 95%

confidence level, where minimum samples required was four). The

collected data was analyzed on the basis of time taken in each stage of

61 | P a g e

the outbound logistics, with the help of Pareto chart and other statistical

tools.

Check

The results were then analyzed. Charting data make it much easier

to see trends and to convert the collected data into information.

This information is then used in the next step “ACT”.

Act

After analyzing the data, several suggestions were given on reducing the

turnaround time mainly by targeting the bottlenecks, i.e. documentation

and processing time & idle time before loading. The changes to be

applied were determined that included improvement of the process.

Overview of the Sampling Plan

Population

There are two warehouses, i.e. biodiesel and palm oil, where the finished

goods are stored and then loaded into the tankers. Two types of Tankers

are used to supply goods to various distribution centers around India,

namely Railway tankers and Other Marketing Companies(OMC).

Sampling

Sampling is done in two stages. Firstly, we are using random sampling,

to select strata, which are:

Railway Tankers, and

62 | P a g e

OMC’s

After selecting our strata we used convenient sampling to select the

tankers. They were selected on the basis of:

Product to be loaded

Outer Condition

Cleansed from inside

Tankers to be loaded in 1st and 2nd shift.

Sample Size

A total of 50 tankers was taken for a period of 10 days, among which

Number of Railway Tankers : 42

Number of OMC’s: 8

Analysis of the Data

The data of fifty tankers, related to time consumed by each of the 12

activities pertaining to outbound logistics in a period of ten days, was

collected and analyzed by using various tools, one of which is Pareto

Chart, (Asaka, 1990). This chart helps to find out the vital few

as compared to the trivial many. The top two bottleneck processes were

identified from analysis of Pareto charts as shown in Figure 3.

63 | P a g e

4.1Overall Findings

Documentation and the processing” time consuming close to

twice the time of loading.

This is followed by the “idle time before loading”.

Shift change-over and breaks to be streamlined with loading

operations.

Pick slip generation not in line with vehicle availability, slips

generated for vehicles which aren’t available while no slips for

those available in yard. The data was analyzed further on the

basis of departments, i.e. Biodiesel department and Palm oil

department.

Biodiesel Department

64 | P a g e

Some of the challenges which were faced regarding the outbound

logistics (finished goods) in the Biodiesel department, along with the

Pareto chart, are discussed below. Figure 4 displays the Pareto

Chart showing the time required for different activities in the

outbound logistics. The Pareto chart indicates that the time

spent on two activities namely documentation and processing

followed by idle time happen to be major time consumers.

Challenges faced

In case of ad-hoc issues such as delay in generation of pick slip

(quality issue) cannot be predicted and hence vehicles should not

be allowed to enter the premises under such circumstances.

Delay in reporting by the workers at the time of shift change and a

longer break while sometimes is the case for security guards too.

No empty slots for goods loading, which increases the idle time

before loading.

Vehicles loaded in the evening / night are cleared only the next

day morning and some are extended till noon awaiting completion

of documentation, loading receipt etc.

Documents are prepared in the coffee warehouse and shunted

every time resulting in more delay.

Transport representatives are yet to understand the Turnaround

time and usually don’t take the same on priority.

65 | P a g e

Implementation

On analyzing the data, the problem areas identified are as following:

Documentation and Processing time

Idle time before loading

On identification of the above mentioned problem areas, an improved

process was implemented on a sample of four tankers. On the basis of

the data collected after this implementation, those improved steps were

suggested to the department for reducing the total turnaround time.

Steps Implemented

The steps implemented to attack the above mentioned problem areas,

and to decrease the total turnaround time are as following:

1. Pick slip was handed over to the tanker driver at the entry gate, after

the security personnel checks all the documents.

2. The tanker driver hands over the pick slip to the security personnel at

the warehouse for batch identification

3. Challan generation was initiated after the completion of loading

4. The challan and other documents, except Loading Receipt, are handed

over to the driver along with the keys by the security personnel.

5. The driver was allowed to exit the factory premises with the challan,

checklist and count slip.

6. Loading Receipt is collected by the driver after exiting the factory

premises. These steps were implemented keeping in minds all the rules

and regulations required to be followed.

66 | P a g e

Improvement Achieved

On implementing the previously mentioned steps, and proper

supervision, substantial improvements were noticed. The time taken by

the two bottlenecks was decreased to a substantial level, along with the

total turnaround time. A comparison of the time taken before and after

improvement is shown the Table 1.

67 | P a g e

On implementing the suggested steps mentioned above, following

improvements were seen:

Around 80% reduction in idle time before loading [(52.76-

10.50)/52.76]

Around 92% reduction in documentation and processing time

[(76.98-6)/76.98)]

The total turnaround time was reduced to 125 minutes, a drop of

around 47% [(238.18- 125.5)/238.18]

4.2Recommendations

After the completion of the study and pilot run, following suggestions

were given for decreasing the total turnaround time of the outbound

logistics:

Pick slip to be handed over at the entry gate to the driver so as to

ensure that all vehicles come inside the factory with a loading

advice.

Prior intimation to tanker drivers about tentative completion of

load so that they are ready for loading.

Bill generation and other documentations like challan, etc. can

start as soon as the loading ends.

Challan and other documents for biodiesel section to be printed at

the dispatch office .

68 | P a g e

Handing over the bill and other documents to the tanker driver,

after the completion of loading (or tarpaulin dressing), by the

security personnel.

Loading Receipt should be collected by the driver only once the

vehicle exits the premises.

Decrease in maximum number of vehicles in the factory premises

from 10 to 6, at any point of time.

Coordination between FG supervisor and the security personnel

to be improved for effective implementation.

Document generation during 3rd shift to avoid overnight stay of

the loaded tankers.

An extra worker for tarpaulin dressing, probably all logistics

representatives can poll in one person who can act as a common

resource.

Assumptions/Limitations

Understanding the sequence of the process at times was not easy as

different people had different versions of their own for the same

activity. However, repeated discussions with the concerned people

including our organization guides was helpful in the matter, clarifying

our doubts just at the right time.

69 | P a g e

5. CONCLUSIONEmami Agrotech Ltd. has been fortifying its place as a leader in

nutrition, health and wellness for more than decades in India. SCM has

played a vital role in meeting the target volumes for market expansion.

The whole exercise of the project to reduce the turnaround time for

finished goods was crucial from this angle. With the increasing number

of volume of tankers each year, it was almost imperative to improve

the efficiency of the process so that more number of tankers could be

pushed to various region for Biodiesel and throughout India for Palm

oil. Simple elimination of steps by virtue of segregation of

responsibilities between logistics representatives and transporter agents

was quite fruitful in improving the situation during the pilot run. It could

reduce the average turnaround time to nearly 3 hours if these steps

70 | P a g e

are implemented before the start of the peak season. There are many

challenges in day to day work of the SCM department that needs to be

addressed and it involves all the people starting from the top

management to the workers at the loading bay, for a better coordination

and timely information dissipation can always help improve the

productivity and service commitments. Once the recommendations are

religiously implemented and strictly enforced on a full time basis, the

company will definitely help improve the business process and

smoothen the likely fluctuations.

6. ANNEXURE

Turnaround Time

71 | P a g e

72 | P a g e

73 | P a g e

74 | P a g e

75 | P a g e

76 | P a g e

77 | P a g e

78 | P a g e

7. BIBLIOGRAPHY Asaka, T. (1990). Handbook of quality tools, the Japanese

approach. Cambridge, Mass.: Productivity Press.

Bolstorff, P. (2007). Supply Chain Excellence. AMACOM.

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2002). Supply

chain logistics management. Boston, Mass.: McGraw-Hill.

Chopra, S & Meindl, P. (2003). Supply Chain Management:

Strategy, Planning and Operation, (2nd Edition). USA, Prentice

Hall.

Christopher, M. (2011). Logistics & supply chain management

(4th ed.). Harlow, England: Financial Times Prentice Hall.

Mentzer, J. T. (2004). Supply chain management. Response

Books, New Delhi.

Shewhart, W. A. (1980). Economic Control of Quality of

Manufactured Product , USA, American Society for Quality

Control.

Acharya, R.C. (2006a) “Railways Heavy Task,” Economic Times,

20 November.

Acharya, R.C. (2006b) “Concor: Miles Ahead on Multimodal

Track,” Economic Times, 18 December.

ACMA report (2005) “Indian Auto Industry- Status, Prospects and

Challenges,” Retrieved February, 2005 from www.acmainfo.com.

79 | P a g e

Ahya, C. (2006) “The Retail Supply Chain Revolution,” Economic

Times, 7 December.

Baxi, S. (2006) “It’s a Capital Idea,” Economic Times, 20

December.

American Biofuels Association & Information Resources, Inc.,

1994. BIODIESEL—A Technology Performance and Regulatory

Review. National SoyDiesel Development Board, Jefferson City,

MO, p. 118.

Anonymous, 2002. Standard Specification for Biodiesel Fuel

(B100) Blend Stock for Distillate Fuels, Designation D 6751-02.

American Society for Testing and Materials, West Conshohocken,

PA.

Vik, Dias, Pereira, Oliveira and Abreu. 2010. Using Simulation for

the Specification of an Integrated Automated Weighing Solution in

a cement plant. In Proceedings of the Winter Simulation

Conference 2010, December 5-8, Baltimore, Maryland.

Taylor G.2008. Introduction to Logistics Engineering, New York,

Taylor & Francis Group.

M.N Chary.2006.Production and Operations Management, Tata

McGraw Hill.

Jerry Banks.2008.Discrete – Event System Simulation, Prentice –

Hall of India.

80 | P a g e

J. Van Gerpen, B. Shanks, and R. Pruszko, D. Clements, and G.

Knothe, “Biodiesel Production Technology”, Report from Iowa

State University for the National Renewable Energy Laboratory,

NREL/SR-510-36244, July 2004.

Jon Van Gerpen, “Business Management for Biodiesel Producers”,

Report from Iowa State University for the National Renewable

Energy Laboratory, NREL/SR-510-36242, July 2004.

K. Shaine Tyson, Joseph Bozell, Robert Wallace, Eugene

Petersen, Luc Moens, “Biomass Oil Analysis: Research Needs and

Recommendations”, National Renewable Energy Laboratory,

NREL/TP-510-34796, June 2004.

Steven Hobbs, “Bio-diesel, farming for the future”, Presentation to

the 11th Australian Agronomy Conference, 2003.

Tickell, Joshua, 2003. “From the Fryer to the Fuel Tank”,

Bookmasters: Ashland, OH.

81 | P a g e