Wastage Control On Oil Packing

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Vinod Gupta School of Management, IIT Kharagpur Dabur India Ltd.

Summer Internship Report on Waste Control on Anmol Coconut Oil Packing Chain completed at

Dabur India Limited, Sahibabad.

This report is submitted in partial fulfillment of the requirements for the Summer Internship Evaluation in

the Second Semester at Vinod Gupta School of Management, IIT Kharagpur (2011-2013).

Under the Guidance of

Mr. Sukhveer Singh

Production Manager, Dabur India Ltd.

Under the Faculty Guidance of

Prof. Parama Barai

VGSoM, IIT Kharagpur

Submitted by

Madhvi Agrawal

11BM60038


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Acknowledgement

I wish to thank Dabur India Limited for giving me an opportunity to work at their

Manufacturing unit at Sahibabad as a part of my Summer Internship during the Master of Business

Administration course at Vinod Gupta School of Management, IIT Kharagpur, the Internship period

being May 9th

2011 to 8th

July 2011.

I would like to thank my College Guide, Prof. Parama Barai for helping me sail smoothly

through the project that I have worked at. I also want to convey my sincere, heartfelt thanks to my

Guide at Dabur India Ltd. Mr. Sukhveer Singh, Manager Production. Without his assistance, it

would not have been possible to complete my project in a span of two months.

I would also like to thank all the concerned people of Dabur India Ltd. family for their

cooperation and Mr. B. C. Verma, Asst. Officer- Production, in particular, for his readiness in

sharing his knowledge about Dabur India Ltd. and the FMCG sector in general.

I would also like to thank my parents, friends, other colleagues and my college faculty who

have always been very cooperative whenever I have needed them. In the end I would like to thank

all those who have been associated with my Summer Internship and this Project Report.

Madhvi Agrawal


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Table of Content


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Executive Summary

The main aim of this report is to discuss the project that was completed at Dabur India Limited as a

part of the Summer Internship.

The report covers the first project which aimed to identify the synergy areas in Logistics in

the recent acquisition of Paras Pharma Limited. Leveraging, on the increased volumes, post the

acquisition, it was desired to identify the main areas of improvement and consequently quantify the

potential financial benefits.

This report provides a background to the said problem, identifies objectives, explains the

methodology and finally tabulates the results as per the intended objectives.

The report follows a structured approach to the problem by listing out the objective,

background, literature, methodology and discusses the results obtained in detail, while making

appropriate suggestions.


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Company Background

Dabur India Ltd. is one of Indias leading FMCG Companies with Revenues of US$1 Billion (over

Rs 5,283 Crore) & Market Capitalization of US$4 Billion (Rs 20,000 Crore). Building on a legacyof quality and experience of over 127 years, Dabur is today Indias most trusted name and the

worlds largest Ayurvedic and Natural Health Care Company with a portfolio of over 250

Herbal/Ayurvedic products.

In FMCG sector, Dabur operates in Hair Care, Oral Care, Health Care, Skin Care, Home

Care and Foods. Its FMCG portfolio includes five flagship brandswith distinct brand identities. The

company has a wide distribution network, covering over 2.8 million retail outlets with a high

penetration in both urban and rural markets.

Dabur's products also have a huge presence in the overseas markets and are today available in over

60 countries across the globe. Its brands are highly popular in the Middle East, SAARC countries,

Africa, US, Europe and Russia. Dabur's overseas revenue today accounts for over 30% of the total

turnover.

Vision

Dabur is committed to its vision of being dedicated to the health and well being of every

household. Our strategic intent is to significantly accelerate profitable growth. To do this, we will

focus on growing our core brands across categories, reaching out to new geographies, within and

outside India, and improve operational efficiencies by leveraging technology. We will provide

consumers with innovative products within easy reach and be responsible citizens with a

commitment to environmental protection. Also we will provide superior returns, relative to our peer

group, to our shareholders.


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Values

Our core values are a set of guiding principles through which we think, behave and conduct our

business in order to deliver on our vision:

Ownership

Passion for Winning

People Development

Consumer Focus

Teamwork

Innovation

Integrity

Organization Structure

DIL operates through two major Strategic Business Units (SBU) : Consumer Care

Business and International Business Division (IBD)

Two Subsidiary Group companies - Dabur International and NewU and several step down

subsidiaries: Dabur Nepal Pvt Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian Consumer

Care (Bangladesh), Asian Consumer Care (Pakistan), African Consumer

Care (Nigeria), Naturelle LLC (Ras Al Khaimah-UAE), Weikfield International (UAE)

and Jaquline Inc. (USA).

It has 17 ultra-modern manufacturing units spread around the globe.

Wide and deep market penetration with 50 C&F agents, more than 5000 distributors and

over3.4 million retail outlets all over India.


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Brands

Consumer Care Business addresses consumer needs across the entire FMCG spectrum through

four distinct business portfolios ofPersonal Care, Health Care, Home Care & Foods. Thesecategories together account for the 12 power brands owned by the company:

Personal Care

It includes hair care items which provide natural nourishment to your hair, giving it body &

radiance while taking care of the critical balance of nutrients. Ayurvedic beauty products and

natural herbal care products give you a spotless and glowing fairness. Denture Care consists of

toothpastes and tooth powder.

Key Brands

Vatika

Dabur Uveda

Fem

Babool

Dabur Red Toothpaste

Health Care

Dabur offers a range of health supplements for common health problems. Chyawanprash has anti-

oxidant properties and strengthens the immune system of the body. Analgesics, Cold/Flu/Sore

Throat and Gastro-Intestinal are generally over the counter medications for common ailments like

pain, fever, cold, flu, sore throat, indigestion, constipation etc. Dabur also provide prescription

drugs for cancer patients. Energy drinks are ready source of energy to fight tiredness.

Key Brands

Hajmola

Dabur Chyawanprash

Dabur Janma Ghunti


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Glucose D

Home Care

It includes disinfectant cleaners both to clean and disinfect surfaces, killing 99.9% of germs. All

purpose cleaners are ideal for many household surfaces, particularly in the bathroom and kitchen.

Lavatory cleaners offer specialized cleaning and disinfecting for the toilet bowl and cistern. Air

freshener removes odors and adds fragrance to the air to create an ambience. Mosquito repellant

cream or gel offers the most effective protection from mosquitoes, the carriers of deadly viruses that

cause diseases like Dengue, Chikungunya, Malaria, Filaria and Encephalitis etc.

Key Brands

Sani Fresh

Odomos

Odonil

Foods

It includes juices made from best quality fruits, which do not have artificial flavors and

preservatives, and offers not just great taste, but also have all the necessary nutrients that keep you

active all day long. Honey has been used for its medicinal and therapeutic value for centuries in

India. Dabur's culinary range includes a range of Cooking pastes, Tomato Puree and Coconut Milk,

positioned under the convenience platform.

Key Brands

Dabur Honey

Real

Hommade


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Consumer Health Division (CHD)

It offers a range of classical Ayurvedic medicines and Ayurvedic OTC products that deliver the

age-old benefits of Ayurveda in modern ready-to-use formats. It also has more than 300 products

sold through prescriptions as well as over the counter.

Major categories in traditional formulations include:

Asav Arishtas

Ras Rasayanas

Churnas

Medicated Oils

Proprietary Ayurvedic medicines developed by Dabur include:- Nature Care Isabgol

- Madhuvaani

- Trifgol

Division also works for promotion of Ayurveda through organised community of traditional

practitioners and developing fresh batches of students.

International Business Division (IBD)

It caters to the health and personal care needs of customers across different international markets,

spanning Nepal, Bangladesh, the Middle East, North & West Africa, EU and the US with its brands

Dabur & Vatika. This division contributes to about 30% of total sales. It leverages the 'Natural'

preference among local consumers to increase share in personal care categories. Focus markets are

GCC, Egypt, Nigeria, Bangladesh, Nepal and US. Emphasis is on high level of localization of

manufacturing and sales & marketing.

Financials

DIL has been consistently growing at a fast pace over the past decade. Currently, the company s

consolidated Sales increased to Rs. 5,283.2 crores in fiscal 2011-12 from Rs 4,077.4 crores in fiscal

2010-11, registering a growth of 29.6%. Earnings before interest, taxes, depreciation and
http://www.dabur.com/Products-Ayurvedic%20Specialitieshttp://www.dabur.com/Products-Ayurvedic%20Specialities


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amortization (EBITDA) increased to Rs. 947.6 crores in 2011-12, from Rs. 833.4 crores in fiscal

2010-11, registering growth of 13.7%. Consolidated profits after tax (PAT) went up to Rs. 644.9

crores in fiscal 2011-12 from Rs. 568.6 crores, going up by 13.4%. Earnings per share (EPS) went up

to Rs. 3.68 in fi scal 2011-12 from Rs. 3.25 in fiscal 2010-11.


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Objective

The aim of this project was to control wastage on Coconut Oil Packing Line to reduce cost and

increase operational efficiency.

Study the current assembly line and identify abnormalities.

Perform statistical analysis of the problem and focus on the origin of the problem by

determining its root causes.

Suggest a permanent corrective action based on the analysis.

The project was divided into three phases. Accordingly, first phase involves study of the packing

line for Anmol Coconut Oil to find out the abnormalities, and the losses incurred because of them.

In the second phase, it is required to quantify these abnormalities, in order to focus on few critical

problems. Once identified, they can now be backtracked to their root cause.

In the third phase the focus was on the root causes and to find out a feasible solution to eliminate or

minimize them. After implementing the solution, assembly line should be studied again for

measuring its effectiveness.
http://en.wikipedia.org/wiki/Root_causehttp://en.wikipedia.org/wiki/Root_causehttp://en.wikipedia.org/wiki/Root_cause


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Background

In 2002-03, Total Quality Management (TQM) techniques were implemented on a pilot basis at two

plants in the area of statistical process control. The results were encouraging, and resulted in lowerrejection of raw materials, time savings, and made the procurement process more efficient. Since

then the Company has implemented TQM for other functional areas and plans to make TPM an

integral part of the production processes of your Company.

Top management announced TPM in Sahibabad manufacturing unit in Mar11and created and

environment that supported the introduction of TPM. After that a formal education program was

launched to inform and educate everyone in the organization about TPM activities, benefits, and the

importance of contribution from everyone. An organizational support structure was created topromote and sustain TPM activities once they begin. Team-based activities are essential to a TPM

effort. This group needed to include members from every level of the organization from

management to the shop floor. This structure will promote communication and will guarantee

everyone is working toward the same goals. Basic TPM policies and quantifiable goals were

established to analyze the existing conditions and set goals that are SMART: Specific, Measurable,

Attainable, Realistic, and Time-based. Outline a detailed master deployment plan. This plan will

identify what resources will be needed and when for training, equipment restoration and

improvements, maintenance management systems and new technologies. TPM kick-off /

Implementation Phase started on 1stNov11.

The first lean concept


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Survey of Literature

Functional Working of the Production Department

The department gets an annual budget every February which is derived from historic data, adjusted

for the growth rate that the company wants to achieve. However, this budget is only to give an

overview and the actual production takes place according to Rolling Production Plan (RPP)

distributed to each plant each month for the next three months by the Corporate Supply Chain Cell

(CSCC) Department in the Head Office. The factory performance is measured by the achievement

norm and it should be between -1% to +5% of the RPP.

Dabur migrated to the German company SAP as their ERP software provider in April 2006 and

implemented a country wide new WAN infrastructure for running centralized ERP system. This

helped in achieving higher levels of excellence and efficiency.

Backward scheduling is done with the help of SAP for

Raw Material(RM)

Packing Material(PM)

Manpower Requirements

Capacity

Production Planning at the unit involves carrying out the RPP smoothly while planning for

breakdown into smaller buckets, further breakdown on a daily basis, planning different shifts and

planning how the production will be done in different SKUs. The plant has to meet the RPP

provided by CSCC and can enhance the capacity if required by identifying and removing

bottlenecks, by increasing productivity, by increasing the number of shifts, by overtime and line

balancing. Based on marketing forecasts, RPP has a production plan for three months, however

only first month plan is fixed. The next two months plan is tentative and is susceptible to change.

Regarding quality of RM/PM, specifications are already given to the approved vendor. On receipt

of the consignment, QA performs lab testing and if approved makes the entry in the approved

stock from where it is made available to the production department. Since Dabur manufactures

Ayurvedic medicines which have high chance of contamination, proper cleaning of machines is


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done before changeover as part of CLIT (Cleaning, Lubricating, Inspection and Tightening). Also,

thorough verification is done by in process-quality-assurance (IPQA) at each step.

Material Procurement is done centrally by the Central Planning and Procurement Department

(CPPD). MRP software is run on 13th

of every month for the next month. MRP takes the endproduct requirements, routing information and bill of material (BOM) from the recipes (Masters) to

create a materials plan. In addition to monitoring by software, production performer watches the

availability of material every time and informs the shortages from time to time. It is required to

deliver the product in time. This is an additional activity performed by the production performer to

ensure smooth production. Packing section has employed group technology and has a product

family specific layout i.e. products that are similar in some ways are packed on the same line. For

instance, Badam Tail and Janm ghunti are packed on the same line because they come in small

packages and similar kind of bottles whereas lauhasava is packed on different line.

The batch size is fixed for different products based on the equipment capacity and ratio of

ingredients. And if the product requirement in RPP is not in multiple of its batch size, request is

sent to CSCC to revise RPP. This ensures smooth and uniform working. A Batch Processing

Record (BPR) is generated for each batch while manufacturing the bulk as well as packing. RM

tags are attached to BPR to track down any problems detected at a later stage. A BPR contains:

Material List

Plant/Line Clearance

Precautions to be taken in process

Equipment Checklist

Cleaning and Sanitation Records

Process Steps

Final Measurement Values and the Specifications

Deviations, if any

Released/ Not Released

The process of production is as per Master Batch Formula (MBF) and the work on the floor is

done according to Standard Operating Procedures (SOP).


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The packing is also monitored by IPQA and once packing is done, terminal inspection is done

according to Product Appearance Sheet (PAS). Once the finished goods (FG) are cleared, they are

sent for invoicing.

Process Flow (Coconut Oil Packing Chain)

The entire line is connected through conveyor belts for smooth movement of goods from one

station to another. The work has been tactfully fragmented into small components. No special skills

are required to learn work at any step of the line. This makes it easy for the supervisor to rotate


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workers from one part of the line to other. Mundane tasks also make it possible to transfer workers

from one chain to another. State the recent improvement in line

Types of Abnormalities in Coconut Oil Packing Chain

Quality Assurance Department ensures quality at various stages of the production. It has identified

different types of defects that result in rejection of the finished goods for all products. The different

types of defects on coconut oil packing chain are

Defect Picture Description

1. No Coding The container moves ahead in

the line without being coded.

2. Over Coding The coding overlaps the texton the sleeve, thus making it

illegible.


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3. Smudgy Coding The code is not readable.

4. Poor Sealing There is leakage because of

improper sealing.

5. Blister Container There is a hole in the sleeve.

6. Double Taggering 2 or 3 seals overlap on a single

container.


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7. Poor Sleeving Improper placement of sleeve

on container.

8. Outside Panel Coding The coding falls outside the

intended window.

Concepts DeployedSince quality is an important factor in the successfulness and longevity of any business, it would be

beneficial to the business to have tools by which quality could be measured . Two basic tools of

quality control were used for the analysis of abnormalities.

Pareto Analysis

It can be described as the 80/20 rule applied to quality-control. It essentially states that 80% of

quality problems in the end product or service are caused by 20% of the problems in the production

or service processes. In practice, then, it is beneficial to separate the vital few problems from the

trivial many, and thereby identify the individual problems that can be fixed and most drastically

benefit the end product or service. Once these problems are identified, they can be addressed and

remedied, thus efficiently obtaining quality.


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Fig 1.1 Example of Pareto diagram

Cause and Effect Diagram

These diagrams (also called fishbone diagrams) are causal diagrams created by Kaoru

Ishikawa (1968) that show the causes of a specific event. They are commonly used for product

design and quality defect prevention, to identify potential factors causing an overall effect. Each

cause or reason for imperfection is a source of variation. Causes are usually grouped into major

categories to identify these sources of variation. The categories typically include:

People: Anyone involved with the process

Methods: How the process is performed and the specific requirements for doing it, such as

policies, procedures, rules, regulations and laws

Machines: Any equipment, computers, tools etc. required to accomplish the job

Materials: Raw materials, parts, pens, paper, etc. used to produce the final product

Measurements: Data generated from the process that are used to evaluate its quality

Environment: The conditions, such as location, time, temperature, and culture in which the

process operates.
http://en.wikipedia.org/wiki/Causal_diagramhttp://en.wikipedia.org/wiki/Kaoru_Ishikawahttp://en.wikipedia.org/wiki/Kaoru_Ishikawahttp://en.wikipedia.org/wiki/Causehttp://en.wiktionary.org/wiki/eventhttp://en.wikipedia.org/wiki/Product_designhttp://en.wikipedia.org/wiki/Product_designhttp://en.wikipedia.org/wiki/Product_designhttp://en.wikipedia.org/wiki/Product_designhttp://en.wiktionary.org/wiki/eventhttp://en.wikipedia.org/wiki/Causehttp://en.wikipedia.org/wiki/Kaoru_Ishikawahttp://en.wikipedia.org/wiki/Kaoru_Ishikawahttp://en.wikipedia.org/wiki/Causal_diagram


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Fig 1.2 One format of a cause-and-effect diagram

Cause-and-effect diagrams can reveal key relationships among various variables, and the possible

causes provide additional insight into process behavior.

5W2H Analysis

It is a method of asking questions about the current process can lead to important insights about

why the current process is not working as well as it could, as well as potential ways to improve it.

Source: Adapted from Alan Robinson, Continuous Improvement in Operations: A Systematic Approach to Waste Reduction (Cambridge, MA:

Productivity Press, 1991), p. 246.


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Methodology

The methodology adopted involves documentation, measurement and analysis for the purpose of

improving the functioning of the process. It can be briefly listed out as below for the different

phases of the project:

Quality Assurance Matrix: Detailed process flow was created including all fragmented steps

from procurement of raw material to terminal inspection, before sending the packaged goods to

warehouse. Quality characteristics, frequently monitored to minimize the occurrence of common

defects, were mapped against each step in the entire process. This matrix gave us the focal points in

the assembly line, from where data needs to be collected for Pareto analysis.

EXCEL

Data Collection:

Data Collectionequired attention

For data collection, we need to identify the location on the line where the defects occur. Supervisor was

briefed about the survey and asked for assistance. Operators

A data collection chart was prepared which divided the wastage in two parts i.e., Rework and Scrap.

Types of defects were broadly classified based on the type of action taken for the defected goods.

The defects that require same amount of manpower and time for rework were kept in one group.

Find some scientific term for it

Data was collected for 6 hrs in slots of 2 hr each for one month. The operator on the line was asked to put

the defected bottles aside.

Pareto Chart Procedure

1. Decide what categories you will use to group items.

2. Decide what measurement is appropriate. Common measurements are frequency, quantity, cost and time.

3. Decide what period of time the Pareto chart will cover: One work cycle? One full day? A week?

4. Collect the data, recording the category each time. (Or assemble data that already exist.)

5. Subtotal the measurements for each category.


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6. Determine the appropriate scale for the measurements you have collected. The maximum value will be the largest

subtotal from step 5. (If you will do optional steps 8 and 9 below, the maximum value will be the sum of all subtotals

from step 5.) Mark the scale on the left side of the chart.

7. Construct and label bars for each category. Place the tallest at the far left, then the next tallest to its right and so on.

If there are many categories with small measurements, they can be grouped as other.

Steps 8 and 9 are optional but are useful for analysis and communication.

8. Calculate the percentage for each category: the subtotal for that category divided by the total for all categories. Draw

a right vertical axis and label it with percentages. Be sure the two scales match: For example, the left measurement

that corresponds to one-half should be exactly opposite 50% on the right scale.

9. Calculate and draw cumulative sums: Add the subtotals for the first and second categories, and place a dot above

the second bar indicating that sum. To that sum add the subtotal for the third category, and place a dot above the

third bar for that new sum. Continue the process for all the bars. Connect the dots, starting at the top of the first bar.

The last dot should reach 100 percent on the right scale.

References:

http://asq.org/learn-about-quality/cause-analysis-tools/overview/pareto.html

Fishbone Diagram Procedure

Materials needed: flipchart or whiteboard, marking pens.

1. Agree on a problem statement (effect). Write it at the center right of the flipchart or whiteboard. Draw a box

around it and draw a horizontal arrow running to it.

2. Brainstorm the major categories of causes of the problem. If this is difficult use generic headings:

Methods Machines (equipment)

People (manpower)

Materials

Measurement

Environment

3. Write the categories of causes as branches from the main arrow.

4. Brainstorm all the possible causes of the problem. Ask: Why does this happen? As each idea is given, the

facilitator writes it as a branch from the appropriate category. Causes can be written in several places if they relate to

several categories.

5. Again ask why does this happen? about each cause. Write subcauses branching off the causes. Continue

to ask Why? and generate deeper levels of causes. Layers of branches indicate causal relationships.

6. When the group runs out of ideas, focus attention to places on the chart where ideas are few.

References: Excerpted from Nancy R. TaguesThe Quality Toolbox, Second Edition, ASQ Quality Press, 2004, pages

247249.
http://asq.org/learn-about-quality/cause-analysis-tools/overview/pareto.htmlhttp://asq.org/learn-about-quality/cause-analysis-tools/overview/pareto.htmlhttp://asq.org/quality-press/display-item/index.html?item=H1224http://asq.org/quality-press/display-item/index.html?item=H1224http://asq.org/quality-press/display-item/index.html?item=H1224http://asq.org/quality-press/display-item/index.html?item=H1224http://asq.org/learn-about-quality/cause-analysis-tools/overview/pareto.html


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For creating pareto chart:

http://www.brighthubpm.com/templates-forms/8708-creating-pareto-charts-with-microsoft-excel/#
http://www.brighthubpm.com/templates-forms/8708-creating-pareto-charts-with-microsoft-excel/http://www.brighthubpm.com/templates-forms/8708-creating-pareto-charts-with-microsoft-excel/http://www.brighthubpm.com/templates-forms/8708-creating-pareto-charts-with-microsoft-excel/

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