Production Operations

Management
 Acknowledgments

We are highly grateful to Almighty Allah who gave us the power to complete this
report. I am also highly thankful to my honorable Teacher for his guidance.

Without the encouragement and help of our teachers, We perhaps would not
have been able to write what we have written, it would be virtually an unending
list of persons who helped us in one way or other but then it would be great
injustice on our part not to mention the names of those who provided us with the
much sought after information-moral support and cooperation.

People belonging to various walks of life contributed in one way or other, but
teachers who heads this illustrious which in real terms provided us with
foundation on which Inshallah, We will build my career much to the pride of our
institution and my respected teachers.

.
 Dedication

First of all we will thanks Almighty Allah who has given us wisdom to do this
assignment.

We may never forget my parents and teachers who supported us throughout

our life span. Without them it would have been really impossible for us to
complete our assignment. We dedicate our assignment to them.
maNNect
A Pulp Shot….

maNNect
This is our product that is based on rich mango juice that
extracted from real Mangos. That gives the real taste of
fruit pulp with its soft and chilled feel makes a fresh and
soothing and nutritious feel.
HISTORY:

Pakistan is blessed with a climate ideally suited to the farming of all kinds of fruit-rich in taste
and flavor; sweet, mellow and juicy. For centuries Pakistani farmers have been developing
newer strains of fruit by grafting one exotic variety with another. MANNECT is a processor of
fresh mangos. Nature’s goodness is meticulously persevered by MANNECT. The processing is
carried out by qualified food technologists in MANNECT ultra modern plants in Lahore. The
ever-increasing demand for MANNECT juice testifies o the consistently high quality of
MANNECT mango juice

Our company provides only mango juice that is a pure pulp of mango .it is sold in a bottled
packaging in 250ml

VISION:

To be the leading food and beverage Filipino company competing with the multinational

MISSION:

Our mission is to be the leading manufacturer and distributor of juices, dairy and related food
products that best satisfy the growing needs of the customers. This, for us is the means by which
we can effectively participate in the social and economic development of the communities we
serve, promote professional growth and well-being of our employees, maintain mutually
profitable relationship with our trade partners and achieve growth level equal to or better than
the norms of the food industry.

MANUFACTURING PROCESS
Process manufacturing is the production of goods that are typically produced in bulk
[Link] manufacturing results in goods. As our company is concern with
making only mango juice so the main raw material is mango. And it is purchased in bulk
.Once it is purchased the following steps are followed.

Mangos are bought

Peeled

Separate the seed

Crushed

Mango Pulp is collected

Stored in drums at (-7)

The mango pulp then becomes ready to be mixed
with the other ingredients.

Clarifying the water

‘The quality of water is crucial to the success of a

drink. Impurities, such as suspended particles,
organic matter, and bacteria, may degrade taste and
color. They are generally removed through the
traditional process of a series of coagulation,
filtration, and chlorination. Coagulation involves mixing a gelatinous precipitate, or floc
(ferric sulphate or aluminum sulphate), into the water. The floc absorbs suspended
particles, making them larger and more easily trapped by filters. During the clarification
process, alkalinity must be adjusted with an addition of lime to reach the desired pH
level.

Filtering, sterilizing, and de-chlorinating the water

The clarified water is poured through a sand filter to remove fine particles of flock.
Sterilization is necessary to destroy bacteria and organic compounds that might spoil the
water's taste or color. The water is pumped into a storage tank and is dosed with a small
amount of free chlorine. The chlorinated water remains in the storage tank for about two
hours until the reaction is complete.

Mixing the ingredients

The dissolved sugar and other are pumped into the dosing station in a predetermined
sequence according to their compatibility. The ingredients are conveyed into batch tanks
where they are carefully mixed. Fruit based syrups generally must be pasteurized.
The water and syrup are carefully combined by sophisticated machines, called
proportioners, which regulate the flow rates and ratios of the liquids.

Filling and packaging

The finished product is transferred into bottles at extremely high flow rates. The
containers are immediately sealed with pressure-resistant closures, steel crowns with
corrugated edges; twists off, or pull tabs.
Because juices are generally cooled during the manufacturing process, they must be
brought to room temperature before labeling to prevent condensation from ruining the
labels. This is usually achieved by spraying the containers with warm water and drying
them.
Finally, containers are packed into cartons or trays which are then shipped in larger
pallets or crates to distributors
 FORECASTING

Production and operations personnel use forecasts to make decisions involving process
selection, capacity planning, and facility layout, as well as for continual decisions about
inventory, scheduling, and production planning. Forecasts are vital to every business
organization and for every significant management decision. The errors can be costly in this
process. Overshooting in the forecasts will result in inventory costs, while underestimating will
cause late orders, extra labor costs, and missed sales opportunities.

We are targeting the main cities of Pakistan that is Karachi, Islamabad, Lahore, and Faisalabad

[Link] CITIES POPULATION APPROX.

1 KARACHI 12 Million

2 ISLAMABAD 1.3 Million

3 LAHORE 6.5 Million

4 FAISLABAD 2.5 Million

TOTAL POPULATION IN THESE AREA 22.3 Million

15% of the total population of these areas has an intake of the mango juice .which makes
3.345 million

The percentage is low because fizzy drinks and many other drinks are also available and
are liked by the consumers. Our future plans are to increase our product range and
consume all fruits in juices

We use NAIVE METHOD to forecast production for the next year and the production
increases as we add a few percentage of the target that is set accordingly

Sales for the forecasting month =Last year’s month sale+ (Target: increase by
5%)
 Year Sales
2010 19,450,000
2011 20,422,500
(forecasted)

MONTH ACTUAL (2010) BUDGETED(2011)

JANUARY 650,000 682,500

FEBURARY 1,200,000 1,260,000

MARCH 1,600,000 1,680,000

APRIL 1,900,000 1,995,000

MAY 2,400,000 2,520,000

JUNE 2,500,000 2,625,000

JULY 2,600,000 2,730,000

AUGUST 2,200,000 2,310,000

SEPTEMBER 1,800,000 1,890,000

OCTOBER 1,200,000 1,260,000

NOVEMBER 800,000 840,000

DECEMBER 600,000 630,000

TOTAL 19,450,000 20,422,500

GRAPH
 Forecasting

3,000,000

2,500,000

2,000,000

Actual Production(2010)

1,500,000
Bottles

Forcasted Production

1,000,000

500,000

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 PRODUCT COSTING

Mango pulp 1.2

Sugar 1.8
Citric acid 0.3
Water 0.1
Color 0.1

Raw material 3.5

Crown cork 0.75

FOH{depreciation, salaries, indirect, utilities, 1.5
repair, rent etc}

Manufacturing cost 5.75

Profit margin 2.81

Distributor margin 0.8
Retailer margin 0.6
Sales tax 2.04
CONSUMER PRICE 12
Each bottle is of Rs.12 including all the expense etc as shown above.

CAPACITY:

Capacity is often defined as the capability of an object, whether that is a machine, work center
or operator, to produce output for a specific time period, which can be an hour, a day, etc

Our company makes a shift of 8 hours and produces 16000 bottles per hour.

Duration No. of bottles

Per second 4

Per min 266

Per hour 16000

Each day 1,28000

Each week 768000

Each month 3072,000

Each year 36864000

 QUALITY CONTROL
Quality Assurance

The product of maNNect is manufactured under the most hygienic conditions. Great care is
exercised in the selection & quality control of raw materials, packaging materials. Rigid quality
standards are ensured at every stage of the manufacturing process. Every batch of drink,
packaged Juice is thoroughly checked by quality experts using the most modern equipment.

Our drink is made available in Bottles which retains the freshness of the drink for a long time.
The special technology used in the packaging keeps the drink fresh for a longer period of time.
Owing to all these reasons, our products have been awarded with ISO certification. Thus we are
engaged in providing the new generation consumers with healthy and delicious drink to refresh.

According to quality management system, our Quality Controllers conduct various quality tests
at each and every production stage, which assists us in maintaining a standard quality in our
product. They conduct strict quality checks on the following quality parameters such as:

 Edible quality
 Hygiene
 Nutritive value
 Shelf life.

Our company takes high measures to maintain the standards of the product by updating its
quality. The quality are checked on the following stages

1. Incomings of raw materials

2. Receiving
3. Lines
4. Bottles (finished goods)

Quality assurance in raw materials:

Raw materials have high standards as well like mango which is our main raw material is taken
of a specific breed and similarly sugar is taken of the best quality, water’s quality is measured
as well and it is well treated when needed. And in managing the inventory of the raw materials
our company makes it sure that FIFO method is used ant the storage place must be medicated
so that the raw materials be safe for a long period of time.
Quality assurance during processing:
In the product line there are many inspection points that maintain the quality. As the bottle is
washed as it is reused the quality of bottle is checked visually, that drops those bottles which are
not up to the standards like the bottles are dirty or are cracked etc

Then once when the syrup is filled in the tank the quality is measured so see the taste and to
check that the ingredients are mixed in proper proportion. The best part of our company is that
we check the product after every 15 minutes from the product line .Brix that means sweetness,
the sweetness is check that so that it does not exceed the sweetness level.

Quality assurance of finished product:

Firstly the packaging is monitored the product with defected packaging is left behind. The
finished good is kept dust freeze and hygiene is taken as a very important point from the raw
materials to the finished goods. The finished good is stored in the shaded area where there is no
exposure of sunlight this is because its tastes changes once when is exposed to sunlight.
Similarly when it is distributed through vehicles they are cover to be safe from sun .and our
retailer ect are educated to avoid direct sunlight.

Summarizing about quality management we use Total product management

TPM method total product management in which the major checks are performed as well as
in depth of:

1. Quality control on the raw material that is received by procurement department

2. The next check is performed on the job like where the material is inserted.

3. The output of the finished goods

 INVENTORY MANAGEMENT

Inventory management is all about managing the raw materials in such a way that during the
production process company does not face any kind of problems like lack of raw materials
available due to which the production process can halt.

Main raw materials for mango juice

Sugar
Mango Pulp
Color
Water
Citric acid

Sugar

One of the main ingredients is sugar which adds sweetness and body to the juice, enhancing the
"mouth-feel," an important component for consumer enjoyment of drink. Our company buys
sugar from these places mentioned below

SHAHTAJ Sugar mills

SKEIKHU Sugar mills

 Mango Pulp:
Mangoes are used to extract the pulp for the juice under totally hygienic conditions. Pulp is been
extracted manually, its been peeled then the seed is been separated from the mango then finally
its been crushed ,the pulp is been stored in drums. Our company buys mangos from

ShahNawaz farms which is in Multan

Open market.

Some times our company buys the pulp from “Citro Park” and if we think that we have got
access amount of pulp so we sell it back to Citro Park.

 Color
Coloring is any substance, liquid or powder, which is added to food or drink to change its color.
Our company adds a yellow color to the juice, this color is been purchased from TAFOTEX and
is been stored in tins under normal conditions.
  Water
Water is been extracted underground, the quality of water is crucial to the success of a juice.
An impurity in water degrades the taste and color. To remove the impurities water passes
through the process of filterization in order to purify the water. Whenever water is been needed
it’s simply been extracted

 Citric acid
It is a natural preservative and is also used to add an acidic, or sour, taste to the juice. We
purchase Critic acid from Tafotex which is in Ferozpur Road

The stock of raw material has lead time of ten days. And the method of inventory used by
our company is FIFO.

WAREHUOSE:
All the stocks of raw materials are store in our manufacturing plant where as the finished good
are stored separately in near our plant across the road in RAIWAND ROAD
 SUPPLYCHAIN MANAGEMENT IN MANNECT
(PAKISTAN)

Supply chain management (SCM) is the management of a network of interconnected

businesses involved in the ultimate provision of product and service packages required by end
customers. Supply chain management spans all movement and storage of raw materials, work-
in-process inventory, and finished goods from point of origin to point of consumption (supply
chain).
Our company maximizing added value and reduces total cost across the entire process
through focusing on speed and certainty of response to the market

SUPPLYCHAIN MANAGEMENT IN MANNECT

(PAKISTAN)

SUPPLY CHAIN MANAGEMENT

PRODUCTION PRODUCTION PROCUREMENT

PLANNING DEPARTMENT DEPARTMENT
DEPARTMENT
 QUALITY CONTROL
DEPARTMENT

TECHNICAL
DEPARTMENT

WAREHOUSING

LOGISTICS

FLOW CHART’S
EXPLANANTION:
The procurements are done by the affiliation with the production planning department and
the production department. These departments coordinated with each other and purchase
things according to the plan keeping in mind the amount of production to be made.

The raw material and the product lines are checked by the quality department to ensure
quality in every point of inspection. Quality is described in detail in this assignment. More over
any faulty thing that are observed is then send to the technical department which repairs it or
send them back.

Once the product has been fully manufactured to the finish goods its send to the warehouse
where the stock is stored for the upcoming days according to the demand and sales.

Logistics is the systemic management of the flow of the goods, information and other resources

in a repair cycle between the point of origin and the point of consumption in order to meet the
requirements of customers. Thus the finished good are distributed by two methods as discussed
below.

DISTRIBUTION CHANNELS
Our Company makes two types of selling

 Direct selling
  Indirect selling

Direct Selling
In direct selling we supply our product in shops by using our own transports. We have almost
450 vehicles to supply the bottles. In this type of selling company have more profit margin.

Indirect Selling
We have whole sellers and agencies to cover all area. Because it is very difficult for us to cover
all area of Pakistan by their own so they have so many whole sellers and agencies to assure their
customers for availability of our product (mango juice).
 COORDINATION
WITH
MARKETING AND FINANCE

Marketing department is one of the most important components of a business’s survival in the
market. The main aims of the marketing department revolve around understanding the
customers and their needs. Marketing activities involve designing, promoting, pricing a product
according to the needs of the market and customers.

Marketing department needs to work in close coordination with the other departments such a
purchasing, sales, finance etc to ensure that the customer needs are satisfied while generating
profits for the organization.

Marketing and finance departments in a company are generally at odds with each other due to
their opposing orientations. But their qualities, when integrated, can greatly enhance value of the
corporation. Finance can contribute to marketing in two main areas - the measurement of
marketing performance and evaluation of marketing plans. The marketing management needs a
variety of profitability information on customers and products to make marketing decisions such
as pricing, new product development, sales targeting and negotiating discounts. The finance
department needs to encourage marketing to measure the productivity of ads placed, sales force
and sales agents. More attention has been taken to marketing strategies. The product life cycle is
a concept used in developing strategies. The finance department can assist with forecasting of
cash flows and profit-and-loss. They can also evaluate realism used in marketing plans to help
marketing determine its possibilities of success. By viewing advertising as an investment, the
finance department can make investment decisions with the marketing department.

Product Mango juice

Price Rs.12

Place Manufacturing plant in Raiwand road

Distributed to macro, hyper star, macro and all other
general stores

Promotion Billboards, advertisements, newspaper, free

sampling etc
LOCATION:
Being in the right location is a key ingredient in a business's success. Consequently, location
often plays a significant role in a company's profit and overall success. A location strategy is a
plan for obtaining the optimal location for a company by identifying company needs and
objectives, and searching for locations with offerings that are compatible with these needs and
objectives.

Our manufacturing plant is situated in Raiwind Road. This location was quite feasible for
us. We had another option as well that was Band Road but this area was highly developed and
was more than a residential area rather than an industrial one. Noise pollution and many other
factors were the road block for our company, thus we decided to have our plant in Raiwind
Road.

Transportation, the roads are properly constructed and we can access to other towns
Water quality, the main component of our product had a good quality of water which
really matters
Cheap labor, this is a village area and labor here are quite cheap which will lower our
cost
Easy access of labor, in villages mostly people are unemployed thus we can get labor
easily
Other manufacturing plants, there are many other big companies working here and are
highly success full
Raw materials, over here we get raw materials easily without any difficulty.
Massive area, we wanted a large plant to run our business and this area was ideal for us.
CONCLUSION:

The visit to the plant and meeting various managers was quite fruitful. We got to know
that how production operational management is being used practically. Thousands of
queries have swapped away after working on this project. And now we are able to think
of our own production unit.