ie 314l - methods lab term paper

8/10/2019 IE 314L - Methods Lab Term Paper

http://slidepdf.com/reader/full/ie-314l-methods-lab-term-paper 1/24

UNIVERSITY of SAN CARLOS – TECHNOLOGICAL CENTER

Nasipit, Talamban, 6000 Cebu City, Philippines

A Method Improvement Study on

RCBA Manufacturing Corporation

Submitted By:

Chua, Felixter Leone See

Li, Noreen Bless Ang

O, Wesley Clarence Sy

Pacio, Lance Brandon Mansueto

Vasnani, Neelesh Naresh

\

BSIE 3rd year students

Submitted to:

Mrs. Irish Tejero Dakay, CIE, MIE

Department of Industrial Engineering

Revision as of:

October 20, 2014



TABLE OF CONTENTS

Acknowledgement 1

Abstract 2

CHAPTER 1 THE PROBLEM AND ITS SCOPE 3-10

INTRODUCTION 3-5

Company Profile 3-4

Pareto Analysis 4-5

Rationale of the Study 5

THE PROBLEM 6-7

Statement of the Problem 6

Significance of the Study 7

RESEARCH METHODOLOGY 8

DEFINITION OF TERMS 9

CHAPTER 2 PRESENTATION, INTERPRETATION, AND 10-13

ANALYSIS OF DATA

CHAPTER 3 PRESENTATION OF ALTERNATIVES, 14-17

CONCLUSIONS AND RECOMMENDATIONS

Presentation of Alternatives 14

Cost Benefit Analysis 15-16

Recommendation 16

Conclusions 17

BIBLIOGRAPHY 17

APPENDICES 18-212

A. Present and Proposed Flow Process Charts and Diagrams 18-21

B. Transmittal Letter to RCBA Manufacturing Corporation 22

Conclusions

Recommendations

16

17

9

2



1

ACKNOWLEDGEMENT

This research study is dedicated to the people who have contributed their time, effort and

willingness that brought this study to a success. The researchers would like to express a heartfelt

gratitude to the people who in one way or another have shown cooperation that had truly

helped the researchers’ endeavors in pursuing this study.

To our IE 314 Laboratory teacher, Mrs. Irish Tejero Dakay, for extending her help and

guidance in all the months of work undergone during our research study . The essence of

teamwork and cooperation you have shared to us and the learning you have imparted from the

earliest stage of our research had put a value in all our endeavors.

To RCBA Manufacturing Corporation, who valued cooperation during the research study,

our utmost gratitude in putting this study into writing.

To our beloved parents who understood us when we sharing our sentiments, supported

us financially, encouraged us when we were at the brink of giving up and carried us

throughout our studies. Thank you for your faith.

Above all, to our Almighty God who provided us the needed strength, knowledge,

persistence, and patience, in the pursuit of our study. This we offer You Lord God for your

greater glory.

The Researchers:

Chua, Felixter Leone See

Li, Noreen Bless Ang

O, Wesley Clarence Sy

Pacio, Lance Brandon Mansueto

Vasnani, Neelesh Naresh



2

ABSTRACT

This study, using a quantitative method, was conducted to look, analyze and provide

improvement into the herbal powder production process for the capsule products of RCBA

Manufacturing Corporation located in Cebu City, Philippines. The decision making tool, Pareto

chart, was utilized to select herbal powder processing, as an operation that should be improved to

boost overall productivity. This research was also constructed to identify the main problems and

causes that makes the said production process less productive. The data and information needed to

improve the process were then obtained through verbal discussion with the plant manager. Using

this data, methods analyses were made using the flow process charts and diagrams. The findings

mainly revolved around the fact that the production process took too long and had low productivity

and utilization. It was concluded that the transportation must be minimized, and the time for

cooling must be reduced. Various alternatives such as buying a new dryer machine or an exhaust

to speed up cooling, and rearrangement of the factory layout, were formulated. The proposed

process and layout was then presented, wherein a new exhaust machine purchase was

recommended, and a minor rearrangement of machines was suggested. The methods improvement

study was able to improve the productivity by around 25%.



3

CHAPTER 1

THE PROBLEM AND ITS SCOPE

INTRODUCTION

Company Profile:

RCBA Manufacturing Corporation, a herbal manufacturing company, was initially named

as RCA Herbal Foods Products. The company was established on March 28, 2003 and has a

laboratory previously located in Agusan del Norte. RCA Herbal Foods Products initially produced

ROCH Herbal Capsul, a herbal dietary food supplement. On June 3, 2005, the company was

happily granted its first Certificate of Product Registration by the BFAD.

The company name, RCA Herbal Foods Products, was then changed to RCBA

Manufacturing Corporation on October 3, 2005 with the approval of the Securities and Exchange

Commission. The initial product name, ROCH, was then changed to CHRO-Plus on December 22,

2010. The word “Plus” from CHRO-Plus was added when it was proven that each capsule

contained Omega 6 & 9 and essentia l fatty acids that are key ingredients to increase the body’s

immune system.

Today, the company has four main product lines namely: BARCH multi-dietary

Supplement which improves health and vitality; CHRO-Plus Herbal Dietary Supplement which

cures sickness and ailments; CHRO-Plus Herbal Oil which improves skin and hair quality and also

heals various body aces; CHRO Herbal Ointment which acts as an Antibacterial, Antifungal,

Antiviral, Antinoceceptive and Anti-inflammatory ointment. RCBA Manufacturing Corporation

is currently utilizing two major machines and employs eleven employees headed by their CEO,

Mr. Romeo C. Ang. Recently, the company office and laboratory located at Sitio Orel, Banilad,

Mandaue City.

It is recognized as the most trusted name in the industry by Gawad Parangal sa Pilipinong

Maagap and its major products have been awarded numerous recognitions both locally and abroad.



4

This shows the company’s dedication in providing good health while ensuring safe consump tion

to its customers at different levels regardless of age, gender and more.

Pareto Chart Analysis

Analysis:

From the Pareto chart, it can be perceived that the two superlative sales generators are the

CHRO plus herbal capsule and BARCH herbal supplement, both of which are capsule products

that require powdered herbs. The chart shows that around 76% of the sales is earned by these two

products. Since there’s a higher revenue from capsules, it means there are more orders for them,

No. Product Sales in Millions Cumulative (M) %

1 CHRO Plus herbal capsule PHP 90.00 PHP 90.00 40%

2 BARCH herbal supplement PHP 80.00 PHP 170.00 76%

3 CHRO herbal ointment PHP 40.00 PHP 210.00 93%

4 CHRO plus herbal oil PHP 15.00 PHP 225.00 100%



5

and more production input likewise. Due to this, the analysts decided that in order to improve

overall productivity, the productivity of herbal powder processing should be improved, that is, the

outputs (production rate) coming from the herbal powder production must be enhanced, or the

inputs (cost, time, labor, etc.) must be minimized.

Selected Project: Process Improvement on Herbal Powder Production

Rationale of the Study

RCBA Manufacturing Corporation is an herbal manufacturing company that has been

around for a while. It made a huge splash with its ROCH herbal capsule, an herbal dietary

supplement, back in 2003. It garnered much attention, and RCBA (known as RCA Herbal Foods

Products at the time) received their Certificate of Product Registration by the BFAD in 2005.

Since then RCBA Manufacturing Corporation has grown. They now have 4 main product

lines: BARCH multi-dietary supplement, CHRO-Plus Herbal Dietary Supplement, CHRO-Plus

Herbal Oil, and CHRO Herbal Ointment. These products have been very well received by the

consumers.

The team of researchers chose RCBA as our company to study as helping them out would

result into helping is many consumers. The team would like to improve one of the 4 product lines.

The decision on which product line to study with a Pareto Chart Analysis based on the revenue

these products generate could be made. After the decision of which product line to study is done,

the current performance of that product line (material flow) will be presented; then the

interpretations, possible alternative, and recommendations will be produced and stated.

Various problems in the production line could include: long waiting times, transportation

time, and methods in production. To find solutions to the long waiting times, the team could look

into the processes and operations that lead to the waiting; from there, we could look to reduce the

waiting by purchasing new machines. To help with transportation, the team could look to rearrange

the workplace layout. There were methods in the production that were often inconsistent (solar

drying). These methods could be made consistent with the purchase of machines (mechanical

dryer).



6

THE PROBLEM

Statement of the Problem

This study aims to improve the productivity of a specific process used by RCBA

Manufacturing Corporation.

Specifically, the study seeks to answer the following questions.

1. What are the relevant factual information that may affect the productivity of the herbal powder

production?

1.1 Quantity of Production

1.2 Machines Utilized and its capacity

1.3 Time of Operations

1.4 Facility Layout

2. What are the possible alternatives that may improve the productivity of the herbal powder

production?



7

Significance of the study

This study would be beneficial to many. It would specifically benefit the analysts. It would

also benefit the Industrial Engineering students of University of San Carlos – Technological Center

especially those taking up Methods Engineering. Any improvements made to the production

process of the herbal capsules out of this study would also benefit RCBA Manufacturing

Corporation.

To us the analysts, the result of this research would help us learn the hands-on uses and

techniques of methods analysis.

To the Industrial Engineering students of University of San Carlos - TC, the result of this

study would benefit them in a way that they would understand the importance of Methods

Engineering in their course and future studies.

RCBA Manufacturing Corporation would be able to get information from the gathered data

and would be able to formulate a better herbal powder production process through the

recommendation proposed.



8

RESEARCH METHODOLOGY

Research Design

This study would use the quantitative style of research where the researchers would analyze

the data gathered and compute for the possible factor values affecting productivity and thus

recommend alternatives in order to increase productivity. Cost Benefit Analysis will be used to

evaluate how effective the new alternative would be.

Research Environment

The locale of this study is the RCBA Manufacturing Corporation factory in Orel St.,

Banilad, Mandaue City, Cebu, Philippines. This is where raw data would be gathered for later

analysis.

Research Procedure

Gathering of data. The analysts would visit the factory and gather data by interviewing the

production staff. They would be assured that these gathered data would be analyzed carefully and

would be used for the betterment of the corporation through research analysis and

recommendations. And that these data would be strictly used for research purposes only.

Treatment of data. The data would be studied, recorded and analyzed through the use of

appropriate exploratory and recording tools. Through these, a specific area of study would be

chosen and be further analyzed in order for the analysts to formulate recommendations which

would be tested through Cost and Benefit Analysis.



9

DEFINITION OF TERMS

For clearer understanding of the terms used in this study, the following terms are

operationally defined:

Productivity – refers to the ratio of outputs to inputs, the number of sacks of herbal powder

produced per time or cost.

Methods – a detailed set of processes and techniques that gives close analysis to each element of

the Herbal production process.

Herbal Powder Production – the production process used by RCBA Manufacturing to make the

powder needed for their capsule products.

Exploratory tool – a tool, such as the Pareto chart, that was used for decision making on which

particular process to scrutinize to improve RCBA Manufacturing Corporation’s productivity.

Recording tool – a tool, such as the flow process chart, that was used to record the obtained data

in an organized way,

Machineries/Machines – refers to the equipment used to in the herbal production process: namely,

grinder, baker, washer, and filter.

Raw material – refers to natural plants, fruits or herbs used to make the herbal capsules, some of

which are: Ampalaya fruit, Garlic bulb, Malunggay seeds, Soya beans. Salba seeds, and Ginger

root.

Alternative – proposed substitutes to improve the productivity of the herbal production process,

such as buying a new drying or cooling machine.

Pareto Chart – is a type of chart that contains both bars and a line graph, this showed the analysts

the herbal products that generated the greater part of the sales.

http://en.wikipedia.org/wiki/Bar_chart


http://en.wikipedia.org/wiki/Line_chart

http://en.wikipedia.org/wiki/Line_chart




10

CHAPTER 2

PRESENTATION, INTERPRETATION, AND ANALYSIS OF DATA

This chapter presents, analyzes and interprets the data gathered during the conducted

survey in the RCBA Manufacturing Corporation factory located in Mandaue City.

General Process Flow: Capsule Products

RCBA Manufacturing Corporation purchases its variety of raw materials from its different

trusted suppliers. Once the raw materials arrives, the company then combines these major

components and grinds them into powder form using the grinder machine then dries these

powdered form bits with the dryer machine.

RCBA then transfers the powder output together with the capsules they purchased from

different suppliers in different countries like China or India to their partner company who brings

together the powder and the capsule. The partner company also does the packaging including the

plastic containers for the capsules, the aluminum foil to stack these plastic containers and the box

which contains the company name and important information. The output is then sent back to

RCBA ready for distribution.

Specific Area of Study: Herbal powder production

A list of data is presented showing the machines, raw materials and manpower being

utilized. A tabular form of data is presented showing the chronological order of events used during

its herbal powder production together with its specified time duration and if necessary, its distance

being covered.

Lists A and B presents the summary of resources which RCBA Manufacturing Corporation

utilizes during its herbal powder production. List C presents the current manpower of RCBA

Manufacturing Corporation for its daily operations.



11

A. List of Machines Utilized:

- Washer which cleans the newly arrived raw materials

- Grinder which grinds raw materials into powder form

-

Filter which separates unwanted lumps after grinding- Baker which bakes the grinded raw materials

B. List of Raw Materials:

The raw materials used for CHRO-Plus Herbal Dietary Supplement:

- Ampalaya fruit (mamordica charantia)

- Garlic bulb (allium sativum)

- Malunggay seeds (moringa olcifera)

- Soya beans (miso)

- Magnesium Stearate

The raw materials used for BARCH-Multi Dietary Supplement:

- Salba seeds (salvia hispanica) *imported

- Ginger root (zingiber officinale)

- Malunggay seeds (moringa olcifera)

- Magnesium Stearate

C. RCBA Manufacturing Corporation Manpower:

- CEO - Mr. Romeo C. Ang

- Manila-based consultant

- 2 machine operators

- Office Staff (9 employees)

Table A. presents the chronological order of events used by RCBA Manufacturing

Corporation during its herbal powder production. A more detailed Flow Process Chart and Flow

Diagram is shown in Appendix A page 19 and 21.



12

Table A.

Chronological Order of Events in Herbal Powder Production (material flow)

Event Description Time (hr) Distance (m)

1. Washed

2. Dried

3. Moved to Grinding area

4. Grinded using Grinder

5. Filtered to remove lumps

6. Moved to Baking area

7. One side is baked using a Baker

8. Flipped to other side

9. Other side is baked

10. Left to cool

11. Move to Packaging area

12. Packaged into 25kg sacks

3

2

0.25

1

4

0.17

4

0.17

4

18

0.20

0.50

24

16

18

Total Time: 37.29 hours

Percent Value Adding: 44.2%

Table A. reveals that out of the total 37.29 hours of production per batch, the biggest

contributor to the non-value adding percentage is the cooling process takes 18 hours to cool which

is roughly 48% of the total time. The team believes that this is the root cause of the low utilization

ratio.

This shows that the team has to look into the cooling process which takes up almost 50%

of the total production time. This arises because after baking, it can’t be moved to a coolerenvironment due to its immense hot temperature thus it is left inside the factory to cool.

The Flow Diagram shown in Appendix A page 19 reveals that the production had some

backtracking going on and this could be because of the positioning of the machines being utilized

and the space of each room which these machines occupy, some of the machines need bigger space.



13

The Flow Diagram also reveals that the washing and drying of the raw materials are done outside

and this shows that weather may affect the time it takes to wash and dry the raw materials

especially during the rainy season when drying would take longer.

Current Performance Productivity:

=

100

39.27 ℎ = 2.68 boxes / hr



14

CHAPTER 3

PRESENTATION OF ALTERNATIVES, CONCLUSIONS AND RECOMMENDATIONS

Presentation of Alternatives

1. Purchasing and installing exhaust fans in order to cool the powder.

The data the researchers had found shows that the Cooling process after the powder is

cooked is roughly 48% of the total time (18 hours). This means that this process is

nearly half of the entire process, but that doesn’t mean it necessarily has to take that

long. The reason why it takes this long is because the powder cannot be moved after

baking; it has to be left inside the factory to cool. The installation of exhaust fans in the

machine would make the factory cooler as well as help with the cooling process. These

exhaust fans could effectively reduce the time it takes to cool, reducing the overall total

time.

2. Purchasing a Mechanical Dryer to dry raw materials after washing.

One issue that RCBA’s powder production has is that when weather conditions are

bad — cloudy to rainy — they have to stop the drying process, making it an unavoidable

delay with the current set up. They solar dry their raw materials meaning that they are

at the mercy of the weather. Adding a mechanical dryer will greatly improve the

process because if they have a mechanical dryer, there would be no need to stop the

process; thus, this deals with one of the factors that could greatly affect production.

3. Factory Layout Rearrangement.

The raw materials are constantly being moved here and there. RCBA could rearrange

the machines inside the factory in order to reduce the total transportation time (currently

at 0.62 hours). Reducing the transportation time would reduce the total time as well as

increase the overall percent value adding of the powder production process.



15

Cost Benefit Analysis for evaluating alternatives:

Expected Changes in Productivity, and Cost of the alternatives

Method Changes Δ Productivity (%) Δ CTD Risk (%) Cost (PHP/hr)

1. Exhaust

2. Dryer

3. New Layout

23.11

3.47

0.78

0

0

0

0.46

0.28

0.17

Sample Computation of Productivity (exhaust):

New Cycle time: 30.29 hrs <- since cooling time is reduced New Productivity: 100 / 30.29 = 3.3 boxes / hr 23% more than the original (2.86 boxes /hr)

The productivity % shows how much more percent of boxes can be produced if the

corresponding three alternatives are implemented. The cost on the right most column is the cost of

the alternatives, converted to PHP per hour rate, since the productivity is also per hour. The

Exhaust has the highest risk, although, still very minute, since there can be risks of the exhaust

overheating if overused.

Cost Benefit Ratio Table

Method

Changes Productivity

Benefit

Injury rate Total Cost (PHP/hr)

Cost

Benefit

1. Exhaust

2. Dryer

3. New Layout

620

93

21

0

0

0

620

93

21

0.46

4.28

0.17

0.0007

0.05

0.008

The productivity shown is how many more pesos the company earns per hour if it

implements the corresponding alternatives. The cost-benefit ratio is obtained, and it shows that the

exhaust alternative is the best alternative.



16

Evaluating Alternatives

RCBA Manufacturing Corp. A B C

Process: Powder

Production

ALTERNATIVES

Exhaust Dryer New LayoutDate: 10/20/14

Analyst: Team Hokusai

Ratings and Weighted Ratings

Factor/Consideration Wt A B C

Increase in Productivity 8 10 80 3 24 1 3

Decrease in Injuries 3 0 0 0 0 0 0

Low-cost Solution 7 5 35 1 7 10 70

Totals 115 31 73

From the table above, it can be evaluated that the new exhaust is the best alternative to

use. This is because it increases the cooling rate thus decreases the cooling time considerably.

The New layout alternative can also be implemented alongside the exhaust alternative since it is

has a low cost and is hassle free.

Conclusion

It can be concluded that RCBA Manufacturing Corporation really needed improvement in

their herbal powder production process. The cooling time was too long, and needed to be improved.

Thus, with the use of the cost benefit analysis for evaluating our alternatives, the analysts

can clearly see that the use of an exhaust fan alternative is optimal. When an exhaust fan is

installed, production increases by 23.11% --- from 2.86 boxes per hour to 3.30 boxes per hour.

The exhaust fan alternative also has the highest total weighted rating of 115 which is why it is

statistically chosen to be the most optimal alternative for the process. If alongside this, the

machines are also rearranged properly (as shown in the flow diagram in appendix A page 21), The

Productivity can be increased by 25%.

The Methods Improvement Study increased the productivity by 25%, this surely has an

impact on the revenue of RCBA Manufacturing Corporation.



17

Recommendation

Based on the findings and conclusions, these are the recommendations of this study:

1. One thing the analysts strongly recommend is applying the exhaust fan alternative while

also applying the new layout alternative. All the new layout alternative requires is a little

manual labor in order to move the machines around, in order to reduce the distance

travelled. This alternative has the lowest cost among the rest, and coupling this with the

exhaust fan alternative would greatly increase the productivity of the whole process.

2. A yearly evaluation of the new method for the herbal powder production process should

be made to identify which events have problems and how RCBA Manufacturing

Corporation would be able to address to these problems and improve their production even

further.

3. The next researchers must study on the possibility of utilizing the unused rooms located

inside the factory and the open space outside the factory wherein they could further

improve the factory layout thus possibly further improving the production rate.

Bibliography:

http://www.rcba.com.ph

http://www/

http://www/



FLOW PROCESS CHART

NO.

SUMMARY PAGE OF

PRESENT PROPOSED DIFFERENCE JOB

NO. TIME NO. TIME NO. TIME

OPERATIONS MAN MATERIALTRANSPORTATIONS CHART BEGINS

INSPECTIONS CHART ENDS

DELAYS CHARTED BY DATE

STORAGES

DISTANCE TRAVELLED

TOTAL TIME

% VALUE ADDING

ANALYSIS ACTION

DETAILS OF

PRESENT

O P E R A T I O N

T R A N S P O R T

I N S P E C T I O N

E L A Y

S T O R A G E

D I S T A N C E

(

)

Q U A N I T I T Y

(

)

T I M E

(

)WHY?

NOTES

CHANGE

W H A T ?

W H E R E ?

W H E N ?

W H O ?

H O W ?

E L I M I N A T E

C O M B I N E

S E Q U E N C E

P L A C E

P E R S O N

PROPOSED

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.22.

23.

24.

25.

26.

27.

1

1 2

Herbal Powder Processing

Washed

Dried under sun

Moved to Grinding area

Grinded using Grinder

Filtered to remove lumps

Moved to Baking area

One side is baked

Flipped to the other side

Other side is baked

Left Idle to cool

Moved to Packaging area

Packaged into 25kg sacks

using a baker

Raw material is washed

Raw material is packaged into 25kg sacks

Team Hokusai Oct. 1, 2014

hrm

3

2

0.25

1

4

0.17

4

0.17

4

18

0.20

0.50

83

0

0

1 18

0.6218.67

0

0

37.29 hrs

44.2%

24

16

18

58 m

Can be done using drying machine

Exhaust can be used

APPENDICES

APPENDIX A

18

Can be done in baking area

Can be done in baking area

30 m

30.01 hrs

55.01%

8

3

0

0

1

0

0

11

18.67

0.34

0

0

0

0

0

0

0

0

0.28

9

28 m

7.28 hrs

10.81%



NO.

PAGE OF

ANALYSIS ACTION

DETAILS OF

PRESENT

O P E R A T I O N

T R A N S P O R T

I N S P

E C T I O N

E L A Y

S T O

R A G E

D I S

T A N C E

(

)

Q U A

N I T I T Y

(

)

T

I M E

(

)WHY?

NOTES

CHANGE

W H

A T ?

W H E R E ?

W H

E N ?

W H

O ?

H O

W ?

E L I M I N A T E

C O M

B I N E

S E Q U

E N C E

P L A C E

P E R

S O N

PROPOSED

28.

29.

30.

31.

32.

33.

34.

35.

36.

37.

38.

39.

40.

41.

42.

43.

44.

45.

46.

47.

48.

49.

50.

51.

52.

53.

54.

55.

56.

57.58.

59.

60.

2 2

1

m hr

10.

11.

12.

24.

23.

22.

21.

20.

19.

18.

17.

16.

15.

14.

13.

36.

35.

34.

33.

32.

31.

30.

29.

28.

27.

26.

25.

9.

8.

7.

6.

5.

4.

3.

2.

1.

19

Washed

Dried

Moved to Grinder

Grinded ny Grinder

Filtered to remove lumps

Moved to Baker

One side is baked using a baker

Flipped to the other side

Other side is baked

Left idle to cool

Moved to Packaging Area

Packaged into 25kg sacks

14

11

5

3

2

0.15

1

4

0.12

4

0.17

4

11

0.07

0.5



22

APPENDIX B

TRANSMITTAL LETTER

August 27, 2014

To Whom It May Concern,

Good day.

I am Felixter Chua, a third year Industrial Engineering student from the University of San Carlos

currently taking up IE314L, Method Engineering Lab. Part of our course requirement is to visit an

industrial or manufacturing company. In behalf of our group, I would like to request your approval

of visiting your good company for a few hours on October 1, 2014. The purpose of this visit is for

us to learn more about your company and see what you do, to improve our skills in identifying

industrial processes and hopefully for you to know how Industrial Engineering in the University

of San Carlos is preparing its students to work in companies like yours.

I hope you will give us the opportunity to visit your company, know the company and some of

your staff better. I assure you that this will be a productive visit that would hone our skills to

become better Industrial Engineers in the future.

Sincerely yours,

Felixter Leone S. Chua

3rd year Industrial Engineering student

ie 314l - methods lab term paper

Documents