A REPORT ON MALIKA RICE MILL

Submitted to: Sir Rai Imtiaz Hussian

Submitted by: Omer Zia (137)

Mubeen Asghar (156)

Umair Ahmed (164) BBA VII SEMESTER EVENING

I

PREFACE

This report practically shows the major process decisions that Malika Rice

takes, management of its processes, major quality assurance methods and steps taken to improve its quality, production capacity and how it achieves economy of scale and selection of its layout.

II

DEDICATION

My great mother

AND

Loving father whose prayers are great sources Of Strength to me in every venture.

MY

Loving brothers and sisters who supported me with lovely attitude and long Passion for completing

My work and who’s sincere invoke success throughout my life.

AND

My teachers who helped me through out the process

AND

All of those who love and help me in this process

III

ACKNOWLEDGEMENT

In the name of “Allah”, the most beneficent and merciful who gave us

strength and knowledge to complete this report. This report is a part of our course “Operations Management”. This has proved to be a great

experience. We would like to express our gratitude to our Operations Management teacher Mr. Yasir Ghafoor; who gave us this opportunity to fulfill this report.

O.Z & M.A & U.A

IV

TABLE OF CONTENTS

Description Page No.

COMPANY PROFILE 1

Name of Company 1

Monogram 1

Slogan 1

Status 1

Industry 1

Mission 1

Vision 1

OPERATIONS AS COMPETITIVE TOOL 2

Introduction 3

Process of Rice Mill 3

PROCESS MANAGEMENT 4

Process of Malika Rice Mill 5

Major Process Decision 7

Job Design Consideration 9

Managing Project Process 10

Key Activities Associated with Managing A Project 11

TOTAL QUALITY MANAGEMENT 13

Customer Driven Definitions of Quality And Company’s Response

14

Cost of Poor Quality 15

Employee Involvement 15

Continuous Improvement 15

Improving Quality TQM 16

CAPACITY 17

Mill’s Capacity 18

Short Term Capacity Plan 18

Long Term Capacity Plan 18

Process in Bottleneck 18

Economy of Scale 19

LAYOUT 20

Layout of Malika Rice Mill 21

INVENTORY MANAGEMENT 22

Dependent & Independent Demand 22

High Inventory Pressure That Company Face 23

CONCLUSION 24

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COMPANY PROFILE

Name of Company: Malika Rice Mill’s (pvt) Ltd Monogram:

Slogan: “Khana hi tu jeena hai”

Status: Private Company

Industry: Food

Mission:

“We serve our clients as a trusted ally, providing them with the loyalty of a

true business partner. We believe in treating our employees as family, As they are our strength. We are committed to mutually shared

Values and believe in achieving the highest levels of customer Satisfaction, with extraordinary emphasis on the creation of Value. The Company is committed to quality management

And continually strives to improve processes for its clients. In this fashion, we ensure that our quality

Goals and growth plans are met.”

Vision:

“To be recognized and respected as a leader

In quality and value in the industries We serve, while expanding

Into new markets.” Value:

“We follow a professional approach in imparting our responsibilities.

Hence, all of our dealings reflect the highest standards of Accountability, punctuality, customer focus and integrity.

We recognize that it is these values that

Have led to our success.”

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OPERATIONS AS A COMPETITIVE TOOL

Introduction

Malika rice mill is situated on the Faisalabad road near the Baba Farid Sugar Mills.

Process of Rice Mill

The process starts from the purchasing of raw material (Paddy), the next step is to clean it from dust and wooden particles which may effect the final product. In the next step it is process to the boiler where the paddy is

rotated for three sessions respectively. These rotations may vary with the kind of paddy. Then the boiled paddy is processed to elevators to dry

through the vaporization. Then this output will turn into input of next department of threshing. The input is send through job automation towards threshing machines where it

is processed to gain rice grains. Then they are processed for polishing before polishing damaged and weak grains are separated in a nested

process. Now the final product is available to send in the market. For executive class and import quality this is processed further to a separate polishing plant where the weak and damaged rice is separated

again and polished. Extra food colure is also added according to the demand of customer and market. This colure gives a good look to rice.

After this they are packed according to the need of customer. Now an import and executive class product is ready for marketing.

Internal Customers

Department of threshing plant and polishing plant are the internal customer. Threshing plant takes the input from boilers and polishing plant

from threshing.

External Customers The persons relate to rice business and publics markets are the external

customer of the business.

Nested Process Polishing process is the nested process in which at the first time the

damaged rice are separated then weak in the next and processed for polish.

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PROCESS MANAGEMENT

“The selection of input operations and methods that transforms input into output.”

Process of Malika Rice Mill

Pre-cleaning & Par Boiling

Par boiling and husking is the most common and important process in rice processing. From our storage units, the paddy is cleaned .Here dust is removed from the paddy .Then paddy is sent to other machines that grade the width. This is

done to remove immature paddy .These machines are automatic and fine tuned for fine paddy out put. The mature paddy is then PRE STEAMED. The PRE

STEAMED paddy is the kept steam wet for about 12 - 14 hours in our chambers. These chambers are basically boilers. We are the only rice mill in Pakistan having the Imported PAR-BOILING PLANT. This is latest and most efficient plant in

rice industry. Here rice is passed through chambers of steam. After this process the rice is called SAILA means par boiled.

Once rice is par boiled it is passed through our special dryers. These dryers are efficient enough as they reduce moisture in the paddy to 8% and even below that level.

Paddy Separators

Coloring &

Polishing

Final Graders

Dry

Polishers

Destoner

Size

Graders

Stock Bin

Paddy Separation (Husking)

Dryer

Pre-cleaning & Par Boiling

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The par boiled rice is then kept for a few hours in bags and passed through different machines. This process includes PADDY CLEANING for

fine quality paddy PADDY HUSKING for HUSK separation and other unwanted material from the paddy.

Stock Bin

After the rice is passed through the separators, it then enters in the

process of whitening, The clean and white rice large bags are then poured in STOCK BIN. Here rice is kept and sent to other processing

requirements. These processing includes passing of rice through various machines that separate further unwanted material from rice. We use machines called COMBI CLEANERS known high quality machines.

Size Graders [Thickness Graders]

After the rice is purified to some extent, it is then passed through the SIZE GRADER machines. also known as thickness graders. Our these machines are latest and finest in the world that filter UNDER SIZE and

OVER SIZE rice grains from each other. This is done in worlds finest machines in our mill.

Destoner

As this is natural that harvested rice contains lots of small pebbles and pieces of stone, There are very efficient and modern machines in our rice mill known as DESTONERS, which separate stones from rice making it

more purified from any kind and size of stone.

Dry Polishers

Once the rice is cleaned from stones it is whitened and polished in special machines. We have state of the art polishing machines called NF-14 from

CHINA. The rice is passed through DRY POLISHING machines and then MIST POLISHERS. After then its is passed through special machine called SILKY POLISHER that further refines individual grain of rice. Once it is

done through fine quality rice is again passed through the graders. These machines again separate the different size of rice grains and filter them. In

our rice mill we have special machines that further filter the rice after this called THICKNESS GRADER for over size rice , LENGTH GRADER and once again COMBI CLEANER is used. This removes any dust if remained

on the rice grains.

Color Master

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This fine quality rice is then passed through special machine called COLOR SEPARATOR or COLOR MASTER. Here dark colored rice grains

are removed from the rice making it clean, pure and polished white.

Final Graders

Once the rice is passed through color master , it is then passed through a wide range of machines that further grade the length. This is all done

through automatic high quality machines in our mill.

Major Process Decisions

1- Process choice “How operation’s strategy is implemented?”

Project Process Job Process

Batch Process Line Process Continuous Process

Malika Rice Factory adopting continuous process because they are

producing the product which is falls in the common needs of the consumer. Rice has no artificial feature so; there is no need of changing process choice. This process is capital intensive and operated round the

clock so, it maximizes their utilization and avoid shut downs.

2- Vertical Integration “Which services and products are created in-house?”

Backward integration

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Forward integration

Few years ago, they decided to expand their market. To meet this goal they started to export rice. They signed contract with Kohe-e-Noor rice factory to polish the final product because they don’t have their own

polishing plant. This contract increased their cost of production. They decided to do forward integration and have their own polishing plant

to minimize their cost. In 2007 they built their own polishing plant and reduce production and transportation cost. Not only they polish their own product but also they polish rice of other factories and generating

revenues.

3- Customer Involvement

“To what extent the company involves their customers?”

Malika Rice involves customers (dealers) in process of polishing of the rice. And polish it according to the need of their customers.

Self Service Product Selection Time and Location

a) Product Selection

They colored the rice according to the need of the customer. For example

if customer demands dark color then they adds dark color if he demands light color then they add light color to the rice.

b) Time and Location

They deliver the product where customer demands and when customer

demands.

4- Resource Flexibility Malika Rice’s workforce is capable of doing many tasks. If one employee

is on leave or if any other problem then other employee can perform his duties.

5- Capital Intensity

“How firm depends on machinery and automated process?”

Fixed automation

Flexible automation

a) Fixed automation:

They use fixed automation from pre-cleaner to the process of development

of sela rice from paddy.

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b) Flexible automation:

In polishing plant they use flexible automation because they offered customize product, so some flexibility is needed in machinery.

Job Design Consideration In job design consideration manager decides that how much should the job be specialized or enlarged.

Job Specializatio A job specialization involves a narrow range of tasks, high degree of repetition, great efficiency and high quality. Malika Rice is not currently using job specialization because they are

using alternative to job specialization.

Alternative to specialization

Malika Rice is using following alternatives to reduce job specialization: Job Enlargement Job Rotation

Jon Enrichment a) Job Enlargement

Here employees in the same department and at the same level have

capability to operate various machines. b) Job Rotation

On weekly basis they rotate their employees from one job to another.

e.g. Boiler operator appoints next week as dryer operator. c) Job Enrichment

If Supervisor of any department on leave then the senior employee of that

department starts his job as supervisor.

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MANAGING THE PROJECT PROCESSES An interrelated set of activities that has definite starting and ending point

and results a unique outcome for a specific allocation of resources.

Key activities are associated with managing a

project:

1- Defining and organizing the project

1.1 Select the project team and manager

In rice processing control is centralized so the team completely depends upon the manager. It is the responsibility of the manager to define the performance, goals and evaluate the performance against previously

settled performance standards. 1.2 Defining the scope and objective

It is company’s policy to clearly define the scope and objectives of the

project to avoid any conflict among employees in the future about completion of project. 1.3 Efficiency and organizational structure

The efficiency of the project team is often influenced by the firm’s organizational structure. Malika Rice factory follow the traditional structure whereby the project is

housed in specific functional area. Under this structure the project manager has minimal control over the timing of the project but the

resource duplication is minimized.

2- Planning the Project 2.1 Defining the Work Breakdown Structure

List of activities:

1. Pre-cleaning & Par Boiling 2. Dryer

3. Paddy Separation (Husking) 4. Stock Bin

5. Size Graders (Thickness Graders) 6. Destoner 7. Dry Polishers

8. Coloring & Polishing 9. Final Graders

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2.1 Diagramming the Network

Activity Schedule:

Activity Time Predecessor

A 10 Hours -

B 2 Hours A

C 2 Hours B

D 2 Hours C

E 1 Hour D

F 1 Hour E

G 2 Hours F

H 3 Hours G

I 1 Hour H

Network Diagram

10 2 2 2 1 1 2 3 1 Critical Path: A – B – C – D – E - F- G – H - I = 24 HOURS

Slack Time = 24 hours

14 D 16

14 2 16

20 H 23

20 3 23

18 G 20

18 2 20

17 F 18

17 1 18

16 E 17

16 1 17

23 I 24

23 1 24

12 C 14

12 2 14

10 B 12

10 2 12

0 A 10

0 10 10

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TOTAL QUALITY MANAGEMENT

“It focuses on three things customer satisfaction, employee involvement

and continuous improvement in quality”. Malika Rice have laid strong emphasis on modern and state-of-the art

operation. As the latest technology used in Japan and Europe we have installed the best machines ,like SATAKE , Japan. Among the rice milling

industry there is an increasing upgrading with high-tech processing equipment and control systems. We use computerized methods where applicable. In every aspect we believe that with out the usage of advanced

technology no one can meet the strict criteria of quality production that is why we give quality, the most priority order. Our BASMATTI RICE is

meeting the highest standards of quality.

Customer Driven Definitions of Quality And

Company’s Response

In this section we see how customer perceives the quality of the product and how company response to the expectations of the customer’s

responses.

a) Conformance to Specification Customer expects the rice they buy meet advertised level of performance. Company’s Response: On the packaging of rice it is mentioned that after

cooking it will be crispy and actually the rice of Malika Rice is crispy.

b) Value

Customer defines quality in sense of value as “How well the product serves its intended purpose at a price customers are willing to pay”. Company’s Response: They provide neat and clean Basmati rice at

reasonable price.

c) Fitness for Use

Some customers define quality in sense of fitness for use like, “How well the product performs its intended purpose”. Company’s Response: The Company is not using the chemicals that put

bad effect on the health of final users.

d) Psychological Impressions People often evaluate the quality of the product on the basis of Psychological Impressions: look, image and atmosphere etc. Company’s Response: They are using attractive packaging and with help

of polishing plant they create shine in the rice to attract customers.

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Cost of Poor Quality

This can be seen as difference between what is actually cost provides to provide a good or service and what it would cost if there was no poor

quality or failure.

Prevention Cost In the beginning Company uses medium size silver heaters in dryers of paddy which were not capable to completely dry paddy, Company’s managers think that this may effect the quality, before this any bad effect on quality had occur they replace them with large size silver hetaeras. Appraisal Costs Company uses different types of inspection instruments to check that

broken out rice and less healthy is properly separated from the healthy rice. The cost of these tests is called appraisal cost.

Internal Failure Cost If due to any error in machine the customer receives the rice which also includes broken rice then the additional cost to reprocess and separate

broken and healthy rice is the company’s internal failure cost.

Employee Involvement The control of the Malika Rice factory is totally centralized because they

produce the product which is common in market and it doesn’t need artificial features. So there is no need of employee involvement.

Continuous Improvement “The philosophy of continually seeking ways to improve operations based on japans concept called kazien”.

Malika Rice also focus on continuous improvement.

Getting started with continuous Improvement

1) Training of Employees:

On job

Off job

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They are using on job training method because it has less cost as compare to off job training. Another reason for using on job training is that

they are not using sensitive and complex machinery.

2) Problem Solving Tools:

Every machine operator has its own tool kit. And whenever any operating problem occurs they solve it on the spot.

3) Operator Ship in the Process:

Management is very responsible and every time they make sure that the machine operator are operating machines, to maintain good quality.

Improving Quality Through TQM Purchase Consideration 1) No of Suppliers:

To check and balance the quality of raw material they keep only small

number of suppliers. They don’t depend on same suppliers, instead of it they change them time to time.

2) Focus on Quality:

They always focus on the quality of the suppliers rather than quantity.

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CAPACITY

Mill’s Capacity

The mill’s total production is two lace bags (10,00,000 Kg) per annum. But the industry has the latest polishing plant attracting the outsiders to polish

their product for marketing.

This capacity is between (7,50,000 - 10,00,000Kgs) annually.

Short Term Capacity Plans

Regarding to short term capacity plans they are going to enhance the workforce as well as the budget to overcome the market.

Long Term Capacity Plans The business is going to locate a new polishing plant to fulfill the industry demand.

Utilization The utilization rate of Malika rice mill is: Utilization Rate = (Avg. output / max. capacity) * 100

Utilization (Peak)

Utilization at peak capacity is:

Utilization Rate(peak) = (Avg. output / max. capacity) * 100 = (875000/1000000)*100 = 87.5%

Utilization (Effective)

Utilization at effective rate is: Utilization Rate (Effective) = (Avg. output / effective capacity)*100 = (875000/750000)*100

=116.7%

Process in Bottleneck The transformation of raw material to threshing machines is purely

dependent upon the man power. The impose bottleneck upon the current and next operations.

Solution Of Bottelneck

What is the problem:

The problem is the not proper use of job automation. The preceding and

next operations are fully automated.

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Exploitation

Prepare a schedule which maximize the through put

Subordinate All Other Decisions

Describe all other decisions as sub ordinate to this process

Elevate The Bottle Neck:

If there is still error then revise step 1 & 3.

Solution

Department should be job atomized. Because the previous and the next departments are effected by this.

Economy of Scale

As the output increase the cost will decrease.

Spreading Fixed Cost

As the fixed cost spread over more units this will decrease the input cost.

As they purchase in bulk they gain discount.

Capacity Strategy

They use the process layout because they have a continuous process so they follow a lineare path as defined.They also used fixed position layout in all there departments specially in polishing plant

.

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LAYOUT

Where all plants should be located which give the maximum facility to the

origin.

Layout of Malika rice Mill

They use the process layout because they have a continuous process so they follow a linear path as defined. They also used fixed position layout in all there departments specially in polishing plant

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INVENTORY MANAGEMENT The type of inventory management system employed is determined by the nature of the demand for the goods and services on the organization.

Demand can be classified into two categories. Dependent and independent

Dependent Demand A dependent demand item has a demand which is relatively predictable because it is dependent on other factors.

It is the company’s regular inventory demand which depend upon factors like capacity of the machinery and labor force.

Independent Demand

Independent demand is when the demand is not directly related to the demand for any other inventory item. Usually this demand comes from the

customers outside the company so it is not predictable as dependent demand. Company with help of forecasting maintains a safety stock in shape of final

rice and extra raw material in shape of paddy.

High Inventory Pressures That the Company Face

1-Customer Service They are producing product which is commonly use a through out the year

in Pakistan and exported to foreign country. And much time they face uncertain demand from local and foreign side. To predict i tself from

stockout situation the company can maintain a safety stock in shape of finished goods.

2-Ordering Cost

In season of harvesting of paddy they purchase it for whole the year and automatically ordering cost of company reduces.

3-Labor and Equipment Utilization By purchasing paddy for the whole year they effectively use their resources of labor and equipment and also get the economy of the scale.

4-Payment to Suppliers Company also get discount in total payment to suppliers by purchasing inventory in bulk.

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Today's business has become more complex than before. There is need to

see and manage any business with new scientific methodology. So this is good technique to teach students by practical research on report. This will

provide business students more practical nature. We have learnt much more from this report. We think this have created different operational management abilities as well as a sense of experience, confidence and

self reliance in us. At last we offer special thanks to our kind teacher, who enable us to

complete this work successfully.