CHAPTER 1

INTRODUCTION

1.1 GENERAL BACKGROUND

Batch process is a concept that many manufacturing firms follows in order to improve
efficiency, lower capital costs and reduce wasted time. This technique facilitates in
completing specific tasks all together, in different batches, rather than completing a full
process on its own. Manufacturing of small batches also allows in meeting customer
demand. Waste and inventory can be reduced by producing only what is needed in order
to meet the demand. Many batch process manufacturing firms works with poor operation
planning, excess cycle of operation and lack of proper forecast. Due to this the firm may
fails to meet the customers demand. Lack of effective balancing of demand with supply is
one of the major problems faced by many batch process manufacturing firms.
Manufacturers face many challenges in determining what to make, how much to make,
and when to make it. When the firm fails to meet these challenges effectively, they suffer
from a multitude of consequences. Keeping the demand and supply in a balanced form is
a constant struggle in many manufacturing industries.

A batch process manufacturing firm has been chosen for the study. Aluminium Industries
Limited (ALIND), Kundara, Kollam is one of the top Electric Relay dealers which
manufactures Vacuum circuit breaker for Indian Railway. The company follows German
technology for assembling the Vacuum circuit breaker (BLR system).There are 68
permanent workers in the company. The company has single shift from 8:30am to 4:30pm
(regular shift). Initial discussions with the top manager of ALIND, Kundara has indicated
that the company fails to meet the customer demand. Current monthly demand of the
company range from 120-150 numbers of Vacuum circuit breaker. But the company is
able to produce only 70-100 numbers of Vacuum circuit breaker per month.

The reasons for lacking production committed in a company are many such as inventory
management, out-date machinery, fluctuation in demand, power breakdown, lack of
sufficient manpower, absenteeism etc. There may be different reasons for a good firm
getting stable demand but facing production committed (i.e. not meeting the demand).
This work addresses the issues faced by a medium size batch manufacturing firm to meet
the demand. The work provides production status, capacity of the firm, utilization of
resources, various factors that affect the production etc. by using different technique of
Industrial Engineering. The limitations found from the study are examined. The main
focus of the study is to propose alternatives for improving the ability of the company to
meet the demand commitments.

1.2 RELEVANCE OF THE STUDY

Demand and supply are both fundamental concept to economic activity. Both of them
influence each other and have great impact on prices of consumer goods and services
within an economy. Supply is defined as the amount of a particular good or service
available to consumers at a given time. Demand is defined as a measurement of consumer
wish and consumer contribute on a particular good or service at a certain price. The
interaction between supply and demand influences the price of a commodity. Firm need
to know about the consumer behaviour to understand the current and future demand of
the commodities. The current status of a firm can be said well enough if the supply of the
firm meets its customer demand. Hence the improvement in productivity of the firm is
one of the major step need to be taken in order to solve the demand-supply issue.
Managers will use the results to formulate marketing goals to improve their
organizational performance.

1.3 SCOPE OF THE STUDY

The scope of the study is to make the necessary changes in the manufacturing
strategy that the company is looking for to increase productivity. For the academy, this
study will form the basis of future studies. This provides academics with a good basis for
studying the research gaps in this area. The proposed study will shed more light on how
companies can use production strategies to achieve organizational goals and optimize
their performance.
 1.4 OBJECTIVES

The objectives of this study are as follows:

 To conduct work-study to find the current capacity of the plant.

 To identify different significant factors affecting productivity in the firm.
 To recommend improvement with justifications.

1.5 PROBLEM DEFINITION

Based on past monthly production-scales statistics it is noticed that the company

is having production-demand gap. The firm is unable to meet the target given and
not able to deliver the product at the right quantity at the right time.

demand supply
132 140 140 140
125 125 130 130
120
100 100 100
79 80 85
72 72
55 60 62
50 50
35 40

jan feb march april may june july augst sep oct nov dec

Figure 1.1: Monthly Production Statistics