Beer Manufacturing (Kingfisher)

A Project Report on Operations Management

Project Report on

‘ Operations Management’

SUBMITTED BY:

Ameya Guhagarkar (14)

Deepa Kodag (23)

Hitendra Jain (37)

Anita S. Phaterpekar (38)

Suraj Purohit (40)

Viral Shah (48)

Pallavi Shetty (49)

Omkar Tulaskar (54)

Anita Anand (60)

Submitted in partial

fulfillment of the requirement

of 1st Semester of MMS course,

Mumbai University

Bharti Vidyapeeth’s Institute of Management Studies and Research 2008-2009


CERTIFICATE

I, Prof. N.K.Agarwal , hereby certify the below mentioned group of BVIMSR of MMS-I (Division A) have completed the project on “Operation Management” in the academic year 2008-2009.This information submitted is true and original to the best of my knowledge.

Ms Anita S. PhaterpekarMr. Ameya GuhagarkarMs Anita Anand Ms Deepa KodagMr. Hitendra JainMr. Omkar TulaskarMs Pallavi ShettyMr. Suraj PurohitMr. Viral Shah

Signature Signature Project guide DirectorProf. N.K.Agarwal Dr D.Y.Patil


DECLARATION

We, the group members of OM project hereby declare that we have visited United Breweries, Taloja, and the information provided in the report is true to best of our knowledge.


ACKNOWLEDGEMENT

We wish to express our deep gratitude towards all the persons who have contributed

towards this project and helped develop ideas and approach in writing this report. We

thank Mr. Ashok Katta, Senior HR Manager, and all officials of United Breweries plant

who guided us in this project.

We are grateful to Professor N. K. Agarwal, Faculty of subject Operations

Management, MMS-I, B.V.I.M.S.R. (Belapur, Navi Mumbai), for his guidance

throughout our project work.

We would like to thank Prof. Dr. D.Y Patil, the director of Bharti Vidyapeeth’s

Institute of Management Studies and Research, Belapur, Navi Mumbai for his

kind permission to carry on our project work and his co-operation.

Last but not the least we would like to thank all our college friends for their

encouragement and moral support.


Operations management is understood as the process whereby resources or

inputs are converted into more useful products.

Company ProfileUnited Breweries Limited, the flagship company of the UB Group, has an association with the brewing dating back over five decades, starting with 5 breweries in South India in 1915. From bullock cart-loaded barrels or 'hogheads' of frothing ale, the Beer business has gone on to become the undisputed 'king' in the Indian beer market.

Here, innovative, creative and aggressive marketing is complemented by a strong distribution network. A management focused on building brand equity on one hand and exploiting it to the hilt on the other. A concerted emphasis on quality.

UBL today boasts an impressive spread of own and contract manufacturing facilities throughout the Country.

Quality and hygiene are the key elements of the United Breweries' manufacturing philosophy. To this end, the Central Scientific Laboratory (CSL), headquartered at Bangalore sets standards for all its breweries. Quality Management Systems laid out along the lines of ISO 9000 are strictly adhered to, controlling quality at every stage of production, from raw materials to the end product. Also, besides controlling the production process, the CSL analyses the Company's beer taken off market shelves all over the Country, the competition's beers and beers across the world. These beers are tested as per the standards laid down by the European Brewery Convention on 40 different parameters. By these standards, United Breweries' beers don't just equal, but even surpass, several Dutch and American beers.

Its flagship brand 'Kingfisher', has achieved international recognition consistently, and has won many awards in International Beer Festivals. Kingfisher Premium Lager beer is currently available in 52 countries outside India and leads the way amongst Indian beers in the International market. It has been ranked amongst the top 10 fastest growing brands in the UK.

In addition, UBL has also entered into mutli-faceted strategic alliance with Scottish & NewCastle Plc (S&N), an international brewery major, with $6 billion in revenue and a market capitalization of $5.4 billion. This alliance, apart from having a joint venture in India, will allow S&N to market it International brands like Kronenbourg in India, while UBL will utilize S&N's global network to further globalize its Kingfisher.


Division Profile: Taloja

The beer manufacturing unit of United Breweries is located in Maharashtra Industrial Development Corporation (MIDC) at Taloja in Navi Mumbai.The UB group has a state-of-the-art fully automated manufacturing unit at Taloja in Navi-Mumbai. This plant maintains a very high standard of hygiene. The division has comprehensive quality assurance system which ensures that products are backed by the best of quality processes and ingredients, and measure up to world - class hygiene standards.The unit is spread over sprawling area of 22 acres and was the first green field project of the UB group.

Benefits of MIDC

Water Supply

MIDC has, over the years, created a vast, robust and reliable water supply system. The system caters to the water needs of the industries within MIDC industrial areas and also those outside, in the adjoining areas. Not only that, the system caters to the needs of many large and small local bodies all over the State which in turn serve their domestic and commercial consumers.

MIDC supplies treated, potable water to all industrial units.

Some facts about MIDC's water supply systems:Total Installed Capacity of the system: 1940 MLDCurrent Utilization: 1286 MLD

Consumer Base:Industrial: 26564 MLDDomestic: 2829 MLD

MIDC's sources of water:Irrigation dams: 65%MIDC dams: 34%Others: 1%

Total Reservation availableDomestic: 12485 MLDIndustrial: 4055 MLD


The above reservation figures indicate the extent to which MIDC has rights to draw water from rivers, irrigations project and other sources. The reservation figures indicate that MIDC still has large unutilized rights, which can be used for future expansion of its water supply systems.

Superior Infrastructure:The following gives a snapshot of MIDC's water supply infrastructure:

No. Of Schemes 69No. Of Dams 05Capacity of pump system 7787 HPLength of Pipelines 2864 Kms

Drinking Water Standards:


CHARACTERISTICS

Turbidity

Taste and Odour

Color (Pt Scale)

pH

Total Solids

Total hardness (as CaCo3)

Magnesium

Iron (Fe)

Manganese

Copper

Chloride

Sulphate (as SO4)

Phenolic substances

Fluoride *

Nitrate

Zinc

World Health Organisation-1971Highest Desirable

Maximum Permissible

5.0 25.00

Nothing Disagreeable

5.00 50.00

7.0-8.5 6.5-9.2

5.0 15.0

500 1500

45 45

100.0 500.0

1.0 1.5

30.0 150.0

0.001 0.002

0.1 1.0

200.0 400.0

0.05 0.5

200.0 600.0

0.05 1.0


Capacity Determination

To determine capacity a strategic decision in a facility planning is needed. The

decision is important because

These have a long term impact

Capacity determines selection of appropriate technology, type of labor

and equipments etc.

Right capacity ensures commercial viability of the business venture

Capacity influences the competitiveness of a firm.

Capacity Planning Decisions involves activities like

Assessing existing capacity

Forecasting future capacity needs

Identifying alternative ways to modify capacity

Evaluating financial, economical and technology capacity alternatives

Selecting a capacity alternative most suited to the strategic mission of

the firm

Estimating an organization’s capacity is a complex process. Capacity planning

decisions are critical to the organization’s success as they commit significant

resources. Capacity provided should provide to meet the demand level in the

most optimized manner. Capacity of machines and departments needed to

determine the capacity of a system. Increase in capacity can be achieved by

increasing the capacity of the bottlenecks.

CHARACTERISTICS

Turbidity

Taste and Odour

Color (Pt Scale)

pH

Total Solids

Total hardness (as CaCo3)

Magnesium

Iron (Fe)

Manganese

Copper

Chloride

Sulphate (as SO4)

Phenolic substances

Fluoride *

Nitrate

Zinc 5.0 15.0


Production Capacity of UB Ltd. at Taloja

Capacity – Kegs (as per market requirement)

Cans (18000 cans per hour)

Bottles (30000 bottles per hour and which can be increased to 36000)

Currently the plant is operating at 80% capacity

Location

Objective

To minimize sum of all costs affected by location, not only presently but in the

long run even

Type of Plant Location Industrial Plant Location Multi Plant Location Off Shore Location Warehouse Location Service Facility Location

Steps involve while selecting Plant Location

National Decision Within or Outside country

Selection of Region Nearness to market Availability of Raw Material Government Policy , other….

Selection of Locality or community Availability of labour Civic amenities for workers Existence of complementary & competing industries Finance & research facilities Availability of water and fire fighting services , others…..


Selection of Exact Site Soil, size & topography Disposal of waste

UBL plant for Beer manufacturing is located at MIDC Taloja, Raigad

Lay Out

Plant Layout help in determining a floor plan and arranging the desired machinery and equipment of a plant: It permits

The quickest flow of materials in processing the product From the receipt of the raw materials to the shipment of the

finished product At the lowest cost and with the least amount of handling

Objectives

Provide enough production capacity Reduce material handling cost Reduce congestion impeding movement of men and material Reduce hazards to working personnel Utilise labour efficiently Increase employee morale Utilise available floor space efficiently and effectively Reduce accidents Provide for volume and product flexibility Provide ease of supervision and maintenance Facilitate co-ordination and face-to-face communication Provide for employee safety and health Allow high machine utilisation Improve productivity

Critical Factors to be considered

Materials Product Workers Machinery Type of industry

- Synthetic• Constituent elements combining to make the final product

e.g. Chemical industry- Analytical


• Conversion of raw materials into various elements e.g. Petroleum industry

- Conditioning• Changing in shape / form or physical properties e.g.

Foundry, metal working industry- Extractive• Involving separation of one element from the other e.g.

Metal from iron ore

Each of above further classified into

Intermittent industries Continuous industries

Location Managerial policies

Types of Process Layout

Process layout Functional layout or Job shop layout• Grouping together of similar machines in one department• Material moves from one group of machines to the other• Movement over longer distance and along criss-cross paths• May also involve part finished inventory waiting

Product / Line processing or flow line layout• Machines arranged in a line depending upon sequence of

operations– Material product standardisation

• CM is a subset of GT concept– A close grouping of equipments for processing a sequence

of operations in multiple units of a part or a family of parts,called manufacturing cell

– Flow of parts within a cell can take many forms.– Use of cells reduces the distance moved by parts between

machines• moves in a line from the first machine to the finished product on

the last machine.• Investment higher as compared to process layout

Fixed position / Static layout• Movement of men & machinery to the product• Product remains stationary

– Cost of moving product is high,being bulky


Cellular Manufacturing (CM) or Group Technology (GT) layout• A form of production that has been developed recently• In GT,the products or components being manufactured are placed

in families or groups and separate manufacturing cells are used for manufacturing these groups– GT enables production of a wide variety of parts in small

batches to achieve economies of line-flow production without

– Transportation costs reduced as parts do not have to moved in large batches

– Reduction in w-i-p inventory, and the manufacturing cycle- time or through-put time

– Most common application in automobile spare parts manufacturing

Combination / Hybrid layout

• Combination of product & process layout with an emphasis on

either

• Generally adopted in industry

• In fabrication plants including assembly, fabrication tends to

employ process layout while assembly areas employ product

layout

– Soap manufacturing industry employs product line for

manufacturing of soap, but ancillaries such as heating,

manufacturing of gleycerine, power house etc. Are

arranged on functional basis.


Plant Lay Out of UBL

Plant layout at mfg unit is well designed and very systematic, it is continuous flow starting from the introduction of Raw Materials to final product which is Beer.

Plant Lay Out : Hybrid Layout

Image No 1: Plant Lay Out of UBL at Taloja

Functional Groups

Since its a Mfg unit, only functional group present there is Production Department. This department comprises of

25 Managers 35 Technical Staff, 70 Workers


50 Other Contract Labor.

Material Management

Bailey and farmer define Material Management as management of the flow of materials into a Organisation to the point, where , those materials are converted into the firms end product

Objectives of Material Management

Obtaining the best possible raw material at the least possible price Low inventory increases efficiency since less capital is blocked. This

results high return on investment Efficient handling and storing of materials reduces the cost of

procurement Continuous supply reduces cost that may arise due to disruptions Consistent quality of raw material ensures high quality product Maintaining cordial relations with suppliers benefits the buyer in more

than one way

Material Management at UBL

Since mfg unit is highly automated and continuity of supply is of prime importance. the cost in such units is highly rigid.

Raw material ‘Malt’ is stored in Silo:

This is the component where raw malt is stored. It comprises of two tanks with a capacity of 200 metric tones each. Daily consumption of barley malt is 20 metric tones. Every 10 ten days the new stock is added to the silo. Barley can be stored for about 6 months without being spoilt. In silo the malt is aerated with dry air throughout.

Capacity of Silo: 200 M tones


Image No 2: Silo and Loading of Malt in Silo

Ingredients – Barley, Rice Flakes, Sugar, Hops and Water.

Barley- Patiala (own fields)

Malt:


Image No 3: Malt before loading for Mill

Rice Flakes- From Delhi and Karnataka.

Image No 4: Rice Flakes

UBL obtains malt required in the mfg in Patiala and it purchases Rice Flakes from Delhi

Sugar- M 30 sugar quality

Hops- The most important ingredient. Imported from Germany because the climatic conditions are favourable for plantation of Hops and adds to the bitter taste and the aroma of the beer. The Hops reported from Germany is of the best quality.

There are 3 forms of Hops

Image No 5: Hopes in the form of Flakes

1. Pellets2. Oil &


3. Liquids

Process of Beer Manufacturing

Image No 6: Flow-Process of Beer Manufacturing

Process Flow at UBL


Image No 7: Process of Beer Manufacturing

Malt Mill

In this process barley is cleaned using dry air blower so as to remove dust particles and disintegrated malt. During this process dust & foreign particles are separated and the usable barley of unique size is acquired. They grind it to form a powder form of malt.

Brew HouseAfter the barley is separated and cleaned it is then sent to the brew house department. In the brew house the following processes take place

1. Mash Kettle2. Lauter Tun3. Wort Kettle4. Whirlpool &5. PHE (Plate Heat Exchanger)6. Yeast Room7. Fermentation Tank8. Lagering Process9. Filtration Process

Mash KettleHere the barley malt is mixed with rice flakes and water and boiled for one hour (till certain specifications based on transparency of Wort). The temperature is maintained at 102 deg C. There are two separate Mash Kettle each of capacity of 25000 litres.

Lauter TunWort (mother liquor) is pumped into lauter tun and water is added to form a proper mixture. It is then mixed for one hour using blades at 1000 C. And it is allowed to settle and form a filter bed made of husk and undissolved flakes. Then the filterate is pumped to wort kettle.


Wort KettleSugar and Hops is added manually at this stage. Then the wort is mixed to dissolve sugar and hops for one hour and at the end of process the temperature comes to 90 deg C.

WhirlpoolThe wort is vortexed which enables and undissolved particles to settle at the bottom. The temperature reduces to 65-70 deg C.

Plate Heat ExchangerSince yeast cannot be added at 70 deg C the wort is reduced to 6-7 deg C and pumped to fermentors.

Fermentation the final mixture is moved to fermentor where it is mixed or pitched with Yeast which will convert the mixture of malt and hops into Beer. The Yeast converts ingredient Sugar and Proteins into Alcohol. The temperature maintain at 4 to 6 deg. C. till the fermentation the desired concentration of alcohol is reached.CIP: Cleaning In Process, fermentors are cleaned using automated CIP.

LaggeringAfter fermentation the temperature of beer is lowered to 0 deg. C and let it matured for a period of one week and then transferred to packaging unit.Fermentation and Laggering is carried out in same fermentor.

Image No 8: Fermentor Capacity of 25,000 lit.Capacity of fermentors at plant: 6 tanks of 50,000 lit.

12 tanks of 1,00,000 lit. 6 tanks of 1,50,000 lit.

4 tanks of 2,50,000 lit.


Packaging

Image No 9 : Packaging Plant at UBL of Cans and Bottles

There are 3 types of packing media

1. Keg2. Cans3. Bottles

Keg – Keg is a barrel like container which is used to store unpasturized beer. It is available in varying capacities of 10, 20, 30 and 50 litres. Unpasturized beer has a very short shelf life of approximately 5-6 days. The beer is produced in the morning and dispatched in the evening. It has only produced in the required quantities and not in excess. This beer is supplied to pubs, bars and five star hotels.

Cans – The cans are imported from Thailand, UAE and Singapore. UB now procures its cans from a local unit Raxem Industries which is located in Taloja itself. This helps UB to reduce its overhead costs involved in the manufacturing of beer. Each can has a capacity of 330ml.


Image No 10: Can of Beer of 330 ml.

Bottles – UB group doesn’t produce bottles but they obtain second hand bottles from local scrap dealers. They then recycle these bottles and they are thoroughly cleaned before the actual bottling process.

Image No 11: Bottle of Beer 650 ml.

Quality Management

Quality and hygiene are the key elements of the UB groups’ manufacturing philosophy. To this end the Central Scientific Laboratory(CSL) headquartered at Bangalore sets standards for all its breweries.Quality Management Systems laid out along the lines of ISO 9000 are strictly adhered to, controlling quality at every stage of production.

Quality of the beer is checked electronically at the end of each process and the quality of the final packaged product is manually checked.

Work Measurement – As the process is entirely automated there is no incentive scheme for increase in productivity.


Environmental Management

1. Provisions for Pollution Control ETP (Effluent Treatment Plant) – The waste water released after

the manufacturing process is treated at the ETP which is located within the plant. The treatment process takes 6-7 days on an average and the treated water is utilized for cleaning purposes.

Recycled Bottles – Kingfisher contributes to the environment by using recycled bottles.

ISO 9001:2000

Image No 12: Effluent Treatment Plant


Value Engineering

There is a resident R&D team which works for continuous improvement in the product as well as the production process. The R&D team examines the quality of the raw material as well as a sample of the end product.

General Safety Standards

The company believes that its Human resources are its main important assets and therefore, gives highest priority to safety and health of its employees as well as contractors workmen, including the environment management at work.

Image No 13: Certificates of Safety and ISO


Production Unit Safety Standards

Image No 14: Safety equipments

Employees at packaging units are provided with Face Masks, Helmets, Goggles, Gloves, Gas Mask, Gumboots

Documents

Beer Manufacturing (Kingfisher)