College of Engineering and Petroleum

Industrial Engineering and Management Systems

IMSE 496: Industrial Engineering Design
Fall 2008/2009

National Canned Food Production and Trading Co.

Supervised by:
Prof. Mehmet Savsar
Eng. Bedour Al-Saleh
 Group Members
16 Students
7 areas of study
Leader: Hamid Al-Yousifi
Vice Leader: Alaa Aboelfotoh
 Introduction
The National Canned Food Production and Trading CO.
(NCF) was founded in 1985 as Kuwait’s only producer of
canned vegetables with a capital of 2 million KD.
Located in Sabhan with an area of 1300m2.
Current Manpower:
72 in production
7 in management
Produces three main products:
Aqua Gulf water.
Vinegar.
Canned Food (220g, 400g, 450g)
The factory produces its own cans.
Introduction
 # Products
Products
Net Weight (gms)
1A CHICK PEAS 400
1B CHICK PEAS ( 10mm ) 400
1C CHICK PEAS 10 WITH CHILLY 400
2A FOUL MEDAMES FAVA BEANS 400
2B FOUL MEDAMES WITH CHILLY 400
2C FOUL MEDAMES WITH CHICK PEAS 400
2D FOUL MEDAMES EGYPTIAN RECIPE 400
2E FOUL MEDAMES SAUDI RECIPE 400
2F FOUL MEDAMES LEBANESE RECIPE 400
3 BROAD BEANS 400
4 GREEN PEAS 400 Foul
5 BLACK EYE BEANS 400
6 WHITE BEANS 400
7A RED KIDNEY BEANS 400
7B RED KIDNEY WITH CHILLI SAUCE 400
8A BAKED BEANS WITH TOMATO SAUCE 400
8B BAKED BEANS WITH TOMATO SAUCE 220
9A HOMMUS TAHINEH 400
9B HOMMUS TAHINEH 220
9C HOMMUS TAHINEH / GARLIC 400
9D HOMMUS TAHINEH / GARLIC 220
10 LIMA BEANS 400
11A FRANKFURTER SAUSAGES 400
11B COCKTAIL SAUSAGES 400 Vegetables & Beans
11C COCKTAIL SAUSAGES 220
11D HOT DOG SAUSAGES 400
12A WHOLE MUSHROOM 400
12B WHOLE MUSHROOM 220
12C PCS & STEMS MUSHROOM 400
13 MIXED VEGETABLES 400
14 CUT GREEN BEANS 400
15 PEAS & CARROTS 400
16 GREEN OLIVE 400
17
18
TOMATO KETCHUP
HOT TOMATO KETCHUP
340
340
Sausage Other Products
19 WHITE VINEGAR 470ML
20 PEELED FOUL WITH CHILLY 400
21 BLACK OLIVE 400
Names Area of Study Problem Description

Hamid Al-Yousifi Quality Control Inadequate raw material sampling

Shaima’a Dehrab plans
Poor quality documentation
Overfilling of cans during production

Abrar Hajiya Human Factors and Safety Unsafe working conditions

Nouf AL Fraih Cost Analysis High overfilling costs and

Amal AL Fouzan transportation costs
Shaikha AL Dabbous

Aisha Al-Roumi Simulation and Maintenance Frequent machine failure

Elaf Ashkanani Poor maintenance plans
Moudi Al-Abassi
Zahra’a Amir

Farah Al-Douseri Production Planning and Inventory NCF cannot meet the demand on
Maryam Al-Qatami Control time due to capacity plans
Moneera Al-Fayyad Lead time is relatively long for final
Sherifa Al-Fulaij product

Alaa Aboelfotoh Supply Chain NCF at risk of being unable to satisfy

Basel Nijem demand even with overtime
production hours

Alaa Aboelfotoh Facilities Planning Machines are too crammed,

Basel Nijem pathways are obstructed, inventory
Nouf Al Fraih spread throughout the factory and a
lot of wasted space
 Quality Control

Hamid Al Yousufi
Shaima’a Dehrab
 Introduction

Food production requires many standards to

be met, especially regarding:
Health issues.
Accuracy of filling weight.
It is Imperative to have adequate quality
control measures in place to meet these
targets.
 Problem Description

After studying the current system in depth

three distinct problems were identified:
1. Some raw materials have Inadequate
sampling plans.
2. Cans were consistently over filled.
3. Quality control documentation was found to
be lacking clarity and poorly designed.
 Solution Approach

1. Propose new, statistically reliable raw

material sampling plans.
2. Conduct a root cause analysis to eliminate
the overfilling problem.
3. Develop new, superior quality
documentation to help the company in their
future quality control efforts.
Analysis of Problem 1: Current
Raw Material Sampling Plans
Most food stuff material is checked by the
municipality. Thus, there is no need for the
company to sample them.
 Sampled Raw Materials

The following four raw materials are sampled

Beans.
Standard lids.
Easy open lids.
Tin sheets.
 Single Sampling Equations

One sample is taken for each raw material,

therefore the plans are modeled as single
sampling plans using the following
equations:
Probability of acceptance:

Average Outgoing Quality:

Average Total Inspection:

Parameters of Current Sampling Plans

The plans have the following properties:

Raw Material n c N
Beans 20 0 400
Standard Lids 50 2 5,000,000
Easy Open Lids 50 2 1,400,000
Tin Sheets 10 2 420,000

Lots containing 1% defective items are deemed

acceptable.
Therefore, Pa has to be high (at least 95%) for
p=.01 to avoid rejecting lots of good quality.
Current Beans
Sampling Plan
 Problems with As-Is Plans

The plans show the Pa curves for Beans and

Tin Sheets are inadequate.
At p=.01, Pa is:
82% for beans.
90% for tin sheets.
 Proposed Plans For Beans

Parameters for proposed single sampling

plan: n = 70, c = 2.
Parameters for proposed double sampling
plans:
Plan 1 Plan 2 Plan 3 Plan 4 Plan 5 Plan 6
n1 10 15 20 25 30 35
n2 30 45 60 75 90 60
c1 0 0 0 0 0 0
c2 2 2 2 2 2 2
Equations and Terminology for the
Double Sampling Plan

n1: The size of the first sample.

n2: The size of the second sample.
c1:Number of defectives accepted in the first
sample for the lot to be accepted from the first
sample.
c2: Number of defectives accepted in both
samples combined for the lot to be accepted.
 Calculation of Sampling Cost

The cost of sampling was split into 2 parts:

Cost of poor quality: AOQ * Production Cost
Cost of inspection: ATI * Inspection Cost/Unit
The new plan must have:
A Pa greater than 95% at p=0.01.
Have a lower cost.
 Cost Evaluations
Comparison between Costs of the Beans As-Is and New Single Comparison between Costs of the Beans As-Is and Double
Sampling Plans Sampling Plans
60000 60000
50000 50000
40000 40000
New Single sampling Plan Double sampling plan
Cost

30000

Cost
As-is plan 30000
As-is plan
20000 20000
10000 10000
0
0
0 0.02 0.04 0.06 0.08 0.1
0 0.02 0.04 0.06 0.08 0.1
Lot fraction defective, p Lot fraction defective, p

Comparison between Costs of the Beans New Single

Sampling and Double Sampling Plans
60000
50000
40000
Double sampling plan
Cost

30000
New Single sampling plan
20000
10000
0
0 0.02 0.04 0.06 0.08 0.1

Lot fraction defective, p

 Decision

The double sampling plan reduces sampling

costs and has a Pa larger than 95% at p=0.01.
The company should adopt this plan for
beans.
The same procedure was followed for the tin
sheets.
Analysis of Problem 2: Overfilling

Quality Control data shows many instances

when net weight exceeded the upper
specification limit of 430g.
A root cause analysis was conducted,
focusing on the data for the chick peas and
green peas since they account for over 40%
of production.
 Why-Why Diagram
Maintenanc Machine is
Poor Malfunction Maintenanc e Schedule Too Old
Machine e Not is Too and Needs
in the
Performance Machine. Carried Out. Demanding to be
. Replaced

Lack of
Poor Appreciation
Over Design of for the Oblivious to
Incorrect
d Filling Documentation Quality Importance Cost of
Sheets of Proper Over Filling
Design

Poor Lack of
Enforcement Managemen
of Standards t Interest
 Fish Bone Diagram

Man Media
Poor
Poor training
lighting

Lack of
vigilance

Over Filling
Scale not Poor
calibrated Scale quality
incapable of control
correct culture
Filling
measurement Oblivious to
machine
cost of over
not working
filling
adequately
Machine Management
Chick Peas Net Weight
Random scatter
2σ
70% of points within ±
1σ 1σ.
1σ-
96.67% of points within
2σ-
± 2σ.
Process is under control.
Overfilling could be due
to a problem in the dry
filling process.
Chick Peas Filling Weight
Nominal target of 205g
2σ
with a tolerance of ±
1σ 5g.
1σ-
2σ-
Random scatter
Out of control point
corresponds to nominal
target.
Runs of points of equal
value.
86.67% within ± 1σ.
Green Peas Net Weight
Random scatter
2σ
Average is lower than
1σ the chick peas’.
1σ-
92.3% of points
2σ-
within ± 1σ
96.2% of points
within ± 2σ
Process exhibits
good control.
Green Peas Filling Weight
Nominal target of 187.5g
with a tolerance of ± 2.5g
2σ Random scatter
1σ
Average almost exactly
1σ- equal to nominal target.
2σ-
92.3% of points within ±
1σ
One out of control
point. Could be due to
chance causes.
 Filling Problem Conclusion

Runs of equal values indicates the capability

of producing to standards.
Using historical data, it is estimated that
overfilling cost 68,000 KD annually.
It is hoped the company will now pay
attention to avoid over filling in the future.
Analysis of Problem 3: The Quality
Control Documentation
The Quality sheet was split into 2 parts:
Filling weight quality sheet
Finished product quality sheet
Tests to be carried out every 15 minutes,
therefore 40 checks in a 10 hour day.
Statistics used to determine subgroup size,
n.
 Economical Considerations

Salary of quality personnel = 45 KD/day.

Checks take 3.5 minutes for n=5, and 6
minutes for n=10.
Beta obtained from graph. (curve to be inserted)
Average Run Length:
Average Time to Signal:
Number of Individuals inspected:
 Decision
  n=5 n = 10
β 0.1 0.3
ARL 1.11 1.43
I 11.1 7.15
ATS 16.65 21.45
Cost (KD/day) 18 10.5

ARL < 2 for both.

I is smaller for n = 5.
Cost is almost half for n = 5.
Therefore the trade off is worth it, and we
shall consider n = 5 as our sample size.
 Conclusion

New sampling plans reduce costs and

sentence lots more accurately.
The cost of overfilling will encourage the
company to be proactive in preventing it.
New documentation cam aid the company in
its future quality control efforts.
Application of Human Factors,
Safety at NCF
Abrar Hajiya
 Introduction

Why did we decide to apply Safety

& HF applications on this factory?
 Objectives

Improve Operational Performance.

Increase Convenience of Use of Work Environment.
Increase Workers Comfort With the Surrounding
Environment.
Reduce Human Errors.
Increase Productivity.
Improve Safety.
Reduce Fatigue and Stress.
Get Workers’ Acceptance.
Increase Job Satisfaction.
Improve Workers’ Quality of Life.
 Problem statement

Data Gathering:
• Apply Workplace Safety & Human Factors Checklists.
• Form Safety & Human Factors Survey Tables.
 Results

A large part of the workplace was covered, which

lead us to general conclusions that cover:
1. Work Environment
Ventilation, Temperature and Humidity Control
Noise level
Lighting
Work area
– Layout
– Environment
2. Fire Protection
3. Emergency Exit
4. Safety Sign
5. Uncomfortable Body Postures
 Layout

3 4

6
2

11
7

10

1 8
 Data Gathering
Data Gathering:
• Apply Workplace Safety & Human Factors Checklists.
• Form Safety & Human Factors Survey Tables.
 Results

4%
13%

22% 61%

Ergonomic
Safety
Physical
Chemical
 Solution Approach
Quick-win improvement table
Long term improvement table
 Quick-win Improvement
Contains the findings that can be easily solved, where the
findings that can be solved by the same recommendation are
grouped together to make it easily solution approachable.
 Long-term Improvement
Contains findings that need further studying by applying
human factors and safety tools where the findings can not be
solved easily and need further investigation.
 Analysis
RULA
NIOSH
Snook pull/push table
Rest required in minuets
 Cases Needing Improvement Attention

0.7
0.6
0.5

0.4
0.3
0.2
0.1

0
NIOSH Rest R min Snook RULA
 Recommendations

Use the same concept of

the unloading machine
to palletize the final
product.
 Improvement
Ho
ist
 Recommendations
Educate the worker to the importance of
changing his body posture every once and a
wile.
Changing worker every once and a wile to
break the repetitive work sequence and the
static posture.
 Solution approach
Educate the company on the important role that safety
and human factors engineers can play in ensuring the
safety of their workers and avoiding any expensive
accidents from occurring
Discomfort survey
Dominos Theory
Cost of an accident
Three E’s Method
 R
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sh
Le ol
de
ft r
R

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sh
ig ol
ht de
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11
Le pe
ft r
u p arm

3
pe
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ht

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fo
Le r ar
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2
fo
ra
R rm
ig

3
M ht
id w
lo ris
t
w 2
er
ba
U ck
pp
7

er
ba
ck
Discomfort Survey

Bu
3

t to
c
Le ks
2

ft
Survey

th
R ig
ig h
3

R ht
ig th
ht ig
lo h
w
5

Le e rl
ft eg
lo
w
21

er
le
g
20
 Dominos Theory

INJURY!!

Accident!!

Unsafe Act

Undesirable Traits

Unsafe
Environment
 Cost of an Accident
Direct Cost:
Medical expenses.
Replacement of damaged items.
Compensation paid to an injured employee.
… etc.
Indirect Cost:
Lost time of injured employee and others to assist him, see what’s going
on or discuss the event.
Time lost on investigation, preparing report.
Damage to tools, equipment, material or property.
Losses to late or unfilled orders.
Losses resulting from less than full productivity of injured worker upon
return to work.
Loss of profit because of lost work time and idle machines.
Overhead costs that continue during lost work.
 Cost of a fire accident
Fire Accident  470,000 KD / 200 m2

Cost of Supervisor:
Death : 30,288 KD
Permanent disability: 40,380 KD
Cost of Technical:
Death : 12,000 KD
Permanent disability: 16,000 KD
Cost of Operator:
Death : 9,000 KD
Permanent disability: 12,000 KD
Cost of Labor:
Death : 4,500 KD
Permanent disability: 6,000 KD
 Three E’s of Safety
Engineering:
Reduce inventory of hazardous material
Use warning devices
Prescribing protective equipment
Education:
Teach people how to do job correctly
Teach workers where hazards exits
Train engineers about hazard recognition and evaluation
Enforcement:
Achieving compliance with federal, local low, and
regulation
 Conclusion
We assessed the working conditions inside the
factory to check if they are safe.
We strived to remove all hazards from the
workplace and tried to minimize the chances
of workers sustaining significant injuries.
applying multiple human factors tools as RULA
and the NIOSH lifting equation …. % need
immediately changes
 Conclusion
It is important to :
analyze the workers comfort level and rate of injury in the
factory
educate the workers to the importance of applying safety
and human factors techniques
educate workers to the importance of changing their body
posters
train workers on several machines so that each worker can
do different asks.
Finally, we hope that we educated the company to
the importance of hiring a safety and human factors
engineer
 Cost Analysis and Reduction
Amal Al Fouzan
Nouf Al Fraih
Shaikha Al Dabbous
 Introduction
Cost Analysis and productivity will be used to estimate the
company’s financial situation and try to minimize wasted
spending

The NCF is the only factory in Kuwait that fills canned food

It produces 35,869,495 cans of the twenty two different

varieties

The NCF imports all their material from numerous suppliers

worldwide
 System of the Company
Decisions

Resource Input National Resource Output

Canned Food
Labor Company Labor
Material Material
Equipment Equipment
Energy System Output Energy
Capital Capital
Canned Food

Value of Output

Profit
Customer Satisfaction
 Problem Description

High costs due to overfilling

Most of their products are overfilled which
significantly increases their material cost

Transportation Costs
High transportation costs due to high costs of sending
to certain markets with comparatively low demand
 Solution Approach
1. Find the variable costs and fixed costs to calculate the
total cost, total revenue, total profit

2. Find total breakeven point and each product’s breakeven

point

3. Find cost of overfilling

4. Study alternatives for reallocating demand to closer areas

that would minimize transportation costs

5. Calculate the current productivity level

 Analysis: Variable Cost

Variable costs are the costs that change with the rate of
production

The NCF variable costs are:

Material costs (Beans & Can Making Materials)
Utility costs
Overtime costs
 Analysis: Variable Cost
Variable Cost
(Unit VC*Production) Annual Production
KD/year Unit/year Description
3,010,859 35,869,496 Beans Total
Variable Cost Variable Cost
KD/year KD/month
7200 600 Utilities: Water

8400 700 Utilities: Electricity

29400 2450 Utilities: Petrol

21,000  1,750 Overtime
3,076,859 KD/Year TOTAL VARIABLE COST
 Analysis: Fixed Cost
Fixed costs are costs that do not vary or change with the
production rate

Variable Cost Description Cost

KD/Year
105,856 Technical Overheads
259,908 Company

12,000 Marketing

10,470 Depreciated over 25 years Equipment

Straight Line Method
53,820 Direct Labor Labor
Indirect Labor
442,053.86 KD/Year TOTAL FIXED COST
 Analysis: Total Revenue
Total Revenue
(SP*Production) Selling Price
KD/Year KD/unit Annual Production Description

510338.6 0.145 3,489,494 Baked Beans

68671.3 0.14 494,928 Black Eye Beans

556868.5 0.110 4,949,942 Broad Beans

616977 0.094 6,581,088 Chick Peas

3.84 35,869,496 TOTAL

TOTAL REVENUE 4,274,968 KD/Year

 Analysis: Total Profit

Total Profit = Revenue – Cost

= 4,274,968 – 3,518,913
= 756,054 KD/Year

Profit Margin = Profit / Revenue

= 17.68 %
 Analysis: Productivity

All the previously collected data were used to calculate

the productivity of the company

Total Productivity = Total Output / Total Input

= Total Revenue /Total Cost
= 4,274,968 / 3,518,913
= 1.214 > 1

The total productivity is greater than 1

So NCF is productive
 Analysis: Break Even Point
The breakeven point is the point that the company covers
its loses and from then on starts making profit

The company has been operating for 25 years, so they

obviously broke even, so the annual break even point was
obtained

To graphically show the breakeven point, the total cost is

plotted against the total revenue

The breakeven points for each of the twenty two varieties

were obtained as well
 Analysis: Total Breakeven Point
4,000,000

3,500,000

3,000,000
12,597,389
2,500,000

2,000,000
KD

1,500,000

1,000,000

Total Cost
500,000
Total Revenue

0
0 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00
10 20 30 40 50 60 70 80 90 10
0
11
0
12
0
13
0
14
0
15
0
16
0
17
0
18
0
19
0
20
0
21
0

Production
 Improvement

After analyzing costs found areas that

could be improved:

Minimizing cost due to cost of overfilling

Minimizing cost due to high transportation

costs
Improvement: 1. Over Filling
The National Canned Food Company tend to overfill
most of their products and under fill some

$ $

We are only concerned with over filling of beans (solid

overfilling) since the rest is filled with brine
 Improvement: 1. Over Filling Costs

Target Overfilling Overfilling Cost Cost Overfilling Cost

Description g/can g/can g/year KD/year KD/gram KD/Year

Baked Beans 170 -0.17 -582,746 83,107 0.00014 -81.6

Black Eye Beans 180 1.20 593,914 14,006 0.00016 93.4

Broad Beans 180 0.85 4,186,166 116,118 0.00013 545.6

TOTAL           67,361.60
 Cost of Improper Filling
Costs of over filling without the offset of under filling

Save 68,001.66 KD/year

2.04% of their total cost

Including the offset of under filling

Save 67,361.60 KD/year

2.019% of their total cost
Improvement: Transportation Costs
Very high compared to other fixed costs

14,880 KD/month (5.1% of Total cost)

Reduce transportation costs

 Reduce Fixed costs
 Reduce Total Cost
Improvement: Current Transportation Costs
Avg. Demand Capacity of transporter
Cost (KD/transporter)
transporter/month (carton)

Local 28 2100 0
KSA 6 2100 200
UAE 5 2100 300
Bahrain 4 2100 290
Qatar 3 2100 300
Oman 3 2100 400
Iraq 3 2100 150
Tunisia 2 1650 815
USA 3 1650 980
Kenya 3 1650 1300
Totals 122400 cartons/month 14,880
Improvement: Transportation Costs
Local transportation costs are
considered to be zero since local
customers pick up their orders from the warehouse

Transporters (Logical + Regional)

Transporters (International Markets)

Improvement: Transportation Costs
Observations that justify demand allocation towards
regional and ultimately local:

Only manufacturer of canned food in Kuwait ~ Customer loyalty

Demand increases 10% annually
The company will not be able to fully supply customers
Have huge amounts of overtime
Frequent machine breakdowns
Shipping to international markets cost twice as much as
regional markets
Improvement: Transportation Cost

Moreover, the amount demanded by each of Tunisia,

Kenya, and the US are very small to have any substantial
marketing value

Shipping Cost Demand  

KD/year Cans/Year  
19,560 950,400 Tunisia
35,280 1,425,600 USA
46,800 1,425,600 Kenya
101,640 3,801,600 Total
Improvement: Notes about Current Situation

Currently producing 35,869,496 cans annually

Operating their regular 8 hours, and 2 overtime

hours daily

Maximum capacity is 36,691,200 cans annually

(Working up to maximum of 4 overtime hours daily)
1. Transportation Forecast Cost for Year 1: 2009
Allocated Extra Demand
New Shipping Cost Transporters Difference
KD/Year Demand Needed Yearly Cans/Year Demand  
  1,693,440   1,693,440 18,627,840 Local
          Regional
15,840 362,880 7 362,880 3,991,680 KSA
19,800 302,400 6 302,400 3,326,400 UAE
15,312 241,920 5 241,920 2,661,120 Bahrain
11,880 181,440 4 181,440 1,995,840 Qatar
15,840 181,440 4 181,440 1,995,840 Oman
5,940 181,440 4 181,440 1,995,840 Iraq
84,612     3,144,960 34,594,560 Total

Number of
New Shipping Cost Transporters Cans
KD/Year Annually Shipped New Demand  
21,338 26 1,036,800 1,045,440 Tunisia
21,338     1,045,440 Total
2. Transportation Forecasted Cost for Year 2: 2010
New Shipping Cost Extra Transporters Demand Deficit
KD/Year Needed Yearly Cans/Year Demand  
0 - 1,230,048 20,490,624 Local
        Regional
15,589 6 99,648 4,390,848 KSA
19,189 6 33,120 3,659,040 UAE
14,976 5 0 2,927,232 Bahrain
11,592 4 0 2,195,424 Qatar
15,192 4 0 2,195,424 Oman
6,192 4 0 2,195,424 Iraq
82,729     38,054,016 Total

Demand Shipped 2010 Demand  

0 1,149,984 Tunisia
Improvement: Transportation Costs
The same procedure is done by omitting countries
that have higher transportation cost to lower, until
the company is producing at maximum capacity,
and all of the demand has been allocated to serve
local customers only

Transportation costs will eventually reach zero since

all of the production would be to local customers
 Improvement: Total Cost
Improvement Cost Current Cost
KD/year KD/year

263,494 442,054 Fixed Cost

3,340,353 3,518,913 Total Cost

Savings in Total Cost = 3,518,913 - 3,340,353

= 178,560 KD/Year
Improvement: Profit and Productivity
New Profit = Revenue - Cost
= 4,413,671.64 - 3,340,353
= 1,073,318 KD/Year

Profit Margin =24.3 %

Productivity = Revenue/Cost
= 4,413,671.64 / 3,340,353
= 1.32
 Conclusion

Transportation Cost is eventually going to be lowered by

178,560 KD/year

The overfilling saving costs is 68,000 KD/year

Total Cost Savings = Transportation + Overfilling

= 246,561.8 KD yearly

This figure represents 7% of their total costs, and is

considered substantial savings in the long run
 Conclusion
Suggested Current

3,340,353 3,518,913 Total Cost

KD/Year

1,073,318 756,054 Total Profit

KD/Year

24.3% 17.68% Profit Margin

1.32 1.12 Productivity

 Production Line Analysis and
System Maintenance
Aisha Al-Roomi
Elaf Ashkanani
Modhi Alabbasi
Zahra’a Ameer
 Introduction

Analysis of Production Line and System

Maintenance for Canned Food Factory
 Problem Description
Machines of production line fail frequently
because they are old.

System reliability and maintenance policies

need to be evaluated in order to find ways of
improving:
System reliability
Daily production
 Problem Description
Analyze the production line under current
operational policies and under proposed new
maintenance policies in order to improve:
System reliability
Production rate
Maintenance cost
 Solution Approach
1. Collect necessary data related to:
Equipment failure rates
Production rates
Maintenance procedures and policies.
2. Analyze system reliability using equipment reliabilities
3. Develop an ARENA based simulation model to analyze
system operation under:
Current operation and maintenance policies (as-is system)
Proposed new maintenance policies
4. Compare the performance measures and find the best
operational strategy with respect to:
Production rate
Reliability
Maintenance cost
 Analysis: Current System

Current Maintenance Policy:

Corrective Maintenance (CM) when a failure

occurs
Preventive Maintenance (PM) once a month
during non-production day for 10 hours
 Analysis: Current System
Maintenance Model:

Corrective maintenance is done by one mechanical technician,

one electrician and one helper
Preventive maintenance is done by two mechanical technician,
two electrician and two helper
Mechanical technician and electrician are paid 170 KD/month
Helper is paid 50 KD/month
CM Cost= (Mct/MTBF) * 3120 * cost/hr
PM Cost= fpt * Mpt * 3120 * cost/hr
Production Loss Cost= 140 units/min * Mct * λ * 3120 * Rev/unit
 Analysis: Current System
Current Reliability
use the following to calculate the reliability:

R(T) = e-λt

λ: Failure Rate

t:Period of Time

Exponentially distributed time between failures

 Analysis: Current System
Reliability of the filling line over one day is
57.81%
 Analysis: Current System
The Reliability of the can making line over one day
is 80.65%

Total Maintenance Cost= CM Cost+ PM Cost+ Production Loss Cost=

457,628.5 KD/Year
 Analysis: Current System
As-is model of the can making line with the current
failure rates
 Analysis: Current System
Daily production of the as-is model of the can
making line (cans/day)
 Analysis: Current System
As-is model of the filling line with the current failure
rates
 Analysis: Current System
Daily production of the as-is model of the filling line
(cartons/day)
 Analysis: Current System
Both models work properly, they are verified
For validation two performance measures
were used:
Daily production
Daily scrap

The models are valid

 Analysis: Proposed Policies

To reduce the failure rates of the machines:

Alternative 1: Apply PM twice a month, every 13

days

Alternative 2: Apply PM every week

Alternative 3: Reliability Centered Maintenance

 Analysis: Proposed Policies

The new failure rates were calculated using the

following for all alternatives:

MTBM: Mean Time Between Maintenance

λ: Failure Rate
f: Preventive Maintenance Rate
 Analysis: Proposed Policies
Summary of current and new failure rates (failures/day)
of both lines

Can Making Line Filling Line

Current 0.215 0.715
Alternative 1 0.176 0.443
Alternative 2 0.053 0.32
Alternative 3 0.034 0.297

Failures rates are reduced

 Analysis: Proposed Policies
Alternative 1: PM every 2 weeks

Can Making Line Filling Line

Reliability Increase 3.91% 26.65%

Total Maintenance Cost= 324,966 KD/Year

29%
 Analysis: Proposed Policies
Alternative 2: PM every week

Can Making Line Filling Line

Reliability Increase 17.53% 43.24%

Total Maintenance Cost= 174,721.5 KD/Year

61.8%
 Analysis: Proposed Policies
Alternative 3 Reliability Centered Maintenance
Can Making Line Filling Line

Reliability Increase 19.82% 38.19%

Total Maintenance Cost= 125,578.78 KD/Year

72.56%
 Improvement

Simulate the three alternatives by changing

the failure rates only
 Improvement
Daily production of alternatives 1, 2 and 3 of can
making line
 Improvement
Daily production of alternatives 1, 2 and 3 of filling line
 Improvement
Filling Line

Alternative 1 (no significant difference)

Alternative 2 [21 -103] cartons increase in daily
production
Alternative 3 [35 -114] cartons increase in daily
production
 Improvement
Can Making Line

Alternative 1,2 and 3 (no significant difference)

 Improvement
Summary of all alternatives
Alternative 1 Alternative 2 Alternative 3

Maintenance Cost 29%- 61.8%- 72.65%-

Reliability of Can Making 3.91%+ 17.53%+ 19.82%+
Line
Reliability of Filling Line 26.65%+ 43.24%+ 38.19%+

Daily Production of Can No improvement No improvement No improvement

Making Line
Daily Production of Filling
Line 1.65%+ 2.62%+ 3.17%+

Choose alternative 3
 Conclusion

System reliability, daily production and

maintenance cost have been improved as a
result of reducing the failure rates
Development and Implementation of a New
Production Planning Strategy for NFC Factory
Farah Al-Douseri
Maryam Al-Qatami
Moneera Al-Fayyad
Sherifa Al-Fulaij
 Introduction

NFC Factory produces a variety canned foods

and operates according to demand.

No special production and inventory control

models are applied.

Production delays occur and costs are high

due to lack of good planning
Inventory Flow in NFC
RAW MATERIAL

Can plant Labels Spices

inventory inventory inventory

PRODUCTION

Final product Empty can

inventory inventory
 Problem Description

Failure to meet demand on time due to the current

production capacity.

Some processes take longer time due to lack of

planning?

Excessive inventory is held in the system.

Lead time is relatively long for final product.

 Solution Approach
1. Forecast the demand for all 27 types of
goods produced using past data.

2. Determine current production capacity and

match the capacity with the demand.

3. Develop inventory plans for raw material and

production plans for finished products.
 Methodology
Collect data for past three years for all goods.

Apply forecasting methods to determine the demand for the

next year (12 months).

Select best forecasting method.

Analyze the current inventory system and order quantities for

raw material.

Apply inventory models to determine optimum order

quantities and compare with the current system.
 Methodology
Analyze current production plan and lot sizes.

Apply production planning models and determine optimum

lot sizes for all products.

Check the production capacity and match with the plan.

Adjust capacity according to the demand.

Apply service level calculation to determine safety stock.

 Analysis: Demand Forecasting

Demand of the final products for years 2006-

2007-2008 (monthly)

Applying MAD TEST ( choosing the minimum

MAD of each method to get the least error )
 Analysis: Demand Forecasting
All products have the same trend
EX. BAKED BEANS

Testing the MAD of different methods :

Exponential with trend
Moving Average
Linear regression
Holts method
Winter’s method
 Analysis: MAD TEST
METHOD MAD
Exponential with trend 4166.3

Moving Average 805

Linear regression 1850.8

Holts method 12.5

Winter’s method 162

Analysis: Forecast Demand for year 2009
Choosing holts method to apply the
forecasting demand for the next five years
(2009 – 2010 – 2011 – 2012 - 2013)

Demand should be deseasonalized

Considering on year 2009 to apply the EPQ

model
Analysis: Deseasonalization
 Analysis: Baked Beans Plot

20000
18000
16000
14000
12000
10000 Actual Demand

8000 Des eas onaliz ed Demand

6000 Linear (Des eas onaliz ed

Demand)
4000
2000
0
Nov-06

Nov-07

Nov-08
J ul-07

J ul-08
J ul-06
J an-06

J an-07

J an-08
Mar-06

Mar-08
S ep-06

Mar-07

S ep-08
S ep-07
May-06

May-07

May-08
Analysis: Holt’s Method Parameters
Dt*  Deseasonalized demand

St*  Value of the intercept

Gt*  Value of the slope

CQt*  Normal index

Ft*  Symbolizes the forecast of the deseasonalized

unit

Ft  Final forecast of the original unit

Analysis: Holt’s Method
Analysis: Holt’s Method

FORCASTED DEMAND OF 2009

( BAKED BEANS )
Analysis: Plot of year 2009

Forecasted
demand for
year 2009
Analysis: Plot of the demand for the next five years
 Analysis: EPQ (forecasting)

T= 0.913 Tmin = 0.393

0.97

Since T > Tmin

Since the sum of ‫ג‬/p < 1 (FEASEBILE)
(T*=T)
Analysis: EPQ (forecasting)
Analysis: EPQ (forecasting)

The saving cost = 394 KD/month

 Analysis: Economic Order Quantity (EOQ) for
Production Planning
Item Unit Q TC Q* TC* TC-TC*
Black Eye Beans K.G 10553 75.44 2096 42.44 33.01
Broad Beans K.G 132234 813.74 17287 311.17 502.58
Chick Peas 8mm K.G 101930 643.12 18899 340.18 302.93
Chick Peas 7mm K.G 27500 243.70 4633 118.15 125.56
Chick Peas 10mm K.G 46309 322.16 6619 134.04 188.12
Whole Mushrooms K.G 18750 291.85 2972 133.72 158.12
Mushroom Stems and Pieces K.G 18750 288.23 2412 108.53 179.70
Green Peas K.G 61291 261.10 2419 30.84 230.26
Mixed Vegetables K.G 25811 240.93 2013 55.85 185.08
Navy Beans K.G 53905 116.02 5228 33.29 82.74
White Beans K.G 18766 269.71 2499 104.95 164.76
Peeled Foul K.G 65000 594.01 11185 293.61 300.41
Fava Beans K.G 71153 397.68 7396 122.04 275.65
Red Kidney K.G 33869 263.42 2070 48.03 215.39
Sweet Corn K.G 33572 289.39 5806 143.69 145.71
Lima Beans K.G 19184 34.95 4229 21.54 13.41
Carrots K.G 12000 13.96 4883 13.65 0.31
3101.73
The saving cost = 3101.73 KD/yr
 Analysis: Economic Order Quantity (EOQ) for
Production Planning

Item Unit Q TC Q* TC* TC-TC*

Labels CTN 2000 112 1474 106 6

Cooper Wire K.G 4250 124 812 45 79

Lids CTN 2000 20 1266 18 2

Tin-sheet CTN 1000 8 847 7 0

Cartoon CTN 1500 10 1030 9 1

Shrink Film PCS 30000 8 26857 7 0

Glue K.G 6751 60 3071 44 16

Lacquer K.G 6179 75 1593 36 39

143.58
The saving cost = 143.58 KD/yr
 Analysis: Economic Order Quantity (EOQ) for
Production Planning
Item Unit Q TC Q* TC* TC-TC*
Tomato Pasta K.G 6000 40.0 3537 34.49 5.51
Lemon Juice Ltr 500 16.0 339 14.75 1.25
Green Color K.G 1000 48.0 405 33.37 14.63
Edta K.G 1000 12.0 775 11.62 0.38
Citric Acid K.G 3000 28.0 1960 25.51 2.49
Camon Powder K.G 1000 16.0 596 13.42 2.58
Chick Peas Powder K.G 2000 17.0 1695 16.52 0.48
Spices K.G 1000 20.0 548 16.43 3.57
Whole Red Chili K.G 500 10.0 381 9.44 0.56
Onion Powder K.G 2000 38.0 706 23.81 14.14
Powder Red Chili K.G 1200 15.0 1014 14.44 0.56

46.1
The saving cost = 46.1 KD/yr
Analysis: Economic Production Quantity (EPQ)
for Production Planning

T= 1.05 Tmin = 0.88 0.9908

Since T > Tmin

Since the sum of ‫ג‬/p < 1 (FEASEBILE)
(T*=T)
Analysis: Economic Production Quantity (EPQ)
for Production Planning
Analysis: Economic Production Quantity (EPQ)
for Production Planning

The saving cost= 1062 KD/month

 Analysis: Service level
The demand of the raw material
 NORMAL DISTRIBUTION

Appling different percentages of service level

to evaluate the safety stock.
90%
95%
99%
Analysis: Service level 95% (CAN PLANT)
Analysis: Service level 95%
(BEANS)
Analysis: Service level 95% (SPICES)
Analysis: Service level 95% (SPICES)

SS cost
(KD/yr)
Service Level

90% 6011

95% 4238

99% 4846

Service level 95%  least SS cost

 Improvement
The company must 2006
improve it’s order 2007
2008
quantity by using EOQ
model to reduce the
cost

3291 KD/yr
 Improvement
The company must improve it’s production
quantity by using EPQ model to reduce the
cost
2006
2007
2008

1062 KD/month
 Improvement
Finding the economic production quantity for
the final product of year 2009 that reduce the
total cost

The saving cost= 394 KD /month

 Supply Chain Analysis
Alaa Aboelfotoh
Basel Nijem
 Introduction
The NCF delivers its products to its
customers, based upon order requests, using
two modes of transportation.

Capacity Transporter
2100 cartons Trucks (By land)
1650 cartons Containers (By sea)
Gulf Region Customers
Overseas Customers
 Problem Statement
The NCF is at risk of being unable to satisfy
the demand even with the overtime
production hours.
15% of products are produced during
overtime hours and costs on average KD
21,000 / year
 Solution Approach
Analyze current supply chain
Increase production capacity and reduce
transportation costs by using LINDO to model
the following alternatives:
1. Establishing a new factory.
A. Kuwait
B. KSA-Dammam
2. Using new modes of transportation (trucks with
larger capacity
3. Replacing the bottleneck machines.
 Data Collection: Costs and Demand
Demand City (j) Transportation Cost (Cij) per 2100 cartons (KD)
Monthly
Capacity (x2100
Kuwait KSA UAE Bahrain Qatar Oman Iraq
(i) cartons)
(1) (2) (3) (4) (5) (6) (7)
(Ki)

Kuwait - Existing
0 200 300 290 300 400 150 42
(1)
Kuwait - Potential
0 200 300 290 300 400 150 90
(2)
KSA - Potential
200 0 100 90 100 200 350 90
(3)
Monthly Demand (Di) Total Demand
28 6 5 4 3 3 3
(x2100 cartons) 54
FORECASTED- Monthly Total Demand
Demand (Di) (x2100 33 8 7 5 4 4 7
cartons) 68
Analysis 1: Opening a new factory
Potential Sites
Kuwait
KSA - Dammam
 Analysis 1: Cost Calculations
Annual Equivalent of
Cost (KD/year)
77,500 Existing Factory in Kuwait:
Maintenance Cost
Potential Factory:
53,070 Setup Cost (P = 300,000, i = 12% , n =
10,800 10)
Preventive Maintenance Cost
63,870 Setup and Maintenance Cost
 Analysis 1: Establishing a New
Factory
Input:
• Cij : Cost of transporting one truck from i to j
• Dj : Demand of j
• Ki : Capacity of i
• Ai : Annual equivalent of running factory
Decision Variables:
• Yij : Whether j is covered by i or not (1,0)
• Si : Whether a factory exists or is established at i or
not (1,0)
 Analysis 1: Model
Objective Function:
• Min ∑CijDjYij + ∑ AiSi
Constraints:
• Ensures that the demand of every market is supplied by
one factory
• Ensures that a factory can only cover a markets demand if
it exists or is established
• Ensures that the demand supplied by a factory does not
exceed its capacity 
• Ensures that only one new factory is opened at every site
• Ensures that Kuwait Plant Exists)
 Analysis 1: Output

Total Truck
DjYij Kuwait KSA UAE Bahrain Qatar Oman Iraq
loads
Kuwait 28 0 0 0 0 0 3 31
KSA 0 6 5 4 3 3 0 21
Total Cost = 13991 KD/month

S2 = 0
S3 = 1 (New Factory in KSA)
Analysis 2: Using New Trucks with
Existing Factory
The capacity of the new truck is 4130 cartons
KSA UAE
Cost from (KD/truck) 300 450
Demand (truck/month) 3 3
 Analysis 2: Model
Decision Variables:
• Tij : Whether the new trucks are used to
transport from I to j
Objective Function:
• Min ∑CijDjYij + ∑ AiSi + ∑CijDjTij
 Analysis 2: Model
Constraints:
• Ensures that the demand of every market is
supplied by one factory using one mode of
transportation
• Ensures that the demand supplied by a factory by
one mode of transportation does not exceed its
capacity
 Analysis 2: Output

Total Truck
DjYij Kuwait KSA UAE Bahrain Qatar Oman Iraq
loads
Kuwait 28 0 0 0 0 0 3 31
KSA 0 6 5 4 3 3 0 21
Total Cost = 13991 KD/month

S2 = 0
S3 = 1 (New Factory in KSA)
T12 = 0
T13 = 0
Analysis 3a: Replacing Bottleneck
Machines
Increase Capacity of Kuwait Existing factory
by replacing machines
New Line speed 290 - 300 can/min
 Analysis 3a: Cost Calculations
Annual equivalent of expanding the capacity
cost = 11,522 KD, where
Price (KD) Machine Name

29,247.5 Filler

25,331 Can Seamer

3573.5 Labeler

58,152 Original Total

65,130 Current Estimated

 
 Analysis 3a: Replacing Bottleneck
Machines
Total
Kuwait KSA UAE Bahrain Qatar Oman Iraq Truck
loads
Kuwait (old
truck) 28 0 0 4 3 3 3 41
(DjYij)
Kuwait
(new truck) 0 3 3 0 0 0 0 6
(DjTij)
Total Cost = 13153 KD/month

S2 = 0
S3 = 0
Q1 = 1 (Bottleneck Machines Replaced)
T12 = 1
T13 = 1 (New trucks used)
 Analysis 3b: Demand Increase
Run the model with the new forecasted
demand.
Total
DjYij Kuwait KSA UAE Bahrain Qatar Oman Iraq
Truck loads
Kuwait
33 0 0 0 0 0 7 60
Existing
KSA
0 8 7 5 4 4 0 5
Potential
Total Cost = 15181.00 KD/month

S2 = 0
S3 = 1 (establishing a new factory in KSA is more profitable)
Q1 = 0
T12 = 0
T13 = 0
 Summary of Results
Total Cost (KD) per Result Alternative
month
13991 Establish Factory in KSA 1. New Factory in KSA VS. New
Factory in Kuwait
13991 Establish Factory in KSA 2. New Factory in KSA VS. New
Factory in Kuwait
VS. New Trucks
13513 Increase Capacity + use New 3 a. New Factory in KSA VS. New
Trucks Factory in Kuwait
VS. New Trucks VS.
Increase Capacity
15181 Establish Factory in KSA 3 b. Increase in Demand
New Factory in KSA VS. New
Factory in Kuwait
VS. New Trucks VS.
Increase Capacity
 Conclusion
With the current average demand figures, it
is suggested to replace the bottleneck
machines of the existing Kuwait Factory and
use the new modes of transportation

KD 14,880 /month As-Is Monthly Transportation

Costs
KD 13,153 /month Suggested Plan’s
Transportation Costs
11.6 % Savings
 Conclusion
Based on expected increase in demand for its
products, the company will not be able to
satisfy it.
NCF should consider establishing a new
factory in order to increase its production
rate and ability to meet the Gulf Region
Demand.
 Facilities Planning at NFC
Alaa Aboelfotoh
Basel Nijem
Nouf Al Fraih
 Problem Statement
The machines are too crammed.
Pathways are obstructed.
Inventory spread throughout the factory
Wasted Space
 Solution Approach
Analyze the current layout.
Study the flow between departments.
Develop a layout using RDM based on the
relationships between the departments.
Develop a layout based on the flow and cost
of transportation using CRAFT.
Compare both layouts.
Analysis: As-is Layout
Analysis: As-is Layout with Dimensions
Analysis: Flow Between Departments
Raw Materials

Empty Cans

Filled Cans

Labels
Analysis: As-is Grid Layout

Each Grid represents 25 m2

Analysis: REL Chart
 Analysis: Proposed Layout by RDM

10 2 2 2 1 1 1 12      

10 2 5 5 1 1 1        

10 13 4 5 6 1 1       8

3 4 4 4 6 1 1     8 8

3 4 4 4 6 6 11     8 8

3 7 7 7 6 6 14     8 8

  7 7 7 7 9 9        

Taking into consideration that Dept #8 is a Fixed department

 Material Handling
Overhead Conveyors
Conveyors
Forklifts
Crates
Pipes
Material Handling
 QSA CRAFT
The initial layout, interdepartmental flows and
material handling costs were provided to a
computer software (CRAFT)
The total flow costs per day = 124.15 KD (1% of the
total costs.)
 Results

2-way Exchange 3-way Exchange

2-way followed by 3-way Exchange 3-way followed by 2-way Exchange

Results
The best alternative is to apply 3-way followed by 2-
way Exchange which results 74.18 KD
Massaged CRAFT Layout

10 2 2 2 1 1 1 12      

10 2 5 5 1 1 1        

10 13 4 5 6 1 1       8

3 4 4 4 6 1 1     8 8

3 4 4 4 6 6 11     8 8

3 7 7 7 6 6 14     8 8

  7 7 7 7 9 9        
 Layouts comparison

The following evaluation criteria were selected to be

used in comparing both layout alternatives in order to
determine which is better.

Evaluation Criteria:
A. Minimize the cost of distance traveled.
B. Smooth intradepartmental flow.
C. Improve the overall aesthetics of the layout.
D. Space utilization.
 Layouts comparison
  A B C D Row Relative
Totals Weight
Craft 0.47 0.30 0.01 0.03 0.81 0.72
RDM 0.09 0.03 0.03 0.16 0.32 0.28
Column 0.57 0.33 0.04 0.20 1.13 1.00
Totals

Based on the final score the CRAFT alternative will be

considered as our proposed layout.
Proposed Layout
 Savings
As-Is Material Handling 124.1587 KD/day
Cost
Proposed Layout’s Material 50.52348 KD/day
Handling Cost
Savings 59.3 %
Annual Savings KD 22,975
Costs of Changing the Layout
Considerations
KD 2,487 Average Daily Profit
5 – 6 days Number of Days
required
KD 12,435 – 14,922 Production Loss
KD 2000 Average Labor Costs

22,975 KD 22,975 KD 22,975 KD 22,975 KD 22,975 KD 22,975 KD 22,975 KD

0 1 2 3 4 5 6 7

P= 15,000~17,000 KD
 Justification of changing the
layout
Taking i = 12%, n = ?

Present Worth Cost of Changing Layout

5,517 15,000
… …
3,5,17 17,000

This change in layout is profitable in less than 1 year for both conditions.
Conclusion