Question

Assume you live in a mid-size city in United states, in the State of Texas. You are starting a healthy energy drink company. Targeting the fitness community in your area. Develop a diagram of the facility layout and justify your layout choice. Show how the product flows through the facility from raw materials to finished product. Diagram should reflect space requirements for each function (machine, operator, and WIP, etc.). Discuss briefly, what happens at each station, and show output at each station (pieces per hour or similar measure). How will you utilize “just-in-time”concepts in your facility? Discuss your Inventory management policies and ERP implementation, if any?

Answer 1

Objective :- Deliver best in class ENERGY DRINK to customers.

We intend to procure all the raw material for the health drink from the local farmers and the wholesale market. The goods will move straight to the inspection area and the processing unit. All the processed goods will be finally inspected and then would be sent for packaging. The packed goods are send for ware-housing from where they wil be shipped to the super-markets and health gym's directly.

The above is the process-flow-chart of the raw material to finished goods for a health drink. To understand it in a more manner, let us study it in greater details.

1. RAW MATERIAL :- The procurement of the raw material would be directly from the locla farmers of Texas and nearby area's for the best of friuts and fruit-pulps. This would help the company get fresh friuts / pulps, lesser transit time, cost effective and would save on the storage space required.

The raw material would be directly delivered to the inspection area and the processing unit. The first step would be the inspection of raw material and then the goods would be sent for washing and peal-off (if required) area. The next step in the process would to crush / process the RM and prepare the juice. This would be done with the help of state of the art machines. (involving no human hand touch) This would ensure the best quality and hygeine for the final output.

The juice would be stored in containers for the final flavours (like berry, mango, apple, mix fruit...) and added protine / other required preservatives. And the last step would be to inspect for QC and send for packaging. After packaging in different sizes and packs, the final products are sent to the despatch section for shipping / billing to the super markets and gyms.

The production layout most suited ofr the drink company would be the straight line production facility. This would save time and is most convenient to quality check and inspection.

The space reqiured for this step would be as under :-

SL NO	PROCESS	MACHINE / OTHER REQUIREMENTS	SPACE REQUIRED	OUTPUT / HOUR
1.	RAW MATERIAL PROCUREMENT			10 CRATES
2	INSPECTION AREA.	COMMON AREA FOR INSPECTION, WASHING,	750 SQ. FTs	8 CRATES OF FRUITS
3	WASHING / PEEL-OFF			9 CRATES OF FRUITS
4	CRUSHING / PROCESSING	MACHINE AREA FOR PROCESSING UINIT.	500 SQ FTs	(MAX. CAP) 18 CRATES OF FRUITS
5	MIXING / STORAGE	STORING & MIXING CONTAINERS	500 SQ FTs	500 LITERS
6	INSPECTION / QC	COMMON AREA FOR QC & PACKING		500 LITERS
7	PACKAGING	MACHINES FOR PACKAGING	250 SQ FTs	400 LITERS
8	DESPATCH SECTION	WARE-HOUSING & DESPATCH	500 SQ FTs
9	BILLING / SHIPPING

The "Just-in-time" concept in such manufacturing facility plays a major role. First, we use this concept in the raw material procurement process, (as discussed above). The next use is in the processing unit as it would use the maximum capacity of the plant.

The next best demonstration of the concept is by delivering the orders of super-markets with-in 48 -72 hours of order procurement. This would demonstrate the smooth functioning of the entire process orientation of the unit.

The INVENTORY MANAGEMENT of raw materials should be of two to seven days, depending upon the perishability of the fruits / pulps. The final products should have a "holding capacity" of one week stock. The transit time is less as the products serve the local and peripherial markets.

The ERP implementation would help the company in maintaing the inventory and process control mechanism. It would also ensure the a healthy check on the cash-flow and credit control of the company.