A system study on the production line of 11kg cylinder tanks of FSC Metal Corporation

• Main Authors: De Jesus, Shereen Louise S., Gan, Angeline C., Li, Lelaine L.
• Format: text
• Language: English
• Published: Animo Repository 2011
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/12133
• Institution: De La Salle University

FSC Metal Corporation (FMC) manufacturers, repairs and re-qualifies Liquified Petroleum Gas (LPG) cylinders for household use and for automotive use. The administrative office, manufacturing plant and warehouse is located at an industrial area in Ugong, Valenzuela City. Currently the company manufacturers different sized cylinders such as 2.7 kg, 5 kg, 11 kg, 22 kg and 50 kg LPG cylinder tanks. The 11 –kg cylinder tanks comprised of 81.82% of the actual sales order of FMS from November 2009 to October 2010 thus it is the system under study. The company is able to deliver on the average 638 11 –kg cylinders per day, which is 77 units below the theoretical effective capacity of the plant at 715 11-kg units per day, which led the company to incur an amounted yearly opportunity cost of Php 3, 363, 360.00. After the evaluation of the probable causes, several factors were found to cause production plant not being to meet the theoretical effective capacity. These are the absenteeism rate of the workers (having a 12.99% contribution to the problem), occurrence of machine breakdown (having a 9.09% contribution to the problem), occurrence of reject rates (contributing 51.95% of the problem) and the flow of material throughout the plant (contributing 23.37% of the problem). Based from the multiple linear regression, the significant factors that contribute to the problem are the occurrence of reject rates and the absenteeism rate of the workers. The proposed solutions to improve the system include giving incentives to the workers through recognition to reduce the absenteeism rate, the use of machine cards and training to lower the frequency of occurrence of machine breakdown, implementation of a formal policy for rejects to reduce the reject rate and application of line balancing for the company to reach the effective capacity of the production plant. The computed net present value (NPV) of the proposed solutions is Php 7,565, 980.13 The company would be able to recover its initial investment of Php 1,072,883.20 in 0.2009 year of 2.4102 months. Given these values, it can be seen that the propose solutions are feasible to implement. The solutions can be implemented within approximately 12 weeks or 3 months.