A systems study on the production system of Samuya Food Manufacturing, Inc.

• Main Authors: Altamirano, Leandro O., De Chavez, John Karsten D., Tianzon, Miguel Carlo R.
• Format: text
• Language: English
• Published: Animo Repository 2016
• Subjects: Systems engineering; System analysis; Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/9189
• Institution: De La Salle University

Samuya Food Manufacturing, Inc. (SMFI) produces Ludy's peanut butter and follows a production plan that is prepared every month in order to meet demand. Currently, SMFI cannot attain the desired output per month, with an average deviation of 2711.32 kilograms, which is dictated by the production plan set by the company every month. This research paper aims to pinpoint the root cause as to why SMFI cannot always produce the amount that they are suppossed to be producing every month according to their production plans and formulate a range of solutions that would be able to address this issue. The bottleneck identified was the sorting process due to the fact that it relies mainly on human workers and has the lowest effective capacity of all process in the production line which is 1308.46 kilograms of peanut butter per shift. Grinding was also found to be the cause after conducting a Pareto chart analysis of root causes. This Pareto analysis aided in determining that unallowed breaks from these two methods were the main cause of the deviations from the production plan, since the combined losses from these two process amounted to 81% of the average deviation. Solutions were researched and assessed for each cause in order to minimize or eliminate the deviation from the production plan. The integration of a sorting machine in the sorting process, a signaling system in the grinding process, and a documentation system per process were successfully identified as a feasible solutions. The financial feasibility of these solutions were tested using cost-benefit analysis, discounted payback period, and net present value (NPV). These analyses were conducted and yielded that the discounted payback period for the proposed solutions is 7 months and 14 days based on the cash flows of 2014 and 2015. The resulting NPV from the proposed solutions was Php2,817,300.56. The analyses done have deemed the solutions as feasible to implement.