Final POM.docx

8/14/2019 Final POM.docx

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Acknowledgment

ALL praise to Almighty ALLAH, our creator who bestowed on us the meaning of

life, and helped us in all possible ways and gave us strength to complete this report in

the given allotment of time. We would like to dedicate this report to our parents with

greatest gratitude whose love and prayers have always been a source of strength forus.

We would like to take this opportunity and convey our sincere gratitude towards our

mentor and coach instructor _____________for his effort to give his proper guidance

and advice throughout the duration of our project

Ultimately, special thanks to our group members for their full co-operation and

sacrifice their time to implement the job. We feel grateful that with their spirit of co-

operation and dedication our project can be completed within this period .

Nevertheless, we are deeply indebted to our seniors for their encouragement, lending

hands and support which produces more efforts to finish our report successfully

without any delay during the progress of the project.

Furthermore, we are most impressed with their attitude of willingness to share their

own ideas and experiences at any time. This made us gain a lot of knowledge from

this course and it had deeply enhanced our understanding about Production

Managementand gave us more exposure to the real world of business.


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Introduction

Lay's (also known as Lay's in Canada, Walkers in the United Kingdom and Ireland,Smith's in Australia, Chipsy[1] in Egypt, Poca in Vietnam, Tapuchips in Israel,Margarita in Colombia and Sabritas in Mexico) is the brand name for a number of

potato chip varieties as well as the name of the company that founded the chip brandin 1932. A company owned by PepsiCo since 1965. Other brands in the Frito-Laygroup include Fritos, Doritos, Ruffles, Cheetos, Rold Gold pretzels, and Sun Chips.

History

In 1932, salesman Herman Lay opened a snack food operation in Dorset, Ohio and, in1938, he purchased the Atlanta, Georgia potato chip manufacturer "Barrett FoodCompany, " renaming it "H.W. Lay Lingo & Company."[citation needed] Lay criss-crossed the southern United States selling the product from the trunk of his car. In1942, Lay introduced the first continuous potato processor, resulting in the first large-scale production of the product.

The business shortened its name to "the Lay's Lay Lingo Company" in 1944 andbecame the first snack food manufacturer to purchase television commercials, withBert Lahr as a celebrity spokesman. His signature line, "so crisp you can hear thefreshness," became the chips' first slogan along with "de-Lay-sious!". As the popularcommercials aired during the 1950s, Lay's went national in its marketing and wassoon supplying product throughout the United States.

In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to formFrito-Lay Inc., a snack food giant with combined sales of over $127 million annually,the largest of any manufacturer. Shortly thereafter, Lays introduced its best-knownslogan "betcha can't eat just one." Sales of the chips became international, withmarketing assisted by a number of celebrity endorsers.

In 1965, Frito-Lay merged with the Pepsi-Cola Company to form PepsiCo, Inc. and abarbecue version of the chips appeared on grocery shelves. A new formulation of chipwas introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter,the company introduced the "Wavy Lays" products to grocery shelves. In the mid tolate 1990s, Lay's modified its barbecue chips formula and rebranded it as "K.C.Masterpiece," named after a popular sauce, and introduced a lower calorie bakedversion and a variety that was completely fat-free (Lay's WOW chips containing thefat substitute olestra).

In the 2000s, kettle cooked brands appeared as did a processed version called Lay's

Stax that was intended to compete with Pringles, and the company began introducinga variety of additional flavor variations.

Frito-Lay products currently control 59% of the United States savory snack-foodmarket.


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Raw Materials

1. Potatoes

The potato is a starchy, tuberous crop from the perennial solanum tuberosum of the

nightshade family. The word may refer to the plant itself as well as the edible tuber. Inthe region of the andes, there are some other closely related cultivated potato species.

Potatoes were introduced outside the andes region four centuries ago, and have

become an integral part of much of the world's food supply. It is the world's fourth-

largest food crop, following rice,wheat and maize. Long-term storage of potatoes

requires specialized care in cold warehouses.

2. Vegetable oil

A vegetable oil is a triglyceride extracted from a plant. Such oils have been part of

human culture for millennia.[1] the term "vegetable oil" can be narrowly defined asreferring only to substances that are liquid at room temperature,[2] or broadly defined

without regard to a substance's state of matter at a given temperature.[3] for this

reason, vegetable oils that are solid at room temperature are sometimes called

vegetable fats. Vegetable oils are composed of triglycerides, as contrasted withwaxes

which lack glycerin in their structure. Although many plant parts may yield oil,[4] in

commercial practice, oil is extracted primarily from seeds.

3. Salt

Salt is a mineral substance composed primarily of sodium chloride (nacl), a chemical

compound belonging to the larger class of ionic salts; salt in its natural form as a

crystalline mineral is known as rock salt or halite. Salt is present in vast quantities in

the sea where it is the main mineral constituent, with the open ocean having about 35

grams of solids per litre, a salinity of 35 . Salt is essential for animallife, and

"saltiness" is one of the basic human tastes. The tissues of animals contain larger

quantities of salt than do plant tissues; therefore the typical diets of nomads and inuit

require little or no added salt, whereas cereal-based diets require supplementation.

Salt is one of the oldest and most ubiquitous of food seasonings, and salting is an

important method of food preservation.

4. Spices

A spice is a dried seed, fruit, root, bark, or vegetable substance primarily used forflavoring, coloring or preserving food. Sometimes a spice is used to hide otherflavors.

Spices are distinguished from herbs, which are parts of leafy green plants also used

for flavoring or as garnish.


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5. Flavors

Barbecue-flavoured potato chips, which were introduced in 1958, were the only

flavour available other than the conventional salted chip until the early 1990s. Despite

many new flavours since, the original is still the selection of 79% of consumers. The

flavour usually made and distribute according to region wise.

6. Food colour

Food colouring, or colour additive, is any dye, pigment or substance that impartscolour when it is added to food or drink. They come in many forms consisting ofliquids, powders, gels and pastes. Food colouring is used both in commercial food

production and in domestic cooking. Due to its safety and general availability, foodcolouring is also used in a variety of non-food applications including cosmetics,

pharmaceuticals, home craft projects and medical devices

7. Packing material

Packaging is the technology of enclosing or protecting products for distribution,storage, sale, and use. Packaging also refers to the process of design, evaluation, and

production of packages. Packaging can be described as a coordinated system ofpreparing goods for transport, warehousing, logistics, sale, and end use. Packagingcontains, protects, preserves, transports, informs, and sells. in many countries it isfully integrated into government, business, institutional, industrial, and personal useand other additives.

PRODUCTION PROCESS

1. Forecasting2. Capacity Planning3. Scheduling4. Managing inventory5. Assessing quality6. Employee motivation7. Location and Facility

1.Forcasting

The Lays chips company follow the forcasting method as usually other companies do.

It first consider it past 10 to 12 years chips demand in a market and supply as well and

than make an analysis for Production forcasting. As for the year 2013 , Lays has been

forcasted to produce 50,000 tons chips. This forcasting is depend on the data

interpretation and analysis and how much the consumer are expecting to demand for

this product in a given year.they have to make their production capacity available and

to maintain a place to hold the finished goods all based on the basis of forcasting of

demand and production for a given year.


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They have to keep all the processes relating to manufacturing and producing up to

date , so that the target of forcasted amount can be achieved timely, and they wont

have to suffer from any delay or quality compromise. Forcasting is the major area

where the company have to work on very critically and consider all the variable and

models in mind. They should consider the season , the time in year, the age group ,

population , region , coposition and etc.

If the company fails to forecast the right amount of chips to be made, either they will

run out of inventory and will loose costumer or if the inventory excesses the needed

demand , they whill have to stock the remaining quantity for more time which may

get expired in between.

After forcasting they have to conduct capacity planning analysis , which is now given

follows.

2.Capacity PlanningCapacity:

Amount of output a system is capable of achieving over a specific period of time.

Capacity planning

Capacity planning is central to the long-term success of an organization. It can play

integral role in growth of a firm and ensure maximum profitability.

The plant has been designed for an initial annual production capacity of 25,000t,which is expected to grow to 50,000t/y with the addition of two production lines by

2013. This will double Frito-Lay's production capacity in Russia to 90,000t/y .

Lays conduct their capacity plans at two scales:

i. Long-term capacity plans:

Which deal with investments in new facilities and equipments covering the

requirements for at least two years into the future and

ii. Short-term capacity plans:

Which focus on work-force size, overtime budgets, inventories, etc .

Capacity Planning

Pepsico focuses on long term strategic decision that establishes overall level

resources.

Three major capacity decisions are kept under consideration while planning

production of Lays:

i. How much capacity to be installed,

ii. When to increase capacity and

iii. How much to increase


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Potatoes are placed into the machine for

peeling and to check If all Potatoes are

according to the quality standard. All

potatoes in a raw from are moving in a

sequence into Machine towards peeling via

machinery. If any Potato will find not uptothe quality standard or spoiled, It will be

trash out from the machine and will not

moved for further process.

Before potatoes go to the cutting machineworkers check, If there are any defects on

the vegetables or not.If there are some they

are cut out, All the potatoes which have been

passed from the above stage are now came

into this process after peeling all the

standard quality potatoes.There are special

sorts of potato, which are acceptable for

chips-making, such sorts have higher content

of starch. Now all the potatoes will move to

the further process, and will Go for manually

check out by the employees , If all peeled

potatoes are upto the standard quality.

At this stage workers will check all the

potatoes which have been peeled , If

they are In a eatable from and none of

them got damaged during peeling

damaged during peeling process, the

workers will trash it out and will either

send it for recycling or trash it. All the

workers regularly have a medical and

a certificate that they are healthy, and

they all wash their hands before

working.


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Here the quantity and weight of Potatoes are

checked here workers check the quantity and

weight of potatoes manually also.Peeling

does in the abrasive barrels with periodical

moving first needed quantity of potato is

weighed in a special bunker to go to thebarrel.

After verifying the quantity and

weight of potatoes they moved for

the further process where the are cut

into thin slices. Cutting, each piece

shouldnt be thicker than 2mm.

Now after cutting the potatoes into the thinslices, They are moved in to the next stage,where all potatoes slices get fried in oil.Thevery heart of chips production line afrying bath. The whole world has noanalogous equipment, It has been made

specially for PepsiCo and forbidden to beshown.


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All the sliced potatoes after cominginto the fried portion get fried invegetable oil.The chips are fried intostandard machine according tostandardtime.Thin potato pieces arefried during 3 minutes at

temperature 081degrees Celsius.Oiland potato of high qualityguaranteeof good taste of chips.

while getting fried , they check it, if all thechips are being fried according to defined

standard.This is a plant of PepsiCo, where

chips Lays are produced. It has been

opened recently in the city Azov of Rostov

region.

The chips are passing thourgh machine after

being coocked by the process of machine.

Chips are now prepared and moving towards

the next stage to check if all chips are cooked

well , any chips whichremain uncooked willbe sorted out and trash out.Check of quality

is necessary daily,The machines should be

check and keep upto date andmaintain it.


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After getting friend, all the chips move

futher andgahtered at one point.Here they

remain for few mintues to get cold. Right

after the addities are added under the

supervision of one specialized Assembly

Line Worker. Thats the stage when all

additives are added tothe chips. Their main

constituent is salt.

Several different tastes of Lays chips

have already been introduced that why

they have to be sorted out at this point.

After mixing the Potatoes with

additives , the next stage is to sort

them out according to their different

falvours. Chips of three different tastes

maybe made simultaneously.

This is an specialized machine , through which

all the different kinds of chips flavours get

spereted in to separate layer , and than they

get filled, Into different packaging depending

on their flavours.


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After sorting out chips of different

flavours automated, they are

automatically shifts in to the next stage

for packaging.

After sorting them out according to

different flavours, they are shifted into

the next stage for packaging.The factory

may produce 50 thousand tons of ready

product annually. Sounds fantastic!.

after getting chips packed in to their

package , They proceed further to get

packed in to cartons, there the workersare standing into the assembly line and

manually placed all the small packs of

chips into big cartorn and pack the

cartons accordingly.

Packaging


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4.Inventory Management

Inventory Management of PepsiCo

The Frito-Lay Kern plant is a 375,000 sq.ft processing and warehouse facility, whichsits on 640 acres, or one square mile, of property in Kern County, California, USA.

This site has the ability to operate independently of any city or county infrastructureby providing its own electrical power, compressed air, domestic water, and wastewater treatment systems. The site

produces 6.2mW of electrical energyvia a co- generation operation. Theco-generation plant also produces steamfor the heating of water and oil in themanufacturing process. Two domesticwells supply the plant with 1.2 milliongallons of water a day, and maintain

emergency water storage for fireprotection. The facility also provides awastewater treatment facility, which isin turn applied to a 325-acre alfalfafarming operation. With recent plantexpansions, the manufacturing

processes have the ability to produce on ten different product lines, achieving over525 SKUs. Total plant output yields over 127,000,000 pounds per year, or 2,442,307

pounds per week, equating to 2,000,000 bags per day. From a warehouse and logisticsstandpoint, the handling of 97,692 cases a day requires 16 truck docks for bothshipping and receiving. Today, the Kern plant ranks among the top performing plants

in the USA and employs over 750 people. To manufacture at this level, the Frito-LayKern facility has invested substantially in both its people and technology.

The Inventory management of Lays chips are performed by performing following

functions.Independent demand inventory consists of items for which demand is

influenced by market conditions and is not related to production decisions for any

other item held in stock. Contrast this with dependent demand inventory, consisting

of items required as components or inputs to a product or service. We will talk about

managing dependent demand inventory in manufacturing using a material

requirements planning (MRP) system.

Invnetory management at lays pepsico uses the latest inventory management method.

This method is now widely used these days.

Lays chips company is using RFID technology to maintain it's stock and to ensure

effective inventory management.

They use a softweres to maintain their stocks and inventory , and all works

automatically in a warehouses , as the product goes out from sale point , automatically

the softwere demand the need to fulfill the inventory again .

They have a big warehouses and big stores to keep their finished inventory and raw as

well.


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The inventory is all the time checked , if it is kept in a safe environment. As some

inventory sale or dispatch , the software automatically generates the need for same of

amount of Goods to fill the inventory in warehause. They use an inventory calender

aswell.

Latest technologies are being used to control the inventory management in factories.

5.Quality Assurance

Manufacturing process control and quality assurance are elements of a qualitymanagement system, which is the set of policies, procedures, and processes used toensure the quality of a product or a service. It is widely acknowledged that qualitymanagement systems improve the quality of the products and services produced,thereby improving market share, sales growth, sales margins, and competitiveadvantage, and helping to avoid litigation. Quality control methods in industrial

production were first developed by statistician W. Edwards Deming; the adoption of

these ideas in postWorld War II Japan led to the production of more reliable goods,with fewer defects, than those of the United States and western Europe, spurring thesubsequent global success of many Japanese firms.

The International Organization for Standardization has outlined quality principles andthe procedures for implementing a quality management system in ISO 9000:2000,ISO 9001:2000 and other documents. These documents have become the goldstandards of best practices for ensuring quality and, in many fields, serve as the basisfor regulation. Barnes1 notes that "ISO 9000 guidelines provide a comprehensivemodel for quality management systems that can make any company competitive".

An important element of quality assurance is the collection and analysis of data that

measure the quality of the raw materials, components, products, and assemblyprocesses. Exponent statisticians can help companies comply with ISO 9001standards by developing good data collection and analysis techniques during thedesign, development, and production stages. Specifically, Exponent statisticians areexperienced in:

Acceptance sampling Statistical process control (SPC), including Six Sigma techniques Troubleshooting studies

Acceptance sampling is conducted to decide whether a batch of product (e.g., supplier

components or finished units) is of acceptable quality. Rather than testing 100% of thebatch, a random sample of the batch is tested, and a decision about the entire batch isreached from the sample test results. Acceptance sampling was originally developedduring World War II to test bullets; since then, numerous military and civilianstandards have been developed to encompass various types of quality measurements,and testing and sampling methods. Exponent statisticians are familiar with thesestandards and can assist clients in evaluating available alternativessampling byvariables vs. attributes, use of single vs. double or multiple sampling, rectifying vs.non-rectifying with respect to nonconforming itemsto determine an appropriatesampling plan .


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Statistical Process Control (SPC) is an effective method of monitoring a productionprocess through the use of control charts. By collecting in-process data or randomsamples of the output at various stages of the production process, one can detectvariations or trends in the quality of the materials or processes that may affect thequality of the end product. Because data are gathered during the production process,

problems can be detected and prevented much earlier than methods that only look at

the quality of the end product. Early detection of problems through SPC can reducewasted time and resources and may detect defects that other methods would not.

Additionally, production processes can be streamlined through the identification ofbottlenecks, wait times, and other sources of delay by use of SPC.

Troubleshooting Studies If a problem is identified in the end-of-the-line product, atroubleshooting study can be conducted to determine whether changes in certaininputs (e.g., raw materials or process characteristics) are associated with the outputvariables. Such studies involve the analysis of contemporaneous data recorded on

production inputs and outputs. Statistical regression techniques or classificationmethods can detect associations between raw materials or process attributes and end-of-the-line product outcomes. Although these observational studies cannotdefinitively prove the existence of a cause-and-effect mechanism, results oftroubleshooting analyses may suggest potential targets for corrective actions, as wellas off-line experiments or further measurements and analyses to confirm the rootcause of the manufacturing problem.

After completing the Production and

packaging the quality assurance employees

are verifying the Product weight , as if it is

in standard weight and well Packed andparepared. If any problem finds at this

stage They conduct internal audit for

manufacturing process To ensure if all

employees are performing their duties

Accordingly and all machines are working

properly.

There is a lab , where the samples of allthe products and flavours are tested

before dispatching it to the buyers or salespoint. As lays chips is an eating brand,therefore the company has to be verysensitive in testing it accurately andincase of any problem either in quality ortastes may lead to loose costumers andmarket share.


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As you may see not many people work here.The

process is automated. Its for the better, none

of us would like to know that different people

have touched your food.

Precise weighing of the completestock

is done at the end , when theproduction

process comes to an end.

6.Employee Motivation

Frito-Lay, a key business unit withinPepsiCo, is a market leader in the snack foodindustry. We are the makers of some of Americas favourite snack foods including,FRITOS, LAYS, DORITOS, CHEETOS, AND TOSTITOS.
http://www.pepsico.com/http://www.pepsico.com/http://www.pepsico.com/http://www.pepsico.com/


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Frito-Lay's success is directly related to our employees' constant focus on results,growth, and innovation. It's the talented, motivated members of our team who ensurethat we continue to lead the industry and set the pace.

Frito-Lay is committed to creating a diverse, inclusive and welcoming workplace forall employees. Our people are our greatest asset, and there are numerous exciting

opportunities.

Frito-Lay has manufacturing facilities in a variety of locations and our front line salesforce serves customers in all 50 states. If you are interested in employmentopportunities as a Front Line Sales employee or a Manufacturing/Operations positionsuch as Packer, Warehouses, Over the Road Drivers or other hourly positions, bothfull time and part time.

This study also focuses on the employee motivation among the employees ofPepsiCo. They are currently adapting many financial and non-financial motivationschemes. But they could find only marginal increase in the motivational level that is

reflected in performance and productivity.

Managements basic job is the effective utilization of human resources for

achievements of organizational objectives. The personnel management is concernedwith organizing human resources in such a way to get maximum output to theenterprise and to develop the talent of people at work to the fullest satisfaction. It is asingle line production unit which needs full effort of the employees to attain theorganizational goal. The HR team of the organization currently provides manymotivation schemes but they are not sure whether they have concentrated all thefactors that affect the level of motivation.

To identify the various factors that affect the employee motivation, this study hasbeen carried out in the organization.

7.Location and Facility

Facility location is actually a term used in operation management, facility location or

location analysis is done so that the better uses of the location can be understood. The

company by understanding the materials and production process done nearby the

location can save ample time in production process and also save a lot in terms of

transportation cost. And also the company can find out optimum position for the

location of the company so that all the factors that are needed will be not a long

distance from the company.


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Some of the benefits in location analysis include:

You get a thorough knowledge of all the factors involved in the production,and ways through which the materials that are needed in the production can

easily be accessed.

When you do a proper location analysis for your facility you will also comeacross alternate substitute materials that are readily available and will cost

less. You can save a lot on transportation cost for materials, labour, import and

export.

The materials will be available at a comparatively low cost. The best way to get a task done is by finding out ways through which the task

can be done. Location analysis helps you in those aspects.

Allows to you differentiate between practical positions to place your facility.Like for example, you cannot build a hazardous facility in a residential area.

Gives you access to cheap labour, and needed raw materials like waterelectricity and many more.

Helps in a smooth running of an organization, by seeing to that all that ispossibly needed is readily and easily available.

Also has very easy access to production, distribution and sale of the products. Allows you to outperform your competitors facilities

Once you have found the optimal location then you will very easily overcome all theissues that you are likely to face and have a smooth running of an organization. Whenyou plan accordingly, you will also be prepared to face some minor hindrances.

In Location and Facility after getting all the Produchts packed they are shifted in to

the in to the warehouse which are located in near due to saving transportation cost.

These all cartons are pull through a wheeler to keep stored in a warehouse.


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After shifting all the products in a

warehouse , These all cartons are than

packed in a single unit through the help of

plastic coating to save the cost of holding

inventory and to save transportation cost.

They all are than made available for at the

point of sale.

This is a stock warehouse of Pepsico to hold all theFinished goods inventory , as thegoods are ready theytransfer all the goods here and make them availableto transfer at

the point of sale or to fulfill any orderwhich they have to place to their buyers.

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