HCCBPL

Summer I nternshipReport
on
I nventory Management System/Preform Yield Analysis

Hindustan Coca Cola Beverage Pvt. Ltd.Bhopal


Bansal I nstitute Of Research and Technology, Bhopal
Submitted By
Priyanka Soni
Under the guidance of
Mr. SumitGoswami(Project manager)

HCCBPL


Acknowledgement


The ideal way to commence the documentation of this project
would be to extend my profound gratitude to all those who encouraged
and guided me directly or indirectly throughout the two months project
tenure.
I would like to owe my sincere thanks to Mr. Sunil Mathew, Branch
Manager HCCBPL, Pillukhedi, Production Manager Mr. Pushkar
Verma, HCCBPL, QA Manager Mr. Rajkumar Tinkar, HCCBPL,
Executive Mr. Udhav shindhe specially thanks to all staff and colleagues
for helping me in project.
At the onset, I would like to present my sincere gratitude to
ProjectManager Mr. SumitGoswami, HCCBPL, HR Manager, Mr.
SurajitDey ,HCCBPl, Plant Manager Mr. T. Krishna Kumar, HCCBPL
for providing me with this valuable opportunity of pursuing my Summer
Project at the company.

HCCBPL

COMPANY PROFILE
ABOUT COMPANY:
Every person who drinks a Coca-Cola enjoys a moment of refreshment and shares an experience that
millions of others have savored. All of those individual experiences combined have created a worldwide
phenomenon a truly Global Brand. On the distribution front, 10-tonne trucks, open-bay three-wheelers
that can navigate the narrow alleyways of Indian cities, ensure availability of our brands in every nook and
corner of the country. The company-owned Bottling arm of the Indian Operations, Hindustan Coca-Cola
Beverages Private Limited is responsible for the manufacture, sale and distribution of beverages across the
country. A career at Hindustan Coca-Cola Beverages Pvt. Ltd. is truly a one-of-a-kind experience.
Company Name:
Hindustan Coca-Cola Beverages Pvt. LtdIndustry:,
Consumer Products / FMCG
Type of Company:
Private Limited Company, Multi-national Corporation.
Address:
Hindustan Coca-Cola Beverages Pvt. Ltd.. Plot no. 169 -175,AKVN Industrial Area,Village-
Pillukhedi,Tehsil-Narsinghgarh,Dist.-Rajgarh-465667

Alternet Address:-
Hindustan Coca-Cola Beverages Pvt. Ltd..Malviya Nagar New market Bhopal.

HCCBPL

History
The Coca-Cola Company, nourishing the global community with the worlds largest selling soft drink
since 1886, returned to India in 1993 after a gap of 16 years giving a new thumbs-up to the Indian Soft
Drink Market. In the same year, the Company took over ownership of the nation's top soft-drink brands
and bottling network. No wonder, our brands have assumed an iconic status in the minds of the consumers.
Coca-Cola serves in India some of the most recalled brands across the world including names such as
Coca-Cola, Diet Coke, Sprite, Fanta, Thums Up, Limca, Maaza, Minute Maid Pulpy Orange, Minute Maid
Nimbu Fresh and Kinley (packaged drinking water).

Product and Services:
The business system of the Company in India directly employs approximately 6,000 people, and indirectly
creates employment for many more in related industries through our vast procurement, supply and
distribution system. The vast Indian operations comprise 25 company-owned bottling operations and 24
franchisee-owned bottling operations. That apart, a network of contract-packers also manufactures a range
of products for the Company.
Culture and Values
The Secret of Formula
Commitment, tempered by Passion and seasoned with a great deal of Fun is the Coke way of life. Drawing
upon our collective energies, this Secret Formula drives us to achieve greater results collaboratively and
thoroughly enjoy ourselves while doing it! The pace, energy and passion of our people constitute the
invisible glue that make us one of the most sought after workplaces.
Participative Leadership
Right from our interactions in the market, our Business Planning and our Brand launches, to our Employee
Engagement Programs, our Values Agenda, and employee processes, every system is available for
continuous improvement. A learning atmosphere, enabled by our Manifesto for Growth, helps us seek and
replicate the learning from within and outside our organization. Our Engagement programs enable us to
examine, validate and improve ourselves, constantly. Our colleagues involve themselves in our
opportunities for participative leadership volunteering for work groups that assist decision-making in
critical processes.
HCCBPL


Values
We are guided by the shared values that guide us a Company and as individuals
Leadership The courage to shape a better future
Passion Committed in heart and mind
Integrity Be real
Accountability If it is to be, its up to me
Collaboration Leverage collective genius
Innovation Seek, imagine, create, delight
Quality What we do, we do well
Coca cola in India
Coca-Cola, the corporation nourishing the global community with the worlds largest selling soft drink
concentrates since 1886, returned to India in 1993 after a 16 year hiatus, giving a new Thums up to the
Indian soft drink market. In the same year, the Company took over ownership of the nations top soft-drink
brand and bottling network. Its no wonder our brands have assumed an iconic status in the minds of the
worlds consumers.
A Healthy Growth to The Indian Economy
Ever since, Coca-Cola India has made significant investments to build and continually consolidate its
business in the country, including new production facilities, waste water treatment plants, distribution
systems, and marketing channels.
A Pure Commitment to The Indian Economy
The Company has shaken up the Indian carbonated drinks market greatly, giving consumers the pleasure
of world-class drinks to fill up their hydration, refreshment, and nutrition needs. It has also been
instrumental in giving an exponential growth to the countrys job listings.
Creating Enormous Job Opportunities
With virtually all the goods and services required to produce and market Coca-Cola being made in India,
the business system of the Company directly employs approximately 6,000 people, and indirectly creates
employment for more than 125,000 people in related industries through its vast procurement, supply, and
distribution system.
HCCBPL

The Indian operations comprises of 50 bottling operations, 25 owned by the Company, with another 25
being owned by franchisees. That apart, a network of 21 contract packers manufactures a range of products
for the Company.
These are only some of the facts that speak about our commitment to the growth of the Indian Economy.


HCCBPL

ABOUT PLANT:
Plant History & Location:
Hindustan Coca-Cola Beverages Private Limited pilluikhedi is a 100% subsidiary of the Coca Cola
Company. This plant has largest bottling facility in country.
The first step in the setting this plant was the procurement of 17.5 acres of land on 15
th
June 1999.
Thereafter a total of 70 acres was acquired. Civil construction commences on 17
th
June, just 2 days from
land acquisition. And amazingly, the plant produced its first commercial batch of product, Thumps up
within 212 days, on February 2, 2000.
Subsequently PET production started on 25
th
march & Maaza on 13
th
April 2000. This plant is also
equipped for canister filling, the production of which started on 8
th
May 2000.

HCCBPL-WADA is also equipped with unique multi mix system whereby the beverage for lines is
prepared in ready syrup room instead of in the bottling hall. This reduces ready syrup losses & increases
concentrate & sugar syrup yields.
Plant Location:
This plant is located 60Kms away from Bhopal, enabling Sales Tax benefits from State Government.
Establishing this massive plant in rural area of Madhya Pradesh has also opened job opportunities in a
rural area of the state furnishing employment opportunities to members of local families.
Address:
Hindustan Coca-Cola Beverages Pvt. Ltd. Plot no. 169 -175,AKVN Industrial Area, Village-
Pillukhedi,Tehsil-Narsinghgarh,Dist.-Rajgarh-465667
Product Range:
CSD : Thums UP, Coca Cola, Limca, Sprite, Fanta
Soda : Kinley Soda
Juice : Maaza, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh
Water : Kinley Water, Kinley Jar (20ltr)




HCCBPL

Departments:
Human Resource Department
Production Department
Quality Assurance Department
Maintenance Department
Finance Department
Stores Department
Shipping Department
Procurement Department
Company Hierarchy:
The company has various departments as mentioned above, which is organized in a definite manner. Its
hierarchy is as follows.
General Manager is the boss of particular plant.
There are separate managers for each department


General
Manager

Plant Manager





HR
Manage
r

Team
Leaders
(Sub
Departmen
t)

Executiv
es

Trainees
& other
staff





Production
Manager

Quality
Manager

Maintenanc
e Manager


Finance
Manage
r
Team
Leaders
(Sub
Departmen
t)

Executiv
es

Trainees
& other
staff


Team
Leaders
Team
Leaders
Team
Leaders


Logistic
Manage
r
Team
Leaders
(Sub
Departmen
t)

Executiv
es
Trainees
& other
staff
(Workers,
Casual
etc.)



Executives

Executives

Executives




Trainees &
Operators
Workers,
Casual etc.

Trainees &
other staff

Trainees &
other
(Workers,
Technical
staff etc.)








HCCBPL


Staff arrangement for production:
Production lines are running in three shifts.
All the lines are led by Team Leaders.
Each shift is supervised by shift Executive of respective lines.
Each machine is operated by operators.
Trainees & casuals are also used in the lines for work.
Documentations at lines:
Every machine of the line has its log book, which is to be filled by concern operator.
Every log book contains detailed information regarding production of particular shift.
It includes:
Shift, Date, Shift Operator, Vent tube size, Flavor, Pack size, Batch No, MRP, First Bottle Out (FBO) time,
Last Bottle Out (LBO) time, Total Counter, Hourly Downtime Report, Time, Hourly Counter Reading,
Reason for Downtime, Remark, Sign: executive, operator.
Every line has shift report book, which is to be filled by respective Executive with reference of log books of
that particular shift.
It includes:
Shift, Date, Shift Executive, Flavor, Pack size, FBO, LBO, Total Production Time, CIP / cleaning time,
Changeover Time, Startup Time, Batch no, ME(Mechanical Efficiency) -run 1, run2, SLE(System Line
Efficiency) - run1, run2, Price, Total Production cases- run1, run2, Downtime report, Time, Cases, ME,
Downtime in minute, Reason for downtime / corrective action.
This report enters in CMMS (Computerized Maintenance Management System).
It is used for the data analysis & to generate the reports in Excel format in anyways i.e. Failure wise,
Machine wise, Line wise, Graphically (Column, Bar, Line, Pie chart etc).

HCCBPL

PROCESS & LAYOUT:
Process Type:Batch
Description:
This is generally used when different types of products are to be produced from same line. In this plant,
various kinds of products are produced by using same line.
Example:
E.g. Products are made on single line one batch after another (called run) for various sizes, flavorsetc.
according to plan. (Batch of Coke 1ltr after batch of 600ml ThumsUp)
Observations & Remark:
Batch types of process are useful & suitable for this kind of beverage industry. It gives flexibility to
production by allowing some time in between for various supporting activities.
Line layout:
Production lines in all bottling plants are typically U shaped. The U shape has been found to be the most
efficient shape for bottling operations. One of the reasons for this is that the input & output of the line &
load full goods from the output of the line without having to travel very far. Another reason for the U shape
is that both the input & output areas of the line can be located in the warehouse where empties & full goods
are stored. U shape is the schematic representation of the package flow. The line itself may have other
curves & turns, but the overall shape is a U shape.
(Though the plant is working on line type of layout, there are broadly divided product types namely: CSD-
Carbonated Soft Drink, Juice, Drinking Water & Post Mix Canisters. All these products have separate
lines.)
MATERIAL HANDELLING EQUIPMENTS:
The beverage industry has various kinds of material handling equipments as the continuous material flow is
there right from the raw material stage to the finished goods stage.
Following are the various material handling equipments used by the plant:
Material type: Raw material
HCCBPL

1) Preforms: Equipment used:
A) Fork Lift: They are easy to use, time saving; bulk work can be done by using these, skilled operator
required to operate forklifts,
B) Preform feeding conveyor belts: Automatic operating of the equipment is there. It enables to proper
handling of preforms.
2) Empty bottles: Equipment used:
A) Air Conveyor: Air conveyors are integrated with line, gives continuous flow to product & time
saving.Bottle gets jammed at some occasions due to various reasons
Material type: Finished Goods
1)Filled Bottles:Equipment used:
A) Bottle Conveyor: These are integrated with line. It gives continuous flow to product.
Safe handling ofbottles is done.
B) Case Conveyor: Carrying cases become easy, less damage to case material
C) Fork Lift: Easy to use in bulk handling, time saving
Material type: Beverage Handling
1) Syrup:Equipment used:
1) Pipes & tanks: Keeps quality & required property, conditions as required.
Material type:Other utility (i.e. water, steam, glycol etc.)
Equipment used:
1) Specified pipes & tanks: Keeps quality & required property, conditions as required.
Observations & Remarks:
All the material handling equipments are giving continuous flow to the process by taking care of less
damage to material keeping its quality values.
HCCBPL

But sometimes in proper operating (in case of fork lift) & technical problems (in case of Air conveyors,
bottle conveyors) may cause damage to material. This is considerable up to some extent.
To overcome this, regular maintenance & proper operating with proper communication is required.
SAFETY:
Government has declared some rules & regulations for the industries, regarding the safety & loss
prevention. These rule & regulations have to be followed by the industries as per given manner. Some of
them are listed below.
Nationally Applicable Important Legislations on Industrial Safety, Loss Prevention & Environmental
Affairs:
Safety, Loss Prevention:
Factories Act 1948-1976-1987 & state Factories Rule:
The Petroleum act 1934
The Petroleum rules 1973
The Indian Explosive act 1884-1981
The gas cylinder rules 1976
The static & mobile pressure vessels (unfired) rules 1981
The explosive Rules 1983
The Indian Boilers Act 1950
The Indian Boilers regulations 1950 & State boiler rules
Motor Vehicle Act
Central Motor vehicle rules 1989
Indian Electricity Act
Observations:
Plant has followed all the above mentioned rules & acts strictly.
Plant & Personal safety:
Every possible care is taken regarding the plant & personal safety without compromising with the stet
standards.
Safety Equipments:
HCCBPL

Fire Extinguishers:
Description:
Water type
CO2 Type
DCP Type for Plant & utility Building
Form type for utility and ABC Type for Admin Building.
Ring Main Fire Hydrant System:
Description: Fire hydrant system is installed around & inside the plant building consisting hydrants having
continuous water pressure (6-7 kg/cm2) maintained by fire pump working on automatic system.
1. Fire detection Alarm & Sprinkler System:
Description: This plant has auto fire detection alarm & sprinkler system for PET preform storage &
blowing area. This system gives fire alarm on sensing the heat. At 69'c, auto sprinkler starts sprinkling
water at affected zones. This water spraying to be made off manually on getting the fire extinguished.
Observations & Remarks:
Plant has taken all possible care of the plant avoiding reasons for the accidents due to many reasons.
However, any such disasters happens, there is full proof rescue system is installed to cope with the problem.
Along with this, a special care has been taken for the materials like preform storage area by giving Fire
detection Alarm & Sprinkler System at the area.
Safety type: Personal Safety
Safety from: causing personal damage
Equipment used:
Safety Goggles : Safety for eyes
Cut resistance Gloves : Safety for hands
Heat resistance Gloves : Avoid direct contact with Hot surface
Chemical resistance Gloves : Avoid direct contact with hazardous chemicals
HCCBPL

Nose Mask : Safety form inhaling unwanted fumes etc.
Safety Shoes : safety for feet
Ear Plug : Noise reduction
Ear Muff : Noise reduction (At high noise area)
Chemical resistance Apron : Avoids direct contact with hazardous chemicals

Remarks:
Along with the overall plant safety, special care has been taken for the safety of employees working at such
places. This is done by providing them all required safety equipments. But not all of the personal safety
equipments are in practice.
This gives safety to both employees as well as helps avoiding quality reduction in material due to handling
& contacting with bare hands etc.

HCCBPL

POLLUTION CONTRL & ENVIRONMENT:
Plant has taken the necessary measures to control the all type of the pollutions i.e. Air, Water & Noise that
may cause due to various plant operations.
Environment management:
Along with the industrial safety, every pant has to follow the environmental rules & regulations as per the
guidance given by the competent authority. They are,
Environment (Protection) Act 1986
Manufacture Storage & import of hazardous Chemicals rules 1989
The water (prevention & control of pollution) Rule 1974 & 1975
The Air (prevention & control of pollution) Act 1981 & 1982
The Water cess act 1977 & 1978
Hazardous wastes rules 1989
Prevention of Food Adulteration Act 1954
Fruit Product order 1955- HCCBPL FPO NO 10355
BUREAU OF INDIAN STANDERDS- HCCBPL WADA CM/NO 7314563
Compensation liability For Safety, Health & Environment
Workmen's Compensation Act 1923
HACCP- HAZARD ANALYSIS CRITICAL CONTROL POINTS
Environmental awareness:
The plant is very conscious about the environmental awareness. Along with the essential things to be done
by the plant as per guided by the government.
The main examples of this are, rain water harvesting system i.e. Lagoon
The Lagoon is especially made for conserve the natural source of water i.e. rain water. The Lagoon is of the
capacity of 57 million liters per year. Along with the conserving water, Tree conservation is also done.
Various kinds of plants are planted all over the campus of the plant.

HCCBPL

QUALITY ASSURANCE (QA) DEPARTMENT
Separate quality department is there for checking the quality parameters of the product produced.
Various type of material is checked at the department, which includes, raw material (preforms), beverage,
finished product (filled bottles) etc.
Following tests are carried out at quality:
Raw material: preforms for material quality check
Weight distribution of blown bottles
Wall thickness of blown bottles & Gate area
Odor & Appearance
Height & Base clearance
Brimful capacity & Net Content
Stress Crack & Drop Test
Gas Volume / Sack distribution
Brix
Package condition
Torque
Rinse Water pressure
Jet Alignment and Pressure
Shelf life test
Taste test
Micro test (per run)
pH testing test
Top load test
Secure seal test
These all tests are done by the Quality Assurance Department. The data analysis of the tests regarding the
Preform loss is done at later part.
STORES:
Plant has separate stores department for the Spare parts & Raw and Product material. Following is the
general information regarding the stores.
Some good warehouse practices:
HCCBPL

FIFO practice to be followed strictly.
1) DOD compliance- 100%
2) Good house keeping
3) Finished goods to be covered 100%
4) Follow stock height norms.
5) Effectively sorting of empties & foreign objects
6) Unwanted materials removed form the empties.
7) Stock keeping unit- SKU
8) Dispatch out Date- DOD
9) Focus stock- 1 week before BBD
10) Clearance stock- After DOD
11) Liquidation stock- 2 week period to BBD
12) Disposal stock-After BBD
Following are some on site general storage requirements given:
a) Any increase in quantity, change in category, handling operations shall be brought to the notice of the
Board & fresh authorization is to be obtained.
b) Hazardous waste may be stored on site for a maximum period of 90 days a maximum quantity of 10000 kgs
or a truck load whichever is less.
c) The hazardous waste shall be stored in closed container (& not on open ground) in an isolated area within
the premises.
d) Each container holding hazardous wastes shall be marked HAZARDOUS WASTES both in English Hindi/
Marathi
e) Storage area should be fenced properly.
f) Safety devices like safety masks, goggles, hand gloves, gumboots and fire fightning systems in working
conditions shall be provided.
g) The container holding the hazardous wastes should be close with lids except when
h) It is necessary to add or remove the wastes.
i) MPCB shall be notified in form-1, on the quantity of waste generated & total accumulated quantity.
j) Container holding ignitable or reactive waste should be stored away from the plant operations area (also the
waste other than ignitable or reactive.
k) Non compatible hazardous wastes & materials should not be mixed in the transportation or storage
container.

HCCBPL

Working:
Stores follow Centralized type of purchasing:
Challan is prepared material invoice COA purchase order inward vehicle report
Unloading of material is done. Quality & Quantity parameters are checked. Damage also checked.
Sampling in quality is done. If it is accepted by quality, then material is released by stores.
FIFO type of system is followed by stores.
Issue slip is given by production department. If material is unused, MRN- Material Return Note is prepared
& Material is returned to stores.
UTILITIES IN PLANT:
Utilities are the important & essential part of any production unit. Following are the utilities used in the
Wada plant.
Electricity:
The Maharashtra State Electricity Board will supply electric power to the plant from the substation at Wada,
which is approximately 14 km away. The power sanctioned from Govt. of Maharashtra is for 3000 KVA.
Water supply:
The main water supply for the plant is sourced from KTB (Kolhapur Type Bandhara) Wada, which is
located approximately 12 kms from the plant. The dam is owned by the government of Maharashtras
irrigation department. The department has given the plant permission to draw water from dam at the rate of
1400-1800 m3/day. HCCBPL Wada built a jack well at the dam & installed a pipeline 12 km long to bring
the water to the plant.
Boiler:
These are Low pressure type of boilers.
They supply Steam to varies equipment of line like Bottle washer, warmer, simple syrup, Pasteurizer, Steam
Tunnel, CIP room etc.



HCCBPL


Water treatment & chemical room:
The plant requires all incoming water to be treated before its use in the preparation of syrup & beverage. A
common treatment procedure includes, 1) Chorine, Lime & Ferrous Sulfate Addition. 2) Coagulation &
Formation of Precipitate. 3) Sedimentation 4) Sand Filtration & Carbon Purification.
Sands can be located outside the building to conserve floor space. However, water used to make beverage
generally has to be cool. If the treated water is stored outside in hot climate, the energy to cool water will be
greater than the energy needed if the treated water is stored in the tanks inside the building. The same would
apply for raw water.
For security reasons, the water treatment area must be an enclosed room secured under lock & key & used
for no other purposes. A clean, dry storage room should be available within the water treatment room for
storing water treatment chemicals. Locating chemicals near where they are used reduce the manpower &
time needed to move the chemicals to the water treatment room.
Air compressor & Ammonia compressor room:
The Air compressor & ammonia compressor room are usually in separate rooms. Compressors generate
heat. Where possible, compressor rooms are on outside walls so that doors can be opened to let excess heat
escape. Proper ventilation should be installed. Access for maintenance should be considered. Occasionally
compressors must be replaces & it should be relatively easy to remove & install them.
Cooling towers & heat exchangers:
Cooling towers are part of the refrigeration system. Refrigeration is needed in several processes, including
cooling simple syrup & beverage necessary for the carbonator. Cooling towers are used to dissipate & are
therefore located outside the roof. The heat exchanger is part of the system used to heat the simple syrup if
treatment is required. The heat exchanger may also be located outside the building to dissipate heat. The
heat is provided from boiler.
Water Treatment Plant : Treatment of Raw water
Effluent Treatment Plant : Treatment of waste water
Bore Wells : Additional Water source

HCCBPL



PROCESSES CARRIED OUT AT PLANT:
Multiple Barrier Treatment System:
Description:
The plant required all incoming water to be treated before it is used in the preparation of syrup & beverage.
A common treatment procedures includes: 1) chlorine, lime & ferrous sulfate additions 2) coagulation &
formation of precipitates 3) sedimentations 4) sand filtration & carbon purification

Tanks can be located outside the building to conserve floor space. However, water used to make beverage
generally has to be cool. If the treated water is stored outside in a hot climate, the energy to cool the water
will be greater than the energy needed if the treated water is stored in tanks inside the building. The same
would apply for raw water. Treated water to be stored must be chlorinated to prevent scaling.
Types of water:
1. Treated water
2. Soft water: chlorinated soft water &Unchlorinated soft water
3. R. O. Water (Reverse Osmosis)
HCCBPL


Steps involve for treated water:
1) Pre filtration
2) Raw water tank
3) Co-agulation
4) Clear well
5) Pressure sand filter
6) Process water tank
7) Dechlorination Activated Carbon Filter
8) Lead Lag activated carbon filter
9) 5 micron filter
10) Ultra violet filter
11) 3 micron filter
12) Treated water send to processing area
Simple syrup room:
Description:
Like the bottling room, the simple syrup room & final syrup room also have a positive air pressure system.
The sizing of syrup equipment is based on plant capacity, but also on the necessity to use the simple quickly
once it is made preferably within 8 hrs of its manufacture. The syrup room also includes CIP Clean-In-
Place system.
Syrup manufacturing:
General Procedure:
Addition of sugar & treated water is done to form simple syrup.
Again treated water is added to form final syrup with the addition of concentrated beverage base.
HCCBPL


Beverage manufacturing:
Following fig shows the general schematic representation of the beverage manufacturing.
It mainly involves the three steps. i.e. Deairation, blending, Carbonation.
Deairation involves removal of air from treated water.
Blending involves addition of syrup to deairated water.
Carbonation involves Addition of CO2 to Syrup.
CIP- Cleaning In Place
Description: A clean in place (CIP) system is the most common way to clean closed system of pipelines, as
well as pieces of equipments.
PRODUCTION DEPARTMENT AT HCCBPL, WADA
There is a production department in the plant which mainly holds the production of the soft drink bottles. It
includes the RGB as well as PET production. Production works along with the stores, Shipping, quality
department.
Production processes at plant:
Following are the lines installed in the plant for the production purpose:

HCCBPL

PET Lines:
1) High Speed PET Line: All type of CSD
2) Gold PET Line: All type of CSD
3) Hot Fill Maaza Line: Maaza, Minute Maid only (Juice)
4) Retail Water Line: Drinking Water only
RGB Lines:
1) Hot Fill Maaza RGB: Maaza only (Juice)
2) RGB CSD-1: All type of CSD
3) RGB CSD-2: All type of CSD
Other lines:
1) Jar water Line: Drinking water only
2) Post Mix Canisters: All type of CSD

The Preform Yield is consider in PET lines only, so following study is only on PET lines.
Following is the information regarding the PET lines.
High speed PET line (HSPET):
Type of product produced: All type of CSD
Pack wise capacity:
Pack size (ml) Capacity ( bpm)
500 / 600 600
1250 / 1500 366
2000 / 2250 267



HCCBPL



Line Layout:



SB02



FILLER

CODING
M/C

WARMER


LABELER


PALLETIZER


STICKER
M/C



VARIOPAC






Air Conveyor

Bottle
Conveyor

Case
Conveyor




Components of line:
1) Blowing Machine (SBO 20): It is used to Blow the Preforms. Total assembly of machine contains some
main parts as Hopper, Feeder, Transmission, Oven, Moulds, Sensors and PLC etc. Process of blowing is
controlled by HMI (Human machine interphase).
2) Filler machine: Filler machine is used for following operations
First Stage: Rinsing with chlorinated water.
Second Stage: Filling of beverage.
HCCBPL

Third Stage: Closure Application.
3) Date coder: Date coder is used for coding the filled bottles.Information printed on it is Date, Time,
Batch no, Price etc. Laser type of coding mechanism is there
4) Warmer: Warmer is used to bring the bottles at normal temp by warming it.
5) Labeler: Labeler is used to label the bottles.
There are 6 Steps of a Quick Changeover:
1) Observe and measure the total changeover time
2) Separate internal and external steps
3) Convert internal to external
4) Reduce the internal steps
5) Improve the external steps
6) Standardize and maintain the new changeover procedure
Conceptual Stages of Changeover Time Reduction:
Preliminary Stage: Internal and External Activities are not separated
Stage 1: Separating internal and external activities

Stage 2: Converting internal to external setup
Stage 3: Streamlining all aspects of the setup operation
Kaizen: KAI + ZEN = KAIZEN
{To change} {Make good / better} {Make it easier by studying it}
Benefits:
To the Customer
Higher quality products
Faster delivery (where they want them, when theyre needed)
To the Employee
Kaizen allows everyone to participate in making our Company successful
It makes everyone feel more valuable as they contribute ideas and changes
HCCBPL

Kaizen develops peoples problem solving and team-building skills
To the System
Kaizen costs LESS than project-based improvements
Kaizen happens continuously, instead of when Project Managers can fit it into their schedules
Kaizen saves LOTS of money, time, and resources
Operational Excellence:
Tools of OE:
Six Sigma
Lean
DMAIC Process
DMADV Process
Eight type of wastage
Root Cause Analysis
1) Six Sigma: Six Sigma is a business improvement methodology that focuses on:
Understanding and managing customer requirements
Aligning key business processes to achieve those requirements
Utilizing rigorous data analysis to minimize variation in those processes
Driving rapid and sustainable improvement to business processes."
2) Lean:
Lean is a relentless focus on reducing time to reduce costs by driving out WASTE.Lean Approaches to Waste Removal &
Flow.
Lean is a team based approach to identifying and eliminating waste (non-value-adding activities) through continuous
improvement by flowing the product at the pull of the customer in pursuit of perfection.
Lean is a manufacturing philosophy that shortens the time line between the customer order and the shipment by
eliminating waste (non-value-adding activities).
Why companies used Lean Process:
a. On-Time delivery
b. Improved response
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c. Reduced inventory
d. Improved quality
e. Improved workflow
f. Culture change
g. Delegation of accountability
h. Better use of plant
i. Better use of skilled labor
j. Job satisfaction
k. Information Flow
Additional benefits
a. Simplified Scheduling
b. Less Transactions
c. Less Variation, More Predictability
d. Forecasts Become More Accurate
e. Quicker Response To Design Changes
f. Quicker Market Response
g. Problems Are Visible
h. Product Team Organization - Eliminates Departmental Conflicts
i. Facilitates Cross Training

3) DMAIC Process:
D : Define
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M : Measure
A : Analyze
I : Improve
C : Control
4) DMADV Process:
D : Define
M : Measure
A : Analyze
D : Design
V : Validate
5) Eight type of wastage:
1) Defects
2) Over Production
3) Waiting
4) Not Embracive change
5) Transportation
6) Inventory
7) Motion
8) Excess Processing
Benefits:
To the Customer
The right product, at the right time, in the right place
To the Employee
Fewer distractions from value-added work
Safer work environment
Enables Standardized Work
Increased pride in work area and work quality
To the KO System
Reduced costs
Improved quality
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Increased flexibility in operations









Root Cause Analysis:
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Why-1
Why-2
Why-3
Why-4
Why-5
Why-6
Why-7
Root Cause
FPR Target date Completion date Status
STATUS Agreed Planned Implemented Effective
WHY - WHY ANALYSIS SHEET Why - Why no:
Format: Ver: Date :
Date of occurence :
Date of why why :
Question Answer
What is the immediate action
taken to correct problem
What is the impact of immediate
action
WHY
Team Leader's Comments : Engg Head's Comments :
Describe Breakdown/
Phenomenon :
Poor Basic Conditions Poor Operating Conditions Deterioration Weak Design Skills
Actions planned/Countermeasures
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Preform Yield Analysis














Improving Preform yield
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Study from 1
st
day of our training
1
st
day :plant visit, working process of both lines PET & RGB(Recycle Glass Bottle )
2
nd
day: study the type of preform & learned how to analysis the yield by analyzing the various counter of
daily beverages run.
3
rd
day : physical analysis of preform godown to examine the information coming from store to production
4
th
day: MRN(material return note)being counted manually in production area and return back to store
5
th
day : check the arrangement of store preform in proper place
6
th
day : analysis how the quality check of preforms.
7
th
day : continued the above mentioned process.





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Pet line : Stage wise detail

Blowing : convert preform into bottle.
Conveyer : moving bottle towards rinser.
Rinser : Rinse the bottles.
Filler &Capper : fill the beverage into the bottle & do bottle
capping.
Date coder : print the manufacture date and time.
Warmer : set the bottle temperature.
Final inspection: to remove the defective filled bottles.
Labeler : stick the label into the bottles.
Manual casing : putting the required no.of bottles into the case.
Carton sealer : seal the cases.








PET Blowing Basics
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Principle : Any hollow shape product is produced by using compressed air is called
blowmoulding
Types :Single stage & two stage .
Single stage : Raw mtl to Blown bottle in single machine . Ex Jars,20/25L water bulk
container.
Two Stage : Raw mtl to Preform in one machine and preform to Bottle in another
machine.Ex All our PET products.


PET BLOWING PROCESS Cont..
Preform temp Should as low as possible to avoid Co2 loss. If preform
process at high temp Gas retention property will be reduced. Hence
preform to be process at 90 degree C to 110 degree C depends upon
size of the container and preform size
Stretch ratio for preform to bottle is 1:3
To avoid excessive Shrinkage of PET bottle , maintain Mould
temperature at 25 to 30 degree C and base mould 10 deg C.

What is perform?
Polyethylene Terephtalates (PET) with medium or eventually high
molecular weight 25 to 50000 are the most used for the production of
bi-axially oriented bottles.
PETG is co-polyester used for the extrusion blow moulding of non
bi-axially oriented bottles.
PBTP, butlenepolyerphtalated is essentially used for the injection
moulding of mechanical parts.
Effect of Temperature on preform
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Gm Color of
preform
Pack size Pack brand specification
52.7gm Green 2.25 ltr. Usages for sprite Wall
Thickness=4.00mm
Len.=144mm
Neck OD
=27.97mm
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52.7gm Clear 2.25 ltr. Usages for
fanta,thumpsup,coke
and limca
Wall
Thickness=4.00mm
Len.=144mm
Neck OD
=27.97mm
37.7gm Green 1.25 ltr. Usages for sprite Wall
Thickness=3.62
mm
Len.=124.5+-mm
Neck OD =27.97m
37.7gm Clear 1.25 ltr Usages for
fanta,thumpsup,coke
and limca
Wall
Thickness=3.62
mm
Len.=124.5+-mm
Neck OD =27.97m

PREFORM Specification
There are many types of Neck available
1.BPF (British Plastic Federation)
2.PCO 28mm(Plastic Closure Only) -1810
3.Alcoa
4.30/25 mm 3 start (water)
5.Short neck 17 mm 1881 Std
Alaska
We are using 28MM PCO 1810 for CSD and 30/25mm 3 start for
Water.
Good material distribution is essential .This can be identify
through Polaris cope.

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Scope of work on Preform
Issue process in stores
Usage on Line
Rejected Preform Management
Good Preform Storage at Shop-floor
Return Process in stores

Production plan from (6
TH
MAY TO 12
TH
MAY)
SKU(stock keeping unit) PLAN
SPRITE 1.25 LTR 10600
FANTA 1.25 LTR 7300
THUMPSUP 1.25 LTR 5000
SPRITE 2.25 LTR 10000
FANTA 2.25 LTR 10000
THUMPSUP 2.25 LTR 7000
LIMCA 2.25 LTR 5000
SPRITE 1.25 LTR 10000


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SPARE PARTS MANAGEMENT

INTRODUCTION
Spare parts Management plays an important rolein achieving the desired plant
availability at an optimum cost. Presently, the industries are going for capital
intensive, mass production oriented and sophisticated technology. The downtime for
such plant and machinery is prohibitively expensive. It has been observed in
many industries that the non-availability of spare parts, as and when required for
repairs, contributes to as much as 50% of the total down time. Also, the cost of
spare parts is more than 50% of the total maintenance cost in the industry. It is a
paradox to note that the maintenance department is complaining of the
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non-availability of the spare parts to meet their requirement and finance department
is facing the problem of increasing locked up capital in spare parts inventory. This
amply signifies the vital importance of spare parts management in any
Organisation.
The unique problems faced by the organisation in controlling/managing the
spare parts are as follows.Firstly, there is an element of uncertainty as to when a
part is required and also the quantity of its requirement. This is due to the fact that
the failure of a component, either due to wearing out or due to other reasons, can not
be predicted accurately. Secondly, spare parts are not that easily available in the
market as they are not fast moving items. The original equipment manufacturer has to
supply the spares in most of the cases. New models are introduced to incorporate the
design improvements and old models are phased out. Hence the spares for old
models are not readily available. Particularly, this is more so in case of imported
equipment as the design changes are taking place faster in the developed countries.
Thirdly, the number and variety of spare parts are too large making the close
control more and more tedious. For instance,the number of items of spares in a
medium scale engineering industry may be around 15,000 and that in a large scale

chemical industry may be around 100,000. Fourthly, there is a tendency from the
stage of purchase of the equipment to the stage of the use of the spare parts, to
requisition spare parts more number than that are actually required and accumulation
of spares takes place. Finally, the rate of consumption of spare parts for some are
very high and for some are very low. These problems are to be faced by systematic
spare parts management.
The objective of spare parts management is to ensure the availability of spares for
maintenance and repairs of the plant and machinery as and when required at an
optimum cost.
Also, the spares should be of right quality. There are many actions required to
ensure the spare parts management effective.
There is a need for systematic actions while managing spare parts as given below:
a. Identification of spare parts
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b. Forecasting of spare parts requirement
c. Inventory analyses
d. Formulation of selective control policies for
various categories
e. Development of inventory control systems
f. Stocking policies for capital & insurance spares
g. Stocking policies for rotable spares or sub-
assemblies
h. Replacement policies for spare parts
i. Spare parts inspection
j. Indigenisation of spares
k. Reconditioning of spare parts
l. Establishment of spare parts bank
m. Computer applications for spare parts management.
Every organisation should proceed systematically and establish an effective
spare parts management system. Codification helps the organisation minimizing

duplication of spare parts stocking thereby reducing inventory, aids the accounting
process and facilitates the computerisation of spare parts control systems. The
inventory analyses carried out on the basis of different characteristics of the spare
parts, such as annual consumption value, criticality, lead time, unit cost and the
frequency of use, help the company inestablishing suitable policies for selective
control. This also helps in focusing our efforts on real problem areas.
A good inventory control system will helpsystemizing the ordering procedure and
also achieving an optimum level of inventory. In addition, selectively efforts
should be made to evolve optimum replacement policies for selected spare parts,
for which cost of down time and cost of replacement are very high. So, we have to
identify such spare parts and carry outthe exercise for evolving optimum
replacement policies.
For the spare parts which are very expensive and those which are to be imported, it is
essential that the useful life for such sparesis extended by appropriate applications
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of reconditioning and repair techniques. Also, efforts should be made to indigenise
the spare parts in view of the hard-to-get foreign exchange involvement. Also, for
similar industries establishing of spare parts bank goes a long way in reducing the
total inventory holding of the expensive spare parts and also reduces the stock
holding cost. For different industries, it willbehelpful to establish spare parts banks
and a suitable information system for the exchange of spares. Lately, the
application of computers for the processing of spare parts information and operating
an effective spare parts control system will be very helpful for the organisation and
maintenance engineering and management
will ensure timely actions for an efficient and effective spare parts management.






IDENTIFICATION OF SPARE PARTS
When a spare part is required to put back inoperationan equipment which is
under breakdown, it becomes necessary to identify the part for getting the same
issued from the store or for purchasing the same from the vendor. While
identifying it becomes essential to give the complete description including the
size and type of the spare to draw from the stores and it becomes essential for all
concernedie., the maintenance personnel and stores personnel are aware of such
description. If it is the vendor, he may not be satisfied with the description and he
may also require the manufacturer's part number.
It is a cumbersome and time consuming taskduring every transaction to identify a
spare part by its description and manufacturer's part number accompanied by
the parent equipment's name, make and model designation. Therefore, it is
essential to give a numerical name or code to each spare part. This process of
giving code to each spare part is called codification. Since, the range of spares used in
anyorganisation is too large and there are quite a few spares meant for specific
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equipment, it is always preferred to use codes which are significant ie., from the code
number one will be able to find out
- the equipment type, make & model
- the type/class of the spare-part
- the size (in some cases)
If the spare part code is to incorporate the equipment type etc., then the codification
of equipment becomes a prerequisite for spare part codification.
The number of digits required for spare part codedepends on the actual requirement
ie., the range of equipment in use and the types and number of spare parts in the
organisation. It is very common to come across 9 to 16 digit codes for spare parts.
For instance, a 10-digit code may signify,
1st digit - imported or indigenous
2nd, 3rd & 4th digits - machine type, make & model
5th, 6th & 7th digits - spare-part class

8th, 9th & 10th digits - size or serial number.
By classifying and codifying all the spare parts, it becomes easy to minimize the
duplication of spare parts thereby effecting reduction in the inventory.
Codification also helps easy accounting and computerisation in addition to easier
communication between concerned parties.
In addition to codifying the spare part, it will be of immense benefit to codify the
location of spare parts. Stock location number helps the stores personnel to locate
the part and issue the same as and when the same is requisitioned. Also the
stock verification and upkeep programme becomes less and less cumbersome.
After codifying the spare parts and assigning stock location numbers, all the users
maintenance engineering and management
should be made aware of and should be supplied with the relevant codes and stock
location numbers in the form of a spare parts catalogue.
The spare parts catalogue should contain the following information:
Spare parts codification plan
Spare part code
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Spare part description
Drawing number
Manufacturer's code & part number
Stock location number.
The spare parts catalogue may be produced in sufficient copies so as to make
available for all the users such as the maintenance personnel, stores personnel and
purchase personnel. This is a very important aspect often neglected in the organisation.
The next step in identification of spare parts is to put an identification tag or mark
with the code to enable the stores personnel identify during the time of issue. If
sufficient care is not taken to incorporate the code, a lot of time is spent in locating
the part and that time is actually added tothe down-time which is really very
expensive in case of vital spare parts. There are a variety of stickers which are
scratch-proof, water-proof and temperature-proof available in the market. Efforts
should be made by the organisations to make use of such identification tags and
it will go a long way in reducing the downtime.
INVENTORY ANALYSIS AND SELECTIVE CONTROL
For the successful spare parts management, it is essential to analyze the spare parts
inventory based on various characteristics such as the frequency of issues, the
annual consumption value, the criticality, the lead time and the unit price. This is
essential as it would not be possible to exercise the same type of control for all items
and it may not really be effective. Inventory analysis aids selection of policies for
selective control.
Commonly used inventory analyses are:
(1) FSN Analysis
(2) ABC Analysis
(3) VED Analysis
(4) SDE Analysis
(5) HML Analysis
FSN Analysis:
Classification based on Frequency of Issues/Use:-
F, S & N stand for Fast moving, Slow moving and Non moving items. This form
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of classification identifies the items frequently issued, less frequently issued for
use and the items which are not issued for longer period, say, 2 years. For instance,
the items can be classified as follows:
Fast Moving (F) = Items that are frequently issued say
more than once a month.

maintenance engineering and management
Slow Moving (S) = Items that are issued less than once a month.
Non-Moving (N) = Items that are not issued\used for more than 2 years.
This classification helps spare parts management in establishing most suitable stores
layout by locating all the fast moving itemsnear the dispensing window to reduce the
handling efforts. Also, attention of the management is focused on the Non-Moving
items to enable decision as to whether theyare required in the future or they can
be salvaged. Experience shows that many industries which are more than 15 years
old have more than 50% of the stock as non-moving spares.
Even if a few of them are disposed off and the locked up capital is made available, it
will make available additional working capital to the organisation. Action for disposal
should be taken based on the value of each item of spare.
SDE Analysis:-
Classification based on the lead time:
This classification is carried out based on the lead time required to procure the
spare part. The classification is as follows:
Scarce (S) : Items which are imported and those items
which require more than 6 months' lead
time.
Difficult (D) : Items which require more than a fortnight
but less than 6 months' lead time.
Easily
available (E) : Items which are easily available ie., less
than a fortnights' lead time.
This classification helps in reducing the leadtime required at least in case of vital
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items. Ultimately, this will reduce stock-outcosts in case of stock-outs. A
comprehensive analysis may ultimately bring down lead time for more & more
number of items. This will also result in streamlining the purchase and receiving
systems and procedures.
VED Analysis:-
Classification Based On Criticality:
Several factors contribute to the criticality of a spare part. If a spare is for a
machine on which many other processes depend, it could be of very vital
importance. Also if a spare is, say, an imported component for which procurement
lead time could be very high its non- availability may mean a heavy loss.
Similarly spares required for fighter aircraft at the time of war could be of great

value in terms of fighting capability. In general, criticality of a spare part can be
determined from the production downtime loss, due to spare being not available
when required.
Based on criticality, spare parts are conventionally classified into three classes,
viz. vital, essential and desirable.
maintenance engineering and management
VITAL (V) : A spare part will be termed vital, if on account of its
non-availability there will be very high loss due to production downtime and/or a very
high cost will be involved if the part is procured on emergency basis. In a process
industry, most spare parts for the bottleneck machine or process will be of vital
nature.For example, bearings for a kiln in a cement plant will be considered vital.
ESSENTIAL (E) : A spare part will be considered essential if, due to its
non-availability, moderate loss is incurred. For example, bearings for motors of
auxiliary pumps will be classified as essential.
DESIRABLE (D) : A spare part will be desirable if the production loss is not
very significant due to its non-availability. Most of the parts will fall under this
category. For example, gaskets for piping connection.
The VED analysis helps in focusing the attention of the management on vital items
and ensuring their availability by frequent review and reporting. Thus, the downtime
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losses could be minimized to a considerable extent.
ABC Analysis:-
Classification Based on Consumption:
Another method of classifying spares is on the basis of annual consumption
value. As it is true for any inventory situation, Pareto's principle can be applied to
classify maintenance spares based on consumption value.
Pareto principle :The significant items in a given group normally constitute a small
portion of the total items in a group and the majority of the items inthe total will, in
aggregate, be of minor significance.
This way of classification is known as ABC classification.

CLASS A: 10% of total spares contributing towards 70% of
total consumption value.
CLASS B: 20% of total spares which account for about 20% of
total consumption value.
CLASS C: 70% of total spares which account for only 10% of
total consumption value.
In a specific spares control system, it is quite possible that in a single year, many
spares would not have been consumed at all. In such cases, it is better to perform
ABC analysis on longer consumption period data, say 3 years. Then only spares
will not be left out in this classification.
Policy for 'A' items
* Maximum control
* Value Analysis
* More than one supplier
* Control by top executives.
Policy for 'B' items

maintenance engineering and management
* Minimum control
* Bulk Orders
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* More items from same supplier.
HML Analysis:-
Classification based on unit price:
This classification is as follows:
High Cost (H) : Item whose unit value is very high,
say, Rs.1000/- and above.
Medium Cost (M) : Item whose unit value is of medium value,
say, above Rs.100/- but less than Rs.1000/-.
Low Cost (L) : Item whose unit value is low,

say, less than Rs.100/-.
This type of analysis helps in exercising control at the shop floor level ie, at the use
point. Proper authorisation should be there for replacing a high value spare. Efforts
may be necessary to find out the means for prolonging the life of high value parts
through reconditioning and repair. Also, it may be worthwhile to apply the techniques
of value analysis to find out a less expensive substitute.
Some other Classifications based on other characteristics:
A) Capital Spares:
These are vital spares for critical equipment. The stock-out cost for such spares is very
high and the unit cost also is very high. The number of items consumed during the
life time of the equipment may be 1 or 2 or 3. Hence, the decision has to be
made as to the number of items to be stored.
B) Insurance Spares:
An insurance items is a spare part that will be used to replace a failed identical part
in an operating equipment whose penalty cost for downtime is very high. Hence,
by definition, it is an insurance against such failures for which the down time costs
are very high. They do not become obsolete until the parent equipment is retired from
service no matter if they do not move for many years.
C) Overhaul spares:
Spare parts which must be replaced every time the equipment is dissembled and
re-assembled.
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D) Wear and Tear Spares:
Spare parts which have regular wear and tear in the course of operation of the
equipment and need to be replaced after definite number of hours of equipment
operation.

maintenance engineering and management
E) Consumable spares:
These are regularly used items such as fasteners, seals, bearings,etc. These are to be

stored by the materials department.
INVENTORY CONTROL SYSTEMS

Introduction:
To ensure smooth functioning it is essential to develop a suitable inventory control by
which optimization of spare parts cost isachieved in a systematic way. As regards
the fast moving and slow moving items are concerned, the following procedure
can be followed taking into consideration various cost elements.
While managing the spare-parts inventory, basically there are four cost elements to
be considered:-
1. Cost of the spare part
2. Cost of ordering
3. Cost of storage
4. Cost of stock-out.
The cost of storage includes
1. Rent for the stores
2. Depreciation on storage and handling facilities
3. Handling charges
4. Salaries of stores staff and clerks
5. Taxes
6. Insurance
7. Costs of stationery etc.
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The cost of ordering includes:
1. Rent for purchase department
2. Depreciation for Office facilities
3. Salaries
4. Postage & Telephone expenses
5. Stationery expenses
6. Travel expenses
7. Incoming Inspection
8. Entertainment & Misc. expenses.

Concept of Economic Order Quantity
For ideal conditions there should be no stocks at all. Every item should arrive just
before it is required in right quantity.This however is not practical for two reasons.
Firstly, the supplies & requirements are not so certain and, secondly, the costs of
placing orders and follow-up work will shootup very high, if ordering in such small
batches is resorted to. So, for a particular annual consumption as we go on increasing
the quantity of order, the average stock increases and, hence, carrying charges go on
increasing. Thus, the total cost of ordering and inventory carrying will vary as shown
in the graph in Figure 4-1.

maintenance engineering and management
While the ordering quantity is varied it may beseen from the graph that at a particular
ordering quantity, the total costwill be the lowest and that ordering quantity is
called Economic Ordering Quantity (E.O.Q).
Figure 4-1.
It may be established mathematically that
2 AS
Expressed Mathematically, E.O.Q = --------
i C
Where A = Annual consumption of items in Units
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S = Cost per order in Rupees
i = Carrying charges per year expressed as fraction
C = Unit price
E.O.Q = Economic Order Quantity in Units.
Now if we consider an over-simplified procurement and consumption cycle for
an item having a steady consumption all through the year and which is available
instantaneously on placing an order (without fail), the procurement and
consumption cycle can be shown as given in Figure 4-2.
Figure 4-2.
At time 'A' the stock is zero is and hence anorder will be placed and (the delivery

maintenance engineering and management
being instantaneous) the stock will be brought up to a level 'Q'. The item will be
steadily issued upto a time 'B' and another order will be placed at 'B' to bring up the
stock to Q and so on. The average inventory in this model will be Q/2. Also the
delivery of each order is instantaneous.
The computation of safety stock is done as follows:
If the fluctuation in lead time is predominant, then the safety stock can be computed
by the following formula.
Safety stock = (Maximum Lead Time - Normal Lead Time) x
Normal Consumption rate
If the fluctuation in consumption rate is predominant, then the safety stock can be
calculated by using the following formula.
Safety Stock = K x D
where K is a factor chosen on the basis of the assurance level required for
protecting the item for stock out and D is the average consumption during lead time.
For various assurance levels, the values of K are as given below:
Assurance level (%) 50 75 80 85 90 98 99 99.9
Value of K0 0.7 0.8 1.0 1.3 2.1 2.3 3.3
The following K-values are suggested for each item on the basis of ABC & VED
classification.
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K Values
V E D
A 2 1 0.5
B 2.5 2 1
C 3 2.5 2

In a practical situation, the consumption over a period fluctuates. Having fixed up
the ordering quantity based on EOQ system, the order has to be placed while the stock
level is equal to the sum of average lead time consumption and safety stock.
Example:
The data regarding a particular type of bearing is given below
:
Annual consumption = 120 Nos.
Unit price = Rs. 100
Inventory carrying cost (variable) = 0.20
Ordering Cost (variable) = Rs.30
The suggested value of K is 2. The normal leadtime is 2 months. If it is decided to
follow EOQ system of inventory control, what will be the parameters for operating

maintenance engineering and management
thesystem.The supplier will be supplying the bearing packs of 12 Nos.
Solution:-2 A S
EOQ =--------
i C
2 x 120 x 30
=--------------- = 19
0.20 x 100
The ordering quantity could be either 12 or 24. This will be based on the estimated
total costs for both cases.
If ordering quantity is 12,
then Total Cost = 12/2 x 100 x 0.20 + 120/12 x 30
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= 420/-
If the ordering quantity is 24
Total cost = 24/2 x 100 x 0.20 + 120/24 x 30 = Rs. 390/-
Hence, the Ordering Quantity of24 Nos. is recommended.

Safety Stock = K XD = 2 x ( 2/12) x 120) = 10 Nos.
Reorder level = Safety Stock + Lead Time Consumption
= 10 + 20 = 30 Nos.
The average inventory in this system will be
= Safety stock + Ordering Quantity/2
ie = 10 + 24/2 = 22 Nos.
Periodic Review System:
In the EOQ system, we have to place the order as and when the stock level reaches
the reorder level. That means that a continuous watch on the stock level is required
and there will be orders released almost daily as there are large number of items.
The possibility of combining more number of items in the same order for a supplier
is very much reduced. Periodic Review system aims at eliminating such
disadvantages. In this system, the stock level of all or a group ofitems are reviewed
periodically. The review period and the replenishment level are fixed and order is
placed while the stock level is less than the replenishment level. Ordering quantity is
equal to replenishment level minus stock level.
Replenishment level = Safety stock + Consumption Rate x (Review period
+ Lead Time).
When stock level is reviewed periodically, the safety stock also should take into
consideration the fluctuation in consumption during the review period.
Various other parameters for periodic review systems are as follows:
(1) Review period
(2) Replenishment level
(3) Safety stock
Review period is based on the ordering quantity as recommended for EOQ

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maintenance engineering and management
system. ie., the duration for which the quantity can last. In the earlier example an
ordering quantity of 24 Nos. bearings was recommended and the same can last for 10

weeks. Hence, the review period recommended will be 10 weeks. As the review
period thus arrived may vary from item to item, review period should be suitably
chosen for a group of items which is near optimal.
The safety stock may be computed as follows:
Safety Stock = K x Consumption during lead time and review period (if
fluctuation in consumption rate is predominant).
As the number of items could be many and their annual consumption value may
range widely, it may be necessary in many occasions to have different groups with
different review periods. For instance, for A items review period may be one week, for
B items review period may be four weeks and for C items the review period may be
12 weeks.This may result in near optimum results.
















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Method Followed By Company
spares management
Gate checking
Entry in register and check seal
Material enter to the stores
Paper checking of spares parts material(
Check GRN po no.(purchase order no.)
Add material on cola net.
Then issued spares.
Prepare Voucher.
After issued spare parts minus from colanet.











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2179809 3393974 7231776.1
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Todays cost
involve in
store for
spares






7231776.1

Excess stock 2179808.6


Removing of
excess stock
5051967.5


Under stock
ordered
3393973.8


After project
cost involve
in store for
spares
8445941.3




Saving in
spare
management
-1214165













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CONCLUSION
Spare parts management will be very successful ifthe system is computerised and integrated
with other systems. Computerisation will bring in all round improvement by streamlinining
the process as well as reducing the total cost of stock holding, ordering and stock-out costs.