varun plastics - an operations case study

8/8/2019 Varun Plastics - An Operations Case Study

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Prepared By

Group I2


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# Varun plastics make PVC pipes of nine different sizes by

following same manufacturing process and facility.

# But the pipes which have most demand and hence

produced more are pipes having diameter 1 inch, 2 inchand 2.5 inches.

# Same machinery, facility and input is used for

manufacturing pipes of different sizes, they only change

the die size for pipes of different diameters.


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) The plant covers an area of 120 ft by 45 ft and is divided into many

sections. About one third of the space is meant for machines and two

third is meant for storage and other purposes.5


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) Administrative Office :

Forecasting, scheduling of machines, ordering and procurement of rawmaterials and delivery to the customers.

) Stabilizer Unit :

Its basically a huge mixing

machine.

Raw materials (PVC rasin andstablizer) in the form ofpowder are poured ration of4:1.

They are mixed for 10-15minutes and the resultantmaterial is used as the rawmaterial for the extrusionprocess.


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) Pipe Extrusion Machine :

The mixture is grounded into the

extrusion machine and resultant pasteis molded into pipes under very high

temperature.

The hot pipes are then passed throughthe two coolers to reduce itstemperature in stages, so that it gets

hardened and set.

When the hard pipes touch the end part

of the machine, it gets diced offautomatically (using a switch and saw)

thus regulating the length of all the

pipes at a uniform level.


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) Coupling Section :

The finished pipes are heated at the openings to make it soft and then are forced

on the die to make the edges bell shaped.

This is in accordance with the requirements of the dealers and customers, for

the various usage purposes.

) Weighing Machine : Each pipe is weighed to ensure the quality and meet the specifications of

customer.

) Cutting area :

Used to cut some of the pipes into smaller pieces to be used as hinges and

joints.

) Finished Goods Stock :

Area within and outside the manufacturing factory. No fear of rusting.


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Molding Cooling


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) Generator Unit : kept in an isolated sound proof room so that the noise generated doesnt

affect the regular production process.

A 125 kw diesel generator is used for alternate power supply in the plant.

Using power from generator costs 1.5 times the normal electricity chargesand is usually used for 150-250 hrs per month.

) Quality testing lab :

Quality testing lab consists of various equipments for testing the pipes ondifferent parameters.

One pipe from each lot (once in an hour) is selected randomly to test onall the parameters specified under government standards.


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Quality Testing Lab Finished Good inventory


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X The high quality product at competitive price and good relationship

with suppliers are the reason of success of Varun plastic in this highlyfragmented and fiercely competitive market.

X According to the owner of Varun plastics the total market size of PVCpipes in Karnataka is 5000 tons per week.

X This is highly fragmented market dominated by many players. Earlier

there were 12 competitors but now only eight have remained.

X The sales of Varun plastic per year hover around 500-550 metric ton.

The break even production is around 400 metric ton.

X Sales are around 3 crores and profit margin around 2-3 % each yeargiving PAT approximately 9 lakhs.


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Forecasting :

The sales data from the past year is used to do the sales forecasting.

They have maintained the data for sales of last ten years.

Also based on the past sales data, demand from the suppliers and some

personal experience is used to determine which kind of pipes will be in

more demand in coming year.

Those kinds of pipe are produced in abundance. The demand is not uniform throughout the year.

The 70 % of the demand comes in four months from December to Marcheach year.

They use the lean period to manufacture and stock the products so asto meet the demand of peak period.

During peak season they work for 7 days a week , but in lean season

work 6 days a week.

Since PVC pipes are rust free, they are stored in open area throughout

the year.


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Highly quality conscious : ISO 9001:2000 certification.

Lab test within the plant :Cost of quality .

The total cost of the lab is around 3.5 lakhs.

Quality check within half an hour whenever new production starts.

Regular check every one hour.

If any product fails the quality test, the entire batch of that productis discarded.

On an average 5-6 % of total production is discarded each year. Thisdiscarded material is not reused but sold to others on 15-16% oforiginal rate.


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Maintenance :

Every year during month, of July plant is closed for three weeks formaintainace work.

All equipments are dismantled and each part is looked for any wearand tear and then appropriately repaired or replaced. This is done to

avoid any breakdown during production periods.

All electric wiring and other building infrastructure is also checked

thoroughly.

All repair work is done by in-house workers.


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The problem area is the stabilizer.

Reason for problems is the exact composition of stabilizer is notfixed.

It depends upon manufacturer to manufacture.

Earlier Varun Plastics used to manufacture in house stabilizer by

purchasing the different components of stabilizer and then

mixing them.

But now they have buy is from outside vendor.

This has improved the quality and decreased the failure rate but

the products still fail quality tests.


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THANK YOU

varun plastics - an operations case study

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