OPM PROJECT

Term -II
August 2009

Amit Jain
Roll No. 04
EPGDM 4
Globsyn Business School
OPM PROJECT
Term II

1. PRODUCT

 Paper Manufacturing Plant with an Annual Capacity to

manufacture 1,00,000 MTPA of Writing and Printing Paper (WPP)

Indian Industry Outlook

 India is not just the second most populous market for paper in the world. It is
also the most demanding.

 Indian paper industry not only serves a public utility but fulfils a critical
national requirement. It possesses an annual
production capacity of five million tonnes. It
generates an annual turnover of approximately
120 billion. It directly and indirectly employs
nearly 1.3 million people.

Future Outlook

 Indian paper industry is likely to witness a demand growth of 6-7% without a

commensurate increase in supply. The paper price is expected to remain firm
over the next few years and linkage with the overseas market is likely to
increase.

Some of the Major Manufacturer of Paper

 Balrampur Industries Limited

 Orient Paper Mills Ltd.

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 J K Paper

 ITC Ltd.

2. PROCESS STEPS

PROCESS FLOW CHART

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BRIEF PROCESS

• Chipping…

Bamboo or Wood as such cannot be used for pulping. For economical operation of
pulping plant as well as for better penetration of cooking liquor, wood
logs/bamboo are to be chipped into small pieces. The process is called chipping and
the equipment used for chipping are called chippers.

• Pulping…

Pulp is obtained by removing lignin and other impurities from the wood & other
raw materials chips through a cooking process. The chips are loaded into a digester
and cooking liquor is added. Then by pressure cooking, the wood, bamboo or other
raw material fibres are separated from unwanted ingredients. Either batch digester
or continuous digesters are used in cooking.

• Bleaching…
Although cellulose fibre is white in colour, due to residual lignin traces
remaining on the fibres, the pulp appears creamish. Therefore, to manufacture
white paper we need to remove yellowness without physically or chemically
damaging the fibre, with improvement in various properties. To increase
brightness of the pulp by removal or modification of some of the unwanted
elements in the unbleached pulp. These deleterious elements are lignin traces,
resins, metal ions, non-cellulosic carbohydrates etc. Bleaching for brightness
improvement should also help to keep the pulp stable without turning yellow
or lose strength or reduce brilliance - due to aging.

• Additives...
Additives are added to paper pulp. Addition of fillers like talcum & calcium
carbonate is very common & besides acting as fillers they add brightness to the
paper. These additives must be finely ground. Additives like dyes & starch are
also added. Other fillers are Titanium Dioxide, Barium Sulphate & Zinc
Sulphide

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• Removing Water...

Removing water is the next important stage. For this the pulp is passed
through a rapidly moving wire mesh called fourdriner. The objective is to
remove 93% to 95% of the water in the finished paper.

As the paper flows along the wire mesh and water is drained along the way, a
dandy roller near the end helps to smooth out the paper. The dandy roller
improves the formation of the paper web by application of pressure. When the
paper reaches the end of the wire mesh it is transferred to a felt blanket which
conveys it through many steam heated driers to remove the excess moisture.
In the process the paper gets some glaze like coating also. Then it is made to
pass through a series of calender stacks. The calenders are series of polished
iron rollers stacked one on top of the other, through which the finished paper
will pass to smoothen down. The next step is rewinding on a metal or fibre
core. The last stages after this are sheeting, packing & testing

3. LOCATION

Preferred location for the Paper Manufacturing Plant to manufacture Writing and
Printing Paper will be nearby area of Nagpur District, Maharastra. Following are the
Location Advantages:

 Civic facilities: The plant site will be near to Nagpur City. All necessary civil
amenities (e.g. educational institution, college, school, hospital etc) are available.

 Transport: Nagpur – Bhopal National Highway in Vidarbha Region of

Maharashtra. Nagpur is centrally located and conveniently connected by Road
and rail to all major big cities and towns, where goods can be transported
economically. Inland Container Depot (ICD) at Ajni, Nagpur through which
imports of input like imported waste paper takes place.

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 Manpower: Skilled labour is available in and around Nagpur City. There are 6
Engineering colleges and many Technical Institutions running at Nagpur City.
Also there are 8-10 paper mills situated in and around Nagpur City

 Water: The requisite required of the fresh water to meet process make up will be
made available from nearest Kolar River.

 Raw Material: The location offers advantages to the company in terms of

proximity of raw material sources. The company uses waste paper as raw
material to produce newsprint & Kraft Paper. For producing pulp from the
deinking plant, waste paper is sourced from domestic and international market.

State Incentives

It is a notified “D+” Area by government of Maharashtra. Since the plant is located in

notified “D+” area, the mill has been granted incentives as notified in Package scheme of
Incentive 1993 by Government of Maharashtra. The advantages in brief are as under.

Sales Tax Exemption: The unit is entitled to exemption from payment of sales tax for 15
years subject to maximum of 125% of fixed assets value. The exemption is from the
payment of purchase tax and additional tax on purchase of raw material, sales tax and
turnover tax and on its sale of finished goods, central sales tax on such sales which takes
place in course of inter state sale. The unit has opted for above-mentioned sales tax
incentives available by way of Deferral of sales tax liability. The said incentives are also
available under the VAT regime.

Octroi / Entry Tax Exemption: The Unit is entitled to refund of Octroi duty/ entry tax
subject to maximum of 100% of fixed capital investment, payable / paid on import of all
items.

Electrical Duty: The unit is entitled for refund of electricity duty. The unit is exempt
from payment of T & D losses charged by the MSEB from its consumers.

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4. LAYOUT PLANNING

Lay out Planning includes following:

 Administrative Building: For day to day maintain and control.

 Accommodation Building: A building for administrative and factory workers.
 Guest House & Club: A Guest House for the visitors.
 Canteen & Refreshment: A Canteen to provide quality of food to workers.
 Laboratory: A well maintained Laboratory for the workers.
 Emergency Medical Centre: For the operating and maintenance personnel.
 Raw Material Storage Area: Raw Material storage Area with required capacity.
 Water Storage: To keep water to meet up process.
 In-house Road: For the mobility of material within the plant area.

 Repair and Maintenance Centre: For repairs and maintenance.

 Chipping Area: Area for the chipping process.

 Pulping Area: Area for the pulping process.

 Bleaching Area: Area for the bleaching process.
 Additives Area: Area for the additives process.
 Quality Control Check Room: Area for the assessment of the quality & Control.
 Packaging Room: Area for packaging for dispatch.
 Product Stock Area: For the storage of the final product with required capacity.
 Product Dispatch Place: Area for dispatching final product after packaging.
 Parking Space: Parking Space for day to day visitors and Trucks.

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PLANT LAYOUT

5. CAPACITY PLANNING

1st Year 2nd Year 3rd Year

Annual Installed Capacity (in MT) 100000 100000 100000
Maximum Utilization 70% 80% 90%
Total Production 70000 80000 90000
Stock for one Month 5833 6667 7500
Available for Sale 64167 73333 82500

• Stock of Raw Material will be kept advance at Raw Material Storage Area
matching to the one month production capacity.

• Water Storage area need to be maintained as the paper process requires a huge
quantity of water. Proper tie-ups with local municipality will be required.

• Further substantial quantity of finished product is also sold locally as Nagpur is

a big market having number of large industrial consumers.

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6. PRODUCTION & OPERATION PLANNING

Annual Raw Material and Consumables Requirement

Raw Material Annual Requirement in MT

- Indigenous Raw Material (0.56) 560000
- Imported Raw Material (0.56) 560000
Chemicals
- Deinking Chemical 15000
- Hypo Bleaching Chemicals 12000
- Sizing Chemicals 10000
- ETP Chemicals 6000
- Others 10000

Annual requirement includes waste of raw materials

Actions Required to increase Productivity

• Need to Maintain Maximum Utilization of the Annual Capacity

• Need to use Quality of Raw materials

• Need to maintain good working environment

• Need to use latest Technology prevailing in the market

• Need to provide Incentives, bonus etc to the workers and labour and maintain
healthy relationship with them..

7. QUALITY REQUIREMENT

Following are the major quality requirements in the process of manufacturing

paper products:

• Working with Applications Research/R&D to scale-up new product

• Process developments at Contract Manufacturing Operations (this may include

assistance during R&D trials, product testing, evaluation of new/current facility
capabilities).

• Experience people with paper manufacturing would be beneficial.

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• Will take product inspection to final shipment inspection and controlling quality
in production house and outside.

8. QUALITY ASSURANCE AND QUALITY CONTROL PLAN

• Providing assistance to the contract operations facility during production

campaigns to resolve short-term issues and improve understanding of key
principles effecting operations.

• Working with Quality Engineers to ensure Quality systems and Best practices are
documented appropriately.

• Demonstrated ability to understand QUALITY CONTROL

manufacturing processes and best
practices required to support operations.
• Ability to self-manage and network with
other area/site/corporate resources.
Actively seeks ways of improving current
methods, systems, and processes to
provide customer satisfaction.
• Demonstrated ability to use Lotus Notes
and Microsoft Office Products.
• Audit vendor and factory Quality Control
Manufacturing and quality control
are used in developing systems to
ensure products or services are
designed and produced to meet or
exceed customer requirements.
Quality control is the branch of
engineering and manufacturing
which deals with assurance and
failure testing in design and
production of products or services,
to meet or exceed customer
requirements.

processes to ensure correct compliance.

QUALITY ASSURANCE
• A valuable process to perform on a whole
consumer product is failure testing (also Quality assurance, or QA for short,
known as stress testing), the operation of a refers to planned and systematic
product until it fails, often under stresses such as increasing vibration,
temperature and humidity. This exposes many unanticipated weaknesses in a
product, and the data is used to drive engineering and manufacturing process
improvements.

• The company-wide quality approach places an emphasis on three aspects :-

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 Elements such as controls, job management, defined and well managed

processes, performance and integrity criteria and identification of records

 Competence such as knowledge, skills, experience, qualifications

 Soft elements, such as personnel integrity, confidence, organizational

culture, motivation, team spirit and quality relationships.

Under traditional quality control, inspection of products and services (checking to make
sure that what's being produced is meeting the required standard) takes place during
and at the end of the operations process. There are three main points during the
production process when inspection is performed:

 When raw materials are received prior to entering production

 Whilst products are going through the production process

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 When products are finished - inspection or testing takes place before

products are despatched to customers

THE PROBLEM WITH THIS SORT OF INSPECTION IS THAT IT DOESN'T WORK VERY
WELL!

There are several problems with inspection under traditional quality control:

 The inspection process does not add any "value". If there were any guarantees that no
defective output would be produced, then there would be no need for an inspection
process in the first place!

 Inspection is costly, in terms of both tangible and intangible costs. For example, materials,
labour, time, employee morale, customer goodwill, lost sales

 It is sometimes done too late in the production process. This often results in defective or
non-acceptable goods actually being received by the customer

 It is usually done by the wrong people - e.g. by a separate "quality control inspection team"
rather than by the workers themselves

 Inspection is often not compatible with more modern production techniques (e.g. "Just in
Time Manufacturing") which do not allow time for much (if any) inspection.

 Working capital is tied up in stocks which cannot be sold

 There is often disagreement as to what constitutes a "quality product". For example, to

meet quotas, inspectors may approve goods that don't meet 100% conformance, giving the
message to workers that it doesn't matter if their work is a bit sloppy. Or one quality
control inspector may follow different procedures from another, or use different
measurements.

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