Case study of Namratha Oil Refineries

1.       Namratha oil refinery is one of the best oil companies that provide high quality coconut oil all over the world. Its oil quality and the taste is very demanding. Multiple users want to use this oil because of its excellent feature and its benefits. Its name is very famous between the exporter and manufacturers. Company is able to satisfy the different industrial requirements related to different sectors with a consistent and regular supply of quality products. Company is using the best quality coconut to produce best quality oil through refining processing. With the passage of time, the company is transformed into a market oriented company with modern requirements and presentation. At the national and internal level, Namratha is competing in the regions of the highest grade in the coconut market with a wealth of innovations, renewed product range and modern packaging style.

The company is producing oil according to market demand and due to its excellent quality, its market demand going to increase day by day. Now the company is facing some major issues in its production and packaging departments and management of the company have to resolve these issues as soon as possible according to customers' demand. The company never present its issues openly in front of its investors and directors. Its major issues arise in the manufacturing and maintenance areas that need more improvement and the proper record-keeping issue also arise in the same areas. Company has to appoint all the skilled and trained people who have complete knowledge about the plant and machinery and know very well that how to operate the plant at what level and manage according to production requirement. it's all the employees must be set according to their experience and skills. The performance of the company is very high but it has to resolve its major issues that may create a problem for the progress of the company and also affect its production area. According to this case study. although the profit of the company is raising it also faces many internal issues that may affect its performance and its demand in the market.

2.      The company is facing problems in its manufacturing area about the operation of plants and machinery. The company also face a lack of record-keeping in the maintenance area. Breakdown of machines and poor quality spare parts. Lack of minimum inventory level due to the shortage of finance. Maintenance of machines and their up-gradation on time. These are the common issues that normally occur in the company, but the main task for the company is to resolve these issues timely to avoid any major loss or disturb their market reputation. 

There are some competitors of the Namratha oil in the market which include KOKOS VCO Pvt ltd, BAJAJ consumer care LTD, Suruchi refinery PVT LTD, Aromaaz international, Krupa Trading company, and Excel combines. These are some competitors that also provide the best quality coconut oil to consumers and gather a good share of market profit.  

Namratha is one of the largest oil refinery companies that provide best quality oil to its consumers. Over 22 years the company has lots of projects with different retailers and suppliers and they supply their products in all over the world. Their market demand is rapidly increasing day by day and they also enhance their production limits according to market requirements. 

In the current time, when the entire world is facing the COVID-19 disease, the overall industry in the world face loss and a great downfall because the production of different sectors stops or minimize due to this disease. Due to this disease, the price of the oil, price of raw material and other elements prices going down and the company has to face a major loss in its production and development. And progress ration goes down. The performance of the company and its production level goes down and the company never generate the revenue level as compare to the previous year because the economy of the world goes down due to this issue.

3.       SWOT analysis is a major component of a company to determine its strengths weakness, threats and opportunities according to company condition. Its strengths include its demand in the market, its production set up that clearly explain each and everything to the consumers, it utilizes high-quality raw material for its manufacturing, its product quality is very high, it can compete its competitors at the national and international level, it offers most economical prices to all the consumers, this company has the largest capacity for the production of oil and cover a major demand of market through its high production level, and its packaging style is very famous among customers.

Its weakness includes its poor maintenance of plant and equipment, lack of skilled workers for operating the machinery, lack of inventory at the minimum level for safety stock, poor quality of spare parts, lack of record keeping at maintenance level, machinery and its performance, company also utilise long term liabilities and disease issue also minimize its profitability.

Its opportunities include its product quality and its market demand that can be sustained for the long term and it can easily capture a high level of customers. It follows up-gradation programs for its machinery and plants and maintains them according to their requirements. By enhancing their quality they can compete its competitors in the international market and attract a maximum number of customers due to convenient packaging styles offer for the customers.

It also has some threats that include its market image goes down because of its poor production information and poor condition of machinery. Its machinery faces lots of breakdowns that can affect its performance and production cycle. It has to hire skilled employees of better operation in the industry.

So there are also many issues that the company has to face but still, company performance is highly attractive and it can cover its issues by proper maintenance and a better understanding of the production line. The company can enhance its performance by overcoming its weakness and more focus on its strengths.

4.      Perform a Pareto analysis of the filling process. Can you identify the main problem area?

The filling process of Namratha Oil refinery has three main types including Pouch Line, Narrow Mouth Line, and Wide Mouth Line. The following charts represent the Pareto analysis of the filling process to identify the main problem associated with the filling process.

The above presented graph indicate towards continue increase in the production output of pouch line from April to March. During some months such as August and November, the overall output was decreased although the overall trend is representing growth.

The above presented Pareto analysis chart indicates that the production level is decreased in the month of February and March.

Following the above graph, the total number of units output is decreased from April to the month of February and March. In April, total units were around 97 which decreased to 56 in March. Based on this calculation another graph is developed for the cumulative presentation of praetor analysis.

Main Problem: Based on the above charts and Pareto analysis results it can be said that the main problem is linked with the filling process of wide mouth line. In this line, the overall production level is decreased over the one year duration which is a critical problem for the profitability of the Namratha Oil Refinery Company.

5.      Perform a TAKT time analysis of the filling process and the Cycle time. What is the bottleneck?

Using the filling process information in the case study the following calculations are made for cycle time, bottleneck, and Takt time analysis.

Considering this company need to produce at least 477.83 units per month. The following graph represents the takt analysis for the cumulative production of three lines in the company.

The above presented line chart of Takt Analysis includes two lines in red and blue colour. The actual output line (red line) is representing a decrease in the output level during November and August. However, in the month of December, January, and March company was capable to produce more than the required output level [represented by takt line].

What is Bottleneck?:  The bottleneck relates to long wait times, backlogged work, and high levels of stress in the filling process. The decrease in actual output in November and August is mainly because of the decrease in the output level of the wide line. However, the decrease in output level in the month of February is caused by machine failure [piston failure and seal kit damages]. Thus, conclusively it can be said that the bottleneck, in this case, is mainly because of the long wait time when machines had failure and issues in the working process.

6.      Perform a Fishbone analysis. Use this to do a root-cause analysis of the problem. What do you recommend to do to fix it?

The fishbone analysis is presented below:

The fishbone analysis diagram is consist of six main sections including environment, machine, manpower, management, materials, and methods. In the machine section, key issues concerning with machine processing are presented. For instance, failure of piston and clutch plate issues in the machine which require additional time for maintenance. The manpower section includes the identified issues regarding the workforce of the company. For instance, case study state that semi-skilled workforce and an insufficient number of the experienced staff member are main issues. While issues concerning with environment are issues in communication system and waste control issues (as stated in the case study). While materials and methods are specifically related to the work process of three lines (pouch line, wide mouth line, and narrow mouth line). Additionally, the measurement section represents the sources to obtain information about the company's output and managerial work performance.

·         Root Cause Analysis: The fishbone analysis provides information about the root causes of issues faced by the Namratha Oil Refinery Company. The root cause of production inefficiency in the filling process is linked with the machine section and managerial inefficiency to utilize the resources appropriately. The defect in the machine processing cause delays which causes problems.

·         Recommendation to Fix: The analysis recommends that processes concerning with machine work need for attention and changes for improvement. The management should control the machine issues by installing new machines with advanced features.

7.      What should Kumar do?

Mr Kumar should do the following work in the company for the improvement

a)      Recruit more skilled labour force

b)      Currently, the company have just a few experienced staff members more should be recruited.

c)      Machine processes should be changed. Old machines should be replaced with new ones to reduce failure of hose, clutch plate issues and NPV spring failure. In the month of February company experienced direct decline in the output because of extra time spent in machine repairing process because of machine failure. Considering this, Kumar should rethink about the currently used machine and processes in the company. Changes made in the process and machines will reduce such issues and other major issues concerning with the production output of filling processes.