Operations Management

at Tinplate Company of

India

IntroductionTinplate Company of India Limited – a Tata Company

TCIL is the largest indigenous producer of tin coated and tin free steel sheets in India

Having 35-40% market share The industry leader for more than 90 years Headquartered in Kolkata, the Company’s Works is located at

Jamshedpur, Jharkhand Presently 11 offices in India and a distribution network with

16 stocking points TCIL Works presently has two Electrolytic Tinning Lines

(ETLs) and Cold Rolling Mills (CRMs) The Company is in the business of manufacturing and

supplying reliable, cost-effective, value-added tin mill products

It manufactures various grades of electrolytic tinplates, tin-free steel sheets and Full Hard Cold Rolled Sheets (FHCR) used for metal packaging

An Introduction

Operation Strategy Decision

Identify a key Operations Strategy decision made during the above study period

It is a Japanese initiative coordinated and

supported worldwide by Japan Institute of Plant

Maintenance, was launched at TCIL in the year

2001-02

 

What is TPM?

Medical science of machines

System of maintaining and improving the

integrity of production and quality systems

through the machines, equipment’s, processes

and employees that add business value to the

organization

 Goal of the TPM

 To markedly increase production while, at the same time, increasing employee morale and job satisfaction

The Decision

TPM (Total Productive Maintenance)

Basis for Adopting TPMExplain the basis for the above decision

To introduce robust operational processes, improve quality and gain operational excellence as part of the company’s short term plans

Measure the effectiveness of the 8pillars of TPM through P(Productivity), Q(Quality), C(Cost), D(Delivery), S(Safety), M(Morale)

Objectives of TPM

Achieve Zero Defects, Zero Breakdown and Zero accidents in all functional areas of the organization

Involve people at all levels of organization

Form different teams to reduce defects and drive Self Maintenance

The ‘Why’ of Decision

TCIL Speak – TPM Policy

We are committed to adopt TPM through the participation of all our employees. Our aim is to achieve zero failure, zero defects and zero

accidents. We shall achieve this by creating a clean and pleasant work place through teamwork and

committed employees.

Direct benefits of TPM Increase productivity and OEE (Overall

equipment efficiency) by 1.5 or 2 times Rectify customer complaints Reduce the manufacturing cost by 30% Satisfy the customer’s needs by 100 %

(Delivering the right quantity at the right time, in the required quality)

Reduce wastage in fast changing environments

Reduce accidents Follow pollution control measures

Indirect benefits of TPM Higher confidence level among the workers Keep the work place clean, neat and

attractive Favourable change in the attitude of the

operators Achieve goals by working as Team Share knowledge and experience The worker gets a feeling of owning the

machine

TPM @ TCIL

Process StructureIdentify the process structure for any two stages of manufacture of a product of the chosen business

Electrolytic Tinplating Process

Cold Rolled

Steel CoilUncoiling Alkaline

Cleaning Rinsing

Pickling RinsingElectro-plating with tin

Drying

Brightening by

Reflow unit

Passivation Oiling Shearing

Classifier Packing Despatch

Pickling Process Structure

Soak Clean

Electro-

clean

Rinse

Acid

Rinse

Plate

Rinse

Bright Dip

Rinse

Chromate

Hot Rins

eDry

Tin Electroplating

Capacity Planning Strategy

Is the sales growth for the above product based on an “Expansionist” or “Wait-and-see” capacity planning

strategy? Why?

The sales growth for the above product is based on Expansionist Strategy as Tata Tinplate has always focussed on expanding their capacity. For 50 years, TCIL single-handedly built up the Indian Tinplate Industry

TCIL has undergone on-going expansion projects to double its capacity to 380,000MT between 2006 and 2010. These projects were taken up in phases, with the tinning line (downstream phase) being commissioned in September 2008 and the cold-rolling mills complex (upstream phase) during 2008-10

  The State-of-the-Art new combination line with Electrolytic Tinning & Tin Free Steel

production facility is one of the main reasons that enabled TCIL to achieve this target for capacity expansion in the short time frame

  TCIL has a wide range of product offerings both in coil & sheet form for the discerning

customers, primarily in the growing domestic and international markets and facilitate in consolidating its undisputed status as the leader in the domestic market and emerge as a world class regional player

As previously discussed TPM is also one of the strategy used by TCIL to improve their capacity by increasing productivity by 1.5 to 2 times and decreasing their manufacturing cost by 30%

Capacity Planning Strategy

ProductsList at least two variants of the above product

Open Top Sanitary Cans (OTSC)o TCIL introduced the concept for open top sanitary canso TCIL is the domestic source for all OTS productso Available in single and double reduced formso Used for packaging of processed food

Variantso D 5.6/2.8o D 8.4/2.8

Tin Free Steelo It’s an electrolytic chrome plated steelo Consists of thin layer of chromium

Products and Variants

Product Structure TreeDetermine the product structure tree for one of the above

product variants

Open Top Sanitary Cans

Base

Steel

Cylindrical Sides

Coiled Steel

Lid

Steel

Packaging

Box

Product Structure Tree for OTSC

Operations PlanningBriefly describe how Operations Planning could be adapted

to the above identified process structures

Mission - Service customer requirements of green packaging by offering

reliable, cost-effective & value added tin mill products

Vision - Be an industry leader in value creation, servicing

packaging needs and creating a greener future

Aggregate Demand Forecast (160,000 MT)

We will be achieving the demand of 160,000 MT keeping in mind the vision & mission of the company

Aggregate Planning

Master Scheduling

Material Requirement Planning

Inventory Management

Aggregate Planning

Planning Horizon • Long Range

Planning Strategies

• Reactive Alternative• Chase Demand - Shift in approach of TCIL from

“made to stock” to “made to order” inventory practice

Advantages

• It minimizes the inventory for finished goods by trying to keep pace with demand fluctuations

• Since TCIL has a very large capacity, it matches demand by varying either work force level or output rate

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PROJECTED INVENTORY

MASTER SCHEDULIN

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OUTPUTSINPUTS

Master Scheduling Process (MPS)

YEAR ELECTROLYTIC TINPLATE (tonnes)

COLD ROLLING MILL(tonnes)

2010-2011 2,23,090 2,01,823

2011-2012 2,41,182 2,64,403

2012-2013 2,93,128 3,23,426

2013-2014 3,09,812 3,35,833

The result of dis-aggregating an aggregate plan, showing quantity and timing of a specific end items for a scheduled horizon.

BEGINNING INVENTORY:

Materials required are steel cover and metal cap

FORECAST:

Master Scheduling Process (MPS)

Total tinplate consumption in India has increased from 300,000 tonnes to 460,000 tonnes in five years, but in terms of per capita consumption it is still abysmally low compared with global standards.

TCIL has greatly benefited from the food consumerism revolution. It has responded by making available a vast array of products in different shapes, sizes and quantities.

CUSTOMERS:

Tinplate’s product open top sanitary cans in the form of finished goods are serviced to Tayo rolls limited, The Tata pigments limited and Tata steel international (Singapore) Pt. Limited

Master Scheduling Process (MPS)

Operations &

Project

Marketing Sales

Strategy

Total Quality Managemen

t

Information

Technology

Interdependence

As you can see in the above structure, steel is used twice in the process Usage of steel is a dependent variable because it is used in the production of finished

goods

STEEL

STEEL

Material Requirement Planning

• Steel procurement from TATA STEEL

DAY 1

• Picking up of the material

9 AM

• Assembly line

10.00 AM

Planning Horizon

Gross Requirements: 1,60,000 tonnes(Expected Demand)

Scheduled Receipts: 1,00,000 tonnes(Open orders scheduled to arrive)

Project on hand: 1000 tonnes(Expected inventory at the beginning)

Net Requirements: 5000 tonnes(Actual amount needed in each period)

Planned-order receipts: 4000 tonnes(Quantity expected at the beginning)

Planned-order release: 6000 tonnes(Planned amount to order at each period)

MRP Processing

Inventory Management

Model To take advantage of economies of scale and smoothen production

requirements, TCIL uses the EPQ Model Economic production quantity (EPQ) is the quantity of a product that

should be manufactured in a single batch so as to minimize the total cost that includes setup costs for the machines and inventory holding costs

Production is done in batches or lots

Raw Materials Used Steel and Hot rolled coils procured from Tata Steel Acid for electroplating Packaging box Spares

Inventory Management

Lead Time The key raw material involved in steel and hot rolled coil which is

procured from Tata Steel The lead time usually is between 12-15 days Inventory (safety stock) must be planned in accordance with the lead

time To effectively decrease the lead time for raw materials, TCIL

commissioned its state-of-the-art 120,000 tonnes per annum Cold Rolling Mill having the benefit of synergy with Tata Steel

Inventory Counting System TCIL could emply the Perpetual Inventory System wherein removals

from inventory continuously, thus monitoring current levels of each item Universal Bar Code to be created and labeled on each product variant

to monitor products inventory level

Thank You!!!

References Tinplate Company of India’s website: http://www.tatatinplate.com/ Electroplating process http://en.wikipedia.org/wiki/Electroplating Slideshare TPM