An extensive research on the operations and productions management of ACI Godrej Agrovet Private Limited.

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Productions and Operations Management of ACI Godrej Agrovet Private Limited
Course: MGT314 (Operations Management)
Submitted to:
Muntazera Husain (Mnh1)
Lecturer, Department of Management, School of Business and Economics
North South University
Name ID
Ataul Mustafa Raffan 161 0653 630
Aymaan Hossain 153 1434 030
Farzana Siddiqui 162 0291 030
Md. Mahafujur Rahman 152 1071 030
Rahat Khan 162 0626 030
Section: 11
Submission date: 19th April, 2019

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19th April, 2019
Muntazera Husain
Lecturer
Department of Management
School of Business and Economics
North South University.
Subject: Letter of Transmittal and Acknowledgement.
Dear Madam,
I undersigned Aymaan Hossain, the project manager of Group 14, representing ACI Godrej
Agrovet Private Limited, hereby submit our project on the operational management of ACI
Godrej Agrovet Private Limited, for your kind perusal. We have extensively conducted a
research on the existing production strategies and operations of the business, identified the
problems and subsequently have generated recommendations on the areas of improvement.
Our detailed report is enclosed herewith. My team members and I look forward to a favorable
hearing from your side.
Best Regards,
Aymaan Hossain
ID: 153 1434 030
Project Manager
Group-14; Section: 11

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Executive Summary
ACI Godrej Agrovet Private Limited started its journey in 2004 as a joint venture of Godrej
Agrovet Limited. It produce high quality animal foods and Day Old Chicks (DOC). To ensure
smooth production, the company has a Feed Mill with three 24/7 running plants, hi-tech R&D
department, well ventilated warehouses, eco-friendly machines and equipment and efficient
man power. To collect the raw information for the project, the team has visited company and
took interview of Mr. Minhajul Alam who is designated as production officer in ACI Godrej
Agrovet Private Limited. From our visiting, we have found out that the company has designed
its production strategy in such a way that helps to attain the foremost objective of the
company which is producing high quality differentiated products, alongsidemaintaining lower
cost structure in the veterinary and livestock industry. It follows batch processing systemthat
ensure flexibility in their production. We have also analyzed the existing business facility
layout, process, applications and methods to improve the quality and also improve the
operation.Throughout the observation, we have observed some quality control and operation
related issues such high lead time and supplier problem. Moreover, we have also analyzed
the demand forecasting and based on the total research we have comprised few
recommendations for improvement in the operation of ACI Godrej Agrovet Private Limited.

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Table of Contents
1. Description of the Business............................................................................................5
2. Analysis of Existing Productions Strategies ...................................................................6
3. Analysis of the Business’s Facility Layout ......................................................................9
4. Application of Productions and Operations Management Concepts ..........................10
5. Process Mapping..........................................................................................................12
6. Analysis of Quality Control Issues................................................................................13
7. Analysis of Demand Forecasting..................................................................................14
8. Operational Problems observed ..................................................................................15
9. Recommendations on the areas of improvement.......................................................16
10. References....................................................................................................................17

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1. Description of the Business:
ACI Godrej Agrovet Private Limited was established in 2004 as a joint venture of Godrej
Agrovet Limited. With the mission to enrich the quality of life of the people through
responsible application of knowledge, technology and skills the company has gained
reputation as a quality feed manufacturer catering to the ever growing needs of the feed
industry (ACI Godrej Agrovet Pvt. Ltd., n.d.). ACI Godrej Agrovet Private Limited claims that
they help feeding the nations as they produce HighEnd Poultry,Cattle,Fishand ShrimpFeed
and Day Old Chicks (DOC), prioritizing quality over everything. To ensure smooth production,
the company has a Feed Mill with three 24/7 running plants, located in Sirajganj that delivers
around 200 thousand tons per year. It purchases the best quality raw materials from all over
the country and also importing some of the best raw materials, vitamins & premixes from
abroad. The feed mill produces Poultry (Layer & Broiler), Cattle (Dairy & Beef), Fish (Sinking &
floating) and Shrimp Feed using the latest technology. To ensure the quality, both physical
and chemical tests is conducted in every step, from raw material receiving to production to
end product. The company has well ventilated warehouses and silos for storing both raw
materials and finished goods in the best possible condition.
ACI Godrej Agrovet Private Limited emphasizes on working closely with the farmers and
extends its borders and brings world-class feed for enhanced farming. Hence, the company
has bonded and established good relations with the farmers across the country. The high-
tech research and development (R&D) supports to deliver quality feed to the farmers
maintaining the nutritional needs of their animals. Also, the company educate the farmers
about world-class farming practices from farm management for poultry to pond management
for fish.

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2. Analysis of Existing Productions Strategies:
The productions manager of the plant claimed that their prime and foremost aim is to offer
high quality differentiated products alongside maintaining lower cost structure in the
veterinary and livestock industry.
Their Production Strategies are as follows:
1. Low cost: They are importing the Active Pharmaveterinary Ingredients (API) from
Europe and Asia Pacific regions. Importing API from abroad entails a lower cost
compared to their domestic production.
2. Scale based technologies: ACI Godrej Agrovet Private Limited has invested heavily in
capital equipment, which they upgrade from time to time. They have an equipment
leasing agreement with their partner banks. Moreover they are also trying to achieve
scale economies by expanding their productions with capital equipment.
3. High Quality: Quality is their top most priority. They have quality benchmarks and
standards from their parent company in India. They are continually striving to offer
high quality products than the competitors, in the Bangladesh Animal Health Industry.
4. Sustainability: ACI Godrej Agrovet Private Limited has been awarded both the
ISO9001 and ISO14001 for their quality management system and environmental
management system respectively.
5. Flexible Operations:ACI Godrej Agrovet Private Limited has both solidtablet products
which are known as Bolus and liquid products. Their operational facility has the
flexibility of product both the solid and liquid medicines simultaneously.

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High Quality:
In the Animal Health Industry of Bangladesh, the quality of a product is determined by the
following:
Potency of the Animal Health medicines.
Medicines that are able to prevent diseases.
Medicines that minimizes the usage of Antibiotics and Steroids in the fattening
process.
ACI Godrej Agrovet private limited is Bangladesh’s largest importer of phytogenic growth
promoters. Phytogenic growth promoters are produced from plant extracts and are a highly
research oriented materials.
All over the world antibiotics have been labelled as carcinogenic. Meaning they create
cancerous cells in the living bodies after a certain level of consumption. Recently the
Government of Bangladesh has banned the usage of antibiotics in animal nutrition to ensure
food safety in the food chain. Therefore, Animal Health products that have 0 Antibiotic
content in them are deemed as high quality product. Furthermore, using Phytogenic
ingredients are healthy substitutes for the nutrition required in the beef and poultry fattening
process. And this differentiates them from the others.
Tthese are the potential competitors of ACI Godrej Agrovet Private Limited.

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Flexible Operations:
ACI Godrej has built well reputation on offering quick customization to the products. Their
flexibleoperations is very much useful when they intend to supply differentiated products for
a brief period of time. An illustration of this is seen, during the outbreak of certain diseases
such as bird flu, avian influenza in Poultry. In the case of cattle, the diseases are: foot and
mouth disease, intestinal disease. Whenever there is an epidemic outbreak of such poultry
and bovine diseases, what ACI Godrej does is they make certain modifications in their Active
Pharma veterinary ingredient by including the antidote of those diseases in their medicines.
When the trouble period passes by then they revert back to their original composition.
When there is seasonal demand, such as during the time of Eid-Ul-Adha, there is boom in the
animal fattening demand. Many cattle farmers all over the country get inclined towards
feeding growth promoting nutrition to their cattle. At that time, ACI Godrej is well able to
cater to the needs of the market by increasing their capacity utilization. They employ more
labor and increase the operating rate of their production facility.

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3. Analysis of the Business’s Facility Layout:
ACI Godrej Agrovet Private Limited has BatchProcessing systemintheir factory. Their product
line has Bolus (tablets for Animals) and Liquid Medicines. The batch processing systemfosters
flexibility in their production and allows them to maintain and comparatively lower cost,
whereby they can also produce a variety of semi-standardized boluses ad liquid syrups.
The layout type of their factory is a Product Layout type, whereby the work-in-process
inventory undergo a standardized processing operations in a smooth and a high volume flow.
They have a U-Shaped Product Layout whereby the raw materials flow from the Dispensing
section to the Final Packaging section. The entire system is automated, the workers have to
give their labor input as the work—in—process flows.
Raw
Material
Dispensing
Emulsifier
Dry
Granulation
Weight
Granulation
Lubricating
Agent
Binding
Agent
Preservati
ve
Addition
Rapid
Mixing
Granulation
Drying
Milling-
Particle
Size Bolus
Tablet
Compression
Blistering
-Finished
Product
Figure 1: The U-Shaped Product Layout of ACI Godrej Agrovet Private Limited.

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4. Application of Productions and Operations Management Concepts:
ACI Agrovet is doing good in terms of their production and operation management. As per
the observation and discussion during the factory visit time we got to know what are they
doing to get the best output. ACI Agrovet is utilizing their capacity very well. They have some
methods to and strategy to improve the quality and also improve the operation.
Maintainingequipmentin goodoperatingcondition:ACIagrovet has may large machines for
their production. They do care about all those regularly, they maintain the quality if it is
working properly or not. They also cross check that if the equipment performing in the same
way or not and if the machine is producing quality goods or not for this the have some
measuring machines also they measure the fact and the quality of machine. If they find that
any machine isn’t working perfectly they go for servicing. One more important thing is up
gradation.
They are trying to be upgraded every time and whenever they seethe opportunity to upgrade
or they see new and modern technology machine comes to the market they purchase those
to make the production quality better and make it faster.
Employee training; machine can’t give you the best result because it’s human who operates
the machine. With this quote we understand that how much you money you spend on buying
good equipment’s or service them it doesn’t matter if your people can’t use them properly or
cant plan them to get the best result out of them. So it is very important to train the people
to get the best output, ACI agrovet is actually doing so. How they are training their people is
given below:
In house training:
1. Whenever they buy any new machine the train their people to operate that.

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2. Once in a month they invite experts to train the people.
3. Seniors in the same organization train juniors to work properly.
Out house training:
ACI agrovet sometimes send their employees to attend workshops and training sessions
outside the factory. Some employees are even sent to International Poultry and Cattle Feed
Exhibitions abroad to acquire knowledge on the contemporary issues of the industry.
Correcting quality problem: ACI agrovet has some quality problem for some suppliers issue
and they are trying to solvethose. They are finding new suppliers for the lubricant and binding
agent to improve the quality, they are using their research team to find the best thing and
formulas to get the highest quality result. As research can shape a business to the best frame
so they are more into research to get the best output.
Economies of scale: this is one of the best ways to increase profit. ACI agrovet is huge
company and they produce in a big amount so that they also purchase the raw materials in a
bulk which minimize the cost and give company a better profit. And they are producing in big
amount we know that increase in quanutity can decrease the fixed cost per unit. So overall
cost gets lower by the huge production of ACI agrovet and they can sale the goods in a good
affordable price.

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5. Process Mapping:
Dispensing
Emulsification
Dry Granulation
Weight Granulation
Lubricating Agent
Binding Agent
PreservativeAddition
Rapid Mixing Granulation
Drying
Are there
lumps ?
NO
OMilling
Blistering
Tablet Compression
Are the tablet
sizes
inconsistent ?
YES
YES
NO
O

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6. Analysis of Quality Control Issues:
The quality control techniques that are implemented ensures quality starting from the raw
materials to the shelf life of the products. ACI Godrej Agrovet Private Limited has invested
greatly in a fully automated quality control department. The department which has very little
human input. The high—tech automated machines have a predetermined variation rate from
0% to 2%. Any product of a batch which shows a result beyond this- is discarded. Meaning the
entire batch goes for recycling. The machines with which the quality is determined are as
follows.
Moisture Analyzer: This machine tests for the level of hydrant in the medicine. If the level
is out of control then there will be a decline in the efficacy of the medicine.
StabilityChamber:Thestabilitychamber records the realtime for the suspended particles
to settle down. This is done on the medicines which are water—soluble.
Leak Test Apparatus: In this chamber, water pressure amounting to 400 pascal is applied
to the finished goods for a time period of 1-1.5 minutes. Any Sort of bubbling recorded
will mean there is a leak detected.
Tap-densityapparatus:Herethe powdered raw materials are tested by applying pressure
of 500 pascals per minute. If the powder is distorted due to pressure, this is measured in
a density measurement instrument, this would imply that the composition of the
ingredients are not in correct proportion.
Spectrophotometer: This instrument measures the humidity, heat and ultraviolet
endurance of the products and subsequently helps to determine the shelf life of the
products. Mostly the products are sold through veterinary pharmacies which do not have
proper air-conditioning. This test determines the potency of the medicines long as they
are in stock.

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7. Analysis of Demand Forecasting:
In simple words, the organization implements the naive method to forecast their demand. ACI
Godrej Agrovet Private Limited has over 1000 (One Thousand) field levelofficers ranking from
Territory Managers and Territory Officers dispersed all over the 64 districts of Bangladesh.
These officers conduct an inventory count in the veterinary pharmacies to collect the existing
stock leveldata. They territory officers record the averagesales oftheir products on a monthly
basis and the quantity to be supplied in each region is set as a standard demand level.
Furthermore they supply in excess of the standard demand level so that the retail shops can
maintain a certain level of buffer stock, in order to meet unforeseen demand, for instance
during the outbreak of any epidemic disease, these medicinal products will be required on an
emergency basis. Furthermore, they have a very conservative approach to forecasting
demand. They consider the previous year’s data to forecast the following year’s demand.
This data is then forwarded to the Trade Marketing division. The Marketing division is
responsible for customer retention. They decide the amount of products to be supplied to the
region in concern, and they notify the Production Department and the Material Supply
Management Department accordingly.
The territory officers are required to notify about the product supply about 3 months in
advance.

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8. Operational Problems observed:
Every company faces some problem in operation like it takes time or it can be problem from
other forces. Every action which impacts the operation system is known as operational
problem. ACI Agrovet is facing some problem on their operation as per our observation during
the factory visit is:
High lead time: ACI Agrovet sharers their warehouse with the ACI pharmaceuticals which is
located in Narayanganj and ACI agrovet is located in Savar. The distance between this two is
a huge distance so it takes time to transport materials to one place to another and of course
there are some other problems like traffic jam and all this things makes the lead time higher.
And as we know that high lead time is a problem for operation as it slow down the operation
process. So ACI agrovet should take extra care for this problem as it is directly effecting their
operation process.
Supplier problem: ACI agrovet needs a vast amount of raw materials for producing medicines
and they buy different medicines from different places. We got to know that they purchase
the lubricant agent and binding agent from Dhaka midford. Dhaka midford is a place where
sometimes you can find the replica products. They don’t always sale the customers the
original and authentic one. Sometime ACI agrovet don’t get good quality products from the
midford suppliers. While the interview we know all about the problem and they are looking
for the better solution as they don’t use and low quality material the total consignment
become value less. So ACI agrovet should take care of this problem as it is effecting their
production and operation.

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9. Recommendations on the areas of improvement:
From our research we have already identified that the lead time for transporting the raw
materials from the common warehouse to the factory is huge. This often results in a
disruption in operation. Therefore we would recommend ACI Godrej to set up a ware house
in high proximity to the production plant in Savar. During our visit to the factory we noticed
that there was abandoned land near the factory. ACI Godrej can acquire that land as a
leasehold premise and build a separate warehouse which will serve the Agro-Veterinary
division.
Secondly, we have also identified that the lubricating agent and the binding agents which ACI
procures from Mitford often are of poor quality. What we suggest is that, ACI Godrej can
import these ingredients from China at a much lower price and they can ensure the quality as
well. Since they buy it from importers in Mitford, the prices reflect the profit percentage
imposed by those importers. Therefore, ifthey import directly, they can also enjoy economies
of scale as they will be importing it in huge quantities. The exporters will quote a
comparatively lower price. This will also help them to reduce the average costs.
Lastly, we got to learn that, ACI Godrej has an in-house manufacturing facility of the Blister
Papers—the packaging of the tablets (Boluses). We recommend them to enter into an
outsourcing agreement with a specialistfirmwhich willproduce the BlisterPapers from them.
The specialistcompanies usuallyhave lower cost structure as they specializeinthe production
of Blister papers solely. They can offer a much cheaper rate to ACI Godrej compared to the
cost incurred in the in-house production of the Blister papers.

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10.References
ACI Godrej Agrovet Pvt. Ltd. (n.d.). Retrived from: http://www.aci-bd.com/our-
companies/aci-godrej-agrovet-pvt.-ltd.html.
Starter Feed Market 2019 – Cargill, Archer Daniels Midland, Evonik, Associated British Foods,
Purina Mills - Market Trends. (2019). Retrieved from https://markettrendsnews.com/2019/04/starter-
feed-market-2019-cargill-archer-daniels-midland-evonik-associated-british-foods-purina-mills/
Globally Starter Feed Market Expected To Reach Multi Billion Dollars By 2024 | Speaking
Times. (2019). Retrieved from https://speakingtimes.com/globally-starter-feed-market-expected-to-
reach-multi-billion-dollars-by-2024/
ACI plans to float new subsidiary. (2019). Retrieved from
https://www.dhakatribune.com/business/2016/11/08/aci-plans-float-new-subsidiary