Malabar cements

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A PROJECT REPORT ON IMPROVING AVAILABILITY OF EQUIPMENT IN
MALABAR CEMENTS LIMITED.
PALAKKAD, KERALA
in partial fulfilment of the requirement of
MASTER OF BUSINESS ADMINISTRATION
SUBMITED BY
SARATH R

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BONAFIDE CERTIFICATE
This is to certify that the Summer Training Report entitled
“______________________________________________”, in partial fulfilment of the
requirements for the award of the Degree of Masterof Business Administration is a record
of original training undergone by your name ( Reg .No ) during the year 2019-2020 of study
in the Department of Management Studies, Nehru Institute of Technology,Coimbatore under
supervision (Guide Name ) and the report has not formed the basis for the award of any
Degree/Fellowship or other similar title to any candidate of any University.
INTERNAL GUIDE DIRECTOR
Department of Management Studies Department of Management
Studies
Nehru Institute of Technology Nehru Institute of Technology
Kalaiyapuram Kalaiyapuram
Coimbatore Coimbatore
Viva-Voice examination held on__________________________
Date: INTERNAL
EXAMINER
Place:
ACKNOWLEDGEMENT

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I would like to express my wholehearted gratitude to Dr. P.KRISHNA KUMAR,
MBA., Ph.D Honorable CEO and Secretary of Nehru Group of Institution and Adv.
Dr.P.KRISHNA DAS, Managing Trustee of Nehru Group of Institution for allowing me to
undergo this organization study.
I am extremely thankful to Dr.K.P.Arulshri ,B.E, M.E., Ph.D Principal, Nehru Institute
of Technology, Coimbatore and to Dr.R.Karuppasamy M.Com., MBA, M.Phil, Ph.D,
PLME(IIM-A), Director, Department of Management Studies, Nehru Institute of Technology,
Coimbatore, for giving me the wonderful opportunity to feel the corporate experience through
this project.
I have great pleasure in extending my sincere gratitude to my beloved guide -------------
-------, Assistant Professor, Nehru Institute of Technology, for her/his valuable guidance and
for the pain and strains taken in making summer project work a grand success.
I humbly express my profound thanks to----------------------------------------------, for
her/his constant encouragement and support during the tenure of this project.
I also express my gratitude to Parents, and dear friends without whom the project would
not have been successful. Above all, I wish to thank the almighty for giving courage and
wisdom to take up this project and complete it successfully.
YOUR NAME

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DECLARATION
I, ------------------ hereby declare that the project titled submitted to Anna university,
Chennai in partial fulfillment of the requirements for the award of the degree of MASTER OF
BUSINESS ADMINISTRATION is a record of original and independent research work done
by me during June 2019 under the supervision and guidance of
____________________________ , Nehru Institute of Technology , Coimbatore and it has
not formed the basis for the award of any Degree/ Diploma/ Associate ship/ Fellowship or other
similar title to any candidate of any university.
Place: YOUR NAME
Date: Reg.No

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INDEX
SL. NO. TOPIC PAGE NO.
1 INTRODUCTION 5
1.1 INTRODUCTION 5
1.2 LITERATURE REVIEW 6
2 INDUSTRY PROFILE 12
2.1 INDIAN CEMENT INDUSTRY 12
2.2 MAJOR PLAYERS IN CEMENT INDUSTRY 13
3 COMPANY PROFILE 14
3.1 HISTORY AND MILESTONES 15
3.2 VISION, MISSION, OBJECTIVES & STRATEGIES
OF ORGANIZATION
16
3.3 PRODUCT PROFILE 17
4 OBJECTIVE OF THE STUDY 18
4.1 OBJECTIVES 18
4.2 SAMPLE DESIGN 18
4.3 SOURCES OF DATA 18
4.4 TOOLS AND TECHNIQUES 19
4.5 LIMITATIONS 19
5 RESEARCH METHODOLOGY 20
5.1 PROCESS FLOW CHART 20
5.2 DEFINE PHASE: OVERALL EQUIPMENT
EFFICIENCY
22
5.3 MEASURE PHASE: PARETO ANALYSIS 24
5.4 ANALYSE PHASE: FAILURE MODE & EFFECT
ANALYSIS
25
5.5 CAUSE EFFECT DIAGRAM 28
5.6 IMPROVE PHASE: INVENTORY
MANAGEMENT
29
5.7 CONTROL PHASE: CONTROL CHART 41
6 FINDINGS & RECOMMENDATIONS 43
6.1 FINDINGS 43
6.2 RECOMMENDATIONS 43
7 LEARNINGS 44

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LIST OF FIGURES
FIGURE NO. TITLE PAGE NO.
5.1 PROCESS FLOW CHART 20
5.2 OVERALL EQUIPMENT EFFICIENCY 23
5.3 PARETO ANALYSIS 24
5.4 CAUSE EFFECT DIAGRAM 28
5.5 CONTROL CHART (1) 41

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LIST OF TABLES
TABLE NO. TITLE PAGE NO.
3.1 TYPES OF CEMENT 17
5.1 OVERALL EQUIPMENT EFFICIENCY 23
5.2 PARETO ANALYSIS 24
5.3 FMEA ANALYSIS (1) 25
5.7 UNIT PRICE 29
5.8 MATERIAL CONSUMPTION 29
5.9 MATERIAL PURCHASED 30
5.10 CARRYING COST (1) 30
5.11 CARRYING COST (2) 31
5.12 ORDERING COST 31
5.13 STANDARD DEVIATION OF DEMAND (1) 31
5.17 SERVICE LEVEL 33
5.18 EOQ, SERVICE POINT, REORDER POINT 33
5.19 IMPORTED COAL 34
5.20 GYPSUM 35
5.21 CEMENT GRADE LIMESTONE 36
5.22 LATERITE 37
5.23 PETCOKE 38
5.24 FLYASH 39
5.25 LINKAGE COAL 40

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1. INTRODUCTION
1.1 INTRODUCTION
The underlying concept that is being followed throughout the internship project is to understand
the concepts of lean and lean production. The core idea can be quite simply being put as
relentlessly working on eliminating waste from the manufacturing process. The elephant in the
room here is waste. Muda or uselessness is one amongst the three types of deviation from
optimal allocation of resources (the other being mura and muri). Why? Because waste is
equivalent to cost. Lean production approach sets out to minimize activities that do not add
value to the production process such as the 7 wastes.
The Seven Wastes of Lean Manufacturing are:
1. Transport: Movement of material from location one to another location is a considered as
waste as it adds zero value to the product.
2. Inventory: Every piece of product that is tied up in form of raw material, work in progress
or finished goods is an incurred cost until it has been actually sold. Inventory simply need space
to be stored and has to be transported around and any damage during transport makes the
product obsolete.
3. Motion: Movement of machine or man which are not as small or easy to achieve are termed
as unnecessary motion. Bending down to retrieve objects, excessive travel between work
stations, increased stress due to repeated motion are all examples of waste of motion.
4. Waiting: Machines standing idle waiting for a production process to be completed, resources
to arrive, waiting for delivery from supplier, engineer to come fix a machine. All these
examples of disrupted flow due to waste of waiting.
5. Over-Processing: Processes like use of inappropriate techniques, using oversize equipment
are not required by the customer. All these are costs in form or time and money.
6. Overproduction: making too much or making it too early is the most serious of all the 7 types
of waste.
7. Defects: every defective item demands rework or has to be replaced and leads to scrap and
paper work. This means lost customer.
The focus was to implement the concept of lean to identify the presence of above
wastes in the production process by implementing various quality tools and there upon take
measure to remove these wastes. Thus the core concept that was understood was to make your
value adding process more efficient and in turn cause the waste to be literally “dissolve”.

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1.2 LITERATURE REVIEW
Researchers have implemented the OEE improvement tactic on various machines and machine
production lines. But the pinnacle of all these researches is to find the maximum possible OEE,
which can only be attained by TPM implementation. They have used different tools like kaizen,
jishu-hozen, one point lessons, why-why analysis, fishbone cause effect diagram analysis or a
combination of these tools to augment the OEE. The literature related to this has been discussed
below:
Ljungberg O, et al. (1998) [1] studied that in order to implement Total Productive
Maintenance (TPM) it is imperative to determine the value of various types of manufacturing
losses, in order to command activities and allocate resources in an optimal way. In many firms,
major time losses are taken care off rather than focusing on the minor causes.
He worked on a method for implementing data collection by a simple model and developed
this to a combined model with computerised systems and manual recording. This gave him
both an exact assessment of the magnitude of the disturbance and an in-depth view of the
rationale for losses. In about 20 cases, the overall equipment effectiveness was only around 55
per cent as surveyed by him. Further, he opined that performance losses are the dominating
ones. He also stated from his research work that if the production process is new to the firm
the Overall Equipment Effectiveness will be less than if the firm is habituated to the
manufacturing layout.
Jonsson P & Lesshammar M, et al. (1999) [2] wrote a paper which focused on four critical
dimensions (what to measure) and two characteristics (how to measure) of a total production
measurement process. The overall equipment effectiveness (OEE) measurement calculations
in such a system are planned against the general needs. The current measurement systems and
the prospect of OEE are evaluated by them by comparing with some standard data. They found
that the general shortcomings of the production lines were their inability to gauge flow
exposure or external effectiveness to any great extent. They also performed field experiments
in the studied organisations which showed that use of OEE in combination with an open and a
not necessarily central organisation design could ameliorate several of those enfeeblements.
Ireland F & Dale B.G, et al. (2001) [3] focussed on a research paper based on TPM
implementation in three companies, because of financial disturbances in them. Senior
management in each of these companies had taken the initiative for TPM implementation by
setting up appropriate organisational structures.Nakajima’s seven steps of autonomous
maintenance is taken into due consideration. Several other TPM pillars were set up which

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included education and training, quality improvements, quality maintenance and safety.
However, the main differences in the aforesaid implementation related to the use of ABC
machine classification system and the role of facilitators.
McKone E Kathleen & Schroeder G Roger, etal. (1998) [4] proposed a plan of Structural
Equation Modelling (SEM) by relating Total Preventive Maintenance (TPM) and
manufacturing performance. Total Productive Maintenance was to share a positive and vital
relationship with low cost, high levels of quality and strong delivery performance. Further, they
found that the relationship can be explained by both direct and indirect relationships. Just- In-
Time (JIT) practice was incorporated to derive a significant bond between TPM and
manufacturing performance. They suggested a speculative frame for deducing the utility of
TPM and how it depends on managerial factors such as Just-in-Time, Total Quality
Management and Employee Involvement as well as environmental and organizational factors.
They experimented this framework using data from 97 plants in three different countries to
determine what type of companies are most likely to aggressively pursue TPM practices.
Consequently they discovered that specific contextual variables necessarily explained a
significant portion of the variance in the level of TPM implementation. Finally they found the
outcome of the study and concluded that while environmental ambient factors like country aids
in explaining discrepancy in TPM execution, management related factors that are under the
jurisdiction of managerial body of plants, are more pivotal to the execution of TPM programs.
Pomorski R Thomas, et al. (2004) [5] developed a research whose sole objective was
―perfect manufacturing‖. He examined the basic concepts of TPM and reviewed the
significant literature related to design, implementation and maintenance of TPM programmes
in manufacturing processes. His detailed study included the organizational structures, human
interactions, analytical tools and success criteria associated with the enforcement of Total
Productive Maintenance process.
Gupta K Amit & Garg R.K, et al. (2012) [6] developed a paper on OEE improvement through
TPM keeping in mind the global competition in manufacturing and production sector and
customer satisfaction. Customers’ delight lies in product quality, delivery time and cost of
product. Hence, a maintenance system must be incorporated by the firms to improve and
increase both quality and productivity continuously. Total Productive
Maintenance is a policy aimed at increasing the availability of existing equipment thereby
minimising the essence of extra capital investment. The fundamental objective of this research
paper is to study the effectiveness and implementation of TPM programme in an automobile

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manufacturing organization. They stressed on the case study of implementing TPM in an
automobile manufacturing organization, the increase in
efficiency and productivity of machines in terms of Overall Equipment Effectiveness (OEE).
On the basis of results they developed a database which can be further used.
Singh Ranteshwar, Gohil M. Ashish, Shah B. Dhaval, et al. (2013) [7] proposed a research
on TPM implementation in a machine shop. They studied that for a world class manufacturing
process, none but Total Productive Maintenance (TPM) and Total Quality Management (TQM)
are inevitable. They investigated TPM on a company manufacturing automotive component.
In a CNC machineshop, they used the concept where turning centres of varied capacities were
used.OEE was used as a measure of success of TPM implementation. They identified the losses
incurred, tried to lessen these with TPM pillars and thereby improved the CNC machine
utilisation.
Ahuja I.P.S & Khamba J.S, et al. (2008) [8] proposed a paper on the literature of Total
Productive Maintenance (TPM) and to enlighten an overview of the TPM processes practiced
by different manufacturing firms. They further focused on eliminating the barriers in TPM
implementation in these firms. They systematically studied the various issues like Overall
Equipment Effectiveness (OEE), TPM framework, TPM implementation practices, obstacles
and success factors. They categorized the published literature and analysed and reviewed it
methodologically.
KumarPradeep, Varambally K.V.M, Rodrigues L.R Lewlyn, et al. (2012) [9] developed a
methodology for TPM implementation in manufacturing industries. Due to the increasing
competitiveness in global world to achieve superlative manufacturing processes, their study
intended to help companies to look for new strategies to cost reduction, boosting employees to
tackle unseen obstacles and bring about a new culture at work place.
First and foremost, they did literature review to understand the underlying concepts of TPM.
Secondly, they conducted an empirical study about the high end Printing press machines
&Packaging machines based on real time data and analysis was done to obtain achievable
results. Last but not the least; questionnaires were distributed by them to assess information on
successful implementation of TPM. Results gained through the empirical study revealed the
varying drift in the total effectiveness of equipments and Total Productivity of the machines
taken up for the study. They found that the average values of OEE lay between the ranges of
15% to 60% against world class standards of 85% and Total productivity (TP) laid between
0.09 to 0.34. Hence major causes resulting in the downtime and abatement in the productivity
was highlighted by them. They conducted a comparative study between World Class industries

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with TPM and industries without TPM and henceforth identified the various problems leading
to substantial decline in the overall efficiency of the industry and provided useful inputs
prioritizing on the boon and methodology for implementing TPM in industries.
Poduval S Prasanth, Pramod V.R, et al. (2013)[10] proposed a paper on the barriers in TPM
implementation in industries. They tried to study the problems faced by the industries in
improving their manufacturing processes through TPM.Initially they explained the detailed
concept of TPM and the momentousness of TPM in organisations in a complex business
scenario. Later their motive of study became the hindrances encountered in TPM
implementation in industries. Finally they provided a brief study to eliminate such barriers and
ensure a smooth and flexible running of TPM.
Canbolat (2000) stated that main causes comprising space insufficiency in the storage in a
beverage bottling facility in Baku are detected thereby using Pareto analysis. Ahmed and
Ahmad (2001) did research in a factory manufacturing glass-bulb of which production five
basic materials such as flanged pipe, glass coating, wire with lead content, plug and stopple
have an important role. In the firm where the losses regarding basic materials are higher than
those anticipated in monthly budgets, factors increasing basic material waste in each step of
production process are detected in accordance with their significance levels.
Thereby stating the factory has a great loss of production due to business interruption in a
cement factory, Özcan (2001), aimed to detect failure types required to be prioritized since all
causes of failures cannot be eliminated at the very time.He detected important causes of
business interruptions thereby using Pareto analysis. As to Baysal et al. (2002), they executed
FMEA implementation in an automotive supply industry plant. They developed measures
against possible failures and made suggestions for follow-up. In their studies executed in textile
sector, Bircan and Gedik (2003) detected substantial failure modes thereby analyzing with
Pareto method the failure modes and numbers on the product called wind jacket. In their
implementation carried out in a business firm manufacturing motor and tractor, Kaya and Ağa
(2004) arranged number of failures based on months detected through recordings kept by the
business firm, they made histogram for such mistakes. They expressed which failures are more
important than others through performing Pareto analysis.
As to Karuppusami and Gandhinathan (2006), they classified critical factors of success for total
quality management and specified those failures with critical importance among the factors
they obtained as a result of literature review they carried out in related areas. Ateş et al. (2006)
carried out FMEA implementation study for a product called “a drilling apparatus with

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adjustable head’’. They stated that likely failures can be detected and changes for improvement
purposes can be made thereby creating proposals when designs with FMEA are studied.
Arvanitoyannis and Varzakas (2007) carried out in a business firm producing potato chips,
executed Failure Mode and Effect Analysis, FMEA method in order to analyze production line.
They utilized Pareto diagram for the potential optimization of the model they dealt with. Çöl
et al. (2008) used Pareto analysis regarding the issue of stocks classification and they suggested
several stock policies for the materials classified according to significance level.
Eleren (2007) dealt with the issue regarding the assessment with FMEA of failure modes of
production management lesson in management undergraduate program that lead to
ineffectiveness in education process. Yücel (2007) dealt with garment industry which he
expressed as craft production. He put forward suggestions for improvement thereby analyzing
the problem of sewing failures elimination with FMEA.
Cervone (2009) examined substantial factors effective in realization of digital library projects.
The author using Pareto analysis to specify significance level of such factors stated that it
influences positively the success of such projects to take into consideration the results obtained.
Güner (2009) dealt with garment industry and analysed preparation process up to the actual
commencement of production. He made use of Pareto analysis to identify the significance level
of activities in preparation process before production.
1) The successful management of the Inventory is critical for the performance of the
organization. The stock is one of the key determinants which determines the productivity in
cement industry. Inventory is called the "graveyard of business" if not properly managed the
industry may fail. Inventory management can be done using various techniques.(Chalam & V,
2016)
2) One of the problem faced in supply chain management is inventory management. The
companies need to have adequate inventory to meet the customer demand, if we stock excess
stock it lead to holding stock hence inventory should be stocked in such a way that only
required amount should be stock with only required safety stock. Proper inventory management
can be done by using ABC classification, demand forecasting methods, inventory management,
replenishment policies. There are three types of inventory raw materials, work in progress and

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finished goods. There are different inventory models which helps to give information regarding
when to order and how much to order...etc. Companies can use decision support systems which
helps to increase the accuracy of forecast.(Plinere & Borisov, 2015)
3) As a result of today’s uncertain economy a proper inventory model such as EOQ, re-order
point, safety stock is required to be maintained in order to avoid the uncertainties. The shortage
of raw materials will interrupt the production. ABC analysis can be used to classify raw-
materials in to A, B, C items on the basis of criticality. For manufacturing companies inventory
is considered as the second largest asset category. An effective inventory management should
have following characteristics continues supply of raw-materials, smooth sale of finished
goods, minimum ordering and carrying cost, proper control for the investment in inventories,
maintain sufficient stock for critical items…etc. For setting of EOQ certain assumptions should
be considered they are carrying and ordering cost known, demand known, constant price per
unit, the replenishment is made instantaneously, no stock outs allowed.(S, 2014)

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2. INDUSTRY PROFILE
Cement industry is one of the key industries that play a significant role in the growth and
development of a nation. It is a vital constituent of infrastructure development and the coming
of smart cities has given a major boost to the cement industry. Cement consumption depends
on the time of the year and prevalent weather conditions. Consumption levels will be up in
summer season as it is the best time for infrastructural activities and consumption levels decline
in the rainy season as construction works become hard due to the presence of moisture in the
atmosphere.
2.1 INDIAN CEMENT INDUSTRY
Indian Cement Industry is one of the oldest industries catering to the infrastructure needs of
the country since the British Raj. It was deregulated in 1982 and by now, it has become a vital
part of India’s economy. India is the second largest producer of cement in the world and
accounts for 6.7 per cent of world's cement output. It is a fragmented industry and the southern
region of the country creates maximum demand for cement. Now the Indian cement industry
is becoming hi-tech with technological up-gradation including modernization and
improvement of plant processes, which helps it to reduce manpower costs. India produces a
variety of cement including Ordinary Portland Cement (OPC), Portland Pozzolana Cement
(PPC), and Portland Blast Furnace Slag Cement (PBFS). Governments’ push for large
infrastructural projects such as the development of 98 smart cities is expected to provide a
major boost to the industry. Therefore, cement demand in India is only expected to increase.
India is second largest producer of cement in the world. India’s cement industry is plays a vital
part in its economy, providing employment to more than a million people. Ever since it was
deregulated in 1982, the Indian cement industry has attracted huge investments, both from
Indian as well as foreign investors. India has a lot of potential for development in infrastructure
and construction sector and the cement sector is expected to largely benefit from it. Some of
recent major initiatives such as development of 98 smart cities are expected to provide a major
boost to the sector.
The housing sector is the biggest demand driver of cement, accounting for 67 percent
of the total consumption in India. The other major consumers of cement include infrastructure
at 13 per cent, commercial construction at 1 per cent and industrial construction at 9 per cent.
India’s total cement production capacity is nearly 460 million tons per annum as of December
2017 and it’s expected to reach 550 million tons by 2025.The growth of cement industry is
expected to grow 5-6 percent between FY17-FY20. The industry is currently producing 280MT

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for meeting domestic demands and 5MT for exports requirement. The country’s per capita
consumption stands at around 225kg. Cement consumption is expected to grow by 5.0-5.5 per
cent in FY18 on the back of increased spends on roads and railways, push towards affordable
housing by central government. Of the total capacity, 98 per cent lies with the private sector &
the rest with public sector. The Indian cement industry is dominated by a few companies the
top 20 cement companies account for almost 70 per cent of total cement production of the
country. A total of 210 large cement plants account for a cumulative installed capacity of over
410 million tons. Of the total 210 large cement plants in India, 77 are situated in the states of
Andhra Pradesh, Rajasthan & Tamil Nadu.
2.2 MAJOR PLAYERS IN CEMENT INDUSTRY
Top 10 largest cement companies in India is listed below.
1. UltraTech Cement
2. Shree Cement
3. Ambuja Cement
4. ACC
5. Binani Cement
6. Ramco Cement
7. Dalmia Cement
8. Birla Corp
9. J. K. Cement
10. India Cement

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3. COMPANY PROFILE
Malabar Cements Limited is a fully owned Government of India undertaking, synonymous
with superior quality cements, vouched by customers spread across the state. The company was
incorporated in April 1978 and commenced production in April 1984 at its Walayar plant. At
Malabar Cements, product improvement is not just a one – time strategy for boosting sales,
rather a question for excellence. They follow a mechanism, whereby they scientifically select
best raw material for clinker. Stringent quality control is exercised in pre – blending raw
materials, clinkarization, clinker grinding, and finally in cement packaging. Only Malabar
Cements can reach its cement ‘factory fresh’ without any deterioration in the original strength
either due to moisture or humidity, within 12 hours anywhere in Kerala. Malabar Cements
contributes to the developmental activities of the state by supplying the basic construction
material. With a production capacity of 6 lakh tons of cement per annum, the unit at Walayar
is the largest. As part of expansion programme, it has commissioned a 2.0 lakh tons clinker –
grinding unit at Cherthala in Alappuzha district in August 2003. Thus the total installed
capacity of MCL is 8 lakh tons. MCL is the first public sector company to receive ISO
certification and to win the National Award for the best achievement in Energy conservation.
Till date, MCL has experienced no loss of production due to labor unrest. In just over 15 years
of commissioning, Malabar Cements has been able to meet about 10% of total cement
consumption in Kerala. The housing sector is the biggest demand driver of cement, accounting
for 67 percent of the total consumption in India. Malabar Cements Ltd is located in Walayar,
in the district of Palakkad and is a fully owned Government of Kerala undertaking. MCL is the
first public sector company to receive ISO Certification & to win the National Award for best
achievement in Energy Conservation. It is the only Portland cement manufacturer in Kerala. In
the late 1970’s, the State of Kerala was nearly starving for cement as it didn’t have a Portland
cement factory. Later, in 1961-62, the Geological Survey of India located a limestone deposit
in a dense forest area in the Pandarethu valley of the Walayar region. Heavy investment was
required to mine since it was a hilly terrain. The State Govt. ventured to put up a Cement factory
in this northern side of Palakkad gap.
Malabar Cements also has the distinction of being the only grey cement manufacturer in Kerala.
MCL has been maintaining excellent operating parameters at par with global standards in
almost all areas of operations and this fact is well accepted and valued by both the department
related parliamentary standing committee on commerce(DRPSC), Government of India and

18
Bureau of Indian standards(BIS). Every year MCL contributes several hundreds of cores of
rupees to central and state exchequers by way of various statutory levies.
As part of CSR, MCL adopts and implements various social welfare activities
unfailingly. One among several of such prominent activities is the adoption of the Nadupathy
Girijan settlement at Walayar. As a responsible PSU committed to the cause of nature, MCL
constantly endeavors to keep its environment unsoiled and pollution free, Its pollution control
systems are regularly updated to contain the emission levels even well below the standards
levied by the pollution control board from time to time. MCL implements honest efforts to
guarantee clean and neat environment it emphasis more on the priority of caring the nature.
3.1 HISTORY AND MILESTONES
 1975 – Feasibility study for cement plant in Walayar
 1976 – Industrial License for the manufacture of cement
 1978 – Date of incorporation of Malabar Cements
 1981 – Commencement of mining activities
 1984 – Commissioning of Walayar Plant
 1984 – Commissioning of clinker production
 1984 – Commercial cement production started
 1994 – 43-grade OPC cement ‘Malabar Super’ launched
 1994 - New product ‘Malabar Classic’ launched
 1996 – Obtained ISO : 9002 certification, first PSU in Kerala to secure this certification
 1998 – Installation of 2.5 MW multi-fuel power generation set
 2003 – Introduction of ‘Malabar Aiswarya’ brand
 2003 – Commissioned of 600 tpd cement grinding unit at Cherthala
 2005 – Modernization of Cement Mill to close circuiting
 2007 – Introduced ERP system for integrated operation
 2010 – Switched over to Quality Certification ISO: 9001:2008-2010

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3.2 VISION, MISSION,OBJECTIVES AND STRATEGIES OF THE ORGANIZATION
3.2.1 VISION
To help in building a better habitable Kerala by providing best solution in the field of
constructions.
3.2.2 MISSION
To provide quality products and services to the public through effective intervention in the
market
3.2.3 OBJECTIVE
Manufacture and set best quality cement at affordable price to general public of the state and
to be an important part in the socio-economic development of the state
3.2.4 QUALITY POLICY
Every employee of Malabar Cements Limited commits to comply with all requirements to
continually improve the effectiveness of the Quality Management System and strives:
 To identify the various groups of customers serviced by him
 To understand their respective needs and desires either stated or not stated
 To ensure best possible quality in products and services
 To meet and exceed their expectations
3.2.5 STRATEGIES
With nearly 1000 highly skilled and learned manpower and a massive loyal dealer market and
trusted customer base Malabar Cements plans to widen its horizons to other intra-state and
inter-state markets. To make improvements in current plant structure to widen product profile
by upgrading to new technological improvements.

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3.3 PRODUCT PROFILE
Malabar Cements uses the state of the art, dry process technology for the manufacturing of
super quality cement and the quality is much above the national standards. For Various
applications, the company has three brands, ‘Malabar Super’, ‘Malabar Aiswarya’ and
‘Malabar Classic’ with Malabar Classic being the leader in total production share owing to its
demand in market.
TYPE OF CEMENT CHEMICAL NAME
Malabar Super Ordinary Portland Cement(OPC)
Malabar Classic Portland Pozzolana Cement (PPC)
Malabar Aiswarya Portland Slag Cement (PSC)
Table 3.1 Types of Cement
In line with market expectations, Malabar cements are being sold in two type of packing as
follows
 Polypropylene packing (PP)
 Laminated polypropylene packing (LP)

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4. OBJECTIVE OF THE STUDY
4.1 OBJECTIVE
4.1.1 Primary Objective
 To identify the major issue that the company is facing on lean operations with the help of
Overall Equipment Efficiency (OEE) and also some assisting analysis tools and suggest the
improvement method for problem solving.
4.1.2 Secondary Objectives
 To identify the major factor among 6 Big Losses of lean contributing to the stoppages in the
company.
 To identify which parameter causes the large stoppage in the company.
 To identify the deviation in the actual procurement and actual consumption of inventory.
 To assess the EOQ, Reorder Point and Safety Stock for the materials that ends up in stock out.
4.2 SAMPLE DESIGN
The sample data is of three years (2016-17, 2017-18 and 2018-19) of stoppages, raw materials,
production.
4.3 SOURCES OF DATA
Both primary and secondary data were used for this study.
4.3.1 Primary Data:- Primary data are those data which are collected for the first time. For
the present study the data were collected by
A) Observation method
B) Personal communication
C) Direct interview with managers, assistant managers, middle and lower level
employees, trainees.
4.3.2 Secondary Data:- Secondary data were collected from official documents like the annual
report, company profile, organization manuals, company websites, journals, research article,
magazines, government reports, etc.

22
4.4 TOOL AND TECHNIQUES USED
The tools techniques used for data analysis are as follows
A) Tables
B) Graphs
Tool used for the study are
 OEE Analysis
 6 Big Losses of Lean
 Pareto Chart
 FMEA Analysis
 Cause Effect Diagram
 Control Chart
 DMAIC Approach
4.5 LIMITATIONS
 Due to the time constrain I was not able to look in detail about each process.
 Since the company is owned by the government there is influence from the political and from
the government.

23
5. RESEARCH METHODOLOGY
Research methodology is a systematic way to solve the problems. The present study is
designed as descriptive as well as empirical in nature. It is descriptive, as it describes the state
of affairs as it exists and present. It is also an empirical one, as it collects first-hand information,
using a structured interview from different employees.
5.1 PROCESS FLOW CHART
Figure 5.1 Process Flow Chart
MCL (Malabar cements limited) manufactures cement through the most modern dry process
method. The major raw materials for cement manufacture are limestone and laterite, which are
natural minerals obtained within the state. These raw materials provide all necessary
LIMESTONE
QUARRY
CRUSHER
LIMESTONE
LATERITE
CEMENT GRADE
LIMESTONE
RAWMEAL BLENDING AND
STORAGE IN SILOS
4-STAGE PRE-
HEATING
ROTARY KILN
CLINKER COOLING
CLINKER
COAL FIRING
(1500◦C)
GYPSUM
STORAGE
FLYASH
STORAGE
CLINKER
STORAGE
STORAGE SILOS
GYPSUM FLYASH CLINKER
CEMENT MILL
PACKING DISPATCH
HOMOGENISATION
WEIGH FEEDER FOR

24
ingredients of cement like lime, silica, alumina and iron oxide. The entire manufacturing
process is computer controlled from a central control room and stringent quality control
measures are applied at all stages of production. The state of the art pollution control measures
like bag filters are also being installed. The process generally involves three stages of
production.
1. Raw meal production.
The limestone (MCL) is obtained from mines which is owned by the company. The raw mix
normally contains 85% limestone 10%cement grade lime stone and 5% laterite. The raw
materials are crushed to around 20-25 mm size and the proportioned raw materials are ground
in a ball mill in dry condition to a very fine powder. The resultant product is called raw meal
and is stored in concrete silos where it is homogenized to get a uniform product.
2. Clinker production
Clinker is produced in a rotary kiln, which is a cylindrical steel shell of 65m length and
diameter 4.2m. The kiln is set at rotating speed of 2 – 2.2 rpm. It is provided with a 4-stage
multi cyclone pre-heater system through which the homogenized raw meal is fed to the kiln
inlet by means of belt bucket elevators. The Kiln is fired with pulverized coal and maintained
at a temperature of about 14500-C-15000-C. Inthe pre-heater and kiln, the raw meal undergoes
a series of physical as well as chemical changes giving rise to the cement minerals. The
resultant product in nodular form obtained from the kiln is called clinker. Clinker is
immediately cooled to stabilize its properties and stored in the clinker stockpile.
3. Cement production.
Cement is produced by grinding 71% of clinker with 4% of gypsum in a closed circuit ball
mill to required fineness then mixed with 25% of fly ash. Gypsum is added to control the setting
properties of cement. Grinding clinker and gypsum produces ordinary Portland cement (OPC).
Fly ash with clinker and gypsum to produce Portland pozzolana cement (PPC) The ground
cement is stored in concrete silos and packed in 50 Kg bags using electronic packing machines.
Currently the company is manufacturing (PPC) cements only.

25
5.2 DEFINE PHASE: OVERALL EQUIPMENT EFFICIENCY (OEE)
In this project, the DMAIC tool Overall Equipment Efficiency is used to measure the efficiency
of equipment.
OEE measures the equipment efficiency and utilization with the help of 3 OEE factors,
Availability, Performance and Quality.
Availability
This can be defined as uptime, i.e. when the equipment is available to operate. The availability
of Raw mill, Kiln, Cement mill are measured using the collected data. The formula used for
measuring the availability of the 3 units is
𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑖𝑙𝑖𝑡𝑦 % =
𝐴𝑐𝑡𝑢𝑎𝑙 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑡𝑖𝑚𝑒
𝑃𝑙𝑎𝑛𝑛𝑒𝑑 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑡𝑖𝑚𝑒
× 100
Performance
This is the speed at which the manufacturing unit operates as a % term of the capacity of the
unit. The performance of the equipment is defined as the ratio of actual cycle time used in the
production and the ideal cycle time in which the machine can perform in ideal conditions. The
formula used for measuring the performance of the 3 units is
𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒 % =
𝐼𝑑𝑒𝑎𝑙 𝑐𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒
𝐴𝑐𝑡𝑢𝑎𝑙 𝑐𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒
× 100
Quality
The quality in OEE is defined as the ratio between the total rejected parts produced to the total
number of products produced. The formula used for measuring the quality is given below.
𝑄𝑢𝑎𝑙𝑖𝑡𝑦 =
𝑇𝑜𝑡𝑎𝑙 𝑟𝑒𝑗𝑒𝑐𝑡𝑒𝑑 𝑢𝑛𝑖𝑡𝑠
𝑇𝑜𝑡𝑎𝑙 𝑢𝑛𝑖𝑡𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑
× 100
Since the rejection of final product In the cement factory is very low, the quality rate is taken
as 97% for all the 3 units.
Measurement
The OEE calculation for the Raw mill, Kiln and Cement mill of Malabar Cements Ltd. have
been done using the excel sheet.

26
Availability Performance Quality OEE
Raw mill 50.59% 99.88% 97.00% 49.02%
Kiln 71.92% 90.95% 97.00% 63.33%
Cement
mill
55.65% 77.55% 97.00% 41.70%
Net value 51.35%
Table 5.1 Overall Equipment Efficiency
The graphical representation for the OEE is given below.
Figure 5.2 Overall Equipment Efficiency
INTERPRETATION
 The Overall OEE value of the company stands with 51.33%.
 In all the 3 units, the OEE value is mostly affected by the factor Availability.
 The performance of Raw mill unit is excellent compared to other 2 units.
 Quality in 3 units are considered 97% due to very low rejection rate.
 Cement mill shows the lowest OEE value ie. 41.70%
 Availability is the factor that causes the low OEE value in all 3 units.
The availability is the major reason for the low OEE value from the above graph.
50.59%
71.92%
55.65%
99.88%
90.95%
77.55%
97.00% 97.00% 97.00%
49.02%
63.33%
41.70%
51.35%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
Raw mill Kiln Cement mill Net OEE
OVERALL EQUIPMENTEFFICIENCY
Availability Performance Quality OEE

27
5.3 MEASURE PHASE: PARETO ANALYSIS
For identifying the factors that affect the availability of the equipment, I have used the tool
6 Big Losses of lean operations. The entire stoppage details have been categorised into 6
groups namely Equipment Failure, Setting & Adjustment, Idling & Minor stoppages, Reduced
Speed, Process Defects and Reduced yields. The 6 Big losses stoppage details of Raw mill,
Kiln, Cement Mill for the past 3 years is given below.
Table 5.2 Pareto Analysis
Then the pareto analysis is being done to identify the major factors that contribute to the
availability issue. The pareto chart obtained from the 6 Big Loss classification is as follows.
Figure 5.3 Pareto Analysis
INTERPRETATION
 The Pareto graph shows that 69.25% of entire stoppage in the company is due to
Setting & Adjustment.
 25.38% of the stoppage is contributed by equipment failure.
 Only 5.37% of the stoppage is contributed by Idling & minor stoppages.
 94.63% of total stoppages in the company is due to Setting & Adjustment and
Equipment failure.
69.26%
25.37%
5.37%
0.00% 0.00% 0.00%
69.26%
94.63% 100.00% 100.00% 100.00%
100.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
Setting &
Adjustment
Equipment
failure
Idling & minor
stops
Reduced speed Process defects Reduced yields
PARETO ANALYSIS
Series1 Series2
FACTOR
STOPPAGE
(hrs)
Equipment failure 8315
Setting &
Adjustment 22696
Idling & minor
stops 1760
Reduced speed 0
Process defects 0
Reduced yields 0

28
5.4 ANALYSE PHASE: FAILURE MODE & EFFECT ANALYSIS
The pareto analysis defines that that Setting & Adjustment loss is the major factor that
contribute to the reduction in the equipment availability. So the FMEA analysis is done in this
project to further identify the parameter that cause the large value of Setting & Adjustment
loss.
𝑅𝑖𝑠𝑘 𝑃𝑟𝑖𝑜𝑟𝑖𝑡𝑦 𝑁𝑢𝑚𝑏𝑒𝑟 ( 𝑅𝑃𝑁) = 𝑆𝑒𝑣𝑒𝑟𝑖𝑡𝑦 × 𝑂𝑐𝑐𝑢𝑟𝑒𝑛𝑐𝑒 × 𝐷𝑒𝑡𝑒𝑐𝑡𝑖𝑜𝑛
The below tabulation shows the FMEA analysis of Setting & Adjustment loss.
Table 5.3 FMEA (1)

29
Table 5.4 FMEA (2)
Table 5.5 FMEA (3)

30
Table 5.6 FMEA (4)
RPN value determines the risk in the failure mode and the failures that needs to be taken into
consider with more priority.
INTERPRETATION
 Inventory shortages are in the top position in RPN value.
 Waiting time in the company also shows high RPN value.
 Potential causes for some waiting time is lack of availability of inventory.
 Non availability of material handling equipment is being a major cause in the failure mode.
 Among the failure modes having RPN value greater than 200, 71.4% is inventory shortages.

31
5.5 CAUSE EFFECT DIAGRAM
Figure 5.4 Cause Effect Diagram
INVENTORY
SHORTAGES
MATERIALS
MACHINEHUMANENVIRONMENT
MEASUREMENTMETHOD
Availability
Quality
Poor forecasting
Component
shortages
High turnover
Space usage
ace usage
Insufficient
suppliers
Slow decision
making
Poor planning &
scheduling
Delay in tender
EOQ
Improper cycle
timing
Low safety stock
level
Inadequate lead time
Strike
Climate issues
Low performance
& productivity
Communication issue
Labour shortages
Human
interruption
Supplier inefficiency
ency
Holidays, year end
Labour productivity
Insufficient material
handling equipment
Lack of
availability
ty
Power supply
interruption
Lack of flexibility
Capacity
limitations

32
5.6 IMPROVE PHASE: INVENTORY MANAGEMENT
From the FMEA analysis, it is clear that the major problem the company facing against the
equipment availability is raw material shortages. The availability of raw materials has to be
made sure by the company to reduce its production time losses.
For improving the inventory availability in the company, the economic order quantity, safety
stock and reorder point has to be defined.
5.6.1 Unit Price
Table 5.7 Unit price
5.6.2 ANNUAL DEMAND
5.6.2.1 Consumed
Table 5.8 Material Consumption

33
5.6.2.2 Purchased
Table 5.9 Material purchased
5.6.3 CARRYING COST
Table 5.10 Carrying cost (1)

34
Table 5.11 Carrying cost (2)
5.6.4 ORDERING COST
Table 5.12 Ordering cost
5.6.5 STANDARD DEVIATION OF DEMAND
Table 5.13 Standard Deviation of Demand (1)

35

36
5.6.6 SERVICE LEVEL
Table 5.17 Service Level
5.7.7 EOQ, SAFETY STOCK, REORDER POINT
Table 5.18 EOQ, Service Point, Reorder Point

37
IMPORTED COAL
Table 5.19 Imported coal
INTERPRETATION
ECONOMIC ORDER QUANTITY 1593.5
SAFETY STOCK 437.7
REORDER POINT 1146
TOTAL COST 71731082
CYCLE TIME 61.57

38
GYPSUM
Table 5.20 Gypsum
INTERPRETATION
SAFETY STOCK 117.94
REORDER POINT 1739
TOTAL COST 15684420.4
CYCLE TIME 135.64

39
CEMENT GRADE LIMESTONE
Table 5.21 Cement Grade Limestone
INTERPRETATION
ECONOMIC ORDER QUANTITY 7281
SAFETY STOCK 816.08
REORDER POINT 4734
TOTAL COST 50272020
CYCLE TIME 73.94

40
LATERITE
Table 5.22 Laterite
INTERPRETATION
SAFETY STOCK 345
REORDER POINT 4179
CYCLE TIME 51.88

41
PETCOKE
Table 5.23 Petcoke
INTERPRETATION
SAFETY STOCK 384.96
REORDER POINT 1498
CYCLE TIME 61.628

42
FLYASH
Table 5.24 Flyash
INTERPRETATION
SAFETY STOCK 185.6
REORDER POINT 10939
TOTAL COST 179235889
CYCLE TIME 38.59

43
LINKAGE COAL
Table 5.25 Linkage coal
INTERPRETATION
SAFETY STOCK 410.66
REORDER POINT 3788
TOTAL COST 315791418
CYCLE TIME 28.99

44
5.7 CONTROL PHASE: CONTROL CHART
In control phase, we must develop a monitoring plan inorder to measure the success of the
improvements that I have made. For this, I have developed a excel control chart that give
current state of inventory.
Figure 5.5 Control chart (1)

45

46
6. FINDINGS & RECOMMENDATIONS
6.1 FINDINGS
 The company mainly focuses on Portland Pozzolona Cement.
 The important material for the cement production limestone is mined from the company owned
quarry itself which is about 6.5 km away from the company.
 As the planned annual downtime decreases, there is a tremendous increase in the breakdown.
 The performance of Rawmill is very good and it shows as average performance rate of 99.88%.
 From the OEE, availability is the major problem, the company is facing.
 Cement mill and Raw mill shows the OEE value less than 50%.
 From the pareto analysis, the setting & adjustment loss is the factor that contributes to 69.26%
of entire company shortages.
 From the FMEA analysis, the inventory shortages are in the top positon in terms of RPN value.
 Most of the waiting time is indirectly the effect of inventory shortages.
 About 40% of waiting time in the company is due to silo full/ sufficient stock. This is caused
due to the low dispatch rate of the final products.
 Factors for inventory shortages is identified with the help of Cause Effect diagram.
 Storage space for coal in the company is not satisfactory.
 The company doesn’t have any proper inventory model, Re-order point and Safety stock.
 The carrying cost for certain items is high.
 The major energy sources in the company like Linkage coal, Imported coal and Petcoke incur
large unit price compared to others.
6.2 RECOMMENDATIONS
 The EOQ, Reorder point, Safety stock & lead time should be applied for purchasing raw
materials so as to maintain optimum level of inventory and to avoid stock outs.
 The storage system of the company should be given more attention as the storage spaces are
not helpful to withstand and protect the materials from climatic issues inorder to avoid wastage.
 The company should actively follow the planned maintenance every year to avoid unexpected
stoppages.
 The despatch rate of the final product has to be improved to avoid waiting time losses.

47
7. LEARNINGS
 The internship at MCL helped me to convert the theoretical knowledge into a practical
application.
 Various tools used in the project helped me to learn more about them and how to use them in
real life.
 The usage of different tools helped me to prioritise the problems and helped me to get a clear
picture of the effect of the problem.
 DMAIC approach helped me to solve the problem in a systematic way.
 On analysing the inventory management in the company I was able to develop the proper
inventory model which help the organization to have a proper system inorder to maintain re-
order point, economic order quantity, safety stock that should be followed to reduce the cost.

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