The current Cuban company operates in an environment that makes ever greater demands on it (in volume, assortment, costs, delivery times, quality and flexibility) in the face of greater restrictions on the structure and volume of resources. The solution of this main contradiction in the activity of the company must be done by applying the philosophy that the function is to systematically raise the level of satisfaction of the increasing demands of society. To apply this philosophy, the management of the company must develop a high initiative and creativity in the search and application of new forms and methods to achieve greater satisfaction of the requirements, even in the context of reduced resources.
The tools that the company management has to solve this permanent contradiction are technical innovation and organizational improvement, aspects that cannot be applied separately. Within organizational improvement, the development of production management plays an essential role.
project-course-industrial-engineering-1Process Management aims to improve, design and operate the organization, planning and control subsystems of production systems (of goods and services), with the purpose of making them efficient, effective and competitive; from applying the most modern trends, appropriate to the peculiarities and characteristics of each company and to the requirements of the technical, political, economic and social development of the country.
The efficient work of operational planning in serial production is influenced by the appropriate choice of the size of the production lot, which has the particularity of contributing to the magnitude of the remaining regulations.
The present work developed at the Placental Histotherapy Center. Plant which is located on 173rd Street and Bride Midday Highway, several medications are produced such as: Melagenin Plus, Choriodermin, Piloactive Lotion and Piloactive Shampoo, used to cure Vitiligo, Psoriasis and Alopecia respectively. It is intended using Process Management techniques to analyze the optimal batch size of Piloactive Shampoo.
Therefore, the objectives of this work are:
- Determine the optimal production lot size of Piloactive Shampoo Determine the decision lot size of Piloactive Shampoo Determine the launch lot size of Piloactive Shampoo economically value the use of the optimal lotion of Piloactive Shampoo
For this, the method of determining the optimal lot that considers costs has been developed in Chapter II, as well as the analysis of the different costs that
Theoretical Foundation
Process Management constitutes the systematic activity of the labor collective of a productive system aimed at guaranteeing a set of methods, procedures and measures that ensure the most rational and harmonious qualitative and quantitative conjugation of objects, means and workforce in time and space. throughout the entire logistics cycle so that maximum customer satisfaction is guaranteed with high efficiency, effectiveness and competitiveness.
Serial production. Production characterized by a limited nomenclature of items produced periodically, by batches that are repeated in turn, serial production is classified into three groups: large series, medium series and small series.2
Consecutive model: It consists of all the OTs of a production batch are processed in each operation before moving on to the next one. It is inferred that this displacement model guarantees full continuity in the work of the teams or workstations, since these work continuously until the entire batch is processed. However, it does not achieve continuity in the production flow as there are interruptions because each part does not immediately move to the next operation. It is the simplest of the models but it has a longer technological cycle duration.2
Production batch: defined as the group of blanks of the same denomination and type of dimension delivered in one go or line continues to production during a determined time interval that requires the consumption of a single adjustment of the equipment. one
The adjustment of the equipment: they include all those activities that are necessary to execute for the preparation of the same, so that they can execute a certain technological operation on a specific work object.1
Total Cost (TC): Total cost of production expressed in units of value. one
C T = C F + C L + C R + C PP
Total cost of manufacturing articles (CF): these costs are those incurred regardless of the size of the lot, are produced by the expense of labor, raw materials, materials, amortization of the basic medium, contribution to social security, etc. one
C F = N * C U
N: Quantity of articles to manufacture
C U: Unit cost of manufacturing an item (pesos per unit)
Launch cost (C L): are those that vary with the number of times the item is manufactured, not depending on the size of the production lot, since these costs are caused by the activities that must be carried out to prepare for the manufacture of a certain type of article.1
C L = L * C e
L: Number of production batches to be manufactured in the period (L = N)
what
q: Production lot size
C e: Launch cost for an item production batch
The following expenses are included in C e:
Administrative expenses of technical preparation of production. Includes the inspection of plans, operational route letter, work orders, bill of materials, etc.
Expenses associated with the preparation of operations (calendar planning, launch, control, etc.).
Expenses in the adjustment of the equipment. Set up the equipment, assemble and disassemble the attachments and change the technological tools.
Specialization costs in the operation. It takes time to acquire the work rhythm, time during which there is a drop in production and they cause defective articles, all of which contribute to raising costs.
Total cost of storage (C A): these expenses are associated with the inventory level of the determined article.1
C A = S * Ca
S: Variation in time of the stock of the storage item.
Ca: Unit storage cost for the item.
The expenses included in Ca are the following:
Expenses for storing an item for one year (depreciation of construction and storage equipment, wages to maintain storage and its corresponding contribution to social security, energy costs for storage and conservation).
Resource immobilization expenses: Each item stored constitutes a means of rotation and as such an immobilized resource, within this cost, can be said to be the fundamental expense.
Cu * Ke
Cu: Unit cost of manufacturing the item.
Ke: Regulatory coefficient of cost effectiveness. It is valued at the level of interest in credits for means of rotation (its value equal to 0.12 can be taken).
Expenses for losses that occur in storage, proportional to its magnitude. one
Total cost associated with production in process (C PP): these are the expenses related to the resources in process of the items or parts not yet finished and that are in a stage of their production process. one
C PP: q T ' c * f * N * C r
D
q: production lot size
N: total quantity of item to be manufactured in the selected period.
T ' c: Expression of the duration of the technological cycle
T ' c = (consecutive displacement)
T ' c = T long (parallel displacement)
T ' c = (combined displacement)
F: Coefficient expressing the proportions of the total production cycle in relation to the technological one is equal to the inverse of the continuity coefficient
F =
D: Period of time in which the article will be manufactured in units of T ' c (natural calendar period) 1
Seriality coefficient. Identifies the type of production of a job, process or productive subdivision. The calculation expression is:
where:
Kof - seriality or part coefficient per station
O - total number of pieces per operation
P - total number of jobs
Performance dynamics. It demands that the organization of the adopted production guarantees a systematic growth of the efficiency indicators, as well as, raising the labor content of the workers and achieving safe and appropriate working conditions. The efficiency indicators are: production volume, production cost, productivity, delivery time.
Reliability. It requires the operation of the production system for a long period without affecting the outcome variables, which are, assortment, volume, quality, costs and time.
INDICATOR: Consecutive number of months in which the production plans in assortment, volume, quality, costs and term are fulfilled. two
Stability. It demands to adopt a production organization that allows to foresee and prophylactically solve the problems that arise without the need for the intervention of higher levels.
INDICATOR:
Where:
- average production per interval
s - standard deviation of that average production
s / X - is the coefficient of variation (r in the statistical packages) 1
CHAPTER I CHARACTERIZATION OF THE STUDY OBJECT
1.1. - Main Data about the Center
Center Name: Placental Histotherapy Center.
Center Location: 173rd Street and Girlfriend of Midday Highway, Valle Grande La Lisa Esq. 43 18th street Beach
Code of the Political-Administrative Division: 300.0.7310
Approximate extension: 25,000 m
Number of workers: 175
Social Mission:
The Placental Histotherapy Center, in Havana, Cuba is an institution dedicated to the search for new medicines and cosmetics from the human placenta. It was created on April 25, 1986.
Currently the center is made up of two areas dedicated to the following activities:
Research and Clinical Services:
- Clinical services for Cuban and foreign patients affected by Vitiligo, Psoriasis and Alopecia. Search for new drugs and cosmetics in the human placenta. Optimization of currently established treatments for Vitiligo, Psoriasis and Alopecia. Post-graduate medical teaching.
Business and Production Management:
- Marketing of products derived from the human placenta Production of drugs, cosmetics, nutrients and diagnostics extracted from the human placenta, Technological scaling of new products.
Values that the Center creates annually:
MN: 1079.84 MMP MLC: 1042.8 MMUSD
Clinical Plant
Production of medicines: Production of medicines:
MN 940.6 MP MN: 139.24 MP
MLC 414.2 MUSD MLC: 440.6 MUSD
Inquiries: 93.2 MUSD
Treatments: 94.8 MUSD
1.2. - Description of the production process of Piloactive Shampoo
The Piloactive Shampoo production process begins with the step of receiving and weighing the raw material, from there it goes to the area of reactors where the base is formed and later the active ingredient is added, which is obtained in an auxiliary process within another production line. This addition process is carried out in three parts, that is, three additions are made with their respective mixing times; from here samples are taken to analyze the product in the chemistry, biology and microbiology laboratories. When the batch is received, it goes to the filling area where the product is packed in 200 ml bottles and is subsequently labeled and packed. A production batch is made up of 10,000 units.Subsequently, samples are taken for batch release and the product is stored in the production warehouse in process until the batch is released and transferred to the finished product warehouse where the production cycle ends.
1.3 Characterization of the productive system
For the characterization of the Piloactive shampoo production system in the placental hysteria, it is necessary to establish a correlation between the external and internal factors that determine it, the main ones being: (See Annex 5)
External factors:
The demand, although its magnitude is not known, behaves greater than the capacity, mainly because it is a product that can be used both as a medicinal and cosmetic pharmaceutical product and this possibility is not exploited at the border.
The number of consumers who demand this product is few. This is motivated by the fact that this product is marketed in the national territory as a medicine and distributed only to the population through EMSUFARMA. In addition to this national distributor, the main consumers are the exporter Heber BIOTEC in charge of international sales and distribution, as well as the clinic of our own center, which is the raison d'être of our production plant and, logically, our main client.
Demand behavior is uniform given fundamentally that you have three fundamental clients and the rest of the demand behaves as a percentage of the demand of regular clients.
The trend of design in relation to fashion is very stable because the design of the product is the same, basically it only changes, the text, in relation to the language of the destination country or some requirement of a certain client in relation to rules, regulations, etc. according to the destination of the product.
Internal factors:
The Piloactive shampoo production type is large series because the seriality coefficient has been calculated and a value of 1.33 was obtained as a result. (See annex 4 seriality coefficient)
The duration of the production cycle is long because it depends on laboratory tests both chemical-physical, biological and viral, which in many cases delays the result of these from 2 to 3 days, also before declaring the product as a finished product, they are carried out new laboratory tests taking up to one more day.
The conservation of the product is carried out in storage conditions that require air conditioning between 20 and 25 ° C, in addition to being a perishable product which has an expiration or expiration date of 3 years.
The means for moving the material are flexible. Among which are manual trucks, forklifts, wooden boards, etc.
The displacement modelFollowing the production process of Piloactive Shampoo, it can be said that it is a model of consecutive displacement in that each production batch is fully processed in each operation before proceeding to the next. This is basically conditioned by one aspect, because they are pharmaceutical products for human use, in which rigorous parameters of a biological and chemical type are required, therefore, after each operation, samples of the product must be taken and laboratory analysis performed. Only after the product meets these values is it possible to continue with the next operation,for example, after the product passes through the reactor area where the base is made and the active ingredient is added until the approval of the quality department is obtained, this batch does not go to the filling and packaging area in which samples are taken. again of physical chemical type to be able to pass the product from product in process to finished product. (See annex 12)
1.4 Classification of the productive system
The Piloactive shampoo production system is classified as follows (See annex 6):
Regarding the producer-consumer relationship, the production of Piloactive Shampoo is classified as counter-existence because the product line is standardized, the production system consists of maintaining the inventory for future orders and not for current orders, these are supply with stocks. In addition to the fact that demand is not known with a high degree of accuracy, there is in some cases little correlation between orders and what is produced.
The way to execute production is programmed because production is programmed in relation to the historical behavior of the product and with the objective of maintaining a certain level of inventory, even when the totality of the demand that can be translated into real orders is not known. In a certain period, if the historical behavior of our main clients is known, so that together with the above, it is possible to plan production, each launch is also made with the same batch size.
The element to optimize is the raw material because they are imported products in addition to their high cost in foreign currency.
1.5 Analysis of technical-organizational requirements
The technical-organizational requirements that must be analyzed are performance dynamics and reliability that can be analyzed in all types of systems and the stability that corresponds to a system that works against stocks.
Performance dynamics
For the analysis of the performance dynamics, the values of cost by weight and labor productivity from January 2002 to February 2003 were taken (See annexes 7.8)
In the behavior of cost by weight (See Annex 7) it can be seen that it had a downward development during the period from January 02 to March 02 and an upward growth in the period from July 02 to February 03.
In the period from April02 to June02, an abnormal behavior of the cost by weight is observed due to the fact that at this time the plant was in an investment process that considerably raised costs and production during this time was practically nil.
Another efficiency indicator that was used to analyze the performance dynamics was labor productivity (See Annex 8) which in the first quarter of 2002 behaved in a stable way despite the month of January. In the second quarter there is a considerable decrease in labor productivity, this is motivated as explained above to the investment process that took place in those months, even, it can be seen that negative values are taken, which is the product of the way in which It is calculated as a parameter which is the result of dividing the Variable Added Value by the average of workers. In turn, added value is the result of subtracting from gross production the consumption of material and the services received.Therefore, when the level of production decreased in these months and the consumption of material and services received increased considerably, the moment came when the added value was negative and therefore the productivity of labor also took this sign.
This same process allows productivity to take maximum values in the subsequent quarter, as material consumption and the services received decrease appreciably. In the last quarter of 2002 and the beginning of 2003, labor productivity behaves in a stable way, oscillating between 1500 pesos per worker.
Reliability
To perform the reliability analysis, the percentage of compliance with the sales plan was used in the period from January 02 to February 03 (See Annex 9).
The percentage of compliance with the sales plan behaved negatively in the period analyzed, the plan was only fulfilled in the months of July, August and September 2002. This was motivated for the most part in the way in which the sales plans, which are carried out empirically by specialists in the area, taking as a reference the sales of previous years and the probable requests for the coming year.
Stability
For the stability analysis, sales by months made in the period January02 to February03 are used. These values were tested for normality with a confidence level of 95%, calculating the mean and standard deviation. (See annex 10)
This result shows us a low stability.
When analyzing this result, it gave the following problems:
- Problems with production planning Problems with technical material supply Differences in product rotation at certain times Problems with information flow
These problems were evidenced by the fact that there are last minute orders that cannot be made due to the time they are ordered or the size of the order, etc., the non-existence at certain times of the product in the warehouse, etc.
Added to this are difficulties with the supply of the raw material, which is largely imported. Another important aspect is the flow of information, which does not offer guarantees of being able to contribute to greater production and sales management.
CHAPTER II Determination of the optimal batch size of Piloactive Shampoo
2.1. - Minimum Cost Method
When we are talking about total cost, it may exist that this function is made up of several terms dependent on a common variable.
There are situations where one or several terms are in direct relation to the total cost while others are in inverse relation. This means that an increase or decrease in this variable will cause opposite effects on the total cost.
If we take the size of the production lot as an independent variable within the total cost function, we will be in one of the situations previously exposed. The task then is to determine the value of this variable that minimizes the total cost. (Appendix 1)
In order to obtain the objective of calculating the optimal lot size, it is necessary to take into account the effect caused by various factors that directly or indirectly influence this aspect. These factors include: the labor expense required in adjusting the equipment; the physical capacities of intermediate storage (area and technical means) existing, the value of the circulating means of the company; the complexity of the item or part to be manufactured and its technology; the reason or rate of consumption of the item that is manufactured by the shop or consuming productive subdivision; the characteristics of the jobs (productivity, quantity of articles or pieces that are made simultaneously, the resistance of technological tools that as devices, attachments may exist).
As it is necessary to seek adequate compensation among them, the economic effect that these factors have will be used, since each one of them causes a certain expense that will vary in magnitude as the size of the production lot varies.
The method we will use is the one that considers the costs (storage, launch and production in process). Taking into account the elements that affect the total cost of serial production when manufactured against warehouses.
2.2 Determination of the optimal batch size of Piloactive Shampoo
Determining the optimal lot size is based on the total product cost formula.
C T = C F + C L + C R + C PP
Where:
C F: total manufacturing cost
C L: total launch cost
C R: total cost of storage
C PP: total cost of production in process
This formula expressed according to the size of the lot is:
C T =
To determine the size of the lot (q) there is the first derivative with respect to (q) of this expression, leaving:
=
Equalizing to zero and clearing to (q)
Substituting the values obtained in the area of economy:
Ca = 0.35
Cr = 1,332
Cl = 2713.06
Tc * F = 25.5
D = 756000
N = 260000
Therefore the optimal lot size on the Piloactive Shampoo production line is 7722 bottles.
2.3 Lot decision
Once the economic or optimal lot size is calculated, it is necessary to adapt this number to the specific conditions of the production system, taking into account aspects such as storage capacity, which must be greater than the size of the lot to be manufactured, production monthly, the capacity of the unifying load means which contributes to the efficient and effective use of these and the means of transport used, as well as the characteristics of the product, since it must be taken into account if the product is perishable over time of storage must represent a small fraction of the expiration time of the same, in addition the size of the batch to be manufactured or decision could be related to the production capacity of a day or a shift.all this conditioned on the fact that the quantity of batches to be manufactured is an integer.
When analyzing these aspects, 2 variants were reached, which in turn lead us to 2 different decision lot sizes. These, in both cases, are in a neighborhood of the calculated optimal lot size.
The first variant analyzed was to take all the sales made between January 02 and March 03 (eliminating the months of February 02 to May 02, since these months respond to a special situation and could distort the result of the analysis and its subsequent use) with the aim of bringing production closer together. at monthly sales levels, this would allow products to be in stock for the minimum amount of time possible and ensure that the expiration date is as far away from the time in stock as possible, even when the product's expiration time is 3 years. At this level of sales by months, the average was found and added 30% to supply fluctuations and a safety inventory, from which the following result was obtained:
Average Monthly Sales: 19615
Plus 30%: 25 892
This quantity represents:
| Number Releases per months | Lot size Decision |
| 3 | 8630 |
| 4 | 6473 |
The second variant analyzed allows an efficient and effective use of the unifying means of loading with which an optimal use of the storage capacity as well as of the means of transport is obtained. It consists of bringing production closer to an integer number of parts in which the product is stowed. The partitions used are standard measures of 100 x 120 cm in which 5 floors are stowed with 15 boxes each containing 25 bottles.
Therefore the capacity of each parle is:
5 floors / parle x 15 boxes / floors x 25 jars / box = 1425 jars / parle
reason why when approaching this capacity to the calculated optimal lot size we have:
| Number of parles | Lot size Decision |
| 5 | 7125 |
| 6 | 8550 |
2.4 Launch Lot
Once the decision batch has been calculated or determined, it is necessary to calculate the launch batch, which will allow the desired quantity to be obtained at the end of production. That is to say that to the calculated decision lot it is necessary to add the losses during the process.
Therefore these losses are:
Loss in Reactor area 0.20%
Loss on fill 5.00%
Loss in container 0.20%
Total 5.40%
For this the following balance equation is used:
Q i E i Q f
X i
Q i =
Where:
Q i: Quantity of product that reaches the process i
E i: Process i
Q f: Quantity of product that leaves the process i
X i: Losses of the process i
Therefore, the losses are added to the values calculated for the decision lot and this represents the launch lot, leaving:
| Decision Lot | Container | Fill | Reactors | Launch batch |
| 8630 | 8648 | 9104 | 9123 | 9123 |
| 6473 | 6486 | 6828 | 6842 | 6842 |
| 7125 | 7140 | 7516 | 7531 | 7531 |
| 8550 | 8568 | 9019 | 9037 | 9037 |
From here a launch batch is obtained for each decision lot.
CHAPTER III Analysis of alternatives and Economic Evaluation
From the results of the previous chapter, each of the alternatives obtained is evaluated and then the economic analysis of this result is carried out against the system currently in use. Therefore, to carry out this analysis, we use the total cost formula in which the decision lot values are substituted in order to determine the cheapest.
The decision lot sizes obtained were as follows:
| Lot size Decision |
| 8630 |
| 6473 |
For the first alternative and
| Lot size Decision |
| 7125 |
| 8550 |
For the second.
Therefore, if we start from the total cost formula and the number 7722 was obtained as the optimal lot size, the most economical decision lot must result in a neighborhood of this number because the function changes on both sides of this number (See Annex 1) Therefore, to carry out the analysis, the values closest to 7722 are taken on the right and on the left.
As you can see the numbers closest to 7722 above and below are those of the second alternative 7125 and 8550 bottles.
Substituting these values in the total cost formula we have:
CHAPTER IV Conclusions
- - The optimal lot size was calculated through the total cost formula and it was determined that it is 7722 bottles. - Analyzing all the factors involved, as well as economically the alternatives of this, the decision lot size was determined. which is 7125 bottles. - Taking into account all the losses of the Piloactive Shampoo production process, from the decision lot the size of the launch lot was obtained, which should be 7531 bottles. - When evaluating economically the use of the optimal lot was collected as a result that an amount equivalent to 5 203.6 pesos is lost when using the current lot size.
Bibliography
- Taboada, R. Carlos and others. Organization and Production Planning. First part. Ed. People and Education. Havana City, 1987. Fundora, M. Albertina and others. Organization and Production Planning. Second part. Ed. MONTH. Havana, 1987. García GJ; Acevedo. Suarez; Industrial Economics Manual 2
Fundora, M. Albertina and others. Organization and Production Planning. Second part. Ed. MONTH. Havana City, 1987.
2 Taboada, R. Carlos and others. Organization and Production Planning. First part. Ed. People and Education. Havana City, 1987
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