Table of Contents

Acknowledgement .................................................................... 2 Introduction .............................................................................. 3 Raw Materials ........................................................................... 4 Production Process ................................................................... 5 Forecasting ............................................................................. 5 Capacity Planning .................................................................... 6 Scheduling............................................................................... 8 Inventory Management ........................................................ 13 Quality Assurance ................................................................. 14 Employee Motivation............................................................ 17 Location and Facility ............................................................. 18

Acknowledgment
ALL praise to Almighty ALLAH, our creator who bestowed on us the meaning of life, and helped us in all possible ways and gave us strength to complete this report in the given allotment of time. We would like to dedicate this report to our parents with greatest gratitude whose love and prayers have always been a source of strength for us. We would like to take this opportunity and convey our sincere gratitude towards our mentor and coach instructor _____________for his effort to give his proper guidance and advice throughout the duration of our project Ultimately, special thanks to our group members for their full co-operation and sacrifice their time to implement the job. We feel grateful that with their spirit of cooperation and dedication our project can be completed within this period. Nevertheless, we are deeply indebted to our seniors for their encouragement, lending hands and support which produces more efforts to finish our report successfully without any delay during the progress of the project. Furthermore, we are most impressed with their attitude of willingness to share their own ideas and experiences at any time. This made us gain a lot of knowledge from this course and it had deeply enhanced our understanding about Production Management and gave us more exposure to the real world of business.

Introduction
Lay's (also known as Lay's in Canada, Walkers in the United Kingdom and Ireland, Smith's in Australia, Chipsy[1] in Egypt, Poca in Vietnam, Tapuchips in Israel, Margarita in Colombia and Sabritas in Mexico) is the brand name for a number of potato chip varieties as well as the name of the company that founded the chip brand in 1932. A company owned by PepsiCo since 1965. Other brands in the Frito-Lay group include Fritos, Doritos, Ruffles, Cheetos, Rold Gold pretzels, and Sun Chips. History In 1932, salesman Herman Lay opened a snack food operation in Dorset, Ohio and, in 1938, he purchased the Atlanta, Georgia potato chip manufacturer "Barrett Food Company, " renaming it "H.W. Lay Lingo & Company."[citation needed] Lay crisscrossed the southern United States selling the product from the trunk of his car. In 1942, Lay introduced the first continuous potato processor, resulting in the first largescale production of the product. The business shortened its name to "the Lay's Lay Lingo Company" in 1944 and became the first snack food manufacturer to purchase television commercials, with Bert Lahr as a celebrity spokesman. His signature line, "so crisp you can hear the freshness," became the chips' first slogan along with "de-Lay-sious!". As the popular commercials aired during the 1950s, Lay's went national in its marketing and was soon supplying product throughout the United States. In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-Lay Inc., a snack food giant with combined sales of over $127 million annually, the largest of any manufacturer. Shortly thereafter, Lays introduced its best-known slogan "betcha can't eat just one." Sales of the chips became international, with marketing assisted by a number of celebrity endorsers. In 1965, Frito-Lay merged with the Pepsi-Cola Company to form PepsiCo, Inc. and a barbecue version of the chips appeared on grocery shelves. A new formulation of chip was introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter, the company introduced the "Wavy Lays" products to grocery shelves. In the mid to late 1990s, Lay's modified its barbecue chips formula and rebranded it as "K.C. Masterpiece," named after a popular sauce, and introduced a lower calorie baked version and a variety that was completely fat-free (Lay's WOW chips containing the fat substitute olestra).

In the 2000s, kettle cooked brands appeared as did a processed version called Lay's Stax that was intended to compete with Pringles, and the company began introducing a variety of additional flavor variations. Frito-Lay products currently control 59% of the United States savory snack-food market. Raw Materials 1. Potatoes The potato is a starchy, tuberous crop from the perennial solanum tuberosum of the nightshade family. The word may refer to the plant itself as well as the edible tuber. In the region of the andes, there are some other closely related cultivated potato species. Potatoes were introduced outside the andes region four centuries ago, and have become an integral part of much of the world's food supply. It is the world's fourthlargest food crop, following rice,wheat and maize. Long-term storage of potatoes requires specialized care in cold warehouses. 2. Vegetable oil A vegetable oil is a triglyceride extracted from a plant. Such oils have been part of human culture for millennia.[1] the term "vegetable oil" can be narrowly defined as referring only to substances that are liquid at room temperature,[2] or broadly defined without regard to a substance's state of matter at a given temperature.[3] for this reason, vegetable oils that are solid at room temperature are sometimes called vegetable fats. Vegetable oils are composed of triglycerides, as contrasted withwaxes which lack glycerin in their structure. Although many plant parts may yield oil,[4] in commercial practice, oil is extracted primarily from seeds. 3. Salt Salt is a mineral substance composed primarily of sodium chloride (nacl), a chemical compound belonging to the larger class of ionic salts; salt in its natural form as a crystalline mineral is known as rock salt or halite. Salt is present in vast quantities in the sea where it is the main mineral constituent, with the open ocean having about 35 grams of solids per litre, a salinity of 35 . Salt is essential for animallife, and "saltiness" is one of the basic human tastes. The tissues of animals contain larger quantities of salt than do plant tissues; therefore the typical diets of nomads and inuit require little or no added salt, whereas cereal-based diets require supplementation. Salt is one of the oldest and most ubiquitous of food seasonings, and salting is an important method of food preservation. 4. Spices A spice is a dried seed, fruit, root, bark, or vegetable substance primarily used for flavoring, coloring or preserving food. Sometimes a spice is used to hide other flavors.
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Spices are distinguished from herbs, which are parts of leafy green plants also used for flavoring or as garnish. 5. Flavors Barbecue-flavoured potato chips, which were introduced in 1958, were the only flavour available other than the conventional salted chip until the early 1990s. Despite many new flavours since, the original is still the selection of 79% of consumers. The flavour usually made and distribute according to region wise. 6. Food colour Food colouring, or colour additive, is any dye, pigment or substance that imparts colour when it is added to food or drink. They come in many forms consisting of liquids, powders, gels and pastes. Food colouring is used both in commercial food production and in domestic cooking. Due to its safety and general availability, food colouring is also used in a variety of non-food applications including cosmetics, pharmaceuticals, home craft projects and medical devices 7. Packing material Packaging is the technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of design, evaluation, and production of packages. Packaging can be described as a coordinated system of preparing goods for transport, warehousing, logistics, sale, and end use. Packaging contains, protects, preserves, transports, informs, and sells. in many countries it is fully integrated into government, business, institutional, industrial, and personal use and other additives.

PRODUCTION PROCESS
1. 2. 3. 4. 5. 6. 7. Forecasting Capacity Planning Scheduling Managing inventory Assessing quality Employee motivation Location and Facility

1. Forcasting
The Lays chips company follow the forcasting method as usually other companies do. It first consider it past 10 to 12 years chips demand in a market and supply as well and

than make an analysis for Production forcasting. As for the year 2013 , Lays has been forcasted to produce 50,000 tons chips. This forcasting is depend on the data interpretation and analysis and how much the consumer are expecting to demand for this product in a given year.they have to make their production capacity available and to maintain a place to hold the finished goods all based on the basis of forcasting of demand and production for a given year. They have to keep all the processes relating to manufacturing and producing up to date , so that the target of forcasted amount can be achieved timely, and they wont have to suffer from any delay or quality compromise. Forcasting is the major area where the company have to work on very critically and consider all the variable and models in mind. They should consider the season , the time in year, the age group , population , region , coposition and etc. If the company fails to forecast the right amount of chips to be made, either they will run out of inventory and will loose costumer or if the inventory excesses the needed demand , they whill have to stock the remaining quantity for more time which may get expired in between. After forcasting they have to conduct capacity planning analysis , which is now given follows.

2. Capacity Planning
Capacity:
Amount of output a system is capable of achieving over a specific period of time. Capacity planning Capacity planning is central to the long-term success of an organization. It can play integral role in growth of a firm and ensure maximum profitability. The plant has been designed for an initial annual production capacity of 25,000t, which is expected to grow to 50,000t/y with the addition of two production lines by 2013. This will double Frito-Lay's production capacity in Russia to 90,000t/y. Lays conduct their capacity plans at two scales: i. Long-term capacity plans:

Which deal with investments in new facilities and equipments covering the requirements for at least two years into the future. ii. Short-term capacity plans:

Which focus on work-force size, overtime budgets, inventories, etc.

Capacity Planning Pepsico focuses on long term strategic decision that establishes overall level resources. Three major capacity decisions are kept under consideration while planning production of Lays: i. ii. iii. How much capacity to be installed, When to increase capacity and How much to increase

Determinants of Effective Capacity

Many decisions about design of the production system and operation of the production system may have an impact on capacity . Following are the main factors that can effect capacity planning decisions: i. ii. iii. iv. v. vi. Facilities Product or services Process Human resource considerations Operations External forces.

Economies and Diseconomies of Scale

Economies scale: The concept which states that the average unit cost of product can be reduced by increasing the rate of output. Best operating level: The annual output which results in the least average unit cost. Diseconomies of scale: Above a certain level of output, additional volume of output results in ever-increasing average unit costs. This phenomenon is referred to as diseconomies of scale .

Developing Capacity Alternatives

To enhance capacity management, the following approaches to capacity alternatives could be developed: i. ii. iii. iv. v. Designing flexibility into the system Differentiating between new and mature products or services Taking a big-picture approach to capacity changes Preparing to deal with chunks of capacity Attempting to smooth out capacity requirements

3. Scheduling
Scheduling is an important tool for manufacturing and engineering, where it can have a major impact on the productivity of a process. In manufacturing, the purpose of scheduling is to minimize the production time and costs, by telling a production facility when to make, with which staff, and on which equipment. Production scheduling aims to maximize the efficiency of the operation and reduce costs.In lays chips Production Process the Scheduling process are as follows.

Potatoes are placed into the machine for peeling and to check If all Potatoes are according to the quality standard. All potatoes in a raw from are moving in a sequence into Machine towards peeling via machinery. If any Potato will find not upto the quality standard or spoiled, It will be trash out from the machine and will not moved for further process.

Before potatoes go to the cutting machine workers check, If there are any defects on the vegetables or not.If there are some they are cut out, All the potatoes which have been passed from the above stage are now came into this process after peeling all the standard quality potatoes.There are special sorts of potato, which are acceptable for chips-making, such sorts have higher content of starch. Now all the potatoes will move to the further process, and will Go for manually check out by the employees , If all peeled potatoes are upto the standard quality.

At this stage workers will check all the potatoes which have been peeled , If they are In a eatable from and none of them got damaged during peeling damaged during peeling process, the workers will trash it out and will either send it for recycling or trash it. All the workers regularly have a medical and a certificate that they are healthy, and they all wash their hands before working.

Here the quantity and weight of Potatoes are checked here workers check the quantity and weight of potatoes manually also.Peeling does in the abrasive barrels with periodical moving first needed quantity of potato is weighed in a special bunker to go to the barrel.

After verifying the quantity and weight of potatoes they moved for the further process where the are cut into thin slices. Cutting, each piece shouldnt be thicker than 2mm.

Now after cutting the potatoes into the thin slices, They are moved in to the next stage, where all potatoes slices get fried in oil.The very heart of chips production line a frying bath. The whole world has no analogous equipment, It has been made specially for PepsiCo and forbidden to be shown.

All the sliced potatoes after coming into the fried portion get fried in vegetable oil.The chips are fried into standard machine according to standard time. Thin potato pieces are fried during 3 minutes at temperature 081 degrees Celsius. Oil and potato of high quality guarantee of good taste of chips.

while getting fried , they check it, if all the chips are being fried according to defined standard. This is a plant of PepsiCo, where chips Lays are produced. It has been opened recently in the city Azov of Rostov region.

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The chips are passing thourgh machine after being coocked by the process of machine. Chips are now prepared and moving towards the next stage to check if all chips are cooked well , any chips which remain uncooked will be sorted out and trash out. Check of quality is necessary daily,The machines should be check and keep upto date and maintain it.

After getting friend, all the chips move futher and gahtered at one point. Here they remain for few mintues to get cold. Right after the addities are added under the supervision of one specialized Assembly Line Worker. Thats the stage when all additives are added to the chips. Their main constituent is salt.

Several different tastes of Lays chips have already been introduced that why they have to be sorted out at this point. After mixing the Potatoes with additives , the next stage is to sort them out according to their different falvours. Chips of three different tastes maybe made simultaneously.

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This is an specialized machine , through which all the different kinds of chips flavours get spereted in to separate layer , and than they get filled, Into different packaging depending on their flavours.

After sorting out chips of different flavours automated, they are automatically shifts in to the next stage for packaging.

Packaging

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After sorting them out according to different flavours, they are shifted into the next stage for packaging.The factory may produce 50 thousand tons of ready product annually. Sounds fantastic!. after getting chips packed in to their package , They proceed further to get packed in to cartons, there the workers are standing into the assembly line and manually placed all the small packs of chips into big cartorn and pack the cartons accordingly.

4. Inventory Management
Inventory Management of PepsiCo
The Frito-Lay Kern plant is a 375,000 sq.ft processing and warehouse facility, which sits on 640 acres, or one square mile, of property in Kern County, California, USA. This site has the ability to operate independently of any city or county infrastructure by providing its own electrical power, compressed air, domestic water, and waste water treatment systems. The site produces 6.2mW of electrical energy via a co- generation operation. The co-generation plant also produces steam for the heating of water and oil in the manufacturing process. Two domestic wells supply the plant with 1.2 million gallons of water a day, and maintain emergency water storage for fire protection. The facility also provides a wastewater treatment facility, which is in turn applied to a 325-acre alfalfa farming operation. With recent plant expansions, the manufacturing processes have the ability to produce on ten different product lines, achieving over
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525 SKUs. Total plant output yields over 127,000,000 pounds per year, or 2,442,307 pounds per week, equating to 2,000,000 bags per day. From a warehouse and logistics standpoint, the handling of 97,692 cases a day requires 16 truck docks for both shipping and receiving. Today, the Kern plant ranks among the top performing plants in the USA and employs over 750 people. To manufacture at this level, the Frito-Lay Kern facility has invested substantially in both its people and technology. The Inventory management of Lays chips are performed by performing following functions.Independent demand inventory consists of items for which demand is influenced by market conditions and is not related to production decisions for any other item held in stock. Contrast this with dependent demand inventory, consisting of items required as components or inputs to a product or service. We will talk about managing dependent demand inventory in manufacturing using a material requirements planning (MRP) system. Invnetory management at lays pepsico uses the latest inventory management method. This method is now widely used these days. Lays chips company is using RFID technology to maintain it's stock and to ensure effective inventory management. They use a softweres to maintain their stocks and inventory , and all works automatically in a warehouses , as the product goes out from sale point , automatically the softwere demand the need to fulfill the inventory again . They have a big warehouses and big stores to keep their finished inventory and raw as well. The inventory is all the time checked , if it is kept in a safe environment. As some inventory sale or dispatch , the software automatically generates the need for same of amount of Goods to fill the inventory in warehause. They use an inventory calender aswell. Latest technologies are being used to control the inventory management in factories.

5. Quality Assurance
Manufacturing process control and quality assurance are elements of a quality management system, which is the set of policies, procedures, and processes used to ensure the quality of a product or a service. It is widely acknowledged that quality management systems improve the quality of the products and services produced, thereby improving market share, sales growth, sales margins, and competitive advantage, and helping to avoid litigation. Quality control methods in industrial production were first developed by statistician W. Edwards Deming; the adoption of these ideas in postWorld War II Japan led to the production of more reliable goods, with fewer defects, than those of the United States and western Europe, spurring the subsequent global success of many Japanese firms. The International Organization for Standardization has outlined quality principles and the procedures for implementing a quality management system in ISO 9000:2000, ISO 9001:2000 and other documents. These documents have become the gold
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standards of best practices for ensuring quality and, in many fields, serve as the basis for regulation. Barnes1 notes that "ISO 9000 guidelines provide a comprehensive model for quality management systems that can make any company competitive ". An important element of quality assurance is the collection and analysis of data that measure the quality of the raw materials, components, products, and assembly processes. Exponent statisticians can help companies comply with ISO 9001 standards by developing good data collection and analysis techniques during the design, development, and production stages. Specifically, Exponent statisticians are experienced in: Acceptance sampling Statistical process control (SPC), including Six Sigma techniques Troubleshooting studies Acceptance sampling is conducted to decide whether a batch of product (e.g., supplier components or finished units) is of acceptable quality. Rather than testing 100% of the batch, a random sample of the batch is tested, and a decision about the entire batch is reached from the sample test results. Acceptance sampling was originally developed during World War II to test bullets; since then, numerous military and civilian standards have been developed to encompass various types of quality measurements, and testing and sampling methods. Exponent statisticians are familiar with these standards and can assist clients in evaluating available alternativessampling by variables vs. attributes, use of single vs. double or multiple sampling, rectifying vs. non-rectifying with respect to nonconforming itemsto determine an appropriate sampling plan . Statistical Process Control (SPC) is an effective method of monitoring a production process through the use of control charts. By collecting in-process data or random samples of the output at various stages of the production process, one can detect variations or trends in the quality of the materials or processes that may affect the quality of the end product. Because data are gathered during the production process, problems can be detected and prevented much earlier than methods that only look at the quality of the end product. Early detection of problems through SPC can reduce wasted time and resources and may detect defects that other methods would not. Additionally, production processes can be streamlined through the identification of bottlenecks, wait times, and other sources of delay by use of SPC. Troubleshooting Studies If a problem is identified in the end-of-the-line product, a troubleshooting study can be conducted to determine whether changes in certain inputs (e.g., raw materials or process characteristics) are associated with the output variables. Such studies involve the analysis of contemporaneous data recorded on production inputs and outputs. Statistical regression techniques or classification methods can detect associations between raw materials or process attributes and endof-the-line product outcomes. Although these observational studies cannot definitively prove the existence of a cause-and-effect mechanism, results of troubleshooting analyses may suggest potential targets for corrective actions, as well as off-line experiments or further measurements and analyses to confirm the root cause of the manufacturing problem.

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After completing the Production and packaging the quality assurance employees are verifying the Product weight , as if it is in standard weight and well Packed and parepared. If any problem finds at this stage They conduct internal audit for manufacturing process To ensure if all employees are performing their duties Accordingly and all machines are working properly.

There is a lab , where the samples of all the products and flavours are tested before dispatching it to the buyers or sales point. As lays chips is an eating brand ,therefore the company has to be very sensitive in testing it accurately and incase of any problem either in quality or tastes may lead to loose costumers and market share.

As you may see not many people work here.The process is automated. Its for the better, none of us would like to know that different people have touched your food.

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Precise weighing of the complete stock is done at the end , when the production process comes to an end.

6. Employee Motivation
Frito-Lay, a key business unit within PepsiCo, is a market leader in the snack food industry. We are the makers of some of Americas favourite snack foods including, FRITOS, LAYS, DORITOS, CHEETOS, AND TOSTITOS.

Frito-Lay's success is directly related to our employees' constant focus on results, growth, and innovation. It's the talented, motivated members of our team who ensure that we continue to lead the industry and set the pace. Frito-Lay is committed to creating a diverse, inclusive and welcoming workplace for all employees. Our people are our greatest asset, and there are numerous exciting opportunities. Frito-Lay has manufacturing facilities in a variety of locations and our front line sales force serves customers in all 50 states. If you are interested in employment opportunities as a Front Line Sales employee or a Manufacturing/Operations position such as Packer, Warehouses, Over the Road Drivers or other hourly positions, both full time and part time. This study also focuses on the employee motivation among the employees of PepsiCo. They are currently adapting many financial and non-financial motivation schemes. But they could find only marginal increase in the motivational level that is
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reflected in performance and productivity. Managements basic job is the effective utilization of human resources for achievements of organizational objectives. The personnel management is concerned with organizing human resources in such a way to get maximum output to the enterprise and to develop the talent of people at work to the fullest satisfaction. It is a single line production unit which needs full effort of the employees to attain the organizational goal. The HR team of the organization currently provides many motivation schemes but they are not sure whether they have concentrated all the factors that affect the level of motivation. To identify the various factors that affect the employee motivation, this study has been carried out in the organization.

7. Location and Facility

Facility location is actually a term used in operation management, facility location or location analysis is done so that the better uses of the location can be understood. The company by understanding the materials and production process done nearby the location can save ample time in production process and also save a lot in terms of

transportation cost. And also the company can find out optimum position for the location of the company so that all the factors that are needed will be not a long distance from the company. Some of the benefits in location analysis include: You get a thorough knowledge of all the factors involved in the production, and ways through which the materials that are needed in the production can easily be accessed. When you do a proper location analysis for your facility you will also come across alternate substitute materials that are readily available and will cost less. You can save a lot on transportation cost for materials, labour, import and export. The materials will be available at a comparatively low cost. The best way to get a task done is by finding out ways through which the task can be done. Location analysis helps you in those aspects. Allows to you differentiate between practical positions to place your facility. Like for example, you cannot build a hazardous facility in a residential area.
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 Gives you access to cheap labour, and needed raw materials like water electricity and many more. Helps in a smooth running of an organization, by seeing to that all that is possibly needed is readily and easily available. Also has very easy access to production, distribution and sale of the products. Allows you to outperform your competitors facilities Once you have found the optimal location then you will very easily overcome all the issues that you are likely to face and have a smooth running of an organization. When you plan accordingly, you will also be prepared to face some minor hindrances.

In Location and Facility after getting all the Produchts packed they are shifted in to the in to the warehouse which are located in near due to saving transportation cost. These all cartons are pull through a wheeler to keep stored in a warehouse. After shifting all the products in a warehouse , These all cartons are than packed in a single unit through the help of plastic coating to save the cost of holding inventory and to save transportation cost. They all are than made available for at the point of sale.

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This is a stock warehouse of Pepsico to hold all the Finished goods inventory , as the goods are ready they transfer all the goods here and make them available to transfer at the point of sale or to fulfill any order which they have to place to their buyers.

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