Cost Analysis and Reduction
It is important to analyze the costs of
NCF to realize areas of wasted spedings
and minimize total costs of the company.
Multiplying the unit are being produced
and adding it too the fixed cost will give
the total cost of the company. The total
revenue is calculated to find the annual
total profil of NCF. After analyzing
NCF’s situation, it was noticed that they
tend to overfill most of their products,
which resuts in alot of “ extra ” substan-
tially. Another financial
concern is their transportation costs
which was minimized by studying the
cost effectiveness of selling to certain
markets.
Supply Chain Management
and Facilities Planning
NCF have to keep their production line
running overtimes in order to meet the
large demand of their products. NCF
produces almost 15% of the demand
during over time, which costs them on
average around 21,000 KD/year. The
effects of opening a new factory, increas-
ing the capacity of the existing factory
and using new modes of transportation
were studied in order to reduce transpor-
tation costs and increases the overall
production capacity of NCF.
Also, after analyzing the factory’s layout
using facilities planning techniques, a
new layout was proposed, which
reduces the total daily material handling
costs by 59.3% and better utilizes avail-
able space.
Quality Control
Since were are dealing with food indus-
try, there are many quality targets that
NCF needs to meet. These include such
things as bacteria count, weight accu-
racy, etc. The raw material sampling
plans were studied and those deemed
inadequate were modified to reduce
sampling costs. Also, a root cause analy-
sis was conducted to eliminate the
problem of overfilling and save the
company 68,000 KD annually. Finally,
the quality control documentation was
redesigned to better aid the company's
quality efforts and ensure they consis-
tently produce high quality products.
Production Analysis
and System Maintenance
NCF has two lines that are both
continuous and connected in series
(i.e. the failure of one machine causes
the whole line to fail). Therefore, it is
imperative to minimize the risk of
machine failure by studying and
optimizing the maintenance policy in
place. Both lines were studied using
Arena software and only the 400g size
can were considered since it comprises
the bulk of production. Improved
maintenance plans were developed
that improved system reliability,
increased the daily production and
minimized maintenance costs reduc-
ing the failure rates.