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UNIVERSITY of SAN CARLOS TECHNOLOGICAL CENTER

Nasipit, Talamban, 6000 Cebu City, Philippines

A Method Improvement Study on


RCBA Manufacturing Corporation

Submitted By:
Chua, Felixter Leone See
Li, Noreen Bless Ang
O, Wesley Clarence Sy
Pacio, Lance Brandon Mansueto
Vasnani, Neelesh Naresh
\
rd
BSIE 3 year students

Submitted to:
Mrs. Irish Tejero Dakay, CIE, MIE
Department of Industrial Engineering

Revision as of:
October 20, 2014

TABLE OF CONTENTS

Acknowledgement

Abstract

CHAPTER

THE PROBLEM AND ITS SCOPE

INTRODUCTION

3-5

Company Profile

3-4

Pareto Analysis

4-5

Rationale of the Study

THE PROBLEM

CHAPTER

9
3-10

6-7

Statement of the Problem

Significance of the Study

RESEARCH METHODOLOGY

DEFINITION OF TERMS

PRESENTATION, INTERPRETATION, AND

10-13

ANALYSIS OF DATA

CHAPTER

PRESENTATION OF ALTERNATIVES,

14-17

CONCLUSIONS AND RECOMMENDATIONS


Presentation of Alternatives

14

Cost Benefit Analysis

15-16

Recommendation
Conclusions

16

Recommendations
Conclusions

17

BIBLIOGRAPHY

17

APPENDICES

2
18-212

A. Present and Proposed Flow Process Charts and Diagrams

18-21

B. Transmittal Letter to RCBA Manufacturing Corporation

22

ACKNOWLEDGEMENT

This research study is dedicated to the people who have contributed their time, effort and
willingness that brought this study to a success. The researchers would like to express a heartfelt
gratitude to the people who in one way or another have shown cooperation that had truly
helped the researchers endeavors in pursuing this study.

To our IE 314 Laboratory teacher, Mrs. Irish Tejero Dakay, for extending her help and
guidance in all the months of work undergone during our research study . The essence of
teamwork and cooperation you have shared to us and the learning you have imparted from the
earliest stage of our research had put a value in all our endeavors.

To RCBA Manufacturing Corporation, who valued cooperation during the research study,
our utmost gratitude in putting this study into writing.

To our beloved parents who understood us when we sharing our sentiments, supported
us financially, encouraged us when we were at the brink of giving up and carried us
throughout our studies. Thank you for your faith.

Above all, to our Almighty God who provided us the needed strength, knowledge,
persistence, and patience, in the pursuit of our study. This we offer You Lord God for your
greater glory.

The Researchers:
Chua, Felixter Leone See
Li, Noreen Bless Ang
O, Wesley Clarence Sy
Pacio, Lance Brandon Mansueto
Vasnani, Neelesh Naresh
1

ABSTRACT

This study, using a quantitative method, was conducted to look, analyze and provide
improvement into the herbal powder production process for the capsule products of RCBA
Manufacturing Corporation located in Cebu City, Philippines. The decision making tool, Pareto
chart, was utilized to select herbal powder processing, as an operation that should be improved to
boost overall productivity. This research was also constructed to identify the main problems and
causes that makes the said production process less productive. The data and information needed to
improve the process were then obtained through verbal discussion with the plant manager. Using
this data, methods analyses were made using the flow process charts and diagrams. The findings
mainly revolved around the fact that the production process took too long and had low productivity
and utilization. It was concluded that the transportation must be minimized, and the time for
cooling must be reduced. Various alternatives such as buying a new dryer machine or an exhaust
to speed up cooling, and rearrangement of the factory layout, were formulated. The proposed
process and layout was then presented, wherein a new exhaust machine purchase was
recommended, and a minor rearrangement of machines was suggested. The methods improvement
study was able to improve the productivity by around 25%.

CHAPTER 1
THE PROBLEM AND ITS SCOPE
INTRODUCTION

Company Profile:
RCBA Manufacturing Corporation, a herbal manufacturing company, was initially named
as RCA Herbal Foods Products. The company was established on March 28, 2003 and has a
laboratory previously located in Agusan del Norte. RCA Herbal Foods Products initially produced
ROCH Herbal Capsul, a herbal dietary food supplement. On June 3, 2005, the company was
happily granted its first Certificate of Product Registration by the BFAD.

The company name, RCA Herbal Foods Products, was then changed to RCBA
Manufacturing Corporation on October 3, 2005 with the approval of the Securities and Exchange
Commission. The initial product name, ROCH, was then changed to CHRO-Plus on December 22,
2010. The word Plus from CHRO-Plus was added when it was proven that each capsule
contained Omega 6 & 9 and essential fatty acids that are key ingredients to increase the bodys
immune system.

Today, the company has four main product lines namely: BARCH multi-dietary
Supplement which improves health and vitality; CHRO-Plus Herbal Dietary Supplement which
cures sickness and ailments; CHRO-Plus Herbal Oil which improves skin and hair quality and also
heals various body aces; CHRO Herbal Ointment which acts as an Antibacterial, Antifungal,
Antiviral, Antinoceceptive and Anti-inflammatory ointment. RCBA Manufacturing Corporation
is currently utilizing two major machines and employs eleven employees headed by their CEO,
Mr. Romeo C. Ang. Recently, the company office and laboratory located at Sitio Orel, Banilad,
Mandaue City.

It is recognized as the most trusted name in the industry by Gawad Parangal sa Pilipinong
Maagap and its major products have been awarded numerous recognitions both locally and abroad.
3

This shows the companys dedication in providing good health while ensuring safe consumption
to its customers at different levels regardless of age, gender and more.

Pareto Chart Analysis


No. Product

Sales in Millions

Cumulative (M)

CHRO Plus herbal capsule

PHP

90.00

PHP

90.00

40%

BARCH herbal supplement

PHP

80.00

PHP

170.00

76%

CHRO herbal ointment

PHP

40.00

PHP

210.00

93%

CHRO plus herbal oil

PHP

15.00

PHP

225.00

100%

Analysis:
From the Pareto chart, it can be perceived that the two superlative sales generators are the
CHRO plus herbal capsule and BARCH herbal supplement, both of which are capsule products
that require powdered herbs. The chart shows that around 76% of the sales is earned by these two
products. Since theres a higher revenue from capsules, it means there are more orders for them,

and more production input likewise. Due to this, the analysts decided that in order to improve
overall productivity, the productivity of herbal powder processing should be improved, that is, the
outputs (production rate) coming from the herbal powder production must be enhanced, or the
inputs (cost, time, labor, etc.) must be minimized.
Selected Project: Process Improvement on Herbal Powder Production

Rationale of the Study


RCBA Manufacturing Corporation is an herbal manufacturing company that has been
around for a while. It made a huge splash with its ROCH herbal capsule, an herbal dietary
supplement, back in 2003. It garnered much attention, and RCBA (known as RCA Herbal Foods
Products at the time) received their Certificate of Product Registration by the BFAD in 2005.

Since then RCBA Manufacturing Corporation has grown. They now have 4 main product
lines: BARCH multi-dietary supplement, CHRO-Plus Herbal Dietary Supplement, CHRO-Plus
Herbal Oil, and CHRO Herbal Ointment. These products have been very well received by the
consumers.

The team of researchers chose RCBA as our company to study as helping them out would
result into helping is many consumers. The team would like to improve one of the 4 product lines.
The decision on which product line to study with a Pareto Chart Analysis based on the revenue
these products generate could be made. After the decision of which product line to study is done,
the current performance of that product line (material flow) will be presented; then the
interpretations, possible alternative, and recommendations will be produced and stated.

Various problems in the production line could include: long waiting times, transportation
time, and methods in production. To find solutions to the long waiting times, the team could look
into the processes and operations that lead to the waiting; from there, we could look to reduce the
waiting by purchasing new machines. To help with transportation, the team could look to rearrange
the workplace layout. There were methods in the production that were often inconsistent (solar
drying). These methods could be made consistent with the purchase of machines (mechanical
dryer).

THE PROBLEM

Statement of the Problem

This study aims to improve the productivity of a specific process used by RCBA
Manufacturing Corporation.
Specifically, the study seeks to answer the following questions.

1. What are the relevant factual information that may affect the productivity of the herbal powder
production?
1.1 Quantity of Production
1.2 Machines Utilized and its capacity
1.3 Time of Operations
1.4 Facility Layout

2. What are the possible alternatives that may improve the productivity of the herbal powder
production?

Significance of the study

This study would be beneficial to many. It would specifically benefit the analysts. It would
also benefit the Industrial Engineering students of University of San Carlos Technological Center
especially those taking up Methods Engineering. Any improvements made to the production
process of the herbal capsules out of this study would also benefit RCBA Manufacturing
Corporation.

To us the analysts, the result of this research would help us learn the hands-on uses and
techniques of methods analysis.

To the Industrial Engineering students of University of San Carlos - TC, the result of this
study would benefit them in a way that they would understand the importance of Methods
Engineering in their course and future studies.

RCBA Manufacturing Corporation would be able to get information from the gathered data
and would be able to formulate a better herbal powder production process through the
recommendation proposed.

RESEARCH METHODOLOGY

Research Design

This study would use the quantitative style of research where the researchers would analyze
the data gathered and compute for the possible factor values affecting productivity and thus
recommend alternatives in order to increase productivity. Cost Benefit Analysis will be used to
evaluate how effective the new alternative would be.

Research Environment

The locale of this study is the RCBA Manufacturing Corporation factory in Orel St.,
Banilad, Mandaue City, Cebu, Philippines. This is where raw data would be gathered for later
analysis.

Research Procedure

Gathering of data. The analysts would visit the factory and gather data by interviewing the
production staff. They would be assured that these gathered data would be analyzed carefully and
would be used for the betterment of the corporation through research analysis and
recommendations. And that these data would be strictly used for research purposes only.

Treatment of data. The data would be studied, recorded and analyzed through the use of
appropriate exploratory and recording tools. Through these, a specific area of study would be
chosen and be further analyzed in order for the analysts to formulate recommendations which
would be tested through Cost and Benefit Analysis.

DEFINITION OF TERMS

For clearer understanding of the terms used in this study, the following terms are
operationally defined:
Productivity refers to the ratio of outputs to inputs, the number of sacks of herbal powder
produced per time or cost.
Methods a detailed set of processes and techniques that gives close analysis to each element of
the Herbal production process.
Herbal Powder Production the production process used by RCBA Manufacturing to make the
powder needed for their capsule products.
Exploratory tool a tool, such as the Pareto chart, that was used for decision making on which
particular process to scrutinize to improve RCBA Manufacturing Corporations productivity.
Recording tool a tool, such as the flow process chart, that was used to record the obtained data
in an organized way,
Machineries/Machines refers to the equipment used to in the herbal production process: namely,
grinder, baker, washer, and filter.
Raw material refers to natural plants, fruits or herbs used to make the herbal capsules, some of
which are: Ampalaya fruit, Garlic bulb, Malunggay seeds, Soya beans. Salba seeds, and Ginger
root.
Alternative proposed substitutes to improve the productivity of the herbal production process,
such as buying a new drying or cooling machine.
Pareto Chart is a type of chart that contains both bars and a line graph, this showed the analysts
the herbal products that generated the greater part of the sales.

CHAPTER 2

PRESENTATION, INTERPRETATION, AND ANALYSIS OF DATA

This chapter presents, analyzes and interprets the data gathered during the conducted
survey in the RCBA Manufacturing Corporation factory located in Mandaue City.

General Process Flow: Capsule Products


RCBA Manufacturing Corporation purchases its variety of raw materials from its different
trusted suppliers. Once the raw materials arrives, the company then combines these major
components and grinds them into powder form using the grinder machine then dries these
powdered form bits with the dryer machine.

RCBA then transfers the powder output together with the capsules they purchased from
different suppliers in different countries like China or India to their partner company who brings
together the powder and the capsule. The partner company also does the packaging including the
plastic containers for the capsules, the aluminum foil to stack these plastic containers and the box
which contains the company name and important information. The output is then sent back to
RCBA ready for distribution.
Specific Area of Study: Herbal powder production

A list of data is presented showing the machines, raw materials and manpower being
utilized. A tabular form of data is presented showing the chronological order of events used during
its herbal powder production together with its specified time duration and if necessary, its distance
being covered.

Lists A and B presents the summary of resources which RCBA Manufacturing Corporation
utilizes during its herbal powder production. List C presents the current manpower of RCBA
Manufacturing Corporation for its daily operations.

10

A. List of Machines Utilized:


-

Washer which cleans the newly arrived raw materials

Grinder which grinds raw materials into powder form

Filter which separates unwanted lumps after grinding

Baker which bakes the grinded raw materials

B. List of Raw Materials:


The raw materials used for CHRO-Plus Herbal Dietary Supplement:
-

Ampalaya fruit (mamordica charantia)

Garlic bulb (allium sativum)

Malunggay seeds (moringa olcifera)

Soya beans (miso)

Magnesium Stearate

The raw materials used for BARCH-Multi Dietary Supplement:


-

Salba seeds (salvia hispanica) *imported

Ginger root (zingiber officinale)

Malunggay seeds (moringa olcifera)

Magnesium Stearate

C. RCBA Manufacturing Corporation Manpower:


-

CEO - Mr. Romeo C. Ang

Manila-based consultant

2 machine operators

Office Staff (9 employees)

Table A. presents the chronological order of events used by RCBA Manufacturing


Corporation during its herbal powder production. A more detailed Flow Process Chart and Flow
Diagram is shown in Appendix A page 19 and 21.

11

Table A.
Chronological Order of Events in Herbal Powder Production (material flow)
Event Description

Time (hr)

1. Washed

2. Dried

3. Moved to Grinding area

0.25

4. Grinded using Grinder

5. Filtered to remove lumps

6. Moved to Baking area

0.17

7. One side is baked using a Baker

Distance (m)

24

16

8. Flipped to other side

0.17

9. Other side is baked

10. Left to cool

18

11. Move to Packaging area

0.20

12. Packaged into 25kg sacks

0.50

18

Total Time: 37.29 hours


Percent Value Adding: 44.2%

Table A. reveals that out of the total 37.29 hours of production per batch, the biggest
contributor to the non-value adding percentage is the cooling process takes 18 hours to cool which
is roughly 48% of the total time. The team believes that this is the root cause of the low utilization
ratio.

This shows that the team has to look into the cooling process which takes up almost 50%
of the total production time. This arises because after baking, it cant be moved to a cooler
environment due to its immense hot temperature thus it is left inside the factory to cool.

The Flow Diagram shown in Appendix A page 19 reveals that the production had some
backtracking going on and this could be because of the positioning of the machines being utilized
and the space of each room which these machines occupy, some of the machines need bigger space.
12

The Flow Diagram also reveals that the washing and drying of the raw materials are done outside
and this shows that weather may affect the time it takes to wash and dry the raw materials
especially during the rainy season when drying would take longer.

Current Performance Productivity:

100
= 2.68 boxes / hr
39.27

13

CHAPTER 3
PRESENTATION OF ALTERNATIVES, CONCLUSIONS AND RECOMMENDATIONS
Presentation of Alternatives

1. Purchasing and installing exhaust fans in order to cool the powder.


The data the researchers had found shows that the Cooling process after the powder is
cooked is roughly 48% of the total time (18 hours). This means that this process is
nearly half of the entire process, but that doesnt mean it necessarily has to take that
long. The reason why it takes this long is because the powder cannot be moved after
baking; it has to be left inside the factory to cool. The installation of exhaust fans in the
machine would make the factory cooler as well as help with the cooling process. These
exhaust fans could effectively reduce the time it takes to cool, reducing the overall total
time.

2. Purchasing a Mechanical Dryer to dry raw materials after washing.


One issue that RCBAs powder production has is that when weather conditions are
badcloudy to rainythey have to stop the drying process, making it an unavoidable
delay with the current set up. They solar dry their raw materials meaning that they are
at the mercy of the weather. Adding a mechanical dryer will greatly improve the
process because if they have a mechanical dryer, there would be no need to stop the
process; thus, this deals with one of the factors that could greatly affect production.

3. Factory Layout Rearrangement.


The raw materials are constantly being moved here and there. RCBA could rearrange
the machines inside the factory in order to reduce the total transportation time (currently
at 0.62 hours). Reducing the transportation time would reduce the total time as well as
increase the overall percent value adding of the powder production process.

14

Cost Benefit Analysis for evaluating alternatives:

Expected Changes in Productivity, and Cost of the alternatives


Method Changes
1. Exhaust
2. Dryer
3. New Layout

Productivity (%)
23.11
3.47
0.78

CTD Risk (%)


0
0
0

Cost (PHP/hr)
0.46
0.28
0.17

Sample Computation of Productivity (exhaust):


New Cycle time: 30.29 hrs <- since cooling time is reduced
New Productivity: 100 / 30.29 = 3.3 boxes / hr 23% more than the original (2.86 boxes /hr)
The productivity % shows how much more percent of boxes can be produced if the
corresponding three alternatives are implemented. The cost on the right most column is the cost of
the alternatives, converted to PHP per hour rate, since the productivity is also per hour. The
Exhaust has the highest risk, although, still very minute, since there can be risks of the exhaust
overheating if overused.

Cost Benefit Ratio Table


Method
Changes
1. Exhaust
2. Dryer
3. New Layout

Productivity
620
93
21

Benefit
Injury rate
0
0
0

Total
620
93
21

Cost (PHP/hr)
0.46
4.28
0.17

Cost
Benefit
0.0007
0.05
0.008

The productivity shown is how many more pesos the company earns per hour if it
implements the corresponding alternatives. The cost-benefit ratio is obtained, and it shows that the
exhaust alternative is the best alternative.

15

Evaluating Alternatives
RCBA Manufacturing Corp.

ALTERNATIVES

Process: Powder
Production
Date: 10/20/14
Analyst: Team Hokusai
Factor/Consideration
Increase in Productivity
Decrease in Injuries
Low-cost Solution

Wt
8
3
7

Totals

Exhaust

Dryer

New Layout

Ratings and Weighted Ratings


B
80
3
24
1
0
0
0
0
35
1
7
10

A
10
0
5
115

31

C
3
0
70
73

From the table above, it can be evaluated that the new exhaust is the best alternative to
use. This is because it increases the cooling rate thus decreases the cooling time considerably.
The New layout alternative can also be implemented alongside the exhaust alternative since it is
has a low cost and is hassle free.

Conclusion

It can be concluded that RCBA Manufacturing Corporation really needed improvement in


their herbal powder production process. The cooling time was too long, and needed to be improved.
Thus, with the use of the cost benefit analysis for evaluating our alternatives, the analysts
can clearly see that the use of an exhaust fan alternative is optimal. When an exhaust fan is
installed, production increases by 23.11% --- from 2.86 boxes per hour to 3.30 boxes per hour.
The exhaust fan alternative also has the highest total weighted rating of 115 which is why it is
statistically chosen to be the most optimal alternative for the process. If alongside this, the
machines are also rearranged properly (as shown in the flow diagram in appendix A page 21), The
Productivity can be increased by 25%.
The Methods Improvement Study increased the productivity by 25%, this surely has an
impact on the revenue of RCBA Manufacturing Corporation.
16

Recommendation
Based on the findings and conclusions, these are the recommendations of this study:
1. One thing the analysts strongly recommend is applying the exhaust fan alternative while
also applying the new layout alternative. All the new layout alternative requires is a little
manual labor in order to move the machines around, in order to reduce the distance
travelled. This alternative has the lowest cost among the rest, and coupling this with the
exhaust fan alternative would greatly increase the productivity of the whole process.

2. A yearly evaluation of the new method for the herbal powder production process should
be made to identify which events have problems and how RCBA Manufacturing
Corporation would be able to address to these problems and improve their production even
further.

3. The next researchers must study on the possibility of utilizing the unused rooms located
inside the factory and the open space outside the factory wherein they could further
improve the factory layout thus possibly further improving the production rate.

Bibliography:
http://www.rcba.com.ph

17

APPENDICES
APPENDIX A
FLOW PROCESS CHART
SUMMARY

DISTANCE TRAVELLED
TOTAL TIME
% VALUE ADDING

PRESENT
DETAILS OF
PROPOSED

0.34

0
0
11
30 m

0
0
28 m

30.01 hrs

7.28 hrs

55.01%

10.81%

hr

3
2
24

ANALYSIS

ACTION

WHY?

CHANGE

NOTES

Can be done using drying machine

0.25

4. Grinded using Grinder

Can be done in baking area

5. Filtered to remove lumps

Can be done in baking area

16

0.17
4

7. One side is baked using a baker


8. Flipped to the other side

0.17

9. Other side is baked

10. Left Idle to cool


11. Moved to Packaging area

2. Dried under sun

6. Moved to Baking area

MAN
MATERIAL
CHART BEGINS Raw material is washed
CHART ENDS Raw material is packaged into 25kg sacks
CHARTED BY Team Hokusai
DATE Oct. 1, 2014

0.28

1. Washed
3. Moved to Grinding area

NO.
1 OF

18

18

0.20
0.50

12. Packaged into 25kg sacks


13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.

18

Exhaust can be used

ELIMINATE
COMBINE
SEQUENCE
PLACE
PERSON

STORAGES

18.67

8
3
0
0
1

WHAT?
WHERE?
WHEN?
WHO?
HOW?

DELAYS

TIME

0
0
0
0
0

JOB

DISTANCE
)
(
QUANITITY
)
(
TIME
)
(

INSPECTIONS

NO.

DELAY

TRANSPORTATIONS

TIME

STORAGE

8 18.67
3
0.62
0
0
0
0
18
1
58 m
37.29 hrs
44.2%

NO.

INSPECTION

TIME

DIFFERENCE

OPERATION

NO.
OPERATIONS

PROPOSED

TRANSPORT

PRESENT

PAGE
Herbal Powder Processing

hr

3
2

6.
33.

Washed
Dried
Moved to Grinder
Grinded ny Grinder
Filtered to remove lumps
Moved to Baker

7.
34.

One side is baked using a baker

4
0.12
4

8.
35.

Flipped to the other side

0.17

9.
36.

Other side is baked


Left idle to cool
Moved to Packaging Area

4
11
0.07

28.
1.
29.
2.
30.
3.
4.
31.
5.
32.

37.
10.
38.
11.
39.
12.
13.
40.

14

11

0.15
1

0.5

Packaged into 25kg sacks

14.
41.
15.
42.
16.
43.
17.
44.
18.
45.
19.
46.
20.
47.
21.
48.

49.
22.
23.
50.
24.
51.

52.
25.
53.
26.
54.
27.
55.
28.
56.
29.
57.
30.
58.
31.
59.
32.
60.
33.

34.
35.
36.

19

ACTION

WHY?

CHANGE

NOTES

ELIMINATE
COMBINE
SEQUENCE
PLACE
PERSON

NO.
1
2 OF
2

ANALYSIS

WHAT?
WHERE?
WHEN?
WHO?
HOW?

DISTANCE
)
(
QUANITITY
)
(
TIME
(
)

DELAY

STORAGE

INSPECTION

PROPOSED

OPERATION

PRESENT
DETAILS OF

TRANSPORT

PAGE

FLOW DIAGRAM
NO.
1
PAGE 1
OF 2
Herbal Powder Processing

JOB

MAN

FLOW

MATERIAL

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PRESENT

METHOD

PROPOSED
DATE Oct. 1, 2014

Team Hokusai
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. . . . . . .
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Packaging and
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Grinder
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SCALE Each square is

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FLOW DIAGRAM
NO.
1
PAGE 2
OF 2
Herbal Powder Processing

JOB

MAN

FLOW

MATERIAL

CHARTED BY

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METHOD

PRESENT
PROPOSED
DATE Oct. 20, 2014

Team Hokusai

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Packaging and
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SCALE Each square is

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APPENDIX B
TRANSMITTAL LETTER

August 27, 2014


To Whom It May Concern,

Good day.

I am Felixter Chua, a third year Industrial Engineering student from the University of San Carlos
currently taking up IE314L, Method Engineering Lab. Part of our course requirement is to visit an
industrial or manufacturing company. In behalf of our group, I would like to request your approval
of visiting your good company for a few hours on October 1, 2014. The purpose of this visit is for
us to learn more about your company and see what you do, to improve our skills in identifying
industrial processes and hopefully for you to know how Industrial Engineering in the University
of San Carlos is preparing its students to work in companies like yours.

I hope you will give us the opportunity to visit your company, know the company and some of
your staff better. I assure you that this will be a productive visit that would hone our skills to
become better Industrial Engineers in the future.

Sincerely yours,

Felixter Leone S. Chua


3rd year Industrial Engineering student

22

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