Value Stream Management
| Course Code and Name | QMT 4143 Value Stream Management | Faculty Name | |
| Project Title | Assessment 3 – Group Project
Group report worth 10%. Presentation and oral worth 20%. |
Due Date | Week 12 for the group report.
Week 14 for the individual oral defence. |
| Company name: | Date
Submitted |
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| Campus | CRN |
- Table of Contents
1 Introduction. 3
1.2 Products By Raw Coffee Company. 4
2.2 Inventory management works. 6
3 Stages of Lean Application for The Production. 7
3.1 Demand, Flow And Levelling. 7
3.2 Seven types of wastages in this situation could be, such as. 9
- Current State For The Production Process Of Raw Coffee Company. 10
4.1 Processes of Raw coffee company. 14
5 FUTURE STATE FOR RAW COFFEE COMPANY COFFEE PRODUCTION.. 15
6 Reference list. 17
1 Introduction
The raw coffee company sources premium green beans from all over the world and has found the best suitable market in terms of sustainability and quality. It is very important for the RAW coffee company that’s its beans are ethically sourced and the farmers and his family who grows the beans. We work directly with farmer and processing partners for the fresh beans each year, Roasting and other things are also considered properly. Anyone can visit our warehouse, roastery for the purchase sample or we provide fresh online delivery to your doorsteps.
Since 2007 RAW coffee company is getting into a coffee business where they realize that Coffee is not only about beans but the Roasting also. They managed many variables that is quality of water, quality equipment’s, trained staffs and others. The coffee market is so glad that they got such a great company( Raw Coffee Company, N.d).
1.1 Brief Background
- That we know, Raw coffee company is Coffee retailing company and shop, and they work with the production also. From production to the service everything they do on their own, which is specialties of their company in the market. They are competing with the master coffee company whit their traditional Coffee, and they are mastered in flavoured Coffee as well. They provide different types of flavoured Coffee, which is best of their Coffee like cinnamon flavoured, chocolate, nuts & caramels flavoured as well as Vanilla flavoured. They have created their full flavour by their own, along with Coffee flavoured Coffee is also in the top-selling as the Arabica is considered as the best coffee beans in the world. Hence, the Raw coffee company also deal only with Arabica coffee. They even work in the globe as they export their Coffee and merchandises to other countries (Raw Coffee Company, N.d).
- Apart from Coffee they deal with the most important this associated with the Coffee, which is coffee machines, espresso machine, coffee subscription, training and other aspects. At the same time, the problem comes with the improvement of quality more as sometimes this is not possible for them to maintain the quality of the Coffee. That’s creating a problematic situation to match with the demand and supply of the market positively. So, according to this company’stop-level management, this would be appropriate if they use proper management in their process as using the proper or lean could enhance their process, plan, strategy and other ideas and most important is the skilled and knowledgeable workers.
1.2 Products By Raw Coffee Company
The raw coffee company has a wide range of Coffee related products that can be mouth-watering. The most important product which they deal with it is coffee beans and powder, and apart from that espresso equipment which is most important for any coffee business, that can be a typical coffee shop and fine dining restaurant espresso equipment that is always is in need. Next areGrinders, filters, scales and others that is also one of the most important equipment for any of the coffee companies or a café. The quality staff that any organization needs and Raw coffee company that they provides training to every learners and to the one who is interested which makes the quality employees for any café or any Coffee related business, this is the or product which is more beneficial to the society then company.
Apart from all these they provide coffee subscription, door to door delivery and for the most important promotion and marketing they sell their merchandises ( Montavon, et al.,2003).
2 PRODUCTION PROCESS
2.1 Product or services
Raw Coffee Company produces wide and diversified ranges of coffee products and Coffee related product that are premium and estate coffees, dark roasts coffee, origins and blends as well as spring flavors and espresso coffee and other than coffee products like espresso equipments, grinders, brewers, scales and other things also. Moreover, the diversified ranges of coffee and equipments production, at Raw coffee production is not all about money making as quality Coffee, food safety of consumers, equipments quality and durability are the most focused aspect of this Raw coffee company.
So, the core production process of Raw coffee company requires a deep research and development from the harvesting to the pickup of beans to the roasting process and till the doorstep delivery. In the beginning of the coffee production process Coffee beans are harvested by strip picking, where the tree is being harvested as whole at a single point of time in which all the berries are stripped ripe or unripe. Or else, they can do selective picking of cherries.After that, the picking of the coffee beans stars, in next stage, the coffee producers of Raw coffee company initiate the roasting process of the coffee beans in their own company. Commonly the beans are mostly brought to the higher temperature so, the process of Roasting happens properly and maycause major chemical changes. And when the coffee beans reachto the perfect temperature and it is cooled down quickly to stop the further process.And at the last the coffee beans get lighter than earlier by the releasing of moisture out of the beans. Thus, through these process coffee beans are now ready to be packed and sell.
Source – https://rawcoffeecompany.com/collections/coffee
The production of this coffee retail and equipment company chain are considers approx. 60% of overall production.
Moreover, when comes to the supplies and suppliers for every part used for Raw Coffee, they provide guaranteed supply of Coffee and equipments and other related products with the best and given qualities. is come Qualities from Raw coffee companies own supply chain and wholesales process. The company as a famous coffee brand in retailer and wholesales had opened new roaster and roaster warehouse as the part of expansion process supply and coffee production based roasting facilities and equipment development that has significantly enhanced the capacity of supply chain and warehouse ( Machado&Leitner,2010).
Source – https://rawcoffeecompany.com/collections/single-origin
Inventory management which is started from the place of originor the main location. The company takes order in weekly and deal and work with the production of beans to provides and meets their order and subscription. Hence, when it comes to inventory management, the company produces highest quality along with freshArabica beans and high-quality products and equipments.
2.2 Inventory management works
Thus, when it comes to all the things, in terms of supply chain process, warehouse, wholesales, merchandising and inventory management, Raw coffee company have overall capability of roasting green coffee beans in large and production of espresso equipments and other equipments with best quality. Mostly, the coffee retail and wholesale chain uses FIFO and for the some product LIFO system of inventory, as it is completely related to food manufacturing, and hence mostly all food are perishable and have date of expiry on it, if the product are not delivered or bought by any customer than that will be waste and cause loss for the company. Thus, by this FIFO inventory system, RAW coffee companychecks the quality and freshness of the product ( Grewal,2008).
Image – Distribution Flow chart of Coffee
3 Stages of Lean Application for The Production
3.1 Demand, Flow And Levelling
3.1.1 Demand Stage
Patterns of customers offer
This is important for the company to know the offer pattern of the consumer as the provides different kinds of Coffee, equipments and other merchandises. So that they and follow different pattern for the different kind of situation.
Takt time Calculation
The Takt time is calculated as,
Takt time = available time for production/ total required for daily production
Pitch definition
Pitch = Takt time *(Pack out quantity)
Buffer Inventory
Raw coffee company always keeps a buffer stock of finished goods to meet any kind of future demand hike or any to meet the present demand in this context.
Finished goods supermarket
Supplying of finished products to satisfy customers demand. Raw coffee company always keeps or holds some of the stocks of finished goods for any of the demand and but they produce the goods according to the demand of the customer.
3.1.2 Flow stage
Flow discussion
This is based on the RAW coffee company which has proper management about the demand supply and the market information of Coffee by the consumer and according to that company’s management prepares the quantity of unit production in different condition ( Flament,2002).
Balancing the line
At this time RAW coffee plans for the whole production system flow and the distribution channels that work among their staffs through which they can meet the takt time.
Standardized work
One of the important stages for the production flows as the management of Raw coffee company always work and tries to work in a positive manner and with that a proper standard are also followed. Whereas for the standardized work it is important for the companies to maintain proper channel of communication with the staffs or with the employees.
Quick changeover
As the company is associated with the food business or in simple coffee retail and Wholesale Company, they always maintain their machines and equipments in a proper manner which could help them to be more versatile and flexible during the production flow.
Maintenance
For the production company makes a proper check list for the maintenance and for the proper check of machines before and after the production ( Chen, Joseph and Cox,2012).
Process supermarket
After the completing of the production process of Coffee, Raw coffee company process for their consumers.
Kanban system
This is considered as the JIT system. This is always the goal of the company to deliver the product to the consumer on time without wastage or with the less wastage. So, this would be appreciated for the t use JIT technique in different situation.
FIFO system and scheduling for production
This is the system which ensures the production and company that none of production system can overtakes the others production system. Also, the order should be maintained first in first out basis.
3.1.3 Leveling stage
Paced withdrawal
At the Raw coffee company in this situation the flow of information and material flows should link with each other as this system tells or describes the way through which work can be done.
Heijunka system
Through process Raw coffee company can eliminates any kinds of errors and will gives a free flow for meeting demand of the consumer.
The runner
Currently Raw coffee company is not using any runner but most probably in future they include.
3.2 Seven types of wastages in this situation could be, such as,
Figure 1: Seven wastages types
MURI: this means overburden that when the machine or materials will starts working more than their capacity and capability. Then this is important for the employees at Raw coffee company to maintain the machines in a proper way.
MURA: this means unevenness within the production. Sometimes the employees at Raw coffee company will use different amounts of materials which cause over process of the Coffee. Then they should use proper amount of materials in this situation.
3. Current State For The Production Process Of Raw Coffee Company
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Raw coffee company is one of most famous coffee company that follows above the production practice. It mostly includes five main and different process that are Harvesting followed by Roasting followed by Inspection followed by Mill and Grading and at the end Packaging. All of the coffee beans are selected by checking of cherries color. And that all the cherries are dried and roasted into green beans. Through this inspection process all of the defective beans are thrown away and rest are collected for the quality products. After all these process selected beans are now mailed and graded according to their color and size of the beans. After all these processes of quality selecting now all the green beans of Coffee can be packed and are ready to be shipped to the consumer ( Flament,2002).
| Process | Explanation | Bottlenecks & safety |
| Harvest | Mostly any new plant of coffee trees takes three to four years for bearing a fruit. After getting turn to dark red colour that berries are ready to harvest.
Farmer harvests each cherry by their hands. And this process needs more manpower which leads to more cost. The laborers look for rite cherries every 8 to 10 days. |
Harvesting is very intense process for that staffs must be experts. Now machines are also used. |
| Roasting | Through this process green coffee beans turns to dark. This is an endothermic reaction where green beans absorb extreme heat which increases the pores. This process darkens the green bees into a chocolate dark color. This process done in batches. Each batch may take around 16 minutes for complete Roasting. | It’s very hard to find best Coffee after roasting, only experts know the real quality of Coffee. |
| Inspection | In this process quality of beans are checked good or bad. There are several techniques to inspect the quality coffee beans. Some production companies also use an image processing algorithm for this process. After all these inspection now roast coffee beans re tested. The quality of the coffee beans is decided based on shape, size, color, and morphology. | This process is very important and vast for that we need expert with experienced. Company must follow safe technique for demanding of qualities beans. |
| Mill and grading | Through milling process parchment layer is removed. Process of Hulling removes complete husk of roasted coffee beans. Beans are graded according to their size and color. Diameter of each and every coffee bean is also tested for grading. Low rated beans are removed by machine. These removed beans are insect-damaged or not acceptable in color and size. Over fermented beans are also thrown out. | Mostly machine can’t grade beans properly. Thus, this process includes manpower including machines. |
| Packing | These graded roasted coffee beans are called as green Coffee. That all are now packed in jute bags for further shipping. This packing is again packed in plastic-lined containers for bulk shipping, which also protects from excess moisture. | Bad packaging may lead to the wastage of Coffee in large amount. After packaging coffee beans are delivered to the consumer. |
4 LEAN METRICS
| Inventory turn | 120 Days |
| Days of inventory on-hand: | 69.66 days |
| Defective parts per million (DPPM) or sigma level | 195000 |
| Total value stream WIP | 65494 units |
| Pack out quantity | 1000 Kg |
| Total cycle time, or total value-adding time (VAT) | 365 seconds |
| Total lead time | 26 days |
| Uptime | 96% |
| On-time delivery | 85% |
| Overall equipment effectiveness | 60% |
| First-time-through capability | 72% |
| Health and safety record | 3 |
| Daily production required |
3000 Units |
| Equipment used in each operation | Peeler, dry processing plant, huller, bean sorting machine, pulping machine, cylindrical grader. |
| Productivity | 62% |
| production rate | 66% |
| scarp rate | 8.3% |
| defect rate | 39.8% |
| number of employees in the production line |
70 workers |
| total quantities | 86452 units |
| inventory system | FIFO ( First In – First Out) |
| Total daily quantity requirements | 3000 |
4.1 Processes of Raw coffee company
- Harvesting
Cycle time = 528.58 min
Changeover = 0 min
Availability = 300 min
Uptime = 100 %
Operator = 14
- Roasting
Cycle time = 1297 min
Changeover = 10 min
Availability = 300 min
Uptime = 96.6 %
Operator = 3
- Inspection
Cycle time = 576 min
Changeover = 0 min
Availability = 300 min
Uptime = 100 %
Operator = 4
- Mill and grading
Cycle time = 1307 min
Changeover = 3 min
Availability = 300 min
Uptime = 98.8 %
Operator = 5
- Packing
Cycle time = 6 min
Changeover = 1 min
Availability = 300 min
Uptime = 99.5 %
Operator = 6
5 FUTURE STATE FOR RAW COFFEE COMPANY COFFEE PRODUCTION
Currently the state of Raw coffee company coffee production equipment production companies consists of Five processes that are provided coffee beans are perfect. But next process may enhance existing process effectively and efficiently. Next further process states consists of three processes which is fully dependent upon machine with less manpower. The further process emphasizes on enhancing machinery work to get the things done quickly.
| Harvesting | Roasting | Inspection | Mill and grading | Packing | Total |
| 0.367 days | 0.9 days | 0.4 days | 0.908 days | 0.005 days | 2.58 days |
Now applying the future state plant, we get the following table which is revised with the days taken for the coffee production.
| Roasting | Inspection, Mill and grading | Packing | Total |
| 0.87 days | 1.526 days | 0.005 day | 2.4 days |
Through the use of machine, the work will be done on time and less manpower will be required. And it also reduces the chance of error and will help in maintaining the quality product. Machine do not need so manymanpower to operates only few one or two will be enough for that and all work will be automatically running. Raw coffee company coffee production company improvise their quality products to a higher level while using machinery for every possible production process.
CONCLUSION AND RECOMMENDATIONS
Raw coffee company follows a traditional method of harvesting the coffee beans by manpowerthatpicks each of the coffee beans by hand with their eye of detail. They are a well-known manufacturer of quality Coffee of great taste. With the future state mapped in this report, RAW coffee company is recommended to use machinery for the production processes. This machinery will reduce production time and help in producing more quantity in less time.
6 Reference list
Chen, Joseph C., and R. Cox, (2012). Value Stream Management for Lean Office-A Case Study. American Journal of Industrial and Business Management, 2, pp. 17-29.
Flament, V. (2002). Coffee Flavor Chemistry. 396 pp. UK: John Wiley & Sons, Ltd. Accessed from https://www.researchgate.net/publication/227793784_Effects_of_roasting_degree_on_radical_scavenging_activity_phenolics_and_volatile_compounds_of_Arabica_coffee_beans_Coffea_arabica_L_cv_Catimor
Grewal, C., (2008). An initiative to implement lean manufacturing using value stream mapping in a small company. International Journal of Manufacturing Technology and Management, 15(3), pp. 404-417. Accessed from https://www.scielo.br/pdf/jistm/v13n3/1807-1775-jistm-13-03-0389.pdf
Machado, V.C., and U. Leitner, (2010). Lean tools and lean transformation process in health care. International Journal of Management Science and Engineering Management, 5(5), pp. 383-392. Accessed from https://www.scielo.br/pdf/jistm/v13n3/1807-1775-jistm-13-03-0389.pdf
Montavon, P., Duruz, E., Rumo, G. &Pratz, G. (2003). Evolution of green coffee protein profiles with maturation and relationship to coffee cup quality. Journal of Agricultural and Food Chemistry, 51, 2328–2334
Raw Coffee company (N.d), accessed from https://rawcoffeecompany.com/