Operation Management

Term Paper
Bus 650
Section: 03

Prepared for,
Mr. Ferdous Sarwar, PHD
Assistant Professor, IPE, BUET

Prepared By,
Nymul Hasan Taseen - 141 1743 660
Abu Syed Arik Kibria - 141 1747 060
Genius Satter -141 1744 660
Md. Riaz Hossain 142-0877-660
Md. Rezaur Rahman 142 1144 060

An overall analysis of Facility Layout

of
Rangs Pharmaceuticals Ltd.

Submission Date: 22nd December, 2014

Contents
1) Company Review ........................................................................................................................................ 1-2

-Vision ..................................................................................................................................................................... 1

-Mission .................................................................................................................................................................. 1

-Organanogram .................................................................................................................................................. 2

2) Existing Facility and Layout Analysis .................................................................................................. 3-6

-Head Office Layout .......................................................................................................................................... 3

-Factory Layout ............................................................................................................................................. 3-5

-Warehouse Layout ...................................................................................................................................... 5-6

3) Type of Layout used in Manufacturing .................................................................................................... 7

4) Facility and Layout Analysis .................................................................................................................. 8-11

-Relationship Chart .................................................................................................................................... 8-10

-Department Location Dissection: ................................................................................................... 10-10

5) Re-designing existing facilities .......................................................................................................... 12-13

6) Conclusion and Recommendation ........................................................................................................... 14

References ............................................................................................................................................. a

Appendix..................................................................................................................................................................... b

Questionnaire for Relationship Chart ........................................................................................................... c

1) Company Review

Rangs Pharmaceuticals Limited is one of the concerns of Rangs Group. It was founded in
2004 by Amanullah Chowdhury who is a pharmacist and one of the managing directors of
Rangs Pharma. He was the student of first batch of Pharmacy department of Dhaka
University. His elder brother A Rouf Chowdhury who is the founder of Rangs Group is also
a member of board of directors.

Vision
We want to reach every Patient.

Mission

Our endeavor is to serve the society in improving quality of life by delivering state of the
art products and service through maintenance of ethics creating accelerated opportunities
for the employees with innovative ideas.

Its head office was situated at the 16th floor of old Rangs Bhaban. After the destruction of
that building it was moved to Borak Tower. After the construction of new Rangs Bhaban in
Bijoy Sarani it was transferred to new building in June 2012. It is situated at the 5 th flood.
The factory is situated in Tejgaon Industrial area where the address 226 Tejgaon Industrial
Area. Top management is willing to transfer the factory in Savar someday where they have
40 Bigha land for new factory. It will happen when they will plan for mass production. The
company has depot in Dhaka, Bogra, Rangpur, Barisal, Jessore, Mymensingh, Sylhet, Comilla
and Chittagong.

There are now 650 working in this company. 150 people in the factory, 50 people in the
Head Office, 300 people in the field and 150 in distribution.

1
 Board of Directors

Finance & Production Quality Wareh Finished

Marketing and Accounts HR & Admin Audit Commercial Maintenance
Assurance & ouse Goods
sales Control

Executives,
Finance HR & Admin Assistant Senior Executives, Plant
Marketing
Manager Manager Manager Executives QA Senior Engineer
Manager Executives
Manager

Plant
Executives, Executives, Production Engineer
Senior Assistant HR QA, QC
Manager,
Senior Manager
Executives Executives and R&D
Executives, Executives Assistant
Senior Manager
Executives Assistant/ Maintenance
Deputy Workers
Zonal
Sales Production
Manager Executives,
Managers Senior
Security, Executives
Canteen
workers,
Sales Executives
Cleaners,
Officers , Senior
Drivers
Executives

Assistant Marketing Manager, Product Production

Development Executives. Workers

2
2) Existing Facility and Layout Analysis

Head Office Layout

In Head Office we can see the setup. HR, Finance, Audit and other departments are close to each
other so they can communicate and get the job done easily. In Head Office activities are done to
support production facility activity too.

Factory Layout

Rangs Pharmas factory is located in 226 Tejgaon Industrial area where in almost in a 7 bigha land
it has opened up its production facility. Basic structure of the factory and flow of production in the
factory, warehouse location and all other departments have been graphically presented in following
figures

3
4
In factory in the first floor we can see the departments. Here core departments are
Production and Quality Control departments. Engineer department is there to assist
production so machines dont break down during production.

Initially production gets monthly requisition from marketing department of Head Office.
They get monthly requisition before the designated month. Suppose getting the monthly
requisition of March in February. So production knows what materials are needed, what
are in stock and what to order. So they communicate with commercials and make raw
materials ready. Packing materials are also ordered based on requirements. Production
department based on the marketing department demand send requisition to warehouse,
QC and other departments so everyone knows what works to be done.

Production activity is triggered by warehouse where raw materials are kept. Warehouse
workers weight materials as mentioned in research papers. This process is called
dispensing. They also bring packing materials such as bottles. After dispensing the raw
material goes to various production sections such as granulation, encapsulation etc as
required. After production medicines are kept in 1st level package that is bottle or tube.
Then, for instance 10 packages of medicines are kept in another packet which is secondary
package. After that several secondary packaged products are kept in a carton which is
third level packaging. While production is going on engineers are always in the production
section to monitor machines. They help if anything goes wrong. QA or QC executives are
also there to check quality and standards. Third level packaged products are sent to
Finished Goods department. FGS dispatches these products as the demand of marketing
department.

Warehouse Layout

Figure of factory layout shows that raw materials and packing materials are not stored
properly. They are scattered all over the factory as main warehouse is not big and good
enough. Although it meets industry standards still much scope for improvement. Raw
materials of the firm are collected from the container to the raw material warehouse which

5
is just adjacent to the production area. Finished goods are stored after a batch of
production is completed in a different warehouse. A maintenance warehouse for
maintenance tool is located in close proximity to maintenance department. Packing
materials are also stored in a separate warehouse beside the maintenance warehouse.

Involved areas

- Packaging material store

- Raw material store
- Finished product store

Processing
Receiving packing Packets
Materials Processed packages

Receiving Raw Quality Control Raw Materials

Materials from Checking Accepted
Suppliers

Processing Raw
Finished Products
Materials for Start Production
Production & Quality Control

Quality Control Complete Finished

Quality Control Checking for Final Product for
again Products Distribution

Fig03: Warehouse layout of Rangs Pharmaceuticals

Conditions maintained in ware house:

For non antibiotic store, normal temperature and storage condition is maintained.
For antibiotic store, 15-18oc and bellow 50% humidity is maintained.
For cool sore, 2-8oc temperature is maintained.

6
 3) Type of Layout used in Manufacturing

Rangs Pharmaceuticals Limited goes for Batch Processing where goods are semi
standardized. So it is easily to change products as
flexibility is there. They produce around 123 different
products some of them are Prevencid, Tacs, Curacid etc.
Each one is produced in batch. Suppose 2000 Prevencid
tablets are produced in a batch. Then 3000 Tacs tablet is
produced in a batch.

Process layout, a layout that can handle varied processing requirements, is used in
manufacturing pharmaceuticals. In manufacturing, process layout means the layout, which
can handle varied processing requirements. In order to do so process needs frequent
adjustments to equipment. This cause a discontinuous work or we can say Intermittent
Processing Intermittent Processing means where jobs are small, each with somewhat
different processing requirements.

Process layout is also design for the floor plan of a plant which aims to improve efficiency
by arranging equipment according to its function. The production line should ideally be
designed to eliminate waste in material flows, inventory handling and management. In
process layout, the work stations and machinery are not arranged according to a particular
production sequence; instead, there is an assembly of similar operations or similar
machinery in each department.

Production QC Engineering
Department Department Department

Warehouse Finished
Department Goods

7
4) Facility and Layout Analysis

Relationship Chart
The main issue in designing process layouts concerns the relative positioning of the
departments involved, as departments must be assign to locations. The problem is to
develop a reasonably good layout; some combination will be more desirable than others.
There are two approaches to find out the best combination. One is preceding approach,
but it has a limitation as it only focuses only one object. In reality many situations involve
multiple criteria. In that case this approach in not appropriate. So thats why Richard
Muther developed a more general approach to process layout decision problem which is
Relationship Chart.

It allows subjective input analyzed by managers to indicate the relative importance of each
combination of department pairs. This information will be than summarized in a grid,
where letters represents the importance of closeness for each department pairs. A is the
most desirable & X is the most undesirable.

8
Relationship chart has been built based on expert interviews through questionnaire
through knowledge from their job experience.

Marketing Manager Relationship with Finance and Accounts, Audit, Commercial, QC-QA,
Warehouse, Maintenance and Finished Goods departments are unimportant. Their
relationship with HR and Admin is important as HR coordinates training for them. HR also
assess other training issues allowances etc. so HR and Marketing here needs to work
together. Marketing Managers relationship is especially important with Production
Department. Based on market demand and forecasting Marketing Manager needs to inform
Production Department about the required production so that production department can
meet their requisition.

For Finance and Accounts they need to keep important relationship with HR and Audit. HR
helps them in payroll where Audit helps in auditing. Their relationship with Commercial is
ordinary and unimportant with QC-QA, Warehouse, Finished Goods, Maintenance and
Production departments.

For HR and Admin department we see their relationship is unimportant with Audit,
Commercial, QC-QA, Warehouse, and Finished Goods departments. HR and Admin do not
have important relationship with these departments. However from time to time
maintenance department needs to be maintained by administration which signifies an
ordinary relationship with this department in the relationship chart.

Audit has important relationship with Warehouse and Finished Goods departments. Audit
needs to track warehouse raw material and packing material records, also finished good
records. So they play important role here. They have ordinary relationship with
Commercial and unimportant relationship with QC-QA, Production and Maintenance
departments.

Commercial have especially important relationship with Warehouse as they need to ensure
supply of raw material and packing material. Especially important relationship with
Production department as it sends requisition of raw materials and packing materials as
9
needed. Relationship is unimportant with QC-QA, Maintenance and Finished Goods
department. However they dont have to maintain significant connection with maintenance
department.

QC-QC has absolutely necessary relationship Production and Warehouse. They need to
constantly help production and control or monitor production process. They also need to
check quality and other needed issues of raw materials and packing materials of
Warehouse. Their relationship is important for finished goods department as well but
unimportant with Maintenance. QC needs to ensure that tablets are not missing in a strip
and strips are not missing in a packet and packets are not missing in a carton. Besides batch
numbers needed to be ok this is why their relationship is important with FGS.

Production Department has absolute necessary relationship with Warehouse as they need
raw material and packing material from them and as per requisition warehouse acts. They
maintain important relationship with maintenance as maintenance provides all the support
to keep production machine fit. Production also maintains important relationship with
Finished Goods department as after production they need to supply them products in batch
properly.

Warehouses relationship with Maintenance and Finished Goods departments is

unimportant.

Finished goods also have unimportant relationship with Maintenance.

Department Location Dissection:

As per our relationship chart, based on its closeness rating, following departments who
have an absolutely necessary relationship among them are the most critical pairs which
should be considered to be grouped as close as possible.

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 A Links Critical Pairs of Department
1-7 Marketing-Production

6-7 Quality Control and Assurance-Production

6-8 Quality Control and Assurance-Warehouse

7-8 Production-Warehouse

*Critical pairs also include pairs of departments having X rating. None of the departments have that rating in this
case.

From the cluster of A links keeping the most frequently occurred department in A list being
in center (In this can department 7 or Production) the link of relationship stands as such,

Accounting
8 5 2 4 Warehouse Commercial
and Finance
Audit

Marketing
6 7 1 QC-QA Production Department

Finished HR and
9 10 3 Goods
Maintenance Admin

Based on this analysis the following section discusses the proposed changes in facility
layout of Rangs Pharmaceutical Ltd.

11
5) Re-designing existing facilities

The relationship chart analysis suggests a strong relationship between Production,

Marketing, and also with production and Quality control and Quality Assurance and
Warehouse. However, it is not practical to set up a complete marketing department in
factory premises as most of its activities are related to departments at head office which
are commercial, HR etc. Thus a marketing cell can be proposed for improved
communication and quick decision making reacting to changing environment in business is
proposed in factory layout. Marketing and sales is also responsible for a lot of field works.
On the other hand, the departments in headquarter are actually designed according to their
most frequent interaction which matches the proposed formation through relationship
chart. Therefore the headquarter facility layout was not proposed to alter or did not need
to be altered.

Current quality analysis doesnt reveal any critical error in facility layout but shows
concern about its quality of management. Initially in Rangs pharmaceuticals Limited there
was no Effluent Treatment Plant (ETP) for pharmaceutical waste management. Later on it
was included in the facility. However, placement of ETP plant was not ideal, as ETP plant
should be in an open space like other firms in this industry. Another safety issue which is
needed to be addressed is that Boiler section of the facility layout is not in safe. Any
explosion there will also influence production floors directly. Although the maintenance
team is ready to handle any technical glitches it is highly recommended that boiler section
should be moved in safer location.

In addition to this safety and environmental concerns the firm can create some facilities
which can mobilize production quicker. A stairway linking quality control and assurance
department and production area can accelerate employees movement within facility and
can increase efficiency. With proposed modification following figures are the models for
the proposed factory layout.

12
Figure: Proposed Factory layout for Rangs Pharmaceuticals Ltd.
13
6) Conclusion and Recommendation

As Rangs pharmaceuticals Ltd. is a mid-level firm thus it does not need much change in the
layout. It meets mid-level firms standard in the industry. We cannot compare it with high
end company such as Square and Beximco as those are huge. This firm does not have huge
lands and capital adequacy to compete with those so they operate for a niche market based
on the resource or capacity they have. Square Pharmaceuticals produces near 1200 types
of products where as Rangs produce only 123 types of products so the facility standard of
this firm ideally would be different and Rangs would lack in having an expensive facility
which is practical and understandable. According to experts the main concern in their
facility layout should be their quality of facility management of the existing layout. It can
certainly improve the functions of warehousing and try to achieve an integrated responsive
warehouse management system which ultimately will help them to produce more and
lower cost as well. In addition safety condition and environmental concern are one of the
key should focus on. Their ETP plant should ideally be located on a separate open space
and where waste management should be ideally located. Moreover they should add more
protection facilities within the layout for the boiler section of the production area.

14
References

Rangs Pharmaceuticals Limited Service Rule

Rangs Pharmaceuticals Limited SOPs
Linkedin profile https://www.linkedin.com/company/rangs-pharmaceuticals-ltd
Md. Rezaur Rahman (Former HR and Admin Executive , Rangs Pharma Ltd)
(Contact No 01811229882)
Shakil Ahmed ( Production Executive , Rangs Pharma Ltd) (Contact
No:01670038780)
Sukumar Chakma (Assistant Manager Production, Sun Pharma Ltd) (Former Sr.
Production Executive, Rangs Pharma Ltd) (Contact No :01675175314)
Saiful Islam ( Microbiologist, Unimed Health Ltd.) (Former QC Executive, Rangs
Pharma Ltd) (Contact No:01832394626)
Shariful Islam ( Logistics Manager, National Development Engineers Ltd) (Former
Sr. Warehouse Executive, Rangs Pharma Ltd) (Contact No-01717307253)
Sharmin Sultana (SR. HR and Admin Executive , Rangs Pharma Ltd) (Contact No
04470007131)
Appendix
 Questionnaire for Relationship Chart

Based on your job experience and perception, can you please rate different departments relative importance of being close
to each other from 1 to 6 (1 as being not desirable 6 as being Absolutely necessary.)

SL Pairs Not Unimportant Ordinary Important Essentially Absolutely

No desirable (2) (3) (4) Important Important
(1) (5) (6)
1 Marketing + Accounting and Finance (1) (2) (3) (4) (5) (6)
2 Marketing + HR and Admin (1) (2) (3) (4) (5) (6)
3 Marketing + Audit (1) (2) (3) (4) (5) (6)
4 Marketing +Commercial (1) (2) (3) (4) (5) (6)
5 Marketing +Quality Control (1) (2) (3) (4) (5) (6)
6 Marketing +Production (1) (2) (3) (4) (5) (6)
7 Marketing + Warehouse (1) (2) (3) (4) (5) (6)
8 Marketing+ Finished Goods (1) (2) (3) (4) (5) (6)
9 Marketing+ Maintenance (1) (2) (3) (4) (5) (6)
10 Accounting and Finance + HR and (1) (2) (3) (4) (5) (6)
Admin
11 Accounting and Finance + Audit (1) (2) (3) (4) (5) (6)
12 Accounting and Finance +Commercial (1) (2) (3) (4) (5) (6)
13 Accounting and Finance +Quality (1) (2) (3) (4) (5) (6)
Control
14 Accounting and Finance +Production (1) (2) (3) (4) (5) (6)
15 Accounting and Finance + Warehouse (1) (2) (3) (4) (5) (6)
16 Accounting and Finance+ Finished (1) (2) (3) (4) (5) (6)
Goods
17 Accounting and Finance+ Maintenance (1) (2) (3) (4) (5) (6)
18 Audit + Commercial (1) (2) (3) (4) (5) (6)
19 Audit +Quality Control (1) (2) (3) (4) (5) (6)
20 Audit +Production (1) (2) (3) (4) (5) (6)
21 Audit + Warehouse (1) (2) (3) (4) (5) (6)
22 Audit+ Finished Goods (1) (2) (3) (4) (5) (6)
23 Audit+ Maintenance (1) (2) (3) (4) (5) (6)
24 Commercial +Quality Control (1) (2) (3) (4) (5) (6)
25 Commercial +Production (1) (2) (3) (4) (5) (6)
26 Commercial + Warehouse (1) (2) (3) (4) (5) (6)
27 Commercial + Finished Goods (1) (2) (3) (4) (5) (6)
28 Commercial + Maintenance (1) (2) (3) (4) (5) (6)
29 Quality Control +Production (1) (2) (3) (4) (5) (6)
30 Quality Control + Warehouse (1) (2) (3) (4) (5) (6)
31 Quality Control + Finished Goods (1) (2) (3) (4) (5) (6)
32 Quality Control + Maintenance (1) (2) (3) (4) (5) (6)
33 Production +Warehouse (1) (2) (3) (4) (5) (6)
34 Production+ Finished Goods (1) (2) (3) (4) (5) (6)
35 Production + Maintenance (1) (2) (3) (4) (5) (6)
36 Warehouse+ Finished Goods (1) (2) (3) (4) (5) (6)
37 Warehouse +Maintenance (1) (2) (3) (4) (5) (6)
38 Finished Goods+ Maintenance (1) (2) (3) (4) (5) (6)