study on material handling system for a paper cup manufacturing industry

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A STUDY ON MATERIAL HANDLING
SYSTEM FOR A MANUFACTURING
INDUSTRY
A SUMMER INTERNSHIP
Submitted by
NIVAAS VIGNOPATHY
RA1952001010183
In Partial Fulfillment of the Requirements
For The Degree Of
MASTER OF BUSINESS ADMINISTRATION
SCHOOL OF MANAGEMENT
FACULTY OF MANAGEMENT
SRM INSTITUTE OF SCIENCE AND TECHNOLOGY
KATTANKULATHUR-603 203
September 2020

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DECLARATION
I, Nivaas Vignopathy, hereby declare that the work which is being presented in the summer
internship entitled, “A STUDY ON MATERIAL HANDLING SYSTEM FOR A
MANUFACTURING INDUSTRY” in partial fulfillment of the requirements for the award of
the degree of Master of Business Administration is my own work carried out by me under the
supervision of Dr. E. Pradeep , during the period (17/06/2020) - (17/07/2020) in the school of
management, faculty of management, SRM Institute of Science and Technology,
Kattankulathur. The matter presented in this summer internship has not been submitted
elsewhere for the award of any degree/diploma. I declare that I have faithfully acknowledge,
given credit to and referred to the research work which have been cited in the text and the body
of the report. I further clarify that I have not willfully lifted some other’s work, para, text, data,
results, etc., reported in the reports, books, magazines, journals, reports, dissertations, etc., or
available at web-sites and have not included them in this summer internship and cited as my
own work.
PLACE: KATTANKULATHUR -------------------------------
DATE: 16/09/2020 NIVAAS VIGNOPATHY
Certificate from the supervisor
This is to certify that the above statement made by the candidate is correct to the
best of my knowledge certified that a check of plagiarism has been made on the
software.
Dr. E. Pradeep
Name and Signature of the Supervisor

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BONAFIDE CERTIFICATE
This is to certify that Mr. NIVAAS VIGNOPATHY, (RA1952001010183) School of
Management is a bonafide student of Second Year MBA, School of Management, Faculty of
Management, SRM Institute of Science and Technology, a bonafide student registered for
MBA Degree under the supervision of Dr. E. Pradeep , has satisfactorily completed all the
requirements for the Summer Internship for the award of MBA degree as per provisions of the
MBA regulations. He has successfully completed the Summer Internship and well defended
the presentation before the examiners.
Place: Kattankulathur
Date:16/09/2020
Dr. E. Pradeep Dr. V. M. Ponniah
SUPERVISOR DEAN
INTERNAL EXAMINER EXTERNAL EXAMINER

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ACKNOWLEDGEMENT
I express my heartfelt gratitude to the Honorable Dean Dr. V. M. Ponniah for giving me an
opportunity to gain practical knowledge through undergoing internship training.
I am highly indebted to my Summer Internship Project Guide Dr.E. Pradeep , Assistant
Professor, SRM Institute of Science and Technology, School of Management for his
continuous support, supervision, motivation, and guidance throughout the tenure of my project
in spite of his hectic schedule and helped me to successfully complete the summer internship
project.
I am very grateful to my parents and my family for their support, dedication, and their prayers
to complete the course successful.
NIVAAS VIGNOPATHY
RA1952001010183

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Ⅰ. ABSTRACT
Materials Handling Systems (MHS) can be defined as “the set of all pieces of equipment that
make possible the physical movement within the distribution chain – including the production
chain and the warehouse – of raw material, work in progress and finished goods”. Therefore,
MATERIALS HANDLING SYSTEMS perform a wide range of activities. In general,
Materials Handling refers to the necessary tasks to be performed in order to move a load around
the factory floor as well as to store and freight it. Materials Handling takes place one way or
another along all the links of the supply chain including production, distribution, storage and
retail functions in today’s fierce competitive global markets, customers are demanding
adjustable lot sizes, shorter lead times, higher quality and flexibility; in short, they want it all.
In order to stay competitive in the market, companies need to attain both customer satisfaction
and cost reduction in production operations. Material Handling Systems (MHS) is the place to
accomplish this goal, since they have a direct impact on production. Therefore, the aim of this
study was to design an in-house MHS that could be efficient for the production it serves. With
this intention, a case-study has been conducted in GREENVALLY PAPER PRODUCTS.
During the study, the information gathered through various sources; interviews, observations
and measurements. Further, the gathered data is evaluated according to main pillars of the
theoretical framework, which includes design principles and physical elements, information
and software, human and management. By analyzing the findings from literature review and
empirical study, first problems and challenges related to MHSs are identified. Thereafter,
possible features that the system should possess are elicited and a design is built out of the
selected features. To conclude, the results show that the success is not solely depending on
system’s physical attributes; on the contrary, it is more related to rapid and accurate information
sharing within the system. Another vital element is the interaction between system and the
people, who are utilizing and operating the system. In general terms, the research took MHS
design problems from one-dimensional equipment selection processes and enriches them by
adding information sharing, human and management angles to design steps.
KEY WORDS:
Material handling system, Just- in-time material supply, Information flow.
TABLE OF CONTENT:

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CHAPTER NUMPER TITLE PAGE NUMBER
Ⅰ ABSTRACT 6
Ⅱ LIST OF TABLES 8
Ⅲ LIST OF FIGURES 9
Ⅳ LIST OF FORMULAS 9
CHAPTER NUMBER TITLE PAGE NUMBER
1 INTRODUCTION 10
1.1 INDUSTRY PROFILE 12
2 REVIEW OF LITERATURE 13
2.1 EQUIPMENT
UTILIZATION RATIO
14
3 STATEMENT OF PROBLEM 15
4 OBJECTIVE AND NEED
FOR STUDY
18
5 RESEARCH
METHODOLOGY
19
5.1 RESEARCH DSIGN 21
5.2 SAMPLING DESIGN 21
5.3 DETERMINATION OF
SAMPLE
21
5.4 PURPOSE AND
RESEARCH QUESTIONS
22
5.5 BASIS AND
PRESUMPTION OF THE
PROJECT
23
6 MANUFACTURING
PROCESS
24
7 RESOURCES AND
ADVANTAGES
29
8 STANDARD OPERATING
PROCEDURE
36
9 OBSERVATIONS 38
9.1 HYDRAYLIC LIFTS 40
9.2 PROS OF USING A
HYDRAULIC LIFT
43
10 DATA ANALYSIS AND
INTERPRETATION
42
11 CONCLUSION 51
12 REFERENCES 53
Ⅱ. LIST OF TABLES:

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SL.No TITLE PAGE NUMBER
1 MANPOWER
REQUIREMENT
33
2 IMPLEMENTATION
SCHEDULE
32
3 COST OF PROJECT 33
4 MEANS OF FINANCE 33
5 WORKING CAPITAL
CALCULATION
34
6 LIST OF
MACHINERIES
REQUIRED
34
7
FIXED CAPITAL
45
8 UTILITIES PER
MONTH
45
9 RECURRING CAPITAL 46
10 WORKING CAPITAL
ASSESSMET
47
11 COST PRODUCTION
PER ANNUM
48
12 PROFITABILITY
STATEMENT
50
Ⅲ.LIST OF FIGURES:

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Ⅳ.LIST OF FORMULAS:
SL.No. TITLE PAGE NUMBER
1 MATERIAL HANDLING
LABOR
14
2 LABOR HANDLING LOSS
RATIO
14
3 PROFIT PER ANNUM 51
SL.No. TITLE PAGE NUMBER
1 PROCESS FLOW 11
2 HIERARCHICHAL
STRUCTURE OF
EQUIPMENT SELECTION
20
3 FLOW DIAGRAM OF
PROGRAM
26
4 MANUFACTURING OF
PAPER CUPS
28
5 HYDRUIC LIFT AND
OPERATION
41
6 BENEFITS FROM
OPERATING MATERIAL
HANDLING SYSTEMS
42
7 ISSUE CONSIDERED
IMPORTANT WHEN
EVALUATING MATERIAL
HANDLING PROVIDERS
45

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CHAPTER 1
INTRODUCTION
The configuration of production equipment and departments and the design and arrangement
of a proper material handling system is referred to as the facility planning. The design and
arrangement of material handling system could be more important problem in spite of the fact
that the first attempt is an important issue in facilities planning. These two issues have been
simultaneously investigated by researchers. New manufacturing paradigms e.g. lean and agile
manufacturing have been occurred on the other hand in order to internationalized a product and
have a quick response to market demands with reduced prices. Reducing costs and sale price
and ultimately increasing profitability are one of the major concerns of a manufacturing
company in order to stay in such a competitive environment. Material handling cost is one of
the principle costs that need to be reduced. One of the basic goals of a manufacturing company
is to choose an efficient and effective material handling system that can result in the efficient
utilization of workforce, reduced fuel costs, production time and prices and increased
profitability and productivity of the plant.
Material handling activities and equipment can account for 55% of all plant space, 25% of the
number of workforces, 87% of the total production time, and 15-70% of the total manufacturing
cost. There are some important factors that influence the selection of a proper material handling
equipment such as system flexibility, effective and efficient use of labor, enhanced
productivity, and reduced lead times and costs. A plant’s operating cost can be primarily
reduced by 15-3-% through the use of an efficient material handling equipment.
The process of material handling involves different functions such as the movement and
storage in a manufacturing plant or a warehouse, the control and protection of raw materials,
products and finished goods during the process of cleaning, preparation, manufacturing,
distribution, consumption and disposal related to their packaging.

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FIGURE 1: PROCESS FLOW
Different studies have focused on methods, mechanical equipment, systems and related
controls that are used to achieve these functions. A wide range of material handling equipment
is available nowadays such as industrial trucks, fork lifts, conveyor belts, automated guided
vehicle’s (AGV’s), trolleys etc. for achieving the different functions related to material
handling system. Material handling equipment are classified into main groups of conveyors,
industrial trucks, cranes, AGV’s, industrial robots, automated storage and retrieval systems in
the literature.

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1.1 INDUSTRY PROFILE
GREENVALLY PAPER PRODUCTS:
GREENVALLY Paper Products introduce ourselves as a reputed organization
that excels in the Leading Manufacture & Suppliers Eco Friendly Paper Cups in
India. The company's commitment towards quality has always been the driving
force behind its success and growth since its inspection and it continues to be its
guideline into the future.
Our main aim to maintain quality consistency and to provide excellent serve to our respectable
customers at fair market prices.
We believe that quality is a comprehensive aspect and should be ingrained in every stage from
raw materials to processes and finally in the final product. So, we follow rigid quality control
procedures, from the raw material stage to the packing stage.
Our products have been widely appreciated in the international market.
Through innovative design and superb craftsmanship, we are continually expanding our range
of products. The exceptional quality and the huge variety will astonish you. The process
includes biodegradable and environment friendly paper. Ink used is 100%food grade with food
grade polylamination low order inks are used in rinting which are compatible with food
packing.
Consistency in quality assured Dimensional stability assured easy to handle Hygienic Cup
quality to contain liquid for longer period.

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CHAPTER 2
REVIEW OF LITERATURE
A brief description about the literature relating to this research topic is given below, the cost
factors include investment cost, labor cost, and anticipated service hours per year, utilization,
and unit load carrying ability, loading and unloading characteristics, operating costs and the
size requirements are the factors for evolution of material handling equipment.
(Domingo et al. (2007).
Obsolete handling systems can be replaced with more efficient equipment’s. The effectiveness
of the material handling system can be measured in terms of the ratio of the time spent in the
handling to the total time spent in production. This will cover the time element. (Bourden, et.
al.,1980)
The cost effectiveness can be measured by the expenses incurred per unit weight handled. It
can be safely said that very few organizations try to collate the expenses and time in this manner
so as to objectively view the performance and to take remedial measures. Some of the other
indices which can be used for evaluating the performance of handling systems are listed below:

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2.1 EQUIPMENT UTILISATION RATIO: (Domingo et al. (2007).
Equipment utilization ratio is an important indicator for judging the materials handling system.
This ratio can be computed and compared with similar firms or in the same over a period of
time.
In order to know the total effort needed for moving materials, it may be necessary to compute
Materials Handling Labor (MHL) ratio. This ratio is calculated as under:
In order to ascertain whether is the handling system delivers materials work centers with
maximum efficiency, it is desirable to compute direct labor handling loss ratio. The ratio is:

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CHAPTER 3
STATEMENT OF THE PROBLEM
Customers are demanding smaller lot sizes, shorter lead times and higher quality; in other word
they want it all. By streamlining material flow companies can increase productivity and
delivery performance dramatically, which is the only way to stay competitive in the global
market (Allred, 1996).
However, smoothening material flow, especially in assembly areas, is not an easy job. In
manufacturing plants, assembly areas usually contain storage of components that will be
assembled soon and supply of these components is usually problematic regarding limited
spaces in workstations.
Thereby, a coordinative information link between material supply and production departments
is one of the prerequisites of achieving an efficient in-house MHS. To be able to investigate
mentioned areas in a real-life situation, a case company, GREENVALLY PAPER
PRODUCTS, has been selected and it will be presented in the following section.
GREENVALLY PAPER PRODUCTS is a paper cup production company situated in the
industrial estate area, Puducherry.
The company is currently using manpower as an equipment to handle the different types of
materials used in paper products industry. However, the company is facing problems while
using this type of material handling equipment such as more time taken by a worker. injuries
caused due to movement through large distances, reduced worker efficiency due to excessive
movement of materials etc. Therefore; the company has decided to change the type of material
handling equipment in order to eliminate or at the very least overcome these problems.

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In manufacturing plants, assembly areas usually contain storages of components that will be
assembled soon and supply of these components is usually problematic regarding limited
spaces in workstations. Correspondingly, it is also important to replace the consumed materials
in convenient time intervals to keep the assembly lines running.
Domingo et al. (2007) point out that companies are suffering from the trade-off between
material supply to assembly lines with high delivery performance or keeping buffer levels low
on the shop floor. Allred (1996) argued that when workstations or point-of-uses cannot get the
material they need, when they need it, productivity drops dramatically and it is commonly the
largest single cause of factory inefficiency.
Transportation of materials to the assembly workstations and collection of finished products is
one of the areas that create waste within the company, and by improving in-house MHS, just-
in-time (JIT) material supply and decreased work-in-progress inventory can be attained
(Sanchez & Perez, 2001; Allred, 1996). However, solely improving MHS’s performance is not
the ultimate solution for companies. Kaipia (2009) marks the importance of information
sharing that supports material flow. Flexible material flow needs frequent updates based on
accurate information, without it, waste is created in form of excess inventories.
Thereby, a coordinative information link between material supply and production departments
is one of the prerequisites of achieving an efficient in-house MHS.
To be able to investigate mentioned areas in a real-life situation, a case company,
GREENVALLY PAPER PRODUCTS, has been selected and it will be presented in the
following section. GREENVALLY PAPER PRODUCTS is a paper cup production company
situated in the industrial estate area, Puducherry.

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The company is currently using trolleys as an equipment to handle the different types of
materials used in pharmaceutical products. However, the company is facing problems while
using this type of material handling equipment such as more time taken by a worker to move
the trolley, injuries caused due to movement through large distances, reduced worker efficiency
due to excessive movement of materials etc. Therefore; the company has decided to change the
type of material handling equipment in order to eliminate or at the very least overcome these
problems.

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CHAPTER 4
OBJECTIVES AND NEED FOR STUDY
4.1 OBJECTIVES
• To find out the quality defects present in the production process.
• To find out the ways in which material is being handled at the industry.
• To minimize delays and interruptions by making available the materials at the
point of use at right quantity and at right time.
• To increase the productive capacity of the production facilities by effective
utilization of capacity and enhancing productivity.
• To analyze safety in material handling through improvement in working
condition.
• To maximize utilization of material handling equipment.
• To prevent damages to the materials.
4.2 NEED FOR THE STUDY
• Understand and evaluate material handling at the Industry.
• To study the effect of the effect of material handling and the use of technology
in it, the study helps to understand the quality parameters in particular.
CHAPTER 5

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RESEARCH METHODOLOGY
A paper cup is a disposable eco-friendly material composed of Paper and PE coated together
prevent liquid from leaking out or soaking through it, also recycle it and is used widely.
The GREENVALLY Pvt. Ltd. is a paper product manufacturing company, which produces
100% biodegradable products out.
The GREENVALLY production starts with the inward delivery of raw materials which is
purchased in unit tons, they store the poly coated printed papers (raw material) at a dry storage
room, that is maintained at room temperature, as too much moisture will cause damage to the
raw material.
The stored raw materials are bought to the shop floor by using man-power, which causes a
high occurrence of being damaged due to the mishandling and also, may occur while the man-
power lifts the raw materials, the material are shifted using tray and carry them manually to the
process plant (shop floor).
We conducted an analysis on the material handling system, which we found that they got a 5%
rejection due to the quality issues due to improper manual handling of the raw materials, the
paper edges were bent and folded which lead to improper heat sealing of top and bottom sheet
during the production process.
During the analysis we had suggested to use a trolley which could help the operator to transport
the raw material from the storage area to the shop floor to feed the materials. Hence a
customized trolley which enabled the manual hydraulic jack were implemented in order to
solve the purpose.

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The customized trolley had the load-capacity of 250 kilograms and also had enabled an
attached support plate which could be moved up and down vertically and lifted up to height of
4 feet to feed the material at the feed-table with ease.
It was predicted to be found that, after the implementation of the trolley the production rate
had drastically improved as the trolley was able to move a high amount of material at one move
than earlier. Also, compared to earlier quality aspects there as a sudden decrease in the quality
defects.
A standard operating procedure (SOP) was provided to the operators which enabled them to
use the newly suggested trolley with ease. After the implementation it is predicted that the
organization will be able to achieve efficient, quality products and consistency of performance.
At present only one-man power per shift has been enabled for the entire mode of operation at
the shop floor and the cost of labor has also been brought down.

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5.1 RESEARCH DESIGN
A preliminary questionnaire is developed using five-point Likert scales. The independent and
dependent variables are identified. The questionnaire is pre tested several times to arrive at
appropriate wording, format, length and sequencing of the questions. Pre – test feedback is
used to refine the questionnaire until it is ready for the data collection. After fixing the questions
for the independent and dependent variables based on the type of questions different values are
assigns to the Likert scale.
5.2 SAMPLING DESIGN
Convenience sampling technique (Non-probability sampling technique) was adopted to select
samples from the population.
5.3 DETERMINATION OF SAMPLE SIZE
The pilot study was conducted among 144 samples, ten from each group in order to verify the
reliability and validity of the questionnaire and also to find out the sample size of the research.
5.4 PURPOSE AND RESEARCH QUESTIONS

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In background and problem formulation sections, several problems within companies’ in-house
logistics systems are introduced regarding different aspects such as inventory levels, MHSs,
information link, and so forth.
Further MHS’s dilemma between high delivery performance and low buffer levels is stated
and referred as one of the biggest causes of factory inefficiency. In addition, it is argued that
how to overcome this dilemma is largely neglected in MHS design literature. Hence, the
purpose of this thesis is:
To investigate how an in-house material handling system could be designed to assure high
delivery performance while maintaining low buffer levels in order to achieve this purpose,
three research questions have been formed:
RQ1.What problems and challenges affect the delivery performance and buffer
levels in an in-house material handling system?
The first research question intends to investigate possible challenges and problems that are
associated with in-house material handling system. Identified problems will be limited
according to their impact on delivery performance and buffer levels on the shop floor.
RQ2.What material handling system concepts/features can overcome the
identified problems and challenges?
The second research question is designed to elicit different material handling system
concepts/features from literature that can overcome identified problems.
RQ3.Which features should be selected for an in-house material handling
system to assure high delivery performance and low buffer?

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The third research question aims to build a design for an in-house material handling system, in
order to assure high delivery performance and low buffer levels. Features of the design will be
selected among the ones mentioned under research question two.
5.5 BASIS AND PRESUMPTION OF THE PROJECT:
i. The process of manufacture is on the basis of double shift of eight + eight hours per
day with three hundred working days in a year
ii. Labor and wages mentioned in profile are as per prevailing local rates
iii. Interest rate at 12.5% considered in the project
iv. The Promoter contribution will be 10% of the total project cost. However, it may be
varying for women entrepreneurs
v. Subsidy and other concessions may be applicable as per the MSME Act of Tamil Nadu,
2006.
vi. The capacity of the plant 40,000 nos. of paper cups per day on the double shift basis.

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CHAPTER 6
MANUFACTURING PROCESS
The latter is the reason why the paper cup industry has grown and developed exponentially
over the past couple of years. Sure individuals make them for events, but not as much as
businesses order them for their businesses. Now as you are reading this, you want to get very
best coffee paper cup in the industry without going through a lot of hassle.
And while you might have read up and gotten tips and tricks on how to get the very best in
your industry, you should take note of one thing – the paper cup manufacturing process.
It is this process that will guarantee you that you are getting your money’s worth. Sure they
may all look the same in the end and serve the same purpose, but the quality differs a great deal
depending on the manufacturing process that occurred.
Below is the reason why we are priced as the very best in coffee paper cups in the world – the
paper cup manufacturing process from start to finish.
Raw Material: PE Coated Paper.
The material used in this first step determines the outcomes of the entire product at the very
end. With paper cups, there are many options to choose from. But the two major raw materials
manufacturers make use of are waxed paper and PE coated paper. At a glance, from an
untrained individual eye, they probably look the same with minimal differences of any.
Well, the two differ on many things but PE coating material comes out on top in the making
of paper cups. It provides a very strong exterior and barrier to grease and moisture. It is also
perfect for use with hot drinks – all factors that waxed papers do not feature.
This first step involves the processing of the PE coating paper.

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Print
The color will obviously go on the outside of the coffee paper cup right? So what is the big
deal of having the color approved by health institutions one might wonder? Well, the fact that
it isn’t on the inside does not mean that there are no chances of getting in contact with the ink
– licking the print is inevitable. That said our printed paper cups is food grade water based ink
which has been passed as fit for human consumption.
Die cutting
Simply put, dye cutting is the process of cutting a shape out of a material be it metal, wood
plastic but in this case PE coating paper. Often a machine is used for this process. This is a
perfect process which allows the cutting of large amounts of shapes in a short time frame.
For the process, specially designed sharp blades are designed. The blades are curved into the
right shape before mounting onto a strong backing.
Remove waste
After the die cutting process, a lot of waste is produced. Before the shaped PE coated paper
can proceed to the next stage of manufacture, it needs to be gotten rid of the waste materials.
This is normally done by hand to ensure accuracy in the whole process. You wouldn’t want to
have cups with holes .
Forming and molding
After the shapes have been cut out and have been extracted and separated from the waste, they
are then feed into a machine that gets to transform them into paper cups. The machine is
complex applying various principles in physics but that is boring.
The only thing you should know and take away form this is the fact that the paper cup shapes
are glued together tightly such that they cannot fall apart under any circumstance.
The process is far tedious to be done by hand. and if it was to be attempted, there would be
high levels of inaccuracies in the molding of the paper cups.

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We have proposed to use the Automatic Paper Cup Forming Machine for our manufacturing
process of Paper Cups. The general structure of paper cup forming machine is composed of
three stages.
They are:
1. The first stage: mainly finishes transmission of the paper cup's side‐wall paper,
shaping side‐wall and transferring them to the second stage after shaped.
2. The second stage: transmission of the cup‐bottom paper, shaping cup‐ bottom,
joining the shaped side‐wall and cup‐bottom, automatic transmission and
discharging of the shaped cup, and curling the shaped cup's edge.
3. The third stage: mainly includes 45-degree angle separating, preheating, curling
bottom, rouletting, curling rim and so on mechanisms, which are the important parts
in finishing paper cup.
FIGURE 3 :FLOW DIAGRAM OF THE PRORAM

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Packing and shrinking
Next is the packing process. For this, there are two levels of packing. In the very first packing
process, the coffee cups are stacked together in definite numbers of say 12 cups each and then
they are shrink wrapped. Shrink wrapping is the process of wrapping products in clear plastic
film. It is wound onto the product by a machine which uses heat to shrink the plastic around
the paper cups. This plastic covering provides for a perfect protection from dust and scratches
as well as proof that the products are indeed new and fresh from the manufacturer. You could
think of the shrink wrap like a seal of a bottle.
Cartoning
This is the next step of packing. After they have been stacked, shrunk and group into groups of
six, the custom paper cups are then packaged into boxes before shipping. Each carton carries a
maximum of 6 batches. To be able to accommodate the cups, the carton is cuboid in shape and
features a height that is perfect for the cup batches.
Warehousing
This is a crucial step of manufacturer. Sure it does not add any value to the product itself, but
it allows us to provide you with splendid service. When you place an order, you will need it
delivered to you all at once. Delivery of the products in bits will not only be an inconvenience
but also expensive.

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FIGURE: 4 MANUFACTURING OF PAPER CUPS
The warehouse is used to hold the coffee paper cups until their manufacture is complete and
ready for delivery. Which takes us to the next and last process – delivery.
Delivery
While the cups are not made of glass and one might argue that since they cannot break they
could very well be transported by any means, we take the liberty of ensuring that your paper
coffee cups get to you in one piece. No dents will be sustained by the cups. The delivery is
made on time if not before time. This make us perfect to partners.
The Paper cup manufacturing process that we employ is designed to have you enjoy the best
quality paper cups there are in the market. Every step is crucial and very important to the final
end product you receive for your business. Do not compromise on your marketing quality –
give us a call today for a free invoice.

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CHAPTER 7
RESOURCES USED AND ADVANTAGES:
A paper cup is a disposable made out of paper and after lined with plastic or wax prevent liquid
from leakage out or soaking by paper. Paper cups are made from renewable resources. The
cups should be made from food grade paper which is hygienic in nature.
It is capable for holding both hot & cold liquid for longer time. The uses of paper cups have
wide range. Give the rapid changes in life style; it is the right time to enter the consumer
segment to popularize the home consumption of paper cups. There are several inherent
advantages in using Paper Cups as compared to cups of other materials.
These Paper Cups are gaining popularity all across the globe as a beautiful and stylish way of
minimizing exposure to food borne infections. Paper Cups have numerous advantages like;
they are manufactured in a very simple process using Food Grade Raw Materials with least
waste and are easiest to recycle.
They are ideal for individual servings at all kinds of parties, functions, picnic occasions,
marriages, chat, tea & food joints, etc. Non-toxic in nature, the shapes and surface designs on
these paper cups are attractive and present an inviting look. These paper cups can also be
custom printed with an outlet's logo, brand punch line or advertising message.

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PRODUCTS AND ITS APPLICATION
This paper cups are being used of drinking Tea and Cool Drinks. The paper cup finds extensive
use in Railways, Functions, Festivals, Hotels, Meetings, household appliances, and domestic
applications. Our product ranges from 50 ml to 250 ml, this cup manufacturing unit will be set-
up as a small-scale unit.
Now our people and government have the awareness to control the pollution and all are
engaged to use the eco-friendly products. Each plastic cup can take 50-80 years to decompose
and that are ruining the nature as well human lifetime.
As there is a good production of instead of plastic cups, weight less as well as easy to carry all
vendors, mainly no environment pollution, increase the demand of paper cups, user customer
is to be encouraged in the modern days.
DESIRED QUALIFICATION FOR PROMOTER
Bachelor of Science in Paper Science and Engineering or Master Degree in Paper Engineering.
INDUSTRY OUTLOOK AND TREND
Industry outlook for this industry is very encouraging in view of increasing awareness and
rapidly changing lifestyle. Demand for paper cups has shown increasing trend year to year
during 10 per decade. Being more eco- friendly, hygienic and easy to use, the trend is positive.
The user segments like corporates, educational institutes, food suppliers, hotels, restaurants,
super markets show high volume growth results in 15 to 18% growth trend.

31. 31
MARKET POTENTIAL AND MARKETING ISSUES, IF ANY
A wide range of paper cups are now produced and marketed in India. The paper cups are
reckoned to be a high potential business for India. Manufacturing Paper Cups is the purpose of
satisfying needs and wants of Consumers is the market place. Developing a strategy for
delivering an effective combination of food grade quality and cost effective features for
consumers within the target market is done.
The prospects of paper cups depend on the value of customers who utilize it. But in our country
paper cups are used by all the people as it is easy to use, hygienic and eco-friendly. Hence, per
capital consumption has increased and the demand for it is recognized.
While the demand for paper cups has shown a good growth, the company will be successful in
strategizing its market operations.
As paper cups are a product of daily consumption and necessity, their marketing will not be a
problem as the consumers are aware of the advantages of using paper cups.
The raw materials are indigenously available and the manufacturing process is also simple.
Paper Cup find potential market in IT companies, Educational Institutions Canteens, Industrial
Canteens, Restaurants, Fast Foods, Catering People, Tea Shops, Paper Product Dealers and
Super Markets.
RAW MATERIAL REQUIREMENTS
• Printed PE Paper • Bottom Reel • Packing Material

32. 32
PROCESSES INVOLVED
We have proposed to use the Automatic Paper Cup Forming Machine for our manufacturing
process of Paper Cups. The general structure of paper cup forming machine is composed of
three stages.
They are:
• The first stage: mainly finishes transmission of the paper cup's sidewall paper, shaping side-
wall and transferring them to the second stage after shaped.
• The second stage: transmission of the cup-bottom paper, shaping cup bottom, joining the
shaped side-wall and cup bottom, automatic transmission and is charging of the shaped cup,
and curling the shaped cup's edge.
. • The third stage: mainly includes 45-degree angle separating, preheating, curling bottom,
curling rim and so on mechanisms, which are the important parts in finishing paper cup.
1. MANPOWER REQUIREMENT
Sr. No. Particulars Nos Salary
1 Production manager 1 12000
2 Sales manager 1 8000
3 Accountant 1 10000
4 Store worker 1 8000
5 Skilled worker 2 16000
6 Unskilled worker 4 16000
7 Watchman 1 6000
Total 11 76000

33. 33
2. IMPLEMENTATION SCHEDULE
Sr. No. Particulars Time Period
1 The Time requirement for preparation of project
report
Two months
2 Time requirement for selection of site One months
3 Time required for registration as small scale unit One week
4 Time required for acquiring the loan machinery
procurement, erection and commissioning
Three months
5 Recruitment of labourer etc. One month
6 Trial runs Three months
3 .COST OF PROJECT
Sr. No. Particulars Rs.in lakhs
1 Land and building 35.00
2 Plant and machinery 10.50
3 Miscellaneios assets 3.50
4 P & P expenses 2.50
5 Contingencies @ 10% on
land building and plant and
machinery
4.55
6 Working capital margin 5.10
61.15
4 . MEANS OF FINANCE
Sr. No. Particulars Rs. lakhs
1 Promoter's contribution 18.35
2 Bank Finance 42.80
3 61.15

34. 34
5 . WORKING CAPITAL CALCULATION
Sr.
No.
Particulars Rs.
lakhs
Stock
Period
days
Promoter
Margin
Margin
amt.
Bank
finance
1 Salaries and
wages
0.76 30 1 0.76 -
2 Raw material
and
Packaging
materials
2.91 30 0.5 1.455 1.455
3 utilities 0.32 30 0.5 0.16 0.16
4 debtors 6.82 30 0.4 2.728 4.092
Total 10.81 5.103
6 . LIST OF MACHINERY REQUIRED
SR.No. Particulars Rs. Lakhs
1 Paper cups making machine 8.50
2 Moulds, dies 2.00
Total 10.50
It is necessary to recognize that in a globalize economic environment the business outlook for
any paper product will depend on the global demand supply balance for that product. For Paper
Cups there is production less capacity at a global level which was built up over the last decade
or so in response to a boom in global growth and increased levels of awareness of eco‐ friendly
products. The growth of the manufacturing sector will be largely influenced by the growth
consumption. A wide range of paper cups are now produced and marketed in India.
The paper cups are reckoned to be a high potential business for India. Manufacturing Paper
Cups is the purpose of satisfying needs and wants of Consumers is the market place.

35. 35
Developing a strategy for delivering an effective combination of food grade quality and cost‐
effective features for consumers within the target market is done.
The prospects of paper cups depend on the value of customers who utilize it. But in our country
paper cups are used by all the people as it is easy to use, hygienic and eco‐friendly. Hence, the
per capita consumption has increased and the demand for it is recognized. While the demand
for paper cups has shown a good growth, the company will be successful in strategizing its
market operations.
As paper cups are a product of daily consumption and necessity, their marketing will not be a
problem as the consumers are aware of the advantages of using paper cups. The raw materials
are indigenously available and the manufacturing process is also simple.
LIMITATIONS
There are some limitations incurred in this study that can be considered in future researches.
For example, the scope was only limited to one particular industry at Puducherry region of
Tamil Nadu. Therefore, it is suggested that future studies should test the variables by
focusing on other areas and considering larger scope. Another limitation in this study refers
to the difficulty of data collection, due the pandemic of Coronavirus (Covid-19).
CHAPTER 8

36. 36
STANDARD OPERATING PROCEDURE
• Raw materials are collected and brought to the storage room
• The materials are distributed, after which the operator or the store keeper uses the
hydraulic lift to place the materials.
• Previously, a tray or cardboard boxes were used to collect and ship the items which
caused damage to the product, waste of manpower and time.
• Now, using the hydraulic lift, the materials are transported to the work table by
raising the level equal to that of the table.
• The operator then feeds this into the machines.
• The sheets are pre-cut and placed accordingly into the machine.
• Water spraying technique is used in comfortably bending the sheet into a cone shape
but without the bottom part being closed completely.
• Heat sealing is used to tightly glue and hold the shape together.
• Another machine that is linked with the primary one partly cut sheets that are in roll
form in circular shapes.
• These pieces are then attached to the bottom of the cone shaped cut pieces on the
same machine layout using heat sealing technique.
• The last section is sealed completely and the shape of the cup is complete and rigid.
• The completed cups are then stacked upon each other using rods and assembled
next to each other.
• An operator or a technician collects it and asses the cups for any damage or
improper shape and discards it.
• Then the cups are placed on a tray and monitored for some time. This ensures the
rigidity, holding shape and quality is assured.
• Then, the final items are packed in protective coverings and ensured that each
packet contains 100 units of cups each.
• These packs are taken to the storage room where they are arranged in boxes ready
to be shipped and distributed.

37. 37
CHAPTER 9
OBSERVATIONS
This small scale company, as much effective as it is, the following were noted:

38. 38
1. PRODUCTIVITY:
Since every person is given two or more tasks, out of which one is their skill, and the
other one given because of the lack of factors such as machine power, the productivity
is slightly decreased.
2. MIDDLE MANAGEMENT:
More people in the middle management and supervising department can drastically
increase the productivity and also aid in the work being more efficient.
3. TIME MANAGEMENT:
Like in every industry, there is a considerable time that’s being un accounted for. Using
a better time management system by planning prior can lead to increased results in
terms of quantity as well as assurance in quality.

39. 39
FIGURE 5: HYDRAULIC LIFTS AND OPERATION
9.1 HYDRAULIC LIFTS:

40. 40
- Hydraulic lifts work on a basic principle: to go up, a pump pushes oil into the cylinder,
pushing the piston (which pushes the lift car) up.
- To go down, the valve opens and oil is allowed to flow back into the reservoir, and is pushed
back using the gravitational force of the lift car. The diagram above shows this system.
- When the valve is closed, the oil can only go from the reservoir into the cylinder. When
the valve is open, the oil can only flow from the cylinder back into the reservoir.
- The controls in the lift car make the pump operate, moving the oil. When a floor is reached,
the pump is switched off and the lift car sits on top of the piston, held in position by the oil
which is trapped in the cylinder.
- The position, size and operation of the cylinder can be one of two options – ‘holed’ or ‘hole-
less’.
- A hole-less hydraulic lift means no need for a deep pit for the cylinder. The pistons are direct
action, and are mounted on the floor of the pit in line with the bottom corners of the lift car.
- The system operates like a jack, and restricts travel to around 20-30m at most. This is not as
common but allows for use where space is restricted going down, travel is short and a hydraulic
system is required.
9.2 PROS OF USING A HYDRAULIC LIFT:

41. 41
With the machine room holding all the machinery, you won’t need space above the shaft to
hold machinery (which traction lifts do). The system is also supported by the floor/pit so should
not need any kind of reinforcement.
The classic ‘dead drop’ situation is not possible in a hydraulic lift as there are no cables –
though this doesn’t often happen in reality. If the system breaks, then the lift will only drop at
the speed which oil can leak from the system.
Finally, hydraulic lifts are cheaper than traction lifts so if budget is key then this could help
make the decision.
CHAPTER 10
DATA ANALYSIS AND INTERPRETATION

42. 42
FIGURE 6:
After observing the industry, it was clear that a lot of man power was wasted in transport of
products from one point to another using objects such as trays and cardboard boxes. The
amount of damaged products had to be replaced before shipment was done. This happened
during the quality analysis stage using random sampling technique. Thus, the use of hydraulic
lifts was suggested.
It is seen that, as compared to last year (2019), the efficiency was improved to about 3%.
The uptime was maximized to 6% overall. The accuracy was improved to 7%, and the ROI
was maximized. Because of implementing the SOP, the quality of the products was drastically
increased.
It is clearly seen that there was a 4% rise in the improvement of quality of the products. The
response received form the customers and the time consumed to complete the entire operation

43. 43
from beginning till the end was substantially quicker. It was seen that the time taken to replace
the items that were damaged was saved and the overall process were done comparatively faster.
FIGURE 7:
Though there are tremendous advantages to using such a method, issues have to be addressed.
Three major factors were considered, namely:
1. Budget: A major factor is budget. Considering that the firm is a small scale business, a
small investment was required for the lift. Also, timely maintenance was required to
ensure proper functioning of the instrument.
2. Deliver on schedule: A considerable amount of time was saved while implementing the
SOP. Thus, the products were delivered on time almost always.
3. Price: there was a 3% increase in price of the products. But nothing drastic.
INSPECTION AND QUALITY CONTROL:

44. 44
“GREENVALLY Products” will strictly adhere to the International FDA standards and Indian
BIS standards in the process of manufacturing Paper Cups from procuring high quality food
grade raw materials to hygienic methods of packaging, as we know that the satisfaction of the
customers is the foundation of any business. 9 10 8.
PRODUCTION CAPACITY PER ANNUM:
Quantity: 40,000 nos. of paper cups per day 1,20,00,000 nos. of paper cups per annum (300
days) 9. POLLUTION CONTROL The technology adopted for making paper cups is eco‐
friendly. Cup forming process is totally automatically done by the machine, only feeding and
packaging involves manual work.
The scrap papers created out of this manufacturing process also can be sold for recycled paper
converters. Hence there is no chance of any pollution out of this industry.
FINANCIAL ASPECTS:

45. 45
1. FIXED CAPITAL:
Machinery and Equipment:
S. No. DESCRIPTION QUANTITY Rate (Rs)
1 Automatic Paper
Cup Forming
Machine
1 nos. 600000
2 Office equipment
(Computer, Table
Chair etc..)
50000
Total 650000
2. UTILITIES PER MONTH:
S.No. DESCRIPTION AMOUNT
1 1 Power 5 HP 750 Units @
Rs. 5 per Unit
3750
2 Machine Oil, grease & other
consumables
1000
Total ( c ) 4750
3. RECURRING CAPITAL:

46. 46
(A) Raw Material Per Month:
S.No. DESCRIPTION QTY RATE AMOUNT
1 Printed Blank
Side Wall
2500 Kg 75.00 187500
2 Bottom Reel
Paper
800 Kg 72.00 57600
3 PP cover &
Carton Boxes
As required 10000
Total ( A ) 255100
(B) Salaries & Wages Per Month
S.No. DESIGNATION NO SALARY AMOUNT
1 Production cum
Marketing
Manager
(Proprietor)
1 7500 75000
2 Machine
Operators
2 5000 10000
3 Checking &
Packaging
Women Office
Assistant
2 3000 6000
4 OFFICE
ASSISTANT
1 3000 3000
TOTAL 26500
Perquisites 15% 3975
Total (B) 30475
( C ) Other Expenses Per Month:
S.No. DESCRIPTION AMOUNT

47. 47
1 Rent 5000
2 Marketing expenses &
Advertisement
3000
3 Postage and stationery 250
4 Repairs and maintenance 500
5 Traveling and transportation 1000
6 Insurance 250
7 Telephone & Mobile 2000
8 Packing Materials 500
Total ( c ) 12500
RECURRING EXPENDITURE PER MONTH:
a+b+c+d = Rs. 3,02,825/-
Recurring Expenditure for three months - Rs. 9,08,475/-
4. WORKING CAPITAL ASSESSMENT:
S.No. DESCRIPTION AMOUNT(Rs)
1 Raw Material
(Required for one month)
2,55,100
2 Work in progress
(Required for one month)
43750
3 Finished Good
(Required for 15 days)
150000
4 Bill receivable
(Required for 15 days)
200000
Total
say
648850
650000
5. TOTAL FINANCIAL ASPECTS:
a . Total project cost

48. 48
A. Plant & Machinery - 650000
B. Working capital - 650000
Total 1300000
Means of Finance
Total Project cost 1300000
Promoter contribution 10% 130000
Total 1170000
finance required from the Bank 11,70,000/-
b. Cost of Production Per Annum:
S.No. DESCRIPTION AMOUNT
1 Total recurring cost 3633900
2 Interest on Bank Loan
12.5%
146250
3 Total Depreciation on
Machinery &
Stabilizer@15%
90000
4 Total Depreciation on
furnitures and other
equipments 20%
5000
Total 3875150
6. TURNOVER PER ANNUM:

49. 49
By sale of 12000000 nos, of Paper Cups of sizes ranging 150 ml & 210 ml: (average) @ Rs.
0.39 Rs. 46,80,000/-
11. Profit Per Annum
Tornover- Cost of Production
4680000- 3875150
=8,04,850/-
16. % of profit on sales = Profit annum X 100
Turnover
=8.04.850 X 100
4680000
=17.2%
17.rate of return = Profit/annum * 100
Total Capital investment
8.04.850 X 100
1300000
= 61.91%
7. BREAKEVEN ANALYSIS:
Fixed expenditure per annum: Rs
Interest on Loan 146250
Total Depreciation 95000
40% of salary and wages 146280
40% of other expenses & Utilities 82800
TOTAL 470330
(1) Profit per annum - Rs. 8,04,850/-
Break Even Point = Fixed Cost/annum 100
fixed cost/annum + Profit/annum
= 470330×100
1275180
= 36.88% (Rs. In Lakhs)
8. PROFITABILITY STATEMENT:

50. 50
S.No. Year
Capacity
utilization
1
65%
2
70%
3
75%
4
80%
5
85%
6
90%
1 Turnover 46.80 49.14 51.59 54.17 56.88 59.72
2 Raw
materials
30.61 32.14 33.74 35.43 37.20 39.06
3 Manpower 3.65 3.83 4.02 4.22 4.43 4.65
4 Utilities 0.57 0.59 0.62 0.65 0.69 0.72
5 Other
expenses
1.50 1.57 1.65 1.73 1.82 1.91
6 Depreciation 0.94 0.83 0.73 0.64 0.57 0.51
7 Total
Interest
1.70 1.48 1.16 0.86 0.54 0.51
8 Repayment
of loan
1.24 2.48 2.48 2.48 2.48 2.56
9 Total (2 to
8)
40.21 42.92 44.40 46.01 47.73 49.92
10 Profit before
tax
6.59 6.22 7.19 8.16 9.15 9.80
11 Provision
for tax
1.50 2.00 2.50 3.00 3.50 4.00
12 Profit after
tax
5.09 4.22 4.69 5.16 5.65 5.80
13 Less
depreciation
0.94 0.83 0.73 0.64 0.57 0.51
14 Cash accrual 4.15 3.39 3.96 4.52 5.08 5.29
CHAPTER 11

51. 51
CONCLUSION
Brand equity is regarded as an important criterion for influential brand success. For this reason,
looking at the factors that can help firms to reinforce their brand equities is vital. The main
objective of this study was to examine the connection between product innovations and brand
equity in automotive industry.
The findings showed that product innovation plays an important role in building brand equity
and motivating brand success. The study also confirmed that by focusing on product design
with innovative and differentiated features, firms can obtain favorable brand images as a result
of optimistic consumers’ perceptions.
This study also proved that product innovation has significant positive relationship with all
scope of brand equity; namely brand awareness, brand leadership, brand loyalty and brand
image. By investigative the relationships between the stated variables, it will reduce existing
gaps in the literature and provide significant contribution to brand equity theory by confirming
product innovation as key driver of brand success. It is believed that by focusing on product
innovation, firms can gain competitive market power and minimize competitive threats.
A number of decision-making implications can be revealed from the findings of this paper.
For instance, product innovation is a key strategic factor that should be considered while
designing branding strategies in order to enhance brand equity.
Moreover, most of past Studies on product innovation and brand equity were conducted in
western cultures. It is suggested that automotive brand managers should put sufficient
investments in this Strategic factor in an attempt to develop favorable brand image and positive
consumers’ evaluations.
In this context, organizations should give greater attention to the importance of introducing
new products with differentiated features such as quality and attractive Product design.

52. 52
Moreover, business practitioners should be aware about the power of product innovation in
influencing customers’ word of mouth and future purchase behavior.
In conclusion, this study reveals that product innovation plays an important role in driving
brand success; because it reflects the characteristics and features of the designed product that
influence consumer’s demand and affect brand image. It is suggesting that automotive
manufacturers should ensure the innovation of their products consistently.
For example, product design, intrinsic and extrinsic product attributes, appearance,
performance and technological features are some of the important aspects that may affect
consumers’ purchase decisions and overall brand evaluation.
Thus, automotive brand managers are advised to focus on product innovation activities such as
creating new products with competitive features that are better or equivalent to those introduced
by other competing brands. Such activities would enhance brand equity and improve brand
performance in the long run.
CHAPTER 12
REFERENCES

53. 53
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