Apr Limited Case Study

APR Limited was a Thappar group company engaged in various activities such as pulp, packaging, leather footwear and soyameal. The company had to increase its production of rayon grade pulp and also focus on reducing its costs substantially. In order to do this first the company decided to focus on the wood logistics as the company was holding about 6 months of inventory and wood constituted about 33 percent of the cost of the pulp.

The company uses two types of wood- namely, eucalyptus and casuarina which were used in the ratio 60:40. The process began by receiving wood in the form of logs. From 6am to 8pm trucks would arrive at the gates of the company. Each truck carries about 10MT and this is confirmed by weighing each truck. The logs of wood are first converted to chips before feeding into the digester. Depending on whether the chipper is free the truck is either sent to the chipper or the wood yard for the purpose of unloading the truck.

The truck took on an average 10 minutes at the weigh bridge. On an average the truck took about 20 minutes at the chipper for unloading. The unloading of the truck took about 1.5 to 2 hours. One tractor cycle took about 30 minutes. The truck was also weighed before leaving the premises. This took about 5 minutes. From the pulp making process perspective the varying moisture content in the wood poses no specific quality problem but this was measured regularly for the purposes of accounting.

The problems currently faced in wood logistics are:

1. Existence of only one weigh bridge which would mean that the incoming and outgoing trucks use the same weigh bridge. This would create confusion and delay in the process.
2. The trucks had to wait for a long time as unloading took a lot of time and the destination for unloading is also different. Only one truck could be unloaded at the chipper and the others had to go to the wood yard. With only one chipper in place the logs of wood from the yard had to be brought for chipping with an extra handling cost.
3. The production department did not follow the chipping schedule.
4. The inventory is stored for almost 6 months this increases the handling costs.
5. The trucks from supplier stands outside the gate for a long time in the night as the doors are not open till 6 am in the morning.

The company is increasing its production from its current rate of 200MT per day to about 300MT per day by April. There are various areas that APR Limited should focus like:

1. Increasing the number of weight bridges
2. Increase the number chippers
3. Use Kanban cards
4. Reduce the amount of stored inventory
5. Allotment of strict timings for trucks
6. Allotment of proper schedules for the chipping process
7. Invest in the integrated information system
8. Use of better knives in the chipper so that the time to replace the knives is reduced

The method to choose which of the options is appropriate the options should be evaluated and the options which would help reduce the bottleneck should be adopted first. The inventory is stored for 6 months which is the point of concern as the handling costs increase. The supplier’s trucks waited for a long time outside the gate in the night which meant that a lot of trucks accumulated in the morning. This could be reduced if the gates be open 24 hours.