Chapter I

Introduction

Background of the Study

In this modern and highly competitive world, the manufacturing industry is not just deemed

important but is indispensable to almost all types of economic system. It is even considered as an

essential element of development as it creates jobs, opens business opportunities and generally stirs

and drives economic growth. On a global perspectives, the manufacturing sector, particularly in

developing countries, is attributed as the driver of economic development especially in achieving high

sustained growth. In the Philippines setting, manufacturing holds a pivotal role in the economy as

reflected in latest survey conducted by the National administered among 21, 040 business

establishments that employed a total of 2.7 million workers. According to the said survey,

manufacturing generates the highest employment which constitutes 31.5% of the country’s total

workforce and provides for the nation’s biggest chunk of revenue.1 With this prime role of

manufacturing in this society, the researchers decided to look into this sector but focus on its

backbone—production.

With the increasing competition in the market and the advent of technology, the process and

the general flow of production in various industries and different sectors has also drastically changed.

Hence, each company or organization is compelled to come- up with innovations and practices that

would enable their production to be effective, efficient and at the lowest cost possible. This study aims

to look into a specific manufacturing process of a certain company so as to see how to how they face

heightened challenges, increasing demand and high customer expectation in their production. Further,

this study is geared towards looking into the possibility of incorporating the so called “Lean Tools” in

improving the company’s assembly line or manufacturing process. The paramount aim of this study
is not to prove that the existing manufacturing process of the subject company is faulty or inefficient.

Rather, this study targets to set an alternative option, through the lean system, that can improve and

advance its existing process.

Lean Manufacturing is a set of widely- used processing techniques developed for the sole

purpose of maximizing utilization by minimizing any waste entailed to production. On a study

published by the European European Journal of Scientific Research, lean manufacturing has been

described as the using of less of everything—half the human effort in the factory, half the

manufacturing space, half the investment in tools and half the engineering hours to develop a new
2
product. This is the reason why the researchers deemed this technique as a viable alternative to

existing production processes used by local companies.

It is to be noted that this study will primarily delved in the food production of Mister Donut’s

factory situated in Purok 7 Binitayan, Daraga Albay. The researchers opted to give emphasis to food

production because of its obvious significance and the necessity for the efficient and careful process

in delivering their products to the customers. An effective manufacturing process is necessary for the

food production industry due to its high susceptibility to wastage. There, this gives rise to the need of

coming up with innovative manufacturing techniques so as to decrease wastage and increase overall

productivity.

Mister Donut is not just a typical dessert food stall. It is a multi- billion international company

with a total number 3871 shops around the globe, 671 of which is in the Philippines. It is home to

more than 7392 employees and is widely known for its donuts, muffins, drinks, sandwiches and other

food product. To date, the Philippine- franchise for Mr. Donut has been acquired by Ramcar Group

of Companies. With its multinational status, Ramcar has introduced an aggressive management policy
and is upholding the highest level of quality service. This paved way for Mr. Donut Philippines to be

one of the fastest growing food chains in the country.

As said previously, this study will delve on the manufacturing process of Mister Donuts’

medium- sized plant in Daraga, Albay. This specific plant does not apply the Lean Manufacturing as

a tool in their food production. Thus, this study would look into how the following lean tools can be

incorporated in their production process either as an alternative option or an add- on to their existing

one both of which is geared towards ultimately improving their production system:

 Total Productive maintenance which covers practice primarily designed to maximize

equipment effectiveness through planned effective and preventive maintenance of the

optimization techniques.

 JIT philosophy related to ‘zero inventories’ or ‘stockless production to the batches

should always be as small as possible, in order to achieve one-piece flow with batches

sizes of one.

 Cellular and flow- physically linking and arranging manual and machine process steps

into the most combination.

 Kanban –a visual signal to support by ‘pulling’ product to through the manufacturing

process as required by the internal /external customer.

 Poke yoke- an ‘error-proofing’ technique a process used to prevent errors from

occurring or to immediately point out a defect as it occurs.

 Self-inspection- inspection and process control by competent employees so they

understand if the product passed to next operation is of acceptable quality.

  ‘jidoka’ or ‘autonomous machine’- form of automation in which equipment

automatically inspects each item after producing it ceases production and notifies

humans if a defect is detected.

 Point of Use Storage- Raw materials, parts, information, tooling, work standards,

supplies and procedures are stored where needed.

 Batched size reduction is a technique in reducing batches to the smallest possible size

to enable single and continuous flow.

 SMED (single minute exchange of dies)- a changeover reduction technique defined as

a time between the last good piece off the next run.

 Layout- a layout designed according to optimum operational sequence.

 Standard work- consistent performance of a task according to defined methods with

no waste.

 Visual control- a visual method of measuring performance at the ‘shop floor’.Use of

this technique enable a fast check of all information- tooling’s, parts, production

activities and indicators at a glance.

 5S’s- a visual housekeeping technique which devolved control to the shop floor.

 Value stream mapping (VSM)- a method of mapping current and future value flow of

the entire production process.

To date, there is only 1 research study focusing on lean manufacturing in the Bicol Region.

Considering the drastic and ever changing trend in manufacturing and the food industry, this study is

necessary to evaluate existing processes and post a viable option of adopting the Lean Manufacturing

as it has been proven to be effective in addressing the needs in production.

Statement of the Problem

The study looked as to how the lean system can be incorporated or applied in the food

production of Mister Donut Plant situated in Daraga. Specifically, it aimed to answer the following

questions:

1) What is the existing manufacturing system used by Mister Donut Plant in Daraga

2) What are the prevailing predicaments faced by Mister Donut Plant in the Daraga in their

manufacturing system in terms of :

a) Increasing productivity

b) Improving plant layout

c) Decreasing product defect

3) Identify specific lean tools that are applicable and viable for Mr. Donut aimed at attaining

the following:

a) Increased productivity

b) Improved plant layout

c) Decreased product defect

Objectives

The objective of this study is to incorporate the lean tools in the manufacturing process of

Mister Donuts Daraga Plant. Additionally, this study sought to attain the following purposes in the

application of lean system in the manufacturing process of the respondent company:

a) Increased productivity

b) Improved plant layout

 c) Decreased product defect

As a result of this study, the researches envisioned the food production industry,

particularly Mister Donut Daraga Plant to consider the lean manufacturing process as a

viable and effective in improving their production system and decreasing or avoiding

product wastage and defect.

Scope and Delimitation

The study focused on the existing manufacturing system of Mister Donut Daraga Plant

specifically on the following aspects:

a) Productivity

 Transportation

 Inventory and time

 Existing problems affecting productivity

b) Existing Plant Layout

 Production Process

 Pros and Cons of existing plant layout

c) Product defect

Further, this study will be limited to providing solutions through the incorporation of lean

manufacturing tools to Mister Donuts’ concern on productivity, existing plant layout and deduction

of product defects.

This study did not include any other food production company other than Mister Donut

specifically its plant situated in Daraga. The research solely delved on lean manufacturing as an

effective system in the food production industry. It did not include the profitability of the business
and the management competencies of the food production manufacturers and other aspects of the

business operation. Additionally, this study did not tackle the respondent’s demographical data of the

respondents.

Significance of the Study

The findings of the study were deemed to provide benefits to the following to provide benefits

to the following:

Mister Donut. The result of this study could provide new ideas for the improvement of their

business. Through the findings, they would be able to identify the solutions perennial issues in their

production and may consider the lean system as a viable alternative or addition to existing production

processes.

Food Manufacturing. The study will provide necessary information and ideas on the

application of lean manufacturing particularly in the food industry. This study will open, give, and

offer valuable insights, improved knowledge of operation and implementation of lean practices. The

result of the study would hopefully help the manufacturers to assess their status and hence, make steps

to remedy any problem in their production.

Local Government of Albay. The study may help them to prepare and plan programs on the

development and improvement of the province by encouraging or introducing the use of lean

production to various business entities.

Community in general. The result of this study may provide the general public with

opportunity to generate another source of income. Knowing the present status and lean concept, other

may be encouraged to venture into the same business thus expanding market opportunities.
 Potential Entrepreneur/ Investor. The result of the study would give them ideas for

business opportunities hence they may encourage investing in Albay. Investors an channel their

resources to the city, provide business and job opportunities to the local and thus alleviate poverty in

the area.

Students of Industrial Engineering. The students, particularly to thos enrolled in Industrial

Engineering, may benefit the output of this study will serve as the reference in their field of

specialization.

Future Researchers. The study may benefit them through knowledge on the procedures on

how to go about similar research. The outputs will served as related studies in their future research

Researchers. Undertaking this research activity has provided the present researchers the

knowledge on how to make research study. It also provided them the opportunity to assess a particular

industry which made them more appreciative operations.

Theoretical Framework

The theoretical Framework of the study is presented in Figure 1. Production process is the

theoretical basis upon which this study is anchored on. Production process is a mechanical or chemical

step used to create an object, usually repeated to create multiple units of the same item. Generally

involves the use of raw materials machinery and manpower to create product.

The production process is concerned with transforming a range of inputs into those outputs

that are required by the market. This involves two main sources of resources – the transforming

resources, and the transformed resources.

The transforming resources include buildings, machinery, computers, and people that carry

out the transforming processes. He transformed resources are the raw materials and components that
are transformed to end products. Any production process involves a series of links in a production

chain. At each stage value is added in the course production. Adding value involves making a product

more desirable to a consumer so that they will pay more for it. It is very important for the business to

identify the process that add value, so that they an enhance these processes to the ongoing benefits of

the business.

A feedback system will specify the comments regarding result of the process. It is a continuous

flow where reprocessing is needed if the demand does not met.

 Production Desired Output
Raw Materials Process

Feedback

Figure1. Theoretical Framework

Conceptual Framework

The study focused on the lean System in Mister Donut. Figure 2 shows the paradigm of the

conceptual framework of the study.

The study focused on the operation practices of lean in the production of the Mister donut

along production process, transportation, inventory, and time. It determined the level of production,

and determined the problems encountered by the industry; it also provided recommendations in order

to minimize these problems along production process, transportation, inventory, and time.

To find out the operations practices of Mister Donut, the research used the descriptive

method of research that helped them illustrate the gathered data needed to give answer to the

problems posed in chapter 1.

The recommendation of this study are deemed to help improve the operational processes with

the application of lean especially on the aspect of production process, transportation, inventory, and

time so that the industry will improve productivity, minimize cost and reduce waste.
 Application of Lean Increase Productivity
Raw Materials System Through; Minimize cost
Improve Quality
Production process
Revue Lead Time
Transportation
Inventory
Time

Figure2. Conceptual Paradigm

 Chapter II

METHODS

This chapter presents the comprehensive discussion of the Research Design, the primary and

secondary sources of data, population and sample of the study. This will also contain the research

instruments used including the discussion on the construction of instrument, validity and reliability of

the instrument and other pertinent data that would attest to the credibility of the results of this study.

Research Design

This study employed a mixed qualitative and descriptive