Syarikat Pemprosessan JATI MESRA S/B(JM) is a chicken slaughter house equipped with a further process facility. JM is founded by the current Managing Director, Mr Yap Chau Hen on 2002. Before that, Mr Yap operates a chicken stall in Selayang Wet Market. JM's factory is located at Prima Selayang, 68100 Bt. Caves, the northern tip of Klang Valley. JM sells whole chickens and chicken parts, in fresh and frozen form.
Over the years, JM had grown from the original team of 40 workers with a capacity of 6,000 birds per day till today's size: 3 terraced factory lots, 90 workers and the capability of slaughtering and processing 12,000 birds per day.
JM's mission is to provide Clean, Halal and Quality ("Bersih, Halal dan Bermutu") to its consumer. Thus, JM can excel and growth to become the best slaughter house in the region to provide high quality chicken products so that everyone can have chicken which is safe and Halal for daily consumption.
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JM acquired its Halal certification quickly after operation commenced. JM have never been disqualified from Halal certification for once, because of the supports given by Mr Yap. His understanding of the importance of respecting the other's religion make JM follows all the Halal related policy strictly, so that all of our products can be consume by the Muslim safely. Today, JM is one of the biggest Halal certified slaughter house with processing facility in Klang Valley.
In 2012, JM advanced for another big step by acquiring GVHP certification from the Malaysia Veterinary Service Department. This certification indicates that JM's product is qualified safe for further food processing.
Today, JM is a renowned brand is Klan Valley and the east coast of peninsula of Malaysia, which our product have garnered much market share and with a good reputation of high quality chicken products. The interview is conducted with the operation executive, Mr. Yap Tuan Jun (phone number: 012-7715195)
The first process is stunning the live chicken. Live chicken is stunned for 3 to 5 second by using not more than 10.5v voltage and 0.6A in order to kill them. The workers will checked for stunned chicken, once confirmed the chicken already been killed, just will removed all the dead chicken. The second process is slaughtering. Halal certified slaughterer which known as "Jurusembelih" perform an incision at the neck of the chicken in Halal style. Halal style means the slaughterer will sever the trachea, esophagus and both carotid arteries jugular veins in one cutting action. The third process is bleeding. Let the dead chicken bleeding for a minimum of 4 minutes. The fourth process is halal checking. All chicken is checked prior to scalding, all non-halal chicken is rejected and discarded. The fifth process is scalding. Chicken are dipped into hot water temperature ranging from 62 degree to 66 degree for not more than 1 minute. The following process is de-feathering. Chicken are unloaded into feather plucking machine, not more than 30 birds for 30 seconds to remove the chicken's feather.
After that, the continuous process is evisceration. Chicken are loaded into overhead conveyor. Two incisions will be making in this process, one is at the neck and another one is at the belly. Then, the intestine, gizzard, liver, crop, head, leg is removed away and the chicken automatically unloaded from the conveyor. After evisceration, must clean the chicken thoroughly due to hygiene problem, so cleaning process is necessary. The chicken is bathed in chlorinated water (20ppm - 50ppm) for less than 30 minutes. Then the chicken is graded and arranged in tray. After that chicken is sent to chill room to chill down for a minimum of 4 hours. Then the whole process of production is considered complete.
Strengths and Weaknesses
For the company's production process, the process strategies of the company that we found is product focused. The product focus is the facilities are organized around by products, a product-oriented, high volume and low variety process. They also called continuous processes, because they have very long and continuous production runs and enable efficient processes.
Based on our research, the advantage in the production process is lower variable cost per unit. It is because in the product-focus company only use the small variety of products are produced. It is an easier production planning and control in a company because it only produced the product according to the own department such as process department, packaging department, human resource department, safety and health department. It has higher equipment utilization because of better scheduling and faster material flow in a company. It can attain to 70% until 90% in each perform task. Next, reduce in processing and operation time in the company also consider as advantages. Due to the low variety production, the organization only to perform same tasks in everyday so it may perform faster and faster as familiar with the work position in the company.
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In addition, it also has a lot of weaknesses in this manufacturing. The first disadvantage is higher capital investment. Due to the large quantity are produced in the product-focus company so the fixed cost is higher. Besides, operators are less broadly skilled in a company. It is because they everyday perform the same job in the company and have no opportunity to learn more new knowledge. This will result in the employees do not have much interest in their work and caused the negligence of the unnecessary in the process of production. Thus, may be it may indirectly affect the progress of the production in a company. Furthermore, required more specialized equipment is the weaknesses in the process. In order to maintain or improve the better quality of product, the company should purchase the better and more advance equipment in the production after few years. They also must make sure the equipment is safe to everyone during the process.
(b) Facility Layout and Description
Facility layout is one of an important component of a business's overall operations, both in terms of maximizing the effectiveness of the production process and meet employee needs. The objective of facility layout is to ensure a smooth flow of work, improve material or people and information through a system. The basic meaning of facility is the utilization of space, equipment and people in which a business's activities take place. The key to good facility layout is have effective material handling equipment, capacity and space requirements, environment and aesthetics, flow of information and cost of moving between various work areas. (inc.com)
According to the diagram above, when lorries arrives at Jati Mesra's factory, cages are unloaded and weighted immediately. Cages are stacked neatly and accordingly at waiting area of receiving bay. Jati Mesra's is using a product-oriented layout which seeks the best worker and machine utilization in a continuous production. The person in charge of the stock will order stock from their supplier. The delivered raw materials were kept in their store and then will go to sale office to record their inventories. The stock in their store will be checked by the store keeper in order to make sure their recordings will be par and avoiding error in recording the stock level.
Next is the production process. The chickens are taken from the store and transported all chickens to scalding in heavy machine department. This department contain of one feather plucking machines to remove the chicken's feather and it next to the scalder machines. All chickens are dipped into hot water temperature ranging from 62 degree to 66 degree. The cut foot machine is also in this department which is next to the chicken cleaning area which enable the workers to clean the chicken after cut foot more easy or convenience. Then, all chickens are gathered together. The bleeding machine is located near to the chicken cleaning machine. The chicken are being slaughtering, stunning, and also being hang on the chicken hanger. The chickens are sent to the debone department and it will cut into smaller pieces for further process. Then the chicken is send to sealer department. After that, the chickens are sent to the chiller room to chill down for a minimum of 4 hours.
After the chiller process, the chickens will be stored in the freezer beside the blast freezer area. The freezer area considered is the biggest area in whole facility layout. There are many stock are keep inside the freezer. Last, the chicken in keep into the blast freezer. Products are weighted packed into bags accordingly and in plastic bags are vacuum sealed.
Strengths and Weaknesses
There have many advantage and disadvantage in facility layout. For advantage, the company is using product layout, which it requires less work in process (WIP) inventory, as the flow of material is constant along a line. It requires less space for same volume of production when comparing to process layout, so as improvement on cutting off product cycle time due to less chance of congestion. Conveyor zed material handling or automation in the material handling is cost effective, as flow of material is well-practiced. Simple production planning and control and better coordination of different activities may be achieved. As everyday operation is fixed, it allows the chance of making mistakes, as each worker is assigned to a particular job, the skill level may be lesser due to job standardization.
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However, for the disadvantage of the company, it had chosen a shop-lot based capacity for setting up the factory. Due to the limitation of the capacity itself, it is very hard to make any changes or amendment because the limitation of space. As the building is not in a long and square shape, there are many restriction when setting up the machines and allocate the goods. Some machines is forced to put in an unsuitable place because lack of capacity and there are no rooms for the machine placement. In result there would be some inconvenience happens during the production process, as workers may face inconvenience in loading goods from logistic to parts cutting room; and it would be hampering when transferring goods from the freezer for debone segment, where workers have to go through the injet and sealer machines. Trouble hood in goods movement causes inefficiency, wasting time and may lead to accidents if the workers aren't paying attention.
3. Study Area's Literature Review & Contributions
Large and Thomsen (2011) identified five potential drivers of Green Supply Chain Management which are green supply management capabilities, the strategic level of purchasing department, the level of environmental commitment, the degree of supplier assessment, and the degree of green collaboration with suppliers. According to Chiou (2011), Taiwan has explored the correlation between greening the supplier and green innovation in Taiwan industry by using Structural Equation Modeling. They drew the conclusion that greening the supplier through green innovation leads to significant benefits to the environmental performance and competitive advantage of the firm.
The opportunity to offset the bargaining power of the integrated suppliers is a motivation to backward integrate from the perspective of the non-integrated firm. If there are no other direct savings from integration, the offsetting the bargaining power of the integrated suppliers can also be so beneficial to the non-integrated firm (Porter, 1980). Advantages of offsetting the bargaining power of integrated supplier through backward integration included lower costs or higher profits through greater efficiencies and/or by adjusting prices of the intermediate and final products.
According to 'An Integrated Framework of Green Supply Chain Management Implementation', Green supply chain management define as integrating environmental thinking into supply-chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to consumers as well as end-of-life management of the product after its useful life. GSCM recognizes the disproportionate environmental impact of supply chain processes in an organization. In the typical supply chain management, the impact of manufacturing operations and productions of goods on the environment may be generally categorized as waste (all form), energy use and resource use (material consumption).
In addition, in the framework of green supply chain process implementation, green product design includes both the Environmentally Conscious design (ECD) which is seeks to design products with certain environmental considerations and Life-Cycle Assessment (LCA) which mean generally concerned with the process for assessing the environmental. Using both of these businesses will try to correctly identify the design specifications of the product. This may minimize the complexity of the structure through minimizing the number of parts, increasing the use of common materials and choosing the fastener and joint types which are easily removable. Furthermore, green material management in GSCM is to replace a potentially hazardous material. This is one that appears less problematic. While one of the objective of green manufacturing process is to reduced use of virgin material as it indirectly reduces the amount of waste at manufacturing stage. This is want to help the company to minimum energy and resource consumption for flows and also wants to retrieve the material content of used and non-functioning products.
Besides that, green distribution also very important in the GSCM, due to its great impact on the natural environment. Green distribution relies on green transportation service which may help company reduce negative impact on human health and the natural environment. Lastly, recycle, reuse and remanufacture are considered to reverse logistic that serve to green supply chain management. These three functions may help to utilization of reusable materials, to extend the life value from original core unit and also prevent waste of potentially useful materials.
According to the 'Green Supply Chain Management, Critical Research and Practices' states that the grow importance of the green supply chain management is driven mainly by the escalating deterioration of environment.
This GSCM system includes in-bound logistics, production and distribution which are part of the well-known value chain concept exposed by supply chain researchers. Purchasing and in-bound logistics focuses on manage the vendor-organization relationships of supply chain. The issue in delivery and production is the use of just-in-time practice. This practice is meant to help company to reduce inventory and then eliminating costs and waste. For example, less storage and warehouse space is needed because this will reduces the necessary overhead and resource consumption needed to manage this inventory. However, in the manufacturing and production function's role in corporate environmental has been well addressed. The internal supply chain's performance can best be managed within this function. Closed-loop manufacturing is one of the internal measures that can be used to improve the environmental performance of internal supply chain. This is a process of producing products with no negative environmental impact. In the philosophy closed-loop manufacturing, zero-emissions is substitutability.
Besides that, distribution and out-bound logistics function is meant to address the organization-customer relationship issues. Customer relationships are greatly influenced by green marketing policies. This may help the company to found that ultimate individual consumer interest in the environment and environmentally sound products is quite substantial, even though there has been a slight decline. This may show an individual consumer phenomena and the extension to corporate buyers needs a more complete evaluation. Hence, it may increase the company profits.
Lastly, the standard practices of outbound logistics that have implications for greening the logistics function. This may help the company to utilizing transport capacity more efficiently and then minimizing the environmental impact of the outbound transport system.
According to Ninlawan C. (2010), supply chain management is the coordination and management of a complex network of activities involved in delivering a finished product to the end-user or customer. Beyond this definition with adding the "green" component, it refers to green supply chain management (GSCM) which is defined as "green procurement, green manufacturing, green distribution and reverse logistics". In this food industry that we found, the organizations focus on the purchasing, production and transport arrangements. In the green procurement, they are undertaking actual purchasing transactions. They select suppliers who control hazardous substances in company's standard lists and obtain green certificate achievements in the supplier selection that apply in green procurement. They choose to buy the seasonal fresh produce, to take advantage of keen pricing and top quality. They do this in order to make their customer satisfied their product and consider about customer health care. In order to improve in the concept of 3Rs in procurement process, the company recycles all packaging and makes order via email due to reduce paperless problem. Quality control in inputs at vendor site and re-check before processing is being taken seriously in the company. In the green manufacturing, the organization increases the product life-span resulting in higher efficiency and productivity. They also improve the machine uptime and improve the performance in the company. The company also will enhance the environmental consciousness via 3Rs activities.
Next, green distribution are consists of green packaging and green logistics. The organizations pay more attention on it. They ask suppliers to limit transit packaging to that which is essential for food safety and to avoid damage. They use the 'green' packaging materials and cooperate with vendor to standardize packaging. In the green logistic, they deliver directly to the user site and use alternative fuel vehicles. The organization has to distribute the products together, rather than in smaller batches so it will shorten the delivery distance.
According to Li and Lin (2006), knowledge transfer could provide long-term competitive advantages in supply chains accordingly. Focusing on types of supply chain knowledge transfer, Li and Lin (2006) divided them into two constructs, "Information sharing" and "Information quality".
"Information sharing" stands for the critical and proprietary levels among communication complete, adequate, and reliable information exchange among supply chain partners. Based on the food industry that we found, the organization has strengthen the connections among supply chain partners, and avoid distorted or incomplete information among supply chain partners that may lead to inefficient operations. It requires constructing the information sharing and knowledge transfer networks among manufacturers, suppliers and customers. Information sharing is important to a company as they can learn other things and knowledge from other companies or even foreign companies.
In addition, the interactive information networks with mutual trust among the organizations reflect to the strength of knowledge transfer and it will also reduce the risks of information asymmetry among supply chain partners. With high levels of information sharing, supply chain partners build long-term and joint planning partnership to improve their performances, Claro et al. (2006).
The green supply chain management is a good way to differentiate a company from its competitors. Those companies which have adopted the green supply chain management have successfully improved their business. There are four major activities of the green supply chain management, there are green purchasing, green manufacturing, green marketing and reverse logistics. Green purchasing is the process of selection and acquisition of product and services which minimize negative impact over the life cycle of manufacturing, transportation, use and recycling. For example, the company may purchase the provender which is environmental friendly to feed their chicken. In green manufacturing, manufacturing equipment is made to be fast, reliable and energy efficient. Green manufacturing will help the company to save cost. The company can look for the machinery that is earth friendly, such as using wind or solar to run that machine. So the production cost will lower down and turn a great profit on the product. Green marketing involves a commitment to environmental responsibility through adherence to specific controls to ensure the preservation of the natural environment. An emphasis on producing product safe and environmentally friendly products will push the company to raise their production efficiency to reduce the pollution level and other harmful effects caused by the production process. So, the company can avoid any legal problem and have strong support from community. Reverse logistic refers to the role of logistic in product returns, source reduction, recycling, material substitution and waste disposals. The company may substitute some material with environmental friendly material, reducing the amount of raw materials uses in production process and integrate the return in materials in order to make their product more eco-friendly. Thus, the company we selected should implement this green supply chain management in order to differentiate themselves with other competitors and reduce cost as well as earn more profit.
Green supply chain management as a new innovative managerial tool can be used as a strategic weapon to gain competitiveness and to promote company environmental and financial performance simultaneously. The company may implement eco-design, green product and process design. Eco-design is a method, which contributed to product development which considers cost, performance, quality and also environmental characteristics of product, by combining ecological terms in to product design activities. This eco-design is needed to design or produce a product that is both economical and environmental sustainable, make the company more competitiveness. Other than this, green supply chain management can let the company achieve resource saving, waste eliminating and productivity improving based on building positive brand images, leveraging innovation and cost-saving perspective. The company can use greening as a unique advantage selling point for those environmentally conscious customers. Besides, innovative product design or process design, in order to easier dis-assembling. This process has lower assembly time that is because of smart connectors of products. Moreover, from the cost-saving perspective, company may reduce the raw material, resource usage per products, leading to cost saving. Using less fuel for instance by reducing tracking miles not only lowers energy and emissions usage but also saves on fuel expenses.
Green supply chain management is to gaining increasing interest among researchers and practioners of operations and supply chain management. The growing importance of GSCM is driven mainly by the escalating deterioration of environment such as diminishing raw material resources, overflowing waste sites and increasing level of pollution. However, it is not just about being environment friendly; it is about good business sense and higher profit. In addition, greening supply chains aims is to balance marketing performance with environmental issues. It is to meet with challenges such as energy conservation and pollution abatement. Jati Mesra's factory have tried to green their supply chains, that is, to create networks of suppliers to purchase environmentally superior products or to build common approaches to waste reduction and operational efficiencies. Besides, it also can improve both economic and environmental performance simultaneously throughout the chains by establishing long-term buyer and the supplier relationships.
Jati Mesra's factory can developed a diverse set of initiatives for greening SCM, including screening suppliers for environmental performance, providing training to build supplier environmental management capacity, and developing reverse logistics systems to recover products and packaging for re-use and remanufacture. Thus, green supply chain management not only can generate environmental benefits, but also business benefits.
Several organizations responded to this by applying green principles. There is several benefit of green supply chain management. Green supply chain management is a systematic integrated process which from raw material to finished product, upto customer to disposal in order to protect environmental degradation and to improve productivity and profitability. The green productivity see a possibility of producing more environment friendly output from less inputs through clean manufacturing, yet enabling organizations to be free from legal or political restriction, mission of integrating economic development, social progress and ecological balance. Jati Mesra's factory that we have chooses should using environmental friendly raw material and using the recycle papers for packaging. By this, it can reduce waste and pollution, and using less energy and material resources, this obviously good for the environment, and is the best for supply chain because they cut operational costs.
Jati Mesra's factory should be concerned with environmental and social issues in supply chain. This is due to it can enhance the company reputation as well as for competitive advantage reasons. Common benefits of green supply chain management in achieving sustainability are enhanced value for customers, cost reduction, increased operational efficiency and competitive advantage.
4. Discussion & Conclusion
Importance of the company's production processes, facility layout and students' choice of area of study on the company's efficiency and effectiveness.
The important of company's production processes is product focus which allows the company to focus on product quality as they can focus all its money and efforts on the design of the product so it works to specifics. Product focus also provides economies of scale which can reduce the cost of producing an item. As company only focus on certain product, the product can be create efficiently and in mass quantities, so that the more quantities of product can be made at a lower price and increase the number produced.
The importance of product-oriented layouts is easier training and supervision as employees do the repetitive task everyday so that they are less necessary to learn new and different skill for their job. Besides that, it also reduced work-in-process inventories. It reduces the additional work to convert partially-finish inventory into finished goods inventory.
Green Supply Chain Management increasing efficiencies by reducing waste and effective management of resources and suppliers can reduce production costs, promote recycling and reuse of raw materials. It also reduced production of hazardous substances so that the company can prevent from being fined as a result of violating environmental regulations. Other than that, organizations that adopting Green Supply Chain practices can reduce the risk of being prosecuted for anti-environmental and unethical practices and a demonstrated effort towards creating and effective Green Supply Chain will be highly regarded in the event that any questions arise through the sustained dedication of resources, activity, measurement and management protocol.
The bargaining power of supplier will be weak if an industry with many small suppliers and few large buyers. There are strategies such as just-in-time manufacturing, or even holding low quantity of stocks, increase dependency on suppliers to reduce the bargaining power of suppliers. In other word, suppliers should not be squeezed too much and recognizing relationship between the industry and supplier is symbiotic. Besides that, industry does not need to depend on one supplier and can switch to other suppliers since the industry's product with lots of substitutes that customers can use to satisfy their needs and the buyer's products are not highly differentiated which industry is easy to change their suppliers.
Greening of the supply chain is gaining a significant support in an organization. It will help companies with controlling and avoiding the potential environment concerns and problems. Highest conservation of natural resources using the principles of reuse, recycle and recovery of materials and energy is another driver persuading business to implement GSCM. In order to achieve the GSCM, manufacturing organization must follow the basic principles established by IOS14000. It is imperative that organizations develop procedures that concentrate on operational analysis, continuous improvement, measurement and objectives.
The framework of GSCM is:-
Green supply chain = green product design + green material management + green manufacturing process + green distribution and marketing + reverse logistics
This framework will reduce the resource consumption reduction, waste reduction and emission reduction. While the reverse logistic includes reuse, remanufacturing and recycling of material into news materials with value in the marketplace. Pinch analysis, industrial energy and life-cycle analysis are the three techniques to help company minimum energy and resource consumption for flow system.
Lastly, GSCM practices are viewed as cross-organizational and closed loop reduces the ecological impact of industrial activity without sacrificing quality, cost, reliability, performance or energy utilization efficiency.