DE LA SALLE UNIVERSITY – DASMARIÑAS

College of Engineering, Architecture and Technology

Dasmariñas City, Cavite

A study on eliminating the 28.28% Production Loss of Crosspoint Paper, Inc. in

manufacturing paper bags amounting to Php 1,052, 838 for the months of
December 2017 to February 2018.

A company study presented to the faculty of

College of Engineering, Architecture, and Technology
DE LA SALLE UNIVERSITY – DASMARIÑAS
Dasmariñas City, Cavite

In Partial Fulfillment of the requirements for the

Degree of Bachelor of Science in Industrial Engineering

Submitted by:

Bugayong, John Paulo B.

Dumaop, Geneselle C.
Pacampara, Mary Grace V.
IEE32

Submitted to:

Engr. Maria Socorro M. Bunda

 DE LA SALLE UNIVERSITY – DASMARIÑAS
College of Engineering, Architecture and Technology
Dasmariñas City, Cavite

March 26, 2018

Crosspoint Paper, Inc.

Phase 1 Block 4 Lot 1 & 3 Sterling Technopark, Brgy. Maguyam
Silang, Cavite

Dear Sir/Madam;

Greetings!

De La Salle University - Dasmariñas is seriously pursuing its goal of developing its engineering students,
through giving good instruction, and meaningful office setting exposure. In this light, I would like to endorse
the students whose names are listed below, to conduct a study on your office.

Bugayong, John Paulo ( 0939 630 9028 )

Dumaop, Geneselle ( 0916 960 8639 )
Pacampara, Mary Grace ( 0999 319 1055 )

They are IEE32 where this Case Study is a course requirement. I hope you will grant them permission to
visit your office, see your data as well as interview some of your key people.

I would like also to assure you that the information/ data which will be gathered will be held confidential and
be used to academic discussion only.

We hope for your consideration on this matter. Thank you.

In St. La Salle,

-----------------------------------------
Engr. Maria Socorro M. Bunda
Subject Teacher

Noted by:

-----------------------------------------------------------
Engr. Ma. Estrella Natalie B. Pineda
Chair, Engineering Department

------------------------------------------
Engr. Jose Rizaldy A. De Armas
Dean, College of Engineering, Architecture and Technology

4
 CHAPTER I
Introduction

Crosspoint Paper, Inc. is a paper converting company incorporated on June 14,

1991. Their main manufacturing plant is located in Taguig and its outputs are distributed

throughout various clients around Metro Manila (such as St. Luke’s Medical Center and

US Embassy), the company has established another manufacturing plant in Silang,

Cavite.

Aside from paper conversion, the company is also an exclusive distributor of

Ebonite, Copy & Laser, Panda, and Encore brands of paper. The facility also has the

capability of cutting all types and grades of paper into various sizes as required by its

clients.

In 2011, the company has ventured into manufacturing paper bags through the

usage of Kraft papers in order to support the conservation of the environment. The

company fully utilizes the use of automated machines operated by skilled workers to meet

the standards of its clients. The raw materials used for these paper bags were imported

from Indonesia.

BACKGROUND OF THE STUDY

The manufacturing of paper bags undergoes four processes; which are (1)

converting, (2) organizing, (3) bundling and (4) packaging. First, the raw materials (in

Kraft Paper Rolls) are placed on the paper bag machine and it produces the paper bags.

Second, the worker organizes the paper bags to a whole batch (consisting a total of 100
5
paper bags each batch) and places them on a pallet which is then transported to another

workstation, called bundling. Here, another worker prepares a sheet of paper to wrap

around the paper bags and is then transported to the last station, packaging. The batch

of paper bags are placed on a box and is sealed closely with tape.

Crosspoint Paper, Inc. is facing production losses in the process of producing

paper bags distinctively on the organizing of the paper bag itself. After uncovering the

problems in the manufacturing process, the group has come up with the topic “A study on

eliminating the 28.28% Production Loss of Crosspoint Paper, Inc. in producing paper

bags amounting to Php 1,052, 838 for the months of December 2017 to February 2018”.

Upon observation of the group, the production losses in the company are due to

repetitive method when it comes to the worker organizing the paper bags, machine

depreciation and breakdowns, and unnecessary activities done by the operator.

First, for the worker’s repetitive method, workers repeatedly execute organizing

procedure consuming more time, producing less output.

Second, the paper bag machine being used in the process has been used in the

production for 8 years, therefore, it is prone to frequent breakdowns and slower

production of paper bags, causing delay for workers to arrange a batch.

Lastly, the operator performs unnecessary activities such as using mobile phones

during production hours and chatting with other operators.

These factors, as listed above contribute to the 28.28% production loss of

Crosspoint Paper Inc. from December 2017 to March 2018. Thus, the group has decided

to work on this topic.

6
PROBLEM STATEMENT

Crosspoint Paper, Inc. is experiencing 28.28% production loss in producing paper

bags amounting to Php 1,052, 838 for the month December 2017 to February 2018.

GENERAL OBJECTIVE

To eliminate the 28.28% production loss of Crosspoint Paper, Inc. amounting to

Php 1,052, 838 in the manufacturing of paper bags.

SPECIFIC OBJECTIVES

 To capitalize the company’s manpower, methods, materials and machines.

 To employ alternatives in the processes presently used by the company.

 To help the company increase their productivity.

7
SCOPE AND LIMITATION

The study conducted at Crosspoint Paper, Inc. was specifically designed to

analyze and identify the main source of time delays in the manufacturing of Paper Bags

under the organizing section. This line was selected to become the emphasis of the study

because the work is executed manually by the workers and idle times were present. The

group collected the necessary data by conducting a time study on the key area of delay

and observing how the operators perform in the organizing section.

The production loss of the company presented in this study is based on the actual

output and target output of the company from December 2017 to February 2018.

SIGNIFICANCE OF THE STUDY

To the Company:

This paper is primarily intended to benefit Crosspoint Paper, Inc. in recognizing the

root causes behind time delays and production losses in the manufacturing of paper bags.

Moreover, this case study shall serve as an aid to regulate reduction of frequently

occurring time delays which creates an opportunity to capitalize the company’s

manpower, methods, materials and machines through employment of alternatives in the

processes presently used by the company resulting to proliferation of output

and productivity.

8
To the Students:

An overview of the subject, Methods of Study, will be given to students who will

take the course subject in the future. This case study can also be their guide in gathering

ideas on how to perform a time study and how to conduct case studies. Furthermore, the

students will acquire knowledge on how to apply critical analysis in solving the problems

encountered by manufacturing companies.

To the Readers:

This study will enlighten its readers about the problems encountered by

manufacturing companies such as time delays and production losses. Likewise, this

paper will also give them insights about how motion and time study functions in resolving

the difficulties in the company.

DESIGN AND METHODOLOGY

Observation

The researchers concentrated on the root cause of the problematic area of

production in the company which was seen in the organizing process. The problem was

detected through observation and evaluation on how the operators accomplish their tasks

on their specified work stations. A motion and time study was conducted by the

researchers.

9
 The snapback method was utilized in recording the time in the organizing section.

Time recording tools used in the study were:

 Stopwatch

 Time study form

 Time study board

 Scientific calculator

The productivity loss was acquired through analysis of the data provided by the

company and computation of the discrepancy between the target output and actual

output. The production information was gathered through a series of interviews from

 Mr. Rommel Quillosa, Purchasing Manager

 Mr. Jose Tejano, Production Supervisor

INTERVIEW

The researchers interviewed Mr. Rommel Quillosa, the Purchasing Manager of the

company and Mr. Jose Tejano, Production Supervisor who lent us their time on answering

some of our questions.

Questions Asked

1. What is the history of the company?

2. Which of the products that you produce have the most problem encountered?

3. What is the standard procedure in the manufacturing of paper bags?

4. What is the standard time in the manufacturing of paper bags?

5. What are the tools and equipment utilized in the company?

10
 6. Which section/s of the manufacturing process require/s manual operation?

7. What are the common problems that you encounter? Usually on what section?

8. Are there machine parts that frequently malfunction?

9. How many units does the company produce per day?

DEFINITION OF TERMS

In order to have a better understanding of this study, the following terminologies

are defined operationally:

Motion and Time Study - a business efficiency technique combining the Time Study

work of Frederick Winslow Taylor with the Motion Study work of Frank and Lillian Gilbreth

Kraft Paper – the raw material utilized in making the paper bags which comes in a large

circular tube roll form usually imported from Indonesia

Pallet - a flat transport structure that supports goods in a stable manner while being lifted

by a forklift which allows handling and storage efficiencies.

Paper Bag Machine – a machine that converts the raw material into paper bags.

11
 CHAPTER 2

FINDINGS AND ANALYSIS

Table 1 Summary of Production Loss

Total Total
Number Target Actual
Total
of Output Output Productivity Productivity
Month Output
Working (Pieces (Pieces (%) Loss (%)
Difference
Days per per
Month) Month)
December 22 1320000 920110 399890 69.71% 30.29%
January 25 1500000 1105800 394200 73.72% 26.28%
February 19 1140000 814050 325950 71.41% 28.59%
Total 66 3960000 2839960 1120040 214.83% 85.17%
Average 22 1320000 946653 373347 71.72% 28.28%
Source: Rommel Quillosa, Purchasing Manager, Crosspoint Paper, Inc.

Table 1 shows the summary of productivity and production loss (in %) of

Crosspoint Paper, Inc. on the production of Paper Bags for the months of December 2017

– February 2018. Based on the data gathered, the monthly target output was not achieved

resulting to 28.28% average production loss for the said months of operation.

Computations:

(Target Output Per Month – Actual Output Per Month)

Production Loss =
Target Output Per Month

1320000−920110
For the month of December 2017 = ∗ 100 = 30.29%
1320000

1500000−1105800
For the month of January 2018 = ∗ 100 = 26.28%
1500000

1140000−814050
For the month of February 2018 = ∗ 100 = 28.59%
1140000
12
 The computation shows the production loss from the months of December 2017 to

February 2018.

Table 2 Summary of Profit Loss

Total
Cost per Income Loss
Month Output
piece (Peso)
Difference
December 399890 0.94 375,897
January 394200 0.94 370,548
February 325950 0.94 306,393
TOTAL 1120040 0.94 1,052,838
Source: Rommel Quillosa, Purchasing Manager, Crosspoint Paper, Inc.

Table 2 shows the data of the summary of profit loss of Crosspoint Paper, Inc.

from December 2017 to February 2018. The cost of paper bag was amounting to Php

0.94 per piece.

Computations:

Income Loss = Output Difference x Cost per piece

For the month of December 2017 = 399890 x 0.94 = Php 375,897

For the month of January 2018 = 394200 x 0.94 = Php 370,548

For the month of February 2018 = 325950 x 0.94 = Php 306,393

The computation shows the production loss from the months of December 2017 to

February 2018.

Target No. of output per day

= 60,000 pieces per day

13
Total Work Time

= 12 hours – 0.25 hours – 1 hour – 0.25 hours = 10.5 hours per shift

= 10.5 hours x 2 shifts = 21 hours

= 1,260 minutes

Standard Time per pack (per shift)

4.58 minutes; Allowance Factor = 10%

= 4.125 minutes per 300 pcs

Machine

Operating time = 75,600 seconds

Machine capacity = 1 piece/1.26 seconds

𝟕𝟓,𝟔𝟎𝟎 𝒔𝒆𝒄𝒔
= 60,000 pieces/day
𝟏.𝟐𝟔 𝒔𝒆𝒄𝒔

Table 3 Percentage in Fishbone

Total Affected
PROBLEM M's Percentage
Units (Pieces)
Repetitive Method 52189 4.66%
Frequent
Machine 930994 83.12%
Breakdowns
Unnecessary
Man 136857 12.22%
Activities
TOTAL 1120040 100%

Table 3 shows the percentage of the problems present in the company as

presented in the fishbone diagram and the total affected units for each problem.

14
FISHBONE DIAGRAM

Method, 4.66%

Repetitive work
method

Crosspoint Paper, Inc.is

currently experiencing
28.28% production loss for
the months of December
2017 to February 2018 in the
production of paper bags
Unnecessary amounting to Php 1,052,838
Activities Machine in the organizing process.
Downtime

Man, 12.22%
Machine, 83.12%

15
FISHBONE ANALYSIS

MACHINE

Machine downtime – The machine frequently breaks down during the production

process causing time delays in producing the paper bags. The machine aids the company

in producing the paper bags efficiently.

METHOD

Repetitive method – The operation presently used in the company contributes

4.66% of the problem. Workers repeatedly execute the method in the organizing section

causing more time in the production of paper bags.

MAN

Unnecessary activities – operators in the work area often chat from each other.

Also, they are using their smartphones during work hours.

16
Table 4 Focus of the Study

Operator’s Name: Kerwin De Mesa, Sabel Mangaya, Marvin Lobedino Date: March 28, 2018
Operation: Organizing the paper bags Condition: Normal Condition
Analysts: Bugayong, John Paulo; Dumaop, Geneselle; Pacampara, Mary Grace
OBSERVATIONS AVERAGE NORMAL RATING STANDARD
ELEMENTS
1 2 3 4 5 6 7 8 9 10 TIME TIME FACTOR TIME
Converting 56.09 56.06 56.5 56.96 56.06 56.14 56.52 56.9 56.2 55.99 56.34 47.89 85% 52.68
Organizing 102.04 92.32 105 109.3 98.18 94.63 100.46 99.41 102.17 110.08 101.35 86.15 85% 94.76
Bundling 15.46 20.52 16.6 16.69 19.06 15.7 19.93 17.2 20.03 16.03 17.72 19.49 110% 21.44
Packaging 88.9 89.09 92.2 90.4 92.1 91.99 89.28 87.57 91.32 89.46 90.24 90.24 100% 99.26
TOTAL 262.49 258 270 273.4 265.4 258.5 266.19 261.1 269.72 271.56 265.644 252.36 95% 277.60

Jose Tejano

Production Supervisor, Crosspoint

Paper, Inc.

Table 4 illustrates the focus of the study in the whole process of producing paper bags on Crosspoint Paper, Inc.

17
Table 5 Time Study Form Illustrating Repetitive Method

Operator’s Name: Kerwin De Mesa Date: March 28, 2018

Operation: Organizing the paper bags Condition: Normal Condition
Analysts: Bugayong, John Paulo; Dumaop, Geneselle; Pacampara, Mary Grace
AVERAGE STANDARD
OBSERVATIONS NORMAL RATING
ELEMENTS TIME TIME
TIME FACTOR
1 2 3 4 5 6 7 8 9 10
Get first set 2.41 2.17 2.81 2.84 2.66 3.04 3.03 2.5 3.81 4.04 2.93 2.49 85% 2.74
Arrange
4.37 3.64 3.37 4.68 6.74 3.9 4.4 3.45 2.19 3.47 4.21 3.58 85% 3.94
first set
Inspect first
6.8 9.25 7.21 15.3 8.18 3.11 9.35 6.35 4.01 5.85 7.54 6.41 85% 7.05
set
Arrange
3.5 2.78 2.23 4.69 2.07 2.39 4.68 6.31 6.85 3.13 3.86 3.28 85% 3.61
first set
Count first
9.6 8.34 6.98 6.33 6.32 7.09 8.5 7.14 8.06 7.9 7.63 6.48 85% 7.13
set
Set aside
1.25 0.77 0.79 0.82 0.6 0.39 1.96 1.78 1.6 1.88 1.18 1.01 85% 1.11
first set
Inspect
25.12 20.05 21.61 20.54 23.32 30.05 23.08 27.47 20.89 21.78 23.39 19.88 85% 21.87
machine
Get second
2.58 2.56 2.93 3.73 2.6 2.11 3.79 2.41 2.51 2.26 2.75 2.34 85% 2.57
set
Arrange
3.63 3.12 5.71 2.14 3.12 4.01 3.2 5.13 3.79 2.47 3.63 3.09 85% 3.40
second set
Inspect
7.7 8.94 5.53 7.48 5.78 6.34 6.12 5.03 6 15.39 7.43 6.32 85% 6.95
second set
Arrange
3.14 2.48 2.53 3.73 1.9 1.33 2.79 2.77 1.4 4.96 2.70 2.30 85% 2.53
second set
Count
7.46 8.93 7.73 10.1 9.63 0.96 7.62 7.7 7.1 8.81 7.60 6.46 85% 7.11
second set

18
Combine
first and 1.78 0.92 1 1.16 0.6 0.76 1.02 1.01 1.02 1.65 1.09 0.93 85% 1.02
second set
Press
combined 0.91 0.98 0.97 1.52 0.95 0.97 1.37 0.98 1.57 1.95 1.22 1.03 85% 1.14
sets
Arrange
combined 3.39 2.96 3.52 3.14 2.93 4.77 3.45 2.84 3.41 3.98 3.48 2.96 85% 3.25
sets
Put to pallet 2.93 5.26 8.15 6.74 3.29 5.41 11.88 10.97 7.92 7.32 6.99 5.94 85% 6.53
TOTAL 109.5 109.3 105.96 129.6 106.56 94.55 127.96 120.974 107.65 121.11 114.61 97.42 85% 107.16

Mr. Jose Tejano

Production Supervisor, Crosspoint Paper, Inc

Table 5 shows the Time Study in the organizing process. The highlighted defines the repetitive method.

19
Figure 1: Process Flow Chart

Figure 1 shows the process flow of the product.

20 | P a g e
 Figure 2: Flow Process Chart in the Organizing Process

Transportation
Distance

Inspection
Operation
Time
Steps

Storage
Elements (secs.) (meters)

Delay
1 Get first set of paper
2.74
bags
2 Arrange first set 3.94

3 Inspect first set 7.05

4 Arrange first set 3.61

5 Count first set 7.13

6 Set-aside first set 1.11

7 Inspect machine 21.87

8 Getting another set of

2.57
paper bags
9 Arrange first set 3.40

10 Inspect first set 6.95

11 Arrange first set 2.53

12 Count first set 7.11

13 Combine first and

1.02
second set
14 Press combined sets 1.14

15 Arrange combined sets 3.25

16 Put to pallet 6.53 2.00

21 | P a g e
 Operation 12

Transportation 1

Storage 0

Inspection 3

Delay 0

Figure 2 illustrates the Flow Process Chart of the organizing section in the

production of paper bags. In the figure, the time and distance consumed in the whole

operation is included. After the machines have produced the paper bags, the operators

arrange them before putting into the pallet.

22 | P a g e
Table 5.1 Summary of Data of Repetitive Method

AVERAGE NORMAL RATING STANDARD

ELEMENTS
TIME TIME FACTOR TIME

Arrange first set 4.21 3.58 85% 3.94

Arrange first set 3.63 3.09 85% 3.40
Arrange first set 3.48 2.96 85% 3.25
TOTAL 11.32 9.62 85% 10.59

Computations for Units Affected:

Output Difference per day
Units affected = Average Delay Time x x Total Working Days
Total Cycle Time

December 2017

18177
Units Affected = 11.32 x x 22
247.5

= 18674 pieces

January 2018

15768
Units Affected = 11.32 x x 25
247.5

= 18342 pieces

February 2018

17156
Units Affected = 11.32 x x 19
247.5

= 15173 pieces

Total Units Affected

Total Units Affected = 18674 + 18342 + 15173

= 52189 pieces

23 | P a g e
Table 6 Data for Machine Downtime

Minor Down-time Major Down-time Total

Month
(mins) (mins) Time
December 980 640 1620
January 590 380 970
February 560 820 1380
TOTAL 2130 1840 3970

Source: Mr. Jose Tejano, Production Supervisor, Crosspoint Paper, Inc.

Computations for Units Affected:

Total Time Consumed

Units affected = Output Difference per month -
Machine Cycle Time per piece

December 2017

1620 x 60
Units Affected = 18177 -
1.26
= 322748 pieces

January 2018

970 x 60
Units Affected = 15768 -
1.26
= 348010 pieces

February 2018

1380 x 60
Units Affected = 17156 -
1.26
= 260236 pieces

Total Units Affected

Total Units Affected = 322748 + 348010 + 260236

= 930994 pieces

24 | P a g e
Table 7 Data for Unnecessary Activities

Using
Operator Chatting
Smartphones Total Time
3.46 6.11 9.57
Kerwin De Mesa 0 7.63 7.63
13.04 0 13.04
TOTAL 16.5 13.74 30.24

Computations for Units Affected:

Output Difference per day
Units affected = Average Delay Time x x Total Working Days
Total Cycle Time

December 2017

18177
Units Affected = 30.24 x x 22
247.5

= 48860 pieces

January 2018

15768
Units Affected = 30.24 x x 25
247.5

= 48165 pieces

February 2018

17156
Units Affected = 30.24x x 19
247.5

= 39826 pieces

Total Units Affected

Total Units Affected = 48860 + 48165 + 39826

= 136857 pieces

25 | P a g e
 PROBLEM TREE

CAUSES

Repetitive Machine Unnecessary

method Downtime Activities

Crosspoint Paper, Inc. is experiencing 28.28% Production

Loss in the Production of Paper Bags amounting to Php
1,052,838 from December 2017 to February 2018.

EFFECTS

Less output Profit Loss Opportunity

produced Loss

1
PROBLEM TREE ANALYSIS

CAUSES

1. Repetitive method

The work process in considered repetitive because the workers habitually

arrange the paper bags per procedure. Workers repeatedly execute the method in

the organizing section causing more time consumed before putting the paper bags

into the pallet.

2. Machine Downtime

Machine tends to recurrently breakdown due to its oldness in the production

area. As affirmed by the operators, the machines were formerly running smoothly

when it was delivered by the company’s supplier in China.

3. Unnecessary Activities

As observed inside the production area, workers were chatting with each

other causing time delays. They also make use of their smartphones during work.

2
EFFECTS

1. Less output produced

Due to repeated work method, the operators allot time and effort in doing

the same operation repetitively which also equals to lesser output production.

2. Profit Loss

Whenever the machine breaks down, the production will be paused

immediately, and the operator together with the supervisor will fix it creating

another delay in the production of paper bags. This signifies a reduction in the

monthly potential profit of the company and failure to achieve the target output.

3. Opportunity Loss

Because of the unnecessary activities done by the operators, the time

consumed in the organizing section becomes longer than the efficient rate of labor.

3
 OBJECTIVE TREE

MEANS

Implement standard Implement

procedure in the Replace old additional rules and
organizing process machine parts regulations

To eliminate the 28.28% Production Loss in Crosspoint Paper, Inc. in

manufacturing paper bags amounting to Php 1,052,838 in the Organizing
Process for the months of December 2017 to February 2018

ENDS

More outputs Profit Gain Opportunity

produced Gain

4
OBJECTIVE TREE ANALYSIS

MEANS

1. Implement standard procedure in the organizing process

Implementing standard procedure in the organizing section will eliminate

the repetitive operation done by the operators. The researchers propose an

implementation of a standard procedure wherein the standard time in organizing

the paper bags will occur shorter with lesser effort from the operators. This

projected procedure will enable the workers to perform each operation lesser

instead of the previous repetitive process.

2. Replace old machine parts

Replacing the old machine parts will reduce machine breakdown that

frequently occurs during the production of paper bags. The researchers suggest

replacing the old machine parts to rehabilitate its mechanism.

3. Implement additional rules and regulations

Prohibition of smartphones inside the work area will result into undistracted

workers. To add, if the unnecessary chit chats during working hours will be

eliminated, the time delays will likewise be removed.

5
ENDS

1. More outputs produced

Since a standard procedure in organizing the paper bags is integrated,

workers will not have to repeatedly execute the method resulting to a maximized

the production output.

2. Profit Gain

Given that the old machine parts were replaced, the machine usage will be

maximized, and the time delays will be equivalent to profit. As the outdated

machine parts causing the downtime of the machines are changed, continuous

production is now probable in the company which also equals to profit gain.

3. Opportunity Gain

As the workers became more efficient and productive, monthly target

outputs will be achieved while assisting the company eliminate production loss.