Spritzer company is the most integrated and is the largest bottled mineral water producer in Malaysia. The company started its small set-up based at Taiping, Perak in 1980’s. Spritzer company comprises of five subsidiaries that is involved in manufacturing and the distribution of natural mineral water, sparkling natural mineral water, carbonated fruit flavoured drink, non-carbonated fruit flavoured drink, functional drink, toothbrushes preforms, and packagigng bottles. These vast variety of Spritzer company product ensures the wide spread of the company brand all over Malaysia. The brand Spritzer in Malaysia is the best selling natural mineral water that is produced, bottled and distributed at 300 acre site with a huge amount or large amount of natural mineral water resources in an environmental friendly spot where it is surrounded by lush tropical rainforest greenery away from all sorts of pollutions. The production line on the other hand is fully automated with the help of the art of bottling techniques. Furthermore, the plant is monitored by experienced and highly qualified food technologists, chemists, microbiologists and engineers. Spritzer also has successfully achieved a high reputation through by garnering many awards and had set many milestones through the years. A few of the awards achieved by Spritzer company would be the MS 1480:2007 HACCP certified, IBWA / ABWA Annual Plant Inspection since 1996, by premier third party certifier named NSF, QUASI and JohnsonDiversey Consulting, in 2010, Frost & Sullivan awarded Spritzer the title “Asia Pacific Bottled Water Company of the Year” for its leading role in providing bottled water on the domestic and commercial fronts through deploying advanced treatment methodologies and meeting high local and international standards and also in 2011Spritzer company achieved Euromonitor International Ltd acknowledged Spritzer as the “Number 1 Bottled Water Brand in Malaysia from 2000-2010” for the company’s overall success in developing and implementing theirbusiness strategy as well as their novel market penetration efforts. A further information on the mineral water is that the water is extracted from over 400 feet deep underground in the tropical rainforest. These efforts were basically taken to ensure the quality of water and to sustain it. The water being extracted from the aquifer contains a healthy balance of beneficial trace minerals. Therefore all these qualities and basic measures taken by Spritzer company enables the company to gain profit and to sustain their place in the market. As in whole Spritzer company does not only market its products to gain benefit but also to provide a quality mineral water to be consumed by all.
Production/ operation processes
Wrapping of Finish Goods
Shrink Tunnel Work
Shrink Tunnel Work
Diagram1. Production Process of SPRITZER
Description for the Production/Operation Process
Production strategic can be said as a long term action plan for an organization. The organization will decide how their goods or service will be produced and the way to introduce to the customers. It was also about the way of an organization to allocate their resources to support for the production process on the purpose of maximizing the effectiveness and lower down the costs include on each production. An appropriate arrange of flowing process will help on improve a company productivity.
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SPRITZER group is most integrated and largest bottled water producer in Malaysia. The product line of company are automated and using the art bottling technologies for manufacturing such as mineral water, drinking water, carbonated drink, non carbonated drink, packaging bottles and also the perform. The entire product is standardized which is going through a same production process where the different is on the category and the volume of contents or amount of water involve in each product.
Raisin and Preform
First of all, according to the diagram, before starting for the production, the company will acquire their own raisin on the husky department. The entire raisin is outsourced from the other country which having a quality assurance on it. Later, it will be put inside into the preform, amount of Raisin will be depend on how larger u want your bottle to be such as 500ml or 1000ml bottle. After the preparation, they will send their perform to the production department.
The 1st process will be blowing process, it was about on the preform will be put on a road to gone through a machine that working on blowing their perform on a desired volume. Normally, there was no much error will occurs on the part. After finished the blowing, a bottle will be completed produced and it will be send to the other part of process in sequence.
The 2nd part is about the Rinsing process, the bottle will be rinsing by the machine to clean up the bacteria contain inside. The purpose is to ensure there was no any problem on the bottle and help on remove the odor smell on it. The process is focuses on stricter controls for a healthy product.
Next is about the filling process. Water amount will be adjusted based on the bottle volume. It will automate to filling up the bottle by a machine which contained different category of water such as mineral water or drinking water.
Cap washer and Capping Process
After completed of filling process, the product will be send to a capping system. Before the starting, there will be a machine that helps on clean up the capsule. The cap washer will release the water for cleaning work on every capsule that pass through it. The system is used on capping the bottle after it had been filling up by the water. The material of capsule is outsourced from the other country also and it was designed as easily to open for such as having a little twist but still appropriate for the size of bottle to prevent the loss of quality on content.
Later, after the product finish capping for; it will be send to the labeling part of the bottle. The labeling sticker will be cover around the bottle. The sticker contains the information of the product such as the logo of the company, content of the product, the company address and their contact number. It allows the user to familiar the product information accurately. There will be a worker supervise the labeling process to make sure all the process is running smooth and no error occur. The model of the label machine used is XYL-350 which is imported from other country and able to running the work more efficiency. If there was any problem on the production, the supervisor will take out the product and fix for it.
Shrink Tunnel Work
After the capping part, it will be change to the shrink tunnel process. The shrink tunnel involve on using a machine which purpose of locking the capsule on the bottle properly. Other than that, there will be a machine that helps on locking the label on the bottle too. The purpose is to ensure the label was tighten on the bottle completely.
Blowing (2nd part)
After the completed of shrinking the tunnel, a temperature machine which on 120 degree Celsius will be used on distilled the water on the surface of bottle. It will release out high temperature of steam which to ensure the bottle remains in drying form. Where the process will not affect the quality of the water contained inside too.The model of machine used is S1-1280 and imported from other country.
Next was the quality assurance process, the machine will check for the water level and to make sure the label of product is correctly applied. Other than that, a worker will be supervising for the process to prevent the defect of product.
Wrapping of Finish Goods
When the process of production is completed produced, the finished goods will be sending to the wrap around case packer for packaging work. 24 bottles will be wrapped to a box and a machine will glue around the boxes using a plastic cover. There will be a weighted machine which tests the volume of the boxes. If there was any problem on the boxes weight, a red sign of signal will alert the supervisor and they can check for the mistaken on it. The model of machine used will be FYT-50.
Palletize of Goods
Lastly, when all the goods were finish assigned, it will be palletizing to a canton based on the demand of ordering. The workers will count the amount of canton and record down of the goods produce in a day. Later, it will be sending to the warehouse and kept on it for the next shipping services.
Overall of this, we can know that the company is concern mainly on their quality and hygiene assurance which focus much on deodorant, sterilizing of viruses and the capping of bottle. Besides that, there was an experiment lab which is set up for testing the quality of water every one hour. The production is estimated can be producing around 300 bottles in minute or 600 boxes in an hour.
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Descriptions of facility layout diagram
Facility layout defined as the most effective and efficient physical arrangement of facility such as machines, service department, processing equipment and so on. Itis an arrangement of different aspects of manufacturing in an appropriate manner as to achieve desired production results. An effective facility layout confirms that there is a smooth flow of production material, equipment and manpower at minimum cost.
As shown in the diagram 1, the visitors have to register at guard house or make appointment before visiting. After the registration, the guard will lead us to reception customer area which call as water bar and located in the manufacturing building. From the 1st building, we can look the office was set up on your left hand side. It was convenience for the supplier or the customer making their order or discussion of business. The office hour will be started from morning 8.30 until evening 5.00.
After that, beside of the office, we can look through there was a huge warehouse located on between the office and manufacturing department. The warehouse was guarded by at least 2 people on there. It was the most important places as the entire ordering stock are store on here. The location allows the workers to put their stock on here immediately after the production. Besides that, the office workers can make their computing work easily also. Moreover, the manager will check on their stock weekly or monthly to ensure the inventory data was accurate and the customer need can be met. There was few truck are parking beside which can help on deliver or transfer of product to other places when there was emergency are happening such as fire.
Throughout the way, we will reach a water bar which serving the coming visitor. From the way of entrance to here, it takes around 20-40 seconds for us to arrive by riding a van. Inside the water bar, the distribution of SPRITZER product is displacing around and the information of product are clear defined from a film. Behind the water bar counter was the manufacturing department of goods. Visitor can have a brief look on the manufacturing process.
Beside of the water bar will be the husky department. The purpose of husky department is to provide the raisin and perform for the manufacturing of product. The raisin is outsourced from the other country where the preform is produced by themselves. After they have received the order from the customer, the department will calculate the perform needed and deliver it to the manufacturing department which just located behind the water bar only.
From the manufacturing department, we can know that SPRITZER company is using the product oriented layout which facilities organized by product. They group all products that produce same process and produce in high volume and high equipment utilization. Thus, the variety of product was actually same and they separated the production line from line A to G based on the volume of bottle. First, from the entrance, the blowing process will be located on the right hand side of us where there will be a laboratory lab on the left hand side. After the blowing part, will be the rinsing and filling process. Before the filling of water, the chemist will test for the quality on it for every hour. If there was any problem on it, they can stop the process immediately. Next was about the capping of capsule on the bottle. There will be a machine help on washing the capsule before capping on it. Both of this process involves a machine responsible for it. Next, will be the labeling of logo and shirking tunnel which tighten the capsule on it. After the process, a supervisor will check for the water level on each and a high temperature machine will distilled out the water on the container. When the goods is finished manufactured, it will be separated to few boxes and palletize as a canton. The palletizer is put beside and the workers will record down the amount of canton and send it to the warehouse which located beside the department only.
There will be two way of exit for the manufacturing department, each of the end is implemented a washing bar for them. They are concern for the hygiene and quality of product. Totally the company has around 460 worker are distributed for all department. Other than that, the company was surrounded by the rainforest tree and flower. The water is extracted from an aquifer located over 400 feet deep underground in the tropical rainforest also. We can see that they have paid much of effort for their water quality by choosing the location of manufacturing. All of this are in purpose of prevent the pollution on their water sources. Overall, we had known that the layout of facility is one of the reasons that made for their success.
Analysis of the Strength and Weakness in production processes
First of all, from the description of production process, we can saw that the SPRITZER group had been focusing their work on using the machine. For every process of production, there was a machine that aid on the works. So, we can conclude that, high utilization of machine will able to perform the work more efficiency. It was different on using the labor worker, machine can perform the work over and over, whereas using labor may need to take a break on that and will not flexible as the machine. Other than that, we can see that there was no much defect on using machine for production. It can help to avoid the error on work, so, the result will be more accurate than labor production. Besides that, using of machine can help on saving the cost on labor. When there was more ordering for the goods, it can perform the work overnight rather than paying extra overtime payment for labor. Thus, achieve consistency and flexible on the work. Moreover, it can help on saving the cost on training and development of new recruitment worker. There was no demand for a broadening skill of labor workforces. The cost that saving up can use on other investment such as implemented of new system or machine.
Although it has brought a lot of benefit for the company, there was also some weakness for the production process. Thus, we can look from the high investment of machine for the production. It means that the company will have a high initial investment cost on the beginning. So, it require a certain time for them to recover the cost. When there was any emergency situation, the company may face the shortage of cash flow problem. Besides that, company should consider for the depreciation costs of machinery. Maintenance needed to be making on monthly or annually to ensure the performance is enhanced. Moreover, if there was any maintenance for a machine, it may delay the production line as the machine as required to stop for working on a day or more. Other than that, from the view of publication, using of computerized production will reduced the job opportunity for them.
Overall for this, although there was some weakness for the production process, but it still can help on maximize the productivity which achieve efficiency and effectiveness.
Analysis of the Strength and Weakness of facility layout
SPRITZER is using product-oriented layout in the manufacture process. This layout produces high volume and high equipment utilization in a continuous production. It can be explain as machine process move from one part to another part. Time and cost have also been reducing because the short distance of goods moving from one area to another area. Thus, this layout allows SPRITZER has low variable cost per units and can be produce high volume of product for saving costs.Other than that, the warehousing located between manufacturing area and office was also strength of facility layout. This can reduce the time and distance of workers delivers the goods to customers when customer making order. There are having two doors for warehouse and this can make the delivery running smoother and delivery on time.Besides that, the manufacturing department is surrounded by the forest; the natural mineral water is produced and bottled out of a vast 295 acre site with plentiful natural mineral water resources in an environmentally friendly site surrounded by lush tropical rainforests greenery, away from pollution.
There is also having some disadvantage of facility layout. Assume that work stoppage at any point will tie up the whole operation. For example, if there have stoppage at husky area and cannot produce the preform on time, this will cause the production line down. It will cause direct lost and indirect lost if stoppage happens in production process. The direct cost will be the sales of the company, and the indirect cost will be the decrease of company reputation.
Next, the raw material that keeps in the warehouse having a long distance with the husky area which produces preform. The time and effort needed to carry the raw material to husky area. In long run, this will cause a huge amount of lost.
3. Literature Review
3.0 Types of Flexibility in Organization
According to Upton, 1994 flexibility in the perspective of product development which means the capability of the firm to modify or react with little requirement time, effort, cost of performance, interrelated with the changes in the business environment, during introduction to the market as well as at the stage of the product development. Lesser time, effort and cost for the change of products and processes stage required with higher flexibility adaptation. Hence, it becomes increasingly vital for a company to adapt in these highly dynamic market environments whereby it will overall generate the success of failure of an organization (Iansiti 1995, Singh & Lewis 1997). Furthermore, flexibility has to be involved in the initial stage through strategic framework to exploit future opportunities in the market (Verganti, 1999).
There are few types of flexibility that organization could implement in their operations in order to increase performance which are product technology flexibility, product and process flexibility and managerial flexibility. First of all, product technology flexibility can be implement by organization due to manufacturers nowadays are required to produce new products at lowest cost, in order to ensure rapid and fast-moving items, and to be flexible with wide-ranging and changing product diversity. According to Collins and Schmenner, 1993 the production technology and process of the organization should design in a flexible way that able to satisfy the demand for responsiveness in the rapidly changing market environment. Food and beverage industry is characterized under rapidly changing consumer tastes and preferences and continuously advancing technology. Therefore, Food and Beverages Company often required a continuous flow of new and improved product to replace their old product in order to extent their product life cycle (Steward & Martinez, 2002; Winger & wall, 2006). The flexibility of technology enables organization to reduce its variable cost and the time required to changeover design modification in the product, therefore allows the organization to build competitive advantage over their other competitors. Some organization also implement flexible approach in selection of their suppliers and apply several criteria for supplier-selection for examples, technical compatibility, similar aims and objectives, development speed, strategic positioning, cost of development, security of business information, management capability, and cultural compatibility (Bailey, 1998). According to Das and Elango, 1995 there are some main factors that contribute technology flexibility to an organization such as modular product design, manufacturing technology flexibility, employee flexibility as well as flexibility in the organization structure. Organization that implements any one or more than one of flexibility approach above can results in product technology flexibility that generates effective and efficient operations in the organization. However, developing flexibility in an organization has become a vital issue due to the increase complexity in predicting the market competition and rapidly changes in customers’ needs. Researchers have recommended few ways to improve the developmental flexibility which are adopting flexible technologies, leverage product design to improve the flexibility and structure the process to reduce the cost of changes in the future.
Organization should adopt product and process flexibility that seek to develop flexibility in designing architecture that minimizes the inter-dependence between its individual parts. Modular design by grouping parts that have similar characteristics helps the organization to reduce the overall cost of design changes in the product system (Ulrich, 1995; Fouque, 1999). According to Thomke, 1997 high design flexibility allows the designers to handle higher levels of risk concerning to technology and the projects that organization is running. In order to achieve high project success, it is essential to integrate sufficient level of product design flexibility in the product development cycle (Calontone, 1995). Organizations should apply structured but flexible development process so that suitable amendment can be made in the future depends on the change in the market environment (Takeuchi & Nonanka, 1986; Jenkins, 1997). This design also known as robust design where designers design the product in such a way which allow a small variations in the future will not negatively affects the product quality. According to Millet, 1990 both speed and flexibility are vital for market success in the dynamic competitive market. Task management process should lays on the flexibility as the foundation so that they are likely to overcome the problems arise in the future that they have not foreseen, therefore reducing the impact such as cost and time. According to Iansiti and MacCormack, 1997 some organizations have establish flexible product development process that enables designers to carry on defining and shaping the products even after it has been implemented. However, organizations must acquire new information about the changes in technology as well as customer preferences during the development period, because it allows designers to use such information to experiment the alternate product solution and select the most appropriate option for the product that going to introduce to the market. Some organization has successfully implement flexibility in their process such as Microsoft, apply a more flexible development process whereby it involves customer in the early stage of design and along in the innovation process. Customers are as co-evolve to the product design by analyzing their feedback (MacCormack, 2001). Moreover, organization flexibility is equally important to contribute positive results towards the product success for examples self-directed team structure, flat hierarchies, openness in exchange information and supportive reward system (VonBraun, 1989; Boynton & Victor, 1991; Saleh & Wang, 1993). Nevertheless, according to Calatone, 1993 creating flexibly in organizational structure requires a higher level of skills and resources functional areas.
According to Zirger and Hartley, 1996 when organization is developing new products, it requires a high degree of flexibility in resources allocation and decision making. Therefore, managerial flexibility is important in terms of decentralization, resources allocation, and non-rigid human resources practices smooth out the flow of product and information among the team members to enhance the efficiency of development process which leads to higher success (Haddad, 1996). The decision making is being pushed downwards in the organization in order to provided financial authority to the right person. According to Hull, 1996 team structure are design in flexible way such as team empowerment has stated to be a vital factor for success during new product development because it provides problem solving culture among the team members during the different stage of the development which leads to better quality as well as reducing the development cycle time. Successful product development teams are often product-focused, responsible for their duty, lead by strong product leader and strong management support. A real life example in Toyota adopts flexibility among their employees, even though the production process are standardized, their employees has the flexibility to involve in the changes for products improvement by persuasion among employees in order to enhance the quality of their products (Anon, 1999).
During the product development phase, it requires high level of creative and innovation from employees, the contribution is therefore made at both individuals and team levels. Subsequently, the human resources practice must able to provide sufficient motivation to the individuals to engage themselves in giving creative ideas and problem solving solutions. Appropriate reward system such as achievement based reward system and procedural flexibility is essential for promoting openness in information sharing and coordination among team members in order to enhance their performance which leads to product success (Haddad, 1996; Jenkins, 1997). According to Ozer, 2000 by using IT and other computer based tools and techniques, it generally helps the product development by shorten the development period, improving the efficiency and productivity of development process, enhancing coordination and communication between organizational functions and distribution of product information.
3.1 The Importance of New and Flexible Product Development
New and flexible product development is a creative and interdisciplinary activity that transforms a market opportunity and innovation into successful products. It is important to the economic success of the organization. First, new product development can maintain growth and protect the interests of investors, employees, suppliers of the organization. New products help keep the firm competitive in a charging market (Patrick, 1997). The product development can directly affect the competitiveness of the organization. They mean the difference between falling behind a leading competitor in the marketplace and being the competitor who provides leadership, compelling others to meet similar standards (Wheelwright and Clark, 1995). Moreover, new products spread the marketing risk. The investment community values new products; new products affect the top line and therefore enhance the value of the firm and shareholder value (Patrick, 1997). So, Spritzer should always invest in new product development in order to maintain their market share and competing with their competitors.
There are four basic consumer truths associated with new products are important in order to achieve the success of the news and flexible product development. Firstly, Spritzer needs to deliver the product on the concept promise and products with high consumer acceptance as measured by after-use purchase intent are able to succeed. Spritzer also advertises the quantity and quality product with drives awareness, trial and sales. Thirldly, Spritzer has drives sales in the distribution and lastly, Spritzer creates the new brands of products which are needs long term support if they want to be success.
Flexibility product development is important because it is able to make changes to the development of a new product in the short time period. In order to compete with the competitor, Spritzer can be expected in the customer wants and needs how the customer use the product, and in the new technologies being applied in the product or in its manufacturing process. The more Spritzer has innovative a new product is, the more development management team will have to make changes during development. Consequently, the more flexible the process is, the less disruptive the change is, the greater the flexibility. So, Spritzer has to change the development of the flexibility in order to success factor of the innovativeness.
3.2 Structure through New product Strategy and Planning
According to our research, we found that having new and flexible product development which is base on strategic considerations and systematic implementation is one of the keys of success to the company from operation management perspective (Prisana Suwannaporn;Speece Mark w, 2010). In order to implement strategy effectively, new product development process must be in well planning and make sure the resource usage able to adapt to the changing condition such as changes in customer preferences, high quality demand and even better packaging. So, Spritzer should clear about their strategic and implementation plan to make sure development process will run smoothly in future.
The most critical issue for new and flexible product development is the involvement of senior management and top management support (Prisana Suwannaporn;Speece Mark w, 2010). Spritzer should encourage their staff to be active in decision making and comes out with greater ideas through brainstorming. So, it will increase trust from senior management and top manager, due to products will not be successful developed without permission of top management. Thus, it is important to plan well the development process in order to receive appropriate support. However, focus is known as significant part of strategy as the company has to ensure their core competency, concept development and strategic planning before implement the plan (Prisana Suwannaporn;Speece Mark w, 2010). So, Spritzer able to start their product development in right way, at the same time can avoid cost which caused by mistake made at the beginning step.
By implementing strategy effectively, strong internal communication should be build up as it is the key factor to determine success or failure of new and flexible product development (Prisana Suwannaporn;Speece Mark w, 2010). Spritzer has to ensure that the flow of information should be in sequence and able to reached any member who involved in the project development. Research shows that costly mistake and loss of time will be occurred especially in food and beverage manufacturing if poor communications exist (Prisana Suwannaporn;Speece Mark w, 2010).
In order to develop new and flexible product, it can contribute competitive advantage to Spritzer through strategic considerations and systematic implementation which able to avoid cost of mistake and save time for correction. Besides, Spritzer also can gain competitive advantage by providing more choices for their customers and able
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