Case Study Bayfield

Aartis Weighty Problem
On the morning of 5th November 2015, Pankaj Jain, a customer service representative of Aarti
Industries Limited, having just dropped his kids to school and on his way to work was feeling
excited at the challenges he was to face that day. He was apparently summoned to the Dahej
warehouse of Wet-Land Drilling, ltd. to inspect three boxcars of mud-treating agents that Aarti
had Shipped to the Dahej firm (Aartis corporate offices and its largest plant are located in
Mumbai). Wet-Land had filed a complaint that the SO-pound bags of treating agents just received
from Aarti were short-weight by approximately 5%.
"Aarti Industries Limited (AIL)" is an Indian chemical company with manufacturing plant and
headquartered in Mumbai, Maharashtra, India. Aarti Industries owns businesses across India and
is engaged in large scale production of various chemicals like benzene intermediaries,
pharmaceuticals, surfactants etc. Aarti is one of the leading supplier to global manufacturers of
Dyes, Pigments, Agrochemicals, Pharmaceuticals & Chemicals.
The light-weight bags were initially detected by one of Wet-Lands receiving clerks, who noticed
that the railroad scale tickets indicated that net weights were significantly less on all three boxcars
than those of identifiable shipments received on October 25, 2015. Aartis freight department was
called to determine if lighter-weight pallets were used on the shipments. (This might explain the
lighter net Weights.) Aarti indicated, however, that no changes had been made in loading or
palletizing procedures. Thus, Wet-Land engineers randomly checked 50 bags and discovered that
the average net weight was 47.51 pounds. They noted from past shipments that bag net weights
averaged exactly 50.0 pounds, with an acceptable standard deviation of 1.2 pounds. Consequently,
they concluded that the sample indicated a significant short-weight. (The reader may wish to verify
this conclusion). Aarti was then contacted, and Mr. Jain was sent to investigate the complaint.
Upon arrival, Mr. Jain verified the complaint and issued a 5% credit to Wet-Land.
Wet-Land management, however, was not completely satisfied with the issuance of credit. The
charts followed by their mud engineers on the drilling platforms were based on 50-pound bags of
treating agents. Lighter-weight bags might result in poor chemical control during the drilling
operation and thus adversely affect drilling efficiency. (Mud-treating agents are used to control the
pH and other chemical properties of the cone during drilling Operation.) This defect could cause
severe economic consequences because of the extremely high cost of oil and natural gas well
drilling operations. Consequently, special-use instructions had to accompany the delivery of these
shipments to the drilling platforms. Moreover, the light-weight shipments had to be isolated in
Wet-Lands warehouse, causing extra handling and poor space utilization. Thus, Mr. Jain was
informed that Wet-Land might seek a new supplier of mud treating agents if, in the future, it
received bags that deviated significantly from 50 pounds.
The quality control department at Aarti suspected that the lightweight bags might have resulted
from growing pains at the Mumbai plant. Because of the earlier energy crisis, oil and natural gas
exploration activity had greatly increased. In turn, this increased activity created increased demand
for products produced by related industries, including drilling muds. Consequently, Aarti had to
expand from a one-shift (6.00 AM to 2.00 PM) to a two-shift (2.00 PM to 10.00 PM) Operation in
mid-2015, and finally to a three-shift operation (24 hours per day) in the fall of 2015.
The additional night-shift bagging crew was staffed entirely by new employees. The most
experienced foremen were temporarily assigned to supervise the night-shift employees. Most
emphasis was placed on increasing the output of bags to meet ever-increasing demand. It was
suspected that only occasional reminders were made to double-check the bag weight-feeder. (A
double-check is performed by systematically weighing a bag on a scale to determine if the proper
weight is being loaded by the weight-feeder. If there is significant deviation from 50 pounds,
corrective adjustments are made to the weight-release mechanism).
To verify this expectation, the quality control staff randomly sampled the bag output and prepared
the chart on the following page. Six bags were sampled and weighed each hour.
Time
Average Range
Weight
(Pounds)
Smallest
Time
Average
Weight
(Pounds)
Largest
6.00 AM
7.00
8.00
9.00
10.00
11.00
12 Noon
49.6
50.2
50.6
50.8
49.9
50.3
48.6
48.7
49.1
49.6
50.2
49.2
48.6
46.2
1.00 PM
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12 Midnight
1.00 AM
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12 Noon
1.00 PM
2.00
49.0
49.0
49.8
50.3
51.4
51.6
51.8
51.0
50.5
49.2
49.0
48.4
47.6
47.4
48.2
48.0
48.4
48.6
50.0
49.8
50.3
50.2
50.0
50.0
50.1
49.7
46.4
46.0
48.2
49.2
50.0
49.2
50.0
48.6
49.4
46.1
46.3
45.4
44.3
44.1
45.2
45.5
47.1
47.4
49.2
49.0
49.4
49.6
49.0
48.8
49.4
48.6
Range
Smallest
Largest
50.7
51.2
51.4
51.8
52.3
51.7
50.4
6.00
7.00
8.00
9.00
10.00
11.00
12 Midnight
46.8
50.0
47.4
47.0
47.2
48.6
49.8
41.0
46.2
44.0
44.2
46.6
47.0
48.2
51.2
51.7
48.7
48.9
50.2
50.0
50.4
50.0
50.6
50.8
52.7
55.3
54.7
55.6
53.2
52.4
50.7
50.8
50.2
49.7
49.6
49.0
49.1
49.6
52.0
52.2
52.4
51.7
51.8
52.3
52.4
53.6
51.0
1.00 AM
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12 Noon
1.00 PM
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12 Midnight
1.00 AM
2.00
49.6
50.0
50.0
47.2
47.0
48.4
48.4
49.6
50.0
51.0
50.4
50.0
48.9
49.8
49.8
50.0
47.8
46.0.
46.4
47.2
48.4
49.2
48.4
47.2
47.4
48.8
48.4
49.0
49.2
46.3
44.1
45.0
44.8
48.0
48.1
48.1
49.5
48.7
47.6
48.4
48.8
49.1
45.2
44.0
44.4
46.6
47.2
48.1
47.0
46.4
46.8
47.2
51.7
52.2
50.0
50.5
49.7
49.0
49.7
51.8
52.7
55.2
54.1
50.9
51.2
51.0
50.8
50.6
51.2
49.7
50.0
48.9
49.5
50.7
50.8
49.2
49.0
51.4
3.00
4.00
5.00
48.4
47.2
46.8
47.2
45.3
44.1
51.7
50.9
49.0
3.00
4.00
5.00
49.6
51.0
50.5
49.0
50.5
50.0
50.6
51.5
51.9
Apart from this problem, management of AIL is very serious for other supply chain related issues
in manufacturing and distribution and they recently appointed Mr. Drucks as a consultant. In the
first meeting with the logistics team and GM (Mr. Pillai), he mentioned the Managements concern
on increasing logistics cost and requested the logistics team for the cost break up zone wise and
the related volume. The data given by the logistics team is as under
Total Logistics/ Volume (Cost Figures are in Crs): Volume: 000s Kg
Year
East
West
North
12.3/1420
14.9/1108
16.4/1378
2013
13.4/1418
15.2/1149
15.5/1280
2014
14.8/1505
18.6/1260
17.8/1410
2015
South
9.6/1590
8.8/1420
11.8/1240
Mr. Drucks found some serious concerns in the data provided by the GM and his team.
Discussion Questions:
1. What is your analysis of the bag-weight problem?
2. In case you are to analyze this problem, can you think of an out of box solution so that such type
of problems can be avoided for future and rejects can be controlled or reduced?
3. Do you feel that logistics cost is critical issue and the data given to Mr. Drucks is sufficient to
analyze the logistics for AIL? What solution approach you will recommend to Mr. Drucks, assume
suitable data whether necessary?

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Aartis Weighty Problem

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