This chapter contains eight parts. First part deals with the introduction, a brief description on the study. Second part deals with the industry profile of chemical industry. Third part is about the company profile of Travancore Cochin Chemical. Then the fourth is about the statement of the problem, based on which the objectives were derived. Next part is about the research methodology adopted for this study. Under methodology, the type of research, research design, source of data, tools for data collection and the tools for the analysis is described. Finally the limitations during the study are also enumerated.

1.1 INTRODUCTIONThe project titled A project on Business Business process reengineering Initiatives and its financial implications with respect to Travancore Cochin Chemicals Ltd, Udyogamandal, Ernakulam is being conducted with the aim of studying the factors which causes energy deficiencies in TCC, which is severe and causing serious power loss which in turn is creating huge financial expense for the organization. So this study is directed to study in depth about the reasons for the huge power consumption and solutions to be implemented in order to overcome the existing conditions. The study conducted in this organisation is done in the operations department, were the process in the organisation is analyzed for its effectiveness in process and identify the flaws in the process and effective actions that need to be taken in order to rectify these flaws was the main objective of the study done.By conducting the study, it was analysed that there is a huge consumption of electic power in the organisation and the financial expense that is spent on this is huge and it is necessary to find out an optimum solution to reduce this consumption. Another pitfall which came up across during the study was the over consumption of steam for various purpose and the shortage which it causes due to the overconsumption of steam. The financial expense that is incurred due to this is also huge and it is also necessary to find out some solutions to reduce this expense incurred.The study was done based on one of the prominent theories of management, i.e, using the Theory of Constraints. The researcher approached the situations and problems as per prescribed by this theory and at each stages the constraints were identified, analysed and properly handled with. The problems were enumerated down and the parameters were correctly identified during the processes which were contributing to the problems. The clear objectives were laid out and the descriptive research methodology was followed out for sorting out the problem. As a part of the real time implementation of the solution which was suggested, a test apparatus was set up and it was run for understanding the effectiveness of the solution suggested and since it was found that, running successfully. The organization is in the path of the real time application of the solution in the organization.

1.2 INDUSTRY PROFILEIndustry is the overall application of technology and other resources to the generation economic output by producing goods and services. An industry is any grouping of businesses that share a common method of generating profits. The industrial revolution led to the development of factories for the large scale production, with consequent changes in the society. An industry is an important part of most societies and nations. A government must have some kind of industrial policy, regulating industrial placement, industrial pollution, financing and industrial labour. Industrial classification includes major industries like agricultural industry, chemical industry, manufacturing, mass media, information industry, construction industry, defence, energy industries etc.The world economy is developing. This development is accompanied by the development of various industries as well. A wide variety of products are coming into the market. These products require many chemicals in the course of its production. Apart from the production process, chemicals are a major constituent of the product. Hence many chemical industries producing a wide range of chemicals have come up. A chemical industry can be defined as a company that produces industrial chemicals. This industry utilizes chemical processes such as chemical reactions and refining methods to convert raw materials- such as oil, natural gas, air, water, and minerals into more than 70,000 different products. Salt is one of the oldest and most popular condiments. What is relatively unknown, is that salt is also the raw material for one of the most potentially profitable chemical industries in the country- chlor alkali.The chlor alkali industry in India is around 60 years old. It began with a modest capacity of a few thousand tons per annum. In the process of manufacturing chlor alkali some bye products are assured. For each tone of caustic soda, 860 Kg of chlorine and 25 Kg of hydrogen will be produced. Some amount of chlorine produced is combined with hydrogen to make hydrochloric acid. Caustic soda, hydrochloric acid and chlorine are the basic chemicals and are the basic chemicals and are used by almost all industries. Chemical industry is highly heterogeneous with following 7 sectors like petrochemicals, inorganic chemicals, organic chemicals, bulk drugs, agrochemicals, paints and dyes and foreign trade.

International ScenarioIn the international scene, theincreased production of paper, aluminium, soap and detergent naturally leads to increased requirement of caustic soda in the world scenario. The green peace movement in seeking the phase outof chlorine usage, especially the CFC compounds. This has resulted in closing down ofsome ofthe chlorine industries in Europe andNorth American countries. With the drop in international production, the international price ofcaustic soda is steadily growing up. The caustic which was sold for 50$/ ton has grown up to the 300$/ ton now. The international markets are opening in the context of demand supply prevailing from time to time, situation of surplus and shortage are cyclical as a result of which international prices tend to be highly volatile.Though the demand for chlorine is growing fast, the demand of caustic soda is not so promising. Hence the units in gulf and western countries are sellingcaustic soda at a cheaper price. MAJOR COUNTRIES PRODUCING CAUSTIC SODA: USA, France, Russia, China, India, Germany, Canada, Japan.

Indian ScenarioIn India caustic soda isproduced by electrolytic process. The manufacture of caustic sodastartedduring1940s.Thegrowthwas rather slowduring1960sbut after that thegrowth picked up substantially. Today there are 38industries manufacturing caustic soda. Of which 40 are organized sector and the rest belong to the unorganized sector. The total installed capacity ofall these units put togethercomesto about 17,50,000tones/annum.IndianChlor-alkali industriesfollow membrane cell technology mostly. This is highly beneficialbecause cell membrane technology is more efficient when compared to mercury cell technology.India was a net importer ofchemicals in early 1990s, but has now become anet exporter due to implementation of many large scale petrochemical plants likeReliance, ONGC etc. and also because of tremendous growth of exports insectors like bulk drugs and pharmacy, pesticides, dyes and intermediates.The Indian Chemical Industry is a significant component of the Indian economy with revenues at about USD 28 billion. Indian Chemical Industry contributes about 6.7% of Indian GDP and 10% of total exports. The industry contributes around 20% of national revenue by way of various taxes and levies. Volume of production by chemical industry positions India as third largest producer in Asia (next to China and Japan). The chemical industry accounts for about 13% share in the manufacturing output. The industry is a vital part of the agricultural and industrial development in India and has key linkages with several other downstream industries such as automotive, consumer durables, engineering, food processing etc. With the current levels of performance the Indian Chemical Industry ranks twelfth in the world production of chemicals. The chemical industry has achieved a growth rate of 8.6% over the last few years making it one of the fastest growing sectors in India. This industrys growth rate has been twice the Asian growth rate over the last five years. But the asset creation has been the lowest. The Indian Chemical Industry is faced with multiple challenges. It is emerging from a protected environment into a highly competitive global market. At the same time the domestic market shows a path to maturity with a high demand potential for chemical end-products. In terms of consumption, Indian chemical industry itself is its largest consumer; as the basic chemicals undergo several processing to manufacture downstream chemicals. The industry accounts for approximately one-third of the total consumption. Gujarat is the major contributor to the basic chemical as well as petrochemical production with 54% and 59% share, in all India production, respectively. Other major states producing basic chemicals include Maharashtra (9%), Tamilnadu and Uttar Pradesh (6% each). Other major states producing petrochemicals include Maharashtra (18%), West Bengal (12%), Uttar Pradesh (4%) and Tamil Nadu (3%).India is also an importer of chemical products. Indias chemical imports are either for the purpose of further processing in the chemical industry or for usage as intermediates in other Manufacturing sector. India has been sourcing its imports mainly from China (20% of Indias total chemical imports), followed by USA (8%), Saudi Arabia (6%), Singapore, Morocco and Germany (5% each).The Government has been announcing a number of measures to improve the competitiveness of the Indian chemical industry. These include: abolition of industrial licensing to most of the chemical sub-sectors, excepting a small list of hazardous chemicals. The Government is also continuously reducing the list of reserved chemical items for production in the small scale sector, thereby facilitating greater investment in technology up gradation and modernization. The Government has initiated policies for setting up of integrated Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR). Such an initiative is likely to attract major investment, both domestic and foreign, into the regions, which would have enabling infrastructure that would provide conducive and competitive environment for setting up of manufacturing units. PCPIR would reap the benefits of co-siting, networking and greater efficiency through use of common infrastructure and support services. Such an industrial complex would boost manufacturing activities, augment exports and generate employment.Government is a signatory to Chemicals Weapons Convention, which is an universal, non-discriminatory, multilateral Disarmament Treaty that bans the development, production, acquisition, transfer, use and stockpile of all chemical weapons. India has passed the Chemical Weapons Convention Act, 2000, which has come into force in 2005.Indian Chemical Council (ICC also known as Indian Chemical Manufacturers Association) is the nodal point / signatory representing India under the Responsible Care Initiative. ICC has prepared codes, guidance notes for implementation of process safety, employee health and safety, pollution prevention, emergency response and product safety. ICC is continuously interacting with regulatory bodies on various issues like emergency preparedness, and safe transportation of hazardous chemicals. Indian chemical firms have in place technical agreements with multinational firms to keep abreast of the technological development in the global chemical industry, and to explore possibilities of adapting the technology to meet the specific requirements of the Indian market. Such a strategy helped the firms to have continuous up gradation in technology, resulting in a wide and superior product portfolio. Strategies have also been adopted by Indian chemical firms to cut down cost of production through leveraged buy-out for sourcing cost efficient raw materials and solutions for energy efficiency. Some Indian chemical firms are engaged in continuous research and development activities to innovate new applications to increase end user segments. Consolidation through buy-outs of brands and business is another strategy adopted by Indian chemical firms. Indian chemical firms are leveraging their manufacturing expertise and enter into contract manufacturing with multinational firms. These include custom manufacturing and private labelling.

Major south indian chlora-alkali units:

Chemplast, Tamilnadu

Chemfab Alkalies Ltd. Pondicherry Southern petro Chemical Industries Corp. Ltd. Chennai Kothari Petro Chemicals Ltd.Chennai Sree Royal Seema Alkalies &Allied Chemicals, Andhra Pradesh BILT, Karnataka DCW Ltd, Metur TCC Ltd, Kerala.

Regional Scenario

Caustic soda is one ofthe basic inorganic chemicals manufactured from common salt caustic soda; Hydrochloric acid and sodium hypochlorite are the products. In the Kerala state, TCC is the only Chlora-Alkali industrial unit and has a production capacity of 175 MT Caustic Soda per day. Thereare many small scale industries in the state which consumes caustic soda forthe production of soap, detergents etc. Because of high transportation costit is not possible to export caustic soda in large volume from the state. TCC is the only one chlor alkali unitin the state and it is employing environment friendly and energy efficient technology. Chlorine is abasic material required for water purification and without chlorine the water workers will not be able to supply good drinking waterto the public.The Travancore Cochin Chemicals Limited, Udyogamandal is a State Public Sector Undertaking owned by the Government of Kerala. Reflecting the quality policy of commitment and excellence.TCC has a good trackrecord of profitable operation and healthy industrialrelations.A heavy chemical industry engaged in the manufacture and marketing of Caustic Soda, Chlorine and allied chemicals, TCC isaccredited with ISO 9001: 2008certification.TCC is hence a mother company.The installed capacityof TCC is 175tonsper day caustic sodaand the products are usedin manufacturing of soaps, textiles, plastics etc.

1.3 COMPANY / ORGANIZATION PROFILE

HISTORY OF TCC LIMITEDSeshasayee brothers established the Travancore Mettur Chemicals in 1951(Under Indian Companies Act 1956) in joint venture with Fertilizers and Chemicals Travancore Ltd(FACT).Commercial production was started in 1954 with a capacity of 20 TPD Caustic soda. It has the distinction of manufacturing unique product named Rayon Grade Caustic Soda. When financial problems happened to the company the then Travancore-Cochin govt provided financial aid and it was taken over by the govt. Thus it got renamed as Travancore Cochin Chemicals and subsequently after the independence it was taken over by the Govt of Kerala and it became a public ltd company. At present its production capacity is 175 TPD Caustic soda and it plans to expand its capacity to 225 TPD Caustic soda. About 50 crores is needed for the expansion which will take 2-3 years to complete. The company undertook expansions in 1961,1964 and 1975 using Mercury cell technology. As Mercury cell technology is creating problems the company went for the latest technology which resulted in the shifting of the companys technology from Mercury cell technology to Membrane cell technology which is an environment friendly technology. Membrane cell technology was commissioned in 1997 with technical help of ASAHI Glass Co Ltd in Japan. The products of TCC are Caustic soda, Chlorine, Hydrochloric acid and Sodium Hypo Chlorite. The raw materials used for the production of these products are Common salt, Electricity and Water. About 60% of production cost spend by TCC for Electricity. When Mercury cell technology was used there was a requirement of 3700 units of electricity for producing 1 TPD Caustic soda. But due to the introduction of Membrane cell technology the consumption got reduced to 2600 units of electricity for the production of 1 TPD Caustic soda. Common salt is brought mainly from the salt pans of Tuticorin in Tamilnadu. Water needed for the production is met from the river Periyar. At present TCCs strength is about 800 workers which comprises of 700 employees and 100 managerial staff.TCC is accredited with ISO 9001:2008 certification in 2006 and company is planning to go for ISO 14000 certification.TCC is the only public ltd company manufacturing Caustic soda in India. TCCs competitors are all private companies.TCC has decided to join hands with Indian Space Research Organisation (ISRO).Sodium perchlorate is used as fuel in rockets. Sodium chlorate is the essential raw material for making Sodium perchlorate.TCC and ISRO has signed the deal for the production and supply of Sodium chlorate. Initial Investment for the company

Investors Amount ( in crores)

Govt of Kerala 11.90

KSIDC 8.11

FACT 6.50

Mettur Chemicals Ltd 3.50

TOTAL 30.01

Present Capital Information

Investors % of shares

Govt of Kerala 80

KSIDC 17

FACT 2

Mettur Chemicals Ltd 1

TOTAL 100

Mission Statement Supply quantity and quality chemicals at competitive prices to customers. Customer satisfaction and concern for environment & safety. Utmost level of conservation of all resources. Cost effectiveness in all operations. Regular Up gradation of technologies used in processing.Major Customers of TCC Hindustan Unilever Ltd (HUL) Kochi, Kerala. Indian Rare Earths Ltd (IRE) Udyogamandal, Kerala. Tamilnadu Paper Mills Ltd Pugalur, Tamilnadu. Pigments India Ltd Chalakudy, Kerala. Indian Oil Corporation (IOC) Ernakulam, Kerala. Mysore Paper Mills Ltd Bhadravathy, Karnataka. Fertilizers and Chemicals Travancore Ltd (FACT) Udyogamandal, Kerala. Travancore Titanium Products Ltd Trivandrum, Kerala. Kerala Minerals and Metals Ltd (KMML), Kollam. Hindustan Zinc Ltd [all units]. Hindalco Ltd Ernakulam, Kerala. Hindustan Newsprint Ltd (HNL) Kottayam, Kerala. Kerala Chemicals and Proteins Ltd (KCPL) Kochi, Kerala. Hindustan Organic Chemicals Ltd (HOC) Ambalamugal, Kerala. Kerala Water Authority (KWA) Trivandrum, Kerala. Hindustan Insecticides Ltd (HIL) Udyogamandal, Kerala. National Thermal Power Corporation (NTPC) [all units]. Binani Zinc Ltd Edayar, Kerala. Steel Authority of India Ltd (SAIL) [all units].

GROWTH OF TCC1956- A continuous caustic fusion plant with a capacity to upgrade 20 tones of caustic soda lye per day was added.1958- A chlorine liquefied plant was added mainly to meet demand from the new plant of Hindustan Insecticides Ltd.1960- Production of caustic soda was raised to 30 tones.1963- The caustic soda capacity was raised to new level of 40 ton per day. The company established a new unit for the manufacture of sodium hydrosulphate with rated capacity of thirty ton per day.1967- The third stage of expansion of capacity was raised to 60 per day.1970- A 60 ton per day caustic soda concentration plant was set up. 1975- Fourth stage expansion a new 100 ton per day caustic soda plant was setup. The company set its own water pumping and purifying station.1975-1980- Exported commercial hydrochloric acid to gulf countries.1983- Installed indigenously developed plant cover mercury from effluents.1987- Installed hydrogen firing system.1988- Replacement of graphite anodes by titanium anodes.1990- Brime de colorization unit commissioned.1992- A research and development section was set up.1994- The company is in collaboration with regional laboratory had set up a pilot plant synthetic retile.1996- The company plans to set up a technology for the production of caustic soda collaboration with SAHI GLASS of Japan with a 100 ton capacity.1997- The company commissioned the new membrane technology mid July 1997, with mentioned capacity of TPD.2000- The company set up a brine purification plant.2001-02 - The Company as commissioned a new continuous caustic fusion plant.2002-03 - The Company has increased its production capacity of membrane cell plant to 125 TPD (ton per day).2004-05 -Additional for either metric ton membrane cell process 25 TPD.

TECHNOLOGY/PRODUCT SPECIFICATIONS:PRODUCT 1: CAUSTIC SODACaustic Soda is a basic alkali entering into the manufacturing of a host of articles of daily use like soap, paper, and textiles. There are various concentrations available which are used by different industries. Using this technology brings about 30% reduction in electrical power requirements. This is free from pollution hazards of mercury.PRODUCT 2: CHLORINEChlorine, a co-product obtained in the process of manufacturing of Caustic soda is an equally important basic chemical, inevitable for the manufacture of plastics, textiles& paper, insecticides, pharmaceuticals etc. It is also renowned water purification chemical.PRODUCT 3: HYDROCHLORIC ACID & SODIUM HYPOCHLORITETCC also produces high-purity Hydrochloric Acid used for manufacture of ossein, which is exported for edible pharmaceutical application. Another by-product, sodium hypochlorite, finds its use in bleaching and disinfectant applications and also for extraction of rare earth materials.PRODUCT PROFILETCC produces wide varieties of products from Caustic soda to sodium hypochlorite .Various product of TCC are:1. CAUSTIC SODA (NaoH)2. CHLORINE (Cl2)3. HYDRO CHLORIC ACID (Hcl)4. CAUSTIC SODA FLAKES5. SODIUM HYPOCHLORITEMajor products and production capacity

PRODUCTSPRODUCTION TONE PER ANNUMTCCs main raw materials are common salt (sodium chloride), electricity and water. The company requires about 2650 units of electricity and 1.72 tonne of raw salt per tones of caustic soda produced. Common salt is mainly processed from Gujarat and Tamil Nadu.1. CAUSTIC SODA (NaoH)Caustic soda is a basic alkali. It came into being in the latter half of 19th century with the development of electrolysis. Caustic soda lye, obtained from membrane cell is a clear colourless, odourless and soapy liquid. TCC is producing two types of caustic lye of concentration 32% and 50%.These chemicals are known as versatile basic chemical demanded in various industrial applications. Caustic Soda Lye-from Membrane Cells, A clear colourless, odourless and soapy liquid.Technology/Process Description:The company produces Rayon grade caustic soda using Membrane cell Technology. The main raw materials are common salt (Nacl) ,electricity and water. Company has three running plants which are membrane plant, CCF plant and Soda bleach plant. The process diagram is as follows:Process Flow Chart for Caustic Soda, Liq. Cl2 & Hcl ProductionMembrane Cell Technology: It employs Ion exchange membrane placed between coated Titanium anode and coated Copper cathode. It requires lower current consumption and is an environment friendly technology. However the caustic soda lye thus produces is of low concentration-(32%) compares to the Caustic Soda production in mercury, and the major part of it is to be further concentrated to 48-50% for use of consuming industries. Membrane Plant: The plant carries out following operations. CCF Plant: It is used to concentrate 32% Caustic soda lye to either 50 % Caustic Soda lye or 99% Caustic Soda flakes.Brine saturation and purificationElectrolysisLean brine dechlorinationHCl SynthesisChlorine liquefactionSpecifications(as 100% basis): Sodium carbonate as Na2CO3 % by mass.(Max) : 0.12 Chloride as NaCl % by mass.(Max) : 0.01 Iron as Fe ppm by mass : 0.60

Specifications(as 50% basis):

Sodium hydroxide as NaOH % by mass : 47-50 Sodium Carbonate as Na2CO3 % by mass(Max) : 0.18 Chloride as NaCl % by mass : 0.015 Iron as Fe ppm by mass : 1.00 Nature of Hazard : Corrosive : Causes severe damage to eyes and skin Protective Devices : Goggles, Plastic or Rubber Gloves, Apron, Boots First Aid : If substance has got in to eyes, immediately wash out with plenty of water for at least 15 minutes.Uses: A chemical for dissolving out extraneous matter from wood for preparing pure cellulose and for the preparation of alkali cellulose and for the production of viscose solution. A chemical for preparing pure cellulose by dissolving out extraneous matter. As saponification agent. In bleaching, dying and mercerizing. Reagent for production of various organic chemicals. A purification agent and absorbent for acidic gases. A cleaning agent. For refining petroleum fractions. For processing monazite and refining of Bauxite.

2. CHLORINE (Cl2)Chlorine, a co-product obtained in the manufacturing process of caustic soda is an equally important basic chemical. It is a renowned water purifying chemical. It is a greenish yellow gas. Chlorine is sold after liquefying. Chlorine has got a pungent smell and liquid chlorine is amber in colour. Chlorine another basic chemical is used for the making of plastics, various organic & inorganic chemicals, petro-chemicals, textile & paper, insecticides, pharmaceuticals etc. It is the traditional water purification agent. Chlorine and chlorine compounds in pharmaceutical industry has saved billions of life since its discovery and use.Chlorine (IS646/1986):A greenish yellow gas with characteristic pungent smell. Liquid chlorine is amber in colour and is one and half times as heavy as water. Chlorine % by volume (Min):99.8 Moisture ppm by mass (Max):150

First Aid:

If substance has got in to eyes immediately wash out with plenty of water Remove contaminated clothing and drench affected skin with plenty of water

USES1. Producing insecticides (DDT, BHC etc) and pesticides.2. In purifying drinking water and sterilizing sewage effluents.3. For manufacturing PVC and allied co-polymers.4. As a bleaching agent.5. For producing a variety of organic chlorine compounds.6. For upgrading titanium content in ilmonte.

3. HYDROCHLORICACID (Hcl)Hydro chloric acid produced by TCC is of high purity and finds application in number of chemical industries and it is yellowish green in colour. The Hcl produced have concentration 30.33%. Made using high quality ingredients, these chemicals comply with the industry norms and standards. Hydrochloric Acid produced by TCC is of high purity and finds application in number of chemical industries such as mineral processing, gelatine, food industry, water treatment etc. Hydrochloric Acid Clear colourless liquid

Specifications:

Hydrochloric acid as HCl % by mass 28.50 Iron as Fe ppm by mass 2 5 Free chlorine ppm by mass (Max.) 50

First Aid: If the substance has got into the eyes, immediately wash out with plenty of water for at least 15 minutes. Remove contaminated clothing immediately and wash affected skin with plenty of water. Seek medical treatment when any one has symptoms apparently due to inhalation or contact with skin or eyes.

USES1. For the production of ammonium chloride and in the manufacture of phosphoric acid. 2. In monazite processing for the separation of rare earths as chlorides from thorium. 3. As cleaning agent in galvanizing. 4. For hydrolyzing starch into sugar.

4. SODIUM HYPOCHLORITESodium hypochlorite, commonly known as soda bleach, finds its application in bleaching as a disinfectant and also in the extraction of rare earth elements. It is a pale yellowish green colour liquid. Soda bleach is the only branded product that the company is producing, brand name is Eko clean. Hypochlorite which is a highly useful industrial chemical. Sodium hypochlorite finds its use in bleaching and disinfectant applications and also for extraction of rare earth materials.

Sodium Hypochlorite (Industrial): Pale yellowish green clear liquid Available chlorine gpl (min): 110 Excess alkalinity as naoh gpl (min): 10 15 Quantity (mt)/annum: 15000

Sodium Hypochlorite(domestic):

Sodium hypochlorite for domestic application is marketed under the brand name eko clean.

A powerful disinfectant, which also acts as:

Antibacterial Sporicide Fungicide Algae resistant Mosquito repellent Disinfectants

Applications:

Best recommended for operation theatres of hospitals, drainage and toilets cleaning for hospitals, corporations, municipalities, panchayats and other public and private sanitation purposes. Found effective for cleaning of swimming pools, water theme parks, fish processing/agro processing. Not recommended for fish ponds and fish nurseries.

USES1. As a bleaching agent.2. As germicide and cleaning agent.3. For sterilization.

5. CAUSTIC SODA FLAKESCaustic soda lye is concentrated to 98-99% NaoH and converted to flakes in a continuous caustic fusion plant (CCF). It is a white deliquescent solid in flakes form. This chemical is mainly used in the preparation of dyes, soaps, detergents, and chemicals. White deliquescent solid in flakes form Sodium hydroxide as NaOH % by mass (Min): 99.50 Sodium Carbonate as Na2CO3 % by mass. (Max): 0.40 Chloride as NaCl % by mass (Max): 0.10 Iron as Fe ppm by mass(Max): 20.

USES-A chemical for dissolving out extraneous matter from wood for preparing pure cellulose and for the preparation of alkali cellulose and for the production of viscose solution.-A chemical for preparing pure cellulose by dissolving out extraneous matter.-As saponification agent.-In bleaching, dying and mercerizing.-For processing monazite and refining of Bauxite.-Reagent for production of various organic chemicals.-A purification agent and absorbent for acidic gases.-A cleaning agent.-For refining petroleum fractions

FUNCTIONAL DEPARTMENTSThe main functional departments of TCC are:-PRODUCTION AND OPERATION DEPARTMENTHUMAN RESOURCE DEPARTMENTMARKETING DEPARTMENTFINANCE DEPARTMENTTECHNICAL DEPARTMENTENGINEERING DEPARTMENTCIVIL DEPARTMENTSYSTEMS DEPARTMENTSECURITY DEPARTMENTPROJECT DEPARTMENT

PRODUCTION AND OPERATION DEPARTMENTOperational department is the most important department of TCC. This department carries out the manufacturing of all the products. The company carries out continuous production system; hence this department plays a very crucial role in TCC.Objectives Reduce non confirming products. Maximise the availability of electrolyze operation. Optimizing the specific consumption of electricity, furnace oil and purification chemical.Duties and Responsibilities of Operations Manager Head of the operations department fixes monthly target of the product based on the market requirement. He is responsible for the modification in the production process and responsible for the effluent charges. Operations Manager has the administrative control over the operations department. Operations Manager is the designated emergency controller during any hazardous incident that is leakage or emission of any toxic gas or liquid.

Assistant General Manager(Operations)

Plant Manager-IIPlant Manager -I

Deputy Manager (Production)-IIDeputy Manager (Production)-I

Senior Engineer (Production)-IISenior Engineer (Production)-I

Plant Engineer-IIPlant Engineer-I

Executive Trainee-IIExecutive Trainee-I

Duties and Responsibilities of Plant Manager Custodian of plant. Plant Manager will plan production activities to meet the production of target set by the Operations Manager. Plant Manager has the administrative control of personnel working in the plant. Plant Manager co-ordinates with other managers for the smooth functioning of the plant. Plant Manager is responsible for the material consumption. Plant Manager will plan the shut down activities and carry out maintenance work of plants.

1.4 STATEMENT OF THE PROBLEMEnergy is an important part of the universe, also energy is considered to be an important part of an organization, which means 60% of cost is incurred for electricity used for ptoduction. Here at TCC being one of the major players in the chemical industry, one of the major raw material which is used for the production is electricity. Electricity being one of the scarce and vital energy source and since it is the duty to conserve electricity. The study was done to identify the areas were energy is consumed at its maximum and actions to reduce this consumption which in turn benefits the organization in monetary terms. In management terms, there is some serious business business process reengineering need to be done for the better positioning of the organisation and for achieving and maintaining a strong financial base and security for the organisationTwo such areas were identified, Over voltage and electric power consumption in AGC electrolysers and the huge amount of cost involved with it. The consumption of steam for preheating the brine solution and the cost which is incurred with it.1.5 OBJECTIVES OF THE STUDY(a) Primary Objective

The primary objective of the entire study is to find out the reasons for the high energy consumption in TCC.

(b) Secondary Objective To study about the financial expense incurred due to the high energy consumption. To find out the effectiveness of the solutions that was implemented to reduce the high energy consumption in the organization.1.6 RESEARCH METHODOLOGYTo define any research problem and give a suitable solution for the problem, a sound research is inevitable. Research methodology underlines the various steps involved by the researcher in systematically solving the problem with the objective of determining various facts. Here, during this research, the problem was approached following a descriptive research manner. In association with the operations department of the organisation, the major areas in the organisation where there is a huge loss in resources and finance is identified focussed and the reasons for it were identified using simple observations and by the measurement of the parameters which are associated with it. The problem was analysed using one of the vital tool in management studies i.e, using the Theory of Constraints. The possible solutions for resolving these were enumerated and analysed for the optimum one and which is executed by trial and error method for its efficiency analysis. 1.6.1 Type of researchThe research is of descriptive research type. Descriptive research is used to describe characteristics of apopulationor phenomenon being studied. It does not answer questions about how/when/why the characteristics occurred. Rather it addresses the "what" question (What are the characteristics of the population or situation being studied?)The characteristics used to describe the situation or population are usually some kind of categorical scheme also known as descriptive categories.1.6.2 Research DesignA research design is the arrangement of conditions for collection and analysis of data in the manner that combine the relevance to the research purpose with economy in procedure. It constitutes in the blue print for collection, measurement and analysis of data.1.6.3 Data collection instrument and procedure: Based on need and objectives, types of data required for study and other sources of data are identified. Both Primary as well as Secondary Research Method has been included for preparing this final report.a. Primary data:The primary data is collected through direct observation method. The whole production process and working of machines were observed. Data are also collected from the technicians, electricians, and the engineering heads of the company. b. Secondary data:Secondary data is collected from company records, internet, books and machine manual.1.6.4 Data analysis toolThe data are analysed using simple arithmetic calculations and different graph diagrams. Data are explained through graphs and charts.1.7 SCOPE OF STUDYOperations have been acting as an effective part of all organization since it developed as a separate field of study. The modern days of competition the success mantra for any organization is to implement the most efficient and an updated technology in their operations as it is utmost necessary for the growth and flourishing of the same in this globalized business world. Nature being the provider of everything ,converting it into business also makes a lot of impact if technology is properly implemented, where the success of an organisation always depend on the efficiency and effectiveness of such implementation of technology. The current study shows such defect in application of science and technology effectively and the problems that the company is facing.1.8 LIMITATIONS OF STUDYThe limitations of the study are the following: TCC is a large chemical industry; as such accurate data regarding theinternal affairs of thecompany are not easily available. The available data is not sufficient to get the desired result. As a vast coverage is needed for getting the desired results time is a limiting offer This chapter includes previous studies with respect to business process reengineering and its effectiveness in various organizations. Different articles from peer reviewed journals were taken. The literature includes, Theory of Constraints, Business process Reengineering and Energy savings in Industries. Based on the data obtained suitable variables were identified for further analysis using primary data

This chapter deals with various theoretical concepts which are relevant to the study. Other research studies that are relevant to the current study are also referred to for detailing the importance of the study. Various theoretical concepts that are relevant to the current study are identified as:- Theory of Constraints. Energy savings in Industry Barriers to Industrial Energy Efficiency

THEORY OF CONSTRAINTS (TOC)The theory of constraints is an important tool for improving process flows. The implications of the theory are far reaching in terms of understanding bottlenecks to a process and better managing these bottlenecks to create an efficient process flow.The theory of constraints is an important tool for operations managers to manage bottlenecks and improve process flows. Made famous by Eliyahu M. Goldratt in his bookThe Goal, the implications of the theory are far reaching in terms of understanding bottlenecks to a process and better managing these bottlenecks to create an efficient process flow. Simply put the theory states, the throughput of any system is determined by one constraint (bottleneck). Thus to increase the throughput, one must focus on identifying and improving the bottleneck or constraint.Goldratt in another book,Theory of Constraints, outlines a five-step process to applying the theory:1. Identify the process constraints2. Decide how best to exploit the process constraints3. Subordinate everything else to the above decisions4. Evaluate the process constraint5. Remove the constraint and re-evaluate the processIdentify

In order to manage a constraint, it is first necessary to identify it. InThe Goal,the NCX10 was identified as the constraint. This knowledge helped the company determine where an increase in "productivity" would lead to increased profits. Concentrating on a non-constraint resource would not increase the throughput (the rate at which money comes into the system through sales) because there would not be an increase in the number of products assembled. There might be local gains such as a reduction or elimination of the queue of work-in process waiting in front of the resource. But if that material ends up waiting longer somewhere else, there will be no global benefit. To increase throughput, flow through the constraint must be increased.ExploitOnce the constraint is identified, the next step is to focus on how to get more production within the existing capacity limitations. Goldratt refers to this as exploiting the constraint. One example fromThe Goalwas when the company and the labour union agreed to stagger lunches, breaks, and shift changes so the machine could produce during times it previously sat idle. This added significantly to the output of the NCX10, and therefore to the output of the entire plant. To manage the output of the plant, a schedule was created for the constraint. The schedule showed the sequence in which orders would be processed and their approximate starting time.SubordinateExploiting the constraint does not ensure that thematerials needed next by the constraint will always show up on time. This is often because these materials are waiting in queue at a non-constraint resource that is running a job that the constraint doesn't need yet. Subordination, which is Step 3, is necessary to prevent this from happening. Subordination involves significant changes to current (and generally long-established) ways of doing things at the non-constraint resources.The most important component of subordination is to control the way material is fed to the non constraint resources. Conventional wisdom says that if a resource is idle it is losing money. Conventional practice, then, is to keep efficiencies high by releasing enough material to keep everyone busy - regardless of whether the constraint can process that much material. TOC wisdom says that non-constraint resources should only be allowed to process enough materials to match the output of the constraint. The release of materials is closely controlled and synchronized to the constraint schedule. In contrast to the constraint, non-constraint resources do not have a schedule. Workers are instructed to begin immediately when work arrives at their stations, to work at normal speed (i.e. do not slow down so that work expands to fill the available time), and immediately pass the finished parts on to the next operation. If there is no material waiting to be processed, the non constraint resources will be idle, and that is OK. In fact, preventing non-constraint resources from overproducing is necessary to reach the goal of making more money, now and in the future.

ElevateAfter the constraint is identified, the available capacity is exploited, and the non-constraint resources have been subordinated, the next step is to determine if the output of the constraint is enough to supply market demand. If not, it is necessary to find more capacity by "elevating" the constraint. InThe Goal,schedulers were able to remove some of the load from the constraint by rerouting it across two other machines. They also outsourced some work and brought in an older machine that could process some of the parts made by the NCX10. These were all ways of adding capacity, or elevating the constraint. It is important to note that to "elevate" comes after "exploit" and "subordinate." Following this sequence ensures the greatest movement toward the goal of making more money.Go Back to Step 1Once the output of the constraint is no longer the factor that limits the rate of fulfilling orders, it is no longer a constraint. Step 5 is to go back to Step 1 and identify a new constraint -because there always is one. The five-step process is then repeated.It may appear that implementing TOC involves a never-ending series of trips through the five-step process - a kind of tool to assist in more perfectly balancing a production system. This is not the case. A fundamental principle of the Theory Of Constraints is that the combination of dependent events (such as the steps in a production system) and normal variation (which is always present) makes it literally impossible to ever fully balance a line. There willalwaysbe a constraint in the system. What creates chaos is allowing the constraint to move around. For that reason, companies that get the greatest financial benefit from TOC are those that make a strategic choice of where they want the constraint to be. They then manage their entire operation (product design, marketing, capital investment, hiring, etc.) accordingly. This allows the company to manage the constraint to their advantage rather than allowing the constraint to manage them.KEY PRINCIPLES UNDERLYING TOCSeveral key principles underlie TOC and, according to Goldratt, converge to make fertile ground for TOC. A few of these key concepts are worth emphasizing because of their significance for the management approach used in adopting organizations. The principles include: Processes/organizations as chains: This is crucial to TOC. If processes and organizations function as chains or flows, the weakest links can be found and strengthened. The linkages in question can be between the different steps or activities in a process or between diverse organizations within a supply chain. Local versus system optima: Because of interdependence and variation, the optimum performance of a system as a whole is not the same as the sum of all the local optima. (Local optima are calculated measures for functional areas within an organization.) In other words, an organization that maximizes the output of every machine will not perform as well as one that ensures optimization of the flow of materials and value created through its linked set of activities. Cause and effect. All systems operate in an environment of cause and effect. One event causes another to happen. This cause-and effect relationship can be very complex, especially in complex systems. Capturing the essence of cause and effect within the system and identifying measurements that emulate these relationships are the keys to optimizing system performance. Physical versus policy constraints. Most of the constraints faced in systems originate from policies, not physical things. Physical constraints, such as the number of nurses in a hospital or the number of production machines in a factory, can be objectively identified and dealt with. Policy constraints (e.g., behaviour patterns, attitudes, lack of information, and assumptions) are potentially more damaging than physical constraints, yet are much more difficult to identify and deal with. The belief that producing in large batches is optimal is an example of a policy constraint that can make implementing TOC or related advanced manufacturing approaches difficult. Total system impact. All organizations are systems made up of interdependent activities, each with its own level and type of variability. In order to optimize performance, management needs to understand and focus on the total system impact of a decision or event, not just on its local or immediate effects.

BUSINESS PROCESS REENGINEERING

As the basis of competition changes from cost and quality to flexibility and responsiveness, the value of process management is now being recognised. The role that process management can play in creating sustainable competitive advantage was termed Business process reengineering (PR), and was first introduced by Hammer (1990); Davenport and Short (1990). These authors outlined a new approach to the management of processes, which, it was claimed, was producing radical improvements in performance. The three driving forces behind this radical change are an extension of Porters (Porter, 1980, 1985, 1990) work on competitive advantage, and were summarised by Hammer and Champy(1993) as: Customers who can now be very diverse, segmented, and are expectant of consultation, Competition that has intensified to meet the needs of customers in every niche, and Change that has become pervasive, persistent, faster and in some markets a pre-requisite.Customers, competition, and change have created a New World for business, such that organisations designed to operate in one environment are inadequately equipped to operate well in another. Companies created to thrive on mass production stability, and growth cannotbe simply improved to succeed in a world where customers, competition, and change demand flexibility and quick response. This is also what Drucker (1969) termed the Age of Discontinuity or the challenge to the traditional assumptions of business.Customers, competition, and change have created a New World for business, such that organisations designed to operate in one environment are inadequately equipped to operate well in another. Companies created to thrive on mass production stability, and growth cannot be simply improved to succeed in a world where customers, competition, and change demand flexibility and quick response. This is also what Drucker (1969) termed the Age of Discontinuity or the challenge to the traditional assumptions of business. In todays marketplaces, it is no longer a question of caveat emptor, but rather caveat factor. Customers today are characterised by their relentless demands in quality, service, and price; by their willingness to act on default of contract and by their disloyalty. In fact, the new power and freedom of the customer has destroyed many of the managerial assumptions of the early Management Revolution (Drucker, 1954). There is no longer unearned brand loyalties, no more complicity among rivals in the same markets; no more passing on of rising wages and benefits in the form of higher prices; no more easy reliance on high entry costs to keep out upstart competitors and reducing protection by national governments. Still, as far as managers are concerned, the most powerful of the new stakeholders is the customer. The reward for managers who can earn their respect is not only repeat business but also willing investors. The aim of reengineering in this environment should be to facilitate the match between market opportunities and corporate capabilities, and in so doing, ensure corporate growth. To achieve these goals, downsizing and outsourcing will be by- products of reengineering, but they do not define reengineering, nor are they the purpose of reengineering.Internally reengineering functional hierarchies into teams to facilitate work processes will lead to the elimination of most management layers and will teach managers to do far more with much less. Druckers (Drucker, 1993) view, and one which we support, is that reengineering represents a radical shift away from the tradition in which performance was primarily rewarded by advancement into managerial ranks, that is, the future holds very few control positions. In the ideal, hierarchy should disappear from the reengineered company, and be replaced by the idea of purposeful value added interaction. A change of this magnitude raises many challenges for those managers left to develop, motivate, reward, and affirm employees.The common theme running through reengineered or breakthrough improvements is technology, in particular information technology (IT). IT represents an all encompassing term for computer workstations linked to computer networks, open systems, clientserver architecture, database groupware, and electronic commerce (EC). Together they have opened up the possibilities for the integrated automation of manual-paper based-business processes. The advent of computer assisted software engineering (CASE), and object-oriented programming has helped simplify systems design around office processes (Baets, 1993; Petrozzo and Stepper, 1994), enabling further cost reductions, and the rapid growth of a new industry (Venkatraman, 1994). History is replete with technological advances such as the steam engine, the internal combustion engine, the telephone, the transistor, and the computer that made possible large step changes in both manufacturing and business processes. So too, IT is enabling both manufacturing and office processes to be automated and fundamentally restructured to take advantage of enormous efficiencies in information gathering, storage, processing, retrieval and presentation. Technology in itself, however, does not offer all the answers, i.e. automation frequently fails to produce the gains expected. The IT intensive banking and insurance industries, widely reported to be going through many major PR exercises, has been shown to be making very little use of the latest IT solutions (Watkins, 1994; Zucco, 1996). Many companies putting in major new computer systems have achieved only the automation of existing processes. Others have not overhauled their existing IT hardware, but have expected the new systems to integrate with the old (Watkins et al., 1993). Davenport (1994) warned that IT systems, the hard side of the organisation, need to match the soft requirements of the users. Also, many managers do not rely solely on computer based information to make decisions, and merely changing an IT system will not change a companys culture, strategy or structure. Studies such as the 1994 CSC Index Survey of US and European companies (Champy, 1995) have confirmed that up to 70 percent of PR programmes fail because reengineering programmes have been used as a substitute for strategic thinking. That is, companies undertaking PR have used IT strategy as a substitute for an integrated corporate change strategy. The results are typically disastrous, with different functions within the same organisation left with IT systems that are incompatible with each other, and not being used to gain or improve cross structural benefits. Yet it is in the areas of cross functional, cross-divisional, and cross-company processes that the big improvement gains through IT are to be achieved (Duffy, 1994). A strategic overview is thus essential to reengineered process design and the subsequent selection and installation of the hard and soft systems. It is only with this approach that it becomes possible to automate cross structural processes (Short and Venkatraman, 1992; Taylor and Williams, 1994).

Business process reengineering Concepts, Implementation and problems:Business process reengineering definition:Several authors have provided their own interpretation of the changes being applied to organisations, for example Davenport and Short (1990) have described PR as the analysis and design of work flows and processes within and between organisations. Hammer and Champy (1993) have promoted the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed. Other authors such as Talwar (1993) have focused on the rethinking, restructuring and streamlining of the business structure, processes, methods of working, management systems and external relationships through which value is created and delivered. Petrozzo and Stepper (1994) on the other hand, believe that PR involves the concurrent redesign of processes, organisations, and their supporting information systems to achieve radical improvement in time, cost, quality, and customers regard for the companys products and services. While Lowenthal (1994) describes the fundamental rethinking and redesign of operating processes and organisational structure, the focus is on the organisations core competencies, to achieve dramatic improvements in organisational performance, as PRs essential components. Although the definition by Davenport and Short (1990) is much narrower, their description of the concept is as far-reaching. In practice, both TQM and PR have focused on the definition and operation of business processes to produce products and services within a defined business scope. However, neither TQM nor PR havefocused on strategic business direction setting or planning, but of course these may be necessary components in achieving this vision. Also each methodology, in its own right, does not have the intention or the capability of reinventing business or industry. More importantly only one of these definitions refers to information systems. It can thus be said that PR is not necessarily dependent on IT solutions. There is general agreement that IT can be a powerful enabler, with the radical improvements sought more a function of organisational process redesign, rather than IT implementation (Gadd and Oakland, 1995; Hammer and Champy, 1993). While IT specialists insist that new systems are central to PR, the challenge is increasingly one of the implementation of organisational change and the visioning involved in that change, rather than the technology itself (Wastell etal., 1994). Where there is confusion, it is in both the interpretation and the scope of the organisational change concept. Hammer (1990) referred to business business process reengineering, while Davenport and Short (1990) to business process redesign. While some of these terms are clearly referring to a generic business process improvement model on a large scale, other authors (Watkins et al., 1993; Earl and Khan, 1994) point out that reengineering can be performed at a variety of different levels within the organisation. This is exemplified in IBMs reengineered finance process, which yielded large percentage improvements in costs, time, and quality, but had little effect on overall performance, because it was not a core process central to the strategy of the company (Currid, 1994). Put into strategic context, PR becomes a means of aligning work processes with customer requirements in an interactive way, in order to achieve long-term corporate objectives. To achieve this, Senge (1990); Deming (1993) advocate a systems outlook involving customers, suppliers, and the future. Gulden and Reck (1991) support this view by showing that the secrets to designing a process lie not so much in intimately understanding the way it is performed today, but rather in thinking about how to reshape it for tomorrow. Hammer and Champy (1993) went further to identify three kinds of companies that undertake reengineering: Companies that find themselves in deep trouble. They have no choice. If a companys costs are an order of magnitude higher than the competitions or than its business model will allow, if its customer service is so abysmal that customers openly rail against it, if its product failure rate is higher than the competitions, if in other words, it needs order-of-magnitude improvement, that company clearly needs business reengineering, Companies that are not in trouble but whose management can see trouble coming, Companies that are in peak condition and see an opportunity to develop a lead over their competitors.

Business process reengineering tools and techniques:The various definitions of PR suggest that the radical improvement of processes is the goal of PR. They do not, however, refer specifically to the tools and techniques used in reengineering business processes. The result of this void is that authors and consultants alike have pursued the use of many different tools in the search for the best reengineering application. These tools and techniques include the following:Process visualisation. While many authors refer to the need to develop an ideal end state for processes to be re-engineered, Barrett (1994) suggests that the key to successful reengineering lies in the development of a vision of the process.Process mapping/operational method study. Cypress (1994) suggests that the tools of operational method studies are ideally suited to the reengineering task, but that they are often neglected. Recent evidence suggests that these concepts have been incorporated into tools such as IDEF0 (Integrated Definition Method), DFD (Data Flow Diagrams), OOA (Object Oriented Analysis) (Yu and Wright, 1997), and Prince2 (Process based Project Management, see internet reference: Prince2).Change management. Several authors concentrate on the need to take account of the human side of reengineering, in particular the management of organisational change. Some authors (e.g. Mumford and Beekma, 1994; Bruss and Roos, 1993) suggest that the management of change is the largest task in reengineering. Kennedy (1994) on the other hand, incorporate the human element of reengineering due to the perceived threat it has on work methods and jobs.Benchmarking. Several authors suggest that benchmarking forms an integral part of reengineering, since it allows the visualisation and development of processes which are known to be in operation in other organisations (Harrison and Pratt, 1992; Chang, 1994; Furey, 1993).Process and customer focus. The primary aim of PR, according to some authors, is to redesign processes with regard to improving performance from the customers perspective (Chang, 1994; Vantrappen, 1992). This provides a strong link with the process improvement methodologies suggested by authors from the quality field, such as Harrington (1991a). In some cases, notably Chang (1994), the terminology is almost identical to that used by quality practitioners in the improvement of processes. The major difference, as outlined earlier, appears to be one of scale. It should be noted that few authors refer to any single technique when discussing PR. Most incorporate a mixture of tools, although the nature of the mix depends on the application, whether it be hard (technological) such as proposed by Teng et al. (1994) or soft (management of people), as seen from Mumford and Beekma (1994). While the exact methodologies to be used are the source of some discussion, it can be seen that PR, as a strategic, cross-functional activity, must be integrated with other aspects of management if it is to succeed. This is particularly true since it is not the methodologies themselves, but rather the way that they are used which is unique in PR (Earl and Khan, 1994). Of particular interest are the links between PR and TQM. In summary, therefore, PR can be seen to represent a range of activities concerned with the improvement of processes. While some authors appear to suggest that tools and techniques are the key, most authors suggest that a strategic approach to PR, and the development of a PR strategy is the key to success (Guha et al., 1993; Bruss and Roos, 1993). There seems little doubt in either the literature or in practice that efforts on the scale of PR must be strategically driven and supported by senior management if they are to succeed (Gadd and Oakland, 1996; Barrett, 1994; ONeill and Sohal, 1998). Understanding organisational processesBoth Deming (1993); Senge (1990) have written about the importance of systems thinking in understanding workflow, business processes, and the impact of feedback. In any system, events will occur that have an effect elsewhere in the system, and possibly on the event itself. In order to have a full understanding of the effects of what is being done, it is necessary to understand the whole process and how it fits into the organisational system. IT has the capability of providing the means to achieve breakthrough performances in organisational systems. The vision, however, must come from understanding both the current and potential processes. This reality requires a more holistic view than that taken in traditional TQM programmes (Chang, 1994; Petrozzo and Stepper, 1994). The changes documented by Hammer (1990) at Ford, and by Davenport and Short (1990) at Xerox, involved radical redesign of the processes concerned. Cranswick (1994) reports that many Australian companies have undergone similar radical redesigns, such as the following examples: FAI Insurances extensive use of IT is only a small part of its total reengineering process. It is used primarily to facilitate the cross-functional thinking that is needed for successful reorganisation. Ansett Australia purchased an off-the-shelf revenue management system, knowing full well that other airlines were buying the same product. Their strategic advantage came from the overall integration of system design into the human fabric of both organisation and client, rather than from the system itself. Penfolds and Seppelt identified that consistency, flexibility and availability of information emerged as issues that needed to be tackled if the company was to maintain a competitive framework. After much internal consultation, their IT staff number was cut from 32 to 16, and the company implemented a programme to roll out electronic data interchange services to its suppliers.

July 1997, with all aspects expected to be completed within 4 years. The DAOs business processes are to be re-engineered to achieve substantial efficiencies and greater effectiveness focusing on:1. The consolidation of support and administrative function, reduction in committees and senior officers(Staff reductions of approximately 20%), and2. The collocation and reorganisation of acquisition functions, into groups focusing on common industry sectors or equipment types.The total expected annual savings of $50 million will be directed to enhancing military capabilities and combat elements (see DAO internet reference).Some of the reengineering literature advises starting with a blank sheet of paper and redesigning the process anew. The problems inherent in this approach are: The danger of designing another inefficient system, Ignoring the embedded system knowledge accumulated over many years, and Not appreciating the scope of the problem (Petrozzo and Stepper, 1994; ONeill and Sohal, 1998).Therefore, many authorities (Klein, 1994; Grover and Malhotra, 1997; Stoddard and Jarvenpaa, 1995) recommend a thorough understanding of current processes before embarking on a reengineering project. Current processes can be understood and documented by flowcharting and process mapping. As processes are documented, their interrelationships become clear and a map of the organisation emerges. The aim of PR is to make discontinuous, major improvements. This invariably means organisational change, the extent of which depends on the scope of the process reengineered.As these cross-functional processes are reengineered to improve added-value output and efficiency, many organisations are now questioning the need or even the relevance of traditional functional structures, and are beginning to organise around core processes. In essence these are the processes that control the flow of real and virtual resources within an organisation (Kaplan and Murdoch, 1991).

The reengineering challengeA study of The State of Reengineering was conducted in early 1994 by Champy (1995), and included 621 companies, representing a sample of 6000 of the largest corporations in North America and Europe. The study showed that 69% of the 497 American companies, and 75% of the 124 European companies responding were already engaged in one or more reengineering projects, and that half of the remaining companies were thinking about such projects.However Champy (1995) found that substantial reengineering payoffs appear to have fallen well short of the potential goals Reengineering the Corporation had set: 70 percent decreases in cycle time, 40 percent decreases in costs, 40 percent increases in customer satisfaction, quality, and revenue, and 25 percent growth in market share.Although little information is available on the 71 percent of the ongoing North American reengineering efforts in the sample, overall, the study showed that participants had failed to attain these benchmarks by as much as 30 percent. This leads to the conclusion that the thoroughly reengineered corporation is as yet a rarity. The problem, it would seem, is that reengineering of the corporation is not extending to actual management practice. This is typified by three vice presidents (for sales, service, and order-fulfilment) at a major US computer company, who were thrilled that reengineered work processes promised to cut product introduction time in half, raise customer retention rates by 20 percent, and slice 30 percent from administrative costs in their areas. They were not thrilled enough, however, to willingly give up control of their functional areas and collaborate. As a result, the reengineering effort died a yearafter its inception. In this case, senior managements leadership was not strong enough to implement a change in the pattern of shared values, beliefs and rules for behaviourtheir culture (Davis, 1984).Reengineering horizontal processes such as order fulfilment, new product development, and service delivery, so they become distinctive competencies that competitors cannot readily match is very different from managing a vertical function in a traditional hierarchical organisation. Day (1994) notes three distinctive tenets that must be understood by senior management before reengineering is undertaken: The change to process management emphasises external objectives. These objectives may involve customers satisfaction with the outcome of the process, Coordinating the activities of a complex horizontal process, will require boundaries and horizontal connections to be madeculture change, and Unfiltered information that is readily available to all team members, so as to facilitate the learning process (Senge, 1990).The loan approval process within IBM Credit illustrates both the problems and benefits of managing a process so it becomes a distinctive capability rather than simply a sequential series of necessary activities. Often this process is obscured from top management view because it links activities that take place routinely as sales forecasts are made, orders are received and scheduled, products are shipped, and services are provided (Shapiro et al., 1992). In another example, Marriott Hotels is able to consistently receive the best ratings from business travellers and meeting planners for high-quality service. They are certainly as capable as Hyatt, Hilton, and others at selecting good sites, opening new hotels smoothly, and marketing them well (Irvin and Michaels, 1989). What consistently sets them apart and reveals a distinctive servicecore competency is a fanatical eye for detail. This begins with a hiring process that systematically recruits, screens, and selects from as many as 40 applicants for each position and continues through every hotel operation; for example, maids follow a 66-point guide to making up bedrooms. The effective management of these linked processes, within an organisational culture that values thoroughness and customer responsiveness, creates a distinctive capability that gives Marriott employees clear guidance on how to take the initiative to provide excellent customer service.

Organisational redesign using PR

PR is not intended to preserve the status quo, but to fundamentally and radically change what is done; it is dynamic. Therefore, it is essential for a PR effort to focus on outcomes rather than tasks, and the required outcome will determine the scope of the PR exercise.Schaffer and Thomson (1992) highlighted how focusing on results rather than just activities makes the difference between success and failure in change programmes. The measures used, however, are crucial. At every level of reengineering, a focus on outcome gives direction and measurability; whether it be cost reduction, head count reduction, increase in efficiency, customer focus, identification of core processes and non-value-adding components, or strategic alignment of business processes. Benchmarking is a powerful tool for PR and is the trigger for many PR projects, as in Fords accounts payableprocess. The value of benchmarking does not lie in what can be copied, but in its ability to identify goals (Richman and Koontz, 1993; Earl and Khan, 1994). If used well, benchmarking can shape strategy and identify a potential competitive advantage (Zairi and Leonard, 1994).Hamel and Prahalad (1989, 1990, 1991) established that strategic direction via intent rather than portfolio analysis should be the key to an organisations core competencies, and that through expeditionary marketing this should lead on to developing the skills required to achieve the intent. Establishing its core processes focuses a company on what it does, how it does it, and how it should do it. Core process redesign can thus channel an organisations competencies into an outcome that gives it strategic competitive advantage (Kaplan and Murdoch, 1991). The key element is visioning that outcome (Goss et al., 1993).

The redesign processCentral to PR is an objective overview of the processes to be redesigned. Whereas information needs to be obtained from the people directly involved in those processes, it is never initiated by them. Even at its lowest level, PR has a top-down approach (Hammer and Champy, 1993). Therefore, most PR efforts take the form of a project (Earl and Khan, 1994). There are numerous methodologies being proposed, but all share common elements. Typically, the project takes the form of several discrete phases (Carr and Johansson, 1995).People need to be equipped to assess, reengineer, and supportwith the appropriate technologythe key processes that contribute to customer satisfaction and corporate objectives (Coulson-Thomas, 1993). Therefore, PR efforts can involve substantial investment (Petrozzo and Stepper, 1994), but they also require considerable top management support and commitment. Critical to the success of the redesign is the make-up of the reengineering team. Most authors suggest that the team should comprise the following: Senior manager as sponsor Steering committee of senior managers to oversee overall reengineering strategy Process owner Team leader Redesign teamThis structure varies depending on the author. For example, Harrington (1991b) referred to executive improvement teams and process improvement teams rather than steering committees and reengineering teams. Champions (team leaders) and czars (sponsors) were also referred to, and, depending on the scope of the reengineering effort, the sponsor, process owner, and leader may be one or more people (Hammer and Champy, 1993). The process owner is someone given the responsibility for the overall reengineering of a specific process.The project approach to PR suggests a one-off approach. When the project is over, the team is disbanded and business returns to normal, albeit a radically different normal. It is generally recommended that an organisation does not attempt to reengineer more than one major process at a time, because of the disruption and stress caused. Therefore, in major reengineering efforts of more than one process, as one team is disbanded, another is formed to redesign yet another process. Considering that Ford took 5 years to redesign its accounts payable process (Davenport, 1993c), PR on a large scale is a long-term commitment. In a rapidly changing business environment, it is becoming more likely that companies will reengineer one process after another. Competitive advantage is a dynamic goalone that does not stand still (DAveni, 1995). Once a process has been redesigned, most authors call for continuous improvement of the new process by the team of people working in the process. That is, organising work around people which fosters interaction, understanding, and responsibility. The dissemination of information via IT further empowers the team to make decisions and inevitably results in a delayering of management structures.

Greatest risks perceived in embarking on a PR programme

Carr and Johansson (1995) identified two types of risk in the implementation of PR: Technical Risk, which is a fear that the process changes will not work, and Organisational Risk, by far the greatest risk, which is the possibility of corporate culture reaction against the changes. It is also noteworthy that only 44 percent of respondents to the Carr and Johansson survey cited that they would accept more than a modest amount of risk during implementation. Thirty seven percent of respondents cited multiple communications with employees as a critical must do in order to minimise the risks in a reengineering effort. The message should be simple, involve top management, and must be communicated as early as possible so that understanding and buy-in is created at the start of the project. Another methodology cited by Carr and Johansson in the reduction of risk is to demonstrate the success of reengineering through the implementation of precisely targeted pilot programmes. They help communicate strategy, and can also reinforce management commitment and create user buy-in.

ENERGY SAVINGS IN INDUSTRY

A. Energy Use in IndustryIndustry is the major user of energy in modern society, accounting for roughly 40% of final energy use. Coal or oil are heavily used, especially by primary industry and manufacturing and refining. Gas is being used increasingly to replace coal because it is a cleaner fuel producing less impact on the environment. Electricity is only a minor component of industrial energy use although its use in driving electric motors is very important.

The major sectors within industry can be categorised as follows:

Manufacturing this includes the processing of primary resources into consumer products. Mineral refining, oil refining and chemical manufacturing are some areas of energy use where considerable savings could be made. Such activities often occur in the industrial zones of major cities.

Power Generation - the power generation industry is a massive user of fossil fuels and accounts for more than 50% of international greenhouse gas emissions. Many power stations are very inefficient and there are strong economic and environmental incentives to save energy in the power supply industry. Most cities have major power stations and these are often a cause of air pollution as well.

Mining this is a primary industry which generally occurs outside cities, often in remote parts of the country. Energy intensity is high in most mining operations but there is an incentive to save energy because energy wastage is reflected in the cost of the minerals.Agriculture another major user of primary energy which takes place in rural areas and is largely beyond the scope of city governments to influence it.

Construction is a modest user of energy, particularly liquid fuels because this activity often takes place at sites where electric power is not readily available. Considerable savings are available in this sector because there is often a large amount of wastage in construction activities.The main focus will therefore be on energy savings in manufacturing and power generation as these are the major users of industrial energy in cities.

B. Energy Auditing in IndustryEnergy auditing in industry takes a similar approach to audits undertaken in the commercial sector and will generally involves: An analysis of existing energy consumption records to determine where, how and how much energy is being used in the plant. It will also seek to identify trends in consumption data. A walk through audit that documents where the main areas of energy consumption exist within the plant. This phase will identify any obvious areas of wastage together with the most promising areas for potential savings Detailed analysis phases which will take the data obtained in the previous two phases and prepare detailed plans for energy savings options. These plans will include details on the energy use and cost of each stage of the production process as well as costings and expected payback periods of the various energy saving options proposed.In the case of the industrial sector, the main focus should be level three auditing, where the individual processes are analysed, for example, the production of steam for use in commercial laundries. Although level one auditing, which focuses on the analysis of energy use through and investigation of the tariff structure of existing energy purchases, should be undertaken, the greatest potential for savings in the industrial sector will usually revolve around the selection, operation and maintenance of efficient equipment in the process.

1. Planning for Energy Efficiency in Industrial ProcessesOnce an initial energy audit has been undertaken, it will provide an important first step in monitoring and achieving the progress towards energy efficiency goals. This information is the baseline energy consumption, or the energy usage associated with current practices in the factory as well as existing equipment. Known as T0, this is the energy consumption prior to any systematic energy efficiency measures being undertaken.In conjunction with the result from the screening survey, the establishment of this baseline information allows energy managers to set targets for reduced energy consumption which can be achieved through changes in the management and operation of the industrial process as well as targets which would be possible through the implementation of energy efficient technologies.

Short Term Energy Efficiency TargetsEnergy efficiency targets, which can be achieved in the short term, as a result of streamlined operation of the plant, are known as T1, or housekeeping targets. These energy savings will usually be the result of the efficient use of energy consuming equipment, a reduction in the amount of waste energy, timely maintenance of equipment and continual monitoring of the energy consumption of the industrial process. Specific examples of housekeeping targets for electric motors, compressed air systems, process heating, steam and heat recovery are covered later in this chapter, and are symbolised by (T1).Long Term Energy Efficiency TargetsFurther reductions in energy consumption which can only be achieved through purchase with a high capital cost, are known as T2, or investment targets, and should ideally be based on the lowest energy consumption of best practice examples of similar industrial processes. As the purchase of expensive capital equipment is required to achieve these targets, careful modelling should be undertaken to ensure that the investment is sound, ie that the payback period of the equipment is not greater than the working life of the equipment.Innovation Energy Efficiency TargetsEnergy efficiency is an area of increasing technological innovation and some consideration should also be given to setting T3, or innovation targets. These targets are based on the energy consumption of state of the art technologies, which are still economically viable. Innovation targets, whilst not immediately achievable, may become achievable in the medium to long term as a result of changes in the economic environment (i.e. greatly increased profitability of the industry), the production environment (i.e. the need for a higher quality or specialised product for niche markets) or regulatory changes (i.e. the introduction of legislation governing pollution control, energy consumption or the Kyoto protocol).

C. Strategies for Energy Savings in IndustryThe strategies for achieving energy savings in industry are quite different to those for most other sectors. Industry is very diverse and is often controlled by very large multi-national corporations. In this context the appropriate approach needs to be carefully considered. Industry is generally receptive to efforts to cut its energy costs but it is less likely to be attracted to regulatory measures that increase its operating costs.

Technical OptionsThe technical options available for energy savings in the industrial sector are as diverse as the industries themselves. However, they principally revolve around the saving of energy in areas such as: Steam Furnaces Heat RecoveryThe production of onsite power and heat (or steam) through Cogeneration systems, or Combined Heat and Power (CHP) systems can also result in energy savings, through the utilisation of waste energy associated with the production of power.1. Energy Savings and Steam GenerationSteam is used for a multitude of purposes in industrial plant. It can provide heat for chemical processing, hot water for cleaning purposes, steam for input to turbines for producing power and so on. Steam is generally produced by boilers. Boilers typically operate well below their optimum efficiency and savings of approximately 15% should be readily achievable. As with all examples of industrial energy efficiency, it is important to consider the whole steam system from generation to recovery. Heat (and thus energy) losses in the steam generation and distribution systems will result in poor heating at the location of the end use.

2. BoilersEnergy savings in the generation side of steam use are usually the result of efficiency improvements in the operation of the boiler. In maximising the efficiency of boilers two key principles need to be addressed: first, the level of excess air (the extra air needed to ensure good combustion of the fuel in the boiler) and secondly the temperature of the flue gases needs to be kept as low as possible (otherwise a large part of the heat that was produced in the boiler will go up the chimney).Good monitoring can be used to assist in achieving these outcomes. In addition, to these, the utilisation of high quality water, free from contaminants, ensures that the minimum amount of heat is required to produce steam.

In boiler plants, there are typically four areas of potential savings: Monitoring equipment (T1/ T2) Load management (T1) Condensate return (T1/T2) Fuel selection (T1)

Monitoring EquipmentBoilers are a potential source of energy savings since they are frequently inadequately monitored, even at the simplest level, resulting in efficiency losses, and hence. Simple, but regular analysis of the flue gases, including chemical analysis of the gases and its temperature, will help determine if the boiler is operating efficiently. Care should be taken to ensure that the tests are conducted with load levels of at least 65 70% and that the load and gas (steam) pressures are constant. Once this level of analysis is well established, additional monitoring equipment which can determine the gross thermal efficiency of the boiler, may be required.

Condensate ReturnUnfortunately, there will always be some efficiency losses in process heating due to boilers as a result of condensate. Boilers and reticulation systems which are fitted with condensate return systems are far more efficient than those where the condensate enters a waste stream. The efficiency gains are largely the result of chemical profile of the steam condensate, which is typically hot and free of oxygen. This liquid requires less energy to convert the already heated and deoxygenated liquid to gas (especially steam).Fuel SelectionThere are seven common types of fuels available for boilers: Coal Natural gas Liquefied petroleum gas (LPG) Furnace Oil Diesel Electricity Wood, or wood wastes (Biomass)

In many parts of the world, coal is used as a boiler fuel as it is usually the cheapest industrial fuel source. However, many countries are looking towards natural gas and biomass as alternatives due to the increasing cost of the traditional fossil fuels, diesel, coal and electricity as well as regulatory changes. When selecting or reviewing the fuel selection for boilers, careful consideration should be given to ensure that the full cost of the fuel, including transportation cost, is considered. For example, a boiler in a pulp and paper mill may be more cost effective if it utilised the wood waste from the pulp process than coal or natural gas, despite a supply of both nearby.Cogeneration, the simultaneous production of heat and power is also a potential area of energy savings, through the onsite generation of heat / steam and electricity.3. Energy Savings in Steam Distribution SystemsAs with compressed air systems, the distribution of steam throughout an industrial facility is a potential area of energy loss, and hence increased operating costs. Steam traps are used in steam distribution systems to remove condensate as it forms. They often have the dual function of removing any entrapped air in the system. The presence of air and condensate in steam systems reduces the effectiveness of heat transfer in these systems as they tend to form insulating layers on heat transfer surfaces.This means that temperatures have to be higher in order to achieve the same rate of heat transfer. Also the presence of air reduces the overall temperature of the system which is governed by the pressure of the steam. If part of the pressure of the system is caused by entrapped air, the net pressure of the steam is less than that read on the steam gauges and so the temperature will be lower than expected. Regular checking of steam traps and air vents is essential for the efficient operation of steam plant.Energy is also wasted in steam distribution systems where heat is lost to the environment through inadequate insulation of the reticulation system. Care needs to be taken with valves and fittings that, if not properly insulated, lead to significant heat loss. Any heat lost in the distribution system means that additional fuel has to be consumed in the boiler to make up for this loss.Condensate is an inevitable product of any steam system either as a result of heat loss or simply as a result of using the steam to transfer heat to a process. This condensate represents a source of hot, very pure water and so is an ideal feedstock for the boiler input. Assuming that the condensate