A systems study on biodiesel production of Mt. Holly Coco Industrial Co. Ltd. (2010)

Thesis Archive

A systems study on biodiesel production of Mt. Holly Coco Industrial Co. Ltd. (2010)

Co, Glenn Wendell S.
Go, Jester Bryan V.
Huyong, Juan Paolo M.

Abstract:

-Mt. Holly Coco Industrial Co. Ltd., now existing for 5 years, has been able to carve a name in the biodiesel industry as one of the top biodiesel manufacturer in the country today. Its mission is to create a high-value domestic and export product derived from coconut oil to bolster development of biodiesel industry in the country. It envisions itself to provide solutions in reducing the country’s dependency from foreign oil products, in view of increasing fuel demands, fluctuating oil prices and shortage of fossil oils in the world market by utilizing indigenous resources in enhancing the country’s energy supply.

The production system of the company is experiencing opportunity loss due to actual cost of goods sold exceeding the standard cost of goods sold by 0.64% from October 2008 to October 2009, which resulted in an annual opportunity loss of Php 1,097,842.07.

Using Cause-and-Effect and Pareto, the root causes that were proven to be contributing 85% to the total cost are unattained prescribed methanol temperature, time-ineffective lab location, high acidity of coconut oil, frequently absent workers, and pump failures.

The solutions were proposed to address the significant causes high cost of goods sold include the implementation of effective, consistent and workable policies and procedures, preesterifying of RBD coconut oil in advance, addition of chillers, buying of new stainless steel pumps, implementation of preventive maintenance, laboratory relocation and providing landline on the production area.

Using simple Cost-Benefit Analysis, the comparison between the total costs of implementation of proposed solutions from the total expected annual savings resulted in a total net benefit of Php78,177.57 for the first year of implementation. The solutions are found to be feasible and ready to be implemented within a span of nine months.

Adviser:

Ms. Bella Manalang