MTR Foods, like many other organizations, deals with several aspects of operations management, be it in the choice of products and
manufacturing technology; utilization of capacity; management of quality, costing and sourcing of materials; or customer-relationship
policies.
Operations Management at MTR Foods, Bangalore Operations management is the key to achieving competitive advantage for
organizations, whether they are in the manufacturing industry or the service industry. Operations management processes address the
questions that an organization faces in its choice of products and manufacturing technology, utilization of capacity, maintenance of
quality, costing and sourcing of materials, and customer-handling policies. MTR Foods, like many other organizations, deals with
several aspects of operations management. According to company sources, MTR Foods is the fastest growing vegetarian processedfood company in India, and it had a turnover of USD 20 million for the year ending March 2008. To add to that, MTR Foods is
growing annually at a rate of 35 per cent. With a commitment to quality, recipe expertise in Indian vegetarian food, and technological
capability, MTR provides complete authentic meal solutions to today's discerning consumer. MTR brands in most categories are
market leaders in India and abroad. The company began exporting its products 10 years ago, and today, its product range is exported to
the United States, the United Kingdom, Malaysia, Singapore, the United Arab Emirates, the Sultanate of Oman, Australia, and New
Zealand.
MTR's portfolio of products covers a wide range of processed foods, including ready-to-eat, ready-to-cook, and frozen food; instant
dessert and snack mixes; spices and spice blends; vermicelli; pickles; papads; and ice cream. The products reflect the authentic flavour
of the region they are from, and contain no preservatives. MTR's manufacturing facility is located in the outskirts of Bangalore. There
are presently about 800 people working in the factory, which operates on three shifts. The factory has eight divisions. Each division
has separate buildings with modern manufacturing facilities that enable it to carry out all stages from raw-material handling to
packaging in hygienic conditions. MTR makes judicious use of technology and systems to meet consistency and quality standards.
Some of the technical know-how at MTR's ready-to-eat manufacturing division has been derived from the Defence Food Research
Laboratory (DFRL) at Mysore. Twenty-two varieties of ready-to-eat recipes are manufactured in the ready-to-eat division. The exact
proportion of raw materials are drawn, processed, and mixed according to the recipe. These are then sent to the packaging division.
The food is packed in aluminium foil while it is still hot. Aluminium foil increases the shelf life of food and prevents microbial
contamination. The packaged food then goes through the autoclave process (sterilization) so that the microbial contamination can be
brought down to zero. After the autoclave process, the packs are sent to the hard-packing section, where an X-ray machine scans them
for any unwanted particles inside the pack. MTR requires a large variety of packing material for its varied range of products and
package sizes. Furthermore, information on ingredients, shelf life, cooking instructions, and other statutory details may vary for each
packet. The packaging division at MTR is responsible for printing and preparing the packaging material. The printing is done on the
raw material for packaging, which is then laminated. These packages are then sent to the centralized store in the same division. The
packaging materials are drawn out from the central store when required and other details such as the MRP, the best before date, the
lot number, and the manufacturing date are printed on the packages before they are sent to the respective divisions. MTR Foods is an
ISO 22000: 2005-certified company. The company has also successfully met the Hazard Analysis and Critical Control Point (HACCP)
requirements. Its facilities are equipped with modern systems to ensure adherence to strict quality norms. A well-appointed lab
consisting of analytical, chemical, and microbiology sections performs a variety of tasks for quality control and assurance. In the
chemical section, several important parameters such as the pH, moisture, and the acidity of the food are checked.
Organizations face several challenges in operations management, and MTR Foods is no exception in this regard. One of its biggest
challenges is to forecast the demand for its numerous products. As MTR is in the business of manufacturing food items that have a
limited shelf life, the accuracy of such forecasts is crucial for the company. Its forecasting is based on experience, seasonal variations,
and the company's growth rate. While forecasting demand, the rise in demand during the festive season is also kept in mind. Newproduct development is also a challenge for MTR. It requires innovation, an understanding of customer preferences and tastes, and the
capacity to translate these into the final product through the right choice of raw materials, blend, and production. Therefore, it is not
surprising that MTR has a long new-product development process. New recipes are developed, tested in the product development lab,
cooked, tasted, and refined before they can be launched for regular production. Choosing the right manufacturing processes is crucial
as it has implications for the cost of operation, quality, and productivity. For example, in MTR's spices division, manufacturing
process choices closely follow the traditional method of using the best possible ingredients and hours of pounding. First, the raw
materials are roasted. Roasting serves two purposes: it increases shelf life and kills microorganisms. The ingredients are then pounded
and mixed together. MTR also faces several planning challenges. Planning for raw material procurement, the release of production
plans into the shop floor, and dispatch are just a few examples. Raw material procurement poses unique challenges as MTR's raw
materials are mostly agrarian and seasonal in supply. Good supply management practices are essential to maintain a continuous supply
of high-quality raw materials at a reasonable price. Like MTR, every organization in the manufacturing and service sectors of our
economy faces a similar set of issues, albeit in varying degrees. These issues can be addressed by applying several tools and
techniques, collectively known as operations management.
Source: Vasudeva Reddy, MTR Foods Limited, Unpublished summer study report submitted at IIM Bangalore, 2008.