Proposed best operating practices to improve technical efficiency in Brazilian sugar and ethanol plants

THE AIM OF this study was to propose best operating practices to improve the efficiency of sugar and ethanol plants in Brazil. Industrial technical efficiency is the main performance indicator of a sugar and ethanol mill and represents the percentage of sugarcane that is recovered and processed into sugar, ethanol and other products. Thus, given the increase in competition and the need for productivity optimisation, Brazilian milling companies need to improve their efficiency regarding the available inputs. The methodological procedures involve both quantitative and qualitative approaches. Data Envelopment Analysis (DEA) was used in order to measure the productive efficiency of Brazilian sugar and ethanol mills. The database used comprises information from 33 sugarcane milling companies in the Piracicaba region, Sao Paulo, collected during the crushing seasons from 2010?2011 to 2014?2015. Then, a two-stage DEA was performed using quintile analysis and truncated multilinear regression. Through this mathematical analysis, seven key indicators of the production process were found, which provide a strong influence on the efficiency of the analysed plants: delivery time, ART extraction from juice, ART loss in the filter cake, yeast, rod-shaped bacteria in the raw wine, alcohol loss in vinasse and alcohol loss in flegmass. The second step was a case study carried out at a sugarcane mill considered efficient in the Ribeirao Preto region, Sao Paulo, that involved an interview with two experts on sugar and ethanol production processes aimed to understand why certain mills are more efficient than others and how the seven key indicators previously found are managed to provide higher efficiency. Finally, the information from both stages was cross-referenced and analysed, leading to the proposal of best operating practices regarding each of the seven variables, which are likely to increase technical efficiency and competitiveness among the sugar and ethanol milling companies. In conclusion, the results previously mentioned suggest that, although industrial efficiency is influenced by the available technology, industrial plants with lack of modern technology can have excellent performance with the application of the best practices found in this study. Therefore, it is possible to affirm that knowledge, experience and a set of good manufacturing practices used in the operation explain the results achieved by the milling company evaluated in the case study. The results suggest that the observation of the production processes related to the detected variables and the adoption of the proposed best industrial practices will increase the technical efficiency.