Operation, Failure and Safety Analysis along with Inventory Management

A

SUMMER TRAINING REPORT

ON

“OPERATION, FAILURE AND SAFETY ANALYSIS ALONG WITH

INVENTORY MANAGEMENT”

FOR

“C.M. SMITH AND SONS LIMITED

NADIAD PLANT - FOUNDRY DIVISION”

Submitted to

Anand Institute of Management

Under The Guidance Of

SNEHAL BHATT

Assistant Professor, AIM

Prepared By

UTKARSH AMARAVAT

ENROLLMENT NO: - 127020592003

MBA SEMESTER III

YEAR: 2013

Anand Institute of Management

M.B.A. PROGRAMME, OPPOSITE TOWN HALL, NEAR GRID, ANAND

i

PREFACE

As undergoing the course of Masters of Business Administration in Gujarat Technological

University, This summer training project report has been prepared in partial fulfillment of the

requirement of academic where one can get opportunity to face the real working environment

and to learn practical aspect of management.

Before finishing MBA and going in practical world, it is necessary to learn how actually

Company run. I take Marketing as specialization in MBA and to do marketing its necessary

one can have product, so to know more about Production do my training in C.M. Smith and

Sons Ltd., Nadiad Plant. Foundry is provide product for marching and one of the technique to

produce raw material, and to learn foundry all activity in practical manner do this project in

particularly Foundry Division. It was a complete learning and research process throughout my

training. I had a very memorable and worthy experience with the company.

The rationale behind doing the project work is to study, analyze and solve problem occurred in

C.M. Smith and Sons Ltd., Nadiad Plant – Foundry Division to make it more effective and

efficient to achieve its goals.

ii

ACKNOWLEDGEMENT

It was indeed an opportunity for me to prepare a project report on Production Management for

C.M. Smith and Sons Ltd. during the Summer Trainning Project for M.B.A. programme. My

heartful thanks to Mr. Akash Shah, my project guide and Mr. Snehal Bhatt who helped me to

bring out this project in good manner with them precise suggestion and rich experience. I

gratefully acknowledge my sincere thanks to my friends who help me in this project when

needed.

I am extremely thankful to Mr. Nirav Trivedi (HR Manager) and other C.M. Smith and Sons Ltd.

other employees and management for them constant support and encouragement throughout

the project and especially for provide me data and give me time when needed for this project.

iii

DECLARATION

I, UTKARSH AMARAVAT hereby declare that the report on “Summer Trainning” entitled

“OPERATION, FAILURE AND SAFETY ANALYSIS ALONG WITH INVENTORY

MANAGEMENT” is a result of my own work and my indebtedness to other work Publications, if

any, have been duly acknowledgment.

Place: - Anand, Gujarat, India

Date: - 24/07/2013

Utkarsh Amaravat

iv

LIST OF TABLES

Table No. Table Description

Page No.

1.1 Company Profile 1

7.1 Shift wise Production Plan Analyses 24

7.2 Overall Production Plan Analyses 24

7.3 Problem in achieving Production Plan 25

7.4 Hypothesis testing 1 28

8.1 Production Activities 30

8.2 Observed Duration 32

8.3 Expected Time for Activities 33

8.4 Expected Time for Activities for Batch Production 35

8.5 Critical Path Calculation 40

8.6 Total Float for all activities 41

8.7 Variance for Critical Activities 43

8.8 Hypothesis Testing 2, One Sample Test 45

9.1 Severity Rating Scale Description 47

9.2 Occurrence Rating Scale Description 47

9.3 Probability of Failure occurred 48

9.4 Detection Rating Scale Description 49

9.5 Process Failure and Effect Analysis Sheet 50

10.1 Quantity received and Inventory demand / day 55

10.2 Safety Stock for Inventories 58

10.3 Ordering Cost for inventories 60

10.4 Inventory Handling Cost / day 63

10.5 Security Cost / day 64

10.6 Storing Cost / day 66

10.7 Insurance Cost / day 68

10.8 For Inventories other than in store Electricity Charges / day 69

10.9 Store electricity charges / day 70

10.10 Electricity Cost / day 71

10.11 Carrying Cost / day 73

10.12 EOQ for Inventories 74

10.13 Number of orders / month 76

10.14 Level of Inventories 79

10.15 Hypothesis Testing 3 83

v

LIST OF FIGURES

Figure No. Figure Description

Page No.

1.1 Organization Structure 3

2.1 Plant Layout 9

2.2 Production process 10

2.3 Black Sand Plant Process 14

7.1 Shift wise Production Plan vs. Actual Graph 24

7.2 Overall per day Production Plan vs. Actual Graph 25

7.3 Shift wise Production Problem Occurrence Graph 26

7.4 Overall per day Production Problem Occurrence Graph 26

7.5 Plan vs. Actual Output Comparison Graph 28

8.1 Network Diagram 39

8.2 Gantt Chart 42

9.1 PFMEA Components 46

10.1 Carrying Cost Elements 62

10.2 Various Inventory Level 77

vi

TABLE OF CONTENTS

Page No.

Preface i

Acknowledgement ii

Declaration iii

List of Tables iv

List of Figure v

Table of Contents

vi

1 About the Company

1.1 Company Profile 1

1.2 Vision and Mission Statement 2

1.3 Milestone since Inception 2

1.4 Present Man Power Status 3

1.5 Organization Structure 3

1.6 Types of Communication Channel 4

1.7 Company Believes 4

1.8 Company Philosophy

4

2 Production Department

2.1 Introduction 6

2.2 Company Products 6

2.3 Foundry Division Strength 6

2.4 Raw Inventory 7

2.5 Plant Layout 8

2.6 Production Process 10

2.7 Material Handling Equipment 12

2.8 Foundry store and Purchase 13

2.9 Black Sand Plant Process 13

2.10 Foundry Division Quality Assurance Measures

15

3 Literature Review

16

4 Signification of Study

19

vii

5 Research Hypothesis

20

6 Research Methodology

6.1 Problem Statement 21

6.2 Objectives of the Study 21

6.3 Research Design 21

6.4 Data collection Method 21

6.5 Sampling Method 21

6.6 Sampling Unit 22

6.7 Sample Size

22

7 Production Plan and Problems

7.1 Introduction 23

7.2 Production Plan Analyses 23

7.3 Problems in achieving Production Plan 25

7.4 Hypothesis Testing 27

7.5 Chapter Summery

29

8 Operation Analysis using Networking Techniques

8.1 Introduction 30

8.2 Production Operations/Activities 30

8.3 Observed Activity Time 31

8.4 Expected Time for Activities 33

8.5 Expected Time for Activities for Batch Production 34

8.6 Network diagram and Critical Path 38

8.7 Calculation for total Float 40

8.8 Gantt Chart 41

8.9 Probability to complete less than Critical time 43


8.11 Chapter Summery

45

9 Process Failure Mode and Effect Analysis

9.1 Introduction 46

9.2 PFMEA Components 46

9.3 Risk Priority Number (RPN) 49

9.4 Process Failure Mode and Effect Analysis sheet 53

9.5 Chapter Summery

53

viii

10 Inventory Management

10.1 Introduction 54

10.2 Quantity received per order and demanded per day 54

10.3 Safety Stock 57

10.4 Ordering Cost 58

10.5 Carrying Cost 62

10.6 Economic Order Quantity (EOQ) 72

10.7 Number of orders 75

10.8 Various Inventory levels 77



84

11 Safety Analysis

11.1 Introduction 85

11.2 Safety Analysis based on the Factory Act, 1948 Safety Provision 85


90

12 Scope for further study

91

13 Conclusion and Suggestions

92

Bibliography

ix

Chapter 1

About the Company

1

1.1. Company Profile

Table 1.1 Company Profile

Company Name: C.M. Smith and Sons Ltd.

Company Logo:

Founder: C.M. Smith

CEO: R.C. Smith

M.D. Ashwinbhai Smith

Contact Details:

C.M. Smith and Sons Ltd.

Dashrath Wadi,

Court Road,

Nadiad – 387001

Gujarat, India

Tel: +91 268 2567285, 2566061

Fax: +91 268 2550094

Email: [email protected]

C.M. Smith and Sons Ltd. was established its manufacturing facility in 1943 and fully supplied

since 1957. C.M. Smith and Sons Ltd. presently manufacture & Supplies machined parts for

Passenger Cars, Utility Vehicles, Light-Medium-Heavy & Multi Axle Vehicles, Trailer parts,

Engineering Industries etc. C.M. Smith and Sons Ltd. are an ISO 9001 & TS 14696

certifications Company with a State of the Art Manufacturing facility and a distinguished brand

new Administrative block.

C.M. Smith and sons Ltd. have three fully computerized foundry with high pressure moulding line,

computerized sand plant, pressurized pouring furnace and supported by full fledge modern inspection

facilities like Spectrometer, Image Analyzer, Tensile, Elongation, Simulation etc. and

Highly sophisticated machine-shop equipped with worlds best branded VMC, HMC, VTL and

Turning Producing Gray Cast Iron and Ductile Iron (Nodular Iron).

C.M. Smith and Sons ltd. have presently Catering Export Market at U.S.A., Italy, Germany, South

Africa, East Africa, Saudi Arabia, Australia, U.K. etc. and have Major Customers Like Tata Motors

Limited, Tata Cummins Limited, Volvo-Eicher Motors Limited, Ashok Leyland Limited, American Axles

Limited, Automotive Axle Limited, Mahindra & Mahindra Limited, Fairfield, ThyssKrupp, etc.

2

1.2. Vision and Mission Statement

1.2.1. Company Vision and Value

C.M. Smith and Sons Ltd. believe in the honesty, fairness, respect, and quality that underlie

their everyday activities. By using utmost honesty and fairness, we treat our customers with

the same respect that we want and appreciate. It is our duty as a manufacturer to provide high

quality products that surpass the needs and requirements of the customer in order to provide

long lasting relationships.

1.2.2. Company Mission

C.M. Smith and Sons Ltd. strives in all words in actions,

1. To create a supportive and fair work environment.

2. To provide friendly, courteous service to our customers.

3. To ensure the highest standards of product quality.

4. To be fair, honest, and considerate with our suppliers.

5. To be an active and positive force in the communities where we do business.

1.3. Milestones since Inception

C.M. Smith and Sons Ltd. achieving following milestone and awards since Inception,

1. Best Vendor for casting and machining award from Volvo - Eicher Commercial Vehicle

Ltd.

2. Best Vendor for new product development award from Volvo - Eicher Commercial

Vehicle Ltd.

3. Life time achievement award from Tata Motors Ltd.

4. Appreciation letter from Volvo - Eicher Commercial Vehicle Ltd. (Pithampur) and

Fairfield Mfg. Inc. (USA) for competitiveness in CQD (Cost, Quality & Delivery).

5. Appreciation letters from Tata Motors Ltd. for exceptionally fast developments of any

part.

6. First OE parts foundry cum machine shop Company in Gujarat to get TS - 16949 in

2004.

7. Continued business since more than 40 years with Mahindra & Mahindra Ltd. (Mumbai)

& Tata Motors Ltd.

8. Provided technical collaboration for 2 foundry plants out of India.

3

9. 100 % Parts supplied to all OEM's declared DOL status due to highly consistent quality.

1.4. Present Man Power Status

Without Man Power production house particularly Foundry can’t run. In C.M. Smith and Sons

Ltd. around 300 Human Resource are working in 3 shifts as operator, helper and staff. These

300 employees are work in Foundry, Machining and Administrative office.

1.5. Organization Structure

C.M. Smith and Sons Ltd. organization Structure is as shown in fig. 1.1. In Company Nadiad

plant mainly two divisions Marching and Foundry. Along with this Company have HR

Department which deal with human requirement as production (For more information regarding

HR Department Refer Chapter 2). In Company Nadiad plant not has separate Marketing and

Finance Department. In Company Nadiad Plant has Administrative Department which deals

with worker wages and employee Salary; also maintain plant sales Information.

Fig. 1.1 Organization Structure

Chairman

M.D.

C.T.O. GM/DGM

Admin

Sales & Mkt.

All Plant Head

Nadiad

Sr. Manager Production/Machining

Manager QA/SPC

Manager Maintenance

Manager Electrical

Sr. Manager Foundry

Manager Metrology

Manager Foundry QA

Bhumel ZAK GIDC

Account

Sr. Manager

Account & Finnance

4

1.6. Types of Communication Channel

For Internal Communication purpose C.M. Smith and Sons Ltd. used Intranet (LAN

connection) and all employees working in Company have own Intranet Id, Company also have

general Notice board for communication purpose with workers and some time used mouth

communication if required; And For External Communication with other plants, suppliers and

clients C.M. Smith and Sons ltd. used Internet.

1.7. Company Believes

C.M. Smith and Sons Ltd. believe in following things to run business successfully and maintain

good atmosphere inside Company.

1. Customer Satisfaction Enhancement

2. 100% On-time Delivery to Customer

3. Better Quality Level by Continuous Improvement in all fields

4. Increase in Sales by Better Quality and thereby profit margins

5. Increase in Productivity

6. Better Rejection Control

7. Reduction in Cost

8. Minimum Development Time

9. Optimum Use of Facilities & Resources

10. Better House Keeping

11. Employee development

12. Vendor development

13. Reduction in waste & variation

1.8. Company Philosophy

1.8.1. Managerial Ethics

C.M. Smith and Sons Ltd. business ethics are based on Integrity and Commitment towards

achieving organizational goals. Company code of Ethics is enshrined in the values of good

Humanity and Governance.

1.8.2. Leadership

In C.M. Smith and Sons Ltd. Leadership will encourage & foster Leadership with a Vision to

focus on leveraging opportunities and meeting Challenges.

5

1.8.3. Customer Satisfaction

C.M. Smith and Sons ltd. are committed to their customers our success with their Customer

satisfaction by attaining, delivering and maintaining the highest standards of Quality & Cost

effective Services and Products.

1.8.4. Employee Engagement

1. C.M. Smith and Sons ltd. ensuring fair Recruitment, enhanced Performance,

Promotions, and improved Quality of Life for employees and their family members.

2. C.M. Smith and Sons ltd. ensuring Care for each other, Transparency & Trust with

focus on institutionalizing the collective Initiatives of all.

3. C.M. Smith and Sons ltd. ensuring Job Rotation, Job Enrichment, Training and Re-

training, Career & succession planning, across the hierarchy.

4. C.M. Smith and Sons ltd. enabling each employee to develop to his or her full potential

with a shared sense of direction with a well-defined accountability and responsibility.

5. C.M. Smith and Sons ltd. enabling each employee to evolve into self starter Team

Leader and meet the fast changing business environment and maintain a competitive

edge.

1.8.5. Communication

C.M. Smith and Sons ltd. focus is to facilitate free flow of communication with trust on People

and Policy and evolve a participative work environment.

1.8.6. Concern for Environment

C.M. Smith and Sons ltd. are committed to preserve & protect their ecological environment and

their heritage. Company will do this by adopting an environment friendly attitude and promoting

practices that enhance their esteem.

1.8.7. Entrepreneurship

C.M. Smith and Sons ltd. are committed to develop an Entrepreneurial work culture by

fostering an in-depth knowledge of their core businesses and then attendant opportunities so

that all their employees can be trustees of their Stakeholders.

Chapter 2

Production Department

6

2.1. Introduction

Production is the functional area responsible for turning inputs into finished outputs through a

series of production process. For any Manufacturing Company production department is like

heart for their organization. In any Company Production department is deal with their

Production and Planning, Inventory purchase, Inventory storing, Product design, Production

technical support and also with product quality aspects.

C.M. Smith and Sons Ltd. is one of the leading foundries in country which have well

established portion house. In C.M. Smith and Sons /Ltd. Nadiad Plant Company production

house is mainly using divide in to two processes Foundry and Machining. In foundry using

casting Company make product structure but not precise dimension. After casting using

machining Company achieve superior product quality in dimension. Company Machining

Division have complete final finishing on fully computerized VMC / HMC / VTL / Turning

Centers of Worlds best branded equipments, but this whole research is based on Foundry so

mainly focus on Foundry Division means not consider machining here.

2.2. Company Products

C.M. Smith and Sons Ltd. have wide variety of products which used in automobiles particularly

light and heavy transportation vehicle. These products are as shown below which Company

able to manufacture with best use of technology.

1. Brake Disc

2. Brake Drum

3. Hubs

4. Cylinder Block

5. Clutch Housing

6. Diff Carrier Housing

7. Diff Case

8. Bell Housing

9. Flywheel Housing

10. Flywheel with Ring Gear Fitted

11. Timing Gear Case

12. Gear Box Housings

13. Electric Motor Body

14. Intermediate Housings

15. Flanges

16. Brake Shore Housing

17. Hanger Shackle

18. Hanger Pad

2.3. Foundry Division Strength

C.M. Smith and Sons Ltd. Foundry Division have following Strength, not just required to

maintain it and utilize it properly until new strength developed by Company to achieve its plan

for production.

7

1. Black Sand plant (Refer Section 4.8) is asset for Foundry Division, which increase

speed and automatically work so reduce man powers.

2. Railway track which increase mould box transmission speed and reduce risk which

create if it handle by crane.

3. All machines which in Foundry Division like Alpha 450, Alpha 900, Compacor, Sort

Blasting Machine, etc are provide this division rigid solidity in terms of technology

advantage and quickest output.

4. Pattern and dies which available in lots of variety, that’s pattern designing and making

time is save and workers are aware about pattern so output rate increase.

2.4. Raw Inventory

C.M. Smith and Sons Ltd. Foundry Division used various raw materials for its production as

shown below list of Inventories. Company has separate purchase and store department to

control its raw Inventories. One cans Refer Chapter 12 to get perfect idea of Company

Foundry Division Inventories and its Management.

1. Wash Sand

2. Moulding Sand

3. Coal Dust

4. Bentonite Powder

5. Pig Iron

6. MS Scrap

7. Company Inside and Outside Rejection

8. Hardener

9. Raisin

10. Min and CO2 Gases

11. Collide Paste and Thinner

12. Sildrone Acid

13. Mould Filter

14. Carbon

15. Fe-Silicon

16. Fe- Mn

17. Iron Sulphur

18. Slag fix Powder

19. Ferro Inoculants Powder

8

2.5. Plant Layout

C.M. Smith and Sons Ltd. Foundry Division Plant layout is as shown in Fig. 2.1 and Company

have sufficient plant with every required facility which one foundry required.

In this Layout following indicates,

C0 : Induction Furnace Controller

C : Furnace Movement Controller

A and B : Induction Furnace

Ch : Chill Making

R : Reactor

Com : Compressor

D : Disk Break Core Maker

TG : Timing Gear Core Maker

CT : Collide paste and Thinner Mixer

CTS : Collide Paste and Thinner mixer temporary Store

S : Sort Storing

P : Packaging Material Store

9

Fig 2.1 Plant Layout

10

2.6. Production Process

C.M. Smith and Sons Ltd. Foundry Division Production are finish using various steps and

Production process flow chart is as shown in Fig 2.2

11

Company Production process have 4 different separate start in which Wash Sand Core

making process, Mould Sand Core making process, Moulding Black Sand Process and melting

process which combine afterward and production run on single line (Refer Fig 2.2).

In Wash Sand Core Making process, for 200 Kg Wash Sand mixing purpose 50 Liter each

Hardener and Raisin are mixed with Wash Sand and during Core making in Compacor

Machine add Min Gas at high pressure and at 70 °C temperature for 2 second adding per Kg

bases. In Compacor machine Core die are ready so using high pressure and temperature

Core are prepared. This Wash Sand Core Making process is half way automated means man

and machine both required, while Mould Sand Core Making process is fully manually. For

Mould Sand Core Making process, Mould Sand and Sildrone Acid mixer is prepared where for

2000 Kg Mould Sand 4 Liter Sildrone Acid are used, during manually Core making process

using die for increase Hardness CO2 gas are used. This Moulding process is half way

automated means man and machine both required

In Black Sand Preparing Process Company used automatic Black Sand transportation /

recycling system, which collect Black Sand from various process like Wash and Mould Sand

Core rejection, from Moulding process, Decoreing Process and Sort Blasting process (Refer

Fig 4.2) and using Belt Conveyor and Bucket Elevator transfer this to Black Sand Mixer. In

Black Sand Mixer 26 Liter water, 15 Kg combine Coal dust and Bentonite Powder are mixed

with 650 Kg Black Sand to make it Suitable for Green Sand Foundry and after using conveyor

it transfer to Moulding Machine Alpha 450 and 900. In Moulding process mainly black Sand

used with Wash Sand Core and CO2 Core. For this process Company have two machine

Alpha 450 and Alpha 900 with different Capacity where Mould Filter used in every mould.

Melting process is carried out to melt material and using that material for further Pouring

process. Company has 2500 Liter capacity two furnaces but at one time only use one furnace.

Melting process one cycle take around 1 hour where at 1480 °C temperature material are melt

and in one cycle 500 Kg each Pig iron and MS Scrap, 1500 Kg Rejection Return, 23 Kg

Carbon, 8 Kg Fe-Silicon, 2 Kg Fe-Mn and 1 Kg Iron Sulfur used. After melting using Ladle take

this melt material and Poring process is carried out where metal are poured in moulds.

After pouring metal in mould, Solidification process start where metal are settle down in mould

means simple cooling process but inside mould on railway track during mould transformation

only this process is carry out. Knock out process where settle mould are break using Knock

12

out machine so Company get final Cast output for further use. This Knock out Cast is at higher

temperature so cooled it before further process.

After cooling of cast, Decoreing process are carried out where Runner and Riser are

separated from the mould which is guiding path for metal in to mould but not required in Cast.

This process is fully manually carried out. After that Sort Blasting process is done because on

cast sand particles are available which not required and if these transfers to machining division

machine are damage due to sand. So to clean cast from sand Sort Blasting process carried

out, where Sort are through against cast at 360°. And because of this sand particle which on

cast surface remove which collect in Dust Collector to supply back in Black Sand. After this

using Chipping process remove sharp edge or extra material cubic points or something which

on cast and after Inspection which done manually accepted cast are Dispatch further for

machining.

2.7. Material Handling Equipment

In C.M. Smith and Sons Ltd. Foundry Division various materials handling equipment is used to

carry material. All equipments or ways that used are as follows –

2.7.1. Air Pressure

In Wash Sand Core making process, to transfer Wash Sand after cleaning to Wash Sand

mixer which at height air pressure are used, so Wash Sand which are light in weight easily

transfer to Wash Sand Mixer at height.

2.7.2. Bucket Elevator

In Black Sand plant Bucket Elevator are used to transfer Black Sand at height. Sand and Black

Sand after used in various processes are required to carry at height for further process like

cleaning, Mixing and supply to Moulding process, that’s why to transfer Black Sand vertically at

height Bucket Elevator are used (Refer Fig 2.3).

2.7.3. Belt Conveyor

In Black Sand plant to transfer Black Sand horizontally and on incline Belt Conveyor are used.

Black Sand after used in various processes using hopper come on Belt Conveyor which supply

it to Bucket Elevator and also at height various transmissions Belt conveyor used like for mixer

to moulding machine (Refer Fig 2.3).

13

2.7.4. Crane and lifter

Crain and lifter are used in every process after Sand preparation mostly like Moulding, Melting,

and Knock out, etc. Company have general crane but have machine separate crane with lifter

for easy work purpose.

2.7.5. Railway Track and guide ways

To supply heavy mould box to different process mostly all other Company use Crane, but C.M.

Smith and Sons Ltd. have 10 railway track for mould box supplement purpose which increase

work speed. Using Railway Track and supportive guide ways mould box supply between

process like Moulding, Pouring, Solidification (On track itself) and Knock Out.

2.7.6. Four clip truck

Four Clip Truck is used to supply material from in or out in plant Foundry Division means

transfer raw material in side Foundry and for Dispatch finish goods Four Clip Truck are used.

2.8. Foundry store and Purchase

C.M Smith and Sons ltd have separate purchase and store for production, but based on

requirement means production plan not purchase material and not store also which create lots

of problems in achieving plan (Refer Chapter 7). Actually according to this purchase and store

Company financial condition is responsible for it means not able to invest more in materials

and this create problems (Refer Chapter 7).

Company Store and Purchase have yard and storing area also and they make record based

on shift. Records are maintaining in two ways manually and computerized. To maintain

records used MS Office Excel sheet only. If Company make this system fully computerized

and if make particular software then able to make it more effective.

2.9. Black Sand Plant Process

Company have black sand automatic plant which process is as shown in Fig. 2.3 which work

on continuous bases automatically to supply Black Sand for moulding.

14

Fig 4.3 Black Sand Plant Process

Black Sand from Alpha 450, Alpha 900 and knock out

Belt Conveyor 14

Belt Conveyor 6

Bucket Elevator 7

P.C.

Hopper

Belt Conveyor 11

Hopper

Belt Conveyor 13

Belt Elevator 14

Belt Conveyor 15

Bucket Elevator 19

Belt Conveyor 20

Belt Conveyor 31

Alpha 900

Belt Coveyor 32

Alpha 450

15

2.10. Foundry Division Quality Assurance Measures

Quality is more important aspect in term of satisfying Clients /Customer requirements. C.M.

Smith and Sons Ltd. Foundry Division have following facility to measure Quality of product

which makes this division more effective, however mostly prefer visual Inspection only.

1. Spectrometer

2. Simulation Software

3. Image Analyzer

4. Tensile, Elongation, Transverse bending

5. BHN

6. Online Sand Test

7. Moisture control in cooler

8. Magnetic Crack Detector

9. X - Ray test on request

10. Complete sand test equipments

11. Complete Cold Box / Shell Core parameters test equipments

12. Casting Layout

13. Casting Cross Section Cutting

Chapter 3

Literature Review

16

1. Saputra Y A and Ladamay O S A (2011) studied Project Reliability: Probability of a

Project meets its Quality-Cost-Time target under uncertainty.

The researchers find out that when project under uncertainty situation at that time

comprehensive evaluation on the Iron Triangle (Quality-Cost-Duration) is very

important.

2. Eveleens C (2010) studied a literature review of Innovation Process models and their

Implications.

The researcher concluded that the literature search for relevant models of innovation

processes has been extensive, but not very structured. With a high probability, it can be

said that most relevant literature was reviewed, but a second search or expert panel

need to confirm that.

3. Li L, Sourirajan K and Katircioglu K (2010) studied Empirical Methods for two-echelon

Inventory Management with service level constraints based on Simulation-Regression.

The researchers find out that the heuristic method give CDC service levels that provide

excellent cost performance compared to simulation-based optimization method.

4. Adeyemi S L and Salami A O (2010) studied Inventory Management: A tool of

Optimizing Resources in a Manufacturing Industry A Case Study of Coca-Cola Bottling

Company, Ilorin Plant.

The researchers concluded that the inventory management situation of the Nigeria

Bottling Company, Ilorin Plant has been revealed using the EOQ model and Company

well-built policy is able to handle its idle stock without incurring unnecessary costs.

5. Kloppenborg T J and Lavigne L K (2008) studied Project Scheduling Constraints – Best

methods and practices.

The researchers find out that in dealing with project scheduling constraints, best

practices, regardless of what methodology a solution is associated with, dominates.

6. Littlefield M and Shah M (2008) studied Manufacturing Operation Management.

The researchers find out that Appoint executive steering committee to define

manufacturing solution investment strategy and Adopt technology to automate quality,

execution, planning and scheduling, visibility and maintenance aspect of manufacturing

operation.

17

7. Kidonge K K (2006) studied the Automation of Inventory Management Process.

The researcher concluded that the database will enable the update, retrieval, deletion

and generation of Inventory report accordingly. The complete implementation of

Inventory management system on stock items will yield significant advantages to the

organization.

8. Bakri A, Zin R M, Misnan M S and Mohammed A H (2006) studied Occupational Safety

and Health (OSH) Management Systems: Towards Development of Safety and Health

Culture.

The researchers find out that the company implemented OSH management system

have reported benefited from increased operational efficiencies, reduction in lost

workdays, fewer accidents and medical claims, recognition by insurers and regulators

and improved worker’s retention and satisfaction.

9. Chande A, Dhekane S, Hemachandra N and Rangaraj N (2005) studied the Perishable

Inventory Management and Dynamic Pricing using RFID Technology.

The researchers conclude that the proposed model for inventory control of perishable

products makes it possible to determine optimal timing for discount offer and also

optimal order quantity by using RFID technology.

10. Phimister J R, Oktem U, Kleindorfer P R and Kunreuther H (2003) studied Near-Miss

Incident Management in the Chemical Process Industry.

The researchers find out that a near-miss management framework that adds

operational and strategic value to corporate environmental, health and safety practice

so must focus on the details of the process.

11. Yusuf A M (2003) studied Inventory Control and EOQ in National Electric Power

Authority.

The researcher concluded that the primary objective of stores function is to provide a

service to the operating function and store cannot be run in isolation as most of items

kept in it represent capital which can strangulate an organization.

12. Wood D A (2002) studied Risk Simulation Techniques to aid Project Cost and Time

Planning and Management.

The researcher find out that Risk simulation techniques complement the deterministic

techniques of network and critical path analysis enabling rigorous models of project

18

plans to be constructed, risk quantified and targets tested with sensitivities prior to the

plan being rolled out.

13. Kokoskie G (2001) studied A Comparison of Critical Chain Project Management

(CCPM) Buffer Sizing Techniques.

The researcher concluded that it is possible that some of the result can be attributed to

potential masking of project buffer consumption due to forced placement of feeding

buffers on the critical chain, it is unlikely because only a few of the networks had critical

chain plans with such a structure.

14. Fantozzi E (1996) studied A Strategic Approach to Supply Chain Event Management.

The researcher find out that PERT based network technique effectively used in supply

chain event management & all activities are not treating equal.

15. Villacourt M (1992) studied FMEA: A Guide for Continuous Improvement for the

Semiconductor Equipment Industry.

The researcher concluded that the failure modes included in the FMEA are the failures

anticipated at the design stage. As such, they could be compared with Failure

Reporting, Analysis and Corrective Action System (FRACAS) results once actual failure

are observed during test, production and operation.

Chapter 4

Signification of Study

19

By doing this project work one can understand various aspect of Production Management, but

at same time this project help Company C.M. Smith and Sons Ltd. in following manner-

1. This project helps Company to analyze its foundry production as per shift and area of

problem which affect it.

2. This project help Company to find which foundry process time very most so its effect

overall production rate.

3. This project provide information to Company regarding foundry process failure which

most effect its production, so by reducing that failure Company can improve its

effectiveness.

4. This project help Company to identify its foundry Inventory safety stock and economic

order quantity for order based on it plan.

5. This project inform Company regarding its safety measures are as per industrial safety

act or not and which type of correction required to achieve all standard.

Chapter 5

Research Hypothesis

20

1 Null Hypothesis: There is no difference in production plan and actual production in

Company.

Alternative Hypothesis: There is difference in production plan and actual production in

Company.

2 Null Hypothesis: There is no change in each process time whenever it perform

Alternative Hypothesis: There is change in each process time whenever it perform

3 Null Hypothesis: There is no difference in economy order quantity between actual

production and plan production.

Alternative Hypothesis: There is difference in economy order quantity between actual


Chapter 6

Research Methodology

21

6.1. Problem Statement

Operation, Failure and Safety Analysis along with Inventory Management in C. M. Smith and

Sons ltd., Nadiad Plant - Foundry Division.

6.2. Objectives of the Study

This research project is done to fulfill following objectives.

1. To analyze company production solidity to achieve its plan in foundry.

2. To analyze foundry process timing using networking technique to make it more solid in

achieving plan.

3. To analyze foundry process failure mode and its relevant effects on production.

4. To find safety stock, ordering cost, carrying cost and economic order quantity for Inventory

used in foundry division.

5. To analyze company safety standard in comparison of industrial safety act.

6.3. Research Design

In this research project based on different work used different research design. In Chapter 10

which helps to explore problems used Exploratory Research. In Chapters 11, 13 and 14 where

explore problem solution and safety aspect cover, And in Chapter 12 where one can find

failure effect with suitable solution used Descriptive Research.

6.4. Data collection Method

To collect data take help of observation, particularly participative observation. Observation is

Personal in nature and to analyze production solidity audit secondary past record data related

to production.

6.5. Sampling Method

In collection of data used convenience sampling method in selection of secondary past record

data. In observed process timing also used convenience sampling method and observed

process timing based on convenience.

22

6.6. Sampling Unit

C.M. Smith and Sons Ltd. Foundry Division 12 month production record is sampling unit for

selection of secondary past record data and at same time every time process perform is also

sampling unit for observed record process timing data.

6.7. Sample Size

C.M. Smith and Sons Ltd. Foundry Division 3 month production record (10 March, 2013 to 11

June, 2013) is sample for secondary past record data and 10 times of each process out of

numbers of time each process done is sample for observed record process timing data.

Chapter 7

Production plan and Problems

23

7.1. Introduction

Planning may be defined as deciding in advance what is to be done in future. While production

planning entails the acquisition and allocation of limited resources to production activities so as

to satisfy customer demand over a specific time horizon. Production plan are made by

considering work force level, future order delivery date, inventory level and machine or plant

condition, etc.

C.M. Smith and Sons Ltd. Foundry division done production planning on daily bases means

considering today’s condition tomorrow plan prepared. Company prefers SAP software for

production planning. This plan is made by considering work force level and future order mainly.

Inventory level and machine or plant condition is important factor but it considers as separate

factors which effect production plan. Production plan is different for all three shifts and

production plan made for shift work not for day work bases. Foundry division production

capacity is 420 units per shift so production plan is not above this limit. Production plan are

given to supervisor at starting of shift and at end of that shift supervisor report about actual

result of that plan with reason because of which he cannot achieve plan if that happen. In this

chapter production plan and its effected factors are analyze.

7.2. Production Plan Analyses

Note: This section is based on 10 March, 2013 to 11 June, 2013 production data.

7.2.1. Shift wise Production Plan Analyses

In C.M. Smith and Sons Ltd. Production plan are made shift wise to achieve whole day

production rate. But by analyze production data one can understand Company not able to

achieve it production plan (Refer Table 7.1 and Fig. 7.1). Company can’t able to achieve

production plan due to various reasons which discussed in this chapter in section 7.3.

Based on this data one can say that Company efficiency of fulfillment its plan is decreased per

shift means in shift 1 probability of plan fulfillment is 82.57 % that decrease in shift 3 and

become 60.68 %. This difference is 21.89 % which become bigger if one can see it on daily

bases. Company don’t used it full capacity while input for full capacity, this is one type of loss

incurred in company. Company have ability to make 420 units per shift but Company used only

its 51.62 % capacity in actual in shift 1 which reduced up to 26.64 % and become 24.98 % in

shift 3.

24

Table 7.1 Shift wise Production Plan Analyses

Plant Capacity 420 units per shift

Shift 1 Shift 2 Shift 3

Plan 262 225 172

Actual Production 216 164 104

Probability of utilization of Capacity in Plan (%) 62.51 53.74 41.17

Probability of utilization of Capacity in Actual (%) 51.62 39.09 24.98

Probability of plan Fulfillment in actual (%) 82.57 72.73 60.68

Fig. 7.1 Shift wise Production Plan vs. Actual Graph

7.2.2. Overall Production Plan Analyses

Overall means per day average production plan reflects combination of shift wise production

plan. Same way overall also Company can’t able to achieve its production plan (Refer Table

7.2 and Fig 7.2). Company have ability to make 1260 units per day but Company plant to used

52.47 % of utilize its capacity (means 661 units) and actually utilize only 38.56 % of its

capacity (means 485 units). Company overall efficiency of fulfillment its plan in actual is 73.49

%.

Table 7.2 Overall Production Plan Analyses

Plant Capacity 1260 units per day

Plan 661

Actual Production 485

Probability of utilization of Capacity in Plan (%) 52.47

Probability of utilization of Capacity in Actual (%) 38.56

Probability of plan Fulfillment in actual (%) 73.49

262

225

172

216

164

104

0

50

100

150

200

250

300


Plan Actual

25

Fig. 7.2 Overall per day Production Plan vs. Actual Graph

7.3. Problems in achieving Production Plan

Note: This section is based on 10 March, 2013 to 11 June, 2013 production data and problem

occurrence.

C.M. Smith and Son Ltd. Don’t able to achieve its production plan that means something not

going as per plan or problem in plan itself. Company make day to day plan by considering all

factor which affecting next day production but after all this also problem creates which affect

production and actual production rate is less than plan production rate. Here one tries to

analyze area of problem so one can focus on that problem area which effect more to

production rate. To do this analyses all problems related to any type of raw materials like

metal, wash sand, mould sand, work in progress inventory problem etc. are consider as

Inventory Problems, all problems related to machines or equipments like crane, alpha 450,

hopper, etc are consider as Maintenance problem and all problems related to work force

means less workers are consider as Man Power Problems. Inventory, Maintenance, Man

power and GEB Electricity Problems occurrences is as shown in Table 7.3, Fig. 7.3 and Fig.

7.4.

Table 7.3 Problem in achieving Production Plan

Shift 1 Shift 2 Shift 3 Overall

Inventory Problems 33 35.48% 29 30.53% 23 22.12% 85 29.11%

Maintenance Problems 44 47.31% 48 50.53% 38 36.54% 130 44.52%

Man Power Problems 13 13.98% 15 15.78% 39 37.5% 67 22.94%

GEB Electricity Problem 3 3.23% 3 3.16% 4 3.84% 10 3.43%

Total 93 95 104 292

661

485

0

100

200

300

400

500

600

700

Overall

Plan Actual

26

Fig. 7.3 Shift wise Production Problem Occurrence Graph

7.3.1. Inventory Problems

Inventory Problems are problems related to raw materials like metal, wash sand, mould sand,

etc. or work in inventory problems. Inventory Problems majorly occurred 35.48 % in shift 1 and

reduced up to 13.36 % and become 22.12 % in shift 3 on papers but actually this problem

occurred at same rate in shift 3 also but due to other problem like Man Power increased

impact of this Inventory problem reduce so not mention. Overall 29.11 % problems out of total

problems are Inventory based problems. These problems occurred because company not

carries safety stock; actually not know all inventories safety stock level. This problems one

reason is Company financial condition also. Safety stock and Economic order quantity for all

major inventories used in foundry are discussed in detail in Chapter 10.

Fig. 7.4 Overall per day Production Problem Occurrence Graph

3329

23

4448

38

13 15

39

3 3 4

0

10

20

30

40

50

60


Inventory Problems Maintenance Problems

Man Power Problems GEB Electricity Problem

85

130

67

10

0

20

40

60

80

100

120

140

Overall

Inventory Problems Maintenance Problems

Man Power Problems GEB Electricity Problem

27

7.3.2. Maintenance Problems

Maintenance Problems are problems related to machines or equipments like crane, alpha 450,

hopper, etc. Maintenance Problems occurrences chances are more than any other problem

occurrences chances. Overall 44.52 % problems out of total problems are Maintenance

problems. Actually C.M. Smith and Sons ltd. prefer Breakdown Maintenance concept (oldest

concept for maintenance). Company believes if machines or equipments are in running

condition everything all right but because of this same type of maintenance problem occurred

again and again. This problems one reason is Company maintenance department budget

also. Maintenance problems have one solution that company follow Preventive maintenance

concept so machines or equipments failure rate decreased.

7.3.3. Man Power Problems

Man Power problems are problems related to work force means less worker or no worker.

Without work force plant can’t run that means work force is most important factor which effect

production. Man Power Problems occurred 13.98 % in shift 1 and increased up to 23.52 % and

become 37.5 % in shift 3. In shift 3 major problems is work force. Overall 22.94 % problems

out of total problems are Man Power problems. After considering future leave Company make

plan for future but after that also Man Power Problem occurred. To solve this Problems

Company go for option of contract worker where salary based on fulfillment of work not based

on day of working.

7.3.4. GEB Electricity Problem

GEB Electricity Power cut Problem is not in Company hand. Overall 3.43 % problems out of

total problems are GEB Electricity problem. This problem is occurred quite low compare to

other problems so if company not find any solution for this like generator then also its not affect

like other problems.

7.4. Hypothesis Testing

Null Hypothesis: There is no difference in production plan and actual production in

Company.

Alternative Hypothesis: There is difference in production plan and actual production in

Company.

28

Table 7.4 Hypothesis Testing 1

Days Plan Output Actual Output % Change Result H0,

Accept if % Change < 5 %

Reject if % Change > 5 %

81 53558 39361 26.51 Reject

Here assume more than 5 % change in Plan output and Actual output is not tolerated, means if

% Change is less than 5 % not reject Null Hypothesis other than this % Change is greater than

5 % reject Null Hypothesis.

For this Hypothesis testing take 81 days production Plan output and Actual output as data.

And In compare of Plan output find out % Change in Actual output as shown in Table 7.4

which find out using equation –

% Change = Plant Output − Actual Output

Plan Output ∗ 100

= 53558 − 39361

53558 ∗ 100

= 26.51 % > 5 % So Reject Null Hypothesis

Fig 7.5 Plan vs. Actual Output Comparison Graph

0

200

400

600

800

1000

1200

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79

Plan

Actual

29

7.4.1. Interpretation

By referring % Change (Refer Table 7.4), one can know In compare with Plan output %

change in Actual output is greater than 5 % and using Fig. 7.5 Plan vs. Actual Comparison

Graph also clear that In C.M. Smith and Sons Ltd. Foundry Division lots of variation in plan

output every day and in compare with it lots of variation in Actual output also. Thus, Null

Hypothesis is rejected and it is concluded that there is difference in production plan and actual

production in Company.

7.5. Chapter Summery

In this Chapter analyze C.M. Smith and Sons Ltd. Foundry Division production data and find

out that Company is able to achieve only 73.49 % Production Plan due to various reason such

as Maintenance, Inventory, Man Power and Electricity Problems; And Company not run at full

Capacity, only 38.56 % utilize Actually.

Chapter 8

Operation Analysis using Networking Techniques

30

8.1. Introduction

Operations Management is an area of management concerned with overseeing, designing and

controlling the process of production and redesigning business operation in the production of

goods or services. It involves the responsibility of ensuring that business operations are

efficient in terms of using as few resources as needed and effective in terms of meeting

customer requirements. An operation analysis is a procedure used to determine the efficiency

of various aspects of determines the efficiency of various aspects of a business operation and

this is an approach that helps managers improves the performance of their business activities.

C.M. Smith and Sons Ltd. Foundry Division able to achieve 73.49 % (Refer Chapter 7) of its

production plan in actual that mean something are going wrong in its Foundry Division

production process, which one can know using production process operation analysis. In this

Chapter timing is noted out for all operation used in production and based on that using

CPM/PERT project management networking techniques try to analyze whole production

process using networking diagram.

Note: In this chapter used process timing is noted by researcher in actual condition using stop

watch and as per convenience and all time observed and noted when product TCL on Alpha

900 machine and Marine on Alpha 450 machine are manufactured.

8.2. Production Operations/Activities

In C.M. Smith and Sons Ltd. Foundry Division total 21 processes carried out for production of

one Cast. Each process name is noted down as activities A to U as shown in Table 8.1. In this

preceding activity for each activity is noted out, activity not started before finishing of its

preceding activity.

Note: In this section consider important process only means if two processes run on parallel

bases consider maximum time process related to whole process.

Table 8.1 Production Activities

Activity Process Name/Description Preceding Activity

A Wash Sand Cleaning -

B Wash Sand Mixing A

C Core Making B

D Core Dressing and Inspection C

31

E Core Deeping and Inspection D

F Mould Sand Mixing -

G CO2 Core Making F

H CO2 Core Deeping and Inspection G

I Alpha 450 Moulding Process E, H

J Alpha 900 Moulding Process E, H

K Melting Process -

L Ladle Filling K

M Pouring Process I. J, L

N Solidification M

O Mould Knock Out N

P Air Cooling O

Q Decoreing Cast P

R Sort Blasting Q

S Chipping R

T Inspection S

U Dispatching T

8.3. Observed Activity Time

For each activity perform in C.M. Smith and Sons Ltd. Foundry Division their time duration is

observed and noted out as shown in Table 8.2 for particular units as mention. All time are

noted using stop watch and converted them in to minute. As shown in Table 8.2 for each

activity time range is find out which help to know why Company not achieve its production plan

(Refer Chapter 7). If time range is more for activity then maximum chances plan become false for that

activity and plan not achieved. So Company should focus more to minimize time range for those activity

as early as possible using effective planning which required mainly for activities P, N and Q because

time range (in Min.) is 89.67, 34.99 and 17.18 respectively (Refer Table 8.2).

32

Tim

e R

an

ge

(Min

.) 0

.6

0.9

5

0.5

7

0.5

5

0.3

3

3.3

9

1.0

2

0.3

7

0.5

0.9

1

1.0

5

1.0

4

2.7

9

34

.99

0.2

89

.67

17

.18

2.5

2

0.5

3

0.8

1

1.2

6

Ta

ble

8.2

Ob

se

rved

Du

ration

Ob

se

rve

d D

ura

tio

n (

Min

.)

10

th

0.6

5

3.3

1.5

1

0.4

3

0.9

7.4

1

1.9

7

0.7

1

2.6

4

4.4

6

60

.29

0.8

4

19

.62

19

.76

1.0

1

97

.32

30

.41

9.9

8

1.1

9

0.2

1

5.6

2

9th

0.0

78

3.4

5

1.7

3

0.5

5

0.8

8

6.8

7

2.4

7

0.8

9

3.0

2

4.9

3

60

.24

1.2

9

18

.35

42

.67

1.0

8

55

.76

32

.23

10

.34

1.2

4

0.1

7

5.1

8th

0.1

3.2

1.6

2

0.7

0.8

5

7.3

4

2.0

3

0.8

1

2.9

5

4.0

2

59

.25

0.9

8

19

.01

20

.67

1.0

4

89

.46

41

.03

8.6

8

1.5

7

0.8

9

4.9

7

7th

0.0

83

3.1

5

1.5

5

0.3

5

0.9

4.2

1

1.8

7

0.5

7

2.8

9

4.8

9

60

.13

1.4

7

20

.02

7.6

8

1.0

3

75

.53

36

.75

11

.2

1.4

6

0.1

9

4.7

8

6th

0.0

77

3.8

1.2

5

0.5

1

0.9

8

4.6

2

2.1

3

0.7

9

3.0

1

4.3

1

60

.02

1.8

2

19

.34

12

.34

1.0

1

47

.86

33

.33

9.9

7

1.3

3

0.4

5.9

2

5th

0.0

57

3.5

1.8

2

0.4

5

0.8

1

6.9

2

1.9

3

0.5

3

2.5

3

4.5

3

59

.98

1.3

5

18

.98

8.5

6

1.1

2

30

.89

28

.45

10

.11

1.7

2

0.2

5

5.6

9

4th

0.0

67

4.1

1.5

3

0.8

8

0.7

7.6

1.4

5

0.8

6

2.9

8

4.4

2

60

.3

0.7

8

17

.26

38

.23

0.9

8

60

.76

43

.02

10

.02

1.2

9

0.0

8

6.0

4

3rd

0.0

82

3.9

1.6

0.5

3

1.0

3

5.7

1.9

3

0.7

5

2.9

3

4.6

8

59

.97

0.9

5

20

.05

14

.42

1.0

5

12

0.5

6

32

.89

10

.08

1.6

7

0.1

5.0

3

2n

d

0.0

83

3.4

1.5

0.3

3

0.9

3

6.3

4

2.1

0.8

4

2.5

2

4.4

2

59

.33

1.7

8

18

.65

10

.9

0.9

2

90

.6

45

.63

9.5

9

1.2

3

0.2

5

5.6

2

1st

0.0

5

3.1

6

1.7

0.4

0.8

8

7

2.0

6

0.9

2.6

4.5

8

60

.2

0.8

7

19

.45

34

.6

1.0

3

60

.23

30

.23

10

.03

1.3

8

0.1

7

5.4

3

Un

its

40

Kg

20

0 K

g

2 C

ore

2 C

ore

3 C

ore

20

0 K

g

4 C

ore

4 C

ore

1 M

ou

ld

1 M

ou

ld

25

00

Kg

12

50

Kg

45

Mo

uld

1 M

ou

ld

1 M

ou

ld

1 C

ycle

25

Cast

20

Ca

st

2 C

ast

1 C

ast

20

Ca

st

Acti

vit

y

A

B

C

D

E

F

G

H

I J

K

L

M

N

O

P

Q

R

S

T

U

33

8.4. Expected Time for Activities

By using Observed time for each activities (Refer Table 8.2) expected time is find out for units

as shown in table 8.3 using Optimistic Time, Most Likable Time and Pessimistic Time.

Optimistic Time is the minimum time in which that activity can completed means minimum time

out of observed time for each particular activity (Refer Table 8.2); Most likable Time for activity

is average time out of observed time for each particular activity (Refer Table 8.2) and

Pessimistic Time is the maximum time in which that activity can perform or completed means

maximum time out of observed time for each particular activity (Refer Table 8.2).

Table 8.3 Expected Time for Activities

Activity Units Optimistic

Time (Min.)

Most Likable

Time (Min.)

Pessimistic

Time (Min.)

Expected Time

(Min.)

A 40 Kg 0.05 0.1327 0.65 0.21

B 200 Kg 3.15 3.496 4.1 3.54

C 2 Core 1.25 1.581 1.82 1.57

D 2 Core 0.33 0.513 0.88 0.54

E 3 Core 0.7 0.886 1.03 0.88

F 200 Kg 4.21 6.401 7.6 6.24

G 4 Core 1.45 1.994 2.47 1.98

H 4 Core 0.53 0.765 0.9 0.75

I 1 Mould 2.52 2.807 3.02 2.79

J 1 Mould 4.02 4.524 4.93 4.51

K 2500 Kg 59.25 59.971 60.3 59.91

L 1250 Kg 0.78 1.213 1.82 1.24

M 45 Mould 17.26 19.073 20.05 18.93

N 1 Mould 7.68 20.983 42.67 22.38

O 1 Mould 0.92 1.027 1.12 1.025

P 1 Cycle 30.89 72.897 120.56 73.84

Q 25 Cast 28.45 35.397 45.63 35.94

R 20 Cast 8.68 10 11.2 9.98

S 2 Cast 1.19 1.408 1.72 1.42

T 1 Cast 0.08 0.271 0.89 0.342

U 20 Cast 4.78 5.42 6.04 5.42

34

Expected Time is time in which maximum possibility activity can completed and Expected

Time for any activity is find out using equation –

Expected Time =Optimistic Time + 4 ∗ Most Likable Time + Pessimistic Time

6

Example of Expected Time for Activity A –

Expected Time for Activity A =0.05 + 4 ∗ 0.1327e + 0.65

6

= 0.21 Min.

In this same way find for each activity using above equation.

8.5. Expected Time for Activities for Batch Production

In C.M. Smith and Sons Ltd. Foundry Division production are done is batch because in some

process like melting take same time if it run for particular batch or for single product, That’s

why Company produced in batch and batch on hourly bases which decided by ability to make

number of mould in one hour.

Company has two moulding machine particularly Alpha 450 means activity I and Alpha 900

means activity J. and based on time consumption for one mould (Refer Table 8.2), In one hour

around 35 mould manufactured means 22 mould of Marine on Alpha 450 machine and 13

mould of TCL on Alpha 900 machine; And for other starting process consider minimum unit

which required to start further process. For 35 units Batch Expected Time for all activity is as

shown in Table 8.4. For following activity for batch production changes happen in units or in

time.

In Activity A: To start further Activity B – Mixing of Wash Sand 200 Kg Sand required, So In

place of 40 Kg for 200 Kg time is used which is 1.05 Min.

In Activity E: To start further Activity I and J only 2 Core required and 2 Core manufactured at

same time, so in place of waiting for 3rd Core transfer 2 Core for further Activity I and J, which

take same time but need less two helpers.

35

Table 8.4 Expected Time for Activities for Batch Production

Activity Process Name/Description Preceding

Activity

Units Expected

Time (Min.)

A Wash Sand Cleaning - 200 Kg 1.05

B Wash Sand Mixing A 200 Kg 3.54

C Core Making B 2 Core 1.57

D Core Dressing and Inspection C 2 Core 0.54

E Core Deeping and Inspection D 2 Core 0.88

F Mould Sand Mixing - 200 Kg 6.24

G CO2 Core Making F 8 Core 3.96

H CO2 Core Deeping and Inspection G 8 Core 1.48

I Alpha 450 Moulding Process E, H 22 Mould 60.00

J Alpha 900 Moulding Process E, H 13 Mould 60.00

K Melting Process - 2500 Kg 59.91

L Ladle Filling K 1250 Kg 1.24

M Pouring Process I. J, L 35 Mould 14.72

N Solidification M 35 Mould 22.38

O Mould Knock Out N 35 Mould 22.55

P Air Cooling O 35 Mould 73.84

Q Decoreing Cast P 35 Cast 50.32

R Sort Blasting Q 35 Cast 17.47

S Chipping R 35 Cast 24.85

T Inspection S 35 Cast 11.97

U Dispatching T 35 Cast 9.49

In Activity G and H: To start further Activity I and J - 8 CO2 Core required, So in place of 4

CO2 Core manufacturing and Core Deeping consider time for 8 CO2 Core manufacturing and

Core Deeping, for this multiply original time with 2.

In Activity I and J: By using these activities capacity of batch size decided; because further

melting Process -Activity K need 60 Min. so it’s necessary these activities also run for 60 Min.

and try to make maximum mould in this time.

To Find number of mould in 60 Min. for Activity I means from Alpha 450 machine –

36

In 2.79 Min. Foundry Division can make 1 mould

So, In 60 Min Foundry Division can make ___ mould?

=60 ∗ 1

2.79

≈ 22 mould

To Find number of mould in 60 Min. for Activity J means from Alpha 900 machine –

In 4.51 Min. Foundry Division can make 1 mould

So, In 60 Min Foundry Division can make ___ mould?

=60 ∗ 1

4.51

≈ 13 mould

So total Company Foundry Division able to make 35 moulds batch in 60 Min.

In Activity M: This activity time is noted for 45 moulds pouring, but only 35 mould for poring

process. So to find pouring time for 35 moulds –

For 45 moulds pouring process required 18.93 Min.

So, For 35 moulds pouring process required ___ Min.?

=35 ∗ 18.93

45

= 14.72 Minutes

In Activity N: This solidification process is done for 1 mould or number of moulds required

same time, so this process is carried out for 35 moulds.

In Activity O: In this activity for knock out process observed time for 1 mould, but here

Company have two knock out machine which work for Alpha 450 and Alpha 900 machine; And

consider maximum number of mould 22 with Alpha 450 machine, so to find knock out time for

22 moulds –

For 1 moulds knock out process required 1.025 Min.

So, For 22 moulds knock out process required ___ Min.?

=22 ∗ 1.025

1

= 22.55 Minutes

37

In Activity P: This cooling process is done for 1 Cast or number of Cast required same time,

so this process is carried out for 35 Cast.

In Activity Q: This activity time is noted for 25 Cast Decoreing, but here 35 cast for Decoreing

process. So to find Decoreing time for 35 cast –

For 25 cast Decoreing process required 35.94 Min.

So, For 35 cast Decoreing process required ___ Min.?

=35 ∗ 35.94

25

= 50.32 Minutes

In Activity R: This activity time is noted for 20 Cast Sort blasting, but here 35 cast for Sort

blasting process. So to find Sort blasting time for 35 cast –

For 20 cast Decoreing process required 9.98 Min.

So, For 35 cast Decoreing process required ___ Min.?

=35 ∗ 9.98

20

= 17.47 Minutes

In Activity S: This activity time is noted for 2 Cast Chipping, but here 35 cast for chipping

process. So to find Chipping time for 35 cast –

For 2 cast chipping process required 1.42 Min.

So, For 35 cast chipping process required ___ Min.?

=35 ∗ 1.42

2

= 24.85 Minutes

In Activity T: This activity time is noted for 1 Cast Inspection, but here 35 cast for Inspection,

for this multiply original time with 35.

In Activity U: This activity time is noted for 20 Cast Dispatching, but here 35 cast for

dispatching, so to find Dispatching time for 35 cast –

38

For 20 cast for dispatching required 5.42 Min.

So, For 35 cast for dispatching required ___ Min.?

=35 ∗ 5.42

20

= 9.49 Minutes

Here In batch 35 units produced per hour means around 840 units Company able to

manufactured if all going well. So overall all operation speed is good such that if Company

want and everything all right Company can able to produce more than plan production 661

units (Refer Chapter 7).

8.6. Network diagram and Critical Path

Critical path is path with longest duration in completion of production process means maximum

time in which production process closed definitely or last due time for finish process, which find

out as shown in Table 8.5 and find out using Fig. 8.1.

40

Table 8.5 Critical Path Calculation

Path Activity Duration (Min.)

1-4-5-6-7-10-12-13-14-15-16-17-18-19-20-21-22 ABCDEIMNOPQRSTU 315.17

1-4-5-6-7-10-13-14-15-16-17-18-19-20-21-22 ABCDEJMNOPQRSTU 315.17

7-8-9-10-12-13-14-15-16-17-18-19-20-21-22 FGHIMNOPQRSTU 319.27

7-8-9-10-13-14-15-16-17-18-19-20-21-22 FGHJMNOPQRSTU 319.27

3-11-13-14-15-16-17-18-19-20-21-22 KLMNOPQRSTU 308.74

By using Table 8.5 one can know that maximum time duration for completion is 319.27

Minutes which on two path 7-8-9-10-12-13-14-15-16-17-18-19-20-21-22 (FGHIMNOPQRSTU)

and 7-8-9-10-13-14-15-16-17-18-19-20-21-22 (FGHJMNOPQRSTU). So here two critical path

and out of this two consider any one as critical path so consider 7-8-9-10-13-14-15-16-17-18-

19-20-21-22 (FGHJMNOPQRSTU) as critical path.

10.7. Calculation for total Float

The total float (TF) of an activity represents the amount of time by which it can be delayed

without delaying the completion time means it is the amount of free time associated with an

activity which can be used before, during and after the performance of that activity. As shown

in Table 8.6 it is find out using equation –

Total Float Time = Latest Start Time − Earliest Start Time

Example of Total Float Time for Activity A –

Total Float Time = 4.10 − 0

= 4.10 Minutes

Mostly Activity which on critical path have no total float, but activity like A has total float means

in this activity any problem occurrence for 4.10 Min. not effect completion time. In this same

way find Total Float for each activity using above equation and interpreted them.

41

Table 8.6 Total Float for all activities

All activities times are in Minutes

Activity Preceding

Activity

Expected

Time

Earliest

Start

Earliest

Finish

Latest

Start

Latest

Finish

Total

Float

A - 1.05 0 1.05 4.10 5.15 4.10

B A 3.54 1.05 4.59 5.15 8.69 4.10

C B 1.57 4.59 6.16 8.69 10.26 4.10

D C 0.54 6.16 6.70 10.26 10.80 4.10

E D 0.88 6.70 7.58 10.80 11.68 4.10

F - 6.24 0 6.24 0 6.24 0

G F 3.96 6.24 10.2 6.24 10.2 0

H G 1.48 10.2 11.68 10.2 11.68 0

I E, H 60.00 11.68 71.68 11.68 71.68 0

J E, H 60.00 11.68 71.68 11.68 71.68 0

K - 59.91 0 59.91 10.53 70.44 10.53

L K 1.24 59.91 61.15 70.44 71.68 10.53

M I. J, L 14.72 71.68 86.40 71.68 86.40 0

N M 22.38 86.40 108.78 86.40 108.78 0

O N 22.55 108.78 131.33 108.78 131.33 0

P O 73.84 131.33 205.17 131.33 205.17 0

Q P 50.32 205.17 255.49 205.17 255.49 0

R Q 17.47 255.49 272.96 255.49 272.96 0

S R 24.85 272.96 297.81 272.96 297.81 0

T S 11.97 297.81 309.78 297.81 309.78 0

U T 9.49 309.78 319.27 309.78 319.27 0

8.8. Gantt Chart

Gantt chart is used to provide an immediate comparison between schedule and reality. Its

represent process time data in good visual manner, Gantt chart is as shown in Fig. 8.2 which

prepared using Table 8.6. This Gantt chart represents relation between activity and their

process timing as shown in Fig 8.2.

43

8.9. Probability to complete less than Critical time

To complete all activity critical time required 319.27 Min.(Refer Table 8.5) but other path also

available which consume less time, so to find probability to complete operation using other

path in 315.17 Min. or in 308.74 Min. (Refer Table 8.5) in future need to find variance for all

critical activity as shown in Table 8.7 below. Variance for Critical Activity in Table 8.7 is find out

using following equation -

Variance = Pessimistic Time − Optimistic Time

6

2

Example of Variance for Critical Activity F –

Variance = 7.60 − 4.21

6

2

= 0.3192

In this same way find variance for each Critical Activity using above equation.

Table 8.7 Variance for Critical Activities

Activity Optimistic

Time (Min.)

Pessimistic

Time (Min.)

Variance

F 4.21 7.6 0.3192

G 1.45 2.47 0.0289

H 0.53 0.9 0.0038

J 52.26 64.09 3.8875

M 13.42 15.59 0.1308

N 7.68 42.67 34.0083

O 20.24 24.64 0.5378

P 30.89 120.56 223.3530

Q 39.83 63.88 16.0694

R 15.19 19.60 0.5402

S 20.83 30.10 2.3896

T 2.80 0.89 22.3256

U 8.37 10.57 0.1351

Total Variance 303.5941

44

Using Variance find out Standard Deviation for Critical Activity as follows using equation –

Standard Deviation = Total Variance2

= 303.59412

= 17.42

Now,

Probability to complate operation in 315.17 Min. =315.17 − 319.27

17.42

= 0.24 (Ignore negative Sign)

= 0.5948 (using Z Table)

So, there are 59.48 % chances or probability that operation is completed in 315.17 Min. for

same amount of output 35 units.

Now,

Probability to complate operation in 315.17 Min. =308.74 − 319.27

17.42

= 0.60 (Ignore negative Sign)

= 0.7257 (using Z Table)

So, there are 72.57 % chances or probability that operation is completed in 308.74 Min. for

same amount of output 35 units.


Null Hypothesis: There is no change in each process time whenever it perform

Alternative Hypothesis: There is change in each process time whenever it perform

For this Hypothesis testing is done t test on SPSS on Most Likable Time (Average Time) of

each Production process A to U (Refer Table 8.3) because want to find difference as shown in

Table 8.8 and using this SPSS find out tCalculated = 2.703.

But at same time for 20 degree of freedom, t value using t table at 0.05 α two tailed, tTable =

2.086

45

Table 8.8 Hypothesis Testing 2, One-Sample Test

Test Value = 0

t Df

Sig. (2-

tailed)

Mean

Difference

95% Confidence Interval

of the Difference

Lower Upper

Process Time 2.703 20 .014 11.94094 2.7257 21.1561


Here tCalculated > tTable, So Null Hypothesis is rejected and Thus, It is concluded that There is

change in each process time whenever it perform.


Using Chapter find out that in C.M. Smith and Sons Ltd. Foundry Division there is difference in

process time whenever it perform which effect overall production, and critical path for

production process FGHJMNOPQRSTU which covered mostly all activity so delay is not

possible in these activity aspect Wash Sand Core making and Melting Process.

But using this production process timing Company able to manufacture around 840 units which

more than production plan 661 units (Refer Chapter 7), So If Company work in this rate than

also they achieve their production plan but not able to achieve means other problem like

Inventory and Machine maintenance with Man power created break down of plant which affect

more to Production plan, But when ever Company production run its run at good adequate

speed.

Chapter 9

Process Failure Mode and Effect Analysis

46

9.1. Introduction

Failure Mode and Effect Analysis (FMEA) is a proactive, team based, and systematic

approach for identifying the ways a process or design can fail, why it might fail, and how it can

be made safer. Design Failure Mode and Effect Analysis analyze product design before

release to production, with a focus on product function and mainly aim for this is to ensure

product quality. Process Failure Mode and Effect Analysis are used to analyze manufacturing

and assembly processes after they are implemented. PFMEAs take a systems approach to

finding the weaknesses in the processes, assessing the effects these weaknesses have on the

system, and most importantly fixing the weaknesses before an event occurs. Putting fixes in

place that eliminate or reduce the risk of the failure modes will result in a safer and more

efficient system from which both the patients and the staff benefit.

C.M. Smith and Sons Ltd. Foundry Division able to achieve 73.49 % (Refer Chapter 7) of its

production plan in actual that mean something going wrong in its Foundry Division production

process. Production process failures occurred due to various reasons and to find which failure

out of all effect more to production rate Process Failure Mode and Effect Analysis required.

Note: This chapter is based on 10 March, 2013 to 11 June, 2013 production data and failure

occurrence. In this section Man Power Problem occurred 56 times & GEB Electricity Problem

occurred 9 times, But it not consider here because both are equally important & without them

plant can't run.

9.2. PFMEA Components

Fig. 9.1 PFMEA Components

9.2.1. Severity (S)

In PFMEA Severity shows important of that process failure and its effect on further process.

For PFMEA in Severity one should give score to process failure based on its important and

effect on further process. Here used rating scale 1 to 10 to give score and that meaning is

described in Table 9.1.

PFMEA Components

Severity Occurrence Detection

47

Table 9.1 Severity Rating Scale Description

Rating Description

1 Would not affect further process

2 Very Remote chances that it effect on further process

3 Remote chances that it effect on further process

4 Very Low chances that it effect on further process

5 Low effect on further process

6 Moderate effect on further process

7 Moderately High effect on further process

8 High chances that it effect on further process

9 Very High chances that it effect on further process

10 Complete failure of further process

9.2.2. Occurrence (O)

In PFMEA Occurrence shows frequency with which a given cause occurred and creates failure

modes. For PFMEA in Occurrence one should give score to it based on process failure

occurrence frequency (Probability). Here used rating scale 1 to 10 to give score and that

meaning is described in Table 9.2 and Frequency of process failure occurred (Number of

times) and its probability is as shown in Table 9.3, which used further in this Chapter in Section

9.3 in Table 9.5 to give Occurrence score.

Table 9.2 Occurrence Rating Scale Description

Rating Description

1 Occurrence probability range in between 0.00 to 0.10










48

Table 9.3 Probability of Failure occurred

Process Failure Cause Occurred Probability

Core Making No Wash Sand 4 0.014

CO2 Core

Making

No Mould Sand 3 0.012

No CO2 2 0.008

No Sildrone Acid 1 0.004

Moulding Alpha 450 M/c 18 0.067

Alpha 900 M/c 5 0.019

Alpha 450 M/c crane 8 0.029

Alpha 900 M/c crane 3 0.012

Pattern Problem 1 0.004

Dust Jamming 1 0.004

Hopper Problem 2 0.008

Black Sand Mixer Problem 14 0.052

Black Sand Problem 9 0.034

No CO2 Core 18 0.067

No Cold Box 7 0.026

No Chiplan 1 0.004

No Collide Paste & Thinner 1 0.004

Mould filter Problem 2 0.008

No. 7 BE Problem 14 0.052



No. 13 BC Problem 4 0.015



Air Problem 52 0.195

Melting Furnace 1 0.004

No Metal 30 0.112

No Carbon 1 0.004

Pouring Metal Delay 20 0.074

Solidification - 0 0

Knock Out Knockout M/c 3 0.012

Knockout crane 4 0.015

49

Decoreing - 0 0

Sort Blasting - 0 0

Chipping - 0 0

Dispatching - 0 0

Total 267 1

9.2.3. Detection (D)

In PFMEA Detection shows the ability of the current control system to detect or prevent a

given failure. For PFMEA in Detection one should give score to process failure based on ability

of its detection. Here used rating scale 1 to 10 to give score and that meaning is described in

Table 9.4.

Table 9.4 Detection Rating Scale Description

Rating Description

1 System will detect potential cause and subsequent failure mode

2 Very high chance the system will detect potential cause and subsequent failure mode

3 High chance the system will detect potential cause and subsequent failure mode

4 Moderately High the system will detect potential cause and subsequent failure mode

5 Moderate the system will detect potential cause and subsequent failure mode

6 Low the system will detect potential cause and subsequent failure mode

7 Very low the system will detect potential cause and subsequent failure mode

8 Remote the system will detect potential cause and subsequent failure mode

9 Very Remote the system will detect potential cause and subsequent failure mode

10 System can’t detect potential cause and subsequent failure mode

9.3. Risk Priority Number (RPN)

In PFMEA using Risk Priority Number one can know which failure out of all effect more to

production rate. RPN is product of Severity, Occurrence and Detection scores. Here score is

given to Severity, Occurrence and Detection in range 1 to 10 (Refer Table 9.5) that’s why get

RPN score out of 1000 means failure which have RPN near to 100 or more than 100 is given

priority and try to control that that failure by considering corrective action.

50

Ta

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53

9.4. Process Failure Mode and Effect Analysis sheet

PFMEA sheet has universal approved format and based on it PFMEA sheet is as shown in

Table 9.5. In this sheet Severity is denoted as S, Occurrence is denoted as O and Detection is

denoted as D. As shown in table 9.5 in this sheet failure effect and it corrective action also

mentioned if it RPN near to 100 or more than 100.

Note: Score given to Severity and Detection is totally based on researcher thinking.

By using PFMEA sheet (Refer Table 9.5) one can find out that Air Pressure problem effect

production rate more than any other failure as its RPN score is 144. By doing preventive

Maintenance of compressor decrease this problem, otherwise to decrease load by adding new

compressor solve this problem. Secondly Metal (Raw material) problem effect production rate

as its RPN score is 120. To solve this problem effective Inventory Management required

means by maintaining safety stock of metal one can reduce this problem (Refer Chapter 10).

Other failure occurred in 7, 14 and 19 no. Bucket Elevator and 13, 20 and 31 no. Belt

Conveyor as each failure RPN score 90 near to 100 individually. To avoid these failures

preventive maintenance of Bucket Elevator and Belt Conveyor required.

If C.M. Smith and Sons Ltd. will solve these failure problem and one can revise this PFMEA

activity then Alpha 450 machine failure is become major problem that effect production rate.

As PFMEA is continuous process towards improvement after fixing recent failure one should

get other failures which RPN near to 100 or more than 100 and by doing this no. of times and

solving all failure problem on permanent bases production system become more efficient and

accurate.


In this Chapter find out various failure occurred in C.M. Smith and Sons Ltd. Foundry Division

along with its appropriate solution and also which failure effect more using PFMEA Analysis,

by solving it that one failure immediately Company suffer less compare to solving others like

solving Air Problem and Raw material problem, Company easily go toward achieving

production plan.

Chapter 10

Inventory Management

54

10.1. Introduction

Inventory is a stock of items kept by an organization to meet internal or external customer

demand. Inventory includes materials – raw, in process, finished packaging, spares and other

stocked in order to meet an unexpected demand or distribution in future. Inventory

management means overseeing and controlling of the ordering, storage and use of

components that a company will use in the production of the items it will sell as well as the

overseeing and controlling quantities of finished products for sale. Successful Inventory

Management involves creating a purchasing plan that will ensure that item are available when

they are needed and keeping record of existing inventory and its use.

By referring Chapter 9 one can know that in C.M. Smith and Sons Ltd. Foundry Division 29.11

% problems out of all problems is due to Inventories. That means Company not carries safety

stock, actually not know all inventories safety stock level; so not order Inventories at accurate

time and also not know economic order quantity for all Inventories. In this chapter all major

Inventories which used in Foundry and which create problem like process failure are analyze

and their safety stock and economic order quantity are find out. In this chapter Inventory are

analyze for actual production rate- 485 units (Refer Chapter 7), for plan production rate- 661

units (Refer Chapter 7) and for full production capacity- 1260 units (Refer Chapter 7) .

Note: In this chapter mainly focus on Inventories which needed to start production (Raw

Material), means Work in Progress Inventories and Finish Good Inventories are not consider;

and used all data which provided by store based on last orders

10.2. Quantity received per order and demanded per day

In C.M. Smith and Sons ltd. mostly Purchase Department are not mention quantity in order,

but just informs supplier send Inventories because all supplier are supplied Inventories form

long time so send materials based on transportation facility and all most standard rate. Actually

all supplier know how much and when to send materials. In this section all data based on last

order received for respective Inventories as shown in Table 10.1 with respective units.

Regarding Inventories demand per day data are available in store department for actual

production rate 485 units per day and based on it for plan production rate 661 units per day

and full capacity 1260 units per day demand per day is find out using simply comparison

method and judgment as shown in Table 10.1. Example of Comparison method for Wash

Sand -

55

For 485 units required 12 Tonne of Wash Sand

So, For 661 units required ___ Tonne of Wash Sand?

Table 10.1 Quantity received and Inventory demand / day

No. Name of Inventory Order

Received

Demand / day

Actual

Production

Plan

Production

Full

Capacity

1 Wash Sand 10 Tonne 12 Tonne 16.5 Tonne 31.5 Tonne

2 Moulding Sand 10 Tonne 1 Tonne 1.4 Tonne 2.6 Tonne

3 Coal Dust 5000 Kg 1450 Kg 1980 Kg 3800 Kg

4 Bentonite Powder 5000 Kg 1450 Kg 1980 Kg 3800 Kg

5 Pig Iron 30 Tonne 4.62 Tonne 6.3 Tonne 12 Tonne

6 MS Scrap 10 Tonne 4.62 Tonne 6.3 Tonne 12 Tonne

7 Rejection Returns

Runner-Riser - 6.3 Tonne 8.6 Tonne 16.4 Tonne

Foundry Rejection - 1.15 Tonne 1.57 Tonne 3 Tonne

Other Level Rejection - 0.54 Tonne 0.73 Tonne 1.4 Tonne

Chip from Machining - 0.078 Tonne 0.1 Tonne 0.2 Tonne

Outside Rejection 15 Tonne 5.77 Tonne 7.87 Tonne 15 Tonne

8 Hardener 585 Liter 51 Liter 69 Liter 132 Liter

9 Raisin 585 Liter 51 Liter 69 Liter 132 Liter

10 Min Gas 630 Kg 55 Kg 75 Kg 142 Kg

11 Collide Paste 200 Liter 18 Liter 24 Liter 45 Liter

12 Thinner 1000 Liter 600 Liter 817 Liter 1500 Liter

13 Sildrone Acid 2000 Liter 25 Liter 35 Liter 65 Liter

14 CO2 Gas 900 Kg 90 Kg 126 Kg 234 Kg

15 Mould Filter 15000 Piece 485 Piece 661 Piece 1260 Piece

16 Carbon 9577 Kg 212.5 Kg 290 Kg 552 Kg

17 Fe-Silicon 5320 Kg 74 Kg 101 Kg 192 Kg

18 Fe-Mn 1330 Kg 18.5 Kg 25 Kg 48 Kg

19 Iron Sulfur 417 Kg 9.23 Kg 12.6 Kg 24 Kg

20 Slag fix Powder 50 Kg 0.14 Kg 0.19 Kg 0.36 Kg

21 Ferro Inoculants Powder 350 Kg 4.85 Kg 6.61 Kg 12.6 Kg

56

=661 ∗ 12

485

≈16.5 Tonne

In this same way find for all and used judgment also.

Company used Rejection Return to utilize it metal in melting process. As Inside Rejection

Return Runner-Riser material, Foundry Rejection material, Other Level Plant Rejection and

Chip from Machining are used. To find this material demand consider plant run at full capacity

and find it demand as shown below and used this to find actual and plan production rate each

of them demand using Comparison method.

One Cast Runner-Riser weight is around 13 Kg, so at Full Capacity Runner Riser Demand /

day which Company get every day-

Runner − Riser Demand per day at Full Capacity = 13 ∗ 1260

= 16380 Kg ≈ 16.4 Tonne

Foundry rejection rate is around 8 %, and at Full Capacity Company produce 450 units of 37

Kg and 810 units of 25 Kg normally, so Foundry Rejection Demand / day which Company get

every day –

Foundry Rejection Demand per day at Full Capacity = 450 ∗ 37 + 810 ∗ 25 ∗ 0.08

= 2952 Kg ≈ 3 Tonne

Other Level Rejection is around 4 %, and at Full Capacity Company produce 450 units of 37

Kg and 810 units of 25 Kg normally, so Other Level Rejection Demand / day which Company

get every day –

Other Level Rejection Demand per day at Full Capacity = 450 ∗ 37 + 810 ∗ 25 ∗ 0.04

= 1476 Kg ≈ 1.4 Tonne

From Machining shop Company get Chip and its demand for full capacity is around 200 Kg

find using judgment and Outside rejection means rejection by other Company unit or Outer

Parties is come in quantity of 15 Tonne per order and used 15 Tonne itself per day for Full

Capacity.

57

10.3. Safety Stock

For Inventories Safety Stock is carried to prevent stock outs to reduce risk. Because of factors

such as fluctuating in customer demand, forecast inaccuracy and variability in lead times for

raw materials. Lead time is the time difference between the placing of an order and actually

receiving the Inventory ordered.

C.M. Smith and Sons Ltd. Foundry Division are not maintaining it safety stock and that’s why

Inventories problem created (Refer Chapter 7). For this section for inventories used last order

receiving lead time, and based on that Safety Stock for each Inventory find out using equation-

Inventory Safety Stock = Inventory Lead time ∗ Inventory Demand/day

For Inventory Demand / day for each Inventory used Table 10.1 as per requirement. Example

of finding Safety Stock for Wash Sand –

Wash Sand Safety Stock at Actual Production rate = 2 ∗ 12

= 24 Tonne

Same way Find Safety Stock foe other Inventories as shown in Table 10.2.

58

Table 10.2 Safety Stock for Inventories

No. Name of Inventory Lead

Time

(days)

Safety Stock / day

Actual

Production

Plan

Production

Full

Capacity

1 Wash Sand 2 24 Tonne 33 Tonne 63 Tonne

2 Moulding Sand 2 2 Tonne 2.8 Tonne 5.2 Tonne

3 Coal Dust 3 4350 Kg 5940 Kg 11400 Kg

4 Bentonite Powder 3 4350 Kg 5940 Kg 11400 Kg

5 Pig Iron 2 9.24 Tonne 12.6 Tonne 24 Tonne

6 MS Scrap 2 9.24 Tonne 12.6 Tonne 24 Tonne

7 Rejection Returns

Runner-Riser 1 6.3 Tonne 8.6 Tonne 16.4 Tonne

Foundry Rejection 1 1.15 Tonne 1.57 Tonne 3 Tonne

Other Level Rejection 1 0.54 Tonne 0.73 Tonne 1.4 Tonne

Chip from Machining 1 0.078 Tonne 0.1 Tonne 0.2 Tonne

Outside Rejection 10 57.7 Tonne 78.7 Tonne 150 Tonne

8 Hardener 2 102 Liter 138 Liter 264 Liter

9 Raisin 2 102 Liter 138 Liter 264 Liter

10 Min Gas 2 110 Kg 150 Kg 284 Kg

11 Collide Paste 2 36 Liter 48 Liter 90 Liter

12 Thinner 2 1200 Liter 1634 Liter 3000 Liter

13 Sildrone Acid 3 75 Liter 105 Liter 195 Liter

14 CO2 Gas 2 180 Kg 252 Kg 468 Kg

15 Mould Filter 2 970 Piece 1322 Piece 2520 Piece

16 Carbon 3 637.5 Kg 870 Kg 1656 Kg

17 Fe-Silicon 8 592 Kg 808 Kg 1536 Kg

18 Fe-Mn 8 148 Kg 200 Kg 384 Kg

19 Iron Sulfur 2 18.46 Kg 25.2 Kg 48 Kg

20 Slag fix Powder 2 0.28 Kg 0.38 Kg 0.72 Kg

21 Ferro Inoculants Powder 2 9.7 Kg 13.22 Kg 25.2 Kg

10.4. Ordering Cost

Note: In this section consider that give order to that supplier which gives Inventories at

minimum out of more than one supplier and all cost consider based on last order.

59

Ordering Cost is simply the total of expenses incurred during placing an order (purchase order)

to receiving that order. Ordering Cost include cost related to the clerical work of preparing,

releasing, monitoring and receiving order, the physical handling of the goods, inspections and

setup costs, as applicable.

In C.M. Smith and Sons Ltd. purchase department not give order in quantity but just inform

supplier to send Inventories so here quantity received is consider as quantity order. In C.M.

Smith and Sons Ltd. only those cost consider as ordering cost which occurred when company

get order like Inventory cost, transportation cost, etc. as shown in Table 10.3.

As shown in Table 10.3 Transportation cost is two types for company, in first transportation

cost per unit like Wash Sand and second transportation cost for whole order like Collide Paste.

For transportation cost per unit ordering cost find out using equation,

Ordering Cost = [Cost per unit + (Cost per unit ∗ % VAT) + Cost per unit ∗ % Excise duty

− (Cost per unit ∗ %Discount rate) + Transportatrion Cost] ∗ Quantity Order

Example-

Wash Sand Ordering Cost

= [1000 + (1000 ∗ 0.05) + 1000 ∗ 0.1236 − (1000 ∗ 0.00) + 700] ∗ 10

= Rs. 17500

For transportation cost for whole order ordering cost find out using equation,

Ordering Cost = Cost per unit + Cost per unit ∗ % VAT + Cost per unit ∗ % Excise duty

− Cost per unit ∗ %Discount rate ∗ Quantity Order + Transportation Cost

Example-

Collide Paste Ordering Cost = 41 + 41 ∗ 0.15 + 41 ∗ 0.1236 − 41 ∗ 0.00 ∗ 200 + 120

= Rs. 10564

For Rejection Return Ordering Cost not possible because it inside of Company and outside

rejection also not order by Company.

60

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62

10.5. Carrying Cost

Carrying Cost is the cost associated with holding one unit of an item in stock for one period of

time. In Carrying Cost included various elements as shown in Fig. 10.1. But out of this

elements Opportunity Cost and Taxes not concluded here because Company don’t store

safety stock so Opportunity Cost and Taxes on holding Inventories are not occurred.

Fig. 10.1 Carrying Cost Elements

10.5.1. Inventory handling cost (Hc)

Inventory handling cost means cost occurred during Inventories movement from one place to

other inside Company. For this purpose in C.M. Smith and Sons Ltd. have 12 helpers and out

of this in Foundry Division only 6 helpers are used and each of them wages is around Rs. 200,

so total Rs. 1200 is Inventory handling cost per day which divided for each inventory by

considering Order Received (Refer Table 10.1) as cost driver. Each Inventory handling cost is

found out using simply comparison method and judgment as shown in Table 10.4. Example of

Comparison method for Wash Sand Handling Cost –

Overall Total Material Received without considering units = 122900

Out of 122900 total material received 10000 of Wash Sand

So, Out of Rs. 1200 of handling cost Rs.___ is Cost of Wash Sand?

=1200 ∗ 10000

122900

= Rs. 97.64


Carrying Cost Elements

Handling cost

Security Cost

Storing Cost

Insurance Cost

Electricity Cost

Opportunity Cost

Taxes

63

Table 10.4 Inventory Handling Cost / day

Total Inventory Handling Cost = Rs. 1200 / day

No. Name of Inventory Inventory Handling Cost / day

(Rs.)

1 Wash Sand 97.64

2 Moulding Sand 97.64

3 Coal Dust 48.82

4 Bentonite Powder 48.82

5 Pig Iron 292.92

6 MS Scrap 97.64

7 Rejection Returns

Runner-Riser -

Foundry Rejection -

Other Level Rejection -

Chip from Machining -

Outside Rejection 146.46

8 Hardener 5.71

9 Raisin 5.71

10 Min Gas 6.15

11 Collide Paste 1.95

12 Thinner 9.76

13 Sildrone Acid 19.53

14 CO2 Gas 8.79

15 Mould Filter 146.46

16 Carbon 93.51

17 Fe-Silicon 51.94

18 Fe-Mn 12.99

19 Iron Sulfur 4.07

20 Slag fix Powder 0.07

21 Ferro Inoculants Powder 3.42

10.5.2. Security Cost (SEc)

Inventory Security is very essential thing for any Company because in production used costly

material and some time any wrong incident close production also. For Security purpose in

C.M. Smith and Sons Ltd. have around 15 security guard and out of this take 5 security guard

64

for Foundry Division (because Company have three part Foundry, Machining and

Administrative Office) and each of them salary is around Rs.4250, so total security cost is Rs.

21250 per month means Rs. 708.33 per day (Consider 30 day month) which divided for each

inventory by considering Safety Stock (Refer Table 10.2) as cost driver.

Table 10.5 Security Cost / day

Total Security Cost = Rs. 708.33 / day

No. Name of Inventory Security Cost / day (Rs.)

1 Wash Sand 139.13


3 Coal Dust 25.17


5 Pig Iron 53.00

6 MS Scrap 53.00

7 Rejection Returns

Runner-Riser 36.22

Foundry Rejection 6.63

Other Level Rejection 3.09

Chip from Machining 0.44


8 Hardener 0.58

9 Raisin 0.58

10 Min Gas 0.63


12 Thinner 6.63


14 CO2 Gas 1.03


16 Carbon 3.66

17 Fe-Silicon 3.39

18 Fe-Mn 0.85

19 Iron Sulfur 0.11



65

Each Inventory security cost is found out using simply comparison method and judgment as

shown in Table 10.5. Example of Comparison method for Wash Sand Security Cost –

Overall Total Safety Stock without considering units (At Full Capacity) = 320734.92

Out of 320734.92 total safety stock 63000 of Wash Sand

So, Out off Rs. 708.33 of security cost Rs.___ is Cost of Wash Sand?

=708.33 ∗ 63000

320734.92

= Rs. 139.13


Note: Full Capacity Safety Stock is used here because Safety stock is find out using demand

per day and for Plan Production rate and Full capacity demand per day is find out in

comparison of actual production rate demand per day, So for Actual Production Rate, Plan

production Rate and at Full Capacity each Inventory Safety stock proportion is quite same so

take any one out of Actual Production Rate, Plan production Rate and Full Capacity Safety

Stock.

10.5.3. Storing Cost (STc)

Inventory Storing Cost means cost which occurred when store any inventory. Storing cost

includes warehouse rent charges and store department person salary. For Storing Inventory

purpose in C.M. Smith and Sons Ltd. Foundry Division don’t have ware house rent but store

department and have 3 person works on it and those person total salary is around Rs.16800

per month, means Rs. 560 per day (Consider 30 day month) which divided for each inventory

by considering Safety Stock (Refer Table 10.2) as cost driver, But used only those inventory

safety stock which stored in Store department that means those inventories not store in store

department are not allocated this cost. Each Inventory storing cost which store in store

department is find out using simply comparison method and judgment as shown in Table 10.6.

Example of Comparison method for Hardener Storing Cost –

Overall Total Safety Stock which store in store department without considering units (At Full

Capacity)

= 10734.92

66

Table 10.6 Storing Cost / day

Total Storing Cost = Rs. 560 / day

No. Name of Inventory Storing Cost / day (Rs.)

1 Wash Sand -

2 Moulding Sand -

3 Coal Dust -

4 Bentonite Powder -

5 Pig Iron -

6 MS Scrap -

7 Rejection Returns

Runner-Riser -

Foundry Rejection -

Other Level Rejection -

Chip from Machining -

Outside Rejection -

8 Hardener 13.77

9 Raisin 13.77

10 Min Gas 14.82


12 Thinner 156.49


14 CO2 Gas 24.41


16 Carbon 86.39

17 Fe-Silicon 80.13

18 Fe-Mn 20.03

19 Iron Sulfur 2.50



Out of 10734.92 total safeties stock which store in store department 264 of Hardener

So, Out off Rs. 560 of storing cost Rs.___ is Cost of Hardener?

=560 ∗ 264

10734.92

= Rs. 13.77

67







Stock.

10.5.4. Insurance Cost (Ic)

Every company takes Insurance to get more protection against any unavoidable and

unpredictable risk. C.M. Smith and Sons Ltd. have Insurance which provides protection

against earthquake and fire covering insurance and yearly premium for Insurance is around

Rs. 450000. Company have 2 major production section – Foundry and Marching so this

Insurance premium charge half way to both. And consider that company investment is 1/3 in

its inventories every time and also 365 days in year.

So,

Inventory Insurance Cost / day for Foundry Division =450000

2 ∗ 3 ∗ 365

= Rs. 205.48

Inventory Insurance Cost is divided for each inventory by considering Safety Stock (Refer

Table 10.2) as cost driver. Each Inventory Insurance cost is found out using simply

comparison method and judgment as shown in Table 10.5. Example of Comparison method

for Wash Sand Insurance Cost –

Overall Total Safety Stock without considering units (At Full Capacity) = 320734.92

Out of 320734.92 total safety stock 63000 of Wash Sand

So, Out off Rs. 205.48 of Insurance cost Rs.___ is Cost of Wash Sand?

=205.48 ∗ 63000

320734.92

= Rs. 40.36


68

Table 10.7 Insurance Cost / day

Total Insurance Cost = Rs. 205.48 / day

No. Name of Inventory Insurance Cost / day (Rs.)

1 Wash Sand 40.36


3 Coal Dust 7.30


5 Pig Iron 15.38

6 MS Scrap 15.38

7 Rejection Returns

Runner-Riser 10.51





8 Hardener 0.17

9 Raisin 0.17

10 Min Gas 0.18


12 Thinner 1.92


14 CO2 Gas 0.30


16 Carbon 1.06

17 Fe-Silicon 0.98

18 Fe-Mn 0.25

19 Iron Sulfur 0.03







69


Stock.

10.5.5. Electricity Cost (EC)

Electricity is essential most important thing to run any production company. Electricity is used

in material handling also and required to use material in night shifts. For inventories electricity

charges are find out using electrical instrument used as shown in Table 10.8 and 10.9. This

electricity charges are is divided for each inventory by considering Safety Stock (Refer Table

10.2) as cost driver. Each Inventory electricity cost is found out using simply comparison

method and judgment as shown in Table 10.10. For Wash Sand electricity cost directly

allocated Rs. 10.8 because it’s only used for it. For other Inventories electricity cost find out as

shown in following Examples.

Table 10.8 For Inventories other than in store Electricity Charges / day

Electrical

Instrument

Power Rating

(W)

Electricity Charge

(Rs.)

Inventory

covered

1 Flood Light 150 10.8 Wash Sand

1 Flood Light 150 10.8

Moulding Sand

Coal Dust

Bentonite Powder

1 Flood Light 150 10.8 Pig Iron

MS Scrap

Rejection Returns

Example of Comparison method for Moulding Sand Electricity Cost -

Overall Total Safety Stock of Moulding Sand, Coal Dust and Bentonite Powder without

considering units (At Full Capacity) = 28000

Out of 28000 total safety stock Moulding Sand, Coal Dust and Bentonite Powder 5200 of

Moulding Sand

So, Out off Rs. 10.8 of electricity cost Rs.___ is Cost of Moulding Sand?

=10.8 ∗ 5200

28000

= Rs. 2.02

70

In this same way find for Coal Dust and Bentonite powder.

Example of Comparison method for Pig Iron Electricity Cost –

Overall Total Safety Stock of Pig iron, MS Scrap and all Rejection Return without considering

units (At Full Capacity) = 219000

Out of 219000 total safety stock of Pig iron, MS Scrap and all Rejection Return 24000 of Pig

Iron

So, Out off Rs. 10.8 of electricity cost Rs.___ is Cost of Pig Iron?

=10.8 ∗ 24000

219000

= Rs. 1.18

In this same way find for MS Scrap and all Rejection Return.

Table 10.9 Store electricity charges / day

No. Electrical

Instrument

Power Rating

(W)

Electricity Charge

(Rs.)

Inventory Covered

1 4 Tube Light 160 7.68 All Inventory which

in Store 2 1 Flood Light 150 5.40

3 1 Ceiling Fan 60 5.76

4 1 Wall Fan 80 2.88

Total Electricity Charges for Store 21.72

Example of Comparison method for Hardener Electricity Cost –

Overall Total Safety Stock of Inventories stored in store without considering units (At Full

Capacity) = 10734.92

Out of 10734.92 total safety stocks of Inventories stored in store 264 of Hardener

So, Out off Rs. 21.72 of electricity cost Rs.___ is Cost of Hardener?

=21.72 ∗ 264

10734.92

= Rs. 0.53

In this same way find for all other Inventories which store in store.

71

Table 10.10 Electricity Cost / day

No. Name of Inventory Electricity Cost / day (Rs.)

1 Wash Sand 10.8


3 Coal Dust 4.39


5 Pig Iron 1.18

6 MS Scrap 1.18

7 Rejection Returns

Runner-Riser 0.81





8 Hardener 0.53

9 Raisin 0.53

10 Min Gas 0.57


12 Thinner 6.07


14 CO2 Gas 0.95


16 Carbon 3.35

17 Fe-Silicon 3.11

18 Fe-Mn 0.78

19 Iron Sulfur 0.10








Stock.

72

10.5.6. Total Carrying Cost

Total Carrying Cost for each Inventory is as shown in Table 10.11 which is summation of

Handling Cost, Security Cost, Storing Cost, Insurance Cost and Electricity Cost for each

Inventory.

Total Carrying cost

= Handling Cost + Security Cost + Storing Cost + Insurance Cost

+ Electricity Cost

Example- Wash Sand Carrying Cost = 108.20 + 139.13 + 0.00 + 40.36 + 10.8

= Rs. 298.49

10.6. Economic Order Quantity (EOQ)

Economic order Quantity is the order quantity that minimizes total Inventory carrying cost and

ordering cost. EOQ is the order size for some particular inventory item that results in lowest

total inventory cost for the period. EOQ for Inventory is find out using Equation-

EOQ = 2 ∗ Demand ∗ Ordering Cost

Carrying Cost

2

By using this equation each Inventory Economic Order Quantity is find out as shown in Table

10.12. To put Demand per day, Ordering Cost and Carrying Cost value for each Inventory

used Table 10.1, Table 10.3 and Table 10.11 respectively as per requirement. Example of

finding EOQ for Wash Sand at Actual Production Rate -

EOQ for Wash Sand at Actuall Production Rate = 2 ∗ 12 ∗ 17500

289.49

2

= 36.99 Tonne

In this same way find EOQ for all other Inventories other than Rejection Return because no

Ordering Cost for them so no EOQ.

73

Table 10.11 Carrying Cost / day

All Cost in Rs. and per day cost

No. Name of Inventory Hc SEc STc Ic Ec Carrying

Cost

1 Wash Sand 108.20 139.13 - 40.36 10.8 298.49

2 Moulding Sand 108.20 11.48 - 3.33 2.02 125.03

3 Coal Dust 54.10 25.17 - 7.30 4.39 90.96

4 Bentonite Powder 54.10 25.17 - 7.30 4.39 90.96

5 Pig Iron 324.62 53.00 - 15.38 1.18 394.18

6 MS Scrap 108.21 53.00 - 15.38 1.18 177.77

7 Rejection Returns

Runner-Riser - 36.22 - 10.51 0.81 47.54

Foundry Rejection - 6.63 - 1.92 0.15 8.7

Other Level

Rejection

- 3.09 - 0.90 0.07 4.06

Chip from Machining - 0.44 - 0.13 0.01 0.58

Outside Rejection 162.31 331.27 - 96.10 7.40 597.08

8 Hardener 6.33 0.58 13.77 0.17 0.53 21.38

9 Raisin 6.33 0.58 13.77 0.17 0.53 21.38

10 Min Gas 6.82 0.63 14.82 0.18 0.57 23.02

11 Collide Paste 2.17 0.20 4.70 0.06 0.18 7.31

12 Thinner 10.82 6.63 156.49 1.92 6.07 181.93

13 Sildrone Acid 21.64 0.43 10.17 0.12 0.39 32.75

14 CO2 Gas 9.74 1.03 24.41 0.30 0.95 36.43

15 Mould Filter 32.46 5.56 131.46 1.61 5.10 176.19

16 Carbon 103.63 3.66 86.39 1.06 3.35 198.09

17 Fe-Silicon 57.57 3.39 80.13 0.98 3.11 145.18

18 Fe-Mn 14.39 0.85 20.03 0.25 0.78 36.30

19 Iron Sulfur 4.51 0.11 2.50 0.03 0.10 7.25

20 Slag fix Powder 0.07 0.02 0.04 0.00 0.01 0.14

21 Ferro Inoculants

Powder

3.78 0.06 1.32 0.02 0.05 5.23

74

Table10.12 EOQ for Inventories

No. Name of Inventory Order

Received

Economic order quantity

Actual

Production

Plan

Production

Full Capacity

1 Wash Sand 10 Tonne 36.99 Tonne 43.47 Tonne 60.77 Tonne

2 Moulding Sand 10 Tonne 12.27 Tonne 14.62 Tonne 20.55 Tonne

3 Coal Dust 5000 Kg 1454.74 Kg 1711.10 Kg 2415.20 Kg

4 Bentonite Powder 5000 Kg 535.16 Kg 629.47 Kg 888.48 Kg

5 Pig Iron 30 Tonne 153.60 Tonne 180.94 Tonne 256.70 Tonne

6 MS Scrap 10 Tonne 121.60 Tonne 142.96 Tonne 201.42 Tonne

7 Rejection Returns

Runner-Riser - - - -

Foundry Rejection - - - -

Other Level Rejection - - - -

Chip from Machining - - - -

Outside Rejection 15 Tonne - - -

8 Hardener 585 Liter 743.12 Liter 869.65 Liter 1208.47 Liter

9 Raisin 585 Liter 476.47 Liter 557.60 Liter 774.84 Liter

10 Min Gas 630 Kg 704.14 Kg 825.04 Kg 1144.63 Kg

11 Collide Paste 200 Liter 223.15 Liter 260.55 Liter 360.94 Liter

12 Thinner 1000 Liter 424.38 Liter 495.99 Liter 681.50 Liter

13 Sildrone Acid 2000 Liter 206.13 Liter 244.57 Liter 341.55 Liter

14 CO2 Gas 900 Kg 299.40 Kg 352.01 Kg 486.53 Kg


16 Carbon 9577 Kg 941.21 Kg 1105.61 Kg 1548.73 Kg

17 Fe-Silicon 5320 Kg 665.01 Kg 780.15 Kg 1087.21 Kg

18 Fe-Mn 1330 Kg 304.43 Kg 356.41 Kg 497.71 Kg

19 Iron Sulfur 417 Kg 226.39 Kg 266.23 Kg 374.43 Kg

20 Slag fix Powder 50 Kg 13.47 Kg 15.81 Kg 22.18 Kg

21 Ferro Inoculants

Powder

350 Kg 239.03 Kg 281.22 Kg 397.19 Kg

75

10.7. Number of orders

Number of order means for specific period of time as per demand based on EOQ how many

order require to place. Number of Order is measure annually or monthly mostly; here in this

section find Number of order for month bases. Number of Order can find out using equation –

Number of Order =Monthly Demand

EOQ

By using this equation each Inventory Number of order is find out as shown in Table 10.13. To

put Demand per day and EOQ value for each Inventory used Table 10.1 and Table 10.12

Respectively as per requirement. Example of finding Number of order for Wash Sand at Actual

Production Rate-

Number of Order for Wash Sand at Actual Production Rate =12 ∗ 30

36.99

= 10 Orders

Here consider 30 days month and all answer make round figure means for 2.3 orders or 2.7

orders in both case consider answer is 3 orders because order is always round figure number.

In this same way find Number of Order for all other Inventories other than Rejection Return

because no EOQ for them so no Number of order.

For those Inventories which number of order is more than 30 per month, for them instead of

giving EOQ order quantity that comes normally as shown in Table 10.1 Quantity Received

column; This quantity is higher compare to EOQ so carrying cost more but one day one order

look practical other than one day more than one order when material supplier is not belong to

Nadiad. As Example for Bentonite powder order for 5000 Kg is not EOQ for it.

76

Table 10.13 Number of orders / month

No. Name of Inventory Number of Orders / month

Actual

Production

Plan

Production

Full

Capacity

1 Wash Sand 10 12 16

2 Moulding Sand 3 3 4

3 Coal Dust 30 35 48

4 Bentonite Powder 82 95 129

5 Pig Iron 1 2 2

6 MS Scrap 2 2 2

7 Rejection Returns

Runner-Riser - - -

Foundry Rejection - - -

Other Level Rejection - - -

Chip from Machining - - -

Outside Rejection - - -

8 Hardener 3 3 4

9 Raisin 4 4 6

10 Min Gas 3 3 4

11 Collide Paste 3 3 4

12 Thinner 43 50 67

13 Sildrone Acid 4 5 6

14 CO2 Gas 10 11 15

15 Mould Filter 30 35 47

16 Carbon 7 8 11

17 Fe-Silicon 4 4 6

18 Fe-Mn 2 3 3

19 Iron Sulfur 2 2 2

20 Slag fix Powder 1 1 1

21 Ferro Inoculants

Powder

1 1 1

77

10.8. Various Inventory levels

Fig. 10.2 Various Inventory Level

10.8.1. Maximum Level

It include figure of Inventory quantity held in stock at any time. This level achieved when Safety

Stock is maintained and receiving order equal to EOQ. Maximum level finds out using equation

following equation.

Max. level = Safety Stock + EOQ

To put Safety Stock and EOQ value for each Inventory used Table 10.2 and Table 10.12

respectively as per requirement. Example of finding Maximum level for Wash Sand at Actual

Production Rate -

Max. level = 24 + 36.99

= 66.99 Tonne

In this same way find Maximum level for all other Inventories as shown in Table 10.14.

10.8.2. Average Level

This level has between minimum and maximum levels, such that before the material ordered is

received into stores, there is sufficient quantity on hand to cover with normal and abnormal

consumption situations. It is the level at what order for replenishment of stock should be

placed. Average level finds out using following equation.

Avg. . level = Safety Stock +EOQ

2

Various Inventory Levels

Maximum Level Average LevelMinimum Level or

Reorder LevelReorder Level with

Safety Stock

78

To put Safety Stock and EOQ value for each Inventory used Table 10.2 and Table 10.12

respectively as per requirement. Example of finding Average level for Wash Sand at Actual

Production Rate -

Avg. . level = 24 +36.99

2

= 42.50 Tonne

In this same way find Average level for all other Inventories as shown in Table 10.14.

12.8.3. Minimum Level or Reorder Level

It indicates the lowest figure of Inventory balance which must be maintained in hand at all

times, so that is no stoppage of production due to non-availability of Inventory. Minimum level

or Reorder level for each Inventory is equal to Safety stock for each Inventory. To know

Minimum or Reorder level used each Inventory Safety Stock value as per Table 10.2.

12.8.4. Reorder Level with Safety Stock

Sometime Company store Safety Stock and never want to touch it for production purpose, at

that time this reorder level with safety stock is taken in consideration. Other thing is same as

Minimum Level. Reorder level with Safety Stock finds out using following equation.

Reorder Level with Safety Stock = Safety Stock + Reorder Level

To put Safety Stock and Reorder level for each Inventory used Table 10.2 and Table 10.14

respectively as per requirement. Example of finding Reorder level with Safety Stock for Wash

Sand at Actual Production Rate -

Reorder Level with Safety Stock = 24 + 24

= 48 Tonne

In this same way find Reorder level with Safety Stock for all other Inventories as shown in

Table 10.14.

79

Table 10.14 Level of Inventories

No. Name of Inventory Actual Production

Max. Level Average

Level

Min. Level

or Reorder

Level

Reorder

Level with

Safety

Stock

1 Wash Sand 66.99 Tonne 42.50 Tonne 24 Tonne 48 Tonne

2 Moulding Sand 14.27 Tonne 8.13 Tonne 2 Tonne 4 Tonne

3 Coal Dust 5804.74 Kg 5077.37 Kg 4350 Kg 8700 Kg

4 Bentonite Powder 4885.16 Kg 4617.58 Kg 4350 Kg 8700 Kg

5 Pig Iron 162.84 Tonne 86.04 Tonne 9.24 Tonne 18.48 Tonne

6 MS Scrap 130.84 Tonne 70.04 Tonne 9.24 Tonne 18.48 Tonne

7 Rejection Returns

Runner-Riser 6.3 Tonne 6.3 Tonne 6.3 Tonne 12.6 Tonne

Foundry Rejection 1.15 Tonne 1.15 Tonne 1.15 Tonne 2.3 Tonne

Other Level Rejection 0.54 Tonne 0.54 Tonne 0.54 Tonne 1.08 Tonne

Chip from Machining 0.078 Tonne 0.078 Tonne 0.078 Tonne 0.156 Tonne

Outside Rejection 57.7 Tonne 57.7 Tonne 57.7 Tonne 115.4 Tonne

8 Hardener 845.12 Liter 473.56 Liter 102 Liter 204 Liter

9 Raisin 578.47 Liter 340.24 Liter 102 Liter 204 Liter

10 Min Gas 814.14 Kg 462.07 Kg 110 Kg 220 Kg

11 Collide Paste 259.15 Liter 147.58 Liter 36 Liter 72 Liter

12 Thinner 1624.38 Liter 1412.19 Liter 1200 Liter 2400 Liter

13 Sildrone Acid 281.13 Liter 178.06 Liter 75 Liter 150 Liter

14 CO2 Gas 479.40 Kg 329.70 Kg 180 Kg 360 Kg


16 Carbon 1578.71 Kg 1108.12 Kg 637.5 Kg 1275 Kg

17 Fe-Silicon 1257.01 Kg 924.50 Kg 592 Kg 1184 Kg

18 Fe-Mn 452.43 Kg 300.22 Kg 148 Kg 296 Kg

19 Iron Sulfur 244.85 Kg 131.65 Kg 18.46 Kg 36.92 Kg

20 Slag fix Powder 13.75 Kg 7.01 Kg 0.28 Kg 0.56 Kg

21 Ferro Inoculants

Powder

248.73 Kg 129.22 Kg 9.7 Kg 19.4 Kg

80

Table 10.14 (Continue…)

No. Name of Inventory Plan Production

Max. Level Average

Level

Min. Level

or Reorder

Level

Reorder

Level with

Safety

Stock


2 Moulding Sand 17.42 Tonne 10.11 Tonne 2.8 Tonne 5.6 Tonne



5 Pig Iron 193.54 Tonne 103.07 Tonne 12.6 Tonne 25.2 Tonne

6 MS Scrap 155.57 Tonne 84.08 Tonne 12.6 Tonne 25.2 Tonne

7 Rejection Returns


Foundry Rejection 1.57 Tonne 1.57 Tonne 1.57 Tonne 3.14 Tonne



Outside Rejection 78.7 Tonne 78.7 Tonne 78.7 Tonne 157.4 Tonne

8 Hardener 1007.65 Liter 572. 83 Liter 138 Liter 276 Liter


10 Min Gas 975.04 Kg 562.52 Kg 150 Kg 300 Kg


12 Thinner 2129.99 Liter 1881. 99 Liter 1634 Liter 3268 Liter


14 CO2 Gas 604.01 Kg 428.00 Kg 252 Kg 504 Kg


16 Carbon 1975.61 Kg 1422.80 Kg 870 Kg 1740 Kg


18 Fe-Mn 556.41 Kg 373.20 Kg 200 Kg 400 Kg

19 Iron Sulfur 291.43 Kg 158.31 Kg 25.2 Kg 50.4 Kg


21 Ferro Inoculants

Powder

294.44 Kg 153.83 Kg 13.22 Kg 26.44 Kg

81

Table 10.14 (Continue…)

No. Name of Inventory Full Capacity

Max. Level Average

Level

Min. Level

or Reorder

Level

Reorder

Level with

Safety

Stock


2 Moulding Sand 25.74 Tonne 15.47 Tonne 5.2 Tonne 10.4 Tonne



5 Pig Iron 280.70 Tonne 152.35 Tonne 24 Tonne 48 Tonne

6 MS Scrap 225.42 Tonne 124.71 Tonne 24 Tonne 48 Tonne

7 Rejection Returns


Foundry Rejection 3 Tonne 3 Tonne 3 Tonne 6 Tonne



Outside Rejection 150 Tonne 150 Tonne 150 Tonne 300 Tonne

8 Hardener 1472.47 Liter 868.23 Liter 264 Liter 528 Liter


10 Min Gas 1428.63 Kg 856.32 Kg 284 Kg 568 Kg


12 Thinner 3681.50 Liter 3340.75 Liter 3000 Liter 6000 Liter


14 CO2 Gas 954.53 Kg 711.26 Kg 468 Kg 936 Kg


16 Carbon 3204.24 Kg 2430.37 Kg 1656 Kg 3312 Kg


18 Fe-Mn 881.71 Kg 632.86 Kg 384 Kg 768 Kg

19 Iron Sulfur 422.43 Kg 235.22 Kg 48 Kg 96 Kg


21 Ferro Inoculants

Powder

422.39 Kg 223.79 Kg 25.2 Kg 50.4 Kg

82


Null Hypothesis: There is no difference in economy order quantity between

actual production and plan production.

Alternative Hypothesis: There is difference in economy order quantity between actual


This Hypothesis Testing is done on each Inventory separately by finding % Change in EOQ for

Actual Production in comparison of Plan Production for each Inventory by using equation as

shown in Table 10.15 -

% Change = EOQ of Plan Production − EOQ of Actual production

EOQ of Plan Production ∗ 100

Here assume more than 5 % change in EOQ quantity is not tolerated, means for each

Inventory if % Change is less than 5 % not reject Null Hypothesis for that particular Inventory

other than this % Change is greater than 5 % reject Null Hypothesis for that particular

Inventory.

Example of Hypothesis Testing for Wash Sand,

% Change = 43.47 − 36.99

43.47 ∗ 100

= 14.90 % > 5 % So Reject Null Hypothesis

Same way Find out % Change for each Inventory as shown in Table 10.15.


By referring each Inventory % Change (Refer table 10.15), One can know all Inventory all

Inventories % Change is greater than 5 % So Reject Null Hypothesis for each Inventory. Thus,

Null Hypothesis is rejected and it is concluded that there is difference in economy order

quantity between actual production and plan production.

83

Table 10.15 Hypothesis Testing 3

No. Name of Inventory Units Economic Order Quantity %

Change

Result H0,

Accept if %

Change < 5 %

Reject if %

Change > 5 %

Actual

Production

Plan

Production

1 Wash Sand Tonne 36.99 43.47 14.90 Reject

2 Moulding Sand Tonne 12.27 14.62 16.07 Reject

3 Coal Dust Kg 1454.74 1711.1 14.98 Reject

4 Bentonite Powder Kg 535.16 629.47 14.98 Reject

5 Pig Iron Tonne 153.6 180.94 15.10 Reject

6 MS Scrap Tonne 121.6 142.96 14.94 Reject

7 Rejection Returns Tonne - - - -

8 Hardener Liter 743.12 869.65 14.54 Reject

9 Raisin Liter 476.47 557.6 14.54 Reject

10 Min Gas Kg 704.14 825.04 14.65 Reject

11 Collide Paste Liter 223.15 260.55 14.35 Reject

12 Thinner Liter 424.38 495.99 14.43 Reject

13 Sildrone Acid Liter 206.13 244.57 15.71 Reject

14 CO2 Gas Kg 299.4 352.01 14.94 Reject

15 Mould Filter Piece 497 582 14.60 Reject

16 Carbon Kg 941.21 1105.61 14.86 Reject

17 Fe-Silicon Kg 665.01 780.15 14.75 Reject

18 Fe-Mn Kg 304.43 356.41 14.58 Reject

19 Iron Sulfur Kg 226.39 266.23 14.96 Reject

20 Slag fix Powder Kg 13.47 15.81 14.80 Reject

21 Ferro Inoculants

Powder

Kg 239.03 281.22 15.00 Reject

84


In this Chapter find out Safety Stock, Economic Order Quantity, and Inventory various levels

for Actual Production 485 units, Plan Production 661 units and at Full Capacity 1260 units

based on their demand per day for each Inventory, By following this Company can solve it

Inventory (Raw Material) Problem. For this purpose find out Ordering Cost for each Inventory

and Inventory Carrying Cost by assign various cost like handling cost, electricity cost, etc on

particular Inventory using apportionment costing method. Also referring this Chapter find out

that Plan Production EOQ and Actual Production EOQ is not same.

Chapter 11

Safety Analysis

85

11.1. Introduction

The Factories Act, 1948 is a piece of legislation covering all aspects regarding factories

namely: approval, licensing and registration of factories, the inspecting authorities, health,

safety, welfare, working hours, employment of workers- adults and young children, annual

leave and penalties. Out of these all here mainly focus on Safety provision which prescribed in

The Factory Act, 1948 various sections. In this chapter compare C.M. Smith and Sons ltd.

Foundry division safety actual condition with the Factory Act, 1948 safety provision.

11.2. Safety Analysis based on The Factory Act, 1948 Safety Provision

Note: Only that Safety Provision analyze which relate to C.M. Smith and Sons Ltd. foundry

division.

11.2.1. Section 21: Fencing of machinery

According to this provision, “To fence with guards of a substantial construction on every

dangerous part of any machinery such as moving parts of prime movers and flywheels

connected to it, every part of transmission machinery, etc. is Factory Management

responsibility. “

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division all moving part

of machinery or equipment like bucket elevator are closed using guards, but some portion of

belt conveyor is open because worker work on low speed belt to provide guide way to black

sand. Otherwise this provision is more for machine shop rather than foundry unit.

11.2.2. Section 22: Work on or near machinery in motion

According to this provision, “A specially trained adult male worker should examine, adjust and

lubricate any part of a machine while in operation. That worker should wear tight fitting

clothing. That Worker should not handle a belt on a moving pulley unless - the belt is not more

than fifteen centimeters in width; the pulley is normally for the purpose of drive and not merely

a fly-wheel or balance wheel (in which case a belt is not permissible); the belt joint is either

laced or flush with the belt; the belt, including the joint and the pulley rim, are in good repair;

there is reasonable clearance between the pulley and any fixed plant or structure; secure

foothold and, where necessary, secure handhold, are provided for the operator.”

86

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division adult experience

male worker examine machine while in operation but not wear tight fitting cloths and on daily

bases worker handle running low speed belt conveyor to provide guide way to black sand

where belt width more than fifteen centimeters.

11.2.3. Section 23: Employment of young person’s on dangerous machines

According to this provision, “No young person shall be allowed to work on any machine unless

that person has been fully instructed to beware of the dangers arising from the machines, to

observe precautions and has received training in work under the supervision of a person who

has a throughout knowledge and experience of working on that machine. “

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division on the job

training given to any new worker regarding job by experience worker in presence of

supervisor. So this provision is completely fulfilled by the Company.

11.2.5. Section 26: Casing of new machinery

According to this provision, “In all machinery driven by power, every set screw, bolt or key on

any revolving shaft, spindle, wheel or pinion shall be so sunk or securely guarded to prevent

any danger.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division revolving shaft

driven equipment like low speed belt conveyor which used to transfer sand in black sand plant

is not guarded because worker working on moving belt for guiding sand, Other than this all

machinery are properly guarded. Other problem in underground sand return plant worker

sometime work on moving belt but at that place not have proper lighting.

11.2.6. Section 28: Hoists and lifts

According to this provision, “In every factory, every hoist and lift shall be of good mechanical

construction, sound material and of adequate strength, maintenance properly and examined

by a competent authority once in six months. Every hoist-way and lift-way shall be protected

and enclosed with gates.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division used crane

which are as per standard defined for crane for lifting purpose, examine it also and crane

enclosed by proper gates with good mechanical constructed guide way. Company also

87

provides 4 safety belts to maintenance department for crane maintenance, so this provision is

completely fulfilled by the Company.

11.2.7. Section 29: Lifting machines, chains, ropes and lifting tackles

According to this provision, “In every factory the lifting machines, chains, ropes and lifting

tackles for the purpose of raising or lowering of persons, goods or materials shall be of good

construction and shall be free from defects and shall be strong enough to carry the necessary

loads.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division used rope for

raising or lowering goods or material shall which are solid in construction and strong enough to

carry load. So this provision is completely fulfilled by the Company.

11.2.8. Section 31: Pressure plant

According to this provision, “If in any factory, any plant or machinery or any part thereof is

operated at a pressure above atmospheric pressure, effective measures shall be taken to

ensure that the safe working pressure of such plant or machinery or part is not exceeded.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division pressure gauge

is used to measure pressure of air and make sure pressure not go beyond limit means safe

working environment. So this provision is completely fulfilled by the Company.

11.2.9. Section 32: Floors, stairs and means of access

According to this provision, “All floors, steps, stairs, passages and gangways shall be of sound

construction and properly maintained and shall be kept free from obstructions and substances

likely to cause persons to slip to ensure safety.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division have all floors,

steps, stairs and passages with solid nature construction which fully safe, aspect black sand

plant top floor is vibrate due to below working machinery but no man working on top floor so

it’s not effect more to worker working on foundry division. So this provision is completely

fulfilled by the Company.

88

11.2.10. Section 35: Protection of eyes

According to this provision, “In respect of manufacture process carried on in any factory being

a process causing injury to the eyes from particles or fragments thrown off in the course of the

process or exposure to excessive light, the state Govt. may by rules required that effective

screens or suitable goggle shall be provided to the persons employed.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division management

provided Goggles (two hundred pair of Goggles provided last time) to melting and pouring

process workers where worker deal with high temperature liquid metal but in actual sometime

workers used their own stylish goggles rather than safety goggles, this due to lake of

awareness in worker regarding safety and lake of supervision in safety aspect. Workers also

accused that management not provides goggles to them.

11.2.11. Section 36: Precautions against dangerous fumes, gases, etc.

According to this provision, “No person shall be required or allowed to enter any chamber,

tank, vat, pit, pipe, flue or other confined space in any factory in which any gas, fume, vapour

or dust is likely to be present to such an extent as to involve risk to persons being overcome

thereby, unless it is provided with a manhole of adequate size or other effective means of

egress.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division management

provide Mask (six hundred Masks per month) to black sand plant workers where sand dust is

major problem for health and workers also used it during work time. So this provision is

completely fulfilled by the Company.

11.2.12. Section 37: Explosive or inflammable dust, gas, etc.

According to this provision, “Where in any factory any manufacturing process produces dust,

gas, fume or vapour of such character and to such extent as to be likely to explode on ignition,

all practicable measures shall be taken to prevent any such explosion by- (a) Effective

enclosure of the plant or machinery used in the process; (b) Removal or prevention of the

accumulation of such dust, gas, fume or vapour; (c) Exclusion or effective enclosure of all

possible sources of ignition.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division is used sand as

basic element for production. All machine and equipment are working using sand that’s why

89

dust is not created problem although some time break down of machine or equipment due to

dust jamming. Other furnace cooling system vapour or gases are required to care more to

explode on ignition and that care now taken by Company. So this provision is completely


11.2.13. Section 38: Precautions in case of fire

According to this provision, “(a) In every factory, all practicable measures shall be taken to

prevent outbreak of fire and its spread, both internally and externally, and to provide and

maintain- safe means of escape for all persons in the event of a fire, and the necessary

equipment and facilities for extinguishing fire; (b) Effective measures shall be taken to ensure

that in every factory all the workers are familiar with the means of escape in case of fire and

have been adequately trained in the routine to be followed in such cases; (c) Exit door shall

not be locked or fastened so that they could be easily opened and they be constructed to

outwards.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division melting area 3

fire extinguishers provided where maximum fire chance due to melting furnace and other fire

extinguishers are stored in plant store. Foundry unit has lots of open door and spaces through

which workers can go outside in any hazardous fire situation. So this provision is completely


11.2.14. Section 45: First-aid appliances

According to this provision, “(a) There shall in every factory be provided and maintained so as

to be readily accessible during all working hours first-aid boxes or cupboards equipped with

the prescribed contents, and the number of such boxes or cupboards to be provided and

maintained shall not be less than one for every one hundred and fifty workers ordinarily

employed at any one time in the factory. (b) Nothing except the prescribed contents shall be

kept in a first-aid box or cupboard. (c) Each first-aid box or cupboard shall be kept in the

charge of a separate responsible person who holds a certificate in first-aid treatment

recognized by the State Government and who shall always be readily available during the

working hours of the factory.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division First-aid box

provided but it is empty means not maintain or have any prescribed contents in that First-aid

box, and not any single person giving that responsibility to maintain it.

90

11.2.15. Section 111: Obligations of workers

According to this provision, “Worker is also under obligation to use the safety appliances and

worker should not misuse any appliance, convenience or other things provided.”

As prescribed in this provision, In C.M. Smith and Sons Ltd. Foundry division workers not give

more important to safety. As per management and last record data, Company provides around

fifty pair of Safety Shoes, around seventy Helmets and around thousand Hand Glows to their

workers; and around ten Asbestos Hand Glows for melting, around ten Apron and around two

hundred pair of Goggles to their particularly melting and pouring process workers. But actual

scenario is totally different and its look like safety is no where matter for workers. Workers are

working without wearing Safety Shoes (not even normal shoes also) and not used Helmets

where required. Workers used Hand Glows but not in particular manner like it should be used,

but out of one pair mostly only used one Hand Glow for both hand to do their work. Melting

and pouring process works also not wear Apron and some time Safety Goggles also which

required most in this process for safety. Workers not used because Company management

not explains safety important to them and super visor also not see that workers do work with

ensuring proper safety or not. To solve this and improve safety standard insight company give

safety awareness and it supervision responsibility to process supervisor and strictly take action

against those who not follow safety rules either it supervisor or worker. On other hand Workers

say that Company not provides them safety appliances so they not used it.


In this Chapter find out that in C.M. Smith and Sons Ltd. Foundry Division out of The Factory

Act 1948 only 15 provisions is required to analyze, and out of this Company only completely

fulfill 8 provisions, But Company future goal to develop its Safety and welfare provision toward

development (Refer Section 2.9), So hope full in nearest future C.M. Smith and Sons Ltd.

achieve all Safety Provision mention in the Factory Act 1948.

Chapter 12

Scope for further study

91

Management Project never stops means in every management aspect there is always scope

for work. In C.M. Smith and Sons Ltd., Nadiad plant – Foundry Division one can do lots of

further work apart from this project as mention below-

1. Production plan is change in C.M. Smith and Sons Ltd. on daily bases and daily

occurrences of problem also various, so one can do this same analysis (Refer Chapter 7)

again with new latest sample to explore about recent time situation, and based on that get

idea about on time difficulties and problems.

2. In Operation Management one can find minimum time to complete production process

using Crashing if get or find out Fixed Cost and Variable Cost associated with time, at

same time by repeating this work (Refer Chapter 8) analyze any improvement or not in

terms of less time and more output.

3. PFMEA is repetitive process in nature means check again and again after applying last

failure solution, so one can repeat this same PFMEA (Refer Chapter 9) in future to find

current most impactful failure and its suitable solution, otherwise in this same way do

DFMEA (Design Failure Mode and Effect Analysis) if want to know design and quality

aspect problem but this is more technical in nature.

4. In Inventory Management one can do ABC Inventory Analysis and Inventory Costing if one

cans able divided Inventory cost in to Fixed and Variable Cost.

5. Company future goal is to develop its Safety and welfare provision toward development so

one can do this same Safety analysis (Refer Chapter 11) again to check Company achieve

its goal toward Safety development or not, and for comparison use this analysis as

reference.

6. If one can get data from Company like how many piece order on which day and how many

actually supply on that day along with its quality, then OTIFE Analysis is possible which

shows Company solidity in matching Customer/Clint demand.

7. Other way one can do work in other management area inside company like Cost

Management means do product costing for Company and compare it with price and using

that check Company financial solidity.

Chapter 13

Conclusion and Suggestions

92

After doing all research analysis concluded that In C.M. Smith and Sons Ltd. Foundry Division

is only able achieve only 73.49 % Production Plan due to various reason such as

Maintenance, Inventory, Man Power and Electricity Problems; And Company Management

utilize only 38.56 % of its Capacity (Refer Chapter 7). C.M. Smith and Sons Ltd. Foundry

Division production is run at smooth adequate speed using which Company achieve more than

its plan production (Refer Chapter 8) but because of break down in production due to

Maintenance and Inventory Problems Company not able to achieve its production plan; At end

of PFMEA also Air Problem (Maintenance) and Inventory Problem is major cause for failure in

Company (Refer Chapter 9). Maintenance problem is because Company believe in breakdown

maintenance concept and Inventory Problem is because Company not know Safety Stock,

Economic order Quantity and Number of Orders for Inventories used in production. C.M. Smith

and Sons Ltd. Foundry Division not fulfill all safety provision mention in the Factory Act 1948

and belong to it (Refer Chapter 11).

C.M. Smith and Sons Ltd. Foundry Division have great facility but not actually use those

facilities in profitable manner. Company has great Automatic Black Sand plant, Alpha 450 and

Alpha 900 moulding Machine, Induction Furnace, etc. but Company Management not maintain

it properly that’s why maintenance break down problem occurred. To solve Maintenance

Problem C.M. Smith and Sons Ltd. Foundry Division must use preventive maintenance

concept so break down not happen on actual working time again and again which lead

towards reduction in failures. To solve Inventory problem Company must maintain Safety

Stock and order EOQ quantity for number of time as find in Chapter 10 for all Inventories using

comparative change with respect to future plan production to reduce failures. According to

C.M. Smith and Sons Ltd. Store record Company provide Safety equipments like Safety

Shoes, Helmets, Goggles, etc. but workers not use it, means workers are not more aware

about Safety and don’t give it more importance, so to solve this and make sure workers use all

Safety Instrument correctly appoint Company Safety Officer which not required as per the

Factory Act 1948 because less than 1000 employees or give responsibility to process

supervisor to ensure all worker use Safety Instrument and take all Safety measure strictly. But

Company future goal is to develop its Safety and welfare provision toward development, so

hope full in nearest future C.M. Smith and Sons Ltd. achieve all Safety Provision mention in

the Factory Act 1948.

ix

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Operation, Failure and Safety Analysis along with Inventory Management

Engineering

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