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 Systems Definition and Cost Calculation Method For API Flushing Plans At Sulzer Pumps India Ltd. Sagar Biyani Email   [email protected]  St. Francis Institute of Management and Research Mt. Poinsur, SVP Road, Borivli (W). Mumbai  400 103. Contact No: 28917089.
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    Systems Definition and

    Cost Calculation Method

    For API Flushing PlansAt Sulzer Pumps India Ltd.

    Sagar [email protected]

    St. Francis Institute of Management and Research

    Mt. Poinsur, SVP Road, Borivli (W). Mumbai 400 103.

    Contact No: 28917089.

    mailto:[email protected]:[email protected]:[email protected]:[email protected]
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    1

    A RESEARCH PROJECT

    ON

    Systems Definition and Cost Calculation

    Method for API Flushing Plans at

    Sulzer Pumps India Ltd

    FOR

    SFIMAR

    Compiled to the Mumbai University in the partial fulfillment of the requirementfor the award of the degree in...

    MASTERS OF MANAGEMENT STUDIES

    Submitted By:

    Name: Sagar Anil Biyani.

    Course: MMSI, Div A.

    Roll No. 45.

    Year: 200607.

    Under the guidance of

    Prof. Sulbha Rao Rane

    SFIMAR

    St Francis Institute Of Management And Research, Mt. Poinsur,

    S.V.P Road, Borivali (W) Mumbai.

    Year : 20062008.

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    Certificate

    This is to certify that the Project work titled Systems Definition and

    Cost Calculation Method for API Flushing Plans submitted by me in

    partial fulfillment of the requirement for the degree of Master of Management

    Studies to St. Francis Institute of Management and Research under Mumbai

    University, is an original work and the same has not been submitted either to

    St Francis Institute of Management & Research (under Mumbai University)

    earlier or to any other institution.

    ( )

    Sagar Anil Biyani

    Roll No. 45

    Countersigned by: Project Guide

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    a. Acknowledgement:

    I am extremely grateful to all the people who have guided me during

    the tenure of this Summer Project. I would like to acknowledge the support &

    valuable inputs from my guides at Sulzer & SFIMAR without which it would

    not have been possible to carry out an extensive study on the subject.

    First Of all I would like to express my heart felt gratitude to Mr. N. V.

    Suresh, Sr. Manager, HRDA & Mr. N. H. Dharamshi, ORE Department for

    their constant encouragement & kind Co-operation in carrying out this work.

    It is my privilege to express my gratitude towards St Francis Institute OfManagement & Research & in particular our director Dr. Thomas Mathew &

    my Guide Prof. Sulbha Raorane for providing me the support & giving me the

    opportunity to successfully complete my summer project at Sulzer Pumps

    India Ltd.

    Lastly I am pleased to express my sincere appreciation to all those who

    have helped me by providing useful information and supported me to

    complete this project on time.

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    b. Executive Summary:

    There are various types of plans like primary, secondary and auxiliary

    used in pumps depending on the applications. Many of the plans have

    instrumentation applicable varying on the processes and customers

    requirement. Instruments could be sourced indigenously or needs to be

    imported. While submitting an offer the applicable price is worked out with

    costing department and then included in the price being submitted. Price is

    worked out based on applicable items.

    The project was carried out to study the various plans, review the

    applicable items, prepare functional properties and define the cost band. A

    standard supply list of optional supplies with applicable procurement policy

    and its respective cost is prepared.

    A ready reckoner matrix has been prepared which gives the standard

    supply with clearly indicating where the same would applicable, listing the

    optional supplies along with their applicability and cost factor band.

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    c. Table of Contents:

    1. Brief Description of the Company ........................................................ 6

    a. Annual Report 2005 ...................................................................... 8

    2. Introduction to Project .......................................................................... 9

    a. Project Title ................................................................................... 9

    b. Problem Identification .................................................................... 9

    c. Objective ....................................................................................... 9

    3. Project Design...................................................................................... 10

    a. Research Methodology ............................................................... 10

    b. Data Collection ............................................................................ 10

    c. Analytical Tool Used .................................................................... 10

    4. Limitations............................................................................................ 11

    5. Analysis and Finding ........................................................................... 12

    a. Part I ........................................................................................ 12

    b. Part II ....................................................................................... 14

    6. Conclusion ........................................................................................... 18

    7. Bibliography, References & Websites ............................................... 19

    8. Annexure .............................................................................................. 20

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    1. Brief Description of the

    Company:

    Sulzer Pumps is one of the worlds leading pump manufacturers; they

    are specialized in centrifugal pumps and agitators/mixers for the Oil & Gas,

    Hydrocarbon Processing, Pulp & Paper, Power Generation, Water &

    Wastewater and Food, Metals & Fertilizer markets.

    Their products are internationally reputed for their technical excellence.

    They have over 20 Marketing offices, 12 Manufacturing facilities and 50

    dedicated service centres world-wide to provide local support for our

    customers. The sales office of Sulzer is located in all the metros of INDIA like

    Delhi, Mumbai, Kolkata and Chennai along-with Baroda and Hyderabad.

    Sulzer Pumps India Ltd is a professionally managed company which is

    demonstrated by the work culture that empowers people, promotes cross

    functional teams & encourages new ideas & initiatives.

    Sulzer Pumps India Ltd. desires to be a leader in its area of business,

    to be responsive to customer needs, to set up new standards in the quality,

    performance & fulfill obligations with team work & commitment.

    Aspiration:

    "Sulzer Pumps India Ltd has ambitious plans for the future; it focuses

    systematically on customer orientation, performance and financial success.

    The company believes in implementing these principles, which in future

    will be followed up more intensively and hence will help to achieve the

    company goals."

    Mission:

    "Our primary Goal is to Create Value by Utilizing Our Engineering

    Know - how in Selected Industrial market"

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    Customer Dedication:

    "We Make Our Customers More Competitive"

    Performance:

    "We Meet High Standards"

    Financial Success:

    "We Deliver Financial Value"

    Quality Policy:

    "Focus on Customers growth & profit will follow."

    Vision:

    We create added value for our customers, employees and

    shareholders with rapid, anticipatory adaptation to customer's requirements

    and modern, innovative technology.

    History of Sulzer Pumps India Ltd

    1974 Started as Khimline Pumps Ltd. (KPL) with the manufacture of

    chemical norm pumps as per ISO 2858

    1984 Tied up with Sulzer and entered the HPI market

    1996 - Sulzer increased its stake in KPL by acquisitions from Financial

    Institutions, original Promoters and Employees.

    1998 Change of Company name from Khimline Pumps Ltd. (KPL) to Sulzer

    Pumps India Ltd.

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    Annual Report 2005

    In 2005, Sulzer pumps India Ltd. Registered an increase in order intake

    of 11.90% over the previous year. The order intake increased from INR 1087

    Mio in 2004 to INR 1216 Mio in 2005. The sales in 2005 is 34.70% higher

    than the previous year.

    The following graph gives the performance of Sulzer Pumps India Ltd.

    0

    200

    400

    600

    800

    1000

    1200

    1400

    COGS (in Mill)Sales (in Mill)

    Profit (in Mill)EPS (in Rs.)

    557

    970

    56

    22.5

    753

    1318

    115

    46.36

    2004 2005

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    2. Introduction to Project:

    a. Project Title

    The title of this project is Systems Definition and Cost Calculation

    Method for API Flushing Plans.

    b. Problem Identification

    There are various types of pumps and due to rotation of motor and

    other components the seal gets heated and corroded. Hence, various

    Flushing systems are used, to improve the life of Seal and the Pump. But it is

    very difficult to decide which flushing systems should be used.

    Also the cost of this system varies as it is outsourced. Along with the

    basic cost the cost also varies on the accessories used along with them.

    There are many different accessories like Temperature Indicator, Cooler and

    many more.

    c. Objective

    The objective of the project was:

    To study all the flushing plans and to define a proper system for

    selection of Flushing Plans according to the conditions specified by the

    customer.

    To prepare a matrix for calculating the cost of various plans based onthe Basic cost along with the cost of accessories as required in various

    plans. The matrix should also include various taxes and give the final

    Landing Cost of the plan.

    This system and the matrix will be used by the marketing department to

    determine the cost of plans so that the calculation of any project becomes

    easier, accurate and consistent.

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    3. Project Design:

    a. Research Methodology:

    The Research Methodology used is a combination of Exploratory and

    Causal method.

    The exploratory research was conducted as the method of selection of

    plans was not clearly defined. This research gave me a significant insight into

    the process of selecting appropriate Flushing Plans.

    The causal research was conducted to study the selection of plan and

    its effect on cost.

    b. Data Collection

    The Secondary data was collected from the data sheets API 682 and

    API 610 created by the American Petroleum Institute which gave all theinformation regarding the selection of Flushing Plan.

    The first hand information regarding the Costs, etc. was primarily

    collected from Mr. Dharamshi.

    c. Analytical Tools Used

    Software like MS-Excel and MS-PowerPoint were used to design the

    system for selection and the model for costing of flushing plans. As these

    were user friendly and extensively used.

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    4. Constraints:

    The model was designed based on the parameters decided during the

    discussions with the users. The cost was not available for all the plans and

    instruments, so was not able to test it for all the plans.

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    5.Analysis and Finding:

    Seals are one of the major components of Pump. Now whenever a

    pump is in use, due to rotation and continuous movement the seal gets

    heated or corroded and gradually damages. So to increase the life of seals as

    well of pump various flushing systems are used.

    The project was divided in two parts:

    1. Preparing a system for the selection of various Flushing Plans

    based on the requirement of the pump and

    2. Preparing a matrix for the calculation of the Flushing Plans selected

    along with the accessories required in the Plan.

    PartI

    There are various Flushing Systems classified by names of plans as follows:

    i. Plan 01

    ii. Plan 02

    iii. Plan 11

    iv. Plan 13

    v. Plan 14

    vi. Plan 21

    vii. Plan 23

    viii. Plan 31

    ix. Plan 32

    x. Plan 41

    xi. Plan 51

    xii. Plan 52

    xiii. Plan 53a, 53b, 53c.

    xiv. Plan 54

    xv. Plan 62

    xvi. Plan 71

    xvii. Plan 72

    xviii. Plan 74

    xix. Plan 75

    xx. Plan 76

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    One of the plans is shown below:

    The plans are classified on the basis of the fluid being used and the type of

    seal.

    The fluid is mainly of two types:1. Non-Hydrocarbon

    2. Hydrocarbon.

    a. Flashing Hydrocarbon

    b. Non-Flashing Hydrocarbon

    The seals are classified on basis of arrangement:

    1. Arrangement 1

    Single Seal.2. Arrangement 2 Pressurized Dual Seal

    3. Arrangement 3 Unpressurized Dual Seal.

    After these two major factors the flushing plans are selected as on basis of

    temperature and many other such factors.

    So these factors were studied from the data sheets of American Petroleum

    Institute; API 610 & API 682 which gives the description of all the plans and the

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    conditions regarding the use of plans. After studying the various plans, a system

    was designed in which we give input about the type of fluid, the seal arrangement

    and then various questions are asked about the temperature of fluid, etc. which

    helps in the Decision-Making for the selection of pump. Then based on these

    selections a list of the plans to be installed is prepared.

    Thus, the system helps in selection of the Flushing Plans as per the

    requirement of the pump.

    Part II

    As we saw earlier there are 20 plans. Hence, after the plans are selected

    from the system, the next step was to calculate the cost.

    The major problem was, in every plan there are again different designs

    based on type of pump like CC/CZ or ZE/ZF/OHH/MB/MC/GSG. Also the cost of

    plan various on designs like 3/8 tube or pipe, etc.

    After analysing the above factors a matrix was prepared. The matrix

    considered the basic costs of all the plans and instruments required with the plan.

    There are many accessories along with the plans. The various accessories

    as follows:

    i. Temperature Indicator

    ii. Pressure Indicator

    iii. Pressure Control Valve

    iv. Level Indicator

    v. Level Switch High

    vi. Level Switch Low

    vii. Level Gauge

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    viii. Pressure Switch

    ix. Pressure Switch High

    x. Pressure Switch Low

    xi. Flow Indicator

    xii. Flow Switch High

    xiii. Flow Indicator Low

    xiv. Strainer

    xv. Cooler

    xvi. Cyclone Separator

    xvii. Reservoir

    All the plans do not require all the above accessories. So the matrix gives

    the cost and a list of only those accessories which are required along with that

    plan.

    The matrix also gives the total cost including the Custom duty or Excise

    and Sales tax. Thus the matrix gives the Landing cost of the plans and a list of

    accessories required.

    Let us assume plans 11, 21 & 32 are selected, the flush piping in CC and

    design is pipe. Then the matrix appears as follows:

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    Project No: 220123 Basic Cost Accessories

    Customer: ABC Ltd. Excise/Custom 16.00% 8.00%

    Pump: CC Sales Tax 4.00% 12.00%

    Plans Flush PipingFlange Rating

    Pump Piping inBasic Cost Total

    11 CC/CZ SS 316 1/2" pipe 4,550.00 4,550.00

    21 CC/CZ SS 316 1/2" pipe 35,893.00 37,893.00

    32 CC/CZ SS 316 1/2" pipe 34,560.00 44,560.00

    Total Basic Cost 75,003.00

    Excise/Custom 12,000.48

    Total 87,003.48

    Sales Tax 3,480.14

    Net Basic Cost 90,483.62

    Cost of Accessories 12,000.00

    Excise/Custom 960.00

    Total 12,960.00

    Sales Tax 1,555.20

    Net Accessories Cost 14,515.20

    Total Cost 104,998.82

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    List of Accessories

    Temperature Indicator 2

    Pressure Indicator 1

    Pressure ControlValve

    0

    Level Indicator 0

    Level Switch High 0

    Level Switch Low 0

    Level Gauge 0

    Pressure Switch 0

    Pressure Switch High 0

    Pressure Switch Low 0

    Flow Indicator 1

    Flow Switch High 0

    Flow Indicator Low 0

    Strainer 0

    Cooler 0

    Cyclone Separator 0

    Reservoir 0

    Total 4

    There are special guidelines for using this sheet. Some colour codes are

    there to be considered s follows:

    Enter the CostThe cost of accessories should be entered only in thesecells.

    OptionalInstruments

    These instruments should be included only if specifiedby the customer.

    Cost is Included The cost of these instruments is included in basic cost

    Cost is Included,but optional

    The cost of these instruments is included in basic cost,but should be supplied only if specified by the customer

    Data cells No data should be entered in these cells.

    FormulasThese cells gives the output, do not make any changesin these cells.

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    6. Conclusion:

    The system has been designed to ensure proper selection of plans with its

    cost elements.

    The system designed can be more extensively used by the marketing

    department for selecting the types of flushing plans.

    This system will also be implemented in the Engineering design department

    as they also need to do the selection of plans.

    This matrix can be used by the costing department to determine the cost ofplans so that the calculation of any project becomes easier, accurate and

    consistent.

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    7. References, Websites &

    Bibliography:

    1. American Petroleum Institute Datasheets API 610 and API 682.

    2. Sulzer Pumps India Ltd. 32nd Annual Report 2005.

    3. Sulzer Pumps India Ltd. 33rd Annual Report 2006.

    4. www.sulzer.com

    5. www.sulzerindia.com

    6. www.google.com

    7. www.en,wikipedia.org

    http://www.sulzer.com/http://www.sulzer.com/http://www.sulzerindia.com/http://www.sulzerindia.com/http://www.google.com/http://www.google.com/http://www.en%2Cwikipedia.org/http://www.en%2Cwikipedia.org/http://www.en%2Cwikipedia.org/http://www.google.com/http://www.sulzerindia.com/http://www.sulzer.com/