inventory management group3 alacirity
Post on 13-Jul-2015
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Objective of Project
Scope of Project
About Company
Workshop Layout
Product Study
Current Situation of Coil Inventory in
Company
Cost Analysis of Coil Inventory
Solution and Benefit
FLOW OF PRESENTATION
OBJECTIVE
To study the current situation of coil inventory for an arcwelding machine in company and provide solutions which wouldresult in cost benefits.
Company manufactures different types of welding machine.
1. Arc Welding Machine
2. TIG Welding Machine
3. MIG Welding Machine
4. IGBT Welding Machine.
5. Thyristor Welding Machine
o It has two workshops . In one workshop it produces IGBT and Thyristor welding machine and in another Arc , TIG , MIG welding machine.
o Company works on made to stock principles.
ARC WELDING MACHINE
Following are the major components of Arc welding machine
Following components contributes 60% of total cost of the manufacturing of single unit
1. Primary coil.
2. Secondary coil.
3. DC coil.
4. Choke coil.
5. Feedback coil.
Other components cost 40% of total cost of manufacturing.
Other components include
1. Fan
2. Diode
3. Switch
4. Socket
5. Knobs
6. Indicator lamp
7. Junction box
8. Shunt
9. Heat sink
10. Side and top cover
11. RC card
12. Wires
13. Handles
14. Other small components
COST OF MATERIAL
Material cost
This cost includes the amount of money incurred due to the consumption of material.
Company uses Aluminium for the coils.
Hence
Material cost = (Rate of material per Kg) * (Material consumed
in Kg)
Material Requirement Study
PARTICULARS MATERIAL IN KG/UNIT OF COIL
NO OF UNITS OF COIL / UNIT MACHINE
TOTAL AMOUNT OF MATERIAL CONSUMED
Primary coil 3.3 3 3.3*3=10
Secondary Coil 3 3 3*3=9
Choke
Taped
Untaped
1.5
1.1
6 1.5*6=9
OR
1.1*6=7
Feedback 1.5 1 1.5*1=1.5
DC Coil 2 3 2*3=6
1. Hence, the total amount of material required for coil of single unit of Arc welding machine
= 10+9+7+1.5+6
= 33.5 Kg
2. Now, the rate of Aluminium per Kg is Rs. 250
3. Hence, the cost of material consumed per unit of Arc welding machine
= 33.5 * 250
=Rs 8400 / unit.
4. Company maintains coil inventory for 10 units of Arc welding machine at any given point in time. Hence the cost of inventory is
= 8400*10 + Insulation cost + space cost + Electricity
cost + varnish cost
= 84,000+ Insulation cost + Space cost + Electricity cost +
varnish cost
>Rs. 84,000
TIME STUDY CONTINUES.....
Secondary coil
PROCESS TIME
Manufacturing 45 min
Insulation 12 min
Drying 300 min
TIME STUDY CONTINUES.....
Choke
As the below time is to produce one unit in a single machine 6 units of choke is
required, so the total time required to produce becomes 6 hrs and 3 hrs
TYPE TIME
Taped 60 min + 300 min Drying time
Untaped 30 min + 300 min Drying time
TIME STUDY CONTINUES.....
Feedback:
One Feedback coil is used in the product and the time requiredto produce it is 20 minutes.
DC coil:
DC coil is another form coil used in welding machine whosemain function is to convert the AC current into DC current. Thetime required to produce a DC coil is 60 minutes + 300 minutesof drying, and in a product 3 units of DC coil are used somanufacturing time becomes 180 minutes.
TIME STUDY CONTINUES.....
Assembly time
: Assembly time is the time required to assembleall the parts and form a final product. The total time required toassemble is 300 minutes.
So from above Time Study we can see that time required for drying is more as compared to manufacturing of coil.
PROBLEMS
1. Currently company is delivering 5 Arc welding machine in 3 daysworking on one machine keeping the other machine idle.
2. Now if we consider the time required to produce one unit of
Arc welding machine in totality it takes 2 days on single
machine.
3. Hence the company has stocked inventory for 10 machines.
SOLUTIONS
If we use both the machine to produce coils, it will reduce coil manufacturing time but still bottleneck will occur at drying. So to avoid this, keep a buffer stock inventory for 2 machines rather than 10.
Use your 2nd machine which is kept idle
Implement a fan or a blower so that the drying time is reduced(will not cost more than 5000)
Relocate sheet cutting machine to coil shop (space available due to reduction in inventory)
A 100 square feet area of sheet cutting shop can be rented out and can earn around Rs. 20000/month
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