INVENTORY MANAGEMENT OF AN ARC WELDING MACHINE

“ TO MANAGE, WE MUST MEASURE FIRST” F.W.TAYLOR

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.

SCOPE

The project is concerned with the coil inventory management of arc welding machine.

ABOUT COMPANY

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.

WORKSHOP LAYOUT

PRODUCT STUDY

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

CURRENT SITUATION OF COIL INVENTORY OF ARC WELDING MACHINE

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

Primary coil

PROCESS TIME

Manufacturing 60 min

Insulation 10 min

Drying 300 min

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

NEW LAYOUT DESIGN

THANK YOU