SUMMER INTERNSHIP PRESENTATION

Organization
Gensol Engineering Pvt. Ltd.
presented by

Gaurav Prajapati
Class of 2019
Student of Post Graduate Diploma in Manufacturing Management

FACULTY GUIDE COMPANY GUIDE

Prof. S. Panandikar Dr. Vijay Chourasia
Professor General Manager
NITIE, Mumbai Gensol Group
1
 01 Objective

02 Methodology

TABLE OF 03 As-Is Analysis

CONTENTS 04 Traditional vs ABC Costing

05 Results

06 Value Stream Mapping

2
Objective Methodology Result Recommendation
Objective

Project Title

Identification of various cost elements in operating

manufacturing plant and determine the cost of
Solar Module Mounting Structures and Control
panel and perform cost analysis
Need of the Project:

• It will provide closer view of operating cost of the production

• It will help in identifying non-value adding activities in plant
• It will help in determining market price of the product
• Capacity planning will be done more accurately after it

3
 Objective Methodology Result Recommendation

Identify best
Identification
method by Data collection
of various cost Calculation & Comparison of
As-Is Analysis studying from different Result Analysis
involved in improvement Prices
different case sources
manufacturing
studies

4
Objective Methodology Result Recommendation
Identification of various cost involved
Direct Labour cost
Direct material Cost • Machine Operator
• Worker Requires in
Handling

Capital Expenditure Manufacturing Overhead

• Infrastructure Cost • Indirect Labour
• Machine & Tools • Raw material transportation
• Type Test Cost cost
• Lease Agreement Cost • Indirect material Cost
• Mess Setup Cost • Insurance Cost
• Powder Coating Plant Setup • Loan Interest Cost
Cost • Depreciation Cost
• Land Rent Cost
• Electricity Cost

5
Objective Methodology Result Recommendation
Data Collection

• Electrical, Finance,
Manufacturing • Indiamart and various websites

Office
Departments Internet

Chemical
Experts
companies
• Chemetall, Henkel, Nerolac, • Industry Expert like KD logistics,
Arham Scientific Lab etc. Factory Expert etc.

6
 Objective Methodology
Traditional vs Activity Based Costing
Traditional
It is the allocation of factory overhead to
products based on the volume of production
resources consumed. overhead is usually applied
based on either the amount of direct labour
hours consumed or machine hours used.
• It distributes all the overhead on the basis of
one cost driver only
• Better used where variety of products are less
• Less costly and less complex to apply
• Better suited for service industries
Result Recommendation
Activity Based Costing
Activity-based costing is a costing methodology
that identifies activities in an organization and
assigns the cost of each activity with resources to
all products and services according to the actual
consumption by each.
Companies implement activity based costing in
order to:
• Identify individual products that are
unprofitable.
• Improve production process efficiency.
• Price products appropriately, with the help of
accurate product cost information.
• Reveal unnecessary costs that can be
eliminated.
7
 Objective Methodology Result Recommendation
Product Cost : MMS
Indirect labour cost
Overhead
Raw Material Consumption:
Transporation Cost
• Annual need for coil: 18190 Tonne
• Annual need for Sheet: 1532 Tonne Indirect material
9%
22%

Travelling cost 16%

Insurance cost 5%
Raw Material Cost ₹ 1,22,26,48,450.04 6%
Loan Interest 13%
Direct Labour Cost ₹ 1,32,14,100.00 21%
Depreciation 0% 8%

Overhead ₹ 3,95,58,780.45 Land Rent

Electricity 1% 3%
total expense ₹ 1,27,54,21,330.48 Raw Material
Cost
Total Volume Direct Labour
19720.13629
(tonne) Cost
Overhead

96%
Product
Cost(Rs/Tonne) Expenses
8
 Objective Methodology Result Recommendation
Product Cost : MMS (Column & Rafter)
Indirect labour
Overhead Distribution cost
Transporation
• Annual need(full capacity) of steel for Column & Rafter= 16660 Tonne 7%
Cost
Indirect material
23%
16%
Travelling cost

5% Insurance cost
7%
Raw Material Cost ₹ 1,03,28,92,224.00
12% Loan Interest
Direct Labour Cost ₹ 1,26,00,000.00 22% 0% Cost
8%
Depreciation
Overhead ₹ 3,78,40,921.68 Cost
Land Rent
total expense(yearly) ₹ 1,08,33,33,145.68 Expenses Distribution
Overhead
Direct Labour Electricity
4%
Total Yearly Volume (tonne) 16659.552 Cost
1%

Product Raw Material

Cost
95%
Cost(Rs/Tonne)
65,027 Raw Material Cost Direct Labour Cost
9
Overhead
 Objective Methodology Result Recommendation
Product Cost : MMS( Hat)
Indirect labour cost
Overhead
Dimension of Hat- Transporation Cost
width=2(12+25+75)+40=264 mm
Indirect material
Length=3830 & 6420 mm 4%
cost
Thickness= 0.9 19% 27% Travelling cost

Insurance cost

8% 2% Loan Interest Cost

4%
Raw Material Cost ₹ 29,39,56,185.60 Depreciation Cost
10%
Direct Labour Cost ₹ 29,40,000.00 26% 0% Land Rent
Overhead ₹ 3,19,15,027.21 Electricity
total expense ₹ 32,88,11,212.81 Expenses
Total Volume (tonne) 4741. 10%
1%

Product Cost(Rs./Tonne)
69,351 89% Raw Material Cost
Direct Labour Cost
10
Overhead
 Objective Methodology Result Recommendation
MMS-Strut Indirect labour cost
Transporation Cost
Dimension of Strut- Overhead(strut) Indirect material cost
Width= 70+ 2(40+15)=180 mm Travelling cost
Length=3460 & 5195 mm 4% Insurance cost
Thickness=1.8 mm 19% 26% Loan Interest Cost
Depreciation Cost
Land & structure cost
8% 2%
Electricity
6%
Raw Material Cost ₹ 44,71,45,623.27
10%
25% 0%
Direct Labour Cost ₹ 42,00,000.00

Overhead ₹ 3,28,13,357.65
Expenses
total expense ₹ 48,41,58,980.92
Total Volume (tonne) 7212.026182
7%
1%
Raw Material Cost
Direct Labour Cost
Product Cost(rs/Tonne) Overhead

67,132 92%
11
 Objective Methodology Result Recommendation
Control Panel (11 KV)
Overhead Indirect labour cost

Dimension(mm): 11 kv 33 kv
Transportation Cost
1140*1980*360 Yearly raw consumption
Indirect material cost
Sheet Thickness: 2 mm (tonne) 225 280
5% 3%
Travelling cost
32%
Raw Material ₹ 25,89,67,998.00 22% Insurance cost

Land & structure

Direct Labour ₹ 1,59,76,800.00 cost
Loan Interest
5%
Overhead ₹ 5,48,83,260.80 21% 6%
6% Depreciation Cost
0%
Total ₹ 32,98,28,058.80 Electricity
Total unit of CP(11 KV) 900
Expenses
17%
Raw Material
5%
Direct Labour
Cost(Rs)/unit Overhead
78%
3,66,475
12
 Objective Methodology Result Recommendation
Control Panel (33 KV)
Overhead
Dimension(mm): Surface Area Yearly:
1200*2450*2450 11 KV: 13860 m2 Indirect labour cost
5% 3% Transportation Cost
Sheet Thickness: 2.5 mm 33 KV: 28800 m2
Indirect material cost
32%
22% Travelling cost
Raw Material ₹ 25,89,67,998.00 Insurance cost
Land cost
Direct Labour ₹ 1,59,76,800.00
Loan Interest
5%
Depreciation Cost
Overhead ₹ 5,48,83,260.80 21% 6%
0% 6% Electricity
Total ₹ 32,98,28,058.80
Total unit of CP(33 KV) 900 Expenses

17%
Cost/uni 5% Raw Material

t Direct Labour
Overhead

5,49,713 78%

13
 Objective Methodology Result Recommendation
Cost Comparison- Traditional vs ABC

Price: Rs/ Tonne Traditional vs ABC

Method Column & Rafter Hat Strut ₹70,000.00

Traditional ₹ 64,271.99 ₹ 63,862.75 ₹ 63,749.41 ₹69,000.00

₹68,000.00
ABC ₹ 65,027.75 ₹ 69,351.48 ₹ 67,132.17
₹67,000.00
Change(%) 1.176% 8.595% 5.306%
₹66,000.00

₹65,000.00

₹64,000.00
ABC is giving more accurate product cost.
₹63,000.00

₹62,000.00

₹61,000.00

₹60,000.00
Column Hat Strut

ABC Traditional 14
 Objective Methodology Result Recommendation
Break Even Analysis- MMS
CHART TITLE
Production cost/kg 64.68 Revenue Total Cost Fixed cost Total Cost Fixed cost
Selling price/kg 70 ₹900,000,000.00

Fixed Cost 45954600

₹800,000,000.00
Break Even Point (kg) 8631740
₹700,000,000.00

Break even Point(MT)- 8.63 ₹600,000,000.00

₹500,000,000.00
BEP = Fixed Cost/(Selling
price per unit- production ₹400,000,000.00
price per unit)
₹300,000,000.00

₹200,000,000.00
Time Taken to achieve Break
Even(months) ₹100,000,000.00

6 ₹- 15
0 2000000 4000000 6000000 8000000 10000000 12000000 14000000
 Objective Methodology Result Recommendation
Break Even Analysis- Control Panel(11KV)
Breakeven Chart- CP 11KV
350000000
• Production Cost/unit= 366475
• Selling Price/ Unit= 542600
• Fixed Cost= 72440000 300000000

250000000

Break Even Point(unit) 411

200000000

Time Taken to achieve Break Even (months) 150000000

6
100000000

50000000

0
0 50 100 150 200 250 300 350 400 450 500 550
16
Q(unit) Revenue Total Cost Fixed cost
 Objective Methodology Result Recommendation
Break Even Analysis- Control Panel(33 KV)
Breakeven Chart- CP 33 KV
250000000
• Production Cost/unit= 550000
• Selling Price/ Unit= 926000
• Fixed Cost= 72440000
200000000
• Break Even Point(unit)= 193

150000000

Time Taken to achieve Break Even (months)

100000000

4
50000000

0
0 20 40 60 80 100 120 140 160 180 200 220 240
17
Q Revenue Total Cost Fixed cost
 Objective Methodology Result Recommendation
VALUE STREAM MAPPING OF MMS (Column & Rafter)
Randomly
Raw Material PPC Dept. placed order Customers
Suppliers Order (Various Size)

Value Adding Time= 28 min/tonne

Non Value Adding Activities:
Average Total Storage time= 7 days/tonne
Average Material Handling time= 18 min/tonne

Setup Loading
Processing M
Unloading
S M
H
time H S
Material Material
Storage Handling
Storage
Handling C/T:
30 min
C/O:
10 min.
Workers:
2+1
Time
3.5 days 9 min 9 min 3.5 days
7 days
9.3 min 5 min 14 min. 9.34 min.18
 Objective Methodology Result Recommendation
VALUE STREAM MAPPING OF MMS (Hat & Strut)
Randomly
Raw Material PPC Dept. placed order Customers
Order
Suppliers (Various Size)

Value Adding Time= 54 min/tonne

Non Value Adding Activities:
Average Total Storage time= 7 days/tonne
Average Material Handling time= 6 min/tonne

Setup Loading
Processing M
Unloading
S M
H
time H S
Material Material
Storage Handling
Storage
Handling
C/T:
C/T: 30 min C/T:
2.5 C/O: 2.5
hours/truck 10 min. hours/truck

Time
3.5 days 3 min 3 min 3.5 days
7 days
9.3 min 8.7 min 54 min 9.3 min. 19
 Objective Methodology Result Recommendation
VALUE STREAM MAPPING OF MMS (AMADA)
Raw Material Randomly
PPC Dept. placed order Customers
Order
Suppliers (Various Size)

Value Adding Time= 168 min/tonne

Non Value Adding Activities:
Average Total Storage time= 7 days/tonne
Average Material Handling time= 2 min/tonne

Processing M Loading
Unloading
S M
H H S
Material Material
Storage Handling
Storage
Handling

C/T: C/T: C/T:

2.5 hours 6.2 2.5
Time: min/sheet hours/truck
Per tonne

3.5 days 1 min 1 min 3.5 days

7 days
9.3 min 168 min 9.3 min. 20
 Objective Methodology Result Recommendation
Relationship Chart
Rating Definition
A Absolutely Necessary
1. Fabrication(CP) E Especially Important Rating are given on the
E I Important basis of
2. Loading Area(fin. goods) E
O Ordinary Closeness OK • material handling
I O U Unimportant • Labour movement
3. Powder Coating Unit X E • Information movement
X Undesirable
O E E
4. Quality Lab I O U
E U U U
5. Panel Assembly O U X U
E U U E E
U It Displays closeness rating
6. Bus Bar Section E X U
O E U among all departments.
O
I • It is used in system
7. Raw Material(electrical) I U
A U U layout planning.
8. Unloading(raw mat.) U U • Used in improving and
I U checking system layout.
9. MMS Machine Area A
A
10. Raw Material(MMS) storage 21
THANK
YOU!

22