Technical AnalysisTechnical AnalysisPROJECT MANAGEMENT

BY :-•MEHA AGARWAL – 1671•NEHA SINGHAL – 1680

PGDBM (A) – (2010-12)

BY :-•MEHA AGARWAL – 1671•NEHA SINGHAL – 1680

PGDBM (A) – (2010-12)

Project Management

Project Project feasibility DPR

Identification formulation analysis

Market analysis

Technical analysis Financial analysis

Economic analysis

Technology

Technology is the usage and knowledge of tools, techniques, crafts, systems or methods of

organization in order to solve a problem or serve some purpose. 

The term can either be applied generally or to specific areas: examples include construction

technology, medical technology, and information technology

Technology

Choice of Technology

• It is influenced by a variety of considerations:-– Plant capacity;

– Principal inputs;

– Investment outlay & production cost;

– Use by other units;

– Product mix;

– Latest developments;

– Ease of absorption; etc.

Appropriateness of Technology

• It should be evaluated in terms of the following questions:-– Whether the technology utilizes

local raw materials?– Whether the technology utilizes

local manpower?– Whether the goods & services

produced cater to the basic needs?– Whether the technology protects

ecological balance?– Whether the technology is

harmonious with social & cultural conditions?

Technical Analysis

• It represents study of the project to evaluate technical & engineering aspects when a project is being examined & formulated.

• It primarily covers the following aspects of a project:– Plant capacity;– Production technology;– Machinery & equipments;– Plant structure & civil works;– Work schedule;– Plant location & site selection;– Material inputs & utilities;– Product mix;– Environmental aspects; &– Project charts & layouts.

Plant Capacity

• This decision is influenced by a number of factors:-– Technology employed;– Input constraints;– Market conditions;– Investment cost;– Availability of resources;– Government policy; etc.

• Plant capacity may be defined in two ways:-– Feasible normal capacity; &

– Nominal maximum capacity.

Plant capacity or production capacity is defined with the volume or number of units

that can be manufactured during a given period.

Production Technology

• Various considerations in the selection:-– Plant capacity;– Major inputs;– Investment outlay & production

cost;– Technology used by competitors;– Product mix;– Technological developments; &– Ease of absorption.

• Technology can be acquired from outside sources in three different ways:-– Licensing of technology;– Purchase of technology; &– Joint venture agreement.

The selection of an appropriate production technology is an important management

decision.

Machinery & Equipments

•The requirement of machinery & equipments for a project is dependent on the:-•Plant capacity;•Production technology; &•The type of project.

•Following procedure to be followed, while determining the requirements of machinery & equipments in a manufacturing industry:-

•Estimate the production levels over time;•Describe the various machining & other operations;•Calculate the machinery hours required for each type of operation;•Select the machinery and equipments required for each operations.

Plant Structure & Civil Works

• Project analyst must estimate the requirement of structures & civil works for the project.

• Structures & civil works may be broadly divided into three categories:-– Site preparation &

development;

– Buildings & structures; &

– Outdoor works.

Work Schedule

The main purpose of preparing work schedule is to anticipate problems likely to arise during

the installation phase & support possible ways for coping with them; to establish the phasing of investments according to the availability of finances; and to develop a plan of operations

covering the initial period.

Plant Location & Site Selection• Location – It refers to

a fairly broad area like a city, an industrial zone, or a coastal area.

• Site – It refers to a specific piece of land where the project would be set up.

• The choice of location & site follows an assessment of:-

– Demand;– Size; &– Input Requirements.

• Process:-– Defining multiple

location objectives;– Identifying relevant

decision criteria;– Relating the objectives

to the criteria;– Generating relevant data

to evaluate the alternative locations; &

– Selecting the best location.

Factors Affecting Location & Site Decisions

• Availability of raw material;• Nearness to the potential market;• Near to the source of operating requirements like

electricity, disposal of waste, drainage facilities;• Supply of labor;• Transport & communication facilities;• Integration with other group of companies;• Suitability of land & climate;• Availability of housing, other amenities & services• Local building & planning regulations;• Safety requirements;• Others like low interest on loans, special grants, living

standards; etc.

Plant Location Models

There are various methods available for selecting ideal sites for plants. The most popular methods for the evaluation of plant location are-

• Factors Rating Method;• Centroid Method;• Point Rating Method;• Break-even Analysis; &• Quantitative Factor Analysis.

Material & UtilitiesThe materials & other inputs can be divided

into four main categories:-

• Raw Materials;

• Processed industrial materials & components;

• Auxiliary materials & Factory supplies; &

• Utilities.

Product Mix

The project manager has the choice between a broad range or a shortened product mix from a

study of market requirements & firm’s ability to offer variety of products.

• Expansion strategy – increases product range.

• Retrenchment strategy – decrease product range.

Environmental Aspects

• A process may cause environmental pollution in various ways: it may throw gaseous emission; it may produce liquid & solid discharges; it may cause noise, heat, & vibrations.

• The key issues that need to be considered in this respect are:

– What are the type of effluents & emissions generated?;

– What needs to be done for proper disposal of effluents & treatment of emissions; &

– Will the project be able to secure all environmental clearances & comply with all statuary requirements.

Plant layoutPlant layout is the physical arrangement of industrial facilities. It involves the allocation of space & the arrangement of equipment in

such a manner that overall operating costs are minimized.

D D

D D

G G

G G

G G

M M

M M

M M

A A

A A

L

L L

L L

L L

L

Principles of Plant Layout

• Principle of Minimum movement;• Principle of sequence;• Principle of security;• Principle of utilization of space;• Principle of flexibility;• Principle of minimum investment; &• Principle of integration.

Types of Plant Layout1. Product layout

2. Process layout

3. Fixed Position/ Stationary layout

Product Layout / Line Layout-• Layout that uses standardized processing

operations to achieve smooth, rapid, high-volume flow.

• Here machines are arranged according to the needs of product & in the same sequence as the operations are necessary for manufacture.

Product LayoutProduct Layout

Process layout-• Layout that can handle varied processing

requirements• Here all machines performing similar type

of operations are grouped together at one location in the process layout. Thus here facilities are grouped together according to their functions. E.g. all drilling machines are located at one place known as drilling section.

Process Layout

Fixed Position / Stationary layout-

• Layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed. E.g. construction of DAMS.

• The product, because of its size and/or weight, remains in one location and processes are brought to it.

Fixed Position Layout