The project is a study of the cost structures in steel manufacturing company. It has been found that the heavy equipments which are supporting the mechanical maintenance services in the process of steel production are not put to use at the optimum level and there is some idle capacity left after the specified purpose. The particular department which handles these expensive equipments wants to recover this idle capacity by letting these items on hire to the contract works support.
In the process of study we understood the working of various departments, especially MSG (mechanical). We also experienced the environment of a manufacturing unit.
The study is explanation of the cost patterns of the equipments under the study.
Finally an exhaustive statement is placed which summarizes the project study results.
[...] Chain Blocks Basis of calculation Use regular Expected life (when acquired) 5 years Spares Hand chain wheel Rs.426 Hand chain (Rs.650/meters, for 8 mtr) Rs.5200 Load chain wheel Rs.778 Load chain( 8 meters) Rs.400 Friction wheel Rs.73 Bottom block assembly Rs.783 Total 7660 Per day 20.98 capacity Cost of acquisition 3 tons 5 tons 10 tons Amount (Rs.) General information It is vulnerable equipment; the chances of damages are high when used without care ii) Every year 5 Chain Block has been replaced out of 150 set iii) Data provided by MSG (MECH) Case1 PARTICULARS Amount (Rs.) (Per day) 3tons 5tons 10tons Maintenance Asset value recovery** Add: - Margin Total *asset value recovery 3t 5t 10t cost Per day backup (if within the one year)* Per day backup (if within the five year) Case 2 PARTICULARS Amount (Rs.) (Per day) 3tons 5tons 10tons Maintenance (assume) Asset value recovery** Add: - Margin Total We have taken replacement cost every year in the Ratio of 2:2:1 for 5&10 ton respectively Jacks Basis of calculation capacity 50 ton 100 tons 200 tons Use (per month) 5 times 4 times 2 times Cost of acquisition Expected life (when acquired) 10years 10years 10years Maintenance (once a year) Kit ii) Miscellaneous Exp.(assume) Rs.500 Rs.500 Rs.500 General facts It is vulnerable equipment; the chances of damages are high when used without care ii) Life of the asset is not considered for the calculation of recovery iii) Operational cost is assumed to be nil iv) For calculation of maintenance cost use is considered Data provided by MSG (MECH) PARTICULARS Amount (Rs.) (per day) 50tons 100tons 200tons Maintenance ( times /month) Miscellaneous Exp (assume) asset value recovery** Add: - Margin Total **asset value recovery Cost Per day backup Pneumatic winch Basis of calculation CAPACITY - 2 TONS Use (per month) 5 Times Cost of acquisition Rs Expected life (when acquired) 12 years Maintenance (once a year) Rs General information It is vulnerable equipment; the chances of damages are high when used without care ii) Use is considered PARTICULARS Amount (Rs.) (Per day) 2tons Maintenance 16.00 Asset value recovery** Add:- Margin Total 355.20 **asset value recovery cost per day backup 277.78 Diesel Winch Basis of calculation CAPACITY-5 TONS Cost of Equipment Rs.7,50,000 Expected life (when acquired) 10 years Maintenance (yearly) Rs.10,000 Diesel Consumption 20 litres/hour @ Rs.30 Breakdown (once a year) Rs General information Use is regular ii) One day is two shifts iii) Book value is nil as per records. [...]
[...] SAFETY & SERVICES Business overview Processing units across steel SBU require a variety of common products and services vital for their functioning. In addition to this, they need technological services and solutions, infrastructure and asset management services for efficient management of their business. Shared services cost center is the custodian and supplier of such products, services and support to steel division. The major product produced and distributed by shared services are-electrical power, oxygen and other industrial gases, process steam and cold blast air for blast furnaces. [...]
[...] Subsidiary / Associates / JVs The Tinplate Company of India Ltd Tayo Rolls Ltd Tata Ryerson Ltd Tata Refractories Ltd Tata Sponge Iron Ltd Tata Metalliks Ltd Tata Pigments Ltd Jamshedpur Injection Powder Ltd TM International Logistics Limited Indian Steel and Wire Products Dhamra Port TRF Ltd Jamshedpur Utility and Service Company Hooghly Met Coke and Power Co Tata Blue Scope ASSOCIATES & SUBSIDIARIES - Overseas Lanka Special Steel Limited Sila Eastern Company Limited Nat Steel Asia Millennium Steel, Thailand To seize the opportunities of tomorrow and create a future that will make us an EVA positive company To be on the look out for and shape the opportunities to get the first- mover advantage and remain ahead of competition. [...]
[...] Testing & certification of Jacks COMPRESSOR Basis of calculation:- For Maintenance:- 1). Data provided by MSG (MECH) 2). We have taken consideration in per shift of compressor used. 3). Actual Price of component which used for maintenance taken from Manual 4). Contractor labour charge per shift Rs. 150/-(for Maintenance) 5). Tata Steel mechanic charge per hour Rs. 150/- (for Maintenance) 6).for calculation of Assets value recovery, we have taken 100% Replacement Cost. For Breakdown:- 1). Lump some yearly Rs. 20000/- for one compressor (according to past experience) For Operation:- 1). [...]
[...] MSG (Mechanical) ORGANISATION STRUCTURE ROLES AND FUNCTIONS OF DEPARTMENT The role of MSG (Mechanical) is to provide Maintenance Services Support to different departments of TATA STEEL. Basic functions includes:- Executing unplanned outages / breakdowns at steel works. Executing planned Shutdowns as demanded by the customers. Planning & Executing Major Shutdown jobs of different depts. Taking up turn-key jobs at different departments Relining Blast furnace, Major overhauls etc. Providing equipment services like compressors, cranes, welding machines & other such equipments. ROLE OF DIFFERENT SECTION:- 1). [...]
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