2011

Project Life Cycle Module-2

Praveen Kumar Mishra 134/C,Ruabandha Sector, Bhilai, Durg, CG 26/02/11

Project Life Cycle

Module-2

1. Draw up a feasibility report for this project. a) Technology and system feasibility As we are a PSC Sleepers manufacturer therefore the technology required for manufacturing these types of special sleepers are with us. Regarding the system, we stated in our earlier module that we have given some value addition to the design so as to facilitate the production schedule. Therefore the required technology and system granted us the permission to go ahead for this order. b) Economic feasibility Economically this project was feasible for us as we were facing the situation of under production due to lack of orders from Railway. Therefore due to the external environment this could be a profitable for us to use our spare time. Along with the external factors our internal factor also supported us to take this order. In fact sleepers manufacturing in India is a labour intensive unit and mainly our labour supported us as they became ready to manufacture these special sleepers out of their contract. c) Legal feasibility We are running sleepers manufacturing units under the patronage of Indian Railways thus we have to take prior approval from Indian Railways to manufacture any sleepers for any Purchaser other then Railways. This legal barrier might come into our way but due to lack/less order from Railways, they granted us the permission to manufacture and supply these special sleepers. d) Operational feasibility Operating these projects was not a difficult task as preparation of moulds and benches, Steel Reinforcement truss, production, inspection and dispatch were divided into separate units and after the first round of production to dispatch, every one became acquainted for their task. e) Schedule feasibility Due to the lack/less order we were running our factory only in two shifts 6am to 2 pm then 6pm to 2am, thus during the gap period of 4 hours between first and second shift we may produce these sleepers. We made plan to prepare 5 benches comprising three sleepers in a bench thus 15 sleepers could be manufactured in a day and this would be sufficient for us to complete the order within the delivery period. f) Market feasibility It was not needed to check about the market feasibility as we were executing this project as post order manufacturing. g) Resource feasibility We have all the resources for execution of this project viz. Raw Material, Moulds & Benches and labour for the production, inspection and dispatch. h) Financial feasibility We have state in our earlier module that fist we manufactured one trial sleeper and then after considering all the fixed and variable cost we quoted them. We sent our calculated price along with our profit margin to our head office and our Head Office approved it. Praveen Kumar Mishra 134/C, Ruabandha Sector, Bhilai, Durg (CG) 490006 Page 2

Project Life Cycle

Module-2

2. Include benefits of the project to the organization. a) Better efficiency: In fact Project management provides a roadmap that may be easily followed and leads to project completion. Once we know what is to be avoided and what is to be accepted it becomes easier to work efficiently. b) Customer satisfaction: If we get a project done on time and under budget, the client walks away happy. And a happy client is one well see again. Smart project management provides the tools that enable this client/manager relationship to continue. c) Effectiveness: The same project management strategies that allowed us to successfully complete one project may serve us many times over. d) Improved growth and development within our team: Positive results not only command respect but more often than not inspire our team to continue to look for ways to perform more efficiently. e) Greater standing and competitive edge: This is not only a good benefit of project management within the workplace but outside of it as well; word travels fast and there is nothing like superior performance to secure our place in the marketplace. f) Opportunities to expand our services: A by-product of greater standing. Great performance leads to more opportunities to succeed. g) Better Flexibility: Perhaps one of the greatest benefits of project management is that it allows for flexibility. Sure project management allows us to map out the strategy we want to take see our project completed. But the beauty of such organization is that if we discover a smarter direction to take, we can take it. For many small-to-midsize companies, this alone is worth the price of admission. h) Increased risk assessment: When all the players are lined up and our strategy is in place potential risks will jump out and slap us in the face. And thats the way it should be. Project management provides a red flag at the right time: before we start working on project completion. i) Increase in Quality: Goes hand-in-hand with enhanced effectiveness. j) Increase in Quantity: Often the result of better efficiency, a simple reminder regarding the benefits of project management. 3. Mention how the project fulfills the needs and requirement of the organization. We were facing lack of order from Railway and running only two shifts instead of three shifts and during this slack period any order was needed to fulfill the fixed cost of the organization and this order came as a life blood for our company. 4. Mention the cost associated with the project. There are five types of costs in any project: a) Fixed Cost Bench and mould for the casting of these sleepers were major fixed cost. We altered the old benches suitable for the mould and moulds were newly fabricated. All other equipment Praveen Kumar Mishra 134/C, Ruabandha Sector, Bhilai, Durg (CG) 490006 Page 3

Project Life Cycle

Module-2

b)

c)

d)

e)

were already established thus they may not be treated as fixed cost however for calculating the cost for sleepers we took the running/Used hours of other machineries like vibrators, Mixture machine, concrete bucket, EOT, steam chambers, boilers, curing tanks ,lifting tackle etc. Variable Cost Major variable cost was the raw material cost viz. Cement, sand, Metal Chips, steel reinforcement. Apart from it Coal, Electricity, wooden batons & labours are the other variable cost. Direct Cost Due to lack of Railways order we were running our factory in only two shifts 6am to 2 pm and then 6 pm to 2 am. We planned to produce these sleepers between these two shifts i.e. 2pm to 6pm. In our factory, beyond a minimum target production, labours are eligible for incentive payment as per agreement. For this extra time we decided to pay direct incentive to our labours. Apart from it we shall have to pay extra payment to our Production engineer for these 4 hours and truss maker also. These were our direct cost. Indirect Cost Cost of General Manager, Project Manager, Utility In-charge, Store In-charge, Quality Incharge may not be directly calculated as along with these sleepers production we were producing our conventional sleepers also. Thus for costing we took a certain percentage of their salary. These costs were indirect cost. Sunk Cost Entire mould cost, bench conversion and re-conversion cost and roller bed conversion and re-conversion cost are our sunk cost because these mould would be of no use after completion of production. Similarly the conversion and re-conversion is our sunk cost.

5. Lastly, recommend whether the project should be sanctioned of not? Analyzing the feasibility report, benefits of this project and the requirement of this project for the organization, the project should be sanctioned.

Praveen Kumar Mishra 134/C, Ruabandha Sector, Bhilai, Durg (CG) 490006

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