inventort management ppt

1. INVENTORY MANAGEMENT OF
AN ARC WELDING MACHINE
“ TO MANAGE, WE MUST MEASURE FIRST”
F.W.TAYLOR

2. FLOW OF PRESENTATION
 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

3. OBJECTIVE
 To study the current situation of coil inventory for an arc
welding machine in company and provide solutions which would
result in cost benefits.

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

5. ABOUT COMPANY

6.  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.

7. WORKSHOP LAYOUT

8. PRODUCT STUDY

9. 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.

10.  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

11. CURRENT SITUATION OF COIL
INVENTORY OF ARC WELDING
MACHINE

13. 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)

14. 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
6
1.5*6=9
Choke
Taped
1.5
OR
Untaped
1.1
1.1*6=7
Feedback
1.5
1
1.5*1=1.5
DC Coil
2
3
2*3=6

15. 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.

16. 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

17. TIME STUDY
Primary coil
PROCESS
TIME
Manufacturing
60 min
Insulation
10 min
Drying
300 min

18. TIME STUDY CONTINUES.....
Secondary coil
PROCESS
TIME
Manufacturing
45 min
Insulation
12 min
Drying
300 min

19. 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

20. TIME STUDY CONTINUES.....
 Feedback:
One Feedback coil is used in the product and the time required
to produce it is 20 minutes.
 DC coil:
DC coil is another form coil used in welding machine whose
main function is to convert the AC current into DC current. The
time required to produce a DC coil is 60 minutes + 300 minutes
of drying, and in a product 3 units of DC coil are used so
manufacturing time becomes 180 minutes.

21. TIME STUDY CONTINUES.....
 Assembly time
: Assembly time is the time required to assemble
all the parts and form a final product. The total time required to
assemble is 300 minutes.
 So from above Time Study we can see that time required for
drying is more as compared to manufacturing of coil.

22. PROBLEMS
1. Currently company is delivering 5 Arc welding machine in 3 days
working 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.

23. 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

24. NEW LAYOUT DESIGN

25. THANK YOU