MANPOWER COST USE FOR THE OPERATION.

1.Three shifts three man.

2. per man wages is Rs.6000/- per month .
3. 3 person wages for one month is Rs.18000/-

COST OF MACHINE
1. power of machine is

= .5hp

2.electricity charge is

=.37285 KW

3. For one day

=.37285*20

4.Unit

=7.457

5. electricity cost is

=Rs.8 /unit

6. one day electricity consumption =7.457*Power consumed per month =60*30

7.Power consumed per month=60*30=1800/8. maintenance cost per month
9. lubrication cost

= Rs.50/-

= Rs.50/-

10. Total machine cost per month = Rs 1900 /11. Total running cost per Year = Rs 1900 x 12 =22900

COMPARISION
1. Worker cost for one year

= Rs 216000/-

2.Machine cost for one Year = Rs 22800/3.Saving per Year (216000 - 22800) = 193200 /-

CONCLUSION
1.In every condition the machine is beneficial
2. The machine gives the profit of company.
3.cost is reduced of the product.
4.One time investment on machine is Rs 25K.

PROJECT:COST REDUCTION OF COMPRESSED AIR:GOAL STATEMENT :

1. Consumption to be reduced from 45 K watts to 38 K watts.
2. Primary Metric:- Energy consumption reduction.
3.Secondary Metric:-Higher & constant supply of C/air to machine
- Maintenance cost reduction.
- Up Time improvement.

OPPORTUNITY STATEMENT :
Energy consumption is too high to run the 6 No air compressors.
If it is reduced , the cost of compressed air
shall come down

PROJECT SCOPE :
-Screw type Technology / Equipment to be
used in place of Horizontal to save the energy and improve the output..

OUT OF SCOPE:
- Consumption
- Manpower

- Project Plan:- (Key activities and dates to achieve them)

Key Activities:
M

Timing:

Mapping and measurement of problem

2 days

Applying 7 Tools to find Red X of the problem

2days

Trials for confirmation of root cause

1Wk.

Action

2Wk.

D:

Result Confirmation and standardization

1Wk.

I::
C:
Resources (Specific resources (budget, support) to be able to fulfil these key activities)
General:M:
E:
D:

I:
C:
Data from costing department
Support from purchase department for timely procuring equipment.

Su

erent trials.

pp
ort

Support from Commercial & Engineering departments for action at right time & Budget.

fro
m
pro
du
cti
on
&
En
gin
eer
ing
de
par
tm
ent
s
for
car
ryi
ng
out
diff

Support from Engineering / design department for drawings & documents

COST REDUCTION
Cost reduction directly reduces the cost of production of products hence helps to maintain the critical success
factor ( quality, cost, delivery
and service) so as to be competent In market.
There are no. of factors which affect the cost of production.
Cost of production can be reduced by the application of
Different methods.
By introducing new technology.
By changing material
By utilyzing maximum asset
By systematic
operation
Among all the above methods, the best is one which can
reduce cost significantly without lowing/ decreasing the
quality of product so to make a balance between cost and
quality which basic need for market competition is introduction of new technology.

ANALYSIS

After analyzing, the above fishbone diagram we may

concluded that the best thing to reduce the cost of
production of compressed air is to change the technology ie
to introduce an new technology because other equipment, material changing factor environment & manage all those
may reduce the cost of production but not significantly so as to make competent in market so the better option is to
change technology because we have a compressor technology those specification is as follow.
No of compressor

:-1

Electric power required

:-37 KW

Output

:- 240 CFM

INTRODUCTION OF COMPRESSORS
An air compressor is a device that converts power (usually from an electric motor, a diesel
engine or a gasoline engine) into potential energy by forcing air
into a smaller volume and thus increasing its pressure.
The energy in the compressed air can be stored while the air remains pressurized.
The energy can be used for a variety of applications
usually by utilizing the kinetic energy of the air as it is depressurized.

PRESENT TECHNOLOGY OF COMPRESSOR :This is the basic specification of compressor in company.

Type of compressor:-

Reciprocating

Drive type :-

Automation

Number of Compressor:- 6
Pressure reduced :-

8 kg/cm2

Required demand :-

about 200-250 CFM

REQUIREMENT
Motor requires 7.5 KW electricity/comp.
Output = 217 CFM

ANALYSIS OF PRESENT TECHNOLOGY

For the required pressure and volume of compressed
air currently company has installed six horizontally
type reciprocating compressor these all are automatic operated.
But each compressor required 7.5 KW electricity
power which costs annually ( 7.5 * 8 * 24 * 350) Rs
5,04,000 /- and gives total output is 217 CFM (cubic ft per minute).
Any how if we install (use) any other new compressor
technology which requires less electric power &
produces Comparatively more out put then the cost of
production of compressed can be reduced significantly.

COMPARISON BETWEEN
RECIPROCATING & SCREW COMPRESSOR:
Reciprocating

screw Compressor

compressor
1) It can deliver large pressure ratio of 5
in single stage & upto 300 in multistage
compressors.
2) It is suitable for delivering flow rates
upto 30 m3/min
3) Pressure rise is due to variation in
volume of cylinder by means of
moving boundary formed by piston.
4) These are either air or water cooled

1) It can deliver pressure ratio upto

2.5.
2) It can deliver large volume flow
rate from 0.5m3/min upto 1500m3/min.
3) The rise in pressure is either due
to back flow of air as in case of
root blower or due to decrease in volume & back flow as
in case of vane blowers.

to reduce the work of compression.

4) These are not cooled.

5) These run at slow speeds.

5) These run at high speeds.

6) For given flow rate, Weight is large.

7) Lubrication system is complicated.

6) For given flow rates, its Weight is

comparatively lower.
7) Lubrication requirements are

CONCLUSION:-

OPERATION

From the analysis of above brain storming we got

1) By introducing new

the better methods/way to reduce the cost of

technology.

production of compressed air significantly & that is

2)

introduction

By

using

of

new

technology

in

each

of

automatic

compressor other methods may reduce the cost of

control.

production but not significantly so better one is

3)

By

using

introduce the new technology.

systematic

COMPARISON TABLE:SN

Factor

compressor
(6 pcs)

compressor
(1 pcs)

Remark

Reciprocating

Electric power

45 KW/hr

38 KW/hr

Screw comp. saves 7

KW/hr

Cost of electric

Rs. 30,24,000/-

Rs. 25,53,600/-

power per year

Out put

Screw com. Saves

Rs. 4,70,400/-

217 CFM

240 CFM

Screw com. Produces

23 CFM more out put.

Service charge

Rs. 60,000/-

Rs.50,000/-

Screw com. Saves

Rs. 10,000/- per year

Spare parts

Work space

Rs. 1,57,000/-

Rs. 25,000/-

Screw com. Saves

Per year

per year

Rs.1,32,000 per year

Required more

Required less

Screw com. Save floor

work space

work space

area.

CALCULATIONS :Cost of electric power

Assuming that total working hour in a day is 24hr & total
working days in a year is 350 days. Cost of electric power is Rs.
8/unit

For Reciprocating type:Total units = 45 * 1 = 45 units

For 1 day = 45 *24 = 1080 units
For 1 year = 45 * 24 * 350 = 378000 units
Cost For 1 year = 45*24*350*8 = Rs.30,24,000/-

For Screw type:total unit = 38 units

For 1 day = 38 * 24 = 912 units
For 1 year = 38 * 24 * 350 = 319200 units
Cost for 1 year = 319200 * 8 = Rs. 25,53,600/-

[1 unit = 1KWhr]

RESULT ANALYSIS
1) Screw comp.

2)Reciprocating comp.

Factor
Service
Spare parts

Rs. 50,000/- Rs. 25,000/-

Rs. 60,000/-

Rs. 25,53,600/-

Rs. 1,57,000/- Rs. 30,24,000

Rs. 26,28,600/-

Rs. 32,41,000/-

Electricity

Total

Total saving After using screw type comp. =Rs.32,41,000 - Rs.26,28,600 =Rs.6,12,400/yr

Percentage saving = ( 612400)/(3241000) = .188 = 18.8 % = 20% (assumed)

Cost of production for 1 cap = 20 paisa(company
data)
Now 20% of 20 = (20 * 20/100) = 4 paisa.
Hence by installing screw typenew technology
compressor the cost of production of one cap can be reduced by 4 paisa per cap.

FINAL CONCLUSION :The installation cost of a screw compressor is about

Rs. 6,00,000. and and after installation company
can make a saving of Rs. 6,12,400/- annually,
means the investment on installation cost can paied back with in a year.
Also it reduces cost of production by 4 paisa per cap.

THANK
YOU