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379th PROJECT MANAGEMENT COMMITTEE
                      MEETING
Held on:      May 14, 2005



At:           1100 hrs


Venue:        Conference Room



Attendance:   Except GM Spinning, all members present, MD in chair.
AGENDA POINTS
KTML
                                                SPINNING
Spinning Performance Report
Month : May 2005


               Period ---->      Unit of           May 06 to May 12                May 01 to May 12        Remarks
                               Measurm ent                                    Desired        Actual
        Particulars                           Desired   Actual        %                  Qty        %

Utilization
Installed Capacity - Spindle       No                     79,520                         79,520
              Shifts worked        No             21         21                    36       36
               Utilization         %           99.00                  98.72     99.00              97.90

Working Efficiency
            Average Count          No                      52.55                          51.67
             Average OPS                        2.82        2.78                 2.86      2.78
       Working Efficiency          %           94.09                  92.59     94.07              91.63

Raw Material Issue
                  Pak Ctn       Kgs   /   %               59,231    38.30               106,484    38.38
                 Impt Ctn       Kgs   /   %               69,656    45.04               126,379    45.55
                     PSF        Kgs   /   %               25,763    16.66                44,584    16.07
                                Kgs   /   %              154,650   100.00               277,447   100.00

Yarn Production                 Kgs / %                  130,946      84.67             224,520    80.92
    Hard Waste                  Kgs / %                      906       0.69               1,501     0.66
    Yarn - B. Grade             Kgs / %                      634       0.48               1,089     0.48
Period:                             06.05.2005 to 12.05.2005


Maintenance Spinning: Following intimated:
   Except one Orion – M all Auto Winder spindles are serviceable. M/s
   ACMA TEX dispatched Switcher Box which would be received by
   Monday.
   Motor Tripping in Section IV; discussed. 30 KW Motor to replace
   22 KW motor being used for 18000 RPM on 22 Count frames.
IT-OUTSOURCING
How to reduce searching cost
  Select a trust worthy
  vendor.
  Vendor should be very
  cooperative.
   Interviewing the vendor’s
  previous & current clients.
IT-OUTSOURCING
How to reduce contracting cost
 Vague ideas from the contract
  should be eliminated.

 Contract should be flexible.
IT-OUTSOURCING
Necessary clauses in IT outsourcing
   contract
   Evolution clauses apply both to
   the price and the technological
   flexibility as bench mark
   clauses.
   Reversibility clauses are about
   either material reversibility or
   human reversibility.One gives
   the company the options to buy
   premises from the vendor and the
   other allows the company to hire
   employees from the vendors.
IT-OUTSOURCING
Hidden Cost #2
Transitioning to the Vendor
    Elusive cost
    Transition time is(1 year)
    70% was no longer than 10
  months
IT-OUTSOURCING
Determining Transition
  Cost
Transition cost are elusive
  A company incurs as long as the
  vendor has not completely taken
  over the internal IT department.

   The time that internal employee
      spent helping the vendor
          transition cost.
IT-OUTSOURCING
Cost that stem from disruption and from
  vendor's inability to react as quickly
  and appropriately as the internal
  department the beginning of the
  contract are transition costs.
 Reducing transition Cost
  The first step in decreasing transition
  cost's to be aware of it.
  Companies would be well advised to avoid
  outsourcing activities that a
  idiosyncratic an to keep IT employees in
  house the company should know what it
  wants from the out source
  activity.Having experience with IT
  outsourcing
IT-OUTSOURCING

 Cost#3 Managing the
 effort
This the largest category of
 the hidden cost
It covers three areas:
 Monitoring that IT vendors con
 fulfill there contractual
 obligations
IT-OUTSOURCING

 Bargaining with IT vendors.
 Negotiating any needed contract
 changes.
Determining the cost of
 managing Vendor
 Unlike out sourcing fees vendor
 management costs for IT
 outsourcing are not readily
 apparent.
IT-OUTSOURCING

Management costs purely
internal companies don’t take
management cost into account
until they become visible so it
create problem.
IT-OUTSOURCING

0.16
0.14
0.12
 0.1
0.08
0.06
0.04
0.02
   0
        Less than $10 million Greater
       $10 million to 100 than $100
                    million   million
IT-OUTSOURCING
Reducing the cost of managing
  vendor
  IT outsourcing experiences
  reduce the cost of managing the
  relationship the more the company
  the more a company deals with the
  IT vendor the faster it can judge
  the vendors performance.
  Trust should be cultivated in
  the vendor relationship this will
  narrow the gaps between the both
  parties.
IT-OUTSOURCING
The fourth hidden cost comes
 from switching vendors or
 reintegrating IT activities
 internally:
 Determine the cost of transition
 after outsourcing.
 This involves finding the
 vendor, drafting a new contract
 and transitioning resources.
IT-OUTSOURCING
 Reintegrated cost involves
 building a new internal
 activity from scratch.
Reducing the cost of
 transitioning after
 outsourcing
 Awareness of outsourcing
 transition cost.
IT-OUTSOURCING
Presence of reversibility
clauses in the contract.

Sufficient level of IT
expertise inside the
company.
Vendor
       search and
       contracting    Initial
       cost           transition cost

                                                           Post IT out
                                                           sourcing
                        Cost of managing the IT-           transition cost
                        outsourcing effort




                                                           Time
Original idea to
Outsource
            Beginning of the IT           Change of IT vendor or
            outsourcing relationship      reintegration of IT
IT-OUTSOURCING
Steps to reduce the hidden costs
The activities should not be
 critical or surrounded by
 uncertainty.
Companies should spend time in
 researching vendors.
The contracts should have clauses
 that specify technology evolution
 and reversibility
The relationship with the vendors
 should be the best in order to
 get desired performance.
Outsourceing
Outsourceing

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Outsourceing

  • 1. 379th PROJECT MANAGEMENT COMMITTEE MEETING Held on: May 14, 2005 At: 1100 hrs Venue: Conference Room Attendance: Except GM Spinning, all members present, MD in chair.
  • 3. KTML SPINNING Spinning Performance Report Month : May 2005 Period ----> Unit of May 06 to May 12 May 01 to May 12 Remarks Measurm ent Desired Actual Particulars Desired Actual % Qty % Utilization Installed Capacity - Spindle No 79,520 79,520 Shifts worked No 21 21 36 36 Utilization % 99.00 98.72 99.00 97.90 Working Efficiency Average Count No 52.55 51.67 Average OPS 2.82 2.78 2.86 2.78 Working Efficiency % 94.09 92.59 94.07 91.63 Raw Material Issue Pak Ctn Kgs / % 59,231 38.30 106,484 38.38 Impt Ctn Kgs / % 69,656 45.04 126,379 45.55 PSF Kgs / % 25,763 16.66 44,584 16.07 Kgs / % 154,650 100.00 277,447 100.00 Yarn Production Kgs / % 130,946 84.67 224,520 80.92 Hard Waste Kgs / % 906 0.69 1,501 0.66 Yarn - B. Grade Kgs / % 634 0.48 1,089 0.48
  • 4. Period: 06.05.2005 to 12.05.2005 Maintenance Spinning: Following intimated: Except one Orion – M all Auto Winder spindles are serviceable. M/s ACMA TEX dispatched Switcher Box which would be received by Monday. Motor Tripping in Section IV; discussed. 30 KW Motor to replace 22 KW motor being used for 18000 RPM on 22 Count frames.
  • 5. IT-OUTSOURCING How to reduce searching cost Select a trust worthy vendor. Vendor should be very cooperative. Interviewing the vendor’s previous & current clients.
  • 6. IT-OUTSOURCING How to reduce contracting cost Vague ideas from the contract should be eliminated. Contract should be flexible.
  • 7. IT-OUTSOURCING Necessary clauses in IT outsourcing contract Evolution clauses apply both to the price and the technological flexibility as bench mark clauses. Reversibility clauses are about either material reversibility or human reversibility.One gives the company the options to buy premises from the vendor and the other allows the company to hire employees from the vendors.
  • 8. IT-OUTSOURCING Hidden Cost #2 Transitioning to the Vendor Elusive cost Transition time is(1 year) 70% was no longer than 10 months
  • 9. IT-OUTSOURCING Determining Transition Cost Transition cost are elusive A company incurs as long as the vendor has not completely taken over the internal IT department. The time that internal employee spent helping the vendor transition cost.
  • 10. IT-OUTSOURCING Cost that stem from disruption and from vendor's inability to react as quickly and appropriately as the internal department the beginning of the contract are transition costs.  Reducing transition Cost The first step in decreasing transition cost's to be aware of it. Companies would be well advised to avoid outsourcing activities that a idiosyncratic an to keep IT employees in house the company should know what it wants from the out source activity.Having experience with IT outsourcing
  • 11. IT-OUTSOURCING Cost#3 Managing the effort This the largest category of the hidden cost It covers three areas: Monitoring that IT vendors con fulfill there contractual obligations
  • 12. IT-OUTSOURCING Bargaining with IT vendors. Negotiating any needed contract changes. Determining the cost of managing Vendor Unlike out sourcing fees vendor management costs for IT outsourcing are not readily apparent.
  • 13. IT-OUTSOURCING Management costs purely internal companies don’t take management cost into account until they become visible so it create problem.
  • 14. IT-OUTSOURCING 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 Less than $10 million Greater $10 million to 100 than $100 million million
  • 15. IT-OUTSOURCING Reducing the cost of managing vendor IT outsourcing experiences reduce the cost of managing the relationship the more the company the more a company deals with the IT vendor the faster it can judge the vendors performance. Trust should be cultivated in the vendor relationship this will narrow the gaps between the both parties.
  • 16. IT-OUTSOURCING The fourth hidden cost comes from switching vendors or reintegrating IT activities internally: Determine the cost of transition after outsourcing. This involves finding the vendor, drafting a new contract and transitioning resources.
  • 17. IT-OUTSOURCING Reintegrated cost involves building a new internal activity from scratch. Reducing the cost of transitioning after outsourcing Awareness of outsourcing transition cost.
  • 18. IT-OUTSOURCING Presence of reversibility clauses in the contract. Sufficient level of IT expertise inside the company.
  • 19. Vendor search and contracting Initial cost transition cost Post IT out sourcing Cost of managing the IT- transition cost outsourcing effort Time Original idea to Outsource Beginning of the IT Change of IT vendor or outsourcing relationship reintegration of IT
  • 20. IT-OUTSOURCING Steps to reduce the hidden costs The activities should not be critical or surrounded by uncertainty. Companies should spend time in researching vendors. The contracts should have clauses that specify technology evolution and reversibility The relationship with the vendors should be the best in order to get desired performance.