Study of procedural aspects of cng valve production


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Study of procedural aspects of cng valve production

  2. 2. ACKNOWLEDGEMENT I take this opportunity to thank all those who guided me at every stage of this project. First of all I would like to thank Mr. J. S. Vispute (D.G.M.) of Vanaz Engineers Limited for allowing me to do the project in this reputed organization; Mr. S. S. Saxena (Personnel Manager) for making available all the facilities for completion of the project. Mrs. M. S. Risbud (O i/c Planning Dept.) always made time available to guide me and enrich my knowledge about the industrial procedures followed during manufacturing of valves and CNG valve in particular. This study project could not have been completed without her effort and continuous encouragement. I also thank Prof. Rajesh Vatkar for extending his assistance in all respects. Many a times theory seemed to be quite different from the practical way of working. Having worked in a manufacturing industry he could solve my queries due to his work experience. I would also like to thank all those staff members of various departments and workers who shared their experiences to help me understand different processes in depth and in a more practical manner. KAPIL JOSHI MB 05 17 M. B. A. V. I. M., Pune.
  4. 4. EXECUTIVE SUMMARY In any organization there are several departments that work hand in hand taking care of different aspects of business. For example, the production of CNG Valve at Vanaz, demands functioning of different departments such as Materials, Testing Laboratory, Production, Planning, Quality Assurance, Assembly, Packaging, Marketing and so on. All these departments depend on each other for the proper functioning of the business. The functions and responsibilities of each of the respective departments are the same for any of the production firm. Thus it would be beneficial and important for an MBA student to understand the same in depth. The project aims at understanding the functioning, flow of information, planning and coordination between such numerous departments which finally results in timely delivery of the product to the customers. My project titled - Procedural Aspects of CNG Valve Manufacturing gives detailed information about the procedures followed at Vanaz Engineers Limited for the manufacturing of CNG Valve right from material procurement up to dispatch to customers. However due to the time limit of just 50 days of working at the Pune plant of Vanaz, not all the aspects of the business could be revealed. I ve still tried to present the most important aspects and the functioning of different departments to which I had access. The project could proceed by assisting the staff at work, interacting with them, raising questions and doubts, interviewing managers and through questionnaires. I ve concluded this project with some suggestions to make working simpler and more efficient. The details are given in the conclusion section of this report.
  5. 5. OBJECTIVE AND SCOPE I was not given any specific area or topic to work on for the project. I was allowed to gather information from different departments concerned with material, production planning and control. With this as a background and operations as my specialization, understanding the functioning of each of the department, and production as a whole in the company concerned with the manufacturing of a product appeared viable, useful and possible objective of my project. Production and materials management is concerned with the procurement of material, storing, quality assurance, manufacturing, testing, assembly, logistics and so on. A first hand experience of these aspects of organizational functioning, their interdependence and relation with each other is of great importance as the basics never change and are relevant in any manufacturing firm operating on medium or large scale. OBJECTIVE: 1. To understand functioning and responsibilities of the departments concerned with the CNG valve manufacturing. 2. To gather information about Procedures, Documentation and Flow of Information with each of these departments. SCOPE: 1. Limited to CNG Valve manufacturing. 2. Related to material procurement, storage, manufacturing, assembly, quality assurance, packaging, and dispatch. 3. Flow of information, documentation, quality plan and procedures.
  6. 6. COMPANY PROFILE VISION AND MISSION STATEMENT OF VANAZ ENGINEERS LIMITED, PUNE. VISION The company shall be highly respected light engineering outfits, manufacturing and supplying gas based products and auto components with complete customer focus. The company shall be fully responsible to shareholder for efficient business performance. The company shall discharge its expected functions in society and environment as very conscientious and responsible member of the corporate community. MISSION To achieve above vision, the company shall adopt and comply with ISO 9001-2000 QMS (Quality Management System) standards embracing and inter analysing the principles of quality management system given there in. these will be used to power company s growth through continual improvements in all aspects leading to enhancing satisfaction to customer and optimum financial returns to all shareholders.
  7. 7. Company Profile: Vanaz Engineers is an ISO 9001 company manufacturing an array of premium quality non-ferrous forging and pressure die-castings to customer specifications. It manufactures gas cylinder valves, gas meter and pressure regulators. Its casting and forging facilities, machine shop, tool room and laboratory facilities are fully equipped and staffed with trained professionals. The company operates under strict quality control guidelines and possesses unique R&D capabilities to meet customer requirements. Vanaz processes over 1,000 metric tons annually of brass, zinc and aluminum. Vanaz Engineers Limited was established in the year 1948 in Mumbai with a manufacturing setup to produce quality press tools, dies and fixtures. The company expanded its activities to copper and copper alloy forging in 1960. Specialized heat-treated aluminium and aluminium alloy forging was pioneered in India by Vanaz. Diversification was rapid in the field of cylinder valves and pressure regulators for LPG, oxygen, carbon-di-oxide, chlorine and other gases in the year 1963. Pune unit of Vanaz started in the year 1968. Vanfog-Fog generating machine for pest control, fumigation and agricultural applications was developed in 1974. Self-closing type cylinder valves and suitable pressure regulators were developed in1979. Deorukh unit of Vanaz was started in 1981. Vanaz has the main manufacturing unit & register office in Pune and Vanaz Unit No 2 is at Deorukh. Today, the establishment has: Die Casting Department with facilities for high pressure die casting for Zinc and Aluminium base alloys. Equipped with German make 'MUTAL' Hot Chamber Machines and two 160 tons 'HMT' make cold chamber machines, the company can manufacture die castings up to 2 kg hot weight. Other Ancillary Departments Inspection Department for Quality checks of components and finished products. Laboratory equipped with modern facilities like Atomic Absorption Spectrometer &
  8. 8. Metallurgical microscope with micrograph printing. The raw material is checked for physical and chemical properties, before being sent for further processing. Research and Development Department is situated in a separate building. It is equipped with CNC machines and is manned by qualified and experienced personnel. This is the innovative powerhouse of Vanaz which has helped us grow over the period of time and pioneer our new products. ACHIEVEMENTS The R&D Department of Vanaz has been recognized by the Department of Science & Technology, New Delhi, since 1985. Vanaz entered the automobile sector in 1990 with manufacturing of Synchronizer Rings which is an import substitute component. Vanaz became ISO 9001 company in September 1998. Vanaz is proud to manufacture the first indigenous CNG kit for autorickshaws duly approved by VRDE and ARAI in the year 2000
  9. 9. QUALITY MANAGEMENT SYSTEM Vanaz Engineers Ltd. has established a Quality management system to satisfy its present and future customers needs in accordance with the requirements of ISO 9001:2000 and TS16949-2002 VEL outsources sub-components or offloads work-in-process for job work on a regular basis. Quality standards are ensured through adequate controls. Records are maintained for outsourced processes and services in evidence. The responsibility of conformity with all customers remains with Vanaz Engineers Ltd. Following processes are included in QMS Processes for Management activities Provision of resources Product realization Measurement system and analysis
  10. 10. PRODUCT NAME VARIANTS VALVES 1. Slam Shut-Off Valve 2. Non-Return Valve 3. Safety Relief Valve 4. Needle Valve 5. Line Valve 6. High Pressure Gas Cylinder Valve REGULATORS AND ADAPTORS 1. Domestic Regulator 2. Adjustable Pressure Regulator (Low Flow Rate) 3. Adjustable Pressure Regulator (High Flow Rate) 4. Adjustable Pressure Regulator (High Pressure High Flow Rate) 5. Service Regulator 6. Preset Pressure Regulator 7. Preset Pressure Regulator (Fixed Inlet Pressure) 8. Preset Pressure Regulator (Variable Inlet Pressure) 9. Special Purpose Pressure Regulator 10. Adaptors 11. Flame Arrestor GAS TRAINS 1. Single Stage Pressure Reducing Valve 2. Two Stage Pressure Reducing Valve AUTO COMPONENT S 1. Synchroniser Ring 2. Shifter Fork 3. Rear Cover Crank Case 4. Slider 5. Bearing Cap 6. Connecting Rod 7. Petrol Tank Cap VANFOG Instrument for spraying insecticides GAS METERS AND ZERO GOVERNORS CONVERSION KITS Two Wheeler Three Wheeler Four Wheeler
  11. 11. A Look at the financial performance of Vanaz Engineers Ltd. FINANCIAL YEAR 2000-01 2001-02 2002-03 2003-04 2004-05 PRODUCTS SALES(Rs.) VALVES & REGULATORS 93430784 84795266 54881038 39657647 49798396 CNG VALVES 9445820 15038340 16735820 9292630 7557730 NON-FERROUS FORGING 2206696 518594 19171591 10915552 18783057 VANFOG M/c 3214150 3524792 3642879 5512522 6719824 PETROL TANK CAPS 14171747 15672897 13429822 13571403 2084918 CNG AND LPG KITS 79342968 111386685 145831654 291871550 121519079 GBS 40,18,50 52129915 46076534 54964986 84612827 125412334 GAS PIPELINE ITEMS 37750 1742265 2590370 5660898 11923285 SALES - SPARES 4624310 11525934 7721947 9100610 10185419 2004-05 2003-04 2002-03 Net Sales 360,507,056 474,935,595 325,581,431 PBIT 48,055,262 59,241,724 41,236,596 Total Capital 199,258,554 168,001,866 114,610,298 R.O.R. % 24.12 35.26 35.98 Profit Margin % 13.33 12.47 12.67 Capital Turnover 1.81 2.83 2.84
  12. 12. Research Methodology The simple meaning of research is to search for facts answer to questions and solution to problems. It clarifies doubtful facts; it corrects the misconceived ideas or facts. This being a study project involved systematic inquiry i.e. scientific study of facts. In every discipline, there exist certain confirmed and unconfirmed facts, theories. An activity undertaken to verify or revise these facts becomes a research. Objective of research is to verify and/or test the existing facts and to improve knowledge pertaining to these. Research also means developing new theories, concepts or tools for study of unknown phenomenon. Data is inevitable in a research. Data consists of facts, figures, any relevant material that serves for basic study and analysis. Data can be classified as Primary data and Secondary data. Primary sources means first hand sources or original sources at the hands of researcher collected through principle sources of observation, surveys. Secondary source is the data collected by some other person with some other purpose. It is readily available and the researcher has no control over its collection. Primary sources of data collection used in this project are: a) Observation: Having a look at the actual processes and procedures b) Interview: Talking directly to workers/ staff to gather information. This also helps in making out the attitude and comfort level at which the job is being done. Secondary source of data was the documents maintained in company records. This includes- sales, performance reports, test reports, certificates etc. Most of the data was made available by the Planning department.
  13. 13. THEORETICAL BACKGROUND Manufacturing is not a stand-alone activity. Timely supply of raw material, inspection and testing for maintaining quality of product, assembly and dispatch to customers at right place, at right time is equally important. Proper planning of manufacturing and all the allied activities is essential for maintaining strong relations with the customers and to build a trust in the market for the company name and products. The main areas studied in this project are as follows: 1. Production planning 2. Materials management 3. Inspection and Quality Control 4. Packaging and dispatch. Production Planning: The efficiency of production planning and control department depends upon the information it gets from other departments and the accuracy of the information. To prepare load and schedule chart, it must know the preventive maintenance schedule. To give realistic delivery date, it must know: Production Programme Quantity to be manufactured Delivery date Production materials Kind and Quality of material, Quantity of material required Stock on hand and reservations Time required for procurement Operation Time - Work content of each job Setup time and standard time for each operation
  14. 14. This is the most important function in any manufacturing firm. Production planning based on demand/orders decides the level of production, material requirement, allocation of resources, availability of men and machines etc. At VEL, monthly meetings are held on 25th of each month, which is attended by heads of all the concerned departments. The orders in hand and estimated demand in near future is reviewed. Material stock is evaluated in quantity and shortage material required to be procured is then estimated on quantity and time scale. The availability of facilities like laboratories, inspection facilities, packaging department schedule and availability of men and machine are other considerations to be taken in account. Materials Management: The master production schedule gives the productwise quantities to be produced over a given period of time. Bill of material describes how a product is made from its component parts and assemblies. It contains the information to identify each item of the assembly and the quantity required per assembly to which it is a part. First the quantity to be dispatched for the given month is estimated. The stock in hand available is also verified. This gives the requirement of the total quantity to be produced. A production schedule is then prepared. It spells out the different products to be manufactured over the given time span. Raw material, components, assemblies required for the given production is estimated and the stock in hand is checked for availability. The shortage material is then quantified. A schedule of purchase and delivery is prepared. At Vanaz, it is customary to receive material for a month in two or three schedules. Purchasing is effected by two departments as follows : (i) PP&C subcontracted items (ii) Stores raw material and bought-out components
  15. 15. Inspection: There are two basic objectives of inspection (i) to reject the item produced if it fails to meet the specified requirements and (ii) to serve as a means of maintaining quality of workmanship and materials used during production. Inspection is a very essential part of the manufacturing process. Following are certain conditions under which inspection should be carried out: Inspection requirement Equipment, Instruments, Tools and Apparatus to be used and techniques to be adopted for carrying out inspection. specialisation required for carrying out the inspection and the level of persons to be entrusted with the job. Quantity and frequency of inspection.
  16. 16. Information in brief about CNG (Compressed Natural Gas) Valve product The introduction of CNG as an alternative fuel has developed an extensively large market for this product. Vanaz being an old player in this field had a strategic advantage and as a result, demand for these valves increased and has touched almost 8,000 units per month now. CNG valves manufactured by Vanaz are rated for 200, 240, 250 and 255 bar (kg/cm2 ) operating pressures. The company has 6 categories in this segment. The differentiation is done by using different types of disk retainers for valves. Each disk retainer type is designed for specific operating pressure and temperature. Of this range of CNG valves, 200 bar pressure valves have maximum demand. Presently Vanaz sells about 500 valves per week in this category. The company offers one year guarantee for its valves. The major buyers of Vanaz CNG valves are - Bajaj Auto Ltd. Swaraj Mazda Technical Specifications: Conforming to IS:3224-2002 duly approved by CCOE, Nagpur. CNG Cylinder Valve 1 Nom, Working Pressure 255kgf/cm2 , Bursting Disk With Fusible Alloy Melting Point 98 To 104 C, 3/8 NPT Venting
  17. 17. FLOW OF PRODUCTION PROCESS OF CNG VALVE Vanaz Engineers Ltd. The flow chart below shows the entire process that lies between the demand and supply of the product. There exists a fixed procedure that is followed. When a party (customer) approaches the company with a sales inquiry indicating their demand in quantity, quality and expected schedule of delivery, a sales quotation is prepared by the company indicating their cost and terms of delivery and payment. Once both the parties agree on the terms, cost and delivery schedule, a sales order is raised by the customer. Different customers demand different types of products. Aggregating the demand for similar products, total demand is reached upon. To this quantity, pending orders quantity is added and the final demand is determined. The stock in hand is verified. This data is made available by finished goods stores. This is done to assess if the current demand can be satisfied and also to determine the quantity of the products required to be manufactured to maintain the safety stock and emergency orders. Once this is done, the quantity of production required for the given month is communicated to the Planning department. Bill of material for each kind of product gives the exact number of components and sub-assemblies going into the product. For the total production, total quantity of each component or sub-assemblies is obtained. The component store makes data available to the planning department about the availability of components. Comparing the requirement and availability of components, shortage stock is estimated. This stock is to be procured from vendors or from sub-contractors. For this purpose, the respective departments raise purchase indent to meet the requirement of components. The component store then raises purchase order. Vanaz has vendors developed over a period of 25 years. Purchase Order is an official document which is an agreement between the vendor and the company. The company takes a credit of 2 months for payment after delivery.
  18. 18. On receipt of the material from the vendor, Goods Receipt Report (GRR) is prepared. The stock is sent to Quality Assurance department for inspection. The inspection methods are predefined. Inspection results in segregation of the stock into accepted and rejected lots. Accepted lot is sent to component store after approval and the rejected lot is either returned to vendor or scrapped. The Production Plan made by Planning Dept is transformed into job at shop floor. This creates demand for raw material and bought out components at shop floor from the stores. The Oi/c for production issues a material requisition slip to the stores. The production is planned on weekly basis and as a result raw material, components are demanded to meet weekly requirement. With the available inputs manufacturing process is completed as per schedule. The finished components are then inspected for their quality and accuracy in dimensions before they are sent to finished components stores. As per the requirement the finished components are procured from the stores for assembling them into final product. At this stage, sample testing is done for few of the critical parts. If the lot is approved, assembly is allowed. After the valves are assembled, they are packed and stored in corrugated boxes and sent to dispatch section. Before the product moves out of the factory premises to customer, excise challan is prepared. The product is then delivered to the customer s premises by the company or through transport company service as per the agreement between the company and party (customer). This concludes the process of delivering the product to customer. This was just an overview of the entire process. However the actual process is complex and involves several procedures about which information is given in the following sections of this report. The flow chart on the following page is a chronological order of the important stages in the production of CNG Valve at Vanaz Engineers Ltd.
  19. 19. FLOW CHART OF PRODUCTION AT VANAZ ENGINEERS SALES INQUIRY SALES QUOTATION SALES ORDER AGGREGATE SALES ORDER (PRODUCT WISE SEPERATION) PENDING ORDER LIST STOCK VERIFICATION (finished components and finished goods) At this stage the production plan is defined to produce a certain number of products. For this purpose, BILL OF MATERIALS is prepared to aggregate the total requirement of raw material, bought out parts etc for each of the item. STOCK VERIFICATION AT STORES PURCHASE INDENT PURCHASE ORDER GRR QUALITY ASSURANCE
  20. 20. GRIR Accepted lot Rejected lot STORES Returned to party OR scrapped The Production Plan made by Planning Dept is transformed into job at shop floor. This creates demand for raw material and bought out components at shop floor from the stores. MATERIAL REQUISITION SLIP ( shop ) PROCESSING AT SHOP FLOOR FINISHED COMPONENTS QUALITY ASSUARANCE FINISHED COMPONENTS STORES ASSMEBLED AS PER REQUIREMENT FINISHED GOODS STORE EXCISE CHALLAN READY FOR DESPATCH
  21. 21. Manufacturing Process of CNG Valve Raw Material Shot blasting Lab Testing Machining Operation Shearing Stress Relieving Drumming Acid Cleaning Forging Inspection Trimming Stores Lab Testing Dispatch
  22. 22. BILL OF MATERIAL - CNG VALVE A CNG Valve is made of several sub-components and sub-assemblies. A bill of material is a document that gives a detailed list of these items. Given below is the bill-of-material of CNG Valve manufactured by Vanaz Engineers. It can be observed that not all the parts are manufactured by the company. The reason being those parts are low cost, less critical and are standardized. Nuts, washers, plugs are required in most of the valves manufactured by many of the automotive parts manufacturing firms. They are readily available and cost nominal. The parts manufactured at factory are valve body, disk retainer, spindle etc. such parts are critical from the point of view of quality and operation of the product. Also their cost fluctuates as cost of raw material i.e. brass fluctuates in the market. As a result, the idea of ready purchase gets eliminated. Sr. No. Item Description Source 1 V0120010 MACHINED CNG VALVE BODY Manufactured at Deorukh 2 V0120030 SPINDLE OF CNG VALVE Manufactured at Pune 3 V6632020 NYLON SEAT Ready Purchase 4 V0120040 CNG VALVE - WASHER Ready Purchase 5 V0120050 PACKING WASHER Ready Purchase 6 V0120070 GLAND NUT (SINGLE SPINDLE) Manufactured at Deorukh 7 V6601050 BIG BRASS WASHER Ready Purchase 8 V6611110A HANDWHEEL RED POWDER COATED Manufactured at Deorukh 9 V0120100 SPRING WASHER Ready Purchase 10 V0120110 M.S. WASHER M6 Zn PLATED Ready Purchase 11 V0156140P Cu DISK NICKLE & CHROME PLATED Manufactured at Pune 12 V0135131 CNG VALVE NYLON WASHER Ready Purchase 13 V0120090 HEX NUT Ready Purchase 14 V0157130AF DISK RETAINER 255/250 W.P. Manufactured at Pune 15 V0157140AF FUSIBLE PLUG WITH ALLOY M.P. 100 Ready Purchase
  23. 23. Manufacturing at Deorukh plant and communication to Pune Office As mentioned in the Bill of Material of CNG valve, a few components are manufactured at Deorukh plant. The schedule of components required to be manufactured and dispatched after forging and machining is communicated to the Deorukh Plant Manager by the O i/c Planning department in the last week of each month. The decision about the level of production is decided in the monthly meeting held usually on 25th of each month. The Deorukh Plant sends a weekly report to Pune plant in the for mat given on next page. It informs about the programmed quantity, stock in hand, planned work (in quantity), actual quantity dispatched and also reason if there is failure in timely dispatch. The planning department receives this information which ascertains that the production is going on as per the plan and also encourages the management to look into the matter if the Deorukh Plant fails to dispatch material on time.
  24. 24. Vendor Performance Appraisal System The purpose of this system is to apprise approved vendors, sub-contractors and suppliers of their performance. The scope of this appraisal system is extended to bought out components, sub-contracted components and raw material. The performance of vendors, sub-contractors is appraised on half yearly basis by the Vendor evaluation committee (VEC) as per the scheme given below: Total Points 100 out of which For Quality 50 points For delivery on time 25 points For customer disruption (including field returns) 10 points For incident of premium freight 10 points For special status customer notification to quality and delivery issue 05 points Q.A. department maintains the statistical data regarding quality . PP&C and Stores maintain data regarding delivery and sub-contracted & bought out components respectively. Q.A., N.G. section and engineering for their respective items forward the data regarding delivery for sub-contracted components to PP&C. The data regarding raw material is maintained by stores and lab. The vendor evaluation committee meets every 6 months to decide Vendor s rating based on previous 6-month s performance. The result of half-yearly rating is communicated by the stores to vendors and internally to the concerned departments. Based on the rating exercise the committee makes changes in the certified list of vendors if deemed necessary and sends information to all concerned. The vendors having unsatisfactory rating is provided next six months to improve performance. Action is taken to de-register a vendor if no improvement is seen during the next half yearly rating assessment. Such vendor is removed from the approved list of vendors.
  25. 25. QUALITY Completely O.K. 50 points Rejection up to 3% 45 Points Rejection 3% to 5% 40 Points Rejection 5% to 10% 35 Points Rejection 10% to 20% 30 Points Rejection 21% and above 00 Points DELIVERY On time or before 25 points Delayed transaction up to 5% 20 points Delayed transaction up to 10% 15 points Delayed transaction up to 15% 10 points Delayed transaction 16% and above 0 points A grace period of 8 days is built in the ERP system for all suppliers. RATING POINTS 90 or above RATING Excellent 85 89 Good 75 84 Must improve 50 74 Poor Below 50 unsatisfactory
  26. 26. Inspection and Quality Assurance Gauges and master gauges, measuring instruments, pressure gauges and temperature gauges, lab equipment are calibrated either in-house or by external agency as per the relevant procedure and work instructions. The calibration status is displayed on the instrument/ gauge or its storage case. Where in- house capability exists, the measuring equipment are calibrated at prescribed intervals by department concerned under suitable environmental condition. The masters instruments are off loaded to external agencies. They are calibrated and their certificates indicate tractability to national/ international standards. The operator ensures careful handling and protection of measuring instruments and gauges. Only authorized personnel are allowed to undertake calibration and repairs. The instruments used for inspection of CNG valve body are as follows: Vernier callipers, micrometer gauge, thread and plugs, special gauges. The parameters checked are as per drawing such as threads, inner and outer diameters Calibration is done under specific environmental conditions (Humidity below 40%, temperature 20 C 1 C, vibration-free, dust-free) There is no fixed interval for calibration of instruments and entirely depends on usage. The time interval may range from 15 days to 1 year depending on the type of instrument and its usage for inspection. The company signs yearly contract with external agencies for the purpose of calibration of instruments and gauges. These agencies are required to be ISO9000 compliant or holder of certificate from NPL (National Physical Laboratory). The personnel involved with in-house calibration are trained for the purpose. The minimum qualification is a Degree in Engineering or Diploma in Engineering with a minimum of 5 years of experience in Quality Assurance department.
  27. 27. INSPECTION PROCESS: Valve Body: The valve body of CNG Valve are manufactured at Deorukh plant and brought to Pune plant for assembly. On arrival the valve bodies are stacked in trays and kept ready for inspection. 100% visual inspection is carried out for Valve Body of CNG Valve. 1. First, the valve bodies are checked for stampings of ISI marks, operating pressure, part name. 2. The valve bodies are vulnerable to ingressions, inclusions due to the processes like forging and die-casting. These need to be checked and corrected by rework else such defective parts are scrapped. 3. The valve body dimensions like inlet/ outlet diameters, threading are checked for conformance to the design. Quality Plan of the inspection department defines the acceptable standards and gauges and instruments to be used to verify the dimensions and characteristics. Accepted parts are sent to Component Stores. These components are drawn from the stores for assembly as per the schedule. Other Components are checked for Quality using Sampling Inspection method. The results of sampling inspection are analysed by supervisor or inspection department head to decide whether to pass or reject the lot. Considering all the parts going into assembly of CNG Valve following are the results against the acceptable limits set by Quality Plan if Inspection Department. Percentage rejection in a good lot <2% Present average level of rejection <0.2% Present average level of re-work <0.5%
  28. 28. Format of Inspection Report used for Valve Body of CNG Valve: Inspection Item Criteria Instruments and gauges Frequency Remarks Gives details of item code, description Parameters to be checked for acceptance List of instruments and gauges to be used Results of sampling inspection are extrapolated to have idea of the quality of the lot Details of result of inspection This report is generated by O i/c of the Quality Assurance department and then forwarded to DGM QA for approval. Only after his approval, the components are sent to the stores. When the components are sent to stores, the approval is documented in a specific format (See annexures). Thus to conclude, we can say that the Quality Assurance department is responsible for the verification of quality of material received from vendors, authority to accept or reject a lot based on quality standards of the company. It is also responsible for the timely calibration of the instruments used for inspection. It maintains a laboratory for calibration of gauges and can off load its work to an external agency if need arises or if the calibration is highly specialized task for a particular instrument.
  29. 29. Testing and Assembly Assembly involves procurement of components from the component store to assembly shop to assemble these parts as per the procedure to produce the required final product. Before starting with the assembly work, testing of critical components is done in the assembly section itself. Preliminary Tests 1) FUSIBLE ALLOY TESTING: (To test 10 from a lot of 1,000 retainers for melting of alloy within given range of temperature) Disk retainer is the most critical part from the point of view of safety. The disk retainer has a fusible plug, which works similar to a safety fuse in electrical circuits. Fusible alloy melts when temperature rises beyond certain temperature and allows compressed gas to escape to avoid an explosion. The working temperature range for the alloy to fuse is between 98 - 104 C. From a lot of 1000 disk retainers, 12 are tested for its proper working. In case a retainer fails below 98 C or does not fail even after 104 C, it is considered as a lot not conforming to standards. In such a case entire lot is rejected. In case of rejection of a lot, Rejection Report is prepared and sent to the concerned department. (See Annexure I )
  30. 30. 2) BURSTING TEST: There is a possibility of explosion of gas cylinder if the pressure inside the cylinder rises beyond a certain pressure range. To avoid such a situation a venting hole is provided in the valve. A metal disk covers this hole. When pressure exceeds the rated pressure, it fails and gas escapes through the vent in the valve. 3) CYCLE TEST: During its life a valve is operated between ON and OFF position several thousand times. In order to test the reliability during operation, one valve from each lot of 500 ready valves is tested for its cycle of operation. In this test, the valve is opened and closed 6,000 times and then undergoes pressure testing to check if any of its part has loosened or failed due to above mentioned operation. Few of the components are inspected and certified by ISI Inspectors. Only after testing and approval from inspection department, assembly is allowed.
  31. 31. Assembly of CNG Valves Component store is centrally located with respect to all the sections where manufacturing or assembly work takes place. This reduces the required time and effort for the movement of material from stores to different sections where the material may be required. The assembly of parts involves 8 workstations and an equal number of workers. A point to be noted here is that assembly of all the parts to produce a lot of finished valves may not always take place in one go. More often it happens that few parts are assembled first and the other remaining parts are assembled later as and when the parts are available or as schedule permits or priority shifts as per the delivery schedule. On a particular day, assembly of four different types of valves (CNG, Oxygen, Hydrogen and Chlorine valves) was observed to be taking place. Movement of material from one workstation to next takes place by wooden trays. Thick wooden trays have holes to hold the valves as they are moved forward during their assembly. Such trays can also be stacked one over the other reducing the required area along assembly line. Manufacturing date and batch are punched on valve using alphabetical code. O to Z are used for months starting with January. Punching is done on the valve body.
  32. 32. Packaging and Dispatch Every Manufacturer should be very careful in packaging and packing, which of great importance in transportation as well as in safety of goods. Packaging is the wrapping or container that covers one or more units of the product. The packaging should be durable enough to stand the hazards of frequent handling, shocks and jerks during transportation, rough weather conditions etc. packing material is used to prevent damages to packages during transit. There is a wide range of packaging material available, such as corrugated boxes, wooden boxes, crates etc. The considerations in choosing the type of packaging material depends on the transport facility, frequency of handling before the consignment reaches its final destination, safety of product depending on its type (fragile, heat or moisture sensitive etc) and storage facility. Procedure of packaging followed at Vanaz Engineers is as follows: The assembled valves are dried using compressed air. Valve seat is positioned to completely closed position. Plastic caps are used to cover threaded portion of the valve. A checking slip is kept inside the box. (see details of checking slip in annexure) The ready valves are then placed in a three-layered corrugated box and sealed by tape. These boxes are then made available to ISI inspector who visit the company for sample test the valves. One or two valves are taken out from boxes randomly and tested for its pressure, temperature and operational reliability. Only if all the samples conform to the required standards they are passed. After the clearance from ISI Inspector, the boxes are sent to dispatch section.
  33. 33. The valve assembly section forwards the stock to packaging section for packing the valves. The valves are placed in corrugated boxes and then sealed using plastic straps. The boxes are sized to hold lot of either 35 or 50 CNG valves. Often customers demand an odd quantity (not in multiples of 35 or 50). In such cases, a certain required number of valves are drawn from the box and a tag is attached to the box. This tag indicates the number of valves left in the box and batch number. The dispatch section follows the principle of FIFO (First In First Out). The lot from open boxes is cleared first for the odd number demand. A label is fixed on each box specifying the contents, name of the component, quantity, batch number, date of dispatch etc. The dispatch section has to prepare a weight list in case more than one box is being dispatched. Before sending the product out of factory premises, an excise invoice is prepared. When the material is transported out of the factory, transport forward note is prepared. In case the goods are returned to the company for replacement, excise invoice is returned to excise section and goods are dispatched on the credit of excise paid. The responsibility of transporting goods to customers varies from party to party. In few cases, the company transports the goods up to Transport Company office only from where the Transport Company delivers the goods to customer s premises. This is called to pay basis which means that the customer will pay the freight charges. In other case the customer demands delivery of goods to its premises (e.g. Bajaj Auto Ltd.). Vanaz has its own fleet of trucks to transport the goods.
  34. 34. Marketing Vanaz Engineers Ltd. did not have a separate marketing department as such till recently. Marketing department has come into being last year (i.e. 2005). Earlier, customers approached the company for buying products but of late company through its marketing department has started approaching and developing new customers (dealers and distributors). The scope of operation of Marketing Department is limited only to study of market, contact distributors and develop dealers for the products of the company. Sales department carries out the function of generating demand quantity. Production is mainly planned on the basis of orders in hand and exponential forecasting. Conceptually, ERP system must maintain a flow of information between various departments of the company, like marketing, planning, finance, production, maintenance and so on. However this function of the ERP system is still not being used mainly because of the scale of operation and limited human resources in managerial cadre of the company.
  35. 35. ERP SYSTEM Enterprise resource planning software, or ERP attempts to integrate all departments and functions across a company onto a single computer system that can serve all those departments particular needs that runs off a single database so that the various departments can more easily share information and communicate with each other. ERP systems typically handle the manufacturing, logistics, inventory, invoicing, accounting for a company. At Vanaz Engineers, ERP system was installed last year i.e. 2005 and was being implemented in a phased manner. The company had set a target to implement this software by 30th of September 2006. It is an IOTA product. Only the basic and important functions were activated first. A list of total functions is given in annexures. Highlighted functions are active while others will be activated by the end of September 2006. In the absence of an ERP system, a large manufacturer may find it difficult to effectively interface different interdependent and interrelated tasks. Tasks that need to interface with one another may involve: order tracking from acceptance till dispatch stage, the revenue cycle from invoice through cash receipt, managing interdependencies Bill of Material, match between Purchase Orders (what was ordered), Inventory receipts (what arrived), and Costing (what the vendor invoiced), and the Accounting for all of these tasks. Benefit of using ERP System: ERP helps the manufacturing process flow more smoothly, and it improves visibility of the order fulfillment process inside the company. That can lead to reduced inventories of the materials used to make products (work-in-progress inventory), and it can help users better plan deliveries to customers, reducing the finished good inventory at the warehouse. However, Training expenses are high because workers almost invariably have to learn a new set of processes, not just a new software interface. Data conversion costs money to
  36. 36. move company information, such as customer and supplier records, product design data etc, from old systems to new ERP system. ERP is a set of practices for performing the various duties in the departments of a company, including finance, manufacturing and the stores. To get the most from the software, people inside the company need to adopt the work methods outlined in the software. If the people in the different departments that use ERP don t agree that the work methods of the software are better than the ones they currently use, they will resist using the software or will want the software to match the ways they currently do things. This is where ERP projects break down. To prevent this from happening, Planning department had started training sessions for each concerned department when the ERP system was brought in last year. The departmental heads later trained their staff. This is how the company got system familiarized to its employees. See annexures of list of functions performed by ERP system.
  37. 37. LIMITATIONS The project could have been made better than its present form. Management theory says that for any system to work properly in the organization, top management support is required. The title of the project was not specified and I was at the liberty to choose the topic of my interest. In the initial stages when questionnaire was used to gather information, different department heads replied with totally opposite answers. When clarification was sought in this regard, they declined to do so. Most of the O i/c and Managers are highly experienced but do not possess any formal academic degree in management. Coming through lower cadre and having being promoted over the years, they have reached managerial cadre. As such there was problem in communicating with them especially because many of the management terms were not known to them. Barring a few, majority of the O i/c did not have time to spare for management trainees to share knowledge and information.
  38. 38. CONCLUSION The usefulness of a study project can not be underestimated. Instead of working in just one department; getting an overall view of the entire organizational working is of more importance for a fresh graduate. Managing business is a complex affair. For a fresh graduate like me, understanding the reason of existence, importance, responsibilities of each department and the interrelation between these departments which make it possible for the company to function efficiently was of great help. This project studies various aspects of manufacturing and cleared many of my personal misconceptions about the practical way of running business. It is not possible to gain practical knowledge through books and theory therein. It was a great experience to work in an ISO 9000 certified organization. The quality management system and procedures set for each of the function in the organization made it easy for me as a trainee to gather information and then compare it with theory. Introduction to ERP and knowing about the capabilities and capacity of software in smooth functioning of manufacturing and allied activities was an eye opener.
  39. 39. RECOMMENDATIONS 1. On many of the instances, it was observed that two men were required to transport material from one section to other, on a trolley. If a cage is built at the edges i.e. side walls of the trolley (see diagram 1), the need of additional person to hold the material, box, gunny bag to prevent it from falling off the trolley will be eliminated. 2. While testing the alloy filling at the assembly section, it was observed that it was not convenient for the operator to check the failure of valves. Failure of lowermost and disturbance so created in the liquid due to high pressure air escaping through it, hampered the visibility. For this purpose, an attachment that will hold the retainers in a line horizontally is recommended. See diagram2.
  40. 40. ANNEXURES
  41. 41. PRODUCT PART APPROVAL (For components before sending the item to component store) SUPPLIER: NAME OF INSPECTION FACILITIES: vernier, micrometer, microscope PART NO: PART NAME: Sr. No. Dimensions/ Specifications Supplies Measurement Results OK Not OK SIGNATURE SEAL
  42. 42. PERFORMANCE REPORT (MONTHLY) DEPARTMENT : Man Power Available hours Operators : Over time : Casual workers : Deputation from other dept. : TOTAL MANPOWER : Productive Work Unmeasured Work Component Operations Quantity Hours Component Operations Quantity Hours INDICES OF PERFORMANCE Production Work Index = Production Hours Total Hours Setting Time Index = Setting Time (hours) Total Hours Unmeasured Work Index = Unmeasured Work Hours Total Hours R & R I = Rework hours Rejection hours Production Hours Production Index = ____Prod. Work + Setting Time_____ Total Hours Unmeasured work hours
  43. 43. Format of checking slip put in each box before packaging CHECKING SLIP Number: Box Number: In case of any complaint regarding shortage, kindly return this along with complaint to Vanaz Engineers Limited UNIT 2. Address: CHECKED BY: PACKED BY : Date:
  44. 44. REJECTION REPORT Fusible Alloy Test Report T C No.: Date: Test: Yield Point of Fusible Plug alloy Party: Hand press Section Challan No.: Date: Item : M16 1.5 disc retainer Yield Temperature CLot No. Quantity Number of Samples Required Observed BS/09 300 10 100-2 +4 95 101 101.1 101.7 102.5 Remark: Rejected for one sample started leaking before temperature reached 98 C. Samples are returned herewith. Incharge Laboratory
  45. 45. SALES REPORT MONTH PROGRAMMED QUANTITY DISPATCH QUANTITY % share of total sales May 2005 6,000 3,025 3.29 June 5,000 1,700 -- July 0 1,850 1.5 August 500 1,930 1.27 September 4,500 2,920 1.97 October 1,500 2,450 3.0 November 5,000 4,440 -- December 6,000 6,215 -- January - 2006 8,000 7,215 6.95 February 8,000 6,694 6.67 March 8,000 10,855 8.87 April 8,000 6,844 6.22 May 6,000 6,691 6.22
  46. 46. E R P Reports ERP - STOCK REPORTS REPORT TYPES CONTENT STOCK REPORTS 1 Inventory Status Inventory detail status Inventory-class by items 2 Inventory up to date status Inventory status (both quantity &/ or value) up to specific date 3 Inventory status (period) Inventory status for specified period 4 Non-Inventory up to date status Non-inventory status (quantity) up to specified date 5 Stock statement 6 Inventory ageing analysis itemwise inventory quantity/ on hand value wise ageing analysis up to date 7 Item-lot ledger Item*lot ledger date/ entrywise 8 Sub-contractor ledger Sub-contractor ledger for specified period 9 Barden ledger A Inventory statement for bank Inventory statement for bank B stock movement C WIP stock position D A-B-C Analysis ABC by consumption value E X-Y-Z Analysis XYZ by on hand value F F-S-N Analysis Analysis for FSN G Stock alert report Inventory items whose stock level is beyond permissible limit H Items <reorder level> Inentory items whose stock is to be replenished I gen receipt - Issue register partywise general (loan) receipt/ issues for specific period J Test quantity report K S/O*P/O status vs stock L Batch costing M Metal summary N Production statement Production statement for specified period O L/R report
  47. 47. ERP - SALES REPORTS P Item price list List price item - class by itemwise Q Pending D/Ms for S/O R Items issued without S/O Items issued or sold without S/O S Performa Invoice printing Performa Invoice printing T Demand-note & Collection bill U A/R follow-up wrt customer GIN A/R follow-up wrt customer GIN V Salesman analysis W Invoice wrt customer RCI X Invoice and Customer RCI Y Credit-note and bank charges Z sale-rate-Diff (retros) Sale rate diff extract for specified item, party and retrospective period A sales vis-à-vis costing Inventory cost compared with sale value of sold items B MIS reports C Price variation report report for supplementary bills for specific period
  48. 48. ERP - PURCHASE REPORTS d Pending purchase requisitions Pending purchase requisitions for P/O e Executed purchase requisitions f Vendor-Quote comparison Comparative statement of vendor quotation g vendor substitution Vendor substitution based on vendor performance h Purchase order status P/O pending status i Item P/O rate analysis Item P/O rate analysis j P.O./S.O. amendment history History of P/O amendments k order executed history Order executed history up to specific date l Items Rxd without P.O. Item received without purchase order m Items under inspection Items under inspection n Items inspection (excp) statement Inventory items receipt inspection - Exception Report o Vendor receipt - inspection statement receipt-Inspection statement of vendors for specified period p Item purchase (party) Purchase register (party x item-class)wise, within period defined q Party sales/ purchase (itemwise) Party x item purchase/ sale r Purchase rate reconciliation P/O rate vis-à-vis GIN rate vis-à-vis items vis-à-vis bill rate s Value added for non- GIN Non-GIN purchases t Purchase by product u Item/Party wise Vendor Performance v Octroi statement w Missing document Nos. List of missing document numbers of inventory transaction x Item auxiliary valuation a Modify/ delete audit trail Modify/ delete audit trail of transaction b Party typewise sales (party*Item) sales Register c Transporters passed/ due bills ~ Container ledger
  49. 49. Sales order status Purchase order pending status Item*period Inventory Valuation Variance GIN & Bills valuation variance between GIN & Bills (including auxiliary components) Ledger for SC-In items Stock ledger for sub-contractor - In items Purchase quotation status Purchase quotation status - executed and pending Inventory cut-off date status Supplementary bill details Retest Inventory RM Import & Indigenous register Dispatch details Dispatch details - How dispatches are valued vendor item rate history Pending P/O schedule sales return Purchase return Locationwise transfer
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