Report

Table of Contents

1. EXECUTIVE SUMMARY..............................................................................4

2. INTRODUCTION TO PROJECT....................................................................5

2.1 Introduction to TTS panel line:......................................................................5

2.2 Processes done for plates at TTS panel line:...............................................15

2.3 Schedule of the project work:......................................................................29

3. LITERATURE REVIEW AND STUDY OF INDUSTRY............................30

3.1 Introduction to Costing................................................................................30

3.2 Introduction to Shipping Industry................................................................33

3.2.1 History of shipping industry..................................................................33

3.2.2 Industrial shipping Carriers:..................................................................33

3.3 Introduction to PSL......................................................................................36

3.3.1 Stake Holders.........................................................................................37

3.3.2 Association With World Leading Groups.............................................37

3.3.3 Business strategy...................................................................................39

3.3.4 Infrastructure.........................................................................................41

3.3.5 Products of PSL.....................................................................................44

4. OBJECTIVE OF THE PROJECT..................................................................46

5. RESEARCH METHODOLOGY...................................................................47

6. DATA ANALYSIS AND INTERPRETATION............................................48

6.1 Labour Cost.................................................................................................48

6.2 Material Cost...............................................................................................53

6.3 Maintenance Cost........................................................................................59

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6.4 Depreciation Cost........................................................................................60

7. CONCLUSIONS............................................................................................69

8. RECOMMENDATIONS................................................................................70

9. REFERENCES...............................................................................................72

2

List of Figures

figure 1: Project Work Flow Diagram.........................................................................28

Figure 2: Schedule Of Project Work...........................................................................29

Figure 3: Production Summary...................................................................................49

Figure 4: Variable Costs..............................................................................................50

Figure 5: Total Cost.....................................................................................................51

Figure 6: Shelf Stacking..............................................................................................65

List of Tables

Table 1: Employee Distribution..................................................................................48

Table 2: Table Of Total Production, Sub Assembly And Block Fitting.....................49

Table 3: Variable Cast Data........................................................................................50

Table 4: Total Cost Data..............................................................................................51

Table 5: Labour Cost...................................................................................................52

Table 6: Cost Of Welding Material.............................................................................56

Table 7: Consumption Of Gases By Weight...............................................................56

Table 8: Cost Of Gas Consumption.............................................................................57

Table 9: Material Cost.................................................................................................58

Table 10: Reduction In Labour Cost...........................................................................70

Table 11: Reduction In Material Cost.........................................................................71

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1. EXECUTIVE SUMMARY

TTS(Total Transfer System) panel line of Pipavav Shipyard Limited is one of the

best production lines all over the world among shipyard industries.

The TTS panel line contains following stations for different operations:

Tack Welding Station

One Side Welding Station

Mobile Stiffener Gentry

Fillet Welding Gentry

Web Mounting Gentry

Web Welding Service Gentry

Load Out Station

The first task is to calculate the costs regarding TTS panel line.

Labour cost

Material cost

Maintenance cost

Depreciation cost

The second task is to find the ways to reduce these costs by analysing the working

conditions, worker’s accuracy and efficiency, mistakes, improper practice,

inappropriate material handling, worker’s efforts to complete the work, leakage,

corrosion, etc. And then get insights and put efforts to reduce cost as much as

possible.

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2. INTRODUCTION TO PROJECT

The project is all about costing. The intention of company for allocating this project

is to reduce the cost of one of their well established production line (TTS panel line)

which is one of the best production lines among the shipyard industries all over the

world.

2.1 Introduction to TTS panel line:

5

Width of the Bay-1(TTS panel line) is 42.1m and height of side ‘A’ is 23.6m

and that of ‘B’ is 35m.

After shot blasting, Plates for Flat blocks come through roller conveyor from

Section ‘A’.

Plates of sizes around 10m are joined by MAG welding and will get width of

around 20 to 22m which used in TTS panel line.

There are two CNC Cutting Machines in Side ‘A’ of Bay-1. One is Gas cutting

and the other one is Plasma cutting.

Gas cutting is used for plate cutting where Plasma Cutting is used for stiffeners

cutting.

Plates from roller conveyor to the CNC Cutting Machine move by EOT

(Electrical Overheat Transportation) 20T crane whose length is42.1 m.

Stiffeners from CNC Cutting Machine bed an be moved by 5T capacity crane

whose length is 15m.

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Plates of 20 to 22m length and with different width put on the tack welding

station. Similar plate is tack welded on TWS. Because of that whole plate

width is become 20 to 22m.

From TWS, TTS Panel Line starts and there other 5 welding machines. All are

listed below:

i. Tack Welding Station [T.W.S]

ii. One Side Welding Station [O.S.W.S]

iii. Mobile Stiffener Gentry [M.S.G]

iv. Fillet Welding Gentry [F.W.G]

v. Web Mounting Gentry [W.M.G]

vi. Web Welding Service Gentry 1&2 [W.W.S.G]

There are two sub-assembly area in Bay-1. Stiffeners made in sub-assembly

area of Bay-1-A and Frames and Brackets are made in sub-assembly area of

Bay-1-B.

When base plate reaches at MSG Station, Stiffeners joined to the plate by tack

welding and then full welding done on FWG.

Frames and Bracket tack welded to the plate at WMG and then full welding

done on WWSG.

At the end of the Panel Line Load Out Station (LOS) is provided which raise

and hold whole job at certain height so overhead work can be done and also

transportation through Commeto become easy.

After FWG, Block becomes very heavy and so the transportation of it with the

of cranes is not possible so Ultra Heavy Lifter is provided which raise little bit

and then moves it till the LOS.

Both side of shed, pipelines of CO2, O2, Air and water are provided.

There are two 50T + 25T cranes which helps to mount frames on the base

plate.

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1. Tack Welding Station:

With the help of EOT of 50T crane, plate can be kept on guide beams.

Range of TWS is 16m in the direction of production.

With the help of hydraulic magnet manipulator, plate can be centered.

Magnetic manipulator can be controlled by three controllers, two are given at

trolley and one at one side of the panel line near to station which can also

control transport chains.

Alignment of the plate can be done by changing position of Wedge. (Forward

side is essential)

Plate moves above guide line with the help of rollers.

Alignment between two plates, joining of runner plates and at last tack of

welding can be accomplished on this station.

Plate is mounted on the beam and two hydraulic jaws exert pressure on the

plate.

With the help of toggle jack, tighten between two contacting faces can be done

which result very accurate tack welding.

Then MAG welding is done manually.

At the end of the process, Tack welded plates holds by C-Clamp which moves

whole plate towards next station (OSWS) with the help of transport chain.

2. One Side Welding Station:

Concept of OSWS is same as submerged arc welding. Some changes are there

which increase the efficiency and decrease the weld time.

Range of OSWS is 29m in the direction of production.

In this welding process, full welding is carried out both sides on tack welded

root line without turning it.

Three torches moves simultaneously over the weld line. Laser is set before

torches to detect its direction. Laser is kept on the edge of plate because groove

line is not straight.

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Fusion carried out by first torch because it is inclined negative side to the

vertical, fill of deposition of metal carried by second and last torch finishes the

weld line.

There are two type of flux.

1. Bottom flux

2. Top flux

Bottom flux (NSH-1RM) is speeded over copper bar.

Top flux (NSH-50 M)is speeded continuously after the torch(only first and

second)

Electrode has 4.8mm diameter.

Electrode is MS but copper coated, to reduce the contamination of atmosphere.

Because of fusion work done by the first torch, consumption rate is also high

compare to other two wire spools. Consumption are 12.5 Kg/m, 5.5 Kg/m, 3.5

Kg/m.

This whole process done just in 40min, but if the same work done manually

then it takes two to three days.

The purpose behind using copper plate is more heat absorption, produce during

welding so the metal with low melting point cannot work efficiently.

Water cooling system is provided below copper bar is to resists the change in

shape of copper by heating.

Sensor is provided before the torches which guide whole machine.

In this process, very less chance of defects.

Defects at start and end position can be terminate by runner plate.

Filler wire rod tip must cut up to certain length because slag of previous

welding coated on it and that would not emerge arc.

Control of voltage and current is needed of torches. Required changes in them

of 1st torch identify by sound and smoke where that of 2nd and 3rd torch can be

identify by removing slag.

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Current and voltage can be controlled By ESAB CONROLLER. Leading or 1 st

torch works on DC where other two works on AC. The reason behind using

DC is high deposition can be occurred.

Voltage helps to melt the metal and current control the deposition of filler wire.

As the root face increases current level also increases.

As the gap is increases, value of voltage and current must be decreases.

At the end of the three torches, flux collector also moves with them which

stored in the tank so reuse of bottom flux can be possible.

3. Mobile Stiffener Gentry:

After welding two plates, stiffeners can be mount on the base plate and it is

done at MSG.

Range of MSG is 25m in the direction of production.

L-bar from Bay-3 and T-bar from sub-assembly area of Bay-1-A mounted on

the base plate according to marking based on production drawing after OSWS.

Stiffeners mounted at the inside part of the plate and that can be identify by

edge

V-S V-N

42 magnets in two lines take the L-bar or T-bar from the bracket and then kept

them on the base plate at right place.

Movement of series of magnets controlled hydraulically by beam movement of

upward and downward.

Before taking any T-bar or L-bar, it must be parallel to the marking line

otherwise beam must be aligned up to certain degree.

Gentry can move100mm perpendicular to the direction of production line.

50mm movement of both column respect to each other.

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After setting stiffeners, pressure exerted on it by hydraulic jaw downward and

free four magnets at each trolley stick with plate and move it in upward

direction so correct tightening produce and chance of space.

After right angle alignment of the stiffeners on the plate, tack welding can be

done.

4. Fillet Welding Gentry:

Welding concept is same as MAG.

Range of FWG is 16m in the direction of the production.

Full welding of tack welded stiffeners can be done on this station.

There are two trolleys on the beam which reciprocates in the perpendicular

direction of the production direction.

Each trolley has two wagons and each wagon has four torches (Two lead

torches and two tail torches). So total 16 torches can weld the stiffeners

simultaneously.

Because of four torches work simultaneously, accurate deposition take place.

CO2 pressure : 3 psi and Air Pressure : 7.5 psi

Diameter of filler wire is 1.6mm.

As the thickness increase value of voltage and ampere must be increase.

Sensor is provided which automatically stops the machine when that is any

hurdles.

Long path welding can be done.

High speed and high deposition even at high speed.

Distance between torch and leg remain same till the welding ends.

Undercut, pinhole and porosity occur seldom.

Overcut can be eliminating by grinding and welding manually.

200Kg of filler wire drum continuously feed the wire.

Generally web thickness 12 to 15mm so weld pull thickness is around 7.

Total length of FWG is 26.5m, width is 8.5m and height is 6.5m

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Beam can move downward till 2.4m and trolley can move downward up to

0.9m.

Current range is from 335 to 550A and Voltage is from 32 to 36v.

ESAB LAF 635 DC is given to each torch and these sources are mounted at

either end of the gentry.

Plate material received at the line shall have been prepared to a tolerance

corresponding to DIN8523 (NS-ISO-8206).

5. Web Mounting Gentry:

With the help of MAG tack is made to the frames.

Sub-assembly area of Bay-1-B, prepares brackets and frames.

In the sub-assembly area, stiffeners mounted on the metal plate which

increases its strength. And that whole unit assembly called frame or bracket.

With the help of EOT 50T + 25T capacity cranes all those frames tack welded

on the base plate and on T-bars.

Some frames are mounted at some angle which is measured by angle

comparator.

Sometimes gap between frame and stiffeners fill up by collar plate for water

tight purpose.

6. Web Welding Service Gentry:

Full welding of frames is done on WWSG 1 & 2.

It same as MAG only the difference is Spools are hanged to the gentry so

movement of spool become easy.

Porosity, Blow holes, Pin holes and Undercut are main defects that can be

found after full welding.

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According to requirement higher strength, two pass welding done and for that

bevel is made.

7. Hydraulic Magnet Manipulator:

It is used for alignment of plates and hold the plates in the right position at

TWS.

Number of manipulators are 3, Hydraulic drive, lift, pneumatic.

8. Fixed Rollers:

Width : 50mm, Diameter : 200mm

It is used for transport block in one direction.

Guide irons are attached to the rollers to prevent panels from stalling during

transport.

9. Transport Chains:

It used for transportation in both direction.

Chain is kept in the steel channel for proper guide and attached with motor

Number of transport chains per station is two.

It can cover or convey from 9.5m to 31m.

Its conveying speed is 6m/min.

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10. Disc Roller:

Width: 20mm, Diameter: 250.

It is provided where work of plate would be done.

It is designed so that disc can be replaced if it get damaged.

It is also mounted on the cylindrical pipes which called pit disc roller.

11. Swivel Rollers:

Width: 50mm, Diameter: 200mm.

It can rotate its own axis at 3600.

It mounted on the pit or pipe before MSG and pipes or pit fixed to the ground

by weldments to the foundation plate so repair of bottom portion of plate can

be possible.

12. Ultra Heavy Lifter:

Weight of block increases after WMG so it would not be possible for cranes to

transfer or move to the next station.

With the help of hydraulic energy whole block can be raised and moved to the

desired place, this work can be done by UHL.

Rails are provided at the bottom, till LOS.

13. Load Out Station

At the end of all the processes, weight of block is very high so transportation

through crane cannot be possible.

When the heavy block kept at the LOS., 8 Hydraulic jaws of 25T capacity each

raise the block and then hold.

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Meanwhile columns kept under block and then hydraulic jaws returned to its

position so the whole block kept on the columns.

With help of cometto, block can be transport to the required place.

2.2 Processes done for plates at TTS panel line:

1. Marking:

With the help of marking on the plate, right part can be weld or assemble at

right position.

There are two types of marking method, first one is by CNC m/c and the

other one is by marker who done it with help of choke and string.

2. Coding:

Each and every plate must be distinguished by coding which helps to identify

the plate position before building of vessel starts.

For permanent coding, number is engraved in the plate

Even every block is given a particular code. 262,272,101,110,224 etc.

X X X

Serial no.

Position of Block

Types of block

First Letter: Cross deck - 500 series, main deck – 520, lower bottom – 620,

double bottom – 220 etc. ( this numbering system is only for panama)

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Second letter: Port side (2), starboard side (3) and Middle (0).

For ex. 222 = Double bottom – Port side

Third Letter: Serial no. starts from After side to Fore side.

There are 130 blocks in Pnamax.

3. Straitening:

Before using plate for cutting or bending work, it must be straitened

otherwise uneven shape will be produce.

It can be done by putting plates in between rollers.

Rollers apply pressure on the plate and eliminate curves from the surface.

4. Grinding:

The motor drives a geared head at a right-angle on which is mounted an

abrasive disc or a thinner cut-off disc, either of which can be replaced when

worn.

Angle grinders typically have an adjustable guard and a side-handle for two-

handed operation.

Certain angle grinders, depending on their speed range, can be used as a

sander, employing a sanding disc with a backing pad or disc

Angle grinders may be used both for removing excess material from a piece or

simply cutting into a piece.

There are many different kinds of discs that are used for various materials and

tasks, such as cut-off discs (diamond blade), abrasive grinding discs, grinding

stones, sanding discs, wire brush wheels and polishing pads. The angle grinder

has large bearings to counter side forces generated during cutting, unlike a

power drill, where the force is axial.

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Because of atmospheric contamination to the plate, pitting defect occurs which

can be eliminate by grindin to the surface of the plate.

5. Shot Blasting:

Common features include: the ability to use extremely fine, or coarse, medias

with densities ranging from plastic to steel; the ability to use hot water and

soap to allow simultaneous degreasing and blasting.

Elimination of Dust - so silicacious materials can be used without worry,

hazardous material or waste can be removed without danger - e.g. removal of

asbestos, radioactive, or other poisonous products from components and

structures leading to effective decontamination.

Process speeds can be as fast as conventional dry sand blasting when using the

equivalent size and type of media. However the presence of water between the

media and the substrate being processed creates a lubricating cushion that can

protect both the media and the surface from excess damage.

This has the dual advantage of lowering media breakdown rates and preventing

impregnation of foreign materials into the surface. Hence surfaces after wet

blasting are extremely clean, there is no embedded secondary contamination

from the media or from previous blasting processes, and there is no static cling

of dust to the blasted surface.

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Subsequent coating or bonding operations are always better after wet blasting

than dry blasting because of the cleanliness levels achieved. The lack of

surface recontamination also allows the use of single equipment for multiple

blasting operations - e.g. stainless steel and carbon (mild) steel items can be

processed in the same equipment with the same media without problems.

6. Cutting:

As per the drawing, marking done one on the metal plate and then according to

marking plate will be cut.

Name and description of the cutting machine is given below

1. Flame planner,20 cutting torches-FP500D KOIKE

2. CNC Gas Cutting,6 sets cutting torches,1 plate-Maxigraph-500D KOIKE

3. CNC Gas Cutting,6 sets cutting torches,1 plate-Maxigraph-500D KOIKE

4. Koike make CNC Plasma bevel cutting m/c,2 torchMYNUC-10500 KOIKE

5. CNC Plasma bevel cutting m/c,1 torch – V-5000DX KOIKE

6. CNC Plasma bevel cutting m/c,1 torch – VESHAGRAPH-500DX KOIKE

7. CNC Line and Letter marking m/c, 1 marking torch and 1 inject torch-

KAMS 5500D KOIKE

8. CNC Gas Cutting m/c (NCFP), 4sets cutting torches –MYNUC-10500

KOIKE

9. CNC Line and Letter marking m/c, 1 marking torch and 1 inject torch-

KAMS 5500D KOIKE

10. CNC Plasma bevel cutting m/c,1 torch – VESHAGRAPH-500DX KOIKE

11.HGG Profile cutting m/c PCL-600 HGG

I. Gas Cutting:

In oxy-fuel cutting, a cutting torch is used to heat metal to kindling

temperature

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A stream of oxygen is then trained on the metal and metal burns in that

oxygen and then flows out of the cut (kerf) as an oxide slag.

The oxygen flow rate is critical — too little will make a slow ragged cut; too

much will waste oxygen and produce a wide concave cut. Oxygen Lances

and other custom made torches do not have a separate pressure control for the

cutting oxygen, so the cutting oxygen pressure must be controlled using the

oxygen regulator. The oxygen cutting pressure should match the cutting tip

oxygen orifice. Consult the tip manufacturer's equipment data for the proper

cutting oxygen pressures for the specific cutting tip.

The oxidation of iron by this method is highly exothermic. Once started, steel

can be cut at a surprising rate, far faster than if it was merely melted through.

At this point, the pre-heat jets are there purely for assistance. The rise in

temperature will be obvious by the intense glare from the ejected material,

even through proper goggles. (A thermal lance is a tool which also uses rapid

oxidation of iron to cut through almost any material.)

Since the melted metal flows out of the work piece, there must be room on

the opposite side of the work piece for the spray to exit. When possible,

pieces of metal are cut on a grate that lets the melted metal fall freely to the

ground. The same equipment can be used for oxyacetylene blowtorches and

welding torches, by exchanging the part of the torch in front of the torch.

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II. Plasma Cutting:

Plasma cutting is a process that is used to cut steel and other metals of

different thicknesses (or sometimes other materials) using a plasma torch.

In this process, an inert gas (in some units, compressed air) is blown at high

speed out of a nozzle; at the same time an electrical arc is formed through

that gas from the nozzle to the surface being cut, turning some of that gas to

plasma.

The plasma is sufficiently hot to melt the metal being cut and moves

sufficiently fast to blow molten metal away from the cut.

First, a high-voltage, low current circuit is used to initialize a very small

high-intensity spark within the torch body, thereby generating a small pocket

of plasma gas.

Plasma is an effective means of cutting thin and thick materials alike.

Hand-held torches can usually cut up to 2 inches (51 mm) thick steel plate,

and stronger computer-controlled torches can cut steel up to 6 inches

(150 mm) thick.

Since plasma cutters produce a very hot and very localized "cone" to cut

with, they are extremely useful for cutting sheet metal in curved or angled

shapes.

Plasma torches were once quite expensive.

7.

Bending:

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It the process of changing the shape of the plate by applying pressure.

Bending of plate can be done by two methods, cold working and hot working.

Name of bending equipments and its type

Plate straightening m/c - Himalaya

Hydraulic press 1600t – VP 16 Himalaya

Hydraulic press 800t – VP 08 Himalaya

Hydraulic press 300t – RF03 Himalaya

Frame and face bending m/c 500-SBK 500Nieland

I. Cold Bending:

High amount of pressure applied with the help of hydraulic press on the plate

which results required change in shape.

With the help of wooden template, Accuracy of curve can be maintained.

According to thickness of the plate, required pressure also changes.

This process done at room temperature.

It doesn’t require any amount of heat but it can’t be done without high

pressure.

II. Hot Bending:

Heat is given to the plate till it reaches to the recrystallization temperature.

With the help of very little amount of pressure at recrystallization

temperature, shape of plate can be changed according to specification.

There is no need of hydraulic or pneumatic press. Plate shape can be changed

with the help of Mechanical press also.

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8. Line Heating:

Some critical curves cannot be produced by bending.

When the heat is applied on the metal plate, gradually structure of the

molecules changes.

When new structured formed because of heat and if it does not cool down

immediately then it may gets its original shape so heating time and cooling

time of plate is the critical parameters for curvature plates.

9. Welding:

With help of melting of parent metal and filler metal, two parts can be weld.

Some welding process there is need of pressure to complete the weld.

I. Arc Welding

Arc welding is a type of welding that uses a welding power supply to create

an electric arc between an electrode and the base material to melt the metals

at the welding point.

They can use either direct (DC) or alternating (AC) current, and consumable

or non-consumable electrodes.

The welding region is sometimes protected by some type of inert or semi-

inert gas, known as a shielding gas, and/or an evaporating filler material.

The process of arc welding is widely used because of its low capital and

running costs.

Getting the arc started is called striking the arc. An arc may be struck by

either lightly tapping the electrode against the metal or scratching the

electrode against the metal at high speed.

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I. Metal Active Gas Welding

23

Gas metal arc welding (GMAW), sometimes referred to by its subtypes

metal inert gas (MIG) welding or metal active gas (MAG) welding, is a

semi-automatic or automatic arc welding process in which a continuous

and consumable wire electrode and a shielding gas are fed through a

welding gun.

A constant voltage, direct current power source is most commonly used

with GMAW, but constant current systems, as well as alternating current,

can be used. There are four primary methods of metal transfer in GMAW,

called globular, short-circuiting, spray, and pulsed-spray, each of which

has distinct properties and corresponding advantages and limitations.

The contact tip, normally made of copper and sometimes chemically

treated to reduce spatter, is connected to the welding power source

through the power cable and transmits the electrical energy to the

electrode while directing it to the weld area.

Larger nozzles provide greater shielding gas flow, which is useful for high

current welding operations, in which the size of the molten weld pool is

increased.

A shorter arc length will cause a much greater heat input, which will make

the wire electrode melt more quickly and thereby restore the original arc

length.

Alternating current is rarely used with GMAW; instead, direct current is

employed and the electrode is generally positively charged. Since the

anode tends to have a greater heat concentration, this results in faster

melting of the feed wire, which increases weld penetration and welding

speed.

The polarity can be reversed only when special emissive-coated electrode

wires are used, but since these are not popular, a negatively charged

electrode is rarely employed.

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Shielding gases are necessary for gas metal arc welding to protect the

welding area from atmospheric gases such as nitrogen and oxygen, which

can cause fusion defects, porosity, and they come in contact with the

electrode, the arc, or the welding metal.

Pure inert gases such as argon and helium are only used for nonferrous

welding; with steel they do not provide adequate weld penetration (argon)

or cause an erratic arc and encourage spatter (with helium).

Pure carbon dioxide, on the other hand, allows for deep penetration welds

but encourages oxide formation, which adversely affect the mechanical

properties of the weld.

Its low cost makes it an attractive choice, but because of the reactivity of

the arc plasma, spatter is unavoidable and welding thin materials is

difficult.

Adding to its economic advantage was its high deposition rate, allowing

welding speeds of up to 110 mm/s (250 in/min).

As the weld is made, a ball of molten metal from the electrode tends to

build up on the end of the electrode, often in irregular shapes with a larger

diameter than the electrode itself.

When the droplet finally detaches either by gravity or short circuiting, it

falls to the workpiece, leaving an uneven surface and often causing

spatter.

As a result of the large molten droplet, the process is generally limited to

flat and horizontal welding positions.

The high amount of heat generated also is a downside, because it forces

the welder to use a larger electrode wire, increases the size of the weld

pool, and causes greater residual stresses and distortion in the weld area.

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II. Sub Merged Arc Welding

In

SMAW, the molten weld and the arc zone are protected from atmospheric

contamination by being “submerged” under a blanket of granular fusible

flux.

When molten, the flux becomes conductive, and provides a current path

between the electrode and the work. This thick layer of flux completely

covers the molten metal thus preventing spatter and sparks as well as

suppressing the intense ultraviolet radiation and fumes that are a part of

the shielded metal arc welding (SMAW) process.

The process is normally limited to the flat or horizontal-fillet welding

positions (although horizontal groove position welds have been done with

a special arrangement to support the flux).

Single or multiple (2 to 5) electrode wire variations of the process exist.

SAW strip-cladding utilizes a flat strip electrode (e.g. 60 mm wide x

0.5 mm thick). DC or AC power can be used, and combinations of DC

and AC are common on multiple electrode systems. Constant voltage

welding power supplies are most commonly used; however, constant

current systems in combination with a voltage sensing wire-feeder are

available.

High deposition rates (over 100 lb/h (45 kg/h) have been reported). High

operating factors in mechanized applications. Deep weld penetration.

Sound welds are readily made (with good process design and control).

High speed welding of thin sheet steels up to 5 m/min (16 ft/min) is

26

possible. Minimal welding fume or arc light is emitted. Practically no

edge preparation is necessary. The process is suitable for both indoor and

outdoor works. Distortion is much less. Welds produced are sound,

uniform, ductile, corrosion resistant and have good impact value. Single

pass welds can be made in thick plates with normal equipment. The arc is

always covered under a blanket of flux, thus there is no chance of spatter

of weld. 50% to 90% of the flux is recoverable

Limited to ferrous (steel or stainless steels) and some nickel based alloys.

Normally limited to the 1F, 1G, and 2F positions. Normally limited to

long straight seams or rotated pipes or vessels. Requires relatively

troublesome flux handling systems. Flux and slag residue can present a

health & safety concern. Requires inter-pass and post weld slag removal.

27

28

The project work is divided in to two parts:

Figure 1: Project Work Flow Diagram

29

Project Work

Cost Calculation

Labour Cost

Material

Cost

Maintanence Cost

Depriciation Cost

To Find The Ways To Reduce The Costs

2.3 Schedule of the project work:

30

Figure 2: Schedule of Project Work

3. LITERATURE REVIEW AND STUDY OF INDUSTRY

3.1 Introduction to Costing

The method of costing to be adopted depends on the nature of manufacturing activity.

There are various methods of costing. They are:

Standard costing

Marginal Costing

Job costing

Batch costing

Contract or Terminal costing

Single or output costing

Process costing

Operation costing

Departmental costing

Multiple costing

Historical costing

Standard Costing:

Under this technique, standard costs are established even before the actual

expenditures are incurred. Then the actual costs incurred are compared with the

standard costs and the differences between the two are calculated.

Marginal Costing:

The purpose of this type of costing is to study the relationship between cost, volume

and profit. It is also called as variable costing or differential costing.

31

Job Costing:

Under this method, work is performed against the individual orders accepted from the

customers. A distinct “Job” number is given for each order accepted.

Batch Costing:

Where small parts are manufactured in lots, it would be convenient to ascertain the

cost of each batch of articles so manufactured. Such type of costing is known as batch

costing.

Contract or Terminal Costing:

This is a method of costing applicable to contractors’ job.

Single or Output costing:

Where there is only one product, output costing is adopted. A cost sheet or a

production account is drawn, to show the cost of production of the product.

Process costing:

If a product passes through different stages of manufacture or processes, the method

of costing suitable is process costing. The special feature of this method is the

product at the end of a process becomes the raw material for the next process till it

reaches the last process.

Operation costing:

32

Under this method, the cost of each operation is calculated. This is suitable for

industries in which producing a product requires stages of operation.

Multiple costing:

It means combination of two or more of the above methods of costing. Where a

product comprises many assembled parts or components (as in case of motor car)

costs have to be ascertained for each component as well as for the finished product

for different components, different methods of costing may be used. It is also known

as composite costing.

Here, the multiple costing method is used for calculation of cost at TTS panel line.

33

3.2 Introduction to Shipping Industry

3.2.1 History of shipping industry

Commercial shipping can be traced back to the Phoenician merchants who

transported goods across the Mediterranean. The Venetians owned huge merchant

fleets from 1300 AD to 1500 AD. The Dutch held the largest shipping fleet from

1600 AD to 1650 AD. Till the nineteenth century, the shipping industry was

dominated by merchants. The common freight carrier service started in 1818 with the

launch of ‘James Monroe.’

The shipping industry boomed after the opening of the Suez Canal (1869), which

facilitated faster trade between Europe and Asia. In 1960, the first nuclear powered

cargo and passenger ship ‘Savannah’ was launched. From the 1970s to the 1980s, the

container shipping sector grew exponentially. The industry continued its growth,

especially in Asia, with Hong Kong inaugurating the world’s largest container port in

1989.

3.2.2 Industrial shipping Carriers:

Industrial carriers are vessels operated by large corporations to provide transportation

essential to the processes of manufacture and distribution. These vessels are run to

ports and on schedules determined by the specific needs of the owners. The ships

may belong to the corporations or may be chartered. For example, the Bethlehem

Steel Corp. maintains a fleet of Great Lakes ore carriers, a number of specialized

ships that haul ore from South America to Baltimore, Maryland, and a fleet of dry-

cargo ships that transports steel products from Baltimore to the Pacific coast. Many

oil companies maintain large fleets of deep-sea tankers, towboats, and river barges to

carry petroleum to and from refineries. The ships often operate under contracts of

affreightment.

34

3.2.2.1 Vessel Types

Merchant ships are classified as passenger carriers, cargo ships, and tankers. During

the height of passenger travel by ship, the largest as well as the most glamorous ships

afloat were the famed liners of the North Atlantic, which, beginning in the mid-19th

century, sailed regular schedules between the Americas and Europe. Competing in

speed as well as in size and appointments, such ships as the Mauretania, the Queen

Mary, the Queen Elizabeth, the United States, and the France gradually reduced the

time for the North Atlantic crossing to less than four days. Their size, from about

45,000 to 75,000 metric tons and up to 300 m (1,000 ft) in length, was gigantic by the

standards of the first half of the 20th century, but they have been dwarfed by the oil

tankers of the 1970s and '80s. Today's passenger liners operate principally in the

cruise trade.

Cargo Ships

Cargo ships carry packaged goods, unitized cargo (cargo in which a number of items

are consolidated into one large shipping unit for easier handling), and limited

amounts of grain, ore, and liquids such as latex and edible oils. A few passengers are

accepted on some cargo liners. Specialized ships are designed and built to carry

certain types of cargo, for example, automobiles or grain.

Container Ships

In the late 1950s container ships set the pattern for technological change in cargo

handling and linked the trucking industry to deep-Sea shipping. These highly

specialized ships carry large truck bodies and can discharge and load in one day, in

contrast to the ten days required by conventional ships of the same size. The rapid

development of the container ship began in 1956, when Sea-Land Service

35

commenced operations between New York City and Houston, Texas. Barge-aboard,

or lighter-aboard, ships, also called seabees (sea barges) or LASH (lighter-aboard

ships), resulted from an evolutionary development of the container ship. They are

capable of carrying about 38 barges, or up to 1,600 containers, or a combination of

containers and barges. Their design enables them to deliver cargo to developed or

undeveloped ports, without the need for berthing.

Tankers

Tankers, designed specifically to carry liquid cargoes, usually petroleum, have grown

to many-compartmented giants of a million metric tons and more. Despite their great

size, their construction is simple, as is, for the most part, their operation. A major

problem with the giant tankers is the severe environmental damage of oil spills,

resulting from collision, storm damage, or leakage from other causes. Specialized

tankers transport liquefied natural gas (LNG), liquid chemicals, wine, molasses, and

refrigerated products.

36

3.3 Introduction to PSL

Pipavav Shipyard Limited (PSL) is a testimony to the vision and active participation

of the private sector in India’s quest to become a major player in the global maritime

industry.

Covering over 200 hectares with approximately 720 m of sea front and 685 m of

outfit quay, PSL is the largest shipyard in India. It has one of the largest dry dock in

the world. Two Goliath cranes of 600 T capacity each, which service the dry dock

and the adjoining pre-erection berth, enabling PSL to handle up to 1200 T pre-

outfitted ship blocks. A host of other technologically advanced infrastructure and use

of modern shipbuilding process,m[l,.l.ses, including modular construction and line

heating technique, make PSL one of the most modern shipyards in the world.

Coupled with the above, PSL’s commitment is, uncompromising quality and an

increased focus on customer service to make PSL comparable with the best in the

world.

Vision

To make the Company one of the best in the world in every aspect with focus on Defence,

Offshore and Heavy Engineering in the coming decade and to contribute humbly towards

India becoming net exporter of warships, oil and gas assets.

Mission

To create visibility and value for all stakeholders on a sustainable basis by leveraging

on most advanced capabilities to exploit global opportunities.

37

3.3.1 Stake Holders

Promoter:

SKIL Infrastructure Ltd. (SKIL)

Foreign Companies:

SembCorp Marine Ltd.

Financial Institutions and Banks:

Infrastructure Leasing & Financial Service Ltd.(IL&FS)

LIC and LIC sponsored Mutual Funds (LIC)

Export Import Bank of INDIA(EXIM Bank)

IDBI Bank Ltd. (IDBI)

Sundaram BNP Paribas Mutual Fund

Foreign Institutional Investors:

Small cap World Fund, Inc.

New York Life Investment Management India Fund (FVCI),II LLC, Mauritius

American Funds Insurance Series Global Small Capitalisation Fund

Commonwealth Equity Fund Ltd.

The California Public Employees’ Retirement System

Battermarch Financial Management Inc.

The India Fund, Inc.

3.3.2 Association With World Leading Groups

SembCorp Marine, a leading global marine engineering and shipyard group,

has been advising PSL on yard layout and manufacturing processes.

38

Northrop Grumman Overseas Service Corporation, USA:The company

had signed a memorandum of understanding (MoU) with Northrop Grumman

Overseas Service Corporation, Delaware, USA. Northrop is one of the largest

defense companies in the segment with an expertise in defense systems,

airspace management systems, navigation systems, precision weapons and

marine systems. Pipavav Shipyard endeavors to indigenously produce military

hardware for India and other friendly nations with such partnerships.

SAAB Dynamics :Pipavav Shipyard has signed an MoU with SAAB

Dynamics AB as part of a defense co-production initiative taken by

Wallenberg Group in India. This will enable Pipavav to enter the army and air

force segments. SAAB Dynamics AB is a part of the Wallenberg Group,A

Swedish multinational company. The department of industrial policy and

promotion (DIPP) issued the license after screening by the ministries of home

and defense and other related agencies. The license allows the shipyard to bid

for construction of submarines, destroyers, frigates, LDP, coverettes as also

aircraft carriers

39

3.3.3 Business strategy

PSL’s long-term strategy is to have four pillars to

stand on, each capable of supporting the Shipyard

on its own. The Company has engaged in activities

in the following business sectors:

Commercial shipbuilding

Offshore fabrication and

servicing

Naval War-Ship Building

Ship repair

This strategy will insulate PSL from the the risks of relying on one market segment

alone, and also allow for profitable business opportunities in each segment to be

grasped as market conditions dictate.

PSL has been set up with the in-built flexibility to switch from one product type to

another, without compromising on the efficiency or cost-effectiveness of the yard

operations.

Accordingly, there will be capability to build and repair (dry dock & afloat) most

kinds of commercial ships from very large crude carrier to cape size bulk carrier and

large container ships.

In Naval shipbuilding and repair, PSL has the necessary infrastructure and facility to

build all kinds of naval vessels. Initially the yard intends to take up refit dry docking

and afloat repairs and later enter into conversions.

Given the increasing focus on offshore exploration for oil and gas around the coast of

India, and in the Middle East, the Shipyard has been designed to exploit the

40

opportunities that this sector has to offer. Our capabilities in this regard include

fabrication / construction of offshore platforms, SBM’s, rigs, jackets, vessels, etc. for

upstream oil and gas sector / companies both in India and abroad. The yard has

already started construction of 12 offshore supply vessels for ONGC and are

competitively bidding for high end anchor handlers. The dredger market is another

potential under consideration.

At its site at Pipavav, PSL has installed and commissioned some of the most modern

shipbuilding equipment that can be purchased – inter-alia, from leading companies in

Norway, Japan, Italy and Norway. Two Goliath cranes, each having a lifting capacity

of 600 Ton, the largest in India, are also erected at the site.

This modern plant, when combined with PSL’s highly experienced management

team, comprising Indians and multi-national expatriates and the competitively priced

skilled labour available in India, have enabled PSL to make an impressive beginning

in the various business segments.

41

3.3.4 Infrastructure

3.3.4.1 Dry Dock:

The Pipavav Shipyard originally consisted of two wet basins – one

approximately 680 meters long and 65 meters wide, and the other

approximately 680 meters long and 60 meters wide.

The first of these has been converted into a dry dock measuring 662 meters

longs, and 65 meters wide.

Two Goliath cranes with a span of 150 meters & height of 175 meters together

capable of handling up to 1200 Ton block, and two Level Lifting cranes are

erected to service this dry dock.

To facilitate afloat fit-out and commissioning of ships, including afloat repairs,

a 300–meter long quay, with the capacity for berthing on both sides, has been

constructed with adequate draft and serviced by a Level Lifting crane. The

entrance of the dry dock also has a 100 meter extension track for the Goliath

cranes for unloading heavy machinery and equipment weighing up to 1200

Tons directly from ships and heavy lift barges.

The dry dock and surrounding facilities are located on 103.92 hectares

(approximately 256.79 acres) adjoining approx 720 meters of dedicated waterfront.

This entire area has been approved as an Export Oriented Unit (EOU) by the

Government of India.

42

3.3.4.2 Workshop and Facilities:

Approximately 4.5 kilometers away from the dry-dock, and located on 95

hectares of land in a Special Economic Zone approved by the Government of India, a

state of the art block-making facility has been set up for fabrication of hull blocks

By having located the workshops and fabrication facilities in a SEZ away from the

dockyard site, PSL has the dual advantage of having been able to reserve the

maximum area of water frontage available at the shipyard site for ship assembly,

offshore fabrication and ship repair activities whilst carrying out its fabrication and

other similar activities through a highly tax-efficient SEZ unit.

The blocks manufactured at this site are pre-outfitted to the maximum extent. This is

done in the ideal working conditions offered by covered fabrication shops. When

ready, the blocks are moved to the dock-side for pre-erection of mega/giga-blocks

followed by lowering them on the dock floor for final assembly and vessel launching.

The block-making site is equipped with, among others, the following facilities:

A very large fabrication facility, spread over an area of 235 acres, having closed

working areas of approximately 2 million square feet

The fabrication facility can cut steel and fabricate blocks of up to 144,000 Ton

43

per annum, as it  is equipped with :

270 meter long panel line with one side welding machine from TTS Norway

8 Plasma/gas cutting machines from Koike, Japan

2  Marking machines from Koike Japan

Auto blast and paint line of 185 m length and

9 blast and paint cells from Hanfu China

Profile cutting machine from HGG Netherlands

Ring frame bender from Nieland Netherlands

Horizontal bending press for ring frame from Himalaya, India

2 Hydraulic presses having capacities of up to 1600 Ton from Himalaya, India

2 Plate straightening machines from Himalaya, India

28 EOT cranes having up to 150 Ton capacity each

30 Semi gantry cranes having up to 7 Ton capacity each

3 Gantry cranes having up to 60 Ton capacity each

3 Transporters,  one of 370 tons capacity & two of 200 tons capacity each

In addition, the Shipyard’s utility infrastructure includes the following:

2 x 66 KVA power line along with switchyard, transmission and distribution systems Water pipeline and fire fighting system along with pumps, overhead tanks and pumping systemsLow pressure compressed air systemInfrastructure relating to consumable gases such as O2, CO2, LPG and nitrogen

3.3.5 Products of PSL

Commercial Shipbuilding:

44

Offshore Platforms:

Naval Vessels:

45

Ship Repair:

4. OBJECTIVE OF THE PROJECT

TTS panel line is a 270 meters long panel line at where blocks are prepared by

cutting, block fitting, welding, sub assembling and grinding. So, there is a very large

46

cost company is paying to the employees, contractors and suppliers for TTS panel

line.

The main objective of the work is to be aware of how the calculation of cost has been

done at corporate level practically and put my as possible efforts to find the ways to

reduce these cost.

5. RESEARCH METHODOLOGY

47

Research methodology is a methodology for collecting all sorts of information &

data pertaining to the subject. The objective is to examine all the issues involved.

The methodology includes the overall research design, & fieldwork done & finally

the analysis procedure.

Usefulness of the study

This study will be useful to company to calculate the cost at TTS panel

line and take effective steps to reduce these costs.

The study will also be useful to increase my knowledge.

Research Technique:

Research technique used is exploratory as well as constructive. The subject of the

study deals with defining the problem and understanding all the issues involved and

constructive because it gives an ongoing solution for the problem.

Observational Study:

The research was done by observing all the techniques, block designs and

procedures at the TTS panel line and then the problem was defined.

In Depth Interview:

The research also includes asking the questions to the employees and workers at the

plant and to know exactly that what problem they are facing at the plant.

6. DATA ANALYSIS AND INTERPRETATION

Cost Calculation

48

6.1 Labour Cost

The first task of the project is to calculate the labour cost. After calculation, we found

that in TTS panel line, there are 56 PTSPL employees, whose average salary is

`25,000 /month and the lists of employees are as under:

Table 1: Employee Distribution

No.of

employees

Designation of employees

36 Welders

4 Fitters

3 Supervisors

4 Engineers

6 Riggers

1 Incharge

So, the total fixed labour cost of PTSPL employees per month = 25000 × 56

= `13,50,000

Half the work has been given to the shakti construction on the contract basis. And it

is on tonnage basis. so shakti construction have their own employees who are

working on TTS panel line. The work contactor is doing is grinding, block fitting and

sub assembling. The cost of the work is as follows:

Grinding = `925/tone

Block fitting = `3650/tone

Sub assembly = `3650/tone

The block fitting should be calculated as 30% of the total production.

49

The total production, sub assembly and block fitting in tonnage are given in the

following table and chart:

Table 2: table of total production, sub assembly and block fitting

Month(2011) Total production(ton)Sub assembly(ton)

Block fitting(ton)

January 501.9 118 150.57

February 402.8 181.7 120.84

March 797.3 322.7 239.19

April 773.4 253.7 232.02

May 431 409 129.3

jan feb mar apr may0

100

200

300

400

500

600

700

800

900

total productionsub assemblyblock fitting

Figure 3: Production Summary

So, variable labour cost given to contractors is as follows:

50

Table 3: variable cast data

Month(2011) Sub assembly(`) Block fitting(`) Grinding(`)

January 4,30,700 5,49,580 4,64,257

February 6,63,205 4,41,066 3,72,590

March 11,77,855 8,73,043 7,37,590

April 9,26,005 8,46,873 7,15,395

May 14,95,405 4,71,945 3,98,675

jan feb mar apr may0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

sub assemblyblock fittinggrinding

Figure 4: Variable Costs

So total labour cost at TTS panel line:

51

Table 4: Total Cost Data

Month(2011) Fixed cost(`) Variable cost(`) Total cost(`)

January 13,50,000 14,44,537 27,94,537

February 13,50,000 14,76,861 28,26,861

March 13,50,000 27,94,400 41,44,400

April 13,50,000 24,88,223 38,38,223

May 13,50,000 23,66,025 37,16,025

jan feb mar apr may0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

fixed costvariable costtotal cost

Figure 5: Total Cost

Labour cost in 2011 is as follows:

52

Table 5: Labour Cost

Month(2011) Labour Cost(`/ton)

January 5567.9

February 7018.0

March 5190.5

April 4962.9

May 8621.8

Total Monthly Average Labour Cost In 2011 = `6273.42/ton

6.2 Material Cost

For calculation of material cost, we did very complex and tricky job. Because without

this job, we could not get the material cost. Following materials are used in TTS line.

53

Wire Spool (Welding Material)

Gouging Electrodes

Welding Screen

Safety Goggles

Contact Tips (Panasonic)

Contact Tips (ESAB)

Safety Gloves

O2 Consumption

CO2 Consumption

LPG Consumption

Flux Consumption

At TTS panel line, the most consuming material is a wire spool. So, our first task is to

find how many wire spools are used in the month.

Procedure for calculating the wire spool (welding material)

Step 1: So, for calculating the consumption of wire spool, we have one thumb rule

that with each wire spool, the welder can make an average of 40 meters of welding.

Step 2: Our second task is to find out how many meters of welding is needed in a

block. Each block needs different meters of welding.

Step 3: So, now we need to see, in a month, how many blocks are manufactured.

54

Step 4: For that, we took a design of each block and according to the design, we

calculated how much meters of welding is essential for making this block in the

presence of the engineers.

Step 5: And if we are not getting the welding meter length directly by design, we

have to follow the equation to find the length of the welding. The equation is

weight=L× h× t ×7.856

Where, H= Height

L= Length

T= Thickness

Step 6: Add all the meters and divided it by 40 (thumb rule), we got the number of

wire spool used. Each wire spool contains 15 kg of wires.

Example of a practice we did for calculating meters of welding for a block no.521

Here, it is given the welding length of all the components used in the block no.521

S2 = 0.9*2 = 1.8 m

E1 = 0.314*2 = 0.628 m

E3 = 1.020*2 = 2.040 m

Calculation for FR44A, FR50A, FR56A:

S1 = 2.276*2*3 = 13.7 m

S10 = 0.748*2*3 = 4.488 m

S11 = 1.031*2*3 = 6.186 m

S2 = 1.878*2*3 = 11.27 m

55

S3 = 1.481*2*3 = 8.886 m

S4 =1.069*2*3 = 6.42 m

S5 = 4.10*2*3 = 24.6 m

S6 = 3.2*2*3 = 19.2 m

S7 = 1.2*2*3 = 7.2 m

S8 = 0.8*2*3 = 4.8 m

S9 = 0.82*2*3 = 5.0 m

But joint = 180 m

T bar welding = 303.5 m

Straight welding = 1616.8 m

So, total welding meters = 2240.6 m

So, total welding wire spool = 56.015 wire spool

So, wires used in kg for the block no.521 = 840.25 kg

The cost of wire = `160/kg

So, total cost of welding material for the block no.521 = `1,34,400

Likewise, we did the same practice for each and every block for two months and then

we got one more thumb rule that the length of welding meters is nearly 2% of the

weight of the block. So if the block is of 60,000 kg then the welding meters are 12,00

metes.

56

So by these thumb rule we got the cost of welding material for 2011 as given in the

table:

Table 6: Cost of Welding Material

Month Of 2011 Weight Of Wire Spool

(Kg)

Cost Of Wire Spool (`)

January 10,038 16,06,080

February 8,056 12,88,960

March 15,946 25,51,360

April 15,468 24,74,880

May 8,620 13,79,200

So, average welding material cost in 2011 = `15,71,016 /month

Then for calculating the cost of O2, CO2, LPG and flux:

Table 7: Consumption of gases by weight

Month O2

consumption

(kg)

CO2

consumption

(kg)

LPG

consumption

(kg)

Flux

consumption

(packet)

January 7.465 13,751 6,160 45

February 6,885 18,856 6,160 51

March 8,172 21,470 6,160 110

April 9,222 20,922 6,160 83

May 12,297 27,404 6,160 77

O2 consumption was given in the cubic meters, we converted into first kg and then

cost of O2 is also converted by us in Rs/kg from Rs/cubic meter by using following

equation:

1 cubic meter = 0.775 kg of O2

57

Cost of O2 → `12.67 = 0.775 kg

Cost of CO2 → ` 8.5 = 1 kg

Cost of LPG → ` 63.51 = 1 kg

Cost of Flux → `770 = 1 packet

Table 8: Cost of gas consumption

Month O2

consumption

(`)

CO2

consumption

(`)

LPG

consumption

(`)

Flux

consumption

(`)

January 1,22,061 1,16,885 3,91,221 34,650

February 1,12,579 1,60,278 3,91,221 39,270

March 1,33,627 1,82,495 3,91,221 84,700

April 1,50,793 1,77,841 3,91,221 63,910

May 2,01,064 2,32,937 3,91,221 59,290

As same as welding material and flux and gases consumption, we found other

material cost as following:

Table 9: Material Cost

Material Name Average Material Cost(`)

Total Wire Spool 15,71,016

Gouging Electrodes 2,600

Welding Screen 375

Goggles 2,000

Contact Tips (Panasonic) 10,500

Contact Tips (Esab) 3,200

Gloves 2,000

O2 Consumption 1,44,024

58

CO2 Consumption 1,54,087

LPG Consumption 3,91,221

Flux Consumption 56,364

Total Monthly Average Material Cost in 2011 = `23,37,387

6.3 Maintenance Cost

According to the manager of TTS line, calculation of maintenance cost per month is

very tedious, complex and difficult task. Because there are lots of parts are used for

maintenance over here and all the parts have different cost. No one knows when the

maintenance parts of machines would be needed. For example, in any month, any

machine can be damaged and repair and maintenance cost can be occurred. So,

calculation of maintenance cost per month would not be accurate.

59

For calculation of maintenance cost per month, we calculated the maintenance cost of

whole year and then divided it by 12, we got average monthly maintenance cost. And

for yearly maintenance cost, company generally prepares a budget every year. This

year’s budget for maintenance cost at TTS panel line = 5% of the value of whole

panel line.

The value of TTS panel line = `40,00,00,000

So, maintenance cost for year 2011 = `2,00,00,000

Total Monthly Average Maintenance Cost in 2011 = `16,66,666

6.4 Depreciation Cost

Depreciation cost can be calculated widely by two methods:

Straight Line Method

Written Down Method

Here, we used Straight Line Method for calculation of depreciation cost by using the

equation:

60

The value of TTS panel line = `40,00,00,000

The useful life of TTS panel line = 20 years

Scrap(residual) value of TTS panel line = `6,00,00,000

So by SLM method, the depreciation cost in 2011 = 40,00,00,000−6,00,00,000

20

= `1,70,00,000

Total Monthly Average Depreciation Cost in 2011 = `14,16,666

Average Total Monthly Cost at TTS Panel Line

LABOUR COST = `34,62,819

MATERIAL COST = `23,37,387

MAINTENANCE COST = `16,66,666

DEPRICIATION COST = `14,16,666

61

Average Total Monthly Cost at TTS Panel Line = `88,83,538

And, monthly average production of TTS panel line = 581 ton

so, labour cost per ton = `5,960

Material Cost per ton = `4,023

Maintenance Cost per ton = `2,868

Depreciation Cost per ton = `2,438

Average cost per ton = `3,822

So, For Production of 1 Ton, TTS Panel Line Costs `15,289

The Ways to Reduce the Cost At TTS Panel Line

1. By increasing the tonnage:

For example,

In January, the production at TTS panel line = 501.9 tone

62

Salaries paid to PTSPL employees = `13,50,000

So , fixed money paid for production of 1 tone = `2,689

Whereas,

In March, the production at TTS panel line = 797.3 tone

Salaries paid to PTSPL employees = `13,50,000

So, fixed money paid for production of 1 tone = `1,693

So, average monthly reduction = `5,81,000 as per month production is 581 tone.

So, by increasing the tonnage, we had reduce labour cost of `1,000 per tone in

March and in upcoming future, if we produce more blocks in a month, we can

gain more profit by reducing the cost of labour.

2. Material (steel plates) should be available at TTS line on time:

During my training period, I have heard lots of time that material has not reached on

time. If the material would be delayed, no one can work efficiently. All costs would

be increased if the steel plates would be late.

For example,

63

P011 522/532 had been started very late because of delay in material supply. So all

other tasks would be late and because of this, it will cause delay in dry dock to

complete the ship. If this type of problems would be continue in future then it will

cause great impact on company’s image as well as company’s cost. So, for that,

material management should be done accurately from top to bottom. Proper planning

is required by the top management.

3. There is a space of reduction in contractor’s rates:

At TTS panel line, sub assemble, block fitting and grinding work is given to the

Shakti contractors.

The rate of Shakti contractor for a particular work is as follows:

Grinding = `925/tone

Block fitting = `3650/tone

Sub assembly = `3650 /tone

The block fitting should be calculated as 30% of the total production.

For example,

We have calculated the cost of work Shakti construction had paid to their employees

for 350 tone:

They employed 38 employers for working with 350 tone and the average salary is

`17,000

For 350 tone, the payment given by shakti construction to their employees =

`6,46,000

64

Cost of consumables which Shakti construction is using for grinding and other tasks

= `1,75,000

So, total cost of Shakti construction for 350 tone = `8,21,000

And payment given by PSL to Shakti construction for 350 tone is,

Grinding = `3,23,750

Sub assembly = `3,19,375

Block fitting = `3,83,250

Payment paid to shakti construction by PSL = `10,26,375

So, total profit of Shakti construction = `2,05,375 for 350 tone

= `590 per tone

So on an average, Shakti construction is earning `3,42,790 form PSL as average

production at TTS panel line = 581 tone.

So, there is a scope for reducing the rate of sub assembly, grinding and block

fitting. Or we can employ that much skilled persons by our own and we can

reduce this cost.\

4. No proper arrangement of material keeping:

Here, at BMS site, there is no proper arrangement for keeping the steel plates. All the

plates are put together like a bunch. And because of dust, moisture and humidity, if

one plate get started of pitting, all other plates easily get pitted. And the pitting is the

biggest difficulty at TTS panel line.

And because of pitted material, the TTS panel line had paid a lot. There is a chances

of rejecting a block due to the pitting. Pitted material is increasing the labour cost.

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And for removing the pitting, grinding charge specially for pitting is `110/ square

meter. By converting square meter into kilograms, We found that a square meter =

165 kg.

For this year average 60% of plates get pitted. So nearly 385 tone plates needed

grinding. And the cost of grinding these material is `2,56,666.

So, for reducing the troubles by pitted material, the material should be kept in a

proper SHELF. (as shown in figure.) This is a figure of another shipyard where the

steel plates are kept in shelf. Where they are saving their nearly 50% of grinding cost.

Figure 6: Shelf Stacking

There should be a shelf of each and every plate (like 12 mm, 14 mm, 16 mm, etc.).

So, if water will touch to the plate, it will easily go to the downside of plate and not

make much harm to the plate.

And if the plates are kept in shelf, then it would be very convenient to take. If the

plates are in bunch and put together on land then if I want to get the plate which is at

last then it would be very difficult to take it out. And if the plates are in shelf, then it

would be easy to get any plate. By this way, we can save `1,28,333

.

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5. Reduction of cost in wire spool:

Here, 1 wire spool (welding material) of 15 kg is having 1800 meters length of the

welding wire. For welding in blocks, there are criteria. One criteria for welding is: leg

length of welding should be 6.5 mm. Less than 6.5 mm should not be allowed.

So, for avoiding the mistakes, the welders generally make the welding having the leg

length of nearly 7.5 mm.

For 6.5 mm leg length, 35 meters of welding material is required for 1 meter welding.

And for 7.5 mm, 45 meters of welding material is required. So, we are loosing 10

meters of welding material per 1 meter welding by the welders. So, in 1 kg of

material 20 meters of welding material is wasted by the welders. And Average

monthly consumption of wire spool is 11,625 kg

Because of these, per month, 23,250 meters of wires are wasting. So, nearly 13 wires

pools get wasted which costs `32,135

If we train the welders perfectly and welders put more concentration on proper

welding, then we can save `32,135 per month from material cost.

6. Reduction of cost in CO 2 consumption:

Here, the regulator is assembled for regulating the CO2 consumption. The regulator is

made up of aluminium and there is a connector between the hose pipe and the

regulator which is known as nipple which is made up of brass. Sometimes because of

lacking of proper threading, damaged in hose pipe and the material difference of

regulator and nipple, on an average 20% of CO2 is leakage.

So, per month, there is an average CO2 consumption of `30,800.

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For, solving this problem, we should use regulator and nipple of same material and

threading of nipple should be done properly as well as if the hose pipe get damaged

then the hose pipe should be changed or repaired quickly.

7. Inconsistent quality of contact tips:

From material handling department, they are providing a different quality contact

tips.

They have two types of contact tips having different quality and different costs. The

rate of contact tips are as follows:

Contact tips (panasonic) = `70

Contact tips (ESAB) = `32

Because of inconsistent quality of contact tips, 20-25 contact tips get wasted worth of

`650-`700.

8. Reduction in cost of O 2 consumption:

Many a times, I have found that the workers working with O2, they are wasting the O2

gas flow for cleaning the material. This O2 gas should not be used for cleaning. It is

only for cutting.

Because of this mishandling of O2 gas flow, there is a 5% loss of O2 which costs

nearly `7,200.

So, by proper handling, per month, saving of `7,200 can be possible.

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Possible Total Cost Reduction Per Month = `11,22,958

7. CONCLUSIONS

For mass production in less time with higher accuracy of Flat Blocks of the ship can

be manufactured by TTS Panel Line only and for that cost control should be very

necessary. For cost control, there must be a calculation of all costs. The calculation of

cost has been done by the multiple costing method.

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At TTS panel line, the mangers control the labour cost, material cost, maintenance

cost as possible as they can. But there is a little more scope of reduction in cost at

TTS panel line.

8. RECOMMENDATIONS

The reduction of cost at TTS panel line can be done as follows:

By increasing the tonnage

Material (steel plates) should be available at TTS line on time

There is a space of reduction in contractor’s rates

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No proper arrangement of material keeping

Reduction of cost in wire spool

Reduction of cost in CO2 consumption

Inconsistent quality of contact tips

Reduction in cost of O2 consumption.

Labour cost:

The previous average monthly labour cost = `36,44,857.

The possible reduction in labour cost can be achieved by:

Table 10: reduction in labour cost

Particular Cost (`)

Increasing the tonnage 5,81,000

Reducing Contractor’s wages 3,42,790

Proper Material Storage (using shelves) 1,28,333

Total Reduction 10,52,123

After applying the solution, the new labour cost can be = `25,92,734

Material cost:

The previous average monthly material cost = `23,37,387.

The possible reduction in material cost can be achieved by:

Table 11: reduction in material cost

Particular Cost (`)

Reducing the cost of CO2 consumption 30,800

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Reducing the cost of wire spool 32,135

Assuring consistent quality of contact tips 700

Reducing the cost of O2 consumption 7,200

Total Reduction 70,835

After applying the solution, the new material cost can be = `22,66,552

The total average monthly cost is currently = `88,83,538. By implementing these cost

reductions, a total cost reduction of `11,22,958 per month is achievable.

The total possible percentage reduction can be of 12.6%.

9. REFERENCES

http://www.pipavavshipyard.com/

http://en.wikipedia.org/wiki/Cost_accounting

http://www.theglobaltutors.com/cost-accounting/methods-of-costing.aspx

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http://www.bharatishipyard.com/

http://www.abgindia.com/

http://www.economywatch.com/world-industries/shipping-industry.html

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