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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited

WORK IMPROVEMENT PROJECT

CRITICAL PATH ANALYSIS -

TO REDUCE DELIVERY TIMES IN

SHIPBUILDING COMPANY

M/S GOA SHIPYARD LTD.

BY

SUYOG POWAR – 34

UNDER THE GUIDANCE OF –

PROF. RAJ AMONKAR

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ACKNOWLEDGEMENT

I take this opportunity to thank Prof. Raj Amonkar who has

been instrumental in motivating me and guiding me all

through this work improvement project.

I also would like to thank the Officer In-charge (Outfitting

Hull section) of Goa Shipyard Ltd. for allowing me to carry

out this study and providing the required assistance and

guidance for successfully completing this project.

Suyog Anand Powar

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PROJECT SYNOPSIS

In today’s world of increasing competition, it is very essential that one make’s the best

use of the scarce resources that is available. Shipbuilding Industry in India is a very

labour intensive industry and hence a small reduction in production time can result in

huge savings. Also, with Indian Shipyards competing globally for foreign orders it is

imperative that they deliver ships on time. Indian Shipyards over the past have been

suffering because of their inability to maintain delivery schedules and is therefore unable

to take advantage of the low labour costs as compared to other shipyards around the

world.

In this project, I have taken up M/s Goa Shipyard Limited, India’s premier defence

shipyard to study the production time and the benefits that can be reaped from doing so. I

shall be using critical path analysis as a tool in achieving this objective and shall also

bring into light the costs involved in doing so along with the conclusions and

recommendations.

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EXECUTIVE SUMMARY

With the large boom in the shipbuilding industry, and the requirement of new vessels in

Indian navy and Indian Coast Guard, Goa Shipyard Limited is forced to deliver ships

ahead of schedule so as to get orders ahead of its competitors Mazagon Dock Limited,

Mumbai and Garden Reach Shipbuilders & Engineers, Kolkata. In view of this, we are

making an attempt to understand the critical path involved in the construction of hull,

which is a major requirement for launching of the vessel. Also, we shall attempt to apply

the concept of project crashing so as to reduce the time required for delivery of the ship,

and hence ensure more orders for Goa Shipyard Limited.

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TABLE OF CONTENTS

SR. NO.

TITLE PAGE NO.

1 Profile – Goa Shipyard Limited 62 Methodology Involved 113 Introduction – Critical Path Analysis 124 Data Collection 155 Network Construction 166 Project Crashing 187 Analysis 238 Conclusion 249 Recommendations 2510 List of figures/tables 26

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COMPANY PROFILE:

Goa Shipyard Ltd, an ISO 9001 : 2000 Company is one of the leading shipbuilding yards

on the west coast of India. Goa Shipyard Limited (GSL) was established in 1957 is today

a leading shipyard on the West Coast of India, meeting the exact requirements of varied

customers in the field of design, development, construction, repair, modernisation, testing

and commissioning of ships.

Initially, it was started as a small barge building yard. However, GSL has grown in

reputation as one of the most sophisticated ship builders in the country.

The inherent strengths of GSL are:

CAD/CAM centre.

State-of-the-art manufacturing facilities

A work force of over 2000 skilled personnel.

Over 175 qualified engineers and naval architects.

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GSL, can not only build traditional military ships and marine crafts, but also next

generation vessels - Surface Effect Ships, Hovercrafts, High Speed Aluminum Hulled

Vessels, Pollution Control Vessels, Advance Deep sea Trawlers, Fish Factory vessels,

Catamarans, Pleasure submarines and offers a whole range of marine products and

services.

SERVICES PROVIDED

1) SHIPBUILDING

GSL, undertakes design, construction of a wide range of ships. Namely, Advanced

Offshore patrol vessels, Missile crafts, Extra fast attack crafts, Fast patrol vessels,

Offshore patrol vessels, passenger vessels, landing crafts, survey vessels, and Oil tanker.

2) SHIP REPAIRS AND REFIT

GSL has been providing ship repair and refit services right from its inception in 1957, as

a small barge repairing yard. Over the years GSL has diversified into repairs of various

kinds of vessels. Namely Tugs, survey vessels, fast patrol vessels, extra fast attack crafts,

Advanced offshore patrol vessels, Landing craft utility vessels, Passenger vessels and

Sail training ships.

Ship repair and refits range from routine maintenance, repair and surveys to major steel

renewal, engine replacement, total machinery overhaul and extensive damage repair.

The repair division is ably supported by a team of naval architects and engineers. In-

house welders, pipe fitters, structural fitters, electricians and carpenters are employed to

ensure high quality, cost efficiency and rapid turn-around.

By using standard equipment and developing an excellent rapport with a worldwide

network of suppliers, GSL has devised a rapid response program for expeditious supply

of spare parts and prompt service, thus cutting down costly down time.

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3) SHIP MODERNISATION/ SHIP CONVERSION

The shipyard offers the facility of ship modernization and conversion which is fast

gaining precedence over new construction. Services ranging from replacing weapons and

sensors to reengineering and installing CCD (Camouflage Concealment and Deception)

technology on platforms enabling combatants to increase the role worthiness and punch

of existing platforms, exponentially. GSL also undertakes mid-life modernization and

conversion of ships.

4) GENERAL ENGINEERING WORKS

Some of the areas of general engineering works carried out at GSL are :

a) Controllable Pitch Propellers (CPP) System

1. Marketing, Procurement & Sales of CPP Systems and spares

2. Indigenisation of CPP equipments & spares

3. After sales services and providing assistance to customers for vessels with stern

gear systems.

4. In house Assembly & Testing and tuning of CPP System, before supplying to the

customers.

5. Co-ordination in respect of design, manufacturing, inspection, supply of CPP

Systems and spares

b) Damage Control Simulator:

To Supervise the execution of DCS work and conduct final trials of DCS.

c) Remote Control System:

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1. Product support to Navy, Coast Guard by way of supply of spares and services for

routine maintenance and major overhauls.

2. Indigenization and remote control system wherever applicable / required.

FACILITIES AT GSL

BUILDING BAYS

GSL has three large self supporting all weather building bays with a working floor area

over 10,000 sq.m. With a maximum length of 200 m, an inside width of 25 m. and

craneage capacity of upto 40 tonnes, these bays are fully equipped for construction,

modernisation and repair of all types of naval crafts and medium sized commercial

vessels.

SLIPWAYS

GSL has four slipways having dimensions 216M x 22M, 182M x 22M, 119M x 29.6M

and 79M x 19.6M] Capable of launching and docking vessels having drafts upto 5M and

docking weight upto 2500tons.

OUTFITTING JETTY

The 180 m. long jetty is equipped to carry out outfitting and basin trials of ships to the

highest ship building standards.

STEEL PREPARATION SHOP

Complementing the hull fabrication bays is a modern steel preparation shop equipped

with CNC Plasma cutting machines, automated shot blasting and priming plant and

processor-controlled bending machines. Steel, Aluminium and other non- ferrous plates

are cut by computer controlled plasma arc cutting machines for a precise fit and finish.

ALUMINIUM FABRICATION SHOP

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Aluminium alloy fabrication and welding procedures are blended with new ship

construction processes with the installation of an exclusive aluminium workshop. Highly

skilled technicians and production workers ensure consistently high quality of output.

CAD/ CAM

GSL's CAD/CAM centre has state-of-the-art computer hardware and world class

TRIBON shipbuilding software. All production information from the CAD/CAM centre

is directly fed to the CNC steel cutting and pipe bending machines. To enhance

productivity, GSL is adopting “Modular Construction Techniques".

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METHODOLOGY INVOLVED

Firct of all, we have divided the ship into a number of blocks. Each block will have the

same activities. These blocks are simultaneously manufactured so as to reduce the time.

For e.g. In the normal case, upper decks can be fabricated only when the lower decks are

ready. This affects the manpower utilization thus resulting in huge losses. Now, if all the

blocks are manufactured independently and then assembled a lot of valuable time will be

saved. Here, due to limitation of time we shall do the Critical Path Analysis of only one

block and the same may be applied to the other blocks.

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INTRODUCTION - CRITICAL PATH ANALYSIS

NEED FOR SYSTEMATIC APPROACH

A project, be it a construction work, or design and development of a prototype or any

turnkey project consists of a large number of activities whose scheduling by conventional

methods is difficult. Projects that are not scheduled properly generally tend to extend

beyond the contract period which in turn results in:

Increased investment in work in progress

Delay in invoicing thus reducing working capital

Increases fixed manufacturing expenses as men and machines are employed

beyond the economic time span

A number of scientific tools are available for planning but the planning of rojcts is best

performed through a well-known technique called Critical Path Analysis.

WHAT IS CRITICAL PATH ANALYSIS?

Critical Path Analysis is a synthesis of two independent techniques: Programme

Evaluation and Review Technique (PERT) and Critical Path Method (CPM). PERT was

developed by Naval Engineers of USA Navy in charge of Polaris Sub-marine Missile

Project in 1958. CPM was developed by Morgan Walker of Du Pont and James Kelly of

Ramington Rand (USA) in 1957 for use in planning and scheduling of the construction of

a chemical plant.

Though the two techniques were developed independently, they have many features in

common and are now combined into a technique called Critical Path Analysis (CPA).

DIFFERENCES BETWEEN PERT NETWORK AND CPM NETWORK:

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1. PERT is event oriented while CPM is activity oriented

2. PERT provides for an allowance for uncertainty while CPM does not.

3. Activity times in CPM technique are related to costs while it is not so in PERT

since it is event oriented.

ADVANTAGES OF CRITICAL PATH ANALYSIS

1. Forces a thorough pre-planning. Each and every activity comprising a project is

identified and recorded.

2. Increases coordination of tasks as technological relationships between the

activities suggest which activities can run simultaneously and which should

succeed others.

3. Helps computations of different project durations for different level of resources

and thereby select a plan that minimizes total project cost.

4. Indicates optimal start and finish times of each activity of the project

5. Defines areas of responsibility of different departmental heads for timely

execution of the project

6. Facilitates progress reporting and limits unnecessary discussion at the progress

meetings to minimum

7. Identifies trouble spots often in advance and applies remedial measures.

8. Enables plan to be revised in accordance with changing circumstances

9. Helps prevent cost overruns.

STEPS IN USE OF CRITICAL PATH ANALYSIS:

1. Activity Identification: Break down a project into a set of identifiable activities.

2. Activity Relationships: Establish technological relationships between activities.

3. Network construction: Construct an arrow diagram called network

4. Activity Time Estimation: Estimate time duration of each activity of the project.

5. Network Time Analysis and Activity Float Analysis: Identify critical path, critical

activities and slack of non-critical activities.

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6. Probability Aspects of Project Planning: If the activity times are deterministic,

find the expected duration of the project. If no, find the expected duration of the

project and the probability of completing the project by a target date.

7. Project Crashing: Collect activity time cost data. i.e. In case of repetitive projects

where in time and cost of each activity is known with certainty, crash the project

to its minimum duration.

8. Resource Allocation and Resource Levelling: Review resource requirements and

ensure that resource requirement of all activities does not exceed resource

availability and requirement of the resource during the duration of the project is as

uniform as possible.

9. Project Scheduling: Prepare a time schedule for the activities of the project.

10. Project Monitoring: Review progress periodically and expedite, if required.

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DATA COLLECTION

BLOCK BUILDING ACTIVITIES:

The list of activities along with their sequence of occurrence and the duration taken by

each activity as per the discussion held with Officer in Charge (Hull) is as follows:

Activity

Code

Activity Description Depends

On

Duration in days

A1 Drawings for the block - 15 days

A2 Draw materials from stores A1 3 days

A3 Cutting of plates for skids of block A2 2 days

A4 Cutting for plates for block A2 3 days

A5 Floor marking for block and skid

erection

A1 6 days

A6 Fabrication and erection of skid

for block

A3, A5 8 days

A7 Inspection of skid by Quality A6 2 days

A8 Fabrication of Components A4 10 days

A9 Running welding of components A8 7 days

A10 Assembly of components A7, A9 10 days

A11 Inspection prior welding by

Quality and class surveyor

A10 2 days

A12 Rectifications of Dry survey

defects by Quality and Class

Surveyor

A11 7 days

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A13 Final welding of block A12 8 days

A14 Releasing of block A13 3 days

A15 Shifting of block to erection site A14 2 days

TABLE 1

NETWORK CONSTRUCTION:

A network is a graphical representation of activities comprising the project. The

network is formed by a series of connected arrows and circles which give

technological relationships to the activities involved.

The most common approach in drawing a network is to start with the first activity and

draw the subsequent activities as per relationships. It consist of the following 7 steps:

1. Prepare a list of activities of the project.

2. Establish technological relationships between the activities. List all the

activities in the sequence in the second column and the corresponding

activities on which they depend in the first column.

3. Connect the first activity in the first column to the activity opposite to it in the

second column. Locate the activity connected back into the first column and

join this activity to the activity opposite to it in the second column. Rrepeat

the process till one sequence is covered which gets first activity chain.

4. Start with the next activity from the top in the first column which has not been

connected in the first sequence and follow up step (3) complete the sequence

to obtain next activity chain.

5. Repeat step (4) over and over again until all activities in the first column have

been connected.

6. Build up network from activity chains.

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FIG. 1

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A1

A3

A6

A7

A2

A14

A11

A12

A13

A10

A15

A5

A9

A8

A4

2

3

8

7

2

10

2

8

2

3

15

6

3

10

7


PATH LENGTH OF TIME (IN DAYS)

A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 15+3+2+8+2+10+2+7+8+3+2 = 62

A1-A5- A7-A10-A11-A12-A13-A14-A15 15+6+2+10+2+7+8+3+2 = 55

A1-A2-A4-A8-A9- A11-A12-A13-A14-A15 15+3+3+10+7+2+7+8+3+2= 60

Hence, the first path is the critical path because it requires the longest time i.e. 62 days

for completion.

PROJECT CRASHING

Critical path measures the expected duration of the project and identifies the activities or

the events which need attention in completing the project. In some cases, it is desirable to

cut down the total project time. This aspect of project planning is called project crashing.

Project Crashing may be carried out for one or more of the following objectives:

1. To complete the project in the least possible time. E.g. defense projects where

cost is of less importance and time is the most important factor

2. To effect cost economy i.e. to reduce the project cost below its normal cost

3. To expedite one or more remaining activities when earlier critical activities

have taken more than estimated time and thereby prevent penalties and cost

overruns.

4. To reduce idle time o the facilities in the non-critical paths and achieve

uniformity in requirement of resources.

5. To release the facilities more quickly for transfer to other profitable projects.

6. To enhance reputation of the firm and thereby improve its competitive

position.

The reduction in duration of activities may be achieved by

1. allocating more manpower and machines than originally planned for

2. working additional shift or overtime

3. awarding work to vendors who charge extra but expedite deliveries

A major advantage of CPM is its ability to evolve a relationship between time and cost of

the activity and it is the concept which is exploited in project crashing.

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TIME COST RELATIONSHIP

Project Cost like time management plays an important role in any project. The project

costs can be classified into 2 groups: project direct costs and project indirect costs.

Project direct costs represent the sum of the direct activity costs.

Project indirect costs are the costs related to the entire duration of the project. The project

indirect costs increase/decrease directly with increase/decrease in the project completion

time. The indirect costs include costs of indirect labour, salaries and customary overhead,

interest payable on the capital, penalty due to late completion of the project, loss of

business, and others.

Project total cost therefore, are different for different project completion times. The

project completion time for which sum of these two costs is minimum is called optimal

project duration.

Terminology:

1. Normal Time (tn) – of an activity represents the expected duration of the activity.

2. Crash Time (tc) – of activity represents the irreducible minimum time required to

complete an activity

3. Normal Cost (Cn) – of an activity represents the lowest possible direct cost

required to complete an activity within its crashed time.

4. Crash Cost (Cc) – of an activity represents the lowest possible direct cost required

to complete an activity within its crashed time.

5. Activity cost slope (C/T) is the additional cost to be incurred to reduce the

duration of an activity by one unit of time.

Graphical Representation of Project Costs:

The sum of direct and indirect costs if plotted gives rise to a dome shaped curve implying

that total cost of the project reduces with the decrease in its duration and then steadily

increases with further decrease in the project duration. The project duration for which the

total cost is minimum is called optimum duration.

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FIG. 2

TABLE 2

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The critical path is A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 and the normal

duration of the project = 62 days. To complete the project in 62 days, each of the

activities is to be completed within its normal duration. The direct cost of the project can

be obtained by adding the normal costs of all the activities. This equals to Rs. 6,12,000/-

In the critical path, activity A7 has the lowest cost slope. This activity can be crashed by

1 day. New project duration= 62-1 = 61 days

New project cost = Rs. 612000 + Rs. 1 X 2000

= Rs. 614000

However, A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 still remains to be the critical

path. Hence, the next activity which has the lowest cost slope is A11. This activity can be

crashed by 1 day. New project duration = 61-1 = 60 days


= Rs. 616000

A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 still remains to be the critical path.

Hence the next activity with the lowest cost slope is A2. This activity can be crashed by 1

day. New project duration= 60-1 = 59 days


= Rs. 619000

A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 still remains to be the critical path.

Hence the next activity with the lowest cost slope is A3. This activity can be crashed by 1

day. New project duration= 59-1 = 58 days


= Rs. 623000

Now, we have 2 critical paths: A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 & A1-

A2-A4-A8-A9- A11-A12-A13-A14-A15 each with duration of 58 days. Activity A12 can

be crashed by 2 days while activity A9 of second critical path can be crashed by 2 days.

Hence, the entire duration can be crashed by 2 days

New project duration= 58-2 = 56 days

New project cost = Rs. 623000 + Rs. 2 X (4000+4000)

= Rs. 639000

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The table for the same can be obtained as shown below:

TABLE 3

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ANALYSISWith the data above, we shall prepare the project-time cost matrix so as to obtain the

optimal duration of the project.

TABLE 4

Time Cost Relationship

0

200000

400000

600000

800000

1000000

1200000

1400000

0 20 40 60 80

Days

Co

st p

er D

ay

Direct Cost

Indirect Cost

Project Cost

FIG. 3

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CONCLUSION:

From the table it can be seen that the project cost is minimum when the project duration

is 46 days. Hence the results can be summarized as follows:

Normal Duration of the project = 62 days

Crashed Duration of Project = 44 days

Optimal Duration of Project = 46 days

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RECOMMENDATIONS

1. Sophisticated machinery:

Use of automated and semi-automatic welding machines can definitely reduce the

duration required for fabrication and welding activity.

2. Scheduling of Activities:

Proper planning and scheduling of activities can save a lot of time especially for

activities such as collection of material from stores and inspection by class

surveyor.

3. Efficient Design:

Use of sophisticated drawing software such as Catia or tribon can make work

more efficient and hence reduce number of defects arising at the time of

inspections. Also, use of such a software reduces re-work to a large extent.

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LIST OF FIGURES/TABLES

1. Table 1 – Block Building Activities with Duration in Days

2. Figure 1 – Network Diagram for Block Building Activities

3. Figure 2 – Time Cost Relationship

4. Table 2 – Calculation of cost Slope for each Activity

5. Table 3 – Crashing of Activities

6. Table 4 – Total Project Cost Calculation

7. Figure 3 – Time Versus Cost Relationship

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BIBILIOGRAPHY

1. Chase, Jacobs, Aquilano - Operations Management for Competitive Advantage

2. www.mindtools.com/critpath.html

3. en.wikipedia.org/wiki/Critical_path

4. www.bizhelp24.com/small-business-portal/critical-path-analysis-project-management

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http://www.mindtools.com/critpath.html


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