Earlier State Diagram

L = Loading
U = Unloading
Number of loadings= 5
Number of un-loadings= 6

Current State Diagram

L = Loading
U = Unloading
Number of loadings= 3
Number of un-loadings= 2

Savings in terms of materials

Cost/unit in earlier scenario = Rs 94.5
Consumption / Month = 3000
Total monthly cost in earlier scenario =94.5*3000 = Rs 283500
Cost/unit in current scenario= Rs 92.952
Consumption / Month = 3000

Total monthly cost in current scenario = Rs 92.952*3000 = Rs 278856

Monthly cost difference = 4644
Annual Savings for Raw Materials alone= 4644*12 = Rs 55728

Savings in terms of Distance

Total distance the materials travelled earlier= 600+40+40+0.5+30+30 =740.5 Km
Total distance the materials travelled currently= 600+0.5 = 600.5 Km
The overall reduction in terms of distance = 140 Km
The overall monthly requirement of metal = 10 metric tons
Cost/metric ton = Rs 3040
For 10 metric ton, cost =3040*10 = Rs 30400 for 608 Km
For 140 Km, cost = (30400*10)/608 = Rs 7000
Annual Savings for Km alone= 7000*12 =Rs 84000

Savings in terms of Labor

Number of persons available at dispatch = 13 persons
Wage payment for loading and unloading/ person =Rs 400/day
Wage payment for loading and unloading/ person/ hr =Rs 400/8 =Rs 50 /hr
Number of persons required for loading and unloading a truck = 4members within 1hr
Total cost for unloading a truck = 4*50 =Rs 200
Total cost for loading a truck = 4*50 =Rs 200

Number of loadings and un-loadings done earlier = 5,6; Total=5+6=11

Number of loadings and un-loadings done currently = 3,2; Total =3+2=5
Effective reduction in terms of number(both loading and unloading) = 6
Savings per month due to reduction in number of loadings and un-loadings= 6*200 =1200
Annual Savings for labor alone= 1200*12= Rs 14400

Total Annual Savings = Annual Savings for Raw Materials alone + Annual Savings in terms
of distance alone + Annual Savings for labor alone = 84000 + 14400 +55728 = Rs 154128

Future State Diagram

Provide options for inspection to be done in the
assembly area

Hyderabad( cut-tosize + anodized form)

600.5 Km

FOS (Assembly)

U,L

Number of loadings and un-loadings required = 2,1; Total =2+1=3

Effective reduction in terms of number(both loading and unloading) = 3
Savings per month due to reduction in number of loadings and un-loadings= 2*200 = 400
Annual Savings due to this reduction = 400*12 = Rs 4800