Technical Analysis

PROJECT MANAGEMENT

BY :-
•MEHA AGARWAL – 1671
•NEHA SINGHAL – 1680
PGDBM (A) – (2010-12)
 Project Management

Project Project feasibility DPR

Identification formulation analysis

Market analysis
Economic analysis

Technical analysis Financial analysis

 Technology
Technology is the usage and knowledge of tools,
techniques, crafts, systems or methods of
organization in order to solve a problem or
serve some purpose. 
The term can either be applied generally or to
specific areas: examples include construction
technology, medical technology,
and information technology
 Technology
Choice of Technology
• It is influenced by a variety
of considerations:-
– Plant capacity;
– Principal inputs;
– Investment outlay &
production cost;
– Use by other units;
– Product mix;
– Latest developments;
– Ease of absorption; etc.
Appropriateness of Technology
• It should be evaluated in
terms of the following
questions:-
– Whether the technology utilizes
local raw materials?
– Whether the technology utilizes
local manpower?
– Whether the goods & services
produced cater to the basic needs?
– Whether the technology protects
ecological balance?
– Whether the technology is
harmonious with social & cultural
conditions?
 Technical Analysis
• It represents study of the project to evaluate technical &
engineering aspects when a project is being examined &
formulated.
• It primarily covers the following aspects of a project:
– Plant capacity;
– Production technology;
– Machinery & equipments;
– Plant structure & civil works;
– Work schedule;
– Plant location & site selection;
– Material inputs & utilities;
– Product mix;
– Environmental aspects; &
– Project charts & layouts.
 Plant Capacity
Plant capacity or production capacity is
defined with the volume or number of units
that can be manufactured during a given
period.

• This decision is influenced • Plant capacity may be

by a number of factors:-
– Technology employed;
defined in two ways:-
– Input constraints; – Feasible normal capacity; &
– Market conditions; – Nominal maximum capacity.
– Investment cost;
– Availability of resources;
– Government policy; etc.
 Production Technology
The selection of an appropriate production
technology is an important management
decision.

• Various considerations in • Technology can be acquired

the selection:- from outside sources in
– Plant capacity; three different ways:-
– Major inputs; – Licensing of technology;
– Investment outlay & production – Purchase of technology; &
cost; – Joint venture agreement.
– Technology used by competitors;
– Product mix;
– Technological developments; &
– Ease of absorption.
 Machinery & Equipments
•The requirement of •Following procedure to be
followed, while determining the
machinery & requirements of machinery &
equipments for a equipments in a manufacturing
industry:-
project is dependent •Estimate the production
on the:- levels over time;
•Describe the various
•Plant capacity; machining & other operations;
•Calculate the machinery
•Production hours required for each type of
technology; & operation;
•Select the machinery and
•The type of equipments required for each
project. operations.
 Plant Structure & Civil Works
• Project analyst must • Structures & civil works
estimate the may be broadly divided
requirement of into three categories:-
structures & civil works – Site preparation &
for the project. development;
– Buildings & structures;
&
– Outdoor works.
 Work Schedule
The main purpose of preparing work schedule is
to anticipate problems likely to arise during
the installation phase & support possible ways
for coping with them; to establish the phasing
of investments according to the availability of
finances; and to develop a plan of operations
covering the initial period.
 Plant Location & Site Selection
• Location – It refers to • Process:-
a fairly broad area like
a city, an industrial – Defining multiple
zone, or a coastal area. location objectives;
• Site – It refers to a – Identifying relevant
specific piece of land decision criteria;
where the project
would be set up. – Relating the objectives
• The choice of location to the criteria;
& site follows an – Generating relevant data
assessment of:-
– Demand; to evaluate the
– Size; & alternative locations; &
– Input Requirements.
– Selecting the best
location.
 Factors Affecting Location & Site
Decisions
• Availability of raw material;
• Nearness to the potential market;
• Near to the source of operating requirements like
electricity, disposal of waste, drainage facilities;
• Supply of labor;
• Transport & communication facilities;
• Integration with other group of companies;
• Suitability of land & climate;
• Availability of housing, other amenities & services
• Local building & planning regulations;
• Safety requirements;
• Others like low interest on loans, special grants, living
standards; etc.
 Plant Location Models
There are various methods available for selecting
ideal sites for plants. The most popular methods
for the evaluation of plant location are-
• Factors Rating Method;
• Centroid Method;
• Point Rating Method;
• Break-even Analysis; &
• Quantitative Factor Analysis.
 Material & Utilities
The materials & other inputs can be divided
into four main categories:-
• Raw Materials;
• Processed industrial materials &
components;
• Auxiliary materials & Factory supplies; &
• Utilities.
 Product Mix
The project manager has the choice between a
broad range or a shortened product mix from a
study of market requirements & firm’s
ability to offer variety of products.
• Expansion strategy – increases product range.
• Retrenchment strategy – decrease product
range.
 Environmental Aspects
• A process may cause environmental pollution in various
ways: it may throw gaseous emission; it may produce liquid &
solid discharges; it may cause noise, heat, & vibrations.
• The key issues that need to be considered in this respect are:
– What are the type of effluents & emissions generated?;
– What needs to be done for proper disposal of effluents &
treatment of emissions; &
– Will the project be able to secure all environmental
clearances & comply with all statuary requirements.
 Plant layout
Plant layout is the physical arrangement of
industrial facilities. It involves the allocation
of space & the arrangement of equipment in
such a manner that overall operating costs are
minimized.

L L M M D D

D D
L L M M

L L M M G G

L L G G
A A
A A G G
 Principles of Plant Layout
• Principle of Minimum movement;
• Principle of sequence;
• Principle of security;
• Principle of utilization of space;
• Principle of flexibility;
• Principle of minimum investment; &
• Principle of integration.
 Types of Plant Layout
1. Product layout
2. Process layout
3. Fixed Position/ Stationary layout
Product Layout / Line Layout-
• Layout that uses standardized processing
operations to achieve smooth, rapid, high-volume
flow.
• Here machines are arranged according to the
needs of product & in the same sequence as the
operations are necessary for manufacture.
Product Layout
 Process layout-
• Layout that can handle varied processing
requirements
• Here all machines performing similar type
of operations are grouped together at one
location in the process layout. Thus here
facilities are grouped together according to
their functions. E.g. all drilling machines are
located at one place known as drilling
section.
Process Layout
 Fixed Position / Stationary layout-

• Layout in which the product or project

remains stationary, and workers,
materials, and equipment are moved as
needed. E.g. construction of DAMS.
• The product, because of its size and/or
weight, remains in one location and
processes are brought to it.
Fixed Position Layout