A

PROJECT REPORT

ON

STUDY OF PROCEDURAL ASPECTS OF CNG VALVE PRODUCTION

AT

VANAZ ENGINEERS LIMITED

PAUD ROAD, PUNE.

SUBMITTED TO PUNE UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF 2 YEARS FULL

TIME COURSE

MASTERS IN BUSINESS ADMINISTRATION (MBA)

SUBMITTED BY

KAPIL JOSHI MB0517

B.R.A.C.T. s

VISHWAKARMA INSTITUTE OF MANAGEMENT

KONDHWA, PUNE

2005-06

ACKNOWLEDGEMENT

I take this opportunity to thank all those who guided me at every stage of this project.

First of all I would like to thank Mr. J. S. Vispute (D.G.M.) of Vanaz Engineers Limited

for allowing me to do the project in this reputed organization; Mr. S. S. Saxena

(Personnel Manager) for making available all the facilities for completion of the project.

Mrs. M. S. Risbud (O i/c Planning Dept.) always made time available to guide me and

enrich my knowledge about the industrial procedures followed during manufacturing of

valves and CNG valve in particular. This study project could not have been completed

without her effort and continuous encouragement.

I also thank Prof. Rajesh Vatkar for extending his assistance in all respects. Many a times

theory seemed to be quite different from the practical way of working. Having worked in

a manufacturing industry he could solve my queries due to his work experience.

I would also like to thank all those staff members of various departments and workers

who shared their experiences to help me understand different processes in depth and in a

more practical manner.

KAPIL JOSHI MB 05 17 M. B. A. V. I. M., Pune.

INDEX

1 EXECUTIVE SUMMARY 01

2 OBJECTIVE AND SCOPE 02

3 COMPANY PROFILE 03

4 RESEARCH METHODOLOGY 13

5 THEORETICAL BACKGROUND 14

6 ABOUT CNG VALVE 18

7 PRODUCTION PROCESS 19

8 VENDOR PERFORMANCE ANALYSIS 27

9 Q.A. AND INSPECTION 29

10 TESTING 32

11 ASSEMBLY 34

12 PACKAGING AND DISPATCH 35

13 MARKETING 37

14 ERP SYSTEM 38

15 LIMITATIONS 40

16 CONCLUSION 41

17 RECOMMENDATIONS 42

18 ANNEXURES 45

EXECUTIVE SUMMARY

In any organization there are several departments that work hand in hand taking care of

different aspects of business. For example, the production of CNG Valve at Vanaz,

demands functioning of different departments such as Materials, Testing Laboratory,

Production, Planning, Quality Assurance, Assembly, Packaging, Marketing and so on.

All these departments depend on each other for the proper functioning of the business.

The functions and responsibilities of each of the respective departments are the same for

any of the production firm. Thus it would be beneficial and important for an MBA

student to understand the same in depth. The project aims at understanding the

functioning, flow of information, planning and coordination between such numerous

departments which finally results in timely delivery of the product to the customers.

My project titled - Procedural Aspects of CNG Valve Manufacturing gives detailed

information about the procedures followed at Vanaz Engineers Limited for the

manufacturing of CNG Valve right from material procurement up to dispatch to

customers.

However due to the time limit of just 50 days of working at the Pune plant of Vanaz, not

all the aspects of the business could be revealed. I ve still tried to present the most

important aspects and the functioning of different departments to which I had access.

The project could proceed by assisting the staff at work, interacting with them, raising

questions and doubts, interviewing managers and through questionnaires.

I ve concluded this project with some suggestions to make working simpler and more

efficient. The details are given in the conclusion section of this report.

OBJECTIVE AND SCOPE

I was not given any specific area or topic to work on for the project. I was allowed to

gather information from different departments concerned with material, production

planning and control. With this as a background and operations as my specialization,

understanding the functioning of each of the department, and production as a whole in the

company concerned with the manufacturing of a product appeared viable, useful and

possible objective of my project.

Production and materials management is concerned with the procurement of

material, storing, quality assurance, manufacturing, testing, assembly, logistics and so on.

A first hand experience of these aspects of organizational functioning, their

interdependence and relation with each other is of great importance as the basics never

change and are relevant in any manufacturing firm operating on medium or large scale.

OBJECTIVE:

1. To understand functioning and responsibilities of the departments concerned with the

CNG valve manufacturing.

2. To gather information about Procedures, Documentation and Flow of Information

with each of these departments.

SCOPE:

1. Limited to CNG Valve manufacturing.

2. Related to material procurement, storage, manufacturing, assembly, quality

assurance, packaging, and dispatch.

3. Flow of information, documentation, quality plan and procedures.

COMPANY PROFILE

VISION AND MISSION STATEMENT OF VANAZ ENGINEERS LIMITED,

PUNE.

VISION

The company shall be highly respected light engineering outfits, manufacturing and

supplying gas based products and auto components with complete customer focus. The

company shall be fully responsible to shareholder for efficient business performance. The

company shall discharge its expected functions in society and environment as very

conscientious and responsible member of the corporate community.

MISSION

To achieve above vision, the company shall adopt and comply with ISO 9001-2000 QMS

(Quality Management System) standards embracing and inter analysing the principles of

quality management system given there in. these will be used to power company s

growth through continual improvements in all aspects leading to enhancing satisfaction to

customer and optimum financial returns to all shareholders.

Company Profile: Vanaz Engineers is an ISO 9001 company manufacturing an array

of premium quality non-ferrous forging and pressure die-castings to customer

specifications. It manufactures gas cylinder valves, gas meter and pressure regulators. Its

casting and forging facilities, machine shop, tool room and laboratory facilities are fully

equipped and staffed with trained professionals. The company operates under strict

quality control guidelines and possesses unique R&D capabilities to meet customer

requirements. Vanaz processes over 1,000 metric tons annually of brass, zinc and

aluminum.

Vanaz Engineers Limited was established in the year 1948 in Mumbai with a

manufacturing setup to produce quality press tools, dies and fixtures.

The company expanded its activities to copper and copper alloy forging in 1960.

Specialized heat-treated aluminium and aluminium alloy forging was pioneered in India

by Vanaz. Diversification was rapid in the field of cylinder valves and pressure regulators

for LPG, oxygen, carbon-di-oxide, chlorine and other gases in the year 1963.

Pune unit of Vanaz started in the year 1968. Vanfog-Fog generating machine for pest

control, fumigation and agricultural applications was developed in 1974. Self-closing

type cylinder valves and suitable pressure regulators were developed in1979. Deorukh

unit of Vanaz was started in 1981.

Vanaz has the main manufacturing unit & register office in Pune and Vanaz Unit No 2 is

at Deorukh. Today, the establishment has:

Die Casting Department with facilities for high pressure die casting for Zinc and

Aluminium base alloys. Equipped with German make 'MUTAL' Hot Chamber Machines

and two 160 tons 'HMT' make cold chamber machines, the company can manufacture die

castings up to 2 kg hot weight.

Other Ancillary Departments

Inspection Department for Quality checks of components and finished products.

Laboratory equipped with modern facilities like Atomic Absorption Spectrometer &

Metallurgical microscope with micrograph printing. The raw material is checked for

physical and chemical properties, before being sent for further processing.

Research and Development Department is situated in a separate building. It is equipped

with CNC machines and is manned by qualified and experienced personnel. This is the

innovative powerhouse of Vanaz which has helped us grow over the period of time and

pioneer our new products.

ACHIEVEMENTS

The R&D Department of Vanaz has been recognized by the Department of Science

& Technology, New Delhi, since 1985. Vanaz entered the automobile sector in 1990

with manufacturing of Synchronizer Rings which is an import substitute component.

Vanaz became ISO 9001 company in September 1998.

Vanaz is proud to manufacture the first indigenous CNG kit for autorickshaws duly

approved by VRDE and ARAI in the year 2000

QUALITY MANAGEMENT SYSTEM

Vanaz Engineers Ltd. has established a Quality management system to satisfy its present

and future customers needs in accordance with the requirements of ISO 9001:2000 and

TS16949-2002

VEL outsources sub-components or offloads work-in-process for job work on a regular

basis. Quality standards are ensured through adequate controls. Records are maintained

for outsourced processes and services in evidence. The responsibility of conformity with

all customers remains with Vanaz Engineers Ltd.

Following processes are included in QMS

Processes for Management activities

Provision of resources

Product realization

Measurement system and analysis

PRODUCT

NAME VARIANTS

VALVES

1. Slam Shut-Off Valve 2. Non-Return Valve 3. Safety Relief Valve 4. Needle Valve 5. Line Valve 6. High Pressure Gas Cylinder Valve

REGULATORS AND

ADAPTORS

1. Domestic Regulator 2. Adjustable Pressure Regulator (Low Flow Rate) 3. Adjustable Pressure Regulator (High Flow Rate) 4. Adjustable Pressure Regulator (High Pressure High Flow

Rate) 5. Service Regulator 6. Preset Pressure Regulator 7. Preset Pressure Regulator (Fixed Inlet Pressure) 8. Preset Pressure Regulator (Variable Inlet Pressure) 9. Special Purpose Pressure Regulator 10. Adaptors 11. Flame Arrestor

GAS TRAINS 1. Single Stage Pressure Reducing Valve 2. Two Stage Pressure Reducing Valve

AUTO COMPONENT

S

1. Synchroniser Ring 2. Shifter Fork 3. Rear Cover Crank Case 4. Slider 5. Bearing Cap 6. Connecting Rod 7. Petrol Tank Cap

VANFOG Instrument for spraying insecticides

GAS METERS AND ZERO

GOVERNORS

CONVERSION KITS

Two Wheeler

Three Wheeler

Four Wheeler

A Look at the financial performance of Vanaz Engineers Ltd.

FINANCIAL YEAR 2000-01 2001-02 2002-03 2003-04 2004-05

PRODUCTS SALES(Rs.)

VALVES & REGULATORS

93430784 84795266 54881038 39657647 49798396

CNG VALVES 9445820 15038340 16735820 9292630 7557730 NON-FERROUS FORGING

2206696 518594 19171591 10915552 18783057

VANFOG M/c 3214150 3524792 3642879 5512522 6719824 PETROL TANK CAPS

14171747 15672897 13429822 13571403 2084918 CNG AND LPG KITS 79342968 111386685 145831654 291871550

121519079 GBS 40,18,50 52129915 46076534 54964986 84612827 125412334 GAS PIPELINE ITEMS

37750 1742265 2590370 5660898 11923285 SALES - SPARES 4624310 11525934 7721947 9100610 10185419

2004-05 2003-04 2002-03

Net Sales 360,507,056 474,935,595 325,581,431

PBIT 48,055,262 59,241,724 41,236,596

Total Capital 199,258,554 168,001,866 114,610,298

R.O.R. % 24.12 35.26 35.98

Profit Margin % 13.33 12.47 12.67

Capital Turnover 1.81 2.83 2.84

Research Methodology

The simple meaning of research is to search for facts

answer to questions and solution

to problems. It clarifies doubtful facts; it corrects the misconceived ideas or facts.

This being a study project involved systematic inquiry i.e. scientific study of facts.

In every discipline, there exist certain confirmed and unconfirmed facts, theories. An

activity undertaken to verify or revise these facts becomes a research.

Objective of research is to verify and/or test the existing facts and to improve knowledge

pertaining to these.

Research also means developing new theories, concepts or tools for study of unknown

phenomenon.

Data is inevitable in a research. Data consists of facts, figures, any relevant material that

serves for basic study and analysis.

Data can be classified as Primary data and Secondary data.

Primary sources means first hand sources or original sources at the hands of researcher

collected through principle sources of observation, surveys.

Secondary source is the data collected by some other person with some other purpose. It

is readily available and the researcher has no control over its collection.

Primary sources of data collection used in this project are:

a) Observation: Having a look at the actual processes and procedures

b) Interview: Talking directly to workers/ staff to gather information. This also helps in

making out the attitude and comfort level at which the job is being done.

Secondary source of data was the documents maintained in company records. This

includes- sales, performance reports, test reports, certificates etc. Most of the data was

made available by the Planning department.

THEORETICAL BACKGROUND

Manufacturing is not a stand-alone activity. Timely supply of raw material, inspection

and testing for maintaining quality of product, assembly and dispatch to customers at

right place, at right time is equally important. Proper planning of manufacturing and all

the allied activities is essential for maintaining strong relations with the customers and to

build a trust in the market for the company name and products.

The main areas studied in this project are as follows:

1. Production planning

2. Materials management

3. Inspection and Quality Control

4. Packaging and dispatch.

Production Planning:

The efficiency of production planning and control department depends upon the

information it gets from other departments and the accuracy of the information. To

prepare load and schedule chart, it must know the preventive maintenance schedule. To

give realistic delivery date, it must know:

Production Programme Quantity to be manufactured

Delivery date

Production materials

Kind and Quality of material,

Quantity of material required

Stock on hand and reservations

Time required for procurement

Operation Time - Work content of each job

Setup time and standard time for each operation

This is the most important function in any manufacturing firm. Production planning

based on demand/orders decides the level of production, material requirement, allocation

of resources, availability of men and machines etc.

At VEL, monthly meetings are held on 25th of each month, which is attended by heads of

all the concerned departments. The orders in hand and estimated demand in near future is

reviewed. Material stock is evaluated in quantity and shortage material required to be

procured is then estimated on quantity and time scale. The availability of facilities like

laboratories, inspection facilities, packaging department schedule and availability of men

and machine are other considerations to be taken in account.

Materials Management:

The master production schedule gives the productwise quantities to be produced over a

given period of time. Bill of material describes how a product is made from its

component parts and assemblies. It contains the information to identify each item of the

assembly and the quantity required per assembly to which it is a part.

First the quantity to be dispatched for the given month is estimated. The stock in hand

available is also verified. This gives the requirement of the total quantity to be

produced.

A production schedule is then prepared. It spells out the different products to be

manufactured over the given time span.

Raw material, components, assemblies required for the given production is estimated

and the stock in hand is checked for availability. The shortage material is then

quantified.

A schedule of purchase and delivery is prepared. At Vanaz, it is customary to receive

material for a month in two or three schedules. Purchasing is effected by two

departments as follows : (i) PP&C subcontracted items

(ii) Stores raw material and bought-out components

Inspection:

There are two basic objectives of inspection (i) to reject the item produced if it fails to

meet the specified requirements and (ii) to serve as a means of maintaining quality of

workmanship and materials used during production. Inspection is a very essential part of

the manufacturing process. Following are certain conditions under which inspection

should be carried out:

Inspection requirement

Equipment, Instruments, Tools and Apparatus to be used and techniques to be

adopted for carrying out inspection.

specialisation required for carrying out the inspection and the level of persons to be

entrusted with the job.

Quantity and frequency of inspection.

Information in brief about CNG (Compressed Natural Gas) Valve product

The introduction of CNG as an alternative fuel has developed an extensively large market

for this product. Vanaz being an old player in this field had a strategic advantage and as a

result, demand for these valves increased and has touched almost 8,000 units per month

now.

CNG valves manufactured by Vanaz are rated for 200, 240, 250 and 255 bar (kg/cm2)

operating pressures. The company has 6 categories in this segment. The differentiation is

done by using different types of disk retainers for valves. Each disk retainer type is

designed for specific operating pressure and temperature. Of this range of CNG valves,

200 bar pressure valves have maximum demand. Presently Vanaz sells about 500 valves

per week in this category. The company offers one year guarantee for its valves.

The major buyers of Vanaz CNG valves are -

Bajaj Auto Ltd.

Swaraj Mazda

Technical Specifications:

Conforming to IS:3224-2002 duly approved by CCOE, Nagpur.

CNG Cylinder Valve

1 Nom, Working Pressure 255kgf/cm2,

Bursting Disk With Fusible Alloy Melting Point 98 To 104 C,

3/8 NPT Venting

FLOW OF PRODUCTION PROCESS OF CNG VALVE

Vanaz Engineers Ltd.

The flow chart below shows the entire process that lies between the demand and supply

of the product. There exists a fixed procedure that is followed. When a party (customer)

approaches the company with a sales inquiry indicating their demand in quantity, quality

and expected schedule of delivery, a sales quotation is prepared by the company

indicating their cost and terms of delivery and payment. Once both the parties agree on

the terms, cost and delivery schedule, a sales order is raised by the customer.

Different customers demand different types of products. Aggregating the demand for

similar products, total demand is reached upon. To this quantity, pending orders quantity

is added and the final demand is determined. The stock in hand is verified. This data is

made available by finished goods stores. This is done to assess if the current demand can

be satisfied and also to determine the quantity of the products required to be

manufactured to maintain the safety stock and emergency orders.

Once this is done, the quantity of production required for the given month is

communicated to the Planning department. Bill of material for each kind of product gives

the exact number of components and sub-assemblies going into the product. For the total

production, total quantity of each component or sub-assemblies is obtained. The

component store makes data available to the planning department about the availability of

components. Comparing the requirement and availability of components, shortage stock

is estimated. This stock is to be procured from vendors or from sub-contractors. For this

purpose, the respective departments raise purchase indent to meet the requirement of

components. The component store then raises purchase order. Vanaz has vendors

developed over a period of 25 years. Purchase Order is an official document which is an

agreement between the vendor and the company. The company takes a credit of 2 months

for payment after delivery.

On receipt of the material from the vendor, Goods Receipt Report (GRR) is prepared.

The stock is sent to Quality Assurance department for inspection. The inspection methods

are predefined. Inspection results in segregation of the stock into accepted and rejected

lots. Accepted lot is sent to component store after approval and the rejected lot is either

returned to vendor or scrapped.

The Production Plan made by Planning Dept is transformed into job at shop floor. This

creates demand for raw material and bought out components at shop floor from the

stores. The Oi/c for production issues a material requisition slip to the stores. The

production is planned on weekly basis and as a result raw material, components are

demanded to meet weekly requirement. With the available inputs manufacturing process

is completed as per schedule. The finished components are then inspected for their

quality and accuracy in dimensions before they are sent to finished components stores.

As per the requirement the finished components are procured from the stores for

assembling them into final product. At this stage, sample testing is done for few of the

critical parts. If the lot is approved, assembly is allowed. After the valves are assembled,

they are packed and stored in corrugated boxes and sent to dispatch section. Before the

product moves out of the factory premises to customer, excise challan is prepared. The

product is then delivered to the customer s premises by the company or through transport

company service as per the agreement between the company and party (customer).

This concludes the process of delivering the product to customer. This was just an

overview of the entire process. However the actual process is complex and involves

several procedures about which information is given in the following sections of this

report. The flow chart on the following page is a chronological order of the important

stages in the production of CNG Valve at Vanaz Engineers Ltd.

FLOW CHART OF PRODUCTION AT VANAZ ENGINEERS

SALES INQUIRY

SALES QUOTATION

SALES ORDER

AGGREGATE SALES ORDER (PRODUCT WISE SEPERATION)

PENDING ORDER LIST

STOCK VERIFICATION (finished components and finished goods)

At this stage the production plan is defined to produce a certain number of products. For

this purpose, BILL OF MATERIALS is prepared to aggregate the total requirement of

raw material, bought out parts etc for each of the item.

STOCK VERIFICATION AT STORES

PURCHASE INDENT

PURCHASE ORDER

GRR

QUALITY ASSURANCE

GRIR

Accepted lot Rejected lot

STORES Returned to party OR scrapped

The Production Plan made by Planning Dept is transformed into job at shop floor. This

creates demand for raw material and bought out components at shop floor from the

stores.

MATERIAL REQUISITION SLIP ( shop )

PROCESSING AT SHOP FLOOR

FINISHED COMPONENTS

QUALITY ASSUARANCE

FINISHED COMPONENTS STORES

ASSMEBLED AS PER REQUIREMENT

FINISHED GOODS STORE

EXCISE CHALLAN

READY FOR DESPATCH

Manufacturing Process of CNG Valve

Raw Material Shot blasting

Lab Testing Machining Operation

Shearing Stress Relieving

Drumming Acid Cleaning

Forging Inspection

Trimming Stores

Lab Testing Dispatch

BILL OF MATERIAL - CNG VALVE

A CNG Valve is made of several sub-components and sub-assemblies. A bill of material

is a document that gives a detailed list of these items. Given below is the bill-of-material

of CNG Valve manufactured by Vanaz Engineers.

It can be observed that not all the parts are manufactured by the company. The reason

being those parts are low cost, less critical and are standardized. Nuts, washers, plugs are

required in most of the valves manufactured by many of the automotive parts

manufacturing firms. They are readily available and cost nominal. The parts

manufactured at factory are valve body, disk retainer, spindle etc. such parts are critical

from the point of view of quality and operation of the product. Also their cost fluctuates

as cost of raw material i.e. brass fluctuates in the market. As a result, the idea of ready

purchase gets eliminated.

Sr. No.

Item Description Source 1 V0120010 MACHINED CNG VALVE BODY Manufactured at

Deorukh 2 V0120030 SPINDLE OF CNG VALVE Manufactured at Pune

3 V6632020 NYLON SEAT Ready Purchase 4 V0120040 CNG VALVE - WASHER Ready Purchase 5 V0120050 PACKING WASHER Ready Purchase 6 V0120070 GLAND NUT (SINGLE SPINDLE) Manufactured at

Deorukh 7 V6601050 BIG BRASS WASHER Ready Purchase 8 V6611110A HANDWHEEL RED POWDER

COATED Manufactured at Deorukh

9 V0120100 SPRING WASHER Ready Purchase 10 V0120110 M.S. WASHER M6 Zn PLATED Ready Purchase 11 V0156140P Cu DISK NICKLE & CHROME

PLATED Manufactured at Pune

12 V0135131 CNG VALVE NYLON WASHER Ready Purchase 13 V0120090 HEX NUT Ready Purchase 14 V0157130AF

DISK RETAINER 255/250 W.P. Manufactured at Pune

15 V0157140AF

FUSIBLE PLUG WITH ALLOY M.P. 100

Ready Purchase

Manufacturing at Deorukh plant and communication to Pune Office

As mentioned in the Bill of Material of CNG valve, a few components are manufactured

at Deorukh plant. The schedule of components required to be manufactured and

dispatched after forging and machining is communicated to the Deorukh Plant Manager

by the O i/c Planning department in the last week of each month. The decision about the

level of production is decided in the monthly meeting held usually on 25th of each month.

The Deorukh Plant sends a weekly report to Pune plant in the for mat given on next page.

It informs about the programmed quantity, stock in hand, planned work (in quantity),

actual quantity dispatched and also reason if there is failure in timely dispatch.

The planning department receives this information which ascertains that the production is

going on as per the plan and also encourages the management to look into the matter if

the Deorukh Plant fails to dispatch material on time.

Vendor Performance Appraisal System

The purpose of this system is to apprise approved vendors, sub-contractors and suppliers

of their performance. The scope of this appraisal system is extended to bought out

components, sub-contracted components and raw material.

The performance of vendors, sub-contractors is appraised on half yearly basis by the

Vendor evaluation committee (VEC) as per the scheme given below:

Total Points 100 out of which

For Quality 50 points

For delivery on time 25 points

For customer disruption (including field

returns)

10 points

For incident of premium freight 10 points

For special status customer notification

to quality and delivery issue

05 points

Q.A. department maintains the statistical data regarding quality . PP&C and Stores

maintain data regarding delivery and sub-contracted & bought out components

respectively. Q.A., N.G. section and engineering for their respective items forward

the data regarding delivery for sub-contracted components to PP&C. The data

regarding raw material is maintained by stores and lab.

The vendor evaluation committee meets every 6 months to decide Vendor s rating

based on previous 6-month s performance.

The result of half-yearly rating is communicated by the stores to vendors and

internally to the concerned departments.

Based on the rating exercise the committee makes changes in the certified list of

vendors if deemed necessary and sends information to all concerned. The vendors

having unsatisfactory rating is provided next six months to improve performance.

Action is taken to de-register a vendor if no improvement is seen during the next half

yearly rating assessment. Such vendor is removed from the approved list of vendors.

QUALITY

Completely O.K. 50 points

Rejection up to 3% 45 Points

Rejection 3% to 5% 40 Points

Rejection 5% to 10% 35 Points

Rejection 10% to 20% 30 Points

Rejection 21% and above 00 Points

DELIVERY

On time or before 25 points

Delayed transaction up to 5% 20 points

Delayed transaction up to 10% 15 points

Delayed transaction up to 15% 10 points

Delayed transaction 16% and above 0 points

A grace period of 8 days is built in the ERP system for all suppliers.

RATING

POINTS 90 or above

RATING Excellent

85 89 Good

75 84 Must improve

50 74 Poor

Below 50 unsatisfactory

Inspection and Quality Assurance

Gauges and master gauges, measuring instruments, pressure gauges and temperature

gauges, lab equipment are calibrated either in-house or by external agency as per the

relevant procedure and work instructions.

The calibration status is displayed on the instrument/ gauge or its storage case. Where in-

house capability exists, the measuring equipment are calibrated at prescribed intervals by

department concerned under suitable environmental condition.

The masters instruments are off loaded to external agencies. They are calibrated and their

certificates indicate tractability to national/ international standards.

The operator ensures careful handling and protection of measuring instruments and

gauges. Only authorized personnel are allowed to undertake calibration and repairs.

The instruments used for inspection of CNG valve body are as follows:

Vernier callipers, micrometer gauge, thread and plugs, special gauges.

The parameters checked are as per drawing such as threads, inner and outer diameters

Calibration is done under specific environmental conditions

(Humidity below 40%, temperature 20 C 1 C, vibration-free, dust-free)

There is no fixed interval for calibration of instruments and entirely depends on

usage. The time interval may range from 15 days to 1 year depending on the type of

instrument and its usage for inspection.

The company signs yearly contract with external agencies for the purpose of

calibration of instruments and gauges. These agencies are required to be ISO9000

compliant or holder of certificate from NPL (National Physical Laboratory).

The personnel involved with in-house calibration are trained for the purpose. The

minimum qualification is a Degree in Engineering or Diploma in Engineering with a

minimum of 5 years of experience in Quality Assurance department.

INSPECTION PROCESS:

Valve Body: The valve body of CNG Valve are manufactured at Deorukh plant and

brought to Pune plant for assembly. On arrival the valve bodies are stacked in trays and

kept ready for inspection.

100% visual inspection is carried out for Valve Body of CNG Valve.

1. First, the valve bodies are checked for stampings of ISI marks, operating pressure,

part name.

2. The valve bodies are vulnerable to ingressions, inclusions due to the processes like

forging and die-casting. These need to be checked and corrected by rework else such

defective parts are scrapped.

3. The valve body dimensions like inlet/ outlet diameters, threading are checked for

conformance to the design.

Quality Plan of the inspection department defines the acceptable standards and gauges

and instruments to be used to verify the dimensions and characteristics.

Accepted parts are sent to Component Stores. These components are drawn from the

stores for assembly as per the schedule.

Other Components are checked for Quality using Sampling Inspection method. The

results of sampling inspection are analysed by supervisor or inspection department head

to decide whether to pass or reject the lot.

Considering all the parts going into assembly of CNG Valve following are the results

against the acceptable limits set by Quality Plan if Inspection Department.

Percentage rejection in a good lot <2%

Present average level of rejection <0.2%

Present average level of re-work <0.5%

Format of Inspection Report used for Valve Body of CNG Valve:

Inspection

Item

Criteria Instruments

and gauges

Frequency Remarks

Gives details of

item code,

description

Parameters to

be checked for

acceptance

List of

instruments

and gauges to

be used

Results of sampling

inspection are extrapolated

to have idea of the quality

of the lot

Details of

result of

inspection

This report is generated by O i/c of the Quality Assurance department and then forwarded

to DGM QA for approval. Only after his approval, the components are sent to the stores.

When the components are sent to stores, the approval is documented in a specific format

(See annexures).

Thus to conclude, we can say that the Quality Assurance department is responsible for

the verification of quality of material received from vendors, authority to accept or reject

a lot based on quality standards of the company. It is also responsible for the timely

calibration of the instruments used for inspection. It maintains a laboratory for calibration

of gauges and can off load its work to an external agency if need arises or if the

calibration is highly specialized task for a particular instrument.

Testing and Assembly

Assembly involves procurement of components from the component store to assembly

shop to assemble these parts as per the procedure to produce the required final product.

Before starting with the assembly work, testing of critical components is done in the

assembly section itself.

Preliminary Tests

1) FUSIBLE ALLOY TESTING:

(To test 10 from a lot of 1,000 retainers for melting of alloy within given range of

temperature)

Disk retainer is the most critical part from the point of view of safety. The disk

retainer has a fusible plug, which works similar to a safety fuse in electrical circuits.

Fusible alloy melts when temperature rises beyond certain temperature and allows

compressed gas to escape to avoid an explosion.

The working temperature range for the alloy to fuse is between 98 - 104 C.

From a lot of 1000 disk retainers, 12 are tested for its proper working.

In case a retainer fails below 98 C or does not fail even after 104 C, it is

considered as a lot not conforming to standards. In such a case entire lot is rejected.

In case of rejection of a lot, Rejection Report is prepared and sent to the concerned

department. (See Annexure I )

2) BURSTING TEST: There is a possibility of explosion of gas cylinder if the pressure

inside the cylinder rises beyond a certain pressure range. To avoid such a situation a

venting hole is provided in the valve. A metal disk covers this hole. When pressure

exceeds the rated pressure, it fails and gas escapes through the vent in the valve.

3) CYCLE TEST: During its life a valve is operated between ON and OFF position

several thousand times. In order to test the reliability during operation, one valve

from each lot of 500 ready valves is tested for its cycle of operation. In this test, the

valve is opened and closed 6,000 times and then undergoes pressure testing to check

if any of its part has loosened or failed due to above mentioned operation.

Few of the components are inspected and certified by ISI Inspectors. Only after testing

and approval from inspection department, assembly is allowed.

Assembly of CNG Valves

Component store is centrally located with respect to all the sections where manufacturing

or assembly work takes place. This reduces the required time and effort for the movement

of material from stores to different sections where the material may be required.

The assembly of parts involves 8 workstations and an equal number of workers.

A point to be noted here is that assembly of all the parts to produce a lot of finished

valves may not always take place in one go. More often it happens that few parts are

assembled first and the other remaining parts are assembled later as and when the parts

are available or as schedule permits or priority shifts as per the delivery schedule.

On a particular day, assembly of four different types of valves (CNG, Oxygen, Hydrogen

and Chlorine valves) was observed to be taking place.

Movement of material from one workstation to next takes place by wooden trays. Thick

wooden trays have holes to hold the valves as they are moved forward during their

assembly. Such trays can also be stacked one over the other reducing the required area

along assembly line.

Manufacturing date and batch are punched on valve using alphabetical code. O to Z are

used for months starting with January. Punching is done on the valve body.

Packaging and Dispatch

Every Manufacturer should be very careful in packaging and packing, which of great

importance in transportation as well as in safety of goods.

Packaging is the wrapping or container that covers one or more units of the product. The

packaging should be durable enough to stand the hazards of frequent handling, shocks

and jerks during transportation, rough weather conditions etc. packing material is used to

prevent damages to packages during transit.

There is a wide range of packaging material available, such as corrugated boxes, wooden

boxes, crates etc. The considerations in choosing the type of packaging material depends

on the transport facility, frequency of handling before the consignment reaches its final

destination, safety of product depending on its type (fragile, heat or moisture sensitive

etc) and storage facility.

Procedure of packaging followed at Vanaz Engineers is as follows:

The assembled valves are dried using compressed air.

Valve seat is positioned to completely closed position.

Plastic caps are used to cover threaded portion of the valve.

A checking slip is kept inside the box. (see details of checking slip in annexure)

The ready valves are then placed in a three-layered corrugated box and sealed by

tape.

These boxes are then made available to ISI inspector who visit the company for sample

test the valves. One or two valves are taken out from boxes randomly and tested for its

pressure, temperature and operational reliability. Only if all the samples conform to the

required standards they are passed.

After the clearance from ISI Inspector, the boxes are sent to dispatch section.

The valve assembly section forwards the stock to packaging section for packing the

valves. The valves are placed in corrugated boxes and then sealed using plastic straps.

The boxes are sized to hold lot of either 35 or 50 CNG valves.

Often customers demand an odd quantity (not in multiples of 35 or 50). In such cases, a

certain required number of valves are drawn from the box and a tag is attached to the box.

This tag indicates the number of valves left in the box and batch number.

The dispatch section follows the principle of FIFO (First In First Out). The lot from open

boxes is cleared first for the odd number demand.

A label is fixed on each box specifying the contents, name of the component, quantity,

batch number, date of dispatch etc.

The dispatch section has to prepare a weight list in case more than one box is being

dispatched. Before sending the product out of factory premises, an excise invoice is

prepared. When the material is transported out of the factory, transport forward note is

prepared. In case the goods are returned to the company for replacement, excise invoice

is returned to excise section and goods are dispatched on the credit of excise paid.

The responsibility of transporting goods to customers varies from party to party. In few

cases, the company transports the goods up to Transport Company office only from

where the Transport Company delivers the goods to customer s premises. This is called

to pay basis which means that the customer will pay the freight charges. In other case

the customer demands delivery of goods to its premises (e.g. Bajaj Auto Ltd.). Vanaz has

its own fleet of trucks to transport the goods.

Marketing

Vanaz Engineers Ltd. did not have a separate marketing department as such till recently.

Marketing department has come into being last year (i.e. 2005). Earlier, customers

approached the company for buying products but of late company through its marketing

department has started approaching and developing new customers (dealers and

distributors). The scope of operation of Marketing Department is limited only to study of

market, contact distributors and develop dealers for the products of the company. Sales

department carries out the function of generating demand quantity. Production is mainly

planned on the basis of orders in hand and exponential forecasting.

Conceptually, ERP system must maintain a flow of information between various

departments of the company, like marketing, planning, finance, production, maintenance

and so on. However this function of the ERP system is still not being used mainly

because of the scale of operation and limited human resources in managerial cadre of the

company.

ERP SYSTEM

Enterprise resource planning software, or ERP attempts to integrate all departments and

functions across a company onto a single computer system that can serve all those

departments particular needs that runs off a single database so that the various

departments can more easily share information and communicate with each other. ERP

systems typically handle the manufacturing, logistics, inventory, invoicing, accounting

for a company.

At Vanaz Engineers, ERP system was installed last year i.e. 2005 and was being

implemented in a phased manner. The company had set a target to implement this

software by 30th of September 2006. It is an IOTA product.

Only the basic and important functions were activated first. A list of total functions is

given in annexures. Highlighted functions are active while others will be activated by the

end of September 2006.

In the absence of an ERP system, a large manufacturer may find it difficult to effectively

interface different interdependent and interrelated tasks. Tasks that need to interface with

one another may involve: order tracking from acceptance till dispatch stage, the revenue

cycle from invoice through cash receipt, managing interdependencies Bill of Material,

match between Purchase Orders (what was ordered), Inventory receipts (what arrived),

and Costing (what the vendor invoiced), and the Accounting for all of these tasks.

Benefit of using ERP System:

ERP helps the manufacturing process flow more smoothly, and it improves visibility of

the order fulfillment process inside the company. That can lead to reduced inventories of

the materials used to make products (work-in-progress inventory), and it can help users

better plan deliveries to customers, reducing the finished good inventory at the

warehouse.

However, Training expenses are high because workers almost invariably have to learn a

new set of processes, not just a new software interface. Data conversion costs money to

move company information, such as customer and supplier records, product design data

etc, from old systems to new ERP system.

ERP is a set of practices for performing the various duties in the departments of a

company, including finance, manufacturing and the stores. To get the most from the

software, people inside the company need to adopt the work methods outlined in the

software. If the people in the different departments that use ERP don t agree that the

work methods of the software are better than the ones they currently use, they will resist

using the software or will want the software to match the ways they currently do things.

This is where ERP projects break down.

To prevent this from happening, Planning department had started training sessions for

each concerned department when the ERP system was brought in last year. The

departmental heads later trained their staff. This is how the company got system

familiarized to its employees.

See annexures of list of functions performed by ERP system.

LIMITATIONS

The project could have been made better than its present form. Management theory says

that for any system to work properly in the organization, top management support is

required. The title of the project was not specified and I was at the liberty to choose the

topic of my interest.

In the initial stages when questionnaire was used to gather information, different

department heads replied with totally opposite answers. When clarification was

sought in this regard, they declined to do so.

Most of the O i/c and Managers are highly experienced but do not possess any formal

academic degree in management. Coming through lower cadre and having being

promoted over the years, they have reached managerial cadre. As such there was

problem in communicating with them especially because many of the management

terms were not known to them.

Barring a few, majority of the O i/c did not have time to spare for management

trainees to share knowledge and information.

CONCLUSION

The usefulness of a study project can not be underestimated. Instead of working in just

one department; getting an overall view of the entire organizational working is of more

importance for a fresh graduate.

Managing business is a complex affair. For a fresh graduate like me, understanding the

reason of existence, importance, responsibilities of each department and the interrelation

between these departments which make it possible for the company to function efficiently

was of great help.

This project studies various aspects of manufacturing and cleared many of my personal

misconceptions about the practical way of running business. It is not possible to gain

practical knowledge through books and theory therein.

It was a great experience to work in an ISO

9000 certified organization. The quality

management system and procedures set for each of the function in the organization made

it easy for me as a trainee to gather information and then compare it with theory.

Introduction to ERP and knowing about the capabilities and capacity of software in

smooth functioning of manufacturing and allied activities was an eye opener.

RECOMMENDATIONS

1. On many of the instances, it was observed that two men were required to transport

material from one section to other, on a trolley.

If a cage is built at the edges i.e. side walls of the trolley (see diagram 1), the need of

additional person to hold the material, box, gunny bag to prevent it from falling off

the trolley will be eliminated.

2. While testing the alloy filling at the assembly section, it was observed that it was not

convenient for the operator to check the failure of valves. Failure of lowermost and

disturbance so created in the liquid due to high pressure air escaping through it,

hampered the visibility.

For this purpose, an attachment that will hold the retainers in a line horizontally is

recommended. See diagram2.

ANNEXURES

PRODUCT PART APPROVAL

(For components before sending the item to component store)

SUPPLIER:

NAME OF INSPECTION FACILITIES: vernier, micrometer, microscope

PART NO:

PART NAME:

Sr. No. Dimensions/

Specifications Supplies Measurement Results OK Not OK

SIGNATURE SEAL

PERFORMANCE REPORT

(MONTHLY)

DEPARTMENT : Man Power Available hours Operators : Over time : Casual workers : Deputation from other dept. :

TOTAL MANPOWER : Productive Work Unmeasured Work

Component Operations Quantity

Hours Component Operations Quantity

Hours

INDICES OF PERFORMANCE

Production Work Index = Production Hours

Total Hours

Setting Time Index = Setting Time (hours)

Total Hours

Unmeasured Work Index = Unmeasured Work Hours

Total Hours

R & R I = Rework hours Rejection hours

Production Hours

Production Index = ____Prod. Work + Setting Time_____

Total Hours Unmeasured work hours

Format of checking slip put in each box before packaging

CHECKING SLIP

Number: Box Number:

In case of any complaint regarding shortage, kindly return this along with complaint to Vanaz Engineers Limited UNIT 2.

Address:

CHECKED BY: PACKED BY :

Date:

REJECTION REPORT

Fusible Alloy Test Report

T C No.: Date:

Test: Yield Point of Fusible Plug alloy

Party: Hand press Section

Challan No.: Date:

Item : M16 1.5 disc retainer

Yield Temperature C Lot No. Quantity Number of Samples Required Observed

BS/09 300 10 100-2+4 95

101

101.1

101.7

102.5

Remark: Rejected for one sample started leaking before temperature reached 98 C.

Samples are returned herewith.

Incharge Laboratory

SALES REPORT

MONTH PROGRAMMED QUANTITY

DISPATCH QUANTITY

% share of total sales

May 2005 6,000 3,025 3.29 June 5,000 1,700 -- July 0 1,850 1.5 August 500 1,930 1.27 September 4,500 2,920 1.97 October 1,500 2,450 3.0 November 5,000 4,440 -- December 6,000 6,215 -- January - 2006 8,000 7,215 6.95 February 8,000 6,694 6.67 March 8,000 10,855 8.87 April 8,000 6,844 6.22 May 6,000 6,691 6.22

E R P Reports

ERP - STOCK REPORTS

REPORT TYPES

CONTENT

STOCK REPORTS

1 Inventory Status Inventory detail status Inventory-class by items 2 Inventory up to date

status Inventory status (both quantity &/ or value) up to specific date

3 Inventory status (period)

Inventory status for specified period

4 Non-Inventory up to date status

Non-inventory status (quantity) up to specified date

5 Stock statement

6 Inventory ageing analysis

itemwise inventory quantity/ on hand value wise ageing analysis up to date

7 Item-lot ledger Item*lot ledger date/ entrywise 8 Sub-contractor ledger

Sub-contractor ledger for specified period 9 Barden ledger

A Inventory statement for bank

Inventory statement for bank

B stock movement

C WIP stock position

D A-B-C Analysis ABC by consumption value E X-Y-Z Analysis XYZ by on hand value F F-S-N Analysis Analysis for FSN G Stock alert report Inventory items whose stock level is beyond permissible limit

H Items <reorder level> Inentory items whose stock is to be replenished I gen receipt - Issue

register partywise general (loan) receipt/ issues for specific period

J Test quantity report

K S/O*P/O status vs stock

L Batch costing

M Metal summary

N Production statement

Production statement for specified period O L/R report

ERP - SALES REPORTS

P Item price list List price item - class by itemwise Q Pending D/Ms for

S/O

R Items issued

without S/O Items issued or sold without S/O

S Performa Invoice printing

Performa Invoice printing

T Demand-note & Collection bill

U A/R follow-up wrt customer GIN

A/R follow-up wrt customer GIN

V Salesman analysis

W Invoice wrt customer RCI

X Invoice and Customer RCI

Y Credit-note and bank charges

Z sale-rate-Diff (retros)

Sale rate diff extract for specified item, party and retrospective period

A sales vis-à-vis costing

Inventory cost compared with sale value of sold items

B MIS reports

C Price variation report

report for supplementary bills for specific period

ERP - PURCHASE REPORTS

d Pending purchase

requisitions Pending purchase requisitions for P/O

e Executed purchase requisitions

f Vendor-Quote comparison

Comparative statement of vendor quotation

g vendor substitution Vendor substitution based on vendor performance h Purchase order status

P/O pending status i Item P/O rate analysis

Item P/O rate analysis j P.O./S.O. amendment

history History of P/O amendments

k order executed history

Order executed history up to specific date

l Items Rxd without P.O.

Item received without purchase order

m Items under inspection

Items under inspection

n Items inspection (excp) statement

Inventory items receipt inspection - Exception Report

o Vendor receipt - inspection statement

receipt-Inspection statement of vendors for specified period

p Item purchase (party) Purchase register (party x item-class)wise, within period defined

q Party sales/ purchase (itemwise)

Party x item purchase/ sale

r Purchase rate reconciliation

P/O rate vis-à-vis GIN rate vis-à-vis items vis-à-vis bill rate

s Value added for non-GIN

Non-GIN purchases

t Purchase by product

u Item/Party wise Vendor Performance

v Octroi statement

w Missing document Nos.

List of missing document numbers of inventory transaction

x Item auxiliary valuation

a Modify/ delete audit trail

Modify/ delete audit trail of transaction

b Party typewise sales (party*Item)

sales Register

c Transporters passed/ due bills

~ Container ledger

Sales order status Purchase order pending status

Item*period Inventory Valuation

Variance GIN & Bills valuation variance between GIN & Bills (including

auxiliary components)

Ledger for SC-In items

Stock ledger for sub-contractor - In items

Purchase quotation status

Purchase quotation status - executed and pending

Inventory cut-off date status

Supplementary bill details

Retest Inventory

RM Import & Indigenous register

Dispatch details Dispatch details - How dispatches are valued

vendor item rate history

Pending P/O schedule

sales return

Purchase return

Locationwise transfer

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