Second Visit - Huntsman Plant considerations

Highlights

13 September, 2004

Reasons of success

• Normal, traditional manufacturing of pre-stressed concrete construction elements.

• This is important, since the production in former Soviet Union was not conforming to the simplest standards.

• Remember the Earthquake in Gumri and Spitak.

Reasons of success

• The technology of the pre-stressed concrete.

• Introducing the roof tiles.

Reasons of success

• Correct management.

• Correct salary policy.

• This is very important since the production in former Soviet Union was not securing safety even in terms of construction.

Plant Specifics

• Huge capacity

• Local resourses

• Rather big inventory

• One-month production cycle.

Plant Specifics

• Inventory. This gives opportunities for optimization of raw material order quantity.

Economic Order Quantity - EOQ• Q – quantity to order• D – demand, or rate of use• P – period, P = Q/D, e.g. in days• h – holding cost per unit for the period P• H – total holding cost for P,

H = h·(Q/2) ·P• C – ordering effort cost• I – inventory cost, I(Q) = H(Q) + C(Q)

I(Q) = h·Q/2 ·P + C

Iday = h·Q/2 + C/P

Iday = h·Q/2 + C·D/Q

EOQ, Iday(Q) = h·Q/2 + C·D/Q

EOQ = 2CD/h

Plant Specifics

• Different aspects of transportation…

• Cutting the slabs (panels).

Plant Specifics – New productions

• The idea of profitability of new productions is not certain, especially when there are no concrete suggestions.

• As in the case of the bottle production in the YBC, need for more investigation in this issue.

Research

• Plant has a laboratory, where the new types of concrete are developed.

• However, there is a need for:• More technological research to use typical

Armenian raw materials e.g. perlytes for lighter better production that will have e.g. better heat insulating characteristics;

• Marketing! The bottleneck is in the market!

Infrastructure• What does this plant add to Armenian

infrastructure?

• Positive example of success in general and particularly in the area of production of construction materials.

• Experience of specialists, knowledge.

• Strict quality issues, as peoples’ lives depend on the quality of construction materials.

You have to pay attention to:

• %-age of the used capacities;

• Times,

• Yields, also:

• PLEASE LOOK AT POTENTIAL IE PROBLEMS. E.G.:

• EOQ;

• TRANSPORTATION;

• SCHEDULING.