Project Of Chirag

A PRODUCT PROJECT REPORT ON BEARINGS Prepared by Kotadiya chirag j. Class T.Y. B.B.A. Academic year 2009-10 Roll no 33 Seat no

Collage Shree gyanyagna collage of science of management, Rajkot Submitted to Saurastra University Guided by Prof. Namita talsaniya

1

DECLARATION I, undersigned KOTADIYA CHIRAG as a management student of T.Y. B.B.A. declare that the product project report as per the saurastra university’s rules and regulation and syllabus of T.Y. B.B.A. which is prepared by me and with the valuable guidance of prof. namita talsaniya. The product project report on the BEARINGS is submitted to gyanyagna collage of science and management, B.B.A. department, Rajkot. This is my original work and not submitted to any other collage or university.

Date:Place: - Rajkot Chirag kotadiya

2

PREFACE In today’s life management is very much important. Management is the backbone of any organization or any activity done. The real success of any management is lies in applying the professional management in all managerial activities. As we move in to the era of intense competition and high performance expectations. It is important that we develop the winning edge. Hence toattaion this objectives and to have the out look of all interactive of corporate world. I have prepared the product project report on BEARINGS. I have tried my best and have applied all my efforts, knowledge and sources available in this product project report.

3

ACKNOWLEDGEMENT I am very much thankful to all those people who helped me in preparing the product project report on BEARING. I am obliged to our project guide prof. namita talsaniya for giving the valuable guidance in furnishing this project. I am also thank full to my all those friends and other persons who directly or indirectly guide me to make my product project report more and more improving.

4

INDEX Sr.no. 1 2 3 4 5 6 7 8 9 10 11 12 13

Particulars Introduction to small scale industry Project at a glance Promoter’s back ground Basis and presumption Implementation schedule Location justification Product detail Management sat up Market analysis Technical aspects Financial details Risk factor Future plan

Page no. 6 7 8 10 11 12 13 14 15 16 21 37 38

5

1. INTRODUCTION TO SMALL SCALE INDUSTRY An industrial unit whose capital investment in plant and machinery is up to 5 crores of rupees are known as the small scale industry. For the nits supplying the spare parts and other components to the medium and large scale industry. The limit is also covers only investment in the plant and machinery. Land and factory building are excluded because there are wide variations of land prices at different places. Small scale industry is occupying an important place in the industrial development of backward or less economies like India. It’s important is given below. The capital requirement to start the S.S.I. is lower in comparison of the medium scale and large scale unit. – Less capital is requiring per unit of labor. Hence small scale units can generate large volume of the employment. – Small scale industries utilize local materials and resources therefore it does not require foreign exchange to import materials and resources. – It caters to local needs in a better way as per the local customs and traditions. –

6

2. PROJECT AT GLANCE Unit’s name: - X’treme enterprise Address for communication: - Q– 35, G.I.D.C. metoda, Kalawad road, Ta. Lodhika, Dist. Rajkot – 360005 Type of unit: - partnership firm Product: - Ball Bearings S.S.I. registration no. : - has been applied for Subsidy registration no: - has been applied for Bankers: - State bank of India I.D.B.I. Cost of project: - 49, 01,200

7

3. PROMOTER’S BACKGROUND PARTNER – 1 Name : - kotadiya chirag j. Age :- 21 years Education qualification: - B.B.A. with advanced marketing management Address: - “shree ram” Maruti Park – 1, B/h big bazaar, 150ft ring road, Rajkot – 360005. Work division: - administration, accounting, marketing & selling Capital contribution: - 25% Share in profit and loss: - 50%

8

PARTNER - 2 Name: - dobariya kirit m. Age: - 21 years Education qualification: - B.E. (mechanical) Address: - 402, mangal bhuvan appt. Kalawad road, Rajkot – 360005. Work division: - quality control, manufacturing management, material handling. Capital contribution: - 25% Share in profit and loss: - 50%

9

4. BASIS AND PRESUMPTION – – –

– – –

Wages are to be paid on the basis of prevailing wage rate in market. Interest rate on borrowed capital is on the basis of IDBI bank’s rate on 15 June 2009. Building is assumed on the basis of current rent prevailing in market on 15 June 2009. The factory hours will be of 12 hours of a day. 25 working days in a month is assumed 280 working days in a year are assumed.

10

5. IMPLEMANTATION SHEDULE Particulars Selection of site Preparation of project Acquiring of land and building Registration of SSI Acquiring of finance Arrangement of machinery & equipments Installation of machines & electrification Recruitment of personal & labor

days 15 days 45 days 30 days 30 days 60 days 45 days 60 days 45 days

11

6. LOCATION JUSTIFICATION The entrepreneur must select an ideal location n at the time of launching of the enterprise. Location of the factory is an important factor affecting the business organization. An ideal means a scientific selection includes nature and type of the business, opening advantage, economic factors and profit orientation. The cost of the production and the cost of the distribution play an important role in the profit maximization. Even if with the adequate capital on hand, if the location is unfavorable, will affect are profitability which may sometimes results into the closed down of the unit. It is preferable to start in Rajkot due to several factors that are as under: – The essential raw material require for the manufacturing of bearing like inner, outer, races, rollers, cages, washers etc. are easily available within the city itself. – There is labor available at cheap price and available at cheap price and all technical staff can be acquired from Rajkot also. – Electricity, banking, water, and internet services are available in the city. – The other major factor is that there is big market is available for bearing within the Rajkot i.e. local market itself is wide. For ex, oil engines industries existing in Rajkot and bearing are use in its manufacturing.

12

7. PRODUCT DETAILS Bearing is a mechanical element that permits relative motion between two parts, such as the shaft and the housing, with minimum friction. The function of bearing is as under. The bearing ensures free rotation of the shaft or the axle with minimum friction Bearing supports the shaft or the axle and holds it in correct position – The bearing takes up the forces that act on the shaft or the axle and transmits them to the foundation. – –

So, bearing is a vital component in any rotation mechanism of machinery.

13

8. MANAGEMENT SETUP The two partners are entitled to take the post of directors their names are – –

Mr. kotadiya chirag j. Mr. Dobariya kirit m. The capital ratio of both partners will be 50 : 50 and profit and loss will be shared as per capital sharing ratio. Mr. chirag kotadiya will look after the marketing and trade setting and administrative and accounting work as he is qualifying in B.B.A. Mr. kitit dobariya will look after the production management, quality control and technical matter of factory and material management.

14

9. MARKET ANALYSIS A) HISTORY In India bearing industry can be traced to a little over 50 years. The first unit to commercial production was national bearing co. ltd., Jaipur. Some small scale units in panjab and some other places also manufacturing bearings. Bearings industry developed tremendously in small scale sector during the late eighties and beginnings of nineties has mostly developed in Gujarat state and that too particularly in saurastra region. The raw material used for manufacturing bearing are produced from Mahindra and Mahindra, Bihar alloys, special sheets etc. As against global range 1, 50,000 different types of bearings are used in India. The indigenous production of bearing is limited to about 700 types. B) CURRENT MARKET POSSITION The current market position of Indian bearing industry is worth rs. 3500 crore. 45% of the market segment is covered by automotive segment and remaining 55% of the market segment is covered by industrial demand. In automotive segment 50% of market is organized segment manufacturers 15% are unorganized segment in India and remaining 35% of demand is satisfied by import. C) FUTURE MARKET POSSITION Out of the total revenues in the automotive segment, 60% of the revenues are contributes by original equipment manufacturers and the remaining 40% is by the demand from the after market. There has been a growth of 15% in the after market segment and OEMs demand has increased by more then 25% The market for automotive bearing is growing at almost 27% per annum. This is mainly because of multiple models in every vehicles segment entering the market. Hence, a definite increase in the original equipment segment is antiseptic. After market demand for automotive bearing is increasing, but at a slower rate as compared to the growth in vehicles population manufacturers are expecting sustained growth of 15% in the after market mainly due to increase in population of two wheelers, passengers cars and utility vehicles segment.

15

10.TECHNICAL ASPECTS A) MANUFACTURING PROCESS. Material for Races Rollers from mill.

Turning of Races

Heat Treatment

Grinding

Super Finishing of Races + Rollers

100% Noise testing before dispatch + Dust Proof Assay Line. + Imported washing line

Distribution

There are four major parts to a standard ball bearing: the outer race, the rolling balls, the inner race, and the cage. 16

Races •

Both races are made in almost the same way. Since they are both rings of steel, the process starts with steel tubing of an appropriate size. Automatic machines similar to lathes use cutting tools to cut the basic shape of the race, leaving all of the dimensions slightly too large. The reason for leaving them too large is that the races must be heat treated before being finished, and the steel usually warps during this process. They can be machined back to their finished size after heat treating.

•

The rough cut races are put into a heat treating furnace at about 1,550 degrees Fahrenheit (843 degrees Celsius) for up to several hours (depending on the size of the parts), then dipped into an oil bath to cool them and make them very hard. This hardening also makes them brittle, so the next step is to temper them. This is done by heating them in a second oven to about 300 degrees Fahrenheit (148.8 degrees Celsius), and then letting them cool in air. This whole heat treatment process makes parts which are both hard and tough.

•

After the heat treatment process, the races are ready for finishing. However, the races are now too hard to cut with cutting tools, so the rest of the work must be done with grinding wheels. These are a lot like what you would find in any shop for sharpening drill bits and tools, except that several different kinds and shapes are needed to finish the races. Almost every place on the race is finished by grinding, which leaves a very smooth, accurate surface. The surfaces where the bearing fits into the machine must be very round, and the sides must be flat. The surface that the balls roll on is ground first, and then lapped. This means that a very fine abrasive slurry is used to polish the races for several hours to get almost a mirror finish. At this point, the races are finished, and ready to be put together with the balls.

Balls •

The balls are a little more difficult to make, even though their shape is very simple. Surprisingly, the balls start out as thick wire. This wire is fed from a roll into a machine that cuts off a short piece, and then smashes both ends in toward the middle. This process is called cold heading. Its name comes from the fact that the wire is not heated before being smashed, and that the original use for the process was to put the heads on nails (which is still how that is done). At any rate, the balls now look like the planet Saturn, with a ring around the middle called "flash."

•

The first machining process removes this flash. The ball bearings are put between the faces of two cast iron disks, where they ride in grooves. The inside of the grooves are rough, which tears the flash off of the balls. One wheel rotates, while the other one stays still. The stationary wheel has holes through it so that the balls can be fed into and taken out of the grooves. A special conveyor feeds balls into one hole, the balls rattle around the groove, and then come out the other hole. They are then fed back into the conveyor for many trips through the wheel grooves, until they have been cut down to being fairly round, almost to the proper size, and the flash is completely gone. Once again, the balls are left oversize so that they can be ground to their finished size after heat treatment. The amount of steel left for finishing is not much; only about 8/1000 of an inch (.02 centimeter), which is about as thick as two sheets of paper.

•

The heat treatment process for the balls is similar to that used for the races, since the kind of steel is the same, and it is best to have all the parts wear at about the same rate. Like the races, the balls become hard and tough after heat treating and tempering. After heat 17

treatment, the balls are put back into a machine that works the same way as the flash remover, except that the wheels are grinding wheels instead of cutting wheels. These wheels grind the balls down so that they are round and within a few ten thousandths of an inch of their finished size. •

After this, the balls are moved to a lapping machine, which has cast iron wheels and uses the same abrasive lapping compound as is used on the races. Here, they will be lapped for 8-10 hours, depending on how precise a bearing they are being made for. Once again, the result is steel that is extremely smooth.

Cage •

Steel cages are stamped out of fairly thin sheet metal, much like a cookie cutter, and then bent to their final shape in a die. A die is made up of two pieces of steel that fit together, with a hole the shape of the finished part carved inside. When the cage is put in between and the die is closed, the cage is bent to the shape of the hole inside. The die is then opened, and the finished part is taken out, ready to be assembled.

•

Plastic cages are usually made by a process called injection molding. In this process, a hollow metal mold is filled by squirting melted plastic into it, and letting it harden. The mold is opened up, and the finished cage is taken out, ready for assembly.

Assembly •

Now that all of the parts are made, the bearing needs to be put together. First, the inner race is put inside the outer race, only off to one side as far as possible. This makes a space between them on the opposite side large enough to insert balls between them. The required number of balls is put in, then the races are moved so that they are both centered, and the balls distributed evenly around the bearing. At this point, the cage is installed to hold the balls apart from each other. Plastic cages are usually just snapped in, while steel cages usually have to be put in and riveted together. Now that the bearing is assembled, it is coated with a rust preventative and packaged for shipping.

18

B) PRODUCTION CAPICITY

Name of the Rate(rs) product

Daily Monthly production(units) production

Production Total par annum value(rs) units

Ball bearing

380

114000

110

9500

1,25,40,000

19

C) DETAILS OF RAW MATERIAL

PARTICULARS Forgings( races )

AMT (rs.) 3,32,500

9500 sets @ 35 Rollers ( balls )

2,40,000

24000 pieces @ 10 Cages

76,000

19000 pieces @ 4 Total Raw material (p.m.)

6,48,500

20

11.FINANCIAL DETAILS A) LAND & BUILDING As the financial capacity of partners are not enough to purchase the land & building. So, they will hire land and building on rent. The details of land and building are as under. 1) 2) 3) 4) 5)

Total area covered Shade covered Open space Monthly rent Total rent

- 1000 sq. meter - 800 sq. meter - 200 sq meter - 12,000 p.m. - 1, 44,000 p.m.

21

B) MACHIMARY & EQUIPMENT NAME OF MACHINE Surface grinding machine Center less grinding machine Bore grinding machine External grinding machine Honing machine Etching machine Belt grinding machine Centrifugal (cleaning machine) Lathe machine Drill machine Bench machine Hardness tester Inspection, quality control equipment gauges etc. Tools, spindles, fixtures. Erection & installation Furniture & office equipments Total Prooperative expense Total

QUANTATY NO.

HORCE POWER

PRICE

1

10 h.p.

4,00,000

1

5 h.p.

4,00,000

1

3 h.p.

4,00,000

1

3 h.p.

4,50,000

1 1 1

2 h.p. 1 h.p. 1 h.p.

3,00,000 7,000 5,000

1

1 h.p.

10,000

1 1 1 1 -

2 h.p. -

15,000 7,000 4,000 10,000 2,00,000

-

-

50,000

-

-

2,00,000

-

-

55,000 25,13,000 50,000 25,63,000

Total investment in fixed assets 22

Machinery and equipment

25, 63,000

23

INVESTMENT IN SHORT TERM ASSETS A) Cost of raw material (p.m.)

PARTICULARS Forgings( races )

AMT (rs.) 3,32,500

9500 sets @ 35 Rollers ( balls )

2,40,000

24000 pieces @ 10 Cages

76,000

19000 pieces @ 4 Total Raw material (p.m.)

6,48,500

24

B) Salary and wages Particulars

Rate (p.m.)

No. of persons

Salary to partners Supervisor Skilled workers Unskilled workers Total Prerequisitesof salaries @ 10% Total salary

5,000 3,500 3,000 2,500

2 1 6 8

Total salary (p.m.) 10,000 3,500 18,000 20,000 51500 5,150 5,6650

C) UTILITIES

Power consumption 4500 units’ p.m. @ 4.50 rs. 4000 × 4.5 = 20,250

25

D) Other expanses

Particulars Rent Consumable like grinding wheel, kerosene, grease, cuttings oil etc. Telephone exp. Repairs and maintenance Advertisement & publicity Packing and forwarding Marketing and sales Traveling & conveyance Transport of raw material Insurance Miscellaneous expanses Postage and stationary Total

Rate (p.m.) 12000 10,000 1,500 3,500 5,000 9,000 3,500 4,500 1,000 1,500 1,500 1,000 54,000

26

E) TOTAL INVESTMENT IN WORKING CAPITAL PARTICULARS AMT (RS) Raw material 6,48,500 Salaries and wages 56,650 Utilities 20,250 Other expenses 54,000 Total 7,80,400 Working capital for 3 months

7, 79,400 × 3 = 23,38,200

27

TOTAL COST OF PROJECT Particulars Fixed cost Working capital for 3 months Total

Amt (rs) 25,63,000 23,38,200 4901200

28

DETAILS OF MEANS OF FINANCE

Particulars Owned capital Partner 1 (25%) Partner 2 (25%) Borrowed capital (50%) Total

Amt (rs.) 12,25,300 12,25,300 24,50,600 49,01,200

Interest on borrowed capital (21%) =5, 14,626 p.a.

29

TOTAL COST OF PRODUCTION A) RAW MATERIAL PARTICULARS Forgings( races )

AMT (rs.) 3,32,500

9500 sets @ 35 Rollers ( balls )

2,40,000

24000 pieces @ 10 Cages

76,000

19000 pieces @ 4 Total Raw material (p.m.)

6,48,500

Total raw material (p.a.)

7,78,2000

6,48,500 × 12

B) RENT & INSURANCE

Particulars Rent Insurance Total (p.m.) Total (p.a.)

Amt (rs.) 12,000 1,500 13,500 1,62,000

13,500 × 12

30

C) Salary and wages Particulars

Rate (p.m.)

No. of persons

Salary to partners Supervisor Skilled workers Unskilled workers Total Prerequisites of salaries @ 10% Total salary Total (p.a.) 56,650 × 12

5,000 3,500 3,000 2,500

2 1 6 8

D) ADMINISTRATIVE EXPENCES PARTICULARS Postage & stationary Telephone exp. Travelling expenses Miscellaneous exp. Total exp (p.m.) Total (p.a.) 8,500 × 12

Total salary (p.m.) 10,000 3,500 18,000 20,000 51500 5,150 56,650 6,79,800

AMT. (rs.) (p.m.) 1,000 1,500 4,500 1,500 8,500 1,02,000

31

E) SELLING AND DISTRIBUTION PARTICULARS Marketing and sales Advertisement & publicity Packing & forwarding Total (p.m.) Total (p.a.)

AMT(rs.) 3,500 5,000 9,000 17,500 2,10,000

17,500 × 12

F) REPAIRS AND MAINTANANCE Repairs and maintenance 3500 × 12 = 42,000 (p.a.)

G) CONSUMABLES Gridding wheels, kerosene, grease, cutting oil, etc. 10,000 × 12 = 1, 20,000

32

TOTAL COST OF PRODUCTION PARTICULARS Raw material Rent & insurance Salary & wages Administration exp. Selling and distribution Repairs and maintenance Consumable Total cost (p.a.)

AMT (rs.) (p.a.) 77,82000 1,62,000 6,79,800 1,02,000 2,10,000 42,000 1,20,000 91,03,800

33

COST OF RUNNING BUSINESS Particular Total cost of production Interest on borrowed capital

Amt (rs) 91,30,800 5,14,626

24,50,600 × 21% Depreciation on office equipment

11,000

55,000 × 20% Depreciation on machinery & equipment

1,99,800

19,98,000 × 10% Depreciation on tools, fixtures, measuring and testing equipment

92,000

4,60,000 × 20% Total cost

99,21,226

34

TURN OVER

Particulars

Amt (rs.)

Yearly sales of 1, 14,000 pcs. @ 110

1,25,40,000

Yearly sales of scrap

1,50,000

Total turnover (p.a.)

1,26,90,000

NET PROFIT PARTICUALRS Sales Less: cost of running business Total Less: 35% tax Net profit

AMT. 1,26,90,000 99,21,226 27,68,774 9,69,070 17,99,704

35

BREAK EVEN ANALYSIS

Particulars Rent depreciation on office equipment Depreciation on machinery Depreciation on tools, fixtures, measuring & testing equipment 40% of salaries& wages 40% of other contingent exp. Insurance Total fixed cost

Amt(rs.) 1,44,000 11,000 1,99,800 92,000 2,71,920 4,98,000 18,000 17,49,346

BREAK EVEN POINT = Fixed cost × 100 Fixed cost + net profit 17, 49,346 =

× 100 17, 49,346 + 17,99,704

=

49.29%

36

CALCULATION OF DIFFERENT RATIOS NET PROFIT RATIO Net profit =

× 100 Sales 17, 99,704

=

× 100 1, 26, 90,000

=

14.18%

RATE OF RETURN Net profit =

× 100 Cost of production 17, 99,704

=

× 100 49, 01,200

=

36.72 %

37

12 RISK FACTOR – Due to improved technology, improved fuel quality and better maintenance of vehicles it reduces replacement rate which turn in to slower growth in after market segment. – Vehicles owners prefer imported bearings due to lower costs. Cost different is almost 50% between domestic bearing and imported from china’s bearings – The bearing industry also suffers from structural deficiencies, which are making it less competitive in the global market – In this industry, there is preveling high competition in market. There are many huge companies are involved in this business.

38

13 FUTURE PLANS The future plan of the company will be to become world class bearing and auto parts manufacturing company. The company will expand its market up to international level

39