Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
WORK IMPROVEMENT PROJECT
CRITICAL PATH ANALYSIS TO REDUCE DELIVERY TIMES IN SHIPBUILDING COMPANY M/S GOA SHIPYARD LTD. BY SUYOG POWAR – 34
UNDER THE GUIDANCE OF – PROF. RAJ AMONKAR
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
ACKNOWLEDGEMENT
I take this opportunity to thank Prof. Raj Amonkar who has been instrumental in motivating me and guiding me all through this work improvement project. I also would like to thank the Officer In-charge (Outfitting Hull section) of Goa Shipyard Ltd. for allowing me to carry out this study and providing the required assistance and guidance for successfully completing this project. Suyog Anand Powar
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
PROJECT SYNOPSIS In today’s world of increasing competition, it is very essential that one make’s the best use of the scarce resources that is available. Shipbuilding Industry in India is a very labour intensive industry and hence a small reduction in production time can result in huge savings. Also, with Indian Shipyards competing globally for foreign orders it is imperative that they deliver ships on time. Indian Shipyards over the past have been suffering because of their inability to maintain delivery schedules and is therefore unable to take advantage of the low labour costs as compared to other shipyards around the world. In this project, I have taken up M/s Goa Shipyard Limited, India’s premier defence shipyard to study the production time and the benefits that can be reaped from doing so. I shall be using critical path analysis as a tool in achieving this objective and shall also bring into light the costs involved in doing so along with the conclusions and recommendations.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
EXECUTIVE SUMMARY With the large boom in the shipbuilding industry, and the requirement of new vessels in Indian navy and Indian Coast Guard, Goa Shipyard Limited is forced to deliver ships ahead of schedule so as to get orders ahead of its competitors Mazagon Dock Limited, Mumbai and Garden Reach Shipbuilders & Engineers, Kolkata. In view of this, we are making an attempt to understand the critical path involved in the construction of hull, which is a major requirement for launching of the vessel. Also, we shall attempt to apply the concept of project crashing so as to reduce the time required for delivery of the ship, and hence ensure more orders for Goa Shipyard Limited.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
TABLE OF CONTENTS SR. NO. 1 2 3 4 5 6 7 8 9 10
TITLE
PAGE NO.
Profile – Goa Shipyard Limited Methodology Involved Introduction – Critical Path Analysis Data Collection Network Construction Project Crashing Analysis Conclusion Recommendations List of figures/tables
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6 11 12 15 16 18 23 24 25 26
Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
COMPANY PROFILE:
Goa Shipyard Ltd, an ISO 9001 : 2000 Company is one of the leading shipbuilding yards on the west coast of India. Goa Shipyard Limited (GSL) was established in 1957 is today a leading shipyard on the West Coast of India, meeting the exact requirements of varied customers in the field of design, development, construction, repair, modernisation, testing and commissioning of ships. Initially, it was started as a small barge building yard. However, GSL has grown in reputation as one of the most sophisticated ship builders in the country. The inherent strengths of GSL are: •
CAD/CAM centre.
•
State-of-the-art manufacturing facilities
•
A work force of over 2000 skilled personnel.
•
Over 175 qualified engineers and naval architects.
GSL, can not only build traditional military ships and marine crafts, but also next generation vessels - Surface Effect Ships, Hovercrafts, High Speed Aluminum Hulled
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited Vessels, Pollution Control Vessels, Advance Deep sea Trawlers, Fish Factory vessels, Catamarans, Pleasure submarines and offers a whole range of marine products and services.
SERVICES PROVIDED 1) SHIPBUILDING GSL, undertakes design, construction of a wide range of ships. Namely, Advanced Offshore patrol vessels, Missile crafts, Extra fast attack crafts, Fast patrol vessels, Offshore patrol vessels, passenger vessels, landing crafts, survey vessels, and Oil tanker. 2) SHIP REPAIRS AND REFIT GSL has been providing ship repair and refit services right from its inception in 1957, as a small barge repairing yard. Over the years GSL has diversified into repairs of various kinds of vessels. Namely Tugs, survey vessels, fast patrol vessels, extra fast attack crafts, Advanced offshore patrol vessels, Landing craft utility vessels, Passenger vessels and Sail training ships. Ship repair and refits range from routine maintenance, repair and surveys to major steel renewal, engine replacement, total machinery overhaul and extensive damage repair. The repair division is ably supported by a team of naval architects and engineers. Inhouse welders, pipe fitters, structural fitters, electricians and carpenters are employed to ensure high quality, cost efficiency and rapid turn-around. By using standard equipment and developing an excellent rapport with a worldwide network of suppliers, GSL has devised a rapid response program for expeditious supply of spare parts and prompt service, thus cutting down costly down time.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited 3) SHIP MODERNISATION/ SHIP CONVERSION The shipyard offers the facility of ship modernization and conversion which is fast gaining precedence over new construction. Services ranging from replacing weapons and sensors to reengineering and installing CCD (Camouflage Concealment and Deception) technology on platforms enabling combatants to increase the role worthiness and punch of existing platforms, exponentially. GSL also undertakes mid-life modernization and conversion of ships. 4) GENERAL ENGINEERING WORKS Some of the areas of general engineering works carried out at GSL are : a) Controllable Pitch Propellers (CPP) System 1. Marketing, Procurement & Sales of CPP Systems and spares 2. Indigenisation of CPP equipments & spares 3. After sales services and providing assistance to customers for vessels with stern gear systems. 4.
In house Assembly & Testing and tuning of CPP System, before supplying to the customers.
5. Co-ordination in respect of design, manufacturing, inspection, supply of CPP Systems and spares b) Damage Control Simulator: To Supervise the execution of DCS work and conduct final trials of DCS. c) Remote Control System: 1. Product support to Navy, Coast Guard by way of supply of spares and services for routine maintenance and major overhauls. 2. Indigenization and remote control system wherever applicable / required.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
FACILITIES AT GSL BUILDING BAYS GSL has three large self supporting all weather building bays with a working floor area over 10,000 sq.m. With a maximum length of 200 m, an inside width of 25 m. and craneage capacity of upto 40 tonnes, these bays are fully equipped for construction, modernisation and repair of all types of naval crafts and medium sized commercial vessels. SLIPWAYS GSL has four slipways having dimensions 216M x 22M, 182M x 22M, 119M x 29.6M and 79M x 19.6M] Capable of launching and docking vessels having drafts upto 5M and docking weight upto 2500tons. OUTFITTING JETTY The 180 m. long jetty is equipped to carry out outfitting and basin trials of ships to the highest ship building standards. STEEL PREPARATION SHOP Complementing the hull fabrication bays is a modern steel preparation shop equipped with CNC Plasma cutting machines, automated shot blasting and priming plant and processor-controlled bending machines. Steel, Aluminium and other non- ferrous plates are cut by computer controlled plasma arc cutting machines for a precise fit and finish. ALUMINIUM FABRICATION SHOP Aluminium alloy fabrication and welding procedures are blended with new ship construction processes with the installation of an exclusive aluminium workshop. Highly skilled technicians and production workers ensure consistently high quality of output.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited CAD/ CAM GSL's CAD/CAM centre has state-of-the-art computer hardware and world class TRIBON shipbuilding software. All production information from the CAD/CAM centre is directly fed to the CNC steel cutting and pipe bending machines. To enhance productivity, GSL is adopting “Modular Construction Techniques".
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
METHODOLOGY INVOLVED Firct of all, we have divided the ship into a number of blocks. Each block will have the same activities. These blocks are simultaneously manufactured so as to reduce the time. For e.g. In the normal case, upper decks can be fabricated only when the lower decks are ready. This affects the manpower utilization thus resulting in huge losses. Now, if all the blocks are manufactured independently and then assembled a lot of valuable time will be saved. Here, due to limitation of time we shall do the Critical Path Analysis of only one block and the same may be applied to the other blocks.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
INTRODUCTION - CRITICAL PATH ANALYSIS NEED FOR SYSTEMATIC APPROACH A project, be it a construction work, or design and development of a prototype or any turnkey project consists of a large number of activities whose scheduling by conventional methods is difficult. Projects that are not scheduled properly generally tend to extend beyond the contract period which in turn results in: Increased investment in work in progress Delay in invoicing thus reducing working capital Increases fixed manufacturing expenses as men and machines are employed beyond the economic time span A number of scientific tools are available for planning but the planning of rojcts is best performed through a well-known technique called Critical Path Analysis. WHAT IS CRITICAL PATH ANALYSIS? Critical Path Analysis is a synthesis of two independent techniques: Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM). PERT was developed by Naval Engineers of USA Navy in charge of Polaris Sub-marine Missile Project in 1958. CPM was developed by Morgan Walker of Du Pont and James Kelly of Ramington Rand (USA) in 1957 for use in planning and scheduling of the construction of a chemical plant. Though the two techniques were developed independently, they have many features in common and are now combined into a technique called Critical Path Analysis (CPA). DIFFERENCES BETWEEN PERT NETWORK AND CPM NETWORK: 1. PERT is event oriented while CPM is activity oriented 2. PERT provides for an allowance for uncertainty while CPM does not. 3. Activity times in CPM technique are related to costs while it is not so in PERT since it is event oriented.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited ADVANTAGES OF CRITICAL PATH ANALYSIS 1. Forces a thorough pre-planning. Each and every activity comprising a project is identified and recorded. 2. Increases coordination of tasks as technological relationships between the activities suggest which activities can run simultaneously and which should succeed others. 3. Helps computations of different project durations for different level of resources and thereby select a plan that minimizes total project cost. 4. Indicates optimal start and finish times of each activity of the project 5. Defines areas of responsibility of different departmental heads for timely execution of the project 6. Facilitates progress reporting and limits unnecessary discussion at the progress meetings to minimum 7. Identifies trouble spots often in advance and applies remedial measures. 8. Enables plan to be revised in accordance with changing circumstances 9. Helps prevent cost overruns. STEPS IN USE OF CRITICAL PATH ANALYSIS: 1. Activity Identification: Break down a project into a set of identifiable activities. 2. Activity Relationships: Establish technological relationships between activities. 3. Network construction: Construct an arrow diagram called network 4. Activity Time Estimation: Estimate time duration of each activity of the project. 5. Network Time Analysis and Activity Float Analysis: Identify critical path, critical activities and slack of non-critical activities. 6. Probability Aspects of Project Planning: If the activity times are deterministic, find the expected duration of the project. If no, find the expected duration of the project and the probability of completing the project by a target date. 7. Project Crashing: Collect activity time cost data. i.e. In case of repetitive projects where in time and cost of each activity is known with certainty, crash the project to its minimum duration.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited 8. Resource Allocation and Resource Levelling: Review resource requirements and ensure that resource requirement of all activities does not exceed resource availability and requirement of the resource during the duration of the project is as uniform as possible. 9. Project Scheduling: Prepare a time schedule for the activities of the project. 10. Project Monitoring: Review progress periodically and expedite, if required.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
DATA COLLECTION BLOCK BUILDING ACTIVITIES: The list of activities along with their sequence of occurrence and the duration taken by each activity as per the discussion held with Officer in Charge (Hull) is as follows: Activity
Activity Description
Depends
Duration in days
Code A1 A2 A3 A4 A5
Drawings for the block Draw materials from stores Cutting of plates for skids of block Cutting for plates for block Floor marking for block and skid
On A1 A2 A2 A1
15 days 3 days 2 days 3 days 6 days
A6
erection Fabrication and erection of skid
A3, A5
8 days
A7 A8 A9 A10 A11
for block Inspection of skid by Quality Fabrication of Components Running welding of components Assembly of components Inspection prior welding by
A6 A4 A8 A7, A9 A10
2 days 10 days 7 days 10 days 2 days
A12
Quality and class surveyor Rectifications of Dry survey
A11
7 days
A12 A13 A14
8 days 3 days 2 days
defects by Quality and Class A13 A14 A15
Surveyor Final welding of block Releasing of block Shifting of block to erection site TABLE 1
NETWORK CONSTRUCTION: A network is a graphical representation of activities comprising the project. The network is formed by a series of connected arrows and circles which give technological relationships to the activities involved.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited The most common approach in drawing a network is to start with the first activity and draw the subsequent activities as per relationships. It consist of the following 7 steps: 1. Prepare a list of activities of the project. 2. Establish technological relationships between the activities. List all the activities in the sequence in the second column and the corresponding activities on which they depend in the first column. 3. Connect the first activity in the first column to the activity opposite to it in the second column. Locate the activity connected back into the first column and join this activity to the activity opposite to it in the second column. Rrepeat the process till one sequence is covered which gets first activity chain. 4. Start with the next activity from the top in the first column which has not been connected in the first sequence and follow up step (3) complete the sequence to obtain next activity chain. 5. Repeat step (4) over and over again until all activities in the first column have been connected. 6. Build up network from activity chains.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
2
A15
3
A14
8
A13
7
A12
2
A11
10
A10
2
A7
8
A6
2
A3
7
A9
10
A8
3 A4
6 A5
3
A2
15
A1
FIG. 1 PATH A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15
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LENGTH OF TIME (IN DAYS) 15+3+2+8+2+10+2+7+8+3+2 = 62
Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited A1-A5- A7-A10-A11-A12-A13-A14-A15 A1-A2-A4-A8-A9- A11-A12-A13-A14-A15
15+6+2+10+2+7+8+3+2 = 55 15+3+3+10+7+2+7+8+3+2= 60
Hence, the first path is the critical path because it requires the longest time i.e. 62 days for completion.
PROJECT CRASHING Critical path measures the expected duration of the project and identifies the activities or the events which need attention in completing the project. In some cases, it is desirable to cut down the total project time. This aspect of project planning is called project crashing. Project Crashing may be carried out for one or more of the following objectives: 1. To complete the project in the least possible time. E.g. defense projects where cost is of less importance and time is the most important factor 2. To effect cost economy i.e. to reduce the project cost below its normal cost 3. To expedite one or more remaining activities when earlier critical activities have taken more than estimated time and thereby prevent penalties and cost overruns. 4. To reduce idle time o the facilities in the non-critical paths and achieve uniformity in requirement of resources. 5. To release the facilities more quickly for transfer to other profitable projects. 6. To enhance reputation of the firm and thereby improve its competitive position. The reduction in duration of activities may be achieved by 1. allocating more manpower and machines than originally planned for 2. working additional shift or overtime 3. awarding work to vendors who charge extra but expedite deliveries A major advantage of CPM is its ability to evolve a relationship between time and cost of the activity and it is the concept which is exploited in project crashing.
TIME COST RELATIONSHIP
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited Project Cost like time management plays an important role in any project. The project costs can be classified into 2 groups: project direct costs and project indirect costs. Project direct costs represent the sum of the direct activity costs. Project indirect costs are the costs related to the entire duration of the project. The project indirect costs increase/decrease directly with increase/decrease in the project completion time. The indirect costs include costs of indirect labour, salaries and customary overhead, interest payable on the capital, penalty due to late completion of the project, loss of business, and others. Project total cost therefore, are different for different project completion times. The project completion time for which sum of these two costs is minimum is called optimal project duration. Terminology: 1. Normal Time (tn) – of an activity represents the expected duration of the activity. 2. Crash Time (tc) – of activity represents the irreducible minimum time required to complete an activity 3. Normal Cost (Cn) – of an activity represents the lowest possible direct cost required to complete an activity within its crashed time. 4. Crash Cost (Cc) – of an activity represents the lowest possible direct cost required to complete an activity within its crashed time. 5. Activity cost slope (δC/δT) is the additional cost to be incurred to reduce the duration of an activity by one unit of time. Graphical Representation of Project Costs: The sum of direct and indirect costs if plotted gives rise to a dome shaped curve implying that total cost of the project reduces with the decrease in its duration and then steadily increases with further decrease in the project duration. The project duration for which the total cost is minimum is called optimum duration.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
FIG. 2
TABLE 2
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited The critical path is A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 and the normal duration of the project = 62 days. To complete the project in 62 days, each of the activities is to be completed within its normal duration. The direct cost of the project can be obtained by adding the normal costs of all the activities. This equals to Rs. 6,12,000/In the critical path, activity A7 has the lowest cost slope. This activity can be crashed by 1 day. New project duration= 62-1 = 61 days New project cost = Rs. 612000 + Rs. 1 X 2000 = Rs. 614000 However, A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 still remains to be the critical path. Hence, the next activity which has the lowest cost slope is A11. This activity can be crashed by 1 day. New project duration = 61-1 = 60 days New project cost = Rs. 614000 + Rs. 1 X 2000 = Rs. 616000 A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 still remains to be the critical path. Hence the next activity with the lowest cost slope is A2. This activity can be crashed by 1 day. New project duration= 60-1 = 59 days New project cost = Rs. 616000 + Rs. 1 X 3000 = Rs. 619000 A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 still remains to be the critical path. Hence the next activity with the lowest cost slope is A3. This activity can be crashed by 1 day. New project duration= 59-1 = 58 days New project cost = Rs. 619000 + Rs. 1 X 4000 = Rs. 623000 Now, we have 2 critical paths: A1-A2-A3-A6-A7-A10-A11-A12-A13-A14-A15 & A1A2-A4-A8-A9- A11-A12-A13-A14-A15 each with duration of 58 days. Activity A12 can be crashed by 2 days while activity A9 of second critical path can be crashed by 2 days. Hence, the entire duration can be crashed by 2 days New project duration= 58-2 = 56 days New project cost = Rs. 623000 + Rs. 2 X (4000+4000) = Rs. 639000
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited The table for the same can be obtained as shown below:
TABLE 3
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
ANALYSIS With the data above, we shall prepare the project-time cost matrix so as to obtain the optimal duration of the project.
TABLE 4 Time Cost Relationship 1400000
Cost per Day
1200000 1000000 Direct Cost
800000
Indirect Cost
600000
Project Cost
400000 200000 0 0
20
40 Days
FIG. 3
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60
80
Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
CONCLUSION: From the table it can be seen that the project cost is minimum when the project duration is 46 days. Hence the results can be summarized as follows: Normal Duration of the project = 62 days Crashed Duration of Project = 44 days Optimal Duration of Project = 46 days
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
RECOMMENDATIONS 1. Sophisticated machinery: Use of automated and semi-automatic welding machines can definitely reduce the duration required for fabrication and welding activity.
2. Scheduling of Activities: Proper planning and scheduling of activities can save a lot of time especially for activities such as collection of material from stores and inspection by class surveyor. 3. Efficient Design: Use of sophisticated drawing software such as Catia or tribon can make work more efficient and hence reduce number of defects arising at the time of inspections. Also, use of such a software reduces re-work to a large extent.
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
LIST OF FIGURES/TABLES 1. Table 1 – Block Building Activities with Duration in Days 2. Figure 1 – Network Diagram for Block Building Activities 3. Figure 2 – Time Cost Relationship 4. Table 2 – Calculation of cost Slope for each Activity 5. Table 3 – Crashing of Activities 6. Table 4 – Total Project Cost Calculation 7. Figure 3 – Time Versus Cost Relationship
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
BIBILIOGRAPHY 1. Chase, Jacobs, Aquilano - Operations Management for Competitive Advantage 2. www.mindtools.com/critpath.html 3. en.wikipedia.org/wiki/Critical_path 4. www.bizhelp24.com/small-business-portal/critical-path-analysis-project-management
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Critical path Analysis – Reduce Delivery Times in M/s Goa Shipyard Limited
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