Monitoring machine shop as a responsibility center at Asea Brown Boveri limited Nasik

Abstract

ABB (India) is in the core sectors of India's infra-structural growth catering to the need of power systems, electrical equipments, industrial building systems and environmental control systems. ABB Nasik, is the medium voltage switchgear division with a turnover of 92 crores. Stiff competition prevails in the switchgear industry and in the present environment, with the customers dictating the prices and the delivery schedules, the market is for those who meets these requirements at best. The analysis of the data for the lost orders in 1997 shows that quite a number of orders, especially some of the big orders, were lost either due to price or delivery schedules. Late delivery in turn leads to increase in cost internally and late delivery charges externally from customers. The machine shops plays an important role in controlling both, the cost and delivery on time and initiate measures to reduce these parameters. For this the machine shops should know their own costs and whether they are competitive in the market (sub contractors). This project analyses the cost of manufacturing the components in the machine shop, if it were to operate independently and compares the rates with that of the vendors to find the components or those operations where the shop would be cheaper so as to take a decision on, making the components in-house or to sub-contract to make the component cost effective and also for measuring cost reduction exercises. Data were collected from vendors from different industrial areas of Nasik, Bombay and Pune. Internally data were collected from finance, EDP, planning and all feeder shop. The data were analysed and round that overall the components are still costly to be made in house, after separating the overheads contributions. Going to the component level and operation wise cost it may be possible to decide on the those operations or components which may be cheaper to make in-house taking different criteria into consideration.