Part 1: The Role and Characteristics of the VCS
4.3 Particular strengths of the VCS in Guernsey in promoting social inclusion
4.3.2 Accessibility, reducing stigma and reaching out
So far, so good. We have discussed capacity. The next item for discussion is the production plan. The production plan of a project shows us exactly the proposed output of a plant or project. This output is usually described in units.
A production plan shows the output of goods achievable following the input of raw materials. The production plan will be based on the following:
(1) input – output arrangements.
(2) the number of work shifts.
It is important to note that a work shift is usually 8 hours. And so, there are 3 shifts of 8 hours each in a day.
Therefore, based on availability of raw materials and the dictates of the market, a plant can be run on the following:
(1) a single shift of 8 hours in a day.
(2) 2 shifts of 8 hours each a day.
(3) 3 shifts of 8 hours each in a day.
NOTE: Ideally in a year, it is safe to assume that there are 300 working days. This seeks to accommodate production losses arising from weekends, public holidays, plant breakdown and routine maintenance of machinery and equipment.
Below is a production plan of a sachet water and bottled water production plant. You are requested to study the plan and make sure you understand it. You are expected to be able to write a similar production plan.
EXAMPLE OF A PRODUCTION PLAN The Project
The project is a comprehensive project that will produce the following:
(1) Sachet water
(2) Bottled water
(3) Plastic bottles and caps for packing bottled water (4) Nylon for packing the sachet water.
Sachet Water Plant
The plant under consideration is a sachet water production line capable of producing 4000 sachets per hour. Working on a single shift of 8 hours, the plant can produce 32,000 sachets of water. Working on 2 shifts of 8 hours each, an output of 64,000 sachets is possible while 3 shifts of 8 hours each will produce 96,000 sachets per day.
Annual Capacity/Production Plan (Units of Sachet Water)
Year 1 Year 2 Year 3 Year 4-5
Installed capacity 35,040,000 35,040,000 35,040,000 35,040,000 Attainable capacity 31,536,000 31,536,000 31,536,000 31,536,000 Actual capacity 19,200,000 28,800,000 28,800,000 28,800,000 Proposed actual capacity is based on the following:
Year 1: 2 shifts of 8 hours each per day and 300 working days/year.
Year 2-5: 3 shifts of 8 hours each per day and 300 working days/year.
Attainable capacity is 90% of installed capacity.
Summary of Proposed Production Plan (Units of Sachet Water)
Year 1 - 19,200,000
Year 2 - 28,800,000
Year 3 - 28,800,000
Year 4 - 28,800,000
Year 5 - 28,800,000
BOTTLED WATER PLANT
The plant under consideration is a bottled water production line capable of producing 2,000 bottles of water per hour. Working on a single shift of 8 hours, the plant can produce 16,000 bottles. 2 shifts of 8 hours each
per day will produce 32,000 bottles while working on 3 shifts of 8 hours each per day, a total output of 48,000 bottles is possible.
Annual Capacity/Production Plan (Units of Bottled Water)
Year 1 Year 2 Year 3 Year 4-5
Installed capacity 17,520,000 17,520,000 17,520,000 17,520,000 Attainable capacity 15,768,000 15,768,000 15,768,000 15,768,000 Actual capacity 4,800,000 9,600,000 9,600,000 9,600,000 Proposed actual capacity is based on the following:
Year 1: 1 shift of 8 hours each per day and 300 working days/year.
Year 2-5: 2 shifts of 8 hours each per day and 300 working days/year.
Attainable capacity is 90% of installed capacity.
Summary of Proposed Production Plan (Units of Sachet Water)
Year 1 - 4,800,000
Year 2 - 9,600,000
Year 3 - 9,600,000
Year 4 - 9,600,000
Year 5 - 9,600,000
BLOW MOULDING AND INJECTION MOULDING UNIT
The plant under consideration is a pet blow moulding line capable of producing 2,000 bottles per hour. Working on a single shift of 8 hours, the plant can produce 16,000 bottles. Working on 2 shifts of 8 hours each, an output of 32,000 bottles is possible while 3 shifts of 8 hours each day will yield 48,000 bottles.
Annual Capacity/Production Plan (Units of Bottles)
Year 1 Year 2 Year 3 Year 4-5
Installed capacity 17,520,000 17,520,000 17,520,000 17,520,000 Attainable capacity 15,768,000 15,768,000 15,768,000 15,768,000 Actual capacity 9,600,000 14,400,000 14,400,000 14,400,000
Proposed actual capacity is based on the following:
Year 1: 2 shifts of 8 hours each per day and 300 working days/year.
Year 2-5: 3 shifts of 8 hours each per day and 300 working days/year.
Attainable capacity is 90% of installed capacity.
Summary of Proposed Production Plan (Units of Sachet Water)
Year 1 - 9,600,000
Year 2 - 14,400,000
Year 3 - 14,400,000
Year 4 - 14,400,000
Year 5 - 14,400,000
NYLON EXTRUSION AND PRINTING UNIT
The plant under consideration is capable of extruding 70kg of nylon per hour. Working on a single shift of 8 hours, the plant can extrude 560 kg of nylon. Working on 2 shifts of 8 hours each, an output of 1120 kg of nylon is possible. 3 shifts of 8 hours each per day yields an output of 1680kg of nylon.
Annual Capacity/Production Plan (Kg of extruded nylon)
Year 1 Year 2 Year 3 Year 4-5
Installed capacity 613,200 613,200 613,200 613,200 Attainable capacity 551,880 551,880 551,880 551,880
Actual capacity 336,000 504,000 504,000 504,000
Proposed actual capacity is based on the following:
Year 1: 2 shifts of 8 hours each per day and 300 working days/year.
Year 2-5: 3 shifts of 8 hours each per day and 300 working days/year.
Summary of Proposed Actual Production Plan
Year 1 Year 2 Year 3 Year 4 Year 5 Sachet
water (units)
19,200,000 28,800,000 28,800,000 28,800,000 28,800,000 Bottled
water (Units)
4,800,000 9,600,000 9,600,000 9,600,000 9,600,000 Pet
Bottles (Units)
9,600,000 14,400,000 14,400,000 14,400,000 14,400,000 Extruded
nylon
(kg) 336,000 504,000 504,000 504,000 504,000
Machinery and Equipment Required
The following machinery and equipment are required for the project:
1. 1 Unit comprehensive water treatment plant consisting of sand filters, activated carbon filter, iron filter, micro filters, UV sterilizers with lamps and electric control panels.
The function of the treatment plant is to treat the water and make it safe for drinking.
2. 2 units automatic sachet water packaging machine with full coding system built to NAFDAC specification.
Each packaging machine shall have a packaging capacity of about 2,000 sachets of water per hour (total say 4,000 sachets per hour).
3. 1 unit automatic water bottling line with in feed and out feed table. The installed capacity is between 2,000 to 3,000 bottles per hour (rinse, fill and cap) depending on bottle size to be filled.
The type of caps will be pilfer proof screw cap with tear-off ring.
4. 1 unit semi-automatic shrink sleeve label applicator with a capacity of about 3000 bottles per hour. The function of the shrink sleeve label applicator is to insert the shrink labels on the bottles.
5. 1 unit semi-automatic shrink wrapping machine. The function of the shrink wrapping machine is shrink wrapping of the pet bottled water with cardboard trays in their various combinations:
0.5 x 0.75 litre x 24 bottles 1.5 litre x 12 bottles
the acceptable film is polythene of good quality and strength.
6. 1 unit ink jet coding machine for insertion of packing information on the bottle.
7. Semi automatic pet stretch blow moulding machines with capacity of blowing different sizes of pet bottles. The moulding machine has pre-heaters, compressors and moulds for the various bottles.
8. Comprehensive injection moulding machine comprising:
- Pet preform injection moulders, - Auto loaders;
- Dry loader;
- Chiller;
- Injection moulds for pet preform;
- Injection moulds for caps.
The function of the injection moulding machine is to produce the preform and also the bottle caps.
9. 1 unit nylon extruder with installed capacity of 60kg – 70kg output per hour. The extruder shall be suitable to extrude both low density and high-density polyethylene. The function of the extruder is to extrude and blow the nylon into films.
10. 1 unit flexographic printing machine. The printing machine is used for printing on nylon on a roll conveyor format.
11. In-house laboratory complete with furniture, laboratory equipment, water test kits and re-agents.
4.0 CONCLUSION
In this unit, we discussed evaluating capacity and production plans. We discussed the concept of capacity as well as production plans. We then went ahead to provide an example of a sachet water and bottled water plant.
5.0 SUMMARY
In this unit, evaluating capacity and production plans were discussed.
The person appraising the project should understand how to conceptualize and prepare proper production plans. In the next unit, we will discuss Manpower Planning and Evaluation.
6.0 TUTOR-MARKED ASSIGNMENT
1. What do you understand by installed capacity of a plant?
2. How is it different from attainable capacity?
7.0 REFERENCES/FURTHER READING
Association of Cost Engineers (1991). Estimating Checklist for Capital Projects.
Leon Ikpe (1999). Project Analysis and Evaluation. Lagos: Impressed Publishers.
MODULE 2
Unit 1 Manpower Planning and Evaluation Unit 2 Demand and Market Analysis Unit 3 Evaluating Market Supply
Unit 4 Evaluating Competition and Marketing plans Unit 5 Financial Analysis of Project – Part One