Project and process engineering management industrial engineering management

PROJECT AND PROCESS ENGINEERING MANAGEMENT
L | C | LOGISTICS
PLANT MANUFACTURING AND BUILDING FACILITIES EQUIPMENT
Engineering-Book
ENGINEERING FUNDAMENTALS AND HOW IT WORKS
June 2020
Expertise in Process Engineering Optimization Solutions & Industrial Engineering Projects Management
Supply Chain Manufacturing & DC Facilities Logistics Operations Planning Management

Project and Process Engineering Management
Engineering project and process management is focuses solely on engineering projects. It uses all of
the same standard methodologies and processes as any other type of project management
Engineering process management is centered on managing engineers and engineering process tasks
that have the following characteristics:
Process tasks are routine
Processes are repeatable
Work is ongoing, with no defined end
Process tasks are part of regular business operations
Engineering project management is focused on managing engineering projects. An example may be a
new drinking water processing and PET bottling plant (see example below)
One key difference is that engineering project management requires the management of all aspects of
the project. Not just management of the engineers or the engineering work.
Some non-engineering tasks that an engineering project manager still has to manage are:
Scheduling; Purchasing of materials ; Approval of plan documentation; Budget and cost management
An engineering project manager is the project manager on an engineering project. A project engineer is
an engineer that works as part of the project team. Sometimes a lead project engineer may be
assigned to a project. Their job is to oversee and approve the project's technical engineering
components

Main tasks of a project and process engineering manager are:
Project and stakeholder management – Direct the execution and manage the appropriate resources to
create a good or service or provide support to those who do
· Asset management – Direct strategic work related to buildings, facilities, equipment related to market
expansion. Support of local procurement projects and initiatives
· Cost management – Manage the costs of producing goods or services related to acquiring resources,
transforming them or delivering them to customers. Driving down costs through efficient operations
management to create a critical competitive edge
· Indirect management of project teams and resources
· Producing the right kind of goods and services that satisfy customers’ needs (effectiveness objective)
· Determine stock of materials (inventory) needed to produce goods or services
· Maximizing output of goods and services with minimum resource inputs (efficiency objective)
· Ensuring that goods and services produced conform to pre-set quality specifications (quality objective)
· Minimizing throughput-time- the time that elapses in the conversion process- by reducing delays, waiting
time and idle time (lead time objective)
· Maximizing utilization of manpower, machines, etc. (Capacity utilization objective)
· Minimizing cost of producing goods or rendering a service (Cost objective)
· Coordinates across multiple teams to develop medium-term and/or long-term work schedules that help
the organization achieve its priorities and fulfill its business plans

Project Management Basics
1: Identify & Meet with Stakeholders
A stakeholder is anyone who is affected by the results of your project plan. That includes your
customers and end users
Meet with the project sponsors and key stakeholders to discuss their needs and expectations, and
establish baselines for project scope, budget, and timeline. Then create a Scope Statement document
to finalize and record project scope details, get everyone on the same page, and reduce the chances of
costly miscommunication.
Cost control, in particular, is critical during this stage of the process, as well; look beyond the
stakeholders' stated needs to identify the underlying desired benefits. These benefits are the objectives
your project should deliver

2: Set & Prioritize Goals
Once you have a list of stakeholder needs, prioritize them and set specific project goals. These
should outline project objectives, or the metrics and benefits you hope to achieve. Write your goals
and the stakeholder needs they address in your project plan so it's clearly communicated and easily
shareable
3: Define Deliverables
Identify the deliverables and project planning steps required to meet the project's goals. What are
the specific outputs you're expected to produce?
Next, estimate due dates for each deliverable in your project plan
4: Create the Project Schedule
Look at each deliverable and define the series of tasks that must be completed to accomplish each
one. For each task, determine the amount of time it will take, the resources necessary, and who will
be responsible for execution
Next, identify any dependencies. Do you need to complete certain tasks before others can begin?
Input deliverables, dependencies, and milestones into your Gantt chart. Be sure you also
understand how to write a project management report for a summary overview of the current status
of the project
Involve your team in the planning process. The people performing the work have important insights
into how tasks get done, how long they'll take, and who's the best person to tackle them. Draw on
their knowledge! You'll need them to agree with the project schedule and set expectations for work
to run smoothly

5: Identify Issues and Complete a Risk Assessment
No project is risk-free. Crossing your fingers and hoping for the best isn’t doing you any favors. Are
there any issues you know of upfront that will affect the project planning process
When developing a project plan, you should know how to manage risk in a project and consider the
steps you should take to either prevent certain risks from happening, or limit their negative impact.
Conduct a risk assessment and develop a risk management strategy to make sure you're prepared.
Tackle high-risk items early in your project timeline, if possible. Or create a small "time buffer" around
the task to help keep your project on track in the event of a delay.
6: Present the Project Plan to Stakeholders
Explain how your plan addresses stakeholders' expectations, and present your solutions to any
conflicts. Make sure your presentation isn't one-sided. Have an open discussion with stakeholders
You need to determine roles: Who needs to see which reports, and how often? Which decisions will
need to be approved, and by whom?
Communicate clearly. Make sure stakeholders know exactly what's expected of them, and what actions
they need to take. Just because it's obvious to you doesn't mean it's obvious to them!
If your plan or schedule doesn’t align with stakeholders' original expectations, communicate that now to
avoid any nasty surprises or tense conversations down the line. Rather than telling stakeholders their
expectation or request is unrealistic, tell them what's required to make it happen, including how much
time, money, or manpower. Let them decide if it's worth dedicating the extra resources

In financial accounting capital expenditures (CapEx) and operating expenditures (OPEX) are two
categories of business expenses. However, there are distinct differences between the two, including
their respective tax treatments
Capital expenditures comprise major purchases that will be used in the future.
Operating expenditures (expenses) represent day-to-day costs that are necessary to keep a business
Capital expenditures consist of the funds that companies use to purchase major physical goods or
services that the company will use for more than one year. A company might incur CapEx to increase
or improve its fixed assets, for example a new drinking water and PET bottling Plant (see example)
Fixed assets are treated as noncurrent assets from an accounting standpoint, which means that they
will not be consumed in the first year.

Capital expenditures can include:
•Plant and equipment purchases
•Building expansion and improvements
•Hardware purchases, such as computers
•Vehicles to transport goods
The type of industry in which a company operates largely determines the nature of its capital
expenditures. The asset purchased can be a new item or something that improves the productive life
of a previously purchased asset
The capital expenditure is recorded as an asset on the balance sheet under the property, plant, and
equipment (PP&E) section. However, it's also recorded on the cash flow statement under investing
activities because it's a cash outlay for that accounting period.
Once the asset is being used, it is depreciated over time to spread the cost of the asset over its useful
life. In other words, each year, a portion of the fixed asset is being used up.
Depreciation represents the degree of wear and tear on a fixed asset; companies may deduct the
amount of depreciation on their annual tax return
Capital expenditures are often depreciated over 5 to 10 years,
but in the case of real estate, they may be depreciated over
more than two decades

Operating Expenses
Operating expenditures are the ordinary and necessary expenses (O&NE) that a company spends to
operate its business each day
Operating expenditures can include:
• Rent
• Utilities
• Salaries and pension plan contributions
• Any expense that falls under selling, general
• Administrative expense (SG&A) on the income statement
• Research and development (R&D)
• Property taxes
• Business travel
Because operating expenses make up the bulk of a company's ongoing costs, management typically
looks for ways to reduce its OPEX without causing a critical drop in quality or production output.
In contrast to CapEx, operating expenses are fully tax-deductible in the year they are made.
• An item that normally would classify as a capital expenditure may be considered an operating
expense if the company chooses to lease it instead of buying it.
• This can be an attractive accounting option if the company has limited cash flow and wants to be able
to deduct the total cost of an item in a tax year.

Key Differences vs. CapEx and OPEX
Funds that fall under capital expenditures are for major purchases that will be used in the future
The life of these purchases extends beyond the current accounting period in which they
were purchased. Because these costs can be recovered only over time through depreciation,
companies usually prepare a capital expense budget apart from OPEX
Operating expenses represent the day-to-day expenses necessary to run a business.
Because these are short-term costs that are used up in the same accounting period in which they
were purchased, it makes sense for them to have a separate budget
Zero-based budgeting (ZBB) is a methodology that helps align company spending with strategic
goals. Its approach requires organizations to build their annual budget from zero each year to help
verify that all components of the annual budget are cost-effective, relevant, and drive improved
savings.
Implemented effectively, ZBB is a cost discipline that can help businesses improve resource planning,
employee engagement, and organizational collaboration
Zero-based budgeting is a method of budgeting in which all expenses must be justified and approved
for each new period

Traditional budgeting calls for incremental increases over previous budgets, such as a 2% increase in
spending, as opposed to a justification of both old and new expenses, as called for with zero-based
budgeting
Traditional budgeting analyses only new expenditures, while ZBB starts from zero and calls for a
justification of old, recurring expenses in addition to new expenditures.
Zero-based budgeting aims to put the onus on managers to justify expenses, and aims to drive value
for an organization by optimizing costs and not just revenue

Budgeting is the tactical implementation of a business plan
To achieve the goals in a business’s strategic plan, we need some type of budget that finances the
business plan and sets measures and indicators of performance
We can then make changes along the way to ensure that we arrive at the desired goals

There are four dimensions to consider when translating high-level strategy, such as mission, vision,
and goals, into budgets.
Objectives are basically your goals, e.g., increasing the amount each customer spends
Then, you develop one or more strategies to achieve your goals
The company can increase customer spending by expanding product offerings, sourcing new
suppliers, promotion, etc.
You need to track and evaluate the effectiveness of the strategies, using relevant measures. For
example, you can measure the average spending per customer and average price changes as inputs.
Finally, you should set targets that you would like to reach by the end of a certain period. The targets
should be quantifiable and time-based, such as an increase in the volume of sales or an increase in
the number of products sold by a certain time
1. Aids in the planning of actual operations
2. Co-ordinates the activities of the organization
3. Communicating plans to various managers
4. Motivates managers to strive to achieve the budget goals
5. Control activities
6. Evaluate the performance of managers

Example of Project and Process Engineering Management ERP Maximo Overview
Maximo is an enterprise asset management and maintenance (EAM) software solution.
 a comprehensive solution for managing physical assets
 a single platform to monitor and manage tools, equipment and facilities
 enables visibility to information on all assets across the organization
 helps ensure equipment and facilities are available and utilized most effectively
 specifically used for maintenance and calibration at Cardinal Health
M1 M2 M3 M4 M5 M6 M7 M8 M9 M10
FY1x FY1xCAH FY
(IT) Application Deployment Gate
s
Requirements,
Planning &
Assessment
QA Testing
& Validation
Prod.
Migration
Configuration
Gate0
Gate3
Gate4
Confirm
Funding
Warranty
Period
Business Resources

There are six main management modules in Maximo
• Asset management: track assets and their location throughout the asset’s lifecycle
• Work management: manage work activities from start to finish
• Inventory management: Know the details of all inventory within the organization (numbers,
usage, etc.)
• Service management: monitor service level delivery and service level agreements
• Contract management: the process is tracked for leases, rentals, warranties, labor rates,
software, master, and user-defined contracts
• Procurement management: facilitates direct purchasing and inventory replenishment

Strategic goals:
 Transition maintenance & calibration functionality to Maximo
 Transition from paper based records to electronic records
 Provide ability to perform statistical analysis on maintenance, calibration, and spare parts tracking
 Ensure consistency across manufacturing sites
 Leverage existing Cordis technology
In Scope:
 Create site for Thailand within the existing Cordis Maximo platform
 Standard configuration for Asset Management
 Standard configuration for Preventative Maintenance (Production Machines & Facilities)
 Standard configuration for Calibration
 Data migration of viable data
 Validation of changes
 Purchasing licenses and additional disc space
Out of Scope:
 Integrations with other applications
 Customized coding or reports

Resources M1 M2 M3 M4 M5 M6 total Rate/per cost
PM 40 40 40 40 20 20 200 57 $11,400
SO 40 40 40 40 20 20 200 57 $11,400
BA 80 80 40 20 20 60 300 57 $17,100
Maximo developer 80 80 80 20 20 20 300 57 $17,100
Validator 1 0 0 80 160 160 80 480 57 $27,360
Validator 2 0 0 80 160 160 80 480 57 $27,360
# of users 10 $2,500 $25,000
# of PC's 0 $700 $0
# servers 0 $10,000 $0
Disc space 2 $2,000 $4,000
Weeks of travel 4 $10,000 $40,000
Sub $180,720
Risk $27,108 Original Est Disc + Licenses
Total $207,828 $197,478 $10,350
Thailand
Maximo as standalone. Buisness to input Machines and maintenance activities, execute validation scripts
EIT to provide project management and validation assistance
Risk Adjustment / Contingency @ 15%
Maximo licenses-assuming $2500per license
Assumes existing PC's will be used
Assumes cental app & DB servers leveraged
Assumes implementation is on current environment
Critical Success Factors/Measures of Success:
 Site Assessment and Gap Analysis Completed
 Successful Creation of site and migration of data to Maximo
 User Acceptance Testing Approved
 Validation in QA environment Approved
 Successful Implementation and approved validation in production

Risk / Unqualified Assumptions Risk Mitigation Risk Category Risk Level
Possible Schedule and Budget Impact due to 2 Maximo
projects running in parallel (Santa Clara, Thailand)
Develop Parallel Schedule with Mitigation Plans Schedule & Budget
Possible Schedule Impact due to IT & SQC Resource
Priority Conflict with Fortis Integration
Secure Dedicated Resources by Project Schedule
Issues Issue Resolution Impact Issue Level
MSA & SOW approval for integrator took longer than
expected
MSA has been signed as of 9/21, letter of intent was set to
vendor while SOWs are being finalized
Schedule
Assumptions Additional Comments Owner Status
No Historical Data is Required to be Migrated Project doesn’t Include Historical Data Migration.
85/15 % Out of the Box Maximo Deployment Project will not Exceeded the 15% Customization
Threshold

Topic Key Messages Audience Method Sender Timing
Desired
Outcomes
Feedback
Mechanism
Participants /
Comments
Steering
Committee
Meeting
Strategy alignment /
decisions
Steering Committee
Members, Project
Sponsor, Project
Manager
Meeting &
Bridge
Project
Manager
TBD Generalalignment Meeting notes
and follow-up
Attendees:
Project
Status
Report
(PSR)
Status ofproject Steering Committee
Members, Project
Sponsor, Project
Manager
Email Project
Manager
TBD Status Distribution List
Gate
Meetings
Seek approvalto proceed Steering Committee
Members, Project
Sponsor, Project
Manager
Meeting &
Bridge
Solution
Owner
TBD Approvalto
proceed
Meeting
notes, voting
buttons
Attendees:
Project Administration Communication Plan

Status Indicator Color Examples of Characteristics*
Green
Budget: Forecast is equal or under budget
Schedule: Incremental dates met and end date on target
Staff: All required resources identified and staffed
Scope: Features and Functions confirmed and placed in change Control
Risk: Possible risks identified with mitigation plans
Sponsor Engage: Sponsor participating and involved as needed
Business Value: Planning to meet expectations of the Business Case
Yellow
Budget: Cap or Exp Forecasted to be 101-104%
Schedule: Incremental milestones missed, but overall date unchanged
Staff: Resources missing, but not impacting deliverables
Scope: Potential for material changes
Risk: Medium impact to project possible & without a mitigation plan
Sponsor Engage: Sponsor involved, but not at the level required
Business Value: Potential impacts to the business case
Red
Budget: Cap or Exp Forecasted to be 105% or more, or funds exceeded
Schedule: Incremental milestones missed, and overall date has moved
Staff: Critical resources missing, & deliverables impacted
Scope: Requirements will not be met, or unapproved scope introduced
Risk: No response plans to identified risk, or plans are insufficient
Sponsor Engage: Sponsor not effectively involved, or missing
Business Value: Business case has been impacted; Action required

Agenda ERP Maximo software
Site Team
•Scope Definition Alignment
•Deliverables and Expectations
•Site Requests
•Master Data
•Site Equipment
•Work Orders (WO)
•Processes
•Opportunities
•Visual Aids
•Resource Availability
•Next Steps
•Q & A
Role Name Contact Mail
Project Manager
Solution Owner
Technical Lead
Business Sponsor
Business Technical Lead
Validation Lead
Software Quality & Compliance
Maintenance Engineer Manager
Facilities Manager
QRA/QRM/Calibration Manager
Warehouse/Spare Parts Manager
Local IT Manager

Scope Definition Alignment
IN SCOPE:
• Maintenance Ops / Facilities / Inventory
• Assessment / Data Mapping
• Create site for Thailand within the
existing Cordis Maximo platform
• Standard configuration for Asset
Management
• Standard configuration for Preventative
Maintenance (Production Machines &
Facilities)
• Standard configuration for Calibration
(tentative)
• Data migration of viable data
• Validation of changes
• Purchasing licenses and additional disc
space
• Training (1 week onsite)
OUT OF SCOPE:
• Integration with external systems
• Non-standard or non-regulatory
configurations
• Additional training beyond hyper care
• Extraction and cleaning of legacy data
• Decommissioning of legacy systems
• Local devices and hardware
• Local Network
(bandwidth/performance)
• Local compliance / documentation
update requirements
• Local UAT
• Customized coding or reports

Deliverables and Expectations
• Able to see the hierarchy based on building / systems / equipment
• Robust and simple training materials for the users in English and Thai
• Hierarchy Parent/Child
• Be able to attach documents and/or photos to work orders, spare parts, assets,
purchase requisitions
• Be able to create KPI, metrics and reports
• Disable privilege to modify fields based on security group
• Be able to manage inventory in Maximo
• Be able to issue items/spare parts
• Be able to issue all items on a work order at once
• Generate PM based on time frame (15 days or 30 days)
• Be able to use system to support predictive maintenance initiative
Oct Nov Dec Jan Feb March
Data gathering Testing Go-Live Hypercare
Project Lead 10% 20% 20% 20% 20% 10%
Facilities Maintenance 30% 50% 50% 25% 50% 15%
Manufacturing Maintenance 30% 50% 50% 25% 50% 15%
Calibration 20% 50% 50% 25% 50% 15%
Spare Parts 20% 20% 20% 25% 50% 15%
Process Mapping, Design and Doc Review
Team

Site Requests
• Inventory (Spare Parts) to be managed within Maximo
• Able to capture labor in work order
• Able to capture downtime work order
• Able to capture asset start up time in work order
• Able to use FIFO in spare parts
• Able to use lot number spare parts
• Able to upload pictures/BOM/specification for assets – spare parts
• Be able to assign criticality A, B, C
• Site would like to use current failure codes and add new ones
• Able to link spare part to assets
• Able to see spare parts usage based on time frame

Master Data
• Three major master data groups: Asset, PM Maintenance and Spare Parts
• Site uses paper based Maintenance System – independent by area / departments
• All information is captured on a hard copy form and routed for approval- Technician,
Maintenance Lead/Supervisor, Mfg Supervisor and/or Safety
• Some softcopy CM and EM are kept in excel spreadsheets
• New asset creation is assigned by area and sequential numbering
• New items (Spare Parts) currently created by finance
• Asset creation form not available for Facilities nor Production
• Asset creation form available for Calibration
• Spare Parts - Inventory data available in PRMS
• New Items (Spare Parts) uses nomenclature (valve – bearing, etc.) in the numbering
• Asset - Model number, serial number, vendor, cost & locations low % available
• Cycle count done on a daily basis

Site Equipment
• Total Equipment = 4,089
• Facilities - 1256
• Production Maintenance - 370
Dipping - 78
Mixing - 106
Chlorination - 129
Packaging - 57
• Calibration – 2463
• QA Labs – TBD
• Engineering Tools equipment's - TBD
Scheduled WO
• Total Scheduled PM = Total 32,071
• Facilities - 20990
Dipping - 1524
Mixing - 1272
Chlorination - 4592
Packaging - 708
• Calibration – 2985
• QA Labs – TBD
Note: All printed PM hard copies are filed in
a separate cabinet locations

Unscheduled WO
• Total Unscheduled = Total 1,601
• Facilities – 1208
Dipping - 136
Mixing - 0
Chlorination - 22
Packaging – 235
• Calibration – less than 10
• QA Labs – TBD
Note: All WO are hard copies and are filed
in separate a cabinet locations
Maintenance Process
PM Work – Production Maintenance: Mixing,
Dipping, Chlorination and Packaging
• PM projection
• Yearly generation PM Plan is fed into the
Manufacturing Master Plan
• Monthly PM forms are printed
• Daily meetings are held to identify the machine
stops and PM work is then assigned to
Technician / Crew
• Assigned PM forms work are taken from bin
• PM form complete during maintenance work
• PM form signed by technician and handed for
signatures to
• Maintenance Supervisor
• Safety
• Manufacturing supervisor
• PM completed form is filled

Production Unscheduled - Break Down
Work Order
• Equipment break down
• Operations issue Work Order to
engineering
• Immediate Action Plan
• Carry out the job
• Engineering Record in the work
order document
• Job Verification to be done by
Sr.Tech / Prod.Sup.
• Record in machine break down
report file
• Engineering keep work order in file
Production Unscheduled – General
Preventive Jobs Work Order
engineering
• Supervisor Engineering and Sup.(Rep)
Operation review and approved work
order
• Engineering Record in the work order
document
• Job Verification to be done by Sr.Tech
/ Prod.Sup.
• Record in machine break down report
file

Production Unscheduled – Abnormal
Failure Work Order
• Operations issue Work Order
to engineering
• Supervisor Engineering and
Sup.(Rep) Operation review
and approved work order
• Engineering Record in the
work order document
Sr.Tech / Prod.Sup.
report file
• Engineering keep work order in
file
Production Unscheduled – Any Modification
Jobs Work Order
engineering
• Sup. Engineering and Sup.(Rep)
Operation review and approved work
order
• Engineering Record in the work order
document
Sr.Tech / Prod.Sup.
• Record in machine break down report
file

Facilities Unscheduled - Break Down
Work Order
• Equipment break down
engineering
• Immediate Action Plan
• Engineering Record in the work
order document
Sr.Tech / Prod.Sup.
report file
Calibration Process
Cal PM Work
• Cal projection
• Yearly generation Cal PM Plans is fed into the
Manufacturing Master Plan
• Every 15 days PM forms are printed
• Daily meetings are held to identify the machine stops
and Cal PM work is then assigned to Technician
• Calibration Technician prints the Calibration form from
system
• Enter data needed to perform calibration (points,
tolerance, standard) from equipment binder –
Calibration Card
• Calibration Technician performs calibration with hard
copy
• Calibration Technician goes into excel spreadsheet to
populate the calibration results
• Calibration Technician prints the Calibration Certificate
• Calibration Technician signs Calibration Certificate
• Calibration Technician takes Calibration Certificate to
Calibration Supervisor for approval
• Calibration Technician then goes into Calibration
Manager to update next due date
• Calibration Technician files Calibration Certificate

Calibration Unscheduled
• Calibration notification form filled out by owner
• Form handed to Calibration Supervisor for
approval
• Calibration Supervisor assigns the work
Calibration Technician
• Calibration Technician prints the Calibration
from system
• Enter data needed to perform calibration
(points, tolerance, standard) from equipment
binder – Calibration Card
• Calibration Technician performs calibration with
hard copy
• Calibration Technician goes into excel
spreadsheet to populate the calibration results
• Calibration Technician prints the Calibration
Certificate
• Calibration Technician signs Calibration
Certificate
• Calibration Technician takes Calibration
Certificate to Calibration Supervisor for
approval
• Calibration Technician then goes into
Calibration Manager to update next due date
• Calibration Technician files Calibration
Certificate
MRO Purchasing
• Every Friday PRMS generates parts
that need reorder
• Parts are then submitted via email to
the area Supervisor for purchasing
approval
• Supervisor decides which parts to
purchase or not purchase
• Parts list approved for purchasing
sent to Purchasing department
• PO generated for parts purchase by
Purchasing department

Inventory Management
General Information
• Spare parts department performs cycle count (all items once a month)
• Cycle count 100% accurate
• Service level is not tracked
• Spare parts department performed TBD issue transactions
• Stocked parts have a value of approximately TDB
• Average of 15 new parts added on a Monthly basis
• Number of Stock items in SP warehouse 4663
Parts/Items Creation
• Parts list is request by owner by electronic form (finance)
• Finance verifies part does not already exist
• All new parts are passed to Purchasing for procurement
• Parts arrive and are physically received by logistics
• Parts are segregated by inspection and/or non inspection parts
• After inspection process is completed and approved the spare parts employees enter parts
into PRMS with location and Qty

Parts Receiving
• Parts order arrives at Warehouse
• Spare Parts physically received and
sorted into inspected and/or non
inspected by warehouse personnel
■ All parts barcoded
• Inspected parts are inspected by area
owner
• Spare Parts picked up by Spare Parts
personnel and transported to Spare
Parts warehouse
• Spare Parts personnel places part in
location and in updates PRMS system
with new Qty
Parts Issue
• For a Spare Part to be issued the
requestor needs to submit a request
for part via the PRMS – Spare parts
section
• Requestor goes to Spare Parts area
and picks up the part
Opportunities
• Calibration application integrated into
Maximo Paperless
• Immediate access to KPIs, Result sets
(appear on each User's Start Centres)
• Reduce the process time for inventory
analysis
• Able to monitor and report real time
maintenance cost based on labor,
Spare Parts usage and equipment
downtime
• Able to generate and assign Work
Order direct to supervisors or
technicians
• Able to create Root Cause analysis
based on Failure Codes (Problem,
Cause and Remedy)
• Able to eliminate a high percentage of
paper
• Implement Workflows to streamline
processes
• Implement forms to gather information
for Spare Parts and Assets
• Able to trend downtime by Asset /
System / Area
• Implement Mobile devices for
Calibration

Next Steps
• Final gap analysis
• Site and organization ID draft
documentation
• Data gathering
• Data clean up
• Data mapping
• Future state process design
Question & Answer
• Action Items
• Define Critical Success factors
• Any additional Assumptions
• Define missing Dependencies
• Any questions?

Project and Process Engineering Example
Goal: to increase the sales of PET preform and PET bottles
Objective: to increase the sales of PET preform and PET bottles by one million units per day
Strategy: to enter into the drinking water manufacturing business as the means to increase sales
Project: establish the starting feasible water drinking capacity at lower failure risk, either as a OEM or
as a water drinking brand owner with urban and national sales distribution
In this example, the analysis is done using 13 suppliers with different PET drinking water bottling
capacity per hr, per day, per month, per year
The engineering works includes, all materials usage and costing; however it does not includes costs
such as; inventories on hand, work in process inventories, finished good on hand and in transit
Finally, the 13 options are ranked according to its manufacturing contribution rate to sales; profitability
ranking; break even production ranking
It also shows several depreciation methods used in the analysis, such as the straight depreciation, the
discounted cash flow, NPV with double declining depreciation
The example also display the various layouts designed to calculate production and storage area
required; a per the different drinking water capacity proposed options; as well as the PET bottle top
load analysis, related to the preform making Mold cavities
What it is not shown here is a GANT project scheduling chart; it is assumed that you are already
familiar with it; either from Microsoft Project Management or any other software provided

PET bottle Blower
600 ml 1500 ml
Max 40,500/20,000 pph
Min 21,000/10,000 pph
Preform feeder hopper
Preform feeder
conveyor
Preform feeder
alignment accessories
PET bottle bridge
conveyor to feed bottle
sanitizer cleaner unit
40,500 pph
Rotary
bottle sanitizer cleaner
x 2 units
20,250 x 2 pph
Rotary bottle liquid filler
x 2 units
20,250 x 2 pph
Rotary bottle enclosure
capping unit
X 2 units
20,250 x 2 pph
Accumulating bottles
buffer conveyor system
40,500 pph
Capacity 25,000 bottles
5 x Pack wrapping and
shrinking units
40,500 pph
900/600ml packsph
723/1500ml packsph
Bottle labeling
X 2 units
20,250 x 2 pph
Packs palletizing unit
40,500 pph
15 pph/600ml
15 pph/1500ml
underground water
extraction system
1,350 m3/day
about 3-5 bht/m3
2-3 deep well
300 mts deep
sand and activated
carbon filters system
1,350 m3/day
soft water treatment
plant system
950 m3/day
soft water buffer
storage tank system
1,200 m3/day
ultra filtration, reverse
osmosis, activated
carbon filter system
650 m3/day
Drinking water storage
tank system
Q=flow 650 m3/day
UV light lamps system
Q=flow 650 m3/day
Recycled water
treatment plant system
750 m3/day
Waste water treatment
plant system
300 m3/day
warehouse storage
space for 7 days
maximum capacity
distribution transport for
full day production

New 616 Hero PET bottle Blower Project
Task Name
Update Blowing Machine Replacement
FAT – KM112 Machine Preform 13.5 g Switzerland
send preform to Italy for FAT new 616 Hero Blower
FAT - New 616 Hero Blower
Machine shipment
Customs clearance
Existing machine and Utility removal
New machine installation
Machine commissioning/Ramp up to Production
contingency extra time if required
Duration Start Finish Start Finish
w12 w12
3 days 30/4/2019 2/5/2019 w18 w18
43 days 15/5/2019 26/6/2019 w20 w26
3 days
1/7/2019 3/7/2019 w27 w27
43 days 15/7/2019 26/8/2019 w29 w35
4 days 27/8/2019 30/8/2019 w35 w35
6 days 26/8/2019 30/8/2019 w35 w35
10 days 2/9/2019 13/9/2019 w36 w37
10 days 16/9/2019 27/9/2019 w38 w39
5 days 30/9/2019 4/10/2019 w40 w40

PPT KM 112 Krauss Maffei Machine for
preform 13.5 g PET injection
machine arrives to PPT site
commissioning machine to full production
preform KM112 prototype EN1701 13.5 g test
with existing hero blower molds
individual 600 ml PET bottle per cavity
packed block stacking, travelling by delivery
truck and block stacking on the truck
replace existing 15.0 g preform with preform
EN1701 13.5 g after pass all test
preform KM112 - EN1701 13.5 g test with
existing hero blower molds
individual 600 ml PET bottle per cavity
packed block stacking, travelling by delivery
truck and block stacking on the truck
replace preform EN1701 13.5 g with KM112 -
EN1701 13.5 g after pass all test
4 day? 5/7/2019 10/7/2019 w27 w28
20 days 11/7/2019 7/8/2019 w28 w32
1 day 26/5/2019 26/5/2019
w21 w21
5 days 27/5/2019 31/5/2019
w22 w22
1 day 8/6/2019 8/6/2019
w23 w23
1 day 11/8/2019 11/8/2019
w32 w32
5 days 13/8/2019 16/8/2019
w33 w33
1 day 17/8/2019 17/8/2019
w33 w33

PET Preform 13.5 g
PET 600 ml bottle
TOP LOAD TEST
> 7.2 kg
cavity
top
load
a1 7.6
a2 7.78
a3 7.99
a4 7.49
a5 7.57
a6 7.49
a7 7.86
a8 7.7
a9 7.66
a10 7.75
a11 7.82
a12 7.52
a13 7.3
a14 7.58
a15 7.93
average 7.67
stdev 0.19
ratio % 2.5%
cavity top load
b1 7.96
b2 7.71
b3 7.51
b4
b5 7.79
b6 7.61
b7 7.62
b8 8.15
b9 7.82
b10
b11 7.93
b12 7.95
b13 7.55
b14 7.51
b15 7.86
b16 7.39
ave 7.74
stdev 0.22
ratio
% 2.8%

PET Preform 13.5 g
PET 600 ml bottle
TOP LOAD TEST
> 7.2 kg
cavity
top
load
a1 7.84
a2 7.62
a3 7.8
a4 7.85
a5 7.99
a6 7.54
a7 7.61
a8
a9 7.65
a10 7.97
a11 8.07
a12 7.5
a13 7.57
a14 7.87
a15 7.78
a16 7.59
ave 7.75
stdev 0.18
ratio % 2.3%
cavity
top
load
b1 7.76
b2 7.97
b3 7.94
b4 7.44
b5 7.54
b6 7.88
b7 7.73
b8 6.76
b9 7.88
b10
b11 7.66
b12 7.93
b13
b14 7.66
b15 8.09
b16 7.77
ave 7.72
stdev 0.33
ratio % 4.2%

12.00
6.00
3.00
5.00
4.004.004.00
1.40
1.80
EMPTY BOTTLES BOTTLES WITH WATER

60
24.00
12.0012.00
6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
2.00
Utilities
area
Warehouse area
FG
Loading
area
Materials
Downloading
area
6.00
Sand
filter
3.60
Activated
Carbon
filter
UF
RO
Activated
Carbon
filter
UVL
Drinking
water
2.00
2.00
Raw
water
bottle
labeling
3.50 4.00
2.00 2.00 1.50
6.00
3.00
3.002.005.00
11.003.00
2.00
3.00

60
24.00
12.0012.00
6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
2.00
Utilities
area
Warehouse area
FG
Loading
area
Materials
Downloading
area
6.00
Sand
filter
3.60
Activated
Carbon
filter
UF
RO
Activated
Carbon
filter
UVL
Drinking
water
2.00
2.00
Raw
water
bottle
labeling
3.50 4.00
2.00 2.00 1.50
6.00
3.00
3.002.502.50
10.003.00
2.00
3.00
3.00
3.50
9.00
5.00
2.00

60
24.00
12.0012.00
6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
bottle
blower
preform feeder
SACMI old hero
bottle
labeling
0.09
9.00
2.50
0.40
2.002.50
Utilities
area
Palletizing
area
Warehouse area
FG
Loading
area
Materials
Downloading
area
Accumulators {25,000)
bottles
Conveyors area
Shrinker film
wrapped packs
conveyor
1.50
6.00
Sand
filter
3.50
Activated
Carbon
filter
softened
RO
Activated
Carbon
filter
UVL
Drinking
water
2.00
40,500 PET bottles 600 ml/hr OD = 65.2 mm 2,640,600 mm/hr 44,010 mm/min 733.5 mm/sec travelling speed 44 mt/min
733.5 / 65.2 = 11.25 bottles/sec x 24 sec = 270 bottles / cycle or ((5x9)x3)x2 = 6 packs of 5x9 / pallet ledger level [326x587 mm]
40,500 / 60 = 675 bottles/min 5,000 / 675 = 7.4 min x 5 batch = 37.03 min / 5 batches cycle or 5,000 x 5 = 25,000 bottles 600 ml
7.4 min to empty and to fill up each accumulator conveyor
20,250 PET bottles 1,500 ml/hr OD = 86.1 mm 1,743,525 mm/hr 29,058 mm/min 484.0 mm/sec traveling speed 29 mt/min
484 / 86.1 = 5.6 bottles/sec x 30 = 168 bottles / cycle or ((4 x 7)x3)x2 = 6 packs of 4x7 / pallet ledger level [344x603 mm]
20,250 / 60 = 337.5 bottles/min 3,000 / 337.5 = 8.9 min x 5 batch = 44.5 min / 5 batches cycle or 3,000 x 5 = 15,000 bottles 1,500 ml
bottle
cleaner
bottle
filler
bottle
capping
bottle
labeling
2.50
12.20
11.00
16.00
3.00

60
24.00
12.0012.00
6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
bottle
blower
preform feeder
SACMI old hero
bottle
cleaner
bottle
filler
bottle
capping
bottle
labeling
0.099.00
2.50
0.40
2.002.50
Utilities
area
Palletizing
area
Warehouse area
FG
Loading
area
Materials
Downloading
area
Accumulators {25,000)
bottles
Conveyors area
Shrinker film
wrapped packs
conveyor
1.50
6.00
Sand
filter
3.50
Sand
filter
Activated
Carbon
filter
Activated
Carbon
filter
softened softened
Sand
filter
Activated
Carbon
filter
RO RO
Activated
Carbon
filter
Activated
Carbon
filter
UVL UVL
Drinking
water
Drinking
water
2.00
40,500 PET bottles 600 ml/hr OD = 65.2 mm 2,640,600 mm/hr 44,010 mm/min 733.5 mm/sec travelling speed 44 mt/min
733.5 / 65.2 = 11.25 bottles/sec x 24 sec = 270 bottles / cycle or ((5x9)x3)x2 = 6 packs of 5x9 / pallet ledger level [326x587 mm]
40,500 / 60 = 675 bottles/min 5,000 / 675 = 7.4 min x 5 batch = 37.03 min / 5 batches cycle or 5,000 x 5 = 25,000 bottles 600 ml
20,250 PET bottles 1,500 ml/hr OD = 86.1 mm 1,743,525 mm/hr 29,058 mm/min 484.0 mm/sec traveling speed 29 mt/min
484 / 86.1 = 5.6 bottles/sec x 30 = 168 bottles / cycle or ((4 x 7)x3)x2 = 6 packs of 4x7 / pallet ledger level [344x603 mm]
20,250 / 60 = 337.5 bottles/min 3,000 / 337.5 = 8.9 min x 5 batch = 44.5 min / 5 batches cycle or 3,000 x 5 = 15,000 bottles 1,500 ml
bottle
cleaner
bottle
filler
bottle
capping
bottle
labeling
2.50
12.20
10.00
16.00
Filling 40,500 x 0.600 = 24.3 m3/hr x 22 = 534.6 m3/day
Filling 20,250 x 1.500 = 30.375 m3/day x 22 = 668.3 m3/day

600x12 1500x6 600x12 1500x6
pack selling price bottle selling price
35 352.92 5.83
30 302.50 5.00
30 302.50 5.00
35 402.92 6.67
35 362.92 6.00
30 302.50 5.00
30 302.50 5.00
30 352.50 5.83
38 403.17 6.67
average 2.71 5.67
PET gr 1,000,000
resin gr 13.5
pcs
74,074
Bht 35,000
PET gr
1,000,000
Bht/pcs
0.47
Cost KM112 EUR 1,365,000
1.13
31.8 48,868,768
maintenance cost 5years 9% 21,990,946
Utilities
4,772,652
Utilities mainten 5years 9%
2,147,693
total cost 77,780,059
Capacity per hr 95% 49,746 20 7 50 348,220,600
5years 1,741,103,000
Bht preform
0.045
Cost Prewatcher III EUR 410,600
1.13
31.8 14,700,012
maintenance cost 5years 9%
6,615,005
total cost 21,315,017
Capacity pph 60,000
49,746
95% 5 1,741,103,000
Bht preforma
0.012
Exclude land, building
Bank loan interest
Business Tax, profit margin

214,097,719Bht pcs min
600ml PET 600 ml bottles
405lit/min drinking water
24,300 lit/hr drinking water
486,000 lit/day drinking water
1,069,200 lit/day input water softener
748,440 soft/day soft flash water 30%
486,486 RO/day RO flash water 35%
safety factor (S.F.) 1.4
681,080 lit RO water storage tank
320,760 lit/day soft flash water
154,097,719 261,954 lit/day RO flash water
582,714 lit/day water for recycle
233,086 lit/day water for waste 40%
349,628 lit/day recycled good water 33%
1,069,200 lit/day required raw water
719,572 lit/day underground water 67%
600ml 66mm
1500ml 86mm
50,000,000 40,500 PET / hr 675/min
0.07 hr conv/cap 2500
600 ml 1500 ml
37
29
10,000,000 9000
600 ml 1500 ml
136
104
bottles / acc conveyor
5,032.00
3016
18,645,630
installation
810,000
empty bpd
drink water
bpd
154,097,719 100%
810,000 - 810,000
92,458,631
60%
810,000 324,000 486,000
61,639,088
40%
810,000 486,000 324,000
30,819,544
20%
810,000 648,000 162,000
15,409,772
10%
810,000 729,000 81,000
filling equipment bht
60,000,000 100%
36,000,000
60%
24,000,000
40%
12,000,000
20%
6,000,000
10%
water processing bht bht/wb
drinking
waterbht
drink w
bp5year
214,097,719 100%
0.353
499,675,100
1,417,500,00
0
128,458,631 60%
0.353
299,805,060 850,500,000
85,639,088 40%
0.353
199,870,040 567,000,000
42,819,544 20%
0.353
99,935,020 283,500,000
21,409,772 10%
0.353
49,967,510 141,750,000
total drinking water bht
add 300 m deep water extraction quotation
quotations, scope of works,
estimated ฿150,000

810,000
pcs/day 750,600EU 35.80 SBF616
7days 26,872,452 Old Hero blower
50weeks 18,645,630 installation
5years 22% maintenance + OH
1,417,500,000
PET bottle 10,013,978 maintenance Bht
50,069,890 5years
1,069
m3 95,587,973 total cost
25bht/m3 0.087 bht/b 600ml blowing
26,730.0
bht/day 214,097,719 drinking water cost
22% maintenance + OH
0.033
bht/bottle H2O 47,101,498 maintenance Bht
5 years
285,577,381 maintenance Bht
499,675,100 cost in 5 years
0.353 b.tax bht/bottle
PET resin 13.5 g bht 0.473
KM112 preform 13.5 g bht 0.045
preform watcher 13.5 g bht 0.012
bottle blow 600 ml bht 0.087
0.616
raw water 600ml bht 0.033
drinking water 600 ml bht 0.353
0.386
Total estimated cost bht 1.002 0.16
1.162
MbhtCAP m3/day
1,069
Deep water ฿5.57 960 111%
maintenance 0.50148 9%
5 years ฿2.51 1,680,000
total cost ฿8.08 ฿4.81 ฿4.32
std public price ฿3.50 ฿7.82
600 ml 1500 ml
Land Transportation within 300 km ratio in 10 Wheel Truck 0.30 0.74
Land Transportation within 150 km ratio in 6 Wheel Truck 0.32 0.74
Land Transportation within 50 km ration in 4 Wheel Truck 0.53 1.32

BPH 600 ml LPH LPD 20 hr raw water 1500 ml LPH LPD 20 hr raw water
1,500 900 18,000 30,000 600 900 18,000 30,000
2,500 1,500 30,000 50,000 1,000 1,500 30,000 50,000
3,000 1,800 36,000 60,000 1,200 1,800 36,000 60,000
4,167 2,500 50,004 83,340 1,666 2,499 49,980 83,300
9,000 5,400 108,000 180,000 3,600 5,400 108,000 180,000
12,000 7,200 144,000 240,000 4,800 7,200 144,000 240,000
15,000 9,000 180,000 300,000 6,000 9,000 180,000 300,000
18,000 10,800 216,000 360,000 7,200 10,800 216,000 360,000
24,000 14,400 288,000 480,000 9,600 14,400 288,000 480,000
40,500 24,300 486,000 810,000 16,200 24,300 486,000 810,000

Supplier
BPM
BPH
BPD
estimated US$ installation shipping total US$
exch
rate
Bht Crown Eng boiler bht
raw water
m3
Zhangjiagang Benjamin
Machinery China PET 600 ml 25 1,500 30,000 $20,490 30% $3,700 $30,337 ฿32 ฿970,784 ฿819,880
฿380,000 ฿2,170,66418.0
Delmax Thailand 25 1,500 30,000 $125,000 30% $3,700 $166,200 ฿32 ฿5,318,400 ฿819,880
฿380,000 ฿6,518,28018.0
SUZHOU MING STAR
COMPANY CHINA PET 600 ml
to 1500 ml 41 2,500 50,000 $24,720 30% $3,700 $35,836 ฿32 ฿1,146,752 ฿1,339,760 ฿630,000 ฿3,116,51230.0
Delmax Thailand 50 3,000 60,000 $125,000 30% $3,700 $166,200 ฿32 ฿5,318,400 ฿3,864,815 ฿740,741 ฿9,923,95636.0
SUZHOU MING STAR
COMPANY CHINA PET 600 ml 69 4,167 83,333 $71,300 30% $3,700 $96,390 ฿32 ฿3,084,480 ฿5,276,444
฿1,022,22
2 ฿9,383,14750.0
Delmax Thailand 150 9,000 180,000 $296,875 30% $3,700 $389,638 ฿32 ฿12,468,400
฿11,294,44
4
฿2,222,22
2 ฿25,985,067108.0
Delmax Thailand 200 12,000 240,000 $359,375 30% $3,700 $470,888 ฿32 ฿15,068,400
฿15,009,25
9
฿2,962,96
3 ฿33,040,622144.0
Thai/China 200 12,000 240,000 $850,000 30% $3,700 $1,108,700 ฿32 ฿35,478,400
฿15,009,25
9
฿2,962,96
3 ฿53,450,622144.0
SUZHOU MING STAR
COMPANY CHINA PET 600 ml 250 15,000 300,000 $318,820 30% $3,700 $418,166 ฿32 ฿13,381,312
฿18,724,07
4
฿3,703,70
4 ฿35,809,090180.0
SUZHOU MING STAR
COMPANY CHINA PET 600 ml 300 18,000 360,000 $333,820 30% $3,700 $437,666 ฿32 ฿14,005,312
฿22,438,88
9 ฿4,444,444 ฿40,888,645216.0
Thai/China 300 18,000 360,000 $1,000,000 30% $3,700 $1,303,700 ฿32 ฿41,718,400
฿22,438,88
9
฿4,444,44
4 ฿68,601,733216.0
Delmax Thailand 400 24,000 480,000 $781,250 30% $3,700 $1,019,325 ฿32 ฿32,618,400
฿29,868,51
9
฿5,925,92
6 ฿68,412,844288.0
Multitech 600 ml 675 40,500 810,000 $3,701,426 0% $3,700 $4,815,554 ฿32 ฿154,097,719
฿50,150,00
0
฿10,000,0
00 ฿68,412,844486.0

underground APEX
Size of Plant bph bpd bpm bpy Equipment raw water drinking water investment
25 bottles/min; 1 packer x 3 shift BJM
1,500 30,000 840,000 10,080,000 970,784 5,646,385 1,199,880 7,817,049
25 bottles/min; 1 packer x 3 shift Delmax
1,500 30,000 840,000 10,080,000 5,318,400 5,646,385 1,199,880 12,164,665
42 bottles/min; 2 packer x 3 shifts CH1
2,500 50,000 1,400,000 16,800,000 1,146,752 5,646,385 1,969,760 8,762,897
50 bottles/min; 2 packer x 3 shift Delmax
3,000 60,000 1,680,000 20,160,000 5,318,400 5,646,385 4,605,556 15,570,341
69 bottles/min; 4 packer x 3 shifts CH1
4,167 83,333 2,333,324 27,999,888 3,084,480 5,646,385 6,298,667 15,029,532
150 bottles/min; 8 packers x 3 shits Delmax
9,000 180,000 5,040,000 60,480,000 12,468,400 5,646,385 13,516,667 31,631,452
200 bottles/min; 10 packers x 3 shits Delmax 12,000
240,000 6,720,000 80,640,000 15,068,400 5,646,385 17,972,222 38,687,007
200 bottles/min; 10 packers x 3 shits TH/CH 12,000
240,000 6,720,000 80,640,000 35,478,400 5,646,385 17,972,222 59,097,007
250 bottles/min; 12 packers x 3 shits CH1 15,000
300,000 8,400,000 100,800,000 13,381,312 5,646,385 22,427,778 41,455,475
300 bottles/min; 12 packers x 3 shits CH1 18,000
360,000 10,080,000 120,960,000 14,005,312 5,646,385 26,883,333 46,535,030
360,000 10,080,000 120,960,000 41,718,400 5,646,385 26,883,333 74,248,118
480,000 13,440,000 161,280,000 32,618,400 5,646,385 35,794,444 74,059,229
675 bottles/min; 12 packers x 3 shits SACMI/TH-CH 40,500
810,000 22,680,000 272,160,000 50,645,630 5,646,385 35,794,444 92,086,459

depreciation maint,bank annual annual annul annual 2.71 bht/bottle annual
gross
bpy 20% 9%+6% rent, utilities Fixed Cost Variable Cost Exworks cost bpy sales/year gross profit margin
10,080,000 1,563,410 1,172,557 230,400 2,966,367 12,419,990 15,386,357 10,080,000 28,486,111 13,099,754 46.0%
10,080,000 2,432,933 1,824,700 230,400 4,488,033 12,419,990 16,908,022 10,080,000 28,486,111 11,578,089 40.6%
16,800,000 1,752,579 1,314,435 384,000 3,451,014 20,935,183 24,386,196 16,800,000 47,476,852 23,090,655 48.6%
20,160,000 3,114,068 2,335,551 460,800 5,910,419 24,839,979 30,750,398 20,160,000 56,972,222 26,221,824 46.0%
27,999,888 3,005,906 2,254,430 639,996 5,900,332 35,362,241 41,262,573 27,999,888 79,127,770 37,865,197 47.9%
60,480,000 6,326,290 4,744,718 1,382,400 12,453,408 75,931,137 88,384,545 60,480,000 170,916,667 82,532,122 48.3%
80,640,000 7,737,401 5,803,051 1,843,200 15,383,653 100,771,116 116,154,769 80,640,000 227,888,889 111,734,120 49.0%
80,640,000 11,819,401 8,864,551 1,843,200 22,527,153 100,771,116 123,298,269 80,640,000 227,888,889 104,590,620 45.9%
100,800,000 8,291,095 6,218,321 2,304,000 16,813,416 125,611,095 142,424,511 100,800,000 284,861,111 142,436,600 50.0%
120,960,000 9,307,006 6,980,255 2,764,800 19,052,061 149,039,874 168,091,935 120,960,000 341,833,333 173,741,399 50.8%
120,960,000 14,849,624 11,137,218 2,764,800 28,751,641 149,039,874 177,791,516 120,960,000 341,833,333 164,041,818 48.0%
161,280,000 14,811,846 11,108,884 3,686,400 29,607,130 195,897,432 225,504,562 161,280,000 455,777,778 230,273,215 50.5%
272,160,000 18,417,292 13,812,969 6,220,800 38,451,061 324,755,717 363,206,778 272,160,000 769,125,000 405,918,222 52.8%

Production Line PET 600 ml
APEX
units/year
direct materials cost $/unit
direct labor cost $/unit
direct delivery cost $/unit
fixed overhead cost $/unit
manufacturing cost $/unit
selling price SP $/unit
profit (loss) $/unit
total variable cost TVC $/unit
contribution $/unit
CRS = (1 - TVC/SP) $/unit
CRS contribution rate to sales
profitability ranking $/unit
Break even production rate R
R = (Afge+Afme+Abd)/(Cs-Ctve)
Break even production ranking
1 2 3 4 5 6 7
7,817,049 12,164,665 8,762,897 15,570,341 15,029,532 31,631,452 38,687,007
10,080,000 10,080,000 16,800,000 20,160,000 27,999,888 60,480,000 80,640,000
1.1621 1.1621 1.1621 1.1621 1.1621 1.1621 1.1621
0.0700 0.0700 0.0840 0.0700 0.1008 0.0933 0.0875
0.3150 0.3150 0.3150 0.3150 0.3150 0.3150 0.3150
0.2943 0.4452 0.2054 0.2932 0.2107 0.2059 0.1908
1.8415 1.9924 1.7666 1.8404 1.7887 1.7764 1.7554
2.7130 2.7130 2.7130 2.7130 2.7130 2.7130 2.7130
0.87 0.72 0.95 0.87 0.92 0.94 0.96
1.5472 1.5472 1.5612 1.5472 1.5780 1.5705 1.5647
1.17 1.17 1.15 1.17 1.13 1.14 1.15
0.42971 0.42971 0.42455 0.42971 0.41836 0.42111 0.42326
3 3 3 3 5 6 5
1.5796 1.7091 1.5338 1.5786 1.5760 1.5549 1.5287
2 10 3 11 9 12 7

Production Line PET 600 ml
APEX
units/year
direct materials cost $/unit
direct labor cost $/unit
direct delivery cost $/unit
fixed overhead cost $/unit
manufacturing cost $/unit
selling price SP $/unit
profit (loss) $/unit
total variable cost TVC $/unit
contribution $/unit
CRS = (1 - TVC/SP) $/unit
CRS contribution rate to sales
profitability ranking $/unit
Break even production rate R
R = (Afge+Afme+Abd)/(Cs-Ctve)
Break even production ranking
8 9 10 11 12 13 Total $/year
59,097,007 41,455,475 46,535,030 74,248,118 74,059,229 92,086,459
80,640,000 100,800,000 120,960,000 120,960,000 161,280,000 272,160,000
1.1621 1.1621 1.1621 1.1621 1.1621 1.1621 1,258,645,943
0.0875 0.0840 0.0700 0.0700 0.0525 0.0311 69,148,800
0.3150 0.3150 0.3150 0.3150 0.3150 0.3150 341,193,269
0.2794 0.1668 0.1575 0.2377 0.1836 0.1413 205,755,688
1.8440 1.7280 1.7047 1.7849 1.7133 1.6496 1,874,743,700
2.7130 2.7130 2.7130 2.7130 2.7130 2.7130 2,938,247,104
0.87 0.98 1.01 0.93 1.00 1.06 1,063,503,404
1.5647 1.5612 1.5472 1.5472 1.5297 1.5083 1,668,988,012
1.15 1.15 1.17 1.17 1.18 1.20 1,269,259,091
0.42326 0.42455 0.42971 0.42971 0.43616 0.44404 0.43198
5 4 3 3 2 1
1.6059 1.5003 1.4623 1.5310 1.4479 1.3693
13 6 5 8 4 1

Straigh line depreciation for n periods n P And
P=F/(1+i)^n 0.4019 0 92,086,459
Pn 37,007,483 1 73,669,168 18,417,292
Fn 92,086,459 2 55,251,876 18,417,292
i 0.2 3 36,834,584 18,417,292
n 5 4 18,417,292 18,417,292
depreciation 18,417,292 5 - 18,417,292
6 (18,417,292) 18,417,292
7 (36,834,584) 18,417,292
Compound interest P = 37,007,483 8 (55,251,876) 18,417,292
F = P(1+i)^n F = 92,086,459 9 (73,669,168) 18,417,292
10 (92,086,459) 18,417,292
Simple interest
P = PF(1+ni) P = 184,172,919

revenue expenses cash in depreciation
taxable
income tax 0.5 net expences net cash flow discount factor discounted cash flow Net Present Value
- 0 - 0 - - 92,086,459 (92,086,459) 1.0000 (92,086,459) (92,086,459)
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.8333 128,262,976 36,176,516
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.6944 106,885,813 143,062,330
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.5787 89,071,511 232,133,841
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.4823 74,226,259 306,360,100
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.4019 61,855,216 368,215,316
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.3349 51,546,013 419,761,329
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.2791 42,955,011 462,716,340
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.2326 35,795,843 498,512,183
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.1938 29,829,869 528,342,051
738,360,000 448,946,150 289,413,850 18,417,292 270,996,558 135,498,279 - 153,915,571 0.1615 24,858,224 553,200,275

Discounted Cash Flow for n periods n P And
0 92,086,459
Pn 37,007,483 1 76,738,716 15,347,743
Fn 92,086,459 2 63,948,930 12,789,786
i 0.2 3 53,290,775 10,658,155
n 5 4 44,408,979 8,881,796
5 37,007,483 7,401,497
P=F/(1+i)^n 37,007,483 6 30,839,569 6,167,914
7 25,699,641 5,139,928
8 21,416,367 4,283,273
9 17,846,973 3,569,395
10 14,872,477 2,974,495
NPV net present
value 14,872,477
NPV = SUM(P=F/(1+i)^n) NPV 92,086,459

taxable
- 0 - - - - 92,086,459 (92,086,459) 1.0000 (92,086,459) (92,086,459)
738,360,000 448,946,150 289,413,850 15,347,743 274,066,107 137,033,053 - 152,380,797 0.8333 126,983,997 34,897,538
738,360,000 448,946,150 289,413,850 12,789,786 276,624,064 138,312,032 - 151,101,818 0.6944 104,931,818 139,829,356
738,360,000 448,946,150 289,413,850 10,658,155 278,755,695 139,377,848 - 150,036,003 0.5787 86,826,390 226,655,746
738,360,000 448,946,150 289,413,850 8,881,796 280,532,054 140,266,027 - 149,147,823 0.4823 71,926,998 298,582,744
738,360,000 448,946,150 289,413,850 7,401,497 282,012,354 141,006,177 - 148,407,673 0.4019 59,641,715 358,224,460
738,360,000 448,946,150 289,413,850 6,167,914 283,245,936 141,622,968 - 147,790,882 0.3349 49,494,867 407,719,327
738,360,000 448,946,150 289,413,850 5,139,928 284,273,922 142,136,961 - 147,276,889 0.2791 41,102,277 448,821,604
738,360,000 448,946,150 289,413,850 4,283,273 285,130,577 142,565,288 - 146,848,562 0.2326 34,152,282 482,973,886
738,360,000 448,946,150 289,413,850 3,569,395 285,844,456 142,922,228 - 146,491,622 0.1938 28,391,058 511,364,944
738,360,000 448,946,150 289,413,850 2,974,495 286,439,355 143,219,677 - 146,194,173 0.1615 23,611,175 534,976,119
14,872,477

s P Ads
NPV with double declining
depreciation 0 7,817,049
1 4,690,229.40 3,126,819.60
s = years 5 2 2,814,137.64 1,876,091.76
r = 2/s 0.4 3 1,688,482.58 1,125,655.06
Cfc = cash flow 7,817,049 4 1,013,089.55 675,393.03
Ps' = Cfc(1-r}^s' 7,817,049 5 607,853.73 405,235.82
P=F/(1+i)^n 3,141,497 6 364,712.24 243,141.49
Depreciation (i) 1/s 0.2 7 218,827.34 145,884.90
8 131,296.41 87,530.94
Ad1 = Po - P1 9 78,777.84 52,518.56
Ad2 = P1 - P2 10 47,266.71 31,511.14
47,266.71
NPV = SUM (Ads) NPV 7,817,049

taxable
- 0 - - - - 7,817,049 (7,817,049) 1.0000 (7,817,049) (7,817,049)
27,346,667 18,561,889 8,784,778 3,126,820 5,657,958 2,828,979 - 5,955,799 0.8333 4,963,166 (2,853,883)
27,346,667 18,561,889 8,784,778 1,876,092 6,908,686 3,454,343 - 5,330,435 0.6944 3,701,691 847,807
27,346,667 18,561,889 8,784,778 1,125,655 7,659,123 3,829,561 - 4,955,216 0.5787 2,867,602 3,715,409
27,346,667 18,561,889 8,784,778 675,393 8,109,385 4,054,692 - 4,730,085 0.4823 2,281,098 5,996,508
27,346,667 18,561,889 8,784,778 405,236 8,379,542 4,189,771 - 4,595,007 0.4019 1,846,630 7,843,138
27,346,667 18,561,889 8,784,778 243,141 8,541,636 4,270,818 - 4,513,960 0.3349 1,511,716 9,354,854
27,346,667 18,561,889 8,784,778 145,885 8,638,893 4,319,446 - 4,465,331 0.2791 1,246,192 10,601,046
27,346,667 18,561,889 8,784,778 87,531 8,697,247 4,348,623 - 4,436,154 0.2326 1,031,708 11,632,753
27,346,667 18,561,889 8,784,778 52,519 8,732,259 4,366,130 - 4,418,648 0.1938 856,364 12,489,117
27,346,667 18,561,889 8,784,778 31,511 8,753,267 4,376,633 - 4,408,144 0.1615 711,940 13,201,057

NPV with double declining
depreciation
s P Ads
0 92,086,459
s = years 5 1 55,251,876 36,834,583.78
r = 2/s 0.4 2 33,151,125 22,100,750.27
Cfc = cash flow 92,086,459 3 19,890,675 13,260,450.16
Ps' = Cfc(1-r}^s' 92,086,459 4 11,934,405 7,956,270.10
P=F/(1+i)^n 37,007,483 5 7,160,643 4,773,762.06
Depreciation (i) 1/s 0.2 6 4,296,386 2,864,257.23
7 2,577,832 1,718,554.34
Ad1 = Po - P1 8 1,546,699 1,031,132.60
Ad2 = P1 - P2 9 928,019 618,679.56
10 556,812 371,207.74
NPV = SUM (Ads) 556,811.61
NPV 92,086,459

taxable
- 0 - - - - 92,086,459 (92,086,459) 1.0000 (92,086,459) (92,086,459)
738,360,000 448,946,150 289,413,850 36,834,584 252,579,266 126,289,633 - 163,124,217 0.8333 135,936,847 43,850,388
738,360,000 448,946,150 289,413,850 22,100,750 267,313,100 133,656,550 - 155,757,300 0.6944 108,164,792 152,015,180
738,360,000 448,946,150 289,413,850 13,260,450 276,153,400 138,076,700 - 151,337,150 0.5787 87,579,369 239,594,549
738,360,000 448,946,150 289,413,850 7,956,270 281,457,580 140,728,790 - 148,685,060 0.4823 71,703,829 311,298,378
738,360,000 448,946,150 289,413,850 4,773,762 284,640,088 142,320,044 - 147,093,806 0.4019 59,113,702 370,412,080
738,360,000 448,946,150 289,413,850 2,864,257 286,549,593 143,274,796 - 146,139,054 0.3349 48,941,673 419,353,753
738,360,000 448,946,150 289,413,850 1,718,554 287,695,296 143,847,648 - 145,566,202 0.2791 40,624,855 459,978,609
738,360,000 448,946,150 289,413,850 1,031,133 288,382,717 144,191,359 - 145,222,491 0.2326 33,774,110 493,752,719
738,360,000 448,946,150 289,413,850 618,680 288,795,171 144,397,585 - 145,016,265 0.1938 28,105,124 521,857,842
738,360,000 448,946,150 289,413,850 371,208 289,042,642 144,521,321 - 144,892,529 0.1615 23,400,952 545,258,795

Thank You
L | C | LOGISTICS
PLANT MANUFACTURING AND BUILDING FACILITIES EQUIPMENT
Engineering-Book
ENGINEERING FUNDAMENTALS AND HOW IT WORKS
PROJECT AND PROCESS ENGINEERING MANAGEMENT

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