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A
PRODUCT PROJECT REPORT
ON
BEARINGS
Prepared by
Kotadiya chirag j.
Class
T.Y. B.B.A.
Academic year
2009-10Roll no
33
Seat no
Collage
Shree gyanyagna collage of science of management, Rajkot
Submitted to
Saurastra University
Guided by
Prof. Namita talsaniya
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DECLARATION
I, undersigned KOTADIYA CHIRAG as a management student of T.Y. B.B.A.
declare that the product project report as per the saurastra universitys rules andregulation and syllabus of T.Y. B.B.A. which is prepared by me and with the valuable
guidance of prof. namita talsaniya.
The product project report on the BEARINGS is submitted to gyanyagna collage
of science and management, B.B.A. department, Rajkot.
This is my original work and not submitted to any other collage or university.
Date:-
Place: - Rajkot
Chirag kotadiya
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PREFACE
In todays life management is very much important. Management is the backbone
of any organization or any activity done. The real success of any management is lies inapplying the professional management in all managerial activities. As we move in to the
era of intense competition and high performance expectations. It is important that we
develop the winning edge.
Hence toattaion this objectives and to have the out look of all interactive of
corporate world. I have prepared the product project report on BEARINGS. I have tried
my best and have applied all my efforts, knowledge and sources available in this product
project report.
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ACKNOWLEDGEMENT
I am very much thankful to all those people who helped me in preparing the
product project report on BEARING.I am obliged to our project guide prof. namita talsaniya for giving the valuable
guidance in furnishing this project. I am also thank full to my all those friends and other
persons who directly or indirectly guide me to make my product project report more and
more improving.
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INDEX
Sr.no. Particulars Page no.
1 Introduction to smallscale industry
6
2 Project at a glance 7
3 Promoters back ground 8
4 Basis and presumption 10
5 Implementation schedule 11
6 Location justification 12
7 Product detail 13
8 Management sat up 14
9 Market analysis 15
10 Technical aspects 1611 Financial details 2112 Risk factor 37
13 Future plan 38
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1. INTRODUCTION TO SMALL SCALE INDUSTRY
An industrial unit whose capital investment in plant and machinery is up to 5
crores of rupees are known as the small scale industry. For the nits supplying the spareparts and other components to the medium and large scale industry. The limit is also
covers only investment in the plant and machinery. Land and factory building are
excluded because there are wide variations of land prices at different places.
Small scale industry is occupying an important place in the industrial development
of backward or less economies like India. Its important is given below.
The capital requirement to start the S.S.I. is lower in comparison of the medium
scale and large scale unit.
Less capital is requiring per unit of labor. Hence small scale units can generate
large volume of the employment.
Small scale industries utilize local materials and resources therefore it does not
require foreign exchange to import materials and resources.
It caters to local needs in a better way as per the local customs and traditions.
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2. PROJECT AT GLANCE
Units name: - Xtreme enterprise
Address for communication: - Q 35, G.I.D.C. metoda,
Kalawad road,
Ta. Lodhika,
Dist. Rajkot 360005
Type of unit: - partnership firm
Product: - Ball Bearings
S.S.I. registration no. : - has been applied forSubsidy registration no: - has been applied for
Bankers: - State bank of India
I.D.B.I.
Cost of project: - 49, 01,200
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3. PROMOTERS BACKGROUND
PARTNER 1
Name : - kotadiya chirag j.
Age :- 21 years
Education qualification: - B.B.A. with advanced marketing management
Address: - shree ram
Maruti Park 1,
B/h big bazaar,
150ft ring road,
Rajkot 360005.
Work division: - administration, accounting, marketing & selling
Capital contribution: - 25%
Share in profit and loss: - 50%
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PARTNER - 2
Name: - dobariya kirit m.
Age: - 21 years
Education qualification: - B.E. (mechanical)
Address: - 402, mangal bhuvan appt.
Kalawad road,
Rajkot 360005.
Work division: - quality control, manufacturing management, material handling.
Capital contribution: - 25%
Share in profit and loss: - 50%
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4. BASIS AND PRESUMPTION Wages are to be paid on the basis of prevailing wage rate in market.
Interest rate on borrowed capital is on the basis of IDBI banks rate on 15 June
2009. Building is assumed on the basis of current rent prevailing in market on 15 June
2009.
The factory hours will be of 12 hours of a day.
25 working days in a month is assumed
280 working days in a year are assumed.
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5. IMPLEMANTATION SHEDULE
Particulars days
Selection of site 15 daysPreparation of project 45 days
Acquiring of land and building 30 days
Registration of SSI 30 days
Acquiring of finance 60 days
Arrangement of machinery & equipments 45 days
Installation of machines & electrification 60 daysRecruitment of personal & labor 45 days
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6. LOCATION JUSTIFICATION
The entrepreneur must select an ideal location n at the time of launching of the
enterprise. Location of the factory is an important factor affecting the businessorganization. An ideal means a scientific selection includes nature and type of the
business, opening advantage, economic factors and profit orientation.
The cost of the production and the cost of the distribution play an important role in the
profit maximization. Even if with the adequate capital on hand, if the location is
unfavorable, will affect are profitability which may sometimes results into the closed
down of the unit.
It is preferable to start in Rajkot due to several factors that are as under:
The essential raw material require for the manufacturing of bearing like inner,outer, races, rollers, cages, washers etc. are easily available within the city itself.
There is labor available at cheap price and available at cheap price and all
technical staff can be acquired from Rajkot also.
Electricity, banking, water, and internet services are available in the city.
The other major factor is that there is big market is available for bearing within the
Rajkot i.e. local market itself is wide.
For ex, oil engines industries existing in Rajkot and bearing are use in its
manufacturing.
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7. PRODUCT DETAILS
Bearing is a mechanical element that permits relative motion between two parts,
such as the shaft and the housing, with minimum friction. The function of bearing is as
under.
The bearing ensures free rotation of the shaft or the axle with minimum friction
Bearing supports the shaft or the axle and holds it in correct position
The bearing takes up the forces that act on the shaft or the axle and transmits them
to the foundation.
So, bearing is a vital component in any rotation mechanism of machinery.
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8. MANAGEMENT SETUP
The two partners are entitled to take the post of directors their names are
Mr. kotadiya chirag j. Mr. Dobariya kirit m.
The capital ratio of both partners will be 50 : 50 and profit and loss will beshared as per capital sharing ratio.
Mr. chirag kotadiya will look after the marketing and trade setting andadministrative and accounting work as he is qualifying in B.B.A.
Mr. kitit dobariya will look after the production management, quality
control and technical matter of factory and material management.
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9. MARKET ANALYSIS
A) HISTORY
In India bearing industry can be traced to a little over 50 years. The firstunit to commercial production was national bearing co. ltd., Jaipur. Some smallscale units in panjab and some other places also manufacturing bearings. Bearingsindustry developed tremendously in small scale sector during the late eighties and beginnings of nineties has mostly developed in Gujarat state and that tooparticularly in saurastra region.
The raw material used for manufacturing bearing are produced fromMahindra and Mahindra, Bihar alloys, special sheets etc.
As against global range 1, 50,000 different types of bearings are used inIndia. The indigenous production of bearing is limited to about 700 types.
B) CURRENT MARKET POSSITION
The current market position of Indian bearing industry is worth rs. 3500crore. 45% of the market segment is covered by automotive segment andremaining 55% of the market segment is covered by industrial demand. Inautomotive segment 50% of market is organized segment manufacturers 15% areunorganized segment in India and remaining 35% of demand is satisfied byimport.
C) FUTURE MARKET POSSITION
Out of the total revenues in the automotive segment, 60% of the revenuesare contributes by original equipment manufacturers and the remaining 40% is bythe demand from the after market. There has been a growth of 15% in the aftermarket segment and OEMs demand has increased by more then 25%
The market for automotive bearing is growing at almost 27% per annum.This is mainly because of multiple models in every vehicles segment entering themarket.
Hence, a definite increase in the original equipment segment is antiseptic.After market demand for automotive bearing is increasing, but at a slower rate as
compared to the growth in vehicles population manufacturers are expectingsustained growth of 15% in the after market mainly due to increase in populationof two wheelers, passengers cars and utility vehicles segment.
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10.TECHNICAL ASPECTS
A) MANUFACTURING PROCESS.
Material for RacesRollers from mill.
Turning ofRaces
Heat Treatment
Grinding
Super Finishing ofRaces + Rollers
100% Noise testing before dispatch+
Dust Proof Assay Line.+
Imported washing line
Distribution
There are four major parts to a standard ball bearing: the outer race, the rolling balls, the innerrace, and the cage.
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Races
Both races are made in almost the same way. Since they are both rings of steel, the
process starts with steel tubing of an appropriate size. Automatic machines similar tolathes use cutting tools to cut the basic shape of the race, leaving all of the dimensionsslightly too large. The reason for leaving them too large is that the races must be heat
treated before being finished, and the steel usually warps during this process. They can bemachined back to their finished size after heat treating.
The rough cut races are put into a heat treating furnace at about 1,550 degrees Fahrenheit
(843 degrees Celsius) for up to several hours (depending on the size of the parts), thendipped into an oil bath to cool them and make them very hard. This hardening also makesthem brittle, so the next step is to temper them. This is done by heating them in a secondoven to about 300 degrees Fahrenheit (148.8 degrees Celsius), and then letting them coolin air. This whole heat treatment process makes parts which are both hard and tough.
After the heat treatment process, the races are ready for finishing. However, the races are
now too hard to cut with cutting tools, so the rest of the work must be done with grindingwheels. These are a lot like what you would find in any shop for sharpening drill bits andtools, except that several different kinds and shapes are needed to finish the races. Almostevery place on the race is finished by grinding, which leaves a very smooth, accuratesurface. The surfaces where the bearing fits into the machine must be very round, and thesides must be flat. The surface that the balls roll on is ground first, and then lapped. Thismeans that a very fine abrasive slurry is used to polish the races for several hours to getalmost a mirror finish. At this point, the races are finished, and ready to be put togetherwith the balls.
Balls
The balls are a little more difficult to make, even though their shape is very simple.
Surprisingly, the balls start out as thick wire. This wire is fed from a roll into a machine
that cuts off a short piece, and then smashes both ends in toward the middle. This processis called cold heading. Its name comes from the fact that the wire is not heated beforebeing smashed, and that the original use for the process was to put the heads on nails(which is still how that is done). At any rate, the balls now look like the planet Saturn,with a ring around the middle called "flash."
The first machining process removes this flash. The ball bearings are put between the
faces of two cast iron disks, where they ride in grooves. The inside of the grooves arerough, which tears the flash off of the balls. One wheel rotates, while the other one staysstill. The stationary wheel has holes through it so that the balls can be fed into and takenout of the grooves. A special conveyor feeds balls into one hole, the balls rattle around thegroove, and then come out the other hole. They are then fed back into the conveyor for
many trips through the wheel grooves, until they have been cut down to being fairlyround, almost to the proper size, and the flash is completely gone. Once again, the ballsare left oversize so that they can be ground to their finished size after heat treatment. Theamount of steel left for finishing is not much; only about 8/1000 of an inch (.02centimeter), which is about as thick as two sheets of paper.
The heat treatment process for the balls is similar to that used for the races, since the kind
of steel is the same, and it is best to have all the parts wear at about the same rate. Likethe races, the balls become hard and tough after heat treating and tempering. After heat
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treatment, the balls are put back into a machine that works the same way as the flashremover, except that the wheels are grinding wheels instead of cutting wheels. Thesewheels grind the balls down so that they are round and within a few ten thousandths of aninch of their finished size.
After this, the balls are moved to a lapping machine, which has cast iron wheels and uses
the same abrasive lapping compound as is used on the races. Here, they will be lapped for8-10 hours, depending on how precise a bearing they are being made for. Once again, theresult is steel that is extremely smooth.
Cage
Steel cages are stamped out of fairly thin sheet metal, much like a cookie cutter, and then
bent to their final shape in a die. A die is made up of two pieces of steel that fit together,with a hole the shape of the finished part carved inside. When the cage is put in betweenand the die is closed, the cage is bent to the shape of the hole inside. The die is thenopened, and the finished part is taken out, ready to be assembled.
Plastic cages are usually made by a process called injection molding. In this process, a
hollow metal mold is filled by squirting melted plastic into it, and letting it harden. Themold is opened up, and the finished cage is taken out, ready for assembly.
Assembly
Now that all of the parts are made, the bearing needs to be put together. First, the inner
race is put inside the outer race, only off to one side as far as possible. This makes a spacebetween them on the opposite side large enough to insert balls between them. Therequired number of balls is put in, then the races are moved so that they are bothcentered, and the balls distributed evenly around the bearing. At this point, the cage isinstalled to hold the balls apart from each other. Plastic cages are usually just snapped in,while steel cages usually have to be put in and riveted together. Now that the bearing isassembled, it is coated with arust preventative and packaged for shipping.
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B) PRODUCTION CAPICITY
Name of the
product
Rate(rs) Daily
production(units)
Monthly
production
Production
par annum
units
Total
value(rs)
Ball bearing 110 380 9500 114000 1,25,40,000
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C) DETAILS OF RAW MATERIAL
PARTICULARS AMT (rs.)
Forgings( races )9500 sets @ 35
3,32,500
Rollers ( balls )
24000 pieces @ 10
2,40,000
Cages
19000 pieces @ 4
76,000
Total Raw material (p.m.) 6,48,500
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11.FINANCIAL DETAILS
A) LAND & BUILDING
As the financial capacity of partners are not enough to purchase the land &building. So, they will hire land and building on rent.
The details of land and building are as under.
1) Total area covered - 1000 sq. meter 2) Shade covered - 800 sq. meter
3) Open space - 200 sq meter 4) Monthly rent - 12,000 p.m.5) Total rent - 1, 44,000 p.m.
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B) MACHIMARY & EQUIPMENT
NAME OFMACHINE QUANTATY NO. HORCE POWER PRICE
Surface grinding
machine
1 10 h.p. 4,00,000
Center less grinding
machine
1 5 h.p. 4,00,000
Bore grinding
machine
1 3 h.p. 4,00,000
External grinding
machine
1 3 h.p. 4,50,000
Honing machine 1 2 h.p. 3,00,000Etching machine 1 1 h.p. 7,000
Belt grinding
machine
1 1 h.p. 5,000
Centrifugal
(cleaning machine)
1 1 h.p. 10,000
Lathe machine 1 2 h.p. 15,000
Drill machine 1 - 7,000
Bench machine 1 - 4,000
Hardness tester 1 - 10,000
Inspection, qualitycontrol equipment
gauges etc.
- - 2,00,000
Tools, spindles,
fixtures.
- - 50,000
Erection &
installation
- - 2,00,000
Furniture & office
equipments
- - 55,000
Total 25,13,000
Pro- operativeexpense
50,000
Total 25,63,000
Total investment in fixed assets
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Machinery and equipment 25, 63,000
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INVESTMENT IN SHORT TERM ASSETS
A) Cost of raw material (p.m.)
PARTICULARS AMT (rs.)
Forgings( races )
9500 sets @ 35
3,32,500
Rollers ( balls )
24000 pieces @ 10
2,40,000
Cages
19000 pieces @ 4
76,000
Total Raw material (p.m.) 6,48,500
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B) Salary and wages
Particulars Rate (p.m.) No. of persons Total salary
(p.m.)
Salary to partners 5,000 2 10,000
Supervisor 3,500 1 3,500Skilled workers 3,000 6 18,000
Unskilled workers 2,500 8 20,000
Total 51500
Prerequisitesof
salaries @ 10%
5,150
Total salary 5,6650
C) UTILITIES
Power consumption
4500 units p.m. @ 4.50 rs.
4000 4.5 = 20,250
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D) Other expanses
Particulars Rate (p.m.)
Rent 12000
Consumable like grinding wheel,kerosene, grease, cuttings oil etc.
10,000
Telephone exp. 1,500Repairs and maintenance 3,500
Advertisement & publicity 5,000
Packing and forwarding 9,000
Marketing and sales 3,500
Traveling & conveyance 4,500Transport of raw material 1,000
Insurance 1,500
Miscellaneous expanses 1,500Postage and stationary 1,000
Total 54,000
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E) TOTAL INVESTMENT IN WORKING CAPITAL
PARTICULARS AMT (RS)
Raw material 6,48,500
Salaries and wages 56,650Utilities 20,250
Other expenses 54,000
Total 7,80,400
Working capital for 3 months
7, 79,400 3 = 23,38,200
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TOTAL COST OF PROJECT
Particulars Amt (rs)Fixed cost 25,63,000
Working capital for 3 months 23,38,200
Total 4901200
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DETAILS OF MEANS OF FINANCE
Particulars Amt (rs.)
Owned capital
Partner 1 (25%) 12,25,300
Partner 2 (25%) 12,25,300Borrowed capital (50%) 24,50,600
Total 49,01,200
Interest on borrowed capital (21%) =5, 14,626 p.a.
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TOTAL COST OF PRODUCTION
A) RAW MATERIAL
PARTICULARS AMT (rs.)
Forgings( races )
9500 sets @ 35
3,32,500
Rollers ( balls )
24000 pieces @ 10
2,40,000
Cages
19000 pieces @ 4
76,000
Total Raw material (p.m.) 6,48,500
Total raw material (p.a.)6,48,500 12
7,78,2000
B) RENT & INSURANCE
Particulars Amt (rs.)
Rent 12,000
Insurance 1,500
Total (p.m.) 13,500Total (p.a.)
13,500 12
1,62,000
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C) Salary and wages
Particulars Rate (p.m.) No. of persons Total salary
(p.m.)
Salary to partners 5,000 2 10,000
Supervisor 3,500 1 3,500Skilled workers 3,000 6 18,000
Unskilled workers 2,500 8 20,000
Total 51500
Prerequisites of
salaries @ 10%
5,150
Total salary 56,650
Total (p.a.)
56,650 12
6,79,800
D) ADMINISTRATIVE EXPENCES
PARTICULARS AMT. (rs.) (p.m.)
Postage & stationary 1,000Telephone exp. 1,500
Travelling expenses 4,500
Miscellaneous exp. 1,500
Total exp (p.m.) 8,500
Total (p.a.)
8,500 12
1,02,000
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E) SELLING AND DISTRIBUTION
PARTICULARS AMT(rs.)Marketing and sales 3,500
Advertisement & publicity 5,000
Packing & forwarding 9,000
Total (p.m.) 17,500
Total (p.a.)
17,500 12
2,10,000
F) REPAIRS AND MAINTANANCE
Repairs and maintenance
3500 12 = 42,000 (p.a.)
G) CONSUMABLES
Gridding wheels, kerosene, grease, cutting oil, etc.
10,000 12 = 1, 20,000
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TOTAL COST OF PRODUCTION
PARTICULARS AMT (rs.) (p.a.)Raw material 77,82000
Rent & insurance 1,62,000Salary & wages 6,79,800
Administration exp. 1,02,000
Selling and distribution 2,10,000Repairs and maintenance 42,000
Consumable 1,20,000
Total cost (p.a.) 91,03,800
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COST OF RUNNING BUSINESS
Particular Amt (rs)Total cost of production 91,30,800
Interest on borrowed capital
24,50,600 21%
5,14,626
Depreciation on office equipment
55,000 20%
11,000
Depreciation on machinery &
equipment
19,98,000 10%
1,99,800
Depreciation on tools, fixtures,
measuring and testing equipment
4,60,000 20%
92,000
Total cost 99,21,226
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TURN OVER
Particulars Amt (rs.)
Yearly sales of 1, 14,000 pcs. @ 110 1,25,40,000
Yearly sales of scrap 1,50,000
Total turnover (p.a.) 1,26,90,000
NET PROFIT
PARTICUALRS AMT.
Sales 1,26,90,000
Less: cost of running business 99,21,226
Total 27,68,774Less: 35% tax 9,69,070
Net profit 17,99,704
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BREAK EVEN ANALYSIS
Particulars Amt(rs.)
Rent 1,44,000
depreciation on office equipment 11,000
Depreciation on machinery 1,99,800Depreciation on tools, fixtures, measuring
& testing equipment
92,000
40% of salaries& wages 2,71,92040% of other contingent exp. 4,98,000
Insurance 18,000
Total fixed cost 17,49,346
BREAK EVEN POINT =
Fixed cost 100
Fixed cost + net profit
17, 49,346= 100
17, 49,346 + 17,99,704
= 49.29%
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CALCULATION OF DIFFERENT RATIOS
NET PROFIT RATIO
Net profit= 100
Sales
17, 99,704= 100
1, 26, 90,000
= 14.18%
RATE OF RETURN
Net profit
= 100
Cost of production
17, 99,704
= 10049, 01,200
= 36.72 %
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12 RISK FACTOR
Due to improved technology, improved fuel quality and better maintenance of
vehicles it reduces replacement rate which turn in to slower growth in after marketsegment.
Vehicles owners prefer imported bearings due to lower costs. Cost different is
almost 50% between domestic bearing and imported from chinas bearings
The bearing industry also suffers from structural deficiencies, which are making it
less competitive in the global market
In this industry, there is preveling high competition in market. There are many
huge companies are involved in this business.
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13 FUTURE PLANS
The future plan of the company will be to become world class bearing and
auto parts manufacturing company.The company will expand its market up to international level