L&C Division

13. 06. 22
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Liaison and Consultation offers the following service for the Industry

Cost reduction studyintermill survey of cost and profits book

Controlling the cost of production at optimum levels is one of the essential requirements for the mills to stay successfully in the competitive market. SITRA has reoriented its services towards helping mills to reduce cost without major investment. This study will cover the following areas:

  • Raw material cost : Yarn realisation and waste levels.

  • Measures to control different wastes at optimum levels.

  • Wages cost : existing labour and machine productivity and scope for improvement.

  • Other costs : stores, packing materials and administrative overheads.

  • Short-term and long-term measures to reduce the cost of production.


Diagnostic Study

This study is a comprehensive assessment of a spinning mill's working which would cover the following aspects:

  • The study would identify the areas for improvement along with suggestions, based on which mills could initiate suitable measures.Analysis of various components of cost (based on the profit and loss statements).

  • Labour and machine productivity.

  • Condition of machinery and modernisation requirement.

  • Yarn realisation and waste control

  • Stores consumption.

  • Packing materials cost.

  • Work methods, materials handling and housekeeping.

  • Training needs of workers.

  • Quality of out-going yarn.

  • Performance of various departments with regard to speeds, settings, in-process materials quality, end breaks, etc.

  • Machinery maintenance and quality control practices.

Machinery valuation

SITRA has been undertaking machinery valuation studies on behalf of mills as well as various financial institutions for more than 3 decades. The value of the machinery will be estimated by taking into account a number of factors including the present condition, probable life in a 3-shift working basis, existing level of modernisation and prevailing prices for new machinery of similar types. In other words, the estimated value will take into account not only the depreciation due to wear but also the appreciation in the value of machinery from time to time. The study would assess the values of plant and machinery, accessories, work shop equipment and electricals.


Modernisation of machines in spinning mills bookModernisation in spinning mills

Spinning mills catering largely to domestic markets are expected to invest amounts equal to 3% to 5% of sales turnover every year towards modernising their plant and machinery. On the other hand, the investment on modernisation for exporting mills must be at a higher level say 6% to 7% of sales per annum so as to keep their productivity, quality and level of technology on a   par with competing mills. However, while planning for modernisation, the mills must consider the following aspects: Level and pace of modernisation, allocation of priorities and return on investment.

The modernisation study, which would help mills to decide the right type of modernisation, would cover the following aspects:

  • Suitable modernisation scheme taking into consideration the condition of existing machinery, proposed product mix, availability of funds and return on investment.

  • Benefits derived due to modernisation.

  • Cost of production and profitability.


Optimisation of man-power 

Production pattern & product diversification in spinning mills book

Over the past 4 decades, SITRA has been helping mills to fix work assignments for operatives in various departments based on scientific assessment.  In the last 2 decades in particular, over 200 mills which included  a number of   hi-tech mills and  a few overseas mills, availed the above service. Work assignment studies jointly referred by both management and workers are also being taken up.

To enable mills to attend both labour and machine productivity together, presently SITRA has been offering a unique service package which would deal with the following aspects:

  • Prevailing labour and machine productivity in comparison with high productivity mills.

  • Scope for increasing the work assignments from mixing and blow room to packing including autowinders and TFO twisters.

  • Measures to improve machine productivity, ie production per spindle and spindle utilisation.

  • Achievable productivity levels for the proposed assignments.

  • Existing work methods of operatives, housekeeping and material handling. Training needs of operatives.


Project appraisal

SITRA has also been preparing appraisal reports for new proposals/capacity expansion projects.  The study would offer comments on the following aspects.

  • Land and building requirements

  • Machinery requirement and their cost.

  • Requirement of electricals, accessories, humidification plants, testing equipment etc.

  • Working capital.

  • Cost of production and profitability.


Techno-economic viability study

SITRA has been undertaking techno-economic viability studies for more than three decades. Many mills as well as various financial institutions have been utilising this service. The study would cover the following aspects: 

  • Analysis of various elements of cost (based on profit and loss statements) to identify the areas for improvement.

  • Analysis of various parameters affecting both technical and financial performance like labour and machine productivity, yarn realisation and wastes, commercial efficiency, condition of machinery and modernisation requirements.

  • Short-term and long-term measures for improving the performance and reducing the input costs.

  • Cost of production and profitability expected for the improved working.

Yarn costing 

Many mills are not using correct method of yarn costing. Most often this would lead to either over costing or under costing of some counts, thereby affecting the profit realization. In this consultancy assignment, after thoroughly studying a  mill’s existing method  of apportionment of various cost components  to different counts, suitable suggestions will be offered to correctly estimate count-wise yarn cost. 

Other studies

Various other consultation studies being undertaken are given below:

  • Yarn realisation and waste control.

  • Productivity improvement.

  • Staff requirement

  • Stores audit.

  • Materials handling.

Click here for details of SURVEYS conducted by the department