PROJECT APPRAISAL : TECHNICAL APPRAISAL

 

• PROJECT APPRAISAL
  
  
  TECHNICAL APPRAISAL
  PROJECT MANAGEMENT
  ENTREPRENEURSHIP
• DR. SHASHI AGGARWAL
• PROJECT APPRAISAL : TECHNICAL APPRAISAL
  PROJECT APPRAISAL

1. PROJECT APPRAISAL IS A PROCESS OF DETAILED EXAMINATION OF SEVERAL ASPECTS OF A GIVEN PROJECT BEFORE RECOMMENDING THE SAME
2. THE INSTITUTION THAT IS GOING TO FUND THE PROJECT HAS TO CHECK THE VIABILITY OF THE PROJECT. IT HAS TO ENSURE THAT THE INVESTMENT ON THE PROPOSED PROJECT WILL GENERATE SUFFICIENT RETURN ON THE INVESTMENT MADE AND THAT THE AMOUNT DISBURSED FOR THE IMPLEMENTATION OF PROJECT WILL BE RECOVERED ALONG WITH INTEREST WITH IN STIPULATED TIME
3. PURPOSE ORIENTED LENDING  CAN BE SUCCESSFUL IF THE DETAILED APPRAISAL OF THE PROJECT IS DONE BEFORE COMMITTING FUNDS ON THE PROJECT

• ASPECTS OF APPRAISAL
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• DEFINITION
• PRE INVESTMENT ANALYSIS OF A PROJECT WITH A VIEW TO DETERMINE THE OVERALL FEASIBILITY AND MEASURES ITS INVESTMENT WORTH WHICH PROVIDES A COMPREHENSIVE REVIEW/ASSESSMENT OF ALL ASPECTS OF PROJECTS THAT LAYS THE FOUNDATION FOR IMPLEMENTATION AND EVALUATION WHEN IT IS COMPLETED.
• PROJECT APPRAISAL CAN BE DEFINED AS THE PROMOTER TAKING A SECOND LOOK CRITICALLY AND CAREFULLY AT A PROJECT AS PRESENTED BY THE PROMOTER PERSON WHO IS IN NO WAY INVOLVED IN OR CONNECTED WITH THE PREPARATION AND WHO IS SUCH ABLE TO TAKE AN INDEPENDENT,DISPASSIONATE AND OBJECTIVE VIEW OF THE PROJECT IN ITS TOTALITY AS ALSO IN RESPECT OF VARIOUS COMPONENTS
• PROJECT APPRAISAL

1. UNDER TAKEN BY THE FINANCIAL INSTITUTIONS WITH THE TWIN OBJECTIVE OF
2. DETERMINING THE MARKET POTENTIAL OF  A PROJECT
3. SELECTING AN OPTIMAL STRATEGY
4. SCIENTIFIC TOOL AND FOLLOWS A SPECIFIC PATTERN
5. ANALYSIS OF REGION;S ECONOMY AND WHICH INDICATED GENERAL FRAMEWORK WHETHER THE PROJECT IS IN POTENTIAL ENVIRONMENT WHICH ENJOYS PRIORITY.

• STEPS

1. ECONOMIC : INDICATES PRIORITY USE
2. TECHNICAL : INVOLVES THE SCALE OF THE PROJECT AND PROCESS ADOPTED
3. ORGANIZATION SUITABILITY
4. MANAGERIAL ADEQUACY AND COMPETENCE CRITICALLY SCRUTINIZED
5. OPERATIONAL CAPABILITY OF THE PROJECT
6. FINANCIAL : FINANCIAL VIABILITY

• TECHNICAL APPRAISAL

1. SELECTION OF PROCESS/TECHNOLOGY
2. SCALE OF OPERATIONS
3. RAW MATERIALS
4. TECHNICAL KNOW HOW
5. COLLABORATION AGREEMENTS
6. PRODUCT MIX
7. SELECTION AND PROCUREMENT OF PLANT AND MACHINERY
8. LOCATION OF THE PROJECT
9. PROJECT SCHEDULING AND IMPLEMENTATION

• TECHNICAL APPRAISAL
• SELECTION OF PROCESS/TECHNOLOGY:

1. FOR MANUFACTURING A PRODUCT MORE THAN ONE PROCESS/TECHNOLOGY MAY BE AVAILABLE. CEMENT CAN BE MANUFACTURED EITHER BY WET PROCESS OR DRY PROCESS
2. THE CHOICE OF TECHNOLOGY DEPENDS UPON THE QUALITY AND QUANTITY OF THE PRODUCT. IF THE QUANTITY IS VERY LARGE MASS LEVEL PRODUCTION CAN BE DONE. IF THE QUALITY OF THE PRODUCT IS VERY HIGH SOPHISTICATED TECHNOLOGY IS REQUIRED
3. TECHNOLOGY CAN BE PURCHASED OUTRIGHT IF THE COST IS AFFORDABLE OR CAN BE OBTAINED EITHER THROUGH LICENSING ARRANGEMENT

• APPROPRIATE TECHNOLOGY: REFERS TO THAT TECHNOLOGY THAT IS SUITABLE FOR THE LOCAL ECONOMIC SOCIAL AND CULTURAL CONDITIONS. APPROPRIATE TECHNOLOGY MEANS WHAT KIND OF USE OF RAW MATERIAL ,WHAT KIND OF MANPOWER AND HOW THE TECHNOLOGY PROTECTS ECOLOGICAL BALANCE ETC
• SCALE OF OPERATIONS::- SIGNIFIES THE SIZE OF THE PLANT. THE PLANT SIZE DEPENDS ON THE MARKET FOR THE OUTPUT OF THE PROJECT. ECONOMIC SIZE OF THE PLANT FOR GIVEN PROJECT CAN BE ANALYZED BY OPERATING AND CAPITAL COST.OTHER FACTORS LIKE SPECIAL PROBLEMS OF FABRICATION OF EQUIPMENT,TRANSPORTATION AND ERECTIONS OF EQUIPMENT,PROBLEMS WITH THE AVAILABILITY OF PRODUCTION OF INPUTS
• RAW MATERIAL: A PRODUCT CAN BE MANUFACTURED USING ALTERNATIVE RAW MATERIALS AND  WITH ALTERNATIVE PROCESS. SINCE THE MACHINERY/EQUIPMENT TO BE USED DEPEND UPON RAW MATERIALS. FOR EXAMPLE PRECIPITATED CALCIUM CARBONATE CAN BE PRODUCED EITHER BY USING LIME STONE OR SHELL LIME. SHELL LIME WILL BE AVAILABLE NEAR SEA SHORE BUT LIME STORE WILL BE AVAILABLE  IN AREAS WITH LIME STONE DEPOSIT.
• TECHNICAL KNOW HOW:-WHEN TECHNICAL KNOW HOW FOR THE PROJECT IS PROVIDED BY EXPERTS CONSULTANTS  IT MUST BE ASCERTAINED WHETHER THE CONSULTANT HAS REQUISITE KNOWLEDGE AND EXPERIENCE AND WHETHER HE HAS ALREADY EXECUTED SIMILAR PROJECTS.NECESSARY AGREEMENT SHOULD BE EXECUTED BETWEEN THE PROJECT PROMOTER AND KNOW HOW SUPPLIER
• COLLABORATION AGREEMENTS

1. IF THE PROJECT PROMOTERS HAVE ENTERED INTO AGREEMENTS WITH FOREIGN COLLABORATORS,TERMS AND CONDITIONS OF THE AGREEMENT
2. COMPETENCY AND REPUTATION OF THE COLLABORATOR
3. IMPORTED TECHNOLOGY SHOULD SUIT INDIAN CONDITIONS
4. NECESSARY APPROVAL OF THE GOVERNMENT
5. AVAILABILITY OF THE DESIGN FOR FABRICATION
6. CLAUSE DEALING WITH DISPUTE
7. DOES NOT INFRINGE ANY COPY RIGHT ISSUE
8. BETTER TO HAVE BUY BACK ARRANGEMENT WITH THE COLLABORATOR

• PRODUCT MIX:-IN ORDER TO ENABLE THE PROJECT TO PRODUCE GOODS OF VARYING SIZE NATURE AND QUALITY AS PER THE REQUIREMENTS OF THE CUSTOMERS,THE PRODUCT FACILITIES SHOULD BE PLANNED WITH AN ELEMENT OF FLEXIBILITY. A COST BENEFIT ANALYSIS. FOR EXAMPLE A PLASTIC CONTAINER MANUFACTURING INDUSTRY CAN BE PLANNED TO HAVE MORE NUMBER OF DIES OF DIFFERENT SIZES. THERE SHOULD BE FLEXIBILITY
• SELECTION AND PROCUREMENT OF MACHINERY:-

1. THE MACHINERY AND EQUIPMENT REQUIRED FOR THE PROJECT DEPENDS UPON THE PROPOSED TECHNOLOGY PROPOSED TO BE ADOPTED AND THE SIZE OF THE PLANT PROPOSED. CAPACITY OF EACH MACHINERY IS TO BE DECIDED BY MAKING ROUGH ESTIMATE.APART FROM THE MAIN PROCESS OF MACHINERY,EQUIPMENT REQUIRED FOR THE SUPPLY OF UTILITIES,QUALITY CONTROL ,EFFLUENT DISPOSAL,MATERIAL HANDLING.
2. PROCUREMENT OF THE MACHINERY FROM THE RELIABLE SUPPLIER
3. ADEQUATE NUMBER OF TOOLS AND  SPARES PARTS
4. STAND BY ARRANGEMENTS
5. IN CASE OF SECOND HAND MACHINERY,WORKING CONDITIONS, ESTIMATED FUTURE LIFE

• PLANT LAYOUT:-THE EFFICIENCY OF MANUFACTURING OPERATION DEPENDS UPON THE LAYOUT OF THE PLANT AND MACHINERY.PLANT LAYOUT IS THE ARRANGEMENT OF THE VARIOUS PRODUCTION FACILITIES WITH IN THE PRODUCTION AREA. PLANT LAYOUT SHOULD BE SO ARRANGED THAT IT ENSURES STEADY FLOW OF PRODUCTION AND MINIMIZE THE OVER ALL COST.

1.     FUTURE EXPANSION CAN BE DONE WITHOUT MUCH ALTERATION

2.     FACILITATE EFFECTIVE SUPERVISION

3.     EQUIPMENT CAUSING POLLUTION SHOULD BE ARRANGED TO BE LOCATED AWAY FROM OTHER PLANTS

4.     ADEQUATE CLEARANCE BETWEEN ADJACENT MACHINERY AND BETWEEN THE WALL

5.     TECHNICAL APPRAISAL

6.     PROPER LIGHTING

7.     SMOOTH FLOW OF MEN AND MATERIALS FROM ONE STAGE TO ANOTHER

8.     MAXIMUM SAFETY

• LOCATION OF THE PROJECTS:-
• LOCATION WITH THE COUNTRY OR OUTSIDE THE COUNTRY
• REGIONAL FACTORS :

1. RAW MATERIAL
2. PROXIMITY TO MARKET
3. AVAILABILITY OF LABOUR
4. AVAILABILITY OF SUPPORTING INDUSTRIES
5. AVAILABILITY OF INFRASTRUCTURE FACILITIES

• REGIONAL FACTORS
• RAW MATERIALS :

1. NORMALLY CONSTITUTE 50 TO 60 PERCENT OF THE COST OF THE PRODUCT
2. COST OF RM SHOULD BE MINIMUM
3. TRANSPORTATION COST WILL BE REDUCED
4. SUGAR FACTORIES ARE LOCATED IN SUGAR CANE GROWING INDUSTRIES
5. BRICK AND TILE INDUSTRY WHICH IS ET UP ON THE LAND WHERE CLAY SUITABLE

• PROXIMITY TO MARKET

1. SPECIAL NATURE OF THE PRODUCT– TO REDUCE THE TRANSPORTATION COST IT SHOULD BE SITUATED NEAR THE MARKET
2. FINISHED PRODUCT MAY BE FRAGILE OR DIFFICULT TO HANDLE
3. GLASSWARE,,PERISHABLE PRODUCT
4. SOFT DRINK BOTTLING PLANT IS ANOTHER EXAMPLE FOR LOCATING THE PLANT NEAR TO THE MARKET

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• AVAILABILITY OF LABOUR : SKILLED LABOUR REQUIRED FOR RUNNING HOSIERY GARMENT MAKING FACTORY AVAILABLE IN PLENTY IN TIRUPUR 
• AVAILABILITY OF SUPPORTING INDUSTRIES : SUITABLE INDUSTRIES EXIST IN THE SURROUNDING AREA –IF THE FIRM HAS  PROPOSED TO GET SOMETHING OPERATION DONE FROM ONE SIDE
•  AVAILABILITY OF INFRASTRUCTURE :
• POWER : POWER INTENSIVE INSDUTRIES SHOULD BE LOCATED WHERE REGULAR POWER IS AVAILABLE
• WATER :WATER REQUIREMENTS FOR THE PROJECT SHOULD BE CORRECTLY ARRIVED AND CHECKED. THE LEVEL OF GROUND WATER
• TRANSPORT FACILITIES
• PROJECT SCHEDULING:-SCHEDULING IS NOTHING BUT THE ARRANGEMENT OF ACTIVITIES OF THE PROJECT IN THE ORDER OF TIME IN WHICH THEY ARE TO BE PERFORMED

1. LAND ACQUISITION
2. SITE DEVELOPMENT
3. PREPARING BUILDING PLANS,ESTIMATE DESIGNS,GETTING NECESSARY APPROVALS AND ASSIGNING WORK TO CONTRACTORS
4. CONSTRUCTION OF BUILDING,MACHINERY FOUNDATION AND OTHER RELATED CIVIL WORKS
5. PLACING ORDER OF THE MACHINERY
6. RECEIPT OF THE MACHINERY AT SITE
7. ERECTION OF MACHINERY
8. COMMISSIONING OF PLANT
9. LINK FOR WORKBREAKDOWN STRUCTURE
10.  https://www.gargshashi.com/2020/08/WORK-BREAKDOWN-STRUCTURE.html