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Technical Analysis of Projects

Technical analysis is concerned primarily with :

  • Materials and inputs
  • Production technology
  • Plant capacity
  • Location and site
  • Machinery and Equipment
  • Structures and civil works, project charts and layouts
  • Work schedule
An important aspect of technical analysis is concerned with defining the materials and inputs required,specifying their properties in some details and setting up their supply programmes. 

Materials may be classified into four broad categories:
  • Raw materials
  • Processed industrial materials and components
  • Auxiliary materials and factory supplies
  • Utilities
For manufacturing a product/service often two or more alternative technologies are available. The choice of technology is influenced by a vriety of considerations: plant capacity,principal inputs,investments outlay and production cost,use by other units,product mix,latest developments and ease of absorption.

The acquisition of technology from some other enterprise may be by way of :
  • Technology licensing
  • Outright purchase
  • Joint venture arrangement
Appropriate technology refers to those methods of production which are suitable to local economic , social and cultural conditions.

Several factors have a bearing on plant capacity decision:
  • Technological requirements
  • input constraints,
  • investment cost, 
  • market conditions
  • resources of the firm
  • governmental policy
The choice of location is influenced by a variety of considerations: 
Proximity to raw materials and markets,Availability of infrastructure facilities and other factors. Once abroad location is chosen, the attention needs to be focused on the selection of site- a specific piece of land where the project would be set up,.

The requirement of machinery and equipment is dependent on production technology and plant capacity. Further it is influenced by the type of product.

Structure and civil works may be divided into three categories:
  • Site preparation and development
  • Building and structures
  • Outdoor works
Once data is available on the principal dimensions of the project, project charts and layouts may be prepared. The important charts and layout drawings are:
  1. General functional layouts
  2. Material flow diagrams
  3. Production line diagrams
  4. Transport layouts
  5. utility consumption layouts
  6. Communication layouts
  7. Organisational layouts
  8. Plant layout
The work schedule reflects the plan of work concerning installation as well as initial operation.
 There are alternative ways of transforming and idea into a concrete project. These  alternatives may differ in one or more of the following aspects: nature of project, production process, quality of products, scale of operation and time phasing and location.
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