379th PROJECT MANAGEMENT COMMITTEE MEETING

Held on: May 14, 2005

At: 1100 hrs

Venue: Conference Room

Attendance: Except GM Spinning, all members present, MD in chair.

AGENDA POINTS

SPINNINGKTMLSpinning Performance ReportMonth : May 2005

Period ----> Unit of RemarksMeasurment Desired

Desired Actual % Qty %

UtilizationInstalled Capacity - Spindle No 79,520 79,520

Shifts worked No 21 21 36 36 Utilization % 99.00 98.72 99.00 97.90

Working EfficiencyAverage Count No 52.55 51.67 Average OPS 2.82 2.78 2.86 2.78

Working Efficiency % 94.09 92.59 94.07 91.63

Raw Material IssuePak Ctn Kgs / % 59,231 38.30 106,484 38.38 Impt Ctn Kgs / % 69,656 45.04 126,379 45.55

PSF Kgs / % 25,763 16.66 44,584 16.07 Kgs / % 154,650 100.00 277,447 100.00

Yarn Production Kgs / % 130,946 84.67 224,520 80.92 Hard Waste Kgs / % 906 0.69 1,501 0.66 Yarn - B. Grade Kgs / % 634 0.48 1,089 0.48

May 01 to May 12Actual

Particulars

May 06 to May 12

Period: 06.05.2005 to 12.05.2005

Maintenance Spinning: Following intimated:Except one Orion – M all Auto Winder spindles are serviceable. M/s ACMA TEX dispatched Switcher Box which would be received by Monday.

Motor Tripping in Section IV; discussed. 30 KW Motor to replace 22 KW motor being used for 18000 RPM on 22 Count frames.

IT-OUTSOURCING

How to reduce searching cost Select a trust worthy

vendor. Vendor should be very

cooperative. Interviewing the vendor’s

previous & current clients.

IT-OUTSOURCING

How to reduce contracting cost Vague ideas from the contract

should be eliminated.

Contract should be flexible.

IT-OUTSOURCING

Necessary clauses in IT outsourcing contract

Evolution clauses apply both to the price and the technological flexibility as bench mark clauses.

Reversibility clauses are about either material reversibility or human reversibility.One gives the company the options to buy premises from the vendor and the other allows the company to hire employees from the vendors.

Hidden Cost #2Transitioning to the Vendor Elusive cost Transition time is(1 year) 70% was no longer than 10 months

IT-OUTSOURCING

IT-OUTSOURCING

Determining Transition CostTransition cost are elusive A company incurs as long as the vendor

has not completely taken over the internal IT department.

The time that internal employee spent helping the vendor transition

cost.

Cost that stem from disruption and from vendor's inability to react as quickly and appropriately as the internal department the beginning of the contract are transition costs.

Reducing transition Cost The first step in decreasing transition cost's

to be aware of it. Companies would be well advised to avoid

outsourcing activities that a idiosyncratic an to keep IT employees in house the company should know what it wants from the out source activity.Having experience with IT outsourcing

IT-OUTSOURCING

IT-OUTSOURCING

Cost#3 Managing the effort

This the largest category of the hidden cost

It covers three areas: Monitoring that IT vendors con fulfill there contractual obligations

IT-OUTSOURCING

Bargaining with IT vendors. Negotiating any needed contract changes.

Determining the cost of managing Vendor

Unlike out sourcing fees vendor management costs for IT outsourcing are not readily apparent.

Management costs purely internal companies don’t take management cost into account until they become visible so it create problem.

IT-OUTSOURCING

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

Less than$10 million

$10 millionto 100million

Greaterthan $100

million

IT-OUTSOURCING

IT-OUTSOURCING

Reducing the cost of managing vendor IT outsourcing experiences reduce the cost of managing the relationship the more the company the more a company deals with the IT vendor the faster it can judge the vendors performance.

Trust should be cultivated in the vendor relationship this will narrow the gaps between the both parties.

IT-OUTSOURCING

The fourth hidden cost comes from switching vendors or reintegrating IT activities internally:

Determine the cost of transition after outsourcing.

This involves finding the vendor, drafting a new contract and transitioning resources.

IT-OUTSOURCING

Reintegrated cost involves building a new internal activity from scratch.

Reducing the cost of transitioning after outsourcing

Awareness of outsourcing transition cost.

IT-OUTSOURCING

Presence of reversibility clauses in the contract.

Sufficient level of IT expertise inside the company.

Original idea to Outsource

Vendor search and contracting cost

Beginning of the IT outsourcing relationship

Initial transition cost

Cost of managing the IT-outsourcing effort

Change of IT vendor or reintegration of IT

Post IT out sourcing transition cost

Time

IT-OUTSOURCING

Steps to reduce the hidden costs The activities should not be critical or surrounded by uncertainty.

Companies should spend time in researching vendors.

The contracts should have clauses that specify technology evolution and reversibility

The relationship with the vendors should be the best in order to get desired performance.