Technical Feasibility
When considering a new business, it is important to consider if there is sufficient access to resources. One of the primary reasons that new business fails is under-capitalization - not enough money to keep the business going from startup until it starts to make a profit. This can lead to a lack of resources. A business is considered technically and operationally feasible if it has the necessary expertise, infrastructure and capital to develop, install, operate and maintain the proposed system, and that by establishing such a system, the business will be able to deliver goods or services at a profit.
A large part of determining resources has to do with assessing technical feasibility. It considers the technical requirements of the proposed project. The technical requirements are then compared to the technical capability of the organization. The systems project is considered technically feasible if the internal
technical
capability
is
sufficient
to
support
the
project
requirements.
The analyst must find out whether current technical resources can be upgraded or added to in a manner that fulfills the request under consideration. This is where the expertise of system analysts is beneficial, beneficial, since using their own experience and their contact with vendors they will be able to answer the t he question of technical feasibility.
The essential questions that help in testing the operational feasibility of a system include the following:
Is the project feasible within the limits of current technology?
Does the technology exist at all?
Is it available within given resource constraints?
Is it a practical proposition?
Manpower- programmers, testers & debuggers
Software and hardware
Are the current technical resources sufficient for the new system?
Can they be upgraded to provide to provide the level of technology necessary for the new system?
Do we possess the necessary technical expertise, and is the schedule reasonable?
Can the technology be easily applied to current problems?
Does the technology have the capacity to handle the solution?
Do we currently possess the necessary technology?
What should be done? 1. Select
the product (s) &/or service (s)
the manufacturing/production process
the capacity & design
the supplies
the location
the lay out
the structures specifications
the raw materials & their sources
2. Determine
the quantity & quality of the product (s) & service (s) to be produced
the labor needed, both skilled & unskilled
the utilities required
the waste disposal method
the transportation necessary
3. Provide
estimates of the total project cost, & enumerate the major items of capital cost
4. List Down in Detail
the estimated production & over head costs that will go into operating the proposed project
5. Take into Consideration
the major technological development in the industry which may affect the commercial or technical soundness of the project
The technical study is presented by describing & making necessary calculations for the following:
1. Manufacturing Process
Manufacturing process refers to the description of the process and technology used indicating material equipment and energy requirements at each step. This must be described simply and clearly through a narrative, that is, in paragraph form and/or through flow charts, that is, by using a diagram. Manufacturing processes are applicable in all areas of our lives, so much that we often don't realize or think about it. From the cars we drive, the containers our food comes in, the TV's, computers and other devices we use, power tools, heaters, air conditioners, the pipes that deliver our water and the list goes on and on to include just about everything defining our modern society. These things are all manufactured or built from manufactured components. Manufacturing equipment itself must also be manufactured. The manufacturing process used is determined by a variety of factors. When different manufacturing processes and methods are considered, it is fundamental to develop an understanding of the relationship between the process used and the properties of the finished product. For this it is important to know what conditions a particular process will subject a material to and how different manufacturing materials respond to different conditions, (ie. stress, heat).
2. Machinery Requirements
This section of the technical feasibility presents the lists of machinery/equipment to be purchases with their corresponding prices. When buying the necessary equipment for the business you decided to put up, it is important to consider the machine design, specifications, rated capacity, spare parts, expected useful life, labor, power and water usage, overall plant capacity, costs of machinery and the arrangement for the possible supplier of the said equipment.
The following are some of the questions that may guide in deciding which machinery/equipment to buy:
What type of equipment and technology will the business need to produce its product/service?
What costs are involved to purchase and set up the equipment?
What are the costs involved in the ongoing running of the equipment?
3. Plant Capacity
Capacity is often defined as the c apability of an object, whether that is a m achine, work center or operator, to produce output for a specific time period, which can be an hour, a day, etc. Many companies ignore the measurement of c apacity, assuming that their facility has enough capacity, but that is often not the case. Increasingly software programs like enterprise resource planning (ERP) and warehouse management systems (WMS) calculate throughput based using formulas that are dependant on capacity.
Plant capacity is determined from the initial sales volume projecte d in the market capacity and maybe defined in two ways: (1) Feasible Normal Capacity – the capacity attainable under normal working conditions. This may be established on the basis of installed capacity, technical conditions of the plant, normal stoppages, downtime for maintenance and tool changes, holidays, and shift patterns; and (2) Normal Maximum Capacity – the capacity which is technically attainable and t his corresponds to the installed capacity guaranteed by the supplier of the plant.
4. Estimate of Total Cost
Total cost includes the cost for machinery requirements, probable supplier’s terms and conditions to
project cash flows.
5. Plant Location
A plant should be located at a place where inhabitants are interested in its success, the product can be sold profitably and production cost is at minimum. It is often result of compromise among conflicting social, economic and geographical conditions.
The principal factors to be considered are:
Location, With Respect To the Marketing Area. For Materials that are produced in bulk quantities such as cement, mineral acids and fertilizers, the plant should be located close to the primary market.
Raw Material Supply. The availability and price of suitable raw materials will often determine the site location. Plants producing bulk chemicals are best located close to the source of the major raw material.
Transport Facilities. The transport of materials and products to and from plant will be an overriding consideration. If practicable, a site should be selected that is close to at least two major forms of Transport: Road, Rail, W aterway or a Seaport.
Availability Of Labor. Labor will be needed for construction of the plant and its Operation. Skilled construction workers will usually be brought in. But there should be adequate pool of unskilled labor available locally.
Availability Of Utilities. The Word “Utilities” is now generally used for the ancillary
services needed in the operation of any production process. These services will normally be supplied from a central facility and will include electricity, steam, cooling water, water for general use, refrigeration, etc.
Environmental Impact, And Effluent Disposal. All industrial processes produce waste products, and full consideration must be given to the difficulties and coat of their disposal. The disposal of toxic and harmful effluents will be covered by local regulations, and the appropriate authorities must be consulted during the initial site survey to determine the standards that must be met.
Local Community Considerations. The plant must be acce ptable to local community such that it should not impose any additional risk to community t should be available for proposed plan and future expansions.
Climate. Adverse climatic conditions at site will increase costs. Abnormally low temperatures will require the provision of additional insulation and special heating for equipment and piping. Stronger locations will be needed at locations subject to high wind loads or earthquakes.
Political Strategic Considerations. Capital grants, tax concessions, and other inducements are often given by governments to direct new investments to preferred locations such as areas of high unemployment.
