Page 33 - DMGT302_FUNDAMENTALS_OF_PROJECT_MANAGEMENT

Fundamentals of Project Management

Notes 2.6 Technical Analysis

For manufacturing a product/service often two or more alternative technologies are available.
For example:

1. Steel can be made either by the Bessemer process or the open hearth process.
2. Cement can be made either by the dry process or the wet process.
3. Soda can be made by the electrolysis method or the chemical method.
4. Paper, using bagasse as the raw material, can be manufactured by the Kraft process or the
soda process or the Simon Cusi process.
5. Vinyl chloride can be manufactured by using one of the following reactions: acetylene on
hydrochloric acid or ethylene on chlorine.
6. Soap can be manufactured by the semi-boiled process or the fully boiled process.

Choice of Technology

The choice of technology is influenced by a variety of considerations:

1. Plant Capacity: Often, there is a close relationship between plant capacity and production
technology. To meet a given capacity requirement perhaps only a certain production
technology may be viable.

2. Principal Inputs: The choice of technology depends on the principal inputs available for
the project. In some cases, the raw materials available influence the technology chosen.

Example: The quality of milestones determines whether the wet or dry process should
be used for a cement plant.
3. Investment Outlay and Production Cost: The effect of alternative technologies on
investment outlay and production cost over a period of time should be carefully assessed.
4. Use by Other Units: The technology adopted must be proven by successful use by other
units, preferably in India.
5. Product Mix: The technology chosen must be judged in terms of the total product mix
generated by it, including saleable by products.
6. Latest Developments: The technology adopted must be based on the latest developments
in order to ensure that the likelihood of technological obsolescence in the near future, at
least, is minimised.
7. Ease of Absorption: The ease with which a particular technology can be absorbed can
influence the choice of technology. Sometimes a high-level technology may be beyond
the absorptive capacity of a developing country which may lack trained personnel to
handle that technology.

Appropriateness of Technology

Appropriate technology refers to those methods of production which are suitable to local
economic, social, and cultural conditions. In recent years, the debate about appropriate technology
has been sparked off mainly by Schumacher and others. The advocates of appropriate technology
urge that the technology should be evaluated in terms of the following questions:
1. Whether the technology utilises local raw materials?

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