DEBRE BERHAN UNIVERSITY

INSTITUTE OFTECHNOLOGY
COLLEGE OF ENGINEERING
DEPARTMENT OF INDUSTRIAL
ENGINEERING
CASE COMPANY NAME
ETHIO ENGINEERING GROUP
Prepared by
1.Asnake teshome………………………………………1358/12
2.Natnael tadele………………………………………….1245/12
3.Amanuel gezaw………………………………………..1241/12
ACKNOWLEDGMENT

First of all, I would like to thank the almighty God forgive me the
strength to bring my longtime dream and effort in to reality.
Secondly, We would like to thank our MS Abraham W. whose
advice and guidance has helped shape the project.
Finally, we would like to express my genuine appreciation for the
workers and the managements of ethio engineering group, who
coordinated and helped us directly and indirectly during the
project works.
 Table of Contents
Chapter 1 Introduction and Background of the Company
Page
1.1 Introduction………………………………………………………1
1.2 Background……………………………………………………….2
1.3 Brief history of the company……………………………..4
1.4 Strategies that are followed by the company…….4
1.5 The main products and services…………………………5
1.6 Objective and current capabilities ethio engineering
group…………………………………………………………………6
1.7 Over all organization work flow and management
structures………………………………………………………….8
1.8 Production process of company………………………..11
1.9 The customer and competitor of company ……….12
Chapter 2 Maintenance engineering management
practices
2.1 Types of machinery and equipment safeguard and
tools used………………………………………………………………….13
2.2 machine operation (efficiency, energy and cost)….13
2.3 Maintenance management and control (company
practice)…………………………………………………………………….15
Chapter 3 Maintenance Cost Analysis
3.1 Maintenance Costing and Factors Influencing ……………..17
3.2 Maintenance Material Costing Estimation and
evaluation……………………………………………………………………………19
3.3 maintenance equipment cost estimation model …………..20
3.4 Failure rate, Reliability and Maintainability …………………21
Chapter 4 conclusion end recommendations
4.1 conclusions ………………………………………………………………….23
4.2 Recommendations ………………………………………………………24
 Chapter 1
Introduction and Background of the Company
1.1 introduction
Ethio engineering group inaugurated construction machinery
assembly and manufacturing factory at debre birhane town.
Industry general manager of ethio engineering group said that
at the inaugurated ceremony debre birhane construction
machinery industry is aimed at supporting the construction
sectors and also ethio engineering group has created job
opportunity i,e for thousands of people in debre birhan and is
going to save millions of foreign currency.
The industry is producing locality designed and manufactured
machinery supplied to mega projects including the Grand
Ethiopian renaissance dam and sugar factories and building
construction.
Ethio engineering group is construction engineering machinery
industry located at debre birhane is contributing its share in
stabilizing the market price for construction machinery through
supporting machinery at fair price and high quality.

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The main duty of this industry assembly of heavy machinery ,
maintains and remanufacturing of parts that has been damaged
the main source of heavy duty parts are importing from other
countries and buying damaged machinery from internal
company inside the country most of the workers found in this
industry from poly technical college and university of different
parts of the country.
1.2 background of the company
The infrastructure machinery engineering industry found in
Debre birhan. The construction machinery industry is one of the
most famous and hugs company .This company have a great role
for working heavy duty machinery with standard and modernize
specification of the parts of all heavy load machines and also
have some light vehicles that transport the workers of the
company. In the company there are 1200 workers. Under the
operation there are six factories. For each factories one team
leader and many labors (workers).
Those are in our hosting company generally due to the job
divided into two: 1. Assembly
2. Maintenance

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1. Assembly: In general vehicles in the company done workshop
A wheel assembly workshop
B chain assembly workshop and Engineering tools (e.g.
crane, surface rig, stone crasher etc.)
A. Workshop1 (wheel assembly shop): Assemblies excavator
(with wheel), grader and loader.
B. Workshope2 (chain assembly shop): assembly’s excavator and
dozer.
2. Maintenance: In maintenance the main one is re-
manufacturing workshop, and maintain every engine present in
the industry by using different machines such as lath machines,
vertical drill machines, plasma arc and Arc welding machines,
CNC machines.
Engineering tool: In these factory mainly assemble and maintain
excavator, grader, dozer, loader, roller, crane, fork lift, water drill
etc. In the manufacturing tool there is manufacturing of stone
crasher it produces 0, 1and 2 number sands, peach plant and
form work of scaffolding. Our hosting company working on;
Dozer ,Grader ,Excavator ,Crane, Loader ,Roller ,Fork Lift, Surface
rig, Stone crasher, Water drill , Asphalt fever, Asphalt distributer,
Dumper

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 1.3 Brief history of the company
By a letter issued from Ministry of Defense of the federal
democratic republic of Ethiopia on March 15, 2007G.C it was
decided that the industry shall be structured independently by
the name “DEFENCE INDUSTRY SECTOR” It had been leading
sixteen military Engineering complexes and development
enterprises. And after the decision of the federal democratic
republic of Ethiopian government, the ethio engineering group
has been established by the council of Ministers Regulation
No.183/2010, since June 09, 2010, and ethio engineering group
is changing the name from Metals and engineering corporation
(METEC) took over all responsibilities from defense industry
sector.
1.4 Strategies that are followed by the company
Jointly working with Domestic small and micro industry
enterprises,
Jointly working along with foreign partners,

Participating Educational and research institutes,

Direct foreign investment on prospective economic sectors,

Manufacturing fully accessible machineries`

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 1.5 The main products and services
Most of the products at construction machinery industry are
spare parts for industrial machine components with simple and
complex shapes. These machines are includes

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1.6 Objective

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 -In F.D.R.E metals and engineering corporation infrastructure
machinery engineering industry which is located at Debre Birhan
aimed at supporting the construction sector due to the following
parameters; the first one is to reduce foreign currency how to
reduce foreign currency in the previous years ethio engineering
group can have done the assembling process. All body parts can
be import from outside country and assemble the part each
other and selling for the customers ,but today ethio engineering
group can be manufacture some body parts like front frame
,cabin, pin ,main frame, etc and assemble together.
Current capabilities ethio engineering group
Designing of Machines and equipment’s.

Manufacturing of Deferent Military and Civilian Equipment’s.

Industrial designing, Manufacturing, erecting commissioning

and transferring
Conducting Research and development activities

Conducting engineering capacity building Training

To design, manufacture, erect and commission manufacturing

industries;
To engage in maintenance and overhauling of manufacturing
industries; 7
 To manufacture industrial machineries, capital goods and
industrial spare parts.
To expand and enhance engineering and technological
capabilities through crating partnership for the integration and
interfacing resources.
To undertake production, manufacturing maintenance,
overhauling and upgrading of weapons equipment and parts
useful to defense security forces for combat and war operations;
To sell its product of weapons equipment’s and parts to
domestic and overseas buyers in conformity with law

1.7 Over all organization work flow and Management

structures
F.D.R.E Metals & engineering corporation infrastructure
machinery engineering industry production is managed by a
General Manager accountable to the Ministry of National
Defense

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9
layout of workshop
Lathe
CNC Machine CNC Machine
Machine
Machine

Vertical drill
Door Machine

Bending
Mini vertical
Machine
drill Machine
Crane
machine
Hammer Plasma arc
Machine Machine

Road
Door

Circular Gas Oxy-acetylene

cutting Machine welding
Machine
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 1.8 Production process of ethio engineering group
The first step is inspection of row material and find the un
function part. Than the row material move to assembly
workshop. wheel assembly (workshop 1) or chain assembly
(workshop 2) based on the part of row material un function
when the row material un function the wheel part the row
material move workshop 1 or the row material not function
chain the row material move to workshop 2. The second step
working is pick out the not faction from material and move the
not function part material to maintenance (preparation)
workshop than maintain the not function by using different
machine ( Electric Arc welding machine, Oxy-acetylene welding
machine, Gas cutting Machine, Circular Gas cutting Machine,
vertical drill Machine, Mini vertical drill Machine , Lathe Machine
CNC Machine and etc).the 3rd step is maintain part move to the
assemble workshop and assemble the maintain part to the
machine than test the machine.

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 Flow process of production

1.9 The customer and competitor of ethio engineering

The customer of ethio engineering group are any group of
contraction the main are sunshine construction, sur
construction, Rama Construction and different construction
group. The competitor of ethio engineering group are the only
competitor in Ethiopia are Zama Ethiopia Trading plc .

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 Chapter 2
Maintenance engineering management practices
2.1 Types of machinery and equipment safeguard and tools used
In maintenance the main one is re-manufacturing workshop. In
the manufacturing the company used the following types
machines Electric Arc welding machine, Oxy-acetylene welding
machine, Gas cutting Machine, Circular Gas cutting Machine,
vertical drill Machine, Mini vertical drill Machine , Lathe Machine
CNC Machine plasma arc Machine ,Hammer machine ,Bending
machine and rolling machine .
The equipment safeguard and tools when used machines re
manufacturing Barrier guards, Safeguarding devices, safety
cloth and shoes, indicate hazard light, warning devices, Personal
protective equipment and etc.
2.2 machine operation (efficiency, energy and cost)
Machine efficiency: is the measuring of capacity of machine to
operation. The factors that affect efficiency are Manufacture and
quality of machine.
Machine operation energy is when the operation condition all
machine used one by one to operating or manufacturing of the
construction machine. The factors the type of machine used the
power.
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Machine operation cost is the cost of machine used to
manufacturing of construction machinery.
The following list the efficiency, energy and cost of the company
used to producing the machinery.

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 2.3 Maintenance management and control company practices
In ethio engineering group the management and control of
maintenance activities are equally to performing. Maintenance
system are input/output system. The inputs to the system are
manpower, failed equipment, material and spare parts, tools,
information polices and procedures. In over company
Maintenance management may be described as the function of
providing policy, guidance for maintenance activities, in addition
to exercising technical and management control of maintenance
programs.

Flow process of Maintenance system

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 ethio engineering group the Maintenance management and
control practices are providing training to the maintenance
department , Develop a schedule for maintaining machine,
Determine duration time of each job/task in machine, used
Preventive maintenance (PM) , Corrective maintenance and
Predictive maintenance.
M INTEN NCE
DE RTMENT

SU ER
ISOR

TE M E DER

ROU ROU ROU ROU

E DER E DER E DER E DER

M C INE M C INE M C INE M C INE

1 2 3 4

Maintenance management flow process

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 Chapter 3
Maintenance Cost Analysis
3.1 Maintenance Costing And Factors Influencing
3.1.1Maintenance Costing.
In Ethio engineering group Maintenance Costing are used 35
to 40 % in the total cost of company. The company Maintenance
Costing used the four(4) area : direct costs, lost production costs,
degradation costs, and standby costs.
Direct costs are associated with keeping the equipment
operable and include costs of periodic inspection and preventive
maintenance, repair cost, and servicing cost.
Number Direct cost Presently(%) In Number
1 Periodic inspection 5% 40,000,000
cost
2 Preventive 8% 64,000,000
maintenance
3 Repair cost 10% 80,000,000
4 servicing cost 5% 40,000,000

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 Lost production costs are associated with loss of production
due to primary equipment breakdown and unavailability of
standby equipment.
Number Lost
production Presently(%) In Number
costs
1 equipment 3% 24,000,000
breakdown
2 unavailability 3.5% 28,000,000
of standby
equipment

Degradation costs are associated with deterioration in the

equipment life due to unsatisfactory/inferior maintenance.
Number Degradation Presently(%) In Number
costs
1 inferior 2.5% 20,000,000
maintenance

Standby costs are associated with operating and maintaining

standby equipment.
Number Standby costs Presently(%) In Number
1 standby 2.6% 20,800,000
equipment

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3.1.2 Factors Influencing of Maintenance Costing
engineering group
Many factors influence maintenance costs ower company are a
operator expertise and experience, company policy, type of
service, skills of maintenance personnel, operational
environment, equipment specification, regulatory controls and
Improve productivity.
3.2 Maintenance Material Costing Estimation and evaluation
Maintenance Material Costing Estimation and evaluation is a
process of manager predict the amount of money they need to
fund to accomplished their project. Maintenance Material
Costing Estimation are the cost incurred to keep an item in good
condition or good working order.
The cost of maintenance materials the company is an important
component of the total maintenance cost that Costing
Estimation and evaluation by the Maintenance department.
Maintenance materials cost company are 40 to 50% of the total
maintenance cost.

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3.3 Maintenance equipment cost estimation model
The cost of maintenance equipment company can be estimated
using the following equation
CME = RDC + θ(UPC)
where
CME = maintenance equipment cost,
RDC = research and development cost associated with the
maintenance equipment,
θ = total number of maintenance equipment,
UPC = maintenance equipment unit procurement cost.
The ethio engineering group research and development cost
associated with the maintenance equipment(RDC) IS 5000br
and Total number of maintenance equipment (θ) are 300 and
maintenance equipment unit procurement cost(UPC) are 2000br
to determine the company CM E are
CME = RDC + θ(U C)
CME = 5,000br +300 (2,000br)
= 5000br+ 600000br
CME = 605000br
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 3.4 Failure rate ,Reliability and Maintainability
Failure rate :is the frequency with which an engineered system
or component fails, expressed in failures per unit of time. the
anticipated number of times that an item fails in a specified
period of time.
Failure rate in ower company Failure Cause as the following
Poor quality control, Inadequate materials,Incorrect use
procedures, Over-stressed parts,Incorrect installation or setup,
Poor manufacturing processes and Wrong handling or
packaging.

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Reliability: the probability that a product, system, or service will
perform its intended function for a specified period of time, or
will operate in a defined environment without failure.In ower
company measuring the Failure rate and Reliability are the
following in some machines
Lathe Machine the failure rate is 0.00004failures per hour and
reliability is 0.95 , CNC Machine failure rate is 0.00001failures
per hour and reliability is 0.99, Electric Arc welding machine the
failure rate is 0.00003failures per hour and reliability is 0.96,
plasma arc Machine the failure rate is 0.00004failures per hour
and reliability is 0.94 and vertical drill Machine the failure rate is
0.00002failures per hour and reliability is 0.95
Solution 1: f= f1+f2+f3+f4+f5
f= 0.00004+0.00001+0.00003+0.00004+0.00002
f= 0.00014 failures per hour
MTTF= 1/f= 1/0.00014= 7143 h
Solution 2: R= 1 –(1-R1)(1-R2)(1-R3)(1-R4)(1-R5)
R=1-(1-0.95)(1-0.99)(1-0.96)(1-0.94)(1-0.95)
R=1-(0.05)(0.01)(0.04)(0.06)(0.05)
R=0.999There is 99.9% chance that the machine
successfully operation.
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Maintainability: is the probability that a failed component or
system will be restored or repaired to a specified condition
within a specified period or time when maintenance is
performed in accordance with prescribed procedures. .ower
company thay are highly used and implement maintainability
because of the machinery are very high cost.
CHAPTER 4
Conclusion end Recommendations
4.1 Conclusions
Ethio engineering group company is construction machinery
assembly and manufacturing factory .the company establish
mian is help to construction sector and stabilizing the market
price at fair price and high quality.
The current ethio engineering group company not working fully
potential because of starting work short time a go and different
factors.The company maintenance department is help to
minimization cost related to maintaining machine by using
different method for example used bood practice preventive
maintenance to the machine corrective maintenance and by
different method. The wakens of company is the layout of the
product process and poor material handling. The company not
building the warehouse for the finished products.
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 4.2 Recommendations
Based on the visiting and conclusions drawn, the following
recommendations are forwarded to ethio engineering group
company
The company practice maintainability it help to decreasing
machine failures and refusing maintenance cost. Providing
training to the worker it help to the worker more efficiency us
the machines. Connection install with the customer and
company management, implement hygiene and safety
procedures ,Safeguarding devices and proved the material
handling system and building the warehouse the product.

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