Tannery Operation
Tannery Operation
Tannery Operation
REQUIREMENTS
A LEATHER TANNERY
INTERNATIONAL COOPERATION
ADMINISlRAliON
Washington,
D. C.
REVISED
MAY 1959
FOREWORD
********
This manual is designed to provide a general picture of the
factors which must be considered in establishing and operating
a ~l-scale factory of this type. It should prove useful in
creating interest in the sUbJect, and serve to give enough
understanding of the related considerations to help government
officials, other leaders and businessmen to determine ~ether
the potential deserves more-detailed attention.
However, i t is important to note that in most cases plans ;for
the actual developnent and installation of a plant will require
expert engineering and financial advice in order to meet specific
local situations. For further information and assistance,
readers should contact their loc&J. Productivit;y Center, Industrial
Institute, Servicio, or Unitec states Operations Mission.
Mention of the name of any firm, product, or process in this
manual is not to be considered a reccmmendation or endorsement
by the International Cooperation Administration, but merely a
citation that is typical in its field.
********
The original report was prepared by the Wolf N:anagement
Engineeri~g Company, Chicago, Illinois.
Technical infonnation, as veIl as review, was provided by
R. Poliakof'f', Industrial Consultant, 126 Eleventh Avenue,
New York 11, New York.
********
This manual has been revised and rewritten by
George H. Andrews Engineering Associates, Inc.
4n Southern Building, \o1asbington 5, D. C.
April 1959
TABLE OF CONTENTS
Page
Introduction
General Assumptions
Histology of Hides
Manufacturing Process
Tanning Process
Plant Layout
13
Plant Site
13
Building
13
Power
13
Fuel
13
llater
13
14
15
Equipnent Requirements
16
17
Supplies
17
Depreciation
18
Direct labor
18
Indirect labor
20
Manufacturing Overhead
20
Manufacturing Cost
21
Working Capital
21
Fixed Assets
21
Capital ReqUirements
21
Sales Revenue
22
ff{~lf)
Page
Recapitulation of Costs, Sales and Profits
22
Budget Control
23
23
Purchase Requisition
24
Voucher Check
25
Engineers
26
Trairdng
27
Safety
28
Summary
29
29
Market Factors
29
Export Markets
30
Marketing Problems
30
Economic Factors
31
Persormel
31
31
Financial Factors
32
32
32
Financial Plan
32
Bibliography
33
Abbreviations
33
34
35
36
37
38
LEATHER
TANNERY
INTRODUCTION
Most tanneries in the United states perform two functions, namely,
processing the hide to pelts and tanning the pelts toth,rinished
product, leather. Tanning of leather can be accomplished by any of
the six well-known processes: v ~table, alum, chrcme, oil, formaldehyde, and sulphur. The two most widely used todB\Y are the vegetable
and the chrome.
Due "to the relatively large dE!l1and for upper shoe leather, this manual
will be developed on processing hides fram their raw state to finished
upper leather by using the two-bath chrcme tanning process. Themost
desirabieupper leather is secured fran light cattle hides which weigh
appr0ximateIy 54 pounds each. These hides are purchased by the pound,
the average cost being $0.13 per pound; the finished leather product
is sold on the square footage basis at approximately $0.35 per square
foot, or $0.298 per pound.
The tannery herein proposed will be capable of processing 16,000 pounds
of raw hides to yield 13,500 square feet of finished upper. leather per
eight-hour d~, utilizing about 56 workers, arid would be of minimumeconanic size. Annual cost of hides, 4,000,000 pounds, at $0.13 per
pound = $520,000.
GENERAL ASSUMPrIONS
1.
Costs are based on 1959 prices in the United state. Labor rates
are quoted from recent reports of the Bureau of Lab9r Statistics,
United States Department of tabor.
2.
3.
4.
5.
6.
~, five~s
per
7.
c.
D.
Land value
Distribution methods and selling costs
In-freight and out-freight
Taxes.
HISTOIOGY OF HIDES
A moist hide 'Which a.s been remo~,ed fran the animal's carcass is quickly
deccmposed by bacterial enzymes. If the hide is dried out, it will became extremely hard and practically useless. However, 'when properly
tanned, the hide is impervious to digestion by enzymes, is insoluble in
water s.nd may be given whatever degree of softness is d.eflired.
Hides varyconsid.erably, not only in size, thickness and +.exture, but
also in the character and appearance of the grain, the thickness of
the fibers and their resis~~ce to depilitants.
There are wide variations even among the hides and skine. of one species
of anim.a1. A sk:i.n, or hide, is affected by the breed and origin of the
animaJ.., its mode of life; food, general condition, age, and sex, and
the season of the yee:r when i't is slaugh'tered, as veIl as other variable
factors.
Cattle hides are by far the most important raw materials employed in the
production of industrial leatner. 'l'hey include those'of oxen, steers,
cows, heifers, kips and calves. A brief description of the hides considered for this study follows:
Oxen
These hides are the mos't valuable because of the close texture 'Which
resul'ts in a strong durable leather.
- 2 -
Steers
The hide of a steer is coarse in texture, bacUy wrinkled in the neck,
rather thin in the back, and coarse in the belly. They do not yield
as strong a leather as the hides of oxen.
Cows
These hides are invariably poor in quality, loose in texture, thin and
lacking in elasticity and strength. Elasticity is lost with age, and
the hides are very uneven in SUbstance, being thick in the back.
Heifers
These hides are not as strong as ox hides, but they possess the same
even texture and fine grain.
The largest source of supply of lightweight hides is India. Practically all Indian hides are "kips. tI Texture is very good, but they are
not as strong as ordinary cattle hides.
Calves
Calfskins or milk calfski.ns are available in most cattle producing
countries, but only a few are important. The skins are classified by
the feeding and age of the animals producing them . Skins of milk-fed
calves have an extraordinarily fine grain and an even texture. Skins
of claves fed on hay and cake are sanewhat coarser. Female calves
produce a much better skin than bull calves due to wrinkles and coarser
grain in the lat!;er.
- 3 -
Preparation for
T&~ing
The modern preparatory method of' processing hides for chrome t.anning
purposes is as follows:
1.
2.
3.
4.
5.
6.
1.
8.
9.
10.
Fleshing
Scudding
Rounding
Delilning
Bating
Drying
The most carmnon and practical method ut.ilized for drying hides is to
spread them on the ground under an open shed where they are protected
from the scorching rays of the sun. The flesh side of the hides should
be painted with a solution cont.aining an arsenic canpound to prot.ect
them from insect damage. Hides dried in this manner will soak back
fairly readily and are prot.ected against damage by insects and bact.eria.
This method is described as "Dried Arsenicated" or "Patent Cured."
- 4-
Soaking
The method used for soaking hides is dependent upon the manner in which
they were dried.
Fresh market hides merely require cleansing by placing them in a wash
drum. This drum is m.ade of cypress wood, has an outside diameter of
8 feet and a width of 5 feet 4 inches. It rotates at a speed of 17
revolutions per minute, and is equipped with a water pipe alloWin.g a
heavy flow of' water to pass over and through the hides 'While the drum
revolves. The inside of the drum is equipped with wooden pegs which
pick up the stock and allow it to drop back repeatedly while the drum
is revolving as shown on page 34. The stock is 'Washed until the outflowing water looks clear and no longer bloody and dirty. The time
usually required to reach this stage is five minutes.
After washing, the hides are immersed in a wood vat 10 feet long by 10
feet wide by 5 feet deep containing clear water; they are allowed to
remain completely immersed overnight. The next morning they are removed and stacked in a pile for the liming operation.
Dried hides are the most difficult to soak back.
Liming
The epidermis and adipose tissue must be removed frcmthe true hide before
it can be tanned. The removal of the epiderritis is by chemical action of
milk of lime. The hides which were thoroughly soaked in the previous
operation can now be immersed in the lime liquor contained in reels or
drums of cypress vTood. Each reel has a liqUid capacity of 900 gallons
and holds 300 dry hides. It has a paddle wheel which revolves and keeps
the hides in constant motion. Illustrated on page 34.
On alternate days, the hides are removed from the liquor and placed on
the edge of the reel; the liquor is then "plunged" to stir up the sediment of lime, and the hides are once again innnersed. Usually it reqUires
ten days of liming to destroy the epidermis. The hair is then quite
loose and can be pushed off.
Unhairing
At the end of the liming process, the hides are transportedby.forklift truck to the unbairing machines where the hair is canpletely
- 5 -
removeCL from the hides. 'rnese machines have revolving, blunt} spiralbladed cylinders and rubber rollers Which 'claw or grip the loose hair,
and also sqUeeze out excess liquid. Illustrated on page 35.
The hair drops to the floor from the machine, is swept up, cleaned,
dried and sold to carpet weavers, upholsterers, and cartridge manufacturers.
Fleshing
From the ~airing machines the hides are passed to the fleshing machine,
Which usually is installed alongside. As each hide is unhaired, it is
set on a sawhorse for the fleshing machine operator to pick up and feed
directly to the fleshing machine.
Fleshing a hide is the removal of the adipose tissue. The fleshing
machine is similar to the unhairing machine, but it has a sharp, spiralbladed cylinder instead of the blunt type, as shown on page 35.
Scudding
Following fleshing, some hides are lI scudded" to make the grain surface
clear and clean. Remaining hair, surface cells and dirt are scraped off
by a scudding machine Which has blades extending from a large revolVing
cylinder. The hide is placed, grain side up, on a bolster Which forces
the frain against moving blades. The sculded stock is then washed in
running water in an open-face revol7ing drum for 40 minutes. Illustrated
on page 35.
Rounding
As a result of the variation in the texture and substance in the hides,
it is necessary to cut the heavy limed hides irito shoulders, bellies and
butt. The butt is stouter and tougher than the rest of the hide; therefore, different parts require different treatment in their further preparation and tanning. This operation is performed on heavier cattle
hides only.
A process sufficient for stout butts would be too much 'for thin parts.
Therefore, it is camnon practice in tanneries to cut away thin portions
of the pelt fran the main part, or butt, of the pelt. This operation
is usually performed on a stout 4-foot by 8-foot wooden table.
- 6 -
Af~or
Deliming
The dehaired, f'leshed pelts consist of the true skin or dermis, .freed
!'rem all nonleather-f'onning tissues, but containing the liming chemicals. In consequence: they are swollen and plumped; therefore, the
chemicals must be removed fran the pelts, or at least from the grain,
if good color is to be ensured.
The extent to "Which limed pelts are delimed and the method used depends
very much on the type of' leather to be produced. Surfac,e deliming may
be brought about by a weak. solution of' acid --boric, hydrochloric,
lactic, sulphurous -- anu is usually done by suspending the hides in a
pit contai.ning the solution. Increased or f'ull deliming uses greater
quantities of acid.
Batin~
Bating is a modern process to loosen the "scud" and to remove all plumping. The synthetic bating solution is poured into the bating vats, and
the hides are immersed in the solution and kept mOVing by a revolving
paddle "Wheel. See page 36.
The liquor in the vat must be at 80 to 100 degrees Fahrenheit, depending
on the type of hide, the lower temperature being used on the more delicate
hides.
Bating is usually done wit!J. one-half' to one and one-half' percent of an
artif'icial bating product 'Which is a. mixture of' wood flour, ammonium
chloride and dried cattle pancreas. vlhichever treatment is applied, it
is continul1 until the scud is loose, and the -grain of pelts clean and
slippery and capable of' retaining the impress of' the thumb. The bated
hides are then rinsed in tepid water and are ready f'or chrane tannLYlg.
The operations from Soaking through Bating are performed in 'the beamhouse. As the hides complete the cycle of preparatory operations, they
are transported by fork-lift truck to the tannery for the operations
required for chrane tanning the hides to finished upper leather.
f
- 7 -
TANNING PROCESS
The two best methods for tanning leather are vegetable tanning and
chrome tanning. This study is concerned with the two"'bath method of
chrome tanning lightweight cattle hides for shoe uppers.
Chrome tanning is a more rapid and efficient process than vegetable
tanning. However, extreme caution must be exercised by the tanner
throughout the tanning process. The tan liquors must be modified so
that the tannins are not too readily fixed before they have an opportunity for canplete penetration. Therefore, it is essential that the
tannage be started with a weak solution and gradually increased in
strength arid astringency until the tannage is cnmplete.
The first chrome liquc!'s are prepared fran chrome a1.llII1. rater, a suitable chrametannlng liquor is obtained by dissolving sodium bichromate
and sulphuric a.cid in a sma.1.1 quantity of water and adding cane sugar
glucose
the solution.
to
Stock chrome liquor is then added every half hour, and with each addition, the chrome compound in the tan liquor is increased in basicity,
i. e ., astringency. The low basicity chrome salts insure good penetration and smooth grain. Fixation of chrome is increased with the increase
in astringency, so that, in the latter stages of tannage, production of
well tarmed upper leather is insured.
The operations required. to produce fi.nished upper leather are as follows:
1.
2.
3
4.
,..
/.
First Tanning
Wringing and Stretching
Second Tanning
Stamping and Sorting
Splitting
6. Shavin...~
7. Dyeing &.l.::l J'atliquoring
8. Oiling Off
9 Drying
10.
11.
12.
13
14.
15.
16.
17
Samming
Staking
Buffing
Seasoning
Glazing
Ironing
Measuring
Grading and
Sorting
- 8 -
however, the drums must not be revolved too rapidly or the leather will
spoil. The strength of the tan liquor can be maintained or graduaJ.ly
strengthened according to standard process.
The average time for the first tanning process gene::caJ..ly takes fran
four to five hours.
Second Tanning
From the setting-out machines, the hides are gathered and placed in
tanning reels, which are the same type as those used for the first.. tan...
ning process. The process of second tanning follo'Ws the same process
as first tanning. However, the second tanning changes the ccmbinations
of the acids and proteins fonn.ed in the first tanning. In other 'Words)
it nfixes" it, stopping the chemical action set up in the first tanning.
This operation completes the actual kiquid tanning process.
- 9 -
Splittfng
The purpose of splitting is to produce leather of unifonnthi.ckness.
The splitting operation divides the stock into two or more la\}'ers and
is necessary only for heavier hides. Splitting the hides is done on
a splitting machine which has a flexible, endless knife which revolves
between two pulleys. A series of rollers direct the stock through the
machine so that the knife cuts the hide into two la\}'ers. The layer
with the grain surface produces a fine leather. See illustration on
page 37.
The other layer.. or "split, II is used for leather of medium quality.
The grain of calfskins mw{es the finest shoe uypers; the grain of cattle
hides is a scme"What coarser grained leather called I1 s ide-upper."
Shaving
The hides are transported to the shaving machines by portable trucl" to
undergo the process of shaving down the back on the flesh side of the
hide, wearing away the extra thickness of skin which forms along the
backbone. Care must be tak:en to keep the shaving knife from shaving
off too much or too little; the hides must be of uniform thickness when
passed on the the next operation, that of dyeing.
The shaving machine has two rubber or leather rollers which grip the
hide as it is fed by the operator and shaved by a sharp bladed knife
which passes over the flesh surface of the hide. The rollers and knife
are either 12, 18, or 24 inches in length, depending on the size of the
hide to be shaved. See illustration on page 37.
Oiling Off
Af'ter being fatliquored in the drums, the hides start on a series of
finishing operations, the first of which is oiling off. In the. oiling
off machine, the hldes are fed through two large b:l:.'ass rollers wher~
an emulsion of neatsfootoil is spread on the grain side. Neatsfoot
oil, of course, cannot be used where white or light colors are desired.
Another oil emulsion that "Till not stain is used.
This process renders the hide pliable and soft, covering the hide ,nth
an oily sheen. Two men are required to operate t;he machine properly,
and extreme care must be exercised to be sure that the emulsion is
spread on evenly and thoroughly.
As the hides emerge :fran the machine, they are very carefully picked
up by one of the operators and set on a table in preparation for drying.
Drying
The skins are dried by hanging them on racks in a drying roam in which
the air is heated, dehumidified and kept in constant circulation by
means of electric fans. Usually they are kept there for a predetermined length of time. Better resul+ -:, follow when the drying operaticn
is fully mechanized. This latter step of refinement can be taken later
and is not advised at the outset.
Smmning
After drying, the hides are ready for the addition of controlled and
uniformly distributed moisture; and this process, although extremely
important, amounts to nothing more than packing the leather in dampened
sawdust and leaving j.t there for a day or longer, covered with a heavj
canvas blanket so that the leather may absorb just the proper amount of
moisture.
staking
The moistened hides are removed in the morning to the staking machines.
See illustration on page 38.
The operator feed the hide to the plunging jaws, holding one end between
his leather abdaninal pad and a bumper on the machine, spreading the
- 11 -
hide flat and shifting the hide as necessary to make the hide supple
andsoft. ~reme nimbleness and dexterity are required on the part of
the operator, as approximately 2,500 pounds of pressure are exerted by
the machine in this pulling operation.
Buffing
Light cattle hides end calfskins are usually buffed to make them uniform
in thickness. The buffing machine, which has a 5-foot overshot wheel,
wears away all lumps which have been pulled up as a result of staking.
Seasoning
Seasoning produces a finished, uniform texture to the
free from cracl{,ing. This operation also prepares the
An application of seasoning compound is swabbed on by
inch of the grain side of the hide is covered. After
hide is hung on a rack for drying.
hide, keeping it
hid.e for glazing.
hand, and every
swabbing, the
Glazing
Glazing of a hide is accomplished on a polishing jack, see page 38.
This machine generates heat by friction of an agate cylinder passing
up and down a leather strap over which the hide is held. Skilled
operators are needed for this operation, as the gloss results from the
pressure applied to' the agate. Too little pressure will dull hides,
and too much pressure will burn the hide.
At this point the hides receive a rigid inspection. The perfect hides
pass on to the graders, sorters and measuring machine, while hides
haVing wrinkles or creases go the the Ironing Department.
Ironing
The purpose of' the ironing machines, which are the roller type and
heated by electric elements or steam, is to eliminate the glazing marks,
creases, and wrinkles. After the ironing operation, the hides are inspected and dispatched to the graders, sorters and measuring wAchine.
Grading, Sorting and Measuring
Upon receiving the hides frcm either the Glazing or Ironing Departments,
the grader sorts. the leather on the basis of' such standards as evenness
of color, fineness of grain and general appearance and feel.
Upper leather is sold by the surface area, and because of the irregularities of hides, it would be a lengthy process to determine the number
of square feet in each piece of leather without a measuring machine.
See illustration on page 38.
- 12 -
PIANT LAYOUT
A plant layout and a flow chart are sho'WI1 on pages 14 and 15.
PlANT SITE
To prOVide f'or eventual expansion, the land for the plant site sh01l1d
contain at least 50,000 square feet. The site should be le~el, well
drained, and should 'be located as advantageously as possible :with re'"
spect to transportation, power, water, fUel, sources of markets and
labor. The cost of such a site is estimated at $2,000.
BUILDnm
A one-story building, 120 feet x 150 feet or 18,000 square feet, Will
prOVide ample space for all operations, inclUding an office. It mB"
be constructed "inthany suitable bUilding materials. It is estimated
that the complete bUilding, including adequate plumbing and "i-Tiring,
will cost about $3.50 per square foot, or a total of about $63,000.
POWER
About 140 kilowatt hours per day of power will be required. Based on
a cost of $.025 per kilowatt hou~tne annual cost of power for all
purposes is estimated at $900.
FUEL
It is .estimated
sanitary purpo~
.3
water reqUirements for the purposes of production, heat, sanitary facilities, drin..'k.:ing purposes and fire protection is estimated at $60: per
year.
- 13 -
,..
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MUSUIING
DEUMING
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EQUIPHKNT REQUIREMENTS
Units
Needed
Estimated
Cost
1
1
1
1
1
$ 5,000
$ 1,000
15
16,000
3,000
3,000
200
300
1,000
1,000
300
3,500
1
2
2
1
1
5
1
3,500
600
300
500
600
$29,900
and Finishing
Tanning drum
Setting out machine
Second tanning drum
Stamping machine
Splitting machine
ShaVing machine
D".feing drum
Oiling off machine
Measuring machine
Drying racks and equipment
St~~ing machines
Buffing machines
Seasoning benches and equipment
Glazing machines
Ironing machine
Other tools, gauges, knives, bins
Total
1
1
1
1
1
1
1
1
1
2
2
2
1
$ 1,200
3,500
1,200
600
4,600
3,000
1,000
3,500
6,000
1,500
5,000
6,000
500
2,500
1,200
1,800
$~J,lOO
- 16 -
Actual
Cost
TOTAL COST OF
EQUIPMF~Hr
Estj.mated
Cost
Department
Actus.l
Cost
Hidehouse
Beamhouse
29,900
i.~ 3,100
2,500
Office EqUipment
Desks, chairs, files,
lockers, cabinets, typewriter
1,600
Total
$87,000
SUPPLIES
Estimated
Cost
Description
$ 1,500
Milk of lime
Chemicals for tanning
Sawdust and wood sweepings
2,000
100
Various dyes
Lubricating oils
3,000
100
Neatsfoot oil
Fish oil
1,400
1,500
Soap
Burlap, rope and twine
100
1,000
Chrome alum
2,000
Sodium bichromate
1,000
Sulphuric acid
500
400
2,400
200
Office Supplies
$16,400
Total
- I',' -
Actual
Cost
DEPRECIATION
Estimated
Cost
Years'
Life
Estimated
Per Year
$63,000
20
$ 3,150
82,900
10
8,290
Maintenance Tools
2,500
500
Office EqUipment
1,600
10
160
Item
Building
Production EqUipment
and Tools
Actual
Per Year
$12,100
Total
DIRECT IABOR
This study has been predicated upon an average size tannery using
untrained and unskilled labor wherever feasible.
Occupation
Personnel
Required
Hourly
Rate
Annual
Cost
1
1
$ 1.80
$ 3,600
1.50
Hidehouse
Inspector
Sorter - raw hides
Hauler and material
handling - dry
Total
1.60
3,200
,.4;
3,00C2.
9,800
:I>
6,400
Beamhouse
Liquormen, soaking vats
Liquormen, liming reels
and bating
Unhairing machine operator
FJ.eshing machine operator
Trimmer
Scudding machine operator
Rounder
Laborer, material
handling - wet
Hauler
Inspector
Total
:I> 1.60
l.60
9,600
1.60
1
1
1
1
1.60
1.70
1.60
1.90
3,200
3,200
3,400
3,200
3,800
1.50
150
1.80
3,000
3,000
3,600
1
1
13
- 18 -
$ 42,400
Actual
Cost
Direct labor
- Continued
Occupation
Personnel
Required
Hourly
Rate
$ 1.60
2
1
150
1.80
1
1
190
Annual
Cost
Tannery
Liquormen, first and second
tanning, dyeing and
f'atliquoring
Setting out machine operators, stampers and
sorters
Splitting machine operator
ShaVing machine operator
Oiling-off machine operator
Oiling-off machine laborer
Sta.~er machine operators
Buf'fing ar'.d glazing machine
operators
Ironing machine operator
Drying room operator
Samming man
Seasoner
laborer, material
handling
wet
Laborer, material
handling
dry
HaUler
Shippers, graders, sorters
Inspectors
6,400
6,000
3,600
3,800
3,200
3,000
7,600
1
2
1.60
150
1.90
3
1
1
1
1
2.00
1.50
1.60
150
1.50
12,000
3,000
3,200
1.50
3,000
1.50
1.50
1.80
1.80
3,000
3,000
7,200
7,200
Total
4>
1
2
2
24
3,000
3,000
$ 81,200
$ 9,800
42,400
81,200
- 19 -
40
$133,400
Actual
Cost
INDIRECT LABOR
Personne~
Occupation
Required
Manager
Chemist
Bool:l,eeper
Superintendent
stenographer
Office Clerl;:
Ja...'1i tor
Supervisor
:1v1aintena.'1.C e
Firemen, station~J boiler
ivatcbman
Utility lcla'YJ.
True}: Driver
1
1
1
1
1
1
1
1
1
1
1
1
1
Total
Hourly
Rate
Annual
Cost
<t,
10,000
7,200
5,000
7,200
3,000
3,000
3,000
5,000
4,000
3,000
3,000
3,000
3,000
d'
59,400
'iJ
G'
.p
150
2.00
1.50
1.50
1.50
1.50
13
'f
MJ.\.l'JtJFACTURING OVERHEAD
Item
Estimated
An..YJ.ua1 Cost
Indirect labor
$ 59,400
Supplies
16,400
PO\.;er
900
Hater
600
Fuel
700
Depreciation
Total
12,100
$ 90,100
- 20 -
Actual
Annual Cost
Actual
Cost
MANUFACTURING COSTS
Estimated
Annual Cost
Item
~;
Direct Labor
ActuaJ.
Annual Cost
133,400
Cost of Hides
520,000
l1anufacturing
Overhead
90,100
$ 743,500
TotaJ.
HORKING CAPITAL
Estimated
Cost
Item
Hides in Process
Direct :Labor
Hanufacturing Overhead
Reserve for Collections
30 days
30 days
$ 43,300
30 days
30 days
7,500
Actual
Cost
11,100
98 ,40c
$ 160,300
Total
FIXED ASSETS
Estimated
Cost
Item
:\>
La.Yld
2,000
63,000
82,900
2,500
Building
Equipment Requirements
OthCl- Tools cmd Eqnipment
Office
Actual
Cost
1,600
Equi~~ent
~~ l52,OOO
'fatal
CAPI'l'AI, HEQUIRE!:,1ENTS
Estimated
Cost
Item
~~
1;rorldne; Capital
Fixed Assets
160,300
152 ,O?0
$ 312,3.00
Total
- 21 -
Actual
Cost
SALES REVENUE
The capacity of this plant is 13.1500 squ.are feet of leather per day.
Based on 250 lvor1dng days per year the annual production would amount
to 250 x 13,500 square feet or 3,375,000 square feet per year.
The average price of leather of the grade and quality produced in this
plant is $0.35 per square foot. On this basis the a.rmual sales of this
plant would be 3,375,000 x *0.35 or $1,181,125.
Unused material in the form of scrap and. the offal and hair removed fran
the hides can usually be sold at a profit. The revenue from these
c,ources is not included in the above est:i1nate of sales.
The buildinG shol-.'Tl in this manual has ample space for 100~~ expansion.
The cost additional equipment required to double production shou~d not
exceed $40,000.
<to
Direct Labor
Cost of Hides
Actual
Cost
133,400
520,000
90,100
l-ra.'1ufacturing Overhead
Total Manufacturing Costs
7 43,500
$ 10,000
Interest on Loans
Insurance
2,000
Legal
2,400
Auditing
3,600
19, 62 5
Unforeseen Expense
A~'!linistrative
PROFITS
Esti..'!lated
Cost
Item
Total
Al~D
C0StS
37,625
100,000
300,000
y"'1 , ]8'
_
- 22 -
---~--
BJOOm CONTROL
At the end of each month the DJB~er Will receive a statement of all
expenditures broken down by bUdget accounts. If the expenditures exceed the bUdgeted mon~ aJ.l.owances of' any of the accounts, the
bookkeeper willf'urnish the manager with a break-down of allexpendi.tures re1ative to the budgeted accO'..m:ts exceeded. All these supporting
Account Number
Monthly
Expense
*---
Monthly
Budget
Annual
Budget
10 Administrative
$
$ l,500
20 Sales
8,333
30 Direct Materials
43,333
40 SUpplies
1,366
51 Power*
75
52 Water*
50
53 Fuel
58
60 Unforeseen Expense
l,635
(Reserve Account)
71 Direct Labor*
ll,ll6
72 Indirect Labor*
4,866
80 Depreciation
(Reserve Account)
Note: Administrative includes interest
insurance, legal and auditing.
- 23 -
1.8,000
100,000
520,000
16,400
900
600
700
19,625
3.33,400
59,400
l2, lOO
on .loans,
Actual.
*---
PURCHAS~
C
D
0
n2QUISITION
COMPANY NAME
0
0
0
10 .ADMINISTRATION
20 SALES
30 MATERIAIS
I DATE
40 SUPPLIES
.,
50 UTILITIES
60
tJNFORESEEN EXPENSE
D
0
0
0
DIRECT MATERIAIS
MAINTENANCE MATERIALS
MAINTENANCE SERVICES
OPERATING SUPPLIES
DELIVERY WANTED
QUANTITY
-TOTAL
UNIT
I
I
I
I
I
I
I
I
I
I
Ii
II
i
I
REQUISITIONED BY
QUOTES
FROM
APPROVED BY
QUOTES
FROM
I
, ORDER NO.
QUOTES
FROM
- 24 -
ORDER DATE
65-22
514
ANYWHERE. U. S. A.
PAY
TOTHEOROEROF
19_ _
No.
DOLLARS
10000
-,
R. W. MITCHELL MA~UFACTURINGCOMPANY
L
TO
f\)
.J
BY
SAMPLE CHECK
\J1
ACCOUNT NUMBER
VICE PRESIDENT
ENGINEERS
- 26 -
TRAINING
In other
B.
c.
D.
- 27 -
SAFErY
- 28 -
SUMMARY
2.
3.
4.
5.
6.
1.
2.
3.
- 29 -
SUMMARY (Continued)
4.
5. Would the estimated sales price and quality of the new product
make it ccmpetitive with an imported equivalent'!
A. After adjusting cost to local conditions, is the
estimated sales price of the product so high that
tariff protection is necessary to protect it fram
imports?
EXPORT
1.
2.
3.
4.
5.
MARKETS
1.
2.
3.
4.
- 30 -
SUMMARY (Continued)
ECON(J.iIC FACTORS
1.
PERSONNEL
1.
2.
Can the problem of training canpetent management and supervisory personnel be solved?
A. liso, the training of skilled labor?
B. Is technical advice available in the locality?
C. If not, where can it be obtained and what will it cost?
lAWS AND REGUIATIONS
1.
- 31 -
SUMMARY (Continued)
FINANCIAL FACTORS
1.
1.
In estimating the cost of the project, has caref'ul consideration been given to:
A. The effect on costs of delays in construction schedules?
B. In delivery and installation of machinery and equipnent?
C. In import of essential raw materials and supplies?
2.
3.
1.
1.
- 32 -
BIBLIOGRAPHY
Textbooks
Tanning Processes
Periodicals
Shoe Trade and Publishing Go.
683 Atlantic Avenue
Boston 11, Massachusetts
leather Manufacturing
ABBHEVIATIONS
Foot or feet
n
Inch or inches
cSI
Percent
sq. ft.
- 33 -
No.1
No.2
WASHING
LIMING
No.3
- 34 -
UNHAI'ING
No.4
No.5
MACHINE FLESHING
No.6
seUDDIN$
- 35 -
No.7
No.8
CHROME TANNINS
No.9
- 36 -
No. 10
No. 11
No. 12
FATLl9UORING A
D"fEING
NO
- 37 -
No. 13.
STAKING
No. 14
No. 15
Measuring
- 38 -
m-