Standard Machine/s – Manual Operation/s Cost/s Assessment Framework 

Once raw materials have been procured, they must pass through one or more processing operations before they become a finished product. 

Every such operation consumes resources in the form of machinery, labor, electricity, maintenance and capital investment. 

Although these costs are often grouped together as "processing expenses", each operation has its own technical characteristics, productivity standards and operating costs.

This framework has been developed to estimate the true cost of performing each individual processing operation under practical industrial conditions. 

Instead of allocating approximate factory overheads, it analyses every operation separately by considering machine capacity, operating hours, electricity consumption, labor deployment, maintenance, replacement and capital investment.

The objective is to create standard benchmark costs on a per-hour and per-kilogram basis for every processing operation. Once these benchmark costs are established, they can be combined in different sequences to estimate the conversion cost of virtually any food product.

For example, wheat flour may require Cleaning → Pulverising → Sieving, while turmeric powder may require Cleaning → Drying → Grinding → Sieving. Likewise, edible oils may require Cleaning → Crushing → Extraction → Filtration. Each product simply uses the operations applicable to its manufacturing process.

This modular approach makes the framework flexible, transparent and easy to adapt for products ranging from simple single-ingredient commodities to complex processed foods.

Table 2.1

Typical Direct Material Conversion Operations

Depending upon the product and manufacturing technology, one or more of the following operations may be required.

Material Preparation

• Washing 
• Cleaning 
• Destoning 
• Sieving 
• Grading 
• Gravity Separation 
• Sorting 
• Peeling 
• Cutting 
• Slicing 
• Crushing 

Size Reduction

• Grinding 
• Pulverizing 
• Milling 
• Flaking 
• Cracking 
• Rolling 

Thermal Processing

• Drying 
• Roasting 
• Baking 
• Frying 
• Boiling 
• Cooking 
• Steaming 
• Blanching 

Mixing & Product Formation

• Blending 
• Mixing 
• Kneading 
• Extrusion 
• Forming 
• Coating 

Extraction & Separation

• Oil Extraction 
• Juice Extraction 
• Filtration 
• Clarification 
• Centrifugation 
• Decanting 

Product Finishing

• Cooling 
• Conditioning 
• Filling 
• Sealing 
• Coding 
• Packing 

Every food product follows its own unique sequence of operations. Users should assess only those operations that are actually performed during the manufacture of their product.

END NOTE

The purpose of this framework is not merely to estimate machine operating costs.

 It is intended to help users understand the technical and economic implications of every processing operation performed inside a food manufacturing unit.

Once standard costs have been estimated for individual operations, they can be reused across hundreds of different food products requiring the same processing step. This significantly reduces the time required for future product costing while improving consistency, transparency and accuracy.

Users are encouraged to modify machine capacities, electricity tariffs, labor costs, maintenance expenses and utilization levels according to their own factory conditions. 

The Hello Kisan benchmark should be viewed as a practical reference point that can be adapted to different scales of operation and manufacturing technologies.

Together with the Raw Material Assessment and Packaging Material Assessment, this framework provides a systematic basis for estimating the complete conversion cost of food products before moving to the business cost assessment in the next part.

NOTE: Suggested AI Prompt – Table 2.1 Direct Material Conversion Operations Cost Assessment

Instructions to User

Attach the Hello Kisan Direct Material Conversion Operations Cost Assessment Framework (after copying or downloading it from the website) along with whatever information you already have about the product and its manufacturing process.

This may include the product name, manufacturing process, process flow chart, production capacity, machinery details, production batch size, machine specifications, electricity tariff, labor wages, operating hours, maintenance practices or any other relevant information.

The information may be complete or incomplete.

Then submit the following prompt to your preferred AI assistant.

Don't worry if your information is incomplete. AI can often make reasonable assumptions and clearly identify where better information is required. As your knowledge improves, simply update the table and ask AI to recalculate the assessment.

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Draft AI Prompt

I am assuming AI can add inputs as an experienced Food Technologist, Food Processing Engineer, Manufacturing Consultant, Industrial Engineer and Cost Accountant.

I am developing a Direct Material Conversion Cost Assessment for a food product using the attached Hello Kisan Direct Material Conversion Operations Cost Assessment Framework.

The information that I have supplied may be complete, partial or even approximate.

Wherever information is missing, kindly make practical and reasonable industry assumptions.

Clearly identify every assumption you make.

________________________________________

PART 1 – Draft / Complete the Assessment Framework

Please complete the Hello Kisan Direct Material Conversion Operations Cost Assessment Framework by:

1. Identifying all processing operations required for manufacturing the product. 

2. Arranging the operations in the correct manufacturing sequence. 

3. Identifying suitable machines or manual operations for each processing step. 

4. Estimating practical machine capacities and hourly production output.

5. Estimating machine capital costs, including installation wherever applicable. 

6. Estimating annual operating days, machine utilisation and working hours. 

7. Estimating annual maintenance costs and calculating maintenance cost per operating hour. 

8. Estimating electrical load, power consumption, electricity tariffs and electricity cost per hour. 

9. Estimating machine replacement life and calculating replacement cost per hour.

10. Estimating labor deployment, wage rates and labor cost per operating hour. 

11. Calculating the total operating cost per hour for every processing operation. 

12. Calculating the conversion cost per kilogram for every processing operation. 

13. Present the completed assessment in the same structure and format as the attached Hello Kisan Framework, preferably as TABLE 2.1

NOTE: IN case if any operation needs only manual labor then the machine costs shall be NIL. 

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PART 2 – Explain Your Work and Teach Me

Now explain everything you have done as if you are teaching a first-time food entrepreneur. Please explain:

1. Why each processing operation has been included. 

2. Why the manufacturing sequence has been arranged in that order. 

3. Why particular machines or manual operations have been selected. 

4. How machine capacities have been estimated. 

5. How machine utilisation and annual operating hours influence production costs. 

6. How maintenance, electricity, replacement and labour costs have been calculated. 

7. Which processing operations contribute the highest conversion costs. 

8. Where productivity improvements or better machine utilisation could reduce manufacturing costs.

9. Which assumptions have the greatest influence on the final conversion cost. 

10. Which assumptions should be replaced with actual factory data before finalising the assessment. 

11. Suggest practical alternatives where manual operations, semi-automatic systems or fully automatic machines may be more economical depending on production scale. 

12. Explain how the cost of individual processing operations can be combined to estimate the total conversion cost of different food products. 

Finally, explain the complete methodology in simple conversational English so that I understand not only this product but also learn how to prepare similar Direct Material Conversion Cost Assessments independently for other food products in the future.