Hypothetical example of Project Classification

sunandaC

Sunanda K. Chavan
PROJECT IDENTIFICATION AND CLASSIFICATION

INTRODUCTION

Project Identification is the first step in selecting the business venture.
The Fast Moving Consumer Goods (FMCG) sector is the fourth largest sector in the economy.
The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving products, etc.
A major portion of the monthly budget of each household is reserved for FMCG products.

ENVIRONMENTAL SCANNING

The environmental forces are external to business enterprise .
The best policy for them is to analyze the current environment and adjust the business policies and activities accordingly.
This type of environmental study is known as Environmental Scanning.


KEY GROWTH DRIVERS

Availability of raw materials
Vast agricultural output
Low labor costs
Large Domestic Market
Presence across value chain
Disposable Income on a rise
Growing share of organized retail
Market size
Higher employment generation

MAJOR ISSUES AND CHALLENGES OF THE INDIAN FMCG SECTOR
Highly unorganized

Inadequate distribution network

High competition between large and small players

Strengths

1.Low operational costs
2.Presence of established distribution networks in both urban and rural areas.
3.Presence of well-known brands in FMCG sector

1. Lower scope of investing in technology and achieving economies of scale.
2. Low exports levels.
3. "Me-too" products, which illegally mimic the labels of the established brands.


1. Untapped rural market
2. Rising income levels of consumers.
3. Large domestic market
4. High consumer goods spending.


Removal of import restrictions resulting in replacing of domestic brands
Slowdown in rural demand.
Tax and regulatory structure

INDUSTRY CLASSIFICATION

GROWTH RATE IN VARIOUS FMCG SEGMENTS (SALES)-{2004-2006}
Food and Beverages: 3.4% to 13.4%

Household Care: 14% to 6%

Personal Care: 9% to 36%

Sales Trend in personal Care segment (2004-2006)
Oral care

Skin Care

Hair Care

Bathing Soaps

1.Compatibility with the promoters

Finance

Human resource

2.Availability of raw materials

3. Compatible with government rules and regulations


CLASSIFICATION OF THE PROJECT

1.Quantifiable and non Quantifiable project

2.Techno economic project
Magnitude oriented classification
Causation oriented classification
Factory intensity oriented classification

3.Sectoral project
Agriculture and allied sector
Industry and mining sector
Social service sector
Transport and communication sector
Irrigation and power sector
Miscellaneous sector


STEPS PRIOR TO IMPLEMENTATION
1.Define aim
2.Self evaluation
What is my technical competency?
What is my convincing ability?
Do I know how to make a purchase deal?
Do I know how to sell a product?
Do I have the risk taking capacity
How much family backing do I have?
Do I know how to handle man and machine?


3.Manpower
Administrative: 5 entrepreneur
Skilled : 50employees
Semi skilled: 150employees
Unskilled : 500 local employees

4.Specifying requirement
Location: Vasai East, Sativali.
Space: 10,000sq feet.
Plant and machinery

PROJECT IDENTIFICATION
Additive
Complementary
Break through
 
Guidelines for Project Classification

Projects are the mechanism for implementing the strategy of the organization. Projects are prioritized based on their classifications. The purpose of this document is to establish taxonomy for project proposals. The process for reviewing and approving projects is described in the document “Business Process Map for Enterprise Application Project Assessment and Prioritization”.

The following guidelines will be used to assist in classifying projects that require the commitment of ITEA resources.

Classification: Elective Application Projects
Elective projects may be either legacy application enhancements or new applications. Elective projects are usually initiated in the user community in response to University or unit strategic plans, operational plans, continuous improvement opportunities, or the solution to specific business problems. In most cases, the existing business system and application works, but could work better. These projects are reviewed, validated, and prioritized by the Steering Committee. They may have been previously reviewed and prioritized by a departmental level advisory group. These projects compete for unrestricted or discretionary ITEA resources available after resources have been allocated to OnePurdue and non-elective projects. Customers or the university administration may provide additional, restricted resources (e.g., recharges, capital, etc.) to leverage or encourage ITEA and Steering Committee investment in such projects. ITEA resources directly funded by the divisions will primarily focus on elective projects for that division, unless otherwise stated by that division.

Characteristics of Elective Application Projects

1. The current business processes will continue to work satisfactorily even if the project is not funded.
2. The project is aligned with the University or a unit strategic plan. (Address the relationship or importance to the plan.)
3. The project is being driven by a business problem (real, anticipated, or expected).
4. The project is being driven by the opportunity to improve the existing system.
5. The project is being driven by the opportunity to use a new technology (but the technology’s use is not mandated or essential).
6. The project is feasible within ITEA’s infrastructure/logistical/architecture constraints.
7. The project will return measurable value that exceeds lifetime costs to develop and run the application.
8. Funds are available from identifiable sources (e.g., university, customer, ITaP). Consider costs for software, hardware, services, training, subject matter experts, technical staff, etc.
9. The resulting application will still make sense next year, and the year after that.
10. The application will contribute to valuable or necessary institutional change that will be necessary for ERP. (Examples include: strategic and significant business process change or business practices change)
 
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