abhishreshthaa
Abhijeet S
1. Description of Business
Spencer Pens is a small scale manufacturing company. The company deals with the manufacturing & production of plastic & metal pens. It is a partnership firm comprising of six partners viz., Mr. Kartik, Mr. Vivek, Mr. Dipesh, Mr. Kunal, Mr. Vajresh & Mr. Munjal. The profits or the losses incurred would be shared equally.
Administration Office would be located in Mumbai & the manufacturing unit in Daman. Ball pens components and refills of the metal pens would be manufactured in Daman and they would be dispatched to Mumbai where assembling would take place.
In the first year company would plan to introduce 25 types of pens [10 plastic & 15 metal]. The company main policy is to ensure the best quality. In other words, the USP of the product would be quality.
Manufacturing
Location:
The manufacturing unit of the company will be located at Daman while it would be operating from Mumbai. Due to the following reasons the manufacturing unit will be Daman:
• Supply of Raw Materials
As most of our supplies are located at & close to Daman, we have opted to locate here. Secondly it also ensures quick delivery of raw materials at the time of emergency. This in return reduces pressure of inventory, thereby would be reducing the inventory varying cost.
• Tax Benefit:
If the manufacturing unit of the company would have been in Mumbai then
MUMBAI DAMAN
OCTROI 5.5% NIL
SALE TAX 5.4% NIL
• Cheap Labour Supply
In order to operate the machines, a fair amount of worker would be required & at Daman the labor supply is cheap as per our marketing department’s survey. Hence if we are able to get labor at cheaper rates, it would be advisable as well as economical for chair manufacturers like us to set-up factory over here.
• Availability of Power
As our machines work on electricity, continuous & uninterrupted flow of power is very necessary. So considering this, Daman is highly suitable.
• Proximity to the Head Office:
Daman is approx. 150 kms far from Mumbai, our head office and hence adds us another advantage.
• No transportation problem
Locating a manufacturing in Daman is highly suitable as all the means of transportation, i.e., road, water, air & rail, are open. This would ensure quick delivery as well as dispatching of our product.
• Electricity Charges:
MUMBAI Rs. 5.50 / unit
DAMAN Rs. 2.00 / unit
TYPES OF MATERIALS USED, THEIR QUANTITY & THEIR COST
SR. NO Type of Material Cost (Rs.)
1 METAL PIPE 250/KG
2 PLATED & COLORED PIPE 2/PIECE
3 REFILL 0.75/PIECE
4 NOSAL 1/PIECE
5 CLIP 100/144
6 CAP 0.50/PIECE
7 BUSH 0.25/PIECE
8 BORYA I 60/144
9 BORYA II 60/144
10 PLUG 15/144
11 PM PLASTIC MOLDED COMPENENTS 15/UNIT
MANUFACTURING PROCESS
The company deals with the manufacturing of both:
• Plastic Ball Pens &
• Metal Ball Pens
Before understanding the manufacturing or the production process one point has to be noted:
The company manufactures all the components of plastic ball pens & it includes two processes:
1. Moulding
2. Assembling
In case of metal ball Pens Company manufactures only the refill & not all the components. This is because of the economies of scale it is better foe a small-scale unit like that of ours to outsource other components. The reason why the company manufactures refill is:-
• Refill is the backbone of the pen industry
• The quality of the final product, i.e. pen is decided on the quality of refill.
Plastic Ball Pens
In case of plastic ball pens each & every part of the pen has to be produced & then assembled to form one single pen. Hence, to summarize there are two processes:
• Moulding
• Assembling
Moulding Process
The production of pens under moulding process has to undergo three processes. They are:
• COMPOUND GENERATION
• GRINDING
• MOLDING
• The sequence of operation :
Formula Sent to Grinder Sent to molding machine
Dispatched to the packing department
The machines involved in the manufacture of chairs are:
1. Grinder Machine
The grinder machine is used to grind & mix the raw materials & other ingredients which form a powder. This is then taken to the molding machine. The grinder had a capacity of holding 80 kgs of ingredients. It takes approximately 20 minutes to finish its activity.
2. Molding Machine
The molding machine is the machine from which the pen components are moulded. The powder so formed from the grinder is brought to the molding machine where the pen components are produced. It has a capacity of producing 5,000/- pens (components) a day.
Procedure
• Compound Generation
Firstly, according to the standards set the formula has to be prepared. This is called compound generation. All the ingredients have to be collected & then it has to be sent to Grinder for grinding. In this process 7-8 laborers are required.
• Grinding
In this stage the ingredients so collected are dumped into the drum of the grinder. Once the grinding is finished it is then taken to the molding machine. In this process 8 laborers are required.
• Molding
After the powder is obtained from the above, it has to be taken to the molding machine. From the molding machine the components of the pens will be produced. In this process 15 laborers would be required.
Assembling
Once all the plastic components would be moulded, they would be packed & stored in the Stores Room.
From the storeroom these components will be dispatched to the Mumbai branch where assembling would take place.
For the purpose of assembling approximately 20 labourers would be employed.
After the assembling is finished, all the pens will be packed using appropriate packaging tools, e.g. Display Box, Wooden Box, etc
(Note: For knowing all the types of packaging boxes kindly refer to the explanation given under marketing)
After the packaging is finished pens would be stored in the warehouses.
. METAL PENS
The company, in case of metal ball pens, only produces the refill as it is the backbone of this industry. The metal ball pen production include following materials:
• Brass Pipe
• Clip
• Brass Part
• Plastic Parts
• Rubber
• Refill
• Spring
Firstly the brass rods or pipes are sent for cutting & shaping.
Then it is sent for plating.
In the mean time other parts of the pen are ordered.
PRODUCTION OF REFILL
• The production of refill undergoes many processes. Once the pipes are cut & shaped, the nibs are added.
• Next the inks are filled.
• A white substance called blocker is then filled. This is done so that ink in the refill does not flow back.
• After this done the refills are cleaned and are for two to three days for drying.
• Once this is finished they are tested & again cleaned, packed & sent to the stores department.
Thus after purchasing as well as after the production, all the parts are assembled, packed & stored.
MAKE OR BUY DECISION OF THE COMPANY
The company wouldn’t produce all the parts of the pen because of the various factors like:
• Cost
• Facility Available
• Production Capacity
• Importance
• Quantity
• Quality
1. Cost: This is the most important of all the factors. If a material or a component is expensive then the company may opt for outsourcing it.
2. Facility Available: This is another important factor. If appropriate facility or spare is not there, then in that case the company may opt for buying or outsourcing.
3. Production Capacity: If the plant capacity is large then the company may produce or make the material or else it may buy.
4. Importance: There are certain components, which the company can’t afford to buy. In this industry the company cannot buy refill, as it is the main component of the pen. The quality of the final product pen lies in the quality of the refill. Hence the company has to make it.
5. Quantity: If the quantity is too large then the company might go for making the material (Economies of scale) & vice versa.
6. Quality: If the quality of the material has to be taken care then the company would opt for making it or vice versa.
QUALITY CONTROL
The company will take a good care to ensure quality, both at the supply point as well as finished goods point.
As soon as the raw materials would be received from the suppliers, the engineers would check:
1. The dimension
2. Quality
3. Quantity
After this is done the materials would be taken for processing.
The quality will be ensured at every stage. Say for example the product has to undergo three processes, then after completion of each process the quality will be checked. If not found up to the mark they would be immediately rejected.
After all the processing & assembling, the final product will be checked & if accepted or if found as per the standards set, it will be sent for packaging.
Thus from the above explanation it can be inferred that the company will take a good care to ensure the quality.
Description of the Productivity Measure
Production refers to the total output of a manufacturing unit. Productivity refers to the ratio of Total Output to Total Input. Productivity can therefore be defined as the ratio of quantity of goods & services produced to the amount of resources, which are used. Productivity can be increased by 4 ways:
1. Increase output by keeping input constant
2. Decrease input keeping output constant
3. Increase both input as well as output but ensure that the ratio also increases
4. Decrease both input as well as output but ensure that the ratio also increases
Ways of improving productivity:
To improve the productivity the company has to understand the various factors that affect productivity. The first factor, which affects productivity, is introduction of new equipment and better working facilities.
A company may own the best machine but if the workers do not work with delegation, productivity can’t be measured. Hence the job performance depends upon the ability & motivation developed within the worker. The work environment also affects the productivity. Work environment covers facilities such as lighting, temperature control, adequate infrastructure, and availability of materials on time, etc.
Areas of productivity in Production Function
The various areas in production function where productivity can be improved are:
• Improving the volume of the production
• Reducing the rate of rejection
• Minimizing the rework rate
• Maintaining strict delivery schedule
• Controlling or eliminating idle time of men & machine
• Establishing & setting up of industrial engineering norm
• Updating the various procedures & processes
• Decreasing the machine set up time
• Controlling the payment of overtime
• Checking absenteeism, pilferage, theft, etc.
• Reducing or eliminating accident
• Efficient training of workers
• Minimizing inventory holding
Spencer Pens is a small scale manufacturing company. The company deals with the manufacturing & production of plastic & metal pens. It is a partnership firm comprising of six partners viz., Mr. Kartik, Mr. Vivek, Mr. Dipesh, Mr. Kunal, Mr. Vajresh & Mr. Munjal. The profits or the losses incurred would be shared equally.
Administration Office would be located in Mumbai & the manufacturing unit in Daman. Ball pens components and refills of the metal pens would be manufactured in Daman and they would be dispatched to Mumbai where assembling would take place.
In the first year company would plan to introduce 25 types of pens [10 plastic & 15 metal]. The company main policy is to ensure the best quality. In other words, the USP of the product would be quality.
Manufacturing
Location:
The manufacturing unit of the company will be located at Daman while it would be operating from Mumbai. Due to the following reasons the manufacturing unit will be Daman:
• Supply of Raw Materials
As most of our supplies are located at & close to Daman, we have opted to locate here. Secondly it also ensures quick delivery of raw materials at the time of emergency. This in return reduces pressure of inventory, thereby would be reducing the inventory varying cost.
• Tax Benefit:
If the manufacturing unit of the company would have been in Mumbai then
MUMBAI DAMAN
OCTROI 5.5% NIL
SALE TAX 5.4% NIL
• Cheap Labour Supply
In order to operate the machines, a fair amount of worker would be required & at Daman the labor supply is cheap as per our marketing department’s survey. Hence if we are able to get labor at cheaper rates, it would be advisable as well as economical for chair manufacturers like us to set-up factory over here.
• Availability of Power
As our machines work on electricity, continuous & uninterrupted flow of power is very necessary. So considering this, Daman is highly suitable.
• Proximity to the Head Office:
Daman is approx. 150 kms far from Mumbai, our head office and hence adds us another advantage.
• No transportation problem
Locating a manufacturing in Daman is highly suitable as all the means of transportation, i.e., road, water, air & rail, are open. This would ensure quick delivery as well as dispatching of our product.
• Electricity Charges:
MUMBAI Rs. 5.50 / unit
DAMAN Rs. 2.00 / unit
TYPES OF MATERIALS USED, THEIR QUANTITY & THEIR COST
SR. NO Type of Material Cost (Rs.)
1 METAL PIPE 250/KG
2 PLATED & COLORED PIPE 2/PIECE
3 REFILL 0.75/PIECE
4 NOSAL 1/PIECE
5 CLIP 100/144
6 CAP 0.50/PIECE
7 BUSH 0.25/PIECE
8 BORYA I 60/144
9 BORYA II 60/144
10 PLUG 15/144
11 PM PLASTIC MOLDED COMPENENTS 15/UNIT
MANUFACTURING PROCESS
The company deals with the manufacturing of both:
• Plastic Ball Pens &
• Metal Ball Pens
Before understanding the manufacturing or the production process one point has to be noted:
The company manufactures all the components of plastic ball pens & it includes two processes:
1. Moulding
2. Assembling
In case of metal ball Pens Company manufactures only the refill & not all the components. This is because of the economies of scale it is better foe a small-scale unit like that of ours to outsource other components. The reason why the company manufactures refill is:-
• Refill is the backbone of the pen industry
• The quality of the final product, i.e. pen is decided on the quality of refill.
Plastic Ball Pens
In case of plastic ball pens each & every part of the pen has to be produced & then assembled to form one single pen. Hence, to summarize there are two processes:
• Moulding
• Assembling
Moulding Process
The production of pens under moulding process has to undergo three processes. They are:
• COMPOUND GENERATION
• GRINDING
• MOLDING
• The sequence of operation :
Formula Sent to Grinder Sent to molding machine
Dispatched to the packing department
The machines involved in the manufacture of chairs are:
1. Grinder Machine
The grinder machine is used to grind & mix the raw materials & other ingredients which form a powder. This is then taken to the molding machine. The grinder had a capacity of holding 80 kgs of ingredients. It takes approximately 20 minutes to finish its activity.
2. Molding Machine
The molding machine is the machine from which the pen components are moulded. The powder so formed from the grinder is brought to the molding machine where the pen components are produced. It has a capacity of producing 5,000/- pens (components) a day.
Procedure
• Compound Generation
Firstly, according to the standards set the formula has to be prepared. This is called compound generation. All the ingredients have to be collected & then it has to be sent to Grinder for grinding. In this process 7-8 laborers are required.
• Grinding
In this stage the ingredients so collected are dumped into the drum of the grinder. Once the grinding is finished it is then taken to the molding machine. In this process 8 laborers are required.
• Molding
After the powder is obtained from the above, it has to be taken to the molding machine. From the molding machine the components of the pens will be produced. In this process 15 laborers would be required.
Assembling
Once all the plastic components would be moulded, they would be packed & stored in the Stores Room.
From the storeroom these components will be dispatched to the Mumbai branch where assembling would take place.
For the purpose of assembling approximately 20 labourers would be employed.
After the assembling is finished, all the pens will be packed using appropriate packaging tools, e.g. Display Box, Wooden Box, etc
(Note: For knowing all the types of packaging boxes kindly refer to the explanation given under marketing)
After the packaging is finished pens would be stored in the warehouses.
. METAL PENS
The company, in case of metal ball pens, only produces the refill as it is the backbone of this industry. The metal ball pen production include following materials:
• Brass Pipe
• Clip
• Brass Part
• Plastic Parts
• Rubber
• Refill
• Spring
Firstly the brass rods or pipes are sent for cutting & shaping.
Then it is sent for plating.
In the mean time other parts of the pen are ordered.
PRODUCTION OF REFILL
• The production of refill undergoes many processes. Once the pipes are cut & shaped, the nibs are added.
• Next the inks are filled.
• A white substance called blocker is then filled. This is done so that ink in the refill does not flow back.
• After this done the refills are cleaned and are for two to three days for drying.
• Once this is finished they are tested & again cleaned, packed & sent to the stores department.
Thus after purchasing as well as after the production, all the parts are assembled, packed & stored.
MAKE OR BUY DECISION OF THE COMPANY
The company wouldn’t produce all the parts of the pen because of the various factors like:
• Cost
• Facility Available
• Production Capacity
• Importance
• Quantity
• Quality
1. Cost: This is the most important of all the factors. If a material or a component is expensive then the company may opt for outsourcing it.
2. Facility Available: This is another important factor. If appropriate facility or spare is not there, then in that case the company may opt for buying or outsourcing.
3. Production Capacity: If the plant capacity is large then the company may produce or make the material or else it may buy.
4. Importance: There are certain components, which the company can’t afford to buy. In this industry the company cannot buy refill, as it is the main component of the pen. The quality of the final product pen lies in the quality of the refill. Hence the company has to make it.
5. Quantity: If the quantity is too large then the company might go for making the material (Economies of scale) & vice versa.
6. Quality: If the quality of the material has to be taken care then the company would opt for making it or vice versa.
QUALITY CONTROL
The company will take a good care to ensure quality, both at the supply point as well as finished goods point.
As soon as the raw materials would be received from the suppliers, the engineers would check:
1. The dimension
2. Quality
3. Quantity
After this is done the materials would be taken for processing.
The quality will be ensured at every stage. Say for example the product has to undergo three processes, then after completion of each process the quality will be checked. If not found up to the mark they would be immediately rejected.
After all the processing & assembling, the final product will be checked & if accepted or if found as per the standards set, it will be sent for packaging.
Thus from the above explanation it can be inferred that the company will take a good care to ensure the quality.
Description of the Productivity Measure
Production refers to the total output of a manufacturing unit. Productivity refers to the ratio of Total Output to Total Input. Productivity can therefore be defined as the ratio of quantity of goods & services produced to the amount of resources, which are used. Productivity can be increased by 4 ways:
1. Increase output by keeping input constant
2. Decrease input keeping output constant
3. Increase both input as well as output but ensure that the ratio also increases
4. Decrease both input as well as output but ensure that the ratio also increases
Ways of improving productivity:
To improve the productivity the company has to understand the various factors that affect productivity. The first factor, which affects productivity, is introduction of new equipment and better working facilities.
A company may own the best machine but if the workers do not work with delegation, productivity can’t be measured. Hence the job performance depends upon the ability & motivation developed within the worker. The work environment also affects the productivity. Work environment covers facilities such as lighting, temperature control, adequate infrastructure, and availability of materials on time, etc.
Areas of productivity in Production Function
The various areas in production function where productivity can be improved are:
• Improving the volume of the production
• Reducing the rate of rejection
• Minimizing the rework rate
• Maintaining strict delivery schedule
• Controlling or eliminating idle time of men & machine
• Establishing & setting up of industrial engineering norm
• Updating the various procedures & processes
• Decreasing the machine set up time
• Controlling the payment of overtime
• Checking absenteeism, pilferage, theft, etc.
• Reducing or eliminating accident
• Efficient training of workers
• Minimizing inventory holding