Final Pages of Classic Chairs

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SUBMITTED TO: Prof. VeenaPrasad

SUBMITTED BY :

Sneha Habib -1500

Jinal Mistry -15024

Class : S.Y.B.M.S.



DATE OF SUBMISSION: 17th

February, 2007

ACKNOWLEDGEMENT

We have great pleasure in presenting the project on

“CLASSIC CHAIRS” and to express our deep regards towards

those who have guided us in hour of need.

The written word has an unfortunate tendency to

degenerate genuine graduate into skilled. However this is

the only way we have to record our feelings permanently.

We would like to express our sincere and whole hearted

thanks to Prof.Veena Prasad for giving us an opportunity to

do this project, for sharing her valuable time, experience and

knowledge and providing constant guidance to us in making

this project a success.

We are grateful to the Honorable principal of “S.I.W.S.

College” for making requisite facility available to us. Along



with we are also obliged and great to our parents and friends

for their constant help.

Finally before ending we would once again like to

express our true gratitude to all involved in our project.

INDEX: -

SR.

NO.

TOPIC PAGE

NO.

1.) Description of Business

2.) Business Structure

3.) Functions of Different Managers

4.) Sources and Application of Funds

5.) Location

6.) Plant Layout

7.) Production Process

8.) Raw Materials Required



9.) Procedure

10.) Time and Motion Study

11.) Marketing Plan

12.) References

DESCRIPTION OF THE

BUSINESS :

CLASSIC Chairs is a partnership firm comprising of 6

partners. CLASSIC is a small-scale manufacturing and

wholesaling unit of plastic chairs.

Their complete business operation is from Mumbai as

well as from the union territory of Daman, their

manufacturing unit. Their administrative office is located in

Mumbai. They are focusing completely on the different

plastic chairs, which are usually used in offices and occasion

and home, etc. mostly everywhere. Quality and design as

well as price are the criteria’s of prime importance. Their

product is not been distributed directly to the consumers. A

chain of wholesalers are wholesaling their products and then



the retailers are retailing their products i.e. selling their

products to the consumers. In order to know about their

target market and the market of chairs they visited some

company’s website i.e. Nilkamal, Cello, National. Who

already have a good market and goodwill but CLASSIC is

going to be their competitor. Also there are a large number

of small manufacturing units operating in this field. But

CLASSIC says that big brands are very few. Customers know

only some brands like Nilkamal, Cello and National. Now

Customers are looking for new brands that will provide thembetter quality and at a lower price than these brands and

Classic chairs are trying to fulfill the customer demand by

supplying high quality and low price products.

BUSINESS STRUCTURE

Kunal Shah Kartik Raichura

http://www.ibatech.com/resource/N-V-Ravikumar.jpg

http://www.itechlaw.org/images/ss.jpg



(Administration and Production manager) (Human Resource Manager)

Munjal Shah Vivek Sanghavi(Chartered Accountant) (Asst. Chartered Accountant)

Vajresh Shriyan Dipesh Sanghvi

(Marketing Manager) (Sales Manager)

Man Power

• 50 employees on payroll

• 30 employees on contract basis

Functions of the Different

Managers

• Administration and Production Manager :

The administrator and production manager is the key

factor when it comes to maintaining complete co-ordination

with the employees. The supervision of the production



process right from putting the raw materials into the grinder

to the final finishing of the product is the responsibility of

production manager. The employees approach the

production manager if they have any problems. The

production manager also keeps note on the logistics. He is

the one who is responsible to manufacture the finished

products in time and he keep a check if the production

process is according to the allotted time. The administrator

and production manager also checks that the machines are

utilized to the fullest. i.e. if the machine has a capacity tomanufacture 500 chairs a day then the machine should be

utilized to the fullest and the production manager keeps this

in mind, prepare’s a time and motion study and maintains

rapport with the employees so that the production process

works out smoothly and as planned.

• Marketing Manager:

If the marketing of a product is not done properly then

the product won’t be sold. Marketing is one of the most

important aspect in any industry and it proves the same for

Classic Chairs. Marketing manager plays a major role in

achieving the standards and expectations set by the

company. He forms marketing plans so that it reaches the

proper target audience and gets results. The marketing

manager carries on marketing surveys and positions the

product accordingly. The biggest disaster that can ever



happen to an excellent product is bad or poor marketing.

And even the worst product can be a best seller if the

marketing is excellent. The advertising and promotions is

handled by the the marketing manager. He also finds out the

suppliers of raw material by getting quotations from different

suppliers.

• Sales Manager :

The sales manager is the one who looks after the sales

of the product. On the receipt of an order from a whole

seller, retailer chain, franchisee, the sales manager makesthe arrangements for the dispatch of goods. He is the one

who decides the terms and conditions as in whether the

transportation cost will be paid by them or borne by the

company. The specific packaging needs of the wholesaler,

retailer etc is also to be considered by the sales manager.

• Finance Manager :

The finance manager holds the position of that

equivalent to a Chartered accountant. He manages all the

finances of the company. The investments, loans to be

repaid, interests received, taxes if any, everything related to

finance is handled by him.

• Human Resource Manager :

Human resource is the primary source to ensure the

quality of the final product. It has to ensure that the best of

the people are employed. The HR manager is responsible to



recruit skilled workers. He is the person in charge if the

workers are facing any problems. The safety and security of

the workers is the responsibility of the HR manager. Also the

HR manager has ensures that no injustice is done to a

worker on the base of caste, creed, sex or otherwise. Proper

treatment to every worker is to be ensured by the HR

manager. The HR manager is responsible for timely payment

of salaries.

SOURCES & APPLICATION OF

FUNDS

• SOURCES:

Partner’s Capital 48,00,000Cash credit 11,00,000Creditors 2,00,000

Total 61,00,000

• APPLICATIONS:

Fixed Assets 37,00,000Investments 1,50,000Debtors 5,00,000



Stock 10,00,000Cash in Hand/ Bank 7,00,000

Total 60,50,000

• Application and effects of loans on the business:

Overdraft is taken against the hypothecation of stock

and sundry debtors and is used for operations of the firm.

• Effects:

As the interest is charged only on the amount actually

overdrawn the interest burden is kept to the minimum. It is

charged on the profit of the firm.

• How the funds were repaid?

Funds were repaid out of the profits generated from

business within the next 2 years.



Location The manufacturing unit of the company is located at

Daman while it is operating from Mumbai. Due to the

following reasons the manufacturing unit is at Daman:

• Supply of Raw Materials:

As most of their supplies are located at & close to

Daman, they have opted to locate there. 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.

• Labor Supply:

In order to operate the machines, a fair amount of

worker is required & at Daman the labor supply is cheap as

per the marketing department’s survey. They were able to



get labor at cheaper rates, which was economical and

advisable for chair manufacturers like classic chairs hence

they have set-up their factory in Daman.

• Availability of Power:

As their machines work on electricity, continuous &

uninterrupted flow of power is very necessary. So

considering this, Daman was highly suitable.

• Proximity to the Head Office:

Daman is approx. 242 kms far from Mumbai, their

head office and hence added them another advantage.

• No transportation problem

Locating a manufacturing in Daman was highly

suitable as all the means of transportation, i.e., road, water,

air & rail, are open. This ensures quick delivery as well as

dispatching of the product.



PLANT LAYOUT

The stock room is located at the extreme right as

shown in the diagram. Adjacent to the stock room is the

compound generator. Besides the compound generator is

the grinder. The grinder is located close to the raw material

so as the time taken from carrying the raw material to the

grinder takes the minimum possible time. There are 2

grinders in our factory. The other grinder is setup just

besides the pervious one.

The grounded material is then transported through

conveyers to the 2 molding machines. There are two



molding machines in the factory. Both the molding machines

are setup one besides the other. The finished processed

chair is then transported by another conveyer to the room

where the stock of finished goods is stored.

PLANT LAYOUT OF CLASSIC CHAIRS

Production Process

The production of chairs primarily consists of four

processes. The first one is called the Compound Generation

process, the second one is called the Grinding Process, the

third one is called the Molding Process and the fourth one is

the finishing process.

• COMPOUND GENERATION

Store

RoomCompoundGenerator

FinishedGoods

Grinder

Grinder

MoldingMachine

MoldingMachine



• GRINDING

• MOLDING

• FINISHING

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 actual machine form

which the chair comes out. The powder so formed from

the grinder is brought to the molding machine wherein the

chair gets produced. It has a capacity of producing 4,000/-

chairs a day. It takes approximately 45 seconds for each

chair to come out.

Raw Materials Required• The raw materials required are :

a) Ceramic Grey



b) Mar pet Baize

c) Marble White

d) PPCP/PPHP

e) Filler

• The proportion of the raw materials is as follows :

1. 1% of master piece

2. 60% of compound

3. 15% of grinding (Grinding is the powder formed by

crushing the old or rather scrap chairs.)

Procedure

• COMPOUND GENERATION :



Firstly, based on the size of the order

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 9 laborers are required.

• MOULDING:

After the powder is obtained from the above,

it has to be taken to the molding machine. From the

molding machine the chair is produced. In this process

15 laborers are required.

• FINISHING:

Finally finishing has to be done. The chair

which comes out of the molding machine has to be

given a touch before sending it for packaging.

After this is done, the chairs are dispatched for

packaging. Defective chairs, if any, are taken to the

grinder & reduced to powder which further becomes

part of the mixture for production.



Time & Motion Study

According to the order placed, the formula is

sent to the grinder. The powder so formed is sent to the

molding machine. From this the chair is produced. The

chairs are then piled for packing.

• Time Study:

FOR ONE CHAIR-

1. 10 mins for making the formula

2. 10 mins is taken by grinder to form powder

3. 5 mins is taken to take bags of powder from

grinder to the molding machine.

4. Approx. 3.5 min. for molding

5. 20 secs for finishing



MARKETING PLAN

The company schedules and presumes its marketing

plan on the basis of location, market demand, distance

factors & connectivity, credit facility etc…

The basis of marketing starts in the locality itself. While

trying to evaluate the varied alternatives for plant location,

DAMAN [Gujarat] came out to be in the best form. Daman,

being an industrial location and that part of location is

specially declared a low tax zone that evades less expenses

and better availability of necessary requirements thereby

utilizing appropriate amount of funds for making a mark in

the market.

MARKETING MIX:

PRODUCT

• Variety and Size:

We are manufacturing 4,000 chairs a day in

3 sizes i.e. small, medium and large. This way we supply

to wholesalers in batches of 1 dozen or 2 dozen

depending on the stock. Therefore, as we manufacture 5



different colours in one particular design we are giving

them a variety of colours with different sizes.

• Quality:

As we target the lower class, middle class

and the higher middle class of the society therefore we

have a high cost quality material. Due to this, our product

is of a superior quality.

• Design and Features:

We have no such unique designs to target

the consumers, as plastic chairs are available in the same

shapes and sizes as our target is only on the price and

quality.

• Packaging:

The plastic chairs are packed in a normal

plastic bag and inserted in a cargo box and if the stock is

large then we transport through containers ensuring that

the chair remains intact and doesn’t get damaged.

• Services:

We deliver the chairs i.e. the orders as per

given by the wholesalers and is delivered to the

wholesalers doorsteps.

• Returns:



The rejected pieces are given on discount or on

sale or are recycled as per the damage occurred on the

chairs.

• Paying Mehtodology:

We accept cash as well as cheques.

• Payment Period and Credit Terms:

We give 4 weeks as credit to our wholesalers

and we receive 20 days period from material supplier.

PROMOTION

• Advertising:



In this whole process of marketing, direct

sales marketing technique shall play an effective role

definitely with the help of agencies/distributors.

For our distribution network to reach far and wide;

we advertised in local newspapers for wholesalers and

retailers in the 1st year as our main target was to attract

wholesalers and try to create awareness in the consumers

mind and then we started aggressive marketing in the

2nd and 3rd year, in the form of magazine ads/ listings on

trade portals and POP-UP ads at varied business websites.

The company proposal of setting up its own website is in

its final stages of consideration. Newspaper

advertisements in the local network shall also be complies

with.

One of the varied mode of advertisement that is

carried out by the company is the “COMPANY

BROCHURE”, comprising of the company

vision/objectives/products/quality/cost efficiency and so

on…this brochure has lent out the idea of the company,

its meaning of perfection, trust to its customers in its

natural and true form. These brochures are beensent/procured with the furniture magazines that are

published and that too on a monthly basis. This helps the

company in creating an identity.



Direct Marketing:

For direct marketing, sales and marketing

manager personally visits the wholesalers to show our

designs and pattern to them. They place orders after the

approval of any design.

We have a detailed brochure showing our design

and pattern, which we use to show our designs to the

wholesalers.



PLACE

• Coverage:

Our coverage area is entire Gujarat and

Maharashtra. We target indirectly the retail shops in

Mumbai, as our administration office is located at Mumbai.

• Location:Our workshop i.e. the manufacturing unit is in

DAMAN and the administrative office is in Andheri (west),

Mumbai. Andheri being a central location is a convenient

and the most suitable location to capture the market.

• Inventory:

Raw materials are stored in-warehouse. And as

we are taking orders and manufacturing in batches so

there is a minimal probability of stocking finished goods.

• Transport:

MUMBAI being the central place is convenient

for transportation as it is easily accessible. Also it is a

location, which is almost at equal distance from the town

and the suburb area. So it is easier and also cheap to

target both the areas i.e. the retail shops in these areas.

Thus a location at Andheri is helping in minimizing the

cost of transportation.



REFERENCE

VAJRESH SHRIYAN: A/1, XML APARTMENT,

MG ROAD,

ANDHERI (W).

(022) 26331234

INTERNET: www.google.com

BOOK: Management of Small ScaleIndustries

R.S. Mascarenhas

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