SUBMITTED TO: Prof.

Veena
Prasad

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. TOPIC PAGE

NO. 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 them
better 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

(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 to
manufacture 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 makes
the 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 48,00,000

Cash credit 11,00,000
Creditors 2,00,000
Total 61,00,000

• APPLICATIONS:

Fixed Assets 37,00,000

Investments 1,50,000
Debtors 5,00,000
Stock 10,00,000
Cash 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.

Finished
Goods

Grinder
Molding Store
Machine
Compound
Grinder Room
Generator

Molding
Machine

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
 • 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:
 Any defected or rejected pieces are taken
back from the wholesalers and a new one would replace
the same.

PRICE

• List Price:
Rs.250 per chair

• Discounts:
We give 5% as trade discount to the
wholesalers. The samples, which we made, are
also sold at discounted rates.
 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 been
sent/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 Scale

Industries
R.S. Mascarenhas