1.0 KALONGA MILLING PLANT1.1 Executive summaryThe economic success of a production firm depends upon their ability to identify the needs of its customers, to quickly create the subsequent products and to produce them at a low cost. Achieving these goals is not solely marketing, a design or a production problem, but rather a management problem involving all of these functions.Production Management involves the planning, organizing and controlling of the whole production process. The interrelation of these activities and operations involved in producing the goods and the services is called a production system.1.2 IntroductionKalonga Milling is a newly established company situated in central province of Zambia in kabwe along mukobeko road whose aim is to cut the cost of mealie meal that is used to feed inmates on behalf of the government. The plant will purchase its raw materials from the prisons farms and also buy from the farmers. The maize will be transported from the farms by the Zambia prisons service trucks to the milling plant. In order to produce quality maize meal; the organization has erected a facility for a maize mill and also has completed detailed financial, operational and business startup planning. 2.0 BUSINESS DESCRIPTION2.1 Mission statementTo effectively and efficiently provide and maintain humane custodial and correctional services to inmates and to increase industrial and agricultural production in order to contribute to the wellbeing and reform of inmates and maintenance of internal security

2.2 Business description Business name : Kalonga milling companyLocation: Along mukobeko road p.o. Box: 80926, kabwe.Phone No.: 222121 4Fax: 223916Telefax: 81428 Email: registry@zambiaprison.gov.zm Business line Mealie - Meal and Maize bran producers.

2.3 Business DocumentThe Zambia Prison Service department was established under the Act of Parliament (Cap 97 of the laws of Zambia) with a purpose of reforming and rehabilitating, providing and maintaining humane custodial services to the inmates lodged therein and increase industrial and agricultural production as a way maintaining internal security. 2.3 Objectives and goals To help reduce the cost of feeding inmates To improve industrial and agricultural activities in the service Job creation Help stabilize mealie meal prices in the long run.

3.0 PLAN OF OPERATIONSThe figure below explains the systems aspects of milling production or operations function of the organization:OUTPUTS

INPUTS

MEN MACHINES MATERIALS MONEY METHODS MANAGEMENT

B/fast mealRoller mealMaize bran

FEEDBACK INFORMATION/CONTROL

TRANSFORMATION(CONVERSION)PROCESS

The organization will receive several inputs as indicated on the left hand side of the above fig. and converts them into final products which in this case is shown on the right side of the fig. using available facilities.in the process of conversion, definitely, there will be some deviations in the products attributes like quality, size and number of units produced.Just to cope up with the pre-determined plans and policies, it is highly essential to communicate these deviations to the input stage in the form of feedback for making necessary corrections.A sample list of corrections is presented below: Tight quality check on the incoming materials e.g. maize. Adjustment of machine settings Change of tools e.g. rollers, sieves etc. Change in production plans like increase or decrease in production volumes depending on the laws of supply and demand.

3.1 ManagementManagement is one of those words which we all use and which we think we understand until we are asked exactly what it means.At its most general, management can be viewed as a process which enables organizations to achieve their objectives. The inclusion of the word process tells us that something is going on. Thus, the question, what is management? management is defined us the accomplishment of desired objectives by establishing an environment favorable to performance by people operating in organized groups.It is a truism to claim that people are organizational resources because they are the key in an industry without which the organization would be unable to deliver any meaningful product.The current crop of staff at Kalonga Milling company are qualified and have relevant knowledge on how to manage or run the milling plant. This, however, can be achieved if the workforce is motivated by allowing it perform or operate independently.The companys management will develop a policy of meeting every after a specified period of time to plan and review the activities related to the smooth running of the establishment.3.2 Day- to-day OperationsIn our day-to-day operations we will need the following personnels: The managing director who will be in charge of seeing the day to day running of the company. miller Production manager The purchasing officer who is in charge of buying the required materials for the milling plant The marketing and sales officer in charge of marketing the products on sale and seeing to it that sales are conducted in an orderly manner. The finance officer who is in charge of the funds for the business and is accountable for all cash flow statements. The human resource officer who is in charge of the human capital in the company. Casual workers Office orderlies who help out in the business.3.3 ProductionAccording to the capacity of the plant which is 80 metric tons/day (3200 by 25kgs bags), we are able to produce about 135 * 25kgs bags of mealie meal (3200/24) per hour.Hence, production per day is 135bags/hour*8 hours=1080*25kgs bags.3.3.1 Consumption rate for inmatesAll things being equal, if we are to put the number of inmates at 18000 country wide, then consumption per day is 18000*0.450=8100kgs/25kgs giving us 324 by 25kgs bags of mealie meal.Therefore, consumption per month is equal to 324*30 days=9,720 by 25kgs bags.Consumption per quarter: 9720*3 months=29,160 bags.For the year we need about 116,640*25 kgs bags of m/meal.Total production days/quarter: 29160*25kgs per quarter/1080*25kgs per day= 27 daysThis means, we have 4 months of production for the inmates and 8 months of production for the market in a year.3.3.2 Maize needed for the plant to run the whole year1000*50kgs bags of maize is required to produce about 1600 *25kgs of mealie meal.Hence, in a quarter we need about 18225*50kgs bags of maize. The total number of bags of maize required for the inmates in a year is 72,900 *50kgs bagsFor the public, we need 675 by 50kgs bags *20 days*8hrs=108,000 by 50kgs bags of maizeTotal bags needed: 108,000 +72900=180,900 approx. =181,000 *50kgs bags of maize.

4.0 EXPECTED GROWTH AND EXPANSIONWithin the first year of operations, our concentration is on one product line which is mealie meal but in future we intend to buy another maize mill machine which will enable us to increase on our product lines by adding lines for stock feed, sample meal and wheat flour.5.0 THE INDUSTRY5.1 Sector DescriptionZambian Milling Sector History - Since maize meal prices were decontrolled during the early 1990s the milling industry has enjoyed a much more competitive market structure with smaller milling operations gaining ground against prior monopolies. With the eruption of the well known political crisis in Zimbabwe many commercial farmers who lost their farms where offered land in Zambia. Two years after the settlement of the initial groups of farmers, Zambia experienced its first year of maize surplus.5.2 CompetitionThere are two categories of mills in Zambia: small scale mills that only serve their immediate communities and large scale mills that sell their product throughout Zambia. The following millings are considered the only competitors in central region: National Milling Company (NMC) is the largest milling company in Zambia. Chimsoro Milling, FVG Milling, Simba Milling.These large scale milling companies are able to spend significantly on marketing and enjoy customer brand recognition. They are located in areas of established infrastructure and have strong relationships with maize producers, grain traders and outlets.Large scale milling companies do however struggle to serve remote locations due to transportation costs. 5.3 Competitive AdvantageKalonga milling intends to take advantage of being a government entity by bidding to handle all government institutions that are in need of mealie meal. These institutions could be the Zambia army, Zambia air-force, Zambia National Service, Zambia police, government schools, hospitals etc.

5.4 Market CharacteristicsZambia in general - Maize meal is the staple diet of Southern and Eastern Africa. An average adult in Zambia will consume around 120kg of maize meal per year (Chapoto & Jayne, 2006.) Most Zambians, will eat maize meal porridge for breakfast lunch and dinner with various side dishes. In rural parts of Zambia, such that surrounds kabwe, a bag of maize meal means food security for an average family for two weeks and is their first priority when receiving a salary.6.0 MARKETING AND MARKET PENETRATIONMarketing is a management process responsible for identifying, anticipating and satisfying customers requirements profitably. Marketing on the other hand is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and freely exchange products and services of value with others. 6.1Target marketThis is the act of selecting one or more market segments to enter. This, however, involves evaluating each different segment created. Market segmentation can either be by region, sex and age to mention but the few. To achieve this as Kalonga Milling Company we intend to target central region as our market segment. Central region at the same time will be used as a pilot project and once our goods or products have been appreciated or accepted by our customers out there, then we will be able to extend to other regions such as Lusaka and Copperbelt regions respectively. If we are to be effective in this area we shall create sales outlets in all the districts of central region namely Kabwe, Chibombo, Kapiri Mposhi, Mkushi, Mumbwa and Serenje.In terms of management of these outlets, we shall identify officers within the system who have done certificates and diplomas in either marketing or business management courses to work as sales personnel in these respective sales depots or outlets.6.2 How Do We Create DemandMarketing techniques are the tools used by the marketing department. The marketing department will set out to identify the most appropriate techniques to employ in order to make profits. These marketing techniques can be used as factors that would create demand for the companys products. As Kalonga milling company there is need to create demand for our products through the use of marketing techniques and these include:6.3 AdvertisementAdvertising is an important marketing tool which is used to make products and services more desirable and hence increase sales and profits. Any form of publicity is advertising. There are two main forms of advertising although in practice the two are inter-related. The informational aspect of advertising involves providing information about products, services, or about important issues. For example, the government provides information about the dangers of cigarette smoking, which is an example of informative advertising. Persuasive advertising goes further and uses a persuasive message, for example by: showing a famous personality (e.g. Christopher Katongo) using the product comparing the advantages of one product with anotherIf we are to penetrate the market as a company we need to invest in advertisement. Its through advertisement that we can create awareness for our products. To achieve this, we recommend that the department of marketing be assigned with a vehicle to carry out daily activities of promoting the products. As we move around we shall employ both informational and persuasive advertising aspects so as to coax as many clients as possible.6.4 PromotionAdvertising is just one way of promoting a product. Promotion is the business of communicating with customers. There are a number of ways of promoting products and services, including: in-store promotion e.g. giving away free samples in a supermarket publicity in the media, competitions, and sponsorship PR - public relations activities - i.e. presenting the public image of a company to a wide audience presenting products in attractive packaging Creating an attractive brand for a product.In view of the above we recommend that we run promotions for our products by way of coming up with a competition, say if one buys 5 by 25kg bags of breakfast meal such a person shall be entitled to a free 10kg bag of breakfast.

6.5 PricingPrice stands for the amount of money that a customer has to pay for a product, this may also include the provision of price list, discounts, allowances, payment periods and credit terms. In achieving this, as Kalonga Milling we need to be flexible as we set prices for our products. What we should bear in our minds as Kalonga Milling Company is that we are a new player or entrant into the market. We therefore, recommend the market penetration pricing policy. This policy is a policy of low prices when the product is first being launched to the market so as to gain sufficient penetration into the market.6.6 How Do We Service Demand There are a number of factors that forms the basis of servicing demand. When you create demand for the particular product there is need to service that demand, as such Kalonga Milling Companys products are not an exceptional.The following are the factors of servicing demand:-6.7 Effective Warehousing ManagementIt is important therefore, that a separate storage shed is built specifically for the finished goods or products. This will enhance effective storage of the finished product and easy accountability of the same goods. Unlike the idea of having storage shed to cater for both maize stocks which are raw materials and mealie - meal which are finished goods. The separate storage shed should have a stores officer who will be responsible for receiving goods from the production centre and issue out to various places of need.

7.0 TRANSPORTATIONTransport should be made available so as to easy the movements of raw materials to the production center and the finished goods from the production center to the sales outlets. 8.0 SWOT ANALYSISIt is a decision making model which help managers to analyze the strengths, weaknesses, opportunities and threats of a business or given situation. Based on the analysis managers are able to make sound decisions. Below is the analysis for Kalonga Milling Plant.SWOT ANALYSISSTRENGTHWEAKNESSES

Government support Excess capacity than internal market( Inmates) Ability to attract qualified and experienced manpower. Able to increase product lines. New in the Milling Industry. Weaker brand name.

OPPORTUNITIESTHREATS

Comparative advantage to supply government institutions. Potential to penetrate big supermarkets like Shoprite and Spar. Existing players in the Milling Industry Political interference sometimes could be negative to the business.

KALONGA MILLING PLANT

PROPOSED BUDGET FOR THE YEAR 2014

No.DESCRIPTION/ITEMQTYPRICE/UNITYTOTALCUMM TOTAL

PRODUCTION

KKK

1RAW MATERIALS (MAIZE)181,000 by 50Kg8014,480,000

14,480,000

2PACKAGING MATERIALS

(PRINTED BAGS)300,0003900,000

15,380,000

3SEWING MATERIALS

(COTTON)50020100,00015,480,000

LOGISTICS

1TRUCK(HOSE)4500,0002,000,000

17,480,000

2INTERLINK TRAILERS4300,0001,200,000

18,680,000

3LIGHT TRUCKS2150,000300,000

18,980,000

4FORD RANGER/NISSAN H.B5180,000900,000

19,880,000

5MINI BUS1120,000120,000

20,000,000

6FOLK LIFTERS2200,000200,000

20,200,000

7FUEL/LUBRICANTS300,000300,000

20,500,000

8PALLETS1000350350,000

20,850,000

9MAINTENANCE/SERVICING50,000

20,900,000

10STAFF TRAINING100,000

21,000,000

0FFICE OPERATIONS/EQUIP

1FURNITURE15,000

21,015,000

2COMPUTERS104,00040,000

21,055,000

3PRINTERS56003000

GRAND TOTAL21,058,000

MILLING PLANT MANAGER

Proposed organization Structure

PROCUREMENTMANAGERMKETING MANAGERA/CTANTP/DCTIONMANAGERH.RMANAGER

STORES CLERKMKETINGCLERKSASS. A/CTANT

ASS. H.RMANAGER

MAINTENANCEMANAGERHEADMILLERQ CONTRLMANAGER

SHIFT MILLERS

electfittersA/mechS/visorProcess control/matenaS/visorm/terialinspec/testS/visorLab

S/ manR/manDriver

LoadersCleaners

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