ms bar and ms flat small scale industry project report for mechanical branch

7/29/2019 Ms Bar and Ms Flat Small Scale Industry Project Report for Mechanical Branch

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Entrepreneur

Entrepreneur is the owner of the business who contributes the capital and bears the

risk of uncertainties in business life. He organizes, manages, assumes the risks and takes

the decision about the enterprise. He takes all the steps to establish undertaking,coordinates the various factors of production, and gives it a start. He should be able to

evaluate, business, opportunities, together all the necessary resources and ensures the

success of the enterprise. Entrepreneur views are broadly classified into three groups:

1. Risk bearer

2. Organizer

3. Innovator

Entrepreneur as a Risk Bearer:

According to Richard Cotillion, a rich man living in France was the first who

introduced the term entrepreneur as an agent who buys the factory production at certain

price in order to combine them into product with a view to selling it at certain price. He

illustrated the framer who pays out contractual income, which is certain to landlord,

labour and sells at price that is uncertain. Thus they too are risk bearer agent of

production. Uncertainty is defined as the risk which cannot be insure against and

incalculable.

Entrepreneur as an Organizer:

According to Jean-Baptize, Entrepreneur is a function of co-ordination,

organization and supervision. According to him, an Entrepreneur is one who combines

the land of one, the labor of another, capital of one another and thus produces product. By

selling the product in the market he pays interest in capital, rent on land, wages to labor

and what remains in his profit.

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Entrepreneur as an Innovator:

According to Joseph who has introduced new combination of factors of production

said, it may occur in any one of the following five forms:

1. The introductions of new product in market.

2. The instituting of new production technique, which is not yet tested by experience

in the branch of manufacture concern.

3. The opening of new market into which the specific product has not previously

entered.

4. The discovery of new source of supply of raw material.

5. The carry input of new form of organization of any industry by

creating of monopoly position or breaking up of it.

Characteristics of an Entrepreneur:

1. Hardworking, willingness

2. Desire of high achievement

3. Highly optimistic

4. Independence

5. Foresight

6. Good organizer

7. Innovative

8. Energetic

9. Flexible

10. Knowledgeable

11. Resourceful and should be able to take initiative.

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Functions of Entrepreneur:

1. Idea generation

2. Determination of business objectives

3. Product analysis and market research

4. Determination of form of ownership of organization

5. Completion of promotion facilities

6. Raising the necessary funds

7. Proper use of machine and material

8. Recruitment of men

9. Undertaking business funds

10. To manage business and take decision, whenever required.

11. To study the market and to take advantage from opportunities.

Entrepreneur Development:

The myth that entrepreneurs are born not made no longer holds good. Entrepreneur

characteristic can be developed through entrepreneur development program. The duration

of training under this program ranges from 7 days to 3 months. The basic objectives of

entrepreneur development program can be started as:

1. To develop and strengthen their entrepreneurship quality.

2. To analyze the environment relating to small-scale industry.

3. To select project and product.

4. To formulate the project.

5. To know the influence support needed for launching enterprise.

6. To ensure providing self-employment to a number of young men and women.

7. To acquire the basic managerial skills.

The biggest advantage of entrepreneur development program has bought about is creating

a social awareness in the country. It has provided new paths and carrier choices to large

number of persons in the systematic manner. It has bought in fresh thinking and

attitudinal changes amongst families who are traditionally from non-business

background.

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Basis & Presumption

The machinery and the equipment are of a particular type and are available in the

open market. The cost indicated against the raw material, utilities and other expenditures

are approximate and are on the basis of the local market.

Role of Small Sector:

The contribution of this sector is c\considerably to Indian economy. About 204

million units are provided employment to over 14 million people. This sector is also

contributing about one third of the countrys export, today central and state governments

are providing all type of help to interested persons to solve their problems regarding

small scale sector. Small scale industries plays dynamic role in acerbating the rate of

industrial growth and attaining economic prosperity of nation. Therefore in a developing

country like India small-scale industries are much importance for building up of national

economy.

Advantages of Small Scale Industries:

1. These create immediate and permanent employment in large scale at relatively

small capital cost.

2. These can immediately meet a substantial part of the increased demand for

consumer goods.

3. These offer a good method of ensuring more equitable distribution of national

income.

4. These provide more chances of work and income.

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Objectives of Small Scale Industries:

1. Employment generation

2. Equitable distribution of national income

3. To meet increased demand

4. Decentralization

5. Better utilization of services

6. Balanced economic development

7. Self employment

8. Labor intensive and capital saving

9. With small investment production can be easily started

10 Highly prcised machines and modern techniques is not needed

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INTRODUCTION TO SSI

The SSI (Small Scale Industries) today is immense for the growth of country. Small

Scale Industries are the industries which are run with the help of hired labour and

which also use some simple machine and power.

The investment scale in the industry varies from 5 lakhs to 4 crore for the fixed assets.

Irrespective to number of workers engaged is called small-scale unit.

In India these types of industries are promoted to meet with the problems of excess

population and unemployment so the government of India promotes entrepreneur to

set up small scale industries by aiding him by giving loans, subsidiaries, land,

guidance etc. The strategy adopted by the government, is:

1. Public entrepreneurship should remain confirmed only to those industries and

sectors where private enterprise, individual or corporate, is generally not attracted.

Existing public entrepreneurship be improved through better management and by

putting relatively greater emphasis on research and development. There is need to

streamline the R&D wing of public sector enterprises.

2. All possible efforts are made very seriously (not carefully) for the

development of an industrial culture. It should be realized that the central core of

entrepreneurship is the motive force since by its very nature, entrepreneurship

implies positive action and initiative, motivated individuals with the right kind of

combination of abilities and attributes can pursue their goal with unremitting

courage and enthusiasm.

3. There is need to develop management education and industrial training.

4. The development of backward regions and areas constitutes a new challenge,

programs for their development be drawn up and should be effectively

implemented.

5. Adequate measures are a must for mobilizing and fostering the entrepreneurial

talent in the country. In the context, it should be realized that entrepreneurs are not

the gift of a particular class.

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6. Economic administration by the state should be improved and made more

effective so that economic policies may fully achieve their objectives in the

overall interest of the economy.

7. Financial institutions should provide adequate and timely credit and technical

assistance, especially to the small and medium sized enterprises. They may also

impart knowledge about the needs of the economy and they should file their

massive data in terms of growth of new entrants or entrepreneurs in the field of

industry.

MARKETING MANAGEMENT IN SSI:

What is marketing ? Why it is needed? Are such questions that are to be

answered for up liftment of SSIs.

According to P.Felton marketing can be described as

A cooperate state of mind that insists on the integration and coordination of all

marketing functions which in turn answered with all other cooperate functions, for the

basic objective of producing maximum long range corporate profits.

Studs in marketing management

1. Product Planning

2. Sales Forecasting

3. Pricing Policy

4. Distribution Policy

5. Role of advertising (personnel selling)

6. Quality

1. Product planning:

Product planning may be defined as the act of marketing out and supervising

the search, screening, development and commercialization of new products,

modification of existing lines.

Product planning involves three important considerations

1. The development and introduction of new ideas

2. Modification of existing lines as may be required in terms of changing

consumers need and preferences.

3. The discontinuance of elimination of marginal or profitable products.

Products can be classified as:

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1. Consumer Products

2. Industrial Products

3. Defense Products

2. Sales forecasting

A sales forecast is an estimate for the amount or unit sale for a specified

further period under a proposed marketing plan or programme.

As defined by the American Marketing Association It is an estimate of sales in

dollars or physical units for a specified further period under a proposed marketing or

programme under an assumed set of economic and other forces outside the unit for

which the forecast is made.

Marketing of proper sales forecast requires an assessment of

1. The outside uncontrollable likely influence the company sales.

2. The internal proposed changes in the marketing strategies and tactics

of the company, which are likely to affect the sales.

Sales forecast can be for a specified product line or it can be for a market as a whole

or for any portion of it. According to the time period, the sale forecast can be divided

in three types-

1. Short range forecast Which generally extended from a few weeks

to about six month or at most one year in future. This is mostly done by

companies day-to-day forecasts for their production control needs and to plan for

long time financial needs.

2. Medium range forecast- Which extends from one year to about four

years into future.

This type of forecasting is important for

1. Estimating profits, budgeting expenses etc.

2. Determining dividend policy.

3. Decide range of maintenance expenditure.

4. Determining schedule of operation.

It is useful for the following purpose-

1. Estimating inventory requirement

2. Providing adequate shipping facilities

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3. Assessing production worker requirements

4. Estimating working capital needs

5. Setting production runs for each products

3. Long range forecast:

Extending to at least five years into future and in case of really large organization

extended over a longer period up to ten years or even more.

It is useful in following ways-

1. Anticipating the magnitude and timing of capital expenditures required new

facilities in the future.

2. Determining probable trends and range of cash inflows from sales.

3. Estimating companies long-range personnel needs.

4. Highlighting future problems.

3. Pricing policy:

Pricing is a very critical decision pricing decisions are not easy to make.

Hence sound-pricing policy must be adopted to ensure that the organization secures

satisfactory profits. For pricing decision a marketing manager has to be familiar with

economic concept useful in pricing decision. He has to consider various pricing

factors which influence pricing apart from cost such as the customer characteristics,

the economic product characteristics, competitive environment and governmental

control wherever applicable the price of the product materially effect the demand for

it as well as the organization competitive ability for expenditure if the quality of

product is to be improved the may be possible only if the customer are willing to pay

a higher price for it. Besides, if the product is not properly priced there might be

reluctance from the channels of distribution.

4. Distribution strategy:

Distribution may be defined as an operation or a series of operations, which

physically bring goods manufactured or produced by only particular manufacturers

into the hands of the final consumers to the users.

A distribution strategy consists of distributing or sub-dividing the total products of a

manufacturer to various specific markets. There may be state market, a national

market or even a world market.

5.Advertising:

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To counter the markets at national and international level the government of India set

up various institutes like: -

1. Export credit guarantee corporation ltd. (ECGC)

2. State trading corporation (STC)

3. Trade development authority

4. National small industries corporation (NSIC)

PROCEDURE TO START A SMALL SCALE INDUSTRY

Starting of a small-scale industry is not a very easy task. At the same time it is not

difficult so, if different factors are considered before taking a decision to start it. For

starting, the first and most important work is to select a suitable site and then to make

a proper scheme and yet approved.

Procedure to start small scale industry consist of following important steps-

1. Getting Familiar:

An entrepreneur desiring to set up an industry must first formulate

comprehensive setting the industry for its success. For this, he should be confident,

enthusiastic and realizing. He should therefore make himself familiar with the

permanent policies and procedures, assistants and facilities he can get from whom and

how.

Selection of Industry

Selection of a suitable place for an industry is the key to success. Different

factors for the selection of the site are availability of the land, labour, raw material,

power and transport facilities and nearness to the market.

Type and size of industry should be decided by the market study, quality and

price of other product with which proposed item be in competition. Demand and

supply of position of the product should be before selecting the type of industry.

Owner should make himself conversant with all acts, rules of central and state

governments etc.

Preparation of Scheme:

After deciding the product to be manufactured and the place of industry, a

detailed scheme is prepared. This scheme include number of machines, their

approximate cost, requirements of land and building, number of workers and other

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staff, their salaries and estimated production cost, expected profit, proposed factory

layout and plant layout.

SWOT-Analysis

Introduction:

Environmental opportunities are only potential opportunities unless the organization

can utilize resources to take advantage of them and until the strategic leader decides

that it is appropriate to pursue the opportunity. It is therefore important to evaluate

environment opportunities in relation to the strengths and weaknesses of the

organizations resources, and in relation to the organizations resources, and in

relation to the organizational culture. Real opportunities exist when there is a close fit

between environment, values and resources. An evaluation of an organizations

strengths and weaknesses in relation to environmental opportunities and threats is

generally referred to as a SWOT analysis. The following report will look closely into

the SWOTs concept, its main aspects, and criteria for successful and effective SWOT

analysis.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats.

Occasionally, it may also be found as a WOTS up analysis or the TOWS analysis. A

SWOT analysis is a planning tool used to understand the Strengths, Weaknesses,

Opportunities, and Threats involved in a project or in a business. It involves stating

the objective of the business or project and identifying the internal and external

factors that are either supportive or unfavourable to achieving that objective. SWOT

is often used as part of a strategic or business planning process, but can be useful in

understanding an organisation or situation and decision-making for all sorts of

situations.

The concept :

Any organisation undertaking strategic planning will at some point assess its own

strengths and weaknesses. When combined with an inventory of opportunities and

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threats in the organisations external environment, the organisation is effectively

making a SWOT analysis, that is it is establishing its current position in light of its

Strengths, Weaknesses, Opportunities and Threats.

There are several ways of graphically representing the SWOT analysis matrix or grid.

Examples are shown later in this factsheet.

While at first glance the SWOT looks like a simple model and easy to apply,

experience shows that to do a SWOT analysis that is both effective and meaningful,

requires time and a significant resource. It requires a team effort and cannot be done

effectively by only one person. The SWOT methodology has the advantage of being

used as a 'quick and dirty' tool or a comprehensive management tool, and that one (thequick) can lead to the other (the comprehensive). This flexibility is one of the factors

that has contributed to its success. The term SWOT analysis is in itself a curious

term, for a SWOT is not an analysis in itself, but a number of elements when used

together form a valuable framework for analysis. It is essentially a summary of a set

of previous analyses even if those were just 15 minutes of mini-brainstorming with

yourself in front of your computer although this approach is not recommended! The

analysis, or more correctly interpretation, comes after the SWOT summary has been

produced.

History :

The SWOT analysis technique is credited to Albert Humphrey who led a research

project at Stanford University in the 1960s and 1970s using data from leading

companies involved in long range planning processes. The original goal was to

identify why corporate planning failed. Humphrey created a team method forplanning originally called SOFT analysis (Satisfactory, Opportunity, Fault, Threat)

which was used by organisations like WH Smith who made it part of their long range

planning programme for almost 20 years.The thinking behind the tool was:

What is good in the present is Satisfactory.

What is good in the future is an Opportunity.

What is bad in the present is a Fault.

What is bad in the future is a Threat.

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Humphreys work has developed the implementation to use the SOFT in the context

of six categories which provide a framework by which issues can be developed into

actions and managed using teams:

Product: what are we selling?

Process: how are we selling it?

Customer: to whom are we selling it?

Distribution: how does it reach them?

Finance: what are the prices, costs and investments?

Administration: how do we manage all this?

SWOT / TOWS ANALYSIS:These can be defined as follows and can of below type for industry or organization:-

STRENGTH:

Determine an organisations strong points. This should be from both internal and

external customers. Strength is a resource advantage relative to competitors and the

needs of the markets a firm serves or expects to serve. It is a distinctive competence

when it gives the firm a comparative advantage in the marketplace.

WEAKNESS:

Determine an organisations weaknesses, not only from its point of view, but also

more importantly, from customers. Although it may be difficult for an organisation to

acknowledge its weaknesses it is best to handle the bitter reality without

procrastination. A weakness is a limitation or deficiency in one or more resources or

competencies relative to competitors that impedes a firms effective performance

OPPORTUNITIES:

Another major factor is to determine how organisations can continue to grow within

the marketplace. After all, opportunities are everywhere, such as the changes in

technology, government policy, social patterns, and so on. Key trends are one source

of opportunities. Identification of a previously overlooked market segment, changes in

competitive or regulatory circumstances, technological changes, and improved buyer

or supplier relationships could represent opportunities for the firm.

THREATS:

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No one likes to think about threats, but we still have to face them, despite the fact that

they are external factors that are out of our control, for example, the recent economic

slump in Asia. It is vital to be prepared and face threats even during turbulent times. A

threat is a major unfavourable situation in a firms environment. Threats are key

impediments to the firms current or desired position. The entrance of new

competitors, slow market growth, increased bargaining power of key buyers or

suppliers, technological changes, and new or revised regulations could represent there

threats to a industrials firms success.

TABLES & DIAGRAM:

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How to Write a Good SWOT Analysis

In order to write a good SWOT the following criteria must be taken

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Make your points long enough, and include enough detail, to make it plain why a

particular factor is important, and why it can be considered as a strength, weakness,

opportunity or threat. Include precise evidence, and cite figures, where possible;

Be a specific as you can about the precise nature of a firms strength and weakness.

Do not be content with general factors like economies of scale;

Avoid vague, general opportunities and threats that could be put forward for just

about any organisation under any circumstances;

Do not mistake the outcomes of strength (such as profits and market share) for

strengths in their won right;

Improvements is not the same as strength do not confuse the two.

Avoid contradicting yourself in the course of the analysis, by having strengths and

weaknesses that are essentially different aspects of the same strategy of resource.

Come to a reasoned conclusion about whether the good points outweigh the bad ones.

Situational analysis SWOT ANALYSIS

Translating SWOT issues into actions under the six categories

1. Product (what are we selling?)

2. Process (how are we selling it?)

3. Customer (to whom are we selling it?)

4. Distribution (how does it reach them?)

5. Finance (what are the prices, costs and investments?)

6. Administration (and how do we manage all this?)

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PROJECT AT GLANCE:

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1. Name MAHALAKSHMI INDUSTRIES Pvt. Ltd.

2. Name of Director Manoj Sihag

3. Address New Model Town Ext., Hisar

Plot No.: C-39,

4. Date of incorporation 20-12-2008

5. Size Small scale industry

6. Product MS bar and MS flat

7. Marketing aspects Widely useful for engineer, railways, window

grills, and collapsible gate manufacturers.


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INTRODUCTION

NAME OF PRODUCT-MS bar and MS flat

They manufacture, export and supply a range of Hot rolled steel and structural steel

products. Their products are manufactured from the superior quality mild steel and

stainless steel which are procured from the leading vendors. We offer customization

facility to our valuable customers who seek for perfection. Our wide array of products

includes:

M.S. Plates

We offer MS bars which are manufactured with great precision and undergo stringent

quality checks. These are highly beneficial for engineer, railways, window grills, andcollapsible gate manufacturers.

M.S. Squares / M.S. Flats

The M.S. squares, M.S.Flats offered by us are available in various thickness and sizes.

These are offered to serve various industrial requirements and are available at industry

leading prices.

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Purpose:

Mild steel bars are used for tensile stress of RCC (Reinforced cement concrete) slab

beams etc. in reinforced cement concrete work. These steel bars are plain in surface

and are round sections of diameter from 6 to 20 mm. These rods are manufactured in

long lengths and can be cut quickly and be bent easily without damage.

These bars minimize slippage in concrete and increase the bond between the two

materials. Deformed bars have more tensile stresses than that of mild steel plain bars.

These bars can be used without end hooks. The deformation should be spaced along

the bar at substantially uniform distances.

To limit cracks that may develop in reinforced concrete around mild steel bars due to

stretching of bars and some lose of bond under load it is common to use deformed

bars that have projecting ribs or are twisted to improve the bond with concrete. These

bars are produced in sections from 6 mm to 20 mm dia.

In addition the strength of bonds of deformed bars calculated should be 40 to 80 %

higher than that of plain round bars of same nominal size. And it has more tensile

stress than that of plain round bars of same nominal size. Cold twisted deformed

(Ribbed or Tor Steel Bars) bars are recommended as best quality steel bars for

construction work by structural Engineer.

Production: We manufacture 1000 tons per annum.

Location of unit: New Model Town Ext., Hisar

Plot No.: C-39,Haryana

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SUPPLIERS LIST

1. Riyag Steels Co.

Rohtak

2. Lakshmi SteelsHisar

BUYERS LIST

1. Goyal Steel WorksHisar

2. Vijay Iron TradingHisar

3. Mahesh Steel ShopRohtak

4. Rageev tender worksRohtak

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PROCESS FLOW DIAGRAM

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Rolls

Floor

Cupola Furnace

Shearing Machine

Raw Materials (Scrap)

Shearing

Cutting byScissors


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MACHINES USED

Name No.

1. Lathe machine 3

2. Drill machine 2

3. Grinder 3

4. Cupola 1

5. Coal meshing machine 1

6. Shearing machine 1

7. Welding Machine 4

SPECIFICATIONS OF THE PRODUCT

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Product Specification

1. Mild steel bar 8 mm

10 mm

12 mm

16 mm

20 mm

2. Mild steel flat 20-5 mm

20-3 mm

25-5 mm25-3 mm

25-6 mm

25-8 mm

COST ESTIMATION

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Land

Land measuring 1550 sq.yard at N.M.T. Ext, Hisar Rs. 45,00,000

Machinery & Equipment

S. No. Particulars No. Rate (Rs.)

Amount(Rs)

1. Lathe Machine 1 1.5lac

2. Lathe Machine 1 1.7 lac

3. Shaper 1 0.9 lac

4. Drill Machine 1 0.4 lac

5. Grinder 1 1 lac

6. Cupola 1 2.5 lac

7. Shearing Machine 1 1.2 lac

Total 920000

Cost of Raw Material (Per Month)

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S. No. Particulars Quantity Rate Amount

(Including Transportation)

1. Old plate scrap 50 ton 26000/ton 1300000

2. Ingots 50 ton 28000/ton 1400000

Total 2700000

Staff & labour (per month)

S. No. Description No. Salary

(Rs.)

Total

1 Foreman 2 8000 160002 Skilled workers 6 5000 30000

3 Testing Person 4 4000 160004 Sales Man 2 8000 16000

5 Helpers 8 4500 36000

6 Peon-cum-watchman 2 4000 8000

Total 34 122000

Other expenditure and utilities (per month)

S. No. Description Amount (Rs.)

1 Power and water 1 lac

2 Consumables & Tools 0.1 lac

3 Postage, Stationary & Telephone 0.04 lac

4 Transportation & other expenses 0.4 lac

Total 1.54 lac

Working Capital (per month)

S. No. Description Amount (Rs.)

1 Raw material 2700000

2 Staff and labour 122000

3 Other expenses 154000

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Total 2976000

Total capital investment

Rs.

1 Machinery and equipment (Non-recurring expenditure) 920000

2 Working capital for three months* (Recurring expenditure) 8928000

TOTAL 9848000

* Revenue is returned after three months

Cost of production (per annum)

Rs. (in lac)

1 Recurring expenditure 35712000

2 Interest on capital at 11 % 2928320

3 Depreciation on machinery & equipment @10% 92000

TOTAL 39732320

Cost of Project

Rs. In Lacs

Sr.No. Particulars Amount

1. Land (1550 Sq.Yard) 45

2. Building 30

3. Machinery 9.2

4. Margin Money for Working Capital 6.7Total 91

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Total Sales (per annum)

1080 ton @ Rs. 38000 = 41040000

Calculation for Scrap (per annum)

5% of plate scrap = 5ton

Scrap sold at 21000 per ton = 21000 x 5 x 12

= 1260000

Profitability per annum:

Profit = Total sales Cost of production

= 41040000 39732320 = Rs. 1307680

Total profit after selling scrap =1307680 + 1260000 = Rs. 2567680

percentage profit on sales = (2567680/41040000)x100 = 6.25%

BREAK EVEN POINT ANALYSIS

BEP = annual fixed cost / (sale price per ton unit variable cost)

Fixed cost (per annum)

Rs.

1. Interest = 29283202. Depreciation = 92000

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3. 40% on salary = 585600

4. 40% on other expenses = 739200

5. Insurance charges on m/c = 16100 @ 1.75%

Total = 4361220

Break even point,

BEP = annual fixed cost / (sale price per ton unit variable cost)

BEP = 4361220 / (38000 - 2042545)

= 884.02 ton/annum

i.e. we have to produce at least 884 ton per annum to achieve Break Even Point. More

production than 884 tons will lead to profit to company.

CONCLUSION

Now the net profit (p.a), profit ratio & breakeven point are up to our expectations. So

we can start a S.S.I for manufacturing of coir sheet. In the case that the net profit,

profit ratio, rate of return, & breakeven point are not according to our expectations we

can choose dropping the idea & plan for manufacturing a new product which would

include making a new techno-economic feasibility report.

ms bar and ms flat small scale industry project report for mechanical branch

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