Production Operation Management

Final Project
Submitted to Sr. M Ali

Excellence Marble Factory

Final Project
Submitted to: Submitted by:
Abdul-Rehman Malik (11438) Khurram Shahzad (11462) M Amir (11483)

Mr. M Ali

Subject:

Production Operation Management

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MBA(P) Section

4th Semester B

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Topic

Page. No.

1. Acknowledgement .. 2. Executive Summary . 3. Introduction . .. .. 4. 5. 6. 7. 8. 9. Vision .. Business Plan Raw Material Procurement . Types of Marble. Vender..... Product Categories after process Analysis of Business Operation Feasibility Report Feasibility Chart . SWOT Analysis.

10. Production Process 11. 12. 13. 14.

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Acknowledgement

This dissertation would not have been possible without the help and blessing of ALMIGHTY ALLAH and after that generous guideline of our the most respected Teacher Sr. M Ali , Lecturer at Superior University whose sincerity and encouragement we will never forget. Mr. M Ali has been proved source of inspiration for us; in the result this project is completed.

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Executive Summary

Assignment is givento us in order to enrich us with practical knowledge about how industries manage their operations. A demonstration is done by developing full industry set up. We selected Marble industry for particular purpose due to number of reasons, firstly its contribution in overall economic GDPs , secondly particular set up could be installed within the budget. Market survey was done and consulted few industry owners. With their cooperation we had complete insight in mention industry

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Introduction
Marble is the sixth largest mineral extracted, the others being coal, rock salt, lime stone and china clay. Since 1990 mining & quarrying has consistently contributed0.5% to the GDP. According to the industry estimates 1.37 million tons of marble were produced while 97% of it was consumed locally. The directory of Industrial establishments 2007 records 175 marble factories with investment ranging from a lowest 4 million to a highest 20 million in Buner. The average number of employed people in unit factory is less than 10. The range of output per factory varies from 15000 square foot to 40,000 square foot per month. Looking at the available data, it is easy to infer that most of the factories have mushroomed towards the first five years of this decade suggesting an intensified investment trend in the sector. Cluster mapping of Pakistan's marble sector (NWFP), 2002

Swabi Swat Khyber Agency Malakand

0.38 million tons 25 million tons 1 million tons 1 million tons

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Name of Factory Excellence marble industry Vision of Factory

Increasing the Beauty of house with excellence touch

Business Plan
The project will be run to produce the best quality Marble product . Special care and quality control will be observed in finishing the Marble product in order to set targets to be achieved. This will maximize the profit. The selection of Raw Material will be of immense importance. Experts will be hired to purchase appropriate Quality Raw Material.

Raw Material Procurement

As far Marble types are concerned industry is processing sourced from Swabi, Swat, Khyber Agency and Malakand mines from NWFP.

Baluchistan
china Verona (royal beach)
.

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Bouti Cina
Bouticena Flower Bouticena Royal fancy Bouticena Cream

Tippi Tavera
Black& Gold Golden Brown Golden

NWFP
Badel

Ziarat White

Ziarat Grey Jet Black Silky Black

Imported
Ten Brown
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Excellence Marble Factory Galaxy Black Star light Baltic Brown Sea Pearl Blue Pearl

Vender
Zaid Khan Marbles in SwatNWFP

PRODUCT CATEGORIES AFTER PROCESSING

At present 90% of the capacities are utilized for the production of tiles while 10% goes for slabs and other handicrafts.

Slabs
Slabs are large semi processed sheets of marble with varied sizes and thickness of 2 inches. Slabs are cut on gang saws from large blocks of marble. This product is used for tabletops, kitchen tops, wall facing, flooring and other purposes. Price of slab varies with the quality of material and the size of the sheet.

Unpolished Tiles
These are available in different sizes, colors and shades. These tiles are polished either at the factory or after application at the desired surface. Main attraction for the consumer for this product is its low price. Unpolished tiles are sold comparatively cheaper than the polished ones to individuals and other small processing units from where they are polished and sold to market.

Polished Tiles
These are the fully processed tiles sold in the market at competitively higher prices, which depend on structure color & shades.

Decorative Items (Antique)

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Excellence Marble Factory Decorative items including, pillars, fire places, railings, flower vase, ashtrays, tabletops, office table sets, Fountains and many other similar items are produced. Prices of these items vary from product to product, the quality of craftsmanship, and stone used.

Marble Chips
Marble Chips are tiny pieces normally of crushed marble used in flooring and facing inthe construction industry. These are processed on completely different machinery set up that includes stone crushers of various grades. They vary in size from large grains of 1 inch to 0.5 centimeter, depending on the choice of the consumer.

Production Process
Process varies according to customer demand, flooring involves two (Cutting& Polish) process while stairs and kitchen requires one additional process (Shaping accordingly)

PROCESS LAYOUT (FLOW) 1)Section

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Excellence Marble Factory Generally, Raw material is purchased in from Marble wholesalers. Marble is divided in Slaps of 2 and 1 inches or according to the production demand. Section Machine is used for particular purpose. Marble is sectioned with the help of section machine and a sharp continuous flow of water. Small water pump is attached to create water flow over section machine. 20 Horse power motor is attached with the machine in order to get high result.

2) Realignment
After sectioning, Marble is realigned. Cutter Machine used for Alignment purpose. Setting of slaps corner in order to develop proper shape and cut the extra corners.

3) Cutting
The next process after Realignment is to cut the marble into tiles for flooring purpose by cutter machines. The process involves two things to be completed, Cutter machine and a continues flow of water. The process is more similar to sectioning but deference is only that it contains comparatively small blade and motor 15 Horse Power, it is comparatively very sensitive point because marble is cut in 1 or might be less than 1 inches. Master employee haired for it in order to ensure less wastage that can causeslowest profitability.

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4) Polish
Polishing is a very important process in marble finishing; it is the process of refining the marble towards final shaping. Polish machine is used for it. That process involves three steps at a time, Polish machine, polish chemical and Water. In order to reduce wastage of water small water pump is used that makes a cycle of water supply. Chemical is available locally and also can be prepared; one polish machine has a capacity to polish more than 2200 feet marble in eight hours.5 horse power motor is used for frequent work.

5) Granding
That is a basically, a manual work, and essential part of productions operation. Done by a grander machine, especially when stairs and kitchen works are to be done. Decorative items are prepared with Granding machine after cutting marble in required pieces. pillars, fire places, railings, flower vase, ashtrays,

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Excellence Marble Factory tabletops, office table sets, Fountains and many other similar items are to be prepared in particular step.

ANALYSIS OF BUSINESS OPERATIONS:

BUSINESS STATUS:
Almost all of factories are working as sole proprietorship however there are very few examples in which units have advanced after starting of operations as sole to partnerships.

FINANCE:
All of the businesses are being financed by equity. As far as operations are concerned credit-cash ratio is 50% as far as sale is concerned. However for procurement of raw material 90% is on the terms of cash when raw material is received.

HUMAN RESOURCE:
99% of the owners are working as general manager of their business handling all operations i.e. factory operations, administration, marketing and client handling. They hire salary base labor.

Energy

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Excellence Marble Factory Energy is the back-bone of any industry, Electricity is used in order to fulfill energy requirement of an industry. although whole economy is being effected by energy crises but still gernators would not be proved affordable. Cost of a product might increase.

Marketing
As a concern to selling and marketing of a product, three important dimensions would be targeted New Housing Projects Plazas Small client

Feasibility Report
Location
College Road, Township would be perfect location due to number of reasons i.e. It is second largest marble market in Lahore after Ichra. Secondly, particular area is surrounded by number of large Housing societies (Wapda Town, Punjab Society, Nespak, PCSIR, Architecture Society, Engineering Society, Gulshan-e-Lahore and Makkah Society)and finally still have growth .

Budget
1500000/= is allocated for budget. Many countries are manufacturing Marble machinery that is too costly. So, machinery and other equipment would be purchased from local market. As concern to place, prepared industry would hire on rent.

Salary
In a Market, Section Machine Master is being given 10000/= while cutter& Polish Master is taking 10000/= and as concern to the helpers they get 6000/= each.

Electricity Bills

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Excellence Marble Factory 30000/month is to be reserved for Electricity consumption. That defiantly would varies with the passage of time and due to other variables.

Purchasing& Selling Rates

The rate fully depends upon the marble type which costs from 22/feet to 250/feet. But initially Badel, Sunny Grey, Sunny White would be purchased that have rate 22/feet and could be sell up to 45/feet. Polish chemical cost 10000/=.

Feasibility Chart
Title Advance for factory Location Rent section Machine Cutter Machine Polish Machine Grander Labor Electricity bill Motors Reserve Total Amount 120000 40000 350000 350000 150000 8000 32000 30000 170000 250000 1500000

SWOT ANALYSIS

STRENGTHS
Located in and around capital city of punjab

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Lahore has lots of planned construction area so local market is available. Increasing potential in Housing Society

WEAKNESSES
Due to lack of export culture, industry is dependent on local machinery and quality of product is not given proper weightage There is no waste management policy or strategy

Opportunity
Threat Economic insatiability of country Increasing Energy Crises China fancy tiles High Rate of houses and plaza construction Decorative buildings Raw material availability for handicraft manufacturing. Pakistan has large reserves of several varieties of Marble.

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