Submitted By:

Filza Ali 15-4838

Zohaib Minhas 15-
Warda Shafique15-4692
Haider Ali 15-
Faran Saeed15-4717
 Table of Contents
Introduction............................................................................................................................... 3
Competitive Advantage ............................................................................................................. 3
Factory Lay-Out (Speed): ................................................................................................................ 3
Quality: .............................................................................................................................................. 4
Process Plan .............................................................................................................................. 4
Farming: ............................................................................................................................................ 4
Cleaning: ........................................................................................................................................... 4
Peeling: .............................................................................................................................................. 4
Slicing: ............................................................................................................................................... 4
Washing: ............................................................................................................................................ 4
Frying: ............................................................................................................................................... 5
Checking:........................................................................................................................................... 5
Flavoring: .......................................................................................................................................... 5
Packaging: ......................................................................................................................................... 5
Cost Structure: .......................................................................................................................... 7
Segregation of Fixed and Variable Cost: ........................................................................................ 8
Fixed Cost: .................................................................................................................................................... 8
Variable Cost: ............................................................................................................................................... 8
Total Cost: ..................................................................................................................................................... 8
Break Even Point:............................................................................................................................. 8
Diagram of the facility layout and justify ................................................................................ 9
Space & Equipment required for each function .................................................................... 10
 Introduction
Keeping in view the market trends today, a new better and more efficient product/service has
a better chance of surviving, establishing and with the right penetration, leading the market.
We have seen that Lays has been the market leaders for years in the chips an snack industry.
Many newbies tried to compete with it but failed drastically. Somehow Lays has maintained
its position on the top but recently a new entrant in the market has not only competed with Lays
but has done a serious damage to it. The brand is none other than Oye Hoye. With the right
marketing tools, it has not only made it difficult for lays to survive but has forced it to find a
new competitive advantage to stay in business.

Critically analysing the shifting paradigm of the industry, we have decided to introduce a chips
brand in the market with the name of Swaggers. The market looks like a good opportunity to
enter and provides a better chance of survival. The idea of introducing was a combined effort.
One of our close friends, also the main supplier of potatoes Shahid Ahmad Sial shared his
experience of how much the demand of potatoes has increased because of the new chips
manufacturers in the industry. This gave us the idea of introducing a new, better flavoured
chips in the market. The breakeven analysis has been discussed in detail in the coming part of
the report. However, we are expected to meet the breakeven point in one year if the sales go as
forecasted. The design of the product is very similar to its competitors and will be regularly
packed. A small informal research might circulate to gather information and opinions of the
consumer on how they would like the product packed, what flavours would they prefer or what
they expect from the product as a whole. After analysing the gathered information, we will
finalize the packaging of the product. The resources required for the business are also explained
in detail. In general, a unit will be required to transform the input(potatoes) to output(crisps).
We will also require a land for a setup, a regular potatoes supplier and a packaging unit. The
delivery of the product will be outsourced.

Competitive Advantage

Factory Lay-Out (Speed):

Factory is designed in a way that there is minimum distance of potato farm from processing
farms. In this way less time will be wasted in transporting the potatoes. Also packaging area
is also adjacent and can easily be packed. These strategies will make our operations efficient
so that less time wasted.

Quality:

The first and most critical step towards total quality management is procurement of potatoes.
We have the most proficient team and machines to test and grade the harvest, and other areas
where we need quality control.

Process Plan

Farming:
The first step of this process is growing potatoes. Potatoes take 120 days to grow. We are going
to have a contract with a farmer who is going to provide us with the potatoes.

Cleaning:

After the crane of potatoes reaches the factory, it is mechanically unloaded. Here, excessive
soil and rocks are removed. It is cleaned by flooding the potatoes or by spreading the potatoes
on agitating conveyors that pass through strong jets of water.

Peeling:

After the cleaning process, potatoes are peeled in a machine. This machine can peel 10 ton of
potatoes in one hour. Peels of potatoes are sent for animal food. Then the peeled potatoes are
check by quality control team in order to select required potatoes. The required potatoes should
be 3 inches long and weighs around 50 to 70 grams.

Slicing:

Now these selected potatoes are sliced in round shape with a machine called slicer. Slicer has
a series of rotating knives which cut potatoes in perfect shape.

Washing:

These sliced potato chip are then washed again in order to remove its starch. This process helps
to make chips light and crispy. The starch which is removed during this process is sent to paper
and glue factories.
Frying:

These sliced potatoes are sent to a fryer where they are fried for about three minutes. This fryer
is computer controlled which will help in keeping the required temperature and oil.

Checking:

In this process the fried chips are sent to a bed like machine which has camera above it. This
machine checks each chips and remove the burn or bad chips.

Flavouring:

Potato chips are then divided and sent to three different compartments. Here the potato chips
are given its flavour which is Salt, Spice and Onion.

Packaging:

The last step is to weigh chips and pack according.

Supply chain management:

Supply chain management of our brand includes optimizing
operations to maximize both speed and efficiency. Speed is needed because people prefer and
value fast service these days. If people don't find accessibility then they easily go for
substitutes. Increasing speed however, can cause costs to skyrocket, so maximizing efficiency
is equally important. Our aim is to provide products as fast and cheaply as possible without
sacrificing quality however it is a startup so we are going to face ups and downs.
Our brand has following stages in supply chain process.
 Raw materials
 Supplier
 Manufacturing
 Distribution
 Retail location
 Customer

Raw materials
Basic raw materials which would be needed for the production are Potatoes,
Vegetable oil and Salt. These materials would be outsourced from suppliers and further
manufactured in the factory. The reason behind its outsourcing is that currently we are start-up
and we can't afford to have our own field of potatoes. Moreover, Vegetable oil and salt would
also be outsourced and used in in the making of chips. Packaging of chips would be done
through the equipment working in the factory.
Supplier
Supplier of our Brand is going to supply raw materials to the factories. The supplier,
our good friend Mr Shahid Ahmad Sial has assured us the best quality of potatoes for the
manufacturing.

Manufacturing
Initially we are going to have one factory located far from Lahore city area. The
products in the factory would be manufactured by maximum 50 workers. Every worker would
be assigned specific skilled related tasks. Products would be produced with the help of
equipment in which planning manager define tasks such as cleaning, pealing (one-ton potatoes
in one hour), examining potatoes (size 3/half inch 50-70-gram weight), quality control keeps
check on potatoes, slicing through slicer, frying through fryer with help of computing, salting
and packaging.

Distribution
It involves the movement of Chips to the point of sale. The distribution in our
business will be outsourced and will be completely handled by a different company.

Retail location
The transportation truck would deliver the final goods to the retail stores. The retailors
are not specific and all the small shops can be targeted in the city initially.

Impact of location:
As earlier discussed the factory would be located far from the city area of Lahore.
The reason behind this location is that the suppliers of raw materials are near that area. It would
be easier in terms of transportation cost and accessibility. It is going to be cost-effective for our
brand.

Effect of JIT:
Just in time strategy would not be directly used in our business model. It is
because the products are made in factories and can't be customized when needed. Chips are
going to be available on retail stores.

Inventory strategy:

The strategy that would suit our business is Materials requirements planning. It
basically employs computer software applications to manage inventory. MRP applications
break down inventory requirements into planning periods to keep production running
smoothly while maintaining minimum inventory levels. Designed to answer what is needed,
how much is needed and when it is needed, this model works backward from the planned
finished product to determine the components and raw materials needed to create it. While
costly to implement, MRP systems help managers plan for capacity needs and allocate
production times.

Team approach in Job design:

The manufacturing of our product is on a conveyer belt. As most of the processes are
technology based, very less workforce and collaboration is required between the processes.

Cost Structure:
Cost structures is the most important part of every business, without making cost structure
anyone will not be run the any type of business. So the major thing of cost structure of our
business who will be produced bulk quantity of chip in different flavors is:
 Advance payment of land
 Rent of land
 Machinery
 Plant for packaging
 Electricity
 Potatoes

1. Advance payment of land: We need a land for installing the machinery for the
production of chips in different flavors. So, that a reason we lend a land for which we
done the advance payment.
2. Rent of land: As all we are the student and we start the initiator project that a reason we
does not purchase any land rather than lend the land, so after the advance payment we
make the rent payment monthly and this payment is increased 10% in every year.
3. Machinery: We buy a machinery for boiling, pilling, cutting and firing. We buy a
normal machinery for these functions. We install this machinery at the rented place.
4. Plant for packaging: We buy a plant and install on the production place for the
packaging of the chips.
5. Electricity: The expense of electricity is so high because we run the machinery and the
plant for packaging. For these two things the electricity is much more required.
6. Potatoes: Potatoes is the most important part of our business, without potatoes our
business is incomplete because we will be make a chip of potatoes and potatoes is the
primary product and necessity for the production of chips. Our business is a start-up
 and we have no enough resource of investment that we produced the potatoes by
himself on his land. We decided that we will be out sourcing the potatoes from our
friend who has the land on which he produced the healthy potatoes. So we buy the
potatoes from our friend whose name is “Shahid Ahmad Sial”.

Segregation of Fixed and Variable Cost:

Fixed Cost:

The fixed cost are included in the

 Advance payment of land
 Machinery Cost
 Plant for packaging

Variable Cost:
The variable cost are included which have variation after every month or every year is:
 Rent of Land
 Electricity Bills
 Potatoes
 Oil
 Spices
 Salaries

Total Cost:

After the analysis the major and minor cost the budget we forecast that the total cost of our
business of the starting 1st year is almost 2,500,000Rs.

Break Even Point:

The break-even point is specifically cost accounting is the point at which total cost and total
revenue are equal. The break-even point is a point at which there is no profit and also there is
no loss at that point. So we forecasted that the revenue of our company sales of chips at the end
of one year is almost 2,500,000Rs. So this point is the break-even point because at this time
we have no profit and also we have not a loss. Because the cost at the end of one year is
25,00,000Rs and we done the sale which make the revenue is 2,500,000Rs. So we can say that
the break-even price is 2,500,000Rs and the break-even time is end of one year.

Diagram of the facility layout and justify

 Space & Equipment required for each function

A standout amongst the most critical bits of restaurant equipment is a point of sale (POS)
framework. Our POS framework can track deals and stock utilization. POS framework
indicates the precise measure of product utilized for every purchase. This POS framework
additionally permits us to print out reports so we can concentrate on approaches to lower food
costs.
We need Peelers which will spin until the skin of potato browned off and moving them to
slicers which comprise of blades and cut for the desired shape. Then it is passed to Washing
Spiner for washing and they and Air blowers are blowing air with such pressure that they are
dryed. Then, at last, they are transferred to fryers which takes 3 mins for frying. we also using
a specialized digital camera with pipes which directly throws brown spotted chips out and
transferred to packing machine.
We will use heated ventilation in our factory the items we are using
 Peelers
 Slicers
 Washing spinner
 Air Blowers
 Fryers
 Camera
 Packing Machine