Here, Content is: 1. About Business 2. Objective and Strategy 3. Financials 4. PRODUCT DETAILS 5. PROCESS DETAILS 6. LOCATION DECISION 6. FACILITY LAYOUT 7. CONCLUSION Thank You Sayani Ghosh

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Operations Management
Sayani Ghosh
PG-A
45
Business Name: Packaged Drinking Water Manufacturing
Brand Name: SUNSHINE Aqua
“Sabse Shudh, Sabse Achha”
Under the Guidance of,
Prof. Anguja Agrawal Ma’am

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1. About Business
With considering increasing demand of packaged water due to various reasons
like pollution, lack of public water supply system and increasing awareness
among people; it is found that Packaged Drinking Water could be very good
business opportunity.
Current scenario of Industry: The mineral water market in India is growing
at the rate of 40 percent annually and which touched Rs 15,000 crores by 2015,
now it is almost touching to 25,000 crores in 2019 as per survey by ‘Euro
Monitor’.
With dominant players like Bisleri, Aquafina, Kingfisher, Bailey, Kinley,
the current market share is dominated by Bisleri which has captured at
36%. While Coca Cola’s Kinley is next in line with a 35% market share.
The domestic market is split between three groups of players. The first
group comprises national brands with presence all over India and this
group is worth Rs 4,000 crores. The next group comprises local brands
manufactured by registered plants but restricted to certain regions in the
country. This group has a turnover of Rs 2,400 crores. Lastly, the
unorganized local brands have a net worth of about Rs 1,600 crores.
Figure 1 Brand Name and Logo
Opportunity: With, around 2000 crore market being unorganized among
local players, there comes a great opportunity for a firm to establish in local
market which is not yet tapped by any other firms.

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Type of Business: This would be started with batch size product at initial level
to understand consumer perception about brand. Later on, there might be
chance to expand further with mass production.

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2. Objective and Strategy
Here, we will discuss the main objective of starting new venture in Packaged
Drinking Water with “SUNSHINE Aqua” brand under SUNSHINE Sustainable
Pvt. Ltd. The main objective of company to venture into water industry is to
promote use of recycled plastic for betterment of eco system, with localization of
production.
Vision, Mission and Strategies:
Figure 2: Vision, Mission, Strategy of SUNSHINE Aqua
Unique Selling Proposition:
With all major layers using the plastic granules for making of plastic bottles
via Blow Molding process, here we propose idea of using at least 50%
recycled plastic coming from various sources. This affects the eco system in
tremendous ways for reducing plastic pollution. We with use of advanced
technologies aim to reduce our energy consumption for purification and
distillation of water, both of which act as unique selling proposition for our
brand.
Vision
Doing Business
with Eco-
Friendliness
Strategy
Using recycled
plastic for bottle mfg
Using eco- friendly
process of water
distillation
Mission
To be one of the top
players in Eco
Friendly Drinking
Water Industry by
2025

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Competitive Advantage:
With targeting only to specific area to which competitors have no advantage over
pricing as well as logistics and consumer mindsets and marketing, we believe to
have edge over competitors.
Also with USPs’ of using recycled plastic and ecofriendly distillation process.
Operational Strategy:
The company will use following strategies to make the operations more cost
effective:
1. Optimum utilisation of machineries to achieve the most efficient output.
2. Use of computerized prototyping before starting of actual work.
3. Preparing of model structure.
4. Efficient use of Supply Chains – Push and Pull Boundary optimization
5. Supplier and customer integration in whole process making the efficient
flow of information and thinking
Marketing Strategy:
Consumers can be targeted through the use of commercials in the local
newspapers distributing pamphlets. Also branding via social media platforms
would be beneficial for youngsters.
Promoting SUNSHINE Aqua as an ecofriendly natural drinking water instead of
preconceived notions of consumers would be key element of marketing. Pilot
testing could be done through distributing samples to the consumers free of cost
and analyzing their feedback.

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3. Financials
Here we shall discuss monetary aspects of business.
Estimated total capital investment:
With starting with batch production, the investment for machines and
supplement accessories would be around 5L Rs, and land rent and fixed cost
would be taken for square feet area of 1000 is Rs.20000 per month. Also, the
registration fees for various Govt. licenses like BIS certification, IEC Code,
GST, Trade Liscence, FSSAI, Pollution Certificate, would be taken as Rs. 1L
approximate as this is Deferred Revenue Expenditures.
But, with procurement of advanced technology like filters, tanks, etc. for eco-
friendly energy saving water distillation, there comes increase in cost of Rs.
3L extra.
Figure 3 Approx. Cost Estimation of Normal Packaged Drinking Water
Bottle – 0.5 liter capacity
Cost Price
Referring to Figure 2, average cost of 1 unit of bottle is Rs. 4.5. But with use
of recycled plastic and high technologies for purification, it would rise to Rs.
6-7 per bottle for 500 ML capacity, and Rs. 9-10 for 1L capacity.
But as it is small scale batch type unit as of now, it would be assumed that cost
would increase by 30% due to short run cost influencing factors. So new cost
would be 13 Rs for 1L and 9.1 Rs. for 0.5 L capacity.

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Selling Price
Particulars
Rupees per
unit
500 ML capacity 10
1 L Capacity 20
Profit Margin
= {(Sales Price – Cost Price)/Cost Price * 100%}
Here, Therefore, Profit Margin of SUNSHINE Aqua for a single Bottle of 800
1L Capacity bottle can be calculated as Rs (15-13)/13 * 100%
= 15.38%
Now this margin varies with seasons, government policies, tax structures, other
competitors available in the market and many other external factors but still
packaged drinking water business more or less fetches a profit margin of near
about 13% - 20% of total cost and that is why this segment continues to attract
competitors.
Forecasted Sales Volume
The company plans to sell about 100,000 bottles of each type one financial year
initially, with target only to Nasik area initially only for some specific locations
in Nasik and then checking the consumer responses, capacity would be increased
with machineries and cash flows.
Break Even Point
A Break Even Point is where a company makes no profit and no loss that is where
the Total Cost Curve cuts the Total Revenue Curve.
Now, let’s try to figure out the break-even analysis for SUNSHINE Aqua form
the following graph:

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Figure 4: BEP Analysis of SUNSHINE Aqua
Here, as per calculations, BEP quantity is 4 ten thousand bottles i.e. 40,000 bottles
are produced and BEP Cost is 52,00,000.
Therefore, Total Cost of 40,000 units = Rs. (13 * 40,000)
= Rs. 52,00,000
And, Total Price of 4 units = Rs. 52,00,000.
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
1 2 3 4 5 6 7 8 9 10
Break Even Analysis
Total Cost Fixed Cost Total Revenue

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4. PRODUCT DETAILS
Since this is a manufacturing company and the product is the packaged drinking
water, so aesthetics and functions of the products can be described as follows:
Aesthetics –
Here is a list of few aesthetics features of the products that SUNSHINE Aqua
deliver:
1. Different pleasing shapes for each category of consumer
2. Use of different colour schemes for appeal
3. Using attractive packaging
4. Use of graphics over bottles for attracting more consumers
Functionals-
Here is a list of few functional features of the products that SUNSHINE Aqua
deliver:
1. Good quality mineral water
2. High recycled value of plastic

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3. High mineral content with use of minimum energy content so making it
more eco friendly
For all these functional and aesthetic purposes, company will be using advanced
CAD software with all types of following testing:
1. Mould flowing simulation
2. Crashing simulation
3. Loading simulation
4. Material testing
5. Innovative design making the bottle modern and more essy to use to
consumers at different conditions – simulation of such all permutation and
combinations

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5. PROCESS DETAILS
Figure 5: Process Diagram for Packaged Drinking Water Manufacturing
Here, starting from water receiving from supplier to graining the elevator (more
static head) for producing the pressure required for further distillation which
reduces energy consumption, to storing the finished packaged bottles in Cartons
is done.

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6. LOCATION DECISION
Location of a business is always determined by analysing certain criterions.
Starting with the categorizing of the location factors necessary weightage is given
to specific parameters and then by calculation those factors it is decided which
location to settle for the business.
Here, factor rating method is used for selection of location Here is a table showing
different parameters and their weightages and from the necessary calculation the
conclusions will be drawn:
From the above table the data implies that the company wants to decide its
location facility among the alternatives of Nasik, Pune and Mumbai.
Factors (a) Nasik
(b)
Pune
(c)
Mumbai
(d)
Nasik
(a x b)
Pune
(a x c)
Mumbai
(a x d)
Availability
of land
0.30 8 8 5 2.40 2.40 1.50
Availability
of low
wage
labour
0.20 8 6 5 1.60 1.20 1.00
Ease of
procuring
raw
material
0.15 6 8 7 0.90 1.04 1.05
Proximity
to
Customers
0.10 2 8 7 0.20 0.80 0.70
Population
of
customers
willing to
buy
apartments
0.10 7 8 7 0.70 0.80 0.70
Tax
advantage
0.05 6 7 7 0.30 0.35 0.35
Water
supply
0.05 9 7 5 0.45 0.35 0.25
Ease of
Logistics
0.05 6 8 7 0.30 0.40 0.35
Total 1.0 6.85 6.54 5.20

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And all the factors mentioned there are the parameters basing which the
weightage is given to the three locations. The result is also clear that if it is scaled
at a range of 10, the statistics says as follows:
Nasik : 6.85/10
Pune : 6.54/10
Mumbai : 5.20/10
So, Mumbai is out of scope here, but as it can be seen the company can definitely
start its business in Nasik but also there is a high possibility of success in Pune
also since the location facility factor is quite close between these two options.
That could be further decided then by adding few more factors to the calculation
such as future scope, this could also be a factor for a company to decide its
facility, now distributing proper weightage to this factor further calculations
could be done and the facility scores could be checked out further.

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6. FACILITY LAYOUT
The business is a packaged drinking water manufacturing firm and the layout
structure of their plant could be depicted from the figure below:
Functions:
Here, approximated area is given as below out of total 1000 Sq. Ft:
1. Manufacturing area
1.1. Bottle Cap
1.2. Bottle
1.3. Packaging
2. Assembling Area
3. Packaging inspection
4. Product storage area
5. Packaging area for batches of bottles
6. Other utilities area
Total size is divided into proportionate areas for each functions.
Here, thing to note is that, these functions are highly interdependent so in initial
phase “Batch Production” used with Process Layout rather product layout. But,
with machineries highly capable of doing variety of functional ranges, we can
expect this layout to be highly flexible giving more room for change in production
as per requirement.
Figure 6: Plant Layout of SUNSHINE Aqua

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CONCLUSION:
From this assignment of operations planning of own business, various aspects
were understood and their importance in real-time business process planning is
underlined.