This document provides details for a project report on a proposed welding machine manufacturing business. It includes information such as the management structure, proposed location, raw materials required, manufacturing process, machinery needed, and financial projections. The key points are:
- The business will be a sole proprietorship located in an industrial zone in Rajkot, Gujarat owned by Piyush Sangani.
- Welding machines of various capacities will be manufactured using raw materials like iron, wire, and laminates.
- The manufacturing process involves winding coils, assembling parts, inspection, fitting, coloring, and labeling.
- Machinery such as lathe machines, drill machines, and air compressors will
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Product project report
1. A PRODUCT PROJECT REPORT
ON
“Welding machine”
PREPARED BY
SANGANI PIYUSH R.
COLLEGE
N R VEKARIA INSTITUTE OF BUSINESS MANAGEMENT STUDIES
CLASS
MBA :- 3RD SEM
ROLL NO
77
ACADEMIC YEAR
2010-11
2. SUBMITTED TO
N R VEKARIA INSTITUTE OF
BUSINESS MANAGEMENT STUDIES
JUNAGADH
Declaration
I undersigned SANGANI PIYUSH R.., the student of MBA 3RD SEM of
NRVIBS, GTU here , I declared that the project work present in this report is my
own work.
This project work is not submitted to any other university for any other
examination purpose. I have tried my level best to include all information in this
report.
Date : Student’s sign.
Place : JUNAGADH
SANGANI PIYSHA..
3. PREFACE
Indian Management scenario seemed to be mixed hopes at the
commencement of the nineties. Most of the small scale industries in the country are
handicapped. There is an accurate need for substituting the traditional management
techniques by newly developed system of management.
It is suggested to under go such training to manage the business unit
efficiently right from its inception and avoid the national losses. Keeping in view
the central ideas and objectives, GTU has introduced the subject “Entrepreneurships
and Management of Small Scale Business”. The main object of this subject is to
develop the skill in the problem solving and decision making in management of
small scale business.
In lights of above objectives. The students are required to prepare a
project report on selected products. So, I am glad to submit a project report.
4. ACKNOWLEDGEMENT
This product project report is a part of the subject “Entrepreneurships and
management of small scale industries”. I am glad to submit to this report which
includes the practical aspect of the industrial study. I am happy to expressed to my
deepest gratitude to all person who spend there valuable time and help me a lot in
preparing of this project work. A successful challenge of visit to any industry gave
me a chance to transfer it into a result.
I oblige GTU for providing me with a valuable opportunity to
undertake surveys of small scale industry and I also thankful to introduce me to a
new horizon in the Entrepreneurships skills.
I am thankful to Dr. RAJESH PATEL for guiding me towards successful
preparation of this project. I would like to express my opportunity to my friends and
all people who have directly or indirectly help me in this project work,
Date :
Place : JUNAGADH Student Sign
SANGANI PIYUSH.
5. INDEX
Sr. No. Particulars Pg. No.
1. Introduction
2. Project at a glance
3. Mgt. Set up
4. Org. Structure
5. Justification of Location
6. Product Details
7. Market Potential
8. Channel of distribution
9. Raw Materials
10. Manufacturing Process
11. Manufacturing chart
12. Production capacity schedule
13. Machinery
14. Name of machinery supplier
15. Financial details
16. Cost of Production
17. Total working capital requirement
18. Total cost of project
19. Sources of finance
20. Interest on capital
21. Depreciation
22. Annual cost of production
23. Total sales
24. Fixed cost and variable cost schedule
25. Term – loan repayment
26. Cost of Capital
27. Return on investment
28. Profitability analysis
7. Introduction
Introduction to Small Scale Industries :
It is like an open university for entrepreneur to learn something. The
industry having a investment less then 3 cr. Can be considered as a small scale
industry.
SSI Sector in India creates largest employment opportunities for the Indian
populace, next only to Agriculture. It has been estimated that a lakh rupees of
investment in fixed assets in the small scale sector generates employment for four
persons.
According to the SSI Sector survey conducted by the Ministry and National
Informatics Centre with the base year of 1987-88, the following interesting
observations were made related to employment in the small scale sector.
8. Small scale features
1. Capital investment is small.
2. Most of them have fever than to workers.
3. They are generally engaged in the production of light consumer goods
processing.
4. They are located in urban or semi urban area.
5. Virtually all of them are privately owned and organized as sold proprietorship
or partnership business.
6. The fixed assets from largest components of one small unit.
Most of the funds conform the savings of the entrepreneur.
9. Project at a Glance
1. Name of the unit : Active welding machines
2. Address of the unit : Active welding machines,
plot no.2309 & 10 ,
Almighty gate,
Road no. D. G.I.DC. Lodhika,
Metoda (Rajkot)
3. Address of register Office : Active welding machines,
Royal millennium ,4
University road,
Rajkot – 360 001.
4. Phone Number : 2587378
E-mail : activewlding@yahoo.com
5. Form of Organization : Sole Proprietorship
6. Name of Proprietor : Miss. Sangani piyusha
7. Name of Product : supreme welding machine
8. Size of the Unit : Small Scale Industry.
7. SSI Registration No. : Applied for
8. Subsidy Registration : Applied for
11. Cost of Project : Rs. 4756865
12. Means / Sources of Finance : i) Ownership –60%
ii) Borrowed – 40%
13. Year of Establishment : 2010-11
14. Type of Organization : Manufacturing Concern
15. Working days & Holidays : 8 hours working per day and 1 day off on
Saturday.
10. 16. Work Shift : 8 : 00am to 12:00am
12:00am to 02:00pm (Lunch Break)
02:00pm to 06:00pm
17. Total Area Covered : 400 sq. mtr.
18. Slogan : Best Quality Is Here
19. Implementation Schedule :
No. Activity Time Period
1. Preparation of Project 1 Month
2. Selection of Site 2 months
3. Registration of SSI 1 Month
4. Availability of Finance 15 days
5. Construction of Building 2 months
6. Arrangement of Machines 15 days
Erection of Electrification
7. Recruitment of personnel 15 Days
8. Other delay for unexpected 1 Month
reasons
20. Bankers : State Bank of Saurashtra
11. Management Set-up
Proprietor Profile :-
1. Name : Sangani Piyush R
2. Address (Resi.) : mahadeviya road,
gangivada ploat
manavadar
3. Address (Office) : ACTIVE WELDING MACHINE
plot no.2309 & 10 ,
Almighty gate,
Road no. D. G.I.DC. Lodhika,
Metoda (Rajkot)
4. Age : 20 years
5. Qualification : MBA (markrting Fresher )
6. Financial Contribution : 60%
7. Nature of Work : Overall Management
12. Organisation structure
proprietor
Production Marketing
Department Department
Material Agents Salesmen
manager
Inspector and
workers
Justification of Location
The Unit will be located at Shakti Industry zone Dist. Rajkot in Gujarat State.
The various factors considered while selecting the location are as follows.
13. 1. Raw Materials :-
Availability of raw material is the basic necessity for a business unit to run
smoothly and efficiently. Business unit should get required raw material when and
where it requires. If there will be any break up or delay in supplying the raw
material the cost of production will go high because labor cost per unit increase with
the lower level of production.
So, the unit locate near highway because raw material purchased from
rajkot , vallabh vidhya nagar, & bhavanagar
2. Infrastructure Facilities :-
Infrastructure facilities are easily available to this unit because it develop in
government industrial zone. The infrastructure facilities like Railway station{within
15 km, in RAJKOT} airport, nearer bank services, telephone exchange connecting
through STD, ISD are available.
This Unit is also nearer to highway for transportation of raw material and
finished goods and also easily available to customers. Road transportation
commonly use and it is cheaper then other transportation facilities.
3. Power :-
Power is the basic motive for stimulating the production process there is no
special power connection is required in this unit. The requirement of electricity is
3750 12w P. M. which is available from F industrial Estate.
4. Labor :-
Skilled & Semi skilled labors are available at reasonable rates in Rajkot.
Besides the site is connected with Rajkot city, which is a big commercial city.
14. Product Details
Welding is an ancient art dating back to the Bronze Age. It produces a stable,
inherently strong join that can't be matched with other methods. Welding skills are
in high demand and welding engineering has become a growing job market. As
welding has become more technologically oriented, highly accurate automatic
welders, laser welders and electron beam welders have emerged increasing the
speed and versatility of welding. Such developments make it an exciting time to join
the welding industry.
Welding Overview
Welding is the process of fusing two materials together using extreme heat,
pressure and/or fillers. Welding processes have developed to fit every industrial
need imaginable. the American Welding Society (AWS) lists over 100 welding
processes The two types of welding most prevalently in use are Arc welding and
Gas Arc welding.
Welding has traditionally been viewed as a heavy manufacturing process. The
shipbuilding, automobile manufacturing, construction and oil industries have
benefited greatly from the expediency of welding. These industrial applications still
employ the majority of welding practices in use today. From welding thick steel
beams together to repairing the hulls of ocean tankers, welding is the join
technology of choice. Welding has also branched out into areas like electronics,
aerospace, medical device manufacture, instrumentation, and photonics. Welding is
being used on rocket fuel tanks, glass sealing of electronic packages, nano-wire
assemblies and glass to metal or silicon joining of sensors. Today's welding
processes involve plastic, glass, fiberglass, and ceramic in addition to metal.
15. Market Potential
There has been phenomena growth in the “welding machine” as under.
Industry is last decade, thought the country and the demand to increases year
by year due to all round development in the industrial scope and increases standard
of living of Indian people, so there is no question of decreases in demand of welding
machine because India is a 2nd populated country and also increases in demand.
For market potential, this unit is very much contact with customers and also
given them good quality of product. ACTIVE WELDING MACHINE industry is
also provides good quality product to their customers at time to time.
For this purpose, this unit is also given different capcity of machine as
customers wants.
16. Pricing Policy
Price is an important factor affecting the success of a firm. Pricing decision and
policy have direct influence on sales volume and profit of the business. Price
fundamental to all marketing efforts, pricing is the process or service in monetary
terms.
Pricing is an important decision that every company has to high price or low price
may create a bad reputation of the company. The price of a product is a crucial
decision.
My pricing policy will be cost + profit. Whatever expenses have incurred during
the manufacturing of the product is considered plus profit is too included,
competitors’ price will also be considered.
17. Channel Of Distribution
The channel of distribution plays an important role in market activity in the
movement of flow of funds.
Channel of Distribution
The firm can use one level distribution channel
Producer
Agent
Consumer
OR
The firm may use zero level distribution channel.
Producer
Consumer
18. Raw Material
The following raw materials are required for the production of
welding machine.
CRC iron Box
Winding wire
Brass stud
CRC lamination sheet
Fiber Washer
CRC washer
Indicator
Lather paper
Cotton tap
Name plat
Coclur
Warmish
Name of raw material supplier:-
1. Parth steel traders, rajkot
2. excel mattel rajkot
3. gurukrupa mattel rajkot
4. niraj nutball, rajkot
5. olvin industries rajkot
6. shiv traders rajkot
7. Krishna painting rajkot
8. shreeji agency rajkot
9. national polymers co. vallbhvidhyanagar
10.orient scrape traders.
19. Manufacturing process
The manufacturing of Welding machine includes following steps.
MANUFACTURING OF COIL
Manufacturing of coil starts with the winding of aluminum wire. The wire can
be different according to the load. The cotton tap is attached with it. Now the coil is
ready.
MANUFACTURING BINB
After manufacturing of coil the coil and silicone lamination sheet are
attached. To attach the coil and silicone lamination sheet fiber washer , CRC washer
, lather paper etc. are used.
INSPECTION OF BIMB
After manufacturing of bimb the first inspection is made. If any defects is
found then it is removed during the inspection.
FITTING OF MACHINE
After inspection of bimb the is packed in CRC iron box i.e. body of the
machine. The indicator and Brass stud is attached during this process.
20. COLORING
After fitting the machine the machine is colored . Two type of color is used
that is yellow and black.
FINAL INSPECTION
After coloring the machine the final inspection takes place.
LABELING
After coloring, the label is slicked with the machine
23. machinary and equipments
The following machineries is required for the production of Welding
machine.
Machine Qty(unit) Cost(Rs.)
Lathe machine 5 2,50,000
Drill machine 2 40,0000
Air compressor 2 20,000
Digital maltimeter 1 6,000
24. Name of Machinery Supplier
Name Of Machine supplier
Lath machine OM ENGINEERS PVT. LTD,
RAJKOT
AIR compressure RAJOO ENGINEERS,
Shapar (veraval).
Drilling machine SHRI RAM INDUSRRIES.
MANAVADAR(Dist. Junagadh)
25. Financial Detail
a) Fixed Assets :-
Particular Area Rate Total Cost.
Land 400sq.mtr 3000 1200000
Stamp Duty 12000
1212000
b) Building :-
Particular Area Rate Total Cost.
sq.mtr
Office 50 4000 200000
Working Shad 150 4000 600000
Staff Qtr. 100 4000 400000
12,00,000
C) Plant & Machinery :-
Name Qty. Rate Total
Lath machine 4 250000 1000000
Drill machine 2 40000 80000
Air compressor 2 20000 40000
Digital maltimeter 1 6000 6000
11,26,000
d) Other Fixed Assets :-
26. Name Qty. Rate Total
Furniture - 61200 61200
Computer 30000 30000
91200
e) Preliminary & Pre-operative Exp. : Rs. 25000
Total Fixed Capital
=a+b+c+d+e
=1112000+1200000+1126000+91200+25000
=3554200
27. Cost of Production
a) Raw Material :-
200 APM(9%)
Particular Rate Req. Year Req.3months
Name of (rs/kg Qty. Amt. Amt.
Material )
45units
CRCironBox 52 45*12=540 28080 7020
Windingwire 170 45*7=315 53550 13387.5
Brass stud 380 45*1=45 17100 4275
FiberWasher 6 45*10=450 2700 675
CRC washer 35 45*0.4=18 630 157.5
Indicator 6 45*1=45 270 67.5
Lather paper 190 45*0.2=9 1710 427.5
Cotton tap 15 45*1=45 675 168.75
Name plat 10 45*4=180 1800 450
Colour 170 45*0.2=9 1530 382.5
Warmish 82 45*.35=15.75 1291.5 322.875
Crc 160 45*16=720 11520 28800
lamination 0
sheet
224,537 56134.125
Raw material cost per unit= Total cost
total quantity
= 224573
45
= 4990.51
28. 250APM(11%)
Particular Rate Req. Year Req.3months
Name of (rs/kg) Qty. Amt. Amt.
Material
55units
CRCironBox 52 55*12 34320 8580
Windingwire 170 55*9 84150 21037.5
Brass stud 380 55*1 20900 5225
FiberWasher 6 55*11 3630 907.5
CRC washer 35 55*0.5 1636.2 409.0625
5
Indicator 6 55*1 330 82.5
Lather paper 190 55*0.22 2299 574.75
Cotton tap 15 55*1 825 206.25
Name plat 10 55*4 2200 550
Colour 170 55*0.23 2150.5 537.625
Warmish 82 55*0.4 1804 451
Crc 160 55*19 167200 41800
lamination
sheet
321,445 80361.1875
Raw material cost per unit= Total cost
total quantity
= 321445
55
= 5844.45
29. 300APM(15%)
Particular Rate Req. Year Req.3months
Name of (rs/kg) Qty. Amt. Amt.
Material
75units
CRCironBox 52 75*12 49920 12480
Windingwire 170 75*11 149600 37400
Brass stud 380 75*2 60800 15200
FiberWasher 6 75*12 5760 1440
CRC washer 35 75*0.6 1680 420
Indicator 6 75*1 480 120
Lather paper 190 75*0.24 3648 912
Cotton tap 15 75*1 1200 300
Name plat 10 75*4 3200 800
Colour 170 75*0.26 3536 884
Warmish 82 75*0.45 2952 738
Crc 160 75*22 281600 70400
lamination
sheet
564,376 141094
Raw material cost per unit= Total cost
total quantity
= 564376
75
= 7525.01
30. 350APM(27%)
Particular Rate Req. Year Req.3months
Name of (rs/kg) Qty. Amt. Amt.
Material
135units
CRCironBox 52 135*13 91260 22815
Windingwire 170 135*13 298350 74587.5
Brass stud 380 135*2 102600 25650
FiberWasher 6 135*13 10530 2632.5
CRC washer 35 135*0.7 3307.5 826.875
Indicator 6 135*1 810 202.5
Lather paper 190 135*0.2 6669 1667.25
6
Cotton tap 15 135*2 4050 1012.5
Name plat 10 135*4 5400 1350
Colour 170 135*0.2 4590 1147.5
9
Warmish 82 135*0.5 5535 1383.75
Crc 160 135*25 540000 135000
lamination
sheet
1073102 268275.4
Raw material cost per unit= Total cost
total quantity
= 1073102
135
= 7948.90
31. 400APM(28%)
Particular Rate Req. Year Req.3months
Name of (rs/kg Qty. Amt. Amt.
Material )
140units
CRCironBox 52 140*13 94640 23660
Windingwire 170 140*15 357000 89250
Brass stud 380 140*3 159600 39900
FiberWasher 6140*14 11760 2940
CRC washer 35 140*0.8 3920 980
Indicator 6 140*1 840 210
Lather paper 190 140*0.2 7448 1862
8
Cotton tap 15 140*2 4200 1050
Name plat 10 140*4 5600 1400
Colour 170 140*0.3 7616 1904
2
Warmish 82 140*0.5 6314 1578.5
5
Crc 160 140*28 627200 156800
lamination
sheet
1,286,13 321534.5
8
Raw material cost per unit= Total cost
total quantity
= 1,286,138
140
= 9186.7
32. 450APM(10%)
Particular Rate Req. Year Req.
3months
Name of (rs/kg) Qty. Amt. Amt
Material
50units
CRCironBox 52 50*13 33800 8450
Windingwire 170 50*17 144500 36125
Brass stud 380 50*3 57000 14250
FiberWasher 6 50*15 4500 1125
CRC washer 35 50*0.9 1575 393.75
Indicator 6 50*1 300 75
Lather paper 190 50*0.3 2850 712.5
Cotton tap 15 50*2 1500 375
Name plat 10 50*4 2000 500
Colour 170 50*0.35 2975 743.75
Warmish 82 50*0.6 2460 615
Crc 160 50*31 248000
lamination
sheet 62000
501,460 125365
Raw material cost per unit= Total cost
total quantity
= 501,460
50
= 10029.2
Total raw material cost
=200APM+250APM+300APM+350APM+400APM+450APM
=224537+321445+564376+1073102+1286138+501460
35. Total Working Capital
Particular Amount Annual Amt.
Raw Material 330921 3971058
Wages & salary 49100 589200
Utilities 9200 110400
Total 389221 4,670,658
Working capital= annual mount
4months
=4670658
4
=1167665
Total Cost of Project
36. Particulars Amt.
Fixed Capital 3589200
Working Capital (on the Credit Basis) 1167665
Total 4756865
Sources of Finance
Particulars Amt.
Ownership Capital 2856800
Borrowed Capital 1900000
Total 4756800
37. Interest on Capital
Details Loan Amt. Int. Rate Interest (P.a.)
Own Capital 2856800 7% 199976
Borrowed Capital :
S.B.S 1900000 11% 209000
Total Interest 408976
Depreciation
38. Particular Total Amt. Rate Amt.
Building 1200000 10% 120000
Machinery 1126000 10% 112600
Computer 30000 30% 9,000
Other Fixed Assets 121200 15% 18180
259780
39. Annual cost of production
Particular Amt. Amt.
VARIABLE EXPENSES
Raw Material 3971058
Salary & Wages 279600
Variable Adm. expenses 326400
SEMI- VARIABLE EXP (40% variable)
(48000*40%) 19200
Total Per Annum (A)
4596258
Fixed Expenses :
Salaries 309600
Depreciation 259780
Other Expenses
Fixed exp. 282000
Semi-fixed exp.(60% fixed) 28800
(48000*60%)
Interest : 199976
Borrowed Interest
209000
Capital Interest
Total Per Annum (B.) 1289156
Total Cost of Production (A + B)
= Rs. 4596258 + 1289156
= Rs 5885414
42. Capital Rate Interest
1. Own Capital 7% 199976
2. Barrowed Capital 11% 209000
408976
Cost of capital :
= Total Interest x 100
Total Capital
= 408976 x 100
4756800
= 8.59
46. Projected Balance sheet (3 yrs)
Particulars 1st Year 2nd Year 3rd Year
Capital
Liability
Own Capital 2856800 2856800 2856800
(+) Int. on
Capital 408976 408976 408976
(+) Net Profit 304481 352522 441151
3570257 3618298 3706927
Borrowed 1900000 1520000 1140000
Loans
Creditors 250000 270000 260000
Total 5720257 5408298 5106927
Property
Assets
Fixed Assets
Land 1212000 1212000 1212000
Building Less 1080000 972000 874800
Dep.
Machine Less 1126000 1013400 912060
Dep.
other fixed 121200 103020 86577
assests less
dep.
Computer Less 30,000 21,000 14,700
Dep.
debtors 1167665 1167665 1167665
Cash and bank 983,392 919,213 839,125
Total 5720257 5408298 5106927
47. Project Cost Sheet (3 years)
Particulars 1st year 2nd year 3rd year
Raw Material
Consumed
Op. Stock of Raw -
Material
Purchase 3971058 4368163 4804980
Cost of R.M. 3971058 4368163 4804980
Consumed
Direct Wages 279600 307560 338316
Utilizes 110400 121440 133584
Prime Cost 4361058 4797163 5276880
Factory Overhead
Salaries 105600 116160 127776
Factory Expenses 180000 198000 217800
Dep. On Building & 236000 212400 191160
Machine
Maint. & Repairs of 24000 26400 29040
Machine
Work Cost. 4906658 5350123 5842656
Office / Adm.
Overhead
Telephone 18,000 19800 21780
Postage & Stamp 6,000 6600 7260
Duty
Insurance 36,000 36,000 36,000
salaries 72000 79200 87120
Mis. Expenses 6,000 6600 7260
Contingencies 42,000 46200 50820
Interest on Cap. 408976 408976 408976
Depre. On other fixed 18180 15453 13135
Asset.
Depre. On computers 9000 6300 4410
Cost of Production 5,522,814 5,975,252 6,479,417
Selling & Dist.
Overheads
Salaries 132000 145200 159720
Traveling Exp. 18000 19800 21780
Selling Exp. 216000 237600 261360
Cost of Sales. 5,888,814 6,377,852 6,922,277
Sales 6300000 6930000 7623000
Profit 411,186 552,148 700,723
48. Schedule of fixed assets
Particular Gross Depreciation Net
Block Blocks
Opening Total Total During W.D.U.
Addition Accumulated the
Year
Building 1200000 120000 - 1080000
0 120000
Machine 1126000 112600 - 1013400
0 112600
Compute 30000 30000 - 21000
r 9000
Other 121200 121200 103020
Fixed
Asset
18180
2477200 247720 259780 2217420
0
49. Schedule for Factory Overheads.
Particular 1st 2nd 3rd
Salaries and 589200 648,120 712,932
Wages
Factory Expenses 180000 198000 217800
Dep. On Building 236000 212400 191160
& Machine
Maintenance & 24,000 26400 29040
repairs of
Machine
102920 1,084,920 1,150,932
0
50. Disclosure of significant accounting
policy.
1) We take double entry system in book keeping area.
2) Method of depreciation = Written down method
3) Valuation of Inventory=Cost price or market price which
ever is less.
Accounting Year = 1st April to 31st March.