OPERATIONS MANAGEMENT

FINAL PROJECT

Project Brief:

Safeguard antiseptic liquid

Submitted To:

Mr. Tahir Aziz Khan

Submitted by:

Nauman Talib FA09-MBA-117M.Muneeb-ur-rehman FA09-MBA-092Javed Iqbal FA09-MBA-050Syed Mohsin Abbas FA09-MBA-147Saima Ch. FA09-MBA-132Asim Ali FA09-MBA-023

COMSATS Institute of Information Technology, Lahore

Department of Management Sciences

TABLE OF CONTENTS

Purpose of the project………………………………………………… 3 Project profile…………………………………………………………… 5 Stakeholder analysis………………………………………………….. 7 Key success factors…………………………………………………… 9 Product packaging…………………………………………………….. 10 Work breakdown structure……………………………………………. 11 Logical diagram………………………………………………………… 12 The process flow……………………………………………………….. 13 Legal requirements…………………………………………………….. 14 Machinery equipment………………………………………………… 16 Risk involved…………………………………………………………… 18 Risk management……………………………………………………… 19

Purpose of report

The major objective of the pre-feasibility study is primarily to launch and promote

the safeguard antiseptic liquid in Pakistan. The study may from the basic

investment decision and in order to serve this objective, this document would

cover the various aspect of project concept development like production start-up,

finance, marketing, human resource management and business management.

Beside the Economic aspect this document would also include the social aspect,

the concept which would cover in providing the social information are brief on

Government policies, and market scenario, and international scenario which

have some bearing on the project completion and its compatibility.

What steps would be in mind while decision making:

Before making any decision and investment decision, it is mandatory to identify

and analysis of related risk to project development. These factors should be

taking into consideration at investment and all phases during the project cycle.

These critical factors are described below.

Market competition:

The market for antiseptic liquid is growing market, but often offers the though

competition. Should analyze the product life cycle and identifies the life of

product and in how long time the product market would be get into saturated.

Perception and positioning:

Usually the top target market for antiseptic liquid follows the perception, if the

perception about the safeguard antiseptic liquid is positively created in the mind

of potential customer it would result in high sale and ultimately in high profit. And

this positive perception about the safeguard antiseptic liquid would be achieved

by direct consumer experience, awareness about the real antiseptic liquid

benefits, direct promotional activities, bill board, print media and TV advertising.

Distribution:

Distribution is very important for the success of new brand, the stronger the

distribution the more successful will be the new brand. And as for as the concern

of distribution strategy; it should be designed after a careful study of the market

for going for regional distribution or for nation wide distribution.

Pre launch Advertising:

The pre-launching advertising is vital for the positive perception of the product.

This will ultimately result in higher product acceptance in the target and potential

market.

Standards Parameters:

Compliance of the antiseptic liquid of Pakistan standards and quality control

authority (PSQCA) and license form the authority.

Product positioning:

Availability of product at A class, B class or C class shops should be decided

before launching the product and availability should be persistent.

Project time line:

S. No Activity Time (month)1. Civil Works 22. Plant order and lay out 33. Pre-opening operations 2

The construction of civil works has been estimated to be completed in two

months and the plant order, lay out and installation is estimated to have a time

period of three months. The time required for pre-operations is one month. It also

includes pre-launch advertisements on TV and in print media.

Project profile:

The process of purified antiseptic liquid manufacturing consist of silver and silver

compounds oligodynamic effect and are toxic for bacteria, algae, and fungi in

vitro. It is made by the chemical formula which is as below.

2 H2O2 → 2 H2O + O2

In August 1999, the U.S. Food and Drug Administration (FDA) banned colloidal

silver sellers from claiming any therapeutic or preventive value for the product,

noting that colloidal silver was being marketed for numerous diseases without

evidence of safety or effectiveness. As a result, the product now has the status of

a dietary supplement in the US; it can be promoted with general "structure-

function" claims, but cannot be marketed as preventing or treating any

illness. Following this ruling, the FDA has issued numerous Warning Letters to

Internet sites that have continued to promote colloidal silver as an antibiotic or for

other medical purposes.

In 2002, the Australian Therapeutic Goods Administration (TGA) found that there

were no legitimate medical uses for colloidal silver and no evidence to support its

marketing claims. Given the associated safety risks, the TGA concluded that

"efforts should be made to curb the illegal availability of colloidal silver products,

which is a significant public health issue."

Opportunity Rationale:

As for as the opportunity concern there is only one producer in the whole world. If

we succeed in getting the positive image, response of the people then we can

make a high profit and also getting a large portion of market share from the dettol

who is the only producer of antiseptic liquid.

Project Brief:

Project presents an investment opportunity for establishing an antiseptic liquid

with distinctive features from the competitor product first time in Pakistan. The

proposed product line will consist of bottles of 1, 0.5 liters and 0.250 liters. In the

initial phase of the project only (30ml, 100ml, and 250ml) bottles will be

introduced in the local market. After successful introduction of the new brand of

bottled antiseptic liquid the product line may be extended to 1500ml and 3000ml

cans.

Project Investment:

The total cost of the project has been worked out to be Rs.15.00 million. This

includes a fixed cost of Rs.11.485 million and a working capital requirement of

Rs.3.580 million. Period of construction is 2 months, for pre-operating operations,

for civil works and 3 months for machinery & Equipment layout and installation.

PROJECT DEFINITION

In our Project “safeguard antiseptic liquid” our main objective in this project to

introduce the different antiseptic liquid without pungent smell in Pakistan and

make the complete research on it that how much it is required in Pakistan and to

find out that in today’s competitive business how much it has competitive edge

on the other type of business

First of all we must know that why we are choosing this business whether it is

acceptable in Pakistan or not and also have to check the demand of this product

in Pakistan and whether it will give us high profits in the future or not.

Secondly on the part of target market identification, we have to identify that what

is the requirement of our customer? Because as we are going to introduce a

different antiseptic liquid with distinct features in Pakistan so we have to check

that whether there is the requirement another antiseptic liquid which solves the

present difficulties of antiseptic liquid in Pakistan.

Stakeholders Analysis

The identification of a project's key stakeholders is an assessment of their

interests and the ways in which these interests affect the project and its viability.

Why carry out a stakeholder analysis?

Because it draws out the interests of stakeholders in relation to the problems

which the project you are seeking to address. It also identifies conflicts of interest

and potential conflicts. Identifies viability other than in pure financial terms (e.g.

includes social not just economic factors). This will eventually help the

organization by providing an overall picture to identify relationships between

different stakeholders.

In our project our stakeholders would be the Investors, Competitors, our

Customers, National or Political actors, international government agencies

Legislators, and the Government. Before making any decision for business we

need to analyze:

1. Our stakeholders’ strength, which means that we need to analyze the

stakeholders’ position on the reform issue, the level of influence they hold, the

level of interest they have in the specific reform and the group to which they

belong or can reasonably be associated with.

2. The level of influence depends on the quantity and type of resources and

power the stakeholders can marshal to promote its position on the reform. The

level of interest is the priority and importance the stakeholder attaches to the

reform area. Broadly, these attributes signal the capability the stakeholder has to

block or promote reform, join with others to form a coalition of support or

opposition, and lead the direction of the reform.

VISION

In this project our vision is to provide a quality research about introducing the

new antiseptic liquid in Pakistan. And afterwards may be the market leader in

near future.

STRATEGIC RECOMMENDATIONS

Market Entry Timing

In the market we are going to do business, there is only a sole competitor. If we

want to get the market entry then we must have an advertisement that would

attract the customers and they should at least try our product once. We can

make the entry any time because there is no time when the demand in the target

market is high. We just want an effective advertisement for the market entry.

STRATIGIES

Financial strategies regarding from where to get the finance, what type of loans

will be get, and all other financial decisions and matters.

R&D strategies: to make continuous improvement in the antiseptic liquid quality

according to our customer demand.

Marketing strategies: regarding the product, price, place (distribution channel)

and promotion of the product.

Human resource management strategies discuss in relate to find the quality

staff appropriate for this project completion

KEY SUCCESS FACTOR

Marketing:

Branding and marketing of antiseptic liquid is as essential as many of us injured

in doing our work. The traditional marketing tools include site advertisement, TV

and print media advertising and brochures. This study allocates 10% of the

revenue for advertising and promotional purposes.

Apart from the traditional marketing tools, this study suggests to focus more on

other marketing magnets that include interactive marketing, interactive marketing

may include educating the general public about the importance of antiseptic

liquid and its consumption requirements for their harm body areas through the

participation in seminars and in general public gatherings (e.g. College and

University gatherings).One of the marketing options is to sponsor public events

like hospital campaigns (Medical stores), distributing free brochures about

antiseptic liquid and its daily consumption. The interactive marketing may be

designed through seminars and workshops about the daily human consumption

requirements and diseases originating from the lack of antiseptic liquid.

Overall marketing strategy may change with the change of target market. A

market research study is recommended to design the different dynamics of

marketing before launching the new brand.

Following table gives the breakup of the marketing expense.

In %age if the marketing expense

TV(cable network) Advertisement 40%

SITE Advertisement 10%

Newspapers 38%

Magazines 4%

Point of Sales Marketing 8%

Product Packaging:

Product packaging and presentation is one of the main dynamics, which control

the flow of target customers towards the product. Packaging should be inline with

the industrial norms. Packaging may also vary with the understanding of the

target market. It is suggested that the bottles of 30ml, 100ml and 300ml capacity

should not puzzled. Bottles should be clear. The bottle should give a reflection of

the liquid. The opening of the bottle should be large enough to accommodate

outflow and inflow of liquid. The bottles should be placed in special racks and

strand meant for bottled antiseptic liquid at retail outlets. The color and the

design will create a positive perception for the new brand. The wrapper of the

bottles suggested to be on four-color printing and should have the following

information in addition to the logo of the company.

Antiseptic liquid specification

Certificate mark of the Pakistan Standards & Quality Control Authority

Expiry Date (Best Before Date)

A brief intro of the company with the address

Brand Name / Trade Name

Batch number or code number.

Availability:

In the first phase of the launch of the new brand, availability will also play the key

role in attracting the customers. It is suggested that the entrepreneur must

provide availability of the product to A-class, or B-class, or C-class retail outlets

or mass availability of the product (aggressive marketing). Since, the perception

of the product is also directly related with is availability so it is suggested that the

strategy for the availability of the product be designed according to the target

market and the perception and positioning the entrepreneur is targeting.

WORK BREAK DOWN STRUCTURE

`

THE ANTISEPTIC LIQUID PRODUCTION CAMPAIGN

PLANING

Project scope

Resource Strategy

Risk management

Finance management

Stack holders

Scheduling

Promotion Plan

CLIENT SURVEY

Need analysis

Survey

Data collect.

Analysis

Hypothesis

Conclusion

DESIGN

Structure

Leasing

Tenders

Agreement

Installation

Testing

Approved by Quality control department

Hiring

Promotion

Cable TV networks

Bill boards

Local magazine

Incentives to Retailers

Hierarchy

LOGICAL DIAGRAM

Project completion period

6 months and 21 days

Start

Planning21-days

Establish offices14-days

Staff hiring 10-days

Clint survey14-days

Purchasing order5-days

Infra structure

Consultants

Staff training30-days

Plant lay out30-days

Installation of equipment60-days

The process flow

The first step for setting up antiseptic liquid plant is the analysis of source of

silver. After the chemical analysis, the specifications of the antiseptic liquid plant

are set. After the siler iron plant, source silver is stored in the tank, after this

stage, silver is mixed with silver compounds and Hydrogen oxide. After this

stage, the reaction starts and after sometime it is in the shape of antiseptic liquid

and is ready to store in the bottles. Then antiseptic liquid is filled into bottles.

After filling bottles are taken into the warehouse or shipped to the retailers.

Process flow chart:

Requirement analysis

Requirement analysis is as follows:

Availability

In the first phase of the launch of the new brand, availability will also play the key

role in attracting the customers. It is suggested that the entrepreneur must make

it available for every consumer and every class. Since, the perception of the

product is also directly related with is availability so it is suggested that the

strategy for the availability of the product be designed according to the target

market and the perception and positioning the entrepreneur is targeting.

Sector & industry analysis

In the whole world and also in Pakistan there is only Competitor Company which has full market share in this antiseptic liquid sector. Dettol has some features that people do not like and its prices are also increasing due to sole manufacture in this industry, we have tried to remove those features that irritate people and this is our competitive advantage.

LEGAL REQUIREMENTS

The Pakistan Standard Quality Control Authority (PSQCA) was established under

section 3 of the Act-1996. The establishment of any antiseptic liquid plant in

Pakistanis required getting a license from the Pakistan Standards Quality Control

Authority. An application form, which can be obtained for Rs.100 only from the

office of the Pakistan Standard Quality Control Authority and it, is to be submitted

to the Pakistan Standard Quality Control Authority. The manufacturer is required

to have a laboratory and a technical person, who will be checking the samples for

constant quality. The team from the Pakistan Standard Quality Control Authority

then visits the plant and collects samples. After the conformity of the samples to

the standards the Pakistan Standard Quality Control Authority issues a license.

The Pakistan Standard Quality Control Authority has developed standards for

antiseptic liquid plants being established in the country are required to follow

these standards. A manufacturer could market bottled / antiseptic liquid without

obtaining a license from the Pakistan Standard Quality Control Authority. The

authority examines the availability of proper facilities including standardized

laboratory and antiseptic liquid processing plant for ensuring the quality of

antiseptic liquid with a team of experts. Manufacturing, Stocking and sale of

bottled antiseptic liquid without certification marks license is prohibited under the

Pakistan Standard Quality Control Authority Act. Violation of the Pakistan

Standard Quality Control Authority Standards is punishable by imprisonment for

one year or a fine of Rs.50, 000 or both.

The general requirements for establishing a bottled / mineral water plant as

developed by Pakistan Standard Quality Control Authority are as following:

Suitability

The assessment of the suitability of antiseptic liquid for human consumption shall

be based on consideration of its physical, chemical and microbiological

requirements and limits for toxic substances. The antiseptic liquid should be free

from all kinds of skin reactions and bacteriological contaminations that are

hazardous to health.

Packaging

The containers shall be hygienic suitable completely clean and shall not cause

any undesirable change in the color or quality of the liquid. It shall be packed in

hermetically sealed containers of Food Grade material to prevent contamination

of bottled liquid. Filling and sealing operations of containers shall be done in an

aseptic atmosphere so as to prevent any contamination.

Transportation

Bottled antiseptic liquid shall be transported by any suitable means of transport to

protect it from contamination.

Marking

In addition to the PS: 1985-1994 ® for Pakistan Standard for the labeling of Pre-

Packaged Foods, the following provisions shall apply.

Name of the product for example Safeguard antiseptic liquid

Brand name or trade name

Name and address of the manufacturer

Batch number or Code number

Date of Expiry

Chemical composition e.g. Magnesium, Potassium etc.

Pakistan Standard number

Sampling

In any consignment all the bottles of the same size and belonging to one batch of

the manufacturer or supply shall constitute a LOT Each bottle of the sample shall

be marked with necessary details of sampling and the bottles for bacteriological

testing shall be marked separately The bottles of the sample shall be stored in

such a manner that there shall be no deterioration of quality of water. The bottles

for bacteriological testing shall be brought to the testing laboratory within one

hour, of sampling. If this is not possible the bottles shall be stored at 10 ºC or

below and transported to the testing laboratory with in 24 hours. In case of small

units, the original packing shall be treated as sample.

MACHINERY & EQUIPMENT REQUIREMENTS

Most of the antiseptic liquid plants being installed in the country are reverse

osmosis based. Government also recommends the RO based technology. This

pre-feasibility study is based on the reverse osmosis plant. The details of the

machinery & equipment are as following.

Table: Machinery Details in Rs.

Machinery Name Quantity Unit Cost (Rs.) Total Cost

Reverse Osmosis antiseptic liquid

plant

1 1,4495,000 1,495,000

Ozonator (included

in the filling plant)

1 - -

Washing, Filling & Capping Plant

(inclusive of sales tax)

1 2,645,000 2,645,000

UV Lamp (included in the RO Plant 1 30000 30000

Total 4,170,000

LAND & BUILDING REQUIREMENTS

The total requirement of land for this project is more than 3 Acre in which we

erect the plant of sweet water as well as stored and packing as well.

Recommended Mode of Land Acquisition

Since antiseptic liquid is a kind of project, which needs an extended span of time

for its perception and brand recognition, so the recommended mode for the

acquisition of land owned or leased 99 years).

Suitable Location

This project has been developed with a focus on all over in Pakistan. As we have

selected the place in northern area which would be very cost effective and with a

powerful distribution channel we can send this product in the whole country.

KEY ASSUMPTIONS

Revenue Assumption

Plant Capacity liters per day 2,000

Production per month (liters) 45,000

Production of 300ml bottle per month 9,000

Production of 100ml bottle per month 13,500

Production of 1liter bottle per month 22,500

Sale price of 30ml bottle (Rs.) 20

Sale price of 100ml bottle (Rs.) 50

Sale price of 300ml bottle (Rs.) 100

Sales price growth rates can 10%

Maximum Capacity utilization 95%

RISKS INVOLVED

Market Risk:

The main risk involved for antiseptic liquid is that in international market the

people attitude is difficult to change from buying dettol and they are attach with it

even in Pakistan also.

In Pakistan:

In Pakistan, it can also face such risks as:

To set prices for its services.

To start operation efficiently by choosing target market.

Major risk from the competitors especially from Dettol, which has

approximately 95%, market share.

Pakistani people attitude

Most Important Risk:

The most important risk that antiseptic liquid can face in Pakistan is to make loyal

the customers with his services where a strong competitor, Dettol has captured

more than 6 millions clients.

Risk Management

If we efficiently mange the above stated risk then we can easily make market for

our product for competing the major competitor we have to take the first mover

advantage by introducing our product in Pakistan because till now no body has

introduced antiseptic liquid except Dettol and then we have to set competitive

prices of the product within the strong distribution channels. Project manager

should maintain the following documents for risk management.

Project Risk Register Project Risk log