• Production Planning and Implementation
• Table — Profitability of various products as gross percentage of cost
• Preparation of a Project Report
• Plan for Product Manufacturing
  

Production Planning and Implementation (Pg 217 - 218)

The feasibility study is essential for implementation of such a project. It should cover capital investment on land, building, equipment, infrastructure, working capital, manufacturing and marketing cost, and financial projections to work out the viability of the project. Once its viability is established, a detailed project report should include the following ten steps for project planning and implementation:

First Step: Appoint a consultant to plan the project in relation to the proposed market, design the dairy plant, and select an architect and a structural consultant. Prepare tender documents for civil works and plant equipment.

Second Step: After quantifying the product mix, work out the process flow diagram showing the material balances.

Third Step: Formulate dairy plant specifications. The proposed design should include:

• Space required (Floor Area).
• List the equipment, their specifications and capacities.
• Prepare the plant layout, including process, service and storage.
• Provide for service requirements…

Fourth Step: Prepare for plant construction by attending to the following:

• Selection of the site;
• Survey the availability of essential services like water, electricity, all-weather road, communications, etc; and,
• Tender for civil works, equipment supply and installation, and the subsequent award of contracts.
  

Fifth Step: Formulate the marketing plans for design of brand name, logo, packaging, procurement of packaging and labelling materials. Appointment of core staff, including plant manager, administration and marketing personnel.

Sixth Step: Arrange for sanctions/approvals/clearances by the Central/State/local statutory authorities.

Seventh Step: Coordinate the civil construction work with the suppliers for timely installation of the dairy equipment and machinery.

Eighth Step: Complete the civil construction to the stage when equipment can be installed.

Ninth Step: Select and appoint supervisors and the operating staff. Erection, installation and commissioning of the plant and machinery.

Tenth Step: Place the products in the market through well-established marketing channels.

The techno-economic feasibility study is presented in four parts:
Part I: Investment opportunities;
Part II: Plan for product manufacturing;
Part III: Development of plant layout; and,
Part IV: Cleaning and sanitization.

Table 4.1.1 Profitability of various products as gross percentage of cost (Pg 220)

A project report for setting up a new dairy unit or expanding an existing one should provide the required technical information under the following headings:

Introduction: The project report should have a brief introduction about the potential of the area vis-à-vis local demand for milk/dairy products as well as infrastructural facilities, marketing centres, and their accessibility.

Objectives: Specific mention should be made about the project's purpose with reference to the proposed product-mix, size of the unit and phasing.

Entrepreneur(s): Their experience in the proposed enterprise and their financial position should be given. If it is a partnership firm or company, names of directors and their financial worth, share capital, by-laws and memoranda of articles of association need to be given.

Location: The specific site and its area, distance from the nearest town where major inputs are available should be stated. Availability of water, electricity and all-weather road near the unit must be indicated.

Management: The management of an enterprise can be broadly divided into the following:

• Production management: Production management includes planning, milk procurement, plant operation and equipment maintenance, optimum use of labour, etc.
• Marketing management: Marketing the products should be so arranged as to get a reasonably good price, as is prevailing in the market. As the product price varies from season to season, the average selling price should be indicated. While making projections for four/five years, the entrepreneur may consider some percentage of increase in the prices based on the growth trend expected from the unit. For this purpose, one has to be vigilant about the market fluctuations and try to tap the unexploited/underexploited area. Knowledge of various marketing techniques and ability to market the produce with minimum overhead charges are the prerequisites of any successful entrepreneur. He should know the scientific methods of processing, storage, preservation and transport.
• Financial management: It is needed at the following two stages: (i) When the unit gets financial assistance from the credit institution; and, (ii) When the unit starts generating income.
  

Marketing: The entrepreneur should indicate specific marketing arrangements such as:

• Annual contracts with any organization/hotels, etc.;
• Selling the produce in the wholesale market;
• Relying upon traders who procure the produce from his unit;
• Retail market, if any, and the percentage of sale on this account; and,
• Any other marketing arrangements.

Plan for Product Manufacturing (Pg 230)

The plan of production for each product is presented in two ways:

1. The technology aspects through mass balance process flow diagrams; and,
2. The engineering aspects covering building plan with layout of equipment and their list.
   

The mass balance diagrams contain the following information:

1. The initial quantity of milk (fat & SNF).
2. Additional input during the manufacturing process such as milk powder to raise SNF, cream to raise fat, sugar for sweetening the products and other functional ingredients for taste and flavour.
3. Total solids and moisture in the end-product.
   The equipment with their rated capacity is selected on the basis of mass balance of each product.