2nd DELIVERABLE

POM102

ARANGUREN, Theresa Yna C.

LACSAMANA, Mark Lester C.
PRADO, Paula Nikole Q.
RAMIREZ, Vianca Marie R.
SARREAL, Joseph Gideon

Section D
Sir Angelo Tanchoco

Submitted on Februaury 15, 2010

 I. CAPACITY PLANNING

Breakdown of Costs (for the first year)

FIXED COSTS
Machineries P1,010,000
Workers (P8,000 x 12mo. x 20) 1,920,000
Administrative (P25,000 x 12mo. x5) 1,500,000
Rent (P150,000 x 12mo.) 1,800,000
Utilities (P20,000 x 12mo). 240,000
Lease of computer (P3500 x 12mo. x 5) 210,000
TOTAL FIXED COSTS P6,680,000

VARIABLE COSTS
Raw Materials (P81.75 per unit x 150,000) P12,262,500
Supplies (P15,000 x 12mo.) P180,000
TOTAL VARIABLE COSTS P12,442,500 or
P83 per unit

SELLING PRICE P320

BREAK-EVEN POINT= P6,680,000/ (P320-83)

= 28, 185.65 or 25,186

II. LOCATIONS PLANNING

There will be one production factory that will be built for producing the laptop sleeves made out
of recycled rubber with two (2) processing units, one for the recycling process of the rubber and another
one for producing the laptop sleeve. This will be situated at the Carmelray Industrial Park in Canlubang,
Laguna because it provides world class facilities for light to medium industries. Since one of the
intentions is to develop a somewhat eco-friendly product, the Carmelray Industrial Park is the appropriate
location to place because the park resolves and reunites the objectives of both industrial development and
environment preservation. It also provides technical training for trainers in fields of the mechanical and
electrical. The other facilities in the park include banking and fire-fighting facilities. Also, they offer 24-
hour protection and proper waste disposal.

The Carmelray Industrial Park has sufficient amenities that would provide for factories like
Meralco electricity, deep-well water, environmentally-acceptable sewage treatment plant, and ready-built
factories for those who would like to operate immediately. The industrial park is also very convenient in
accumulating materials and resources used for making the product since the suggested partner in getting
the rubber scraps that would be used for recycling is Silplas Trading, located only in San Juan, Manila.
Silplas Trading is the first option because they offer the right kind of rubber scraps- latex rubber scraps-
that are needed in order to make the ideal laptop sleeves. Canlubang, Laguna is also a convenient location
in importing different materials from different countries nearby like China and Korea. KB Adhesive
Korea, which offers rubber adhesive, already exports to the Philippines. Snap fasteners will be imported
from a professional snap fastener manufacturing company called Elastin located in Taiwan. Essentially,
the Carmelray Industrial Park can cater to the exports of different nearby countries and in different local
places to get the materials and resources that needed.

III. FACILITIES LAYOUT

To maximize the effectiveness of the production process, we designed the facility in such a way
that all components from the supply trucks, machines, storage area, down to delivery trucks, make a
smooth and continuous flow with a U-shaped pattern. The layout is made simple to maximize flexibility
whenever there is need for changes in the production process.

The parking space for supply trucks (A) are located just outside the storage area for raw materials
(B). Following the production process, the rubber will go through the hydraulic press machine (C) for
pressing, the rubber mixing mill (D) for mixing, the injection molding machine (E) for molding, and the
dispersion kneader (F) for kneading. Then, the neoprene fabrics will be attached to the rubber through the
adhesive machine (G). It would then go through the cutting machine (H) where it will be cut based on the
predesigned pattern. Fasteners and Velcro will be attached to the rubber through the snap fastener
machine (I) and the Velcro applicator machine (J). After inspection, the finished products would be
placed inside the storage area (K), ready for delivery to customers. A parking space (A) is also provided
for the shipping trucks.

Employees would be placed on the receiving and shipping bays for ease of transaction. Workers
would also be assigned per machine to ensure flow of production and for error prevention.
Safety Policy

All activities will be done in a way that ensures we do not injure people, endanger their health,
or violate any laws or regulations. In addition, we will conduct our business so that we are viewed as a
preferred member of the community because of our concern for the environment. The following is the set
of policies we will establish to ensure these expectations are met:

Plan every job by asking the following two questions:

Have I thought this job through and anticipated the unexpected?

Do I know how to do this job safely?

If the answer is “no” to either, STOP and re-plan the job or ask for help.
 Site management will provide all necessary facilities, training, resources, motivation, discipline,
and involvement to accomplish our goal of zero injuries and environmental incidents.

All hazards associated with any job or task will be identified, understood, and controlled up-front,
before the job begins. All sources of danger must either be eliminated or other safeguards (engineering
and administrative controls) put in-place before the job can begin. As a rule, Personal Protective
Equipment (PPE) will be required where needed.

Standards, procedures, and rules will be implemented to assist the administration of this policy
and provide a sound basis that clearly defines employee Safety, Health & Environmental responsibilities.
We will ensure initial and refresher training is performed against these standards so that each individual
understands and follows the rules applicable to their assigned tasks.

We shall use audits for continuous improvement in our safety management.

IV. WORK SYSTEM DESIGN

Work design is simple for the rubber laptop sleeves as technology has made things very simple.
Operators for each of the equipment are the most important part here. First the recycled rubber dust is
melted and mixed for the hydraulic press.

Operators would be needed to work eight hour shifts.

The work place should be constantly well lit as the handling of hot rubber can be dangerous. The
workplaces should also be well ventilated and within a temperature of 40 to 32 degrees to make sure that
the rubber does not cool too quickly.

Ventilation is a number one concern as the rubber will emit fumes. For the basic rubber
processing- adhesive application, velcro application, cutting machine operating and snap fastening, hand
protection- gas masks and goggles should be mandatory for each worker.
 For operating the hydraulic press, rubber mixing mill, injection molding machine, dispersion
kneader, adhesive machine and cutting machine, hard hats must also be worn for safety. Protective
jumpsuits that cover the entire body should also be worn when handling these machines as a safety
precaution.

Air-conditioning is not recommended when handling heavy machinery as it would require an

enclosed workplace and the lowered temperature would cool the rubber to quickly.

For the manual labor of handles application as well as velcro and snap fastener machine, air
conditioning can be recommended to lower the temperature to 26-28 so as to keep the workplace cool and
conducive to work.

The only completely manual task of the process is the Handle application. The workplace should
also be well lit as it requires precision work. Workers should be comfortable yet not too comfortable with
their chairs. A basic padded bench which allows the legs to be bent at 90 degrees with the feet flat on the
floor will suffice. A lamp and a magnifying glass per each work station may be necessary. A well
lightened using fluorescent flood lights will work as well.

Due to the fumes emitted by the rubber along with the constant pressing, melting and mixing,
shifts may also be shorted to lessen the exposure to harsh chemicals.

V. SUPPLY CHAIN MANAGEMENT

Supply Chain Management is the integration of key business processes from end user
through original suppliers that provides products, services and information that add value to the
customers, shareholders and employees.

We shall strengthen the end to end supply chain capability to deliver financial results for our
laptop sleeves business by focusing on the following areas:

• Customer Focus: World class customer service by delivering to the final customer the right
product at the right time and place for the right price.

• Standard Metrics: Measures performance of the entire supply chain as well as each function
 to constantly improve performance.

• People: Develop skills and competencies to manage supply chains, and

• Managing Processes: Processes which will enable management of supply chain in an

integrated and optimized way.

The main managing processes will be the Demand Review as outlined below that will provide
the basis for Supply Management reviewed by regular Supply Review Meetings by key Operations
personnel.
Demand Review

PROCESS PARTICIPANTS INPUTS AGENDA

Demand Demand • Strategy • Performance
Review – Manager • Sales Forecast Analysis –
manages Mktg. Manager • Customer Plans Forecast Error,
performance and Sales Manager • Mktg. Bias,
ensures Key Account Intelligence Sensitivities
ownership for Mgrs • Statistical • Review demand
market and Customer Projections plans
customer plans. Service • Review market
• Distribution
Finance Mgr and product
Chain Inventory
• Product Mgt intelligence
• Integrate new &
change product
and strategies
plan
• Identify changes,
risks,
opportunities

Supply Review

PROCESS PARTICIPANTS INPUTS AGENDA

Supply Review Operations • Strategy • Review supply
– Manages Leader • Demonstrated plans
performance, Supply Chain Performance • Integrate
capability and Mgr Internal & External demand and
flexibility, and Scheduler Supply Chain product/
alternative Operations • Seasonality strategies plan
supply Sourcing Patterns • Assess vs
scenarios. Finance Mgr • Improvement Plans sourcing
(Optional)
 • New Products strategies
Phase In /out & • Assess capacity
Change Activity • Identify
• Forecast changes, risks,
• Assumptions, opportunities,
Vulnerabilities & and remedial
Opportunities actions
(Upside/Downside) • Review issues
& options
o Materials
o Capacity

The company chooses to order and supply itself of raw materials via a single supplier for each
material. This is most true for our primary raw material which is the recycled rubber. Choosing a single
supplier is based on the following reasons:

1. The primary material- rubber- is very generic, meaning the quality of the rubber is not really
distinguishable and is almost the same with every supplier. Also, the actual processing of the
rubber will be done by our company.

2. The company considered to have a closer supplier in case of immediate need of rubber. This
will help lessen delivery time and maximize production time.

The supplier will be responsible for delivery of the rubber to our facility.

Inventory Management Policy

The following policies should be strictly followed and be done by a specific team:

• There should always be extra sleeves in case of accidental defects or emergency orders.

• Inventory will be checked every two days and after each delivery of the laptop sleeves.
 • Counting of inventory (sleeves) prior and after delivery must be done by both the inventory team
and the delivery team to check and double check the numbers. This also minimizes error and
assumes responsibility and accountability to both the inventory and delivery team.

• The company fill follow a FIFO (first in first out) policy.

Warehousing and Storage

• Finished products shall each be placed in a protective plastic cover. They will then be stored in
boxes that are to be placed in rooms to await delivery.

• Products shall be placed in rooms well- protected from various elements such as rain, extreme
heat and even pests.

• Storing products will not exceed 20 pieces per box to eliminate the possibility of damaging or
deforming the products.

Distribution

As mentioned earlier, distribution will be done on a First In- First Out (FIFO) basis. This is to
ensure that the delivered products are still in its best form.

Distribution of products will be done on a weekly basis. Distributors will be supplied every week
with a specific number of products.

Decisions for distribution will be done on a geographic basis.