ENTREPRENEURSHIP

REPORT ON

ESTABLISHING A SMALL SCALE INDUSTRY

FOR MANUFACTURING OF

“STAINLESS STEEL SCREWS”

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE

AWARD OF THE DEGREE OF

BACHELOR OF TECHNOLOGY

(MECHANICAL ENGINEERING)

SUBMITTED TO: SUBMITTED BY:

ACKNOWLEDGEMENT

It gives me great pleasure to present this project report on “SMALL SCALE

INDUSTRIES”.

I would like to express my sincere thanks, with a deep sense of gratitude to my

guide in Mechanical Department

for his kind interest, valuable guidance and constant motivation which is primarily

responsible for successful completion of this project report.

I am also thankful to all the faculty members of mechanical Engineering

Department for their valuable suggestions and timely help. The well-experienced

and skilled staff of mechanical department imparted me good knowledge about

the small-scale industries. I have enhanced my technical knowledge to a great

extent by preparing this project report under the guidance of my guide and other

faculty members of mechanical department. At last, I would like to thank the

management of my college & university for introducing this project report in our

study curriculum.

CONTENTS

Description

Introduction to Small Scale Industry

How to Start a Small Scale Industry

Registration of small scale industry

Incentive facilities

Type of constitutions

Financial Requirements

Small Industrial Development Organization

Concept of marketing

Important schemes of Financial SFC

Concept Of Marketing

Steps In Marketing Management

Product Classification

Organization Structure Of SSI

Organization Under SSI

Product Specification

Process Flow Chart

Project Economy

M/C and Raw Materials Suppliers

PROJECT REPORT

Under Small Scale Industries Schemes

1. Firm Name:-LAKSHMI PRECISION SCREWS Pvt. Ltd.

2. Address:- Bhagat Singh Marg, Rohtak, Haryana

3. Nature of Business: - Production Of Stainless Steel Wood Screws

4. Target:- 1849 Packets Per Day

INTRODUCTION

Under Section 7 of the Micro, Small and Medium Enterprises Development Act, 2006, the

micro, small and medium enterprises are defined as under:-

Micro enterprises, where the investment in plant and machinery does not exceed twenty

five lakh rupees;

A small enterprise, where the investment in plant and machinery is more than twenty-five

lakh rupees but does not exceed five crore rupees; or

A medium enterprise, where the investment in plant and machinery is more than five

crore rupees but does not exceed ten crore rupees;

Small industry sector has performed exceedingly well and enabled our country to

achieve a wide measure of industrial growth and diversification. By its less capital intensive and

high labor absorption nature, SSI sector has made significant contributions to employment

generation and also to rural industrialization.

Under the changing economic scenario, SSI has both the challenges and

opportunities before them. The business can compete on cost, quality and products at domestic

and international level only if ideal investment in technology production process, R&D and

marketing are made. Infrastructure bottlenecks are not completely solved. The promotional

activities for SSI in India need to concentrate on improved credit flows, human resource

development, appropriate technology and funds for modernization.

So, this is the appropriate time to set up projects in the small-scale sector. It may be

said that the stance is optimistic, indeed promising, given some protection. This expectation is

based on an

essential feature of the Indian industry and the demand structures. The variety in the demand

structures will ensure long-term co-existence of many layers of demand for consumer products

/technologies / processes. There will be flourishing and well grounded markets for the same

product/process, differentiated by quality, value added and sophistication. This characteristic of

the Indian economy will allow complementary existence for various diverse types of units.

However, this is not to say that there are no shortcomings within the industry, or in

public policy relating to it. Small industries are faced with numerous problems major and minor,

which make them either uncompetitive, or sick. An attempt is made to address some solutions

that can improve their productivity.

The Government has been taking various measures from time to time in order to enhance the

productivity, efficiency and competitiveness of the SSI sector.

The strategy adopt by the government is:-

1. Public entrepreneurship should remain confined only to those industries & sector where

private enterprise, individual or corporate, is generally not attracted. Existing public

entrepreneurship be improved through better management & by putting relative greatly emphasis

on research &development. There is need to streamline the R&D wing of public sector

enterprise.

2. All possible efforts are made very seriously (not casually) for the development of an industrial

culture. It should be realize that the central core of entrepreneurship is the motive force since by

its nature; entrepreneurship implies positive action and individual with the right kind of

combination of ability can pursue their goal with unremitted courage and enthusiasms.

3. There is need to development management education and industrial training.

4. The development of backward region / area constitutes a new challenge. Program for their

development be drawn up and should be effective implemented.

5. Adequate measure is a must for mobilizing & casting the entrepreneur’s talent in the country.

In this context, it should be realized that entrepreneurs are not the grief of a particular classes.

6. Economic administration by the state should be improved and made more effective so that

economic policy may be fully achieving their objective in the overall interest of economy.

7. Financial institute should provide adequate and timely credit and timely create and technical

assistance, especially to the small and medium sized enterprise. They may also impart

knowledge about the need of economy and they should file their massive data in term of growth

of new entrants or entrepreneurs in the field of industry.

For achieving these objectives, the specific schemes / programmes undertaken by the

organisations of this Ministry seek to facilitate / provide one or more of the following for the

MSMEs:

Adequate credit from financial institutions/banks;

Funds for technology upgradation and modernization;

Adequate infrastructural facilities;

Modern testing facilities and quality certification laboratories;

Modern management practices and skill upgradation through advanced training

facilities;

Marketing assistance;

The Ministry of Small Scale Industries is implementing following Schemes/Programmes for

promotion and development of SSIs in the country:

Surveys, Studies and Policy Research

International Cooperation

Assistance for strengthening of Training Infrastructure of Existing

New Entrepreneurship Development Institutions

THE ROLE OF GOVERNMENT TOWARDS SSI

After independence, Indian planners and policy-makers felt that protection was

essential to the development of a strong and indigenous economy. The Indian state played an

integral role in the

industrial and economic development of the country resulting in a dominant public sector and

heavily

regulated private sector. Viewing this, the protection was also extended to SSI as it was an

important

tool in employment generation, value creation and poverty alleviation.

These SSI also support entrepreneurial talent and skills, stimulate personal savings,

and help in developing innovative and appropriate indigenous technology, providing dynamism

and contributing to competition (Rajendran 1989). Over 800 products were exclusively reserved

for SSI, where some of the products produced were purchased by government agencies. Apart

form this, supply of scarce materials, input price concessions like lower interest rates and

numerous fiscal measures such as excise duty exemptions and other tax concessions were also

given (Source-Business Today, September 10, 2006). Government has reserved certain products

for manufacture in the small scale sector in areas where there is techno-economic justification for

such an approach. Large/Medium units can; however, manufacture such reserved items provided

they undertake to export 50% or more of their production. As on March 2005, the total number

of items reserved for small-scale sector is 506.

In the second plan (1956-61), the SSI was given priority due to its consequence in

creation of

diversified employment opportunities and wide dispersal of industrial production. The policies

proposed then, were, and remain the main backbone of public policy relating to the SSI. What

we see however is that this policy has been largely unhelpful, if not detrimental to the

development of the sector. The policy regulations relating to the SSI are such that they ensure

that units stay just small.

Promotional measures aim to increase the efficiency and economic viability of

small units by

Providing infrastructure facilities and improving access to markets. On the other hand,

protective measures give small units preferential treatment. Continuous measures are those

benefits which a small unit may avail of as long as it falls under that category, while one-shot are

those which may be availed of only once, and tends to be discretionary in nature. Most policies

like preference in government purchases; lower interest rates etc. are continuous in nature.

Discretionary measures are those, which require an examination on a case-by-case basis and are

not blanket measures available to all units, which fall under the definition of small. Non

discretionary, by implication, are those measure which are based on some objective criteria and

are applicable to all units that meet the criteria.

The government has also provided measures such as greater infra-structural support,

more and

easier availability of credit, lower rates of duty, technology up-gradation, assistance to build

entrepreneurial talent, facilities for quality improvement, and export incentives (Parthasarathy,

1996).

The Ministry of Small Scale Industries (MoSSI) designs policies, programmes, projects and

schemes in consultation with its organizations. It also performs the function of policy advocacy

with other Ministries/Departments of the Central Government and the States and Union

Territories. Implementation of the policies and programmes/projects/schemes for providing

various support services to the MSEs is undertaken through its attached office, namely, the

Office of Development Commissioner (Small Scale Industries) also known as Small Industries

Development Organisation (SIDO) and the National Small Industries Corporation (NSIC) Ltd., a

public sector undertaking of the Ministry. There are three national level Entrepreneurship

Development Institutes supported by the Ministry viz. National Institute of Small Industry

Extension Training (NISIET), Hyderabad, National Institute of Entrepreneurship and Small

Business Development (NIESBUD), NOIDA and Indian Institute of Entrepreneurship (IIE),

Guwahati.

Advantages of small business

A small business can be started at a very low cost and on a part-time basis. Small

business is also well suited to internet marketing because it can easily serve specialized niches,

something that would have been more difficult prior to the internet revolution which began in the

late 1990s. Adapting to change is crucial in business and particularly small business; not being

tied to any bureaucratic inertia, it is typically easier to respond to the marketplace quickly. Small

business proprietors tend to be intimate with their customers and clients which results in greater

accountability and maturity.

Independence is another advantage of owning a small business. One survey of small business

owners showed that 38% of those who left their jobs at other companies said their main reason

for leaving was that they wanted to be their own bosses. Freedom to operate independently is a

reward for small business owners. In addition, many people desire to make their own decisions,

take their own risks, and reap the rewards of their efforts. Small business owners have the

satisfaction of making their own decisions within the constraints imposed by economic and other

environmental factors. However, entrepreneurs have to work very long hours and understand that

ultimately their customers are their bosses.

HOW TO START A SMALL SCALE INDUSTRY

The steps involved in starting a small scale industry are:-

Product identification: conduct market survey and study the product as regard their

demand in the market.

Check whether it is a seasonal product or it has demanded throughout the year.

Study similar product available in the market that can be probable competitor. Analyze

them as regards their utility, quality and cost.

Find whether can be exported.

Decide the product that you are going to manufacture, on the basis of:-

a) Market Survey

b) Financial implication involved

c) Technical knowhow available

d) Experience in the line, etc.

Preparation of preliminary project report to get rough idea on machinery, raw material

and financial requirement.

Select a proper site for locating the unit.

1. Take a building for factory on hire or construct your own factory building.

2. Get yourself conversant with the rules and other information available from small-scale

industries, Ministry of Industry, New Delhi.

3. Prepare a scheme in detail to manufacture the selected product such a scheme should

include the requirement of and the approximate cost of:-

I. Land and building

II. Machinery, tools and other equipment

III. Direct labour

IV. Indirect labour

V. Direct material cost

VI. Indirect material cost

VII. Selling and distribution overheads

VIII. Working Capital for a unit time

IX. Depreciation

X. Total production cost per unit time

XI. Percentage of profit.

Make a detailed project report

apply for registration.

The scheme after it has been prepared is sent for approval to the Directorate of Industries

of the particular state.

A small scale unit has to get itself registered with the Directorate of industries in order to

avail various facilities provided by the government, such as:-

I. Financial assistance

II. Raw materials water and power

III. Import license

IV. Factory accommodation

V. Government order

If required apply for loan.

Apply for income tax and sales tax numbers.

Recruit personal.

Conduct trial run to see whether the desired quantity and quality of product is coming.

REGISTRATION OF SMALL SCALE INDUSTRIES

REQUIREMENT

Even is State Directorate of Industries does not demand for licensing under development of SSI’s

but we should go for its registration for our profit. Some special things are there which are

necessary to be licensed. The incentive scheme provided by the government is also provided to

those firms which are registered so for this reason registration is beneficial.

The registration of SSI is of two types:-

1) Provisional registration.

2) Permanent registration.

The provisional registration is provided to the unit for starting two years. This is provided before

production. If still the firm could not run in actual production it can also be renewed by state

directorate of industries.

FINANCIAL AID FOR SSI

Credit is the prime input for sustained growth of SSI and its mobilization for meeting fixed and

working capital needs poses the foremost problems. Credit is provided for creation of fixed

assets like land, building, plant and machinery is called long term credit. These packet ages of

assistance are providing to SSI by a large number of organization operative at national &state

level. Development program are being carried out at two level

a) National level

b) State level

AGENCIES WHICH WORK AT NATIONAL LEVEL ARE:-

a) Small Scale Industrial Board (SSIB)

b) Small Scale Industries Development Organization (SIDO)

c) National Small Scale Industrial Corporation (NSIC).

AGENCIES WHICH WORK AT STATE LEVEL ARE:-

a) State Directorate of Industries (SDI)

b) District Industrial Center (DIC)

c) State Small Industrial Corporation (SSIC)

d) State Financial Corporation’s (SFC’s)

e) Commercial Banks

f) Small Industries Development Bank of India (SIDBI).

Credit provided for running the industry for its day-to-day requirement for purchasing raw

material and other input like electricity and water etc. Apart from this, credit facilities up to

maximum of Rs.25lakhs are provided through Credit Guarantee Fund Trust in collaboration with

SIDBI and Govt. of India.

The SSI is provided working capital by commercial banks and in some cases by cooperative

banks and regional rural banks.

Term loans are provided by State Financial Corporations (SFCs), Small Industries

Development

Corporations (SIDCs), National Small Industries Corporation (NSIC) and National Bank for

Agriculture and Rural Development (NABARD). Financial assistance from NSIC and to some

extent from SIDCs is available in the form of supply of machinery on hire purchase

basis/deferred payment basis. Small sized SSI and tiny units also get some term loans from

commercial banks along with working capital in the form of composite loans.

The Small Industries Development Bank of India (SIDBI) provides refinance to these

institutions. Such refinance comprises assistance provided to State Financial Corporation Bills,

Finance

Scheme, Special Capital/Seed Capital Scheme, and new debt instruments and to National Small

Industries Corporation. Long-term loan are provided to the smalls scale industrial units by SFCs

mainly through Single Window Scheme and National Equity Fund as also direct assistance

provided to State Financial Corporations in the form of refinance. Some part of working capital

for pre-operative expenses is also provided by State Financial Corporations to Small Scale

Industrial Units under the Single Window Scheme.

SMALL INDUSTRY DEVELOPMENT ORGANISATION (SIDO)

The Small Industry Development Organization (SIDO) also known as the Office of the

Development Commissioner (SSI) is an apex body for assisting the Ministry in formulating,

coordinating, implementing and monitoring policies and programmes for the promotion and

development of small scale industries in the country and is headed by the Development

Commissisioner (SSI).

For details the organisation may be contacted at the following

address :

Additional Secretary and Development Commissioner (SSI),

7th Floor, NirmanBhavan,

New Delhi – 110 011

Website : www.laghu-udyog.com or

www.smallindustryindia.com

NATIONAL SMALL INDUSTRIES CORPORATION (NSIC) LTD

NSIC continues to implement its various programmes and projects throughout the country to

assist SSI Units. The Corporation has been assisting the sector through the schemes and activities

such as Supply of both indigenous and imported machines on easy hire-purchase terms,

Composite term loan scheme, Credit rating for small scale industries, Procurement, supply and

distribution of indigenous and imported raw-materials, Marketing of small industries products,

Export of small industries products and developing export-worthiness of small scale units,

Enlisting competent units and facilitating their participation in government Stores Purchase

Programme, Training in several technical trades, Sensitizing SSI units on technological

upgradation through software Technology Parks and Technology Transfer Centres, For details

the organisation may be contacted at the following

address:

Chairman-cum-Managing Director,

National Small Industries Corporation Ltd.,

NSIC Bhawan,

Okhla Industrial Estate,

New Delhi – 110 020

Website : www.nsicindia.com

NATIONAL INSTITUTE OF SMALL INDUSTRY EXTENSION

TRAINING

(NISIET), HYDERABAD.Assisting in the promotion, development, and modernization of small and medium enterprises

(SMEs) to progress towards success and prosperity.

For details the organisation may be contacted at the following

address :

Principal Director,

National Institute of Small Industry Extension Training,

Yousufguda,

Hyderabad – 500 045

Website :www.nisiet.com

NATIONAL INSTITUTE FOR ENTREPRENUERSHIP AND SMALL

BUSINESS DEVELOPMENT (NIESBUD), NOIDA

The National Institute for Entrepreneurship & Small Business Development (NIESBUD) is a

registered society under the Ministry of Small Scale Industries. The major activities of the

institute include, development of model syllabi for training of various target groups, providing

effective training strategies, For details the organisation may be contacted at the following

Address :

Executive Director,

National Institute for Entrepreneurship and Small Business

Development,

A-23, Sector-62,

Industrial Area, Phase- II,

Noida - 201301,

U.P, India

Website :www.niesbud.com

STATE FINANCIAL CORPORATION

Almost every state has its own financial cooperation to provide machine and long term loans

small and medium sale industries. Amount of loan varies from Rs. 5000 to Rs. 6 Lakh and these

are repayable in equal installments spread over a period of 10-12 years.

Important schemes of financing SFC are

1) A loan scheme for financing of village and cottage industries. Under this scheme they are

financed to the extent of Rs. 25,000 and the interest rate is very low.

2) Assistance to tiny units – these grant assistance up to Rs. 2.00 lakh.

3) Scheme for technical entrepreneur –in order to encourage self employment these corporation

provide financial assistance up to Rs.2.00 lakh at very low interest rate to such technical

entrepreneurs who have acquired a diploma or degree in any discipline of engineering .

4) Loans to hotel industry

5) Scheme for SC/ST –Grant financial assistance to SC/ST entrepreneurs at a nominal margin

rates are charged at the rate of 10%.

6) Scheme for physically handicapped –these provide financial assistance up to Rs. 3.00 lakh at a

rate of 10%.

COMMERCIAL BANKS

SBI and its subsidiary banks and other nationalized banks provide liberal term loans and

working capital to small scale entrepreneurs and these loans are advanced for purchase of

machine and material and to the technical entrepreneurs to encourage self employment.

Specialized institute like, Central Institute of Tool Design, Hyderabad, Central Tool Room,

Ludhiana and Kolkata, Central Institute of Hand Tool Jalandhar, Institute for Design of

Electrical Measuring Instruments (IDEMI) Mumbai, Integrated Trading centre, Nilokhedi,

National institute of small Industry Exton, Hydrabad and National Institute for Entrepreneurship

and Small Business Development. They conduct special courses, programmers, Workshops,

training programmers for the benefits of small scale industries.

Credit Support

Credit is the prime input for sustained growth of small scale sector and its availability continued

to be a matter of concern. To provide credit support to the various SSI units various policies have

been formulates by the GOI. Various institutes like SFC, SIDC, NISC, and SIDBI are

providing financial supports to various SSI units.

CONCEPT OF MARKETING

The marketing concept is the philosophy that firms should analyze the needs of their customers

and then make decisions to satisfy those needs, better than the competition. Today most firms

have adopted the marketing concept, but this has not always been the case.

In 1776 in The Wealth of Nations, Adam Smith wrote that the needs of producers should be

considered only with regard to meeting the needs of consumers. While this philosophy is

consistent with the marketing concept, it would not be adopted widely until nearly 200 years

later.

To better understand the marketing concept, it is worthwhile to put it in perspective by reviewing

other philosophies that once were predominant. While these alternative concepts prevailed

during different historical time frames, they are not restricted to those periods and are still

practiced by some firms today.

The Production Concept

The production concept prevailed from the time of the industrial revolution until the early 1920's.

The production concept was the idea that a firm should focus on those products that it could

produce most efficiently and that the creation of a supply of low-cost products would in and of

itself create the demand for the products. The key questions that a firm would ask before

producing a product were:

Can we produce the product?

Can we produce enough of it?

At the time, the production concept worked fairly well because the goods that were produced

were largely those of basic necessity and there was a relatively high level of unfulfilled demand.

Virtually everything that could be produced was sold easily by a sales team whose job it was

simply to execute transactions at a price determined by the cost of production. The production

concept prevailed into the late 1920's.

The Sales Concept

By the early 1930's however, mass production had become commonplace, competition had

increased, and there was little unfulfilled demand. Around this time, firms began to practice the

sales concept (or selling concept), under which companies not only would produce the products,

but also would try to convince customers to buy them through advertising and personal selling.

Before producing a product, the key questions were:

Can we sell the product?

Can we charge enough for it?

The sales concept paid little attention to whether the product actually was needed; the goal

simply was to beat the competition to the sale with little regard to customer satisfaction.

Marketing was a function that was performed after the product was developed and produced, and

many people came to associate marketing with hard selling. Even today, many people use the

word "marketing" when they really mean sales.

The Marketing Concept

After World War II, the variety of products increased and hard selling no longer could be relied

upon to generate sales. With increased discretionary income, customers could afford to be

selective and buy only those products that precisely met their changing needs, and these needs

were not immediately obvious. The key questions became:

What do customers want?

Can we develop it while they still want it?

How can we keep our customers satisfied?

In response to these discerning customers, firms began to adopt the marketing concept, which

involves:

Focusing on customer needs before developing the product

Aligning all functions of the company to focus on those needs

Realizing a profit by successfully satisfying customer needs over the long-term

When firms first began to adopt the marketing concept, they typically set up separate marketing

departments whose objective it was to satisfy customer needs. Often these departments were

sales departments with expanded responsibilities. While this expanded sales department structure

can be found in some companies today, many firms have structured themselves into marketing

organizations having a company-wide customer focus. Since the entire organization exists to

satisfy customer needs, nobody can neglect a customer issue by declaring it a "marketing

problem" - everybody must be concerned with customer satisfaction.

The marketing concept relies upon marketing research to define market segments, their size, and

their needs. To satisfy those needs, the marketing team makes decisions about the controllable

parameters of the marketing mix.

In business and engineering, new product development (NPD) is the term used to describe the

complete process of bringing a new product or service to market. There are two parallel paths

involved in the NPD process: one involves the idea generation, product design and detail

engineering; the other involves market research and marketing analysis. Companies typically see

new product development as the first stage in generating and commercializing new products

within the overall strategic process of product life cycle management used to maintain or grow

their market share.

STEPS IN MARKETING MANAGEMENT

1. Product planning

2. Sale Forecasting

3. Pricing Policy

4. Distribution Strategy

5. Role of Advertising (personal selling)

6. Quality

1. Product planning:-product planning may be defined as “the act of marketing out and

supervising the search, screening, development and commercialization of new product,

modification of existing line.”

Product planning involves three important considerations

a) The development and Induction of new ideas.

b) The modification of exiting lines as may be required in term of changing costumer’s need

and performance.

c) The discontinuance of elimination of marginal or unprofitable product.

Product can be classified as:-

1. Customer products

2. Industrial products

3. Defense products

1. Costumer products:-goods design for use ultimately by the costumer or household and in

such from they can be used without commercial processing.

2. Industrial products:-goods which are designed to be sold primarily for use in producing

goods destined to be sold primarily to the ultimate consumers.

2. Sale Forecast

Definition: - a sales forecast is an estimate for the amount or unit sale for a specified future

period under a purposed marketing plan or program.

As define by American marketing association it is “an estimate of sales in dollars or physical

units for a specified future period under a purposed marketing plan or program and under an

assumed set of economic and other forces outside the unit for which forecast is made.”

Marketing of proper sale forecast require an assessment of:-

1 The outside uncontrollable forces likely to influences the company sales.

2. The internal proposed changes in the marketing strategies and tactics of the company which

are likely to affect the sale.

Sales forecast can be for a specified product line or can be for a market as a whole or for any

portion of it. According to the time period, the sales forecast can be divided under three types-

1. Short Run Forecasts: - which generally extends from a few weeks to about six months or at

most one year in future. Companies mostly do this as day-to-day forecasts for their production

control needs and to plan for long term financial needs.

2. Medium Range Forecasts: - which extends from one year to about four years into future.

This type of forecasting is important for

a) Estimating profits, budgeting expenses etc.

b) Determining dividing policy

c) Deciding rate of maintenance expenditure

d) Determining schedule of operation.

It is use full for the following purposes:-

a) Estimating inventory requirement

b) Providing adequate shipping facilities

c) Assessing production worker requirements.

d) Estimating working capital needs

e) Setting production runs for each product

f) Fining sales quotes

3. Long Range Forecast: - Extending to least five years into futures and in case of really large

organization extending over a longer period up to ten years or even more.

It is useful in following ways:-

1. Anticipating the magnitude and timing of capital expenditures required for new facilities in the

future.

2. Determining probable trends and range of cash in flow from sales.

3. Estimating companies long range personnel needs.

4. Highlighting futures problems.

3. Pricing polices: - Pricing is a very critical decision. Pricing decision is not easy to make.

Hence sound pricing polices must be adopted to ensure that the originations secure satisfactory

profit. For pricing decision a marketing manager has to be familiar with economic concept useful

in pricing decision. He has to consider various pricing factor which infusing price a part from

cost such as costumer characteristics, the economical product characteristics, competitive

environment and government control whenever applicable. The pricing of the product materially

affected the demand for it as well as the origination competitive ability for expenditure if the

quality of the product is to be improved this may be possible only if the costumer are willing to

pay higher price for it. Beside, if the product is not properly priced there might be reluctance

from the channels of distribution.

4. Distribution Strategy: - distribution may be defined as an operation or a series of

operation , which physically bring goods manufactured or produced by only particular

manufactured into the hands of the final consumers to the users . Distribution strategies consist

of distribution or sub-dividing the total products of a manufacturer on a geographical basis to

various specific markets. There may be a state market, a National Market or even a worldwide

market for the production while defining a strategy we have to deal with two aspects. First, is

the organizational aspects, it is concerned with how and through what channels we should

distribute. For this general marketing policy is responsible for deciding the various channels for

distribution. Secondly, is the operational aspect of distribution or the physical distribution, it is

concerned with moving of goods from one place to other, including the warehousing storage

and transportation costs as well includes. These aspects are some times described as “logistics

of distribution”

5. Advertising: - To counter the market at National and International level the GOI set up

various institutes like:- 1) Export Credit Guarantee Corporation Ltd. (ECGC)

2) State Trading Corporation. (STC)

3) Trade development Authority.

4) National Small Industries Corporation. (NSIC)

Organizational Structure of SSI: - There are 28 SISIs set up in State Capital and other

industrial cities all over the country. The main activities of these institutions are as follows: -

-Assistance/Consultancy of prospective entrepreneurs.

- Project profiles.

-Entrepreneurship development programs.

- Motivational campaigns.

-Production index.

- Management development programs.

-Energy conservation.

-Quality control and up gradation.

-Export promotion.

-Market surveys.

-Intensive technical assistance.

Organizations under SSI:-

1) Regional Testing Centers (RTCs)

2) Field Testing Stations (FTSs)

3) Tool Rooms / Tool Design Industries (TRs/TDs)

4) Trading institutes:

- National Institute of Small Industry Extension Training (NISIET)

-National Institute for Entrepreneurship and small business development (NIESBUD), New

Delhi.

-Integrated Training Centre (Industries), Nilokhedi (Haryana).

5) Product-cum- Process Development Centre (PPDICs)

Six centers are in existence. There are:-

- Firozabad for Glass Industry.

- Kannauj for Essential Oils.

- Meerut for Sports Goods and Leisure Time Equipment.

- Agra for foundry and forgings.

- Ramnagar for Electronic Industries.

-Mumbai for Electrical Measuring Instruments.

The main motive of these centres is to upgrade the technology of the manufacturer and help in

energy conservation.

Training Institutes:- All the three training institutes mentioned above are an autonomous body

and are under the administrative control of the office of DC (SSI).Their objectives is to identify and

motivate traditional /non traditional entrepreneurs and to provide training at National and International

level .These institutes provide training by imparting seminars and workshops on topical issues . The

integrated Training Centre (Industry), Nilokhedi is the only institute that imparts training to the junior

field staff i.e. Investigators / SIPOs to expose to and educate them in the programmes and policies of

development and promotion of small industries. At present its training consists of courses like

1) Rewinding of electric motors and house wiring.

2) Repair to diesel engine and agricultural water pumps.

3) Servicing and repair to automobiles (cars and scooters).

PROJECTED REPORT

SCREW MANUFACTURING INDUSRTY

INTRODUCTION

MARKET POTENTIAL

BASIS & PRESUMPTIONS

PREOCESS OF MANUFACTURING

IMPLEMENTATION SCHEDULE

PROCESS FLOW CHART

INTRODUCTION

PROJECT DESCRIPTION: Wood screws are used almost in all of household furniture,

wood materials, furniture industries etc. it is a metal screw with a sharp point designed to

attach two pieces of wood together. Wood screws are commonly available with flat, pan

or oval heads. A wood screw generally has a unthreaded portion below the head. He

unthreaded portion of the shank is designed to slide through the top board (closest to

screw head) so that it can be pulled tight to the board it is being attached to.

The wood screws have a very wide market all over the country. The machines, equipments and

raw material for manufacturing wood screws are easily available and the technology is fully in

designed. The unit can be set up in all major cities or near the city area and requires very nominal

investment in plant and machines. Also the power consumption is not very much. So its

production is economical and also pollution free.

MARKET POTENTIAL:-

The practical applications of screws are almost endless: They are used in industries ranging from

construction to electronics and can be used for almost any project that requires two or more

objects to be firmly connected.Wood screws have a very wide and never ending market as

almost all the house incorporate wood materials and also in the wood furniture manufacturing

units and all shops working in the field of wood furniture will require it and in all the wood

material wood screw is to be used and its importance can’t be deny. These are always required

in almost all the homes. Different sizes of screws for different end use are packed in printed

paper packets and sold either by per packets or per kg of screws.

BASIS AND PRESUMPTIONS

The project report has been prepared keeping in view the following basis and presumptions while

calculating the cost of project and that of production

1. Unit will run 9 hours per day for 310 working days in a year.

2. Unit will manufacture two types of wood screws.

1. upto 36mm long and 5mm dia

2. upto 50 mm long and 6 mm dia

3. Paper packets are got printed as per the requirements from outside .

4. Rates in respect of machines and equipment are based upon the rates quoted by a

particular manufacturer.

5. Rates of raw material and other inputs are based upon those prevailing in local market.

6. Unit will be running on single phase power motors .

Infrastructure Facilities The place is well connected with roads, water line & high tension power lines. The electricity

will be available to the proposed firm as it is situated in well developed industrial town. All sorts

of infrastructure facilities like telephone, banking, road, transport & insurance services are also

incorporated.

Raw Material

Screws are generally made from low to medium carbon steel wire, but other tough and inexpensive metals may be substituted, such as stainless steel, brass, nickel alloys, or aluminum alloy. Quality of the metal used is of utmost importance in order to avoid cracking. If a finish is applied to the screw, it must be of a compatible makeup. Steel may be coated or plated with zinc, cadmium, nickel, or

chromium for extra protection. These are easily available & can be bought from the

market of Delhi is already linked with metallic coils with these stations, so there is no problem in

procuring raw material.

Plant & Machinery

Machinery required for the wood screw making plant can be bought from well recognized

companies which provide it at affordable prices. We will purchase it from ABM TOOLS one of

its Head Quarter is situated in Delhi,Mumbai and Kolkata. So we will purchage it from Delhi.

IMPLEMENTATION SCHEDULE

The implementation schedule for the project will be as under:

1. Preparation of project report after getting current rates for machines and raw material.

2. Arrangement for shade (rented) and electricity connection.

3. Provisional registration.

4. Arrangement of finance and placement of orders for machinery and equipment.

5. Procurement and installation of machinery and equipment.

6. Procurement of raw material.

7. Commencement of production.

Production Target

Based upon the single shift working of 9 hours per day and taking 310 working days in a year(26

in a month), the production of the unit will be as under :-

Production per day 960 pckts of 36/5mm screws

960 pckts of 50/6mm screws

Production time is for 8 hrs. 1 hr is for lunch break and tea breaks in whole day schedule.

How Are Screws Made?

The process of making these small fasteners is complex, but modern manufacturing processes

have made screws cheaper and more durable and precise.

1. Early Screw Production

o The concept of screws can be traced backed to approximately 200 B.C., but metal screws

that resemble the modern style weren't developed until the Renaissance Age, between the

14th and 17th centuries A.D. These early screws were handmade, thus no two screws

were ever identical. In 1586, Jacques Besson introduced the first screw-cutting machine,

which would pave the way for future innovations. Job and William Wyatt filed a patent

for the first automatic screw-cutting machine in 1760; it could cut roughly 10 screws per

minute. In 1836, William Keane developed a thread-rolling process. Although his efforts

were mostly unsuccessful, thread rolling eventually became the modern standard for

screw production.

Modern Materials

o The most common material used to make screws is low to medium carbon-steel wire.

Other durable and inexpensive metals that are sometimes substituted include brass,

stainless steel, nickel alloy and aluminum alloy. Some screws have a finish applied to

them for extra protection, which must be compatible with the raw materials of the screw.

Steel can be plated in zinc, cadmium, nickel or chromium.

Cold Heading

o The mass manufacturing of screws is accomplished through cold heading and the thread

rolling method. A coil of wire is fed into a machine that straightens it, then directly into

another machine that cuts the wire into the desired lengths. A one- or two-punch process

die cuts the head of the screw into a preset shape. This process can produce between 100

and 550 screw blanks per minute.

The cold heading machine cuts a length of wire and makes two blows on the end, forming a head. In the head slotting machine, the screw blanks are clamped in the grooves around the perimeter of the wheel. A circular cutter slots the screws as the wheel revolves.

Thread Rolling

o The screw blanks are then guided down a chute that leads to one of three different types

of thread-cutting dies. If a reciprocating die is being used, the screw will be rolled

between one stationary flat die and one that moves back and forth alternately to create the

screw threads. A cylindrical die achieves the same basic result by rolling the screw

between two or three round dies. The planetary rotary die process holds the screw blank

in a stationary position while several die-cutting machines roll around the screw. All

three of these methods create screws that are stronger than those created using machine-

cut methods. This is because the threads are not actually cut into the screw blank but

rather pressed. Thread rolling ensures that no material is lost in the body of the screw,

keeping the metal strong while also creating more precisely positioned threads.

Quality Control

o Standards for screw threads were established by the National Screw Thread Commission

in 1928; the main goal was to make screws more interchangeable. A unified screw thread

system was adopted in 1948 that focused on the number of threads per inch, the pitch and

shape of the thread and diameter sizes. In 1966, the International Standards Organization

suggested universal restrictions on metric and inch size ranges that have become the

accepted global standard.

PROCESS FLOW CHART

DOUBLE STROKE ( SOLID DIE ) COLD HEAD FORGING MACHINE

SCREW HEAD SLOTTING MACHINE

WOOD SCREW THREAD CUTTING MACHINE

SCREW HEAD SHAVING MACHINE

WOODEN POLISHING BARREL

INSPECTION

↓

PACKING

↓

STORE

↓

DISPATCH

FINANCIAL ASPECT

A. Fixed Capital

(i) Land and Building Amount (In Rs.)

It is proposed to have rented Building 20000.00

of about 800 Sq. fts. Covered area

@ Rs. 20000 (per month)

ii) Machinery and equipments (proposed)

1. AUTOMATIC WOOD SCREW MAKING PLANT LENGTH UPTO 36MM

A DOUBLE STROKE ( SOLID DIE ) COLD HEAD FORGING MACHINE

Length Of Screw Upto 36mm No. Of M/Cs Reqd. Amount

Dia Of Screw Upto 5mm (3/16”)

Production Per Minute 110 - 125 Pcs

Motor Required 2 H.P.

Price Rs. 2,31,000 One Rs. 2,31,000

B SCREW HEAD SLOTTING MACHINE

Length Of Screw Upto 40mm (1-1/2”)

Dia Of Screw 3 – 5 Mm (3/16”)

Production Per Minute 90 – 100 Pcs

Motor Required 1 H.P.

Price Rs.91,000 One Rs. 91,000

C WOOD SCREW THREAD CUTTING MACHINE

Capacity 9 -14 Swg X 36mm

Production Per Minute Upto 25 Pcs

Motor Required 0.75 H.P.

Price Rs. 73,000 Five Rs. 3,65,000

D SCREW HEAD SHAVING MACHINE

Capacity 9 -14 Swg X 36mm

Production Per Minute Upto 25 Pcs

Motor Required 1 H.P.

Price Rs. 73,000 Four Rs. 2,92,000

TOTAL Rs. 9,79,000

2 AUTOMATIC WOOD SCREW MAKING PLANT LENGTH UPTO 50MM

A DOUBLE STROKE ( SOLID DIE ) COLD HEAD FORGING MACHINE

Length Of Screw Upto 50mm

Dia Of Screw Upto 6mm (1/4”)

Production Per Minute 100 - 110 Pcs

Motor Required 5 H.P.

Price Rs. 2,90,000 One Rs. 2,90,000

B SCREW HEAD SLOTTING MACHINE

Length Of Screw Upto 50mm (2”)

Dia Of Screw 4 – 6 Mm (1/4”)

Production Per Minute 80 – 90 Pcs

Motor Required 2 H.P.

Price Rs.98,000 One Rs. 98,000

C WOOD SCREW THREAD CUTTING MACHINE

Capacity 4 - 12 Swg X 50mm

Production Per Minute 10 - 15 Pcs

Motor Required 1 H.P.

Price Without Elect. Rs. 76,000 Five Rs. 3,80,000

D SCREW HEAD SHAVING MACHINE

Capacity 7 - 12 Swg X 50mm

Production Per Minute 18 -20 Pcs

Motor Required 1 H.P.

Price Without Elect. Rs. 76,000 Four Rs. 3,04,000

TOTAL Rs. 10,72,000

3. WOODEN POLISHING BARREL

Price Without Elect. Rs. 61,000

Item Code No. Abm-Fm-6520

Motor Required 2 H.P.

TOTAL COST OF MACHINERY = 9,79,000 + 10,72,000+61,000

=21,12,000.00

Installation and transportation 2,11,200.00

Charges @ 10%

Office equipment and furniture37845.00

TOTAL= 23,61,045.00

B. Working Capital ( per month )

(i) Salary and Wages

Sr. No.Particulars Nos. Amount

(In Rs.)

1) Production supervisor 1 25000.00

Cum-InspectoR

2.) Manager 1 28000.00

3) Skilled Worker 6 90000.00

4) Semi-skilled workers 3 25500.00

5) Accountant 1 12000.00

6) Unskilled-worker-cum-Helper 2 9000.00

7) Storekeeper 1 7000.00

8) Watchman 2 9000.00

TOTAL: 2,05,000.00

ii.) Raw Material

Sr. No.Particulars Qty. Amount

(In Rs.)

1) SS Wire @ Rs. 97/ kg. 5,08,230.00

2) Packing Material 40000.00

TOTAL: 548230.00

(iii) Utilities (per month)

Sr. No. Particulars Amount

(In Rs.)

1) Power requirement- 28HP 19552.00

single phase supply

Electricity Charges

(28x 0.746x 8x 26 x 4.50)

2) Other Misc. Expenses 5000.00

Total 24552.00

(4) Other Contingent Expenses

Sr. No. Particulars Amount

(In Rs.)

1) Maintenance/Repair 10000.00

2) Postage and Stationary 7500.00

3) Traveling and Conveyance 12000.00

4) Misc. and Insurance 9600.00

Total 39100.00

(5) Working Capital (per month)

Sr. No. Particulars Amount

(In Rs.)

1) Rent 20000.00

2) Raw Material 548230.00

3) Salary/Wages 205000.00

4) Utilities 24552.00

5) Other Contingent Expenditure 39100.00

Total 735882.00

C. Total Capital Investment

(i) Fixed Capital Rs. 2112000.00

(ii) Working Capital for 3 months Rs. 2207646.00

Total Rs. 4319646.00

Or Rs. 4319646.00

FINANCIAL ANALYSIS

(i) Cost of Production (per month)

Sr. No. Particulars Amount

(In Rs.)

1) Total Recurring expenditure 735882.00.

(2) Turn-over (per month )

Sr. No. Particulars Amount

(In Rs.)

1) By sale of 985 pckts of 985x26x20 5,11,800 .00

30/5mm screws

2.) By sale of 864 pckts of 864x26x30 6,73,920.00

50/6mm screws

Total = 1185780.00

Less sale expenses @ 5% 59286.00

Total 11,26,434.00

(3) Profit per month Rs. 11,26,434.00-735882.00.

= Rs. 3,90,550.00

(5.) Profit per year 390550x12=4686600

(6) Profit on Sales 34. 67%

(7 ) ANNUAL CHARGES

Depreciation on Machines @ 10% 211200.00

3) Depreciation of Office 7569.00

Equipment @ 20%

4) Interest on capital @16% 33,7920.00

Total 5,56,689.00

(8)ANNUAL PROFIT= 4686600-5,56,689

= Rs. 41,29,911.00

(9)BREAK EVEN POINT

MACHINERY SUPPLIERS

Address :79A, Pocket GG-1, VikasPuri,New Delhi - 110 018, India

Tele : 91 11 2854 6891 / 91 9891027608Fax : 91 11 2854 0898E-mail : abmtools@vsnl.netWebsite : www.abmfasteners.com