How To Make Pencils

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how to make pencils
Bachalor of business administration (Saurashtra University)
Studocu is not sponsored or endorsed by any college or university

Downloaded by Amit Kachhatiya (amitkachhatiya4845@gmail.com)
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PRACTICAL STUDIES
Product Project Report on
Pencils
Prepared By (Enrolment Number):

Meswaniya Vaibhavi Satishbhai
(01020120161)
Guided By:
Prof. Parag Kaneriya
College:
Shree R.P. Bhalodia College – Rajkot
Submitted to:
Saurashtra University – Rajkot
Academic Year
2021-2022
R.P. BHALODIA COLLAGE

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Shree R. P. Patel Trust Mumbai Sanchalit
[ COMMERCE MANAGEMENT COMPUTER

]
[ B.COM. B.B.A. B.C.A.]
7 – Manhar Plot, RAJKOT- 360002. Phone: 2460012
Ref. No.: Date:
CERTIFICATE
This is to certify that
Ms. MESWANIYA VAIBHAVI SATISHBHAI with enrollment no.:

01020120161 student of BBA SEM 4 course has undergone PROJECT REPORT and has
successfully carried out this project report as a part of their curriculum prescribed by
Saurashtra University, Rajkot. The report is made by her.
I hereby approve his/her work and wish him/her all the very best for her splendid career
and future.
Project Guide I/C Principal

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DECLARATION
I hereby declare that the project entitled is an outcome of my own efforts under
the guidance and supervision of prof. Parag kaneriya. the project submitted to the
Saurashtra University for the partial fulfillment of the Bachelor of Business
Administration Examination.
I also declare that this project report has not been previously submitted to any
other university.
Date:
Place:

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ACKNOWLEDGEMENT
It gives me a great sense of pleasure to present the report of the project work
undertaken during B.B.A. second year. I would like to thankful to all of them who helped
me in guiding and carried out this work.
I owe special debt of gratitude to my professor for his constant support and
guidance throughout the course of my work. It is only his cognizant efforts that my
endeavors have seen light of the day.
My deepest thank to Saurashtra University to get this opportunity.

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PREFACE
B.B.A. course is a special course which prepare young entrepreneur and its
very essential that they should have the basic knowledge about how the small-scale
business can be started.
One of the subjects namely entrepreneurship and management of small-scale

business has covered this aspect with a view to create and develop entrepreneurial skill
among project the student.
So, I would like to prepare a product project report on pencils.

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Page
Sr.No. Particular
No.
1 Introduction: Project at Glance 1
2 Production Department 20
3 Marketing Department 33
4 Finance Department 44
5 Human Resource Department 53
6 Project Summary 76
7 Project Advancement 78
8 Learning from Project Report 80
9 Bibliography 82

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INTRODUCTION: PROJECT AT GLANCE
Page
Sr.No. Particular
No.
1.1 Product Selection 3
1.2 Name of the Unit 5
1.3 Profile of the Unit 6
1.4 Owners/Promoters Bio-Data 7
1.5 Product Introduction & Market Analysis 9
1.6 Proposed Location’s Justification 11
1.7 Land Acquisition 13
1.8 Help of Government Institutions 14
1.9 Government Procedure for Registration 16

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Self-Contribution:
We have no any self-contribution in our project.
Experience:
I’m Fresher, I have no experience of the business. This is my first project.
Knowledge:
Pencil creates marks by physical abrasion, most pencil cores are made of graphite
powder mixed with a clay binder.
Product Market Position:
The market for the pencil is very large and they are widely used throughout the world.
In order to develop further market.
Raw Material:
The lead of the pencil is a mix of finely ground graphite and clay powders pencil’s
cover which secured on to wood. Many pencils feature an eraser on the top .
Labour:
Labours are skilled and unskilled. On the top level are highly graduated labour.

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Skill Requirement:
For the business have to take many of the day-to-day responsibilities, delegation,
thought leadership, communication skill, productivity etc. are need initial time period.
Government Policy:
Small scale industries’ many benefits are provided by both central and state
governments. The credit guarantee fund scheme foe MSMEs and provide subsidized loan
under CGTMSE scheme. The guarantee scheme cover is available to the extent of a
maximum 85% of the sanctioned amount of the credit facility .

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Name of the unit:
“Indus Pencils”
The Indus Pencils comes under small scale industries.
Till now many companies like Doms, Apsara, Nataraj, Camlin, Luxor, faber
Castell etc. are in the market but this is a tight competition with the Doms.
India is among the world’s major producer of pencils. But there are very less
companies are producing pencils in India.

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SR. PARTICULAR PROFILE

NO.
1. Name of the Unit Indus Pencils
2. Address Indus Pencils

Survey no. 332, Plot no. 4-3,
Veraval (Shaper)
Rajkot, Gujarat
3. Form of the Unit Partnership Firm
4. Name of the Product Pencils
5. SSI Registration Number An application made with Rajkot DIC
6. Subsidy Registration An application made with Rajkot DIC

Number
7. Other Registration Number -
8. Location of the Unit G.I.D.C. Estate
9. Owner’s Name and Address Vaibhavi S. Meswaniya

Kalawad Road, Rajkot
10. Bankers Name HDFC Bank

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A promotor is an individual or organization that helps raise

money for some investment activity who decides an idea for setting up a particular business
at a given place and carries out a range of formality required for the setting up of a business.
Owner:
Vaibhavi Meswaniya
Qualification: M.B.A.
Financial contribution: 40%
Promoters:
 Sagar Sadhu
Post: Management
Experience: 7 years in supply management
Qualification: B.B.A.
Expertise: Supply

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 Satish Shah:
Post: Manager
Experience: 5 years in Marketing field
Qualification: M.B.A.
Expertise: marketing
 Aarti Shukla:
Post: Manager
Experience: 3 years in Finance
Qualification: C.A
Expertise: Finance

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Product Introduction:
Pencils that are sold mainly in market are made of wood. Wooden pencil
or lead pencil is an essential item for students and artists. Generally, HB and 2B pencils
have popularity in the Indian market. Even in the recent era of computers, printers, tablets,
cell phones and a whole host of other writing and drawing instruments, pencil industry is
growing.
There is a growing demand for a wooden pencil in the market. The
products find application in schools, colleges, government offices, commercial
establishments, NGOs and miscellaneous activities.
Even in this digital age, pencils are the loyal companions of many
schoolchildren, writers, and artists alike. It is estimated that about 15 to 20 billion pencils
are used annually. Most pencils have a graphite or charcoal core encased in wood. The
demand for pencils is mainly associated with student population of the country. Education
sector is given high priority by the government and a number of schools are opened in
various parts of the country, including in the remote rural areas. Enhancement of quality
and access at all levels of the education system is the major objective during the GTP
period. With the expansion of education facilities and increase in the enrollment rate of the
population the demand for pencils will grow substantially.

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Market Analysis:
There are very few companies which manufacture pencils.

The pencils that all these companies manufacture are mainly homogeneous
or have only some minor differentiating factors. These companies compete with each other
and at some point in time, their popularity decreases/remains stagnant and hence they start
making only nominal profit.
The reason there are few companies is because of high market risk and high
cost of establishment of business.
Hence, we can conclude that the market that pencils fall under is Oligopoly
market. In the oligopoly market because of very few companies, there is a fairly large share
of each company.
There are less number of competitors and because of that every company
has eyes on other companies and their demand and marketing strategies. So, each company
has a similar schemes and price of their products. Because of this behaviour we can see the
demand curved to be kinked at a point in time.

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Location of any industry plays a dominant role in the success or failure of

the company. It has been rightly said that the mistake of selecting the wrong site cannot
be corrected without heavy losses. Selecting a proper site for establishing SSI thus
increase, as finance is a major constraint for SSI unit.
The proposed location for establishment of manufacturing facilities for my unit
is GIDC, Shaper Veraval, Rajkot. Govt. has declared this area as an industrial area. Due
to govt. incentives and initiatives, this area has developed very well with easy availability
of infrastructure facilities.
The unit enjoy following benefits of the location.
1. Raw material:
Raw material is the basic constraint for all industries. Regular supply of raw
material is very crucial to maintain the flaw of production thus subsequently the cost
of production can be reduced.
2. Labour force:
Cheap & semi-skilled labour force is easily available in large quantity in this
area. Therefore, availability of labour is convenient & economic.
3. Transportation:
Transportation facility are mainly required for distribution of finished
products to the retailer and wholesalers. The transportation cost is comparatively less as
the market place is away at a distance of 13 kms.

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4. Power:
Power is available from PGVCL at subsidize rates, since the unit located in an
industrial area.
All the above-mentioned factors are very crucial as they affect the cost of production
as well as profitability and ultimately the success of the unit.
5. Other Location Advantages:
In addition to above mention advantages of GIDC. there are several other

benefits for having the project located at GIDC, Shaper Veraval, Rajkot.
a) Shaper is only 16 kms away from Rajkot hence unit is located at Veraval
will avail all facilities available at Rajkot.
b) Shaper Veraval has got a full fledge telephone exchange making easier to
contact anywhere in the world.

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The land acquisition has detailed a process of GIDC. The process takes up
some months. As per GIDC allotment of properties are as follow,
 Allotment activities are governed by
o Regulation for Disposal of Land Regulation

o Regulation for Disposal of Property Regulation
o Policies framed from time to time under these Regulations
Stages of Allotment
o Online Application by Applicant

o Submission of Application with Scrutiny Fee (Acknowledgement within 7
days)
o Presentation Before Screening Committee Based on Which Decision Is
Taken.
o Agreement Execution along with down payment (60 days from date of
OCA)
o Possession Advice (within 3 days)
o Taking over of Physical Possession (20 days)
 Application Form

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product selection:
Product is the bundle of satisfaction product is the conceptual creation of a
produce approved by the consumer. The Philip letter is told a product is anything than
can be affected to a market for attention, acquisition use of consumption.
Acquiring Land:
The new Land acquisition bills has detailed a process four Acquiring Land.
The process could take up to on months. This will increase the gestation period of
projects.
Marketing:
Marketing includes advertising selling and delivering product to consumers or
other business professionals who work in a corporation's marketing and promotional
department sect to get the attention of key potential audiences through advertising .
Training:
Training is teaching or developing in oneself or other, any skills and knowledge
of fitness that relate to specific useful competencies. Training has specific goals of
improving one's capability, Capital productivity and performance.

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Raw material:
The primary raw materials used in producing pencil product is the other ancillary row
Material are. These row Materials are available in abundance & easily.
 Wood
 Graphite
 Chemical
 Polymer

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1.9 GOVERNMENT PROCEDURE FOR

REGISTRATION:
SSI registration procedure:
Step 1: Provisional SSI Registration

To obtain SSI registration the business must first apply for Provisional
SSI Registration Certificate (PRC). Provisional Registration Certificate is given when
the unit is in a pre-operative period and helps the SSI unit obtain term loans and
working capital from financial institutions/banks under priority sector lending. In
addition to helping obtain a bank loan, the provisional SSI registration certificate also
helps the business obtain facilities for accommodation, land, other approvals etc. and
obtain various necessary NOCs and clearances from regulatory bodies such as Pollution
Control Board, Labour Regulations etc.

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Provisional SSI registration can be applied for by a business at any time and an
industrial license is not required. Once an application is made for Provisional SSI
registration, the provisional registration is provided and no field enquiry is done.
Provisional SSI registrations are valid for five years and if the entrepreneur is unable
to set up the unit in this period, a fresh application for provisional registration can be
made at the end of five years period.
Step 2: Start the Business

Start the business with the provisional SSI registration certificate.
Commence activity or production.
Step 3: Permanent SSI Registration

Once the business commences production or activity, the business can
apply for and obtain permanent SSI registration. Obtaining permanent SSI registration
will help the business obtain the following benefits:
 Income-Tax exemption and Sales Tax exemption as per State

Government Policy
 Incentives and concessions in power tariff as per State Government
Policy
 Price and purchase preference for goods produced
 Availability of raw material depending on existing policy
Permanent SSI registration will be provided only if the following conditions are
satisfied by the SSI unit:
o the unit has obtained all necessary clearances whether statutory or
administrative,
o the unit does not violate any restrictions in force,
o value of plant and machinery is within prescribed limits and
o the unit is not owned, controlled or subsidiary of any other industrial
undertaking as per notification.

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ISO registration procedure:
Step-1 Choosing the Kind of Certification

The very first step is to choose the kind of certification the organization
wants.
Step-2 File an application

Once the entrepreneur selects the ISO standard; it shall make an application
in a respective form based on the ISO registrar. The application shall include the
power and responsibilities of the entrepreneur and certification body.
Step-3 Submission of Documents

Application shall be filed along with the requisite documents and the same
shall be reviewed by the ISO certification body. ISO Certification body will review
all the quality manuals and documents related to various policies being followed in
the organization.

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Step-4 Initial Review of The Quality Management System

To identify any significant weakness in the Organization, the Pre-
assessment (Initial review) of the Quality Management System in an organization
is reviewed by the registrar and will also provide an opportunity to correct the
deficiencies before the regular registration assessment is conducted.
Step-5 Preparing an Action Plan

Once the initial review of the Quality management system is reviewed, the
ISO registrar notifies the existing gaps in the organization, and to eliminate these
gaps the applicant has to prepare an action plan. The action plan should contain the
list of the requisite work to be performed to meet the Quality Management System.
Step -6 On-Premises Audit by The Registrar

The registrar will conduct a non-premises inspection to audit the changes
made in the organization. However, if the registrar finds that the requisite changes
do not meet the requirements of the ISO standards, the registrar will categorize the
organization into two categories depending on severity.
1. Minor Non-compliances
2. Major Non-compliances
Note-The ISO registration cannot precede until all significant non-compliances are
closed by the Registrar while doing a re-audit.
Step-7 Obtaining ISO Certificate

The registrar will issue the ISO certification when all the non-conformities
are resolved and are updated in the ISO audit report.

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PRODUCTION DEPARTMENT 21
Sr.No. Particular Page No.
2.1 Introduction 22
2.2 Machineries 23
2.3 Raw Material 24
2.4 Production Process 26
2.5 Plant Layout 31
2.6 Production Capacity 32

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Product department is the driving force turning the wheels of every

manufacturing company. A company may have best of the resources and forces but all
these are meaning less without production which gives shape to organization.
The main role of production is turn Inputs (Raw material) into Outputs (Finished
goods). Output refers to finished product or service and Inputs are the materials that are
needed to manufacture certain goods. When a business completes this process, they are
able to achieve customer satisfaction by producing products that are ready to be used and
fit for purpose.
The production department is responsible for insuring quality is achieved in each
item produced. They will need to carry out inspection and implement suitable quality
initiatives. This is the one of the major duties of this department because if mistakes are
made on products. Customer satisfaction will be decrease or if products are ruined during
the production process it means that the company will be have to through “bad” products
away (creating waste). Business aspects will lead company to a loss of profit. Quality
assurance will have to be carried out every day on a number of occasions to ensure that the
production process is working efficiently and effectively. For example, Coca-Cola will
carry out approximately 200 inspections per day to ensure quality is being achieved and
also to make sure all equipment is running well.

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Wooden Pencil Making Plant
Centec Machine Tools (India)

@ Vishnu Garden, New Delhi
 Price
6 lakhs rupees
 Product Specification:
Production Capacity- 30000 pencils in
8 hours
Power Consumption- 30kv
 Product Description:
Fully automatic plant
 The whole plant integrated with,
Automatic Grooving Machine Automatic Double Saw
Shaping Machine Coloring Machine
End cutting Machine Stamping Machine
Dipping Machine Gluing Machine
Wooden Treatment Plant Twin Coloring Machine
Hot polishing Machine Cutter Adjuster
Precision Cutter Head Grinder

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Name of the Raw Materials:
 Wood
 Graphite
 Chemicals
 Polymer
Source of Raw Materials:
1. Wood:
Cedar wood is commonly used to make pencils. The best trees are around
14-years-old since they're mature enough to be cut down. 1 tree can make up to
300,000 pencils.
Cedar has a pleasant odor, does not wrap or lose its shape and readily
available.
Brownish Reddish Cedar Wood

@ Kutch
Price: 1500/cubic feet
Wood type: yellow cedar
Thickness: 6mm & up
Length: 8/10/12

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2. Graphite:
The graphite is ground down and mixed with powdered clay and water to
make a thick paste. This paste is then fired in a kiln.
The result is a strong lead core that's difficult to break and extremely
smooth for writing on paper.
Mass Graphite & Carbon Products

@ Mehsana
Price: 60/kg
State: powdered
Brand: Mass graphite
Color: Black
3. Chemicals:
The pencil graphite leads are composite material containing

also binder in which wax, resins or high polymer.
K.D. Corporation
@ Ahmedabad
Material: Polymer
Length: 6 inches
Color: white

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Detail Process of Production:
Create Fill the

Cut the Wood Grooves in Grooves with
the Wood Glue
Make
Bake the Squeeze the
Graphite
Graphite Sandwich
Sandwich
Take a
Cut Sandwich Add the
Lacquer
into Pencil Eraser
Shower
Print with
Packaging
Image or Text

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Step One: Cut the Wood
The wood for a pencil needs to be soft enough to sharpen,

but not so soft that it will bend. To achieve this, the wood
is pre-cut at sawmills into slats called "pencil stock" or
"pencil squares." Each slat is then placed in a dry kiln
before it's shipped to the factory. This gives the wood a
uniform size and moisture content, ultimately making the
pencil assembly easier later.
Step Two: Create Grooves in the Wood
Once the factories receive the wood stock, they put it on

an assembly line for production. The first stage is treating
the squares with a wax and stain. The squares then pass
under a giant cutting wheel that carves grooves along the
edges. These grooves will eventually hold the graphite in
place.
Step Three: Fill the Grooves with Glue
The grooves are filled with a special elastic glue that acts as
a cushion for the graphite. Without this glue, the graphite has
the potential to break before the pencil is finished.

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Step Four: Bake the Graphite
Now it's time to make the graphite. The graphite is mixed

with clay and the entire mixture is baked in an oven at
about 1500°F.
Step Five: Make a Graphite Sandwich
An automated arm puts the graphite into the wood slat with
the glue, flips that wood slat over, and then stacks another
piece of wood on top. Think of this creation as a graphite
sandwich!
Step Six: Squeeze the Sandwich
A mechanized plunger squeezes the "sandwich" together

with over 2,000 pounds of pressure. The wood slats are
compressed, and the glue has time to dry.

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Step Seven: Cut the Sandwich into Pencils
The glue takes about an hour to dry. After that, the

"sandwiches" are ready to be sliced into pencils. A fast-
spinning cutter is used to shape the pencils into a
hexagonal design. From there, the pencils are cut out of
the sandwich into individual pieces. Any pencils with
defects are discarded.
Step Eight: Take a Lacquer Shower
The pencils go under a shower head that sprays them with

lacquer. Each pencil is coated with 4 to 10 coats of
lacquer, depending on the desired quality, sheen, and
color.
Step Nine: Add the Eraser
At this stage, the metal ferrule and rubber eraser are

added to the top. The pencils are almost ready for
writing!

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Step Ten: Print with Image or Text
Most pencils have an image or text printed on the barrel,

whether it's the "HB" or "2" used for grading graphite,
the name of the company that made the pencils, or some
other fun design or message. This customization is done
using screen printing, engraving, or foil stamping
Step eleven: Packaging
The final result is beautiful pencils ready for sharpening!

All of the pencils made by the factory are packaged for
shipment. You will then buy these pencils and use them at
home, school, work, and everywhere in between.
 Material Consumption:
For pencil making, wood use 85% in total product. In other 15% in lead, which
made from Graphite, Wax, Resins and Polymer.
Lead: 65% Graphite
30% Wax
5% Blinder (wax, resins, polymer)
Wood: 85%

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Gate
Gate
Tank
Tank
Final Goods Storage
Room
Canteen
Manufacturing
Control
Plant
Room
Room
Administrative
Office
Raw Material Storage
Room
Security
Parking
Office
Main Gate

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 Installed 100%:
The production Installed capacity of this established plant will 30,000 no of
Pencil per day.
 Utilized 90%:
The production Utilized capacity of this established plant will 27,000 no
of pencil per day.
The schedule for production would be as follows:
9 a.m. to 12 p.m.
&
3 p.m. to 7 p.m.
The whole production process would be carried simultaneously and the post
production will also be speedily.

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MARKETING DEPARTMENT
3.1 Introduction 35
3.2 S.T. P. 36
3.3 Product Strategies 38
3.4 Pricing Strategies 40
3.5 Distribution Strategies 42
3.6 Promotion Strategies 43

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Marketing is the act of facilitating the exchange of a given commodity for

good’s services and money to deliver maximum value to the consumer from societal point
of view is the link between a society’s material requirements and its economic patterns of
response. Marketing satisfied this need and wants through both the exchange processes and
building long term relationship.
Marketing can be viewed as an organization function and a set of process for
creating delivering and monitoring value to customer and managing customers relationship
in ways that benefit the organistion and its shareholder marketing is the service of choosing
target markets through market analysis and market segmentation as well as understanding
customer buying behaviour and providing superior customer value.

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Segmentation:
Market Segmentation is dividing a market into distinct groups with distinct

needs, characteristics or behavior who might require separate products or marketing mixes.
Segmentation helps in understanding different customer groups in the market and
their varied needs and wants. Indus Pencils uses the mix of demographic and
psychographic segmentation variables such as age, gender, family background, the
income of parents, region, behavioral aspects etc.
Demographic Segmentation is segmenting the market according to the variables
such as age, gender, family size, income, occupation, education, religion, race and
nationality.
Psychographic Segmentation is a strategy whereby the intended audience for a
given product is divided according to social class, lifestyle, personality characteristics or
buying motive.
Targeting:
Once the market is segmented, then the marketing efforts are focused on
certain, particular segment, this is called target marketing. It makes the promotion,
pricing and distribution of products and/or services easier and more cost-effective and
provides a focus to all the marketing activities.
Indus Pencils uses a Single Segment Targeting strategy.

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Positioning:
Market Positioning is an effort to influence consumer perception of a brand

or product relative to the perception of the competitors. The objective is to occupy a
clear, unique, and advantageous position in the consumer’s mind.
Indus Pencils has a wide range of pencils made to suit the needs of various
consumer segments. The profile is exhaustive and caters to children, artists,
architects and engineers, apart from general users. Its pencils also appeal to the
professionals in the fields of design and engineering. The hall mark of Indus Pencils is
that it always strives to give value to the customers. All the new pencils are introduced
in the Indian market only after taking into account the Indian customer preferences.

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Production Mix:
A set of pencils ranging from a very soft, black-marking pencil to a very

hard, light-marking pencil usually,
 ranges from softest to hardest as follows:
Tone and grade Character Application examples

designations
9B For artistic purposes:
8B extremely soft,  sketches

7B black  studies
6B  drafts
5B
4B
3B  freehand drawing
2B soft  writing (restricted)
B
HB  writing
medium
F  linear drawing
H  technical drawing
hard
2H  mathematical drawing
3H  technical detailed plans
4H very hard  graphical representations
5H
6H For special purposes:
7H
extremely hard, lithography
8H 
light grey  cartography
9H
 xylography

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 External Colour and Shape:
Indus Pencils use colour matte black with different colour lines.
Shape:
Hexagonal
Most common use
Triangular
Oval
Carpenters’ pencils
Rectangular
Marketing Testing:
Introducing a new product or service without first testing the market is like
jumping off a cliff into the sea, blindfolded unthinkable, life threating, teachers and
unnecessarily risky.

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A good product can flourish or fail in the market depending on its price.
If it’s deemed too high, customers will look for cheaper alternatives, and sales
will be lost. If it’s too low, you may sell a decent number, but your profit margins will take
a hit.
The cost of an item also helps define its perceived value to potential buyers,
and the value of your brand. It can help paint a picture about a product’s desirability,
usefulness, popularity, or quality. Underpricing a product can be worthwhile from a
competitive point of view, but for the wrong product, it can also make consumers think
less of its value. Additionally, if you’re relying on retail outlets like supermarkets to stock
your products, they may give preferential shelf space to higher priced competitors because
they bring in more margin – despite offering less value for money to customers. This is one
situation in which dropping your pricing can make you less competitive, rather than more.
So, finding the sweet spot will depend on a variety of factors, like the type of
product you’re selling, to whom, and in which market conditions. High end clothing and
electronics, where customers expect a high price point, will differ from run of the mill
items such as household products.

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Indus Pencils Price List:
Name of the Wholesalers Customers

Retailers (box)
Product (box) (box)
Hexagonal 40 45 50
Triangular 45 50 55
Oval 35 40 45
Rectangular 35 40 50
Competitors’ Price List:
Wholesalers Customers
Competitors’ Retailers (box)
(box) (box)
Apsara 45 50 55
Nataraj 45 50 55
Camlin 50 55 60
Doms 55 60 65
Faber-Castell 55 60 70

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Channel of Distribution:
Indus Pencils is using Indirect channel of Distribution,
This is most commonly used distribution path where two intermediaries are
adopted by firms to sell the product. The manufacturer sells the goods in bulk to wholesaler
who sells in small lot to retailers who supply it to ultimate customers.
Reasons:
 For less costly products, longer channels are preferred.
 product is not complex, for simple products longer channels can be used.
 product is non-perishable so it can be distributed with long channel.
 This company is new; therefore, long channels are advisable.

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Sales promotion means a direct inducement that offer and extract value is
incentive for the product to the sales force consumer with primary objective immediately
sales.
Advertising:
It is an important promotional tool which reach mass and is economical too.
We will be giving advertisement in big posters across public places. We will be giving
ads in magazines and in newspapers.
Sales Promotion:
The Company is using product combination as a means of sales promotion.
On purchase of minimum 15 units of pencils, the buyer/consumer will get an Eco-
Friendly notebook for free.
Personal Selling:
The company has tie ups with major institutions. The representative will
distribute the free sample to the students in different school .

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HUMAN RESOURCE DEPARTMENT
4.1 Introduction 46
4.2 Human Resource Planning 47
4.3 Recruitment and Selection 48
4.4 Training 50
4.5 Wages and Compensation 51
4.6 Employee welfare 52

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Human Resource Management is an operation in companies designed to

maximize employee’s performance in order to meet the employer strategy’s goal and
objectives more precisely. Human Resource management focus on policy and system.
In short, HRM is the process of recruiting selection employees. Providing
proper orientation and induction imparting proper training and developing skills.
HRM also includes employee’s assessment like preform once appraisal
facilitating proper compensation and benefits relationships with labour and with trade
unions and taking care of employee safety. Welfare and healthy by completing with labour
laws of the state of country concerned.
The management of men is very important in any organization. Personnel
management is one of the most complex and challenging field of endeavors. In business,
every activity done by man. Manpower is one of the most important powers in
organization.
Thus, personnel management is function of guiding human resource in
dynamic organization.

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Human resource planning (HRP) is the continuous process of systematic

planning ahead to achieve optimum use of an organization's most valuable asset quality
employees. Human resources planning ensures the best fit between employees and jobs
while avoiding manpower shortages or surpluses.
 Human resource planning (HRP) is a strategy used by a company to maintain a
steady stream of skilled employees while avoiding employee shortages or
surpluses.
 Having a good HRP strategy in place can mean productivity and profitability
for a company.
 There are four general steps in the HRP process: identifying the current supply
of employees, determining the future of the workforce, balancing between labor
supply and demand, and developing plans that support the company's goals.
In Indus Pencils have a total 33 Numbers of employees. In which there are few
highly skilled employees. Some are skilled and semi-skilled employees and many of un
skilled employees. Like,
General Manager, Factory Manager, Supervisor, Helpers, Machine operator,
Peon, Foremen, Sweeper, Export Manager, Salesman, Store Keeper, Clerk cum cashier,
Computer Operator, Office assistant.

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Recruitment:
“Recruitment is the process of searching for prospective employees and
stimulating them to apply for job in the organization.”
Recruitment has been regarding as the vital function of personnel
management. To types of recruitment are as follow,
 Source of Selection:
We follow external source for operational jobs maximum 6 months

experience is necessary and for staff and project planning minimum 2 or 3 years of
experience on their owned skill for the job is necessary. For the workers can choose fresher
for the job.

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Selection:
After a recruitment policy, next function of human resource management

in the organization is selection methods of recruited person.
Selecting has been regarded as the most important function of HR

department. It ensures the organization that it has right number, right kind of people at
the right place and at the right time.
We are adopted following kind of selection method in an organization.
process Aplication Form
Selection Test
Selection Interview
Physical Exam
Job Offer

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Meaning:
Training is a systematic process through which an organization’s human
resources gain knowledge and develop skills by instruction and practical activities that
result in improved corporate performance.
Method of Training:
In our organization, we not use any training method because of we have a new
establish firm. If in future require, we will plan to training.

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No. of Amount per Amount per

Department Position
Employees Month Year
General
1 14500 174000
Manager
Factory
1 12500 150000
Manager
Supervisors 2 3650 87600
General Helpers 4 1500 72000

Department
Foremen 5 1500 90000
Sweeper 2 2000 48000

Machine
2 3600 168000
Operator
Peon 2 1500 42000
Export
4 4000 192000
Manager
Marketing Salesmen 4 3600 172800
Department
Store Keeper 2 2000 48000
Clerk cum
2 1500 36000
Cashier
Finance Computer
1 2000 24000
Department Operator
Office
1 3500 42000
Assistant
Total 33 63850 1172400

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Welfare includes anything that is doing for the comfort and is provided over
and above the wages. Welfare helps in keeping the morale and motivation of the employees
high so as to retain the employees for longer duration. The welfare measures need not to
be in monitor terms only but any kinds. Employee welfare includes monitoring of working
condition, creation of industrial harmony through infrastructure for health, industrial
relation and insurance agent disease, accident and unemployment for the workers and their
families.
Indus Pencils is provided extra benefits & services, which are as under.
According to the performance, they give the promotion & increase in salary.
The company provides Ted to the workers.
The company gives bonus in each year.
The company provides bus facilitate.
The company provides canteen facilitate.
They give festivals gifts & sweets.
They provide houses as well as loan facilities

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FINANCE DEPARTMENT
5.1 Introduction 55
5.2 Total Cost of Project 56
5.3 Source of Capital 58
5.4 Calculation of Utilities 59
5.5 Calculation of Depreciation 60
5.6 Calculation of Cost of Raw Material 62
5.7 Calculation of other Expenses 63
5.8 Cost-Sheet 64
5.9 Estimated Financial Statement 66
5.10 B.E.P. 72

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FINANCE DEPARTMENT
Finance department is responsible the financial administration and

management of company in compline with financial rule and financial guideline acting in
this company. Finance department concerns finance flow management of the company and
is aimed to surviving staff, managers, the board of director and stake holders and securing
the financial health of the company.
The department plays an important role in the company and the relations
between organizational units. It is closely corporate with such companies’ divisions as sales
department, administrations, warehouses, deliveries and marketing department in cash
flow. The effective collaboration is the guarantee that all payments accounts and deposits
will be processed, covered and closed out. This is important proper organizations of the
finance system inside. The company brings the positive and fundamental effect to
companies’ competitiveness demand and reputation.

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FINANCE DEPARTMENT
 Statement of calculation of Fixed Capital:
Sr. no. Particular Rs.

1 Land & Building 12620500
2 Plant & Machinery 3200000
3 Furniture 760000
4 Computer 230000
5 Vehicles 1200000
Total 21715500
 Statement of calculation of working Capital:
1 Bank Balance 1516000
2 Cash 1881100
3 Debtors 3240000
4 Stock 1128000
Total 7565100

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FINANCE DEPARTMENT
 Total cost of Project:
1 Cost of Fixed assets 21715500
2 Cost of Working Capital 7765100
Total 29480600

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FINANCE DEPARTMENT
1 Owner Capital 20000000
Total 20000000

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FINANCE DEPARTMENT
 Electricity Calculation:
Machinery per Hour 300 Unit consume per month

* 7 Hours
2100
Electricity per unit price * 10
21000 per month
* 12
252000 per year
Statement of Calculation of Utility:
Rs. Rs.
Sr. no. Particular
Monthly Annually
1 Electricity 21000 252000
2 Fuel 16000 192000
3 Water 16000 192000
4 Oil and Grease 2000 24000
Total 55000 660000

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FINANCE DEPARTMENT
Statement of calculation of Depreciation:
Assets Rate of Depreciation

Land & Building 10%
Plant & Machinery 15%
Furniture 20%
Computer 10%
Vehicles 10%
 1st year calculation:
Sr. no. Assets Value Depreciation
1 Land & Building 12620000 1262050
2 Plant & Machinery 3200000 480000
3 Furniture 760000 152000
4 Computer 230000 23000
5 Vehicles 1200000 120000

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FINANCE DEPARTMENT
 2nd year calculation:
1 Land & Building 11358450 1262050
3 Furniture 608000 152000
4 Computer 207000 23000
5 Vehicles 1180000 120000
 3rd year calculation:
1 Land & Building 10222605 1262050
3 Furniture 486400 152000
4 Computer 186300 23000
5 Vehicles 1062000 120000

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FINANCE DEPARTMENT
Statement of cost of Raw Material:
Raw Price per Price

No. of Units Price Monthly
Material Units Annually
Wood 50 cubic feet 1500 75000 900000
Graphite 200 kg 60 12000 144000
Chemical 2 kg. 3000 6000 72000
Total 93000 1116000

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FINANCE DEPARTMENT
Statement of Calculation of Other Expenses:
Sr.no. Particular Amount
1 Telephone & Internet expenses 108000
2 Stationary 36000
3 Postage & Telegram 72000
4 Transportation Expenses 132000
5 Insurance 132000
6 Advertisement 72000
Total 552000

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FINANCE DEPARTMENT
Particular Amount Amount

Opening Stock -
+ Purchase of Raw Material 1116000
Closing Stock -
Cost of Material Consumption 111600
Direct Wages -
Prime Cost 1116000
 Factory Overhead:
Salary 468960
Utilities 660000
Depreciation Plant & Machinery 480000
Depreciation Building 1262050
Depreciation on Vehicles 120000
Depreciation on Furniture 152000
Maintenance Expenses 132000
Work Cost 1666050
 Administrative Overhead:
Salary 402200
Printing & Stationery 36000
Postage & Telegram 72000
Depreciation on Computer 23000
Transportation 132000

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FINANCE DEPARTMENT
Telephone & Internet 108000
Cost of Production 773200
 Selling & Distribution Overhead:
Salary 300840
Advertisement 72000
Packaging & Printing 72000
444840
Total Cost 5394170
 Per unit Cost:
Per Unit Cost = Total Cost / No. of Unit

= 5394170/10000000
Per Unit Cost = 0.54

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FINANCE DEPARTMENT
Estimated Trading and P&L A/c and Balance Sheet of Year 1
Estimated Trading and P & L a/c
Particular Rs. Particular Rs.
Opening stock - Sales 8700000

Raw Material 1116000 Closing Stock 1128000
Salary & Wages 468960
Utilities 456000
Gross Profit 7587040
9828000 9828000
Salary 703440 Gross Profit 7587040

Electricity 252000
Other Expenses 756000
Depreciations:
Land & Building 1262050
Plant& Machinery 480000
Furniture 152000
Computer 23000
Vehicles 120000
Net Profit 3838550
7587040 7587040

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FINANCE DEPARTMENT
Estimated Balance sheet
Liabilities Rs. Assets Rs.
Capital 20000000 Land & Building 11358450

+ profit 3838550 23838550 Plant & Machinery 2720000
Furniture 608000
Computer 207000
Vehicles 1180000
Closing Stock 1128000

Debtors 3240000
Cash 1881100
Bank Balance 1516000
23838550 23838550

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FINANCE DEPARTMENT

Opening stock 1128000 Sales 9200000

Utilities 1200000
10420000 10420000

Electricity 260000
Depreciations:
Furniture 152000
Computer 23000
Vehicles 120000
Net Profit 3328550
7183040 7183040

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FINANCE DEPARTMENT


Furniture 486400
Creditors 5000000 Computer 186300
Bills Payable 1000000 Vehicles 1062000

Debtors 3240000
Cash 700000
Bank Balance 85545
19328550 19328550

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FINANCE DEPARTMENT
Opening stock 1220000 Sales 10500000

Utilities 1220000
12000000 12000000

Electricity 280000
Depreciations:
Furniture 152000
Computer 23000
Vehicles 120000
Net Profit 4305550
8291040 8291040

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FINANCE DEPARTMENT

Creditors 2400000 Furniture 1832000
Computer 334400
Vehicles 163300

Cash 100000
Bank Balance 23990
16705550 16705550

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FINANCE DEPARTMENT
Theory of BEP:
The break-even point is that point of activity (that is sales volume) where total
revenue and total expenses are equal. It is the point of zero profit thus the BEP is equal to
total cost and the net income is equal to zero. That is, it makes neither profit nor incurs any
losses. This point shows where the loss stops and profit start. In case the firm produce and
sales less than this point it would incur losses while it is produces and sales more than this
point. It makes profit. The break-even point may therefor we taken as the one indicating
the minimum level of production/sales which the firm has to undertake in order to be
economically viable.
Statement of calculation of Fixed Cost:
Sr.no. Particular Amount
1 Salary 1172400
2 Insurance 132000
Total 1304400
 Per Unit Fixed Cost:
Per Unit Fixed Cost = Total Fixed Cost / No. of Unit

= 1304400/10000000
Per Unit Fixed Cost = 0.13

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FINANCE DEPARTMENT
Statement of calculation of Fixed Cost:
Year 1 Year 2 Year 3

Particular
Rs. Rs. Rs.
Raw Materials 1116000 1200000 1520000
Utilities 660000 700000 780000
Postage & Telegram 72000 80000 85000
Telephone & Internet 108000 150000 220000
Transportation 132000 140000 143000
Advertisement 72000 80000 85000
Repair & Maintenance 132000 150000 160000
Packaging 72000 82000 86000
Stationary 360000 40000 45000
Total 2400000 2622000 3202900
 Per Unit variable Cost:
Per Unit variable Cost = Total variable Cost / No. of Unit

= 2400000/10000000
Per Unit variable Cost = 0.24

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FINANCE DEPARTMENT
Chart of BEP:

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FINANCE DEPARTMENT
Calculation of BEP:
Fixed Cost per Unit = 0.13

Variable Cost per Unit = 0.24
Selling Price = 5 Rs.
Contribution = Selling Price – Variable Cost

= 5 – 0.24
= 4.76
Profit Volume Ratio = Contribution/Selling Price * 100

= 4.76/5*100
= 95.2
BEP (in Unit) = Fixed Cost/Contribution

= 0.13/4.76
= 0.027
BEP (in Rs.) = Fixed Cost/PVR

= 0.13/95.2
= 0.00

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The project as whole describes the scope and viability of the trading
industry and mainly of the financial, technical, and its market potential. The project
generates sufficient fund to repay debtors and also give good return on capital investment.
When analyzing the social economic impact, this project is able to generate and
employment of five and above. It will cater a demand of trading and thus help the other
business entities to increase the production and services which provide service and support
to this industry. Thus, more cyclic employment and livelihood generation. so, in all ways,
we can conclude the project is technically and socially viable and commercially sound too.

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Future plans are very essential part of business whether the business unit is
small or medium or large-scale unit.
The future plans of pencil are as under.
Minimum price taken.

To reduce the wastages as much as possible
The units want to increase that market share in BSE
To increase production Sneed and reduce the final cost of product.

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The lessons learned from this project involves 5 steps with activities that will
capture and use lessons learned. This are:
Identify – identify the comments and recommendations that can be learned. These
can be a valuable knowledge asset for future projects.
Document – note the detailed lessons learned during discussions in a report that
all participants can respond to. Distribute this report to the entire project team and
retain it for future reference.
Analyze – analyze and organize the lessons learned so they can be applied and
shared with other teams. They can improve the project management or be used in
training sessions.
Store – retain the lessons learned reports on a shared drive or in a cloud solution.
That makes them available to all project teams.
Retrieve – when storing the lessons learned reports, set up a keyword search
capability to make them easily retrievable at any time during and after the project.

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Books:
Production Management - By: Himalaya Publishing House

Marketing Management - By: Tapan K. Panda
Human Resource Management - By: K. Aswathappa
Websites:
www.google.com
Government officials’ websites

lOMoARcPSD|35889579

How To Make Pencils

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how to make pencils

Bachalor of business administration (Saurashtra University)

Studocu is not sponsored or endorsed by any college or university

Prepared By (Enrolment Number):

R.P. BHALODIA COLLAGE

Shree R. P. Patel Trust Mumbai Sanchalit

[ COMMERCE MANAGEMENT COMPUTER

Ref. No.: Date:

This is to certify that

Ms. MESWANIYA VAIBHAVI SATISHBHAI with enrollment no.:

Project Guide I/C Principal

R.P. BHALODIA COLLAGE

R.P. BHALODIA COLLAGE

My deepest thank to Saurashtra University to get this opportunity.

R.P. BHALODIA COLLAGE

One of the subjects namely entrepreneurship and management of small-scale

So, I would like to prepare a product project report on pencils.

R.P. BHALODIA COLLAGE

1 Introduction: Project at Glance 1

5 Human Resource Department 53

8 Learning from Project Report 80

R.P. BHALODIA COLLAGE

Downloaded by Amit Kachhatiya (amitkachhatiya4845@gmail.com)

1.1 Product Selection 3

1.2 Name of the Unit 5

1.3 Profile of the Unit 6

1.4 Owners/Promoters Bio-Data 7

1.5 Product Introduction & Market Analysis 9

1.6 Proposed Location’s Justification 11

1.7 Land Acquisition 13

1.8 Help of Government Institutions 14

1.9 Government Procedure for Registration 16

R.P. BHALODIA COLLAGE

We have no any self-contribution in our project.

I’m Fresher, I have no experience of the business. This is my first project.

Product Market Position:

R.P. BHALODIA COLLAGE

R.P. BHALODIA COLLAGE

Name of the unit:

The Indus Pencils comes under small scale industries.

R.P. BHALODIA COLLAGE

SR. PARTICULAR PROFILE

2. Address Indus Pencils

4. Name of the Product Pencils

5. SSI Registration Number An application made with Rajkot DIC

6. Subsidy Registration An application made with Rajkot DIC

8. Location of the Unit G.I.D.C. Estate

9. Owner’s Name and Address Vaibhavi S. Meswaniya

10. Bankers Name HDFC Bank

R.P. BHALODIA COLLAGE

A promotor is an individual or organization that helps raise

Financial contribution: 40%

Experience: 7 years in supply management

Financial contribution: 20%

R.P. BHALODIA COLLAGE

Experience: 5 years in Marketing field

Financial contribution: 20%

Experience: 3 years in Finance

Financial contribution: 20%

R.P. BHALODIA COLLAGE

R.P. BHALODIA COLLAGE

There are very few companies which manufacture pencils.