Proposed Location: Paniqui Productivity Center, McArthur Highway, Samput, Paniqui, Tarlac
Proponents: Russel D. Garcia, Kathleen E. Gonzales, Lara Joy T. Martinez, Jonelyn F. Mendoza, Emmaloida H. Tabag
Degree: Bachelor of Science in Industrial Engineering
School: College of Engineering, Tarlac State University
Date: March 2003
Brief Description of the Project
The project proposes to manufacture an ergonomically designed school backpack, branded as “Pack ‘Em All” It is a backpack aimed at helping elementary students to correct posture and reduce stress on back and shoulder while carrying loaded backpack. The bag has properties unique from other bag presently available. The aluminum places at the back portion of the bag but it is not visibly seen and will serve as the back support. The aluminum is contoured to fit the shape of the back. This will trigger the back straightening of the user. This will prevent the user from slouching and eventually develop a good posture. It has a wider sling to have a greater support. It has a waist support to sustain the lower part of the torso. It has more space inside to cater to students who bring lots of school materials. The bag is ergonomically designed for the ease and comfort to prevent backaches, shoulder pain and abnormal curve of the spine, thus creating a good relationship between the bag and the user.
Summary of the Findings
A. Management Aspect
The product shall be pre-operated eight (8) months before the start of the operation. Partnership shall be the type of business organization, and shall be composed of five (5) partners. The organizational set up shall be in a line function. The business shall have an initial capital of Php 625,000 and Php350,000. The business shall be loaned from DBP.
The General Manager shall be the head of the organization. Under him is the Plant Manager who shall be responsible on the production area, and has the overall control on the company personnel, marketing of the product and even the allocation of budget for the company. Along with him is a Secretary. Under the Plant Supervisor is the Human Resource Personnel; under him are the Utility Man/Driver, Security Guard, and Janitor/Messenger. Next is the Quality Control, under him is the Sewer, Machine Operator, Packager and Stockman. Next is the Marketing and Sales Personnel, under him is the Purchaser Finally, the Finance Personnel, next to him is the Accountant, who shall be classified as retainer, because he shall render service only once every end of the month. The required personnel shall come from nearby places of the plant and within Tarlac. As soon as the business normally operates, all benefits are to be given to all employees. The company shall hire additional workers after six (6) years of operation, based on the forecasted increase of plant capacity. They are to be paid at a minimum starting salary and shall also increase to 10% annually.
B. Marketing Aspect
The proposed product is based on the idea that elementary students have a hard time in carrying their things from school and that in the latter of their lives, they may experience back disorders if not properly taught. The demand of the supply shall be based the total number of students from Grade IV-VI, and the supply shall be based on the existing competitors in malls. A market share of and 43.2% is available for the product. Pack ‘Em All’ is the brand name of the product and is priced using Full cost pricing at the market at an amount of Php 682.75 inclusive of Value Added Tax.
C. Technical Aspect
The bag is created for enhancing desirable human values such as increased comfort and improved quality of life. The product will provide lumbar binder fitted to the body waist, which will offer some trunk support through elevation on intra abdominal pressure and will serve to remind us of proper posture. It will also provide back support for the spine. This support is made up of 0.4 cm thick and 2.5 cm wide flat-bar aluminum material. Its height varies in three different sizes, 12, 14 and 16 inches. This is based on the length of spine from Thoracic level 3 (T3) to lumbar Region five (L5) of our target market.
The manufacturing process is based on the usual process done by any bag manufacturing in the province, which is by the use of high-speed electrical sewing machine. The molding process of the aluminum back support is done by a hydraulic press. The whole production operation is estimated to have a standard time of 353.2455 minutes, including pattern making. But in case of mass production, this process will be eliminated and the total production time will be 104.8455 minutes or 1.75 hours.
The plant size or plant capacity is measures based on the machine used. The plant will have the capacity of 10,080 units/day. The production schedule will be 10% of the average market share every year to provide safety stocks in case any increase in demand arises.
The plant is located at Paniqui Productivity Center, Brgy, Samput, Paniqui, Tarlac. This building is divided into two parts. The first part has already been leased and the proponents will lease the southern part The building has a floor of 630 sq.m and has a monthly rental of Php 20.00 per square meter. It is a 4 1/2 drive from our suppliers and 30 minute away from our target market. It is along McArthur Highway, which makes it accessible to public transportation. Paniqui is known for its sewing business, so laborers with that particular skill will not be a problem. Nearby towns could also provide manpower for the plant. The water requirements will only be minimum and will be supplied by the Paniqui Water District. The power consumption will be generated from the Tarlac Electric Corporation (TARELCO). The plant will not provide toxic wastes. Only excess fabrics will the wastes, and these will be sold to some backyard manufacturing that produce tokens and small purse for different occasions.
D. Financial Aspect
The current ratio or working capital ratio is one of the fundamental measurements of a company’s liquidity. This measurement is computed by dividing the total current assets by the total current liabilities.
For JR. JEK PARTNERS, the profit margin on sales means that for the year 2002, they generated 6.66% of net sales. The decrease in the second year results from the inability of the plant to shoulder the expenses incurred in the production. But in the succeeding years the company recovers with the increase in the profit margin.
Another way of testing the profitability of the business is through the use of rate of return wherein it measures the rate of return to the partner’s equity of JR JEK PARTNERS are 28.9%, 17.26%, 37.32%, 67.96% and 99.95% for the first, second, third, fourth, and fifth, respectively ensure that the business is profitable.
With all other factors remaining constant, an increase in the partner’s equity will decrease in return of equity.
For as long as the return of equity is greater than zero (0), the firm precisely earns income or, on the hand, breaks even. Shortly stated, the firm operates in a favorable performance. Thus, the project is financially feasible.
E. Social Desirability Aspect
The business enterprise is deemed to serve as a great contribution to the government’s effort in raising revenues for its functions. These shall be in the forms of income tax, permits, licenses, and other fees. The society will benefit as a whole because of its ergonomically design at the customers comfort. Its design will help not to worry about their child’s posture when they grow old. The introduction of the bag in the market will pave the way of the competitors to lower their prices in order to maintain its competitiveness. The unemployment rate in the country will get low because this will provide jobs for the families. In this light, the manufacturing of the bag will attain its desirability and acceptance.