Question

Aneesh, a young entrepreneur, wishes to take his family business of designer fabrics to greater heights with the knowledge he has acquired at National Institute of Fabric Development'. His father gave him 25 lakh as a seed capital to start his own new product line under the family business. Aneesh is venturing into leather and faux leather for which he needs to plan his business before he goes ahead with the execution. He knows that transformation of raw material into finished products takes place with the help of energy, capital, manpower and machinery. Further, he realised that manufacturing operations are highly complex and tedious, hence need to well planned.

1. Identify the component of business plan Aneesh is discussing about. Also state its objective.
2. Explain the three different options available before the venture.

Answer 1

1. Component of Business Plan:
   Operations Plan: Outlining the procedures and materials required to convert raw materials into completed goods is the aim of the operations plan. It guarantees the effective use of machinery, labour, money, and energy to create high-quality products. This element is essential for organising and overseeing the manufacturing processes to guarantee their efficiency and coordination.
2. Three Different Options Available Before the Venture:

   1. Manufacturing Option:

      • Aneesh can set up his own production facility, giving him complete control over the production process, quality, and innovation.
      • Advantage: High control over operations and product customization.
      • Disadvantage: requires significant capital and expertise.

   2. Outsourcing Option:

      • He can outsource the manufacturing process to third-party vendors, focusing solely on design, marketing, and sales.
      • Advantage: lower initial investment and reduced operational complexity.
      • Disadvantage: Less control over production quality and timelines.

   3. Mixed Approach:

      • Aneesh can manufacture key components in-house while outsourcing the rest, striking a balance between control and cost efficiency.
      • Advantage: Combines the benefits of in-house and outsourced production.
      • Disadvantage: requires careful coordination to maintain consistency.