9B18N003: Yash Building Centre - Planning and Expansion - Report Writing - Management Assignment Help

Assignment Task:

Task:

In March 2016, after achieving growth of more than 100 per cent and gaining goodwill in the construction market among builders and contractors, Mangesh Jadhav, managing partner of Yash Building Centre (YBC), was planning to expand. After elaborate discussions with local builders, Jadhav planned to enter the business of tiles, pavers, and curbstones. He believed that this expansion would improve the firm’s profitability and allow him to take full advantage of the relations with the company’s existing customers. After discussing the matter with his partner and considering the report submitted by a consultant Jadhav had appointed, Jadhav needed to decide whether to launch the new product line or continue with his existing line. Before he made his decision, Jadhav needed to consider the return on investment along with the capacity at which the new unit would break even.

COMPANY BACKGROUND
YBC was created by Jadhav and Shubhangi Bhamkar in 2014 as a partnership unit. In the short span of two years, the firm established itself as a supplier of quality fly ash bricks and blocks to building and other construction contractors. YBC was ISO-9001 certified and used the best skilled labour in its production process. It emerged as the prime manufacturer and supplier of fly ash bricks in Raipur—the capital city of Chhattisgarh—in central India. The firm owned land with ease of access to railway, road, and other transportation facilities, and basic infrastructure was erected on the land. Its operational capability mainly catered to the requirements of building contractors, and it did not sell its product in the retail market.

BRICK AND BLOCK MANUFACTURING
Fly ash was the main constituent or raw material in the bricks and blocks. The other materials were metal dust, lime, dolomite chips, phosphogypsum, sand dust, super plastic, and white cement. The process consisted of mixing and grinding the materials in a pan mixer. The materials had to be mixed in specific proportions to ensure uniform quality and economic production. The pan mixer used for mixing was rotated for five minutes, and then the mix was discharged from the mixer. The mix, through the conveyer belt, was then moved to the brick-making machine where the hydraulically compressed bricks were continuously produced. A vibrating table was used to compact the mix into the moulds, making the bricks and blocks the desired shape and size.

FINANCIAL STATUS

YBC was not considered to be a major player in the industry by its competitors and customers. As a small- scale firm catering to local markets, it faced challenges from other unorganized suppliers of building material. The products manufactured by YBC were used by a selective group of builders and wholesale distributors, who were reluctant to compromise on product quality. The company’s local supply helped contractors get quality products at a reasonable cost with minimal transportation costs. The firm’s overall performance in the first two years of operations was encouraging—despite it not having been able to earn a profit.

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