Sustainability of an Unit

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SUSTAINABILITY OF AN

UNITPRECAUTIONS NEEDED

VANLALTHLANAASSISTANT PROFESSOR

PACHHUNGA UNIVERSITY COLLEGE


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SUMDAWNNA

Zawrh thila eizawnna ZotawngDictonary

Lei leh hralh Zirlaite Dictionary

SUSTAINABILITY

A sustainable business is one thatensures that all its activitiesadequately address current

environmental, societal and economic


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Reasons for Sickness/ Incipient Sickness (3rdAll India Census of Small Scale Industries,2001)

n Lack of Demand 71.6 %n Shortage of Working Capital 48 %n

Marketing Problems 44.5 %n Power Shortage 21.4 %n Non-availability of Raw Material 15.1 %n Equipment Problems 10.6 %

n Labour Problems 7.4 %n Management Problems 5.5 %


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SURVIVAL AND GROWTH

40% of newly established enterprisesbecomes bankrupt after 3 years of itsinception.

In NE India, it is considered best to use traditionaltechnology with a modern concept in small andmedium enterprises.

According to Deming, problems in an organisationis due to :

1950s

85% - System

15% - Persons concerned

After 2000-


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RISKS1. Financial mismanagement

2. Product becoming obsolete

3. Decline in demand for the product4. Change in Government policy

5. Price fluctuations

6. Workers strike

7. Dissatisfaction of employees

8. Uncontrollable situations


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Exercise No 1ANALYSING

Using Strength, Weakness, Opportunitiesand Threats (SWOT) methods

Analyse:

1. Product2. Technology

3. Finance

4. Location5. Government Policies

6. Material Resources

7. Human Resources


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PRODUCT

nPricing

n

Quality ControlnMarketing/Promoti

onnBranding


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TECHNOLOGY

Up to date Technology

Efficient work scheduleEfficient plant layout

Trained workersEfficient machines and

tools


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FINANCE

THE MONEY IS NOT YOURS, YET.

Account Manager

Accounting System

Loan credit period

Working Capital ManagementAccountability to all workers

Internal audit system


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LOCATIONLOCATION, LOCATION,

LOCATION.

AccessibilityTarget Customers

Production Unit RetailingUnit Distance

Parking facilities


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GOVERNMENT POLICIES

Industrial Policies

Subsidies

Long Term VisionPolitical


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MATERIALRESOURCES

Procurement/Purchase

Sales unitInventory Control

System (EBQ)Internal Pricing

System


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How much to buy?

Economic Order Quantity Optimumquantity for purchase

= 2 x Annual consumption x cost of placing order

Cost of carrying one unit inventory for one year

Eg: Let A = 1,200 units; Cp = Rs.10; Cc = 24% ofunit cost; Cost of one unit = Re 1

Hence EBQ is 316 units per order and he shouldplace orders 4 times (316/1200) times in a year.


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HUMAN RESOURCES

Satisfaction of Workers

Working conditions

Pay structure

Personal connection

Efficient hiring procedure

Working hours


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SUSTAINABLE BUSINESS ENVIRONMENT


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PEACE


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Have you ever wonderedwhy -

A person owning a HarleyDavidson bike proudly tattoos theHD logo on his arm while anowner of a Hero Honda bike doesnot?

You wanted to buy things that aremore costly than others eventhough it performs the same

required process?


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SICKNESS

Internal:

1. Low product quality

2.

Poor marketing efforts3. Financial mismanagement

4. Wrong location

5. Excessive inventories

6. Unplanned capital expenditure

7. Under utilisation of capacity


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Remedial Measures

Identification at initial stage

Integrated approach

Change in Management

In depth investigation(Causes/Close or Reconstructdecision)

Internal Audit

Assistance of Financial Institutions


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KA LAWM E

Sustainability of an Unit

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