Template:BPB8

                              Manufacturing

    [] Description of the proposed organizational location, make vs. buy,
    facilities, and logistics.

    [] Emphasis must be on the productive use of capital, labor, and
    material resources, manufacturing processes, vendor relations,
    experience and distribution requirements.  Statements are needed which
    indicate initial volume and expansion requirements as well as
    product/process complexity, uniqueness, and costs.

Research and Development

Much of the time and effort at (Company) during the past XXX year period has been spent on research and XXX product/process development.

XXX products listed in the Products section have been tested for their ability to be manufactured and are XXX (currently ready, will be ready by XXX) to market.

Based on our pilot production experience with XXX (product), the following tasks/operations were tested to validate feasibility of manufacturing.

    Task/Operation (Sample)                               % of Time
    Product technology and methods                              20%
    Key parts and vendors                                       15%
    Processing sequence and repeatability                       20%
    Capital equipment and vendors                               15%
    Specifications and control measures                         20%
    Production lead-time and volume standards                   10%
                                    Total                       100%

    [] See also Production Builder(tm) described in Appendix B.

Pilot testing indicates standard unit production will be XXX hours per XXX units. Processes have been validated to ensure optimally cost-effective, quality product output.

Final tests were successful with regard to XXX (all, most, etc.) evaluation criteria. Results are available if need-to-know is indicated (proprietary information). Testing was conducted during the period XXX through XXX using XXX facilities.

Volume testing will be accomplished XXX.

    [] How this will be accomplished and when.

    [] Use milestone chart to indicate ramp-up tasks, resources, and
    milestones.

    [] Specify equipment facilities, labor, etc. required in terms of
    quantity, number, and cost.

The following product/process requires additional pilot testing prior to volume testing: XXX (list or otherwise indicate).

These products are expected to be ready for market over the following XXX period: XXX, XXX, and XXX (when other products are generating sufficient cash flow to support additional product development).

Production and Manufacturing

The process used to produce (product) begins with XXX (full description). Key factors in the manufacturing process are XXX.

Raw/prefabricated materials, components, sub-assemblies, required for production are XXX.

    [] List and describe equipment, material, and labor requirements.

    [] Are prices negotiable?

    [] Are they readily available?

    [] Alternate sources/materials?

    [] Quality/Technical specifications.

    [] Inventory requirements.

    [] Hazardous materials?

We take advantage of economies of scale by XXX.

    [] Quantity discounts, package deals.

    [] Indicate resource capacity and expected utilization over time, any
    installation and maintenance costs, and vendor availability if
    applicable.

    [] List and describe the business in terms of production rates,
    capacity constraints, or required quality assurance and safety
    programs.

In comparison to other companies, (Company)'s products are reproduced quickly and economically by XXX (how process/techniques accomplish this).

Comparative analysis shows these figures to be XXX.

    [] Higher, lower, or in line with competitors?

This is due to the fact that XXX.

    [] More efficiently produced?  (due to land costs, energy savings,
    leaner management)

    [] Is your product of better quality?

    [] Is your quality control program more thorough?

    [] Parts made in-house or subcontracted?

    [] Tooling required for production and estimated costs.

    [] Quality Control (INVESTORS will want to know that warranty costs
    will be minimal).

Integration (Make vs. Buy)

At (Company) we will XXX (fabricate, assemble, subcontract, etc.) the following XXX (key parts, components, subassemblies, etc.):

    [] List parts, etc. with vendors, lead-time, costs, etc.

People

Line employees include XXX. Staff employees include XXX.

    [] List required number of people and their skills.

    [] How and when will they be trained?

    [] Who will hire and manage them?

    [] Discuss procedures and measures of effectiveness and productivity.

To protect proprietary interests and information the following policies will be enforced (work with attorney to develop this section).

    [] See also EmployeeManualMaker(tm) described in Appendix B.

Facilities

The manufacturing facility will be located in XXX.

This location will provide needed space for initial production and expansion to meet projected demand over the next XXX (periods).

The acquisition cost for land and improvements is $XXX which will be allocated in XXX increments.

(Company) already owns/has access to/requires XXX.

    [] Capital equipment needed and its estimated cost.

    [] List equipment or facilities and the space and location required.

Selection of the site includes the following considerations:

    [] Room and cost for expansion.

    [] Land and construction costs.

    [] Transportation cost and route access - common carrier, company
    owned, pooling agreement with XXX freight forwarders.

    [] Risks and insurance.

    [] Packaging and material costs and availability (suppliers?).

    [] Labor pool availability, skills, costs.

    [] Local ordinances, licensing, and permit requirements.

    [] Government assistance (roads, training, exemptions, etc.).

    [] Government restrictions and requirements (OSHA, NLRB, etc.).

    [] Community attitudes toward business and manufacturing.

    [] Continued operating costs (utilities, communications, etc.).

An efficient production process hinges on proper layout of XXX.

    [] Layout of proposed plant and manufacturing flow chart.

Equipment will be deployed as indicated below.

    [] List equipment, number, capacity, space requirements cost, etc..

    [] Provide rough illustrations of equipment layout and process flow
    diagrams.

This equipment is used in the processes as described and configured above to ensure yield, lead-time, and costs are sufficient to provide projected gross margin.

Additional questions:

    [] Where will distribution centers be located?

    [] What packaging and handling equipment will be used and who will
    supply it?

    [] What special equipment, if any, will be needed? - i.e. trucks,
    tractors, etc.

    [] Will warehouses be used?  If so, where and what size?  What
    inventory levels will be carried?  Equipment?  Labor?  Competition?

Packaging and Transportation

The last steps in the manufacturing process are important in establishing the desired image to the consumer.

Of the standard packaging treatments available, the best choice for our needs is XXX (bubble pack, shrink wrap, poly bags).

And, since this is a readily available process, considerable savings can be made.

XXX (type of packaging) is more widely used, but in order to convey a unique selling image/position we are considering using XXX (another type).

Our competitors use XXX (type of packaging ) as well, but by using distinctive graphics (as discussed in Advertising & Promotion), our unique identity will be maintained.

Transportation will be XXX.

    [] How does your product ultimately reach your customer?

    [] How many steps are involved?

    [] Which is the "weakest link", and how will you address that?

    [] If using your own fleets, will they receive same graphics quality as
    the product itself?

    [] Is this the same method your competitors use?

Comparative costs show that XXX.

    [] How do your packaging and transportation costs look in comparison to
    the competition?

�