Setting up a Manufacturing Unit

Setting up a manufacturing unit is almost like building your house, and if you are a first generation entrepreneur, it is going to be a truly challenging and equally intense learning process. Manufacturing processes come in all shapes and sizes and require a substantial commitment. Often, manufacturing calls for notable and upfront financial investment for complex equipment, raw material and manpower with special skills. You must brace to deal with a broad array of responsibilities concurrent with the multiple steps of a manufacturing process.

MACHINERY: The first and imperative decision that no one else but you need to take is based on your plans of expansion or scale intended in the coming five years from commencing the unit operations. The planning for required quantity and capacity of machines ultimately depends on the scale-up outlook. Further, one must also account for the number and type of machines required for production as the device providers have own lead time for delivery. Hence, one needs to take into account the total time required from ordering to delivery and installation of machines. While finalising the machines the time needed for maintenance or error corrections in case of any breakdown needs to be factored in as service plays a significant role in the production process. This might encourage you to find a local vendor of machines.

RAW MATERIAL: An important factor to take into account while setting up the unit is the nature of proposed product line and dynamics of this product category as the volume, perishability and other characteristics of raw material required play a key role in finalizing the space and warehousing requirements.

AVAILABLE INFRASTRUCTURE: While choosing the factory space, one must ensure the availability of required Electric Power Load availability. Otherwise, you may incur the extra heavy cost of procuring additional electric load. One must also be sure of other factors like availability/accessibility of labour, vendors and logistics as these are essential elements that play a crucial role in defining the day to day operational cost.

FACILITY LAYOUT: You must hire a good factory consultant at the second stage to plan your facility layout and correctly estimate the space required for the manufacturing facility. An expert consultant will automatically design the layout as conforming to 5S (focused on visual order, organisation, cleanliness and standardization) and Kaizen (a system of continual improvement as a component of lean manufacturing). This will ensure an efficient assembly line regarding smooth flow and movement, minimal wastage and time-saving operations.

LICENSING: While all this is being taken care of, one must find out the licenses and approvals required for commencing factory operations as it varies from state to state. Factory License is one such license that is must in all states. And do not forget to take a hard look at environmental regulations, if any. To get necessary licensing approvals may be time-consuming and hence to plan in advance for the same can be a major factor in meeting launch timelines.

I would like to advise that any entrepreneur should get completely involved in all the processes of factory establishment as it this is a task full of daunting challenges. Finally, you need to find a process or market which is unserved or undeserved. Get commitment from multiple customers before you jump. A streamlined manufacturing process complemented by strong market demand is a win-win.