Portfolio Charter - Process Improvements at Fragrochem.
Version | Remarks | Author | Date |
| 0.10 | Initial Draft - Portfolio Charter for discussion. | Chetan Thakkar | October 26, 2010. |
Background:
Fragrochem was established in 1980 by Mr. Bhupen Thakkar and Mr. Niranjan Thakkar. This is an organization that has been run in a traditional manner. After assessing the present situation at Fragrochem, we are taking steps that have never been taken in the history of Fragrochem in order to grow this business in the next five years. We have built a team comprising of the following members:
Bhupen Thakkar - Proprietor and Founder of Fragrochem.
Chetan Thakkar - Director - Customer Relations and Management Consultant.
Prakash Thakkar - Director - Finance and Accounts.
Richard Price - Chief Mentor guiding us two hours every month via Skype calls.
Narendra Rami - Sales Director.
Paresh Raghuwanshi - Relationship Manager.
Technical Consultant - yet to be named.
Introduction:
This document outlines the Portfolio Charter for process improvements at Fragrochem. In order to grow Fragrochem, the projects and programs mentioned in this document will be executed over the next five-years. The high-level purpose, justification, vision, and scope of this portfolio of projects and programs is outlined below. The portfolio will follow the guidelines provided by the Project Management Institute (PMI). The PMI model will be customized to the requirements of a Small and Medium Size Enterprise (SME).
Justification:
We visited several customers involved in the manufacture of:
- Wash Products - Handwash, floor cleaners, toilet liquid cleaners, soaps.
- Room fresheners.
- Incense sticks.
- Cosmetics manufacturers like facial creams, lotions, and deodorants.
At Fragrochem, we also lack a methodology to evaluate the quality of ingredients. The tests to evaluate the quality of ingredients used will be a major factor in the selection of suppliers.
Most of the clients that we have visited so far ask us for matching specific fragrances. Presently, our main tool is the “nose” to match the fragrances. This is takes up a lot of time and also limits us to the set of one-hundred or so essential oils and aroma chemicals in our stock. We wish to reach a stage where we are able to analyze the fragrance structures with a quicker turn-around time as well as preparing a closer match to the fragrance structures in the market. This step requires an understanding of fragrance structures and analyzing fragrances using latest technological advances or utilizing scientific techniques in deciphering the existing fragrance structures.
Based on our assessment of the business situation, Fragrochem needs to embark on the projects and programs outlined in this document in order to bring us on a strong footing to solve customer problems, be more competitive and efficient in managing operations.
Vision:
We envision Fragrochem to understand the details of fragrance chemistry with products across the pH scale ranging from strong acid cleaners on one side of the scale to the strong bleaches on the other side of the pH scale. Our understanding of fragrance chemistry will help us to ensure the high-quality of raw materials and choice of suppliers on merit. We will undertake projects to understand fragrance structures of the most popular fragrances and analyze the structures of these fragrances in order to create unique smells for our target markets.
Strategic fit:
We will strategically target high-margin segments of fine fragrances, Deodorants, handkerchief perfumes (Attarwalas), and Masala Agarbatti exporters initially. As we build our understanding of the fragrance chemistry and raw-material testing and get a good grip of the supply-chain, we will then target the low-price segments of the Indian market. Low-price Indian market segments will require us to cut-costs and stay lean and mean in our operations without compromising on quality.Our lean and mean strategy will naturally transcend into high-margins for our exports segment. We intend to start planning our entry into the exports market by April 2012.
Outcomes:
We expect specific outcomes from these projects which will put us on course to continuous improvement. These outcomes are summarized below:
- Ability to analyze competitor’s products in a time-efficient and cost-effective manner (Estimated Time frame: Methodology by December 31, 2010.)
- Ability to analyze raw materials for quality efficiently and cost-effectively (Estimated Time frame: Guidelines by January 2011).
- Ability to understand fragrance chemistry - the effect of chemistry on different end products on various sections of the pH scale.
- Reduce cost of production for popular fragrances by 35% by April 2011 as a result of a combination of factors: Utlizing synthetic raw materials instead of pure essential oils, analyzing raw materials for quality and grading supplier’s raw materials based on quality,
- Ability to prepare formulations for same smells across different product ranges. for e.g. Same lime fragrance when used with products across the pH scale would smell different. Challenge will be to create the same smell across different product ranges.
- Entry in various market segments.
- Favorable ratings from Customers.
- More value for money in procuring raw materials.
Our understanding of fragrance chemistry will lead to reducing the raw-materials used for different product ranges. This will lead to more efficient formulations and hence lay the foundation for minimum cost for products in every category.
Scope:
This document provides a high-level overview of the individual projects and programs. Scope of every individual project and program will be carried out separately.
Benefit Strategy:
Key benefits expected from this portfolio of projects and programs are summarized as follows:
- Build and document an understanding of fragrance chemistry. Specifically,
- We will be able to analyze existing fragrance structures to match or better the competitors’ products.
- We will be able to classify the various raw materials (aroma chemicals and essential oils) into different functional groups.
- We will map the different functional groups and document how they influence the different end-products across the pH scale.
- We will develop and document procedures to test raw materials - aroma chemicals and essential oils.
- We will setup a laboratory to test different fragrances with end products before presenting to the customers.
Assumptions and Constraints:
Assumptions:
- Projects and Programs will be prioritized in accordance with organization goals.
- Any change to the plans will require it to be approved by a Change Control Board.
- The Change Control Board will be a fairly informal setup comprising of the key stakeholders, e.g. a four-member committee comprising the Chairman Mr. Bhupen Thakkar, CXO - Chetan Thakkar, Chief Mentor - Mr. Richard Price and the Technical Consultant identified for this purpose.
- Some projects like Microencapsulated Liposomes for woven fabrics will be taken up if we get some participation in funding from end-customers.
As is the case with most small and medium enterprises, budget is a constraint. This makes prioritizing the projects very important.
Risks and Issues:
Lack of qualified employees.
Lack of infrastructure facilities like laboratory, advanced machinery.
Time scale:
Times mentioned in this document are for reference purposes. Actual times will be agreed upon and decided after consultation with the team.
Stakeholder considerations:
Some of the most important stakeholders to be considered through out the different projects and programs are:
- Environment.
- Customers.
- End Customers using different products.
- Employees and Consultants of Fragrochem.
- Government agencies and Regulatory agencies.
Projects and Programs will be initially led by Chetan Thakkar. As we move forward, the plan is to hire additional project managers to manage individual projects as well as programs. Focus will always be on hiring specialists who deliver valuable services.
Initial high-level road map:
90% of our time in manufacturing is involved in matching fragrances. We want to speed this process by adding cost-effective but efficient techniques to match product fragrances. The high-level goal of this project is to arrive at a methodology for matching fragrances. A fast-track method of matching fragrances as well as a not-so-fast but more cost-effective method of testing utilizing Gas Chromatography - Mass Spectrometry like techniques.
The first project we will take up will be to reduce the turn-around time from the customer’s request to match fragrances to our delivery of samples. This is crucial in the sales process and is a high-priority project.
Other two projects in the order of priority are:
- Classify different raw materials into different functional groups and develop a know-how to classify any aroma chemical or essential oil into various functional groups. (Need Guidance from Technical Experts, books).
- Build an understanding of how each functional group of aroma chemicals reacts with different products on the pH scale.
Projects to be executed:
- Methods to analyze the various products in the market with a view to match the fragrances as well as to study the fragrances.
- Classify different raw materials into different functional groups and develop a know-how to classify any aroma chemical or essential oil into various functional groups. (Need Guidance from Technical Experts, books).
- Project to create a quality policy and framework for the organization. Develop and document guidelines to test the quality of essential oils and aroma chemicals in a cost-effective manner.
- Build an understanding of how each functional group of aroma chemicals reacts with different products on the pH scale.
- List various product categories and understand at what pH scale (or range of pH scale) does each product belong. Some of these products are:
- Floor cleaners.
- Toilet Liquid cleaners (TLC).
- Hand wash soaps.
- Soap bars.
- Detergents.
- Shampoos.
- Conditioners.
- Incense sticks or Agarbattis.
- Facial creams.
- Moisturisers.
- Lotions.
- Talcum pow ders.
- Kumkum.
- Lip-sticks.
- Deodorants.
- Scented supari and chewing tobacco.
- Fine Fragrances.
- Hand sanitizers.
- Room/ air fresheners.
- Insecticides and Insect repellents and many more.
- Categorize different product markets into segments and prioritize them based on margins, importance from strategy, cash-flow, revenues and other factors.
- Based on the list of priorities, build an understand of the fragrance chemistry for different functional groups.
- Cut costs for different products in order to make them competitive in the Indian market.
- Evaluate suppliers versus manufacturing/ growing raw materials.
- Evaluate and decide on the use of natural essential oils versus newer synthetic chemicals.
- Understand the RIFM and IFRA guidelines and implement them into the exports operations for Fragrochem. Decide strategy for exports market into developed nations as well as developing nations.
- Evaluate use of Information Technology for different aspects of the business - Sales and Marketing (Social Media Marketing, Use of salesforce.com modules, etc.), Payroll and Human Resources, Manufacturing (storing of fragrance formulations), website development, Analysis (Gas Chromatography / Mass Spectrometry, etc.)
- Project to Evaluate and implement of automated machinery for manufacturing, analysis and design phases of operations.
- Project to understand microencapsulated scent liposomes in woven fabrics.
- Laying guidelines for team selection, maintaining secrecy and confidentiality of formulations and important aspects of business.
- Project to lay the foundation for invention and patenting of aroma chemicals with unique smell.
- Program to launch a fine-fragrance value brand for the Indian market.
