Business Model Canvas of AAC Blocks Manufacturing Units

Transcription

1 Business Model Canvas of AAC Blocks Manufacturing Units Bhosale Nikita K. UG Student Civil Engineering Rajarambapu Institute of Technology, Islampur, Sangli Dr.A.C.Attar Professor Department of civil engineering of organization, Rajarambapu Institute of Technology, Islampur, Sangli Abstract The goal of this paper is to understand the role of business model canvas in civil engineering related business management. The need for replacing the clay bricks was recognized due to high quantity of coal burning which leads to tremendous amount of carbon emission in the atmosphere and also due to high consumption of fertile soil for manufacturing of the same. Hence the idea of business development of AAC blocks manufacturing sticks. It is eco-friendly product. The essence of the business can be found out by using tool Business Model Canvas. This recognizes strengths and weaknesses of AAC blocks manufacturing business model in order to determine strategic management of the business. This help in value creation to the product. Keywords - Project selection, AAC blocks manufacturing unit, Business model canvas, Value creation. I. INTRODUCTION Documentation of existing business or development of new business model lean start-up and strategic management template is required; this is known as the business model canvas. Alexander Osterwalder was the first who proposed The Business Model Canvas. Similarities from the wide range of business model concepts were studied by Osterwalder and finally he proposed the single reference business model. It guides the business in affiliating their activities by illustrating potential trade-offs. In the infrastructure of this business model contain key partners, key activities, key resources, value proposition, customer relationships, channels, customer segments, cost structure, revenue streams. In literature, business model are considered essential aspects of successful businesses as their main purpose is to differentiate a particular from other and to provide it an advantage over its competitors. The research interest in business model received the increasing attention from scholars and business strategist interested in explaining firms performance that increase the worth of product or business and competitive advantages. In this paper the business model canvas tool used for the Autoclaved Aerated Concrete blocks manufacturing plant business. The plant location selected in Satara city, Satara district, Maharashtra, India. The business model of this Autoclaved Aerated Concrete blocks manufacturing plant is design as per site location selected. According to market survey all information collected arranged in the perspective of the business model. All the key partners, key activities, key resources, value proposition, customer relationships, channels, customer segments, cost structure, revenue streams of the AAC blocks manufacturing plant is available in this paper. II. CASE STUDY Business Model Canvas consists of nine components of business model. Instead of simply having them in a row, they are put on a canvas so that visualization of the different issues relation is improved. On this basis user can able to map, discuss, design and invent new business models. The whole model is divided so that market in on right side and product on left side. The value proposition is divided in the half. The plant selected was in Satara city, Satara district, Maharashtra, India III. COMPONANTS OF BUSINESS MODEL CANVAS Key Partners: The network of suppliers and partners that makes the business model work is key partnership. The manufacturing plant of the Autoclaved Aerated Concrete blocks located in Satara city is private limited of two partners Miss. Nikita Kiran Bhosale and Mr. Kiran 1624 Bhosale Nikita K., Dr.A.C.Attar

2 Babanrao Bhosale native of Satara city itself. Other than this there are some individuals who contribute to the manufacturing of AAC blocks. Key suppliers for the raw material of the AAC blocks are found out in periphery of the Satara city making it more economical. Providing the list of raw materials and their suppliers. 1. Fly ash: i) Kanaiya Traders, Mangalwar peth, Satara. ii) Birdawade Enterprises, Pune 2. Quick Lime: i) SRC Chemicals Pvt.Ltd. Bhosari, Pune. ii) Benzer Multitech India Pvt.Ltd., Pune. 3. Gypsum: i) Shri Balaji Plaster, Pisoli, Pune. ii) M.S. Omega Plasters and minerals, Pune. 4. Aluminum Powder: i) Nice Chemicals Pvt.Ltd. Chinchwad, Pune. ii) Rashi Enterprises, Pune. 5. Cement: i) BMG Suppliers, Satara ii) Dipak Pvt.Ltd., Satara. 6. Chemicals: i) Bricks Vision Equipments, Satara. ii) Emerald Building Solutions, Pune. 7. Suppliers of the manufacturing plant are: i) Brickvision equipments, Pune. ii) Atharv Constructions, Sangli. The includes some other key partners who consult the business and also IT remote supporter etc. Key activities: The most important task a must carry out in order to fulfill its business purpose, all these are the key activities. Manufacturing of AAC blocks is the first and the fore most important key activity. Manufacturing unit is located in Satara city; sailing is another key activity next to manufacturing. Billing and payment is also included in key activities. Payment accepted in advanced as well as after delivery. The delivery will be given according to customers needs and the logistics will be provided as per customers demand. All care will be taken during transport by the. If there is any accidental breakage or wastage, will be responsible for that only if the transport is provided by the. Another key activity is maintenance in which delivery will be provided with the installation guidelines. As the is starting with a small unit, all activities will be controlled by the key partners only. Another key activity is marketing. Marketing through dealers and online advertisement is the s marketing strategy. Key resources: Key resources are the most important asset needed to make business model work successfully. These resources help to generate value proposition and revenues. Labors are one of the key resources, without them manufacturing is impossible. For the manufacturing of AAC blocks at least two skilled and three unskilled labors are required. Another key resources are raw materials. These are stored in bulk for a period of six months. For the storage of raw materials warehouse is the key resource. Sales data, customer data which are the key resources must be kept in record to increase production. Value Proposition:.The value proposition is the simplest way to identify the needs of customers and design the product as per customer s need. Value proposition of AAC blocks is identified with the reference of customers pains, gains, pain relievers, gain creators. The detailed structured discussion was done with 10 customers in the selected vicinity for the study. The data collected reflects some pain and gain of customers. Pains are slow construction, more wastage, water absorption in clay bricks, large quantity of plastering material required for clay bricks, no. of blocks require per cubic meter are more for clay bricks etc. This paper gives the pain relievers and gain creators of AAC blocks for selected customers. Pain relievers are speedy construction, less wastage, water absorption is almost nothing, very less quantity of plastering material is required, no. of blocks required per cubic meter are less etc. The gains of the AAC blocks are, it is to handle, less mortar is required in joints, less maintenance, speedy construction etc. The gain creators are eco-friendly product and light in weight, it has high strength as compare to the clay bricks, fire resistance, thermal conductivity is less, accurate in dimensions, curing of wall requires less water etc. This will help to develop the business model of AAC blocks manufacturing in selected vicinity i.e. in the Satara district of western Maharashtra. The added value to the product can increase the customer s demand Bhosale Nikita K., Dr.A.C.Attar

3 Customer relationships: Customer relations are the process of developing and maintaining valuable relationships with customers. The will meet the deadlines of the orders from customers in stipulated time. Any hampering in the issue of quality and quantity will be properly handled and took care by the to maintain healthy customer relations. Special services will be provided for regular and reputed customers of the for the future expansion in terms of production growth and customer relations. Channels: Channel is a pathway to reach to your customer segment. It is different for different industries and changes according to the demographic features. In the business of AAC blocks manufacturing, channeling the market through dealers and contractors is more beneficial. Other than this, small orders from direct customers at the office location or through e-commerce are also the part of this channel. Customer segments: Customer segments allow knowing about the community or group of people that must be served by the businessman. To run the profitably, every business should know their customers thoroughly. With the help of customer segments, profit margins are diagnosed. For AAC blocks plant which is located in Satara city, have their customers in as well as around the periphery of Satara and nearby districts. Customer segment for AAC blocks are contractors, civil engineers, dealers, suppliers of building elements, architects and direct customers. Customers can be segmented according to economy. For AAC blocks it includes people who can afford and buy them in bulk quantity. Cost structure: All the expenditures and costs required to sustain and run the business smoothly is called Cost structure. It provides clear idea about taking step in any business. Using cost structure, one can maintain the principle. For AAC blocks plant manufacturing business, labourers salary, taxes, electricity bills, water bills, etc is included in cost structure. Fixed assets like building construction, storing shed, transport vehicles, manufacturing equipments are the core part of cost structure. Other expenses like advertising, communication, insurance, maintenance, logistics, etc are also included in it. Revenue streams: The cash back flows after production and sailing of the product are the revenue streams. Revenue stream is the only source of making profit. Sale of AAC blocks to the ordered customers is the only source of earning. The payment must be done in two parts- Firstly, pre booking with some advance and remaining after the delivery of the blocks. The desired target of profit must be fulfilled by having continuous record of revenue streams. IV. CONCLUSION The tool which is described in the above study the business model canvas can be utilized in any business venture along with the firms related with construction field and civil engineering. The use of Business Model Canvas has a Greater positive impact on the aspects of business like production sector, sales area, and maintenance department and also helps in maintaining the public relations for better bonding between employees and customers. The implementation of Business Model Canvas on AAC block manufacturing unit brought a difference in ease of management of project and in overall betterment of the business. The Business Model Canvas for the AAC block manufacturing unit is as follows; Attachment 1 V. REFERENCES 1] Adekola Owolabi, B.Sc, MBA; The Business Model Canvas As A Tool For Building Relevant Business Models For Engineering Firms, Nigeria. 2] Aki Pekurithe, Role Of Business Models In Construction Business Management; University Of Oulu. 3] Bastian Coes, Critically Assessing The Strengths And Limitations Of The Business Model Canvas, Master Thesis Business Administration/ 4] Ching, H. Y., And Fauvel, C. (2013). Criticisms, Variations And Experiences With Business Model Canvas, European Journal Of Agriculture And Forestry Research Vol.1. No.2, Pp , December ] Slavik Stefan, Bednár Richard; Analysis of Business Models, Journal of Competitiveness, Vol. 6, Issue 4, pp , December Bhosale Nikita K., Dr.A.C.Attar

4 Attachment - 1 The Business Model Canvas of Autoclaved Aerated Concrete Blocks Manufacturing unit DRITA Building Elements, Satara Key Partners Key Partners: 1. Nikita Kiran Bhosale 2. Kiran Babanrao Bhosale Key suppliers of raw materials 1. Kanaiya traders, Satara. 2. SRC Chemicals, Pune. 3. Bricks Vision Equipments, Satara. 4. BMG Suppliers, Satara 5. Atharv Constructions, Sangli. Team or Company Name: Key Activities COMPANY Value NAME Manufacturing Propositio process n Sailing Replace the Billing and Payment clay bricks Delivery of AAC Economical blocks On time Installation delivery Guidelines to Online costumers payment acceptance Maintenance of factory Advertisement of Customer Relationships Phone contact Customer can contact directly at office location Interaction through website Customers feedback Customer Segments Civil engineers Contractors Building element suppliers Dealers in nearby areas Direct customers 1627 Bhosale Nikita K., Dr.A.C.Attar

5 Business consultants Key Resources Channels 1. Chougule consultants, Labors Direct Sangli Website designers 1. Green leaf Info., Sangli Raw material Warehouse The Transport vehicles Sales data Costumer data customer contact Through dealers Through website Relations with costumers Cost Structure Revenue Streams Labor s salary Sailing of AAC blocks Building construction All the equipments required for manufacturing of AAC blocks Transporting vehicles Logistics Taxes Insurance All kind of bills Maintenance Advertisement Website design 1628 Bhosale Nikita K., Dr.A.C.Attar