Site, hours and equipment
The plant runs in an 800 m² leased factory with one shift: Monday to Friday, 8:00 to 17:00 with an hour for lunch, and Saturday 8:00 to 14:00. That gives about 199 machine hours a month per machine before start-up and shut-down time. The first three months after lease signing are set-up, with no production.
The equipment list is the client's, as given, with the machines duty-paid and installed.
| Client equipment list | USD |
|---|---|
| CNC router (Excitech) | 40,000 |
| Nesting machine (Excitech) | 75,000 |
| Panel saw (Excitech) | 8,000 |
| Edge bander with glue pot (Excitech) | 54,000 |
| 200 kVA generator with tank (Caterpillar) | 50,000 |
| Compressor, fridge, tank | 15,000 |
| Steel structure and glazing | 50,000 |
| IT and security | 8,000 |
| Electrical and plumbing | 15,000 |
| Machine installation, in factory | 5,000 |
| Software | 7,000 |
| Forklift | 25,000 |
| Air conditioning | 2,000 |
| Furniture | 5,000 |
| Ducting system | 12,000 |
| Equipment and fit-out, client list | 371,000 |
How production flows
Every product follows the same path through the plant. Boards are cut on the nesting CNC (with the panel saw for back panels and recuts), edged, bored where needed, checked and fitted with hardware. The flow then splits: catalogue items are flat-packed and dispatched to the customer; project and hotel-room parts are pre-assembled, dispatched and installed on site by the plant's crews.
Green border: the bottleneck station. Dashed: used only for some parts.
The Nesting CNC sets the pace of the whole plant: one shift is enough for the plan as long as it stays below about 85% loaded. Station loads are on the Recommended option below.
Capacity and staffing
The client's file staffs the plant with 13 operators at $400 a month, 20 helpers at $200 and 2 designers at $1,000. The client gave no management salaries and no installation crew; Base adds our estimate of $3,500 a month for a management team (plant manager, accountant, online sales lead) and $1,200 for one crew of two installers and two helpers. Vans for the crew are not added.
Capacity could not be tested on the client's data: standard machine times per item were not available, so no station utilisation or bottleneck can be read from this option. The recommended option answers this with the production module (station times per item).
The production module times each catalogue item, project m² and hotel room through ten stations, after start-up and shut-down at each machine. The nesting CNC sets the plant's pace.
One shift is enough for the plan. At year-5 prices and the same mix, practical capacity (85% of the nesting CNC) is about $1.62 million of revenue, and the absolute maximum about $1.91 million, against $1,570,238 planned in year 5.
Nesting CNC utilisation by year
| Year | Utilisation |
|---|---|
| Y1 | 34.4% |
| Y2 | 65.0% |
| Y3 | 68.8% |
| Y4 | 75.4% |
| Y5 | 82.3% |
Healthy range is 60–85% (see red flags). Above 85%, extra hours on the nesting machine come before any second shift.
Station utilisation, year 5 (one shift)
| Station | Utilisation |
|---|---|
| Board store | 24.3% |
| Nesting CNC | 82.3% |
| Panel saw | 17.9% |
| Edge bander | 49.2% |
| CNC router | 31.6% |
| Cleaning, QC | 13.8% |
| Hardware | 56.5% |
| Packing | 61.3% |
| Assembly | 61.6% |
| Dispatch | 17.5% |
The Nesting CNC is the bottleneck at 82.3% in year 5. Five stations stay below a third of their hours, which is why lean staffing (L1) cross-trains helpers between them.
More detail Stations, their roles and productive hours
| Station and role | Hours a month | Used, year 5 |
|---|---|---|
| Board storeReceive, store and stage sheets (forklift) | 162 | 24.3% |
| Nesting CNCCut and drill panels from full sheets. Start-up: power, homing, spindle warm-up, vacuum, load programs | 147 | 82.3% |
| Panel sawBack panels, drawer bottoms, recuts | 159 | 17.9% |
| Edge banderEdge tape on visible edges. Glue pot heat-up 5–20 min; tape colour changes | 132 | 49.2% |
| CNC routerHorizontal boring, special shapes (confirm role with the client) | 150 | 31.6% |
| Cleaning, QCDust off, check, label | 162 | 13.8% |
| HardwarePre-fit hinge cups, runners, latches; bag fittings | 162 | 56.5% |
| PackingFlat-pack cartons | 162 | 61.3% |
| AssemblyProject pre-assembly and test fit | 162 | 61.6% |
| DispatchLoad, documents, finished-goods store | 162 | 17.5% |
Staff grow from 32 people in year 1 to 42 in year 5, with 11 operators and 14 helpers at full volume (improvement L1), five installation crews from year 2, and a management team. The station roles carry the client's equipment list; the CNC router's exact role next to the nesting machine is to be confirmed with the client.
Stock, credit and cash cycle
The client's plan uses a working-capital placeholder of $60,000. In the model it becomes stock of $62,054, held flat for five years with 30 finished units in stock. It is not linked to volume, supplier credit or customer deposits, so it says little about liquidity risk.
Working capital follows a practical stock policy: imported boards bought by container for about 60 days of use, 10 days of work in progress, finished catalogue stock of 45 days (at least one unit per item and finish), 15 days of supplier credit, hotels paying 30 days after delivery, and 50% deposits.
| Working capital, USD | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Inventory (boards, work in progress, finished stock) | 78,942 | 84,848 | 95,339 | 110,214 | 126,610 |
| Receivables (hotels) | 1,585 | 6,529 | 6,725 | 9,235 | 11,890 |
| Supplier credit | (15,712) | (16,972) | (18,527) | (20,949) | (23,594) |
| Customer deposits | (31,324) | (37,160) | (38,275) | (41,732) | (45,362) |
| Net working capital | 33,491 | 37,245 | 45,262 | 56,768 | 69,544 |
| Inventory turnover (times a year) | 6.5× | 6.9× | 6.6× | 6.3× | 6.1× |
| Days of inventory | 56 | 53 | 55 | 58 | 60 |
| Cash cycle (days of revenue) | 12 | 12 | 14 | 15 | 16 |
Stock turns about 6–7 times a year, close to the 7–8 times typical for small and medium wood-furniture makers. Without the project deposits (improvement L4), the same policy needs $63,230 in year 1 rising to $103,016 in year 5. Slow imports (90 days of stock), no supplier credit and hotels paying at 60 days, all together, would add about $83,000 by year 5. That is a real liquidity risk, but secondary to price.