Professional Practice 3 _ RMIT _ 2019

Page 1

Hi!

We are ... “ THE CIRCULAR REVOLUTION ” #upcycle #circulareconomy #circularity #nowaste #sustainability #recycledmaterials #reuse

Leon Chengqi Wang Yolanda WanZhi Du Kiki QI LIU


Hi!

We are ... “ THE CIRCULAR REVOLUTION ”

At Exist, every day is Earth Day. Beautiful, luxurious, comfortable products, don’t always need to come at a cost to our environment. Moreover, they can even help preserve it, as our circular homeware, re-engineered exclusively from the things you discard, is proving.

Leon Chengqi Wang Yolanda WanZhi Du Kiki QI LIU






Key Innovation

Waste

Treatment

Design

Fabrication

Sale

Profit


Procduct

Design

Wholesaler

Fabrication

End-to-End STRUCTURE

Traditional STRUCTURE Distributor

VERSUS

Procduct

Retailer

Sale

Consumer

Consumer


ARTIFICIAL

NATURAL

VERSUS


AUD$5/KG * 2TON = AUD$10,000.00

EXIST * 2TON = AUD$0.00

VERSUS

PHA

POLYSTYRENE


CNC (Computer Numerical Control)

HANDCRAFTED

VERSUS


Manufacturing Machine

INCREATE EFFCIENCY

Machine purchase on STAGE 01

Machine purchase on STAGE 02

Machine purchase on STAGE 03

4 hours / 1 chair

3 hours / 1 chair

2 hours / 1 chair


Manufacturing Progress STAGE 01

STAGE 02

STAGE 03

Collect the polystyrene

STAGE 04

STAGE 05

Clean and classify the type of polystyrene.


Manufacturing Progress STAGE 01

STAGE 02

STAGE 03

Heat in 140 degree to transform polystyrene waste into oil that contains 83% of styene. “Elementary Bricks“

STAGE 04

STAGE 05

Transform the oil into the special container to feed to a specific bacterium, Pseudomonas putida.


Manufacturing Progress STAGE 01

STAGE 02

STAGE 03

This bacterium has provide capable of turning the styene oil into tiny granules of PHAs (Polyhydroxalkanoate), which is the white area in the picture.

STAGE 04

STAGE 05

Then we add predator cells (bacteriovorus) into this container to make the bacteriovorus predation occour, which will release the hydrolytic arsenal form the prey cell and generate the Pure PHAs.v


Manufacturing Progress STAGE 01

STAGE 02

STAGE 03

STAGE 04

STAGE 05

So we got soild PHAs which is suitable for CNC process.

After we get the pure PHAs, we transform it into small granule to be prepared for melting into the row material we need.

So we got PHAs wire which is suitable for Fused Deposition Modeling process.


Manufacturing Progress STAGE 01

STAGE 02

STAGE 03

STAGE 04

STAGE 05

STAGE 04

Than we use CNC mechine to generate our chairs, which will save lots of labor fee.

In terms of the Waste PHA generate form the CNC process, as it is a material that can be heated to dissolve, so we can bring the waste to the melting process to generate the new row material.


Risk analysis

Risk

Likelihood

Impact

Strategy

The Polystyrene material not ableto performe at a required level.

Likely

High

Ensure to do the material test before put into pfroduction.

The CNC machine might have a break down affecting the delivery.

Likely

High

Check and repair the machine regularly.

Our products are copied by other competitors companies.

Likely

High

Apply for patents to protect for our products.

Material suppliers don't provide materials on time.

Unlikely

Low

The amout of wasting polystrene is very large, and we have our own storage to avoid this situation happens.


Buying behaviour

Recycled

Personal statement

Technology

Affordable price

Purchase decision

Post-purchase behavior

A potential Exist consumer may have a environment protection concept and want to bring it into real life.

The Exist's product has a strong natural aesthetic. It fits consumers who are looking for a strong personal statement to meet their lifestyle quality.

The consumer who is looking for the products made by newest technology and easy to be afftected by new fahion trend.

The young generation may not have too much money to afford an expensive chair. The low costing of Exist's product solves this problem.

The final decision is taken mostly due to the function and the design of the Exist products. A Exist's chair is comfortable and design-driven.

If the consumer is satisfied for the Exist's product, he can choose to change a new chair after a period of using with a lower price.


" This chair doesn't make any unnecessary rubbish to our environment. Every small change in our lives meant a huge deal for the planet. "

—— An environmentalist


" I'have a chair is made by the newest technology. My room is the coolest space in the world. "

—— A just graduated student


"It is a unique chair in my office and it fits my sitting position perfectly. Everyone thinks It costs me a lot. "

— A young designer


"My children need bigger chairs as they growing up. It really helps me save lots of money. "

— A Mother


Key consumers

Y Z GENERATION

Our main target is concentrate on the generation Y and Z who has a personal statement and recycling awareness wants have a fine comfortable chair with the latest CNC technique and an affordable price.


Competition Analysis

Exist’s product position is communicated as being unique, environmental friendly, innovative, recycled, quality, technique, fabrication and natural form. We are aiming to offer second life products. Exist’s competitors are companies which using recycled materials to produce furniture.

Introduction

Pentatonic

Emeco Industries

IKEA

Estblishment

Size

Value to customer

Strength

Weakness

Start-up company Pentatonic is aiming to "radically transform consumption culture" with a range of furniture and products created from food, electrical, plastic and textile waste.

2017

50 employees

A superior aesthetic, durable product, recycle the waste

Cooperate with other companies, affordable price, multiple design directions, good design

The size of company is small, lessknown, not provide purchase service on website

Emeco provides iconic seating and tables fabricated from aluminum and recycled waste products, which include chairs, benches, tables, and an outdoor collection.

1944

200 employees

Sustainable, handmade, innovative design, top design furniture brand, the making of timeless furniture

Long history brand story, big company, has their own factory, close cooperate with famous designer, detailed information on the website

High price

IKEA furniture and home accessories are practical, well designed and affordable. The Swedish furniture company is also not shying away from its role in sustainability and has set a goal to reach 100 percent recycled materials by 2020.

1943

208,000 employees

Easy to buy, convenient assembly, countless design

One of the leading furniture companies worldwide, affordable price,a long lasting relationship with their suppliers, online shopping

Low quality, few countries, general design


- Unique use of material - Low costing - Long lasting product - Unique design - Sustainable production process - Follow the circular economy - Provide trade in service - Simple and easy to use interface - Affordable price - Bespoken service - End-to-end market

- Low production efficiency - High machine maintenance fee - May need large storage spaces, increase the rental fee - Materials rely on third party suppliers

S

W

Strength

Weakness

- Growth in international market - New product line - Cooperation with other company - New consumers group

O

Opportuinities

- Strong competitors in the market - Delay of delivery date - Cooperation with other company may not happen

T

Threats


Advertising & Sales Website We have our own website to build the End-to-End service which consumers can directly buy our products on that. In the future, we will use a simply and easy interface to help consumers bespoke their own chairs on the website.


Advertising & Sales

Social media We maintain social media platform to keep products information updates. That also attracts our main younger consumers groups.


Advertising & Sales Email We provide email subscription service to make a timely connection with our consumers to promote our new products.


Advertising & Sales Packaging Use our appealing design packaging to attract public attention.


Advertising & Sales

Manufacturing Partners We work build connects with professional companies to develop a vision of purchasing chape digital fabrication methods


Advertising & Sales Aesop

Cooperation We would like to cooperate with some famous company to expand our brand awareness. We revolutionise our partners’ supply chains with bespoke solutions that commoditise their waste.

By cooperating with Aesop's store designer to design chairs matching their product's concepts.

Starbucks

We are planing to work with starbucks through producing innovative consumer's chair design.

Nike

Re-design the chairs in Nike's fitting room. To Support Nike spreading their environmental friendly concept to their consumers.


Advertising & Sales

AMAZON

Sales and distribution channels In the future, we will cooperate with other online sales platform to ensure a high engagement in the market.

ETSY


Our market plan split into 4 parts, eyery parts is based on the previous one. We change our market strategy at the different stage in order to achieve our break even point as soon as possible.

Market Plan Timeline

6 months

3 years

4 years

5 years

1

2

3

4 1

2

3

4

Stage 1

Stage 2

Stage 3

Stage 4

On the first stage, our market is foucsing on the young generation. We will foucus on producting 1 or 2 kind of chairs. Using ouar limit CNC machine by low price to occupy the market.

After 6 months, we will arrive the second stage. When we start making some profits, we will get the investment from the government. Using the investment to expand the scale of company with purchasing more machine and putting advertisements. We will produce more tyoes of chair such as using by officers and families.

We need one and a half yeas to get the third stage. We will continure to expand our markert on ideal situation. To carry out a bespoken service and cooperation with some large and famous compines.

At the fifth years, we will achieve the breakeven point. Our products will not limit on the chair. We can produce more furniture, like desks or cabinets.


FINANCE Start-up cost forecast

Unitised cost

Bank loan (One Year Contract) - Bank loan interest (6.5%)

100,000 6,500

TOTAL FUNDING

100,000

COST

Other small parts Warehouse Rent

20,995 4129 200 10,000

Brand Development

2,000

Rent & rates

2,900

Advertising & marketing Software licences

Income

Profit

Series R (RAIN) * 540

41

49.99

8.99

Series W (WIND) * 540

41

49.99

8.99

INCOME

Manufacturing machines (CNC) Coolant: Liquid Tool Starter & Maintenance kit

Expense

Profit & loss forecast

Fixed costs

Machine: Mini Mill-EDU (16” x 12” x 10” 7.6 m/min)

STAGE 01

STAGE 01

FUNDING

750 1,200

Product income (excl. GST) Total income (excl. GST)

EXPENSES Salaries Employee salaries & commissions

42,179

Variable costs Utility connections & bonds (electricity, gas, water) Employee salaries & commissions

250 5,000

Supplies & stationery

150

Repairs & maintenance

200

Adobe Creative Cloud subscription

30,000

General expenses Utility connections & bonds (electricity, gas, water)

TOTAL FIXED COSTS

53,989.2

1,500

Supplies & stationery

900

Repairs & maintenance

900

Adobe Creative Cloud subscription

480

Vehicle rental

600

Bank loan interest

3,252

Miscellaneous

6000

Total general expenses includ. GST

13,632

Total expenses includ. GST

43,932

80

Vehicle rental

100

Bank loan interest

542

Miscellaneous

1000

NET INCOME

Total average monthly costs

7,322

Cash Flow Repayment to Bank Investment in Stage Two

67,878 50,000 17,878

Total amount to Break-event Point (Stage 01)

50,000

Number of months

6

Total monthly costs

43,932

TOTAL START UP COSTS

86,111

10,057.2


Stage 02 cost forecast

Unitised cost

Angel investor funding Government of Australia

10,000

Local Government Victoria (LGV)

10,000

Andrews Labor Government

10,000

Municipal Association of Victoria (MAV)

10,000

Department of Environment, Land, Water and Planning (DELWP)

10,000

Resource Recovery Groups (WRRGs)

10,000

Investment From Stage one

17,878

TOTAL FUNDING

77,878

STAGE 02

STAGE 02

FUNDING

Expense

Income

Profit

Series R (RAIN) * 5430

25.07

49.99

24.92

Series W (WIND) * 5430

25.07

29.99

4.92

Profit & loss forecast INCOME Product income (excl. GST)

434,291.4

Total income (excl. GST)

EXPENSES

COST Fixed costs (additional)

Salaries Employee salaries & commissions

Manufacturing machines (CNC) Machine: Mini Mill-EDU (16” x 12” x 10” 7.6 m/min)

20,995

Coolant

14,248

Other small parts Advertising & marketing TOTAL FIXED COSTS

500 20,500 56,243

Variable costs Utility connections & bonds (electricity, gas, water) Employee salaries & commissions

500 7,500

Supplies & stationery

200

Repairs & maintenance

400

Adobe Creative Cloud subscription

1000

Vehicle rental

100

Bank loan interest (Half Year)

542

Number of months Total Bank loan interests (Half Year)

General expenses Utility connections & bonds (electricity, gas, water) Supplies & stationery Repairs & maintenance

15,000 6,000 12,000

Adobe Creative Cloud subscription

2,400

Vehicle rental

3,000

Miscellaneous

30,000

Bank loan interest (Half Year) Total general expenses includ. GST Total expenses includ. GST

3,250 71,650 296,650

80

Miscellaneous

Total average monthly costs

225,000

9,780 30 3,250

Total monthly costs

296,650

TOTAL COSTS IN STAGE TWO

324,969

NET INCOME

137,641.4

Cash Flow Repayment to Bank Repayment to Government Investment in Stage Three

159,276.4 50,000 30,000 79,276.4

Total amount to Break-event Point (Stage 02)

30,000


Unitised cost

FUNDING Investment From Stage Two TOTAL FUNDING

79,276.4 79,276.4

STAGE 03

STAGE 03

Stage 03 cost forecast

Expense

Income

Profit

Series R (RAIN) *6320

18.11

49.99

31.88

Series W (WIND) * 4320

18.11

24.99

6.88

Series C (.......) * 2320

18.11

69.99

51.88

Profit & loss forecast INCOME

COST Fixed costs (additional)

Product income (excl. GST) Total income (excl. GST)

Manufacturing machines (CNC) Machine: Toolroom Mills - TM-3P *(40” x 20” x 16” 10.2 m/min) Coolant

37,795.5 7124

Milling End

200

Other small parts

200

TOTAL FIXED COSTS

41,757

Variable costs Utility connections & bonds (electricity, gas, water) Employee salaries & commissions

800 12,500

Supplies & stationery

400

Repairs & maintenance

500

Adobe Creative Cloud subscription Miscellaneous Vehicle rental Total average monthly costs Number of months

586,270.4

80 1,500

EXPENSES Salaries Employee salaries & commissions

150,000

General expenses Utility connections & bonds (electricity, gas, water)

9,600

Supplies & stationery

4,800

Repairs & maintenance

6,00

Adobe Creative Cloud subscription

960

Vehicle rental

3,600

Miscellaneous

18,000

Total general expenses includ. GST Total expenses includ. GST

42,960 192,960

300 16,080 12

Total monthly costs

192,960

TOTAL COSTS IN STAGE THREE

234,717

NET INCOME

393,310.4

Cash Flow Repayment to Bank Repayment to Government Investment in Stage Four

430,829.4 0 30,000 400,829.4

Total amount to Break-event Point (Stage 03)

0


Unitised cost

FUNDING Investment From Stage Three TOTAL FUNDING

400,829.4 400,829.4

STAGE 04

STAGE 04

Stage 04 cost forecast

Expense

Income

Profit

Series R (RAIN) *130,200

7

49.99

42.99

Series W (WIND) * 80,200

7

14.99

7.99

Series C (CUSTOMISE) * 50,200

7

69.99

62.99

Series C (CUSTOMISE) * 20,200

7

99.99

92.99

Profit & loss forecast INCOME

COST Fixed costs (additional)

Product income (excl. GST) Total income (excl. GST)

Manufacturing machines (CNC) Machine: Mini Mill-EDU (16” x 12” x 10” ) VF Series (Large) - VF-5/40TR (64” x 32” x 30” 12.7 m/min) Kuka KR150 Robot w/ KRC2 Controller Coolant

20,995 138,595.50 7,999.99 71,240

Milling End

2000

Other small parts

2000

TOTAL FIXED COSTS

242,830.49

EXPENSES Salaries Employee salaries & commissions

Variable costs

Utility connections & bonds (electricity, gas, water) Supplies & stationery

Employee salaries & commissions Supplies & stationery Repairs & maintenance Adobe Creative Cloud subscription Miscellaneous Vehicle rental

Adobe Creative Cloud subscription 2000 25,000 900 1200 80 3,200

Number of months Total monthly costs

TOTAL COSTS IN STAGE FOUR

120,000 5,400 72,000 4,800

Vehicle rental

30,000

Miscellaneous

192,000

Total general expenses includ. GST Total expenses includ. GST

472,800 1,972,800

500 NET INCOME

Total average monthly costs

1,500,000

General expenses

Repairs & maintenance Utility connections & bonds (electricity, gas, water)

13,244,192

32,880 60 1,972,800

2,215,630.49

Cash Flow Repayment to Bank Repayment to Government Investment in Stage Five Total amount to Break-event Point

11,271,392 11,429,388.9 0 0 11,429,388.9 0


STAGE 01 - First 6 month

Revenue

$1,200K

$1,000K

$800K

$600K

$400K

$200K 53,989.2 $0K

$100K

$200K

$300K

$400K

0

6

12 32,122

86,111

18

24

30

36

42

48

54

60

66

72

78

84

Profit

Expense


STAGE 02 - Frst 30 month

Revenue

$1,200K

$1,000K

$800K

$600K 434,297.4 $400K

$200K 53,989.2 $0K

$100K

0

6

12 32,122

18

24

30 30,000

86,111

$200K

$300K

$400K

324,969

36

42

48

54

60

66

72

78

84

Profit

Expense


STAGE 03 - The 4th YEAR

Revenue

$1,200K

$1,000K

$800K

$600K

586,270.4 434,297.4 400,829.4

$400K

$200K 53,989.2 $0K

$100K

0

0.0 6

12 32,122

18

24

30

36

42

30,000

86,111 234,717

$200K

$300K

48

324,969

$400K

Break-even Point 33th Month at Stage 2

54

60

66

72

78

84

Profit

Expense


STAGE 04 - The VISION of 5 years Upcoming

Revenue

Profit

13,244,192

$1,200K 11,429,388.9 $1,000K

$800K

$600K

586,270.4 434,297.4 400,829.4

$400K

$200K 53,989.2 $0K

$100K

0

0.0 6

12 32,122

18

24

30

36

42

54

60

66

72

78

84

30,000

86,111 234,717

$200K

$300K

48

324,969

$400K

Break-even Point 33th Month at Stage 2

2,215,630.49

Expense


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