INTERNATIONAL UNIVERSITY – VIETNAM NATIONAL UNIVERSITY SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT PROJECT MANAGEMENT OPENING A FLAT PACK FURNITURE RETAIL STORE Instructor: Dr.. Ther
INTRODUCTION
Background
Each year, in Ho Chi Minh city, from July to September, the number of students entering university, who come from other provinces and cities, is greater and greater Hence, leading to a sudden increase in demand for renting accommodation or dormitory When this demand increases, it brings about a considerable need for household appliances Especially for students from either low-income or well-off families, it is difficult and sometimes inconvenient to buy expensive and re-assembled items for their room since they perhaps move to another place after one or two years Therefore, they are looking for an inexpensive way to shop sustainably, and the low-cost, flat-pack household furniture store may be an optimal solution for saving students’ pockets The household appliances store is where we sell affordable and flat-pack furniture, ready to be assembled by the consumer
Objective
The project of opening the store is planned to have the cycle life about 3 months; Particularly, from September 2022 to March 2023
Our store is a home products retailer that sells flat-pack furniture, accessories, and items in their retail stores in Thu Duc City The company, which pioneered flat-pack design furniture at affordable prices
After noticing the benefits and the necessity of the household appliances store, we came to some conclusions:
• College has limited expenses Therefore, many people will use low-priced goods rather than buying high end ones
• In the case of using items for a short time, buying flat-pack goods from our household appliances store is the most appropriate method
• Flat packs have revolutionized furniture-making and home furnishing history Most products come in flat packs that customers can easily transport everywhere
In general, flat packs are some of the reasons behind the store's growth Since the use of this idea, prices of furniture from the range have reached an all-time low in the industry This also allowed more stocks to be stored in every store Ease of transport is just another effect, conveniently moving products not only by the consumer but in bulk in between stores Lastly, flatpacks encouraged designers to take the challenge of creating functional products that are also clean and minimalist
Figure 2: Comparison between RTA and fully assembled furniture
PROJECT TIMELINE
Figure 3: Project timeline Gantt chart
A Opportunities G Sign rent contract M Suppliers’ selection
B SWOT H Store repaired N Order from supplier
C Market segmentation I Buying equipment O Business Registration
D Market competitors J Store setup, design P Hire Employees
E Select potential locations K Select the product Q Training employees
F Negotiation L Set criteria for product R Compute total investment
SCOPE OF PROJECT
Product details
- Top panel, bottom panel, side panel, shelf, plinth, and door:
- Fiberboard-based back panel with printed acrylic paint
- Dao Trung Hung Manufacturing and Trading Company Limited
Fibreboard, Acrylic paint, Plastic edging, Honeycomb structure paper filling (min
70% recycled), Particleboard, Clear acrylic lacquer, Fibreboard
- Leg: Steel, Epoxy/polyester powder coating, Polypropylene plastic
- Frame: Steel, Epoxy/polyester powder coating
- Wooden part: Layer- glued wood veneer
- Ticking/ Mattress inner cover: 100 % polyester
28 kg/cu.m., Polyurethane memory foam 50 kg/cu.m
-Machine wash, max 60°C, normal process
-Turn the cover inside out and zip up before washing
- Vina Mattress Manufacturing and Trading Company Limited
Figure 4: Flat pack desk, cabinet, and chair
Inclusion
The store should have one main selling zone, cashier, storage place,
Three-month warranty policy included
We offer free returns within 30 days of purchase You can return your product for store credit, a different product, or a refund to the original payment method
Please note the following exceptions to our return and refund policy:
• Discounted items are final and cannot be returned or exchanged
• Returned items must have tags still on and be returned in original product packaging
• Returned items must have no visible signs of wear or use
To initiate a return, please complete the following steps:
• Reply to your order confirmation email to request which products you would like to return
• Print the prepaid return shipping label that you will receive by email
• Send all items back to us using the label provided.
Exclude
• A separate warehouse and discount zone
Method of statement
Project name: Interior Equipment Store
Key item: Metal cabinet, Chair, Computer Desk, Mattress
Sequence of operation Equipment or resource required
Licenses, qualifications, or work permits
Import goods from selected suppliers Truck, Warehouse,
Quality Control Labor, Scanning machine C/O, Checklist
Control Sales Process Marketing team Schedule
Report Sale Quantity Product team Report Template
Check the revenue Finance Accounting team Report Template
Finish payment, loan Finance Accounting team Debenture, Debit Note
Freight and duty basis
Consolidation document 33/VBHN-BTC in 2014 consolidating the circular guiding the implementation of Decree 75/2002/ND-CP regulating the license tax rate issued by the Ministry of Finance
Circular 92/2015/TT-BTC guiding the implementation of value-added tax and personal income tax for resident individuals conducting business activities; guiding the implementation of a number of amendments and supplements to personal income tax specified in the Law amending and supplementing a number of articles of the Law on Taxation 71/2014/QH13 and Decree 12/2015/ND- The CP details the implementation of the Law amending and supplementing a number of articles of the Law on Taxation and amending and supplementing a number of articles of the Tax Decrees issued by the Minister of Finance.
WORKS BREAKDOWN STRUCTURE
LOCATION ANALYSIS
First, location is typically one of the most influential considerations in a customer’s store- choice decision Second, location decisions have strategic importance because they can be used to develop a sustainable competitive advantage If a retailer has the best location, that is, the location that is most attractive to its customers, competitors can’t easily copy this advantage As mentioned, this new store will be located in the Thu Duc district, which is close to VNU-HCM students
The site of the new shop is influenced by several considerations, including:
• Approach a high population of students and labors
• Cost of operating store: ≤ 10 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 𝑉𝑁𝐷 per month
• Ease to access, park, and Opportunity for front street
• Number and size of competitors
• Size and shape of store to contain equipment
- Location: No 5 Street, Ward Linh Xuan, Thu Duc district, HCM
- https://chothuenha.me/ ho-chi-minh/thu- duc/200136563.html
- Location: 232/4A Linh Dong Street, Ward Linh Dong, Thu Duc district, HCM
- https://chothuenha.me/ ho-chi-minh/thu- duc/200136782.html
- Location: Alley 14, Le Van Tri, Ward Linh Trung, Thu Duc district, HCM
- https://sosanhnha.com/h o-thue-nha-nguyen-can- moi-moi-100-hem-xe- tai-claP0WRB0
- Near the three-way crossroads
- A large amount of passing traffic
- Close to dormitory (4,7 km) and labor enterprise
- Bus routes passing through convenient for customers' travel central area (opposite Thu Duc hospital)
- 4,1 km far from VNU dormitory
- 8,6 km far from VNU dormitory
- 8,6 km far from VNU dormitory
- Potential for expansion or changes (host has the second apartment next to)
- Easy reach customers with advertisement and PR at front street
- Large area for both horizontal and vertical
- The cost of the site is the highest
- Increase cost for repair and decoration
Based on the above table (apply the SWOT method), option 1 (Ward Linh Xuan, Thu Duc) is the most suitable for approaching customers The store has prime in the north of Thu Duc District because of its nearest to the VNU dormitory, bringing the most convenient shopping and possible experiences Moreover, with the largest spacious total area (2 floors, parking) and potential for expansion, Option 1 will be a perfect choice
As for renting space, although it is a place with the highest price, Linh Xuan has quite reasonable rental prices According to Chothuenha.com.vn, Option 1 has a rental price of
9 million/month, and we will open this store for 3-6 months Therefore, the estimated price when renting Option 1 in the contract usually ranges between 27,000,000 VND and 54,000,000 VND, respectively.
MARKET ANALYSIS
SWOT (Strengths, Weaknesses, Opportunities, Threats)
Flat pack is now a trendy model spreading all over the world Moreover, we can find numerous global suppliers The flat-pack furniture is mainly focus on “low price with meaning”
More so, flat pack furniture is transportable, simple to assemble, and take up little room Moreover, this cutting-edge innovation is currently being integrated into the development of nearly every product category imaginable Not only do these layouts score well for space efficiency, but they also do away with the need for bulkier, less efficient layouts They are not only practical and ergonomically sound, but also have a sleek, uncluttered design that allows them to fit in with the decor of virtually any home Moving using flat-packed furniture is much easier There's no need to physically move your heavy furniture from one place to another when you can just have it delivered to your new residence
Not correctly assembled: This may be a real problem! After you've put everything together, you could notice that drawers don't close correctly, or cabinet doors are crooked If this occurs, the only option is to restart from the beginning
Low endurance: Another problem of flat-pack furniture is that it is prone to damage owing to its lack of solidity Knock-down furniture is composed of man-made MDF and will not survive as long as solid furniture, especially if it has been dismantled and reassembled multiple times
Design is overly simple: Even though there are several types and colors available, some believe that every flat-pack furniture appears the same since the design has been simplified, limiting flair and uniqueness despite its current appearance It may be highly frustrating for some people to visit a friend and discover that their home has same or almost identical furnishings
The expected growth of flat pack has most likely got something to do with the increased effectiveness of the format Due to the fact that the most common criticism leveled against ready-to-assemble (RTA) furniture has traditionally been results in long hours of bewilderment and at least a couple of arguments between family members, many manufacturers are now producing styles that require neither tools nor much physical exertion at all.- Movement into other countries that do not have this type of retailer
As a result, flat-pack furniture has become increasingly popular On the other hand, it has put a significant strain on the environment, as is the case with most things that are simple and straightforward to use Furniture trash production in 2018 was 12.1 million tons, up from 10.5 million tons in 2005 and 567 percent greater than in 1960 Unfortunately, only approximately 0.3% of this garbage is diverted from landfills and turned into something useful.
Market segment
Students / young people/ medium-low income who are in the National University or neighborhood area
Students at university who are staying in a rent room and have demand for the minimal furniture with low prices
Our store focus on advertising about the ergonomics of products “Good price, good health for the young life” to attract the customers who minimize their purchase as minimalism their lifestyle
We mainly focusing more about what customer need more than what they want For instance, the customers who want to buy at a suitable price - size - are convenient in assembly.
Market competitor analysis
Ecommerce platform such as the sellers in Shoppe, Lazada, Tiki has a variety of goods and the competitor prices Besides that, they have more opportunities to expand market Therefore, the customers will be easy to compare and covers many products, faster payment process
Furthermore, this is a trendy market, many sellers are gathering in social network groups which lead to dense appearances which is the cause of high engagement with consumer The seller also easily receive feedback and asking questions build the quality for the product of people in the local area
Figure 9: Flat pack furniture on E-commerce platform
Grocery store is a tough competitor in offline market They usually have good visibility which mean they have a high frequency of appearance in Thu Duc city
The traditional market is another tough competitor for us in this area They always have goods in stock and response the right time pick up goods in local instead of waiting for delivery But more importantly, their price is extraordinary competitive
COST ANALYSIS
A cost analysis was developed in order to examine the initial investments as well as the annual operating expenses of a firm that sells home appliances The goal of the study was to determine how profitable the business would be The expenditures were split down by work breakdown structure into the following categories: construction, utilities and system, registration and licensing, and foundation This was done to make the understanding of the expenses connected with the three alternative choices simpler When a number of different considerations are factored in, the third plan indicates that it may be desirable to go with the alternative that has the least expensive feasible outcome
Figure 11: First alternative for cost structure
Fee for publication of business registration contents 100,000 1 100,000
SKUs management system Customers data system Fire alarm system 70,000 110 m2 7,700,000
Work office Delivery zone Stockroom Toilet Breakroom Customer service desk 1,700,000 1 1,700,000 Product display zone/ shelves 5,000,000 2 10,000,000
Ultilities and system total Registration & License total
Figure 12: Second alternative for cost structure
Index Price Unit /Size Total (Unit:VND)
Fee for publication of business registration contents
SKUs management system Customers data system
Delivery zone Stockroom Toilet Breakroom
Ultilities and system total Registration & License total
Figure 13: Third alternative for cost structure
Index Price Unit /Size Total
Fee for publication of business registration contents
SKUs management system Customers data system
Delivery zone Stockroom Toilet Breakroom
Ultilities and system total Registration & License total
HUMAN RESOURCE PLANNING
Building the workplace policy
The HR team will make the job descriptions for each process, each the store Besides that, they also need to the completion of work of each member carefully.
Recruitment
We also develop criteria list and evaluation candidates through interviews.
Training
• Determine the type of training plan
• To plan the training process (follow the 4 steps: Requiring, Planning, Organizational development, and effectiveness evaluation)
• Identifying training needs and training needs categorized according to subject (based on the method 5W: Who - What - Why - Where - When)
Salary and tax
• Construction of the salary scale and modified it
• The provisions of the Personal Income Tax
Health insurance, social security, unemployment insurance, regulations on wages,
Social insurance, medical insurance, and unemployment insurance are the three categories of mandated social security:
• Social insurance covers employee benefits including sick leave, maternity leave, allowances for work-related accidents and occupational diseases, pension allowance, and mortality allowance
• Health insurance entitles employees to medical examination and inpatient and outpatient treatments at authorized medical establishments
• Unemployment insurance, which takes the place of severance pay, is paid out to employees in quantities depending on the period of time for which they and their previous employers contributed The monthly unemployment allowance is equal to
60 percent of the persons’ average salary of the last six months of employment
Both the company and the employee are obligated to provide at least the minimum statutory contribution Employers, both local and international, doing business in Vietnam must pay into the Vietnamese Social Security System on behalf of their employees who are working under contracts with a specified duration of employment greater than three months or for an indeterminate period.
Labor law
• Solving and alleviating conflicts and labor argument
• Collecting and noticing labor agreement
• Legislation to resolve labor disputes, strikes, labor discipline, the regime leave, severance
• Scheduling: Planning and control of work
• Organizing events: outdoor activities, end year party, set up day
RISK ASSESSMENT
Our team assigns each risk to one of these three buckets in order to facilitate more effective risk management
• The first kind of risk is one that has to do with the passage of time: we can run into an unanticipated problem that results in a delay and, as a consequence, a longer period of time needed to finish everything
• The second type is cost risks: The chance that an unanticipated purchase may force us to spend more money than we had planned to spend on the project overall In addition, the utilization of this project can be hampered by other projects being undertaken
• The third type is operational risk Particularly, the external supply risk which are the threats that come with using third-party vendors are as follows: It is possible that the provider will increase the price, reduce the supply source, or even cut the supply source Otherwise, during the process of quality control, there is a possibility that there will be missing pieces because it is flat packaged This is due to the fact that there is a likelihood that there will be missing parts Because of this, the overall quality of the product may be compromised Besides, there is a possibility that the registration of the firm will be delayed, and there is also a risk that the certificate of origin would be invalid There is a potential that the prices provided by the regular market, or the internet shop will be more competitive than those provided by our business In addition to this, many of the stores in the Village of Universities that focus on selling antique furniture already have a regular stream of consumers coming through their doors Lastly, risk to the premises and to the safety: Because Thu Duc city is notorious for having a high rate of robberies, the store needs to make certain that it appropriately invests in security technology in order to protect its customers and their property.
CONCLUSION
According to the findings of our study and analysis, the project entitled "Open a flat pack household furniture in Thu Duc City" has demonstrated that it is capable of bringing a great deal of success and financial gain to the investors It is anticipated that the project will generate a profit of at least 50 million VND in the initial year, and it is anticipated that this profit will continue to grow during the next five years Even if there are a few minor risks that have been assessed, the project is, in general, a smart investment that will deliver a significant potential to link the firm and the client, to construct our own brand identity, and to achieve the ultimate aim of "profit."