* MANUFACT.TXT

                             MANUFACTURING

    * Description of the proposed organizational location, make vs. buy,
    facilities, and logistics.
    * Emphasis must be on the productive use of capital, labor, and
    material resources, manufacturing processes, vendor relations,
    experience and distribution requirements.  Statements are needed
    which indicate initial volume and expansion requirements as well as
    product/process complexity, uniqueness, and costs.

RESEARCH AND DEVELOPMENT

Much of the time and effort at (company) during the past XXX year period
has been spent on research and XXX product/process development.

XXX products listed in the Products section have been tested for their
ability to be manufactured and are XXX (currently ready, will be ready
by XXX) to market.

Based on our pilot production experience with XXX (product), the
following tasks/operations were tested to validate feasibility of
manufacturing.

    Task/ Operation (Sample)                   % of Time
    Product technology and methods                20%
    Key parts and vendors                         15%
    Processing sequence and repeatability         20%
    Capital equipment and vendors                 15%
    Specifications and control measures           20%
    Production lead-time and volume standards     10%
                                                 ----
                                     Total       100%

    * See also the 9-Pack of Worksheets described on page 93.
    * See also Manufacturing=Equalizer(tm) described on page 94.

Pilot testing indicates standard unit production will be XXX hours per
XXX units.  Processes have been validated to ensure optimally
cost-effective, quality product output.

Final tests were successful with regard to XXX (all, most, etc.)
evaluation criteria.  Results are available if need-to-know is indicated
(proprietary information).  Testing was conducted during the period XXX
through XXX using XXX facilities.

Volume testing will be accomplished XXX

    * How this will be accomplished and when.
    * Use milestone chart to indicate ramp-up tasks, resources, and
    milestones.
    * Specify equipment facilities, labor, etc. required in terms of
    quantity, number, and cost.

The following product/process requires additional pilot testing prior to
volume testing: XXX (list or otherwise indicate)

These products are expected to be ready for market over the following
XXX period: XXX, XXX, and XXX (when other products are generating
sufficient cash flow to support additional product development)

PRODUCTION AND MANUFACTURING

The process used to produce (product) begins with XXX (full description)

Key factors in the manufacturing process are XXX

Raw/prefabricated materials, components, sub-assemblies, required for
production are XXX

    * List and describe equipment, material, and labor requirements
    * Are prices negotiable?
    * Are they readily available?
    * Alternate sources/materials?
    * Quality/Technical specifications.
    * Inventory requirements.
    * Hazardous materials?

We take advantage of economies of scale by XXX

    * Quantity discounts, package deals.
    * Indicate resource capacity and expected utilization over time, any
    installation and maintenance costs, and vendor availability if
    applicable.
    * List and describe the business in terms of production rates,
    capacity constraints, or required quality assurance and safety
    programs

In comparison to other companies, (Company)'s products are reproduced
quickly and economically by XXX (how process/techniques accomplish this)

Comparative analysis shows these figures to be XXX

    * higher, lower, or in line with competitors?

This is due to the fact that XXX

    * More efficiently produced?  (due to land costs, energy savings,
    leaner management)
    * Is your product of better quality?
    * Is your quality control program more thorough?
    * Parts made in-house or subcontracted?
    * Tooling required for production and estimated costs.
    * Quality Control (INVESTORS will want to know that warranty costs
    will be minimal)

INTEGRATION (MAKE VS. BUY)

At (company) we will XXX (fabricate, assemble, subcontract, etc.) the
following XXX (key parts, components, subassemblies, etc.):

    * List parts, etc. with vendors, lead-time, costs, etc.

PEOPLE

Line employees include XXX
Staff employees include XXX

    * List required number of people and their skills
    * How and when will they be trained?
    * Who will hire and manage them?
    * Discuss procedures and measures of effectiveness and productivity.

To protect proprietary interests and information the following policies
will be enforced (work with attorney to develop this section).

See also EmployeeHandbookBuilder(tm) described on page 96.

FACILITIES

The manufacturing facility will be located in XXX.

This location will provide needed space for initial production and
expansion to meet projected demand over the next XXX (periods).

The acquisition cost for land and improvements is $XXX which will be
allocated in XXX increments.

(Company) already owns/has access to/requires XXX

    * Capital equipment needed and its estimated cost.
    * List equipment or facilities and the space and location required.

Selection of the site includes the following considerations:

    * Room and cost for expansion
    * Land and construction costs
    * Transportation cost and route access -- common carrier, company
    owned, pooling agreement with XXX freight forwarders
    * Risks and insurance
    * Packaging and material costs and availability (suppliers?)
    * Labor pool availability, skills, costs
    * Local ordinances, licensing, and permit requirements
    * Government assistance (roads, training, exemptions, etc.)
    * Government restrictions and requirements (OSHA, NLRB, etc.)
    * Community attitudes toward business and manufacturing
    * Continued operating costs (utilities, communications, etc.)

An efficient production process hinges on proper layout of XXX

    * Layout of proposed plant and manufacturing flow chart

Equipment will be deployed as indicated below.

    * List equipment, number, capacity, space requirements cost, etc.
    * Provide rough illustrations of equipment layout and process flow
    diagrams

This equipment is used in the processes as described and configured
above to ensure yield, lead-time, and costs are sufficient to provide
projected gross margin.

Additional questions:

    * Where will distribution centers be located?
    * What packaging and handling equipment will be used and who will
    supply it?
    * What special equipment, if any, will be needed? -- i.e. trucks,
    tractors, etc.
    * Will warehouses be used?  If so, where and what size?  What
    inventory levels will be carried?  Equipment?  Labor?  Competition?

PACKAGING & TRANSPORTATION

The last steps in the manufacturing process are important in
establishing the desired image to the consumer.

Of the standard packaging treatments available, the best choice for our
needs is XXX (bubble pack, shrink wrap, poly bags)

And, since this is a readily available process, considerable savings can
be made.

XXX (type of packaging) is more widely used, but in order to convey a
unique selling image/position we are considering using XXX (another
type)


Our competitors use XXX (type of packaging ) as well, but by using
distinctive graphics as discussed in Advertising & Promotion, our unique
identity will be maintained.

Transportation will be XXX

    * How does your product ultimately reach your customer?
    * How many steps are involved?
    * Which is the "weakest link", and how will you address that?
    * If using your own fleets, will they receive same graphics quality
    as the product itself?
    * Is this the same method your competitors use?

Comparative costs show that XXX

    * How do your packaging and transportation costs look in comparison
    to the competition?
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