En Cima Technical Study

8/14/2019 En Cima Technical Study

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En Cima, Incorporated

Table of Contents

I. Introduction ……………………………………………………………

A. Executive Summary ……………………………………………………

II. Production Process ……………………………………………………

A. Product Design ……………………………………………………

1. Description

……………………………………………………

2. Sizing

……………………………………………………………3. Sample Designs

…………………………………………………....

B. Raw Materials ……………………………………………………

1. Suppliers

……………………………………………………………

C. Production Arrangements ……………………………………………

1. Cost-Benefit Analysis

……………………………………………

• In-house Manufacturing ……………………………………

• Subcontracting ……………………………………………

2. Subcontractor ……………………………………………………

• Terms of Contract ……………………………………………

3. Product Flow ……………………………………………………

• Production Scheduling ……………………………………

• Costing ……………………………………………………

III. Store Operations ……………………………………………………………

A. Organizational Structure ……………………………………………

1. Functions

……………………………………………………………

1

Technical feasibility Study




2. Qualifications ……………………………………………………

3. Recruitment and Training

……………………………………………

4. Compensation and Benefits ……………………………………

B. Daily Operations ……………………………………………………

1. Staff Scheduling ……………………………………………………

2. Uniform and Dress Code ……………………………………………

C. Inventory Management …………………………………………....D. Cash Management ……………………………………………………

E. Sales Management ……………………………………………………

IV. Structural Requirements ……………………………………………………

A. Store Layout ……………………………………………………………

B. Office / Warehouse Layout ……………………………………………

V. Business Requirements ……………………………………………………

A. Application for Business Permit ……………………………………

B. Lease Application ……………………………………………………

VI. Endnotes ……………………………………………………………………

VII. Appendix ……………………………………………………………………

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Introduction

After being able to analyze and evaluate the different factors that evolve around

thee business proposal, and after identifying the targeted market through which the study

shall focus on, En Cima, Incorporated would now try to identify the technical aspects that

would enable the business to fully substantiate its form and structure.

En Cima proposed the establishment of Lilliput, a clothing boutique that would

cater to the petite size of the typical Filipina woman. As for its positioning statement

Lilliput shall be known as a specialty shop that offers chic, sleek, timeless, and naturallyfashionable apparels designed to complement petite bodies. This principle would then

become the central focus of the entire technical processes spanning from the

conceptualization of designs, selection of fabrics and raw materials, down to visualization of

structural designs and perspectives of the store that would translate the essence of Lilliput ’s

target market.

In the initial phase of the business plan, Lilliput shall open up its first boutique at

Shoppesville Arcade in Greenhills. It aims to supply approximately 1.11% of the projected

demand for its products by being able to generate approximately 20 designs with 120 units

each for tops (blouses, shirts, and dresses), and with 10 styles with 100 units each for

bottoms (pants and skirts). Over the years, Lilliput would strive to aim for the bigger

share in the big “pie” as the business gradually creates its niche in the market. After the

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third year, the company will open up branches in Robinson’s Galleria, Glorietta

Center, and The SM Mall of Asia.

Considering all the plans and projections for the business, and after evaluating

necessary procedural requirements and complying with the legal practices needed in

setting up the store, En Cima Incorporated deems that Lilliput is thereby technically

feasible to operate in the market.

Executive Summary

En Cima, Inc. attempts to determine the technical feasibility of the Lilliput boutique shop by analyzing the crucial processes and costs in the entire production flow,

human resources management, the store operations as well as its construction, and

complying with the legal requirements before the business can operate.

First and foremost, the group chose to apply a simple and realistic approach in

considering the alternatives of whether to produce Lilliput products in-house or to

subcontract. By means of performing a cost-benefit analysis between the two options, the

group finally concluded that subcontracting is the most practical step that a starter can do

given especially the high overhead costs of acquiring and maintaining the equipment,

plant site, and labor required in executing the whole production process.

On the other hand, En Cima will take care of the purchasing of materials and

setting the specifications of the Lilliput clothing line. The corporation will employ

professionals who can best determine how the Lilliput products will be differentiated

from other brands in terms of enhancing the physique and stature of the customers. This

can be best done by carefully studying what fabrics, designs, and colors are suited to the

target market that would not only provide the right fit and style, but also further enhance

and elongate the built of petite women. With the help of professional guidance, the group

also formulated an adjusted size chart containing dimensions attuned to the varied body

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sizes of petite women whose height fall under the 4’10 to 5’3 range. This has

been done since the Lilliput size structure will definitely differ from the usual sizing

schemes that most apparel shops utilize.

Accordingly, the store structure has also been designed to reflect what Lilliput

experience would be all about. Presenting a touch of difference that would set the

boutique apart, the group planned to maximize a leased space in a less expensive but

well-visited Greenhills mall. The group then adopted an entirely different and hip

interior design which aims to present a “refined look for the masses”. Also, the space

itself would also cater to the needs and comfort of the petite shoppers, their companions,

and employees as well. The construction and renovation required to come up with thewhole idea would approximately cost the group P 573,562.00. The estimated total

monthly fixed cost for the initial location will amount to P55,000.00.

Certain legal requirements shall be followed before having the business

operations started. Among these requirements are barangay clearance, community tax

clearance, sanitary permit, and other clearances necessary before the issuance of the

official mayor’s permit.

Moreover, the group focused as well to the organizational structure to ensure the

smooth operations of the business. Department managers would be recruited, who will

directly report to the General Manager according to the responsibilities assigned to them.

It is fair enough that En Cima, Inc. will provide for the qualifications of the candidates

for the said various positions to guarantee a dynamic group of people working their best

for the Lilliput brand. Basic regulations for the inventory, cash, and sales management of

the store were also made available for the proper implementation of individual duties.

Lastly, rough estimations of all the necessary costs were taken into account to

determine the initial investment and additional funds needed to run the Lilliput boutique

shop.

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Production Process

Product Design

In its line of clothing, Lilliput will offer the basics with a splash of the latest

fashion trends that petite women would surely love. Lilliput aims to provide fashionable

and practical clothes that fit the petite figure perfectly. Lilliput’s line of clothing is

designed to suit and enhance the height and the physical attributes of the typical Pinay ,

providing the right fit, the right form and the right proportions.

The theme for Lilliput ’s line of clothing is dynamic as it constantly keeps up with

the latest fashion trends. However, projected fashion styles that would be followed are

noted to tailor to flattering the petite figure. The currently trendy “lady-like” theme is

incorporated in the designs of Lilliput’s clothing line as this trend ultimately flatters the

lithe form of petite women. The ethic-bohemian style and volume (layered) look are

fashion trends featured in the designs as such draws attention upwards, thus making the

petite figure look taller and slimmer.

In designing for the product, Lilliput ’s in-house designers have put down basic

fashion tips and advices that should be noted for petite women. Although petite women

can have the same look as with regular women through clothes that are scaled down to

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their size, Lilliput offers a line of clothing that would elongate the petite figure’s

silhouette, giving a “taller” and fuller look to the petite figure. Each design of the

product line varies in colors and in materials. Fabrics and patterns are chosen to suit

the smaller frame of the petite women.

Colors

Lilliput ’s apparels are characterized by cleaner, discreet, and vibrant colors andshades. Monochromatic color scheme is advised by fashionistas to elongate the petite

figure but Lilliput offers a dash of fun to the otherwise boring color scheme. Vibrant

colors are matched in low contrast so as to provide a hint of vibrancy while still flattering

the petite figure. Lilliput also provides the basic colors that women of all body types

prefer in their wardrobes. Basic black and whites will still be present to go well corporate

functions and sexy outfits for evening wear. However, to tailor to the petite figure,

Lilliput makes use of pattern designs that flatter the figure, such as V-lines and vertical

lines.

Fabrics

Fabrics that are soft and flowing would be used in making the Lilliput ’s line of

clothing so as to elongate the silhouette, while keeping it simple and feminine. Large

prints are avoided since such styles tend to make the petite figure look bulky .1

Heavyweight fabrics are only used for selected bottoms. Light fabrics with minimal

pattern are chosen for the tops. 2

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For the tops, the materials often used in high quality-oriented similar

boutiques come in knitted or weaved cotton, rayon, and wool. A little bit of lace, silk

and chiffon materials will be added to other items for a more sultry and sexier look.

For the bottoms, a significant amount of denim will be utilized. Cotton and other

similar lightweight fabrics for tops will be used as well in more formal slacks, comfort

khakis and skirts.

Lilliput’s Product Line

Tops

For the tops during the introduction phase of the business operations, Lilliput ’s

line of Sleek and Chic clothing aims to elongate the petite-sized women’s silhouette.

Horizontal patterns are avoided since such make petite-sized women appear wider and

shorter than they are. Instead, vertical lines are used such as pleats, v-necklines, open

jackets and stacks so that the petite figure would not look “cut up.” Similar colors are

also chosen so as to elongate their silhouette. 3 In designing for collared tops, the collars

are detailed with interesting prints so as to attract attention towards the face. This style

makes the petite woman appear taller.

Boleros or short jackets are provided also in Lilliput ’s line since these would

flatter the petite figure .4

Bottoms

For the bottoms during the introduction phase of the product line, Lilliput aims to

provide the petite-sized women with fashionably timeless denim jeans that they would

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find practical and stylish at the same time. Stretch denims are offered in this line

since they work best for petite-sized women. Stretch denims hug the figure whereas

just regular denims can be too baggy or too long for the petite figure. 5

Lilliput ’s line of skirts is designed to lengthen the look of the petite women as

well. A bias cut skirt is chosen as this also works best for the petite figure. Such a pattern

would not overwhelm the women with too much fabric. A bias cut skirt flares at the

bottom, keeping the hem fluid and flowing. Thus, this type of style accentuates the hips,

making the petite-sized figure appear sexier. 6

Other Wears

Expansion of product lines is expected during the growth and maturity stages of

the businesses to provide more excellent shopping experience to the target market.

During the growth stage of the business operations, full body casual and semi-formal

dresses would be introduced in the product line. Also, a new line of intimate wear will be

offered as well as basic footwear. Full body casual and semi-formal dresses are designed

in low contrasting and monochromatic colors to flatter the petite figure. Underwear and

nightgowns are also mass customized to fit the smaller torso of petite women. Although

outsourced, basic footwear such as slippers and sandals will range from size 5 to size 8,

which are average foot sizes of petite Pinay women.

More footwear items such as stilettos, pumps, and sneakers would be introduced

in the maturity phase of the business operations. These would also range from size 5 to

size 8, also outsourced. Other items to be introduced at this stage are signature perfume

and colognes, hair and body accessories, and basic cosmetic line.

For Lilliput’s line of accessories, slim narrow belts are offered. 7 Wide belts are

avoided as these emphasize the short torso of petite-sized figures. Also offered in this line

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are necklaces or large-scale earrings that would attract attention towards the

face, making the petite women look taller. Large-scale earrings would also frame the

face .8

Sizing

Lilliput ’s clothing line will offer sizes proportionate to the Pinay petite. These

sizes are averaged accordingly in proportion to the height range of 4 feet, 10 inches to 5

feet, 3 inches. The sizing chart is created based on professional dressmakers’ opinions on

averaging the sizes of the Pinay petites. The sizing chart is as follows:

Lilliput Size Chart 9

Measurement (in) Small Medium LargeShoulder 14-15 15-16 16-17Bust 29-31 32-34 35-37Waist 25-26 28-29 30-32Hip I 33 36 38

Hip II 34-35 38 40Figure 15 16 17Shirt Length 20-21 23-24 25Armhole 15 LS 16-17 LS 18 LSSleeve Length 6 20 7 22 7.5 23Sleeve Width 11.5 12 13Bust Distance 6.5 7 7.5Tiro 9 10-10.5 11Length 36-37 38-39 40-41

Sample Designs

Lilliput ’s vision is to provide the petite Pinay fashionistas with practical yet

fashionable styles that would flatter their figure, elongate their silhouette and give a

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slimming and taller look that regular merchandise from leading retailers cannot

offer. The sample designs exemplify this vision of Lilliput .10

:: Sample Design 1 . A detailed long-sleeved brown blouse with a V-lined pleated

neckline is paired with a light pink knee-length pencil skirt. The low contrasting colors

give a taller look to the petite figure. The V-lined pleated neckline draws attention to the

face as the pencil skirt gives a slimming look to the figure. The silhouette of the petite

figure is elongated as attention is drawn upwards.

:: Sample Design 2 . The outfit typifies a layered look, with a short, cropped jacket worn

over a plain top to accentuate the curves of the petite figure. The pink jacket with puffedsleeves to trim the arms draws attention to the curves of the waist to the hipline. With

matching low riding black pants to emphasize the hips, a slimming look is fully

established.

:: Sample Design 3 . A colorfully printed flounce skirt is paired with a black short-

sleeved shirt to provide color relief. The outfit is a perfect casual wear with a touch of

vibrancy and femininity. The detailed skirt is cut above the knee with a flowing hemline,

making the legs look slimmer and longer.

:: Sample Design 4 . A brown body dress with flowing hemline topped with a pink bolero

with puffed sleeves add vibrancy to the informal look as well as emphasizing the curves

of the petite figure. The cut of the dress accentuates the legs as well as elongates the

silhouette of the figure. The asymmetric belt gives definition to the waist, thus giving a

slimming look to the figure.

:: Sample Design 5 . The outfit is comprised of a white round-necked top paired with a

printed black skirt, perfect for the casual dressed-up look. The petite figure is accentuated

through the belt that is in contrast with the vertical look of the skirt, emphasizing the

curves of the petite figure.

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:: Sample Design 6 . Printed top with detailed neckline and sleeves paired with a pair

of knee-length capri pants within the color scheme to provide an almost

monochromatic look to elongate the petite figure. The detailed top draws the attention

upwards, giving more emphasis to the face, rather than to the height. The cut of the capri

pants also accentuates the legs, giving a taller look to the petite frame.

:: Sample Design 7 . The outfit gives a layered look with a touch of femininity in vibrant

colors. The green short-length jacket in contrast with the pink blouse worn underneath

shows a splash of colors while adding curves to the petite figure. The printed flounce

skirt with the detailed belt also gives emphasis to the curves of the figure.

:: Sample Design 8 . The outfit gives an ultrafemine look through the sheer blouse under

which a plain top is worn to accentuate the details such as the black bow through the

waistline and the interesting details on the neckline and sleeves. To keep up with the

color scheme, paired with the yellow top is the softly pleated brown skirt that maintains

the femininity of the look.

:: Sample Design 9 . Similar to the previous design, the top is a printed blouse with

interestingly detailed neckline and collar to draw attention upwards. Paired with a white

flounce skirt with a flowing hemline, the slimming look is perfected as emphasis is given

to the curves of the hips to the legs.

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En Cima, Incorporated 13


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Raw Materials

The raw materials comprises up to 60% of the finished product. Another 20%

goes to labor costs. This, in turn can be attributed to the subcontractors who will be

responsible for supplying the services needed in the conversion of the raw materials into

finished products. The remaining 20% of the costs is allotted to the other overhead

expenses of the business. Therefore, the textile or fabric acquired from suppliers is a

very important input that will contribute to the quality of the finished product.

With the target market in mind, there are certain considerations as regards the

type of textile or fabric that will be used in production of the clothes. Not all fabrics

would flatter the proportion of a petite frame. For example, fabrics with too-large prints

would tend to drown a small figure. According to Petite Style by Susan Ludwig, the

following fabrics would be complimentary:

• Fabrics that drape, flow and hang softly on the body, such as knits

• Smooth, lightweight fabrics, such as cotton and silk

• Natural fabrics, such as cotton, silk, wool, linen

Conversely, the following should be avoided when choosing fabrics:

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• Stiff fabrics, like taffeta

• Bulky fabrics like mohair, or terry cloth, or any heavily textured fabric or knit

• Fabrics that reflect light, like satin and velour, as they tend to make the wearer

look heavier

In addition, the book suggested a list of fabrics which includes notes about how

each flatters petites (See Appendix 1). However, the list is not a definitive guide in fabric

or clothing shopping since the style and cut of the clothes and figure of the wearer would

also be contributing factors to the over-all effect of the apparel.

Suppliers

Raw materials for the products will be obtained from the different suppliers in the areas

of Divisoria and Tutuban. The place is abundant with suppliers of various textiles,

fabrics and other materials needed for the manufacture of clothes, such as buttons, laces,

trims, etc. In addition, Ms. Tina Navarro of Ilaya mentioned that most designers and

clothing manufacturers buy their supplies from these areas because of the variety of

materials available as well as the very affordable prices.

The following are some of the possible suppliers who can provide the necessary

materials needed for production input:

• New State Lace Center

Branch KX – 5 Cluster II, Tutuban Center

• Mega Bride Collection

K-10 Ground Floor, Cluster II, Tutuban Center • Goldrich Textile

Stall #16-18, Tutuban Center

• Fine Cuts Merchandising

C-39, Tutuban Center

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• Sean & Stacey Barong Selection

C25 & C26 Cluster I, Tutuban Center

Supplies are selected based on the type of material and fabrics needed for each

design of the clothes. Since the suppliers cannot possibly have all the required fabrics

and materials needed, there is a need to have several suppliers on hand who can provide

such fabrics and materials so as not to compromise the quality of the clothes that will be

manufactured. The number of suppliers can be an advantage to the company since

competition between them will tend to drive down the prices of the goods. The company

can have more bargaining power in terms of acquiring discounts on supplies. Credit

terms and discounts will be determined on a per transaction basis which would be

included in the terms of agreement between the company and the supplier.

Since there are numerous suppliers of the materials needed by the company, there

are no foreseeable problems in terms of future supply availability. However, in terms of

the quality of materials such as fabrics, there may be some difference between the

products of one store. Because of this, it is imperative for the company to look for

suppliers with more or less the same quality of goods.

Purchase will be in bulk since designs will be seasonal. The quantity will depend

on the production capacity as determined by the subcontractors. As mentioned, this will

allow the company to have more bargaining power in terms of credit terms and discounts

since most stores will provide discounts when customers buy in bulk. The company

should definitely take this opportunity in order to obtain more cost savings.

Production Arrangements

Cost-Benefit Analysis

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Since the Lilliput Boutique is only a starting company, there are various

concerns that need to be given attention to especially with regard to its manufacturing

processes. The company has taken into consideration several aspects of the processes

and weighed the pro’s and cons’ of whether to have in-house manufacturing or

outsourcing subcontractors. Upon duly evaluating these, the company has decided to

have a small-scale subcontractor for the production of their clothes for the first three

years of its operations. Eventually, a large-scale subcontractor would be deemed proper

and practical for the company.

In-House Manufacturing

Advantages

Having an in-house manufacturing of the products gives several benefits

for the company. One of this would be the closely supervised production of the

clothes. Quality would not be compromised. It is very important to take into

consideration this aspect because quality increases value for the product. With

this, deadlines will also be easily met. This won’t pose as a problem with regard

to the production schedule. Everything will be under the control of the

management in terms of the making of the products. Also, another benefit would

be that there won’t be added costs that a subcontractor could impose in our

production orders. Part of this would be the additional costs in delivering the

goods as well as the other variable costs in producing the garments such as

inventory and warehousing costs. In the long run, having their own in-house

manufacturing, the company would have lower production costs in the future.

Disadvantages

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Establishing our own in-house manufacturers also entails costs for

the company. With regard to the production itself, the company would have to

procure big and expensive equipment such as the sewing machines and ironing

machines. Not only would this constitute a big part of the capital, but it would

also result in added warehousing and inventory costs. In addition, there would

also be maintenance costs on both the production plan and equipment to take care

of. This would easily translate to substantial overhead costs for the company.

With the plan of having ten sewers and sewing machines, there would be a threat

of idle human resources since the company would not be producing in mass

production. Also, having to keep regular sewers as regular employees would

mean providing them of mandatory benefits required by law.Subcontracting

Advantages

The can get away with the problems of purchasing and maintaining

equipment and other auxiliary materials such as thread, etc. Although these items

have small increments in the finances of the company, these will entail costs

which are variable by nature and cannot be compromised, especially with the

quality of these materials. Also with regard to the costs, manufacturing’s

overhead costs are not to be shouldered by the company. Expenses such as the

plant and warehouse rental, electricity, etc. constitute a big bulk of the budget of

the company. In addition to this, subcontractors do not have the privilege of

receiving fringe benefits from the company. These benefits are usually given to

employees of companies. Although they are only small increments to the salary

and compensation of the workers they also add up to a big chunk of the expenses

of the company.

Disadvantages

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Apart from the advantages of having subcontractors, disadvantages

are also present and are necessary to keep in consideration. Since subcontractors

are outsourced agencies, their products cannot be well-supervised, therefore the

quality of their work can be compromised, especially when the due date is already

near. They might have the tendency of delaying their production until such time

that the products are near delivery date. Also, subcontractors tend to go beyond

the stated deadline of the finished products. Without close supervision among the

workers, manufacturing and production by subcontractors have the inclination of

lower quality as compared with in-house manufacturing.

Costing

In-house Expenses

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*Costs are estimated according to the designer and confirmed by the suppliers of fabric

Subcontracting Expenses

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Fixed Costs

Equipment P 330,000

Plant 20,000

Electricity 25,000

Total Fixed Costs 375,000

Variable Costs

Fabric/Textile* 379,900

For blouses 255,600

For jeans 48,000

For non-jeans 56,800

For shirts 37,500

Supplies/Miscellaneous Materials 14,980

Labor (P 8,000 x 10 employees) 80,000Total Variable Costs 474,880

TOTAL EXPENSES 849,880




Subcontractors

The company will be availing of the services of St. Claire Apparel (SCA) which

is located in Obando, Bulacan for its subcontracting needs. Among all the subcontractors

En Cima has contacted and discussed the agreements of the contract with, SCA has so far

been the most qualified and fit for the job. Good subcontractors are generally located

within the outskirts of the Metro. They could actually go as far as Pampanga, but the

company had decided do business with SCA because the quality of their work has already

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TOPS

P 150 at 120 units each of the 20 designs 360,000

960 units Small (40%) 144,000

960 units Medium (40%) 144,000

480 units Large (20%) 72,000

BOTTOMS

P 170 at 100 units each of the 10 styles 170,000

400 units Small (40%) 68,000

400 units Medium (40%) 68,000

200 units Large (20%) 34,000

TOTAL EXPENSES 849,880




been established as proven by their transactions with popular clothing brands

like Osh Kosh B’Gosh, Tommy Hilfiger, and etc. SCA also suits our specifications

for subcontractors quite well.

Basically, the contract with SCA include the terms of payment, production

schedule and other terms of agreement which are all discussed and agreed upon by actual

transactions. Based on the group’s interviews, it takes an average of one week for a

subcontracting agency to determine the whole process of making any product. This

learning curve of one week also gives time for the manufacturer’s to test the fabric, how

long they will take to finish such project as well as their capacity, which is how much

they can make for a certain period of time. Also, on the average, it takes about three

weeks for a skilled sewer to make around 120 units of a piece of clothing, since the

method suited for Lilliput boutique would be a piece-wise method. This means that

instead of an assembly line, a single article of clothing would be produced by one sewer,

all alone. The logic behind this is that assembly lines only work for mass-produced

manufacturing, which at the minimum makes 10,000 units of clothing for the said

method. From this, the subcontractor can base their assessment of the lead times and

production capacity which will then be the elements of the contract.

As with any contract, any violation would require proper penalty. As much as

there are deadlines for the subcontractor to meet, there will also be deadlines for the

company as to the payment scheme as well as the submission of pre-cut patterns and

delivery of fabric. Any defects would then be returned to the subcontractor to be

reworked.

Terms of Contract

The production arrangement will be discussed during a meeting between En

Cima’s Production Manager and St. Claire Apparel’s representative. It is during the

initial meeting that En Cima will present to SCA the materials and designs of the clothes

to be produced, discuss the proposed production deadlines, negotiate labor fees and talk

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about the payment terms. The production schedule, labor fees, and payment

terms vary depending on the specifications and details of the design. Designs with

intricate details or delicate materials are more difficult to make, therefore, require

more time to finish and higher labor fees. En Cima will be the one to choose and

purchase the materials needed for the apparels, while SCA creates the clothes depending

on the specifications of the designs provided. Production will immediately start after the

first meeting. SCA will be given one week to evaluate the expected pacing of their

production. With this, the initial payment of 25% of the total amount of the labor fees

will be paid to SCA.

After one week, the representatives of En Cima and St. Claire Apparel will have a

second meeting to discuss the final deadline of production and conduct the actual contract

signing. The actual capacity and time period of manufacturing would already be

determined by then. By this, deadlines would be set and put in the contract. Upon signing

of the contract, 50% of the total fees would be paid to SCA. The remaining 25% will be

given at the date when the products are due. En Cima would not require delivery services

from SCA since they own their own service vehicle for that purpose. The finished goods

will be double-checked and counted upon due date. In case there is delay in the

production schedule, SCA would be held responsible to deliver on time. A penalty of at

most 10% of the total amount per day would be imposed to SCA. For cases of factory

defects, on the other hand, SCA would have to rework on the said finished goods without

added costs for En Cima.

PRODUCT FLOW

This portion will discuss the stages of how Lilliput ’s products (i.e. variousclothes) are made available to the market. The product flow process for Lilliput involves

four (4) general stages, as presented in Figure 2.2. For the first few years of the business,

most of the stages are designated to few persons, but as Lilliput undertakes expansion,

various stages would be departmentalized.

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Figure 2.2

Lilliput’s Product Flow

Conceptualization stage involves researching for new fashion trends both locally

and internationally to serve as basis for developing new designs and collections.

Assessment of the market must also be done prior to developing new designs so as to

know the needs and wants of the market, and which products would probably be most

saleable. From these researches, the in-house designer would then develop the designs to

be approved and sampled. Design specifications include possible materials to be used,

add-ons to be placed such as types of buttons, biases, laces, stones, etc., and other design

details such as inside pockets, special stitches and the like. En Cima opts to hire an in-

house designer as opposed to buying designs to different designers because of the

additional value it adds to the product process. The designs are more monitored, having a

similar design style and that in the early stage of the business, designer serves as the

researcher for conceptualization stage.

Once designs are approved, patterns are then drafted to serve as a guide for fabric

cutting. A sample is then made so as to assess the proper materials (fabric,

accessories/add-on) and the sewing standards or requirements needed for the specific

designs. This is very important especially to intricate designs or uncommon cuts. This

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Conceptualization Production

ResearchMarket AssessmentDesignSpecification

Pattern DraftingMaterial SamplingSewing StandardIdentificationCosting and PricingDesign Adjustment

Demand ForecastMaterials PurchaseSubcontractQuality inspection

DeliveryWarehousing

Pattern Making/Sampling Distribution /

Storage




will also be the basis for costing and pricing of the product. Necessary design or

materials adjustments are done if cost is too high.

Having the designs sampled by the company, the next stage would be the

production process. Production stage involves several steps as seen in figure ___. It starts

with forecasting the demand or sales (in units) for the specific design to be used as the

production figure. The bill of materials is then drafted and materials are purchased. These

materials, together with the designs are then passed-on to the subcontractors for

production. Quality inspection is done upon delivery. If the delivered products do not

meet the quality requirement of En Cima, the products are returned and re-worked by the

subcontractors without additional cost.

The last stage of the product flow would be the distribution and storage of the

products. Some of the products would be delivered immediately to the boutiques and

stored at the stockroom while the rest would be kept at the warehouse.

A more detailed presentation of the product flow or production process is

presented in figure ___ as a flowchart model. Once the pattern is done, purchasing

personnel scouts for the possible materials, as indicated by the design specification to be

used for creating sample or test product. This test product would serve as the standard for

the correct quality in terms of stitching and other details, and at the same time would

determine the production time per unit.

At the start of the business, solely the in-house designer handles the

conceptualization stage, while another personnel, known as the patternmaker, handles

pattern making and sampling. Costing and pricing as well as demand forecasting is

determined by another personnel, who either approves the design for production or sends

the design to the patternmaker for design adjustments.

33





Once Lilliput begins to expand into various outlets, the said stages will be

broken down into departments, otherwise known as Marketing department, which

will handle demand forecasting and market assessment; Creative department, the one

that will handle the product design conceptualization and pattern making; the Purchasing

department, which will be chiefly responsible for the purchasing of sample materials as

well as the materials to be delivered to the subcontractors. People from the Purchasing

department will also handle the logistic aspect of the product; the Production department

on the other hand, shall create sample specimens and will be in charge of contacting

subcontractor as well as the quality inspection of the product upon delivery. Figure 2.4

presents the process flow for a departmentalized set-up.

Every stage of the production process adds value to the growth of the business in

ensuring a high quality product, which is in line with the wants of the market. This is

primarily brought about by the conceptualization stage, of not only doing the designs

solely based on the creative mind of the designers, but also backed up by trends and

market assessment. The option of going into subcontracting also adds value to the chain

as it gives the company a better advantage as compared to maintaining its own

manufacturing plant as presented in the cost-benefit analysis discussion. Sampling the

design prior to going full scale allows further assurance to the quality of the product. As

stated, sampling stage creates a standard that subcontractors must adhere to, as well as

adjust designs to be less costly, in order to gain a higher profit.

34





Production Schedule

Lilliput will release new designs quarterly, which will be in store for at least three (3

months). Start of quarter will be on the months of January, March, June and

September. The succeeding Gantt chart seen in figure __ shows the production

schedule of Lilliput’s product from conceptualization until the release of the product

to the market.

Figure 2.3

Quarterly Production Schedule(Release months : January, April, July, October)

Legend: Once per quarter Monthly

Conceptualization and finalization of design until the assessment time of the

subcontractors occurs only once per quarter starting from the 1 st week of the release

month of the previous quarter. Hence, for example, designs for April are conceptualized

starting from the 1 st week of January. However, production until the delivery at the stores

occurs monthly, as arranged with the subcontractors. Likewise, a single design will be in

production for 3 months, following the number of weeks allotted in the schedule.

35


1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4ConceptualizationSamplingRelease DesignProduction Assessment of ProductionDeliveryQuality InspectionStorage

release monthTask

1s t month 2nd month 3rd month





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Store Operations

Organizational Structure

Figure 3.1

Lilliput’s Organizational Diagram

Functions and Responsibilities

:: The General Manager / CEO will be in charge with the over-all management of the

business. He shall formulate the over-all policy, set goals, and plan for the company.

Those below him will have to increasingly focus on the details of his plans. He shall

coordinate with the executive officers to ensure the smooth operation of the business.This can be done through regular meetings. Also, the General Manager shall be the major

decision maker with ideas and suggestions coming from top officers.

:: The Marketing Manager takes care of all the marketing activities of the company. He

or she makes sure that the Lilliput brand will pop up in every petite woman’s mind every

37


General Manager CEO

FinanceManager

Purchasing /LogisticsManager

MarketingManager HR Manager OperationsManager ProductionManager

Store Personnels

Press Relations

Controller

PurchasingPersonnels

Supervi so rs Crea tive S ta ff

MarketResearcher

Treasurer

LogisticsPersonnel




time they plan to buy clothes. This way, the brand will have a greater chance in

increasing its share of wallet from consumers. The Press Relations Officer’s job is to

take care of all the advertising activities of the company and to see to it that the

advertising messages are all aligned and integrated. He or she is also the one in charge of

promotion activities and sponsorship deals. The Market Researcher will be the one who

will study and investigate our closest competitors. He or she will also forecast the

appropriate pricing scheme and discounts in the future. Moreover, the Market Researcher

is the one who does the demand and supply forecast. Part of his job also includes

anticipating for possible market changes.

:: The Finance Manager takes charge of the budgeting, capital appropriations and costcontrol. Other responsibilities include credit management, forecasting funds, and

allocation of dividends and incentives. The Controller is in charge of making the financial

reports and accounting records while the Treasurer handles the bank accounts, billings

and collections, payment to suppliers and payrolls.

:: The Operations Manager is in charge of the over-all management of operations. He

or she also serves as the Store Manager of the first boutique. Also, the Operations

Manager is responsible for the overall operations of the boutique and is in charge of the

store’s daily operations and generation of monthly reports for the owners. These reports

include inventory levels, sales, utilities, compensation and other miscellaneous items. The

manager is the custodian of the boutique keys and is the one who would deposit sales in

the bank. He or she is tasked to make the staff’s schedule and compensate them. He or

she is in charge of the store’s displays, quality of merchandise, and promotions. Also, the

Operations Manager acts as the cashier when the cashier is off and would also, at times,

assist the salesladies in dealing with the customers. The Store Manager is the only one

who could void or cancel a particular transaction. He or She is also the one who would

generate reports regarding tardiness and absences. Moreover, he or she would be the first

to solve problems of his store and employees before these are escalated to higher

authorities. Lastly, he or she would issue memos to tardy employees and talk to them

38







recreation, transfer and relocation of employees as well as training and

development. The Supervisor is the one directly reporting to the manager regarding

employee absenteeism, complaints, manpower utilization, and working conditions.

:: The Production Manager is in-charge of the over-all production planning and control.

He or she works hand in hand with the Logistics Manager and subcontractors. The

Production Manager also provides product specifications, quality standards, and cost

estimates. The Creative Staff will consist of the pattern makers and the fashion designers.

The fashion designer is tasked to research on the latest trends. He or She will assess the

market’s needs and conceptualize the designs that will be made. The pattern maker is the

one who will draft the patterns and suggest on what materials will be utilized. He or Shewill estimate the cost of materials and labor that will be used in a particular design.

During the first two years of the operation, there will be two pattern makers and two

fashion designers as well. These numbers will continually grow when the group deems it

necessary.

Qualifications

Since the business is just starting, the qualifications of the officers would be simple

enough for them to do their functions in the organization.

The Chief Executive officer

• Must be male/female and must be a graduate of any four-year business course and

should be knowledgeable in the apparel industry.

• Must possess excellent communication skills in both English and Filipino.

• The CEO must be elected by the Board of Directors and must have strong

leadership and decision-making skills.

• He or she must have the skill to create aggressive strategies that would benefit the

company as a whole for a long period of time.

40





The Operations Manager / Store Manager

• Must have an eye for fashion.

• Preferably graduated Bachelor’s degree in Business or Engineering and must

possess excellent communication skills both in English and Filipino.

• He/She must have strong leadership skills to manage his/her staff.

• The manager must also be customer-oriented and preferably has knowledge and

experience in clothing and retailing business. He/she must also be dynamic and

enthusiastic in meeting sales targets.

The Salesladies

• Must be 18-22 years old and must have attained at least 2 years of any college or

vocational course and must also possess good communication skills both in

English and Filipino.

• She must be willing to work in shifts and preferably must have experience in

working in a boutique for at least a year.

• Just like the manager, the salesladies must be customer-oriented and must have a pleasing personality.

The Cashier

• Must be 18-22 years old and must have attained at least 2 years of any college or

vocational course and should possess good communication skills both in English

and Filipino.

•

She must be knowledgeable in operating a cash register and must be worthy of trust in handling finances. She must be willing to work in shifts and preferably

must have experience in working in a boutique for at least a year.

• The cashier must be customer-oriented and must have a pleasing personality.

41





The Marketing Manager

• Must be a graduate of any college course preferably marketing and must be

familiar in the apparel industry.

• He or She must be knowledgeable in advertising and promotions, consumer

behavior and must be updated with the latest trends in fashion.

• He or She must possess excellent communication skills and must be a team

player.

The Press Relations Officer • Must be a graduate of any college course preferably Business or mass

communication.

• He or she must be familiar with public relations and events management and of

course, should have an excellent grasp of his communication and people skills.

The Marketing Researcher

•

Must be a college graduate of any college course preferably business, engineeringor statistics.

• He or she must be knowledgeable in market research methods and consumer

research studies.

The Finance Manager and the Controller

• Must be a Certified Public Accountant.

•

He or she must be familiar with investment management and analysis and must bekeen in details and would be willing to work long hours when needed.

• The treasurer must be a graduate of any business related course preferably

finance or economics and must be familiar with financing, loan and credit

management.

42





The Purchasing Manager

• Must be a graduate of any Bachelor’s degree preferably in Business or

Engineering.

• He or She must be knowledgeable in the apparel industry and must have existing

connections with suppliers.

• Also, the Purchasing Manager must be familiar with inventory management and

product evaluation. He or She must have excellent communication and

negotiating skills.

The Logistics Manager

• Must be a graduate of any Bachelor’s degree preferably in Business or

Engineering.

• He or She must be familiar with inventory management and must have good

negotiating and communication skills.

The Human Resource Manager • Must be a graduate of Psychology or Business Administration.

• He or She must be knowledgeable in employee relations, training and in making

compensation packages.

• The HR Manager must have strong leadership qualities.

• HR Supervisors should have a Bachelor’s degree in Psychology or other

equivalent courses.

The Production Manager

• Must have a Bachelor’s degree preferably in Engineering.

• He or She must have skills in product evaluation and quality assurance.

• The Creative Staff must have attained any Bachelor’s degree or vocational course.

43





Recruitment and Training

En Cima Inc. assumes that the incorporators themselves will occupy all top

positions. The company will hire additional people to fill up unoccupied positions. As for

the lower level position like the sales ladies, standard recruitment processes will be

employed by the company.

Applicants must first submit a copy of their updated resume. The HR manager

and supervisors will go through the resumes and choose potential hires from the pool of

applicants. All those chosen are then scheduled for an interview. After the interview, theHR will evaluate which applicant to hire. All newly hired applicants will be asked to

submit an NBI, police, and Barangay Clearance. They must also have their SSS numbers

and must submit a medical certificate stating that they are fit to work.

The newly hired personnel will undergo basic brand training for a week. This is to

introduce them to the products that Lilliput has to offer. In this training, they will also be

briefed about the company’s vision and mission, policies and guidelines, rules and

regulation. During training, they will be evaluated to make sure that they are prepared to

take on their jobs.

Compensation and Benefits

Since Lilliput is just starting, the compensation packages designed for the

company would be a lot smaller as compared to those that are already established. All

employees of Lilliput will get all benefits mandated by the Philippine government like

the Social Security System (SSS) contribution, PhilHealth, Pag-ibig Fund and ECOLA.

All compensation benefits like holiday pay, service incentive leaves and the like will be

applied based on the rules and regulations stipulated by the Labor Code of the

Philippines.

44





All salaries are paid on the 15 th and 30 th of the month. The CEO will receive a

monthly salary of Php30,000 plus a share on the profits of the company. The

Operations/ Store Manager will be paid a salary of Php18,000. All other managers will be

paid a salary of Php15,000. The fashion designers, controller, treasurer, press relations

officer and market researcher will be paid Php12,000 each. The pattern maker will be

compensated Php9,000, the salesladies Php8,000, the cashier Php8,500 and the driver

Php7,150. All salaries will increase after one year of operations.

All top-level employees will be entitled to 2 days rest every week. Salesladies,

cashiers and the driver will be given 1 rest day a week. All employees will be allowed asick leave of 5 working days.

Daily Operations

The call time for salesladies is at 9:30am. This will give them time to prepare and

clean the store for the customers. At exactly ten, the mall opens and so the store is

expected to be open for customers by then. There will be a total of three people manning

the store, the Manager and two salesladies. All of them will be working in shifts to avoid

overstaffing and understaffing. When a customer enters the store, the salesladies are

expected to greet them with a smile. One saleslady will assist one customer if possible.

The cashier is stationed at the counter.

If traffic is high, the Manager will help in assisting the customers. Once a

customer will make a purchase, the cashier is expected to ask the customer if payment

will be made in cash or card. As soon as the customer hands the payment to the cashier,

she should read out to the customer the amount of the transaction and the payment she

received. She should count the change out loud to the customer. Tags must be removed

from the merchandise. These tags will help keep track of the items sold during the day.

45





After payment, the items will be placed inside a paper bag and the cashier

should thank the customer. This way the buyer will recognize Lilliput to be a

boutique that has warm and courteous employees.

During lunchtime, the employees will take turns at having lunch. The same policy

applies to 30-minute coffee breaks. If there is no customer to assist, the salesladies are

expected to clean the place and fix clothes on display. The store closes at 8:30pm. Before

leaving, the store must be cleaned and the cash must be balanced by the cashier. The cash

for the day will be handed to the store manager who will, in turn, deposit it in the bank.

If, for any reason, the cash is not balanced then it should immediately be reported to the

manager.

Scheduling

Scheduling is one of the most important tasks of store management, yet it is often

one of the most neglected. Many Store Managers simply repeat the same schedule each

week, neglecting to analyze changes in store traffic

For Lilliput , Store Staff on the opening shift are required to report thirty minutes

before the scheduled opening time while those in the closing shift are extended thirty

minutes after closing time. This is to provide ample time for cleaning, stock

replenishment and cash wrap counter preparation.

Table 3.1

Sample Weekly Schedule for Lilliput Boutique

Mon Tue Wed Thu Fri Sat Sun

Store Manager O OC DO DO C C C

Sales Staff 1 DO O O O O O O

Sales Staff 2 O DO C C O O O

46





Time In Lunch Snacks Time Out

O – Opening9:30am 12:30-1:30pm 4:00-4:30pm 6:30pm

C – Closing 12:30pm 1:30-2:30pm 4:30-6:00pm 9:30pm

OC – Opening/Closing 9:30am 12:30-1:30pm 4:00-4:30pm 9:30pm

Policies on Tardiness and Absences

All employees will be required to be at the boutique at 9:30AM. They would be

considered late if they come 15 minutes after the call time. Any fraction after that, theywill be considered under time and there would be a corresponding deduction from their

pay. An overtime cannot offset an under time. An employee will only be allowed to be

late for a maximum of three times per month. Should they exceed, a memo will be issued

to call their attention.

In the event that they would absent themselves from work, they must call before

or within the hour of their shift to inform the manager of their absence. All Employees

will only be allowed a maximum of one absence every month. Should the maximum be

reached, a memo will be issued to call their attention. An absence without leave will be

considered a serious offense. A memo will be issued upon returning to work.

Uniform and Dress Code

The store managers and all store staff will be provided with official uniforms.

Uniforms will vary and will depend on the season and budget. These employees are

expected to wear their uniforms at all times. The store staff will enjoy free uniform

privileges. The prescribed color and style of shoes will be provided by the employee

themselves. Stockings shall be worn when the uniform consists of skirt. Female staff

should maintain their hairstyles neatly combed and make-ups should be appropriate for

47





daywear and theme of the season. Accessories should be minimized. Body

marks, including tattoos, body paints or stickers are not allowed.

Inventory Management

The salesladies of Lilliput are in charge in making sure that the items are in tip-

top condition. In their free time, they are expected to maintain and clean the clothes. The

display must have all the designs, sizes, colors. When a displayed item is purchased, it

must be replaced with the same size and color.

The store has a stockroom wherein all the new arrivals can be stocked. All items

must be properly tagged, labeled and arranged for easy access. The stockroom must be

kept clean and organized. Tops should be placed on the topmost shelves while bottoms

will be placed on the bottom shelves. Clothes must be arranged by color and each color

will be arranged by sizes, smallest to biggest. This stockroom also serves as the storage

area for the things of the sales ladies and the utility equipment of the store.

Upon closing, the items will be checked by counting the tags that were

accumulated during the day from the items sold. This way, it would be easier for the

boutique to keep track of its inventory.

Deliveries should be closely monitored. The Store Manager must count the boxes

that have arrived. Only one box must be opened at a time and the contents must be

checked. Deliveries must only be made when needed or when there is enough space in

the stockroom. It is the manager’s duty to assess whether deliveries are to be made or not.

Employees must keep track of customer returns. These items must be properly

accounted for so the necessary adjustments will be made in the records. In the event that

a customer returns an item with a factory defect, an apology letter written by the Store

48





Manager himself/herself should be given along with a small token. The

damaged item must be kept and the reports should be made regarding the matter.

Cash Management

Lilliput is equipped with a Point of Sale (POS) terminal registered with the

Bureau of Internal Revenue (BIR). All transactions done in the boutique must be entered

in the POS. Receipts should always be issued to avoid problems with the BIR. Sales

invoices will be issued in lieu of the receipt issued by the POS. this will only be done in

the event of power failure, POS malfunction, and if it is requested by the customer.

The store has an opening fund in the POS of Php 1,000 in different

denominations:

This opening fund will be used in the daily operation of the boutique. Only the

Store Manager can manage this fund. At the end of the day, the cash will be counted and

will be recorded. Same thing will also be done for the sales. The cash will then be given

to the Store Manager for safekeeping. Substantial amount of cash should not be allowed

to accumulate. The Store Manager will be the one who will deposit the cash in the bank

under the store’s ATM account. This account will serve as the depository of all sales,

both cash and credit.

49


P1.00 – P100.00

P5.00 – P100.00

P10.00 - P100.00P20.00 – P200.00

P100.00 – P 500.00




Sales Management

A daily sales report is made to keep track of merchandise and account for every peso

received. This report would aid the Store Manager in monitoring what items are in

demand and what are slow moving. Orders for stocks can be easily determined because

of this. The boutique will be able to order those items that are fast-moving and will not

have the error on ordering those that are not saleable.

Lilliput must achieve monthly sales targets. In this way, the employees will be

motivated to perform their duties. These targets are given to them at the start of each

month so that they will have time to think of ways to boost sales. The Store Manager willlead his staff in achieving this goal. Recognition will be done to those who have achieved

more than what is asked of them. A simple award like a certificate or a token will be

given to acknowledge their efforts.

Store Expenses

Rental

The Store Manager will receive rental statements from the Mal operator on a monthly

basis. In line with this, he or she is responsible in checking the accuracy of all the

information and figures written on the statement. After doing so, the Store Manager will

affix his signature on the bottom portion of the statement to signify that it has been

screened and reviewed. The rental statement is faxed to the Accounting Department for

payment processing.

50





Electricity and Water

The electricity and water charges are usually incorporated in the rental

statement. Whether incorporated or not, the Store Manager ensures that the consumption

readings of each are reviewed and tallied against the previous month’s reading.

Petty Cash

Each store is given a monthly budgeted petty cash expense. Store managers are

tasked to keep within budget by finding ways to recycle supplies and limit purchases to

the minimum without sacrificing operational efficiency.

Replenishment of Store Supplies

When ordering replenishment of supplies, stores see to it that the quantity ordered

is enough for a month’s or two weeks’ supply. Thus, it is expected that the average

monthly consumption for each supply be monitored in order to peg a safe reorder point

which is usually half of the average monthly consumption.

51





Structural Requirements

Lilliput Boutique

Design Philosophy: Accommodating Filipina Sizes

On the average, Filipina women stand 5 feet in height. According to research, this

particular trait has been identified to have caused problems on the size and fit of the

clothes that Filipinas would buy. However, this concern is not only confined to the

apparels but also to spaces that sell them. Often, boutique designs overlook the fact that

petite forms dominate the average Filipina frame. Hence, petite customers would find

themselves dealing with structures that overlook vertical considerations in their design.

Oftentimes, the presence of hangers and display racks which are a bit high for reach, and

counters that are quite lofty would give customers that are short in height a really

uncomfortable shopping experience. Lilliput’s Design Philosophy aims to change that.

As the store dedicates itself in giving petite women more option in clothing, this

philosophy presents a plan that would be most appropriate in giving ease and comfort to

the petite shoppers.

Design Concept: Girl Power Kaleidoscope

The wide use of colors in the space will liven up the interior and make it appealing and

eye-catching to prospective clients. From pastels to vibrant colors, the interior of the

boutique will characterize the many facets of women – feminine, graceful, ethereal,

corporate, strong, and a lot more!

Rationale: A Refined Look for the Masses

Since the location is well known for shoppers, En Cima would want their store to be

unique and to stand out from the rest of their vast competition. The company would like

to establish a look that is clean and organized-looking, but not intimidating to the target B

52





and C clients – meaning, a “refined look for the masses” is thus being

envisioned. En Cima aims to provide a boutique that reaches out to its market

thereby creating structural designs and plans which would not only serve as mere

space to sell merchandises but would function as one the store’s primary advertisement

that would lure customers to come in and discover what the Lilliput brand has to offer.

And since their target customers are from the petite sizes, they want their shop’s interior

to accommodate these particular customers and assure their comfort. They want the store

to embody the same concept as that of the clothes they offer.

Design Style: Feminine Contemporary Style

The clean and organized look is easily achieved with this design style for it takes on

simple lines and forms. Feminine colors, which complements with the color selection of

the clothes in the boutique, will be infused with the interior to avoid the space from being

dull and boring.

Design Objectives:

• To be able to meet all the client’s needs and wants

• To be able to come up with an effective design that would attract customers to

come in and keep them coming back

• To be able to translate the concept of the clothing line to the boutique’s interior

• To be able to design a space that would cater to the petite sizes.

• To be able to make a design that would see to the comfort of the shoppers and

their shopping companion(s).

• To be able to make a design that would also cater to the needs and comfort of the

staff/employees.

53





Interrelationship Matrix

Display Area

Fitting Rooms

Waiting Area

Cashier

Baggage Counter

Lounge for the Staff

54


Display Area

Fitting Rooms

Waiting Area BaggageCounter

Lounge for Staff

Cashier

Directly RelatedIndirectly Related

Figure 4.1

Bubble Diagram




Initial Location

The proposed Lilliput boutique shop shall be initially located at the second levelof Shoppesville Arcade in Greenhills Mall, San Juan, Metro Manila. The space currently

occuppied by a boutique called “Babo” is the one chosen by the group since it is located

in front of one of the entrances of the said mall. The space is also found strategically at

the intersection next to the escalator. The total space area is 25 square meters. The

contract of the current lesee will end at December 31, 2005.

Figure 4.2

Greenhills Shopping Center

55


W i l s o n

O r t i g a s A v e n u e

T o S a n J u a n

C o n n e c t

i c u t

M c K i n l e y

GreenhillsShopping Center La Salle

Greenhills

Robinson’sGalleria

N

S

EW

E D

S A

O r t i g a s A v e n u e





Figure4.3

SecondFloorPlan:

Shoppesville,Greenhills




Existing Layout

The existing layout of the space which is currently being leased by “Babo” can be

seen at Figure 4.5. The outer walls of the store are made of glass which displays the

mannequins and some of the clothes inside the boutique. Currently, it has two fitting

rooms and a stockroom extending from one end to the other of the boutiques inner side.

The display section for the clothes consists of the walls and center area of the store. This

kind of arrangement had noticeably made the store look very crowded and disorganized.

It is also very difficult for customers inside “Babo” to have an overall view of the items

found in the store because the displays at the center area are in the way.

Proposed Layout

The proposed floor plan of Lilliput is presented in Figure 4.6. The group’s interior

designer, Ms. Christine Realingo suggested a minor increase in the elevation of the whole

area inside the store so as to attract shoppers, especially the ‘first timers’. According to

her, elevating the store would give a distinct look that would set Lilliput apart from other clothing shops in the mall that are typically at the floor level. The minor elevation would

immediately give customers a feeling that they are in a different place--- with a different

level, ambiance, and setting, once they enter the store. The fitting rooms and mannequin

display areas are also further elevated to add an over-all unusual eclectic look. Different

floor finishing for each mannequin, display and fitting areas shall also be utilized to be

able to distinguish the different areas of the boutique. The store itself will not just serve

as a place for inventory display and sales but will also be reminiscent of a museum where

Lilliput clothes are highlighted.

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Lighting

The lights that will be installed inside the store are all warm white

Eurolux lighting with varying size and illumination. The group was advised by

Ms. Christine Santos of Plains and Prints to use this kind of lighting in order to

enhance the effect of clothing fabric on skin. Moreover, the yellowish luster that

these lights create to the garments makes one more relatively stunning and

flattering. This kind of lighting will also add to the cozy ambiance that gives

customers a more comfortable and welcoming feeling. In addition to that, the

main display area will also feature a chandelier-like lighting in a circular drop

ceiling form (an example can be found at Vinzon Hall’s Food Center). Pendant

lights (see picture in Appendix 4) will fill both the said area and the counter area.

The angles of these lights will be strategically positioned to highlight different

sections of the boutique.

Display Area

The clothes will be displayed in a manner similar to art pieces and will be

arranged in such a way that colors and shades will blend perfectly well. As

planned in the marketing study, a faultless ‘ come-on ’ advertisement is done

through the utilization of the front-hang procedure of displaying where clothes are

directly facing customers at eye level. This is in contrast to what is normally seen

in other stores where the side-hang procedure is more common. However, there is

a drawback in the front-hang display because it takes more space as compared to

the side-hang display. But then, the front-hang display allows people to get a full

view of the design and details of the apparels. This is also very helpful because itenables customers to look at the clothes as how they would see it fit on their

bodies. The latest collection in variation shall be displayed facing the store’s

entrance for added curiosity. This will help in attracting customers to come in and

check out the new designs inside the boutique.

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comfortable fitting rooms. Likewise, the group believes that the fitting

area of a boutique shop should be one of the best part of a store. This will make

the female customers comfortable enough to try on a number of clothes increasing

the possibility of purchases that they will make. This is especially true given that

females are proven to have the weakness of buying everything that looks good on

them. This strategy will be used by the group to gain more customers, and this

will of course be reflected on increased sales revenue.

Waiting Area

Another main attraction of the store is the stylish customized sofa located

at the center of the display section. The circular structure is specially designed toallow free-flowing movement of people inside the store. It would be easier for

customers to go around and move from one area to another. The central location

of the sofa will also enable the people who are seated to view the entire boutique

from a better angle. The seat will serve as the waiting area for customers who

have their boyfriends/husbands and other companions with them. Magazines for

both men and women will likewise be provided. Waiting should not be a problem

anymore especially for the guys.

Counter and Stockroom Area

The cashier’s section will be relocated at the edge of the fitting area, at the focal

point of the store where the staff could oversee all the customers and at the same

time look after the merchandise stored in the stockroom. The stockroom will be

relocated at the former fitting room area to allow easy access on the part of the

staff whenever customers ask for a different size or a new item. The proposed

place of the stockroom is deemed safer because it is not very near the entrance

door. A curtain will serve as a divider to keep the clutter of inventory stock from

the customer’s view.

60





Added Features

Additional mannequin displays shall be placed at the other side of the entrance

door. Furthermore, the group has noticed that the glass wall at the side of the aisle

which is more visible from the mall entrance is not well utilized. This is why the

interior designer decided to put in some mannequin displays as well in this area to

maximize the display capacity of the store from two different angles. The

mannequins will sport the latest collection of Lilliput .

A baggage counter will also be placed opposite the counter area for security and

convenience purposes. It will be good for Lilliput because it could help avoid the

occurrence of shoplifting. On the other hand, it is also beneficial for customers

because they won’t have any plastics or paper bags that they have to hold while

going around the store. The baggage counter where they could leave some of their

belongings will enable them to move freely and easily.

Construction of the Lilliput Boutique

The construction of the proposed layout of Lilliput boutique would take about 31 days to

finish. En Cima’s contractor, AUF Trading and Construction, presented a detailed daily

schedule of the construction and an itemized costing for every material and labor that will

be needed as shown in Appendix 2. The schedule prepared by the contractor took into

consideration the rules and requirements of the Leasing Department of Shoppesville

Shopping Arcade which only allows 4 hours of on-going construction per day for a

maximum of 2 months. Contractors will only be permitted to work after mall hours,

which is from 8:00 PM to 12:00 MN. The calculated costing for the construction would

reach a total of Php 573,562.

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Figure4.5





Figure4.6





Figure4.7





Figure4.8





Figure4.9





Figure4.10





Figure4.11





Figure4.12





Figure4.13




Costing

The initial location shall be at the Shoppesville Greenhills Mall. The leasing

department does not disclose any information on the charges of spaces at the mall unless

the proposed business shall truly exist and will surely rent the place. According to Babo ,

the current occupant of Lilliput’s would be space, the average monthly fixed charges for

their store amounts to P55,000 including utility rates.

The contract states that charges per month will compose the following:

• Fixed rent – which will be determined by the management accordingto the location and marketability of the space

• CUSA (Charges for Common Usage and Service Area) – this charge

represents the lessee’s share of the maintenance and operating costs of

the common areas of Shoppesville Arcade facilities, utilities and

services as the lessor may solely and reasonably determine. According

to the leasing contract, these shall include but shall not be limited to

administrative and overhead expenses, sanitation, garbage fees,

security services, cost of repair and maintenance of equipment and

facilities, lighting of common areas, etc.

Therefore, for the purpose of this study, the group shall assume that:

Total Monthly Expense = Fixed Rent + CUSA

Total Monthly Rent Expense = P 55,000 (inclusive of 10% tax)

Other expenses chargeable to the lessee are the following:

• Repairs and maintenance of improvement inside leased premise

• Cost of Roll-up door and/or Cost of Glass Panel/door

• Cost of Stall Signage (design and material subject to lessor’s approval)

72







In determining the fixed rate of a space in SM Mall of Asia, the group

decided to use the existing rate of a Penshoppe boutique in one of the SM malls

provided by the store manager:

• Basic Rent = P 775 per square meter (plus 3% gross sales)

• CUSA = P 80 per square meter

• Air conditioning = P 85 per square meter

• Monthly electricity = P 2,600

• Monthly telephone = P 1,880

The group will now assume that these rates will be applicable in spaces on SM

Mall of Asia though there is a possibility of much higher rate because the said mall will

be newly opened. Thus, the total monthly rent expense for a 70-square meter store for

Lilliput is:

Basic Rent P 54,250 ( P775 x 70)

CUSA 5,600 ( P80 x 70)

Air conditioning 5,950 ( P85 x 70)

Monthly electricity 2,600Telephone 1,880

Total Monthly Rent Expense = P 70,280

(exclusive of 3% of gross sales)

The same procedure will be followed in estimating the rate of a space in

Robinsons Galleria. The following rate was given from a manager of an 80 square meter-

store:

• Fixed rent = P 96,000

• CUSA = P 5,150

• Monthly electricity = P 2,600

• Telephone = P 1,880

74





• Air conditioning = P 5,500

Store for starters with areas of 25-30 square meters and 30-40 square meters are

available in Robinsons. The group wishes to occupy at least a 40 square meter space.

Since the utility fee for air conditioning is relatively high, it is safe to assume that this

rate is of per square meter basis. Hence, using the previous rates, the total monthly fixed

cost will be approximately:

Fixed rent P 48,000 ( P 96,000 x 40/80 sq.m.)

CUSA 5,150

Monthly electricity 2,600Telephone 1,880

Air conditioning 2,750 ( P 5,500 x 40/80 sq.m.)

Total Monthly Rent Expense P 60,380

Office/Warehouse

The office of En Cima Inc. will be located at 219 Regalia Park Condominium, P.

Tuazon Boulevard corner EDSA in Cubao, Quezon City. The building is conveniently

situated along EDSA which is a main thoroughfare for vehicles coming to and from

various cities in the metropolis. It is also within an hours drive to the Greenhills

Shopping Center where the Lilliput boutique will be located. The total space area is

27.56 square meters. The space is currently available for occupancy.

Proposed Layout

The main purpose of the office space is to provide a place for the officers of the

company to conduct business transactions, generate reports as well as to provide a storage

space for the materials and products of the Lilliput boutique.

75





The office space will be divided into different areas: conference area,

receiving area, and storage area. The office unit is already furnished with wall paper,

air conditioner, cabinets, and tables. In addition the following office equipment and

furniture & fixtures will be acquired by the company to be used in its transactions.

Figure 4.14

Proposed Office/Warehouse Layout

76


Office

1234

TP




OFFICE EQUIPMENT Qty. COST TOTAL EXPECTED

LIFE4 in 1 office machine(printer, scanner, copier, fax) 1 P 15,000.00 P 15,000.00 10 years

Computer Set 1 30,000.00 30,000.00 10 years

TOTAL P 45,000.00

FURNITURES & FIXTURES Qty. COST TOTAL EXPECTED

LIFEFiling cabinets 2 P 1,500.00 P 3,000.00 10 years

Conference chairs and tables (set) 1 16,000.00 16,000.00 10 years

Sofa leather 1 4,500.00 4,500.00 10 years

Office tables 2 2,200.00 4,400.00 10 years

Office chairs 2 1,300.00 2,600.00 10 years

Fire extinguisher 1 1,200.00 1,200.00 10 years

TOTAL P 31,700.00

The aforementioned items shall be depreciated using the straight line method for

the period of ten years. The period was arbitrarily appointed by the company because it

believes that these items will be durable enough to last the duration of the period. In

addition, risk of obsolescence is low for the equipment and furniture.

77





Business Requirements

Process the following permits:

1. Barangay Clearance

2. Mayor’s Business Permit

3. DTI Certificate of Registration

4. DOLE Registration

5. BIR Registration

6. BIR POS Permit

7. BIR Authority to Print

Secure the following permits from the City / Municipality

1. Building Permit

2. Electrical Permit

3. Wiring Permit4. Occupancy Permit

5. Locational Clearance

6. Sanitary Permit

7. Certificate of Fire Safety Inspection

8. Certificate of Electrical Inspection

Coordinate with the Mall Administration for the following:

1. Final Mall Inspection

2. Permit to Move-in

3. Overtime / Work Permit

4. Permit to Pull-out Garbage

Requirements for Business Application

78





(To be accomplished at the Business Permit and License Office)

79


Articles of

Incorporation

BarangayClearance

Fee: P400.00

Community TaxCertificate

Sanitary Permit

LocationalClearance

Fee: P425.00

Fire Clearance

Fee: P356.10

BuildingAdministrator’s

Certificate

Permit to Operate

The law requir es the execution of the Articles of Incorporation so as to endow thecorporation the capacity to transact the business for which it was created.Together with the Treasurer’s Affidavit and upon payment of filing and publication

fees, the Securities and Exchange Commission shall then issue the Cer tificate of Incorporation to the business entity.

The business must then secure a certification from the barangay to where it willoperate. The Barangay Clearance shall include the name of the owner, the name,nature, and address of the establishment, and the date when the form has beenapproved by the Barangay Chairman.

The Community Tax Certificate can be obtained from the Bureau o f InternalRevenue after accomplishing the Application of Registration and payment of Annual Registration Fee and Documentary Stamp requirements.

The Community Tax Certificate can be obtained from the Bureau o f InternalRevenue after accomplishing the Application of Registration and payment of Annual Registration Fee and Documentary Stamp requirements.

As persuant with the fire safety and and protection requirements of the Fire Codeof the Philippines (PD-1185) , the business must obtain a Fire Safety InspectionCertificate before it could operate. The building or occupancy must be inspectedand should be subject to the recommendation and approval from the Chief Inspector of the Municipal Fire Marshal.

The establishment must then request for a certification of tenancy from thebuilding o r mall to where it shall locate its business at. The certificate shouldinclude the name of the stall and the level where it is placed, the space code andthe its approximate floor area.

Upon completion of the necessary requir ements presented above, the documentsshall then be presented to the Business Permit and License Office for further inspection and assessment. Required Taxes and Regulatory Charges must alsobe accomplished before the the Municipal Administrator, through the authority of the Mayor, could grant its approval in the issuance of the Permit to Operate.

The establishment must then be r egistered to specific zoning areas as assignedby the Local Zoning Board in the Planning Department of the City/Municipality.Upon application and approval, the business shall be classified as belonging tothe Residential, Commercial, or Institutional Zones, whichever it is deemedincluded.




City/Municipal Taxes, Fees, and Charges(to be paid for the Current License Period)

Mode of Payment: QUARTERLY

Assessments Reference Amount Due

Local Taxes Sec. 15-19,37&44, RCMM

Local Business Sec. 34, RCMM

Tax on Delivery Vans/Trucks Sec. 19(25), RCMM

Tax on Signboards/ Bill Boards Sec. 40, RCMM

Regulatory Charges

Mayor’s Permit Fee Sec. 105, RCMM 450.00

Garbage Charges Sec. 63, RCMM 100.00

Delivery Vans/Trucks Permit Fee Sec. 105(b), RCMM

Business Registration Plate 180.00

Inspection Fees

Sanitary Inspection Fee Sec. 109, RCMM 36.00

Building Inspection Fee P.D. 1096

Electrical Inspection Fee P.D. 1096 175.00

Mechanical Inspection Fee P.D. 1096

Plumbing Inspection Fee P.D. 1096

Signboard/Billboard Inspection Fee Sec. 105(b), 13, RCMM 50.00

Penalty (Surcharge & Interests)

TOTAL Amount Payable

Leasing Requirements

80





A. Legal Requirements (Corporation)

1. Articles of Incorporation and By-Laws2. Board Resolution authorizing the Contract of Lease and designating the

Authorized Signatory

3. Community Tax Certificate of the Corporation and the Authorized Signatory

4. Registration of Business Name with DTI

5. Certificate of Registration with BIR

6. Business Permit

B. Technical Aspects

1. Floor Plan

2. Ceiling Plan

3. Front Elevation

4. Longitudinal Section

5. Cross-Section

6. Perspective

7. Signage

8. Door

9. Electrical Load Schedule

a. Electrical Layout

b. Lighting Fixture

c. Power

d. Signagee. Neon Lights

10. Color Scheme

11. Scope of Work

End Notes

81




1 “Petite Women.” [Online] Available.http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,1801,HGTV_3201_1399200,00.html . September 2005.

2 Fujii, Donna. “Petite Women In Style.” [Online] Available.http://www.donnafujii.com/stylespa/imagemaking/petite2.html . September 2005.

3 “Fashion Tips.” [Online] Available.http://www.fashion-411.com/Petite_size_Clothing.htm . September 2005.


5 “Forever in Blue Jeans.” [Online] Available.http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,,HGTV_3201_1389163,00.html . September 2005.

6 “Matching a Skirt.” [Online] Available.http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,1801,HGTV_3201_1399200,00.html . September 2005.

7 “Petite Women.” [Online] Available.http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,1801,HGTV_3201_1399200,00.html . September 2005.’


9 Magdalena Navarro, professional Dressmaker and Patternmaker

10 Hannah Saab, UP College of Technology

http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,1801,HGTV_3201_1399200,00.html

http://www.donnafujii.com/stylespa/imagemaking/petite2.html

http://www.fashion-411.com/Petite_size_Clothing.htm


http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,,HGTV_3201_1389163,00.html






http://www.fashion-411.com/Petite_size_Clothing.htm


http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,,HGTV_3201_1389163,00.html




Documents

En Cima Technical Study