Definition/Purpose of an Industrial Feasibility Study

A feasibility study is defined as an evaluation or analysis of the potential impact of a proposed project or program. A feasibility study is conducted to assist decisionmakers in determining whether or not to implement a particular project or program. The feasibility study is based on extensive research on both the current practices and the proposed project/program and its impact on the Industrial operations. The feasibility study will contain extensive data related to financial and operational impact and will include advantages and disadvantages of both the current situation and the proposed plan. The feasibility study is conducted to assist the decision-makers in making the decision that will be in the best interest of the industry s operations. The extensive Research conducted in a non-biased manner, will provide data upon which to base a decision.

Components of a Feasibility Study for a

1. Executive Summary
An executive summary should be included at the beginning of the report. In 2-3 pages, the main points of the feasibility study are summarized for a quick review by the directors and mangers of the industry. The executive summary provides the reader with an overview of the feasibility study and will help them see the entire picture before they read the details. Some decision-makers may only read the executive summary. Thus, the executive summary should be concise and include the major findings of the study followed by a recommendation.

Background Information
Some background or setting information is critical to provide the context of the feasibility study. Included in the background information: y Summary of the industries including such information as the number of Industries, number of potential buyers of the product, number of industries competitors in the area. y Summary of the industry s product including the types of the product (in case of food industry, the total manufacturing product like fast food) and any special features of the products. Mission of the industry s production Goals of the industry s production Trends in the industrial environment. Trends that will be most important relate to recent and projected growth trends in the industrial operations, labor availability,

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financial status of the industry, etc. There are economies of scale to be realized and building and equipment costs can be reduced by taking right decisions on the right time. Acceptance of a change in style of preparation and service is an important consideration.

Proposed Industrys Descriptions

Perhaps the largest portion of the feasibility study will be used to describe the proposed Industry s description. There are many components that should be included, and industry s staffs need to be involved in many of the discussions about the new operations. The following information needs to be included:

y Description of the Operations.

There is a need for many discussions about what characteristics will be needed from the proposed Industrial operations. Basic to these discussions is decisions about the Products. For any food industry systems, the product drives almost every decision related to the system: purchasing, storage space required (including the proportion of storage space required for dry, refrigerated, and frozen items), equipment, safety and sanitation, and service. An extensive discussion about the menu, its impact on the foodservice system, and considerations required. A listing of proposed product/items should be included. A description of the processes of the industrial operation is included in the feasibility study. That includes decisions about whether to use bulk or pre-plate and whether to transport food hot or chilled. These decisions will impact subsequent decisions related to equipment, staffing, food safety controls, and transportation. y Advantages and Disadvantages of the Proposed System.

The advantages and disadvantages of the proposed food industry system need to be clearly explained in the feasibility study. Not only should the potential gains be discussed, but decision-makers need to know possible disadvantages of the system. It is better to have the potential disadvantages described so that there will be no big surprises when the new system is in operation. Also, it will help the decision-makers determine if there are characteristics/outcomes of the new system that they will not be able to accept; thus, helping them make decisions to modify the system before it is too late. Knowing the potential disadvantages also help the decision-makers to be realistic and determine ahead of time what they are willing to accept. y Staffing.

A description of the staffing requirements includes the number, hours, and positions of employees needed at the industry and at the various other locations. The need for highly skilled employees, for example, chefs, bakers, or food scientists, should be mentioned. An estimate of the total labor hours and cost should be included and will

provide comparison numbers for the existing system. To a point, industry may be added with no staffing increases at the operations. Those break points need to be mentioned in the feasibility study.

Space Requirements.

The space requirements for the industry included in the feasibility study. That will provide the basis for space cost comparisons, particularly for determining costs for constructing a new building. y Equipment Needs and Costs.

A list of equipment required for the industry is included. Cost estimates for the equipment is needed to provide realistic cost estimates for the project. y Computer Software Requirements.

The various functions required for computerization are listed. In industry s operations, computers are used for a variety of functions such as inventory control, ordering, production planning, and data management. y Site Possibilities.

The feasibility study should provide one or two recommended sites. The cost of the site is included. Also, the rationale for the site selected should be discussed, particularly transportation logistics. It is preferable for the site to be centrally located among the schools in the district. It also needs to be accessible to tractor/trailers making deliveries. The dock location is an important consideration. There will need to be adequate space for tractor/trailers to maneuver to and from the dock.

Comparison of Current and Proposed Systems

A comparison of the current and the proposed food industry needs to be included. Comparisons are needed for staffing numbers/hours, staffing costs, food costs, equipment costs, building costs, and total costs. A discussion of building and equipment costs needed in the next ten years for the current system needs to be included. For example, if there were several new plants being built, what would be the cost of building and equipment? Are renovations needed for existing industry? Is there a need to replace or add equipment at any of the operation area? Pro forma income statements are needed for the current system and for the proposed system. This includes realistic projections for both revenue and expenses. Financial projections would be extended for multiple years, often 10 years, so that the long-term financial impact can be estimated for both alternatives.

Project Schedule
A best guess schedule for the project would be included as part of the feasibility study. Realistic dates for each phase of the project would be included; however, there often are delays during implementation of a project, particularly one with a major construction component. An example of some of the tasks included in the project schedule or timeline are: y Review of the feasibility study by the Industry s director to ensure familiarity with the study, all aspects of the study accurately represent the current food making operation, and the final recommendation is appropriate for the Briefing of industry s administrators, including the district school foodservice director (or the director may opt to review the feasibility study prior to the briefing of the administrators) Briefing of industry s board members Approval of industry s board to proceed with architectural/engineering services Submission to the State Department of Education for project approval Develop a project team Identify a lead consultant for the project Prepare schematic design Prepare design drawings Obtain construction cost estimates Review design with city/county planning and zoning officials Consult with city/county health department about design/plans Start construction documents Complete construction documents Submit construction documents to State Department of Education, requesting permission to advertise for bids Advertise for bids Open bids Submit resolution to school board for final authorization for construction Begin construction Begin operational planning Start-up for new food production facility On-going evaluation process

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The project team will be meeting on an on-going basis throughout the project to discuss various aspects of the project. In addition, the industry s director will have an operations team assembled to work on implementation aspects, such as developing systems for computerization, purchasing, food

production, food safety, employee training, and distribution. Many of the operational forms and standardized recipes will need to be reviewed and modified for the new system.

Final Recommendation
A final recommendation is provided in the feasibility study based on the research conducted. This recommendation includes the rationale for the recommendation and financial evidence that supports the recommendation.

Proposed Outline for a Feasibility Study

1. Executive Summary 2. Background Information 3. Proposed Centralized Foodservice System a. b. c. d. e. f. g. h. Description of the System Advantages and Disadvantages of the Proposed System Staffing Space Requirements Basic Layout of the Central Kitchen and Satellite Kitchens Equipment Needs and Costs Computer Software Requirements Site Possibilities

4. Comparison of Current and Proposed Systems 5. Project Schedule 6. Final Recommendation