PROJECT SELECTION

PROJECT IDENTIFICATION Determination of Need Project is a response to perceived needs. Need may relate to the inadequacy of the existing system or desire to exploit the opportunity. Source of idea generation Informal way: from employees, competitors, customers, suppliers or other stake holders, Formal way: Brainstorming, strategic planning and opportunity study Brain storming: It is a useful tool to identify probable needs in quick time. It is performed by a cross-functional team following set procedures. Strategic planning: It is a process of accessingo What we are (current state)? o What we want to be (desired state)? o How we are going to be there. During this process, it generates a number of strategies. These strategies are generally implemented through projects. Thus, strategic planning is a useful source of generating projects. Opportunity study

An opportunity study is undertaken to identify an investment opportunity to convert available natural resource and other factors of production at a place into goods or services of economic value. PROJECT INITIATION Ideas are further explored and refined and it takes a form when it is defined in concise form, what we want to do, and why? Next, a project is initiated and submitted to the competent authority for approval. The project contains the following: Description: A short text name that describes the project.

Scope: The scope of a project identifies its work content and product and outcomes. This describes what will or will not be done during the project. It establishes the necessary boundary. Benefits: Tangible benefits-cost reduction, revenue growth, market share, return on investment and intangible benefits like employee turnover, employee satisfaction or regulatory/legal compliance. Project cost Project duration Project barriers: o Location o First time, no experience o Timing of implementation (rainy season, severe winter, etc.)

On approval, the project is taken up for further processing. PRE-FEASIBILITY (PF) STUDY Primary objective of PF study is to shortlist potential good projects and weed out the rest based on technical as well financial consideration. Pre-Feasibility study should include: Definition of the scope what we want to do and why? Description of market: estimate of consumption, trend, present supply price etc. An outline of manufacturing process and availability of main production factors, primarily raw materials. An estimate of necessary investment and cost of operation. An estimate of profit. Statement of major problems.

Estimate of various parameters in this phase may be based on historical figures with adjustment for escalation and local factors. Inputs from consultant and experts are also a useful source. The proposal is evaluated by those likely to be impacted by the project and the sponsor. Pre-feasibility report is accepted as per laid down procedure both in private and government organisations. Once the pre-feasibility study is cleared, feasibility study is undertaken.