Managing a Quarry in Nigeria (A Case Study)

Introduction
This report will consist of an in-depth description of how Crushed Stone Industries Ltd shall run its
quarries. According to the scope of work in the contract between our two firms this report shall cover the
following
I.
Strategic Audit of the existing structure and performance
II.
Recommendation of organizational configuration, strategic resourcing to achieve maximum stone
output and sales efficiency
III.
Stone customer attitude survey and marketing strategy
IV.
Material control in respect to physical control, transit, sales control and community relations
V.
Determination of basic production costs of both quarries as a parameter of quarry efficiency
comparison and market price determination and fluctuation.
Based on the above checklist this report will begin with a description of the methodology of the initial
research; that is the methods used to collect the data and analyze the data. Given the research we would
then show our findings given the current situation at the quarries. We would then assess this situation and
make recommendations as to how to run the quarries in such a way that waste is minimized and profit
maximized. These recommendations would be discussed in this order. First we would discuss how best to
organize the quarry, then we would discuss how best to manage the holistic quarry business process.
Having done this we would then discuss the major competences (departments) responsible for that quarry
business process. These competences include Commercial, Operations, Marketing, and Administrative
functions. Please note that through the course of this report we would discuss price determination,
breakeven volume and sales and payback period of the initial Amasiri quarry investment in their
appropriate sections. Finally we would discuss the reasons why the name of the quarries has to be
changed. After which we would then conclude; reiterating everything that has been discussed

DescriptionoftheMethodologyoftheinitialresearch
OPSM commenced to audit the existing organizational structure by conducting interviews with the
departmental heads at the quarry and found the following issues
Engineering Issues
I.
No clearly defined storage area
II.
No form of Material stocking plan
III.
No Stone blasting survey plan
IV.
Monthly measurement plan of material stock necessary to cross check quarry production report
V.
Quality assurance tests necessary for potential clients
Commercial Issues
I.
Timely payment of salaries necessary
II.
Personal protective gear necessary
III.
Additional staff necessary
IV.
Planned and organized bulk purchase of consumables
V.
Petty cash adequate to run hitch free necessary
Administrative issues
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I.
Community staff in excess of 20%; which may create industrial action
II.
Additional staff necessary
III.
Administrative difficulty in getting spare parts, good quality fuel, and petty cash
IV.
Adequate articulation of HSE need of the staff necessary
Marketing Issues
I.
Absence of a Marketing department.
Having found these issues we would subsequently endeavor to recommend the following changes.

OrganizationoftheQuarry
Each quarry shall own an organizational structure providing the competences as prescribed here. A quarry
manager shall report to the managing director. The quarry shall maintain technical cooperation contract
with the Swedish Quarry Equipment supply company. This shall be in place till the Quarry staff acquires
enough competence to operate the quarry unassisted. The Quarries shall have a head office liaison staff
responsible for the acquisition and transportation of cash and supplies to the Quarries and obtaining of all
control reports and resource orders of the various departments at the Quarries.
The following basic competences are needed to manage a quarry;
I.

Operations competence

II.

Commercial competence

III.

Marketing competence

IV.

Administrative competence

The competences shall be managed in such a manner that strategic resources are made available to the
Quarry just in time to minimize idle time of key equipment. Produced stock are made to meet actual
market demand or tailored to meet the Quarrys market share. Produced quantities are compared and
variance checked with sales and materials in stock. Very strict accountability with all strategic resources
made available to quarry site. As much as possible a strategic business unit accounting is submitted to the
managing director monthly to highlight the state of the investment. Staffing to march the herein shown
organization (see Fig 1) shall best fulfill those competences.

It must be emphasized that the strength of the organization is dependent on the ability of the role
functions to communicate efficiently internally to provide operational strategic resources, critical
information and effective control system to indicate when these flows have been flawed. The various
functions shall communicate effectively externally to source resource, provide legislative operational
compliance, harmonize commercial claim of economic participation and sell the product economically.


Providing and motivating the team that shall do this profitably shall be the job description of the Quarry
manager.

Fig 1
MifeMgmt
Quarry
Manager

Commercial
manager

Storekeeper

Purchaser

HeadOffice
Liaison

Consultants

Operations
Manager

Marketing
Manager

Mechanical
Supervisor

CLO
Sales
Supervisor

Blasting
Supervisor

StockAudit

Crushing
Engineer

Sales
Accounting

Transport
Supervisor

wages

Quality
Assurance
Supervisor

AdminManager

Personnel
Prod/Demand
Quantity
Supervisor

WeighBridge/
Delivery
Supervisor

Mines
Ministry
Liaison

LGALiaison

QuarryProcessManagement
The Quarry manager shall manage three primary competences namely commercial, operational, and
Marketing. The main activity driving force shall be provided by the commercial. The commercial; using
existing investment resource, running cost resource and quarry generated resource should provide
strategic resources needed to run the quarry and sell its products. The quarry manager shall therefore
supervise an unhindered flow of strategic resources from the commercial department to the operations and
marketing department. Such fund flows must ensure profit and timely return on investment. To attract
strategic resource; the marketing and operations department must provide a periodic (weekly) activity
plan and resource demand corresponding to the planned activity. Such a demand schedule and plan must
minimize the idle time of equipment on site and ensure timely payment of subcontractors, suppliers and
personnel wages; these are critical motivational factors that ensure loyalty and must never be trivialized.
3


The commercial must install control checks to ensure the productive use of her resources. Hence the
commercial department must monitor and check the variance between equipment recorded production
and actual material stock and subsequently between actual material stock and actual material sold.
Physical survey check of stockpiles done weekly shall assist in these checks, weighbridge recording need
to be computerized to check actual movement of crushed stone moved out of quarry site.
Fig 2

Fig 2 which indicates the Quarry Business Model describes the running of the quarry. The operations
competence shall ensure continuous quarrying of marketable products. The marketable product sizes shall
be prescribed by the marketing competence, while also ensuring the sale of the quarried product
profitably. The commercial competence shall ensure adequate resource flows; she shall account and
advice investor of the periodic return of investment. The commercial department must provide accurate
accounting of fund flows and advise management of the monthly quantity of crushed stone and monthly
sales amount to measure monthly profitability of operations; i.e. the amount produced and subsequently
sold must exceed the monthly breakeven volume.
The following weekly plans need to be provided by;
Marketing to commercial
I.
II.
III.

Production sizes and quantity

Marketing effort budget and plan
Details of sales (quantities, Amount, Credit sales status)

Operations to Commercial
I.
II.
III.

Resource demand list (fuel, oil and consumables, spares and cash)
Production reports (Quantities and types)
Equipment status report

The following weekly/monthly control reports also have to be provided by;

Commercial to Quarry manager to MIFE management
I.

Monthly production quantities

II.

Monthly unit production prices

III.

Monthly sales amount

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IV.

Monthly per SBU profit/loss accounting

Commercial reports with regards to Marketing

I.
II.
III.

Variance check on weighbridge Vs sales waybill

Stockpile quantity Vs Sales Quantity
Sales Quantity Vs waybill quantity

Commercial reports with regards to Operations

I.
II.

Compare fuel usage per ton of crushed stone

Compare explosives usage per ton of crushed stone

III.

Equipment Idle time reports

IV.

Variance check on stone stock reports

These planning and control checks help to monitor efficiency and must be taken seriously.

CommercialCompetence
The commercial competence shall be the main driving force of the enterprise. She shall be prompt in
providing operating strategic resource to the various departments. She shall demand that these resources
be demanded for by the various departments in advance to enable her provide them just-in-time to
minimize equipment and worker idle time, and subsequently account for the profitable use of these
resources. She shall periodically inform MIFE management of the financial health of the enterprise.
Fig 4

The above Fig 4 describes the two arms of the commercial department namely production resource
planning and execution and product sales and accounting. The Marketing provides the production
resource plan and in collaboration with operations produce a weekly budget. The commercial competence


insures the timely execution of the resource order plan. She monitors the use of and transit security of
these resources to ensure their application to economic operations of quarry.
The commercial competences plans and manages the stock of material produced from the blasting and
crushing activities. The commercial department shall periodically undertake a product pricing process to
determine the operating product price and advise the marketing department. Major environmental
pressure that induce price changes are increased community demands, industrial relations pressures and
wage changes, increase in fuel prices but not limited to these. Table 1 and 2 show the formulary typically
used to determine the price of producing stone in Amasiri and Lekwesi respectively.
Table 1
Note that the sum of the figures marked yellow is Variable costs and the sum of those marked Red are the
fixed costs in table 1; see below
Amasiri production rate (tonnes)
Daily Output

962

Monthly Output

25000

Annual Output

300000

Description

BeneficiaryAuthority

AmountPayablePerAnnum costpertonne

A LandAcquisition
AnnualRental

AmasiriCommunity

ChristmasGifts
EconomicCrop

286,000.00
ToImmediateLandLord

DisturbanceAllowance

1,000,000.00
100,000.00

Indigenetraining
IndigeneScholarship

750,000.00

50,000.00
reviewed

1,000,000.00

Chippingallocation

340,000.00

Roadmaintenance

250,000.00

townadminfees

250,000.00

traditionalruler

250,000.00

HomagetoEze

100,000.00

Communitytransformers

5,000,000.00

DrinkingWater

3,000,000.00

AmasiriYouth

500,000.00

Initiatorscost

2,000,000.00

total

14,876,000.00

adjustforutilisationyear2008(5/4)
AnnualCostofcommunityDemands(5/4oftotal)

1.25
18,595,000.00

61.98

91,500.00

0.31

Royalties
mines/power

licence(61haX1500)

royalty(amtpertonne)

8.00

cost

1,500,000.00

5.00

Transportunion

1500per30tonnetrip

50.00

Community

500per30tonnetrip

16.67
141.96

Equipment

Amount

DailyRate

Crusher

109,522.50

Dumpers

42,240.00

Excavators

25,340.00

wheelloaders

8,450.00

bulldozersD8

13,520.00

rockdrillingmachine

9,500.00

generator

1,550.00

weighbridge

2,960.00
213,082.50

221.50

(18%oftotal)

38,354.85

39.87

1700

181,900.00

189.09

total
equipmentmaintenance
DailyDiesel

450.45
C

Production

monthlyrate

costpertonne

wages

2513872

100.55

Explosives

3000000

120.00

D Expatriate

Salary($)

Manager

Salary(Naira)
12000

WorkshopSupervisor

5000

total
Runningcost

1848000
770000
2618000

(50%oftotal)

1309000
3927000

157.08

Consulting
Expatriate
Add30%

108000

17712000
5313600
23025600

76.75

Totalcostpertonne

1,046.80

AddOverhead98%

1,025.86
2,072.66

Add20%tradingdiscount

414.53
2,487.19

Add20%Profit
SellingPrice

497.44
2,984.63

Table 2
Note that the sum of the figures marked yellow is Variable costs and the sum of those marked Red are the
fixed costs in table 2; see below
Lekwesiproductionrate(tonnes)
DailyOutput
MonthlyOutput
AnnualOutput

Description

LandAcquisition
AnnualRental

385
10000
120000

BeneficiaryAuthority
Community

ChristmasGifts
EconomicCrop

ToImmediateLandLord

DisturbanceAllowance
Indigenetraining
IndigeneScholarship

AmountPayable
PerAnnum
(lekwesi)

AmountPayable
PerAnnum
(Amata)

338,000.00

1,000,000.00

1,057,000.00

776,600.00

107,000.00

200,000.00

63,425.00

120,000.00

costpertonne

50,000.00
reviewed

500,000.00

Chippingallocation

200,000.00
700,000.00

Roadmaintenance

280,000.00

culvets

300,000.00

townadminfees

300,000.00
300,000.00

watersupply

1,000,000.00

traditionalruler
HomagetoEze

200,000.00
2,000,000.00

Communitytransformers/Electricity
Youth

100,000.00

150,000.00

womenEntitlement

200,000.00

200,000.00

3,995,425.00

6,246,600.00

christainfellowship

100,000.00

total

10,242,025.00

Sumofbothcommunities

85.35

Royalties
mines/power

licence

0.11

royalty(amtpertonne)

8.00

cost

1,000,000.00

8.33

Transportunion

1500per30tonnetrip

50.00

youth

200per30tonnetrip

6.67

158.46

Equipment

Amount

Crusher

DailyRate
1

20,000.00

Dumpers

21,120.00

Excavators

12,670.00

wheelloaders

8,450.00

bulldozersD8

13,520.00

rockdrillingmachine

4,750.00

generator

1,550.00

weighbridge

2,960.00

total

85,020.00

220.83

165,850.00

430.78

39.74

equipmentmaintenance
DailyDiesel

1550

691.35
C

Production

costpertonne

wages

50.00

Explosives

40.00

Expatriate

Salary($)

Salary(Naira)
785,400

Totalcostpertonne
AddOverhead98%

78.54
1,018.35
997.98
2,016.33

Add20%tradingdiscount

403.27
2,419.60

Add20%Profit
SellingPrice

483.92
2,903.52

The commercial competence shall make the sales accounting, operational accounting, variance checks
and audit on all financial and stock returns made to it by the marketing and operations departments. Most
importantly the commercial department shall make a monthly SBU profit & loss account to inform MIFE
management of the state of each of the quarries. The pace and operations tempo of the quarry shall be
driven by a report and accountability demanding commercial department. She must not fail to provide
strategic resource as at when due and must make every other competence to account for these resources
and the use of their time.
9

The commercial competence shall also monitor the Administrative Competence of the quarry
operations. The administrative competence shall provide the industrial relation and personnel relations of
the quarry. In view of community demands and anxiety to obtain gainful employment the community
relations plan has to put in place to minimize the interference of community politics in the industrial
relation plan of the quarry. Notwithstanding what the community agreement specifies, it may be
important not to exceed 20-25% of community labor engagement, minimize the engagement of
community employees in critical and sensitive roles, except their loyalty has been tested. Core MIFE staff
shall be engaged in sensitive and critical functions. A condition of service has to be put in place to
facilitate this.

The administrative competence has to provide handle to manage legislative compliance with the federal
ministry of mines and power, the local government, the immigration service in respect of expatriate staff,
the community; chief and youth organizations, in view of the community non-acceptance of the quarry
acquisition facilitator he may be only employed for legislative compliance functions. The quarry manager
shall minimize his representation of the company with his community.
Fig 5

The Personnel Competence shall closely monitor the composition of staff between core staff and
community employee. All cases of doubt shall be referred to management. The personnel competence
must ensure timely payment of salaries and faithful operation of the conditions of service.

In view of operation pressures generated by the legislative and community it is important to install
experienced role persons to fulfill these functions. Fig 5 shows the role functions to provide these
important functions. The functions crafted professionally to minimize expenses and obtain industrial
peace. The history of quarry owners experience in the region makes it extremely important to take extra
time to maintain and monitor the management of environmental relationship with government, unions and
communities. The communities are volatile and difficult to control when sensitized. Having the facts in
consideration, effects to exclude operations from the community may be necessary. At the earliest
10


availability of resources, the quarry premises shall be fenced, offices and residence provided to remove
particularly the expatriate from residence within the community. Sales to private small stock customers
discouraged and the secondary community sales spots around the quarry around the region shall be
discouraged. For these markets provide outlet for illegally obtained products from either the quarry or the
major buyers or both.

The personnel competence shall take generally the health, safety and environment need of the staff
particularly as it affects water supply, protective, issuance of health specified milk. Also a source of
health care delivery has to be provided n consideration of the rural environment.

OPERATIONSCOMPETENCE
The operation of the quarry is basically keeping operational a set of electro mechanical equipments. Five
activities produce crushed stone from the naturally occurring rock namely; Blasting, Transportation of
both rock and crushed rock and storage of graded stones. The quarrying equipment of Amasiri has the
advantage of being mobile. Its location has to be placed to minimize the distance between crushing and
storage. The obvious reason of such minimization is fuel efficiency and reduction in the depreciation of
mobile equipment. The quarry manager must take this into consideration at all times.

To hold quarry site free of disturbance, the commercial and administrative competence shall insure that
the legislative requirement to store and use explosives are complied with. Royalties are paid to the
ministry of mines and power for crushed stone, quarry license/lease is obtained and kept renewed in
respect of leased area, local government duties and toll paid. They shall insure that the renewed
commercial agreement, also intelligence has to be acquired and maintained to take action before any
grudge within the community could disrupt peaceful quarrying activity. Seasonal quality assurance and
control test have to be taken in inform prospective clients of the quality strength and grade of products,
additional test have to be taken if the face of blast indicate change in color or strength of stone.

The blasting competence shall produce a blasting planned contour to minimizing pitting and water
pumping during the raining season. The blasting competence shall keep her rock drilling machines
maintained and an economic stock of drilling bits and blasting explosives. The transportation and
crushing competence require continuous supply of diesel and her minimum re-order quantity shall be the
consumption for the maximum re-order time plus at least 20% to ensure that there is no storage on site.
The operations competence shall work and order consumables, lubricants, oil seals, filters and belts to

11


meet her quarterly need to avoid local purchase and embarrassing shortages. Spare parts for specialized
dumper, caterpillar and crusher equipment shall have a clearly defined order plan. A highly functional
workshop complete with qualified mechanics is necessary to keep the equipments functional. The
operations competence shall produce a weekly idle equipment list to sensitize management of the efficient
running of equipments.
Fig 6

Alternate electrical generating sets need to be installed to provide the electric power need of the quarry.
The efficiency of the quarry is proportional to continuity of operations. The operations competence shall
obtain from the marketing competence the market demand quantity and grading to ensure that customers
need are met and sizes are not produced which are not in high demand in the market.
The electrical engineer shall keep a personal computer duly customized with appropriate software to
monitor the performance of crusher equipment. This is important to minimize dependence on overseas
manufacturers and to train the electrical engineer to be able to operate without the consultant when his
current contract expires.

MARKETINGCOMPETENCE
The marketing competence consists of product positioning, marketing effort and customer loyalty; the
marketing manger shall insure regular and periodic quality control efforts, which shall involve complete
aggregate testing for flakiness, strength, grading. The marketing department shall willingly give copies of
this test to major customers.
12

The marketing department owns the responsibility to obtain and keep accurate control of quantity of
material in stock. They shall issue weekly order of material to be crushed informed by either the customer
demand or anticipated market demand. The marketing department shall manage store grades that are not
moving the market. In collaboration with the operations department the marketing competence shall
provide the weekly production order quantity to the operations department. Fig 7 described the marketing
competence.
Fig 7

In view of the high production capacity of the installed quarry, a very aggressive marketing strategy needs
to be employed. Some of the marketing efforts necessary for the different clients are described here. The
marketing efforts shall specify different demand quantities, pricing, promotion and subsequent placement
for various clients. At commencement the place of all purchases shall be at quarry. As the market
develops, major cities high demands and greater market demand shall have own sales depots with
corresponding appropriate marketing effort. This shall be the second phase of the quarry development.
Marketing efforts shall be differentiated for the following client types
1. Stone Retailers

13


Identified stone retailers shall make a deposit of N5,000,000, and attract a discount of 5%
provided that they complete the lifting of their deposit within three months of deposit. They
shall obtain preferential loading if they produce evidence of their own ready buyers. If
within 1 year such a client makes purchase totaling over N20,000,000 they shall attract an
additional sales bonus of stones of her specified size valued at N1,000,000
2. Stones Suppliers
Stone vendors who obtain and present evidence of local purchase orders or contract to
supply product exceeding 20,000,000 may enter another contract with MIFE to have their
order met by MIFE. Products may be issued to such a supplier at the deposit in advance of
N2,000,000 without discount. When their delivery is in excess of N5,000,000 within 3
months. They may attract a discount of 5% payable in stones, when such others exceed
N20,000,000 within 1 year, they shall attract a sales bonus of stones of their specified size
valued at N1,000,000
3. Major Stone Customers
Any stone customer able to pay deposit of N15,000,000 on materials collectable within 3
months shall be regarded as a major customer. All such others shall attract a discount of
15% and shall be accompanied by specified delivery size and schedule. Any sales
concessions in excess of these shall only be granted by top management. All major
customers shall enjoy concessional preferential loading.
4. Stone Humus
The marketing department shall investigate and approach agricultural users of the quarry
humus and negotiate equitable sales prices and conditions. Such conditions shall be subject
to the periodic approval of management.
5. MIFE Construction (Internal customers)
All sales to MIFE shall attract cash sales discount of 20%. All sales shall be settled at the
end of every month. MIFE shall enjoy concessional preferential loading. All sales waybills
shall be complimented by internal monthly reconciliation between the marketing department
and the site of order. All orders shall be in writing authorized by top management.

Given all the possible products of the quarry the marketing department has to work with a quota that
indicates how much produce has to be sold so as to meet all possible costs of running the quarry; this is
called the breakeven point. Breakeven is the point at which the fixed costs are recovered from the sales of
goods but no profit is made. This is the whole point of marketing; to recover costs and subsequently make

14


profit. From our calculations and graph the annual breakeven volume; i.e. the volume that is needed to be
sold for the total fixed costs to be covered for both quarries is as follows.

Amasiri Quarry Breakeven and Payback Period.

Variablecosts
Fixedcosts
license(61haX1500)
0.31 CostofcommunityDemands 18,595,000.00
royalty(amtpertonne)
8.00 AnnualEquipment
66,481,740.00
cost
5.00 Expatriate
3,927,000.00
1500per30tonnetrip
50.00 Consulting
23,025,600.00
500per30tonnetrip
16.67
112,029,340.00
equipmentmaintenance
39.87
DailyDiesel
189.09
wages
100.55
Explosives
120.00
AddOverhead98%
1,025.86
Total
1,555.34
Annual Breakeven unit vol

Fixed cost
Unit contribution

Fixed cost
Selling Price - Variable costs
78381.45

This breakeven volume is also indicated in the graph below; it is the point at which the Annual Revenue
graph intersects the Annual Total costs Graph

15

1000000000
ANNUALFIXEDCOSTS

900000000

ANNUALTOTALCOSTS

800000000

ANNUALREVENUE

700000000
600000000
Amount
500000000

AnnualBreakevenPoint
(78,381.45;233,939,314.75)

400000000
300000000
200000000
100000000
0
0

50000

100000 150000 200000 250000 300000 350000

Quantity

The Annual breakeven sales which is the breakeven volume multiplied by the sales price (2984.63) per
tonne adds up to

Annual Breakeven sales

233,939,314.75

All in all this shows that the sale of 78381.45 tonnes of product; which is N233,939,314.75 would cover
the annual fixed costs and then the quarry would begin to make a profit from subsequent produce sold.

Another aspect that is important is the payback period of the investment; i.e. how long it will take to get
the investment back, without the profit
InitialInvestment

Costofcommunity
92,975,000.00
EquipmentxInterestrate 432,131,310.00
Salaries
26,952,600.00
552,058,910.00
Annualprofit
SellingPricexAnnualAmt
AnnualVariablecostsxAnnualAmt
AnnualFixedCost

895,387,859.18
466,602,680.36
112,029,340.00
316,755,838.83
16

Initial investment
Annual profit

=
=
=

552,058,910.00
316,755,838.80
1.74
1yr 9mths

This implies that given that the marketing department in endeavors to sale the yearly quota of 300,000
tonnes of produce this will result in an annual profit of N316,755,838.80 which will in turn pay out the
initial investment N552,058,910.00 in 1 year and 9 months.

Lekwesi Breakeven
Variablecosts
Licence
royalty(amtpertonne)
cost
1500per30tonnetrip
200per30tonnetrip
equipmentmaintenance
DailyDiesel
wages
Explosives
Overhead98%
Total
Annual Breakeven unit vol

0.11
8.00
8.33
50.00
6.67
39.74
430.78
50.00
40.00
997.98
1,631.61
=

Fixedcosts
Sumofbothcommunities
AnnualEquipment
Expatriate
Total

Fixed cost
Unit contribution

10,242,025.00
26,526,240.00
785,400.00
37,553,665.00

Fixed cost
Selling Price - Variable costs
29,525.45
17

This breakeven volume is also indicated in the graph below; it is the point at which the Annual Revenue
graph intersects the Annual Total costs Graph

400000000
ANNUALFIXEDCOSTS

350000000

ANNUALTOTALCOSTS

300000000

ANNUALREVENUE

250000000
Amount
200000000

AnnualBreakevenPoint
(29,525.45;85,727,762.98)

150000000
100000000
50000000
0
0

20000

40000

60000

80000

100000 120000 140000

Quantity

The Annual breakeven sales which is the breakeven volume multiplied by the sales price (2903.52) per
tonne adds up to

Annual Breakeven sales

85,727,762.98

All in all this shows that the sale of 29,525.45 tonnes of product; which is which is valued at N85,
727,762.98 would cover the annual fixed costs and then the quarry would begin to make a profit from
subsequent produce sold.

Customer loyalty
Since Crush Stone Industries Ltd shall be a going concern, every marketing effort shall be targeted at
maintaining customer loyalty even when dealing with internal MIFE sales. All Crush Stone Industries
sales personnel shall be courteous. Production order quantities shall be managed to ensure availability of
the appropriate demand sizes and quantity. The sales prices must be competitive; comparable to
competitors but shall be internally calculated using basic principles as per Table 1 or other parameters.
The parameters shall be adjusted as the variable alters to insure that the operations are economical.
18

Promotion
The main promotional effort necessary to capture the target market is Relationship Marketing. Our target
customers are the major stone customers who are essentially the construction companies including MIFE
Construction. Most of our customers shall be approached to retain their loyalty as herein prescribed. Their
mental reminder and consciousness have to be engaged by easily accessible corporate giftMIFE memo
pads, MIFE Calendar, MIFE Pen, e.t.c. Simple valuable gifts that are handy to use in the office and at
home would permanently remind the customer that he/she has a stone supplier to rely on. Marketing and
sales staff should be readily available to take orders just-in-time. MIFE marketing crew have to have a
relationship with all their clients so as to retain all these clients in the long-run; this would involve being
aware of their contracts and the amount of stone needed to complete those contracts. There should be
quality assurance efforts geared towards producing quality certificates that would convince clients of the
quality of offering. The marketing department should also market the public acceptability of MIFE
Construction.

ChangeofnametoMIFEQuarriesLtd
We also have suggested you to rename the company; as MIFE Quarry Industries Ltd. Our
corporate strategy for this fundamental suggestion is that the previous name draws a mental
connotation of another company. So the time has come for a bolder corporate positioning of the
MIFE Group of companies. This new corporate personality shall subsequently accommodate
other subsidiaries that will develop in the future; thereby creating a bolder corporate image that
shall help the wider market share the drive of the new MIFE construction Ltd. If our suggestion
meets your approval, please let your lawyer approach the Corporate Affairs Commission for
necessary documentation. You may wish to take this opportunity to restructure the corporate
board membership.

Conclusion
Through this report we discussed the methodology of our initial research; that is the methods used to
collect the data and analyze the data. Given the research we then showed our findings given the current
situation at the quarries. We then assessed this situation and made recommendations as to how to run the
quarries in such a way that waste is minimized and profit maximized. These recommendations were
discussed in this order. First we discussed how best to organize the quarry, then we discussed how best to
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manage the holistic quarry business process. Having done this we then discussed the major competences
(departments) responsible for that quarry business process. These competences included Commercial,
Operations, Marketing, and Administrative functions. In the marketing section we calculated the
breakeven volume and sales for both quarries and payback period of the initial Amasiri quarry
investment. Finally we discussed why the name of the quarries has to be changed. After which we then
concluded; reiterating everything that had been discussed .

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