Furntec Costing Tool

The Furntec Costing Tool is the internal financial backbone of the Furntec.in platform — a MSSQL-backed application that models true product cost across material, labour, finish, and logistics for every SKU, tier, and CM partner in the national contract manufacturing network.

Unlike the customer-facing Pricing Engine (which applies margin and presents sell price), the Costing Tool is used by Category Managers, the Platform Head, and finance to maintain live CM cost inputs, validate BOM accuracy, and ensure margin discipline before any price is published to customers or B2B trade accounts.

Strategic objective: Enable Furntec to scale from 3–4 anchor CMs in Year 1 to 32–40 CMs nationally by Year 5 without margin erosion — because every CM cost change is captured systematically, not in spreadsheets.

Year 1 investment: Rs. 18–24 Lakhs (within the Rs. 1.2 Cr Technology & Platform budget). ROI: protects 35–40% gross margin on Rs. 34 Cr Year 1 revenue — equivalent to Rs. 2.4–3.4 Cr gross profit protected.

Core functions: (a) CM cost input management — material rates per board brand, laminate batch, hardware SKU, labour hour rates per CM and product line; (b) BOM template library — declared component breakdown per product × tier; (c) Cost simulation — input dimensions + tier + brands → material + labour + finish + logistics breakdown; (d) Margin guardrails — alert when sell price falls below tier minimum margin; (e) CM comparison — side-by-side cost from Polishmen vs secondary CMs for same SKU.

Users: Category Manager (Furniture), Category Manager (Doors & Frames), Platform & Ecommerce Head, Accounts & Finance (2), CEO (dashboard view). Total 5–6 power users in Year 1; 12–15 by Year 3 with regional CM auditors.

Data sources: Polishmen Woodcrafts (40% Bhasvat stake) live cost data; Balaji Doors & Decors supply agreements; secondary CM onboarding cost sheets; market index for board and laminate price movements (Century, Greenply, Merino published rates).

Integration: Feeds the Pricing Engine via shared BOM and cost tables in MSSQL. Costing updates trigger pricing recalculation queue — no manual re-entry of sell prices across 200+ SKUs.

The Costing Tool is not a revenue product — it is a margin protection and operational efficiency tool. Its revenue is measured as avoided margin leakage and reduced quote turnaround time.

Development cost (Year 1): Rs. 12 Lakhs — 1 backend developer (6 months contract), MSSQL schema + API, admin UI, CM cost input forms, BOM editor. Ongoing: Rs. 6 Lakhs/year maintenance and CM onboarding tooling.

Operational savings: Manual BOM-to-cost calculation (Phase 1 WhatsApp quotes) takes 45–90 minutes per complex furniture quote. Costing Tool reduces internal cost validation to under 5 minutes — saving 35+ inside sales hours/month at scale.

Margin protection: Tier margin bands (Essential 28–35%, Premium 35–44%, Signature 45–55%, Bespoke 55–65%) enforced automatically. Estimated margin leakage prevention: 1.5–2.5% of revenue = Rs. 51–85 Lakhs on Year 1 Rs. 34 Cr target.

Database: Microsoft SQL Server — Azure SQL Database (recommended for Hostinger VPS integration) or SQL Server on Hostinger VPS Business plan. Tables: cm_cost_inputs, bom_templates, material_tiers, input_brands, products, cost_audit_log.

Application layer: Next.js API routes (/api/costing/calculate) with mssql Node driver. Admin dashboard (Phase 2) — React pages behind B2B admin login. Role-based access: Category Managers edit BOMs; Finance approves cost publishes; CEO read-only MIS.

Hosting: Hostinger VPS KVM 2 or higher — Node.js 20+, SQL Server Express or Azure SQL connection. Static marketing pages can use Hostinger CDN; API and MSSQL on same VPS or Azure for reliability.

Security: Cost data is proprietary — CM rates never exposed to customer-facing APIs. Separate DB credentials for costing admin vs public pricing API. Audit log on every cost input change with user, timestamp, old/new value.

Month 1–2 (Phase 1): MSSQL schema deployment; seed BOM templates for first 40 furniture SKUs and 4 door types; manual CM cost input for Polishmen and Balaji; Excel import utility for bulk cost updates.

Month 3–6 (Phase 2): Admin UI for Category Managers; margin alert system; CM cost comparison view; API integration with Pricing Engine — cost publish triggers price recalc.

Month 7–12 (Phase 3): Secondary CM onboarding workflow; quarterly cost audit reports; demand-weighted average cost across CM network; IPO-grade cost documentation export for DRHP.

Year 2+: Regional CM auditor mobile app for on-site cost verification; ERP integration (Odoo) for material purchase actuals vs BOM standard cost variance analysis.

Cost input freshness: 100% of active SKUs with CM cost data updated within 30 days of material price change.

Margin compliance: 98%+ of published sell prices within tier margin band — zero exceptions without CEO approval logged.

Quote validation time: Internal cost check under 5 minutes per configuration (vs 45+ minutes manual).

CM cost variance: Track actual CM invoice vs BOM standard cost — target variance under 3% by Month 12.

BOM accuracy: Customer complaint rate attributable to wrong material specification under 0.5% of orders.

Risk: CM cost data stale — prices based on outdated material rates. Mitigation: Monthly cost review calendar owned by Category Managers; automated alerts when board/laminate index moves >5%.

Risk: Related-party cost bias (Polishmen/Balaji as anchor CMs). Mitigation: Arm's-length pricing in supply agreements; independent cost benchmark from secondary CMs from Month 6; disclosed in IPO DRHP.

Risk: Spreadsheet fallback if tool adoption fails. Mitigation: Mandate all quotes through system from Month 3; Inside Sales cannot release quote PDF without system-generated cost validation stamp.

Risk: MSSQL hosting complexity on Hostinger. Mitigation: Azure SQL as primary DB with Hostinger VPS for Next.js app — standard enterprise pattern; daily automated backups.

Year 1: Investment Rs. 18 Lakhs · Margin protected Rs. 51–85 Lakhs · Net value Rs. 33–67 Lakhs

Year 2: Investment Rs. 8 Lakhs · Revenue supported Rs. 90 Cr · Margin protected Rs. 1.35–2.25 Cr

Year 3: Investment Rs. 10 Lakhs · Revenue supported Rs. 200 Cr · CM network 12–16 · Cost variance target <2%

Year 4–5: Maintenance Rs. 12 Lakhs/year · Revenue supported Rs. 375–550 Cr · Full national CM cost intelligence · IPO-grade audit trail

Conclusion: The Costing Tool is a non-negotiable internal platform component. Without it, Furntec cannot maintain material transparency credibility (declared BOM must match actual cost structure) or scale the CM network without margin collapse.