Case Analysis: Execuve Shirt Company, Inc.

Operaons Management - I
PGP1 Secon B
Group 4
Group Members
AMARENDRA SAHOO PGP2011533
BHAWNA GOKANI PGP2011595
CHATARKAR ANURAG MAHADE PGP2011600
C.LALRUATSANGA 2011FPM06
RUPSA CHAKRAVARTY PGP2011837
SAARANG K. MEHTA PGP2011841
UTKARSH SINGH PGP2011923
Case Analysis: Execuve Shirt Company, Inc.
Summary:
Mr. Dwight Collier, Gen. Manager of Execuve Shirt Company (ESC) is planning to introduce customized
shirts in his current producon facility since they can fetch 75% more price as compared to regular
shirts. Currently, ESC is manufacturing 16,000 shirts per month and they plan to manufacture 2,000
customized shirts per month without hampering the current producon.
The company has 5 departments, namely,
Cung: 1 Machine, 4 Workers
Sewing: 48 Machines, 48 Workers
Inspecon: 4 workers
Ironing: 4 Machines, 4 Workers
Packaging: 4 workers
Indirect Workers (material handlers) : 4 Workers
Mr. Collier introduced a change in the manufacturing process by introducing a Laser Cung Machine
for customized shirt. He requested two of his managers, Mike and Ike to devise a producon plan to
maximize the prot from both the products. The highlights of their plans are
Mikes Plan: To go with one producon line manufacturing both the products
simultaneously (other than the cung process)
o Eight Batches of regular shirts with 5 shirts each
o One batch of 5 custom shirts
Ikes Plan: To go for a separate producon line for regular and customized shirt
o Eight Batches of regular shirts with 6o shirts each
o One batch of 5 custom shirts
Fig 1. Process Flow Diagram- Current
Producon Process
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Current Producon Process
Time required for producing one unit from laying and cung operaon=120/60*8=0.25 min
Table 1.1. Current Producon Plan
Operaon Regular Shirt Labour Number of Time required for producing one unit (in

Content workers min.)
Make Collar 3.90 8 .4875
Make Cus 2.00 4 .5
Make Sleeves 0.65 2 .325
Make Front 2.50 6 .41
Make Back 1.70 4 .42
Join Shoulder 0.66 2 .33
Aach collar 1.65 4 .41
Aach sleeves 1.55 4 .39
Stch Down 0.65 2 .32
sleeves

Sew Side seam 1.80 4 .45
Aach cus 1.55 4 .39
Hem Buon 1.70 4 .42
Inspect 1.50 4 .38
Iron 1.95 4 .49
Fold Package 1.75 4 .42

From the table it is clear that cu making is the slowest process and hence the cycle me of Regular Shirt
making is equal to the me of cu making=0.5 min.
Table 1.2. Current Producon Plan

Quanty

Obtained Value



Actual Cycle Time Bole neck me Bole Neck = 30 min 0.5 per shirt
(min/shirt)

per batch



Producon Capacity Bole neck me Bole Neck = 30 min 480/0.5 =960 units
(shirts/day)

per batch



WIP Inventory Total Inventory Cung + Other 10800+960 =11760

operaons


Manufacturing Lead Input to Output WIP/producon 11760/960 =12.25
Time(days)

Capacity


Capacity Ulisaon Actual Producon : 800/960 83.33%

Producon Capacity


Direct Labour Direct Labour per unit Cung + Other 25.51+4(0.25)= 26.51
Ulisaon(min/shirt)

operaons


Direct Labour Cost Total labour cost per unit of Labour cost =64 * 8 * 6 3072/800=$ 3.84/shirt
($/shirt)
producon



Direct Labour Ulisaon Labour ulized/ Labour (800 * 69.03%

Available 26.51)/(8*60*64)


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Fig 2: Process Flow Diagram- Mikes
Plan
Mikes Producon Plan
Time required for producing one unit from laying and cung operaon=120/60*8=0.25 min whereas the cycle me
of laser cung machine is 2.5/5=0.5
Table 2.1. Mikes Producon Plan
Operaon Regular Shirt Labour Number of Time required for producing

Content workers one unit (in min.)
Make Collar 3.90 8 .4875
Make Cus 2.00 4 .5
Make Sleeves 0.65 2 .325
Make Front 2.50 6 .41
Make Back 1.70 4 .42
Join Shoulder 0.66 2 .33
Aach collar 1.65 4 .41
Aach sleeves 1.55 4 .39
Stch Down sleeves 0.65 2 .32
Sew Side seam 1.80 4 .45
Aach cus 1.55 4 .39
Hem Buon 1.70 4 .42
Inspect 1.50 4 .38
Iron 1.95 4 .49
Fold Package 1.75 4 .42

From the table it is clear that cu making is the slowest process and hence the cycle me of Mikes Shirt making
process is equal to the me of cu making=0.5 min.
Table 2.2. Mikes Producon Plan

Quanty

Obtained Value(Regular and Custom Shirts)



Actual Cycle Time

Bole neck me Bole Neck = 30 min 0.5 per shirt
(min/shirt)

per batch



Producon Capacity

Bole neck me Bole Neck =40 min 480/0.5=960 units
(shirts/day)

per batch



WIP Inventory

Total Inventory Cung + Other 1800+180 =1980


operaons


Manufacturing Lead

Input to Output WIP/producon 1980/960=12.58

Time(days)

Capacity


Capacity Ulisaon

Actual Producon : 900/960 93.75%


Producon Capacity


Direct Labour

Direct Labour per unit Cung + Other 25.51+0.5=26.01

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Ulisaon(min/shirt)

operaons


Direct Labour Cost

Total labour cost per unit of Labour cost =65* 8 * 6 3120/900=3.47

($/shirt)

producon



Direct Labour Ulisaon

Labour ulised : Labour Labour Ulised = 900 * 75.02%


Available 26.01


Fig 3: Process Flow Diagram- Ikes Plan
Regular Shirt
Custom Shirt
Ikes Producon Plan
Table 3.1. Ikes Producon Plan
A. Regular Shirt Producon
Operaon Regular Shirt Labour Content Number of workers Time required/lbr/shrt (in min)
Make Collar 3.90 7 .56
Make Cus 2.00 3 .67
Make Sleeves 0.65 1 .65
Make Front 2.50 5 .5
Make Back 1.70 3 .57
Join Shoulder 0.66 1 .66
Aach collar 1.65 3 .55
Aach sleeves 1.55 3 .52
Stch Down sleeves 0.65 1 .65
Sew Side seam 1.80 3 .6
Aach cus 1.55 3 .52
Hem Buon 1.70 3 .57
Inspect 1.50 3 .5
Iron 1.95 3 .65
Fold Package 1.75 3 .59

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Table 3.2. Ikes Producon Plan
B. Customized Shirt
Operaon CUSTOMShirt Labour Content Number of workers Time required/lbr/shrt (in min)
Make Collar 3.90 1 3.90
Make Cus 2.00 1 2.00
Make Sleeves 0.65 1 0.65
Make Front 2.50 1 2.50
Make Back 1.70 1 1.70
Join Shoulder 0.66 1 0.66
Aach collar 1.65 1 1.65
Aach sleeves 1.55 1 1.55
Stch Down sleeves 0.65 1 0.65
Sew Side seam 1.80 1 1.80
Aach cus 1.55 1 1.55
Hem Buon 1.70 1 1.70
Inspect 1.50 1 1.50
Iron 1.95 1 1.95
Fold Package 1.75 1 1.75

Table 3.3. Ikes Producon Plan

Quanty

Obtained Value(CustomShirts)



Actual Cycle Time Bole neck me Bole Neck = 3.9 min 3.9 per shirt
(min/shirt)

per shirt



Producon Capacity Bole neck me Bole Neck =3.9 min 480/3.9 =123 units
(shirts/day)

per shirt



WIP Inventory Total Inventory Cung + Other 45+5 =50

operaons


Manufacturing Lead Input to Output WIP/producon 50/123 =0.41

Time(days)

Capacity


Capacity Ulisaon Actual Producon : 100/123 81.3%


Producon Capacity


Direct Labour Direct Labour per unit Cung + Other 25.51+0.5 =26.01

Ulisaon(min/shirt)

operaons


Direct Labour Cost Total labour cost per unit of Labour cost =16* 8 * 6 768/100=7.68

($/shirt)
producon



Direct Labour Ulisaon Labour ulised : Labour Labour Ulised = 100 * 33.86%


Available 26.01


Table 4: Comparison of Mikes and Ikes Producon Plan
Quanty Current Process Mikes plan Ikes plan Ikes plan

Regular Shirts Regular & Regular Shirts Custom Shirts

Custom shirts

Actual Cycle Time(min./ shirt) 0.5 0.5 0.67 3.9
Manufacturing Lead Time ( 12.25 2.06 12.58 0.41
days)

WIP Inventory (shirts) 11760 1980 9060 50
Producon capacity 960 960 720 123
( shirts/ day)

Capacity Ulizaon 83.33% 93.75% 111.11% 81.3%
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Direct Labour content 26.51 26.01 26.51 26.01
(min/shirt)

Direct Labour ulizaon 69.03% 75.02% 90.17% 33.8%
Direct labour Cost 3.84 3.47 3.43 7.68
Table 5: Cost Comparison of Mikes and Ikes Plan
A. For Normal Shirts

Mikes plan Ikes plan
Raw materials $7.00 $7
Direct labor $3.46 $3.32
Indirect labor $.66 $.66
Other Indirect Cost $4.50 $4.50
Total manufacturing Cost $15.62 $15.48
Retail price $50 $50
Prot/shirt $34.38 $34.52

B. For Customized Shirt

Mikes plan Ikes plan
Raw materials $7.7 $7.7
Direct labor $3.46 $7.68
Indirect labor $.66 $.66
Other Indirect Cost $4.50 $4.50
Total manufacturing Cost $16.32 $20.54
Retail price $87.5 $87.5
Prot/shirt $71.18 $66.96

Conclusion: From Table 5: Cost Comparison of Mikes and Ikes Plan, we can see that the total
prot per shirt from Mikes plan is greater $4.08. Thus, Mikes plan is beer.
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