Submitted by: Group 2

AMAN GOEL
AJINKYA SAPAKALE
GAURAV RAKHEJA
KAVITA BANKAPUR
SWATHI V
Case Write-up
EXECUTIVE SHIRTS COMPANY, INC.
OPERATIONS MANAGEMENT TERM 2


Executive Shirts Company, Inc.
1 SITUATION ANALYSIS
Executive Shirt Company (ESC), a reputable apparel manufacturer produces limited
variety of shirts in basic colours and styles in large volumes.
Owing to a recent dip in sales, the GM is contemplating to increase the product mix
of the firm and is considering developing the customer shirts business.
Customer shirts command a higher price than similar, standard shirts and also have a
longer lead time to the consumer. These factors, while add to the attractiveness of
the business, in a way deter the consumers from buying.
The retailers are showing an increasing interest in the custom shirts business which
has further increased Dwight Colliers interest in building the custom business.
With a well-established facility for manufacturing standard shirts, Dwight Collier is
trying to figure out changes/ additions to the existing process to include
manufacturing process for custom shirts. He is faced with 2 options and needs to
determine the best one to implement.
2 PROBLEM IDENTIFICATION
What is the more profitable option to follow to manufacture custom made shirts?
3 STATEMENT OF OBJECTIVES
The objectives of this analysis are the following:
To determine the better alternative to follow to manufacture custom made shirts.
4 EVALUATION CRITERIA
The suggested option should ensure the following:
The new/modified manufacturing facility should have the capacity to manufacture at
least 16000 standard and 2000 custom shirt per month.
The company should be able to satisfy the above demand while having a positive
operating margins.
The manufacturing lead time of the custom shirts should be less than 5 days.




5 GENERATION OF OPTIONS
Mr. Dwight Colliers is faced with the following 2 options suggested by his 2 colleagues.
Sl.no Category Mikes Plan Ikes Plan
1. Process Type Batch Assembly line
2. Minimum Order Serviced 5 shirts 5 shirts
3. Equipment 1. New Laser
Technology
Cutting Machine
2. All other existing
equipment
1. New Laser
Technology
Cutting Machine
2. All other existing
equipment
4. Operations 1. Separate cutting
process for custom
shirts
2. Post cutting
operations for
standard and
custom shirts is
common
1. Separate cutting
process for custom
shirts
2. 1 machine from
each post cutting
operation to be
reassigned to
custom shirt
manufacturing
exclusively and
only these
facilities to be
used.
5. Labour 1. 1 new worker for
cutting custom
shirts
2. All other workers
to work on both
custom and
standard shirts
1. 1 new worker for
cutting custom
shirts
2. 1 dedicated
worker for each
post cutting
operation;
Workers re-
assigned from the
standard shirt
production
process. Standard
process to follow
batch production
and Custom shirt
manufacturing
process to follow
assembly line



6 EVALUATION OF OPTIONS

(Please refer to Annexure I for the calculations)
Based on our analysis, we determined the following about the existing manufacturing
process.
The existing process follows a made to service batch production.
The flow unit in this case is a bin (60 shirts). For the purpose of our analysis, since bin
size is changing from existing to suggested processes, we have considered the flow
unit to be a single shirt.
Average cycle time is defined as the number of minutes it takes to produce a shirt =
20 days * 8 hours/ day * 60 minutes)/ 16000 shirts = 0.6 minutes per shirt.
Post cutting, a shirt goes through a set of 15 operations before dispatch. The
maximum time taken per shirt per worked is 0.5 minutes (cuffing process). Hence,
this process forms the process bottleneck and the cycle time of the bottleneck is 0.5
minutes.
Based on the process bottleneck, the process capacity = 20 days * 8 hours/ day * 60
* 2 = 19,200 shirts per month.
As the demand for standard shirts < process capacity, this means the current
production process is demand constrained.
The inventory(WIP) is given by total WIP*60 shirts = 11760 shirts
At process capacity, the process will need to replenish the WIP every 0.5 minutes.
Hence, the Manufacturing lead time = (WIP * 0.5 minutes) / (60*8) = 12.25 days.
Currently, the process has 83.33% utilization.
Direct labour content calculates the total labour time taken to manufacture a shirt =
26.51 minutes.
In reality, the labour is engaged for 20*8*60 minutes to produce 16000 shirts.
Hence, direct labour utilization = 26.51/ (20*8*60*64/16000) = 69.04%
The direct labour cost = 3.84$ per shirt.
Based on the above definitions, we determined the above variables for Mikes and Ikes plan
the results are summarized below:
Mikes plan
Excess process capacity is used to manufacture the custom shirts. The process
bottleneck still remains the same(manufacturing cuffs) and hence the process is still
demand constrained( capacity = 19200 shirts per month, production = 16000 +
2000(custom shirts))
Inventory = 1980 shirts and lead time = 2.063 days for both custom and standard
shirts.
Capacity utilization and labour utilization is improving to 93.75% and 76.31%
respectively without any overtime. This is resulting in a decrease in the direct labour
cost per shirt.
Capacity utilization is increasing. Sales are increasing but the costs are not increasing
so much. Hence the plan is profitable.
Ikes plan
As 1 person is re assigned from each process to manufacture standard shirts, from
the calculations, we see that maximum time per shirt per worker is now 0.667
minutes for cuffing process.
Using this, the process capacity comes to be 14400 shirts. This indicates that to meet
the demand for standard shirts, the factory has to be done overtime.
Manufacturing lead time for custom shirts is 0.4 days.
The labour utilization for custom shirt is very low ~33%.
7 RECOMMENDATION
Based on our analysis above, we recommend that Mr. Dwight Collier implement Mikes plan
for manufacturing custom shirts. This is because:
The suggested method improves the direct content of labour and capacity utilization
without requiring any overtime.
The process ensures fulfilment of the required orders (16,000 standard and 2000
custom shirts).
Manufacturing lead time is < 5 days and is faster than the standard process.
The suggested method ensures positive operating profits which are more than the
other method.






















8 ANNEXURE I

Current Process Mike's Plan Ike's Plan
Regular Shirts Reg & Cust.
Shirts
Reg.
Shirt
Cust. Shirt
Actual Cycle Time (min/shirt) 0.6 0.53 0.67 4.80
Cycle Time of Bottleneck
(min/shirt)
0.5 0.5 0.67 3.9
Manufacturing Lead Time
(days)
12.250 2.063 12.590 0.406
WIP Inventory (shirts) 11760 1980 9060 50
Production Capacity (shirts/day) 960 960 720 123
Capacity Utilization* 83.33 93.75 111.11 81.25
Direct Labor Content ( labour
min/shirt)**
26.51 26.45 26.51 26.01
Direct Labor Utilization 69.04 76.31 81.15 33.87
Direct Labor Cost ($/shirt) 3.84 3.47 3.43 7.68

Profit and Loss Current
process(Regul
ar shirts)
Mike's
plan(Regular &
Custom shirts)
Ike's
plan,
Regular
shirts)
Ike's plan,
Custom
shirts
Raw Material Cost 7 7 / 7.7
Total Cost(without overtime) 256000 272360 261160
Total Cost(with overtime) 256000 272360 290000
Wholesale price 25 25 / 35 25 35
Revenue without overtime 400000 470000 430000
Revenue with overtime 400000 470000 470000
Profits without overtime 144000 197640 168840
Profit with overtime 144000 197640 180000






Base Calculations
Current Process & Mike's Plan Ike's Plan
Standard Shirts Custom Shirts
Operation Regular
Shirt
Labor
Content
No. of
Worker
s
Indiv.
Process
Cycle
Time
No. of
Workers
Process
Cycle
Time
No. of
Work
ers
Process
Cycle
Time
(min/shir
t)
(min) (min) (min)
Cutting Time 0.25 0.25 0.5
1. Make collar 3.90 8 0.488 7 0.557 1 3.900
2. Make cuffs 2.00 4 0.500 3 0.667 1 2.000
3. Make sleeves 0.65 2 0.325 1 0.650 1 0.650
4. Make front 2.50 6 0.417 5 0.500 1 2.500
5. Make back 1.70 4 0.425 3 0.567 1 1.700
6. Join shoulders 0.66 2 0.330 1 0.660 1 0.660
7. Attach collar 1.65 4 0.413 3 0.550 1 1.650
8. Attach sleeves 1.55 4 0.388 3 0.517 1 1.550
9. Stitch down
sleeves
0.65 2 0.325 1 0.650 1 0.650
10. Sew side seam 1.80 4 0.450 3 0.600 1 1.800
11. Attach cuffs 1.55 4 0.388 3 0.517 1 1.550
12. Hem bottom 1.70 4 0.425 3 0.567 1 1.700
13. Inspect 1.50 4 0.375 3 0.500 1 1.500
14. Iron 1.95 4 0.488 3 0.650 1 1.950
15. Fold, Package 1.75 4 0.438 3 0.583 1 1.750