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Supply Chain Management

(Ali Abbas 2042012 MBA)

Contents
Executive Summary............................................................................................... 4
Introduction to the Company................................................................................. 5

End d to End Supply Chain Model Explained..........................................................6


Generalized Supply Chain Explained.....................................................................9
Marketing............................................................................................................ 9
Production Planning and development...............................................................9
Finance............................................................................................................... 9
Procurement..................................................................................................... 10
Storage............................................................................................................. 10
Shipping........................................................................................................... 10
Supplier Network.............................................................................................. 10
1ST Tier (Components and their Suppliers)......................................................10
2nd Tier (Deconstruction of Components)........................................................11
3rd Tier (Sources of Deconstructed components..............................................12
1st Tier Customers (Retail customers)..............................................................12
Distribution Storage Network............................................................................... 13
Value Chain Model............................................................................................... 14
Value Stream Mapping......................................................................................... 15
Order Fulfilment Mapping.................................................................................... 16
Material flow explained........................................................................................ 18
Explanation of Information Flow..........................................................................20
Inquiry stage..................................................................................................... 20
Purchasing stage.............................................................................................. 21
Material Arrival stage....................................................................................... 21
Sample Stage................................................................................................... 21
Mass Production stage...................................................................................... 22
Shipment Stage................................................................................................ 22
Cash Flow............................................................................................................ 23
Cash out flow of Indus appraisals........................................................................23
Pipe-Line Mapping................................................................................................ 25
Pre-Production Sampling steps.........................................................................25
Gap Analysis........................................................................................................ 33
Problems:................................................................................................................ 33
1)Capacity Problem:.................................................................................................. 33
Organizational Structure...................................................................................... 40
References:.......................................................................................................... 41

Executive Summary
This Project relates to the information regarding how supply chain activities are
managed in the real world. The main highlights of this project are as follows:

End to end supply chain


With this analysis, we come to know about how a final product is delivered
from the raw ingredients in different regions of the world to the end customers
far off. Indus Apparels plays one of the most vital roles by acquiring materials
from mostly Pakistan and China and giving them exactly the kind of form that

is required by the business customers to satisfy the end customers demand.


Supply chain flows
Analysis of all these flows separately has given us an in depth picture
of the complexities that this company practices every day.
Material Flow: Materials are bought after detailed calculations and
estimates of finances, time frame and capacity. All these calculations are done

after taking in to account the customer demands.


Information Flow: It has been found out that day to day updates are given
to the upper management, regarding each stage of production and purchasing
activities. Information flow of Indus Apparels is not very advanced, consisting
of only e-mail, hardcopy of reports and phone calls usage. It is the main head

office in Jordon that has a computerized system.


Cash flow: Mostly checks are used as a mean of payment and receipt. Indus
Apparels has to be in frequent terms with the bank.

The time frame and value addition process


Indus Apparels has to complete full seasons orders of multiple international
customers with high measures of quality; hence time frame is always high.

Almost 250 days are taken, give and take.


Problems and recommendations
After analysis of problems, we recommended some solution for those issues.
We suggested that they must have a supply chain department, proper
planning, advance technologies and use of KPIs.

Introduction to the Company


Indus Apparels Pvt. Ltd. is a U.S.A based company that deals in synthetics. They
conduct buying operations on behalf of their clients. They own their own denim
fabric factory and storage and conduct all operations by themselves. Hence, the
main scope of their business is apparel sourcing.

Indus apparels produce T-shirts, jackets and bottoms, especially denim jeans for
children, women and men.
The main branch of Indus Apparels is located in Jordon. Other branches are
operated in Lahore, Karachi, Faisalabad, Sialkot, Dhaka, Oman, Jordan, Ismailia
and Egypt.
Their main Clientele includes:

Under Armour
Lands End
Eddie Beures
Nautica
Cross Hatch
Hero Culture
Fedmile
Guess is approved,
And Levis
Fred Meyer

The marketing team of Indus apparels travel around the Europe and other
Countries to fetch the latest fashion trends and pick the attractive ones.
Fashion sites in such countries take place for purely this purpose. They then
make presentation of these picked trends to their clients and attempt to sell
it, their Clients, such as under armour on the other hand either buy it or add
their own inspiration. Then once the demand from the client is finalized, they
develop and send the tech pack to Indus apparels. This tech pack includes
list of all those necessary materials that they need for their desired product,
including deadline. Indus Apparels then start working on the tech pack and
frequently send samples for approval. Once every sample stage is approved,
mass production is started. This is the basic responsibility that this company
fulfils and tries to maintain sound relationship with their international clients.
The Indus Apparels Lahore is considered as a small factory. It has come to know
that on average, in Pakistan, a large factory produces around 35 to 45 thousand
pieces per day and a medium factory produces around 10 to fifteen thousand
pieces per day. Indus Apparels on the other hand produces near about eight
thousand pieces per day on average, with a maximum capacity of twelve
thousand pieces per day.

In general, this sort of a company is at least one year ahead of time in terms of
fashion trends, in order to come up with timely production according to the
seasons.

End d to End Supply Chain Model Explained


A vast network of supply chain is seen, when dealing with Indus apparels.
Because of its B2B nature, it plays a very important role of suppliers as well.
Such occurrences also take place, when Indus Apparels let their client company
and their suppliers contact with each other directly, in order to give a clear
picture to the suppliers. It has come to know that the client companies of Indus
Apparels, most of the time deliver their goods directly to the retailers, but it
still seemed important to mention the wholesalers in the end to end supply
chain model, since it is hard to ignore their role, at the same time, sometimes
they are used as distributors.
A typical denim bottom consists of the following ingredients:

Denim Fabric
Metallic Zippers
Threads
Colouring and styling (washing)
Buttons (metallic mostly)

As we can see in the end to end supply chain model, the third tier suppliers
have the raw materials in their semi primitive form mostly, Indus Apparels likes
to benefit from local suppliers of inputs more than international, although China
is also greatly considered as a second tier supplier. Denim fabrics are purely
supplied from within the Country and the most commonly used suppliers are
Hantex and Naveena Mills Pct. Ltd. , the rest of the inputs are usually sourced
by the combination of national and foreign suppliers.
Even before the second tier suppliers falls in the level of the third tier supplies
that include the necessary ingredients to produce materials for the second tier
suppliers for the denim bottoms process.

For example, a grey denim fabric

comes from combination of grey cotton warp and white or blue cotton filling. In
the same way, In order to produce denim bottoms as per demand, threads are
ordered from national and foreign suppliers, mostly, Jiyangying Elegant in China
and their favourite, YKK in Pakistan. These suppliers approach to the cotton
yarns to produce quality threads. Because Indus Apparels deals with clients of

international standards, they have to make sure that each input for the product
is of top quality and one hundred percent as demanded, that is why even
threads are sometimes imported.
After the acquiring the inputs, production is started in their own small denim
factory. Once production is complete, it is shipped as per contract to its
international clients abroad. The most active clients are in U.S.A. mostly the
states of Loss Angelus, Wisconsin, Washington, Maryland and New York. The
main clients in these areas are as follows,

Guess
Levis
Eddie Bauer
Under Armour
Nautica

Other than U.S.A, Indus apparels also serves in Australia, U.K and Canada to the
international clients such as, Dissh, Cross Hatch and Adidas, respectively.
As mentioned earlier, most of these international client companies, especially in
the U.S.A, rather opt for dealing directly with the retailers, especially those
retailers with international standards. Retailers such as Lands End in U.S.A,
LOWES in Australia and ASOS in U.K are well known. The names of the few
whole sellers that these companies keep in contact with are highly confidential.
At the end, the end customer buys these products from retailers, such as those
that are mentioned above. Just to summarise, a pictorial example is given
below:
Cotton Warps combined
Fine Metal

Naveena Mills
Foshan S.J Factory

Brass, aluminium etc..

YKK

Cotton Yarns

Jiangyin Elegant Co. Ltd

Denim Fabric
Buttons

Metallic Zippers

Threads

Denim Factory of Indus Apparels, Lahore

Levis (U.S.A)

Lands End Retail Store

End Customer

Jeans

Generalized Supply Chain Explained


The generalized supply chain model of Indus apparels is well designed with the
integrated focal firm and its relationship with the supplier and the distributive
network. We have done various meetings with the executives of Indus apparels
to understand the generalized supply chain model to make it accurately. This
model helps us understand that how the organization integrates within itself
and with its suppliers and suppliers of supplier in the upstream area and then
the relationship with the distributive network. The proper information, product,
service, financial and knowledge flow helps this model to work perfectly. The
better the model is the better the supply chain network will be. We have put
our efforts in understanding this model and then applying it in completing the
model for Indus Apparels.
Departments of marketing, production planning and development, finance,
procurement, storage and shipping coordinate with each other via information
flow.

Marketing
The Marketing department is responsible for understanding the customers and
defining the customers on the basis of clusters and then forecasting the
demand of the customers. The marketing department is also involved in the
sales of various products and pushes the sales through their retail outlets. They
create different samples according to the forecasted trend and fashion and take
them to markets to convince their retail customers to order these so that they
will provide latest fashion trends to their end customers. Once sample is
approved by the customer order is send forward to other departments so that
the manufacturing process could be started, the sooner the better.

Production Planning and development


The main purpose of this department is to extensively involve in new products
creation and conducting various researches for understanding the customers.
When an order is received by the company it is been forwarded to production
planning and planning department who takes care of the manufacturing
process.

Finance
The finance department at Indus Apparels is involved in allocating the cash
resources required for the operations and expansions Finance department is
also involved in negotiating with banks regarding LC and shipment matters for
the clearing of consignments on time and provides the company with estimates
of feasibility of various projects.

Procurement
Procurement department is deals with the purchasing activity of the inputs to
transform these into finished products or services. Procurement department
adds value by the acquisition of appropriate goods or services at the best price,
at the right time, and in the desired place with the desired quality and quantity
from different suppliers providing quality assurance.

Storage
The purpose of storage department is to store the raw material of the company
as well as the finished or work in process inventory. In Indus Appeals does
inbound storage of its inventory on temporary bases. When the lot of an order
is completed they store it until its delivery.

Shipping
Shipping department takes care of shipments of or form the company. It
manages dates and mode of shipment i.e. by road, by sea or by air. It
negotiates with its customers regarding the time, date and mode of the
shipment that need to be received or delivered.

Supplier Network
When we look at the supplier network then all the vendors get their products
from their own vendors. The communication is conventional rather than based
on the information technology. The vendors place orders to their suppliers just
with a phone call or by physically meeting with them. The different ingredients
are required by the vendors for completion of the products. The ingredients are
the also mentioned in the diagram of the generalized supply chain model. Each
ingredient

supplier

gets

the

raw

material

from

the

market

manufacturing of the ingredients further required by the vendors.

for

the

1ST Tier (Components and their Suppliers)


The 1st tier is the components and their suppliers Tier. Firstly we have given all
the major components that are being used in the production of Indus Apparels.
Lets have a glimpse on the components that we have written in the 1st tier.

Metallic Zippers
Threads
Washing acids
Buttons

In Supplier tier we have given all the major suppliers from whom purchases are
being made by Indus Apparels. Lets have a glimpse on the suppliers that we
have written in the 1st tier.
Hantex
Naveena
U.S Denim
J.p coats
YKK
Jiangyin Elegant
KK Traders
Naeem chemicals
KIMURAS
Foshan Sanshui Pvt. Ltd.
All these are major suppliers of Indus Apparels from whom different valuable
raw materials are purchased details of which will be described in the next
upcoming tiers.

2nd Tier (Deconstruction of Components)


Now moving from 1st tier to the 2nd tier in Indus Generalized model consists of
all the components that are being used by the 1st tiers major suppliers of Indus
Apparels.
The components that came in the 2nd tier are as following:

Blue/grey cotton warp


White cotton filling yarn
Brass
Aluminum
Nickel
Cotton yarns
Colour chemicals
Colour acids
Pumice

3rd Tier (Sources of Deconstructed components)


The 3rd tier in the end to end of Indus Apparels is the last tier at suppliers
side. In this 3rd tier we have given the names of the sources from which our
suppliers get their raw material. In this 3rd tier we have written this that the
suppliers get their supplies from what sources. The sources of suppliers
components mentioned in 2nd tier are;

Cotton farms
Smelting Factory
Chemicals Factory
Plastic and Metal Finishers

1st Tier Customers (Retail customers)


1st tier customers are those customers from whom we get orders. They give us
orders from the selected samples in accordance with the needs and demands of
end customers. Our 1st tier customers are mostly foreigners and are well
known and branded companies like Addidas and Under Armors. Following are
the countries from which our customers belong.

USA
UK
Canada
Australia

And through our 1st tier customers the finished product is reached to the end
customers.

Distribution Storage Network


An example of dealing with under armour is given below:
Indus Apparels
Lahore

Indus Apparels
Karachi

Oregon port

Indus Apparels
Jordon

Casco bay,
Portland

Fred Meyer Factory

Chehalis, WA

Olympia, WA

Retailers/outle
ts

Retailers/outle
ts

Retailers/outle
ts

Retailers/outle
ts

Information Flow

Distribution place

Product Flow

Shipment receive docs

Value Chain Model


Firm Infrastructure
Good reputation among suppliers, own denim factory & storage, access to best quality
inputs
Technology Development
High tech paper cutting and metal cutting system, reliable stone washing system, effective
colouring (washing) system.
Human Resource

Procurement
Knowledgeable staff, only transactional relationships with suppliers, on time availability,
profitable terms, good reputation
Marketing
Picking Trend
Presentation
to clients
Tech packs
(proposed or
received)
Up dating
clients

Inbound
Logistics
Inventory
Control
(checking
space &
availability)

Operations

Out bound

Service

Sampling

Warehousing

Time Frame

Shipment of
finished goods

Suggestions
from
marketing
department

Sewing
Inspection

Gate pass

Washing

Arrival
schedule

Size setting

Shipment of
samples

Profit Margin

Experienced and up to date marketing personnel, professional planning and control team,
active production team

Total Lead time for 1100 pieces = 10


months

Inquiry Flow

Information

Value Stream Mapping


Suppliers

Planning
Trend Fetching

POs

Procuremen
Choosing the
right suppliers

Indus
Apparels

Dock
Custom
Clearance

Tech Pack

Inbound
Inbound Logistics

Budgeting

Delivery to
Company

Tech pack
requirements

Gate Pass
Rechecking

LC issuance

Sampling

Produc

Proto sampling

Size setting

Trail in bulk

Pattern
making/sketching
Shipment
negotiation

Pre Production
Phase

Inventory
Storage

Price and time


negotiations

Outbo
und

Warehousi
ng

Time frame
POs

Client Company

Paper cutting

Numbering

Assembling

40-52

2-3

20-22

days

days

days

15-20

days

days

Inspection

Delivered to
shipment
(Karachi)

Invoicing

Invoicing

250-263
days

22-23

Order Fulfilment Mapping


Process
stage

Send order

Receive
new
order

Preproduct
sampling
process

Develop
outline
productio
n plan

Schedule
productio
n in
factory

Purchase
raw
material

Receive
material

Departme
nt
involved
customer
Marketing
departme
nt
Sampling
departme
nt
Productio
n,
planning
and
control
departme
nt
Procurem
ent
departme
nt
Goods
inward
Productio
n,
planning
and
control
departme
nt
Dispatch

Problem
point

Problem
point

Problem
point

Manufactu
ring

Ship
finished
products

Receive
delivery

30 to 37 weeks

Order fulfilment mapping is used to identify the major linkages and problem
areas. It considers the linkages with customers and suppliers. It considers all
process and departments involved in the production. In the last map process
are shown in columns and departments are shown in the rows. Company is
facing a problem in pre-product sample process because there are chances of
rejection involved in this process that can increase the overall lead time of the
company. Company is also facing problem in the development of product plan
and the purchasing raw material because there is chance that supplier may
delayed its material that can delayed the delivery of the finished good to the
customer and can also be a reason of alarming situation for the company.

Material flow explained


This diagram shows the whole process of material flow that how the material
enters in the production phase and gradually reached to the end customer. At
every step of the production some value is added into the product. After
receiving the order from the customer, company purchased the raw material
from the suppliers, they examine the fabric whether it is acceptable or not.
Customer took some time to examine the sample which caused some delay in
the process If it is not accepted by the customer then company work on the
query which raised by the customer, this caused some delay in the process if
the query does not resolve then the company reject the material and return it
to the suppliers but if they accept it then fabric went to the next procedure.
After receiving the approval company starts the pre-production phase, in which
company took small amount of fabric from the purchased inventory and
implements all the requirements which are given by the customer. In fit/proto
sampling production department measured and took some sizes which they
assume that it will be fit according to the customers requirements. In set a size
they used some computerized technology to assume the shrinking behaviour of
the fabric. In designing and styling they applied all the requirements according
to the order and then cut it with the assumed measurements and in preproduction sample we give several washes to the sample to get the final look,
maintain the heating and dry streaming temperature of the boiler and set it
according to the nature of the fabric then we select the final pre production
samples and send it to the customers to the final approval. If they reject it then
the whole procedure will be repeated which caused delay and if they accept it
then the fabric goes to the next phase.
The next phase is the trail phase which we done on the bulk, in trail phase we
took the fabric in bulk and check the behaviour of fabric in large amount, when
machines are run in production

with flow.

We

re-check the streaming

temperature on gages which are used for adjusting the temperature, in it we


adjust the temperature according to the amount of the bulk and estimated the
behaviour of the fabric and finally got the exact the set size. If the fabric is not
up to the set size then it will go to the re-trail phase again but if it is approved
by the production department then it will go to the next phase but after having

the production approval if they find some query then the whole process goes to
the starting phase which caused major delay in the process.
After the approval of the production department by understanding the
behaviour of the fabric they are ready to start the production phase by making
the pattern or sketching the measurement on the paper trim, put this
measurement paper on the fabric and start cutting the fabric according to it
then write numbers on the back of the cut pieces separately and bundling it
according to the given numbers.
After numbering and bundling we send it to the stitching process where fabric
is stitched systematically one by one. Stitching process is assigned to every
worker step by step; one row is stitching the back side of the jeans, attached
pockets and thread design on the pockets other row is stitching the front side
of the jeans making thread design and curve in it close to it there is one area
where both sides are assembled then it goes to inception area where they
checked that is the fabric stitching is according assigned numbers or not, if it is
not then it goes to the stitching process again which caused some delay but if
the inception is clear then it goes to the next procedure where accessories are
attached with it after that stitch the belting portion of jeans. Then they
trimmed it by cutting the extra threads after that jeans send to the final
inspection if they found any fault is it step related to stitching or any missing
accessories they send it to the alteration area which caused some delay but if it
is approved by the final inception then jeans goes through the final phase.
In final phase jeans goes through the same procedure which was happened in
the trail phase jeans took several washes until it get the exact look, then it
goes through the dry streaming process where it get the exact size by the
estimated dry streaming boiler temperature and then it goes through the
designing and styling procedure where it get several stone washes to get faded
look. Now they dried the output units to check the final measurement and look.
After the inspection they send it to the finishing department to give it the neat
and final look then they packed and tagged the jeans according to their sizes
then they stored the lot on temporary basis which is ready to deliver to the final
customer.

Explanation of Information Flow


Since the companys nature is B2B, end customers are far from reach with
communication with this Indus Apparels. Another thing to take into account is
the fact that it is not the end customer, in this industry that sets the trends,
these trends are in fact, set by the fashion industry. Japan is considered as the
main trend centre, interestingly.
It is important to keep in mind a few things before understanding the combined
information flow of frontline and backline activities in this company.
Firstly, it is understood that the inquiry is generated only after a series of new
fashion trend samples that are overviewed by the clients, such as under armour
via presentations made by marketing personnel of Indus apparels. Secondly, an
order of specification is made to Indus Apparels, which is better known as tech
pack, in this case, we have considered an order of eight hundred denim
bottoms per day. To make it simple, we have replaced the term tech pack with
inquiry relieved, which, more or less, means the same thing.

Inquiry stage
Once the final inquiry is received, it is analysed by the production and
development department, in which the company matches it with its capacity to
fulfil the order, as required. After making sure that the company can for sure
meet the specifications, that usually include the time frame of the demand, the
specific material required for denim bottoms, for example, white shades in the
centre, fabric with the combination of brown and grey colour, pure leather, or
cotton leather tags etc, a report is generated, that is e mailed to the client, in
which the capacity of the company to meet the targets is made clear.
Sometimes, the client company simply display their sales data to let Indus
Apparels forecast it and decide on its own how much of the output is required
for the season. Usually, the company does not make any changes to the tech
pack and does have the capacity to meet the targets. Then they wait for the
response. After a short, but unnecessary meeting conducted, it is made clear to
the entire company that a new project has been received. Once the offer is
accepted, the purchasing stage begins.

Purchasing stage
The Purchase and Procurement (PPC) department generates the purchase plan
that includes all the necessary inputs required for the project. This is first

passed on to the storage, which is in control of the Production and Planning


Department; once this document is reached, those inputs in the list are cleared
off that are already available in the storage and finally, a balanced Bill of
Material (B.O.M) is issued. While The B.O.M is generated, a time and action
calendar is also issued, which clearly guides the labour and other staff about
the time frame set, the sample stages and outputs per day. Finally, purchase
orders are made and sent to the relevant suppliers via documents as well as
phone call. The payment terms that clarify the date of payment are also
included in the P.Os.

Material Arrival stage


The moment the inputs arrive in time, the go through a gate pass, where the
goods are noted on sight. After that, they are sent to the storage, where they
are matched with the P.Os related to them. Finally, after clarifying, a document
is sent to the marketing and Production and Planning Department.

Sample Stage
There are different stages of sample. At first stage, sample of finished fabric
stitched threads is shipped to the client company. It almost always matches
with what the client company inquired. But if the client companys plan is
changed and they require some changes to their demand, they become liable to
pay for the expenses occurred in the process by Indus Apparels. For this, a
liability note is generated, which specifies how much expenses are to be
covered and at what time. Then a new deadline is issued for the new demand.
But if the sample is approved, which is usually the case, the process is
continued and a more finished sample is made again of a properly stitched
jeans. After the approval of this sample, a final sample is shipped, which is up
to much extent, the final product form. This is known as the pre finished
product. All this information of approval and shipment is done via email.
Sometimes, Skype calls are also made. But that happens rarely.

Mass Production stage


After the final approval of the samples, mass production of final products is
initiated. Daily updates are forwarded to the upper management that is the
production planning

department and the marketing department through

documents. At the same time, order of package material is also sent to the
suppliers, which was mentioned in the B.O.M.

Shipment Stage
Once

the

mass

production

is

completed,

it

is

informed

to

the

upper

management, including the marketing, finance and shipment department. The


marketing person makes a report and e mails it to the client company abroad,
in this case, it is in U.S.A. Shipment terms are negotiated by the shipment
department and the date is also informed to the client company. After when the
client company receives the shipment, and checks the goods, it informs back to
the marketing department and the project is finally complete. It is now the duty
of the finance department to receive the payments, as per contract.

Cash Flow
Production and planning department completes the customer order according
to the customer requirements and terms and conditions mention in the
purchase order and it informs to the marketing and finance department about
the accomplishment of the order. Finance department informs its bank about
the accomplishment of order and said it to prepare the all shipping documents.
Companys bank prepares all the shipping documents and sends to the

customers bank. Customer bank receive the shipping documents and examine
them, if all terms and conditions are fulfilled it will accept the documents and
informs to its company about the verified shipping documents. After verification
If LC is 90 days company will receive the money after the 90 days and if the LC
is at Site Companys bank will receive the amount and company can withdraw
money at any time.

Cash out flow of Indus appraisals


Cash outflow of the Indus appraisals consists of the three stages:

Planning stage
Ordering stage
Receiving stage

Planning stage: After getting orders from customers marketing department


convey the information to the production and planning control department.
Finance department made a cost sheet and set aside amount that will be used
for acquiring material from running capital. Production and planning control
department made a bill of material consisting on those materials that are
required for the fulfilment of customer order and send this bill of material to
the storage area where existing raw materials levels are being checked and
existing raw material is deducted from the required raw material and balance
send to the procurement department. Procurement department made a final
BOM and send it to the production and planning control department. Production
and planning control department send this BOM to the upper management for
approval.
Ordering Stage: After approval its information is send to the marketing and
finance department. Purchase order is made in the finance department in which
product quantity, quality, specification, per unit rate and date of shipment, and
date of payment is mentioned on which both parties are agreed. Then purchase
order is send to the supplier via mail.
Receiving stage: company received the material on the pre decided date and
material is inspected by the store area members they inspect the quality of the
material now payment is due. Company made the payment to suppliers on the
pre decided date it is usually after the 10 days of arrival of material.

Pipe-Line Mapping
(For 150K pieces)
Pre-Production Sampling steps

Customer
Inquiry,
Approve

Proto
Sampling

General quality
product
Inspection
presented to
Fixed the prices
customer
Make LC term
And
everything is

Fit
Sampling

sample with
proper styling
and stitching

PreProduction
sample

Size Set

Made after the

made goods in
approval of

each size of

customers
measurements

conditions

customers
demand
present

Customers

final

it

to

the

present it

finalized that is
Achieve the look

to customers

to be deliver
Through washing
Checking the
Shrinkage capacity

This pre-production sampling is done on a small sample that leads to the total quantity production. Production team
makes one sample that present to the customer for approval and made all other products according to that sample.
Once the sample is finalized production team do the division of time for each process. Through smart planning
division of time is almost same in each process.

ing

20

Rubbing
Wrinkle

Tags
Labels

fulfil of
Sprays
LC conditions

Paper Accessories

Zippers
Stitching
5
3
2

1
stitching trimming
transportation
suppli
28)
(35)
ers
(22)

washing
(22)

operation
(22)

Dry steaming
washing
(22-28)

Stone
riveting re-finishing
(33-34)

(28)

tagging

packaging

(22)

(22)

Add buttons

re
fabric

outbound
raw

complete

and delicate

Product

material

finished

cs
material

Product

verify

hi

ng

store
port

cleaning

finished
goods

shed
Dry and wet
operations

End
Users

Logistic
s

Garments

298

days

The above process times are for average 150,000 pieces.


Before starting the final product, company has to go through the pre-production
sampling plan at first. Pre-production sampling process consists of some steps.
After the completion of every step production team shows it to the customer for
the approval. Customer tells its demand and needs that production team has to
fulfil in pre-production stage. The first step includes the complete inquiry of the
customer in which marketing department negotiate the price with them
approve that price. In inquiry stage company goes through the general quality
inspection of raw material and shows that to customer. Company makes LC
terms and conditions with the agreement of customer.

The 2 nd step is Proto

Sampling. In the proto sampling Stage, they check the shrinkage capacity and
through washing they achieve the look according to the customer demand.
At the end of this stage they make the sample with complete styling and
stitching and present it to the customer for approval that leads to next stage.
The next step is fit sampling in this stage company made sample with proper
measurements according to the customer. In the 4 th step company shows
sample to the customer in each size demanded. Company make product in each
size that required. In the last step of Pre-Production sampling process,
production team present final sample to the customers. In this sample they
finalized everything with final sample that to be deliver to the customers. In the
all above process production team has to present the product again and again
to the customer. Customer may reject the product if its not according to
customers demand. Production team make that again to full fill the customer
need, customer approve it until and unless it is according to customers
demand.
Once the sample is finalized and approved by the customer, manufacturers
starts making the total quantity demanded by the customers. From buying raw
material from suppliers and deliver final product to the customer pipeline
involves 11 steps. In the pipeline all the items, processes and the people who
perform these activities are identified. All the processes are mentioned on
horizontal line with their process and relevant transportation time. The vertical
line tells the average inventory that any party in supply chain is holding in the
beginning and the end of the processes. In the pipeline its also mentioned that
who will performed the specific process.

Company buys the raw material from the suppliers, and store it in their
warehouse and its lead time is 20 days.

After 20 days storage of fabric they

start cutting of the raw material that takes 22 to 28 days. From cutting to
packaging all processes are done by garment manufacturing. In the cutting
stage the material is cut down in the specific pattern made by designers. Once
they have done with cutting, company store fabric for 5 days in the store.

CUTTING PROCESS

In the next step manufacturers start stitching that takes 35 days. In stitching
stage manufacturers add zippers on jeans but no buttons attached here
because they are delicate and in washing stage they could be damaged. Next
process starts with the delay of one day in which they store stitched material.
Trimming takes 22 days for completion. In this process they clean the
material; it involves the cutting of extra loose thread from jeans. After finishing
the product cleaning process they store it for 2 days. After trimming production
team send the jeans for washing.
Washing time is fixed in this process because if it would take different times will
create errors, waist sizes could be different. Through washing the purpose is to
achieve the look of the product according to the customers demand. Shrinkage
checking is equally important to check how it will shrink in washing and have to
mark the length and width after checking the shrinkage. Manufacturers do this
checking in pre-production sampling process that helps in making products at
large scale.

The next two most important processes are Dry steaming operation and Stone
Washing. These processes take 22 to 28 and 33-34 days respectively. These are
key process for that special designer requires and these processes complete
under Dry and Wet operation. In the dry steaming operations jeans goes
through the many procedures for styling such as rubbing, wrinkle and sprays.
Almost all the styling happens in stone washing. After dry operation they
store the product for 2 days and send to the washing side.
After washing they store it for 2 days and forward to the next step that is
riveting. In riveting manufacturers add snaps, buttons, zippers and all the
delicate material on jeans that cannot attach before washing. Riveting requires
28 days. After riveting the product is almost completed. This finished product
store for 1 day after one day team start re-finishing that takes 22 days. In refinishing stage the completed product re-checked by the team to see everything
must be perfect and complete. After re-finishing they again store for 1 day to
verify the re-finishing.

Re-Finishing

The next step is tagging. In this step they add price tags, brand labels, paper
accessories etc. Tagging requires 22 days to complete. After tagging they store
final tag products for 2 days and start packaging that also take 22 days.
Company again stores it for 1 day after packaging. After packaging it takes 7
days in auditing of finished goods that is an important part of this process.
After seven

days of

auditing

the

next stage

is outbound logistics.

In

transportation process that is done by logistics providers, it takes 22 days for

complete transportation. Companys responsibility is only sending it the Karachi


port, where the company gives the finished packed products to the agent of the
customer.

Tagging and Labelling


Customer can change the product style, size only in the pre production
sampling process. Once product sample is finalized an approved by the
customer after that customer can not cancel or change the product. If customer
wants so, he has to pay penalty and cost of material. Almost all problems occur
in the pre-production sampling process. It takes longer if company does not
make product according to customers demand.

Gap Analysis
Problems:
1)Capacity Problem:
Production area of company is very congested and worker cannot perform their
activities comfortably. They have to do all process at the same place as cutting,
stitching riveting etc. they cannot produce bulk quantity in this place. Thats why they
accept limited order. They cannot accept the large order at the same time due to the
capacity problem and running production. Sometimes they have to deny the orders of
their loyal customers because of already existing orders and running production.

Production
area
2)Time consuming order approval from the customer:
In the production almost all the problems occurs in pre-production sampling
process. We find problem in the pre-production phase where we are not sure
about the exact approval time from the customers which caused uncertainty to
the pre-production phase. Production team has to redesign the sample until it is
all according to customer demand. Customer can reject it at any time in preproduction phase until and unless it is what customer wants. Because of this
uncertainty in pre-production phase sometime its takes too much time in
satisfying the customer. It also increases cost by showing it to customer again
and again.

3)Inspection Problem:
Sometimes in producing Small quantity order, team does not check products
after the completion of each process. In packaging they realize the errors,
which create problems. Once errors occur in final product, Company cannot give
produced sample to other customer as everyone has its own demand and
company make customized products. It could be end as waste products and
company has to pay penalty, offer discount to the customer and sometimes they
even have to deliver the product by air just for the sake of sale of those
products. Company has to bear all this just because of poor inspection plan for
small quantity order.

4)No Supply Chain Department:

Company does not have any supply chain department. Probably company dont
face major problems for having no supply chain department but if they develop
a supply chain department they can get maximum benefit in future that they
are not having right now. There are many issues that can be only resolved with
developing supply chain department.

5)Cash to cash cycle:


Cash to cash cycle of the company is not short due to this their payments from
the customers are late. Company mostly takes seasonal orders that are almost
for a year thats why they got cash after a long time. Company has to pay to
supplier first to purchase the raw material that is totally a cash outflow.
Company has to pay money from their account or from profit is there is any.
Company got the cash from customers after the delivery of product and
completion of LC terms.

6)No long term relationship with suppliers:


Company has no long term relationship with the suppliers due to this their raw
material arrived late that directly affect the led time and delayed the
production. Once company is done with the purchasing they dont keep any
relationship with suppliers because of availability of large number of suppliers.

7)Recent problem faced by the company:


During our visit to the company manager told us about the rejection of A23
order because of the variations in the different pieces of same style the waste
size of different pieces was different. And analyzing the problem area they find
that problem is occur at the time of drying process they were using the
different means to dry the cloth like coal and electricity heaters and due to the
different temperature some pieces are expand more and some are less due to
this problem the sizes of all pieces were different.

8)Dry Streaming boiler (Temperature adjustment):


Secondly we find problem in the adjustment of dry streaming temperature of
the boiler which has an ability to change the nature of the product. The country
like us where deficiency electricity is a major issue for the production firms,
they rely on alternatives to keep their productivity in flow but it also caused

some problems in the whole process like maintaining the temperature of the
dry stream boiler while streaming the jeans recently when the company turned
their boiler on Gas and coal because of the shortage of electricity their whole
inventory was wasted due to the fluctuation of temperature.

9)No use of alignment strategy:


Alignment strategy is not used by the company department everyone is just
focusing on its own department work and it has no concern with other
department workings and problems. Efficiency of the company is limited due to
the only focus on their personal tasks. Everyone just has to do its own work
even there is no proper communication between employees.

10)Long Lead time:

Order fulfillment lead time is very high in the company. Company already takes
yearly projects and it takes more time going through all the processes. If
uncertainty occurs within or at the end of the processes it could ruin all the
profit because would not be able to deliver that on time. Company would also
pay high cost for delivering it by fast means of deliver. To avoid all these bad
consequences company must take some actions for that.

Recommendations
1) If they will expand the production area and differentiate the areas for every
activity labor will feel more comfortable to do work. If they would increase their
capacity area, they will be able to meet the requirements of their loyal
customers.
2) Improving of pre-production sampling process is very important as it leads to
the pipeline mapping time. Once company is successful in making sample at
less time it would definitely help in making large order production through
proper planning and dividing time of each process. In order to avoid time lags
we need to have good interaction with the customer so that we could assess his
nature and future plans, we should also give them deadlines for approval or
disapproval of an order to avoid uncertainty. Company must plan a proper
meeting with customer if they are not getting the exact demand of final
product. Through proper planning and properly knowing the true demand from
the customer can eliminate this risk. Production team must take it seriously in
the start of sampling production that could delete the risk of production. By
taking less time in pre production phase helps to reduce the time in totality in
pipeline mapping. As company plans the time of processes and inventory days

according to the final sample that they made in pre-production sampling


processes.
3) Company should have proper inspection team to keep check and balance on
production of every order size. Inspection team must inspect after every single
process to avoid bad consequences. Because of having efficient inspection Team
Company can avoid all type of penalty that they may have to pay in case of
defected products (those products are not according to customers demand).
4) Company must develop a supply chain department. It would help in many
good ways. Through supply Chain Company can enhance its capabilities, can
add the values to its customer, and build trust with customers with proper
communication. It would help company to increase its profit by achieving
customer satisfaction. Supply chain department would help in resolving
conflicts within the company and department would develop the contingencies
plan to avoid uncertainty. By choosing right responsive supply chain Strategy
Company can improve its innovative products. Through exploration early sales
data would help the company to reduce forecast errors. This is a major factor in
innovative products and this is only possible with a proper chain management..
Supply chain would help in telling where and for how much time company must
keep inventory and can calculate its cost. This would defiantly help the
company to reduce its overall cost. Supply chain would help to develop the
proper

network

design

and

deliver

processes

that

would

increase

the

efficiencies and value preposition.


5) Company should use LC at site option so that company can receive money as
soon as possible. While setting prices and making agreement on LC terms,
company should add terms of advance payment. Company can take advance
from customer that would help them in purchasing material.
6) Company should develop a long term and strong relationship with suppliers
so that they can avoid the problems of late production and increased lead time.
Company must choose the best and efficient suppliers and should make
contracts with them, this would help in increasing of efficiencies in the
company. Company must build trust with effective suppliers by telling true
demand to them.
7) They should use the same machine for the drying process of fabric. And they
should use the temperature estimating machine so to produce on different

means. They should also properly trained and educate their workers to consider
different factors at the time using different machines and sources. Company
must keep meeting with all of the managers and employees so that everyone
can give its own suggestions. In the above issue one major reason was that
company just listen to problem and buys the machine for that no even analyzing
the consequences.

Company must conduct the proper meeting and must

analyze the result through discussions.


8) To avoiding this problem we suggest them to get some up-to-date
temperature measurement gages which control and tell the status of the
temperature accordingly and to avoid any further uncertainty it should be
checked time to time minutely. Company must know the exact requirement of
temperature for dry steaming operation. Again they must have an efficient
inspection team. While using different means of the energy, they must know the
behaviour of temperature.

Alternatively Company must rely on one type of

energy instead of using different types as coal, gas, electricity. By relying on a


single type it would reduce the number of errors in future.
9) Company should use the alignment strategy, all departments should opt only
those options thats comes under the company policy and focus on company
overall

objective.

Company

maintain

the

stable

machine

capacity

and

workforce level with the constant output level due to this often company is
completely unable to meet the demand of their faithful and regular customers
and it also results the large inventories and backlogs.
So, in this situation company should try to reduce its inventory holding cost.
10) Company should try to shorten its lead time by spending less time on every
activity.
Company should reduce its lead-time for maximum use of their machines and
maximum order fulfillments. Company must expand its production area and by
using more machines properly company can save its time. By cutting down
some time from each process would help to reduce noticeably time overall. This
is possible through perfect planning.

Action Plans

They should enlarger the capacity area in order to save time and to fulfill
maximum number of orders.
The pre production sampling process should be properly planned which
will in turn increase the efficiency and time and money will be saved which
will end up in giving maximum profit.
In order to keep an eye on the workers and the work in progress an
efficient inspection team should be established which should be keeping
an eye min by min.
There should be some supply chain department in the company which will
strengthen the relation between the supplier and the customer and
increase the demand collaboration.
Company should try to reduce its cycle time by reducing the account
receivables times and by enhancing its account payables time.
Company should try to established long term relationships with its
supplier by analyzing their past contracts with other firms.
Company should use modern technology for the drying process that treat
the fabric at same temperature to avoid the differences in the contraction
of fabric.
The workers of the company should know what is going in the entire
company and should not be only confined to their respective department.
Company should use KPIs to measure quality, time and assets
performance.
The performance of the workers should be measured quarterly and
incentives should be given as a result of worthy performances.

Organizational Structure
Factory Manager: Imran Iqbal

Finance Dep:
Omer Farooqi

Merchandizing
& Marketing
Dep: Zafar
Iqbal

H.R Dep:
Qasim Bhatti

Merchandizing
& Marketing
Dep: Khurram
Haroon

Accounts
Head: Humza
Mubashir

Storage Head:
Adil M. Anwar

Cutting In
Charge: Abdul
Kareem

Production &
Planing Dep:
Salman Rauf

Sewing In
Charge: Afzar
Mansoor

PPC Dep:
Zahid Shehzad

Laundry Dep

Dry Process In
charge: Sadiq

Wet Process In
charge:
Basharat

Sampling In
Charge: Alam
Baig

The Departments of this company


in Lahore are inter-linked, as seen
in this chart. At the end, it is the
finance departments head ache to
know how much storage is already
available and what accounts are in
active, only then proper budget is
allocated.

References:

Business Logistics Management by Ronald H. Ballou,


Book: Supply Chain Management: An International Journal.
Gower Handbook of Supply Chain Management by John Gattorna
www.google.com
www.jstor.org