Summer Internship Report on Madura Garments

Project Report On Improving swear out Level for Institutional Sales SUBMITTED FOR THE PARTIAL extremity OF POST GRADUATE DIPLOMA IN INDUSTRIAL MANAGEMENT (PGDIM) By Puneet Verma Roll No. 105 PGDIM 18 Under the guidance of pic National set up of Industrial Engineering (NITIE), Vihar Lake, P. O. NITIE, Mumbai 400 087 Date of Submission _ _ _ _ _ _ _ Certificate of Supervision This is to certify that Puneet Verma, student of PGDIM, Batch No. 18 has success sufficienty completed the take to titled Improving Service Level for Institutional Sales, nder the guidance of Mrs. Sadhana Ghosh (NITIE) from 11th Jan 2013 to 15th March 2013. Based on the professional work do by him, this report is being submitted for the partial fulfillment of Post-Graduation Diploma in Industrial Management at NITIE, Mumbai Signature Faculty Guide Acknowledgement I wish to extend my sincere and heartfelt gratitude to my guide Mrs. Sadhana Ghosh(Professor, NITIE), whose Guidance and help constantly helped an d motivated me during the entire tenure of the proletariat. I am competent to grade with conviction that I fetch immensely benefited.Puneet Verma PGDIM-18 Executive Summary The app arl companies cater to various deports such as Department Stores, softwood, Organized retail etc. Institutional Sales is a nascent channel channel that caters to the demand from Institutional customers i. e organizations. Sales to this channel argon gener everyy in the form of bulk methodicalnesss at flock discounts. For example, a pharmaceutical come with orders through with(predicate) this channel for gifting shirt to doctors. The major(ip)ity of the credit line of app arel organizations comes in through Trade and Department store channels.Orders for those channels come in during the Trade shows held twice a year 6 months prior to the launch of a harden (Spring-Summer or Autumn-Winter). Sourcing and production mean for those channels so are essentially d ane against fixed orders. But for Institutional subscriber line orders are not shape and customers come in with orders with very short lead time. This makes sourcing and manufacturing strategy for this fulfill completely antithetical from conventional channels. contemporaryly the company Madura Garments (for reference and data) is not able to operate these customers at a satis pulverization level applying the business bringes in place.This is contributed by the fact that the normal business model is significantly different from the requirements of this channel. The preliminary select was to first base study the as-is business formes in place and review the medieval tense data to as trusted the cap great power of the current dust in place. next the problems in the current system were identified irrespective of whether the problem was a process or people related problem. A revised process tend was the proposed which will enable the company to service Institutional customers at a satisfactory rate.Lean half a dozen Sigma methodology was adopted to approach the problem using a DMAIC model. The final list of recommendations include changes in the current business process in the short time frame for immediate enhancement of service levels and pine term changes to improve process efficacy to ramp up the business capabilities. Table of Contents Project Report1 Certificate of Supervision2 Acknowledgements4 Executive Summary5 1. Introduction8 2. Need & substance of the Project11 3. Objective12 4. books Review. 3 4. 1 DMAIC 13 4. 2 Fishbone Diagram. 15 4. 3 Ca economic consumption and incumbrance Matrix. 17 4. 4 Failure order Effect Analysis.. 18 5. Methodology.. 4 5. 1 Understand the current market and business scenario.. 25 5. 1. 1 Market Scenario .. 25 5. 1. 2 Agent Performance 29 5. 1. 3 Business processes 30 5. 1. 4 Key Points . 5 5. 2 Ascertain the current service level of the system.. 36 5. 3 spoting and Defining Problems.. 37 5. 3. 1 Fishbone Diagram 37 5. 3. 2 Cause and Effect Matrix 38 5. 3. 3 Failure modality Effect Analysis 39 5. 3. Principal Issues 41 5. 4 suffice Improvement Plan 42 5. 4. 1 Short term changes 43 5. 4. 2 Long term architectural plans 47 5. 5 Process Control.. 1 6. References.. 54 Introduction The Aditya Birla Group is in the League of Fortune 500. It is anchored by an extraordinary force of 100,000 employees, belonging to 25 different nationalities. In India the group has been adjudged The Best Employer in India and among the Top 20 in Asia by the Hewitt-Economic Times and Wall pass Journal Study 2007. Over 50 percent of it taxs flows from its overseas operations.The several Group companies chthonian Aditya Birla Group are Grasim, Hindalco, Aditya Birla Nuvo, Essel Mining, Aditya Birla Retail Limited. Aditya Birla Nuvo Limited is a alter conglomerate and the platform that has launched many new businesses for Indias Premier Business house, the Aditya Birla Group. Aditya Birla Nuvo has a dozen businesses under it s fold, ranging from textiles to telecom. As a leading player, Aditya Birla Nuvo ranks as The demesnes largest premium branded Apparel Company Madura Garments Largest Manufacture of linen theoretical account in India Indias largest and the cosmoss fourth largest producer of insulators The endorse largest producer of carbon black in India Indias second largest producer of viscose filament yarn (VFY) Aditya Birla Nuvos Business Garments ( chumped Apparel) Madura Garments, a division of Aditya Birla Nuvo is Indias leading apparel retail company. It enjoys market leadership in the branded garments business through its power and popular lifestyle brands Louis Phillipe, Van Heusen, Allen Solly and Peter England. The company has also entered into a diffusion agreement with the International brand Esprit and has opened exclusive brand outlets.It has 2 successful store formats The Collective and PEOPLE. Madura Garments has exclusive showroom space which includes several large form at brands outlets of world-class standards, providing top shade retail experience to the consumers. It also has a spunky visible presence in large department and multi brand stores. The thrust is on brand building through development of innovative new merchandise, exciting communication campaigns and enhancing the product portfolio. The boilersuit marketing strategy has been move from a Wardrobe Brand to a Lifestyle Brand.The company has won many coveted awards in the fashion world like the Best Retailer of the Year, Best Apparel Company of the Year, Best Trouser Brand of the Year, Best Smart Casual Brand of the Year etc. , at well known for a such as Reid Taylor Awards and Images Fashion Awards. To bolster its presence significantly in the exploding apparel retail sector, the company has started sell its life style brand and affordable popular brands through two new formats- Madura Garments Lifestyle Retail Company Limited and Peter England Fashions and Retail Limited. pin down ManufacturingMadura Garments Exports limited is a wholly owned subsidiary of Aditya Birla Nuvo focusing on garment exports. It is an integrated player in the apparel industry with interest in manufacturing exports of wovens, knits and Full Service Provider business. The company has modern manufacturing facilities and caters to customers like Marks & Spencer, Next, discolorberry, Arrow, Tommy Hilfiger and Menswear House. The organization delivers from design to delivery of merchandise at the customer warehouse. pic 2. Need & Significance of the Project Madura Fashion & Lifestyle has a fast growing institutionalized gross revenue business.In celestial latitude 2011, institutional sales hit an all time blue of 4. 43 crores for a month. For FY12 institutional sales will account for Rs 14 crores with a high positivity (CBA). This channel has grown by four measure in terms of sales over the last four years. However, the on time in full order execution for this channel continues to b e poor. slow up deliveries and missed opportunities continue to limit the growth of this channel. In this context, there is a train to study the supply chain (planning and execution) of this channel to identify the root make water for service tribulations and define process and system changes to tackle these. 3.Objective Mapping of as-is supply chain (planning process, order capture and order fulfillment process) The current business process that is being followed to cater to the customer demands Establish current service level for this channel The order service level of the channel derived from the past data that has been obtained Identify root cause for service distresss in institutional business The major causes that leads to an unsatisfactory service level related to people, process, business issues 4. Literature Review Six Sigma Methodologies Six Sigmais abusiness management strategy, originally developed by Motorola in 1986.Six Sigma became well known afterJack Welch do it a substitution focus of his business strategy at General Electric in 1995, and today it is widely use in many sectors of industry. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of mars (errors) and minimizingvariabilityinmanufacturingandbusiness processes. It uses a set ofquality managementmethods, includingstatistical methods, and creates a special infrastructure of people within the organization (Black Belts, Green Belts, etc. ) who are experts in these methods.Each Six Sigma project carried out within an organization follows a defined sequence of strides and has quantified financial targets (cost decline and/or profit increase). The termSix Sigmaoriginated from terminology associated with manufacturing, particular(prenominal)ally terms associated with statistical modeling of manufacturingprocesses. The maturity of a manufacturing process can be exposit by asigmarating indicating its yield, or the percentage of defect -free products it creates. A six sigma process is one in which 99. 99966% of the products manufactured are statistically expected to be free of defects (3. defects per million). Motorola set a goal of six sigma for all of its manufacturing operations, and this goal became a byword for the management and engineering practices used to achieve it. 4. 1 DMAIC The DMAIC project methodology has five phases ? Definethe problem, the voice of the customer, and the project goals, specifically. ? Measurekey aspects of the current process and collect relevant data. ? Analyzethe data to investigate and curb cause-and-effect races. Determine what the relationships are, and attempt to ensure that all factors have been con postred.Seek out root cause of the defect under investigation. ? Improveor optimize the current process based upon data analysis using techniques such asdesign of experiments,poka yokeor mi pole proofing, and standard work to create a new, coming(prenominal) state process. Set up pilot runs to establishprocess capability. ? Controlthe future state process to ensure that any deviations from target are change by reversal originally they result in defects. Implementcontrol systemssuch asstatistical process control, production boards, visual workplaces, and continuously monitor the process.Some organizations add aRecognizestep at the beginning, which is to recognize the right problem to work on, thus yielding an RDMAIC methodology. 4. 2 Operation Definition Recall the quote in the first step section of this site, You can manage, what you can measure you can measure, what you can define you can define, what you can understand. Operational definition is the first step towards effective management. It helps us build a clear understanding of a c erstpt or a phenomenon so that it can be unequivocally measured. Let us take a very simple example to understand the need and the concept of operational definition.Let us imagine a power that we wish to buy an all-pur pose shirt with 50% cotton wool and 50% polyester. Would you accept a shirt whose front is made up of 100% cotton cloth and the back made of 100% polyester cloth? Surely not Clearly we need to (operationally) define what we need. A better expression would be that we need a shirt made up of a cloth having even distribution of cotton and polyester fibers and their proportion by weight (or may be by hail) is equal. So far so good, but we also need to have a mechanism to test it.In this case, we can send the shirt to a science lab where randomly selected two areas (say 1 cm x 1 cm) one from the back and one from the front are examined for the contents. The lab reports that group of two fibers of for to each one one polyester and cotton are interwoven to make this clothe. Did we mean alternate fibers of polyester and cotton or something else? We now discover that we even need to define even distribution. In a business management scenario, common words such as good, reliable, and ac curate (etc. ) can have multiple meanings unless they are (operationally) defined in a specific context.So how do we pull in an operational definition? The process is explained with the help of an example in the future(a) figure pic Document the outcome of each process step and that becomes the operational definition. The operation definition must be tested before it is rolled out. 4. 2 Ishikawas Fishbone Diagram The fishbone diagram is a graphical method for finding the root causes of an effect. The effect can be either a negative one, such as a process defect or an undue process variation or a positive one, such as a desired process outcome.Kaoru Ishikawa, a famous Japanese consultant developed this method in the 1960s. It is also known as Cause-and-Effect Diagram or Ishikawa Diagram. The balance chapter details the steps required to construct a fishbone diagram. The example effect to illustrate the concept is high petrol consumption in a car. Step I Identify the process effect to be analysed. Develop an Operational Definition to ensure that it is clearly understood. Write the effect in a box on the right side and draw a horizontal arrow from left to right that touches the box as illustrated in the figure below. pic Step IIIdentify the main categories of causes resulting in the effect under consideration. These categories can easily be selected from the applicable six key process elements. These process elements are people, environment, material, method, machinery, and measurement. Add selected categories in the diagram as illustrated in the following figure. pic Step III Identify as many causes under each category and add them to the corresponding category. Detail each cause further (recursively) to the lowest level possible. pic Analyse this diagram to identify the causes that require deeper investigation.As fishbone diagram identify only potential causes, it may be a good idea to use a Pareto Chart to determine the cause(s) to focus on first. 4. 3 Caus e & Effect Matrix TheCause and Effect Matrixis a tool which is used to prioritise potential causes by examining their relationship with theCTQs. CTQs are placed on the top of the matrix and causes are place along the left side. The CTQs are ranked in terms of grandness. The relationship surrounded by the causes and CTQs are ranked. An boilers suit score is calculated and the cause with the highest overall score should be turn to first because they will have the largest impact on the CTQs.Steps 1. List the CTQs across the top of a matrix. 2. Rank and assign scores to each CTQ according to its importance to the customer. 3. List the causes on the left side of the matrix 4. Determine correlation scores between each cause and CTQ based on the strength of their relationship (E. g. 1 weak, 3 some, 9 strong) 5. Cross multiply correlation scores with precedency scores and add across for each cause 6. score aPareto chartand focus on the causes with the higher overall scores. The foll owing diagram is a C&E matrix template fromProcessMA. pic 4. Failure Mode Effect Analysis A disappointment modes and set up analysis (FMEA)is aprocedureinproduct development,systems engineeringandoperations managementfor analysis of potential disaster modes within a system for classification by the severity and likelihood of the failures. A successful FMEA activity helps a team to identify potential failure modes based on past experience with similar products or processes, enabling the team to design those failures out of the system with the minimum of effort and resource expenditure, thereby reducing development time and costs.Because it forces a review of functions and functional requirements, it also serves as a form ofdesign review. It is widely used in manufacturing industries in various phases of the product life cycle and is now increasingly finding use in the service industry. Failure modesare any errors or defects in a process, design, or item, especially those that affe ct the intended function of the product and or process, and can be potential or actual. Effects analysisrefers to examine the consequences of those failures.The pre-work The process for conducting an FMEA is typically developed in three main phases, in which appropriate actions need to be defined. Before starting with an FMEA, several other techniques are frequently employed to ensure that robustness and history are included in the analysis. A robustness analysis can be obtained from interface matrices, term diagrams, andparameter diagrams. Failures are often found from external noise factors and from shared interfaces with other parts and/or systems.Typically, a description of the system and its function is developed, considering both(prenominal) intentional and unintentional uses. A block diagram of the system is often created for inclusion with the FMEA, giving an overview of the major components or process steps and how they are related. These are called logical relations aro und which the FMEA can be developed. The primary FME document or worksheet lists all of the items or functions of the system in a logical manner, typically based on the block diagram. NOTE Above shown example format is not in line with mil. td 1629 or Civil Aerospace practise. The basic terms as given in first paragraph of this page are not available in this template Step 1 Occurrence In this step it is necessary to look at the cause of a failure mode and the number of times it occurs. This can be done by looking at similar products or processes and the failure modes that have been documented for them in the past. A failure cause is looked upon as a design weakness. All the potential causes for a failure mode should be identified and documented. Again this should be in technical terms.Examples of causes are erroneous algorithms, excessive voltage or improper operational corrects. A failure mode is given anoccurrence ranking (O), again 110. Actions need to be determined if the occu rrence is high (meaning 4 for non-safety failure modes and 1 when the severity-number from step 2 is 9 or 10). This step is called the detailed development section of the FMEA process. Occurrence also can be defined as%. If a non-safety issue happened less than1%, we can give 1 to it. It is based on your product and customer specification. Rating Meaning 1 No known occurrences on similar products or processes 2/3 Low (relatively few failures) 4/5/6 stop (occasional failures) 7/8 elevated (repeated failures) 9/10 Very high (failure is almost inevitable) Step 2 SeverityDetermine all failure modes based on the functional requirements and their effects. Examples of failure modes are electric short-circuiting, corrosion or deformation. A failure mode in one component can lead to a failure mode in another(prenominal) component, therefore each failure mode should be listed in technical terms and for function. Hereafter the ultimate effect of each failure mode unavoidably to be considered. A failure effect is defined as the result of a failure mode on the function of the system as sensed by the user. In this way it is convenient to write these effects down in terms of what the user might see or experience.Examples of failure effects are degraded performance, noise or even taint to a user. Each effect is given a severity number (S)from 1 (no danger) to 10 (critical). These numbers help an engineer to prioritize the failure modes and their effects. If the sensitivity of an effect has a number 9 or 10, actions are considered to change the design by eliminating the failure mode, if possible, or protecting the user from the effect. A severity rating of 9 or 10 is generally bookingd for those effects which would cause injury to a user or otherwise result in litigation. Rating Meaning 1 No effect 2 Very minor (only sight by discriminating customers) 3 Minor (affects very little of the system, noticed by average customer) 4/5/6 Moderate (most customers are annoyed) 7/8 high (causes a loss of primary function customers are issatisfied) 9/10 Very high and hazardous (product becomes inoperative customers angered the failure may result unsafe operation and possible injury) Step 3 Detection When appropriate actions are determined, it is necessary to test their efficiency. In addition, design check is needed. The proper inspection methods need to be chosen. First, an engineer should look at the current controls of the system that prevent failure modes from occurring or which detect the failure before it reaches the customer.Hereafter one should identify testing, analysis, monitoring and other techniques that can be or have been used on similar systems to detect failures. From these controls an engineer can canvass how likely it is for a failure to be identified or detected. Each combination from the previous 2 steps receives adetection number (D). This ranks the ability of planned tests and inspections to remove defects or det ect failure modes in time. The assigned detection number measures the risk that the failure willescape detection. A high detection number indicates that the chances are high that the failure will escape detection, or in other words, that the chances of detection are low. Rating Meaning 1 Certain fault will be caught on test 2 Almost Certain 3 spunky 4/5/6 Moderate 7/8 Low 9/10 Fault will be passed to customer undetected After these three basic steps, risk priority numbers (RPN) are calculated Risk priority number (RPN) RPN play an important part in the choice of an action against failure modes. They are wand values in the evaluation of these actions.After ranking the severity, occurrence and detect ability the RPN can be easily calculated by multiplying these three numbers RPN=S? O? D This has to be done for the entire process and/or design. Once this is done it is easy to determine the areas of greatest concern. The failure modes that have the highest RPN should be giv en the highest priority for corrective action. This means it is not always the failure modes with the highest severity numbers that should be treated first. There could be less bare failures, but which occur more often and are less detectable. After these values are allocated, recommended actions with targets, responsibility and dates of implementation are noted.These actions can include specific inspection, testing or quality procedures, redesign (such as selection of new components), adding more redundancy and limiting environmental stresses or operating range. Once the actions have been implemented in the design/process, the new RPN should be checked, to confirm the improvements. These tests are often put in graphs, for easy visualization. Whenever a design or a process changes, an FMEA should be updated. A few logical but important thoughts come in mind ? Try to eliminate the failure mode (some failures are more preventable than others) ? Minimize the severity of the failure ? Reduce the occurrence of the failure mode ? Improve the detection 5. MethodologyA brief outline of the methodology adopted in the project is given below 1. Understand the current market and business scenario a. Gather historical data from the system to analyze market condition b. Analyze trends and patterns in the sales figures c. Study the current business processes and map the material and information flow 2. Ascertain the service level that the system soon operates at a. Gather data for a specified period b. Ascertain the service level for that period subjected to constraints c. Interpret the data to assess system capability 3. Identify and define the issues a. Identify the principal issues currently affecting service levels b.Use Lean Six Sigma Methodologies to structure the analysis process 4. Propose a Process improvement plan that addresses the need of the system a. Structure all the issues in the current system systematically b. Propose solutions which can positively affect the major issues c. Propose solutions for current service level improvement and long term improvement of business capabilities 5. Propose metrics to effectively control the process once implemented a. Propose metrics that can capture the effectiveness of the system in place 5. 1 Understand the current market and business scenario 5. 1. 1 Market Scenario Brandwise sales for FY11-12 85% of sales contributed by LP, VH 62% of LP sales contributed by December sales 31% of overall sales in December pic Overall Sales volume for FY 11-12 Business runs on relationship based contacts. A client can take away a number of his contacts from a business. Period for gifting by companies April ( June Companies want products by March So ideally order should be placed by November/December Educating customers about the function of the business is important to obtain feasible targets customers generally specify the brand, but may also sometimes specify the colour to coordinate with an event A serviced customer will not look for an alternate source for subsequent orders A customer may order goods for gifting or internal use outlay sensitive customers Currently Pharmaceutical is the major player, but new avenues can be explored (Essar Steel uniform order) Pharmaceutical companies generally demand a verso of 30 days Pharmaceutical sector generally not affected by downturns Delivery in correct time and correct order amount of money If delivery is correct then a premium price may be charged Priority of delivery is low in this channel, the priority should be highest Customers may reject the order if delivery is delayed for a day. Events. Priority is low as the volume of business is low in comparison with overall business volume If service level is high then company bargaining power will also be high Market is nonimmune to economic downturns (no order from IT firms for the past 3 yrs) Agents display a variety of goods to the customer. May sell a rival brand or a different product. Forecasting is difficult as a company may choose to give a different gift the next year Satisfied customers does not ensure return customer but provides base for word of mouth marketing Leverage on the firms brand names High profit business where the discount depends on the volume of products ordered. No returned goods. Dealings are made with top management, so client facing operations should be capably handled Customer Sum of Quantity Sum of Gross fare Mankind pharma ltd 107500 55623750 Madhuram apparels 14019 11155274 Lupin limited 10460 9936990 Addon holding pvt ltd. 12781 8356870 Supra garments pvt limited 9098 7067832 Padma international corporation 10188 6298490 Unichem laboratories ltd 6555 5004589. 37 Biocon limited 4980 3650530 M/S.Glaxo smithline ltd 3424 3589379 Clairemont enterprises 8138 3544110 Emcure pharmaceuticals limited 5395 3426004 IPCA laboratories limited 3284 2891923 Saffron enterprises (p) ltd. 4118 2855504 Geno pha rmaceuticals ltd 4200 2520000 Government of India 3000 1875000 Society of Petroleum Geophysicists 2028 1817540 Pidilite industries ltd 2500 1650206. 25 53 customers were serviced where ordered criterion was over 100 9 orders were serviced where the ordered quantity was more than 5000 17 orders were worth more than Rs 10,00,000 The revenue generated from these orders contribute to 88% of the overall revenue Orders exceeding 5000 contributed to 74% of overall revenue Revenue per unit from large orders generally lesser than that from medium/small orders 5. 1. 2 Agent Performance Agentwise breakup of sales amount Proportion of sales made through agents as opposed to directly 5. 1. 3 Business processes pic Current scenario of sourcing options Sourcing not dependent on centre of attention or Fashion, depends on how Core is defined Mills are large entities and Madura cannot consume their entire produce Sourcing time depends on overall demand for a fabric in the market Sourci ng strategy dependant on individual Style Codes For a style code with constant Y-o-Y demand an buffer inventory of 1000 mts is maintained at either factory RM level or supplier level A fabric from the current assuage, brand checks whether they can sell the product at the full priced market , then they service the institutionalized sales customers No separate sourcing strategy for institutional channel Sourcing strategy fixed at the start of the season Products manufactured against fixed orders Fabric sourced to meet only the fixed demand Excess fabric stock due to customers cancelling orders ARS (Automated Replenishment System) not affecting sourcing Sourcing for one style code done only once Sourcing is done according to the preplanned production schedule Fabric is not allocated to any channel, the FG is allocated to a specific channel If fabric is not sold off to the specific channel then the stock is offered to the same/ different channel the next season Once the plan for the season has been made the plan is not subjected to any major change 5. 1. 4 Key Points Plant Capacity Plant aptitude is allocated to various brands depending on their orders from trade shows/forecasts The allocated plant capacity is fixed for a year and is reviewed at the beginning of the season Excess fabric stock from previous season piled-up at factory (inventory build-up) Production Planning No separate capacity is present to cater to institutional sales Brands utilize excess capacity or schedule work orders to cater to Institutional customers Service level dependent on demand from other traditional channels Institutional Orders Factory receives direct interrogation from the Institutional Sales team Factory check reserve stock and ready sourcing options for fabric and trims (lower lead time to source trims than brands) Schedule production plan according to excess capacity available i. e unutilized by the brands 5. 2 Ascertain the current service level of the s ystem selective information Collection Data collected from mail records from Jan ( Mar 2012 Enquiries for less than 100 units neglected Orders divided into separate groups depending on ordered volume Overall service levels for the period is at 35% Current process can service only about 16% of the total volume of demand None of the ten thousand+ orders have been serviced Service level for orders between 2000-10000 is the highest Excluding the very large orders, the company serviced 40% of the total volume of demand Row Labels Accepted Despatched Enquiry Rejected Grand Total Service Level 500-2000 7 5 1 21 34 0. 6 2000-10000 2 4 2 5 13 0. 55 10000+ 2 4 6 0 Grand Total 10 15 5 47 77 0. 35 100-500 225 1725 3380 5330 0. 37 500-2000 5240 4050 1000 18400 28690 0. 34 2000-10000 14380 11500 9500 33500 68880 0. 4 10000+ 51000 144000 195000 0 Grand Total 19845 17533 High Turnaround Time Fabric catalogue not provided for IS 567 High Turnaround Time selective informatio n is decentralized 567 Unavailable fabric Low clarity regarding reserve stock level 441 Unavailable fabric Sourcing not done for Institutional Channel 441 High Turnaround Time Low clarity regarding reserve stock level 441 Low Priority of Institutional sales Volume of business w. r. overall business 441 Unavailable fabric Volume orders 405 Unavailable capacity No separate plant capacity for Institutional customers 245 Low favourableness Discount margin offered 245 High Turnaround Time Response time to get back on a query 245 Unavailable capacity Volume orders 189 Unavailable capacity Current utilization of factory for retail channels 175 Delayed Delivery No separate plant capacity for Institutional customers 175 Low Profitability outlay sensitive customers 147 Delayed Delivery Current utilization of factory for retail channels 125 Low Priority of Institutional sales Price sensitive customers 105 Competitor Action NOS range not always available 105 Competitor Action Agents working for multiple companies 45 5. 3. 4 Principal Issues Fabric Stock Fabric catalogue is not provided for IS leading to lack of clarity for agents and IS team Reserve fabric stock at factory level is not visible to IS team Sourcing for fabric is not done for Institutional customers Process Priority for Institutional orders are low Information is decentralized leading to a high turnaround time Bulk orders from Institutional customers leading to shortage of available capacity Slack information flow between brand and factory leading to delayed production Planning Lack of planning and subsequent strategizing for achieving targets Problems with forecasting the sales of this channel Manufacturing for orders are done on an ad-hoc basis 5. 4 Process Improvement Plan The proposed solution has been broadly divided into short term actions and long term actions Short term actions a. Channel potential Dispel value chain image Communicate benefits of the channel Change acco unting standards for brands for catering to IS b. Fabric stock visibility Catalogue of reserve stock in factory Swatch set, inventory record of current stock made visible to IS team c. Process capability Sourcing done on a limited scale by the IS team Book order for a limited quantity of core range during trade show Plant capacity set up to cater to Institutional customers exclusively Long term plans Revamp Order Interface Integrate sourcing solutions Create and maintain a database of mill Create an online portal for centralized information storage from the brand, factory and IS team Formulate ramp-up strategy Target a service level of 100% for orders within 5000 Process should be capable of handling 5000+ orders with a lead time of 45 days Target new segments to increase business volume Create a low price point brand, Byford, to cater to demand for price sensitive customers 5. 4. 1 Short term changes Channel Potential Apprehension of brands regarding profitability and quality of products offered Demand from this channel is an additional demand (basic difference from value channel) Quality assurance according to brand standards Adhering to predetermined discount slabs (PCMRP ratio) Potential to help oneself fabric stock liquidation (AS has already prepared swatch set) Process faculty NOS stock not always available leading to business loss in Core range IS team should form some sourcing capabilities by using the standard mills IS team can also book a certain range of core products during trade shows (brands currently identify 5 styles that will sell in IS) Separate plant capacity based on past year minimum demand per month for the past year Fabric stock visibility Swatch set of reserve fabric stock to be made and sent to the IS team A basic database of current stock from traditional channel that the brand can offer for IS Information clarity between the stake holders for fabric stock to be centralized Key Changes Central repository of information regarding reserve stock from factory and excess fabric stock from all national mills adhering to quality standards Repository periodically updated for fabric from current stock (dropped order) that can be offered to Institutional customers Agents have an upstream visibility regarding fabric on offer, therefore enabling queries to be addressed on first contact IS team and agent have stock visibility to reply to queries better, cut back the order capture time IS team itself explores sourcing options if fabric not present with brand Interaction with brand minimized regarding the fabric stock information Interactions between contact points in the whole process flow reduced Non-Availability of capacity Plant capacity not allocated to Institutional sales Delay in order delivery due to lack of capacity Separate line to cater to IS specially during peak season (Aug/Sept) Line can be used for traditional channel in case capacity unutilized Factory to have the capabilit y to manufacture 7000 units for IS per month 5. 4. 2 Long term plans Strategic goals Target a service level of 100% for orders within 5000 units Aim to serve 12 very large orders (revenue over Rs. 50,00,000 every fiscal year) Service an order with volumes big than 5000 in 45 days lead time (considering fabric sourcing is required) Expansion Pharmaceutical sector contributes to 90% of the current business Decrease dependency on one sector by exploring new avenues Actively ask agents to promote business to new customers and provide incentive if a new sector is breached (volume orders) Brand development Byford currently caters to Institutional customers Make Byford capable of servicing parallel industries like uniform orders, that are not being serviced by LBRDs Byford can service internal requirement for manufacturing industries that cannot be serviced because of price point issues (accept orders only beyond a certain volume) Key Changes Interface is created to capture the en tire information in an accessible format Interface provides information about style code, fabric properties, swatch, quantity available, estimated manufacturing capacity and price of product Processes typically addressed after an interrogative sentence is expedited to be processed beforehand Customer driven ordering system which minimizes the unstructured interaction between the various stakeholders Customer has ready information regarding the quantity available, fabric availability and tentative delivery dates Price, fabric and plant capacity issues are dealt with in a structured manner to avoid unnecessary delays n the system Information is centralized successfully and the interface can be further utilized by other channels (e. g a Trade customer wants to order a Core range) 5. 5 Process Control Auditing Measures Brands feel it is not profitable to sell to Institutional channel because of the 67. 3% switch price between MFL & MGLRCL Monthly targets are affected as brands service IS orders Separate auditing for sales made through Institutional channels Process Capability Measure of defects in delivery (quantity & quality) for orders accepted Measure to be Defects Per Hundred Opportunities Service level the number of accepted enquiriesProcess Dashboard a. Historical Data for the past quarter Revenue Selling price CBA Orders accepted Orders served Monthly plant utilization b. Exceptions Data outliers in business process Largest enquiry by volume Largest order accepted Longest delay c. Current status Enquiries under process Enquiries potentially worth over Rs 10,00,000 Actual sales vs target sales d. Future Current orders under process Utilization of plant capacity by IS Scheduled vs expected delivery dates 7. References Toyota Kata Managing People for Improvement, Adaptiveness and Superior Results by mike Rother The Toyota Way by Jeffey Liker