Submitted To:

Dr. Abdul Hoque

Professor & Chair
Department of Management
North South University

Submitted By:
Wasiuddin Ahmed ID: 121 0190 030
Rawkatun Nur ID: 133 0092 630
Tofayel Ahmed ID: 132 1802 030
Shadman Shahriar ID: 133 0145 030
Nusrat Rahman ID: 121 0512 030
S. M. Mostafizur Rahman ID: 121 0175 030
Atikur Rahaman Shaown ID: 121 0525 030
Mysha Zaman ID: 122 0376 030

Date of Submission: 11th December, 2016

 Letter of Acknowledgement

11th December 2016

Dr. Abdul Hoque

Professor & Chair

Department of Management

North South University

Dear Sir,

Thank you for giving us such an interesting project. We all are highly involved to this project and
thorough this project we were able to know how to prepare process blueprint and layout. This
project also helped us to develop our skill in creativity as well.

Furthermore, it was really exciting to work with Apex Footwear Limited. This project not only
improves our knowledge but also it helped us to improve our innovativeness. It was only possible
because of your skillful guidance, enlightened views, unfailing patience and valuable suggestions
for the accomplishment of our present study.

Sincerely,

Wasiuddin Ahmed ID: 121 0190 030

Rawkatun Nur ID: 133 0092 630

Tofayel Ahmed ID: 132 1802 030

Shadman Shahriar ID: 133 0145 030

Nusrat Rahman ID: 121 0512 030

S. M. Mostafizur Rahman ID: 121 0175 030

Atikur Rahaman Shaown ID: 121 0525 030

Mysha Zaman ID: 122 0376 03

 Table of Contents
Topics Page No.

1. Executive Summary 1

2. Brief Description of the Business 2

3. Mission, Vision & Location 3

4. Analysis of Existing production and 4-7

Operation Strategies
5. Analysis of the Facility Layout 8

6. Application of Production and Operation 9-10

Management concepts
7. Process Map 11

8. Elaboration of Process Map 12-18

9. Analysis of Quality Control Issues 19

10. Analysis of Demand Forecasting 20

11. Operation problems 21

12. Recommendations for Improvements in 22-23

Business Operations & Conclusion
 Executive Summary
We had been privileged to work with a very well-known company of our country known as Apex.
Apex Footwear Limited (AFL) is the leading manufacturer and exporter of leather footwear from
Bangladesh to major shoe retailers in Western Europe, North America and Japan. Apex is the local
manufacturing and retail wing of Apex Footwear Limited. While AFL has predominantly earned
both critical and commercial fame through export of high quality leather footwear in the
international arena. With over 191 own retail outlets and 380 authorized resellers, Apex ensures
nationwide coverage of its diverse range of footwear for its consumers. We have covered on how
Apex manufacturers its products, how they maintain a good relationship with such a mass number
of customer base. We visited their factory which is located at Gazipur and inspected their Supply
Chain Management skills. We examined how all the processes were being carried out one by one
and also witnessed their production criteria, in order to get a better picture of their management
systems, which enhanced our knowledge more about our project. Apex Footwear follows Batch as
their process design. Each of their designs is produced in bulk, in different batches. Apex use Cost
Based pricing strategy, Value Based priming, Economies of scale and After Sales perspective.
However, during the observation of their factory, we found out that their main concern is to convert
the raw material into a final product. The management hardly cares about how the products are
being made. Also the working environment they have is not as healthy as it should be. Also, they
box the footwear by hand. The time taken at each workstation to complete a particular job is not
organized. Communication gap exists between the suppliers and the merchandisers as well.
However these are minor constraints which we believe can and will be solved with the help of few
safety and precautionary measures. Apex can provide valuable content in the form of help, it can
also provide recommendations section too. These measures will help Apex to be more profitable
further in the future.

Page no.1
 Brief Description of the Business
Apex started their business operations in 1990. In 1993 Apex Footwear Limited was listed on
Dhaka Stock Exchange. In May 06, 2006 AFL got into a strategic alliance with an Italian company.
On December 27 they changed their name to Apex Adelchi Footwear Limited. Though, on
December 15, 2013 they changed their name back to Apex Footwear Limited. AFL spearheaded
the fare of significant worth included completed items send out in the leather segment of
Bangladesh and is likewise required in the neighborhood footwear retail business with the second
biggest shoe retail arrange in the nation. Open recorded and exchanged since 1993, AFL is
professionally overseen, at present utilizes more than 9,000 people and is in full consistence with
Corporate Governance Compliance Report under Section 2CC of the Securities Exchange
Commission Notification Order. While AFL has prevalently earned both basic and business
acclaim through fare of excellent calfskin footwear in the global field, Apex has tried to adroitly
make utilization of that aptitude to give high caliber, in vogue footwear to the Bangladeshi
purchasers. Through its nine in-house brands, in particular Venturini, Apex, Sprint, Maverick,
Moochie, Nino Rossi, Sandra Rosa, Twinkler and School Smart and one universal brand i.e. Dr.
Mauch - Apex conveys an enormous determination of shoes, shoes and non-footwear things,
guaranteeing that each of their esteemed client finds the item that is perfect for them.

Page no.2
 Mission
o To be a responsible corporate citizen
o To ensure sustainable growth
o To be a vendor of choice for our customers
o To create value for our shareholders

Vision Honest Growth

Location

Page no.3
 Existing production and Operation Strategies
As our venture obliges us to concentrate on one item and give legitimate support of the procedure
and design, we have chosen to work with Men's formal shoes. We are concentrating on the
assembling segment of the business. There are a few sorts of formal shoes delivered in the
industrial facility utilizing diverse quality cowhides. Some are sent out abroad and others are sold
in a few outlets all through Bangladesh.

Apex Footwear Limited is one of the main footwear brands of Bangladesh and they have a wide
exhibit of shoes, packs, foot adornments and so forth. Each of their outlines is created in mass, in
sectioned bunches. For instance, they have nine distinct sorts of formal shoes and each of them is
created in mass sum, in various clumps. As we are concentrating just on Men's formal shoes, we
can reason that Apex Footwear is taking after Batch as their procedure outline

For men:

Sandals
Formal shoes
Boots
Casual shoes

Page no.4
For women:

Sandals
Heels
Long boots

For children:

School shoes
Party shoes
Sandals

Page no.5
For others:

School bags
Ladies bags
Shoe care products
Socks

Product design
Apex Footwear Limited have a wide exhibit of shoes, packs, foot adornments and so forth. Each
of their outlines is created in mass, in sectioned bunches. For instance, they have nine distinct sorts
of formal shoes and each of them is created in mass sum, in various clumps. As we are
concentrating just on formal shoes, we can reason that Apex Footwear is taking after Batch as their
procedure outline

Page no.6
 Strategies
Cost Based Pricing Strategies

It implies adding standard markup to the items' cost. Venders can decide cost considerably more

effortlessly than it can appraise request. By coordinating the cost to the cost, dealers are improving

the estimating assignment. Value rivalry is minimized in light of the fact that costs have a tendency

to be comparable. It is faired to both purchasers and merchants. Merchants don't take the benefit

of purchasers when the last's request more intense, and dealers win a reasonable quantifiable profit.

Value Based Pricing Strategies

Setting price based on buyers perception of value rather than the sellers cost.

Economy of Scales

The processing plant utilizes capital concentrated techniques like slicing and sewing the shoes to

acquire expansive volume yield at a lower cost.

After Sales Perspective

-It repairs the shoe if it defects within one month of purchase.

- If it is not repairable it provides customer a new one.

- To receive after sales service they want to go the same outlet from which they purchase the
product.

- In export business its partners (Adelchi Footwear, Italy and third parties) provide the after sales
service.

Page no.7
 The Facility Layout

The processing plant is guaranteeing most extreme usage of its floor. There are 12 line of machines

on every floor and every line has the ideal number of machines in them. The design of work range

on every floor guarantees that there are a lot of space between every line which encourages laborers

simplicity of development and permits floor director and quality investigators to screen their work

without bringing on interruption in the item process.

Environment elements like satisfactory lighting and ventilation are likewise present to guarantee

that the specialists can perform viably. we watched that the industrial facility's work station are set

up in a settled position and all materials are purchased to the machines .The development of the

item starting with one workstation then onto the next proceeds in a smooth stream. The employees

helped us to determine the types of layout that they use for their production process. This is in

accordance with the way that they utilized the redundant or sequential construction system handle

sort to deliver in heft of homogenized shoes. Different specialists are relegated for various kinds

of jobs. Such as somebody is keeping up the machines, someone is consolidating the blend;

somebody is in the bundling division.

Page no.8
Production and Operation Management concepts

After visiting the factory we identify new operation and production concept Apex Footwear

Limited use in their factory. We also interview some production related employees, and from their

conversation we able to relate some concept. All concept are given blew:

Types of process: In Apex production line consist of multiple work station, where each

employees responsible for particular work. For example if one employee assign task is attach heel,

he or she will do that repetitively. So from this example we can easily understood that, apex

Bangladesh limited use repetitive process in their overall production.

Types of layout: For supporting the repetitive process apex Bangladesh use product layout.

Through this product layout apex can easily achieves smooth and rapid flow of large number of

goods. In foot manufacturing, apex separate series of standardized task and use specialized

equipment and labor for mass production.

Forecasting: apex demand forecasting is not based on any particular method. They mainly use
time series for their demand forecasting. When they use time series analysis, they mainly focus on
seasonality and trend. For example, in Eid festival shoes sell volume increase a lot, so apex have
to produce additional amount of product for meet the demand.

Quality assurance: we notice that apex inspection policy is very hard. After finishing every
process they inspect the quality of the unfinished goods. They use automated software for finding
defect product with in the process. They put more emphasis on finding and correcting defect
product before reach the market. So this all attempt fall under quality assurance.

Page no.9
Division of labor: as we mention before each employee is responsible for a specific work in

the production process, so they are specialized in their specific work and also repetitive nature of

the work give each employee huge advantage.

Economics of scale: as we mention earlier that division of labor and highly standardized

production process help apex to achieve economies of scale.

Safety stock: Apex maintain a certain amount of raw material in safety stock to protect

uncertainty. For example the stock extra 1 month raw material for their smooth production.

Bottleneck: after completing the finish product, its takes two days to package and deliver to the

retailer shop. So this is a bottleneck for apex. Apex focuses on to reduce the time lag between

finish product and packaging

Pull system: after getting the order from retailer all over Bangladesh they design a systematic

approach for production. Total quantity of raw material need for the production estimate and after

collecting all the raw material they start their production. So apex follow pull strategy.

Supply chain management: we find out the supply chain management in practice when we

visit the factory. Apex maintain good relationship with their supplier and they also maintain good

contact with their retailer and distributor.

Page no.10
 Elaboration of Process Map
1. Raw material stock on Apex

The raw material which includes the chemicals used for making cement adhesive, rubber latex and
sole (both inner and outer), cloth used for making upper, material used for making binding , thread
and packing cartoons etc. are stocked in the warehouse. Inventory of all the above items is properly
maintained with the help of a Material Stock Position chart made on the walls of the warehouse
and a computerized Inventory Database.

Every department has been allocated a maximum stock limit beyond which they cannot store the
raw materials for themselves. It has to be used as frequently as possible. Every fortnight, the stocks
and usage is reviewed. The transmission of raw materials from stock warehouse to respective
departments is recorded and same is done with the transmissions between various departments.
All this data is readily available for review to all departments and can be checked anytime.

Page no.12
2. Cement and Latex manufacturing

The cement adhesive and rubber latex are the main chemicals used to paste together the different
parts of a shoe, are manufactured in the plant itself. Both these materials are produced keeping in
mind the exact requirements and also the correct specification, which is the right mix of chemicals
to make it the best pasting element and get the desired quality.

3. Sole pull manufacturing

The inner and outer soles required in the shoe are also produced in house. Huge rubber sheets
measuring 3 ft. x 2 ft. having a thickness of approx. 2 cms are first are heated to a high temperature
and then cut into pieces of different sizes using specialized machines.

Sheet Manufacturing: The rubber compound is mixed, grounded and then processed at high
temperature to convert it into sheets of uniform length and thickness. The sheets thus prepared are
then placed in a curing chamber for 8 minutes where they again processed at high temperature of
around 170 degree Celsius. At such a high temperature, the sheets expand and then sent for
vulcanization where it is processed for 3 hours to set the shrinking limit of rubber. These sheets
can be cut only after 2 weeks of vulcanization. This is known as seating process.

Page no.13
4. Making Binding

A binding is required on the outer of the shoe to bind the edges of the cloth upper. This binding
material is also made within the plant, using cloth. It is machine stitched onto the cloth upper.

5. Folding, cutting and stamping

The cloth that forms the shoe upper is procured from dyeing. It is first folded into huge lots and
then cut into pieces of uniform sizes according to the different sizes lots. These cloth pieces are
then stamped with what may be called a batch number and the shoe size. An example of a batch

No. may be G-321 8422. In this code, G represents plant code of the Gazipur factory, 321 is the
code of the particular workstation and assembly line, 8 represents the year of manufacture, 42 the
week and 2 signifies the day of the week in which production has been done. This stamping
particularly helps if there is a defect found out in the shoe after sale. After stamping is done, the
upper is sent for stitching.

Page no.14
6.Stitching

The cloth received after stamping is set for stitching and making it into a proper upper of the shoe.
The stitching process starts with folding of the piece and stitching it in a particular fashion to give
the shape of an upper. Next, it is sent for stitching the bending onto the edges of the shoe. After
the binding on the edges has been done, the shoe is transferred further where lace holes and flips
used under that are stitched onto the upper. The last step in the stitching process is to put laces into
the shoe, which is done by hand. The upper of the shoe is now ready to be sent assembly process.

7. Assembly

The assembly process uses a dual level conveyor belt as can be seen in the picture.

Page no.15
A fact worth noting is that the conveyer does not have a linear arrangement of workstations; rather
it is an ellipsoidal conveyer with different workstations positioned all around it. At first glance, it
is not easy to comprehend as to wherefrom where the process begins. However, a closer look
reveals that fully assembled shoes are handpicked away from the conveyer design, it is a very well
organized and systematic assembly line configuration where none of the employees sit idle at any
point of time. Thus minimizing idle time losses.

It is then placed in a drying chamber to dry the latex wherein the temperature is around 70 degree

Celsius.

Page no.16
On the latex is dried and the shoe is taken out of the chamber. It is again placed on the conveyor
and the next person puts the outer sole on the conveyor as well. The sole is then pasted on to the
shoe tightly and pressed by a large bag containing water. This water filled bag is a part of the
conveyer only, and water is used to prevent the formation of air bubbles, which may lead to
manufacturing defects.

The person sitting next checks once again that there is no gap in the pasting. The side foxing is
then pasted on the dried latex and the shoe moves on. The next employee pastes the Apex logo on
the back of the shoe and also presses the side foxing. On the next station, the toe guards, both side
strips as well as circular one are available to the employee, coated with cement. Both of these are
pasted on the shoe. The shoe is now prepared to be vulcanized and hence is transferred by the last
worker on the conveyer, from the conveyer to the conveyer trolley.

Page no.17
8. Vulcanization

After the assembly process, though the shoes are ready but they are still very sticky and not set for
use. Thus, they need to be vulcanized to harden the shoe and ensure that the parts have been pasted
properly and the chemicals used have dried up. The shoe which are already put in trolleys are then
sent to the vulcanizing chamber. Around 19-20 trolleys are sent in 1 chamber with about 70 pairs
in each trolleys. The vulcanization process requires an approx. time of 1 hour, 135-140 degree
Celsius of temperature and 3 atmosphere of air pressure. The shoes are then sent to the quality
checks department.

9. Quality Control

After the vulcanization process, the shoes are set to be packed but before that an important step is
to check the quality i.e. quality control. In Apex, every shoe is checked manually by an inspector
and is assigned the following grades:

1. A-This is the best grade stating that the shoe is ready to be packed and ready for sale.

2. B-This grade shoe becomes a factory seconds product and thus is sold at low prices.

3. C-This is the lowest grade which can neither be sold in seconds lot nor repaired and is thus cut
and disposed off.

10. Packing:

The shoes once checked are then packed very thoughtfully to protect the shoe from any kind of
damage. Each pair is first rolled inside plastic sheets and then put into cardboard boxes, made
exactly to size. These small boxes are them put into large ones, the master cartoons for
transportation purposes. Each box is labeled with its destination address and other details such as
batch, manufacturing information etc.

The boxes are not stored at the plant for more than 2 days. They are immediately delivered to their
destination retail stores which stock it themselves.

Page no.18
 Quality Control Issues
Assurance of quality in overall production process only can ensure superior product. Apex
Bangladesh limited ensure quality in 3 steps:

Inspection
Apex Bangladesh limited us inspection as a quality appraisal of standard product. They complete
inspection in several process
I. Raw material and purchase parts
II. In every steps od production
III. Before entering into critical process
IV. Finished product
V. Before product distribution

Physical and mechanical test

In laboratory Apex Bangladesh limited put tremendous effort for ensuring quality by:
I. Sole bonding test
II. Heeling test
III. Color shading and odor test
IV. Heel attachment strength
V. Shoe lace Strength and Durability
VI. Waterproof test and burn test.

Process control and continuous improvement

Apex Bangladesh limited uses automated process with some predetermined standard. If any parts
of the products doesnt match with predetermined standard it signals that quality is not up to the
mark, then the default part of the product sent for immediate correction. So through this automated
software, Apex Bangladesh ensures process control and have intention to continuous improvement
by looking forward to new technology. They also use histogram, mean chart, control chart, run
test for evaluating quality.

Page no.19
 Demand Forecasting
Demand forecasting refers to the prediction of possible demand for a product or a service on the
basis of the past events and important trends in the past.

The demand forecasting of Apex Footwear Limited does not fully fall under any specific
traditional method of forecasting. After studying the demand forecasting method of the factory,
we revealed that it is most similar to the Time-Series method of forecasting. In this method,
forecasting is being done at regular intervals (e.g. hourly, daily, weekly, monthly, quarterly, and
annually). This forecasting technique is made on the hypothesis that future values of the series can
be estimated from past values.

Apex Footwear Limited does demand forecasting annually. According to the employees of this
group, it is tremendously difficult to forecast future orders. However, they make calculated
guesses. For example, in a particular year, they are doing almost 68 million BDT worth of GAP
orders. The following year, they predict that the order will increase by 12%. Therefore, they will
then manufacture and export products worth 72 million BDT. The factorys forecasting process is
not very effective as they are doing the forecasting through one viewpoint only. Poor forecasting
might result in rush orders, stock-outs or high inventory or inefficient resource utilization.

Despite having a booming footwear industry, the companies involved in the business do not yet
have any classy methods of forecasting demand. Hence, a recommendation for the factory would
be to use the judgmental forecasting along with the time-series method to do the forecasting for
future demand of its products.

Page no.20
 Operation Problems
The factory does not use any specific quality monitoring tools. So sometimes they face
some problem regarding product standardization.

They boxed the footwear by hand. This process is very time-consuming as it is done
manually. As this takes a long time, it adds to the aforementioned bottleneck. As workers
cannot start packing a new lot until the old lot is finished, products are put on hold for three
hours, which can demonstrate to be very costly.

The time taken at each workstation to complete a particular job is not organized. Instead,
the number of pieces which each workstation has to complete in a day is specified.

Each worker is simply concerned with completing his/her job and is not responsible for the
quality of the product. Only the quality inspectors are responsible for maintaining the
products quality. Hence, workers do not examine their work minutely, since they assume
that any errors/lapse in quality will be selected up by the quality inspectors at the inspection
tables.

Communication gap exists between the suppliers and the merchandisers. Communication
is mainly done in English. But their workers and employs are not good in English. This
often leads to misunderstood instructions which cost the factory both in terms of money
and time.

Doing the same routine work make them boring and often leads to carelessness which in
turn leads to increased errors, thereby rising costs for the company.

Work not equally distributed. Inequality in work makes them demotivated.

Page no.21
Recommendations for Improvements in Business Operations
Enter into cooperative sales agreemants

contact companies that sell a complementary product or service with a request to sell their products
also. for example, manr security company like- ELITE FOCE, NSU SECURITY they maintain a
specific dress code with specific shoes. so, APEX can provide those shoes through cooperative
sales agreements. And it can also increase their sales and help to gain profit.

Raise or lower prices for lower middle class

Apex shoes can offer lower prices for the lower middle class people, those who only efforts 400
or 500 each pair of shoes. Because everyone cant effort a high price tag.

Bundle products

APEX shoes were intended for the mass market and priced to attract women and men who wanted
a nice look without the cost of designer label. so, APEX can offer handbags for women and
corporate bags for men to complement each pair of shoes.The management team can come up with
a BUNDLE shoes and handbags together for a price that was 25% lower than if the products
were purchased seperately.

Offer special discount

Discounts create a special buying opportunity in consumres mind, often spurring them to take
action. APEX can offer discounts on lmited category, school shoes or all products in a store wide
sale.In fact, they can crete a sale environment for almost any reason:

Quantity Discount- When two or more of the same product are purchased at the same time.

Tie-In-Discount-when two or more different products are purchased at the same timelike-
shoes and handbags.

Seasonal Discount-when products are brought within a specific time-frame, like-fall, winter,
festives- EID,PUJA etc.

Page no.22
Offer cupon programs

APEX can offer cupons through newspaper and magazines cupons have been long an effective
way to publicize products and increase sales.They can also introduce electronic cupons and reduce
the cost of distribution even further.

Become a resource

APEX can provide valuable content in the form of help, advice and tips etc. they can provide some
experts on each and every outlet. and they ask customer for any kind of help like-who they are
shopping for and what that person likes so they can give personalize suggestions. And it help to
build customer relationships.

Conclusion
Apex being one of the leading companies of Bangladesh, has its constraints too. Apex having a
huge customer base, has a high potential for growth and can rapidly improve their performance.
This report has provided some interesting insight into what kind of service the customers are
getting and what kind of service and treatment they intend to get in the future. It also helped us to
capture the perception of their own loyalty to Apex and we figured out that the relationship
between Apex and its customers are strong. However, given that some drawbacks still exist in
Apex, just like all the other companies, we believe that Apex is growing and planning its business
according to what seems best for their company growth.

Page no.23