Production and Planning

Production that consists of a series of sequential operations to produce a desirable product acceptable
to customer and meets the customer demand. Production is and organized activity which has got
specific objectives “The efficiency of production system is stated in terms of is ability to produce the
products with required quantity and specified quality at predetermined cost and pre-established time”.
Thus a production planning starts with the analysis of the given data e.gdemand for products , delivery
schedule, etc. and on the basis of the information available

Thus production planning and control can be defined as the “direction and coordination of firm’s
resources towards attaining the prefixed goals”

A production (or manufacturing) planning and control (MPC) system is concerned with planning and
controlling all aspects of manufacturing, including materials, scheduling machines and people, and
coordinating suppliers and customers

An MPC system's design is not a one-off undertaking; it should be adaptive to respond to changes in
the competitive arena, customer requirements, strategy, supply chain and other possible problem

There are three areas of influence on the production planning and control

1. Internationalization: Growth in international markets has had a crucial impact on the MPC context..
The composition of supply chains change based on opportunities. This requires international,
transparent and effective MPC systems.
2. The role of the customer: Meeting customer requirements and service demands is crucial. Hence,
both product and process flexibility is needed to produce customized products at variable volume.
3. Information technology: Responding to global coordination and communication requirements calls
for the deployment of information systems to link functionally disparate, geographically dispersed and
culturally diverse organizational units.

 Characteristics
A production planning and control system should match the needs of the firm. In designing the MPC
system, the nature of the production process, the degree of supply chain integration, customer
expectations and needs of the management should be taken into account. The MPC system should
smoothly integrate with other company functions as well as the operations of other companies in the
supply chain
 Need for PPC
Production system can be compared to the nervous system with PPC as a brain. Production planning
and control is needed to achieve:
1.Effective utilization of firm’s resources
2.To achieve the production objectives with respect to quality, quantity, cost and timeliness of
delivery.
3.To obtain the uninterrupted production flow in order to meet customers varied demand with respect
to quality and committed delivery schedule.

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  Object of PPC
1.To organize the production facilities like machines , men etc, to achieve stated production objectives
2.Optimum scheduling of resources
3.To conform to delivery commitments.
4.Materials planning and control.
 Duties of the Factory Planner
 Take information from PEand loads factory appropriately,scheduling and sequencing work
inline with delivery schedule
 Work closely with Factory
 Manager to ensure productionefficiency
 Lease with main fabric suppliers toorder fabric

 Functions of Production Planning and Control

Production planning and Control department is one of the important department for the apparel
manufacturing company. In the context of the apparel manufacturing primary roles of the Production
Planning and Control (PPC) department has been listed below. Each functions has been explained
briefly just overview about the task.  To know details about the task read related articles.

1. Job or Task Scheduling: Preparation of time and action calendar for each order from order
receiving shipment. The job schedule contains list of tasks to be processed for the styles. Against
each tasks planner mentions when to start a task and what is dead line for that task. Name of
responsible person (department) for the job is being listed. For example, scheduling planned cut
date (PCD), line loading date etc. 

2. Material Resource Planning (Inventory): Preparation of Material requirement sheet according

to sample product and buyer specification sheet. Consumption of material (fabric, thread, button,
and twill tape) is calculated and estimated cost of each material.

3. Loading production: Planner defines which style to be loaded to the production line and how
much quantity to be loaded.

4. Process selection & planning: Processes needed to complete an order vary style to style.
According to the order (customer) requirement PPC department select processes for the orders.
Sometime extra processes are eliminated to reduce cost of production.

5. Facility location: Where a company has multiple factories (facilities) for production and
factories are set for specific product, planner need to identify which facility will be most suitable
for new orders. Sometimes there may be a capacity shortage in a factory, in that case planner
need to decide which facility will selected for that orders.

6. Capacity planning: PPC department plays a major role during order booking. They decide
(suggest) how much order they should accept according to their production capacity. Allocating
of total capacity or deciding how much capacity to be used for an order out of total factory
capacity.

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 7. Line planning: Preparing detailed line planning with daily production target for the production
line. Most cases line planning is made after discussing with production team and Industrial
engineers. Read -What is Line Planning?

8. Follow up and execution: Whatever plan is made is executed by PPC department. PPC

department keeps close look whether everything is progressing according the plan. Chasing other
department heads on daily basis to keep plan on track. They update order wise completed tasks
on the Time & action Calendar.  When they found something is going to be late they expedite
and create an alarm about the delay. 

 Project planning
Project planning is a discipline for stating how to complete a project within a certain timeframe,
usually with defined stages, and with designated resources. One view of project planning divides the
activity into:

 Setting objectives (these should be measurable)

 Identifying deliverables
 Planning the schedule
 Making supporting plans

 Steps of Project planning:

1. Market survey
2. Project capacity
3. Demand
4. Quantity andLabor
5. Raw material source
6.. Site selection:
7. Plant lay out
8.Design and drawing
9. Materials equipment
10. Operation planning
11. Machine loading
12. Sub contract and organizational lay out

 competitiveness

Ability of a firm or a nation to offer products and services that meet the quality standards of the local

and world markets at prices that are competitive and provide adequate returns on
the resources employed or consumed in producing them.

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Competitiveness is defined by the productivity with which a nation utilizes its human, capital and
natural resources. To understand competitiveness, the starting point must be a nation’s underlying
sources of prosperity. A country’s standard of living is determined by the productivity of its economy,
which is measured by the value of goods and services produced per unit of its resources. Productivity
depends both on the value of a nation’s products and services – measured by the prices they can
command in open markets – and by the efficiency with which they can be produced. Productivity is
also dependent on the ability of an economy to mobilize its available human resources.

True competitiveness, then, is measured by productivity. Productivity allows a nation to support high
wages, attractive returns to capital, a strongcurrency – and with them, a high standard of living. What
matters most is not exports per se or whether firms are domestic or foreign-owned, but the nature and
productivity of the business activities taking place in a particular country. Purely local industries also
count for competitiveness, because their productivity not only sets their wages but also has a major
influence on the cost of doing business and the cost of living in the country.

What Matters for Competitiveness

Almost everything matters for competitiveness. The schools matter, the roads matter, the financial
markets matter and customer sophistication matters. These and other aspects of a nation’s
circumstances are deeply rooted in a nation’s institutions, people and culture. This makes improving
competitiveness a special challenge, because there is no single policy or grand step that can create
competitiveness, only many improvements in individual areas that inevitably take time to accomplish.
Improving competitiveness is a marathon, not a sprint. How to sustain momentum in improving
competitiveness over time is among the greatest challenges facing countries.

Strategy
1.A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to
a problem.
2. The art and science of planning and marshalling resources for their most efficient and effective use.
The term is derived from the Greek word for generalship or leading an army.

Forecasting
  A planning tool that helps management in its attempts to cope with the uncertainty of the future,
relying mainly on data from the past and present and analysis of trends.

Forecasting starts with certain assumptions basedon the management's experience, knowledge,

and judgment. These estimates are projected into the coming months or years using one or
more techniques such as Box-Jenkins models, Delphi method, exponential smoothing, moving
averages, regression analysis, and trendprojection. Since any error in the assumptions will result in a
similar or magnified error in forecasting, the technique of sensitivity analysis is used
which assigns a range of values to the uncertain factors (variables). A forecast should not be confused
with a budget. See also backcasting.
Elements of good forecast:-

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1. The forecast should be timely.

2. The forecast should be accurate.

3. The forecast should be Reliable.

4. The forecast should be meaningful unit.

5. The forecast should be writing.

6. The forecasting technique should be simple.

7. The forecast should be cost effective.

 Steps in the forecasting process:-

1. Determine the purpose of the forecast.

2. Establish a time Horizon

3. Selecting a forecasting technique.

4. Gather and analyze data.

5. Make the forecast..

 Types of forecasting:

1. Judgmental forecasting.

2. The series forecasting.

3. Associative forecasting.

4. Judgmental forecasting: (Opinion based:- Consumer, Sales, Forecast, Staff, Manager, Executive)

.Time series Forecasting:-

1. Trend.

2. Seasonality.

3.Cycles.

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4. Irregular variation.

5. Random.

 Associative model:-

1. Naïve method.

Period Actual Change Forecast

Previous 50

Present 53 +3

Next 53+3=56

2.Average-Moving average

Period Demand

1 42

2 40

3 43

4 40

5 41

We know,

Ft= (43+40+41) ∕ 3 =41.33

3.Weighted moving average.

4..Tend Equation.

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5. Exponential smoothing

Next forecast =previous forecast +α (Actual forecast- previous forecast)

Product and Service Design:

Product Design combines ergonomics with product and business knowledge to generate ideas and
concepts and convert them into physical and usable objects or services. The discipline covers the
entire range of activities from concept, manufacturing, testing to product launch. Product Designers
conceptualize and evaluate ideas and themes they find profitable. The designers make these ideas
tangible through products using a systematic approach.

Service design is an activity of organizing and planning people, communication and material
components in order to improve service quality. A service is anything that is done to or for a client and
is created and delivered simultaneously. The two most important issues in service design are the
degree of variation in requirements and the degree of customer contact in which determines how
standardized the service can be. In addition, concepts and ideas generated are captured in sketches or
in service prototypes. The strong visual element, combined with the opportunity to test and rapidly
change services and interfaces, delivers real value in today's competitive markets.

Capacity Planning:

Design of the production system involves planning for theinputs, conversion process and outputs of
production operation. The effective management of capacity is the most important responsibility of
production management. The object of capacity management is to match the level of operations to the
level of demand

In information technology, capacity planning is the science and art of estimating the space, computer
hardware, software and connection infrastructure resources that will be needed over some future
period of time. A typical capacity concern of many enterprises is whether resources will be in place to
handle an increasing number of requests as the number of users or interactions increase. The aim of
the capacity planner is to plan so well that new capacity is added just in time to meet the anticipated
need but not so early that resources go unused for a long period. The successful capacity planner is
one that makes the trade-offs between the present and the future that overall prove to be the most cost-
efficient.

The capacity planner, using business plans and forecasts, tries to imagine what the future needs will
be. Analytical modeling tools can help the planner get answers to "What if" scenarios so that a range
of possibilities can be explored. The capacity planner is especially receptive to products that are seen
to be scalable and also stable and predictable in terms of support and upgrades over the life of the
product. As new technologies emerge and business strategies and forecasts change, capacity planners
must revisit their plans. In Apparel Manufacturing, “Production capacity” is one of the most important
criteria used for vendor selection by the buyers. It is because; the production time of an order is
directly proportional to vendor’s production capacity. So it is very important that marketing and
planning personnel should aware about the production capacity of their production units. 

Capacity of a factory is primarily expressed in terms of total machines factory have. Secondly, how

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much pieces the factory produces on daily for the specific products? In general, total numbers of
machines in a factory mostly remains same for a period. But factory may produce various types of
product during the season. According to the product (style) category, machine requirement may
change and daily average production in each style may vary. So to be specific during booking orders,
planner should know exactly how much capacity he or she needed to procure the order in a given time
period. 
A factory’s capacity is presented in total minutes or hours or in pieces (production per day). The
method used to calculate capacity has been explained in the following. To calculate Daily production
capacity (in pieces) one needs following information. 

1. Factory capacity in hours 

2. Product SAM 
3. Line efficiency (Average)

1. Calculation of factory capacity (in hours): Check how many machines factory has and how many
hours factory runs in a day. For example suppose, 
Total number of machines = 200 
Shift hours per day = 10 hours 
So total factory capacity (in hours) = 200*10 hours = 2000 hours 

2. Calculation of Product SAM (SAM): Make a list of product category that you manufacture and
get standard minutes (SAM) of all products you make from work study engineers. If you don’t have
product SAM then calculate the SAM. Or you can use average SAM of the products. Suppose you are
producing shirt and its SAM is 25 minutes.

3. Factory Average Efficiency: This data is collected from industrial engineer. Or calculate it with
historical data. Suppose average line efficiency is 50%. Read the article - How to calculate efficiency
of a production line or batch?

Calculation of production capacity (in pieces): Once you have above information use following
formula to calculate production capacity. 
Production capacity (in pieces) = (Capacity in hours*60/product SAM)*line efficiency 

For Example: Suppose a factory has 8 sewing lines and each line has 25 machines. Total 200
machines and working shift is 10 hours per day. Total factory capacity per day is 2000 hours (200
machines * 10 hours). If factory is producing only one style (Shirt) of SAM 25 minutes and used all
200 machines daily production capacity at 50% 
= (2000*60/25)*50% Pieces 
= (2000*60*50) / (25*100) Pieces 
= 2400 Pieces
[Note: Production will vary according to the line efficiency and during learning curve or in the initial
days when style is loaded to the line] 

Production (capacity) planning is normally done based on sewing capacity. Having knowledge of the
capacity in other processes (internal or external) is also very important. Otherwise planner may fail
and will not be able to meet the dead line. Other departments such as Cutting room capacity, Finishing
room capacity, Washing Capacity and capacity of the value added jobs. 

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In general, terms capacity is referred as maximum production capacity, which can be attained within a
normal working schedule.

For an organization, capacity would be the ability of a given system to produce output within the
specific time period. Capacity is the rate of productive capability of a facility. Capacity is usually
expressed as volume of output per period of time

1. Sufficient capacity is required to meet the customers demand in time

2. Capacity affects the cost efficiency of operations
3. Capacity affects the scheduling system
4. Capacity creation requires an investment

Capacity planning decisions are taken based upon the consumer demand and this is merged with the
human, material and financial resources of the organization. The process of capacity planning is
shown

Environmental scanning

Demand forecasting

Estimation of present capacity

Alternative capacity plans to meet demand

Quantitative and economic analysis of Various plans

Select the best plan

Implementation

Cost–volume–profit analysis:
Cost–volume–profit (CVP), in managerial economics, is a form of cost accounting. It is a simplified
model, useful for elementary instruction and for short-run decisions.

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CVP analysis expands the use of information provided by breakeven analysis. A critical part of CVP
analysis is the point where total revenues equal total costs (both fixed and variable costs). At this
break-even point, a company will experience no income or loss

One of the main methods of calculating CVP is profit–volume ratio which is (contribution /sales)*100
= this gives us profit–volume ratio.contribution stands for sales minus variable costs.

Therefore it gives us the profit added per unit of variable costs.

Model

Basic graph

Basic graph of CVP, demonstrating relation of total costs, sales, and profit and loss

The assumptions of the CVP model yield the following linear equations for total costs and total
revenue (sales):

These are linear because of the assumptions of constant costs and prices, and there is no distinction
between units produced and units sold, as these are assumed to be equal. Note that when such a chart
is drawn, the linear CVP model is assumed, often implicitly.

In symbols:

where

 TC = Total costs

 TFC = Total fixed costs

 V = Unit variable cost (variable cost per unit)

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  X = Number of units

 TR = S = Total revenue = Sales

 P = (Unit) sales price

Profit is computed as TR-TC; it is a profit if positive, a loss if negative.

Break down

Costs and sales can be broken down, which provide further insight into operations.

Decomposing total costs as fixed costs plus variable costs.

One can decompose total costs as fixed costs plus variable costs:

Total Quality Management (TQM)

Introduction:
In the 1950s, the Japanese asked W. Edwards Deming, an American statistician and management
theorist, tohelp them improve their war torn economy. TQM is now practiced in business as well as in
government, the military, education, and innon- profit organizations including libraries (Jurow&
Barnard, 1993).TOTAL quality Management strives towards the achievement of quality in everything
one does. Quality meansconformance to customer requirements The function of quality has evolved
from moreproduct inspection to an all- encompassing TQM. It is no longer just a Technical function; it
has become amanagement discipline.In a manufacturing organization, TQM generally starts by
sampling a random selection of the product. Thesample is then tested for things that matter to the real
customers. The causes of any failures are isolated,secondary measures of the production process are
designed, and then the causes of the failure are corrected. The error band is usually tighter than the
failure band. The production process isthereby fixed before failing parts can be produced.
Evolution:
The philosophy of Total Quality Management is evolved, with the change in market conditions and
customer
requirements time to time.
 Quality Control
Definition:

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Quality:
Good Quality does not necessarily mean high quality. It means a predictable degree of uniformity and
dependability at low cost, which suits to the market.

Total Quality Management:

A cost effective system for integrating the continuous quality improvements of people at all levels in
an
organization to deliver product services, which ensure customer satisfaction.The concept of bringing a
quality focus to every aspect of an operation from raw materials received to accountinginvoice
accuracy. Companywide quality management system involving all employees in activities aimed at
improvement of productquality, production process and services.
Dimensions of Quality:
Objectives of TQM:
Total Quality requiremanagement practices to shifttowards a new form. It includes
these components:
1. Customer needs, not production,are focus.
2 . The system becomes more horizontal with everyone workingtowards a single goal, to serve the
customer better
3. Everyone is considered in
decision- making.
4 . Employee empowerment andresponsibility replace rigid policies and procedures.
5. Cooperation across function is frequent.
6. Team takes on some of the roles of departments.
7. Workers are cross- trained and their jobs are more flexible.

The most common pit-falls in Total Quality Management:

1. The TQM approach is not focused
The company fails to identify the key factors that represent quality strategic objectives are not
considered.

2. The effort if led by bur accuracy and paper work

Quality becomes an added burden rather than an integrated aspect of operations. The principles of
TQM such assimplification and cycle time improvement are not applied to the quality process itself.
3. Using TQM as a “Quick – f ix”
The company is in trouble and TQM viewed as a way to quickly solve a variety if problem. Managers
look forshort – term results and are frustrated when they aren’t quickly achieved. The program is
abandoned and theefforts wasted.
4. Data is hard to obtain and use
TQM is not based on facts because people within the company don’t have the right data with which to
makedecisions. Too much data can often be as detrimental as too little.

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5. Intra company conflict s slow down TQM
Staff departments in particulars are reluctant to give up their “territories”. As a result the cross-
functional approachrequired by TQM becomes impossible.
6. Poor planning derails TQM
Sometimes a company uses an “off the shelf” approach to TQM, often sold by a consultant. Managers
don’t realize the extent to which TQM must be customized for each company.
7. Measuring the wrong thing
The company fails to focus on characteristics that actually drive quality. It ignores the fact that these
blemishes are irrelevant to customers, who are much more interested in on- time delivery.
Total Quality Management Model:
In order to develop a systematic approach to TQM planning and implementation, a good strategy is to
take abook at companies which are recognized quality leaders in the field. Especially firms that have
been awarded theprestigious.
1. Leadership
Quality values and customer orientation flow from senior managers. It’s important that they commit
themselves to
quality and that they devise the systems and strategies for achieving it. It’s especially important that
seniormanagers be visible in their quality activities. They should be active in quality planning, and
should take the lead in communication quality goals to the organization.
2. Information and Analysis
This is the brain center of the quality improvement process TQM emphasizes management by fact.
Reliable andtimely data are the key ingredients in tracking quality and making improvements in
process.To achieve total quality, your company must consider a wide range of information: customer,
product and serviceperformance operation, market dynamics competition, costs and supplier data.
3. Strategic Quality Planning
The idea of TQM is not for quality to become your company’s sole focus. Rather, you must formulate
yourbusiness plans in such a way that quality contributes to productivity and ultimately to financial
improvement.Total quality cannot be added after you have determined long term or short term plans.
The idea only makessense when it is in corporate into evaluation of projection market conditions,
competitive climate and financialsituation.
4. Human Resources development and Management
The success of you TQM effort will ultimately depend on the utilization of Human resource. Your
employees arethe ones who will implement quality process, who will make sure quality levels are
maintained, and who willcontribute ideas for continuous improvement.
5. Management of Process Quality
TQM continually return to the idea of “process”. This is because of the emphasis on designing it on.
The answerto all quality problems ultimately lies in improving a process or system.
6. Quality and Operational Results
The analysis and improvement of process is an important emphasis of TQM, but only as a means to
achievingresults. You should never become so caught up in the planning or implementation of TQM
that you lose sight offact that it is a result- oriented approach.
Implementation of Total Quality Management:
1. Top management commitment
Sometimes senior manager become enthusiastic about the ideas and benefits of TQM. May be they are
beingpressed by the customer to adopt a quality program. May be they thinking TQM will add the
company prestige.
TQM fails in the companies where enthusiastic but no commitment.
2. Learn about TQM

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Senior manager should spend time learning about TQ concepts before moving ahead being by reading
bookand articles about various factors of TQM. Then send related managers to workshop or
presentation onto. Theymay be available through local business organization.
Some companies use consultant to learn as much as they can about TQM.
3. Decide on a quality vision
It is important that you consider your quality vision very carefully. This is much more than a simple
slogan. It’s astatement that links manager, employees, customers and suppliers.
The quality vision is a simple statement that organizer your companies approach to quality. It should
be generallybring to apply to every aspect to your company operation, but specific enough to pinpoint
the aspects of qualitythat you want to emphasis.Considerations while formulating vision statement
Consult with representative from all parts of the company. Every one should feel they have had some
input.Keep it short. It should summarize, not explain.Make it customer oriented: the customer
determine quality..
4. Establish a TQM team
This is the group that will oversee the actual implementation of TQM in your form. It should include
the chiefexecutive, representatives from line and staff departments, employee representation and union
officials if a unioninvolved.The team then conducts in department research and discussion about two
topics.How TQ conspectus apply to individual departments and functions.What needs to be done to
implement TQM across function lines. Specific plans for correspondingcooperation will need to be
made.
5. Establish quality policies and procedures
The team will next examine how to apply the quality vision to the actual way the compotation
business in run. Youwill not alter all your company polices overnight. This should be a process carried
out by the TQM this overtimeand on a priority basis.
6. Set quality objectives
Never implement TQM is a vacuum, excepting that the ideas eill automatically yield results. Always
keep on eyeon the objectives that you went to achieve.
1. It provides a measuring stick; managers and employees can measure TQM results against a realistic
set of guidelines.
2. It reduces unrealities expectation. By forming on long- range goals, objective gets ready of the
“quick- fix”mentality that lead to frustration.
3. It motivates. If the entire company in working towards reducing defects or achieving some bench
marking,there is a sprit of accomplishment that boost motivation.
Sometimes that may include in TQM object ions.
Increasing productivity.
Lowering specific cost, such as warranty or scrap costs. Implementing specific quality control.
Penetrating new markets.Stepping up the rate of innovation inside the company.Cutting specific cycle
times.
7. Set act ion plan
Then step applies to both the policy and quality project aspects of TQM. Essentially it refers to the
question ofwho, what, when and how. The QTM team should plan to then over part of its duties to
quality team or individualswho will address specific areas.
 TQM in the Textile Industry:
Outline The involvement of the textile industry within the four principles varies widely, not only
among the differentsections of the industry, but also within each of these principles. The perceived
level of involvement within eachsection of the industry, Provide brief descriptions of some of the
activities in each process area of the industry thathelp develop the four principles of TQM.
Fiber Forming

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Statistical process control and process improvement efforts are strong in the man- made fiber industry.
Thisindustry conducts much metrics- based analysis. Leading companies are starting to form extensive
partnershipswith customers who employ team concepts. Such tools as QFD are used to enhance these
partnerships.
Spinning
In yarn facilities that have more advanced TQM systems, the development of the associates through
education and training for such things as technical certification, statistical process and quality control,
and team development, occur on a frequent basis. This training and education is provided both within
the company and by outside sources such as a community college.
Knitting
In some plants in the knitting industry, employees are empowered through training in statistical
process controland just - in- time manufacturing, to improve the manufacturing process. Process
simplification is conducted through quality audits that identify problems and critical path decisions.
Weaving
In the weaving industry, there are companies that employ statistical process control and value- added
analysis. Teams are used in these companies to aid in customer service and quality. A specific
example of customer focus is one company's development of a 48- hour customer service program to
help eliminate, in person, any problems that arise within their products.
Dyeing and Finishing
The use of statistical process control and value- added analysis is also employed in this industry of the
textile value- added chain. Work- flow and cycle- time analysis is employed in companies more
advanced in their TQM system. Cross- functional teams in areas of customer service and quality
improvement are also used.
Apparel
In advanced apparel companies, natural work teams that employ quality improvement tools and
measurements are in use. In such advanced companies, partnerships with customers and customer
satisfaction surveys aid in improving customer focus. The empowerment of employees is increased in
these plants by restructuring the organization from I a hierarchical form to a flatter, team- based form.
Cost of Quality:
Quality means consistency in meeting customer expectation. The cost of quality is the cost of yarn that
met those expectations, combined with the costs that result when you fail to meet them.
Elements of cost of quality:
1. Prevent ion
This is the cost of anything you do to prevent quality error or to maintain the consistency of quality .it
begins with the orientation and training that you provide to new employees. It can include some part
of cost of parching equipments of maintained of designing, planning and engraining.
2. Inspect ion and appraisal
These costs begin with the inspection of purchased goods and materials. The cost of inspection
through the work process and finished goods is included related documentation and record keeping as
well as the calibration of test equipment and laboratory changes add to these costs. This category also
includes surveying customer satisfaction levels especially in- service companies.
3. Internal failure cost s
These are the costs that occur when a quality defect is detected before it reaches the customer. Most
directly they include scrap and network costs. But the cost of reinspection of idle time because of
quality failure, and the related administrative costs, would also be included.
4. External failure cost s
These are all the related to quality defects that reach the customer. Some are direct returns warranty
and replacement costs. Field repairs the cost of responding to complaints. Others are indirect roles cost

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because of dissatisfied customer, damage to representation and good will, the cost of liability
insurances.
Conclusion:
As according to the present market senario, quality plays a major role at an optimum or approachable
cost. For which quality management is very important for the process. The TQM totally involves
active participation and good management support for achieving high integrated quality of the product
or service,
CAUSE AND EFFECT DIAGRAMIntroduction:

There are a number of productivity and management tools used in business organizations. Cause and
Effect Diagram, in other words, Ishikawa or Fishbone diagram, is one such management tools. Due to
the popularity of this tool, majority of managers make use of this tool regardless of the scale of the
organization.

Problems are meant to exist in organizations. That’s why there should be a strong process and
supporting tools for identifying the causes of the problems before the problems damage the
organization.

Steps for Using the Tool:

Following are the steps that can be followed to successfully draw a cause and effect diagram.

Step 1 - Properly identify the problem in hand

Start articulating the exact problem you are facing. Sometimes, identification of the problem may not
be straightforward. In such instances, write down all the effects and observations in detail. A short
brainstorming session may be able to point out t the actual problem.

When it comes to properly identifying the problem, there are four properties to consider; who are
involved, what the problem is, when it occurs, and where it occurs. Write down the problem in a box,
which is located at the left hand corner (refer the example cause and effect diagram). From the box,
draw a line horizontally to the right hand side. The arrangement will now look like the head and the
spine of a fish.

Step 2 - Add the major factors that contribute to the problem

In this step, the main factors of the problem are identified. For each factor, draw off a line from the
fish’s spine and properly label it. These factors can be various things such as people, material,
machinery, or external influences.

Think more and add as many as factors into the cause and effect diagram.

Brainstorming becomes quite useful in this phase, as people can look at the problem in different angles
and identify different contributing factors.

The factors you added now become the bones of the fish.

16
Step 3 - Identify the causes

Take one factor at a time when identifying possible causes. Brainstorm and try to identify all causes
that apply to each factor. Add these causes horizontally off from the fish bones and label them.

If the cause is large in size or complex in nature, you can further breakdown and add them as sub
causes to the main cause. These sub causes should come off from the relevant cause lines.

Spend more time in this step; the collection of causes should be comprehensive.

Step 4 - Diagram analysis

When this step starts, you have a diagram that indicates the problem, the contributing factors, and all
possible causes for the problem.

Depending on the brainstorming ideas and nature of the problem, you can now prioritize the causes
and look for the most likely cause.

This analysis may lead to further activities such as investigations, interviews, and surveys. Refer the
following sample cause and effect diagram:

Use of cause and effect diagrams:

When it comes to the use of cause and effect diagrams, brainstorming is a critical step. Without proper
brainstorming, a fruitful cause and effect diagram cannot be derived.

Therefore, following considerations should be addressed in the process of deriving a cause and effect
diagram.

 There should be a problem statement that describes the problem accurately. Everyone in the
brainstorming session should agree on the problem statement.

 Need to be succinct in the process.

 For each node, think all the possible causes and add them into the tree.

 Connect each casualty line back to its root cause.

 Connect relatively empty branches to others.

 If a branch is too bulky, consider splitting it in two.

Conclusion

Cause and Effect diagrams can be used to resolve organizational problems efficiently.

There are no limitations or restrictions on applying the diagrams to different problems or domains.
The level and intensity of brainstorming defines the success rate of cause and effect diagrams.

17
Therefore, all relevant parties should be present in the brainstorming session in order to identify all
possible causes.

Once most likely causes are identified, further investigation is required to unearth further details.

The Cause & Effect (CE) diagram, also sometimes called the ‘fishbone’ diagram, is a tool for
discovering all the possible causes for a particular effect. The effect being examined is normally some
troublesome aspect of product or service quality, such as 'a machined part not to specification',
'delivery times varying too widely', 'excessive number of bugs in software under development', and so
on, but the effect may also relate to internal processes such as 'high rate of team failures'.
The major purpose of the CE Diagram is to act as a first step in problem solving by generating a
comprehensive list of possible causes. It can lead to immediate identification of major causes and
point to the potential remedial actions or, failing this, it may indicate the best potential areas for
further exploration and analysis. At a minimum, preparing a CE Diagram will lead to greater
understanding of the problem.
The CE Diagram was invented by Professor Kaoru Ishikawa of Tokyo University, a highly regarded
Japanese expert in quality management. He first used it in 1943 to help explain to a group of engineers
at Kawasaki Steel Works how a complex set of factors could be related to help understand a problem.
CE Diagrams have since become a standard tool of analysis in Japan and in the West in conjunction
with other analytical and problem-solving tools and techniques.
CE Diagrams are also often called Ishikawa Diagrams, after their inventor, or Fishbone Diagrams
because the diagram itself can look like the skeleton of a fish.

Use it when you start investigating a problem

Construct a CE Diagram whenever you need to investigate the causes or contributing factors for an
effect (be it a quality characteristic or other outcome) which is of concern to you. This will most likely
be after you have conducted a general investigation of problems for a particular function, product, or
service, and ranked them using a Pareto Chart. The effect ranked highest provides the starting point for
a CE Diagram.
For example, you may just have completed an investigation of all the reasons recorded for goods being
returned by customers and found that the highest incidence relates to incorrect goods being sent. A CE
Diagram can be constructed to explore the possible causes for this.

18
Developing a CE Diagram in a team meeting is a very effective technique for,

 concentrating team members' attention on a specific problem

 pooling, and reflecting back, team thinking

 constructing a picture of the problem at hand without resorting to the tight discipline of a
flowchart

Product Life Cycle

During their useful life, many services and products go through four stages. Since the demand can vary for each
of these 4 stages, different strategies should be applied to achieve optimum product/service performance during
each stage.
The Four stages are:
1. Introduction: During the first stage, the product is introduced into the market. Proper research and forecasting
should be done to ensure the product/service is adequate for a specific market and for a specific time. It is
crucial to have a proper amount of supply that can meet the expected demand for the product/service.
2. Growth: The second stage involves the increase in demand for the product/service. Reputation for the product
grows and an accurate forecast of demand is needed to determine the length of time the product/service will
remain in the market. Enhancements and improvements are common in this stage.
3. Maturity: This third stage deals with the product reaching a steady demand. Few or no improvements or
product changes are needed at this stage. Forecasting should provide an estimate of how long it will be before
the market dies down, causing the product to die out.
4. Decline: The last stage involves choosing to discontinue the product/service, replacing the product with a
new product, or finding new uses for the product.

Figure-1:product life cycle.

Standardization may be great for a company creating products like mops because there are not many things
you can do to make them unique and keep the price down. Standardization products have interchangeable
parts, which increases productivity and lowers the costs of production. Standardization has many important
benefits and certain disadvantages. Some advantages are the design costs for standardization products are
low. The scheduling of work inventory handling, purchasing, and accounting activities are routine, making the
quality more consistent. The disadvantages with standardization are that they decrease variety offered to
consumers leading to less of an appeal. Also, the high cost of design change makes it relentless to improve.

Inventory Control:

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Store is the place where every type of raw materials, spares, finished goods are kept in proper system.
Inventory
control means the accurate calculation and data of every type of raw materials, spares and finished
goods in time
to time store. Inventory control in textile mill are necessary because
1. To know about the required amount of raw material
2. To know about the job no which would be processed
3. To be continued the production process
4. To find out the profit or loss of a company
5. Stock and stock value for consumption measuring
Frequency of Inventory Update:
1. Monthly inventory control.
2. Annual inventory control.
Scope of Inventory Control:
1.Raw materialsDye store.Other chemicals.Grey fabrics.
2. Finished fabric.
3. Spare parts.
4. General store
Capital equipments..
Inventory System for Raw Material:
1. Raw materials partially received from production planning & directly from head ofce.
2. Material receiving & inspection report is prepared. Received quantity is mentioned and noted down.
3. Submitted to Q.C. department. Some are OK & few rejected.
4. Entry of data of goods in DATATEX.
5. Goods are arranged according to OK or rejected group.
6. Department gives store requisition to warehouse.
Grey Fabric Store:
All the grey fabrics are stored in the fabric store near the batch section. Different types of fabric are
listed in thesheet according to fabric types, quantity and cons1.uner’s requirement. Fabrics GSM,
shrinkage, diameter &other properties are also taken into consideration. The batches are prepared by
taking the required fabrics fromthe grey store.
Stages of Grey Fabric Inventory Control:
1. After knitting production.
2. Grey inspection.
3. Warehouse.
4. Batch preparation.
5. Dye house.
Dyes and Chemicals:
There is a different store for dyes and chemicals. Varies types of dyes and chemicals are stored here
accordingto dyes and chemicals companies. Different types of dyes and chemicals are listed in a
sheet. In the sheetthe stored quantity of dyes and chemicals are also included
Spares:
In any textile mill required amount of spears of different machines are stored in the mechanical store
room. All the spears are listed in a sheet which is controlled by the mechanical & maintenance
personnel. Spares are arranged in the store room according to their siz e, quantity & requirements.
There are shelves in the store room to keep the small spare parts.
Finished Goods:
Any textile mill supplies its finished dyed fabrics to its garments section. So, dyed finished fabrics are
stored for short time in the finishing section. All the delivered fabrics are noted on the tally khata

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 according to the lot no, quantity, fabrics diameter, buyer's name, Color & considering other technical
parameters.

Stages of Finished Fabric Inventory Control:

1. Finishing section.
2. Afterfinal inspection.
3. Warehouse.
Others:
Normally keep a central store at mill. In that store the various types of forms, papers; stationary &
other necessarygoods are kept.
Inventory Procedure :
1. Bin Card
2. Store Requisition
3. Store Ledger Account
4. Daily Inspection & Package Report
5. Monthly Stock &Consumption Report
6. Monthly LIC wise Delivery Report
Capacity planning
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In information technology, capacity planning is the science and art of estimating the space, computer
hardware, software and connection infrastructure resources that will be needed over some future
period of time. A typical capacity concern of many enterprises is whether resources will be in place to
handle an increasing number of requests as the number of users or interactions increase. The aim of
the capacity planner is to plan so well that new capacity is added just in time to meet the anticipated
need but not so early that resources go unused for a long period. The successful capacity planner is
one that makes the trade-offs between the present and the future that overall prove to be the most cost-
efficient.The capacity planner, using business plans and forecasts, tries to imagine what the future
needs will be. Analytical modeling tools can help the planner get answers to "What if" scenarios so
that a range of possibilities can be explored. The capacity planner is especially receptive to products
that are seen to be scalable and also stable and predictable in terms of support and upgrades over the
life of the product. As new technologies emerge and business strategies and forecasts change, capacity
planners must revisit their plans.

Cycle time
  
Definition

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The period required to complete one cycle of an operation; or to complete a function, job,
or task from start to finish. Cycle time is used in differentiating total duration of aprocess from its run
time.
Cycle time variation is a metric and philosophy for continuous improvement with the aim of driving
down the deviations in the time it takes to produce successive units on a production line.It supports
organizations' application of lean manufacturing or lean production by eliminating wasteful
expenditure of resources. It is distinguished from some of the more common applications by its
different focus of creating a structure for progressively reducing the sources of internal variation that
leads to workarounds and disruption causing these wastes to accumulate in the first place. Although it
is often used as an indicator of lean progress, its use promotes a structured approach to reducing
disruption that impacts efficiency, quality, and value. Lean manufacturing, lean enterprise, or lean
production, often simply, "Lean," is a production practice that considers the expenditure of resources
for any goal other than the creation of value for the end customer to be wasteful, and thus a target for
elimination. Working from the perspective of the customer who consumes a product or service,
"value" is defined as any action or process that a customer would be willing to pay for.

Value (economics)
Economic value is a measure of the benefit that an economic actor can gain from either
a good or service. It is generally measured relative to units of currency, and the interpretation is
therefore "what is the maximum amount of money a specific actor is willing and able to pay for the
good or service"?

Note that economic value is not the same as market price. If a consumer is willing to buy a good, it
implies that the customer places a higher value on the good than the market price. The difference
between the value to the consumer and the market price is called "consumer surplus". It is easy to see
situations where the actual value is considerably larger than the market price: purchase of drinking
water is one example.

The economic value of a good or service has puzzled economists since the beginning of the discipline.
First, economists tried to estimate the value of a good to an individual alone, and extend that definition
to goods which can be exchanged. From this analysis came the conceptsvalue in use and value in
exchange.Value is linked to price through the mechanism of exchange. When an economist observes
an exchange, two important value functions are revealed: those of the buyer and seller. Just as the
buyer reveals what he is willing to pay for a certain amount of a good, so too does the seller reveal
what it costs him to give up the good. Additional information about market value is obtained by the
rate at which transactions occur, telling observers the extent to which the purchase of the good has
value over time. Said another way, value is how much a desired object or condition is worth relative to
other objects or conditions. Economic values are expressed as "how much" of one desirable condition
or commodity will, or would be given up in exchange for some other desired condition or commodity.
Among the competing schools of economic theory there are differing metrics for value assessment and

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the metrics are the subject of a "Theory of Value." Value theories are a large part of the differences
and disagreements between the various schools of economic theory
 Industrial Engineering:
we can define Industrial Engineering (IE) as,
Industrial engineering is concerned with the design, improvement and installation of integrated system
of man, machine and equipment drawing upon specialized knowledge and skill in the technical,
economics and human sciences, either with the principles or methods of engineering analysis and
design to specify, predict and evaluate the results to be obtained from such system.
Nature of the Work in IE: Industrial engineers determine the most effective ways for an
organization to use the basic factors of production - people, machines, materials, information, and
energy - to make or process a product or produce a service. They are the bridge between management
goals and operational performance. They are more concerned with increasing productivity through the
management of people, methods of business organization, and technology than are engineers in other
specialties, who generally work more with products or processes.

To solve organizational, production, and related problems most efficiently, industrial engineers

1. Study the product and its requirements

Use mathematical methods to meet product requirements

2. Design manufacturing and information systems

3. Develop management control systems for financial planning and cost analysis
4. Design production planning and control systems to coordinate activities and control product
quality
5. Design or improve systems for the physical distribution of goods and services
6. Determine which plant location has the best combination of raw materials availability,
transportation, and costs
7. Develop wage and salary administration systems and job evaluation programs 

Responsibilities of IE:
Though the time study and motion study are the most common function of Industrial engineer, the
some other responsibilities are

1. Planning layouts
2. Monitoring Production flow system
3. Deicide the machines and attachments for all style
4. Pay system
5. Monitoring and improve the operator performance
6. Operator training
7. Production control system
8. Quality control
9. Others

Basics Techniques of Industrial Engineering:

There are some basic terms, which are important to know before learning IE. A short description of
these terms are highlighted below:

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Capacity Study:
It is exactly the measure of the operator same as capability. It means the operator is capable of
achieving the performance measured by the study. The major Need for capacity study is to set Quotas,
to motivate operator, and to measure the productions section capacity. By measuring the individual
operator capacities, supervisor can determine the overall capacity of their section. It is simply the
some of individual capacity.

Procedure:

1. Use of stop watch

2. Measure the time study
3. Average the time cycle

This average cycle time measures the operator ability to do the particular job. It’s the measure of the
skill of particular operator. Because the Industrial Engineers want to measure the skills and ability of
the operator in their average cycle time. 
 
Benefits of Capacity Study:

1. Check targets
2. Motivate operators
3. Measure section production capability

Method Study:
Method study is the systematic recording and critical examination of existing and proposed ways of
doing work, as a means of developing and applying easier and more effective methods and reducing
costs.
The procedures which need to do follow while doing method study are given as follows. There are
seven steps to be followed by industrial engineers to do method study they are,

1. Select the work to be studied

2. Define the objective
3. Record the relevant information and data
4. Examine information and data
5. Develop the improved method
6. Install improved method
7. Maintain the improved method
8. Work measurement

Time Study:
Work measurement is carried out by time study. Time study is a work measurement technique for
recording the times and rates of working for elements of a specified job carried out under specified
conditions and for analyzing the data so as to obtain the time necessary for carrying out the job at a
level of performance. The concept of Rating is fundamental of time study. Rating is the process used
by industrial engineer to compare the actual performance of the operator with operator mental concept
of normal performance. The rating is the numerical values used to denote the ratio of working. In
order to rate the operator ether must be a defined level of performance to compare with, an average
level. For this the industrial engineers apply the concept of a “Standard operator”. A standard operator
is a fully trained and motivated to perform a defined task and is, by definition average in terms of

24
his /her work place.

The steps to do the time study is as follows,

1. Observe the job and analyse to determine the element

2. Rate each element to compare with the accepted standard
3. Use the stopwatch to time each element
4. Average the selected element times
5. Multiply average element time by rating

Here the elements are the small components into which an operation is divided for study purpose.
They are selected for the convenience of the observation, measurement and analysis. These elements
should be clear and fully describable during the data presentation and analysis that.  
 
Operator Performance:
Basically the operator performance can be monitored with the help of three efficiency factors. 

1. Single cycle efficiency 

2. On-standard efficiency 
3. Global efficiency

Single cycle efficiency = [Target single cycle time in minutes (SC@100%)] / [Average observed
single cycle time in minutes (SC average)]

Here we are considering the cycle time only.

On-standard efficiency = [Operator production × SAM per piece for the operation] / [Working time in
minutes − Off-standard time in minutes]

Here the unproductive time is not considered.

Off-standard Time:
The time spent by an operator at his work under a condition that is not considered as productive.
Types of off-standard

1. Machine break down (m/c failure, thread cuts, needle breakage, etc.) 
2. Waiting time (No WIP , Waiting for the bundle) 
3. Quality problems 
4.  No feeding 
5. Un familiar job (Working other than her regular operation) 
6. Training

Global efficiency= [Operator production × SAM per piece for the operation] /
[Working time inminutes]
Here, the total working time is considered (even unproductive time is also considered).
Follow-ups:
This requires that someone checks on and stays with something until desired results are achieved. Any

25
project being implemented successfully may fail if the follow-up is not consistent. Here we are going
to concentrate on operator performance follow up.
Benefits of Operator Follow-ups:

1. Improve performance (motivate) 

2. Prove job quotas 
3. Spot troubles
4. Types of follow-ups 

1. Bundle by bundle follow-up 

2. Bundle diagnosis

Bundle by Bundle Follow-up:

This follow-up is done when the operator’s on-standard efficiency is much less than his single cycle
efficiency in that operation. 
Single cycle (SC) efficiency is arrived considering the cycle time taken by the operator to complete
each piece. Whereas the on-standard efficiency is arrived considering the pieces produced during the
productive time spent in that operation for a definite period of working time. 
So, if the on-standard efficiency is much less than her single cycle efficiency, it means the operator is
unable to maintain the pace in all the pieces when she is working for a long time. During this
condition, the bundle by bundle follow-up will help in finding/solving the problems that occur
between each bundle.

Bundle Diagnosis:
This is done when the operator’s single cycle efficiency of the operation is less. 
 
Process of Bundle Diagnosis:
1.  To do a bundle diagnosis, a stop watch and the format is required. 
2. Write down the descriptive data required (IE, operator, operation, instructor, etc.). 
3. Determine the SAMs for the number of units in the bundle. 
4. Measure the time for each activity of the operator and write it in the appropriate category in the
format. 
5. After finishing the bundle, calculate the bundle efficiency, the single cycle efficiency and
compare against the SAMs. 

Key Points for Bundle Diagnosis:

1. Do not interfere in the operator’s work 

2. Be alert and prevent any interruptions 
3. Write down everything 
4. Analyze the information and obtain your conclusions 

It is equally important that the conclusions obtained turn into specific actions that can be taken to
improve the operator’s performance. Perform bundle diagnosis and give your comments clearly.

Work in Process (WIP):

26
 The semi-finished or finished goods which transported from one work station to next work station are
called work in progress. 

1. WIP is made up of all garments and their parts that are not completely finished. 
2. It can be measured in units (pieces) or time (minutes). 

For example – if an operator a takes 0.8 minute per piece to stitch and if she has 3 bundles of 10 pieces
each to be processed, then the WIP in that workstation is 30 pieces or 24 minutes. 
 
 Need to Control WIP:
Two major cost areas can be reduced if WIP is controlled. 
1. Investment in inventory Inventory is the money invested in raw materials. If the inventory is not
moved through the plant quickly then it affects cash flow directly.

2. Ability to reduce the production cycle

 By having low inventory between operations, garments usually have less waiting time and go
through the production cycle in less time. Large inventory levels between the operations keep
the goods waiting longer to be processed. This increases the overall through put time.
 Low through put time permits better co-ordination between sales and production.
 Low cycle times give manufacturers the ability to handle multiple styles.

 How to Manage WIP

1. Production planning

 This requires planning from marketing and sales to determine the type, period and quantity of
products to be produced in the factory.
 Efficient pre-production team (sampling, R&D and merchandising) should play a key role in
order selection and preparatory activities before starting the style.

2. Trims control

 Trims are buttons, zippers, labels, thread, elastics, and so on.

 All the trims should be in house before commencing the bulk production.
 An updated trims inventory report should be kept. The unavailability of even a small label
could stop the production.

3. Production build-up
 Loading should be done based on the date-wise production build up plan, prepared by
considering the capacity of the sewing line. If the loading greatly exceeds the quantity that the
line is able to process, it will end up in huge WIP, thus affecting the complete flow.

4. Balancing

 Even if the line is loaded based on the capacity, there is a chance of increased WIP in the line
due to unbalanced production.

27
  This may happen due to absenteeism, labor turnover, change in style, bad cutting, etc. .

5. Cut flow control

 To control WIP, the cycle times are to be kept low by following FIFO procedure for every cut.
 This can be ensured by utilizing cut tracking sheet and bundle tracking sheet.

 Supply Chain Management in textiles

Supply chain management (SCM) is the oversight of materials, information, and finances
as they move in a process from supplier to manufacturer to wholesaler to retailer to
consumer. Supply chain management involves coordinating and integrating these flows both
within and among companies. It is said that the ultimate goal of any effective supply chain
management system is to make products available when needed.

Supply chain management flows can be divided into three main flows:
• The product flow
• The information flow
• The finances flow

 Supply chain decisions

The decisions for supply chain management can be classified into two broad categories --
strategic and operational. As the term implies, strategic decisions are made typically over a
longer time horizon. These are closely linked to the corporate strategy and guide supply chain
policies from a design perspective. On the other hand, operational decisions are short term, and
focus on activities over a day-to-day basis. The effort in these type of decisions is to effectively
and efficiently manage the product flow in the “strategically” planned supply chain.

There are four major decision areas in textile supply chain management: 1) location, 2)
production, 3) inventory, and 4) transportation (distribution), and there are both strategic and
operational elements in each of these decision areas.

Location decisions

The geographic placement of production facilities, stocking points, and sourcing points is the
natural first step in creating a supply chain. The location of facilities involves a commitment of
resources to a long-term plan. Once the size, number, and location of these are determined, so are
the possible paths by which the product flows through to the final customer.

These decisions are of great significance to a firm since they

represent the basic strategy for accessing customer markets, and
will have a considerable impact on revenue, cost, and level of
service.

Production decisions

The strategic decisions include what textiles to produce, and

28
which plants to produce them in, allocation of suppliers to plants, plants to customer markets. As
before, these decisions have a big impact on the revenues, costs and customer service levels of
the firm. These decisions assume the existence of the facilities,

Inventory decisions

These refer to means by which textile inventories are managed. Inventories exist at every stage of
the supply chain as either raw materials, semi-finished or finished goods. They can also be in-
process between locations. Their primary purpose to buffer against any uncertainty that might
exist in the supply chain. However, most researchers have approached the management of
inventory from an operational perspective. These include deployment strategies, control policies
--- the determination of the optimal levels of order quantities and reorder points, and setting
safety stock levels, at each stocking location.

Transportation decisions

The mode choice aspects of these decisions are the more strategic ones. These are closely linked
to the inventory decisions, since the best choice of mode is often found by trading-off the cost of
using the particular mode of transport with the indirect cost of inventory associated with that
mode. While transportation by sea or rail is cheaper, it necessitates holding relatively large
amounts of inventory to buffer against the inherent uncertainty associated with them.

Supply chain modeling approaches

Clearly, each of the above two levels of decisions require a different perspective. The strategic
decisions are, for the most part, global or “all encompassing” in that they try to integrate various
aspects of the supply chain. Consequently, the models that describe these decisions are huge, and
require a considerable amount of data.

Network design methods

As the very name suggests, these methods determine the location of production, stocking, and
sourcing facilities, and paths the product(s) take through them. Such methods tend to be large
scale, and are used generally at the inception of the supply chain.

Breitman and Lucas attempt to provide a framework for a comprehensive model of a production-
distribution system, “PLANETS”, that is used to decide what products to produce, where and
how to produce it, which markets to pursue and what resources to use. Cohen and Lee present a
normative model for resource deployment in a global manufacturing and distribution network.
Global after-tax profit is maximized through the design of facility network and control of
material flows within the network. The cost structure consists of variable and fixed costs for
material procurement, production, distribution and transportation.

Clearly, these network-design based methods add value to the textile firm in that they lay down
the manufacturing and distribution strategies far into the future

Strategy of the supply chain

29
With comprehending the need of the first changing business environment in textile, apparel and
in the supply of raw materials such as polyester, cotton, etc, it requires proper business and
planning strategy without which the supply chain management will not be successful. The
following are the strategies and planning:

• Foresight of the business, ie, right idea, right supply at right time.
• Proper market survey for the customers’ requirements, demand and supply.
• Proper production planning at supply end and that of consumer end with proper information
technology.
• Product consignment to match the demand supply curve.
• Business expansion strategy.
• Marketing and distribution strategy.

 The concept of supply chain management

The concept should be the following for a fruitful supply chain management:
• Timely delivery at customer’s end.
• Proper quantity to reach at destination.
• Intact material.
• Reasonable cost.
• Customer must not suffer because of non-availabilities of raw material.
• Even the small quantity must not matter in reaching at customer end.
• With proper planning the raw material dispatch should be in such a way that customer must not
suffer because of any delay or unforeseen incidences such as road condition, traffic jam, etc.
The difficulties faced at supply chain

The following difficulties are being faced in supply chain in textile industry for yarn, cloth,
apparel, garment, industrial yarn, etc.
• Distance: Larger the distances, larger are the difficulties in reaching the materials at proper time
at customers end.
• Improper production planning at both manufacturer and consumer end. It becomes more erratic
when there are fluctuations in demand of consumer product.
• Transportation cost: Larger the distance, larger is the transportation cost, some customers are
not in a position to get the right raw material from the right resource because of high cost of
transportation.
• In case of increasing the uncertainty in the international market, the customers start stocking of
the materials and hence, subsequent problems arise in logistics and distribution. At that time, it is
necessary to see customer profile, his routine demand & accordingly distribution is made.
Importance’s are being empathized on valuable customers for upkeeping the customer’s business
online.

Proper implementation

There should be proper implementation of the chain management to keep the production on & to
minimize the cost of production. The manufacturer must have:

• Engineering concept.
• Machinery evaluation.

30
• Architectural & structural details.
• Humidification, gas & energy consultancy.
• Civil & electrical & water management.
•Fire fighting& safety system.
• Improved designing & work practices.
• Process audit & benchmarking.
• Process improvement &optimisation.
• Complete project management.
• Advance analytical method of training.
• Management training & development.

Mode of transportation

For a perfect supply chain management the mode of transportation is an essential integrated part,
which can be international or inter-modal. It can be either by ship, train, truck, inland barge.
In the worst scenario,

• Sea transport by container is 72 to 73%

• Rail transport 3 to 14%
• Road transport 14% to 24%

Difficulties faced in transport during supply chain

1. Road transport/Surface transport

Within India the majority of the supply chain is done through road transport and the following are
difficulties faced:

• Non-availabilities of proper type of trucks to load the required quantity of the customer. For
example, in India 80% trucks are Punjab body (both sides closed), which makes difficulties in
loading the trucks through Fork Lifter from all sides. It becomes time consuming,

2. Sea transport
• It is the cheapest and the best way to send the materials from one country to another. But
because of certain policy matters, sometimes the consignment gets delay from the manufacturers
end to Port.
• Then it is transported either by truck or by train, which creates more material handling and
damage. It requires proper implementation of supply chain management.

3. Rail transport
• It is cheaper but time consuming.
• The customers need to wait for the loading/unloading operation at goods yard.
• During monsoon, etc, the textile material has got the bad impact if proper care is not taken in
time.
•Some times it takes more time to reach the destination and customers suffer.

Conclusion

1. With the growing demands of material and that of business, the Supply Chain Management has

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 taken an important role throughout the world.

2. It has taken its own shape in the textile industries where large quantities are in demand with
varieties of product range..

 Economic order quantity

Economic order quantity is the order quantity that minimizes total inventory holding costs and
ordering costs. It is one of the oldest classical production scheduling models. The framework used to
determine this order quantity is also known as Barabas EOQ Model or Barabas Formula. The
model was developed by Ford W. Harris in 1913,[1] but R. H. Wilson, a consultant who applied it
extensively, is given credit for his in-depth analysis.[2]

Overview

EOQ applies only when demand for a product is constant over the year and each new order is
delivered in full when inventory reaches zero. There is a fixed cost for each order placed, regardless of
the number of units ordered. There is also a cost for each unit held in storage, sometimes expressed as
a percentage of the purchase cost of the item.

We want to determine the optimal number of units to order so that we minimize the total cost
associated with the purchase, delivery and storage of the product.

Underlying assumptions

1. The ordering cost is constant.

2. The rate of demand is known, and spread evenly throughout the year.
3. The lead time is fixed.
4. The purchase price of the item is constant i.e. no discount is available
5. The replenishment is made instantaneously, the whole batch is delivered at once.
6. Only one product is involved.

EOQ is the quantity to order, so that ordering cost + holding cost finds its minimum. (A common
misunderstanding is that the formula tries to find when these are equal.)

Variables
 = Purchase Price
 = order quantity
 = optimal order quantity
 = annual demand quantity
 = fixed cost per order (not per unit, typically cost of ordering and shipping and handling.
This is not the cost of goods)
 = annual holding cost per unit (also known as carrying cost or storage cost) (warehouse
space, refrigeration, insurance, etc. usually not related to the unit cost)

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  The Total Cost function

The single-item EOQ formula finds the minimum point of the following cost function:

Total Cost = purchase cost + ordering cost + holding cost

- Purchase cost: This is the variable cost of goods: purchase unit price × annual demand quantity. This
is P×D

- Ordering cost: This is the cost of placing orders: each order has a fixed cost S, and we need to order
D/Q times per year. This is S × D/Q

- Holding cost: the average quantity in stock (between fully replenished and empty) is Q/2, so this cost
is H × Q/2

To determine the minimum point of the total cost curve, partially differentiate the total cost with
respect to Q (assume all other variables are constant) and set to 0:

Solving for Q gives Q* (the optimal order quantity):

Therefore: .

Q* is independent of P; it is a function of only S, D, H.

Extensions
Several extensions can be made to the EOQ model, including backordering costs and multiple items.
Additionally, the economic order interval can be determined from the EOQ and the economic
production quantity model (which determines the optimal production quantity) can be determined in a
similar fashion.

A version of the model, the Baumol-Tobin model, has also been used to determine the money demand
function, where a person's holdings of money balances can be seen in a way parallel to a firm's
holdings of inventory.

Example

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  Suppose annual requirement quantity (Q) = 10000 units
 Cost per order (CO) = $2
 Cost per unit (CU)= $8
 Carrying cost %age (CC%)(%age of CU) = 0.02
 Carrying cost Per unit = $0.16

Economic order quantity =

Economic order quantity = 500 units

Number of order per year (based on EOQ)

Number of order per year (based on EOQ) =

Total cost

Total cost

Total cost

If we check the total cost for any order quantity other than 500(=EOQ), we will see that the cost is
higher. For instance, supposing 600 units per order, then

Total cost

Total cost

Similarly, if we choose 300 for the order quantity then

Total cost

Total cost

This illustrates that the Economic Order Quantity is always in the best interests of the entity.

References:
1) Total Quality Management – John M. Kelly.
2) Quality Samurai – T.R.Natarajan, Edwina Pio.
3) Total Quality Management an Over View – Sushil, IIT, Delhi – NCUTE,
4 ) Technological and Managerial Innovations towards quality concept, Dr. K.K. Goswami,mannade
textiles in
india, feb 1999. Page 64.
5) DiMattia, E. A., Jr. (1993). Total quality management and servicing users through remote access
technology.

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