UNIVERSITI MALAYSIA SARAWAK

FACULTY OF ENGINEERING
DEPARTMENT OF MECHANICAL & MANUFACTURING ENGINEERING

KNP 3053 MANUFACTURING SYSTEMS

GROUP 6: TEXTILE AND APPAREL (GILDAN)
NAME MATRICS NUMBER
AZZAIAH ALPHONSUS JENAU ANAK 58504
STEWARD
ESTHER SULING EDMOND 58583
ROYCE ANAK THOMPSON 59146
LECTURER DR MAGDALENE ANDREW MUNOT
ACADEMIC SESSION SEMESTER 1 & 2018/2019
 Gildan is one of the largest manufacturers of basic apparel in the world. It was started from
a Canadian family business in the year of 1984 (Gildan, n. d.). Gildan designs, produces, and
sell activewear, underwear, socks, hosiery, and legwear products. Their products are sold to
wholesale distributors, screen printers or embellishers, as well as to retailers that sell to
consumers through their physical stores or e-commerce platforms.
Although the company’s products are sold all year-round, the business experiences
seasonal changes in demand which result in quarterly fluctuations in operating results.
Historically, for the company’s Print wear segment, demand for t-shirts is lowest in the fourth
quarter and highest in the second quarter of the year. This is when distributors purchase
inventory for the peak summer selling season. Demand for fleece is usually highest in advance
of the fall and winter seasons, in the second and third quarters of the year. For the company’s
Branded Apparel segment, sales are higher during the second half of the year, during the back-
to-school period and the Christmas holiday selling season. From these data, the company can
forecast their sale thus manages their production and inventory to compensate these demands.
Gildan uses Enterprise Resource Planning (ERP) as part of their resource planning. This
system supports the majority of Gildan operations in the areas of finance manufacturing and
customers service. This system is centralized and is accessed from all of their locations through
secure networks. Gildan ERP system is linked to servers supporting both local processes and
specialized applications which include payroll and distribution. Gildan plan to continue in fiscal
2016 to implement initiatives to improve their information technology processes and
infrastructure based on the Information Technology Infrastructure Library which is a
framework of “best practices” methods intended to facilitate the delivery of high-quality IT
services. This is due to increasing dependence on the availability of Gildan computer systems
to support their operations. The Gildan JD Edwards ERP World system has been in place since
1999. In fiscal 2010, Gildan introduced a process to upgrade to the current release which is
Enterprise One. The upgrade will facilitate the strategic objective of improving and modernizing
system functionality and business agility. Gildan implemented the first phase of the upgrade in
fiscal 2012 and they currently undertaking the subsequent phase.
Capacity planning is the process used to determine the production capacity needed by an
organization to meet the changing demand for its products (Reference for Business, n. d.).
Currently, this company is investing in textile capacity and technology to boost their capabilities
in the production of fashion and performance garments where they expect a better chance for
growth. Furthermore, they are also evaluating the opportunities to optimize production in
existing facilities, which may contribute to increased capacity and cost reduction opportunities.
Gildan is also planning to expand its manufacturing capacity including the development of a
new facility in other countries.
 Demand for Gildan product differ from year to year. In order to meet the market demand, this
company aim to appropriately balance their production and inventory. According to the Annual
Report of this company, the discussion with the customers and internally generated projections
reflecting their analysis of factors impacting industry demand, Gildan manufacture and carry
finished goods inventory to meet the expected demand for delivery of specific product
categories. If the demand is significantly less than expected after producing and carrying
inventory in anticipation of deliveries, they will have to carry the inventory for extended periods
of time or sell excess inventory at reduced prices. Due to this case, Gildan profits would be
reduced. Other than that, this excess inventory could also affect in lower production levels,
resulting in lower plant and equipment utilization and lower absorption of fixed operating costs.
Alternatively, they are also exposed to loss of sales opportunities and market share if they
produce insufficient inventory to satisfy their customers’ demand for specific product categories
as a result of underestimating market demand or not meeting production targets, in which
customers could seek to fulfil their product needs from competitors and reduce the amount of
business they do with Gildan.
Inventory control systems can be split in two types, the continuous review system, called a Q
system, and the periodic review system, called a P system (Krajewski et al., 2013). Continuous
review system tracks the remaining inventory of a stock keeping unit each time a withdrawal is
made to determine whether it is time to reorder. These reviews are done regularly and usually
continuously. Periodic review system in the other hand is a system in which an item’s inventory
position is reviewed periodically instead of continuously. The company uses the periodic review
system to place their order because the demand is inconsistent. Based on the annual report, it is
stated that the demand varies with season where the demand for t-shirts is highest in the second
quarter and lowest in the fourth quarter of the year. Demand for fleece on the other hand is high
on the second and third quarter of the year which is during fall and winter. For the branded
apparel segment, sales are higher during the second half of the year, during the back-to-school
period and the Christmas holiday selling season.
In conclusion, Gildan has become of one of the most successful apparel brands in the
world due to their endless and continuous effort in research and develop of production process
technology and quality revolution. According to this company mission, Gildan has always
understand that their success and future growth depend on the operating responsibly and
integrating sustainable solutions into their business. This is why Gildan is able to sustain their
business in terms of economic and financial status in the process of competing with other
competitors.
References
Annual Information Form (December 31, 2017). Further leveraging and
manufacturing infrastructure and enhancing distribution capabilities. Retrieved
from http://www.gildancorp.com/financials-and-filings#tab-Annual-Information-
Form

Gildan (n. d). Brand overview Malaysia. Retrieved from

https://www.mygildan.com/store/my/content/genericContent.jsp?contentId=brand-
overview-gildan

Gildan (n. d.). Vision, Mission & Values. Retrieved from

http://www.gildancorp.com/mission-and-values

Krajewski, L. J., Malhotra, M. K., & Ritzman, L. P. (2013). Operations management.

Harlow, England: Pearson Education Limited.

Reference for Business (n. d.). Capacity Planning. Retrieved from

https://www.referenceforbusiness.com/management/Bun-Comp/Capacity-
Planning.html
Appendices

Figure 1. The yarn padded

Figure 2. Textile manufacturing

Figure 3. The screen-printing done by Gildan

Figure 4. The products produce by Gildan