BACKGROUND OF THE COMPANY

Khaadi is a Pakistan-based lifestyle and fashion brand that was established in DEC 1998.
Shamoon Sultan, the company’s CEO and founder opened the 1 st Khaadi outlet in a small store
in Zamzama twenty years ago. It has fifty-two stores in seventeen cities throughout Pakistan.
Other than that, it has twenty-two stores in the United Kingdom and several other stores across
the world, including the flagship store outside Pakistan in city center Midriff in Dubai. The brand
has over forty outlets in the UAE and the UK. This article contains all the information about the
brand, including Khaadi History.
In 1999, the 1st store was launched in Zamzama Karachi. Within Two years of its establishment,
it grew to multi-stores and launched a diverse variety of products. Until 2017, ASA, a leading
architecture company, worked as the interior decorator for khaadi stores in the United
Kingdom, United Arab Emirates, and Pakistan.
The brand expanded globally in 2010 by opening outlets in the United Arab Emirates, 1 st in
Dubai and then in Abu Dhabi. Store launches in the United Kingdom were scheduled in 2013. It
founded a 1630 square foot store in Birmingham’s Bull ring shopping center in 2014, and other
sites include Westfield Stratford city and Westfield London in Birmingham, United Kingdom. In
Sep 2015, the company also launched a branch in Highcross, Leicester, United Kingdom. In sep
2015, a 22000 square feet store was opened in Dolmen Mall Clifton, Karachi.
Nasir Mansoor, a known figure at labour rights forums and the deputy-general secretary of
PNFTU (Pakistan National Federation of Trade Union), dismissed a defensive claim made by
khaadi Headquarters in response to allegations by khaadi factory employees. According to
allegations, the garment company had violated many of the worker’s rights, ranging from falling
to provide workers with official written recruitment letters. To refuse to issue mandatory Social
Security Institution (SSI) deposits, risking employee job stability and well-being.
By 2002, it was manufacturing female’s wear, and by 2008, it had grown into female’s luxury
wear with the launch of khaadi khaas. Khaadi transformed into a huge retail brand in 2012,
when it planned to grow with the client and launch vibrant lawn prints. It launched furniture,
bags, bed sheets. Shoes, and accessories, quickly becoming an entire lifestyle brand.
Color, heritage, culture, and craft were always vital to the brand’s design philosophy. The brand
took inspiration from all around the world in order to establish itself as a multinational ethnic
brand. Craft and tradition are rooted and woven into the fabric of any item bearing the khaadi
name. The brand’s base is proudly Pakistani, respectful of tradition, and committed to making
fashion available to everyone. Khaadi provides the best quality for money and is a lovely mix of
tradition and modernity, with its vivid colors and imaginative designs.
Khaadi’s variations are what renders it unique, and it is vital to the brand that customers could
happily and proudly share every wonderful part of themselves with the universe. Khaadi was
built on the idea that the clothes you wear should allow you to express yourself. It is providing
an opportunity to women to wear vibrant and inspiring dresses at reasonable rates-while
celebrating their individuality with each and every design, stitch and weave. The brand’s
unparalleled range of ever-changing colors and patterns is constantly pushing the limits of the
Pakistani fashion community.
The brand strikes a balance between tradition and modernity. Modernity is expressed in the
uniqueness and wide variety of patterns and designs. It gives women the confidence to share a
new aspect of their personality via their fashion choices allowing them to select a style that
represents their individuality.
PEST ANALYSIS
Khaadi, as a brand, must follow the labor laws set by Pakistani law. The firing of labor,
disregarding the minimum wage laws, and exploiting the labor has impacted khaadi’s revenue
significantly and also led to increased pressure from government. The trade union and political
activists such as Jibran Nasir came together to ensure that the labor was given their rights.
Khaadi should ensure that they stay in line with all these policies and changes as violating these
can impact their profits and brand image significantly.
Economical:
Khaadi, before facing the crisis and being called out publicly was committing a series of frauds
that was leading to their booming profits. As highlighted earlier in the report they refused to
register their workers with SESSI and did not provide them with EOBI rights. According to these
laws, for the employees to be able ensure a secure future after retirement they need to provide
Rs780 every month out of which Rs130 is to be given by the worker and the rest needs to be
submitted by the employer. But as khaadi did not abide by these laws they saved up to Rs850
per employee, each month. Afterwards they agreed to register their workers in both of these
pacts which led to the decrease in profits and to compensate that they diversified their brand.
Khaadi has introduced many sub divisions under their main brand like khaadi home, khaadi skin
care, khaadi khaas etc. This led to the increase in audience and general public being catered to.
In addition to this they have also expanded their brand all across the world in countries like
USA, UK, UAE and CA which made them earn more than they ever lost.
SOCIAL:
Social factors greatly impact khaadi, as it’s a leading fashion retailing brand it has to remain
relevant with distinct and diverse cultures around the world, specifically Pakistan. Moreover,
Khaadi has to portray their image as a global brand so that the people can relate and connect
with it. Usually, the social implications such as protest against inhumane working conditions by
the civil society against khaadi not only dampens its brand image but as people especially the
working class are getting more aware of the basic labour rights along with trade union gaining
greater power, they should have promptly responded to their labour needs before the protest
thus creating a negative goodwill for khaadi, eventually resulting in lost sales and market share.
TECHNOLOGICAL:
Although it is one of the largest fashion and clothing brands in Pakistan, Khaadi has not utilized
automation in its manufacturing operations as of yet. Large costs of initial investment and the
availability of cheap labour are some of the major factors that can prevent such major players
in the fashion industry from introducing mechanization in their garment manufacturing
factories. Keeping up with the latest trends and technological innovations may prove to be
more efficient for khaadi. The brand can also avoid such public relations disasters by employing
actual automatons without humanity needs as it would lead to a reduction in the labor force.
Working in a factory with less than ideal conditions for humans ensured that the workers will
suffer from mental and physical problems which eventually also took place. Technological
advancements in the manufacturing processes have eliminated this problem and khaadi could
have been better off by adopting such production mechanisms.
LEGAL:
These factors though seem to be of little or no importance compared to other factors that can
affect khaadi, but indeed they are integral to profit and trade generation as these factors affect
agri-businesses much more directly. One of the prominent issue that constituted the protest
against khaadi was environmental concerns such as hazardous and inhumane conditions
provided to the workers by khaadi. The most important accusations were providing unhygienic
conditions such as dirty washrooms, regulated washroom break, not providing clean waters to
drink thus violating the environmental safety as this could result in increased diseases, health
concerns that could be contagious to environment. Thus, khaadi lose a potential competitive
advantage of promoting corporate social responsibility (CSR), while the competitors capitalized
by being more environmental friendly.
CONCLUSION:
The allegations against khaadi’s inhumane working conditions and violation of worker’s rights
gathered many people and several protest demonstrations were held in Karachi and Lahore.
Khaadi tried to resolve this issue by calling it a “malicious and libelous content” and called it a
conspiracy against the company. This statement of khaadi further ignited the worker unions
(NTUF), which straight away rejected khaadi’s statement. As a result of which, khaadi and NTUF
signed an agreement in which NTUF had been successful in winning significant concessions
from khaadi on each of their demands and khaadi agreed to improve the implementation of
labor laws as its production unit.
Khaadi’s first press release proved to back fire and it further ignited the issue and the laborers,
as a result of which khaadi had to negotiate with the workers in order to resolve their issue and
regain their brand name and prestige which they were losing as a result of this crisis. It would
have been much better if khaadi’s management would have directly negotiated with the
employees rather than disregarding the allegations and calling it as a conspiracy against their
company.
 SUPPLY CHAIN MANAGEMENT
INTRODUCTION WITH COMPLETE SUPPLY CHAIN PICTURE:
The first store was opened in Karachi’s Zamzama in 1999. Khaadi then expands to multi-stores
within two years of its inception and introduced wide range of products lines. Leading
architecture firm ASA served as the interior designer for khaadi stores at Pakistan, UK and UAE
until 2017. It currently operates 46 stores, in 17 cities across Pakistan and 17 stores across UK
and the GCC, offering a wide range of products from apparel for women, men and kids to
home-textiles, in both printed and hand-woven fabrics. In 2010, khaadi expanded
internationally by opening stores in the UAE first in Dubai and later in Abu Dhabi. In 2013 store
launches were planned for the UK. In 2014, Khaadi opened a 1,630 sq ft store in Bull ring,
Birmingham at Bull Ring shopping center and other locations include westfield London and
westfield Strafford, City, Brimingham, Uk. Company also opened a store in highcross Leicester,
UK in September 2015. A 22000-square-feet of khaadi store was opened in September 2015 at
Karachi’s Dolmen mall Clifton. Khaadi have built more than 40 stores in Pakistan as well as
stores in United Arab Emirates and United Kingdom.
In 2017, Nasir Mansoor, a respected figure in labour rights circles and the deputy general
secretary at the National Trade Union Federation in Pakistan, rejected a defensive statement
issued by khaadi HQ in response to accusations by khaadi factory workers that the clothing
company had abused a multitude of workers’ rights ranging from not providing workers Official
written appointment letters to not issuing mandatory SSI ( Social Security Institution) deposits,
thereby compromising employee job security and well-being.

DECISION PHASE IN SUPPLY CHAIN AS PER KHAADI:

Khaadi is Pakistan’s Premier manufacturer and retailer of fashion clothing with 45 stores in
Pakistan and 15 international locations. The high-profile brand frequently runs highly successful
promotional campaigns, including 40-hour nonstop sales, with footfall exceeding 200,000
visitors on a typical weekend at their largest retail locations.
Khaadi had recently begun a major phase of expansion in both domestic and international
markets, but the platform they were using prevented them from achieving a clear, consolidated
view of their operations across regions and adversely affected active cross-channel decision
making.
Systems implemented Microsoft Dynamics 365 for finance and Operations as a single, unified
solution for supply chain, finance, and retail. The solution supported store operations 16 hours
a day, 7 days a week for both domestic and international markets. It facilitated on-time monthly
closing and helped khaadi meet KPIs for their IT department and other business groups. The
deployed solution was integrated with khaadi’s ware house management system, eCommerce
platform, and footfall and traffic counters to facilitate centralized management of all customers
and inventory information. The solution allowed effective decision making through its intuitive
and in-depth business intelligence dashboards. It sent transactions directly to the cloud and
freed khaadi’s ERP system from endless platform updates and other complexities.
Local Retail servers were now used as a failover in the event of a disruption of internet service.
This hybrid system gives all khaadi retail locations excellent uptime. Systems limited proposed
Mpos terminals with both offline store connected and online modes to support heavy sales
traffic. All phases of the 45-stores implementation were completed in under 6 months,
including analysis, design, development, POC, CRP, stress, testing, UAT, pilot testing, and
rollout. Stress testing revealed that the new POS system could handle a heavy workload in a 12-
hour period. The implementation won systems the accolade of Microsoft Pakistan Partner of
the year 2018.
PLANNING SUPPLY AND DEMAND IN A SUPPLY CHAIN:
Demand Management determines requirement quantities and delivery dates for finished products
assemblies. To create a demand program, Demand Management uses Planned Independent
Requirements and Customer Requirements. Planned Independent Requirements (PIRs) are used to
determine the quantities of a material required in a particular time period. The PIRs could be both
manually maintained or determined using Sales and Operational Planning. Customer Requirements
represents the Sales Orders in the system. Once a sales order arrives, the PIRs are reduced.

In Khaadi, Make to Stock planning strategy is followed. Make-to-stock strategy is used when stocks are
produced independently without a direct reference to a sales order. The requirements from the sales
orders are met from those stocks. For this strategy production would be based on the sales forecast.
This means that make-to-stock strategies can support a very close customer-vendor relationship
because the objective is to provide customers with products from stocks as quickly as possible. At
Khaadi, Strategy Type “Planning with final assembly” is also used for Make to Stock production. In this
planning strategy, procurement and production of all components and assemblies is triggered by the
forecast. Procurement Proposal is generated for the semi-finished materials, raw and packing materials
based on the Forecast. Khaadi also performs the embroidery on Lawn fabric for UNI-BRANDS. So
separate orders will be created with reference to embroidery of lawn prints style material in Khaadi
Manufacturing Plant/Plants and their independent demand is entered in SAP.

The planned independent requirements provide the information that which finished materials are to be
produced, when these should be produced and in what quantities. Planning of Lawn fabric will be
performed in system, planned requirements will be entered in the system style wise for UniBrands as
well.

PRICNG AND REVENUE MANAGEMENT IN SUPPLY CHAIN:

Involved in every step of Khaadi’s growth, Finance fuels our commercial success and
sustainability through the application of advanced methods in all areas ranging from accounting
and tax handling to budgeting and financial planning.
Each role in this department comes with great responsibility and is expected to engage with
cross-functional partners to deal with different situations ranging from something as small as an
accounting issue or as challenging as a foreign trade and tax matter. Members of this team
work contribute in the innovation of business processes to maximize efficiency with a goal to
ensure that Khaadi is financially equipped for international growth.
E-commerce is not just one of Khaadi’s key growth area, it’s one of our most exciting
opportunities. We want to be available to our consumers whenever and wherever they need
us, giving them multiple options to shop with us and stay updated with all that’s new at Khaadi.
From website and content developers to content writers, our online team works to develop
new features for online platforms and ensure a smooth browsing and shopping experience for
our online customers. With a keen eye for the latest trends being followed by our growing
consumer base, the E-commerce team makes fashion accessible to each one of them over the
world.
DEMAND FORECASTING IN SUPPLY CHAIN:
The next step is to forecast HR needs for the future based on the strategic goals of the
organization. Realistic forecasting of human resources involves estimating both demand
Strategic Human Resource Planning 6 and supply. At Khaadi the strategic HR planning process is
based on two different types of hiring that are defined below:
Budgeted Hiring:
In budgeting hiring the company forecasts HR demand according to company’s strategic plans
and their defined organizational objectives. The HR department receives a budget that includes
costs such as hiring and recruiting, compensation and salaries and training and development.
For instance, if the company decides to open 5 new stores in Karachi then the demand for HR
will be determined accordingly, which should be within the provided budget of the company.
On average 4 to 5 employees are required for each store. However, the number may also vary
depending on the area, location and size of the store. Furthermore, HR requirements at the
company do not only include hiring at the store, but also other employees for back-end
operations and support employees. Thus, the HR conducts meetings with all the departments
to ascertain the requirements.
Non-Budgeted Hiring:
In contrast to budgeting hiring, Khaadi also conducts non-budgeted hiring. These demand for
employees include that are not expected as per the plans of the company. Moreover, this
becomes a part of the budgeted hiring of next year to ensure that it is aligned with the strategic
plans of the company.
CO-ORDINATION IN A SUPPLY CHAIN:
The Planning team spearheads the efforts to enhance profitability and sales through thorough
and rigorous planning and an in-depth analysis of retail performance and inventory
management. As a member of the planning team, you will have significant coordination with
multiple departments including merchandising, supply chain and retail.
In other words, the Planning department is a land full of opportunities – with an exciting hunt
for data points and insights that can be turned into actions for constantly improve
performance.