Fine Cotton Textiles 1

Fine Cotton Textiles

Lahore School of Economics

Operations Management

Submitted by:

Fatima Safdar Ali

Mariyam Mohsin

Muhammad Waleed

Zoha Junaid

Instructor: Sir Salman Ehsan

Section C
December 7, 2022
Fine Cotton Textiles 2

Table of Contents
Executive Summary...................................................................................................................4

Background................................................................................................................................5

Core Values and Principles....................................................................................................5

Mission Statement..................................................................................................................6

Vision Statement....................................................................................................................6

Design of Goods and Services...................................................................................................6

HRM and Job Design.................................................................................................................7

Job Design..............................................................................................................................8

Hierarchy..............................................................................................................................10

Training and Development Programs...................................................................................11

Organizational Structure.......................................................................................................11

Type of organization.............................................................................................................13

Authority and Power.............................................................................................................13

Centralization vs Decentralization.......................................................................................13

Motivation............................................................................................................................13

Quality Management................................................................................................................14

Process Design.........................................................................................................................15

1. Weaving........................................................................................................................16

2. Singeing.........................................................................................................................16

3. Mercerizing...................................................................................................................17

4. Dyeing...........................................................................................................................17

5. Printing..........................................................................................................................17

6. Cutting...........................................................................................................................18

7. Stitching........................................................................................................................18

8. Finishing........................................................................................................................19

9. Packaging......................................................................................................................20
Fine Cotton Textiles 3

Capacity Design.......................................................................................................................20

Layout Design and Strategy.....................................................................................................23

Supply Chain Management......................................................................................................23

1. Raw Materials...............................................................................................................24

2. Manufacturing...............................................................................................................24

3. Delivery.........................................................................................................................24

Inventory Management............................................................................................................25

Maintenance.............................................................................................................................25

The Impact of COVID on the Organization.............................................................................26

Appendix..................................................................................................................................28
Fine Cotton Textiles 4

Executive Summary
This report consists of findings about one of the leading cotton textile companies in Pakistan:
Fine Cotton Textiles. It will look into the different operations which made it establish itself as
a successful Business-To-Business company with buyers across the world and in one of the
strongest economies of the world: United States of America.

The report will firstly compare the position of the company in relation to its competitors in
the relevant industry of textile. It will also analyze how well it has been doing over the past
few years to measure the success of the company and monetize all that it has managed to
achieve. It will also shed light on the company’s objectives, mission statement and where it
sees itself in the future. It will also talk about its history to give a better idea of what led to
the establishment of the company.

The report will then look into the macro environment factors the company has to live through
and how those help make or break the company. The macro environmental factors concerned
are: political, economic and social. The impact of all these factors on the production and
manufacturing processes will be discussed in great detail. Further into paper, the relationship
maintained with the customers, i.e., the buying organizations will be talked through.

The pricing strategy used by the company to ensure that buying organizations stick around
for a long time will be analyzed to get a better idea of how the company markets its goods.
The way that the company formulates prices and set them for its customers will also be
discussed in detail.The paper will also talk about the supply chain management and the rating
of the company by a famous SCM rater Sedex. It will look into the supplies and the
processing that goes into the making of all the products. Warehousing and logistics will also
be discussed in this section.

Next, the report will look into the promotion techniques used by the company to secure
existing buyers and attract potential buying organizations. It will highlight the trade show the
company regularly takes part in to showcase its product. The buyer-seller relationship as a
result of all the company’s efforts is a vital part of the report which will look into the success
of the company in retaining its customers.

Lastly, the report consists of recommendations for the company which will suggest ways it
can improve its reach, sales and achieve the goals set for it better. These suggestions will
Fine Cotton Textiles 5

provide the company with the best way to spread its word into the market and have more
regular customers.

Background
Fine Cotton Textile is located in Phool Nagar as well as Karachi (Korangi Creek), It has been
providing apparel to institutional and retail customers since 1990. Over the years Fine Cotton
Textiles has built their reputation in manufacturing and exporting value added apparel,
garments, home textile etc. to the Textile market of Pakistan. They also have a well-
established network to export their garments in the global textile industry.

Their manufacturing facilities use state-of-the art green technology which is environmentally
friendly. They aim to set the benchmark for quality for the rest of the industry. Their ethical
and responsible supply chain processes are globally recognized while catering to the needs of
their customers through timely delivery of premium quality products.

All the products that Fine Cotton Textiles produces are particularly designed, constructed and
tested for prison use due to the problems created by inmate abuse and industry laundry
systems. They offer products which can withstand any applied force. Fine Cotton Textiles use
unique and special sewing machines, fabric, threads, elastics, and other materials which are
specially prepared for jail and prison use.

Core Values and Principles

Fine Cotton Textiles strives to create stakeholder value, by sticking close to its core values
and principles, which guide its interactions with suppliers, customers, as well as with each
other. These core values and principles are Integrity, Continuous Learning, Partnership,
Delivering on Promises, and Innovation. Starting off with Integrity, Fine Cotton Textiles
believes in conducting its business dealings with honesty. It respects its clients, suppliers,
workers, members of society and the environment. Moving on to Continuous Learning, Fine
Cotton Textiles believes in continuous improvement through learning from experiences and
interactions, and thus is committed to R&D for Kaizen, to satisfy customers and maintain
standards. Moving on to Partnership, Fine Cotton Textiles believes in working closely with
its clients and suppliers, in order to better provide them with high quality products and
maintain a reliable and continuous supply inputs. Talking about Delivering on Promises, at
Fine Cotton Textiles, everyone is committed towards satisfying the customers and adding
value to society. And finally, moving on to Innovation, Fine Cotton Textiles believes that
Fine Cotton Textiles 6

innovation in its products and processes is the key for being the best in the industry, like the
innovative green technology in its facilities.

Mission Statement
Ensuring on-time delivery of premium quality products and a memorable experience
for our customers while contributing to the development of our workforce.

Vision Statement
To be the leading supplier for institutional and retail customers globally while adding value to
the society.

Design of Goods and Services

Fine Cotton Textiles’ product line started off with institutional wear, specifically inmate clothing, in
1990 and expanded their product line in general garments, hotel linens, hospital sheets, towels etc.
Their product line was designed by first doing a market research on the demand of products and
then as demand and customers’ requirements increased, so did their product line. Today, their
product line consists of:

 Medical Wear
 Home textiles
 Bath accessories
 Construction apparel
 Inmate clothing
 Denim Wear
 General Garments
Fine Cotton Textiles 7

The medical wear consists of reusable and disposable textile product found in hospitals,
nursing homes and laundries. The home textiles at Fine Cotton include bed linens, pillow covers,
duvet covers etc. Bath accessories consist of Terry Towels, Institutional Towels, Bath Towels,
Bathrobes, Hospital Towel Supplies and Shop Towels. Construction wear for construction workers,
carpenters, utility workers, electricians and more lines of work where quality and safety are key are
also manufactured by Fine Cotton Textiles. The inmate clothing exported includes prisoners,
including prison uniforms, work release clothing, prison undergarments, work clothes and
outerwear, property storage bags and laundry bags. Denim wear and general garments like t-shirts,
pants, trousers, hoodies, jackets as well as undergarments are manufactured here as well.

HRM and Job Design

Fine Cotton textiles builds its HRM around internal growth, in the sense that after an
extensive recruitment process within which they tend to focus primarily on employee
referrals, where high level employees might recommend candidates whether they be working
full time or part time at another company, or even if said candidates are jobless at that
moment in time and on internal searches. The process of the internal search relies entirely on
building up the company’s existing employees, eventually, should they show the suitable
level of proficiency in their tasks, promoting them to higher positions. Since this is the main
way Fine Cotton Textiles handles its job recruitment, it’s gone through intensive stress testing
and has been proven as not only a valid method, but highly reliable one as well. The company
also relies on more conventional means of employment, such as standard newspaper
advertisements or even government officiated public employment agencies. They also use the
more conventional routes, they handle them in a manner not dissimilar to most businesses, in
that they acquire the candidates CVs and after evaluating exactly what position they’re
applying for after refining each result, they send them to departmental heads for their
interview. However, if the job they applied for is especially important, or higher level, they
get sent to the company CEO for their interview. The company also provides a vast array of
both on the job and off the job training methods, including but not limited to

• Apprenticeship

• Films and Videos

• Simulation Exercises
Fine Cotton Textiles 8

• Vestibule Training

The company also provides a variety of employee benefits, which include retirement
programs, paid time off from work, compensations, even social security, however even
though the company’s structure is designed around preventative measures to ensure
downsizing be a final option, it does not change its inevitability. That being said Fine Cotton
Textiles takes many measures to provide its employees further stability even in the worst-
case scenarios. They work around downsizing by using methods such as departmental
transfers, lowering work hours, even job sharing. They do everything in their power to
prevent any layoffs, whether they be due to economic reasons or those rooted in internal
conflict. Whilst these methods do go a long away in providing long term sustainment, at the
end of the day, if the employee is not performing up to the required standards, they will be
laid off.
Job Design
When it comes to the job design at Fine Cotton Textiles, the HR department is responsible in
curating the best employees through a variety of different techniques which includes hiring
through LinkedIn, through job portals like Rozee.pk, through newspaper advertising and walk
ins of skilled labor who are hired based on their level of experience and skills that they bring
into the organization.
Fine Cotton Textiles 9

Moreover, Facebook makes it easy to start a company networking site like the one Fine
Cotton Textiles has made, this then helps the company in recruiting purposes.

Along with this Fine Cotton Textiles also lets potential candidates know about vacancies on
its website www.finecottontextiles.com under the “Careers” tab. It asks candidates to send
Fine Cotton Textiles 10

their resumes at imran@finecottontextiles.com which they assure will be added to their data
bank.

The HR department at Fine Cotton Textiles is exclusively responsible for overseeing and
standardizing the whole hiring and recruitment process. That being said, more than 80% of
the hiring is done through conventional advertising and through an existing employee’s
reference which is based on experience and skills.
Hierarchy

Chief Executive
Officer

Director

General Manager

Marketing Human Resource

Product Director Planning Director Finance Diirector Export Director
Director Director

Marketing Human Resource Planning

Product Assistant Finance Assistant Export Assistant
Assistant Assistant Assistant

Quality Quality Quality Quality Quality

Controllers Controllers Controllers Controllers Controllers

Operatives Operatives Operatives Operatives Operatives Operatives

Figure 1: Organogram for Fine Cotton Textiles

Fine Cotton Textiles 11

A total of 600 employees work at Fine Cotton Textile, which mainly comprises of the
operatives. Workforce planning process at Fine Cotton Textiles is to forecast the Director’s
demand for labor and supply of labor; then identify supply-demand gaps and develop
effective action plans to fill the projected gaps.

The Karachi Unit of Fine Cotton Textiles consists of the following:

Fine Cotton Textiles has 3 employees in the Marketing and Finance department, 2 employees
working under the Human Resource department, 6 employees in the Product Planning
department, 4 employees working for the Export department and 600 operatives directly
associated with the machinery work. Moreover, the unit has 4 security guards, 1 driver, 2
riders along with 10 support staff looking after the cleaning of the factory.

The Phool Nagar, Kasur Unit of Fine Cotton Textiles consists of the following:

It has 2 employees in the Marketing and Finance department, 2 employees working under the
Human Resource department, 3 employees in the Product Planning department, 2 employees
working for the Export department and 200 operatives directly associated with the machinery
work. Moreover, the unit has 4 security guards, 1 driver, 1 rider along with 5 support staff
looking after the cleaning of the factory.

Training and Development Programs

At Fine Cotton Textiles, the trainings are done through PowerPoint slides, manuals, computer
based activities for some jobs where they are assessed on intellectual abilities as well. Other
methods are through audio recordings, videos with step by step process and hands on
experience with the machinery.

Figure 2: Development Phase at Fine Cotton Textiles

Organizational Structure
The organizational structure defines how the activities taking place in a company contribute
towards meeting its overall objectives and aims. There are six elements of an organization’s
Fine Cotton Textiles 12

structure namely unity of command, span of control, work specialization,

departmentalization, centralization or decentralization and lastly, authority. Talking about
work specialization first, all the workers employed at Fine Cotton Textiles have different jobs
to take care of. They have different roles and different responsibilities to cater. For example,
when it comes to manufacturing a product, one worker would be specialized in dying while
the other would be an expert in weaving. Then we have unity of command. Considering that
Fine Cotton textiles has a hierarchical structure, the subordinates have only one boss to report
to. An employee from the marketing department would directly report to the marketing
manager who would directly report to the marketing director. Fine Cotton Textiles has a wide
span of control. Every department has different heads and have multiple subordinates
reporting back to them. The marketing director has 50 employees to cater which include the
marketing associates and sales associates. The production and planning department have 150
employees and they report to their respective heads. This explains that the span of control is
wide for Fine Cotton Textiles. Also, considering that it is a large company, having a wide
span of control makes a lot of sense. This can also explain why Fine Cotton Textiles has a
long chain of command. Information passes from the lower management to the middle
management and from there to the upper management. It then goes to the directors who
convey it to the Chief Executive Officer, if it is important. The labor reports to the quality
manager who then reports to the department head. The department head then reports to the
respective director who report to the Chief Executive Officer. In case of departmentalization,
the activities are grouped according to the functions. The company has its marketing
departments, human resource department, product department, planning department and
finance department. These departments coordinate with each other throughout. Mass
production is practiced in Fine Cotton Textiles because the orders are made in bulk and
customers usually want to take advantage of economies of scale. Also, the products are
usually exported and if they do not practice mass production then they would incur a heavy
loss. Overall it is a learning organization. Their organizational culture is caring and trustable.
They have a sense of responsibility and want to prosper together while maintain strong
relationships. The information sharing is done accurately and on time considering that the
decentralization is practiced. The employees are encouraged to contribute in important
meetings. The employees are empowered enough and share the same vision for the company.
Fine Cotton Textiles 13

Type of organization
We can also conclude that, Fine Cotton Textiles ltd. has a functional structure. That is
because the employees are grouped together according to their specialties and skills as it has
been discussed earlier that there are multiple functional departments. The company has
adopted a cost leadership strategy. They have a wide customer base as a result of this as their
customers are attracted to the low prices offered due to them having a low cost. Lastly, the
company can be classified as being both, mechanistic and organic. That is because even
though they have a tall structure, rigid hierarchical relationships, extensive
departmentalization and fixed rules, the company also practices decentralization and has
adaptable duties.
Authority and Power
The managers at Fine Cotton Textiles have enough authority (Line authority). The production
and planning department has its respective directors and managers who deal with the
workers. They can easily deal with the issues and concerns of the labor and other employees
working under them. For staff authority, the directors of each departments have their
respective assistants and associates to coordinate with. The planning and production
department having the sales head reporting to the department head is an example of this. Fine
Cotton Textiles offers legitimate power to its employees. As they move up the hierarchy,
their power increases. However, they do offer power inside the core of the cone. They have
different project heads, group heads and department heads.
Centralization vs Decentralization
Talking about whether Fine Cotton Textiles practices centralization or decentralization, the
firm practices absolute decentralization. A lot of decision-making power is allotted to the
employees of the company. They are offered enough guidance and assistance. The day to day
decisions are made by the department heads and the small issues are resolved by them as
well. Only if the issue cannot be resolved by the department heads without the assistance of
the directors, guidance is provided to them. This allows the employees to feel connected to
the business and also makes them feel in charge. Centralization is not practiced here because
providing some power and authority to the employees is important. Keeping in mind it is a
large corporation, centralization will make the decision-making process slower.
Motivation
In terms of Fine Cotton Textiles’ motivation strategy, instead of an entirely monetary basis or
an entirely self-fulfillment basis, the opted for a middle ground, mixing strategies between
Fine Cotton Textiles 14

the two. That being said, whilst this concept is fairly standard, its approach is what
distinguishes it from most other businesses. In terms of monetary value, money acts as a
large starting motivator, as a way to drive, primarily, newer employees to be more effective
and efficient in these tasks, going as far as providing significant extra pay as a high incentive.
That being said, beyond this monetary context, there’s a large focus on social needs, esteem
needs and self-actualization needs. In terms of social needs, the company goes to great
lengths to promote a job teaching culture, internally, allowing incoming prospects to settle
into the business not only at their own comfortable pace, but in a welcoming environment. Its
due to this approach that employees’ esteem needs are also fulfilled, i.e. by allowing
employees the time they need be allotted, even in the case of older employees attempting to
learn new skills for higher promotions, a sense of autonomy and achievement is reached
whilst simultaneously gaining a level of recognition amongst their peers, so much so that
another incentive for good performance is open appreciation in front of the whole
department. Finally, self-actualization is addressed by the companies promotion policy,
where if the employee (motivated by the mentioned factors) will have not only found
significant self-fulfillment, but a drive to achieve even further, something that ends up getting
exacerbated when they are promoted.

Quality Management
Fine Cotton Textile is one of the leading textile companies when it comes to exports and the quality
that they offer to their clients. For maintaining their quality standards and continuous improvement in
their processes, they comply with IS0 9000 standards which makes sure that each industrial process is
up to the quality standards of European markets. Moreover, they follow TQM (Total Quality
Management), in which every aspect of their production is based on integrated quality management.

The process starts with the supplier from which the high-quality cotton yarns are collected and
integrated into the supply chain. Cotton quality is carefully selected based on customer demand.
However, Fine textiles prefer Ring spun organic cotton for most of their products along with Egyptian
and Denim cotton based on the type of products. Moreover, according to the product, they determine
the thickness or the rounds of thread in one yarn. Based on the product, for Denim, less thickness of
the thread is applied while for bedsheets or uniforms, a thicker thread is usually preferred.
Fine Cotton Textiles 15

Then the process moves to the next stage in which different types of modified processes are involved
including weaving, designing, and printing, dyeing, and fibre construction. All these processes go
through a set of standards usually known as garment quality standards or management. These
standards include material inspection, proper machine maintenance, and usage, following of SOPs on
the premises regarding health and safety, sample evaluations, zero defects assessment, final quality
inspection and review of the product, and safe packaging. Recently, they’ve been awarded the title of
Number 1 manufacturer and supplier of inmate uniforms in Pakistan. To achieve, such a distinction
among their competitors, they have introduced special sewing machines along with supplementary
products including elastic, fabric, and threads to maintain and elevate the quality of their products.

Moreover, Fine Cotton Textiles also follow government procedures for waste management. Solid
waste, most of it is re-sold into the market while liquid waste is dumped into government-designated
dumping areas.

The final stage includes packaging and distribution in which they have huge factory storages to keep
the finished products and a proper distribution channel to ensure that the goods are delivered safely
and on time. They are also certified with SEDEX trade membership which plays an important role in
having standard working conditions, keeping a check and balance of health and safety measures, and
properly adopting business and environmental ethics. Moreover, their packaging involves durable,
high-quality wrapping material that requires less space for storage and is durable, which makes it
feasible for them to transport their product to faraway storage facilities.

Thus, it is evident that Fine cotton textile integrates its processes from the very beginning to the end
consumer level which allows them to have customer loyalty and better face value than its competitors.

Process Design
To obtain the final products at Fine Cotton Textiles, they have to make their raw material go through
several stages. The processes that take place at Fine Cotton Textiles are discussed further below:
Fine Cotton Textiles 16

1. Weaving
This is done to produce the fabric which is then used to obtain the final product. Weaving is
done with the help of intertwining 2 sets of yarns in order to cross them with each other,
usually at right angles. At Fine Cotton Textiles, this is done with a power-operated loom.
Moreover, the company excels in several kinds of weaving such as twill weaving, satin
weaving, sateen weaving and plain weaving.

2. Singeing
Singeing in textiles is a mechanical treatment or finish to obtain a neat surface of the fabric or
less hairy yarn. In a singeing machine, the yarns or fabrics are exposed to direct flames or to
the heated plates to burn the protruding fibers. Hence, also called "gassing."
At Fine Cotton Textiles, this is done with the help of a singeing machine as shown below.
Fine Cotton Textiles 17

3. Mercerizing
Mercerization is an industrial process involving sodium hydroxide for cotton yarns or fabrics
to increase the luster and dyeability. But the mercerization of denim is usually carried out
after the denim is woven, and so it is different from the more common method of mercerizing
cotton yarn. However, at Fine Cotton Textiles only mercerization of yarn is done.

4. Dyeing
Dyeing mainly refers to the application of color to a textile fabric. This application of color is
quite permanent and cannot be washed off. The matter which transmits color is known to be
colorants. These colorants have permanence on textile materials and a natural affinity and
hence are called dyes. At Fine Cotton Textiles, they provide their customers with VAT
Dyeing, Solid Dyeing, Reactive Dyeing and Disperse Dyeing.

5. Printing
Some textile materials don’t require dyeing, instead they require printing. The application of
the color is done as a thickened paste which is then followed by fixation which is often done
by heating or steaming and lastly, the excess color is removed by washing.
Fine Cotton Textiles provides its customers with Rotary Printing, Digital Printing, Screen
Printing along with many other types of printing.
Fine Cotton Textiles 18

6. Cutting
Cutting is done with the help of straight knife fabric machine. It is a time-consuming
process since the labor does this manually.

7. Stitching
Stitching is done whereby the textile fabric is fashioned into a finished product; this is done
with help of several sewing techniques. At Fine Cotton Textiles, automated JUKI and Sewkey
machinery such as Lockstitch machine, Overlock/ Safety Machine, Zigzag Stitching Machine,
Cover Stitch Machine, Button Sewing Machine, and Pinpoint Sewing Machine are used to
obtain the final product.
Fine Cotton Textiles 19

8. Finishing
After the product has been made, Fine Cotton Textiles takes a step further to finish the
product. The company provides a range of finishes for its products such as Anti-Bacterial
Finish, Wrinkle Free Finish and Flame Retardant Finish. Before packaging, the items are
ironed to give them a professional finish.
Fine Cotton Textiles 20

9. Packaging
Finally, packaging is done at Fine Cotton Textiles. The final products are wrapped in plastic
packaging and set into cartons to be delivered abroad in containers and finally in container
ships.

Capacity Design
Capacity planning is an important part of operations management at Fine Cotton Textiles as that is
how the firm plans its capacity requirements. Around 40,000 to 50,000 metres of fabric is produced
on a daily basis while the extra production is inventoried. That capacity required during the
production process is determined by the previous set of orders and forecasting done at the beginning
of production. The Capacity planning is mainly based on the sale of products in the product portfolio
that are more popular and have a greater customer demand. According to this, the operations manager
plans the overall capacity for production. The capacity of each product can vary according to the
demands of each product in the product portfolio. The production process is enhanced by the
technology used at Fine Cotton Textiles which is discussed in detail below.
Fine Cotton Textiles 21

Weaving is done by a Sulzer Weaving Machine which is a shuttle and shuttle-less weaving loom that
is used for various kinds of woven fabric formations, including power looms such as Dobby,
Jacquard, and Circular. It works at a speed of 350 RPM, RPM denotes the number of weft threads
inserted per one minute. Twill weaving, satin weaving, sateen weaving and plain weaving are some of
the many weavings that Fine Cotton Textiles excels at.

For Dyeing, a yarn dyeing machine is used which is GS HOR, it is a high-pressure high temperature
horizontal dyeing machine (GS HOR) with modular carriers and vertical spindles. These machines
work up to at 6 bar and 140° C in air pad system and with internal expansion of bath. It ranges from
50 to 600KG. VAT Dyeing, Solid Dyeing, Reactive Dyeing and Disperse Dyeing are all available at
Fine Cotton Textiles.

When it comes to stitching, Fine Cotton Textiles uses JUKI and Sewkey stitching machinery. The
stitching machinery includes Lockstitch machine, Overlock/ Safety Machine, Zigzag Stitching
Machine, Cover Stitch Machine, Button Sewing Machine, and Pinpoint Sewing Machine to obtain the
final product. These automated machineries make the stitching process much faster as generally the
speed of such machinery is 3000 stitches per minute which would have been much lower had the
stitching been manual.
Fine Cotton Textiles 22

Printing is done by rotary printing machinery while digital printing and screen printing are also
available at Fine Cotton Textiles. When there is limited time available, the company usually goes for
digital printing as it is faster than rotary printing.

Finishing and packaging is done manually by labor hence it is a time-consuming process. The labor
uses scissors to make sure that no stray threads come out of the end product. Along with the end
product is also sprayed with a substance that makes it flame retardant, wrinkle-free and anti-bacterial.

The machinery used at Fine Cotton Textiles makes the production process an efficient one; however,
finishing and packaging still proves to be a time-consuming process. However, orders are still made
on time for shipment and time is managed according to the deadline for a specific order.

Location Strategy

Among one of the main and important functions of operations management is selection criteria for the
production facility. In the case of Fine Cotton Textiles, this was byarnased on various strategic as well
as geographic reasons which further aids the productivity of the land. The facility is located on, Old
Multan Road, Phool Nagar, Zila Kasur, Punjab, Pakistan. One of the main reasons why it has been
located in this area is because it is further away from the main city. There are various other production
facilities also that can be found nearby. Since these facilities are spread over a wide area, it is
important to ensure that they are available at a cost-effective price. As you move further away from
the main city, the population decreases and so does the price of the land therefore it is made more
feasible for such facilities to be set up here. There are various other factors which further aid in the
decision process. These include reasons such as the level of pollution produced by the production
facilities, including noise, smoke and potentially harmful different gases emitted into the
surroundings. Heavy vehicles often come to the factories for both, the pickup and drop off goods
which is further reason that the facility should be far away from the city area. The machinery used are
Fine Cotton Textiles 23

also heavy machines and may cause vibrations in the walls of the residential area which in turn may
further cause accidents to occur. Factories require an un-interrupted power supply in order to run
therefore the Government provides subsidies in the form of 22–24 hours of electricity in industrial
area. Many factories produce water pollution from the chemicals drained out and this may cause the
sewers to choke. Furthermore, factories require a labor-intensive workforce. Residential areas
however require high levels of security for women/girls and children. If, however, there was an easy
access to these areas by either parties, it might cause serious security concerns.

Layout Design and Strategy

Several types of layout decisions can be implemented by a manufacturing business which consists of
process-oriented layout, product-oriented layout, fixed position layout and so on. Fine Cotton Textiles
utilizes product-oriented layouts which are organized around products or families of similar high
volume, low-variety products. Repetitive and continuous production uses product-oriented layouts
where the assumption is that volume is

Both the Karachi and Lahore units have offices on the first floor of the factory where the assumption
is that volume is adequate for high equipment utilization. Since Fine Cotton Textiles produces several
products such as inmate clothing, denim, hosiery, etc., it goes through a continuous and repetitive
process. A product-oriented layout helps the company with efficient production.

Moreover, whatever raw material comes into the factory goes through the production process
immediately in order to fulfill the orders on time, so a product-oriented layout helps in the systematic
flow of processes to make the final products for Fine Cotton Textiles.

The company recently has revamped its conference room along with its offices since many customers
have started visiting the facility from abroad. The facility is now laden with chestnut sofas along with
a proper conference table and new PC’s to give it a more professional look. Along they have worked
on putting paintings as well as decoration pieces to make the ambiance of the offices and conference
room more pleasant. The offices and conference rooms are on the 1 st floor of the factory while the
production unit is on the ground floor. This is done so that the offices are far from the noisy
machinery used on a daily basis so that a much calmer and peaceful environment is attained for the
office workers.

Supply Chain Management

The process flow model at Fine Cotton Textile includes buying the raw material from suppliers,
manufacturing the raw materials as per the customer specifications, and delivering the augmented
product to the customers.
Fine Cotton Textiles 24

1. Raw Materials
Raw materials that FCT acquires include zips, yarn, and buttons. For raw materials, zips and buttons
are imported from China, yarn is bought from Master and Maqbool textiles. The products reach the
company’s warehouse that is also done in the warehouse within the factories in Lahore and Karachi.
As per the requirements according to the orders at factories, the raw material is used in both the units
of Lahore and Karachi.

2. Manufacturing
The yarn, zips, and buttons are then manufactured at Fine Cotton Textiles factories into products.
Machinery used for manufacturing are weaving, dyeing, printing, and stitching machines. The
product, after manufacturing, is tested to ensure high quality. Furthermore, Fine Cotton Textiles
creates total offering for its customers by ensuring evaluated prices, timely delivery, up-to the
standard quality, and through the company’s credible image in the industry.

3. Delivery
The product is sold to institutional and retail suppliers. Fine Cotton Textiles’ customers are suppliers
of prison clothing providers, hotel supplies providers, and daily wear clothing providers based in the
US. These companies then provide the products to end consumers that include prisons, hospitals,
retail stores, and hotels. Existing customers of Fine Cotton Textiles are, Zacron Textile, FSI Inc., Bolt
Textiles Inc., Paramount Textiles Inc., and Intralink Textiles Corp.

Supply chain management is the handling of the flow of production of a good or service. This process
starts from the collection of raw materials for the product and continuing till the product is delivered
to the final consumer. There are two types of subcategories that fall under supply chain management.
Namely these are, inbound and outbound supply chain management. The main difference between
these two subcategories is that in inbound management, the focus is more with regards to receiving
raw materials or products from a supplier to a warehouse while outbound management is the process
of delivering goods to the end user.

The first step in the supply chain management process of Fine Cotton Textile is the Definition stage.
This stage is to define the business goals and decide upon where to move on from that point. This
means that Fine Cotton Textiles will first check on its inventory levels regularly. In case inventory
levels are lower than they should be and to avoid inventory stock outs and bottlenecks in the
production process, the necessary steps are taken in order to ensure that raw materials are ordered
from the suppliers through the process of rebuying. Re-ordering or rebuying of raw materials is done
after every 3 months. Following this, prices are set for products based on the market conditions. Due
to the COVID-19 pandemic, the prices for raw material, labor costs and overhead costs had increased
hence the prices of the products were also changed.
Fine Cotton Textiles 25

Following this, the second stage in the supply chain process is the selection stage. This stage includes
researching the product quality standards and certifications. Fine cotton textiles have been certified by
Sedex, ISO 9000, and C-TPAT, therefore making its products more reliable for its customers. This
stage is also part of the inbound management process. The third step in the supply chain process is the
selection process. As the name implies, the selected products; raw materials are now delivered from
suppliers to the factory warehouses in Lahore and Karachi. The one in Karachi is the main warehouse.
It is on Ibrahim Haydry Road, Korangi Creek.

The last step in this process is the end game stage. In this process the product is tested to ensure
quality levels. There is a separate unit set up in the Karachi warehouse for this purpose. Since among
the various products, one of the products is inmates’ uniforms. As can be understood the inmates
would be treating the uniform with little to no care at all. Due to this reason, it is important that the
cloth quality is such that it cannot be ruined easily. Lastly, in the outbound management process, the
product is then exported to institutional and retail suppliers of the company such as Zacron Textiles,
Bolt Textiles, Paramount Textiles Inc. and Intralink Textiles Corp.

Inventory Management
Fine Textiles have maintained a smooth inventory management system based on the Push Inventory
strategy which is established on the forecasted amount of inventory that is identified and re-ordered
based on past customer demand and sales. This allows them to maintain a buffer stock that is
predictably sufficient for two to three shipments in the future. Moreover, when it comes to re-
ordering, most of their shipments of raw material is re-ordered after 3 months in which the current
demand is also fulfilled and the buffer stock is also maintained so that if there is a price change in the
market, they could cater those exchange rate risk efficiently.

Similarly, they also maintain a minimum stock which is usually based on the orders that are currently
in progress for which we can say that have a partial Just-in-Time inventory management system too
for their minimum requirements because their minimum inventory stock is based on the orders that
are in Work-in-Progress.

Therefore, they keep 10% of their order quantity as a minimum requirement stock which is usually
used to cater to urgent deliveries or unexpected orders that have to be fulfilled. Also, they keep all
their inventories in the factory warehouses rather than outsourcing or renting out the new warehouse
for their storage. However, this increases their holding costs but on the other hand, inventory shortfall
is avoided, and profits are made when the excess raw material is manufactured and sold.

Maintenance
Maintenance is the process of making sure all the assets in your factories and industrial plants are in
peak operating condition. However, maintenance managers also need to ensure that the equipment is
Fine Cotton Textiles 26

being kept in perfect shape without incurring high costs. It is crucial for maintenance to be kept up to
date to ensure that the production quotas are met, and efficiency is achieved. Fine Cotton Textiles has
achieved various certifications such as, SEDEX trade membership. In order to ensure that these
certifications are maintained, maintenance is an important part of the facility. Due to this reason,
mechanics are always available for the maintenance of the machinery. There is also renovation carried
out simultaneously along with the production process. In case of a problem which may arise, there are
spare parts of machineries always available so that the production process does not come to a halt
completely. There is also extra machinery for stitching which is available in case there is any
breakdown. In addition to these incentives are given to employees to ensure that they maintain the
quality of products being produced.

Scheduling

Fine cotton Textiles follow a rigorous method of scheduling which ensures that shipments are
always on time, preventing long delays and losing customer satisfaction. They make around
40000 to 50000 meters of fabric each day, depending on the demand and the sometimes
seasonal fluctuations might also change the amount of fabric that is produced in a day.
Moreover, this production is constant most of the year which means they produce this amount
every day.

The Impact of COVID on the Organization

At first, Fine Cotton Textiles just exported conventional suits, products and equipment that
are normally used in households, as well as government and private institutions – like Prison
and Hotels, but eventually it started making its own Clinical Masks and Personal Protective
Equipment (PPE), as – due to the outbreak of the pandemic – the increase in the demand of
these PPEs, to a point higher than what was being supplied into the global market, gave the
Organization the opportunity to fill that market gap and start exporting these PPEs, which
contributed to Pakistan exporting COVID products worth $100 million. This continued even
into the lockdown stages, as the Pakistani government encouraged domestic firms to continue
exporting, in order to minimize the negative economic effects of the lockdown. The
Organization – due to its adaptive nature – now being able to make this Protective Equipment
(Clinical Masks and PPEs) allowed it to provide them to its employees, so that they could
properly follow SOPs. This did not prove very difficult, as a significant part of the labor
chose to stay home during the lockdown, which allowed the organization to easily provide
the employees with the Protective Equipment they needed to fulfill the Government set SOPs.
Adding to the previous point, although a significant part of the organization’s employees
Fine Cotton Textiles 27

chose to remain home, the operations of the organization were not severely affected, as a vast
majority of its operations are automated.

Other than this, Fine Cotton Textiles distributed pamphlets, as well as posted notices
throughout the workplace, in order to educate its employees on the proper conduct of SOPs
and other lockdown procedures. The managers further reinforced these teachings to make
sure proper social distancing was being practiced in the workplace.

Furthermore, due to the fall in the price of raw materials during to the lockdown, the overall
operating costs of the organization fell, allowing Fine Cotton Textiles to lower its prices and
thus, increase its exports. Also due to this fall in overall operating costs, the organization did
not need to lay-off any of its employees, while keeping their wages the same, unlike their
competitors, as well as other national and international organizations.
Fine Cotton Textiles 28

Appendix