Professional Documents
Culture Documents
Team Synergy
Abhishek Kumar Mangala M Rashmi Rao Jisna P Gopi
Manufacturing arm of Madura Garments having brands like Louis Philippe , Van Heusen , Allen Solly and Peter England It comprises of 4 factories located in Bangalore , with a total employee strength close to 3000. The product range offered is mens and womens formal Shirts , Trousers and Suits with annual volumes of 43.6 Lakh garments.
AB Nuvo
Madura Garments
Madura Clothing
Note:-To understand the apparel supply chain in brief which will help to understand the project better
APR 2008 MAY 2008 JUN 2008 JUL 2008 AUG 2008 SEP 2008 OCT 2008 NOV 2008 DEC 2008 JAN 2009 FEB 2009 MAR 2009 APR 2009 MAY 2009 JUN 2009 JUL 2009 AUG 2009 SEP 2009 OCT 2009 NOV 2009 DEC 2009 JAN 2010 FEB 2010 MAR 2010
APR 2008 MAY 2008 JUN 2008 JUL 2008 AUG 2008 SEP 2008 OCT 2008 NOV 2008 DEC 2008 JAN 2009 FEB 2009 MAR 2009 APR 2009 MAY 2009 JUN 2009 JUL 2009 AUG 2009 SEP 2009 OCT 2009 NOV 2009 DEC 2009 JAN 2010 FEB 2010 MAR 2010
FG inventory in the range of 5000pcs while Retail sales in 400pcs per month, hence carrying 10 months more inventory Due to such high FG inventory level, cash flow for business is blocked and discounted sales increasing to improve it
PROJECT CHARTER
Business Case : Total Lead time of Apparel supply chain was 130 days and there has been no replenishment leading to high outof-stock rate. The inventory level was very high carrying 9 months inventory. This threw up tremendous potential for improving the lead time and inventory reduction Scope: Fabric Retail Sales procurement to
Relation with business case , approach , scope , CTQs and benefits were finalized in the charter
SIPOC
Core
FG storage at WH
Retail sales
Factory
Warehouse
Retail Store
Consumer
Core products would be managed using continuous replenishment at FG as well as fabric stages
Garment Production
Fabric
Order Details
PO Preparation
PO Purchase
WO is generated
Fabric Avb.
no
Supplies Fabric
Supplier
Core products would be managed using continuous replenishment at FG as well as fabric stages
Fabric
Reduction of Lead time and inventory in Apparel Supply chain for Core Replenishment System
Garment Manufacturing
RECUTTING% REWORK%
Finished Goods
INVENTORY (DAYS)
Retail
CTQ TABLE
Critical To Quality Characteristics (CTQ)
1. FABRIC PROCUREMENT LEAD TIME (DAYS)
KANO Status
MUST BE
18 Days
<12 Days
> 12 Days
MUST BE
6. REWORK (%)
The project objective (Y) is addressed by focusing on the Must Be CTQs (ys) identified as shown above
MILESTONE
GANTT CHART
Jun10 DEFINE Project Charter SIPOC CTQ Tree Diagram MEASURE As-is CTQ Status APPROACH/ ANALYSIS Cause & Effect Diagram FMEA DEPLOYMENT/ IMPROVE NVA Identification & stratification Setting up section wise WIP Norms Single piece clearance on daily basis Developing system to monitor online ASSESSMENT & REVIEW/ CONTROL Implementing control mechanism Sustenance (Review & Assessment) Replication Jul10 Aug10 Sep10 Oct10 Nov10 Dec10 Jan11
The Strategic supplier relationship management is required to Ensure the strategic partnership with fabric mills Ensure reduced fabric lead time by Vendor managed inventory Ensure improved service levels for fabric lead time and quality Ensure building base stock to service peak season demand
ANALYZE
An internal brainstorming session, helped to narrow down the Focus area for Deployment in spoke from
IMPROVE
Supplier Segmentation
(Supplier wise strategy )
Vendor Connect
(IT Enablement)
Supplier Feedback
Supplier Forums
(Relationship Mapping)
SATISFACTIONSURVEY
CONTROL
After establishing Strategic supplier relationship, critical vendors identified based on following parameters for rationalization: Geographic Location Delivery, Quality, Cost VMI has been adopted for critical vendors by providing them Quarterly projections to deliver stock on-demand After implementing VMI, due to reduction in Fabric lead time and improved service levels, base stock was built to service
ESCALATION MATRIX
LEAD TIME VENDOR/ DELAY INCHARGE
14 Days 10 Days 7 Days 2 Days
Reorder Point Safety Stock
BRAND HEAD
The reduction in Garment manufacturing lead time is done by Ensure timely delivery of finished goods at warehouse against SLA Identifying potential causes for high manufacturing lead time Identifying root causes by using FMEA Implementing improvement solutions for those root causes Implementing controls to ensure that implemented solutions sustain
An internal brainstorming session, helped to narrow down from 52 xs to more likely root causes for further analysis
Further, FMEA was carried out to help in prioritizing the potential root causes
Single pc clearance
Cause
Difficulty of Detection
(C) Detection
(High / Medium / Low) Lack of work aid Mismatching of material Fabric Defect & Shade variation Low Medium Medium Medium Medium High High Medium Low Low Medium
AxBxC
Improper method due to lack of adherance to SOP Low Planning procedure leading to improper release of work orders High sectional WIP due to lack of adherance to WIP Norms Delay in single piece clearance due to lack of supervision
6 6 High RPN root 6 6 1 causes 486 and 729 respectively 6 9 1 are identified and action 1 9 taken to 6 reduce it
36 36 54 54
Medium
High
Medium
6
9
9
9
6
6
324
486
High
High
Medium
High
High
High
729
IMPROVEMENT
Delay in single piece clearance due to lack of supervision Tracking format implemented for tracking down the single piece in the section Operators and supervisors were educated to clear single piece Daily review for deviations
SINGLE PIECE CLEARANCE TRACKING
IMPROVEMENT
High Net WIP due to lack of adherance to WIP norms Section wise norms were fixed based on the daily production of section Implementation of pull system in WIP based WO release Daily review for deviations
Low
Medium
High
54
Lack of work aid Mismatching of material Fabric Defect & Shade variation Improper method due to lack of adherance to SOP Planning procedure leading to improper release of work orders High sectional WIP due to lack of adherance to WIP Norms
6 6 1
6 9 9
1 1 6
36 54 54
With the implemented Rating (1-6-9) 1 = solution RPN of root lowest, 6 = medium, 9 = highest causes came down 1 to 6 9 from 486 and 729 54 respectively which validates the 6 6 1 effectiveness of 6 9 1 solution
1 9 6
54
36 54 54
Medium
High
Medium
324
36
High
High
Medium
486
Establishing section wise WIP norms and ensuring adherance to it Establishing single piece clearance tracking sheet and ensuring adherance to it
54
54
High
Delay in single piece clearance due to lack of supervision
High
High
729
CONTROL
On-site board for production monitoring , style description and daily wo clearance
Single piece clearance of monitoring on a day to day basis Regular training to operators on clearing single pieces on top-priority On-site board for supervisors to keep tracking single pieces and Section wise WIP Holding dispatch till 100% single pc clearance Weekly reviews by Production Manager for ensuring adherance to Section wise WIP norm and single pc clearance
2-Variance test was done and since pvalue is greater than 0.05, there is no significant change in the variation 2-sample t-test was done and since the p-value is less than 0.05, there is significant reduction in throughput time.
Two-Sample T-Test and CI: After Tpt time, Before Tpt time Two-sample T for After vs Before N Mean StDev SE Mean After 4 12.50 2.65 1.3 Before 9 29.44 6.37 2.1 Difference = mu (After) - mu (Before) Estimate for difference: -16.9444 95% upper bound for difference: -12.4122 T-Test of difference = 0 (vs <): T-Value = -6.78 P-Value = 0.000 DF = 10
The Warehouse replenishment system for finished goods to warehouse required to Ensure work orders are created to fill the inventory gap at warehouse Ensure that replenishment is aligned to sales as per pull model Ensure that inventory carrying cost of finished goods is reduced
IMPROVE
Retail Store
2 Days
1 Day
Factory Warehouse
11 Days against SLA
Wo Release
Forecasting/ WH Stock Gap against Norm
Every Monday
1 Day
Wo Creation
Every Tuesday
Warehouse replenishment approach to provide the brands with a competitive advantage of Replenishment Model, which characterizes Planning Horizon of fortnight with Weekly Wave Model of Work Ordering and Delivery cycle
IMPROVE (Contd)
Work ordering cycle : Weekly (on every Tuesday), Delivery cycle : 12 working days from day of work order creation for blazers/ Suits MOQ per style code : 10 pcs (based on cutting and marker laying efficiency) Fabric Norm: 1 month of sales Warehouse Norm: 1 month of sales 300 Assessment Mechanism (Daily) OTIF Lead Time Review Mechanism (Quarterly) WH Inventory Fabric Inventory Service level Agreement
0 May Jun Jul Aug Sep Oct
200
100
150
GAP REPLENISHMENT
50
CONTROL
For process, Smart Transactional Excel Macros were developed for: Monitoring Retail Sales Monitoring Retail Inventory Monitoring WH Inventory Monitoring Gap in WH inventory against Norm due to retail sales Work order need to be created based on gaps on weekly basis
Based on the Scenarios, work order were created to replenish the gap in warehouse inventory
To improve the transparency in work order execution as control sheet, Daily status is sent to all stakeholders
Escalation matrix established for handling lead time delays
ESCALATION MATRIX
LEAD TIME SUPERVISOR PRODUCTION FACTORY DELAY MANAGER MANAGER
4 Days 3 Days 2 Days 1 Day
HEAD OF MFG
Daily Status of Work orders were sent to brands for ensuring the transparency in work order execution
2-Variance test was done and since pvalue is greater than 0.05, there is no significant change in the variation 2-sample t-test was done and since the p-value is less than 0.05, there is significant reduction in inventory
Two-Sample T-Test and CI: After Inventory, Before Inventory Two-sample T for After Inventory vs Before Inventory SE N Mean StDev Mean After Inventory 7 72.4 28.4 11 Before Inventory 5 208.6 68.8 31 Difference = mu (After Inventory) - mu (Before Inventory) Estimate for difference: -136.171 95% upper bound for difference: -66.697 T-Test of difference = 0 (vs <): T-Value = -4.18 P-Value = 0.007 DF = 4
The Retail replenishment system for finished goods to retail stores is required to Ensure timely delivery of finished goods at retail store against SLA Ensure STO are created to fill the inventory gap at retail stores Ensure that replenishment is aligned to sales as per pull model Ensure that sale of finished goods is improved
IMPROVE
Provide information on store traffic, demand patterns, gaps in merchandise Provide with weekly control reports to monitor inventory and store look
Retail replenishment approach would ensure that local customer preferences as well as brands targeted sales is maintained...
IMPROVE
Retail management system -Micro strategy and Business warehouse was implemented in year 2009 to provide transparency across the 68 retail stores of LP Store Sales Store Inventory In-transit inventory To replenish retail stock in northern and western region, couriers are used to reduce replenishment time within 3 days All India One Stock (AIOS) system deployed for crossdocking, one retail store to another retail store
Business warehouse software to monitor in-transit inventory and AIOS system
CONTROL
For process, Out-of-stock and Transit time is monitored and reviewed on daily basis based on: Retail Sales Retail Inventory Retail inventory norm Monitoring gap in Retail inventory against Norm Stock transfer order need to be created based on gaps Escalation matrix established for handling transit time delays
Store Transit Time (Days) APK TN/ KERALA WEST NORTH AVERAGE
ESCALATION MATRIX
OUT OF STOCK
4 Days 3 Days 2 Days 1 Day
VENDOR/ INCHARGE
RETAIL MERCHANT
RETAIL HEAD
BRAND HEAD
(IN PCS) Actual Out-ofStock stock 932 435 830 537 1067 300 2568 166 2876 0 2754 0
2-Variance test was done and since pvalue is greater than 0.05, there is no significant change in the variation
2-sample t-test was done and since the p-value is less than 0.05, there is significant improvement in sales
Two-Sample T-Test and CI: Before Sale, After Sale Two-sample T for Before Sale vs After Sale SE N Mean StDev Mean Before Sale 12 174.7 43.0 12 After Sale 3 717.7 38.7 22 Difference = mu (Before Sale) - mu (After Sale) Estimate for difference: -543.000 95% upper bound for difference: -482.904 T-Test of difference = 0 (vs <): T-Value = -21.26 P-Value = 0.000 DF = 3
OVERALL BENEFIT
FINANCIAL BENEFIT FOR SUITS & BLAZER IN RETAIL CHANNEL BUDGETED SALES PROJECTION (JAN11-DEC11) 3375 pcs (Rs. 1.68 crores/ Annum) DUE TO RETAIL REPLENISHMENT, 40% REDUCTION IN BUDGETED SALES LOSS
NOV10- JAN11 ACTUAL SALES IMPROVEMENT 800 PCS, ACTUAL EXTRA REVENUE Rs20 Lacs
EXPECTED SALES IMPROVEMENT DUE TO RETAIL REPLENISHMENT 1350 pcs/ Annum EXPECTED PROFIT DUE TO SALES IMPROVEMENT Rs33.6 Lacs/ Annum (Profit@Rs 2500/pc)
FUTURE ROADMAP
Automating the mechanism for forecasting Channel wise sales trend by identifying the best tool among the several tools by Q1
Automating the process of setting the inventory norm across the supply chain quarterly by Q1
Automating the transaction, which triggers the stock transfer order, work order for style codes and purchase order for fabric codes by Q2 Increasing the Scope of this project to different products and channels
BRAND
LP LP LP LP LP LP VH VH VH VH VH VH
CHANNEL
RETAIL TRADE RETAIL TRADE RETAIL TRADE RETAIL TRADE RETAIL TRADE RETAIL TRADE
PRODUCT
S&B S&B SHIRT SHIRT TROUSER TROUSER S&B S&B SHIRT SHIRT TROUSER TROUSER
EXP TIME
Q1 Q2 Q2 Q1 Q1 Q1 Q1 Q1 Q1 Q2 Q2
THANK YOU
SUPPORTING DATA
NORMS CALCULATION FOR FABRIC & FG REORDER POINT = SAFETY STOCK + AVERAGE DEMAND DURING LEAD TIME
SAFETY STOCK = SERVICE LEVEL x STD DEV OF PROJECTION x SQRT(LEAD TIME)
LINEAR REGRESSION
Y = AX + B
A = 5.0852174 B = 632.18478
MONTHLY ADJUSTMENT
2008-09 APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH 676 580 577 610 752 423 669 1,009 985 1,014 845 374
2009-10 379 400 487 745 781 458 494 1,029 1,016 1,308 714 373
MTH. AVE 528 490 532 678 767 441 582 1,019 1,001 1,161 780 374
CUM AVE 696 696 696 696 696 696 696 696 696 696 696 696
MONTHLY FACTOR 0.758174632 0.704022989 0.764367816 0.97341954 1.101293103 0.632902299 0.835488506 1.46408046 1.4375 1.668103448 1.119971264 0.536637931
ADJUSTED FORECAST
2010-11(R) APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH 759 764 769 775 780 785 790 795 800 805 810 815
2010-11(A) 576 538 588 754 859 497 660 1164 1150 1343 907 437
1,000
1,200
1,400
1,600
200
400
800
600
0 APR 2008 MAY 2008 JUN 2008 JUL 2008 AUG 2008 SEP 2008 OCT 2008 NOV 2008 DEC 2008 JAN 2009
GRAPH
FEB 2009
MAR 2009 APR 2009 MAY 2009 JUN 2009 JUL 2009 AUG 2009 SEP 2009 OCT 2009 NOV 2009 DEC 2009 JAN 2010 FEB 2010
MAR 2010
APR 2010 MAY 2010 JUN 2010 JUL 2010 AUG 2010 SEP 2010 OCT 2010 NOV 2010 DEC 2010 JAN 2011 FEB 2011 MAR 2011
SALES % CALCULATION
AVERAGE 326 Sales% 44.10%
BRAND LP CORE
ROLL DOWN
BRAND SALES%
APR 2010
MAY 2010
JUN 2010
JUL 2010
AUG 2010
SEP 2010
OCT 2010
NOV 2010
DEC 2010
JAN 2011
FEB 2011
MAR 2011
576
538
588
754
859
497
660
1164
1150
1343
907
437
LP
44.10%
254
237
259
333
379
219
291
513
507
592
400
193
APR 2010
MAY 2010
JUN 2010
JUL 2010
AUG 2010
SEP 2010
OCT 2010
NOV 2010
DEC 2010
JAN 2011
FEB 2011
MAR 2011
576
538
588
754
859
497
660
1164
1150
1343
907
437
LP
43.28%
249
233
255
326
372
215
286
504
498
581
393
189
APR 2010
MAY 2010
JUN 2010
JUL 2010
AUG 2010
SEP 2010
OCT 2010
NOV 2010
DEC 2010
JAN 2011
FEB 2011
MAR 2011
APR
LP CORE 200910
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
171
LP CORE 201011
213
316
337
453
267
272
471
333
366
255
259
254
237
259
333
379
219
291
513
507
592
400
193
249
233
255
326
372
215
286
504
498
581
393
189
260
287
382
341
498
290
363
533
377
376
324
304
t2
t y t
2
ty
y2
t2
ty
y2
t2
1
2 3 4 5 6 7 8
20
30 50 70 30 40 60 80
20
60 150 280 150 240 420 640
400
900 2500 4900 900 1600 3600 6400
1
4 9 16 25 36 49 64
9
10 11 12 13 14 15 16
40
60 80 90 50 80 90 100
360
600 880 1080 650 1120 1350 1600
1600
3600 6400 8100 2500 6400 8100 1000 0
81
100 121 144 169 196 225 156
125
100
75
FORECAST ADJUSTED SEASONAL VARIATIONS
50 ACTUAL SALES
25
12
16
SEASONAL ADJUSTMENTS:
T ACTUAL SALES y 20 30 50 70 SALES ESTIMATED 30.73 34.72 38.70 42.69 Y % t ACTUAL SALES 80 90 50 80 SALES ESTIMATED 70.59 74.57 78.55 82.52 Y 133.34 120.69 63.65 96.92
1 2 3 4
11 12 13 14
5
6 7 8 9 10
30
40 60 80 40 60
46.67
50.66 54.64 58.63 62.61 66.60
64.28
78.95 109.80 136.44 63.88 90.09
15
16 17 18 19 20
90
100
86.53
90.51 94.50 98.48 102.47 106.64
104.48
110.48
1 2 3 4
65.08 64.28 63.88 63.65 64.22% 4 86.40 78.95 90.09 96.92 88.09% 4 129.19 09.80 113.34 104.01 114.08% 4 163.97 136.44 120.69 110.48 132.89% 4