Apparel Manufacturing Firm

C: Can you tell me something about the client? What kind of apparels it manufactures? Where is it based out of ? And is the client only a manufacturer or are they present in retail as well through their own outlets ?

I: The client manufactures both casual wear and inner wear and offer multiple product categories within the same. They are based out of South Asia, namely India, Bangladesh and Sri Lanka. The client is just the manufacturer.

C: Okay, thank you. Can you also tell me why exactly does the client want to increase efficiency suddenly? Is it because it has been declining or is it because it is lower than our competitors ?

I: Client’s efficiency is lower than its competitors.

C: Okay. Lastly, what exactly do you mean by efficiency? How would you define it in terms of the apparel industry?

I: Good question. Efficiency is defined a bit differently with respect to apparel industry. The formula is Standard hours needed to produce the garments/ Total production hours. For example, if ideally a garment is produced in 0.5 hours and 10 garments are produced in 10 hours, then efficiency will be (10*0.5)/10=50%

C: Understood, thank you! I’d like to look at the value chain to identify where exactly the bottleneck lies and the reason for the same. And then I’ll come up with recommendations to increase efficiency.

I: Sounds fair. Go ahead.

C: Sure, thank you. So, in the value chain, I’d consider R&D, raw material procurement, inbound logistics, storage and warehousing, outbound logistics, processing, packaging and outbound logistics. Do you think there’s a particular stage where we are facing lower efficiency or shall I explore one by one ?

I: The processing stage is facing lower efficiency.

C: Okay, thank you. Before I proceed further, I’d like to know the steps involved in the processing stage.

I: Sure. So, there are 4 major steps involved in the processing stage: cutting, sewing, washing and finishing.

C: Okay. And can you also tell me the current efficiency of each of the steps?

I: Yes, it is 95%, 70%, 95% and 90% respectively.

C: Ok, sewing step has the least efficiency. But there could be a possibility that the overall lower efficiency is not because of it.

I: Why ?

C: Because there could be a case where effectively a less efficient process is producing more garments due to shorter standard hours. And assuming that the order of 4 steps has to be followed for each garment, the less efficient process may not be the bottleneck. Example: if two processes A and B have 50% and 100% efficiency respectively, but the standard hours for A is 0.5 and B is 1, then both will produce 10 garments per hour.

I: That is a great point. But for this case, sewing step is the bottleneck.

C: Okay, so I’d now analyze this step on three parameters where efficiency could be increased: labor, process and machines. Are the labor and machinery sufficient in number and performing upto the expected capacity? And are there any further steps involved within sewing? Is the overall process scheduled in an optimum manner.

I: Yes, there are 20 operations within sewing. Labor are working up to capacity but there could be an issue with distribution of labor. There’s issue with scheduling. For simplicity, assume 3 operations A,B and C and a required capacity of 150 garments/hour. Standard time per garment for A, B, C are 0.5 min, 1 min and 2 mins respectively. How many labor should be allotted.

C: A, B and C generates 120, 60 and 30 garments respectively in 1 hour. Therefore, to generate 150 per hour, 1.25, 2.5 and 5 people are needed theoretically. Practically 9 people would be needed: 5 for C and 4 for A & B. One laborer will need to shuffle between A & B. There would be an ideal time of 15 mins for one person. Approximately 3% time is being wasted which could be improved upon.

I: Great. What are your recommendations for this?

C: Since there are 20 operations, these 15 mins could be adjusted with the remaining 17 operations. Also, the distribution and scheduling could be done using a software so as to ensure the best possible schedule.