Supply Chain management

Major assignment

Bachelor of Applied Science (Textile Technology)-2012/2013Lasitha Nawarathna

01. Define & Discuss the value chain of your organization

Selected organization: - Brandix

Brandix:- the Brandix group has pioneered the concept of holistic apparel solutions from a

unique, customer- centric standpoint since its inception in the year 2002. Its unconventional

approach to a conventional sector has propelled Brandix to the forefront of the industry as the

single largest apparel exporter in Sri Lanka with a turnover of US $ 600 Mn. The public limited

company’s fast expanding network of factories and offices span across the south Asian sub-

continent.

The first company in Sri Lanka’s apparel sector to pioneer the concept of ‘total solutions’,

Brandix is now considered a preferred solutions provider to some of the world’s leading apparel

brands situated in the UK, US and parts of Europe. The group specialized In manufacturing

casual bottom , intimate apparel, underwear, lounge and sleepwear, bras, woven and knitted

fabric and host of apparel industry accessories.

A backward and forward integrated operations, the company manufactures its own fabric,

buttons treads and hangers, lending it a tactical edge in the apparel sector

Our group-wide initiatives to achieve manufacturing and supply chain excellence, close

collaboration with our suppliers, and sales offices at the customer's doorstep all guarantee fast

and flexible solutions from the source to your stores.

This core strength future reinforces our advance researches and development, outstanding

design, fabric printing, washing, dyeing, wet processing, finishing and relentless quality control

services with fastest turnaround time. Embedding and integrating these services into seamless

verticality is the value chain we offer our customers

The key value additions we offers are

Speed and flexibility

Right cost

Convenience

Assurance

Innovations

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What is Value chain:-

A model that considers how supply chain activities can add value to products and services to be

delivered to the customer

A strategic business analysis tool used for the seamless integration and collaboration of value

chain components and resources. Value chain management focuses on minimizing resources and

accessing value at each chain level, resulting in optimal process integration, decreased

inventories, better products and enhanced customer satisfaction.

Porter’s value chain consists of a “set of activities that are performed to design, produce and

market, deliver and support its product”. Porter distinguishes between

primary activities: inbound logistics, operations, outbound logistics, marketing and sales,

service in the core value chain creating directly value

support activities: procurement, technology development, human resource management,

firm infrastructure supporting the value creation in the core value chain

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Discussion of value chain in Brandix

When considering present value chain activities of Brandix six distinct value-adding activities

can be identified

R&D: This value-adding function includes Brandix that engage in R&D, as well as activities

related to improving the physical product or process and market and consumer research. Still

brandix has low involvement in this stage.

Design: This stage includes Brandix that offer aesthetic design services for products and

components throughout the value chain. Actually Brandix has buyer wise product development

team. Design and style activities are used to attract attention, improve product performance, cut

production costs, and give the product a strong competitive advantage in the target market. Still

brandix has low involvement in this stage.

Inbound:

This stage refers to the inbound processes involved in purchasing and transporting textile

products. Raw material such as Fabric, buttons, zippers, labels, cartons, polybags, hangers,

sewing threads are commonly used to manufacture and finish a garment and components such as

parts of the sewing machines, furnace oil, water and electricity supply are indirectly support to

the production Most of time Brandix can’t produce all raw materials under one roof. It includes

physically transporting products, as well as managing or providing technology and equipment for

supply chain coordination. Logistics can involve domestic or overseas coordination. In Brandix

has anther additional group called Brandix logistic to control and advice for unbound logistic

activities

Most of the raw materials are sourced from within the group raw materials suppliers. Sometime

Brandix sourced raw materials from India, Pakistan, Hong Kong and China. All the foreign raw

materials merchandize as a FOB orders.

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Figure 1

Operations

Production/Assembly/Cut, Make, Trim: Brandix cuts and sews woven or knitted fabric or

knit apparel directly from yarn. The group specialized in manufacturing casual bottom, intimate

apparel, underwear, lounge and sleepwear, bras, woven and knitted fabric and host of apparel

industry accessories.

Each plant has their own fabric and trims store, cutting department, technical department, sewing

floor and ironing and packing department. Productions starts after doing the pilot run and it helps

to minimize measurements and other quality related issues. The cut-and-sew classification

includes a diverse range of establishments making full lines of ready-to-wear and custom

apparel. Sometime Brandix performing cutting or sewing operations on materials owned by

others.

For the manufacturing brandix has been using lean manufacturing and modular systems. Brandix

can purchase textiles from another establishment or make the textile components in-house. All

Brandix apparel manufacturing plants going under higher efficiency its help to reduce production

lead time.

Outbound

Brandix after apparel is manufactured, Brandix has one warehouse in every manufacturing

plants. Sometime Brandix responsible for value-adding activities outside of production. Like do

some packing activates in warehouses. Most of time brandix do free on board orders that time

have to responsible for outbound logistics activates also.

Internal logistic activates and Shipping is done by third party logistic supplier and there is a

separate supplier to deliver the containers to the ports and to handle documentation work.

Bradix has additional group for monitor all logistic activities.

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Sales and Marketing

Brandix has marketing departments in New York, London and Hong Kong. In Sri Lanka brandix

buyer wise brandix has marketing teams. This function includes all activities and companies

associated with pricing, selling, and distributing a product, including activities such as branding

or advertising.

Services

This includes any type of activity a firm or industry provides to its suppliers, Buyers, or

employees, typically as a way to distinguish itself from competitors in the market. Also

defectives are found by them in the final inspection as well as their auditing point before send to

retailers. We have to replace the shortages to avoid dissatisfaction. Further to that we are claimed

discounts for poor quality products.

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02) Define & discuss the supply chain related to your organization

What is supply chain management?

According to the Council of Supply Chain Management Professionals (CSCMP), SCM can be

defined as encompassing “the planning and management of all activities involved in sourcing

and procurement, conversion, and all logistics management activities … It also includes

coordination and collaboration with channel partners, who can be suppliers, intermediaries, third-

party service providers and customers. In essence, supply chain management integrates supply

and demand management within and across companies.”

We can define supply chain management like this also Supply chain management is a set of

approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so

that merchandise is produced and distributed at the right quantities, to the right locations, and at

the right time, in order to minimize system wide costs while satisfying service level

requirements.

How supply chain management related to Brandix

Managing the production of the company's good and services, monitoring, storage, inventories,

coordinating with suppliers and ensuring timely distribution of goods are some of the key

functions covered by supply chain management (SCM). When consider Brandix the supply chain

is actually made up of five important components of plan, source, make, and deliver, return. It

also includes three flows which are cash, product and information within the chain. .Through

these components and members, the Brandix management of the supply chain allows efficient

inventory control. As a dynamic process, the SCM requires the continuous exchange of

information, finance and materials between and within the members of the chain. These elements

of the SCM also make this business aspect challenging to implement and maintain.

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The Brandix is one of company those who have been applying this strategy.. In Sri Lanka, the

apparel industry is one of its important and highly contributory economic sectors, hence, various

local apparel manufacturers and businesses are employing different innovations so as to operate

successfully,

Brandix supply chain network

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Fabric /Accessories

Trading Companies

Overseas BuyingOffices

Brand-NamedApparelCompanies

AccessoriesButtons/hangers/treads (A & E/ T & S )

Garment manufacturing

(R&D / cutting/ sewing/ packing)

BCW/BEL/BIA/BLI

Dyeing and finishing

BTL/queanBy/

Fabric (Weaving/ knitting)Ocean lanka/ TJ

Yarn (cotton/nylon/polyester)

Importing network

Exporting network

Garment Manufacturing

Raw material Manufacturing

Logistic and Transport operations

Logistic and Transport operations

C

U

S

T

O

M

E

R

Figure 2- supply chain network Brandix

BTL/queanBy/ Ocean lanka/ TJ /A & E/ T & S :- Brandix own raw materials manufactures

BCW/BEL/BIA/BLI :- Brandix own garment manufactures

Brandix Supply Chain Management Functions

Transport management system

Transportation involves many different parties within and outside a company who are required to

routinely share information and ideas. Specially involves some foreign countries also. Brandix

use fully functional transportation management system should provide the basic components of a

shared information system to support: 

Content such as rates, routes, roles, and contracts at inter-enterprise generic levels

Commerce to support and create transaction sets, documents, and information exchanged

to facilitate the booking, execution,

The data model and data dictionary of the TMS should thus support a wide and diverse range of

interactions. The combination of these robust system infrastructures and collaborative

applications should enable the user to perform all necessary functions involved in the planning,

execution, and analysis of transportation movements.

Operations –manufacturing

Manufacturer bears the responsibility over the production of items according to the requested quality

and the shipment of the right quantity to the right place on the right time. A lot of value addition is

there for the items produced since sourcing is done locally unless it is an exceptional case; this is

quite rare in the Sri Lankan apparel industry. The company focuses greatly on the control of its

operations and the quality. This is the consequence of vertical integration and company seeks highest

quality at every stage of production. Operations lead time depend on buyer requirement. Now our

lead time depend on 90 days to 10 days. Brandix has falsities to complete all manufactures process

within 10 days also.

Supplier Relationship Management

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Brandix supplier Relationship Management is a relatively new way of categorizing software–

born out of the concept that you have customer relationship management systems for managing

customer-facing processes, enterprise resource planning (ERP) systems for internal processes

and SRM for both supplier-facing processes and managing the supply base. Actually now

Brandix use Fast React software to there , enterprise resource planning (ERP ).The heart of SRM

is sourcing and procurement, which differ from their internally-focused ERP counterparts

primarily in that the SRM modules have a much greater emphasis on integrating and connecting

with the suppliers. SRM also includes interactions with the supply base throughout the full

lifecycle of processes from design through to fulfillment, manufacturing, and settlement. 

Warehouse management system

Brandix warehouse management system (WMS) provides database and user-level tools in order

for a company to optimize its storage facilities while at the same time providing user level task

direction and activity support. The combination of system-directed operations, supported by real-

time, paper-less, and interactive information systems will provide warehouse management and

personnel with the tools to direct, control, measure, and report on distribution operations.

Demand management systems

Today Brandix has moved beyond the narrow concept of statistical forecasting to encompass

both global and cross enterprise trading partner processes. In addition, the real-time nature of

today’s business requires that rapid feedback from markets and adjustments to demand

assumptions are propagated through the supply chain to improve delivery and cost performance.

Demand management means identifying and creating demand (marketing, merchandising, and

promoting), modeling (forecasting, pricing, and life cycle planning), and collaborating

(communicate, simulate, and create consensus) with the network of trading partners. It also

means evaluating results and creating learning cycles where the market, including geographic,

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demographic, and economic assumptions are evaluated and improved upon to constantly

improve the performance of the chain.

03) Identify the value chain & supply chain management challenges, issues and presently

given solutions

Challengers and issues

Shrinking lead times

Brandix identified rapidly shrinking lead times as one of the biggest challenges for the apparel

industry. The growing demand for ‘instant gratification’ by trend-driven consumers could result

in manufacturers being given hours rather than days to deliver new designs within the next 18 to

24 months.

Increasing no of style changers

With is short time of period styles and designs are changing. When come new style for

manufacturing plant they take some learning curve to come high efficacy level. Because this

situations operations side can’t do manufacturing products in high efficacy.

Not enough capacity for own raw material suppliers

Brandix own raw material producers can’t supply total garment manufacturing capacity of

brandix. That time brandix has to import raw materials form foreign suppliers. It manly effect to

our value chain. As an example if import yarn and our factory produce fabric mean can add some

ting to our value chain. In this fabric mils low capacity problem we had to export fabric from our

suppliers it effect to our value chain.

Poor flow of information

Poor flow of information in both forward and backward in the supply chain. Our customers’

requirements, information and specifications may not pass to manufacturer/ suppliers and quality

issues of the raw materials also not been informed to suppliers. Sometime above details not pass

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within group suppliers also. So, suppliers are able to send anything they produce as they do not

get any feedback.

Demand forecasting problems

Poor demand forecasting. There is an issue in production planning and as result delivery are not

met on time. Some raw materials such as packing trims are not in housed on time and unfinished

goods are remaining at packing.

Logistics problems

Brandix has large number of logistics problems. Internal and external logistic problems

increasing now day by day. Logistic and transportations problems effect to the on time delivery.

Lack communications, non-skill human resources, dealing with lot of logistic companies those

are the main reasons for logistic problems.

Inventory management problems

Poor inventory management. Raw materials such as interlining, has to maintain minimum stock

as they widely used. Sometimes they are not available and it affects to production. WIP in

embellishment division is higher and as a result garment finishing cannot be done as scheduled

Presently given solutions

Introducing new inventories management systems

Now Brandix has been implementing just in time inventory management system. Now this

concept implementing all group raw materials manufacturing companies and garment

manufacturing companies. Its help to reduce upcoming poor inventory management problems.

Implementing lean manufacturing for manufacturing

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Using lean tools Brandix hope to reduce cost and increase productions efficiencies

Cost reducing

Brandix management reduced the cost of the organization and there is higher level of cost

savings. Such as the duplication work, transport, delivery, cost that is been involved.

Furthermore, it brings about efficiency to the organization, and also quick responding to the

consumer demands

Find new raw materials suppliers and increase productivity of own raw materials

producing factories

This splitting-up of once vertically aligned organizations into many independently working

apparel companies, brandix having a separate operation but in raw material capacities not

enough. Now brandix invest another fabric manufacturing companies and increase value of them

value chain. Makes efficient coordination among them a must to sustain increased competition.

Also large, vertically oriented organizations, which still exist, need to coordinate their entire

supply in light of growing inter-unit competition for productivity, often disregarding market

priority. This stimulates apparel organizations to manage their various activities under a new

paradigm, supply chain management

Brandix has set up vertically integrate city (Brandix apparel city)

Brandix India Apparel City (BIAC) is a revolutionary development in the apparel industry; a

unique, integrated apparel supply chain city, managed by Brandix Lanka Ltd. Spread over 1000

acres in the port city of Visakhapatnam (or Vizag for short) in the eastern state of Andhra

Pradesh, it brings alive an avant garde 'Fibre to Store' concept. BIAC will bring together world

class apparel chain partners from the design table to consumer brands in flawless integration.

The dynamics of the apparel market demands the key value propositions of speed to market, least

cost, flexibility & assurance of compliance. BIAC is built on this premise. Its smooth flowing

verticality will ensure minimum lead times, the most critical competitive factor.

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04) Based on the knowledge gain during this program describe your own views and

recommendations to future improve the value chain and the supply chain of your own

organization

Own Recommendations to future improve the value chain and the supply

chain

Use highly accurate forecasting methods using technology

Highly accurate forecasting algorithms and dynamic time-phased replenishment plans for apparel

supply chain management, apparel marketers can reduce inventory, improve service levels

All ready Brandix use Enterprises resource planning system for forecasting. My suggestion is

after do research, Analyze sales history and forecasts in units, revenues, margin, or any other unit

of measure after that develop own highly accurate forecasting method for forecasting.

Increases involvement for highly value added stages

When consider value chain focus high value added stages. Actually when considering Brandix

value chain it start R & D, design, purchasing, production distributing, marketing and service.

But think about Brandix value chain, Percentages of involvement for each stages Brandix has

low involvement for highly value added stages. As a figure 2 mention apparel value chain highly

value added things are R&D, Design and after service. If Brandix can increases involvement for

R & D and design stages can add high value for our value chain. Its help to increases profitability

also apparel business.

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Start own logistic company

Present Brandix in bound and out bound all logistics services have been out sourcing. Because

this situations facing lot of problems. If Brandix start own logistic company can reduce several

logistic problems and save money. When we think about world success business like

WALMART, they have own logistic company and it help to meet there requirement and goals.

Build up new supplier performance evaluation system

Need to have proper supplier performance evaluation procedure to identify best and reject others

Need to build up good relationship with suppliers and customers

This reality is increasingly inaccurate as companies facilitate their return item processes and

customer feedback through their network. As a result, the consumer experience is improved as

retailers combine their e-commerce operations with those of their stores.

Have to do Continuous improvement

This notion is believably the most complex to exploit because of the large number of

stakeholders involved in the garment industry. However, this principle is applied by world-class

manufacturing

In the context of this fascinating industry, a series of articles will be released in the coming

months on various aspects of the supply chain. Through these columns, we wish to give you food

for thought, bestow possible solutions to your industry’s difficulties and potentially arouse

questioning about your supply chain operations with business partners.

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Figure 3 : Source: Frederick, 2010.