DM(final report on resham textile industries)

8/14/2019 DM(final report on resham textile industries)

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1SUPPLY CHAIN MANIGMENT

ContentsCompany Introduction................................................................................................2

Products..................................................................................................................2

Process View (Push & Pull)......................................................................................2

Inventory.................................................................................................................3

Safety Stock............................................................................................................3

Supply-to-stock/Supply-to-order..............................................................................3

Six Drivers...............................................................................................................3

Raw Material...........................................................................................................5

Purchasing...............................................................................................................5

Raw Material to Finished Product to End Consumer................................................6

Suppliers.................................................................................................................7

Scope of Strategic Fit..............................................................................................7

Distribution..............................................................................................................8

Sale Outs.................................................................................................................8

Relationship with Supplier.......................................................................................8

Who decides the Price.............................................................................................8

Capabilities..............................................................................................................8

Production Explanation...........................................................................................9Logistics Strategy....................................................................................................9

Efficient or Responsive and also Compare............................................................10

Location Strategy..................................................................................................10

COTTON MAP OF PAKISTAN...................................................................................11

Forecasting Methods.............................................................................................12

Aggregate Strategies............................................................................................12

Order Processing cycle..........................................................................................13

Order Processing


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Company Introduction

RESHAM TEXTILE INDUSTRY was established in 1995 by five brothers

Ch.Rehman Buksh ,Ch Muhammad Kursheed ,Ch.Muhammad Rasheed ,

Muhammad Ilyas and Ch Muhammad Arshad Saeed to upgrade the current

facility of their ginning MILL to yarn capacity as the group is known as(Siddique Brothers)in the ginning sector their ginning mill was up and running

since 1978 so the brothers decided to upgrade the facility by buying yarn unit

from China and keeping in view the major crops of cotton in the district of

Vehari and other surrounding areas. This decision by the brothers proved to be

a very successful venture for the company and the surrounding areas.

Products

The major products of Resham textile mills are:1. Cotton yarn2. Oil cakes

3. Edible oil

4. Cotton waste

Process View (Push & Pull)

A supply chain is a sequence of processes and flows that take place within and

between different stages and combined to fill a customer need for a product.

In Resham textile mill we use cyclic view, since the final product is the raw

material for other waiving industries. Push strategy is used by the management

of the Resham textile industries.


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Inventory

Since the cotton crop comes once a year so the inventory used by the Resham

textile industries is the seasonal inventory

Safety StockResham textile industry maintains the safety stock of 500 bales of cotton

Supply-to-stock/Supply-to-order

Resham textile industry use supply to stock strategy due to the nature of product

Six Drivers

For any company to achieve its strategic fit there are six drivers to improve the

supply chain performance they are:1. Facility

2. Inventory

3. Pricing

4. sourcing

5. Transportation

6. Information

Facility:

The physical location for Resham textile mills is ideal for any textile industry

because of its availability of raw material in District Vehari and other cotton

producing areas. Other one is the storage facility that is within the mill.

Inventory:

There are two types of inventory used by the Resham textile mills:

1. Raw material inventory

2. Finished goods inventory


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Raw material inventory is maintained during the cotton season, when the cotton

season is purchased by the farmers for processing. It is used by the ginning

plant of the mill.

Finished goods inventory is composed of cotton yarns where the company

stores them in the ware houses as their final product.

Pricing:

Company does not have any control over the pricing of the product because of

the Government regulations. Every textile industry in Pakistan has to sell

products on Government determined rates.

Sourcing:

It is the choice who will perform the particular activity such as production,storage, transportation.

Transportation:

It is the only driver that has been outsourced by the management of Resham

textile mills.

Raw Material

Raw material used is the cotton crops

Purchasing

Purchasing in the textile Mill is done by

Through agents

Direct buying form farmers


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Raw Material to Finished Product to End Consumer

Fig shows the clear link between the raw materials to finishedgoods and the end consumer.


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Suppliers

In country like Pakistan there are not much big name suppliersfor the product because of local availability but there are

brokers in the market and many textile firms buy their products

straight from the farms.


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The suppliers are the cotton market of vehari and near

by farms

Scope of Strategic Fit

The scope used in the company is the intercompany and interfunctional because of the nature of the business and the

organizational ownership.

DistributionDistribution network of the firm is out sourced through local

transport company.


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Sale Outs

There are no sales outlet as the final product of the firm is used

by other business .the B2B sales are done.

Relationship with SupplierFor any company the relationship with the supplier is very

important as the company tries to have good relationship with

the farmers for that the company have established good

payments methods for the farmers their amount is given to

them through check within 24 Hrs and other incentives like

seeds, cotton bags are given to them so they grow more and

more crop.

Who decides the Price

In the country like Pakistan where the government decides the

price through textile ACT 1994 no textile firm is allowed to buy

the products from the farmers below that rate. Mostly

Government is responsible of the price.

Capabilities

Resham textile mills have the flowing capabilities

ISO 14000 certified

In house powerhouse

In house warehouse

2000 bale per day consumption plant (only one unit is

working)

Production Explanation


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The raw cotton is purchased from the farm and market then it

is weighted and then it become the property of the company

the supplier get its cheque form the office and then with the

help of huge suction machines the cotton is sucked and

brought to the plant where it pass through saw machine whichseparate three things

Cotton wool

Cotton seed

Cotton waste

Cotton wool is sucked trough vacuum and seed fell below and

waste is thrown in the junk pile .cotton wool is collected in a

hydraulic press and compressed to form a cotton bale and thensent to warehouse. Whereas the seeds are spread under sun light

to remove the moisture and then sent to oil department for

crushing and then the residue in the form of oil cake is collected

and stored in separate warehouses.

Logistics Strategy

Since Pakistan is a developing country and there are not many

major international players in the textile sector of Pakistanmajority of the companies dont have logistics strategy which is

defined. We have seen that the most firms use the cost factor

in their any operations due to the nature of the product the

simple rule is used Buyer own Carriagethat means that the

any company who wanted to purchase any product like cotton

yarn, cotton cake, cotton seed oil must have to pay the logistic

cost by that means the firm save a huge amount of cash on out

bound logistic operations.

Not only Reasham Textile Mill uses this policy but generally it is

being used by all the textile mills in the region.


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Efficient or Responsive and also Compare

The nature of product being produced does not support

responsiveness therefore efficient supply channel is followed as

inventories are used to achieve good economies by allowing

economical production runs, purchasing in large quantities,

batch order processing and transporting in large shipment

sizes. Where as in responsiveness excess capacity, quick

change over, short lead times, flexible processing, premium

transportation and single order processing are being followed.

Location Strategy

The company chose to establish its plant in Vehari because of

the availability of the cotton crop in the nearby farms.

COTTON MAP OF PAKISTAN


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Forecasting MethodsForecasting method are classified according to following four type

1. Qualitative


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2. Time series

3. Causal

4. Stimulation

Resham Textile mills is implementing the time series method of the demandforecasting. Time series forecasting method use the historical demand to make aforecast. They are based on the assumption that past demand history is a goodindicator of Future demand. Since the cotton crop is a major contributor of thecountrys economy and most of the farmers of interior Sindh and South Punjabgrow cotton as it is a most profitable crop of the county so many textile mills andthe Government itself use time series method of forecasting the future demand.

Time series method is used for the seasonal products for that we use static method

which assume that estimate of level; trend and seasonality within the systematiccomponent do not vary as new demand is observed.

Systematic component = (Level + Trend) X (Seasonality)

Aggregate Strategies

There are three major strategies which are mostly implemented by theorganizations are as follows:

Chase strategy using capacity as the lever

Time flexibility from workforce or capacity strategy

Level strategy using inventory as the lever

Resham Textile Mill use Chase strategy- using capacity as the lever it resultsin low level of inventory in the supply chain and high level of change incapacity and workforce. It is used due to the very high cost of carryinginventory and low cost to change level of machine and labour capacity.

Order Processing


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The figure clearly shows the order processing cycle it consist of the following

steps.

Order Requesting

Data Entry

Order Filling And Delivery

Order Received And Feedback

Order requesting


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In context of the Resham textile mills most of the order is received via Phone to

the companys office regarding which product is to be bought and how much

quantity is required by the buyer. Mostly the brokers visit and processing plant and

they collect the samples and then place the order.

Data Entry

Mostly the order is given by the phone and then the office clerk enters the data on

registers. All the orders of the day are recorded on paper and then after it is

recorded on the computer .to maintain the data of the orders. It include

1. Stock checking

2. Accuracy checking

3. Credit checking

4. Back order /order cancelling5. Transcription

6. Billing

Order filling and delivery

Once the order voucher is dispatched from the office the office clerk prepared the

required paper work and called the local transport company for the delivery truck

.the office clerk creates the bilty and other important documents. On the arrival of

the truck the store manager receives the order and start the supervising the loading

process .and then dispatched the shipment to its desired location. Following

important process are the part of the order filling and delivery process.

1. Product retrieval, production ,or purchase

2. Packing for shipment

3. Scheduling for delivery

4. Shipment document preparation

Most of the time in the textile sector of Pakistan there is no concept of product

retrieval as the customers collect samples and then place orders according to theirdesires.


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Order Received and Feedback

The final step in the order processing cycle is the order received and feedback .we

can say that the its a very important step in the cycle as it involves the customers

.in context of the textile mills we can say that the CRM process comes in this step

of the order processing cycle and the it include the following

1. Tracing and tracking

2. Communicating with customer on order status.

These tools help the customer to have the best relationship with the customer.

DM(final report on resham textile industries)

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