OPERATIONS STRATEGY OF

K.A.C Fashion Wear Ltd.

PREPARED BY:

• 1. Rushdia Ali Khan ID# 101 0314 530• 2. Faisal Zaman ID# 091 0611 030• 3. Zannatul Ferrous Ariba ID# 091 0209 030• 4. Syed Muhammad Nahiyan ID # 091 0319 030• 5. Shadman Habib Talukder ID # 092 0080 030• 6. Syeda Sabera Arefin ID# 091 0169 030

Introduction

Brief Company Overview: The K.A.C. Fashion Wear Ltd. Company is

essentially a manufacturer of branded clothes. Their main product is T-shirt. The company was founded by Mr. K. Alam

Chowdhury and it is still running by Him.

Location

Main industry is situated in Savar,

because in Savar they are getting -

Cheap labor costTransportWaterGASElectricity Other facilities

Products

T-shirtsPolo T-shirtsTrousersShortsTan tops &Full over

Seasonal Product:

Jackets, Trousers

Resources

K.A.C. Fashion buy their resources from : Bangladesh India China

Employees

Approximately, 3000 workers are working in this company.

Production Method

The K.A.C. Fashion Wear Ltd. applies the concepts of Mass production in their operations. Some obvious features of mass production have been found in their production:

a) High volumes of standardized goods.

b) Main focus on quality

c) Low skilled workers use Specialized machinery

d) Absence of variability

Production Process and Layout

A Batch processing system is used to make the clothes. There are some steps which is strictly followed by the workers.

Knitting Yarns for fabric Sewing threads Dice and Chemicals Labels Buttons and Zips Poly bags Cartoon Gum tapes

CUTTING AND DYEING PROCESS:

The fabric is first cut into

uniform plies and then

spread manually in

preparation for the cutting

process.

Next, garment forms—or

patterns (dyeing process)

—are laid out on top of the

spread, in a manually

cutting system.

Lastly, the fabric is cut to the shape of the garment forms using manually operated cutting equipment.

Sewing Process

Sewing Process:

Sewing machine operators receive the bundle of cut fabric

for the raw material preparation section, and repeatedly sew

the same portion of the garment, passing that completed

portion to the next operator.

For example, the first operator sews the collar to the body of

the garment and the next operator sew a sleeve to the body.

Quality assurance is performed at the end of the sewing line

to ensure that the garment has been properly assembled and

that no manufacturing defects exist.

Capacity Planning

This is very important to maintain the cash flow and making a reasonable profit. Too few or too many orders, or even the right number of orders but, lack of employees will hurt the profits.

Scheduling

Scheduling for machine’s routine maintenance. Time scheduling of employees and resource handlers.

Responsibilities of operations Managers

Planning Capacity Locations Products and services Make or buy Layout Projects scheduling

Controlling Inventory Quality Costs productivity

Organizing Degree of centralization Process selection

Staffing Hiring/laying off Use of overtime

Directing Incentive plans Issuance of work orders Job assignments

Assuring Quality

K.A.C. Fashion Wear Ltd. Produce quality based products. They provide their customers all kinds of quality assurance. In case of any defective bundles, they always try to replace it.

Spots are often marked with a sticker and taken to a

spot-cleaning area where the garment is cleaned using

steam, hot water, or chemical stain removers.

Some customers request that a garment be fully

laundered after it is sewn and assembled; therefore,

KAC have an on-site laundry operations.

Monthly Productivity

Multifactor productivity in 2010

= Output / ( Labour + Machine + Overhead )

= 10,00,000 / [ (1000000×.3) + ( 10,00,000×.2) + (10,00,000× .1)]

= 1.66 units/dollar input.

Factors affecting Productivity

• Need for technological improvement.• Increasing Scrap rates.• Dearth of workers serving the company for a

long period of time.• Labour turnover: 08%

»Voluntary turnover: 06.5%

Opting a Forecasting Technique

Judgmental Approach

Accuracy: It is important for

effective implementation of

the forecasting figures.

Cost: that may occur for the future operations for KAC

fashion wear Limited.

Availability of data: If data is not available then it becomes difficult for KAC fashion wear

Limited to carry out the required forecasting calculations.

Time: Stipulated time that is provided for carrying out the forecasting process.

Forecasting Technique of K.A.C Fashion Wear Limited

Judgmental forecasts

It is a qualitative technique which permits inclusion of soft information like human factors, personal opinions etc.

The company uses this forecasting technique to gather information on its demand, human resources sales and revenue.

There are two approaches of forecasting- “reactive” and “proactive”. As K.A.C fashion wear Limited is a B2B firm so it opts for the “reactive” approach.

The forecasting process

First the company selects the

purpose of the forecast.

Carry out the forecast.

Obtain, clean and analyze appropriate

data.

The Operation manager of

the company then selects a time horizon.

Finally monitor the

entire forecasting

process.

Judgmental forecasts

Consumer Surveys

Executive opinions

Sales force opinions

JUDGMENTAL FORECAST

Summarizing Forecasting Accuracy

Figures of FY 2010: Annual Sales: $18 million. Forecasted Sales: $16.5 million.

Figures of FY 2009: Annual Sales: $14.5 million. Forecasted Sales: $14.2 million.

Annual Sales Forecasted Sales

14.5 14.218 16.5

Chart Title

FY 2009 FY 2010

Mean Absolute Deviation

MAD = Ƹ| Actualt - Forecastt | / n

According to the figures mentioned,

Sum of error: (18-16.5)+(14.5-14.2) = 1.8

MAD = 1.8/2

= 0.9 (Ans.)

Mean Squared Error

MSE= Ƹ( Actualt – Forecastt )2/ (n-1)

According to the figures mentioned,

Sum of error2: (18-16.5) + (14.5-14.2) = 1.82

= 3.24

MSE = 3.24/(2-1)

= 3.24 (Ans.)

Mean Absolute Percentage Error

MAPE = {Ƹ(Actualt- Forecastt) /Actual} × 100 / n

According to the figures mentioned,

Sum of error: (18-16.5) + (14.5-14.2) = 1.8

Actual: 0.08333+

MAPE = {(1.5/18) × 100} + (0.3/14.2) × 100}

= 8.33% + 2.06%

= 0.39% / 2

= 5.18% (Ans.)

Control

The forecasts are made “semi-annually.” After tracking the error corrective measures are taken

immediately by the management of K.A.C fashion wear Limited.

A re-examination of forecasting is carried out in case of gross deviations between the forecasted and actual figures.

A control chart is used in order to locate the errors immediately.

PRODUCT DESIGN:

Phases used by the K.A.C. Fashion Wear Ltd. For product development:

Process Specification. Prototype Development.Design review.

Issues in Product Design:

Life Cycle- introduction, growth, maturity and decline.

Currently the life cycle of garments industry is in growth stage.

Issues in Product Design:

Standardization – the extent absence of product variation.

K.A.C Fashion Wear Ltd. follows MASS CUSTOMIZATION.

Issues in Product Design(Cont):

• Robust Design - design that results in products that can function over a broad range of conditions.

• K.A.C Fashion Wear Ltd. produces clothes that are applicable everywhere.

Issues in Product Design:

•Product Liability – a manufacturer is liable for any injuries or damages cause

by a faulty product.

K.A.C Fashion Wear Ltd. is liable for their products.

Rearrangement of work place:

Result in a greater efficiency

Can Similar activities be grouped?

Use of additional or improved equipment

Improvement Ideas among the workers

Emotions toward work

In terms of team?

• Short term team• Self Directed team

Workers Motivation Factors

• Appraisal• Compensation• Ideal Work environment• Socialization • Status

Specialization for Production

Design Work for K. A. C Fashion LTD

• Idea Sketching• Skill & Tool• Creativity • Customers Angle

Methods Analysis

• Flow Process Chart• Worker-Machine Chart

Motion Study

K. A. C. Fashion LTD follows the Motion Study Principles

• Use Of Human Body• Arrangement & Conditions of the Workplace• Design of Tools & Equipments

Working Conditions

• Temperature & Humidity• Ventilation• Noise & Vibrations• Work Breaks• Safety• Ethical Issues

Work Measurement

• Standard Time• Stopwatch Time Study

Work Sampling

Compensation

• Time-Based System• Output-Based System• Knowledge-Based Pay System

Competitive Advantage:

• Lower Cost• Lower price• Our Location • Our Extra Service• Exceptional Design• Fabrics Quality

Motivating employees

In all phases of operations. They use scientific management system and for that reason employees get one hour break after working for four hours. Basically in one hour, a single worker can prepare 10 t-shirts. When a worker becomes experienced in his field, the productivity rate increase. For extra pieces in one hour basis, they provide their customers rewards and 10% bonus for each extra piece.

Our Extra facilities To Customers:

Customers are able to order any special design to the company’s designers which they like. The company deliver the order to them within very short time. This is the service which is not available to their market competitors.

The company give discounts on special festivals to their regular customers.

Monitoring

Closely monitoring quality and customer satisfaction.

Agility or Reacting very quickly to correcting any problems.

Monitoring monthly sales and monthly expenses.

Capacity Planning

•Capacity : The upper limit or ceiling on the load that an operating unit can handle.

2 useful definitions of capacity.

•Design capacity: The maximum output rate or service capacity an operation, process, or facility is designed for.

# K.A.C. fashion currently produces 40,000 units per day. ( Design capacity)

•Effective capacity : Design capacity minus allowances such as personal time, maintenance and scrap.

# K.A.C. fashion’s effective capacity= 39,000 units per day

Capacity planning

• K.A.C. fashion needs more machinery to increase it’s output rate or capacity.

• There are already 30 machines in K.A.C. More 50 machines are needed to increase it’s output rate in maximum level.

• Machines are needed as soon as possible for the greater profit of K.A.C. fashion.

Facilities • The location of K.A.C. fashion house is nice. It is

located at SAVAR.

• It’s very near of the market. So that transportation cost is not very high.

• Labor supply is available in a very cheap rate.

• Environmental factors such as heating, lighting and ventilation are good enough for workers to perform effectively.

Product & Service factors

Product or service design can have a tremendous influence on capacity.

K.A.C. fashion’s items are not similar. There are varieties of items.

K.A.C. fashion follows basically Mass customization process.

Human factors

• Training & experience : To perform the job Training, skill & experience are required. K.A.C. fashion trains their workers to improve their skill.

• Motivation : Employee motivation has a very basic relationship to capacity, as do absenteeism & turnover.

• Compensation : The compensation of workers are the keys for K.A.C. for motivating their workers to perform well.

SWOT ANALYSIS

• Strengths

• Raw materials are available locally

• Infrastructure is available

• Location (near to the market)

• Excess install capacity

• Cheap Labor

SWOT ANALYSIS

• Weaknesses

• Four times less productivity by use of local made old technology

• Non conformity of standard

• Semi skilled labor

• No technical training institute for Ginning Industry

• High rate of contamination

• Lack of online market facility to access international buyers

• Opportunities

• Introduction of latest modern ginning technology being used in developed countries

• Export of cotton to other countries

• Possibilities to achieve premium for best quality that government had

• Access to international markets through online market

• Ginning Training Institute

SWOT ANALYSIS

SWOT ANALYSIS

•  Threats:

• Government regulations (lot of taxes on the industry)

• Fluctuation in international market price

• Global Competition

• Pest diseases on cotton crop result in low production of cotton lint

• Import of cotton

Recommendations

• Introduction of state-of the art technology to enhance productivity.

• Renovated pay scale for workers in order to decrease worker turnover ratio.

• Usage of forecasting technique taking into account the need of the hour.

• Revamped product design: should also follow “Delayed Differentiation” process.

Conclusion

• We think K.A.C. fashion is on the right track . But If they follow our suggestions regarding operations management whatever we discussed here, they are going to maximize their profit in near future for sure.

Thank You