Benchmarking inGS
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Rahul ChoudhuryBenchmarking inGS
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Rahul ChoudhuryBenchmarking Study In Garment Sector
September 2007
NATIONAL PRODUCTIVITY ORGANIZATION (NPO)
Ministry of Industries, Production & Special Initiatives Government of Pakistan
2007 by National Productivity Organization Ministry of Industries, Production & Special Initiatives Government of Pakistan All rights reserved
No part of the work covered by the copy rights here on may be reproduced or used any form or by any means graphic, electronic or mechanical including photocopy, recording, taping or information storage and retrieval system without written permission from National Productivity Organization.
INTERNATIONAL EXPERTS COMMENTS
We have dedicated a considerable amount of time to the analytical appreciation of your report and found it Articulate, Competent, Well Structured and Open Minded.
Eugene Chinal Chinal Management Services United Kingdom www.chinal.co.uk
We have one simple comment to make about your report - FANTASTIC. It is thorough, precise, and far reaching. I was extremely impressed with the quality of your report. You are extremely professional.
David T Parkes. Dyehouse Solution International United Kingdom
www.dyehouse.com
The work you have completed is very comprehensive and you are to be complimented on the very thorough and detailed findings, conclusions and recommendations listed from page 63 onwards. Your recommendations are similar to Gherzi's experience in working with some Pakistan companies and with many companies in the competing countries in Asia and elsewhere in the world. NPO's identified issues facing the Pakistan companies are similar to the issues facing companies in the competing countries but with a significant difference. You speak of management problems and identify the need for stronger middle management to be realized through improved training. You are, of course correct. Gherzi would be pleased to work with NPO in helping companies move forward. NPO is in a position to assist companies to take the necessary steps; we hope so and should be pleased to work with you to help the industry progress.
Keith Stuart-Smith Gherzis International Switzerland www.gherzi.com
CONTENTS
1. Acknowledgement ... 2. Introduction 3. Overview and Background of the Study .... 3.1 3.2 3.3 3.4 4. Objectives & Scope of the study 5. Benchmarking Analysis 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 36 36 5.9.1 5.9.2 5.10 6. Findings, Recommendations & Conclusion 6.1 6.2 Improvement and Cost Reduction . 6.3 6.4 7. Benefits of Improved Productivity 8. Abbreviations 9. Annexure . 78 .... 77 ..... 76 Conclusion ....... 75 Facilitation and Support by NPO . 73 63 Recommended Implementation Plan for Quality & Process Good Practices/Recommendations for Improvement 56 . 54 SWOT Analysis ... 50 Good Practices.. 48 Poor Practices Pictorial Snapshot . General Observations in Dyeing/Finishing, Knitting & Laundry 35 General Observations in Sewing & Maintenance 29 Benchmarking across factories . 24 Benchmarking Scores ..... 20 Characteristics of Quartile .. 17 Quartile of Benchmarking .. 16 Benchmark Rating ... 15 Benchmarking Parameters .. 14 ... 13 .. 12 Labour Costs & Symptoms of Low Productivity in Asia 10 Typical causes of high Labor Cost in Pakistan .. 8 Background of the study ... 7 Textile Overview (Asia & Worldwide comparisons) 3 3 ... 2
a) Detailed Data Information Reports Sewing, Industrial Engineering & Maintenance
Dyeing/Finishing, Knitting & Laundry
b) International Benchmarks
DISCLAIMER:
This report do not necessarily reflect the views of National Productivity Organization as it is based on the data collected / snapshot taken during the months of February March 2007 and the information provided by the company / section representatives. There may be variation in the data if collected in different time period.
Benchmarking Study in the Garment Sector
ACKNOWLEDGEMENT
The Benchmarking Study in the Garment Sector was undertaken by the National Productivity Organization (NPO), Ministry of Industries, Production & Special Initiative, Government of Pakistan in close cooperation with the selected beneficiaries and NPO experts.
The NPO would like to express its sincerest gratitude for their cooperation, assistance and contribution in successfully executing this study. NPO would like to extend its special gratitude to the NPO technical experts who assisted and provided guidance in completing this assignment. However, the great appreciation to the whole team of NPO comprised of
Benchmarking Advisors:
NPO Technical Experts:
Best Practice Officers:
Mr. Hasan Haider Syed Salman Masood Mr. Asela Gamage Mr. Muhammad Kashif Afzal Mr. Ali Hur Mr. Sajeel Siddique Mr. Aftab Khan Masood Mr. Muhammad Awais Ansari Mr. Muhammad Ubaid Usmani Mr. Abdul Qayoom Mr. Anwar-ul-Haq Anwar
Project Facilitator:
And last but not the least, the NPO team is indebted to the Chief of National Productivity Organization, Mr. Tariq Bajwa, whose personal interest, commitment and interminable support and able guidance encouraged the team to complete this assignment despite of inherent hindrances.
The contributions and incessant efforts of all the stakeholders are priceless.
Copyright National Productivity Organization
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Report on Benchmarking in the Garment Sector
INTRODUCTION
This is the Final Report on the Benchmarking Study of the leading garment industries of Pakistan.
Benchmarking, a new concept of knowledge sharing, refers to a continuous learning process, which encourages improving ones own performance by learning from best practices of other enterprises in the similar industry. In Pakistan, National Productivity Organization has been the pioneer to introduce this concept.
Assigned and agreed Technical fields/functions were Dyeing/Finishing, Knitting, Sewing, Laundering, Industrial Engineering, Printing and Maintenance. The field surveys (through questionnaires, physical data collection & interviews) under this study were conducted by NPO Technical Experts along with Best Practice Officers (BPOs) from February-March 2007.
Subsequent to the field surveys, research and analysis was undertaken at NPO Secretariat, Islamabad under the assistance and guidance of NPO Experts. The final report was prepared by the Benchmarking Division on the basis of the data and benchmarking scores provided by the other team members. The Project Facilitator provided all the facilitation and coordination to perform the work smoothly.
Copyright National Productivity Organization
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TEXTILE INDUSTRY IN ASIA
(Trade Overview: Asian Supplier Focus)
Demand for outerwear in the market will continue to increase slightly in the coming years. The number of garments purchased per head of the population will continue to rise, but prices will not follow the growth rate.
Imports from developing countries have increased considerably in volume but against much lower prices.
The comparative data below shows some estimates of the size and scope of the apparel markets of eight of the major apparel-producing countries in Asia. (As per the Apparel Magazine 2007)
Country
Population million
No. of Apparel Factories (Estimate)
Total Employed in Apparel (Estimate million)
Total Apparel Exports (US$ Billions)
Apparel Sectors of Total Exports %
Bangladesh
137
4,000
1.90
5.7
75
China
1,317
38,970
4.60
61.0
10
India
1,027
60,000
4.00
6.0
Indonesia
224
2,368
0.377
4.3
Pakistan
167
5,000
0.70
2.7
22
Sri Lanka
19
830
0.35
2.6
46
Thailand
67
2,672
0.85
3.4
Vietnam
85
1,050
2.00
4.3
13
(*Note: Until recently Indias apparel industry was reserved by the government as a smallscale sector.)
Copyright National Productivity Organization
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WORLD TEXTILE & APPAREL TRADE
(Source: Werner International)
800 BN$
900 800 700 600 500 400 300 200 100 0
375 BN$
BN US$
0 2 4 6 8 0 2 4 6 8 0 2 4 6 8 0 2 4 98 1 98 1 98 1 98 1 98 1 99 1 99 1 99 1 99 1 99 2 00 2 00 2 00 2 00 2 00 2 01 2 01 2 01 1
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Worldwide Textile & Clothing exports in 2004:
(300 billion USD) (Source: Werner International)
2007 projection: over 45%
80,000
26%
72320
70,000
60,000
50,000
40,000
30,000
6,8%
5% 20,000 1377 4% 109 10,000 3,1% 1665 2519 1980 Czec German Ital Republi Franc 13943 11304 8536 3424 954 USA Braz il 5% 18470 4,1%
0
Chin Indi Pakista Centr Asi Turke Polan Spai
Copyright National Productivity Organization
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USA Imports of Textile & Apparel (Jan 2005 VS Jan 2004)
(Source: Werner International)
The WTO Effect
VALUE in millions of dollars
% CHANGE from January 2004
China
1150 524 327 243
225
29,38%
Mexico India
-3,80% 10,52% -2,84%
Canada
Indonesia
0,69% 12,42% -12,62% 2,10% 17,96% -11,96% 6,98%
Thailand South Korea
196 192 179 174 158 $6,886
Pakistan
Honduras
Taiwan
World
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BACKGROUND OF THE STUDY
With the dawn of the new millennium, Pakistan like all developing countries is facing a major challenge of a free and borderless, global market. Not only does it need to improve the range and quality of its products, innovation and creativity are equally imperative to consider becoming competitive in the world arena. Value addition has therefore become the buzzword of economic policies and agendas.
Textile is one of the main industries in Pakistan. It is the most important sector of the economy whereby it imparts 46% share in total manufacturing. It contributes about 66% of the total exports and 38% in the value added production by manufacturing sector. Garment manufacturing is one of the major and growing subsector within the textile value chain. This sector consumes the major workforce of the textile industry and contributes towards high growth rate in exports. Today garment industry went through serious operational problems due to increased cost of production, low productivity, poor quality, weak management and marketing skills and hence facing serious threat of losing its share in the international markets.
Keeping in view the challenges of the free global trade regime, a number of large textile groups have embarked upon modernization programs. Nevertheless, it has been felt that the implementation of the replacement/modernization plans will not automatically lead to manufacture of quality garment at competitive prices unless standard levels of process conditions and machinery/labor performance are achieved at each stage.
Considering the significant contribution of the textile sector to the exports, foreign exchange earnings and the importance of enhancing productivity & quality, NPO decided to undertake benchmarking study in the Garment Sector for its technical upgradation. The proposed survey on benchmarking was the first of its kind in Pakistan.
Copyright National Productivity Organization
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TYPICAL CAUSES OF HIGH LABOR COSTS IN PAKISTAN
Standard Minute value is erroneous
Insufficient man & machine utilization
Poor line balancing
Inconvenient work environment and housekeeping
Unskilled quality management
Machines at low levels of efficiency
Ratio of indirect-to-direct labor is too high
Range of products with little added value
Machine maintenance is low
Weak work methods & process controls
Training is extremely weak, especially at middle management
Copyright National Productivity Organization
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LABOR COSTS IN THE GARMENT INDUSTRY IN ASIA
(As per the USAID Washington)
(US$ per Operator Hour)
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SYMPTOMS OF LOW PRODUCTIVITY IN ASIA
Materials:
Huge amounts of waste, excessive usage Insufficient utilization, low quality workmanship, materials not in most convenient
Productivity:
Low performance, excessive lost time, setting up time, poor work methods Lack of incentives, weak skills, poor organization, poor line balancing
Machine capacity:
Breakdowns, low output, high costs Poor or lacking maintenance, long set up times, low running speeds
Work Methods:
Excessive handling Poor layout, poor location of departments, handling of small units, poor handling Equipment
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Benchmarking-Time to Export (Days)
South Asia Region - Compared to Global Best Countries - (Source: Business Database)
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OBJECTIVES OF THE STUDY
The exercise was designed around the following objectives:
To prepare and guide selected garment exporters in becoming competitive through benchmarking activities To develop in-depth understanding, benchmarking in selected companies; and application of
To identify and encourage the implementation of Best Practices so as to minimize costs, improve efficiencies and productivity; To collect information on best practices/snapshot in seven fields of the selected companies under the survey and to develop comparative data amongst the industries.
SCOPE OF THE BENCHMARKING PROJECT
The seven benchmarking fields under this project are:
Dyeing/ Finishing, Sewing, Knitting, Laundering, Printing, Industrial Engineering & Maintenance (Note: latter 2 fields related to Sewing / Stitching function only)
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BENCHMARKING ANALYSIS
Benchmarking is the process of identifying and adapting outstanding practices from organizations and companies around the world to assist an organization or company in measuring and improving its performance.
The basis of a successful benchmarking exercise is a thorough understanding and knowledge of best practices in the relevant areas. The metrics and quartile system of classification used in this study were derived from years of research and experience and a detailed understanding of best practices in the garment industries (as per the Report on Measuring Competitiveness and Labor Productivity in Cambodias Garment Industry by USAID Nathan Associates, Associates for International Resources and Development, Economic Institute of Cambodia, and Werner International).
Factories with overall benchmarking scores in the top quartile are considered worldclass manufacturers, while those in the fourth quartile are considered poor performers. Factories whose scores put them in the second and third quartiles are medium-high performers and medium-low performers.
The information gathered from over two months period (February to March 2007)
Technical experts and BPOs have collected data from 10 out of 12 factories (one company withdrew and the other has not confirmed any visit schedule) through interviews, site visits, and questionnaires.
Technical experts and benchmarking advisors then analyzed the results, compared to best practices, and benchmarked them to each other.
Findings of the benchmarking analysis are presented for the factories here.
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BENCHMARKING PARAMETERS
Following are the agreed benchmarking parameters from the respective technical fields:
Sewing, Industrial Engineering & Maintenance
1. 11. 2. Marker efficiency 3. Defects percentage 4. B-Quality 5. Production moving system 6. Standard minute value 7. Through put time 17. 8. On time delivery 9. Turnover 10. Absenteeism Machine attachment control machine Numbering system to 16. Spare part control 15. Machine per technician 14. Preventive maintenance 13. Safety & House keeping 12.
Production per machine per shift
Direct to indirect ratio
Dyeing/Finishing, Knitting & Laundering
1. 2. Work Method 3. Technological Strength 4. Time Line 5. Maintenance 6. Quality 7. House Keeping 8. Workers Conditions 9. Presence of Analytical Culture 10. Training 11. Product Development
Productivity
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BENCHMARK RATINGS
Benchmark value
Quartile
Description
10 1st Quartile World Class 9
8 2nd Quartile Medium-high Performance 7
3rd Quartile 5 Medium-low Performance
4th Quartile 2 No measure Poor Performance 1
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QUARTILE OF BENCHMARKING
Sewing, Industrial Engineering & Maintenance
4th Quartile 4th Quatile 19% 19%
1st Quartile 6%
2nd Quartile 35%
3rd Quartile 40%
Dyeing/Finishing, Laundary & Knitting
4th Quartile 15%
1st Quartile 14%
3rd Quartile 29% 2nd Quartile 42%
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CHARACTERISTICS OF QUARTILES
Sewing & Industrial Engineering
Description
Top level
Second level
Third level
Fourth level
Production per machine per shift Marker efficiency
Efficient More than 85% None Less than 80% 5-10% Not calculated More than 10% More than 5% No
Good
Average
Inefficient
80-85% Less than 5% Less than 2.5 Satisfactory
Defects percentage
B-Quality %age
None
2.5-5% NotSystematic Satisfactory
Standard minute value Very efficient 100% Production moving system Turnover Very efficient None
Routine
Through put time
Good
High
On time delivery Not systematic 5-10%
< 95%
< 90%
> 90%
Good Less than 5% Less than 5% 1:1
Inefficient More than 10% More than 10% Not calculated Poor
Absenteeism
None
5-10% More than 1:1 Satisfactory
Direct to indirect ratio Safety & House keeping
1:0.5
Excellent
Good
(Source: Introduction to Work Study, by Kanawaty, George, Published 1992 International Labour Organization, Geneva)
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Machine Maintenance
Description
Top level
Second level
Third level
Fourth level
Preventive maintenance Technician to Machine ratio
Routine
Not appropriate
Corrective
No
1:20
1:21 - 1:40
1:41 1:60
More than 1:60
Spare part control
Routine
Not appropriate
Corrective
No
Numbering system to machines Machine attachment control
Excellent
Good
Average
No
Routine
Not appropriate
Corrective
No
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Dyeing/Finishing, Laundry & Knitting
Description
First Level
Second Level
Third Level
Forth Level
Productivity
More than 80 %
60%-80%
40%-60%
Below 40%
Work Method
Very Efficient
Good
Satisfactory
Non Satisfactory
Technological Strength
Less than 5 year
Less than 10 Year
Less than 15 Year
Very Old
Time Line
Routine
Average
Non Systematic
None
Labor Productivity
Productive
Average
Corrective
None
Maintenance
Effective
Preventive
Corrective
None
Quality
Excellent
In Process
Satisfactory
None
House Keeping
Excellent
Good
Average
None
Workers Conditions Presence of Analytical Culture
Tidy Uniform
Untidy Uniform
No Uniform
None
Excellent
Productive
None
None
Training
Excellent
Good
Not Systematic Not Systematic
None
Product Development
Efficient
Productive
None
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BENCHMARKING SCORES
Sewing & Industrial Engineering
Company Codes / Evaluation Rate Sr. # Description A B C E I J L AVG.
1.
Production per machine
7.29
2.
Marker efficiency
8.29
3.
Defects percentage
3.67
4.
B-Quality %age
2.67
5.
Standard minute value
5.43
6.
Through put time
6.00
7.
On time delivery
4.00
8.
Production moving system
6.29
9.
Turnover
3.83
10.
Absenteeism
5.00
11.
Direct to indirect ratio Safety & Housekeeping
5.20
4.86
12.
TOTAL out of 120 points
59
50
34
65
62
61
65
62.53
(Note: The boxes with dash in the above matrix shows no verifiable data being provided by the respective beneficiary)
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BENCHMARKING SCORES
Machine Maintenance
Company Codes / Evaluation Rate Sr. # Description E F L AVG.
1.
Preventive maintenance
7.00
2.
Machine per technician
6.67
3.
Spare part control
6.33
4. 5. Machine attachment control 6 7 6 6.33
Numbering system to machine
7.67
TOTAL out of 50 points
27
37
38
34
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BENCHMARKING SCORES
Dyeing/Finishing & Laundry
Company Codes / Evaluation Rate Description A B E F H I J K AVG.
Work Method
6.25
Technological Strength
7.38
Time Line
5.50
Maintenance
5.38
Quality
6.38
House Keeping
5.86
Workers Conditions
6.12
Presence of Analytical Culture
6.00
Training
6.38
Product Development
3.75
TOTAL out of 100 points
69
47
65
89
49
40
59
88
63.25
(Note: The blank boxes in the above matrix shows no verifiable data being provided by the respective beneficiary)
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BENCHMARKING SCORES
Knitting
Company Codes / Evaluation Rate Description B K AVG.
Productivity
7.00
Work Method
7.00
Technological Strength
7.50
Time Line
5.50
Maintenance
8.00
Quality
7.50
House Keeping
5.50
Workers Conditions
6.00
Presence of Analytical Culture
5.50
Training
4.50
Product Development
5.50
TOTAL out of 100 points
46
93
69.50
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BENCHMARKING ACROSS FACTORIES
Sewing & Industrial Engineering
Sewing & IE
L J I E B A
20
40
60
80
100
A comparison of scores of 5 companies that each has scored in Sewing & IE out of a total of 100 (considering sum of all the benchmarking parameters except on-time delivery and direct to indirect ratio).
Production per machine
Marker Efficiency
Avg L J I F E C B A
Avg L J I F E C B A
10
10
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Defects Percentage
B-Quality %age
Avg L J I F E C B A
Avg L J I F E C B A
10
10
Standard Minute Value
Throughput time
Avg L J I F E C B A
Avg L J I F E C B A
10
10
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Turnover
Production moving system
Avg L J I F E C B A
Avg L J I F E C B A
10
10
Absenteeism
Safety & Housekeeping
Avg L J I F E C B A
Avg L J I F E C B A
10
10
Direct to indirect ratio
Avg L J I F E C B A
10
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Machine Maintenance
Machine Maintenance
A comparison of scores that each company has scored in machine maintenance out of a total of 50 (considering sum of all the benchmarking parameters).
0 10 20 30 40 50
Preventeive Maintenace
Machine Attachm ent control
AVG. L F E 0 1 2 3 4 5 6 7 8 9 10
AVG.
E 0 1 2 3 4 5 6 7 8 9 10
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Spare Part Control
Num bering Sys tem to Machine
AVG.
AVG.
E 0 1 2 3 4 5 6 7 8 9 10
E 0 1 2 3 4 5 6 7 8 9 10
Machine per Technician
AVG. L
F E 0 1 2 3 4 5 6 7 8 9 10
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General Operational Observations in Sewing and Maintenance
The beneficiaries B & L have efficient plant layout. The beneficiaries L & E have good work stations. In L, I & E flexible chairs are provided to operators for better ergonomics. The beneficiary L is effectively utilizing the natural light which is a good practice. The beneficiaries A & E are fully equipped with Garment Gerber Technology (GGT) while L is partially equipped, in the cutting section. In beneficiaries C, J & L, sewing machines are not placed under the tube light. Overall, E & L have relatively better working conditions. In company L, trolleys of different colours are used in different units or sections for better traceability. The company E has relatively better housekeeping. Inoperative machines are not covered, in almost all factories. Very high %age of rework is observed in A & B. In company L, relatively better housekeeping and display of tools is observed in the maintenance department. Most of the beneficiaries lack discipline in the production due to subcontracted people. Poor housekeeping in most of the companies was observed. In general, too many workers in the QC actives; checking the checkers. Every organization is organized in the same way: a routine oiling, greasing and cleaning is in place.
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Dyeing/Finishing & Laundry
Dyeing/Finishing & Laundary
AVG K J I H F E B A
10 20 30 40 50
60 70 80 90 100 110
A comparison of scores of 8 companies that each has scored in Dyeing/Finishing & Laundary out of a total of 110 (considering the sum of all the benchmarking parameters).
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Technological Strength
Work Method
AV G K J I H F E B A
AVG K J I H F E B A
9 10
10
Maintenance
Time Line
AVG K J I H F E B A
AVG J H E A
9 10
10
Product Development
Quality
AVG K J I H F E B A
J H E A
10
10
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Workers Conditions
House Keeping
AVG J H E A
AVG K J I H F E B A
10
10
Presence of Analytical Culture
Training
AVG J H E A
AVG K J I H F E B A
10
10
Productivity
AVG K J I H F E B A
10
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Knitting
Knitting
AVG K B 0 20 40 60 80 100
A comparison of scores that each company has scored in Knitting out of a total of 110 (considering the sum of all the benchmarking parameters).
Work Method
Time Line
AVG K B 0 1 2 3 4 5 6 7 8 9 10
AVG K B 0 1 2 3 4 5 6 7 8 9 10
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Technological Strength
Maintenance
AVG K B 0 1 2 3 4 5 6 7 8 9 10
AVG K B 0 1 2 3 4 5 6 7 8 9 10
Quality
Presence of Analytical Culture
AVG K B 0 1 2 3 4 5 6 7 8 9 10
AVG K B 0 1 2 3 4 5 6 7 8 9 10
Product Development
AVG K B 0 1 2 3 4 5 6 7 8 9 10
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General Operational Observations in Dyeing/Finishing, Knitting & Laundry
Companies A, K, E & F have good production control with Management Information System. Age of the equipment is fairly high in I & J. In general, Quality Control System in the companies A, E, F & K was relatively good. Almost all Companies (A, B, E, F, J and K) have HT technology, giving possibilities to dye synthetic fibers and blends. Companies J & K have automated chemical dozing system in place however others are operating on manual system. Companies B & I have low rate of automation. Almost all the sampling machines in company B are manual: very difficult to obtain good correlation between sampling and bulk. In general, almost all the factories (A, B, E, F, J & K) have good laboratory equipment. Contract system was observed in the Knitting department of company B, as it is difficult to have good discipline with subcontracted people. No Waste Water Treatment Plant (WWTP) was found except three companies (A, F & K). Correlation between lab and bulk is poor: It might take more than 5 attempts in dye-lab to match the correct shade in company J & E. Almost all the companies use branded dyes and chemicals.
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Pictorial Snapshot /Poor Practices
Finishing Hall & House Keeping Compliance Issues
Rework and Line Balancing Poor House Keeping
Line Balancing and House Rework or Alteration
Keeping
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Line Balancing Plant layout (Finishing)
Compliance Issues Machine Cleanliness
Plant layout (Cutting)
Plant layout (Stitching)
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Housekeeping issue (Cutting) Housekeeping issue (Cutting)
Waiting Time Line Balancing
Rework Rework
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Maintenance
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House Keeping (Cutting)
Compliance Issue Compliance Issue
Compliance Issue Over stacking
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Operator and Light Utilization
Bad Ergonomics Plant Layout
Garment Stacking (Finishing)
No Pathways (Finishing)
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Finishing Hall
Finishing Hall
Over crowded Safety Issues
Lighting and housekeeping issues Poor Fabric Handling (Dyeing)
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Printing Designing Stacking (Storage)
Uncovered machines in parking area (Maintenance)
Mishandling - Fabric falling from carriage
Sewing machines are not covered in machine yard.
Exposed Area
Wrong Place for Batchers WIP inventory (Stitching)
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Housekeeping issue (Storage) Flat Inspection tables (Finishing)
Flat tables for QC (Stitching)
Sitting Arrangement & Housekeeping (Stitching)
Line balancing - Sewing operator surrounded with garments (Stitching)
Housekeeping (Stitching)
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WIP Inventory (Stitching)
Bundling of cut panels (Cutting)
Lighting placement issue (Stitching) Housekeeping (Storage)
Lights not switched off during break (Stitching)
Waiting Time (Finishing)
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Fabric Rolls on Floor (Storage)
Housekeeping (Cutting)
Housekeeping (Cutting) Over stacking
Manual Cutting Housekeeping (Cutting)
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Storage in Passage Waiting time & housekeeping (Stitching)
Layout Pathways obstructed (Stitching)
Line balancing issue (Stitching)
Garment handling (Stitching)
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Pictorial Snapshot /Good Practices
GGT for Spreading (Cutting) Storage Bins for spare parts (Maintenance)
Passage way Mark Tool handling (Maintenance)
Proper Lighting Progressive Hanger System
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Progressive Hanger System
Drainage Line Covered & Clean Floor (Dyeing)
Auto Feeding (Dyeing) Effective use of Lighting
Written Instructions Plant Cleanliness
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SWOT Analysis
Sewing, IE & Maintenance
Comp any
Strengths (S)
Plant layout Organizational Chart Industrial Engineering service High production capacity Good production system Effective SOPs Production planning and control Training procedure Large order Technology driven Utilization of international experts knowledge Vertically integrated Plant layout Organization chart Standard direct to indirect ratio Training procedure In-house raw material availability High production capacity Turnover Staff with technical knowledge Weak quality assurance process House keeping & safety High rework High labor cost Direct to indirect ratio Operator evaluation Inadequate space Working condition Lost time report Crowded Floor Less competent middle management World renowned buyers Free market access Utilization of modern equipment Huge volume of expert Possibility to increase the productivity Possibility to improve the quality The companies have the base to reach the 1st Quartile Manufacturing cost International competition Branding
Weaknesses (W)
Opportunities (O)
Threats (T)
Skilled labor Location of factory Team Working environment Raw material in-house
Plant layout] Line balance High plant capacity Name and fame in Global market Modern system & Technology Industrial Engineering service Talent of top management Working condition Utilization of international expert knowledge Training department Branding
Industrial Engineering service Production system Modern system & technology Implementation of SOPs Poor line balancing Production planning & control Quality Assurance process Available to guide the decision Housekeeping and safety procedure Maintenance High rework Working condition Industrial Engineering Plant layout SOPs implementation Technology Poor working condition Training department Weak organizational chart Implementation of SOPs Organizational chart High absenteeism High labor cost High rework Direct to indirect ratio Lighting condition
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Comp any
Strengths (S)
High production capacity Large order PPC software control Skilled labor Training department Plant layout Organization structure Technology SOPs implementation Industrial Engineering department Poor cutting condition Industrial Engineering department Available to guide the decisions Direct to indirect ratio out of rate High labor cost High turnover and Absenteeism High work in process Modern systems & technology Plant layout Organization Chart Production planning & control department. World renowned buyers Free market access Utilization of modern equipment Huge volume of expert Possibility to increase the productivity Possibility to improve the quality The company has the base to reach the 1st Quartile Manufacturing cost International competition Branding
Weaknesses (W)
Opportunities (O)
Threats (T)
Great potential staff Not depending on limited buyers High plant capacity Good infrastructure Talent of Top management Utilization of international expert knowledge
Plant layout Organization structure Name and fame in global market Not depending on limited buyers High plant capacity Good infrastructure Talent of Top management Industrial Engineering service Combination of local and foreign experts Modern systems & technology Vertically integrated Staff with technical knowledge Working condition
Available to guide the decisions Direct to indirect ratio High labor cost High turnover and Absenteeism High work in process SOPs implementation Training procedure
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Dyeing/Finishing, Laundry & Knitting
Company
Housekeeping Technology Lab Product Development Preventive Maintenance High Production Capacity Testing Equipment Training Quality System MIS System The Company has the base to reach the 1st Quartile Regional & International Competition Cost & Quality Competitiveness
Strengths (S)
Weaknesses (W)
Opportunities (O)
Threats (T)
Skilled Workers Lab Assistance
Less Automation Technology Preventive Maintenance SPC Training Lack of Staff with Technical Knowledge
Quality system can be improved SPC can be implemented & practiced to improve the Machine Efficiency
Quality System Lab Machine Efficiency Testing Equipment Process Difficult fabrics Talent of Top Management Name & Fame in the market Satisfied Costumers
Machine Age Statistical Process Control Management Information System
SPC implementation can improve the Productivity
Machine Age
R&D Lab Assistance SOPs Work Method Working Area Skilled Operator Quality of Goods Quality System Testing Equipment Training Good Infrastructure Industrial Engineering Name & Fame in the market Satisfied customers
The Company has the base to reach the 1st Quartile
International Competition (specially China) Cost & Quality Competitiveness
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Company
New Machines Skilled Workers Modern System & Technology Lab Automation Preventive Maintenance SPC Quality System Training Uneducated Labor Ineffective QMS Quality system can be improve SPC can be implemented & Practiced Regional & International Competition Cost & Quality Competitiveness
Strengths (S)
Weaknesses (W)
Opportunities (O)
Threats (T)
New Machines
Lab R&D Training SPC Chemical Storage Area Uneducated Labor State of the art Laundry Section (under construction)
Utilization of new set-up Possibility to increase the Production Possibility to improve the Quality
Dosing System Latest Machines SPC Lab Facilities Testing Equipments
Short Run(Order) Machine Efficiency Preventive Maintenance Quality Department Power Fluctuation
Possibility to increase the productivity Possibility to improve the quality Utilization of modern equipment
Industrial Engineering
Chemical Dosing System Work Method Quality System Lab Assistance R&D Working Area Well Defined SOPs Preventive Maintenance Skilled Labour Goods Quality Training Not dependent on limited buyer Good Infrastructure Satisfied Customer
The Company has the base to reach the 1st Quartile
International Competition (specially China) Cost & Quality Competitiveness
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FINDINGS
a. The level of technological and managerial sophistication varies widely & they have significant potential for upgrading.
b. Do not have the necessary in-house expertise and resources to implement the suggested changes.
c. Lack of work methods and thus have no formal standards against which to evaluate operators; these poor standards impede quality control and efforts to ensure product consistency.
d. Do not use standard values to evaluate the efficiency of production operations.
e. Do not have a proper organization chart. This encourages overstaffing of many positions.
f. Ratio of direct to indirect personnel is not within internationally accepted ranges (1 to 0.5)
g. Proper standard times do not exist for various production operations. There is a complete absence of attention to the issue of time lost by workers.
h. Problems of insufficient space and poor layout exist. The layout can be improved, thus reducing considerably the time spent on handling materials.
i. Line balancing is poor, resulting in excessive waiting times on the line.
j.
Lack of product specifications and therefore do not carry out proper production planning.
k. Control of Work In Progress is not in to the minimum acceptable level. Fabric consumption and waste are not controlled.
l. With regard to capital investments, machinery is generally in good working condition, but maintenance is weak. The time spent on repairs is not recorded.
m. Machines are operated inefficiently, equipment maintenance is often insufficient due to Lack of investment in maintenance, plus ineffective spare parts stock control, often leads to considerable lost production.
n. Training at both the operator and supervisor levels is unsatisfactory.
o. The recruitment procedure is not systematic.
p. Technical training is lacking at all personnel levels: senior managers, middle managers, technicians, supervisors, sewing operators, cuttingroom personnel, and pressing, folding, and packing operators.
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q. Do not train their section and line supervisors are usually trusted and experienced operators with little formal education. They have not been trained to control their sections for achieve the desired production quantities on time with right cost and best quality.
r.
The quality of sewing and raw-material selection generally was viewed as acceptable for the target markets; there is still not available significant potential to increase quality levels.
s. The problem observed is a lack of disciplined systems and controls in the production department, Executive managers are unaware of daily.
t.
Management information systems are deficient, inappropriate and inaccurate.
u. The range of products currently produced emphasizes construction and design, with very little added value. basic
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GOOD PRACTICES/RECOMMENDATIONS FOR IMPROVEMENT
The post-2005 era is witnessing major changes in the textile sector. Whilst in some countries this particular sector is enjoying a boom, in others it is going through a major decline. In order to stay ahead of the market, one must ensure required products are offered faster, cheaper and at a better quality than anyone else in the world. During the period 1990-2001 the growth in garment exports achieved by Pakistan was only 110% as compared to 160%, 278% and 750% achieved by India, China and Bangladesh respectively.
On global basis Pakistan's clothing exports are only 1.00% which is less than half of that from India and about 16 times lower than that from China.
The readymade garments sector in Pakistan is seeing mixed results. Knitwear garments sector has seen a decline, while denim jean sector continues to grow. There are a number of hypotheses for this decline e.g. higher utility cost, competing countries giving subsidies to their products and uneven playing fields in foreign markets. However, all these hypotheses are related to factors outside the control of the manufacturer/entrepreneur.
This study provides an insight to the internal factors that can improve the competitiveness of Pakistans garment sector. We have categorized these factors as Factor Driven, Efficiency Driven and Innovation Driven aspects keeping in view the global competitiveness framework. These factors are discussed below to give an in depth overview of the present situation and proposed the good practices / recommendations accordingly.
FACTOR DRIVEN ASPECTS
1. Plant Layout
The efficiency of a factory highly depends on its plant layout. During this study, it was observed that only a few factories have efficient plant layout, while majority of the companies have inefficient plant layouts. In fact, the inefficient layout leads to increased lead-time, throughput time, WIP etc. making the working conditions undesirable and consequently increasing the cost (per minute). The plant layout plays a vital role in the manufacturing cycle, therefore it should be given due importance for better productivity.
In order to make the efficient plant layouts, a company has to analyze the process flows, time frames, motion, bottlenecks, speedy/slow workers, passage ways, etc.
2. Lightening Conditions
The data analysis shows that there are very rare practices of natural light utilization. Very few of the factories are utilizing the natural light effectively. To use the natural light effectively is a good practice; it decrease the utility cost thus reducing manufacturing cost. Therefore beneficiaries have to consider this aspect to become energy competitive in terms of light utilization.
It was also observed that in many factories, the lightening conditions are not so
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good especially at the workstation of sewing operator and quality controller which result in B-quality, rework and high defect percentage.
The positioning, height and intensity of tube light should be according to the standards (especially for the operators). Energy savers and closed circuit technology should be used in the offices. They should be designed to effectively utilize the natural light and sensors may be placed to detect the human presence and direct light management accordingly in order to conserve energy losses.
3. Working Environment
The hot, humid & dusty environment and bad housekeeping leads to unsatisfied workers, increased unwanted movements and drop in concentration, resulting in low productivity and quality. The renowned brands/customers are very critical and conscious, and prefer the companies having good working conditions to place their orders. The benchmarking study shows that only a few factories have relatively better housekeeping and working conditions. Therefore, in order to attract the famous buyers and compete the global markets, the garment companies should have to invest and consult for improving the working conditions.
Suggested technique to improve the house keeping and working environment is to implement the Japanese concept of 5-S Kaizen.
4. Workstation Layout
If operator feels better, works better. The study shows that only two of the beneficiaries have good workstations layout i.e. they made the workstations comfortable for their operators, while others are still ignoring this important aspect of low/high productivity. The uncomfortable workstations cause pain, numbness, or tingling in the shoulders, neck, back and hands, eventually affecting the productivity of sewing machine operators. These symptoms are related to the job/workstation e.g. An uncomfortable work position: Sewing work forces you to hold your body in one position for long periods. If it is an uncomfortable position, pain and injury can result. Your position is determined by the fit of your chair and foot control, your need to see the work, and your need to grasp or hold materials in place. Repeated or forceful motions Reaching, stitching, pinching, pulling... hundreds of times a day. Each motion can cause small injuries to muscles and joints. Long work hours and few breaks mean less time for muscles and joint injuries to heal. Hard edges: If the edge of your chair, worktable or table legs press into your body for long periods, it can damage nerves or other soft body parts.
We can achieve better efficiency and high productivity & quality by conducting Ergonomic studies and consequently providing the good & efficient workstation to operators: Use adjustable chairs: Employers should get durable industrial chair that have adjustable seat height, padded seats, swivel bases with five legs (not four) and padded adjustable backrest. Use foot supports: Foot supports are an important part of the seated workstation. Employers may need a mechanic to adjust, install, or build up foot support in the right position for each worker (height, forward/back and left/right). Adjust your equipment to fit your body: Every operator should adjust their equipment according to its body ergonomics for better productivity and also to prevent injuries.
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Another suggestion is to use the Japanese concepts of Muri (unnatural) and Mura (un-even) to improve the existing situation.
EFFICIENCY DRIVEN ASPECTS
5. Capacity Building
Only installing automation and the latest machinery hardware does not guarantee productivity improvement, but training has its own importance for improvement even with existing infrastructure. Therefore, the basic recommendation for improving the overall performance of the garment industry is to implement training / capacity building programmes (especially focusing the soft skills) for:
Management: Top managerial personnel should be trained both at company premises and at the international business schools in administration, finance, marketing and production. Technical Management: Technical managers receive training almost exclusively from textile institutes/colleges. In plant arrangements for training of technical personnel are required in the modern scientific management control methods. Supervision: In the vast majority of textile mills, supervisors receive no formal training whatsoever. Arrangements for training of supervisors should be provided. Workers: Formal training programmes for the training of workers inside the mills are generally non-existent. Workers are accustomed to low quality and low productivity in general. These habits can be changed only by training so that workers develop the habit of obtaining guidance and assistance of qualified professionals. Management usually invests on machinery, but the people who run that machinery are the most important to be trained to make them understand about the machinery: operation and routine maintenance. This would improve the reliability and efficiency of the machine and operator as well.
The highest priority is to train middle management such as line supervisors and industrial engineering personnel. As garment industry is a labor intensive industry and labor wage directly impact the total cost of the business, therefore the middle management have the greatest effect on the efficiency of the plant.
6. Performance Measurement
Performance measurement is evaluating how well organizations are managed and the value they deliver for customers and other stakeholders. It is the process of assessing progress toward achieving predetermined goals, including information on the efficiency with which resources are transformed into goods and services (outputs), the quality of those outputs (how well they are delivered to clients and the extent to which clients are satisfied) and outcomes (the results of a program activity compared to its intended purpose), and the effectiveness of operations in terms of their specific contributions to program objectives.
The garment industry should adopt performance management system in their organizations in order to measure and evaluate their performance and take corrective measures accordingly.
An effective approach to performance management enables employees and teams to understand the goals of the organization and to see how individual and team outputs contribute to the achievement of organizational objectives and values. This
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approach identifies, or defines, the performance expectations for individuals and teams that are inherent aspects of their employment.
Integrating people, planning and performance with organizational objectives develops individual and organizational capability and leads to higher performance. The performance appraisal process articulates the standards of work expected of employees and the values and behaviours employees are expected to uphold in meeting their job requirements, communicating and working with others.
Performance management leads to higher performance that is more closely directed to the objectives and needs of the organization. Performance appraisal and feedback assist employees to understand what work they do well and how they can improve their performance.
Suggested techniques to utilize are climate survey, 360 evaluation, productivity diagnosis, etc.
7. Industrial Engineering Department
Industrial Engineering techniques are very helpful in any organization for increasing its productivity and quality. The garment sector in Sri Lanka, India, China, and other competitive countries employ IE techniques to make their processes and workers more productive. IE techniques are helpful in addressing / estimating lead times, no. of workers, working / operating time, costing, process designs, process flows, line balancing, best methods to produce, etc. In Pakistan, the industrialists are realizing the importance of IE and making their efforts to establish IE departments within their companies. Only few companies are successful in this regard, but still unable to tap the full potential of IE.
Therefore, it is proposed to establish and/or strengthen industrial engineering departments in the companies and in plant arrangements for the training of technical personnel are required in order to implement the IE techniques more effectively. Moreover, master trainers on IE should be developed from foreign institutions.
Suggested techniques to implement are work study, method study and value stream mapping.
8. Supply Chain Management
Supply Chain Management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. In essence, Supply Chain Management integrates supply and demand management within and across companies. It is all about having the right product in the right place, at the right price, at the right time and in the right condition.
We can also use the concept of Quick Response in order to understand the supply chain management. The quick response strategy is to linking manufacturer, supplier and retailer with each other and cooperates effectively in order to reduce the lead time of the production. Generally, many manufacturers, suppliers and retailers are struggling to use information technology for adopting quick response strategy and to streamline their supply chain. At present, some textile enterprises use quick
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response system to be the leaders and to have a competitive advantage over their competitors.
The textile and garment industry in Pakistan should have to adopt effective supply chain management systems in order to face the challenges of global competitiveness. They have to be quick in their responses and even quicker to meet the increasing demands / trends of the customers. They have to streamline their supply chain to timely process the production orders of their customers. They have to think of the lead time to export, for example which is 5 days in Denmark and 25 days in Sri Lanka as compared to 33 days in Pakistan (refer to page 11). They have to work on reducing the lead time along with their stakeholders including the government. They have to benchmark other countries in order to be competitive in this arena.
9. Inventory Management Systems
Missing of the raw material is also the major cause of high cost. It is observed that in many factories there is no proper system for controlling the inventory. Due to which raw materials are lost about 5% in every month particularly small items such as label, snap, zipper, etc. Moreover many errors and omission were observed in the records for stock, which is undesirable (a crime) in any industry.
Efforts are required to be put on revamping and adopting an effective and efficient inventory management system based on the new tools and techniques prevalent especially in the garment sector. This can also be rectified by hiring of consultants on inventory management systems.
Suggested techniques to improve are to implement Enterprise Resource Planning (ERP) and Material Resource Planning (MRP) programs.
10. Inefficient Storage
Storage is an integral part of any industry. It is the place where we place / store items for certain period of time and use on when and where necessary basis. The inventory on the other hand is the list / register of those items.
Mostly in the Pakistani garment factories, the people do not have the know how of how to store the items. They do not have the proper concept of inventory management; instead they are just maintaining registers. Inventory levels are not defined and sometimes they have to wait for the item to be purchased from the market. Similarly, the placing of items is also not proper, and if one has to find a certain item, he / she has to spend time in searching for that particular item. Also, in many companies we find things that probably should not be in the store or not required / needed (for example old fabric, old accessories & machines, raw material, finished goods, etc.), thus incurring extra cost.
It is required to improve the storage designs keeping in mind the first in first out (FIFO) rule, space utilization, identification & traceability, ease of search & access and handling of items. It is also required to put due emphasis on stores, which is a neglected department in almost every factory. It is also important to dispose off the items that are not necessary in order to effectively utilize the money.
Some of the factories are also facing the problem of insufficient space for storage, which may be addressed by hiring extra storage space (where needed). However, the recommendation is to adopt just in time concept in the factories so that the
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industrialists may not require big storage rather they try to streamline their supply chains and minimize the inventory.
11. Shortage Of Raw Material
This problem is linked with the material handling system or the inventory management system. This is also the result of poor supply chain management system. Addressing these issues would solve the problem of shortage of raw material.
12. Fabric Utilization
Many garment businesses misunderstand that labour cost is the most important item to control cost and do not concentrate to control cost of raw material in particular fabric. This kind of thinking can lead them to high cost, therefore, the management should have to implement fabric utilization project by using computer program, hire consultant, training employee, and establish fabric utilization.
13. Quality Management
Mostly top management has concerns on quality; and the emphasis is on quality control staff of customers and strong inspection control of the production lines and the finished goods. But this is not the end; today the concept of quality is more challenging and demanding. It requires a lot more effort than in the past days. It requires implementing different standards such as WRAP, ISO 9000, ISO 14000, SA 8000, OHSAS, etc. in order to be competitive in the global market. It also requires the modern concepts of TQM and Kaizen Management in order to improve continuously apart from observing the standards. Adoption of an Integrated Management System is necessary in this context. It needs strong management commitment and dedication of the staff to achieve quality; quality workforce, quality skills, quality environment, quality team management, quality leadership, quality documentation, quality control, etc.
All this can be achieved through training of existing personnel, master trainers/consultants, strong and focused planning and a visionary & committed leadership.
INNOVATION DRIVEN ASPECTS
14. Technology Development
Technology development is another aspect of competitive advantage among the companies. Most of the companies in the dyeing & garment sector do not support technology development and their process designs are weak or less productive than their competitors in the global market. Some of the large companies have invested a lot of money to recruit experienced people and consultants to develop their process designs, including the usage of computer software and high tech machines like Garment Gerber Technology (GGT) and computerize hanger system in garment sector, automatic chemical dozing & computerize sampling in dyeing. The result is that they are surviving in the global markets.
Our garment industry, at large should focus on their R&D capabilities and activities in order to develop their technology and to be competitive.
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15. Brand Management
Most of the companies have not created their own brand which present the companies face to the market. So a consideration as a business strategy for future is to start creating a permanent own brand and to try selling the products with it to the existing buyers at a so-called advertisement price which means no commercial price just to develop it.
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RECOMMENDED IMPLEMENTATION PLANS FOR QUALITY & PROCESS IMPROVEMENT AND COST REDUCTION
Keeping in view the SWOT analysis, the above discussion and the problems identified (mainly related to quality, process and cost), we recommend following Implementation Plans
a. Quality Improvement Plan (Phase-I) b. Process Improvements Plan (Phase-II) c. Cost Reduction Plan (Phase-III)
The tentative timeline of each plan / phase is one year and it can be customized as per the company needs.
Expected Improvements
After implementing this implementation plan following improvement can be expected in our selected KPIs.
Sewing/IE/Maintenance
Sr. #
Key Performance Indicator
Scored Points
Expected score after 3 years
1. 2. 3. 4. 5.
Production per machine Defects %age B-Quality %age Through put time Safety & housekeeping Average Cumulative improvement
7.29 3.67 2.67 6.00 4.86
4.90 38.00%
8.00 7.00 5.00 7.00 7.00
6.80
Dyeing/Finishing
Sr. #
Key Performance Indicator
Scored Points
Expected score after 3 years
1. 2. 3. 4. 5.
Work method Time line Quality Housekeeping Training
Average Cumulative improvement
6.25 5.50 6.38 5.86 6.38
6.07 41.00%
8.00 9.00 9.00 8.00 9.00
8.60
Knitting
Sr. #
Key Performance Indicator
Scored Points
Expected score after 3 years
1. 2. 3. 4. 5.
Work method Time line Quality Housekeeping Training
Average Cumulative improvement
7.00 5.50 7.50 5.50 4.50 6.00 40.00%
8.00 9.00 9.00 8.00 8.00 8.4
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Implementation Plan for Quality Improvement
Sr. 1. Activities Selection of Project Manager Description of Activities To be officially appointed reporting to MD/CEO, selected from senior management (Manager and above level, preferably from IE department) Fully responsible for the execution and implementation of the project Well versed with the operations and production processes Devote reasonably enough time to the project Brainstorming session chaired by a trained person, and following activities to be done: - Selection of Master Trainer - Problems identifications Two trainers from each department Ratio of master trainer to worker (10:1000) Training of Trainer(TOT) Program - Quality tools - Productivity tools - Cost reduction techniques - Training assessment techniques - Formation of Presentation - Effective problem identification and problem solving tools. - Standardization - Pre-assessment of company process with the special focus on current Quality Techniques & Processes by using the photograph, videos etc. The main objectives of this session are: - Identify critical processes and the problems with main focus of quality control techniques, defects analyze techniques - to develop strategic plan 1 2 3 4 5 Months 6 7 8 9 10 11 12
2.
Brain storming
3.
Training of Master Trainer
4.
Productivity audit
5.
Brainstorming session
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- Refining objectives / goals / roles & responsibilities. 6. CEO Approval for the Strategic Quality Process Improvement Plans (SQPIP) Briefing to the senior & top management of the plans by the Project Manager / Master Trainers Ensuring confidence & commitment of CEO and senior management Approval of the strategic plans and official confirmation of roles and responsibilities Allocation of resources (man, material, etc.) Master trainers will analyse Quality Control process. Master Trainers will utilize quality analysis and defect analysis techniques. Master trainers utilize the 7 QC tools for identify the quality problems. They will focus on the Quality Improvement technique like 5S, Kaizen, Quality Control Cycle, IE tools and Six Sigma. They will also arrange session for quality controllers to enhance their quality auditing abilities. Master trainers will form the strategies for developing the TQM environment. Based on the above analysis, the master trainers will form an action plan These action plans will be furnished with specific achievable targets / goals Master Trainers to select 4-5 member team from each department for the implementation of the Action Plan The selected members are to be preferred from Quality, Production and IE department. Master Trainers to act as team leaders / facilitators, will also assign the roles and responsibilities to the team members and guide them throughout the implementation phase.
7.
Quality Improvement Initiatives (by the respective Master Trainers)
8.
Setting Action Plan & Targets
9.
Formation of Departmental Quality Improvement Team (QIT)
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10.
Implementation of Action Plan
11.
Results
12.
Others / Remarks
Master Trainers will be responsible to implement & monitor the action plan within time lines / targets Master Trainers will also be responsible to adopt for any changes in the Action Plan, as per the changing needs / situations Master Trainers will analyse & compile the results (especially keeping in view the selected KPI like defect %age, B-Quality %age, rework %age) He will be responsible to report for the results to the project manager / management He / team members will present the results to the management, which will help improving and grooming the presentation skills of the team members Based on the results, each team member will be rewarded on the discretion of the management as per the set criteria developed by the project manager An international expert can be hired for the quality improvement analysis and setting / implementation of action plan (NPO Pakistan can help in hiring the international expert for 15 days, free of cost)
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Implementation Plan for Process Improvement
Sr. 1. Activities Assessment Description of Activities Post-assessment of phase-I Pre-assessment of company processes with special focus on layout (plant/machine), current operational techniques, method/work study and working environment by using photographs, videos, etc. The main purpose of this session is: - Identify critical processes and the problems with special focus on layout (plant/machine), current operational techniques, method/work study and working environment - to develop strategic plan on the basis of the above - redefining objectives / goals / roles & responsibilities Briefing to the senior & top management of the plans by the Project Manager / Master Trainers Ensuring confidence & commitment of CEO and senior management Approval of the strategic plans and official confirmation of roles and responsibilities Allocation of resources (man, material, etc.) Master Trainers will utilize process analysis, work analysis, defect analysis techniques In process analysis, they will analyze existing process with 3 Gen Japanese Technique, find out critical process for work analysis and recommend an improved process with Flow Production In work analysis, they will analyze the critical process in-depth by Stratified Data Collection with 3 Gen from the view point of time loss and material loss; and 13 14 15 16 17 Months 18 19 20 21 22 23 24
2.
Brainstorming session for critical processes identification
3.
CEO Approval for the Strategic Process Improvement Plans (SPIP)
4.
Operational Efficiency Improvement Initiatives (by the respective Master Trainers)
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recommend an improved work applying Best Conditions and Quick Action Master trainers will also focus on the concepts of 3 Mu, Muri (un-natural), Mura (un-even) & Muda (waste), for waste reduction Master Trainers will also utilize the Six Sigma concepts / methodology (DMAIC) for process improvement 5. Setting Action Plan & Targets Based on the above analysis, the master trainers will form an action plan These action plans will be furnished with specific achievable targets / goals Master Trainers to select 4-5 member team from each department (or continue with the previous selected team, as per the situation) for the implementation of the Action Plan Master Trainers to act as team leaders / facilitators, will also assign the roles and responsibilities to the team members and guide them throughout the implementation phase. Master Trainers will be responsible to implement & monitor the action plan within time lines / targets Master Trainers will also be responsible to adopt for any changes in the Action Plan, as per the changing needs / situations Master Trainers will compile all the results and analyze (especially keeping in view the wastage, lead time, through put time, work method) He will be responsible to report for the results to the project manager / management He / team members will present the results to the management team by preparing a PowerPoint
6.
Formation of Departmental Process Improvement Team (PIT)
7.
Implementation of Action Plan
8.
Results
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9.
Others / Remarks
presentation, which will help improving and grooming the presentation skills of the team members Based on the results, each team member will be rewarded on the discretion of the management as per the set criteria developed by the project manager An international expert can be hired for the process improvement analysis and setting / implementation of action plan (NPO Pakistan can help in hiring the international expert for 15 days, free of cost) With the implementation of this phase following improvements can be expected: - 05-10% process improvement - 08-10% increase in productivity - 04-06% wastage control - 05-10% rework control - 15-20% enhanced labour productivity Expected operational efficiency after implementation of proposed initiatives can be increased upto 30%
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Implementation Plan for Cost Reduction
Sr. 1. Activities Assessment Description of Activities Post-assessment of phase-II Assessment of existing situation Point out the areas for improvement The main purpose of this session is: - Identification and prioritization of cost critical areas / processes / parameters with special focus on production, material and logistics - Strategic planning on the basis of brainstorming and assessment - redefining objectives / goals / roles & responsibilities evaluation and estimation (if any) of the strategic plans Distinguishing controllable and control resistant cost drivers feasibility report / endorsement of the strategic plans Briefing to the senior & top management of the plans by the Project Manager / Master Trainers Ensuring confidence & commitment of CEO and senior management Approval of the strategic plans and official confirmation of roles and responsibilities Allocation of resources (man, material, etc.) Master Trainers along with project manager, 1 person from IE dept. and 1 person from Finance dept. will be responsible to work on this phase They will work on reduction of - production costs (Factory utilization and 25 26 27 28 29 Months 30 31 32 33 34 35 36
2.
Brainstorming session for cost reduction (participation should be from finance, production, quality, IE & other relevant depts.)
3.
4.
Evaluation and Consensus of the Finance Department for the strategic plans (in consultation with the project manager) CEO Approval for the Strategic Cost Reduction Plans (SCRP)
5.
Cost Reduction Analysis
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6.
Setting cost reduction target
7.
Formation of
production line costs , Eliminating defects and scrap and rework costs, Flow production and Just-in-Time (JIT) methods , Scheduling to reduce underutilization costs), - material acquisition costs (Reducing material content and real material cost, Replacing procurement transaction costs with annualized agreements, How to convert your purchasing function to a true supply chain organization), - Inventory costs (Dramatically reducing inventory...quickly, Setting safety stock levels, order points, and lot sizes, Reducing WIP inventory investment, The relationship of leadtime to inventory investment), - Cost of logistics (Identifying cost trade-offs in logistics, Using time-to-shelf as a competitive weapon, Price and cost relationships in logistics) - Information management & Transaction processing costs (Information system cost drivers, Improving information systems performance and effectiveness, Outsourcing opportunities in IS, Assuring information integrity) They will perform following analysis - Activity-based Cost (ABC) analysis - P-Q analysis - Hidden cost analysis - Break even analysis They will develop optional solutions and screen optional solutions Based on the above analysis, the master trainers will form an action plan These action plans will be furnished with specific achievable targets / goals Master Trainers to select 4-5 member team from
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departmental Cost Reduction Team (CRT)
8.
Implementation of action plan
9.
Result
10.
Others / Remarks
production, finance and quality department (or continue with the previous selected team, as per the situation) for the implementation of the Action Plan Master Trainers to act as team leaders / facilitators, will also assign the roles and responsibilities to the team members and guide them throughout the implementation phase. Master Trainers will be responsible to implement & monitor the action plan within time lines / targets Master Trainers will also be responsible to adopt for any changes in the Action Plan, as per the changing needs / situations Master Trainers will compile all the results and analyze (especially keeping in view cost per minute) He will be responsible to report for the results to the project manager / management He / team members will present the results to the management team by preparing a PowerPoint presentation, which will help improving and grooming the presentation skills of the team members Based on the results, each team member will be rewarded on the discretion of the management as per the set criteria developed by the project manager An international expert can be hired for the cost reduction phase (NPO Pakistan can help in hiring the international expert for 15 days, free of cost) With the implementation of this phase following improvements can be expected: - 15-20% cost reduction - 08-10% increase in productivity
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FACILITATION AND SERVICES BY NPO
The National Productivity Organization (NPO) has been working for the productivity movement in the country with the objective to enhance and promote quality and productivity culture in Pakistan. NPO also serves as the Liaison Office of Asian Productivity Organization (APO), Japan.
The NPO is engaged in providing Training, Consultancy, Benchmarking, Energy Audit and Research services to its clients for productivity improvement in the public and private sectors in the country in addition to hosting the international Seminars, Symposiums and Workshops in collaboration with the Asian Productivity Organization (APO).
The main thrust areas of NPO are Training & Consultancy Benchmarking Energy Efficiency Innovation & Quality Social Sector Development Green Productivity
The NPO has so far successfully organized a number of national and international Training Programs as well as international conferences on productivity, corporate training courses, Energy Audits in textile sector, Benchmarking study in the spinning & garment sector.
Keeping in view the recommendations and the Implementation Plans (on Quality, Process Improvement and Cost Reduction), the National Productivity Organization (NPO) can offer following free of cost services to the garment sector;
Productivity Assessment Organizational Assessment Energy Audits Benchmarking services Training services o Performance Excellence o Kaizen Management o Total Quality Management o Total Productive Maintenance o Quality Control Circles o Business Excellence o 5-S Japanese Technique o 3-Gen Japanese Technique o 3-Mu Japanese Technique o Just in Time (JIT) o Energy Efficiency o Green Productivity o 3-R; Reduce, Reuse & Recycle o Arrangement of session for quality controllers to enhance their quality auditing abilities.
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Consultancy services
o o o o o o
QC tools implementation to identify the quality problems Implementation of Quality Improvement techniques like 5S, Kaizen, Quality Control Circle, IE tools and Six Sigma. Implementation of process analysis, work analysis, defect analysis techniques Assistance for the analysis of existing processes with 3 Gen Japanese Technique Implementation of 3 Mu, Muri (un-natural), Mura (un-even) & Muda (waste), for waste reduction Cost Reduction Strategies production costs reduction (Factory utilization and production line costs , Eliminating defects and scrap and rework costs, Flow production and Just-in-Time (JIT) methods , Scheduling to reduce underutilization costs) Inventory costs (Dramatically reducing inventory...quickly, Setting safety stock levels, order points, and lot sizes, Reducing WIP inventory investment, The relationship of lead-time to inventory investment) Activity-based Cost (ABC) analysis P-Q analysis Hidden cost analysis Break even analysis
APO o o o o
Services Technical Expert Services Demonstration/Model Companies Observatory Study Missions e-Learning Programs
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CONCLUSION
This study has identified the most pressing needs. Yet as already noted with sufficient interest, effort, and resources applied to basic production techniques and managerial disciplines, factories have great potential to increase productivity. Improvements in productivity of 20-25 % can be achieved with the right attitude and climate. A systematic program to introduce modern management concepts, including industrial engineering, production engineering, systems and controls is therefore of the highest priority. Training and professional development to implement such a program are needed.
In comparing experience to national and international benchmarks, the following observations can be made; Training is extremely weak. Often factories have no separate training budgets and no defined training program. The few programs that exist do not have a basis in scientific training principles; rather an assumption is made that time will allow operators to attain the necessary skills. However, the current approach to training often poor methods, and as a result is detrimental to productivity.
The most effective and lowest-cost strategy for raising productivity and quality is training to address weaknesses in professional development, production controls, industrial engineering and organization of work.
Training of production personnel, particularly middle management and supervisors, is essential for achieving the highest levels of flexibility, productivity, and quality. Training programs and production controls must be designed specifically for that.
Professional development systems should focus on the retooling of personnel who may have many years of practical experience but little theoretical background. The purpose of the training should be oriented not only towards reducing manufacturing costs but also towards introducing procedures for production, quality control, planning, and information systems.
This finding has significant implications for top management and their investment decisions because it demonstrates that it pays to invest in people and system as well as in equipment.
Demand for operational, technical, and managerial skills in the industry will continue to grow, as will demand for workers with practical job skills. It will need a workforce skilled in technical and management. These longer term requirements for education, training, and development should be for commercial future.
Compared to international best practice, staffing levels are generally too high. This results from poor practices as well as insufficient training.
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BENEFITS OF IMPROVED PRODUCTIVITY
Increased
Reduction in
Volume of outputs Lead times Number of late deliveries Number of machine breakdowns Absenteeism Improved Employee turnover Quality of products Overtime Customer service Cost per minute Safety Housekeeping Flexibility of workforce Technology Skilled middle management and operators Volume of rejects
Volume of rework
HIGHER PROFITS
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ABBREVIATIONS
AVG. BN$ / Billion USD GGT HT technology MIS NPO QC SOP SPC SWOT WTO WWTP Waste Water Treatment Plant World Trade Organization Strength, Weaknesses, Opportunities and Threats Statistical Process Control Standard Operating Procedure Quality Control National Productivity Organization Management Information System High Temperature Technology Garment Gerber Technology Billion US Dollars
Average
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ANNEXURES
Annexures are attached separately due to the confidentiality agreement with the beneficiaries, which include following documents;
Detailed Data Information Reports Sewing, Industrial Engineering & Maintenance ... Annex-1 Dyeing/Finishing, Knitting & Laundry .... Annex-2
International Benchmarks . Annex-3
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