SAMADHAN

SCEE
DTU
Brochure for
Samadhan’20
Society for Civil and Environmental Engineers Delhi Technological University

About SCEE

Society for Civil and Environmental Engineers is one of the oldest

Samadhan 2020 is the annual case study competition organized by SCEE. The event
is a multi-round competition which lasts 2 days and receives participation from
colleges all over India. This year due to a medical emergency caused by rise of
COVID-19, Samadhan is being organized online. SCEE-DTU wishes all the participants
luck for their performance.

Event Schedule
Registration: 23rd March to 28th March 6 PM
Prelims: 29th March 6 PM
Finals 30th March

Case for Prelims would be sent to the registered Email address within 24 hours of registration.
The participating team is supposed to send a mail to the registered email ID with a PDF of
solution attached within prescribed time limit to ensure that his candidature is still active.

The solution PDF must have the Participant Names, Phone Numbers, Email Ids and College
Name(s)
Any assumptions made must be clearly stated and justified. Any calculations (if used) must be
shown.
For any further query, feel free to write to [email protected]

.
The room bore all the hallmarks of a long meeting. The Fabritex management team relaxed in their chairs.
Empty coffee cups patterned the board-room table. Not for the first time Charles Franklin, the company CEO,
reflected on the quality of the business-based discussions and the noticeable financial improvements over the last
18 months.
“Well I think we're agreed. Next year well target Pearl wear as one of our major areas for sales growth.'
Charles glanced around and got the nods of approval he was anticipating. Good. However, before we finish for
today, let us review the issues around how we will grow our share of the Pearl wear business. Charles looked
towards his sales and marketing director. 'Perhaps you can start us oil, John.”
BACKGROUND
Fabritex is part of the Wardman Group which manufactures a range of textiles for a wide variety of fashion and
industrial applications, as well as having interests in engineering, furniture and finishing. Because of Intense
competition from Southeast Asia, particularly on price, the UK textile industry had undergone major
reorganization and much of the overcapacity in the sector had now been squeezed out. Fabritex focuses on
knitted fabrics for garment manufacturers, mainly for lingerie. These customers in turn sell either to major
retailers or through independent outlets. Some of the garment manufacturers sell under their own brand name but
many are making products to retailers' specifications to be sold under a retailer's own name. Much of the
development of new fabrics is done by manufacturers like Fabritex or even prompted by suggestions from raw
material suppliers. Fabritex believes its strength lies in developing innovative fabrics that look good and perform
well technically. Even when customers like a supplier's new fabric design, this does not guarantee that supplier
all its business, particularly over the longer term. It is common for customers to show designs to their other
suppliers, with the Intention of dual or triple sourcing, a commercial practice accepted within the industry. The
life of a particular fabric can vary widely from a few months to several years. It all depends on the popularity of
the material with the final consumer. As part of the fashion industry, the search for a new and different feel or
look is a constant task, essential to a company's future growth and prosperity. After a struggle in the early days to
become profit-able, Fabritex has increased profits to the point where it is above average for the Group. Sales at
£45 million have grown rapidly in the last two years and similar growth levels are forecast over the next few
years. The management team believes that the basic operations capability is in place which will underpin the
continued sales growth. This view has the support of the Group but funds for invest-ment are limited and
Fabritex still has to demonstrate that it can outperform its competition rather than just hold its own.
MARKETING
Fabritex regards its market as a number of distinct segments that reflect differences in product, geog-raphy and
type of customer. Customers are described as 'branded', selling under their own product name, or 'nonbrandecr.
Customers are also grouped by garment type and divided into lingerie arid outerwear (see Exhibit 1) and they
can appear in several segments. The product distinction relates to the way the fabric is knitted, either warp or
weft. Many segments have a degree of seasonality associated with the type of garment in which the fabric is
used. If a garment is well received, repeat orders for fabrics may come very quickly. Consequently, forward
demand is not easy to predict, particularly for new fabrics.
SEGMENT Current Year Sub Total Next Year Subtotal
Forecast in €M Forecast in €M
UK Lingerie 15.9 19.5
warp Knit
Branded 12.3 15.9
Non-Branded 3.6 3.6
UK Lingerie weft 16.2 16.5
Knit
Branded 15.3 15.6
Non-branded 0.9 0.9
Export Lingerie 5.4 6.3
Warp Knit
Branded 6.4 6.3
Non-branded 0.0 0.0
Responding to Charles Franklin’s request, John Watson (the sales and the marketing director) pulled himself forward,
shuffled through the pile of papers in front of him and began:
“The segment in which we have chosen to grow is UK lingerie warp knit which currently generates £15.9 million sales,
about 35 per cent of our total sales revenue. Within this segment Pearlwear sales total £4.2 million. As you am aware,
Pearl-wear is a premium company with an internationally recognized brand name with manufacturing plants in Europe
and Southeast Asia. Pearlwear sales and its share of its markets are both growing. Where it places those additional sales
and grows capacity is in part, as you would expect, related to the performance of its manufacturing plants. Initially we
intend to grow our share with Pearlwear's UK factory, which we estimate to place purchase orders to the value of some
£30 million, of which we have only £4.2 million, or 14 per cent. The opportunity to grow is, therefore, realistic.
The Pearlwear brand name is key in selling its products and that has implications for us. We have to remain competitive
on price to avoid losing share but the name of the game is conformance quality. If we have any significant problems with
meeting the specification of our fabrics, then Pearlwear will take its business elsewhere.
So far our two companies have worked well together over a number of years and we appear to have a good understanding
of its requirements. Also, the manage-ment team at Pearlwear's UK plant is committed to devel-oping sound customer-
supplier relations. And this is by no means a lip service statement. Pearlwear is keen to discuss problems and has, on a
number of occasions, cooperated on changes that have affected the way both companies work. If we are proactive in those
developments, we will undoubtedly be able to grow our shares next year. Pearlwear currently splits its business between
three or four main suppliers. Some fabrics are allocated to only one company for the life of the fabric and some are
ordered from two or more suppliers. Pearlwear seems to be happy with its current suppliers and overall share has not
changed much, even though demand from the UK plant has increased significantly over the last five years. We continue,
however, to be very much the minority supplier; taking about 14 per cent of Pearl-wear's total business.
Where we are the sole supplier for a fabric, Pearl-wear is absolutely dependent on us. The annual sales from these 'sole
supplier' fabrics are £2.7 million and should grow by about 10 per cent next year. Responding to shod lead times on sales
orders is important but even more crucial is meeting our promises on delivery. Nothing gets Pearl-wear more upset than
having to reorganize its production schedules due to missing agreed delivery promises.”
John paused for a sip of cold coffee and noticed the wry look from Mike Stewart, the operations director, after his last
comment. Mike said:
“We do recognize the delivery issue, John, but from an operations point of view the pattern of orders is very
unpredictable. Some of these fabrics have regular orders. Demand for other fabrics keeps going over time but we never
know when we will see the next order. This affects our response, for example on raw material inventory. And short runs
do reduce our capacity due to changeover losses.”
John Watson nodded and continued:
“When Pearlwear sources a fabric from two or more suppliers, the company that wins the lion's share is usually the one
that can supply to the shortest promise date for an initial order. Of course, thereafter a supplier must hit its delivery
promises consistently. Failure to deliver on time can affect our share of jointly sourced products. Mike's point about a mix
of regular and irregular orders applies to these fabrics as well, although probably to a lesser extent
Price can also influence the volume split when a fabric is running regularly with joint suppliers. At
the moment l estimate Pearlwear total purchases of fabrics that are shared by two or more suppliers are £5.1 million per
annum and we have 30 per cent of this. The spending should grow by 10 percent next year: The fabrics that are only
sourced from one of our competitors constitute the biggest part of Pearl-wear's annual purchases at £22.2 million. Some
of these fabrics are reaching the end of their life cycle and I think purchases in this category will decline next year;
perhaps to £20.4 million. If we are selective then may be opportunities on the higher volume fabrics to become a second
supplier: The attraction to Pearlwear would be to gain more insurance on obtaining short delivery lead times. The usual
reason we do not have a share is that we have not provided the design and performance characteristics of particular
fabrics for which Pearlwear is looking. On occasions we believe we can but we have not been close enough to
Pearlwear's designers to convince them that we have the technical know-how. Designers have their favorite suppliers, for
whatever reason, so cultivating that relationship is important. So, the way forward is to carefully target some fabrics and
get our technical people working closely with theirs.
Also, we may have to sweeten our move a bit on price to get them through the hassle of approving us. My initial
assessment suggests that next year; if we really go for it, we could gain perhaps 7 percent of the sales that currently go
solely to one of our competitors. But it will mean allocating a special team in the technical department to this end. Finally
we need to consider new fabrics. Next year about £1.2 million of Pearlwear is purchases will come from fabrics currently
under develop-ment. The value of these fabrics can grow substan-tially in later years if they include some real winners. To
get our slice of this business (we should be looking at halt), the criteria are the same as those we have just considered.
Bret, the fabrics must look good and perform well. Second, if the designer is sympathetic to Fabritex and works with us on
the development, clearly we have a better chance of supplying a production fabric. And on some, attractive prices can
then help tip the balance.”
John paused and looked round his colleagues.
“If we can achieve all those objectives, we will take a quarter of the Pearlwear business in the UK lingerie warp knit
segment. And that accounts for most of the growth required in our overall business forecast.”
Charles Franklin thanked John for his clear over-view of the position and asked him to circulate a statement to everyone.
He then turned to his operations director.
“Also, Mike, I would like you to tell us how we are performing against the operations issues raised. After that we can start
to review the technical situation.”
The basic manufacturing task is knitting the fabric and then dyeing it. There are two knitting processes known as warp
and weft. They use different machine types, giving different fabric characteristics. The dyeing is done at another plant in
the group located 12 miles away. Part of the dye plant is dedicated to Fabritex's requirements, with the remaining capacity
being used to process fabric from other customers outside the Wardman Group. A fabric is described by the specification
that identifies the knitted fabric and the 'shade' that results from dyeing. Knitting times for fabrics vary substantially.
Some typical knitting times for Pearlwear orders are shown in Exhibit 2. The knitting machines require skilled staff
support to complete a set-up on a fabric change. Set-up or changeover times for warp knitting average four hours. (A set-
up or changeover is where the required quantity for one fabric is completed, the machine is stopped and then reset to make
the next fabric. During this set-up or changeover, no saleable output is produced.) The knitting machines are manned over
three shifts covering 24 hours per day, five days per week. Over-time at weekends is commonly worked to supplement
capacity.
Knitted fabric is called greige and is held in store until the required batch size for dyeing has been reached. No two
knitting machines produce exactly the same fabric so dye batches unique to a knitting machine are usually accumulated
before dyeing is commenced. The dyeing process determines the shade of a fabric. Setting up the process consists of
loading the greige onto beams, which is done offline, and loading the beams onto the machine which only takes about 20
minutes. Some colour sequences require the dyeing machine to be cleaned before use which takes another two hours.
Typical dye times are seven hours for white and nine hours for coloured shades but about 10 per cent of dyed fabrics are
unsatisfactory and have to be reduced. These times include an overall allowance for cleaning where necessary. The dye
plant works a basic 24 hours per day for four days per week. Four dyeing units are used solely for Fabritex work. The
dyed fabric is shipped back to the knitting plant where it is inspected and finished before delivery to the customer. On
average this takes about six days. For new or difficult fabrics the customer may require a sample of the fabric before
approval is given for delivery. Fabrics are normally made to order. On receipt of a customer enquiry a promise date is
given based on knowledge of the fabric, raw material availability and current knitting loads. The scheduling system is
based on actual times for completing past orders. When a customer places an order, it is scheduled on the system. Losses
in the knitting and dyeing processes can be high and unpre-dictable, and the volume of the final fabric is unlikely to match
exactly the order quantity. Some key customers place orders for greige stock prior to orders for final fabrics. Marketing is
also allowed to place orders for greige stock to cover special situations agreed by the management team. An example
would be in anticipation of a large order where the required knitting capacity would mean an unacceptably long lead time
to the customer. If marketing misread the situation, Fabritex can end up with unwanted greige stock to be gradually
disposed of at lower prices.
“I have a lot of confidence in the group of people sitting round this table and in the people out there working for us. We
have done well in recent years in growing the business. Now is the time to be ambi-tious. Now is the time to build on our
success and deliver a further big increase in sales revenue. We can show the Wardman Group that Fabritex is the place in
which to invest for the future. Peadwear is a major customer and represents a big opportunity. Our two companies have
developed together over a number of years. We know the people in Peadwear and the way they like to do business. •
Competition for the Peadwear business is and will continue to be tough. But it is time we moved from being a minority
supplier Our target must be to secure half the Peadwear business. We have to do this by improving our communications
at all levels and by fast and reliable response to their orders. We currently have the manufacturing capacity to respond.
This way we can drive the sales revenue from the current E4m to something close to. £15m.”
PROBLEM STATEMENT
You have been appointed as the Lead consultant to
Fabritex for handling the growth and expansion
opportunity for the company. The company has
approached you to help them to prepare a strategy to
resolve all the problems they are facing and also need
your suggestions on:

 Strategy to increase market share.