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To minimise the loss incurred in a Garment export house due to the wastage and surplus production pieces. Executive Summary: Ready made garments, made of cotton and other natural fibers, constitutes a major portion of the total Indian Exports. In fact, garments manufactured in India are in good demand in Europe and other developed nations of the world. This is an Organization based project where I have tried to identify the major problem areas in a readymade garments Export house and suggest the organization appropriate methods and means to find a suitable solution to these problems in order to minimize their loss and gain maximum Cost benefit.
The aim of this project is to reduce the Fabric and Material wastage's along with the loss incurred by the Company due to the surplus production made to complete the total number of pieces in the Export order, in case there is some major defect in the final lot of the finished garment, which has to be replaced with the extra pieces produced to meet such contingencies. The Company, Ms. Front Page Exports is engaged in exporting readymade garments to Europe. It has an annual turnover of around Rs. 30 million. The Company has its in-house facilities for fabric Cutting, Dyeing, Washing & Pressing and other finishing activities. Fabrication or stitching of the Garments is done outside the Company at various fabrication units, where the garments are stitched at Piece-meal basis.
However, minor alterations are made at the export house either by the fabricators men or by the tailors hired by the company for Sampling and other in-house stitching jobs. Declaration: This project is wholly my own work except where other sources have been given specific credit. The Proposal for the Project: The main aim is: To minimize the loss in a garment export house by implementing the optimal utilization of the Wastage and profitable disposal of the surplus production policy, whereby - 1. Wastage in the form of small usable fabric cuttings can be identified and optimally utilized. 2. Formulating and suggesting alternate ways to utilize the material wastes and reduce the overheads. 3.
Utilize the waste material and surplus production to generate additional revenue for the organization by using it in other profitable businesses. 4. Finding other profitable channels to sell and clear the surplus production to minimize the loss. The main objectives are to: 1. Reduce wastage. 2. Extract maximum profits. 3. Reduce overheads. 4.
Extract revenue from appropriate disposal of surplus production to gain maximum cost benefit. 5. Optimize resources to achieve efficient and profitable results. Action Plan: 1. Visit the factory premises to determine the existing procedures and amount of wastage. 2.
Analyze the prevailing thinking procedures. 3. Identify the best practice in the same industry. 4. Evaluate the cost of alternatives. 5. Investigate the vital industry standards and procedures. 6. Formulate the best processes to utilize the wastes. 7. Investigate various alternatives to extract maximum revenue from selling the surplus pieces. 8.
Design a cost benefit plan. The identification of the problem: The major problem in this Export house is the overhead incurred during the manufacturing process, of which the wastage in the form of small fabric strips cut during the cutting phase, is enormous. Other areas of wastage and overheads are the rejections due to the dyeing and printing defects. Another big problem faced by this organization is of optimally selling the surplus pieces produced to cover the rejections which are incurred after checking the finished product. This surplus production is generally 5 % of the total number of pieces in each style.
If there are not many rejections in the final product, these excess pieces lie as waste and idle stock in the store room to either rot or be used by the workers for their personal use and other odd purposes, after the shipment has been sent. The small pieces of cloth approximately less than a meter are wastes for the company, which is produced during the cutting of the fabric and is generally unavoidable. These small pieces are nothing but a dump and a visible overhead for the company. All these wastage's sum up to be a large amount of loss for the company, which can be controlled and reduced when subjected to other beneficial and profitable alternatives.
Current Scenario in the Company: As mentioned earlier the company is incurring a heavy loss due to the wastage and dumping of the surplus pieces. And although the company is aware of this unnecessary overhead but so far nothing has been done in this regard. What the company has been doing till today is that, either the small pieces mostly up to one meter are dumped in a corner to rot and unnecessarily occupy space or are sold to the Scrap vendors (Kabadis) on weighing (i. e. Rs. per Kg. ) basis.
Selling of the small strips to the Scrap dealers results in almost a complete loss for the company on the fabric which costs much more than what is received for it (less than one tenth of actual cost per meter), and also some large pieces of two to five meters are also disposed off on the similar basis, due to their small meter defects. The surplus pieces are also dumped and lie idle to be eaten by the insects and rot. These pieces are absolutely fine or have some very very minor defects. Thus they not only occupy the valuable space but are also a net loss for the company. These surplus pieces have either been used by the company workers or are used by the companys owner for giving gifts or other personal uses. To summarize, it is observed that in spite of being aware of this unnecessary overheads and loss, the company has taken no action to avert these problems and have continued to lose on its profits.
Identification of the best practice in a similar industry: The best practice in the similar industry has been identified to be followed by another big Export house namely, Ace Fashions. This company has formulated other well designed plans to convert this loss due to the wastage and surplus production into saleable commodities to yield good profits for the company. They have undertaken the following activities to reduce these overheads and convert them into additional profits for the company: 1. The company manufactures matching scarves from the fabric cuttings of 2 5 meters. 2. These cutting wastes from the printed fabrics are creatively used as appliqu work on plain dresses to make them look more attractive and make optimum utilization of the wastage. 3. These small strips of cloth are used for piping, button plackets, facing of necklines and armholes, as they are not visible and therefore can be of any material or design.
This not only saves the cost of fresh material but also optimally utilizes the cutting waste. 4. These small fabric cuttings are sold to Bed sheets and Pillow cover manufacturers who design and make beautiful Bed sheets from their patchwork. 5. The company makes beautiful Ruffles or hair bands from these cloth cuttings and sells them in the market to earn revenue from the wastage. 6. They also manufacture colorful children garments by creatively using these pieces for patch work. 7. The company is selling its surplus production in the domestic market to several retail vendors, who are willing to buy in small quantity, large variety products for their retail outlets. 8. The company is dispatching packed shipments of these surplus production pieces to the countries in the Middle East, Africa and other small nations like Sri Lanka, Indonesia, Nepal, Bangladesh etc. , who are interested in such less quantity, large variety and cost effective products.
The company hereby under study should also pursue similar activities, what Ace Fashion has been doing to minimize their overheads and achieve maximum cost benefit. Research Methodology: This Organisation based project has been prepared by a progressive stepwise information collection according to the methods mentioned below: Identification of the problem and research objectives: The first step was to identify and define the problem in clear terms, i. e. neither too broad nor too wide, with respect to the company. Therefore the problem as also mentioned earlier is: - to determine the amount of wastage in the company and find appropriate methods to optimally utilize this wastage. - to determine the loss incurred due to the surplus production and then find suitable ways to convert this loss into profits by selling them with good margins.
Formulating the Research plan: There is a need to design a suitable plan to proceed with the information collection phase as it is considered to be one of the most important factor for an efficient and effective progression of the entire project. I. Data Sources: Most of the data has been collected from the primary sources like the proprietor of the company, various operational managers, employees working in the company, fabricators to whom the stitching job is outsourced, the merchandiser of the company who deals with the company buyers, the fabric suppliers, retail vendors of the export surplus in the domestic market and managers in other Export houses. While some of the secondary sources for the information have been the Internet, Reference books and the reports printed by Apparel Export Promotion Council (AEPC). II. Research Methods: This refers to the ways in which the information has been collected.
The technique used here was of Observation, Surveys and Interviews. The Observation, Surveys and Interviews revealed the areas and processes where the waste is generated and then what is being done with this waste and surplus production. Market survey was conducted to find the market potential of the Export surplus production garments. III. Research instrument: Most of the information has been extracted by Informal Interviews or questions asked from the employees and the owner of the company. this could also be referred to as an unstructured questionnaire but most of the information was collected on the basis of self monitoring and a personal one to one basis of interview.
IV. Development of a Sampling Plan: The Sampling Unit was basically within the company premises. The Sampling size consisted of 25 - 30 employees including the managers and the owner of the company who were informally interviewed with respect to the problem in focus... V. Analyses of the information: The information has been analyzed considering the best practice in the industry as the benchmark and the methods followed by them to avert these problems which are not undertaken by the company in focus. Present the findings along with the solution to the problem: The findings have been presented in the form of a Flow chart depicting the origin and the disposal of the waste.
And the other parts are analyzed and presented along with the recommendations to achieve maximum cost benefit. Proposed Solution and recommendations for the company: As per the objectives of the project, a number of alternative solutions are hereby being proposed to tackle the problem and optimally utilize the waste material and dispose the surplus pieces to increase the revenues. The company can follow the practices undertaken by the company considered as the one implementing the best practices in the industry. Whose methods have already been mentioned earlier in the report (like (a) utilizing the waste fabric for necklines, armholes, button plackets etc. to save on the cost of fresh material, (b) dispatching less quantity, more variety and low cost packed shipments of surplus production pieces to small buyers and other developing countries, (c) selling the waste to Bed sheet and pillow cover manufacturers at appropriate prices, (d) utilizing the waste to manufacture children and other garments with appliqu work etc. ) Since the f...
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