Production Planning and Control

Arvind Mills Ltd.

Ananda Dasgupta (D011) Narasimha Irukuvarjula (D022) Ninad Lele (D035) Sudeep Ojha (D044) Srinivas PV (D048)

Indian Textile Industry Overview 2013

Textile sector contributes 14% to industrial production and 4% to GDP

Accounts for 17% of export earnings

Provides direct employment to over 35 million people

Projected to increase its textile share from its current 4.5% to 8% by 2020

Potential size of Indian textile industry is expected to reach US$ 221 billion by 2021
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Opportunities in Textile
The textile industry has witnessed a sharp increase in investment during the last five years The industry attracted FDI worth $1.04 billion from 2000 till November 2012 The textiles industry complements the growth of several institutions and industries such as defense forces, railways and government hospitals who are key buyers This market is likely to grow to $31 billion by 2020 with a CAGR of 10% The 11th Five Year Plan outlay for textiles has been fixed at $2.91 Billion, up 4 times from the 10th Five Year Plan outlay of $0.74 Billion
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Value Chain In The Textile Industry

Arvind Mills Ltd.

Founded in 1931 with the aim of manufacturing the high-end superfine fabrics

Worlds largest denim producer at 110 million meters per annum

13% market in India 50% market share in leading domestic and international brands Domestic and international brands manufactured and sold by Arvind Brands and Retail Ltd. License Brands Arrow , US Polo, Gant, Nautica, Izod, Elle, Hanes, EdHardy Retail Brands Debenhams, Next, Megamart, Arvind Store, Club America JV Tommy Hilfiger Owned Brands Flying Machine, Excalibur, Newport University, Ruggers, Colt, Karigari

Business Strategy
Purchase Domestic and international brands licenses (to manufacture, market and sell in India)

Building several Power brands, while leveraging the strengths of developing other brands

Strong supply chain and logistics practices

Build its own retail chain (MegaMart) while increasing reach to expand growth brands
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Forecasting
Historic al Sales Data Branch Sales Experts Forecast

Bids Results

Horizon of forecast

Multiple Regression Analysis Extrapolative Forecasting

Forecast

Reports Contains 1. Forecast Reports 2. Comparative Results 3. Graphical Representation of Short, Medium, Long Range Forecast

Product Flow

Information Flow

PROCESS DIAGRAM

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CHALLENGES IN PRODUCTION PLANNING

Bargaining power of consumers Rapidly changing styles Shorter lead times - sources of competitive advantage

Fragmented and informal industry

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PRODUCTION PLANNING AT Arvind Mills

Not Approved

Buyer requirements

Design

Goes to the customer for approval

Marketing dept. generates sale order with delivery date

Quality Control

Routing and scheduling

Planning of work

Planning of raw materials

Production Planning and Control

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Sampling Process at Arvind Mills

Two types of samples Solid Color and printing

Quality Measures while sampling

Chemical Lab for research work and ensuring quality of the cloth

Prototype of manufacturing process carried inside the lab

Physical lab for checking the physical properties of the material
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MANUFACTURING PROCESS AT Arvind Mills

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Manufacturing Process at Arvind Mills

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PRODUCTION PLANNING AND CONTROL AT Arvind Mills

Production Planning and Control at Arvind Mills Production planning Functions Planning Routing Scheduling Loading Dispatching Following Up Inspection
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Production control

KEY PERFORMANCE INDICATORS @ Arvind Mills

Delivery on Time Productivity Improvement Improvement of Equipment Efficiency Reduce WIP Reduce Overheads Reduce Obsolescence Improving the Bottleneck Stages
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ERP IN ARVIND MILLS

Planning Scheduling Inventory Control Production Costing Order Code Generattion

Shop Floor Management

Inspection of Raw Material and Finished Products Purchasing Generating Bill of Materials for Specific orders
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Material Requirement Planning

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Optimized Production Technology

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Job allocation and scheduling sheet

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Controlling For Production Deviation

Made-to-order production Constant demand year-on-year Majority customers are international players ~ 90% Fixed seasonal demand cycle Stringent quality specifications Local customer base ~ 10% No fashion cycle Small order size Relaxed quality specifications

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Controlling For Production Deviation

Two types of production deviations
Problems in production at a plant
Balance job transferred to another plant

Vendor default
Identifying back-up vendor through Vendor Managed System

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Supply Chain Problem

Forward Logistics
Arvind Warehouse/Storage area Distribution centers Independent retailers Weak points Quality of forecast is not reliable for independent retailers Bullwhip effect a major constraint in forecasting Transportation to independent retailers for DSD (Direct Store Delivery) is complex Labour Intensive Orders are mix of different sizes, colours and quality Inaccurate inventory due to theft at warehouse and DC

Reverse Logistics
Customers Independent Retailers DC Arvind Weak points Discrepancy between physical flow of the back order and the inventory management system Difficulty in tracking the back orders
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INTEGRATING VENDORS IN PPC

Types of Vendors

Bulk Order Vendors (Arvind Brands)

Specialty Requirement Suppliers (low volume)

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INTEGRATING VENDORS IN PPC

Database of all vendors in ERP Order Placement, Product Receipt done locally at each plant Process Monitored by HQ team at Mumbai High Production Volumes
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Recommendations
Use of demand-forecasting for timely procurement of yarn Implementing PPC at Fabric making unit in order to remove idle time and manpower constraints Implement Vendor managed inventory model to cope with excessive inventory issues at DC (counter bullwhip effect) Implementation of RFID to control theft at the warehouse and DC level

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