Merchandising Practice in Apparel Industry

7/25/2019 Merchandising Practice in Apparel Industry

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3.5.MERCHANDISING PRACTICE IN APPAREL INDUSTRY

3.5.1.Definition Of Business Dee!o"#ent

Business development is such a process to develop the business by following couple of roles. In

a garments industry business is developing in two ways one is business development with oldcustomer and the other is business development with a new customer. The development ofbusiness starts from email correspondence. To develop business garments needs to follow orfulfill buyer requirements by giving creative high quality and cheap rate product.

3.5.$I#"o%t&n'e of Business Dee!o"#ent(

The importance of business development in garments industry is tremendously required. Such as:

To etail analysis of e!port "#$.

To %reparation of a time Schedule for the e!port "#$.

To $ollection#%rocurement of fabric &nd &ccessories for the garment to be e!port "#$.'Source( quality of items( cost of the items( receiving data of the items( quality andquantity( inspection of the items( etc.)

To istribution of responsibilities for the *ob and duties.

To %roduction plan.

To Inspection of the produced garments for quality( quantity( pac+ing and other

requirements of the buyer.

To %reparation of Ban+ing and shipment formalities.

3.5.3P%o'e)u%es of Business Dee!o"#ent:

,et starting a business anywhere is notoriously ris+y. -ore than half fail within the first fouryears. Significant hurdles( in particular( confront small businesses in inner cities:

It can be hard to attract capital.

Successfully managing a growing business requires a special set of s+ills that

relatively few people possess.

Businesses in these communities may have a hard time reaching mainstream mar+ets. ven when businesses get off the ground( they sometimes do not hire many individuals

from the immediate neighborhood( or they may not pay enough to support a family.

Because of the ris+s( organi/ations interested in increasing the income and assets of low0incomepeople sometimes ta+e a different approach( which might be called 1connecting to mainstreamemployment.2 3ere( community groups help residents acquire mar+etable s+ills( ta+e advantage


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of supportive services( and find transportation to *obs. But this approach can encounterchallenges as well. 4hen there are significant barriers to connecting to mainstream employment(small business development can be an attractive option.

3.5.*M&%+et An&!,sis4ith this e!ercise( the participants get what may be their first contact with a mar+et research.They elaborate and apply a questionnaire twice: first( they prepare a questionnaire to be tested byapplying it to their own colleagues in class. The participants tabulate the data gathered and ma+etheir own conclusions on this research. This stage will be processed to give the participantsfeedbac+. Then they will be as+ed to repeat this procedure( ma+ing the necessary ad*ustments inorder to interview the target group of a specific product. 5nce again( the data gathered will betabulated in order to generate valuable information about the product#mar+et. The trainerdetermines the sub*ect of both researches.

3.5.5Business M&n&-e#ent S+i!!s

-uch of what has been said up to now has dealt with the change process( how to stimulate it andreinforce it. ot much attention has been given to the technical aspects of business management.This is because our understanding of these s+ills is better and we have seen significant stepsmade in the development of programmed learning materials that are suitable for entrepreneurs.7ather than treating business s+ill development in a dry way situations are structured to combineactivity and learning with a certain amount of fun in order for participants to acquire the s+illsneeded to analyses their businesses. 3ours are spent in planning e!ercises( costing problems(information collection( financial analysis( and the preparation of business plans. -ost of thebusiness management training is conducted in a way which simulates the activity of blendingpersonal motivation and competence with opportunity identification and implementation. 4henparticipants are competent and confident about their own technical e!pertise in business they aremore able to convince investors( ban+ers( customers and suppliers( i.e. they are more li+ely tosucceed upon completion of the course.

3.5.P%o'u%e#ent of G&%#ent E/"o%t O%)e%

The most critical wor+ is the procurement of garment e!port order. ormally garments e!portorder is found fro( the potential garment importers called arment Buyer. &nybody wants tocollect garments e!port order( Should be able to convince The Buyer. 4hen The Buyer isconvinced about garment production( arment quality( garment costing and garment delivery#shipment ability of a garment e!port order. To convince the buyer it is better if u can visit his#heroffice in aboard with your produced some sample garments and company profile. ven it will bemore helpful( If u can invite and arrange the visit of your prospective buyer to your office(9actory to see production facility( %roduct quality( So that the buyer gets confidence about yourgarments e!port ability.


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4ithout clear confidence among buyer and e!porter from both sides may be a ris+y businessdeal. If a garment e!porter can continuously deal with only two or three buyer with buyerSatisfaction( it will be sufficient enough to run garment production and garment e!port businesssmoothly round the year.

3.5.0E/e'ution of G&%#ent E/"o%t O%)e%(

&fter receiving the garment e!port( without wasting any time. It is essential to prepare a time aschedule for the *obs to be done for safe e!ecution of the e!port order. The main *obs for thee!ecution of an e!port order as follows:

etail analysis of e!port "#$.

%reparation of a time Schedule for the e!port "#$.

$ollection#%rocurement of fabric &nd &ccessories for the garment to be e!port "#$.

'Source( quality of items( cost of the items( receiving data of the items( quality andquantity( inspection of the items( etc.)

istribution of responsibilities for the *ob and duties. %roduction plan.

Inspection of the produced garments for quality( quantity( pac+ing and other requirements

of the buyer.

%reparation of Ban+ing and shipment formalities.

$ontinuous follow0up of progress

5thers.

ormally one person called garments merchandiser is engaged and given responsibility for aparticular garment e!port order "#$.& garment merchandiser should monitor all the *obs related

to e!ecution of an e!port order. 3e#She should also maintain continuous liaison with the garmente!porter and garment e!port order.

%rocess of garment production quality with required quality level with in schedule time is themost important and critical *ob of the garment merchandiser( 3ence( through nowledge isessential for a garment merchandiser for successful e!ecution of the e!port order. 4ith thechange of time. owadays( arments quality became very important. To maintain the producedgarments with required quality level. It is essential to start from fiber( yarn( fabric( dyeing(printing( finishing( garment production( garment inspection and quality control( testing. armentwashing#dyeing( garment finishing( pac+ing etc .technical affairs. & brief discussion on thattechnical area is discussed systematically. To understand the discussion of the subsequent chapter

.Theoretical and practical cooperation of others may be helpful for easy understanding.

3.5.0Ne-oti&tion S+i!!s(

5ne of the most important s+ills a buyer and a seller must muster is the ability to negotiate. &smost high street fashion selling prices are very competitive. The greatest scope for improvingprofit in a product is the reduction of cost price. There are many factors that influence the final


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cost price of a product including fabric. arment construction( order volume( lead time( anddelivery terms. These particular issues are discussed in more detail throughout the boo+.egotiation is a process of communication and e!change through which the interested partiesma+e a series of demands and compromises; it involves the trading of benefits between parties.

The basic principal is to trade what is of low value to you but of greater value of the other party(thereby reducing the cost of success to you. 3owever the aim of a negotiation should be toensure that both parties are happy with the final outcome or agreement .otherwise one or theother will not continue to participate.

The old scenario of the retailer always winning and supplier always losing result in both partieseffectively losing. Traditionally( the dominant fashion retail groups have seen the availability oflarge number of supplies as a means of trading one off against another to achieve a cheaper costprice consequently many of the suppliers who lost out ceased to do business with those retailersagain. Short0time cost price gains resulted in short term relationships with many suppliers. 4iththe end result being a large unwieldy and diverse supplier base operating as efficiently as it

should.

3.5.T2e P%o'ess of Ne-oti&tion(

& Successful negotiation outcome does not generally occur through luc+. by following a clearprocess. The %rocess reflects the different levels of +nowledge of the sub*ect of egotiation(


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3.5.1P%e"&%&tion(

ffective preparation is also vital to successful communication. The %articular preparationrequired will vary according to the nature of meeting. But some factors are always important.-eeting should begin on time and follow a clear agenda with a realistic amount of time toaccommodate the wor+. 4here there is an e!isting relationship with a supplier( a file containingthe relevant notes and documentation relating to the orders should be read prior to the meetingand ta+en in for reference. Suppliers meeting are usually held in uncluttered or empty rooms oroffices to avoid any distraction from the business of the meeting. It is also usual there to be twopeople from buying in the meeting. So that buyer can have an ob*ective view point availablewhile personally involved in negotiation. It is essential that the buyer also has identified thema!imum and minimum positions that she will accept foe a range of factors including..

>. %roduct %rice

?. 5rder Si/e@. "ead0time

Offe%(

3aving identified where the respective positions lie between them. The buyer and Supplier $anma+e specific proposals to set the boundaries of the negotiation. It is unli+ely that many of theoffers initially made will end up being accepted. So both parties allow for some manoeuvre. Thisis the opportunity for the buyer to being trading what is of relatively low value for her but ofmore value to the supplier.

Dis'ussion(

The li+ely framewor+ of a final settlement will emerge in the discussion as each side probes theother and ma+es suggestions. &nswers to suggestions can be revealing. 4ith choice of words andtone signaling interest of reluctance and should be noted as potential bargaining material. Therewill be areas on which one side can move than more then the other and vice versa. It is importantfor the buyer to ma+e a note of which ones provide the greatest and least opportunities forfle!ibility( for the trade off later on in the negotiation.

3.5.11Counte% An) Reise) Offe%s(

This is the real bargaining where elements of the order( Such as numbers of Anits( productdetails( lead0time and so on( are being decided in the conte!t of an overall cost price. The Buyershould ma+e firm proposals and be cautions of offering concessions unless she is getting one inreturn. The final elements that will pull the other entire variable together will be the cost price.

3.5.1$Su##&%ies(


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It is vital to summaries at +ey stages throughout the negotiation when significant points areagreed( to avoid losing early gains as to ensure that both parties understand each other. 4ith0somany potential variables included in the negotiation( small but significant points can be easilyforgotten unless there is a record of agreement throughout. 7ecords will also provide both sides

with an e!planation of how the deal was constructed should a particular variable becomecontentious at a later date.

3.5.13A-%ee &n) Co##it(

5nce the parties have agreed an order( they have no communicated the details to other functions.The supplier may need to boo+ production space( order fabric#trimmings and sourcelabels#tic+ets. The buyer will need to inform the merchandiser of the retail selling value of theorder so that a trac+ can be +ept on spending.

3.5.1*Definition Of Outsou%'in-(

In simple sense of view it means( to source something. But in apparel sense of view it means( theprocess of selecting suppliers for manufacturing and delivering products and their components.

3.5.1I#"o%t&n'e of outsou%'in-(

The importance of outsourcing in the apparel industry is beggar description. Successful sourcingin a fast moving apparel industry requires e!cellent planning and co0ordination. The importanceare given below:

To complete a garment based on buyer requirements.

To compare different supplier price list.

To review the past e!port order list capacity.

To visuali/e all orders and status of suppliers for availability of information.

Improved communication and coordination with suppliers( to improved Con timeC

delivery performance.

To reduce lead times through improved control.

3.5.10T,"es Of Outsou%'in-(ormally there are two types of outsourcing. Such as:

>. "ocal outsourcing?. International outsourcing


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>. Lo'&! outsou%'in-: 4hen the sourcing comes from local area called local outsourcing.4hich is also two types:

I. st

time than he needs to recollect that samples from supplier by developing based on buyerrequirements.

7&4%i'(

4hen fabric needs to buy garments representative should be approved from buyer. Beforebuying raw material some analysis should be done from supplier and their company profile(past e!port order( present e!port order process( capacity and main important part of price andsome data. Before buying fabric garment should *udge also couple of things li+e fabriccharacteristics( lab dip sample test.

Y&%n(

4hen yarn needs to buy garments representative should be approved from buyer. Beforebuying raw material some analysis also should be done from supplier and collect theircompany profile( past e!port order( present e!port order process( capacity and main

important part of price and some data. To select the quality full yarn li+e: >. $omb yarn ?.$arded yarn.

A''esso%ies(

4hen accessories needs to buy garments representative should be approved from buyer.Before buying accessories some analysis also should be done from supplier and collect theircompany profile( past e!port order( present e!port order process( capacity and mainimportant part of price and some data.

Bu,e% No#in&te)(If sourcing process restricted by buyer called buyer nominated sourcing. Inthat case garments need not rechec+ or developed or approved his materials from buyer. In thiscase( it is buyer who ta+es the responsibility to develop or approved.

Inte%n&tion&! outsou%'in-(

To collect different countries e!port order.

To increase the business of new item with new buyer.


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To find new e!port oriented country.

To get some facility from .A( A.S.& $anada.

3.5.1M&%+et An&!,sis(

4ith this e!ercise( the participants get what may be their first contact with a mar+et research.They elaborate and apply a questionnaire twice: first( they prepare a questionnaire to be tested byapplying it to their own colleagues in class. The participants tabulate the data gathered and ma+etheir own conclusions on this research. This stage will be processed to give the participantsfeedbac+. Then they will be as+ed to repeat this procedure( ma+ing the necessary ad*ustments inorder to interview the target group of a specific product. 5nce again( the data gathered will betabulated in order to generate valuable information about the product#mar+et. The trainerdetermines the sub*ect of both researches.

Se!e'tion 8 Co#"&%e( &fter collecting data from varieties supplier then we should select coupleof supplier compare those supplier. Then we should call for meeting in office to negotiate

successfully.

P%i'e 'onfo%#&tion( &fter completing meeting then both parties agree with win win situation.

T2e P%o'ess of Ne-oti&tion(

& Successful negotiation outcome does not generally occur through luc+. by following a clearprocess. The %rocess reflects the different levels of +nowledge of the sub*ect of egotiation(


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about how to proceed when meeting a supplier. $losed questions can be used to generate specificresponses.

3.5.1Definition Of P%e9P!&nnin-(

It is the procedure followed in developing and designing a wor+ or production of a developing

and installing a proper layout or tools. It may be involved many functions of the organi/ation

and draws upon forecasting( product design( *igs and tool design( machine selection and

estimating to enable proper design to be made. In short( preplanning decides what shall be made

and how it shall be made.

In respective manufacture a large uneconomic output could be produced ifpreplanning

is omitted. It is also important in one of the operations such as setting up a new plant as

preplanning can identify and avoid probable costly errors.

Definition of P!&nnin-(

This stage decides where and when the product shall be made. It includes the sequencing

of operations vi/ outing and the time schedule for manufacturing vi/ scheduling. It also states

procedures for material planning and supplies( machine loading and deliveries. To perform as

functions properly it will need past records of performance and to control statistic which may

be obtained from pre0planning( cost control or progress.

Definition of Cont%o!(

This refers to the stage of ensuring that the planned action is in tact carried out. $ontrol

initiates the plan at the right time using dispatching and there after control ma+es appropriate

ad*ustments through progressing to ta+e care of any unforeseen circumstances

3.5.$Definition of P%o)u'tion P!&n(

%roduction planning means planning how production wor+ against an e!port order 'or an order)

will progress from starting at cutting section to finishing section. -a+ing realistic productionplan is very important because production wor+ must be conducted in such a way that deliveryand shipment of the goods may be effected with in the specified delivery date. So( totalproduction wor+ must be completed before the date of delivery of shipment.So a Schedule or a time table must be made for each section in respect of starting and finishingthe related *ob against a consignment. There should be a general time frame showing dates onwhich production will be commence and finish in each section.


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In ma+ing schedule for completion of a wor+ order( a production manger must ta+en in toaccount standard time( production target( learning time( in between process time( lot coefficientsetc. 3e must have the s+ills necessary to prepare a production plan or schedules.!ample:

3.5.$1T2e M&in O4:e'tie Of P%o)u'tion P!&n

>. To determine capacity of all manufacturing departments and to plan systematically

coordinated and related production activities within the scope of the enterprise to meet sales

requirements.

?. To translate orders received from sales department into orders on the wor+s department and

to ensure steady plans of production activities.

@. To find ways and means through which product manufacturing requirements such as

materials and their necessary constituents such may be available in right quality and quantity at

the right time.D. To coordinate a number of different department groups so that a fine balance of activities may

be maintained.

E. To promote fuller utili/ation of plants.

6. To assist labor towards right and greater earnings.F. To train staff in the effective performance of their duties

T,"es of P%o)u'tion P!&nnin-(

There are many types of production plan in apparel industry

aily %roduction plan

4ee+ly %roduction plan

-onthly production plan

etailed 5r 9actory %roduction %lan

,early %roduction plan

7&'to%, P%o)u'tion P!&n9

Based on the order plan of the factory( the factory manager arranges to chal+ out a month0 wise

production plan. Some production plan may very comprehensive. They show wee+ly production(daily production( inspection shipment dates so that production delivery of goods may beeffected *ust on time. So production plans are very important.

Ye&%!, P%o)u'tion P!&n(


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& company generally ma+es a pro*ection of wor+ that may be available throughout the wholeyear. This %ro*ection is made based on previous business e!perience( preliminary negotiationwith the customer. This pro*ection is necessary to ma+e yearly business forecast

enerally( the basic of production plan is monthly production plan by each product. The monthly

means one month for the ne!t. Asually we do establish the monthly plan two or three monthahead. This plan is only recognised as schedule one and not confirmed one. The reason why themonthly plan is popular is that the reports of the result of sale and inventory of products aregenerally reported in monthly base. The production plan is not necessary ma+ing it by monthlybasis. Sometime( it is ma+ing three or two month interval. It depends on the purpose of the plan.If the purchase plan is not clear for a month and it is clear to envisage three0month interval( thenthe plan is made by three months basis.In case of pro*ect( which means establishing production plan with assumption of sales(modifying original plan is to be a fewer time( if the planning cycle is shorter. Then wee+lyproduction plan is necessary to consider. 3owever( if monthly plan is underta+ing well( we donot need to establish a wee+ly plan. The duration of the production plan depends on whether we

can produce the products according the original plan without much modification.4hen we have discrepancy between sales forecast and production results( we need to correct theplan in the middle of the month or to ma+e a confirmed wee+ly plan for the ne!t wee+.stablishing a wee+ly plan is easy thin+ing about production plan in wee+end. 3owever( thewee+ly plan is not convenient( when we compare with the monthly plan. aily production plan iscorrect( which can be applied to any interval plan( such as( wee+ly( monthly( and quarterly.In any case( the important factors for establishing production plan are planning cycle( duration ofthe plan( +ind of and unit of the plan. &ll of these factors are decided according to type ofindustry( type of operation( order entry performance( and type of production. 4e must rememberthat production plan indicates us what action is necessary for proper production.5ther important factor to consider about production plan is that the most important persons ofproduction plan are people wor+ing in operation site. %eople ma+ing production plan aresupporting staff for production. It is a tendency that planning staff are apt to consider that theyare main players. Then they are apt to compel to operation site to observe their made originalplan. This idea is very wrong.The other problem for production plan is modification. The condition of operation is variedaccording to operational and mar+et condition. Then planning section staffs are busy to correcttheir original plan to be fit for the actual wor+ing condition. 5nce they have corrected the plan(then they request operation site to observe the modified plan. The operation site people shouldobserve the production plan. 3owever( if they must receive modified plan so frequently( they arefed up to receive the modification. This problem is caused by planning staff. They recognise thatthey are directing operation. This idea is also wrong; the main actor for production is peoplewor+ing in operation site. %lanning staffs should correct all relevant information and analysis thereason of present discrepancy against original plan( through dialogue with staff and wor+ers inoperation site. %lanning staff should consider that they must serve their wor+ to all peoplewor+ing in operation site.

3.5.$$P%o'e)u%e of "%o)u'tion P!&n


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4hen an order has received( we must chec+ the stoc+ of products. If we have the stoc+( we candeliver it to the customer. If we do not have a stoc+ or stoc+ level shows below standard( weneed to direct to produce the product. The manager should give instruction for production. Thisprocedure is carried out in a case of big component. 3owever( parts consist of the componentusually produced a few months ago before assemble wor+ of the component. &ccordingly(

usually instruction of production is made by demand forecast or sales plan( which was made bysales department or agents of the enterprise. 9or sales plan( we must remember that generally(sales plan is far from actual sales. %eople in sales department are apt to ma+e their sales planoptimistically. It is often happened that their forecast in their sales plan is not correct( thus ma+esresult obliging a modification of production plan. Therefore( stoc+ plan of parts indicates muchaccurate forecast. &s such( parts stoc+ plan represents in substance as production plan.In case of producing spare parts( which is carrying out by stoc+ production with forecast oforders from mar+et( the numbering system is adopted. The parts with being put on number areplaced by order or are issued production order according to where the parts are to be produced.5nce( the production instruction comes to the production line( the line manager or supervisordelivers the instruction to all concerned people for production in the wor+ing place.

%roduction:

%roduction System

-achine lay0out

&pparel %roduction System

9inishing room -anagement

3.5.$3P%o)u'tion S,ste#(

%roduction system is the design process by which elements are transformed into useful products.E/"!es of P%o)u'tion s,ste#9

There are different types of goods required by people and society. 5ne type in the consumergoods( such as( rice( wheat( tea( bread( pulse( clothing=s shoes( etc. They have a continuousdemand and are continuously required. & bread factory may ma+e a survey as to the demand ofbread in a certain locality and start production of bread in that area based on potential mar+et ofbread that the survey discovered. This is an e!ample of production based on forecasting.

There may be another e!ample. & mechanical wor+shop has the potential to produce differenttypes of mechanical spears. There is a railway head quarter in the vicinity and it has demand forspears from the railway office. In such case( the wor+shop may start production of nuts for therailway. Such production may be called order0based production.

The other option is that the ba+ery may launch production of different types of bread( biscuitsand candy in limited quantity( because( its survey may have indicated that the people in the areahave diverse taste and they have a tendency to purchase different types of ba+ery and biscuits.Thus it appears that a factory may produce one or limited types of products on large scale or avariety of products in limited scale. Thus a company may start production of goods based onsurvey of mar+et and forecasting or based on order receive from some vendors or customers.


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In)ii)u&! P%o)u'tion s,ste#9

This system dictates small quantity of production of a large range of products. &s an e!ample( awor+shop may produce a variety of products li+e nuts( bolts( screws( shafts( gears( etc but eachitem in a limited quantity. & ba+ery may start production of bread in a limited or an individualscale in manual method of production to cater to the needs of a small number of customers.

Lot "%o)u'tion s,ste#0In this system products are produced in medium quantity in a medium range of items. Thissystem may use universal as well as semi0automatic type of machines to cater to the needs ofproduction. "ot production systems are found to use electro0mechanical type of traditionalmachines.

Continuous o% #&ss s'&!e "%o)u'tion s,ste#0In this system( one or a limited range of products are produced on mass scale. 9or e!ample( awor+shop may engage its machinery for production of screw or nut bolts only. In such systemspeciali/ed special purpose machinery are generally used. & ba+ery may use automatic breadma+ing production line( which can produce only half0pound one0pound bread only.

O4:e'tie of 7&4%i' Cuttin-9

>. To separate the parts of garments from the lays of fabric which are laid as per dimensionof the mar+er.

?. To get the accurate shape of the components of a garment.@. To ma+e the garments parts ready for sewing.

;o%+ se. esign pattern of all parts of garments.?. rade pattern of other si/es.@. -a+e mar+er for the best cutting efficiency.D. Spread fabric on the cutting table.E. -a+e a right lay.6. -a+e an economic cut order plan.F. $ut fabric as per lay plan waste control.8. umber cut parts bundle the

3.5.$5P%o:e't P!&nnin- An) P%e"!&nnin-(

Before starting every pro*ect its planning is done. %lanning a pro*ect is a very important

tas+ and should be ta+en up with great care as the efficiency of the whole pro*ect largely depends

upon its planning. 4hile planning a pro*ect each and every detail should be wor+ed out in

anticipation and should be considered carefully considering all the relevant provisions in

advance. %ro*ect planning consists of the following important steps.


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-ar+et Survey :

-ar+et survey in a broad sense( is a commercial survey for the suitability of business it

provides necessary statistics helpful for forecasting planning pro*ect.

%ro*ect $apacity :

$apacity of the pro*ect must be decided considering the amount of money which can be invested

for particular type of product and how the money which can be invested for a particular type of

product and how the money can be arranged. 4hile deciding the capacity of the pro*ect(

following factors must be considered.

i) emand of the product in the mar+et.

ii) Guantity of power( water( land and raw material available.

iii) ature of product.

iv) Investment capacity.

Selection of Site :

4hile selecting the site( technical( commercial and financial aspects should thoroughly be

considered. Site should be selected in two states; in first stage general location for factory

should be selected in this location. Important factors to be considered for the selection of site.

i) eneral location of the factory.

ii) Selection of e!act site.

%lant "ayout :

5ne of the most important aspects of production system design is layout of facilities primary

ob*ect of these is to optimi/e the arrangements 1 D m=s2 and supporting services.

esign and rawing:

&fter deciding the product its detailed drawing are prepared so that no doubt is left for future.etailed specifications for raw materials and finished product should be decided carefully alongwith the specification of the machines required for their manufacture.

-aterial requirement :

The list of materials required for manufacture is prepared from the engineering drawings.

This list is +nown as 1Bill of materials2 part list2.

5peration %lanning:

4or+ of this is to select the best method of manufacturing( so that the wastage of material(

labor( machine and time can be eliminated( to have more production with less fatigue. This

wor+ is done in two phases( namely. -ethod study is conducted to eliminate the wastage due to

ill directed and inefficient motions. Time study is the e!act estimation of time and is very essential

for correct pricing.


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-achine loading :

umber of machines to be installed in a plant should be decided very carefully while planning(

proper care should be ta+en to find out the machining time for each operation as correct as

possible( so that arrangement for full utili/ation of machines can be made and machines

loading program is prepared accordingly.

Sub0contract consideration :

4ith the development of technology and speciali/ation( it is difficult to manufacture all the

components in the same factory( due to fact that speciali/ed machines plants and wor+ers.

The decision about particular item( whether to purchase or to manufacture( is ta+en by planning

department after ma+ing a through study of the relative merits and demerits.

quipment 7equirement:

&fter +nowing the number of equipments( their accessories and tools required( cost data can be

collected to give and idea of capital requirement.

5rgani/ational "ayout and staff 7equirement:

"ayout of organi/ation is decided by considering the nature of wor+( type of industry si/e of

industry( etc and in line of above the stalls are appointed.

-aterial 3andling:

The material handling problems must be studied before the erection of the factory building and

plant layout.

Budgeting :

Budgeting is forecasting and preplanning for a particular future period using past e!perience

and mar+et trends.

3.5.$P%in'i"!es Of >&"&nese P%o)u'tion M&n&-e#ent

Hapanese management is shop floor0oriented management. Specifically( it has eight underlyingprinciples. They are as follows:

Custo#e% o%iente)

The management of Hapanese companies believes that customers are royalty( and +eeps in mind

that companies serve customers. In that sense( the companyCs ob*ective is to provide theirproducts and services for customers. The idea of product out no longer e!ists. 4ith theinformation age( the idea of mar+et in is the +ey for companies to survive.

To" #&n&-e#ent 'o##it#ent


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4or+ improvement through various activities such as TG$( HIT and any new wor+ing systemdeveloped in Hapan require total participation by all management and employees in the company.Top management cannot leave the activity to his#her subordinates. -anagement should ta+e theinitiative in leading the activity. motional commitment by top management is the +ey for thesuccess of any +ind of activity requiring total participation.

Tot&! &""%o&'2

$onsidering the above( any activities for wor+ improvement require total participation. If there isa problem( it must be analysed from all angles by all people concerned with the problem.Thin+ing about the situation by all concerned personnel is another +ey for successful wor+improvement.

S2o" f!oo% ?=o%+ f%ont@ o%iente)

Hapanese management thin+s that the shop floors themselves are the source of wor+

improvement. &ll management in Hapanese companies believe that the shop floor is a rich sourcefor wor+ improvement. They understand that profit can be created only from shop floors and notfrom their own offices. 4ho +now the shop floor bestJ &re they the directors or engineersJ o(they only +now shop floors superficially. The best persons to +now the shop floors in depth arethe people wor+ing there. They are the +ey personnel to solve the problems found in thewor+place. 4e must remember that shop floors are the ideal places to accomplish wor+improvement.

I)e&! t&%-ets

9or wor+ improvement( setting a target is crucial. 4e are apt to see+ a brea+through in wor+improvement. 3owever( if the target is a very ambitious one( it will be difficult to reach this goal.4e need to set our target to be more readily achieved. In that sense( the president of the company

should give his#her ideal target to his#her direct subordinates( normally directors( e!pressing thetarget in a broad sense. In responding to top managementCs target( all directors set their owntargets and show them to their subordinates( normally managers( by e!pressing also these targetsbroadly( but including some figures. In responding to the directorsC targets( all managers shouldma+e their own targets using figures concerning their own wor+. This procedure of settingtargets continues until all supervisors set their own targets with detailed figures of their wor+( sothat the target set by the president should be clarified thoroughly in all areas. ach target shouldbe readily achieved. 4e should not see+ a miraculous brea+through. 4e should remember thatachieving modest wor+ improvement would bring a remar+able tangible result for managementimprovement. 4e should +eep in our mind that( Today is better than yesterday and tomorrow willbe better than today.

PDCA ','!e

9or successful wor+ improvement and good maintenance to continue the result of this wor+improvement( we need to follow wor+ improvement techniques systematically. In that sense( the%$& cycle is useful. The cycle was invented by r. 4. . eming( and is called the emingcycle( a positive for management. Therefore( it is also called a management cycle. The cycle


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consists of four stages: '>) plan( '?) do( '@) chec+( and 'D) action. 4hen we wish to have wor+improvement( we should set a plan concerning how to solve the problem for this wor+improvement. Then we need to carry out the plan as a countermeasure for wor+ improvement.5nce we have started to carry out the plan( we should chec+ to see whether the countermeasureis effective for wor+ improvement or not. If the result is satisfactory( then we adopt the

countermeasure as a formal wor+ standard. To solve the problems perfectly( we need to setpermanent countermeasures. Hapanese companies rotate the %$& cycle every day at everywor+place. This is the basic process for wor+ improvement.

M&+in- use of si#"!e too!s

Since any wor+ improvement requires total participation by all employees in the company( allemployees should understand the basic idea of wor+ improvement. This is why we need a wor+improvement pro*ect. 5nce employees understand the philosophy of wor+ improvement( theycan implement wor+ improvement by themselves. To carry out a wor+ improvement pro*ect( they

need to use statistical methods. The methods should be simple and easy to apply to the actualwor+. The Hapanese invented seven G$ tools( which are easily understood and can be applied forpractical wor+ improvement. These seven simple G$ tools can solve more than KEL of theproblems that e!ist in wor+places. They are so simple and easy that everybody can use them fortheir wor+( thus achieving remar+able results. In that sense( simple is both beautiful andpowerful.

Hu#&n &s"e'ts

5ne of the characteristics of Hapanese management is human oriented management. Hapanese topmanagement believes that human resources are the most important asset for the company. Theybelieve that if they have enough capital( they can buy any number of sophisticated machines but

not human resources. 3uman resource development requires very patient application. 4e mustconsume much time and money to develop human resources. evertheless( the +ey forsuccessful wor+ improvement depends entirely on the capability of all employees in thecompany. In that sense( the human aspect is the most important element for wor+ improvement.

T2e B%o&) >o4 Des'%i"tion 8 7!e/i4!e Assi-n#ent

The Broad Hob escription 9le!ible &ssignment is probably the most essential factor ofHapanese wor+ing practices. Therefore( it is not surprising( that most Hapanese companiesoperating overseas persist in the introduction of this idea as a basic of their operation. 4ithout

the basic of Broad Hob escription( Hapanese companies simply cannot operate efficiently andeffectively.4ith the 4estern concept of management( the basic unit of an organisation is a *ob( which in turninvolves several tas+s. & *ob is evidently defined in the form of *ob description and it should notoverlap other *obs. The *ob then requires a person who can perform it satisfactorily and itdetermines how much a person should be paid. The *ob defines what is to be done and what mustnot be done.


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The theoretical *ob distribution within a unit or a division under the 4estern concept can beillustrated as & in 9ig. >0@ in the ne!t page. The actual coverage of the assigned *obs( however(may leave some responsibility gap as shown in B( mainly because *ob requirements do notnecessarily match the capabilities of the *obholders.In Hapanese companies( the concept of a *ob is different. 9irst( a *ob description is not as clear0cut

as with the 4estern concept( although each *ob specifies individual responsibility. Second( a *obin Hapanese companies includes both relatively narrow individual responsibility and considerablybroad common responsibility as is illustrated in $ of 9ig >0@.

A

THEORETICAL JOB ASSIGNMENT

WITH THE WESTERN CONCEPT

B

ACTUAL COVERAGE OF

ASSIGNED JOB

WITH THE WESTERN CONCEPT

C

JOB ASSIGNMENT

WITH THE JAPANESE CONCEPT

RESPONSIBILITY GAP COMMON RESPONSIBILITY

INDIVIDUAL RESPONSIBILITYINDIVIDUAL RESPONSIBILITY

DIFFERENCES IN JOB ASSIGNMENT

&n idea behind this loose *ob description in Hapanese companies is the Hapanese perception of therelationship between *obs and employees. In the 4estern companies( *obs determine the types ofpersonnel they need( then the company recruits a suitable person( while Hapanese companiesnormally recruit without specific assignments. This means that recruited employees do not +nowe!actly what *obs they will get. 4hen they *oin the company( they ta+e it for granted that theywill be transferred between *obs when the need arises. In other words( Hapanese companies fit*obs and organisation with e!isting personnel in these companies. In the 4estern companies(*obs come first and people come second( but in Hapanese companies( people come first and *obscome second.In addition( Hapanese companies consider that the overall performance of a unit or a division isbetter if people 'employees) wor+ as a group having both individual and common duties rather

than wor+ing as individuals with specific assignments. The Hapanese organisations operate on theassumption that employees are not necessarily matched to the *obs they perform. Instead(competent and e!perienced employees have to support their colleagues( who are less competentand e!perienced( in order to achieve the groupCs goal.&s a result( there is no clear border between *obs( over which people cannot cross. 5n thecontrary( management encourages employees to cover as much responsibility as possible( thusresulting in improved productivity through practices of group wor+. Ander such conditions( theassessment of wor+ results for each employee is as follows. 4hen an employeeCs *ob consists of


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both specified core duties and unspecified common duties( the employee can or has to do theseduties. 4hatever can be achieved within wor+ing hours is regarded as his or her *ob( regardlessof core or common duties.This has an important implication for *ob enlargement and enrichment. It is( however( not easy tounderta+e *ob enlargement in the 4estern countries. If a company tries to set up *ob enlargement(

it often meets resistance from employees and requests for an increase in pay( because a newassignment is added to a clear0cut *ob description( while an additional assignment does not ma+emuch difference for Hapanese employees as long as the whole assignment can be achieved withineight hours.&nother distinct difference observed in an organisation resulting from these different perceptionsof a *ob is that Hapanese companies tend to have fewer types of *obs compared with 4esterncompanies where more types of *obs are required due to a high level of specialisation. Thisdifference is important to understand Hapanese management. Hapanese companies do not needmuch coordination of their performance. 9ewer types of *obs require less coordination to getwor+ done while a large number of highly specialised *obs need a high level of coordination(sometimes difficult to attain.

$9$93 Te=o%+

Broad *ob description and fle!ible *ob assignment within organisations automatically requirespowerful teamwor+ among the members to carry out the tas+s assigned to a unit. 4hen a grouptas+ is divided into individual *obs without overlapping among them as in the 4esternorganisations( individual employees are solely responsible for accomplishing their tas+s andthere is little room for cooperative wor+. 5n the other hand( in Hapanese companies a group tas+is divided into individual duties as well as common duties where group efforts are required.The Hapanese way of wor+ing together is almost an instinct and part of Hapanese culture that canbe traced bac+ to a feudalistic agricultural society. Hapan was originally an agricultural country.7ice has a long history as the main product of agriculture in Hapan. 7ice had its origin in semi0tropical areas. rowing rice in a tropical area is easy( and it does not need any effort to producegood results. rowing rice in Hapan( however( is not easy because most parts of Hapan are locatedin temperate /ones and some areas are located even in sub0arctic /ones in the northernhemisphere. It is too cold to grow rice under natural conditions without great care.rowing rice in Hapan demands that farmers set a very critical time schedule from sowing riceseeds in the nursery( then planting( weeding( supplying water without interruption( protectingagainst insectsC attac+s( and harvesting before typhoons rage in the rice fields. If this sequencewere delayed for a few days in the feudal age( the harvest for the year would be affected( a factthat might lead to starvation. To +eep the rice growing on schedule( Hapanese farmers understoodthat teamwor+ was crucial. &ccordingly( for the Hapanese( from ancient times( the co0operateefforts to complete tas+s within a short period have been the basic attitude for survival. Ta+inginto account this Hapanese heritage( the direct transfer of the Hapanese way of thin+ing may notbe either possible or appropriate for 4estern countries.3owever( this does not mean teamwor+ cannot be transferred to &rmenia. In &rmenia( the4estern way of wor+ing together on a team e!ists in sporting activities. 9or instance( let us thin+about an e!ample from the game of football. It is easy to understand what benefits we have fromteamwor+. 9ootball is played by a team of >> players. To win a game( we need to use goodteamwor+. ach player has a position( such as goal+eeper( forward( and defence( which can be


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regarded as core duties assigned to each player. 4hat is important during the game is that theydo not stic+ to their core duties and they are fle!ible enough to move into other areas of the fieldand play additional roles according to the progress of the game. ach player is aware of this needand trained to do so whenever necessary. & similar sense and attitudes in carrying out *obs as ateam is definitely needed to ma+e for a successful broad *ob description and fle!ible *ob

assignment in the wor+ing process.

Initi&tie &n) C%e&tieness

4ith a broad *ob description( individual employees can e!pand their coverage by their owninitiative since there is no clear demarcation among the group members and initiative is stronglyencouraged. The encouragement of initiatives from individual employees is based on the ideathat every employee has great potential and these potentials can be realised by showing initiative.To show initiative( creativeness is needed from employees. ven when an employee is willing toshow his initiative and perform more duties or perform duties better( he may not be able to do sounless he improves wor+ methods or wor+ systems since he normally has sufficient dutiesoriginally. $reativeness discussed here is not a great invention( but something that can be a

minor improvement. The accumulation of these minor improvements by every individual countsin a business operation.Both initiative and creativeness is representative of positive wor+ attitudes by employees. Inorder to encourage employees to show initiative and be more creative( organisations need tocreate an atmosphere and environment where employees feel li+e doing this. 9or e!ample( canleaders and organisations allow mista+es and errors( which sometimes occur because of initiativeand creativenessJ4hether employees show their initiative in improving their method of wor+ing( and performanceor they *ust do whatever they are told( to do may appear to be a minor difference in itself;however( it has a great bearing on the corporate culture( which in turn greatly influences the totalperformance of the company.

Info%#&tion S2&%in-

Successful information sharing is important for good teamwor+. roup members help each othereffectively only when they have necessary information about the activities of the group and othergroup members. Because the industrial countries are entering an information0oriented society(the 4estern countries seem to show interest and concern for the sharing of business informationwithin their organisation.9or good information sharing( superiors in wor+places have a great responsibility to +eep allemployees well informed. They have to organise regular meetings( however brief they may be( inwhich they should inform employees about policies and decisions made by the management totheir members. 4hen a meeting is held( they should also discuss any present issues( as progress

of the group achievement and problems discovered( with subordinates. 3e or she also needs tocreate an atmosphere in which open communication is encouraged and maintained within thegroup.


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&ttentiveness is a mental attitude( which cares about others. $ompany operation is the *ointeffort of various departments( divisions( sections( and individual employees. 4hen every groupmember shares both individual and common responsibilities( completing individualresponsibility alone is not sufficient.&ttentiveness has to be practiced to enable other group members and associated employees and

sections to perform efficiently and effectively. 9or instance( a production operator can and shoulddo his *ob in a manner( which will help operators in the ne!t process accomplish better wor+.The following wor+erCs attitude stems from attentiveness. In the factor of automobiles assembly(a wor+er is engaging in ma+ing parts for cars. 3e reminds himself that he must produce the rightamount of good quality of parts( now when the wor+ers in the ne!t process really need them. 3ealso +eeps in mind that he places his products where it is most convenient for the wor+ers in thene!t process. This e!ample shows an origin of the &B& system( which was not bornwithout an attitude of attentiveness and alertness on the part of the wor+ers.The managements see+s for increase productivity( as a result( they force wor+ers to producema!imum amount of products. This idea should be eradicated and the management shouldconsider they should produce products with enough amount of mar+et. In other words( system of

production should be changed from pushing products to pulling out products. This idea isimportant to +eep good process control for production. The management should declare thema!imum amount of products in each day. They when the wor+ers completed the productionwith this amount( then the production of the day are completed. The wor+ers should not productmore amount of products.&ttentiveness too is directed( not only to group members and other sections in the company( butalso to customers. %aying sufficient attention to customers is a basic positive wor+ attitude in anybusiness. This is why attentiveness is lin+ed to Basic. To be attentive( we have to be alwaysalert in learning what we find necessary to do. &gain( minor e!amples of attentiveness andalertness count in improving a companyCs operation if they become part of every employeeCsdaily wor+. 9or better quality wor+( attentiveness and alertness are essential. 4e must enhancethis way of thin+ing in employees to create an atmosphere in which employees are encouraged togenerate and maintain attentiveness and alertness.

;o%+ Et2i's

ood Hapanese management requires every employee to have a strong sense of self0discipline.The discipline in companies starts from observing the companyCs regulations( in particularpunctuality. %unctuality is the basis of all disciplines since most business activities aremeasured by time( including production( sales( service( etc. &s the saying goes( time is money inbusiness.&nother aspect of wor+ ethics is a sense of responsibility among employees( which may be one0step higher than mere wor+ discipline. o you try to finish your current wor+( even after wor+ing

hoursJ o you try to catch up with your colleagues( even with overtime( if your delay causesdelay for the group wor+J ach aspect produces rather similar results in wor+ goals. 3owever( itma+es a great difference whether all the employees share a strong sense of responsibility or they*ust do not care.ach action involved in both Basics and 4or+ thics( is a simple detail or a single action( and itis certainly does not ma+e an enormous difference for the companyCs overall performance.evertheless( Hapanese companies attend to these details with much /est( believing that theaccumulation of these details puts a company on top( well above the competition.


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Mutu&! T%ust

-utual trust can and should be established slowly but steadily by showing trustworthiness indaily actions. -anagement has to treat labour unions as partners by regularly consulting unionson matters( which affect the well0being of union members( and sharing information on thecompanyCs operational performance. -anagers have to display their commitment to wor+ before

they require the same of their subordinates.

Lon- te%# ie=

Hapanese industries are often complimented on the fact that they normally have a longer0termview than their western counterparts( which are after short0term profits. This may refer to thewillingness of Hapanese companies to invest massively in automation as well as research anddevelopment activities( which at least for a short while( often has a negative impact on financialperformance.5ne possible reason is that the Hapanese industries are characterised by manufacturing which

necessarily requires a certain time to establish production facilities( improve and stabilise qualityand earn profits 00 all quite different when compared with service0oriented operations. &notherreason may be that Hapanese industries are based on the closed labour mar+et and their growthand e!pansion can only be achieved by growth of employees( a type of progress( which ise!tremely time0consuming.

3.5.$0.O%ient&tion To=&%)s ;o%+"!&'e u&!it, Det&i!s An) Peo"!e

In an earlier section of lesson ?( we e!amined Hapanese management from its fundamentalcharacteristics( which in turn form the basis of Hapanese wor+ing practices. In concludingHapanese management characteristics( it may be appropriate to point out that the companies

necessarily share a strong orientation towards wor+place( quality( details( and people when theysuccessfully introduce the essential characteristics mentioned above. They are the samecharacteristics for Hapanese management. "et us loo+ at it from a different angle.

O%ient&tion to=&%)s


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O%ient&tion to=&%)s )et&i!s

The surest way to improve operations is to accumulate the improvement of minor details ratherthan relying on possible large brea+throughs. This is why successful Hapanese companies do notfail to ac+nowledge the importance of minor improvements( the accumulation of which will leadto a great difference in the long term.

O%ient&tion to=&%)s "eo"!e

In the business organisation( there are things( which the system can better ta+e care of and thereare others. This can only be handled by employees. Improved quality requires a change inemployeesC minds that they are all responsible for higher quality. etails of operation( whichoften escape the system( can be well0ta+en care of by attentive and alert employees. Hapanesemanagement definitely requires conscious efforts by all employees.

3.5.$.Re&! Me&nin- Of P%o)u'tiit, I#"%oe#ent

4e human beings are very conservative. 4e do not want to change our present circumstance(even if we understand that we should change certain things or rules. The industrial revolutionbrought many changes for society. &s production increased( the social system changed.Improvement of the transportation system is an e!ample of change resulting from the industrialrevolution. Before the revolution( the most common long distance vehicle was the sailing ship.Because of the increasing cargo of manufactured products( steamships too+ the place of sailingships. &t that time( if we insisted on sailing ships( we might fail in our business. 9or the survivalof our business( we need to see how things are going to change and be aware of these changesalmost by intuition( and then change our wor+ing system to fit contemporary conditions.

Consi)e%in- "%o)u'tiit, 'o"in- =it2 #&%+et e'ono#,

4e are now entering an information0oriented society from our previous industrial society. Tocope with such a change( what is the most important element to considerJ Is it informationtechnologyJ Surely( this technology is important( and information technology is developingrapidly. 3owever( we should not thin+s about that is the most important element( even if it isvery significant. The most important element is human beings. &s technology is developed byhuman beings( not by machines or computers( information itself is of deep concern to theconcept of human beings. If we do not have any interest in a particular issue( information aboutthis issue will disappear shortly and not remain information.4e can create a healthy and prosperous society through productivity improvement. This fact is of

universal application whatever the society is. 4ith the information0oriented society( productivityis still the +ey element for an affluent society. &s we learned( enhancing proper understandingabout productivity is important for our progress. In our modern age( the information0oriented era(human beings have within themselves the power for productivity improvement. In that sense( ifwe wish to maintain good management in this information0oriented society( we must first thin+in terms of human beings for productivity improvement.%roductivity( at present in &rmenia( seems to be recognised as having two different meanings.5ne is that it contributes to increase a companyCs profit( and the other is connected to hard wor+.


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Because entrepreneurs e!pect to increase their own profit by increasing productivity( and( on theother hand( wor+ers are opposed to having any e!tra hard wor+ without incentives( we cannote!pect any productivity improvement &rmenia left from Soviet Anion and became independentcountry. &t the same time( system of economy had been changed from socialism to mar+eteconomy. Ander mar+et economy( customers are the most precious element of management.

4ithout customers( we cannot manage enterprise. 4e need to understand the difference ofsocialism and mar+et economy from the following formula.

PRICE COST PRO7IT 7o%#u!& 1

PRO7IT PRICE F COST . 7o%#u!& $

Ander socialism economy( &rmenian people might be accustomed to consider that price could bedetermined by the governmental authority including cost and profit. Ander such condition( whatmanagement must do for their management was to submit a well0written planning paper of newproduction to the governmental authority to obtain approval of new products. Ander suchcircumstance( once they could obtain the approval for production from the government authority(

they could produce products without considering customers= request. This idea shows theformula > above. %rice can be set with cost and profit.Ander mar+et economy( the above idea cannot be obtained consent from customers( whichmeans new products cannot sell well even though the management have written marvellous well0written planning paper for the new product. 9or obtaining profit( we need to consider a suitableprice for the product. Then we need to consider reducing cost of production. In order to reducecost of production( productivity improvement is indispensable.

Histo%, of t2e "%o)u'tiit, #oe#ent

4hen the Hapan %roductivity $entre( 'H%$) was established in >KEE as a core institution toenhance the productivity movement nation0wide( circumstances in Hapan were very similar to

those described above. -any Hapanese believe that during the transitional period of entering aninformation0 oriented society( H%$ had and has a large role in the success of Hapanese economics.&ccordingly( from the point of modern management( it is worth learning the real meaning ofproductivity.H%$ is an institution for promoting the productivity movement in Hapan. Its board membersconsist of representatives from three areas: management group( labour unions( and academiccircles. &fter H%$ declared its intention of promoting productivity( they disclosed Three uiding%rincipals of %roductivity.2 The idea was received diversely. 4or+ers recognised itwas a bad e!cuse for hard wor+( while management understood it was a good e!cuse to increasetheir profits. 3owever( both perceptions were far different from the real meaning of productivityimprovement.

4e have learned already about gain sharing in productivity improvement. 3owever( from thepoint of view of modern management( let us consider it again. 4e usually understand thatproductivity is the relationship between input of materials and output of products. This idea isan e!tremely narrow technical definition of productivity. Thin+ about this technical aspect(productivity can be measured quantitatively by si/e( length( and numbers of units or in amountof monetary unit produced 'dram( dollar( or yen). 4e call this idea physical productivity andvalue productivity.


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4e quote this from a report of the 7ome $onference 5n the %urpose and %rogram of the%roductivity -ovement organised by the uropean %roductivity &ssociation. %roductivity isabove all( an attitude of mind that see+s the improvement or continuous betterment of whate!ists. It is a conviction that one can do better today than one did yesterday. 9urther( it is theconstant adaptation of our economic activities to changing conditions( and constant efforts to

apply new techniques and methods. It is a firm belief( in human progress.

B&si' #e&nin- of "%o)u'tion

191 Essenti&! fun'tion of f&'to%,

The following are an e!planation of the essential function in factory. To understand thefunction easily( let us thin+ about the comparison with water supplying system is attached.7&'to%, in =2i'2 #&te%i&! is 'one%te) into -oo)s

(1) atural 4ater4ater purification plantTap 4ater(2) 7aw material9actory( -ill or %lant%roducts or oods

(3) Input raw material

$ontrol system for production

5utput '%roducts)(4) $onverting process '%roduction:


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interest between buyers and sellers and then ma+ing satisfaction both customers and produces. Infact( the factory is the place where ad*ustment of advantages is underta+en. In order to avoid anymisunderstanding( we must understand clearly that the factory management does not requestequal responsibility for both producers and consumers. Suppose both sides are happy( theenterprise can manage its operation satisfactory.

St%u'tu%e of f&'to%,

If you visit a factory( you may feel that the factory seems to have no particular system at aglance. 3owever( the factory is actually controlled by production control system properly. Boththose who have never visited factory before as well as those who have been wor+ing in a factoryfor a long time( will receive the same impression on their first factory visit. 9or e!ample:

The factory is dar+ and noisy

"ocation of machines seems to be in distorted

oods in process are piled up

5perators wor+ have hard wor+ing

9or+lifts are running busy

4e have such impressions always when we visit a factory at first time. It is however( impossibleto understand the factory( even if we gather such impression as many as possible. In fact( themore enterprise visit gives us the more vague impressions for the factory operation. &s we visitthe more number of factories( we have more confusion for the factory operation. The reason whywe have such confusion is that we do not analysis systematically of our impression for thefactory. &s we list our impression at random( this gives us such impression in general that thefactory is li+e a *ungle( where we cannot see far distance. The factory is far different from a*ungle. There is no ma/e or labyrinth in the factory. If it was the same as a *ungle( raw materialsbrought into the factory( could not be converted into final products according to schedule. 5n thecontrary( a factory runs in a systematic manner. Ander such conditions( raw materials will not beburied in a wrong place and une!pected products will not appear.9or that reason( we cannot shout( the factory is the same as a *ungle. The factory is arranged byusing production control systems. &ny operation( even if it seems to be running without anyorder( it is carried out by systematic control. 5therwise( the factory cannot deliver suitableproducts for sale into the mar+et. &ny factories whether it is big scale enterprise or a cottageindustry( they run their management according to the procedure we have learned from the casestudy; %T. Slamet rattan. 4e need to learn again about the business procedure what -r. Slametreceived an order and made a chair. This procedure is the basic of production management.7eviewing the total output manufacturing factories( we can see that a few big enterprises canproduce more than half of the ational output of industrial products. This tendency is seen in anydeveloped country li+e Hapan. 3owever( it is important to note that small enterprises contribute

to the national economy by supporting big enterprises as subcontractors. This relationship is veryimportant for a systematic industrial development. 9ostering supporting industry is the +ey ofindustrial development in any countries.In Hapan( big enterprises li+e Toyota( -atsushita( Sony( %anasonic( Bridgestone are well+nown. They have their management in overseas business with very helpful support of varioustypes of subcontractor. These subcontractors are referred to as supporting industries. 4ithout co0operation from supporting industries( Hapanese big enterprises could never have success stories.The role of small and medium si/ed industry is very important in every country. eveloping a


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engineers( who wish to be good management staff( should learn the basic +nowledge ofadministrative matters of the enterprise( including financing( accounting( and industrial relations.

P!&nt #&n&-e#ent ?P!&nt en-inee%in-@%lant management is a part of the management in the enterprise( especially in an area of plantwor+s. &s we have learned the outline of plant management( this lesson will loo+ at the contentsof plant management in much depth.

Pu%"ose of "!&nt #&n&-e#ent

The following five 'E) items are the list of the functions of %; %lant ngineering $ode set in>KEK by &I% '&merican Institute of %lant ngineers). 9unctions of %lant engineering as definedby &I%(1) %lant layout and design(2) $onstruction and installation(3) -aintenance( repairs and replacement

(4) 5peration of utilities(5) %lant protectionSome people regard that %lant -anagement only indicates %lant -aintenance -anagement. Thisinterpretation is too limited. The %lant -anagement should be a synonym for %. or %.-anagement in the A.S. Strictly spea+ing; %lant ngineering -anagement should be called as%lant -anagement.& human being has two natures( which acquired before and after birth. In other words( humanbeing is equipped with these natures( which will decide our ability and character. The same asour human beings( plant equipped with two natures( before the plant was born and after. To ma+efull use of equipment in order to improve the enterpriseCs productivity( it is essential that we donot merely have a practice of %lant -anagement after the equipment was born. 7ather( we need

to have a more over0all method for our practice of %lant -anagement( such as % used in theAnited States( which considers both before and after birth of operation. It is important to havethis over0all view of plant management(

Budget planning for maintenance cost

To estimate the cost of maintenance based up on the past result and to ad*ust the over estimatedcost with reviewing the yearly production plan. The budget is estimate and calculates thefollowing procedure.

%rocess item &ction to be ta+en 7emar+s

& &> -aterial cost &d*ustment with priceinde!


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&? 4age cost including payment to sub0contractors if any

000itto000

& total $ost for &>M&? Sub0total >

B 9und of cost for long period plant shutdown for maintenance

Sub0total ?

$ %urchasing cost for consumable goods;this can be calculated as follows;stimate yearly0required quantity as pereach item( then multiple unit price'ad*ustment with a price inde!) for eachitem respectively.4e can calculate purchasing cost ofconsumable goods.7equired quantity is calculated by lifeof each consumable goods 'days) anddivided by yearly wor+ing days.

Sub0total @

-aintenance cost for big machinesrecovery wor+ and normal repair cost

Sub0total D

Total maintenance cost N Sub total cost >M?M@MDThe general manager of the factory will authorise the budget of maintenance cost throughmaintenance manager.

?0D0? -aintenance control

9or good maintenance wor+( the following procedure is effective to +eep a good maintenance.

(1) P!&nnin- of #&inten&n'e =o%+in- s'2e)u!e'&) "ist up the yearly periodical repair wor+s: $alculate the budget of the wor+ by ad*usting

the cost according to consumers= price inde!. -a+e wor+ing schedule for repair basedon the past actual results.

'B) 7echec+ and ad*ust the schedule to avoid imbalance of wor+ and try to ad*ust thevolume of the wor+s as much flat as possible. Then ma+e monthly wor+ schedule forrepair.

'$) &uthorise the above schedule together with budget plan. The divisional managerauthori/es it with consent by director in charge. The decision will transmit to alloperators concern through the head of maintenance section.

(2) Inento%, 'ont%o! fo% #&inten&n'e =o%+

'&) Spare parts: -anufacture necessary machinery parts for repair the big machines. It isnecessary to estimate the timing of delivery to minimise the cost of spare parts.

'B) Standard parts:'B0>) The inventory of parts for repair should be +ept with reasonable level. The items

of these parts are included as follows; $ommon use bearing( drive chain(


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'B0?) %arts require long time for delivery should place an order with enough periodsuntil the repair wor+ starts.

'B0@) 5rdinary parts( which are available to purchase any time immediately( should seta standard minimum quantity of inventory. $hec+ the minimum. If theminimum line e!ceeds to low level and then the order will ta+e place.

?C@ A%ti'!es of 'onsu#"tion(ormally( if the factory is located in industrial area( most of the articles of consumption are easyto buy. Those items are steel wire( sand paper( adhesive agent( waste cloth for cleaningthe machines. o not +eep a stoc+ of these articles as inventory( and place an orderwhenever it is necessary. This measure is resulted much low cost maintenance.

?D@ Re"!&'e#ent "&%ts(

'0>) Store the necessary quantity of parts. The quantity is set by the yearly wor+ingplan.

'0?) inds of stoc+ing parts are as follows: 0

$ontrol by production section 'aily consumable parts) 4ire cloth and cloth for machine

cleaning( felt( canvas( and carrier rope. $ontrol by maintenance section '%eriodical

changing parts) $onveyor0belt( +iln bric+ doctor blade( drive chain( conveyor chain( and special type of

bearing for particular machine. Strict inventory control gives us a remar+able result ofgood maintenance wor+( together with reducing maintenance cost and improvingproductivity of maintenance wor+. Because of good inventory control( operatorsconcerning maintenance wor+ can understand the quantity of stoc+ and they dounderstand where the spare parts are stoc+ing. Thus( lead them to ta+e necessary stoc+within a few minutes from the warehouse to the site( where the parts are necessary toe!change.

Ho= to +ee" t2e -oo) #&inten&n'e =o%+

The maintenance is to +eep systems( devices( and equipment in good order and ad*ustment sothat they can perform their function fully and completely at any time required. It is necessary toachieve these ob*ectives most efficiently. 4hat we say 1efficiently2 means to achieve theob*ectives at a cost as low as possible( In other words( we should improve productivity( Thepurpose of the maintenance of machines( equipments it to +eep the function of plant wor+ well ata reasonable maintenance const with ad*usting the capability of the equipment to meet theproduction purpose. Therefore( maintenance engineering must attend on fully lives onmachineries as following five 'E) items.(1) %lan layout and design(2) $onstruction and installation

(3) -aintenance( repairs and replacement(4) 5peration of utilities(5) %lant protectionThe more detail e!planation on these five items will appear in the lesson of maintenance in thiste!t.7elation between maintenance and production is as following illustration shown as follows:0

-aintenance section


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Staff9ield -aintenance very body participate maintenance wor+

Su''ess

3owever( the idea above0mentioned is wrong( anyone wor+ing in the factory is concern in plantmaintenance. Since the wor+ efficiency( is closely connected with productivity improvement( anidea of integrating plant maintenance into plant operation or vis0O0vis become popular in theenterprise. The idea has been recently fostered and it becomes in popular among engineers( thosewho are wor+ing engineering part in the plant. The productivity maintenance was born inaccordance with such original idea. 4e must remember that good efficient wor+ is closelyconnected with good maintenance. Therefore( it emphasis on greatly that +eeping an efficientwor+ing condition through good maintenance is the +ey of productivity improvement. very

body should wor+ for good maintenance in the plant. In that sense( plant engineers includingelectronic engineers should have +nowledge of accountant that is the source of informationregarding the factory operation. 4e can only achieve good management of productivemaintenance if we establish a well0arranged productive maintenance plan with focusing oneconomical efficiency about factory operate.

P!&nt #&n&-e#ent $

4e have learned the basic of plant management. ow( we will learn the plant management muchin depth in this lesson. 4e must remember that it is indispensable to learn plant management indepth( as trainers of the production management in &rmenia( if they wish to be a good trainer forproduction management.

I#"o%t&n'e of "!&nt en-inee%in-

In the past( maintenance wor+ e!isted as independent section for +eeping facilities as goodcondition. This wor+ is( needless to say( important. 3owever( the role of maintenance becomesmuch complicated in the modern industry. Then the maintenance becomes a management s+ill asplant engineering. "et us loo+ at the plant engineering precisely in this section.

%roductionSection

$ontractorSuccess

of-aintenance


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P!&nt en-inee%in- s'2e#e

9rom the chart shown on the above( we can learn the relations between economical and technicalphase. 9or good plant engineering( engineers in charge of maintenance should establish the mosteconomical maintenance plan and underta+e it. 9requent chec+ of the cost of the maintenance ascompare with the budget is one of the most important tas+ for managerial engineers.

T2e "%o'ess of Int%o)u'in- PM in t2e ente%"%ise

Apon introducing productive maintenance( the engineers should understand its historicalbac+ground as well as its significance. They should +now the usefulness of productiveengineering together with the actual procedure what they should do for better productivemaintenance effectively. This process is important to ma+e clear the preparatory action to beta+en by the top management in order to introduce the action of productive maintenance as acompany0wide activity.4hen introducing %- management( it is necessary to offer appropriate programmes oforientation to all the staff involved in productive maintenance in the enterprise. Thesemanagement staffs and employee include from the president( directors in charge of engineering

at head office( clerical staff( and operators 'wor+ers) in the factory. either progress of %- norimprovement in productivity can be e!pected( if some of the wor+ers( who are carrying out themaintenance wor+( cannot understand the importance of the plant engineering. The engineersshould understand that the plant engineering should do their *ob having in their mind that theyare underta+ing company0wide activity. In that sense( the engineer should teach any wor+ers whoare wor+ing without understanding proper meaning of maintenance wor+. The engineer shouldunderstand that maintenance wor+ is underta+en by a limited number of operators 'wor+ers). Theoperators= understanding is one of the +eys of successful implementation of plant engineering.If quality control develops into TG$ 'Total Guality $ontrol)( %- is to be a sub*ect for everybodyin the enterprise as TG$ means the company0wide activity. &ccordingly( anyone in the enterprisecan suggest his #her idea for the actual operation( including maintenance wor+. In other words(

on the introduction of %roductive -aintenance '%-)( all people from top management(directors to operators 'wor+ers) should learn the concepts of productive maintenance as well asphilosophy of %- in order to let then thoroughly understand what is %-.

3.5.$Con'e"t Of M&inten&n'e

9rom the word of maintenance( we feel it loo+s li+e a steady and monotonous wor+ and play assupporting role in factory. This wor+ does not include any production. In that sense( themaintenance is never become a main actor in factory. 3owever( their role is important; themaintenance has a +ey of success of factory operation. Hapanese economic success owes much tothe maintenance wor+. In other words( the good maintenance brought the economic success to

Hapan.

T2e %e&! o4:e'ties of #&inten&n'e

The maintenance is to +eep system( devices( and equipments in good order and ad*ustment sothat they can perform their functions fully and completely to respond any request at any time forthe operation. It is necessary to achieve this ob*ective most efficiently. 4hat we say efficientlymeans to achieve these ob*ectives at a reasonable cost. In other words( the purpose of theequipment maintenance is to +eep the function in good shape at a reasonably low cost ad*usting


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the capability of the equipment to meet the production purposes.

'?) $- '$orrective maintenance)PPPPPPPPPP.>KEF=S4ith a view of improving the reliability( the need for maintenance( safety features of theequipment and any defective parts of the e!isting equipments should be modified or

remodelled 'change in materials( forms( etc() under a certain plan and in the most aggressivemanner( so that the deterioration or brea+0down of the equipment can be minimised. Theideal will be of ma+ing the equipment( which is no need for maintenance. This way ofapproach is called as corrective maintenance.

'D) B- 'Brea+0down -aintenance)PPPPPPPPPPPP>KE8#K=s4hen an equipment or device becomes to show a lowering of its function or comes to stopits functions 'stoppage in operation due to brea+down) then repairs or replacement will haveto be made. This sort of post0maintenance should be applied for an equipment or device(which can be renovated or replacement at a lower cost. This measure is much economicalrather than to ma+e preventive maintenance. The old style of post0maintenance was carriedout without see+ing the cost of maintenance and under no e!act plan or in an easygoing way.Brea+down maintenance mentioned under this paragraph entirely differs from the old stylepost0maintenance.

T,"es of "!&nt #&inten&n'e

9acilities in the plant have their own life cycle( starting from investigation as boring(grow up to ma+e( to install and to run them for operation and finally to scrap as death.Therefore( maintenance activity in factory is to be called as integrates activities of engineeringand management concerning in all aspect of plant( facilities from designing the maintenance. Thefollowing table shows( what type of plant maintenance are required from the point of wor+improvement in the area of reliability( maintenance ability and economic engineering.%lantsystem for life cycle of the equipment shows the following table.

To +eep the equipment available of full function at any rime Target should be

required highest possible

5b*ective of %- N

"owest maintenance cost -easures should be ta+en withminimum cost


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"ife cycle -ethod of system 4hole life of the equip0ment

>ststage:stablishing concept of

system and determiningthe specification of the

equipment.

&nalysis of system

'%rogramming of plantinvestment)

Investigation

Study

esign

-anufacturing

Installation

?ndstage:esign and development

of system of theequipment

ngineering for system'construction)

@rdstage:-anufacturing and in0

stallation of the equipment

Dthstage:

&ctual use for operation-aintenance

-anagement system'5peration)

5peration

-aintenance

isposal

D0@0> Identification and difference of -%( %- and $-

The idea of the new technique of maintenance stems from that maintenance was no longere!isted as maintenance wor+ only. 7ather the maintenance wor+ was deeply concern in themanagement of the enterprise. To increase wor+ efficiency of machines( to minimi/e the machinebrea+ down( to decrease the maintenance cost( all of these activities are closely connectedincrease productivity for the enterprise. To understand these concepts well( the following table

shows the significance of each maintenance method.

-%

-aintenanceprevention

%-

%roductivemaintenance

$-

$orrectivemaintenance

Invented at >K6Q >KED >KEFStarting itsactivity

Apon planningand installingfacilities

In operation offacilities

Apon analy/ingcauses of troubles

5b*ective:Improvement

Selecting offacilities:

liminating ofoperational

Improvingfacilities in order

The result ofthe activity:


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reliability ncouragementof tests andacceptance ofinspections inorder to reduce

the troubles( toattainminimumoperationalmista+e and topreventdeterioration ofthe facilities

mista+es andmishandlingsailymaintenance toprevent

deterioration;"ubrication($leaning(&d*ustment(and7eplacement

to lessendeterioration ofequipments ande!tend the life offacilities(

equipments andmachines

7eliabilityengineeringwas established

5b*ective:Improvementof

maintainability

Selection offacilities toma+e easy

repair can bedone( easily(effectively(rapid andminimum cost

%reventivemaintenance(planned

engineeringwor+

Improvingfacilities in orderto simplify

procedures neededfor dailymaintenance(inspection( andrepair.

The result ofthe activities:-aintainability

engineering

Improvement inview of economic wor+

efficiency'Improvementin economy)

Totala b

c

"ow 3igh7eliability

Totalb c

"ow 3igh!tent of -aintenance

Totala d

c

!tent of Improvement

ngineeringwith economicmind

'ngineeringeconomy)

-%'-aintenanceprevention)

%-'%reventivemaintenance)

$-'$orrectivemaintenance)

T%- 'Total productive maintenance)

a: -aintenance $ostb: quipment manufacturing cost

$ost

$ost

$ost


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c: "oss by eteriorationd: $ost for improvemen

3.5.3M&n&-e#ent Of >o4 Re"&i%

The poor productivity caused by equipment is called as loss. 7epair *obs are important to recove

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Merchandising Practice in Apparel Industry

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