MN 5210

Operations Management

GROUP ASSIGNMENT

Group 03

Department of Management of Technology

University of Moratuwa

2020
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Cover Sheet for Assignment

Names with Initials & student no:

Number Name
208280X Kuruwitaarachchi KADRU
208282F Lavan S
208283J Liyanaratne UKI
208284M Madhushani HKR
208285R Madurangika ADS
208286V Mekalan K
208287B Mendis ASM

Title of the Assignment: Analysis of The Operations Management Practices of an

Organization

Subject Code : MN 5210

Subject : Operations Management

Lecturer : Prof. Chandana Perera

Student’s Statement :

I certify that I have not plagiarized the work of others or participated in unauthorized
collusion when preparing this assignment.

Office use only :

Signature ………………….. Date: 1-Jan-2021
Deadline Met Extension Given Late Submission

Marks Given :
Signature:………………………….
EXECUTIVE SUMMARY

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This report highlights the analytical process of operation management practices and
investigation at apparel accessories manufacturing unit in Naturub Group of companies. The
key contents of this report are to introduction of the firm, operation strategy formation and
analysis, discussion on product and services design, process design, planning and control in
long term and short term, improvement of the existing operations, and approach of the
quality management concept at the manufacturing unit in the firm.

Detailed understanding of the firm’s core business as quality and customer oriented elastics
manufacturing product distributing in Sri Lanka and overseas. Despite the analysis of
operations management functions such as supply chain management, warehousing and
layout planning has been done for further understanding.

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Table of Contents
1 Introduction ................................................................................................................... 1

1.1 The Importance of Operations Management in an Organization............................ 1

1.2 Introduction to the company ................................................................................... 2

2 Review and Critically analysis of Operations Management functions at Naturub........ 4

2.1 Supply Chain Management ..................................................................................... 4

2.1.1 Procurement ..................................................................................................... 4

2.1.2 Production........................................................................................................ 7

2.1.3 Distribution ...................................................................................................... 8

2.2 Inventory Management ........................................................................................... 9

2.2.1 ABC Inventory Management .......................................................................... 9

2.2.2 Just In Time (JIT) Inventory Management ...................................................... 9

2.2.3 Bulk Shipments ............................................................................................. 10

2.2.4 Back Ordering ............................................................................................... 10

2.2.5 First in First Out and Last In Last Out........................................................... 10

2.2.6 Batch Tracking .............................................................................................. 10

2.2.7 Demand Forecasting ...................................................................................... 11

2.3 Quality Management ............................................................................................. 11

2.3.1 Current quality management practice ............................................................ 11

2.3.2 Cost of quality ............................................................................................... 12

2.3.3 Quality Control of current processes ............................................................. 13

2.3.4 Quality by design ........................................................................................... 14

2.4 Job design ............................................................................................................. 16

2.4.1 Latest Initiatives at Naturub .......................................................................... 17

3 Findings and Recommendations.................................................................................. 17

3.1 Supply chain management .................................................................................... 18

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3.2 Quality Management ............................................................................................. 19

3.2.1 Development and implementation. ................................................................ 19

3.2.2 Six sigma in detail to improve the current quality standards. ....................... 20

3.2.3 Tools for six sigma ........................................................................................ 20

3.2.4 Quality 4.0 ..................................................................................................... 22

3.3 Layout ................................................................................................................... 24

3.4 Job Design............................................................................................................. 24

3.4.1 Resource allocation and attractive incentive scheme .................................... 24

3.4.2 More use of more predictive maintenance technologies ............................... 24

4 Conclusion ................................................................................................................... 25

5 References ................................................................................................................... 26

Table of Figures
Figure 1-1: Feedback ............................................................................................................. 1

Figure 1-2: Company Logo ................................................................................................... 2

Figure 2-1:Supply Chain for Manufacturing and Service Companies .................................. 4

Figure 2-2: Procurement Life Cycle ...................................................................................... 6

Figure 0-1: Quality of current process ................................................................................. 14

Figure 0-2: Quality by design .............................................................................................. 14

Figure 0-3: Cost of Quality.................................................................................................. 15

Figure 3-1: Six sigma philosophy of cost of quality ........................................................... 20

Figure 3-2: Quality Evolusion ............................................................................................. 22

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Analysis of the Operations Management Practices at

Naturub Exports International (Pvt) Ltd

1 Introduction
In every company, Operations Management is a key function. It supervises the end-to-end
implementation of operations by creating and recording procedures to ensure that the
required outcomes are achieved in synchronization with the company's overall goals. This
study on Operations Management would include an understanding of the role and value of
Operations Management (OM) in manufacturing products and services efficiently and
effectively.

1.1 The Importance of Operations Management in an Organization

(Horvathova and Davidova, 2011) Through physical products as well as services, any
organization can satisfy client needs. With a particular goal in mind, departments across the
organization work. The Marketing Department, for instance, works to reach and acquire
customers, create demand for products. The HR department can work to embrace a healthy
culture, to identify human resources that are capable. Operations, however, unites all these

Figure 1-1: Feedback

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departments in their roles and it plays a vital role in the transformation or transformation
process right from the source to the delivery. First, let us understand what operations implies.

Products or services for the customers involve a transition from the input to the output phase.
One subtle example of the method of transition is the procurement of the raw materials and
refining them to eventually arrive at a product that the customer wants. Human resources
engage at all levels of this phase of transition. They are the ones who make this transition
happen. Operations often require the utilization of human capital by setting up current
procedures to be established or continually optimized such that the final product achieves
standards.

The solidity of this process of transformation defines how consistent the organization is with
its purpose, vision, long-term and short-term objectives. The conversion of raw materials
into useful processed goods or the conversion of human capital, machinery or anything that
leads to the conversion of raw materials into usable products (or services) can be effectively
accomplished by successful management of operations. Accordingly, activities include the
concept of operational structures and procedures, the implementation of appropriate
monitoring and control mechanisms to assess the robustness of processes. Operations
management, based on continuous feedback, aims to fine-tune the methods of converting
raw materials or transforming human capital and facilities, allowing this transition to be
effectively matched with the organization's goals.

1.2 Introduction to the company

Naturub Career started in 1977 as a tinny balloons manufacturer and the continuous success
in its operation during last four decades has turned Naturub into a versatile industrial facility
with the global presence and reputation. With its ISO 9001-2015 certification and
accreditations from M&S and PVH laboratories, the company is in the forefront of the
manufacturing of apparel accessories in SAARC region.

Figure 1-2: Company Logo

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Naturub Exports International (Pvt) Ltd is a qualified manufacturing hub offering the high
quality apparel accessories to world renowned brand with the largest capacity in SAARC
region. Top quality, flexibility in customer service and continuous development enabled
them to win the confidence of world famous brands such as Victoria’s Secret, La Senza,
Pink, PVH, Adidas, Decathlon, A&F, NEXT, M&S, NIKE, H&M etc.

Naturub as a group, diversified their business into different sectors such as Hydro power
plants, Metal quarry and crushing plants, construction material manufacturing and also into
financial services.

Company Vision

To be the preferred apparel accessories supplier to world renowned, branded apparel

manufacturers.

Company Mission

Striving to manufacture products of high quality and consistency which are marketed globally
and locally at competitive prices with the assurance of timely deliveries to customer’s
doorstep.

Naturub products

Jacquard, Woven, Printed, Knitted, Covered Elastane /Braided and Tipping/ Sewing thread/
Bra tapes and trims/ Functional Elastics

Naturub Business strategy

Cost leadership, higher service level and high capacity through Expansion can be considered
as the main business strategy of Naturub. Having over 1000 machineries which consider as
the South Asian largest capacity, production in bulks allows Naturub to be more cost
effective in their operations and they are known as the best service in the industry. Further
Naturub streamlining their operations functions to improve quality and become the leader in
the quality aspect as well.

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2 Review and Critically analysis of Operations Management

functions at Naturub
This paper review and analyze Four main operation management function such as supply
chain management, Inventory management, Quality management and Job design which
consider as the core functions of Naturub perspective.

2.1 Supply Chain Management

Supply chain refers to all the activities involved in supplying an end user with a product or
service. To reach the product to the end user, a network of organizations which are connected
through upstream and downstream linkages in the different processes and activities that
deliver value in the form of products and services.

Figure 2-1:Supply Chain for Manufacturing and Service Companies

Supply chain management (SCM) then is the process of trying to approximately manage this
network of activities and flows. Supply chain management functions can be further described
under below elements.

2.1.1 Procurement

Procurement is the management of acquiring process of inputs required for a company. The
purchased items include raw material, components, maintenance parts, services, tools, etc.
The main goal of the procurement is to acquire optimum quality and quantity of goods and
services for the company in a timely manner at the lowest cost.

As pre the strategic procurement approach, companies have to follow below procedure to
meet the exact requirement of the firm.

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1. Gathering Information of requirement

o Gathering information of the requirement such as specifications.
2. Supplier contact
o Requests for Quotation (RFQ),
o Requests for Proposals (RFP),
o Requests for Information (RFI) or Requests for Tender (RFT) may be
advertised, or direct contact may be made with the suppliers.
3. Background review of suppliers
o Getting references for product or service, warranty and after service. Samples
may be considered.
4. Negotiation:
o Negotiating of price, availability and customization possibilities
5. Fulfillment:
o Supplier preparation, shipment, delivery, and payment for the product/service
are completed, based on contract terms
6. Consumption, maintenance and disposal
o The company evaluates the performance of the product/service and any
accompanying service support, as they are consumed.
7. Renewal
o Product or service after being used or expired it is required to be reordered.
This will be done after reviewing the product or the supplier.

Naturub has a centralized procurement team to acquire all the requirement of the company.
The main production material for supply garment accessories is Yarn. Starting from Yarn
every single material required for the company is being purchased through the procurement
division. Same can be further elaborated through the procurement life cycle shown below.

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Figure 2-2: Procurement Life Cycle

 Gathering Information of requirement

Naturub is not maintaining a committed and fixed supplier thought they have a huge supplier
base. When there is a new material requirement, the procurement team considers the existing
suppliers as well as looking for new supplier through Alibaba platform.

 Supplier contact

Once the sales team has raised the purchasing requirement, procurement team will be starting
to find suitable suppliers. Requests for quotation (RFQ) will be forwarded to the existing
suppliers as well as the procurement team will be published their requirement in Alibaba
platform and the interested suppliers will quote for the requirement accordingly.

 Background review

The company maintaining a policy of visiting the suppliers’ facility as a background check
except for the suppliers from the Alibaba platform. Suppliers should submit their customer
list and Naturub will be requested feedbacks from those customers about the supplier.

The Alibaba platform itself has been conducted site visits and done the background checks
and assuring the suppliers who are registered in the platform. Naturub is being used the
Alibaba reviews of the suppliers from the particular platform

 Negotiation

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The procurement team is being negotiated with the selected suppliers with regards to the
bulk purchase discounts, lead time and customization of products.

 Fulfilment

The procurement team normally calculate customers’ lead time and calculate backwards and
acquiring material to match with the customers’ lead time. From the material supplier’s side,
the expected lead time will be negotiated initially. Though the normal delivery lead time is
14days, due to the Covid 19 pandemic the delivery lead time 18-30 days and the delivery
cost has been creased 5-6times as the normal delivery cost.

 Consumption, maintenance and disposal

Naturub checks the quality of the delivered material first. Then, during the production
process frequently checking the quality of the material and the output product. If the supplied
material is not in expected quality this will be informed to the supplier right back. The
supplier will deliver the same product to replace the defective ones.

For the maintenance and operation of the machineries and equipment in house intensively
trained, highly caliber operator and technical team is maintaining. The suppliers of
machineries and equipment always maintaining good relationship Naturub their know how
to operate and maintain those equipment.

 Renewal

As the report mentioned earlier Naturub is not maintaining a committed supplier base. But
Naturub is measure the performance of the suppliers already supplied to fulfill future
material requirements based on the price.

2.1.2 Production

Lean production has now become an integral element of supply chain management. The
objective of lean production is to eliminate of all forms of waste and to produce the required
quantity of goods with minimal use of resources. This concept can be extended to the entire
supply chain.

Naturub still not achieved lean production status. However, they are continuously working
on eliminating waste during the production process except reducing inventory. With the
recent process improvements the company had eliminated wastages and the benefit of it has
given to the employees under their productivity improvement project (PIP).

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2.1.3 Distribution

Distribution is the management of the flow of materials from manufacturers to customers

and from warehouses to retailers involving the storage and transportation of products.

 Placement of finished goods inventory

This approach reduces the safety stock levels since the firm can pool its inventory among
several customers under uncertain demand conditions.

Naturub products such as sewing thread and basic knitted elastics were made to inventory as
those items are fast moving and jacquard woven and special orders are undertaken as
individual projects.

 Selection of transportation mode

Selection of suitable transportation service should be made with competitive priorities. Cost,
flexibility and delivery time are the competitive priorities of an organization. Based on these
a decision of selecting suitable transportation method can be made.

Naturub has its own transport and logistic system within Sri Lanka. It is cost effective to be
maintained In House transport and logistic rather going for the outsourced company. The
repair and maintenance of those vehicles are being done by an in-house team. The drivers
will be intensive when there is an immediate distribution to be done and this strategy is being
used to reduce the cost of the transport and logistics and improve service level in the out
bound, Naturub to local customers.

 Scheduling, routing and carrier selection

Planning and control of freight movement is an essential activity in managing supply chain.
The shipping schedule must fit together with purchasing and production controls schedules.
The decision making process is very complex due to many possible combinations.

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2.2 Inventory Management

Inventory management is very much important for any firm to achieve optimal supply chain
efficiency, lower operation cost and to meet customer needs on time (Melanie, 2016). There
are number of inventory managements methods and each of them will suit for different
needs.

2.2.1 ABC Inventory Management

This method is categorizing products into groups based on the importance as A: most
valuable ones but small in quantity and C: least valuable one but high in quantity.
Categorizing factors would be annual consumption, inventory value, cost significance and
so on. This method enable accurate forecasting based on the movements, allocate funds on
inventory in an efficient way.

Naturub is practicing the approach. In category A, Spandex and rubber yarns are grouped
which are more expensive (20ft container is around $35,000.00) and required special
warehouses with not more than 26˚ C temperature. More attention is needed for them.
General yarns such as polyester/ nylon, cotton are categorised in B and those are cost around
$20,000.00 per 20ft container. C category is dying tubes, less expensive ones which cost
around $8,000.00.

2.2.2 Just In Time (JIT) Inventory Management

This risky JIT inventory management maintains lower volume of in-hand inventory as the
firms would purchase inventory few days before it is needed. It reduces the holding costs,
required space to store and deadstock but the firm has to have the capability to handle a much
shorter production cycle. Addition to that firm should have clear understanding on customer
demand, sales cycles and seasonal fluctuations and it is also important to make sure the
reliability of the supplier on on-time supply.

Naturub is not practicing the technique in a considerable way since the organization’s
strategy is to maintain higher service level so they are maintaining higher level of stock on
hand.

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2.2.3 Bulk Shipments

This method practiced for high stable demand goods as it is mostly cheaper to purchase and
ship good in bulk but the extra money cost for the inventory handling of excess products
may reduce the benefits. So, the firms must sell them fast (chapter 3 inventory management
techniques, n.d.).

Naturub enjoys the benefits of bulk purchasing such as more power on negotiation of prices
as many suppliers willing to be part in the supply chain of this South Asian largest apparel
accessories manufacturer.

2.2.4 Back Ordering

Firms take orders and receive payments for the products which are out of stock. If the firm
is not prepared it risk very risky. This method increases the sales and cash flow and reduce
the holding cost and over stock risk. But there is chance for customer dissatisfaction and
longer fulfilment times (chapter 3 inventory management techniques, n.d.).

Not practicing in the firm as their strategy not supports for this risky technique.

2.2.5 First in First Out and Last In Last Out.

Both methods are to determine the cost of inventory. FIFO assumes the older inventory is
sold first and it will help to keep the inventory fresh. LIFO assumes the newer inventory is
typically sold first and it helps to prevent inventory from going bad (Walts, n.d.).

Naturub is practising FIFO method. As an apparel firm the trends are changing time to time.
So, the firm’s technique is suitable.

2.2.6 Batch Tracking

It is a quality control inventory management technique by which users could group and
monitor a set of stock with similar traits and to track or trace defective items and their batch
(Walts, n.d.).

As a manufacturing firm, this technique is must to be practised and Naturub is practicing

this.

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2.2.7 Demand Forecasting

This technique is and should be used by retailers and the demand forecasting formulation is
done based on the previous sales data (Walts, n.d.). Not practicing highly statistical approach
at Naturub for inventory management. Just consider the simple trend analysis.

2.3 Quality Management

Basically quality is defined as the fitness for use or the conformance to requirements. Quality
management id identified as a fundamental of any business or a company.

Good quality management help a company to;

 Reduce unnecessary costs

 Attract new customer base
 Satisfy current customers
 Make a good brand values
 Maintain competitiveness in the market

Naturub provide products to world’s most prestigious brands like Victoria’s Secrets, Nike,
Adidas, Hugo Boss, and Decathlon. Therefore it is very important them to provide high
quality products in order to satisfy their customers. Also Naturub, have a special focus on
quality management aspects, since they produce in large quantities, the cost related to error
are much higher in their process.

2.3.1 Current quality management practice

Naturub has been able to obtain the ISO-9001-2015 standard adhering to the world quality
management compliances.

Further, recently began to follow 5S system. Their target is to get the ‘”Taiki Akimoto
Award” by 2022. Following measure are taken in the company according to the 5S. By
implementation this method they were able to increase their efficiency in more than 10%.
Still Naturub is in Standardization stage and they were benefited a lot so for through 5s and
expect lot more to come.

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Sort

 Sorting raw material and waste in each section

 Sorting of equipment
 Labelling of equipment/material - Yellow, Red tags
 Sorted filing system with tags

Set in Order

 5S map for machinery and equipment

o Identify suitable locations for machinery and equipment

Extra movements of employees have been reduce as a result of these practices.

Shine

 5S alarms to clean the vicinity

 Regular workplace cleaning

More suitable working environment has been created to increase performance of the
workers.

Standardize

 Operating procedures for workers (SOP)

 Schedules were created and tasks and responsibilities were divided among
employees
 Checklists for each working section

Sustain

 Not obtained yet. Still in the 4th stage.

2.3.2 Cost of quality

Current quality management system can be evaluated based on Cost of Quality.

Cost of Quality = Cost of Good Quality + Cost of Poor Quality

At the Naturub following measure are being taken to maintain the quality standards.

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Prevention Costs

 Confirming product specification – when sample is requested by the customer

 Reconfirming the sample produced with the customer, before production
 Employee training to develop sample designs
 Identify processes where quality should be maintained and checked and Develop
Quality Management plan based on processes

Appraisal Costs

 Raw material inspection – Batch wise

 Product sample inspection
 Process control in production
 Quality audits

Internal Failure Costs

 Excessive Scrap.
 Product Re-work due to wrong specifications during sample production
 Machine breakdowns due to lack of maintenance
 Cost related to analysis of failures occur

External Failure Costs

 Return of products
 Returning of Incorrect Sales Orders
 Customer Complaints
 Damages during transporting due to unsuitable packaging

2.3.3 Quality Control of current processes

Process Quality control/assurance Tasks

measure
Developing the Specification verification
specification

Developing the design Verify with the specification and with

the customer.

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Sample developing Sample verification

Job management Internally developed ERP management Request correct raw materials –
system Correct specifications, quantity,
dates

Prepare job numbers, Issue &

allocate product numbers,
Specification

Raw material selection Material inspection

Production process Follow standard operating procedures.

Frequent quality inspection for new and

complex units.

Final product Random product inspection

Product distribution Internally developed ERP management Verification of customer details

system and location, delivery dates, etc.

Figure 2-3: Quality of current process

2.3.4 Quality by design

It is important to maintain the good quality during the design process. Since the cost of
maintaining quality towards production process, can be higher as shown in the graph.

Figure 2-4: Quality by design

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Process from placing order to batch production

1. Naturub receives the concept requirement from the customer.

2. Naturub develop the design according the specifications and requirement of the
customer.
3. Then specifications is verified with the customer requirement.
4. Naturub develop the sample design.
5. Sample product is verified with the customer.

Especially in elastic production, cost related to failure in the production section is very much
higher. Therefore they have focused on identify the concepts and relevant specifications of
the elastic material accurately before the design. Then design is developed for elastic
material based on the concept. As explained earlier the take quality control measures to make
sure the precision and the accuracy of the design as per customer requirement.

Naturub is already following several quality control/ assurance protocols as shown above to
maintain the quality at the design level. After that production process is started.

Current quality management focus is to reduce the total cost of the quality by maintaining
optimum level quality within the process, as shown in the figure.

Figure 2-5: Cost of Quality

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2.4 Job design

Based on the developed theory aspects of Job design, best practices can be identified and the
level of the adaptation of those best practices into the factory operations also observed during
this study. According to the job design concept there are objectives to be achieved in terms
of achieving organizational as well as employee satisfaction.

Most important objectives of job design are as mentioned below,

 Cost reduction- job to be designed to achieve maximum productivity

 Quality- measures to be taken to address the product quality while performing the
job such as product standards to be achieved by an employee.
 Speed- speed of response in important in performing some jobs specially in case of
an emergency situation
 Dependability – on time delivery of goods & services
 Flexibility – ability to change job design to a certain extent with the operation
changes
 Health & safety – job design should ensure the safety of the worker & all other
employees
 Quality of working life- stress level & comfort of the worker need to be considered
 Employee motivation- facilitation of encourage to perform the assigned tasks by the
worker

In order to achieve the above-mentioned job design objectives organization have

incorporated job rotation, job intervals, night & day shifts to reduce the stress level of
workers as well as to avoid the ergonomics hazards that occurred while moving with
repetitive actions by machine operators. Further BOI safety standards & international
compliance standards have been considered in job designing. More incentives & bonus have
allocated for the machine operators as a motivation to reduce the employee turnover & time
– time training is specially provided to machine operators & also with installation of new
machineries.

Use of division of labor is important in mass production and in addition to that reduce of
training cost with fast learning, increase of productivity, improve of product quality with the
specialization can be identified as the benefits. Further division of labour has incorporated

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into the job designing. Sequence of the production line has mainly considered in job
designing in order to continue the production effectively.

Factory layout arrangement plays a significant role in productivity. Although it was noted
that lack of focus on best possible plant layout arrangement with considering to the work
flow of the organization. However it was identified that management has focused on the
maintain of a good work environment with the measure taken to maintain required lighting
level, acoustic comfort & thermal comport.

2.4.1 Latest Initiatives at Naturub

 Most of the industries growth have declined due to the impact of COVID- 19
pandemic although Naturub has taken all the precautionary measures to avoid the
spread of this virus in order to continue the growth of the organization. Therefore,
due to the flexibility of job design the possibility has gained to maintain the social
distance in performing each & every tasks of the factories.
 Currently predictive maintenance technologies are used for the handling of
machinery maintenance in order to achieve zero breakdown time and finally it has
contributed to perform the workers duties efficiently without any interruption.
Thermology testing, vibration analysis are widely used.
 Adaptation of automation is more concern by Naturub & focus has given to provide
continuous training regarding the machinery operations.
 Employee efficiency & utilization concept has adopted by capturing the actual time
of performing a specific tasks & based on that time standard time to perform each
task have identified.

3 Findings and Recommendations

Existing operations management practices of Naturub can be identified as great contributors
for its business success over the last four decades. These practices have evolved by ways of
integrating the timely updated operational management concepts in areas of supply chain
management, quality management, job design and even for layouts.

As explained earlier, initialization of apparel accessories business through manufacturing

braided elastics in early 1980s and subsequent early expansions had mainly prioritized
growth and market capture which had headed the management to have comparatively less

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focus on proper streamlining of these operational management practices through

standardization as per global norms and practices. Recent business expansions done both
locally and in overseas ventures have proven that the top management is committed to
introduce novel operational management concepts for Naturub’s business operations.
However, further improvements can be suggested and recommended after identifying lapses
of existing practices of these operational management concepts.

3.1 Supply chain management

Earlier explained supply chain management related operational practices of Naturub ensure
that raw materials and related supplies reach to all manufacturing units on time, on required
quantities and quality at reasonable price ranges. On the other side, delivering end products
to buyers located within the country and overseas is also committed with timely deliveries
as per required quantities.

However, Naturub has not yet partnered with suppliers to get raw materials supplied mainly
from China and Thailand. Instead, materials and supplies are procured based on quotations
called as and when required with respect to received purchase orders from buyers and
respective inventory levels needed to be topped up. This practice is involved with
complicated evaluation process of multiple quotations and respective qualities of those
through sample testing. Possible price and quality variations resulted by this practice can be
minimized through partnering with a set of suppliers to whom Naturub will not be yet
another buyer, but a top prioritized buyer. Doing so will guarantee a steady flow of raw
materials with less price and quality fluctuations as well as timely delivery with less lead
time for which those partnered suppliers can be get agreed with, hence would not override
orders from Naturub by orders of other buyers. Moreover, these suppliers can further be
developed through this partnering program who can be infused with quality and cost
requirements of Naturub.

Although Naturub has been successful with forecasting future trend based demand patterns
and subsequent material requirements based not on a proper systematic approach, but based
on established worldwide industry links between company owners with buyers, a big data
based forecasting and analytics system can be proposed for implementation. The only
existing systematic approach is based on historical sales data due to which ultimate raw
material forecasting level is low.

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As explained earlier in this report, the practice of maintaining higher buffer stocks in order
to facilitate its buyers for emergency purchases who maintain optimal inventory levels has
yield high profits, business continuation and client retention for Naturub. However, this
practice is against best practices of operation management, hence can be proposed to
maintain optimum stock levels based on successful demand projections even for emergency
sales as well. This can lead Naturub to utilize the opportunity cost of inventory maintenance.

Shipping delays due to various logistic issues.

3.2 Quality Management

Existing quality management practices at Naturub are contributing well to deliver high
quality elastic products in all product categories resulting reworking of only 3.6 yards per
one million yards. 5S is currently practiced to minimize production damages, wastes and
resultant reworking. However, desperate efforts are required to enforce even the concepts
and practices of 5S. In order to overcome the difficulty of maintaining the consistency of
practicing quality management practices, Naturub can be recommended to take most
effective actions to convert quality, a culture of the organization , so that it would be
absorbed by the entire workforce to commit for delivering quality products at all times.
Moreover, the incentive scheme for production staff can be added with determinants based
on the achievement level of quality parameters.

It can be identified that Naturub is in need of more proper root causes analysis to overcome
quality related production issues such as reworking requirements. Hence getting more skilled
and experienced professional either as fulltime employees or consultancy based deployments
can be done for practicing novel quality concepts such as lean and six sigma and their related
practices.

3.2.1 Development and implementation.

Having the skills of a six sigma black belt champion to enhance entire production process in
terms of quality and process improvements ensuring proper documentation and
implementation processes will deliver real value addition for Nturub.

Sometimes quality checking steps of the manufacturing process are deliberately skipped by
respective employees as it consumes more time due to layout issues. Hence layout design
changes are required specially for admin and production sections making those positioned
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in close proximity as much as possible to improve the effectiveness of the quality

management process.

3.2.2 Six sigma in detail to improve the current quality standards.

Current practice is to maintain optimum level of quality level where the cost of the quality
is lowest. But in six sigma method, it is focus to achieve perfect quality (0% defects).

Main idea of Six Sigma concept is to measure the defects in a process and determine how to
eliminate almost all the defects in the production. When six sigma level is achieved
successfully, there will be less than 3.4 defects in a one million transactions.

Six Sigma philosophy of Cost of Quality

Figure 3-1: Six sigma philosophy of cost of quality

Using six sigma cost of the quality can be reduced. Using this six sigma method company
will be able achieve perfect quality while reducing their cost of quality, as shown in the
figure.

3.2.3 Tools for six sigma

These are qualitative or quantitative techniques to use to determine, achive the process
improvements.

There are many tools which can be used during the implantation of six sigma. Some of them
are mentioned blow.

 5S system
 FMEA-Failure mode and effects analysis
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 SPC - Statistical process control

 Regression analysis
 Pareto charts
 Flow charts, Control Charts

Methodology

DMAIC model can be used to implement the six sigma. Each component can be described
as below.

 D – Define
 M – Measure
 A – Analyze
 I – Improve
 C – Control

Implementation of Six Sigma in Naturub

Define

In this phase the problem, goal, customer requirements will be defined.

Process flowchart, SIPOC (Suppliers, Inputs, Process, Outputs and Customers) diagrams can
be used to determine above facts.

Critical Quality Elements of the process should be identified during this phase.

Measure

In this phase measurements of the key process input variables (KPIVs) will be taken.

Lead time and the quality should be focused in this phase.

A tool like Pareto diagram can be used to identify the frequency of issues.

Analyze

In this phase, tool like Regression analysis can be used to analyze the collected data.
Correlation between gathered data and defects can be identified.

Or else qualitative method like Root cause analysis can be followed for the analysis.

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After the analysis root causes of poor quality. Relationship between the Relevant KPIVs and
the defects or poor quality identified in this phase.

Improve

After identifying the issues, possible improvement methods will be proposed. Most suitable
improvement methods will be implemented in the operation. All the stakeholders should be
educated regarding the improvement. It is very important, stakeholders be willing to adhere
to the new improvements.

Control

Quality control plan should be updated based on the improvements.

Standard operations methods and guidelines will be established in this phase.

The performance should be monitored continuously. Statistical process control tools can be
used for that.

3.2.4 Quality 4.0

According to American Society for Quality (ASQ), a modern industrial revolution, also
referred to as the fourth industrial revolution or "Industry 4.0." has resulted in technological
advancements over the past decade. It is a revolution guided by the rapid development of
emerging technology and the improvements that these technologies introduce to the
workplace, labour force, and business organizations.

Figure 3-2: Quality Evolusion

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Quality 4.0 is a concept that applies within the framework of Industry 4.0. to the future of
quality and operational excellence. In leading their organisations to adapt established quality
disciplines to modern, digital and innovative technology, quality practitioners will play a
critical role.

Digitalization, automation, big data and cybersecurity developments are not only significant
from an IT point of view, but must be regarded as operational challenges. Radziwill (2018)
claims that seven tools and technologies that can be used to improve quality have been
created by the fourth industrial revolution:

 Data science and statistics: by forecasts, identifying trends and creating feasible
models and solutions to drive value. Identify causal and non-causal relationships by
aggregation of information, classification of data, real-time pipelines and dynamic
modeling that generates problem-solving knowledge.
 Technology Enabling: always connected to the new networking technologies, such
as sensors, handheld devices, networks, the Internet of Things (IoT), the Industrial
Internet of Things (IIoT), integrated systems, augmented reality and cloud
computing. It is also linked to how paperwork is handled.
 Big Data: relates to the system for managing and evaluating massive data sets that
come very rapidly from different stakeholders, in different formats, with high
variation in data content, may be easily updated and where there could be limitations
on their use.
 Blockchain: Continuous surveillance to allow transactions to take place only if
quality targets are reached. Contributes to preserving data integrity, morale and the
creation of a culture of quality.
 Artificial Intelligence (AI): For making tough decisions such as machine vision,
robots and chatbots.
 Machine Learning (ML): It allows to use heuristics for decision making and for
predicting, information filtering, and recommendation systems as well. Allows an
enterprise to do well by identifying levers within the systems that can guarantee
continuity and alignment across the whole company. Uncovering partnerships helps
to create a community of protection and consistency.
 Neural Networks and Deep Learning: Used for the identification of predictions
and dynamic patterns. It combines layers of special functions
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Naturub as a leader in it’s sector, awareness and planning to meet future industrial changes
such as quality 4.0 would be beneficial them in near future.

3.3 Layout

Although layouts of newly built manufacturing facilities have been planned as per novel
practices, the initially built facility at Pandura needs improvements as it has evolved with
changing requirements as per available resources specially land and room for expansion as
well as constraints such as continuation of manufacturing process. Stores are located 200m
away from manufacturing plant leading to unrequired loading, unloading, transporting,
checking and respective resource consumption. However this layout cannot be altered due
above mentioned constraints, hence Naturub is proposed to have at least a hub warehouse
inside the production plant itself, so that at least a secondary stock level can be maintained
with the production facility itself which will minimize above mentioned processes and
related costs.

3.4 Job Design

3.4.1 Resource allocation and attractive incentive scheme

Naturub needs project based job designing to cater customized requirements based on
different customer orders. High cost high quality productions require different production
teams with high experiences, ability and high efficiency levels resulting less time
consuming. Although an incentive scheme is currently in place, a more attractive
performance and target based incentive system is required to facilitate these jobs. When it
comes to conveying process related instructions in terms of time and quality requirements,
visualized communication can be more effective rather than displaying them in the form of
heavily written ones. Job designing together with allocation of dedicated machineries,
especially for backup, reworking, and emergency orders can be effective and efficient as
well.

3.4.2 More use of more predictive maintenance technologies

Further, Repetitive breakdown of machineries increases the loss time & reduce the overall
production line efficiency. Specially, repetitive breakdown is occurred with the loom
machines even some predictive maintenance technologies have applied therefore more use

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of new predictive maintenance technologies such as ultrasonic analysis &motor circuit

analysis to be required to consider.

4 Conclusion
In every company, Operations Management is a key function. It supervises the end-to-end
implementation of operations by creating and recording procedures to ensure that the
required outcomes are achieved in synchronization with the company's overall goals. This
study on Operations Management would include an understanding of the role and value of
Operations Management (OM) in manufacturing products and services efficiently and
effectively.

This paper has evaluated the main operation management functions of “Naturub Exports
International (Pvt) Ltd” which is renowned as the south Asian largest apparel accessories
manufacturer and analyzed against the best practice of the industry.

This paper has identified the eras to improve further such as supply chain, Inventory
management, quality management and job design. The recommendations given can be
considered in order to improve efficiency into a greater level.

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5 References
(2021). Retrieved from American Society for Quality: https://asq.org/quality-
resources/quality-4-0

chapter 3 inventory management techniques. (n.d.). Retrieved from intuit quickbooks:

https://www.tradegecko.com/inventory-management/techniques-process

Melanie. (2016). 3 inventory management techniques every business should consider.

Retrieved from UNLEASHED: https://www.unleashedsoftware.com/blog/3-
inventory-management-techniques-every-business-should-consider

Perera, C. (2011). OPERATIONS MANAGEMENT Concepts and Applications. Ethul Kotte:

Institute of Operations Management (Pvt) Ltd.

Sisodia, R., & Forero, D. V. (2020). Quality 4.0 - How to Handle Quality in the Industry 4.0
Revolution. Gothenburg: Chalmers University of Technology.

Walts, A. (n.d.). Your essential guide to effective inventory management +18 techniques you
need to know . Retrieved from Bigcommerce:
https://www.bigcommerce.com/blog/inventory-management/#inventory-
management-techniques

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