Arvind Mills PPC Overview

Production Planning and Control
Arvind Mills Ltd.
Ananda Dasgupta (D011) Narasimha Irukuvarjula (D022) Ninad Lele (D035) Sudeep Ojha (D044) Srinivas PV (D048)
Indian Textile Industry Overview 2013

Textile sector contributes 14% to industrial production and 4% to GDP
Accounts for 17% of export earnings
Provides direct employment to over 35 million people
Projected to increase its textile share from its current 4.5% to 8% by 2020
Potential size of Indian textile industry is expected to reach US$ 221 billion by 2021
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Opportunities in Textile
The textile industry has witnessed a sharp increase in investment during the last five years The industry attracted FDI worth $1.04 billion from 2000 till November 2012 The textiles industry complements the growth of several institutions and industries such as defense forces, railways and government hospitals who are key buyers This market is likely to grow to $31 billion by 2020 with a CAGR of 10% The 11th Five Year Plan outlay for textiles has been fixed at $2.91 Billion, up 4 times from the 10th Five Year Plan outlay of $0.74 Billion
3
Value Chain In The Textile Industry
Arvind Mills Ltd.

Founded in 1931 with the aim of manufacturing the high-end superfine fabrics
Worlds largest denim producer at 110 million meters per annum

13% market in India 50% market share in leading domestic and international brands Domestic and international brands manufactured and sold by Arvind Brands and Retail Ltd. License Brands Arrow , US Polo, Gant, Nautica, Izod, Elle, Hanes, EdHardy Retail Brands Debenhams, Next, Megamart, Arvind Store, Club America JV Tommy Hilfiger Owned Brands Flying Machine, Excalibur, Newport University, Ruggers, Colt, Karigari
Business Strategy
Purchase Domestic and international brands licenses (to manufacture, market and sell in India)
Building several Power brands, while leveraging the strengths of developing other brands
Strong supply chain and logistics practices
Build its own retail chain (MegaMart) while increasing reach to expand growth brands
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Forecasting
Historic al Sales Data Branch Sales Experts Forecast
Bids Results
Horizon of forecast
Multiple Regression Analysis Extrapolative Forecasting
Forecast
Reports Contains 1. Forecast Reports 2. Comparative Results 3. Graphical Representation of Short, Medium, Long Range Forecast
Product Flow
Information Flow
PROCESS DIAGRAM
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CHALLENGES IN PRODUCTION PLANNING

Bargaining power of consumers Rapidly changing styles Shorter lead times - sources of competitive advantage
Fragmented and informal industry

12
PRODUCTION PLANNING AT Arvind Mills

Not Approved
Buyer requirements
Design
Goes to the customer for approval
Marketing dept. generates sale order with delivery date
Quality Control
Routing and scheduling
Planning of work
Planning of raw materials
Production Planning and Control
13
Sampling Process at Arvind Mills

Two types of samples Solid Color and printing
Quality Measures while sampling

Chemical Lab for research work and ensuring quality of the cloth
Prototype of manufacturing process carried inside the lab

Physical lab for checking the physical properties of the material
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MANUFACTURING PROCESS AT Arvind Mills
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Manufacturing Process at Arvind Mills
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PRODUCTION PLANNING AND CONTROL AT Arvind Mills

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

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

Planning Scheduling Inventory Control Production Costing Order Code Generattion
Shop Floor Management

Inspection of Raw Material and Finished Products Purchasing Generating Bill of Materials for Specific orders
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Material Requirement Planning
20
Optimized Production Technology
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Job allocation and scheduling sheet
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Controlling For Production Deviation

Made-to-order production Constant demand year-on-year Majority customers are international players ~ 90% Fixed seasonal demand cycle Stringent quality specifications Local customer base ~ 10% No fashion cycle Small order size Relaxed quality specifications
23
Controlling For Production Deviation

Two types of production deviations
Problems in production at a plant
Balance job transferred to another plant
Vendor default
Identifying back-up vendor through Vendor Managed System
24
Supply Chain Problem

Forward Logistics
Arvind Warehouse/Storage area Distribution centers Independent retailers Weak points Quality of forecast is not reliable for independent retailers Bullwhip effect a major constraint in forecasting Transportation to independent retailers for DSD (Direct Store Delivery) is complex Labour Intensive Orders are mix of different sizes, colours and quality Inaccurate inventory due to theft at warehouse and DC
Reverse Logistics
Customers Independent Retailers DC Arvind Weak points Discrepancy between physical flow of the back order and the inventory management system Difficulty in tracking the back orders
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INTEGRATING VENDORS IN PPC

Types of Vendors
Bulk Order Vendors (Arvind Brands)
Specialty Requirement Suppliers (low volume)

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INTEGRATING VENDORS IN PPC

Database of all vendors in ERP Order Placement, Product Receipt done locally at each plant Process Monitored by HQ team at Mumbai High Production Volumes
27
Recommendations
Use of demand-forecasting for timely procurement of yarn Implementing PPC at Fabric making unit in order to remove idle time and manpower constraints Implement Vendor managed inventory model to cope with excessive inventory issues at DC (counter bullwhip effect) Implementation of RFID to control theft at the warehouse and DC level
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Production Planning and Control

Arvind Mills Ltd.

Indian Textile Industry Overview 2013

Accounts for 17% of export earnings

Provides direct employment to over 35 million people

Value Chain In The Textile Industry

Arvind Mills Ltd.

Worlds largest denim producer at 110 million meters per annum

Strong supply chain and logistics practices

Multiple Regression Analysis Extrapolative Forecasting

CHALLENGES IN PRODUCTION PLANNING

Fragmented and informal industry

PRODUCTION PLANNING AT Arvind Mills

Goes to the customer for approval

Marketing dept. generates sale order with delivery date

Routing and scheduling

Planning of raw materials

Production Planning and Control

Sampling Process at Arvind Mills

Quality Measures while sampling

Prototype of manufacturing process carried inside the lab

MANUFACTURING PROCESS AT Arvind Mills

Manufacturing Process at Arvind Mills

PRODUCTION PLANNING AND CONTROL AT Arvind Mills

KEY PERFORMANCE INDICATORS @ Arvind Mills

ERP IN ARVIND MILLS

Shop Floor Management

Material Requirement Planning

Optimized Production Technology

Job allocation and scheduling sheet

Controlling For Production Deviation

Controlling For Production Deviation

Supply Chain Problem

INTEGRATING VENDORS IN PPC

Bulk Order Vendors (Arvind Brands)

Specialty Requirement Suppliers (low volume)

INTEGRATING VENDORS IN PPC

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