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Operations Management at Mehmood Textile Mills

Operations Management at Mehmood Textile Mills

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Published by: Mohsin Rahim on May 09, 2011
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Operations Management at mehmood textile mills Introduction To Mahmood Group Of Industries The Group is in cotton business for the

last 50 years. The projects include five Spinning Units, Two Weaving Units, Captive Power Project, Number of cotton Ginning Factories composite with Oil Mills, Leather Tanning Unit, a company for trading operations, Agricultural & Fruit Farms. The total turn over of Mahmood Group is around Rs.4 Billion (US$: 70 Million). Export Sales constitute 3.5 Billion Rupees (US$: 60 Million). The Group owns and operates seven companies located in various parts of the country, comprising of twelve modern production units. The group is currently employing 3500 personnel in its different projects. The Group has been awarded seven Merit Trophies for best export performance during different years by Prime Minister of Pakistan & other High-ups through Federation of Pakistan Chamber of Commerce & Industry an Apex body of Trade & Industry. In addition, Corporate Excellence Certificate 1998 has been awarded to them in Textile & allied Sector by the Management of Association of Pakistan (MAP). As per data collected by Vital Information Services (Pvt.) Ltd., the name of this Company was ranked as one the fastest growing Companies of Pakistan. To build more confidence in their products by their valued buyers Certificates under ISO 9002 have been achieved separately for our five Spinning and two Weaving unit from (URS) (United Registrar of System Ltd.) U.K. Introduction of the Company: Mahmood Group is vertically based on integrated industries and started business in 1935, by setting up a tanning unit. Since then, the group has grown immensely in the fields of cotton ginning, spinning and weaving. Objectives: 'Farm to Fabric' is the objective of the company. Being vertically integrated, the group possesses its own vast cotton farms in the area of Multan, a region of Punjab. The cotton ginning, seed oil extraction, spinning and weaving units are located at strategic places for efficient and harmonious working of the various production units. Current Performance: The only group which starts from cotton farming to ginning, spinning and weaving, which gives it a distinction over the entire textile industry of Pakistan. Certified by ISO, Supima, Lycra and Oko-tex.

Achieve Excellence in the quality of our product. Exports ratio = 90%. our vision is excellence in terms of quality with satisfied internal and external valued customers. We believe in passing on the benefit of less cost to our buyers instead of increasing our own overheads. however there is no compromise on quality or machinery Future Plans: In an era of trade globalization. Operate through professional Team work. Vision Statement To be recognized internationally and locally as dynamic. We at Mahmood Group are demonstrating sustained growth over the period of last 3 decades with reasonably good return on investment which have been utilized to give high quality products to our valued customers at least possible prices. state-of-the-art equipment. Retain our position as leading and innovative in the Textile Industry. Turnover = US$ 70 million. The objective is to achieve continuous improvement in quality through professional management. Excel through continuous improvement by adopting most modernized technology in production. Be a part of country s economic development and social Prosperity . quality conscious and ever progressive Textile Product manufacturer in the textile Industry of Pakistan. and highly motivated workforce. Responsible Corporate Citizenship Core Values: The group is always open for strategic alliances & long term relationships (Core Concept and basic idea).000. Mission Statement Mahmood Group is committed to: Be ethical in its practices. Employee Turnover = 10%.Employees = 11.

The concept of consistent quality is simply not preferred as the company always wants to have increasingly better quality which gives them . Core Competencies: The core competencies of Mehmood Textile Mills are as follows: Ø Quality Standard Ø Buyer Satisfaction Ø Efficient and Effective Staff Competitive Priorities The importance of Competitive priorities is essential in every successful organization. This would ultimately mean higher profits as more competition. which is given most preference in Mahmood.Operations Strategy Goals: The main purpose again is to have customer satisfaction. Quality: Two main things persist in this scenario of quality: 1) Consistent Quality 2) High Quality Quality is the thing. The basic factor to be viewed is to look for is that which one is given the most preference and why. The objective is to always have the best and most modernized machinery to have the best quality. The four main core competencies are 1) Cost 2) Quality 3) Time 4) Flexibility Cost As far as cost is concerned this group is vertically based so overall cost is less then any other textile unit in Pakistan.

But this flexibility is only to a limited extent according to the capability of the machinery." Flow Strategy: There are three possible flow strategies. Which means no standard product. This basically depends upon the requirement of the buyer.a big edge on there competitors. 1. The quality policy of the group states as follows: "We are committed to the achievement of excellence in the quality of our products. 2. This is done by motivating all employees towards the satisfaction of our customers and with the use of best quality raw materials. which an organization can adopt. 3. In a sense the quality can be consistent as it is for a specific customer a specific and consistent quality is to be maintained. Make-To-Stock Strategy: Its for line flow strategy & high volume production. Strategy Used In Mehmood Textile: . The components exist in organization but they are assembled on order. The buyer gives up a specification and production has to be done accordingly. This is because there are some times some alterations and specifications made in the order. Make To Order Strategy: Its for flexible flow strategy and customized product or services. Assemble To Order Strategy: Its for intermediate flow strategy. Strategies Based On Flows: There are 3 strategies based on three flow-strategies. (1) Flexible flow strategy: (2) Line flow strategy: (3) Intermediate flow strategy: Flow Strategy Used In Mahmood Textile: The flow strategy used in most of the textile mills and Mahmood textile is Intermediate Flow.

The General Manager and his authorized subordinates usually resolve the conflicts within the mill between workers and other minor problems. Here the product is mixed so that variation in quality may be minimized and the fibers are parallelized. The Managers also play a special role in these decisions and the role of the General Manager is also very vital. The Top Level Management under the supervision of the Chairman takes the big decisions like Expansion of a particular unit or the making of a new unit. Process Different Process Of Spinning Mills Blow Room: This is the first department of a spinning Mills. Usually 57% waste is extracted in this stage. This basically reflects towards are more centralized decision making system. The department heads are supposed to cope up with their own department s problems and there requirements as per. Card: This is the second department in the line of spinning period. Simplex: . The waste extracted is almost 56% Drawing: The product from carding comes to drawing section. The cotton is once again cleaned short fibers and waste is extracted and the strand of fibers is brought in such a position that further drafting can be done in the subsequent processes. Decision Making: The decision-making authority for high and big decisions is mainly left with the Top Management that constitutes of the Chairman and the Directors. The main object of Blow Room is to blow out the waste from the cotton which is blown through the machinery by suction blowing and beating method. The waste is extracted by gravitational force method. but again the confirmation for the implementation of any order needs to be confirmed from the Top Management. The directors themselves mainly take the orders and similarly they are the ones who negotiate of rates with their respective buyers.The company being a textile like most of the other goes for the make-to-order as the production is made right according to the yarn.

Even though the company usually uses up its own ginning factories cotton but still periods can be there when the cotton from the market needs to be purchased.From drawings the sliver comes to simplex machine. Availability Of Raw Material: One of the major factors for their location in Muzaffargarh is that it s connecting cities like Multan and Bahawalpur are cotton growing areas and availability of raw material is not a problem at that particular area. Room For Expansion: . There are different methods for spinning of yarn but ring running is most common method used in the world. as facilities were available. Packing: To give the yarn extra strength and elasticity the yarn is conditioned by giving some moisture and packed. Spinning: In this process the yarn is manufactured from roving by drafting and twist insertion. These locations are on the following basis. In auto cone yarn is cleared from defects by any yarn clearer and with fix length is converted into a package according to the requirement of buyers. Favorable Labor Climate: The labor plays an important role in the selection of the labor-intensive company. Proximity to Market: The firm can easily serve the other markets. In simplex the fibers are once again drafted and little bit twist is inserted. So that for final spinning the strand of fibers may get ready. Auto cone: The yarn made in ring spinning is brought to auto cone. Taxes and Real Estate Costs: The real estate's cost at that time when the mill was established was too much lower as compared to the main area in the city which helped the group in developing the city and the it s mill. now the yarn is ready for dispatch. Location The Group has four of its units located in the District area of Muzaffargarh while the other remaining one named as Masood Fabrics is located at KabirWala district. This location of Shah Sons is also near by Multan which helps the mill in getting its spare parts. So the main reason for the selection of the site outside city was that the labor was available at the cheaper rate. Mainly the production of the Raw Materials is there.

This is why the mill in here added more four units. Importance Of Forecasting: Forecasting help in adjusting three main functions: Ø Human Resource Ø Capacity Ø Supply Chain Management Forecasting Approach: Generally two approaches are used for forecasting activities.Another factor was that there was a potential to grow more in the market. These approaches are: Qualitative Approach: This approach incorporates some important factors like decision maker intuition emotion. experience and judgement. a mathematical model adjusted by manager s good judgment.e. Effective planning depends on a forecast of demand of the company products. It may involve taking historical data and projecting them into the future with some sort of mathematical model or forecasting may involve combination of these i. Forecasting Forecasting is the science and art of predicting future events. This approach include following techniques: Ø Jury of executive opinion Ø Sales force opinion Ø Delphi Technique Ø Consumer market surveys Quantitative Approach This approach implies a variety of mathematical models that use historical data and causal variable to forecast demand. Technique used under this approach is: Time Series Models: Ø Moving averages Ø Exponential smoothing Ø Trend estimate projection .

Therefore the company avoids keeping them.000 lbs. each) Ideal Capacity =360. Plants: There are five spinning units in the group with all of them having almost the same capacity to produce. Capacity cushion don t not allow first class finished product. Enhancement In Capacity: . The facility can be a workstation or entire organization. Peak Capacity =410.000 lbs Effective Capacity =300. Capacity Information For A Unit: 1 Day= 24 hrs (3 Shifts of 8 hrs. Four units are located in the Muzaffargarh district and the other one named as Masood Spininig is located in Kabir Wala.Casual model: Ø Simple linear regression Ø Multiple regression Capacity Capacity is the maximum rate of output for a facility.000 lbs NOTE: Count Variations can have effect on the capacity. Spindles in each plant: Unit 1 15360 spindles Unit 2 19600 spindles Unit 3 15360 spindles Unit 4 15360 spindles This gives an average of about 16420 spindles per unit. Capacity Cushions: The company basically produces according to its capacity.

Hybrid system . service and information with customer demand. Periodic 3. 1.There is no particular procedure for enhancement of capacity but mainly the help of following steps does it Ø A-grade raw material is used so that less waste may be extracted in the manufacturing process and more production can be obtained. Employees in the store have charts after Inventory level and report to management if Inventory level reaches to minimum level so that new order is made. Supply Chain Management Supply-chain management aims at synchronization of a firm s activities/ functions and those of its suppliers to match the flow of materials. For an organization Inventory Management is very important process. Continuous system 2. Different computer programs and monitoring charts are used for keeping the Inventory minimum and maximum levels. Ø Average method is used by the Mill because according to them it s is the most suitable for the organization and is determined in the policy of the organization. Systems For Inventory Management: These are three types of systems. Inventory Tracking: Different methods are used for the tracking of Inventory. Ø Wastage of material at different manufacturing stages is controlled and whatever is re-useable is reused. Ø Economic Order Quantity (EOQ) is also used to some extent as it is a general entity used by every organization. Supply Chain In Mehmood Textile: Inventory Management Inventory is stock of anything held to meet the future demand for organization.

No inventory is kept which avoids holding costs. called staffing plan. consistent with the company s strategic goals and objectives. Reorder point: The company uses the optimal replenish system to an extent. generally focuses on production rates and inventory holdings. Level Policy: . Chase Policy: Demand is followed by adjusting production rates. whereas a service firm s aggregate plan.System Used In Mahmood: The company makes use of Continuous or perpetual inventory management system where the records of the finished goods and other inventory are kept up right upto date with the help of stores and other people assigned for this particular task as for the company this helps in having the work done in a more efficient manner. called a Production Plan. The Purposes Of Aggregate Plans: Aggregation: The aggregate plan is useful because it focuses on general course of action. centers on staffing and other labor related factors. Aggregate Planning A manufacturing firm s aggregate plan. For different items different minimum inventory level serving as the reorder point. without getting bogged down in details Aggregate Planning Policies: Reactive Policy: It means one has to follow the demand patterns by adjusting all three factors Ø Production Rate Ø Work-force labor Ø Inventory level Under reactive policy there are further two categories. But if calculated on average basis by the company I was informed that it has about 2 weeks are used as a reorder point.

The company makes use of Undertime Overtime And according to the company most of the times there is no under time and if it is it s almost negligible.e. Material Requirement Planning Material requirement planning system enables businesses to reduce inventory levels. Further fluctuation of demand is not very much there therefore this is the most feasible strategy for the company. The objective is to achieve continuous improvement in quality through professional management. Inventory Records 3. The inventory of Raw Material i. It mainly has three components 1. When demand is high it is met from inventory. state-of-the-art equipment. When demand is low it results in piling of inventory.Demand is followed through inventory level while keeping production rate constant. Bill of Material (BOM) 2. our vision is excellence in terms of quality with satisfied internal and external valued customers. Strategy Used In Mehmood Textile: The company basically makes use of the level strategy where about 350 workers work in a particular unit. The master production schedule is prepared on almost weekly basis but is checked and reviewed on almost daily basis by the concerned authorities. . and highly motivated workforce. Overtime payment is made according to the normal wage rate. We at Mahmood Group are demonstrating sustained growth over the period of last 3 decades with reasonably good return on investment which have been utilized to give high quality products to customers at least possible prices. future vision In an era of trade globalization. cotton is on seasonal basis all the available and required cotton is stored in that duration. to utilize labour and facilities in a better way and improved customer-service. Master Production Schedule (MPS) As the company s only finished good is yarn there fore the bill of material is pretty simple as well.

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