Professional Documents
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PR and Op - 1 (1) Final
PR and Op - 1 (1) Final
MANAGEMENT
SR.N CONTENT
O
1. INTRODUCTION TO FASHION INDUSTRY
2. WHY DID WE CHOSE FASHION INDUSTRY
3. CONVERSION PROCESS
4. PRODUCTION SYSTEM
5. CORE SERVICES
6. VALUE- ADDED SERVICES
7. PRODUCT DESIGN
8. PROCESS AND OPERATION DESIGN
9. PROCESS STRATEGY
10. SKU’S
11. PROCESS SELECTION
12. PROCESS PLANNING
13. CAPACITY PLANNING
14. FORECASTING
15. PLANT LAYOUT
16. PLANT LOCATION
EXECUTIVE SUMMARY
The objective of this report is to identify and evaluate the Production and
Operation Management of the fashion industry, which we will be operating in.
We will be providing a service to the consumers, in which we will procure the
goods and further sell it to the customers.
The conversion process includes the conversion of inputs such as land, capital,
labour, suppliers and equipment, storage layout , everything designed in a way
which helps in providing the outcome of best experiential shopping for our
customers.
INTRODUCTION TO FASHION INDUSTRY
OPERATIONS MANAGEMENT
Operations Management can be defined as the management of the
conversion process, which converts all FACTORS OF PRODUCTION. viz.,
Land, Labour, Capital, and Management inputs into desired OUTPUTS of
Goods and Services Inputs (FOPs) Outputs (Goods/Services).
STORE LAYOUT
CAPITAL FURNISHINGS
OWNERS FUND shelves, racks, hangers,
and display cases.
OUTPUT
EXPERENTIAL SHOPPING BRAND EVANGELIST
Our output would mainly Brand evangelists are our most
include the experience of our valuable customers—they
enthusiastically recommend
customers while shopping and our brand simply because they
best quality clothes through enjoy it, which is the most valuable
the experience. type of free advertising.
RANDOM FLUCTUATIONS
FEEDBACK
1. COUPONS, DISCOUNTS- These are extremely effective, providing coupon
codes and discounts lure the customers to get associated with the
brand, which gives the brand a chance to establish a contact which helps
the brand retain them.
2. PERKS AND INSCENTIVES – These are valid for all the stakeholders.
These are used to provide benefits to customers, so as to gain a
competitive advantage in the market.
3. BACKUP SUPPLIERS – These are extremely important as this helps in
getting the supply chain back on track and have as less as diversion
possible in case of any.
4. MAINTAINING PROPER INVENTORY LEVELS- Having less inventory is as
dangerous as having excess supply, which is why balance is important as
the company has to make sure that is doesn’t over/under-utilise the
resources.
Batch to mass:
As fashion industry is very dynamic and to keep up with trends, we need to change
our production regularly and hence we decided to produce tops, formal wear and
dresses in batches. However, for bottom wear and some basic tees we have decided
to produce in masses
1. SHOPPING EXPERIENCE
2. VALUE FOR MONEY EXPERIENCE
3. COMFORATBLE AND LONG-LASTING CLOTHES
VALUE-ADDED SERVICE
INFORMATIONAL SUPPORT:
Giving information about current trends. Suggesting the matching things which can
include accessories, matching footwear, etc. (suggestions would be based on taste of
the customers and not the sales personnel.)
Product design is the engine to drive the success of fashion industry, considering the fast-
changing fashion trend and turbulent market demand.
We have adopted the enhanced design strategy to quickly produce the most fashionable
items by collaborating with the manufacturer that does extensive investigation on the latest
customer preference and taste
We will use Original Design Manufacturing (ODM) strategy (that produced by someone and
we will rebrand it and sell) in order to enjoy the advantages of low costs and professional
design skills of the outsourcing service provider.
We would buy only those goods that keep in mind the less consumption of resources and
design for environment, wherein our products can be recycled.
BRICK AND MORTAR
It is commonly seen in the current fashion retail industry that manufacturers sell fashion
products directly to end customers through traditional retail outlets. As we believe that
online stores cannot replace the traditional retail stores because there are many customers
who like to see, touch, and evaluate the products in person before making a purchase, so
we do not intend to go online.
SHIPPING
Decisions about product shipment is important to both of us i.e. fashion manufacturers and
retailers, because they affect our costs, flexibility, and inventory management. To deal with
the problem of stock, we use a fast shipment strategy between our manufacturer and us
ensuring that once the inventory level of the decreases below a contracted level, the
supplier would help in the shipment of goods without an extra cost.
Beside the fast shipment strategy, we would enter in a multi-shipment contract with
manufacturer to help us in optimizing our inventory control policy and better satisfy the
market demand, in which the we would determine the ordering quantity for each shipment.
The multi-shipment contract will enable us in small batch productions to ease the peak
season pressure. This way we can enjoy a reduction in the inventory holding cost while
maintaining a high level of customer service.
IDEA DEVELOPMENT
• Brick and mortar retailer store wherein customers can check and try displayed
clothes and accessories
• PS: We aim to provide customers with trendy and high fashion products at not so
expensive price to fulfil their variable requirements.
TARGET MARKET
• WOMEN 15-50 YEARS
• Our target market mostly comprises of women of the age demographic 15-50 years.
As fashion is an everlasting field, it is better to keep such a wide range of customer as
it gives us more chance to cater to a bigger audience for our product.
MARKETING STRATEGY
3E'S APPROACH:
• EXPERIENCE
• EXCHANGE
• EVANGELISM
Use of furniture and exterior space - the outlook of the place helps to
grab the customers attention, and it also gives customer pride and a more
trust-worthy feeling when they are buying from a store which looks attractive,
especially when they are interacting for the first time.
Style of Architecture
Colour of paints
Design of entrance
Way of display
Maintenance and overhead costs- these are the costs every company has
to bear and a company could look for some alternatives which would help
minimise them.
2. In this type of business model CAD and engineering can be done as per
one’s requirement and budget.
1. TRAINING PROGRAMS:
For keeping up with proper display layouts, proper training would be
given to employees regularly.
In order to ensure smooth functioning, we would organise regular
meetings.
2. DESIGN STANDARDS:
Our floor layout plan would be free flow layout as it would give space
and help in free movement of customers.
The entry and exit points to the store would be placed in such a way that the
customers have to cover everything in the store, as in we will make sure they
pass by every section of the store. This will help us ensure that every product is
visible to the customers and nothing is being left out.
4. PRODUCT MATERIAL COMPLIANCE:
Retail data analysis and planogram plan.
Our product category would be clothing for women in all sizes and
accessories
With the help of planogram, we would increase our retail sales per
square foot and hence we would be able to decrease our cost.
PROCESS STRATEGY
SKU’S
SKU (pronounced “skew”), short for stock keeping unit, is used by
retailers to identify and track its inventory, or stock. A SKU is a unique
code consisting of letters and numbers that identify characteristics about
each product, such as manufacturer, brand, style, colour, and size.
WOMEN
XS 20 100
S 20 100
JEANS,
M TSHIRTS COTTON, 20 100
AND TOPS, HOSIERY, SILK,
L ONE-PIECE, LINEN, 20 100
XL FORMALS 20 100
XXL 20 100
6 5 4 120 600
PROCESS SELECTION
Customer Involvement
As we know customers want in-person service that they can’t get online. So, to
achieve this higher customer involvement we will gather customer data and
use it to personalize offers and interactions such as loyalty rewards discount
offers, coupons, membership cards etc. We will have employees which are well
– trained and skilled to make our customers experience outstanding. We will
even have feedback forms for our customers to get their reviews.
Capital/Labour Intensive
Resource Flexibility
TYPES OF CAPACITY
Efficiency / Utilisation
BOTTLENECK OPERATIONS
Planning in fashion retail Industry cannot be bottlenecked. It is an inflexible
operation and process. Each process can be carried out one at a time. Each
process is connected with each other hence the time taken cannot be reduced
via bottlenecking.
BREAK-EVEN POINT
Total fixed cost: This cost is fixed and will not change as sales increase or
decrease. These are expenses that your business will have regardless of the
sales volume. Some of our fixed costs are:
Rent
Salary
Licensing and permitting fees
Store fixtures (racks, hanger etc)
Equipment and technology
Janitorial supplies and services. (cleaner)
Business insurance
Signage
Some professional services like accountants
Other operating costs
ALL THE BELOW FIGURES ARE TENTATIVE
1000000
PROFIT
AMOUNT (in Rs.)
800000
TOTAL COSTS
600000 SALES REVEUES
400000
BREAK - EVEN
200000 POINT
0
STYLE 1 (30 units) STYLE 2 (50 units) STYLE 3 (80 units)
OUTPUT
The X-axis shows the total output, and the y-axis shows the amount, and our
break-even point is 50 units, as ₹6,00,000. This means that any output which is
below 50 units, will result in loss for the firm. Similarly, any output above 50
units will yield a profit.
The firm will need to procure at least 50 units to get in a situation where it
doesn’t face any profit or loss. However, it will need atleast 80 units to achieve
the economies of scale.
COST VOLUME RELATIONSHIP
1000000
900000
800000
700000
AMOUNT (in Rs.)
TOTAL COSTS
600000
VARIABLE COSTS
500000 FIXED COSTS
400000
300000
200000
100000
0
STYLE 1 (30 units) STYLE 2 (50 units) STYLE 3 (80 units)
OUTPUT
As the total fixed cost is always the same, we can see that out variable cost
increases with increase in units. As the number of units increase, there is a
diminishing rate of gain obtained from one additional unit of consumption or
even production.
FORECASTING
0 0
1 2 3 4 5 6 7 8 9 10 11 12
X axis shows months, y axis shows demand, for the above graph. Series 2
represent 0.1 exponential, series 3 represent 0.2 exponential, series 4
represent 0.3 exponential.
As per the above graph, x axis represents months y axis represents demand.
The blue bars portray the demand, red line represents the 3 months average
and grey line represents the 6 months average.
WEIGHTED AVERAGE
PLANT LAYOUT
Our plant layout is based on the retail layout format and we have used free
form layout for our customers. Our layout will have the following signage and
graphics:
Promotional signage in the display area to attract the customers
Point of sale: During the sale seasons when some products are given on
discount or if any product is given using the promotional strategy of buy
1 get 2 free.
Lifestyle images: Here, we will place a television unit behind the cash
counter as well as at equal intervals to display the videos, images of
models wearing our brand so that customers get attracted to it.
Our store layout will look like this:
PLANT LOCATION
QUALITY OF 4 4 4 16 20
LABOUR 5
PROXIMITY TO 5 5 3 25
CUSTOMERS 5 15
5 5 3 25 15
CUSTOMER TRAFFIC 5
PROXIMITY TO 4 5 3 20 12
SUPPLIERS 4
5 4 5 20 25
COSTS
5
28 28 21 126
TOTAL
29 102
After considering all the above factors we think that option A i.e., Surat
would be a better location and might give us competitive edge for our
fashion retail outlet rather than B i.e., Mumbai.
V (200, 250)
R (100, 150) C (250,150)
X-AXIS
CONCLUSION
Fashion Industry is definitely one of the most dynamic industries, with new
trends and fads coming in every day, however, it is growing at a rapid speed
too. This is one of those industries, which has rare chances of going backwards.
With more people realising and expressing their inner selves through fashion,
investing in this industry is definitely the right decision to make. As this is can
be seen in the report as well.
Because of this reason, production and operation management is even more
important, in an industry for which availability of product at the right place and
at the right time is of utmost importance, management its production and the
smooth working of its operations is what can make or break the company.