North South

University
Submitted To
Wasif Sayed Choudhury
Lecturer,
Department of Management
Faculty Initial: WSC
Course: MGT314
Section: 18
Report on “Polka Dots Fashion Ltd”
Submission Date: 17th April 2019

Submitted By
NAME ID

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Executive Summary
This report is prepared in the context of Polkadots which is a Bangladeshi textile company. In
this report, we have analyzed the market using PESTLE analysis which shows that though there
are few things unfavorable for the RMG sector but still it has a positive future ahead with
effective rules, regulations and environment. The report also showcases the company overview
by discussing about the company’s products and performance in the market.

The report will also show the existing process map of Polkadots and based on this process map,
we have come up with a suggested process map that will help the company have a more efficient
working process along with better outcome. We have provided a brief overview about the supply
chain management of the company using Kraljic Matrix, Bullwhip effect and SAKO Institutional
Trust Model. We have also conducted the forecasting of the company where it shows that the
company is using qualitative data for their forecasting which is leading them to some forecasting
error and we have come up with some recommendations to reduce these errors.

The report will also provide knowledge about Polkadots’ capacity management and quality
management. The analysis show they are managing their capacity and storage using the
qualitative data and we have also used the forecasting information while discussing about the
capacity management and recommendations to improve the situation. Quality management
shows how the company inspects their quality and assure the quality using different methods.
While preparing this report, we have also used our knowledge about Toyota Production System
to match the principles with the company’s activities

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Table of Contents
Industry Analysis..........................................................................................................................................1
PESTLE Analysis........................................................................................................................................1
Company Overview.....................................................................................................................................3
Process Map of Polka Dots..........................................................................................................................4
Existing Process Map...............................................................................................................................4
Suggested Process Map...........................................................................................................................5
Supply Chain Management..........................................................................................................................6
Bullwhip Effect.........................................................................................................................................6
Supplier Relationship based on Kraljic Matrix.........................................................................................7
SAKO Institutional Trust Model Polkadots:..............................................................................................8
.................................................................................................................................................................... 9
Forecasting of Polka Dots..........................................................................................................................10
Forecasting Error...................................................................................................................................10
Recommendations.................................................................................................................................11
Capacity management...............................................................................................................................11
Production capacity...............................................................................................................................11
Storage capacity....................................................................................................................................11
Future capacity improvement...............................................................................................................12
Insight:...................................................................................................................................................12
Quality Management.................................................................................................................................12
Bibliography...............................................................................................................................................14

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 Industry Analysis
PESTLE Analysis
Political Analysis: The RMG and textile industry of Bangladesh are day by day developing and
contributed a vital role in emerging the economic growth of the country. However, due to the
presence of political involvement, strike, political unrest, labour unrest, conflict etc. the RMG
sectors of Bangladesh are facing many problems and dilemmas to run the factory smoothly and
efficiently. Due to the presence of corruption, lack of rules and regulations, democratic practice
and systems among the political parties, this hassle mainly arise.

However, government recently takes some positive initiatives to support the garment sector such
as allowing the foreign investment, incentives for foreign investment, reducing the import duties
for spares and capital machineries, providing policies for export and import and tax holiday.

Economic Analysis: According to the news from the Daily Star on June 2018, the ready-made
garment sector accounted for about more than 83% of the country’s export having 16% of their
contribution to the country’s GDP. Bangladesh now has around four million workers working
under 4000 factories in RMG sector. Approximately, among the total employees 78% are women
who have a vital role in process of decision making, and reducing poverty in their family
(BGMEA: 2016). This industry created the platform for about 2.8 million women to take part in
new productive role. Moreover, this industry is providing opportunities for reducing the
unemployment rate and banks are also making profit from this industry especially by the export
and import sector.

Social Analysis: A significant number of people in Bangladesh are unemployed where the large
proportion is women. Like other RMG industries, Polka has a significant proportion of women
employee. These women employees are allowed to take family decision, can reduce poverty in
their family, have contribution to a proportion of savings, and make their children educated and
most importantly now they are aware of health and safety issues due to the development of safety
committee in the factory. Thus, day by day their standard of living is improving because of this
initiative taken by the RMG sector.

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Technological Analysis: Unlike the big giants of the international market such as China,
Taiwan, Vietnam etc., Bangladesh is not that much technologically developed because to
develop ultra-modern technology, firstly they have to spend a large amount of money. The
operational and fixed cost is day by day increasing though, import of machinery and technology
for garments are declared duty free by the government. It would be a huge favour for the garment
industry if they have the ability to purchase it from the local market.

Environmental Analysis: Garment industries have large impact on causing pollution in

Bangladesh especially the water and air pollution. Poor management of waste and improper
system of drainage is mainly the reasons of these pollutions.

Legal Analysis: For the more betterment of the RMG sector, government has taken some
initiative to increase some of the compliance and legal issues of this sector. As it is the common
phenomenon of garment industries’ workers of not getting sufficient amount of wages,
remuneration, proper health and safety training and working environment, thus government
decide to initiate some laws and order systems for these issues.

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 Company Overview
Since 2009, Polka Dots Fashion Ltd has been manufacturing and exporting 100% export oriented
readymade garments woven items abroad. Polka dots fashions is a single ownership business and
it has the most highly skilled management to solve and collaborate any kinds of technical and
manufacturing issues. The factories of Polka maintains the production of manufacturing
readymade garments with the highest quality assurance so no complain can be held from the
clients end. They maintain a calm and healthy relationship with their clients with their highly
experienced merchandizing team who communicates with the clients for any means necessary to
fulfill the needs and wants.

Woven is one of their soul product as well as Men’s long pants, Men’s shorts, Cargo pants,
Ladies long pants, Denim long pants. The factory has over 700 experienced workers working on
2 shifts with dedication and they are highly skilled and trained from the best advisers in the
manufacturing business. It has 56000 square feet area with nine storage building.

The factory follows and provides in house training and skills development opportunity for the
workers to make them more efficient and motivated towards their work. Not only do they
provide the workers with the skills to help them grow but also they have maintained a sound
environment for the workers to work safely and also reward them on monthly basis to
compensate for their dedication with other source of benefits like bonuses and festival holidays
to keep the workers up to the mark in their works.

Polka Dots Fashions Ltd deals with some of the most renowned buyers in the market like MGL,
GEMO, MAX, LPP, Living world. The company follows all the strict rules and regulations as
per the company acts of safety and quality control as set by the manufacturing act of Bangladesh.

Vision: Polka Dots Fashions Ltd vision is to be the best garments exporter in RMG sector by
maintaining the best quality readymade garments supplier.

Mission: Then mission is to provide the best price to their potential buyers with better flexibility
and delivery on time as set by their buyers.

Goals: Their goal is to produce the highest quality readymade garments like woven, denim and
others product and become the market leader.

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 Process Map of Polka Dots
Existing Process Map No

Start Receiving the Knitting the Inspecting the

order fabric fabric Is the fabric
appropriate
?

Yes

Pre-inspecting Finishing Washing Sewing Cutting Dying Section

No

Yes
Is the product
ready for Final packaging Shipping
packaging?

Stop

Figure 1: Existing Process Map

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 Suggested Process Map
In the suggestions, we have added a product grouping which will sort out all the different
garment products based on their sizes. This will also ease the packaging system. According to the
current process map, the company has no final inspection that can ensure the proper and safe
packaging of the produced goods. Thus, we have suggested to add a final inspection in the map
that will evaluate if the product is properly packaged and if all the requirements are fulfilled for
the shipment as the final packaging can influence the consumers’ buying behaviour.

No
Start Receiving the Knitting the Inspecting the Is the fabric
order fabric fabric appropriate
?

Yes

Finishing Washing Product grouping Sewing Cutting Dying Section

Pre-inspection

No No Is the
packaging
correct?

Is the product Yes Yes

ready for Final
Packaging
packaging? inspection
Send for
shipping

Stop

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 Supply Chain Management
Like all other manufacturing companies, Polka Dots Fashion Ltd has few specific suppliers for
their supply of raw materials who had been there with them for their quality supplies and
promised timeline. After every order received from their buyers Polka Dots Fashion works as a
team in terms of getting the supplies of raw material and converting them into finished goods in
their own factory. They have their own distribution channel who is very experienced and skilled
and also with the most effective packaging and delivery man to deliver products.

Polka Dots Fashion Ltd starts the process firstly by purchasing the raw materials of their
products which they will be manufacturing. They finds the best quality of materials like the
zippers, buckle, clip and other materials. After a lot of research and tested raw material the
expert merchandizing team selects only the best quality to start with the manufacturing. Most of
the raw materials are also imported from china just to make sure they meet the buyer’s
requirement if the raw materials they find locally is not up to their expectations.

Raw Material Supplier Warehouse Manufacturing Process Distributer

Bullwhip Effect
In cases of the festivals from the European countries that is not known to the Bangladesh people
sometimes Polka Dots Fashion Ltd suffers from bullwhip effect as they use inventory only when
they need them for the production. The festivals increase the demand for the manufacturing but
it’s never continuous in terms they always keeps extra stock for their fixed customers.

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Supplier Relationship based on Kraljic Matrix
Polka Dots Fashion Ltd suppliers are segmented based on the financial risk and supply risk.

Leverage Products: In the manufacturing industry like Polka Dots Fashion Ltd has huge
number for suppliers for Metal items like metal buttons, zippers, chains even though the price of
these metal items are high there is also huge numbers of suppliers locally and also importers who
supply the items to the factories or the companies like Polka Dots Fashion Ltd.

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Strategic Products: Most of the cases Polka Dots Fashion Ltd faces challenged in the supply of
the chemicals color because the suppliers of these chemicals are very less in the market and there
is average demand on the supply depending on the buyer’s requirement.

Routine Products: Polka Dots Fashion Ltd has huge number of suppliers for the products like
the fabrics as its locally made they have huge number of options to check with the quality of the
fabric in time of the manufacturing.

Bottleneck Products: For products like the hand tags and tag line, suppliers are less in the
manufacturing market only very few suppliers can supply and also Polka Dots Fashion Ltd have
specific requirements for the tag lines and hand tags as most of the buyers wants them all done in
house sometimes the factory faces huge challenges to get these manufactured due to the buyers’
requirement.

SAKO Institutional Trust Model Polkadots:

Polka Dots Fashions Ltd has some fixed buyers from whom they receive order on regular basis.
The quantity of manufacturing for those buyers are also fixed which helps the company to run
smoothly with their production. With the growing demand of the production from the buyers
sometimes Polka Dots Fashion Ltd fails to meets the quality standard on the production due to
the supplier’s raw material delivery timeline. Even with all the ups and downs they maintain
goodwill trust relationship with the buyers. Some of the selected buyers they work with are
CAMIEU, IDG, LPP, MAX, MGL, MIM, PEACOCK, SONAE, ROADRUNNER, CJ
APPAREAL, RIACHUELO. Most of the export zone for Pokla Dots Fashions Ltd is USA, UK,
Spain, Italy, France, Poland, Russia, Portugal, UAE & KSA.

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Relationship Type MIM
OCR
(Obligational) PEACOCK

ROADRUNNER

MAX

MGL

CJ APPAREALS

ARC
(Arms Length)

Short Medium Long

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 Forecasting of Polka Dots
Forecasting simply means the process of making assumption or prediction regarding the future
based on the data of past or present. Forecasting plays an important role in the business as it can
affect the various filed of the business including the accounting (cost and profit estimates),
finance (cash flow and funding), marketing (pricing, promotion and the strategy). Forecast in the
business is also used to meet the demand with the appropriate supply. Thereby Polka dot fashion
too understands the importance of the forecasting systems and attempts to incorporate the best
forecasting method appropriate for the smooth flow of production and the operation of the
company.

Polka dot fashion generally carries out their production based on the capacity and the market
demand. The company uses a seasonality time series data in order accomplish their forecasting.
Thereby for their winter collection of garments the company starts to gather all the production
materials in the summer and to meet the demand for summer the starts their production in winter.
To obtain a smooth production flow the company also assemble an inventory in the preseason
period to meet the demand in the sessional period. The company, Polka dot fashion gets on hold
of the fabric around 90-120 days. The average order that the company receives are an average of
130-140 orders. The company uses weighting average method, thereby they value more to the
most recent data.

Forecasting Error
As mentioned before Polka dot uses time series data for their forecasting thereby the company
had stated that they sometimes to face forecasting error due to the irregular variations observed
in the weather. The company also has to face a challenging forecasting due to sometimes of
temporary shortages, breakdown in machinery and various other calamities. When such
circumstances arises either the company asks for extension in time or they simply subcontract
work to other companies who helps Polka dots to meet the demand required. In situations when
order gets canceled due to error another subcontracted company with Polka dot usually supply
the product on their behalf. The limit to error accepted by the company is 200 form 1000. Polka
dot accepts 2.5 limit error.

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Recommendations
For Polka dot to initiate a more accurate forecasting we suggest the company uses an exponential
smoothing method. This method of forecasting may provide an effective forecasting for polka
dots than just time series data method as it would provide the actual and the forecasting value.
This technique will also offer the company with the most recent observation with the highest
predictive value. Thereby Polka dot can minimize their inventory cost with higher customer
satisfaction. Polka dot for their supply management chooses wisely their suppliers and fully
attempts to establish a long-term relationship with the suppliers this matches with the long term
principal of Toyota Production.

Quality
Higher level managers as well go and visit the industry to ensure quality and to ensure the
smooth flow of the work and to figure out the root cause of the problem in the production
problem and the quality defects. This also puts a heavy impact on the employees, increasing
motivation. This align with the 12th principal of the Toyota Production System “Genchi
Genbutsu”.

Capacity management
Production capacity:

Polka dots fashion ltd has estimated its annual demand for production. As they have expert
employee they first estimate their capacity and take order accordingly. They operate machine
less than 16 hours which is 70% of the capacity. They get lead time from 6 months to 8 months.
They use several types of machine and equipment for the production. For example, they use 4
lined number and 4 cutting table for their production. Using these machines, they get their
finished product.

Storage capacity:

Polka had built new warehouse for the increasing amount of produced goods so that it can
accommodate all finished goods. Polka has planned to separate its goods into some category in
the warehouse as they have various produced goods for women wear. Therefore, its storage
capacity will be utilized properly. Now they have to keep some produced goods in the production

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floor because of the production shortage. Considering this fact, they have planned to rent a floor
in near building for short period.

Relating to 14 principles:

Polka dot use visual control to maintain their storage capacity. Visual control principle is used so
that no problems are hidden in their warehouse. Which gives them the prove and idea how much
their products are in the warehouse. This hidden camera also ensures that no unethical activities
is happening this matches with the visual controls of Toyota Production.

Future capacity improvement

Polka is working to improve the production capacity considering the huge demand on market.
They have planned to build a new garment in Rajendropur industrial area. They have already
brought land for this purpose and will start construction soon. This is how they are trying to
approach new market. The company has to grab the growing market within short time since
competitors are there.

Insight:
Polka has to overcome storage shortage problem with short period of time. They can build multi
storied building for warehouse. They need to increase work shift hour for maximizing its
capacity as the future demand is expected to increase.

Quality Management
Quality management is the whole process of evaluating all the processes and systems efficiently
by ensuring excellent product design, the process of product implementation and development.
Polka Dots Fashion ensures that they manufacture high quality product with proper inspection
and assurance of each of the process being run. Producing standard quality product is their main
motive as they are 100% export oriented Garments Company. The quality management of Polka
mainly consist of two parts which are- Quality Control and Quality Assurance. Quality
Control is basically a particular part of Quality Assurance.

This quality control process of Polka is mainly based on three personnel of this factory who are
the: Quality Controller, Quality Inspector and finally the Quality Manager. As the process of
production started the quality manager, inspector and controller observe thoroughly each steps of
checking materials, collecting materials, washing, sewing, cutting and packaging to ensure every

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process is done effectively. Until the standard of the goods matches, it is not allowed to send for
further inspection and the whole production process will not run until the problem is solved. As
soon as the standard reaches up to the mark, the finished goods are immediately sent for
inspection.

After completing the production process, the finished goods are thoroughly inspected by the two
inspection process:

 Pre-Inspection Process: In this process, Polka mainly outsource third party for
inspecting the standard and quality of the product. Moreover, they also match the product
according to the demand of the client and if anything does not match according to the
requirement, it is send to the product line again for fixing the particular problem.
 Final Inspection Process: After completing the pre-inspection process, the final goods
are sent for the final inspection. Here, the goods are mainly inspected in order to prepare
it for shipment.

Other than these two processes, there are some other processes under the Quality Assurance
system of Polka. These include:

 Design Department: Here, basically the technical details of the goods are examined. The
processes include in this department are- seam margin, allowances of seam and hem,
notch depths, grading and pattern making.
 Cutting Department: The pattern makers are basically accompanied and identified by
this department.
 Preparation of sewing: To stop the chances of mixing each part of the fabric is
individually labelled while preparing for sewing. Moreover, this preparation is also
important for accurately identifying the back and front part of the fabric.
 The Production Control and Planning Department: This process focuses on to the
documentation and designing of the system to ensure checking conformance of the
specific shape and size of the garment which is basically important for the final
inspection also. Moreover, to check the fault rates on a regular basis they maintain and
develop the forms which collect the data on a weekly basis.

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Apart from all of these processes, Polka also takes regular feedback from their customers and for
the defected products; they also have the system of return policy

Bibliography

Beattie, A. (2019, March 12). Business forecasting: Understanding the basics. Retrieved from
https://www.investopedia.com/articles/financial-theory/11/basics-business-forcasting.asp
http://www.bgmea.com.bd/

https://www.thedailystar.net/opinion/perspective/the-next-chapter-our-rmg-sector-1584409

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