Company Background

Amalean brothers started their journey in apparel industry 27 years ago in Ratmalana with a 30
workforce . The first business was began with a hand shake with the Mark & Spence
representatives and Mahesh Amalean, where no formal agreement was signed between the 2
companies. Today this company has grown to be the largest apparel manufacturer in South Asia
by providing employment opportunity for over 60,000 people in 34 manufacturing facilities
which are situated in various part of Sri Lanka and worldwide with their design officers and
production facilities.

MAS was named using the first letters of 3 Amalean brothers who are Mahesh, Ajay and Sharad.
MAS enjoying an annual turnover over US$ 1 Billion as of year 2012. MAS secret for success is
the commitment to engage in continuous improvements in innovation and sustainable apparel
solution. And the other success factor is the strategic partnership with world class brands such as
Victoria Secret, Marks & Spencer, Nike, Speedo and Triumph International. MAS Operating
System which is inspired by Toyota Production System of Lean Manufacturing has given a
competitive advantage over their competitors.

MAS Intimates largest customer is the Victoria Secret where VS Pink is the largest contributor
which products are focused on teenagers while VSX focused towards sportswear.
Next largest contributor for MAS Intimates revenue is the Marks & Spencer where they have
built a world’s first eco-friendly 100% Carbon Neutral facility in 2008.

Even though Nike is the largest customer for MAS Active, they have worked closely with MAS
Intimates to develop and manufacture Nike Revolutionary Sports Bra which became the highest
selling Sports Bra in United States.
MAS Intimates Vidiyal is the 33rd production facility with providing job opportunity for 800
employees in North of Sri Lanka which have been badly affected by the ethnic war. It was
declared open on the 19th of January 2012. Vidiyal’s main aim is to develop the economy of the
area with the help of government and create job opportunities for the internally displaced people
and aiding rehabilitation efforts via employment and training. At the moment their main
customers are VS Logo, H&M and Oysho where average 600,000 Briefs are produced monthly.
Environment of the Organization
The organization works within the framework provided by various elements of society. All such
elements which lie outside the organization are called external environment or simply as
environment. Also, the organization may create an environment internal to it which affects the
various subsystems of the organization The organization needs to properly understand the
environment for effective management.

Factors controlling organizational environment Factors that control an organizational

environment are classified into internal & external factors.

Internal environment the internal environment is composed of the elements within the
organization, including current employees, management - and especially corporate culture,
which defines employee behavior. Trade unions, management, current employees, share holders,
etc. control the internal environment.

External environment the external environment of an organization refers to the forces and
institutions outside the organization that potentially affect its performance. External environment
has two layers –general environment task environment

General environment the general environment refers to the non-specific elements of an

organization’s surrounding that might affect the organization indirectly. These external forces
are: Political, Economic, Technological, Socio-cultural.
Internal Stakeholders and their level of influence and importance

Stakeholders defined as those persons and organizations that have an interest in the strategy of
the organization. Stakeholders normally include shareholders, customers, suppliers, staff and the
local community etc. MAS Intimates Vidiyal as a grass root Strategic Business Unit (SBU) of
MAS Holdings, it’s very important to treat their internal stakeholders. Aubrey Mendelow have
introduced a Power vs Interest matrix which is known as Mendelow’s Matrix. It’s easier to
identify / understand the importance of stakeholders and their interest & impact to the business
through matrix.

Interest

Minimal Effort Keep informed

P
o
Contractors (Janitorial, Security, Logistics Team
w Canteen etc.) IT Staff
e Contract Staff (Drivers & others) Merchandises & Planners
r Trainees & Interns
Keep Satisfying Key Player

Finance Team Directors

Consultants Management
MOS Staff HR & Admin Staff
Operators

MAS Intimates Vidiyal's Mendelow's Matrix

Minimal Effort [Low interest Low Power]

Contractors such as Janitorial, Security & Canteen will not involve directly on the business and
follow the direction given by the management. Similarly Contract Staff including drivers where
they were recruited upon a specific task and at the end of the task they are no more employed in
the business. Trainees and Interns are another group comes under low interest & low power due
to minimal participation in the business process.
Keep Informed [High interest Low Power]
Logistic has higher level of interest towards the business while achieving their KPI’s in 100%
Delivery on time and 0% complaints. They need more information on shipments and delivery to
execute the milk run system according to the lean concept. Support staff including Quality, Lab,
IT, Work Study & Engineering etc. have a greater level of interest in business to increase the
efficiency and effectiveness through implementing new system or upgrading new systems. But
they has less power to influence on the decisions. Merchandisers and Planning are the other
groups who shows higher interest towards the business since their ultimate goal is to satisfying
the end customer and their requirements. But they have limited power to make decisions on
SBU’s and supports the business with their limited resources since they only involved in
sampling process, ordering raw materials and loading to plants according to the availability.

Keep Satisfied / Involved

Finance is has very limited interest on the business where they only does the bookkeeping of the
plants expenses. But they have high power to influencing decisions since they are laying out the
monetary strategies of the organization. Similarly Consultants are the next group who has higher
power to influencing in decision making towards recommending processers and suggesting new
technologies and methods to the business. Even though the impact towards MAS is greater
considering the SBU, due to processers and standards impact towards the direct business is
nominal. MOS main job roll is to see SBU carrying out the laid processers & standards are
carried out in lean methods and has higher influences in decision making power, and has very
minimum interest towards the direct business and they will not directly involved with the
customer.

Key Players
Directors have a higher influence in business where it impacts on the SBU’s business strategy
and its profitability. Therefore they have higher interest towards business as well as they have the
high power to make decisions and implement across the SBU’s and it may differ one to one
according to the business model. While Vidiyal Management have higher interest to make higher
profits and high power on decision making within the SBU. Management will influencing in
implementing strategies that were recommended by consultants and MOS staff, which will
impact on SBU’s profitability.
Since MAS in service industry HR & Admin department becomes a key player since they
manage the human capital which is the greatest asset in this sector. Every decision taken by HR
will impact on the employee motivation, efficiency and labor turnover. Hence HR have a greater
power on decision making on the HR related issues as well as the business models.
Operators being the greatest asset to the textile industry they can influence on decisions since all
decisions considering the operator behaviors and attitudes towards the decision carried out since
if the decision are affect negatively towards the operators there may be less motivated work force
and can be seen higher labor turnover which will impact on the efficiency and profitability of the
SBU. In MAS pricing strategy is based on the time taken to produce a garment, and financial
strategy is providing incentives based on efficiency of the operators where they perform higher
to gain higher incentives directly impacts on the Cost per Standard Hour and profitability.

External Stakeholders

Community

MAS Intimates Vidiyal is the 33rd production facility with providing job opportunity for 800
employees in North of Sri Lanka which have been badly affected by the ethnic war. In Northern
part of Sri Lankan people have lack of knowledge on private sector especially towards textile
and clothing industry And they have low level of job recognition by the community. Therefore
organization has a responsibility to create the awareness amongst the local community as well as
the employees.

Government

MAS export industry is the most significant and dynamic contributor for Sri Lanka’s economy.
The garments industry is a key foreign exchange earner and, with factories being set up all over
the country, provides employment for a large number of people ensuring better income
distribution. Today it provides direct employment for nearly 60,000. This industry, entirely
privately owned has successfully exploited the opportunities in the international market.

IT Partners
In 2001, MAS established Sabre Technologies, a solutions company specializing in cloud and
mobile technologies with a proven record of expertise in .NET and Java platforms. We have
supported a range of Independent Software Vendors, business start-ups and enterprise clients to
realize their aspirations through our services. At present, Sabre is playing a key role in the
Groups' future IT business strategy with a focus on providing companies in the Fashion and
Lifestyle space, with pioneering cloud and mobile technology solutions.

In November 2008, Sabre Technologies entered in to a Joint Venture with Trade Card Inc. USA,
a supply chain collaboration solutions firm to establish an off-shore services center in Sri Lanka.
Named TradeCard Services, the company is responsible for the implementation and maintenance
of TradeCard Inc.'s Pay-to-Procure solution in South Asia and the Middle East, managing a key
team of software developers and driving the regional strategy of TradeCard Inc. Key clients of
TradeCard include Levi's, Abercrombie & Fitch, Columbia Sportswear and Guess, among others.
TradeCard Services is also involved in developing MAS' future IT strategy by way of sharing its
expertise on supply chain collaboration.

Strategic Partners

Partnering up with renowned brands from across the globe has enabled us to offer fully-
integrated world class solutions to our clientele. Our alliances are based on mutual understanding
and trust, sharing the same principles in business ethics with our partners, an attribute that has
proven to be a strong competitive advantage for MAS over the years.
Our joint venture partners include:

 MAST Industries, Inc., USA

 Triumph International Overseas Limited, HK

 Speedo International Limited, UK

 Stretchline (UK) Limited, UK

  Ets Lucien Noyon Et Cie, France

 Prym Intimates Group Ltd, HK

 Brandot International Limited, USA

 Labyrinth Solutions Holdings, USA

 Tradecard, Inc., USA

 NSL Infratech (Private) Limited, India

Customers

Offering customers highly differentiated intimate wear, flawless designs blended with exquisite
quality, this is where perfection is revealed in every intricate detail. Drawing from 25 years of
experience in lingerie manufacturing, MAS Intimates offer niche market intimate wear of
unparalleled quality. With 12 world class manufacturing facilities in operation across Sri Lanka,
India, Bangladesh & Indonesia, together with design offices situated in New York, Hong Kong,
UK and Colombo, we service some of the most renowned global intimate brands. Sharing a long
standing strategic partnership with Victoria’s Secret, the company currently manufactures for
Victoria’s Secret, Marks & Spencer, La Senza, GAP, Soma, DBA, H&M, Lululemon, Oysho,
and athlete.

Marking the beginning of a new era for garment manufacturing in the country as well as the
region, MAS Intimates not only adheres to international standards in its services and ethics
towards both clients and employees, but also creates the benchmark for other facilities in the
region in terms of quality and recognition. Our wings spreading globally, we have grown
alongside our customers. We showcase a unique blend of technical, marketing and supply chain
expertise which has made us the largest global supplier for Victoria’s Secret.
SWOT Analysis
Evaluates the internal strength and weakness at the company against the opportunities and threats
that exist in the external environment.
Advantages
 Reveals the competitive advantage of the company
 Helps firms to prepare and make contingency plans for inevitable opportunities
and threats that may arise in the external environment
 Helps to identify and analyze new prospects

Strength Weaknesses
 Being the number one supplier of  High Employee turnover rate
intimate and sportswear apparel in Sri  Limited fund available for expansion
Lanka and south Asia since it is a privately owned group
 Strong Brand name and brand loyalty
 Experienced management team
 Skilled employees
 Creative and innovative culture
 Superior technology
 Well established supply chain
 Offers customized design solutions to
customers with an in-house design team
leading to faster turnaround time and
efficient design solutions to customers

Opportunities Threats
 Export Supporting policies by the  Volatile exchange rates that could
government hinder sales
 Devaluation of the rupee against  Severe competition from overseas
foreign currency making MAS products Suppliers
cheaper abroad  Changing government policies with
  Technological advancements and break
through within the industry
 Expansion opportunities
regard to foreign trade
 Political instability with in the country
and international pressure that could
discourage other countries to engage in
trade with Sri Lanka

PESTLE for MAS Intimate Vidiyal

Political

 Government policies regarding international trade

 Political instability in the operating countries Eg: Bangaladesh
 Tax Benefits given by BOI
 Trading Blocks: NAFTA curtailed the export opportunities of Sri Lanka

Economical

 Volatile exchange rates affect revenue

 Volatile interest rates affect borrowing ability
 Inflation within the home country and raw material importing countries increase the
production cost

Socio Cultural

 Attitudes in the each country towards the Garments industries

 Cultural barriers: Women work force

Technological

 Automation: Reduce the production cost and increase the productivity

 Advance technology: Gives a competitive edge to the company
 Fast technological advancement: Makes some workers redundant

Legal

 Maximum working hours

 Minimum wage rate
 Lows prohibiting the use of child labor
 Rules and regulations of WTO and EU and other international bodies
Environmental

 Waste management laws

 Sustainability policies of the government
 EU – Carbon foot print rules

Porter’s Five Forces

The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in
a business situation. This is useful, because it helps you understand both the strength of your
current competitive position, and the strength of a position you're considering moving into.

With a clear understanding of where power lies, you can take fair advantage of a situation of
strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an
important part of your planning toolkit.

Conventionally, the tool is used to identify whether new products, services or businesses have
the potential to be profitable. However it can be very illuminating when used to understand the
balance of power in other situations.

Threats of New
entrant: Economic
of scale,
Government policy,
Brand identity

Bargaining power
of supplier: Rivalry : Number Threats of
Differentiation of of competitors, Substitutes:
inputs, Switching Industrial growth, Switching costs,
costs, The Capital Buyer propencity
company's ability Investment, Exit to substitute
to backward Barriers
integrate

Bargaining power of
buyers: Size and
sccale of customer,
Switching costs,
Presence of substitutes
Porter’s five forces for MAS Intimate Vidiyal

Rivalry

 Number of competitors-High [Brandix, Penguin, Jay Jay Mills Lanka]

 Relatively high capital investments must be made on technology: Thus new entrants are
somewhat discouraged

Threats of New Entrants

 Economics of scale: Experienced by MAS acts as a barriers for new firms

 Difficulty to obtain orders from international customers due to inexperience.
 The government policy is to encourage apparel exports. Thus new entrants are welcome
by the government.

Threats of substitutes

 Changes in customer preference to brands that are not manufactured by MAS can reduce
the orders received by the company.
 The Customers propensity to substitute is relatively law since they do not want to share
trade secrets with new manufacturers easily.

Bargaining power of buyers

 The Customers are powerful: International companies with high bargaining power
 However they want high quality apparel, speedily and depend on the unique technology
of MAS.
 The Customers also do not want to keep switching costs their suppliers in order to retain
their trade secrets.

Bargaining power of Suppliers

 Some suppliers by the Customer and MAS cannot switch to others. Thus their bargaining
power increases.
 The production process requires high quality, unique raw materials which are rare.
 However MAS has its own fabric mills.
Business Strategies and Information system

In 1997 MAS become only the fourth apparel manufacturer worldwide and the first in Asia to
implement an SAP enterprise resource planning (ERP) solutions for the apparel industry.

MAS believes in using the best technology in both manufacturing and information systems to set
the bar in global industry standard in enterprise resource planning. One of the first industry
leaders to go live with SAP AFS in South Asia, we have continuously updated and revamped our
SAP versions over the past 15 years, enabling the apparel industry to steadily adapt, optimize
and align business processes. Today, MAS utilizes SAP to run its core manufacturing process,
integrate with banks, suppliers and customers, with direct processing of customer orders and
business intelligence. MAS maintains strong SAP competencies through our SAP AFS
consulting company that undertakes consulting assignments worldwide with a strong team of
consultants providing support, training and implementation.

In MAS there is a team that handles the networking. There is a MASSAI- MAS Strategic Action
Initiatives-team that handles strategic initiatives including technology.

Application of SAP in MAS

Michael Porter Value chain

The idea of the value chain is based on the process view of organizations, the idea of seeing a
manufacturing (or service) organization as a system, made up of subsystems each with inputs,
transformation processes and outputs. Inputs, transformation processes, and outputs involve the
acquisition and consumption of resources - money, labor, materials, equipment, buildings, land,
administration and management. How value chain activities are carried out determines costs and
affects profits.
Most organizations engage in hundreds, even thousands, of activities in the process of converting
inputs to outputs. These activities can be classified generally as either primary or support
activities that all businesses must undertake in some form.
According to Porter (1985), the primary activities are:
1. Inbound Logistics - involve relationships with suppliers and include all the activities
required to receive, store, and disseminate inputs.
2. Operations - are all the activities required to transform inputs into outputs (products and
services).
3. Outbound Logistics - include all the activities required to collect, store, and distribute the
output.
4. Marketing and Sales - activities inform buyers about products and services induce buyers
to purchase them, and facilitate their purchase.
5. Service - includes all the activities required to keep the product or service working
effectively for the buyer after it is sold and delivered.
Secondary activities are:
1. Procurement - is the acquisition of inputs, or resources, for the firm.
2. Human Resource management - consists of all activities involved in recruiting, hiring,
training, developing, compensating and (if necessary) dismissing or laying off personnel.
3. Technological Development - pertains to the equipment, hardware, software, procedures
and technical knowledge brought to bear in the firm's transformation of inputs into outputs.
4. Infrastructure - serves the company's needs and ties its various parts together, it consists of
functions or departments such as accounting, legal, finance, planning, public affairs,
government relations, quality assurance and general management.

Value chain for MAS Intimate Vidiyal

Primary Activities

 Inbound Logistics

In the earlier process Purchase Order (PO) creation took a lot of effort and time as PO creation
required various information from different departments. The raw material supplier had to wait
until he is being informed and it was a risk to company because if the supplier is unable to meet
the target date, the company has to delay or terminate their processes until the raw materials are
received.
Furthermore all the details about the PO and invoice were maintained manually and when the PO
is created they manually check the inventories in the warehouse. Once the raw materials were
received the information on the Good Receive Note (GRN) was entered manually to the excel
files and they have manually checked the goods against the invoice.

The current system helps the company to have an internet enabled supply chain where it provides
integration among all the relative parties. All the inventory details are maintained through the
system. It further eliminates the risk of raw materials being out of stock since it provides a
vendors’ window where the vendor can keep track of their inventories and plan their operations
according to the updated Material Requirement Planning (MRP) which increases the efficiency
and effectiveness of the process. The system embedded barcode system helps the company in
checking the PO and GRN. At the end of each month the system generate many reports and these
could be used in the profitability calculation process. The system further provides
communication facilities with the external parties that help an uninterrupted process flow.

Customer places
Prescribes fabrics Prescribes MAS
the orders
to be bought from a own Fabric to be
specifying Fabric
specific Supplier used

The supplier is A store requisition

contacted and an is made to be ware
order is placed house

Fabric is received Fabric is issued to

by MAS stores production line
  Production

Fabric Request Note (FRN) was produced manually by concerning the number of required
products and then sent to the warehouse. The creation of the FRN resulted in lot of errors and
was really time consuming, as it needs to go through several documents. Materials were cut
manually which incurred lot of time in finishing a single line and many man made errors were
visible. At the dying plant once the dye batch was received the operator has entered the details to
the excel sheet. In the packing process the carton sticker was written manually, this was time
consuming when it comes to a large shipment and the end result was not elegant. The cartons
were loaded to the trucks by people at warehouse.

The new system integrates all the functional units. Therefore it has increased the visibility of
information and reduced data redundancy. The cutting unit sends a FRN through the system to
the warehouse and receives the material they needed for the production process. In the cutting
unit the new machines fed data on the required size and a line finishes with minimum errors
easily. Currently at the dying plant colour mixing is done by feeding the data into the system,
and once it is fed the system selects the colours and mixes them accordingly to produce the
customer expected outcome. The carton sticker in the packing process is also now printed with
the information on the system. With the help of technology the industry has developed a
scanning system for the loading operation. The cartons are loaded to trucks through a converge
belt.

Fabric is received Apparel is sent to Final Quality check

from the ware ironing department
house

It is washed and Fabric is sent to Apparel is sent to

tested for quality stitching packing
department Department

Fabric is cut by the Fabric is sent to Destruction

cutting department printing department Processes
  Out bound Logistics

Previously according to the information received through the Purchase Order, the manufacturing
company sends products to the buyer. All the shipping details were maintained/ handled
manually and it was inconvenient to access and confusing in recording. The shipping schedules
and all the relevant information about the order fulfillment is now stored in the system where it
provides easy storing and retrieval.

The carriage outwards and shipments are tone by MAS holding and the cost is affect to the final
selling price.

 Marketing and Sales

MAS Holdings use direct marketing strategies and obtains sales based on past dealing with
customers. It also uses its website as a tool for affecting potential customers.

 Services

Being and apparel manufacturer MAS Holdings does not provide extensive after sales services.
However it guarantees the Quality of its Products and contacts rewards activities on any rejected
or substandard items.
Supportive Activities

1. Firm Infrastructure
 The physical layout at the factories uses lien, Kaizen, TQM principles
 The Management Since the founders remain as the senior management at the
firm.
 Their core value Prevail.
 Well Established processes and rules exits that need strict adherence
2. Human Resource Management
“Our People are our pride and power Attitude “Treat its employees as a valuable resource
and uses many motivational tools to ensure that these are satisfied.
Because of heavy work load there were lots of complaints from the employees and less
value was given to the ideas of the employees. After the implementation of the new
system, when recruiting and selecting a new employee to the company the management
gives higher priority for the candidates who have a rich knowledge on existing systems
and new software. Training programs are being carried out by assigning employees on
selected projects; quality circles and activity planning.
3. Technology Development
The company uses advanced technology in order to delight its customers through
innovative product such as sweet absorbing apparel, high performing shoes, fabric that
monitor one’s heart rate and stress level etc.
In the former process interdepartmental interactions were not visible. Due to these
reasons the departments were deviating from the company’s end goal. This created many
errors, data duplications in the process and was very time consuming. They had no proper
mechanism to view all the company process related data in one place and when carrying-
out an activity they had to collect information from several places in several formats. The
current process integrates all the functions and departments of the company. The system
operates a central information repository where it provides efficient communication
between all the process related parties. And it further enables the visibility and exchange
of information among them. This eliminates the inconvenient communication barrier
within the process. This system facilitates a smooth flow over the entire process.
 The company at commence of business has used entirely manual approaches. With the
technological advancements they have started using excel files. Mostly the reports were
generated manually. Today most of the companies use Six Sigma approach and ERP
(Enterprise Resource Planning) system (SAP) which includes highly developed
technology infrastructure, and support the company to make the processes efficient and
effective.
4. Procurement
Most major customers specify the supplier from whom the fabric must be bought. They
usually have already made arrangements regarding the quality of the Fabric. MAS bear
the cost at fabric but pass it down to the customer through the Quoted Prices.
Competitive Advantage
Competitive advantages give a company an edge over its rivals and an ability to generate
greater value for the firm and its shareholders. The more sustainable the competitive
advantage, the more difficult it is for competitors to neutralize the advantage.
There are two main types of competitive advantages: comparative advantage and
differential advantage. Comparative advantage, or cost advantage, is a firm's ability to
produce a good or service at a lower cost than its competitors, which gives the firm the
ability sell its goods or services at a lower price than its competition or to generate a
larger margin on sales. A differential advantage is created when a firm's products or
services differ from its competitors and are seen as better than a competitor's products by
customers.
 A well established, export oriented manufacturing industry.
 A ready supply of raw material and an expanding resource base.
 A literate, trainable workforce.
 Geographical location & infrastructure advantages.
 Compliance with the best international labor and environmental laws and practices.
 Market and investor friendly policies of the government.
 An array of attractive incentive extended for the textile/apparel industry.
 Unlimited quota free access to the EU markets.
 Preferential access to Indian market including duty- free concessions provided by the
Free Trade Agreement between Sri Lanka and India
 Conclusion

MAS Intimates Vidiyal is the 33rd production Facility under the MAS Holdings. It is operates
over 27 years in well established company.

Internal; shareholders are high level of influence the operations. Target customers are in
European Region and Srilanka Government policies also support to the garments industry
exports that is favorable to the company.MAS Vidiyal has Strong Brand name Victoria Secret
and well experience management team. Most of the External factors are encourage the company
activities.

According to the Micheal Porter five forces analysis MAS has high level of bargaining power,
less of thereat to the substitutes product and high level of entry barriers to the industry. MAS
becomes only the fourth apparel manufacturer in worldwide & the First in Asia to implement the
SAP technology for the apparel industry, Now MAS Utilize SAP system for integrate all
business activities.

In Micheal Porter value chain analysis Input decided by the MAS Holdings based on the
customer requirement that is provide the option to the customers for ordering the fabric from
MAS own fabric or external suppliers. New operating system integrate all the functional units
that is increased the visibility of information system and reduce data redundancy. Output details
are stored in the system that provides easy storing and retrieval .MAS use direct marketing
strategies company does not provide extensive after sales services.

Factory uses lien manufacturing system, Employees are treated as valuable resource and ensure
their satisfaction . Company uses advanced Technology (SAP), Material procurement made by
the Company cost pass it doen to the customer through the quoted prices. MAS Vidiyal
enjoying the comparative advantage as well as differencial advantage.