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
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Value Chain In The Textile Industry

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 Arvind Mills Ltd.
Founded in 1931 with the aim of manufacturing the high-end superfine fabrics

World’s 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 brand’s 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
Branch Expert’s
Sales Forecast
Historic
al Sales
Data
Horizon
of
Bid’s forecast
Results
Multiple Regression
Analysis Reports Contains
1. Forecast Reports
Extrapolative
2. Comparative Results
Forecasting 3. Graphical Representation
of Short, Medium, Long
Forecast Range Forecast
Product Flow

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Information Flow

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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

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 PRODUCTION PLANNING AT Arvind Mills
Not Approved

Marketing dept.
Goes to the customer
Buyer requirements Design generates sale order
for approval
with delivery date

Routing and Planning of raw

Quality Control Planning of work
scheduling 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
First Stage Second Stage

Third Stage

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 Manufacturing Process at Arvind Mills
Fourth Stage
Dyeing, Printing and Final finishing

Final Stage

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PRODUCTION PLANNING AND CONTROL AT
Arvind Mills
Production
Production Planning
Planning and
and Control
Control at
at Arvind
Arvind
Mills
Mills

Production
Production planning
planning Production
Production control
control

Functions
Functions

Planning
Planning Dispatching
Dispatching

Routing
Routing Following
Following Up
Up

Scheduling
Scheduling Inspection
Inspection

Loading
Loading 17
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

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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

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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”

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 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

Specialty
Bulk Order
Requirement
Vendors
Suppliers
(Arvind Brands)
(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

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 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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