Assignment: Dhaka University of Engineering & Technology (DUET)

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Dhaka University of Engineering & Technology

(DUET), Gazipur-1707

Assignment
Course Code: TE-3805
Course Title: Supply chain & Operation management

Assignment Title:
SCM, Scope of Operation management, importance of SCM,
example of SCM activities, influencing factors of SCM, challenges in
implementing effective SCM and mitigation of challenges,
classification of production system and advantages-disadvantages of
each system, difference between goods and services, Lean, six sigma,
Agile, Kaizen philosophy of SCM and their tenets, developing of
SCM using these philosophy.

Submitted by, Submitted to,

Name: Abdul Aziz Dr. Md. Abdullahil Kafi,


Student ID: 175053 Associate Professor,
Year/Semester: 3rd/2nd Department of Textile
Dept.: Textile Engineering Engineering, DUET
1. Discuss the concept of supply chain management (SCM). How will you
define it?
 Supply chain management:
Supply chain management is the efficient and timely completion of planning,
product sourcing, stockpiling, manufacturing and marketing activities of any
organization starting from purchasing raw materials.
Supply chain management deals with how business turn raw materials into
finished products and then transport and distribute those products to consumer.

2. What are the scope of operations in supply chain management (SCM)


with regards to global Textile/Apparel industry? Why is SCM important
in textile and apparel industry?

 The scope of operations in supply chain management (SCM) with regards


to global Textile/Apparel industry:
The scope of operations management ranges across the organization. It is
entangled in product and service design, process selection, selection and
management of technology, design of work systems, location planning, facilities
planning, and quality improvement of the organization’s products or services.
We can use a garments industry to illustrate a product organization’s operation
system. The system consist of sewing machines, raw materials, manpower,
maintenance facilities, place of the garments industry. The activities are-
 Forecasting: the demands of garments according to the season or weather. Or
to predict that how much order can get a garments industry.

 Capacity planning: It is the process through which organizations see how


much work they can complete given their total number of employees and
upcoming time constraints. For example, 2000 pieces garments production
capacity and 100 employee to complete whole production.

 Locating facilities: According to top level management’s decision which


order should take, where to locate the industry, for whom the products will be
produced i.e. local or for export.

 Scheduling: Scheduling of work order (i.e. cutting, sewing and finishing),


shifting for the workers, setting work time for all employee.
 Managing inventories: To manage all of the required raw materials, machine
spare parts, first aid equipment, trimmings and accessories etc.

 Assuring quality: To assure the buyer’s expected quality like sewing thread,
seam strength, trimming and accessories and the size of product, specification
etc.

 Importance of SCM in textile industry:

 To reduce the transportation cost of textile raw materials.


 To minimize the raw material cost in textile/ apparel industry.
 To make outsourcing more efficient.
 To gain efficiencies from procurement, distribution of textile product and
logistic.
 To meet challenge of globalization of textile business and longer supply
chain.
 To manage the complexity of textile raw material collection.
 To manage the inventories needed across the supply chain.

3. List out major examples of supply chain management activities in the


Textile/Apparel industries?

 Examples of supply chain activities include:

 Supply planning: The supply planning determines how the needs created
from the demand plan can be best met. The objective is to balance supply and
demand in a way that achieves the financial and service objectives of the
enterprise.
For example, in spinning, weaving, denying and apparel industry need to
supply raw material i.e. fiber, yarn, fabric and finished fabric consistently.
This objectives is to balance the raw material supply and demand.

 Production planning: Production planning addresses the production and


manufacturing modules within a company. It considers the resource
allocation of employees, materials, and of production capacity.
For example, to manufacture the fabric, it should be consider that sufficient
amount of yarn need to allocate as well as the workers.
 Inventory planning: Inventory planning determines the optimal quantity and
timing of inventory to align it with sales and production needs.

For example, to manufacture the 5000 garments, sufficient amount of


finished fabric and sufficient time to produce the garments need to align it
with sales and production as well.

 Capacity planning: Capacity planning determines the production staff and


equipment needed to meet the demand for products.

For example, 100 tones dyed fabric production capacity which needs to
complete the production with 130 kg reactive dye.

 Distribution planning: Distribution planning and network planning oversees


the movement of goods from a supplier or manufacturer to the point of sale.
Distribution management is an overarching term that refers to processes such
as packaging, inventory, warehousing, supply chain, and logistics.

Example, after producing the garments it is needed to plan of distribute the


garments according demand of customer or it is needed to distribute the
garments to point of sale (market).

4. What are the influencing factors in Textile/ Apparel supply chain


management? What are the challenges in implementing effective supply
chain management? How will you mitigate these challenges?

 The influencing factors in Textile/ Apparel supply chain management:


There are some factors which influence the supply chain management in Textile/
Apparel industry. The optimum selection of parameters of these factors improves
the supply chain performance.
 Inventory control policy.
 Information sharing.
 Customer demand.
 Forecasting method.
 Lead time and review period length.
There are also other factors that influence the supply chain-
 Globalization,
 Competition.
 Government Regulation.
 Environment.

 The challenges of supply chain management:

 Increased Costs throughout the Supply Chain: Profit margins are under
pressure as costs creep up throughout the supply chain network. These costs
come from many areas, and a lack of visibility and accountability for
reducing them can result in rising operational expenses.

Major contributors to increased costs include:


1. Rising price of fuel to transport goods by road, sea or air.
2. Increasing commodity prices raising the cost of raw materials.
3. Higher labor costs from suppliers and manufacturers.

 Supply Chain Complexity Due to Multiple Channels to Market:


Consumers buy products across multiple channels, and as routes to market
increase, the underlying supply chain must adapt.

 Consumer Demands Drive Need for Improved Speed, Quality and


Service: Consumers have never had more choice, and every industry is
facing disruption. Every touch point with an end user needs to be focused
on providing excellent products and services.

 Risk in the Supply Chain Creates Pressure: International complexity,


environmental changes, economic pressures and trade disputes all put
pressure on the supply chain.

 Mitigation of supply chain management challenges:

 Need to purchase necessary raw materials altogether so that it is possible to


minimize the cost and manage the labor cost from suppliers and
manufacturer.
 Supply chain managers must manage multiple supply chains, third parties
and other organizations to ensure a good end customer experience,
regardless of how they order and receive products.
 The most successful products are those that meet consumer requirements of
quality, availability and price. The underlying supply chain is vital to
meeting those needs.
 Supply chain managers must develop contingencies and mitigating action
plans to prioritize and eliminate risks and manage issues when they occur.

5. Classification of production system and advantages-disadvantages of each


system?

 Intermittent Production:
Advantages:
 Variety of products are produced.
 General purpose machines are used.
 Sequence of operation change as per design.
 It is possible to changes in a product’s design or if a machine or tool breaks.
Disadvantages:
 Production planning and scheduling is complicated since manufacturing
orders (MOs) come in at different times.
 The flow of production is intermittent (irregular) or discontinuous.
 Volume of production is small.
 The raw materials and work-in-progress (WIP) inventories are high
because of the irregular flow of work.

 Project Production:
Advantages:
 Unique, high quality products are made.
 Workers are often more motivated and take pride in their work.
 Products are made according to individual customer needs and improve
customer satisfaction.
 Production is easy to organize.
Disadvantages
 Very labor-intensive, so selling prices are usually higher.
 Production can take a long time and can have higher production cost.

 Job Production:
Advantages:
 Product usually high quality.
 Producer meets individual customer needs.
Disadvantages:
 Cost of producing one unit or job is higher.
 Labor –intensive.

 Batch Production:
Advantages:
 Allows flexible production.
 Inventories of part-finished goods can be stored and completed later.
Disadvantages:
 Making many small batches can be expensive.
 If production runs are different there may be additional costs and delays in
preparing equipment.
 Continuous Production:
Advantages:
 Flow of production is continuous.
 Products are standardized.
 Less wastage of resources.
 Better utilization of resources.
Disadvantages:
 The biggest drawback of continuous production is that it is dependent on
demand for the product.
 This method of production is less flexible.
 Chain Reaction.

 Mass Production:
Advantages:
 Increased productivity.
 Uniformity.
 Lower cost.
 Faster production.
 Less error.
Disadvantages:
 Initial costs can make it hard for smaller businesses to mass produce their
products.
 Less flexibility.
 Higher energy consumption.
 Lack of product uniqueness.

 Process production
Advantages:
 Processes can normally be automated which reduces unit costs.
 Single product is produced, so it is risk free process.
 Ideal for products which have to be of a consistent quality.

Disadvantages:
 The flexibility of these plants is almost zero because only one product can
be produced.
 Production cost is higher since small amount of production.

6. Difference between goods and services from supply chain management


philosophy aspect.

Goods Service
1. Goods are the material items that 1. Services are amenities, facilities,
can be seen, touched or felt and are benefits or help provided by other
ready for sale to the customers. people.
2. Goods are manufactured. 2. Services are provided or delivered.
3. Can be stored (inventoried). 3. Cannot be stored.
4. Low customer contact. 4. High customer contact.
5. Minimal participation by the 5. Customer often participates.
customer
6. Delay between production and 6. Production and consumption often
Production and consumption. simultaneous.
7. Productivity easily determined. 7. Productivity can difficult to
determine
8. Quality generally easy to measure. 8. Quality more difficult to measure.

7. What do you mean by Lean, six sigma, Agile, Kaizen philosophy of supply
chain management? What are the tenets of each of the philosophies? How
these philosophy help develop effective supply chain management?

 Lean: Lean is a flexible system that uses minimum resources and produces
high quality goods or services. Lean systems tend to achieve greater
productivity, lower costs, shorter cycle times, and higher quality than
traditional systems.
 Six Sigma: Six Sigma is a set of techniques, and tools for process
improvement. This process is one in which 99.9999966% of the products
manufactured are statistically expected to be free of defects.
 Agile: Agile is an iterative approach to project management and software
development that helps teams deliver value to their customers faster and
with fewer headaches.
 Kaizen: Kaizen is a Japanese term meaning "change for the better" or
"continuous improvement." It is a Japanese business philosophy regarding
the processes that continuously improve operations and involve all
employees. Kaizen sees improvement in productivity as a gradual and
methodical process.

 Tenets of each of the philosophies:

 Lean: There are five key lean principles:

 Value: Value is always defined by the customer’s needs for a specific


product.
 Value stream: Value stream processes involved in taking a specific
product from raw materials and delivering the final product to the
customer.
 Flow: After the waste has been removed from the value stream, the next
step is to be sure the remaining steps flow smoothly with no interruptions,
delays, or bottlenecks.
 Pull: With improved flow, time to market (or time to customer) can be
dramatically improved. This makes it much easier to deliver products as
needed, as in “just in time” manufacturing or delivery. This means the
customer can “pull” the product from you as needed.
 Perfection: making lean thinking and process improvement part of your
corporate culture. As gains continue to pile up, it is important to remember
lean is not a static system and requires constant effort and vigilance to
perfect.

 Six Sigma: There are seven tenets in six sigma philosophy.

 Always focus on the customer.


 Understand how work really happens.
 Make your processes flow smoothly.
 Reduce waste and concentrate on value.
 Stop defects through removing variation.
 Get buy-in from the team through collaboration.
 Make your efforts systematic and scientific.

 Agile: The 12 principles articulated in the Agile Manifesto are:

 Satisfying customers through early and continuous delivery of valuable


work.
 Breaking big work down into smaller tasks that can be completed quickly.
 Recognizing that the best work emerges from self-organized teams.
 Providing motivated individuals with the environment and support they
need and trusting them to get the job done.
 Creating processes that promote sustainable efforts.
 Maintaining a constant pace for completed work.
 Welcoming changing requirements, even late in a project.
 Assembling the project team and business owners on a daily basis
throughout the project.
 Having the team reflect at regular intervals on how to become more
effective, then tuning and adjusting behavior accordingly.
 Measuring progress by the amount of completed work.
 Continually seeking excellence.
 Harnessing change for a competitive advantage.

 Kaizen: There are 15 tenets-

 Don’t try to justify the past and the so-called “best practices”, start by
questioning the best practices.
 Discard your fixed ideas, always keep your mind open to change.
 See waste and problems as an opportunity.
 You develop wisdom when faced with hardship.
 Maintain a positive attitude.
 Do not make excuses and eliminate can't - Think of how to do it, not why
it cannot be done.
 Creativity before capital - do not spend money for kaizen, use your
wisdom.
 Seek the wisdom of ten people rather than the knowledge of one.
 Understand the data and working principles, be data-driven.
 Learn by taking action, it’s called validated learning.
 Choose a simple solution, not the perfect one.
 Do it right away, even if you only aim at the 50 % target.
 If you make a mistake, correct it right away.
 Kaizen is endless.
 Have fun while implementing improvements.

 Development of effective supply chain using lean, six sigma, agile and
kaizen philosophy:

 Lean supply chain the focus on reducing lead times leads to shorter, simpler
distribution networks and it is a philosophical way of working which
emphasizes the removal of waste within a process. A lean operation is a
flexible system of operation that uses considerably fewer resources (i.e.
activities, people, inventory, and floor space) than a traditional system. Lean
systems tend to achieve greater productivity, lower costs, shorter cycle
times, and higher quality than non-lean systems. This is how the lean
philosophy help to develop supply chain management.

 Six Sigma seeks to improve the quality of process outputs by identifying


and removing the causes of defects. Six Sigma approach is a collection of
managerial and statistical concept and techniques that focuses on reducing
variation in processes and preventing deficiencies in product. This is how
the six sigma philosophy help to develop supply chain management.

 Agile represents an overarching philosophy for software development,


emphasizing the value of iterating quickly and often to satisfy customers.
Therefore, an agile framework can be defined as a specific software-
development approach based on the agile philosophy articulated in the
Agile Manifesto. As a result, supply chain management can be developed
using agile philosophy.

 The kaizen philosophy include increased productivity and maintaining


quality of products and services. Improvement should be done gradually
and continuously; the goal is not big improvements done intermittently.
This philosophy develop the supply chain management.

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