HAWASSA UNIVERSITY

INSTITUTE OF TECHNOLOGY
SCHOOL OF MECHANICAL AND ELECTRO MECHANICAL ENGINEERING

PROGRAM: M.SC IN INDUSTRIAL ENGINEERING AND LOGISTICS MANAGEMENT

COURSE: LDSD

CASE STUDY ON JP TEXTILE Plc IN LOGISTICS AND DISTRIBUTION OPERATION

PREPARED BY:
1. MULUGETA HAMARO ID: 009/13
2. SIRGUT TESFAYE ID: 0012/13

SUBMITTED TO:
FANTAHUN MOGES (DR.-ING.)

JULY 19,2021

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Table of content
Abstract.......................................................................................................................................................3
Introduction.................................................................................................................................................4
Chapter One................................................................................................................................................5
1.1. Background of JP textile Plc.........................................................................................................5
1.2. Objective of the Company................................................................................................................5
1.3. Vision of the company.................................................................................................................5
1.4. Why customers choose JP textile.................................................................................................5
1.5. Core competence of JP textile Plc................................................................................................6
1.6. Site selection................................................................................................................................6
1.7. Operation commencement..........................................................................................................6
1.8. Employment opportunity............................................................................................................6
1.9. Country that Customers of JP textile found.................................................................................7
1.10. Main Product of JP Company...................................................................................................7
Chapter two.................................................................................................................................................8
2.1. Introduction to supply chain and logistics........................................................................................8
2.2. Import Materials, procedures and documentation..........................................................................8
2.3. Overall Work Flow..........................................................................................................................11
2.4. JP Textile Organizational Structure along with supply chain integration........................................12
Chapter Three............................................................................................................................................15
3.1. Fabric booking and Production process..........................................................................................15
3.2. Testing Requirement and quality measurement frame work.........................................................15
3.3. New product development hand Loom Making.............................................................................16
3.4. Shipment samples for approval via DHL Express............................................................................17
3.5. Follow of JP Textile Production progress........................................................................................17
3.5.1. Dyeing Department.................................................................................................................18
3.5.2. Weaving Department...............................................................................................................19
3.5.3. Drawing in................................................................................................................................20
3.5.4. Grey Fabric Inspection.............................................................................................................22
3.5.5. Finishing department...............................................................................................................23
3.5.6. Finished Inspection Department..............................................................................................24
3.5.7. Warehouse Department..........................................................................................................25
3.5.8. Production Logistics /shipping department.............................................................................26

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 3.5.9. Payment collection..................................................................................................................27
3.6. Challenges of logistics and shipping in JP Textile............................................................................29
3.7. Conclusion and recommendation...................................................................................................29

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Abstract
The ability to transport goods quickly, safely, economically and reliably (logistics) is seen as
vital to success of businesses, and to a nation’s prosperity and capacity to compete in globalized
economy. Analyzing and assessing logistics and supply chain practices will help to understand
important issues such as emerging trends and areas of concern which will help in taking
remedial measures

JP Textile( Ethiopia) PLC, is one of industrial parks in Ethiopia have contributed significantly to
the nation’s industrial development in terms of creating employment, increasing government
revenue and export, diversifying the industrial products, attracting Foreign Director Investment,
and attracting foreign exchange and is invested by Wuxi Jinmao company Limited in China, is
located at Hawassa Industrial Park, Hawassa city, Southern Province, Ethiopia and its advanced
yarn dye fabric manufacturer in Ethiopia, Africa.

JP Textile production logistic system is the flow of goods that includes the management of
procured parts and materials, distribution material inside the factory, product management,
packaging, and shipping to warehouse. Delivery management, warehouse dispatch
management, and shipping management can be optimized and the state of delivery vehicles
can be managed by smoothly linking procurement logistics and sales logistics

The objective of this case study is to assess the current status of production logistic practices
and distribution operation practice in JP Textile with the aim of identifying the gaps, potentials
and constraints for development of effective and efficient logistic system. To meet this
objective, qualitative assessment of procuring Raw Materials, materials management,
distribution inside the factory, product management, shipping. Moreover, the study assessed
sales logistics (delivery goods from JP textile to overseas and inside the park, and inefficient
customs service along with bureaucracy at customs and estimated freight cost.

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Introduction
To improve system thinking of production logistic in JP textile plc between departments like
dyeing department, weaving, Finished dept. and finished inspection, warehouse, logistic
department and merchandizing department. The study was evaluated the existing of logistics
and logistic system is able to control the relationship between production and the movement of
goods like working with different group of people, activities, information (between shipper,
customer and forwarding agent), resources involved in the physical of products within the
company and to vendors. Moreover, this project work examined the fabric booking and
production process in order to provide excellent customer service. So understanding the
booking process and working with production, shipping, finance at the same time was
challenging and requires much more time to focus, however, since I work in merchandizing
department and from Textile background, knowing fabric booking and production process is
clear and rewarding job.

Furthermore, to identify the major challenges of customs clearing services to provide timely
clearance of goods and their implications on international trade in order to reduce distribution
problem and ensure no delay for any shipment either goods which import from supplier
incoming raw material and outgoing finished products export to overseas and ensure
customers receive products on time. So in order to ship goods on time, production logistic
should work closely with logistic forwarder. Moreover, the study investigated how distribution
problems occur and solve during shipment and integrated with third party logistics provider and
freight forwarding which processing the customs clearance bulk goods instead of the company.

In general, in this project work I have also studied the challenges of production logistic (from
raw material up to finished goods, make bulk goods ready for shipment as internal factors and
how to rectify issues. Freight forwarding and customs clearance challenge as external factors
with remedies.

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Chapter One
1.1. Background of JP textile Plc
JP textile plc is a huge fabric producing company found in Hawassa industrial park that found in
Hawassa city 270 kilometer far from the capital of Ethiopia. It was established and registered in
July 2016 that is invested by Wuxi Jinmao foreign trade plc with initial capital of $22 million to
produce 11 million yards of yarn dye fabric per year in its first phase project and also has
second phase project expansion plan with $22million to maximize its annual production to 24
million yard that means for additional production of 13 million yard of yarn dye fabric. The
name of JP is derived from J stands for Jinmao is a name of Mother Company Which is found in
China and P stands for PVH Garment manufacturer which is found in Hawassa industrial park
and this company is main customer of JP textile plc. Our company is subsidiary of Jinmao as
china which was founded in July 1993 in Wuxi/china as a ready-made textile and garment
manufacture and exporter. JP textile Plc implemented zero liquid discharge that enables to
recycle 99% of sewerage disposal water and fulfills international standards.

WUXI Jinmao was Mother Company head quarter office is found in China Wuxi city Jiangsu
province and also has office in USA, UK, Cambodia, Bangladesh and Ethiopia. The JP Textile
Ethiopian PLC mother company Wuxi Jinmao is one of the top five garment manufacturer in
china especially animal cloth and shirting fabric.

1.2. Objective of the Company

 To produce textile garment products for global market with changing via fashion.
 To participate in global market by improving its quality of product as effective as
possible

1.3. Vision of the company

 JP textile Plc to be the leading global innovative for Garment products
 JP textile Plc to be the best supply choice for leading retailers
 JP textile Plc to be the one stop shop for any customer requirement of product and
service
 JP textile Plc to be the supporting home for his employees and local business partners

1.4. Why customers choose JP textile

 High level of quality, state of the equipment, high level of compliance
 Sustainable ethical standard
 Fully vertical integrated facility
 Long term partnership
 Financial secure company
 Excellence in execution

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1.5. Core competence of JP textile Plc
 Advanced equipment
 Automatic control
 Advanced production technology and process
 Better quality control

 Excellent team
 The Chinese management and technical persons
 The Ethiopian management and technician with Chinese language and technical
trained in china
 The skilled Ethiopian operators through training

1.6. Site selection

The town of Hawassa in Sidama Regional State capital city was selected for the location of the
garment production primarily for the following reasons, the city near to mojo land port and
Addis Ababa, Infrastructure is good (Availability of water, electrical power and other
infrastructural facilities such as telephone, postal, banking and insurance services, and an air
strip. To enhance the economic development of the region and create employment
opportunities

1.7. Operation commencement

In 2014 the investor confirmed the site hand over for company installation in 2015 signed MOI
with EIC in 2016 the investor obtained investment license, commercial registration and tax
certificate and in this year the company started machine installation in May 2016 our company
started trial production and in this year our company finished the establishment of all
departments and started production and on October 2017 the company started the export
their output.

1.8. Employment opportunity

The Company opens work opportunities for 70 Chinese and 2930 Ethiopian workers and totally
our company opens a chance about Six hundred fifty nine workers. Currently the company
created employment opportunity for 3000 of which 1200 are permanent and the remaining are
temporary workers.

Future plan of JP textile

To install the machine up to four phases that means to duplicate the machines after one or two
years.

 To expand yarn dye fabric mill by the projected investment US$22million.

 To start production with additional annual capacity 20 million yards yarn dye fabric to
change garment products.

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1.9. Country that Customers of JP textile found
JP textile Plc customers are found inside and outside of Ethiopia.

1.10. Main Product of JP Company

Currently JPTE factory used two types of raw materials, such as pure and blended yarn.

 Pure yarn is a type of yarn which only made up of only one single raw yarn, like
100%cotton, polyester.
 Blende yarns a type of yarn which made up of two or more different types of yarns, CVC
(55% of cotton and 45% of polyester), T/C (65%of polyester and 35% of cotton).

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Chapter two
2.1. Introduction to supply chain and logistics
According to the Council of Supply Chain Management Professionals: supply chain management
encompasses the planning and management of all activities involved in sourcing and
procurement, conversion, and all logistics management activities, Importantly, it also includes
coordination and collaboration with channel partners, which can be suppliers, intermediaries,
third party service providers, and customers. In essence, supply chain management integrates
supply and demand management within and across companies.

According to the Council of Supply Chain Management Professionals, Logistics management is

“part of the supply chain management, which plans, implements, and controls the efficient,
effective forward and reverse flows and storage of goods, services and related information
between the point of origin and the point of consumption in order to meet customers'
requirements”.

According to the Council of Logistics Management “Logistics is the process of planning,

implementing and controlling the efficient, cost‐effective flow and storage of raw materials, in‐
process inventory, finished goods and related information from the point of origin to point of
consumption for the purpose of conforming to customer requirements.”

Supply chain management is the integration of all activities associated with the flow and
transformation of goods from raw materials through to end user, as well as information flows,
through improved supply chain relationships, to achieve a sustainable competitive advantage.
(According to Handfield and Nichols)

Logistics involves “managing the flow of items, information, cash and ideas through the
coordination of supply chain processes and through the strategic addition of place, period and
pattern values”, MIT Centre for Transportation & Logistics. As of JP Textile, the supply chain
starts from importing raw material from supplier, manufacturing and deliver to customer.

M anufacturer (Jp Custom ers

supplier (Chaina)
Textile) ( garment factories)

2.2. Import Materials, procedures and documentation

Raw Yarn Procurement along with procedure and documentation. Raw yarn, chemical and
machines supplier from JP Textile holding / Mother Company and the lead time to import raw
yarn and chemicals from Wuxi China which is required 37 days, material import in two terms as
duty free and duty paid in accordance with Ethiopian Revenues and Customs Authorities.

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During the procurement for import materials, the buyer and seller have to sign contract and
work with third party logistic provider in order to get the required /purchased material. Below
are contract terms between seller JP Textile Holding and buyer/ JP textile plc
 Buyer：JP Textile Plc
 Address ：Sidama Regional State, Hawassa Industrial Park Ethiopia
 Seller: Wuxi Jinmao Foreign Trade co., Ltd
 Item, description of the goods, quantity, unit price and total value/amount of the goods
will be mentioned on the contract.
 Country of origin, Port of loading, Destination, Port of discharge, Shipping mark
 Payment terms such as T/T, CAD, Letters of Credit, Open Account
 Incoterm delivery term: like cost of Freight, Carriage paid to, Cost, insurance and freight,
Deliver duty paid, Deliver duty unpaid, Ex-factory or warehouse and Free on Board
 Mode of transport; either by Marine transport, Road, Air, Multimodal Sea Rain transport
Import documentation

The seller send shipping commercial documents share to buyer for processing customs
clearance and payment purpose as below

 Commercial invoice which mentioned the total amount, delivery term , port of loading,
port of discharge
 Packing list included total volume, total gross weight, total net weight and no. of
packages , ETD and ETA
 Certificate origin
 Insurance policy
 Contract

Import procedure to apply for clearance

 Apply letter to Ethiopian Investment commission Hawassa industrial park branch for
duty free import permission
 JP textile send duty free permission to freight forwarding agent
 Once the containers arrive at JP premises goods should be offloaded within 6hours,
otherwise the company will pay demurrage charge in accordance to Ethiopia truck
demurrage rules and regulation.

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 The input materials for JP textile Plc is different types of yarns such as cotton, polyester,
spandex, rayon, auxiliary chemicals, sizing materials and others can be imported. These raw
materials have been used according to their usage in the department and all material used
in each department as input materials.

The input materials (raw materials)

No Raw Materials Supplied from(Location) Remark

1 Cotton yarn China Imported
2 Polyester yarn  
3 Spandex yarn  
4 Dye stuff and chemicals  
5 Finishing agent  
6 Packing Materials  
7 All auxiliary chemicals  
8 sizing materials  
9 PVA  
10 Sodium Hydroxide  
Table 1 Name of raw materials and their suppliers

In order to import materials, machine and chemicals as per the estimated arrival date the
buyer, seller and forwarder should coordinate and follow up the shipping status in order to
start production. The merchandising and planner have great roll to estimate the production
stated date and fabric finished date for export goods.

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 2.3. Overall Work Flow
The production process flow of JPTE;-

Raw Materials Warehouse Winding Yarn dyeing

CCC

Drawing in Sizing Warping Yarn warehouse Rewinding

v

Weaving Gray fabric store Gray fabric QC Final product

inspection warehouse

Deliver to customer Finishing Finished fabric QC

Fig 1.1 flow process

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2.4. JP Textile Organizational Structure along with supply chain integration
The company has multiple managers in each department and the company leadership style is
democratic management style which involves managers reaching decisions with the input of
employees but being responsible for making the final decision.

CEO

VICE PRESIDENT

GENERAL
MANAGER

Businness
FIT
Manager

Customer Technical and

Operation
IT Manager HR Manager service planning Functional
Manager
manage Manager

Finance Recuiting Logistic Warehouse Merchandising Purchasing

Manager Manager Managaer Manager Manager Manager

Indirect export
Operation HR
Managing
Manager
supervisor

Direct Export
managging

Import
managing
supervisor
Figure1.2: Organizational structure

Roles and Responsibilities of Managerial function in JP Textile.

IT Manager is manage information technology and computer system

Plan, organize, control and evaluate IT and electronic data operation

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Manage IT staff by recruiting and coaching employees, communicating job expectations’ and
appraising their performance.

IT teams are responsible for coordinating, planning and leading computer-related activities in
an organization. They help determine the IT needs of an organization and are responsible for
implementing compute systems to fulfill the organization’s information system.

Manage IT system between departments like managing emails, server, control when
breakdown happen on packaging machines.

Finance Manager is managing cash flow of the company, management of tax, human resource
and payroll, procurement, food approval for employee.

Closely working with sales department, Merchandising and logistic department in order to
follow whether payment have been executed from customer, taxation system in Ethiopia,
customs directives and inform in case any updated for excise tax proclamation and VAT (value
added tax).

Business Manager is responsible for supervising and managing day to day operation to meet
company goals. The manager typically oversees an individual department, such as marketing,
sales, production, customer service and planning, so on. Provide training for leadership skills
and motivate subordinate departments. Moreover, collect and discuss annual bulk order with
buyer PVH, JCP, TCP and update annual capacity with production manager and production
planner.

Merchandising and purchasing department:

After customer merchandising and JP Merchandising negotiate fabric price, delivery term,
delivery date, payment mode, mode of transportation, in case partial delivery is needful.

Issue Purchase order to sign the customer.

JP merchandising provide orders to planner, once the planner and workshop manager get
orders start schedule for production start date and production date excluding the customs
processing date. In order to ensure fabric delivery, the merchandising works closely with
planner and production manager for providing feedback to customers and shipping team for
arranging booking of containers.

Arrange video conference with buyer to discuss about bulk order status, upcoming plan for
importing raw materials or export goods to garment factories. Controls and checks the markets
quality and customer service. Check and control the market plan for exports and import
production. Collects the information on public desire or need for development of markets

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Before issue purchase order with customer, negotiating payment method and mode of
transportation

Operation Manager

In JP Textile, operation manager receive orders from Merchandizing and business team and
agreed production complete date, in order to make commitment possible, the planner is
responsible scheduling and assign materials, chemicals and distribute monthly, weekly and daily
(per shit) plan to ensure the production status for every bulk order is smooth, reliable and
efficient in order to deliver goods as per the estimated date of delivery. While the production
manager working with each workshops, the planner send daily production stats tracking list via
email to functional departments.

Warehouse manager:

The role of warehouse team in JP textile is to store finished goods and situate goods as per
prior delivery time. Moreover, provide warehouse details to logistic department for preparing
shipping documents. Sorting out and control semi-finished and finished goods inventory
monthly basis to smooth production requirements and meet anticipated customer demand
because inadequate control of inventories can result in both under- and overstocking of goods.

Production Logistics/ shipping Manager:

The logistic manager has great interpersonal skills to work with warehouse team as well as
manage and motivate his team. Responsibility of Production logistic Manager

 Follow up import materials and crosscheck production is done as per customs SIOC
standard
 Decide mode of transportation before shipment and work with Managing Partner
- Logistics freight forwarding agent.
 Crosscheck transport costs with different logistic service providers.
 Adjust same shipping incoterm in case there is shipment by consolidation because it’s
not recommended to use different shipping term together.
 He/she schedule booking vessel port to port and with Ethiopian logistic service
providers in order to ship goods.
 Prepare shipping documents
 Advise export shipment instruction for booking container in order to avoid late
shipment.
 Provide Commodity code and bank permit to forwarding agent for advising customs
declaration and customs clearing then shipping up to destination with the help of third
party logistic providers
Discuss and enquiry with insurance company in order to get Marine Insurance for
export.

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Chapter Three
3.1. Fabric booking and Production process
Before designate the delivery date JP textile sales team and customer’s Merchandising
negotiate price of the fabric, delivery term, date of shipment, mode of transportation, payment
mode( the way that a buyer choose goods or service that is also acceptable to the seller.
Cayman Sales team issued purchase order to customer for approval then after getting the
signed Purchase order, Cayman merchandising team place order with JP Textile by subtracting
the lead time for each orders and only production start time and production finished time is
obtained.

3.2. Testing Requirement and quality measurement frame work

Before starting the production, technical dept. Dyeing workshop, finishing workshop and
quality control dept. Have to follow the standard testing requirement for different customers
and have to separate customers’ orders by contract#, start with 582xx/583xx is for JCP, 589XX is
for TCP and 50xxx, 51xxx, and 52xxx is for PVH as shown below table. It may also help to use the
same recipe and save time whenever orders are repeated.

While Textile Lab Manager notifies testing report in writing document, merchandising team
informs to garment factories for record and should be two or three weeks ahead of bulk
shipment.

Note; as work shop, Production manager, even the planner should bear in mind that the testing
requirement is meeting to the standard and approved by the vendor before starting the bulk
production.

Table1.3 Testing Requirement of PVH, JCP and T

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3.3. New product development hand Loom Making
After receiving internal contract and CAD from buyer, JP technical department plan to work
with reference to CAD and approved hand loom from buyer. Here in case the pattern was made
before, no need to develop new hand loom, simply go to production.

Fig1.4. JPTE hand loom making machine

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3.4. Shipment samples for approval via DHL Express
In case of providing DHL express service, the shipper is responsible processing customs
clearance, generate booking confirmation and airway bill no for DHL pickup in order to ship
parcels to customer destination.

Pre-shipment formality for sending parcels via DHL

 Prepare invoice with reference to contract term

 Apply small item bank permit
 Process customs clearance
 Generate booking confirmation and DHL tracking air waybill no, inform whether
shipment is by freight prepaid or freight collect.
 Handover to Hawassa DHL express center apprise in

3.5. Follow of JP Textile Production progress

Regarding the production plan, the planner, plan, coordinates and expedites the flow of work
and material within and between departments according to daily, weekly and monthly
production schedule. There for planning and Merchandising need to review the distribution
production, work and shipment schedule, conferring with department supervisors to determine
progress of work and completion dates; inventory levels and solving production problem.

Yarn count in kg/ yarn

Chemicals (Anti-foam
Dyed weft yarn and warp
agent , Interelaced weaven fabric finished fabric
yarn package
Hydrogen peroxide
stabilizer etc

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.

Finished fabric entry

Dying progress progress Test measurement

Finishing progress
Sizing progress Customer sample

Grey cloth inspection

Weaving progress progress Shipping and
Warehouse inventory

Fig: 1.5 Follow of JP Production progress

3.5.1. Dyeing Department

 To produce color yarn cone package with customer requirement
 To increase physical property of the yarn softener, fixation, fastness, whiteness
and etc.

Dyeing workshop technological process follows

Dye plan Determinations of color loose yarn Assign bath Formula sheet Caging
Dye match color Dehydration Dry Rewinding Inspection Packing
warehouse

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 Dying bath: Before and After Dyeing.
The production capacity per day is 7000kg.
Total available manpower in dyeing is 147 employees among them five are chines worker and
141 Ethiopian workers (38 female and 103 male).

3.5.2. Weaving Department

Before jumping to weaving machine and its capacity, weaving department has different
sections such warping section (the process of converting yarn cone in to warp beam and sizing
section (the process which make the yarn strong and smooth by applying softener and pattern
making for the following process and drawing –in machine. Objective of sizing

 Strength: - To strength the warp yarn to with stand the tension applied during weaving
process and improves the weave ability of warp by reducing warp breakages in weaving.
 Pattern making: - preparation of warp way pattern in case of stripe and check fabric.
 Smoothness: - To increase the smoothness of warp yarn by gluing the protrude fibers to
the core.

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 Fig1.6 Warp and sizing section

3.5.3. Drawing in
Is the process of drawing- in yarn through drop wire heal wire and reed, so the function of
drawing in machine yarn through drop wire, heal and reed make it suitable for next process or
weaving based on technical sheet

Fig1.7: Drawing- in machine

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Therefore weaving is the process of producing a fabric by interlacing warp and weft threads is
known as weaving. The machine used for weaving is known as weaving machine or loom. In
order to interlace warp and weft threads to produce a fabric, the following motions are
necessary on any type of loom. Shedding, Picking, Beating, Let-off, Take-up are weaving loom
motions.

Weaving machines are classified according to their filling insertion mechanism.

 Shuttle
 Shuttle-less (Projectile, Rapier, Air-Jet and Water-Jet)

However, JP Textile use air jet loom machine and the air-jet loom is a shuttle fewer looms
that uses a jet of air to propel the weft yarn through the warp shed. The machinery used in
air-jet weaving consists of a main nozzle, auxiliary nozzles or relay nozzles, and a profile
reed. These machine the most preferable and more productive and it can work up to 600
rpm. The air jet weaving machines are the weaving machines with the highest weft insertion
performance and are considered as the most productive in the manufacturing of light to
medium weight fabrics, preferably made of cotton and certain man-made fibers (sheets,
shirting fabrics, linings, and satin in staple yarns of man-made fibers); it has anyway to be
pointed out that technically positive results are obtained at present also with heavy weight
fabrics (denims) and that some manufacturers produce also machine models for terry
production.

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JP Textile Air jet Machine Fig: Air jet loo in pic

Weaving machine in the JPTE works with computerize manner which means that if one
parameter changed all the other parameters change automatically according to filled data. The
parameters that are filled on the computer parameter are

 Speed of the machine

 Total length and length of the weavers beam
 Count of yarn
 Weft and warp yarn count with density
 Design of fabric
 Type of weft yarn
 Total number of end
 Fabric name

In weaving department the total no. of machines are 120 looms and its can produce up to
36,000Y with per day (three shifts) and 900,000Y per month. Total available manpower in
weaving department is 356 employees. 19 chines worker and 337 Ethiopian (117 female and
220 male workers,

3.5.4. Grey Fabric Inspection

Conduct inspection and identifying weaving faults in the fabric just after the grey fabric
production in the loom. In the inspection table the operator finds out faults in the fabric and
analyses their intensity by visual inspection. Some of the common weaving faults are: Pick
faults, e.g.-miss pick and double pick, wrong density /drawing, Pattern or design break, Oil

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stain, Crack, hole, Missing ends. As per standard, designed and set by Q.C. department, the
intensity of some of the major and common weaving faults are marked with points (Numerical
value) ranging 1 to 4 point being the highest point for every faults. The defects found and the
points given against them are recorded in the grey fabric inspection sheet. The measured
length, fabric sort, yarn lot, machine number etc. are also written in the sheet .Apart from these
two forms another from called grey fabric inspection daily production sheet is filled to keep the
record of total inspected grey fabric in the shifts in a day. This section conducts inspection with
two shifts and can inspect and mend fabrics up to 30,000Y per day.

Fig: Gray fabric inspection machine.

The four-point system derives its name from the basic grading rule that a maximum of four
penalty points can be assessed for any single defect and that no linear meter can be assigned
more than four points regardless of the number of defects within that piece.
Penalty Point Evaluation:
Defects in both warp / fill directions will be assigned points under the following criteria.
Defect Range Points Evaluation
Up to 3 inches 1 Point
> 3 inches < 6 inches 2 Points
> 6 inches < 9 inches 3 Points
> 9 inches 4 Points
The purpose of gray fabric inspection is mending and repairing fabric. There are10 inspection
machines. The production capacity per day is 30,000kg and can implement with two shifts.

3.5.5. Finishing department

Ever wonder how fabric becomes waterproof Or why flannel fabric feels soft? It’s because of
fabric finishing and treatments. In JP after many fabrics are woven and gray fabric inspection
handed over to finishing Dept. they are taken through physical and chemical processes to add

24
certain qualities. For example, they may be treated to make them softer, water resistant or
repellent.
In finishing workshop the mainly works process is:-

Singeing- De-sizing - Mercerization -Stentor Machine) - Pre-shrinkage - Peaching Finish -Brush

finishes

Fig: Air @24 finish-

3.5.6. Finished Inspection Department

Conduct inspection after applying finish type on the surface of the fabric. Give point based on
the four point system goods are examined in relation to some standard, specification or
requirements as well as measuring fabric to check if they meet the requirement. For defect
classification, the four point system assigns 1, 2, 3 and 4 penalty points according to the size,
quality and significance of the defect. No more than 4 penalties are assigned for any single flaw.
In finished inspection defects can be measured either length or width direction; the system
with gray fabric inspection remains the same. Whenever errors are recognized during fabric
inspection under 4 point system and defect must be assigned a no. of point system depending
on the severity/length. Therefore, before dispatching the QC manager check the penalty point
based on the defects record data found in the fabric roll and instruct for packaging and
shipment. Total manpower including Gray fabric and finished fabric inspection is 119
employees. Daily production capacity per day 30,000Y

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 Ready packing rolled fabric

Fig: Finished inspection machine with inspector.

3.5.7. Warehouse Department
Issues occur repeatedly and obtaining mismatched documents along with physical goods
because of inefficient manpower and carelessness of operators inspecting the goods which
create huge problem during spreading in garment factory.

Poor inventory Management system due to the company not assigned experienced person in
warehouse department and there is no software, app to manage stock available fabric, for this
reason we have face customer claim during booking when they enquire from stock goods.
Moreover, poor inventory control system leads to sell discount. Apart from finished goods
warehouse, remaining workshops, inventory management involves in the control of inventory
levels in raw materials, work-in-progress. Below is finished goods warehouse, fabric rolls
situated in plastic tube.

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 Bar code

Finished goods warehouse

Figure: JP Textile finished goods warehouse.

3.5.8. Production Logistics /shipping department

In order to ship samples and bulk goods to customer destination, JP textile logistic and shipping
department are closely working with freight forwarding agent and logistics service provider
such as DHL, CLS, Ginchi logistics. Below is questioned the procedures for booking containers
for sending bulk goods and samples.

 JP textile Plc prepares the products for shipment and requests the same logistics firm
CLS/Ginchi logistics for booking/shipping instruction.
 CLS /Ginchi logistics applies booking to shipping lines and prepares container for
loading.as per shipment schedule ETD (Estimated Time of Departure) and ETA
(Estimated Time of Arrival), CLS logistics brings container to load the items with the
presence of customs assessor.
 The shipped container will be sealed both by customs and the forwarder agent CLS
logistics or Ginch trading/logistics.

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  Trucks are used to take the containers to Djibouti and submit to the designated shipping
line.
 Shipping lines may sail direct to destination or use transit shipments. Very often, JP
textile uses any direct vessel to minimize the lead time.
 After vessel departs Djibouti port, the shipping line provides bill of lading to JP textile to
ensure the shipment is on board.
 As a shipper, JP textile tracks the status of the shipment and informs customer when the
truck uploads and left JP premises.
 Follow up with other garment factory in case shipment plan is by consolidation.

After the truck left JP, shipping team sends VGM (Verified Mass Declaration) along with
shipping instruction in order to make sure getting the equipment interchange receipt.
Moreover, JP company pay cost of transportation to forwarding agent.

 Execute payment including cost of transport /transportation charge, clearing charge,

documentation fee.
 Execute payment to insurance company.

3.5.9. Payment collection

As per agreed sales contract payment mode and delivery term, customer /buyer execute
payment to seller either bank to bank or send to sellers account directly. As per the NBE’s
Directives Export is allowed under the following Modes of payments so JP Finance team follow
up with seller weather the payment execute or not.

 Letter of credit, Sight/acceptance

 Documentary collection, CAD sight/acceptance
 Advance Payment
 Consignment

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 As of JP Textile the delivery terms that are using currently, CNF, FOB, CIF

 CIF (cost of insurance and freight): goods transported by sea/ inland water freight cost +
Insurance, clearance are covered by JP
 FOB (Free on Board): goods transported by sea/inland water, freight cost + Insurance,
clearance fee are covered by customer.
 CNF: while freight cost, clearance cost covered by JP (seller), insurance cost covered by
customer.

Payment collection from

Generally, the examiner had questioned to JP Textile logistic and shipping manager regarding
shipping incoterms, payment mode, cost of transportation and challenges they are facing
during shipment. Moreover, the taxation rate per shipment for customs clearance payment
including VAT). The below table are shipment details to Indirect export customer along with
service charge that we executed payment to Ginchi freight forwarding agent.

TAX WITH
CUSTOME SHIPPED
NO. OF UNIT PRICE$ 50 TOTAL(IN VAT(IN
R QTY(YDS)
SHIPMENT PER SHIPMENT BIRR) BIRR) TOTAL WITH 15%TAX
Exchange
PVHAM 167133 15 rate($1=32.9452
SHIPMENTS ) 24708.90 3706.34 28415.24
Exchange
ARVIND 22103 3 rate($1=32.9452
SHIPMENTS ) 4941.78 741.267 5683.05
Exchange
TAL 63259 3 rate($1=31.3404
SHIPMENTS ) 4701.06 705.159 5406.22
Exchange
CENTURY 22764 5 rate($1=31.3404
SHIPMENTS ) 7835.1 1175.265 9010.37
Table: Indirect export customer clearance fee to Ginchi Trading Freight forwarder agent

Moreover, the examiner collected cost of transportation charge data from shipping and logistic
manager as shown sea and Inland container size basis.

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3.6. Challenges of logistics and shipping in JP Textile

 Delay on completed production date that leads postponement to process pre-shipment

formalities and unable to meet the vessel date.
 Late import material from Wuxi
 Delay due to quality issue sometime.
 Delay in releasing customs declaration due to poor system thinking between transistors
and customs for both overseas and indirect export.
 Difficult to estimate availability of customs inspectors for shipment while working with
forwarder.

3.7. Conclusion and recommendation

In order to ensure the ordered production is smooth and efficient delivery, the production
manager, Merchandiser and planner should estimate the accurate lead time for import material
and run production as per the estimated starting and production finished date.

Fabric quality issue occur if the imported yarn is poor quality, or due to carelessness of
operator, machine problem, so dyeing workshop should check quality of yarn before starting
production and make sure the color quality meet the buyer standard or else they should report
to next department. Therefore, in case quality issue happens we recommend quality control
department ( grey fabric and finished inspection should communicate each other for taking
action in mending fabric before dispatching according American four point system.

Pre-shipment formalities have been issue like shortage of sufficient customs inspector or
examiner engaged to other customer, so JP Textile shipping and logistic team have faced poor
service from customs and customer service to garment factory which found inside the park.
Therefore, in order to avoid such inconsistency, we suggest both shipper and receiver should
write suggestion letter/cooperation letter to customs office to get good service or report to
IPDC (Industrial Park Development corporation), EIC (Ethiopia Investment commission Hawassa
Industrial park) for immediate response. Moreover, the forwarding agent should train transistor
good at communication with customs. Shipper should advise shipping documents to forwarder
at least two days early in order to schedule with customs officer.

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