Rotación interna y externa de cadera

The capability of a manufacturing company in building successful collaborations with its partners can be divided into production, communication, logistics, and planning and forecasting. These capabilities are discussed separately in this section in the context of Textile Co.

5.2.3.1 Production capabilities

An examination of the past records of the company revealed that it has made substantial investment in production technologies in the last five years. Since the company has a 24

hours production policy, it views investments in appropriate technology as critical. New production technologies have been introduced regularly with 10% of the old machines replaced annually.

In addition to production capabilities, the company also recognises the need for efficient planning, and scheduling of its operations. On average, the company accepts a daily order of 25 thousand meters for specialised and regular products, which is approximately its full capacity. Successful completion of this order is highly dependent upon proper and efficient capacity utilisation of its production facilities. To add to the complexity, the company has a variety of machinery with differing production rates and qualities. For example, the company has three machines namely Saurer, Tajima and Gigliotti that run 24 hours per day. The production rates are 1000, 100 and 500-1000 meters per day respectively. Tajima is a multi-head embroider machine that produces fabrics of the highest quality compared to the other two machines. Selling price and demand for the product from Tajima machines are very high. Based on the capability of the machines, jobs are allocated (scheduling) to them in accordance with the received orders. For long term customers, Textile Co. uses historical orders to forecast their demand. These forecasts are also used as input for production planning and scheduling.

5.2.3.2 Communication and logistics capabilities

Efficient communication capability is vital for the businesses operating globally. The production lead time, which is the period from the day of receiving the order until the product reaches the customer, varies from six to eight weeks for normal orders and about four weeks for urgent orders. In order to facilitate production planning and scheduling given this tight time frame, Textile Co. has invested in the appropriate communication

infrastructure that would give maximum flexibility. For example, all employees in the sales and planning division are provided with the latest Personal Digital Assistants (PDA) such as BlackBerrycommunication system (a Wireless handheld device that provides access to email, corporate data, phone, web, and organiser features). They use Skype to communicate with customers in the UK and USA, and Kiwi for Switzerland and Germany. This helps to schedule or re-schedule production. Nearly ten percent of the total profit of the company is claimed to be spent on technology improvement and employees training every year. The company spent around ten million Indian rupees to have SAP in place. The company is using SAP ERP software and SAP CRM software for enterprise resource planning, production planning and scheduling, forecasting and customer relationship management. Communication facilities with upstream supply chain members generally relies more on long term relationships than on technologies. Most of the suppliers of raw materials are located in close proximity and are usually contacted through telephone and fax. Based on the information on production lead time and customer orders, the ERP software automatically generates inventory status reports that are used by the company to place raw material orders. The company never experiences a shortage of raw material thanks to their long term relationship with the suppliers.

However, Textile Co.‘s performance in using appropriate third party logistics provider (3PL) has not been found to be satisfactory in the past few years. In estimation of production time, Textile Co. arranges a 3PL to deliver finished products to their customers in Europe or USA. The company has experienced a higher transportation time through local 3PLs, which becomes crucial especially when the production is delayed. In those cases, Textile Co. has used their customers‘ preferred logistics service at higher cost to secure fast

delivery. This problem is expected to be avoided through more efficient communication with the 3PLs.

5.2.3.3 Planning and forecasting capabilities

Planning plays a major role in supply chain processes such as production and replenishment. As an increasing number of orders impose tighter production capacity constraints on Textile Co., the company keeps its production plans ready at least three months in advance. The company also requests a minimum number of orders from their clients to schedule and allocate jobs to different production units. Although production takes 4 to 6 weeks, the company proclaim their total lead time (time span between order and delivery/replenishment) to be 8 weeks for irregular orders.

Whilst, Textile Co. independently delineates their production and material resource planning, the company encourages their customers to get involved in promotional sales planning. Textile Co strongly supports sales promotions as it is essential for improving sales of newer products. In addition, sales promotions for established products are believed to retain customers and hence create long term relationship with buyers.

Once the promotional plans are finalised, the forecasting of promotional sales is collectively done with the cooperation of all downstream members (buyers), who are involved in promotions. Production planning and material procurement planning of Textile Co. are dependent on forecast figures. A draft job schedule is also planned in advance helping Textile Co. to decide on job outsourcing depending on the availability of production capacity. Here it is worth noting that all of the machines do not make similar products and hence job scheduling becomes more and more essential for uninterrupted

production and replenishment. For example, if promotional sales are scheduled at the same time period for two different market leaders (competitors), the company needs to produce exclusive products for both of the companies at the same period. This requires more sophisticated machines which are obviously out of reach of the normal capacity and hence some of the jobs need to be outsourced. These managerial decisions are very much dependent on forecasting.

For MTO products Textile Co. does not need to make short term demand forecasts. Customers‘ orders are entered into the MRP system. The MRP engine then generates purchase and production orders.

The company has been engaged in collaborative forecasting for several years. Textile Co. is using sales forecasts in its production planning and replenishment for MTS products (see Figure 5-2). In order to improve forecast accuracy, the first and foremost step is supply chain collaboration with downstream and upstream supply chain members. The current collaborative arrangements of the company with the other supply chain partners are described in the next section.

Figure 5-2 Importance of forecasting in Textile Co.

Textile Co. Customised products (MTO) Standard products (MTO/MTS) Forecast (MTO)

 No short term forecasting

Forecast (MTS)

 Maintain SKU level  Avoid stock out and

obsolescence  Promotion plan