Current Scenario and Future Prospect of Supply

Chain Management in UTAH Composite

Garments, Bangladesh.

Prepared For
Dr. Nikhil R. Dhar, Ph.D
Professor
IPE department
BUET
Prepared By
Sourav Paul
Batch: 52D ID:37

Institute of Business Administration, University of Dhaka.

Date of Submission: June 7, 2016

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1. Executive Summary:
Todays apparel industry is more demand centric. Foreign buyers place orders according to the need of
them. Bangladeshi garments normally play a role of tailoring shop of fulfilling the role of manufacturing.
Many factories are concerning about the compliance issues now days to attain better position in ethical
issue. Supply chain helps to demonstrate the application of proper management of all the possible layouts
to have a better understanding of the process.
Here I conducted research on UTAH garments to find out their prevailing supply chain management system
and any possible gap to find a better way of implementing Supply Chain Management. I used both primary
and secondary data to reach specific findings.
UTAH is a new generation garments originated from Pakistan and started its operation in Bangladesh from
2002. They managed most of their production and warehouse facility through an integrated computer
system which is an older version of present ERP.
They have many opportunities in implementing better management systems through ERP and more
penetration of standard Supply Chain management.

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2. Acknowledgement:
The report is submitted as an effort of being in supply chain course in 4 th semester of Institute of Business
Administration, University of Dhaka.
There were numerous helping hands in conducting the total research. It added a lot to my practical
exposure and knowledge.
I would like to express my gratitude to my course instructor Nikhil R. Dhar, Ph.D. whose generous guidance,
attention, and particularly unwavering encouragement always kept my focus on the desired work to be done
to conduct the research. The paper he provided devising exact key points how to write the findings helped
to shape this report.Nevertheless Md. Raisul Islam , Production executive of UTAh Garments helped with
his time and insights to get exact findings.
Finally I thank the almighty God for keeping me on track during the full process of the report.

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3.Contents:
Table of Contents
1. Executive Summary:......................................................................2
2. Acknowledgement:........................................................................3
3.Contents:........................................................................................4
4. Company Information:...................................................................5
5. Analysis of Supply Chain Delivery Performance.............................5
UTAH Garments business structure:...............................................5
Manufacturer Lead time:................................................................7
Types of Inventory:..........................................................................8
6. SCM implementation Methodology Challenges:...........................10
Ticketing System:.........................................................................10
Log book:......................................................................................11
Employee attendance...................................................................11
Truck number entry......................................................................12
Forecasting:..................................................................................12
JIT layout:......................................................................................12
Particular challenges in implementation:......................................15
7. Business benefits of SCM implementation:..................................16
8.Summay:.......................................................................................17
9.References:...................................................................................18

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4. Company Information:
Utah is one of the composite factories in Bangladesh. Its a Pakistani
multinational company. It has been operating since 2002 in Bangladesh and
its a 100% export oriented composite factory. Here dyeing, knitting, washing,
printing, embroidery are done full proficiently.
In the two garments, there are 76 lines. They have many departments for
maintaining the sector like production, quality, cutting, merchandising,
planning, industrial engineering etc. Most of their buyers are from European
Union who are working with them cooperatively. H&M, addidas, next, jordous,
jecipeny, carters, puma, s- oliver, American eagle etc are their main branded
customers. They have around 10000 employees and per day approximate
100000 pieces of garments are produced from this garments.

5. Analysis of Supply Chain Delivery

Performance
UTAH Garments business structure:
Readymade garment is a labor-intensive industry and relatively simple
technology compared to other high-tech industries. The UTAH garments
manufacturing units are like tailors shop; getting order from the foreign buyers
and then import raw materials specially fabrics from the foreign suppliers or
sometimes buy from the local market as per order, then manufacture
garments and supply those to the buyers.

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Foreignbuyers

Local raw material

Supplier

Collect Raw material

Garments Company
Manufacturer

Information flow

Foreign raw material

Supplier
Supply finished
products

In the RMG sector, the Manufacturer - Raw materials Supplier relationship is

different. In this Industry the main raw materials are fabrics (Cloths) and few
accessories are like button, collar etc. About 80% of the suppliers of
accessories are local.
UTAH garment needs more time in getting higher due to import of fabrics
mainly from China, Indonesia and India,The total average time to import
fabrics from abroad is 25-30 days.But this was not the case always.
Previously there was around 120 days in total lead time. But after improvising
some modern supply chain techniques they have successfully reduced the
time. The previous flow of process is visualized in fig.-2 below.

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Manufacturer Lead time:

Just in 2003-2004 whole scenario of shipment and product distribution was
different than that is now a days in UTAH garment. Previously it would take
total of 120 days between the supplier and to bring the raw material and to
complete the finished product.
Total supply time = [{Information lead time} + {(Order lead time)}]
Or, = [{Information lead time} + {(time to manufacturing
fabrics) + (Time to shipment of fabrics)+(time to unloading fabrics
And customs formalities at port) + (time to take
fabrics
From port to manufacturing point) + (time to sample
approval and production of final product)+ Time to
shipment or export of final products)}]
Or, 120 = [{7} + {(15)+ (25)+(14)+(6) + (23)+(30)}]

From the above equation, we can say that through the first four stages a
manufacturer received fabrics fromthe suppliers after 60 days on average.

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Out of this the shipping time of 25 days is constant. There was no chance to
reduce this shipping time but they could successfully reduce the rest 35 days.
There are two parties and various activities involved between suppliers and
manufacturers in the supply chain. It can be seen in the fig.-4 broadly. The
activities and time consumption area have been illustrated here through four
boxes (A-D) or stages.
Normal scenario was the following flowchart:

(A) Supplier
received order
from fabric

(B) Manufacturing
Fabrics &
shipments

(C) Unloading
fabrics at sea
Port

Manufactu
rers Plant/
Warehous
e

After final contract with the buyers, manufacturers first place order to the
foreign fabrics supplier (A). Then the supplier manufactures fabrics (B) and
sends fabrics by shipment. After a certain time the ship reaches at the port
(C). Here after unloading and completing some custom formalities fabrics are
sent through train or road transport to the manufacturers productionplant/warehouse (D). For this total process from A-D manufacturers need 5575 days.
They thought that at the time of import a proper management in the supply
chain could reduce 30-35 days. The rest of the time of 25-35 days is needed
only for shipment. Management in the supply chain could reduce 30-35 days.
The rest of the time of 25-30 days was needed only for shipment. Most of the
buyers of UTAH group have their regional office in Bangkok or Singapore.
One of the largest European garment sub-contractors based in Dhaka is
Hennes & Mauritaz (H&M) from Sweden (Asia invest, p-11, Sector 4.). The
regional offices and the buyers resident in Dhaka can build a stock of the
required quality of fabrics in advance before making final contract with the
manufacturers. It contributed definitely to reduce the manufacturing time.
Again the proper and efficient management at port and good transportation

system reduced time to receive raw materials from port to manufacturing

plants. So after revising all these steps they came down to assure export of
RMG products by 45-60 days regularly depending on the total volume needed
and type of products.

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Types of Inventory:
There are mainly four types of regular inventory in UTAH group.

Cycle Stock: Apparel operation usually is carried out in batches, which

results into accumulated stock before and after a work-center unless
the entire batch is completed. This kind of cycle inventory is direct
manifestation of any batch process. Its level depends on batch-size
and production rate. These are the main type of inventory and one of
their major resource occupying section.

Work in Process Stock: This is common to all kind of operation- batch

and continuous. To keep running, every machine needs certain
inventory, which is fallen under the present category. Type and
productivity of machinery determine the level of this type of inventory.

Decoupling Stock: In apparel operation, seldom it is possible to

balance productivity of every workstation. Differential productivity
between work-centers creates bottle-neck area across apparel
manufacturing chain. Decoupling stock is created to nullify this
bottleneck effect and to maintain smooth material flow. Its level is in
proportion to the rate of differences in productivity between two workcenters.

Safety Stock: This is a result of supply or/and demand variability. To

efficiently carrying out operation and satisfying consumer demand,
organization needs to maintain stock at certain level, which depends on
firms policy and on fluctuation in supply/demand

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6. SCM implementation Methodology

Challenges:
Every firm along the supply chain can use this simple method to estimate the
Performance of its suppliers, internal operations, logistics providers,
warehouses /distributors in terms of fractional success in achieving delivery
performance. For each entity in the supply chain, i.e., a firm, its supplier,
distributor and transporter, norms must be fixed while negotiating contracts.
We can rank the entities depending on their past performances and form
strategic alliances with only reliable parties. Every time, the benchmark should
be revised with mutual agreement on terms and conditions of supply for
smooth flow of materials along the supply chain with enhanced delivery
performance to customers. At present the following systems are prevailing in
UTAH garments.

Scope of improvement:
Ticketing System:
This system allows to add tickets and number mark on each garments
stock carrier. They can identify which products container is for which
particular production and place those is respective area of raw
material. This can be improved by implementing KANBAN system.
KANBAN will allow the ware house materials to tag particular colored
tag with each box or cartoon according to their designated use and so
these will be easier to monitor the exact condition of them. If any
product is out of order or need to be changed that can be easily
identified by looking at the attached KANBAN.

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Log book:
When a particular sack or container is taken from ware house that is
noted manually in log-book and that is maintained over a period of time
and rechecked to make sure whether those are aligned to the total use
in production floor. Since all the data keeping are manual that
sometimes make is tough to find exact track of any products
movement.
KANBAN will be very helpful in maintaining exact flow of material and it
will be possible to keep track of the materials taken away from the ware
-house.

Employee attendance
There are many numbers of employee who are not that educated to
write their name by themselves. As they arrive at entry point their name
in entered in the attendance book by the helping hand of floor in
charge. These sometimes keep a secret gateway of false statement in
the attendance book.
An integrated ID verification system is must for this garments to exactly
identify everyones attendance.This may sound a very expensive and
time consuming work now but this will have a better impact in coming
future.
Less gap in working process and more authorized supervision will
increase productivity of the employee. Nevertheless many Bangladeshi
organizations are already implementing this system.

Truck number entry

Whenever a truck or minivan brings in good from the supplier they are
given a token of receiving and part of that token is kept signed by the

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receiver. This whole process is manual and that is tough torecheck in

time of any necessity. These systems could be easily improved by
using a computerized system.

Forecasting:
Techniques of forecasting must be revised and maintained in a more
handy way to reduce expenses of excess inventory. UTAH garments
presently follow and order the products when necessary and mainly the
button, Zipper these are ordered according to assumptions and spare
ones are not taken into considerations when a single order is
completed.
These techniques are age old and proper management in ordering
should be maintained to ensure best use of previously unused
resources. A computer generated number of the spare ones to all
departments will be able to provide the exact number of necessary
products when a single batch is under operation.

JIT layout:
According to regular operation in UTAH garments they are following
two types of arrangements in their production floor. One is in ZIGZAG
pattern and other is Y pattern.
They normally have 40-43 machines in a single line. For any knit wear
production they use this regular lines in ZIGZAG pattern. In time of
jeans production they use line consisting of 60-70 machines and use U
shaped pattern. Very minimal number of products of special attention
are prepared by Y shaped production line.
Warehouse is in a separate floor. But in condition of JIT layout excess
space in single unit could be used for regular inventory and time
management would be more efficient.
In JIT techniques similar functionalities are managed in single room
comprising of similar functionality technicians. These cross functionality

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would be helpful to build their capability and efficiency in other areas

other than their own specialized areas.
Example of the present layout is provided below. This varies according
to different production requirements.
This picture is collected directly from UTAH factory floor.

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Problem I identified with this layout is these machines are fixed and very
heavy to move. So ultimate utilization of floor space is not possible yet. It
would be a better idea if these machines were made moveable to redesign
the overall area in term of utilization of JIT layout.

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Particular challenges in implementation:

1. All level of employees are already used to work in a system for a longer
period of time and they will be reluctant to change the system as they
are resistant to come out of their comfort zone. Moreover making a
readjustment and implementation of computerized system will increase
transparency and their will be lesser chance of personal interest.
2. There must be a decision about what are the data UTAH garments
want to store from the previous operations and which they dont.
3. Including an ERP process may require to redesign many processes
they are doing in different way now and this will take time.
4. Including an ERP is costly and these will take all the management
authority member to be assure of the changes as this will cause
substantial amount of money and time.
5. Automated ID system has its own flaws. Nevertheless managing all
these huge number of population in a garments factory will be tiresome
to handle. Since many of them are not educated enough managing the
ID card system may cause anomaly and confusion among the
employees.

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7. Business benefits of SCM implementation:

Levels of inventory in supply chains are directly linked to cycle times, and
cycle times in physical logistics are largely a function of distance, uncertainty
and complexity. From the point-of-view of the movement of physical goods, an
integrated supply chain offers the opportunity for firms to compete on the
basis of speed and flexibility, while at the same time holding minimum levels
of inventory in the chain. Rather than goods being held at various points
within the chain, they will be moving between these points.
Implementing better and managed supply chain in UTAH garments can
benefit them in different perspectives of business.

Will help to get a overall process view.

Improved efficiency, Lower Costs and increase productivity.
Leveraging IT to enhance speed of task and increase production.
Will help to reduce idle time, lead time and non valued time.
Information sharing will be more transparent.
Keeping track of previous business record will be more automated and
they can keep track of possible order incoming.

Generate, manage, and collaborate on reliably accurate forecasts.

Analyze sales history and forecasts in units, revenues, margin, or any

other unit of measure

Automatically respond to seasonality, shifting growth trends, and

product mix transitions.

Objectively manage new product introductions.

Track, report, and systematically improve forecast accuracy and

customer service performance by apparel or any other subordinate
apparel accessories.

Manage product lifecycle transitions from season to season. This help

in a manner how new trends in producing different designs are evolving
time to time.

Generate sourcing plans that keep inventories in sync with everchanging forecasts and static capacity constraints

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Drive an effective sales and operations planning process.

It is observed that company first identify and work on reducing and eliminating
non-valued added activities, processes and components in the business. It is
only when they start to adopt a holistic view to efficiently address enterprise
needs that they will be able to deliver their products and services with speed,
ease and quality.

8.Summay:
Based on the above discussion the following decisions can be made:
All the business channels should work better to implement the
wide spread opportunity of supply chain management.
ERP system will reduce substantial amount of work load and
help to monitor work process.
Implementation of KANBAN will help to keep good track of
material flow through the inventory and warehouse and
transparency will be more prevalent.
Relationship with supplier will lead to reduced lead time and
more accurate measure of cost in production process.
Better flow of information through the channel will make sure
that the value chain partners are provided with enough
emphasis.
Variable task performed by workers will increase flexibility in
the working environment.

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9.References:
1. http://www.ajbms.org/articlepdf/7ajbms2012282716.pdf
2. Interview with Mr. Raisul Islam. Industrial engineer(executive)
3. Official website of UTAH group.
4.
https://globaljournals.org/GJMBR_Volume14/4-Supply-ChainManagement-in-Garments.pdf
5. Slides of honorable Nikhil R. Dhar, Ph. D, Professor, IPE
Department, BUET

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