OPERATIONS OF MAYFAIR TEXTILES

MAYFAIR TEXTILE

Contents
Industry Overview ......................................................................................................................................... 3 Cotton Ginning Sector ............................................................................................................................... 3 Cotton Spinning Sector ............................................................................................................................. 4 Weaving and Made-up Sector .................................................................................................................. 4 Company Background ................................................................................................................................... 4 Competitor Analysis ...................................................................................................................................... 5 Process flow structure .................................................................................................................................. 5 Process Selection .......................................................................................................................................... 6 Manufacturing Process ................................................................................................................................. 6 Stage of Purchasing ................................................................................................................................... 6 Stage of Batch Issue .................................................................................................................................. 7 Stage of Dehumidification, Opening and Cleaning ................................................................................... 7 Stage of Comber........................................................................................................................................ 8 Ring Department ....................................................................................................................................... 8 Stage of packaging .................................................................................................................................... 9 Cycle Time ................................................................................................................................................. 9 Quality Management & Control.................................................................................................................... 9 Benchmarking & International Standards................................................................................................... 10 Supply Chain Management ......................................................................................................................... 11 Purchase of Raw Material ....................................................................................................................... 11 Suppliers (Ginning) .................................................................................................................................. 11 Brokers .................................................................................................................................................... 12 Customer................................................................................................................................................. 12 Capacity Management ............................................................................................................................ 13 Forecasting .................................................................................................................................................. 13 Conclusion and Recommendations ............................................................................................................ 14 References .................................................................................................................................................. 15 Appendix ..................................................................................................................................................... 16

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Industry Overview
As Pakistan is among one the leading cotton producer in the world in terms of production and quality. It had performed well in the past but in recent years some issues affected this industry which are economic conditions, political, power crises and inflation but Pakistans listed textile sector recorded a 122% rise in its profit during the nine months ended in March 2011 on the back of better product prices in international markets and higher sales, said JS Research in a report. An analysis of 53 listed textile companies shows that their net profit jumped to Rs. 20.95 billion in July-March 2010-11 despite power crisis, high inflation and lingering security issues. Twenty eight spinning companies, part of the analysis, contributed a major chunk of Rs 10.9 billion to the total profits mainly because of rise in yarn prices. Most of these companies were carrying cotton stock bought in the previous quarters. They enjoyed a cost benefit as cotton and yarn prices rose. Profit of the spinning companies was up 172%, while gross margins, the ratio between gross profit and sales, increased by 103 basis points to 16.5%. Twenty composite companies were also included in the analysis. Their profit increased 83% to Rs 9.56 billion. Input prices for the composite firms went up, but the effect of it diluted because of better export revenues. Textile sector comprises of a number of pattern or step which are:

Cotton Ginning Sector

There are 1221 Ginning factories in Pakistan of which1075 are in the Punjab and the remaining 146 are in Sindh. The total capacity is approximately 20 million bales per year (assuming a 100 day ginning season).Against capacity, the total production of ginned cotton is 10.0 million bales suggesting an excess capacity of ginning in the country. Ginning is the sector which is first in the process of value addition leading to readymade garments or other textile products. Unfortunately, the ginning sector is out-dated and needs modernization.

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Cotton Spinning Sector

The spinning sector is the most important segment in the hierarchy of textile production. At present, it is comprised of 453 textile units (50 composite units and403 spinning units) with 9.2 Million spindles and 147thousand rotors in cooperation with capacity utilizations of 83 percent and 47 percent respectively, during July- March, 2003-04. The production of cotton yarn has increased to 1456.4 thousand tons in July-March 2010-11 against 1429.1thousand tones last year thus, registering a growth of1.9 percent.

Weaving and Made-up Sector

The patterns in the weaving and made-up sector which is comprised of hosiery, garments, towels, canvas, and bed wear are different from those of the spinning sector. The weaving and made-up sector has three different sub sectors i.e. integrated textile units, independent weaving units, and power loom units. Problems facing power looms encompass poor technology, scarcity of quality yarn and the lack of institutional financing for their development from an unorganized to an organized sector. And lastly is the Dyeing sector.

Company Background
Mayfair Limited is one of the leading cotton yarn manufacturers in Pakistan, producing high quality cotton yarn for sensitive consumers in Europe, the Far East and other regions. Operation of the mill began in the year 1991, being promoted by its illustrious founders. Since then the mill has shown remarkable growth not only in the area of sales & volume, but more importantly, in its stature. It is interesting to note that the mill commands a premium price in the markets where it is present, a recognition accorded to it by its customers in appreciation towards its commitment to quality, price and consistency of supply. It is a firm belief, bequeathed by the founders, that even in adverse market conditions, that supply be maintained to the extent required. It is an endearing quality well appreciated by our customers, who have been the mainstay in the remarkable progress of the company.

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The production capacity of the unit is approximately 33 tons per day. The product is versatile and finds use in many different ways in the textile and clothing industry of which it forms the essential ingredient. The high quality of the product has carved for itself and export market where all kinds of cotton yarns, synthetic yarns and their blends are exported. Export growths have been phenomenal and predict the future trends. Mayfair Ltd. has been marked from the beginning to spin a success story all their own. A total number of 1200 employees are working on the plant currently.

Competitor Analysis
As told earlier that around 422 spinning mills are operating currently out of which 24 are of large scale among which Mayfair is one of the Participant. Some have the whole chain of textile like spinning, weaving and dyeing (Nishat and Chenab) while others produce for orders of required purchasers. In terms of direct competition there is no such competitor but in terms of capacity and similar operations few competitors are: Cresent textiles, Zaman textiles, Landmark Spinning industries, Sunshine cotton mills, Spincot cotton industries, Premium textiles mills and Sitara spinning mills. These dont have direct competition with Mayfair because each one of it serve different region customer but capacity and nature of operation wise they are one and same.

Process flow structure

A process flow structure refers to how a factory organizes material flow. This process flow structure plays a key role in the firms strategy for building competitive advantage. Mayfair textile uses Continuous flow process. Continuous flow structure is used as their products are of a single type meaning no modification required and work 24 hours a day in three shifts. The sequences of activities at the Plant tend to be in a line and they are considered to be less flexible. Mayfair textile primarily engaged in producing yarn depending upon the order requirement so has a stable line of output. Company main focuses upon Make-to-order process as it is fully engaged in export business. Each order requires a different set of

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quality leading the company to work specifically to that requirement and not to manufacture for stock inventory.

Process Selection
Mainly Mayfair Textile uses Conversion Process. The basic Raw material i: e cotton in the form of bales are used and converted into the finished goods which in this case are the Yarn. Their process of making the end product is very long; first they receive their raw materials then transfer this material to the Quality Control Department where the quality is thoroughly checked according to their standards. Then for the production these raw material are then transferred to their respective workstation or the departments lined in a cue. As Mayfair textile does not compromise on Quality at any cost, Testing is heavily focused and several different aspects of the product are checked at each and every stage.

Manufacturing Process
The processes at Mayfair textile are designed to achieve high efficiency in order minimize costs and increase the speed of production, so that they can meet the large amount of customer orders on time. There are a total of 9 stages in the whole manufacturing process which starts from the purchase of raw material (Cotton Bales) to the shipping of the finished goods (Cones).

Stage of Purchasing: In this stage there are two phases; purchase decision and storage. In the phase
of purchase decision the management of the company decided upon the amount of raw matrial needed to be purchased for the whole next year. This decision is based upon the forecasted international and local demand of Cones and the companys storage and production capacity. Mayfair textile plant has a total capacity of storing 70,000 bales of cotton in its warehouses and open backyard. Currently the plant is storing an average amount of 35,000 bales given its production capacity and customer demand. The next phase is the actual purchasing and storage of the cotton bales which is done during September through mid-December which are the peak season for trading of cotton bales. There are a total of 25 warehouses

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at the plant, each with a capacity to hold 1600 bales. This stage of the process takes place only once a year and takes a time of around 1 to 1.5 months to complete.

Stage of Batch Issue: In this stage the cotton bales are moved from the warehouse to the plant as the
input for a complete day, as the daily consumption of Mayfair textile is 360 bales. These bale a moved to the issue room which is a storage point inside the plant. The whole procedure of moving the bales from the warehouse to the plant takes 2.5 hours (150 mins). From here three batches of 120 cotton bales are moved into the plant for processing during a day.

Stage of Dehumidification, Opening and Cleaning: There are 4 phases within this stage
whose main functions is to convert the cotton bales into a usable form for machines in the further stages. From this stage onwards the environment of the whole plant is changed by dehumidifying the air so that the cotton bales do not absorb moisture. The humidity level of the air inside the whole plant is maintained at 51-52 RM. At the beginning of this stage the cotton bales are kept in the low humidity environment for 24 hours in the Blow Room, after which they are moved to the Bledomat machine which open up the tightly packed cotton bales by roving the wires inside them. The bledomat machine works on 120 cotton bales together and takes 8 hours to completely open them up. The next two phases have 4 parallel lines of similar machines. The proceeding phase is of BOB/Muti Mixer/ Axi Flow machines, whose function is to separate the chunks cotton and blow air into them. Last phase in this stage is of BS/ Duftex Dux/ Loptex machines which remove major impurities in the cotton such as stones and leaves. Other impurities which come out during this process are polythene, polypropylene and jute which sold off to other manufacturing companies. The output of this stage is Lap Sheet. Stage of Micro Impurities: In this stage smaller and finer impurities like seeds, dust and short fibers are removed by the Card machine from the lap sheets to make cotton rope that will be complete clean of impurities which can affect the strength and quality of the product. The short fibers removed at this stage

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are sold to other companies to make other cotton products. The outputs at this stage are called Slaver Cans.

Stage of Comber: In this stage the cotton rope is mixed in three different machines to achieve
consistency in the composition of the rope. Three phases Pre-Comber, Uni-Lap and Comber each gives a similar output but with the thickness of the rope in each successive phase decreases. The outputs from this stage are Comber Cans. These comber cans are then moved to the next Stage of Draw Frame in which the cotton rope is now spun to attain strength. Initially in this stage the comber cans are spun into draw frame cans to make them strong enough to go throw the Simplex machine which spins the draw frame cans into Rovings. At this point in the process the cotton rope has converted into a thread which is still thicker then the final product and the unit of material has now decreased in size from a can to a cone.

Ring Department: In this stage the rovings are spun and stretched to change their thickness. The
thickness of the thread is varied as per the demand of the customer and the most important check to make at this stage is the speed of the process. Any problems or delays at this point slow down the plant making this the bottleneck of the whole manufacturing process. Rovings are spun into Bobbins and 1 roving is converted into 45 bobbins, therefore the replacing speed the filled bobbins by the operators determines the speed of the process. The final Stage of the production process is the Auto Cone. In this stage the strings are spun to remove any weak linkages and color impurities to assure the final output is of pure white color and has consistent strength throughout. Magazines loaded with 8 bobbins are loaded onto the machines to minimize replacement time and it takes approximately 33 bobbins to make one unit of the final product which is the Cone. These cones have two types of weights, 2.5 pounds and 4.167 pounds depending on the order specification by the customer. The last quality check on the cones is done by loading them onto a trolley and passing them through an ultraviolet shed which illuminates the white colored strings and any impurity or mix-up of thread thickness is identified and removed before sending it to packaging stage.

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Stage of packaging: This is last stage of the plant in which the finalized cones are reintroduced to
moisture. The cones are exposed to the high humidity environment for 24 hours of which 12 hours are in a moisturizing machine and for the next 12 hours the cones are left in the store where the air is being manually moisturized by sprinklers installed on the ceiling. After that these cones are packed into a Bag, which is standard output unit of the factory. A single bag contains around 25 cones and weighs approximately 100 pounds. These bags then loaded onto the trucks, which can carry around 422 bags and sent off to be shipped to the customers. ____________________________________________________________________________________

Cycle Time: The plant is able to fill 2.5 trucks every day, making the daily production to be around
950 bags (950 x 25 cones = 23,750 cones). The plant runs 24 hours (24 x 60 = 1,440 mins) a day with no breaks with 3 shifts of employees working at the factory for 8 hours per shift. The plant practically never stops and even on Eids the factory closes only for the namaz-e-eid. The Cycle time comes out to be 1,440 / 23,750 = 0.061 minutes or 3.64 seconds per Cone.

Quality Management & Control

Quality is foremost concern for the production department. A separate devoted laboratory is there for quality control. The quality check start from the procurement of raw material where bale moisture meter is used to check the moisture level in the bale, recommended is 8%. Afterwards when raw material is shipped and reached the facility a separate quality team inspects that for the moisture and wastage/trash. For this purpose expensive quality control machines serve that purpose. The quality is checked according to the desired order required and the benchmark standard used by the department for quality control. Once the preliminary investigation is done a clearance report is issued for the material to be used in the production process.

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As production process has been discussed earlier, sample from each stage and sub stage is sent to the laboratory and matched with the order required quality standards (a sample report attached in the Exhibits). For this purpose expensive quality control machines serve that purpose. The quality is checked according to the desired order required and the benchmark standard used by the department for quality control. The order is passed to the next stage once the quality assurance report is issued, if somehow the quality of sample didnt match the overall drum or belt is passed through the process once again.

Benchmarking & International Standards

USTER STATISTICS are acknowledged throughout textiles worldwide as the essential tool for quality benchmarking. They set out the vital quality parameters for the entire production chain from raw fiber to sliver, roving and yarn. Spinning mills value this statistics for quality comparisons and process optimization. USTER STATISTICS cover every stage of preparation and spinning for cotton, as well as other cellulosics, polyester, polyamide, polyacrylic and blends. All the main spinning systems are included carded and combed ring, carded open-end and air-jet methods.

USTER STATISTICS: four key benefits

For spinners, USTER STATISTICS are the only way to compare their products and processes against authoritative global standards.

USTER STATISTICS are quality reference figures which classify fibers, slivers, rovings and yarns according to current worldwide quality levels.

USTER STATISTICS are widely used the basis for yarn contracts and product specifications in buying and selling.

Leading textile machinery and accessory manufacturers depend on USTER STATISTICS to evaluate the quality impact of new developments in machine technology, monitoring or control systems.

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USTER Statistics Standards 2001-2007 USP 2001 USTER Parameters U% CV(W) % Thin-40 Thin-50 Thick +35 Thick+50 Neps + 140 Neps +200 Hairiness 8.16 -5 0 65 6 55 12 5.0 7.96 1.1 6 0 45 4 32 7 4.6 7.9 1.4 3 0 30 4 20 4 4.6 8.64 -12 0 100 9 75 20 5.7 8.24 1.0 10 0 55 6 60 10 4.5 20/S CM HOS USP 2007 20/S CM HOS Mayfair 20/S CM HOS USP 2001 26/S CM HOS USP 2007 26/S CM HOS

Supply Chain Management

Purchase of Raw Material
As explained earlier that quality is the prime focus of Mayfair so purchasing the finest raw material is also one the hardest job. Punjab has the finest cotton and Multan belt is famous in cotton production so cotton bales are purchased from those brokers or ginning factories located in that belt. Usually the given cities are taken under consideration while purchase of raw material: Sahiwal, Pakpattan, Multan, Lodhran, Khanewal, Vehari, Bahawalpur, Rahim Yar Khan, Bahawalnagar, Khairpur, Ghotki, Sukhur.

Suppliers (Ginning)
Mayfair textile has a mix blend of raw material procurement one through contractual ginning and other through Cotton Brokers. Usually cotton is purchased by the purchasing department based at Multan and given to the ginning factories for processing with decided percentage share. Some of the contractual business ginning factories are: Star cotton, lal cotton, deewan cotton, Chand cotton, Sitara cotton, Rahim

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ginners, Khan cotton ginners, Bismillah cotton, Kohistan cotton, New Indus ginners, Shan cotton, Sindh Agro Industries, Sunder cotton.

Brokers
Other than the contractual ginners some renown brokers engaged in business with Mayfair are: Ali Brokerage, Seemco Cotton Trading, Vohra Corporation, Usman Trading Group, Nadeem and Naeem Traders, Master trading house, Fazal traders, Asia cotton, N.S.K associates, Quality cotton corporation, Sibco cotton. Mayfair Textiles purchase raw materials from these brokers and store them in its warehouse. The materials are later moved the production process according to the demand of the customers. The materials pass through the manufacturing process and cotton bales are transformed from cotton bales into yarn.

Customer
Yarn is then supplied to the main customer. In the case of Mayfair textile Yarn is exported to Europe and China. Air transportation is used as the transportation mode for shipping the item from Pakistan to abroad. This is done in order to achieve time efficiency. Mayfair Textiles makes surety of the synchronization among supply chain members and confirm that the amount ordered of the raw materials is based on customer demands. Hence it is minimizing the bullwhip effect in the supply chain process. Mayfair textiles produced functional products which are bought in wide range by the customers. Yarn satisfies basic needs of clothing and textile industry and therefore they have predictable demand and long life cycles. Mayfair Textiles uses efficient supply chain strategy (cost minimization) and intends at creating cost efficiency by having one time material at hand thus low input travelling cost. For this purpose the company uses capacity utilization in production and distribution. Mayfair Textiles uses mass customization and has the ability to cater to the needs of a large number of customers in terms of variations in the quality of the finished yarn depending upon the order requisite.

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Capacity Management
When the materials are purchased from the suppliers they are placed in the factorys warehouse. There are 25 warehouses in the factory which have capacity to store 70,000 bales. Bales are ordered once in the year during the cotton season i:e from August to December and are stored in the warehouse for rest of the year utilization. The cost incurred in the purchase of bales from suppliers is the fixed cost and is managed with the demand so further they didnt made hassle to purchase as most suppliers work on the seasonal basis.

Forecasting
Mayfair textiles forecast the amount of yarn that will be demanded in a particular year and purchased raw materials based on the forecast using the past record of number of order adjusting the uncertainties. The factory produces products which have depended demand as the demand for cotton yarn is dependent on the demand for the cloth so thereby the Mayfair business is heavily dependent upon that but as they are into the export business and according to their officials the demand has been continuous throughout the period leading a hope for the company to be optimistic on the forecasting side.

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Conclusion and Recommendations

Currently the company is performing well the production process is well managed and a number of machinery has been purchased to avoid bottlenecks. Moreover, the capacity of the warehouse is sufficient to store the raw materials and meet demands of the customers. Nevertheless, it is recommended that the company should keep more poka yokes for the shortage of electricity and gas. As a consequence of load-shedding the textile production capacity of various subsectors has been reduced by up to 30 per cent. The company can also seek manufacturing options in foreign countries (Bangladesh) thereby achieving the status of an MNC and producing specific products at both places to achieve economies of scale and efficiency. Moreover, the company needs to coordinate with the brokers and suppliers to have such a design of material flow that if within year material is required it can make some arrangements at hand.

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References
www.mayfair.com http://www.eurojournals.com/rjis_14_04.pdf http://www.ptj.com.pk/Web-2011/05-2011/Editorial.htm http://www.livenewsarticles.com/business/textile-exports-to-us-may-drop-18-in-volume/ Pakistan Cotton ginners association report 2010 2011 http://www.aptma.org.pk/ http://pakbiz.com/Textile-Spinning-Mills_SID226.html www.cottonstocks.com.pk www.pakistanbusinessjournal.com

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Appendix

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