Masood Textile Mills LTD.

Supply Chain Management

Bilal Nadeem Tahir S. M. Sohaib Atif Talha Bin Tariq

Humayun Rana Ali Asad

Introduction Masood Textile Mill is a public limited company listed in all stock exchanges of Pakistan and is leaders in responding to up-and-coming global trends of textile by creating and developing very basic to very highly fashioned attire by developing and manufacturing of knitted products. They transform the abstract ideas of their customers into reality through specialized insight and technical and mechanical expertise. MTM team is the strong believers of customer satisfaction as they are believed are the reason of their success. MTM has got state of the art technology; products know how and most importantly the right mind set to achieve customer satisfaction. Masood operations are running throughout the world. Masood is expert in creating and manufacturing of T-shirts, Polo shirt, Jogging suit, Henley shirt, Raglan shirt and Tank top, Bikini, Shorts, Pants and Sleepwear. Driving force behind the achievement of Masood enormous escalation in past years is the experienced professional staff, a well groomed team of talented merchandiser, trustworthy suppliers and up to dated technology. Masood on the basis of its production is largest one in Asia producing 120000tons of garments every year. Masood textile mill was incorporated on October 1986 as public limited company and started off after its listing on Karachi. It was listed on Lahore stock exchange in 1988 and now it is listed on all stock exchanges of Pakistan. Its head office is located in Faisalabad (Universal House, West Canal Road, Faisalabad) with 6 units in Faisalabad, one in Lahore and one in Karachi. Masood has also invested in Bangladesh and has one unit in Dhaka. Masood Textile also own Software Creation, a software development company.

Vision Statement "Our vision is of continual improvement and sustained growth, and of a family of workers. Who are given the best compensation benefits and working conditions in the region. In this respect, mTm continues to emphasize the need to invest in and develop its most precious resource - its human capital. mTm continues to provide training courses and selfenhancement opportunities for all our workers".

Mission Statement Be dynamic profitable and growth oriented by providing good return on investment to its shareholders and investors, quality products to its customers, a secured and friendly environment place of work to its employees and to project Pakistans image in the international market.

Customers Profile MTMs 65% of sales are concentrated through US market and rest from European countries i-e G9. Their main clients are big chain stores in these markets: Their main customers are: Wall Mart, JC Penny, Tommy Hilfiger, Notica, Chap, Under Armor, Fruit of the looms, Adidas Footlocker, Mark and Spencer

Supply Chain Management As MTM is complete vertically integrated textile composite, its supply chain management is effective and efficient. Merchandising department is the one which keep follow up of every aspect of the order from the placement of the order till the shipment of the order. Every single unit of the MTM is connected via ERP system and every stage of the order can be tracked and monitored.

Production planning and control PPC stands for product planning and control. Its function is to plan a purchase orders and execute them as and when required. PPC is the bridge between merchandising and production department. It plays a key role in a garment manufacturing company. The department takes responsibilities start from the negotiation between merchandiser and customer and ends on the shipment of PO. It works on the model of 3Ms which are 1. Man 2. Machine 3.Material

There are two sections in PPC department. Material requirement planning ( MRP) Capacity Resource Planning (CRP)

When a purchase order (PO) arrives at MTM material requirement planning has started e.g. JC penny ordered for 100000 polo shirts, departments would start planning how much yarn

would be needed, which chemicals they would have to use, hence from the arrival till its shipment, all of the materials required is planned by the department. Then this report is sent to the CRP (capacity resource planning). Capacity resource planning: As soon as the report from MRP arrives CRP starts planning that to accomplish the order in time only in house resources would be sufficient or outsourcing had to be done. e.g. To complete the 100000 polo shirts order of JC penny how many yarn bags daily could be provided by the spinning would they be sufficient or they had to buy the yarn from other company , if yarn is needed they only purchase from Sapphire and Ibrahim to fulfill the capacity. If knitting machines are booked and they don't have sufficient available capacity to run the JC Penny Purchase orders they only go to jaguar and K&M knitwear to convert their yarn to the fabric. Hence other processes are not outsourced as other companies don't follow the quality control and assurance techniques according to the international quality standards.

Merchandizing Merchandizing forecast the future demand of the market with respect to the latest trends in the market. MTM anticipates competitors as well like China, India and Bangladesh for their policies and pricings; MTM has scales and synergies by which it is now successfully competing with China on Price and Quality. Merchandisers also search about the accessory purchases and negotiate the prices with the suppliers and coordinate stock inventory of such materials with respect to their market supply. They take samples of various materials and keep them in store for future requirements. When the inquiry comes in the company the merchandiser starts working on it and with respect to the customers demand he plans and prepares samples with help of other departments such as R&D and production to make the sample as per requirements of the customer. When the sample is approved by the customer (the samples are sent thru FEDEX for physical approval, also pictures of the product are sent through email), the merchandiser coordinates the confirmation of the PO (Purchase Order) and follows it up with the customer if there are any delays. After the PO is confirmed the merchandiser sends it to the PPC department to

further perform their functions. Merchandiser then follows it up with the PPC to provide them the sample as soon as possible so that they can send it to the customer for approval again. After that they follow it up with the customer for receiving the sample and further take suggestions or improvements, which are defined by them.

Efficient Response Program ERP is very much different from database system. Most of the manufacturers in Pakistan used database planning but Masood Textile Mill use ERP. Both are live systems which mean that everything is updated on time but the main difference between the two is that in ERP everything is updated with the click of one button while in database system it is not possible. One more advantage which ERP gives to MTM is that this system calculates the quantitative data into rupees. For example they can calculate their loss in rupees, if one of their machines is not working for few minutes; ERP calculates the loss in rupees according to the minutes the machine is not working. It helps MTM to calculate accurately the loss of stopping a machine for a particular time. One more advantage is that a notification is sent to all systems if a machine stops working. System also points out minor details like how many racks are empty in a ware house so it prevents MTM to be exploited by employees.

Spinning Yarn procurement is done on seasonal basis and it is pre sourced before the start of the season and made sure that there should be no deficit when it comes to the utilization of yarn to produce fabric. Cotton is purchased throughout the Pakistan especially from the Multan strip and to increase the stretch length of the fabric cotton is imported also from Brazil, Egypt, India and Bangladesh and mixed with Pakistani cotton. Material requirement planning: MRP department of MTM ensures materials are available for production and products are available for delivery to customers. Maintain the lowest possible material and product levels in store.

Knitting Masood textile is one of the biggest and prime fabric facilities in Pakistan having the capability to produce all kinds of knitted fabrics in 100% cotton & blends. It has different knitted fabrics for different kind of apparels.

Masood textile mill is one of the largest fabric facility in Pakistan and is capable of creating A Vanguard Supreme machine knits body size fleece and Mayer & Cie machines for open width fleece fabric. These machines have Dia gagues which enables it to produce any width; this further reduces their cost of production. To further inspect and ensure quality they have an online 100% fabric inspection system to meet the international standard because they only export their product so they have to ensure and maintain high quality products for their customers as their customers also require 4-point quality system checked products, which is being followed at the manufacturing facility.

Processing After the fabric is reached in processing first of all singeing is done to remove the fluff of the fabric. After singeing, bleaching is done to change natural color of knit fabric from cream to white. Then on latest digital dyeing machines fabric is dyed according to the customer needs. After the fabric is dyed it is sent for printing if it had to be demanded by the customer. After printing it is ironed and sent to the cutting department.

Cutting Skilled unit managers work efficiently on cutting units with latest machinery including Gerber Plotter. It is like solving a jigsaw puzzle its operator ensures that maximum usage of cloth is done and loss is minimal and effectively with its help use every corner as every garment manufactured is first cut in 45-75 pieces varies from garment to garment.

Stitching
There are 1868 stitching machines which are run by skilled and expert operators. These machines are state of art and stitching is done according to the customer specifications. Quality control MTM has the latest technology employed for the best quality manufacturing from stitching, knitting, weaving to dying and packing. They have high quality assurances with in departments and quality checks are done by the Quality Assurance department to ensure the product being produced is of the highest quality and is up to customer standards. At each step the product (each unit) is bar coded and relevant information is entered in the system to track, manage and track complaints to the last step. This system is the heart of quality control. If a

defect is detected by quality department employee, the defect can be traced back to the employee who is responsible for the defect. Bar code is attached to the product at every single stage of the production and can be scanned whenever needed. Overall Quality Level OQL is a standard where garments are audited on their total rating, also called average quality rating, after the AQL, when over percentage of rejection is checked it should also comply with the standards already defined or decided in agreements.

Tagging and Packing After the stitching is done, the lot is sent to the tagging department. In this part of the supply chain the price tags are put on to each and every article. The percentage of material is put down on the tags for e.g. 80 % cotton, 20 % polyester. The bar code and logo is also put on every article. After that packing is done in which wrapping of the articles are done. After this process the whole of the lot is sent to storage rooms located in another unit located on Sargodha Road, Faisalabad.

Distribution network Masood textile is following two distribution strategies depending on the demand of the consumer. The first strategy is manufacturer storage with direct shipping and second strategy is manufacturer storage with customer pick up in which masood textile delivers the product directly to the customer door or send the the consignment to their storage in the nearest area specified by the cutomer. Masood has four storage houses in USA and two in Europe. In both of these strategies the end consumer is the client of masood textile. Now the structure can be explained by the further examples. Wallmart is a customer of masood textile and it has ordered 100,000 articles of a product to be delivered in california (USA) at Madera wallmart store, then masood is going to directly deliver the product at that point. Other perspective is that Wallmart orders its consignment in a way that he wants to pick it up from the nearest storage house so masood will allocate him the location of the nearest storage house and send the ordered product their. There are certain benefits that masood gives to their client such as they strore their inventory regardless of the time, eg. Wallmart has paid to masood for the consignment and says to masood that you keep the inventory stored in your storage house and they will timingly take the product. Such as the consignment has arrived at the storage and

afer 10 days wallmart asks masood to deliver 10000 products to one wallmart store and 20000 to other stores after a certain period again. One other way of delivering the products is that they handover the whole consignment to the client at a given port again acording to the clients demand. This happens on a very rare occasion. The diagram below gives a genreal view of the distribution flow of Masood Textiles.

ISO 9002 Certification

Masood Textile mills holds ISO 9002 certification and meet quality standards given by customers.

WRAP Certification
Masood Textile mill has a hand on WRAP certification which shows that the legal, benevolent and ethical manufacturing of goods at MTM. It depicts that all the practices at MTM are in the boundary of moral principles and procedures.

Warehouses There are three stores in MTM. 1. Main store Main Store: There are two types of things, which come under main Store. 1. General: Stationary, machine parts, maintenance and sentry etc. 2. Accessories: Buttons, thread, zips, labels, and needles etc Fabric store: The PPC department sends demand of fabric to fabric store according to plane of customer order, which is required by buyer. When the fabric is reached at the main gate and is received by the fabric store, on the gate the weight of the fabric is checked. Inspection of the fabric is handled in mills in Fabric Inspection Department (FID). At gate inward gate pass is made. Fabric is shifted into store and stored customer wise in racks .If the fabric is rejected it comes first in store then sent to mills by making Outward Gate Pass (OGP). 2.Fabric store (Stock pledge) 3.Shipment store

Shipment store: As it is evident from the name, purchase orders, which are ready to be shipped, are store here. In Masood when production order is completed then it is packed in boxes and bar codes are pasted on them. These barcodes contain all necessary information regarding the contents of boxes. All the information regarding the Quality checks of shipment is done here. On the day of shipment the boxes are loaded on trucks and final entries are stored in computer. The process of the shipment store is

Receiving

Racking (customer wise)

Receiving to Quality

Audit for Quality (QA)

Packing list (merchandiser)

OK report after Audit Green slip after Audit

Direct- to- Store System MTM is the first company in Pakistan to develop and implement direct-to-store system has permitted a good and long term relationship with the customer. This means, that now it is the responsibility of MTM to not only produce the product, but also make sure its placement in the stores of the customer. This system facilitated by the 24/7 information transfer from the sale of a unit from the store and the relevant department can act accordingly. The sale of even a single unit from the customers store can be received in the head office of MTM and can be acted accordingly. This means the visibility of the future trend has become available to MTM. Future purchase order feasibility can be made with a great accuracy and purchase orders than can be revised after discussion with the client. This system is specifically designed for their major clients like Wal-Mart and Jesse penny which accounts for major sales.

Recommendations MTM mainly increase their costs because of the high transportation costs. It is because they have to deliver the final products to the door step of the client, they also have to store the

orders in their own warehouses which are located in Pakistan as well as US and Europe. So they have to pay the expenses for the facilities provided in the warehouses. What they can do is that they can make the orders for their clients and then ask those clients to pick the orders from MTMs warehouses located in Pakistan or they can just ship the order through sea and they can ask their clients to pick the orders from the port. It would decrease their costs immensely because MTM would not need to manage the warehouses and transportation costs within the US and Europe. Supply chain surplus of MTM decreases because of overstaffing of employees as the cost of production increase and profits decrease. Hence they should downsize. By purchasing agriculture land for the production of cotton MTM can become fully integrated textile composite. Reliance on the procurement of cotton from the open market will be reduced and premium paid to procure cotton for yarn can be saved in the long term. Locations of facilities are quite far from each other as spinning and cutting is completed in one unit and the rest of the processes are conducted in different units. In a given situation, MTM should use the optimal level of material that is to be transfer from one location to another.

Conclusion After examining MTM and by having a clear understanding of its supply chain. We found that this company is growing and getting efficient in all the stages of supply chain. We believe that MTM has a lot of potential in terms of capitalizing on its resources and gain competitive advantage over its industry and retain a leadership position.