Hi Guys,

 

Assume a company with an INR 5 cr. turnover (SSI) in the Kids Garment segment.

The company is facing trouble with its bottom-line, mainly due to high cost of procurement. 

 

Could you suggest some viable lean projects for such a company?

 

Regards.

You can make a detail study on componets that make the cost very high.

Hi Abhik,

 

Are you saying high cost of procurement, can you please bifurcate it further on which cost 

1. RM cost 
2. Logistics or supply chain
3. Inventory cost
4. Purchase processing cost, etc.

That would be required to further provide insights.

 

cheers!!!

Mahi

 

Hi Mahi,

 

To be more specific, the unit at the moment is getting 50% of its work sub-contracted. Now the cost of this operation, which in effect is RM cost as it comes in as input from the sub-contracted firm, is proving to be expensive.

 

Is the solution simply to find another sub-contractor or could be otherwise as well?

 

Would be great to know your thoughts.

 

Regards,

Abhik

Hi Abhik,

 

Just look at the cost sheet provided by the sub contractor , check the most hitting figure (priortise those figures based on pareto), focus on cost, if others cost is high definetly need to change the sub contracter , if the processing cost is high .

 

Check the steps followed for processing & most suitably do a VSM (lean). Try to identify the NVA in the processing steps, I,m 100% sure are doing not required steps

If u can share the details of the process , surely i will gonna identify the NVA as in garment most of the work is automated .

 

Hope I clarified

 

Thanks,

Mahi

Dear Abhik,

 

Change in subcontractor shall help only if the subcontractor has a great process (and not just low cost). When I say great process, it relates to timeliness and defect free performance. One option is to go deeper into the subcontractor's process, map it (as suggested by Mahi) and help the subcontractor improve.

 

Regards,

VK

Dear VK,

 

Thanks for your inputs. The situation at present is that the manufacturing unit is very unstructured. There aren't any processes in place, nor is there any data being recorded at each level of the manufacturing cycle.

 

So my Consulting engagement with the client is likely to change from Improving Operational Productivity to Designing Processes and Process Flows.

 

It was surprising that even with a INR 10 cr. turnover (I know its not much, but sizeable for a company just 3 years old); the firm has no set processes in place.

 

Will keep you posted on how the Consulting engagement proceeds.

 

Regards,

 

Abhik