ERP in Apparel Industry
By: P.Ganesan S.Hariharan E. Praddeep A.Prakash Presented by www.fibre2fashion.com
ERP in Apparel Industry By: P. Ganesan, S.Hariharan, E. Praddeep & A. Prakash Department of Textile Technology PSG College Technology, Coimbatore [email protected] [email protected]
ABSTRACT One of the oldest industries, which fulfill the basic needs of mankind, is “Textile Industries”. It is labour intensive, raw material intensive, capital intensive, product intensive, inventory intensive and with just one exception i.e. profit margins, which are non-intensive. Most developed countries have passed on this business to developing countries and now source their requirement from them. The new globalization policy has removed all economic barriers & also created fierce competition, lot of challenges between the industrialized nations. It is common knowledge that the exercise of the globalize programmed was drawn up with the objectives of the survival of the fittest without any partiality of any country. The fittest means to produce the best quality of product with cheaper rate. So, it has become very important for a textile industry to integrate with Information Technology to survive in this era of competition. The application of IT has effectively reduced time of manufacturing along with constant monitoring & rectifying the faults if any during the production change. One innovation has been the ENTERPRISE RESOURCE PLANNING (ERP) application, which is a tool that brings about effective co-ordination between the departments of an organization to direct the process by providing comparative information & analysis regarding trends and forecasts. It assists in effective management of the supply chain, just-in-time inventory and information as well as enterprise logistics management. So, nowadays ERP solutions are largely used for effective monitoring and control, accurate planning and scheduling of orders, better data predictions, quick response to query and on-line detailed information of orders. This paper mainly deals with basic fundamentals of ERP and role of ERP in textiles along with its benefits and advantages. INTRODUCTION In a progressively IT –driven global economic environment, it is indeed a very important and necessary to promote and facilitate adoption of IT in the textile industry and trade also to help this industry to remain in the national/international competitive market. Some of the Indian Textile Mills has started using an Information Technology for over the last 10 years in specific areas of service functions like payroll, purchase, store, accounting, establishment etc. Later on, the use of information technology has been extended to other fields in textile industry like development of data management system for production on-line data monitoring system provided on different control/monitoring systems on latest machines. For a most modern textile mills, one can think of application of information technology which can be used right from the purchase of cotton from the fields as per specifications, fibres from factories, hire the places equipped with the machinery’s as per the requirements, plan the production of different items as per schedule, maintain the quality of output product and lastly helps in selling the end product through internet. The importance of efficient production management is well known in controlling overall profitability of an industrial unit. A production manager needs to have control over output of the factory, quality of goods produced and cost of production. In this information-centric age, the better you are informed the better is your performance. Computer information systems for production planning and control are aimed at equipping management with accurate information for making sound decisions. The number of textile business houses, which make use of such systems, is very less. A use of such systems in unit shows that it helps them to be far ahead of their competitors in terms of capacity utilization, cost control and market share.
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4. PRE-SCENARIO OF E.R.P
What is ERP? An ‘Enterprise’ is a group of people with a common goal, which has some key functions and resources at its disposal to achieve that goal. ‘Resources’ included are man, money, material and all the other things that are required to run the enterprise. ‘Planning’ is done to ensure that nothing goes wrong. Planning is putting necessary functions in place and more importantly, putting them together. So, ERP is a method of effective planning of all the resources in an organization. Enterprise Resource Planning (ERP) covers the techniques and concepts employed for the integrated management of businesses as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of an enterprise. ERP packages are integrated (covering all business functions) software packages that support the ERP concepts. ERP software is designed to model and automate many of the basic processes of a company, from finance to the shop floor, with goal of integration information across the company and eliminating complex, expensive links between computer systems that were never meant to talk to each other. As said earlier, an enterprise is a group of people with a common goal, which has certain resources at its disposal to achieve goal and here enterprise acts as a single entity.
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This view of a company or organization is drastically different from the traditional approach. In the traditional approach, the organization is divided into different units based on the functions they perform as shown in following figure. So we have the manufacturing or production department, the production planning department, the purchasing department, the sales and distribution department, the finance department, the R & D department and so on. Each of these departments are compartmentalized and have their own goals and objectives, which from their point of view are in line with the organizations objectives. Each of these departments function in isolation and have their own systems of data collection and analysis. So the information that is created or generated by the various departments, in most cases, are available only to the top management (that too summary reports) and not to the other departments. The result is that instead of taking the organization towards the common goal, the various departments end up pulling it in different directions. This is because one does not know what the other does. Also, sometimes the departmental objectives can be conflicting due to this lack of information integration. But in the enterprise way, the entire organization is considered as a system and all the departments are its subsystems. The information about all the aspects of the organization is stored centrally and is available to all departments within a fraction or second. This transparency and information access ensures that the departments no longer work in isolation pursuing their own independent goals. Each subsystem knows what others are doing, why are they doing it and what should be done to move the company towards the common goal. The ERP system helps to accomplish this task by integrating the information systems, enabling smooth and seamless flow of information across departmental barriers automating business process and functions and thus, helping organization to work and move forward as a single entity.
ERP Modules: All ERP packages contain many modules. The number and features of the modules vary with the ERP packages. Here we will see some of the most common modules available in almost all packages. • • • • • •
Finance. Manufacturing and Production Planning. Sales and Distribution. Plant Maintenance. Quality Management. Materials Management, etc.
ENTERPRISE RESOURCE PLANNING FOR TEXTILES (ERP):
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For maintaining higher efficiency and productivity along with the quality of end product, it would be necessary to think of a solution which will help the industry right from the purchase of raw material to the sell its final product. Any such solution is known as ERP solution. At present, many ERP solutions are available in the market. Basically any ERP solution should provide effective monitoring and control, accurate planning and scheduling of orders, better data predictions, quick response to query and on-line detailed information of orders.
Thus as seen from above figure, it is very clear that any ERP solution should include the manufacturing, marketing as well as finance sectors of a Textile Industry. To design such a module based system, one requires to know certain parameters, which are necessary for giving the necessary outputs. FABRIC MODULE: This module should take care of various operations of the weaving shed i.e. from the yarn entering into the weaving department, the preparation of the yarn for weaving, till the actual manufacturing of the fabric. Also various specifications of the fabric manufactured, identification of the lot, etc. has to be monitored and Recorded. This module also like earlier ones should include production, commercial as well as quality details. • •
Production details may include productions at Winding, Sizing, Loom, and finishing stages. Technical specification and quality may include various specifications such as Fabric specification,
• Yarn count for warp and weft, Reed count, Ends and picks per inch, Process specification at winding, Pre-beaming specification, Size beam specification. • Process details and quality may include various parameter like Control of weight (spools & cops), Number of knots, Sizing takeup, fabric width, Ends and picks, Fabric faults. The steps in designing these kinds of module are given as below: The system structure may be defined through charts and values in over 100 tables. Various master files for Articles, Customers, Suppliers, Warehouse, Calendars, etc. Should be created and maintained. The step is to input incoming orders, check the feasibility of requested dates for delivery, suggest possible delivery dates. To manage the entire order cycle from acceptance and entry to packing list, shipping and invoicing. To manage the pricelists and invoicing directly from job lots. To allow orders to be accepted via the Internet, on-line order tracking booking of stocks and on-line catalogue publishing. Article coding system should be followed. Article types are defined which are indications of the build up of the end product. The code structure of each article type may be named and defined as per the software developer or the user and the parameters required. For example, a particular code name can be specific weave of fabric or type of yarn. Thus material into a material into a production and materials out of production can be distinguished. Also different sets of technical data can be established for each article type. Different units of measure can be applied to different article type. Woven cloth can have special weave technology data attached to it, such as the warp plan and filling plan details. Analysis of Production, Sales and stocks can be conveniently separated using article codes. The next important step is planning i.e. working from the given budget and production plan, calculating material and capacity requirements necessary for the completion of the specified process. Launching
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production orders and identifying divergence of orders being processed from planned production schedules. Automatically assigning tasks to the most suitable production facilities on-line with a finite capacity. Next is checking of the product manufactured i.e. to allow planning, launching and tracking of production activities across the whole cycle. To handle fault reporting and mapping, optimising cutting of pieces at each inspection table, recording and quality and rectification details for each piece. Inventory & purchasing is a very important task, which should be taken care off.i.e. Managing and evaluating raw materials and finished products in terms of inventory levels, Requisition and allocations. Defining purchasing and stock policies by specifying minimum inventory levels reorder quantities and replenishment times. Handling purchasing upto the issuing of the order and checking of purchase invoices. Mapping of physical warehouse locations and indicates the most suitable for incoming goods. The major benefits of any such systems may be summarized as below: • • • • • •
Aid in optimal use of manufacturing resources Monitoring of contribution margins. Quick response Improved customer service Higher quality and less waste. Reduction of work in progress and inventory.
MARKETING WING: This module deals with the Store section and requires various parameters such as the stock, MRP, etc. FINANCE WING: As the name suggests, it deals with H.R. Cell and includes various parameters such as Database on HR, Performance Rating, HR Allocation, Selection & Recruitment, Training to all and also Absenteeism. QUALITY ASSURANCE WING: In this module, SQC, IE Cell is included. The various parameters are Databank, Control Charts, Sampling Plan, Cost, Waste Realization, and Maintenance Schedule. The following figure shows one of such integrated systems in textiles:
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BENEFITS OF ERP IN APPAREL INDUSTRY Supplier benefit Information in time about material to be provided.
Management benefit Cost savings, improvement in savings. Good customer relationships.
Satisfaction in working and achieving goals with good team work.
Good services. Good quality at cheaper price.
Reduction in cycle time: As of now, allocation of material to specific customer order is not possible with the current system. Such allocations are useful for making deliveries as planned, as there is no possibility of the material, which is required by one order, getting consumed for different order. In such cases earlier order would get delayed if material were not available in the stock while production time is spent on other order, which could have waited without causing any problem. Presented by www.fibre2fashion.com
Cost savings: Company losses 2% of its sales value in discounts, which are the result of surplus production, implementing quality management system can help to bring down excess production, as management will be assured of the quality right from the raw material itself. Supplier developer module would be useful in proper selection of suppliers, which can focus on quality, cost and delivery aspects of supplier. Reduction in machinery downtime: 5 % machinery downtime is attributed to non-availability of raw material in the stores. This is due to absence of proper planning system and due to communication delays at every place because of information recompiling. Prompt communication coupled with effective supplier selection module and planning system would be useful in bringing down the machinery downtime. Improvement in sales: 75 % customers place repeat orders. Three factors-price, order and delivery affect orders. Integrated system will definitely be useful on this account. Price is one of the causes of losing customers; there is ample scope for cost reduction and therefore company can offer lower prices and incentives to attract customers through integrated information management solution. Customer satisfaction: Current system is ineffective in tracking problems related to customers. The response regarding effectiveness falls in unsatisfactory category. Capacity planning for received order also falls in average category. Efficient capacity management system can bring down the delivery time for execution of the order and improve customer satisfaction. This management scheme can be very useful in maintaining better customer relations with prompt response and by knowing their past history. Well –formulated procedures for customer dialog will be useful in having better customer relations. It takes approximately 3 days to answer any of customer’s queries. This period can be brought down to a day, which will have very good impact on customer’s perception of the oganisation. CONCLUSION: Thus, due to the globalisation information Technology has become a very important asset to the textile industry. With the development of the data management system for production and on-line data monitoring systems on the latest machines, the textile industry will flourish with all the glory to it. REFERENCES:• • • • • •
Enterprise Resource Planning by ALEXIS LEON published by TATA McGraw HILL, 1999 Edition E.R.P by PARAGDIWAN and SUNILSHARMA published by PENTAGON PRESS, 2000 Edition E.R.P – A Managerial Perspective by SADAGOPAN published by TATA McGraw HILL, 1999 Edition www.erpinform.com www.google.com www.NedGraphicsandPorini.com
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