KOLKATA
DEPARTMENT OF FASHION MANAGEMENT STUDIES
INTERNSHIP PROJECT
SAMPLING
SHAHI EXPORTS PVT. LTD.
SHIRIN MORGAN
MFM-SEMESTER III 2012-2014
MASTER OF FASHION MANAGEMENT
DEPARTMENT OF FASHION MANAGEMENT STUDIES NATIONAL INSTITUTE OF FASHION TECHNOLOGY KOLKATA
2
DECLARATION
I hereby declare that this report is an original piece of research work carried out b y me under the guidance and supervision of Mr. Satnam Singh, ( Senior Merchandiser),Shahi Merchandiser),Shahi Exports Pvt. Ltd. The information has been collected from genuine and authentic sources and there is no plagiarism or dishonest means involved. The work has been submitted in partial fulfillment fulfillment of Master of Fashion Management to NIFT Kolkata.
3
CERTIFICATE FROM GUIDE REGARDING COMPLETION OF WORK
This is to certify that the Project entitled “MERCHANDISING PROCESS IN SAMPLING DEPARTMENT” submitted towards the partial fulfillment of the Degree of Master of Fashion
Management by SHIRIN MORGAN is her original work under my guidance and the results are based on the research done by her.
Ms. Bharti Moitra Chair Person FMS Department NIFT
Date: Place:
4
ACKNOWLEDGEMENT
To begin with, I am grateful of Mr. Satnam S atnam Singh, Senior Merchandiser, Shahi Exports Ex ports Pvt. Ltd., Faridabad, who permitted us to do a project on this topic. His constant guidance and positive criticism has helped to a great extent. After facing many of his rejections and corrections, I have been able to complete this project. I take this opportunity to thank everyone ever yone who helped me in successfully completing this Internship project regarding Merchandise Planning at Shahi Ex ports.
I would like to thank my m y Institute, NIFT KOLKATA, for providing me the opportunity to carry out the study as a part of my Post Graduation Project.
I extend my sincere gratitude to Mr Satnam Singh who had been my project guide and helped me out with his regular guidance and the vision for carrying out this project. I would like to thank Mr. Mr. Harish Ahuja (President) of SHAHI EXPORTS, for providing me the opportunity to undertake this project in their organization. organiz ation.
I would also like to express my gratitude to Ms. Bharti Moitra who supported and helped me me throughout the project. I would also like to thank Ms Sunita Pal (Sample coordinator), MEXX & LUCKY BRAND) who helped me in every ev ery step by providing necessary data for carrying c arrying out the project successfully.
I would also like to thank all the officials of SHAHI EXPORTS and all my colleagues who have helped me during the course cou rse of this project.
5
EXECUTIVE SUMMARY
The aim of this project is to study stud y the role of a merchandiser in the sampling department. dep artment. The journey throughout has been exciting and has made me learn a lot about SHAHI and the other elements OF EXPORT HOUSE. The research started with the study of SHAHI and the sampling department. Chapter 1 is Introduction which depicts the company’s profile. Its vision and mission,majors buyers and suppliers. Chapter 2 is Chapter 3 is Chapter 4 is about the Chapter 5 is Findings Chapter 6 concludes
6
TABLE OF CONTENTS i. Acknowledgement ii. Declaration iii. Certificate Executive summary
Chapter 1:INTRODUCTION Chapter 2: ORGANIZATIONAL STRUCTURE Chapter 3:DEPARTMENTS Chapter 4:SWOT ANALYSIS Chapter 5:FUNCTIONAL ANALYSIS Chapter 6:DEPARTMENT STUDIES Chapter 7:OBSERVATIONS Chapter 8:FINACIAL STATEMENT ANALYSIS Chapter 9:RECCOMENDATIONS Chapter10:CONCLUSIONS Chapter 11: BIBLIOGRAPHY ANNEXURES
7
RESEARCH OBJECTIVES 2.1.1 Primary Objective
To understand the working of sampling department dep artment in an export house
2.1.2 Secondary Objectives
•
To study the work flow and organizational hierarchy of SHAHI
•
To study the financial statement of the firm in terms of ratio anal ysis
8
CHAPTER : 1 INTRODUCTION SHAHI Exports Pvt. Ltd. is engaged in the manufacture and export of readymade garments in the International market. It is one of the largest export houses in India. The company started its operations in the form of a small fabrication unit with the help of 25 machines.
The company has grown from leaps to bounds from a simple fabrication unit to present turnover of Rs. 2200 crore, around 55000 employees and spread over 27 locations. It has manufacturing units in six different states of India viz. Delhi, Haryana, Uttar Pradesh, Tamil Nadu, Karnataka and Andhra Pradesh. The group is into manufacturing of a wide range of Men’s and Ladies wear
and also home products.
SHAHI group has all the modern units equipped with state-of-the-art technology giving the best to its buyers.
Its manufacturing facilities includes Assembly line machines, Prima Vision system print/fabric development, Meyer fusing press, Barudan and Tajima, Multi head computerized embroidery machine, in house washing plant, automatic cutting machines (F.K. Systems).
SHAHI has a well-equipped sampling division where latest patterns/designs/styles of high standards are developed with the assistance of experienced designers.
It has a training center for tailors at Faridabad and Bangalore each to train and develop them into vital human resource for efficient operations.
As regards to quality, SHAHI has been ranked one of the best in Asia by J.C.Penny, the worldrenowned departmental stores.
9
1.1 COMPANY PROFILE
Limited Name: Shahi Exports Private Limited
Established: 1974
Owner: Mrs. Sarla Ahuja
Managing Director: Mr. Harish Ahuja
Address: Industrial Plot-1, Sector 28 Faridabad, Haryana
Work Force: More than 30,000
Capacity: Over 2 million high quality garments per month
Retail House: At Last & Co. , New York
Fabric Processing: Sarla Fabrics, Ghaziabad
Annual Turnover: INR 2200 crore (Group Turnover)
COMPANY MISSION:
Exploring new dimensions of excellence. A path, where there was none. A new horizon beyond yesterday. Excellence beyond today, touching tomorrow. It’s a world of relentless quest for quality. Its mindset, the action, and partners of Shahi are ever reaching further, never resting on achievements. Yes! Milestone never takes one there; it is the road that we create to reach excellence. Ever evolving excellence. Shahi believes that its main strength is its people. The larger investments made in the manufacturing units will give the desired results only if backed by a committed human effort. The result will directly give us u s a sense of pride for being bein g a part of Shahi family. CORPORATE VISION
Be the global best in bringing delight to human life by weaving dreams of fashion & feelings of comfort. CORPORATE VALUES
Guiding principles illuminate the path that leads to their destination. SHAHI emphasizes on some guiding principles, which are indicative of the values it believes in and would like to 10
continue in the organization. These are the building blocks of the organizational culture. The company believes in:
High level of honesty and a sense of responsibility.
Two-way communication channel for all purposes of communication.
In sharing the fruit of growth, prosperity with its partners i.e. the employees.
In giving each individual room to contribute and grow.
The company firmly believes that team spirit is the hallmark of success.
KEY STRENGTHS
Shahi Exports Private Limited (Shahi) is one of the largest vertically integrated garment manufacturer and exporter in India.
India’s second largest apparel exporter by value of exports.
Shahi is one of the most successful professionally managed companies comp anies in India.
India’s largest exporter by installed capacity.
Well qualified trained and committed professionals with a shared vision.
Highly qualified Design team, Product development skills and a Design Studio.
High degree of adoption of advanced manufacturing technology MIS and IT systems.
All factories and offices are electronically linked to facilitate all time access to information
Focus on quality and a proven track record : Short shipment: 0.50% On time delivery: 98% Quality claims: Nil.
11
PRODUCT PROFILE:
The following are based and operated in NCR 1. LSD – Ladies Ladies Specialty Division 2. LBAD – Ladies Ladies branded Apparel Division 3. LFD – Ladies Fashion Division (basically caters to Wal-Mart) 4. HFD – Home Home Furnishing Division
MAJOR BUYERS
Tommy Hilfigher Armani Hugo Boss Liz Claiborn Abercrombie & Fitch (A & F) J.C. Penny Kohls
Gap Target Wal-mart Calvin Klein Espirit Hennes & Mauritz (H & M) Nautica
SUPPLIERS
The main markets for fabric supply for Shahi are Delhi, Panipat, Amritsar, Salem, Mumbai. Some of the fabric suppliers of Shahi ( for both sampling & Production) are:
Muthu Corp, Erode
Picanova fabrics pvt ltd, Mumbai
New Diamond Woollen mills, Amritsar
Mafatlal Industries Ltd, Nadia
Ramkumar Mills Pvt Ltd, Bangalore
Netflex India Pvt Ltd, Mumbai
Priyanka Fabrics, Salem
Bhuvana Fabrics, Erode
12
Vincord Textiles, Delhi
Vijai Fabric Connection, Erode
L.K Woollen & Silk Mills, Amritsar
A.P Khanna & Sons Pvt Ltd, New Delhi
Himgiri Textiles, Faridabad
Rajindra Handloom Pvt Ltd, Panipat
Shiv Shakti Furnishing Pvt Ltd
KCS Fabrics Pvt Ltd (handloom, jacquard upholstery upho lstery & curtains)
Maurya’s, Delhi
Parkash textile Mills, New Delhi
Charu Enterprises, New Delhi
R.G Jindal & sons pvt Ltd.
The thread suppliers are:
Coats
Vardhaman
Pashupati
Oswal
Shahi has an in-house testing lab for measuring GSM, color fastness, rubbing fastness, Dimensional Stability, stretchability and testing others properties of fabrics
For labdips, strikeoffs and other approvals, fabrics are sent to testing laboratories like:
MTL
ITS-International Testing service
13
1.2 COMPANY HEIRARCHY
14
CHAPTER: 2 ORGANIZATIONAL STRUCTURES 2.1 Product design & development HOD Senior merchandising manager Senior Designer Assistant Designer Junior designer Total no. of designers: 2.2 Merchandising Department Merchandising manager Divisional merchandising manager Senior merchandiser Junior merchandiser Total no. of merchandisers including each and every team: 2.3 Cutting Manager Spreader Cutting master Quality checker Part checker Supervisor Ticketing Bundling Fusing Part cutting Total no. of persons in cutting: 2.4 Production Department Production Manager Floor Manager Line supervisor Operators
2.5 Accessory Department Accessory In charge Store Assistant Quality checker Helper 15
2.6 Accounts Department Senior Manager Assistant Manager Credit control manager 2.7Quality Assurance Department : 2.8 Sampling: 2.9 Administration: 2.10 CAD: 2.11 Embroidery: 2.12 Electrical:
2.13 Fabric:
16
CHAPTER:3 DEPARTMENTS
PRODUCT & DESIGN DEVELOPMENT MERCHANDISING DEPARTMENT SAMPLING DEPARTMENT ORDER ANALYSIS DEP DE PARTMENT COMPUTER AIDED DESIGN DEPARTMENT PRODUCTION PLANNING AND CONTROL DEPARTMENT FABRIC SOURCING DEPARTMENT
PURCHASE & LOGISTICS DEPARTMENT TESTING LABORATORY LABORATORY DEPARTMENT DEPARTMENT
FABRIC STORE AND INSPECTION DEPARTMENT
CUTTING DEPARTMENT
COMPUTERIZED EMBROIDERY DEPARTMENT INDUSTRIAL ENGINEERING DEPARTMENT SEWING DEPARTMENT WASHING DEPARTMENT
FINISHING DEPARTMENT
PACKAGING AND DISPATCH DISPATCH DEPARTMENT DEPARTMENT
DOCUMENTATION
HUMAN RESOURCE
17
3.1 MERCHANDISING DEPARTMENT DEPARTMENT
A merchandiser is an interface between the buyer and the supplier who has to ensure the quality of production and timely delivery. Merchandising is a process through which products are planned, developed, executed and presented to the buyers. It includes directing and overseeing the development of product line from start to finish. ROLE OF THE DEPARTMENT
To look for the appropriate market
To get the samples made according to the buyer’s specification
To estimate and quote the cost of the garment to the buyer and negotiate with them
Getting orders
Constant interaction with the buyer for the approval
To get the fabric and trims in-house for bulk production
Co-ordinating with the PPC and production
OBJECTIVE OF MERCHANDISER
To create market
Understanding buyers’ requirements
Sourcing of materials, fabrics
Select the range
Creating the product
Taking buyers approvals
Negotiation with buyer
Procuring the orders
Materializing the order
Execution the order
Coordination between production and production planning department
18
Dispatching the shipment
After shipment dispatching merchandiser is also responsible for buyer claims, profit and subsequent orders. If buyer has any problem p roblem in quality of the product then it i t is the responsibility of the merchandiser to resolve the problem with the buyer.
FABRIC DEPTT. Q.A. SHIPPING DEPTT.
DEPTT.
ACCESSORIES DEPTT.
FINISHING DEPTT.
MERCHASNDISER
CUTTING
MERCHANDISING
DEPTT
DEPTT.
INDUSTRIAL ENGG. DEPTT
SPREADING DEPTT
ORDER ANALYSIS DEPTT.
PRODCTION DEPTT.
19
HIERARCHY
PROFIT CENTER HEAD, MARKETING
DIVISIONAL MARKETING MANAGER
MARKETING MANAGER
SENIOR MERCHANT
MERCHANT
JUNIOR MERCHANT
CO-ORDINATOR
20
PROCESS OF MERCHANDISING:
The first stage of merchandising is when buyer sends either spec, sketch or any garment pieces and asks for sample with costing or only costing using different fabrics. The specs sent by the buyer are also called Tech Packs.
The merchandiser gets the approval of all things like fabric, trims, label, costing etc. and either buyer gives the approval or gives the vendors’ name.
-The allocation chart and FTP directory is received by the merchant from the buyer online. -The fabric CAD is also received from the buyer which has all the details of the pantone shade and the repeat size. -The prints are developed from their own mill, SFL (Sarla Fabric Limited) or are subcontracted. -A CD is developed which has the color picture of the fabric. This is sent to the fabric department for development. -Sample piece is developed.
Next, costing is done on the basis of the spec, sketch and an d garment which are sent by the buyer for making the sample. Merchandiser does d oes the average costing/consumption of the garment. The quotation is sent to the buyer/buying house and the approval is awaited. One thing is to be noted that while giving the consumption, the cut-able width of the fabric to be received (either mill made-developed in India or imported fabric) has to be considered while costing. Also the marker utilization depends on the style, which may affect the consumption greatly. The fabric characteristic also matters vis-à-vis nap etc.
The merchandiser monitors the design from sampling to production and then final dispatch. They are a link between the buyer and the company. All correspondence that the buyer wants to do regarding his style will be done through the merchandiser. merchandiser. Merchandiser monitors the total sampling from development to the time the production 21
sample is made and goods go into actual production.
They also see that the fabric is developed on time and send it for approval to the buyer and subsequently if all samples are made on time, send them to the buyer for approval too. They are also in constant touch with wi th production to know the status of their styles.
Merchandising activities include:
1. To get order: Buyer directly communicates with the merchandiser in order to place the order. Fixed buyers are allotted to merchandisers and the communication is between the buyer an that particular merchant. 2. Costing: Costing of the garment in bulk is calculated on the basis of quality of material and their requirement in the garment. It is one of the most important activities of the merchandiser. To arrive at a perfect price to be quoted to the buyer, following points are taken into consideration: Costing is done considering these aspects of the cost. co st.
COST
FIXED COST
VARIABLE COST
22
FIXED COST 1. Factory Cost - It is the fixed cost incurred for running the factory. It is different for
different
floor.
2. Standard Sewing Cost
Direct Labour:
Operators Salary
Indirect Material:
Lubrication Oil, Needles , Cleaning Material
Indirect Labour:
Staff & Maintenance Salary
Indirect Expenses:
Power, Depreciation Of The Machinery
The standard sewing cost per operator per hour defined by Shahi for its Faridabad unit is Rs 62.83 VARIABLE COST
1. YY (Yields/yards) – It It is average consumption of the fabric. It is decided by preparing a mini-marker which includes wastage of fabric due to laying, cutting, fabric defect, end cutting loss, marker loss and the buffer that is maintained to avoid shortage in future.
2. Trims Cost – They are procured from local market as well as imported as per buyer’s requirements.
Calculation of cost of fabric per garment
Calculation of cost of trims and threads
Cut-make cost
Poly bag cost
Cost of carton box
Calculation of consumption of fabric (yields per yard) and threads to
produce one garment
23
3. Sampling: Merchandiser is involved in coordinating with the sampling sampling department. Based on the mutual agreement between the merchant and the buyer, sampling department is involved in making samples. In every step of samples, buyer sends back comments along with the tech pack. 4. Order confirmation: After the approval of all the samples, the order is confirmed by the buyer. Merchandiser receives the PO sheet. Merchandising department communicates with planning and production departments and an d decides for the possible PCD (production cut date) for the required quantity. Then he fixes up the PCD and delivery date with the buyer.
5. Preparing the time and action plan: This is prepared by the merchant stating that all the different activities associated with the order should be complete by the stipulated dates. It is like making sub goals to accomplish the ultimate goal which is shipping of the order on the pre- decided date.
6. Preparing the bill of material: This enlists all the different materials required for making the garment. 7. Execution: Merchandising department communicates with the buyer QA during the production. He gets the approval of the quality or any changes in the garment. 8. Shipment of goods: According to delivery date the goods are shipped on time. Documentation department is informed about the delivery date, the quantity etc. In case of any delay, goods are sent through air on the company’s cost.
For each order, the merchant has to prepare a file containing all the details and relevant documents which is passed on to the subsequent stages in the production process for reference purposes.
24
DOCUMENTATION IN MERCHANDISING File prepared by merchant has following details:
Style Specification: contains a brief description of the style.
Style # : as mentioned by the buyer
Movex item # : Item number of the style by Movex
Buyer: Name of the buyer
PCD: Production cut date for the style
Merchant: Name of the merchant handling the style
The file contains the following:
Purchase order for the style
Garment techpack
Relevant communication with the buyer regarding proto, fit and pre production samples. All the comments from the buyer for various samples are included. includ ed.
Thread consumption report
Fabric Test Report
Fabric and trim cards: Contains swatches of the fabric and trims to be used
Mini marker with costing average
FOLDER SUMMARY
It consists of the general details like brand name, buyer’s name, size range and the drawing of
the garment. 1. Color / Trim Page: It consists of the details like description, size of the trims like button size, material of which it is made of, no. of holes that it should have.
2. Fabric Page: It consists of the details of the fabric like the count of the yarn, construction (EPI, PPI) and color specifications. It also states the value addition finishes and embellishments.
25
3. Packing And Labeling Details : It consists of the details like type of packing, hanger type, polybag type, clips type of labeling.
4. Label Placement : It describes with figures where the label, hang tag, spare button is to be attached. 5. Correct Balance : Basic and important tips for correct fit 6. How to Measure: It shows how to measure the important dimensions of the garment. g arment. 7. Technical Sketch : It is a 2-D representation of the garment showing all the stitch lines, panes, trims etc. symbolically. symbolically. 8. Development Photos : It consists of the photos of the garment. 9. Specification Sheet : It consists of all the dimensions with tolerances and increments for bigger sizes. 10. Bill Passing Reports : This is the report used in fabric receiving. It states details like type, quantity, receipt no, item details, amount. It also has goods receipt note attached. It contains fabric code, width, color, quantity, quantity, rate, value etc. 11. Feedback : The feedback comes in the form of comments and photographs of the garment on the dummy with its errors highlighted like puckering and pinching. 12. Costing Sheet: Contains details like cost of fabric, trims, washing, embroidery, embroidery, sampling, testing, freight, duty, insurance etc. 13. Style Track Sheet : It is used used to track the status status of the order. order. It consists of details like style no., merchant’s name, floor on which it is allocated, name of the floor manager. manager.
14. Initial Marker Planning Sheet : It consists of fabric width, total pieces, pieces placed, efficiency and length.
26
15. Approval Form : Approvals can be for fabric, trims, slight errors which are acceptable to the buyer
Workflow of the Merchandising Department Fig(1.3)
Buyer’s enquiry / Tech-pack / Tech-pack
Costing
Style finalization
Purchase Order received
Fit approval process
1st fit
Fabric/Material Fabric/Material approval
2nd fit
Fabric/Material Fabric/Material order
Pre production sample
Fabric/Material Fabric/Material follow-up
Size set
Fabric/Material Fabric/Material in-house
Production
Follow-up
Regular tracking and updating buyer
Order shipping 27
3.2 SAMPLING DEPARTMENT
Sampling department is the most vital department of the organization. It is the department that develops the samples thus enabling the Product Development. This department prepares samples on the basis of the requirements of the buyer. The sampling department here caters to the need of all the other units of Shahi as it was centralized.
Sampling was self sufficient as it had its own stitching. washing, trimming, spotting, and ironing etc dedicated for the construction of samples only. The fabric and trims are sourced from the in house warehouse depending upon the availability. The fabric which is sourced for the sampling purpose is called yardage and is 25-30mts in length.
SAMPLING PROCESS:
The process of sampling goes through a series of sampling stages each of them are explained below: 1. PROTO SAMPLE: It is the reflection of the first techpack received from the buyer. The sample is sent to the buyer for the design approval. Proto sample is made in the base size. Styling is important. The comments and second tech pack is sent back referring changes in the sample. 2. FIT SAMPLE: The comments are received regarding the shape, size and fullness. The sample is checked for fit on body forms. It is made in exact fabric, though print maybe ma ybe different, since the drape and fit are to be checked. 3. SECOND FIT SAMPLE : It is similar to the first fit sample made with a few changes according to comments received from the buyer. Again a third or fourth fit sample may be required to be made. After approval of fit sample, order is confirmed along with all the specifications.
28
4. PRE-PRODUCTION/SEALER SAMPLE : This sample is known as the bible of production. It is done for the base size of any one color and actual fabric and actual trims are used. 5. SIZE-SET SAMPLE : The sample is made in actual fabric and trims in all sizes and is sent to the buyer for approval. 6. GPT SAMPLE: These samples are made for garment testing for seam-slippage, tearing strength, button pulling etc. it is the garment pack pa ck sample. 7. TOP (TOP OF PRODUCTION) SAMPLE : It is the best sample from first of bulk production. 8. SALESMAN SAMPLE : It is made for the buyer to find out the opinion of the store owners whether the style would sell in the market or not, and the demand of that product.
29
WORKFLOW OF THE SAMPLING DEPARTMENT Fig(1)
Merchandiser orders for fabric Requisition
Patterns are made as per the PO
Raw material is issued on PO
Cutting
Embroidery (if any)
Sewing
Bar-tacking, B/H
Washing
B/A, Riveting
Alteration (if any)
Thread Trimming
30
Measurement Checking
Ironing
Initial Checking
Spotting
Final Checking (according to PO)
Packing
MACHINERY DETAILS
The sampling department has 9 lines with different machines.
31
Fabric in-house in store
Start
Uploaded in system by floor in charge
3.3 WORFLOW OF Goods Received Note provided by
THE FABRIC
stor store e in in cha charr e
STORE AND Physical and technical counter
INSPECTION
check check b
oods oods receiv received ed note note
DEPARTMENT Test by lab
Rejected
Report to DMM/Fabric
Accepted Yes
If acceptable
Is fabric
No
imported/
Report to fabric store
mill made? Yes
No
100% lotting
100% lotting 10% random
100% audit
audit of each lot
Report consolidation Report to fabric store
Report to DMM
Uploaded in system Report
No Return fabric to party
Yes Uploaded in system Ready to cut
32 End
3.4 WORKFLOW OF THE CUTTING DEPARTMENT: File, sample received from OAD
Fabric receiving from stores
Recording of fabric as per lot/sh lot/shrin rinka ka e/width e/width
Sample cutting
Cutting approval
Cut order issue
Receiving of marker
Layering
Cutting (CAM/manual)
Checking
Numbering Embroidery (if required) Fusing (if required) Re-cutting (if required)
Bundling
Quality audit Pass Dispatch to stitching unit
33
3.5WORKFLOW OF THE FINISHING DEPARTMENT
Receive goods from sewing
Kaj / Button marking (manually)
Bartacking Measurement check (10%)
Button hole stitching Final checking
Washing Re-pressing
Button attaching Tagging Thread Cutting Shade matching Thread suctioning Folding and putting in poly bags Ironing Quality Audit Initial Checking Dispatching to packing section Alteration (if any)
34
Erudition:
Finishing is one of the most important departments where the final appearance of the garment is achieved.
Loose threads are deterrent to business
It is better to remove as many unwanted threads at a t the sewing stage as possible
Proper carton packing needs to be done for avoiding problems in shipping
35
CHAPTER:4 SWOT ANALYSIS
Strength
Weakness
Vertical Integration
Centralized cutting
Specialized units
Technological Advancement
Quality adherence
Centralized Merchandising
Introduction of ERP
Inefficient use of ERP
Efficient planning Department
Communication gaps between team members
Opportunity
Incentives and support from government for export oriented units. International presence
Lack of team work
Threat
International Competition
Low labor cost comparing to buying countries
1. STRENGTH:
operation way back in VERTICAL INTEGRATION : Shahi Export House Company started its operation 1973. Earlier established in Delhi ( Okhla), now in Faridabad, Shahi stands vertically integrated as one of the largest manufacturer/exporters in India offering ready-to-wear garments for ladies, men and children. It consists of units including the areas of Noida, Ranjitnagar, Gaziabad and in Bangalore. Though all the units are in different areas of Delhi & surrounding areas, there is a smooth flow of work between all the units. In total there are 18 integrated state-of-the art garment production centers of Shahi. It has its own integrated unit of fabric mills, processing units, printing & dyeing, embroidery, wash & finishes. 36
In the case of fabric capability Shahi has: ha s:
Integrated fabric base for both wovens and knits.
Both facilities equipped with German and Swiss state of the art processing Machines which ensures a high level quality output
Sourcing office in China providing access to diverse dive rse fabric bases in the Far East
Sourcing relationship with all leading mills in India like Arvind, Morarjee, Ashima, Vardhman and several independents in auto-loom sector.
Sarla Fabrics (Earlier called as Palmprint Textiles), the fabric process house is one of India’s
foremost wet processing plant. All kinds of woven fabrics like poplin, twill, canvas, gauge, corduroy, chiffon, moss crepe, Rayon, Georgettes, Nets, Velvets, Cambric, satin, Bosky, lycra etc are processed to international standards.
Prints like reactive, vat colour discharge on reactive grounds & pigments apart from some special printing techniques like burnt out effects on polyester-cotton blends are achieved here. In all, the unit produces about 90,000 mtrs of processed fabric per day. This puts Shahi at the top compared to the other export house. It cuts down the lead-time & prices.
Consistency: when a company is vertically integrated there is a lot of consistency in the fabric. As from the yarn stage to the weaving stage medium remains one. Therefore there is no involvement from outside. It eliminates the mediators, excluding the provisions of wastages, transportation costs etc.
Lead times: when every procedure is done under one roof, it abolishes the time required to transport the material from one place to another.
37
Reduced transportation cost: transporting a product from one place to another consumes time & money. For any value added service like washes, sequins a company send the fabric or garment to other locations but this is not a case with Shahi every thing is done in house thus reducing transportation cost.
Specialized units : Shahi has divided the Faridabad & Bangalore as woven & knits unit
respectively. By making the units specialized it has help the company in achieving better & faster production. As the same work is repeated again, it helps staff to understand faster & better which has lead to efficient utilization of resources & quality shipments. QUALITY ADHERENCE : Shahi relates itself with quality. Quality department places checks
at all the required areas in all the production departments like, fabric department, cutting department, sewing department, finishing & packaging department. Other than this Q.A’s are
also allotted for each specific brand within the organization. The Q.A department also takes active part in the sampling as it is the base on which order comes. Focus on quality and a proven track record ↔
Short shipment : 0.50%
↔
On time delivery : 98%
↔
Quality claims: Nil.
INTRODUCTION OF ERP – ERP – M3 M3
The whole computerization system helps keep all the departments in link with each other. The software used is used for almost every function & process
Sampling
Costing
Order capturing (job order details, fabric, trims requirements)
Production (Cutting, stitching, finishing, packing, consignment delivery)
Shipment (boxes, box no., place)
Buyer’s PO entry (Invoicing & Billing) 38
Accounts/Finance (interlinking of bills, vouchers, payments, salary management, various allowances)
Time Management (leave records, calculation of bonus, bo nus, reimbursement amount etc)
The top management people can keep track of the status of production just by a single click. All departments can keep in touch with each other and can know the status of orders. Without this whole computerization system it would had been difficult for various departments to interlink with each other. EFFECIENT PLANNING DEPARTMENT - the planning department of the company has a
very good team of members which very carefully studies each garment. After the complete analytical study of each garment the team makes different combinations of folders & attachments in such a manner that it helps in faster & efficient production that too with minimal wastage of time. 2. WEAKNESS
CENTRALIZED CUTTING : there is a centralized cutting in the head unit. Cutting for Delhi
NCR production units is done at the head unit. At times priority is given more to some orders than that to the others. So, the cutting of the other orders is put to halt. At times when the production units u nits are short of cut pieces they the y have to wait for the cutting department d epartment to work on their order, in turn wasting the time and delay d elay in the production. TECHNOLOGY:
machines that are being used in the organization in the sewing department
even in the cutting department automatic spreader spreader and cutting machines are very old and need updation. Investment in the machinery is less.
TIME CONSUMPTION IN THE FINISHING DEPARTMENT (SAMPLING) :
The sampling in Shahi has to go within 3 days of receiving the tech pack. The pattern making, cutting & stitching is done within 2 days but the finishing department takes more than 1 day to finish a garment. This at times becomes a messy situation. As the sampling department is too big the finishing department & the workers are less compared thus a merchant has to always be 39
present when his/her garment is in finishing department. This affects the efficiency of the company. CENTRALISED MERCAHNDISING:
The production units are lacking of merchants to follow an order, all the work is handled and taken care by the merchants in the Faridabad unit. At times it becomes too messy to track one order as the merchant is sitting in Faridabad and giving instructions at Bangalore. This creates confusion as the merchant in Faridabad is not aware of what is going in Bangalore. This eventually increases the lead time as everything has to be sent to Faridabad merchants for approval and then sent back. As the lot approval has to be sent to Faridabad after the approval it is again sent to the production unit, this activity is very time consuming. Even the P.O. is made by the merchant in Faridabad so if there is some shortage of fabric it has to be informed in Faridabad after which again a P.O is raised after which only the fabric is generated. gen erated. INEFFICIENT USE OF ERP:
The merchants & DMMs are not using the ERP system MOVEX efficiently. The system is capable of doing lots of things which can reduce the lead time and increase efficiency of an order, but this is not done. The system is used just to generate the P.O which is a part of the ERP. The merchandisers have not taken any classes for the same; they are working on hit & trial method or learnt something from their seniors. 3.
THREATS
1) International competition China, which is the largest exporter, has substantially increased its market share. Countries like Bangladesh and turkey are very cost effective. China excels in the industry because of cheap labor, efficient management, higher productivity, government policies, strong research and development and industrial base. 4. OPPORTUNITIES
1) Incentives and support from government for export oriented units: The government pays duty-drawback i.e. you get the excise duty and import duty back.
40
2) International presence : SHAHI has a international presence in the global market. It is well-renowned for its quality and facilities. It is one of the leading exporters of apparel. appa rel.
41
CHAPTER:5 Functional Analysis
Service: To make the samples of different stages on time for the approval of the bu yer PURPOSE: TO ADHERE TO THE HIGH QUALITY AND P ROVIDE ON TIME FABRIC & ACCESORIES FUNCTIONS Function1 To make samples according to the techpack at all stages Function 2 To get approval of the fabric/print, color by the buyer
Function 3 To coordinate with buying house team and the buyer Function 4 To strictly follow the time period allocated for submission of the desired sample Function 5 To handover the production file to production merchandiser team
COMPETENCY 1. Highly skilled labor 2. Fully equipped infrastructure
1. High quality printing and fabric is used 2. Shahi has its own factory for printing and mill for fabric 3. Highly organized software for ordering i.e. MOVEX 1. Skilled personnel, like senior merchandiser or the DMM do this
1. Lacks team work and time management.
Highly organized files are made with details like PO (PURCHASEORDER),TECHPACK,CONSTRUCTION SHEET,MEASUREMENT SPECS,MARKER,TEST,REPORT,FABRIC CARD,TRIM CARD,PDS SHEET ( PRODUCTION ,OB ( OPERATION BULLETIN)
42
CHAPTER:6 DEPARTMENT STUDIED Mentor: MR. SATNAM SINGH( senior merchandiser) Email:
[email protected] Number: 9871981333
BRAND UK BRAND: MEXX & LUCKY BRAND My weekly learning and roles and responsibilities Order –LUCKY BRAND ( MEN’S DIVISION) WEEK 1:
I joined the company, on 3RD June. In the first week became acquainted with the company and the team members comprising a senior merchandiser ( Mr Satnam Singh) , assistant merchandisers (Mr Mohit) and sample coordinator(Ms Sunita Pal) WEEK 2:
I learnt the sampling procedure.It primarily consists of : 1) Sample making 2) COORDINATION 3) SOURCING Also learnt filing of techpaks, different patterns, making a cutting order, filling out submission forms, preparing requisition sheets(for fabric and accessory), downloading the purchase orders and filling out the necessary details. WEEK 3:
A file was handed over by b y the pre-production department for sampling and sourcing as the purchase order was received along with the approved proto sample.
43
WEEK 4:
The fit sample was prepared and was sent to the buyer for approval. The 1st fit sample was rejected. Following were the comments
Fusing was missing from the collar band. And the garment was made with opposite grain of the fabric.
Simultaneously, the order was made for the trims & fabric fo r production. WEEK 5
Correction was done on the fit sample and 2nd fit sample was made. The 2nd fit was then approved and the final pattern was then sent for grading and marker. The costing was done accordingly. WEEK 6
Follow up was done for the fabric which was ordered around 15 days back. After approval the GPT samples were also made by b y the sampling department for garment packaging test. The pre-production sample (PP sample ) was made and sent to the buyer for approval. Following were the comments received: Pocket flap did not have continuous check pattern and the fusing in the flap was also missing. The PP sample did not had the actual trims ( labels ,snap buttons etc.), it was made in substitute trims. The PP sample was sent again after correction with actual trims. And was approved by the buyer and was sent after sealing the PP sample (AKA RED TAG SAMPLE) to the merchandiser.
Week 7:
The production file for the order was made and was handed over to the production merchandiser for production along with the sealer sample and the sourced fabric and trims. Alongside, this team got the account of Bhane, which is SHAHI’s own online retail brand launched on December 8th, 2012.
44
The responsibility for BHANE was:
To source the fabric and trims for the production. To get approvals on the trims and an d fabric lots. To get the grading and marker planning done for the fit samples (which were w ere given by the BHANE team). In the end, to make the PP sample and get it approved. Hand over the file to production manager for production along with the sealer sample and trims and fabric.
45
CHAPTER:7 OBSERVATIONS
The average FOB is $10.
The most complex stage is getting the approval from the buyer on fabric, shades, sh ades, print and fit.
Any delay at any stage can delay the entire order.
The operators in the sampling department are very experienced ex perienced and highly skilled. They Th ey are explained the construction of any new sample by the pattern master and the supervisor.
IT plays a crucial role in the merchandising department. dep artment. All information regarding the order status is fed into the ERP. This facilitates smooth flow in the department.
The sampling department as a whole doesn’t do esn’t work on TNA calendar.
The maximum time is spent in the procurement and approval of trims and fabric.
46
CHAPTER:8 FINANCIAL STATEMENT ANALYSIS
Following were the findings:
I.
Liquidity Ratios :
Gross working Capital – Capital – Sum of all current assets 2012-13
2011-12
6,92,30,91,242.00
5,43,42,20,152.00
Interpretation: the GWC of the previous year is less the current year’s by 1,488,871,090. Net working Capital = (CA-CL)
2012-13
2011-12
2348149203
2290666159
Interpretation: these are the remaining current assets of the company after paying all current liabilities. The company has more NWC in the current than previous year by 57,483,044.
Current Ratio =(CA/CL) 2012-13
2011-12
6,92,30,91,242.00
5,43,42,20,152.00
1.51 4,57,49,42,039.00
1.73 3,14,35,53,993.00
Interpretation: It shows the current assets available on each 1 rupee of liability. In the current year, it has declined from 1.73 from the previous year to 1.51.
47
It shows that the company doesn’t have sufficient current assets to pay off its current liabilities.
Quick Ratio = (CA- Inventory)/CL 2012-13 69230912422437665675
2011-12
0.98
4,57,49,42,039.00
5434220152-1928049925
1.12
3,14,35,53,993.00
Interpretation: Amount of quick assets available against each 1 rupee of liability. It shows the capability of the company to pay its immediate liabilities. In the current year, the company doesn’t have sufficient quick assets to overcome its liabilities. II.
Capital Structure Ratios :
Debt-Equity Debt-Equity Ratio = Borrowed Funds/Owner’s Capital
2012-13
2011-12
3,67,35,38,430.00
4,10,83,10,603.00
1.76 2,09,12,63,042.00
4.57 89,95,38,509.00
compan y. It shows the relation between the Interpretation: It shows the long term solvency of a company. borrowed funds and owner’s capital. It’s implies that for each 1 rupee of owner’s capital, the company has 1.76 rupee of borrowed funds.
48
III.
Profitability Ratio :
Return on Assets = Net Profit/ Total Assets*100 2012-13
2011-12
1,13,96,81,313.00
84,95,41,729.00
0.11 10,37,00,97,047.00
0.10 8,20,16,96,278.00
Interpretation: It shows the net profit earned against each 1 rupee of total assets. In the current year, ROA of the company is 11%.
Return on Equity = Net Profit/ Equity Capital*100 2012-13
2011-12
1,13,96,81,313.00
79,20,52,904.00
0.54 2,09,12,63,042.00
0.88 89,95,38,509.00
Interpretation: It shows the net profit earned against the equity capital.
Return on Capital Employed = Net Profit/ Total capital Employed 2012-13 2011-12
1,13,96,81,313.00
79,20,52,904.00
0.11 10,33,97,43,511.00
0.10 8,15,14,03,105.00
Interpretation: It shows the net profit earned against the total capital employed (equity, debt and current liabilities). 49
Conclusion:
Credit worthiness of the company is high. ROE shows that company is earning good profit for the shareholder’s. The short term solvency of the company is not good.
50
CHAPTER:9 RECOMMENDATIONS RECOMMENDATIONS
•
•
•
The team in sampling department should work-out a TNA plan in order to efficiently manage time and submit samples without delay. They should work according to a proper plan so that the work flow will be smooth and the employees wouldn’t be overloaded. There was communication gap between departments relating to a particular order and within the team, hence that can be avoided.
51
CHAPTER:10 CONCLUSIONS CONCLUSIONS I have learnt quite a lot about a bout the working of this industry through this internship. The work involved in an export house is very tedious and requires a great amount of knowledge regarding the fabrics and also time management. Without a TNA plan, it can be very stressful and inefficient. But when the orders are met on time and a cycle is completed which takes about 3 months at the maximum, the rewards which is the satisfaction of the client and self assurance is very fulfilling. During this time frame of internship
Got the knowledge about the organization setup of SEPL.
Learned about the functional as well as managerial man agerial aspects of the company.
Have practical knowledge of process involved involv ed in company.
Learned to negotiate with the vendor vendo r and Buyer.
Applied the theory to practical work situations.
Follow Up of Sampling in Merchandising Dept.
Learned to follow up with the tech pack.
52
CHAPTER:11 BIBLIOGRAPHY
www.shahi.co.in www.google.co.in
53
ANNEXURES
54
