Business Plan on Garment Industry by kgo14212


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									Notes on Garment Industry Case Study

                                ANDREWS UNIVERSITY
                                School of Business
              Management, Marketing & Information Systems Department


              Notes on Assignment 2 – Garment Industry Case Study
General Comments

1. Assignment Structure
   The assignment should be written in the form of a business report, with the following
    It should start with a report title and table of contents. The title immediately tells the reader
      what is the subject of the report. The table of contents can be scanned quickly to get an idea of
      the approach taken in the report, and where to look for
       The body of the report should start with an Executive Summary. This should fit on one page,
        and capture the essence of the report. In some assignments, a Recommendations section
        should also be included. Look for authorities to quote, using footnotes, and use a bibliography
        to list references.
       Use headings and sub-headings to structure the report. This helps to put your comments into
        context, and give them relevance. The reader starts with some understanding of what it is you
        are setting out to say.
       Use diagrams and tables to represent concise representations of complex ideas or data.

2. The specific requests asked for in the assignment
   Be sure to respond to each specific request made in the assignment. In the overall sense, the request
   is for an analysis of a case study, so the answer needs to be written in those terms. In a more
   specific way, the report needs to include each of the following:
    Reference to the development of the technology platform and how it supports corporate strategy.
       Alignment between corporate strategy and IS planning.
       A number of specific aspects of management's approach to the problem.
       A value system diagram and explanatory notes.
       Your thoughts on what the managing director should have done.

3. Observations
Many of the important aspects of the case were reported, but too often there was no comment or
analysis. You obviously knew enough to pick them as important issues, placing them in your report,
but did not go the one step further, and tell me why you felt they were important. The assignment asks
you to "Write a 7 to 10 page analysis…".

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Notes on Garment Industry Case Study

Here are some examples of points you made, and what you should have added:

The issue                                            What to analyse
The consultant's report stressed urgency of          With the benefit of hindsight, do you think this
change, with the first phase implemented by          was feasible?
autumn 1984.
The belief that MICS could be ported to              Do you think this assumption was well founded?
Computers Anonymous.
MICS was partially implemented at 2 other sites.     What are the ramifications of this?
It proved difficult to charge extra to the retail    Why was this? What market survey or discussion
chains.                                              with retailers took place?
It was difficult to persuade suppliers to improve    Why was this? Who had the responsibility of
performance.                                         developing the relationship with suppliers? Did
                                                     that happen?
Project management guidelines, checkpoints,          Were these set up in accordance with best
steering committees.                                 practice? Were they maintained?
Create a new design and management structure.        What was the plan for implementing this strategy?

Suggested Responses & Examples
There is no single "right" answer to a question that is posed in the form of a request for an analysis.
The following suggestions are not intended to be exhaustive, or more correct than some other approach.

Executive Summary
It was clear that change was necessary the deal with competition from overseas garment suppliers. It
seems that IGL started out doing all the right things.
           They commissioned consultants to recommend business strategy for gaining competitive
           They developed an investment proposal to implement the recommendations.
           They set up a project team to evaluate options.
           They set up a User Committee with reviews and check points.

So what did they do wrong? With the benefit of hindsight, it is possible to identify a number of errors.
          they misread the market’s willingness to pay for improved flexibility and responsiveness
          they paid too little attention to relationships with suppliers and retailers
          they put responsibility for “a total cultural change” in the hands of someone new to the
          they did not capitalise on the strengths of their own DP staff
          they accepted an evaluation of options weighted in favour of SDC
          they repeatedly ignored warning bells about overly ambitious deadlines
          they overlooked the major technical difficulties of “porting” to a new platform

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Notes on Garment Industry Case Study

Key Players and Groups (an example of the use of a diagram)
Many of the organisational details are not documented in this case study. However, the structure as it
relates to this study would be something like the following diagram.



                          PRODUCT                       SPECIAL                    PRODUCT
                          GROUP 1                      GARMENTS                    GROUP 3


        PROFIT                  PROFIT                  COMMERCIAL                 FINANCE
       CENTRE 1                CENTRE n                  DIRECTOR                 DIRECTOR

         DP                       DP
       MANAGER                  MANAGER

Each Profit Centre (there are 19 in IGL) has a Data Processing Manager who reports to the company
Finance Director. The Commercial Director was hired from outside the company to be the project
leader for the new production control system. The relationship between the new Commercial Director
and the existing DP Manager is not specified in the case study document, and this could indicate that it
was not made clear in practice. However, it can be assumed that there was at least a “dotted line”
relationship since the new system was computer-based.

Other groups operated from time to time within the Special Garments Group throughout the project,
although perhaps not as effectively as they should have.

Special Garments also had relationships with its material suppliers, the retailers, trade union leaders,
consultants, and computer hardware and software suppliers.

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Notes on Garment Industry Case Study

Consultant’s Report (a representation of a Rossas SADT diagram)
The consultants recommended a program of urgent change, to be completed in time for the autumn
1984 season, which allowed only five months for implementation. In the view of the consultants, the
best opportunity for IGL lay in producing relatively high volumes of fashionable, high value-added
garments, and in being more responsive to changes in the market or to buyer misjudgement. The
intention was that by reducing their lead times, Special Garments would be able to compete not only on
price and quality, but also on speed of response to changes.

However, there seem to a couple of flaws in the argument here. There is nothing in the study to
indicate the size of the market for higher-priced, fashionable, quality garments, or that retailers or
customers would pay more for them. It is true that better quality more fashionable garments at the
same price would provide a competitive advantage, but the notion of “high value-added” seems to
imply that it was assumed a higher price could be charged.

     Suppliers                                    Policies
                                                  & Plans

     Business Objectives
     & Strategies                        Investment         Project
                                          Proposal           Plan

                                                                                 Production Control
      Concepts &                                MICS
      Business Needs
      . Flexibility
                                             Development                         User Training
      . Responsiveness                         Project
                                                                                 Management Info

                                  DP Staff
       Education                                Hardware         MICS
                                  (SDC &
       & Training                                              Application

       Finance                                        Technology

                                             SADT Diagram

After analysing the consultant's report, IGL decided to go after reduced lead time as a business
objective. This would require cooperation from suppliers, and the increased flexibility and
responsiveness would allow IGL to increase the proportion of high value added goods produced. The
strategy developed from these objectives lead to and investment proposal and a project plan to run the
MICS development project. The plan involved the purchase of hardware and software, with significant
DP staff involvement in training and re-coding for the new platform. The result of the project was to be
an integrated production control system, operated by trained users, and produced decision support
management information.

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Notes on Garment Industry Case Study

Key Events and Dates (examples of the use of tables to summarize data)
Implementation Plan

                    Date                Stage to be completed
                    mid Nov 83          detailed specification review
                    mid Dec 83          specification finalised
                    Jan 84              start implementation
                    Mar/Apr 84          implementation date
                    mid Mar 84          complete implementation
                    Jan 84              start user training
                    May 84              complete installation

Implementation Events

    Date               Event
    early 83           commissioned consultant
    Aug 83             consultants report
    Oct 83             investment proposal
    Oct 83             reported four alternatives
    Sep-Nov 83         commercial director evaluates
    Nov 83             board approval
    early 84           several PC’s in use running Lotus v. successful
    Apr 84             5-7 weeks behind schedule, partly because of problems relocating machinery
                       Commercial Director noted five problems
    Sep-Nov 84         gradual improvements to MICS
    Nov 84             went live, but with serious performance problems, and some features not
    Mar 85             another consultant asked to recommend to continue or abandon
                       contractual problems with SDC
                       consultant report      - MICS will always be difficult and expensive to maintain
                                              - will always suffer performance problems
                                              - recommended to continue with MICS, but to introduce new
                                                management structures and procedures
    2 weeks later      over-stocking and under-ordering
    end 85             Release 2 of software still had problems, but would see “light at end of tunnel”
                       Commercial Director - “time to pull the plug on project”, resigned
                       Data Processing manager - proposed going back to the old system

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Notes on Garment Industry Case Study

Notes on SADT diagrams & Porter's Value Chain

System Analysis and Design - after Rossas


                        Inputs               Information              Outputs

                                            SADT Diagram

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Notes on Garment Industry Case Study

The Value Chain - Michael E Porter

                         Inbound        Oper-        Outbound Marketing          Service            M
                         Logistics      ations       Logistics & Sales                              A
                                        Human Resources Management                                  T
                                            Technology Development                                  I
                  L                              Firm Infrastructure

                                            Support Activities

        The Value Chain          sequence of activities adding value to a product or service

The Value Chain

Support       Corporate
activities    infrastructure
                               Inbound            Operations       Outbound         Marketing and   Service
                               logistics                           logistics        sales
                               Primary                                                                            Margin

Activity                             Definition
Inbound logistics                    Materials receiving, storing, and distribution to manufacturing premises
Operations                           Transforming inputs into finished products
Outbound logistics                   Storing and distributing products
Marketing and sales                  Promotion and sales force
Service                              Service to maintain or enhance

Corporate infrastructure             Support of entire value chain, such as general management, planning,
                                     finance, accounting, legal services, government affairs, and quality
Human resource                       Recruiting, hiring, training, development
Technology development               Improving product and manufacturing process
Procurement                          Function or purchasing input

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Notes on Garment Industry Case Study

Systems Planning and Development Process

      (Purchasing)       – AVAILABILITY
                         – DISPLAY                                                                                       R

                        EASE OF      PHYSICAL          EASE OF           IMPACT ON IMAGE    ABILITY OF              G
                         PICKUP,       PRODUCT            STORAGE            WITH FRIENDS OR     CONSUMER TO
                         LOADING,      PERFORMANCE                           ACQUANTENANCE       DIAGNOSE
                         HANDLING                                            S                   PRODUCT
                                                         EASE OF                                PROBLEMS            I
                                      EASE OF USE        DISPOSAL
                        EASE OF                                           IMPACT ON SELFT
                         STORAGE                                             IMAGE              ABILITY TO      N
        FACTORS                       INFORMATION       ENVIRON-                               REPAIR OR
                                       FOR USE            MENTAL                                 SOLVE PRODUCT
                                                          IMPACT                                 PROBLEMS
                                      EASE OF CLEAN-

                       INBOUND       OPERATIONS             OUTBOUND       MARKETING AND       SERVICE
                       LOGISTICS     ((Using)               LOGISTICS      SALES               (Trouble
                       (Buying and                          (Storing and   (Image Building)    Shooting)
                       Handling)                            disposing)

                                      Value chain in a consumer’s household

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