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COMPANY
PRESENTED BY :
ROHAN THOMAS JOHN PGP07140
Overview:
Executive Shirt Company has a solid reputation in the apparel company
ESC sales were dipping
Dwight Collier, general manager, wanted to foray into the custom made shirt segment
Customers were willing to pay 75 % more for a custom made shirt
Although they were deterred by high prices and long delivery times
ESC wanted to get into this market with reduced prices and delivery times
Regular
Shirts
Number of minutes/per
Labour(m
workers shirt/worker
inutes
Operation per shirt)
Make collar 3.9 8 0.49
Make cuffs 2 4 0.50
Actual Cycle Time (min/shirt) Bottle Neck = 30 min per batch 0.5
WIP Inventory Cutting + Other operations 1980
Manufacturing Lead Time(days) WIP/production Capacity 2.0625
Production Capacity (shirts/day) Bottle Neck =40 min per batch 960
Capacity Utilisation 94%
Direct Labour Content(min/shirt) Cutting + Other operations 26.01
Direct Labour Cost ($/shirt) Labour cost =65* 8 * 6 3.466666667
Direct Labour Utilisation Labour Utilised = 900 * 26.01 75%
Ikes production Process:
A. Regular Shirt Production
Regular Shirt Labour Time required/lbr/shrt (in
Operation Number of workers
Content min)
Make Collar 3.9 7 0.56
Make Cuffs 23 0.67
Make Sleeves 0.65 1 0.65
Make Front 2.5 5 0.50
Make Back 1.7 3 0.57
Join Shoulder 0.66 1 0.66
Attach collar 1.65 3 0.55
Attach sleeves 1.55 3 0.52
Stitch Down sleeves 0.65 1 0.65
Sew Side seam 1.8 3 0.60
Attach cuffs 1.55 3 0.52
Hem Button 1.7 3 0.57
Inspect 1.5 3 0.50
Iron 1.95 3 0.65
Fold Package 1.75 3 0.58
B. Customized Shirt
CUSTOM Shirt Labour Time required/lbr/shrt (in
Operation Number of workers
Content min)
Make Collar 3.9 1 3.90
Make Cuffs 21 2.00
Make Sleeves 0.65 1 0.65
Make Front 2.5 1 2.50
Make Back 1.7 1 1.70
Join Shoulder 0.66 1 0.66
Attach collar 1.65 1 1.65
Attach sleeves 1.55 1 1.55
Stitch Down sleeves 0.65 1 0.65
Sew Side seam 1.8 1 1.80
Attach cuffs 1.55 1 1.55
Hem Button 1.7 1 1.70
Inspect 1.5 1 1.50
Iron 1.95 1 1.95
Fold Package 1.75 1 1.75
Quantity Obtained Value
Actual Cycle Time (min/shirt) Bottle Neck = 3.9 min per shirt 3.9 per shirt
Mikes
plan
Ikes plan Ikes plan
Current Process
Quantity Regular Regular Custom
Regular Shirts
& Shirts Shirts
Custom
shirts
Actual Cycle Time(min./
0.5 0.5 0.67 3.9
shirt)
Manufacturing Lead Time
12.25 2.06 12.58 0.41
( days)
WIP Inventory (shirts) 11760 1980 9060 50
Production capacity (
960 960 720 123
shirts/ day)
Capacity Utilization 83.33% 93.75% 111.11% 81.30%
Direct Labour content
26.51 26.01 26.51 26.01
(min/shirt)
Direct Labour utilization 69.03% 75.02% 90.17% 33.80%
Direct labour Cost ( $/
3.84 3.47 3.43 7.68
shirt )
Question 2: