Lean Beyond Manufacturing Floor - A Case Study on Apparel Industry

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Application of lean concepts in merchandising.

This is a guest contribution from Charm Rammandala. 
Lean manufacturing is being a popular topic in the apparel industry for the last 30 years. Most companies initiate lean management by implementing 5S at the beginning and then move on to other tools such as kanban, Kaizan, Muda and PDCA so on, depending on the understanding on what is LEAN and the objectives they set. However, one noticeable fact on all most all manufactures are, they implement lean only to the manufacturing plant. Maximum they would go as far as lean is concern is to implement 5S in the administration office.

If we look at the history of lean in apparel manufacturing in South Asia, this was a foreign concept to most manufacturers until buyers pushed for it. Evidently major sports brands such as NIKE, Adidas pioneered these concepts and wanted manufactures to implement them in order to continue their orders. The objectives were.
  • To Ensure better compliance 
  • Better quality 
  • Better prices 
Even though time to time we still hear reports about child labour, excessive over time and poor facilities in certain countries, largely everybody agrees that the number of incidents we hear are greatly reduced. The reason is due to the backlash of customers in buying countries, buyers had to ensure the factories making production for them are up to the standards.



While buyers were sympathetic to the conditions of the workers of those manufacturing plants, mainly they wanted to stop the negative PR generated over poor conditions and wages. The impact to the sales were great and in order to keep the market share and to increase it, buyers needed a tool. Lean was the answer.

Same time in the high street price war was fierce and all the companies coming up with trendy designs with great prices. On these conditions increasing retail price of most items not an option. Naturally buyers wanted to see how they could reverse engineer the prices without squeezing the manufacture.

Essentially quality was another major concern and standardizing manufacturing process and implement quality systems through LEAN, buyers managed to reduce reoccurring damages greatly.

So as we can see buyers wanted LEAN implemented in the production floor where the all sensitive areas concentrated. Majority of manufacturing company also stopped there.

So as we discussed above, LEAN was a concept brought in by buyers to the apparel manufacturing sector. Since then some manufacturing plants implemented on their own, the extend of it largely within the production floor. The purpose of this article is to discuss how successful the lean manufacturing without lean merchandising for the manufacturing company. 

Lets take a common example of lean process in a apparel manufacturing. General objectives are to get the production done through shortest possible time with minimum waste. If we list the objectives,
  • Waste elimination 
  • Work place standardization 
  • Effective plant layout 
  • Quality will be enhanced at source level 
  • Increase the productivity by improving the efficiency 
  • Reduction of production cost and other overheads 
  • Reduce the risk of non-compliance and 
  • Late delivery 
The objectives are great. But we need to realize that in order to achieve all those goals in the production floor, there are quite a few milestones to be achieved before it reaches the production. This process starts with the development merchandising.

The importance of understanding core competency of the company


The most important objective is to be aware of core competencies and develop orders with relevant handwriting. Most Merchandising managers make the mistake of pursuing orders with high CM’s and large quantities. If the high CM order have small quantities, their biggest decision to be made is whether to go with the larger quantity or higher CM. in most cases no regard to what are their specialized product categories or whether they have sufficient machinery & expertise to execute the production. Those are secondary thoughts. Result is incurring losses even before the order begin.

Obviously the managers who are negotiating orders are aware some of the styles their negotiating are not the type of products factory is specialized in or have experience. But they are forced to do so due to lack of orders. Most of the apparel manufacturers are poor marketers. They are used to having buyers coming to them with orders. 95% of manufactures don’t have strong front end, meaning, capability of doing own market research and understand what customers want, designing, developing and offering new styles to buyers. Most manufactures work starts once the sketches are given to them by the buyer. It is important to note that when we say buyer, mostly this means 3rd party trading house or a buyer’s local office which works on commission basis. Those companies’ objective is to find a manufacture who quotes least price.

Once the orders are taken, they are handed over to development merchandiser. He works directly with sample room to get the samples made. Obviously there are deadlines to be met and objective of the sample room is to get the samples done within the time line with the best workmanship. Unfortunately, most development merchandisers don’t collaborate with production merchandiser until the sample handover for bulk production. Similarly, sample room technicians don’t discuss the samples their developing with production technicians until style handover. This is a big mistake as often find samples are not bulk friendly and some of the techniques used in the sample which is now approved by the buyer cannot achieve in the production. This means SMV is off, production forecast is off and expected efficiency are no longer a reality.
OK question is what is LEAN got to do with it. Well lean is a management strategy to reduce waste and improve the efficiency. It has to be implemented throughout the process. Lean doesn’t begin with the cutting room and end up and in packing room. In order to achieve the best results, everybody in the process have to be knowledgeable and understand the objective.

Data trap- The negative impact of pursuing high efficiency


Another common mistake I have noticed across the seas in Asia is, in order to show better efficiency data, some factory managers and merchandisers run the same order regardless of the delivery date. For an example company receive a 100,000 pcs order of round neck T-shirts with 3 different delivery dates, if one line is producing and as a result of the decent qty, if their achieving 100% efficiency, they would continue the run regardless of the shipping date of the balance qty. Merchandisers will place the orders for fabric and trims and stock the raw materials without having any regard to the cost involved and potential losses incurring in all departments. Some of those costs includes high inventory cost as fabric and trims brought in advance, high volume of finished goods awaiting future shipping dates, Interest and other bank charges. since data on the paper shows impressive production, most managers feel confident that they added value to the company.

Essentially the idea behind this article is to highlight obvious mistakes we do on day to day basis on work place due to lack of understanding. It is important to have a good understanding of the philosophy of the lean concept rather than knowing few buzz words and throw them randomly during a conversation. LEAN is continuous improvement so there’s always room for improvement

About the Author: Charm Rammandala is the founder & CEO of IStrategy USA. He counts over two decades in fashion supply chain in diverse roles as Lean Manager and Model himself. He is an expert in rolling out programs in Lean apparel manufacturing and Sustainable labour costing. His former positions included being the first Lean Technologist at George Sourcing Services UK Ltd.

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Online Clothing Study: Lean Beyond Manufacturing Floor - A Case Study on Apparel Industry
Lean Beyond Manufacturing Floor - A Case Study on Apparel Industry
Application of lean concepts in merchandising.
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