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Orientation Presentations Rajby Industries
Key Areas • Internal: – Humanistic Approach: • • Human Resources IT Administration Corporate Communications and Internal Branding – Scientific Approach: • Lean Production Methods • Cost Reduction Techniques – Benchmarking
Key Areas • External: – – Market Analysis SWOT Analysis Diversification Strategy New Brand Opportunities: • Local • International – New Markets: • EU Countries
Internal When you are internally strong only than you can focus on more areas. Humanistic Approach It has the potential to increase employee retention rates and productivity. As employees feel more valued by a company, they invest in that company and its greater good.
Organizational Restructuring Why it is important? Organizational performance ultimately rests on human behavior and improving performance requires changing behavior. Therefore organizational restructuring should have as a fundamental goal the facilitation of clear, open communication that can enable organizational learning and clarify accountability for results.
Human Resources Why is HR critical to firm performance? • Human Resource is the most important resource of any organization. • HR ensures the development of employee dynamism, effectiveness, competencies & motivation in a systematic & planned manner. • It’s a labor intensive industry.
The pattern of planned human resource deployment and activities to enable a firm to achieve its goal. Training Rewards
Suggestions • • • Autonomous Department Monthly and Yearly Evaluations Appraisal and Rewards Succession Planning Employee Satisfaction and Motivation Strategies Performance Management System Recruitment Consistency Employee of the Month/ Best department of the Month Delegation of Authority Manual Frequent performance measurement
Feedback System • To engage the maximum number of people and consider the maximum number of ideas and implement the most impacting of those ideas in the fastest amount of time with the least amount of cost. • The people who are doing a particular job know much better how to improve that job. • Encouraging suggestions by rewarding employees whose suggestion is useful fort the company. • It decreases employee resistance and maximize employee engagement.
Succession Planning • Department heads were involved in routine task. When a minor decision in the dept goes through dept head the other people in the department becomes in effective. • Department heads were involved in a simple routine decision as well which junior manager can take easily. • There wasn't any concept of succession planning and self autonomy. • When dept heads get a bit of leisure time they will be able to focus on new things/ techniques of improving productivity and efficiency • Dept heads are so busy that they have no time to think or read about something creative or extra ordinary. • Growth plan for every individual in the organization
Information Technology Why IT is important for growth? The objective of this policy is to achieve efficient and effective use of information technology to support accountability and product delivery, to increase productivity, and to enhance services.
Benefits of IT strategy • Strategic information technology investments create value by addressing persistent business needs of an organization. • Better Decision Making • ERP system (policy) • Generation of automation reports • Organizational data policy • System Integration • Monitoring and Accountability of value addition
Performance Measurement • Frequent performance measurement is essential for effective management control. It provides the feedback needed to evaluate performance and take prompt corrective action when necessary. A management information system that delivers timely, accurate operating and financial results is a requirement for meaningful performance measurement. • Organizational planning should produce a time phased comparative standard or baseline for variance analysis and frequent performance evaluation. Performance measurement must integrate operating, financial, and investment outcomes to provide a complete picture of current performance and a basis for estimating future results.
Learning Organization A learning organization is the term given to a company that facilitates the learning of its members and continuously transforms itself. Learning organizations develop as a result of the pressures facing modern organizations and enables them to remain competitive in the business environment. A learning organization has five main features; systems thinking, personal mastery, mental models, shared vision and team learning. When everyone in an organization is fully aligned and understands the part they play in the overall success of the organization then things get done more easily. Jack Welch also refers to this not only from an alignment perspective but also the creative process; "Getting more participation really makes the difference, giving you more insights and more ideas, and at the end of the process.
Administration Why Administration department is important? A good administration department is necessary to make sure that other department functions run smoothly. Admin should be different from. HR All the general queries should be directed to Admin department rather than any other department to make sure no one get disturbed because of petty issues.
Overall outlook • We are what we repeatedly do. Excellence, then is not an act, but a habit. • When organization develops an image that everything it does is according to level of excellence than it reaps many benefits. • Attract better employees. • Retain better employees. • It reaches to the customers as well.
Suggestions Total Productive Maintenance (TPM): • • • Total Productive maintenance system should aim at three pronged benefits: Significantly Lower Unplanned Downtime Quick response in case of a downtime Higher Overall Equipment Effectiveness
B 2 B • Different in terms of order requirements, no standardization • One USP needs to be highlighted which is common for all orders, example sourcing • B 2 B branding is more about relationship building, the more you know about your customers the more leverage you have to build relationships
B 2 B • Communication plays an important role in B 2 B relationship building, necessary to have clear and timely communication • All touch points for B 2 B branding opportunities should be focused on ONE USP that every client can relate to
Website is one of the important communication medium for B 2 B as well B 2 C business. Some people form their initial perception by analyzing communication medium. First impression sometimes lasts for very long time.
CRM • Customer relationship management is an important tool in B 2 B businesses • A complete data base of all clients is necessary along with some personal information such as birthdays and anniversaries and gifts should be sent to them on these dates • CRM makes communication effective and easy • Makes it easy to spot trends for different customers
CRM • A complete database can also help in spotting other factors such as payment time, defected supplies returned, quality expected • In businesses where everyone provides similar goods, CRM stands out as a differentiating factor and helps enhance the sales revenues
Corporate Communications • Corporate communications is an important tool to disseminate data related to the company. • Ensures that every one is on the same wavelength strategically and knows what direction the company is headed in • Helps change attitudes and motivates employees to do better.
Corporate Communications • At Rajby, the corporate communications department would also be responsible for all the ‘communication touch points’ for example emails and linkedin profiles would be monitored by this department. • Listing on major B 2 B sites. • Company profile on social network. • Helps build image in front of international clients, crisp communication is always appreciated and remembered for a long time.
Internal Branding • Internal branding is an important element for all organizations, it helps create an environment where people start taking ‘ownership’ of the company. • Internal branding entails display of company name on the building, uniforms for the work force, displaying the mission and vision statement at important places within the factory premises so on and so forth.
Mission and Vision Statement An ideal mission statement should be inspiring to employees. The statement brings a certain focus to the staff as the purpose of their work crystallizes and they are able to see the value of their contribution. Few things in life are as fulfilling as the knowledge that you are contributing something greater than yourself. The mission statement should allow each employee to see their own personal role in the firm's success. • I don't think middle management follow vision and mission statement or they are not aware that they have to follow one. • Middle management in rajby is over satisfied with the growth and none of the middle managers didn't talk about future growth and opportunities. They were two happy with the past.
• "Mission Statements" and "Vision Statements" do two distinctly different jobs. • Rajby has same vision and mission statement which is not the right practice. • Mission and vision statement are not communicated through out the organization. • Only board of directors talked about future plans. • Expected quality and traits should also be communicated.
Scientific Approach Importance Concerned with production of efficiency and productivity through the one best way. Scientific method should be used to define the best way. There should be standardization.
Lean Manufacturing processes are driven by three controls cost, quality and delivery and the garment manufacturing industry is no exception to it. Lean manufacturing is a systematic discipline or application of philosophy to have a process that is optimized with lesser wastes and lesser potential losses.
Application of Lean Manufacturing requires a clear focus on all components and functions within an organization. • • • Internal Customer Protocols. Continuous Flow. Value Stream Mapping Visual Controls Right First Time Andon Continuous Improvement: Lean Way Genchi Gembutsu Kaizen
Cellular Manufacturing • Cellular Manufacturing is a model for workplace design and has become an integral part of lean manufacturing systems. • Cellular Manufacturing employs setup reduction and gives the workers the tools to be multiprocessor, operating multiple processes, and multifunctional, owning quality improvements, waste reduction, and simple machine maintenance. This allows workers to easily selfbalance within the cell while reducing lead times, resulting in the ability for companies to manufacture high quality products at a low cost, on time, and in a flexible way.
Modular vs Conventional Line I will take example of Madura Clothing’s shirt line. Recently in a conference Mr. Lal, Head Manufacturing, Madura Clothing, presented a case of the Shirt line. They have both conventional line and Modular line in a same floor. As per his presentation, in Modular line they produce 14. 3% more shirts with 23% less operators comparing to the conventional line. Secondly, the labor productivity (operator only) of the Modular line is 48. 6% higher than conventional line.
Case Study: Gokaldas Exports Ltd. • India’s largest apparel exporters. It is a “one-stop shop” for the world’s most preferred apparel brands, including major casual and sports clothing lines. • GEX’s leaders knew they would need to improve profits 15 percent to 20 percent without adding resources. • Nike, a key client, strongly suggested that the company should implement lean process improvements. • GEX has embarked on a plant-by-plant cultural transformation based on lean principles in response to heightened competition and customer expectations. • Initial lean training and teamwork yielded productivity increases of 35 percent—without adding resources.
• GEX made significant strides in on-time delivery, firstpass yield and productivity. Plus, sales increased by two percent in spite of a severe economic downturn. • To help combat high absenteeism, GEX created The Lean Fund, which allows employees to earn and save a bonus when their production line exceeds the 70 efficiency target.
Cost Reduction Techniques A continual improvement process (CIP or CI), also often called a continuous improvement process (usage preference discussed below), is an ongoing effort to improve products, services, or processes. • The core principle of CIP is the (self) reflection of processes. (Feedback). • The purpose of CIP is the identification, reduction, and elimination of suboptimal processes. (Efficiency). • The emphasis of CIP is on incremental, continual steps rather than giant leaps. (Evolution). Six Sigma Concept of first time right. Unit Production System Improving Technology. Periodic Awards.
Unit Production System An advanced apparel manufacturing system in which a single garment is progressed through a sequence of operations. • • • Pros Bundle handling completely eliminated. The time involved in the pick-up and disposal is reduced to minimum. Output is automatically recorded, eliminates the operator to register the work. The computerized systems automatically balance the work between stations. Up to 40 styles can be produced simultaneously on one system.
Cons • Unit production system requires high investments. • The payback period of the investment takes long time. • Proper planning is required to be effective.
Organizational Culture Rajby needs inculcate innovation, cost reduction and wastage control in its organizational culture. • I think Rajby can save a lot of cost if they built these concepts in their organizational culture, which can result into competitive advantage which is very difficult to imitate. Cost reduction can be done at all levels. • If we inculcate a sense of ownership in our employees i think we can save a lot of cost. • By cost i mean electricity cost etc • There were some employees who were see wasting these resources (AC, Lights) • The annual awards should be given on the basis of that.
Case study: Ace Fashion The company has formulated other well designed plans to convert this loss due to the wastage and surplus production into saleable commodities to yield good profits for the company. They have undertaken the following activities to reduce these overheads and convert them into additional profits for the company. • The company manufactures matching scarves from the fabric cuttings of 2 to 5 meters. • These cutting wastes from the printed fabrics are creatively used as appliqué work on plain dresses to make them look more attractive and make optimum utilization of the wastage.
Benchmarking is the process of comparing one's business processes and performance metrics to industry bests or best practices from other industries. Dimensions typically measured are quality, time and cost.
Importance • • Performance Gap (Actual / Desired) Global Competition Productivity Increases Focus / Goal Setting Success Stories Middle Management Attitude Other Industry Best Practices
Suggestions • • • Industry Benchmarking. Cross Industry Benchmarking. Success Stories with Middle Management. Corporate Goal Setting. Individual Goal Setting.
Market Analysis The world denim market is likely to grow continuously for the next few years. However, supply is growing at a faster pace. World Jeans Market Expected to become 56. 2$ billion by 2014. Global demand growing at 5%, supply at 8%. 70% of world jeans consumption between EU, US and China. There is a vast variety of style and designs that are popular in particular location. Decrease in US consumption because of global recession.
PEST Analysis Political The political situations are not well in Pakistan. The elections are due next year so we can expect more political uncertainty in the upcoming months. Corruption level High. No fixed policy. International pressure.
Economic • • • Exchange Rate (sourcing material, taking orders). Inflation. Energy crisis. Non consistent policies. Growth stage. Income disparity.
Social instability due to rising prices. High illiteracy rate. Social influenced. Unbalanced society.
Technology Economical connectivity. High internet penetration rate in Karachi. No progress in Research and Development.
Where does rajby want to be in the next 2 years? In the next 2 years we are expecting more orders after the rise of wages in China. We need to plan to increase our productivity level and efficiency level. How much more capacity we will be needing after increasing our productivity levels?
SWOT Analysis Strength Weakness Quick Decision Making. Employees and Suppliers are pretty satisfied with owner. Garment as well as Fabric Manufacturers. Strong upper Management. Ethical Employees HR policies. Delegation of Authority. Job Insecurity. Low level of Creativity. Non progressing Attitude. Non technical general management. Middle management Risk averse. Technolgy Opportunities Brand Opportunities. China Wages. Threats Inflation Political Instability Development of Export Zone in Asian and African Countries. Energy Crisis. Technological innovation.
Strategic Fit By working on our weaknesses and enhancing our strength we will be able to create a non imitate able competitive edge in the market. By working on our productivity and efficiency level we will be able to produce greater amount of goods with same level of output which will translate into more profits and employee delight
Diversification Importance? The diversification of business mitigates micro economic risk. Diversification is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets.
Concentric diversification Developing synergy in marketing through concentric diversification leads to improved product development. A company is better able to perceive the needs and desires of consumers in given market areas when the company's marketing division works closely with the product development department.
Few good examples of successful diversification • Virgin Group moved from music production to travel and mobile phones • Walt Disney moved from producing animated movies to theme parks and vacation properties • Canon diversified from a camera-making company into producing an entirely new range of office equipment.
Advantages of diversification • • • Mitigating risk Increase profit Better use of facility Waste management Improve Product Development
Retail Brands Developing rajby own International brand local brand might not look that profitable because of volumes but it can definitely help in lowering risk and increasing productivity and in house expertise.
New Retail Brand • Local Brand • International Brand Multi Brand Store Exclusive Brand Store
Importance • Easier to create and maintain. • Can avoid some risk which International brand can’t. • Development of Expertise which can be used for International Brand. • Improvement of Internal Process. • Profit. • Growing Market.
Local Brand Strategy • • Local Environment Competitors Marketing Strategy Brand Key
Local Environment Recently many new brands of branded jeans has opened, plus some new international brands have enter the market as well.
Competitors • • Levis Pakistan Stone Age Outfitters Cross Roads
Marketing Strategy • Using our in house expertise creating the better product than our competitors. • Specialized Bottom store. • Launching EBO stores. • 360 degree Brand Building. • Free delivery all over Pakistan.
Brand Key Competitive Environment: Local and International Brands operating in Pakistan. Non branded Shops. Old used jeans.
Target Market: Sec A & A++ Age 18 -50
Key Insight • Growing trend in Pakistan. • People are moving towards branded products. • Small Market with few players.
Benefits Functional • • Durability Reliable Trendy Specialized Emotional • Premium brand
Brand Persona • • • Young Trendy Adventurous Reliable Dependable
Reasons to believe. • • • Inculcating quality cues during brand building. Sensory Branding. Premium Quality and Price. Return Policy. Expert Endorsement.
Consumer Discriminator Rajby is one of the biggest export house in denim category. Rajby can provide its customer with much better product than most of the other local brands established in Pakistan.
International Brand Strategy • Environment • Competitors • Marketing Strategy
Environment Opening of MBO stores worldwide.
Competitors • Levis • Forever 21 • CK
Marketing Strategy • • Starting through MBO stores and website. Niche Marketing (Haier) From Niche to mass market. Customer Engagement Designyourbottom. com
Indian Examples There are some denim manufacturers in india which are in the business of: Fabric Production Garment Manufacturing Retail Brands aarvee-denims arvindmills
New Markets • Entering in to new Markets. There are still many European countries and brands which we haven’t work with yet. Countries like Germany, Italy and France. • New customers in the existing Market. By providing better service and improving our communication strategy will be able to attract much more buyers from the existing market.
Cases Haier Group Started as OEM Manufacturers Haier carried out its brand strategy and created its refrigerator brand name by arousing the employees’ quality consciousness through “smashing refrigerators” Diversification allowed Haier to spread out its risk among various product lines. In 2011 the Haier brand had the world's largest market share in white goods with 7. 8 per cent.
Haier grasped the opportunity for global market integration to implement its international strategy. Instead of relying just on exports based on low production cost, it established overseas factories integrating “localized R&D, localized manufacturing and localized marketing” to continuously create demand in overseas customers, thus establishing Haier’s international brand name. Haier Blue Ocean Strategy (U. S)