Acknowledgement

We start by thanking the Almighty in allowing us to complete and present this project to you
in this time of crisis as a part of our final project in concluding the Operations Management
(MGT 314) course. The report was written and compiled based on the knowledge gathered
through various methodologies and sources.
We would initially like to thank Ms. Afnan Yusuf, Lecturer of the Department of
Management, North South University for her constant support and motivation throughout the
entire journey. Her constant faith in our abilities amongst other much appreciated emotional
support acted as a backbone in allowing us to complete the project whilst fulfilling our
curiosity on relating theoretical education to reality. We would further like to thank her
patience and constant availability regardless our repeated requests and inquiries, without
which we would not have been able to complete the project. Lastly, we are thankful to each
member of the team in providing their constant support and collectively tackling every
hardship we faced. Furthermore, thanking our peers and the interviewee who took the time
from their busy schedule to explain and descriptively answer our queries.
We would like to conclude by acknowledging any and all lacking that might surface from the
report. We have had a few setbacks due to the global pandemic and had to readjust or
improvise to deal with the ordeals. We humbly apologize for the shortcomings and hope to
present a fulfilling report.
Letter of Transmittal
20th May, 2020
Afnan Yusuf
Lecturer, Department of Management;
North South University;
Bashundhara, Dhaka-1229, Bangladesh.

Subject: Submission of report on “Production management of “AST Knitwear Limited.”.

Dear Ma’am,

We, Team Alpha of MGT 314.15, humbly present to you the final report on a garments firm
known as “AST Knitwear Limited” under the parent company: Bengal Hurricane Group. In
this report we have covered various aspects of production management process of “AST
Knitwear Limited”. The report gave us an exclusive opportunity in taking the knowledge we
gathered throughout the course and relating it to the real world. We accessed the operations
management book, lecture slides and most essentially the class notes and also took help from
the internet and came to understand many events in preparing the report. This report, the
investigation behind it and its findings was prepared under your direct supervision. We pledge
that under no circumstance will any part of it be reproduced for any reason, shared with
anyone else, or uploaded to any Internet website without your written consent. Furthermore,
we pledge that this report has not been submitted to any other faculty member of North South
University.

It was an extensive yet fulfilling ordeal, which would have been impossible without your
constant support, inspiration and guidance. We hope We hope that you will find this report
satisfactory. However, if any explanation is required, we would be honored to oblige.

Sincerely
Team Alpha
Executive Summary
The following report is constructed with a sequential disintegration of how operations are
carried out in a garments industry, in our case, AST knitwear. The firm has an extensive grasp
on modern production techniques and is the supplier of many top brands. This report
elaborates the dimensions of their process layout structure, quality analysis, operational and
competitive strategies, forecasting, process layout, and inventory management. The segments
are represented through the production of a basic round collar t-shirt. The process layout is
divided into 13 steps illustrating the making of the t-shirt and the number of workers and
machines required in each step. The report then continues to talk about how the firm takes the
necessary measures to ensure an efficient and lean production line. The firm procures
materials from their own composite unit, allowing them to have greater control over the
quality and quantity of the raw materials used, thus foreshadowing competitors in terms of
both cost and quality. They use a mélange of core strategies to earn customer loyalty and
build a positive reputation in the industry. AST knitwear believes in proactively handling
hindrances and spikes in demand. Forecasting is one such important aspect of dealing with
future uncertainties. Different forecasting techniques are used to identify upcoming
possibilities. Since it’s a garment industry, a continuous batch process is used for the
manufacturing and the time spent in each step is specified elaborately. Furthermore, a
detailed explanation on how they manage their inventory is provided. To conclude, some
recommendation based on the report is suggested on how the firm can improve their
operations management and make the entire process faster and more profitable.
 Some words and their meanings
Words Meaning/Abbreviation

Charging This basically means pouring or placing raw materials in the

machine before the production process.

TSD Stands for Twin Shaft Dispenser. It is used in the paint making
process. This machine plays one of many crucial parts in the
paint making process.
 QC Stands for Quality Control.

Specs. Is used to denote specifications for paint. This might include the
names and amounts of raw materials to be used in a certain paint.

SAP Stands for Systems Applications and Products.

SKU Stands for Stock Keeping Unit

MOH Stans for Manufacturing Over-Head

BPBL Stands for Berger Paints Bangladesh Limited

G.I wire It means Galvanized wire. It is mainly a metal wire with a

zinc coating to protect it from corrosion.

WIP Stands for Work in Process.

LC Stands for Letter of Credit.

ISO Stands for International Organization for Standardization

G.M. Textile, Dying & Printing Mill

Introduction
AST knitwear is recognized as one of Bangladesh’s largest manufacturers and exporters in fashion
knitwear, upholding a reputation in quality and design. It was established in 2004, under its parent
company Bengal Hurricane Group. Their high capacity and sophisticated manufacturing plants
along with highly skilled and experienced workers together produce over 8 million pieces of
apparel per annum at 42 tons of fabric per day. Through the years the firm has acquired an
extensive grasp and knowledge in the knitwear industry, allowing them to synthesize fabric with
endless capabilities and variations ranging from Single Jersey, Interlock, Pique Polo, Viscose,
Lycra, Nylon, Polyester, Rib Fabrics, Pique Fabrics, Fleece and many others. The company has
worked with a client base ranging from: Tommy Hilfiger, Zaara, H&M, Calvin Klein, New Look,
Primark, Walmart and Pull & Bear. The firms manufacturing plants are capable of producing all
kinds of RIB/INTERLOCK design, striped (Feeder & Engg. ) fabric, stretch knitted fabric using
spandex, all three kind of Thread Fleece & Terry followed by a large selection of yarn, 100%
Cotton, 100% Polyester, 100% Rayon, 100% Polyamide, Tensile and combinations of Polyester-
Linen, Cotton Linen, Cotton-Rayon, Cotton-Modal, Cotton-Polyester, Polyester-Rayon, PVC
snow, PC siro, Slub, Neppy, Injected Melange etc. including random adjustments or
modifications as per customer demand & by studying the current market trend. Their expertise
and experience in the field allows internal departments like ‘work study’ and ’Industrial
Engineering’ to change, vary, and pre-run manufacturing processes to each incoming order
placed, making the needs for crashing and slacking processes redundant. The company is set out
to dominate competitors through continuous research and development paired with the prime
concern of customer satisfaction and an endeavor to make customers happy.

Mission
Their mission is to provide customers the best designer’s clothes with an ethnic touch. House
of Ahmed hires merely proficient workers who are very much dedicated towards their work
and much sincere.

Vision
House of Ahmed’s main vision is to innovate & provide best designer products and services to
its customers. Their goal is to bring differences in clothing to stay ahead of fashion trends,
market changes and the latest technology.

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The Strategist l MGT314 l Spring’20

G.M. Textile, Dying & Printing Mill

Operational Strategies

To remain competitive in the market following some operational strategy is essential

otherwise competitors will take the market share. Matador follows the operation strategies
given below:

Pricing Strategy: Matador Ball pens cost Taka 5 per pen. It is surely reasonable for the
students and other consumers. Matador is maintaining this pricing strategy for a long time.
Whether the price get higher for raw materials or labor cost, they try to keep the ball pen’s
price stable for their customers.

Quality: The quality of the ball pens is also fine as the products are checked through writing
test after being produced. Matador ensures the quality for their varieties of ball pens and seeks
customer satisfaction.

Location: The location of the factory is inside Dhaka which is also convenient for the product
distributors or buyers. Also, it is easy for them to distribute the products all over the country.
Flexibility: Matador ball pens come in different designs and colors. Students, working people
or other users easily find it attractive as per their preference. The writing of the pens is also
smooth.

Service and Service Quality: Matador ball pens are very popular among students and office
going people. Matador serves their best quality to the users. They claim that about 40 pages
can be written by a single ball pen. Also, the packaging and designs of the pens are good
enough to grab customers’ attraction.

Managers and Workers: The managers and workers of Matador organization are very
helpful and friendly. They briefed about every single processing to us. Also, they looked
trained and efficient enough to do the processes perfectly whether through machines or by
hands.

Product and Service Design: The ball pens come with various designs and colors which
definitely attracts more and more customers. Whether it is a refillable pen or not, they all are
examined properly before distribution and it ensures the good service for the pens.

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The Strategist l MGT314 l Spring’20

G.M. Textile, Dying & Printing Mill

Productivity
 3
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G.M. Textile, Dying & Printing Mill

Demand Forecasting
4
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Capacity Planning
Capacity Utilization
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The Strategist l MGT314 l Spring’20

Process Selection and Facility Layout

Process Type

Matador is following Repetitive Processing because they produce high volume of pens (1.6
Million per day) with low variation (Color). The process is naturally repetitive and the works
skills are semi as most of the production work is done by the machine.

Layout Type

Matador is using product Layout. Resources are

used in the
production of a single pen. Per unit of production
cost is low and
volume is high that is why they are able to sell the
pen for only
5 taka. A fixed route is followed during
production of parts to
assemble and making the finished product. They use labor and
equipment efficiently with low cost. (Stevenson, 2019-2020)

Manufacturing Process

The main ingredient of producing pens body is the polypropylene (PP). It is mixed in the
large mixer to separate and measure the perfect portion. Next, in the injection department, the
measured PP is poured into a giant funnel known as hopper. In some instances, they are
actually vacuumed up their tubes and directly into the hopper where they are measured and
proportioned for injection process. The PP travel down the hopper and into the machine
where they are melted down and injected into the mold in the shape of cap and pen body
attached to a plastic framework known as runner. The process is repeated for per cap clutches
and interior barrels. After pen and body is detached, the plastic framework is used again.
Color is mixed with PP to make several color body and caps. Next, they are taken to
chamfering department where they are cooled down and then inserted into the machine to get
shape. They are moved to ink filling department where ink is filled and nip is attached. The
pens are inserted in the centrifugal for 5 minutes to remove oxygen that prevent the ink from
flowing. After that each pen is tested through writing before moving to packing. If the pen is
approved by the quality control people, they are moved for packaging, storing and sending to
sales point via truck. (Alistair Brandon Jones, 2012)

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The Strategist l MGT314 l Spring’20

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4
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Manufacturing Process Breakdown

House of Ahmed currently produces 5 categories of Panjabi and each of them has wide range of
design variations. The general manufacturing steps for regular manufacturing items are more or
less similar. The main process differentiation takes place at fabric selection and designing
department due to variations of designs and following estimated costs for per unit manufacturing.
Cleaning also varies based of fabric types sometimes. But they generally follow dry cleaning for
most of the Panjabi variants. A new variant is included in manufacturing line only after final
design approval comes considering the sample product. Since they keep bringing new design
variations, they make smaller to moderate batch of production and follow process layout.
 The core process starts with selecting the right fabrics and accessories for the right product, then it
goes to designing unit before reaches to cutting master cutting process usually takes 20-25
minutes in general. Later on, product is proceeded to sewing department. Sewing time largely
varies based of fabric types and amount and quality of designs after sewing labelling and
accessories is done the product is forwards for cleaning and ironing. Then the product gets well-
packed after the final inspection and moved to warehouse. To ensure flawlessness in product,
basic small inspection takes paces after each phase.

A Glimpse of HOA’s Panjabi Manufacturing Steps:

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The Strategist l MGT314 l Spring’20

Assembly Line Balancing

AST Knitwear like most other garment manufacturers uses a continuous batch process through which they reach their
order quotas. Since most numbers and designs are specified by the clients the firm tries their best to conform to those
standards. They procure raw materials from their sister firm and then push it through their main process of cutting,
stitching, ironing and QC and packaging. The following diagram shows their cycle time.
6
The Strategist l MGT314 l Spring’20
 7
The Strategist l MGT314 l Spring’20

Application of Operations Management Concepts

Bottleneck Analysis

Due to heavy demand ACI Limited will need some raw materials at large quantity and
available suppliers might not be able to deliver all within time. They might struggle to keep
the upscaled production volume due to shortage. Alternative suppliers for supply backup
might solve this case. Moreover, due to workforce shortage production might slow down
during production upscaling. Estimating requires workforce and recruit more can solve this
problem. Mix media approach and expansion of supply chain might cause delivery delays
with previous delivery facility. Collaboration with 3rd party delivery businesses will solve
this problem.

Trade-off Analysis

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The Strategist l MGT314 l Spring’20
 Inventory Management
Inventory Counting System

They use Perpetual Inventory system for counting their inventory because they store has
huge amount of raw materials and their lead time is high so they need to keep trace of
inventory every time. They follow FIFO (First in First Out) where the oldest item in the
inventory is used first so that item do not get damaged. They carry forward their remaining
finished goods inventory for adjusting it with the next years demand in case of demand
variation.

Types of Inventory

1. Raw Material: Polypropylene (PP), ink, color, and pen nib.

2. Work in Process: Cap, Pen Body, Pen lower cap, body containing ink.
3. Finished Good: Pen.
4. Pipeline inventory: Pen stored in the truck and on its way to the sales point.

Safety Stock = Opening Stock – Closing Stock

They Use Economic Production Quantity Model (EPQ) to find out the optimal amount of
production which would reduce inventory cost.

Example: Suppose, Matador Rate of production is 1600 per day. They supply 1300 per day to
retailers. The cost of setup a pen is 2taka. Annual holding cost in 0.65 paisa. The factory
operates 300 days a year.

=√2∗(1300∗300)∗2
0.65∗ √1600
Optimal Run Size = = 3577 1600−1300

Number of Runs per Year = ����∗=390000

3577= 109 Category Item
Cycle Time = Q*/U = 3577/1300 = 2.75 days Run time = A Color

Q*/P = 3577/1600 = 2.24 Days B Pen nip

��∗
Lower End
��(��−��)
C Polypropylene

���������� �������� = 2× �� +����∗× �� = 335 × 0.65 + 109 ×

ABC Classification of Inventory
2 = 435
 9
The Strategist l MGT314 l Spring’20

Economic Order Quantity Analysi

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Lead Time Calculation

 11
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Quality Management Tools

To manufacture and sell best quality pens they use human for testing specially women. They believe
that women are flawless in their work. One line of a page is written by a group of women worker to
test whether the pen is usable or not. Ink fill is tested first then it is inserted in the pen body and
tested again. They insect each and every element of pen like cap, lower cap, body before moving
them to the next stage. Defective ones are recycled. Each step of production has an inspector.
Injection body inspector see whether the product cap/boy is appropriate, ink filling test ink
smoothness. Every work in process is inspected before assembling and making the final product.
Quality Certificates: BSTI, Occupational Health and Safety Assessment Series.
 Activity Type of Failure Cost

Reproduce until the pen becomes usable Internal

Replace the pen and apologize to customer External

if they sell a defective pen to a customer

Training of employees on Quality Prevention

Pareto Chart
Day Thick Damag Damag
Ink ed Nip ed
Check Sheet 50
Parts 40
Problems
Monday //// /// // 20
30

POWE
SHORTAGE
BROKEN
MACHINE
LAZY
WORKER
LOW
QUALITY
MATERIAL

Figure 6: Pareto Chart

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The Strategist l MGT314 l Spring’20
 Quality Inspection and Control

ACI is a really big manufacturer with mega factories they’re quite capable of maintaining
proper TQM approach. This approach will help them to maintain top notch quality and
continuous improvements on all level. Also, Following ISO 9000 standards will ensure
customer satisfaction with efficient production operation with near to perfection quality
standard. It will increase productivity along with cutting down unnecessary costs. Moreover,
tracking improvements and scope of improvements will help to identify issues in a fastest
possible time and take corrective actions to resolve. Repetitive feedbacking will also be
possible by utilizing this.

Figure: Quality Control Strategies

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The Strategist l MGT314 l Spring’20

Supply Chain Management

Raw materials like is imported from India, and Germany (Air Logistics Function). They are
stored in the factory warehouse and then used when needed (Warehousing). After
manufacturing, then sent their pens to sales center using Trucks, Ship, and Pathao Delivery
(3PL Logistics). Matador appreciates return of used or damaged items from customer
(Reverse Logistics). Their factory is located in the heart of Dhaka. So, Imports come to the
factory within hours and even they can sent their products to all over Dhaka within hours
using their own trucks. Having factory in Dhaka also reduces their lead time and inventory
cost. There is no single day when a customer see stock out of Matador pen. Matador product
are also available in Daraz.com.bd for online customers. Company also contact and send
orders to their suppliers using email. Matador wood pen production started customer
demanded wood pen with lowest price. This information flow through seller, distributor,
Manufacturer.

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The Strategist l MGT314 l Spring’20

Procurement Process
Bullwhip Effect
There might be a bullwhip effect after Covid-19 lockdown is over. For example, people will
start going out and as a result they’ll need to use sanitizers or soaps more frequently than
home. As a result, retailers might overestimate the customer demand. They might estimate
the demand
for 1000
units
whereas
actual
market
demand is
800 units
and this

overestimation of
demand will affect the
product flow through the
whole supply chain and
ultimately, mislead the
company towards
purchasing raw materials
and producing goods.

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The Strategist l MGT314 l Spring’20
Lean Manufacturing

House of Ahmed production unit ensures optimized use of resources for maximizing waste
elimination and efficient production operation.

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Operational Problems & Recommendations

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References

Town, N. (2020). House of Ahmed: the new face of luxury ethnic couture in Bangladesh.
Retrieved 11 May 2020, from https://www.thedailystar.net/lifestyle/new town/news/house-
ahmed-the-newface-luxury-ethnic-couture-bangladesh-1726297

Garment Manufacturing Process - A Process of Providing Output As Finished Products.

(2020). Retrieved 11 May 2020, from https://www.textileinfomedia.com/blog/garment
manufacturingprocess-a-process-of-providing-output-as-finished-products/
 18
The Strategist l MGT314 l Spring’20

A
PPENDIX

Process Map
 Process -Map of House of Ahmed

Organizational Breakdown Structure

Chairman

Board of

Directors

Managing Director
G.M Director

Production G.M. (F & A)

DGM - Sales Depot In Distribution
charge(s)
G.M. - Distribution
Officers /
Assistant.
Sales Manager
Officers
Director
(Commercial)

DGM - M. (Adm.)
Marketing
(Marketing)

Manager
G.M.-Marketing

Divisional Manager Sales Operation Manager Regional /Area Sales Manager

Risk Management Strategy

 ii

Information Collected from Annual Report 2018 and 2019

Productivity Math

iii
iv
 Capacity
Analysis

Break Even
Calculation
 vi

Economic Order
Quantity
 vii

Picture1: Coloring the cloths

Picture2: Iron machine

viii
Picture3: Design Paper

ix
Picture4: Fabric Design

x
 Picture5: Machine of Printing

Picture6: Machine of Drying

xi
Picture7: Cloths are preparing for further process

Picture8: Cleaning Machine

xii
 Picture9: Caustic Soda

Picture10: Ironing Raw Materials

xiii
Picture11: Raw Materials

xiv
 Picture12: Colored

Cloths

xv