SMEDA-Industry Support Program
Application of Lean Production
Case Study from Garment Sector of Pakistan
28 March, 2011
Presenters:
Mr. Haider Sagheer
Mr. Qasar Wasique Ahmed
Dr. Nabeel Amin
Background of the Project
 Labor intensive
 Huge variety of products with small quantity orders
 Inefficient production systems
 High need of flexibility
 Large employment Opportunities and increased share in export
market
Evaluation Phase
1.
2.
3.
4.
5.
6.
House Keeping
Factory Current Efficiency Level
Factory Current Defect Rate
Material Handling
Space Utilization
Style Change Over Analysis
1- House Keeping-before
House Keeping-before
House Keeping-before
2. Factory Efficiency
Following were the major steps taken for calculating factory current
efficiency level:
1. SAM Calculation of major products
2. Calculation of Over time
3. Data Collection from Bundle induction to sewing lines
4.
5.
Data Collection of finished Bundles
Idle Time Calculations
2. Factory Efficiency
22%
3. Defect Rate
 Data collection by introducing appropriate format's.
 Data collection at end line and finishing stage.
 Appointed end line checkers.
 After collection of data for one month an average of
defect rate was observed.
35-40%
Inspection Sheet Finishing
4. Material Flow Analysis
840 Ft
Target Setting Phase
Following Key Performance Indicators were defined as project
target metrics:
1. Efficiency
2. Defect Rate
3. Material Handling
4. Space Utilization
5. Throughput Time
6. Cost/Pc
Implementation Phase







Implementing 5S/Visual Control Systems across the Factory
Implementation of IE functions
Conducting Style Change Over Analysis by SMED (Reducing
throughput time)
Running of Sewing Line at target efficiency level
Implementing Hourly Based Quality Monitoring System
Implementing SQC techniques
Introducing Incentive System for Quality Control
5S
Before
After
5S in Store
Before
After
 Savings of
machinery
135,000 PKR by sale of obsolete
Assignment Sheet
Standard Allowed Minutes (SAM)- Gundo CT Short
Critical path Analysis- Gundo CT Short
Pkt bag OL

Frnt rise OL, Back
yokes OL
Frnt rise att, Back
Yoke Att
Pkt bag att, Pkt TS
CP Time = 9.63, SM = 1.31
Frnt rise TS, Back
yokes TS
Back Rise OL
Bk yoke edge
OL
Side seam OL
O/L time = 1.31
Back rise att, Piping
making
Back rise TS, Piping att to bk
yokes, Back yokes att to back
body
Side seam att & lbl
att
Button hole
Bartack 4
pts
Inseam att
In seam OL
W.B TS
W.B elastic mkg, Side label
att, Elastic att at W.B, Main
label att
Bottom hem
Store Room
Style Change Analysis (Model Line)
Bundle Size: 15,
Date:13/5/10,
Style: Short
Time: 10:30
Activities to introduce Flexible Production Line
 Reduction of Bundle Size
 Hourly Basis Monitoring System
 Advance Cutting in Shelves
 Implementation of Checklist for Accessories
 Layout – Shifting of Special Machines
 Selection Criteria of Operators, Payments, Disciplinary Issues,
Improved Material flow
328 Ft
Overhead cost Comparison (for 17 no of machines for
one month)
Before
After (Model hall)
Items
Description
Items
Description
Overhead Cost per Month for
170 machines
1,000,000
Overhead Cost per Month
1,000,000
Overhead Cost per Month for 17
machines
100,000
Overhead Cost per Month for 17 machines
100,000
No. of pcs/day produced @22%
225
No. of pcs/day produced @32%
325
No. of Pcs per mth @22%
5625
No. of Pcs per mth @32%
8125
overhead Cost/pc per mth
@22%
18
overhead Cost/pc per mth @32%
12.31
OH cost Difference per piece = 18-12.31 = 5.47
OH Cost Savings = 5.47*8125 = Rs. 44, 443
Quality Control System


Introduced Hourly Basis Reports
End Line
Finishing
Check Sheets – Major Defects
ISSUES:
Reports could not be properly filled due to large buddle size
Operators were not submitting small bundles on time
Low DHU is Key Factor for running model line, therefore immediate action
must be taken to properly fill the Q.C Reports
Introducing Incentive System
Defect Rate
Monthly Defect Rate
40.00
Before
Before
35.00
After
30.00
DR reduces Upto 5%
Defect Rate %
25.00
20.00
After
DR %
Trgt DR%
15.00
10.00
5.00
0.00
May,2010
June,2010
July,2010
August,2010
September,2010
Month
October,2010
November,2010 December,2010
Cost Savings Through Defect Rate Reduction
 Avg. Production per Month = 60, 000 Pcs
 DR Before =30%, Rework in Nos = 18000 pcs
 DR After = 5%, Rework in Nos = 3000 pcs
 Rework Difference = 18000 – 3000 = 15000 pcs
 Avg. Operation Time =0.5 min
 Total time = 15000*0.5=7500 min
 Total time consumed in RW is 7* times of the operation 1st time performed.
 Total time saved= 7500 * 7 = 52500 min
 Avg. SAM per pc = 12 min
*According to KSA study this factor ranges from 7 to 14 times of the operation 1 st time performed.
Cost Savings Through Defect Rate Reduction

No. of pcs that can be produced = 52500/12*32 = 1400pcs

Avg. Profit per pc @15% (FOB=Rs.425) = Rs. 64

Cost saving in RW/mth@15% per Mth = 1400 * 64
= Rs. 89,600

Projected saving by sustaining the RW @5%over one year = 89,600*12
= Rs. 10,75,200
Cost Savings Through Defect Rate Reduction
(Inspection Cost)





Salary per month(25 working days) = Rs. 7000
Per day income (salary)=7000/25 = Rs. 280
Avg. pcs inspected per day per Inspector=250
No of days needed by one inspector=15000/250=60 days
Savings/Month By Reducing Inspection = 60*280
= Rs. 16800

Projected Saving over one year through Inspection
= 16800*12 = 201,600
Total Savings Per Month
Cost Savings by
Reducing DR/month + Cost Savings By Reducing Inspection
= Rs. 89600 + Rs. 16800
= Rs. 106400
Results
Sr.
No
KPI
Before
After
Percentage
improvement
1
Efficiency
22%
32%
45%
2
Defect Rate
35%
5%
85 %
3
Material Handling
840 ft
328 ft
61%
4
Space Utilization
0 sq ft
1254 sq ft
100%
5
Through Put Time
3 days
1 day
66%
6
Cost per piece
18 Rs
12.31 Rs
31%