Case Studies: service sector vs. manufacturing

2. Manufacture: Sleeves Ltd* - a garment factory

(Source: T Uthayakumar, Sri Lanka Standards Institution)

An audit team carried out audit in a reputed garment factory exporting high-end fashion ladies garments to the US. Though the company boasts a staff relatively highly trained and experienced in the stitching process, the defects are high at the initial stages of stitching of newly designed garments. Consequently, the company’s efficiency is low. The company wanted to improve its efficiency while reducing defects/rework in order to gain competitive advantage in the target market, thus ensuring customer satisfaction related to quality and price.

During the factory visit the audit team observed that there were high defects and rework in the stitching processes. Once the factory visit was over, the top management team was interviewed. The CEO said that though employees were competent, they were not concentrating on their work. He felt that the increase in defects and decrease in efficiency was the result of this lack of concentration of employees.

An auditor in the audit team was of the opinion that the process owners in the stitching processes were not aware of the process approach of verifying the quality of input they were receiving and verifying the quality of the output they are delivering.

The auditor selected a sample from line one in the stitching processes and enquired about it to ‘P’, the initial process owner. The answer reflected the fact that P understood the requirements of immediate supplier, ‘S’, and delivery requirements of immediate customer, ‘Q’. Similarly, other process owners could also verify the requirements of immediate customer and supplier.

The garment requirements that needed verification were not given in the form of a checklist, however the auditor noted that the garments were returned to the process owner to rework when they didn’t fulfill the requirements the final process owner, ‘D’, or the immediate customer.

Questions

1. Why is P sent the rework garments, even though she fulfills the requirements of immediate customer and supplier?

2. How can the rework in the processes be reduced and efficiency be improved?

3. What is the best way to organize activities to improve efficiency?

4. What is the lesson learned from this case?

Answers

1. Even though P fulfils the requirements of Q and S, P does not identify the requirements of D and fails to fulfil D’s requirements. Therefore, the garments, which are not suitable to be worked on, are returned.

2. To reduce the rework and improve efficiency, the interaction of customer processes within the line should be identified. In this case, the initial process owner, ‘P’, interacts with both the customer, ‘Q’, and the final process owner, ‘D’. Customer interaction in the chain of supply should also be considered when verifying the delivery after processing. This concept should be applied throughout the process line to reduce the rework and improve the efficiency.

3. The company is focusing on high fashion ladies garments. Fashion designs change frequently. The interaction of customer processes and the requirements of customers vary as designs change over time. When the company gets new designs it has to identify the processes and requirements to be verified by the final process owner to the initial process owner in the stitching line. Then, supplier and delivery requirements can be more easily identified. Following this, work instructions have to be designed with checklists for verification of such supplier and delivery requirements.

4. This case reveals that the customer chain has to be managed with identification of the interaction of customer processes and supplier/delivery requirements should be verified by the process owner, in order to reduce the defects or rework and improve the efficiency of the process line.

There are similar as well as different auditing approaches/techniques with a service company as well as manufacturing.