CREATING HIGH PERFORMANCE COMPANIES

BEST PRACTICES | QUALITY CONCIOUSNESS Achieving 85% 1st time Correct Yield from Stitching Lines

Document Summary: This document describes the best practices introduced on production floor (In house 1) of PEE EMPRO Exports Pvt. Ltd with an aim to increase the 1st time correct yield percentage. Using these best practices, the 1st time yield increased from 50% to 85% in a span of 75 working days. Page | 1

Major infrastructural changes include On Line Finishing System and RFID system on the stitching lines.

INDEX:

List of Best Practices: 1. 2. 3. 4. 5. 6. 7. 8.

Understanding three aspects of quality driven work Style Change-Over Healthy Habits DHU Planning & Target Setting Daily Line Performance Records Re-work Planning & Policy Labor Counseling Weekly Incentives | Operator of the Week Role of QA, QC & Quality In-charge

Implementation Strategy 1. Is State Mapping : Situational Judgment Tests 2. Goal Setting for Quality Growth & Performance Tracking 3. Management Quality Audits

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Understanding Three Aspects of Quality The concept of quality has been historically misunderstood in the Indian Business Landscape. It has gone through tremendous amount of changes in the past 10 years; companies now necessarily have to be client centric to survive the competition. Customers have been spoilt. Leading organizations across the globe delight their customers with Around the Clock Availability, Real Time Fulfillment, Personalized Treatment, Global Consistency & Zero Defects. Others have to match these benchmarks, the sooner the better. At PEE EMPRO, one of the leading Garment Exporters based in Faridabad, Quality was understood in terms of garment features as per the client requirements. The definition of quality was strengthened in the pilot area to include three aspects of client demands:  What the client wants? (Features)  When and Where the Client wants the product? ( Timeliness)  At the price the customer wants to purchase the product! (Cost) Quality is now understood in terms of excellence across all three aspects. Being client centric essentially requires a company to fulfill the constantly changing demands of the customers at all times. No longer do Indian companies get order because of their history of long service to their clients but their organization’s current work culture, vision & future ambitions. The people on floor now understand that being quality driven means producing correct pieces on time and at the expected price. Because the definition of quality went through a change, how quality is to be achieved during work also changed. On the floor, earlier there were three separate teams with their individual goals:  Production Team: Output on time (Timeliness)  Industrial Engineering Team: Achieving Efficiency (Cost)  Quality Department: Correct Features Page | 3

Earlier, it was the sole responsibility of the Quality Team to ensure the “limited understanding of Quality” on floor. The other two teams were convinced that they are as much responsible for quality as is the Quality Department. In order to make PEE EMPRO a client centric organization, all the three aspects of quality has to be ensured, which in turn requires all three teams to work in tandem. Today in In house 1 at PEE EMPRO, Quality has become everyone’s responsibility. Quality work is now accomplished when production lots are packed on time, with no feature defects and at minimal incurred price. Now the sole goal of all teams present on the floor is to contribute towards quality. Earlier the three teams felt that their goals were contradictory and there was a lot of friction involved in decision making process. The production people felt that to get products on time, if extra labor has to be employed, it should be while the Industrial Engineering team resisted it. The Quality team felt that if any labor is employed to check quality, it must be while the IE resisted it. However, once the three teams were explained that all of them had to work together & optimize results across all three aspects of quality, did the teams become tolerant towards the view of each other. Decision Making smoothened & improvements became agile & more frequent. Teams started discussing how they ensure their part of quality without hampering the aspects other teams were caring for. From being a floor where three teams were indifferent towards each other’s goals, it became a floor where each team understood the limitations along which they had to work. The floor now has a mission, to ensure quality. As every mission has a leader, the floor’s mission too had a quality leader. The existing job functions/roles on the floor were: 1. Production Team: Production Head, Floor Production In charge & Line Supervisors 2. Quality Team: Floor Quality Head, Floor QA, Line QC 3. Industrial Engineering Team: Senior Engineer

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The three heads had their own teams, seemingly workingly on contrasting or contradicting goals. The new way of work had four key roles: 1. Quality Head/Client Concern: The production manager in the earlier hierarchy took up this role. He is now responsible for all quality concerns, timeliness, zero defects & optimal cost. This quality head has now 3 key teams to support his task to make PEE EMPRO a client centric organization. 2. Features Head: The Floor Quality head in the last hierarchy took up this role. He must ensure that each garment has proper features and style to delight the customer. 3. Cost Head: The Senior Industrial Head was a natural fit for this role. 4. Timeliness Head: The Floor Production In charge and the Line Production Supervisors are now responsible for timeliness aspect of quality. The three In charges have to work in tandem with the Client Concern Head to ensure quality is delivered in every garment. The Client Concern head would ensure that three teams work in coordination and harmony. Quality is now everyone’s goal. The mindset change which came after proper understanding of quality created a sense of teamwork with regards for the goals of other team members. It has set the cornerstone for all proposed improvements, transforming the work culture to eliminate think-less doing & promote strategic execution.

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STYLE CHANGEOVER & ITS CHALLENGES

Style Changeover is a major challenge at PEE EMPRO. Akin to the automobile industry, where Single Minute Exchange of Die helped companies reduce changeover times from days to less than 10 minutes, the apparel manufacturers need to quickly change production lines from one garment to the other. At PEE EMPRO, whenever a style changeover takes place, a learning curve of 7 days is allowed to the operators to get acquainted to the nitty-gritty of the new product. The line is expected to reach its peak performance on the 8th day. In the span of 75 days of the pilot phase, 3 style changeovers were closely observed to find areas of improvement. Key observations were:  There is little planning around which tailors are most suited for the operations in the new style  There is no time frame target around when the line setting should begin and when should it end  There is little attempt to finalize all quality defects and challenges related to cutting & fabric before mass production begins  Out of the many operations that have to be set, there is no defined responsibility for setting of each operation on any particular person  There is little consensus built between IE, Quality department and production supervisors on how the line is to be set  Often on the days of line setting, a lot of time is spent idle, tailors can be seen sitting idle  There is no planning around how the finishing of products would take place once the line is operational. The monthly targets do not specify tasks around finishing operation  There is no cost specific planning as there are no targets given around cost control. Suggested Changes & Implementation Status: Page | 6

 A preliminary skill matrix was developed for In-house 1. Based on this skill matrix, now the IE team prepares a rough sketch of how the line would look, with specific position for all tailors. This has been implemented on two styles. In both these cases, it has been observed that only 75% accuracy was achieved as per the plan as in between the line setting tailors either took a leave or could not adjust to that operation. Also, due to high attrition, the skill matrix must be updated every month, else it becomes redundant.  It was recommended that the Production Supervisor define time bound targets for setting up of line so that the learning curve begins as soon as possible. However, operation specific time target setting has still not begun. Albeit, the production supervisor now provides a deadline for the 1 st output and maintains a level of urgency in monitoring it.  PPM meetings are held in the quality department to highlight the buyer concerns around quality. There is no practice of actually producing some sample pieces on floor before the PPM meeting, so that the supervisors are more engaged in that discussion. It was suggested to the Production Manager to produce a few pieces as per the sample given, to understand the quality challenges better. However, this pre-production activity has not taken place. The production supervisor though agreed to produce samples before the beginning of line setting, which helped him start the line with limited DHU level. Before this practice, it was observed that almost all of 1st 100 pieces were always reworked and the initial starting DHU was touching 100  The planning department doesn’t provide with any schedule regarding when the stitched garments would be finished, not any plan that the production manager is made aware of. As a result, lack of proper planning means that there is often a lot of inventory after stitching waiting for finishing. Supply Chain Planning must be strengthened to include collective planning of stitching and finishing. The stitching lines will also have then more responsibility to feed the finishing, thus making the on line finishing more effective. This would also help offline finishing as the garment could be planned to spend less time waiting, reducing chances of catching higher DHU  Cost wise targets are not set for the production floor. The planning department must provide cost targets to the IE team on floor. This will Page | 7

benefit in several ways. First, there would be cost centricity on floor’s activities. Today, there is no tracking around cost incurred in any style’s production. Secondly, it would boost the responsibility and authority of IE on floor. It would add value to the suggestions that IE gives on floor for more effective line organization as they will be backed by cost factors. As of the current practices, the IE team has no strategic goal on production floor. They play support functions for output and quality control. Giving cost targets will ensure that the IE works towards process improvements on a daily basis, thus creating a team of lean champions rather than just industrial engineers who are performing daily & style wise accounting tasks.

DHU Planning & Target Setting

“To Measure Is to Know”

Pre-Production Meetings are held to highlight the buyer’s concerns around quality of garments before mass production starts. During this meeting, DHU targets must be given to the floor managers. In absence of targets, there is little urgency around ensuring 1st time correct piece right from day 1 of production. The targets must be challenging to achieve & must evolve over time to keep the motivation higher. One possible way of target setting, used during pilot on In House 1 is described below

Output Quantity

DHU (only Stitching)

1st 200 Pieces 200-700 700-1200 1200-1700 1700-2700 2700-4000

20 15 10 10 7.5 7.5

No. of Stitching Faults at Finishing Stations 40 75 50 50 75 75 Page | 8

4000+

5

50 every 1000 garments

This essentially means that for the 1st 4000 garments a total of 365 defects would be found at finishing stations, a cumulative average of 10 DHU for the 1st 4000 garments. This target must be modified with time to make it more challenging. One of key roles around DHU control is that of end line QC & Line QA. It must be made mandatory that the production manager make sure that there is no change in personnel deployed as QC/QA during any style. The QA must also act as auditor for the work of QC to ensure that there is no slackness in his work. At In-house 1, the QA audits 10% sample of every lot that is dispatched to the finishing for any quality defects and uncut threads. Only when he finds no errors in the audit sample, the lot is passed.

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