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TABLE OF CONTENTS
1.0 CURRENT SCENARIO................................................................................................................................ 1 2.0 INTRODUCTION TO AL-KARAM TEXTILES ................................................................................................ 1 3.0 LITERATURE REVIEW ............................................................................................................................... 2 3.1 Export problems for SMEs in Pakistan ............................................................................................... 2 3.2 Determinants of Export....................................................................................................................... 2 3.3 Internationalization Barriers ............................................................................................................... 3 3.4 Export support to SMEs owners ........................................................................................................ 4 3.5 Market study of EU textile industry to identify the trade barriers ..................................................... 4 4.0 EXTERNAL BARRIERS FOR AL-KARAM TEXTILES ...................................................................................... 5 4.1 COST OF RAW MATERIAL .................................................................................................................... 5 4.2 ENERGY CRISIS..................................................................................................................................... 6 4.3 GOVERNMENT SUPPORT & FDI........................................................................................................... 6 5.0 INTERNAL BARRIERS FOR AL-KARAM TEXTILES ...................................................................................... 7 5.1 OPERATIONAL EFFICIENCY .................................................................................................................. 7 5.2 COST OF PRODUCTION........................................................................................................................ 9 5.3 TECHNOLOGICAL CHALLENGES ......................................................................................................... 10 6.0 CONCLUSION ......................................................................................................................................... 10 7.0 REFERENCES .......................................................................................................................................... 10
TABLE OF FIGURES
Figure 1: Supply Chain of Al-Karam Textiles ................................................................................................. 1 Figure 2: Fluctuation in Cotton prices in the recent past .............................................................................. 5 Figure 3: Supply and Demand for Electricity ................................................................................................. 6 Figure 4: Current process of Accessories Procurement System..................................................................... 7 Figure 5: Proposed process for Accessories Procurement System ................................................................ 8 Figure 6: Comparison of current and proposed process ............................................................................... 9
SPINNING
WEAVING
WET PROCESSING
SHIPPED TO CUSTOMER
Al-Karam textile is renowned for its high quality distinguished products with timely shipments to its customers. But due to the fact that the overall textile industry is facing tough challenges, these impacts have also jolted Al-Karam badly. And to add salt on the wounds, their internal operational activities have also contributed to the drastic results in the recent past. This report will highlight some of the major issues (both internal and external) faced by Al-Karam textiles.
competitive edge in the overseas market. Other R&D related factors have to be taken into consideration. One of the factors includes the investment in the human capital in terms of highly qualified technical personnel. Other factors include; R&D strategies, collaboration with the external parties and the use of different sources of information for R&D related activities. Whenever it comes to managing business in the foreign market, cultural issues, regulation issue, organizational capabilities, managerial competence and other different factors are taken into account. Technological issues are hardly discussed. This paper explores the impact of technology related issues on the export performance of the firms. Having a technological edge or product is an important part of export success. The behavior of how the SMEs operate in the foreign market depends on the intensity of the technological driven competition. The export performance of the firms not only depends on the technology, but also, how efficiently the firms use technology in bringing innovative products. A clear R&D approach and access to key technological information are also crucial.
The methodology that researcher had chosen is to collect information from the European market, and to gather some information from the third world countries as well, and then he did analysis on the basis of gathered information. Researcher then did research country by country.
Researcher researched on more than 24 countries which actually are the exporters of textile goods and material. He also did research on Pakistans Textile Industry, in which he found out some facts that are followed. Pakistan is fourth largest exporter of textile goods and raw material in the world. Pakistan has high quality cotton and other material. Pakistan produces high quality products which actually the European market and USA demand, but the negative aspect is that Pakistan is facing problems in export because of the tariff on export and the increasing prices of goods, so thats why Pakistan is lacking in its export area. However, as far as resources and competency is concerned, Pakistans textile industry is no behind its immediate competition.
Delivery Challan
Goods Delivery
STEP 6
STEP 7
PURCHASE MANAGER
ACCOUNTS DEPARTMENT
Problems in the current process: Lingering Process due to which a lot of time is wasted; around 100 minutes. A Lot of Non Value Added work is done (Step # 4,5,6 and 7) No record of previously ordered accessories which are left unused with the store No tracking of the new orders; whether they are received at store or not
STEP 8
STEP 2 Payment
After the examination of current process, it was compared with the famous case study of the inventory management by Toyota Company; this gave a better designed and structured process for AKTM with the desired objectives as: Reduction in time to make purchase orders and invoices Removal of non value added activities Traceability of the goods received and issued Record for all balance goods held with store
PURCHASE MANAGER
STEP 1
SUPPLIERS
Payment
STEP 6
STEP 3
STEP 2
STEP 3
STORE
ONLINE SYSTEM
ACCOUNTS DEPARTMENT
STEP 4
Advantages and Impacts of the proposed system: Elimination of non value added activities from the shoulders of Merchandiser Reduction in time from generation of purchase orders to submission of invoices for payment Proper record and traceability of the ordered goods and balances being held at store
Since the system is now online, proper tracking of goods will be maintained by linking up the PO generation and goods receipt at store in the online system
After thorough discussion with different head of departments it was concluded that to overcome these issues we need to take immediate action on the following: Stringent quality parameters and ensure that these are followed at every step Creating and maintaining SOPs for different operations Bulk buying to access the volume discounts and where possible procure on cash for a discounted price Minimize overheads by eradicating unnecessary overtime and running economy drive A team need to be formulated that help in forecasting through in-depth data analysis and help in efficient capacity utilization
6.0 CONCLUSION
Pakistans textile industry is going through one of the toughest periods in decades. The global recession which has hit the global textile really hard is not the only cause for concern. Serious internal issues also affected Pakistans textile industry very badly. The high cost of production resulting from an instant rise in the energy costs has been the primary cause of concern for the industry. Pakistan's textile exports in turn have gone down during last three years as exporters cannot effectively market their produce since buyers are not visiting Pakistan due to adverse travel conditions and it is getting more and more difficult for the exporters to travel abroad. Pakistans textile industry is lacking in research & development (R & D).The production capability is very low due to obsolete machinery & technology. Pakistan is facing high cost of production due to several factors like the hike in electricity tariff, the increase in interest rate, energy crisis, devaluation of Pakistani rupee, increasing cost of inputs, political instability, removal of subsidy & internal dispute. The global recession also hit badly the textile industry.
7.0 REFERENCES
Laderman, D. & Rubinao, E. & Olarreaga, M., 2008, Trade Specialization in Latin America: The impact of China and India, Kiel Institute Research, vol. 10, pp. 1-146. Spence, M., 2003, Evaluating Export Promotion Programs, Small Business Economics Journal, vol. 20, no. 4, pp. 83-103. Fischer, E. & Reuber, A., 2003, Targeting Export Support to SMEs Owners International Experience as a Segmentation Basis, Small Business Economics Journal, vol. 20, no. 4, pp. 69-82. Pinho, Jose C. & Martins, L., 2010, Exporting Barriers: Inside from Portuguese Small-and Medium-Sized Exporters and Non-exporters, Journal of International Entrepreneurship, vol. 8, pp. 254-272. Bernard, A. & Wagner, J., 1997, Export and Success in German Manufacturing, Weltwirtschaftliches Archive, vol. 133.
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