Project on Operation Management of Accenture Footwear

& Leather Products Ltd.

Course: MGT314
Section: 14
Semester: Spring 2019

Submitted to,
Wasif Sayed Choudhury
Lecturer
Department of Management
North South University

Submitted By,

Group – The Generals

Group Members ID.
Nusrat Sadia 1330066030
Syed Mahmood Tanim Partho 1611818630
Asif Iqbal 1711604630
Mahadi Hassan Munna 1711621630

Meraj Jahan 1712816630

 Executive Summary
The government of Bangladesh has identified the leather industry as an important sector in
Bangladesh which has potential growth and the capacity to attract foreign investment. It is
ranked fifth in the export sector. Currently Bangladesh produces and exports quality leather
goods. The entire leather sector meets only 0.5% of the world's leather trade worth US$75
billion. As the demand for leather products are increasing, the industry is expected to have an
emerging future. There are about 113 tanneries in Bangladesh that produce 180 million
square feet of hides and skins per year.

Accenture Footwear & Leather Products Ltd (AFLPL) manufactures high quality leather
goods. It is a company that produces export quality products. They export their high quality
products in different countries all around the world. This project contains an overview of how
the manufacturing processes and operation management of AFLPL takes place.

AFLPL always tries to innovate ideas and implement new technologies as a result they make
themselves capable of producing trendy and durable products. Their operation management
systems are done in such a way that they face no complaints from the clients. They follow
some strict rules for producing the products with export quality.

They have a five storied factory at West Hazaribagh, Dhaka where they complete all the
procedures of producing the finished goods. AFLPL has an effective supply chain process.
They always try to follow the term „strategic sourcing‟. The processes are designed in such a
way that they reduce waste and try to minimize non value-added work. They believe in Just-
in-time philosophy. AFLPL reduces waste by minimizing inventory amount and production
amount. Their forecasting techniques largely depend on the buyers, as the buyers first
identify the demand and then place the orders. But they use some forecasting techniques for
some specific buyers. As they produce export quality products, they put much emphasis on
quality management. AFLPL have their own lab, where they do research for continuous
development.

AFLPL has maintained goodwill by following some principles and producing durable &
trendy products, but there are some recommendations we suggested, that will help AFLPL to
improve in a greater extend.
 Table of Content

INDUSTRY ANALYSIS ...................................................................................................................................... 1

PORTER‟S FIVE FORCES:................................................................................................................................... 1

COMPANY PROFILE ........................................................................................................................................ 2

FACILITY LAYOUT .......................................................................................................................................... 3

SUPPLY CHAIN MANAGEMENT ....................................................................................................................... 6

SUPPLY-CHAIN PROCESS: ................................................................................................................................... 6

BULLWHIP EFFECT: ............................................................................................................................................. 7
SUPPLIER RELATIONSHIP BASED ON KRALJIC MATRIX: ..................................................................................... 8
SUPPLIER RELATIONSHIP BASED ON SAKO TRUST MODEL: ................................................................................ 9
............................................................................................................................................................................ 9
EFFECTIVENESS OF SUPPLY CHAIN PROCESS: ................................................................................................... 10

INVENTORY MANAGEMENT ......................................................................................................................... 12

STAGES OF INVENTORY MANAGEMENT ............................................................................................................ 12

INVENTORY COUNTING SYSTEM ....................................................................................................................... 13
INVENTORY MODELS ........................................................................................................................................ 13
THE TECHNIQUES USED BY AFLPL ................................................................................................................. 14
FORECASTING ACCURACY ................................................................................................................................ 15

QUALITY MANAGEMENT .............................................................................................................................. 16

THE PRINCIPLES THAT AFLPL FOLLOWS WHILE IMPLEMENTING TQM ............................................................ 17

PROBLEM SOLVING TECHNIQUES ...................................................................................................................... 17
AFLPL‟S QUALITY TOOLS CAUSE AND EFFECT DIAGRAM ............................................................................... 19
IDEA GENERATION PERIOD ............................................................................................................................... 19
PARETO ANALYSIS OF AFLP ............................................................................................................................ 19

CONCLUSION ............................................................................................................................................... 21

RECOMMENDATIONS ................................................................................................................................... 21

REFERENCES .................................................................................................................................................. 22
 Industry Analysis

In the 1970s, Leather Industry was developed on a large-scale as one of the largest industry of
Bangladesh. „Leather goods and footwear‟ is considered as one of the main growth generators for
the country by the government of Bangladesh. These products have huge demand on both domestic
and foreign markets and 10% of the world‟s leather market demand is met by Bangladesh.

According to the data of Export Promotion Bureau (EPB), leather industry is country‟s second
largest export-earning industry and it is observed that the earning is continuously decreasing.

PORTER‟s Five Forces:

1. Increased Competition
Recently, the demand for leather goods has grown tremendously as a result, the competition
in the industry is very high. With numerous and equally balanced luxury leather goods
manufacturers, the industry structure is an Oligopoly.
2. Potential for New Entrants
Large amount of capital is needed to enter in the industry which is creating barriers for the
new entrants to make an entry in the industry. Existence of top brands in the industry is also
an obstacle for the new entrants.
3. Power Of Suppliers
The supplier power within the industry is very strong due to the collection of basic raw hides
and skins.

Potential
Entrants

Suppliers Industry Buyers

Power Rivalry Power

Threats of
Substitutes

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 4. Power Of Buyers
As there remain abundant of competitors, the buyer can easily switch to the other
competitors which lead to strong bargaining power and buyer‟s power.
5. Threat Of Substitute Products
High presence of top brands and brand conscious customers, increase the threat of substitute
in the leather industry.

Company Profile

Accenture Footwear & Leather Products Ltd (AFLPL) manufactures high quality leather goods
by the use of genuine leather and polyurethane leather
workmanship and a combination of both. AFLPL serves
both the retailer and the consumer with great quality
products. With the group of motivated and experienced
staff, they are now serving its customers all around the
world. They are determined to gain customer satisfaction
both before and after sale.

Corporate office of AFLPL

Their mission statement is „We know what you need‟.
AFLPL mission it to provide innovated, durable and fashionable quality leathers and hand crafted
leather goods to its customers. With the guidance of fashion experts and designers from around the
world, they produce trendy goods to cope up with the current market and to meet the requirements
of the international brands. The company exports and supplies these products to different famous
brands of Bangladesh like Apex and to other different countries like, Asia and Europe. They also
work with some big retailers like, Inditex, Brandon, Ovs etc.

They have their corporate office in Zikatola, Dhaka, Bangladesh. The company have their own
factory located in an area of about 25,000sq. feet at West Hazaribagh, Dhaka, Bangladesh.
Currently, they have introduced their own Leather Finishing Lab which is maintained by highly
skilled and experienced leather engineers. The cooperative management and friendly environment
in AFLPL, keeps the employees satisfied and motivated.

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Infinity International, Minikin Ltd., Aiyub Brothers Tannery Ltd., Accenture Textile & Leather
Products (Australia) Pty Ltd. are the sister concerns of Accenture Footwear & Leather Products
Ltd.

AFLPL produces different types of leather and leather &

polyurethane goods. They produce both crushed and finished
leather. Crust leather, finished leather, suede leather, faux leather
/ PU leather etc are used to produce the products. As for goods
they produce; jackets, belts, wallets, travel bags, executive bags,
ladies purse, leather key holders, note book covers, jute Leather
combination leather bags, fabric Bags, Leather, PU, paper patch
Some AFLPL Products
and jackron.

Production Capacity:

 Workers: 150
 Foot wear : 600/650 pear per day
 Leather /PU patches : 40,000-60,000 pieces per day
 Gents and ladies bags : 400pieces per day

Facility Layout

As it is a manufacturer of belts, bags, shoes, and jackets, their main raw materials are leather, from
China or local company Ayub brothers. In first floor, of this manufacturing factory there is an
office, Rest room for guests, and pattern and design selection and raw materials store as well.

On the 2nd floor, workers cut the unnecessary leather to convert it into useable piece then they put
off that leather to basket. In process 3, the leathers are cut into many horizontal layers. Then those
pieces of leather are sent for tanning. This process converts the raw materials into stable raw
materials and made suitable for variety of end applications. Then this leather is sent to wringing to
out of water from the leather. Then again cutting the leather until the thickness is perfect. Then they
add color, apply fat for getting waterproof features and equipping it with other properties. Then this
leather is sent to the 3rd floor.

On the 3rd floor (adding featured leather) workers begin with another process named stretching. It
makes the leather much thinner and flatten out, and lose more water again from the leather. By
giving those leather to dying machine, it makes leather light and by doing this there will be no more
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water in the leather. Followed by embossing to create whatever pattern a company likes on the
surface, by using high pressure and temperature. Then those particular leathers are sent to the next
step which is laser cutting, this shaped leathers according to the final product. After doing this these
leathers sent to the checking zone to ensure that particular leather is perfect for onwards process.

And the last floor above on the accepted leather they printed their necessary things according to
their assigned design. After printing, the products are shaped according to the designs. For some
particular product this company need to use fabrics and by cutting it to proper shape they made is as
a useable product according to the production. The sole of any shoes are prepared in this process.
The upper portion of this shoe prepare is attached to the sole of the shoe. (16, 17, 18) process will
be accepted when this company producing shoe otherwise they will follow process 19 which
finishing basic products shape. Heeling is basically attached necessary things by glue or sewing.
After finishing basic product shape then they attached stickers according to the order after doing
that they attached other accessories like button, zipper etc. this process is known as a Treeing
process. After doing so, there is another unit which attaches the price tag of that particular product
on its body part. After completing the full task there is a three person‟s team who manually checked
the entire item to ensure that product is absolutely fine to deliver. Then these products are sent to
packing department for packaging and after packaging then store final goods for it, after producing
all units then they shift their products to buyer through transportation.

Implication of Toyota Production System

Principle 5: Heijunka

As the principle says, we should level out the work to eliminate overburden (Muri) to people and
equipment and reduce unevenness (Mura) in the production schedule. AFLPL also level out their
work. They have different workers for different sections.

Recommendation for Product Layout Facilities

As we can see, the manufacturing process of AFLPL is done in a five stored building, which is their
main factory building. But throughout this process there are high chances of making mistakes. As a
big company, they could have implemented the factory setup in a linear manner. Like they can set
all the manufacturing activities in a particular floor, this will help them reduce the number of faulty
finished products.

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 Facility Layout

Gate
Ground Floor (Extra room besides
the office)
Final Product Stock Room
Packaging Area
Raw Materials Collect
and stock
th
1 Floor

4th Floor
Manually Final
Tagging (21)
Products Checking
Room (22)

Finishing basic
Heeling Attach Sticker (20) Treeing (20)
product shape (19)
machine (18)
Lasting
Working Table
(17)

Stock Fitting Laser Cutting Sewing Printing zone above

(16) for shoe machine of fabrics Machine (14) the leather (13)
(15)

rd
Stretching 3 Floor
Working Table
Zone (8)

Laser
Embossing Checking zone (12)
(10) Cutting (11)
Dying Machine (9)

2nd Floor
Reviewing Quality of leather Put Leather on
Working Table
Bin 2
Adding
Cutting leather Collect leather &
character to
leather for use for good shape unnecessary
(7) (6) Wringing (5) Tanning Splitting 3 leather remove
(4) zone (1)

1st Floor

Pattern cutter and Work

Office Design Space of Office
Washroom
Design viewer office Table
room

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 Supply Chain Management

The supply chain management of Accenture Footwear & Leather Products Ltd (AFLPL) is a very
much effective one. It starts with sourcing of raw materials for production purpose and ends with
the delivery of finished goods to the buyer.

Supply-Chain Process:

Raw
Production
New orders Materials Delivery
process
Sourcing

Order from Buyer:

The process of supply chain begins with receiving the orders from a buyer. AFLPL is mainly order
driven company where buyers create the order for the production. AFLPL has some fixed clients
and all of them are mostly from European and Asian countries. They have been working with some
retailers all around the world such as Puma, Zara, Inditex, Branon, Ovsetc and they recently started
business with locally established renown company (Apex) are the main clients of AFLPL Group.
After receiving the order from clients, AFLPL Group starts all the steps for further processes after
collecting sample of that order.

Purchasing Raw Materials:

For sourcing Raw materials, AFLPL group follows a process known as “MODIFIED REBUY”, as
they need different kinds of raw material for different order. For every order from the buyers
AFLPL Group needs different kinds of zipper, dog hooks, lining, button, Leather and other
accessories according to the specific need of buyer. Leathers, Latex, Salva, inside fabric are the
Primary raw material for their production. Other raw materials are different types of accessories,
such as D ring, Button Rivet, Jacket Button, Thread, Elastic, Zipper, price tag, Hangtag etc. They
import about 95% of raw materials from china. Only a few raw materials are obtained locally from
Madina group, matador group and Ayub Brothers Tannery Ltd. Raw materials are collected
according to buyer‟s needs and requirements and buyers always mention about some specific buyer
or country for collecting raw materials for production. The raw materials are ordered via LC

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opening through NRB Commercial Bank on the condition that the payment will only be made after
the shipment is received or obtained in due quantity. If all the conditions are fulfilled, then the
payment is made through Banks. The shipment usually arrives through sea route at Chittagong port
from there the raw materials are taken to the factory‟s own warehouse by their own Ship and trucks.

Production Process:

As soon as the raw material collection is complete, the production process begins in the A block of
their factory, initially they go for
producing 4 to 5 units as an order sample.
If the buyer is satisfied and happy with
their work of the sample they made then
they go for bulk production. Buyer gives
instructions on what type of materials or
accessories to use. The production process
begins with providing raw materials to
laser cutting department for cutting the
leather. Continuous inspection and testing
Workers Working in AFLPL
is done to avoid defects, after making the
products the accessories are added the finishing department checks each product carefully. Finally
the process of production ends packaging by the AFLPL group as per buyer‟s requirement.

Distribution:

Shipment is done through Chittagong port when they send the products back to the port. They have
their own transportation vehicles including a numbers of trucks, pickups and ships for transporting
goods from their production facility to the Chittagong port. On an average it takes around 30 days.
The payment method is done through HSBC‟s and Asia Bank‟s (L/C) and they receive the money
through the banks.

Bullwhip effect:
In AFLPL production system face almost zero bullwhip effect as they don‟t need to store inventory
more than they required for producing a certain quantity. They do not store any extra inventory as
safety stock; they buy the raw materials after getting an order and receiving money from a buyer
and starts production. For emergency cases they collect any necessary materials from locally
renowned brand like matador.

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Supplier Relationship Based On Kraljic Matrix:

Leverage
1.Dying Machine Strategic
2.Splitting 1.Sewing Machine

High
Machine 2.Laser Cutting
Machine
Financial Risk

Routine
1.Leather Bottleneck
2.zipper 1.Dog hook
Low

3.General 2.D Ring

equipments

Low High

Supplier Risk

Leverage Items:

Dying machine and Splitting Machine (A splitting machine slices the thick leather into more or
equal two horizontal layers), these equipment used in AFLPL is relatively costly equipment for
AFLPL Group but there are numbers of supplier for this equipment.

Strategic Items:

For cutting, a machine known as Leather Laser cutting

Machine and another important machine known as juki
sewing machine is used in AFLPL .Both machine has the
both high supplier risk and high financial risk. The
present price of this machine is around 35-40 lakh taka.
As these machines are costly and also AFLPL has to buy
these equipment from some specific suppliers only. They
had to buy the machines from china. As every supplier is
not reliable enough AFLPL has a strategic relationship Workers Working in AFLPL

with them.

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Routine Products:

Main raw material, Leather and

General equipment such as, latex,
salva and tape for measurement
these things are under routine
products as these products are not
expensive and available.

Workers Working in AFLPL

Bottleneck:

Supplier risk for this industry is relatively lower because there are numbers of suppliers for both the
raw materials and machinery. As AFLPL Group doesn‟t feel any kind of scarcity of suppliers for
raw materials or equipment, they their number of bottleneck products is relatively lower. For bulk
amount of production there is 2-3 local supplier from whom they have to buy general products like
D.Ring, zip, Dog hook, etc.

Supplier Relationship Based On Sako Trust Model:

Sako Trust Model

In Sako Trust model, the most important relationship is maintained by AFLPL are with their
suppliers of Bottleneck products and Strategic products as high-risk is involved. So they are putting
importance on goodwill trust with the suppliers. As the leverage products have many suppliers but
financial risk is side by side very high, AFLPL is maintaining a moderate kind of relationship
through competence trust. And the routine products are easily available, and cost is also very low,
so maintaining short-term commitment or relationship is enough with those suppliers.

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Effectiveness of Supply Chain Process:
AFLPL has a successful and effective supply chain process. They always try to follow the term
„strategic sourcing‟. AFLPL Group collects raw materials and select processes to reduce waste and
try to minimize non value-added works like unnecessary movement of goods and workers within
their production system and facility and try to minimize cost with the help of strategic sourcing so
that they can maximize profit As they believe doing this will help them to sustain in the competitive
market in the long-run.

Plan:

AFLPL Group has a specific group of employees for managing and maintaining the raw materials
for production purpose and they plan about the resources and their capability following the specific
requirements from buyer.

Source:

After considering many issues like cost, distance, quality, they determine their supplier for sourcing
but in this case, supplier is mainly determined by the decision of Buyer. As production varies buyer
to buyer so their sourcing sometimes varies otherwise they try to keep sourcing from some
particular suppliers from whom they usually do sourcing.

Produce:

Just after sourcing, the manufacturing process in AFLPL Group is done step by step through a
blueprint or map where every kind of directions, design, requirements and steps are mentioned. All
the departments always co-operate with each other with a common goal of production of perfect
products and there is a team containing around 3 people to monitor the whole process physically.

Deliver:

From the very beginning AFLPL Group is doing business with some fixed and they also try to
maintain a relationship with some of their local suppliers. Main suppliers of AFLPL are from
foreign countries but in some uncertain situation AFLPL Group need to rely on the local supplier
for urgent delivery of raw materials. Sometimes they outsource some of their tasks to other
companies if amount of required production surpasses their capacity.

Manage Return:

After producing the whole unit, if there is any kind of mistakes done by AFLPL Group or defects in
products, they try to fix that problem, like change of any accessories like zipper or adding

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something extra etc. They have a continuous conversation group in „wechat‟, if they find any kind
of problem they take pictures and send it to the group so that every manager can see that problem
and then they arrange a meeting to solve it as soon as possible.

Implication of Toyota Production System

Principle 5: Jidoka:

This principle suggests building a culture of stopping to fix problems, to get quality right the first
time. If they find any problem they stop their production process on the spot to reduce time, reduce
wastage. They don‟t have any Andon system. As this process system is basically based on machine
but after completing every machine‟s task there is a team who manually checks few items randomly
of every department to make sure that the product is perfect.

Principle 12 (Genchi Genbutsu):

Go and see by yourself to thoroughly understand the situation AFLPL Group can follow principle
number 12 of TPS. If they face any kind of problem in overall supply chain in any point, they
should go to the spot after observing physically they take necessary actions.

Recommendation for Supply Chain Management

The supply chain of AFLPL is definitely a good one. AFLPL has purchasing power over its local
suppliers. So it can influence them to follow green supply chain standards. They can focus to
control number of defects and also control overproduction to reduce cost. According to their
manager they have only 150 defective products per thirty thousand outputs. They are still trying to
improve that number. They should arrange several supplier development programs to support their
suppliers. This will help them to maintain good relation with their suppliers. Finally we
recommend them to introduce Andon system as their target is to be a fully mechanized leather
goods factory.

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 Inventory Management

Accenture Footwear & Leather Products Ltd (AFLPL) is manufacturer of leather products.

Following the types of inventory types: Raw Material, Work in Process, Finished Goods.

Stages of Inventory Management

First stage: Raw materials (RM)

Accenture Footwear & Leather Products Ltd (AFLPL)

imports their raw materials from China. Main raw materials

for that firm are Latex, Leather and chemicals. Lead time to

order and collect those RM takes 15 to 20 days. The firm‟s

minimum target production is to produce 10,000 leather bags

and their maximum potential is to manufacture 25,000 leather Raw Material Inventory of AFLPL

bags.

Second stage: Work in Progress (WIP)

Accenture Footwear & Leather Products Ltd (AFLPL) uses basic

methods to manufacture leather bags. It starts from creating the

body of the bag the front, the back the sides and the bottom. To cut

out the parts the firm uses machines. Then the sections are stitched

together by hand, starting from sewing the front, back and then
Work in Process Inventory of AFLPL
sides to the bottom and then stitching all the parts together. Then

the straps of the bags are stitched or glued whichever is convenient according to the design and

type. The last part of handbag making process involves attaching all sorts of embellishments such as

patterns, beads, logos, clasps etc. with glue.

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Last stage of the inventory management: The Finished Goods
(FG)

Accenture Footwear & Leather Products Ltd (AFLPL) distributes

their products to retailers. Also the company is participating in
the global market by exporting their products to Europe. Total
cost of making leather bad varies from $5 to $65 depends on the
size and materials used to produce.
Finished Goods Inventory of AFLPL
Inventory Counting System
Accenture Footwear & Leather Products Ltd (AFLPL) follows Periodic counting system. From
ordering RM to producing FG the whole process takes roughly one month. So they order their RM a
month before they can move to WIP stage. We suggest they should follow Perpetual counting
system if they want to increase their level of production.

Inventory Models
Accenture Footwear & Leather Products Ltd (AFLPL) has both dependent demand and independent
demand. Dependent demands are the Raw Materials and Work in Progress. These demands are
dependent because they are needed to make a product. Independent demand is the finished product
that is ready to be sold.

Dependent Demand Independent Demand

RM: Latex, Leather and chemicals FG: Leather bags

Recommendation for Inventory Management

 For inventory processing Accenture Footwear & Leather Products Ltd (AFLPL) can use
“Pull Systems” to avoid over production (principle #3 of TPS). Minimise work in progress
(WIP) and inventory by stocking small amounts of each product and frequently restocking
based on what the customer actually takes away.

 The Firm can standardize their tasks which lead to continuous improvement
and employee empowerment (principle #6 of TPS). The foundation of continuous flow and
pull systems: Use stable, repeatable methods everywhere to maintain the predictability,
regular timing, and regular output of the processes. Standardise best practice to capture and
accumulate learning about a process. Allow creative and individual expression to improve
those standards. Then incorporate it into the new standard.

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  Use visual control so that no problems are hidden (principle #7 of TPS). Accenture
Footwear & Leather Products Ltd (AFLPL) can use visual control to improve process flow.
 Develop exceptional people and team (principle #8 of TPS). Accenture Footwear & Leather
Products Ltd (AFLPL) can use Cross Functional Teams (CFT) to improve quality,
productivity and flow by solving technical problems.

Forecasting
Forecasting the demand is an operation where a company predicts the forthcoming demand of their

manufactured products. This demand depend on some factors, factors like, past data, events, records

etc.

AFLPL generally do not use any forecasting techniques as the buyers place the order six month

beforehand after doing the proper forecasting. As a result, the forecasting of AFLPL depends

largely on the buyers. But for some specific buyer and for safety issues they use some forecasting

techniques which are controlled by the Merchandizing Manager. He handles all the methods of

forecasting by using various techniques.

The Techniques Used By AFLPL

 Judgemental Forecasting
The merchandizing manager uses this technique to forecast the demand by getting the opinions

of people. They take opinions of,

 Executives Opinion- The merchandizing manager takes opinions from CEO and other

manager for forecasting the future needs.

 Sales Opinion- Opinions from the sales team is also taking in order to estimate the

future need.

 Buyers Opinion- As AFLPL depends on the order placed by the buyers for predicting the

future need, the take opinion of the buyers and estimate the possible demand for the products.

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 Trend Analysis Forecasting
They use the time series analysis, through which they store the previous data using tally system

and forecast the future demand of the products. After finding the future demand they identify

the factors that might affect the possible future demand and focus on solving those factors. For

solving those factors they mainly create a group, the group then analyse and identify the

problems. Then the company provide enough resources to tackle those problems.

 Naïve Forecasting
They use the naïve forecasting for some specific buyers. There are some buyers who prefer to

buy some specific products as a consistency level. AFLPL use naïve forecasting for them. For

example, there are some buyers who buy the products depending on naïve forecasting, like if the

demand of current period was 5,500 bags, they assumes the demand for bags of the next period

will also be 5,500. So they also place order for more products for a next period.

Forecasting Accuracy

Forecast accuracy checking tool, like Mean Absolute Deviation (MAD), Mean Squared Error

(MSE) and Mean Absolute Percentage Error (MAPE) are used to find the Error that is, the

difference between the actual demand and the forecasted demand.

The buyers, usually predicts the demand before placing the orders. As a result, AFLPL depends on

the orders placed by the buyers for forecasting the future demand. The order placement by the

buyers is done 6 months before the product delivery time, which provides enough time for the

production of the products. So AFLPL do not implement any forecast accuracy. On a general basis,

they prefer Just in Time (JIT) technique rather than doing forecasting. They start their work after an

order is placed.

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Implication of Toyota Production System

Principle 4: Pull System

„Pull System‟ is an approach of just in time delivery system. That is when the order is placed they

initiate the production process. AFLPL does the same, which is when the buyers place the order

they start working on it. This help to reduce wastes like, over production and inventory.

Recommendation for Forecasting

AFLPL should strictly follow some forecasting techniques, as Bangladesh has an unstable political

environment, the situations can be changed anytime.

Quality Management

Quality may be defined as the extent or degree to which performance of a product or service
meets or exceeds customer expectations. For the Accenture footwear and leather products Ltd
(AFLPL), product quality is measured in respect of quality and standard of leathers, latex, Salva,
inside fabric etc. Due to the increased customer awareness and publication in the social media,
people are now more cautious about presenting themselves. To satisfy and to meet the very
demands of the final customers, AFLPL has divided its Quality management sector into 3
divisions, so that they come up with an efficient system to enhance quality of manufacturing, to
detect the errors and solve or rectify the problems.

1. Quality Management Tool-use of Total Quality Management (TQM)

2. Problem Solving Techniques.
 PDSA cycle
 Evaluating problems using tools
3. Idea Generation Period

TQM is the Management tool that the company uses to determine its quality. To handle a project
or to improve a certain process the goal is to build a standardized process with the help of Total
Quality Management.

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The Principles that AFLPL follows while implementing TQM

1) Determine Customer Wants Follow most recent designs, Focused

Groups, Interviews.

2) Designing products Comfort-wear, Fashionable, Top Notch

Quality

3) Doing things right the very first time Train employees well, quickly solve
Problems without hindering production line.

4) Continuous Improvement Better quality each time of providing service.

5) Top Management Involvement Top hierarchy managers have.

6) Employee Empowerment Meetings and interviews with other

employees regarding how to solve the
problems and improvement as well.

7) Knowledge of Tools Ensure that Employees are trained well of the

equipment they are using

8) Team Approach While Solving problem or coming up with a

new design, they take decisions as a team.

Problem Solving Techniques

While operating a company it is obvious that problems will occur, AFLPL deals with this entire
problem in an organized form with the help of a tool called PDSA cycle which involves Plan-Do-
Study-Act. This Problem solving approach includes taking into account current situation,
analysing it, generating solution ,implementing solution, evaluate results. To get a clear idea a case
is illustrated below-

Case 1- In 2015, the company faced a crisis as fire broke out in the warehouse of AFLPL, at fifth
floor. Luckily nobody was injured but there was a loss of some stored inventory in
warehouse. The extent of loss was estimated to be 2 lakhs Taka. For overcoming the company‟s
problem, AFLPL took control of the whole post fire breaking situation by building up a system.

Plan- Firstly they took into account what the current situation was, analyzed the problem and came
up with the solution on how to prevent it. And finally They found out the reason for the fire
break out, planned to claim insurance policy, came up with safety measures like installing

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fire extinguisher planned to train the employees on how to escape sudden break out and building
fire exits.

Do- At this stage the company implements all their blueprints. And thus Re stored all
losses that occurred at that time.

Study- At the time of crisis they observe any accidents or hazards and how well the crisis is being
handled.

Act- Justify whether the steps taken to ensure safety is correct or not, whether the subsequent

Proves successful or not. If answer is positive then follow the plan if not then redesign the whole
thing.

Plan
Fire
encounter,loss
of inventory

Do
Act
Fire Insurance
Monitor Coverage,Fire
crisis,evaluate prevention
results

Study
Accidents,Safe
ty hazards

Figure: AFLPL’s PDSA model while dealing with a problem.

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AFLPL‟s Quality Tools Cause and Effect Diagram

With the help of this diagram, we can focus on the causes and effects of the problem and what
measures are required to be taken in each section of the company to achieve efficiency. This
way continuous improvement takes place leading a progressive production and manufacturing
system each time a problem is solved.

Idea Generation Period

AFLPL believes in Teamwork, so before coming up with a new idea the company builds up
focused group including youth who surveys trends on social media to high officials who comes
up with strategy to implement those ideas.

 Brainstorming - Build a discussion group to study modern trends and come up with ideas.
They evaluate how customers react, create brand value, increase flexibility.
 Benchmarking- They benchmarked an Indian company named “Park Avenue” as clothing
and textile industry which is very prominent in India. Being India‟s premium life style
brand it designs latest international fabric, styling, colour and fashion trends. The brand
won “Best Design Concept” of the year 2015. AFLPL is trying to introduce a line that
includes business attire targeted towards professionals.

Pareto Analysis of AFLP:

As AFLPL is a big organization, it faces defects while production like missing buttons, smeared
paint, discoloration. To deal with these inconsistencies, AFLPL develops Pareto Analysis which
basically indicates the 80/20 rule. That is, by solving 20 percent of the problem can lead to solve

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the rest 80 percent of problems. In other words, 80 percent of cause will generate 20 percent of
result.

For meeting the actual goal of the company, the managers verify and modify each problems
of defects that encounter like –loose buttons, random cuts etc and focuses on solving the majority
of defects and finds out the root cause of majority defects. In the diagram we see that majority
defect that is detected is loose hangtags which may be due to low ranked workers lacking attention.
So when company focuses on preventing loose hangtag problem they come up with a
solution of encouraging workers or training workers well so that their work gets undivided
attention or create a workplace where errors are unacceptable .When they focus on lower ranked
employee the other defects which scored lowest gets automatically upgraded. Thus, 20 percent
solving of majority problems leads to solving 80 percent solving of problems as a whole.

Implication of Toyota Production System

Principle 10: Teams

If they track Principle 10 which is, developing exceptional people and teams who follow your
company‟s Philosophy. That will lead to create a strong and stable culture in which company values
and beliefs are widely shared. Building up a team who monitors the allotted process and where each
individual is involved in improvement will ensure productivity.

Recommendation for Quality Management

 Sustainable and eco-friendly production is suggested and development of R&D is

recommended.
 They can apply sustainable supply chain system by managing waste in the greenest way.
 They can sell out the faulty products to local retailers and thus save factory and
warehouse space.

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 Conclusion

The leather industry is one of the promising industries in Bangladesh. AFLPL is a leather and
footwear production company that produces high quality products. The products of AFLPL are
exported to various countries around the world, as a result they maintain the quality as a priority.
They try to implement all the latest technologies for the development. They have their own lab
where they develop their new technologies with experienced engineers. AFLPL mission is to
provide innovated, durable and fashionable quality leathers and hand crafted leather goods to its
customers which keeps them a step ahead from their competitors.

Recommendations
 As a large-scale company, they could have implemented the factory setup in a linear manner by
purchasing a big land rather than having a five stored building.
 AFLPL should arrange several supplier development programs to support their suppliers. This
will help them to maintain good relation with their suppliers and reduce the number of defective
products.
 We recommend AFLPL to introduce Andon system as it will help them detect the problem
effortlessly and solve it.
 As Bangladesh has an unstable political environment, the situations can be changed anytime.
As a result, we strictly recommend AFLPL to follow some forecasting techniques.
 Sustainable and eco-friendly production should be maintained.
 They can apply sustainable supply chain system by managing waste in the greenest way.
 They can sell out the faulty products to local retailers and thus save factory and
warehouse space.
 They can sell out the defective products to local retailers and thus save factory and
warehouse space.

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 References

(n.d.). Retrieved from Imaging.ubmmedica.com:

http://imaging.ubmmedica.com/all/p2files/tools/Liker041.pdf

ACCENTURE FOOTWEAR AND LEATHER PRODUCTS LTD, Bangladesh, Manufacturer, Buying Office,
Distributor/Wholesaler, Sell123.org. (n.d.). Retrieved from Sell147.com:
http://www.sell147.com/company/Bangladesh/1483080.htm

Porter's Five Forces Model Analysis On Leather . ( 2017, August 04). Retrieved from Porter Analysis:
https://www.porteranalysis.com/porters-five-forces-model-analysis-on-leather-industry/

Accenture – Footwear & Leather Products Limited. (n.d.). Retrieved from Accenture-bd.com:
http://accenture-bd.com/

An overview of Bangladesh leather industry. (n.d.). Retrieved from Textile News, Apparel News, RMG News,
Fashion Trends: https://www.textiletoday.com.bd/overview-bangladesh-leather-industry/

Min, H. (2000, January). THE Supply chain management (SCM) bullwhip effect in Bullwhip effect, in supply
chain managementBULLWHIP EFFECT IN Supply chain management (SCM)SUPPLY CHAIN
MANAGEMENT. 66-70.

Slack, N., Jones, A. B., & Johnston, R. (2013). Operations Management (7th ed.). Edinburgh Gate: Pearson
Education Limited.

Stevenson, W. J. (2015). Operation Management (12th ed.). New York, NY: McGram-Hill Education.

Toyota Production System. (n.d.). Retrieved from Google Books:

https://books.google.com.bd/books?hl=en&lr=&id=7_-
67SshOy8C&oi=fnd&pg=PR9&dq=Toyota+Production+System:+Beyond+Large-
Scale+Production+By+Taiichi+Ohno&ots=YoVvBhEcCY&sig=lGRIog1-
8ArMnmkpzJHTYxx_E7A&redir_esc=y#v=onepage&q=Toyota%20Production%20System%3A%20B

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 Appendix

Visiting card of Mr. Joinal Abedin (Director of AFLPL)

Group Members with Director of AFLPL, Mr. Joinal Abedin

Members visiting the factory of AFLPL

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