Cost Optimization by Process Mapping in Supply Chain Management at an

Indian Carpet Making Unit

Dr. Subhash Datta, Director, NIILM Centre for Management Studies, Greater Noida, UP, India
Email: subhash.datta@gmail.com
Mr. Lokesh Vijayvargy, Sr. Lecturer, Jaipuria Institute of Management, Jaipur, Rajasthan, India,
Email: lokeshvijay79@gmail.com

Abstract

Purpose-Any process, however convoluted, disorganized, and complicated, can be broken down

and interpreted with a process chart. The method for accomplishing this isn’t new. In fact, the

method has been producing outstanding results with manufacturing processes for nearly a

century and with information processes for more than 50 years. Process mapping is used to

articulate the activities and procedures of business entities in a graphical way as pictorial images

readily convey considerable information. The objective of this research is to provide evidence

and a methodology to assist Carpet Industry in evaluating the stages of their process and their

efforts at different levels.

Methodology/approach – A review of literature identifies key characteristics of transparency

(process visibility) related to process mapping. Observations and surveys are used to study the

impact of process mapping on transparency in an employee training session.

Findings – The paper finds that process mapping increases transparency for the processes and job

responsibilities It reduces 10% of total cost of supply chain management at company.

Research limitations/implications – The research presumes that better understanding and recall

of the company’s business processes equates to higher transparency. This research study is

limited to three departments that are Store department, Carpet Receipt department and finishing

center. These limitations should be considered when extrapolating the results to complete

organization.
Practical implications – Any company whether small or big in its operational size requires the

complete knowledge of its process of operations. For a small scale company, the role is

performed by a small number of employees but as the company grows in size and its operations

it needs to bring everything on a paper so that this would help in clearly defining the roles and

responsibilities of the people involved, so that the management can begin to move their

perspective from day-to-day pressures and take a more holistic, long-term view of the business.

By doing so, they can achieve a more effective alignment of external and internal requirements

and mechanisms which will benefit themselves, their customers and the entire supply chain.

Originality/value – This composite framework of Process Mapping would enable those who run

manufacturing companies to take an overview of their business and better align their internal

priorities with the external requirements of their customers. Understanding these convergent

topics is central to improving supply chain performance.

Kew Words: Process Mapping, Carpet, Supply Chain Management

Introduction

This paper gives a view of importance of Supply Chain management for any organization

as it will help them in clearly identifying the factors which influence the working environment. If

history is the written record of past events then the tradition of carpet weaving is older than

history itself and invading armies and travelling traders generated a serious global trade at an

early stage. Oriental and classic rugs are made and traded by century’s old methods from

countries such as Iran, Afghanistan, Pakistan, India, Turkey, the Balkans and China.  These high

quality carpets are rarely purchased for their functionality and are often valued for aesthetic

qualities that command dizzy prices as viable investments.  Though high end retailers from

Tokyo, London, Berlin and New York are the epitome of formal society, the informal sector
dominates in most of the countries where the trade is based. It is a paradox of the industry that its

informal roots believe the high levels of organized skill that are needed to satisfy exacting

consumer tastes.

All in all, these markets combine physical, information and cash flow elements that are

worth looking at more closely.  Above all, an end to end map of the process from loom to

showroom triggers all sorts of issues in the interaction of informal and formal actors in a

significant global market demonstrating how logistics can play a significant role in transforming

an industry and its fortunes on the global stage.

This paper contains a significant description about the carpet industry and various

processes involved in the company. The departments considered are store department, carpet

receipt department and repairing center. Various departments are studied by the means of process

mapping and various process maps are made to find out activities involved in defining exactly

what activities are involved in a process, who is responsible, to what standard a process should

be completed and how the success of a business process can be determined. Once this is done,

there can be no uncertainty as to the requirements of every internal business process.

This paper contains all the process performed by the company starting from procurement of raw

material from Bikaner to final finished product that it receives from finishing center. The

company buys some material from market get the wool dyed in required shade and quantity,

issue the material to the weaver, and to the finishing center. Finally it receives the carpet from

weaver, inspects and get the carpet finished. Interrelation of various departments in different

processes, allocation of Job responsibilities, and the documents generated at different levels are

shown.
 Process mapping has been adopted in companies as an effective technique to enable

organizations to view their business system graphically at any level of detail and complexity

(Aldowaisan and Gaafar, 1999). Although many process mapping projects have successfully

helped organizations achieve higher level of cross-functional collaborations and tangible cost

reduction, traditional process mapping has been done in an ad hoc manner and tends to be

resource-intensive and time-consuming due to the informal and ambiguous collection of process

information (Hunt, 1996; Reijers and Limam, 2003). Different from the traditional process

mapping approach, there has been research on applying formal methods and theories, such as

linear programming (Aldowaisan and Gaafar, 1999), cost optimization (Aalst and Weijters,

2004), computational experiments and probability theory (Datta, 1998), to generate process

models. Although those analytical process mapping methods provide rigorous process extraction

procedures, few applications of those approaches have been found due to their restrictive

assumptions. In addition, none of those analytical approaches use business policies as their

inputs, and therefore they cannot be directly applied to process discovery based on business

policies. Therefore, there is an imperative need for advanced process development tools that can

leverage business policies for process discovery and validation.

Part 1 of the paper deals with the introduction about the paper, followed by Methodology

opted for doing the complete study. Part 3 deals with the findings of the complete study,

followed by general analysis, and final remarks.

The figure 1 is given below shows the flow as to what are the steps to be followed for

analyzing any process and make it an idol process for the industry. It concentrated on all the

points for analyzing that includes movement of labor, movement of material, transportation of

goods, etc
 Figure: 1 Flow chart of the proposed approach for process mapping

Start

Detailed study of the department to be studied

Study the various processes performed by the department

Find the different departments involved in such processes

Detailed discussion with the people involved in the process

Draw the process on Paper with highlighting the different

documents generated at different levels

Yes
Are there
chances of any
condition that Insert Condition Box with condition
may arise?
No

Then complete the process.

Get it verified by the concerned department head

No
Is everything
same as in
s practical?

Yes
Start finding the gaps in the current process by
discussion with people involved

Make “To Be” process on the basis of discussion and

show the gaps

Make SOP on the basis of “To be” map and show the
responsibilities of different people involved”

Stop

Literature Review
 The purpose of process mapping is to gain diagrammatic understanding of the process

that is currently used and seek what is expected and what should be done to provide better

customer focus and satisfaction. This helps in identifying what best practices are required to

incorporate and find appropriate benchmarks for an arriving at better ways of communicating the

services. Sachan and Datta (2005) is reviewed many cost optimization technique for process

improvement like simulation, linear programming, and queuing theory etc. But Process mapping

enables representation and analysis of business processes. Process maps are just one means of

visualizing and controlling the activities of an organization and collectively these visual

approaches have been characterized as increasing transparency, or process visibility. In many

business entities, the development of process maps is an intermediate step in process

improvements. For instance, in lean production’s value stream mapping (VSM) methodology,

development of a current state process map provides a basis to analyze the existing process,

develop an improved future state map, and realize benefits when implementing the future state

map (Hines and Taylor, 2000). The value of process mapping as an intermediate step leading to

process improvements is broadly accepted (Rother and Shook, 1999; Womack and Jones, 2003).

However, it is also helpful to understand the value of process map development prior to

implementing any improvements. One way to determine this value is to measure the impact the

process map has on employee recall and understanding of the business processes included in the

map. Mapping processes within an organization requires a significant investment of resources,

and demonstrating a return on this investment as soon as possible is desirable. It may take years

for an organization to realize benefits related to implementation of a future-state process map.

On the other hand, the value of creating and using current-state maps can be demonstrated much

sooner. Demonstrating this value may help justify further investment and motivate organizations

to continue towards the later steps of their process improvement efforts. Process mapping is
used in Indian cottonseed oil industry for minimization of waste (Dinesh et al., 2008) and in

health-care network for process improvement (Kimberlee et al., 2005). In response, the research

described in this paper investigates process mapping use in a Carpet manufacturing and

exporting firm that is Jaipur based Carpet Industry. The research objective is to provide evidence

and a methodology to assist organizations in evaluating and justifying the early stages of their

process mapping efforts, before any future-state improvements are realized. This objective is

accomplished through a study at Jaipur Based Carpet Industry, which reveals improved

transparency when process maps are used for employee training.

Process mapping follows various steps. These are identifying the product, Setting

boundaries, Value added activities, Inspection, Curing/Drying, and Transport.

Methodology

Process mapping starts with the detailed study of the department for which mapping is to

be done. Detail study means noting down the different processes performed by the complete

department starting from what all they do, and generating a list of process performed. Secondly

the process performed are taken individually and then taking one process at a time, studying all

the minute steps performed by different persons of different departments. Then making a

complete flow of process starting from where the task is assigned and where it gets completed.

All the conditions are also to be included if they arise at any point and all possible outcomes are

to be mentioned. After making a complete process, the feedback is taken because many times the

task being of regular nature is missed thinking it less important.

Documents generated at different levels by different people and the number of copies of the

document generated is also to be mentioned. If everything is same and each and every person is

satisfied with the mapping the real work starts, the work is to analyze the process by

management point of view in which each and every step is evaluated and changes are introduced
in the map. This map is termed as “To Be ” map. This to be map should overcome all the lacunas

that current system persists and new steps should be introduced in order to make the process idol.

After successful completion of to be maps work starts for making SOP (Standard Operating

Procedure) which starts from the initiation of the process and gives a detailed description of the

complete process in points and this acts as an operating manual for the company and is also

helpful for the training purpose. SOP also includes all the conditions that may arise in the due

course of the working of the company and mentions what actions a person is required to take in

order to complete the process. This clearly represents that who is responsible for what and if

incase some mishap happens in the company in that process then that person cannot excuse from

his duty. The main objective of this is to remove wastage of

1. Time

2. Labor

3. Money

If a company is able to control the wastage mentioned above the company will be able to

gain excellence in the market. This will help them to concentrate more on the market, increase

profit margins and reduce the cost incurred.

This paper shows the study of a process of Order Delivery that is a part of Store department

at Jaipur Rugs Company Pvt. Ltd i.e. a carpet exporting company. The snapshots below (Figure

2) shows the current process that is being performed by the company and Figure 3 shows the

proposed process.
Figure 2:- Current process of the company.
Figure 3:-Proposed process to be performed by the company

Order Delivery Process: - Order is received from sales department which they direct to

production department and then instruct the store department to get the material ready as per the

requirement. Then packing of the required material in the required quantity is done in different

sacks to be sent to the weaver.

“Order Delivery Process”: Standard Operating Procedures (SOP)

1. Production manager will prepare production plan as per the sales order requirement and

forecasting and branch requirement.

2. ERP executive in production department will generate production order in ERP software

which is based on the sales order.

3. Production manager will write the branch name on each and every job card

4. Production manager will issue the job card to warehouse manager in store department on

the basis of branch

5. Warehouse manager will receive the job cards in warehouse

6. Warehouse manager will hand over the job cards to warehouse executive and inform ERP

executive

7. ERP executive will send an email to D&D department for issuing the Maps

8. Warehouse executive will sort the job cards on the basis of branch

9. Warehouse executive will hand over the job cards to Block Supervisors for packing the

dyed raw material

10. Job card material is packed by the helpers under the supervision of Block supervisor

11. The D&D executive issues the Map to the warehouse executive in warehouse department,

12. The Maps are received by the warehouse executive

13. Warehouse executive will hand over the maps to block supervisors

14. Block supervisor will put the maps in each packed sack and inform to warehouse

executive

15. Warehouse executive will inform to ERP executive for preparing the required documents

i.e. Branch Transfer Challan

16. Logistic executive will get the material loaded into the vehicle

17. ERP executive generates the Branch Transfer Challan and handed over to warehouse

executive

18. Warehouse executive will give one copy of Branch Transfer Challan to the Truck Driver

19. The checking is done at the gate by the gatekeeper and entry is done in the Driver log

book,
 20. The truck departs from the warehouse for the branch,

21. The truck is received at the branch by the branch head,

22. Here the “Order Delivery Process” ends.

Note: - All the Standard Operating Procedures are made on the basis of Proposed process (To be)

keeping in mind all the duties to be performed by the individuals associated with the company.

Findings in the current process

In the Order Delivery Process the store department receives requirement from production

department and pack the material according to the specifications given in the job card. Company

follows a practice of sending the material in parts as per the availability of the dyed material that

give rise to the problem of pending color. After consuming the material weaver raise the

requirement of the material that is pending at the company. So this causes various problems for

the company like unnecessary labor involvements, transport expenditure and wastage of time and

several other expenses. Recommendations are made them to keep the inventory of non-dyed

material and get it dyed and spooled as per the requirement of sales order received. This would

reduce the inventory of different shades and even reduce the labor of repacking. Estimates shows

in table no. 1.
 Particulars Details Cost involved in Rs
Job cards issued per month Minimum 200
Man hours required to pack
3 labors*2 days=48 man hrs
each job card

Entry for pending color Average carpet weighing 100 kg and Taking 200 carpets as

(Additional cost) 80% material sent min

Labor for packing 2 men for 1 hr 2*83.33*200=33,332
ERP operator salary 15 minutes per map 15*200*1.736=5,200
Transportation Varies from place to place ---
Labor Loading and unloading ---
Total 38,538.33
Table 1: - Calculation of amount saved by removing pending color entry

The amount that is incurred in transportation and the amount that is paid to labourers at the time

of loading and unloading is also saved by removing the option of Pending color

With growth in the industry and the company’s performance the production level of the company

rose from 200 bags to 1000 bags, then the same amount per year would be Rs 23, 12,300 and this

is 10% of total supply chain cost.

Suggested changes

After studying the Order Delivery Process of the company the following changes were suggested

to the company

1. No pending color entry:- If incase the material available is less, then defer the order or

do swapping of order with some other order of less priority.

2. Proper planning of resources:- On the basis of order received planning of transfer of un

dyed material from warehouse, dyeing and spooling should be planned to control the

situation of pending color

3. Proper logistics management:- Proper logistics management so that vehicles don’t go

empty to branches
 4. Allocation of resources:- If they cannot control the stock at store then some stock of

special colors should be maintained at branch level to reduce the wastage of resources

and time and hence decrease in cost (shown in table above)

General analysis

Process mapping is a powerful tool of Supply chain Management whether the intent is to

design a process or redesign it. Much of the benefits from the process reengineering movement

are based on the development of excellent process maps. The business process reengineering

literature leans heavily on the value of information technology to automate service processes.

However, processes can only be automated if they are understood in great detail. A detailed

process map can help identify opportunities for reductions in cycle time, defects, product

variation, cycle time variation, number of process steps and required skill base. It is not clear

how frequently a process should be mapped or an already mapped process be revisited. However,

it is clear that process mapping offers a good way to benchmark a process and ascertain if any

opportunities for improvement have been over looked.

Conclusion

It can be said that the carpet industry is presently going through a major change.

Traditional markets are saturated while new markets are offering opportunities for growth.

Modern designs and low end carpets like Hand-tufted carpets are attracting new customer base.

However, the total sales in the carpet industry have been stagnant in terms of value. Hence,

traditional model of carpet business is no longer relevant. There is no single kind of customer.

Market can easily be segmented now. Product mapping with the consumer preferences is

necessary for the future growth in the industry. Indian carpet industry will find it difficult to

compete with Chinese industry in terms of volumes and prices. Innovative range of products

with lower volume is going to be mantra for success in Indian Carpet industry. Hence, efficient
coordination and management of activities is a key for success for any Indian carpet business.

This offers an opportunity for consolidation of activities for reduction in costs, improvements in

quality standards, better product development and timely delivery of products thereby driving the

growth.

Process mapping helps represent the work processes visually and identify problem areas

and opportunities for process improvement. It provides a common understanding of the entire

process and specific roles and contributions of process participants.

Process management is an important part of study of the organization, it is very important to

study the process of the organization for a management team.

Process mapping is used to articulate the activities and procedures of business entities in a

graphical way as pictorial images readily convey considerable information. The objective of this

research is to provide evidence and a methodology to assist organizations in evaluating the early

stages of their process mapping efforts.

In this, the three departments has been mapped according to their process, both according to “As

Is” and “To Be”.

“As is” is considered to be the present scenario of working of the departments and “To

Be” is considered as its future stage of the work. In “As Is” what has been observed that many of

the tasks are not providing benefits to the organization and that has been eliminated from the “To

Be” process as seen in the process mapping of the three departments further. This process

mapping will help the management to eliminate those processes that are easily avoidable and

hence reducing the cost of the company.

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