Today, Information technology (IT) plays a vital role in the field of textile industry. Any manufacturing unit employs four Ms that is, Men, Material, Machine and of course Money. To get organizational success, managers need to focus on synchronizing all these factors and developing synergies with in and outside organizational operations. With the increased competition, companies are taking support of IT to enhance its Supply Chain Management (SCM) and using it as a competitive edge. In short, many textile companies are leveraging the technological power to adding value to their business.
Supply Chain Management includes: sourcing, procuring, converting, and all the logistic activities. It seeks to increase the transaction speed by exchanging data in real-time, reduce inventory, and increased sales volume by fulfilling customer requirements more efficiently and effectively.
Why Textile Industries Need IT Support?
Lack of information on demand and supply aspects:
Most of the decisions a manager takes are related to demand and supply issues. But unfortunately very few are able to get it, as a result decisions taken carries risk and uncertainty. Excess inventory is one of the most common problems faced by managers which further results in long cycle-time, outdated stock, poor sale, low rates, and reduction in order visibility and finally leads to customer dissatisfaction.
Long procurement time:
In a traditional textile industry, procurement process takes a much longer time. So, the retailers need to forecast demand and identify consumption trends at a much earlier stage. Lack of clarity about future can either result in early stock out, delay or overstock.
Supply chain in-competency:
With the urge for getting global, apparel and textiles are facing hurdles of inefficiency in carrying out various processes involved right from designing, developing samples, getting approval, manufacturing, dispatching to payment procedures. The total time taken can get extended to one year or even longer. If we calculate, production actually accounts for just ten to twenty percent of the total time. Rest of the time is taken for the information processing from one end to the other.
The trajectory of development of Information Technology has intersected every application in textile industry. From enhancing performance of textile manufacturing and tighter process control, IT has inserted intelligence at every node of textile supply chain.
Step into the global trade:
It is a fact that a company going global is opened with lot of opportunities as well as threats in terms of competition, changing trends, and other environmental changes. It necessitates managing every kind of information efficiently and at much faster speed.
Interaction of Information Technology with Textile Supply Chain
Sharing of Information:
Proper flow of information among supply chain member is very crucial. Such flow of information can influence the performance of overall supply chain operations. It includes data about customers and their demand, inventory status, production and promotion plan, shipment schedules, payment details, etc. Bar coding and Electronic data interchange are the two information technology tools which can facilitate information integration.
Bar coding facilitates recording of detailed data by converting it to electronic form and can be easily shared among members through EDI system. EDI with its high efficiency is able to replace the traditional ways of transmission like telephone, mail and even fax. EDI enables managers to analyze and apply it in their business decisions. It also helps in expediting order cycle that reduces investment in inventory. EDI based network enables Company to maintain quick response and closure relations with suppliers and customers, who are geographically dispersed. Manufacturers and retailers can share even new designs developed through CAD/CAM.
Supports planning and execution operations:
Planning and coordination are very important issues in supply chain management. The next step after sharing information is planning which includes joint design and implementation for product introduction, demand forecasting and replenishment. Supply chain members decide their roles and responsibility which is coordinated through the IT system.
Various software tools like MRP, MRP-II, APSS facilitates planning and coordination between different functional areas within the organization.
Material Requirements Planning (MRP): It helps in managing manufacturing processes based on production planning and inventory control system. Proper implementation of MRP ensures availability of material for production and product for consumption at right time optimizes the level of inventory and helps in scheduling various activities. MRP system uses computer databases to store lead times and order quantity. MRP includes mainly three steps: first assessing the requirement of how many units of components is required to produce a final product; here it applies logic to implement Bill of Material (BOM) explosions. Second step includes deducting the stock in hand from gross to find out net requirement. Finally, scheduling manufacturing activities such that finished goods are available when required, assuming the lead time.
Manufacturing Resource Planning (MRPII) system is a logical extension of MRP system which covers the entire manufacturing function. This typically includes machine loading, scheduling, feedback and Software extension programmes in addition to material requirement planning. It provides the mechanism to evaluate the feasibility of a production schedule under a given set of constraints.
A textile company which has multipoint manufacturing and engaged in global business necessitates something more than MRP and MRP-II like Distribution Requirement Planning (DRP), it has ability to solve both capacity and material constraints and quickly propagates the effects of problems in both backward and forward direction throughout the supply chain.
The Advance Planning and Scheduling (APSS) system includes both material focus of MRP and rapid response scheduling power of MRP-II.
Coordination of logistics flows:
Workflow coordination can include activities such as procurement, order execution, implementing changes, design optimization, and financial exchanges which results in cost and time efficiency. The results are cost-effective, speedy and reliable supply chain operations.
IT contributes towards the maximizing the value of textile supply chain through integrating supply chain operations within and outside the organization and collaborating the acts of vendors and customers based on shared forecasts. Internet adds to IT contribution towards supply chain management through coordination, integration and even automation of critical business processes. New system of the supply chain game emerges as a result of business innovation fuelled by the Internet.
Many supplying companies maintain demand data by style, size, fabric and color to replenish inventory at retail outlet. Level of replenishing is predetermined by both parties after reviewing history of sales by product and buying behavior of the community.
New Business Models:
Data mining and data warehousing:
Data mining is the process of analyzing data from different viewpoints and summarizing it into useful information that can be used as a basis of monitoring and control, enabling companies to focus on the most important aspects of their business. It allows users to analyze data from many different dimensions, categorize it, and summarize the relationships identified. In short it is the process of finding correlations or relationship among dozens of fields in large relational databases.
Data warehousing is the repository of data and can be defined as a process of centralized data management and retrieval. Centralization of data maximizes user access and analysis.
E-commerce can be B2B (Business To Business) and B2C (Business To Customer). B2C commerce is the direct selling to consumers through Internet. While B2B marketplace can be defined as neutral Internet-based intermediaries that focus on specific business processes, host electronic marketplaces, and use various market-making mechanisms to mediate transactions among businesses. B2B appears to be more prospective than B2C.
The textile-retail giants are adding an Internet shopping-component to their offering. It has affected their distribution and warehousing infrastructure. As a result of going online, retailers have changed their supply chain strategy. High volume products with stable demand are stocked in local stores, while low-volume products are stocked centrally for online purchasing.
Companies prefer a direct route to consumers by closely scrutinizing individual customer’s tastes, preferences, habits, and buying patterns. Instead of waiting for consumers to visit their stores, retailers simply send them e-mails with offers. Internet has facilitated quick response system. With the use of web-enabled technology it is possible to have automatic customer replenishment system.