gokaldas exports 1 - TBM Consulting Group

gokaldas exports
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Overview
Company Overview
Lean Journey
Lean Success Story
The Model Plant
Effects of Recession
Opportunities for Grow th
Next Steps
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I NDI A
A Paradox
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Gokaldas Exports LTD.
India s largest apparel exporter
Is a family business recently bought over by Blackstone
An organization founded on the values of passion, performance,
people & products.
ONE STOP SHOP for the world s most preferred brands
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Gokaldas Exports LTD.
Sales
250 Million Dollars (31st March, 2008)
Factories
45 (31st March, 2008)
No. of people
45,000 (31st March, 2008)
No. of machines
Capacity
25,000
2.5 million garments / month
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SPORTSWEAR
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CASUALWEAR
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CASUALWEAR
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One Man One Vision
It was his vision that gave birth to
this remarkable company in 1970.
His far sighted vision and ability to
plan, execute and manage resulted
in the phenomenal growth of
Gokaldas Exports.
The Late Jhamandas H. Hinduja
To set a precedent in the global garment manufacturing
industry through continuous innovation, exceptional products,
focused services and enhanced customer satisfaction.
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Madanlal J. Hinduja
Chairman
Rajendra J. Hinduja
Managing Director
Ashwin R. Hinduja
Chief Operating Officer
Dinesh J. Hinduja
Executive Director
Vivek M. Hinduja
Chief Operating Officer
Gaurav D. Hinduja
Chief Operating Officer
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12/2006
NIKE LEAN VENDOR SUMMIT
03/2007
TBM ASSESSMENT
05/2007
FIRST KAIZEN EVENT AT PLANT
08/2007
EXECUTIVE EXCHANGE AT PORTUGAL
09/2007
CEO BOOT CAMP
03/2008
POLICY DEPLOYMENT
04/2008
FIRST LEAN CERTIFICATION FOR 12 PEOPLE
05/2008
BREAK OPEN TO 4 NEW PLANTS
09/2008
FIRST BUSINESS PROCESS KAIZEN
10/2008
GEX SUPERVISOR TRAINING
12/2008
100TH KAIZEN EVENT
03/2009
2ND SML
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Model Plant
Euro Clothing Company (ECC1)
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Training
Supervisor
Shop Floor
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Cutting
Before Lean
After Lean
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Sewing Line
Before Lean
After Lean
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Finishing
Before Lean
After Lean
Balanced to Takt
Time
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One Piece Flow in Finishing
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Lean Fund
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The Success Story
POINTS FOR
IMPROVEMENT
BEFORE KAIZEN
AFTER KAIZEN
RESULTS
Work In Progress
Approx 2.5 Days
One Day
Decrease by +50% avg
Productivity
2.1 pcs/day /
person
3.0 pcs/day/ person
Increase by 43%
5S
Not Measured
Level 1
Needs Improvement
FPY
85%
92%
Lower DR
Efficiency
35%
55%
Adhere to Takt Time
Facility Capacity
Avg . Approx
135,000
pcs/month
200,000+ / month
Increase in Production
Changeover (Peak Production)
Approx 5-6 Days
Improved by 40%
Increased Run Time
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Lean Savings Chart
Cost / Min - INTEX 2/ TA - 6
January 2008
March 2009
3.00
Implemented Lean in 4 factories
2.50
2.00
Cost / Mi n
1.50
Basel i ne
1.00
Li near (Cost / Mi n)
Mar-09
Jan-09
Nov-08
Sep-08
Jul-08
May-08
Mar-08
0.00
Jan-08
0.50
Total savings of $2 million in 1
year
Total investment (Consultancy and
Salaries) $1.2 million
Cost / Min - GI/ TUC
Improvement in
3.5
3
2.5
Cost / Mi n
2
On-time Delivery
80%+ to 90%+
Basel i ne
1.5
Li near (Cost / Mi n)
1
First Pass Yield
75% to 85%
Mar-09
Feb-09
Jan-09
Dec-08
Nov-08
Oct-08
Sep-08
Aug-08
0
Jul-08
0.5
Customer Satisfaction
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Opportunity vs Threat
Jan 1, 2005 : quotas on apparel exports were removed
Quantum leap in opportunities for Indian industry in US and
European markets
Indian apparel exports grew by 28% in 2006
Gokaldas grew by 17% in 2007
In contrast
. Gokaldas grew by 2% in 2008
US and European markets started slowing down
INR
USD parity went through a roller coaster
INR appreciated by 14% between April 2007 and Dec
2007
Indian exports sector had no prior experience to handle such
movements .. Everybody suffered!
Then came the recessionary trends
and INR depreciated back by 24%
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Opportunity vs Threat
Sha re of U S Appa re l I m port s M a rk e t a nd Annua l Grow t h Ra t e s (US$ in millions)
We have lost share to Bangladesh / Vietnam : Both lower cost producers
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2008
The Recession
Several retailers closed shop
One of the worst Christmas sales season for apparels, in
living memory
7% de-growth over last year
Bankruptcies reported
Specifically
Steve and Barry s, Mervyns filed for bankruptcy
Pacific Sunwear, Lane Bryant, Fashion Bug, Catherines
downsizing
Foot Locker winding-up 140 stores, Ann Taylor closing 117
outlets
Eddie Bauer, Cache, Talbots, J Jill, GAP Inc, Goodbye Levitz,
Home Depot, Macy s Pep Boys, JC Penny, Lowe, scaling
down operations
UK stores closures include Woolworth, Mosaic, Adams
Childrenwear, Blooming Marvelous
Over 600000 jobs already lost in Indian Textiles and Apparel industry
industry is still counting .
and the
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The Strategic I mperative
The grow th opportunity is phenomenal
India is the 6th largest nation in apparel exports and 3rd among the Asian countries:
1.
China
$92.0 billion
2.
Bangladesh
$11.2 billion
3.
India
$9.7 billion
4.
Vietnam
$8.4 billion
5.
Cambodia
$4.0 billion
6.
Pakistan
$3.0 billion
7.
Sri Lanka
$3.0 billion
Indian apparel exports have only 3% share of global trade (USD 345 billion)
86% of the total production in the small scale sector
Consolidation is bound to happen
We must position ourselves to leverage this opportunity through
Lean Manufacturing
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Sales turnover vs EBI TDA
300
16%
14%
250
240
12%
220
12%
14%
13%
12%
210
195
200
9%
180
10%
160
150
8%
120
EBITDA%
Turnover (USDMillion)
12%
13%
TURN OVER
EBITDA
6%
100
4%
50
2%
0
0%
04
05
06
07
08
09
10
Financial Year
Projected Impact of Lean:
Sustain and improve EBITDA levels despite a 25% drop in Sales
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Manpow er and Sales Turnover
Trends in Mapower and Turnover per person
60000
5.20
50000
48000
5.0
Manpower (No.s)
42979
40000
5.00
5.0
42000
4.7
38000
35201
4.80
4.60
30000
20000
27237
4.5
4.5
4.40
4.4
4.20
4.3
10000
Turnover per person ( USD ' 000)
51441
Manpower
Turnover per person
4.00
0
3.80
04
05
06
07
08
09
10
Financial Year
Impact of Lean:
Turnover per person improves significantly and gains are sustained despite a downturn
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The Next Step
Policy Deployment Matrix
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Policy Deployment Projects
Lean Sigma Go forw ard Plan - Productivity Project
( March 2009
March 2010)
Improve Productivity by 30% this year
I mprove PCD hit rate from 30% to 90% by March 2010
The Human Resource Project
Reduce Attrition from 120% to 80%
Reduce Absenteeism from 15% to 8%
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Lean Sigma Productivity Project
I mplement and sustain LeanSigma in 15 additional plants by
March 2010, including training of adequate KPO, supervisor
and plant management ( approx. 75% of capacity)
Annual I mprovement Projects:
Improve CPM from $0.05 per minute to $0.04 per minute
Reduce rejection from 2.5% to 2%
Improve OTP from 85% to 95%+
Reduce DR from 6% to 3%
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Gokaldas Production System ( GPS)
Factory
Start
Number of
People
Supervisor
Wave 1 (5 Plants )
May-07
Mar-08
8997
186
Wave 2 ( 8 Plants )
Apr-09
Jul-09
10,013
216
Wave-3 ( 9 Plants )
July-09
Dec-09
9875
200
Total
28885
602
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Action Plan
Resources
Hire 45 KPOs
15 by May 1st and 30 by end June
Hire and train 4 KPO Leads, (1 for five plants ) by end June 09
Approximate Annual Salary - $750,000
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Action Plan
Training
Provide 4+4 weeks of certification training to 15 new KPO s by end June and
balance 30 by end August.
Provide 2 weeks training to 100 plant management personnel (FM, PM, QAM,
IE, Supervisor, Cutting incharge & Store incharge) of wave-1 & 2 plants by
April/May-09.
Provide 2 weeks training to 600 supervisors of wave-2 & 3 plants by June-Oct09
Consulting
Schedule 30 calendar weeks of training and SKB from April 2009 to March
2010
Total Investment $1million
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Challenges
The CAVE Dwellers
Answering WIIFM
High Labour Turnover
Sustain the Improvements
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Questions?
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Thankyou!
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