Check out: • How much money is going in the factory? • How much money is stuck in the factory? • How much money is flowing out of the factory?

1. How much money
factory?
is stuck in your

2. Let’s start with the basic measures
to judge a factory’s performance:
How much money is going in the factory?
How much money is stuck in the factory?
How much money is flowing out of the factory?
Operational expense
Work in Process (WIP)
Sales
C h a l l e n g e T h e P r e s e n t

3. Somehow everyone keeps a track of
inflow and the outflow of money
C h a l l e n g e T h e P r e s e n t
but rarely is the money stuck
in the factory accounted!

4. C h a l l e n g e T h e P r e s e n t
What is WIP
and why is it important?

5. WIP is basically any inventory which
has begun the manufacturing process
but is not a completed product.
Actual WIP = Input - Output
C h a l l e n g e T h e P r e s e n t

6. Advantage of a higher WIP:
Disadvantages of a higher WIP:
Not realising the pain areas of the production line,
Having a higher reaction time to quality problems and
Having a higher throughput time for orders.
A higher WIP helps everyone to keep busy without actually
increasing the production.
C h a l l e n g e T h e P r e s e n t

7. C h a l l e n g e T h e P r e s e n t
On the other side, there are various
disadvantages
of a lower WIP

8. C h a l l e n g e T h e P r e s e n t
A lower than required WIP will result in:
Drying up
your line
Lowering your
efficiencies
Reducing your
production
output
Increasing your
operational
expenses.

9. C h a l l e n g e T h e P r e s e n t
This makes it quite
unprofitable for any
manufacturing setup.

10. C h a l l e n g e T h e P r e s e n t
One of the major reasons of
higher WIP in the manufacturing process are
the variations in the
output of different processes
or simply put...
an unbalanced
manufacturing process.

11. C h a l l e n g e T h e P r e s e n t
This results in a disrupted flow of the material
through the setup...
resulting in money being stuck
in the factory.

12. So, how much money
is actually stuck in your
factory?
C h a l l e n g e T h e P r e s e n t

13. Let us consider a factory producing
25,000 denims every day,
working for 8 hours with 1,000 machines.
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If we were to put a number to money stuck in
this factory based on standard WIP assumptions,
then the total money amounts to
$ 2.33 Mn.

14. From a process centre perspective,
this is the money stuck:
C h a l l e n g e T h e P r e s e n t
Store
15 days
of storage
$ 1.13 M
Cutting
3 days
of inventory
$ 0.23 M
Sewing
30 mins of each
workstation and
0.5 day at loading
and exit station
$ 0.36 M
Washing
3 days equally
divided between
loading, process
and exit.
$ 0.23 M
Finishing
5 days with
major inventory
loading station
$ 0.38 M

15. Is it possible to
reduce the money stuck
in a factory?
C h a l l e n g e T h e P r e s e n t

16. C h a l l e n g e T h e P r e s e n t
Reducing the WIP levels in your factory
In order to reduce the WIP levels in your factory you need to
reduce either Failure Factor or Transit Time.
Optimum WIP = (Failure factor + Transit Time) x Capacity of succeeding process in unit time
Where,
Failure factor = unit time by which the process has been delayed historically
Transit Time = the time required for transferring the material from the preceding process to the current process.

17. Let us review
possibilities in each of
the process centres
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18. FABRIC STORE
Ideally sourcing locally or from nearby places would help you in
reducing fabric storage and throughput time.
C h a l l e n g e T h e P r e s e n t
Failure Factor
Number of days delay
in receiving a specific
lot of fabric
Quality
rejections
Possibilities of reducing money in the process centres

19. FABRIC STORE
A track of delays in receipt of fabric and transit time would help in
calculating the optimum WIP and also understand if any reduction is possible.
C h a l l e n g e T h e P r e s e n t
Transit Time
Time taken between
fabric ordering and delivery
Possibilities of reducing money in the process centres

20. CUTTING PROCESSES
Any delay will directly result in loss of production capacity, thus a
proper priority for execution of order needs to be ensured.
C h a l l e n g e T h e P r e s e n t
Defective lay Delay in receiving
fabric from store
Possibilities of reducing money in the process centres
Failure Factor

21. CUTTING PROCESSES
Transit Time can be neglected
as this would be miniscule
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Possibilities of reducing money in the process centres
Transit Time.

22. SEWING PROCESSES
A proper tracking of time yielded unproductive due to machine breakdown,
operator absence, trim/material unavailability will give you data point required to
calculate optimum WIP for each workstation.
C h a l l e n g e T h e P r e s e n t
Failure Factor
Delay in receiving the cut
panels from cutting department
Off standard time for the
preceding machine / workstation
LOADING STATION WORK STATION
Possibilities of reducing money in the process centres

23. FINISHING DEPARTMENT
C h a l l e n g e T h e P r e s e n t
Failure Factor
Not being able to find the right
sizes and colours to pack a carton
Possibilities of reducing money in the process centres

24. So what are the
measures you can take
to counter these factors?
C h a l l e n g e T h e P r e s e n t

25. Understanding and tracking each of these factors in your factory
Taking concentrated efforts to reduce them will enable in optimising your WIP.
Also, this exercise needs to be repeated after a stipulated time period to ensure
the WIP levels are catering to the current manufacturing environment in your factory.
C h a l l e n g e T h e P r e s e n t

26. There are solutions like
by
which provide tracking benefits to help you in optimising your
throughput time by tracking all these factors with
least human intervention
www.threadsol.com

27. For an elaborate insight on the topic, visit
www.stitchdiary.com
C h a l l e n g e T h e P r e s e n t