CHAPTER 01 INTRODUCTION

1.1 Research Topic

Reduction of waste in the Knitting Process of Hayleys MGT Knitting Mills PLC

1.2 Background of the study

Hayleys Knitting Mills PLC is accredited for their product quality, by almost all of their clients including Marks & Spencer, British Home Stores, Mother care, NEXT, TESCO, Sainsbury, Adams & Woolworth and LACE. Also this production facility has received several international and local certifications and awards which act as order qualifiers for global level businesses. HMGT has won several national level awards including National Business Excellence Award (2010), Asia Pacific Quality Award (2005), Industrial Safety Award (2006), National Productivity Award (2008), National Quality Award (2007), Merit Award in National Safety Award (2007) and Merit Award in 5s Akimoto Awards Competition 2006 & 2007. The importance of the research is clearly demonstrated by the above awards which were received after 2010. Even though the company can become an order qualifier by obtaining the quality certificates, to become an order winner they should have the power to compete globally with a higher productivity and efficiency as well as flexibility in their operational activities with less cost and higher quality. In order to do this, company needs to reduce the waste in their knitting process to enhance the productivity.

1.3 Research Question

How to reduce waste in the Knitting Process of Hayleys MGT Knitting Mills PLC?

1.4 Research Objectives

The study was carried out with a purpose of achieving the following specific objectives.

1. Study the current consumption levels (current state) of the process. 2. Identify areas where productivity can be enhanced using lean consumption principles and tools. 3. Design a new process (future state) which consumes the least amount of resources. 4. Assess the impact of lean consumption of future state on bottom-line results of the Process

1.5 Project Goals

The goals of the project would be initially to increase the customer satisfaction and the output level of the company. This was planned to be achieved by,

1.

Reducing the cost of operation

2. Optimization of resource allocation & Reduction of WIP Levels 3. Creation of solid, improved production planning and scheduling system

1.6 Methodology in brief

The methodology used for presenting this study is explored in this section. First the research method is explained, followed by a brief description about the waste management concepts, we expect to use and targeted results we expect to present. Observations and interviews are the primary sources which expect to use in the data collection period. Direct observations will be made on the shop floor and time studies will be conducted for relevant work stations. A door to door processing time and lead time data will be collected to develop the current state map of the process. Interviews will be conducted with the operational staff, unit managers and quality managers. In person

interviews have to conduct with those who were most familiar with the manufacturing process. Another source of documentation will be the archival sources which were used in the research.

1.7 Brief Statement on Findings

Based on the data analysis the researcher will try to understand the relationship that exists between the waste activities in the Knitting Process and the productivity of the Knitting Process in the Hayleys MGT Knitting Mills PLC. Through the findings, the researcher will try to understand the present financial crisis of Hayleys MGT knitting mills and has to find cost reduction options which will enable the company to increase their profit margin without increasing the selling cost of the products. And then recommendations will be made to overcome any weakness in the process.

CHAPTER 2 LITERATURE REVIEW

The purpose of presenting the literature review is to examine the current state regarding the basic concepts of Waste Management. The Review has sufficiently addressed itself on several key issues and aspects of Waste Management regarding the research question investigated in this study. As such, the literature review mainly focuses on the following fundamental concepts and applications.

2.1 The Textile Knitting Industry

Knitting can be defined as combing a piece of thread with two needles in to a piece of fabric and this is a technique of producing fabric from a strand of yarn or thread. Unlike weaving, this does not require large equipment, so more recently knitting has become less as a necessary skill and more as a hobby. The oldest artifact with a knitted appearance is a type of a sock. It is believed that socks and stockings were the first pieces produced using techniques similar to knitting. As time andtechnology changed this was popular among people and this has helped to popularize the revival of the craft. Knitted fabrics are divided in to two basic types namely weft knitted & warp knitted. Weft knitted fabric will divide as single jerseys (which are plain knit & purl) & double jerseys (which are rib and interlock). And at the same time Warp knitted fabrics will divide as Tricot and Rachel. In general the rate of production of a knitting machine is four times greater than the weaving looms since the machine width is not related to operating speeds of machines. A unique advantage of knitting is that the complete products such as sweaters, upholstery can be produced or fashioned directly on the knitting machine without any restriction. The high productivity rate should be an economical factor in favour for knitting, but the increased cost of yarn is more than offset any savings in production cost. This is because the loop yarn shape imparts bulk and more yarn is required to produce a knitted fabric than to produce a comparable woven fabric. Also the loop structure is porous and

provides less cover than a woven fabric that has yarn side by side, so in order to achieve an equal amount of power, small snitches, finer and more uniform yarns are used. Uniform yarns prevent the formation of thick and thin places in the fabric even though they are more expensive to produce. The loop structure contributes cut standing elasticity. That is separate from any elastic properties of the fibers and the yarns which are used. Loops can change shape by lengthening or widening, to produce stretch in any fabric direction. However knits may sag or snag. There are numerous types of knitting machines to produce knitting fabrics, ranging from simple, non-mechanical, highly complex and electronic. However, all produce various types of knitted fabrics usually either flat or tubular and of varying degrees of complexity. Pattern stitches can be selected by hand manipulation of needles, push-buttons and dials, mechanical punch cards or electronic pattern reading devices and computers.

2.2 Waste
Waste includes all items that people no longer have any use for, which they either intend to get rid of or have already discarded. Additionally, wastes are such items which people are require to discard, for example by lay because of their hazardous properties. Many items can be considered as waste e.g., household rubbish, sewage sludge, wastes from manufacturing activities, packaging items, discarded cars, old televisions, garden waste, old paint containers etc. Thus all daily activities can give rise to a large variety of different wastes arising from different sources. There are a number of different options available for the treatment and management of waste including prevention, minimization, re-use, recycling, energy recovery and disposal. Under EU policy, land filling is seen as the last resort and should only be used when all the other options have been exhausted, only material that cannot be prevented, re-used, recycled or otherwise treated should be land filled. Waste can be regarded as a human concept as there appears to be no such thing as waste in nature. The waste products created by a natural process or organism quickly becomes the raw products used by other processes and organisms. Recycling is predominant, therefore production and decomposition are well balanced and nutrient cycles

continuously support the next cycles of production. This is the so-called circle of life and is a strategy clearly related to ensuring stability and sustainability in natural systems. On the other hand there are man-made systems which emphasize the economic value of materials and energy, and where production and consumption are the dominant economic activities. Such systems tend to be highly destructive of the environment as they require massive consumption of natural capital and energy, return the end product (waste) to the environment in a form that damages the environment and require more natural capital be consumed in order to feed the system. The presence of waste is an indication of overconsumption and that materials are not being used efficiently. This is carelessly reducing the Earths capacity to supply new raw materials in the future. The capacity of the natural environment to absorb and process these materials is also under stress.

2.3 Waste Elimination (TIMWOOD)

Waste elimination is classifying all the process activities into two categories. It is then possible to start actions for improving the value adding activities and eliminating the non value adding ones. Some of these definitions seem idealist, but this tough definition is important to the effectiveness of this key step. Once value-adding work has been separated from waste, then waste can be subdivided into non-value adding waste and pure waste. The clear identification of 'non-value adding work' is critical of identifying the assumptions and beliefs behind the current work process and challenging the reason or reasons behind those activities. The "seven wastes" identify the resources which are commonly wasted. They were identified by Toyota's Chief Engineer, TaiichiOhno as part of the Toyota Production System. This includes Overproduction, Unnecessary transportation, Inventory, Motion, Defects, Over-processing and Waiting (refer the below mentioned definitions). The main method of identification of waste is value stream mapping. Future state map will be plotted after reducing or eliminating the current state waste. Also this is the base for the whole research.

2.3.1 Unnecessary Transportation Each time a product is moved, it bears the risk of being damaged, lost or delayed. As well as costs are adding while without adding value. That transportation does notadd any value to the customer which they are willing to pay for the product. 2.3.2 Overproduction Overproduction happens each time a company engages more resources than needed to deliver to its customer. Companies go into large batch productions, because of long change over time. So that they exceeds the exact quantity ordered by thecustomer for a specific period of time. Operators should not produce more than the customer needs, in order to increase the productivity. Extra parts will be stored till it gets sold. Overproduction increases the amount of space needed for storing raw material as well as finished goods. 2.3.3 Inventory Inventory, can be in any of the forms like raw materials, work-in-progress (WIP), or finished goods. Inventory represents an expense to the company while that has not yet produced an income from the customer. Any of these three items are not actively add value to the process and hence they called as waste. 2.3.4 Defects Whenever defects occur, extra costs are incurred to rework the part and to reschedule production. So this affects the total process which has a pre-determined output per limited time. Defects can also incur cost of scrap, if the damaged products couldnt rework. Ideally this refers to a process with zero defects, but generally there is a normal loss in each & every process. 2.3.5 Over Processing Over-processing occurs any time more work is done on a piece than what is required by the customer or time spend on an unnecessary system which can be indirectly related to the production. This also includes using tools that are more complex or expensive than absolutely required. By over-processing, the company keeps on increasing the cost of

production. But they cannot increase their selling price as the customer is not willing to pay extra, which will ultimately reduce the profit margin of the company. 2.3.6 Waiting Products or goods are waiting whenever they are not in transport or being processed. In traditional manufacturing environment, a large part of an individual product's life is spent waiting while almost all the process has WIP. 2.3.7 Motion As compared to Transportation, Motion refers to the workers or equipments. This has significance risk to damage, wear and safety in an industrial area, if they engage with those activities unnecessarily.

2.4 Total Productive Maintenance

Total Productive Maintenance (TPM) is a support function that enables to increase machine time availability and effectiveness. As companies make use of lean techniques, wasted steps are eliminated in the manufacturing process to provide more time, processing material and making products required to the customers. TPM uses the concept lean, to improve maintenance functions providing high uptime and optimum processing speeds. TPM itself is a powerful efficiency improvement tool. It facilitates the complicated nature to optimize parts availability, manpower requirements, and skills training and break down evaluation. But TPM is most beneficial as an inner part of an overall lean implementation of a company. Many companies have found that TPM does not work properly unless the entire organization understands and practices lean and at the same time lean does not work without the support of effective TPM. 2.4.1 3M (Muda-Mura-Muri) Sources of waste exist everywhere, and waste shows up in many different ways. Three Ms describes the waste in Lean: 1. muda: Waste; any activity that does not add value

Type -1 muda: Non-value-added, but necessary for the system to function Type -2 muda: Non-value-added and unnecessary for the system to function; the first targets for elimination 2. mura: Waste due to unevenness or variation 3. muri: Waste caused by overstressing people, equipments or systems 2.4.2 Toyotas Building Blocks According to Jeffrey K Liker, Toyota developed their production philosophy on four basic principles. Principle 1:Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. Principle 2:Create continuous process flow to bring problems to the surface. Principle 3: Use "pull" systems to avoid overproduction. Principle 4:Level out the workload (heijunka). Principle 5: Build a culture of stopping to fix problems, to get quality right the first time. Principle 6: Standardized tasks are the foundation for continuous improvement and employee empowerment. Principle 7: Use visual control so no problems are hidden. Principle 8: Use only reliable, thoroughly tested technology that serves your people and processes. Principle 9: Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Principle 10: Develop exceptional people and teams who follow your company's philosophy. Principle 11: Respect your extended network of partners and suppliers by challenging them and helping them improve

Principle 12: Go and see yourself to thoroughly understand the situation (genchigenbutsu). Principle 13: Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly. Principle 14: Become a learning organization through relentless reflection (hansei) and continuous improvement (Kaizen)

2.5 Productivity
Productivity is about the effective and efficient use of all resources. Resources include time, people, knowledge, information, finance, equipment, space, energy, materials. To manage the resources of a business it is essential that to;

understand exactly what needs to be done to meet customer demand establish a plan that clearly identifies the work to be carried out define and implement the methodologies that need to be used to complete all activities and tasks efficiently

establish how long it will actually take to complete each activity and task determine what resources you need to meet the plan provide the necessary resources and initiate the plan constantly monitor what is actually happening against the plan identify variances and take the relevant actions to correct them or modify the plan

Productivity is often linked with time and motion. The evidence of time and motion studies was used to put pressure on workers to perform faster. Not surprisingly these studies had a bad press as far as workers were concerned. Similarly the image of time and motion doesnt sit well with as productivity specialists. The real responsibility for productivity or performance improvement should be largely in the hands of those organizing the work rather than the individual worker.

Productivity is the only sustainable way to increase value-add and grow incomes and it must be the key driver of the economic growth. The Government will focus on helping businesses and workers improve their productivity and continue to provide support through many programs and schemes.

2.6 The Concept of Lean Manufacturing

In order to eliminate waste in the knitting process, it has recommended to use Lean tools and techniques effectively. Lean manufacturing is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. From the customers perspective, value is defined as any action or process that a customer would be willing to pay for that process. Basically, lean is focusing on giving higher value with less work. Lean manufacturing is a process management philosophy derived mostly from the Toyota Production System (TPS) which identified as Lean only in the 1990s. It is well known for its focus on reduction of the original Toyota seven wastes to improve overall customer value, but there are different arguments on how this can be best achieved. The steady growth of Toyota, from a small company to the world's largest automobile manufacturer, is effortless because of this high focus. Lean manufacturing is maximizing efficiency based on optimizing flow toward decreasing waste, and using effective methods to decide what should continue, rather than traditionally accepting and repeating ideas. It also includes such ideas as the folk wisdom of thrift, time and motion study,the Efficiency Movement, and Faradism. Lean manufacturing is often seen as a more refined version of earlier efficiency efforts, building upon the work of earlier leaders such as Taylor or Ford, and learning from their mistakes.

2.7 Summaries of Key Lean Concepts

The main concept of lean manufacturing is enriched with many sub philosophies. Here the summarized sub philosophies are presented in relation to the scenario at the company.

2.7.1 Continuous Flow This refers to producing and moving one item at a time or a small and consistent batch of items through a series of processing steps as continuously as possible, with each step making just what is requested by the next step. It is also called one-piece flow, singlepiece flow, and makes one, move one. 2.7.2 Kaizen Kaizen emphasizes a continuous improvement of an entire value stream or an individual process to create more value with less waste. There are two levels of kaizen: 1. System or flow kaizen focuses on the overall value stream and 2. Process kaizen focuses on individual processes. This will enable the company to reach its maximum with a little effort in the each budgeted period. 2.7.3 Kanban (Kamban) Kanban is a concept which represents the idea that the production should happen only as a result of the pull from the customer. It became an effective tool to support the running of the production system as a whole. In addition, it proved to be an excellent way for promoting improvements because reducing the number of kanban in circulation, highlighted problem areas. When a product is made in direct response to the desires of the customer, the entire process is more efficient. Kanban is not an inventory control system. Rather, it is a scheduling system that tells you what to produce, when to produce it, and how much to produce. 2.7.4 Lean Thinking A 5-step thought process was proposed by James Womack and Dan Jones in their 1996 book Lean Thinking in order to guide managers through a lean transformation in production. The steps are: 1. Specifying value from the standpoint of the end customer. 2. Identifying all the steps in the value stream.

3. Making the value creating steps flow toward the customer. 4. Making customers pull value from the next upstream activity. 5. Pursuing perfection. 2.7.5 Value Stream This defined as All actions, both value-creating and non-value-creating, required moving a product from the concept stage to launching it and from order to delivery. These include actions to process information from the customer and actions to transform the product on its way to the customer. So basically the value stream argues that a company should only continue activities which are adding value to end customer while eliminating non value adding activities. 2.7.6 Value Stream Mapping A simple diagram of every step involved in the process of material and information flow, is required in order to bring a product from order to delivery. A current-state map follows a products path from order to delivery to determine the current conditions. A future-state map sets out the opportunities for improvement, identified in the current-state map to achieve a higher level of performance at some future point.

2.8 Case Study Apparel Industry Waste Management

The need for effective apparel waste management is motivated by the increasing cost and productivity in the apparel industry. The aim of this study was to identify the current solid waste disposal and recycling practices of the apparel industry in South Africa and to determine their attitude and willingness towards recycling, their perception of the feasibility thereof, barriers to recycling and marketing strategies that would be appropriate for products made from recycled materials. A structured questionnaire was mailed to apparel manufacturers in South Africa. They are fairly positive towards recycling, with consideration of economical feasibility. Phi-coefficients show no practically significant relationship between company size and the use of recycled materials.

The most important barriers to recycling are lack of equipment and technology, lack of material to recycle and lack of consumer awareness. Marketing strategies for recycled products are recommended. It is concluded that consumer awareness and knowledge regarding recycled apparel products should be developed in order to ensure a market and that apparel manufacturers should be encouraged to recycle more extensively. 2.8.1 Waste Disposal Practices Although various types of waste, such as fabric-cutting waste, thread waste, notion scraps, waste paper, yarn cones and tubes and packaging waste are produced by apparel manufacturers, most of the waste is fabric-cutting waste. The fact that the fabric waste of more than half of these companies landed in landfill sites, shows that they had not yet seriously thought about other possibilities, or that they are not equipped to handle the waste in other ways. It is clear that there is an urgent need for attention to recycling fabric waste in the apparel industry globally, especially when considering the large amounts of fabric-cutting waste generated in clothing manufacturing industries (Tuggle 1995). As much as 1520% of fabric is wasted in the cutting process (Frost 2008). Regarding fabric-cutting waste disposal costs, the majority (71.2%) indicated that cutting waste disposal costs made up less than 5% of their operating budget. The fact that it is not overly expensive to dispose of cutting waste emphasizes that this factor is also not a very important motivation for recycling. However, a quarter of the respondents were not aware of what the disposal costs were. Effect sizes were statistically determined, and indicated a medium practically significant relationship (d = 0.5) between manufacturers who have an accurate knowledge of what their cutting waste disposal costs are, and the waste disposal costs as a percentage of their operating budget. Those who had accurate knowledge about their cutting waste costs spent less on disposal of cutting waste.

2.8 Bibliography
Total Systems Development. (2009) Total Systems Development. [Online]. http://www.leanmanufacturing.com Hayleys MGT Knitting Mills PLC. (2006-2007) Official Website. [Online]. http://www.hayleysmgt.com/ Matthias Holweg, The genealogy of lean production. Journal of Operations Management, 2007. Lean Enterprise Institute, Inc., Lean Lexicon, 4th ed., Chet Marchwinski and John Shook, Eds. MA 02142, USA: Lean Enterprise Institute, March 2008.
Toyota Motor Corporation. (1995-2010) Official Website. [Online]. http://www2.toyota.co.jp

Lean Enterprise Institute, Inc., Lean Lexicon, 4th ed., Chet Marchwinski and John Shook, Eds. MA 02142, USA: Lean Enterprise Institute, March 2008.

Jeffrey K Liker, The Toyota Way, 1st ed.: McGraw-Hill, December 17, 2003.

Jeffrey K. Liker and David Meier, The Toyota Way - Fieldbook, a practical guide for implementing Toyota's 4Ps, 1st ed., Jeffrey K. Liker and David Meier, Eds. New York, United States of America: Mc Graw - Hill, 2006.

MAS Holdings. (2009) official website. [Online]. http://www.masholdings.com/

James P. Womack and Daniel T. Jones, The Machine That Changed the World.: Daniel Roos, 1990. John Wiley & Sons, Inc., Lean For Dummies, 2nd ed., Natalie J. Sayer and Bruce Williams, Eds. Indianapolis, Indiana, United States of America: Wiley Publishing, Inc., 2007.

N. Gokarneshan, Fabric Structure and Design, 2nd ed., N. Gokarneshan, Ed. New Delhi, India: New Age International (Private) Limited, 2004.

J. P. Womack and D. T. Jones, Lean thinking to guide managers through a lean transformation., 1996.

Abend, J. (1994) The green wave swells. Bobbin, 35, 9298. Babbie, E. & Mouton, J. (2001) The Practice of Social Research, pp. 122. Oxford University Press Southern Africa, Cape Town, RSA

Divita, L. & Dillard, B.G. (1999) Recycling textile waste: an issue of interest to sewn products manufacturers. Journal of the Textile Institute, 90, 1426. Dockery, A. & Kaloge

CHAPTER 03 RESEARCH METHODOLOGY

3.1 Company Background

With an initial investment of US$ 4 million, Hayleys MGT Knitting Mills PLC commenced operations in 1992 with an employee base of a mere 40. Today, it has grown into a large organization of a total investment of US$ 200 million with an employee base of 675. The annual turnover today is in excess of US$ 58 million, proving it to be an organization with a potential for growing by leaps and bounds which encouraged the researcher to select this organization for the research.

3.1.1

Company Products

Their products include an interesting range of Cottons, Polyesters, Spandex, Lycra, Rayon Wool, Viscose, Modal, and a multitude of such blends. They also produce single Jersey, Interlock, Fleece, Polar Fleece, Rib, Pique, Structures, Pointelle and Marl fabrics and moreover a comprehensive Flat Knit section which produces bands & collars, and can accommodate Jacquard and Tipping.

Product Variations

At the moment HMGT produces one thousand five hundred plus different products according to different customer specifications. These variations include structure, material, finishing, color & other specific surface variables.

Products Coding System

Due to their product variation HMGT uses an inbound product coding system for their reference purposes and ease of operation. There is a particular code for each fabric produced in the mill. This code is relevant to the factory and it is called as the quality. Knitting specifications are made according to this quality and at the same time it has given the identification to certain fabrics.

E.g.: JCO 231 J- Jersey {Fabric Type} CO- Cotton {Composition} 231 - Quality Number

In normal fabrics, the above example JCO 231, codes are as follows: CO- Cotton 100% PE- Polyester 100% CP- Polyester Cotton Blend, Cotton Rich PC- Polyester Cotton Blend, Polyester Rich PW-Polyester/ Wool

F- Fleecy I- Interlock L-Lacost T- Terry

L- Lycra S- Spandex M-Modal J Jersey

3.1.2 Clients

This production facility operates with many foreign clients, who are dominant players in the textile processing industry. Marks and Spencer (M&S), Next, Bhs, Tesco, Sainsbury, Adams, Nike, Woolworth, Mother-care and Decathlon are some of the well known clients of Hayleys MGT knitting mills PLC. 3.1.2Production, environmental accreditation

The company is accredited for their product quality, by almost all of their clients including Marks & Spencer, British Home Stores, Mother-care, NEXT, TESCO, Sainsbury, Adams & Woolworth and LACE. Also this production facility has received several international and local certifications and awards which has act as order qualifiers for global level businesses.

3.2 Conceptual Framework

Conceptual framework is the relationship between independent & dependent variable and it can be shown in following figure. In this research, the conceptual framework is the Waste Management. The productivity improvement in an organizations manufacturing process is the study of this research. The productivity improvement of the organization depends on many reasons. Here the researcher has given the significant attention to manage the seven wastes which were identified by the Toyotas Chief Engineer as part of the Toyota Production System with the intention of improving the organizational productivity.

Independent Variables Overproduction

Unnecessary Transportation Inventory

Intermediate Variables

Dependent Variables

Factors affecting for the productivity improvement

Productivity Improvement

Motion

Defects

Over Processing

Waiting

3.3 Research Method

3.3.1 Primary Data Collection

The primary approach for conducting this study is the case study method. Interviews, observations and archival sources were used to collect data. Interviews were conducted with the operational staff, unit managers and quality managers. In person interviews were conducted with those who were most familiar with the manufacturing process. The other sources of data were gathered by unstructured interviews from other management and non management personnel during the period of this study.

Direct observations were made on the shop floor and time studies were conducted for relevant work stations. A door to door processing time and lead time data were collected to develop the current state map of the process. Value Stream Mapping tools were applied to develop the current sate map and the future state map.

3.3.2

Secondary Data Collection

Here are some secondary data collection methods that the researcher used in this research at the given time period. 1. Archival sources of Hayleys Knitting Mills PLC relating to the manufacturing process 2. Articles on other Lean manufacturing researches 3. Archives from researches which have done by others regarding the waste management and productivity

3.3.3

Method of Data Analysis

The collected data has analyzed by using quantitative and qualitative methods. Statistical analysis does by using descriptive statistics and simply described the data using the percentages. Data will be presented using the bar charts, tabulations, tables and diagrams. These will be use to analyze the main defects according to the Pareto analysis, average value adding and non-value adding time in activities etc

CHAPTER 04 PRESENTATION AND DISCUSSION OF RESEARCH FINDINGS

4.1 Data Presentation
4.1.1 Production Process

The production process of the HMGT knitting mill is explored in this section of the report. General introduction about department procedures, their duties are explained, followed by a brief description about the machinery they use and some other special activities, under relevant sub headings in order to give a good understanding about the process as well as the company.

(1) Knitting Department Weft Knitted

Knitted Fabrics

Fabrics
Woven Fabrics Figure 4.1 - Fabric Categories

Wrap Knitted

Hayleys MGT Knitting Mills PLC is used to produce only Weft Knitted fabric in their production process. Knitting is a method of fabric formation in which the loops made by each thread are formed width wise in the fabric. All the loops in one course are produced from the single supply. In this system, the yarn may be fed, so as to traverse forward and backward across the fabric (flat knitting) or it may be fed continuously in the same direction (circular knitting).

Thus, in the mill, there are two types of machines to manufacture two different fabrics according to their end uses. In the mill, Circular knitting machines are used to manufacture circular knitted body fabrics and flat knitting machines are used to manufacture flat knitted fabrics which are used as material for collars, arm bands and cuffs. When it comes to

circular knitting machines, various fabric structures can be produced by using them. There are three main types of fabrics with a huge variety under each type. The following are the most commonly used structures.

Table 4.1 - Structure and the variation of knitted fabrics Single Jersey (Plain) Single Jersey variations, Lacoste, Pique, Fleece Double Jersey Fabrics Rib Interlock Structured Fabrics Includes both single jersey and double jersey Jacquard fabrics

Polar fleece

In General, two types of circular knitting machines are found. Namely; 1. 2. Single cylinder machines which produces single jersey fabric Cylinder and Dial machines which produces double jersey fabric

Usually the customer sends a piece of fabric as the specification along with the order details which allows HMGT to serve with the exact product needed. It is analyzed to identify the factors such as Fabric structure, CPI (Courses per Inch), Yarn type & count, Quantity and Weight. Many of these factors need to be carefully adjusted even from the initiation of this knitting process. Color, designs can even be created using colored yarns. Marl yarns are used to create special appearance in special fabrics. Also Marl yarns have a specified process to follow in dyeing and finishing as well.

Table 4.2 - Knitting Department Machinery Details Type of Machine Fleecy Interlock Jersey Rib Quantity 16 47 62 51

Terry Jersey Flat Knits (Collars)

50 34

The first roll knitted from each machine setup is inspected at the inspection area located in the knitting department itself. If any repeated errors are found, technicians are informed to make the relevant adjustments. Due to the available machine capacity, knitting department produces knitted fabrics according to customer specifications at their maximum capacity. This creates an over production situation from the seven wastes point of view. But sometimes they have to generate an inventory as its difficult to handle a large order with the available capacity from a specific type. And increasing capacity will not give a solid answer to this question as the order trends depends purely upon the customers.

(2) Preparation Department

The main responsibility of the preparation department is to provide fabrics with required preset qualities to dye house finishing department and brushing department. Mainly they use slitting machines and sewing machine to preset fabrics. But at the moment, the preparation department has to manage the inventory of knitted fabrics, as the knitting department is running at its full capacity. So according to the process flow diagram huge inventory of knitted fabrics generate in between the knitting process and the preparation process. This inventory is stored in an intermediary store at the preparation department premises which is popularly known as the Grieg store.

(3) Dye House

Dye house is one of the most important departments in the knitting mill. Dye house is the location which converts developed samples dyed in the dye lab in to bulks. Chemicals and dyes used in the dye house are similar as those used in color laboratory. There is a color kitchen to deliver necessary dyes and chemicals to the dyeing machines. Delivering of these dyes is done either automatically or manually.

Machinery used in the Dye house

Batch dyeing is the most popular & common method used for dyeing of textile materials. There are mainly four brands of machines used in the dye house which are capable of dyeing both natural and synthetic fibers. They are Scalavos, Thies, Fongs and Yousen (AK)

Thies and Sclavos are the ones which are frequently used in the dye house due to their higher capacity. Thies, Scalavos, Fongs machines are used to dye cotton, Polyester, Modal, and Poly cotton fabrics. AK machines are used only to dye Wool fabrics. Fabrics which are fed to machines are in tubular form. However, fabrics containing Lycra fibers can cause dye variations due to Lycra fibers are not getting properly dyed. Therefore fabrics with Lycra fibers are silted and preset, using chemicals before dyeing and thereon, fed in to dye machines after bagging.

Above mentioned computerized dyeing machines have installed dye programs in the dyeing department. Also some special treatments such as Bio polishing can be done using dye machines. There can be dye variations occurring throughout the fabric after dyeing, which can be rejected by the customer who purchases these dyed fabrics. Therefore, treatments are done in the factory to minimize the mismatches. The procedure named boiling off is done to reduce color, and a fresh bath is given to the fabric in order to increase hue and stripping is done to remove the dye. However, these treatments may have an adverse effect due to the durability of fabrics and it will be high in the stripping process.

(4) Printing Department

The main responsibility of this department is to print certain customer specified patterns in required colors on the preset fabric. In the plant, HMGT operates with two different types of printing machines; namely transfer printing machines and rotary printing machines. Transfer printing has a good demand from the Nike brand. The main responsibility of the printing department is to print relevant initial samples for client

confirmations and bulk printing on fabrics. Only 9.51% of the major products are going through this department.

(5) Brushing Department

In the Brushing section of the Hayleys MGT knitting mills, mainly two types of fabrics are manufactured. They are Brushing fabrics & Velvet fabrics. This department engages with the operation of dry finishing which serves particularly the cleaning of woven wool fabrics. Furthermore, the raising effect can be affected by brushing in such a way that the raised hairs point in a specific direction, or become entangled with each other. The brushing effect is given by using mechanical process such by using brushing rollers.

The fabrics, which are used to brush or velvet, are thicker than the ordinary jersey, interlock or rib fabrics. Therefore, fleecy or polar-fleecy fabrics are normally used to give these effects as these structures have larger loops and these loops can be cut without damaging the fabric structure Brushing is used on sweaters, scarves, knit underwear, and wool broadcloths. These fabrics are mostly used to wear in the winter season to give thermal insulation to the wearer.

Machinery used in the Brushing Department

Several special machines are needed in the brushing section other than the relax dryer and the stenter machine. to perform the brushing effect efficiently namely; Brushing machines, Shearing (cropping) machines, Combing machines, Tumble dryers and Sueding machines. Table 4.3 Brushing Department Machinery Summary Type of Machine Brushing Sueding Shearing Combing Tumblers Stenter Quantity 08 01 02 02 19 01

(6) Finishing Department

Textile finishing can be identified as all the processes through which a fabric is passed after bleaching, dyeing, or printing in preparation for the market or use. Finishing includes such operations as heat-setting, napping, embossing, pressing, calendaring and the application of chemicals which changes the character of the fabric. The term finishing is also sometimes used to refer collectively to all processing operations above, including bleaching, dyeing, printing etc. Finishing is performed to improve the appearance, texture or performance of a fabric. Sometimes there are special finishes to increase various properties in fabrics mainly according to the customer desires.
Machinery used in the Finishing Department

Finishing department has got the advantage of running many kinds of machineries to set the required final quality of the fabrics. But on the other hand, they had to allow various process paths which complicate their day to day operations. In general the finishing department uses five different types of machines other than hydro extractor which is used in between the dye house and the finishing department. Table 4.4 Finishing Department Machinery Summary Type of Machine Stenter Machine Compactors Slitting Machines Relax dryers Calendars Quantity 05 03 06 02 02

Special Finishes

In setting the general finishing fabrics which are open or tubular in formation, there are special finishes given to the fabrics according to the customer requirements. Some of these special finishes practiced in the factory are Teflon finish (oil and stain resistant),

Outlast finish (Thermo regulation and retaining finish), Mosquito resistant finish, Cool cotton and real cool cotton (increases the comfort ability for the wearer).

(7) Inspection Department

The purpose of this section of the mill is to inspect fabrics visually and check the fault rate occurred in the fabrics. Fabrics are 100% visually inspected in this section. This is an important department in the mill because since this inspection process, fabrics are dispatched and transported to the textile processing factories as their input. Therefore, this is the final place to identify and get corrective actions for any internal failures. Quality assured fabric rolls are dispatched while condemned rolls are stocked after rejection. Furthermore, some fabrics which are rejected can be corrected, but only after informing the relevant departments.

Defects occurred in the fabrics can be classified mainly according to the divisions through which the fabrics are processed. They are mainly Knitting, Dyeing and Finishing. The major defects occurred from each department is categorized under the Discussion of the Research Findings.

There are two widely using fabric inspection methods in the world namely 4-point system and 10-point system. Among them, Hayleys knitting mills use 4- point system as their standard inspection system. Basically, the following formula is used to calculate the defect percentage of a fabric.

Points per 100 Yards =

Total points scored in the roll Width of the fabric (inches) * Total yards inspected

Table 4.5 Points table use in the production Department Defects (in inches) Points Allocated For liner defects
0-3 3-6 6-9 >9 1 2 3 4

For holes
4 4 4 4

In the 4-point system, points are allocated for any defects occurred at that time. If the sum of the faults will get over 28, that fabric roll will be rejected in the mill. And also if an average fault value exceeds 40 in a batch, the batch will be rejected.

4.2 Discussion of Research Findings

The company manufactures products with around 1500 variations. So initially the main products were selected with the assistance of Pareto analysis. In this analysis both length and weight were used, since HMGT needs both these parameters at the quality control stage. Table 4.6 Main products according to the Pareto Analysis Product Product Group Family % Volume (m) 01 02 03 JCOL56 ICO220 IPE012 JCOL/JCOS ICO / BICO JCO / FCO / SDPE / IPE Lycra Hands Polyester 11.63% 9.80% 9.09% % Volume (kg) 9.71% 12.45% 6.72%

04 05

PJCOL56 JCO131

PJCOL JCO / FCO / SDPE / IPE

Lycra Jersey

5.84% 5.33%

4.87% 5.85%

06

SDPE050

JCO / FCO / SDPE / IPE

Polyester

4.36%

3.31%

07 08

JCOS85 JCO054

JCOL / JCOS JCO / FCO / SDPE / IPE

Lycra Jersey

3.34% 3.01%

3.41% 2.75%

09

PJCO240

PJCO / PICO

Jersey

2.90%

2.72%

10 11

JCOS129 JPC011

JCOL / JCOS JCO / FCO / SDPE / IPE ICO / BICO JCO / FCO / SDPE / IPE ICO / BICO JCO / FCO / SDPE / IPE JCOL / JCOS PJCO / PICO JCOL / JCOS JCO / FCO / SDPE / IPE

Lycra Polyester

2.86% 2.73%

2.92% 2.37%

12 13

BICO174 FCOS57

Interlock Lycra

2.70% 2.45%

3.23% 3.57%

14 15

ICO048 JCO240

Interlock Jersey

2.33% 2.12%

2.41% 1.98%

16 17 18 19

JCOS41 PICO174 JCOS44 BJCO054

Lycra Interlock Lycra Jersey

1.97% 1.64% 1.64% 1.60%

2.25% 1.92% 1.67% 1.47%

20

JCO010

JCO / FCO / SDPE / IPE

Jersey

1.56%

1.09%

21

JCO056

JCO / FCO / SDPE / IPE

Jersey

1.50%

1.37%

22

JCO231

JCO / FCO / SDPE / IPE

Jersey

1.42%

1.30%

23

IPE037

JCO / FCO / SDPE / IPE Total % Volume

Polyester

1.31%

1.05%

83.13%

80.39%

To summarize this report, the main discussion and illustrations were carried out only for the results related to JCOL56 which is their main product. And all the calculations were done for a standard 32 rolls sized batch, without reworks. The idea of briefing the full process depending on the product and the report categorizes one single product in to two groups based on their behaviors (Product Group) and material/ material structure (Family).

Figure 4.2 - Product Volume Variation after the Pareto Analysis

4.2.1 Seven Types of Wastes

The underlying principle of this research is to reduce waste and to have clients who are better satisfied by providing required goods at required quantities in the required time. And also this is

the main focus area of the research in terms of Waste Management. 1) Waste Type 1 : Unnecessary Transportation

The following information regarding unnecessary transportation of departments was collected during the study and effective, different solutions can be developed with the options available to the company. HMGT carries out their operations in three main buildings which are physically separated. So with the process, each and every product which is included in the Pareto analysis has to flow through these buildings. This has become a huge waste that act as a catalyst for other wastes such as waiting etc. But when it comes to the inside process of each department, many of those processes show an optimized solution in the current state. This occurred due to the machine intensiveness of the process and only the finishing department which has several types of machines can be improved with the results of the study.

Material Flow Chart With the variations of HMGT products, the final solution has to ensure that all main products flow in an optimum way, through the recommendations. Also the non technical management should convince with the analyzed data to implement the proposed suggestions. Due to these reasons the six material flow charts for six main products should develop, which aids visually to use in these transportation solutions.

Waste Type 2: Over Production In the HMGT scenario, an overproduction was clearly identified and quantified in the knitting department. The department produces at their operating capacity irrespective of the delivery date to the customer and they sometimes create an unnecessary pull at the beginning of the process due the massive capacity which they operate.

Table 4.7 - Types & total capacity available at the knitting department Type Quantity Machine Capacity (month) Current Operating Capacity (month) 1. Fleecy 2. Interlock 3. Jersey 4. Rib 5. Terry Jersey 6. Flat Knits 34 N/A N/A N/A 16 47 62 51 50 60,000 kg 210,000 kg 350,000 kg 220,000 kg 280,000 kg 20,000 kg 110,000 kg 260,000 kg 80,000 kg 180,000 kg 33.33 52.38 74.29 36.36 64.29 Operating Capacity (%)

(collars) Total 260 1,120,000 kg 650,000 kg 58.04

Table 4.8 - Overproduction quantities in the month of December 2012 Product Rolls Weight (kg) Percentage of the monthly capacity 01 02 03 04 05 06 07 ICO48 ICO220 JCOL56 JCOS144 PJCOL56 SDPE050 SDPE021 755 105 110 420 160 20 35 15,100 2,100 2,200 8,400 3,200 400 700 2.097% 0.291% 0.305% 1.166% 0.444% 0.055% 0.097%

08 09 10

TPE477 TPE488 TPE514

45 40 115 1805

900 790 2,300 36,090

0.125% 0.109% 0.319% 5.002%

But they have to produce in advance in order to facilitate higher customer demand for specific products in certain months which has identified according to the six months sales forecast. For example if many of their customers place orders for Fleecy to deliver after six months, knitting department cannot face that demand with the available capacity It follows that they have no options other than developing an inventory in between the knitting department and the preparation department. However the time in the store that the inventory exists can be reduced, since they keep a stock of 35 inventory days in average.

Management Perspective In the case of over production there is a directly visible cost component as well as an indirect cost component of production cost. So the flexibility of the work force, storage cost options and money in the form of inventory should analyze critically in this section.

Flexibility of the Work Force In the present context Hayleys MGT knitting mill runs their factory 24 hours a day with three different set of employees who work on shift basis. And the general factory employees are working on a cyclic routine which has a dual day shift, a dual night shift and a 48 hour break. So the company has to critically evaluate the availability and flexibility of the current work force while carefully considering both financial and non financial benefits with the future demand.

If the company applies this concept to the current system with a short term view, that can end up with variable wage rates for the operational level workers due to the reductions in the current number of working hours in order to eliminate overproduction. But the company can strategically solve this problem by providing preventive maintenance training to the operational workers while not reducing their current number of working hours. This will increase the production capacity in the long run without any additional cost due to the reductions in machine down time.

Money in the form of inventory The following calculation is done for the hidden interest cost, which occurs with a 32 roll standard sized Batch. The Company has financed their operations with six bank borrowings from four different banks in Sri Lanka. Four of those loans have variable interest rates and the other two had taken at a fixed annual rate of 6.5%. So this interest rate was used for the hidden interest cost calculation in the form of inventory. The calculated daily rate is 0.00514% assuming a year with 365 days. Table 4.9 - Interest cost for a standard size 32 roll batch Product Current (Days) JCOL56 ICO220 IPE012 PJCOL56 PJCO240 BICO174 30 44 35 30 40 35 Future (Days) 15 15 15 15 15 15 Quantity Material (m) 2620 1867 2975 2630 2285 1677 cost (m) $1.95 $1.92 $1.36 $2.72 $2.40 $2.08 Total Value $ 5109 $ 3584 $ 4046 $ 7153 $ 5484 $ 3488 Saving (Days) 15 29 20 15 25 20 Saving (USD) 394.01 534.37 416.04 551.65 704.89 358.66

With the effective cost control the company can reduce the total finance cost for the period and this will be a really practical solution for the current financial crisis which

faces by the company. Also there might be a situation where the company would be able to identify the reductions in the total factory running time. With those types of options HMGT can either reduce the current operating cost while having a good focus on both financial and operational details of the process.

1) Waste Type 3 : Inventory At the present stage, Hayleys MGT knitting mills operates with inventory buildups in between all the processes. And according to the information collected during the study, HMGT cannot completely eliminate inventory in between processes as this is not a continuous production line. So in order to smooth the production they had to keep a batch sized inventory in between all the processes. Also they will need a visualize inventory management system to synchronize production as HMGT has other sequential sub processes such as printing and brushing. The company uses different types of manual recorders in each departmental level to record process & batch data which has complicated the current control of production from one single point. Also same data sets have duplicated in many of the places. Table 4.10 - Record keeping documents in each department Departments 1. Preparation Batch Status Grieg/Preset Recorders Preset priority log & current preset log Batch handover log & WIP file Batch transfer log at scale & WIP file Batch transfer log at scale WIP file & Batch transfer log at scale

2. Dye House 3. Printing

Dyed Printed

4. Brushing 5. Finishing

Brushed Finished

Management Perspective

In the inventory point of view Hayleys MGT mills has to consider many options before taking a decision regarding the inventory build ups. This will include external variables such as fluctuations in foreign currencies, storage space options and standard order quantities.

Storage Space Options When it comes to the storage space options, it is not really relevant for a company like HMGT which is situated in an area which has very low land value. So they do not have a solid, next best alternative use for the current storage spaces, but they can consider those places for future production capacity expansion.

Damages to the inventory With the unnecessary inventory build-ups, there is a high possibility to get damage due to natural reasons such as humidity or any other hazards available in the environment. Most of the situations HMGT found that stocks have shrunk with the time waited as WIP.

Fluctuations in foreign currencies Also the company has to consider the fluctuations in foreign currencies as HMGT import many of their raw materials from different parts of the world. So at the procurement stage they take all those in to consideration with the options of small sized lots or large sized stocks.

4) Waste Type 4: Defects This is the most visible and one of their biggest challenges at the current stage of operations in the knitting mill. In general this industry has a normal defect rate due to the parameters and the nature of the process.

Major Types of Quality Defects The major defects occurred in the production process of HMGT can be divided in to three main groups. a) Non conformance in GSM b) Non conformance in appearance Handle Selvedges issues Creases Pleats & orange peal Oil, stains and ash

c) Non conformance to dimensional stability Shrinkage Spiraled Curling (flatness) Narrow width

Defect Rate The defect rates of each and every department were calculated and the finishing department and the brushing department were recorded with the maximum number of identifiable defects. But the maximum defect rate was identified in the knitting department while the dye house remains the top defect maker with the total quantity. Knitting department recorded the highest defects occurring rate, as they are operating with the initiation of the fabric. Yarn bare, Tuck stitch, Drop stitch, Yarn break, Lycra break, Lycra jump, Bad sinker line, Bad needle line, Feeder line, Tension line, Pimples, Crease line and Oil stain are the defects those occur in circular knitting fabrics. Knitting holes is also a major defect in Knitting Fabrics in the process. Knitting holes can be due to yarn problems, bad needle, slobs and thick places. Defects can be caused due to wrong machine settings, wrong tension settings or bad housekeeping.

Main defects occurred in the dyeing section are tangles, dye creases, white marks, knots, tendering, elephant skin and dye unevenness. The main disadvantage of the defects in dyeing section is that HMGT cannot identify those defects until that process end and the total batch might have to rework as this is a process with an average of 8 hours.. Therefore they are recording maximum quantity of defects in the dye house. The Finishing department is also a division which has a large number of fabric defects due to the high number of machines they are operating in their section. Some of the main defects occurred in the finishing department are narrow width, bad edge, chemical marks, ash marks, color burnings, gum trim defects, chain marks, A-frame marks, adder crease, dirty marks.

Table 4.11 - Defects classification in the finishing department Process

Heat setting Hydro extraction

Identifiable Defects
Negligible amount of defects 1. Low chemical pick up due to inadequate extraction.

2. Defects created due to non following of sequence of operations (precedent constraints) 3. Cleanliness of the machine

Slitting & Lapping

1. Misaligned Slitting 2. Defects due to non following of sequence 3. Snagging 4. Fabric tensioning. 5. Bad handling (dirty)

Stenter Pad & drying

1. Harsh hand due to low pick up 2. Overloading the fabric 3. Widthwise color variation 4. Fabric PH and color variation

Compaction

1. Oil and stains 2. Loading on fabric 3. Moisture content (edge/whole)

Relax dryer pad

1. Oil and stains 2. Loading on fabric 3. Moisture content (edge/whole)

Calendaring

Zero defects

Management Perspective Scrap value and End product price As stated above, there is a normal rate of defects due to the nature of the process. So with the industry practice, HMGT knows the allowable defect rate for a specific client and all

clients are categorized according to their grade. This has enabled the company to charge higher prices from higher grade customers.

Rework Cost Rework cost depends on the defect identification stage. This can be mainly break in to two categories with internal failure identifications to external failure identifications. If any internal failures are identified, they can either rework at their cost with the available time or discuss with the client to get an applicable scrap rate. This gets more complicated with the clients who have financial penalties attached to specific delivery dates.

Customer Goodwill Even though HMGT can calculate the costs related to overtime and transportation charges for sending inspection staff to client sites, its hard to calculate the loss of customer good will and the effect on the company brand name. So even though the calculated rework cost is relatively low to the value compared to the revenue and annual profit figures it can create a higher impact in the future sales with the depreciating customer goodwill and company brand name.

5) Waste Type 5: Over processing As all external failures are considered in the defects section, only internal failures were considered in this section for over processed products within the period. The following table summarizes the main defects that occur in the production process. Table 4.12 - over processed quantities for 2012 last two quarters Defect 1. Stain 2. Off Shade Rolls
1538 1182

Kilos 30647 23537

% Volume
11.42% 8.77%

3. Length shrinkage 4. Low GSM 5. Oil 6. Ash 7. Rough Handle 8. Pressure Mark 9. Chemical Mark 10. High GSM 11. Narrow Width 12. Unlevel 13. Dirty and Stain 14. Pleats 15. Softener Mark 16. Migration 17. Bad Selvedge Total

1174

23376

8.71%

1122 842 733 596

21286 17019 15114 11909

7.93% 6.34% 5.63% 4.44%

593

11845

4.41%

533

10994

4.10%

515 377

9856 7504

3.67% 2.80%

333 336

6804 6546

2.54% 2.44%

268 241

5279 4778

1.97% 1.78%

226 209

4523 4150 215167

1.69% 1.55% 80.19%

Management Perspective

According to the data collected within the six month period, the annual projected rework quantity is 11.94% of the total production facility of HMGT. That means the total capacity of the company can be increased by less than 11.94% without any, cost if they can reduce the current level of internal failures.

6) Waste Type 6: Waiting Several waiting points were identified throughout the process during the study.

Management Perspective Hidden Cost By reducing the waiting time, the company can greatly reduce many of the hidden costs such as money in the form of inventory and other specific operational costs which are not shown in the surface due to the large quantities of stocks.

Large WIP At the present context, the company operates with a high level of work-in-progress quantities. HMGT financial department has valued the work-in-progress as at 31st December 2012 for 3,395,583 USD. The calculated total production for the month of November was 300,250 kg. So the WIP level is approximately 217.15% of the monthly output of the company at that month which can create huge savings with related financial costs.

Table 4.13 - Work-in-progress in each department in the month of November 2012 Department Weight (kg)

1 2 3 4 5 6

Knitting Preparation Dye House Finishing Printing Brushing Total

92,000 228,000 157.000 112,000 51,000 12,000 652,000

7) Waste Type 7: Motion As this is a more machine intensive industry, savings related to motion is relatively low than a labor intensive industry. However the following motion related data were identified during the study carried out at their premises.

Management Perspective This section will not allow huge savings compared to other sections due to the machine intensiveness and excess availability of workers in the industry. Also HMGT is paying a relatively low wage rate to the unskilled work force that hired via a manpower agency.

4.3 Recommendations With the results obtained in the case study, an options plan was developed for the company which consists both short term and long term implementable solutions.

4.3.1 Short term implementable solutions As HMGT is currently suffering with a financial crisis, the options in this section need zero or very little amount of financing.

Employee Empowerment This is one of the main focuses in the lean implementation stage as this will enable the employees who engage in specific tasks to take decisions with in a relatively large authority limit. With the successful practice of this concept, HMGT will enable to reduce the process waiting time and other related time which has previously waited for a higher level management decision which is not really required. For example, to get a specific spare part, the employee has to go through the department management which is not really essential. They can replace this system with the centralized data management solution where the employee can directly get the required spare from the RMS. The system will send an online note to the departmental management which will not create a loophole for theft and fraud while the essential processes runs smoothly with less interruptions.

Financial Perspective There will not be any financial out flows other than for employee training & brain washing programs and the company can even reduce this cost by using in-house consultants. But the effectiveness of that kind of in-house program is questionable due to the human reasons.

Productive Maintenance This is where HMGT can carry out their day-to-day maintenance in a pre planned manner. So that there will be very less unexpected breakdowns in the machinery use in the mill. But this system cannot be practice with only the maintenance staff and also the company has to educate and train general machine workers about the maintenance procedures with hands on experience to each of them on their own machines. Financial Perspective There will not be any financial out flows since HMGT operates with three shifts. So the company does not have to pay any overtime charges for the employees. And Hayleys MGT can schedule this training in a low season, limited for a six months period to

minimize the effect to the production. This will also enable the knitting mill to run the system with less number of maintenance staff who is not really adding value to the end product from the customer perspective. Supply Chain Tracker System As many of HMGs raw materials are imported from different destinations worldwide, they can simplify the procurement process with a supply chain tracker system. There are so many solutions available in this category which will enable the company to track even without an internal network and many of those can simply integrate with the centralized, monitoring & scheduling system (HOS). This will effectively interchange data with the internal system and the production planning team can always create the most reliable production plan with the help of this application with no production delays or stock outs.

4.3.2 Long term implementable solutions In this section more expensive solutions were introduced that can be carried out in the future in order to have a smooth production system with a lesser amount of waste.

Quick Change Over At the present context, one of the biggest delays that occur in HMGT is due to the machine set ups. They cannot eliminate those because of the nature of machinery they use and this is one of the reasons behind the dye house delays. The replacement cost of the machinery is estimated to 25,100,500 USD and the company has calculated their current machineries useful life as 15-20 years. So by the time they dispose those, they can plan to buy a set of machineries that have all the state of art facilities. But to get an effective use out of it, HMGT have to generate a solid replacement plan with expected useful lives as they cannot radically dispose all current machinery and commission new ones.

Centralized, Monitoring and Scheduling System (HOS) HMGT production process has many issues due to the lack of proper communication and scheduling channels. The centralized, monitoring and scheduling system will be the most optimum solution as it will have all the data related to production, scheduling and operational instructions at one centralized data base with different levels of accessing authority. This will be a customized solution for Hayleys MGT knitting mills PLC and will be popularly known as Hayleys Operating System (HOS) in the future.

Visual Inventory & Production Monitoring System This is a production simulation system where employees of HMGT can visualize the production process on a computer screen. This will be a valuable sub system for production planning, ware house and marketing staff as HMGT has many sequential sub processes such as printing, brushing etc. So the marketing staff can track the specific clients batches with the respective delivery dates and production planning team and effectively plan out the process with fewer delays with more effectively and productively.

Relocation Relocation will also become a possible scenario, if the company wants to start everything from the beginning. So that HMGT will have the options of exercising many of the solutions discussed throughout this case study. One of the main advantages of relocation is that management can easily change the philosophy with lesser resistance. But this option should be carefully examined as they are getting a competitive advantage with production cost due to the current location which is near the river kalu ganga.

CHAPTER 5 CONCLUSION

With the present financial crisis, Hayleys MGT knitting mills has to find cost reduction options which will enable the company to increase their profit margin without increasing the selling cost of the products. JCOL 56 at the current state is 4.64% and with the results obtained throughout the case study the developed future state has an improved ratio of 9.73%. So at the moment JCOL 56 production process has only 90.27% non value adding activities which was originally 95.36%. Therefore improving this process would bring in a lot of financial gain as well as the lead time reduction. Also the company can consume lots of non financial gains such as employee satisfaction and customer enlightenment. This can be improved further if the current building plan inside the factory premises is modified according to the proposed layouts. Due to the improved cycle efficiency the calculated saving will be US$ 761,319.00 per annum. The saving can be further improved by reinvesting the initial annual savings on building the correct infrastructure to further improve the efficiency. JCOL56 was running in a 77.74% efficacy; but with the recommendations, the new process can run in 83.17% efficiency. That is a 5.43% overall productivity improvement. This can be improve further more if the current building plan inside the factory premises can modified. But that is outside the case study, which enable the company to implement recommendations without or very little capital investment. At the current state mapping stage researcher has found that their value adding time to non value adding time ratio was high. With the improved working progress levels they could increase that ratio effectively. This was mainly possible by reducing non value adding time before preparation and dying processes. By improving the total efficiency by 5.43%, the company can improve their revenue by 1.3% and reduce their cost of sales by 1.5%, with respect to published financial report for the year 2011/12.

The company should have to identify the lean fundamentals from the top to bottom in the hierarchy in order to gain successful long term results through the proposed philosophy. This will also include customer focus; continuous improvements in the value streams; pull through system, maintenance of production flow, respecting people and striving for perfection. So the most underline principle is that anyone can use lean tools but the most difficult part is to sustain that philosophy in the volatile operational level. It is important of remembering the implementation of lean as a manufacturing discipline and that is only the start of a long journey, which can be very profitable for a company. Some changes will take a longer time to give its output. When lean is implemented and used properly, it can become an effective tool to drive the company towards continuous improvement. Once integrated into the organizational culture of the company, it becomes the standard for daily operations. Decisions will make in according to optimize all activity and for keep waste to a minimum. Companies that do this better than the competitors become more profitable regardless of outside economic conditions. According to change of the attitudes and the mindset of the current work force, HMGT have to heavily invest on employee training sessions which ensures the sustainability of the proposed lean manufacturing methods. Sustainability of the system would definitely be a complex and a difficult task as this is directly related to the behavior patterns, thinking levels and habits of the workers who worked there for a considerable period of time. The programs should overcome the natural resistance to change of the people. Application of lean manufacturing to knitting industry is challenging when compared with industries like garment industry due to the lengthier cycle times associated in the production and the scale of the product(s) being handled. Future researchers are encouraged to focus on developing a software based solution in dynamically handling the variety of the product categories being handled as the complexity of various combinations of resources involved with huge variety of products makes it further challenging in order to continuously reap the benefits of lean.