The Indian Card Clothing Limited (ICC) is a leading manufacturer of Card Clothing. Fibers, before they can be used as input for manufacture of Yarn, must be processed on a Carding machine. The process of processing fibers is called “Carding”. Card Clothing is a critical wearable component used in Carding Machines. ICC is one of the few companies in the world which manufactures card clothing to process every fiber on every type of carding machine-be it conventional cards or super high production cards.
The company now holds a 65% market share of the Indian spinning industry- currently the second largest in the world with 34 million spindles, behind China with 38 million spindles. Constant export growth has also made ICC a major player on the global stage.
Apart from its leadership position in India , ICC has satisfied customers in virtually every part of the globe- from Asia and Africa to Europe and USA .Problem Definition
In the year 2000, senior management at ICC realized that it was losing market share and there was a steady erosion of margins. This was in spite of:
FDS was approached. The mandate was to pinpoint factors responsible for loss of market share, declining growth in turnover as well as erosion in profits and to suggest remedial course of action.Study
A team of consultants from FDS, with long years of experience in industry and operational management, carried out a detailed analysis of operations at ICC. All aspects of ICC's operations were studied. This included existing market dynamics, sales and distribution, planning, manufacturing, inventory management, purchasing and outsourcing was studied in detail.
The objective was to identify deficiencies that were contributing to operational inefficiencies and thereby affecting company performance.Findings
Study identified following problem areas:
Changed market dynamics
With a wider product range, little reliable information on projected demand and pressure on lead-times, ICC was forced to enhance its finished goods inventory. This increased costs and in the absence of a reliable demand forecasting mechanism did not result in corresponding lead-time reduction or increased reliability of supply.
We suggested that the way out was to put a reliable Demand forecasting mechanism in place and as far as possible to allow demand to drive manufacturing. Such a move would improve customer service without the need to hold large inventory.
Further, we advised introduction of a Web based Customer Relationship Management system to improve customer service. CRM would cut down order processing time, provide reliable order status information and address quality problems quickly.Weak Information Systems
ICC's legacy processes and information systems were not compatible to scale and complexity of their operation. Legacy systems could not ensure quick and reliable flow of information across departments. This made business communication difficult and forced departments to work as islands.
We suggested a complete revamp of operational systems covering: customer relationship management, demand forecasting, sales/order processing/dispatch, production planning, manufacturing operations, quality assurance, inventory management and supplier management, costing and finance.Lack of integration across the supply chain
The tools that were used for managing planning/scheduling were manual. They worked on hunches rather than hard data. All departments planned independently and that too based on a gross annual budget. Within a few months of start of a new year they were working on different baselines and mostly at cross-purpose. Manufacturing continued to produce even when Marketing slipped on its monthly budgets. Similarly procurement went on without understanding the constantly changing dynamics between Sales and Manufacturing. The manual planning/scheduling systems were took days and weeks. By the time a plan was finalized it was already outdated.
FDS Advanced Planning and Scheduling system was the answer to achieve meaningful integration of the supply chain. APS would be seamlessly integrated with CRM, Demand Forecasting system and transaction management systems. The result would be a responsive and demand driven supply chain to improve customer service and reduce costs.Solution Overview
ICC accepted these suggestions. FDS carried out a Business Process Re-engineering exercises. All core processes were re-designed to align them to business objectives and to eliminate non-value adding activities. Based on this redesigned process blue print a customized solution was conceptualized, designed, developed and implemented. This exercise was carried out over 18 months with a team of 7 consultants and developers.
This solution comprised of:
ICC achieved dramatic improvements across all areas of its operation. It has reduced costs and eliminated supply chain inefficiencies. Inventory has dropped by over 50%. There is a marked improvement in on time deliveries, lead-time turnover and margins.
ICC's market share of the Indian market has improved steadily ever since and stands today at 65%. Constant export growth has also made ICC a major player on the global stage.FDS solution helped ICC to transform and integrate their core business processes within the company and with those of their trading partners. It has also made it possible to get current and consistent information on all business parameters for quick and better decision making.