Proposal for a Management Science Project for Inventory Reduction

DISC 212 – Introduction to Management Sciences

Final Project – Alternate Proposal – Group 1

Basic Information

        Textile industry is the major industry of Pakistan, in terms of its contribution to the economy in terms of GDP and exports. However, the energy crisis has hampered the growth of textile industry in the recent past and has led to a change in thinking of the major producers in the textile industry. The company we have chosen is Bright Fabrics, a family owned manufacturing firm that specializes in processing and finishing of white fabric for uniforms of leading organizations around Pakistan and also produces dyed fabric. Bright Fabrics started as a small factory in 1974 and 20 years later expanded its production space by more than two times in order to cope with increasing demand and a further, smaller unit was set up in 2005. However, the financial crisis of 2007-08 had an adverse effect on the demand and as a result of reduced demand; the factory units are currently using only 1 or 2 machines of one type for their production whereas about 4 of them are lying idle. However, despite the drop in demand, they are currently the leading suppliers of white fabric for uniforms across Pakistan.

The Data

        The data obtained is from Bright Fabrics through the owner himself, who was kind enough to provide data regarding the production, the utilization of inventory. Moreover, they also shared cost sheets. The split with respect to fabric quality and proportion of dyed and white clothing manufactured is also mentioned in the data. More information about the operations of the firm and the process timings and related requirements will be obtained after our official-visit to their plant. Furthermore, they provided us with inventory levels of chemicals and fabrics, which was all they stocked, also highlighting the desired minimum and maximum levels.

Analysis

        In today’s competitive times, firms have to continuously improvise and adapt in order to stay competitive. The decrease in demand coupled with the energy crisis, has resulted in the decreased production in textile sector industries. This has forced the top-level management to reconsider their product mixes and choose whether to eliminate a particular product or not from their production. The case is more tragic for Bright Fabrics since more than three-quarters of their machines are now idle. Our intended model would be able to provide a clearer picture as to what should be done to put the firm on a recovery path to achieve long-term strategic goals.