Executive Shirt Case Solution

|

Executive Shirt Company, Inc. |

Operations Management Case Study |

|

|

|

|

Case Analysis: Executive Shirt Company, Inc.

Summary:

Executive Shirt Company (ESC) is an established company in the apparel industry. The General Manager of ESC is Mr. Dwight Collier who is now planning to introduce customized shirts in his current production facility. According to him, this can fetch 75% more price as compared to regular shirts. Currently, ESC manufactures 16,000 shirts per month and they plan to manufacture 2,000 customized shirts per month without changing the current production. The company has 5 departments, namely Cutting, Sewing, Inspection, Ironing, and Packaging.

Mike’s Plan: The plan was to go with one production line manufacturing for both the products simultaneously. The plan to have eight batches of regular shirts with 5 shirts each, and one batch of 5 custom shirts.

Ike’s Plan: The plan was to go for a separate production line for regular and customized shirt. The plan was to have eight batches of regular shirts with 6o shirts each, and one batch of 5 custom shirts.

Regular Process Flow:

Current Process Flow

Process Flow Diagram of Mike’s Plan

Comparison of Plans

| Current Process Regular shirts | Mike’s plan (Regular & Customer shirts) | Ike’s Plan |

| | | Regular shirts | Custom shirts |

Actual cycle time (min/shirt) | 0.5 | 0.5 | 0.67 | 3.9 |

Manufacturing lead time (days) | 12.25 | 2.2 | 11.32 | 0.5 |

WIP inventory (shirts) | 11760 | 1980 | 9060 | 50 |

Production capacity (shirts/day) | 960 | 960 | 716 | 123 |

Capacity utilisation | 83.33% | 93.75% | 111.73% | 81.3% |

Direct Labour content (min/shirt) | 26.51 | 28.89 | 26.51 | 26.01 |

Direct labour utilisation | 69.03% | 83.84% | 80.20% | 33.5% |

Direct Labour Cost ($/shirt) | 3.84 | 3.47 | 3.49 | 7.68 |

Comparison of Mike’s and Ike’s Process

Cost Comparison

Regular Shirt

Parameters | Raw Material | Cost...