New Asia Group: Fibre to Fabric
It was the Ramzan month in July 2014. Mr. Ambarish Chaudhary, the Managing Director of New Asia Group was attending the ‘Milab’ at one of his factories in Dhaka, Bangladesh. ‘Milab’ is a grand feast held during the holy month of fasting to break the fast after sunset. The company had done well in the past but with China and Vietnam picking up, the margin in the textiles business was under pressure and that was worrying Mr. Chaudhary. And with the image of Bangladesh going nosedive, there was cause of worry.
New Asia Group
The New Asia Group is comprised of six individual entities that form a vertically integrated apparel manufacturing organization, headquartered in Dhaka, Bangladesh. Established in 1987, the Group started out with Rahim Textile Mills, a dyeing and printing mill for both knit and woven fabrics. Since then, they have expanded into the production of greige yarn (for both knitted and denim garments), denim fabric, knitted garments, sweater garments and denim garments, which supply some of the world’s most wellrecognized retail brands and are distributed to stores across the world. With over $200m in Sales and almost 15,000 employees in just 30 years, the New Asia Group is one Bangladesh’s leading private organizations and is poised for further growth under the guidance of its dynamic leadership team. Exhibit I gives an overview of the evolution of New Asia Group.............
New Asia’s Philosophy
The company calls itself ‘New Asia’, as it believes that Bangladesh will be the next major manufacturing hub of Asia, and it aims to provide a brand of customer-service that exceeds any experience received elsewhere in the world.
The advent of new media and the digital marketplace, transformed the consumer behavior in the fashion industry. Today, brands across the fashion pyramid are changing their business models by shortening their traditional selling seasons and producing more collections per year. Concurrent with such shortened product lifecycles, is an overwhelming demand to offer a wider variety of stylish, high quality and affordable clothing within each collection...........
New Asia Group Companies
The New Asia Group consists of the following six companies:
• Knit Asia
• J M Fabric
• Salek Textiles
• Malek Spinning
• Rahim Textile Mills
• Aurum Sweater
Knit Asia
Established in 1999, Knit Asia Ltd., commenced operations with a solitary garment manufacturing unit in Ashulia. In 2006, it expanded its operations to become a composite production facility by creating a fabric production unit in Shafipur............
(a) Ready Made Garment (RMG) Unit
RMG Factory Locations
Ashulia (Savar, Bangladesh), Shafipur (Gazipur, Bangladesh) and Nischintapur (Gazipur, Bangladesh).
Product Range
...........................
(b) Fabric Unit
Fabric Production Unit Locations:
Shafipur (Kaliakoir), Gazipur, Dhaka, Bangladesh
Product Range
.........................
J M Fabric
JM Fabric Ltd was acquired by the New Asia Group in 2011. It specializes in manufacturing ladies knit garments and intimates. As a composite knitting facility, JM Fabrics, also produces the fabric used in making its finished garments.........
(a) Ready Made Garment (RMG) Unit
RMG Factory Locations
South Nayapara, Bhawal Mirzapur, Bangladesh
Product Range
....................
(b) Fabric Unit
Fabric Production Unit Locations:
South Nayapara, Bhawal Mirzapur, Bangladesh
....................
Textile Industry in Bangladesh
The importance of the textile industry in the economy of Bangladesh is very high. The garments manufacturing sector earned $19 billion in the year to June 2012, one of the impoverished nation’s biggest industries. Currently, this industry is facing great challenges in its growth rate. The major reasons for these challenges can be the global recession, unfavorable trade policies, internal security concerns, the high cost of production due to increase in the energy costs, different safety issues specially fire, etc. Depreciation of Bangladeshi Taka that significantly raised the cost of imported inputs, rise in inflation rate, and high cost of financing has also effected seriously the growth in the textile industry. As a result neither the buyers are able to visit frequently Bangladesh nor are the exporters able to travel abroad for effectively marketing their products.............
Overview of Textile Business
The Textile and Apparel Supply Chain comprises diverse raw material sectors, ginning facilities, spinning and extrusion processes, processing sector, weaving and knitting factories and garment (and other stitched and non-stitched) manufacturing that supply an extensive distribution channel. This supply chain is perhaps one of the most diverse in terms of the raw materials used, technologies deployed and products produced (Exhibit IV and Exhibit V)...........
Manufacturing Process of New Asia
New Asia is an integrated textile manufacturer which has spinning, fabric processing and readymade garments. The company is a contract manufacturer and it is 100% export-oriented concern because as per the laws of the land, if raw material is imported then the finished goods cannot be sold in the domestic market. New Asia gets the design from the buying house/direct customer and produces as per specification (Exhibit VI (a), Exhibit VI (b) and Exhibit VI (c))..............
Product Portfolio
Being an integrated textile manufacturer, New Asia has an entire gamut of products across the value chain (Exhibit VII and Exhibit VIII)........
Key Initiatives
In order to reverse the margin pressure, New Asia had undertaken some initiatives (Exhibit IX and Exhibit X).........
Time and Action Calendar
Time and Action (TNA) calendar (Exhibit XI) is one of the most important tools for managing a project. In garment manufacturing each order is not less than a project to a merchant because from order receiving to completion of an order it involves a number of tasks of various timelines and utilization of various resources. Like number of processes, lot of people are also involved to accomplish an order. Similarly each order is unique in terms of process and time demand............
Cost Sheet
Costing is an integral part of New Asia as the entire quoting process is dependent about the estimated cost. In the clothing manufacturing, supplier gives final manufacturing cost to buyer prior to order confirmation. For that factory prepares cost sheet estimating costs in different cost heads. Cost heads like Fabric, Trims and Packing materials, Labor cost and Overheads (Exhibit XII)............
General Sewing Data (GSD) has defined set of codes for motion data for SAM calculation. There are also other methods through which one can calculate SAM of a garment without using synthetic data or GSD.
Method #1: Calculation of SAM Using Synthetic Data
In this method ‘Predetermined Time Standard’ (PTS) code are used to establish ‘Standard Time’ of a garment or other sewing products.
Step 1: Select one operation for which you want to calculate SAM.
Step 2: .............
Method #2: Calculation of SAM through Time Study
Step 1: Select one operation for which you want to calculate SAM.
Step 2: ..............
Line Loading Plan for Garments
In “Line loading plan” planner decides on which date a style to be loaded and how many lines to be considered for the style to meet the production completion date.
Line loading plan is an important task for a production planner. Planner needs to do backward and forward planning based on lead time.
Step 1: Make a list of current orders with details such as order no., order quantity, style description, and production completion date (Exhibit XIII). Suppose order has been received on the month March and production completion date on May from 4th to 21st
Step 2: .......................
Textile Industry Global Outlook
The Textile industry has undergone major changes over the years. The key markets for the apparel industry are the European Union (EU) and US but China has caught up quite a bit over the years. While US has shown a cumulative average growth rate of 5%, China has shown a CAGR of 29%. This clearly shows the changing nature of the apparel demand. Exhibit XVIII depicts this trend............
Exhibits
Exhibit I: Evolution of New Asia Group
Exhibit II: Key Differentiators of New Asia Group
Exhibit III: Top 3 Textile Nations
Exhibit IV: Textile Supply Chain
Exhibit V: Macro Dynamics of the Apparel Manufacturing Industry
Exhibit VI (a): High Level (Knit) Apparel Production Process
Exhibit VI (b): High Level (Knit) Apparel Production Process
Exhibit VI (c): High Level (Knit) Apparel Production Process
Exhibit VII: Balanced Income Stream driven by Complimentary Product Portfolio
Exhibit VIII: Customer Base
Exhibit IX: Integrated Business Planning and Operations
Exhibit X: Transparent Costing and KPI based Controlling
Exhibit XI: Time and Action Calendar
Exhibit XII: Cost Sheet
Exhibit XIII: Order List
Exhibit XIV: Available Capacity Calculation
Exhibit XV: Required Capacity Calculation
Exhibit XVI: Planning Board
Exhibit XVII: Order Loading Date
Exhibit XVIII: Apparel Consumer Demand by Market
Exhibit XIX: Changing Consumer Demand
Exhibit XX: E-tailing has Posted Soaring Growth Rates in the Past Few Years
Exhibit XXI: Growing Sustainability Concerns
Exhibit XXII: Continuous Price Pressure
Exhibit XXIII: Wage Increases
Exhibit XXIV: Labor is only one-fourth of Apparel Ex-factory Unit Cost
Exhibit XXV: Textile Capacity Concentrated in China
Exhibit XXVI: Country Mix of Total Apparel Export to the US (by value) Source: US
Exhibit XXVII: Country Mix of Total Apparel Export to the EU (by value)