INVENTORY ANALYSIS

REPORT ON
SIDDIQSON LIMITED
 ABOUT SIDDIQSON LIMITED

SIDDIQ means ‘TRUTH’ The true story of Siddiqsons Initial activities

which is highly impacted on • Started in 1959 by Mr. Rafi • trading in cotton cloth
whole upward graph of the • later on flourished under • later on Mr. Rafi diversified his
leadership of Mr. Tariq Rafi (son business in different areas of the
Organization. of Mr. Rafi) Textile Industry
 ……CONTINUE

Ventured into: Siddiqsons do not mind: Fully integrated vertical set

• Manufacturing cotton canvas • As the oldest in ‘Canvas Industry up including :
• Tents and tarpaulins • Old age brought along-with a • Spinning
wealth of Experiences • Dyeing
• Weaving
 OUR MISSION

Siddiqsons is committed to
bringing the best clothing
experience to consumers of all
ages and plural around the world
through its innovative quality—
oriented product offerings
OUR VISION

“To become a
major regional
global Fashion
Apparel
Company”
 PARENT BRAND

We are pioneers of denim in Pakistan. Established in 1959 and

boasting the largest and most comprehensive denim and jeans
facility under one roof in the country.
SALES & PROFIT ANALYSIS
 Key Factors

In Siddiqsons, the total commercial viability of this proposed stitching unit depends on
the regular orders for the purchase of the finished product. This requires aggressive
marketing efforts at the entrepreneur's end

key points that are important for the successful operation of the proposed stitching
unit.
Better
Surety of high Surety of on time Better services to the communication
Competitive rates Cost efficiency
consistent quality delivery customer. development with
customers
 MARKET SHARE

Major concentration The average Market share

of the denim production capacity contribution:
garment stitching of majority of small • 80% to export
industry is in Karachi and medium sized • 20% in local market
and Lahore. jeans manufacturing • Market value per share
units is about 1,000 Rs 12.5
jeans per day.
 KEY COMPETITORS

Dynamic Nafeesa Dynamic Nagina

Tata Textile
Spinning Textile Mills Textile Mills Group Of
Mills Limited
Mills Limited Limited Limited Companies
 SIDDIQSONS PRODUCTS

• Tencel
• Coolmax
• Cotton Linen
• Organic Cotton
Siddiqsons is one of
the leading denim • Other fancy blends
suppliers in the region. Siddiqsons has
manufactured denims
Ready made garments
in:
 GARMENT MANUFACTURING PROCESS

A process flow chart helps to

Denim Garment manufacturing includes understand how raw materials are
number of processes from order receiving to moved from one process to another
dispatching shipment of the finished garments. process until raw materials are
transformed into garments.

Based on present apparel industry, garment manufacturing processes are categorized as :

• Pre-Production Processes - Pre-production process includes sampling, sourcing of raw materials, approvals, PP meeting.
• Production processes- cutting, sewing and finishing
• Post production processes - thread trimming, pressing, checking, folding and packing, shipment inspection
 PRODUCT STRATEGY USED

Aligns the organization and

Siddiqsons product strategy
is comprised of three parts:
keeps everyone focused on
the work that matters the
“To become a major most.
regional global Fashion
Apparel Company”

• Vision
• Goals
• mission
 COMPOSITION OF MODULARITY FOR
EACH PRODUCT

The Bill of Material (BOM) of different Product in Siddiqson

The garment business using the main the raw material listed in the Table
Raw Material Consumption/ Piece Rate (Rs.)
J
1.30 200 / m
Fabric (Metre)
0.2
Pocket Lining (Metre) 100 / m
350
Stitching thread (Metre) 10 / piece
1
Imported buttons 3 / unit
1
Main label 5 / unit
1
Care and size label 2 / unit
6
Rewet per unit 9 / unit
1
Packing cost 15 / piece

IN above table Siddiqson Ltd used modular
raw material for different product.
……CONTINUE
Due to modularity of raw materials :
• Purchased in bulk
• To meet unforeseen future demand due to variation
in forecast figures and actual figures.
• To smoothen the production process
• To gain economy of production or purchase in lots
• Help in decision making
 ABC INVENTORY CLASSIFICATION

Categorizing inventory items

according to the potential
amount to be controlled
Siddiqson used ABC • Make the list of all items of inventory

analysis according • Determine the annual volume of

usage & money value of each item
to their annual • Multiply each item’s annual volume
by its rupee value
consumption value. • Compute each item’s percentage of
the total inventory in terms of annual
usage in rupees
 ……CONTINUE

By using mix inventory

Select the top 10% of all
Select the next 20% of all
items which have the
items with the next highest
highest rupee percentages
rupee percentages &
& classify them as “A”
designate them “B” items.
items.
classification company got:
The next 70% of all items
• rewarding results quickly
with the lowest rupee
• Helps to point out obsolete
percentages are “C” items
stocks easily
Helps to exercise selective
• Helps better planning of
control
inventory control
• Provides sound basis for
allocation of funds &
human resources
 INVENTROY POLICY
In Siddiqsons, utilizes all FIFO system is adopted in
As per customer demand
their models to achieve the all manner and trying to
and some apply the push
inventory as low and focus to use all the old
system , forecasted value
targeted the inventory as stock and deliver to their
may insert for storing the
beneficial for the long term designated or customer
inventory in all shape
scope locations

Lead time is also constant and but

All different stores and inventory
Price per unit depend upon the
which have been used in during
nature of the product, as major
the production process , they
product component is fabric (cotton,
maintain certain level to not
fiber) so its our financial strategy to
drop their WIP inventory to
store as long as fabric/ fiber in their
stoppage of any production cost.
go down for futuristic approach
WAREHOUSING REQUIREMENTS

Siddiqson required
warehousing:
• To reduce transportation-
production costs
• To coordinate supply and demand
• To assist in the production
process
• To assist in the marketing process
 EXISTING WAREHOUSING
STRATEGY

Warehouse in D53 Large industrial

Warehouse F-205 Warehouse DC Hub, Some are operated settings where each
unit site area
unit site area , having Baluchistan, having with the operator palette can weigh
industrial, having
fabric stored of 8-9 fabric stored of 7 - 8 standing up while several thousand
fabric stored of 5 to
lac meter. lac meter others allow the pounds typically
6 lac meter
operator to sit down. require the sit-down
counterbalance
models.
 ….CONTINUE
Process Of Warehouse
RECEIVING
INPUT • Schedule Carrier
• Unload Vehicle
• Inspect for damage

WAREHOUSE PROCESS Storage

Put-away
Equipment
• Identify Product
Stock Location
• Identify Product Location
Popularity
• Move Products
Unit Size
• Update Records
Cube
Shipping Preparation Order Picking
Packing Information
Labeling Walk & Pick
Shipping
Stacking Batch Picking
Schedule Carrier
Load Vehicle
Bill of Loading OUTPUT
Record Update
 TYPES OF INVENTORY
STORED
Siddiqson Ltd stored three types of inventory:

Finished
Raw goods at
factory&
Materials distribution
30 % 30%

WIP
Inventory
40%
 Warehousing Cost Structure

Siddiqson Ltd
categorized their
warehousing cost
in four portion:

Operation General
Storage cost Handling cost administration administrative
cost expenses
 KEY SUPPLIER
Siddiqsons is a vertical set up plant , having own basic
cotton (Major raw material) from their own production
unit.
Supplier /Manufacturer:
• ACROS ORGANICS
• ARCHROMA/ BASF
• AL AMEEN TRADING CORPORATION
• AL-FATTAH CHEMKO
• AMPHYLL CHEMICAL
• DYECHEM INTERNATIONAL
• ENGRO POLYMER & CHEMICALS
 Concept of VMI

Its not fully implemented,

partially we may adopt Siddiqsons, increasing the
In Siddiqson Ltd this
this strategy for some sales and by avoiding the
concept has been
particular buyers orders out of stock in products
generating in the eyes of
like, demand and also the
management for
linked between
streamline the product • H&M
• Levis manufacturer and
inventory cost.
• Inditex retailers.
CREDIT POLICY

Siddiqson Ltd set a bench mark

when developing a credit policy
for their customer:
• The seller’s strength in the market;
• The capital needed to finance seller’s
sales
• The credit terms which the seller gets
from his own suppliers
• The range of customers (types and
sizes)
• Available net profit margins
• The customer’s creditworthiness
• The buyer’s own cash cycle
 PROCUREMENT POLICY
• Determining how and where its
• Fabric merchandise such that fabric will be
obtained
• Accessories and trims • It works in co-ordination with the
merchandising department and looks
after the delivery of the required
goods within the scheduled time and
cost.
• A fabric sourcing executive must have
knowledge about all varieties of fabric
in order to execute their function
effectively.
FABRIC
Types of items SOURCING
procured: DEPARTMENT:
 STEPS INVOLVED IN
FABRIC SOURCING

FABRIC REQUISITION FABRIC RECEIVE INVOICE UNLOADING AFTER TALLY WITH SUPPLIER
ORDERS PLACED
FROM MERCHANDISER / CHALLAN CHECKING INVOICE FOR QUANTITY

INSPECTION REPORT
SEND BILL TO GATE FOR FORWARD FABRIC FOR UNLOADING AFTER
RECEIVE FABRIC IN STORE SENT TO CONCERNED
ENTRY INSPECTION CHECKING
MERCHANT

AFTER COMMENTS RE-

ENTRY IN THE SYSTEMS
FORWARD FABRIC FOR RELOCATION IN THE ISSUE AGAINST AN
WITH FINAL COMMENTS IF ACCEPTED
INSPECTION STORE ORDER
IF REJECTED OR
ACCEPTED
 EXISTING
PROCUREMENT
POLICY BASED ON

Negotiation of prices, Prepare proposals according

quality, delivery place and to the buyer's requirement
time with the supplier

Co-ordination with the

merchandiser, supplier, stores, Selection of supplier for order
and finance department
 DISTRIBUTION NETWORK AND LOGISTICS
REQUIREMENT

Location Strategy:

Location is the local facility for Siddiqson Ltd for transporting their goods. Transferring the
finished goods inventory to desired locations, and later on to port locations.

In Siddiqson Ltd location strategy is based on:

Cost

Political risk, value, and culture

 Distribution Network Analysis

By means of
well-handled
The role of transport It brings efficacy,
logistics system system, goods and also it builds
Its complexity
is more complex highly quality could be sent to a bridge
can take effect
that carrying management. the right place at between
only through
goods for the right time in producers and
proprietors. order to satisfy consumers
customers’
demands
 ……CONTINUE
Transportation
29.40%

Movement
7.8% Management
11.00%
The improvement of
the item of higher
operation costs can
get better effects.
Hence, logistics must
Packaging comprehend Ordering
11.90% 5.50%
transport system
operation thoroughly

Warehousing Inventory
17.00% 17.40%