Textile Management : A Guide for Technicians

This book covers the core principles of managing textiles, covering everything from sourcing and production to distribution and sustainability. The objective of this book is to provide relevant information about critical business aspects of the textile industry and its ancillary tools. It covers important concepts of business in a brief and simplified, yet practical way through examples in the form of reports, formats, figures related to respective subjects. Print edition not for sale in South Asia (Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka) This book covers the core principles of managing textiles, covering everything from sourcing and production to distribution and sustainability. Private,Limited,Company;,Management,Information,System;,Risk,Management;,Basic,Accounting;,Annual,Budget Private Limited Company,Management Information System,Risk Management,Basic Accounting,Annual Budget Cover Title Page About the author Dedication Copyright Page Table of Contents Preface Acknowledgements 1. Type of Businesses Sole Proprietorship Business One Person Company (OPC) Partnership Business Limited Liability Partnership (LLP) Private Limited Company Public Limited Company Company Limited by Shares Company Limited by Guarantee Unlimited Company Difference Between Public Limited and Private Limited Company A Manufacturing Factory and Its Basic Elements Manpower Machineries Material Management Major Points to Remember Before Setting a Manufacturing Plant SWAT Analysis of a Manufacturing Company 2. Types of Management Styles Autocrative Management Style Democratic Management Style Laissez –Faire Management Style Management Style in Indian Textile Industry Pyramid and Inverted Pyramid Shape Management 3. Risk Management Risk Identification and Mitigation Business Risks Operational Risks Financial Risks IT Risks Legal Risks Risk Management Areas of Business Risks and Their Management Areas of Operationalrisksand Their Management Areas of Financial Risks and Their Management Areas of It Risks and Their Management Areas of Legal Risks and Their Management 4. Accounting Accounting Documentation and Records Preparation of Financial Statements Basis of Preparation of Account Depreciation Accounting Concepts Basic Convention in Accounting Common Terms Used in Balance Sheet, Profit and Loss Account Profit and Loss Account The Balance Sheet Trial Balance vs Balance Sheet Relationship Between Profit and Loss Account and Balance Sheet Analysis of Financial Statements Method of Interpreting Financial Statements Ratios Liquidity Ratios Efficiency Ratios Profitability Ratios Earning Ratios Shareholder's Ratios Solvency Ratios Production Ratios Evaluation of Company Performance 5. Budget Examples of Annual Budget in Textile Mills A-Budget of a Medium-Size Cotton Spinning and Weaving Mill Summary of Financial Projection Year 2015-16 Assumptions Monthly Statement SPINNING – Monthly Contribution of Manufacturing & Yarn Sales WEAVING – Monthly Contribution of Manufacturing & Fabric Sales (Grey & Processed) SPINNING – Monthly Manufacturing and Yarn Sale WEAVING – Monthly Manufacturing and Fabric Sales (Grey & Processed) Monthly Statement (Stock Tracking) Monthly Profit & Loss Statement Profit & Loss Account Projections Spinning Plan Summary (PV & cotton yarn) Rawmaterial Consumption / Month Spin Plan and Machine Balancing Profit & Loss Account – Weaving Division Working Capital Requirement Weaving Plan (April to March) Processed Cloth Sales Division Manufacturing Expenses (Weaving) Break Up of Manufacturing Expenses / P & L Current Assets & Current Liabilities Details of Should-Be Debtors Details of Should-Be Stock Details of Should-Be Debtors Over All Cash Flow Planning Summary Cash Flow Planning Spinning Division Cash Flow Planning Weaving Division Corporate Back Log Cash Flow Plan Admin & Factory Overhead Expenses for the Year 2011 -12 Summary of Capex (Weaving Division) Summary of Capex (General & Civil) Labour Compliments –Spinning Division Organisation Chart for Management Staff B-Assumptions- Manufacturing Expenses Projections for Annual Budget C-Annual Budget of a Composite Textile Mill Assumption Monthly Assumption Sheet Break-Even Analysis Calculation of Break-Even Sales Budget Comparison of Previous Year vs Current Year Comparative Performance Ratio Monthly Profit and Loss Statement Estimated Balance Sheet Balance Sheet Ratio Estimated Fund Flow Interest and Depreciation Calculation Debtors, Creditors and Stocks Debtor and Creditor Working Quality-Wise Monthly Production Plan Quality-Wise Monthly Sales Plan Sales and Production Quantity Reconciliation Sales Cost Elements Monthly Manufacturing Expenses Raw Material Requirement Raw Material Costing Power & Fuel Consumption Details of Overheads Expenses Marketing Budget Budget for Company Retail Shop D-Annual Budget and Profit/Loss Projection At a Glance E-Annual Budget for Repair and Maintenance for a Spinning Unit Summary for Annual Budget Machine-Wise Consumable Items One Time Item Items of Longer Life Requirement of Pin Strips Requirement of Aprons Annual Maintenance Contract Fibre Lubricants Machine Lubricants 6. Production Planning and Control Specific Functions of Production Planning and Control (PPC) Raw Material Procurement Raw Material Booking Format Follow-up Chart for RM Import Consignments Cotton Spinning Production Capacity and Balancing Format Worsted Spinning Capacity (Polyester Tow and Wool Top to Yarn) Weaving Production Capacity (APV suitings manufacturing units) Dyeing Department Production Capacity Finishing Department Production Capacity Weaving Monthly Program Sheet (Cotton and blended materials) Monthly Production Program and Tentative Contribution Sheet Monthly Production Target Summary for a Composite Worsted Mill Spinning Monthly Program Format Fabric Dyeing Daily Follow-up Sheet Daily Production Follow-up Sheet Monthly Production Summary Raw Material Monthly Record Work in Progress (WIP) Monthly Sales Program and Spinning Capacity Balancing Daily Yarn Stock Movement Format Daily Grey Fabric Stock Movement Format Raw Material Reconciliation Summary Report Raw Material Reconciliation- Department-Wise Monthly Summary Report Monthly Waste and Defective Production Waste Reconciliation April - March Waste Stock Statement from April - March Stock Reconciliation from Raw Material t Finished Products for a Financial Year Factors Affecting Production and Lead Time 7. Management Information System (MIS) Management Reports Finance Company Secretary Sales HRD and Administration Production Reports Raw Material Procurement Dyeing Spinning Weaving Finishing Folding Warehouse Production Planning and Control Quality Assurance Procurement and Stores Engineering Examples of Formats for Common Reports Daily Production and Sales Report Daily Sales, Expenses and Tentative Profit & Loss Report Monthly Performance Report and Comparative Analysis of a Weaving & Processing Unitalong with a Small Division of Plastic Items Cash Flow Format of a Composite Textile Mill Budget Analysis for a Financial Year (April to March) Liquidity Assets, Net Working Capital and Net Worth Rati Analysis Administrative Overheads Annual Profit/Loss and Balance Sheet of a Company Combined Expenses Statement for and upto March’03 Combined Operating Statement for and upto March’03 Combined Contribution Statement for and upto March’03 Balance Sheet Stock Summary Sales Register Departments Combined Production Report Dyeing Department Monthly Performance and Tentative Expenses Monthly Performance Report (Worsted Dyeing Department) Category-Wise Dyeing Production Consumption of Dyes and Cost Per Unit Daily Performance Report – Worsted Spinning Department Spinning Daily Performance Report Monthly Performance and Tentative Expenses of a Spinning Dept (Worsted) End Breakage Study in Spinning Department Department-Wise Waste Generation Report (Worsted) Cotton Spinning and Weaving Mill Daily Waste Generation Report Cotton Spinning Monthly Waste Record Weaving Department Monthly Performance and Tentative Expenses Weaving Department Daily/Monthly Performance Report Weaving Machine Breakage Study and Analysis Sizing Material Consumption in Weaving Preparatory Finishing Department Monthly Performance and Tentative Expenses Processing Department Daily and Monthly Machine Stoppage Report (Cotton) Processing Department Machine-Wise Daily and Monthly Production Report (Cotton) Fabric Stock Movement and Reconciliation in Processing Department Fabric Shrinkage Monthly Report (Worsted Suiting) Finishing Department Machine-Wise Daily Performance (Worsted) Engineering Department Daily /Monthly and Annual Energy Consumption (Example of a Worsted Unit) Stores and Purchase Department Daily /Monthly Summary Report Annual Spares and Stores Consumption History Vendor-Wise Dyes and Chemicals Purchase and Consumption Annual Comparative Sales, Expenses, RM Consumption, and Sales Analysis Monthly Sales, Raw Material Consumption and Stock Valuation Monthly Profit and Loss Summary Daily Cash Flow of a Worsted Spinning Unit Trial Balance and Balance Sheet Balance Sheet Schedule Forming Part of Balance Sheet Estimated Profit and Loss Account Summary Estimated Monthly Profit and Loss Account Comparative Production Summary 8. Costing and Cost Analysis Material Cost Labour Cost Expenses Components of Total Cost Common Formats for Costing Costing of Cotton (Farm to Spinner) Cotton (RM) and Cotton Yarn Costing Cotton and Yarn Prices Trend (Historical Data) Costing of Wool Scouring Costing of Scoured Wool Import Spinning Department Section-Wise Manufacturing Cost (Worsted) Production Departments Annual Expenses and Cost Per Unit Department-Wise Annual Expenses and Cost Elements Per Unit of Production Allocation of Wages and Salary Department-Wise Wages Allocation in Annual Budget Department-Wise Salary Allocation in Annual Budget Allocation of Depreciation Department-Wise Monthly Direct and Allocated Cost Summary Department-Wise Direct and Indirect Cost Summary Cost Calculation Generator Set Power vs Govt Power Supply Cost Calculation of Steam Cost Elements of Direct Cost of Production Departments Annual Cost Analysis of a Composite Mill Costing of Cotton Yarn Worsted Spinning, Section-Wise Costing Worsted Yarn Costing-A Worsted Yarn Costing -B Conversion Cost of Worsted Yarn Based on Month Production Analysis of Cost Elements of Worsted Spinning Plant Monthly Dyes and Chemical Cost Annual Comparative Dyeing Cost Fabric Costing for Export Fabric Costing for Export (Summary) Fabric Costing of Luxury Suitings for Domestic Market Cotton Fabric Costing Costing of Blankets Costing of Garment Cost Comparison of Different Options of Weaving Machines Capital Cost and Cotton Yarn Manufacturing Cost Comparison at Different Ring Frame Spindles and Speed 9. Cost Reduction Cost Reduction Process Major Cost Elements and Ways to Control Examples of Cost Reduction Cost Reduction Report for a Worsted Composite Plant Cost of Reprocess or Rework Example of Reprocessing Cost in Finishing Department Reprocessing Cost in Dyeing Department Excess Cost of Dyeing Due to Underutilisation of Dyeing M/CS Capacity Dyeing Recipes Reduction of Dyeing Cost Through Alternate Recipes Cost Saving by Reducing Defective Production 10. Sales and Marketing Sales and Marketing Management Key Area of Sales Strategy Role of Sales Executive Primary Sales Secondary Sales In Shop Brand Visibility Revenue Collection and Credit Control Monitoring The Five “P” of Sales and Marketing Trademarks, Branding, and Marketing Sales Policy Example of a Sales Policy Guidelines for Outsourced Fabric Procurement Examples of Formats for Common Sales Reports Variance for Sales Quantity for the Financial Year Variance for Sales Value for the Financial Year Dealer-Wise Comparative Annual Sales Performance (Value) Area-Wise Sales Volume and Value for Five Years Channel-Wise Sales Data for Five Years Category-Wise Domestic Market Sales Data for Five Years Annual Export Sales Summary of a 100% Export Oriented Weaving Plant Country-Wise Export Sales Data for Five Years Area and Agent-Wise Monthly Sales Target and Daily Follow-up Report Domestic Sales Payment Terms and Age-Wise Outstanding –Daily Follow-up Report Export Sales Outstanding Bills –Daily Follow-up Report Sales Historical Data in Graphical Form Five Years Zone-Wise Businessfrom Aprilt March – Mtrs Five Years Zone-Wise Businessfrom April to March – Average Rates Five Years Segment-Wise Business from April to March Wholesale and Retail Business -Last Five Years Record of Sales Agents Tentative Sales Profit and Loss Statement Market Complaints Analysis by Quality Assurance Market Complaints Analysis and Its Valuation by Sales and Account 11. Case Study Case Study N 1- Turn Around of a Sick Company State of Things in the Beginning Steps Taken to Address the Issues Operation Comparative Results Siuation After Four Years Case Study N 2 Steep Decline and Closure of a Giant Size Profitable Textile Company Lessons to Learn Suggestions Toimprove Overall Performance of Indian Textile Industries Sales Terms and Conditions in Indigenous Markets Business Cycles 12. Statutory Compliances and Audit Auditor The Objectives of Audit Appointment of Auditor Tenure of Auditor Qualification and Eligibility of an Auditor Removal and Change of Auditor Resignation of Auditor Powers and Duties of Auditors and Auditing Standards Auditor Reports Auditor to Sign Auditor Reports Company Annual Filing Winding up Statutory Regulations Examples of Statutory Compliance Documents Importance of Statutory Compliance for Payroll Example of Statutory Compliance Formats Monthly Income Tax Compliance Report Monthly Esic / PF / Professional Tax Compliance Report Factory Acts Statutory Compliance Statutory Amenities in the Factory Statutory Officers in the Factory Register Maintained by Management under the Factories Act and Rules Statutory Notices to Be Displayed by the Factory Statutory Returns to be Filed Under the Factories Act with Due Dates Statutory Periodical Examinations of Plants and Equipment to be Carried Out Example of an Audit Report of a Company for One Quarter Guidelines for General Check Points in the Business General Check List for Sales and Finance Various Licences, Registration, Certificates, Permission, Consent for the Company 13. Import and Export General Terms Used in International Trade (Import and Export) Import Procedures Documents Used in Import Transactions Import Flow Chart Import Documentation and SOP Import Documents by Sea / Air – Raw Material Import Documents – Machinery & Their Spare Parts Export Procedure Documents Used in Export Transaction Export Flow Chart Export Documentation and SOP Export Documents - Sea / Air Pre-Shipment Documents – Direct Export Post-Shipment Documents Proof of Export Documents List Export Incentives Export Documents Checklist Export Documents to Check and Verify L/C Checklist Invoice Cum Packing List Check List B/L Checklist Insurance Documents Checklist Certificate of Origin Checklist Shipping Bill Checklist Packing List Checklist Format for Import Consignments Status Report Format for Export Consignments Status Report Foreign Trade Promotions Incentive Trade Promotions Incentives and Organisational Support Foreign Trade Promotion Measures and Schemes 14. Utility Energy Conservation Energy Audit Scope of Energy Audit (Example) Records of Utilities in a Factory Load Chart Details of Utilities in a Textile Mill at a Glance (Example) Fire Fighting Storage Capacity Insulation Steam Boiler Air Compressors and Air Dryer Water Steam Thermic Fuel Heaters Air Compressors Water Water Source and Storage List of Abbreviations