The concept of logistics within textile companies

White paper by Rovetex. The original paper is available as a PDF.

Introduction

This paper does not attempt to analyse every aspect of logistics in textile companies. It is an indication of the basic concepts Rovetex applies in logistics projects, and of the results these projects should achieve. Contributions from Rovetex clients are always welcome.

The concept of logistics

The concept of logistics is not normally present in the textile industry. One reason is the shortage — still today — of experts, who often come from other sectors and do not fully understand this area.

As a result, logistics is often confused with simple production planning or management, with the purchase of raw materials and semi-manufactured products, or with individual transport activities.

On the contrary, the concept of a logistics area comes from recognising that all of these activities (and many others) cannot be separated. When they are separated — as in many companies today — efficiency is lost, because nobody keeps the overall view of the problems.

To put it simply, in our opinion logistics in a textile company is the centre of responsibility that receives the orders (or order forecasts) from sales management and is responsible for sending the product to the finished-goods store in the agreed times and quantities. Only by exception does logistics have responsibility for the levels of the finished-goods store, which are normally decided by the sales area.

In this way logistics goes beyond the classic organisation of a company, because it becomes a transverse activity across the three classic functions:

• sales
• production
• management

Activities of the logistics area

From our consultancy experience, two groups of activities can be concentrated in the logistics area.

Production planning and control

• Defining the production plan, in conjunction with the sales budget or with sales monitoring and control
• Purchasing raw materials
• Managing internal production processes: weaving and finishing
• Managing external (outsourced) production processes
• Searching for equipment optimisation
• Purchasing semi-finished products (for example, greige fabrics)
• Responsibility for storing products in the finished-goods store, in time and quantity

Collateral activities

• Maintenance of machinery and equipment (not of structures or buildings)
• Defining the staff of the logistics area
• Defining the information requirements for the area
• Purchasing subsidiary materials for the area where technical aspects are involved
• Responsibility for the costs of the area

Every company defines within its own structure which of these aspects must be agreed with other functions.

Objectives and responsibilities

In companies where logistics is not clearly defined as a single centre of responsibility — with autonomy for all aspects of the area — the objectives and responsibilities are not clear either.

It often happens that factory managers say “we are a service to sales”. In doing so they give up their own management function. Or planning managers simply schedule according to urgent needs, without realising that this is only part of their job.

In our opinion this happens because logistics is not seen as a single function with its own targets: if you separate the activities, you accept not pursuing the overall objectives. It is as if — to take an absurd example — a sales manager could not set the agents’ commission levels because that aspect depended on financial management.

Where there are objective data, there must be the responsibility to make decisions about the means to reach the objectives — always in agreement with the next hierarchical level, General Management.