Caribbean Stitch: More Orders Than Shirts
Caribbean Stitch is a small garment manufacturer in Port of Spain, Trinidad. It employs six sewing-machine operators and owns eight machines. Each operator works 40 hours a week, and the factory currently produces 240 polo shirts a week. Current orders are 350 shirts a week, and operators already work 10 hours of overtime each. The defect rate is 7%, and fabric waste is 14%. Fabric is imported and takes three weeks to arrive. A hotel group offers a six-month contract for 120 shirts a week at a fixed price. The owner wants to accept, but the supervisor warns that the factory is already late on some orders and that apprentices are not yet fully trained. The factory has space for a second shift but no additional machines.
1. Calculate current weekly capacity, the gap including the new contract, and the maximum output with existing machines at current productivity. Recommend a capacity plan.
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Current capacity: 6 operators × 40 hours = 240 labour hours. At 240 shirts, productivity = 1 shirt per labour hour. New demand = 350 + 120 = 470 shirts/week. Gap = 470 − 240 = 230 shirts/week. Existing machines can run at most 8 operators. With 8 operators × 40 hours × 1 shirt/hour = 320 shirts. Still short by 150. Ten hours overtime for 8 operators adds 80 shirts, giving 400; still 70 short. Recommendation: hire two operators to use the two idle machines (320), run limited overtime only if quality holds (up to 400), and outsource or negotiate a later start for the remaining 70. Do not promise the full hotel contract without a secure second shift or subcontractor.
2. Evaluate the quality problem and recommend production and quality controls.
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A 7% defect rate means about 17 defective shirts per 240; 14% fabric waste is high for polo shirts. Likely causes include unclear specifications, poor cutting layout, inexperienced apprentices, and no in-process checks. Recommend: (1) a pre-production sample approved by the hotel; (2) a cutting plan to reduce waste; (3) check the first piece and every 20th piece; (4) record defects by operator and machine; (5) train apprentices on one operation at a time. Set targets: defects below 3%, waste below 8%. Do not rely only on final inspection, because rework consumes the same capacity that is already short.
3. Decide whether Caribbean Stitch should accept the hotel contract. Justify your decision.
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Accepting the full 120/week would require 470 total, but realistic capacity is 400 with overtime and no quality drop. A part contract of about 70/week matches the gap after hiring two operators and overtime, but it depends on outsourcing. The hotel contract is for six months, so it gives steady volume and may justify hiring. However, failure to deliver damages reputation. Recommendation: accept 70/week now with a written right to increase to 120 after a second shift is trained; or accept 120 only if a reliable subcontractor is contracted at a known cost. Review after four weeks using on-time delivery and defect data.