A 5,000-Shirt Order and a Line That Cannot Meet the Ship Date
A garment unit has accepted an order for 5,000 formal shirts with a 20-working-day delivery window. The sewing line has 22 operators and works one 8-hour shift with a 30-minute lunch and two 10-minute breaks. Line efficiency is 80%, and the SAM for the shirt is 25 minutes. The quality plan allows AQL 2.5 major defects; the line's current DHU is 8%. The selling price is ₹600 per shirt and the contribution is ₹180. After three days the line has produced 620 pieces. End-line inspection shows 45% of defects are side-seam puckering, 25% uneven collar points, and 15% skipped stitches. The buyer refuses an extension and imposes a 2% discount on the order value for late shipment. The unit has no second shift and cannot subcontract without a 20% cost increase.
1. Calculate the line's available minutes, daily capacity, required daily output and actual output. State whether the order is at risk.
Read the worked answer
Available minutes per day = 480 − 30 lunch − 20 breaks = 430 minutes. Daily capacity = (22 operators × 430 × 0.80) ÷ 25 = 302.7 pieces/day.
Required output for a 20-day window = 5,000 ÷ 20 = 250 pieces/day. Actual output after three days = 620 ÷ 3 = 206.7 pieces/day. Remaining quantity = 5,000 − 620 = 4,380 pieces. Required for the remaining 17 days = 4,380 ÷ 17 = 257.6 pieces/day.
The line has theoretical capacity above 250/day, but actual output is about 25% below requirement. At the current rate, 4,380 ÷ 206.7 ≈ 21.2 days are needed, so the order is late by roughly four working days. The order is at risk unless efficiency and line balance improve immediately.
2. Diagnose the defect pattern and propose a line-balancing and quality action plan for the remaining 17 days.
Read the worked answer
Use the defect percentages as a Pareto guide. Side-seam puckering at 45% points to machine tension, differential feed, needle size or operator handling. Uneven collar points at 25% point to skill, fusing or template control. Skipped stitches at 15% point to needle condition, thread path or timing. These are not solved by simply asking operators to work faster.
Action plan: station a mechanic at the side-seam operations for the first hour; verify needle size, feed and tension; retrain collar operators and check the fuse temperature; replace bent needles. Add 100% end-line inspection and record defects by operation. Balance the line by measuring operation-wise WIP; move one operator from a low-load operation to the bottleneck, and use a small buffer before collar attachment. Set an hourly target of about 32–33 pieces to reach 260/day. Review output every two hours. Do not use overtime as the only solution; it raises fatigue and defects.
3. The buyer offers to accept 4,800 pieces at the original price if 200 pieces are dropped, or all 5,000 with a 2% late discount on the order value. Which is financially better? Show calculations.
Read the worked answer
Option A: 4,800 × ₹180 contribution = ₹864,000. Option B: the 2% discount on a ₹600 selling price is ₹12 per shirt. Contribution per shirt falls to ₹180 − ₹12 = ₹168. Total contribution = 5,000 × ₹168 = ₹840,000.
Option A is better by ₹864,000 − ₹840,000 = ₹24,000, assuming the 200 dropped pieces cannot be sold elsewhere and no other penalty applies. If the dropped pieces can be sold later at even a small contribution, Option A improves further. If the buyer will not accept a short shipment, Option B may be necessary, but the unit should ask for the discount to apply only to the late portion or for a credit note against future orders.
Recommendation: negotiate Option A first; if refused, accept Option B only with a written cap on the penalty and a recovery plan for the remaining 200 pieces.