Contemporary Management Thoughts

Management Approaches

In

Sri Lankan Apparel Market Context

Abstract

The apparel companies in Sri Lanka face massive challenges with the global competition.
Countries like Bangladesh, Vietnam and India are cost effective and China is the market leader
hence Sri Lankan apparel companies need to play vital role to get the orders. Thus the apparel
companies need to be innovative, efficient and flexible. And they should have technology, IT
systems and integrated functions in supply chain management. But these are not enough to
manage a business unit. So this report examines how the companies follow management theories
in current business context to win the situation along with other supporting factors. Organisations
have to adopt three or more management theories to run a business in global market. And they
successfully use combination of these theories. And especially in manufacturing companies
cannot be restricted to one theory as they are combined with number of other divisions like
Marketing, Planning, Merchandising, Procuring, Production, Packing and Logistics. In actual
fact, organizations are subject to various combinations of environmental forces and management
practices.

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Introduction

There several different types of management theories to understand in related to an organisation.

All these theories are universally accepted today. To provide a useful historical perspective that
will guide our study of modern management, we shall discuss six different approaches to
management in this report:

(1) The Classical approach,

(2) The Behavioural approach

(3) The Management science approach or operational approach,

(4) The Contingency approach,

(5) The Systems approach, and

(6) The Learning organisation approach

The development of these approaches began in 19th century with the industrial revolution. The
organisations start looking for customer needs enhancements. Larger scale production units have
been started. People management and social problems developed in factories. Therefore
understanding these general approaches to the theory and practice of management can help &
appreciate how management has evolved, where it is today, and where it appears to be headed.

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The Classical Approach to Management

Brandix Casualwear Limited is USD 115 million turn over company in Sri Lanka. Company has
adopted various approaches to manage the business units and to run a smooth operation. They do
practice most of the theories which have been universally accepted. The company always solves
the problems following by management thoughts. The product portfolio of this company is
woven bottom; basic pants, cargo pants, 5-pocket jeans, shorts and skirts and in different types of
fabric. Customers are Gap Inc, Lands End, Next, Mark Spencer etc.

The organization has seven production factories in all over country and only one centralized
warehouse and a cutting division in charge to supply fabric cuts for all these factories.
Responsibility of the centralized fabric division to get the fabric rolls from loading bay, send it
for fabric inspection division , after inspection put into the ware house racks and later issue to
cutting department based on cut dates. The below exhibit#1 explains how do the process goes
on.

In a normal season store house receives nearly around fifty to seventy five thousand yards per
day from different suppliers and for different styles. The inspection division found difficult to
manage the fabric inspection process as 10% of the fabric has to be inspected prior to start
cutting. Due to the delay in inspection cutting department could not meet the planned cut dates
and subsequently it affected the line feeding and garment delivery.

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Exhibit # 1 – Fabric in house to Cutting Dept

Get Fabric from Loading Bay Issuing to Cutting Dept

Inspect colour shading, roll width, foreign yarn etc... Returning the fabric to warehouse to store at racks

the inspection report and swatch card Making the shade range card and number
Passing of and
the report yardsthe shade range to cutting department

Through observations and experiments noticed that the staffs of the inspection division do not
have a proper sequence to follow the fabric inspection. Hence company has introduced a Gantt’s
chart 1to the staff for them to understand which style fabric going to be in house by this week,
quantity and cut date etc. Table # 1, illustrate the details contains in the Gantt’s chart. This chart
circulated from fabric procurement team to fabric inspection team in every Monday. As a result
the fabric inspection team started to prioritize based on the planned cut date. It made easy to
understand which style fabric to be inspected and when to be inspected.

Table # 1 – Fabric in house Schedule (example)

1
Modern Management 10th edition , page number 31

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Division Style Supplier Fabric Type In house Quantity Plan cut

Date Date
Gap Inc 539835 Brandix 100% Cotton – 10th of Feb 25500 yards 15th of
Textiles Twill 2010 2010
th
Next N-5643 China Dye 100% Cotton – 10 of Feb 15500 yards 17th of
Corduroy 2010 2010
M&S MS-535 Arvind Millls 100% Cotton - 12th of Feb 12300 yards 15th of
Twill 2010 2010

But though the fabric inspection division knows which style to be prioritized still there was a
backlog of inspection. So the company decided to find “one best way” 2to handle the situation.
Therefore the assistant manager of the fabric inspection division was asked to find answers for
below given questions.

 How many workers work in the division?

 What are the fabric qualities to be inspected?
 How many minutes take to load a fabric roll to the machine?
 How much time required inspecting a fabric roll?
 How many minutes take to unload the fabric roll from the machine?
 How much time required preparing the inspection report, swatch card & shade range
card?

The fabric inspection division was occupied with ten workers with an assistant manager. And
mainly four fabric types identified. And there are urgent situations where need to prioritize fabric
inspection for certain unplanned fabrics also. Based on the information, the best practice found
was five teams were formulated to handle different types of fabric. With two workers in each
team assigned to handle one fabric kind. The following Table # 2 explains what are the activities
selected.

2
Modern Management 10th edition , page number 28

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In addition allocated time period assigned for the each action this was done with the help of
motion study3. And the team that exceeds the average efficiency level entitled with an incentive.

3
Modern Management 10th edition , page number 30

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An individual received a fixed amount of money for each unit of output. The greater the output,
the greater the pay. Thus the inspection division started to perform to reach the higher incentives.
That helped to reduce the inspection backlog and accordingly the process start to move on
smooth condition.

The Behavioural Approach to Management

MAS Holdings is one of the South Asia’s largest intimate apparel company. This is accountable
for USD 700 million of turnover. The company is very successful in its business. A company
requires strong and enthusiastic work force to challenge the business environment. Particularly in
garment manufacturing companies
require machine operators to run the
business. And keeping them
motivate is equally important to
survive. Though people could be
influenced by bonuses and
incentives it has globally agreed that
by understanding people the
production can be increased.4

In beginning MAS also provided the basic work place standards such as limit on working hours,
overtime, safe working conditions, free transport & breakfast. And company insists that the
managers have meal in the same canteen as everyone. Although company tried to keep higher
standards to keep the work force happy, many women left to marry and then return once the kid
started schooling. To keep the workers to stay long MAS asked them as a company what they
should do. The workers suggested that they wanted to enhance Information Technology and
English knowledge. And now company providing both to the workers.

MAS launched a programme “Women Go Beyond” in November 20035 to give a human touch to
the workers. Customers looking at this as a bench mark for ethical sourcing practices in the
4
Modern Management 10th edition page 35
5
IFS Case study MAS Holdings

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industry. The focus in on promoting knowledge , awareness , leadership skills , attitudinal

changes and the ability of balancing personal life and work life. And it give the ability to take
more responsibility and decisions further helps to communicate better with company and
customer. And more over MAS has strong pool of talents who could picked as future managers.

Each year workers achievements are celebrated through the “Empowered Woman of the Year
Awards Ceremony”; those who receive this award are seen as a role model. MAS’s ethical
practice and the approach helped to be unique among other vendors. In 2006, Gap Inc joined
hands with MAS to launch a programme “Gap Go Beyond”.6

MAS enriched with human relations skills 7 to understand the workers and act proactively to keep
them motivate. But focus only this factor has not helped MAS to become a market leader. At
present customer keen on good quality at lower price where Sri Lanka is not a low cost
producer.8 To overcome the situation simultaneously they were focused on design, customer
service, technology and flexibility. So the key success is not only the behavioural touch but also
the other factors.

The Management Science Approach

Any kind of business will have operational problems in day today business. Certain problems
involve with economic factors. These problems have to be tackled wisely and decisions to be
made after analysing quantifiable factors.9 As such the apparel industry relies on number of
garments shipped to count profit. So that is more important to do the marketing forecast,
production forecast, actual production, and actual sales. And also expenditure related to
marketing, overhead cost, wastage and fabric, trims write-offs are also important factors to be
considered in management science or operation research context in apparel industry.

Apparel giant Brandix uses computer information system as a main tool to monitor the order
details. The following exhibit#2 explains how the process implements. With the help of the

6
IFS Case study MAS Holdings
7
Modern Management 10th edition Page 36
8
IFS Case study MAS Holdings
9
Modern Management 10th edition Page 38

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computer information system the company successfully understand the market trend and
company’s cost structure. With the help of the previous sales data company decides production
capacity for the current season. And later with the actual current order status takes decision to
make changes in production capacity. So it’s making easy to understand whether the company
over budgeted or less budgeted. And by analysing the sales trend company can decide whether to
increase the production capacity for next season, that is looking for new production plants or out
sourcing. If sales were down look for other new customers for new orders.

Exhibit #2 – Process of Decision Making with Quantifiable Factors

Brandix is successful by using Management science approach which is very helpful for
production scheduling and manufacturing process. But this is one of the approaches which
helped Brandix to reach the top of the business. Especially in manufacturing plants not only the
management science approach, the human touch & people management also equally important
handle the situation.

The Contingency Approach

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There are so many influences and variables affect a company or the business unit in modern
business environment. Additionally the internal factors also create difficulty to manage the
process of work. To be proactive and protective company and managers should have new way of
thinking line to over come the situation. This could be internal or external impact but there
should be always a plan B to handle the business. Contingency approach is determined which
practices and techniques are appropriate in specific situation.10

NEXT & Mark & Spencer are two main customers of Brandix Casualwear Ltd; both customers
are accountable for 7% & 18%11 respectively of the company’s turnover. That is in total 25% of
the total turnover.

Table # 2 – Customer wise Sales Turnover

Customer Sales ($’000) Contribution to the Turnover

Gap 45,000.00 39%
ENACT
- Next 7,560.00 7%
- A&F 9,700.00 8%
- Columbia 2,600.00 2%
- Tema 5,000.00 4%
M&S 20,100.00 18%
Lands End 9,500.00 8%

Old Navy 15,000.00 13%

Annual Turn over 114,460.00

(Source: Brandix Casualwear Ltd – Annual Actual Sales Chart 2008)

Above chart explains how the sales turnover distributed among the customers. The customer
base of Next and Mark & Spencer are mainly at United Kingdom and both the customers situated
in UK. Therefore they do fall in EU countries and their orders are entitled for GSP plus 12
benefits. With adjourn of GSP plus scheme the orders in to Brandix Casualwear Ltd is in down
worth trend. But still order flows but in a moderate percentage.

10
Web Page : Houghton Mifflin Texts.htm
11
Annual Actual Sales Chart
12
GSP Plus -

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So the company has already made up the contingency plans as below:

1. Gradually increase the percentage of the Gap sales.

2. Focusing on Old Navy as it has more potential.
3. And already started developments with new customer Banana Republic & Uniqlo, which
are belongs to high customer profile and high profit margins.

All of above plans are already under process and production capacity allocated from Next and
Mark & Spencer slots. The contingency approach is a helpful addition to management thought
because it emphasizes situational appropriateness. Although contingency approach is a
promising step rather than the end of the evolution of conventional management thought, there is
a risk in these plans where if the company fail to understand the new customer’s requirement
there could be a threat of losing orders. And also company might loose market share of existing
customers of Next and Mark & Spencer.

The System Approach

Brandix uses an open management system approach as the company continuously interact with
the environment.13 Company collects of parts operating interdependently to achieve a common

13
Modern Management 10th edition Page 40

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purpose. Working from this definition, the systems approach represents a marked departure from
the past; in fact, it requires a completely different style of thinking. With the help of researches
and secondary date its collect data about market trend, new products, new technology, market
price etc. These will help to understand the new business trend and process the manufacturing or
produce garments to match with current trend. Below exhibit # 3 illustrate how the open
management system works.

Inputs (resources and information) -------> transformation process -------> outputs (products, services,
information) -------> feedback

Exhibit #3 – Open Management System

Input
Government
Customers
Process

Output

Competitors Supplier

(Source Modern Management 10th Edition, Page 41)

This approach helps managers to have a greater appreciation for the importance of seeing the
whole picture. Open-system thinking does not permit the manager to become preoccupied with
one aspect of organizational management while ignoring other internal and external realities. The
manager of Brandix must consider resource availability, technological developments, and market
trends when producing and selling a product or service. Another positive aspect of the systems

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approach is how it tries to integrate various management theories. Although quite different in
emphasis, both operations management and organizational behaviour have been strongly
influenced by system thinking.

Learning Organisation

This is a new direction in management approach. Organizational learning is knowledge

management. Brandix learn from the external & internal environments. And it explores for
learning from past experiences, from customer, supplier, competitors and so forth. Brandix
created a learning and knowledge sharing forum inside the company. In every monthly meeting
managers were asked to share their experiences where there faced challenging to handle a
situation with in that month. Further this forum helps to get knowledge about different customers
and different divisions. It is a cross functional team meeting and organizational learning occurs
regularly. Human resource development activities, strategic and other planning activities and the
introduction and mastering of new technologies for doing work are three common learning
processes.

Recommendation & Conclusion

It is recommended to an apparel company manager should use management science approach to

take decisions to solve operational issues. They should observe the operation what takes place in
all the operational divisions like warehouse, cutting department, & in the production unit. And
implement certain changes and analyse how these changes effected the operation and check on

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weaknesses. Follow a contingency approach to management to handle critical situations. Apply

system approach as the apparel business has lot of environmental influences from external
stakeholders like customers, suppliers, government, competitors, banks, unions and regulatory
agencies. At last managers should be able to learn from internal and external environment and
rely on feedback to adjust to changing environmental conditions.

So we emphasize in today’s world, organisations must practice multiple management approaches

to determine the effective job performance in various work situations and across cultures.

References:

Samuel C.Certo, S Trevis Certo, 2008, Modern Management, 10th edition, PHI Learning Private
Limited, New Delhi-110001, India (Eastern Economy Edition)

Brandix, website, Retrieved from, http://www.brandix.com/index.html on 15 Jan 2010.

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Brandnet, intranet, Retrieved from, http://brandnet/ on 15 Jan 2010.

Brandix Market Watch, portal, Retrieved from, http://brandnet/brandixmarketingwatch on 15 Jan

2010.

A Brief History of the Management Field, website, Retrieved from,

http://college.cengage.com/business/kreitner/foundations/1e/students/appendices/appendix_a.ht
ml#The%20Univer on 11 Jan 2010

Schools-of-Management-Thought, website, Retrieved from,

http://www.scribd.com/doc/4541824/Schools-of-Management-Thought on 11 Jan 2010

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