Setting Up of A Garment Industry: Submitted by

SETTING UP OF A GARMENT INDUSTRY

Submitted By:
Dilip Singh
Kumar Sarvesh
Rajeev Sharan
A.P.-04(D.F.T.)
NIFT BANGALORE/ A.P. (DFT)/2008-12

[Type your address]  [Type your

STRUCTURED
CONTENTS
STRUCTURED
INTRODUCTION
 Stages of Business Development
 Objectives of the Project
 Scope of the Project
 Benefits of the Project
 SWOT Analysis
 Terms Used in Foreign Trades
Market Analysis
DILIP
 COMPETITIVENESS OF INDIAN APPAREL EXPORT FIRMS
phone
SYSTEM

SINGH
CARPORATE MARKET
SYSTEM
number]
 INITIATIVES TAKEN BY THE GOVERNMENT TO MAKE THE INDUSTRY GLOBALLY
 KUMAR
COMPETITIVE
 [Type
 LARGEST MARKETS
SARVESH
 TARGETED TRADING COUNTRIES
ANALYSIS
your e-mail
 TARGETED CUSTOMERS
ANALYSIS
 EXPORT GROWTH IN INDIA
 RAJEEV
address]SHARAN
 SHARE OF TEXTILE & CLOTHING EXPORTS IN INDIA‟S TOTAL EXPORTS
 SHARE OF EXPORTS OF VARIOUS CLASSIFIED SECTORS
 HIGHEST EXPORTS FROM TEXTILE SECTOR
& DESIGN
 INDIAN GARMENT INDUSTRY - CURRENT ENVIRONMENT & FUTURE PROSPECTS
& DESIGN
 INDIA‟S SHARE IN WORLD TRADE
 APPAREL EXPORT GROWTH IN INDIA
 TRENDS IN INVESTMENT AND PRODUCTION
 TRENDS IN EXPORTS: HOW DOES INDIA FARE?
 SUPPORTIVE GOVERNMENT POLICIES AND NEW TRENDS TOWARDS
 NEW TRENDS TOWARDS RE-EMERGENCE OF THE TEXTILE AND APPAREL

SUBSECTORS IN INDIA
 FURTHER STEPS REQUIRED TO INCREASE INDIA‟S COMPETITIVENESS
 ANALYSIS ON OVERSEAS MARKET DEMAND OF JACKET INDUSTRY
Workflow in Departments

 Merchandising Department
 Sampling Department
 Purchase Department
 Store Department
 Pattern Making Department
 Cutting Department
 Sewing Department
 Finishing Department
 Flowchart Explaining Workflow in Departments
 Trims and Accessory Department
 Flowchart Showing the Ideal Working of Fabric Department
 Spreading department
PRODUCTS TO BE MANUFACTURED
 Product specification of jackets
 Product Specifications for Men‟s Long Sleeve Shirt
PLANT LOCATION
 Plant Layout
MACHINERY LAY-OUT IN SEWING
 Machinery Lay-out for Sewing room
 Machinery Lay-out for Collar, Cuff, Pocket, Button and Button Holing
Basic corporate information and industry
Financial Information
Technical Capability
Technical Proposal
 Product Description
COST ESTIMATION
 Labour
 FACTORY SUPERVISION
 OFFICE /ADMINISTRATION
 Machinery
 POWER
 Raw materials
 TOTAL COST OF THE PROJECT
 Calculation of Interest on Bank Loan
 Estimation of Depreciation
 Cost Quotation to Customer
 Calculation of Break Even Level
Request For Proposal

 Benefits of requests of proposal
 Specifications
RESULTS AND DISCUSSIONS
 Export contribution
 Export growth
 Export Development in India
 Improved Plant layout
 Modified Sewing Layout

 Cost Estimation
 Feasibility of the project
FURTHER DEVELOPMENTS
CONCLUSION

INTRODUCTION
India is a country of opportunities and after the economic reforms of 1991 the world
market has got wide open for India in all trades especially for the business in export. In
such a scenario opening a garment export house is a very wise thing to do. India is a good
place for textile and apparel industry as here we have abundant availability of cotton
which is the primary requirement for apparel industry, labour comes cheap in India be it
skilled or unskilled which considerably reduces the cost of production and hence
attracting a lot of international business houses which sense an increased amount of profit
in countries like India which over the years have made India a sourcing hub be the
material based industries such as apparel or knowledge based industry such as IT and
telecommunication.
This project has been designed keeping in mind the huge potential of India in the apparel
export industry and utilise this potential to the optimum level possible.
Stages of Business Development
Business idea generation
Business plan preparation
Start-up and growth
Established company
Interest of market
Financing decisions
Objectives of the Project
- To utilize the potential of india in the apparel industry to the optimum level.
- To set up a new garment export company with an initial production target
of four lakhs shirts per with an installed capacity of six lakhs shirts per annum
and 1lakh jacket per annum.
- To provide employment to a number of people thereby to develop their life styles
- To develop the economy of the country by earning foreign exchange

Scope of the Project
After the economic reforms of 1991 the export has played a very important part in the
growth of the economy of the country . Export has considerably flourished in India be it
the services and knowledge based sectors such as IT, telecommunication and BPO or
material based industries such as textiles . textiles is one the major foreign exchange
earner for India in that apparels make a very considerable amount of contribution. A
garment export house set up keeping in mind this project if managed anrd run properly is
sure to gain a considerable amount of foreign exchange for the country and provide
employment to a large number of people in the country. With the growth and
devlopement in the industry ther will be visible contribution in the economy of the
country.
Benefits of the Project
1.Cash assistance
2.Tax concessions
3.Financial assistance
4.Special assistance to export oriented industries
5.Import benefits
6.Foreign exchange
7.Freight concessions
8.Special concessions to small scale industries
9.Awards for exporters
10.Insurance against risks
11.Raw material allocation
12.Duty draw-backs
13.Transport Concessions
1 Cash Assiatance
Cash assistance is allowed on export of selected products to meet the international

price competitions. With these assistances, exporters can sell their products in foreign
market on lower price than the price prevailing in the domestic market even less than
their cost price. The assistance is available only for the registered exporters of approved
products.
1 Tax Concession
Exporters are entitled to many concessions in respect of the income tax, sales tax,
excise duty, import duty and export duty etc.

2 Financial Assistance
Finance in the form of advance or loan is available for export from the Commercial
Banks, Industrial Development Bank of India (IDBI), Reserve Bank of India (RBI),
Export Credit And Guarantee Corporation (ECGC) and State Bank of India (SBI) etc.
The State Trading Corporation (STC) also provides assistance to exporters. The Banks
also make payments against letter of credit (L/C) money in advance against export
documents and packing credit facility is also provided to the exporters.
4 Special Assistances to Export Oriented Industries
Export oriented industries are given special assistances in respect of the following
1.Free permission to have foreign collaboration.
2.Permission for increased capacity of production than the licensed capacity.
3.Preference in obtaining industrial license for various types.
4.Priority in importing capital equipments, machinery, spares and raw materials etc.
5.Priority for further expansion of the industry.
6.Indigenous raw materials are made available to the exporters.
5 Imports Benefits
Registered exporters can get the benefits of replenishment of import contents like
raw materials, accessories, spares etc against export of the product and can apply for
import license against exports of specified products.
6 Foreign Exchange
Exporters can obtain blanket permits of foreign exchange on the minimum export
ofRs.5,00,000 in the case of non-traditional goods and Rs.25,00,000 in the case of
the traditional goods like jute etc. Exporters can also import samples under the
blanket foreign exchange scheme.
7 Freight Concessions
Concessional Railway freight is allowed on the movement of a large number of export

products from their centers of productions to the ports of shipment. Cash assistance is
given against exports of some goods by air to compensate the high freight.
8 Special Concessions to Small Scale Industries
Special facilities and concessions available to small scale industries in respect of

finance, procurement of raw materials, marketing of products and imports.

9 Awards for Exporters
Exporters with the outstanding export performance are eligible for award by the
Government of India. The work relating to the product development, exploration of
difficult and new markets and distinct contribution in any of the exports fields are
taken into consideration for the grants of these awards.
10 Insurance Against Risks
Export involves a number of risks. The buyers may default or they go bankrupt.
There may be victim of war and quake which may wreck his fortunes. There may be
some import restrictions. Goods sent by ship might be lost in the course of transit
etc.Exporters can easily pass all the burden of such types of risks to the Export Credit
Guarantee Corporation (ECGC) for a modest premium.
11 Raw Material Allocation
Arrangements for prompt and proper supplies of selected indigenous raw materials for
manufacturing units producing goods for export have been provided.
12 Duty Draw-backs
When a product is exported, it is entitled to

(a) Wavier or rebate of the central excise duty payable on the export products, and
(b) Draw-backs of the whole of the customs and central excise duties paid on raw
materials and components used in the manufacture of the export products.
13 Transport Concessions
The railway allows concessions of two kinds. One in the priority in the movement of
goods and the other rebate in the rail freights. The priority in the movement is available
for the raw materials required for the manufacture of articles for export available, for
the packing material, special priority label printed and distributed by the Ministry of
Commerce can be pasted on the wagon doors carrying export cargo so as to ensure
speedy movement.

SWOT Analysis
1 Strengths
o Abundant availability of cotton in India
o Cheap labour availibity of skilled labours
o Capability in product development
o Rich cultural heritage and immense diversity
2 Weaknesses
o Cotton production depends largely on rain
o Small scale nature of the industry
o Lack of expansion of the units
o Lack of technological up-gradation
o Delayed lead time
o Infrastructural problems
o Investment and technology
o Lack of exact marketing information
o Unbalanced sector wise (spinning, weaving and processing) developments
3 Opportunities
o Falling market share of the newly entered countries
o Multi fiber agreement phase out
o Backward integrated production in knit sector
o Increasing wage rates of competing countries
o Dissatisfaction of USA / EU with China in certain aspects
o Accelerated export effort

3 Threats
o Competition and pressure on price and quality due to multi fiber agreement
phase out
o Newly developing competing countries like Vietnam and Bangladesh
o Unbalanced sector wise investments and developments
o No balancing between large and small scale sectors

Terms Used in Foreign Trades
1 Place and Mode of Delivery
Place where the buyer has to take the possession of the goods either by means of
physical delivery (directly receiving the goods) or constructive delivery (receiving the
documents like bills of lading or Railway receipts etc, which represent the goods).
2 Transport charges, Packing etc
Normally these charges will be collected from buyers only and some times paid by the
seller also.
3 Insurance against Risks involved in Transit
Insuring for the goods is safe since there are many risks like fire, breakage, theft,
improper handling of middle-men etc. There are many insurance companies undertake
insurance. But it has to be decided who has to pay for the insurance.
4 C.I.F [Cost, Insurance, Freight]
C.I.F is normally included in the selling price itself. Seller undertakes all expenses
upto the place of destination of the buyer.
5 Mode of Payments
This has to be clearly stated by the seller in his quotations i.e. whether the payment is in
advance or against delivery or after a stipulated time along with the details of bank
through which the payments have to be made.
With respect to mode of payment following terms are used
Loco price – cost of goods plus a nominal profit for seller, cost of transportation,
insurance and all expenses to be paid by the buyer.
F.O.B. [Free on Board] – Transfer of the property and of the attendant‟s risks
thereafter are all for the account of the buyer as soon the seller has placed the
goods on board. All expenses including placing on board and expenses incurred
when the goods were in charge of the seller. And all these expenses will be
included in the selling price itself. In USA it is necessary to precisely state

“F.O.B. Vessel” in order to distinguish it from “F.O.B. Rail car (wagon) or F.O.B.
Factory”.
F.A.S. [Free Alongside Ship] – Transfer of property and the attendant risks are
for the buyer as soon as the seller delivered the merchandise alongside the ship.
Here the expenses incurred is to be paid by the seller till this level but the cost of
placing on board from the freight and subsequent charges are for the account of
the buyer.

Payment of Bills
O/D. [On demand] – Payments will be made on demand i.e on the presentation
of the bill. This is also called as sight bills.
C.O.D.[Cash on delivery] – Cash to be paid on delivery of the goods either

physically or against documents.
D/A. [Documents against acceptance] – Clearing the goods and selling before
the maturity of the bill which will be more convenient to the buyer but not to
the seller.
D/P. [Document against payment] – Documents will be held by the bank till the
date of maturity, if the importer undertakes to receive the goods and pay the
amount which is due for the bank and which has been paid to the seller.
L/C. [Letter of credit] – It is a letter issued by the banker of overseas importer

to the exporter or his bank so as to claim the payment from the particular bank
Workflow in Departments

Competitiveness of Indian Apparel Export Firms
Indian apparel exporting firms have proved their competitiveness in some market
segments in recent years. Global trade in apparel is likely to change significantly due to
major changes in the international business environment. The paper takes a view that
Indian apparel export firms will have the opportunity to increase their global market share
provided they take the necessary steps to make themselves competitive in a quota- free
world after 31 December 2004. The analysis is based on a survey of leading Delhi-based
apparel exporting firms. Since the Delhi region accounts for India's largest apparel export
trade, these firms are among the top firms in the country in terms of apparel export sales
turnover. The paper studies select structural and operational parameters of Delhi firms
that could impact their performance in future and brings out critical issues that require
immediate attention. The paper also offers suggestions on how the government can
facilitate better management practices in apparel exporting firms so that they become
globally competitive.
Carporate Market
The corporatewear market can still be split into five segments. These are:
* workwear;
* careerwear;
* corporate casualwear;
* uniforms;
* protective clothing.
The dividing lines between them are becoming ever more blurred. It is no longer possible to
be categorical about where workwear ends and protectivewear begins. To most people a
standard boilersuit made of poly/cotton is workwear. But if the fabric is impregnated with
chemical dyes which make it reflect light, and it therefore becomes a high visibility
boilersuit, has it transformed into protectivewear? The industry has suffered from becoming
„commoditised‟, as a result of irrevocable and irreversible changes in the supply chain.
Consequently the market has become fixated on price to its own detriment.

INITIATIVES TAKEN BY THE GOVERNMENT TO MAKE THE INDUSTRY
GLOBALLY COMPETITIVE
o
Setting up of US $ 6 Billion Technology Upgradation Fund for modernising
the entire value chain of the industry
o
Launching of a Technology Mission on Cotton to improve
o
the quality and productivity of raw cotton
o
Setting up of Special Economic Zones and Textile & Apparel Parks
o
Opening up of Textile Sector for Foreign Direct Investments

o
Progressive reduction of import duty on textile machinery and products
Largest Markets
Following table (table. 2.1) gives the market shares of the major customers of India
Table. 2.1 Largest Markets
European Union 43.80%
United States 24.60%
Other Quota countries 5.60%
Non-Quota Countries 26.00%
Targeted Trading Countries
Quota Countries
1. United States of America
2. Canada
3.West European countries - Austria
Benelux (Belgium, Netherlands & Luxemburg)
Denmark
Finland
France
Germany
Greece
Italy
Portugal
Spain
Sweden
United Kingdom

Non-Quota Countries
1. West Europe – Ceuta
Switzerland
2. East Europe – Bulgaria,
C.I.S
Czechoslovakia
Hungary
Poland
Romania
3. West Asia – Bahrain
Israel
Kuwait
Oman
Qatar
Saudi Arabia
U.A.E
4. Oceania – Australia
New Zealand
5. South and East Asia – Hong Kong
Japan
Malaysia
Singapore
South Korea
Taiwan

6. Africa – Algeria
Canary Island
Kenya
Mauritius
South Africa
Sudan
7. South America – Argentina
Brazil
Chile
Colombia
Mexico
Netherlands
Panama
Venezuela
Targeted customers
1 United States – Tommy Hil Figure
Levi Strauss and Co
Gap Inc
Liz Claiborn
V.F.Corporation
J.C.Penny Company
Wall-Mart Stores
May Department Stores
Federated Department Stores Inc

F.W.Wool Worth Company
2 Japan – Mitsubishi Corporation
C.Itoh and Co
Sumitomo Corporation
Marubeni Corporation
3 France – Studio Aventures
Sunvalley
Export Growth in India
1 Total Export Growth in India
The following table (table. 2.2) gives the year wise total exports of India to various countries
Table. 2.2 Total Exports of India to various Countries
Year Rupees
in crores
1991-92 44041.81
1992-93 53688.26
1993-94 69748.85
1994-95 82673.40
1995-96 106353.40
1996-97 118817.30
1997-98 1301007.00
1998-99 1416035.00

The table. 2.2 shows the total exports in values from India to various countries.
The table shows a tremendous increase from the year 1997-98 than the previous years
which has earned more foreign exchange and better opening hope to the Indian exporters.
So there is a total change in the year 1997-98 which put a basement to earn foreign
currency.
SHARE OF TEXTILE & CLOTHING EXPORTS IN INDIA’S TOTAL EXPORTS
SHARE OF EXPORTS OF VARIOUS CLASSIFIED SECTORS

HIGHEST EXPORTS FROM TEXTILE SECTOR
INDIAN GARMENT INDUSTRY - CURRENT ENVIRONMENT & FUTURE
PROSPECTS
o
12.5% share in India‟s commodity export basket.
o
Represents value added sub-sector.
o
Less import sensitive.
o
7% of Industrial production.
o
Export target of US$ 25 billion by 2010.
o
Future employment generation: Additional 6 lakhs jobs by 2005.
 Source: Draft report of readymade garments for X Five year plan, National Textile Policy 2000-01.
INDIA’S SHARE IN WORLD TRADE

Apparel Export Growth in India
The following table (table. 2.3) shows the year wise total apparel exports from India
Table. 2.3 Apparel Exports of India to various Countries
Year Qty (pcs) in lakhs Value in lakh US$
1985 2559 8660
1986 3008 10550
1987 3842 14380
1988 3967 15520
1989 4941 19130
1990 6027 24950
1991 6648 24010
1992 7585 28830
1993 9052 34670
1994 9960 44220
1995 10602 44740
1996 11847 47920
1997 13015 48640
1998 13380 50490
1999 14040 53230
2000 15050 57450
2001 12643 45430
2002 12316 44100
Using the data in table. 2.3 graphs were plotted in Fig. 2.2 and Fig. 2.3 from which
the following points were observed

Quantity wise – There is a gradual and steady growth in the apparel exports from the year
1988 to 2000, but in the year 2001and 2002 there is a sudden fall.
Value wise - Even though there is increase from 1988 to 2000, there are some fluctuations
then and there. This may be even due to changes in the exchange rate of the currency. But in
the years 2000 and 2001 there is a sudden fall in the graph.
By considering both the graphs there is a sudden fall which may be due to the diversion
of our orders to other countries like China, Bangladesh etc.
5 Apparels and Accessories Export Trade-Data of Competing Countries
2.5.1 Not-Knit Apparels and Accessories Exported to USA
Following tables (table. 2.4, table. 2.5 and table. 2.6) shows the year wise, country wise
Not-Knit (wovens etc) Apparels and Accessories Exported to USA from various countries
[value in thousands of US$].
Table. 2.4 Not-Knit Apparels and Accessories Exported to USA
year China HongKon Indonesi Banglades
g a h Philippine
1989 1588557 2172436 412930 265316 541416
1990 2110809 2203501 445015 339610 666338
1991 2303306 2195271 425147 338835 639603
1992 3073946 2397712 594067 516308 747340
1993 3787807 2226880 724039 556818 842639

1994 3511269 2329259 754713 697798 886061
1995 3276590 2265519 870299 775809 947952
1996 3510669 2109248 983684 797186 919073
1997 4161308 1930828 1132902 1025377 962868
1998 3811343 2184134 1196353 1167443 1048265
1999 3750519 2084823 1261736 1161605 1061924
2000 4167042 2223939 1500569 1471538 1185460
2001 4152517 2003698 1599968 1449558 1176582
2002 4478787 1951781 1456514 1260601 1038342
Year India Italy Srilanka SouthKore Thailand France
1989 512078 585217 261709 1434239 174572 143062
1990 558117 571411 317523 1358404 207098 162610
1991 553824 579168 352983 1212154 246981 143305
1992 744530 593294 482308 1250587 355278 143496
1993 829645 599698 637076 1247709 468231 135963
1994 991176 681987 653643 1155854 486824 141231
1995 905131 822105 719439 1029907 563279 162945
1996 938104 949515 768952 877907 568597 167690
1997 1014761 1003083 911264 884451 637408 155006
1998 1110992 1068681 991755 1000937 652101 178120
1999 1135665 1039939 949814 1112527 711264 161871

2000 1377783 1041451 1079992 1267518 826926 162789
2001 1275864 1025234 1070223 1122299 847171 174570
2002 1384733 1031864 1004306 919224 807535 176697
Year Pakista Nepal Japan Swiz Spain Total
1989 81587 39770 167879 8182 11956 13359914
1990 89787 42511 104535 9791 15923 14364048
1991 85752 41529 90139 14106 12908 14891865
1992 142264 64087 85134 15277 9320 17966676
1993 159095 77963 77400 18905 9601 19861507
1994 164544 104468 65791 20195 12087 21062179
1995 160680 77269 52752 26097 11013 22217488
1996 166850 76899 50554 27912 20094 22869540
1997 223184 63411 54687 38901 22758 25992603
1998 224326 79579 43516 36159 22181 28140633
1999 231502 118986 34853 37623 20964 28691939
2000 308334 143768 38741 36788 18986 32800552
2001 299743 108718 42633 28464 15499 31691335
2002 255422 75661 38531 25506 20989 30895566
Data of certain countries have only been given but total in the
last
column indicates the total imports to USA from all over the
world

From the above table, it is clear that China is in the top most level in exports of clothing.
There are tremendous differences between China and other countries. This statistics shows
very much confidence that there are greater opportunities available to export the not-knit
(wovens etc) apparel items to USA.
There are a lot of fluctuations in values between the countries Indonesia, India,
Thailand, South Korea and Sri Lanka. So India can get the orders tremendously if the
concentrations are made on the points cited in the market trends of this project.
Knit Apparels and Accessories Exported to US
Following tables (table. 2.7, table. 2.8 and table. 2.9) shows the year wise, country wise
Knit Apparels and Accessories Exported to USA from various countries [value in thousands
of US$].
Table. 2.7 Knit Apparels and Accessories Exported to USA
Year China Hongkon Indones Banglade Philippin
g ia sh es
1989 1068637 1632348 158213 59763 286487
1990 1086288 1659794 183716 88451 342030
1991 1131526 1746555 140095 98354 343720
1992 1401062 1869278 232419 171315 408709
1993 1509035 1713753 250749 144103 392726
1994 1574307 1994373 274859 149716 430383
1995 1376489 1995339 318705 220706 540576
1996 1514853 1818417 348495 223559 539651
1997 1836698 2041912 469936 306091 610830
1998 1859335 2263708 467064 330503 677105

1999 2024269 2189891 428228 363599 712296
2000 2034623 2268079 559271 470614 690502
2001 2277225 2198345 615068 480685 700451
2002 2619334 1949776 584960 494791 769030
Year India Italy Srilank Southkor Franc
a ea Thailan e
1989 28800 223642 91999 1127977 207420 33055
1990 30877 226101 106764 889796 228890 33378
1991 45009 204716 128029 717333 264689 25101
1992 83593 188702 142585 675611 360752 24420
1993 133174 177068 159108 697367 361789 23051
1994 192853 220873 171665 728743 416135 28424
1995 258358 254092 199313 630612 478357 33879
1996 311847 322687 232571 545912 490327 37298
1997 386028 353366 286693 670249 638365 43973
1998 449442 414632 308289 902601 816561 48897
1999 437414 441257 307940 989318 814022 52157
2000 473902 493688 376815 995061 1013976 56433
2001 505541 491237 416116 1049731 992468 56457
2002 571625 446909 401670 1133157 940075 53403

Year Malaysi Pakista Nepal Japan Swiz Spai Total
a n n
1989 164172 106570 2416 44599 6287 4788 8583099
1990 189978 117167 1449 35364 6013 5248 8616738
1991 214945 123867 1184 23824 6690 3179 8853569
1992 215982 195195 846 23288 4774 2711 10288371
1993 195209 200081 1161 20461 5285 2272 10630702
1994 224936 276175 2239 15460 6757 3949 12188227
1995 256260 393270 3374 14650 7690 7510 13885932
1996 266430 400605 11675 13770 8097 4240 15060046
1997 294438 400582 20852 14741 9497 3780 18653248
1998 355906 458919 20939 18401 8954 4589 21654658
1999 364713 509646 17159 22989 9082 5516 23712398
2000 396578 620867 34770 32008 8396 7314 26405227
2001 413148 635077 40652 92714 9161 6573 26858264
2002 431908 627595 32384 135069 7155 4267 27823050
Note: - Data of certain countries have only been given but total indicates the
total imports to USA from all over the world and not the total of given data.
1)- HongKong and China are the competing Exporters to USA in Knits.

2)- HongKong was leading all the other countries till the year 2000 but from 2001 HongKong
has got drop and China has crossed it and raised up comparatively.
3)-India Exports only a minimum level to USA but there is a steady and gradual
improvement in the level by every year.
4)-South Korea, Thailand, Sri Lanka and Philippines are the competitors to India.
Trends in investment and production

In the post-independence period until the mid-1980s, India followed a strong inward-looking
policy, using a variety of regulatory mechanisms to orient the textile and clothing sector in a
key way. A strict industrial licensing regime required firms to seek government permission
for establishing any new operation or the expansion of existing ones, while several sectors
such as garments, knitting etc., were kept restricted for small-scale entrepreneurs, and strict
labour laws proved a disincentive for expansion. The New Textile Policy relaxed several
licensing requirements, raised the maximum limits on allowable investment and reduced
import controls. Businesses were also encouraged to modernize their technological base
through the disbursement of cheaper lines of credit.
This trend continued in 1991 with the opening up of the Indian economy, but the sector
remained largely stagnant and decaying during the 1990s when several large mills closed and
several traditional entrepreneurs moved out of the textile trade. In fact, after a very long time
the sector has received a real boost only in the past four-five years as the general economy
has substantially improved, leading to a surge in demand. There is an all-around sentiment of
tremendous optimism, backed by a surge in production and investment growth. As the
investment figures in figure I show, the sanctioned investment (basically, projects in various
stages of implementation) has shown almost 100 per cent growth, year-on-year, for the past
five years. The investment figures at this level have so far been unprecedented in the history
of the Indian textile sector.

Sanctioned investments in India's textile and clothing sector
As a result, production in the Indian textile sector has certainly received a boost as can be
seen from figures II and III, which show the increase in the production of yarn and fabric of
cotton. In fact, the growth in yarn production has averaged between 8.5 per cent and 10 per
cent for various types of yarn after a period of stagnation. Similarly, the rate of growth for
fabrics in the past few years has increased from 8 per cent to 10 per cent and the target has
been set at 12 per cent during the next five years of the Eleventh Plan. In cotton textiles,
particularly, this growth has come after a long period of practically a flat graph.
At this point, it is worthwhile analysing the growth drivers that are boosting India‟s textile
demand and consequent production. In the domestic sector, the increase in GDP per capita, at
around 8.5 per cent for the past four to five years, has significantly increased the disposable
income of the expanding Indian middle class.2 The increasing number of working women,

the greater use of credit cards and the greater number of working youths (a result of the much
talked about “demographic dividend” boom in the construction/housing sector leading to the
use of more home textiles) have all facilitated increasing purchases of textiles and clothing
items. Above all, the growing penetration of organized retail (the percentage of which is
expected to grow from the present 3 per cent to more than 10 per cent by 2010) (Kearney,
2006) will facilitate availability, thus substantially increasing purchases of textiles and
clothing by Indian consumers.
In the export sector, the end of the MFA has given a boost to the Indian textile entrepreneur
trend, which has been augmented by the progressive dismantling of spinning and weaving
from the developed world.
In fact, in response to the growth drivers, and in anticipation of those drivers becoming
sustainable in the long term, the Indian textile industry has been making substantial
investments in the past four-five years (see figure I).

Trends in exports: How does India fare?
Indian exports from 1992/93 to 2005/06 showed an increasing trend (figure IV), especially in
2005/06, when a growth rate of 18.33 per cent was recorded. However, India was not a big
gainer during the early period of integration. While the share of China in global textile and
clothing exports increased from 7.94 per cent in 1990 to 14.75 per cent in 2000, 20.93 per
cent in 2004 and 24.02 per cent in 2005, India‟s figures are more modest. India‟s share
increased from 2.22 per cent in 1990 to 3.16 per cent in 2000, 3.12 per cent in 2004 and 3.56
per cent in 2005.
The United States has remained the largest single-country destination for Indian textile and
clothing exports, with its share rising from 21 per cent in 1995/96 to 27 percent in 2005/06
(figure V). The European Union, with 41.006 per cent, is a major destination. Among other
major destinations are the United Arab Emirates (5.51 percent), China (3.05 per cent),

Canada (2.21 per cent), Bangladesh (2.15 per cent) and Saudi Arabia (2.02 per cent).
Compared with 1995 figures, there has not been any major change. The United States and the
European Union remain India‟s major destinations, with the latter country becoming of
increasing importance. The major items of export to the United States comprise ready-made
garments and made-ups, including home textiles and carpets. However, Japan has declined
somewhat as an export destination, with a present export level of only 1.5 per cent compared
with 3 per cent earlier. At the same time, not unexpectedly, China has become an important
importer of raw cotton and cotton yarn.
Analysis of production and export trends
Certain characteristics of India‟s textile and clothing sector stand out when compared to other
successful exporters. First, unlike several other exporting countries, India has a strong
domestic textile presence across the entire value chain, ranging from raw materials to
garments. Indeed, India‟s apparel industry draws heavily on its local fibre and fabric base. It

is thus hardly surprising that India‟s export basket consists almost equally of textiles and
clothing, with values of US$ 8.86 billion and US$ 8.22 billion, respectively. Only a few
countries such as China, Indonesia, Pakistan and Turkey, plus the European Union, are strong
in both subsectors or else their major clothing exporters are also significant textile importers.
However, this strength in textile production and raw materials has not been properly utilized
in enhancing exports, as China has so capably done. One reason has been the restrictive
government policies that, until the 1990s, kept the garment subsector only for the small-scale
enterprise sector, while labour policies ensured that most industries would rather remain
small and not take export orders then expand. Another reason was a huge disparity between
domestic textile producers and apparel exporters – the two being separate set of
entrepreneurs. The latter group was thus unable to take full advantage of India‟s extensive
textile production capabilities.

Third, the Indian textile and clothing sector received an insignificant FDI inflow of only US$
450.02 million between 1991 and March 2006, amounting to just 1.16 per cent of total FDI of
US$ 38.96 billion.3 This was due, in part, to the lesser attractiveness of India as an FDI
destination and in part to the Government‟s restrictive policy. Thus, India was unable to gain
from the growing global integration as the rapidly expanding apparel-exporting countries
such as Cambodia, China, Mexico and Viet Nam, plus the countries of Eastern Europe, were
able to expand their apparel exports due to substantial FDI inflows.

Another consequence of the poor FDI inflow was the relative absence of global retailers and
textile chains until quite recently. The weak presence of major buyers such as Wal-Mart,
Sears, Nike and Liz Claiborne hindered the organization of the domestic product towards
substantive exports. A third factor that hindered India‟s export growth was its absence from
practically all major regional free-trade agreements. In the past decade, the fastest-growing
apparel exporters – Bangladesh, Mexico, Romania and Turkey – have all been part of
preferential trade agreements while China has received massive FDI inflows from Hong
Kong, China, Taiwan Province of China and Japan. In fact, each of the above exporting
countries experienced a surge in exports after joining their respective regional trade
agreements or a bilateral preferential trade agreement.
Supportive government policies and new trends towards
re-emergence of the textile economy in India
1. Supportive government policies
It has been shown above that the Indian textile and apparel sector has shown positive signs of
an upturn in the past three to four years. The Government has taken several positive steps,
detailed below, to facilitate the smooth growth of the sector.4
(a) Technology Upgrading Fund Scheme
To facilitate technological upgrading in the sector, the Government launched TUFS with
effect from 1 April 1999 for five years initially, and which has now been extended up to
2011/12. The scheme provides for reimbursement of 5 per cent interest paid on term loans for
technological upgrading of textile machinery. In this way, the Government has assisted the
Indian textile companies by ensuring that they are not over-burdened by the high interest rate
prevailing in the country.
(b) Integrated textile parks scheme
In order to a world-class infrastructure for textile units as well as facilitate the need for them
to meet international social and environmental standards, this scheme envisages the creation

of textile parks in the public-private partnership mode. Currently, 30 parks are in various
stages of implementation, and 50 more are planned for the next five years.
(c) Fiscal rationalization
In the 2006 budget, the excise duty on all manmade fibres and yarns was reduced from 16 per
cent to 8 per cent. The 2007 budget carried it forward by reducing the customs duty on
polyester fibres and yarns from 10 per cent to 7.5 per cent. The customs duty on polyester
raw materials such as DMT, PTA and MEG were also reduced from 10 per cent to 7.5 per
cent. These measures are expected to make manmade fibres and yarn cheaper and thus
increase the competitiveness of fabric and apparel manufacturers.
(d) Technology Mission on Cotton
In February 2000, the Government launched the Technology Mission on Cotton with the
objective of addressing the issues of raising productivity, improving quality and reduction of
contamination in cotton. Indeed, cotton production in the past three years has increased
substantially and contamination has been reduced, as assessed by independent agencies.
(e) Other steps taken to increase competitiveness
Earlier, only small-scale manufacturers were allowed to make woven RMG, knitted and
hosiery products. While the initial aim was to boost employment opportunities and promote
entrepreneurship at the smaller enterprise levels, in practice it rendered the small
manufacturers uncompetitive globally. By 2003/04, the sector had been totally freed. In
addition, FDI up to 100 per cent through the automatic route has now been allowed.
2. Positive response of the industry
The industry has responded positively to these policy initiatives, and investment in this sector
has been unprecedented. In fact, growth figures during the past few years have made the
entire textile industry brim with unprecedented confidence and optimism. It is no coincidence
that two separate studies (although overlapping in part), carried out in 2006, projected almost
identical growth targets for the industry. The first study was the “Report of the Working
Group on the Textile and Jute Industry for the Eleventh Five- Year Plan”,5 in which the

textile industry was projected to grow at 16 per cent in value to reach US$ 115 billion by
2012. The report also projected a growth rate of 12 percent in volume for cloth production
while apparel was expected to grow at 16 percent in volume and 20 per cent in value terms.
Exports were expected to grow at a rate of 20 per cent in value. The second study was the
Confederation of Indian Textile Industries-sponsored “Vision for the Indian Textile and
Clothing Industry” prepared by CRISIL.6 The study envisages a figure of US$ 110 billion by
2012, boosted by a CAGR of 10 per cent annually in the domestic sector and 19 per cent
annually in the export sector.
New trends towards re-emergence of the textile and apparel subsectors in India
Several new trends can be seen in the textile and clothing sector that will only serve to
strengthen the sector.
(a) Consolidation and integration
There is a significant scaling up by way of horizontal consolidation and vertical integration.
The majority of the investments under TUFS have come not from new entrants but by the
existing players. With the removal of restrictions on increasing capacity, following the
progressive liberalization of this sector during the mid-1980s and continuing into the 2000s,
the mean investment per firm in plant and machinery has significantly increased. In the past
fours, in particular, this trend has greatly accelerated. The largest Indian firms, such as
Arvind, Indian Rayons, Vardhaman, Welspun and Alok, among others, have sanctioned
investments of more than Rs 10,000 crores in the past few years.7
Second, there has been a significant forward integration into garments by yarn makers,
spinners and major weavers. For example, Arvind Mills and Vardhman exemplify this trend.
Interestingly, a significant number of cotton ginners are forward integrating into spinning, as
can be seen in the cotton areas of Andhra Pradesh and Punjab.
Third, significant backward integration by small and medium-sized knitwear exporters into
yarn-making is occurring in the Coimbatore-Tirupur area. In fact, some of the best examples

of full integration are exemplified by Alok, Welspun Industries and Vardhman Industries,
which straddle the entire range from spinning to branded garments and home textiles.
Thus, there is an all-around trend towards scaling up as well as capturing the entire value
chain from spinning to garmenting, in order to gain from the efficiencies at each level. Even
the government-facilitated integrated textile parks scheme is serving the purpose of informal
consolidation, as despite separate ownership, firms are likely to have a similar brand name
and take common big orders.
(b) Blurring of boundaries between export and domestic markets
Whereas previously domestic textile companies and exporters formed two separate sets of
entrepreneurs, that boundary is now fast becoming blurred, as all major domestic players are
becoming significant exporters. As purchasing power in the Indian market has increased, due
to India‟s increasing GDP and “demographic dividend”, there has been a rapid rise of
domestic brands. Practically all of the 20 to 30 top textile andm apparel firms have
introduced their domestic brands and are aggressively positioning themselves within
segments of domestic markets.
As these players become large, several of them are going beyond the national boundaries by
purchasing international brands in order to penetrate the First World market as well as to
supply the domestic market under that brand name. For example, in the home textile market,
Welspun has purchased Christy while GHCL has purchased Dan River and Roseby‟s,
Creative has purchased Portico brands to facilitate entry into the United States and European
Union markets while Alok Industries has purchased 8 to 10 European brands.
Thus, the earlier difference between domestic manufacturers and exporters is being whittling
away; the successful textile player has to constantly look at opportunities in the domestic and
export markets.
(c) Entry of large domestic and foreign retail buyers
Until recently, India had been virtually ignored by the top international retail chains. Now
their strong presence is increasingly being felt and several top firms have opened their

sourcing centres in India. However, even more significant is the impending entry of the very
large Indian retailers such as Reliance, Bharati-Wal-Mart, the Aditya Birla Group and Tata-
Trent. Although the current penetration by organized retailers is only 3 per cent in India, it is
expected to grow to around 12 per cent by 2012. As clothing forms an important aspect of
organized retail, the sale of clothing through organized retail chain shops can be as high as 15
per cent to 20 per cent of total sales. This would still be much less than in the United States,
where the 24 biggest retailers account for 98 per cent of apparel sales. The position in the
European Union is similar.
International experience suggests that because of their large distribution network and
considerable buying power, these high-volume retail chains exert a great deal of control over
prices and quality terms. The retail experience has two other features. First is “lean retailing”,
which allows retailers to maintain a lean inventory, but will involves suppliers for “rapid
replenishment” of goods. Second is the concept of “full packaging” in that rather than buy
fabric from specific sources for conversion into apparel by different sources, the retailer
prefers a “full package” solution from a limited member of sources. Thus, the increasing
presence of national and international major retailers in India will result in further formal and
informal vertical integration and horizontal consolidation in the sector as well as in
enhancing quality trends. The pressure on margins will serve to reduce inefficiencies in the
system by way of further modernization, consolidation and integration. The best outcome,
however, will be the increase in the demand for fabric and, hence, an increase in the size of
the sector.
(d) Confident participation in foreign exhibitions
Indian textile and apparel exporters are now confidently exhibiting at international trade fairs
as they seek new areas and territories. The various textile and apparel export promotion
agencies are currently extremely pro-active and have introduced several schemes for
promoting exports to new areas. An example of this newfound confidence was the recent

Indian participation in Heimtextile at Frankfurt where, after the German exhibitors, the
second highest number of participants were from India.
Further steps required to increase India’s competitiveness
(a) Improving labour laws
One of the main requirements for growth in the apparel subsector is the
relaxation/amendment of the labour laws, to ensure an equal chance of success for the
country‟s exporters and manufacturers in the present global environment.8 Outdated labour
laws have induced inflexibility in the clothing industry, leading both to fragmented
operations in order to circumvent these laws and to lost export orders due to industry‟s
hesitation over expanding when there is an upsurge. Most of the countries competing with
India have labour laws that are more flexible. For example, the Chinese apparel industry has
highly flexible labour laws that allow for lay-offs during the non-peak season, hiring of
contract labour, and a flexible hiring and firing system in SEZ-based units. The Mexican
apparel industry allows layoffs during the slack business season.
The industry in India is proposing the provision of flexibility to textile exporting units in
hiring labour, subject to ensuring 100 days employment to cater to variations in demand. An
increase in daily working hours from 9 hours a day to 12 hours a day, and in weekly working
hours from 48 hours a week to 60 hours a week, is also being proposed.
(b) Decreasing transaction costs
Various studies have established that the transaction costs faced by the Indian industry are
very high, which adversely affects its competitiveness. A study undertaken by the EXIM
Bank of India clearly showed that although transaction costs in India had declined because of
declining procedural complexities, they were still substantially higher if compared with
competitors. Transaction costs vary from sector to sector, and are very high in the textiles and
garment subsector, ranging from 3 per cent to 10 per cent of export revenue in 2002. These
costs, inter alia, are shown in table 2.

(c) Improving the general infrastructural conditions
This improvement includes roads, transportation etc., so that the costs of reaching the nearest
port as well as turn-around time at the port are globally comparable, to ensure that Indian
exporters are not placed at a disadvantage vis-à-vis global competitors.
(d) Augmenting existing training infrastructure
Significant improvements are necessary in order to ensure the availability of a sufficient
number of trained personnel needed to meet the huge shortfall. Already, areas such as
Tirupur and Surat are experiencing a noticeable lack of trained manpower.
Conclusion
Investment in the textile sector in the past three to four years, the consequent increase in yarn
and fabric production and the immense optimism witnessed in the sector have definitely
resulted in a very different scenario compared to the stagnation and the despondency
witnessed just five or six years ago. As India‟s Minister of Textiles has said, “the erstwhile
sunset sector is now recognized as the new sunrise sector”.
However, it must be recognized that the industry still has a long way to go, these recent
advances notwithstanding. Large sections of the textile value-chain still need to be fully
modernized, while the export sector has yet to take full advantage of its existing production
strength. There are many areas around the world and many product lines where India is very

weakly represented. Thus, while the private sector will need to continue its heavy investment
in this industry during the next several years, building on the recent positive trends, India also
needs to integrate more fully into the global textile and apparel value chain in order to reap
the full benefits from its strengths.
Only a coordinated effort by all – the Government, industry and individual units – can enable
India to achieve its apparently high and stretched targets of the eleventh Five-Year Plan.
Therefore, the next five years will indeed be a period of reckoning when the future direction
of the Indian textile and apparel sector will be set for the foreseeable future. The period
2007/12 will also show whether India has successfully grasped the momentous and
unprecedented opportunity that has come its way.
Analysis on Overseas Market Demand of Jacket Industry

Continent Distribution of Buyers in the Past Half Year
Asia, Europe and North America are

important export markets of World‟s
jacket industry.
Continent Distribution of Buyers’ Inquiry in the Past Half Year (the outflow rate of
inquiry in jacket industry was 59.3% in 2008)
In overall inquiry distribution, 86% of

the inquiries of jacket industry are
from Asia, Europe and North
America. It has great
market potential.
Buyers’ Activity in the Past Half Year

Top 5 Countries/Regions with Most Buyer Feedback in Jacket Industry
Top Keywords in Jacket Industry


Post 2010 – Style analysis

Graphics come with an oversized, animalistic twist in a strong mononchrome
palette.
Artistic, painterly details to severe simplifications,
The motifs befit consumer or manufacturer simulated customization, allowing
otherwise identical garments to be injected with personal-tinctures.
Taking the lead from Givenchy's Spring Summer 2009 offing, dip-dye appears on
a multitude of classic summer shirts. The options are almost limitless, the
technique applied to lumberjack check, a fresh take on an established trend, soft
chambrays imbued with a hint of Western, and more formal attire.

Typically feminine florals are reappropriated by the boys, emulating Liberty's

forage into their rich archives. Small florals lose all associations with interior
fabrics and granny-chic as they scale new notions of masculinity on traditional
shirt shapes.
Refined sportswear meets prescribed tailoring, echoing Christopher Shannon's
elegant sensibilities. Soft pastels are patchworked in contrasting materials on
long-sleeve shirts with casually rolled sleeves, emanating a quiet aplomb. At
Louis Vuitton the theme continues through to outerwear, echoed on masculine
suiting
Colour pallet

ORGANIZATION
The business will be headed by Business Head (Vice President); he will be supported by
four functional heads namely,
GM (Head Manufacturing),
GM (Marketing/Merchandising),
GM (HR/Admin) and Head Finance.
The Head Manufacturing (GM) will head the Pre-Production, Accessories Stores, Cutting
Department, Planning, Industrial Engineering, Sewing Department, Quality, Finishing,
Maintenance and MTM department. The head of departments has an indirect reporting
responsibility to the Marketing/Merchandising Department. The Marketing/
Merchandising Department have a major role to play and are involved in every stage of
the product development. GM (Marketing/Merchandising) heads the all the activities in
the three departments namely Marketing/Merchandising, purchase department and fabric
department. Head Finance has mainly two functional areas, the financial activities and the
EXIM or the documentation activities. The GM (HR/Admin) heads the activities of the
HR department, Admin department and the IT department.
The Department heads reports to the respective GMs for the various activities and major
decision making in the departments.
The work flow of the industry is a planned and coordinated effort from all the
departments. Giving the importance to quality and precision, checks would be performed
at every stage of Manufacture right from pre-production to post-production. There would
16 different departments in the proposed industry. They are
1. Marketing and Merchandising Department

2. Purchase Department
3. Pre-Production Department
4. Planning Department
5. Fabric Department
6. Accessory and Store
7. Cutting Department
8. Sewing Department
9. Finishing Department
10. Quality Assurance
11. Industrial Engineering, Research & Development Department
12. Maintenance Department
13. Accounts and Finance Department
14. Human Resource & Administration Department

15. Information Technology Department

16. MTM(Made to Measure) Department
All these departments are directly or indirectly related to the process of production. The
following flowchart will explain the working of departments which are directly involved
for the process of production right from receipt and conformation of order to purchase
than production to final finishing processes.

PRODUCTS TO BE MANUFACTURED
Initially it has been desided to start with men‟s full sleeve shirt and jacket depending on
the order received more products can be incorporated at later phase.
Product specification of jackets
Various fabrics used and varios parts of a jacket : -
1) Shell fabric
2) Lining fabric
3) Knitted fusing
4) Parts Woven fusing
5) Woven Reinforcement
6) Camel Canvas
7) Horse Canvas
8) Felt
1) Shell fabric
Parts name Cut parts
Front 2
Back 2
Side panel 2
Front lapel 2
Top sleeve 2
Under sleeve 2
Breast pocket 1
Breast pocket facing 1
Top collar 1
Collar stand 1
Front pocket bone 2
Front pocket flap 2
2) Lining fabric
Back 2
Front 2
Side body 2
Top sleeve 2
Under sleeve 2
Cigarette pocket lining 1
Welt pocket 1
Front arm tap 1
Flap lining 2
Triangle flap 1

Cigarette pocket bone 1

Cigarette pocket face 1
In pocket facing 2
In pocket bone 2
Pocket face 2
Knitted fusing-------------------------------------------------05
Canvas---------------------------------------------------------07
Canvas Felt----------------------------------------------------02
Parts fusing----------------------------------------------------14
Reinforcement------------------------------------------------03
TOTAL--------------------------------------------------------------------62
TRIMS & ACCESSORIES DETAILS

1) Shoulder pad
2) Thread
3) Satin tape
4) Size label
5) Neck label
6) Content/Care label
7) Sleeve label
8) Main label or brand label
9) Bridle tape
10) Felling tape
11) Besom tape
12) Armhole tape
13) Double sided fusing with paper
14) Double sided fusing without paper
15) Polybag
16) Hanger

Product Specifications for Men’s Long Sleeve Shirt
Men’s shirt – Long Sleeve (42”size)

Name of the parts No of pieces per garment
Main Parts
Front 2 pcs
Back 1 pc
Sleeve 2 pcs
Back Yoke 2 pcs
Collar 2 pcs
Collar Band 2 pcs
Cuff 4 pcs
Pocket 1 pcs
Sleeve Placket-big 2 pcs
Sleeve Placket-small 2 pcs
Interlinings
Collar 1 pc
Collar Band 1 pc
Cuff 2 pcs
Front Placket 1 pc

WORKFLOW PROCESS CHARTS

In Merchandising Department
Receipt of Enquiry
Performance of Feasibility
Confirmation of the Order
Preparation of Samples/Counter Samples
Planning of Material
Preparation of Work Order Finalization of Planning with Factory Personnel
Information to Purchase for the Placement of Purchase Order
In Sampling Department
Receive Enquiry with Sample Garment and Specification
Identify Feasibility and Consumption
Develop Samples
Approve from Buyer
Identify Shrinkage Level of the Fabric and Final Construction Details
Size Set Preparation and Approvals

In Purchase Department
Affirmation of Enquiry by the Supplier
Placing the Purchase Order
Affirmation of Purchase Order by Supplier
Constant Evaluation of Suppliers for the Quality at Purchase Stage
In Store Department
Material Receipt at Store
Quality Check for Incoming Material
Material Issued Based on Production Order from Store to Production
In Pattern Making Department
Generation of Production Pattern
Generate Sewing Template
Maintain Library of Patterns
In Cutting Department
Bulk Cutting on CAD/CAM
Sorting and Numbering
Issue of Cut Pieces to the Sewing Lines

In Sewing Department
Module wise Sewing and Attachment of Components
Supervision and Application of Correct Methods in Sewing
Inline Checkers
Final Checkers
(100% inspection for washing related defects and consistency in dimensional stability)
In Finishing Department
Pressing to give Final Shape
Finishing Quality Checkers
Packing as per Purchase Quantity Buyer‟s Specification
Final Quality Check and Buyer inspection on AQL
Dispatch

Flowchart Explaining Workflow in Departments
Sample
Customer/ Mktg/Merchandi Patterning Mktg/Merchandi

Buyer sing Department sing
Department Department
Sample Samp
Prot approval le
o
Pre Production Mktg/Merchandi

Sample (to pre sing Order Customer/
production Department confirmed Buyer
department)
Fabric and Purchase Defects

Accessories store order to
Dept. purchase
Dept.
Fabric Trims
Finish
Sewi ing
Cutti ng Finishing Qualit
Cutting ng Sewing Qual Dept. y
Dept. Qual Dept. ity Check.
ity Chec
Chec k.
k.
Customer/ Shipment Warehousing Packing

Buyer

Marketing/Merchandising Department
This department carries out the most important function of the firm i.e. getting new
orders for the company. They are in direct contact with the buyers and their agents. They
take the orders, process the orders and ensure that the products are delivered in the right
time to the customers. On time delivery is the core success of every garment industry and
the quality of the products make them retain their customers. Marketing/Merchandising
department ensures that the quality of the product and the on time delivery of products.
And due to this reason Marketing/Merchandising department has its involvement in each
levels of the product development.
After all the initial processes, the GM (Marketing/Merchandising Department) receives
the order in the form of program specifying the following details
1. Order Quantity
2. Production Description
3. Details about Raw Material
4. Details About Production Processes
5. Details about Delivery Date Place and Type
6. Price
After that the feasibility of the order is checked considering the following factors
1. Production Capacity and capability
2. Delivery Time
3. Costing
4. Quota Availability(almost negligible in post MFA scenario)
5. Risk Factors
In Marketing and Merchandising Department the work flow is as follows.
Receipt of Enquiry
Performance of Feasibility
Confirmation of the Order
Preparation of Samples/Counter Samples
Planning of Material
Preparation of Work Order Finalization of Planning with Factory Personnel
Information to Purchase for the Placement of Purchase Order

26th FEB. 2010
Trims and Accessory Department
Flowchart for ideal working of Trims and Accessory Department
Receipt of BOM
Coordinate with purchase department regarding raising PO
Receive goods against order
Quality and quantity check
Advise merchandising and purchase department
Issue trims according to work order
Coordinate with maintenance department regarding consumables
Daily stationary issue
Arranging and allocating materials properly
Preparing reports of issue
Pattern
Alarm making Department
to merchandiser for shortage
59
26th FEB. 2010
Process Flow
Patterns made manually
(from pattern making
section)
Patterns cut
Patterns placed on digitizer

board
Points and curves marked

through the digitizer
Patterns made on computer

system
Patterns used for marker

making through software
Printouts through plotter
60
26th FEB. 2010
Flowchart Showing the Ideal Working of Fabric Department
Receipt of BOM
Coordinate with purchase department regarding raising PO
Receive goods against order
Quality and quantity check
Advise merchandising and purchase department
Issue fabric according to work order
Coordinate with merchandising department regarding consumption
Daily Report Generation
Arranging and allocating materials properly
Fabric sponging
Checking fabric on four point system
61
26th FEB. 2010
Spreading department
Load fabric roll by auto loading
Position the roll according to start selvedge
Specify the no. of rolls to be laid
Thread the fabric
Spread the perforated paper on lay table
Set up start end clamp determining lay length
Laying
Start air blow during transferring of lay to cutting m/c end
Cutting department
Put the marker on the lay
Check for all parts of lay with the help of miniature marker
Fill all the information‟s of cutting format
Cut the lay by straight knife
Bundle the parts and send to bundling
PLANT LOCATION
Site location for the plant has been proposed near the outer ring road in HSR layout
which has the following advantages.
Reasonable land cost
Easy availibilty of workers and very reasonable wage.
Good and peaceful working condition
Security is not a problem
62
26th FEB. 2010
Continous power supply

Transportation is available easily
Banking facilities
Sufficient water resources
Good communication facilities
Plant Layout
It is basically the study the different physical configurations for an industrial plant.
The major factors while making a plant layout is the following
 Space- adequate area to house each function
 Affinity-functions related to each other should be close to each other for the easy
transfer for materials from one function to another.
 Communication-facilities such as telephone, fax and internet should be easily
available.
 Utilities-all necessaties such as gas, electricity, water and sewer should be easily
available.
The geographical limitations of the site are a important factor and involve the
following factors.
 Interaction with existing or planned facilities on site such as existing

roadways, drainage and utilities routings;
 Interaction with other plants on site;
 The need for plant operability and maintainability;
 The need to locate hazardous materials facilities as far as possible from site
boundaries and people living in the local neighbourhood;
 The need to prevent confinement where release of flammable substances may
occur;
 The need to provide access for emergency services;
 The need to provide emergency escape routes for on-site personnel;
 The need to provide acceptable working conditions for operators.
The most important factors of plant layout as far as safety aspects are concerned are those
to:
Prevent, limit and mitigate escalation of adjacent events .
Ensure safety within on-site occupied buildings;
Control access of unauthorised personnel;
Facilitate access for emergency services.
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26th FEB. 2010
Stores
There is a shutter in the side to receive the materials, a door to despatch the fabric
and interlinings to cutting section and a side door to issue thread etc to sewing section.
There are store keepers, checkers and helpers. The raw materials like fabric, trims,
accessories and packing materials are Received at the stores department . Here fabric and
accessories are inspected and kept ready for issuing to the production.
Cutting Section
There is a cutting master, supervisors, layers, cutters and helpers etc. Fabric received
from the stores are laid and cut here. Then assorted in the assorting table adjacent to
the cutting table. Then the cut parts are put stickers to avoid getting mixed with the other
lays or shades and then bundled and sent to for stitching.
Sewing Section
There are sewing line and a common set-up for collar, collar band, cuff, pocket
making,buttoning and button holing as shown in The cut, assorted, ticketed and
bundled parts are fed to the sewing section. Here the parts are joined in assembly line
method. After attaching all the parts together, the garment is sent for buttoning and
button-holing.
Garment Inspection Section
Here the garments are inspected for quality, measurements etc . After inspection the
inspected garments are delivered to the washing section. Here inspection is carried out
on the wider flat tables and in smaller slanding tables.
other sections in the plant includes:
washing section
CAD room
Final Inspection, Ironing, Packing and Carton Storage section
Sampling Section
Canteen / Rest Room for Staffs/workers
Toilet
Security office
MACHINERY LAY-OUT IN SEWING
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26th FEB. 2010
Following machinery lay-out for sewing has been proposed to improve the productivity
and to reduce the material handling.
Machinery Layout in Sewing
Sewing Sewing Sewing Sewing Sewing Sewing

line-1 line-2 line-3 line-4 line-5 line-6
Common Set-up for Preparation of

Collar, Cuff, Pocket, Buttonnig and
Button Holing.
Machinery Layout in Each Sewing Line
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26th FEB. 2010
Following machinery lay-out has been proposed to be adopted in each sewing line
Fig. Machinery Lay-out in Each Sewing Line
2 3
T – Table
1 & 2 – ButtonHole Placket Stitching(DN)
1 T 3 – Button Placket Stitching (SN)
4 – Yoke Label Attaching (SN)
5 – Back Pleating (SN)
9
1 8
6 – Yoke Attaching (SN)
7 – Yoke Top Stitching (DN)
8 & 9 – Pocket Attaching (DN)
T 7
10 – Shoulder Attaching (SN)
11 – Shoulder Top Stitching (DN)
10 6 12 & 13 – Sleeve Placketing (SN)
14 & 15 – Sleeve Attaching (SN)
16 & 17 – Arm Hole Top Stitching (DN)
11 5 18 – Side Attaching (FOA)
19 & 20 – Hem Stitching (SN)
21 – Cuff Attaching (SN)
T 4
22 - Cuff Closing (SN)
23 – Collar Attaching (SN)
14 13 24 – Collar closing (SN)
Same set-up comes for 6 times for 6 lines

15 12
Collar Making, Cuff Making ,
Pocket making , Buttoning and
16 17
Button Holing are common to
all the 6 sewing lines.
T 18
Note
19 20
DN - double needle machine
22 21 SN - single needle machine
23 24
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26th FEB. 2010
Machinery Lay-out for Collar, Cuff, Pocket, Button and Button Holing
Machinery lay-out for collar, cuff, pocket, button and button holing section which
is a common set- up for all the six lines.
Fig. Machinery Lay-out for Collar/Cuff/Pocket/Button Section
T T
31 32
45 43 41 42 44 46
25 26
30
49 37 39 40 38 50
27 29 28
47 35 33 34 36 48
T - Table
25 & 26 – Button Holing Machine
27 & 28 – Button Stitching Machine
29 – Fusing Machine
30 – Pocket Creasing Machine
31 & 32 – Pocket Hem Stitching (DN)
33 & 34 – Collar in-seam Stitching (SN)
35 & 36 – Collar Turning Machine
37 & 38 – Collar Top Stitching (SN)
39 & 40 – Collar Band Stitching (SN)
41 & 42 – Collar and Collar Band Attaching (SN)
43 & 44 – Edge Cutters
45 & 46 – Ironing
47 & 48 – Cuff Inner Stitching (SN)
49 & 50 – Cuff Turning Machine
Machinery lay-outs have been proposed in Fig. 10.1, Fig.10.2 and Fig.10.3 which is
expected to reduce the material handling due to the modifications in the positions of
attaching and making of different parts which will increase the production due to the
reduction in material handling time and reduction in strain put on the operatives.
1.Basic corporate information and industry
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26th FEB. 2010
Products that are to be produced

Jackets
Men‟s full sleeve shirt
Maximum order quantity

We will accept orders upto 1,00,000 pieces and we promise to give the products by the
end of maximum 2 weeks.
There is a separate department in the company which basically is for designing new
garments and if any buyer is convinced to buy a design we are very much negotiable.
2.Financial Information
We have been financed by State Bank of India.
All the dealings will be done through State Bank of India.
3.Technical Capability
Our company is fully backed by technical support.We will be using the best spreading
and cutting machine.
On the sewing floor we have all famous branded machines .We have flatlock, overlock ,
single needle lock stitch and double needle lock stitch machines.
We have two fusing machines and 5 steam irons.
Technical Proposal
Technical proposal is basically a proposal stating the technical details of the company
such as the machines that are used for various purposes.
Sometimes its very important to let the buyer know all the technical details that you have
in order for their satisfaction. It also gives the buyer the assurance of the quality that they
are going to get.
Product Description
Serve for the purpose of sewing shirts, uniforms, jeans, over coats, etc. Applied to a wide
range of sewing materials. Synchronized feed by needle and feed dog can prevent
slippage and puckering between layers of materials.
We are giving the details and specifications of all the machines and equipments that are
beign used there .
1. Sewing Machine
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26th FEB. 2010
SNLS Machines:
Trademark: JUMBAO
Model: TC-740
Company: Ta Chung (Ningbo) Sewing Machine Co., Ltd
DNLS Machines
HS Code: 84522110
Trademark: FEIFENG
Model: 845
Standard: ISO9001-2000
Productivity: 500PCS/MONTH
Origin: CHINA
Packing: 1PC/1CTN
Transportation: BY SEA
Company: Zhejiang Feifeng Sewing Equipment Co.,Ltd.
2. Ironing and pressing
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26th FEB. 2010
My pressing equipment:
a vacuum suction pressing board ,
steam iron with a 3,5 liter water tank, the sleeve board is turned under the
board .
My pressing board is 116 cm long ( 45 inch) and 38 cm wide ( 15 inch) The pedal on the
ground is used for the suction function.My press iron has a Teflon cover.
3. Fusing machine
RPS-L Series
Features:
1. Fusing width 200, 400 or 600mm
2. One side open for large parts
3. Easy belt change
4. Endless belts
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26th FEB. 2010
5. Control Metronic 250 or

6. Optional Metronic SPS-3 with Graphic- display
4. Washing machine
Storage tank with jacket insulated up to 1 lakh liter, Storage tanks for Chemicals food of
various sizes & capacity rang 20 liters to 1 Lakhs liters, Mixing tank, Steam jacketed
tank, Dimple jacketed tank, Processing tank, Scraper type/Agitation tank, Spray dryer,
Pressure vessels, Various equipment?s required for Pharmaceutical Industries, Various
type of material handling systems as well as packaging system as per customer. Any type
of complicated pressed component. Any type of ferrous / Non ferrous welding. Electro
Polishing facility Tank Capacity 2 mtr X 10 mtr long.
COST ESTIMATION
Labour
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26th FEB. 2010
DIRECT LABOUR
Category of Workers No. of Salary per Total salary in
workers worker Rupees
Tailors – skilled 80 3500.00 2,80,000.00
Tailors – semi skilled 86 3000.00 2,58,000.00
Button hole/Button m/c 8 3000.00 24,000.00
operator
Pocket creaser, 7 2000.00 14,000.00
collar/cuff turner
Fusing m/c operators 2 3000.00 6,000.00
Cutting m/c operators 4 3500.00 14,000.00
Ironers 11 2000.00 22,000.00
Packers 5 3000.00 15,000.00
Garment checkers 11 2000.00 22,000.00
Fabric checkers – 2 2500.00 5,000.00
skilled
Fabric checker – semi- 5 1800.00 9,000.00
skilled
Helpers 50 1500.00 75,000.00
Layers 6 2000.00 12,000.00
Store keepers 2 4000.00 8,000.00
Washing Assistant 2 3000.00 3,000.00
Mechanics 2 3000.00 6,000.00
Electrician 2 2500.00 5,000.00
Office boys 4 1500.00 6,000.00
Watch and Ward 4 1500.00 6,000.00
Sweepers 4 1500.00 6,000.00
Total Direct Labour cost per month 8,17,000.00
Additional Benefits @ 15% 1,22,550.00
Total Direct Labour cost per month including Benefits 9,36,550.00
Total Direct Labour cost per Annum including Benefits 1,12,69,200.00
Total Direct Labour cost per Annum including Benefits = 112.692lakhs

FACTORY SUPERVISION
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26th FEB. 2010
Category of Staffs No. of staffs Salary Total in Rs.

per staff
Production Manager 1 25,000.00 25,000.00
Cutting Master 1 12,000.00 12,000.00
Q.C.Incharge 1 8,500.00 8,500.00
Washing Incharge 1 7,500.00 7,500.00
Supervisor 9 7,000.00 63,000.00
Factory Supervision cost per month
1,16,000.00
Additional Benefits @15% 17,400.00
Total cost of Factory Supervision per month 1,33,400.00
Total cost of Factory Supervision per Annum 16,00,800.00
Total cost of Factory Supervision per Annum = 16.008 lakhs
OFFICE /ADMINISTRATION
Category of Staffs No. of Salary Total in Rs.

staffs per staff
Accounts/Admn Manager 1 18,000.00 18,000.00
Assistants 2 20,000.00 40,000.00
Export/Import Manager 1 28,000.00 28,000.00
Office Assistants 2 8,000.00 16,000.00
Fabric Merchandisers 2 25,000.00 50,000.00
Garment Merchandisers 2 17,000.00 34,000.00
Total Salaries per month 2,42,000.00
Additional Benefits @ 15% 36,300.00
Total Salaries per month including Benefits 2,78,300.00
Total Salaries per Annum including Benefits 33,39,600
Total Salaries per Annum including Benefits = 33.396lakhs
Machinery
Estimation of Machinery Required and Cost Estimate
Details of Machine Quantity Cost per Total Cost
M/c in US$ In US$
Single Needle Lock Stitching m/c 102 Nos 460.00 46920.00
[Juki DDL-5530N]
Double Needle Lock Stitching m/c 56 Nos 1850.00 103600.00
[Juki LH-3168SF]
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26th FEB. 2010
Feed of Arm Machine 7 Nos 1950.00 13650.00

[Juki MS-1190MF]
Overlock Machine 1 No 900.00 900.00
[Juki Mo-3316E DE4-40H]
Button Holing Machine 4 Nos 2700.00 10800.00
[Juki LBH-781U]
Button Sewing Machine 4 Nos 3850.00 15400.00
[Juki LK-1903SS/304/MC-590-3K]
Fusing Machine 1 No 3510.00 3510.00
[Hashima HP-400CS]
Pneumatic Pocket Creasing m/c 2 Nos 4320.00 8640.00
Collar Turning Machine [TSSM TS-414] 2 Nos 900.00 1800.00
Cuff Turning Machine [TSSM TS-424] 3 Nos 900.00 2700.00
Edge Cutter [Eastman EC-3] 2 Nos 450.00 900.00
Straight Knife Cutter 3 Nos 1125.00 3375.00
[Eastman 629 X 8”BS-11]
Banned Knife Cutter [Wastema] 1 No 12000.00 12000.00
Cloth Drill [Eastman CD-3-6”] 1 No 800.00 800.00
Total value in us dollars 224995.00
Total Value in Indian Rupees @ Rs.47 per dollar 10574765.00
Details of Machine Quantity cost per m/c in Total in Rs
Rs.
Testing Equipments 1 set 500000.00
Ironing Table Set-ups [Ramsons] 10 sets 25900.00 259000.00
Fabric CAD with Scanner/printer 1 set 75000.00 75000.00
Clothing CAD with Plotter 1 set 475000.00 475000.00
Washing m/c (100kg ) with 2 Hydro Extractors 1 set
(50kg) & 2 Driers (50kg) 1800000.00 1800000.00
Hand Scissors 20 Nos 300.00 6000.00
Total Cost for Machinery in Indian Rupees = 1,36,89,765.00 [136.897] lakhs]
11.4 Others (Furniture etc)
Trolleys for Material Handling 55000.00
Plastic Bins 42000.00
Cutting Table/Assorting Table/Checking Tables 48000.00
Other Furniture 50000.00
Total Cost for Furniture etc in Indian Rupees = 1,95,000.00 [1.95 lakhs]
4 POWER
Calculation of Power Requirements and Power Cost
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26th FEB. 2010
Description of the Machines Quantity Power Total power

Consumption consumption
per machine in watts
Single Needle Lock Stitching 102 Nos 1/3 horse power 25840
m/c
[Juki DDL-5530N]
Double Needle Lock Stitching 56 Nos 1/3 horse power 14672
m/c
[Juki LH-3168SF]
Feed of Arm Machine 7 Nos 1/3 horse power 1733
[Juki MS-1190MF]
Overlock Machine 1 No 1/3 horse power 247
[Juki Mo-3316E DE4-40H]
Button Holing Machine 4 Nos 270 watts 1080
[Juki LBH-781U]
Button Sewing Machine 4 Nos 270 watts 1080
[Juki LK-1903SS/304/MC-590-
3K]
Fusing Machine 1 No 800 watts 800
[Hashima HP-400CS]
Pneumatic Pocket Creasing m/c 2 Nos 800 watts 1600
Collar Turning Machine 2 Nos 400 watts 1600
[TSSM TS-414]
Cuff Turning Machine 2 Nos 400 watts 800
[TSSM TS-424]
Edge Cutter [Eastman EC-3] 2 Nos 370 watts 740
Straight Kife Cutter 3 Nos 370 watts 1110
[Eastman 629 X 8”BS-11]
Banned Knife Cutter [Wastema] 1 No 1000 watts 1000
Cloth Drill [Eastman CD-3-6”] 1 No 270 watts 270
Pressing Eqipments including Vaccum etc 10000
Washing machine, Hydroextractor and Drier etc 12000
Others including Lighting etc 4500
Total Power Consumption in 79072
watts
power consumption ( 79.072X 8 X 300 units) = 189772.8 kilowatts
Annual Power Cost @ 100% Efficiency (189772.8 X Rs.5.5) = Rs. 10.437lakhs
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26th FEB. 2010
Annual Power Cost @ 60% Efficiency (113863.68 X Rs.5.5) = Rs. 6.26 lakhs
5 Raw materials
Installed production capacity = 4,00,000 pcs per annum @ 60% Efficiency

Fabric Required @ 60% efficiency = 4,00,000 X 2.30 mts
= 9, 20,000 mts
Fabric Cost @Rs. 54/- per mtr = 9, 20,000 X 54.00
= Rs. 5, 52, 00,000.00
Interlinings, Trims and
[email protected] per pc = 4, 00,000 X 10
= Rs. 40, 00,000.00
Packing [email protected] per pc = 4, 00,000 X 4
= Rs. 16, 00,000.00
Total Raw Materials Cost = 552+40+16
= 608 lakhs
Total Raw Materials Costs per Annum = 608 lakhs@ 60% Efficiency
Debtors
- Direct Labours = 112.692 lakhs
- Factory Supervision = 16.008 lakhs
- Admn Salary = 33.396 lakhs
------------------
Total Debtors = 162.096 lakhs
Expenses
- Consumables = 2.07 lakhs
- Power = 6.26 lakhs
- Repairs & Maintce = 5.05 lakhs
- Admn Overheads = 1.00 lakh
- Selling Overheads = 2.00 lakhs
------------------
Total expenses = 16.38 lakhs
Total Working Capital per Annum = 608+ 162.096+ 16.38
= 786.476
Marginal Working Capital for Two Months = 786.476 / 6
= 131.08 lakhs
Working Capital Margin for Two Months = 131.08 lakhs
7 TOTAL COST OF THE PROJECT
Particulars Rs. in lakhs
LAND 90.00
BUILDING 231.50
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26th FEB. 2010
MACHINERY 136.897
FURNITURES ETC 1.95
ELECTRICALS/GENERATOR 4.00
TRANSPORTS/ERECTION 4.00
PRE-OPERATIVE EXPENSES 2.03
WORKING CAPITAL (2 MONTHS) 131.08
OTHER MISCELLANEOUS ASSETS 5.60
TOTAL 607.057
TOTAL COST OF THE PROJECT = 607.057 LAKHS

FINANCIAL ARRANGEMENTS
PARTNERS CAPITAL = 157.057 LAKHS
BANK LOAN = 450.00 LAKHS

----------------------
T OTAL = 607.057 LAKHS
Calculation of Interest on Bank Loan

( Rs. in lakhs)
Year Opening Mid year Closing Interest @ 12% per Annum

Balance Balance Balance Upto mid year Mid year Total
to Year end
1 450.00 450.00 450.00 27.00 27.00 54.00
2 450.00 420.00 390.00 25.20 23.40 48.60
3 390.00 360.00 330.00 21.60 19.80 41.40
4 330.00 300.00 270.00 18.00 16.20 34.20
5 270.00 240.00 210.00 14.40 12.60 27.00
Note : It has been considered that the loan amount of 375 lakhs is to be repaid
from the second year in 15 equal installments of Rs. 30 lakhs by every six months.
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2. Estimation of Depreciation
( Rs. in lakhs)
Particulars Machinery Building Others Total
Cost of the Items 136.897 231.50 15.55 Annual
Transport/Erection 0.80 ---- 0.20 Depreciation
Based on the
Contingencies ---- 1.00 ---- Straight Line
Total 137.697 231.50 15.75 Method
% Depreciation 25% 7.5% 10%
Year-1 34.42 17.362 1.575 53.357
Total-dep of year-1 103.277 214.138 13.975
Year-2 25.819 16.06 1.397 43.276
Total-dep of year-2 77.458 198.078 12.578
Year-3 19.364 14.855 1.2578 35.477
Total-dep of year-3 58.094 183.223 11.320
Year-4 14.523 13.741 1.132 29.396
Total-dep of year-4 43.571 169.482 10.188
Year-5 10.892 12.711 1.018 24.621
Note : Calculation based on Straight line method
Cost Quotation to Customer

Amt in Rs.
Fabric 2.30 mts x Rs.62 per mtr = 142.60
Interlinings, Trims and Accessories = 15.00
Packing Materials = 5.00
Cut Make Trim & Overheads = 32.00
Washing = 3.00
Cost and Freight = 15.00
------------
Total = 212.60
Add profit 15% = 31.89

------------
Total = 244.49
------------
Cost per garment = Rs. 244.50
Note : In this we have considered a good Quality, cone dyed power loom fabric
of 2/40‟s warp and 20‟s weft with 60 ends per inch and 56 picks per inch.
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Calculation of Break Even Level

(Rs. In lakh)
No Year 1 2 3 4 5
Variable Costs
(a) Raw Materials 608.00 674.00 740.00 777.00 777.00
(b) Consumables 2.07 2.42 2.76 2.94 2.94

8.30
(c) Power 6.26 6.84 7.81 8.30
(d) Selling Overheads 2.00 2.10 2.20 2.32 2.43

752.77
(e) Total Variable Costs[Add (a) to (d)] 618.33 685.36 790.56 790.56
1283.625
(f) Total Sales 978 1100.25 1222.50 1283.625
(g) Total Contribution[(f)-(e)] 359.67 414.89 469.73 493.065 493.065

Fixed Costs
(h) Direct Labour 92.692 102.54 110.74 119.60 129.17
(i) Factory Supervision 13.82 14.93 16.12 17.41 18.80
(j) Admn Salary 8.06 8.70 9.40 10.15 10.96
(k) Admn Overheads 1.00 1.05 1.10 1.16 1.22
(l) Repairs and Maintanance 4.15 4.36 4.58 4.80 4.80
(m) Depreciation 49.75 40.51 33.36 27.76 23.37
(n) Interest on Bank Loan 45.00 43.50 37.50 31.50 25.50
(o) Total Fixed Costs 216.72 215.59 212.80 212.38 213.82
Break Even Points(BEP) in Units
(p) Utilized Capacity in lakh Units 3.00 3.50 4.00 4.25 4.25
BEP in no of lakhs of Units 2.07
(q) [(Divide (o) by (g) and multiply by (p)] 2.10 2.09 2.06 2.05
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Request For Proposal

A request for proposal (referred to as RFP) is an invitation for suppliers, often through
a bidding process, to submit a proposal on a specific commodity or service. A bidding
process is one of the best methods for leveraging a company's negotiating ability and
purchasing power with suppliers. The RFP process brings structure to the procurement
decision and allows the risks and benefits to be identified clearly upfront.
The RFP purchase process is lengthier than others, so it is used only where its many
advantages outweigh any disadvantages and delays caused. The added benefit of input
from a broad spectrum of functional experts ensures that the solution chosen will suit the
company's requirements.
The RFP may dictate to varying degrees the exact structure and format of the supplier's
response. The creativity and innovation that suppliers choose to build into their proposals
may be used to judge supplier proposals against each other, at the risk of failing to
capture consistent information between bidders and thus hampering the decision making
process. Effective RFPs typically reflect the strategy and short/long-term business
objectives, providing detailed insight upon which suppliers will be able to offer a
matching perspective.
We are including two types of requests:
a request for quotation,
a request for information, and
a request for qualification.
Benefits of requests of proposal:
This will Inform the suppliers that the company is looking to procure and
encourages them to make their best effort.
The company has to specify what it proposes to purchase. If the requirements
analysis has been prepared properly, it can be incorporated quite easily into the
Request document.
The suppliers has to be alerted that the selection process is competitive, so only
the best will be chosen.
It will allow for wide distribution and response.
It ensures that suppliers respond factually to the identified requirements.
By following a structured evaluation and selection procedure an organisation can

demonstrate impartiality - a crucial factor in public sector procurement.
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26th FEB. 2010
Specifications
1. It is basically a request for price.
2. Basic corporate information and history.
3. Financial information (can the company deliver without risk of bankruptcy).
4. Technical capability (used on major procurements of services, where the item has not
previously been made or where the requirement could be met by varying technical
means).
5. Product information such as stock availability and estimated completion period.
6. Customer references that can be checked to determine a company's suitability.
Stages of Business Development
Business plan preparation
Start-up and growth
Established company
Interest of market
Financing decisions
Further Developments
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26th FEB. 2010
RESULTS AND DISCUSSIONS
1. Export Contribution
European union according to the market research is the largest importer of apparels goods
for india accounting for the 43.5 % of the total export taking place.
2. Export Growth
it is observed that the apparel export growth in India has increased gradually year wise
with minimum deviation till 2000 and drops there after.This may be due to the
fluctuations in the exchange rates and diversion of orders to the other
countries.recently the export had been badly hurt due to the economic recession in the
developed countries who are the major coustomer of the peoducts of india despite that
there is a large scope for export growth in coming years especially after the economic
recession subsides there is a expected boom in the export trade in India.
4 Export Development in India
Out of the survey made it is found that the following steps can be adopted to develop
the Indian exports:
High quality
Cost optimisation
Prompt delivery within the stipulated time
Better utilization of available resources
New technology
Proper mind set to pay satisfactory wage rates
5 Improved Plant Layout
A modified total plant layout has been suggested to reduce the material handling which
in turn will increase the garment production rate.
6 Modified Sewing Layout
A modified sewing layout has been proposed to reduce the material handling which in
turn will reduce the strain on the workers and thereby the efficiency of the workers
can be improved. Efficient use of the available space has been done so that there is no
negative space around.
7 Cost Estimation
From the cost estimation made it is found that the total cost of the project is around
786.476 lakhs. This will include a fixed capital of 608 lakhs and the working capital of
131.08 lakhs
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26th FEB. 2010
8. Feasibility of the project
It is found that this project will be feasible due to the following reasons:
From the calculation of the break even level we find that there is a gradual
increase in the profit every year. And with increase in investement in raw
materials the profit is also increasing.
From the cash flow statements it is observed that there is an increase in the
net surplus, opening and closing cash balances every year.
From the calculation of interest on bank loan it is quite clear that with type of
profit the industry is going to make all the bank loans can be repaid very easily
within the stipulated period of time.
From the calculation of break even point statement it is observed that there is
an increase in the net profit every year.
Lincensing rules in India has gone very liberal so there wouldnot be any problem
in getting the export licence in India as government of India is very supportive
towards the export oriented business.
There is a certain demand in the market of the apparels as the world economy is
coming out of recession and it is very easy to start a new business in this
scenario.
The finances are very easily available as the banks are more than eager to give
loans to set up India as they had done a very bad business during recession
period .
Raw material is very easily available in south India as we have a large number of
textile mills in south India where the plant is proposed to be set up
The working condition , power condition , security condition and other basic
amenities are very easily available in the city like Bangalore which is supposed
to be good for the industry.
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FURTHER DEVELOPMENTS
Mass Customisation
As per the existing trends it has been predicted that in future there will requirements to
make single single garments with individual measurements. Till now for mass
production the average sizes from various consumers were taken and the garments were
made in bulk where the consumer has to fit into the available size rather than the
garment fits to the consumer. So, now the people have come to a level saying that the
garment should fit to their size.
So, the clothing industry will have to make the garments as per measurements of the
individuals. This process of making single garments with individual measurements is
called mass customization.
This mass customization is going to be done through E-Business.
The available fabrics and styles of garments etc will be put in the internet. And the fabric
and garment samples of the same will be kept in the places where the sale is to be done. The
consumers can select through internet as well by seeing fabric and garments etc in the
nearest agency of the proposed garment company.
The consumers can go to the nearest scan center which is recommented by the company
and get scanned and the scan center will send the scan points to the company through
mail and the company will pay some commission to the scan center. Then from the scan
points the body measurements will be arrived and will be input to CAD. CAD will auto
generate the pattern as per the inputs.
The fabric will be cut through the CAD-CAM interface using single ply cutters. But the
tailoring is going to be done manually only since automation in tailoring is problematic as of
now. Then the final garment will be despatched through air.
Following Fig. 14.1 shows the different steps involved in mass customisation.
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2 Formation of weaving and processing mills
As said in the market survey India needs composite mills to get the best quality output.
For that it has been planned to start up the own weaving and processing mill of the
company so as to get the best quality garments. Here the yarn which is of better quality
has to be selected and purchased and then to be woven into cloth and processed in the
own mill which will make the fabric of the own company where better quality can be
maintained which will give better quality on the final garments using the company’s
efficient and effective all over control to compete with local, national and international
markets.
CONCLUSION
85
26th FEB. 2010
Following are the conclusions arrived at for setting up a new garment export company:
1) The apparel export growth in India is found to increase gradually. Recently it is

on the declining trend due to the fluctuations in the foreign exchange rates
and diversions of orders to the other countries.
2) China is found to perform better in garment exports trade with USA due to easy
access of all types of raw materials, cost competitiveness, good infrastructure,
trained productive manpower and excellent management etc.
3) Out of survey made the following parameters are to be adopted to improve the
garment exports in India.
High quality
Cost competitiveness
Prompt delivery
Better utilization
New technology
Proper mindset
4) Modified plant and sewing lay-outs are suggested for the improvement in the
garment production rate.
5) The total cost of the proposed project is around Rs.567.5 lakhs, including a
fixed capital of Rs.460.8 lakhs and a working capital of Rs.99.4 lakhs.
6) This project is found to be feasible in all respects.
So it is felt that by setting-up a new garment export company as said method and
manner suggested, business could be run successfully with more profit and can
earn foreign exchange which will develop the country and also leads to some
employment opportunities. If lot of technical people in India come forward and
take steps to open up the new companies it will reduce the unemployment in the
nation and can lead to a Developed India rather than the existing Developing India.
86

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SETTING UP OF A GARMENT INDUSTRY

SETTING UP OF A GARMENT INDUSTRY

NIFT BANGALORE/ A.P. (DFT)/2008-12

[Type your address]  [Type your

 SHARE OF EXPORTS OF VARIOUS CLASSIFIED SECTORS

 HIGHEST EXPORTS FROM TEXTILE SECTOR

 APPAREL EXPORT GROWTH IN INDIA

 TRENDS IN INVESTMENT AND PRODUCTION

 TRENDS IN EXPORTS: HOW DOES INDIA FARE?

 SUPPORTIVE GOVERNMENT POLICIES AND NEW TRENDS TOWARDS

 NEW TRENDS TOWARDS RE-EMERGENCE OF THE TEXTILE AND APPAREL

 FURTHER STEPS REQUIRED TO INCREASE INDIA‟S COMPETITIVENESS

 ANALYSIS ON OVERSEAS MARKET DEMAND OF JACKET INDUSTRY

NIFT BANGALORE/ A.P. (DFT)/2008-12

Request For Proposal

NIFT BANGALORE/ A.P. (DFT)/2008-12

NIFT BANGALORE/ A.P. (DFT)/2008-12

Stages of Business Development

Business idea generation

Business plan preparation

Start-up and growth

Objectives of the Project

NIFT BANGALORE/ A.P. (DFT)/2008-12

Scope of the Project

Benefits of the Project

Cash assistance is allowed on export of selected products to meet the international

NIFT BANGALORE/ A.P. (DFT)/2008-12

4 Special Assistances to Export Oriented Industries

Concessional Railway freight is allowed on the movement of a large number of export

8 Special Concessions to Small Scale Industries

Special facilities and concessions available to small scale industries in respect of

NIFT BANGALORE/ A.P. (DFT)/2008-12

9 Awards for Exporters

10 Insurance Against Risks

11 Raw Material Allocation

When a product is exported, it is entitled to

NIFT BANGALORE/ A.P. (DFT)/2008-12

NIFT BANGALORE/ A.P. (DFT)/2008-12

NIFT BANGALORE/ A.P. (DFT)/2008-12

Terms Used in Foreign Trades

1 Place and Mode of Delivery

2 Transport charges, Packing etc

3 Insurance against Risks involved in Transit

4 C.I.F [Cost, Insurance, Freight]

With respect to mode of payment following terms are used

NIFT BANGALORE/ A.P. (DFT)/2008-12

NIFT BANGALORE/ A.P. (DFT)/2008-12

C.O.D.[Cash on delivery] – Cash to be paid on delivery of the goods either

L/C. [Letter of credit] – It is a letter issued by the banker of overseas importer

NIFT BANGALORE/ A.P. (DFT)/2008-12

Competitiveness of Indian Apparel Export Firms

„commoditised‟, as a result of irrevocable and irreversible changes in the supply chain.

NIFT BANGALORE/ A.P. (DFT)/2008-12

INITIATIVES TAKEN BY THE GOVERNMENT TO MAKE THE INDUSTRY

the entire value chain of the industry

NIFT BANGALORE/ A.P. (DFT)/2008-12

Table. 2.1 Largest Markets

European Union 43.80%

United States 24.60%