JINJIAN GARMENT FACTORY Case Study Solution
Solutions to Dilemma
The dilemma that the company is facing i.e. the seasonal production orders by the clients and the retention of skilled labor in the factory. The peak season for garment industry starts from the month of September and end in the month of February. In the peak season the workers tend to work for an average of 12 hours per day and 28 days a month whereas in the slow season the workers tend to work 4 to 5 hours a day. Moreover, the requirement of skilled workers are vital in the peak season because of production efficiency required by the factories in order to deliver the quality goods timely to the customers. Due to the nature of labor intensive industry, the labors are available in huge amount for the factories but the skilled labors are scarce and limited. Some factories used to shut themselves down in order to protect themselves from losses in the slow season and reopen themselves in the peak season in order to gain profit. The other reason of retaining the skilled labor is that the garment provided by customer is expensive and the CMT cost of producing a product of that particular garment is less than the price of the garment. Therefore, if any mistake of the labor affects the garment, it will lead the company to bear the cost of garments as well which could lead the company to face losses due to the high price of garment in comparison to the CMT cost charged by the garment industry to their customers. Moreover, retention of skilled labor will also ensure that the quality product will be delivered to the customers on time because if the product does not get completed on time then the company has to pay air freight charges which is very expensive to deliver the product and could derail the profit of the garment factory.
The company should focus on the effective management of workers in order to produce and deliver the product on time. The company should further adopt the policy of retaining the skilled workers i.e. to retain them in slow season by offering them some fixed amount of wage. The strategy that the company could adopt is to train the unskilled labor in the slow season through skilled labor which then could serve the company in the peak season. This could lead the company to retain the skilled labor when the peak season arises. Moreover, the other strategy that the company should adopt to deliver the quality product on time is to impose a supply chain management system with in the factory which could help the company to determine how much time each production department is taking in the production of the final goods. This determination of time will enable the company to find which areas are weak and needs improvement. Hence, by implementing the strategies including effective management, training unskilled workers and adopting effective supply chain management system could help the company to cope up with the problems of seasonal production requirement and retaining skilled worker.
Policy to maintain Quality
The policy adopted by the Shenzhen garment industry is to deduct the allowance of the workers if any issue arise in regards to the quality of the garment produced by the factory. This measure is taken by the Shenzhen garment industry to control the errors occurred by the workers to make the garments in hurry. The reason that the workers used to manufacture the garments in less time is because the wage which is provided to the worker is based on the piecework system i.e. every worker will receive a wage according to the pieces of garments produced by an individual worker. Hence, this policy could lead to the efficient production of the garments i.e. garments can be produced in speed to meet and deliver the required demand by the clients but the quality issue arises because workers could undergo a mistake in manufacturing a garment in a hurry therefore a fine is imposed by the Shenzhen garment industry on the workers, if any deterioration is found in the quality of the garment. Although, with imposition of fine, when any quality issue arises, the workers used to deny the responsibility and try to prove the fault of others by hiding their mistakes. This behavior of worker to save themselves from paying fine could lead to waste of time which could be used in production efficiency. On the other hand, mismanagement by the company’s management department also sometimes waste the time of the worker due to their mismanagement and inefficient distribution of work. Overall, the policy of imposing fine by the Shenzhen garment industry on the workers is not affecting much to employee in order to increase the quality because the workers tend to refrain themselves from the errors occurred in the quality of the garments.
The punishment given by the company to their workers to maintain the quality of the garments produced by the company is to impose fine on workers which is not justified in my opinion because the imposition of fine on the workers leads the workers to deny taking the responsibility for their mistakes which could lead to the deduction of their wages. Hence, instead of imposing fine on worker due to quality issue the company should implement a policy of providing extra wage to the workers who maintain the quality of the garments. This policy will enable the worker to work carefully which will increase the quality of the garment as well as reduce the amount of mistakes being conducted by the workers. Moreover, if the fine will not be imposed on the worker than the workers will not be hesitated in taking the responsibility and will try to learn from mistakes instead of not taking responsibility and saving themselves from the imposition of fine. Hence, this policy will also create motivation among the workers to work carefully and efficiently which will increase their wages and reputation of the company locally and internationally as well. Hence, the company should adopt the policy of increasing the wages for quality work instead of imposing fine on the workers for their mistakes.
Recommendations
Mr. Lou has to change his company’s incentive system if he wants to retain the employees. It means to introduce an employee incentive system which could give a certain type of cash reward to the employees. This would mean to provide the company with cash incentives after every 20 pieces of clothing that they have produced. By doing this, the owner will create a sense of positivity amongst the workers and in return their production capacity will increase by a greater efficiency. The employees can get retained by using this policy and with this, the company’s productivity can increase as well. Hence, they will be solving two problems with this one solution. However, it doesn’t give assurance that the employees will work harder or better by applying the new incentive system. With this they need to make sure that the cash incentive is not costing the company too much otherwise it might incur losses.............
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