Thanh Cong achieves 14% efficiency increase and savings with GSDCost

About the Customer

Located in Ho Chi Minh, Vietnam,  leading sportswear and knitwear manufacturer,  Thanh Cong Textile Garment Investment Trading JSC, is a world-renowned  textile manufacturer offering a fully integrated vertical production system of spinning, weaving, knitting and dyeing garment production.

Since its inception in 1979, the company has achieved steady growth, and now boasts an annual turnover of over $130,000,000. Customers include: CSW, Adidas, New Balance, Eddie Bauer, SanMar, Kohl’s and JCP, and it is listed as one of Vietnam’s Top 500 largest enterprises. Thanh Cong has additionally won a variety of awards, such as: Eddie Bauer’s Product Quality and On-Time Delivery Award; JC Penney’s Operational Excellence Award and a Gold Brand Certificate Award from Ho Chi Minh City.

The Challenge

Manually created cost forecasts based on historical data- were inaccurate and lacked full team visibility, which meant gaps in communication between sales, planning and production teams, resulting in reduced efficiencies, unnecessary levels of waste and lost orders.

Prior to implementing Coats Digital’s SaaS-based cost optimisation solution, GSDCost, Thanh Cong, based its cost and capacity forecasts on inaccurate historical data stored on a variety of Excel spreadsheets which were notoriously difficult to update in real time across all costing, capacity planning and manufacturing teams.

As a result of inaccurate standard minute values (SMVs) regarding CM (Cost to Make) production times, and poor costing and planning visibility, Thanh Cong suffered low efficiency rates, high defect rates and late deliveries, which often resulted in additional air shipment costs and an unnecessary amount of material and people-hour wastage.

With rising CM costs in both labour and raw materials and a high variation in production quality, due to time studies based purely on historical experiences, Thanh Cong needed a standardised solution that would accurately record SMVs through effective, standard motion digitised codes so it could optimise its costing processes, significantly enhance global manufacturing efficiencies and ultimately ensure it remained profitable in a highly volatile industry environment.

The Solution

Following the implementation of GSDCost, Thanh Cong was able to establish international standard time benchmarks based on standard motion codes and predetermined times. This enabled the sales, costing, planning and manufacturing teams to communicate efficiently using the same language, based on a scientific method for correctly analysing manufacturing costs.

As a result, business units could confidently and fairly negotiate product prices with customers, and a more succinct single view of overall CM costs enabled Thanh Cong to realise a production efficiency increase of 13.82%.

In a nutshell, because capacity planning and material requirements were based on real forecasts, Thanh Cong not only benefited from reduced material wastage and overtime staff costs, but also avoided having to pay extra high shipping and air-freight charges, as orders were significantly less likely to be delayed.

Thanh Cong reports that an initial analysis of 22,000 pieces resulted in an equivalent saving of $12,000 as a result of higher efficiency cost planning, and the absence of emergency costs, previously required to deliver orders on time.

An open and transparent production capacity platform has also enabled Thanh Cong management to set achievable productivity goals based on a fair standard of working hours.

The introduction of achievable performance incentives has consequently greatly improved staff morale and motivation, as goal setting targets are now based on realisable targets.

Coats Digital’s GSDCost method analysis and pre-determined times solution is widely acknowledged as the de-facto international standard across the sewn products industry. The solution supports a more collaborative, transparent and sustainable supply chain, in which brands and manufacturers establish and optimise ‘International Standard Time Benchmarks’ using standard motion codes and predetermined times.

This use of a common language and standards supports accurate cost prediction, fact-based negotiation, and a more efficient garment manufacturing process, while concurrently delivering on CSR commitments. Coats Digital’s enhanced feature of a globalised Fair Wage Tool combines the international standard time for any given style, with detailed factory efficiencies, contracted hours and the fair living wage for the country (data provided by the Fair Wage Network). This added tool enables brands and manufacturers to quickly agree the fair living wage allowance for any given garment, in any factory in the world.

GSDCost utilises the latest cloud software architecture to provide a highly intuitive, secure and scalable SaaS solution, which helps achieve cost optimisation and sustainable improvements in productivity.