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MCP 1604

Reg. No: 213348645

Contents

Introduction

1. Answer to Question 1

2. Answer to Question 2

3. Answer to Question 3

4. Bibliography

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5. Marking Scheme and Comments

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Introduction
Sri Lanka is a country whose economy relies heavily on the apparel markets export sector. With
the Sri Lankan apparel exports topping USD 4.3 billion in 2013 (JAYASURIYA, 2014), an alltime record, its important to understand the apparel sectors contribution to the Sri Lankan
economy and how it achieves this. Studying its business strategies, particularly how it utilizes its
expertise of operations management, will be of special importance to identify its importance.
This collection of writings consists of answers to the Case-Analysis Assignment of the module
MCP1604 Operations Management of the CEMBA course. Specifically, this case analysis
revolves around the narrative of the success of Brandix as a dominant business entity in the Sri
Lankan apparel market sector.
This is a part of assignments for Cohort No. 10.

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MCP 1604

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Answer to Question 1

The case study in question deals with the business story of Brandix from the time of its inception
up to 2006. Being a giant in the apparel and textile industry of Sri Lanka, it is a key player in Sri
Lankas economy itself all the more reason why we should gain a finer and a deeper
appreciation of its evolution to the superbrand it is now.
The key trait that defined Brandix in the wake of the abolition of the Multi-Fibre Agreement
(MFA) around the year 2005 was its customer-base. Brandix implemented a strategy that
complemented strengthening the relationships with its existing customers. Hence, they also
focused their production on newer technologies enabling the production of intimate-wear, lingerie
and under-wear for which their main customers demands required. This focus on a niche marketarea as which Brandix adopted was a smart move. To understand this, we have to look at the postMFA era where the abolition of the quota scheme meant an unrestrained flow of apparel. It also
meant that high-end brands like Victorias Secret, GAP and Marks & Spencer had to choose their
outsourcing partners wisely. So the quality driven and innovative focus of Brandix proved to be a
much sought after combination which these brands desired.
Brandix has also been honored with numerous accolades and awards for its contribution to the Sri
Lankan economy and its achievements that have set standards in the local apparel sector. Of these
the prominent were Highest Net Foreign-Exchange Earner in 2005, Outstanding Exporter of the
Year award in the Apparel Category in 2005 and the Most Outstanding Exporter of the Year
award at the National Awards for Export Excellence in 2003. It has been recognized for its
continuous pursuit of quality with such awards as the Nagasaki Yamamoto Kaizen Award and the
Taiki Akimoto 5S Awards in 2004. There continuous implementation of ISO, SA8000 and
WRAP certification programs at their various facilities are proof of their commitment to
upholding and refining their responsible business practices. Not stopping at just in implementing
quality and productivity improving practices, Brandix has also been actively engaged in giving
back to the community with responsible social practices. For that, they have been honored with
the Presidents Environmental Excellence Award in 2005 and was recognized by CIMA as a
community leader, to name a few.
The history of Brandix actually spans back to 1972 with Lux Shirts Limited entering the then
unexplored industry of apparel-manufacturing. From then on, they continued with numerous
acquisitions, some key mergers and joint-ventures with other companies and new investments in
cutting-edge production facilities to expand its repertoire of technical skills, know-how and
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facilities for production. Of particular importance and veritable milestones for Brandix in this
journey were the investment in Textured Jersey Lanka, the establishment of the Brandix Centre of
Inspiration and the signing of a Memorandum of Understanding (MoU) with the Government of
India for the Brandix Apparel City. At the same time, it is interesting to note that it was only after
2002 that the name Brandix emerged for this group of companies in an attempt re-brand itself in
the modern yet constantly changing market environment.
Even though Brandix has a somewhat niche clientele, it has a diversified product portfolio. Its
core product is apparel and its product portfolio includes Brandix Casualwear, Brandix Intimate
Apparel, Brandix Activewear and Comfortwear. Its many subsidiaries add value to these main
core product portfolios by manufacturing varied types of textiles, accessories, finishing and
trimmings. Of particular significance is the fact that Brandix paves the way for over 50% of value
addition to its products to happen locally via operations in textiles, thread, buttons and hangers.
After the abolishment of the MFA, that is, after 2005, Brandix has implemented an aggressive
growth strategy in terms of investments in cutting-edge technology, Research and Development
(R & D), manufacturing infrastructure and expanding its operations both locally and overseas.
The Brandix Centre of Inspiration (BCI) exemplifies its dedication to the pursuit of the latest
technology, research and development, facilitating innovation through design and in the
integration of manufacturing processes and design (in a geographical sense) using the concept of
design-to-delivery. Furthermore, it should be noted that the group uninhibitedly promoted growth
by setting a precedent in building an apparel-manufacturing park in India, a one-of-a-kind venture
for any Sri Lanka business.
Promotional wise, it is well to note that Brandix never used any unwarranted marketing activities
to promote its brands. Instead, it relied on its reputation preceding anything else. Its dedication to
its core values of continuously building ever stronger customer and vendor relationships and its
commitment to socially responsible practices have made overt promotional activities a nonrequisite for Brandix its customers and suppliers inherently know the groups values through its
effective, efficient and productive business activities which are at the same time ethical, socially
responsible and transparent.
Brandix holds its values in committed outlook. The group is known for its values of being
dynamic, optimistic, pro-active, striving for excellence and maintaining transparency in all its
business processes. The slated launch of its Green Plan is a testament to its commitment to
protecting the environment and its belief in sustainable consumption and production.
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Answer to Question 2

The success of Brandix as a leader in the apparel industry sector can be attributed to many key
factors. In the following paragraphs, we will analyze how these key factors affected this groups
path to success.
When Brandix first started, then only known as Lux Shirts Limited, their initial key factor in
success was the many acquisitions of companies it carried out and also the many merges and
joint-ventures with its partners. This growth strategy, which continued for well over 3 decades
was instrumental in acquiring new knowledge and personnel from diversified talent pool. It also
helped them widen their product portfolio to establish themselves as a one-stop or go-to-all
business entity in the apparel sector.
Moreover, when the export sector was widening its horizons to the Sri Lankan apparel sector in
the 1990s, Brandix accelerated the implementation of their growth strategy by directly investing
in new infrastructure and pro-active production planning. This was seen in the setting up of Lux
Shirts Kahawatte in 1992, the Kuruwita Textile Plant in 1993 and the setting up of Eden Fashions
in Maldives. This was a key for expanding its production capacity in expectation of the new
market that was rapidly getting bigger in North America and Europe. The Operational
Management practices of proper and timely design of products, processes and facilities are
veritably illustrated in this example.
We can also see the practice of excellent market forecasting in Brandix pre-empting the emerging
trends in the market, particularly the demand for intimate wear, lingerie and underwear. In the
apparel industry, which has such a varied portfolio worldwide, focusing ones product portfolio
on a niche area as this is somewhat risqu, so to speak. However, Brandix was able to properly
forecast their demand to grow and implement their growth strategies so that they would be able to
cope with the growing demand from their existing customer base for these products. In other
words, Brandix had a vantage point in the apparel market by being highly pro-active.
After the turn of the new millennium, Brandix started being recognized for its achievements in
productivity. This was because of another key factor in their success, which was their
commitment for excellence. They achieved this through continuously productivity practices by
implementing such programmes as ISO, SA8000 and WRAP certification programmes in their
many production facilities. Furthermore, they benchmarked the worlds top businesses in the
apparel sector and continuously strived to achieve or even surpass that benchmark.
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It is indeed worthy to mention that Brandix was never hesitant in investing in Research and
Development and academic studies. The Brandix Centre of Inspiration (BCI) exemplifies this
worthy trait of Brandix. In fact, investment in Research and Development and fostering academic
studies is a key factor to gain the competitive edge in their respective market for any company
engaged in the production of goods or even in the service sector. We can see that Brandix has
yielded the results of such an investment and will continue to do so.
We saw earlier that Brandix opted to go for a niche portfolio in its products and also in its
customer base. Similarly, its visionary nature can be seen in its investments in exclusive
production facilities. For example, the establishment of Stevensons Lanka with joint venture
partners Quantum Clothing and Lanka Equities in 2006 was indeed a visionary endeavor for it
gave them a competitive advantage in the Sri Lankan apparel sector by having the only exclusive
dyeing plant in the country which was equipped with advanced art machines for dyeing cotton
garments as well as other softer garments. Even the establishment of the Brandix Apparel City in
India gave Brandix a competitive advantage in being able to recruit the low cost labor of India for
their productions.
One key factor in the success that Brandix has seen over the years is their commitment to building
stronger customer and vendor relationships. In todays diversified market environment, it is all
too easy change the customer base for a business which is in fact what most other businesses do;
i.e., the majority of todays businesses are product centric rather than being customer-centric.
However, Brandix went the other way in striving to maintain the existing customer base while at
the same time solidifying those relationships. This has reaped a lot of benefits to Brandix in that
the manufacture for the bulk of the specific products in the intimate-wear and lingerie brands that
Brandix has as customers is still awarded to them. This is another reason why Brandix does not
need to spend too much time or resources on marketing or promotional activities.
Brandix also has a focus on sustainable production and consumption. For example, their Green
Plan initiative which was launched in 2008 seeks to achieve such things as carbon neutralisation,
waste and energy management, alternative energy options, cleaner technology initiatives, and
better health and safety practices. A special characteristic of sustainable processes are that they
are naturally cost-effective as re-using and re-cycling are key components of sustainable
production and consumption. What this all means is that in the long run, not only does Brandix
save the environment, but it also reduces the cost of its production processes while at the same
time maximizing their efficiency by reducing wastage and streamlining them.
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Apart from striving to achieve the sustainability of the environment, Brandix has also managed to
empower its employees preserving the integrity of its employees and the confidentiality of its
customers. This has led to build an inherent trust in Brandix with all its stakeholders. In essence,
what this means is that its employees will work with honesty and also make its production
processes more efficient and productive.
Technically, another reason why Brandix is ahead of its competitors is their investment in cuttingedge technology. For example, during the period of 2005-2006, Brandix developed a fully
automated denim plant. With shrewd capital investment in technology they have reaped massive
benefits in productivity and cost savings. In other words, they have implemented an effective
solution in a timely manner by utilizing the most modern technology for production processes.
Moreover, they had an inspirational vision: to be the inspired solution to branded clothing. And
Brandix has lived up to that name by being extremely innovative, technologically savvy and at the
same time they have achieved this by being ethical and socially responsible.

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MCP 1604

3.

Reg. No: 213348645

Answer to Question 3

The success story of Brandix is filled with lessons for an aspiring manager to learn.
The first thing that we can learn is that the only way for a business to grow is not only through
increasing of the product portfolio. Business growth can also be achieved by having a narrow
product portfolio but at the same time striving to be the best within that narrow portfolio. If we
can adopt a strong focus on the products that we manufacture and implement continuous
improvement processes such as process analysis, Taguchi Methods and other Statistical Process
Control activities for quality control, we can build our business as a strong competitor in the
market and earn a reputation as being a solid competitor in the products/services field that we
specialize on. In essence, striving to achieve excellence in manufacturing is indeed a laudable
effort that can be practiced by any manager involved with manufacturing, and one which can
payback very favorably.
Brandix anticipated emerging trends in advance. This is a good management skill that has to be
learnt from practice as well as theory. In fact, the proper application of forecasting methods, a
keen appreciation of the market state and its current trends and knowledge in the state and
heading of the local and world economies can empower a manager with the ability to do just this.
Sometimes, when the market environment is favorable for a certain operation, it is well to do with
setting up joint-ventures with your business partners. When a particular organization may not
have the necessary expertise or the infrastructure, it is in fact a wise option to set up joint ventures
as this. However, this depends on the situation and many business environmental factors.
For a business engaged in manufacturing it is imperative that they invest in research and
development (R & D). Sadly, this is something we see very much lacking in local production
businesses. However, the majority of foreign manufacturers have their own R & D facilities and
continuously invest in them. This gives such benefits as in-house suggestions for process
improvements, in-house remedies for common manufacturing pitfalls and innovative solutions to
all processes of manufacturing. Brandix has identified this and implemented this properly. It is
something that local managers should learn and implement promptly.
Stakeholder management is another point that Brandix has developed to almost an art in itself.
We should also understand that the key stakeholders in our business, such as our customers and
suppliers should be closely managed and their expectations need to be satisfied during all the
phases and all the processes of the business activities. In this way, we can get away with spending
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very less on marketing and promote our business by way of our clients from our normal business
transactions themselves.
Today we have such a dynamic market that technology is everywhere we go. In fact, just like
Brandix, we have to embrace the newer manufacturing technologies such as factory automation,
Computer-Aided Manufacturing and Design, Numerically Controlled-Machines, robots, SCADA
(Supervisory Control And Data Acquisition) Systems and Telemetry. If we fail to utilize these
and other emerging technologies in a timely manner our competitors will gain the competitive
edge and gain a momentum in the market that will be very hard to surpass. So we should, as a
manager engaged in manufacturing, be always on the lookout for new and emerging trends in
technology.

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Bibliography

JAYASURIYA, D. (2014) Apparel exports top US$ 4.3 bn in 2013. Daily News. [Online] 31st
January. Available from: http:// http://www.dailynews.lk/?q=business/apparel-exports-top-us-43bn-2013 [Accessed: 27th May 2014]

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Marking Scheme and Comments

Learning Outcome/
Question

Maximum
Weightage

Question 1

Question 2

Question 3

Total Marks

100%

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First Marker

Second Marker

MCP 1604

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