The Thailand Textile Institute has supported educational sectors (King Mongkut's University of Technology Thonburi , Chulalongkorn University , Mahidol University and Kasetsart University ) in studying and analyzing of management system for five supply chains which were different in size, production process and products. Each chain had different problems, weakness and strength. This paper aims at presenting management of textile industry supply chain and directions to improve Thai textile industry supply chains.

Condition of Supply Chain Management

From the study of supply chain management, supply chains can be divided into two groups which are supply chain in large scale industry and supply chain in small and medium scale industry.

Large Scale Industry Supply chain

Large scale industry having great budget have branch factories operating from primary to tertiary. These industries have high ability to depend on themselves and have big amount of capital. Therefore, they can afford readymade programs in management which are receiving orders, taking purchase order, planning production, managing stores. However, this management system still lacks connections. It is only functional management which has no connection inside organization and between organizations. Therefore, problems of supply chain management in large scale industry are the lack of connection and incomplete key performance indicators of processing management.

1. Key Performance Indicators (KPI)

They only measure functional management which does not reflect processing supply chain management such as the duration from the beginning until getting materials called “source cycle time”. In clothing factory, source cycle time consists of the time to choose suppliers, the time to take purchase order and the time to get materials. It cannot be only the time purchasers taking orders.

2. Purchase is still in the form of procurement management.

Purchase form mainly selects many suppliers in order to get the lowest price which is an obstacle to managing supply chains. Supply chain management should build connections with suppliers under the win-win concept. The number of suppliers should be reduced but the arrival is faster and there are good connections of information in order to make management hove quick response. Directions to connecting with suppliers depend on types of materials but now, there is no systematic supplier management, so there is material problem which is the delay of material arrival.

3. Lacking cooperate planning and connecting information

In spite of the fact that large scale industry has better information technology than small and medium scale industry, its information for supply chain management is not connected, for instance, production plan, store supply and order specification such as color. For example, specified color from sewing factory will make dyeing factory work faster because they can test dyeing before fabrics arrive which will decrease repeated dyeing. Other problems are customer order status; purchase order status as well as lacking cooperates planning in order based management. Order based management will let each

factory know the duration of production and set up the schedule reported to tertiary industry when production does not work as planned so that they can adjust production plan to suit current situations.

Supply Chain in Small and Medium Scale

Industry

Supply chain management in small and medium industry has additional problems as follows.

1. Lacking information technology for planning production and controlling store

Most small and medium factories do not have computing system for using in production plan and store control. They use human resources in memorizing and making signs showing store status. Therefore, this information is difficult to use in evaluating store purchase order or the ability of store management because it is in different forms of paper document which cannot tell exactly how much each material is in demand and production plan functions day by day. They produce as the order having ready materials.

Furthermore, materials will be prepared when the due time is close, so most process start one month before the due time.

2. Lacking Real Bottleneck of System Analysis

Some small factories do not have standard time data, so they do not know the real bottleneck. Some factories suppose that the bottleneck is sewing process and managers improve the process by buying more sewing machines and hiring more sewers while the real bottleneck is pattern making process. Therefore, sewing improvement cannot improve the process effectiveness.

Directions to Improving Supply Chain Effectiveness

Current competitions are not between companies but they are between supply chains. Increasing ability of supply chain must begin with inside strength. The figure1 shows activities in logistics and supply chain management. According to the figure, production prediction, purchase, material demand planning, production planning and delivery are the activities each company must improve in order to be ready for cooperation between companies which is supply chain management. Therefore, supply chain management is cooperate planning such as production development, customer management as well as giving information about purchase order status, material order status, production plan, store supply quantity, marketing plan and cooperate business rules to all members.

After reviewing the result of supply chain management observation, large scale industry has almost rounded management, just lacking connection between companies or supply chain management. In order to make it complete, the following activities are needed: supplier relationship management, customer demand collection for analyzing customer groups and planning production development with suppliers, customer relationship management and information technology management connecting customers, entrepreneurs and suppliers.

For small and medium scale companies, important activities such as demand prediction, production planning, store supply management, store management still need improving which requires cooperation from governmental and private organizations to give knowledge. Additionally, they should promote inexpensive readymade programs for small and medium scale companies to use such as Enterprise

Resource Planning (ERP), Computer Aided Design helping pattern making and Case Based Reasoning program to collect information for finding standard time when new orders arrive.

Fig.1 Activities in logistics and supply chain management
Source: Ballou 2004

Additionally, supply chain development needs to consider the groups of products presented to customers and the factors creating ability to be order winners. For example, if products are normal and do not have many varieties, the key to win is low price, so the supply chain management will use lean strategy. On the other hand, if they are fashion products, agile strategy should be use instead as showing in table1.

Table1: Differences between lean and agile products
Source: Mason-Jones et al. (2000) Source: Mason-Jones et al. (2000)

Therefore, planning strategy making supply chain able to win must begin with analyzing customer's decisions and the key performance indicators or ability affecting making decision. These indicators will be translated into strategy which must be the only one in the whole supply chain to make the management go in the same direction. Lean strategy is suitable for production process of which products have few varieties, long life and market prediction can be done and is accurate, so materials purchase reservation is clear. Quick response strategy or agile strategy is suitable for products having many varieties or fashion products, having short life and the prediction is difficult, so most purchase will reserve more production force than materials. However, lean strategy and quick response strategy can be applied as hybrid strategies. Lean strategy will be used from tertiary until decoupling point, then quick response strategy will be used under the collaboration between companies in which there are information sharing, confidence in each other, cooperate planning, profits and risks sharing and the same business goal.

Conclusion

Currently, competition is getting intense. Cooperate supply chain management will help the business to get through. However, cluster cooperation is another tool able to make Thai textile industry have advantages, especially for small and medium scale companies. They must cooperate in sale and purchase, in both supply chain and cluster because they do not have much power in negotiating and have limited production ability.