I & J Trading Company and SamdukTongsan’sPartnership and Strategy for Innovative Production in Outsourcing Topper Company Profile I & J Trading in partnership with SamdukTongsang CO., LTD specializes in OEM/ODM to satisfy all levels of costumer demands through a thorough observance of deadlines and outstanding quality control.
INDEX 1. KOREAN MANUFACTURING AND FINAL ASSEMBLY SITES BRIEF SUMMARY 2. FACTORY IN PUSAN 3. EXTERNAL FACTORIES 4. SPECIFICS AND THE DIRECTION OF PARTNERSHIPS 5. MANAGEMENT STRATEGIES FOR EACH SECTOR 6. EXPECTED EFFECTS
ORGANIZATION CHART FACTORY PRESIDENT Vice President Planning & Coordination Executives Marketing R&DInstitute Management Materials Production/Planning Q.C MANAGEMENT DEPT. Production Team Management Team Tailoring Team Sewing Team ManufactureTeam (Preparation) Technology Team (Press) Quality Team (Inspection, Quality) Management (Planning) Research Team(Analysis) Tailoring Team
MAIN PRODUCT We are manufacturing/supplying products under OEM/ODM manufacturing alliances with numerous firms such as NEW BALANCE, OTB FOOTWEAR, PRO-SPECS, ASICS, K2, Z-COIL, and CHUNG-SI. Not only high-functionality sports, lifestyle and casual footwear icorporating Gore-tex technology, but also military and industrial/utility footwear. We manufacture/supply high quality products with R&D Technology as our base. We strive to reduce overhead and supplementary costs and to meet production and delivery deadlines. OEM ODM K2 (Gore-Tex)
MAIN PRODUCT PROSPECS ASICS
MAIN PRODUCT : OTB BOOTS OTB ABYSS Boots were designed and engineered at the request of the U.S. Navy SEALS. A maritime boot for use in any rocky or muddy situation, the sole unit also works well in dry conditions. With its superior fit and drainage features this boot also works great with a pair of waders. • High abrasion TPU upper material resists scuffs for outlasting conventional leather • Upper material is treated with a DWR (durable water repellant) having minimal water absorption characteristics • Tactical Rubber Technology™ for superior silent traction on both wet and dry surfaces • Lugged and razor siped sole to help facilitate water dispersion • Perforated lugged jungle sole unit allow for instant water drainage • Recessed arch on the outsole helps identify center of gravity when climbing ladder rungs • Ballistic mesh placed between the outsole and upper prevents small stones and debris from entering the boot, yet still allows for water to drain freely • Rubber reinforced toe and heel help aid in climbing maneuvers • Mesh ports throughout the boot allows for water drainage and breathability resulting in quick dry comfort for increased foot health • Reticulated foam used for all upper padding will not absorb water under any circumstances • Mesh tongue pocket holds tied laces in place preventing snags on out-croppings • Sea/Air/Land - SEAL footbed™ aids in water drainage as well as breathability for unsurpassed foot health in a wide variety of conditions • The SEAL footbed has a patented removable shank that allows the user to customize the fit for any condition, wet or dry - eliminating the need for half sizes
PRODUCTION FLOW By establishing a collaboration of factories, an in house production system and a dramatic reduction of distribution terms are achieved Transportation to External Factory for A/S purposes only takes 1 day Order sheet placed 7 Samduk(External Factory) 9 A/S request 3 Shipment Delivery after fixation 6 10 1. Subsidiary Materials Stocked 2. Prototypes created (Dyed, processed) 3. Partly-manufactured Goods Stocked 4. Processing/Needlework/Completion 5. Quality Management/Sampling/ Packaging/ Sorting/Inspection/Sampling/transferring 5 8 Purchase domestic subsidiary materials Delivery 4 2 Depending on difficulty and time constraints, direct production/delivery Order Placed(Order sheet) 1 Buyer Samduk(Busan) ONE STOP TOTAL-
GORE-TEX We are the proud producer of Gore-tex. As a licensed factory we strive for excellence in all areas of footwear production. We will continue to improve Gore-tex with utmost attention to detail new application of emerging technology.
FACTORY INFRASTRUCTURE FROM RAW MATERIAL, CUTTING TO ASSEMBLY, In-House System
FACTORY INFRASTRUCTURE • ASSEMBLY & PREPARATION FOR ASSEMBLY • CUTTING
FACTORY INFRASTRUCTURE • SEWING
FACTORY INFRASTRUCTURE • PREPARATION FOR SEWING
FACTORY INFRASTRUCTURE • PRESS
FACTORY INFRASTRUCTURE • PHYLONE MIDSOLE
FACTORY INFRASTRUCTURE • MODEL, PATERN, FRAME • LAB.
PLAN • SHORT TERM BASE: SET UP WITHIN DEC. 2011 • INSOLE: 200,000PRS/MONTH • IP MIDSOLE: 120,000PRS/MONTH • MIDDLE TERM BASE: SEP UP WITHIN MAR. .2011 • HO-SKIN: 120,000PRS/MONTH • TPR : 100,000PRS/MONTH PRODUCTS COMPETITIVE POWER AND TECHNIQUE COMPETITIVE POWER
PLAN • Tianjin, China Factory
ANALYSIS ON EFFECT Each year, Samduk’s quality and productivity increases through continuous quality control and educational training. High level intensive management training courses are provided and attendance required by all levels of management
PARTNERSHIP PRODUCTS Establish a strategic manufacturing system for a more stabilized and efficient production Manufacturing in External Factories Manufacture Sewing Maximum900,000pairs/year Maximum2,400,000pairs/year Maximum1,500,000Pairs/Year Supply for Domestic Demand as a base
COMPETITIVENESS Creation of a prepared Manufacture infrastructure for Outsourcing Production Establishment one of the world’s best environmental management system 1 External Factory Line : Establishment of a manufacturing line for Skechers 2 Establishment of a Gore-tex shoemaking system 3 A/S: Quality Control and Costumer Satisfaction achieved through operating A/S Centers. 4 Technical Support Team ▶Standards, Technical Support, R&D 5 Operation Research Team ▶Process Analysis, Manufacture Quality Research 6 Moral Management ▶ ① Employment practice ② Human Rights③ Environmental Pollution ④ Corruption Determent ⑤ Moral Responsibilities 7
WHAT’S DIFFERENT Limitations are created as products are produced domestically or produced abroad ExistingSituation + Utilizing Busan HQ Factory Utilizing External Factory Country of Origin Problem Solved (100% Made in Korea) Effect - Cost Competitiveness - Exclusive manufacturing System created - Delivery Term Reduced - Stabilized distribution system achieved Contributes to reputation of high quality and reliability by acquiring Quality Products and Delivery priority using brand’s Exclusive Manufacturing Lines Using Cost Reduction as a foundation, a strategic viewpoint can be implemented through securing core capabilities and competitive superiority.
Excessive Distribution Term Wages are on a rising Trend DELIVERY I & J Trading Company and its partner Samduk’s business philosophy is to fulfill customer satisfaction by a thorough observance of delivery deadlines, created by sending orders to adequate sources of supply and setting plausible delivery deadlines. • Distribution Period, including customs procedures, takes only 1 day(24Hours) • Containers 3times/weekDelivery Service 6times/week • EX) Departure from Ext. Factory at 2pm → Arrival at a distribution center in Seoul at 4pm China(and other Southeast Asian Countries) 1day Korea ↔ China Total Delivery Date: 60~70days • High-difficulty products or products that are tight on schedule are processed at the head office(Same Price Applied) Busan ↔ External Factory Total Delivery Date: 25~40 Days
LABOUR MANAGEMENT Acquire skillful workers by implementing regular employee training sessions and continuous individual training sessions. Quality Enhancement of Productive Capability!! Job DutyUnderstanding Job Duty Improvement Job DutyCompletion Early Stage Simple Labor Manpower- focused • Safety Education • Health/Environment • Cost reduction • Productivity improvement • Task Division • Management Skills • Theory education • Skill education • Hands-on education • Utilization of high quality labor force. • Implementing Incentives: By implementing a separate incentive system other than the basic paycheck, productivity/quality enhancement is shown Great emphasis is placed on providing extra training to employees to maximize smooth and continuous production
PRODUCTION MANAGEMENT Our Core Competitiveness is to operate an operational research team, technical support team, and state of the art laboratories. Also, we will operate a separate STAFF team for processing Skechers’ orders. Elimination of the source of quality defect → Production Efficiency Enhancement Operation Research Team Technical Support Team Laboratories Guarantees Credibility through various Experiments of (Material) Properties Operation Research Team takes exclusive responsibility of process analysis(production/quality/research) Gore-tex exclusive Labs Technical Support Team supports standards,technological backup, and SPEC Creation of A system that can evaluate the R&D and effectiveness of a product in one-stop Qualitative Quality Enhancement through efficient FEED-BACK activities All details related to experiments are managed systematically
QUANTITATIVE EFFECTS - Processing Prices reduced - Completed Product Prices rise as the products are now labeled as Made in Korea Price Competitiveness Increase - The reduction effect increases gradually in proportion to the increase of orders. - Expectations of a self-owned factory creation effect without implementing separate training sessions or tangible/intangible investments. Problems of Diminishing Production rate and Risk reduced - Delivery Costs are reduced by using professional delivery business vehicles. - Cost reduction by minimization of warehouse storage costs due to immediate payment system - Business Travel Costs are reduced by running Shuttle Busses. Cost Reduction