Design the Value Chain for a Textile Company - Essay Prowess

Design the Value Chain for a Textile Company

Design the Value Chain for a Textile Company


Design the Value Chain for a Textile Company

The company to be formed is a cloth manufacturing industry known as CoolText Limited. The company will be located in Boston, Massachusetts. For the purposes of conducting a value chain analysis, CoolText by analyzing the production designs through effective research and development. The process of research and design enables CoolText to evaluate the products it plans to offer to customers even before they are made. For this reason, the quality of the final product depends on the effectiveness of the research and design process that starts the startup value chain product management. This process needs the first step of evaluating what customers need. Through cautious market examination, CoolText can determine the trends in customer needs based on what other players in the industry are producing. The research segment is intended to profit individuals from the garments business. This if then followed by choosing the best raw materials and machinery needed to make CoolText products customer satisfactory (Denton, 2015).

Once new material products have been distinguished, CoolText can embark on designing the best procedures of production process. The effective production process is influenced by the choice of machinery, raw materials, staff and procedures. There are many completing systems, all of which improve the crude material and make it all the more engaging and valuable in the last piece of clothing. After production, CoolText will set its stockroom and determine how to make the final product reach customers conveniently. This involves choosing the best transportation methods and reliable distributors to reach CoolText clients (Vivas-López et. al, 2016).

Budget Plan for the Company and the Necessary Budget Review Steps

Business budgeting is a standout amongst the most capable financial devices accessible to any entrepreneur. Keeping up a decent short-and long-extend budget plan will empower CoolText to control income. Calculations can be done to choose the aspects of product type, number of sewing machines and other necessity sums. With a budget plan of setting particular number of machines, CoolText can determine other requirements such as number of employees and the number of products that can be produced within a stipulated time such as daily productions. Calculation can be additionally done backward way (Denton, 2015). With sewing machines, we can make a rundown of other basic machines, gear and set up prerequisites. Along these lines, 35% of the capital will be obtained from accomplices and financial specialists. The rest, 65% of the capital will be sourced from banks as a credit office.

A break even analysis of the initial investment examination table can be completed on the premise of normal costs/benefits. Creating a budgeting of only the wage information cannot allow a full analysis of the impact of potential capital uses on the organization’s financial image. In the startup stage, the organization should make sensible suspicions about the business in building up a budget plan. The initial step is to set up a budget plan based on a monthly and annual premise. From the first month, the company can track financial performances and implement necessary controls on the coming budgets. From that point, the business numbers will be important in deciding working costs and other figures needed to increase profitability and productivity. CoolText will figure the aggregate sums based records of sales and records payable  (Nova & Nova, 2012).

Benchmarks to be used in CoolText Limited

            Benchmarking is a vital process that enables a company to measure the performance of its products, services, designs, processes and operations against those of its main competitors.  The benchmarks to be used by CoolText include competitive, functional, internal and generic benchmarking. Internal benchmarking is the investigation of existing practice inside different offices or divisions of the association. This includes searching for best execution and additionally distinguishing gauge exercises and drivers. It is normal to benchmark things inside to quantify upgrades or to make a feeling of inward rivalry. It tries to attempt and decide the best practice or approach for directing a specific assignment. The point is to locate the best practice accessible to take care of business with least exertion or assets (British Columbia, 2005).

Competitive benchmarking is the continuous process of tracking the operations, processes, profitability and other aspects of competitors in the industry. It is the persistent procedure of comparing and contrasting a company’s performance with that of other players in the industry. The object is to pick up a level of knowledge that enables CoolText to advance your computerized promoting technique in view of contender understanding. Different organizations will improve. Their go-to-market procedure may be better and their clients may be more satisfied (Denton, 2015).

Functional benchmarking is a correlation with comparative or indistinguishable practices within the business or in the context of the external environment that impacts on the operations of the business. It is the way toward looking at particular business capacities among no less than two distinct associations in the same or diverse industry. This is frequently done to contrast comes about with an industry that accomplishes prevalent outcomes in a specific region. On the other hand, generic benchmarking looking at the performance of the company based on the general business environment. It is the strategy for contrasting the execution and procedures of associations in irrelevant businesses. In irrelevant ventures, looking at the execution of comparative authoritative procedures is critical. It heads toward setting new measures by enhancing execution and procedures utilized (Denton, 2015).

Cost System to be implemented by CoolText

A cost system is the framework used by a company to estimate profitability by evaluating the inventory system and analyzing different methods of cost control. CoolText will use an activity based costing system as the best costing system for this niche of business. Activity based costing (ABC) is a costing framework that identifies the costs of the organization and compares them with ideal costing systems. ABC recognizes operations of a company on daily bases and compares them with the overall costs of the organization such as on a monthly or yearly basis. Some costs are hard to figure out through this type of costing system. For this reason, ABC uses factors such as machine hours compared to the number of items produced as well as number of man-hours. Setting up an action based costing framework is an essential for enhancing business forms and for any re-building program. ABC empowers a company’s management to control the cost involved in delivering the end product to clients by controlling all costs involve in the supply chain (Collis, 2017).

ABC appears differently in relation to conventional costing, which now and again relegates costs utilizing to some degree discretionary portion rates for overhead or the purported roundabout costs. As much as ABC appears effective in most manufacturing companies, recurrent costs and circuitous costs may not be easily tracked through this framework. Hence, the framework requires auditing procedures that determine the productivity of the company on a timely basis (Collis, 2017). Employees are required to follow the procedures used through ABC costing system so that they can understand aspects such as the number of hours needed to produce a certain number of products. Along these lines, long term variable overheads, customarily viewed as settled costs, can be followed to items.


British Columbia. (2005). Business plan. Victoria, B.C.: Forest Investment Account, Forest Science Program.

Collis, J.. (2017). Business Accounting. S.l.: PALGRAVE MACMILLAN.

Denton, R. (2015). How to Start a Beaming Machinery (textile) Business (Beginners Guide). London: SamEnrico.

Nova S., & Nova S. (2012). Business plan. Halifax, N.S.: Capital District Health Authority.

Vivas-López, S., Puig, F., Oltra, V., & González-Loureiro, M. (December 01, 2016). Globalized Markets and Startup Dynamics in Mature Manufacturing Industries. Journal of the Knowledge Economy, 7, 4, 947-962.