Homework SourseBusiness essentials 5 Analyze how the factors of production
Solution
The product in the case is apparels. Textile and Apparel is a labour and capital intensive business. A typical integrated textile mill that converts raw material ( fibre) into final product ( fabric) is a huge unit that needs mammoth investment in addition to the services of hundreds of workers at different levels. Next processes that involves processing of fabric to enable it to be made into apparel, and final stage where the fabric is cut and sewn into garment is also of the same nature. Given the nature of the business, the investment in labour and plant can give good returns only when run very efficiently.
The process also consumes huge amount of natural resources. Besides large tracts of land, it needs continuous supply of water for keep the processes running. It also needs a waste disposal system to save the environment from toxic effluents. Many raw materials like cotton, jute and linen and viscose rayon are obtained directly or indirectly from the nature.
Information is one of the key factors in managing the efficiency and cost effectiveness of the process. Its influence is growing day by day with the inclusion of technologies that enable the decision makers to make the processes more visible. They can now manage, forecast and plan the things more efficiently, thanks to the latest decision making tools. Technology enabled supply chain management enables to make the proceses lean, agile and cost effective, saving time, resources and money for the organization and improving customer service levels. Organization wide ERP systems help to integrate different functions of the organization as one and enable sharing, reporting and decision making easier.
Entrepreneurship is the life and blood of this business, where huge investment is a must. The money is invested by private players in the developing countries, who see very good opportunities for export of readymade garments to developed economies.
