Theaspect of the value chain in a manufacturing company is pragmaticallyreferred to the activities that are usually laid down by the firms asthey convert raw resources into complete goods (Horngren, Foster,Datar, Rajan, & Ittner, 2015). Value chain comprises of reducingnon-value adding activities. The main rationale for the aspect ofvalue chain analysis is to assist harness the accessible resourcesand use them effectively towards final goods production. Value chainanalysis also helps to reduce the operation cost and also increasesthe quality of the anticipated final products.
HilfigerSportswear Manufacturing Company
Thetype of a company that I would like to start is Hilfiger ClothingManufacturing Company. The primary reason I chose this type of acompany is because of the broad range of market that is readilyavailable (Fauré,& Rouleau, 2011, p.180).For a company like mine, one has to understand totally the currenttrends in the market so as to enhance my company compete effectivelyand favorably. Some of the needed requirements for the clothingmanufacturing company include the highly skilled staffs’ memberswho will be capable of transforming the diverse designs intooutstanding clothes since the needed employees will be the sewers,fabrication coordinators, cutters and vastly experienced designers.
Inthe clothing industry, the most successful companies in thisparticular field are those that have their own designers’ labelssuch as Nike, Puma, and Adidas among others. In this particularsituation, the target market is always vital, and so my primaryconcern will be sporty clothes for youths and girls form my majortarget group.
Typeof budget I want to implement and budget review steps
Financeis basically vital in every success of a business. Hence it is in thebest interest of a company to develop a budget that covers all thesales expected as well as the expenses expected because in doing thisaspect it will make sure that the firm stays buoyant. The mostsuitable type of budget for my clothing firm is the operationalbudget. Operational budget usually comprises of expenses and revenuesthat a business carry out in its daily operations. Revenues usuallycovers all the income that are usually secured by the firm whereasthe expenses usually define the entire cost of raw resources, thecosts that are always involved in the process of production,delivering and packaging until it get to the anticipated consumers inaddition to the costs of administration (Horngren et al., 2015).
Inmost circumstances, operational budgets are usually reviewed yearly,but some reviews are done in between months so that financeexecutives will have the capability of comparing diverse results andmake any adjustments so as to make sure of the continued success ofthe company. Budget review steps comprises of the ones that willassist hasten the business growth efficiently. The laid down stepscomprises of the strategic planning that assists the firm operatetowards a definite goal and how they plan to realize theirobjectives. Thus, a budget must be set up towards the company vision.Company aim is another step that is involved. Formulated budget mustoffer all the financial gains sources that will assist the firmnavigate towards the objective so as to assist the company growth andalso facilitate all the day to day operations. In addition to that,there must also be projections of revenue that involve expected arise in income that should be involved in the budget.
Theseprojections must start from the prior firm financial experiences.Company board approval and projections of profit margin since asuitable budget must be approved by the company board of directors,and sometimes the company financiers approve so as they can provideassistance with the capital provision. Margin of profit also makessure that the returns towards the company stability.
Specificbenchmarks I will utilize in my company
RoyalManufacturing Company is a privately held firm that is categorizedunder clothing makers and has estimated revenue of USD 3 to 6 Millionwith approximately 15 employees. Royal is an ideal firm to benchmarkbecause of its few employees, but its success is much notable (Fauré,& Rouleau, 2011 p. 177).The company located in California, USA.
HYoung Sportswear Company which is listed as a clothing manufactureris another clothes firm to target because it consists of about 4 to10 employees, but it has approximated annual revenue of $0.6 to$1Million and is located in San Antonio, Texas. The approach thecompany operates, the few employees but significantly increasedrevenues is the major aspect of utilizing the company as benchmark.
NikeSportswear Company is another major rival to Adidas Company in thesports world that has huge success. This aspect makes every companyaims at having a chance to attain such big success that it have.
AdidasSportswear Company is a major firm in the sports world having secureddiverse notable deals in the world. It sponsors big league clubs suchas Manchester United, Real Madrid, and Chelsea FC and this makesevery company wish to attain such huge success.
Costsystem I plan to implement in my company and challenge expectedalongside its solution.
Inmanufacturing companies, the managers should establish the total costof the products produced. Consequently, it is worthwhile to utilize acost system such as job costing system since this particular systemallocates costs to products on the production batches basis. Forinstance, in clothing making firm where they produce shorts andt-shirts, they have to produce them in batches and allocate the costthat each batch has used alone. The major challenge with thisparticular cost system is that it accentuates all operating costs ina business that includes overhead costs. This aspect can make thecost of a particular product a bit higher than expected price thusscaring consumers. For a company to overcome this challenge it isadvisable to standardize prices so that some products will cover theadministrative costs (Howto Start a Clothing Manufacturing Business, n.d).
Fauré,B., & Rouleau, L. (2011). The strategic competence of accountantsand middle
managersin budget making. Accounting,Organizations and Society,36(3),167-182.
Horngren,C. T., Foster, G., Datar, S. M., Rajan, M., & Ittner, C. (2015).Cost accounting: 2015 custom edition (15th ed.). Upper Saddle River,NJ: Prentice Hall-Pearson.
Howto Start a Clothing Manufacturing Business. (n.d.). Retrieved January31, 2016, fromhttp://www.startupbizhub.com/how-to-start-a-clothing-manufacturing-business.htm