C2 Bell Jeans Bhd
Case 2 Bell Jeans Berhad
Bell Jeans Berhad was founded in the mid-sixties. The firm survived several lean years and economic recessions largely as the result of the market durability of its dominant product—blue denim jeans. Bell Jeans had been a market leader with
"wash-and-wear," bell-bottom and flare jeans, and modern casual pants. By 2009 it was one of Malaysia’s largest clothing manufacturers. It offered a wide variety of dress and fashion jeans for both men and boys and a complete line of pants for women.
It enjoyed a reputation for reasonably priced, quality pants. The company sold 40 million pairs of pants last year.
Production
In each of the last 30 years, Bell Jeans sold virtually all its production and often had to begin to ration its pants to buyers as early as four months prior to the close of the production year. The company owned 25 manufacturing plants. The plants' capacity varied, but the average output was about 20,000 pairs of pants per week.
With the exception of two or three plants that usually produced only blue denim jeans, the plants produced various types of pants. The firm augmented its own production capacity by contracting with independent manufacturers. Currently, there were 20 such contractors making all lines of Bell Jeans’ pants (including blue denim jeans). Last year contractors produced one-third of the total pants sold by Bell Jeans.
Tahir Wahab, vice president for production operations (see organization chart in Exhibit
1), commented on the firm's use of outside contractors: "The majority of these contractors have been with us for five years or more. Several of them have served Bell
Jeans efficiently and reliably for over 30 years. In our eagerness to get the pants made,
1
we understandably link with some independents who don't know what they are doing and are forced to go out of business after a year or so because their costs are too high.
Usually we can tell from an independent's experience and per unit contract price
Bell Jeans Berhad was founded in the mid-sixties. The firm survived several lean years and economic recessions largely as the result of the market durability of its dominant product—blue denim jeans. Bell Jeans had been a market leader with
"wash-and-wear," bell-bottom and flare jeans, and modern casual pants. By 2009 it was one of Malaysia’s largest clothing manufacturers. It offered a wide variety of dress and fashion jeans for both men and boys and a complete line of pants for women.
It enjoyed a reputation for reasonably priced, quality pants. The company sold 40 million pairs of pants last year.
Production
In each of the last 30 years, Bell Jeans sold virtually all its production and often had to begin to ration its pants to buyers as early as four months prior to the close of the production year. The company owned 25 manufacturing plants. The plants' capacity varied, but the average output was about 20,000 pairs of pants per week.
With the exception of two or three plants that usually produced only blue denim jeans, the plants produced various types of pants. The firm augmented its own production capacity by contracting with independent manufacturers. Currently, there were 20 such contractors making all lines of Bell Jeans’ pants (including blue denim jeans). Last year contractors produced one-third of the total pants sold by Bell Jeans.
Tahir Wahab, vice president for production operations (see organization chart in Exhibit
1), commented on the firm's use of outside contractors: "The majority of these contractors have been with us for five years or more. Several of them have served Bell
Jeans efficiently and reliably for over 30 years. In our eagerness to get the pants made,
1
we understandably link with some independents who don't know what they are doing and are forced to go out of business after a year or so because their costs are too high.
Usually we can tell from an independent's experience and per unit contract price