Chea Sinat Garment Co. Case Study

(Summary)

On Monday, 1st of May, we have conducted an interview about inventory control system at Chea Sinat garment factory. On that day we interviewed with the marketing manager, Chief Financial Officer and warehouse supervisor. After spending two hours asking them about the company overview, and the full cycle of inventory control system we can conclude that the system in this factory is simple. Consist only of a warehouse supervisor who control the processing of the products and a marketing manager whom will responsible for order, invoice and payment.

(Company’s Overview)

Chea Sinat Garment Co, Ltd is a relatively small and reputable garment, which produce clothing, shirts and trousers for local and international customers. This company was built in 1999 with an area of 3100 square meters and was operated in 1999 with 350 staffs. In 2003, CSG Co, Ltd received Century International Quality Era Award Gold category from Business Initiative Direction (BID). As a result, this factory has increasing it market demand drastically which help it to relocate its location to Prek Thom Village.

CSG Co, Ltd has produced several brand products such as Levis, Hollister, G-Unit Denim, John Deere, Classic Fit, Utility. This company is mainly doing a service to produce clothes for customers.  

(Contact)

Running a factory is just the same like applying for a new job. Achievements, qualifications and a good background would make a great impression toward anybody. The successions of Chea Sinat factory have attracted so various oversea garment companies. Cambodia’s government has selected Chea Sinat Factory to be on the list of outsources factories, which displays numerous qualified factories. Generally, those oversea clothing lines will make their choice through the list of local garment factory and decide whom they want to work with. After the decision is made they will contact the local garment factory and make a deal. Let’s considered that Chea Sinat factory has come into their final decision, so sealing the deal will be the next step. To run this agreement smoothly, Chea Sinat and the foreign company need to make estimation on the financial statement like analyzing the direct and indirect costs and expenses as well as overheads and non-overheads then the negotiation will take place.

(Shipment)

After both firms agreed on the contract, the task will begin with shipping. According to the factory’s marketing manager, setting the shipment dates both ship in and ship out are not their tasks. Also oversea shipping price is the outsourcing company responsibility. However, for shipping price inside Cambodia is the factory’s responsibility.

(Warehouse)

To begin with, once the materials are being stored in the factory’s warehouse, the manger will start checking the supplies’ invoice with delivery notes to confirm whether the amount is right. If they wanted to be exact, a large scaling machine will be used to measure and they will make an approximation of the amount of the materials to compare it with the packaging list (delivery note). According to the marketing manager, the amount of items in the packaging usually exceeded the original amount by two percent or closely to that depends on each customer. The bonuses that were given are now the factory’s property, they can either use it when a particular section make mistakes in producing the produces. However, some customers prefer to us the bonuses as an opening inventory. That aside, as mentioned above, it is depends on the customers on how they manage the bonuses. Additionally, the outsourcing company gives the factory two weeks to report if there is any mistake in numbers or malfunction. Warehouse’s manager will report to the marketing manager immediately if the mistakes were to be confirmed. Give that there are mistakes; marketing manager will act as merchandise and address the problem to the customer. On the other hand, if the numbers and qualities are precise the materials are ready to be move into each section of the factory. The operating managers of each section will then issue a note to request for material to be stored in their own storage room.