Over the past twenty years there has been a rapid increase in the production of shoes to meet growing global demand. In 2019, before the onset of Covid, a record 24.3 billion pairs of shoes were manufactured internationally, with almost 9 out of 10 shoes (87.4%) manufactured in Asia. China dominated with a 55.5 per cent share of the globalmarket, followed by India (10.7%), Vietnam (5.8%) and Indonesia (5.1%). Excluding Asia, the rest of the world, including Europe, make 12.6% of the world's shoes (https://www.worldfootwear.com/news/footwear-production-with-new-record-of-243-billion-pairs/5356.html).

European shoe manufacturing began to move offshore in the 1980s as a means of reducing costs in a competitive market. In the United Kingdom, for example, the well-known manufacturer Clarks began to close its UK factories and source shoes from Portugal and then later India. With a substantial contraction of the footwear sector over 30 years, only a small, high-quality, niche manufacturing sector remains in the United Kingdom. The United States and German footwear industries also experienced a substantial shift to offshore sourcing of shoes and outsourcing of production. The European exceptions are Italy and Portugal, where production and exports of high-end, fashion shoes have increased.

South Africa, like many western countries, has a legacy of shoe manufacturing, but since 1994 and the opening up of the SA economy, most conventional footwear sourcing and manufacture has steadily moved offshore (only 2.9% of shoes made in 2019 were produced in Africa). AndersonsShoes of Pietermaritzburg (not the company's real name but the one that will be used in this case study) has been in business for over 100 years but is now one of the last shoe manufacturers in the city. Pietermaritzburg was the shoe manufacturing capital of South Africa, but now, sadly, shoemaking is a sunset industry.

Andersons Shoes has conducted a strategic review of the market and a rigorous examination of its internal operations. The company cannot compete with the cheaper imported shoes from Asia but does have the experience and expertise to manufacture high quality, expensive shoes that could compete with the shoes made in Italy and Portugal. The challenge in this regard is that shoe styles change every year and if Andersons was to copy European styles, their shoes would be a year behind the fashion. If Andersons approached the European fashion houses to use their designs to make shoes in time for the new season, they would be required to enter into a trade agreement and pay royalties for every shoe made using the latest styles.

Andersons has conducted a costing exercise and discovered that it could be cost effective to pay for European designs as the company would be able to charge a premium for its shoes and would save on its own research and development costs. However, since the cost of making the shoes and also paying a royalty for each pair made is high, the business would only be profitable if they were able to sell most of their production. The company usually makes a particular style of shoe in batches of 500-700 pairs as this reduces downtime. Only 3 or 4 different batches may be made in a day. In Italy, factories making the more expensive, fashionable shoes will make them in batches of 20 to 25 pairs and will make anything from 50 to 80 different batches per day using the same sized workforce as Andersons has.

Shoemaking has always been a highly skilled craft and workers can take many years to learn and master the specialist skills that are required in the industry. The Andersons workers are all experienced and highly skilled, with many of them able to perform all of the tasks involved in making a shoe. Recently, as an experiment, one of the older workers was asked to make a shoe from beginning to end on his own. Walking around the factory from work centre to work centre took time, but his actual value adding activities to make a shoe was recorded as just under 3minutes. This has left management wondering why their lead time to make shoes to order is around 8- 10 weeks. In Italy, a factory can receive a customer's order in the morning and send out the completed order that same afternoon or early the next day.

Andersons Shoes has concluded that the company has the worker skills and the equipment to achieve the same productivity as an Italian factory but its operations management needs to be completely overhauled.

QUESTION 1: Increasing productivity and reducing waste will be essential if Andersons Shoes is to survive as a SA shoe manufacturer. With reference to the 8 wastes, describe how a lean operations framework could be used by Andersons Shoes to increase productivity and reduce waste.