The second wave of the Covid-19 pandemic has taken away a large part of the garment business with the recurrence of lockdowns, subdued retail sales, and labour migration. The entire industry both export as well as domestic-oriented, faces a major sustenance challenge. The Indian apparel market in 2020-21 was estimated to have shrunk by ~30% to reach approx. US$ 55 billion (~Rs. 4 Lakh Crores) from US$ 78 billion (~Rs. 5.8 Lakh Crores) in 2019-20. This 30% loss in sales is actually estimated to have shrunk the manufacturing by an additional 10-15%, since most of the brands have not put in fresh orders and have relied on their deadstock or sale surplus goods. Nonetheless, this also comes as a positive sign for the garment manufacturers, considering that brands will have fresher orders whenever the retail sales pick up.
We are back with the part 2 of our series. In the first part (Click here to read), we discussed how an efficient layout along with the use of modern industrial engineering and proper information capture could result in a more competitive factory. This week we share 3 more such mistakes to avoid for becoming more competent post-Covid.
4. Wrong Hiring, Poor Training and Overstaffing
Apparel manufacturing requires extensive workforce involvement and this makes the segment highly reliant on the performance of the staff & workers. Moreover, in the assembly line nature of the modern production systems, a shortage in efforts of a single worker could lead to a fall in the overall productivity. As the workers are directly involved in the processes and add value to products, the skill gap of workers is an important issue that needs to be addressed.
The training of workers should not only be seen in isolation as a boost to productivity, but it also helps in developing a right work culture in line with a long-term vision. As a result, companies are benefited by lower absenteeism, lower labor turnover, higher production levels and more motivated staff & workers.
Another major issue with apparel manufacturers in India is overstaffing of manpower due to the low individual efficiencies. Although, the wages for skilled workers are higher than un-skilled workers, the difference made through their efficiencies generally are higher than the money invested in hiring them. Additionally, the current labour exodus has further increased the unavailability of skilled workforce. Thus, training your workforce is of paramount importance.
Separately, to tackle this issue, the Government of India and several State Governments have launched their skill initiatives to increase the skill levels of the youth in the country. To support such initiative, the manufacturers should also undertake training of their workforce for skill upgradation.
5. Excessive Working Capital due to Poor Planning
Apparel manufacturing, across the supply chain, involves various external input factors which may not be under the control of the manufacturer. These include fabrics, embroidery, labels, buttons, packaging material etc. A delay in even one of these input factors would result in an overall delay in production and could lead to a cascading effect across the manufacturing chain. With all the inputs being exposed to unforeseeable delays and defects, like we experienced during the Covid-19 pandemic, manufacturers need to maintain a certain level of inventory. In such a scenario, any shortcoming in planning results in excessive inventory and thus high working capital, escalating the entire manufacturing cost.
With the concept of On Time in Full (OTIF), manufacturers need to invest in planning of the entire production value chain. This could include inventory management and ERP software or simple planning tools like a basic Time & Action Calendar. This will assist in timely shipments and thus controlled inventory levels and further reduce the downtime and eventually the productivity of the factory.
6. Absence of Information Capture and Communication
As discussed above, apparel manufacturing involves co-working of various factors and hence requires a system for continuous coordination between the different departments in the organization. It becomes necessary for the companies to have a communication system in place to inform and update the various entities across the process flow regarding any delays or changes. Implementing a Production Control/ ERP/ MIS/ Project Management solution in the company helps in easy communication and early detection of such delays.
In our industry, recorded information is not necessarily structured, and the flow of information is often delayed due to physical movement of data through files and folders. This results in gaps in the information flow which results in delayed shipments. For example, if the fabric procurement manager doesn’t communicate a delay in fabric delivery to the cutting manager, the cutting manager would continue with his existing production plan. However, as the fabric has not been received as per the planned time, it would lead to increase in the idle time of the cutting floor and eventually a delay in the subsequent processes.
As per Wazir’s estimates, a 250 sewing machines factory can lose approx. 2.5 lakh pieces in production and Rs. 2.5 crores in profits every year due to these mistakes. It thus becomes important for any apparel manufacturer to assess the above points before resuming the production Post-Covid. Also, these issues can be resolved for any apparel manufacturing set-up irrespective of the age of the manufacturing unit through the process of factory re-engineering. Under re-engineering, companies can focus on technology upgradation and implementing right systems and processes. Significant progress can be made towards avoiding these mistakes by the factory’s own team; however, the support of a garment factory consultant is paramount in creating systems that are invulnerable to such mistakes. This is where Wastra shines. Our team of season consultants utilize their combined decades of experience in developing systems that are cost competitive.
Wastra, an initiative by Wazir Advisors helps clients avoid these mistakes and establish an engineered factory or re-engineer the existing factories to bring it closer to an engineered one. We believe in establishing a set-up with trained manpower, optimum technology, ideal infrastructure and rationally designed processes. Given the ever-growing demand for apparel across the globe and especially in India, we strongly believe that the opportunity for apparel manufacturers is beyond question. It is just a matter of manufacturing with an efficient system.