The tide is ‘surprisingly’ turning in favour of Indian apparel industry, not because of its good performance, but due to the ‘adversities’ faced by the competition… Bangladesh is struggling with political and labour unrest, coupled with the compliance issues; and China, Vietnam and Cambodia all are dealing with the same problems, like labour shortage and high labour wages. Piyush R Vyas, an old industry hand and currently a Management Consultant, writes… Whenever a discussion starts on the country’s performance, inadvertently our comparison is with Bangladesh. But let us understand that the business model of both the countries is entirely different. While Bangladesh’s focus is ‘return’ on each (sewing) machine, India works on raw material cost + conversion cost + rejection + overhead + profit involved. There is no way India can compete with Bangladesh, which is enjoying tariff benefits; also, it cannot beat the neighbour on ‘pricing’. Hence, very rightly, India’s focus is (and should be) on small- to medium-size orders with value addition, targeting low- to medium-price levels. In fact, I would suggest why not go beyond the medium-pricing mark and take it to the next level… Whenever the topic of (out) pricing is raised, the focus is always on productivity and efficiency of production floor. Everybody has a picture of ‘blue collar’ worker – tagging them as ‘culprit’ for all the inefficiency. And always a simple and sure antidote suggested is ‘Lean Production’.
Is Lean the solution?
Lean is not a tool to increase efficiency, it helps in single piece movement. The inherent problem (characteristic) of an assembly line system remains: balancing the line. Balancing 40-60 workstations (not machines) is a ‘big’ task in itself and mind you, it is not easy to even decipher the bottlenecks. Lean can help reduce the work in progress and also in giving output initially. But the moot point, in any assembly line production, remains balancing of operations. In a small office environment, five people cannot work in cohesion, and here we are expecting 50 people to work in sync with having exactly the same timings for different kinds of operations…, and then we term them as ‘inefficient’ workers. The bottleneck may shift through the day – not because of the inefficiency of an operator, but could be a simple reason of not having sufficient workspace around the machine/non-operator. As usual, the line supervisor (and so the floor in-charge) is lost – not knowing what/where the problem actually is. The supervisor merely acts as a postman (feeding helper) and of course occasionally indulges in (an improvement) yelling and shouting to impress (who?). Many have rightly suggested the need to look at alternate production systems – the age old tried and tested – Group System, where a group of workers makes a complete garment and the target is achieved (or even exceeded) at the end of the day. Going back to the topic of competitiveness in respect of pricing (meaning cost)… What is the cost of production and how much can it affect the pricing? I am putting across a generalized cost breakup of a basic blouse – close to a real scenario: Considering CM (Refer Table) as a job working cost – even if it is one’s own factory, the factory works as an independent cost centre, working on revenue model i.e. the factory needs to bill the parent company for a job done and sustain on the revenue generated. CM is just 20 per cent of the FOB; even if you consider 25 per cent of the FOB, then also the efficiency from this component (only) will not have a major impact on pricing.
|A||Fabric & Trims||3.00|
|F||Sum (D + E)||4.18|
Even then let us see how much and where we can squeeze out of this dollar…
Area(s) of concern:
Sweating of machineries (capital) It is strange that the industry has been utilizing the machines only for 8 hours a day – 33 per cent of the time and we have accepted it as a norm (of the industry). If at all we work two hours extra, it is ‘overtime’ – double the cost of labour, plus energy cost and output – not pro-rata to the extent worked. At any given time, in present scenario of shortage of labour, 10-15 per cent of the machines are idle. Utilization of machines – if you study your operation bulletin of last six months, it will be evident how many workstations are not used i.e. even 80 per cent of the workstations are not fully utilized due to style and order (flow) constraints. Wages – directly related to manpower employed
1. This is a fact – a factory with output of just 1 lakh garments per month has cutting stock of 20,000 pieces. Now do I call it ‘efficient’ cutting department or an ‘inefficient’ General Manager – who has overstaffed the cutting department? Cutting, at times, is the easiest process, bulk lay, bulk cutting and done.
2. Quality – A big phobia for all of us – quality is taken very seriously, where we have a Quality Manager and under him galore quality supervisors. Cutting Department has a Quality Supervisor – even then cutting gaps are being noticed in sewing.
Sewing line has ‘roving’ (I mean roaming) QCs, and then mid checkpoints and then end-of-line checking. Finishing Department is of course full of quality checkers – redoing what others have done (or not done).
And then ritually, AQL checking after ironing – proper reports are maintained. At the end, inspections still fail and all over again start rechecking, refinishing and re-packing.
3. The industry is working on norms of 1:2.25 machine to man ratio, meaning – for every 100 sewing machines there are 225 workers in total. Now can we make a concerted effort towards bringing down the ratio to 1:2 or 1:1.9?
Seasonal phenomenon, where the industry faces shortage of operators…, it is during this time the ratio has to be maintained more judiciously as otherwise it may rise to even 1:2.5.
4. HR department with close (friendly) interaction with IE & Production Department should work towards bringing down the ratio – which will have net effect (savings) on wages.
Energy: Electricity is getting costly but the usage (wastage) of electricity goes unnoticed. A few lights switched off here and there – for a few weeks, under pressure of management, is a temporary phenomenon.
1. Ironing – Major energy guzzler; where there is a lot of room for improving the output. Even at 2.0 minutes per garment, each ironer should be able to give an output of 240 garments or say even 200 garments. But at the end of month if you tally the total output of factory, each ironer would have contributed say 100-125 pieces per day.
2. Fusing Machines – How often (yes, very often) we see fusing machine belt surface area is used only for 20-25 per cent of the area/time. Everybody around is oblivious to the misuse of fusing machine. Unmindful of the requirement, a factory may use 1.0 metre width fusing machine instead of 600 mm fusing machine or when a job can be done on a smaller 450 mm machine, they continue to use the bigger machine. In fact, if the production (of fusing) is well planned, the machine can run for say four hours to complete the total factory production – and shut down thereafter.
3. Regular cleaning of lights can give much brighter light to the extent that if you are using double tubes in certain areas, you can try to use a single tube with sufficient lux level. More lux is a buyer’s phenomenon – but how much? In fact, continuously working in a bright light of 900-1000 lux can be harmful to a worker.
4. Connected Load v/s demand from Electricity Board (EB): This is one area, where your past usage pattern can help you reduce the demand from EB and thus save on minimum charge levied. Also, I have observed that even if a factory is using 100 KVA load, they have installed a DC Generator of 250 KVA. Surely a smaller DC Generator can help save on fuel and maintenance cost (besides the capital cost). Another scenario where a larger factory needs to run a packing department, still have to run a 250 KVA DC Generator because a smaller DC Generator’s need was never thought of.
Connected Load – is easier to work out – a basic arithmetic; but to determine the actual usage of power is what calls for ‘experience’. No pun intended, but the so called ‘Electrical Consultants’ are not well-versed with garment industry working and thus do not work out proper demand-diversity factor, hence over specify the power and infra requirement. Have even seen a factory with 600 machines installed, having a transformer of 1500 KVA, where even a 500 KVA transformer would have sufficed.
Efficiency in sewing – Yes, this ought to be improved Today, running a compliant factory would mean spending approx. Rs. 1,200 per machine every day. We only have 480 minutes in a day to make efficient use of this resource. And if you have an option of viewing your factory FROM THE TOP – bird’s eye view, you will see how many are employed but ‘unemployed’ workers – evident waste of minutes. Please visit factory ‘as an outsider’ and you will see quite a few unemployed workers. Are the workers to be blamed for this loss of precious minutes out of the available 480 minutes? A garment is literally sewn when a needle functions, and it is said that the needle only operates for 20-25 per cent of the available time. Rest is treated as (lack of) efficiency in terms of percentage. Let us try to squeeze as much as we can from the CM component and then there is a lot the ‘white-collar’ workers need to contribute (squeeze) in other areas to make the business competitive and profitable.