Global apparel industry, both retail and manufacturing, has been bearing the brunt of changing business landscape, and Sri Lanka is no exception. The collapsed apparel retail markets like the US, Canada and the EU – which constitute around 85-90 per cent apparel export earnings of Sri Lanka – have impacted the export revenues of the country, as fashion brands have been continuously asking the factory owners to give discounts on undelivered orders. The factories have found themselves in quite a bizarre situation and survival in the long run could be a daunting task if this continues to be the case.
Apparel factory owners in the country, however, believe Sri Lanka to remain a trusted partner for apparel sourcing. The fact can’t be denied that, when it comes to R&D projects and huge investment in sustainable infrastructure, Sri Lanka stands tall among all other Asian countries and that’s what the biggest strength of its apparel industry is. Rakhil Hirdaramani, Director, Hirdaramani Group, Sri Lanka, shares his thoughts on the current situation, the Group’s CSR activities at the time when the society needed it the most and the forward planning with technology integration to its processes in order to overcome the crisis.
AR: COVID-19 has shaken the entire world, and apparel manufacturing is not an exception. What changes do you see in Sri Lankan apparel manufacturing industry post the pandemic? What will be the ‘new normal’?
Rakhil: It is difficult to navigate or foresee the effects of this pandemic at the moment. What we see is that Sri Lanka will continue to be a trusted apparel sourcing partner. With strong logistic ties, we see a higher level of collaboration with regional partners across the supply chain.
With regard to the ‘new normal’, our take is that we are entering the ‘never normal’. In our opinion, we will see a renewed focus on sustainability and circularity. We have already started our journey here with our partnership with Asics, Eco Spindles and Hayleys.
The ‘never normal’ is actually an umbrella for multiple fronts:
- Customer Behaviour – We believe COVID-19 has resulted in income constraints. We’ve seen this with layoffs and furloughs in the West. Albeit subsidised income with Government intervention, we do believe that buyers will be more considered. Whilst they will want seasonality and fashionability, they will want products that last and are more durable.
- We also believe sustainability will come to the forefront and the need for circularity will become more important than ever.
- Federated Supply Chains – The digital supply chain is more important now than ever. While we see economies restarting, overseas travel is still questionable. The digital supply chain is not just between brand/retailer and manufacturer, but connectivity throughout the supply chain. We have seen the challenges of cash flow erupt from the consumer through to the cotton farmers. The financing of the industry is ripe for disruption and we need to see how we can collaborate and innovate. We foresee smaller orders and additional complexity – this will need digital solutions to manage.
AR: Hirdaramani Group has stepped up to fulfill its CSR activities and is contributing a lot with newer innovations to support medical industry. Please share some of your initiatives in COVID time and also shed light on HR interventions.
Rakhil: When COVID-19 hit us in Sri Lanka, our teams moved swiftly to support our country. We worked in partnership with the Ministry of Health to work on PPE for frontline members. This is continuing and we have extended this partnership to private hospitals.
In addition, our printing arm, Hi Fashion also partnered with SLINTEC, a nanotechnology research centre, to develop medical swabs in the country.
We are fortunate to have a talented team which identifies strongly with our corporate values. The team has made remote-controlled trolley to help medical frontliners. This trolley is able to deliver medication and food, while also collecting samples from COVID-19 patients. The trolley is equipped with a camera and a microphone which help doctors to communicate with their patients. The innovation also helps minimize contact between doctors and patients which is a need of the hour. We, as a Board, can’t take credit for this; the team identifed the needs of our communities and reacted quickly. One such example was our colleague Nimal Kumarasiri who took the initiative to solve a very real problem. As a Group, we appreciate the curiosity and swift action of our people!
With regard to HR innovations, our first pivot was to move all of our office teams to remote working. We were privileged to have support from our sister company, HOne, to not just enable the collaboration of remote working but also enable all IT & ERP systems to synchronise remotely.
AR: Mr. Anil Hirdaramani once said that future factories will have fewer people and more machines. How do you see the same materialising, especially when garment making (sewing in particular) still remains labour-intensive and with no possibility of sewing automation in the near future?
Rakhil: This is more relevant today than ever. However, we at Hirdaramani Group have a different perspective, especially at this time. Whilst we have moved into automation where possible, we see a challenge in the short to mid-term of heavy capital expenditure.
By looking at our learnings from Lean manufacturing principles, we have realised that there is a significant opportunity to reduce waste from our current processes. This is not a one-off project, but rather an iterative approach to continuous improvement.
We have been focused on our Lean Journey for several years now, which is focused on apparel production. What we have seen in the past 24 months is the amount of waste there is in the process. Customers have been passing more of the front-end workload onto us. With this, smaller order quantities per style and additional documentation, we believe the next phase is digitisation of processes. It cannot be a ‘one size fits all’, as each customer behaves differently. We are in the process of automation via Remote Process Automation.
The internal operations side we have seen is that most manufacturers rely on a lot of manual operations on the front and management side. This is where we have deployed the Res.Q solution to cater to digitising reporting process. Dashboards create one version of the truth real-time, empowering our teammates that need the data. The next phase for us is machine learning (ML) which will assist us in our decision making.
AR: Since Hirdaramani is the technically advanced unit and has developed its own Res.Q software, how are you integrating Industry 4.0 concepts in your manufacturing process? How will Res.Q help post-pandemic?
Rakhil: We’ve realised that there is an incredible amount of duplication in our industry and the immediate opportunity is with the digitisation of management operations. We are moving towards automation in the cutting room and also with best-in-class tools to ensure decisions are made with accurate data.
Alongside, through our investment arm, Hirdaramani Investments, we took the decision to seed Res.Q. What the team has done is that it developed a manufacturing suite of solutions that are focused on digitising the shop floor.
We struggled with finding a comprehensive solution for our manufacturing business. Our team from HOne saw this as an opportunity and decided to study the way a typical factory operates. From that, they opted to develop the following modules:
- QMS – Quality Management for End Line & Final Inspection
- MI – Machine Inventory
- SKM – Skill Matrix
- SL – Smart Line Management
- MES – Manufacturing Execution System
- FI – Fabric Inspection
The whole premise was to build an ecosystem that integrates with other tools such as Fast React, GSD and ERPs and creates a Digital Feedback loop to ensure that we cut through management layers to provide our workers with the information to make decisions in real time.
What is exciting for Res.Q is that we are seeing an acceleration of what we envisaged when we developed the software. With social distancing likely to continue, we see Res.Q as a perfect cloud-based solution. By working on Microsoft’s Azure platform, we are able to access the tool from anywhere and reduce the requirement of team members being in close proximity to each other.
AR: Hirdaramani Group is a recognised name in the apparel manufacturing. What is your suggestion to the mid-level manufacturers to overcome the present crisis?
Rakhil: The first wave is to survive the next few months; you need to optimise on cash flow. There is no set way but to work on your business as you know it best. The next horizon, once business restarts, is to look at how you can simplify your business model as much as possible.
