Manufacturing practices in the garment factories are said to be improving with time, still there are missing links that hamper profitability and factories are yet to realise this fact. Lame practices, poor implementations of proven methods, lack of subject matter expertise and over reliance on inexpensive technology solutions for shopfloor optimisation are to be blamed for the current state of garment factories. The onus of factories’ improvement is on industry’s stakeholders such as manufacturing business consultants who are putting whole and soul to revolutionise the way traditional factories have been working and are determined to make factories more sustainable in long run.
For our second article of ‘Industry Insider’ series, we have had great conversation with renowned manufacturing business consultant Dr. Rajesh Bheda, Founder of RBC Pvt. Ltd., Gurgaon (India) who spoke at length about where the apparel factories are going wrong today and how it can be fixed. Here are some excerpts.
AR: The changing manufacturing landscape in COVID-19 era poses more problems for garment factories along with the traditional hurdles. Can you highlight few of these problems that the factories are facing today? And, how should industry address these issues?
Rajesh: COVID-19 has brought unprecedented challenges for the entire world including the manufacturing industries that are part of a global supply chain. The main challenges have been:
- The industry is witnessing a good inflow of orders but supply side constraints are becoming larger.
- There is worker shortage due to reverse migration and new upcoming factories.
- Higher rate of workers falling ill is also leading to high absenteeism.
- Supply chain disruptions continue to impact the arrival of imported raw material and machinery required for capacity expansion. For some of our clients, there are delays not by weeks but months.
- Sky rocketing rates of cargo have affected the business in a large way.
- High prices of cotton yarn are a matter of concern for the industry, though this has nothing specifically to do with COVID-19
This is the right time to focus on fundamentals. There is no point expanding capacities with similar or lower efficiencies and higher lead times. It is time to drive out waste from the value chain and processes to improve responsiveness. Average factories are sitting on an opportunity to reduce the manufacturing cost by 20-25 per cent through overall efficiency plus quality improvement and managing supply chain using the principles of TOC (Theory of Constraints). This will improve OTIF (On-Time and In-Full) rate, free up the working capital due to lower lead times and reduce risks related to forecast errors. The cost reduction can generate substantial margin for the business and the new model of working that is lean and flexible can be replicated for expanding the capacity. This has to start soon with long-term commitment so that the opportunities available with rush of orders are fully utilised and leveraged for consolidating future business.
AR: As real-time collection of data through digital technologies is being normalised in garment factories, do you think this can be a challenge for a traditional manufacturing practitioner that relies on tools like lean? What do you think of amalgamation between lean tools and digital tools?
Rajesh: Traditionally, the factories have been working on a push-based system wherein they experience excess inventory, high lead times etc. These all are growth impediment factors for a factory and they can’t (rather they shouldn’t) expect profits under these working circumstances. Apart from this, with a few exceptions maybe there, such factories are not habitual of adopting digital technologies in their premises for process optimisation. Here comes a crucial role of a manufacturing practitioner who generally relies on Lean management which is a contemporary management system. Only the leaders that are open to learning and committed to progressing towards excellence embrace Lean in its true sense and adoption requires amalgamation between traditional tools like Lean and emerging technologies for data collection basis which decision making should be done. Any organisation that implements lean management systems knows the importance of data for decision making and would be open to collecting and receiving data through online digital tools. From that point of view there is no contradiction between lean and real time data collection. Thus the amalgamation can be done, and is the need of the hour.
AR: We have seen lean fail miserably in garment industry due to many factors, lack of management commitment being on top of that. How can lean success rate be improved? Please highlight a project of yours where you have made significant turnaround in a factory using lean tools!
Rajesh: Let us understand first that ‘lean’ is not a bunch of tools. As Jeffrey Liker, the well-known author of Toyota Ways says in the second edition of the book, “Toyota Production System is the framework for what is often called ‘Lean’ management and has been embraced in mining, retail, defence, healthcare, construction, government, finance or name your sector. While we may assume that senior TPS (lean) experts called ‘Sensei’, or teachers are delighted to see the system they are passionate about being used in so many different industries, the reality is they are often disappointed and frustrated by how lean programs have turned a beautiful living system in to a lifeless tool kit.”
Talking about failure of lean management system implementation in garment industry, as you have identified, lack of management commitment is certainly one of the top most reasons. The following points together in some proportion can be at play for the failure:
- Lack of clear understanding of what lean principles are all about and thorough assessment if the management believes in them or not.
- It needs long-term commitment to apply the principles across the business than in just one area. Certain department or function heads may feel that they are already the best and do not want to change. This deprives the organisation of the real benefit through creating a flow across the organisation and the added value does not flow to the customer.
- Enough time is not spent on creating buy-in from employees and preparing the team for the implementation. In the world-class organisations, every associate is expected to know what ‘waste’ is, how it affects their work and the business as a whole and is encouraged to work on eliminating it.
To illustrate an example, we have worked with an organisation in Bangladesh for over four years. The good thing was the top management was highly motivated, open to learn and had the fire to make progress happen. Once we presented the improvement potential to the entire top and senior management team, they took time to absorb it and understand the proposed methodology. Once they were convinced, there was no looking back. During the initial phase, we worked on strengthening the fundamental systems of quality management and Industrial Engineering using the principles of TQM and Kaizen. A sizeable time was spent on coaching the senior and mid management team. The data capturing and analysis was strengthened. The improvement journey was fully supported by MD and Director operations. We did not call it ‘Lean’ at that stage though we were slowly using the principles of TPS or Lean.
The initial phase helped the organisation gain significantly on productivity and quality front and the entire team got excited about it. Celebrations for small and large successes were a regular part of the journey. Sometimes workers received crates of Mangoes or other gifts and public recognition. KAIZEN Wall was created and kaizen projects were recognised there. KAIZEN projects were taken up in every department starting from manufacturing, merchandising, IE, sampling, to even finance and administration improved processes.
Once the organisation became mature with a good acceptance of Kaizen culture and the organisation experienced wide results, Lean Management Principles were further adopted. This involved coaching of the management team through Kaizen Blitz events to transform various processes. Once the cross functional teams learned through the Kaizen events, they could replicate the learning and bring in improvements in other processes.
AR: One of the pain points of factories is that they heavily rely on technology if they are investing in it. They forget ‘effective’ decisions are made only by skilled humans using data collected from these technologies. Do you believe there is a missing link in human training in factories of all level?
Rajesh: I couldn’t agree more. This is the case in most organisations, but there are exceptions. Good organisations invest in their human resource. The key principle is digital solutions captured and analysis of data so that humans can do the thinking and decision making. Unfortunately, while negotiating price of technogical solutions, the need for effective training or technology transfer is not given importance and hence companies are not able to utilise the solutions to their full potential. It is a common sight to see the equipment not being used as no one knows how to use it effectively or it is broken down due to poor handling by ill-trained operator/ mechanic. However, our experience shows that if the employees, even less educated, are trained well and guided during the initial period of implementation, they can do wonders.
Just to illustrate through a simple example of our work in Bangladesh for Sudokkho project supported by UK and Swiss Government in over 110 factories from 2015-2020. The implementation of Sudokkho-RBC Industry Based Training system resulted in over 9000 existing workers improving their production capacity by 32 per cent on an average. This tells us about the potential for improvement and the fact that it is achievable through world-class training practices.
AR: What do you think contributes majorly in low productivity on shopfloor? Can you cite some examples of your projects where you have drastically improved sewing lines productivity in recent times?
Rajesh: The key factors causing low productivity on shopfloor are as follows(not necessarily in the order of priority):
- Stoppage of flow at various stages due to product development issues, poor planning and supply chain issues
- Lack of synchronisation between the departments, thus everybody focusing on what they think is important and missing the big picture
- Low workforce skills due to lack of or improper training at worker level. The same is true at supervisory and managerial level for human as well as technical skills
- High worker turnover, absenteeism and low motivation
- High defect rates or unresolved quality issues cropping up during production
- Lack of performance linked incentives
- Limited data capturing, analysis and problem solving skills
In one of our recent projects in NCR, a leading fashion apparel manufacturer with high commitment to sustainability and social standards requested for our support. RBC team worked with them closely to address the worker skill shortage and improvement of existing workforce skills through RBC’s 3G Tailor Training System. We also worked with the factory team to improve the line layout to improve flow, standardise methods and achieve improved balance. Production team was coached on daily management practices, hourly production monitoring, defect tracking and problem solving. The project resulted in an impressive improvement as follows:
- Line efficiency for various styles improved from 30 per cent to almost 100 per cent
- Line throughput time reduced by 41 per cent
- The finishing productivity improved by 37 per cent
- The DHU rates witnessed gradual reduction
More importantly the management is pleased with the newly developed ability to train the workers as per their needs using our 3G Tailor Training System and not being dependent on workers coming at gate. The project is continuing and together we aim to continue the momentum as there is no finishing line to the journey of continuous improvement.
In another project in South India for a leading brand of men’s innerwear, we started with transforming one pilot line for productivity improvement. This project was a big success. Encouraged by this success, the partner company invited RBC team for spreading the improvement across the production lines in its two units. Closely working with factory team and utilising several Lean principles, the factory was able to achieve efficiency improvement of 14 per cent across the production lines (over a relatively high baseline) during the challenging time of Covid pandemic. We are happy that workers were also able to earn incentive as a result of efficiency improvement.
In a recent case in Bangladesh, we are supporting a factory to implement skills development system. The factory used the system for upskilling the existing workers with low performance under the guidance of RBC team and improve line management skills. The factory was able to improve the line efficiency from 44 per cent to 63 per cent. We hope, in time to come, the factory team will be able to replicate similar improvement across the lines where the performance is sub-optimal.
AR: Consultants in garment industries today are partnering with technology companies to provide cutting-edge solutions for process visibility on shopfloor. Have you also teamed up with any tech company? If yes, what’s the idea behind it?
Rajesh: We have had a long lasting partnership with Tukatech Inc. This has helped us serve our clients in digitising and reengineering product development and cutting room processes. Though we have worked with several shopfloor digital solutions from time to time, we have not formalised any partnerships yet. But we shall soon do so. We have been using our home grown solutions for data analysis that have proved to be effective so far and now we shall take this further on priority.
AR: Quality is still a task for factories. DHU rate is as high as 20 per cent in most of the factories and they don’t even realise it. What are the key factors contributing in this drastically high DHU rate?
Rajesh: With due respect, let me say that in several factories, there is lack of clarity on what DHU actually means. In practice, they report percent defective data as DHU. So in reality the DHU may be more than that is claimed or reported. The main reasons for high DHU tend to be poor machine maintenance, poor methods prone to mistakes, sub-optimal operator skills, poor communication of standards, non-resolution of pre-production issues and limited efforts for mistake proofing.
Actually if a garment has 20 operations, we can say that there are at least 20 opportunities for a mistake to take place in a garment. This makes the opportunity for defects to be 100*20= 2000 for 100 garments. Even if the average defect rate per operator is 1% the DHU can reach 20. So to achieve much lower DHU, we need to have majority of the workers operating at Zero Defect level. In most of our programs Zero Defect Operator initiative along with internal customer feedback analysis plays important role in reducing defects and larger mistakes which flow from one department to other.
AR: How can defect/rework/rejection rate be reduced in factories to make them more profitable? Will available solutions work in factories of all level – MSMEs and big-scale units?
Rajesh: Quality is a way of life. It has to be practiced from top to bottom. Rather it is the responsibility of the management to ensure that processes are designed in such a way that defects cannot be generated. That is where Poka Yoke comes in place, risk assessment is needed, defect analysis and problem solving is needed. The key mantra to be followed is
“Do not accept defects, do not produce defects and do not pass on defects”. This principle must be ingrained in all the employees and practiced by all.
I can share a case of factory of a leading garment manufacturer from Tirupur where following measured were taken:
- Hourly monitoring of quality and efficiency data
- Daily quality team meetings, Pareto analysis and problem solving
- Internal customer feedback analysis
- Initiation of Zero Defect Operator program
- 5S and & 7 waste training form key managers and supervisors
- Improved line balancing through data visualisation charts
- Capturing NPT
- Method improvement
- Strengthening skill matrix and upskilling of operators
- Along with strengthening HR system of the organisation
This resulted in the DHU reduction from 4.02% to 1.08% over eight months’ period. They also had reduction in cut to ship loss by 51% while they improved sewing pilot line efficiency by 15% simultaneously from a baseline of 66%.
AR: Since you are associated with factories in both India and Bangladesh, do you think factories’ acceptance level for change to pace up with global trends has increased? Pl cite an example.
Rajesh: The acceptance level of new technological solutions and management practices has certainly improved both in India and Bangladesh.Over the years, the wage rates are going up and technogical solutions are becoming more cost effective.There is greater evidence that investment in management as well as technological systems pays back well. There is interest to know about industry 4.0 and what the new technologies can do? One more thing that is contributing to this acceptance is the new generation of garment owners who are exposed to recent technology solutions and do not want to carry on with age old systems. To give few examples, Silver Spark Apparel Limited, Brandix and Epic Group have made significant progress on digitalising many of their processes and they continue to explore more opportunities across the manufacturing processes.
AR:Going forward, according to your experience, how will the garment manufacturing industry shape, especially in India and Bangladesh?
Rajesh: Garment manufacturing industry in Bangladesh has a bright future. The whole nation is aligned towards making it a success. The industry has gained significant momentum and is poised to make rapid strides to consolidate its position as the second highest exporter of apparel to the world. I see more and more green LEED Platinum and Gold certified plants coming up. The industry would add more value added products to its portfolio, would start making strategic investments in design studios and production facilities overseas, there would be growing appetite for technogical solutions including digitalisation and domestic brands would start growing. The industry is also making rapid progress on improving social standards and would further improve the image of ‘Made in Bangladesh’ brand through concerted efforts of businesses, industry associations like BGMEA, BKMEA, academia, Govt. of Bangladesh and civil society organisations.
The industry in India should also witness reasonable growth. The manufacturing bases will spread more to states like Gujarat, Rajasthan, Odisha, Jharkhand, MP, Telangana and Andhra Pradesh to benefit from the availability of workers and incentives provided by the State Governments. We see the momentum to continue for Lean Management, agile product development, sustainability and quick response manufacturing. With robust growth projected in the domestic consumption, there is a big opportunity to meet this demand domestically. With number of small and micro brands emerging, there will be opportunities for developing Demand Manufacturing. The recent measures taken by Government of India should help in boosting investments in the sector. Leading Indian groups are also likely to up their investments overseas in manufacturing, global sourcing as well as acquiring international assets and brands.
