Bangladesh achieved a major feat in 2015 when it trumped China to become the top denim garment exporter to the EU market. The country again made headlines when it surpassed Mexico in 2020 to become the top denim exporter to the USA market. This has become possible due to the rapidly evolving denim factories of the country that are putting compliances, human assets, technology (across areas in a vertical set-up), and process-driven approach – four of the most important requisites for a factory to stay profitable – before anything else. A big contributor to the Bangladesh’s denim industry’s growth is Mahmud Group, a completely vertical-integrated denim garments manufacturer with state-of-the-art in-house spinning, weaving, sewing and washing units.
In just 16 years of existence, Mahmud Group has established itself as a leading name in manufacturing denim and non-denim fabrics as well as jeans. The garment divisions of the group collectively produce over one million denim garments per month and, as it aims higher, the newly set-up factory Mahmud Fashion Limited (MFL) is completely being re-organised not just to stay true to international standards of compliances and safety but to achieve best possible efficiencies using an amalgamation between skilled workforce, different line balancing methods and technology.
Behind every successful and innovative company, there is a dynamic team guided by a visionary leader. When Team Apparel Resources (AR) visited the factory (MFL), it was visible that the teams working there in production, design, quality and washing were looking at a common goal and accordingly putting efforts to achieve the desired output. The team is brilliantly guided by a young and spirited man named Rafee Mahmood who is the Deputy Managing Director of Mahmud Group. Rafee, in a candid conversation with Team AR, touched upon the key issues that are and will always be relevant for a factory when it comes to working with buyers. Here are some excerpts!
Balance between basic and designer denim products and market diversification are key to growth
Each and every buyer till 2020 have been placing orders which were mostly regular basic items, but recently there has been a shift in placing orders which are of high-fashion as well. For basic, long run items, few of our clients/buyers have orders which are called NOOS (Never Out of Stock) meaning the programmes run throughout a year or more. However, we are observing a change in demand for Bangladeshi manufacturers. We are moving towards producing products which are more than basic. Some buyers are now doing co-creation with Mahmud Group, right from trend analysis to design innovations to choosing fibres for producing the right fabrics and then producing the end product and shipping out; we are doing everything for them.
We have a dedicated fibre-fabric R&D team which is given inspirations, trend forecast and market analysis to our design team who are continuously researching on new things to offer to clients as per the future demands of the end customers. They prepare moodboards for all target groups such as menswear, womenswear and kidswear; type of silhouette/fits; decide the season colours; and which fibres will fit the fabrics etc. Although, customers have always been giving us products to copy and then put a negotiable price to produce; we are seeing a positive shift on moving towards more value added products which may later convert into bulk. So, it’s a good mix and match.
Before 2020, we were only shipping to Europe and Australia. In post-pandemic era, we are seeing more inclination of the US buyers moving towards Bangladesh, and we are benefiting out of it. After 2020, we have been seeing significant increase in the USA market as we have added Belk, Kohl’s, and Wrangler in our clientele.
Executing split POs now…
Bangladesh is more than 40-years-old in apparel manufacturing and we, as a country, are used to produce bulk orders and big volumes. We still need a lot of counselling to come out of traditional mindset and incline towards what the future asks from us. Mahmud Group is shifting right gears at the right time, while catering to the buyers that are beneficial for us – Brick & Mortars, Departmental Stores and Online. We have been able to achieve average efficiencies of 72-80 per cent in our old factory, while we are targeting to achieve right efficiency in small orders in the new factory Mahmud Fashion Limited.
One thing we all have to understand is the reason why some buyers have gone (or are going) for ordering smaller quantities in contrary to their previous bulk buying practices – more people are now shopping online, buyers are cutting down long slow moving inventories, they are now selling first and then are asking us to produce after getting confirmed orders from end consumers. Therefore, some of the buyers are generating multiple small split POs. Take Bestseller for example. If it is generating a PO of around 500,000 pieces of one style, it is not taking the entire order all at once rather it is going for split deliveries. We are delivering multiple small POs in multiple weeks. Bestseller may ask us to prepare 10,000 pieces on the first delivery out of 500,000; but these 10,000 pieces can be split to multiple smaller POs for different destinations. We are doing these deliveries every week, say for Denmark 2500 pieces, Canada 500 pieces, Italy 60 pieces, Spain 180 pieces etc. For this to function smoothly, the brand has made several zonal offices who know the taste of the particular type of clothing a country’s consumers would want to wear. I think it’s a good strategy for brands but a bit hard on the manufacturer’s part.
However, we are geared up and are trying to become as flexible as we can be. We are trying many different approaches to make it happen. Our goal is to have smooth deliveries on any quantities. We are trying to create enough WIP in the cutting and have few small lines side-by-side with bigger lines. We are working on ensuring zero feeding for smoother operation. In a denim factory, a sewing line generally uses 60-70 machines; whereas at Mahmud floor, we have 48-52 machines in a line depending on styling and quantity. We are able to produce more with lesser number of machines. This is possible with the most advanced automated set-up which is aligned with the latest innovation in technologies that are industry 4.0 ready. We are even trying to reduce the number to 30-35 machines in a line, in future. This will help us cater to any size order.
Plans for next 5 years
We have recovered from the pandemic quite well; however still challenges exist such as acute gas shortage, lack of skilled workforce, high cost of raw materials because of which we and industry investors are finding ourselves in dilemma in terms of deciding what to come next and how long this industry is going to survive amidst rising costs. Pandemic has shown us the ‘true value’ of fibres and fabrics, as their costs continued to skyrocket and are still surging. So our management is planning to invest in an in-house multi-blend fibre and yarn manufacturing unit. We already have two spinning plants – 900 tonnes for denim yarns and 900 tonnes for non-denim yarns per month which are only able to cater to 33 per cent of our total usage. Therefore, as of now, we buy around 67 per cent of our yarns’ from outside and once this spinning unit will come to force, we will drastically reduce our dependency on raw material outsourcing. Unfortunately the national gas crisis added with the Ukraine-Russia war has held our expansions as of now.
We are already in that stage where we have alternated or reduced the use of virgin cotton! We are going into recycled cotton, procuring recycled polyester fibres from REPREVE, buying TENCEL from Lenzing, using Hemp and we have even successfully developed and sold some of the denim products out of these sustainable fibres. PCWs (Pre-Consumer Waste) (Post-Consumer Waste) is another focus area for us, as right now, we are selling our industrial waste to reverse reserves and they convert it into fibres and send back to us and we incorporate the fibres back to our fabrics. Also we are buying fibres which have been converted from pre-owned consumer garments. However, currently we are using only around 20 per cent recycled cotton but the number will improve significantly in months to come. As we are facing shortages on food and other commodities amidst the war and pandemic, we must all be acting on better ways to free up more land to grow more food rather than wasting land and water on growing too much cotton which will not feed world hunger. Hence we are continuously researching on better fibres which use less resources compared to virgin cotton.
Our plan includes to become more sustainable by bringing back the resources and re-incorporate back into manufacturing along with becoming more people-oriented, as shortage of skilled labour is rising and all of the Earth’s natural resources are depleting. Universities and institutions must focus on more adaptive education rather than being complacent. Teachers must focus on updating their knowledge and know-how to be more aligned with the future of the industry and introduce courses which would be more industry-specific for us. Bangladeshi universities are making students academically smart but the students are still lacking on basic communication, branding and marketing skills, or skills that would be more logical with the industry. Newcomers from universities to my factory should not feel they are joining a sweatshop and they should know that Bangladesh has the best state-of-the-art most advanced facilities where people can afford a better life. After all, the readymade garment industry is the major driver in pushing us from once an under-developed country to a developing nation! My aim is to make my company a positive education institute creating talents who can better add value to this industry and the country.
Mahmud Fashion Limited – a new factory of established Mahmud Group aims high as it re-organises itself for good
Under the leadership of the group’s Director of Operations Mahfuzul Alam, the six factory floors are being laid out phase by phase to obtain desired results as per defined KPIs. Of all KPIs, what MFL is taking on priority is improvement in factory’s efficiency before going for other modifications in processes and optimisation. “This is the need of the hour as, in a competitive era when price margins are pressed, improved efficiency can help factories scale their profitability by eliminating loss in production,” averred Alam.
So, how is MFL planning to increase efficiency on its shopfloor? The factory has 55 denim automats installed that can collectively produce around 55,000 denim pairs a day by performing operations such as pocket setting, belt loop attachment, pocket designing and waistband attachment. Currently, MFL is able to achieve only 63 per cent efficiency using these denim automats with a huge scope for improvement. “We are aggressively working to take our efficiency to 80 per cent in coming months and that’s certainly one of the first things on our cards,” stated Alam. This is not going to be an arduous task for MFL as a complete line of high-end denim automats has been instrumental in increasing both productivity and efficiency.
The factory has also restructured the entire sewing floor and, in the revised layout, one sewing line in MFL will have 55 sewing machines, 1 ironman and 2 helpers, hence a floor with 12 sewing lines will have 660 sewing machines, 12 ironmen and 24 helpers. These 12 sewing lines will be well supported by 12 lines of finishing on the same floor. Clubbing both processes to carry out on the same floor assists MFL in saving the time consumption of garment movement from one area to another. This practice, no doubt, increases efficiency of the shopfloor with reduction in cost of overall operation. To ensure the sewing lines never stop, MFL keeps WIP of two days so that the machines remain continuously fed with the help of high-end fabric spreaders and auto-cutters. The entire sewing floor works as a unit under one manager for efficient process flow.
Digitalisation is on the cards
Progressive apparel factories have realised the fact that they need to adopt digital tools on shopfloors to improve operational performance and efficiency. MFL, with its own IT-arm PREFEEX Ltd., managed by Rafee Mahmood, has developed an MIS software to fulfil the factory’s requirements and a pilot is scheduled to run on one of its sewing lines by the end of June this year. The software will be increasing visibility of every department within MFL in real-time right from cutting room to dispatch. “All cut panels will be monitored and each bundle will be scanned separately in cutting, sewing, finishing and washing once this MES becomes operational. So, the tracking on a piece/cut panel will be done across the locations it is travelling,” explained Alam.
MFL will also be able to reduce quality defects significantly. The factory, at present, stands at 6.50 per cent DHU (Defects per Hundred Units) rate and, once this MIS is in place, top five quality defects can be identified automatically through software. “Apart from integrating technology, our aim is to go for more involvement of quality and operational people that will assist us in building a sense of awareness and accountability in them,” concluded Alam.