In early 1990s, when Wilcom entered the Indian market, the embroidery industry was overwhelmingly export focussed, producing corporate identifications, logos, names – something it colloquially calls the ‘left-chest embroidery’. The domestic market was also mostly focusing on emblems and logos. Moreover, there was a clearly different market and industry segment, based on Schiffli machines that produced continuous embroidery lace for curtains, bedsheets and to some extent, fashion garments.
Initially, the embroidery industry was dominated by Tajima, Barudan, ZSK and later SWF all of which were considered robust, long lasting machines, producing high quality embroidery. Significantly, the industry went through rapid and fundamental changes in the decade between 1995 and 2005. And the game changer was the entry of low-priced Chinese multi-head embroidery machines that were about 70-80 per cent cheaper than the high-quality brand with equivalent size. This caused major disruption in the industry. “By the early 2000s, there were more than thirty Chinese machine brands imported to India and import of such machines peaked at about 30,000 machines in a year in the mid-2000s, mostly landing in Surat which became the most concentrated embroidery hub in the country,” shares Janos Horvath, Vice President (International Sales), Wilcom.
During the same time, Indian economy entered a new phase and a sizable middle class with strong economic power and money to spend started to emerge. Traditionally, Indian dresses used to be embellished by hand embroidery, and mirrors, stones and, sequins, were attached by hand and only the wealthy could afford such heavily embellished dresses. With the entrance of Chinese machines, embroidery became a major mass production industry for the new emerging middle class.
Adding further strength, multi-head embroidery machines developed wider frames, smaller head-space and had many new special devices (sequins, cording, taping, beading, laser, etc.), which expanded the use of these machines into the industry segment that was traditionally Schiffli only, as now, the same job could be done in any normal workshop. These changes meant that Indian embroidery industry shifted gear from western, export focussed dominance to domestic market-driven one. Over the past twenty years, there has been a flood of Chinese machines, some of which produce embroidery of stitching quality, comparable with the highly-respected leading brands.
With so many new entrants in the market, the stitch quality expectations dropped sharply in the late 1990s and through the decade in the 2000s. This was not an Indian but a world-wide phenomenon. “We could see many emblems and cheap tourist garments with shockingly bad quality embroidery. Back in the mid-1980s, one of the clients of Wilcom produced badges for the US Army wherein the quality requirements were so exact that the number of stitches in each part of the chevron were specified and not one less or more stitch was accepted by Quality Control,” elaborates Janos.
With time, the mass production is giving way to small quantities, therefore, the overhead is becoming proportionally higher and higher. Now, one needs to have extremely good understanding of costing of the product because 1-2 per cent difference in price in a quotation can mean either to lose the order to competition or to get the job but make a loss on it. This is more characteristic to high labour cost in western countries. Indian companies have not been exposed to such sharp cost sensitivity and probably do no monitor their costs to such detail. Gone are the days when government incentivized the industry, labour was cheap and also the buyers were not very tight on pricing.
Fiscal disruption is another issue that has caused market disruption. Every economy has to have a balance between the money available and the goods offered in the market. In the past decade, it seems that the Indian economy had lots of money for investment and this increased machine import that tied down this surplus money. A large part of this money that the textile/apparel industries, including embroidery have is cash based (not the export markets, though). The Indian government’s two initiatives demonetisation and GST in the past two years created lots of disruption in the industry and manufacturers had difficulties with re-adjusting their business models and processes, especially to learn new accounting procedures and manage the business with less cash. Though, both these policies are good for overall economy in the long-run, adjustment will take time. The devaluation of rupee as against the dollar off late has also disrupted the ability to import machines.
So, what to do to be more competitive?
Increase productivity- reduce cost: This means, measuring costs very accurately. Work smarter and not harder. Many owners are looking for cheaper labour but this will not work forever. What you need to do is to get more productivity from the workers by better organizing the work and reducing downtime on the machine by reducing thread breaks and also machine breakdowns. Better handling and storing of fabrics, threads can also reduce downtime. Many factories are very dusty, this reduces machine performance and increases downtime. Air-conditioning may be considered costly but it may increase quality, so you would get better paying embroidery jobs. Cleanliness and tidiness at the factory floor increase the workers’ awareness to quality issues. Regular training on quality also helps. Organizing the workers into competing teams is a very good practice. Showing the score of the ‘green team’ and the ‘red team’ every week in reducing machine downtime, reducing wastage etc., is a very good motivator.
One issue with the textile-apparel industry is that it traditionally employs some of the lowest skilled labour force in any country. Therefore, increasing productivity through training is usually a difficult quest especially because of the high turnover of workers. Still, productivity increases can be achieved with creating smart workflows in the factory where goods travel in one direction, machines are placed ergonomically, so one worker can attend to two machines, job preparation areas can be created to speed up the replacement of fabric and frames on the machines and so on. Such improvements have to start from the management and trickle down to the workers and not the other way around.
Creating a Brand name: Make in India is an excellent initiative. But ‘Indian Excellent Quality Embroidery’ is not what we are aware of, but it should be a long-term goal for factories. Years ago, the ‘Just In Time’ system was very popular, as through excellent organisation and processes reduced the cost of storage of parts. Many western buyers prefer to place an order and get it to the store only when it is needed. To work this way requires a highly disciplined management and workforce. My feeling is that most embroidery units do not yet operate at this disciplined level, although we can see a new generation of managers starting to implement processes that lead in the right direction.
Training and education should be the key here. I think the key is to organise training programs first to owners and managers where the various aspects of productivity of the industry units are analysed and shared, so ‘Best Practices’ can be shown. Second is to identify embroidery skill sets.
Government Assistance: To the best of my knowledge there is no official embroidery training program in India, there are no industry job categories (like Embroidery Production Manager, Embroidery Machine Operator, Embroidery Designer) that would be a part of the national job skill register or training institutions that would offer training for such job skill. The government needs to look at the outsourcing process and infrastructure, how the buying houses operate and how the contracting is managed. One major issue is compliance. Contractors must satisfy a list of criteria partially ensuring quality and partially ensuring workers’ safety. Indian government could legislate some general compliance categories that would underpin the ‘Make in India’ initiative and would attract foreign buyers.