First, I must wish my friends from the industry a very healthy and safe lifestyle. By using the word lifestyle, I have highlighted the essence of the new normal, never normal and no normal, a much talked about phrase today.
Every event and happening in the history of mankind gives us something new and different. Even today, just as by saying 9/11, everyone can recall the horrific act of terrorism that is etched in the history of the USA. In the same way, the phrase ‘new normal’ will always be associated with coronavirus or Wuhan virus, whatever you may prefer to call it.
It is the change in lifestyle that will be the new normal… be it reflected in the way we dress up, go shopping, go partying, re-engineer shop floor and travel!
I am sure I must have forgotten lots of things which will be the outcome of a change in lifestyle.
What concerns me the most is the fact that the garment industry is still not ready to take a long view on the business, but is just engrossed in reacting to the perennial problem of how to avert the present crises.
None of the forums that I have ever been a part of have talked about the future in a concerted and strategic way. Is the industry not thinking and debating on what are the steps and changes that would be required to offset the challenges because of the Wuhan virus?
Unfolding the 10 crises of 2020…
The last few months have been a roller coaster ride for the industry, as one country after the other restored to lockdown as a protective measure against the spread of the pandemic. So, how did the sequence of crises unfold and what were the turn of events that kept the exporters busy with managing one crisis over the other evolving one?
Crisis 1: Cancellation of orders
In the month of February, the news had started trickling in and by the second week of March, the entire industry was aghast with the news of the cancellation of orders, whether in running production or in transit. No doubt, it was a major impact on the industry. It took about a month for the industry to realise and then quantify the impact of what had happened, and after all their hue and cry, they finally accepted that what has happened cannot be undone in a short time and certainly not by them alone.
Crisis 2: Failure to get government & association to aid
The entire proceedings were then left on the Government and the associations to do the job for which they were created. The Government and associations started pushing the buyers to comply and to be more responsible. Few buyers agreed in the process and few are said to be reconsidering…. Some solace for the exporters, but misplaced. Since it was a farce. Since then no significant contribution has come from either the Government or the associations.
Crisis 3: Worries over salaries
Simultaneously, the salary issue started building up and is still haunting the industry. Since the work was done for 21 days in March, everyone agreed to pay salaries for March, and to their credit majority complied with the call to pay salaries. But what about the April salary and thereafter? The talking issue became whether to pay the salary for April or pay part of the salary or not to pay at all!
The Government, in its role to appease the workers, brought out a notification to compulsorily pay workers for the period under lockdown. While on the other hand, exporters called upon the Government to dole out some incentives for the export community to ease their pain points. Sadly, nothing came through. Except that the Government withdrew its order and the Supreme Court came out with no work-no pay, a relief in some ways to the industry. However, it did not exonerate them from paying the mid and top management either 50 per cent for the next few months or to retrench them or send them on sabbatical.
Crisis 4: Markets open up and buyers push for delivery
Meanwhile, a new development took precedence over the salary issue… the world started opening up, and with it, the stores. The pressure was built by the importers, retailers and brands to send the goods or again the threat of order cancellations. According to me, nearly Rs. 1,000 crore worth of goods are lying in around 700 factories in Noida alone.
It cannot be overlooked that the current situation arose, as the voice of economic health versus people health became a point of heated discussions. A balance had to be created and come to a point when the industry was allowed to open up.
Crises 5: Doubts on how to open factories
Four issues predominantly prevailed on the minds of exporters at that point in time. First was whether they will be given permission to open and under what conditions, following strict guidelines for running the factory, to get passes to cross state borders to reach their factories in Noida or Gurugram from Delhi, and from where they will get the workers who were at this point desperate to leave for home. But the underline was that factories had to be re-opened, whatever the confusion.
Crises 6: Scramble to re-open
A scramble happened to reopen, wherein the local government hastily issued notice and released sanction forms for the opening of factories which actually needed many changes before they could be ready for the new scenario, creating chaos of sorts among the manufacturers.
The chaos unfolded as many struggled to fill the form which got amended many a time, and at the end, almost every factory was given approval with only a few left out, reasons for which are still unknown. Probably they would be asked to visit the government office again, to discuss another chaos for breaking social distancing norms. But the final outcome is that in the process, the factories opened in some parts of the country and more are on the way.
Crisis 7: Migrant workers going back home
By now, the labour, which had always been the tricky part at most of the manufacturing hubs, as a majority of factory workers and operators are migratory, was in utter despair. At the time of lockdown, they got stranded and had no way to go back home. Even the exporting community was hoping for them to be sent back home, otherwise, they would have to be given April salaries. But it did not happen then.
But now that the factories are opening up, the authorities are making arrangements for them to go home and rightfully so, but the timing is wrong. The exporters are now worried as to how to ensure they remain. It is obvious that whatever amount is being offered is not enough for most to stay back. The struggle now is how to stop the migrant workers from going back to their native towns. The fear is obvious… once they leave, where will the labour come from!
So, every decision taken thereafter was centred around workers and how to disburse salaries, so that few stay back.
Crisis 8: Running factories amidst COVID-19
In a parallel discussion, the guidelines for running factories in the midst of the pandemic were talked about. The discussion centred around the question of strict punishment on finding any corona case in the factory and then how to sanitise the workplace and workers to get the factory running… All of which created a big scare against the possibility of untoward incidents that could have a long-term impact. The fear of punishment on non compliance was the major concern and the industry was seeking solutions from experts on how to go about it.
Crises 9: Re-engineering factories to be COVID-19 fit
Rising above the fears, industry started re-engineering the entire shop floor under the strict guidelines on social distancing. The safety of workers and the reputation of the factories were at stake, and on top of that, buyers too were seeking validation that factories were being re-engineered to meet norms of COVID-19 safety.
Crisis 10: Managing manpower in the ‘new normal’
From here onwards, the biggest challenge is going to be manging human resources to run the factory under strict guidelines as also to slowly increase capacities. Workers have gone home; middle management is disillusioned and owners are faced with heavy losses if the stakeholders don’t come together cohesively at the right time.
Take note that in the above process, everything took its course. The people who were designated to the job were all doing their duties to the best of their abilities. Probably nothing more could have been done or it was simply out of control of any associations, industry bodies and the government put together.
We are taught to control the outcome… did I control the outcome or was it just panic which made me follow my instinct but not the head?
Has the chain of crises taught us something?
In the entire process, I fail to see a plan or roadmap for the future. Is there a group of people who are deliberating on how the future will be? Is there any association or council deliberating or enacting scenarios post the pandemic? More so now because we know, and it has been emphasised time and again that the virus is here to stay…. So, where is the answer to ‘what now’?
All these changes happened in the last one and a half months of lockdown and the solutions too will have to come fast!
My take on the present crises
Going digital critical to cut cost
First, the cost of production will go up, primarily due to infrastructure cost. With this new normal, one will have to seat the workers at a distance from each other, requiring more space for the existing staff strength. And we all know real estate is not cheap.
Since we would be asked to follow social distancing, it would be advised to take as many jobs as possible to WFH platform. The digitisation of designing and sampling should be the first, followed by merchandising. Space saved would be money saved.
New approach to consumerism
It is obvious that partying like before will be less in number, therefore the requirement of lifestyle products will also be less. Further, rather than people venturing out to malls and high streets, they will prefer buying through e-commerce. Both the above parameters will inspire less buying, and hence, the order quantities will be small.
Use this time to prepare the factory to produce for e-commerce companies, as it would require special efforts and different skills to produce for them.
Need to keep moving, but with clarity
In all this, the industry is in quite a mess… there is no direction and everyone is moving with the flow. Today they don’t want the workers, tomorrow they are desperate for them. Today they have to stop work mid-way, tomorrow they have to start to survive. Buyers are in, buyers are out. We need to pause and think long term for the benefit of the industry and its stakeholders in the future.
The voice of the industry today is that a few orders and many sampling for programmes next season are trickling in with the rider that if it is not done today, then it will be shifted to China. So, there is a hoard to open factories!
Yes, opening business is important, but do it right, don’t get into another set of crises. Get acquainted with all the norms, prepare and then open. Don’t get into new product categories just to grab business, mainly PPE without studying and knowing the product.
Talk to buyers, sit across the screen and be honest of what is possible and what is not. Buyers have to understand that getting out of the mess is going to be a joint effort. It is time to rise from the complex of the ‘buyer is king’ and move towards a collaborative approach. They need you as much as you need them!
A new business environment awaits, but it all depends on the mindset and attitude change of the players…The chain of crises has made us vulnerable and strong at the same time. Now we have to decide what we want to take away as the lesson learnt!