How to remain cost-competitive in sustainable manufacturing!

by Dheeraj Tagra

11-December-2019  |  11 mins read

Industry experts

At a time when the industry is struggling for prosperity, fighting on costing and buyers are asking for so many specific parameters, it is really important for all stakeholders of the textile and apparel industry to be cost-competitive.

Many are of the view that building a conscious, compliant and competitive textiles’ value chain adds to the costing while some believe that in the long run, it makes one more competitive. Apparel Resourcesgot the views of the leading industry experts on this issue.

It took a long time to put manufacturing and sustainability on the same lines. Manufacturers who are just working for brands need to be equally reputed. They do need to have an understanding of what the end consumer wants. And as far as cost is concerned, it is not only manufacturers who are investing or spending, even various brands are investing in the workers for various projects.

Experts are of the opinion that nowadays, business is all about adding value and sustainability is an integral aspect of this value. It helps bring a brand and manufacturer closer to the customers. By moving factories to smaller towns or emerging states is adding value to the life of local people/workers of that particular place as well as helping manufacturers to control cost. So, it is essential for Indian manufacturers to reinvent their business and manufacturing models to cater to the growing responsibility towards international buyers and brands.

Pratibha Syntex is one of the most respected names when it comes to sustainability. Shreyaskar Chaudhary, MD of the company is of the view that sustainability is in the company’s DNA and his effort for the same will increase continuously. He is of the view that as far as cost is concerned, he tries to make a balance always and all the levels of sustainability and compliance increase the overall efficiency in the long run. Sometimes there are challenges too like normally workers prefer working overtime, while factory management tries to follow more productive path rather than making the staff work for long hours. There are proven examples (especially in other industries) where in spite of working for less hours, the staff have displayed more efficiency.

The apparel industry is increasingly moving towards being buyer-driven and buyers are driven by customers. Hande Diltemiz, MD, H&M Production (India & Sri Lanka) shares that over the years, she has noticed a big shift in customers’ behaviour. Customers want to use their shopping experience; they want to give some message to the world. They don’t want to get free but they want to know where the product is coming from, who produced it and under what circumstances, how many resources (environmental or social) were used for this single product. It makes all the responsible brands even more accountable towards traceability and towards having such customers on-board forever.

“If we are not facilitating or offering what customers are looking for, we are not immediate any more for the customer. It pushes all the brands to be more sensitive about suppliers, region and everything. Sustainability makes the business sustainable,” Hande adds.

She further goes on to explain,“Sustainability has to do more with the mindset, we have to know how to nurture a business. Sustainability does not cost, it’s an investment, it’s a new way of making business. I have not seen a case where a supplier lost business by being sustainable.”

Laguna Clothing is also a leading name in Indian apparel industry and is well known for its compliance and sustainable initiatives. Sarbajit Ghose, MD of the company believes that today everyone looks at the holistic picture rather than focusing on just quality or sustainability. He states, “As a supplier, you can add value to the chain. Are you a reliable supplier and do you have foresight, to align with end-consumer’ requirements? I think it’s a huge opportunity for the players who are already in the bandwagon and are getting the benefits. I don’t think there are many brands or buyers coming to suppliers who don’t know that customers are asking for sustainability.” He further adds that in last 4 to 5 years,  sustainability and compliance have become more stronger and for SMEs or the companies who have started to focus on them, they are in the process to redesign their organisations, as they can’t continue the way, they use to work earlier.

“A world-class manufacturing unit will give a feel within 5-10 minutes and in fact in such cases, even audit is not required to ensure that things are in place. One has to accept and follow that by cutting the corners, you can’t be successful. Factories have to clearly impress the brand in terms of their requirement or futuristic consumer’s need. Then working on the competitiveness can be done by getting a share of the global market,” he insists.

Amit Sanghvi, Principal Counsellor, CII Centre of Excellence for Competitiveness adds here that majority of Indian companies need to work on their basics. He asserts, “At the company or factory level, management’s thinking and employees’ thinking need to be aligned on similar lines, while on an industry level, the entire value chain has to be competitive compared to global standards. CII Centre of Excellence for Competitiveness supports the industry in areas like cost, quality, delivery, and most importantly, in the culture of improvement. Pratibha Syntex is also running a cluster programme in MP with CII which is high on competitiveness.”

Amit insists that the entire value chain doesn’t have any other option rather than to become compliant and competitive, thinking about the customer’s perspective or need. Time, cost-effectiveness and sustainability are the three major focus areas. To make SMEs competitive, a mindset change is must and the target is to get maximum efficiency and zero-defect manufacturing. One has to accept that there is no space for Chalta hai attitude. In our manufacturing processes, we are still man-based rather than being system-based.

Some of the stakeholders strongly believe that most of the compliance strategies like paying proper overtime, ensuring health and safety etc., are implemented by the factories on their own. Johanna Victoria Barcia, Country Manager, Varner Group says, “We have QR code in our products to ensure full traceability, so compliances are at a very high level in our priorities. Customers are quite demanding and conscious about sustainability. We are also running a programme to support the workers in South India.”

Dorothy Lovell, Policy Analyst, The Organisation for Economic Co-operation & Development (OECD) opines, “We have to stop fixing compliance against competition or competitiveness because compliance is a necessary condition of the business (at least legal compliance). It is about reputation also. Yes, there are operational challenges faced during compliance, but there are examples which prove how compliance has benefited business. Responsible business conduct is really important. On the flip side, competitiveness with responsible business conduct is not the right way to do business.”

Selection of right materials and processes are also major important tools to save cost and some chemicals or allied products suppliers are supporting the industry on this front. Anjani Prasad, MD, Archroma India is of the view, “Overall costing needs to be calculated by keeping in mind the hidden costs like wastewater management, energy, sustainability, etc. There are some defects in most of the plants which can be easily controlled by using the right processes like sucking device for fibres which can be of a good help. There are many small but important examples that can benefit the plants a lot. We as a company are always there to train and develop knowledge for textile and apparel manufacturers.”

Costing needs to be seen on the collective front also. Many CETPs are not working properly across India; there are a lot of issues regarding infrastructure which also increase the costing.

“Sustainability and cost are actually not countering each other. One can be sustainable by being competitive and even being sustainable saves cost. Working on energy and water footprint helped us to reduce cost by around 3 to 4 per cent,” Gunish Jain, Director of Beebay Kids Apparels and BlueKaktus

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