Opinion: Problems of SME apparel companies and their solutions

by Dheeraj Tagra

16-February-2019  |  6 mins read


Apparel Resources asked apparel manufacturers and exporters across the country about the problems faced by SMEs (Small and Medium Enterprise); the companies shared their opinion on this issue and suggested some probable solutions too.

Vivek Lakra, Director, Superfine Knitters, Ludhiana: Most of the SMEs lack highly skilled or efficient manpower, be it at the mid-level or senior level. Bigger companies can afford highly paid professionals and even such professionals prefer to work with well-known names. These professionals can bring in a lot of positive changes in any organisation. However, in the case of SMEs, their management has limited knowledge or know-how about the advanced operations or systems.

Whenever there is any policy change or a difficult market condition, SMEs face a more negative impact and tougher time. Big companies are taught by the buyers, while SMEs don’t have this advantage and have to fight their own way out.

Murtaza Lokhandwala, Director, Bubble Bee Export House, Ahmedabad: I started my business four years ago with 15 stitching machines, but now we have a capacity of 350 machines and are expecting good growth too. I was lucky to have good capital support unlike other SMEs, but despite that, I faced many challenges and even now there are unpredictable problems arising every day. SMEs like us have to manage our payment cycle intelligently, be it in the form of receiving payments from buyers or paying our own suppliers. While maintaining balance in this cycle, the cost of the product should not increase and quality should not hamper. Though this is an individual scenario, I would say that the best service to buyers can prove to be a good support at this point. SMEs should try to grow step-by-step like I started with CMT for brands and learned lot of things which would not have been possible to know without doing CMT. Besides, for CMT, minimum capital was required. Later I moved onto FOB with the same clients.

Cost is a major issue for everyone but SMEs have to be more cautious on this front although saving always can’t be helpful. From our experience, we source grey fabric and get it printed. There are many mills and they have different charges for similar kinds of printing, but for quality and timely delivery, we don’t go for cheaper ones or sometimes even pay a little extra.

Pratham Sadh, Director, Pratham Textile, Mumbai: There are many ways, tactics or the so-called jugaad which SMEs use to solve their difficulties or challenges faced in their business. As far as the hiring of a skilled professional is concerned, if one’s workers are trained and owners have proper technical knowledge, it is not a big challenge. No doubt, capital requirement is an issue and specially so if one has his/her own manufacturing. I would say that there are various ways to arrange capital support like banks, personal resources or finance companies. Banks are comparatively more safe and easy source. My experience so far with banks has remained good in this regard.

Nagmani Kumar, Proprietor, Khushi Garments, Patna: No doubt, small companies always have more problems than big corporates or even any medium-level companies. And if a small company is in a remote area or may be in a big city but not in an established hub, there are endless problems faced by that organisation. Like we are having our apparel manufacturing operations in Patna. Hence, right from the availability of raw materials or delay in the delivery of the same, to no proper support from banks or financial organisations, limited skilled workers or trained professionals…, are a few of the troubles that we face there. I must insist here that major issue for small scale manufacturers like us is the availability of finance or working capital… and Governmental bodies do not want to support us. There are interesting schemes which can adequately support us, but banks don’t even talk to us about these schemes. All these benefits are for their ‘own contacts’.

Prabhu, Director, Morpho Knitwear, Tirupur: As SMEs, we specially face challenge to acquire a new brand as our client. It is even difficult to get appointments with sourcing heads. Major big companies ask for vertical set-up right from spinning to sewing. But what we felt was that rather than concentrating on such verticals, companies need to look only at the sewing aspect where few of the customers may need in-house dyeing, printing, compacting, embroidery, etc.

Yogeeta Prabhakar, MD, Prabhakar Overseas Group of Companies, Noida: The MSMEs are in trouble due to lack of industrial production and time management as per the orders. Also, funding is the major crisis that they face compared to giant companies or MNCs because it takes them time to build their trust and reputation in the market to get any help from financial institutions.

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