Gurgaon, India: Bharat Tex, India's largest textile event to be held in national capital from February 26 to 29th, is expected to bring global textile leaders to the country. The event is expected to witness signing of 46 MoUs, including international partnerships, as per Ministry of Textiles. The focus is to project Brand India to an international audience and showcase entire strength of the textile ecosystem, which is unique to India. It is expected that the event will also achieve a boost in the international and domestic investments in this sector.
While the focus on modernisation of the sector and building new state of the art manufacturing plants is vital, the critical importance of the need for productivity improvement needs to be better understood for strengthening the sector. It must also be noted that in spite of enormous improvement potential, the Indian garment exports have been hovering at around 16-17 Billion dollars for last five years. Post Covid 19, the industry has not been able to bounce back, as geopolitical developments have affected the global consumptions and international trade. The market outlook in immediate future looks sombre. In spite of tough economic conditions and lower global demand, the garment industry in Bangladesh and Vietnam has done well compared to India as can be seen in table provided below.
|
Country wise Export Values (Bln. Dollars) |
|||||
|
2018 |
2019 |
2020 |
2021 |
2022 |
|
|
India |
16.5 |
17.2 |
13 |
16.2 |
17.7 |
|
Bangladesh |
32.5 |
33.6 |
28.1 |
35.8 |
45.3 |
|
Vietnam |
31.5 |
30.6 |
28.6 |
31.2 |
35.3 |
|
China |
157.8 |
151 |
141.6 |
176.1 |
182.4 |
Source: WTO
“India is blessed with abundant raw material availability across almost all fibres, technological know-how and rich history of textile manufacturing and availability of human resource. However, our performance in the international market is not commensurate with our potential. One of the major reasons for this is the low productivity level in garment manufacturing and its impact on competitiveness. The average efficiency level in the Indian apparel manufacturing is estimated at 45-50% compared to 60-65% of China and Vietnam” says Dr. Rajesh Bheda, Managing Director, RBC, a Management Consulting firm specialised in fashion industry and former Professor, Chairperson of Fashion Technology at National Institute of Fashion Technology, New Delhi.
“The current value of RMG manufacturing in India is estimated at US$ 52 bn , US$17 bn for exports and approximately US$35 billion for the domestic market. We at Rajesh Bheda Consulting are of firm belief that, the Indian apparel manufacturing industry has immediate available improvement potential of 15% which can be realised within next 12 months. This means, the industry as a whole has a productivity improvement potential worth US$7.8 billion in next 12 months.” Adds Dr. Bheda.
Is this potential achievable?
The estimated productivity improvement potential has been pegged at a modest 15%. This is a reasonably achievable target. There is overwhelming evidence to support this. Some of the key evidence are as listed below:
- Several productivity improvement projects in the Indian garment factories facilitated by various consulting firms including RBC in recent past, have resulted in 10 to 25% productivity improvement.
- Upskilling initiatives for the experienced workers using the Low Performer Improvement methodology of RBC, have resulted in average 20% reduction in process time of individual workers leading to increased worker productivity in 14 Indian factories.
- The project Benefit for Business and Workers, supported by UK Aid implemented by Rajesh Bheda Consulting (RBC) and Impactt Limited in India and Bangladesh for the supplier factories of high street brands from UK has resulted in 26% productivity improvement in 32 factories from manufacturing hubs across India.
- Last not the least, the results of the research, ‘Productivity in the Indian Apparel Manufacturing: Paradigms and Paragons’ by Dr. Rajesh Bheda, based on the study of 61 factories concluded that, average apparel manufacturer in India can improve labour productivity by 50% with implementation of productivity improvement strategy.
The evidence above clearly establishes that productivity improvement of about 15% is highly achievable in our garment factories within a year. What is needed is, focused efforts by the manufacturers to adopt best practices in the areas of Industrial Engineering, Human Resource Management and Quality Systems. All of these do not involve large capital investment in plant and machinery.
The industry associations need to take focused approach to promote productivity improvement in the member factories. “While Govt of India, through Ministry of Textiles, has taken several initiatives to boost investments in textile industry through PM Mitra Parks, PLI Scheme, skilling initiatives and promotion of Technical Textiles Manufacturing, there is urgent need for supporting productivity improvement efforts. It would improve the cost competitiveness of the sector and help the industry to move up from 16-17 billion export performance.
This will also help the industry to make progress on the export target set by the Ministry of Textiles for the year 2030. Not only that, a more productive garment manufacturing industry for the domestic and export market will also support employment creation and ensure that we do not lose domestic market to cost competitive players like Bangladesh that has already captured 750 Mil $ orders from Indian apparel retailers in 2022 and is aiming at growing its export to India to 2 Bl $ in near future.
15% productivity improvement would also mean approx.16-17% improvement in the gross profitability of the manufacturers, which can be a lifeline for the industry struggling with low demand, increased input costs, lower global prices, and resultant thin margins.” Says Dr. Bheda.
About Rajesh Bheda Consulting: Rajesh Bheda Consulting (RBC) is a management consultancy organisation focused on improving the competitiveness of the fashion Industry entities. RBC has been partnering with leading apparel manufacturers, retailers, industry associations, Government departments and UN/ global development agencies with special focus on employment creation, skill development, manufacturing excellence and supply chain collaboration.
