The 6th international conference on Apparel and Home Textiles ICAHT-10 themed 'The DIFFERENTIATING EDGE.' held under the aegis of Okhla Garment and Textiles Cluster (OGTC) concluded successfully on Saturday 25th September 2010, with the intent of managing better - people, processes and technology to aid the progress of Indian garment and textile industries.
The conference was attended by a total of 373 delegates consisting of 50 Entrepreneurs, 207 Industry professionals, 20 consultants, 39 academicians, 9 industry associations, 35 students, 5 from press and 24 others'.
With more than 22 diverse and interesting papers presented by speakers from the industry over a period of two days, both from within the country and around the world was the true converge of many intellectual minds on the common platform of ICAHT 10.
The annual event is getting bigger every year with many leading exporters taking a day off from work to absorb and share ideas. No doubt the key theme of the conference 'The DIFFERENTIATING EDGE' was the nodal point around which most presentations were made. The conference enriched one and all with valuable and thought provoking ideas. The lectures were delivered on diverse areas ranging from management interventions to mantra for sustained competitiveness and the participants were actively involved in the discussions and many interesting day-to-day issues were openly debated at the forum.
The tone of the event was set with the inaugural session where in AEPC Chairman Premal Udai emphasized the importance of sharing information and discussing bottlenecks for creating the right strategy to overcome problems that strength growth "OGTC has been doing a commendable job in collaborative efforts to support exporters and it is time that the concept is taken forward for large gains in different production hubs" he said. Udani also expressed over the current volatility of cotton prices and asked the industry players present to move up the value chain to counter the situation.
The Chief Guest at the event was Mr. Uday Kumar Varma, IAS Secretary, Ministry of MSME
President of OGTC PMS Uppal said that Industry has been through a very difficult time but with collaborative effort, members of OGTC have been able to withstand the downturn. R.C. Kesar, Director General OGTC, while addressing the gathering laid focus on the issues of sustainability as a differentiating edge. "The OGTC is working towards building ethical business practice and CSR is moving beyond the factories, "he said. The commitment of the cluster is the reduction of 2000 tonnes of carbon equivalent in the next three years. The forum also felicitated RCM Reddy, MD and CEO, IL & FS education & Technology Services and Cluster Development Initiatives with OGTC Path Breaker award - 2010 for spearheading the development of cluster for SMEs on PPP basis emphasing importance of managing the '4 ms' of Manpower, Machinery, Materials and Methods to improve the effectiveness and profitability of production units.
Specific case studies were also presented during workshops where it was highlighted that OGTC member companies which have taken up skill development initiatives on Lean Management, Quality, Productivity, HR, Cutting Room etc. have gained substantially in terms of productivity, quality and cost reduction above all staff motivation.
The conference was structured to have a mix of speakers from industry, Academics and Consultants in the areas of Management, Marketing, Manufacturing and related miscellaneous areas.
The session's chairmen and invited speakers were from diverse fields.
Ms Shazia Amanat and Ms Nupur Kumar - Sourcing & Procurement from organized & disintegrated supply chain, planning, inventory management etc.
The Indian National Textile policy visualised to Achieve the target of textile and apparel exports from the present level of US $ 11 billion to US $ 50 billion by 2010 of which the share of garments will be US $ 25 billion.
Compared to the expectation/potential/target of US $ 25 billion Indian apparel exports are hovering between US $ 9 billion to 10 billion which means that we have not only lost potential of US$ 15 bl. but also let other competing countries surpass us by our inaction and apathy.
Whereas the Textile demand has stabilised in international market and many new buyers are also pouring in due to the situation in China and the world trade is continuing to grow but Indian apparel exports are declining. For the first six months of the current financial year, India's overall exports have declined by approx. 8% over last year.
Technology as partners of Change
The smart use of technology was another interesting direction that emerged with Paul Bowes, in one of the session talking about the importance of implementing PDM/PLM in their companies to manage information for effective supply chain collaboration. "PLM has become critical to effectively manage the garment chain from product development to shipment, as apparel retailers are increasingly using time as a differentiating edge in the high street battle for shoppers' money," said Bowes. He also highlighted that the PLM is in line with the concept of lean as all 'unessential processes are removed and only productive actions are taken to achieve deadlines.
Collaborative Approach to long-term goals
The importance of collaborative growth and Rajesh Bheda, Principal & CEO Rajesh Bheda Consulting underlined the dimensions of such efforts, where in he talked of not only collaborative efforts between suppliers but also among the supplier-buyer relationship.
"What is required is a collaborative approach for improving competitiveness of supply chain where apparel brands, sourcing firms and apparel manufactures work together for a common goal of overall performance improvement," argued Bheda. Until and unless buyers do not commit to engage suppliers in long-term collaboration, they cannot expect supplier participation in improvement process as the simple but logical philosophy.
Indeed, it is with this openness that Ranjiv Kapur, President Orient Craft talked about the efforts that OC has made to identify and control wastages. "Waste management is all about evaluating attributes that erode profits and improvising upon them to actually increase profits," he said. Wastages according to Ranjiv could be in any form from resource wastage to manpower wastage.
People as Drivers of Growth
Great stress was laid upon the fact that 'people' and not systems determine the success of a company. "You need to grow people,' said Charles Dagher, CEO Dagher Consulting Group, based in Sri Lanka. He highlighted that there was a need to train people to support systems by engaging them in the process because unless people understood and worked with the systems, just putting systems in place was futile. Effective labor utilization with a balance on time and skill is the right approach, as it would maximize working time on value added activities to achieve both quality and estimated cost. "The growth of a company depends on the culture that the company imbibes and effective leadership is the key," he said.
Since lean is all about saving resources, it was emphatically pointed out by Paul F Bowes, Managing Project Director, Performance for Business Productivity Services, UK that going green is also a means of going lean because the aim in both cases is to save resources and reduce wastages. In fact, reducing development iterations and creating efficient transitions to manufacturing are of primary importance in the movement toward greater sustainability. "By moving towards green manufacturing a company is saving energy, water and other natural resources that go into the production process, in the evolution the company automatically imbibes the philosophy of lean manufacturing
Today the only constant is change and to stay on the leading edge, it requires skills to master and ride change," said Sundeep Kumar Mehta, HRD advisor and trainer. He accentuated a structured approach to transitioning individuals, teams and organizations from a current state to a desired future state by empowering employees to accept and embrace changes through collective evolution. Employees will accept and foster change only if they understand the big picture that is they are given all relevant information from the management.
In the current complex business environment the solutions of yesterday are often not the solutions for today's issues and they even tend to become today's problems," he said. The smart use of technology was another interesting direction that emerged with Paul F Bowes, in one of the sessions talking about the importance of implementing PDM/PLM in their companies to manage information for effective supply chain collaboration
What is required is a collaborative approach for improving competitiveness of supply chain where apparel brands, sourcing firma and apparel manufactures work together for a common goal of overall performance improvement," argued Bheda. Until and unless buyers do not commit to engage suppliers in long term collaboration, they cannot expect supplier participation in improvement process is the simple but logical philosophy. collaborative approach
The reasons may be complex but the glaring one is still not being attended. India's Exports are unduly weighted towards raw material . This is resulting in value leakage i.e. the missed opportunity of value that could have been realised by exporting the finished product rather then raw material.
The industry is reeling under unprecedented price rise of its basic raw materials raw cotton/ cotton yarns/ fabrics. A contraction of exports means loss of jobs. By an estimate over a million jobs have already been lost where actually there should have millions new jobs created. More will follow if urgent corrective steps are not taken."
The appreciating Rupee is making India's exports uncompetitive vis a vis other competing countries.
China is way head from other players and the real competition is from countries such as Bangladesh, Vietnam, Indonesia, Cambodia, Sri Lanka and many of them have either surpassed or poised to surpass India's Exports.
The SME's by and large are owner driven companies. It is high time that managements start professionalising the companies with adequate HR.
Cost of Inaction
The cost of inaction is very high. A 350 sewing machine factory could be losing about Rs. 1,00,00,000 ( Ten Million ) per annum (conservative estimate) as a result of not acting on the labour productivity and non quality issues alone.
Technological advancements is seen by industry trade groups as the key to increased competitiveness in the global marketplace
Building the small biz brand - "Can I be Brand for a Brand ". The evolution of Indian Fashion industry from a production base to design hub needs design technology - management synergies. It is often said that it is not what you sell that matters, but how you sell that matters. Equally important is who sells it.
Global Hyper competition & Its Impact
The apparel market has undergone dramatic transformations over the past four decades, both in terms of the size and scope of its manufacturing base and in the technologies used to move the industry forward. Yet even more profound changes have occurred in the expectations of the consumers who sustain this massive and ever-expanding industry.
Exporters are a distressed lot .The Economic Turmoil changed the business for them completely. Small and medium sized exporters had the toughest run amongst rising defaults by international buyers and exporters with substantial exposure to American & European Buyers were worst hit. A number of non payments have been reported.
Tight Money Conditions
Clean Development Mechanism
The issue of CDM has assumed high priorities as large buyers are planning to become Carbon neutral in the next couple of years. Government, retailers and consumers need to respond strongly to the reality of climate change. All over the world regulation is being implemented that will require companies to calculate and reduce their greenhouse gas (GHG) emissions,
Non-Tariff barriers / Non-Transparent barriers
OGTC is a successful experiment in demonstrating that cooperation coordination even amongst competitors can bring in sustainable improvement in skill matrix of each company. In this group members share the good practices of not only of manufacturing but also of ethical industrial practices corporate social responsibility, initiatives towards environmental obligations etc.
Members pool their resources to hire the best available consultants in each and every sphere for optimal performances. This healthy competition where the facilities of each member are open to other to learn the levels achieved in skill development initiatives.
* The agenda to sustain the momentum for the apparel industry, particularly in India, would be to push for the development of an export and domestic apparel industry in an integrated fashion. The nascent stage of the apparel industry requires an integrated apparel 'hubs' or 'valleys' where industry, R&D, government, researchers and not-for profit organisations can come together to not only address the triumvirate of capex costs, efficiency and technology, but also provide a systemic platform for 'breeding' R&D efforts in terms of incremental technology improvements.
For Policy Makers ( Government's role to improve international competitiveness )
* There is an urgent need for improving export infrastructure, lowering transaction costs and neutralising the impact of direct and indirect taxes
* There is an urgent need to develop new markets and garment industry specific assistance is extremely critical
* It is estimated that in totality Indian goods are more than 20 % costlier than some of the competing countries like China, Bangla Desh, Vietnam, Cambodia etc.
* Studies have corroborated that a significant proportion of Indian exports are affected by non-tariff barriers/ non-transparent called NTBs. There are moves in some developed countries to bring in import restrictions on non-trade issues such as animal welfare, labour norms and climate issues.
To deal with our trading partners on an equal footing and force them to concede bilateral concessions, we need to create our own mandatory standards and testing requirements
* Government needs to have unity of thought to address the issues of raw material costs , sectorial discrimination, interest burden etc. A mechanism needs to be evolved to compensate the exporters for duties and for deficiencies in infrastructure
* Encourage R&D spending (e.g. through tax breaks)
* Improve the skills base
* Improve the economic infrastructure
* Promote competition between firms
* Operate macro-economic policies favourable to business expansion
* Reduce interest rates to stimulate investment
* Reduce tax rates to stimulate enterprise, effort and investment
* Deregulation to promote competition
* Reduce bureaucracy
* Encourage sharing of ideas and best practice
* Reduce protectionist barriers to stimulate competition
* Encourage investment in human capital
Study NTBs & Address them
One important shortfall in industry has been that there is no cohesive study. It is important for various products within the textiles sector to jointly study the NBTs faced by Indian exporters. This will help address the issues better. The response to the NTBs could be a mix of government policy and industry initiative. Having a centralized data base of NTBs will also help in separating easier markets from the more difficult ones.
Study the opportunities available in the FTAs
It is important for industry especially, the small and medium companies to understand the new opportunities that are arising out of the new FTAs that are being negotiated or have been negotiated. It is important for industry to note that the latest FTA for the textile industry will be with ASEAN which is expected to come into effect from January 2010.
Multiple Buyer Compliance Inspections
The system of buyer specific compliance inspections is an unnecessary time consuming and wasteful activity. Infact efforts should be made for a compliance code which should be acceptable to all the buyers
Value chains across FTA partners. Is it possible to build a value chain, for instance, with Indonesia in the area of textiles and clothing? If possible then it will provide new opportunities for the industry in global markets.
India: Losing out due to limited preferential access
* One of the key reasons behind loss of competitiveness of textile exports from India (apart from other factors) is the absence of effective preferential access as compared to the excellent market access enjoyed by other competing countries.
* Considering the fact that the T&C export sector in India operates at a thin margin of around 5-6%, even a difference of 3-5% in the tariffs (on account of preferential treatment ) is a huge determent in global competition matrix.
* The industry needs serious efforts to get into new product lines.
* Build Capacity & Competitiveness through Technology Up-Gradation, Productivity Enhancement, Cost Control, Developing Marketing Net-Work etc.
* The Industry today has to move from simple price competitiveness to comprehensively better value propositions.
* Lead the industry to acquire a respectable status in the Global Arena .
* Upgrade skills &employability of workers.
* Improve social well being
* Enhance environmental upkeep
* Have sustainable economic outcome
Must understand the global consumer trends and globalization effect and how it affects the work methodology of the textile industries
* Marginalization of product mix.
* Compliance: a weakness that can turn into a threat.
* Competitive value-addition capability.
* Make it easy for the buyers to do the business and difficult to shift to new supply bases.
Businesses are beginning to take action to green their products and reduce emissions resulting from the manufacturing, distribution, use and disposal of those products.
Consumers are now very receptive to a line of apparel which helps them contribute to the environment in a small way. The business community is starting to realise that taking action on climate change can help them gain credibility, enhance their brand, show leadership in their industry as well as bolster sales and customer loyalty. To get that credibility you need to talk about the reduction actions you have taken
In order to move forward we must shift from functional management to Value Thinking This can, and should, be applied all the time, not just in formal studies and workshops. The industry should start considering value thinking as a special case of decision making and thereby, open up the possibilities for including all appropriate tools with the proviso that it is impossible to plan successfully to achieve value without taking into account uncertainty.
Today, the textiles and apparel market is increasingly global operating in a highly competitive market, requiring specialisation and targeting market niches. More significant is the array of new production and control technologies, controlled through a "quick response" network that effectively reduce the distance between producers and retailers.
Increasing role of software was well predicted in virtual fit or E-fit of garments enabling quickening of product development and sample approval process in garment manufacturing. Apart from reducing the process lead time virtual fit also enables reducing number of alterations thus reducing associated cost.
Seamless apparel is already in and now it is the turn of thread less seam.
While Nanotechnology application in textile material is already taking the world by storm, surprisingly its potential application in garment manufacturing machines and accessories are not explored yet.One of the current developmental trends among sewing machine manufacturers is reducing the number of moving mechanical parts to reduce complexities, noiseless but oil less technology.
Fabric is dyed or printed all over width while only around 85% of total area is utilised for garment making. Fabric design repeats are printed first and then matching requirements in a garment leads to wastage of expensive fabrics. Integrated Digital Fabric Printer cum Single Ply Cutter can save material energy and time. Once a pattern layout (marker) is being finalised, fabric is being digitally dyed/printed on only pattern component areas, leaving the dead areas (wastage areas) greige.
The garment industry in India as well as other parts of the world is witnessing the most challenging period it has experienced in recent history. However this is the time for apparel firms to have a close look at their operations. Its time to initiate performance improvement programs without losing any more time.
* All round the world cluster initiatives in various forms have been able to address issues of economies of scale, team working and optimisation of resources and helped in uniting the industry and addressing the core issues.
* we need to think of extending the cluster concept where people even though having no physical proximity can join in the South Asian Countries as OGTC members have joined in NCR so that value chain can establish triangular production networks that are sought by retail giants .
* Rationalisation output to get rid of high cost plants
* Relocating to places where labour costs are lower
* Process innovation
* Product innovation
* Incorporating the latest technology into investment
* Sourcing from abroad where appropriate
* Seeking out new market opportunities
* Improving relationships with suppliers and customer
* Aggressively follow concepts of CDM ( Clean Development Mechanism ) across entire value chain and Carbon footprint can be effectively reduced by
* Life cycle assessment (LCA) to accurately determine the current footprint
* Identification of hot spots in terms of energy consumption and associated CO2 emissions
* Usage of renewable energy sources
* Optimization of energy efficiency and thus reducing CO2 and other GHG's emissions contributed by the production processes
* Identification of solutions to neutralize the CO2 emissions that cannot be eliminated by energy saving measures
* Carbon offsetting, investment in projects that aim at reducing CO2 emissions (e.g. tree planting etc.)
COMBATING TRAFFICKING IN WOMEN AND CHILDREN
A conscious and determined initiative by industry, brands, social organizations and Government can be a desired way forward
* Have a proactive dialogue with the Government to identify various policy issues (short term and long term) that need to be addressed in order to stimulate growth of Textile Industry in India.
* Improve the competitiveness of the industry in India and participate in the schemes provided by the Ministry with regard to restructuring, productivity enhancement, increasing exports etc.
* Participate in negotiations with other industry associations (domestically and internationally) to solve issues related to trade and investment in textiles
* Exporters are facing problems in getting payments on time from buyers; the government must look at ways in which they can be provided with credit for a longer period and cheaper rates.
* Insurance companies, which now find insuring export transactions a high risk area, may be incentivised to stand by exporters and banks
* Transaction costs because of deficiency in infrastructure and administration must be reimbursed so that there is pressure on the Govt to improve
* Other countries have increased incentives for their exports. Provide a level playing field
* Incentivize Training
* Adopt scale neutral tax policies
* Refund of State and Central taxes
* Provide practical and comprehensive incentives for CSR & CDM
* India is basically a summer wear garment exporter. For winter wear fabrics Polyester garments play a major part. Indian exports of these garments are at a disadvantage because of import duties imposed in developed countries whereas LCD are able to export duty free. Till this duty is not removed the Govt of India must give an equal amount of subsidy so that there is a level playing field.
* Up-grade and rationlise port infrastructure
* Adopt scale neutral labour policies
* Integrate the various segments of the textiles industry like fibre , yarn, fabric, garment etc into one fold
* Make Provision OF Learners/Trainees in the Textile Industry
* Legislate Incentive oriented and productivity based wage System.
Director General OGTC