Turel Classic show, GTE and ITMA-Asia + CITME…

I have attended three fairs in the last month… Besides all of them showing a good visitor turnout and continuing with the discussions on offering sustainable products, what struck me was that all the machine manufacturers and suppliers presented their automated solutions. Probably, the enhanced business confidence followed by the improvement in order position has brightened the mood of the industry. Even the Government policies and schemes are working out to be a breather for large investors, making the cost of ownership lighter.
We can of course not neglect the impact of labour shortage, which is slowly but surely pushing manufacturers to opt for automation as an alternate… Another emphasis area for the technology providers was their claim to having machines with lowest running cost or operating cost. The operating cost is no doubt the critical factor in any buying decision and ideally it would include maintenance, support infrastructure and consumables, apart from energy and labour.
Among the operating cost, the investors are more concerned about cost of downtime (equivalent to loss of production), cost of repair (spare part and labour cost, which sometimes involves expert flying in from other countries), and cost of maintenance (Annual Maintenance Contracts (AMC) and machine engineers salary). For India, with poor spare part availability and lack of trained engineers, these factors are looming large during any investment decision…

ITMA-ASIA+CITME 2010 : Knitting on the focus

That the knit industry has a great future can be assessed from the fact that in the first quarter of 2010, exports of men’s cotton T-shirts alone has grown 10.37% in
value and 32.16% in volume from India while total US import in the same category has grown by 11.13% in value and 13.85% in volumes. The potential for growth is
immense as casual wear dominates trends globally.

While Tirupur and Ludhiana remain the major hubs in India, Delhi-NCR, particularly Noida, is fast developing as a knitting hub with many players investing in circular
knitting technology. The white paper on Bangalore brought out by Apparel Online also indicates that many big players in the city are also looking to add knitting
capacities. Even the upcoming Apparel Park in the Special Economic Zone in Visakhapatnam by Brandix has knitwear thrust to it.

I was recently in China to attend the ITMA ASIA-CITME 2010 show and knitting technology was in focus. Very much on expected lines the visitors came in large numbers,
much better than the turnout of last show, but still there was not anything to excite the participants…maybe the Chinese companies are holding back due to
uncertainties brought on by increasing wages, shortage of labour and un-pegging of the currency valuation.

With time, these shows have also become more of a manufacturer and supplier or agent meeting ground where participants consolidate or renew contracts, renegotiate
supplier cuts and understand the new and existing markets from the feedback of their agents. Some innovative companies also take this opportunity to understand the
market needs for future R&D.

Not many companies brought in any new technology this time; maybe they are thinking and waiting for ITMA-Barcelona. The companies that impressed me the most were
CIXING and PAILUNG both presented new solutions with CIXING entering into seamless in a major way and PAILUNG introducing its new flat knit line.

Managing Skills and Knowledge

Investing in upgrading knowledge and skill levels of people in the apparel industry has become a major agenda for both exporters and buyers. The growth of this industry is linked to how much progress can be made in better utilization of resources, both human and infrastructure for better productivity and efficiency, as the global apparel industry becomes highly competitive and price-driven.

In this scenario, skill development and knowledge management have become critical for sustainable growth. While skill development is more related to operator and supervisory level employees, knowledge management is a powerful tool to sharpen skills of middle and senior management. Information sharing of experiences and solutions to various problems that one faces in day-to-day operations is becoming a norm, with companies using different ways of communicating the same from IT-enabled modules to classroom training.

Even the StitchWorld magazine is a knowledge management tool, but with a much wider spread. It may not be company specific, as it caters to a wider segment of the industry, but it is certainly directional with a lot many case studies in different areas which one can mine for specific use. Many critical directions exemplified with case studies have been discussed in fine details. It is for the readers to apply the knowledge for optimal benefit.

We have taken our role as knowledge providers very seriously and in every issue the effort is to provide an insight into information that can be used. It gives us great satisfaction when industry tells us how useful the various articles have been and I have often heard that companies are tearing out relevant pages and handing over to production/management teams for implementation.

Deepak Mohindra
Editor-in-Chief

Skill Management

Few days back, I put on the radio and heard that one can acquire the services of a plumber, electrician through Employment Exchange and it got me thinking why not for a sewing operator? Skill management has always challenged industries and garment being a labour-intensive one, such challenges have always been feared yet faced.

What is skill management?
Skill management is the practice of understanding the skills required in any role and developing and deploying people to the roles matching their skill-set. Skill fitment is one of the key challenges faced by any organization.

To tackle skill management, any organization needs to clearly understand the skill level of its people. But this is highly challenging task considering our industry works predominantly with migratory and contract labour because of the seasonal nature of the business. Each day a production manager is faced with a task to identify the skill level of each operator and allocating operations accordingly.

The needs of our industry are very specific; performance is expected from shop floor employees (operators/helpers, etc.) and we have to determine the skill development programme through a matrix to monitor the level of individual skill profile and plan for continuous improvement.
Employment Exchange, which is actively marketing its services, registers the skill level of various artisans, then why not registration and deployment of sewing operators for the garment industry?

Where does the industry go from here?

Wage hike, labour shortage because of alternate and better opportunities elsewhere and skilling the unskilled are now the new constraints for the garment industry in addition to the ones which are already chokers to growth – recessionary trends, low prices, the hardening rupee and reducing incentives… Where does the industry go from here… I think Bihar, manufacturing polyester based daily wear such as shirts, trousers, A-line skirts or improving productivity are the three options!
All three are not easy solutions, they require full use of resources and commitment… which is a better option and should be taken up first is difficult to decide…

BIHAR is the growth story… if one has to relocate factories then why not Bihar… the law and order situation is as good or as bad as any other state of the country, labour is not an issue since most of the operators in the north are from Bihar and the chances of wage increase is still a far fetched dream. Further, the Bihar Government is developing an apparel park near Patna at Bihta, the land prices of which are rock bottom… good enough reasons to shift.

If we wish to grow, it is important that we work with daily wear products that are mass produced and mainly in polyester for easy maintenance… As of today India has a negligible presence in the global polyester clothing chain and hence there is tremendous scope for growth… In the US, India’s share in cotton products is 6.17%, while in polyester based garments it is barely 1.59%. The question is do we have the right technological expertise and scientific skills to handle these products. I think the same can be developed… Did we have the skills to repair a a technologically-advanced Maruti in the times of Fiats and Ambassadors… But Maruti overcame the limitation by developing and training the mechanics, providing them with proper scientific tools… the success that it got is history.

Lastly, it has been suggested many a times that StitchWorld should conduct a study of factories to review various processes and systems and publish the findings as a wake up call… but I firmly believe that the industry already knows its shortcomings, they do not need a study to drive home the point… what it does need is an honest acceptance of the areas that need improvement and self retrospection on how to achieve higher productivities.

Deepak Mohindra
Editor-in-Chief

Exporters Pragmatic of Hike in Minimum Wages in Delhi; UP and Haryana to Follow Competitiveness to be hit by 5%

The Government of Delhi has agreed upon giving a 33% hike in minimum wages for workers in the city with effect from February 1, 2010. This move will surely bring smiles all around… not only for the workers but also for the NGO bodies working to get ‘living wages’ for garment workers, which is being mooted at Rs. 6,000 per month. Whereas the Government of Delhi has initiated the increase of wages keeping in mind inflation, the positive outcome for the export community is that India has come across as a concerned country which cares for its workers, unlike many other manufacturing bases in the region, which should translate into more business for the country. It is now for the apparel and textile associations to position India as a compliant, worker-friendly manufacturing base and seek support from retailers and brands that have been promoting the concept of living wages for more orders.

Indeed, the move is a milestone and the industry too has taken the rise in wages positively though there are some concerns which the Government needs to address without diluting the edge that it has created for the apparel export industry. …Deepak Mohindra, Editor-in-Chief
 

With the increase in minimum wages in Delhi, the wages here are now the highest in the country. From immediate reactions it is expected that other States will also follow suit. The hike will take the wages of unskilled workers to at least Rs. 203 per day from the earlier Rs. 163, while for semi-skilled labourers, it will be Rs. 225 per day and for skilled labourers it will be Rs. 248 per day. So on a monthly basis, an unskilled labourer will get Rs. 5,272, a semi-skilled worker in construction will get Rs. 5,850 and a skilled labourer will be entitled to Rs. 6,448 per month. 

No wonder, the garment export industry, though in agreement with the increase in wages is apprehensive of the crippling effect it will have on their overall costings. Further, as the implementation is backdated, there are concerns of meeting price points for orders-in-hand. “The 33% hike in minimum wages is just a basic rise in wages, in manufacturing for export we have further commitments like PF, ESI, etc. which will take the increase in labour cost for us to nearly 50%,” says Praveen Nayyar, MD, Dimple Creations. In an industry where wages to the labour constitute 20% of total cost, a 50% rise in wages will adversely affect total costs by 5%. In today’s market scenario, the margins have squeezed to around 10% and losing 5% in production cost will prove to be heavy on margins. Nayyar however is quick to add, “With the increase in cost of living this was bound to happen, and there is certainly no chance for a roll back in this decision and so, we should now learn to live with it.
”

While most exporters think that increment is a good idea, they feel the Government should also addresses the problems that the exporters face so they do not lose further competitiveness. According to Pali Singh, Owner, Nancy Krafts, “The hike in minimum wages is justified as the consumer cost is going up but the Government should not only look at the problems faced by the poor workers and think that the exporter has got lot of money to vent out. The Government should also look at the problems that exporters face. I am not pointing towards the incentives rather I would like to put forward that the Government should try and eliminate the touts and unions that play a miscreant role in the process of hiring as well as firing labour. The Government should also look at the losses that we exporters face with the strikes that happen every now and then with no prior notice, affecting our business badly. I am completely in favour of increment but only when the system is cleaned up.”

Animesh Saxena, MD, Neetee Clothing, sums up the discussion when he says, “Socially I welcome this step since in today’s cost of living it is just not possible to survive for a family in current minimum wages. We need to provide salary at least to meet basic cost of living. But this increased cost will hit the industry very badly which is already under pressure from high cost due to increased cotton prices. Unfortunately, our industry is an international trade which has competition from other Asian countries which are much more competitive due to lower wages and high productivity. Now the time has come when Government and other stake holders have to seriously consider and work out productivity linked wages. This will be a win-win situation for workers as well as employers.”

Is it justified?

From the time of my association with the industry through Apparel Online and StitchWorld, I have restrained myself from commenting on Government policies whether good or bad. But of late a few comments by our Hon’ble Union Textile Minister Murasoli Maran are really asking to be rebutted. At an open forum recently, he lashed out at India’s textile industrialists for coming to the Government with a “begging bowl” instead of taking steps to innovate. That is taking things too far… especially coming from a minister whose understanding of the industry is about 250 days old.

I have always advocated that the industry needs to look inward to improve its competitiveness… not to look at the Government for crutches but to group together for sustainable growth.

History is witness to the fact that many Textile Ministers have come and gone and not one of them was able to make a significant impact on the industry. This was mainly so because the ministers had little or no real knowledge of the sector and very little political clout to take some hard decisions. However, Maran was different… He is young, educated, liberal in thought and part of the ‘gennow’ group of politician who claim to be providing fresh approach to governance. Also he has a strong political linkage and considerable clout in the Government. No wonder the expectations were higher…

As an elected representative of the people, it is his duty to listen to various demands… agreeing or disagreeing with them is of course his prerogative based on merit. But using derogatory words is certainly uncalled for. The recent budget is ample proof of the apathy towards this industry.