StitchWord Editorial IssueJanuary 2014

Right from the start of the year it was obvious that a serious weeding out is happening, separating the men from the boys… those who are doing well are the serious, committed players, who know what they need to do to grow. Their strategies and expansion plans are on course…

Then there are those exporters I who have already started to shift away from the industry, focusing more on real estate and retail segments. These exporters are no longer serious players and we can expect them to fade away with time… There are some who have failed to read the pulse and are confused on what direction to take… They are sitting on the fringes waiting to be bailed out.

Significantly, over the year Shahi, Matrix, Shivalik, Richa, SPJ Group, all big exporters by Indian standards have gone in for additional capacities; few companies from Bangalore like Voltas Fashions, Four Creations, Sheen Apparels and Snow White and even ITS Creations and Parmeshwar Fashions from Mumbai are also going in for new units or taking on expansions in their existing unit. SM Exports, New Delhi are reportedly jacking up capacities in a big way. Many smaller companies in Jaipur and Delhi-NCR too are now going ahead with investments put on hold for the last few years. 

Also interesting is the fact that a lot of investment is going in to bring processes which were earlier being outsourced, in-house from embroidery to printing.

The confidence of these companies that the future is definitely bright has been justified by many events that have turned the tables in favour of the Indian garment Industry from the softening of the Indian currency, making it very competitive to the Chinese labour conundrum and growing disinterest in Bangladesh due to political and labour unrest, as also safety issues…

Those who had not foreseen the turning point were jolted to wake up from a slumbering pace to fast build up capacities, sensing ‘big’ business coming India’s way.

A survey by StitchWorld involving major technology providers shows that around one lakh machines have been supplied/are to be supplied over a period of one year from January to December 2013. Taking averages in production and UVR, based on past statistics, it becomes obvious that the total exports from India should be around US $ 15.5 billion in calendar year 2013…The real gain once the machines are installed and running to capacity should be around US $ 17.5 billion by the end of 2014… Huge strides no doubt for an industry which has been hovering around US $ 12 -13 billion for the last few years…!

No doubt, the confidence level of the industry is high…, in fact some mega projects that have been long pending are expected to be finalized by the first quarter of 2014, after which the growth could be really steep; importantly many of these projects are from upstarts and not just the growth driver companies.

Keeping one’s niche at its core, for a fruitful 2013

A Happy & Prosperous New Year to all our Readers and Contributors! We would certainly like to forget 2012 with the hope that 2013 would be good since after many months of twists and turns, there are finally indications of an improved economic health this year both in the US and the EU…

But more than that it would be our internal working culture and developed skills; entrepreneurial, managerial and financial that would impact our position in the world market.

Over the entire last year StitchWorld kept pace with companies implementing Lean processes, working hard to improve worker efficiency and productivity to stay in competition.

Today, however the question is, are they justified… when the issue is timely deliveries and the constraint is financial or an erratic supply chain or poor material resource planning? How could the increase in worker efficiency or productivity help?

Be it known that, Bangladesh, Sri Lanka, China or Vietnam are not in competition with India… we have our own niche and the constraint is not the shop floor… it is in the pre-production stage with all the channel partners to be blamed and to some extent the Government for its policies.

We have one of the highest UVRs among exporting countries, not because we are expensive, but because we have a niche product for which buyers pay… we should stick to our core strength and grow on a strategy built around that core.

This year a lot of our articles will be focused on backward planning and how to excel in small quantities. In the year gone by, many of our articles under 'Best of 2012' fell under four broad categories – Best Practices, Management Concepts, Product Focus and Technology Reviews. While the intention is the same, this year the micro focus under each will be slightly different.

In this first issue of the year, StitchWorld presents synopses of some of the most appreciated articles under these categories that readers voted for. We are encouraged by the responses and always welcome constructive feedback.

Another very interesting article and a new product category for the readers of StitchWorld in the current issue is a rundown on the fast growing orthopaedic aids market, highlighting one of the most successful manufacturers in the category – Mohali based Tynor Orthotics, which is producing a total of 2,50,000 units of orthopaedic aids per month. The article is an example of how success comes to those who have the courage to venture into niche products/markets. Going forward this should be the focus for many progressive companies.

The future is for the optimist

Amazing, how time flies… and before we know the year has gone by… when we look back, we invariably try to recall all the good things that happened in the year that has just ended. And to be honest, I think all of us would like to forget the passing year with a hope that the coming New Year 2013 would be a great year…

The hope is based not only on wishful thinking, but on some positive indicators… Firstly, of course is that the situation cannot get worse than what it is at present. Secondly, the US retailers have shown good results in the third quarter hinting at a pickup in shopper sentiments and even though the EU is hit by recession, many of the big European retailers and brands have shown growth.

The industry is at an all time low but not all is lost, exports to non-traditional markets has increased 4% since April and the FTA with Europe is just around the corner. It is heartening to see that many exporters are going ahead with growth plans and there is undercurrent of confidence that 2013 should be a better year… the future is always with the optimist!

In the year 2012, StitchWorld focussed on many new sewn products categories different from mainstream apparels such as footballs. Not that we ignored the potential apparel categories, like the exhaustive cover story on bra manufacturing in our June issue. All around the year we visited many factories and bought to you the best practices followed in companies like Madura, Vardhaman, SKNL. We even went on to analyze and explore the best practices in the manufacturing facilities of designers and haute couture manufacturers and presented them in our articles with suggestions for technical improvement from our experts.

In this last issue of the year we carry forward the tradition with a detailed run down on best manufacturing practices by Bangalore based Radhamani Exports, which is doing multiple styles in varying quantities at one time with great success. A review on flexible manufacturing attempts to highlight sewing automates for factories looking at multi-product, multi-process solutions. In an in-depth interview with Anil Anand, MD, HCA, whose company goes back more than 100 years, SW traces the history and evolution of the technology suppliers in India.

I would personally like to thank all our StitchWorld supporters on behalf of the team and take the opportunity to assure them that the dedication with which we served them last year will continue unabated… our commitment to bring to you new opportunities is undying…

Along with design and fit, quality and technique are also eually important for our indian fashion designers.

Around 15 years back, I was part of a meet that deliberated on the way forward for the Indian designers. In those days, today’s known designers were shy of sharing their turnovers, and while the estimated total turnover of the designers was around Rs. 50 crore, the free media spent on them was around Rs. 400 crore. Has the situation changed since that time…!
No doubt the designers have grown 10 times but that is still due to the couture collections. Collaborations among the members of the supply chain have still not been formed to allow the designers free rein to creativity. They are still managing the front end as well as the back end – that is, retail and manufacturing. Internationally all designers have grown big because of the growth of their prêt as well as bridge lines and for that they have partnered with companies that understand the market and manufacturing, leaving them to concentrate only on their creative self.
More than the design it is the fit and the quality of stitching which is important in the prêt and bridge lines… do the designers understand what constitutes quality in a garment and the concept of a 'first time right’ manufacturing… you cannot undertake to do customized fit in the prêt and bridge collections.
To grow in the true sense, it is important for the fashion designers to understand what quality means and what kind of technologies are available to make the garment a perfect fit the first time… StitchWorld under a new series ‘Quality Couture’ hobnobs with designers in an attempt to understand their current manufacturing setup and suggest improvement to achieve desired results.
We start this series with a market leader – Tarun Tahiliani. The SW team visited Tarun’s unit in Gurgaon to understand his concept of quality and present his best practices to the upcoming designers and the supply chain partners. We invite the design fraternity to come forward to be featured under this series and have their units assessed by our expert technical team for improvement.
This issue closes the five part series by Mausmi Ambastha on Performance Measurement Tools with 'Inventory Management' in focus. If any of our readers want the complete series in a book format, they may contact our office; the book is reasonably priced. We also carry a detailed feature on Button Holing and Button Sewing machines, which is a complete guide on feature-rich technology that improve the quality and reduce the cycle time of button holing and sewing.

Production shifting towards the WEST...

I love visiting trade fairs in my line of work. It’s a place to meet friends and well wishers, develop new contacts, exchange views with industry informed, get new leads and it is also a place to make interesting observations…

This time around too, JIAM threw a googly that ‘German retailers are actively looking to shift production back to their country’. I have not deliberated on which product categories, but it was said in so many words by three sewing machine suppliers in separate conversations… that got me thinking. I recalled the recent success of the ‘Made in USA’ pavilion at Magic, Las Vegas with over 50 local manufacturers showcasing their products. It was the most visited area at the Source Zone and all major retailers from JCPenney to Target supported the concept, even the Government pitched its support.

Only recently I also came across a letter of a famous designer brand sourcing from India addressed to its equally reputed Indian buying office with a stern warning to improve on late deliveries and quality, with a clear hint that now onwards the brand intended placing fewer orders with the buying agent as they were looking to move back production to Europe… It made me think whether this is actually a good idea for the retailers, considering that production cost are much higher in the EU…

The realities are indeed interesting… fashion is changing very fast and it is increasingly becoming important for retailers to buy as close to the season as possible; buying locally takes just 6 weeks as against the average 16 weeks lead time from India. Again, sourcing locally would mean selling at original mark-ups with little need for markdowns, while holding very little or no inventory, both of which brings in greater profits.

That’s not all, the retailers also save on custom duties payable and commissions paid to buying agents. Besides this, they also don’t have to pay tax for any of the shipments that move in and out of the country…

Assuming that all these advantages surpass the ‘higher’ cost of production, which was the original reason for the shift in production to Asian countries and where now the cost of labour, infrastructure and logistics is on the rise… it is time for the industry to introspect! There are a lot of ‘ifs’ and ‘buts’ at this point of time and maybe the concept is still too ahead of time, but it is something that the industry needs to deliberate upon.

Why the international single brand retailers, especially the 'fashion brands', would have an objection to the Government stipulation of 30% mandatory sourcing from local SMEs in the case of 100% foreign investment, is beyond me… when in fact many of these retailers are already sourcing a chunk of their products from Indian manufacturers.

Take the case of Gap, which is doing around US $ 1 billion buying from India, which would be between 20 to 25% of its total sourcing… why would then it be difficult for them to increase the buying and achieve the target? Even other single brand retailers like Zara, H&M, M&S, Esprit and many others are actively sourcing from India in huge quantities.

Of course, it would help retailers if their buying for both their international operations and Indian operations is clubbed together to comply with the 30% mandatory local sourcing norm as set by the Government.

This will have some distinct advantages for the country besides easing the pressure on the retailers… the most obvious will mean more FDI in the country, which will help in achieving the target of 25% share of manufacturing in the GDP by the year 2022 and simultaneously generate better employment opportunities since the garment industry is labour intensive, in addition it will also mean greater opportunity for the exporters already working with the brands.

Since these retailers would be complying with the international norms of quality and compliances, both social and environmental, it would help the local industry to mature from being an unorganized setup to an organized industry. It will also help them scale up their operations, build operational efficiencies and improve capital and human productivity.

Madura is a true benchmark company and strives for excellence in all its endeavours… A visit to the suit manufacturing unit of the company was an eye opener for the StitchWorld team. In this issue we highlight its manufacturing and management practices that set it apart.

This monthly also previews the technology that will be on display at the upcoming JIAM fair. The focus is on automated machines to cater to the mature market where labour saving is a priority, not that these technologies are not popular in developing economies.

With most consultants in the market claiming to be Lean experts… choosing the right consultant is almost as critical as implementing Lean for success. The article “How to Choose a Lean Consultant?” has some useful tips from Lean professionals in the field.

Inclusive Growth

“Technology is passé, usher in people”… When I say this I don’t mean to undermine the importance of technology in the growth of a company, but the phase when the concentration of the industry was on upgradation and automation is over and the new decade belongs to its ‘people’.

The expectation that the technology would bring in more productivity and improve bottomlines has now seen shift in the focus to motivated and trained employees or employables to be the drivers for better and perpetual growth. With social responsibility and ethical manufacturing becoming the mandate for growth at the buyers end, the industry has taken the cue.

Not only that, since poverty alleviation is a major component of national policy agenda, one of the means to achieving this is through inclusive growth, also termed as ‘shared growth’ and ‘pro-poor growth’ involving the worker. Training and then making them employable through policies like NREGA or through PPP route is high on the Government priority list.

Besides, management concepts like Kaizen, TQM, TPM, SMED, Takt Time, Cellular Manufacturing, Lean, are all now so commonly used and practiced in the industry… and what is the common factor in each of these concepts are the motivated and trained workers.

Another aspect to inclusive growth is taking factories to where the workers live rather than waiting for them to come to the metropolitans. After all, employable workers are happy at home rather than living in dingy dormitories away from their families. But this is easier said than done and there are many challenges and practical hurdles to cross before the transit can happen on a large scale… though few companies have started to test the potential, which is a good sign.

As we embark on a more meaningful journey not only for the New Year but for the new decade, I look forward to seeing ‘inclusive growth’ a part of the DNA of a company just like technology and compliance have become.

Defining the critical influences of 2010 was an interesting exercise as it only reinforced my belief that sustainability in all its aspects is important – social, environment and economical. Even technology providers are striving to offer more ecological and user-friendly machines. The three R’s of sustainability have not yet caught the attention of manufacturing industry yet, hopefully the concept of Reduce, Reuse and Recycle will set a new trend among industry and buyers will find another new parameters to benchmark! And who can shun the reality that the ultimate aim of every company is to make profits… only the route has been re-defined.