Reversing the $ effect on your profits

RS

Currently the garment industry in India is in a state of shock, the increase in the value of the Rupee has had a really devastating effect on profitability, so what are you going to do about it? Most companies have the potential for efficiency and management improvements to more than compensate for this setback, but of course it involves a great deal of training and hard work to establish the ways to get the necessary results. It should be stated here that it is vital that any move towards this goal must be backed by the top management and it should be understood from the beginning that results will only come after some time and considerable effort, they are not automatic nor are they easily gained. Here are a few ideas to help you to save at least 10%

Can you see? --- Workstudy helps us to see!

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No one taught me how to see! for 20 years I wandered around the factory floor with my eyes unable to focus on what was going on, could obviously see the operation that was being done by the operators but not HOW they were doing it. This is a problem that I am constantly seeing in sewing factories. A good example of this was seen in a factory in Sri Lanka the operator was top stitching around the sleeve and stopping 33 times! The main problem in this is the fact that neither the Supervisor nor the Manager saw this so no corrective action was taken! But the potential for improvement was at least 50%. We have taken many videos that show the potential for huge method improvements varying from 35% to as much as almost 300%, but unless you set up a Workstudy department to do this sort of improvement then you are missing a massive opportunity to improve. It is amazing to realise that no-one in most of the factories is doing this job, we are blindly rushing through our orders with one main concern, and thats delivery, but how we could make the deliveries easier to achieve is not being looked at, I guarantee that at least 50% of the operations is most of the factories in India can be improved and the output increased. The amazing fact that only 4% of the huge garment manufacturing industry is trained, leaving 96% without any training at all. I would ask Are people born with knowledge? of course not, so how in the world do you expect to improve your situation unless training projects are undertaken?

Garment Engineering

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The sample department controls the way that the garment is made, what efforts do you make to ensure that the sample department makes the samples in a Production efficient way? We are seeing huge potential savings by reducing the number of operations required to make the garment and making the garment Production friendly This probably means a completely new approach to new styles and will necessitate the need for the IE department to be involved from the start of the development stage so that from the very beginning the style is created with a view to making it easy to make when the order comes and reducing the work content without changing the aesthetic appeal of the garment. Its not easy, but it could be worth a lot of money to you!

Supervisor Training

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Good Supervision without properly constructed supervisory training? is this possible? Have you taken the time to work out what the duties of a supervisor should be, if you were to do this you would be amazed at what is expected? The following is a list of the duties of a supervisor: Productivity --- Quality --- Line balancing Discipline Housekeeping Safety Smooth running of the line Delivery on time Bundle discipline Motivation Repairs Time keeping Line administration Morale of the workers Operation sequences Calling the mechanic Being firm but fair ---- and much more!!! The supervisor directly supervises more people than any other department in the factory and they do it without training --- Are we mad?? If you want to improve productivity then Train them!

Monitoring the workforce

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Are you aware of your efficiency? You do of course understand that without information their can be no management, So do you know what your efficiency is? Are you monitoring the efficiency and Work in progress in your factory? If not, how can you possibly set targets to improve? If you dont know where you are how can you establish where you want to be? And HOW CAN YOU PLAN? Production planning If you know your efficiency and your absenteeism then its possible to establish your capacity and plan your workload to fill that capacity and then you will be able to deliver your orders on time, but if you dont know your capacity how can you possibly plan? So, without this information how do you plan? Do you work lots of additional expensive overtime hours to deliver orders? Does this make sense? Have you costed in your overtime labour hours? What is your ratio?

How many helpers are you employing, labour is not cheap in India if you are paying people that you dont need to have in the first place. You calculate the ratio as follows, You need to imagine your operation as a strictly CMT factory

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You should therefore ignore the merchandising people and general office personnel in this calculation since these is generally a central department You should include Cutting room, Finishing, Raw materials stores and the rest of the factory staff and the office staff that would be required in a CMT factory You will now take the number of Tailors and establish their relationship to the rest of the staff, for example, if you have 500 tailors and your total staff (as described above) is 1350 people, then your ratio is 1350.- 500 = 850 / 500 = 1 to 1.7, i.e. one tailor to 1.7 others This is far too high, you should be aiming at a target of 1 to 1 or better, so this means that you are possibly overstaffed by as much as 350 people, can you imagine how this could affect your bottom line?

In the cutting room

Well since fabric represents 60-70% of the product cost a 2% saving would give you approx 3% additional profitability, how can this be done? The following are a few suggestions Width measurement Ensuring that the fabric is grouped by width and that markers are made for the various widths End bit control Are you keeping end bits to cover for potential replacement panels? Or are you maximising the number of garments that can be cut from the issued fabric and only replacing panels that can be cut from the small pieces of fabric remaining from each roll which are not big enough to make a garment, if pieces big enough to make a garment are being kept back for panel replacement you are throwing away money.

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Laying up allowances Are you measuring the length of the lay plus laying allowances BEFORE you start laying up, to ensure that the length to be layed is what it is supposed to be Marker making targets Do you give your marker makers a target efficiency to achieve, this of course should be a weighted average for all of the markers in the order and should be given by garment type, records should be kept of achieved marker efficiencies b y garment type and this information used to establish the targets, these of course can only be a guide since there are many reasons why marker efficiency will vary from style to style. Monitoring Fabric suppliers Do you monitor the plus or minus on all rolls of fabric and the amount of fabric that is removed from the rolls because of fabric flaws from all suppliers? The finishing department Being the last link in the value chain many companies overstaff this department excess people are put there in order to make sure that the garments are processed with the minimum of time, again because delivery is the overriding priority. There seems to be no proper monitoring within the department and as long as the garments are packed in record time then all else is forgiven. I have been in factories where the time allowed in this department is almost as much as the time allowed to make the product in the first place, so again there are large areas of potential improvement

Quality

How many garments are being repaired each day? what is your quality documentation like, are you establishing your cost of quality This is another area of potential saving, you need to establish the repair situation within the factory and set up the controls necessary to convert your quality information into a number, and of course this could be a percentage and once you have this number then you need to set about improving it.

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Quality costs! You need to establish how much, you then need to produce a plan that will reduce this cost, please remember. Quality cannot be examined into the garment, it must be BUILT into the product from the beginning.

Your Management

Its a great shame that managers spend so much time chasing orders that they dont have time to organise the basic management functions, so we are using our most experienced and knowledgeable people to do the things a properly organised Production Chaser should be doing, its always a last minute panic to get deliveries completed, how many times have I been told, no cant have a meeting that day, we have shipments to make yet surely if properly organised management could be controlling the function not doing it! Conclusion There are many ways in which you can recover the exchange rate effect on your profit margin, and of course a change in the exchange rate is nothing to do with you, but if you want to continue to be profitable then you have to tackle the problem. I have suggested a few ways in which this can be done, but I would advise you to look at your management structure to make sure that the people you employ have the wherewithal to approach these problems, and if not then perhaps you can

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embark on a structured program to make the points listed above a reality, but you cant do it without setting up the organisation to do it, you need the concept, the people, the understanding of how you can improve and then you can make a plan to get to where you want to be. I have made a few suggestions as to how it can be done, there are many other possibilities, but you need to release your top men from order chasing to start on such a program, and I can tell you that if you structure it properly 10% improvement should be easily possible for many of you who read this, provided of course that you are totally committed to it.

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