Apparel Outlook

Future Factories
towards manufacturing perfection

Also in this issue

Sourcing Trends and Indices:

India and the World
Developing Skills for
Employment in Apparel Industry

A Quarterly Report by
www.technopak.com

| May 2011

Introduction
Not even a thousand armies can stop an idea whose
time has come...
The Apparel Industry is all set to embark on
the next level of expansion, at a scale that was
visualised but never achieved with the abolition of
quota.
With the exception of an aberration in 2009the year
haunted by global slowdownthe worldwide demand
for apparel products has been consistently on the rise.
As Asian economies expand, the new consumer on the
block sits at the vanguard of a wave that is fuelling this
demand and offering exciting new opportunities for the
apparel industry at-large.
By the year 2020, an opportunity:
of around USD 360-370 Billion is likely to be created
as a result of sustained increase in global demand
to the tune of USD 140 Billion is expected to be
created for exports from developing countries, as
a result of production moving away from Western
countries
The two put together create an additional market
opportunity of approximately USD 500 Billion for
developing countries including India, Bangladesh,
Pakistan, Vietnam, Cambodia, Indonesia, Sri Lanka and
parts of Africa, by 2020!
In addition, Indias high GDP growth has triggered
higher private consumption elicited by higher disposable
incomes. This phenomenon has lent impetus to domestic
retail and consequently, to domestic production. There
is little doubt about the unprecedented boost that
organised retail- expected to grow at the rate of 30%will give to the apparel industry in the future.
India is strategically placed on a growth trajectory in
this scenario. On one hand it gains from proportional
domestic and international demand, and on the other
from the opportunities lost by bigger players such as
China (increasing costs and rising domestic demand may
compel China to cede some export opportunities).

While the stage is being set from the demand side,

Indias success strongly depends on tying up its supply
side so as to not marginalise its position in a fiercely
competitive market.
The industry needs to make a paradigm shift from
conventional manufacturing to a modern one,
encompassing the best practices of people and process
management with high levels of technology utilisation.
Manufacturing perfection achieved through worldclass processes, supported with appropriate and costeffective state-of-the-art technology and delivered
through the right people, is the structure upon which
future factories will be based. Potential opportunities
demand that we create many such factories and upgrade
the existing ones.
Let us get ready for growth armed with competitiveness,
outperformance and sustainability, realised from our
future factories.
Indias USD 70 Billion Textile and Apparel industry
has the potential to grow at 11% CAGR to reach
USD 220 Billion by 2020. The stakes are high and
the industry has to strive smart to make it happen.

This Outlook also covers an analysis of Sourcing

Trends and Indices, and an introduction to SEAM
- a Government of India initiative on bridging the
labour demand-supply gap in apparel manufacturing
through structured training of BPL youth in apparel
manufacturing.

Apparel Outlook

Sourcing Trends
and Indices:
India and the World
Introduction
Global apparel trade witnessed a robust growth over the years: from USD 218 billion in 2000 to USD 376 billion in
2008*. The year 2009 proved to be a dismal, uninspiring year for most stakeholders of the industry due to the global
downturn. Reduced consumer spending resulted in apparel imports dropping sharply by 12% to USD 331 billion. A
great deal of this impact was felt due to reduced business from the United States and the European Union, which
account for more than 70% of total imports of the world. However, the post-recession year 2010 proved to be
promising right from its onset, with increase in imports in US and EU by 13.1% and 4.9%, respectively.

1. Trends in Imports by the US

The year 2010 proved to be a good year for all major garment manufacturing countries supplying to the US, as revealed
by the recently released 2010 US garment import figures. The current years scenario has been the most euphoric for
the industry since 2005 (the quota phase out year).
Countries such as CBI, Mexico, El Salvador and Dominican Republic, have seen a negative growth compared to 2001
levels (Exhibit 1). At the same time, Asian countries such as China, Vietnam, Indonesia, Bangladesh, India, Cambodia,
Pakistan have increased their market share.
* Source: WTO Data

Apparel Outlook

Imports in US in 2001 and 2010

Exhibit 1:

30,000

Value in Million USD

25,000
20,000
15,000
10,000
5,000

2001

Pakistan

El Salvador

Cambodia

Honduras

OECD

India

Mexico

Bangladesh

Indonesia

Vietnam

CAFTA-DR

CBI

ASEAN

China

2010

Source: OTEXA/Technopak Analysis

China continues to hold the largest share, while Indonesia, Vietnam, Bangladesh have overtaken India and arrived as
new sourcing hubs for US buyers. China is the only country which has increased its market share consecutively in the
last 3 years 2008, 2009 and 2010, even though the overall US market decreased in 2008 and 2009, before picking up
again in year 2010.

2.Trends in Imports by the European Union

Year 2010 has been positive for countries that have been exporting to European Union (EU) as it witnessed a robust
4.9% increase in imports. This is a convincing outperformance over the average 2.2% of growth during the last decade.
During the year 2009, imports had dropped by 5.4%.
Value of Imports to EU in million Euros

Exhibit 2:

40000
Value in Million EUR

35000
30000
25000
20000
15000
10000

2001

Malaysia

Thailand

Indonesia

Pakistan

Sri Lanka

Vietnam

Morocco

Tunisia

India

Bangladesh

Turkey

China

5000

2009

Source: OTEXA/Technopak Analysis

Indonesia, Malaysia etc. have seen negative growth compared to 2001 levels. At the same time, China, Turkey, Tunisia,
Morocco, Sri Lanka, Vietnam, Indonesia, Bangladesh, India, etc. have increased their market shares (Exhibit 2).
Intra EU trade still holds the largest share of imports followed by imports from China, Turkey and Bangladesh. China,
Turkey and Bangladesh have witnessed sustained growth in their share (of EU imports) over the years. However, Indias
share in EU imports reduced in 2010, though the same had grown during 2009 - when everyone else was losing.

Apparel Outlook

3. The Global Fashion Industry

The fashion industry is one of the most important sectors of the economy in terms of investment, revenue, trade and
employment generation the world over. The apparel industry is known to have short product life cycles, tremendous
product variety, volatile and unpredictable demand, and long and inflexible supply processes. The industry has been in
a transition over the last twenty years. Some of its major contributors are:
Significant consolidation in retail
Increasing use of electronic commerce in retail
Wholesale trade
Industrialised players such as US, EU and Japan have been the major drivers of demand for global apparel trade.
Therefore, the apparel trade has been very sensitive to the economic conditions of these countries. This was evident in
the downturn of global imports in the year 2009. However, the last few years have seen the emergence of many new
consumption centers in the form of developing countries like China, India and Russia. This rising demand will add
millions of new consumers every year, and may lead to new equations of pricing and sourcing.
Rising input costs in the form of increasing cotton prices and labour costs have created an upward strain on the
garment exporters, forcing them to increase the prices. Cotton prices in recent past have grown from an average of
USD 0.85 / lb to USD 2.29/lb, an increase of around 170% in the last 12 months alone. Similarly, the cost of labour
has gone up significantly throughout the production world. The global garment industrywhich has paid the lowest
wages traditionallyis facing a spike in wages. In Bangladesh, the minimum wages went up by as much as 80% and in
China, Vietnam and India the wages went up by more than 30%.
The garment industry has been typically witnessing a reduction in the FOB value of the product. The FOB prices have
reduced by 24% in last 13 years, while the cost of inputs has only gone up. This disparity in cost and price was partly
negated by an improvement in the operating efficiencies of factories. In the current situation, these prices seem to have
reached a point from where a further decline seems highly unlikely.

4. Indian Apparel Sector Statistically

Indias apparel export has more than doubled in the past decade. In the year 2009, the export figure stood at USD 11.3
Billion, accounting for more than 3% of the worlds apparel exports. Indias position in the world apparel trade in the
years 2001-2010 is illustrated by Exhibit 3:
Indias share in Global Apparel trade

Exhibit 3:

Total World Apparel Trade

(Export- In Billion USD)

Indias Apparel Trade

(Export- In Billion USD)

% Share of India

2001

197

5.04

2.56

2002

201

5.50

2.74

2003

226

5.92

2.62

2005

250

6.41

2.56

2006

274

8.20

2.99

2007

311

9.01

2.90

2008

345

9.34

2.71

2009

362

10.3

2.85

2010

375

11.3

3.01

Source: UN Comtrade

Apparel Outlook

5. The Road Ahead

With challenges being posed constantly, there is a need to continuously evolve. The Indian garment sector must look
into expanding to new markets. Countries of the likes of Australia and Japan have still not been targeted aggressively.
To move ahead, and increase the volume of Indian exports, Indian manufacturing needs to get more advanced
technically. Investing further in automation, engineering, world class manufacturing processes, software for ERP would
be a good bet ahead. Further, the industry needs more vertical integration, which it is slowly and surely attaining, but
the numbers are still on the lower end.
The stage is set for future factories to become an entity of the present!

Apparel Outlook

Future Factories
in India
Perspective
Apparel manufacturing in India, has witnessed turbulent times
in the recent past. The industry has been plagued with issues
of low efficiency, high direct to indirect ratio and rising input
costs. However, in the last two years, the availability of labour
itself has become a significant issue.
The value of the opportunity for apparel manufacturing in
India cannot be underestimated. Positive signals represent this
reality more than ever, such as the domestic market growing
faster than expected, Chinas reluctance to export and the
expected signing of the IndoEU trade treaty.

Manufacturing Excellence is what the aim

should be and therefore, apparel factories have
to be ready for the future.
People need to be considered and utilised as
critical resources for survival and growth.
Processes need to be leaner and more efficient,
effective, productive, sustainable, yet flexible.
Technology, in terms of capital expenditure,
needs to be to the purpose.

However, the industry needs to drastically alter its current state

to take an advantage of this upswing in the macro environment.
It is a clarion call to a comprehensive approach to garment
manufacturingone that takes into account people, processes
and technology. Moving to a lower wage location might not
be the only answer. Instead, it is also about modernising thoughts and ideas, thinking strategically and investing in the
training and development of human resources.

Apparel Outlook

Manufacturing Excellence is what the aim should be and therefore, apparel factories have to be ready for the future.
People need to be considered and utilised as critical resources for survival and growth. Processes need to be leaner
and more efficient, effective, productive, sustainable, yet flexible. Technology, in terms of capital expenditure, needs
to be to the purpose.
Before we define the future factory, we need to understand a few key trends that will define the growth of
the apparel industry
Lowering cost of production not necessarily by relocating to cheaper labour areas, but by improving productivity
Lowering cost of quality it will not just be about producing excellent quality. What about the associated cost?
Labour cost and shortage, leading to unprecedented level of automation
Shorter CTS (Concept to Shelf) time, ensuing pressure on reducing lead times in factories
Modern management and manufacturing techniques to replace outdated processes and thoughts
Emergence of the next generation of professional managers in a largely entrepreneur driven industry
Scale and vision to be much larger than before
Recognition of human resources (workmen, middle management and top management) as a vital ingredient for
success
Corporate Social Responsibility (CSR) to be integrated with long-term business outcomes by major brands and
retailers
Approach for selecting apparel plant locations to undergo a major transformation

Let us put all this in perspective and

take a walk to the factories of our future.
1. The Future Factory
The future factory/enterprise will ensure its sustenance and growth in the global arena, through best practices and
thought leadership. It will be continuously evolving, flexible, cost-effective, resilient and lean. It will create enduring
value for all the stakeholders customers, workers and employees, shareholders, environment and society at large. It
will take cues from the Governments plans and vision and make the best use of funds that are earmarked for the
growth and development of textile and garment industry. It will manifest operational excellence in its pursuit to be
competitive by using its key components the people, the processes and the technology to its best advantage, while
creating sustainable results.
Let us delve into the finer details of a future factory from all the three perspectives people, processes and
technology.

1.1 People
Apparel manufacturing is a labour intensive process. An efficient enterprise cannot be built without a clear and
structured focus on the most critical component The People!
Numerous factories in the present day are manned by unstable and/or sporadic manpower supply, resulting from an
unstructured recruitment policy. Adhoc strategies and a here and now approach look simple prima facie as a cost
optimisation approach, to handle irregular order books and manage seasonality in a few cases. However, a closer look
at the garment factories today clearly articulates the vicious effects of the so-called flexible manpower. The most
prominent setbacks are:

Apparel Outlook

Cost in terms of a hefty amount charged by the contractor as commission from the Principal Employer
A major portion of the directly employed labour is of the migrant kind, leading to absenteeism, attrition and
inconsistency
Ad hoc skill build-up. There is no focus on training and creating a sustained skill base
A casual outlook to the truly compliant code of conduct
What essentially follows is that firstly, the flexibility advantage of lean and peak period is negated due to cost, inconsistency,
absenteeism, attrition and sub-optimal skills, and secondly the ostensible benefits further get discounted in the form
of quality issues, the absence of skill supply at the time of need and the inability to plan for effective utilisation of
resources. Add to this, the intangible disadvantages such as cultural disorientation, compliance manipulation, managerial
attention towards managing crisis instead of managing objectives, dissatisfaction and fatigue. All these factors put
together are capable of causing catastrophic damages to the overall health of the organisation.
Skill availability and its management is the need of the hour. Factories will have to resort to more sustainable and
upgradable recruitment strategy in the form of captive workforces, rural bases and productivity based rewards.
What this means:
Rural Base: Shifting factories to locations with adequate labour supply. Going further, creating newer manufacturing
zones or hubs around labour supply destinations
Captive workforce: Shifting workers to factory locations. Making arrangements for their stay in dormitories, for
example
Labour effectiveness: Making the most effective use of people by continuously upgrading their skills and building
additional remunerations for added competence and skill set
Figure 1:

Worker amenities- glimpses

The key to success will be effective training and then retaining the trained workforce by creating a unique value
which an alternate occupation may not be able to offer. Employee value creation is a dynamic process with its set of
variables that needs to be thoroughly understood and built into the human resource strategy. Some guiding principles
may be:
Understanding local needs the real driver of a person for employment. Creating value for the employee on this
basis
Understanding the regional limitations and building a HR policy that mitigates them
Understanding long term needs and requirements of people and building long term value
Transparency of development and growth and creation of a roadmap for future prosperity
Clear communication of linkages between performance and remunerations, and performance and development
integrity
Correct HR strategies built on correct evaluation of dynamics will not only create a sustainable workforce supply, but
also create the right platform for structured training, skill build-up and management by controlling absenteeism and
attrition.
As we move on to evaluate the importance of processes in apparel manufacturing, it is important to understand the key
role that is played by training of middle management in best practices, industrial engineering and relevant functional
areas specific to an enterprise. A classic discourse between a CEO and a CFO is worth quoting: CFO to CEO: What
if we train and develop our people and they leave the company? CEO to CFO: What if we do not train our people
and they do not leave?

Apparel Outlook

Rightly so, training and exposure of the middle management is

imperative to their appreciating and imbibing the practices and
then applying and building upon the learning to raise the bar of
organisational performance.

CFO to CEO:
What if we train and develop our
people and they leave the company?

1.2 Processes
Operational excellence is a strategic weapon created from
CEO to CFO:
efficient processes, to deliver effective performance through the
What if we do not train our people
right people. Excellent processes require less people, less space,
and they do not leave?
less movement and generate greater output with lesser fatigue.
More importantly, such processes are self maturing requiring
lesser dependence on people. Process excellence helps achieve
extraordinary results from ordinary people. As Mr. Fujio Cho,
former President of Toyota Motors reiterates: At Toyota, we get brilliant results from average people managing a
brilliant process; others get average results from brilliant people managing broken processes. Brilliant processes are
designed and aligned around a companys core objectives and ideally involve a combination of disciplines or tools such
as Industrial Engineering, Lean, Six Sigma, Theory of Constraints and Benchmarking.

1.2.1 Industrial Engineering

Industrial Engineering is a process optimisation discipline
that aims at breaking down complex processes into simpler
components using simpler work and motion sequences, and then
rebuilding the complete process chain as a series of simplified
activities in a planned manner, within a planned layout, and in
planned timeframe. The outcome is optimally planned capacity
utilisation through:
Process component planning

At Toyota, we get brilliant results from average

people managing a brilliant process; others get
average results from brilliant people managing
broken processes
Process time planning
Resource planning machine and attachments
Resource planning manpower and skill sets
Plant / Line Layout
Production Flow System
Operator Performance
Operator Training
Monitor various performance indicators (KPIs)
Review, gap analysis and correction for further buildup

Exhibit 1:

Manufacturing Processes: Best Practices

Industrial
Engineering

Benchmarking:
Raise the Bar,
Continually

Manufacturing
Processes

Theory of
Constraints :
Maximize
Throughput,
Leverage
Source: : Apparel Resource

Lean
Manufacturing :
Eliminate Waste,
Focus on Value

Six Sigma :
Reduce Variation,
Consistent
Operations

Apparel Outlook

1.2.2 Lean Manufacturing

Lean Manufacturing advocates the long term approach to
the fact Right processes will deliver right results. It aims
at eliminating fat, waste or undesired components from a
process chain, facilitating a self-sustaining and relentlessly
learning organisation. The outcome is in the form of a lean,
effective and empowered enterprise, which draws its strength
from the obvious and latent capabilities of one and all. Lean
manufacturing focuses on waste elimination, right processes,
continuous flow, maximising value added works, minimising
non value added works and continuous improvement.

Right processes will deliver right

results
Lean manufacturing focuses on
waste elimination, right processes, continuous
flow, maximising value added works,
minimising non value added works and
continuous improvement.

A properly implemented lean system would be modeled around the following principles:
Waste Elimination 3 M and 5 S
Right processes for right results - no shortcuts, no deviations
Continuous process flow surface the problems
Pull systems avoid overproduction
Level out the workload avoid stress
Building a culture of stopping to fix problems get it right the first time
Standardised task foundation of improvement and empowerment
Visual controls no hidden problems
Value stream mapping - what is and what should be
Process flow and administrative analysis - reduction of non-value added works
KAIZEN continual improvement
Exhibit 2:

Lean Manufacturing The TPS (Toyota Production System) Grid

Quality | Cost | Lead Time | Safety | Morale

Just in Time
- Right Part, Right Amount, Right Time.
Takt-Time Planning, Continuous Flow
- Pull System
- Quick Changeover
- Integrated Logistics

People Selection
Common Goals

Suggestion Cross
Training
Continuous Improvement

Genchi Gembutsu
5 Whys

Waste Elimination
Problem Solving

Jidoka
- Andon
- Automatic Stops
- Error-Proofing
- In station Quality control
- Root Cause Analysis

Levelled Production (Heijunka) | Stable and Standardised Process | Visual Management

1.2.3 Theory of Constraints

Theory of Constraints (TOC) aims at maximising throughput through elimination of bottlenecks. It proposes four key
tools towards scheduling and optimising production, as shown in Exhibit 3.
Drum-Buffer-Rope is a production technique that maximises the flow of product through the plant for which there
is near term demand. The Drum is the slowest operation or the control point that sets the pace at which the entire
plant processes material. The Buffer is the amount of work that is currently being processed before the drum that is
sized to ensure that the drum never runs out of work. The Rope is the material release schedule that releases orders
into the plant synchronised with the pace of the Drum, defining how much material goes into the plant.

10

Apparel Outlook

The Five Focusing Steps is a process of Ongoing Improvement

that provides enhanced focus to improvement of actions:

Exhibit 3:

Theory of Constraints Tools

Identify the system constraint

Drum-BufferRope
Production
Planning

Exploit the system constraint

Subordinate to the system constraint
Elevate the system constraint
Identify the next constraint and decide if you want to move it

The Five
Focusing
Steps of Ongoing
Developments

Continuous Replenishment for Distribution is a consumptionbased replenishment approach that defines the location and
amount of the inventory both within the company and across
the supply.

Continuous
Replenishment for
Distribution

Theory of
Constraints

Thinking
Process- Problem
Solving
Techniques

Thinking Process Problem Solving is a methodology derived from

Source: : Apparel Resource
hard sciences used to design business, operating and marketing
strategies as well as assist in tactical problem solving. There are five cause and effect based Thinking Process tools
Current Reality Tree (CRT), Future Reality Tree (FRT), Conflict Diagram, Prerequisite Tree and Transition Tree.

1.2.4 Six Sigma, SPC (Statistical Process Control) and Other

Statistical Control Tools
These involve a methodology to manage process variations that cause defects, defined as unacceptable deviation from
the mean or target; and to systematically work towards managing variation to eliminate those defects. The objective
of Six Sigma/SPC/SQC (Statistical Quality Control) is to deliver world-class performance, reliability and value to the
end customer.
The approach is to continuously monitor, control and improve the process and aim at reducing variability or nonconformities. This is done through DMAIC (Define, Measure, Analyse, Improve and Control) and DOE (Design of
Experiments) techniques standardised through application of Statistical Process Control Tools.

Exhibit 4:

Six Sigma - Defects Per Million Opportunities

at Various Sigma Levels

Six Sigma Cost of Quality as % of Total Sales

35

308537

23
66807

Defects per million opportunites

6210

12

230

3
5

Sigma level

3.4
4

6
Cost of Quality

Sigma level

Properly implemented SPC results in significant reduction in cost of quality and rework percentage,
enhanced consistency in processes and manufactured products, as well as increase in production though
improved process capability.

Apparel Outlook 11

1.2.5 Benchmarking

Financial: Investors perception of value Topline and

Bottomline. The benchmarked process facilitates in
generating a better balance sheet
Customer Perspective: Customers perception of value.
The benchmarked process creates appreciation and
respect among customers

Exhibit 5:

Benchmarking To discover the Gap left despite

improvements, by evaluating against the Best.

Performance

Benchmarking is the process of raising the bar by

evaluating oneself against the best known. It aims
at discovering the best and creating a foundation for
bridging the gap between yourself and the best in
various functions, spheres or processes. Benchmarking
and re-aligning towards the best helps in reaping the
following advantages:

nie

pa

Be

Good

anies

comp

ark

m
ch

m
co

Performance Gap
ents

porvm

uous im

ontin
with c

Time

Internal Operating Perspective: Effective, excellent back-end.

TheResource
benchmarked process creates more, delivers
Source: : Apparel
more
Innovation and Learning Perspective: The excellence is sustained and built upon. It fosters continuous learning,
improvement and innovation

1.3 Technology
Apparel manufacturing is traditionally considered a labour-intensive industry where technology has a limited role to
play. Rightly so, on a traditional view, where garments are churned out on a basic single needle lockstitch machine,
and there is no dearth of takers. A closer view, however, warrants our attention to changing dynamics in apparel
manufacturing. Supply chain maturity in recent times has been pushing manufacturers to deliver:
Consistently superior quality
Lower Prices
Sustainability and Consistency
Reliability
These deliverables place altogether different challenges on modern manufacturing. The load of expectation from
the two factors-other than manpower (technology and process)-becomes substantially high. To serve as a sustainable
supply base which delivers consistently superior quality, the focus needs to move to technology. Appropriate technology
is capable of significantly deskilling the manufacturing process, thereby reducing the reliance on manpower- both
numbers and skill-sets. A state-of-the-art manufacturing set-up with the right balance of re-engineering and automation,
supported with proper processes can easily reduce manpower requirement by 20% or more, along with improving
performance by lowering the dependence on skill-sets.

The need is to have a completely re-engineered and appropriately automated manufacturing

setup that creates long term sustainability through consistency, reliability and cost
advantages.

12

Apparel Outlook

1.3.1 Automation
The objective of automation is to achieve high yield with consistent quality while de-bottlenecking the critical operations
and offering a cushion against labour turnover, missing skill-sets and absenteeism.
Of course, automation needs to be implemented only after a thorough techno-commercial analysis of the parameters
of cost of production, compatibility, quality and reasonable flexibility. An investment in automation can be rendered
redundant if the nature of input or output is not aligned to its capability. For example, an automatic pocket setter cannot
be expected to work with check fabrics of inconsistent repeats and bowing, to create perfectly matched pockets! A runstitch machine requiring jigs is prohibitive if jigs are to be imported from Germany for every style change! In certain
cases, especially where flexibility depends on minor setups and jig changes, it may be important to evaluate internal
and local capabilities of jig making and the agility of changeover required to run the automates. The competence to
build flexibility into automation at lower cost and faster turnaround can be unique manufacturing value proposition.
Typically, automates are capable of delivering outputs at costs lower than manual operationsand consistent quality
comes free.
Automation helps to achieve the following objectives:
Exponential productivity
Consistent quality
Complete de-skilling
Reduction of manpower
Long term cost optimisation
Standardisation

Glimpses of Automation, Shirt Manufacturing

Figure 2:

Figure 3:

Glimpses of Automation, Jeans Manufacturing

Apparel Outlook 13

1.3.2 Re-Engineering
The objective of re-engineering is to achieve optimum yield at standard quality while de-bottlenecking the critical and
non-critical operations. Re-engineering means changing the original configuration of the machine in various ways
including:
Adding Folders: To aid the folding of the fabric part to be sewn, for de-skilling and consistency
Adding Guides: To provide a reference point to the operator, for de-skilling and consistency
Adding Fixtures: To aid the pick and dispose of parts, for handling optimisation and reduction of fatigue
Adding Bed Size: To aid the maneuvering of bigger garment parts, especially during assembly, for ease of handling
and consistency, leading to higher productivity and lower fatigue
Reducing Bed Size: To help speed up small parts operations by reducing work area, often accompanied with the
addition of a pick and dispose station for reduction in handling time Adding Pneumatic or Mechanical Movement
Devices: To automatically move parts after operation to a dispose station
Adding Stackers and Cutting Devices: Manual, mechanical, pneumatic stackers with or without cutting devices to
shrink handling time
Adding Pullers: Rollers, belt pullers or motorised pullers for de-skilling and quality consistency
Re-engineering of technology helps achieve the following objectives:
Higher productivity through reduction of handling
time

Consistent quality
maneuvering

by

standardising

Figure 4:

Glimpses of Re-Engineering

material

De-skilling by reducing the demand on dexterity

Reduction of manpower by eliminating certain support
processes

Reduction of manpower by increasing output per
machine
Capex Optimisation: Re-engineering is inexpensive, more so for the value it delivers
It is important to understand that re-engineering is a demanding exercise. It requires very clear understanding of the
input requirements and the deliverables of a workstation or machine. The operation needs to be understood from
a view of skill and technological inputs, changes that happen to the part during the process in consideration, the
movements that it takes on the part of operator, and the way the machine should take in (input and pick) and give out
(output and dispose).The capability of a factory to re-engineer its technology depends on:
Garment Analysis: Depth and diligence of analysis
Maintenance Setup: Capability of fabricating and sourcing work-aids and attachments
Dialogue: Between garment engineering, process engineering and machine engineering functions
Mindset: That anything, which can be re-engineered, will be re-engineered

14

Apparel Outlook

1.3.3 Managing Technology

Once the right technology is in place, the next step is to optimise technology uptime, or simply to ensure that machines
run when they are supposed to be running. Every moment of an idle machine is comparable to disguised underdeployment of technology which means that machine has been planted in a running factory, but is actually not
running!
Any downtime, slow operation, parking for maintenance delays, time loss in line changeovers etc. reduce operational
productivity, and also the capital productivity, i.e. the productivity per day per unit of capital employed on
technology.
Effective deployment of a machine can be achieved by:
Using only thoroughly tested and reliable technology that serves people and processes
Total Productive Maintenance (TPM): autonomous maintenance, coupled with preventive maintenance, thorough
breakdown analysis and users ownership of equipment
SMED (Single Minute Exchange of Dies) or quick changeovers, optimising idle time of machine during process and
layout transitions
Continuous training and up-gradation for the user to operate the machine optimally
Dynamic re-engineering to improve yield per machine consistently on a case-specific basis

2. Summing Up
We have deliberated in details the future models of people,
process and technology in an optimised manufacturing
setup. We may still believe that we have an option of
being correct, the reality is that the sooner we get into
correct ways, the better. The need of the hour is that we
bring these concepts into our existing and new setups,
and our factories start personifying the best practices:

Exhibit 6:

People

Captive or local rural manpower

Modern training centres with well-structured training
programs, such as Technopaks Advanced Analytical
Method of Training (AAMT)

Continuous Training and Skill Upgradation

Empowerment through knowldeg & correct
culture development

Processes

Process Excellence, Benchmarked Process Capabillity

Self Sustaning and Evolving Systems- rather than
people dependent

Technology

State of the Art, Cost Effective

Robust, Dependable, Dustomized, Maintanable

Stakeholder Value
Stakeholder
Employee
Customers

Well-kept dormitories or hostels for workers

On-site facilities such as canteen, medical room, crche,
education centre and recreation centres

Concept of a sustainable factory

Competitive Cost
Effective
Productive
Correct

Social(CSR)
Contributing More
Consuming Less
Empowering

Source: : Apparel Resource

An overall healthy factory environment with integrated

social compliance approach
A mature and empowered Industrial and Process Engineering function with clear deliverables
Continuously learning and evolving manpower, processes and technology
Implementing best practices and innovating new paradigms
State-of-the-art technology a combination of robust and dependable machines, thoroughly re-engineered to the
requirement of the process, and selective automation researched to deliver optimum results
Practicing Lean: 3M (Mura-Muri-Muda), TPM, 5S, TSS (Toyota Sewing System), Value Stream Mapping, SMED
(Single Minute Exchange of Dyes) and others in action
High degree of employee participation in the day-to-day administration of the factory making use of enormous
cumulative knowledge within its employees through tools like Kaizen.

Apparel Outlook 15

Needless to say, such companies would be clock builders and not time-keepers. They will lead the way by being a model
for others to emulate. Through their implementation leadership, they would not only command a higher degree of
sustainability, but would also maximise shareholder wealth by creating sustainable customers and commanding better
prices for their superior output at a better than peers efficiency and lower per unit costs.
Apart from financial and operational edge, it would be less heavy on social resources. It would take lesser from the
society by using fewer resources per unit of output- machines, effort, time and place. It would be environmentally
greener with lesser emissions: it would generate lesser waste, heat and pollutants while consuming lesser power, water
and chemicals by increasing productivity per usage.
It would create sustainable value for employees by rewarding them for enhanced performance. It would create a system
to enable the delivery of extra-ordinary performance from ordinary people, thus personifying knowledge leadership.
It would meet its CSR objectives by enabling and empowering the people around to learn more, earn more and live
better.

The shareholder value will simply follow: higher returns per unit of capital employed,
sustainability through knowledge leadership and continuous out-performance, socioeconomic respect and acknowledgement for CSR endeavours.

16

Apparel Outlook

Developing Skills
for Employment in
Apparel Industry
SEAM (Skills for Employment in Apparel Manufacturing) is an initiative by the Ministry
of Rural Development (MoRD). SEAM has been conceptualised with the dual objectives
of helping the industry on one hand and the BPL families on the other. While the industry
is able to look forward to a sustained supply of appropriate manpower, the trainees can
look forward to a respectable and growth prone employment.
The garmenting sector would be the key driver of the employment in the textile sector. Major portion of the human
resource requirement will be for operators who have the adequate knowledge of sewing machine operations and
different types of seams and stitches. - A report by National Skill Development Corporation (NSDC) on Human
Resource and Skill Requirement of Textile and Clothing Sector

An Insight into the Indian Garment Industry

With apparel shipments hitting the $1-billion a month mark in December 2010 for the first time in nine months,
garment manufacturers are becoming increasingly confident of achieving $11 billion in exports during the current
financial year. This would be 6% higher than the previous year*.
An estimated 33 million people are employed in the Textile sector in India. This is expected to increase to 45 million
by 2012. The Ready Made Garments (RMG) sector, which accounted for 17% of the employment, is estimated to
contribute as much as 25% to the total employment in the textile sector**.
* http://timesofindia.indiatimes.com/business/india-business/Apparel-exports-on-course-to-hit-11-billion/articleshow/7518094.cms
**Human Resource and Skill Requirements in the Textile Sector (2022) A Report by NSDC

Apparel Outlook 17

As per a report by the NSDC:

The current training infrastructure is inadequate

on both number of people trained and also the
quality of training being imparted. Also, very
few of the training initiatives are targeted at the
shop floor level. The newly inducted workers
learn through informal training and also from
the experiences of the existing work force.
The availability of trained manpower is a key issue for the
garmenting sector. Institutes like The ATDCs and ITIs train
up to 50,000 workers annually. A few private sector players
also provide training specific to the garmenting sector. A
significant portion of the requirement of human resource at
the operator level is met by on the job training. Hence training
at the operator level is a key gap that needs to be filled. Acute
shortage of skilled man power leads to poaching and acts as a
detriment to spending on in house training initiatives.

An Insight into the Poor of India

A few points from UNDP (India) Poverty Reduction Project :
27.5 percent of Indians live below the national
income poverty line
More than 60 percent of women are chronically poor
More than 90 percent of the overall workforce is
employed in the informal economy; 96 percent of
women are in the informal economy
48.6 percent of farmer households are in debt, and
only 27 percent have access to formal credit
As we continue to progress and present an Incredible
India to the world, there exists an India where people
struggle to get bare minimum human needs as stomach
full of food and a shelter to live.

Projects like SEAM solve the above problem by providing a platform to bridge the gap between the supply side and
the demand side for skilled manpower.

SEAM what is it all about?

SEAM is a part of Swarnjayanti Gram Swarozgar Yojana (SGSY) special scheme by the MoRD, Government of India. The objective of
each Special Project for Skill Development is to ensure a time-bound
training and capacity building programme for bringing a specific
number of Below Poverty Line (BPL) families above the poverty line,
through placement ensuring regular wage employment.
The special project component of SGSY is placement linked skill
development programme which works through public private
partnership (PPP). In view of success of the pilot projects, efforts have
been made to up scale the skill development programme, as it was felt
that regular wage employment to at least one member of rural BPL
family will enable it to meet the ends sustainably. In this perspective,
MoRD has made concerted efforts in bringing about paradigm shift in
the delivery mechanism and in involving industry stakeholders, besides
strengthening the process through output linked support. MoRD has
so far assisted several PPP or private sector led initiatives emanating
from industry, civil society organisations etc. In this module, the MoRD
provides funding support up to 75% of the training cost while 25%
contribution towards project cost is borne by the implementing agency,
employer, industry or sources other than the government.

18

Apparel Outlook

Strategy & Approach

Placement Linked: Assured placement for at least 75 % of the trainees. This is a demand-driven programme and one
of the main pre-requisites of the program is the commitment of the industry to employ the trained persons
Physical Infrastructure: No new infrastructure creation is supported by MoRD under the Program. Utilisation of
existing infrastructure and facilities for operation of training centers is the fundamental principle. This enables the
appropriate use of under-utilised infrastructure and helps immediate start of the training programme at decentralised
locations
Machinery and Equipment: The requisite machinery and equipments have to be arranged by the prospective
employers to the extent possible - on lease or as contribution of employer or the implementing agency

Training Process

Training Content: The Implementing agency has to ensure
innovative content development with inputs from the industry
to ensure employability as per current industry practices. The
curriculum should preferably be designed jointly with prospective
employers. Course content and training should be developed and
imparted in local languages to ensure better absorption by BPL
youth who may not have exposure to English
Skill Sets: The objective of the program is to impart skills necessary
for regular employment, so that the initial wages are not less than
the prescribed minimum wages. In addition to technical skills, soft
skills are also to be imparted to beneficiaries to prepare them to
face transition challenges of moving from an agrarian backdrop to
the industrial environment
Training Partners: Partnership with training agencies and employers
who have the aptitude and capability to conduct training and
placement of the rural BPL youth (after certification acceptable to
the industry) is solicited
Course Duration: Preferably short duration of up to three months,
so that the opportunity cost of being away from productive work
opportunities during training period are minimised

Exhibit 1:

Identifying pool of BPL youth

Mobilization of BPL Youth
Selection of Operators
Orientation of the BPL Youth to Apparel Industry
Training at Nodal Training Centre(only if required by Industry)
Setting up of Factory Training Center Recruitment of Trainers
Training of Trainers
Fresh Batch of Operators at Training Center
Training of Operators
Transfer of Operators to Production Floor
Stamina Build Up

Certification and Assessment of Trainees: Independent certification and assessment by third party agencies acceptable
to the industry or employers is mandatory to ensure high quality standards and employment
Trainee Accommodation: Wherever necessary, boarding and lodging facilities are to be provided to the trainees by
the implementing agency, so that BPL youth in remote locations can be covered. In other cases, trainees are to be
provided with to and fro transport and meals
Mobilisation and Selection of Trainees: All the trainees in the age group of 18- 35 years with requisite aptitude
depending upon the trade or job requirements are to be selected from rural BPL families, as per the list maintained by
the District Rural Development Agencies (DRDAs) / State Government. The project implementing agency creates
appropriate awareness and publicity campaign in local electronic/print media and organises meetings especially in
SC, ST and minority pockets in rural areas for the selection of beneficiaries. Priority should be accorded to SC/ST
certificate holders, minorities and women heading rural BPL households, duly verified by the Panchayat/Block/
Tehsil functionary as BPL may be treated as sufficient for candidate selection by Implementing Agency/DRDA. The
implementing agency ensures that out of the total beneficiaries covered, a minimum of 50% will be from SC/ST.
Women and minority categories have to be accorded priority in selection of candidates, depending on demographic
profile and trade requirements
Preliminary Screening of Candidates: The trainees mobilised are put through an assessment process or other basic
screening tests to assess the need and aptitude that are fundamental to the trades in which training is to be imparted
and also to reduce mid course/post training dropout of candidates before placements

Apparel Outlook 19

Website: The implementing agency maintains a website with complete MIS for transparent access of status and
progress
Audio-Video training aids for better orientation and training of the operators
Soft skills manual for training of the operators on issues like health and hygiene, nutrition, change management and
factory disciplines

Benefits of SEAM
Generating employment for rural BPL youth
Reducing poverty Providing livelihood
Access to trained manpower for the Industry
Lower annual hiring cost to the Industry
Reduced Attrition & Absenteeism levels in the factory
In-house training center for future sustainability
Improved factory performance & work culture

Technopak is currently working on SEAM for both North and South India Regions.
Through SEAM, while the industry can look forward to a sustained supply of appropriate
manpower, the trainees can look forward to a respectable and growth prone employment.
It is indeed a balanced poverty alleviation effort by the MoRD, Government of India.

About Technopak
Indias leading management consulting firm with more than 20 years of experience in working with
organizations across consumer goods and services.
Founded on the principle of concept to commissioning, we partner our clients to identify their maximumvalue opportunities, provide solutions to their key challenges and help them create a robust and high
growth business models.
Ability to be the strategic advisors with customized solution during the ideation phase, implementation
guides through startup and a trusted advisor overall.
Drawing from the extensive experience of 200+ professionals, Technopak focuses on six major divisions,
which are Fashion & Textile, Retail & Consumer Goods, Healthcare, Education, Food & Agriculture and
Leisure & Tourism.

Our key services are:

Business Strategy. Assistance in developing value creating strategies based on consumer insights,
competition mapping, international benchmarking and client capabilities.
Start-Up Assistance. Leveraging operations and industry expertise to commission the concept on
turnkey basis.
Performance Enhancement. Operations, industry & management of change expertise to enhance the
performance and value of client operations and businesses.
Capital Advisory. Supporting business strategy and execution with comprehensive capital advisory in our
industries of focus.
Consumer Insights. Holistic consumer & shopper understanding applied to offer implementable business
solutions.

Technopak Partner Companies

Insights and innovation led product, packaging, space and strategic design, including design research,
concepts, engineering and prototyping. A blend of unique, contemporary and relevant concepts and
solutions.
www.foleydesigns.com

B u i l d i n g

T o m o r r o w

Planning, implementation and project management of plants, warehouses and entertainment centers with a
focus on modernization, process improvement, technical valuation, power & water audit and environmental
engineering.
www.arvana.in

Financial Advisory Services

Technopak Financial Advisory Services (TFAS) is the financial and transaction advisory services arm of
Technopak . With its team of experienced transaction professionals located in India and across US and
Europe; TFAS offers its clients a global transaction ability, deep understanding of its industries of focus,
and an efficient negotiating platform for stakeholders.

Strategizing, planning and managing creation, development and growth of brands through a scientific,
transparent and process-driven methodology.
www.vertebrand.com

For further information, please contact:

Sharad Mehra

Sr. Vice President

sharad.mehra@technopak.com

Amit Gugnani

Vice President
amit.gugnani@technopak.com

Ashish Dhir

Associate Vice President

ashish.dhir@technopak.com

Arindam Saha

Associate Vice President

arindam.saha@technopak.com

Technopak Advisors Pvt. Ltd.

Gurgaon

4th Floor, Tower A, Building 8, DLF Cyber City, Phase II,

Gurgaon 122 002, (National Capital Region of Delhi)
(India)
T: +91-124-454 1111, F: +91-124-454 1199

Website: www.technopak.com