Bangladesh is the second largest apparel exporter in the world. More than 65% of the country’s industrial employment and 84% of the export earnings is generated from this sector. With an export growth of 13.2% (last 15 years average), this country aims to achieve US$ 50 billion markets by 2021. However, we know the country is fronting sluggish growth now because of adverse competition, price reduction, and increased manufacturing cost. The industries are fighting to remain competitive and sustainable.
Mohammad Shohel Ahmed, Head of Manufacturing Excellence (BD) of QA Services Hong Kong Ltd (Lidl liaison office) discussed and tried to find out the way out to overcome these hurdles, to sustain and to attain such a big growth rate in his speech in 3rd International Conference on Textile and Apparel, ICTA 2018 held in Dhaka recently. The conference organized jointly by Bangladesh Textile Today and The Textile Institute Bangladesh Section.
Mohammad Shohel Ahmed said, “We need to reform, perform and transform our mode of operation to make our vision a true reality. The leading factor, which can ensure this growth, competitiveness, and sustainability of the industry now, is manufacturing excellence. Manufacturing Excellence is aimed to incorporate less human effort, less inventory, less time to develop products and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible.”
“Standing at 2018, to achieve US$ 50 billion markets by 2021, how far we can see? Can we see the clear horizon or is it hazy line in front? Is the vision of $ 50billion by 2021 on the 50th anniversary of the Republic of Bangladesh is really a vision or hallucination? Is it attainable,” he questioned.
“Global manufacturing powerhouses such as China, Turkey, and Vietnam have reached their leading status by adopting manufacturing excellence in every area. They have already improved their competitiveness by changing the ways and putting more focus on things which support the core activities to produce good quality at low cost,” he added.
According to Mr. Ahmed’s data, there are three manufacturing excellence key strengths for industry growth such as lower labor cost, large manufacturing capacity, and manpower ability. The labor cost in China is minimum US$ 550-600 among the apparel makers. In Cambodia it is US$ 190-220, in Vietnam it is US$ 170-190, in India it is US$ 160-180 and in Bangladesh, it is US$ 68-110. In Bangladesh, the number of units of spinning mills are 385, weaving are 721, knitting are 2800, power loom and handloom are respectively 1065 and 1,83,512, dyeing-finishing are 310 and garments are 5063.
When Bangladesh government will again increase the minimum wage rate in coming days the textile and apparel mills have to find out right solution to remain operational keeping competitiveness.
He pointed out not only the key strength formula but also industries weakness, opportunities, and threats by SWOT analysis.
Why losing competitiveness:
Infrastructure/utilities, road network, and port facilities are seen as major limiting weakness factors. Below are the main reasons for which we are losing our competitiveness:
- the absence of complete manufacturing value chain raw materials,
- adoption of new technology,
- increasing manufacturing cost,
- high man-machine ratio,
- less focus on efficiency,
- lack of product and process development
Mr. Ahmed identified below threats which may hinder the growth opportunities:
- increasing wages while decreasing FOB prices,
- risk of political instability,
- high lead time due to infrastructure shortage etc.
Possible way outs:
Shohel Ahmed said that we could improve our production capacity, quality and process to make the industry better. Leaders and policymakers are suggesting for a diversifying product and market. Factory modernization, reducing the cost of production and lead time, optimizing energy utilization and convert waste to energy, increasing efficiency and attracting large scale of foreign investment can give us an extra mileage in our textile sector which is the main backbone of the economy in Bangladesh.
The scope of Manufacturing Excellence (ME):
Mohammad Shohel Ahmed presented different business data on ME where he mentioned the importance and scopes of ME. Not only ME is a term used for a business model designed to eliminate waste while delivering a quality product at less cost and impact to the environment but also it places a focus on customer satisfaction value. It can be applied to all organizations, for any office and or business system. After implementing, industry insiders can get typical benefits within a specified time such as shorter lead-time, less rework, lower inventory, reduction costs, efficient use of manpower and space, improving quality, greater flexibility etc.
Mr. Ahmed said, “We recently examined the performance of some apparel manufacturers who were adopting ME initiatives, we found improvements in many areas.” He shared the story with the audiences and told one factory’s annual some breakdown and major avoidable losses, which were constantly taking of the profitable graph towards the negative side.
Cutting wastages, cut to ship ratio, absenteeism, unskilled operator crisis, the wrong attitude of staffs, efficiency, excess manpower, not available of trimmings-accessories, feeding delay, color shading problems, approval delay, power failure, supervisory problem, higher defect etc hamper the total production process and company’s income. Worker entry-exit time delay is a reason for massive losses on factory turnover growth. He gave an analysis report of it.
Shohel Ahmed told, “If workers delay to enter in the factory for 5 minutes from the exact duty time, go to lunch before 5 minutes, come back after 10 minutes, pack up their work before 10 minutes, then we can see that the yearly production lose in one factory stands at around 17 crore taka. It was the company’s potential gain but it happens only because of lack of proper supervision. There is no investment, just if we monitor carefully about this extra wastages by ME controlling tools, we can save a lot and give the salary-allowance to the workers and staffs by this earning.”
He emphasized on waste management and said, “Wastage is the potentiality which is ultimately the sustainability.”
