Productivity & Quality: Today’s challenge and BGMEA initiative

The competitiveness of the apparel industry in different parts of the world has been a matter of debate for many years. However, post abolition of quota system in end 2004, the interest of industry watchers and policy makers increased in the textile and apparel industry. Several studies were carried out by international institutions and industry bodies to gauge the likely impact of the elimination of textile and apparel quotas on the future of the world trade in these products. The studies suggested that many countries involved in textile and apparel exports including Bangladesh, may lose their market share significantly. However, the apparel industry in Bangladesh has proved many trade Pundits wrong by a spectacular performance in exports post quota abolition.

Apparel industry has played and will continue to play an important role in the economic development of many Asian countries, including Bangladesh. However, the important point not to be missed is that although apparel industry has flourished in Bangladesh, if the industry does not address a few crucial issues like low productivity the real gains in time to come would be limited. Globalization has opened the door to unlimited potential and at the same time, remaining competitive has become a big issue. The major task of the industry now is to balance between increasing production costs and lower price of products. 

Competitiveness through Productivity

Higher productivity brings down the manufacturing cost thus improves cost competitiveness in the price sensitive market. Higher productivity also helps the factories bring down the need for excessive overtime. This is a major issue that international buyers are trying to address worldwide. In fact many leading international apparel retailers/ sourcing companies are actively promoting productivity and quality improvement programs in their supplier factories for above reasons.

Bangladesh is a country of relatively low labor cost. The industry did not grow in a structured way and still lacks sufficient institutional training facility to create skilled manpower both for the factory floor and factory management. In a number of factories conventional manufacturing system is still in practice and the factory management lacks scientific production management knowledge and skill compared to our competing countries. Productivity levels generally achieved in Asian apparel industry and especially in the Bangladesh apparel industry have been very low compared to the global benchmark performance. This does not mean that there aren't success stories of factories that have substantially higher productivity performance, but such factories are a small minority. Therefore, the basic idea of productivity enhancement is to ensure full utilization of resources to produce maximum output.

Scope of Productivity and Quality:

Garment manufacturers are now working in an open market scenario. And the customer/ market sets product price reverse to monopoly or closed market.

Profit = Sales Price - Manufacturing Cost

As investor will not prefer to reduce profit margin, the only factor that can ensure business continuation is optimize manufacturing cost. Being one of the lowest productive countries, Bangladesh has the biggest opportunity to improve competitiveness through productivity enhancement and even control the market.

Proper motivation and awareness campaign needs to be raised for the factory management to realize the benefits of optimum productivity. At the same time modern technology and scientific tools must be acquired and practiced to improve and maintain higher productivity level. Work study/ industrial engineering department can help monitor and improve productivity related issue.

Quality has an important role to play in the competitiveness of the apparel exporting industry. As per a study by the US Importers of Textile and Apparel (US ITA), Consistent Quality was the ‘top most’ criterion used to decide where to place import orders. This was followed by Speed to market, low cost, product development capabilities and social compliance.

As far as quality is concerned, our industry is proudly in a satisfactory position. However, there is a tremendous scope of improvement in the area of ‘Quality’ in the manufacturing units here as a good percentage of rework takes place to maintain the high quality which incurs financial loss. Factories sometimes need to consider price discount and shipment cancelation. The value of such penalties is very high and that is where the issue of proper quality management system comes in.

Productivity and quality improvement brings better financial results for the organizations, which in turn can be shared within the stakeholder. The workers can earn higher wages and help improve the standard of living. The satisfied worker can contribute at a higher level in productivity through high morale, less absenteeism, less turn over and concentrated work effort. At the same time buyers can have more value of their money through better quality and lead time.

BGMEA’s initiative:

Access to world class consultants to get support on productivity and quality improvement is not always affordable due to high charges, particularly for the small and medium enterprises. Considering this fact, BGMEA started the Competitiveness Enhancement Program (CEP) in collaboration with German Technical Cooperation, GTZ to improve productivity standard of member factories in 2008. The program was successfully carried out in several factories. Participating factories achieved measurable improvement through the program which is very encouraging.

After the CEP experience, BGMEA established a permanent Productivity Improvement Cell (PIC) to support members both on productivity and quality.  The team is equipped with professionals of industrial and production engineering background and good industry exposure. BGMEA has good intention to increase the six members team, both in quantity and quality through good work exposure and training from world class professionals with a view to provide technical services to its Member factories at low cost.  The cell will provide following technical supports with minimal service charge.

Quality Improvement Program(QIP): BGMEA has already announced to its member factories to participate in a quality improvement program that will be led by a team of foreign quality expert with PIC members with the support of GTZ. The initial project will cover 20 factories in two batches with an objective to reduce quality losses in monetary terms by at least 50%. The program was launched on 12 of October, 2009 by BGMEA president.

PICTURE of QIP LAUNCH

Productivity Improvement Program (PIP) of BGMEA: PIC will soon start productivity improvement program for Member factories to raise the productivity standard of the industry. World class productivity improvement methodologies will be applied for this purpose depending on factory requirement.

BGMEA and Stakeholders:

BGMEA is thankful to GTZ for providing technical and financial support to many of its program along with productivity and quality. The association also feels that buyers can also play a greater role in this venture. A coordinated effort can also at the same time help significantly to increase the success rate. 

The Bangladesh apparel industry is being recognized globally as a major player in the international market. Further, the industry has tremendous untapped potential in the areas of Productivity and Quality. The BGMEA in partnership with GTZ has taken timely initiative to do the capacity building in the area of productivity and quality improvement by bringing in international expertise. Remarkable improvement potential is available for all apparel manufacturers, although organizations that will benefit substantially will be the ones that embrace new thinking and take ownership of the implementation of this change.  Quick acceptance and commitment to change will ensure competitive edge and assured international business for them.

Reproduced from the Competitiveness through Productivity and Quality report of Dr. Rajesh Bheda and Productivity & Quality: Today’s Challenge and BGMEA Initiative report of Engr. Md. Al Bokor, Project Coordinator, Productivity Improvement Cell (PIC), BGMEA.