Web Forum  
   
 
     
 
 
Where should the industry invest for best returns ...
Where should the industry invest for best returns - in capacity, productivity enhancement tools, HR or systems - to survive global competition?
   
  Post By: Editor    on: 6/11/2010 12:53:17 PM
 
 
 
Replied by: Avinash Misar, on 6/11/2010 1:31:49 PM
It is important to understand that - to be competitive -Industry needs to benchmark with international manufactureres in Bangladesh, Vietnam , Etc. These countries are at low cost in terms of labour. E.g Bangladesh is 35 Us $ per month per labour. This n India is Us $ 100 per labour at best mininimum. As against this Eff in India as against GSD is average 45 % & in Bangladesh is 65%. So cost is low & eff is high in the countries with whom we are in competition
Hence it is a must that our Efficiency / Productivity has to increase to higher levels. To attain this all measures in terms of HR, Productivity tools have to be adressed. A consistent HR effort to mould & mobilise a performance driven team is the Key.
A rise in productivity also unleashes locked capacities in inefficiences leading to enhancement in capacity without further investments.
Working on Productivity is the best bet as it will make us competitive & as well get more capacity. A WIN WIN situation.
Replied by: Prashant Kumar, on 6/11/2010 1:36:30 PM
It is productivity which keeps tab on cost and optimises the same. HR or systems are the other face of the same coin. Unless one improves HR practices and systems, better productivity can not be sustained. Also, value added products and services could be a key area which will provide edge over global competitors like Bangladesh, Vietnam and China. At present, India is lagging behind Bangladesh in terms of labour cost and efficiency. Vietnam has an edge of geographical location which is next to China, Singapore, Hong Kong and Korea for sourcing raw material at lower cost. China has vast and cheaper supply chain. So there is a cut throat competition at low end products business. India should eye on value added product and services to have an edge over multiple factors associated with its global competitors.
Replied by: Ajay Kumar, on 6/11/2010 1:38:57 PM
From my experience, I feel all three are equally important and critical to achieve best returns. It has become mandatory to expand capacities to attain economy of scales, thus enhancing production efficiencies. Every department in the garment manufacturing chain, such as pattern, cutting and sewing, has to contribute their best so as to minimise the cost of production, thus improving margins.
Also worldwide, social compliance and ethical manufacturing have become a key to drive business with big customers, as a recent survey in the UK showed that 78% of UK shoppers wanted to know how their garments are made and in what conditions. Similarly ‘Garments without Guilt Campaign’, recently carried out by Srilanka in the US, has attracted several customers & impressed the existing ones
to look at them as a potential and responsible supplier base.
Replied by: R. Balakrishnan, on 6/11/2010 1:43:05 PM
All the factors are part of business, based on SWOT (strength, weakness, opportunity, threat) analysis with respect to the above factors along with functional areas such as marketing and finance that also need to be carried out. Strength and weakness are internal factors- strength can be maximised while weakness can be minimised. Opportunity and weakness are external factors, where opportunity is to be
used to the optimum and threat should be considered avoidable and unavoidable. For survival in global competitiveness, steps should be taken in accordance with an individual company’s competitiveness in the respective areas.
Replied by: Jaspreet Arora, on 6/11/2010 2:21:34 PM
Investment has to be made in all - we cannot invest in capacity without worrying about productivity enhancement. Also, we cannot get the full worth of productivity enhancement tools without investing in human resources and we certainly cannot run a successful business without investing in systems to survive global competition. Interestingly enough, all of the above, along with product improvement and innovation largely enables systems to survive global competition.