Apparel Industry-Led strategy

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The time has come to roll up our sleeves and get back to work. But first we need to realize that the recession brought on by COVID-19 is different from any previous recession. Some people are calling it suppression since it is forcing us to appraise and save what we have left of our businesses and overall economy. Already before the advent of COVID-19, producers faced the relentless demands brought on by the new manufacturing age. Those who survive the coronavirus crisis will have to accept that their customers are also under pressure: unit prices may drop, order sizes might shrink for more styles or product categories, and lead times might decrease.

Make no mistake, so-called normal conditions are never coming back, and end consumers are expected to be buying less for at least another two quarters. If end consumers aren’t buying, the buyer will be forced to demand lower prices from their suppliers, leaving the latter with less profits but the same manufacturing costs and performance challenges. Unless the factory makes active efforts to reshape the entire manufacturing platform and to adapt new management style and to involve its engineers and frontline technical personnel in a more effective manner, it will struggle. ​

Reliance on management and staffs to improve the many and many additional costs elements had made it impossible to factory from progressing in the last 2 decades. Factory management style, systems and techniques of yesterday must be replaced by more simplified, unified and aligned structure that greatly reduce manufacturing costs and increase profits gains.

In fact, however, manufacturers could make much more profits in reducing manufacturing cost and increasing efficiency than in increasing sales, a – 1 per cent of cost reduction in produced unit translates into additional 100% pure profit from all current and future sales volume, whereas increasing market share will increase profits only by as much as the margins from the incremental sales volume.

To do so, manufacturers can no longer rely on experience gained on the job. In the past, industry has produced large numbers of graduates but unfortunately has never been able to effectively cultivate their talents. Recent graduates are not allowed to propose or make strategic changes and end up having to adapt to the work practices and systems of the senior members of their company whose qualifications are based solely on past experience. Today’s manufacturing environment is scientific and requires more education at all levels.

There are currently many available webinars which guide businesses in our industry on how to survive the current crisis but most of them focus on the importance of investing in new technologies at this critical time. But there is little emphasis on concrete strategies on the ability to build and save what the industry already has and overall economy. This makes it particularly difficult for companies to invest heavily in advanced technology in preparation for the eventual resumption of orders. What this means is that companies who expect to thrive need to dramatically shift their focus from superficial appeasement of compliance and ethical standards towards truly achieving world-class manufacturing standards governed by value engineering and solid business sense. Last but not least, no one is focusing on strategies to ensure that employees are protected and nurtured.

It is time to look at the future based on long-term benefits over short-term gains. However, it is also unrealistic to believe that the entire industry can change at the same pace. It is therefore vital for some organizations to lead the change in attaining world-class standards and then spreading those values throughout the entire industry and the rest of the community. In this context, the ultimate goal to the individual factory is to formulate its own cost reduction strategy then to rebound by building strong relationships with customers to secure and increase their market shares and to grow the same approach replicates to the rest of the industry.

The heaviest burden of reducing costs and increasing productivity is on the shoulders of factory and production managers, technical staffs and line people. These managers and technical staffs have authority and responsibility over the biggest manufacturing resources that affect cost and productivity. Those appointed managers, staffs and line workers are poorly trained. Successful companies in the industrialized countries of Asia have shown that by focusing their strengths on the development of human resources, they could gain a competitive edge in quality, productivity, cost, and technology that could win them market shares easily and eliminate both internal and external threats.

Going forward, the industry requires talented professionals and qualified line people equipped to lead tomorrow’s factories effectively toward common goal. There is little effort spent on developing human resources with common goals, using strategic planning which holistically integrates the organization’s manufacturing systems, its management style and the skills of its workforce. This should be based on reshaping the entire manufacturing platform and management support systems so that substantial costs can be cut in every functional and manufacturing areas. The top management must in turn align and reskill existing managers, engineers, technical staffs, line supervisors and workers so that the organization can substantially cut manufacturing costs and achieve sustained profit gains.