Tuesday, June 18, 2024


Dhaka Tribune

RMG industry needs innovation in production to remain competitive

To remain profitable, garment manufacturers, mostly SMEs, must readjust their business model by offering better services and value to their customers

Update : 13 Oct 2022, 04:16 PM

Global apparel makers needed to develop new capabilities in both pre and post-production stages to remain competitive and profitable.

The pre-manufacturing areas included research and development, design, product development, material sourcing and logistics while the post-manufacturing processes are distribution, logistics, marketing and retails.

The International Trade Centre (ITC), a joint agency of the World Trade Organization (WTO) and the United Nations (UN), made the observations in its latest guidebook titled "Good Practices in the Global Apparel Industry."

Published last month, the book said that international trade in textile and clothing was characterized by increasing competition and declining prices.

At the same time, garment manufacturers were facing several other challenges, including addressing sustainability concerns, improving speed to market, being able to supply smaller quantities per style, becoming digitally versatile, ensuring health and safety in the workplace and offering new designs, among others.

To remain profitable, garment manufacturers, mostly SMEs, must readjust their business model by offering better services and value to their customers while controlling costs.

The ITC compiled this guidebook of good apparel industry practices that could help SMEs and business support organizations (BSOs) address all critical areas along the value chain, including adapting to the changes imposed and accelerated through the Covid-19 pandemic.

The guidebook covers 28 good practices with 33 case studies along the value-chain stages of design and pre-production, production and quality, social and environmental sustainability, branding and marketing as well as institutional and sector-level good practices.

Half a dozen good practice cases from Bangladesh are cited while more than a dozen from India.

The rest are taken from Sri Lanka, Turkey, Thailand, Ethiopia, Vietnam, and Jordan.

Bangladesh's good practices include establishing product development capabilities to move up the value chain, reducing labour costs by re-skilling the operation and female supervisor leadership program that promotes gender balance.

Fabrics tend to be the largest cost component in garment manufacturing as it can go up by 50% to 70% of garment-making cost.

Hence, any effort to reduce manufacturing costs in the garment industry must include fabric saving opportunities.

The ITC book said that 3% saving in fabric cost could result in about 2% manufacturing costs of the factory which can also significantly improve the profit margin of a company.

Another Bangladeshi factory has reduced its defect rate to 4.56% from 12.82% by implementing the Zero-defect operator program.

Participation in the safety program improved another factory's safety parameters, it showed.

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