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Garment Manufacturers: A well-oiled machine for operational efficiency

July 14, 2023 | Operational Excellence

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The garment manufacturing industry is a significant driver of the world economy. This core sector within the fashion industry, the third-largest global manufacturing sector, is worth 2.5 trillion dollars annually, accounting for 2% of the global GDP.  

As the primary producer of “fast fashion” — the low-cost, high-volume clothing production model — Asia employed 65 million workers, according to International Labour Organisation (ILO). This number represents 75% of global garment sector employees, dwarfing every other region. 

Although the industry underpins many countries’ economic prospects and provides employment to millions, it is still riddled with issues that negatively affect its operational efficiency, namely increasing calls for sustainability from brands and consumers, continued supply-chain disruptions, wasteful production practices and rising manufacturing costs.  

Key Causes of Operational Inefficiencies  

It is imperative to understand the underlying causes of suboptimal performance and its effect on hindering growth and productivity.  

Low efficiency of garment production 

Inefficient processes can adversely affect garment manufacturers’ financial performance by contributing to higher production costs through increased resource usage. Additionally, low-efficiency practices often take longer to complete, contributing to higher labour costs, delays in delivery and declines in customer satisfaction, ultimately resulting in reduced profitability and financial strain.  

Supply-chain disruptions  

Supply chain disruptions and challenges have exposed vulnerabilities in the complex, globally connected networks of almost every industry. These disruptions remain a dominant factor in the garment industry, largely because the distribution process spans multiple stages.  

Supply chain disruptions can lead to:  

  1. Increased lead times 
  2. Mounting backlogs 
  3. Higher shipping costs  
  4. Chaotic transportation logistics  
  5. Lower profit margins 

Growing demand for sustainability among consumers  

Consumers’ awareness of sustainability brings about changes to the suppliers. This increased consciousness results in the demand for ethical raw material sourcing, implementation of labour standards policy in accordance with ILO and sustainable production practices. When manufacturers pay more for sustainably sourced raw materials, provide fair wages and working conditions to their employees and comply with other environmentally friendly regulations, production costs increase.  

Intervention Strategies  

Garment manufacturers need to pave the way for growth and increased productivity practices that can contribute to improving operational excellence in the long term.   

Design productivity-enhancing interventions  

Workforce management must integrate ethical working conditions and best environmental practices into daily manufacturing processes. Shift scheduling and staffing levels need to reflect the factory’s current capacity. Although these considerations will be more expensive in the short term, the long-term effects will be reduced turnover and absentee rates — two key factors that influence increased labour costs.  

One of the most effective productivity-intervention strategies is lean manufacturing. These principles streamline workflows and processes, reduce unnecessary labour and maximise the value of employees’ skills. When you draw on the experience of floor workers to create value stream maps, you can eliminate bottlenecks without creating a negative working environment. 

The Toyota Production System (TPS) is an example of how you can incorporate lean manufacturing principles while still prioritising employee well-being. TPS focuses on creating a harmonious work environment through optimal scheduling while also eliminating waste and streamlining workflows through value stream mapping.  

Supply chain management strategies  

Diversify your supply chain and build strong relationships with suppliers. Expanding your current supplier list can foster competition and encourage price comparison. Introducing these and other supplier quality control mechanisms will boost procurement efficiency.  

Revamp — or introduce — procurement management control system elements in order to have a forecast-plan-control-report cycle to improve your overall management and production capabilities.  

You can also invest in visibility technology to counteract supply-chain issues. The smart supply chain operating model allows internet-connected devices to tag and track your inventory levels, order statuses and shipments, giving you complete transparency in your supply chain management.  

Embrace sustainability initiatives 

As with providing fair wages and positive working conditions, sustainability initiatives will likely cost more to implement but will pay off in the long run. The upside is that several sustainability strategies will also tie in with your supply-chain optimization. Increasing your supply chain transparency is not only sustainable but also helps with supplier diversification, resulting in overall cost savings.  

Other sustainability practices that can optimise operational efficiency include creating a circular economy. Reducing waste at all levels — whether material waste through recycling or labour waste through errors and reworking — will lower your production costs.  

Optimise your operational processes 

Operational Excellence principles and practices vary across industries, but successful implementation can elevate your business to new heights. Operational excellence is not a destination that can be reached with a single effort, as it is a never-ending journey that requires constant innovation and reinvention in how you run your operations and/or businesses. 

Keen to accelerate excellence in your operations

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