Apparel production: The 9 key factors to success (2024)

India has been anintegral part of the global textiles and apparel industry throughout history.India’s textile and apparel exports stood at $37 billion in 2018 and areexpected to reach $80 billion by 2025. The domestic apparel market is alsoprojected to grow from $100 billion in 2018 to $220 billion by 2025.

The growing market presents immense opportunities forinvesting in garment manufacturing. One of the most attractive reasons forinvesting in garment manufacturing is that it is less capital intensive withhigh investment to turnover ratio. However, investing in garment manufacturingbusiness alone does not guarantee success. With growing global competition, itis important that the garment factory is both compliant and competitive. Wediscuss the nine key factors that are important for success of any garment manufacturingbusiness.

1. Efficiency

Buyer’s demand for higher value at lower price is drivingthe need for maintaining optimum efficiency levels. Efficiency in garmentmanufacturing is a function of 4 Ms: manpower (trained staff at all levels),machinery (both core machines and software), material (availability at righttime and quality) and methods (standard systems and processes). For example, ahigh-tech factory alone cannot guarantee higher efficiency and needs trainedmanpower to operate those machines.

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In these times, operating at optimum efficiency level isno more optional and has become inevitable to succeed and takes a toll onprofitability, if not maintained. It is estimated that an improvement of 10–15per cent in efficiency can result in 3–5 per cent improvement of EBITDA, evenafter paying higher wages to workers in form of production incentives. Also, ata country level, the presence of efficient garment manufacturing set-ups increasesits overall attractiveness in the global market, fetching larger orders andenhancing wage-earning opportunities for the workforce.

2. Compliance

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Compliance refers to meeting legal obligations forsafeguarding the health, safety, and welfare of workers in an organisation.Buyers globally are focusing on sourcing from compliant garment factories withmany like H&M, C&A, Zara, etc, insisting on traceability to ensure thatthe goods are ethically manufactured. The Government of India has also introducedmultiple compliance norms such as labour compliance, social compliance,environmental compliance, etc. Hence, conforming to the recognised standards ofproduction has become one of the key success factors for any garmentmanufacturing business that aims to cater to global buyers. While compliancehas become very important, it might be confusing for a new investor givenvaried requirements by global brands. In such cases, a garment manufacturingconsultant can help investors build a compliant garment factory suiting thedifferent requirements right at the time of factory planning.

3. Factory layout

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Factory layout refers to the physical arrangement of theindustrial facilities such as sewing machines, storage systems, supportingfixed assets, among others. An effective layout should not only representoptimal physical arrangement for space-saving but should also be well designedfor reducing material movement and labour movement. The development of anefficient plant layout results in smooth workflow across the productionprocess, improved production efficiency and ensures 10–12 per centspace-saving. An efficient layout also incorporates the varied compliancerequirements such as safety, health and environment (SHE) norms and is avisually appealing factory. Thus, preparing an efficient factory layout that isboth compliant and productive at the same time is very critical.

4. Technology

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In this developing world, technology has become anessential part of running any business. It is crucial that garmentmanufacturers introduce timely technological advancements in order to ensureproduct quality and sustainable growth. In most of the cases, an automatedmachine reduces manual intervention, thus resulting in direct cost savingsbecause of the reduction in labour costs. In addition to reduction in manuallabour, some additional benefits of automation include better quality,energy-saving, reduced breakdown and inventory control. Usually, technology isoften associated with high-tech machines with robotic systems. However, evensimple use of folders and guides can help in automation to some extent. Also,technology is not just limited to automated sewing machines but also entailsapplication of software, which find applications in real-time data analysis,visual fits and transparency in the supply chain. However, technology adoptionmay not be the same for all garment manufacturing set-ups. A highly automatedmachine might not prove to be advantageous for all product categories andset-ups and hence, level and type of automation should be chosen very wisely.As it has a direct impact on capital investment and operating expenses, itshould be evaluated in detail.

5. Training and HR

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Training and human resources are crucial for anylabour-intensive industry and garment manufacturing is no exception. It isalmost impossible to produce a quality product without a trained workforce.Understanding the importance of training and HR, the Indian garment industryconventionally has been employing standard methods of training, which involvesfour weeks of basic training for unskilled people. The basic aim of suchtraining programme is to impart technical skills required for production.Research suggests that soft skills are equally important for ensuring high performance.However, little emphasis has been paid towards soft skills, which includesmotivation, health and hygiene, group behaviour, self-management, and time andteam management. Given the criticality of training, modules such ashighperformance training envisions skilling, wherein 80 per cent of the labouris multi-skilled and most of them can be made certified trainers as well. Giventhe criticality of contribution of workforce in the garment industry, skilldevelopment with special emphasis on high-performance training becomes animportant factor for success.

6. Informationtechnology tools

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Today, information technology has become an integral partof the apparel industry. The data collected on a shop floor can be fullyutilized only if it is analysed properly to arrive upon strategy-definingresults. Modern software provides manufacturers with the ability to monitor andcontrol almost all the aspects of their business from anywhere in the world.Software establishes a single-user interface with a centralized database forthe proper flow of information among various departments of the garmentfactory. It facilitates planning and coordination between different functionalareas within a manufacturing unit and maximises the value realisation by integratingsupply chain operations within and outside the garment factory. The softwarealso helps in identifying and controlling the root causes of delays whileproviding strategic insights to solve the identified issues. Also, withreducing lead times, a manufacturer cannot afford to spend much time in findingthe problems and this is where software helps. For example, real-time data of asewing line quickly alerts the production manager to take corrective actions incase of reducing output. Hence, software not only stores the data forcalculating outputs at the end of day but gives real-time analysis to monitorit continuously. However, given the wide variety of software solutions offeredby several companies, it is very important to cautiously match the needs of theorganisation with the offerings by the software.

7. Buyers' tie-ups

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With emerging garment manufacturing countries such asBangladesh and Vietnam, India is facing a stiff competition to maintain its globalstanding. In such challenging situations, developing long-term partnershipswith buyers is the best way to grow and sustain the business. Considering thegrowth of apparel consumption globally and in India, investments in suchtie-ups will reap benefits in the long term. These long-term partnershipsmutually benefit both manufacturers and buyers. While benefitting the brandswith a reliable destination to source from, it helps manufacturers increasetheir profitability by strengthening their brand value, ensuring flow of ordersand decreasing the risk of any stalled inventory.

8. Customer service

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Customer-centricity is no more just related to theservices sector; rather, it is transforming most of the manufacturingbusinesses. For garment manufacturers, it is important to not only manufacturethe right products at right time, but also cater to the changing requirementsand have a service orientation such as customer resolution management, beingflexible and adaptive to new designs, and having internal quality audits. Withchanging buyers' demands such as short product lifecycles and high number ofstock-keeping units, it is important that manufacturers form long-termpartnerships with brands to ensure that they are both aligning and upgradingthemselves as per buyers' needs.

9. Product development

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Product development is the lifeline for adding new buyersas well as retaining the existing ones. With product strategy being a vitalpart of the overall business strategy, it is vital for garment manufacturers toadapt to global requirements. Product development not only includes adapting tochanging product design and requirements but also adhering to the short productdevelopment cycle. Modern innovations such as digital product developmentprocess using virtual technologies, provide the opportunity for companies toshrink the product development cycle time from months to days. Also, with theconcept of long-term partnerships, buyers prefer to source multiple productsfrom a single manufacturer who can cater to different products. Suchpartnerships ensure a consistent supply to brands as well as ensureprofitability for manufacturers through consistent flow of orders. Hence,product development is not just one key success factor but an inevitable partto survive in this global competition.

Noindustry is easy to break into and it remains true for garment manufacturing.For any garment manufacturing unit, the aforementioned points are pivotal forsuccess. As per our analysis, a 250-sewing machine factory can lose 2.5 lakhpieces in production and ₹ 2.5 crore in profits every year due to basic underlyingfaults in manufacturing systems. It is, hence, important that garment factoriesare planned keeping these factors in mind. Given the supportive governmentpolicies and India's strengths as an apparel manufacturer, we strongly believethat the opportunity for apparel manufacturers is beyond question. It is just amatter of manufacturing efficiently with a defined strategy.