Passing the quality test

The industry is becoming aware of the various tools to address issues of productivity, costs, quality, efficiency, etc. Reena Mital, Sudha Swaminathan find out how best the sector is using such tools.

Productivity, labour, production costs, efficiency, quality, logistics, environment norms, are areas that are being addressed by the industry to gain a competitive edge. This is being done by getting certifications such as ISO 9001, ISO 14001, SA 8000, OHSAS, etc, and also by implementing certain TQM solutions, ERP solutions, etc. It is an established fact that such tools if implemented in the right spirit result in huge savings, and enable companies to meet their targets.

The Indian textile and clothing industry is realising the benefits of using such tools, and demand especially for the various certifications is going up each year. And it is not just the big and well established units that are extensively making use of these, but awareness has percolated down to the smaller units too.

For instance, Siyaram Silk Mills, a long established textile company, has got one of its five units ISO certified. Preparations to get the remaining four certified is on. Similarly, Donear Mills, another very flexible unit, conducted all the internal audits and put in place all the necessary systems and processes required for ISO certification, but did not go in for the certification, it is learnt. This is because implementing and following the system itself will start to bring in the results, point out experts.

Speaking to Express Textile, Dr A N Desai, director, Bombay Textile Research Association (BTRA), said, “This is a very encouraging trend, smaller companies are also going in for certifications and audits. From the time BTRA started this service, we have helped 40 units in getting ISO-9001 certification. This year, as many as 12 companies approached us for this service, double that of last year. And many of these are in the decentralised sector.”

According to him, while demand for ISO-9001 certification is good, response to ISO-14001 has not been the same. “Siyaram Silk Mills is showing interest in this certification. But generally this and SA 8000 are buyer-driven.”

Social compliance is followed more by the RMG sector, but is adopted by garment exporters at the insistence of the buyers and not voluntarily. Nevertheless, certain fundamental aspects which are prerequisites to social compliance are falling in line. For instance, there has been transformation in the recent times on social security benefits to workers like ESI, PF, etc. “This was a major impediment for the industry on social compliance and now most of the companies are doing it. However, on the restructuring of the working hours, still the textile industry has to go a long way. Unless the government initiates changes in labour laws, things will be difficult for the industry. Our laws permit eight working hours and two-hour overtime in a day. Given this, it also says that OT should be not more than six hours in a week and 50 hours in a quarter. That way, Indian labour laws are very tight when compared to that of its competitors,” says Mr B N Sandeep of Conquest.

With too many codes of conduct floating around, each being framed by individual buyers, exporters are under pressure of meeting too many procedures. “All the importers should come under a common platform and frame a common code of conduct, which would be very easy for the industry to adopt. It would also encourage many exporters, especially those in the small and medium level, who hitherto have not put in place any systems to bring in some manufacturing discipline. We expect this (common code of conduct) to happen, once the industry is mature, but a definite period cannot be fixed. Already things are moving in this direction. Social Accountability Institute and Ethical Trading Initiative are working together to bring a common code of conduct which would complement each other,” he stated.

Concurs Mr R R Gorakhia, director, TQM, Textiles Committee, “The RMG exporters do not really need such certifications, at least when dealing with existing buyers, as exporters are meeting the standards and requirements of these buyers already. These certifications would mean a duplication, as buyers will not do away with their codes of conduct. But, for tapping new buyers, ISO certificates, etc can become minimum qualifications. Even then a new buyer will insist on implementing his own codes. Tools like time-motion studies, general sewing data, etc can be used by the RMG sector, which will help it to improve productivity and reduce costs. Unfortunately, this sector has always talked about cost cutting and not cost reduction which requires a planned approach.”

States Mr Atul Ujagar, country head, Nike, “Systems to improve productivity, quality, lead times are very important for international buyers like Nike. Indian suppliers will need to strike a balance between four key components - price, quality, delivery, corporate compliance. And all this can be achieved only if the right processes and systems are in place. There are a number of tools for this, 6S, Kanban, Kaizen, warehouse management solutions, etc.”

He further stated that this becomes even more important considering that every major buyer is cutting down its supplier base drastically. “Presently, Nike sources from 284 factories across 38 countries. This will be brought down to 100 factories in 16 countries. That means only the most efficient factories will be able to supply to the major brands.”

Even as international buyers are clearly stating that suppliers with good management and production practices would be preferred, certifications such as ISO are not growing too fast. ISO certifications are growing at the rate of 6-7 per cent per annum, but could go down in the years to come, point out experts. “Also, demand for ISO-14001 standard has not really picked up because this involves investing in certain equipment and infrastructure. Some of the big process houses have got this certification, but there are a number of smaller, independent processing units, which have not evinced much interest in environmental standards. In the south, due to the intervention of the judiciary, the processing industry is now investing in setting up common effluent treatment plants, reverse osmosis plants, etc,” said Mr Gorakhia.

According to him, “We have been trying to make the industry, specially the SMEs in the various clusters, aware about the benefits of systems and processes. This has definitely helped a lot. The Committee has helped as many as 232 units to get certifications, and another 120 units are in the pipeline. This has been possible due to the large network we have.”

Similarly, the Committee has introduced the integrated management system, which has been very successful in Karur. “Here 11 companies have gone in for this system,” Mr Gorakhia informed.

However, he pointed out that even as so many units have gone in for some form of certification, this has been a superficial exercise many times. “The systems and processes are put in place, but are not followed after some time. These systems are not integrated with the business objectives. Such tools require a change in the working pattern of the organisation, and involvement of each employee, that does not happen always. The industry has a reactive approach rather than a proactive one.” Sources point out that many a times, units get certified within 3-6 months, even as the time for preparing a unit and internal audits, etc leading upto the certification takes at least a year.

Concurs Mr E L Paulo, executive director, Synthetic and Rayon Textiles Export Promotion Council (SRTEPC), “We are a service organisation, but we felt there was a need to go in for an ISO certification, as part of our restructuring process. Our aim was to provide prompt service to the industry, to give easy access of information to members, etc. We completely restructured our filing systems, a very important component in giving out information. Every employee of the council was involved in the entire exercise, training sessions were held, internal audits were conducted by the Textiles Committee, and finally we approached the certifying agency, and were awarded the certificate. All of this took almost a year to complete.”

He further stated that following the systems and processes has led to immense savings in time for doing the various jobs, and service to members has improved substantially. SRTEPC is the second export promotion council in the country to get an ISO certification, and the first textile EPC. “With quotas no longer the main job of the EPC (though this was not truly the case with SRTEPC), we had to redefine our role, and improve our services. And this certification has helped us a lot. Also, in a remote way, we also wanted to set an example for the industry, as such tools are extremely important in the manufacturing and export sectors to gain competitiveness.”

It is learnt that a number of manmade fibre textile manufacturing companies have either already got certified or are working in that direction. Most of these are not huge textile companies.

Says Mr V K Bhartia, president, textile division, Raymond, “Certifications, audits, ERP solutions, management solutions, etc are not limited in their use to just big, strong companies. These could prove more useful to the smaller units. However, leadership is the most essential requirement for any company, irrespective of size, going in for such systems. If there are good leaders the systems will be successfully implemented and followed, and the benefits will accrue.”

Meanwhile, it is not just the textile and clothing manufacturing industry that is going in for these tools, but many textile bodies are also opting for them. For instance, The Indian Institute of Carpet Technology, TEA-NIFT, have already received ISO-9001 certification with the help of the Textiles Committee. The Committee is now working with the Apparel Export Promotion Council for the same.

“The retail sector is also showing interest in such certifications. We are working with Chennai Silk, which has outlets in seven centres in the south, for getting ISO 9001 certification. The focus here is on customer relationship management. Similarly, a wholesale trader in Surat has also opted for ISO certification. This has helped the trader to bring down rejection rates, improve customer satisfaction, get better realisations and thus improve business. TEXPROCIL is also showing interest in ISO certification.”

Benchmarking, another tool that is being developed by the International Trade Commission (ITC), is also expected to become available to the RMG sector within the next 3-4 months. “We are working on the web version of this, as the RMG sector was a big apprehensive about sharing its business information with a government agency. Through the web version, companies can directly put in the information online, without the need to submit the same to our partner association, Textiles Committee,” said Ms Rupa Ganguli, consultant, ITC.