FROM THE ED­I­TOR-IN-CHIEF’s DESK…

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When the go­ing gets tough, the tough get go­ing…! This ageold say­ing is as true to­day as it was the day it was coined…; in fact, maybe even more rel­e­vant to­day!

When the gar­ment ex­port busi­ness was flour­ish­ing, mar­gins were very high and the Govern­ment treated the in­dus­try with kid gloves be­cause they were earn­ing the much needed for­eign ex­change. There was a sense of pride in be­ing as­so­ci­ated with the in­dus­try.

With time the sit­u­a­tion changed… Many fac­tors took the sheen away from gar­ment ex­ports and the first was the in­creas­ing com­pe­ti­tion; com­pe­ti­tion from new com­pa­nies within the coun­try, from emerg­ing cheaper des­ti­na­tions like Bangladesh and new for­eign ex­change earn­ing busi­nesses like IT and Pharma.

This was fol­lowed by a change in the busi­ness en­vi­ron­ment – quota went, the busi­ness lost its pri­or­ity sta­tus, and many ben­e­fits like no in­come tax were with­drawn. On top of this, many lo­cal is­sues re­lated to Govern­ment pol­icy and outlook to­wards the in­dus­try ad­versely im­pacted the in­dus­try.

And as if the in­dus­try was still in need of a nail in the cof­fin, the global mar­kets went into re­ces­sion and prices dipped dras­ti­cally. Even though the mar­kets are re­viv­ing now, prices are still mov­ing down­wards, prac­ti­cally killing any hope of earn­ing a mar­gin that makes it not worth-while for many com­pa­nies to keep their fac­to­ries run­ning.

The fi­nal blow that has come in the form of re­duc­tion is duty draw­back and a com­plaint filed by the US at the WTO about In­dia’s ex­port sub­sidy pro­grammes, which has only added to the un­cer­tainty.

Ex­porters are re­ally strug­gling; many ad­mit that the duty draw­backs were the mar­gins that they could play with, as buy­ers are not will­ing to budge on prices. More so, with other es­tab­lished des­ti­na­tions and emerg­ing des­ti­na­tions of­fer­ing prod­ucts at lower prices, the com­pe­ti­tion is re­ally nail-bit­ing. In this sce­nario, it is the tough and fun­da­men­tally strong com­pa­nies that are con­tin­u­ing to grow. Though all ad­mit, in­clud­ing those who are do­ing well, that con­di­tions are chal­leng­ing and do­ing global busi­ness is not easy any­more, the end is cer­tainly not near.

What is re­quired is to go back to the fun­da­men­tals of busi­ness and re-in­vent the fac­to­ries with a fresh per­spec­tive. Qual­ity, timely de­liv­er­ies, com­pli­ance are all given, no one can play with them…, and so what is it that ex­porters can add or do that will make them stand out?

Well for one, they can im­prove their sys­tems for bet­ter pro­duc­tiv­ity, cut down on over­heads that are only adding to the cost, and not the value of the prod­uct, be­sides train­ing work­ers for ef­fi­cien­cies and us­ing au­to­ma­tion where the work is repet­i­tive and not skill based but out­put can be sub­stan­tially im­proved, like but­ton at­tach­ment, loop at­tach­ment, pocket set­ting, etc… Work­ing on in­ter­nal ef­fi­cien­cies is more im­por­tant than ever be­fore, and more con­certed ef­fort in this area is re­quired.

Of course hav­ing a niche prod­uct helps, but not by it­self… It is also im­por­tant to of­fer ser­vice – ser­vice that is re­spon­sive, and adds value to the ex­pe­ri­ence that a buyer has in plac­ing an or­der with any ex­porter…; an ex­pe­ri­ence that brings him back, time and again.

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