Fac­ing chal­lenges in em­broi­dery busi­ness…?

Wil­com ad­dresses the is­sue with so­lu­tions

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In early 1990s, when Wil­com en­tered the In­dian mar­ket, the em­broi­dery in­dus­try was over­whelm­ingly ex­port-fo­cused, pro­duc­ing cor­po­rate iden­ti­fi­ca­tions, lo­gos, names – some­thing it col­lo­qui­ally calls the ‘left-chest em­broi­dery’. The do­mes­tic mar­ket was also mostly fo­cus­ing on em­blems and lo­gos. More­over, there was a clearly dif­fer­ent mar­ket and in­dus­try seg­ment, based on Schif­fli ma­chines that pro­duced con­tin­u­ous em­broi­dery lace for cur­tains, bed­sheets and to some ex­tent, fash­ion gar­ments.

Ini­tially, the em­broi­dery in­dus­try was dom­i­nated by Ta­jima, Baru­dan, ZSK and later SWF, all of which were con­sid­ered ro­bust, long-last­ing ma­chines, pro­duc­ing high qual­ity em­broi­dery. Sig­nif­i­cantly, the in­dus­try went through rapid and fun­da­men­tal changes in the decade be­tween 1995 and 2005. And the game changer was the en­try of low-priced Chi­nese multi-head em­broi­dery ma­chines that were about 70-80 per cent cheaper than the high-qual­ity brand with equiv­a­lent size. This caused ma­jor dis­rup­tion in the in­dus­try. “By the early 2000s, there were more than 30 Chi­nese ma­chine brands im­ported to In­dia; the im­port of such ma­chines peaked at about 30,000 ma­chines in a year in the mid-2000s, mostly land­ing in Su­rat which be­came the most con­cen­trated em­broi­dery hub in the coun­try,” shares Janos Horvath, Vice Pres­i­dent (In­ter­na­tional Sales), Wil­com.

Dur­ing the same time, In­dian econ­omy en­tered a new phase and a siz­able mid­dle-class with strong eco­nomic power and money to spend started to emerge. Tra­di­tion­ally, In­dian dresses used to be em­bel­lished by hand em­broi­dery, and mir­rors; stones and se­quins were at­tached by hand and only the wealthy could af­ford such heav­ily em­bel­lished dresses. With the en­trance of Chi­nese ma­chines, em­broi­dery be­came a ma­jor mass pro­duc­tion in­dus­try for the new emerg­ing mid­dle-class. Adding fur­ther strength, multi-head em­broi­dery ma­chines de­vel­oped wider frames, smaller head-space and had many new spe­cial de­vices (se­quins, cord­ing, tap­ing, bead­ing, laser, etc.), which ex­panded the use of these ma­chines into the in­dus­try seg­ment that was tra­di­tion­ally schif­fli only, as now, the same job could be done in any nor­mal work­shop. These changes meant that In­dian em­broi­dery in­dus­try shifted gear from western, ex­port-fo­cused dom­i­nance to do­mes­tic mar­ket-driven one. Over the past 20 years, there has been a flood of Chi­nese ma­chines, some of which pro­duce em­broi­dery of stitch­ing qual­ity, com­pa­ra­ble to the high­lyre­spected lead­ing brands. With so many new en­trants in the mar­ket, the stitch qual­ity ex­pec­ta­tions dropped sharply in the late 1990s and through the decade in the 2000s. This was not an In­dian but a world-wide phe­nom­e­non. “We could see many em­blems and cheap tourist gar­ments with shock­ingly bad qual­ity em­broi­dery. Back in the mid-1980s, one of the clients of Wil­com pro­duced badges for the US Army wherein the qual­ity re­quire­ments were so ex­act that the num­ber of stitches in each part of the chevron were spec­i­fied and not one less or more stitch was ac­cepted by Qual­ity Con­trol,” elab­o­rates Janos.

With time, the mass pro­duc­tion is giv­ing way to small quan­ti­ties; there­fore, the over­head is be­com­ing pro­por­tion­ally higher and higher. Now, one needs to have ex­tremely good un­der­stand­ing of cost­ing of the prod­uct be­cause 1-2 per cent dif­fer­ence in price in a quo­ta­tion can mean ei­ther los­ing the or­der to com­pe­ti­tion or get­ting the job but mak­ing a loss on it. This is more char­ac­ter­is­tic to high labour cost in Western coun­tries. In­dian com­pa­nies have not been ex­posed to such sharp cost sen­si­tiv­ity and prob­a­bly do not mon­i­tor their costs to such de­tail. Gone are the days when the Gov­ern­ment in­cen­tivised the in­dus­try, labour was cheap and also the buy­ers were not very tight on pric­ing.

“By the early 2000s, there were more than 30 Chi­nese ma­chine brands im­ported to

In­dia; the im­port of such ma­chines peaked at about 30,000 ma­chines in a year in the mid-2000s, mostly land­ing in Su­rat which be­came the most con­cen­trated em­broi­dery hub in the coun­try.” – Janos Horvath, Vice Pres­i­dent (In­ter­na­tional Sales), Wil­com

Fis­cal dis­rup­tion is an­other is­sue that has caused mar­ket dis­rup­tion. Ev­ery econ­omy has to have a bal­ance be­tween the money avail­able and the goods of­fered in the mar­ket. In the past decade, it seems that the In­dian econ­omy had lots of money for in­vest­ment and this in­creased ma­chine im­port that tied down this sur­plus money. A large part of this money that the tex­tile/ap­parel in­dus­tries, in­clud­ing em­broi­dery have is cash based (not the ex­port mar­kets, though). The In­dian Gov­ern­ment’s two ini­tia­tives – De­mon­eti­sa­tion and GST – in the past two years cre­ated lots of dis­rup­tions in the in­dus­try, and man­u­fac­tur­ers had dif­fi­cul­ties with re-ad­just­ing their busi­ness mod­els and pro­cesses, es­pe­cially to learn new ac­count­ing pro­ce­dures and man­age the busi­ness with less cash. Though, both these poli­cies are good for over­all econ­omy in the long-run, ad­just­ment will take time. The de­val­u­a­tion of ru­pee as against the dol­lar of late has also dis­rupted the abil­ity to im­port ma­chines.

So, what to do to be more com­pet­i­tive?

In­crease pro­duc­tiv­ity, re­duce cost: This means, mea­sur­ing costs very ac­cu­rately. Work smarter and not harder! Many own­ers are look­ing for cheaper labour, but this will not work for­ever. What you need to do is to get more pro­duc­tiv­ity from the work­ers by bet­ter or­gan­is­ing the work and re­duc­ing down­time on the ma­chine by re­duc­ing thread breaks and also ma­chine break­downs. Bet­ter han­dling and stor­ing of fab­rics, threads can also re­duce down­time. Many fac­to­ries are very dusty; this re­duces ma­chine per­for­mance and in­creases down­time. Air-con­di­tion­ing may be con­sid­ered costly but it may in­crease qual­ity, so you would get bet­ter pay­ing em­broi­dery jobs. Clean­li­ness and tidi­ness at the fac­tory floor in­crease the work­ers’ aware­ness to qual­ity is­sues. Reg­u­lar train­ing on qual­ity also helps. Or­gan­is­ing the work­ers into com­pet­ing teams is a very good prac­tice. Show­ing the score of the ‘green team’ and the ‘red team’ ev­ery week in re­duc­ing ma­chine down­time and wastage, etc. is a very good mo­ti­va­tor.

One is­sue with the tex­tile-ap­parel in­dus­try is that it tra­di­tion­ally em­ploys some of the low­est skilled labour force in any coun­try. There­fore, in­creas­ing pro­duc­tiv­ity through train­ing is usu­ally a dif­fi­cult quest es­pe­cially be­cause of the high turnover of work­ers.

Still, pro­duc­tiv­ity in­crease can be achieved by cre­at­ing smart work­flows in the fac­tory where goods travel in one di­rec­tion, ma­chines are placed er­gonom­i­cally, so one worker can at­tend to two ma­chines, job prepa­ra­tion ar­eas can be cre­ated speed up the re­place­ment of fab­ric and frames on the ma­chines and so on. Such im­prove­ments have to start from the man­age­ment and trickle down to the work­ers and not the other way round.

Cre­ate a brand name: ‘Make in In­dia’ is an ex­cel­lent ini­tia­tive. But ‘In­dian Ex­cel­lent Qual­ity Em­broi­dery’ is not what we are aware of, but it should be a long-term goal for fac­to­ries. Years ago, the ‘Just In Time’ sys­tem was very pop­u­lar, as through ex­cel­lent or­gan­i­sa­tion and pro­cesses, this re­duced the cost of stor­age of parts. Many Western buy­ers pre­fer to place an or­der and get it to the store only when it is needed. To work this way re­quires a highly dis­ci­plined man­age­ment and work­force. My feel­ing is that most em­broi­dery units do not yet op­er­ate at this dis­ci­plined level, although we can see a new gen­er­a­tion of man­agers start­ing to im­ple­ment pro­cesses that lead in the right di­rec­tion.

Train­ing and ed­u­ca­tion should be the key here. I think the key is to or­gan­ise train­ing pro­grammes first for own­ers and man­agers where the var­i­ous as­pects of pro­duc­tiv­ity of the in­dus­try units are an­a­lysed and shared, so ‘Best Prac­tices’ can be shown. Sec­ond is to iden­tify em­broi­dery skill sets. Gov­ern­ment as­sis­tance: To the best of my knowl­edge, there is no of­fi­cial em­broi­dery train­ing pro­gramme in In­dia, there are no in­dus­try job cat­e­gories (like Em­broi­dery Pro­duc­tion Man­ager, Em­broi­dery Ma­chine Op­er­a­tor, Em­broi­dery De­signer) that would be a part of the na­tional job skill reg­is­ter or train­ing in­sti­tu­tions that would of­fer train­ing for such job skill. The Gov­ern­ment needs to look at the out­sourc­ing process and in­fra­struc­ture, how the buy­ing houses op­er­ate and how the con­tract­ing is man­aged.

One ma­jor is­sue is com­pli­ance. Con­trac­tors must sat­isfy a list of cri­te­ria par­tially en­sur­ing qual­ity and par­tially en­sur­ing work­ers’ safety. In­dian Gov­ern­ment could leg­is­late some gen­eral com­pli­ance cat­e­gories that would un­der­pin the ‘Make in In­dia’ ini­tia­tive and would at­tract for­eign buy­ers.

Janos Horvath, Vice Pres­i­dent (In­ter­na­tional Sales), Wil­com

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