Global apparel manufacturers need to develop new capabilities in both pre-and post-production stages to remain competitive and profitable, and thus ensure decent work and protect the environment.
The pre-manufacturing areas included research and development, design, product development, material sourcing and logistics while the post-manufacturing processes are distribution, logistics, marketing and retails.
International Trade Centre (ITC), a joint agency of the World Trade Organization (WTO) and the United Nations (UN), made the observations in its latest guidebook titled 'Good Practices in the Global Apparel Industry'.
Published last month, the book said: "International trade in textile and clothing is characterised by increasing competition and declining prices."
At the same time, garment manufacturers are facing several other challenges, including addressing sustainability concerns, improving speed to market, being able to supply smaller quantities per style, becoming digitally versatile, ensuring health and safety in the workplace and offering new designs, among others.
"To remain profitable, garment manufacturers, mostly SMEs, must readjust their business model by offering better services and value to their customers while controlling costs."
The ITC compiled this guidebook of good apparel industry practices
that can help SMEs and business support organisations (BSOs) address all critical areas along the value chain, including adapting to the changes imposed and accelerated through the Covid-19 pandemic.
It also provides guidance on how to improve against industry standards.
The guidebook covers 28 good practices with 33 case studies along the value-chain stages of design and pre-production, production and quality, social and environmental sustainability, branding and marketing as well as institutional and sector-level good practices.
Half a dozen good practice cases from Bangladesh are cited while more than a dozen from India. The rest are taken from Sri Lanka, Turkey, Thailand, Ethiopia, Vietnam, and Jordan.
Bangladesh's good practices include establishing product development capabilities to move up the value chain, reducing labour costs by deskilling the operation and female supervisor leadership programme that promotes gender balance.
Absenteeism rate reduced from 3.35 per cent to 1.09 per cent while average monthly staff turnover declined from 3.90 per cent to 2.72 per cent at DBL Group in Bangladesh which is known for its proactive measures for employee engagement, it said.
The management realised that a significant part of the workers' earnings is spent on buying groceries from local vendors and medical consultations and medical supplies.
Many times, the workers do not have sufficient funds to spend on these items and must borrow money.
"Poor nutrition and health also increase absenteeism and attrition of workers. To address these challenges, the company decided to set up a fair price grocery shop and a pharmacy, and look at other measures that will make them an employer of choice among workers."
The group's water-saving practices resulted in a fabric-to-water ratio 1:55. In 2010, it consumed 120 litres of water to process 1 kg of fabric, according to the ITC book.
DBL was able to save 1.22 billion litres of water and 2.4 million kilograms of dyes and chemicals in 2016 alone, compared to 2010, it noted.
Fabrics tend to be the largest cost component in garment manufacturing as it can go up by 50 per cent to 70 per cent of garment-making cost. Hence, any effort to reduce manufacturing costs in the garment industry must include fabric saving opportunities.
The ITC book said that 3.0 per cent saving in fabric cost could result in about 2.0 per cent manufacturing costs of the factory which can also significantly improve the profit margin of a company.
Another Bangladeshi factory has reduced its defect rate to 4.56 per cent from 12.82 per cent by implementing the Zero-defect operator programme.
Participation in the safety programme improved another factory's safety parameters, it showed.
It also recognised Bangladesh Garment Manufacturers and Exporters Association (BGMEA) for its effective management of industry association, saying BGMEA, over the decades, has provided much-needed leadership to the industry as it propelled itself to the position of second-largest global exporter of apparel.
