Building on the foundation of low wage rate, our RMG sector has been labeled by foreign buyers as a low cost hub for high volume product sourcing. This is quite ironical that we are proudly selling ourselves as the cheapest human resource to ensure our growth driver RMG to stay competitive in the global market. Barely, we are thinking of the changes this sector will encounter after the much-talked graduation to a developing economy. Most importantly, the cultural-shock in RMG sector involving this paradigm shift will demand proper preparedness and if not doing so, the worst hit will be faced by our 4 million workforce in this sector largely due to low productivity coupled with lack of skills development schemes.
RMG ECOSYSTEM AT REGIONAL PEERS
Bangladesh: Largely due to its low wage rates, lower cost of utilities and preferential trade agreement with EU, Bangladesh excels at supplying large quantities of apparel at low costs. Our specialisation ranges mostly in low-value and value for money price segment. However, Bangladesh has had issues on compliances and on time delivery.
Vietnam: Due to high foreign investments (predominantly from China) and joint ventures which bring along technical know-how and expertise, Vietnam has grown its apparel exports significantly. Moreover, these factors coupled with supportive government policies have provided added advantage for the growth of textile ecosystem and infrastructure in the country and making it globally more competitive compared to other sourcing destinations.
Sri Lanka: Despite higher living wages, Sri Lanka has emerged as a large player in global apparel market owing to its product portfolio, which largely accounts for higher-value, niche products. It has a large skilled workforce, which allows it to produce specialised products. Sri Lankan factories have been focusing on sustainability and compliance for a long time. While, these initiatives have helped create better value to the customers, it has also resulted in optimising the costs of manufacturing.
India: India's status as an apparel sourcing destination owes to its strengths namely, abundant supply of raw material, vertically integrated supply chain, expertise in value added apparel manufacturing, availability of skilled manpower and well-established relationship with key global buyers. India, in contrast to most of the other Asian peers - has the advantage of a very rich heritage of Textiles.
SKILLS DEVELOPMENT IN RMG SECTOR: Competitiveness in the global apparel trade is primarily challenged by lack of scale in garment manufacturing due to workers skill-set. Then comes seasonality (manufacture only certain product categories), inadequate capability in the synthetic value chain, limited number of preferential trade agreements etc. Coming to Bangladesh, our garment export industry is seasonality driven, leading to full capacities for season-specific production and evidently, competing nations have different skill regime to suit their local, cultural and commercial factors. Bangladesh is no exception in this case.
The workers in garment industry are generally classified as unskilled, semi-skilled, skilled and highly-skilled. Usually skilled and highly skilled workforce at a factory floor performs critical operations such as collar attachment, sleeve placket attachment etc., which require certain set of expertise and know-how. Without the right set of skills, these operations cannot be performed and if performed wrongly, it would result in rejections and wastages. Without the requisite workforce to perform these operations, factories would face delivery delays, quality issues and bottlenecks at production floor. So it is of utmost importance for factories to have workers across different skill levels right from unskilled to highly skilled level to ensure smooth operations, quality and timely delivery.
Studies found that each country has developed certain skill levels to match the product categories they manufacture. The clients place orders for certain product categories with these countries to match the existing skill levels of the workforce in these countries. India owing to its relatively higher skill levels, caters to value added products which are low to medium quality with certain level of value addition. In case of Bangladesh and Vietnam, the skill levels have been developed over the last 1-2 decades and these countries predominantly cater to basic products.
THE CASE OF BANGLADESH: Bangladesh has a multi-pronged skill building approach involving various government agencies, private institutions and industry. Some of the key initiatives are Centre of Excellence for Bangladesh Apparel Industries (CEBAI), Bangladesh Skills for Employment and Productivity (B-SEP) etc. The skills development system in Bangladesh can be classified into five main segments:
* Public (Delivered to various degrees by numerous ministries)
* Private (Receive a government subsidy e.g. grant)
* Private (Commercial training institutions including madrashas)
* Non-government and Not-for profit institutions
* Industry-based / Brands (institutions managed by industry and training delivered in the workplace, including apprenticeships)
However, stakeholders are putting their concerns regarding the much talked shortage of about 1.47 lakh skilled manpower from floor to the executive level. This, eventually, compels the factory owners to engage expatriate employees in different positions such as CEO, CFO, general manager, senior manager, head of dyeing, head of washing, and head of quality assurance.
Moreover, industry insiders predict that universities, technical institutions can provide textile and garments-related education to around 25,000 to 30,000 people, which is way too inadequate considering the requirement of the industry. Another concern blown by industry leaders that the RMG sector will need eight hundred thousand specialised employees by 2021 will be very difficult for factory owners to source locally. Moreover, they suggest that the sector will need 1.89 lakh graduates and textile experts for top positions by 2021 while Bangladesh will be able to produce around 40,000 by the time.
AREAS NEEDING SPECIAL FOCUS IN THE CONTEXT OF BANGLADESH
Entry-level skills: These should continue in the current form of existing guidelines of Integrated Skills Development Scheme.
Up-skilling: Up-skilling is extremely important to drive productivity. Only entry-level training is not sufficient to build productivity and efficiency. Existing workforce need to work at a better skill level with operational capability across different operations at production floor to contribute to overall productivity in the factories.
Training of Middle Management: Middle management i.e. supervisors, section in-charges, quality controllers, industrial engineers etc. are the backbone of any garment factory and need to be trained on best practices, by allocating at least 2 hours on a daily basis.
Vocational Education: Vocational training should be given high priority and should be accepted as a university degree/diploma for apparel manufacturing.
To combat the aforesaid challenges of our growth driver, there's no best alternative than re-skilling the whole sector starting from human resources to machine resources. As a whole, preparing updated curriculum, conducting need-based research, establishing teachers training centres and knowledge sharing platforms, capacity development of mid level managers, making bridge between industry and academia and adopting paradigm-shift in policy crafting are the building blocks to embrace upcoming changes and shifts.
Sabbir Rahman Khan is Research Associate, BFTI.