Abstract Accord Alliance:
Manufacturing Readymade Garments (RMG) traditionally accord alliance is a labor intensive but low waged industry. As a labor intensive sector the manufacturing activities are more on man based rather than machine based. Contrary, as this is low waged industry workplace, health and safety always an issue of concern. The sector is economically attractive where human resources are available with lower or minimum cost. Generally, developing or least developed countries are the suitable place for large scaled RMG production. At present, more than 70% share of total global apparel business is holding by south and south East Asian countries where position of Bangladesh is second largest, after China with a share of 6% of world market. With all those achievements, Bangladesh RMG sector has experienced severe industrial accidents repeatedly since its growth stage where many of its workers sacrificed their lives. The fire accidents at Tazreen Fashions at the end of 2012 and the multi-stories building where five factories were housed “Rana Plaza” collapses in early 2013 were the deadliest disasters in the history of Bangladesh and in readymade garment sector in the world. Both the devastating accidents attracted utmost criticism from home and abroad. As a part of global supply chain manufacturing RMG is subject to strict maintenance of compliances regulations and standards. Among the countries of the region, the minimum wage in Bangladesh RMG sector was the lowest. Though manufacturing RMG is a low-skill job yet even after three-decade workers’ productivity in Bangladesh is lower than its’ competitors. Low wage does not help to keep the production cost lower if the workforces are not skilled. On the other hand, in managerial and technical positions many of the factories employ foreign staff to manage the production floors to material sourcing and negotiating with the buyers. Since 2013, especially after Rana Plaza disaster, the sector has been passing a very crucial time due to price and compliance pressure. Moreover, Bangladesh RMG sector will lose LDC-specific benefits in 2027 like duty free access in the form of General System of Preference (GSP) to European Union, which is one of the major attraction for the importers. To face all those challenges much more needed to be sustainable. Considering the importance of the problem, an in depth and immediate study is needed in this particular area which is still missing. If the sector fails to address this crucial issue, then i the present business share.
Key Words: Readymade Garments (RMG), Productivity, Efficiency, Sustainability
Introduction:
Started its journey during 1980s Bangladesh RMG had achieved 3rd position in the global apparel market in the year 2010. Both product and market diversity happened in a large scale during 2009 – 2013. Initially the export strategy of Bangladesh RMG sector was product penetration; limited to two major markets – EU and USA. During FY 2012- 13 exports have expanded in some 25 new destinations, which was around 20% of total apparel export. In its 2012 article “Bangladesh: Next Hot Spot for Apparel Sourcing?” Mc Kinsey & Company, an American worldwide management consulting firm, forecasted export-value growth of 7 to 9 percent annually within the next ten years, so the market will double by 2015 and nearly triple by 2020. The study also mentioned, “all the respondents identified attractive prices as the most important reason for purchasing in Bangladesh.” (Mc Kinsey, 2012). This study on Bangladesh RMG made the entrepreneurs more aggressive on investment. Many existing factories expanded its capacity and diversified products range. New factories had been set up with more value added products. In the FY 2012-13 total number of factories was 5870 that was the highest number of factories with 4.0 million employments under the two apex bodies, BGMEA & BKMEA (BGMEA Members Directory, 2014-15). Moreover, many RMG subsectors and subcontract factories developed rapidly. The suicidal accidents happened at such a time when different international experts and companies forecasted that Bangladesh exports would double within 2015.
One of the key features of manufacturing readymade garments, as a part of global supply chain, is to maintain strict compliance requirements likes upholding workers’ rights, health safety etc. But all of those requirements did not evolved all on a sudden. Rather different situations in different times compelled the sector to comply with new requirements. Initially, during ‘90s, compliance started with social issues directly related to child labour, workers’ rights and working conditions. After the collapses of twin-tower in New York, USA on September 11, 2001 by terrorist attack, which is commonly known as 9/11 attack, Security issues added as a new compliance requirement through Customs-Trade Partnership Against Terrorism (C-TPAT) audit. Environmental factors came into the compliance audit net due to global warming and climate change issue. In 2013, after two tragic accidents – fire in Tazreen fashions and collapses of multi-storied building – Rana Plaza, a country specific and possibly most critical compliance requirement was imposed on Bangladesh RMG sector, through two different independent and international agreement and legal bindings – The Accord & Alliance on Fire and Building Safety in Bangladesh (the Accord) and The Alliance for Bangladesh Worker Safety (Alliance) by the brands to make their sourcing factories safe and secured. To meet the compliance requirements over the period of time cost of doing businesses has increased. To the buyers, main attraction of Bangladesh to be the major supply base was low manufacturing cost along with compliance standard. In 2013, the sector experienced deadliest accident in the apparel history with the collapses of multi stories building ‘Rana Plaza’. The buyers of the sector imposed strict and expensive compliance requirement in regards to fire and building safety issues. In addition, minimum wage has increased more than double over the period. Many factories have failed to comply those requirements and finally closed. Bangladesh, the labor-intensive industry like RMG had never concern about productivity, as labor wage was the cheapest compare to its competing countries. As wages of the workers are in increasing trend while price of the same products is decreasing. The challenges are not only in context of price and wage issues, the capacity of the mid-level management and productivity of the sector are a big threat for the sector. However, the minimum wage in Bangladesh is still lower than its competing countries but in productivity, efficiency and supply chain, Bangladesh RMG is far behind to many of those competitors. According to a recent survey conducted by CPD, it shows that 16 percent factories (out of 193 sample factories) have employed foreign staff (Textile Today, March 2018). However, the minimum wage of Bangladesh RMG sector is still lower than many of its competing countries but in context to productivity, Bangladesh is far behind than its competitors. Now the question is how the sector is offsetting the increasing production cost with reduced price. Is it productivity or any other factors? The present study has focused on the impact of productivity of the workers of the sector along with the different initiatives taken by the different stakeholders like – buyers, factory owners and government towards the shifting of sustainability.
The Accord, the Alliance and the National Initiative
Since its journey, the sector has faced many accidents of fire, building collapse, labor unrests on different issues including wages hike. There were 21 fire accidents recorded during 1990 – 2012 where 530 workers had died. Among them fire in Tazreen Fashions, on November 24, 2012, was the most devastating in number of casualties where 117 workers were died with more than 200 injured. Three factory buildings had collapsed in between 2005 – 2013 where 1236 workers lost their lives on the spot and thousands of workers were critically injured. Among three the Rana Plaza collapse (where five garment units were housed) on 24 April 2013 was the deadliest structural failure in the country where 1137 workers died and at least 2,500 were seriously injured.
When the garment sector’s reputation, recognition, achievement and trade privileges in overseas markets were at stake due to fire in Tazreen fasions and everyone was busy trying to restore the lost image abroad, another accident took place just after five-month time on April 24 at the Rana Plaza that collapsed with the casualties surpassing all previous records. The then US President Barak Obama, Pope Francis, United Nations Secretary General Ban Ki-moon, ILO (International Labour Organisation) chief Guy Raider and other leaders of the world issued statements on the accident. Western brands have been sourcing their apparels from Bangladesh were seriously attacked by the consumers and rights groups. Once Bangladesh was named a country of natural disaster, after the incidents the country, the 2nd largest RMG exporter after China, was renamed by the different rights group as a country of man-made disasters.
The incident raised big question on business ethics, brands’ responsibility and supervisory system. The fire proved that the government’s supervision and monitoring by third parties were not effective. Those two devastating and deadly accidents were a serious call from the buyers’ side for the sake of their business interest. On 15 May 2013, within less than one month, the buyers mostly from European Union signed “The Accord & Alliance on Fire and Building Safety in Bangladesh (the Accord) on 15 May 2013 and another workers safety initiative “The Alliance for Bangladesh Worker Safety (the Alliance)” was formed on July 10, 2013 by the mostly North American buyers.
Both the initiatives were an independent inspection program and the areas of inspections were concentrated mainly on Fire, Electrical and Structural issues with a five-year action plan. Apart from the inspection a remediation guideline with specific period, health and safety committee with safety complaints mechanism and workers empowerment through an extensive training were the major areas of their activities. The initiatives total covered 2475, Accord 1690 and Alliance 785, factories. There were 188-shared factories where both Accord & Alliance conducted inspection separately. Out of total inspected factories, both the initiatives terminated total 358 suppliers – Accord 182, Alliance 176.
In addition, the government of Bangladesh formed a National Initiative (NI) under the National Tripartite Plan of Action in May 2014 funded by the International Labour Organisation (ILO) where Bangladesh University of Engineering and Technology (BUET) conducted the inspection on structural integrity, fire and electrical safety. The platform, National Initiative, inspected 1549 RMG factories those were not in the Accord & Alliance safety program list.
To meet Accord Alliance’s requirements on safety issue, most of the small and subcontract factories were unable to run, and finally closed. Both the government and the owners have once again moved forward in response to buyers’ initiatives and once again proved that Bangladesh RMG sector stands on a solid foundation.
Initiatives taken by the government
Immediate after Rana Plaza disaster USA suspended GSP facility of Bangladeshi products, though RMG never enlisted with the facility, on June 2013 over safety issue. Considering business risk and criticisms from home and abroad government also took some initiatives to fulfill the conditions to regain GSP facility though in USA market readymade garment was not in the list of GSP facility. The initiatives were taken after Rana plaza disaster were termed as a “Paradigm Shift” by the leaders of the apex bodies, BGMEA & BKMEA. Some named the disaster as “wake up call”. To mark its golden jubilee of independence, government set her vision to upgrade Bangladesh to a middle-income country (MIC) by 2021. In line with the government’s vision, apex body, Bangladesh Garments Manufacturers and Exporters Association (BGMEA) set the “vision 2021” declaring its new target of $ 50 billion export to be reached by 2021 along with “Made in Bangladesh with Pride” slogan in its “Dhaka Apparel Summit” (BGMEA, 2014). An eleven member “Cabinet committee on Garment sector” headed by the Minister, Ministry of Labour & Employment along with different sub committees were formed by the government. The Ministry of Labour and Employment enhanced by creating new posts. The Directorate of Inspection for Factories and Establishments (DIFE) upgraded to a Department. New inspectors, especially female, were recruited for the strengthening of the controlling authority- DIFE. Development partners especially ILO provided training to those inspectors to implement the Bangladesh Labour Law (BLL) more vigorously. The government amended Bangladesh Labour Law – 2006 on 16 July 2013 focusing workers’ rights, safety and welfare. In addition, government formed the National Occupational Health and Safety Policy in 2013. Another enhancement on minimum wages from Tk 3000 to Tk 5300, around 77% implemented since December 2013. Official gazette of Rules published after nine years of enactment of BLL-2006 in 15 September 2015. DIFE has developed publicly accessible database of export-oriented RMG factories. To share workers grievances or any urgent issue with the DIFE hot line (help line) has been setup at Ashulia on pilot basis. The number of trade unions has increased significantly. Fire Services and Civil Defense (FSCD) department under the ministry of Home affairs arranged fire drill and awareness training program for every workers of their listed factories. Government of Bangladesh with the financial assistance from Asian Development Bank (ADB) and other donor agencies has established “Skills for Employment Investment Program (SEIP) in 2014 to develop unskilled and semi-skilled workforces into productive and skilled labour forces. On the other hand, to provide competency based training one of the brands in association with others opened the Center of Excellence for the Bangladesh Apparel Industries (CEBAI) at Ashulia in 2014 to meet the need of skilled labour forces. In addition, many of the buyers have initiated different skill enhancement programs in their sourcing factories. From the factory perspective, many LEED (Leadership in Energy and Environmental Design) certified factories were came up with Lean manufacturing concept to minimize wastage, address environmental issue and new department, Research and Development (R&D) or Industrial Engineering (IE), was introduced to cope with increasing demand of efficiency and quality.
The Remediation Coordination Cell (RCC)
For the continuation of ongoing remediation program after the termination of contract with Accord & Alliance (2013 – 2018), The Remediation Coordination Cell (RCC) was formed in May 14, 2017 under the National Initiative of Bangladesh. In the process of formation two major apex bodies – Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), trade unions and international buyers have been collaborated and consulted. The Cell has consisted with the members from the Department of Inspections for Factories and Establishments, Fire Service and Civil Defense, RAJUK, Chief Electrical Inspector, Public Works Department and Chittagong Development Authority. Additionally private sector engineers have hired as technical expertise. The International Labour Organization (ILO) funded the cell with the assistance from Canada, the Netherlands and United Kingdom. The government is viewing the cell a long term approaches toward safety inspection and licensing body that will provide “one-stop-shop” service across the industries in Bangladesh.
Objectives of the Study
The key objective of the study is to find out the measures taken by the industry to match financial pressure to meet safety requirement by the Accord & Alliance and how the sector is offsetting enhanced wage of the workers?
Research Question
Based on the ground reality of increasing cost and decreasing selling price the main question of the present study is how does the increasing efficiency offset the rising of the production cost?
Methodology
This is an empirical research. The study is based mainly on primary or firsthand data. Factories payroll data and the reports from various departments have been used as firsthand data whereas secondary sources like newspaper, internet articles, books and journals also reviewed. Therefore, the study has applied both qualitative and quantitative method and focus group discussion.
Scope and Limitations
The study did not focus on the number of the factories covered by Accord, Alliance and National Initiative and the standards or checklists of inspection. The study also did not analyze assessment status i.e. inspections findings, corrective action plan (CAP) and remediation progress etc. Rather the focus of the present study was concentrated on the impact of the business very specifically on productivity. First hand data from three different types of factories – Woven top , Knit and Trouser has been used in the study
Rationality of the study
Readymade Garment (RMG) industry in Bangladesh has been playing as a catalyst in Bangladesh economy for more than three decades. Around 83%, USD $ 29 bl, of the countries national export dependent on this single sector. Moreover, 4 ml workforces, which is around 63% of total industrial employment, are directly engaged in the sector where 80% of them are female, according to apex bodies – BGMEA & BKMEA. The sector alone contributes around 12% of the country’s GDP.
In RMG, as a labour intensive sector, percentage of wage is at the top of all cost. Cost effectiveness is the key consideration by the brands for sourcing from Bangladesh. Over the period, the minimum wage has increased many folds. In 2010, the minimum wage of the sector was BDT 3000.00 ($ 37.5). Within three-year time, in 2013, which was BDT 5300.00 ($ 67.00). Since December 2018 this wage has reached to BDT 8000.00 ($100.00) i.e. 167% enhancement since 2013. Moreover, according to Bangladesh labour law, outside EPZ, every year workers’ wage has to increase 5% minimally which is 10% inside EPZs. Enhancement minimum wage has multiple impacts on companies cost, both in regular expenditure like Over Time (OT) benefits, festival bonus and in long-term expenditure like service benefit, gratuity, provident fund etc. Bangladesh produces mostly low-end products. Contrary the price of the products has been decreasing alarmingly. Various studies find that “Bangladesh is battling to keep its position as the world’s second-largest exporter of clothing after China, as it faces intensifying competition from Cambodia, Vietnam, Myanmar and now African countries like Ethiopia as global brands search for cheap labor” (Nikkei, 2018).
Though manufacturing RMG is a low-skill job yet even after three-decade workers’ productivity in Bangladesh is lower than competing countries. Low wage does not help to keep the production cost lower if the workforces are not skilled. “The industry is currently employing 4.4 million workers where our productivity is 77%. This is lower than our main competitors (India 92%, Vietnam 90%, Pakistan 88%).” (Sharif – As- Saber, et al, 2014). In supply chain, compare to other RMG manufacturing countries Bangladesh has some in-build limitations due to geographical location. It takes 3 to 7 days to in-house the required materials from China to Vietnam, Cambodia and Myanmar while it is around 30-day time to Bangladesh. In addition to time, supply chain system is affected for so many other reasons. Say, due to supply chain uncertainty, a 20 lac pieces/month capacity factory confirms order 25-30 lac pieces. When everything is well managed, factory goes for EOT and/or subcontracting for excess work volume to cope with lead time. When supply chain does not function well due to delay receiving of materials, quality or quantity and approval issues again factory goes for EOT or holiday work to meet the shipment dead line. The factory gains in 1st situation as they earn more money from subcontracting but it loses in 2nd situation as they have to pay double as EOT or holiday payment for regular work. After Rana plaza disaster and in presence of Accord Alliance finding a subcontract factory is near impossible and no buyer does allow substandard subcontract factories. “The once booming opportunities for subcontracting have nearly evaporated following the nation’s deadliest back-to-back industrial disasters, the 2012 Tazreen Fashions fire and 2013 Rana Plaza building collapse” (Mirdha, 2018).
Table 1.00 : Decreasing Small Factories, Increasing Large Size Factories
| Grade | Worker Range | ’14-15 | 15 -16 |
| 1 | 1 – 500 | 1105 | 767 |
| 2 | 501 – 1,000 | 545 | 474 |
| 3 | 1,001 – 2,500 | 471 | 462 |
| 4 | 2,501 – 5,000 | 148 | 154 |
| 5 | 5,001 – 100,000 | 39 | 45 |
| Total | 2308 | 1902 |
Source: BGMEA, 2016
On the other hand, in managerial and technical positions many of the factories employ foreign staff to manage the production floors to material sourcing and negotiating with the buyers. According to a recent survey conducted by CPD, it shows that 16 percent factories (out of 193 sample factories) have employed foreign staff (Textile Today, March 2018). The government of Bangladesh has set its target to transform the country from Least Developed Country (LDC) to middle-income country by 2021. With this enhancement, all kind of privileges especially import duty facility in the form of GSP Bangladesh has been enjoying at present due to LDC status will be withdrawn by 2027 while Bangladesh’s close competitor Vietnam is going to have extra advantage due to Trans-Pacific Partnership (TPP) agreement.
Wages, the prime consideration for business, and compliance requirement have increased. Contrary, price of the products and business lead-time, in the era of fast fashion, both have decreased. Presence of foreign professionals in local entrepreneurs’ business, country’s upgraded status from LDC to Developing Country etc. are the present and upcoming challenges for the sector. The present study is very important and time befitting to find out the present practices and future course of action to make the sector competitive, profitable and sustainable. If the entrepreneurs fail to take appropriate measure on time sustainability will be questioned and investment will be at risk finally the people employed in the sector will be more vulnerable.
Productivity and Efficiency in context of RMG sector
In the competitive world, profitability depends on productivity. Sustainability of any business motive organization depends on profitability. Productivity enhancement is a must for Bangladesh RMG industry not only offset the uptrend wage but also to remain competitive. In context of the productivity various study reveals that China, India, Vietnam and Pakistan’s positions before Bangladesh. Though Bangladesh is around 40 year experienced country in RMG but still now the sector is known as low-end garment manufacturing country. The minimum wage for the sector has increased over 167% since 2010. Contrary, product price has decreased alarmingly while demand of compliance requirement is a never-ending expectation. The management to measure overall productivity performance of an organization uses various indicators. Productivity is generally defined as a ratio between output units and input units. On the other hand, achieving maximum productivity with minimum input is called efficiency. Productivity is the result or output against any given input. Say, a factory XYZ with five production lines produces total 6050 pieces garments with 10 hours and 75 man. However, all the lines have same man and working hour but per person per day per line productivity is different and factory productivity is the average of total production divided by total man and working hours.
Table 2.00 : Calculation of Productivity and Efficiency
| Data | 1st Line | 2nd Line | 3rd Line | 4th Line | 5th Line | Factory |
| Production Per Day | 1000 | 1100 | 1250 | 1300 | 1400 | 6050 |
| Working Hour Per Day | 10 | 10 | 10 | 10 | 10 | 10 |
| Manpower | 75 | 75 | 75 | 75 | 75 | 375 |
| SMV | 27 | 25 | 22 | 20 | 18 | |
| Productivity Per Person Per Day (Production / Manpower / Working Hour) | 1.33 | 1.47 | 1.67 | 1.73 | 1.87 | 1.61 |
| Output Minute (Production X SMV) | 27000 | 27500 | 27500 | 26000 | 25200 | 133200 |
| Input Minute (Manpower X Working Hour X 60) | 45000 | 45000 | 45000 | 45000 | 45000 | 225000 |
| Efficiency (Output Minute / Input Minute) x 100 | 60.00% | 61.11% | 61.11% | 57.78% | 56.00% | 59.20% |
To discuss about efficiency it is important to know about Standard Minute Value (SMV) of the products to be produced, input minutes and output minutes. According to ILO Standard minute is the time taken by a 100 rated worker to complete a given task. All the five lines produce different styles of products with different SMV. Above table shows that though input minute (total manpower x working hour x 60) is the same for all five lines yet output minutes (production x SMV) are different due to varied SMV. Therefore, line efficiency (output minute / input minute x 100) is also different due to varied output minutes.
Findings of the study
A details case study has done in two different factories of different capacities and products. From available data on production and unit price of the products since 2012, from pre- Rana plaza disaster, to 2018 present year. Based on an in-depth discussion with factory in-charges, IEs, merchandisers and compliance managers following findings have been furnished.
Table 3.00 : Average Unit Prices in different years
| Year | Woven -Top | Knit – Top |
| 2012 | 4.45 | 1.91 |
| 2013 | 4.53 | 1.92 |
| 2014 | 4.30 | 2.16 |
| 2015 | 4.51 | 2.06 |
| 2016 | 4.28 | 2.00 |
| 2017 | 3.89 | 1.85 |
| Oct.2018 | 3.86 | 1.83 |
Source: Field Data
Above data depict that, over the period, though the unit price of the product has been reduced though the total volume both in quantity and value have been increased. To achieve those extra quantity production they did not recruit additional manpower. Rather it was known from the focus group discussion that all the factories have reduced their manpower to offset their additional cost due to wage enhancement but price reduction situation.
Table 4.00 : Number of factories and Volume of Export
| Year | No of Factories | Export in USD billion |
| 2011-12 | 5400 | 19.70 |
| 2012-13 | 5876 | 21.52 |
| 2013-14 | 4222 | 24.50 |
| 2014-15 | 4296 | 25.49 |
Source: Collected from EPB & BGMEA Members Directory, 2014-15
Before Rana plaza disaster, in FY 2012-13 there were highest, 5876 in total, number of factories in Bangladesh RMG history. Within a year of Rana Plaza disaster, the number came down to 4222 in FY 2013-14 and which was 4296 in the FY 2014-15. With all those hurdles total export of the sector has been increasing and entrepreneurs are investing in green building and making LEED certified factories.
Factory performance indicators in different period
A 15-line factory, produces woven top garments, has achieved incremental progress in terms of productivity and efficiency over the period in different indicators. Though the factory has chosen easier styles of garments yet their efficiency and productivity has increased remarkably. In the year 2013 average SMV was 24.60 which was 20.03 in 2018 but average man per line has been reduced from 83 to 76.
Table 5.00 : Key Performance Indicator (KPI)
| Factory – XYZ | |||||||
| Year | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Remarks |
| Avg. S.M.V | 24.60 | 23.39 | 23.22 | 22.51 | 20.66 | 20.03 | |
| Avg. Man/Line | 83 | 80 | 78 | 77 | 75 | 76 | |
| Total Production | 3844847 | 3760339 | 4199217 | 4640701 | 6035560 | 5551463 | |
| Total Output Min | 92079141 | 85823261 | 94631683 | 102600883 | 117437474 | 103329977 | |
| Total Input Min | 227004038 | 195277140 | 203162940 | 204446880 | 202283940 | 164042218 | |
| Efficiency% | 41% | 44% | 47% | 50% | 58% | 63% | |
| Total Working Hour | 47258 | 40517 | 43245 | 43904 | 44406 | 35419 | |
| Production/Hour | 81 | 93 | 97 | 106 | 136 | 157 | |
| Avg.Working Hour | 10.43 | 10.19 | 9.98 | 9.79 | 9.95 | 9.85 | |
| DHU | 12.20 | 11.27 | 6.67 | 4.77 | 3.17 | ||
| Defect % | 4.68% | 3.60% | 5.32% | 3.89% | 2.79% |
Total production in the year 2013 was around 38.44 lac with 41% efficiency while the production quantity has jumped to 55.51 lac with 63% efficiency in 2018. This increased productivity was possible with less hours of work, which was around 47.00 thousands hours and 35.00 thousands hours in 2013 and 2018 (up to October) respectively. Per hour per line production was 81 piece in 2013 which is 157 in 2018.average working hour was 10.43 in 2013 which 9.85 hours in 2018. Over the period both DHU(Defect per Hundred Unit) and defects have been minimized significantly. In 2014 DHU was 12.20 that is3.17 in 2018 and defects for the same period was 4.68% now in 2018 it is only 2.79%
Initiatives Taken by the RMG sector
There were huge financial impact to fulfill fire, electrical and building safety compliance with lower price of the products from the buyers. With the stringent compliance requirement and shrinkage price, the number of the factories have been reduced but Bangladesh RMG export industry has been maintaining steady growth. Many entrepreneurs still are investing to expand their existing production capacity and going for LEED certified factories. With this reality, factories have taken various initiative, especially after Rana plaza accident, to enhance productivity to be competitive and sustainable. Present study has tried to illustrate how increased productivity is helping in offsetting incremental wages over the period.
- Recruiting Industrial Engineers (IE)
In most of the cases, persons holding supervisory or managerial positions are the promotees from the floor level. Traditionally they are less concern about efficiency, man-machine ratio and wastage. When cost is the biggest concern, no one can afford to continue with traditional way of doing things. Almost all the factories are now Industrial Engineers for Research and Development in production process, material consumptions and utilization of human resources. This department has taken various actions including-
Prepare skill matrix of the operators
There are different graded operators in a factory. One of the primary work of IE department is to classify the operators according to their skills. With this skill matrix a factory can find out its strength and weakness. The operators are awarded depending on their skills and can be trained according to their need.
Review the process critically
This department involves from the samples making to bulk production stage. They identify critical operations, requirement of special equipment. They plan for skill requirement for the operations. Before feeding the line, production in-charge, maintenance, quality manager & I&E officer sit together and make a line lay out plan to right operator for right operation, as per SMV and Technical equipment to reduce line setting time.
Line balancing
Line balancing helps to remove bottlenecks inside the line, to reduce operator’s idle time, to minimize WIP (work in Process), to maximize operator’s utilization. In a balanced line, work will flow smoothly and no time will be lost in waiting for work. At the time of line setting, select for a particular operation operators are selected with matching operator’s skill Matrix. As a result, production runs without any break or with less no. of breaks, line productivity does not fall.
Inline quality inspection at regular interval:
To reduce product quality defect at source they introduce traffic light system. Green light gives the signal of no defect in line while red light indicates quality issue while quality inspector will be on the spot to address the issue. This is the most effective inspection tool to solve with immediate action.
Monitoring production in every hour of production
A dedicated team is monitoring productivity in every hour to match with target production quantity. If they find any mismatch, necessary measures are taken so that at the end of the day target production can be met.
Picture: Hourly production monitoring
- Training for Line Supervisors and production Manager
Supervisor is the 1st line management people and they make the bridge between the workers and mid-management. To implement any new process both supervisors and production managers must be trained with fundamental management and communication skill. They need to understand the fundamentals of industrial engineering tools like operation bulletin, skill matrix, workstation layout, capacity study and line balancing, target set up, line efficiency, Defect per Hundred Units (DHU) etc. With those trainings, managers are more capable to establish control and achieve targeted productivity.
Pic: Production manager and Supervisor Training program.
Training to sewing operators:
Operators are the most valuable resources in the apparel manufacturing. Production from an operator depends on his/her skill level to the task. A low-skilled operator will consume higher resources (time) and give less output. Moreover, low skilled and untrained operators cannot make first time right product on quality related issues. Without operators’ training for skill development achieving greater productivity is not possible. Initially any form of training was considered as a cost by the management but at present considering the need of the time previous cost has tured into an investment. Factories have initiated motivational and technical training for the workers to make multi skill operator to increase the productivity.
Picture: Training of un-skilled & semi-skilled sewing Operators.
- Use Modern Tools &Technic:
With the passes of time Bangladesh RMG sector is moving towards automation. Though any automation requires more investment initially but in the long run it returns back many folds in terms of productivity and manpower reducing. To save electricity factory is using servomotors in place of clutch motors and buying auto trimmer sewing machines to remove helpers from the process. Moreover modern tools & technic as like 5S, kaizen & Lean production method are being applied.
- Operator motivation:
Only financial incentives does not work to get maximum from the workers. Operators’ motivation is the most crucial part in productivity improvement. If they are motivated, they will put enough effort on the work. Employee motivation generally depends on various factors like work culture, HR policies, bonus on extra effort or achieving target. In garment manufacturing operator’s motivation come through extra money and supervisors’ behaviour. Various schemes have been applied to achieve maximum output keeping the workforces motivated. Attendance bonus, performance incentives are common in the sector. Some of the factories celebrate workers’ birthday to make him/her psychologically attached.
Setting individual operator target:
Based on operator’s skill level and capacity supervisors with the help of IE sets individual target instead of an equal target to all operators working in a line. Now every operator knows her/his target and they are aware of after achieving that target they will be rewarded. This is not a static target rather it is an incremental target. Initially achievable target is being set. Once previous target is met then higher target is set for that operator. This is a tricky game for increasing target step by step. This approach is helping to improve operator’s individual efficiency.
Production award Program:
Not only the individual level target factory management set line target, floor target etc. to compare and compete with each other performance. They recognize best performer through award and incentive program weekly or monthly. With all those programs workers are earning extra money, satisfaction and confidence. Contrary, factory is getting maximum output to keep them competitive and sustainable.
Picture: Production award program
Better working environment, better productivity
Employees’ motivation and engagement are not only depend on wages and incentives. With the completion of Accord and Allinace remediation activities workers are more confident about their workplace safety. They can represent and share their grievances through Participatory Committee (PC) which is now elected by the workers and more effective. Many of the factory have introduced digital payment system. Workers are now proud of having a bank account for them. They were gone through different trainings including fire safety, first aid – health and hygiene.
Pic: Doctor counsels Factory Worker
| Pic: Fire safety training | Pic: Factory internal Fire drill |
| Pic: Meeting with PC Members |
Concluding remarks
The RMG sector has flourished in a very scattered way. There was no effective management system for maintaining the labour intensive industry like the RMG. A thoughtful plan was missing before Rana plaza disaster. More workers were employed than required against a particular task as they were not costlier and their efficiency was lower than other competing countries. Over the period, workers’ wages has been increased and products price has been reduced. To match with this situation the entrepreneurs of this sector has taken courageous and innovative initiatives to be efficient and make their investment sustainable. At present the sector is passing a transition period from traditional approach to modern approach of production. Experienced workforces and knowledge of industrial engineers jointly helping the sector to overcome wage and pressure through the enhancement of productivity. Bangladesh has the highest number of green factory buildings and most of the factories are now structurally safe and sound. There any many group of companies having multiple production complexes with modern machineries and equipment. Though the present achievement is at satisfactory level but not sufficient to face coming days challenges. Still there are some missing link in the whole supply chain. Mid-level management is weaker or inefficient to play the role they needed to be played. The positions of top management are heavily filled with so-called foreigner experts. A all-out effort and comprehensive approach are urgently needed to cope with up-coming challenges to be profitable and sustainable. End of accord alliance article
