It is widely agreed that boosting efficiency is vital to the long-term health and well-being of Bangladesh’s RMG industry. Our efficiency rates are low compared to those of rivals in Pakistan, Vietnam and China. Boosting efficiency and optimising productivity levels will make us more competitive globally and ultimately boost profitability. So what do we need to do to make this happen?

Here I offer ten points that we need to consider to address this critical issue:

Too many helpers

The main reason buyers moved into Bangladesh in the first place was because labour costs here were generally extremely low. The resulting boost to manpower led to an increase in production and was hailed as an increase in productivity. But this is wrong.

Factories used more helpers—unmeasured workers—to increase productivity. To begin with, this worked because of the exceptionally low cost of labour. But things have changed, and in Bangladesh, the cost of labour is often as high as in rival countries; indeed, it is even higher than in the likes of Ethiopia.

Using more helpers has become a culture in our garment industry. This might provide the right product—but without implementing the right method, standard or the right technique. Excess staffing has masked underlying issues within factories. It has also hidden the fact that in many cases, these workers are not adding any overall value.

Another issue with the use of too many helpers is that it creates a mentality where no single person takes responsibility. There is no ownership and this can hamper productivity and efficiency.

The presence of too many people also creates an unnecessary hierarchy on the production floor with too many tiers of lower-to-middle management. This simply creates an excess of beurocractic layers and a slower decision-making process.

Lack of skilled workers

Another issue related to the above is the lack of skilled workers in the industry. There is a tendency to assume that an industry of more than 20 years’ maturity like that of Bangladeshi RMG will have an abundance of skilled workers. However, there is a lack of understanding among the mid-to-senior management in terms of uplifting efficiency in critical production areas such as sewing efficiency. Perhaps there is a fear among some factory owners that workers who are trained up will leave once that initial investment in training has been made.

Too much front-end focus

Most of the time, front-end or pre-production activities are killing 70 percent of the lead time. This is mainly because of the merchandising handling by the owners and often the owners’ relatives, many of whom have a limited educational background or qualification to work in these areas.

What we see in most of the front-end operation is inefficiency but that is not highlighted because Bangladeshi management does not use the right Key Performance Indicators (KPIs) for monitoring purposes. If you check their critical path, you can see how much time they are hiding. Unfortunately, in the majority of the factories, they are not monitoring this and not challenging them.

An improvement in the pre-production processes can substantially improve the flow of orders and factory efficiency as well as sales turnover from the resources.

Poor research and development (R&D) process

Bangladesh lags behind its competitors in the area of R&D. Less investment in R&D is hampering the industry as it means that factories are engaging in trial and error on the production floor. This leads to operational inefficinecies and factories ultimately pay a high price for their use of incorrect production methods. This could be solved by investing more in R&D up front.

Use of fixed salary system

The use of a fixed salary system in Bangladesh is not motivating workers to improve their efficiency. In Pakistan, Vitenam and China, they use a piece-rate pay system and this provides a vital incentive for workers to improve their skill and efficiency levels so that they can earn more.

Bangladesh should consider a system similar to Vietbam to boost motivation and productivity. In a non-incentivised environment, it is unlikely that you will see individual performance rates above 75 percent, and this restricts overall operational efficiency.

Traditional quality system creates inefficiency

Bangladesh continues to use an inefficient quality checking system. This system creates higher quality cost and inefficiencies and also demotivates the operations team.

Bangladesh needs to alter its quality assurance system, not its checking system. To achieve this, we need to improve front-end R&D and implement a continuous training programme. A rival garment producing country is now achieving Zero checker system by giving the ownership to the operator—reducing quality costs and creating a smoother production flow. Some factories in Bangladesh are already implementing this system, with promising results.

We need to consider the role of buyers also. They need to understand that there will always be a trade-off between quality checking and efficiency levels. They need to work with the factories to achieve the right balance between these two.

Investment in machinery

There are some world-class factories in Bangladesh but most are still usingbasic machinery and techniques. Investment in better machinery across the board could improve efficiency by 20 percent or more. This does not mean moving towards automation; it means more optimised, sophisticated equipment which can be bought at a competitive price but which will provide a return on investment often within 18 months.

Too much over-time and absenteeism

We need to change the current culture from one where over-time is the norm to one where workers are incentivised to work hard to achieve bonuses. Give workers greater recognition and provide more sophisticated and intelligent incentive schemes so that they are motivated to work hard to achieve realistic targets. This is better than the current over-time culture, which has become more of a habit in the industry, and will help reduce absenteeism.

Lose monitoring mechanism

On many occasions, production managers evaluate KPIs reactively, which means they see the outcome rather than the root causes. Proactive measures are seriously lacking in Bangladesh’s RMG industry and this impacts both efficiency and the cost of production. For example, lots of quality defects are identified at the end of the process and this means re-working the process, directly impacting hourly output and efficiency. Indeed, the defect rate at the end of lines has become a major issue for us and this has been neglected heavily due to the wrong KPI measures.

Lack of planning visibility and accuracy

Master planning and production planning functions are not properly connected to each other in order to see the loading visibility. According to the few analyses done at factories, planning changes are recurrent. Every planning change has a bullwhip effect which leads to a change of the entire set-up of the production facility. Sewing operators idling due to production plan changes kills efficiency. Most factories are struggling to freeze the production plan at least one per day. Planning stability for the manufacturing facility is vital to increase efficiency in the long run.

Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the Founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE). Email: [email protected]