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Highlighting the fast changes that the market is witnessing, Anindya has brought out the importance of change in mindset that is required across the supply chain.

1. Transparency between the various parties involved- I will blame both the vendor and the brand for holding their cards too close to their chests. High time you laid them bare.
2. Trust - both parties need to work on this over long periods and interactions
3. Need for investment in new technologies and software
4. Need for adapting newer approaches to solving problems.

dear anindya its always been pleasure to review your views and do understand the market was already changing from past 2-3 year but now the responsibility is double for the vendor after covid 19. its fact that most of the vendor do not have sufficient people to handle the Brands/design development or capacity to invest on new innovation .. in this case Brand also need to come forward and share the investment on vendors as we can see Buyer are investing in Bangladesh/vietnam and also guiding them for technology/designing. Brand must visualize the strength of vendor/capacity and try to work with limited number of vendor so you can give maximum number of months load to them and get priority from vendor too.

Agree with you RP. It has to a won-win. The important thing is to recognise the goal and direction. Once that is clear the rest will work itself out.

It has always been my view that for a retailers business to flourish the chain including the vendor also have to be profitable . The vendor is a partner in a chain ending at the customer It is therefore very important to understand the vendor . It is my view after 35 years in the Industry that a vendor can only be profitable if he has 2 types of business in this factory --1) core -- 2) fashion .The core has to be low margin hight volume and has to take care of the bread and butter or the salaries of the company .It has to be a constant business and actually a core has to evolve to be cheaper and cheaper year on year .Thats the only way the factory can hold onto the core .So it evolves using raw material ,consumption, or simple productivity by introducing tools to increase productivity The fashion has to have speed to market ,A lean production system ,designers and 3D design technology with MIS systems built in . It is this fashion that will actually bring the customer to the factory and the core will be a support system Why are we not looking at lean manufacturing ? Why are we not investing in 3d Design technology Why don't we have an inbuilt MIS system which can have a live production status on the cloud every morning for the customer to simply log in ?? In todays world unless we evolve both at customer and factory level we are going o find ourselves reduntant and out of business

Very relevant insights Poonam. You should contribute to this blog. Maybe we could co-author a few. Would urge everyone to read Poonam's views.

Dear Anindya, Brands/retailers and (vendors) manufacturing are having 02 different world of thinking / priorities. Unless have a fair understanding on common challenges and confront together, apparel manufacturing may start disappearing from India sooner than we all think. But the organised apparel retail business is here to stay. This article is connecting all the dots from design to delivery landscape. Among all the aspects discussed, i feel one of the important aspect is the existing labour situation from farm to frontend. Which is preventing people to think this industry as an option and do any sort of investments be it expansion, upgradation etc... If it becomes conducive, may attract more home grown business houses and global players. Labour engagement is one of the key factor. We need some holistic approach like, Can union govt. scheme MGNREGA gets integrated with labour intense industries like us? hence it incentives the workforce and entrepreneurs. It will also pave the way for global players to explore greenfield investments. And without a stable apparel supply chain ecosystem with no choice domestic apparel brands and retailers will be forced to look at overseas sources, But govt.policies may not encourage. It is catch 22 situation.

What a fantastic suggestion Ramesh. Let us see if this can be taken up at industry level. And our readers are still waiting for your series of articles. Please don't make us wait so long.

This series of articles and insights are wake up call for everyone wants to improve in post COVID situation and want strengthen relationships. These series is filled with wisdom, inspiration and practical advises rooted in groundbreaking concepts and the comment on the articles made the series interestingly remarkable. Thank you for sharing and excited to read more in near future.

Thanks Nazmul.

Well written. The need for tomorrow's surveillance of apparel industry is articulated from every stakeholder point. Retail association of India has to first call all brands meeting and divulge a plan for streamlining the way that brands should operate, margins and discounts. If the discount period and amount discount is controlled and all brands agree for the same kind of discount parameters, most of the things for the front end will get controlled. Then the back end and inside the brand also has to be streamlined in the way you have put the forward these articles.

Interesting Prashanth. But this is not an ideal world. Every brand, vendor has to do what is right for his/her business. The important thing is to recognise what should be the way forward and then work towards it.

The apparel and textile industry can be broken down into two major segments.   The production of textiles and fabrics from raw materials and the transformation of these fabrics into clothing and other accessories.   The textile section of the industry involves taking raw material, converting that material into yarn and then dyeing and finishing the fabrics from yarn.   There are many business models for an apparel vendor to follow:   -- Original Equipment Manufacturing (OEM) / FOB/Package Contractor. OEM typically manufacture according to customer specifications and design, amd in many cases use raw materials specified by the customer.   --Original Design Manufacturing (ODM) or Full Package. A full package garment supplier carries out all steps involved in the production of a finished garment--including design, fabric purchasing, cutting, sewing, trimming, packaging and distribution.   --Original Brand Manufacturing (OBM). A business model that focuses on branding rather than on design or manufacturing, this is a form of upgrading to move into the sale of own brand products. For many forms in developing countries this makes the beginning of brand development for products sold in the home or neighbouring countries.   -- Assembly / CMT: CMT stands for "cut,make and trim" or CM ( cut and make) and is a system whereby a manufacturer produces garments for a customer by cutting fabric provided by the customer and sewing the cut fabric into garments in accordance with the customer's specifications.   India is a full package provider which means that it can carry out all the steps involved in the production of a garment. This included design, fabric purchasing, cutting, sewing, trimming, packaging and distribution.   Despite such a flexibility, India has lost its competitive edge. The vendors are a confused lot, not knowing which direction to adopt -- fast fashion or mass production.   There are many reasons for India not being able to increase its share of RMG in the global arena.   As we know, India has emerged as the largest producer of cotton in the world, and the second-largest exporter of cotton. However, high contamination level and poor quality of fibre, both in fineness and length, are major concerns that need focused attention. China and Bangladesh are the largest importers of cotton yarn from India, who in turn creates value addition to the yarn and then exports the same at a lower cost compared to India. India needs to upgrade its position from a supplier of cotton yarn to a producer of value-added fabrics and garments.  While India leads in cotton yarn exports, it has been a very marginal player when it comes to cotton fabric in world exports. China has a substantial share of 51% in cotton fabrics when compared to India’s 5%–6%; the situation is almost the same in case of MMF fabrics. This comparison suggests that India is not able to scale up the value chain significantly enough to meet the global demand despite being the largest producer and exporter of cotton yarn. Approximately 95% of the weaving sector in India is unorganized in nature. The decentralized power loom and hosiery sector contributes 85% of total fabric production. The processing segment is also dominated by a large number of independent, small-scale enterprises. Since, the weaving/processing sector in India is dominated by small-scale enterprises, it has challenges such as inadequate know-how, low focus on research, innovation in new product development and low technology upgradation. Further, low productivity and automation levels also remain one of the biggest woes for the weaving industry. Due to these factors, the overall performance of fabric production in India is getting dampened. The weaving sector still remains one of the weakest links of the Indian textile and apparel industry.  India has only 2% share in global shuttle-less looms (i.e. modern looms) installed capacity. The cost of production in India also goes up due to poor technology levels and low scale of operations, as 95% of the weaving sector in India is unorganized and in small scale. India also lacks the presence of large fabric manufacturers when compared to China and the US.   The biggest reason is India’s near absence from the main product category that accounts for 70% of world trade in apparels – synthetic apparels. Today, most formal, sports and fashion wear uses synthetic fabrics. They are durable, do not fade, can have any colour. Easy blending with wool, cotton, or rubber allows experimentation. Unsurprisingly, synthetics have overtaken cottons and become favorites of the fashion industry. With weak synthetics, India’s apparel industry is a horse running with one leg tied. The results are low exports, low wages, and low investments in the sector. Globally cotton dominates spring and summer sales seasons. Synthetics and blends dominate autumn and winter seasons. Indian units run six months a year to produce cotton apparels. In the remaining six months, most units are shut or run at a low capacity as they do not have orders for synthetics/ winter wear. Most workers go home. Also, a factory that runs only six months a year still has to pay the full year’s fixed costs – rent, salary for minimal staff, interest on loans, etc. This makes anything made in the factory expensive. Absence from synthetics also affects workers’ wages. Winter wears are more expensive than informal cotton wear. So, at 20% labour cost, a worker making a suit would earn more money than the worker making a blouse. Since India is mainly an informal cotton wear exporting country, wages remain at minimal levels. Entry into synthetics would make factories run full year and increase wages manifold.   Now we look towards the second aspect of the industry which is transformation of these fabrics into clothing and other accessories.   The weaknesses which are obstructing India to become a major player in apparel sector are primarily because of deficiency in three areas. 1. Reliability. 2. Sustainability and 3. Performance.   Reliability parameter implies getting the consignments ordered on time. In general, the consignments which are delivered on time amount to 70-80% of the order and rest gets delayed due to various reasons. Furthermore, the manufacturing base in India which are predominantly handled by small and medium enterprises in terms of production capacity are anemic and suffering from various infrastructural, technological and credit related bottlenecks. These manufacturing industries which are highly labour intensive are not efficient enough to leverage economics of scale thus affecting sustainability and performance.   The process of fabric manufacturing begins with a series of steps. The farm to fashion value chain is riddled with various problems within the supply chain.Indian and global fashion designers create products that involve the blends of various fabrics to suit the needs and taste of changing fashion trends. Indian fabric manufacturers are not able to keep up with the demands in time which results in lost orders and buyers shifting th neighbouring countries to fulfill their demands.   Piece dyeing is another important area that Indian manufacturers are not able to keep up with due to lack of innovative technology and R&D. Piece dyeing is the ability to blend various yarn (example wool and polyester) into a required length of fabric as per the specifications of the buyers.   Availability of good quality accessories such as laces/ labels/buttons/tags and trims are inconsistent and problematic. Sometimes if the required colour of the rib fabric is not matching according to the garment colour, the process of re-dyeing is to be taken up thereby resulting in a loss of two weeks. Consistency of colours is another lacunae within the garment industry.   High import cost of latest machines deter many small manufacturers from upgrading to the latest technology, thereby contributing to compromises on quality.   Much of pricing in the area of cotton yarn and fabric segment is a reflection of the prices of raw cotton. Pricing of raw cotton is predominantly governed by a few trading houses, thus there is a system of cartelization in the pricing of cotton. In addition, rumors related to poor crop quality and yield leads to further fluctuations in prices. With respect to fabrics since there is a time gap of about 6 to 8 months between order booking and buying season, mill owners are not willing to take a long term view when quoting prices to buyers and thus don't hold on to their prices for long.   On top of all above, the problems like, tax distortion, arbitrary conditions, working conditions, clarity on labour laws, shortage if raw materials, lack of technology in the garment industry, lack of sophisticated machinery and many more are quite surprising and unfortunate.   The question now arises if the this trade holds any interest for the younger generation? .

Hi Sanjay, well said. Unfortunately garment manufacturing is one of the lowest tech industries. And the margins are low. So when the 1st generation built this and educated their children, the children preferred to venture into newer and advanced industries (tech, services etc.). I feel for this industry to thrive in India, manufacturing has to shift to the hinterlands, new 1st generation entrepreneurs should come up, who have the hunger and desire to make garments. Also, vertical integration with the fabric supply chain is also the need of the hour. that is the only way economies of scale will be built and RMG vendors will have the size and scale to invest in technology.

Very Well said Anindya. In order to become a preferred Vendor, I feel a Vendor needs to understand the brand's business. i.e. what challenges the brands face and how as a vendor I can help solve their paint points. At Bluekaktus we focus on digitising the interaction between Brands and Vendors so that the information flow is seamless. A lot of time is wasted in exchange of information between different stakeholders. Through digitization, knowledge can be institutionalized, decision making can be quicker and real time. Some areas of digitization are: Virtual Inspections, Production Planning, Follow up activities, Procurement management and Product Development. Through digitization the productivity in these areas can be improved by 150-300% with a significant reduction in lead times.

Thanks Gunish. I can vouch for that. Waiting for your article.