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Technology the way ahead for Bangladesh RMG companies

"The last few decades have brought tremendous growth for ready-made garment (RMG) exports in Bangladesh as a result, in FY 2016-17, exports stood at $28.5 billion. Meanwhile, the country has set an ambitious export target of $50 billion by 2021. And to achieve this, companies need to reinvent themselves to beat the fierce competition posed by some countries which are growing their RMG exports at a rapid pace. Technology and innovation are the right tools going ahead. Many RMG companies are now creating a culture of technology and innovation in their organisations to improve processes, smoothen production, minimise delays in delivery, reduce overall cost and improve quality so that they can provide maximum value to their customers."

 

RMG companies

 

The last few decades have brought tremendous growth for ready-made garment (RMG) exports in Bangladesh as a result, in FY 2016-17, exports stood at $28.5 billion. Meanwhile, the country has set an ambitious export target of $50 billion by 2021. And to achieve this, companies need to reinvent themselves to beat the fierce competition posed by some countries which are growing their RMG exports at a rapid pace. Technology and innovation are the right tools going ahead. Many RMG companies are now creating a culture of technology and innovation in their organisations to improve processes, smoothen production, minimise delays in delivery, reduce overall cost and improve quality so that they can provide maximum value to their customers.

Operational excellence tools

Technology the way ahead for Bangladesh

 

Value stream map (VSM) is an extremely effective tool for cutting down cycle time, reducing waste, visualising the entire production process, and representing both material and information flow. Once the VSM for any critical process is created, technology solutions can be used extensively to simplify the process complexities significantly, thus eliminating non-value added activities and leading to drastic improvements. Enterprise resource planning (ERP) solutions can help establish a smooth material flow from yarn to finished good; it can also help in tracking the inventory at every stage, accounting for losses and ensuring that the right quantity of the right stock keeping unit (SKU) is being manufactured and dispatched to the right customer at the right time. Some examples of how technology transformation can support data analytics for efficiency improvement and lead to better Management Information System (MIS) and performance monitoring are:

Stringent procurement regulations in importing countries contribute to Bangladesh’s inability in increasing prices. Enterprise applications capture historical price trends, allowing transparency in the merchandising process in order to tackle price fluctuations. Changing foreign regulations on sourcing of goods, particularly US and EU regulations, have a wide impact on export of textile goods from Bangladesh. Data pertaining to workforce allocations, profiles, safety trainings, incident reports and their periodicity can help in adherence to foreign regulations on safety standards. Cross-currency rate capturing and cost component break-ups can be tracked at transaction level using enterprise applications. Key cost factors can be broken down using analytical tools to identify specific areas of cost reduction.

Data analytics can determine factors that drive employee productivity and the insight can be leveraged to increase overall organisational performance. Predictive analysis on planned production and budgeted expenditure based on historical trends allows the tracking and reporting of production attainment vis-à-vis plan. An information repository related to equipment upgradation and maintenance assists in figuring out the consequences of inefficient machine usage on production overheads.

Adopting tried & tested methods

The RMG industry needs to quickly up its act to gain market share. On one hand, the sector has immense opportunities to grow, and on the other, it is facing fierce competition from other RMG-exporting countries. Building a competitive edge is the need of the hour. Companies that are driving operations excellence through technology transformation can make significant improvement in terms of their business performance in the long term. Through the implementation of technology transformation and innovation, the garment sector can address the major expectations of the customers—right product, right quality, right quantity, right time’.

 
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