CHANGE MANAGEMENT IN THE KNITWEAR INDUSTRY
Today this industry is a source of direct employment to more than 20,000 workforce
By Jawad S. Naqvi
Apr 28 - May 04, 2003
Pakistan is the fourth largest cotton producer in the world, and is an important player in the global textile market. Its knitwear industry is the highest value-added textile sector in the country, and is distinguished by high quality of raw material and competitive value of end product. Total knitwear capacity in Pakistan is above 50 million dozens of pieces. There are about 600 knitwear factories of various sizes in Pakistan. Today this industry is a source of direct employment to more than 20,000 workforce. Knitwear export is a major foreign exchange head for Pakistani economy. In 1999-2000, Pakistan exported US$8754 million worth of knitwear as compared to only US$274 million in 1989-1990. This marks about 20 percent per year increase in terms of value.
The realization of Agreement on Textile and Clothing on January 1, 2005 (abolishment of quota on textile imports to America and European Union) poses a major challenge to Pakistan's knitwear industry. This challenge is in the form of a massive potential for growth, coupled with the risk of a major loss in case this sector is unable to maintain its competitiveness in the post-2005 era. Pakistan's knitwear industry can stand upto this challenge by becoming fully compliant with the global quality standards; by employing efficient work and human resource practices; and being responsive to the market trends in production and export. This prerequisites an electric flow of information between the nerve centers in key export markets (USA and EU). This information must also be linked between the Government and the knitwear industry.
The most important skill that the leaders and managers in the knitwear industry need to be equipped with is how to manage change. Change is an ongoing phenomenon for the textile industry, in particular for knitwear due to a rapid change in consumers' fashion, styles and demands. The rate at which technology is moving forward also necessitates our managers to be conversant with the 'change technology'.
Change is the only constant in the knitwear industry today. Buyers' preferences for clothing styles and patterns are on the change; consumer habits are changing; advancement in production technology necessitates a BMR action from every five to ten years; employment environment is never constant in a country and there is a greater emphasis on multi-national work force and diversity management; information technology and automation is in a continuous research and development phase; global and domestic work practices and trade regulations are in a continuous transition in response to various political and economic factors. In short, there is a host of internal and external factors that require the industry to make fundamental adjustments in the style of management and operations.
MECHANICS OF CHANGE
Change may be defined as an act or process of transition from one stage to the other, as a result of internal and external environment in which we live and work. Change is essential to sustain, adapt or improve. We change when we want to sustain our competitive advantage in the market. We change when we want to adapt to new technology and consumption trends. We change when we want to improve our work practices and our share in the local and global markets. Change means a simultaneous opportunity and problem for an individual or enterprise. This harbingers an opportunity to enhance surplus creation capacity for an organization, and poses an allied risk in shape of a loss of an existing market share.
Change is not an easy process. It entails long termed vision, strong commitment, persistence and a lot of hard work. This process involves engaging employees at all levels to be a contributing force in making change possible in the organization. The middle and the first line managers will be the most important agents of change because of their direct interaction with the bulk workforce in this labor intensive industry. In simple words, this means an altogether new culture for the organization.
Change may be brought about in two ways: Incremental and Revolutionary. Instead of an immediate 180-degree shift, knitwear industry should keep embracing the change culture in a gradual, non-destructive manner so that benefits of change could be availed without a loss of a competitive advantage or a severe blow to the employees' morale and motivation level. A badly managed change may result in an undesirable departure of experienced employees from the organization. Change always generates resistance, and the change leaders must deem resistance as a natural phenomenon for change. Instead of taking punitive measure against those resisting change, first and the foremost step should be spreading awareness about the rationale of the change and what would be the possible benefits of this transition. An ongoing training and a two-way interchange of ideas can help achieve this goal. According to a research, key issues surrounding change could be: leadership, development of strategy and people issues. Logically, change leaders and agents will chalk out a long-term strategy, and will effect this transition through rigorous interaction with workers at level in the organization. This will require a strong interpersonal quality in the change leaders.
RESISTANCE TO CHANGE
Change brings with itself a fear of unknown (twilight zone); an apprehension about possible non-adjustment in the new set-up; lack of understanding of the rationale and mechanism of change etc. Change in the industry means: a change in the vision of industry leaders (the chief executives and the managing directors), a change in the technical and managerial expertise (production, quality and human resource management skills for organizational development) and a change in focus from profitability to the satisfaction of internal and external customers. It is a paradigm shift from short-term profits to long-term viability and improvement.
Change leaders must take suitable steps so that employees in their organization (managerial and operational) are able to align their personal and professional goals with their revised role and task in the changed set up. One possible means of doing this could be extending on the job and classroom training facility to the technicians working on old machines. Similarly training workshops can be conducted to educate middle level supervisors and managers so that they can maintain their utility and productive contribution in the new set up.
One possible source of resistance to change can be lack of trust in the change agents. Change leaders must carefully assign this task to those employees who are subject specialist in their own area (e.g. knitting and sewing expertise, or human resource development), and have an accomplished history of contribution to the organizational objectives. Staff will naturally be skeptic about the motives of a person who has already lost their trust on a previous occasion. Typically, administrative staff can be left out of this exercise.
According to a famous principle of organization behavior, the involvement needs to commitment. Involve employees at all levels in the change process. Involve them in the why and how aspects of the change, and they may deliver what you might not have thought off. A high involvement approach will result in a high commitment of employees that is vital for the success of change process in the industry.
NEXT GENERATION OF KNITWEAR INDUSTRY
Information technology revolution in communication, computer aided design and manufacturing and automation of knitting and forward processes is the hallmark of new era in knitwear. Information revolution has transformed the previously distant markets into a closely-knit small village. Technological transfer is taking place at an electric rate. With the implementation of free trade under WTO regime, supply chain management and IT take a crucial role in knitwear manufacturing. Competitors of the past may need to exchange information through email, faxes and telephones and formal and informal alliances could be in store to enhance and benefit from each others' strengths and competitive advantages. New technologies for mass customization e.g. three dimensional non-contact body measurement and digital printing will be learnt about and implemented fast. This means a tremendous potential for meeting highly unpredictable demand patterns, for luxury garments and for other value added and heterogeneous demands. The industry so far has been engaged in mass production, whereas post 2005 world will see a shift towards mass customization for the industry.
Future asks for a real value service for the buyers and global integration of supply chain system that is effective in terms of cost and time. This will necessitate a comprehensive study of multifaceted and multi-layered supply chain. Logistics management, market forecast, operations research, production strategy, distribution channels and shipment management are of the some areas that might need improvement. Economic situation in the US and European markets must also be constantly observed to assist and prepare Pakistani industry in an unforeseen situation.
Some key changes to be brought about in the knitwear industry are given in the following line. Primary responsibility of the concerned department has been mentioned against each change. The pace of change can be incremental or rapid, and will be decided by the change leaders in the industry.
*Rapid information links between the market centers (USA, UK, buying houses) and the industry (Merchandising)
*Strong internal coordination within the organization to ensure compliance with buyers requirement (Production Planning and Control staff)
*Extensive market research to forecast consumers' preferences in fashion and styles and necessary R&D to be able to meet such demands in the minimum possible time (Merchandising, R&D)
*Operations research to improve the productivity (and quality of output) of sewing operators and roving inspectors in the sewing lines. According to an estimate, about 80% of the defects detected before packing are attributable to sewing process. (Sewing Production, Intermediate Quality)
*Efficient logistics management to improve production delays due to material unavailability (Accessories Store, Main Store)
*Optimization of the inventory costs (currently between 70 to 80 percent of manufacturing cost) (Stores)
*A cost and time effective distribution channel and shipment arrangement (Export)
*Building of strong interpersonal corporate goodwill with the buyers based on timely deliveries, zero defect rate, and a prompt and pleasant response to buyers' inquiries (Merchandising, Quality Assurance)
*Top-class designer links to strengthen the industry's reputation for quality and design capability (R&D, Merchandising)
*Preparation in response to an anticipated rise in global standards and expectations for quality in post-2005 world (R&D)
*Responding to strong International demand for luxury fiber knitwear (high value added) (R&D, Sampling)
*Adjustment to short run of high value production (A shift from mass production to mass customization) (R&D, Sampling)
*Investment in new technologies (a regular BMR in design and production) (Maintenance, Knitting, Dyeing, Stitching)
*In low fiber products, highly flexible and integrated operations enabling last minute decisions in terms of style and quantity (R&D, Sampling)
*Ability to face tough competition in (low margin) cut & sew industry from Far Eastern and Latin American markets (R&D, Sampling)
*Budget review to cope with the change in official export rebate and devaluation of Pakistani Rupee versus US dollar (Finance)
*Organization restructure in view of lesser jobs for lower value fibers (HRD)
*Investment in technical and managerial training (HRD)
*Need for a skilled human resource in intermediate quality and finishing (HRD)
*Availability of designers and technicians qualified in CAD and CAM (HRD)
Jawad S. Naqvi is a human resource practitioner in Pakistan. His articles have appeared in the leading periodicals in Pakistan and abroad. Currently he is serving a knitwear factory in Lahore as Manager Human Resources.