Lankan apparel giants give up on breaking through production efficiency conundrum

By Chandeepa Wettasinghe

An efficiency conundrum hounding the Sri Lankan apparel industry over the past two decades has seen giants such as MAS Holdings giving up on trying break through the production efficiency barrier to focus on the complete supply chain.

“The focus in the past has been about efficiency, and if you talk about efficiency, when I joined the industry in 2000, and when I look at it in 2018, you still wonder why our factories are operating at 65 percent efficiency when they did the same in 2000 at the same efficiency,” MAS Holdings Group Human Resource Director Shakthi Ranatunga said.

Curiously, Ranatunga did not choose to discuss what the causes were for efficiency not moving upwards.

“So trying to understand why we haven’t been able to move the needle was an interesting question to ask ourselves,” was the only extent to which he moved this dialogue.

Ranatunga, who has spent his entire 17 years in the apparel industry at MAS Holdings, was speaking at the International Conference on the Apparel Industry which discussed the themes of productivity improvement, disruptive innovation and leadership. 

Although technology has enabled production which took 6 weeks in 2003 to improve to 4 days today, while the duration from purchase order to delivery which was 8 weeks in 2003 has fallen to 6 days in 2018, and the sizes of small orders have fallen from 10,000 to as low as 200 in the same period, the efficiency rate in comparison has not changed at all, according to him.

Therefore, improving efficiency alone has become irrelevant, Ranatunga added.

“In the context of just focusing on the middle point, the process, the needle point, it’s out the window. It doesn’t mean anything anymore,” he said.
In order to further minimize wastage and increase delivery times, the firm has adopted other strategies.

“I think we have as an organization—I am not at a position to talk about the industry as a whole but I believe it stands true for the industry as a whole in Sri Lanka—lean manufacturing has played a big part in eliminating waste across the value chain and bringing these timelines and lead times down,” he added. 

Ranatunga said that MAS Holdings learnt from the automobile industry on how to seamlessly adapt resources to produce differing styles of the same product with minimum wastage and delay.

He said that employees on the production floor are now well trained in at least three skills, in order to allow them to rotate and not have production disrupted by absenteeism or skill shortages. Logistics too was an area MAS Holdings placed greater attention on early as they realised that efficiency wasn’t boosting.

“Productivity in isolation from our perspective as manufacturers does not mean much, because you’re as strong as your weakest link. If a supply chain takes one and a half to two months to get a fabric out the door, no matter how fast you are in manufacturing, if your supply chain doesn’t support that, you’re still slow,” he said.

University of Warwick WMG Professor Jan Godsell who also spoke at the conference praised MAS Holdings’ processes as being the “best that I have ever seen and way ahead of anything in the UK”.