One major constraint that export-oriented apparel manufacturing companies face is seasonality of work orders, says G. Jayapal Nair.

 

It is the bane of many an apparel manufacturer depending on exports. Several fail to bag production demands consistently through the year to match production capacity. But what causes this gap in orders? The grounds could be several.

 

Some of the popular reasons include:

 

  • The manufacturer may not have big buyers demanding high volume orders every season

  • Styles given for production could be very different from the manufacturer's technical capabilities

  •  Manufacturers are unable to meet low price demand of customers

 

Hence, during some months of the year, the volume of order fluctuates widely, dipping to as low as 40-50 per cent of the capacity or even lower.

 

The situation is tough for both manufacturers and labourers. To manage overhead costs, manufacturers often reduce the number of labourers during the lean period. Most of them are contractual workers who earn per piece of work that they do.

 

To make a reasonable living, workers move to other locations or factories in search of employment. Once orders return to the particular manufacturer, the search for labourers begins again. Each manufacturer has to compete with other factories to bring back the workforce. This inconsistency creates trouble for manufacturers who need to induct workers according to their companies' rules, regulations, production and quality systems. This stultifies the growth of the factory.

 

Inconsistency in the number of orders is the main reason low- and medium-sized factories employ contractual labour. The company cannot implement HR practices in their full spirit with these workers for obvious reasons. When factories have salaried employees, they need continuous orders. Otherwise, workers cannot aim for higher efficiency. Factories, especially those that invested heavily to meet mandatory compliance requirements to win orders from international customers, struggle to reap return on investments.

 

Boom in domestic readymade garment industry provides opportunity:

Domestic populations in all apparel manufacturing countries, especially India, are increasingly attracted to Ready Made Garments (RMG) fashion products. This segment has grown to almost the same size as the export industry. Factories that export apparel may think about filling their order gap with domestic orders to use their capacity consistently through the year. Manufacturers will thus have more ease in bagging local orders according to their production capabilities.