The Sunday Times FT -US funded FIPs upping garment factory productivity

A US funded factory improvement programme is boosting productivity in garment factories. The Employers Federation of Ceylon (EFC), the implementation agency of the factory improvement programme says factories that participated in the training are showing noticeable improvements.

“There is an improvement in quality through the reduction of defects, both in-line and end-line. There is an increase in productivity, for instance increased cutting department efficiency and sewing to packing efficiencies. There is reduction in labour turnover, absenteeism and sample turnaround time,” said Jayantha R de Silva, regional specialist, International Labour Organisation (ILO)/ EFC Factory Improvement Programme (FIP).

Sri Lanka’s garment factories are under increasing pressure to produce better quality at lower prices after world garment quotas ended in December 2004. To stay in business and compete against lower cost but more productive countries like China, Sri Lankan garment factories are now forced to take a second look at their operations.

The FIP is a project under the ILO’s Management and Corporate Citizenship Programme and the EFC is the local implementing agency. The programme is funded by the US Department of Labour with contributions from participating factories and is implemented in six developing countries including Sri Lanka. In Asia, countries like Vietnam and India are recipients of FIP funding. The US funding comes to over US$ 1 million for the six country programme over a period of five years. The project has wide support from multinational corporations that are also big buyers of US clothing brands from Sri Lankan garment factories.

“The first FIP in Sri Lanka was in 2002. We have now just launched the fourth FIP. In Sri Lanka we have standardised the programme to a one year programme with six modules and a section on labour laws,” said de Silva.

However, the programme has so far only been able to accommodate 27 out of over 700 Sri Lankan garment factories. The most recent headcount of garment factories conducted in 2004 by the Labour Department and a coalition of trade unions and NGOs, found 733 garment factories in the island compared to a previous 830.

Training tells
The FIP training says the EFC has shown companies how to increase output with available resources. The results of the latest FIP shows that companies have managed to cut down on the time taken to meet a sample order. “The sample turnaround time of the participating companies reduced, on average, by 28 percent,” said de Silva. Meanwhile needle down time, or the physical sewing time, increased by six percent. Sri Lankan garment workers are generally considered lower in productivity than, for instance, Chinese workers due to the much lower productivity indicators like the needle down time.

“When a worker sits at a sewing machine only a certain part of that time is spent on actually sewing. The needle down time in Sri Lanka is around six to eight percent compared to over 20 percent in China. This is because in China the workers are paid on a piece rate. Workers are paid on how many items they produce and as a result they spend more time on actual production. However, after the FIPs, on the whole, we were able to increase needle down time on average by six percent among participating companies,” said de Silva.

The FIP, says the EFC, has helped factories cut down on costly rejects. In-line defects reduced from 43 percent – 8 percent and end line defected dropped from 40% - 15% during the first and second round of FIP training in some factories. The third FIP saw a 9 percent drop on average, in in-line defects.

Garment factories are also learning to use productivity-aids to increase their efficiency. For instance, the attachment usage rate increased by 57 percent after the programme. Attachments are tools that are specially devised to speed up output.

Improved efficiencies lead to cost savings. The operating cost per minute, says the EFC, was reduced by 23 percent. “In China the cost per minute is around US$ 0.3 to US$ 0.4 per minute. In Sri Lanka it is generally over US$ 0.5 per minute and going into double digits, which can be disastrous for factories. These higher costs are due to various factors but what it means is that we work longer but produce less,” said de Silva.

Labour turnover per month reduced by 12 percent on average and the programme helped improve management-worker relations as well, says the EFC. “The management has understood that workers not only work but can think and work and also have ideas to contribute,” said De Silva. Factories were also persuaded to invest in better training and to encourage multi-skilling.

The EFC says it is currently in the process of signing up factories for its fourth round of FIPs. “We can only accommodate a limited number. Up to 12 factories have the opportunity to participate,” said De Silva.