Knitting Today | February 2019

Unveiling industry best practices

Knitting & Knitwear Fe b r u ar y 2 01 9

A Textile Today Initiative l Published with Volume 12, Issue 02 l Pages 79 to 96

Profitability crisis of knit sector and possible way outs (Part-II)

Knit sector gains a great momentum in 2018

Unveiling industry best practices Knitting & Knitwear

Pailung knitting machine offers quality, flexibility, productivity, functionality, and reliability

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 K n i t i n g To d a y

Profitability crisis of knit sector and possible way outs [Part-I was published in December '18 issue]

(Part-II)

Engr. Kawsar Alam Sikder, COO – Textile Division, Asrotex Group At least 513 factories were shut down within the last 4 years.

Several challenges hit our knit sector like a hurricane, of them Tajrin Garments fire incident, collapse of Rana Plaza, workers movement to increase minimum wages, workers movement to adjust the wages of senior workers are most prominent. Those incidents not only affected a particular factory Figure: Knit sector has opportunity for further improvement. rather created a lasting tailspin impact on all the I want to share my ideas which factories of knit sector financially. will be eye-opening for the knit Today I will try to point out the manufacturers. scopes and how to overcome this Right First Time (RFT): After crisis. getting the order from a customer, In part 1, I have mentioned a few we have to divide the whole order management failure cases which quantity into smaller production impact on profitability. Today I lot size. Many factories do not want to narrate few operational measure, how many productions failures or low-performance areas lot produce at first time with good which impact on profitability. quality means Right First Time Running with low profit for a (RFT). Higher RFT means lower long time, factories were thrown reprocess/rework/alteration etc. out from the race and making When marketing team quote for survival of the business difficult. price or negotiate for price, do they consider factories RFT? Most

Bangladesh Textile Today |

Volume 12, Issue 02

of the cases, they do not consider.

Buyer’s target price was too competitive, to grape the order, they only consider industries ideal situation. Means, the buyer does not pay for our reprocess/rework/ alteration etc. It is not possible to keep the calculated profit margin in double-digit when confirming the order. To rectify the non-RFT production lot, the factory must deploy additional resources like man-hours, machines, utility definitely it will deduct from the margin.

Rectification of non-RFT

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production lot obviously decreases production. It has a huge impact on quality, though the factory passes forward after taking appropriate measures. There is a chance of overlooking in end inspection or early failure in customer end. Customer claim and dissatisfaction are the consequences, the factory may lose the confidence of customers.

Which may increase the chance of decreasing the business volume.

Resources utilization: The buyer asks quotation with cost breakdown from several factories.

Means, the buyer knows the yarn price, knitting charge, dyeing charge, process loss, consumption, SMV and even how much calculated profit consider in the cost sheet. Factories can’t offer a higher price than industries average, if someone offers a higher price, definitely the buyer will go for hard bargaining if they don’t have the option to place an order to other factories. So smarter people will concentrate on optimum utilization of resources like yarn, fabric, utility etc.

At first, we can measure the existing amount, then set a goal to reduce the usages within the time frame. Continuous follow up will help to achieve the set goal. In many cases, reuse of the resources is also possible. Form a team, who will take positive initiatives, adopting an incentive plan also expedites the process.

Wastage reduction: If we compare the current wastage percentage with five years earlier, definitely we will find noticeable improvement.

It’s true, our capability, know-how, and skills have enhanced a lot, on the other hand, tougher situation i.e. low profitability of the business, makes us more conscious to minimize wastage. I believe, still, we have room for further improvement.

Most of the factories, consider material waste as wastage. Rather than material, six more wastage is existing in our manufacturing

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industries, in the light of Lean Philosophy. Transportation waste exists in most of the Bangladeshi industries because the industries expand step by steps from a small startup. Wasting in transportation due to the bad process flow, leads to wasting huge time, money, man-hour as well as material rejection. If we look into Inventory, Motion, WIP, over processing, overproduction & defect, surely, we will find the presence of wastage. Everywhere, wastage exists and there is a huge opportunity to reduce wastage.

Learning and adopting Lean Philosophy will make a difference.

 What we have done in investment, most of the factories common practice is, observe what others are doing, and observe where others are investing.

Taken investment decision based on current trends, we should do a feasibility study and consider the return on investment, before investment/expansion of any manufacturing factories.

Rejection: Any rejection means, we have three option in hand, either replace or rework or reject.

If we consider, more allowance, in that case, rejection can be possible. That much probation is not in our hand due to the low price of the finished product.

Any replacement of material directly impacts on profit as because it was not considered in the cost sheet at the time of order confirming. Any alteration/ rework also has a negative impact on portability, it has a cascading effect like more cycle time, usages

of additional resources and effect on overall production.

Utilization of manufacturing capacity: What we have done in investment, most of the factories common practice is, observe what others are doing, and observe where others are investing. Taken investment decision based on current trends, we should do a feasibility study and consider the return on investment, before investment/expansion of any manufacturing factories.

Whatever wrong, we have done in past, we can only recover by maximum utilization of existing manufacturing capacity. Top management should focus on selling their idle manufacturing capacity, either by doing own orders or sub-contracting orders.

I have noticed the first digital market place, www.aliganz.com where idle capacity can buy or sell, along with your existing marketing team. It will help factories to optimize the utilization of manufacturing capacity as well as minimization of cost.

Development of human capital: Most of the textile and garment factory owners or Board of Directors want to buy talent to resolve existing problems, it is a costly process, and will not get the desired result all the times.

Moreover, there is a scarcity of expertise among personnel in the relevant field. It will be wise to take initiatives to build expertise from your existing strength. This is economical, though it is a long term process. This is more sustainable than other options.

Capability, skill, attitude, and knowledge of the majority of our strength can be enhanced by providing proper training, counseling etc. it’s true that Industries are passing a tough time due to low profitability. Adopting the above initiatives can give us a way to overcome the crisis causes of low profitability.

Bangladesh Textile Today |

Volume 12, Issue 02

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Knit sector gain a great momentum in 2018 The government should come forward to facilitate necessary support to resolve the remaining challenges and utilize the opportunities as the sector can boost further Akhi Akter, M M Uddin The global knitting industry is growing at a fast rate as the popularity of knitting has grown tremendously in recent years. The increased versatility of techniques, the adaptability of many new man-made fibers and the rising in consumer demand for the greatly expanding areas of sportswear, other casual wear are driving the growth.

Bangladesh knit sector is one of the largest knit garments manufacturing industry in the world considering both capabilities and competitiveness. The sector is producing top quality knit garments at the lowest cost.

Bangladesh has been a heaven for producing knit garments for global brands who are always getting the best deal here, taking out the best quality out of the lowest possible money.

market share in cotton & cottonrich knit products for the last 16 years. World’s leading brands are sourcing knit garments from Bangladesh like H&M, Walmart, C&A, Zara etc.

Bangladesh exports numerous popular knit items to the global market. Recently Bangladeshi knit

manufacturers have concentrated on making value-added items to sustain strongly in the global arena.

In 2018 (calendar year), Bangladesh knit sector saw great growth. Economists and business leaders opined that calmness in the country’s political arena,

Top brands importing knit products from Bangladesh

Bangladesh knitwear export scenario There are a total of 4560 garments factories in Bangladesh exporting apparel products in the global market, of them about 2500 are knit garment factories.

With almost all major retailers, Bangladesh has a significant

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Major knit export items

T-shirt

Knitted Jacket, cardigans

Polo shirt

the US-China trade war, and improvement in safety conditions in the ready-made garment factories were main reasons behind the increase of knit export.

Month

Knit exports in 2018 (billion US $)

January

1.31

February

1.21

March

1.19

April

1.21

May

1.39

June

1.24

July

1.52

August

1.38

Pullover & sweatshirt

Fashion items

According to figure 3, knitwear export has increased by 11.76% to 16.24 billion USD in 2018 compared to last calendar year that was 14.30 billion USD in 2017.

Knitwear export earnings of 2018 is 1.71 billion USD higher than the previous year.

Sports jersey & trousers

• Fast fashions pressure • Poor infrastructure • Unstable power supply • Higher bank interest • Unplanned capacity expansion • Production cost increase

Major sourcing countries

October

1.66

Bangladesh exports knit items to almost 50 countries where the European Union (EU) and the USA are the main destinations.

According to BGMEA data, in 2018, Bangladesh knit sector exports 11.61 billion USD in EU and 1.43 billion USD in the USA. In the non-traditional market, knit sector exports 2.72 million USD.

November

1.43

Challenges of the knit sector

December

1.34

According to sector people, the knit sector is facing the below challenges:

September 1.29

Above table is showing that each month of 2018, the sector has earned an average amount where in October knitwear exports has seen the biggest growth to 1.66 billion USD.

Babies items

 In 2018 (calendar year), Bangladesh knit sector saw great growth. Economists and business leaders opined that calmness in the country’s political arena, the US-China trade war, and improvement in safety conditions in the readymade garment factories were main reasons behind the increase of knit export.

• Lack of design input, innovation • Lack of product variety • Productivity challenge

Knitwear export trends of Bangladesh 18 16.24

16

14.53

13.73

14

12.79

12.16

11.76

12 10 8

7.34 6.29

6

5.82

5.18

4 2 0

2014

2015 Increase rate (%)

2016

2017

2018

Total knit export (billion US $)

Figure 1: Knitwear export trends of Bangladesh from 2014 to 2018 (in USD billion)

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Volume 12, Issue 02

 Opportunities of the knit sector

 K n i t t i n g To d a y

Top 5 export destinations for knit products in 2018 (USD million)

There are huge opportunities for the knit sector, some are mentioned below: • Competitive labor cost • Robust backward linkage

USA 1435.67 $

UK 1963.24 $

• State-of-the-art facilities • GSP facility (other than the USA) • Increase market share by entering to the untapped product group • Increase business by entering to the untapped market

Germany 3322.2 $

Spain 1317.3

France 1150.09 $

• Overtake extra business from China Thousands of factories of Bangladesh are producing basic knit products. The price of basic products is going down drastically.

On the other hand, wages have been increased by 51% that is a great reason behind the rise of production cost. Standing in the situation, factories should invest to increase the capability of doing value-added products. It is not practical to increase the market share further on those basic

product lines since the demand for value-added products has been increased.

Now the knit manufacturers need to identify the products where they have a poor market share and they need to develop efficient know how.

In fine, Bangladesh has already proved that it is capable to fulfill the global demand for quality knit garments, however, to sustain in the global arena for a long time,

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we need to identify challenges and scopes appropriately. The government should come forward to facilitate the necessary support to resolve the mentioned challenges and utilize the remaining opportunities. Also, we have to increase our knowledge level and we have to reduce dependence on basic products.

We have to increase production of value-added products to cater the global buyers and get fair prices.

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Pailung knitting machine offers quality, flexibility, productivity, functionality, and reliability FT Research Team Pailung Machinery Mill Co. Ltd. established in 1977, a Taiwan based knitting machine manufacturing global company. Pailungs’ goal is to help brands, designers and manufacturers to develop innovative fabric technologies that boldly transform the end results.

Pailung machines are available in 72 countries through over 30 agents. Pailungs’ Bangladeshi agent is Tex Excellence Limited.

Pailung in Bangladesh Pailung is successfully conducting its operations in Bangladesh for a long time. Factories prefer Pailung machines because of its quality, flexibility, productivity, functionality and, more importantly, reliability. With the support of a local agent, they are now one of the most popular knitting machine suppliers and solution providers in the knitting sector.

Customer feedback Palmal Group, one of the leading knit composite company of Bangladesh using Pailung knitting machines of different ranges.

Almost 80% knitting machine of Palmal Group is of Pailung. Arkay Knit Dyeing Mills Ltd, a sister concern of Palmal Group has 86 the latest technology Pailung machine out of 166. They have Pailungs’ single jersey, rib machine, interlock, and fleece knitting machine.

Why a factory should use Pailung machine, answering this question Indrapal Singh Rawat, Head of Operations of Arkay Knit Dyeing Mills Ltd. pointed out some points• Very much price competitive • RoY is 3-4 times less than others

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Figure: 80% knitting machine of Palmal Group is of Pailung.

• Efficiency 80-85% average

many renowned factories.

• Easy handling for the workers

With 86 different models with specifications ranging from 3 inches to 64 inches’ diameter and 3 to 60 gauges, Pailung offers the widest range of machines in the circular knitting segment.

Effectively, including all variants, the company offers 200,000 different types of machines based on customer requirements.

•C omparatively less maintenance cost than others • Spare parts are locally available • Very good after sales service •U p to date technology support etc.

“Average production of the newly established machine is 300 kg per day. In Pailung machine we don’t have to waste time to set a new design, hardly it takes one day to go for production,” said Md. Nayan, Assistant General Manager (Knitting) of Arkay Knit Dyeing Mills Ltd. “We are facing some problems in the new machines due to change of inverter model, though we already informed them and they are taking action,” he further added.

According to Indrapal Singh, Pailung has its own strength especially in single jersey and rib machine. He is in Bangladesh for the last 8 to 9 years and worked in

“It’s very rare for a machinery manufacturer to have such a wide range of machines to offer to the market. Compared to our global competitors we are much younger and smaller. But we have the flexibility to offer a very wide range of custom-built machines meeting the specific requirements of customers, which is our biggest strength,” James Wang, Chairman, Pailung said.

“We are not just a machine builder, we are a solution provider,” he added. Pailung acquired the USbased circular knitting machine manufacturer Vanguard in 2009 to increase their strength in product innovation and technology.

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Sweater exports post an 18.57% rise Staff Correspondent Bangladesh’s exports shipment of sweater picked up by 18.57% to $2.93 billion in the July-January period of the current fiscal year.

According to Export Promotion Bureau (EPB) data, in JulyJanuary period of the fiscal year 2018-19, Bangladesh earned $2.93 billion exporting sweaters, which is 18.57% higher compared to $2.47 billion in the same period last year.

Talking to Textile Today, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice President Mohammed Nasir attributed extended winter season and quality of the product for the Sharp rise in export earnings from the sweater sector.

In addition, the manufacturers also have upgraded the technology in meeting the global demands and to improve the quality of goods, which attracted the buyers’ attention and they placed more orders, said Nasir.

Bangladesh’s Sweater Export to world: Value in billion USD 2017-18 (July-Jan)

2018-19 (July-Jan)

Growth

2.47

2.93

18.57%

In the current year, we are hoping to register over 20% growth as the industry is now one of the safest in the world and buyers are placing more work orders, said the business leader.

But the government has to provide policy support and gas and electricity connection to the new entrepreneurs so that we can increase our capacity to lead the global export market, he added.

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Figure: Bangladesh Sweater exports post an 18.57% rise in July- January period of the fiscal year 2018-19. Courtesy: Pretty Sweaters Ltd

Meanwhile, the trade analysts termed the growth as a good sign for the Bangladesh economy as it would help to enlarge the export earnings and help the diversification of products.

“Right now, Bangladesh is taking the lead in the global export market in apparel goods, where sweater products are contributing over $3.50 billion. So, the sharp rise in export earnings from the sector will be a blessing for Bangladesh to reach the export target of $50 billion by 2021,” former Finance Advisor to Bangladesh caretaker government AB Mirza Azizul Islam told the Textile Today.

In maintaining the growth, manufacturers have to move for diversifying goods as well as to explore new markets. In addition, the government has to play an important role in availing duty-free market access where there is an opportunity to grow, said Islam.

However, the manufacturers urged the global retailers and brands to increase prices of goods as the production cost has gone up sharply due to expenses of safety improvement.

In the last few years, the production cost of apparel goods went up by over 15% as the manufacturers have to bear the expenses of safety equipment to ensure a safe workplace for the workers, said Nasir.

While the implementation of the new wage structure is another burden for the owners but the brands are not increasing prices of goods, said Nasir urging to consider the price issue.

On the other hand, in order to grab a larger market share, Bangladesh has to increase port capacity to reduce lead-time, while inefficiency of infrastructure is another impediment that needs to be addressed.

Bangladeshi sweater manufacturers import spin from China and it takes eight to ten days to reach Chattogram port, from where it takes 16 days to reach factory premises from the port. It should be a six-hour journey from Dhaka to Chattogram when carrying finished goods for shipment, but it takes up to 24 hours to reach the port city.

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Tailored Industry pioneering west free knitting solution Desk Report Tailored Industry, a knitwear manufacturing startup based at the Brooklyn Army Terminal in New York City, is trying automating knitting sweaters and making them to order instead of making thousands that then have to be trashed if no one buys them.

At present, in the era of fast fashion. Fashion’s trash is a titanic problem. This is partly a planning problem: When brands try to project demand for a particular shirt or dress, they often end up making far too many clothes.

By one estimate, 30% of the 150 billion garments produced each year are never sold.

By using software to connect brands to its 3D knitting machines.

Tailored Industry, at its facility uses Japanese-made knitting machines that can knit the sleeves and body of a sweater simultaneously without any cutting and sewing– another step that reduces waste compared to some other methods of production.

Tailored Industry’s on-demand

the founders of Tailored Industry.”

“The whole process takes a year to two years. What really results from that is a lot of overproduction because they’re producing based on the forecast of what they think they need. And what we’re doing is basically bringing the minimum order quantity to zero, so that we can produce exactly what they need when they need it,” Alex Tschopp added.

Figure: Tailored Industry is pioneering automating knitting sweaters and making them order instead of making thousands that then have to be trashed if no one buys them. Courtesy: Tailored Industry

model enables fashions brands to launch new products both quickly and affordably, while providing production solutions that aim to precisely match supply with demand. This is all made possible through the tremendous work of its employees, including software engineering, advanced manufacturing, and marketing.

“Right now, fashion brands are really stuck in long planning cycles,” says Alex Tschopp, one of

Sustainability Tailored Industry’s on-demand model drastically reduces overproduction throughout the fashion supply chain. On-demand is a pull-based system, where demand from a customer prompts a garment to be made, instead of the traditional push-based system where forecasted demand drives production quantities.

Its 3D knitting machines virtually eliminate raw materials waste; each garment creates less than 1% excess material. As well as local manufacturing reduces shipping and creates advanced manufacturing jobs.

Pakistan’s knitwear export sees boom Desk Report Muhammad Jawed Bilwani, Central Chairman of Pakistan Hosiery Manufacturers and Exporters Association (PHMA), has expressed optimism that the knitwear garment sector will be able to increase its exports by 20% in the next six months provided the government meets its promises.

Knitwear Garment sector's share in the Global Market is 30%. During the last six months of the present fiscal year, Pakistan's Knitwear Garments exports have shown growth of 10.5% and stand on top in the textile group and other sectors.

Bangladesh Textile Today |

its exports to 20% in the next six months.

Jawed Bilwani pledged that upon receipt of payments against refunds and with assurances of uninterrupted supply of gas and electricity, this sector will increase

Volume 12, Issue 02

Jawed Bilwani looked forward to the government revealing its plan of releasing refunds under the Drawback of Duties and Taxes (DDT) scheme as it was critical to encourage an increase in exports.

Bilwani also welcomed the withdrawal of import duty on hundreds of raw materials used for manufacturing export products.

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Success Story: Ring spinning system G 32 – the first choice for mixed yarn production Rieter’s customer Sharmanji Yarns has been faced by a high demand for their well-known polyester/cotton yarn.

To increase their production the company has decided to invest in a ring spinning system G 32. The customer profits from this new investment with higher returns in terms of overall productivity and product quality.

Desk Report Sharmanji Yarns Pvt. Ltd. manufactures and exports yarns made of 100% cotton as well as cotton and polyester blends. The company uses a ring spinning system with 98000 spindles.

Before venturing into yarn spinning in 2007, the company had been involved in yarn trading in Ludhiana, Punjab since 1964.

The company’s star product is a polyester/cotton yarn, which is well-known in Ludhiana for its outstanding quality. Thanks to its recent investment in a Rieter ring spinning system, the company has managed to increase its capacity to 132000 spindles.

The Challenge: Increase production of polyester/cotton blends As a former yarn trader, Sharmanji Yarns is well versed in the quality requirements of yarn customers and the company places high importance on producing yarn of the same high quality as it was distributing as a yarn trader. It was the sharp increase in the demand for polyester/cotton blends that influenced Sharmanji Yarns to add this yarn to its product range.

For them, it was crucial that this new investment would provide higher returns in terms of overall productivity and product quality.

Further, Sharmanji Yarns wanted to take advantage of lower installation lead time to be able to grasp complete advantage.

Figure. 1: Ring spinning machines G 32.a

meeting the high demands that the company places on yarn quality. Rieter recommended that company management invests in a complete, powerful system, from the blowroom right down to the end-spinning machine. So Sharmanji Yarns became the first company in India to install the new Rieter bale opener UNIfloc A 12, an exceptionally productive machine which processes up to 2 000 kg of raw material per hour.

The card C 70, draw frame RSB-D

45 and ring spinning machines G 32 were equipped with the Rieter man-made fiber package (synthetic fiber packages for processing polyester fibers and its blends). The combing preparation system OMEGAlap E 36 with its innovative winding belt technology and the comber E 86 with circular comb Ri-Q-flex were offered for processing cotton.

In 2013, the company tested six ring rails on the G 32 to discover for themselves the benefits it

The Solution: Ring Spinning Machine G 32 Since 2007, combers and draw frames from Rieter have been

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Figure. 2: Ring spinning machine G 32 – for the production of high-quality yarns produced with high efficiency.

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would offer in terms of saving energy and reducing yarn conversion costs. The impressive test results led Sharmanji Yarns to use Rieter machines in the realization of its 27648-spindle project.

Rieter’s dedicated project team worked closely with Sharmanji Yarns’ technical team throughout the preparation and installation phases to ensure fast installation and commissioning. After a threemonth installation process, the system was ready for operation, delivering yarn which met the customer’s requirements for both quality and quantity.

The Benefits for Sharmanji Yarns: Sharmanji Yarns is now enjoying the benefits of a Rieter system: higher plant productivity with high yarn quality. The suction tube ECOrized installed on the ring spinning machines G 32 reduces the energy consumption.

Together with the energy-saving machines in the blowroom line, the cards, and draw frames allow the company to save around 8%

Figure 3: Mr. Ashu Jain, Managing Director of Sharmanji Yarns Pvt Ltd.

of energy in the UKG values. The entire Rieter system offers higher productivity, so it requires 10% less space. This reduces the company’s indirect costs.

Sharmanji Yarns was hugely impressed by these benefits. For its next expansion, the company has placed an order for a second system project (once again for polyester and cotton yarn production) consisting of 34272 spindles.

The Customer’s Statement “We have been working with Rieter

for a number of years, largely because of Rieter’s innovation.

The company is continuously developing its machines and offers us first-class solutions. This enables us to produce high-quality yarn while keeping operation and production costs low. The level of dedication of the company’s After Sales support team is also very impressive. We are very pleased with our decision to work with Rieter.” says Mr. Ashu Jain, Managing Director of Sharmanji Yarns Pvt Ltd.

Gucci pulled polo neck sweater over blackface resemblance Desk Report the greatest grief," he said in the letter to Gucci's 18,000 employees, first reported by the website Women's Wear Daily.

Last week, the fashion house Gucci has removed an $890 sweater that was criticized for its resemblance to blackface, from its stores and website after social media users denounced it as resembling blackface.

"But I am aware that sometimes, our actions can end up with causing unintentional effects. It is therefore necessary taking full accountability for these effects."

The "balaclava" knit was part of Gucci’s autumn/winter 2018 range.

In a letter to all the employees, Creative Director of Gucci, Alessandro Michele said racism was not the intention behind the balaclava sweater — which featured a pull-up neck and bright red lips as a cutout for the mouth.

"The fact that, contrarily to my

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Figure: Gucci's creative director addressed the controversy over the brand's $890 sweater that was criticized last week for its resemblance to blackface.

intentions, that turtle-neck jumper evoked racist imagery causes me

Gucci, the Italian luxury brand also released a statement last week that said, "We are fully committed to increasing diversity throughout our organization and turning this incident into a powerful learning moment for the Gucci team and beyond."

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Volume 12, Issue 02