India became the second largest exporter of textile goods in 2013, primarily due to growth in apparel sector. Total exports reached $40 billion but is still far behind China's export of $270 billion. The textile industry in India has a long history and contributes to more than 4% of the GDP. It is the second largest sector providing jobs after agriculture. The apparel sector is relatively organized and mature in IT adoption, seeing a double digit growth over the past few years. Last week, the Chairman and CEO of Uniqlo, Japan's largest apparel retailer met the Prime Minister for possible sourcing and setup of operations in India.
Given the recent developments and the vast potential available, it becomes important for the industry to look at leveraging appropriate technology for its long term outlook. Traditionally, the focus has been on improving the bottom line. Usage of industry specific ERP and PLM software by large garment manufacturers digitizes information flow. CAD tools are used for product design with seamless transfer to plotting and cutting machines. Exchange of product specifications and documents is a mix of manual steps and integrations. Optimization of the raw material cutting process to reduce wastage of raw material is happening. Most of the players are contract manufacturers with their products getting sold under different brand names. Capacity in measures of millions of minutes available in manufacturing lines is used for procuring orders. Some of them have their own brand names and retail chains that are not as popular as the big global names.
One major challenge for the industry is labour shortage. Given a wide variety of employment opportunities from rural schemes in villages to the more recent booming service industry in towns and cities, getting skilled work force is a challenge with inflationary wages. Automation of manufacturing can be the answer for scaling up finished good production. Automation is in pockets today - laser cutting of cloth, stitching, finishing etc., But what is required is cost effective and feasible end-to-end automation including handling of materials. Enterprise IT systems such as social media, CRM, PLM and ERP can be well integrated with seamless flow of information in preparation for large scale operations.
For the Indian export share to scale up, a focus on just bottom line improvement will not be sufficient. Management focus on improving the revenue in terms of volume, larger deals, new markets and products and scaling up of operations is required. Given a vibrant, aspiring and growing middle class in India, social media can be leveraged to understand the market mood and launch proprietary brands and product categories catering to niche segments such as students and youngsters. R&D can be given additional focus to design creative products with quick turn around.