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From left: David Ross, Rohana Kuruppu Chairman, Textile Institute and Dr. Wasantha Wimalaweera, Secretary of the Textile Institute. (Picture by Gamini Rupananda, Colombo South group correspondent)

Sri Lanka should move into the upmarket clothing exports sector and compete with Malaysia, Korea, Hong Kong, China and Taiwan to hold a better share in exports, R.U. Kuruppu, the Chairman of the Textile Institute said.

"We should adopt cost cutting methods and produce clothing at a competitive price," he said at a recent seminar on "Cost Reduction Through Efficiency Improvement" at the Phoenix College of Clothing Technology, Ratmalana.

He spoke on the competition that we would have to face with our immediate neighbours. He said India's share of world exports of clothing increased from 1.5% in 1980 to 2.6% by 1994. Sri Lanka's global market share of clothing exports stood at 2.0% by 2000.

He made a comparison between Sri Lanka and Bangladesh and showed that Bangladesh had earned US $ 2,367 million as against Sri Lanka $893 during the year 2000. He said that Sri Lanka's hourly labour cost is more than Indonesia, Vietnam, Bangladesh, Pakistan and India.

Therefore, it is no point competing with products that are being produced by these countries because Sri Lanka will not have an advantage.

Basically, the garment cost consists of labour and overheads, raw material and profit, Mr. Kuruppu said, Reducing cost is not easy. The best would be by reducing labour cost.

This means, reducing the Cost Per Minute. This is done by either reducing the total overhead cost or by increasing Standard Minutes earned or doing both. He said that to increase Standard Minutes, one would have to increase production. This can be done by increasing efficiency. Also, by method improvement the Standard Minute Value can be reduced, Mr. Kuruppu said.

In the case of overhead cost, most is the wages contributing about 50% - 60%. Therefore, it is important that we look at controlling our indirect labour. Ideally, convert the indirect to direct labour and operate the factory at 80% efficiency in order to bring down the product cost.

Mr. Kuruppu said that most Sri Lankan factories do not compute the efficiency accurately and therefore, they do not know their "Potential Lost" in terms of profit. Our clothing industry operates at an average of 40% efficiency, he said.

David Ross of UK said that the Sewing Operator should be informed about the method and be given all the raw materials in correct quantity and quality to sew.

Once she is given the correct machinery with the required skill, then motivating and improving the "pace" are relatively simple but a time consuming task.

Mr. Ross said that there is a need to have proper tools to record information pertaining to production and then take action depending on information received. Work measurement must be accurately carried out and realistic targets must be set to international standards. Also, lost time must be recorded. If workers don't measure correctly and act upon the information, then profits are being wasted and the competition moves ahead.

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