First apparel innovation centre: Upping the ante from ‘volume’ to ‘value’ in the RMG sector
There is no debate on the fact that innovation is the key to progress for the Bangladesh apparel industry in the coming years. Taking this into consideration, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is establishing the first apparel innovation centre in the country. Abdullah Hil Rakib, director in-charge of the BGMEA innovation centre, also managing director of the Team Group and a director of BGMEA, sat with The Business Standard to discuss the innovation centre in details
What is the Innovation Centre?
The clothing industry has reached an "evolve or die" situation because disruptive technologies are frequently challenging conventional ways of conducting business.
Besides, consumers' changing appetite and increasing competition in the global retail supply chain has made the pursuit of innovation all the more important. Facilitating a transition towards higher levels of competency requires adapting to changing product design, reducing lead time, increasing productivity, adapting to the latest technologies, minimising production costs and making manufacturing plants more sustainable.
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But knowledge is the first and foremost requirement for all of our developmental efforts. With this in mind, the Bangladesh Garment Manufacturers & Exporters Association (BGMEA) is going to launch the new Centre for Innovation, Efficiency and Occupational Safety and Health at the newly built head office of the BGMEA in Uttara, which will work as a knowledge hub.
Apart from training, the Centre will also act as a "Knowledge Gateway" which will be a network of the knowledge liaise/partners to flow in and bridge the gap with the latest knowledge and developments pertinent to the industry and its sustainability.
The Centre will also serve as an extended display centre of the collections developed there and by participants from individual factories.
How much has been invested in the innovation centre and how long has it been in the planning/development phase?
The structural and interior investments for the Innovation Centre amount to about $2,50,000. In addition to that, the BGMEA will bear the operational expenses of the Centre, including the salaries of its staff.
Apart from that, the BGMEA will also arrange/subsidise funds for individual programmes of the Centre when necessary. But the major technological and knowledge showcasing at the Centre will happen through partnership with technology providing companies, embassies and development partners.
The preparation for building the Innovation Centre has been underway since July 2021 and the Centre is expected to be officially launched in this year.
What is its purpose? And why was it felt that such a centre was necessary?
The Innovation Centre will analyse the current situation, challenges, skills and the innovation landscape and recommend ways to address those challenges. It will also focus on a wider range of issues concerning the industry such as industrial engineering, productivity, efficiency, human resource development, business ethics and practises and occupational safety and health.
Bangladesh, so far, has been able to secure and maintain its position in the world market following a "volume-driven" business model. For Bangladesh, the opportunity in diversified products and fibre remains largely untapped. The country has significant room to improve in productivity and efficiency compared to its competitor countries.
On the other hand, adapting to the fourth industrial revolution - where Bangladesh still lags behind - is key for apparel industry growth.
In Bangladesh there is a missing link between our industry and academia. The BGMEA envisioned the innovation centre to connect the missing link to take the Bangladesh apparel industry to the next level.
How will it help Bangladesh compete for export orders on a global scale?
To increase productivity, what factories need are trained staff and advanced technology. The innovation centre will arrange for regularly showcasing the latest industry technologies by inviting fashion technology providers from home and abroad.
The Centre, as well as progressive factories having best practises and best uses of technologies, will enable the participating factories and their staff to remain updated on the latest technologies and their know-hows.
Lack of efficiency has a direct bearing on the industry's low level of product development capacity. As a matter of fact, a good number of our factories still tend to replicate the designs provided by the buyers. It is the time we paid more attention to our own product development capacity.
By bringing industry experts together, the Innovation Centre will arrange regular training sessions on product development for the mid-level and top-level management of the factories. Having supreme product development capacity, the Bangladesh apparel industry will be in a position to fetch more orders and more importantly, to be in a better price negotiation position.
What does "a paradigm shift in our product basket from the basics to high end" mean?
The apparel export of Bangladesh is still concentrated in five major products. Trousers, T-shirts, men's shirts, women's shirts and sweaters, mostly cotton based, account for about 73 percent of Bangladesh's total apparel export.
Though the global market scenario has changed, Bangladesh's concentration in manufacturing cotton-based clothing still remains the same. Previously, in the global market, the market share of cotton fibre products was 75 percent and the market share for man-made/synthetic fibre products was 25 percent.
But, the global market share for cotton fibre products is at present only 25 percent whereas the market share for synthetic fibre products is 75 percent. So, a paradigm shift in our product basket from the basics to high end means innovating and adding value, and exploring Bangladesh's growth potential in synthetic fibre products.
The innovation will also enable the factories to diversify their product offerings, shifting to synthetic fibre products as well as newer products such as jackets, outwear, lingerie, suits etc, which are still not as common on our production floors.
We hope the newly built innovation centre of BGMEA will facilitate the growth of the Bangladesh apparel industry by enhancing its capacity and increasing its competitive edge.
Industry 4.0 is becoming a very real scenario. Will the centre promote new technologies that feed into Industry 4.0? If so, which technologies? And will workers be upskilled to operate such tech?
The fourth industrial revolution is building on the digital revolution that revolves around automation, artificial intelligence, internet of things etc. which is changing industries and businesses.
The technological transformation, albeit slow, has already begun in Bangladesh's textile and RMG sectors as well. Roughly 8 percent of the jobs are automated in the RMG sector and by 2025, it is expected to reach 25 percent.
While deploying cutting-edge technology, the factories must also enhance the knowledge and skills of workers so that they can handle the latest technologies. To prepare Bangladesh apparel industry for the fourth industrial revolution, within the premises of the Innovation Centre, a one-stop resource centre will be set up in collaboration with Textile Technology Business Centre (TTBC), which will regularly organise trainings and workshops under a specialised 'Knowledge Series' on cutting-edge technologies and resource efficiency solutions.
Yes, the workers will be also upskilled to operate in the era of the fourth industrial revolution. Worker skills development is already underway under the Skills for Employment Investment Programme (SEIP) of the BGMEA, which will be integrated into the Innovation Centre to upskill the workers.
Factory safety is still a key concern. How does the innovation centre help Bangladesh's factories operate more safely, if at all, or promote factory safety as a priority?
It will not be an exaggeration to say that the Bangladesh apparel industry is now one of the safest in the world. The industry has undergone tremendous transformation in the last eight years.
The safety transformation has been done through unprecedented collaboration of the global brands and retailers, manufacturers, government, ILO, development partners as well as local and global unions.
A recent survey report by Hong Kong-based supply chain compliance solutions provider, QIMA, ranked Bangladesh's apparel industry second in "Ethical Manufacturing" with a score of 7.7, only behind Taiwan.
The ethical auditing report covered a wide range of compliance and ethical manufacturing issues, e.g., hygiene, health and safety, waste management, child and young labour, labour practices, including forced labour, worker representation, disciplinary practices and discrimination, working hours and wages etc. After addressing the safety concerns, the apparel industry of Bangladesh is also making steady strides in sustainability.
The highest number of green garment factories in the world is now located in Bangladesh. Our country at present is home to 144 apparel factories which are certified as LEED (Leadership in Energy and Environmental Design) by the US Green Building Council (USGBC). Among them, 41 are LEED Platinum-rated and 89 are LEED Gold-rated factories.
Moreover, 500 more apparel factories are in the offing to get the LEED certifications. However, I will not argue that our apparel industry is now all clean and perfect. We must not be complacent and we believe there is always a scope for improvement.
The name of the Centre, "Centre for Innovation, Efficiency and Occupational Safety and Health," itself denotes that it will address promoting safety in the industry as one of its priorities. The Centre, by organising regular safety training and promoting the best industry practises in safety and occupational health, will strive to make Bangladesh apparel industry safer.
Where does Bangladesh's garment industry hope to be in the next five years?
With about 40 years of experience, the Bangladesh apparel industry now has strong footing. We have an experienced workforce, strong backward linkage and resilient entrepreneurs who have contributed to grow this estimated $31 billion industry, on many times swimming against the tides and overcoming many challenges.
However, with the nation preparing for elevation from the Least Developed Country (LDC) status, it's not a time for us to rest on our laurels. Now is the time for us to consider what steps need to be taken to ensure sustainable growth and continued success of our beloved RMG industry through innovation.
In the next five years, we hope to elevate the Bangladesh apparel industry to the next level and start the shift of the country's apparel industry from "volume" driven to "value" driven.
