Beginning their journey as Araf Apparels, a garment and apparel sourcing house, the Renaissance Group (RG) has grown into a massive vertically-integrated US $ 200 million apparel manufacturing enterprise. Predominantly, a knits product manufacturer, RG is also majorly producing sweaters and shirts under 6 different group companies employing 22,000 workers. Md. Shahriar Alam, Chairman, Renaissance Group gave a fresh insight into the use of technology and systems to achieve operational excellence in an exclusive interview with Apparel Online Bangladesh.
“We realised as early as year 2001 that the buying houses will die out soon because the buyers prefer to deal directly with the manufacturers in order to save 7-10 per cent of the commission and also to get better price from garment makers, so we started our own manufacturing within two years after we entered the business in 2001,” avers Shahriar. Started with 4 lines of cut and sew knits and 300 machines of hand flats, RG’s manufacturing has evolved manifolds on three product categories – cut and sew knits, shirts and blouses, and sweaters, all in a short span of 14 years. Not that the company has closed its buying operations, rather it sources products worth US $ 20 million out of which 75% business is from Russia. “We work with philosophy of long-term partnership with the buyers and also we are flexible to changes according to changing demands,” shares Shahriar.
Seventy-five per cent of Renaissance Group’s revenue generation is currently from knits while sweaters and shirts cover for the balance. Formal suits and lingerie are the products that the company hopes to invest in, in future.
Undeterred by the struggles of the global retail industry demanding lower prices on each order, challenging Government policies proposing 0.90% tax increase on export and the struggling exchange rate, Shahriar braves that it’s time for them to carefully choose their clients. “Growth and the business will be more and more challenging in coming years to those who are strong and ready to work with tight prices, and who put continuous effort to increase plant and workers’ efficiencies to be price-competitive and pray that the exchange rate is favourable amidst fluctuating currency or go for hedging to offset the fluctuations. We have survived because of increased efficiencies and elimination of wastes,” Shahriar shares recollecting the times when they were not able to reply to buyers’ queries on hourly production. Now a group of industrial engineers are keeping track on collecting real time production data. “The factor that has impacted the entire shop floor for its improved efficiency and increased productivity, and has improved the cut-to-ship ratio is also because of our adapting to lean concept,” says Shahriar. The company is ensuring that the right methods are used through bright, educated people with IE background, replacing the production manager who goes by the experience.
With an aim to provide medical services and education in the northern region of the country, the Group has established a Barind Medical College and Hospital, extended over an area of 2.8 acres of land situated in Rajshahi city. In another initiative for corporate responsibility, Renaissance Group established North Bengal Cricket Academy in 2005 to provide quality cricket training with world-class cricketing infrastructure and opportunity to learn from experts in the field of cricket.
In the journey to bring in operational efficiencies, buyers are working hand-in-hand with the manufacturers keen to explore ways to make the product at a lesser price. “The brand George has in its team an expert on lean management who helps us in our lean journey,” shares Shahriar. H&M and PVH are also planning to go the same way. “The efficiency level at Renaissance Group is at least 15-20% less than Sri Lanka or China and there is still a long way to go,” says Shahriar. Yet the low labour cost in Bangladesh is the factor that offset the disadvantages in efficiency, Shahriar claims. Another factor that is keeping Renaissance Group in competition is its on time delivery (OTD) rate. More than 95% of OTD has assured buyers of delivery of goods on time.
Shahriar is of the opinion that Bangladesh will stay in competition as the preferred sourcing destination because of its increasing product offerings which now include lingerie and shirt factories as testimonial to the upgradation in product competency. Adding value to products by way of embroidery, screen printing and laser finishing, exporters have now started going to places like Australia, Latin America and Japan for market diversification. The presence of Accord and Alliance support Bangladesh in achieving compliance goals and the highest number of green factories in the sector have given confidence to the buyers to come to Bangladesh for business. “If we remain focused on quality, price and delivery, we will continually evolve,” believes Shahriar.
As an expansion plan, Renaissance Group has also rolled up its sleeves to be a part of the green revolution. They are in the process of setting up two green facilities for cut and sew knits and shirts and blouses. One of the green factory, named Renaissance Barind Ltd. will have 36 production lines in 3 different production floors of 1,20,000 sq. feet each, and lean is expected to be introduced at the facility. This manufacturing is expected to be operational by the mid of 2017, accounting for US $ 40 million turnover. Furthermore, the company also has plans under way for the second green unit to be operational by next year.
Fast React, a production planning software, is now integrated into their planning and production to boost efficiency, productivity, and also save time.
Though Bangladesh is fortunate in labour abundance, the challenge is to build skilled workforce. “Lean management team providing training to operators will help to beat this challenge,” states Shahriar. Measuring efficiencies and method of work are the two important areas in which the training is focused upon. “When an operator knows that his efficiency is more than the other, it gives him a feeling of doing better. Also, they are trained on handling the fabric in a certain way that takes lesser time,” explains Shahriar.
Value addition to existing products and product diversification is also a direction. “We are doing higher SMV products, more prints and embroideries and sublimation printing. We have also made investment on 800 Stoll and Shima Seiki jacquard machines for sweaters. All these initiatives are taking us forward, preparing for the future,” concludes Shahriar.