Productivity issues in manufacturing companies in

Bangladesh

Khairul Bashar Bhuiyan

ID # 163-5167-090

Prepared for,
Dr. Md. Ahsan Akhtar Hasin
EMB 650 Operational Management
Date: 18 September 2020

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Abstract

Productivity and efficiency are the heart cores of the apparel industry in the sense of business
growth and sustainable position in this era of a competitive market. At the beginning of the
apparel industry revolution in Bangladesh, productivity percentage was flexible and relaxed.

Business owners did not focus on workers’ efficiency and labor productivity as labor cost was
very low and the Cost of Manufacturing (CM) value was high. However, with Industry at super
speed, competitive markets increased, the value of CM and FOB decreased. In this circumstance,
brands and retailers are now very much mindful about what CM, wastage percentage calculating
by apparel suppliers at the same time, some brands keep solid angle eye on factory overhead
cost.

Low productivity of workers is the most significant factor behind delivery slippages in
manufacturing industries. As manufacturing is a laborer predominant industrial sector, this paper
focuses on worker output and their efficiency in the manufacturing sector. It covers the
definitions of productivity, efficiency of the workers, its perspectives and the factors influencing
the productivity. Objective of this article is to find out how the productivity of workers in a
manufacturing industry is affected. The essential significance of this review is in identifying the
key variables influencing efficiency of laborers in a manufacturing industry with special
emphasis in machine tool industry.

In this highly competitive capitalist world, brands and retailers comprehensively calculate all
costs associated to produce a garment by garment factories before placing their order to a
readymade garment (RMG) for the best price bargain. Where the Bangladeshi apparel industry
with around 40% worker productivity fallen far behind, though neighboring RMG manufacturing
countries have progressed tremendously. So, how to get around these decade long obstacles and
fallen behind mind-set? What can be done to keep sustainable business profits margin,
productivity and efficiency?

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Literature Review

Productivity is a measure of the efficiency and effectiveness to which organizational resources

(inputs) are utilized for the creation of products or services (outputs). In readymade garments
industry, “output” can be taken as the number of products manufactured, whilst “input” is the
people, machinery and factory resources required to create those products within a given time
frame. In fact, in an ideal situation, “input” should be controlled and minimized whilst “output”
is maximized. Productivity can be expressed in many ways but mostly productivity is measured
as labor productivity, machine productivity or value productivity. Productivity gains are vital to
the economy because they allow us to accomplish more with less. The apparel industries need to
produce momentous quantities in shorter lead times as apparel product is highly correlated with
high level of productivity.

A garment production system is a way how fabric is being transformed into a garment in a
manufacturing system. Production systems are named according to the various factors such as
number of machines used to make a garment, machines layout, total number of operators
involved to sew a complete garment and number of pieces moving in a line during making a
garment. Among the various production systems progressive bundle system and one-piece flow
system are most found in the readymade garments industries. In Bangladeshi apparel industry,
single product line balancing proposed to use the new production system that combines
traditional and modern modular manufacturing systems both together in order to improve the
productivity. However, there are some other issues where the productivity faces the obstacle.

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Introduction

Production: In simple terms, ‘Production’ is the process of manufacturing or fabricating or

producing certain type of goods, semi-finished or finished, input being basic raw material or
semi-finished products or sub-assemblies. Production is a measure of output only and not a
measure of efficiency of the organization.

Productivity: Biggest and most challenging task faced today by any organization is
“PRODUCTIVITY”. It is the measure of the combined efficiency or integrated efficiency of
employees, machines and other devices and equipment’s, nature of raw material inputs,
performance of the management, efficiency of the whole production system. Productivity can be
computed and expressed as the ratio of average acceptable output per period by the total costs
incurred through various resources (Labor, Input material, consumables, power utilized, capital,
energy, material, personnel) consumed in that period. It is nothing but a measure of efficiency of
the integrated system consisting of resources like Money, Men, Materials, Machines (4 Ms of an
industry) and time etc.
Peter F Drucker said, “Productivity means a balance between all factors of production that will
give the maximum output with the smallest effort.” According to European Productivity Council,
“Productivity is an attitude of mind. It is a mentality of progress of the constant improvement of
that which exists. It is certainty of being able to do better than yesterday and continuously. It is
constant adoption of economic and social life to changing conditions. It is continual effort to
apply new techniques and methods. It is faith in human progress. International Labour
Organization has defined Productivity as “the ratio between the volume of output as measured by
production and the corresponding volume of labour input.” Japanese holistic view is
“Productivity is a comprehensive holistic phenomenon encompassing all elements required to
improve products / services (output)”.

The term ‘Productivity’ must be understood differently from the term ‘Efficiency’. Efficiency is
a narrower concept about the performance level of a single element. Productivity is defined in a
much broader sense. Adding more unnecessary work is not exactly productive. Productivity is a
measure of effectiveness of a production system. Producing right type of products of right
quality (as per the design requirements) is what is expected from the term productivity.
Productivity is a product of rate of production and the quality of outputs and therefore it is rather
outcome-oriented than output-oriented.

Partial Productivity: When only one variety of inputs is considered for the measurement of
productivity, then it is often referred as “Partial Productivity”. For example, measurement in no
of pieces of shirts produced from a fixed length of a cloth piece. In an organization, worker
hours, materials or power used per unit of production are typical examples of partial
productivity.

Multi Factor Productivity: Productivity measures that consider more than one variable or
factors are termed as “Multi Factor Productivity (MFP)”.

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Total Factor Productivity: Productivity which is the measure of all the variables or factors
influencing the production process (Men, Machines, Material and Money or capital employed,
energy charges, overhead charges etc.,) is termed as “Total Factor Productivity (TFP)”. Ratio of
the total output of a chemical factory with respect to the installed capacity of the plant which
considers all the inputs is the typical example of MFP.

Output
MFP = ----------------------------------------------------------------------------------------------------
Men+ Machines + Material + Capital, Energy charges & others

Profitability: Profitability of any system or organization hint at how efficient the organization
utilizes its resources and assets to produce the outputs. Productivity of different elements in the
system ultimately decides the profitability of any organization. Output and profitability of
different organizations in the Nation decides the progress of the Nation which is very significant
for its global status. For progress of the Nation what is most required is the highest productivity
of different organizations engaged in production or service industry. But the astonishing factor is
that there is not a single organization which does not face the problem regarding productivity
since the factors affecting productivity are of confronting nature and large in number. Low
productivity leads to reduced profitability of the organization, cumulative effect of which is the
retarded growth of the Nation. In the whole system or organization, there are several factors
which decides the productivity of workers. For any organization, leave alone its growth, even its
survival is dependent on the productivity of its workers. As such the most critical problem that
any industrial organization shall address is how to identify the reasons behind the low
productivity of its workers and what are the steps required to improve the same to improve the
profitability of the whole organization.

Employee or Worker Productivity: “Employee Productivity” or “Worker Productivity” is the

efficiency at which he or she or a group of workers produces the required outputs at the specified
quality acceptance level using the specified inputs made available to him for production. Most
predominant factor behind success or failure of any organization is the productivity of its
workforce and as such employee productivity is an important consideration for any enterprise.
“Worker Productivity” is a measure of several economic indicators, because it proposes a
continuous measure of economic growth and living standards within an economy.

Measure of Worker Productivity: Productivity can be computed in terms of the output of the
employee during a specific period. For example, number of units produced per hour or the time
required for completing the specified task with respect to the output expected or the time
estimated and projected. An extension of this evaluation is the Standard hours earned or
produced. The time estimated by the planners for every job is specified and intimated through
job cards of every allocation of job. On completion of the job the standard hour earned is
accounted against the respective employee and the total standard hours produced or earned by
the employee for every predetermined interval, say per week or per month, are computed.

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“Productivity” of the worker is then evaluated as the ratio of standard hours earned to the actual
duty hours that the worker was present to perform the assigned tasks.
Common issues in productivity in Bangladesh

Most of the apparel factory’s efficiency is level hopelessly below average 45%. In three ways
these barriers are hindering:

1. Lack of strategic decision

2. Non-productive time
3. Supply chain issues-which are the main constraints to repose sustain productivity and
efficiency.

Lack of Strategic Decision

Automation: Automated machines must be increased for loading and unloading materials from
vehicles, internal material handling, cutting, sewing and finishing otherwise difficult to reduce
man-machine ratio (MMR), timesaving and cost-minimizing. The automated machine increases
productivity by 7-10% less than non-automated machines.

Efficient planning: Planning makes optimum utilization of all available resources. It helps to
reduce the wastage of valuable resources and avoids duplication. Planning aims to give the
highest return at the lowest possible cost. Thus, increases the overall efficiency. Efficient
planning works to reduces business-related risks, facilitates proper coordination, aids in
organizing, gives the right direction, keeps good control.

Training and research: Only cheap labor will not be the competitive trump card in the future.
Along with cheap labor; efficiency and productivity need to be optimized. Mid-level
management training also compulsory to eradicate the communication gap and to ensure the flow
of directions from top management to lower level.

Lack of workers’ positive mentality-research shows that 10-15% of workers want to pass the
days with simple efficiency. These workers do not bother about efficiency. With proper
motivation and training and other convenient tools can be used to pick up their productivity
level.

Non-productive Time

Machine breakdown: From a non-productive time, report can be easily seen that how many
available minutes are losing. Spare machines, guides and folders should be available in case of
machine breakdown to replace instantly and running the production flow.

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Style changed time: During style change, keeping note of how much time each style is taking to
complete the layout is vital, cause if more time is taken than allowed feeding time, then this
excess minutes or time is considered as wastage and it is a mammoth productivity barrier.

Unskilled operator and lack of supervisory: How much capacity losing from each operator
who are not skilled. This miss out capacity considered as lose earning minutes. Production
Supervisors keep the main impact to pick the highest productivity. It is a foremost concern to
judge supervisors’ skills.

Efficiency Enhancement Method

Higher productivity brings higher profit margin in a business. And increment in productivity
level reduces garment manufacturing cost. Hence, factory can make more profit through
productivity improvement. Machine productivity as well as labor productivity increases when a
factory produces more pieces by the existing resources such as manpower, time and machinery.
In RMG sector productivity improvement is defined as the improvement of the production time
and reduction of the wastage. Sometimes specific problems such as machine break down,
machine set up time, imbalanced line, continuous feeding to the line, quality problems,
performance level and absenteeism of workers may hamper the productivity in RMG industries.
So the below point might help to increase production efficiency.

 Conduction of motion study and correction of faulty motions,

 Time reduction by assemble line balancing
 Conduction of research and development for the garment,
 Use of best possible line layout,
 Use of scientific workstation layout.

Time and Motion Study

Time study concept was originally proposed by Fredrick Taylor (1880) and was modified to
include a performance rating adjustment. Time study helps a manufacturing company to
understand its production, investigate the level of individual skill, planning and production
control system etc.

Motion study involves the analysis of the basic hand, arm and body movements of workers as
they perform work. The purpose of motion study is to analyze the motions of the operator’s
hand, leg, shoulder and eyes in a single motion of work or in a single operation cycle, so that
unless motions can be eliminated. This is an interpretation of “motion study” in a narrow sense
of the meaning. In a broad sense, “motion study” includes the analysis of materials, equipment,
attachments and working conditions. Frank Gilbreth [1915] first analyzed and categorized 17
basic motion elements. Basic motions mainly include reach, grasp, move and release. Usually,

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workers are found to pass their time in the industry through working, waiting and moving here
and there. So, it is vital to analyze the movement of workers and eliminate the unwanted
motions, which lead increased worker’s efficiency and improved productivity in a firm.

Assembly Line Balancing

Line Balancing is a very efficient technique which means balancing the production line or any
assembly line. The main objective of line balancing is to distribute the task evenly over the
workstation so that idle time of man or machine can be minimized. Line Balancing is leveling
the workload across all processes in a cell or value stream to remove bottlenecks and excess
capacity.
Line balancing is an effective tool to improve the throughput of assembly line while reducing
non value-added activities, cycle time. Line balancing is the problem of assigning operation to
workstation along an assembly line, in such a way that assignment is optimal in some sense.

A sequence of operations is involved in making a garment. In bulk garment production, generally

a team works in an assembly line (Progressive Bundle system) and each operator does one
operation and passes it to other operator to do the next operation. In this way garment finally
reaches to the end of the line as a completed garment. In the assembly line after some time of the
line setting, it is found that at some places in the line, work is started to pile up and few operators
sit idle due to unavailability of work. When this situation happens in the line it is called an
imbalanced line. Normally it happens due to two main reasons which are variation in work
content (time needed to do an operation) in different operations and operator’s performance
level. To meet the production target, maintaining level workflow in the line is very essential. So,
it is very important to know the basics of quick line balancing. Line balancing can be classified
as follows:

 Initial balancing: The sequence of operations of a garment is analyzed and the Standard
Minute Values (SMV) is allocated. The SMVs are determined by most manufacturers using
standard databases available whereas some companies use their own databases based on
past experience and using time studies.

 Rebalancing: This is performed after few hours while the whole line is completely laid
down and may be performed several times in order to make the material flow with the least
bottle necks in the line. Capacity studies conducted on the line also help the line balancing
process.

 Reactive balancing: Despite the production line being balanced, spontaneous variations
are inevitable due to problems on the line. Reactive balancing is often done due to machine
break downs, operator absenteeism, quality defects and shortages. The operators or the
machines are moved to the bottleneck until the severity of the problem is concealed. These
types of line balancing process are very common in the RMG industry.

 Late hour balancing: In order to fulfill the daily demanded output from a production line
the upstream operators are moved to the line end by the supervisors of some garment
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 manufacturing companies. This happens unofficially but not uncommon and makes the line
unbalanced in the next day especially in early hours. The downstream operators are waiting
to receive garment pieces resulting extremely low output in early hours.

Recommendation

Now-a-days, RMG manufacturers of Bangladesh are seeking ways to maximize their resources
utilization, increase productivity and minimize production cost. In this respective point of view,
this study becomes more important to provide the technical overview about the productivity
improvement and reduction of waiting time and production cost. Only skilled workers should be
entitled for the production processes and that’s why proper training and supervision must
necessary to achieve the optimum improvements in productivity and efficiency.
Time study and line balancing techniques are only used in the specific section and the
application of those techniques in the other sections will further increase more productivity in the
RMG industries. Besides time studies, line balancing and other effective lean tools like 5S, JIT
etc. may also be employed to the RMG industries for the reduction of excessive wastes, and
more production time and to increase the productivity which will help Readymade garments
(RMG) industries to compete and survive with less manufacturing cost and higher product
quality.

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 References’

i. Peter F Drucker, “The Practice of Management”, Mc Graw Hill, New York.

ii. Jannat, S., Hoque, M. M., Sultana, N. and Chowdhury, I. J., “Time Study of a Furniture
Industry: A Case Study at Navana Furniture Industry”, Proceedings of the International
Conference on Mechanical Engineering, 26-28 December, Bangladesh, pp.1-5, 20.

iii. Kumar, N. and Mahto, D., “Assembly Line Balancing: A Review of Developments and
Trends in Approach to Industrial Application”, Global Journal of Researches in Engineering
Industrial Engineering, Vol.13(2), pp.29-50, 201

iv. https://www.textiletoday.com.bd/possible-way-outs-recent-challenges-bangladesh-textile-
apparel-industry/

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