Over the year, various reason have been advanced for the lack of competitiveness of apparel manufacturers in India, like

a. extremely fragmented structure of the textile and apparel industries
b. discriminatory .scal and custom policies
c. one of the longest and most complex supply chain in the world
d. low level of investment leading to low level of technology
e. unwillingness of financial institution to lend money to what they call “sunset” industry, and
f. unfavorable perception on lead times, responsiveness, communication, trust, meeting contractual obligation, ethical standard etc.

While many of these factors may be beyond control for an organization, the most important factor in competitiveness of an organization is directly management controlled. This factor is managerial practice. Productivity gains are indeed achieved through better managerial practice on existing technology. It has also has been shown that poor organization of function and task is the most important contributing factor to poor productivity in Indian apparel sector.

Explaining elements of managerial practice typical of high performance organizations, this article shows that how senior management of apparel manufacturers in India can adopt some of them to their advantage and raise performance level of their companies.

A high performance organization is characterized by flexibility, innovation,  knowledge & skill sharing, good  communication and information flow, alignment with organizational objectives,  customer focus, and rapid response to  changing needs and requirements of the  market place, and ultimately, continuously  improving competitiveness.

MANAGEMENT PRACTICE LEADING TO BECOMING A HIGH PERFORMANCE ORGANISATION

Development of managerial practice leading to high performance organization started in the United States in 1988 and continues to evolve under what is known today as the “Baldrige Criteria for Performance Excellence.” This development was in response to the dire needs to make American business competitive.

In the early and the mid 1980s many  industry and government leaders saw  that renewed emphasis on quality was no  longer an option for American companies  but a necessity for doing business in an  ever expanding, and more demanding,  competitive world market. A Congressional research concluded: It is important we recognize - a significant portion of our trade deficit is due to the ability of foreign  (i.e. Japan) competitors to deliver high  quality products that are either novel, less  costly to produce, promise better service,  or some combination of the above.

But many American businesses either did not believe quality mattered for them or did not know where to begin. Therefore, the US congress established the award program in 1987 to recognize organization for their achievements in quality & performance and to raise awareness about their importance a competitive edge.

The Baldrige Award was envisioned as a standard of excellence that would help the organizations achieve world-class performance & quality. The Baldrige performance excellence criteria are a framework that any organization can use to improve overall performance. They are a set of expectations or requirements that define the critical factors that drive organizational success. The criteria are focused on what “best-in class” companies do.

While other approaches focus on a single aspect such as leadership, strategic planning, or process management, the Baldrige criteria describes an integrated management’s framework that addresses all the factors that define the organization, its operations, and its results. The criteria are regularly improved to enhance coverage of strategy driven performance, addresses that need of all stakeholders and accommodate important organizational needs & practices. The Baldrige criteria reflect leading-edge, validated management practice essential to achieving optimum performance.

CRITERIA VALIDATION

Baldrige criteria for performance excellence and its comparable performance excellence criteria have been proven and tried over the years as evidenced by the following:

All over the world, about 50 plus countries have some sort of business performance criteria that are patterned after Baldrige criteria. These countries represents significant amount of the world’s production of goods & services and, collectively, account for approximately 74% of the world’s gross national product. For example, in Europe, there is a European quality award, called European Excellence Model, administered by the European foundation for Quality Management (EFQM). In India, there are awards such as CII-EXIM Bank Award, Rajiv Gandhi National Quality Award, The Golden Peacock National Quality Award, and IMC Ramakrishna Bajaj National Quality Award. In private sector in India, there are performance excellence criteria such as Tata Excellence Model and RGP Excellence Model, both of which are based on Baldrige models

In the US, There are 27 State level performance excellence models patterned after Baldrige criteria for performance excellence.

The S&P 500 (Standard & Poor’s 500) is one of the most commonly used benchmark for the overall US stock, market. The Dow Jones Industrial Average (DJIA) was at one time the most renowned index for US stocks, but companies, most people agree that the S&P 500 is a better representation of the US market. IN fact many consider it to be the definition of the market.

From1994 to 2004 stock performance of Baldrige winners were monitored against standard & poor’s 500 companies.  Baldrige winners out performed standard & Poor for the first 8 years by 6.5 to 1. Baldrige winner’s underperformance against Standard and Poor’s in 2003 and 2004 is attributed to the relatively poor performance of technology companies in recent year.

The award winners experienced a 44%  higher stock price return, a 48% higher  growth in operating income and 37%  higher growth in sales compared to those  companies who did not win awards.

The criteria are used by thousands of organization of all kind for self assessment and training and as a tool to develop performance and business processes.  Several million copies have been distributed since the first edition in 1988, and heavy reproduction and electronic access multiply that number many times.

PERFORMANCE CRITERIA

Seven key areas are as follows:
 • Leadership
 • Strategic Planning
 • Customer and Market Focus
 • Measurement, Analysis & Knowledge Management
 • Human Resources Focus
 • Process Management
 • Business Result

LEADERSHIP

Senior leaders have a central role in setting values and directions, communicating, creating and balancing values for stakeholders, and creating an organizational bias for action. Success requires a strong orientation to the future and a commitment to improvement, innovation and organizational sustainability. Increasingly this requires creating an environment for empowerment, agility, and learning. Senior leader create a culture in which every employee at very level of the organization would constantly seek to improve processes every single day.

In the high performing organizations, senior leader personally participate in the development of the future leaders, in succession planning, and in recognizing opportunities and events that celebrate the workforce. Senior leaders are those individuals who directly report to the CEO (Chief Executive officer), COO (Chief Operating Officer), or MD (Managing Director).

 • How do your senior leaders set organizational vision and values?
 • How do senior leaders personally reflect a commitment to the organization’s value?
 • How do senior leaders create an environment for organizational performance improvement, the accomplishment of your mission and strategic objectives, innovation, and organizational agility?
 • How do senior leaders communicate with and engage the entire workforce?
 • How do senior leaders communicate key decisions?
 • How do senior leaders take an active role in reward and recognition to reinforce high performance and customer focus?

STRATEGIC PLANNING

Long term sustainability and competitive environment require strategic planning. Strategic plans should be customer and market focused. While many organizations are increasingly adapt at strategic planning, plan execution is still a significant challenge, especially given markets demand to be prepared for unexpected change. Adequate resources should be insured to accomplish the
plans.

Consider for example:
 • What are your key strategic objectives and your timetable for accomplishing them?
 • What are your, most important goals for these strategic objectives?
 • How do your strategic objectives address your strategic challenges and Strategic advantages?
 • How do you develop and deploy action plans throughout the organization to achieve your key strategic objectives?
 • How do your senior leaders communicate strategic objectives to the employees?
 • How do you ensure that adequate financial and other resources are available to support the accomplishment of your action plans?
 • What are your performance projections for short and long term?  How do they compare with your competitors?

CUSTOMER AND MARKET FOCUS

High  performing  organizations  have  keen  awareness  that  performance  and  quality  are  judged  by  an  organizations  customers.  To  them,  customer  focus  means  much  more  than  reducing  defects  and  errors,  merely  meetings  specifications,  or  reducing  complaints.  In  a  rapidly  changing  technological,  competitive  and  social  environment,  many  factors  may  affect  customer  preferences  and  loyalty.  This  makes  it  necessary  to  continually  listen  and  learn  from  your  customer  and  prospective  customers.

Without such listening and learning it is not possible to understand existing and emerging customer requirements, needs and expectations. Without such knowledge it is not possible to offer relevant products and services.

The high performing organizations have processes for building customer relationship and determining customer satisfaction & dissatisfaction with the aim of acquiring new customers, and developing new market opportunities.

Consider for example:

 • How do you identify customers, customer groups and market segments?
 • How do you determine which customers, customer groups and market segments to purchase for current and future products and services?
 • How do you determine key customer requirements, needs, and changing expectations and their relative importance to customer purchasing or relationship decisions?
 • How do you collect and use relevant information and feedback from current and former customers?
 • How do you manage customer complaints? How do you ensure that complaints are resolved effectively and promptly?
 • How do you minimize customer dissatisfaction, and as appropriate loss of repeat business and referrals?
 • How are complaints aggregated and analyzed for use in improvement throughout your organization and by your partners?
 • How do you determine customer satisfaction, dissatisfaction, and loyalty?
 • How do you follow up with customers on the quality of the products, services and transactions to receive prompt and actionable feedback?
 • How do you obtain and use information on your customer’s satisfaction relative to their satisfaction with your competitors?

MEASUREMENT, ANALYSIS & KNOWLEDGE MANAGEMENT

Decisions in high performing organizations are based on effective analysis of information, not based on what management “thinks” is going on.  Information analysis and knowledge management may be primary source of competitive advantage and productivity growth. Management, analysis and review of information guide an organizations process management toward the achievement of key organizational result and strategic objectives and to anticipate and respond to rapid or unexpected organizational or external changes.  Measurement and analysis also help understand cause effect connections among processes and between processes and results or outcomes.

In high performing organization focus is on managing knowledge that people need to do their work; improve processes, products, and services; keep current with changing business needs and directions; and develop innovative solutions and add value for the customer and organization.

This involves determining what knowledge is critical for operations and then implement systematic processes for sharing this information.

Customer contact employees in high performing organization have critical knowledge and skill in the following areas: your products, services, and customers; how to listen to customers; how to recover from problems or failures; and how to effectively manage or meet customer expectation or needs

Consider for example:
 • How do you select, collect, align and integrate data and information for tracking daily operations and for tracking overall organizational performance?
 • How do you translate organizational performance review findings into priorities for continuous and breakthrough improvement and into opportunities for innovations?
 • How do you make needed data and information available and accessible to your employees, suppliers, and customers as appropriate?
 • How do you assure accuracy, integrity and reliability, timeliness, security and confidentiality of your organizational data, information, and knowledge?

HUMAN RESOURCES FOCUS

Many Studies have shown that high level of work force engagement have significant, Positive impact on organizational performance. Engagement is characterized by performing meaningful work; having organizational direction, performance accountability, and an effective work environment. When people find that work is aligned with their personal values they derive meaning from work and they become highly engaged and productive.  High performance organization understands and addresses factor inhabiting motivation.  Understanding of these factor could be developed through workforce surveys or exit interviews with departing employees Employee compensation and recognition should be matched to work. To be effective, compensation and recognition may be tied to either individual and/or team performance. Although satisfaction with pay and advancement are important, these two factors generally are not sufficient to ensure workforce engagement. Some  other factors to consider are effective  problem and grievance resolution; development and career opportunities; work environment and management  support; work place safety and security;  work load; effective communication,  cooperation, and teamwork; job security  appreciation of differing needs of diverse  employee groups; and organizational  support for serving customers.

In addition to measuring employee satisfaction through formal and informal surveys. High performing organizations also monitor absenteeism, turnover, grievances, strikes, etc. to gauge the level of the employee satisfaction.

High performance organizations, regardless of size, use many opportunities to support their employees. For example,  personal and career counseling, career  development and employability services,  recreational or cultural activities, formal  and informal recognition, no- work  related education, day care, special leave  for family responsibilities and community  service, flexible work hours and benefits  package, outplacement services, and  retiree benefits, and healthcare.

All organizations regardless of size are required to meet minimum regulatory standards for workplace safety; however, high performing organizations have processes in place to ensure that they not only meet these minimum standards but go beyond a compliance orientation. This includes designing proactive processes, with input from people directly involved in the work, to ensure safe work environment.

Consider for example:
 • How do you determine the key factors that affect employee satisfaction and engagement?
 • How is this information used in strategic planning?
 • How does your employee performance management system reinforce customer and business focus and achievement of your action plans?
 • How do you use indicator such as employee retention, absenteeism, grievance, safety, and productivity to assess an improve employee engagement?
 • How do you recruit, hire, place and retain employee?
 • How do you prepare your employees for changing capability and capacity?
 • How do you ensure and improve workplace health, safety, and security?

PROCESS MANAGEMENT

Results are achieved more effectively when activities and related resources are managed as a process. Clearly defined processes for designing, producing and delivering products and services are a hallmark of high performance work place.  Process approach means, for each process identifying and communicating with the employees: who is the process owner, i.e., who has the authority to change a process, allocate resource so that the process delivers desired results, authority to shut down the process if necessary, etc.

Consider for example:
 • What are your organization’s key processes?
 • How do these key work processes relate to your organizations core competencies?
 • How do these processes contribute to delivering customer value, profitability, organization success and sustainability?
 • How do you minimize overall costs associated with inspections, tests, and process or performance audits?
 • How do you prevent defects, service errors, and rework and minimize warranty costs or customer’s productivity or sales losses?

BUSINESS RESULTS

 At the end of the day, what matters are results? Consider for example:

 • What are your current levels & trends in key measure in the following areas:  product and service performance; customer’s satisfaction; customer’s retention; .financial performance; employee satisfaction, etc?
 • How do theses results compare with your competitors, industry trends?
 • How do you use these results to improve your organizational performance?

FACTORS CONTRIBUTING TO POOR PERFORMANCE

While so far I have addressed customer factor that make an organization a high performing organization, here are some factor contributing to poor organizational performance:

 • Systems to understand customer requirements and preferences are missing
 • Poor employee skills, minimal initiative or self direction.
 • Data about customer satisfaction, key process performance, and overall organizational performance do not exist or are incomplete.
 • Leaders do not clearly set direction, performance expectation, vision, or values.
 • Plans do not contain measurable outcome oriented objectives and time line for accomplishing each objective.
 • Leaders do not make it clear that customers are the key to success.
 • Top leaders do not encourage employee to develop and use their full potential
 • Customers complaints and comments are not encouraged. If a complaint is received, it is not resolved promptly.  The root cause of complaint is not identi.ed.
 • Poor two way communications exists between leaders and employees.

CONCLUSION

A model for performance improvement  reflecting leading-edge, validated  management practices essential to  achieving optimum performance is  available to all those wishing to accept  the challenge. This model is Baldrige or comparable performance criteria for Excellence.

RECOMMENDATION FOR APPAREL MANUFACTURERS IN INDIA

 If India is to become a player of any significance in the world apparel trade, the apparel manufacturers must focus on overall business performance improvement and not just quality improvement. Quality improvement will get you in the game but will not keep you in the game. Obtain any one of the award criteria and perform a rigorous self analysis or a gap analysis of your business in accordance with the criteria. This will help you find areas for improvement. Priorities those areas for improvement and begin to address them seriously. If performing self analysis or gap analysis on all 7 categories is too much of a task, choose one or two categories, such as customer focus and human resources focus or leadership and work through these categories, and you will be surprised at the improvement.  Thus having gained some condense and enthusiasm, next, take two more categories and work through them, and eventually address all seven categories.

As smart and intelligent as we are, there is no reason why we should not be a global power house when it comes to apparel industry.

Alignment- Consistency of plans, processes, information, resources decisions, actions, results, and analyses to support key organization wide goals.  Effective alignments require a common understanding of purposes and goals.
Analysis - An examination of facts and data to provide a basis for effective decisions.  Analysis often involves the determination of cause and effect relationship.
Breakthrough Improvement- Improvement that is at least 10 times.
Customer Focus- Meeting customer’s requirements, needs and expectations, delighting customers and building loyalty.
Deployment- The extent to which an approach is applied in addressing the requirements.
Effective- How well a process or a measure address the intended purpose.
Empowerment- Giving people the authority and responsibility to make decisions and take actions. Empowerment results in decisions being made closest to the “front line,” where work related knowledge and understanding reside.  Empowerment is aimed at enabling people to satisfy customer on first contact, to improve processes and increase productivity, and to improve the organization’s performance.
Mission- Overall functions of an organization. The mission answers the question, what is this organisation attempting to accomplish?
Process- Linked activities with the purpose of producing a product or service for a customer (user) within or outside the organization. Processes rarely operate in isolation and must be considered in relation to other processes that impact them.
Trends- Numerical information that shows the direction and rate of change for an organization’s results. Trends provide a time sequences of organizational performance.
Values- the guiding principles and behaviors that embody how your organization and its people are expected to operate. Values reflect and reinforce the desired culture of an organization.  Value support and guide decision making of every workforce member, helping the organization accomplish its mission and attain its vision in an appropriate manner. Example of values might include demonstrating integrity and fairness in all interactions, exceeding customer expectations, protecting environment, valuing individuals and diversity, and striving for performance excellences everyday.
Vision- The desired future state of your organization. The vision describes where the organization is headed. What it intends to be, or how it wishes to be perceived in the future.
Workforce Engagement- Extent of workforce commitment, both emotional and intellectual, to accomplishing the work, mission, and vision of the organization. In general, members of the workforce feel engaged when they find personal meaning and motivation in their work and when they receive positive interpersonal and work support. Key factor contributing to engagement include training and career development, effective recognition and reward systems, equal opportunity and fair treatment, and family friendliness.

 This article is based on a presentation at OGTC’s seminar in New Delhi by Mr.  Pradip V Mehta, PE Fellow, American Society for Quality, USA