TEXTILE
INDUSTRY
BRIEF
The Indian Textile Industry is one of the largest and oldest industries in India. It has come a long way after the first cotton textile mill was established in Bombay in 1854 and at Ahmedabad in 1861. Encouraged by opening up of the India economy, favorable government policies, setting up of special economic zones and apparel parks, industrial competitiveness and India's booming domestic demands, today most of the well known international brands like Donna Karan New York (DKNY), Marks & Spencer, Levi Strauss, JC penny, Nike, Reebok, Target, Tesco, Tommy Hilfiger, Metro Group, Wal-Mart, Gap, Arrow, Gant, Izod, Lacoste, Carrefour, Decathlon, H&M and others have changed their strategy and started procuring most of their fabrics from India.
'Made in India’ brand image
There is an ever increasing trend of ‘Made in India’ labels on international brands based on joint ventures and franchising with Indian partners as more and more buyers around the world turn to India as an alternative to China.
The Indian advantage
India has great competitiveness and a formidable presence in almost all processes of the value chain – from a vast raw material supply to high quality finished products. India enjoys the benefit of having plentiful resources of raw materials. It is one of the largest producers of cotton yarn around the globe, and also there are good resources of fibers like silk, wool, polyester, silk, viscose etc. There is a wide range of cotton fibers available and there is a rapidly developing synthetic fiber industry.
Coupled with one of the lowest labour costs in the world, Indian companies offer experience, entrepreneurship and design skills which Chinese firms find hard to match. The industry has proved to be highly versatile: smaller firms offer the flexibility needed for smaller orders while giant firms have the capacity to service the world’s biggest buyers. Of late, favorable government policies have been pulling Foreign Direct Investment (FDI). Indian firms have been gearing up to meet the fast growing foreign demand for their products. New capacities are being built, and competitiveness is improving as new technology is installed at a dramatic pace.
Some of the reputed names in the Indian Textile industry are: Raymonds, Arvind Mills, Reliance Textiles, Vardhaman Spinning, Welspun India, Morarjee Mills, Century Textiles, Ginni Filaments Ltd, Mafatlal Textiles, S. Kumar Synfabs, Bombay Dyeing Ltd, BSL Ltd, Banswara Syntex, Grasim Industries, Oswal Knit India, Neva Garments, Fabindia, Laksmi Mills, National Rayon Corp, Mysore Silk Factory and many more.
CURRENT VERTICAL ANALYSIS
Current scenario:
The Indian textile industry contributes about 14% to industrial production, 4% to the country's gross domestic product (GDP) and 17% to the country’s export earnings, according to the Annual Report 2009-10 of the Ministry of Textiles. It provides direct employment to over 35 million people and is the second largest provider of employment after agriculture.
India has the potential to increase its textile and apparel share in the world trade from the current level of 4.5% to 8% and reach US$ 80 billion by 2020, as per a Ministry of Textiles press release dated Nov 2, 2010. According to India’s Central Statistics Office, the Indian retail market for textile products including apparel has registered a growth of 8.5% during the financial year Apr-Mar 2009-10.
The total textile exports during Apr-Sep 2010 were valued at US$ 11275.58 million (provisional) which is an increase of 11.47% over the value registered in the corresponding period of the previous year, as per the latest data released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), Kolkata.
Cotton textiles have registered a growth of 10.8% during Apr-Jan 2010-11, while textile products including wearing apparel have registered a growth of 4.3%, as per the Index of Industrial Production (IIP) data released by the Central Statistical Organization (CSO).
Government has taken several initiatives to boost growth in this sector including allowing 100% foreign direct investment (FDI) under the automatic route. The textiles industry has attracted FDI worth US$ 934.04 million between Apr 2000 and Jan 2011, according to data released by the Department of Industrial Policy and Promotion (DIPP).
The Road Ahead:
Joint ventures with internationally acclaimed textile majors have resulted in major investments and capacity expansions and several more are in the pipeline.
According to the Textile Association of India (TAI), the denim manufacturing capacity, which stands at 600-650 million metres per annum, is set to witness an addition of 100 million metres out of which 70% would be for the domestic market. The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has set a target to more than double the export of synthetic textile to US$ 6.2 billion by capturing 4% market share by 2011-12, as per Mr G K Gupta, Chairman, SRTEPC.
Role of ERP in the Textile Industry:
In every sector of the Indian textile business, the market is forcing companies to stay competitive by taking proactive steps to improve business operations. In the pursuit of profitable growth in a global marketplace, textile mills are looking for new strategies to improve quality, cut costs, respond swiftly to changes in customer demands and vagaries in raw material supply position, develop new distribution channels, forge new value-added relationships with suppliers and customers and expand globally.
Enterprise resource planning (ERP) software provides a companywide information system interlinking all functional areas such as sales and distribution, manufacturing, purchasing, inventory, finance & accounts, human resource development etc and works on a unified Customer database and a single Supplier database for the entire company. It is designed to work based on the best business practices prevalent in the industry the world over.
Based on the sales demand on hand, ERP plans purchases of input materials and scheduling of production orders. Data capture and traceability of batch / lot quality right from raw material up to finished goods is taken care of by the software. Invoicing of finished goods is done thru the software taking into account the applicable taxation as well. Based on the real time stock status of finished goods and estimated date of dispatch of goods planned for manufacturing, the sales team can take informed decisions on prospective sales orders or formulation of sales strategies sitting in their respective sales office / regional office / corporate office. Apart from routine financial transactions such as receipts from customers, payments to suppliers and cash flow management, financial books of all companies within the same group can also be maintained from one location.
In addition to providing a user-friendly environment, the software can be tailored to incorporate specific needs of companies both large and small, progressively expanded, in the ‘horizontal’ sense to embrace additional organizational functions, as well as ‘vertically’ to integrate other stages of the production process.
On account of its modular structure, the ERP software can cater to textile industries of all kinds, from vertically integrated companies to those specializing in single stage of the production process. It can fulfill the business needs of yarn manufacturing units, weaving units, garment manufacturing units and so on.
On the whole, ERP helps to drive the entire organization on a single platform, provides an improved supply-demand linkage with remote locations, enables informed management decisions based on real time access to accurate data, and enables cutting down of material and resource wastages thru effective utilization as well as thru reduction of communication gaps and paperwork.
CHOICE OF ORACLE ERP PRODUCTS
Filix recommends for its clients in the Textile industry, the package of Oracle E-Business Suite (Release 12) modules as per their relevant industry segment:
-
Yarn manufacturing (Cotton / Synthetic) / Fabric manufacturing (Weaving / Knitting)
Essential: Oracle Purchasing, Oracle Inventory, Oracle Process Manufacturing, Oracle Order Management & Shipping Execution, Oracle Enterprise Asset Management and Oracle OPM Financials.Essential: Oracle Purchasing, Oracle Inventory, Oracle Process Manufacturing, Oracle Order Management & Shipping Execution, Oracle Enterprise Asset Management and Oracle OPM Financials.
Optional: Oracle Sourcing, Oracle i-Supplier portal, Oracle HRMS
-
Garment manufacturing
Essential: Oracle Purchasing, Oracle Inventory, Oracle Discrete Manufacturing, Oracle Order Management & Shipping Execution and Oracle Financials.
Optional: Oracle Sourcing, Oracle i-Supplier portal, Oracle HRMS.
FILIX
EXPERIENCE
Filix has rich experience of end-to-end implementation and post -implementation support in the Indian Textile industry in north India. In addition to mapping of the client business processes with the standard Oracle product functionality, Filix has catered to specific customer requirements with its custom-built products. These bolt-on applications integrate seamlessly with the Oracle E-Business Suite application.
Implementation approach:
Filix services are available for the big-bang approach as well as for the staged approach for ERP implementation, based on client’s business needs. However, Filix recommends the 'staged approach' for its prospective clients in the Textile sector in India. This approach helps to get the basic business processes (Purchasing, Inventory Management, Manufacturing and Finance) mapped and working in ERP before moving on to utilize the larger benefits such as MIS.