There are many expenses that add to the production cost, but are not in the control of an apparel manufacturer or any other entrepreneur, irrespective of trade and industry, like fixing charges of electricity department, CA fees, transportation, etc. While other industries may be able to absorb these costs, but for an apparel exporter who competes globally, such kind of costs are a big burden with increasing by the day.
So how do you tackle this challenge? What are your suggestions or solutions to mitigate the burden on overall cost?
Apparel Resources discussed the issue with the industry to know how they are coping with this on a regular basis. We discussed what further they were doing to improve this, along with efforts taken to reduce petty expenses. We also asked about the support they wanted from the the government. Let’s hear their opinion.
Piush Dhadda, Proprietor, Kalindi Fashions & Crafts, Jaipur
We have included all such expenses in the overhead cost. But still there are few miscellaneous expenses which are unavoidable and we can surely control these with small steps. Like say for electricity, we have switched over to LEDs and have also installed power panels to control the unnecessary expenses, power cuts as well as fluctuations. Similarly, we are also trying to convert our other products to make them more eco-friendly. Following the same, we have also controlled our petty expenses such as courier service cost. We have even informed our clients that we can send the samples only on Saturdays. In a way, we are sending bulk couriers once in a week. There are a lot of other small things that we are considering, monitoring and controlling at the same time.
Swarup Mukherjee, Proprietor, Nivedita Swarup, New Delhi
I believe in the mantra, ‘When you save money, then you make money’. We are ready to pay for all the support that the Government will give to us, but we initially need an infrastructure and this is something the Government will have to initiate. We don’t have a proper shed or a rooftop to install the solar power panel and roof lights. The Centre should corporatise things and take a uniform step, as we are unable to take such major steps all on our own. These are small issues and should be raised properly. But unfortunately, we are living in an age where our Government is talking about ‘living in space, moon, or other planets’, but is hardly concerned about the little issues at the ground level that stop us from growing further. The environmental condition is degrading here day by day. Look at the pollution level, road conditions and other basic things. It is getting tough for our kids to stay here. Who doesn’t want to stay or work in an environment-friendly place, but you see we are small businessmen. Unlike big players, we can’t afford to set up a separate park for our business. But if the Government sets up an industrial village for businessmen like us, then it will be of great help. The big guys raise their voices and their demands are fulfilled, but there is no one who can voice our demands, and accidentally if we dare to do so, we face repercussions, and ultimately, we suffer.
Exploring New Technologies
Mohammad Shariq, Director, M. A. Business Enterprises, Lucknow
Our organisation has been taking measures from time to time to reduce these margins and save costs. Apart from small initiatives, we are exploring new technologies that may help our business in improving efficiency, increasing productivity and reducing costs. For example, many companies are now using cloud computing systems as opposed to in-house hardware that can be relatively expensive to buy and maintain. On the sustainable front, we have installed rainwater harvesting treatment plant in our campus, where we recycle water and rainwater. This helps us in maintaining the water level. Similarly, we are planning to put in the solar panels so that we can cut some expenses and save electricity. But then it won’t fully serve our purpose and we can’t be completely dependent on that. Our machinery will not take the load if we totally depend on these panels. We even try to consume less electricity by switching off fans, ACs and lights, when not needed. These are the costs that we only will have to bear and manage because the buyers are not ready to share the extra cost burden. Like, for the shipping charges or courier charges, they want us to accept that cost pressure. So considering that these are our additional costs and we have to take the brunt, we have reduced our profit margins. We can’t blame the buyers completely for this as the market is so competitive and price-sensitive that if we will not consider their demands, then there are hundreds of others in the line who are ready to bear these expenses.
The Right Click
Zaid Nalkani, Proprietor, Molmo Exports, Mumbai
We have taken a lot of small and big steps in our company like using less paper, reusing paper. Apart from this, we have been investing a good amount of money in technology. Upgraded software and latest technology are helping us in a big way. Also we have been maintaining tight control over both fixed and variable expenses, and this is not only enhancing our business but controlling cost to some extent. We in fact actively do a lot of planning in advance and discuss things among our staff members. Seeing our past variable expenses, we plan our future accordingly. Still there are many more options that we can take up to save other petty expenses. But then you can’t because every new thing requires investment, and we are not that big to put in all our cash into this only.
Ramesh Khatri, Proprietor, Khatritex, Jaipur
Being aware beforehand, our company is into the process of tracking expenses diligently. We have understood our past costs and are accordingly planning for the future. For us, tracking the costs in not an afterthought, rather it is an integral part of our ongoing operations. Like, we have already converted our lightings to LEDs and are now planning to install solar panels for better support and cost control. We have started using minimum papers now. We try to send quotations or sample copies through emails rather than sending them as separate hard copies. In a way, this saves time as well as cost. But then these cost saving initiatives require a huge gathering of data in an effective way.