Business & Productivity

Why does Business & Productivity matter for garment factories in Asia?

As the world's leading hub for clothing manufacturing, Asia's garment industry faces fierce competition and ever-evolving consumer demands. To thrive in this context, businesses must optimize their operations, streamline production processes, and adopt innovative technologies. The importance of efficiency and productivity cannot be overstated, as they enable companies to reduce costs, meet strict deadlines, and maintain quality, whilst simultaneously boosting social and environmental sustainability.

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What challenges are inhibiting Productivity of Asia’s garment and textiles industry?

Productivity is the measure of how efficiently resources (including labor and capital) are utilized to produce goods and services. In Asia’s garment sector, several challenging factors are at play:

Low Labour Productivity: While labour productivity in Asia’s garment sector has risen in recent decades, it remains low relative to other manufacturing sectors. Few garment producing countries have successfully moved up the value-chain in apparel production, with most manufacturers remaining engaged in low-skilled ‘cut-make-trim’ operations. Factors such as inadequate training, outdated work processes, and poor working conditions can hinder workers' efficiency. 

(Lack of) an Enabling Business Environment^[1]: This refers to the conditions and factors that support and facilitate the growth and operation of businesses. In the context of the Asian garment sector, this includes regulatory ease, access to finance, infrastructure, workforce skills, and political stability. When these conditions are favorable, they can significantly impact the productivity of the garment sector in Asia by reducing operational costs, attracting investment, fostering innovation, increasing competitiveness, improving workforce development, and mitigating issues related to corruption and bureaucracy.

Supply Chain Complexity: The industry's complex supply chain involves multiple stages, from raw materials to finished products. Managing this complexity can result in delays, increased costs, inefficiencies and risks. Events like the COVID-19 pandemic highlighted these vulnerabilities and how with more links in the chain, the more things that can potentially go wrong.

Compliance with Regulatory Standards: Ensuring compliance with increasing environmental and labour standards and regulations can be challenging, especially in countries with weak enforcement mechanisms. The burden to meet growing demands falls on the local enterprises and management who are under immense pressure from buyers to produce. Yet, failure to meet these standards can result in commercial losses, legal issues and reputational damage. 

Global Competition: The industry in Asia faces intense global competition, particularly from current and emerging low-cost manufacturing centres nearer to final consumer markets (which remain Europe and North America, predominantly). This competition creates pressures for manufacturers to seek ways to cut costs, potentially compromising labour standards and product quality. 

Technological and Skills Gaps: While digitalization offers unparalleled opportunities for industry innovation and upgrading, many businesses in the industry still struggle with technological adoption due to -among others- limitations in infrastructure, capacity and access to capital. The industry needs workers with diverse skills, including digital literacy, but there may be a skills gap in the workforce, making it challenging to adapt to technological advancements.

Addressing these challenges requires a multi-faceted approach, including investment in worker training and welfare, supply chain optimization, sustainability initiatives, and responsible sourcing practices. Additionally, adopting digital technologies can help streamline processes and improve overall productivity in the garment and textiles industry in Asia.

[1] This refers to the conditions and factors that support and facilitate the growth and operation of businesses. In the context of the Asian garment sector, this includes regulatory ease, access to finance, infrastructure, workforce skills, and political stability. When these conditions are favorable, they can significantly impact the productivity of the garment sector in Asia by reducing operational costs, attracting investment, fostering innovation, increasing competitiveness, improving workforce development, and mitigating issues related to corruption and bureaucracy.

What steps can be taken to improve the industry's Productivity and competitiveness in a sustainable way?

Improving the productivity and competitiveness of the garment and textiles industry in a sustainable way requires a multifaceted approach that addresses various aspects of the supply chain. Here are five key steps that can be taken:

Upgrade Manufacturing Practices:

To enhance productivity and sustainability, the industry should adopt sustainable manufacturing processes such as lean production techniques which minimize waste and improve resource efficiency, reducing the industry's environmental footprint. Eco-friendly dyeing and finishing methods that reduce water and chemical use should be embraced. Additionally, a just transition to a circular supply chain, which includes recycling and upcycling materials, can extend product lifecycles and reduce waste generation. These sustainable practices not only benefit the environment but also promote cost-efficiency in the long run. 

Digitalization and Automation:

Investment in technologies such as the Internet of Things (IoT), data analytics, and automation can lead to more efficient operations. These technologies reduce downtime, enhance quality control, and improve resource utilization. Implementing smart supply chain management systems offers better visibility and coordination throughout the value chain, facilitating real-time decision-making. Worker training in digital literacy and technical skills is essential to effectively operate and maintain advanced machinery, ensuring a smooth transition to digitalization. 

Sustainable Sourcing and Supply Chain Transparency:

Industry players should collaborate with suppliers that adhere to ethical and environmental standards. Technologies like blockchain can provide transparency and traceability in the supply chain, ensuring compliance with labour and sustainability requirements. Establishing supplier codes of conduct and conducting regular audits to verify adherence to these standards is essential for maintaining accountability and ethical practices throughout the supply chain. 

Investments in Workforce Development and Decent Work:

Worker training and development programs enhances skills and enables employees to adapt to changing industry demands, including the acquisition of digital skills. Ensuring fair wages, safe working conditions, and respect for labour rights improves worker well-being and retention. Creating a workplace culture that values inclusivity and diversity not only attracts a broader talent pool but also contributes to the overall success and sustainability of the industry.

Collaborative Industry Initiatives:

Collaboration through industry-specific sustainability initiatives and partnerships is key to driving sustainable practices. Organizations like the Sustainable Apparel Coalition (SAC) and the Ethical Trading Initiative (ETI) provide platforms for collective action and the sharing of best practices. Engaging with stakeholders across the supply chain, including suppliers, competitors, and NGOs, fosters a holistic approach to addressing common challenges and promoting sustainability. By working together, the industry can collectively achieve higher productivity, improved competitiveness, and a more sustainable future. 

What initiatives or projects are driving Productivity in the Asia's garment and textiles industry?

Several initiatives, projects, and publications are actively driving and reporting on productivity improvements in Asia's garment and textiles industry. The list below is not comprehensive but highlights a range of strategies being utilized across the region to boost competitiveness.

Productivity interventions available to garment factories in Asia: A mapping study (ILO, 2021): This study focuses on the availability of productivity interventions in the Asian garment sectors. By examining a subset of productivity interventions available to the industry, the paper depicts a broader picture of what type of support services are available to Asian garment factories.

Lean Manufacturing Initiatives: Many textile and garment manufacturers in Asia have adopted lean manufacturing principles and techniques to eliminate waste, streamline processes, and improve productivity.

ILO’s Factory Improvement Toolkit: Through an activity based, participant-driven methodology that is both scalable and cost-effective, this ILO toolkit helps factories advance decent work and sustainability by upgrading processes in a variety of areas, including productivity, working conditions, and environmental practices. A pilot initiative was held in 2021 across factories in Cambodia, Bangladesh and Pakistan.

What reports or publications are driving Productivity in the Asia's garment and textiles industry?

Employment, wages and productivity in the Asian garment sector: Taking stock of recent trends (ILO, 2022): The report takes stock of employment, wages and productivity in the Asian garment sector by exploring data and policy insights to highlight trends, patterns and ways forward for a better future of work. By utilising updated data insights, the report outlines persisting decent work deficits as the garment sector evolves, and the prioritised support needed to overcome such challenges.

The State of Fashion 2023: Holding onto growth as global clouds gather (Mckinsey, 2023): This report by Mckinsey emphasizes that in 2023, the global fashion industry will need to weather inflation while finding opportunities in shifting consumer patterns, channel and digital marketing strategies, and manufacturing approaches.

Productivity and decent work: A workers' manual (ILO, 2022): This manual aims to guide worker-oriented training in the Asian garment sector on how productivity improvements can support decent work through enhanced social dialogue, compliance with labour standards and improved working conditions.

Enhancing Global Market Competitiveness of Textile and Garment Exports of South Asia (UN ESCAP, 2022): This paper investigates the driving forces behind change and assesses the impact on the textiles and garment sector in South Asian countries. It offers recommendations for both domestic and external challenges, emphasizing the shift from market access-based competitiveness to efficiency-driven competitiveness.

A "Just Transition Toolkit" for textile and garment supply chain in Asia: This Toolkit looks at how to drive behaviours and practices throughout the textile and garment supply chain in Asia, and provides specific advice on just transition in the garment sector to social partners and industry stakeholders groups including: governments and policy actors, enterprises, workers.

Why mainstreaming green finance is key to real industry sustainability

Green sustainability metrics are evolving quickly, with financial institutions increasingly adopting them. Innovation in green financing is key to ensure a fair and just transition, says Rakesh Vazirani, Head of Sustainability Services at TÜV Rheinland Group.

“This widespread breakdown across the industry has illuminated how fragile the system really was”

Industry experts agree that the COVID-19 pandemic will continue to shape garment production in Asia far into 2021 and beyond. But how will the pandemic affect garment production systems and practices? And manufacturers and workers? Here are the perspectives of industry stakeholders.

Want to know what the Factory Improvement Toolset (FIT) is all about?

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Learnings and Tools

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The 9th Cambodia International Textile & Garment Industry Exhibition

2025-08-13 00:00:00+07:00 to 2025-08-16 23:59:59+07:00 UTC+07

Phnom Penh, Cambodia

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Business & Productivity

Why does Business & Productivity matter for garment factories in Asia?

Why mainstreaming green finance is key to real industry sustainability

“This widespread breakdown across the industry has illuminated how fragile the system really was”

Want to know what the Factory Improvement Toolset (FIT) is all about?

Learnings and Tools

Latest News on Business & Productivity

Resources on Business & Productivity

Cambodia GFT Sector Brief [Issue 3] - Presentation Deck

Cambodia GFT Sector Brief [Issue 3]

[Executive Summary] Enhancing Sustainability Reporting in the GFT Sector in Cambodia

Enhancing Sustainability Reporting in the GFT Sector in Cambodia

Industry Events on Business & Productivity

The 9th Cambodia International Textile & Garment Industry Exhibition

Click through our Member Profiles and find experts in the field of Business & Productivity

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