Tirupur textile industry

Tirupur constitutes to over 80% of the country’s knitwear exports mainly to USA and EU.
It’s situated near Coimbatore in Tamil Nadu. The present slowdown, especially in USA, has
affected the exports of garments from Tirupur. The orders are down by 20-25% from the
expected value. The value chain for the textile industry is as below.

Sourcing Apparel
Weaving Processing making Distribution/
raw Spinning
and knitting Retailing
materials

Tirupur is associated with weaving/knitting, processing and apparel making. This is seen
as the weak link in the value chain because of the high power tariffs, power shortage and low
investment in technology. The average manufacturing and delivery lead time from buying the
fabric to shipment of apparels comes to 45-60 days. The mean delay in procurement of raw
materials for garments and then exporting finished goods is estimated to be 15.5 days. Since the
average shelf life of fashion apparel is only 45 days, such delays can’t be taken for granted. The
supply chain is long, disintegrated and complex. Even as the cost of labor is less, the cost of
production is more than that in China and Brazil. This clearly indicates that the cost spent in
movement, storage and processing is high in India. The use of technology is very less. The
visibility in the supply chain is very less. The major portion of the spinning mills is located in
north India whereas the weaving and processing centers are located majorly in Tamil Nadu and
Andhra Pradesh. The firms which do spinning should integrate weaving and knitting also in their
premises. This will reduce the movement of goods. More the integration more will be the
productivity and faster the delivery. The weaving and knitting companies located in Tirupur
should also have their own spinning mills. This might cost more investment but will give long
term benefits in terms of faster order processing and delivery. The use of IT in order processing
will reduce the inventory pile up. The visibility across the supply chain should be improved for
proper and accurate flow of information. Procurement of raw materials and processing should be
done in JIT way. The production plan should be made backwards with delivery date as reference.
Manufacturers should follow made-to-order rather than made-to-stock. This will reduce the
money being locked in raw materials. The supply chain can be reduced as shown below.

Common production Stitching &

Sourcing
facility garmenting

This is a tight supply chain where all the people who are involved can have good flow of
information between them. This will reduce the movement of goods and thus the overall cost of
production.

Thus more integration, use of IT and visibility will reduce the cost incurred and improve the
productivity. This in-turn will increase the efficiency and delivery time.