Interview with Mr Dian Gomes

Sri Lanka is primarily an agrarian society and almost 90 percent of employees within the industry are women. This combination results in a majority of workers using their industrial jobs only as a transition job till marriage and family commitments. This is a cultural issue which results in natural transition of skilled labor out of the industry.

There was a stigma attached to the workers within the apparel industry which has been overridden through the standards pioneered by companies such as MAS, in positioning the machine operator jobs as being honorable & recognizing them as the driving force of the country’s foreign income generation.

Another challenge faced by the industry is the migration of skilled workers overseas seeking more lucrative opportunities in the Western World & the Middle East. This is an issue not only at the grass root level but also exists at higher management level & technical roles as well.

Over the years, MAS Holdings has evolved from a very generic/single customer model to multiple models/different customers where each customer has own unique set of requirements which are driven by their respective market conditions. However in order to continue to be a preferred vendor to each of these brands, MAS has been able to achieve true micro-merchandizing capability through integrating several key capabilities.

With reducing lead times we are moving into quick response ‘replenishment models’ -

MAS Holdings has always believed in utilizing technology as a source of competitive advantage. The operational/manufacturing aspects such as CAD/CAM technologies were used at a very early stage in our organizations life-cycle. Today we are looking at Bonding, Silicon, No Sew, Hot Melt & a host of new technologies that will redefine garmenting as we know it. MAS Holdings has established a dedicated Research & Innovation Center primarily focused on creating newness to the customer, a factor which we feel is critical for business sustenance.

At the ‘front end’ of the business we have embarked on initiatives for better integration with our partners which will enable improved data gathering/forecasting and speedy dissemination of technical data both ways. The next step is to move into virtual design systems and 3D body-scan technology that will link us seamlessly to our own overseas design studios and customers.

MAS Holdings has a breadth of Customers/Product Ranges that enable us to play across multiple markets and demographics. Currently our main customer base is in the USA with UK being the next in terms of volume. However with the strengthening of the EU, we have moved into strategic partnerships with a few of the main EU brands as well. The GSP+ is a key advantage which makes Sri Lanka attractive to potential buyers from this region.

We have been able to utilize the Free Trade Agreements with India to embark upon a ‘regional strategy’ where we will look at leveraging the competitive advantages of each location in terms of manufacturing capability, sourcing strength technical know how to and configure a winning combination for our customer.

Organizations such as Toyota and DELL, have worked successfully on ‘mass-customization’ and ‘change-to-order’. This is key information at factory level, in order to be better prepared to take on future business requirements. This will forewarn us of the resource requirements in terms of technical skill base in order to meet forecasted demand.

With MOS, these learnings are being applied to transform the apparel industry’s traditional ‘push-driven’ philosophy to one that is responsive to the market needs as well as the specific requirements of MAS. A further development in the pipeline is the integration of our internal information backbone with our external partners’ systems. With web-based systems (as opposed to customer-specific EDI for example), we’ll be able to do this integration more seamlessly.

A few years ago MAS Holdings re-structured its operations into Clusters with a view of specializing in specific product categories. As a result today MAS Holdings has 3 main clusters focused on Intimate wear, Active wear and Fabrics. Each cluster operates autonomously customizing their business processes to suit the needs of the segment they operate in.

MAS Holdings also adopts a policy of developing its manufacturing facilities in multiple geographical locations. Currently the group operates over 20 plants with operations spread all over Sri Lanka with a few factories being in regional proximity. The future growth plan features India as a strategic location whereby a regional strategy is envisaged to offer further benefits to the customer in terms of cost.

The clusterization and the geographic dispersion of the MAS entities is also a risk mitigation whereby MAS has been successful in overcoming issues like quota systems, natural disasters such as the tsunami and of course risks associated with regional civil unrest.

Being eco friendly is not a catch statement or a deliberate ‘CSR’ strategy at MAS Holdings. From Day 1, we have adopted best practices as far as environment conservation is concerned. We have won numerous awards for our contributions to Society, but this is not about awards, goodwill or recognition. For us, its part of our DNA, it defines who we are.

For us being eco friendly is not a ‘business option’. I would say that it would rank as a primary concern for us in the way we run our business. However, we are continuously looking at improving our standards on eco friendliness and this will be brought to life with the launching of the revolutionary ‘Green’ Plant in Thulhiriya, later this year. This facility, built exclusively for Marks & Spencer will take ‘Eco Friendly’ to another level, and there is much interest and enthusiasm within the group to ensure successful launch of this project.

In certain products such as casual and active-wear, we have seen a universal growth that transcends national/cultural boundaries. This has led to companies such as NIKE, Adidas to form partnerships to meet this demand.

While in the intimate apparel categories we may have certain regions being slower to adopt more ‘sexier’ products. But even there the greater awareness brought by both traditional ‘push’ media and ‘new media’ (ex: the VS fashion show is among the most watched on the net) and the greater brand recognition have increased their penetration into more markets. More affluent young buyers anywhere in the world mean more opportunity. Consider the success story of VS PINK. Consider the success of the Thong in the mainstream over the past 2 decades, and the acceptance of categories traditionally thought of as ‘inner-wear’, as ‘outer-wear’ (ex: Cami’s, bra tops etc) even in traditional Asian societies.

These have fuelled the growth in these market segments, and have also been partly responsible for our own rapid growth over the past few years. When mass customization is realized at the front end, it translates into long running orders for our plants. This means economies of scale & higher productivity. We’re also worked heavily on newer and leaner operational models (MOS) and lower cost bases to further leverage on this advantage.

MAS Holdings has always had a revolutionary business philosophy. We are and always will be a company that will put its people and their communities first.

The Apparel industry has over the years been on a continuous migration plan moving from the western world towards developing nations with ‘cheaper labor’ being the key consideration factor and ‘THE solution’ seeked by most vendors:

In this light, MAS Holdings has been revolutionary in its approach to succeeding in the apparel industry. Given below is the rationale for this statement.

Yes of course. The conventional marketing rule of revolving your processes around the consumer is very much applicable in the context of apparel. In order to be a preferred vendor in this competitive industry, we are expected to be in pulse with the end consumer, observe fashion trends & offer designs which will win in the market. Being a mere tailor shop will not be sustainable. Companies need to be market oriented whilst providing a design to delivery solution.

The other side to this is that fashion content is more dynamic than typical consumer goods. When working from ‘concept to delivery’, we face a similar high-risk factor to the movie/entertainment industry (in the movie industry, only 1/4^th of theatrical releases make a profit in the theatres, that 1/4th effectively has to make enough to cover the other 3/4^th, and also the loss makers also make back money from home video, TV rights, foreign markets etc).

Our leaders need to know, understand and empower their employees. They need to understand what makes people come together and use this to steer them ahead to achieve exceptional performance. You need to look deep into the mentality of your employees and identify what is most important to them. This will vary among different levels of employees. It is not possible to assume what drives people. This cannot be done, sitting back in plush city offices. My experience of over a decade working with the rural majority has taught me that.

I run a labor intensive operation with more than 12,000 people under our payroll. Yet we don’t have a single trade union in any of our factories. Thus there have never been any strikes or anything of the like. The reason behind this is the open door policy and the participative style of management adopted by us. We go to the extent of getting the girls from our sewing lines to participate in operational decision making through what we call the JCC (Joint Consultative Committee). I personally sit at this forum and together with the workers we collectively address issues that arise on a day to day basis. I also make it a point to address the staff at least once in three weeks. In order to be effective in people management, it is important that we ‘walk the talk’!

In a nutshell, I would say that Sri Lankan organizations need to develop a genuine concern for their people and must adopt management practices to facilitate this. Our leaders need to realize that the human resource is the most important asset that an organization can have. If you look at the best performing companies, they have the best talent at their disposal. Thus our management practices should be more people centric. After all it is the people that make it happen.

Globally, there is a perception that most apparel is made in sweatshops and exploitative conditions. Sri Lanka has distanced herself from this position – having always insisted on and maintained high standards. This is more than the pay – it encompasses an overall approach to move away from exploitative practices where we look at work hours, work conditions, health & safety activities, wellbeing etc

In our company for instance, there are wide ranging initiatives ranging from educational opportunities to artistic and other skill development, extensive workshops and facilities related to encouraging healthier lifestyles, counseling and mentoring programmes. Our signature programme ‘Women Go Beyond’, which won the AAFP award, actively promotes and supports higher education and career progression, with financial incentives.

For MAS Intimates, this approach has brought rich dividends. Our success depends on highly skilled workers who are passionate about the company. It is the workforce of this caliber that can leverage our lean production methodology MOS, and make us highly competitive in the global marketplace. We have made a strategic decision to move away from chasing costs to improving efficiencies by developing and looking after our workforce.