Joint industrial effort vital to compete in Global Markets

by Ranga Kamaladasa

The information age is thriving and while BPOs and software companies realise their undeniable potential in the globalised market, the conventional industries seem to be wearied down by those same circumstances. The Apparel Industry and ICT alone will not go far if the other industries lag behind as industrial development is always inter-dependent.

It is in this context that the society of Materials Engineers Sri Lanka organised a seminar at the Sri Lanka Japan Cultural Centre last week on the theme "Technical advances and management strategies to enhance productivity and competitiveness in the manufacturing industries". Industrial representatives from various organisations and academia also discussed the technical areas of the Sri Lankan metal manufacturing industry and advances in the Sri Lankan rubber and plastics industries.

Quality over quantity

The rising cost-of-living, lack of skilled work and the world's highest cost per unit of electricity are some of the reasons that industries today cannot gain the price performance advantage they had over global markets decades ago. The best example for this is the traditional ceramics industries such as the tableware industry where energy costs are about 40% of the production costs.

"Our labour is not as cheap as it used to be. Also factors such as price of electricity has drastically made our production costs to rise, said the Chairman and Managing Director of Dankotuwa Porcelain Limited Sunil Wijesinghe in his keynote address. "We have to seriously think of switching to quality merchandise from price merchandise", he said.

The story of Japan is something that we should really take seriously, Wijesinghe said. A decade ago Japanese toys were in a true sense cheap. You would be lucky if the toys lasted a day. But Japan today, is totally different.

Quality circles and quality consciousness became a national obsession, and today they are one of the most successful industrial countries. Juran and Prof. Kaoru Ishikawa created a quality culture in Japan that still holds today. Quality circles, the most popular concept- involves volunteer group composed of workers who meet together to discuss workplace improvement, and make presentations to management with their ideas.

Typical topics are improving safety, improving product design, and improvement in the manufacturing process. Quality circles have the advantage of continuity, the circle remains intact from project to project.

The satisfied customer is bad for business, Wijesinghe said. The customer should be surprised, delighted, dazzled and bewitched.

While the quality will play a crucial role in building a stronger niche in the global market the attitude and the approach will probably be the most significant factors that will influence quality both in service and in goods.

Research and Development

The government is unable to fund R and D, at least to the extent of what the industries would desire. Only 0.1% of GDP is allocated for R&D which brings Sri Lanka to the lowest investors in R&D in South Asia.

The lack of Research and Development immediately hinders the industries where technical knowledge is apt for the basic manufacturing processes. Even though being the largest solid tyre manufacturer in the world, the rubber industry in Sri Lanka is a good example for the decline in the industry.

In his presentation K. J. Wanasinghe, the General Manager (Quality control) Loadstar (Pvt) Limited, showed that the growth rate of rubber production is declining in respect to the global consumption. From 1995 to 2005 Sri Lanka had only increased its rubber production by 1% while in the international market rubber consumption has increased by 45%.

We don't have any natural resources except natural rubber, Wanasinghe said adding that there are times where we even import natural rubber. One hundred years have passed since the world's first rubber conference and technological exhibition was held in 1906 at the Peradeniya Royal Botanical Gardens. 2006 should have been a year of technical reflection and a year of foreseeing, he said.

We will have to start believing in win-win situations and build mutual trust between ourselves, Wanasinghe said. Even companies such as Yokohoma and Bridgestone co-operate and exchange know-how. This drastically reduces R&D costs and everyone benefits.

One of the other facts stressed in the discussion was that R&D should go in parallel with the processes. An integral role should be played by R&D that directly influences the industry and takes it a step further. The discussion went further to conclude that policy-makers should also be included in R&D processes.

Most of the industries have a wrong conception on R&D, said the Director of Postgraduate Studies at the University of Moratuwa Dr. Nanda Munasinghe.

R&D is not about short-term productivity increases like optimising a machine in a company to make it efficient. R&D is more long-term and akin to breakthrough technologies that gain a competitive advantage that leads industries in different paths.

Dr. Munasinghe said that all three parties, the government, educational institutes and the industries, should play an equal role, contributing one-third each to Research & Development.

Whilst taking these obstacles into consideration the most important issue would be how to overcome or walk around these obstructions. The apparel industry set an example by joining forces to fight against a common foe. Their Research and Development as well as training skilled labour was achieved by synergy.

The quality of Sri Lankan apparel today is not being questioned as of late and the protection of labour rights in the majority of the places is above standards.

It's time for the other industries to follow this example. A joint effort is needed to tackle and win the global market.