THE TEXTILE INDUSTRY

Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
1
MODERNIZING THE TEXTILE INDUSTRY TO MEET
GLOBAL DEMANDS
Dr. Yehia El Mogahzy
WestPoint Stevens Professor
Professor of Textile Engineering & Statistics
College of Engineering
Auburn University, Auburn, AL, 36849, U.S.A.
yehiae@eng.auburn.edu
Dr. Ahmed Kamel
Director of Quality Assurance
JPS Glass, USA
ekamel@jpsglass.com
ABSTRACT
Over the years, the global textile industry has been through many turning points.
Today, the industry is facing what perhaps will be the biggest turning point of its
history. On the surface, the industry seems to be fading from the world of
industrial countries. Developing countries on the other hand are not offering
viable alternatives. Will the industry survive this turning point? Will it come out
stronger or weaker?
The same industry that changed the world and sparked the industrial revolution is
being perceived today as a declining industry; an industry that has largely missed
the onset of the information and digital age. The same industry that paved the
road for countries seeking to enter the industrialized age is now at a turning point
that can either lead to a major revival or to a continuing decline. What happened
to the textile industry? What can be done to revive this industry? What is the role
of developing countries? And what is the role of industrial countries? These are
difficult questions that the industry must face at this turning point of its history.
The issue of modernizing the textile industry represents a broad subject, which
can be discussed in many different ways depending on what area of
modernization one should emphasize and in what region in the globe
modernization is needed. In industrial countries, modernization may primarily
imply market restructuring, economical adjustments and better use of information
technology. In developing countries, modernization may imply a wider range of
activities including: better technology, trained personnel, better working
environment, research and development, information technology and economical
adjustments.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
2
When one search for a common development or modernization challenge facing
the textile industry in both industrial and developing countries, one will find that
the transition from a price-differential product to a quality-differential (or a techdifferential)
product is the primary challenge. It is not the trade deficits, and it is
not the loss of jobs; it is simply the reality that the industry has chosen to ignore
for many years. This industry must move to the information age very quickly and
very effectively, or the consequences will be very serious. This industry must go
back to the R&D era that has made it the leading industry in the industrial age, or
it will evaporate in an era where only high tech dictates the global directions.
In this paper, we attempted to tackle some of the critical issues and challenges
facing the textile industry in both industrial and developing countries. As lengthy
as this paper may seem, we believe that we only touched the surface. However,
we hope the paper will stimulate the industry leaders thinking to better develop
and modernize this great industry.
TABLE OF CONTENTS
· Modernization and globalization
· Is it a Global Village or a Global Ship
· The textile industry: The transition from the industrial age to
the Information age
· Modernizing the textile industry:
- Optimum market structure
- Research and development
- Information technology
- Integrated competitive quality
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
3
MODERNIZATION AND GLOBALIZATION
Modernization is a state of mind at which a country feels and realizes that it is
capable of being effectively and efficiently productive. Modernization is a result of
continuously integrated and coordinated efforts that involve:
- High tech industry
- Effective and efficient infrastructure
- Sound research and development
- Reliable information and logistics
- Efficient service
- Quality
- Clear vision
- Cultural harmony
A state of modernization is primarily judged by its impact on the people quality of
life. A country can never be modern if its people suffer complete deficiency in one
of the following indicators of quality of life:
· Education
· Environment
· Health care
· Activities
· Peace and security
· Human rights
In a well-developed country, these criteria are primarily met by the people with
the role of the government being primarily a strategic planner, a facilitator, a
protector and a motivator. This point leads us to one of the critical factors that
distinguishes between well-developed countries and developing countries; that is
the people/government (P/G) role ratio. A recent survey by one of the authors on
global diversity clearly revealed that under-developed countries suffers
substantially smaller P/G role ratio than well-developed countries. Figure 1
illustrates the relationship between the state of development and the P/G role
ratio.
We should point out that for a given region or country, this relationship is not
static; it can change depending on changes in a number of factors such as:
- Constitutional restructuring
- People-government relationship
- The state of security
- The level of literacy
- Cultural diversity
- Health
- Poverty
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
4
Indeed, history gives us numerous examples of super-developed countries that
have deteriorated or disappeared because of a deficiency in one or more of the
above factors. On the other hands, many countries have begun their true
developments by seriously tackling these factors.
Globalization has been one of the most debated issues in recent history with
many supporters and oppositions. The biggest supporters of globalization are top
industrial countries. These countries support big business and see that the
only way for maintaining and improving their superior status in the world’s
economy is to compel businesses to accept the death of traditional localized
markets and embrace international marketing. One of the outcomes of this
global thinking was the National American Free Trade Agreement (NAFTA).
This agreement has sparked a global marketing revolution through
elimination of tariffs and border restrictions between the U.S., Mexico, and
Canada. As a result, a giant consumer market of 350 million people was
P/G Role Ratio
State of Development
Under-Developed
< 0.5
0.5-1.0
Developing
>>> 1.0
Well-Developed
Figure 1. People/Government Role Ratio Vs. State of Development
0.5
1.0
>>1.0
(El Mogahzy, Y. E. “Global Diversity Analysis” A Survey Submitted to the Zalon E-Commerce Consultant Group
Washington DC, 1999)
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
5
created by the year 2000 and these three countries have enjoyed over $6
trillion in joint economic activity.
Today, the World Trade Organization (WTO) with its more than 130 country
members is the biggest advocate of globalization. The main announced
objective of the WTO is to help trade flow smoothly, freely, fairly and predictably.
This objective is met through a number of activities including:
· Administering trade agreements
· Acting as a forum for trade negotiations
· Settling trade disputes
· Reviewing national trade policies
· Assisting developing countries in trade policy issues, through technical
assistance and training programs
· Cooperating with other international organizations
The supporters of globalization leaded by WTO justify their support on the
ground that globalization can result in many benefits including:
· Peace between countries through constructive solutions of trade
disputes and prevention of unilateral actions
· Unified rules between different trading members
· Cost reduction through producing many products in labor-intense or
cheap-labor countries
· Multiple choice of product range
· Income increase
· Stimulation of economic growth through trading
The opposition against globalization stems from the fear that it may result in a
destruction of cultural diversity. This is because massive global trade requires
a homogenous world. Commonly, large agencies and corporations feel that
diversity is a trade enemy because it requires differentiated sales appeal. They
typically aim at efficiency through creating the same values, the same tastes,
using the same advertising, selling the same products, and driving out small local
competitors. Some organizations see globalization as a way to escape high local
wages, labor laws, and environmental regulations.
Some countries see globalization as corporate invasions into diverse tastes
and cultures. This was evident by the vigorous protests of more than one million
of India’s small farmers against the entry of industrial agriculture and
genetically engineered foods, specifically Cargill Corporation and Kentucky Fried
Chicken. In addition, some countries perceive McDonalds and Burger King as
alteration of local tastes. In religious countries, globalization is obviously met with
higher resistance because of the fear of destroying the moral structure of these
countries.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
6
We believe that the endless debate on whether globalization is good or bad for
developing countries should be put to rest. People that waste their time debating
this issue should realize that the inevitability of globalization was not just a result
of industrial countries feeling the need for global market to increase their
richness; it was also a result of young generations reaching out via the internet to
the rest of the world, seeking opportunities, hungry for knowledge, thirsty for
entertainment, and striving for narrowing the economical gap between different
countries. Accordingly, the useful issues to be raised should be:
- How best to benefit from the opportunities presented by breaking
the barriers between different countries in the globe.
- How best to live with the many of the problems that will inevitably
occur as a result of globalization
- How to integrate instead of isolate yet maintain a country’s unique
cultural integrity and moral structure
These critical issues are outside the scope of this paper. However, the vast
majority of young generation already knows the answers to these questions.
They have been exposed enough to the different sides of debate on these issues
and we trust their judgments, diverse or not.
IS IT A GLOBAL VILLAGE OR A GLOBAL SHIP
In the context of the subject of this paper, it will be useful to provide our own
predictive view of how the globe will look like if globalization continues to be the
theme of this century. Perhaps, the most optimistic view of globalization is that
the world will become a global village. This is a term that is often credited to
Marshall McLuhan, a Canadian communication expert. A village implies harmony
and peace. Yes, some geographic and time barriers may be eliminated and
some cultural diversity may be overcome. However, globalization is not a welfare
strategy; it is a competitive and opportunistic strategy. Accordingly, we feel that a
better term to use for describing globalization is a “global ship”; a ship that will
be in a continuous mission. More importantly,
- The ship will require a captain, and captains do not lead forever;
they retire and hand the flags to more powerful, better qualified
captains
- The ship will also face many storms and it will often go where the
winds go
- Survivals in stormy winds will likely be the strongest, the most
intelligent, and the most robust
- There will be many levels or classes on the ship and the weakest
will likely remain on deck or hold to the ship by a thin rope
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
7
- The ship will be the world and the world will be the ship; if you do
not join, you will likely drown
In more specific terms, we believe that a global ship will consist of three
principal segments (see Figure 2):
· Superior global segment
· Dominant global segment
· Participants
The superior global segment is the supreme segment of the global ship. This
segment will enjoy two important economical features: (1) the ability to
achieve superior gains in global economic output and international trade growth,
and (2) the ability to maintain and protect this superiority. Although this segment
must work in conjunction with other segments to sustain continuous economical
growth, it should be physically large (system, law, land, human resources, natural
resources, capital flows, and military power) to sustain its superior status even
under the most difficult global conditions and independent from other segments
in the ship.
The second segment on the global ship is the dominant segment. This is the
second most powerful segment. It will likely consist of different coalitions of
economically prosperous countries. Different dominant segments will work
together and in an organized fashion to coordinate global economical issues
such as economic growth, capital flows and international trade policies. More
critically, they must accept, by choice or forcefully, the economical power of the
superior segment to avoid trade conflict and to minimize differences in
economical interests. The overall global status of a dominant segment will stem
from its ability to define its unique economical role in the global ship and from its
relationship with the superior segment.
Participants will represent the third ranked segment on the global ship. This
segment will typically consist of many countries that fail to qualify as dominant
segments by virtue of their physical status or inability to interact effectively and
efficiently with the primary segments of the global ship. Typically, participants will
suffer some distance as a result of wide cultural gaps or internal lack of harmony.
However, they will be critical for the complete integration of the global ship by
virtue of the types of service that they can provide to the ship. These include
relatively cheaper labor, natural resources and talented individuals. More
importantly, this segment will provide the market and the consuming power
simply because they will represent the majority of the world population.
We should emphasize that without harmonized relationships between the
different segments of the global ship, all segments from participant to superior
will suffer. In other words, harmony will not be an option; it will rather be a must.
It is our opinion that this harmony can be achieved through establishing a global
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
8
cultural and economical network in which common interests of all segments on
the ship can be fulfilled, yet cultural diversity can be accepted, respected and not
resisted.
THE TEXTILE INDUSTRY: THE TRANSITION FROM THE
INDUSTRIAL AGE TO THE INFORMATION AGE
Modernization and globalization are often perceived as two sides of the same
coin. In order for a country to integrate and to become a dominant segment in the
global network, modernization must be an essential component of its strategic
planning. This point leads us directly to the textile industry which has been on the
front lines of the globalization debate between poor and rich nations for many
Superior Global Segment
Dominant Global Segments
Participants
Figure 2. Different Segments of the Global Ship
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
9
years. Obviously, this paper will not be engaged in such a debate. Instead, our
emphasis will be on what lessons we can learn from the history of this industry
that might help us in reviving it in this information era.
The textile industry was the pioneer of the concept of modernization when it
sparked the industrial revolution in Great Britain in 1700s. In 1733, the shuttle
loom (or the flying shuttle, as it was called) was invented by John Kay, a British
weaver. This invention cut the production time in half and paved the way for
numerous inventors in and outside the textile sector. By the 1750's, the industrial
Revolution had begun with inventions strictly limited to cotton weaving. By 1770
British inventor and industrialist James Hargreaves had invented the spinning
jenny and British inventor and cotton manufacturer Richard Arkwright had
organized the first production using water-powered spinning. These
developments permitted a single spinner to make numerous strands of yarn at
the same time. By about 1779 British inventor Samuel Crompton introduced a
machine called the mule, which further improved mechanized spinning by
decreasing the danger that threads would break and by creating a finer thread.
In the beginning of the industrial revolution, England, one of today’s leaders of
globalization, actually aimed at keeping the revolution a secret. Accordingly, it
prohibited anyone who had worked in a factory to leave the country. In response,
the U.S. attempted to attract industrial pioneers by offering significant rewards to
anyone who could build a cotton-spinning machine in the United States.
Historians tell us that Samuel Slater, who had been an apprentice in an English
cotton factory, disguised himself and went to America where he reconstructed a
cotton-spinning machine from memory. He then proceeded to build a factory of
his own and to begin an industrial revolution in the United States.
The U.S. did not stop at this point. In 1793, the American Eli Whitney invented
the cotton gin, which forever revolutionized the concept of industrial production.
History tells us that cotton was the main reason behind the Civil War initiated by
the slavery in the South needed for cotton picking. Shortly after Eli Whitney
invented the cotton gin, planters turned from tobacco and rice to cotton. To
supply the growing demands of mill owners in England and New England, they
imported more slaves to work the cotton fields. The number soared from about
700,000 in 1793 to nearly 4,000,000 by 1860. Plantations sprang up in Alabama,
Mississippi, Missouri, Louisiana, Tennessee, and Arkansas. By spreading slavery
in the South, cotton helped bring on the Civil War.
With the invention of the cotton gin, other inventions in the textile industry
became possible. These included the spinning mule and the power loom. These
early developments in the textile industry resulted in many industrial concepts
that still exist today such as mass production and capitalism. Mass production
implies high volume production of items such as clothing or shoes leading to less
expensive and easily affordable products by lower class and less wealthy people.
Capitalism implied wealth by people who had their own materials, money, space
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
10
and many machines. Those people hired workers to produce high volume
manufacturing goods.
The textile industry was also the first to introduce the integrated concept of goods
manufacturing. In the early 1800s, Francis Cabot Lowell, a textile manufacturer in
the U.S. founded a mill that went through the entire process of manufacturing
cotton from spinning to weaving.
Today, the same industry that changed the world and sparked the industrial
revolution is being perceived as a declining industry; an industry that has largely
missed the onset of the information and digital age. The same industry that
paved the road for countries seeking to enter the modern industrialized age is
now at a turning point that can either lead to a major revival or to a continuing
decline. What happened to the textile industry? What can be done to revive this
industry? What is the role of developing countries? And what is the role of
industrial countries? These are difficult questions that the industry must face at
this turning point of its history. Obviously, these questions pertain not only to the
textile industry but also to many other manufacturing industries.
The textile industry can never be considered as a fading industry. This is a basic
industry that has been and will always be a part of human life. Indeed, by classic
definition of business decline or business growth, industries such as textiles, food
and housing will always exist. Furthermore, growth of these industries is
inevitable by virtue of the inevitable increase in the world’s population. With
approximately six billion people living in the world today, and they are likely to
double in forty years, the potential growth of the textile industry is nothing short of
incredible. However, in the mist of the transition to an information-based
economy, some countries have failed to realize that being in the information age
does not mean getting rid of the industrial base. This is particularly true in
industrial countries.
Today, the U.S. textile industry is facing one of its toughest times in history. As
Roger Milliken, the owner of one of the largest textile companies in the U.S., put
it “It is losing both its manufacturing plants, the products manufactured in them,
and the jobs they provide”. This situation has been expected for many years as a
result of continuous and progressive trade deficits of textile and apparel products
over the last forty years. By the year 2000, this deficit has reached a record high
of about $62 billion (a total 13% increase from previous year with 92% being
clothing). At the same year, the European textile and apparel trade deficit
reached about $34 billion (an increase of 5% from previous year). Note that the
U.S. and the European textile and apparel market were similar in size. China
continued to have the world’s biggest textile and clothing trade surplus. South
Korea was in second place, and Italy, despite its very high labor cost, was in the
third position. Other countries such as Portugal, an EU country with lower labor
costs than Hong Kong and Taiwan, also managed to retain its surplus in 2000.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
11
Turkey’s surplus declined in 2000—for the second year running—as the country
faced intensified competition from Asian countries.
In light of the above discussion, it follows that the global textile and apparel
market will continue to undergo remapping at least by trade deficit standards.
The U.S. will probably remain the biggest importer of textile and apparel
products, and China will likely to hold a solid position as one of the leading
exporters in the world.
The U.S. and European textile trade deficits have been described by some top
industrial experts as signs of destruction of the manufacturing bases in these
countries. In his acceptance to the Textile Hall of Fame Speech, Roger Milliken
used historical examples of trade deficits to prove this point. He mentioned how a
Spanish leader in 1675 bragged about Spain’s trade deficit, asserting, “all the
world’s manufacturing serves her and she serves nobody.” However when its
gold and silver ran out, Spain found that its industrial development had withered;
it had only debts to show for its orgy of manufactured imports and consumption.
That Spanish empire collapsed and those countries that had expanded their
manufacturing capabilities by selling to Spain were the new world powers. Mr.
Milliken then went on to mention the Dutch and the British Empire as followers of
the Spanish empire in neglecting the manufacturing bases. He then asked “Could
this happen to the U.S.A.? Or more to the point; is it happening”?
IS TRADE DEFICIT A SIGN OF FAILURE?
Trade deficit has been one of the most debatable issues particularly between
supporters and oppositions of globalization. It has also been used as the primary
media index of an industry’s performance in the marketplace, particularly in the
U.S.A. and Europe. Therefore, it is important at this point to dwell on the true
meaning of trade deficit. The simplest definition of trade deficit is the difference
between a country exports and imports. Using this simple measure, high trade
deficit is typically blamed on one of two sources of problem (or both):
1. A failure by the country industry to compete in global markets
2. Unfair trade barriers abroad that face the country exporters
The implication here is that, if competing nations were to open their markets, or if
a country’s industry became more competitive against foreign rivals, the country
textile industry could export more relative to imports, thus reducing the trade
deficit.
In addition, if trade deficit is a sign of deterioration of a country’s economical
structure, trade surplus should then be a sign of a country’s economical
prosperity. Indeed, this hypothesis should hold firmly if trade deficit has any
credible meaning. In other words, can China with its solid trade surplus be
considered as a super economical empire in today’s market? Will trade surplus
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
12
lead China to become this empire? Perhaps, the recent history can provide
answers to these questions. The $56 billion Japan’s bilateral trade surplus with
the U.S. in 1997 did not save Japan from its continuing recession. However,
Japan is different from China. It is physically small; it is as large as California with
plenty of mountains and hardly any natural resources. More seriously, it is
suffering cultural conflict with its own success.
So, what is about trade deficit that makes it a popular measure of economical
growth? Well, it is simple to understand, accessible, but also a deficient way to
truly characterize a country’s economical performance. If open market is the
inevitable way of doing global business, each industry should then stop crying
out for trade regulations and restrictions and focus on how it can really remain
competitive in a global market.
The fact is trade deficit is an old concept borrowed from the 17th and 18th
centuries when the wealth of a nation was measured by how much gold and
silver it has. The implication was that trade surplus meant more gold and sliver in
the hand of the nation. This was the era of metallic money; today, we live the era
of intelligent investments that can turn a country into an economical power in a
matter of months. The obsession with running a positive trade balance could
become a two-way economical sword. On the positive side, a country running a
trade surplus may enjoy the following gains:
· More jobs-a very sensitive political issue
· More production units
· More foreign currency pouring into the country
On the negative side, a country running a trade surplus may suffer the following
consequences:
· Loss of internal competitive environment as a result of trade protectionism
· Undesirable internal price hike as a result of imbalanced internal wealth
· Wider social gaps since the majority of people will be working in the
manufacturing field and few will be making the largest gains. Obviously,
the few largest gainers will always attempt to align the country political and
economical strategies to serve their interests
· An inevitable gap between the quality of local products and that of the
exported products
· Export subsidies at the expense of local economical interest
Many economists disregard trade deficit as a measure of a nation’s economical
wealth on the basis that merely knowing that a country has a trade deficit or
surplus is not enough information to say anything substantive about the strength
of a country or its economic prospects. Indeed, an extreme case of trade surplus
could mean a disaster. This point is often illustrated mathematically by
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
13
economists using the so called GDP (gross domestic products). The extreme
situation where a country is running the largest trade surplus possible would
arise if a country exports all of its GDP and imports nothing. In this case, the
country’s trade surplus will be equal its GDP leaving the people in the country
with no food, clothing, or shelter.
The true measure of a country’s economical wealth is the “people modal wealth”;
not the average and not the top percentile. One essential factor contributing to
people’s wealth is their ability and freedom to trade and invest across
international borders; governments do not trade with each other; people do.
Governments may act as facilitators and supporters to allow people to buy and
sell products, services, assets anywhere in the world. Protectionisms can only be
accepted if it meant eliminating corrupt businesses and false marketing. In this
case the whole world has a common law driven by common sense; business
corruption and deceiving approaches to conducting business are not allowed.
In light of the above discussion, the question of whether trade deficit is a sign of
economical failure can be answered in the context of the status of people modal
wealth. If trade deficit is associated with excessive borrowing with potential debts
defaults, people standard of living will deteriorate and the country’s economy will
come to a halt. In this case, trade deficit alone can be used as a measure of the
country’s economical situation. Many poor countries fall under this
characterization of trade deficit.
On the other hand, a country running a trade deficit could still be economically
flourished provided that its people modal wealth is in good shape. For instance,
when trade deficit is associated with merely drawing down previously
accumulated foreign savings or selling other productive assets, trade deficit
alone will not be the accurate measure to reveal the country’s economical
growth. Trade deficit can also be considered an approach to stimulate future
economic prosperity. This is typically the case when trade deficit results in
expansion of domestic investment associated with future economic growth that is
large enough to make repayment consistent with growing living standards.
When people modal wealth is the measure of economical growth, trade balance
will forever be positive; simply because people always know better about what to
buy and what to sell. In the U.S., foreign textile and apparel products are
relatively cheaper than domestic products and their quality is improving.
Therefore, American people are buying foreign textile and apparel products. The
famous slogan of “Crafted with pride in the U.S.A.” was truly an emotionally
touching slogan but it did not work. It may have succeeded to touch U.S.
consumer’s heart for a while, but it could not reach deep enough to the
consumer’s pocket. Wal-Mart, the biggest retailer in today’s market, did not buy
that slogan and the American people agreed.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
14
For some reasons, the textile industry does not learn very well from historical
lessons even the most recent ones. The invasion of the U.S. market by the
Japanese cars in the 1980s had very little to do with trade policies. It was the
American people that saw both the economical and quality features of the
Japanese car at a time the oil crisis was still hurting. It is our opinion that this was
the best thing ever happened to the American auto-industry. In recent years, it
has developed significantly and it has become more competitive both inside the
United States and around the globe. It took a great deal of adjustment, research
and development, quality implementation, and yes, humiliation for the U.S. auto
industry to get back on its feet.
MODERNIZING THE TEXTILE INDUSTRY
In the information age, business decline will no longer be just an issue of
business fading away or being totally eliminated. Indeed, a business could still
exist (because of its necessity for human needs) but labeled or characterized as
a declining business. The key factor that will determine business growth is the
ability of the business to renew itself by continuously providing market stimulants,
consumer attractions, and new products. The four basic requirements that can
allow a business to provide these features are:
1. Optimum market structure
2. Research and development
3. Information technology
4. Integrated competitive quality
These requirements are discussed below.
MARKET STRUCTURE
Historically, the textile industry has relied on the apparel and fashion industry in
providing market stimulants, consumer attractions, and new products. It has been
an excellent business marriage except for the fact that the two industries have
relied on each others so much that a shake up in one has often resulted in a sure
shake up in the other.
Over the years, a technological gap has occurred between the textile industry
and the apparel industry particularly in industrial countries. While the textile
industry has progressed in automation, machine design, process control and
production rates to achieve better product consistency and minimum labor
involvement, the apparel industry has continued to face problems such as
intense labor and labor skills dependency, high wages, market restructuring, and
slow reaction to the rapid changes in consumer behavior. This technological gap
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
15
has influenced the interconnection between the textile industry and the apparel
industry. One of the consequences of this technological gap has been witnessed
in the U.S. market in the form of outstanding apparel trade deficit. As indicated
earlier, 92% of the $62 billion of U.S. textile and apparel deficit in the year 2000
was strictly clothing. In addition, a significance portion of the apparel industry has
moved to South America seeking cheaper labor. Today, it is not uncommon to
see a fabric that is made in the U.S. sent to Mexico or Dominican Republic for
sewing, then returned back to the U.S. for finishing and marketing.
The historical marriage between the textile industry and the apparel industry has
also resulted in a total alignment of the textile industry toward apparel products.
This has been translated into high volume, low value added, and massive
inventory surplus (resulting from dynamic market changes).
The relationship between the textile and apparel industry can be evaluated on
the basis of the proportions of the retail dollar received by different industry
segments from selling an apparel product. In 1998, Bondurant and Ethridge
presented an excellent paper to the U.S. Cotton Beltwide Conference concerning
this important factor. The authors divided the textile market into three main
categories: apparel, home furnishings, and industrial products. They further
divided the U.S. apparel market into two main categories of apparel: national
brands (in the 1990’s it was about 30% of the market) and store or private labels
and niche brands (about 70%).
The market segments considered in Bondurant and Ethridge study were:
retailers, fabric manufacturing and wholesaling, textile mill processing and
finishing, ginning, and farm. Some of the important points of this study were as
follows:
· The largest proportion or value-added to the textile product is that kept by
retailers (more than 50% on average, in some cases up to 80%).
· Fabric goods manufacturers and wholesaling industry had the second
largest share of the retail dollar for men's knit briefs, men’s denim jeans,
and men’s dress shirts, and the third largest share of the retail dollar for
women’s sweat pants, terry towels, and woven bed sheets.
· Textile mill processing and finishing margins represented a high of 14
percent of the dress shirt retail dollar and a low of 5.6 percent of the knit
briefs retail dollar.
· Values of other margins from farm to cotton warehousing and handling
were significantly smaller than those for other industry segments.
The authors explained the reason that margins as a proportion of retail value for
different segments varied from one cotton end-product to another on the ground
that different products used different amounts of cotton. For example, denim
jeans contained approximately 2.1 pounds of cotton per pair, whereas knit briefs
contained about 0.2 pounds of cotton per pair. Thus, increasing the cotton
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
16
content of a finished good generally increases the share of the retail dollar
flowing to the different industry segments. This is why the textile industry is
perceived as an industry that can only produce price-differential and commodityoriented
products.
The authors also explained the substantial value-added or proportion of retail
value kept by retailers on the basis of two main reasons: (i) retailers are able to
extract more money for these products from the final consumer, and (ii) retailers
of cotton products may operate under high-risk conditions. Retailers take on risk
when they hold inventories of products. There is no assurance that these
inventories will sell at particular prices. Thus, large marketing margins may often
be indicative of high-risk businesses. In addition, fabric manufacturers and textile
mills must find buyers for their cotton products to stay in business, unlike the
corresponding retail firms who do not rely solely on cotton product sales to
maintain normal business operations.
According to Bondurant and Ethridge:
“If a market segment is inefficient, it will produce a product at higher costs than if
it was efficient. The inefficient market segment may try to pass these higher
production costs back to the previous market segment in the marketing channel
in the form of paying less for the raw inputs. This translates to lower prices for the
producers at the beginning of the marketing channel. Market participants may be
able to pass higher costs backwards in the marketing channel, but they are less
likely to be able to pass these cost increases forward in the marketing channel”.
According to the authors, the U.S. apparel market is subject to tough competition
by foreign products resulting from an open market for products of good quality
made by inexpensive labor. The home furnishing manufacturing, on the other
hand, is a more automated sector. However, only few companies in the U.S.
produce most of the home furnishing products (sheets and towels). In addition,
this market only involves few item types. This lack of product diversity often
results in little flexibility when prices are established for these items.
We believe that Bondurant and Ethridge study has summarized the dilemma of
the current textile market structure particularly in industrial countries. If the textile
industry was to rely totally on the apparel industry to provide market stimulants, it
would have to live with the traditional axiom that labels the industry as high
volume, price differential, and low value-added industry.
In developing countries, the interconnection between the textile and the apparel
industry may seem more economically feasible because of the low labor wage in
these countries. However, most developing countries often fail to deliver quality
products (a subject that will be discussed shortly). More specifically, quality
consistency is a major hindering factor facing the textile and apparel industry in
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
17
many developing countries. This is typically a result of poor working environment,
poor training, low skills, and last but not least the absence of R&D.
In light of the above discussion, it is our opinion that the total reliance on the
apparel sector to provide market stimulants of textiles has hurt the textile industry
in industrial countries. We understand that there is an inevitable connection
between the two industries, and we certainly do not advocate a total separation
between the two industries. We are simply suggesting widening of the textile
market channels in industrial countries to achieve an optimum market structure.
This can only be achieved through focus on value-added textile products in and
outside the apparel market. On the other hand, developing countries need to
benefit from the experience of industrial countries in the area of producing high
quality apparel fabrics and home furnishings. In this regard, the key factor is to
be quality creative.
RESEARCH & DEVELOPMENT
In the textile industry, research and development has been a part of the
industry’s practice for many years. Today, a modern textile mill is an excellent
display of state-of-the-art technology with features such as automation,
information systems, transportation, and process control are at their highest
levels of development. Indeed, the industry that sparked the industrial revolution
has never ceased to develop new technologies. Despite these developments, the
textile industry has been perceived as a low-tech industry; an industry that is
based on art and experience rather than research and development. This view of
the industry is a result of a number of facts and misconceptions some of which
stem from the industry itself.
We believe that the low-tech perception of the textile industry is not a result of the
technology the industry is using but rather a result of the driving forces operating
this technology. In recent years, high volume, high production, low labor
dependency, and fast delivery have been the driving forces operating the textile
technology. Accordingly, textile machinery makers have focused their efforts on
making faster and more automated machinery. Today, spinning machines can
produce a yarn at a rate of up to 20 times faster than that used 20 years ago.
The weaving machines can insert filling at rates of 5 to 10 times greater than
those used 20 years ago. Similarly, makers of testing and monitoring
technologies followed the same direction. For example, a cotton fiber test that
used to take hours to perform only 20 years ago, can now be performed in a
matter of seconds using the High Volume Instrument (HVI) system. It is not a
coincident that the system is called High Volume, not High Accuracy system.
From a manufacturing cost viewpoint, high volume, high production rates, and
automation are very positive features. The problem, however was that these
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
18
advanced technologies did not solve many of the fundamental problems that the
textile industry is facing. More specifically, they could not address many of the
key questions that the industry has struggled with for many years. Examples of
these key questions are as follows:
- Why the yarn as spun cannot be woven? – Can we do away with
sizing?
- Can we achieve a better fiber/machine and yarn/machine
interactions so that less fiber and yarn damage, and better quality
efficiency are achieved?
- Why most of the yarn quality parameters that we are currently
testing are irrelevant with respect to fabric quality?
- Why quality problems that have been around for hundreds of years
still exist and at higher costs?
- Why subjective means of evaluating fabrics and clothing (e.g.
appearance, comfort and hand) are not translated into objective
means of raw material selection and yarn and fabric design?
- What is the relationship between the dyeing and finishing practice
and the spinning and weaving practice? Is there an objective
coordination between these two critical phases of textile
operations?
Obviously, the list of questions can be further expanded. However, the main
common aspect of these key questions is the inability of the industry to produce
products by design, not by trial and error or guesswork. The need for research
and development in the textile industry stems from three basic necessities:
· To overcome the two primary hindering factors facing the textile industry,
namely: subjectivity and variability
· To produce products by design, not by guesswork
· To optimize quality with respect to cost
Ironically, many of the key questions addressed above have been tackled in
numerous textile research publications produced by textile institutes around the
world. Yet, the textile industry did not take full advantage of these developments;
it has been busy producing high volume and massive production. Obviously, the
huge void between textile research and textile practice is partially to blame on
many textile researchers who failed to connect with the industry.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
19
In relation to the textile market, we believe that R&D will determine the direction
of this industry in the information age. In this regard, we expect the global textile
market to undergo major changes that will divide the market into two major
sectors:
(a) The price-differential textile sector
(b) The tech-differential textile sector
The price-differential textile sector will consist of two major markets:
· The traditional textile sector (woven and knit fabrics, garments,
nonwovens and household textiles)
· The textile support sector (fiber production, yarn production and dyeing
and finishing)
The tech-differential textile sector will consist of specialty high tech products such
as:
· Information textiles (I-textiles)
· Transportation textiles (T-textiles)
· Special material textiles (S-textiles)
Information textiles will represent products that primarily serve the information
technology. These will include a wide range of innovations such as electronicwearable
textiles, sensory and fiber optics textiles, and electronic-support
textiles. Transportation textiles will include automobile air bags, motorcycle air
bags, engine-support textiles, transport-interiors, aircraft components and many
other transportation oriented innovations. Special material textiles will include a
very wide range of products in which light and strong fibrous materials have
competed and will continue to compete successfully against traditional heavy
metals, gravels, and traditional construction materials. In today’s market, special
material textiles exist in numerous fields and applications such as construction
and insulation textiles, geotextiles, medical textiles, reinforcements, filters, circuit
boards, beachside corrosion-prevention textiles, wind/storm breakers, combat
textiles, protective textiles, and flame-retardant textiles.
Obviously, the price-differential textile sector will always represent the largest
volume textile sector as a result of the immense consumption of traditional textile
and apparel products and the ever continuing increase in the world population.
Indeed, one can measure the rate of expansion of this sector on the basis of the
global population growth. Today, the world population is over 6 billion people.
Only 60 years ago, the world population was 2 billion people; a stunning 200%
increase. By the year 2040, the world population is expected to exceed 12 billion
people; another 100% increase.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
20
The question now is can the traditional and support sectors of the textile industry
improve their status and become a tech-differential sector? We believe that this
is very possible provided that they meet the quality-differential criteria first. In the
area of traditional textiles there are numerous R&D issues that if addressed
properly they will result in a substantial transition to the information era and will
help this sector of the industry to become a truly high-tech sector. As indicated
earlier, the previous list of R&D questions have largely been addressed; it is
simply a matter of the industry searching for the answers in research literatures.
In the information age, searching for literatures and finding the right consultants
have become effortless tasks.
The traditional textile industry can enter the information age by providing
informative products. For example, one of the major factors determining the
quality of traditional apparel textiles today is appearance, comfort and feel.
Today, these factors are being evaluated subjectively and through intimate
contact with the products. In other words, the consumer has to see, touch and
feel the material to pass judgment. In the information era, intimate shopping will
eventually give way to internet shopping. This means that textile products
advertised on the internet must be accompanied by information that largely
resemble traditional human judgment; an appearance index or comfort index.
Today, this represents an R&D challenge. However, it is only a matter of time
before this challenge is met. Eventually, the information technology will yield a
food or fabric that you can taste and feel on the computer screen, without
intimacy, using reliable measures of human sensations.
In the information age, research and development (R&D) will be used as the
principal measure of the extent of development and modernization of any country
in the world. Indeed, any approach of modernization should begin by addressing
the following basic questions:
· What is the number of scientists and engineers in R&D per Million
People? -Those are the people trained at the tertiary level to work in any
field of science or engineering who are engaged in professional R&D
activity.
· What is the number of science and engineering students?
· How many scientific and engineering journal articles produced by
the country-Published in fields such as physics, biology, chemistry,
mathematics, clinical medicine, biomedical research, engineering and
technology, and earth and space science.
· What are the expenditures for R&D as a percent of the Gross
National Income (GNI%)?-Current and capital expenditures on creative,
systematic activity that increases the stock of knowledge in areas such as
fundamental and applied research and experimental development work
leading to new materials, new transportation techniques, and new
information technologies.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
21
· How much is the high technology exports in dollar value and as a
percent of manufactured exports?- These are products with high R&D
intensity (aerospace, computers, pharmaceuticals, sensors, instruments,
and electronics).
· How much is royalty and license Fees?- These are payments and
receipts for the authorized use of intangible, nonproduced, nonfinancial
assets and proprietary rights (patents, copyright, trademarks, industrial
processes, and franchises)
· What are the number of patent applications filed?-These are
applications filed with a national patent office for exclusive rights for an
invention. A patent provides protection for the invention to the owner of the
patent for a limited period (typically 20 years).
Before a country establishes its modernization strategy, it first should address
these questions. Figures 3 through 9 provide comparisons of some countries
(well-developed, under-developed, and developing) with respect to the above
R&D parameters. The data used to develop these Figures were obtained from
the World Bank Statistics (http://www.worldbank.org/data/wdi2001/pdfs/tab5_11.pdf).
These figures are self-explanatory and we will let readers make their own
judgments on how to interpret them. Perhaps, the only point that we should add
is that modernization does not come from vacuum; it takes a great deal of R&D
effort.
In closing, science and technology represent the keys to economical
developments. An under-developed country will most likely fail the marketing
game unless it has super market alliances assisting its economical progress.
However, this country can stand alone with its people intelligence if it can
implement a true scientific and technology strategy. Countries that will fall behind
in science and technology will inevitably fall behind in global economy.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
22
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
23
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
24
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
25
INFORMATION TECHNOLOGY
The information age opens unlimited market and jobs opportunities. More
importantly, we believe that the numerous job titles that have been created
during the industrial age will all be narrowed down to three universal job
categories:
- Data manipulation and organization
- Design of digital engines and software programs to analyze the
data and to convert the data into useful information
- Information interpretation
These job categories will represent the key human functions regardless what
task is being performed and for what purpose. Any organization (including
manufacturing bases, educational institutes, R & D, health care systems, military,
etc) that is not currently aligning its service and people jobs along these three
categories will likely perform inefficiently by the new standards established in the
information age.
In his book titled “Business @ The Speed of Thought”, 1999, Bill Gates used the
word “Velocity” to characterize the essence of the information age. He said:
“….the 2000s will be about velocity. About how quickly the nature of business will
change. About how quickly business itself will be transacted. About how
information access will alter the lifetime of consumers and their expectations of
business”
Bill Gates book provides seven strategic tasks by which industries and
businesses can move effectively from the industrial age to the information age.
These tasks are summarized below.
(1) SHIFT KNOWLEDGE WORKERS INTO HIGH-LEVEL THINKING
A company's middle managers and line employees, not just its high-level
executives, need to see business data. They're the people who need precise,
actionable data because they're the ones who need to act. They need an
immediate, constant flow and rich views of the right information. Companies
should spend less time protecting financial data from employees and more time
teaching them to analyze and act on it.
In this regard, Bill Gates uses McDonald’s, the giant fast food company, as an
example. Today McDonald's information system uses PCs and Web technologies
to tally sales at all its restaurants in real time. As soon as you order two Happy
Meals, a McDonald's marketing manager will know. Rather than superficial or
anecdotal data, the marketer will have hard, factual data for tracking trends.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
26
(2) USE DIGITAL TOOLS TO ELIMINATE SINGLE-TASK JOBS
Bill Gates addresses the issue of single task jobs very eloquently. He described
how a friend of his spent 25 years at an auto plant in Flint, Mich., tacking chrome
strips and other finish parts onto automobiles. It was a good job in the years
immediately after World War II, but it followed the classic Industrial Age
approach: break a process into small, discrete tasks and assign each to one
person who does it over and over "the one best way."
In the new organization, the worker is no longer a cog in the machine but is an
intelligent part of the overall process. Having people focus on whole processes
allows them to tackle more interesting, challenging work. A one-dimensional job
(a task) can be eliminated, automated or rolled into a bigger process.
Bill Gates used General Motors example of launching the Saturn Corp. back in
1985 to create not only a brand-new car from scratch but a brand-new way of
building cars and empowering workers. Teams are tight, autonomous units. Each
team has a specific function, such as building engines or doors, and each team
member is trained to do approximately 30 different jobs in that area, so that
people don't get stale from doing repetitive tasks. Through a Web interface, the
worker can retrieve data from a database, automatically load the data into a
spreadsheet and pivot through the data to analyze it by part and type of problem.
Bill Gates adds, “Give your workers more sophisticated jobs along with better
tools, and you'll discover that your employees will become more responsible and
bring more intelligence to their work. One-dimensional, repetitive work is exactly
what computers, robots and other machines are best at-and what human workers
are poorly suited to and almost uniformly despise. In the digital age, you need to
make knowledge workers out of every employee possible.”
(3) CREATE A DIGITAL FEEDBACK LOOP
With regard to creating an effective feedback, Bill Gates uses the concept of reengineering
to demonstrate his points. Specifically, he indicated three reengineering
ideas:
· You need to step back periodically to take a hard look at your processes.
Do they solve the right problems? Can they be simplified?
· If you cut a job into too many pieces and involve too many people, nobody
can see the whole process and the work will bog down
· Too many hand-offs create too many likely points of failure
Bill Gates adds “Creating a new process is a major project. You should have a
specific definition of success, a specific beginning and end in terms of time and
tasks, intermediate milestones and a budget. The best projects are those in
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
27
which people have the customer scenario clearly in mind. That's true of process
projects too…. Digital technology makes it possible to develop much better
processes instead of being stuck with variations on the old paper processes that
give you only incremental improvements. You need to be flexible in the face of
evolving requirements. You should have a crisp decision process to evaluate
change, including a provision for re-evaluating your original project goals.”
(4) USE DIGITAL SYSTEMS TO ROUTE CUSTOMER COMPLAINTS
IMMEDIATELY
In this regards, Bill Gates states
“Listening to your customers means hearing their complaints about current
product shortcomings. But getting bad news from customers passed all the way
to the product design groups is surprisingly hard to do.”
Gates recommended the following approach:
· Focus on your most unhappy customers
· Use technology to gather rich information on their unhappy experiences
with your product and to find out what they want you to put into the
product
· Use technology to drive the news to the right people in a hurry
Gates follows up by saying:
“Companies that invest early in digital nervous systems to capture, analyze and
capitalize on customer input will differentiate themselves from competition. You
should examine customer complaints more often than company financials and
your digital systems should help you convert bad news to improved products and
services.”
(5) TRANSFORM EVERY BUSINESS PROCESS INTO JUST-IN-TIME
DELIVERY
In this regard, Bill Gates states:
“In some industries, the issue is not so much faster time to market as it is
maintaining time to market in the face of astronomically rising complexity. Intel,
for instance, has consistently had a 90-day production cycle for its chips, which
power most PCs. Intel expects to maintain this 90-day production rate despite the
increasing complexity of the microprocessor..….. Ultimately the most important
"speed" issue for companies is cultural. It's changing the perceptions within a
company about the rapidity with which everybody has to move. Everybody must
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
28
realize that if you don't meet customer demand quickly enough, without
sacrificing quality, a competitor will”
(6) USE DIGITAL DELIVERY TO ELIMINATE THE MIDDLE MAN
In this regard, Bill Gates emphasizes internet shopping and E-commerce. He
said “If you're a middleman, the Internet's promise of cheaper prices and faster
service can "disintermediate" you, eliminate your role of assisting the transaction
between the producer and the consumer…..If the Internet is about to
disintermediate you, one tack is to use the Internet to get back into the action.”
(7) USE DIGITAL TOOLS TO HELP CUSTOMERS SOLVE PROBLEMS FOR
THEMSELVES
Regarding this critical issue, Bill Gates indicates that as electronic commerce
booms, it's not just the middlemen who will find creative ways to use the Internet
to strengthen their relationships and customers. The merchants who treat ecommerce
as more than a digital cash register will do the best. Dell was one of
the first major companies to move to e-commerce. A global computer supplier
with more than $18 billion in revenue, Dell began selling its products online in
mid-1996. The company's online business quickly rose from $1 million a week to
$1 million a day. Soon it jumped to $3 million a day, then $5 million. It's now risen
to over $10 million.
Michael Dell characterizes the business today as "different combinations of faceto-
face, ear-to-ear and keyboard-to-keyboard. Each has its place. The Internet
doesn't replace people. It makes them more efficient. By moving routine
interactions to the Web and enabling customers to do some things for
themselves, we've freed up our salespeople to do more meaningful things with
customers."
“Smart companies will combine Internet services and personal contact in
programs that give their customers the benefits of both kinds of interaction. You
want to move pure transactions to the Internet, use online communication for
information sharing and routine communication, and reserve face-to-face
interaction for the activities that add the most value.”
“You know you have built an excellent digital nervous system when information
flows through your organization as quickly and naturally as thought in a human
being and when you can use technology to marshal and coordinate teams of
people as quickly as you can focus an individual on an issue. It's business at the
speed of thought.”
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
29
The seven points discussed above represent Bill Gates views of basic
requirements of an industry providing products or services in the information age.
The textile industry must take note of these points in order to operate efficiently in
this century. Time or speed is truly the most critical factor in the information era.
The difference between making and breaking a business deal can be a matter of
seconds or minutes in this information age. Customers will have minimum time to
make their purchasing decisions and suppliers must keep up with the customer
speed, or they will lose the customers. The traditional wisdom that time is money
will take on a new meaning in the new market; time is everything. Customer’s
commitment to suppliers will change around the clock, and suppliers must be
very efficient not only in responding to customer demands, but also in reading
customer’s mind. This simply means that suppliers should not wait for customers
to knock their doors; it should be the other way around.
The textile industry has achieved some significant progress in the area of
information technology both as a user of the technology and as a participant in
developing the technology. For instance, the entire U.S. cotton crop today is
being tested using automated classing and High Volume Instrument (HVI)
systems. Each of the over 20 million bales produced annually in the U.S. is bar
coded with identification number and associated fiber characteristics. Dr. El
Mogahzy, the co-author of this paper, has been a participant in this development
for the last 20 years. The traditional massive bale warehouse is now a virtual
warehouse. This is basically a large database of bale information such as bale
identification, bale physical location, and fiber attributes. The actual cotton bales
may be physically located in some concentration warehouses around the
country, and can be readily accessible by their identification numbers, location,
and fiber information. This allows textile mills to select their cotton bales with any
desired fiber characteristics from the virtual warehouse. The obvious benefits
resulting from this approach include small bale inventory in the mill (significant
reduction in storage and bale retrieval efforts), better fiber selection from
unlimited options of fiber attributes, and better bale management. This
information system, called Engineered Fiber Selection, was pioneered by Cotton
Incorporated of Cary North Carolina (see El Mogahzy and Chewning, 2001).
Some textile companies in the U.S. and Europe have used information
technology in a wide range of activities from monitoring machine performance to
forecasting market trends and sales performance. Indeed, a modern textile mill
has integrated information technology in all phases of processing.
Perhaps, the most significant achievement of information technology in the textile
industry today is the existence of some major textile organizations that do not
spin, weave or finish a piece of fabric. Instead, they use information technology
to develop exclusive access to major retailers and fashion designers and to
deliver textile products around the clock and around the world made from yarns
spun in India, woven in Egypt and finished in the U.S. These organizations may
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
30
become the biggest gainers of the benefits of information technology in the textile
global market.
In closing this section, we should point out that information technology represents
a small investment with huge economical and technological benefits. The survival
and the growth of any business in this competitive global market will be
determined by how much timely information the business has about market
needs and consumer behavior. Opportunities will not come after you, you will
have to chase them whenever and wherever they are and only information
can achieve that.
INTEGRATED COMPETITIVE QUALITY
If there is one aspect of modernization that can not be emphasized enough in
this global market, it will be quality. Over the years, the textile industry has
implemented many quality control concepts from inspection of shipped products
to statistical process control. However, the fact that textile products have been
perceived as price-differential products in the marketplace has largely limited the
ability of this industry to be quality creative. Instead, quality implementation has
often been limited to problem-solving and sometimes to offensive reaction to
customer complaints.
In today’s competitive market, an essential phase of modernization is to establish
an effective quality program. In his new book, Applied Statistics and Quality
Control for Engineers and Manufacturers, Dr. El Mogahzy wrote five lengthy
chapters in which he clearly explained how an organization can develop an
integrated quality program in the global market. The development of this program
was a result of over 30 industrial quality control applications expanded over 15
years that the author directed in different U.S. industries including the textile and
apparel industry, the pulp and paper industry, and the food industry. The program
also included many market-oriented quality techniques that were established in a
recent Ph.D. dissertation written by Dr. Kamel, the coauthor of this paper.
The Integrated Competitive Quality (ICQ) program developed by El Mogahzy is
an inclusive quality strategy that begins at the product development stage and
continues through mass manufacturing and marketing. It consists of three critical
phases (see Figure 10): (1) Quality Priority Strategy, (2) Statistical Process
Control (SPC) and (3) Quality Improvement.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
31
The key issue in developing a quality priority strategy is to realized an
organization position or status in what we call “the global competitive loop”. As
shown in Figure 11, this loop demonstrates the different forces influencing a
global competitive market. These forces include: domestic competitors,
international competitors, and many other external forces such as consumer
organizations, standard organizations, trade organizations, and major
distributors.
In a global competitive market, the meaning of quality goes beyond classic
quality definitions to reflect the need for a dynamic strive to meet competitive
challenges. Although history clearly indicates that quality has been the driving
force of any competitive market, some organizations today tend to
underemphasize this aspect on the ground that quality is not enough when
others can do the same.
• Determine the extent of process
variability using control charts
• Determine your process capability
Figure 10. Integrated Competitive Quality (ICQ) Program (El Mogahzy,2002)
Manufacturing planning
Mass manufacturing
Sales & Marketing
Competitive QI
Product QI
Value QI
Product development
Phase I: Quality Priority Strategy (QPS)
Phase II: Statistical Process Control (SPC)
• Define quality Phase III: Quality improvement (QI)
• Analyze your competitive
status
• Establish your quality
priority strategy
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
32
In a new book titled “Capturing Customer Hearts” published by Brian Clegg, the
author viewed quality as follows:
“Quality is one of those sad attributes that is a real problem if it is missing, but
isn’t feted when it’s there. If quality is absent- if you have consistently bad
products or consistently late delivery- it won’t matter how good your customer
service is, the customers will become unhappy and start looking elsewhere. But
quality alone isn’t enough to retain the customers. You need something more.”
It is our opinion that this statement provides a limited view of quality. First, the
only sad aspect of quality is when your customers do not realize it because it is
either not there or you failed to make it recognizable. Secondly, defect-free and
timely-delivery only represent two of many quality criteria of a product or service.
Yes, they are easily recognized by the customers, but they are not the only ones.
When a customer decides in favor of a particular product, he/she makes this
decision on the basis of many interactive factors that all constitute quality. These
include: the relative superiority of product characteristics and features (or relative
quality), the relative value of the product, and the relative image.
Quality is essentially a relative measure of goodness, not an absolute measure.
A consumer may be attracted to a particular product or service through heavy
promotional and advertising efforts. However, when he/she decides to purchase
a product or use a service, all factors contributing to this decision become
relative. Amateur consumers compare different products and make their
decisions strictly on comparative basis. In this regard, relative quality and relative
price (i.e. product value) are among the criteria in the minds of those consumers.
Organization
Or
Service/Product
Supplier
(Q)
Competitor C
Competitor A
Competitor B
Q
A
B
C
Consumer Standards Organizations Organizations
Major Distributors Trade Organizations
Figure 11. The Global Competitive Loop (Kamel 2001)
Consumer
$$
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
33
Highly informed consumers often make their decisions using more objective
criteria, but relativity prevails when products or services of the same category
seem to be alike.
It is our opinion that capturing customer desire to purchase a product or use a
service should primarily stem from the fundamental assumption that in this era of
information technology, consumers are becoming more and more aware of what
constitutes product or service quality. They may not be able to define quality but
they sure will know it when they see it. To make matters additionally complex for
businesses underemphasizing quality, many consumer organizations and
consumer advocates around the world continuously alert the consumers not only
of poor quality but also of the relative quality using quantitative measures (e.g.
Consumer Reports-www.consumerreports.org).
The key to a successful competitive quality strategy lies in two main factors:
· Consumer’s reception and desire of the product or service
· The ability to prolong the competitive advantage in a complex competitive
loop
In view of these two critical factors, we define quality in a global competitive
market as follows (also see Figure 12):
The quality definition proposed above clearly indicates that the essence of
competitiveness lies in the ability to attract the consumer to your side of the
competitive loop, and earn the support of the external forces applied on the loop.
The ability of an organization to capture consumer desire of purchasing its
product or using its service will depend on the extent of understanding consumer
needs and wants. Consumer experts often use the term “consumer’s behavior” to
describe these two elements. This term implies the dynamic of the needs and
wants since consumer’s behavior is likely to change over time. Typically,
QUALITY DEFINITION:
QUALITY OF CONSUMERIZATION
The extent of capturing consumer desire to purchase a product or use a
service, and maintaining the momentum of such desire until it becomes a
shopping sensation
QUALITY OF COMPETITIVE EMPOWERMENT
The extent of prolonging competitive value advantage
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
34
consumer’s behavior is revealed through market research. There are many forms
of consumer market research available today. Among the best of these forms are
those often used in Quality Function Deployment, QFD, programs [e.g. Mizuno
and Akao, 1994, Reed and Jacobs, 1993].
The extent of prolonging competitive value advantage will depend on significant
business and quality efforts. Harvard Business School researcher Michael Porter
indicated that regardless the type of product or service, and whether the
business is domestic or international, the rules of competition are embodied in
five competitive forces:
· The entry of new competitors- This necessitates some competitive
response and uses some organizational resources, thus reducing profits.
· The threat of substitutes- Viable alternatives of an organization product or
service in the marketplace can be a threat to its business and certainly to
its ability to increase price.
· The bargaining power of buyers- If customers have bargaining power, they
will use it. This will reduce profit margins and profitability.
· The bargaining power of suppliers- If an organization supplier has
bargaining power, he will use it. This will reduce profit margins and
profitability.
· The rivalry among existing competitors- The competitive pressure leads to
the need to invest in marketing, R&D, or price reductions.
Consumer
Organization
Or
Service/Product
Supplier (Q)
Competitor C
Competitor A
Competitor B
Q
A
B
C
Consumerization
Consumer Organizations
Standards Organizations
Major Distributors
Trade Organizations
Time
Competitive
Advantage
Figure 12. The Concept of Consumerization and Competitive Empowerment
Competitive
Empowerment
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
35
Another critical task of establishing a competitive quality priority strategy is to
analyze the competitive status of the organization. The question of how an
organization determines its competitive status is a complex one. Indeed, some
companies often watch their competitive status eroding in the market while top
management is struggling to figure out the reasons for such deterioration.
Determining the competitive status should be a continuous proactive approach,
not a reactive approach. In other words, organizations should always seek ways
to evaluate, maintain, and improve their competitive status.
One of the tools that can be used to determine the competitive status of an
organization is the so called “Quality Superiority Triangle” developed by Kamel
(2001). The concept of Quality Superiority Triangle was initially inspired by an
international survey of consumer needs and wants conducted by El Mogahzy et
al (1998) in which a wide range of products from textiles to automobiles were
surveyed. Many questions related to each product category were addressed.
However, the two questions that were common for all products were as follows:
These two questions follow closely the quality definition introduced earlier. The
first question addresses the consumerization aspect and the second one
evaluates the competitive empowerment.
Reviewing the answers to the above two questions revealed that there are three
common factors determining the consumerization and the competitive
empowerment of a certain product or service:
·
Image (marketability)
· Quality
· Price
The results also revealed that these three factors are not necessarily
independent. Instead, they often interact in a complex fashion. This is what
prompted the development of the Quality Superiority Triangle as discussed
below.
· What are the factors that capture your desire to purchase the
product?
· What would make you purchase products from the same supplier
repeatedly?
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
36
A “Quality Superiority Triangle”, consists of three indices (see Figure 13):
· Image (or Marketability) Index (IMI)
· Consumer Quality Index (CQI)
· Consumer Price Acceptance Index (CPAI)
The image or marketability index (IMI) implies the relative market
acknowledgment of a product or service. It is established on a scale from zero to
100. A 100% Image or Marketability index indicates that the product or service is
familiar to the vast majority of its potential consumers (maximum popularity). A
close to 0% image index implies poor or no recognition of the product or service
existence by potential consumers.
The consumer quality index (CQI) is a measure of how satisfactory the quality of
the product or service is. A value of this index of unity implies satisfying the exact
consumer’s requirements. A value greater than one means surpassing
consumer’s requirements and a value less than one indicates a shortage in
meeting these requirements.
The Consumer Price Acceptance Index (CPAI) reflects the extent of price
acceptability of a product or service by its potential consumers. Like the Image
Index, it is established on a scale from zero to 100. A 100% CPAI means that the
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
37
product or service has popular price in the marketplace. This means that the
product or service price is accepted by 100% of its potential consumers. A 0%
CPAI implies a unanimous rejection of the product or service price by its potential
consumers.
The Quality Superiority (QS) Triangle can be used in a wide range of quality
analysis from simple visualization of an organization competitive status to
sophisticated analysis of the actual rating of an organization position in the
marketplace. We will only illustrate the simple application. In this regard,
organizations offering products or services in the marketplace may be divided
into three main categories (see Figure 14): Top-Contenders, Balancers, and
Transients (or Spoilers). These categories are explained below.
· Top-Contenders: These are the organizations that enjoy high
marketability or excellent product or service image (typically, high market
growth and high market share) indicated by a high value of Image or
Marketability Index (85% or above popularity).
·
Balancers: These are organizations that have neutral image (average
market performance) as indicated by a value of Image or Marketability
Index of approximately 50%. They also maintain average values of CQI
and CPAI.
·
Transients (or Spoilers): This category of organizations has low image
rate and it is typically specialized in making or distributing economy
products or offering cheap services. They have below average values of
IMI, and CQI, but their prices are accepted by the majority of their
potential consumers who also realize that economy products do not
always have superior quality.
We should point out that the above classification only provides a broad view of
business categories. In the marketplace, the vast majority of organizations
typically fall between the Balancer and the Top Contender categories. However,
when the market is segmented by product type, geographic, and demographic
factors, any one of the three categories can prevail. We should also point out that
depending on the market competitive conditions and consumer behavior, one
category of business might convert to the other category particularly from
Transient to Balancer or from Balancer to Top-Contender. When the three
categories coexist in one market segment, the Transients typically represent a
threat to the Balancers by taking a significant portion of their customers through
distributing alike-products. This typically forces the Balancers to either reduce
their prices or move up to the Top-Contender competitive environment by
improving the value of their products or services.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
38
Any industry seeking quality-oriented modernization in a competitive global
market should begin by establishing its quality priority strategy. The concept of
the “Quality Superiority Triangle” provides analytical tools by which critical
parameters such as marketing, relative quality, and product/service value can be
interrelated. Readers interested in further details on this subject are encouraged
to refer to El Mogahzy’s book (2002) and Kamel’s thesis (2001),
In today’s global market, we see more top contenders in industrial or welldeveloped
countries than in developing countries. In addition, transients (or
spoilers) are largely concentrated in developing countries. A true fair
globalization should lead to better re-distribution of these business categories,
and an ideal globalization should result in a market that consists largely of top
contenders. We have a great hope that the whole world will become a global ship
that can only stabilize by all components in the universe, not by domination but
by harmonization. And who knows, perhaps this global ship will some day reach
the global heaven where every country is important and every human enjoys the
modal wealth status.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
39
REFRENCES AND SELECTED READINGS
· Yehia El Mogahzy, “Global Diversity Analysis” A Survey Submitted to the
Zalon E-Commerce Consultant Group” Washington DC, 1999.
· Roger Milliken, Textile Hall of Fame Acceptance Speech, September 10,
2001.
· David Hume, "Of the Balance of Trade," Essays: Moral, Political and
Literary (1777; Indianapolis: Liberty Fund, 1987), p. 309.
· Adam Smith, An Inquiry into the Nature and Causes of the Wealth of
Nations (1776; New York: Random House, 1937), p. 456.
· Microsoft® Encarta® Reference Library 2002. © 1993-2001 Microsoft
Corporation.
· Steven M. Suranovic, International Trade Theory & Policy Analysis, 1997-
2000, http://internationalecon.com
· Gordon Platt, "1998 Trade Deficit Predicted to Reach $250 Billion-The
Highest Ever," Journal of Commerce, December 4, 1997; and John
Maggs, "1997 Trade Deficit Hits 9-Year High," Journal of Commerce,
February 20, 1998.
· Christina Duff, "U.S. Trade Gap Grew 24% in December: Deficit Could
Worsen in '98 As Asia's Ills Spill Over, Some Analysts Warn," Wall Street
Journal, February 20, 1998, p. A2.
· I. M. Destler, American Trade Politics (Washington: Institute for
International Economics, 1995), pp. 91-95.
· Steve Beckman, International Union, United Automobile, Aerospace and
Agriculture Implement Workers of America, Statement before the
Subcommittee on Trade of the House Committee on Ways and Means,
September 11, 1997.
· Yehia El Mogahzy, and Charles Chewning, Jr., “Cotton Fiber To Yarn
Manufacturing Technology”, A Book Published by Cotton Incorporated,
2001.
· J. Bondurant, and Don Ethridge., Proportions of the Retail Dollar Received
by Cotton Industry Segments: Selected Consumer Goods, Proceedings of
the Cotton Beltwide Conference, 1998.
· Yehia El Mogahzy, Applied Statistics and Quality Control for Engineers
and Manufacturers: From Basic to Advanced Topis, Quality Tech Press,
2002.
· Kamel, A. M., “Pioneering Organizational Competitive Quality Strategy
through the Use of Quality Superiority Triangle”, Ph.D. thesis, Auburn
University, AL, U.S.A., 2001.
· Brian Clegg, “Capturing Customer Hearts”, Financial Times Prentice Hall,
2000.
· Mizuno, S. and Akao, Y., “QFD: The Customer-Driven Approach to Quality
Planning and Development, Asian Productivity Organization, Tokyo,
Japan, available from Quality Resources, One Water Street, White Plains
NY, 1994.
Modernizing the Textile Industry-El Mogahzy & Kamel-U.S.A
40
· Reed, B. R. and Jacobs, D. A., “Quality Function Deployment for Large
Space Systems: Guidelines for Implementation of Quality Function
Deployment (QFD) in Large Space Systems”, Prepared for NASA by Old
Dominion University, Contract No. NAS1-19859, Task 28, 1993.
· Michael Porter, “Competitive Strategy”, The Free Press, New York, 1980.
· El Mogahzy, Y. E., Edwards, J., Isaac, N., and Robert, S. “An International
Survey of Consumer Needs and Wants”, Report submitted to the Global
Cycle Consultant (GCC) Group, Washington D.C., 1998.

COPYRIGHT© 2002 BY DR. EL MOGAHZY & DR. AHMED KAMEL. U.S.A.
ALL RIGHTS RESERVED. DO NOT REPRODUCE
No part of this article may be reproduced, saved or stored in a retrieval system, translated, or
transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise without prior written permission of the authors