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Colombo
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Factory
Improvement Programme (FIP)
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Introduction
The International Labour Organisation’s (ILO) Factory
Improvement Programme (FIP) is a multi-supplier training programme
for the development of local factories' capacity in industrial
relations, health and safety and working conditions, linking
to areas of productivity and quality. The programme involves
groups of six or more factories for a ten to twelve month training
and factory-level consulting / improvement programme. Two-day
training sessions for each module are followed by factory visits
and consulting in the specific needs of individual factories,
resource persons being both international and national Experts.
The FIP is funded by the US Department of Labor (USDOL) with
follow-up activities funded by the Swiss State Secretariat for
Economic Affairs (SECO). Commencing in 2002, two rounds of FIP
with a total of 20 factories have been completed in Sri Lanka
in the apparel sector. A programme for 12 factories is being
run in Vietnam (multi sector) with a start up shortly planned
in India. An FIP approach has also been implemented in Cambodia
for 08 factories. The current six module programme in Sri Lanka
is being conducted for 09 apparel manufacturing companies.
The ILOs Director in Sri Lanka, Ms Claudia Coenjaerts accepted
the challenge to run the first FIP at which instance a pilot
project was conducted and the results thereof were extremely
rewarding. The ILO FIP is being implemented for a 3rd consecutive
round in Sri Lanka with the Employers’ Federation of Ceylon
(EFC) having undertaken the role as the implementing agency
and the Joint Apparel Associations Forum (JAAF) as a collaborating
partner.
An Apex/Advisory Committee meet on a regular basis to review
the progress of the programme and suggest improvements. The
committee comprises of officials of the ILO, EFC, JAAF, Trade
Unions, Department of Labour and the Board of Investment. Representatives
also participate in training sessions. There are many EPZ factories
participating.
The current programme FIP3 was publicly launched in January
2005, commenced in April 2005 and is scheduled to run until
March 2006 and is managed by Mr Jayantha R de Silva –
ILO / FIP Regional Specialist (Asia) and supported by highly
experienced ILO National Programme Managers – Ms Roshami
de Silva and Mr Rienzie Diaz with the initiator of the FIP concept
Mr Charles Bodwell – ILO / Chief Technical Advisor, based
in Thailand. The FIP website: www.ilofip.org
The result driven success of the previous FIPs has championed
the case for introducing the programme in other industries /
sectors and is being planned by the ILO and the EFC. Interested
companies are requested to get in touch with the above organizations.
The Aim of the Programme & Modules
The ILO Management and Corporate Citizenship Programme established
a multi-supplier training programme for the development of local
managers' capacity in the areas covered by the ILO Declaration
on Fundamental Principles and Rights at Work as well as quality
and productivity – supporting the business case for good
labour practices at factory level.
This multi-supplier Programme aims to assist factories to adopt
productive techniques to enhance competitiveness and bottom
line results, to meet national standards in respect of worker
rights substantiating a good business practice for and a requirement
in today’s competitive markets and the requirements of
multinational brands by complying with their codes. Importantly,
a key objective is to ensure that the workers benefit from decent
work practices in a healthier working environment and are considered
as an integral resource of the composition of a factory, striving
to eliminate discrimination and providing equal opportunities
to all workers is both fair and better for the bottom line and
also grasping the realities of good CSR / corporate governance.
The ILO Director Ms Claudia Coenjaerts had previously stated
that, "One of the cornerstones of our convictions is that
economic and social needs must be balanced. We believe that
can be done through what we have coined "decent work".
Labour markets do not function in the same way as markets for
services and goods do. Labour markets are about people. Profits
can only be sustained if the human component is also effectively
addressed".
Facing reality – emerging at the dawn of 2005 was the
quota free era with many unknown and complex challenges. Companies
are now competing Globally with thousands of apparel manufacturers
striving to be considered a favoured supplier in a world of
fewer buyers and still fewer leading Brands that will compete
relentlessly amongst themselves to gain ‘top of the mind’
customer attention.
Due to this, Sri Lanka as a nation faces strong challenges from
China, India and other apparel manufacturing countries in South
and South East Asia. Thus, nationally meeting product quality,
delivery and stringent compliances are crucial. Efficient, systemized,
and safe companies with an enlightened and committed work force
will stand to gain over the long term.
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The
current FIP model comprises of six individual modules
(Continuous improvement, Quality improvements, Workplace
cooperation and social dialogue, Productivity enhancement,
Human resources management / development and Occupational
safety and health) seemed together with the thread of
Continuous Improvement and Social Dialogue to deliver
a holistic programme to participating companies. |
Modules commence with two day residential seminars being conducted
for senior managers of the participant factories with worker
involved programmes and briefings in each module taking place
on individual Factory visits weekly. This project has adopted
a very intensive action driven approach thereby achieving tangible
results in terms of a high visual impact complimented by bottom
line improvements and importantly, a high degree of worker involvement.
Benefits / Results of Participant Companies
Benefits that accrued through this approach are many and indicated
are some important gains which are – management level
meetings being held on a regular basis to discuss issues / improvements,
supervisory staff meet with floor level staff on a daily / weekly
basis, workers freely express needs / issues to supervisors
/ executives, workers involved in problem solving, increased
teamwork and togetherness amongst workers and executives, suggestion
box scheme implemented, procedurised and practiced, health and
safety improvements made to ensure safer working conditions
/ environment, Recruitment and Grievance procedures developed
and implemented, increased awareness on discrimination and gender
issues, increase in recruitment of differently abled persons,
increased care for expectant female workers, participant factories
sharing best practices with each other, ability to spread the
learning and knowledge to sister factories and Brands paying
greater emphasis to working with factories involved in the ILO
- FIP.
Varied
quantifiable improvements were evident in the likes of - increase
in quality through reduction in defects – 25% (re-work
and rejects), improvement in productivity (cutting and sewing
to packing efficiencies - 20%), decrease in labour turnover
per month and average absenteeism - 4%, employee concerns
being continuously monitored and addressed, increase in sample
turnaround time – 30%, an improvement in the manpower
to machines ratio, and cost per minute monitoring. Net gains
in some enterprises exceeded USD 20,000 per month.
Benefits to Factories from participation will include;
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Increased
competitive position of the participating factories, |
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Better
trained managers in leading edge practices, |
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Increased
productivity and systemized flow, |
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Fewer
quality defects and rejects, |
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Improved
material and machine utilization, |
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Lower
labour turnover and absenteeism, |
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CI
/ kaizen teams for problem solving, |
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Improved
men : machine ratio, |
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Greater
acceptance from Brands, |
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Organisation
re-structuring / process engineering, |
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Reduction
in Overhead costs, ? Achievable monthly gain of US $ 20,000 |
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Reduction
in Cost per Minute, |
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Procedure
and systems driven company, |
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Participative
worker – management techniques, |
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Conducive
workplace cooperation |
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More
committed workforce, |
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Improved
HR and Safety practices, |
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Better
capacity to meet buyer code of conduct requirements, |
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Compliance
with National labour law requirements, as demanded by
buyers / brands. |
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A
key criterion for selection of factories was the absolute
commitment of the MD / CEO and the senior management team.
Official Research & Reports
At the conclusion of FIP 1 in March 2003, an evaluation was
carried out by the Donor (USDOL), ILO and an Industry Expert.
In September ’04 a research / review by an independent
researcher from the Institute of Development Studies –
UK, was commissioned by Mr Bodwell, ILO CTA for FIP. The companies
researched and personnel interviewed were very positive claiming
results and long term benefits that had accrued.
Based on the findings, improvements were made to the FIP3
and there is greater focus in management – worker interactions
leading to cross-functional cross-hierarchical and gender
balanced teams being made up to carry out the ‘Projects’
that have been designed in the modules. CI and QI have in
its design 70 and 41 projects respectively from which participant
factories select based on their individual needs and importance
and thus far there have been some positive results to varying
degrees.
Press Releases
The local press has carried many articles on the FIP through
out the period of implementation and the National TV (Sri
Lanka Rupavahini Corporation) also featured the FIP 3 in its
news bulletin on the 2nd of May 2005.
Jayantha R de Silva
ILO / FIP– Regional Specialist, Manager Sri Lanka
19th June 2005.
Photo Gallery
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