Mr CK Sun, managing director Thai Garment Export

Thai Garment Export Co Ltd is Thailand's largest clothing producer. It turns over an FOB value of US$170 million a year and employs 9,500 people. It is a wholly-owned subsidiary of the Hong Kong based TAL Group, which is in turn is one of the largest clothing producers in the world. Niki Tait talks with managing director Mr CK Sun.

Thai Garment Export Co Ltd produces a wide range of products although blouses account for the largest turnover in terms of sales value, and cut-and-sew knits in terms of production volume.

Annual output amounts to 100,000 dozen shirts, 320,000 dozen blouses, 420,000 dozen cut and sew circular knit products, mainly polo shirts, 150,000 dozen trousers, 120,000 dozen pieces of outerwear and 100,000 men's suits.

100 per cent of production is exported: 80 per cent to the USA, 13 per cent to Asia (mainly Japan), and 7 per cent to Europe (mainly the UK). Key American customers are JC Penney, LL Bean, Lands' End, Talbot, Nike, Dillards, Nordstrom and Ashworth. Japanese customers include Uniqlo and Sanyo Shokai, while the main UK customer is Debenhams.

Thai Garment Export was set up in 1967 by TAL to produce men's sports and dress shirts. It gradually expanded into cut-and-sew knits and then trousers. A further company, Mandarin Clothing, was established in 1989 to make suits for the Asian market, although this now operates as part of Thai Garment Export.

Thai Garment Export was TAL's second overseas company after ITT Textile Manufacturing Co Ltd in Taiwan. It is also the largest of TAL's manufacturing units and accounts for the production of 38 per cent of TAL's total sales.

China is the second largest, accounting for the production of 30 per cent of TAL's total sales. Other TAL units are situated in Hong Kong, Malaysia, Indonesia and Mexico.

Manufacturing units

Thai Garment Exports has five manufacturing units, all in Thailand. The TG 1/3 unit is situated at Omnoi, Samutsakom in the outskirts of Bangkok and employs 3600 people.

TG 2 and 4 are located at Pakkred, Nondhaduri, also in the outskirts of Bangkok, employing 2900 people between them. TG5 is located at Srimahaphot Prachinburi, approximately 160 kilometres north east of Bangkok and employs 2000 people. Mandarin Clothing, the suit factory, is also situated at Pakkred, Nondhaduri and has 1000 workers.

When TAL began manufacturing in Thailand, labour was cheap and plentiful. Today, however, good workers are increasingly difficult to recruit and the price pressure has increased considerably from lower labour cost countries such as Cambodia, China, India, Indonesia, Sri Lanka and Vietnam.

To remain competitive therefore it is imperative the factories are well managed, well engineered and highly productive.

Within the organisation each country and factory specialises in particular products for particular customers, with TAL looking for the highest quality balanced by lowest cost at each location.

Online ordering

The Eton UPS system in use at Thai Garment Export, TG5 factory

Apart from mainstream mass production, Thai Garment Export also produces made-to-measure trousers for orders received over the Internet by JC Penney and Lands' End. The customer logs on to the appropriate website, selects the garment, answers a brief set of questions on colour, features, and fit, and specifies the quantity.

The order is then automatically passed through a third party software program called Archetype, which provides information to enable the appropriate pattern pieces for the garment to be selected and modified according to the online questionnaire.

This information, in turn, is automatically fed to the Gerber Technology MTM CAD package which makes these changes and produces the marker. The fabric is cut using a Gerber single ply cutter. The garment is then made up in specially developed multi-skilled production teams situated in the Srimahaphot factory and air freighted by Fed Ex direct to the customer's home.

The made-to-measure business started two years ago and currently accounts for 2 per cent of Thai Garment Export's business in terms of volume, and 3 per cent in terms of sales value. It is a side of the business likely to expand with a third major customer about to offer the service to the public.

It is also hoped that Mandarin Clothing will soon be able to offer a made-to-measure suit service to its customers, and Thai Garment Exports is currently looking at the best way this service could be carried out within the factory.

Made-to-measure dress shirts are produced for Brooks Brothers of America by TAL in one of its Malaysian factories.

No other company in Asia is thought to offer this made-to-measure production service to the US market.

The distance to America has not proved a problem using business-to-business Internet software and air freight. Indeed, the lead times from order entry to customer delivery are said to be quicker than those offered by companies in South and Central America who provide a similar service.

Thai Garment Exports also offers a quick response service to its many of its customers, ensuring orders are produced within one week of receipt. Small multi-skilled production teams are used to provide this service.

Special treatments

Embroidery at Thai Garment Export's TG1 factory

Many of Thai Garment Exports' garments undergo special treatments. For example, 50 per cent of its shirts and blouses and 55-60 per cent of circular knit production are treated with SofTAL, a TAL patented easy-care, non-iron finish for 100 per cent natural fibres.

15 per cent of trouser production also undergoes SofTAL finishing, as does 10 per cent of jackets, though these are also treated with a Teflon finish to make them more waterproof.

Thai Garment Exports operates garment dyeing facilities for woven tops, knits and trousers. The garments are made up in the greige state fabric in any of the production units and then sent to a central dyeing facility at TG5. Direct, reactive and sulphur dyeing are all carried out. Most of the special finishes are also carried out at TG5 though there is also a garment wash and dipping facility for blouses at TG1.

In addition to a range of special finishes and production services, the company offers a variety of additional services. These include cross docking, where finished goods are packed on an individual store basis and sent to a customer's central distribution centre from where they are immediately re-dispatched unopened to the stores.

For certain customers such as JC Penney in the USA, Thai Garment Exports provides a stock replenishment system for certain basic styles. There is a direct link between the customer's computer systems and Thai Garment Exports which enables it to monitor minimum and maximum stock levels in each store, and produce the necessary orders to ensure sufficient store stock.

The individual orders are then amalgamated into a production order, manufactured using the quick response production units, and despatched to the individual stores using the cross docking facilities.

Embroidery at Thai Garment Export's TG1 factory

To provide this service Thai Garment Exports also works closely with the fabric suppliers, operating its own stock replenishment system on fabric stocks.

In terms of future strategy, managing director Mr CK Sun says the company will continue to focus on customer service, quick response, and completing orders and deliveries on time and to consistent quality levels.

He adds: "We will continuously strive to reduce costs to be more competitive. There is a limit to the effect one can have on efficiency levels; the main aim is to reduce the standard minute values and eliminate all non-value added aspects of production and throughout the business.

"Certainly for the foreseeable future both Thai Garment Exports and TAL will concentrate 100 per cent on their core business of garment manufacturing. No verticality is envisaged.

"Nor are there any plans at Thai Garment Exports to diversify the product range further. The company is going to concentrate on what it knows best and will strive to remain as competitive and innovative as possible in those areas."

Niki Tait, C.Text FTI, FCFI heads Apparel Solutions, (www.apparelsolutions.co.uk) which provides independent assistance to the apparel industry in the areas of manufacturing methods, industrial engineering, information technology, and quick response.