Improving Cost Competencies by Legalized Software in Textile Industry
Ms. Shikha Sharma
M.Sc. in Clothing and Textiles (Pursuing PhD)
It started with some simple looking fair competition-focused laws in the US states of Washington and Louisiana in 2011, but it can be rightly said that the primary law has taken the shape of a movement at various levels with a major purpose to ensure that a level playing field is provided to the manufacturers. It envisages that the companies competing at an international level follow the conditions prescribed in the law and stay away from pirated software. This restriction not only aims at providing a healthy economic landscape and build respect for property rights by eliminating unfair competition, the law also encourages a culture of innovation for the benefit of the individual as well as the society.
The textile industry in India holds a very unique position because of a major contribution of this industry in the field of employment generation, industrial production and substantial foreign exchange earnings. Currently, textile industry contributes approximately 15.9% to the country’s total export earnings, and 18% to the industrial employment. The main segments of the Indian textile industry are Man-made Textiles, cotton textiles including handlooms, silk textiles, woollen textiles, handicrafts, coir, readymade garments, and jute. Also, major work is being done in the field of technical textiles. Interestingly, textile forms about 4% and clothing forms about 3% of the total world’s exports. The industry is the second largest provider of employment after agriculture. It has the unique advantage of being a self-reliant industry, from the production of raw materials to the delivery of finished products, with a substantial value-addition at each stage of processing. Both organized and unorganized segments are major part of the textile industry, majority being those that fall in the unorganized sector. There are approximately 70 textiles and clothing clusters functioning and growing at a steady pace in the country. In this diverse industry, hand spinning and hand weaving (handloom) sector is flourishing with equal intensity to the highly mechanized and sophisticated mill sector. The de-centralized power loom / hosiery and knitting sector is a major section of the textiles industry. The competitiveness of the industry is extremely high in the spinning sector due to good technological developments and adoption of modern machineries at the right time.
Today, modern techniques, electronics and innovation have led to a competitive, low-priced textile industry offering a diversified range of products. The industry is required to be extremely competitive and a quick response time is required in order to hold its position as a supplier of textile products around the globe. The order lead time has come down tremendously with the progress in field of Information technology providing better connectivity and real time transfer of information. This technology has penetrated our lives in each field and adds effective value through efficient processes, much better control on manufacturing processes and help in facilitating healthy and sustainable growth. Various software are commonly used in all facets of the apparel industry, including back-office support, product design, production, and production management which tremendously helps to create efficiencies for manufacturers. However, information technology companies in the United States are concerned regarding the prevalence of pirated software in the apparel industry as it distorts the market and undermines legitimate competition.
In this highly competitive scenario across the globe where profit margins are drastically low and risk involved in every business has increased substantially, it is a common view that the apparel manufacturers who have not paid proper software licensing fees have a significant cost advantage in the low-margin business of apparel manufacturing, shipment and sales. This sentiment has been the motivating factor for re evaluation of the existing anti piracy and unfair competition laws in The United States. The early results can lead to a more powerful law that can impose upon the manufacturing companies to adopt the use of licensed software for efficient functioning and a misuse can be prevented. Those who are proposing these new laws are of a strong view that companies which make use of pirated software have a very clear cost advantage and this advantage can easily fall under the bracket of unfair competition. It is important that any Indian manufacturer that sells in the United States is aware of the intricacies involved in this law as well as potential implications of non adoption of the required criteria.
The revised Washington UCL creates the potential for liability not only for the companies that misappropriate proprietary IT and incorporate that IT into their products but also any lapse on the part of the supply chain is also held liable. This is of crucial importance for the Indian manufacturer where outsourcing a job is a common practice. A plaintiff must be a competitor of the direct violator that manufactures products that are in direct competition with the products alleged to have used misappropriated IT. The UCL requires the plaintiff to provide notice to the alleged direct violator and afford that violator an opportunity to cure the violation—such as by agreeing to appropriate licenses.
According to Mr Manish, Senior manager, SGS India, an international company providing compliance certification in field of environment and social audits “Getting companies agreeing to accept the requirement of transition to opting for a legitimate IT product when such a vast range of counterfeit products are so easily available could be a challenge initially. However looking at the advantages it offers, if the Indian manufacturers want to be globally competitive, they should go for this transition at a very early stage. A fair ground for competition is always beneficial for the growth of companies and steps should be taken by the manufacturers to review the software being used in their supply chain so that any risk arising out of non compliance can be avoided,” he said.
This law should be viewed with optimism and Indian manufacturers should grab this opportunity to increase their global competitiveness as it provides India with a possibility to compete much better in the world market by being a compliant nation while ensuring the overall growth and wellbeing of the domestic economy. It only goes to follow that if we were to comply rapidly –this enforcement will give us the opportunity to compete effectively against other developing economies and allow us to command a higher share of the global export pie. However a disruption in the form of lack of compliance will clearly damage our chances in the world market scenario.
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Founder & Editor of Textile Learner. He is a Textile Consultant, Blogger & Entrepreneur. He is working as a textile consultant in several local and international companies. He is also a contributor of Wikipedia.