The Reasons for Struggle of Spinning Mills
The spinning industry in Tamil Nadu, once a thriving sector, has faced significant challenges leading to the closure of many units. Several factors have contributed to these failures. We can analyze the topic in depth to find positive measures to run your spinning mills profitably. Industrial failures are commonly categorized into two groups as follows
- External Impacts
- Internal Failures
Now we can see the external Impacts that are affecting the spinning industry.
Raw Material
Natural and synthetic fibers serve as the primary raw materials in spinning mills. Typically, the production of these products depends on factors such as machinery setup, technical feasibility, and market demands. Throughout most months of the year, both natural and synthetic fibers experience significant buying pressure. However, spinners often find that quality, quantity, and financial aspects are beyond their control. Then Spinning mills in Tamil Nadu face increased transportation costs because they are sourcing natural fibers from distant states. Additionally, due to buying demand and higher fiber prices, Ginners from some places are mixing sub-standard fibers with regular fiber bales.
Power Cost
Due to the competition in the market, a situation has arisen where spinning mills can only keep their mills running by reducing their cost of production. In spinning mills, electricity costs rank as the second largest expense after raw materials. Plants are therefore forced to reduce their electricity costs by producing their own power or by getting it from external providers such as wind, thermal or solar energy. This approach can significantly reduce production costs. However, only a limited number of plants have these facilities. Other spinning mills without this facility have to face constant losses
Labour Cost
In middle-aged mills, the labour cost per kilogram ranges from fifteen to twenty rupees. In contrast, the labour cost per kilogram in ultra-modern mills is below ten rupees only. This saving is due to quality raw materials, automated machinery, advanced production equipment, and skill development programs for their workforce. Consequently, these mills can price their products more competitively than normal mills.
Market strategy
The global recession affecting all textile sectors has led to a persistent perception of oversupply in manufacturing. Additionally, Since traders are getting yarns and fabrics at lower prices from some foreign countries, they purchasing it through legal and illegal channels. because of this, the spinning mills here are facing huge losses.
Environmental Regulations and Government Policies
Due to differences in taxes, subsidies, interest rates, power costs, government regulations, and labor costs among the states, spinning mills in certain regions are struggling today.
I trust that all the normal spinners are satisfied with the above. Yes, those are merely justifications only! However, in a more positive light, instead of getting caught up in justifying and feeling frustrated about the challenges you face, focus on analyzing and overcoming your internal shortcomings. If you change your attitude and approaches, Surely you can promote your company to the next level.
Before talking about internal failures, let me ask you a question. What are the possible causes of a large ship sinking at sea?
A ship can sink due to a big storm, a big wave, an attack by a giant whale or hitting a big rock. At the same time, even a small hole in the ship can cause the ship to sink into the sea. Likewise, if a firm fails due to an external disturbance, the disturbance only needs to be large. However, even a small disturbance within the organization can destroy the entire organization.
Ok, we can see the reasons for internal failures one by one
Machinery Modernization
Before replacing any existing machinery or components, ensure that you have utilized them to their fullest potential, both qualitatively and quantitatively. The modernization will be carried out only after review the above aspects.
Raw Material
Don’t try to compromise on raw material quality for reducing raw material cost. If low-grade raw material saves you money at purchase, it will incur more manufacturing costs and fail in consistency of product quality. If good raw material is not properly handled, the company will face financial losses.
Manufacturing Cost
If production cost increases in a plant may be due to low production or overuse of electricity, labor, and packing materials, instead of comparing them to other plants or to industry research data, set goals and plan to reduce those costs through a systematic approach.
Administration
The leader in an administration should work for results. He should guide the team members and let them achieve high targets. At any cost, the leader should not run the organization ‘as a single-man show’
Market
Prioritizing customer relationships is crucial across all industries, so focus on fulfilling their needs regarding product quality and consistency. To maintain enthusiasm for innovative products, engage with customers regularly at their locations. Additionally, creating innovative or value-added products does not always require advanced machinery; you can even produce some products using your current equipment!
Conclusion
To overcome the Industrial crisis, the investor should establish a team and guide them for all process. Furthermore, the investor should oversee the process of raw material procurement, manufacturing, and marketing using effective systems and approaches. Nowadays, the world has all the necessary data and tools for success in life and industry. This is the way to run your company successfully!
