:: Factory Improvement Programme (FIP)
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,
Better trained managers in leading edge practices,
Increased productivity and systemized flow,
Fewer quality defects and rejects,
Improved material and machine utilization,
Lower labour turnover and absenteeism,
CI / kaizen teams for problem solving,
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Improved men : machine ratio,
Greater acceptance from Brands,
Organisation re-structuring / process engineering,
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Reduction in Overhead costs, ? Achievable monthly gain of US $ 20,000
Reduction in Cost per Minute,
Procedure and systems driven company,
Participative worker – management techniques,
Conducive workplace cooperation
More committed workforce,
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.
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.