New direction for a Sri Lankan apparel venture: chasing a capitalist or cooperative dream

ABSTRACT

Southern Garments, an apparel manufacturing start-up in Sri Lanka was launched by industry veteran Nuwan Perera with the dream of creating something of his own. The entrepreneurial zeal with which Nuwan started has begun to wane. Unplanned expansion and lack of focus have led to operational issues of efficiency and quality which hamper customer retention. Cash flow problems result in a situation whereby the entrepreneur and his enterprise are barely surviving on a month-to-month basis. Running out of options, the fledgling entrepreneur must revive his start-up. Nuwan sees four choices: focus as a subcontractor, eye the export market, compete in the domestic market, or transform his business model. The case study provides opportunity for student or practitioner to immerse oneself in the issues confronted by new ventures specifically in the context of an emerging market and learn how to make strategic choices that enable an enterprise to prosper and grow.

KEYWORDS:

• Start-up venture
• nascent entrepreneur
• strategic direction
• apparel and textile industry
• emerging market
• sharing economy

Introduction

It was the end of another busy month at Southern Garments, a small to mid-sized apparel manufacturing company in the district of Kalutara, Sri Lanka.¹ For Nuwan Perera, month ends were a dreaded time, always associated with stress and anxiety. In what appeared to have become a customary practice, Nuwan, the founder and managing director of Southern Garments headed over to his accountant’s office and in an uneasy tone inquired ‘What is the number this month?’ What Nuwan was referring to was Southern Garment’s payroll for that month, which was by far the firm’s largest expense – approximately 85% (see Exhibit 1). During some months, Nuwan had hardly enough to pay his nearly 150 employees which would trigger a panic-stricken hunt for funds. In the past, Nuwan resorted to bank loans, private loans and desperate pleas to clients for early payment. Through some stroke of luck or heroic last-ditch effort Nuwan had always been able to deliver. But in the back of his mind, he was apprehensive that a time would come when he would run out of options.

Exhibit 1. Southern Garments Income Statement 2019–2020.

INCOME		LKR^1
	Sales	36,793,800
	Other Income	218,000
Total Income		37,011,800
EXPENSE
	Payroll	32,643,360
	Managing Director Withdrawal^2	1500,000
	Utilities	1354,800
	Material & Factory Overheads	1174,560
	Administration Expenses	845,400
	Bank Loan Repayments	528,000
Total Expenses		38,046,120
Net Income		−1034,320

¹ LKR (Sri Lankan Rupee): 1 USD = 184.2 LKR; 1 AUD = 131.6; 1 GBR = 240.9; 1 EUR = 218.6.

² Salary withdrawn by Nuwan Perera as Managing Director.

This month, however, Southern Garments would have no trouble meeting all their expenses. As he concluded his meeting, he confessed to his accountant ‘I can sleep tonight. Till next month my friend!’ Since founding his apparel venture two years ago, Nuwan had endured some of the toughest times of his life – facing unprecedented challenges and endless obstacles. Compared to other hurdles, his month-end ordeals were far less severe in magnitude. Nevertheless, they served as a constant reminder of the perils of small businesses and gradually planted seeds of doubt in his mind. During these difficult times, he questioned himself on whether he made the right choice starting a new venture, or whether he would have been better off working for someone else. While starting and running a business was a challenging endeavour anywhere in the world, it was even more daunting in an emerging country like Sri Lanka which provided very little cultural and institutional support for entrepreneurs. Like many entrepreneurs in Sri Lanka, Nuwan had built the company by himself and was solely responsible for ‘strategizing and day to day running.’

At the end of the workday, Nuwan hopped onto his motorbike to head home. As he started the engine he mused ‘being a one-man show has major drawbacks; the trials and tribulations of this business are sapping all my physical and mental reserves.’ From time to time Nuwan considered exiting the business, however, his attachment to his venture and bond with his employees prompted him to persist. Zipping by buses and trucks with lush greenery waving in the ocean breeze, he wondered what he could do to turn things around. As he arrived at his destination, he paused for a minute and had an inner monologue ‘I don’t want to quit, but at the same time, I can’t continue operating the way I am.’ Southern Garments primarily functioned as a subcontractor for large-scale export-oriented apparel companies. Southern Garments’ survivability and growth prospects were reliant on a few others. Nuwan contemplated a new strategic direction to revive the future of the company.

Apparel manufacturing in Sri Lanka

The tropical island nation of Sri Lanka lay off the southern tip of India in South Asia. With a rich history spanning over 3000 years, the island formerly known as Ceylon was under Portuguese and Dutch rule after the sixteenth century, followed by the British until 1948 when it gained independence. Sri Lanka’s population of 21.7 million was multi-ethnic, and the island was home to many cultures and languages. The country suffered from a 30-year civil war, which officially ended in 2009. Buoyed by post war optimism, Sri Lanka’s economy surged ahead from 2009 onwards (Mirza, 2017). An economy worth $88.9 billion,² Sri Lanka grew at an average pace of 5.6% per year during the 2010–2019 period (World Bank, 2020). Due to political problems, ethnic conflicts and the April 2019 terrorist attacks, the country’s growth has slowed down recently (World Bank, 2020). Sri Lanka was a lower-middle-income country before it ‘graduated’ to become an upper-middle income country in 2018; in 2019 it reverted to being a lower-middle-income country (World Bank, 2020). The Sri Lankan economy was transitioning from a primarily rural-based economy towards an urbanized economy based on manufacturing and services (Athukorala et al., 2017).

The Sri Lankan apparel industry was one of the most significant contributors to the country’s economy and the primary foreign exchange earner. The industry earned $5 billion export revenue in 2018 contributing 44% of the country’s national exports (BOI Sri Lanka, 2019). The apparel industry employed more than 990,000 people which was approximately 15% of the country’s total workforce. The USA (46%), UK (14%) and EU (22%) were the largest markets for Sri Lankan apparel. Well-known global names like Banana Republic, Ralph Lauren, H&M, Triumph, GAP and Victoria’s Secret were amongst brands that sourced their products from Sri Lanka (BOI Sri Lanka, 2019).

Although Sri Lanka’s apparel industry had grown steadily since the 1980s, it had suffered severe setbacks over the past two decades. The phasing out of the Multi Fibre Agreement under WTO from 2005 hit Sri Lanka’s apparel industry hard owing to its lower competitiveness in comparison to other regional players (Tilakaratne, 2006). In 2010, the European Union (EU) suspended Sri Lanka’s GSP+ status (later regained in 2017) which was designed to remove import duties from products coming to the EU from vulnerable developing countries. Over time Sri Lanka also lost its cost advantage to other Asian competitors such as Bangladesh and Vietnam.

Sri Lanka’s apparel industry also faced a chronic labour shortage due to dwindling interest amongst youth and women who comprised much of this workforce. Naturally, as the island nation pushed forward as a middle-income country, the career aspirations of youth were changing. Sri Lanka witnessed an occupational shift that saw greater interest in service sectors such as retail and tourism. In the wake of all these challenges, several hundred apparel firms had already ceased their operations with many more expected to follow (Perera, 2009). Those that survived, particularly the larger companies shifted from the traditional low-cost competitive model to one which provided sophisticated solutions including design, R&D, and innovation. These firms adopted a niche focus, and emphasized design-intensive, value-added garments particularly women’s lingerie and swimwear (World Bank, 2016). Many of the larger firms also expanded their operations overseas to avail lower-cost labour and trade-related incentives elsewhere.

The 2020 COVID-19 pandemic had also taken a toll on Sri Lanka’s textile and clothing sector. With a slowdown in global demand, exports were forecasted to plummet 30% in 2021 (Rodrigo, 2020). Although most factories reopened soon after shutting down in response to COVID-19, restrictions imposed by the government including curfews, social distancing at workplaces limited attendance and overall capacity. The pandemic however was a double-edged sword for the Sri Lankan apparel industry presenting it with some real opportunities. It did not take long for the industry to start responding to orders to produce personal protective equipment (PPE). Rigid regulations coupled with high testing had successfully curtailed the coronavirus pandemic in the island nation. In fact, Sri Lanka had fared much better compared to most other countries in the region (TRT World, 2020). As the pandemic surged in other garment-producing nations, Sri Lanka was in an advantageous position as markets started to stabilize.

The small and medium-sized apparel firms also altered their business models. Although the vast majority of apparel firms in Sri Lanka fell in the SME category, they only contributed 15% of the country’s total exports (BOI Sri Lanka, 2019). Many of these SME apparel firms undertook subcontract orders for the larger firms. In these subcontract orders, the smaller firms typically sewed specific components of the garment which were then assembled at the main issuing plant. This form of cooperation was mutually beneficial. Larger firms were able to optimize their workload and have greater flexibility by delegating a part of the production process to their smaller counterparts. This was a convenient way for large firms to increase their production capacity without having to hire new employees or allocate overtime hours.³ This model was also useful for large firms during seasonal periods. As it was notoriously challenging for firms to lay off employees in Sri Lanka, it was more prudent to use external vendors to address peak demand as opposed to hiring additional employees who would be considered excess capacity during off peak periods. Subcontracting was welcomed by SMEs as by themselves they were unable to fulfil the requirements of foreign buyers.

Some smaller apparel firms pivoted to meet the needs of the burgeoning domestic market. Sri Lanka’s domestic apparel market was estimated at $2 billion (LBO, 2014). While this growing market was considered a lucrative opportunity, much of the local demand was met by cheaper imports from other South Asian countries. Some apparel firms began developing their own brands which were then retailed across the country through departmental store chains. Other firms decided to focus solely on manufacturing whereby they would carry out the contract manufacturing for domestic brands or private label brands of departmental store chains.

Company background

Barely three years ago, Nuwan Perera was a factory manager of a renowned shirt making company in Sri Lanka. After graduating from high school, Nuwan joined an apparel firm as a merchandizer and gradually worked his way up. His experiences across several companies and in different capacities acquainted him most aspects of running an apparel firm from sourcing to design to production. After many years in the industry, Nuwan sought a change of scenery. He shared, ‘Having spent nearly two decades in the industry, I was disillusioned with life and I wanted to do something on my own.’

After contemplating on the decision for long, Nuwan’s moment of entrepreneurial seizure finally arrived. The fledgling entrepreneur amalgamated his start-up funds through personal savings and loans from family members. Nuwan already possessed ancestral land in the southern district of Kalutara, which was advantageous in multiple ways. First, it saved him the cost to rent premises, also allowing him to gradually expand as required. Second, as the location was far from urban settings⁴ and of close proximity to villages, he did not face any challenge attracting labour. Nuwan also managed to persuade a few key personnel from his previous employer to join him in his new venture as paid employees. Nuwan’s initial investment included renovating the small shed in his land, and procurement of machinery and supplies. As many factories in Sri Lanka were shutting down, he was able to purchase large lots of machinery well below market price.

Nuwan often reminisced about how he started the business ‘I capitalized on my contacts, and reputation to obtain the first few orders. Having been in the industry for long, I had extensive connections and relationships with key decision makers in large apparel firms. Having already earned their trust through prior work, I was able to convince them to allocate some subcontract orders.’ Initially Southern Garments was assigned intermittent orders, which primarily involved sewing of components. The ad-hoc nature of those orders kept Nuwan uncertain and on edge. As such he aimed at establishing a large portfolio of clients to ensure he had adequate business to fulfil his monthly obligations. Much of his time was spent travelling and prospecting for business. In his mind the more leads he had, the safer his business would be. To Nuwan and his managers it was all a game of numbers, developing capacity, fulfilling capacity and meeting financial obligations to keep the venture afloat.

Nuwan’s expertise lay in woven shirts, and it was in this segment that he aspired to establish himself. However, barely a few months into the business, his vision had taken a back seat. Under pressure to ‘achieve the numbers’ he sought out any type of order even if it meant that he had to venture out of his comfort zone into other product categories such as knitwear and trousers. Initially his goal was to work with larger export-oriented apparel companies with whom there was sufficient order volume and greater potential for continuity. Here too, Nuwan veered into a new direction by catering to mid-sized domestic companies. These domestic orders were much smaller, consisted of a wider merchandising mix with fewer quantities in each stock keeping unit (SKU). Nuwan saw these orders as mere stop-gap measures to fill idle capacity and pay bills.

Current challenges of Southern Garments

While Southern Garments was plagued by a myriad of operational issues, its main challenges were broadly grouped into three areas. The first challenge arose from the company’s inability to effectively balance demand and supply. Being a small player and facing intense competition, Southern Garments had limited bargaining power. On many occasions, Nuwan overpromised clients on order volumes and delivery timelines. Nuwan defended his decisions, ‘I sometimes say yes to a client without thinking too much about the consequences. I need the business, and there are many others willing to take the order if I say no.’ In order to fulfil orders within unrealistic deadlines, Nuwan was compelled to hire new personnel. The trouble usually began after the completion of such orders. Given the intermittent nature of orders, Southern Garments inadvertently faced lull periods where the company had unutilized capacity. To fill such unused capacity, Nuwan desperately hunted for more orders. Some of these newer orders required him to hire even more workers. At the end, Southern Garments was left with an even greater surplus capacity (see Exhibit 2 for current list of employees at Southern Garments). It was a never-ending cycle of disorganized and ad hoc hiring which left the firm bloated with excess personnel. Nuwan explained his predicament ‘If I don’t hire to increase my capacity, I am not able to convince clients or deliver on time.’ This not only took a toll on the company’s bottom line but also reduced its operating efficiency. A factory supervisor frequently complained ‘Idle time is never good as inertia sets in. Labour productivity is hard to recuperate once normalcy resumes.’ See Exhibit 3 for typical production flow for manufacturing of dress shirts.

Exhibit 2. Present organization list of personnel.

Designation	Description	Number
Sample Room Operator	Elite sewing operators with 10+ years industry experience, capability in all types of apparel.	8
A Grade Operator	Operators with 3–5 years’ experience and high level of competency in a specific type of garment. Some were capable of sewing an entire shirt, others may specialize in knits.	42
B Grade Operator	Operators with 1–3 years’ experience with expertise in individual components. Unable to sew complete garments.	28
Trainee Operator	Operators with less than 1-year experience. Groomed to become B grade operators.	10
Button Sewing Operators	Specialized operators focusing on finishing of apparel. Carrying out buttonholing and attaching.	3
Helpers & Quality Control	Assist in all aspects of production. Production line helpers fed main sewing line by inputting cut pieces. Quality control helpers check for deviations and defects, remove excess thread. Finishing helpers iron and pack.	36
Cutter	Mark, layer and cut all fabric and lining for production.	2
Pattern Makers	Produce templates for components of various garments which are used for cutting and as a guide for sewing.	2
Merchandiser	Liaise with buyers and suppliers to ensure factory has all necessary raw material to carry out production.	1
Line Supervisor	Take responsibility for a single production line. One line supervisor may focus entirely on dress shirts, another on casual shirts, another on bottoms. Roles vary based on season.	3
Factory Manager	Responsible for overall running of the factory. Works with line supervisors and other key personnel to ensure factory meets its production and quality targets.	1
Mechanic	Responsible for machinery repair, maintenance and adjustments. The mechanic not only plays a key role in handling breakdowns but may need to adjust machineries based on type of garment or material.	1
Accountant	Responsible for administering payroll, income and expenditure.	1
Office Assistant	Responsible for all HR functions, attendance management, documentation of contracts, and general administration.	3
Driver	Responsible for logistics, transport of finished goods and supplies.	1
Cleaner	Responsible for maintenance and housekeeping of factory and office.	3
Security	Monitors employee entrances, shipping, receiving. Responsible for overall safety, enforcement of rules and regulations.	2

Exhibit 3. Typical Production Flow for Manufacturing of Dress Shirts¹.

Source: Author developed based on information provided by case subjects.

¹ This production flow entails all operations in manufacturing dress shirts. For subcontract operation, Southern Garments may only undertake selected activities in the flowchart.

The second challenge arose from Southern Garment’s clear lack of strategic focus. Nuwan shared, ‘We pivoted from initial goals of specializing in woven shirts and looked beyond working with export-oriented companies. Instead of concentrating on the business I knew the best, we ventured into fields outside our expertise for the sake of survival.’ Like in Isaiah Berlin’s famous essay, Southern Garments was like a fox that simultaneously pursued multiple goals and interests which left them scattered, diffused, and inconsistent. Nuwan aggressively pursued leads in other categories of apparel such as knits, trousers, shorts and outerwear. The discontinuous nature of orders was a major drawback. Each new category involved a learning curve for the company’s sewing operators. By the time the operators approached the standard allowed minute (SAM),⁵ they would have to shift to another. Operators were subject to constant learning, unlearning and re-learning. In addition, the smaller domestic orders required constant changeovers that resulted in higher waiting times and uneven production levels. A combination of these factors left Southern Garments operating well below optimal efficiency levels.

The third challenge was a direct consequence of the company’s absence of focus. Even the most skilled operators required adequate experience and training to reach an acceptable level of competency in a specific category. The limited exposure in new areas coupled with intense pressure from unrealistic deadlines led to subpar production quality. In many orders, the overall finishing and consistency fell short of what was set out in the product samples approved by clients. The operators had to routinely carry out rework while there were significant damages and defective products. Southern Garment’s inability to fulfil orders perfectly meant many of the clients were not coming back. One of Nuwan’s former managers and now a mentor always advised him ‘Focus on quality, deliver on time, repeat orders will come and your business will take care of itself.’ Unfortunately, Nuwan’s focus was always on the next client and the next order. He once confessed to his mentor ‘I want to have the best quality. But if I slow down to identify and fix all problems, how will I meet my targets and pay my bills.’ Nuwan knew his mentor was right, ‘If I can’t improve quality and get repeat business, it won’t be long before we run out of leads.’ Later that evening, Nuwan sat at his study and pondered about the strategic choices available to him.

Potential opportunities

Focused subcontractor

Given his present setup and circumstances, the most natural and pragmatic option was to solely undertake subcontract orders for one or two large export-based companies. See Exhibit 4 for estimated production capacity and projected demand for subcontract orders. Nuwan offered:

Southern Garments could become a dedicated subcontractor for a few of these clients by offering favourable terms and conditions. This would be advantageous for the company in numerous ways. We would have assured business thus eliminating the need to engage in business development. The orders would be larger in volume with greater numbers per unit. As a subcontractor, SG would just need to produce components as opposed to a full garment. Focusing on a niche range of activities could enable the workforce to specialize which should eventually enhance both efficiency and quality.

Nuwan realized the downside of this option would be that the prospect of survival and growth would both be at the mercy of the few clients. Success in this strategy was also reliant on favourable macro-environmental conditions.

Exhibit 4. Estimated production capacity and projected demand for export-based subcontract orders.

Component^1	Annual capacity^2	Average price per unit^3	Estimated annual revenue	Projected annual demand
Collar (including band)	1,622,016	0.14	219,191.35	50,000
Cuffs (pair)	2,433,024	0.08	197,272.20	50,000
Sleeve Placket (pair)	3,649,536	0.06	236,726.66	50,000
Front Placket	4,055,040	0.05	219,191.40	30,000
Pocket	4,055,040	0.02	109,595.70	10,000

¹ Only involved sewing of individual component, not assembling with main garment.

² Optimal capacity at full efficiency if only producing one style and type of component with an A Grade Operator. In practice, variation of sizes, style, colour, employee skill level, breakdowns and parallel production of multiple components leads to production at lower capacities.

³ All figures listed in US dollars. Average figure based on subcontract orders.

Export

A more entrepreneurial initiative would be Southern Garments exploring the export market. Here, the company could directly become the manufacturing partner for brands in North America, Europe and Asia. Southern Garments could utilize the services of garments buying houses⁶ or reach out to foreign buyers themselves. The main advantage of this route would be the fact that opportunities were limitless. Nuwan explained:

I would have the flexibility to pursue clients around the world and focus on specific apparel categories in which we were interested. Export order volumes would also be larger in comparison to subcontracting or domestic business. Of course, this would be a riskier option as SG would need to venture into a new territory and develop the know-how of international business from the ground up.

Prospecting for business overseas would also mean Nuwan would have to divide his time between travelling and improving his factory, which could potentially be an obstacle for a young start-up. To cater to the export market, the company would have to expand its production capacity and invest in infrastructure and training to meet compliance requirements of buyers. Finally, there were risks beyond the company’s control. Sri Lanka’s volatile political and economic environment dissuaded many foreign buyers to relocate their production elsewhere. This was specifically a reason why many manufactures shifted focus to the domestic market.

Domestic market

The rise of the Sri Lankan middle class with greater disposable income made the domestic industry hard to ignore. A major advantage of shifting focus to the local market was the fact that firms would be less vulnerable to shocks in the macro-environment. Nuwan relayed:

I see two approaches for venturing into Sri Lanka’s domestic apparel industry. First, is to serve as a manufacturer for existing domestic brands and departmental store chains. However, unlike export or subcontract, domestic orders would have greater number of categories with smaller volumes per category. It is immensely challenging to achieve production efficiencies in such contexts. Another approach is for SG to develop its own brand which we could market through retail partners.

A growing number of Sri Lankan consumers had increasingly become brand conscious and were willing to pay a premium for high-quality merchandise. Policymakers had also encouraged Sri Lankan domestic brands to explore regional markets in South Asia. However, being involved in multiple stages of the value chain was not a common practice. Many Sri Lankan apparel brands focused on design, sourcing, sales and marketing while outsourcing the manufacturing. Nuwan realized that being involved in both brand building and manufacturing would be an arduous undertaking. Nevertheless, possessing one’s own manufacturing may be advantageous in terms of speed and flexibility.

The sharing economy model

Nuwan had always been intrigued by the ‘sharing economy’ model that had become more pervasive in Sri Lanka, particularly in the tourism and transport sectors. The demand fluctuation in the apparel industry and the COVID-19 pandemic made him think about alternative business models. Irrespective of whether he targeted subcontracting, export, or domestic industry he contemplated on the possibility of restructuring his operations. In conceptualizing his idea, Nuwan borrowed elements of the cooperative and employee involvement/ownership business models. In this design, Southern Garments would operate as a small yet specialized factory employing 30 highly skilled operators who would be involved in sample developing and finishing. The company would then lease out machinery to other operators who would undertake assignments from home on a piece-work basis. In other words, like large export factories subcontracted to Southern Garments, he would further outsource to smaller units of production. In the past, Nuwan had broached the topic with his managers. One manager warned ‘It cannot be done boss. We will never be able to meet quality standards without supervision.’ Another manager rejected the idea cautioning ‘They will not prioritize us anymore. They will use our machines to do work for others.’

Nuwan understood the scepticism as it had not been done before in the Sri Lankan apparel industry. While the business model had its fair share of obstacles, Nuwan envisioned this as a more pragmatic way of running an apparel business. From the firm perspective, they would have the flexibility to adapt their capacity as required instead of overburdening itself with a hefty payroll. The structuring of the operation would permit the more complex value-added items to be done in house, whereas the routine activities could be done externally. Nuwan reasoned:

As external operators would be compensated on a piece rate, they would have greater drive and incentive to accomplish their tasks. The move would also be welcomed by operators. They could work from the comfort of their homes and have the freedom to choose their working time thus strike a good work/life balance.

Operators would also feel incentivized to work around the clock, thus removing time constraints faced by Southern Garments. Like in many collectivist cultures, in Sri Lanka it was a well-established practice to prioritize the welfare of employees. Nuwan saw this as ‘hand-up’ entrepreneurship and through this initiative, he would be an enabler in the development of micro entrepreneurship in rural Sri Lanka. By providing his operators with infrastructure and work opportunities, he would be providing them a platform to grow and elevate their socioeconomic status. Nevertheless, this model would require a fundamental shift in how Nuwan managed his business. Effective logistics, meticulous planning and coordination would need to become core capabilities.

Moving forward

It was almost midnight and Nuwan Perera decided that it was time to call it a day. He was happy with his brainstorming session and was imbued with newly found confidence and energy. He had numerous avenues available to get Southern Garments back on track. He could wholeheartedly pursue a specific route, or simultaneously adopt two or more ideas. Or perhaps could persist with one specific path and gradually work towards moving in a new direction in the next 3–5 years. Ultimately, Nuwan wanted to do what he was passionate about and thought he could be the very best at. At the same time, he knew he had to be practical to keep the economic engine going. He thought ‘My business should not be just about paying salaries and bills. I want to enjoy what I am doing and turn Southern Garments into a well-respected company.’ Whatever direction he would take, Nuwan would have to act fast – preferably before next month end!

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Social Sciences and Humanities Research Council of Canada.

Notes

1 This case was written strictly for the purpose of teaching illustration. It should not be interpreted as the effective or ineffective handling of a business situation. Information in the case may have been disguised or altered to protect confidentiality.

2 All currency in US$ unless otherwise indicated.

3 In Sri Lanka, employees working beyond the stipulated working hours were entitled to overtime pay that was 1.5 times the ordinary pay. Nuwan knew this could have a significant cost implication.

4 Urban settings involved a high cost of living which was a deterrent for the low-income apparel industry workers. As such, the garment industry slowly shifted to rural areas (Dheerasinghe, 2009).

5 Standard Allowed Minute (SAM) is an efficiency metric which establishes the standard time required for an individual garment sewing operation as well as the whole garment.

6 Garments buying houses were intermediary organizations which made a connection between buyers and clothing manufacturers, for which they got a portion of the profit margin called commission.