Abstract:
Apparel industry is one of the largest contributors in Sri Lankan economy while Small
and Medium Enterprises (SME) play an important role. With the elimination of the
quotas SME sector had to face the challenge ofproducing garments where competition is
primarily based on price. Most consideration factors that affect on the price are high
production cost, low productivity level, lack ofskilled man power and lack of adoption to
new and efficient technology. Enhancing the productivity respective to manufacturing
process ofthe garment had been identified as a solution to face these emerging challenges
of SME sector. However, at present productivity performance is evaluated by considering
five Key Performance Indicators (KPIs) separately and this method creates problems in
evaluating. Thus this study was carried out to develop a common index using five
indicators based on three months data. Principal Component Analysis (PCA) and Cluster
Analysis (CA) were carried out separately for all three months and as well as pooled data
to achieve the objective.
Results found that the indicator developed consists of a linear combination of three Key
Performance Indicators (Factory Efficiency - EFF, Defects Per Hundred Units - DHU
and Absenteeism - ABS) can be used to asses factories either monthly basis or quarterly
basis, instead of using the five KPIs separately. This new method is more efficient than
the old method used. The developed indicator is named as “Direct Productivity
Performance Indicator” and it is defined as: PCqi = 0.523Zeff - 0.531Zdhu - 0.481ZAbs.
This method can be used to compare different factories as well.
