Development of a risk management model in technological innovations related to the textile and apparel industry

Abstract

The Textile and Apparel industry, including Sri Lanka's, has grown significantly, offering substantial employment and economic benefits globally. Over the past four decades, Sri Lanka's apparel sector has experienced exceptional growth, becoming the nation's primary foreign exchange earner and employing thousands. Despite this success, Sri Lankan apparel faces higher costs and lead times compared to competitors, alongside a limited product range, which hampers its competitiveness. To stand out, it is crucial to leverage technological innovation for faster production, improved delivery times, precise research and development processes, and modern manufacturing techniques to reduce costs. However, technological innovation is fraught with uncertainty and a broad spectrum of risks, underlining the need for a robust risk management strategy. Due to varying organizational resources and product requirements, a generic risk management model is ineffective across different products and organizations. This situation necessitates a customized risk management approach, a need that current literature often overlooks. Furthermore, organizations are often hesitant to share confidential information with third parties, adding another layer of complexity. To address these issues, a risk management model was designed as a game, to solve the root causes of risk factors in technological innovations and effectively manage the associated risks. It integrates key elements from cooperative game theory, behavioral game theory, teamwork dynamics, psychological aspects of decision- making, visual problem-solving, and the board gaming concept. This model enhances resilience and agility while preserving the confidentiality of organizational strategies.13 leading apparel manufacturers and 10 textile manufacturers were selected covering 145 factories. Data collection was conducted via questionnaires and structured/semi- structured interviews. The results present a flexible, customized risk management model that adapts to emerging risks while maintaining the strategic confidentiality of manufacturing organizations, addressing a significant gap in existing literature.