Pan-Pacific Conference XXXIV. Designing New Business Models in Developing Economies

Production facility location strategies for small and medium sized sewing cooperatives
to enhance operational performance
Mkwanazi, Michael Sizwe
University of Johannesburg
msmkwanazi@uj.ac.za
Mbohwa, Charles
University of Johannesburg
cmbohwa@uj.ac.za
ABSTRACT
Small manufacturing cooperatives tend to encounter
challenges when making production facility location
decisions. The consideration of facility location
factors when making location decisions is a
challenge for smaller enterprises, their decision are
based on the availability of funding and
infrastructure. In this project, a total census 83
funded sewing cooperatives participated. The
majority of these cooperatives perceived themselves
as successful because they were still in operation
and receiving contracts from time to time.
Incubators and facility-sharing, are strategies
suggested for new sewing cooperatives, to avoid the
mistakes associated with home-based business
operations. Operations and green practices in
sewing cooperatives would make a substantial
contribution to the creation of knowledge about
sewing and clothing cooperatives, given the interest
of South African government to revitalize
manufacturing and that of the United Nations of
creating an inclusive economy through
cooperatives.
Keywords – Cooperatives, Facilities and
Manufacturing
I. INTRODUCTION
The re-industrialization of South Africa is key to
taking lead in Africa’s industrialization and
revitalization. Re-industrialization is amongst the 10
pillars of South Africa’s National Development Plan
[1]. This is an effort to reduce unemployment in the
country, which is currently at 27% and 73% being
unemployed youth [2]. Unemployment among other
things gives rise to crime and demotivation to
participate in the economic activities. Small
manufacturing enterprises are often confronted with
the problem of lacking adequate production
facilities which also meet their requirements [3].
Around the globe cooperatives, which are
enterprises built on community principles such as
sharing, equality, addressing socio-economic issues
and creating opportunities; find themselves working
in less favorable conditions and at times from open
spaces [4]. However, successful and large worker
cooperatives still inspire the upcoming cooperatives
to attract resources in forms of infrastructure and
machineries to deliver products and services [5].
Sewing cooperatives in numerous countries bring
together and empower mostly women who are
sometimes the sole providers for their families [6].
In certain instances these cooperatives are offered
preferential procurement opportunities by large
business to assist them with capital resources and
also to help them create production capacity [26].
The textile and clothing industry is very competitive
but sewing cooperatives do not compete directly
with large established brands, but sub-contract them
[27]. The challenge encountered by some
cooperatives is the inability to deliver quality
products and timeously due to inadequate
production or manufacturing facility [28]. A sewing
cooperative needs production facilities to store their
textile/cloths and other sewing materials, over
lockers, embroiders and for setting up a packaging
station [29]. Sewing is a demanding process as far
as it is concerned. Space for storing packaged orders
may be required or saved if a client collects on time
or when the delivering is made immediately after
quality check and packaging is completed [30].
Renting industrial space is expensive for smaller
and start-up sewing cooperatives, which still need to
work out their production outputs and targets [31].
The success of a sewing cooperative, does not only
depend on the location of its production facility, but
also the size of the facilities and the proximity to
key resources and market plays a role as well rental
rates and other factors associated with leasing
industrial business premises [32]. This research
study is based on 83 sewing cooperatives contracted
by the Department of Social Development in
Gauteng province to supply uniform for identified
school learners [33]. These uniform packs are sewn
by the cooperatives. These cooperatives also get
other work from different clients. The United
Nations insists that cooperatives have a potential for
growth and are creating inclusive economy [5]. Our
research objectives refer to the urgent need of
developing adequate infrastructure for
manufacturing cooperatives and that cooperatives
should identify and evaluate business location. The
objectives of this study: (1) It is to propose
production facility location strategies for small
sewing cooperatives (2) to present the role played
by production facilities on the operational
performance of sewing cooperatives. This research
study has a literature review with key literature
background and also presents the research
methodology hypotheses, findings,
recommendations, implication of this study to
industrial engineering and engineering management
and conclusions.
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