Financial innovations such as supply chain financing and digital payment solutions have revolutionized industries across the board, and the textile industry is no exception. “With over three decades of experience in the textile sector, I can confidently attest to the transformative impact of these tools,” highlights Vikram Oza, Board Member & CFO at Jindal Worldwide Ltd.
The adoption of digitization in supply chain financing and payment solutions has been pivotal in managing large-scale operations. Reflecting on earlier times, conducting high-volume transactions without these innovations would have been nearly impossible. If we look into the past, scaling a business required significant time investments in customer and supplier interactions, wherein, it often involved extensive travel and lengthy documentation processes.
Today, these tools have streamlined liquidity management. So, to take an instance, arranging working capital limits for dealers once required cumbersome paperwork. Now, digital platforms significantly expedite this process. Through TReDS platforms, payments to SME clients are processed seamlessly, while APIs facilitate transactions with non-SME suppliers. Adding to this, outstanding receivables are credited instantaneously; thereby enabling better cash flow management from the convenience of an office Furthermore, if we speak of another promising tool that can be leveraged would be EDFS (Electronic Dealer Financing Scheme) for customers that make financing less of a tedious process.
Here, the result is a substantial increase in operational efficiency. Businesses can now focus on growth and innovation by leveraging financial tools that simplify processes and save time. So to say, these advancements underscore how the integration of digital solutions continues to redefine the textile industry's operational landscape.
Furthermore, FinTech has become a game-changer, especially for SMEs in the textile sector. By streamlining liquidity management through automated systems and digital tools, FinTech strengthens financial stability and operational efficiency. With this, efficient cash flow management can be achieved, thereby laying the groundwork for sustainable growth which ultimately enhances profitability and enables businesses to build a robust foundation for long-term success.
Lessons for Emerging Textile Enterprises
Emerging textile enterprises can draw valuable lessons from industry leaders who have successfully integrated innovative financial practices into their strategies. Furthermore, staying receptive to technological advancements and learning from the experiences of others is crucial. In addition, proactively adopting proven success strategies can help businesses accelerate their growth and achieve long-term sustainability.
“For instance, as a denim fabric manufacturer, we began as one of 30 players in the industry, positioned at the lower end of the competitive spectrum. By embracing cutting-edge technologies and drawing inspiration from successful enterprises, we steadily climbed the ranks. Today, we are Asia’s largest and the world’s second-largest denim fabric manufacturer. Our journey underscores the importance of continuous improvement. Resting on past achievements breeds complacency, which stifles growth. Instead, maintaining a positive outlook and a relentless drive to outperform previous milestones fosters innovation and excellence. Success comes from a mindset of constant learning, a hunger to improve, and a commitment to adopting transformative practices,” signifies Vikram.
By focusing on these principles, emerging enterprises can build resilient strategies, enhance operational efficiency, and pave the way for sustainable growth; thereby positioning themselves as future leaders in the textile industry.
Driving Financial Innovations in the Textile Industry
The textile industry, being traditionally rooted, has often been slow to adopt financial innovations due to the conservative mindset of its older-generation entrepreneurs. Resistance to change, reliance on outdated practices, and limited awareness of emerging tools have hindered progress. However, the infusion of Gen-X and Gen-Y entrepreneurs has brought fresh perspectives, driving modernization within the sector.
Adding to this, government initiatives, such as the Technology Upgradation Fund Scheme (TUFS), have also played a pivotal role in incentivizing the adoption of new technologies and enhancing operational efficiency. Despite these efforts, overcoming technological obsolescence remains a critical challenge.
To achieve long-term growth, the industry must embrace financial innovations boldly and proactively. Businesses should invest in education and training to bridge knowledge gaps, leverage government schemes, and prioritize continuous technological upgrades. By fostering a culture of adaptability and innovation, textile enterprises can navigate challenges effectively, boosting efficiency, competitiveness, and sustainability in a rapidly evolving market.
About the Author
As a qualified Chartered Accountant, Vikram Oza brings post qualification experience close to four decades in the field of Accountancy, Auditing, Tax Laws & Finance. He has worked in various diversified sectors such as Paper Mill, Ice Cream Industry, Engineering Industry, Pharmaceutical Industry & Textile Industry. He is presently engaged with Ahmedabad based Jindal Group of Companies who are considered one of the top Textile groups of the country. Lately he has been more involved in raising finance for the expansion activities of Jindal group. He has also been involved in raising finance from overseas. He has been sharing his vast knowledge & experience with various for including with students of educational institutes. He has been selected in CFO India’s 10th, 11th, 12th, 13th & 14th Annual CFO100 Roll of Honour for Five consecutive years for being a top 100 CFOs of the country.
