Enterprise Partners (EP) is a 7-year (2013-2020) wealth creation programme which, inclusive of women and the environment, aims to support the private sector and Ethiopia’s economic growth. By applying the Making Markets Work for the Poor (M4P) approach for sustainable results, it aims to facilitate market development in order to spur innovation and investment that creates jobs and increases incomes for the poor. It does so with a combination of technical assistance and market facilitation in resolving market failures. EP is being implemented by a consortium led by DAI Europe, and includes First Consult, Enclude and ITAD.
The EP pillars are:
- The Finance Pillar is expected to achieve the outcome of increasing investment levels in the Ethiopian economy, particularly for growth-oriented Small and Medium Enterprises (SMEs). This will include funding of green technologies where appropriate and develop funding for green growth investments. In addition, the finance team also focus on the base of the pyramid, where market failures are being addressed to increase the usage of semi-formal and formal financial services by the poor.
- The Agro-Industrial Pillar is expected to achieve the outcome of increasing returns on investment (productivity) and investment levels in the priority sectors of cotton/textiles/apparel, livestock/leather and fruits/vegetables, in order to achieve the impact of creating jobs and raising household incomes. Additionally, this pillar will incorporate the promotion of climate change awareness and addressing women’s economic empowerment.
Background specific to this assignment
The textile industry has been one of the most dynamic and geographically mobile industries globally. The industry is made up of buyer-driven complex global production networks with suppliers located in developing countries, including Ethiopia. Ethiopia is one of the largest and most resource rich countries in Africa. The textile industry is a bridge for development because it integrates agriculture with industry. It is labour intensive, starting from cotton cultivation to fashion product, with many opportunities for value addition that could benefit Ethiopia. The Ethiopian textile and apparel sector has grown at an average of 51% over the last 5-6 years, with employment targets of up to 174,000 by 2020.
The Government of Ethiopia (GoE) has embarked on an ambitious programme to attract foreign direct investment (FDI), increase production for export and create new jobs. The manufacturing sector is at the centre of the government’s effort to achieve this goal, because of its ability to mobilise foreign investment, create employment and generate foreign currency. Among selected priority sectors that will drive this growth, the textile and apparel value chain constitutes the central pillar in the structural transformation of the Ethiopian economy.
The Ethiopian Growth and Transformation Plan (GTP) set an ambitious target for exports of textiles and apparel which the country was not able to meet. However, the GoE succeeded in attracting large textile and apparel manufacturers to set up factories in Ethiopia. In addition, significant government spending on infrastructure and industrial parks is expected to attract more investments. The GoE is working tirelessly to improve investment-enabling conditions and achieve the targets set in the GTP II for FDI in the textile sector, export value and new jobs creation.
Ethiopian textile and apparel companies export t-shirts, polo shirts, uniforms, nightwear and other garments to international brands, retailers and buying houses. They face many challenges but benefit from duty free access to major markets, cheap, green energy and dedicated infrastructure.
One of the leading vertically integrated textile and apparel facilities operating in Ethiopia is facing internal and external challenges and is operating below capacity. As a result, the facility requires a comprehensive turnaround strategy and potential restructuring to enable it reach its optimum levels of production capacity and efficiency.
The Turnaround Manager is expected to diagnose the current internal and external situation of the factory and then design and execute a comprehensive turnaround strategy, working closely with key internal and external stakeholders.
3. SCOPE OF WORK AND SPECIFIC TASKS
The scope of work will include a thorough diagnosis of the corporate strategy and core functions of the factory, a gap analysis to identify where the factory can make improvements, and drafting subsequent courses of action for all stakeholders to turn the factory around to long-term sustainability and profitability. In addition, it will require identifying and deploying key personnel and restructuring the organisation based on the findings. The Turnaround Manager must also address the issues related to major stakeholder groups (executives, function managers, employees, lenders, vendors, customers, others). The role of the Turnaround Manager is to make use of existing management staff to undertake the following specific tasks.
- Diagnosis of the corporate strategy: this will focus on the overall strategy of the company and its short-term and long-term plans.
- Reviewing the current corporate strategy and assessing performance against pre- determined targets;
- Assessing implementation strategy against corporate goals and identifying any limitations;
- Identifying constraints that are hindering the growth of the facility and assessing how the company mitigates such risks; and recommend potential mitigation strategies for the future;
- Recommending an appropriate, applicable and achievable corporate strategy and direction that ensures long-term organizational success;
- Diagnosis of the facility’s operational strategy: this will focus on assessing the current production, merchandizing, marketing and sales functions of the factory and its capacity to deliver products to the satisfaction of its customers.
- Assessing efficiency of all production lines and resource allocation plans, and evaluating consistency of speed, quality and delivery;
- Evaluating customer acquisition process, and sales and marketing functions including how the factory identifies, communicates, contracts and follows-up with existing and potential customers;
- Evaluating the enterprise resource planning system currently being implemented at the facility, which includes production, operation, distribution, accounting, human resources and procurement;
- Assessing the working conditions and the workplace relations, including social and environmental compliance issues and immediate and anticipated training needs;
- Assessing the organizational structure, management capacity and governance system;
- Assessing procurement rules, processes and practices of sourcing and purchasing raw materials,
- In-depth assessment of financial system including costing, accounting, payables and receivables, and identification of factors that are impacting the facility’s liquidity;
- Identifying human resources needs, and identifying appropriate incentive mechanisms to attract and retain talent; assessing the HR management capacity.
- Identifying any financial and human constraints to attaining/increasing capacity.
- Conducting SWOT analysis to assess performance and potential of the factory.
- Gap analysis, turnaround strategy and implementation: after thoroughly diagnosing the facility’s operation, the Turnaround Manager will conduct a gap assessment and report on appropriate courses of action to the Advisory Board. Once the report is approved, the manager will implement the recommendations.
- Detail turnaround courses of action with the responsibilities of stakeholders identified;
- Develop a long-term direction and corporate strategy with clear milestones and resource requirements;
- Provide a report on the strategy and best practices the factory needs to adapt to establish efficient and sustainable textile and apparel operations;
- Provide insight on required organizational alignment to improve better supply chain integration and the governance structure of the firm’s supply chain;
- Understand and improve the scope of working conditions, employment relations, social and environmental standards, including projected employment and immediate and anticipated training needs;
- Identify and change key roles and responsibilities that need to be filled/removed/changed to implement the factory’s new/updated corporate strategy;
- Identify and fill critical gaps, including legal, policy and financial management gaps;
- Identify and mobilise feasible alternative internal and external financing options and financial service providers;
- Increase the production capacity of the company while the gap assessment is in preparation.
4. DELIVERABLES AND TIMEFRAMES
The deliverables include strategic advice and implementation of a feasible approach for executing the turnaround plan. This includes:
- Diagnosis report on the corporate strategy and operations;
- Gap analysis and report with clear, targeted and achievable turnaround courses of action;
- A sales and marketing strategy to increase the factory’s customer base and export volume;
- New/updated organizational structure, management and governance system;
- Identifying and recruiting key positions;
- Implementation of the recommended turnaround strategy;
The assignment will be for one year starting July 2018, or earlier if possible. The first three- months will be for diagnosing the corporate strategy and operations; gap assessment and turnaround recommendations. The following nine months will be implementations of the approved recommendations. The Turnaround Manage may hire additional experts with the prior approval of the Advisory Board.
5. WORKING ARRANGEMENTS
The Turnaround Manager will be based in Ethiopia and work closely with, and report to, the facility’s Advisory Board.
6. CONSULTANT REQUIREMENTS
The senior Turnaround Manager will need to have the following qualifications:
- Degree in business management, textile engineering, industrial economics or any other relevant field of study;
- Minimum of 10-15 years of experience in managing integrated textile and garment factories as well as turnaround of distressed businesses;
- Experience in managing senior level stakeholder engagement and deal facilitation;
- Passion and commitment to team work and building the capacity of the technical implementation team;
- Knowledge of international best practice in capacity building, programme management and strategy development;
Additional competencies required include:
- Fluent in spoken and written English;
- Excellent writing and presentation skills;
- Strong analytical skill;
- Ability to work under pressure and meet tight deadlines; and
- Excellent interpersonal skills and ability to work with others.
Last date for submission of applications is 16th July 2018.