The Efficiency, Benefits and Profitability of Lohn Production in RN Macedonia for a German Textile Company

This paper shows the efficiency and profitability of the textile lohn production in the Republic of North Macedonia as well as in other countries in the Western Balkans, the so-called third countries. This geographical region is attractive because of the cheap labor, as well as the profitability that arises as a result of the economic system of work. The paper makes comparison with the production in Western European countries, where the wage for the labor is several times higher, and at the same time the taxes are also higher. In the global market, the third textile production option is the Far East, or for the most part China, as a favorable option, but with very long delivery times due to the physical distance from the European continent and the transport time for the final products. In this paper we will show the results and analyses through an example of a German textile company oriented towards production of fashion textile products in RN Macedonia, including efficiency of the textile production in the Western Balkans, as the most acceptable option for lohn production. The solutions were based on the concept of improving the efficiency of operations, especially in the area of organization of production operations, in a way that enabled complete elimination of errors, greater productivity and increased quality of the final product, within a precisely defined time frame.