About value chain

Value Chain is the tool which to seek and determine the advantage for the companys competition. It is introduced by Michael Porter who is the famous professional from Harvard business school. In this theory it emphasis to use systematic means to analysis and e!amine the relationship of activities in the company and seek the competitive advantages resource.

"he meaning of the value chain can be summari#ed as follows$ %irstly companies have close links between the activities. "he raw material supply plan timeliness and coordination are closely linked with the business of manufacturing& 'econdly each step can bring tangible or intangible benefits to the enterprise such as after(sales service if the company pays more attention to customers) needs or provides good service it can improve the enterprise)s revenues and reputations *tangible and intangible value+& "hirdly value chain includes not only the content of each part of enterprise activities but also e!ternal activities such as the relationship between supplier and customer relationships.

In the manufacturing sector the basic activities of the value chain including internal logistics e!ternal logistics marketing service& additional activities include enterprise infrastructure * business operations of various assurance measures in general + human resource management technology development and procurement. ,ach step includes three parts$ direct value(creating activities indirect value(creating activities -uality assurance activities. .e e!amine an activity whether create the value is based on that if it provides a follow(up activities need something reduces the cost for follow(up activities and improves the -uality of follow(up activities.

The whole T-shirt industry in Bangladesh. "o research the "(shirt industry in /angladesh we should know the whole process of "(shirt. 0ctually these are core steps in the "(shirt industry. "hey are$ raw materials manufacturing warehousing and distributing retailing and consuming and disposal. Please note that we add the step of disposal of the product because we think the "( shirt to the consumer is not the end when consumer wear it for a long and throw it away the old "(shirt will cause the environmental issue.

Raw materials

Manufacturing (Zhiyu)

"he advantage of manufacturing in /angladeshi "(shirt industry is low cost and this is the most obvious competitive advantage. /ecause there are two core parts effect the daily clothing like "(shirt$ materials and manufacturing. In the past thirty and twenty years we found almost everything is made in China However with the development and upgrade of manufacturing in China in addition the labor salary has increased sharply in China the enterprise should pay more to their workers than before so the basic or low(grade manufacturing has moving to other countries such as Vietnam and /angladesh.

In /angladesh the workers salary is very low the cost is 123 lower than Chinese. "he garment industry is as the mainstay industry to /angladesh because of a full complete garment industry chain the country)s e!ports to the ,4 0',05 *China

6apan 7orea+ Canada and other countries with entitled to duty(free and -uota(free preferential policies. "he reason of low cost in manufacturing is the large population. "he number of /angladeshi population is 892 million. 'o the rich labor keep the low cost in this country.

However there is the biggest issues in the manufacturing$ the works treatment is concerned by many human right organi#ations because the salary is too low and the factory environment is too poor. "he payment to these workers only can maintain their basic life. 0lthough garment industry is very huge in /angladesh the western clothing enterprise keep focusing on the lowest cost and largest profit so they give these clothing task to /angladesh and evadie the international their responsibilities. In addition the workers basic safety often can not guarantee. "he factory owner provide a bad environment such as little space and no escapeway. If there is a fire ha#ard workers have no chance to escape. Moreover workers can not provide the high -uality base on the bad production environment and this will effect the sale.

"he accident which cause more than 8 222 dead in the early this year because the factory owner never care the security actually he had received potential safety crisis by police before and he ignored. 0fter this accident there broke out a large demonstration in /angladesh workers strook in order to pressure to government to improve their treatment. "housands of garment workers in :haka smashed hundreds of cars burned garment factories police had fired rubber bullets and tear gas to disperse the workers.

"herefore the cost in garment might increase in /angladesh the this advantage might

become the history. 5owadays many clothing factories are moving to other counties such as Indonesia. It will be a disaster to /angladeshi garment. How to reestablish garment industry and find a new way is main mission to the government. /ut hte most important thing is that balance the development of the country and the living standard of normal people.

Warehousing (Nishant)

"here are basically two types of warehousing namely production and sales focused. It is shown about both of them below $ Production( and sales(focused production warehouses( "here are two types of warehouses in the manufacturing process$ production and sales(focused warehouses. 'emi(finished products are stored in production(oriented warehouses. "hese warehouses are created in particular as a result of insufficient synchroni#ation between successive production processes. %inished parts or component groups are located in sales(focused production warehouses. 'uch warehouses are created as the result of strategic production decisions concerning whether and to what e!tent parts for order(related finished products should be produced and temporarily stored before an order is received. In addition the different types of warehouses fulfil different functions. Production(focused warehouses perform a balancing sorting and security function. 'ales(focused warehouses fulfil a fle!ibility delivery(time(reducing and substitution function .

%unctions of production(focused production warehouses( /alancing function 0 completely synchroni#ed production process would be ideal. In reality

various production lines fre-uently cannot run at the same speed. 0s a result a linkage buffer between two production units in a production process performs a counterbalancing function to coordinate the input and output of several production units with one another . 'orting function "he sorting function is carried out by a material(planning buffer. 0 typical e!ample of a material(planning buffer is the intermediate(storage facility that is used before and after the paint shop$ "o avoid changing colors as much as possible parts are sent through the paint shop in groups to be painted the same colour. "he lots are split up combined and put in a new se-uence. ;nce they have gone through the paint shop they are resorted so that they can be delivered to suit assembly needs . "he sorting function is provided by the option of changing the order of ob<ects moving to and from the warehouse and of grouping or segmenting lots. ',C4=I"> %45C"I;5 .hen a disruption occurs in the manufacturing facility production can be secured in other production units through the use of a material(planning buffer. In this manner this disruption buffer performs a security function .

%unctions of sales(focused production warehouses( %le!ibility function "he sales(focused production warehouse carries out a fle!ibility function when many end products can be made from a relatively small number of intermediate products or from a single raw product to respond to the re-uests of individual customers. In "(shirt production for instance manufacturers make only white "(shirts. "hese shirts are stored. ?ater they are dyed or have an emblem added to them depending on the latest design re-uirements. :elivery(time reduction function %re-uently people assume that many automakers only manufacture cars based on individual customer re-uests or orders. 0ctually production of the re-uested car begins before the order arrives. ;therwise the delivery time

would take too long. 0s a result warehouse inventories perform an acceleration function in the production process. "he warehouse is used to store intermediate products and these products only have to be assembled completed or modified depending on feature options . 'ubstitution function "he storage of finished goods can be replaced by the storage of semi(finished goods. 'emi(finished goods like white "(shirts or car bodies come in considerably fewer variations than finished goods. 0s a result of the reduced variety of the products being stored much less capital is tied up. 0t the same time warehouse space can be saved because in general semi(finished goods can be stored more easily and compactly. In this manner the sales(oriented production warehouse performs a substitution function. :I'"=I/4"I;5 *5I'H05"+$ "his section describe the channels and mechanisms by which your product or service will be reaching the end user. >ou should demonstrate that you have established appropriate logistics for ensuring that your product will reach the clients in time in perfect condition and in a cost(effective way. Particular -uestions are taken up by the manufacturer of /anladeshi "(shirts are the following$ @ :istribution channels. .hat are your primary distribution channelsA *=etail stores wholesalers mail order door(to(door selling electronic commerceBInternet etc.+ @ Intermediaries. Is the entire distribution chain under your control or are you using intermediaries such as supermarkets and distribution agentsA If the latter is the case what type of agreements do you have with themA *:ivision of responsibilities sharing scheme for income price margins by shops etc.+ @ Costs. Is the chosen distribution channel cost(effective for the type of products -uantities and markets that you are targetingA *'uppose that you operate a pi##a home delivery business and you produce all the pi##as in one central facility. 0 basic -uestion that you would be asking yourself is how far you can deliver the pi##as

economically. 0 one(kilometre distance is certainly no problem and five kilometres may also be no problem& but if you start delivering to clients in another town C2 kilometres away you are probably not competitive. ,ither you establish a second production unit in this town or you leave the business to somebody else there.+ @ Mark(up. Can your product bear the mark(up re-uired by the distributorsA If you are distributing your products through shops in foreign countries you have to assume that the shops will add a mark(up of say 822 per cent. "he importer may re-uire another D2(12 per cent. ;n top of this transportation costs import duties and so forth have to be added. Can your products be sold at a price that includes such mark(upsA @ Packaging. Is the packaging of your product suitable for the distribution and transportation channels that you have chosenA Can you be sure that the product reaches the client in a perfect conditionA "he more stages in the distribution channel and the more loadingBunloading the more robust your packaging has to be. @ Costs. Is the chosen distribution channel cost(effective for the type of products -uantities and markets that you are targetingA *'uppose that you operate a pi##a home delivery business and you produce all the pi##as in one central facility. 0 basic -uestion that you would be asking yourself is how far you can deliver the pi##as economically. 0 one(kilometre distance is certainly no problem and five kilometres may also be no problem& but if you start delivering to clients in another town C2 kilometres away you are probably not competitive. ,ither you establish a second production unit in this town or you leave the business to somebody else there.+ @ Mark(up. Can your product bear the mark(up re-uired by the distributorsA If you are distributing your products through shops in foreign countries you have to assume that the shops will add a mark(up of say 822 per cent. "he importer may re-uire another D2(12 per cent. ;n top of this transportation costs import duties and so forth have to be added. Can your products be sold at a price that includes such mark(upsA @ Packaging. Is the packaging of your product suitable for the distribution and

transportation channels that you have chosenA Can you be sure that the product reaches the client in a perfect conditionA "he more stages in the distribution channel and the more loadingBunloading the more robust your packaging has to be.

Consumption (Nishant): "he -uantity of fabric which is re-uired to produce a garment is called consumption. How much fabric is re-uired to produce a garment we can determine it through marker planning and mathematical system.

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Disposal (Zhiyu)

"o many people the main way to deal with their old clothes is discard in to dustbin or donate to the social welfare organi#ation which help poor people. However the disposal of clothes is becoming more concerned although it is <ust a "(shirt but actually it contains a lot of energy costs such materials manufacturing and transportation. Cotton from cotton planting by tillage fertili#er pesticide harvest

te!tile cutting each step need machines and energy also printing this step biggest energy(consuming

"he first issue is pollution. If we throw the "(shirt into the dustbin it will mi! will other garbage. 'ome of them can recycle and some an not. ,ven we classify the garbage it difficult to divide the glass paper plastic and clothes. "his will increase the cost to dispose garbage. If people throw the old "(shirt outdoor directly it will pollute the environment because cotton is not easy decomposed naturally so it will keep a long term in the nature pollute the land and water because it includes some chemistry such as dye.

"here is a new trend that some companies collect the old clothes and illegal smuggle them to undeveloped countries. "hese clothes are very cheap so many people buy. However it is a serious risk to healthy this kind of covered with a large number of bacteria such as$ tuberculosis plague cholera and other infectious diseases. /ecause they are not sterili#ed specially before collection the disease will pollute mutually in the process of storage cleaning. 0fter wearing people will infected with various skin diseases or other diseases. 'ome bacteria present a risk of serious danger of large( scale epidemic endangering human health.

"herefore the deposal of old "(shirt is an untoward thing and we should find a new way to slove this problem.