SL. No.

:To Be Assigned by ISCEA

2015 ISCEA Ptak Prize

Global Case Competition

Team: CORP-0101-15

Team Member -1 Team Member - 2

Name : SHEIKH NAFIZ AHMED Name : JUBAIR AHMED SOURAV

Signature : Signature :

Team Member - 3 Team Member - 4

Name : MD. ISHRAK JAMAL CHOWDHURY Name : MD. SAZIBUL ISLAM

Signature : Signature :

Date of Submission: May 15, 2015

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SCM in Apparel Industry

Supply Chain Management (SCM) is the synchronized set of techniques to plan and execute all
steps used to acquire raw materials from vendors or suppliers, transform them into finished
goods, and deliver both goods and services to customers. It includes chain-wide information
sharing, planning, resource synchronization and global performance measurements.
The apparel industry has recently occupied the largest part of exports and foreign currency in
Bangladesh and has been for more than a decade the second largest contributor to gross
domestic product (GDP). As the end consumers of the apparel fashion market are becoming
increasingly time-sensitive, lead time reduction, besides quality and cost criteria, is needed to
serve more orders from buyers. We have examined the opportunity that lies in an integrated
supply chain to provide a competitive advantage to the Bangladesh RMG sector.

Generally Supply Chain Management (SCM) is exceedingly complex. In the RMG sector the
Supply Chain Management (SCM) is more complex owing to characteristics of global Supply
Chain (SC). Carefully using the available information and integration of supply chain can reduce
the cost of conflicting goals and objectives. The approach is to compile the Supply Chain
Management for the Bangladesh Garment Industry seriously.

Basic supply chain

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Conceptual framework of SCM in RMG industry of Bangladesh

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Challenges

Infrastructure
Transportation bottlenecks create inefficient lead times for garments where as buyers want to
source more fashionable products with shorter lead times. Inaddition to that Electricity, Water,
Telecommunication, Irrigation, Solid waste are the key areas in Bangladesh with infrastructure deficits.

Suppliers performance and the skilled workforce

Productivity must improve not only to mitigate the impact of rising wages but also to close gaps
with other sourcing countries. Two other concerns are a lack of investment in new machinery
and technologies and the insufficient size of the skilled workforce, particularly in middle
management.

Raw materials
Bangladesh lacks a noteworthy supply of natural or artificial fibers, and its dependence on
imports creates sourcing risks and lengthens lead times.

Supplier & manufacturer relationship

Lack of mutually understanding of standards, joint activities& collaboration can lead to distinct
problems.

Operational performance
Prolonged cycle time, lower productivity, inadequate waste reduction measure & environmental
compliance is just beginning to get attention.

Strategies to overcome challenges

1. To develop stronger sourcing base

2. Strategic supplier relationship
3. Efficeint operational performance

Recommendation

To implement the above strategies we will establish a Supply Chain Common Facility Center
(SCCFC) through which we can develop professonal supply chain practise which will help us to
overcome the above mentioned challenges.

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Supply Chain Common Facilities Centre:

Supply chain common facilities centre should be the centre of all supply chain related activities
in appearal industry .
Main objective of supply chain common facilities centre would be to prepare apprearel industries
to achive the ultimage goal of reaching 50BN dollars within 2021 . Supply Chain common
facilities centre will be one stop service centre with all kind of solution in apparel industries of
Bangladesh . This facility centers only vision would be to strenghtening supply chain practice in
apparel industry . To do so voluntarily it will work with every stake holders who are important
part in countries apparel industry like Govt. of Bangladesh, Local stake holders like BGMEA,
BKMEA, DCCI, CCCI & International Developing agencies .

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Research & Training

Seminer, workshop, training on SCM:SCCFC will arrange 120 seminers where the
top management of garments industry, high officials of government & other related
parties will be invited. It will also arrange 180 workshops per year with the mid level
management of apperal industry. Reseach work will be encouraged here & it will be a
platform for the interested groups.

Most importantly SCCFC will organise 300 training programes each year for the
unskilled or semi skilled workers who will contribute directly to the apperal industry. It
has been observed that Bangladesh could export more in volume & could deliver high
fashion products if we had more skilled workers. So to ensure the growth & sustainibility
of this industry SCCFC will organise those training with the help of garments owners.

Type Supplier & Supply chain Facility Inventory Transportation Information Sourcing Pricing
Manufacturer transparency
relation & efficiency
Seminar 15 15 15 15 15 15 15 15
Workshop 25 25 20 20 25 20 25 20
Training 40 40 35 35 40 35 40 35

*5 year long skill development plan

PGDSCM, CSCA, CSCM:SCCFC will arrange partial funding for the employees of
supply chain management department of apperal industry so that they can manange &
lead the organisation with modern supply chain management.

Publication:SCCFC will publish their activities along with latest concept regarding
supply chain management from around the world. It will be distributed among the
employess who are working in supply chain manangement specialy in apperal industry.

Service Support:
Under the service support wings of SCCFC three CSCM & two CSCA qualified employees will
introduce & improve the below points in this industry.
A) Factory Layout Design
Green Apparel Industry
Maximum use of daylight
Efficient energy management
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 Rain water preservation for day to day use
Top notch firefighting capabilities
Sufficient docking capacity
Natural ventilation
Convenient for workers
Overall environment friendly sustainable apparel industry

B) Inventory or Warehouse Design

Proper raw material & finished goods store capacity
Sufficient docking facilities for trucks & Lorries
Use of modern technology for inventory management
Vertical racking system
Proper equipment life sufficient forklifts & other inventory handling equipment
Maximum utilization of day light & rain water preservation
Proper utilization of space

C) Logistics Network Design

Mode of transport
Efficient way of handling cargo
Route management
Full truck load
Maximization of responsiveness

D) Sourcing Management
Establishing a sourcing support center in China which can help in sourcing
management, procurement, quality assurance, quality checking & final shipment
process.
To help small & medium factories for better sourcing from who are not capable
enough to set a liaison office in China
To ensure quality of raw materials. QA & QC of service support will ensure the
desired level of buyers requirement. They will also conduct lab test from any labs
if required.
To overcome the problem of large MOQ issue will be fulfilled u group purchase
To ensure in time shipment of materials from China. Service Support center
responsible personnel will follow up in time delivery
Explore the China market for new, innovative & cost effective materials
Quick sample development & communication with suppliers in china
Service support center will facilitate strong relationship with the supplier

E) Developing mid-level Supply Chain Professionals

Arranging seminars, workshops, short training programs for mid-level & entry
level supply chain employees working in various apparel industries.
Educating professionals about the benefits of supply chain management.
Promoting the need for professional qualifications like CSCA, CSCM.

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 F) Compliance & Environmental Health Safety

Encouraging local apparel industries on establishing social compliance

Stoppage of child labors
Payment of wages on time
Health safety issue,
Stopping carbon emission
Establish central ETP for certain amount of industries,
Establishing day care centers & schools for children whose parents are worker of
the industry

G) Standardization
To maintain a certain standard among significant number of industries on day to
day activities like compliance issue, infrastructure, worker management,
firefighting readiness & equipment, Payroll management

Liaison wing:
Main activities of liaison wing is to maintain cooperation between different stake holders related
to apparel industries like Ministry of trade, commerce & industry, BGMEA, BKMEA, DCCI,
CCCI & also with international development agencies like WHO, ILO, GIZ. Liaison office will
submit various proposals to development organizations & local stake holders. Proposal formats
will be like:

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Strategic supplier partnership:
Strategic supplier partnership is defined as the long term relationship between the organization
and its suppliers. It is designed to leverage the strategic and operational capabilities of individual
participating organizations to help them achieve significant ongoing benefits. A strategic
partnership accentuates direct, long-term association and encourages mutual planning and
problem solving efforts. Such strategic partnerships are entered into to promote shared benefits
among the parties and ongoing participation in one or more key strategic areas such as
technology, products, and markets. Strategic partnerships with suppliers enable organizations to
work more effectively with a few important suppliers who are willing to share responsibility for
the success of the products. Suppliers participating early in the product-design process can offer
more cost effective design choices, help select the best components and technologies, and help in
design assessment. Strategically aligned organizations can work closely together and eliminate
wasteful time and effort. An effective supplier partnership can be a critical component of a
leading edge supply chain.

To enhance strategic supplier partnership the research & training team will conduct 15 seminar,
25 workshop & 40 training programs over the five years.

Key points to develop supply chain efficiency:

Customer relationship management

Collaborative relationships
Transformational strategy
Process integration
Driver-based metrics
Information sharing and visibility
Demand management
Talent management
Virtual integration
Value-based management

Key points to develop supply chain Transparency:

Supply chain disasters
Current state of play
Clarity of purpose
Effective communication is all important
The role of collaboration
Engaging positively with suppliers

To ensure Supply Chain efficiency & transparency the research & training team will conduct 15
seminar, 25 workshop & 40 training programs over the five years.

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 Impact:

Skill enhancement of worker

Category Before After %
Pieces line/Hour 86 102 18.60%
Defect line / hour 9 5 -44.44%
Complaints line/ hour 5 3 -40.00%

Impact on Skill Enhancement of Worker

Quantity of Production

120
100
80
60
40
20
0
Pieces line/Hour Defect line / hour Complaints line/ hour
Before 86 9 5
After 102 5 3

Skill enhancement of Supervisors

Category Before After %
Pieces line/Hour 112 128 14.29%
Defect line / hour 8 4 -50.00%
Complaints line/ hour 5 2 -60.00%

Impact on Skill Enhancement of Supervisors

Quantity of Production

10
8
6
4
2
0
Order Execution Lead Time Inventory turnover
Before 3 4 7
After 4 3 9

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Skill enhancement of Mechanic
Category Before After %
Pieces line/Hour 112 127 13.39%
Defect line / hour 8 6 -25.00%
Complaints line/ hour 5 3 -40.00%

Impact on Skill Enhancement of Mechanic

Quantity of Production

10
8
6
4
2
0
Order Execution Lead Time Inventory turnover
Before 3 4 7
After 4 3 9

SCM Skill enhancement of Mid-Level Management

Category Before After %
Order Execution 3 4 33.33%
Lead Time 4 3 -25.00%
Inventory turnover 7 9 28.57%

SCM Skill enhancement of Mid Level Management

Quantity of Production

10
8
6
4
2
0
Order Execution Lead Time Inventory turnover
Before 3 4 7
After 4 3 9

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Financial Plan:

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Conclusion

The Readymade Garment Industry is a significant and essential business sector in Bangladesh
overall economy. But the SCM process in RMG sector is scattered in perspective of Bangladesh
which is lagging behind in the global competition. To be more efficient in the Global apparel
industry Bangladesh have to maintain standard SCM procedures. This is the right time to think
and re-think for the Decision Makers and the Planners of Bangladesh (Government and Non-
Government) about the SCM issue to implement in Bangladesh Garment Industry with the
inspiration and keenness to sustain in near next into the Global Garment Market with the highly
competitiveness, efficiency, and productivity. If Bangladesh readymade garments industry
cooperate with the prescribed project then it will be more effective to efficient in the global
market.

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