Evaluating The Efficiency Of Supply Chain Management Of Bangladesh Readymade Garments Industry

Abstract

Readymade Garment (RMG) industry is the prime foreign earning source of Bangladesh. The efficient implementation of Supply Chain Management (SCM) is imperative for this industry to remain competitive in the global market. Bangladesh is struggling with meeting customer lead time, quality improvement, and high productivity compared to other RMG producing nations of the world. However, there are few studies conducted on the evaluation of SCM efficiency of the RMG industry. This industry experienced few setbacks relating to building collapse and fire incident in the recent past for which compliance issues became heightened. The country has no other alternative but implementing efficient SCM in order to achieve the desired export goal of US$ 50 billion by 2021. This study employs both qualitative and quantitative methods for evaluating the efficiency of SCM of RMG industry of Bangladesh. Supply Chain Operations Reference Model (SCOR), a measure of supply chain e f f i c i e n c y , identifies that the level of SCM efficiency in RMG industry is unsatisfactory. This study provides a model for measuring SCM efficiency with eight latent factors and finds that production cost adherence is the prime factor affecting SCM efficiency. It is also found that RMG companies are reluctant in training their workforce and not very interested in trying with newer designs of product. In addition, it has been identified that buyers are giving more importance on lead time reduction followed by timely shipment and cost minimization. On the other hand, the level of collaborative planning practice in RMG industry is not also satisfactory. In analysis of efficient SCM implementation, lack of workplace safety is recognized as the most important barrier for efficient implementation of SCM in RMG industry of Bangladesh. In analysis it is also found that all the operational dimensions of SCM efficiency are linked with one another and thus, companies need to improve all dimensions for the improvement of SCM efficiency in this sector. Keywords: Supply Chain Management, SCOR, Efficiency, RMG, Competitiveness