Sustainable Supply Chain Management in Bangladesh: A Case Study of Ready-Made Garments

Abstract

The ready-made garments (RMG) production industry in Bangladesh has achieved a major presence in the global fashion apparel supply chain particularly due to the competitive advantage (CA) primarily attributed to its' large pool of low-cost labor. However, the competitiveness of this industry is under threat from other emerging economies that are rapidly becoming lower cost production sources. As a result, the Bangladesh RMG sector is under pressure to find alternate sources of CA by introducing sustainable supply chain management (SSCM) practices along with improving the dynamic capabilities (DC) of the RMG manufacturers. However, the extant literature indicates that there is a dearth of sufficient empirical evidence on whether SSCM practices in combination with improvements in management and technological capabilities of such enterprises leads to gains in CA. Low labor cost, efficient worker, different organizational support and government support are the main strengths of this sector. Bangladesh market share is 5% of total global RMG market of 450b USD. In FY 2012- 2013 Bangladesh exported 1972.89m USD of shirts, 5185.48m USD of trousers, 2634.28m USD of jackets and 5143.22m USD of t-shirts. The major importers are European Union, USA and Canada. Knit garments are exported to 148 countries and woven garments are exported to 132 countries. The major buyers are Wal-Mart, Target, Marks and Spencer, Tesco, Levi‘s, Zara, H & M, JC Penny, GAP, H&M, S-Oliver & UNIQLO etc. On the contrary, Supply Chain Management is such kind of Management dealing with customer contentment concerning Manufacturing and Service which are the key values for the Bangladesh Garment Industry obviously. It Constance all of the customer requirement and essential it's all about customer (buyer in term of garment industry) satisfaction. Supply Chain Management (SCM) is such kind of Management for a network of intra and interconnected businesses (Supplier to Manufacturer to Buyer) engaged in the provision of goods and service packs (Lead Time or up to Shipment) needed by the bottom end customers in a supply chain. Supply chain management extents all attempts and procurements of raw materials like trims and accessories, work-in-process inventory, and completed goods from source of origin to source of consumption inside the garment commerce. So according to the nearby scenario Supply Chain Management is in actuality offering a New Paradigm for Bangladesh Garment Industry undoubtedly. Supply chain management systems help in reducing inventories, operational costs, compress order cycle time, enhance asset productivity as well as increase the companies ‘responsiveness to the market. Besides from these benefits, the apparel industry is able to achieve quick response through efficient supply chain management practices. Quick response is a concept pertaining to the collaboration and sharing or information among manufacturers, suppliers and distributors, allowing them to respond more rapidly to the needs of the customers. Since entering into the 21st Century, Bangladeshi RMG and apparel industry begun to face increasingly serious problems with offering high-quality, low-cost products within a short lead time; and to meet health, social, and environmental compliances in the face of increasingly stiff completion. Under this domestic and foreign competitive environment, the future survival and development of Bangladeshi RMG industry faces large challenge. Simple management mode of made of ―import to export‖ or the production and management mode of ―vertical integration‖ have made the Bangladeshi RMG industry lack in activity, innovational ability and insufficient international competition Under this background, the idea of ―horizontal integration‖ begins to rise, and as the representative of this idea, the supply chain management (SCM) increasingly prevails. Because of enormous economic importance in the economy of Bangladesh, RMG industry growth is to be sustained by improving SCM. 8