Development of Apparel Industry(Bond)

7/31/2019 Development of Apparel Industry(Bond)

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DEVELOPMENT OF APPAREL INDUSTRY

Faruque Ahmed

Faculty of Apparel Manufacturing ManagementSMUCT

E-mail: [email protected]:01722350767

SHANTO-MARIAM UNIVERSITY OF CREATIVE TECHNOLOGY
mailto:[email protected]:[email protected]


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DEVELOPMENT OF APPAREL INDUSTRY

SUBMITTED TO

Mr. Abdul Hai

Lecturer

Faculty of apparel Manufacturing Management

SMUCT

SUBMITTED BY

Faruque Ahmed

ID: 082011298

Group: B

Semester: 6th

Faculty of Apparel Manufacturing ManagementSMUCT

E-mail: [email protected]:01722350767
mailto:[email protected]:[email protected]


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Letter of Transmittal

Date: 23 June, 2011

ToMr. Abdul haiLecturerDepartment of Apparel Manufacturing ManagementFaculty of Apparel Manufacturing Management

Subject: Development of apparel Industry

Dear Sir,

Here I am submitting my report on Development of Apparel Industry prescribed by you in yourcourse Management Information system. For this Purpose,

I have gone through internet, different books, articles, journals, interview of authorities and

employees of the respective organizations and class lecture sheets for the relevant information ofthe assigned topic.

Please call me for any further information at your convenient time and place.

Yours truly,

Faruque Ahmed

Id: 082011298

6th semester Group: B

Faculty of Apparel Manufacturing Management


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Acknowledgement

At first we desire to express my deepest sense of gratitude of almighty Allah.

With profound regard I gratefully acknowledge our respected course teacher Mr. Abdul Hai,

Lecturer, Department of Apparel Manufacturing Management, Faculty of Apparel Manufacturing

Management for his generous help and day to day suggestion during preparation of the report.

I like to give thanks especially to my course teacher to help during the preparation of this report us

by sharing ideas regarding this subject and proof reading this manuscript.

Faruque Ahmed

Id: 082011298

6th semester Group: B

Faculty of Apparel Manufacturing Management


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Sr.No TABLE OF CONTENTS Page No

1. INTRODUCTION

1.1. Background

1.2 Research methods

1.3 Structure of the study

1.4 Limitation

1.5 Introduction to the case company -Challenge Trading Corporations Oy

2.1 General description of supply chain

0.3 HOW A SMALL INDUSTRY ESTABLISH AS A GROUP OF COMPNAY

3.1 Best Quality Product Produce

3.2 RELATION BETWEEN WORKER AND THE MANAGEMENNT

3.3 TO CONTINUE WITH A BUYER WHAT IS NEED FOR INDUSTRYMANAGEMENT

3.4 TO CONTINUE WITH A BUYER WHAT IS NEED FOR INDUSTRY

MANAGEMENT

0.4 Bangladesh garment sector and global chain.

4.1 Prospects of the RMG Industry

4.2 Market Diversification

4.3 Price Competitiveness

4.4 Compliance Issues

0.5 Conclusion

5.1 Bibliography

1. INTRODUCTION


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Bangladesh is a small country and also over populated country. But we know that Bangladesh is a

developing country. And this developing process is continuing by our apparel section. We know

three fourths of our export comes from this sector. So of course we should take some steps for

developing our apparel industry.The shift from a rural, agrarian economy to an urban, industrial

economy is integral to the process of economic development (Kaldor, 1966, 1967). Although

policymakers in the least developed countries (LDCs) have, at various times, attempted to make

agriculture the primary engine of economic growth and employment generation, this approach has

not worked, not least because of the contributions of the Green Revolution, which has had the dual

effect of increasing agricultural productivity in the LDCs and displacing the rural labour force at

the same time. Led by the example of the East Asian economies, most LDCs now accept the need

for greater industrialization as the fastest path to economic growth. In particular, countries such as

Japan, Taiwan and South Korea have demonstrated that an export-orientedindustrial strategy can

not only raise per capita income and living standards in a relatively short time; it can also play a

vital role in modernizing the economy and integrating it with the global economic system.

Bangladesh, one of the archetypal LDCs, has also been following the same route for the last 25

years. Once derided as a basket-case by Henry Kissinger (The Economist, 1996), the country

stumbled across an economic opportunity in the late 1970s. New rules had come to govern the

international trade in textiles and apparel, allowing low-cost suppliers to gain a foothold in

American and European markets. Assisted by foreign partners, and largely unaided by the

government, entrepreneurs seized the opportunity and exploited it to the fullest. Over a period of

25 years, the garments export sector has grown into a $6 billion industry that employs over a

million people. In the process, it has boosted the overall economic growth of the country and raised

the viability of other export-oriented sectors.

This essay analyzes the processes by which global trading rules came to help out a poor country

like Bangladesh. It demonstrates the impact of the rule changes on the garments sector, and the

response of the sector to multiple challenges and obstacles.

1.1 Background


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Bangladesh is a tropical country in South Asia that is situated in the delta of two major rivers that

flow down from the Himalayas (the Ganges and the Jamuna). The countrys land surface is

therefore largely composed of alluvial silt, rendering the soil highly fertile. Historically, this has

made Bangladesh an agricultural nation; although agriculture contributes only about a fifth of the

national GDP, it employs three-fifths of the labour force (ADB, 2005).

Bangladesh has an estimated population of 140 million (circa 2005), living in an area of about

55,000 square miles. It thus has the unwanted distinction of being the worlds most densely

populated country, and this overpopulation is at the root of many of Bangladeshs socioeconomic

problems. However, the population is largely homogeneous in terms of ethnicity, language, and

religion, and this provides a valuable element of national cohesion.

In spite of numerous constraints, the economy has been on a steady growth path for the last 15

years, mainly due to private sector dynamism.

Nevertheless, the economy has proved to be resilient. Since 1990, it has grown at an average rate

of 5% per year. The Asian Development Bank projects that real GDP growth will increase to 6% in

2006 and 2007 (ADB, 2005). Bangladeshs total GDP stood at $275 billion in 2004, and per capitaGDP was $2,000 (adjusted for purchasing power).

Development of Apparel Industry in Bangladesh

The RMG industry of Bangladesh has expanded dramatically over the last three decades.Traditionally the jute industry dominated the industrial sector of the country until the 1970s. Sincethe ear5ly 1980s, the RMG industry has emerged as an important player in the economy of thecountry and has gradually replaced the jute industry.

The garment industry of Bangladesh has been the key export division and a main source of foreign

exchange for the last 25 years. At present, the country generates about $5 billion worth of productseach year by exporting garment. The industry provides employment to about 3 million workers ofwhom 90% are women. Two non-market elements have performed a vital function in confirmingthe garment industry's continual success; these elements are (a) quotas under Multi- FiberArrangement1 (MFA) in the North American market and (b) special market entry to Europeanmarkets. The whole procedure is strongly related with the trend of relocation of production.

Garment industry is controlled by the transfer of production. The globalisation of garmentproduction started earlier and has expanded more than that of any other factory. The companieshave transferred their blue-collar production activities from high-wage areas to low-costmanufacturing regions in industrialising countries. The enhancement of communication system and

networking has played a key role in this development. Export-oriented manufacturing has broughtsome good returns to the industrialising nations of Asia and Latin America since the 1960s. Thefirst relocation of garment manufacturing took place from North America and Western Europe toJapan in the 1950s and the early 1960s.

1.2. Research methods


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The research has been carried out in this study with the secondary data using statistics from the

related industries website, related publications, magazines, newspapers and the government

agencies. Some information was acquired through emails and telephone conversations as well as

own observation of doing work with the case company.

1.3. Structure of the study

The study begins with the theoretical part and then it focuses on Bangladesh, its RMG industries.

Then it continues with foreign trade procedures and finally some recommendations are given for

the engaging parties.

In the theoretical part, Supply chain is broken into different functions such as purchasing;

distribution and customer service and each of them are included with various sub-items, which are

presented here briefly too. Chapter Three sheds light on Bangladesh and its garments & knitwear

industry and business environment. The following chapter illustrates foreign trade procedures

which includes documentations and import export mechanism. End of this chapter we

will see the risk analysis of the sector.

Finally, recommendations are given in the guideline of business risk and opportunities for the case

company and for the suppliers.

1.4. Limitation

The study will not deal with marketing issues and not even talk about Finnish clothing market. Itwill only describe Bangladeshi Ready Made Garment (RMG) sector, its development and

countrys export performance, which will give an opportunity to know about the suppliers and the

sector for the new entrants. The study will deal with logistics very briefly and it may be the

foundation for further advanced research in marketing. The study focuses on the case company

Challenge Trading Corporations Oy which aimed to expand its business into the clothing business

and is very keen on importing garments products from Bangladesh aspiring being retailer and as

well as wholesaler to the Finnish market. Because of the case company has

yet no experience of importing the products from Bangladesh to Finland, the whole study is

structured as a guideline of doing business between two countries as an entrant. Ultimately the

whole study will benefit the case company and as well the exporting companies as the new entrantsas well as for those who like to establish garment factories in Bangladesh.

1.5. Introduction to the case company Challenge Trading Corporations Oy.


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Challenge Trading Corporations Oy has been established in 2006 at Lahti in Finland. It began its

operations with catering and restaurant business and had one Indian ethnic restaurant in the

beginning. During first year operations, it established another same kind of restaurant in the same

city.

Challenge trading corporations Oy. established with the aim of several business ideas such as,

catering, clothing and garment, computers, electronics etc. After success of catering business,

company desires to begin into garment and clothing business. Company has no previous

experience in this line of business. As an entrant it seeks assist of how to enter to the garment

business, know how and after all, it seeks total foreign trade procedures knowledge.

In the beginning company would like to establish a retail shop in Lahti center then it aims to

expand its business to other city in Finland and as well as it desires to be a whole seller.

Company has already started contacting with suppliers of Bangladesh and has been able to gather

primary information on this line of business. This study has been carried out by close cooperation

with the company.

2.1. General description of supply chain

There are multiple definitions found for supply chains in literature. According to the Supply Chain

Council a definition of a supply chain is: "The supply chain-a term now commonly used

internationally encompasses every effort involved in producing and delivering a final product or

service, from the supplier's supplier to the customer's customer". The series of companies (actors)

that interact for this producing and delivering is what will be called supply chain here. The actorsare connected through the flow of products, the flow of information and the flow of money

(http://www.supply-chain.org) The reason for the existence of supply chains is that there are very

few companies that can produce end products for end-customers from raw materials on their own,

without the assistance of other organizations. The company that produces the raw material is often

not the same company that sells the end products to the end-customer. In order to provide end

products to the end-customers, a network of actors is involved in activities (as purchasing,

transforming and distribution) to produce products and/or services (Stevens, 1989; Lee &

Billington, 1995; Swaminathan, Smith & Sadeh, 1996; Cooper, Lambert, & Pagh, 1997).
http://www.supply-chain.org/http://www.supply-chain.org/


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HOW A SMALL INDUSTRY ESTABLISH AS A GROUP OF COMPNAY

Any small wants to establish as a group of company firstly they have deal with many buyers. On

that time if they can able to satisfy buyer, buyer will give them much order. Most buyers require

that manufacturing company follow the rules of ISO, WRAP. They also comport to give order to

these companies which company follows the social compliance and rules and regulation of them.

When buyer gives much order to manufacturing company, they calculate their capacity. If

company feels that they need to set up another factory to handle much quantity order of the buyer.

Then they establish another factory and shipment quality product to the buyer. Buyer orders much

quantity season to season and company set up factory one by one and establish as a group of

company. All the employees have to work together and leadership also has to be good. Otherwise

group of company cannot be successful. Management and worker relation is very important for

group of company. Because without worker it is very impossible to run a group of company.

Best Quality Product Produce

Quality is ultimately a question of customer satisfaction. Good Quality increases the value of a

product or service, establishes brand name, and builds up good reputation for the garment exporter,

which in turn results into consumer satisfaction, high sales and foreign exchange for the country.

The perceived quality of a garment is the result of a number of aspects, which together help

achieve the desired level of satisfaction for the customer. Therefore quality control in terms of

garment, pre-sales service, posts -sales service, delivery, pricing, etc are essentials for any garment

exporter.

Procurement

A good policy on procurement will enable a factory to obtain materials of the right quality, in theright quantity, at the right time, at the right price and from the right sourc

Procurement Policies

Successful procurement policy will frame taking account of the overall aim of the operation rather

than the specific priorities of one department. Examples of procurement policies include:

Enquiry procedure how many potential suppliers should be approached? Who should carry out

pre-selection evaluation of offers?

Supplier selection e.g. domestic of foreign sources, single or multi-sourcing. Financial limits

authority level to commit the companys expenditure. Supplier contact what are the policies

governing visits, hospitality and gifts?

Departmental organization Who reports to whom, who does what?

Procedure manuals The laying down of administrative principles governing all members of the

department.

Policy may be mandatory instructions or issued simply in the form of guidelines.

Sample Making


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The approved sample should be displayed at the different sections, such as sample making, sewing

and finishing. The sample will help workers to visualize the product they are producing. This is

especially important at the beginning of a new product process when workers are not so familiar

with the product. A visibly displayed sample can help workers to reduce errors, contributing to

reduced rework and reject rates. Display the approved sample at the relevant sections.

Cutting

The factory should start to collect the data on cutting, especially data on re-cuts and damage,

examine their trends and take actions for improvements.

Production plan

Start to gather data on production examine the production trends and make recommendations for

improvement. Try to practice balancing the production line.

Finishing

Clearly display ironing instruction in the Ironing Section. Make finishing and packing plans and

monitor their progress.

RELATION BETWEEN WORKER AND THE MANAGEMENNT

Management and worker relation will be good when management will fulfill requirements of theworkers. Management has to give priority of the workers needs.Equality

It should be noted that any form of discrimination might produce psycho-social hazards that willresult in workers anxiety and affect productivity.

Contract

The factory should provide training on all the requirements of the labor laws concerningcontracts to the management and the workers.

It should also organize orientation program on the same subject for the newly employed

workers.

1. Wages

2. If worker know there minimum and actual wages, they may not have any anxiety, nor dothey keep any misunderstanding in the mind.3. If management do not know the law concerning minimum wages, they may not effectively

implement the law.

Hours of Work

Apply the legal provisions on the maximum hours of work and monitors its application.


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Upgrade the know-how of work-study officers and improve plan production schedule.

Educate managers, supervisors and workers on the relationship between excessive hours of

work and workers health and quality.

Intervals for rest

The factory should provide the workers with a short break before overtime starts,especially when overtime lasts for more than 2 (two) hours. It seems to lose a few minutesof time, but many study have shown that quality is higher and rework is lower after a 5(five) minutes break is given to workers before the last working hour of the day orovertime hours.

As a whole, the production may be still higher.

TO CONTINUE WITH A BUYER WHAT IS NEED FOR INDUSTRY MANAGEMENT

To continue with buyer management have to requirement and rules and regulation of the buyer.

Most of buyer feels to comfort to give orders in this company who follows ISO, WRAP and TQM.Because ISO and WRAP certified companies can produces quality product and able to fulfill

buyers requirement.

Elements of ISO 9000 Quality Management Systems:

The standards of ISO 9000 detail 20 requirements for an organization's quality management

system in the following areas:

Management Responsibility.

Quality System. Order Entry.

Design Control.

Document and Data Control.

Purchasing.

Control of Customer Supplied Products.

Product Identification and Tractability.

Process Control.

Inspection and Testing Control of

Inspection, Measuring, and TestEquipment.

Inspection and Test Status.

Control of Nonconforming Products. Corrective and Preventive Action.

Handling, Storage, Packaging, and

Delivery.

Control of Quality Records.

Internal Quality Audits.

Training.

Servicing.

Statistical Techniques.

Why ISO is important:


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ISO 9000 is important because of its orientation. While the content itself is useful and important,

the content alone does not account for its widespread appeal. ISO 9000 is important because of its

international orientation. Currently, ISO 9000 is supported by national standards bodies from more

than 150 countries. This makes it the logical choice for any organization that does business

internationally or that serves customers who demand an international standard of excellence. ISO

is also important because of its systemic orientation.

Principles of quality management of ISO 9000:

Customer focus.

Leadership.

Involvement of people.

System approach to management.

Continual improvement.

Factual approach to decision making. Mutually beneficial supplier relationships.

Total Quality Management:

Total Quality Management (TQM) is a business philosophy that seeks to encourage bothindividual and collective responsibility to quality at every stage of the production process frominitial design and conception through to after sales service.

Many businesses may not use the term TQM anymore but the philosophy is still very much part ofmost business thinking. It is seen as being a way in which a business can add value to its product

and to gain competitive advantage over its rivals. The former may allow a business to charge ahigher price for its product or service whilst the latter can be a key feature of its marketingprogrammed.

TQM can be addressed in a business in a number of ways. The most common are:

Zero defects - any problems in the production process are filtered out before they get anywherenear the customer. AND Quality chains - each stage of the production process is seen as beinga link in the chain right down to the relationship between one worker in the process andanother.

Quality circles - meetings of those directly involved in the production process to discuss andsolve problems and make improvements to the production process. AND Statistical monitoring- the use of data and statistics to monitor and evaluate production processes and quality.

Bangladesh garment sector and global chain.
http://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-1.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-2.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-3.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-5.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-6.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-7.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-8.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-1.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-2.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-3.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-5.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-6.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-7.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp/qmp-8.htm


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The cause of this transfer can be clarified by the salary structure in the garment industry, all overthe world. Apparel labour charge per hour (wages and fringe benefits, US$) in USA is 10.12 but itis only 0.30 in Bangladesh. This difference accelerated the world apparel exports from $3 billion in1965, with developing nations making up just 14 percent of the total, to $119 billion in 1991, withdeveloping nations contributing 59 percent. In 1991 the number of workers in the ready-made

garment industry of Bangladesh was 582,000 and it grew up to 1,404,000 in 1998. In USA,however, 1991-figure showed 1,106.0 thousand workers in the apparel sector and in 1998 it turneddown to 765. 8 thousand.

The presented information reveals that the tendency of low labour charges is the key reason for thetransfer of garment manufacturing in Bangladesh. The practice initiated in late 1970s when theAsian Tiger nations were in quest of tactics to avoid the export quotas of Western countries. Thegarment units of Bangladesh are mainly relying on the 'tiger' nations for raw materials. Mediatorsin Asian Tiger nations build an intermediary between the textile units in their home countries,where the spinning and weaving go on, and the Bangladeshi units where the cloth is cut, sewn,ironed and packed into cartons for export. The same representatives of tiger nations discover the

market for Bangladesh in several nations of the North. Large retail trading companies placed in theUnited States and Western Europe give most orders for Bangladeshi garment products. Companieslike Marks and Spencers (UK) and C&A (the Netherlands) control capital funds, in proportion towhich the capital of Bangladeshi owners is patience. Shirts manufactured in Bangladesh are sold indeveloped nations for five to ten times their imported price.

Collaboration of a native private garment industry, Desh Company, with a Korean company,

Daewoo is an important instance of international garment chain that works as one of the grounds of

the expansion of garment industry in Bangladesh. Daewoo Corporation of South Korea, as part of

its global policies, took interest in Bangladesh when the Chairman, Kim Woo-Choong, offered an

aspiring joint venture to the Government of Bangladesh, which included the growth and process of

tyre, leather goods, and cement and garment factories.

A research reveals that 90 percent of the garment employees went through illness or disease duringthe month before the interviews. Headache, anemia, fever, chest, stomach, eye and ear pain, coughand cold, diarrhea, dysentery, urinary tract infection and reproductive health problems were morecommon diseases. The garment factories gave bonus of different diseases to the employees forworking. With a view to finding out a link between these diseases and industrial threats, healthstatus of employees has been examined before and after coming in the garment work. At the end ofexamination, it was come out that about 75 percent of the garment workforce had sound healthbefore they entered the garment factory. The reasons of health declines were industrial threats,unfavorable working environment, and want of staff facilities, inflexible terms and conditions ofgarment employment, workplace pressure, and low wages. Different work-related threats and theirinfluence on health forced employees to leave the job after few months of joining the factory; theaverage length of service was only 4 years.

Prospects of the RMG Industry

Despite many difficulties faced by the RMG industry over the past years, it continued to show itsrobust performance and competitive strength. The resilience and bold trend in this MFA phase-out


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period partly reflects the imposition of safeguard quotas by US and similar restrictions by EUadministration on China up to 2008, which has been the largest supplier of textiles and apparel toUSA. Other factors like price competitiveness, enhanced GSP facility, market and productdiversification, cheap labor, increased backward integration, high level of investment, andgovernment support are among the key factors that helped the country to continue the momentum

in export earnings in the apparel sector. Some of these elements are reviewed below.

Market Diversification

Bangladeshi RMG products are mainly destined to the US and EU. Back in 1996-97, Bangladeshwas the 7th and 5th largest apparel exporter to the USA and European Union respectively. Theindustry was successful in exploring the opportunities in markets away from EU and US. In FY07,a successful turnaround was observed in exports to third countries, which having a negative growthin FY06 rose three-fold in FY07, which helped to record 23.1 percent overall export growth in theRMG sector. It is anticipated that the trend of market diversification will continue and this willhelp to maintain the growth momentum of export earnings. Bangladeshi RMG products are mainly

destined to the US and EU. Back in 1996-97, Bangladesh was the 7th and 5th largest apparelexporter to the USA and European Union respectively. The industry was successful in exploringthe opportunities in markets away from EU and US. In FY07, a successful turnaround wasobserved in exports to third countries, which having a negative growth in FY06 rose three-fold inFY07, which helped to record 23.1 percent overall export growth in the RMG sector. It isanticipated that the trend of market diversification will continue and this will help to maintain thegrowth momentum of export earnings.

Product Diversification

The growth pattern of RMG exports can be categorized into two distinct phases. During the initialphase it was the woven category, which contributed the most. Second phase is the emergence ofknitwear products that powered the recent double digit (year-on-year) growth starting in FY04. Inthe globalized economy and ever-changing fashion world, product diversification is the key tocontinuous business success. Starting with a few items, the entrepreneurs of the RMG sector havealso been able to diversify the product base ranging from ordinary shirts, T-shirts, trousers, shorts,pajamas, ladies and childrens wear to sophisticated high value items like quality suits, brandedjeans, jackets, sweaters, embroidered wear etc. It is clear that value addition accrues mostly in thedesigner items, and the sooner local entrepreneurs can catch on to this trend the brighter be theRMG future.

The growth pattern of RMG exports can be categorized into two distinct

phases. During the initial phase it was the woven category, whichcontributed the most. Second phase is the emergence of knitwearproducts that powered the recent double digit (year-on-year) growthstarting in FY04. In the globalized economy and ever-changing fashionworld, product diversification is the key to continuous businesssuccess.Price Competitiveness


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China & some other competitors of Bangladesh have implemented sharp price cutting policies inexporting garments products over the last few years, but Bangladesh has failed to respondeffectively to such policies. China was able to drop the export price of 29 garment categories 10 by46 per cent 11 on average in the United States within a year. Bangladesh needs to respond suchprice cutting policies of its rivals in order to remain competitive in the quota-free global market.

Lead Time

Lead time refers to the time required for supplying the ordered garment products after the exportorder has been received. In the 1980s, the usual lead time in the garment industry was 120-150days for the main garment supplier countries of the world; it has been reduced to 30-40 days in thecurrent decade. However in this regard the Bangladesh RMG industry has improved little; forexample, the averaged lead time is 90-120 days for woven garment firms and 60-80 days for knitgarments firms. The best way is to develop domestic backward linkages with the aim of reducingproduction & distribution time.

Linkage Expansion

The yarn manufacturing capacity of Bangladesh doubled in 2003/2004 compared with 1999/2000.The consumption-production gap of yarn decreased over time, although actual consumptionincreased every year. The fabric manufacturing capacity of the country also increased over time.Such a trend indicates that the linkage expansion process of the Bangladesh RMG industry hasalready started, while the pace of expansion varies from stage to stage. Still many garmentmanufacturers in Bangladesh are interested in using imported raw materials instead of using localraw materials owing to price differences.However, radical or overnight expansion of backward linkage industries is not possible, because itrequires huge investment, modern machinery, a skilled workforce and experience management.Therefore the most important step that needs to be taken at this moment is to accelerate the existing

pace of expansion.

Compliance Issues

In addition to speedy supply, the social dimensions of RMG industry are getting more attentionfrom consumers, social workers, welfare organizations. Currently many international buyerdemand compliance with their code of conduct before placing any garment import order.Although Bangladesh was able to solve the problem of child labor very successfully in the mid-1990s, the countrys performance in improving the factory working environment is not yetsatisfactory. Informal requirement, low literacy levels, wage discrimination, irregular payment andshort contracts of service are very common practices in the RMG factories of Bangladesh. It is true

that the country still enjoys some comparative advantage in manufacturing garment product basedon low labour costs. The average garment manufacturing labour cost of Bangladesh was $0.16 perhour in 1993, while the corresponding figures of India and china were $0.27 and $0.25 respectivelyin the same year (Delahanty, 1999).

CONCLUSION :


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Bangladesh has been able to maintain its current growth momentum, driven by rapid exportexpansion, in spite of MFA phase out and other shocks. Its very clear that the predicted decline ofRMG industry in Bangladesh did not take place and instead, The RMG industry has improvedcompetitiveness and raised exports value. Though the completely phasing out of safeguards againstthe Chinese products at the end of 2008 and the accelerated competition are yet to come. If The

recent data of the beginning of 2008 and quota-free-safeguards-less Canadian market are anyexample of market trends in 2009 and beyond, then Bangladesh can expect to become the secondlargest net garments exporter in apparel. In order to reach to that point, It requires also continuousdevelopment of the sector and allied industries and fair access as a LDC country products to theUSA market.

Recommendations Based on the industry :

The Merchandising Department must intensively look for new candidates to fill-up the

shortage of employees. For this purpose garments World may use internet, print Medias suchas newspapers, brochures and may use referrals.

RMG World acquired latest equipments and machineries but some of them are still not at

work because of lack of technicians and specialists. It is thus recommended that before any

new machinery is purchased, a contract must be signed with the manufacturer of the machinery

or with the suppliers that they must train some staff of RMG World to operate the machine

within reasonable time.

The Merchandising department may dedicate a day in a week or in a month for interview thus

eliminates the unnecessary interviews conducted daily and thus can save precious time ofMerchandising Staff.

BIBIOGRAPHI :

1. Internet:"Textiles on the WTO Website". WTO Secretariat.http://www.wto.org/english/tratop_e/texti_e/texti_e.htm. Retrieved 2008-10

2. Book: Introduction to Business development (second edition)3. Library.

4. Class lecture
http://www.wto.org/english/tratop_e/texti_e/texti_e.htmhttp://www.wto.org/english/tratop_e/texti_e/texti_e.htmhttp://www.wto.org/english/tratop_e/texti_e/texti_e.htmhttp://www.wto.org/english/tratop_e/texti_e/texti_e.htm

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