Supply Chain in RMG - The Hidden Lever to Success
The readymade garment (RMG) sector is a success story for Bangladesh. The industry started in the late 1970s, expanded heavily in the 1980s and boomed in the 1990s. The quick expansion of the industry was possible because of the use of less complicated technology, cheap and easy to operate sewing machines, and relatively cheap and abundant female workforce.
To face these challenges, the apparel makers should focus on effective supply chain management as it will ensure delivering the right product to the right place at the right time at the right price, say supply chain experts.
“Effective supply chain management is the way to offer high-quality, low-cost products within the shortest possible lead time as it integrates the whole apparel supply chain as one,” says Ejazur Rahman, managing director of Mind Mapper Ltd, a leading management consulting firm.
He says the entire apparel supply chain is made up of every organisation involved -- from the initial fibre supplier to the consumer purchasing the products.
Rahman, who is also the chief executive officer (CEO) of International Supply Chain Education Alliance (ISCEA) Bangladesh, says, “The RMG manufacturers need to start working together with all the supply chain partners, as the landscape of low cost sourcing countries is about to change. Buyers in the future would be more interested in TCO (total cost of ownership) rather than just the unit price.”
Buyers in the future would also look at the implications in sourcing materials and even services from half-way across the world, he adds.
“So, we should consider the whole apparel supply chain as one, adopt a fact based approach upon thoroughly understanding current realities, invest in the appropriate skills and constantly monitor and adjust to optimise results in an ever-changing world,” says Rahman.
However, the concept of a 'complete understanding of supply chain management' is absent in most organisations in Bangladesh because of a lack of a basic understanding of the subject, say industry insiders.
“The textile industry is lacking the correct supply chain management know-how as the country has an acute shortage of people who understand the complex nature of supply chain management,” says David Hasanat, chairman of Viyellatex Group, one of the nation's largest knitwear and woven goods exporters.
But, the country needs plenty of supply chain resources to benchmark itself against the best in the world like Toyota and Wal-Mart, he adds.
Hasanat, who is also the CEO of the company, says, “We are just at the beginning of a much bigger journey. So we should focus on the development of supply chain mangers as they can ensure the best value addition in all businesses and take us to the next level.”
Roger Hubert, vice president of Li and Fung Bangladesh Ltd, a Hong Kong based apparel sourcing company, says, “Business firms should align their supply chain strategies with all the business processes and their competitive strategies, to augment the supply chain efficiency.”
As supply chain management starts at raw materials planning and spans customer service, he adds, alignment of all processes with the supply chain is critical. “If we do not align it with every single process, we will end up with supply delays, quality issues and delivery of wrong products.”
Pranab Das Gupta, supply chain in-charge of Regency Garments Ltd, says, “The tremendous pressures of globalisation and demanding customers require the RMG businesses to improve their quality, responsiveness and customer satisfaction, while making conscientious efforts to cut costs.”
“So, the apparel makers need to focus on appropriate supply chain configuration to hold superior serviceability,” adds Gupta.
The CEO of ISCEA-Bangladesh says, “Supply chain management is the hidden lever that can magically lift the total business performance of any company.”
Therefore, the government, the RMG units, the textiles units and all other supporting partners of the apparel supply chain need to come together to become a part of one chain, define a common competitive strategy and align its supply chain capability accordingly.
You can contact the writer at - suman.saha@thedailystar.net
Source: The Daily Star, 10 May, 2011
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