1. Presented by Md. Shamsuzzaman ARIF
B.Sc (Hon’s) , M.Sc ( Statistics), JU
MBA (Marketing), University of Honolulu, USA.

2. Executive summary
Bangladesh, one of Asia’s low developed country, is about to
exploit the “demographic dividend” with a lion share of
growing labor force which is it’s strongest source of
competitive advantage which is yet to explore. On the other
side , here wage is half of India’s, and less than one-third of
China’s or Indonesia’s.
A recent World Bank study shows that if Bangladesh can
improve its business environment halfway to India’s level, it
could increase its trade by about 38%. In this way, it can
become the “next China,” , if it can overcome the
infrastructural limitations and take right steps to utilize its
large pool of labor force which is under utilized.

3.  Improving knowledge
management and international
marketing intelligence.
 applying ICT technologies to
improve efficiencies in the RMG
sector.

4.  Providing training facilities and programs to
enhance the knowledge and skills of workforces.
 Improving the delivery of utilities, especially
water supply, waste management, electricity, and
telecommunications services.
 Enhancing support for R&D, particularly to
foster innovation and the development of new
products and services.

5. Competitiveness is the key to sustainable economic
growth, job creation, income generation, and
consequently poverty alleviation.
Bangladesh has been ranked in the Global
Competitiveness Report since 2003, yet there seems
to be no dialogue on how to address improving its
competitiveness.
Many countries use these indicators to address and
prioritize initiatives to improve the competitiveness
of the country.

6. Table 5-2 Global Competitiveness Index Ranking Bangladesh India Lower
for Bangladesh, 2010 Global Competitiveness Middle
Index 2009-2010 Income
(excludin
g India)
1st Pillar: Institutions 122 54 97
2nd Pillar: Infrastructure 126 76 80
3rd Pillar: Macroeconomic stability 84 96 78
4th Pillar: Health and Primary Education 105 101 86.5
5th Pillar: Higher education and training 129 66 94
6th Pillar: Goods market efficiency 102 48 85
7th Pillar: Labor market efficiency 112 83 97
8th Pillar: Financial market sophistication 71 16 94
9th Pillar: Technological readiness 125 83 93.5
10th Pillar: Market size 48 4 79

8. Production flow chart of a ready
made garments industry.

13. IV. Methodology :
 The study explores the idea of ‘competitiveness’ in the Bangladesh
garment sector to understand the definition of competitiveness;
industry perceptions about competitiveness; factors important to
productivity and specific improvements to be made to maintain
Bangladesh’s share in the international garment and textiles
market.
 The objective of these discussions was to understand:
 1) how do each of these players define competitiveness;
 2) is there a disconnect among them in their perceptions about
competitiveness;
 3) what factors do they consider important to productivity at the
 factory level and at the country level; and
 4) what specific improvements do they think need to be made
 to maintain Bangladesh’s share in the global garment and textiles
market?

14. BANGLADESH READY-MADE
GARMENTS INDUSTRY :
 Everybody now realize that the ready-
made garment (RMG) sector is the
lifeblood for the Bangladeshi economy.
 The sector alone has nearly 5,000
garment factories which directly
employs 3.5 million skilled, semi-
skilled and unskilled workers.
Indirectly, this sector, employs a few
crores of people in the country.

15. stakeholders):
 Factory Owners:
 Factory Workers
 High quality of products
 Low cost of labor  Cheap labor
 High quality of products  Workers are quick learners and
 Fast and efficient workforce good at their work.
 Availability of labor (unskilled)
 High labor supply
 Favorable tax policies and incentives
 Reasonable targets set  BD makes marginal profit and offers
 Dependent on import of raw better prices.
materials (e.g. thread)  Big ‘hub’ of closely located factories
makes it easier for buyers to
 Untrained, inflexible and abusive visit/inspect (as opposed to China
mid-level management where factories are widely
 Lack of facilities (emergency stairs, scattered).
first aid training, safe drinking  Buyers prefer the hospitable and
cooperative nature of Bangladeshi
water, child care, etc.) entrepreneurs.
 Political disruption drives buyers  Many owners and managers can
away. communicate effectively with buyers
in English (unlike,for example,
 Poor infrastructure China).
 Lack of backward linkage causes
high lead time,that is expensive,

16. Mid-Level Managers: Factory Owners:
 Poor infrastructure leads to shipment
 Standard of quality is higher than delays (e.g., collapse of the bridge in
average. Dhk-Ctg road requires a roundabout
 Worker spirit is high & quality of route taking an additional 24 hours).
labor is comparatively high.  Exchange rate fluctuation (e.g., “UK
orders in ₤,but when we deal with
 Cheap labor, therefore cheaper China we import in $,and some 20%
manufacturing cost, better price devaluation occurs in the process”);
offered.  plus BD Tk is going strong against
 Backward linkage missing; foreign currencies.
dependency on import for raw  Access to finance is very costly (15%
materials causes high cost plus short term, 14% long term).
shipment delay.  Shortage of skilled labor
 Workers have low productivity  Major competition within the country
(relaxed, low literacy, low  Lack of technology to produce
motivation). complicated designs
 Political and social unrest (lack of  Bargaining power of workers
social security)  Negative country image portrayed by
 Lack of infrastructure the media.



17. International Buyers:
 Cheap labor
 High production capabilities.
 Improving quality
 Competitive prices
 The GSP system favors Bangladeshi export.
 BD has become vertical in its linkage.
 Spirit of the country (worker, entrepreneur, etc)
 English speaking
 Lack of fashion/trend sense
 Lack of backward linkages
 Lead time, though time needed to deliver has reduced in
the last 2 years.
 BD did not devalue its currency, whereas India, Pakistan
and others did.

18. Associations (BKMEA/ BGMEA)
 Labor force is easily trainable, has
good knowledge & understanding,
and is of high quality.
 Good communication between the
private sector and the government
 Mid-level management has low
training, productivity, philosophy, etc.
 Shortage of skilled workers
 Poor infrastructure

19. Bangladesh’s competitiveness

 Productivity was consistently mentioned by all those
interviewed as important to Bangladesh’s route to
competitiveness.
 bad infrastructure and lack of backward linkages are
most often mentioned as impediments to Bangladesh’s
competitiveness.
 Some buyers even expressed their appreciation for an
intangible quality of entrepreneurs and workforce.


20. Increasing productivity among the
companies in this sector is important for
improving competitiveness.
Manufacturing processes are driven by
three controls – cost, quality and delivery.
Any intervention that can add value to one
or more of these can take some burden off
from the management system.

21. Overproduction
Waiting
Excess Inventory
Transporting
Extra Motion
Inappropriate Processing
Over processing

22. The key financial benefits that ABC Limited
could reap as a result of
Lean implementation are summarized as below:
KPI Factory
Variance
XYZ Ltd. ABC Ltd. Changes:
Efficiency 45% 60% 33.33%
Reworks (in DHU) 20 9 -55%
Rejects (in %ages) 2.5% 1.5% -40%
Average Lead time in Days 80-100 60-80 -20%
Annual Capacity (in Mn Pcs) 2 2 22%
Turnover (Mn USD) 9.4 11.5 22.34%
Profits 0.52 1.64 215.38%
PBT (%age of Turnover) 5.53% 14.26% 158%

23. Skill development :
We should concentrate on high service related skills in
the areas of design & product development, marketing,
material sourcing, and inbound/outbound logistics.
To strengthen the skills of the workforce in the sector ,
the following activities are expected:
 (i) development of labor skill certification schemes;
 (ii) training of trainers;
(iii)training of operators/ workers;
 (iv) training of middle managers;
 (v) training of technical managers; and
(vi) transfer of knowledge to local universities.

24. Diversification of Product and
Market:
 Export-product and market diversification is crucial to safe
guard the economy from external shocks, such as the
recent global financial turmoil and recession in the United
States and European Union economies.
 Some progress has been achieved in this regard. In fiscal
year 2012, Bangladesh exported products worth $1.2 billion
to members of the Organization of Islamic Countries, $720
million to members of the Asian Clearing Union, and $634
million to members of the South Asia Association for
Regional Cooperation.
 Japan continues to be a huge potential market which is so
far under utilized.
 Bangladesh can also look to other emerging import
markets such as Russia, Brazil, South Africa, Middle east
region, South Korea, Malaysia, and China itself.

25. Since India and Pakistan are major raw
material suppliers in the world, The expansion
of regional raw material base will provide a
better opportunity to reduce the lead time in
raw material procurement as well as the
shipping cost with the government support to
make an integrative approach.
Therefore expanding possibilities of raw
material base through regional cooperation is
very important.

26. The knowledge on market trends and
fashion forecasts is an important factor in
the present environment.
Building up own fashion forecasting units
with market research agency at the apparel
retailer’s company will be a major positive
factor towards this requirement.
Collaborative partnerships with foreign
based fashion forecasting agencies is
another step that can be facilitated by the
government or any centralized trade
association unit .


27. Productivity based wages: To improve
productivity
The industry has likewise advocated for productivity-
based wages as a measure for productivity
enhancement.
The current Productivity Incentives Act provides more
flexible employment and wage arrangements, such as
subcontracting and piece-rate wage.
The International Labor Organization has quite a
number of studies related to productivity-based wages
which can be subjected to further discussion between
government and the private sector.

28.  Firstly, this will allow RMG to add more services to the
apparel retailers since these industries will facilitate the
designers to create new, innovative ideas for the design and
development of new products.
Secondly, this will allow RMG to cater for apparel
retailers who demands small batch orders with quick
response.

29. Supply chain management (SCM):
An approach to reduce lead time
In BD the lead time for apparel export varies between 90- 120
days, whereas the time for Sri Lanka is about 19-45 days,
China 40-50 days and for India 50-70 days for similar
products (Rahman and Anwar, 2006; Kabir, 2007).
Many companies are implementing SCM in an effort to
increase competitiveness, profit and customer satisfaction.
At present it is expecting as an effective management in the
apparel (Readymade garment) sector to reduce lead time .

31. Machinery and equipment to improve
business competitiveness :
Computerized machines.
Shuttles machines may be replaced
with air jet machinery
12 colors rotary machines should be
replaced with 20 colors machines
Automatic machines.

32. Implementing Business Processes
Re engineering:
 It is necessary that we restructure and
redefine the business processes in line with
international best practices to boost RMG’s
export competitiveness and come up with
plans to improve the efficiency of these
processes with the help of both Govt. and
private sector.

33. ICT has been quite significant in improving marketing
capability through online, product processing, pattern-
making , in coordinating production schedule and in
managing human resources, supply chain management
through the use of ERP, DSS, e-commerce, etc.
 Most foreign buyers are now using their Internet
websites as venue for communicating orders with the
vendors and in tracking the state of operations in the
vendors’ factories.

34. We often think that labor unrest at garments is
caused only by issues related to wage hike and
hence most discussions focus a great deal on that.

37. In general, apart from wage hike issue, other causes for unrest in
the garment sector are:
 rumors of death and beating,
 Jhut (wastage) business,
fear of job loss & shutdown of the factories, arrears of salary,
 bad relations between workers and mid-level management,
 provocation by the local influential people
and international conspirators along with some NGOs,
role of industrial police such as miss conduct.
sudden order cut by the international buyers,
problems of accommodation and increased house rent,
lack of motivational training and so on.
Therefore, it will be more enlightening to elaborate on the other
real causes of unrest which are often kept out of public view.

38. To be sustainable in an industry, firms
should adopt a strategy whether to be cost
competitive or differentiation.
Through conducting SWOT analysis ,
apparel manufacturers should Identify the
most appropriate ‘Differentiation factors’ to
sustain in the long term, Since it is losing
it’s advantage over lower cost.

39. VII. CONCLUSION
 McKinsey & Company’s interview-based survey of
chief purchasing officers in European and U.S. apparel
companies in 2011 identified a number of challenges,
These include:
Transport: congested roads, limited inland transport
alternatives, absence of a deep-sea port .
Utility supply .
Compliance with labor and social standards .
A productivity gap reflecting skill and technological
deficiencies.
Soaring risks and long lead times.
Political instability and corruption.

40. ew series of reforms are crying need to uplift RMG’s growth strateg
at include :
ducation and training of service related skills such as Material
urcing, inbound and outbound logistics, productivity, marketing
esign ,
o encourage the establishment of central bonded ware house (CBW
nd development of infrastructures.
entralized centers where domestic apparel manufacturers can sha
arket knowledge and offer more integrated solutions to prospectiv
pparel retailers.
acking these steps very soon , Bangladesh can capture the horizo
opportunity to move into the space that China’s transition will ta
ace.