SL. No.

:To Be Assigned by ISCEA

2015 ISCEA Ptak Prize

Global Case Competition

Team: BUTX - 0103-15

Team Member -1 Team Member - 2

Name : Syed Muhammad Ibrahim Name : Kazi Mainul Hasan

Signature : Signature :

Team Member - 3 Team Member - 4

Name : Md. Nahid Hasan Name : Md. Anwarul Azim

Signature : Signature :

Last Date of Submission: May 15, 2015

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 Subject Material Page Number

Abstract 3
Typical Supply Chain 3
Supply Chain Model in 4
Bangladesh Apparel Industry
Core Component 1 Strategic Sourcing 5
e- Procurement 6
Core Component 2 Supply Relationship 6
Management

Core Component 3 Inbound Logistics 7

Core Component 4 Lean Manufacturing 10

Core Component 5 Outbound Logistics 12

SWOT Analysis 12

Investment Plan 13
Budget Table 14

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Abstract:
The Apparel Industry in Bangladesh is booming and expected to be a hub of garments sourcing
in the near future. Analyses from reputed global organization have shown that the industry will
reach US 50 billion by 2021. That’s why Bangladesh Government has appointed a group of
experts to make a 5 years plan on developing Professional Supply Chain Management of Apparel
Industry with a US 10 million fund to invest in the project.

1. Supply Chain Management

Supply Chain Starts with the customers and ends with the customers and improves business with
collaboration.

This is a modern day Supply Chain.

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A Supply Chain Model in Bangladesh Apparel Industry:
The following is a model supply chain in our apparel industry.

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 2. Strategic Sourcing and e-Procurement

2.1 Strategic Sourcing

It’s time we changed the traditional sourcing method and brought new ones. We suggest starting
Strategic Sourcing which is an institutional Sourcing process that continuously improves and re-
evaluates the activities involved in this idea.

Here is a process flow chart to implement our idea in Apparel Industry.

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2.2 e-Procurement:
To minimize the time consumption, we need to adopt the E-Procurement practice. Here is an
example of how e-Procurement works.

3. Supplier’s Relationship Management

An effort to build up long-term relationship between supplier and buyer:

The Industry is suffering as most of the companies do not have proper relationship management
with their suppliers. Here we propose to establish a long term relationship based on partnership
and trust.

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Benefits:
 A good relationship with suppliers breeds into the benefits of having the required raw
materials at the right time, right place and at the right price.
 This facilitates in lower safety stock, less inventory cost and less carrying cost.

4. Inbound Logistics
Inbound logistics is an integral element of business operations for a manufacturing firm,
involving the process of receiving, storing and distributing raw materials for the use of
production. A large amount of investment is wasted in transportation and distribution delays in
our industry. To prevent this, the following ideas should be added in supply chain.

 Milk Run
 Vendor Managed Inventory
 Just-in-Time delivery

4.1 Milk Run Transportation

It’s very effective for our industry as we have lot of suppliers working at a time. It’s a method of
goods collection in which the user dispatches one truck at a specified time period to visit various
suppliers following a predefined route to collect parts or products, and deliver them to factory.

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  Improvement of the vehicle loading rate
 shorten the total distance traveled and improved coordination
 reduces the risk of product quality if problems occur

4.2 Cross Docking:

In this logistic process our suppliers will deliver the supplies with no storage time which may
take place in a distribution docking terminal.

 Different types of supplies like yarn, fabric and accessories can be sorted out easily
 Numerous products can be combined into one transportation method
 Saves money and time

4.3 Vendor Managed Inventory:

To optimize our Supply Chain, supplier (i.e. manufacturers) will be responsible for maintaining
our inventory levels as they will be provided access to our inventory data. As it doesn’t change
the ownership, our inventory management will be a lot easier as suppliers will be responsible for
managing and generating purchase order.

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4.4 Just-in-Time Delivery:

In order to make the inventory management faster and generate revenue, Just-in-Time Delivery
has no alternatives.

 strongly reduced inventory levels

 shorter lead-times
With the implementation of this process, our suppliers will deliver the supplies just when we
need. This will save both our money and time.

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 5. Lean Manufacturing Process:
A systematic approach to identify & eliminate waste & non-value added activities and
to improve value added operations through following the product at the pull of the customer in
pursuit of perfection. It is a comprehensive, unified set of rules, guidelines, techniques & tools
for optimizing discrete process.

Lean Manufacturing Tools & Techniques:

1. Lean manufacturing: A combination of trained people, specific equipments &

workstations in the order of process to flow or manufacture all or part of a production
unit.
2. Just-in-time (JIT): JIT is a critical tool to adapt with sudden changes in the demand
pattern by producing the right goods at right time in right quantities by using existing
inventories.
3. Value Stream Mapping (VSM): An integrated process for identification & elimination of
wastes & non-value added operations.
4. Work Standardization: A principle to ensure completion of each job in organized &
similar process irrespective to operators & equipments.
5. Takt Time: Average customer demand time for producing any article.

Lean Production in Apparel Industry:

Traditionally operated garment industries are facing problems like low

productivity, longer production lead time, high rework and rejection, poor line balancing,
low flexibility of style changeover etc. . Overall productivity levels of the Bangladesh RMG
sector are low compared to regional competitors. Hence, there is a significant potential to
increase the competitiveness of the industry . Substantial improvements (innovations) may
emerge from the implementation of lean tools like cellular manufacturing, single piece
flow, work standardization, just in time production etc

 Firstly, the problem of low flexibility is eliminated by cellular manufacturing. This helps
to make different kinds of products in the same production line depending
upon requirements, whereas in case of old production layout this cannot be implemented.
 Secondly, implementing JIT for production and purchase of items reduces in house
WIP which serves two things. First, the unnecessary handling of large amount of
raw materials and finished goods is reduced which saves store people’s time as
well as warehouse space. Secondly, the working capital requirement is also low
because of small order size and fast rotation of fund due to short production lead time.

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  Thirdly, standardizing all stitching operations by means of time and working
procedures, will help to allocate production operators on different styles according to the
delivery schedule & plant lay-out.

Finally, effective waste reduction techniques need to be implied to ensure fault-free product like,
line balancing, Poka-Yoke mehtod, SMED (single minute exchange of die) etc.

Process Flow of Lean Manufacturing:

Conducting Time Study

Creating Cellular Layout

Work Balancing between Operators

Critical Operation Handling

Trial Production on New Layout

RESULT ANALYSES

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 Advantages of Lean Manufacturing over Mass Production :

Function Mass production Lean Manufacturing

Labor Less skilled production workers Skilled production workers
Product High volume of homogeneous High volume of wide variety of
products products
Organization Decentralized divisions Team oriented
Machinery & tools Single-purpose m/c Flexible automated m/c
Ultimate goal Good enough Perfection
Flexibility Low High
Inventory turn Low High
Inspection Sampling 100% source
Scheduling Forecast, push Customer order, pull
Manufacturing lead Long Short
time
Batch size Large with queue Small, continuous flow

6.Outbound Logistics
The followings are the key ideas to set up Outbound Logistics in Apparel Industry.

 Making long term deal with distinguished transport companies to deliver finished
goods in order to avoid shipment missing.
 Proper Warehouse Maintenance.
 Freight audit & payment service to use less time in reviews of invoice, monitoring &
reporting.
 Liaison with Custom Clearance Department .

7. SWOT ANALYSIS FOR TEXTILE SUPPLY CHAIN INVESTMENT

Strength Weakness Opportunities Threats

 Low labor  Underdeveloped  Government  Political

cost logistics support for instability
 Strong  Non competitive R&D  Regional
Investment behavior of  Logistic link competitors
 Huge entrepreneurs
Manpower  Skills (technical,
marketing &
management)

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 8. Investment Plan

Factors Considered In Our Investment Plan:

 Continuous fuel supply.
 Production of raw material locally.
 Efficient material handling.
 Effective warehouse/inventory management.
 Smooth customs service.
 Diplomatic endeavor with supplier countries
-Deal with India (cotton supply)
-Deal with Pakistan (woven fabric supply)
-Deal with China (other raw material & machineries supply)
 Strategic improvement of infrastructure
-Separate rail route for cargo transport.
-Separate shipment channel for export/import.
–Modification of land-ports.
 Increasing spinning mills.
 Human Resource Management for reducing labor strikes.

Expanding The Market :

Apart from China, other countries and regions such as Japan, Russia, Oceania, Canada, Turkey,
Central and South America, as well as the Middle East have enormous potential to be future
destinations for the RMG exports of Bangladesh. So it is highly encouraged to invest in these
countries.

The US $10 Million fund will be spent in the following way for the next 5 years:

 First three fiscal year, we will build up a strong supply chain for the apparel industry
 Industry spends almost 65% of its revenue in raw material sourcing. The plan is not to
outsource them but to produce them here.
 Rest of the money will be used to develop the country’s own Spinning, Weaving and
other sectors.

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 Budget Table
Investing Process Amount Time period Outcome/
Areas Objective
Internal Transportation $1500000 Gradual
Supply Chain investment
Management Logistic build-up $500000 Once Strong SCM

Inventory Management $500000

Information Central Database $25000 Once Sourcing and

Technology E-
ERP software $25000 Procurement

Supply Chain Employee training $200000 6 months Making

Education training Future
program each Professionals
year
Infrastructure Manufacturing & $2500000 Gradual
building development investment Lead Time
5S Plan $50000 Once Reduction

Audit and Checking $150000 Continuous Effective

inspection process SCM
Handloom SME plan $2500000 Continuous
sector process
Monitoring &
Marketing
Spinning Cotton plantation $1000000 Continuous Continuous
sector Production of low-cost process flow of raw
fibre material
Denim sector Collaborating $500000 Continuous
With Partners process
Diplomatic Endeavor

Conclusion:
This supply chain model ensures lower inventory, higher productivity, lower production cost,
shorter lead time, higher market sale, greater customer loyalty in our apparel industry. Ultimately
manufacturers and suppliers should work side by side to forge a more integrated supply chain
management and thus attain the expected goal.

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