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Introduction

This paper is prepared based on a case study of garments industry. Mr. Khan
started a garments industry. After running for 5 years, he reached at the break-
even point that is - no profit and no loss. At the same time, he faced some problems
regarding the sustainability of the garments. Here we tried to identify the problems
that faced by Mr. Khan based on the on going garment sectors’ condition of
Bangladesh. According to us, he did not face any budget problem but he faced
performance problem and time problem. After identifying the problems, we tried to
give some recommendations regarding the sustainability of his garments industry
which are discussed here.

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Flowchart of problems:

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Problems identification:

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The problems we have identified so far, are of mainly three types. The problems are
as follows:

1. Performance problems:

1.1 Poor communication


Mr. Khan has poor communication with employees, customers(foreign & local) and
suppliers appears for several reasons - lack of skills or lack of understanding of the
importance of strong communication, employees don't get information in a timely
manner, employees are given too much information that isn't relevant etc.

1.2 Poor infrastructural design


Now a days, the most garments has poor transportation and communication system
and building structure, entrance and exit system is bad in case of fire and other
accident.

1.3 Low product quality


Sewing defects, Color defects, Sizing defects and Garment defects are quality
related problems faced by Mr. Khan which make the product quality low. It creates
very bad impression and results in loss of business and reputation.

1.4 Lack of management policy


Today’s garments sector has huge problem with management like- lack of proper
instruction, , lack of proper training, workers dissatisfaction with their facilities and
payment.

1.5 Lack of research


Although a garment is a thrust sector, lack of proper research and development
work remains a major inadequacy for long. The garments do not research about
product, buyers and their competitors.

1.6 Export import barriers

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Garments are facing export and import barriers. In exporting, garments facing high
duty and cota problems. In importing, garments are facing port and customs
problems.

1.7 Limited Export Market


Mr. Khan is highly concentrated in two major markets- EU and USA. Limited
exported in Germany, UK, France, Netherland, Italy and Canada. The high
concentration in a few markets is risky.

1.8 Excessive labor union


Labor union raises their voice for wage increases, set working hours, bonus, on time
payment and safety conditions. For that reason they strike which reflects on profit
and productivity.

1.9 Low productivity of workers


The labor productivity of Mr. Khan is much lower. The majority of the workers come
from slum dwellers with little or no education. This is one of the reasons of low
productivity. Lack of training, motivation and low labor cost are also responsible for
lower productivity.

1.10 Failed to apply TQM (Total quality management)


Mr. khan has failed to apply TQM (total Quality Management) in his production
process.

1.11 Lack of high technology


Lack of standard machinery results in poor quality and defected garment products.
In most of the factories there is theft cases of parts of machines and these are
replaced with low quality parts to keep the machine operational.

1.12 Limited knowledge in international marketing information


Mr. Khan has limited access to current market intelligence and international trade
information. Foreign buying houses have been dominating the marketing part of the
business. But if these buying houses shift their bases to other countries,
Bangladeshi exporters may face serious problems in finding their ultimate buyers.

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1.13 Inefficiency in port management
The Chittagong Port is the most important entry and exit point for trade and
commerce of the country. It is one of the most inefficient and corrupt ports which
seriously hamper the competitiveness of Bangladeshi garment in the world market.
The corruptions are- Frequent work stoppage by different service providers,
transport workers, Excessive dock labor unionism, Politicization of Collective
Bargaining Agents, Direct involvement of powerful local politicians, elite and
musclemen, illegal gratification practices.

1.14 High competition


Mr. Khan is facing high competition for other local garments industries and efficient
producers like Hong Kong, China, India, Thailand, and Sri Lanka, Vietnam and
Caribbean countries.

2. Time problems:

2.1 Global Recession


The garment exporters are suffering badly due to the ongoing global economic
crisis. For the worldwide recession, Mr. Khan is realizing low unit value from the
overseas market and paying higher unit value for importing raw materials.

2.2 Lack of resource when needed


Resource like electricity, gas and water are not adequate. The raw materials are not
also available in our country. Mr. Khan depended on others countries for
outsourcing of raw materials which charged higher prices and increased the
production cost.

2.3 Lead time


The buyers want the product within a limited time with a best possible price that Mr.
khan could not meet up.

3. Money Problems:

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3.1 Fluctuation of international prices
International price fluctuate heavily. As a result, cost of raw materials increases
which ultimately increase the total price.

3.2 High corporate tax rate


In garments industry has to pay high tax on their production as well as VAT.

1. Performance problems:

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Performance problems and solutions

Effective Communication
Poor communication

Wonderful infrastructural design


Poor infrastructural design

Low product quality Improving product quality

Effective management policies


Lack of management policy

Conduct more research


Lack of research

Effective export import system


Export import barriers

Limited Export Market Markets exploration

Mutual understanding
Labor union

Low productivity of workers Increasing productivity of workers

Effective use of TQM


FailedtoapplyTQM (Total qualitymanagement)

Lack of high technology Use of high technology

Limited knowledge in international marketing


information Buying agent

Ensuring efficient management of


Inefficiency in port management ports

Increasing Competitiveness
High competition

Recommendation of performance problem:

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For the performance problems showing above, we are giving the following
suggestions:

1.1 Effective Communication


Clearly communication appears to be the key to project success. Effective
communication skills can create a more positive outcome.

Stay focused on the present employee’s feelings, understanding one another


bring solution to communication problem.

Effective communication goes both ways- thinking and listening. At first Mr. Khan
has to listen what employees and suppliers are saying, customers or buyers want.
Don’t interrupt and get defensive. Just hear them and reflect back what they’re
saying so they know they are heard. Then Mr. Khan will understand them better and
they’ll be more willing to listen to him.

Foreign Buyer

Local raw material Manufacturer Foreign raw


Suppliers (Mr. Khan) material Suppliers

Figure of Business Structure

Try to see from the view point of employees, customer sand suppliers.
Communicate directly with customer and suppliers.

Mr. Khan

Director
Director

Line Line Line Line Line Line


Agent Agent Agent Agent Agent Agent
Figure of Team Communication

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As messages are passed up or down through the layers of the organization, they
pass through a number of different people who can add, take from, qualify or totally
twist the original message. Mr. Khan has to begin communication with the
directors who receive instruction directly from him. They are then asked to share
this information with their group of front line agents. One way to make sure the
directives or communication that directors pass down actually get to the front-lines
the way he intended is to randomly conduct “round table” discussions. Pull 3-5 front
line agents in for a discussion that is very informal and ask specific questions to get
a feel for the messages Mr. Khan has passed down and to make sure the director is
doing their job.

To overcome fear Mr. Khan must work to develop trust among the employees. Trust
develops when Mr. Khan will do what he says he is going to do - and by doing his
part to help the team succeed.

Mr. Khan has to build trust and not violate the confidentiality of the employees who
are openly and honestly sharing. Again, the key to honest feedback is to create a
trustworthy relationship that employees believe will not come back to hurt them
later.
1.2 Wonderful infrastructural design
To remove this problem Mr. Khan should establish in such type of area where
transportation system is well. Mr. Khan’s garment should have large entrance and
exit way and alternative way to exit in any kind accidents. For fire accident Mr.
Khan’s garment should have enough fire distinguisher. If the garment has large
entrance and exit and enough fire distinguisher then every employee will feel safe
and will do their job with full attention. Governments can also impose some rule
regulation on garments building stricter.

1.3 Improving product quality

Before entering into international market, garment exporters have to


carefully frame out the quality standards. There are a number of factors on
which quality fitness of garment industry is based on such as - performance,
reliability, durability, visual and perceived quality of the garment.

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The broad quality parameters (ISO 9000 series) have to follow for maintaining the
export quality.

Quality has to be taken care by Mr. Khan, because excuses are not
entertained in international market for negligence for low quality garment
products. So, Mr. Khan has to produce high quality product, use latest design
and technological know- how.

Apart from superior quality of the garment, its pricing, packaging, delivery,
etc has to be also taken care of. Quality needs to be defined in terms of a
particular frame work of cost. So, Mr. Khan needs to follow focus strategy. It
means Mr. Khan has to focus on cost and quality at a time. Mr. Khan should
know to negotiate a premium price after quality assurance is done.

The garment shown in the catalogue should match with the final garment
delivered and the garment quality should match the samples shown during
taking the orders. It is important to perform according to the promises given
to the buyer. Because in international market, quality reassurance is
required at every point.

Proper documentation and high standard labels on the garment are also
important aspects as these things also create good impression.

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, which in turn results into consumer satisfaction,
high sales and foreign exchange. 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 local customers and foreign buyers. Therefore quality
control in terms of garment, pre-sales service, posts -sales service, delivery,
pricing, etc are essentials.

1.4 Effective management policies

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For overcome this type of problem Mr. Khan should hire higher educated persons by
providing high salary. Because they have the ability to give proper instruction to
their workers like- what the buyers want, what quality of work he expect, how the
work should do etc. Secondly, the workers are uneducated. For that they can not
adopt with the new technology. For such kind of problem Mr. Khan needed educated
workers so that they can easily adopt with new technology. On the other hand it is
easy to provide higher training to the educated workers. Mr. Khan should setting a
minimum wages and salary level and pays the salary and wages on time. And
workers should give large space so that they can move easily. It will make the
employee more motivated to their work and more devoted to the management
policies.

1.5 Conduct more research


Research is needed for every company to sustain in the market. Mr. khan should
conduct more research also because of changing of time and demand of customers
and buyers. The Mr. khan can hire research people to forecast the demand and
quality of product. To forecast the buyers demand the research people can talk with
the customers and buyers what kind of product and which quality of product they
want. The Mr. khan should research about his competitors and their strategy also. It
can possible by observing the competitors very carefully.

1.6 Effective export import system


The governments increase the facility for exporting garments product with a low
export duty and should give high dock facility. For cota system government should
negotiate with that countries imposes cota on our garments product and can do an
exchange deed with those countries. As the garments industry has a big
contribution in our economy and we earn a huge amount of foreign currency so
government should give extra emphasize on garments raw material by reducing
customs formalities.

1.7 Markets exploration

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Efforts should be made to develop new markets, at least in large Asian
countries such as Japan, China and India. This may help Mr. Khan to sustain
his garments growth in the increasingly competitive global market.

1.8 Mutual understanding


Mutual understandings remove the labor union problem. While taking a break from
the discussion is sometimes a good idea, always come back to it. If come up to the
situation with a constructive attitude, mutual respect, and a willingness to see the
other’s point of view or at least find a solution, then Mr. Khan will be able to make
progress toward the goal of a resolution to the conflict.
Instead of trying to ‘win’ the argument, look for solutions that meet everybody’s
needs. Either through compromise or a new solution that gives both what they want
most, this focus is much more effective than one person getting what they want at
the other’s expense.
1.9 Increasing productivity of workers

Operations are more efficient when employees perform just one task or only
certain aspects of a task in order for that job to be conducted at its highest
level. Continuous efforts should be exerted to reduce the cost of doing
business by increasing productivity.

To enhance the productivity of labor, intensive training, worker satisfaction and


proper motivation is essential. So, Mr. Khan has to provide on the job training for
increase skill of production. He also has to meet the workers demand to satisfy
them. Then the worker should be self motivated.

Better working conditions with reasonable pay may improve the situation to attract
mid to upper-mid level well-educated citizens of the society, which may help
improve the productivity of labor significantly.

1.10 Effective use of TQM


Total Quality Management is a management concept .The basis of TQM is to reduce
the errors produced during the manufacturing or service process, increase customer
satisfaction, streamline supply chain management, aim for modernization of

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equipment and ensure workers have the highest level of training. Mr. khan should
use TQM not only achieve the objectives set out in its policy and strategy, but also,
and equally importantly, sustain and build quality. Mr. khan should use TQM focuses
on encouraging a continuous flow of incremental improvements from the bottom of
the organization's hierarchy. It will make production smooth, increase production
quality as well as management quality.

1.11 Use of high technology

Mr. Khan has to provide flawless machineries to achieve better output. Mr. Khan instead of
going harsh against the workers must try to find out the real causes of low quality products and
time wastage factors if they really want to bring qualitative changes in their products.

1.12. Buying agent

Mr. Khan should use a buying agent who can do all sort of job on behalf of
the company and this will be very much handy, once company has enough
experience doing foreign trade then it can do all the procedures itself.

1.13 Ensuring efficient management of ports


• Operate the port for 24 hours a day
• Stop all toll collections that takes place at the entry and as well as within
the port.
• Encourage the establishment of more off dock container freight stations
(cfs) (both for exported and imported containers)
• Permit private sector to take over some of the functions of handling
containers. This will reduce the space pressure on the port and minimize
delays in handling raw materials.
• Simplify the administration of vessels entering the port and reduce the
number of forms to be completed -- from 40 (now) to 7 (as in most ports).

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• Activate the proposed Asian Development Bank loan project and
modernize Chittagong Port. The approach of the loan is to allow
privatization of some port operations
• Revise the antiquated Shipping Act, procure more equipment, and
construct the proposed new container port
• Banning all kinds of strikes within it
• Special export processing zones have been set up to ensure smooth
functioning of factories for export processing.
1.14 Increasing Competitiveness

For increasing competitiveness Mr. Khan has to keep the cost of production lower
than that of competitors, bring continuous innovation in technology, offering high
quality product at reasonable and take different promotional activates

2. Time problems

Time problems and solutions

Global Recession
Overcoming global recession

Lack of resource when needed Make Resource available

Lead time Manage lead time soundly

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Recommendation of time problem:

For the time problems showing above, we are giving the following suggestions:

2.1 Overcoming global recession

The BGMEA must look into it thoroughly and start thinking from now on
without wasting time regarding how to tackle the situation and keep our
products export on track which accounts for our foreign exchange.

2.2 Make Resource available


In garments factory electricity, gas and water are the most important. For this, Mr.
Khan should make own bio-gas plant and own electricity plant for their garments
and also can use big jars for sustain water. Government should also adequately
distribute these. Mr. khan should store sufficient amount of raw material in
warehouse to make the supply of raw material smooth and easy when needed. Mr.
khan should also find out alternative way to sourcing raw material to buy raw

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material in low cost when others price is high. Company should keep in mind the
following factors to select a supplier whether to home or abroad:

• Purchase price
• Technological capacity
• Distribution costs
• Reliability regarding just-in-time deliveries
• Service by the raw materials producer
• Quick response

2.3 Manage lead time soundly


Lead time is one of the main competitive factors among companies. The ability to
deliver quickly influences export, sales and thereby revenue. It normally includes all
activities from start to end. Lead time begins with the first receipt of a customer
order and ends with customer receipt of the product or service. Mr. khan should
always make available raw material, use high technology, skillful workers and
management team to finish the total process properly and meet the lead time.
Customer lead time = [{Information lead time} + {Order lead time}]
Total lead time = [{Information lead time} + {(manufacturing lead time) +
(shipping time for import fabrics) + (Shipping time for export final product)}
Mr. khan should reduce time in the following processes:

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The proposed structure is:

3. Money problems

Money problems and solutions

Fluctuation of international prices


Adopt with international prices

Negotiation for reduce tax rate


High corporate tax rate

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Recommendation of money problem:

For the money problems showing above, we are giving the following suggestions:

3.1 Adopt with international prices


When product price will fall in international market, then he should produce fewer
products and minimize the import. If in this moment he produces more products
and maximizes import, then for fluctuation in international market his product price
will be fall. For this reason, he can not success his business and sustain will be
impossible. To overcome this problem he should produce and import minimize
product.

Price Demand Production

3.2 Negotiation for reduce tax rate

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When any business organization firstly starts a business, then government do not
charge any tax on that business for first five years. After five years government
charge high corporate tax. To overcome high corporate tax rate Mr. Khan should
maximize the profit because from profit government do not charge any tax. He can
maximize the profit to develop his product quality.

Conclusion

Mr. Khan should continue the project for sustain his business and earn profit. We
think he will overcome all of his problems if he follows our suggested way.

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Appendix

The own part done by each group members are given in the next page with name
and id.

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