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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:

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

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.

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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.

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

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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:

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.

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1. Performance problems:

Performance problems and solutions

Poor communicationEffective Communication

Poor infrastructural design

Increasing Competitiveness

Low product quality

Wonderful infrastructural design

Low productivity of workers

Mutual understandingLabor union

Markets explorationLimited Export Market

Effective export import systemExport import barriers

Conduct more researchLack of research

Effective management policiesLack of management policy

Improving product quality

Failed to apply TQM (Total quality management)

Increasing productivity of workers

Effective use of TQM

Lack of high technology

Limited knowledge in international marketing information

Use of high technology

Buying agent

High competition

Ensuring efficient management of portsInefficiency in port management

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Recommendation of performance problem:

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.

Figure of Business Structure

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

customer and suppliers.

Figure of Team Communication

Director

Line Agent

Mr. Khan

Director

Line Agent

Line Agent

Line Agent

Line Agent

Line Agent

Local raw material Suppliers

Foreign Buyer

Manufacturer

(Mr. Khan)

Foreign raw material Suppliers

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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.

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

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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

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

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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

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.

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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 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.

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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).

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

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2. Time problems

Time problems and solutions

Global Recession Overcoming global recession

Lack of resource when needed

Lead time

Make Resource available

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 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}]

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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:

The proposed structure is:

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3. Money problems

Money problems and solutions

Fluctuation of international pricesAdopt with international prices

High corporate tax rate Negotiation for reduce 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

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.

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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.