The garments industry occupies a unique position in the Bangladesh economy. It is the largest exporting industry in Bangladesh. Merchandising is one of the most important parts of the garments trade. Without merchandising this trade never be fulfilling.
Merchandiser deals or handles all the things from buyer to production. He/she is the center for all the tasks. After getting an order, the merchandiser calculates all the things, what he needs to complete this order & make a nice plan by which he can do the shipment in time with the buyer’s requirement. At the factory level, the merchandiser makes all the orders for accessories needs for an order like; fabric need, sewing thread, button, washing if necessary, carton, polybag, shipment arrangement, etc. Actually, merchandisers make look at the whole progress.
Normally, the production people are always trying to do work in delay, thus many trouble can come for the shipment. But, the merchandiser always makes a good follow-up to work in time with the right quantity & right quality. On the other hand, the merchandiser deals with the buyers about order approval & comments. The activities involved in garments merchandising are normally done by a dynamic & expert person called merchandiser.
The function of a Merchandiser is known Merchandising. The term Merchandising has been derived from the word Merchandise which means goods that is bought and sold. At last, we can say that, merchandising is the heart of garments trade. Without this garments trade is valueless. So this part is more important in our future life.
Bangladesh’s position in Ready Made Garments (RMG) Industry
Clothing is always a basic requirement for human beings. Bangladesh is one of the leading producers & exporters of knit Ready-Made Garments (RMG) products. There are around 5000 garments factories in Bangladesh. The garments factory started to produce and export in the year 1980. Since then it was history and at present nearly 82% of our foreign currency is earned through RMG exports. Over the years the RMG sector achieved great expertise in the area of product development and more than 60 types of garments items are now being produced and exported. Some of the important export destinations are Germany, the UK, the USA, Japan, Canada, the Middle East, Australia, and many other countries in the Globe. An important advantage of our export is the cheapest labor cost.
The RMG business in Bangladesh started in the late 70s with merely a casual & cursory effort. The first shipment of woven was made in 1977. In 1981-82 the contribution of woven garments to total exports was about 1.10% whereas the agro-based then economy received much of her foreign earnings from Jute & Jute products famously known as the Golden Fibre. But with the passage of time from agrarian to manufacturing transformation Bangladesh developed significantly in areas of poverty alleviation, employment, women empowerment, industrial growth, and economic diversification – thanks solely to the labor-intensive RMG sector.
Following the trends in Bangladesh, the government continuously supports the industry in terms of rationalization of tariffs and taxes on imports of capital machinery, raw materials, dyes, and chemicals, and reduction of interest on long- and short-term loans. As a forward-looking attitude, at present, the Bangladesh government offers lucrative incentives for encouraging the use of local fabrics in the export-oriented garment industries. To encourage textile export, companies can import capital machinery duty-free. Cotton also may be imported duty-free. Moreover, the government recently has implemented several policy reforms to create a more open and competitive climate for foreign investment in the backward linkages of the industry.
Bangladesh’S Export Overview
The exports of Bangladesh have dramatically changed recently due to the diversification of items. Traditionally, Bangladesh was known as jute, tea, leather, and frozen fish exporting country. These products are primary agricultural products. More than 60% of the total export share was contributed by jute in the early eighties. This scenario is now totally changed. Non-traditional items, such as ready-made garments, leather goods (shoes), knitwear, handicrafts are now dominating factors in the exports of Bangladesh.
More than 60% of the export share is now contributed by ready-made garments. Due to the advent of containerization multimodal transport has created a new era in international trade. It has two advantages;
- Door-to-door service and
- Just-in-time service.
Exporters of Bangladesh take the MT as a strategic logistic tool. With the help of MT, they reduce their inventory cost in the port area, and at the same time they deliver their goods just in time to the buyer’s desired place. Bangladesh has two seaports; Chittagong and Mongla. 80% of the total trade and 90% of the export of the country are now going through these ports. In 1987, with the help of the railway, the country’s first inland clearance depots (ICD) were established in the Dhaka region, because 90% of the manufactured goods exporting industries are located in the Dhaka region. This ICD links with Chittagong port.
Exporters have already shown their keen interest in using ICD. For minimizing the transport cost, Govt. of Bangladesh has a plan to establish another ICD in the Dhaka region with the help of inland waterways. After the completion of this inland container port, the competition will rise between the railway and inland waterway, which is ultimately favorable for the exporter giving a better choice of mode of transport.
Bangladesh is a place for value-adding activities. Labor cost is relatively cheap in Bangladesh. It is one of the advantages of exporters for reducing the production cost. Transportation is another factor for reducing the total cost. In the case of ready-made garments, Bangladesh first imports the fabrics then carry out value-adding activities, and at last exports the finished goods. Time is very important here. “Just in time” receiving the raw materials and “just in time” delivery of the finished goods is essential for achieving the total trade I-off. Only multimodal transport (MT) can provide this type of service.
With the help of MT readymade garment exporters import the fabrics phase by phase and export the goods on a group basis. Storage costs, in that case, are minimal and the productivity of the factory is at an optimized level. For competing in the world market, the export policy has been designed to help exporters to plan their export market and product development work, so firming up the export base of the country on one hand, and to strengthen the product base of export through diversification of product and expansion of export market on the other.
Logistic Strategy of Ready-made Garment Industry in Bangladesh
Ready-made garments depend upon imported fabrics. Unfortunately, Bangladesh does not have enough textile mills to produce the fabrics to fulfill the demand of the ready-made garment industry. So, 80% of the fabrics are imported from abroad. On the other hand, 100% of the raw material of the jute mill i.e. raw jute, is locally procured. So, the ready-made garment industry bears extra import-related costs.
It has already been mentioned that the ready-made garment industry depends upon imported fabrics. Bangladesh normally imports fabrics from Asian countries; principally Hong Kong, Singapore, Taiwan, Pakistan, and India. On the other hand, the readymade garment exports to the U.S.A. and EU countries. So, the point of origin and the point of destination are two different parts of the world. In the middle, Bangladesh is a place for value-adding.
Transportation is very important here in the total logistic cost because transportation is involved twice in such kind of industry. Firstly, fabrics are needed to be transported transport from the point of origin to the factory, then in the factory, fabrics are converted into garments, and finally, garments are transported to the final destination. Time is very important here. Usually, the procurement time of fabrics is 5-7 days. Value-adding activities occur over 7 days and the final transportation time depends upon the location of the destination and what mode of transport or combination or mode of transport is used. Usually, it takes 30 to 34 days for EU countries and U.S.A, if the main transportation is occurred by sea.
This industry emphasizes just-in-time receipt and delivery because the industry tries to avoid the storage of raw materials and finished goods. The ready-made garment industry is interested in procuring the fabrics in small lots rather than in larger quantities. Production activities take 7 days. After 7 days another shipment is needed at the factory floor. In this way, the industry saves the storage costs of raw materials. On the other side, after 7 days finished products are ready to export. So, frequent transportation is essential for this type of industry. Multimodal transport can act as a catalyst. With the help of MT, the exporter can minimize the storage cost and receive the imported raw material just-in-time and deliver the finished products also just-in-time.
Transport Cost-Benefit Analysis in RMG Sector in Bangladesh
It is already mentioned before that international transportation is involved twice in ready-made garments. For simplicity, the value considered here is the average value rather than the exact value.
Table 1: Transport cost of imported fabrics
| Freight (Port to Port) | Cost (20′ container) |
|---|---|
| Singapore to Chittagong | US$ 600 |
| Hong Kong to Chittagong | US$ 900 |
| Taiwan to Chittagong | US$ 900 |
| Pakistan to Chittagong | US$ 1100 |
| India to Chittagong | US$ 700 |
Table 2: Container handling charge
| F. C. L Container | US$ 43.40 |
| L.C.L Container | US$ 130.00 |
Table 3: River dues
| F. C. L Container | US$ 10.20 |
| L. C. L Container | US$ 13.64 |
| L. C. L Container unstuffing charge | US$ 36.8 |
Table 4: Total cargo-related transport cost of imported fabrics through Chittagong port
| Import from | F. C. L | L.C.L |
|---|---|---|
| Singapore | US$ 653.60 | US$ 730.44 |
| India | US$ 753.60 | US$ 330.44 |
| Hong Kong | US$ 953.60 | US$ 1030.44 |
| Taiwan | US$ 953.60 | USS 1030.44 |
| Pakistan | US$ 1153.60 | US$ 1230.40 |
Table 5: Cargo related transport cost of export of ready-made garments (from Chittagong port to various destinations)
| Freight | (20′ Container) |
|---|---|
| Chittagong to New York | US$ 3,000 |
| Chittagong to Los Angles | US$ 2,500 |
| Chittagong to Rotterdam (EU Countries) | US$ 1,300 |
Table 6: Container handling charges
| F. C. L. Container | US$ 43.40 |
| L. C. L. Container | US$ 130.00 |
Table 7: River dues
| F. C. L. Container | US$ 4.60 |
| L. C. L. Container | US$ 6.12 |
| Staffing charge for L.C.L container | US$ 36.80 |
Table 8: Total cargo-related transport cost of export of ready-made garment
| Export to | F. C. L | L.C. L |
|---|---|---|
| East coast of U. S. A | US$ 3048.00 | US$ 3172.92 |
| West coast of U. S. A | US$ 2548.00 | US$ 2672.92 |
| EU Countries | US$ l348.00 | US$ 1472.92 |
Here we are assuming that the factories are situated within a 5 km radius of the port area. So, other cargo-related costs are neglected here. In fact, most of the ready-made garments factories are situated in the Dhaka region, which is by road 264 km, by rail 346 km, and by inland waterways 307 km away from Chittagong port.
Only rail is capable here of carrying a full container load from Chittagong port to the destination i.e. Dhaka ICD. the two other modes are not capable enough of carrying the fully loaded container. However, road haulage is capable of carrying the containers cargo in a break-bulk form, which means, the cargo of one container is carried by two 5 tons’ capacity trucks. Inland waterways are not capable of carrying container cargoes in any form.
The following is a comparison of the cost of road haulage and rail carriage from Chittagong port to Dhaka ICD and visa-versa. One mode is related to multimodal transport and the other is not. For road haulage, import and export freight is the same Road transport cost (For one 20′ container’s cargo equivalent).
Table 9: Freight rates for Import cargo through rail carriage (from Chittagong port to Dhaka ICD)
| Component | Rate |
|---|---|
| Freight | US$ 200.00 |
| Loading charge | US$ 40.00 |
| Others | US$ 15.00 |
| Total | US$ 255.00 |
| (For one 20′ containers cargo equivalent) | |
Table 10: Freight rates for Export cargo through rail carriage (from Dhaka ICD to Chittagong port)
| Component | Rate |
|---|---|
| Freight | US$ 150.00 |
| Container handling charge | US$ 40.00 |
| Others | US$ 10.00 |
| Total | US$ 200.00 |
| (Applicable for 20′ Container) | |
So, regarding cargo-related transport costs using ICD, it is more economical than non-using ICD. If we accumulate all related costs of the ready-made garments, its share of transport costs is within 8% to 10% of the total cost.
Mohammadi Group Ltd, Bangladesh
Executive Summary
Mohammadi Group is one of the leading garments manufacturers in Bangladesh. Starting its operation in 1986 with only 52 workers. Though it is mainly a garments manufacturer, over the years it has diversified into different industries like Real Estate, Power Generation, Information Technology Services, and High-Tech entertainment. Mohammadi Group will ensure sufficient training and suitable work to increase the productivity and skills of the employee.
Now Mohammadi Group has a 157000 square feet area and production capacity is around 6,70,000, a number of machines 2,500 and number of employees over 8,000. In the garment’s arena, currently, they are manufacturing woven shirts and blouses in their own woven units. It is also one of the top sweaters manufacturers in Bangladesh and its customers include many world-renowned brands like H&M, C&A, Zara, Esprit, Sears, Wal-Mart, Target Stores to name a few.
Mohammadi Group is an ISO 9002 certified company. Mohammadi Group is also a member of BGMEA. The name of the associated companies of Mohammadi Group is: WOVEN GARMENTS MANUFACTURING
Production Units and Capabilities
- MG SHIRTEX LIMITED
- Number of Production Lines:06 (Six)
- Product Range: Men’s & Boys Dress and Casual Shirts, Ladies Blouses.
- Production capacity:1,80,000 pcs/month
- Production Area:45,000 sqft.
- MOHAMMADI GROUP LIMITED (MGL)
- Number of Production Lines:06 (Six) Lines
- Product Range: Men’s Dress and Casual Shirts
- Production Capacity: 1,80,000 pcs/month
- Production Area: 35,000 sqft.
- THE MOHAMMADI LIMITED (TML)
- Number of Production Lines: 04 (Four) Lines.
- Product Range: Men’s Dress and Casual Shirts
- Production capacity: 1,10,000 pcs /month
- Production Area: 27,000 sqft.
- ARROW APPARELS LIMITED
- Number of Production Lines: 10 (Ten)
- Product Range: Men’s Dress and Casual Shirts.
- Production capacity: 2,00,000 pcs/month
- Production Area: 50,000 sqft.
Table 11: Mohammadi’s Company Overview
| Product/ Service provided | Garments |
|---|---|
| Main Manufacturing Item | Men’s and Women’s Shirt, T-shirt, Tank Top, Polo shirt, Sweatshirt, Rugby shirt, Fleece jacket, Sear fine, Fashionable knit, Sweater Girls and children dress with printing and embroidery. |
| Production Capacity | 6,70,000 pcs per month |
| Year Started | 1986-2014 |
| Number of Employees | Above 8000 People |
| Focus Market | Worldwide |
| Factory Size (sqft) | 157000 sqft |
| Export Percentage | 100% |
| Export Countries | China, Germany, Spain, France, Italy, USA, Canada, Poland, AUS, UK. |
| Machinery | The factory is set up with brand new imported Machinery from Japan, the UK, Singapore, China, and Germany. At present, a total of 2500 sets of machines & equipment is installed and operational. the machines like conveyor type lock metal detector, thread removing, etc. |
| Sewing Machine Brands | Brother, Juki. |
| Head Office | Mohammadi Group Lotus Kamal Tower-1, 10thFloor, 57 Joar Sahara C/A Nikunja-2 (New Airport Road), Dhaka 1229 |
| Factory Name and Location | Mohammadi Group Limited (MGL). KA-52/A, Khilkhet, Dhaka-1229 |
| Buyers | H&M, C&A, Zara, Esprit, Sears, Wal-Mart, Haggar, Primark, BlackBerry, Green Coast, etc. |
Business Process
- Delivery lead time: After order confirmation, the company requires 20 days for approval sampling, which involves making up samples of incorrect sizes, colors, and yarn, for approval. Upon confirmation of the samples, about 45/60 days are required for production, depending on the product, order quality, and time of year.
- Sample delivery charge: A full sampling service is available to meet all design needs. Delivery costs of all sending samples in all the steps of order processing up to shipment are on buyer’s
- Payment terms: make payment by T/T for all orders 100% in advance. For a larger amount payment must be made by irrevocable and transferable L/C in their
Garments Manufacturing Process Overview
Stepwise garments manufacturing sequence on the industrial basis is given below:
- Design / Sketch
- Pattern Design
- Sample Making
- Production Pattern
- Grading
- Marker Making
- Spreading
- Cutting
- Sorting/Bundling
- Sewing/Assembling
- Inspection
- Pressing/ Finishing
- Final Inspection
- Packing
- Dispatch
This is the Basic Production Flowchart of a Garment followed in Mohammadi Group Ltd, Bangladesh. In advance, some of the processes can be added or removed. Here is a brief discussion of major process steps of Garments & Apparel Manufacturing Technology:
- Design or Sketch: Before making apparel of garments we must have to design or sketch the appearance completely. It helps us at the further process to monitor the manufacturing faults and process
- Pattern Design: Every piece of Apparel or Garment is built upon a pattern is made by the standard sizes of Men and Women. We must have to make a pattern to follow while manufacturing a garment product. It saves time and increases the rate of accuracy of making.
- Sample Making: Before going for bulk production; it’s a smart step to make a complete sample of the desired apparel. After making the sample if the production manager thinks that this is okay; then further bulk apparel or garment production is to be carried out by following the exact size and quality of that
- Production Pattern: After making the cloth sample that has been mentioned in the previous process step; it’s wise to make a production sample that will be hung out in front of every laborer that is recruited to make this clothing
- Grading: Grading is done in order to grade various sizes of garments in a separate place so that it would be easier to inspect and maintain the export works at
- Marker Making: Market making is the process to sketch on fabric before cutting it. The market is to be in the standard size required by the buyers.
- Spreading: After making a market; we have to spread the whole fabric over the spreading table in order to put a Marker and pattern over it.
- Cutting: After successfully spreading the fabric and putting all the marks and sketches by the marker; this is the time to cut the fabrics according to
- Sewing & Assembling: Each of the parts of clothing should be sewed or assembled in order to make complete apparel that is wearable.
- Inspection: In this step of the garment manufacturing process each of the complete apparel or garment is to be checked and rechecked. If any fault is found; then the whole process should be repeated.
Mohammadi Group Ltd also has its own CAD system for Pattern Making. Computer-Aided Design (CAD) becomes an essential tool for making and related jobs in the garment industry. In the apparel industry, CAD software is used for pattern making, grading of patterns, marker making, and digitizing manual patterns.
There is a number of CAD software suppliers who have developed CAD systems. CAD is used the find the quantity of consumed fabric of every piece of product. CAD tries to reduce “Break” among the parts. That means reducing the gap is equal to increasing the level of efficiency. More efficiency indicates a decrease in the quantity of fabric for producing garment products.
Sampling Process
Table 12: Sampling Process at Mohammadi Group Ltd, Bangladesh
| Sketch | Generally, Sent from buyers. |
| Pattern | Create the structure of the sample by using hard paper. |
| Develop | Create the structure of the sample by using fabric (not actual fabric). |
| Fit | Make sure to fulfill the buyer’s demands. If 1st fit sample is rejected by the buyer, send 2nd fit sample (if needed). [Use actual fabric in this stage]. |
| Photo | Photo of the sample sent to the buyer (If require/buyer’s need). |
| PP Sample | (Pre-Production) Ultimate sample before manufacturing. If buyer confirms fabric, color, GSM, labels, measurement, etc. then move to Production. |
Sampling Department starts its activities after receiving the original sample or sketch sample from the buyer with an intention to testify the capability of Mohammadi Group to meet the desired standard of the products. Two people contribute toward the efficiency of the sampling dept. They are sampling man and pattern master of Mohammadi Group.
Merchandising
The merchandising which is related to garments is called garments merchandising. A garments merchandiser’s main term is to buy necessary raw materials such as fabric, accessories, etc., and then made garments by those products and sell those garments. Duties of a Merchandiser:
- Merchandisers must work very closely with Buyers and determine the range of goods to be sold.
- When to buy
- Their
- Merchandiser responsible for a range of merchandise, contents, price and give policy guidelines to Buyer.
- Merchandiser could also be responsible for promotion, display, sales forecast, and stock
Merchandising Activities in Mohammadi Group Ltd
- Getting an order of a particular garment
- Buying raw materials & accessories
- Producing garments
- Maintaining required quality level
- Exporting the garments within the scheduled time
Role of Merchandiser
- Receive tech pack & quotation from
- Check consumption of fabric &
- Prepare price quotation and send to
- Send development / LA sample as per GAP standard procedure &
- Negotiate labels, lining, fabric, and metal items price after order
- Booking of Fabric, Trims &
- Receive Proforma Invoice / Sales Order from supplier & sign back the same to supplier for their bulk production proceeding confirmation.
- Follow up L/C opening and
- Settlement of claim issues for fabric and
- Make T&A, CPS, and update within 15 days.
- Update & follow up order information with planning
- Send sample (JSS, RE, AD, PP, GPT, SEALER/TECHNICAL TOP & TOP) to the buyer for approval & follow-up.
- Ensure bulk fabric & trims all are in
- Send trims swatch cards to the buyer for
- Prepare order file for the buyer
- Make executive summary sheet & order sheet a factory
- Make destination wise vessel
- Attend PP meeting to start
- Develop shade band and submit to the buyer for approval & follow
- Follow up safety
- Attend day to day production
- Work in process update to
- Send Top of the Production (TOP) sample to buyer for approval & follow
- Make EDI & provide it to
- Prepare inspection
- Follow up final inspection
- Receive Inspection Certificate (IC) copy from buyer QA & send the same to the commercial (Export) department for further proceeding.
- Vessel booking in E-sps for
- Prepare closing summary
Shirt Order Analysis In Mohammadi Group Ltd
Now, we will understand the complete order analysis and costing process involved in manufacturing an H&M Shirt.
Design studio
The first step is always done by the design studio when the collection type was fixed along with the meeting date in Spain. The designers first sat on a meeting internally by teams to decide their styles. So, while a team had prepared bottom items others had prepared tops items. It is a shirt that can be classified into a group of Tops. This Tops section team is led by Nibedita Bhabani where the other two designers are included also. In the case of preparing this Shirt, designer Nurjahan Akter made the primary design.
For a limited time span, they sorted out some old patterns of their collections where they got a style of a similar product named “Emilda”. So, they found out the pattern and the measurement of it. They prepared the shirt similar to the original design sent by the buyer named “Emily”.
Two seasons are generally counted in the fashion industry which are Summer/ Spring (SS) and Autumn/Winter (AW). So, the picture of samples they got from the buyer side was a Shirt for the summer season and the month was currently going on February. So, the Shirt was about to be confirmed for this summer season in 2013.
The design studio made the dress with a very light, soft georgette fabric. According to the measurements, they sewed the shirt with 1 pocket on the right panel. They have used here random bleach wash which is a heavy wash for giving the cloths whiter look and they sent it with their meeting team in mid-February.
Product Pack
The product pack is the first detail of the product that comes from the buyer. This product pack is contained with fabric type, order process, their description of interest, trims description, wash description, and measurements. The pack also contains amendments if the supplier sent any samples before. Overall, it is the reflection of buyers’ wants and demands.
Many requirements are also described here to fulfill. The product pack has three parts – the first part contains the mail and official order for making samples of a particular style with their different instructions of fabric wash and fit comments. The second part is attached with the picture of the style with important instructions suppliers need to follow, here also the trims instruction and reference are given. The third part contains the measurement sheet. It consists of the measurements that the supplier needs to maintain according to their size chart. After the meeting in Spain, the design of Emilda had been given by H&M for reference and with some changes, they sent the product pack on February 18, 2013, to place an order for Emily.
Here, with the pattern file, they sent the mail with all the requirements and instructions. Here, at first, the client part changed the name of Emily to Harriet. They wanted to have their reference by the name of Harriet. Second, they sent here their desired fabric, which has the code GPP 1455. Actually, this fabric was not used by the Mohammadi Group Ltd design team rather they used the fabric with the code GPP 1311. The reason for changing the fabric can be the color of the finished product that Mohammadi sent.
The sample sent by Mohammadi had a bit yellowish look after wash which was not demanded by H&M. They wanted a clear look at the product. They also instructed about the wash of the garment. Trims were also instructed. The buyer sent Mohammadi their original trims or, buttons, the fusing. Thread is also mentioned there. They wanted to use the same thread for sewing as a sample sent in Spain.
At last, they instructed about the style of the product they wanted to see. They selected the pattern and the style of the supplier but they have changed it in various portions according to their demand. They had different thoughts about the fit of the product. Fit means style and outlook of product which is mostly related to the measurement of the garment. They sketched the placement of buttons, cutting of collar shapes, yoke panel style, and canceled the darts at the back which refers to a sewing style. So, they shared the following Tech Pack of the Harriet Shirt
First Fit
After sending the first fit Mohammadi got their reply from the buyer. As Mohammadi was confirmed about the order from the meeting, they did the changes according to the buyer by the first week of March. In the product pack, the buyer changed the measurements so they needed to follow the new pattern sent by the buyer. This pattern file is a special artwork file uploaded by the buyer with which the pattern team works. This pattern rectification is mandatory for all the styles Mohammadi supplies to the customer. This pattern is also used to measure the cost of the garment for knowing the consumption of the fabric for the product.
After completing the pattern rectification, the garment goes for sewing. Here, the design studio directly does not develop any changes of the style, according to the buyer’s requirements; the development team of the marketing department arranges this. For the style Harriet, they wanted to change the fabric. And remade it as they wanted without the twist, pockets in front, and their suggested button placement. So, with these, all corrections Mohammadi sent the first sample for fit and got the comment after one week they sent it. Now, the fabric was approved but in the case of measurement, the approval was not ok for the garment.
At the first product pack, they included the sleeve but at the time of comment, they did not like that and wanted to add another hanger neck inside. There was another style CAMI Lace Dress was also going on parallel and H&M used things from there as a reference of Harriet. The buyer wanted to change the thread as well with the after wash look as they wanted it pure white. The garment looked yellowish after wash which was not preferred by H&M.
Second Fit
After these all comments the responsibility of merchandisers was to get all the trim sources and arrange all the requirements H&M wanted. So, they tried to source all these and according to that, they sent their second fits in the last week of March ‘13. After that, they have got a comment from the H&M local office about the fit. According to the fit’s comments, the fabric is ok as the approved one. Thread is ok in this case with what they were not satisfied with before.
The main problem Mohammadi again faced is the measurement which is fluctuating with the original reference. The buyer sent a measurement of 15 cm. So, they needed to send the same style again. The fabric was used by the team of Mohammadi was 15 cm in length after sewing but just after the wash, it got shrunk. Firstly, it has been arranged locally for minimizing the cost but then the fabric does not work the right way so they need to change it and for the further procedure they used the imported fabric. The fabric used in the placket of Harriet is appreciated by the buyer and during the unavailability of the prior fabric they have ignored it for piping but the buyer wanted the same fabric they used at the time of collection.
The Wash of the fabric is adjusted in this sample, but the buyer wanted Mohammadi to follow the leg mock sent prior to getting approval. But the main problem of adjusting fabric is there and as this is the confirmed order buyer requested them to send an urgent size set as the delivery date was very near. So, it was decided to source the fabric from China.
Size set sample
As the order is confirmed and after the second fit sample the supplier Mohammadi sent the size set to the buyer and then the fabric problem is requested to ignore. This time the wash is sent as the buyer wanted that the light bleach wash which creates an ‘Ecru’ color of georgette and the wrong measurement has also been corrected.
In case of size set if different color remains then jumping sizes are provided by the suppliers like fixing the Medium size other colors are sent one-pieces for one sample. So, before of size set only the Medium size sample has been manufactured but for the size set samples of all the sizes of the size chart are needed. So, the pattern is made in a new way for different sizes. It requires grading. At that time, the calculation of different sizes varies, and a mismatch of measurement can be occurred for doing the grading. The problem occurs here for the change of Fabric roll also. Depending on the characteristics of fabric it sometimes got shrunk and sometimes stretched.
Here, in the case of Harriet, there are no different color shades and wash instructions available. So, just follow the size chart of H&M, Mohammadi sent the size set to the buyer. Here, the responsibility of the Development team is over now, the production team will take the workflow and further procedures for sending Harriet to Spain will be done by the Production team.
Production process
The first part of the production process is sending the PP sample which refers to Pre Production sample where all actual trims, fabric, and wash standard is followed. Generally in case of different colors sample of all sizes with all colors are sent but in case of Harriet, there is just one color so, the sample is sent off four pieces of different sizes. Like, the Small (S), Medium (M), Large (L), Extra Large (XL) are sent to the buyer as sample size. All samples go through the local office of H&M so, eight samples were sent as pre-production samples (PP samples) for style Harriet.
Costing
For, the Production Process Merchandisers need to collect the cost of all the fabric and trims. They need to calculate the consumption of fabric here and also the pattern size. The complicacy of the style and the trim price is also included to count the cost of any garment. Accessories like the label, hangtag price is also included with the costing sheet. Here, for completing the costing part merchandise needs the pattern file first for assuming the consumption of fabric and then, they need to count the trim’s price attached in the garment. In this case, they also need the spec sheet.
Then, the production team needs the labor cost. There is an Industrial Engineer who calculates the time that every part of samples needs to sew and the cost of the labor for these hours. The price of trims is very important in case of measurement of the garment. In some cases, it captures a very big part of the cost. Here, in the case of Harriet shirt, polyester fabric and fusing are used in the design of this shirt both of these are very special items, and these are not very easily available to the source. So, the cost of this type of item is a bit high, and adding the profit margin it reaches the crossline buyer wants to agree. So, this is the moment of challenge a supplier faces to ship its clothes.
Garment Specifications
Table 13: Harriet Style Shirt Specifications
| Fabric Type | Georgette |
| Composition | 100% Polyester |
| GSM | 100 |
| Fusing Type | Interfacing |
| Composition | 100% Polyester |
| GSM | 80 |
Fabric Consumption of a single garment
| Component | Required Fabric Formula | Example |
|---|---|---|
| Back part: The part of a garment, which covers the back part of the human body. | [(Center Back Length + Allowance) x (1/2 Chest + Allowance)/36] / 44 | [(31″ + 2″) × (24″ + 2″) /36] / 44= 0.541yds |
| Yoke: A shaped piece of fabric in a garment, fitted about or below the neck and shoulders, from which the rest of the garment hangs. It can be split in two, called the ―split yoke. | [(Yoke Length + Allowance) x (Yoke Width + Allowance)/36] / 44 | [(21″ + 4″) × (4″+ 1″) / 36] / 44= 0.079yds |
| Front part: The front part of a shirt. | [(Body Length + Allowance) x (1/4 Chest + Allowance) x 2 /36] / 44 | ([{31″-1 ¼” + 1″} × {12″ + 2 ½”}] 2″ /36) / 44= 0.562 yds |
| Sleeve: The part of a garment that covers the arm and is usually cut wider than the cuffs. Most sleeve lengths fall between 32 and 36 inches. | [Sleeve Length – (1/2 Drop Shoulder + Allowance) x (Arm Hole Depth + Allowance)} x 2 / 44 x 36 | ([{34 ½” -11″} +1″] × {21″ +1″} × 2 /36) / 44= 0.68yds |
| Cuff: A fold or band serving as a trimming or finish for the bottom of a sleeve. Some cuff styles include French Cuffs and Barrel Cuffs. | [(Cuff Length + Allowance) x (Cuff Width + Allowance) x 2] /36 x44 | [(9″ + 3″) × (2 ½” + ½”) ×2 /36] / 44= 0.05yds |
| Collar: The part of a shirt that encompasses the neckline of the garment, often to fold or rollover. Comes in various shapes, depending on the face shape and occasion. | [(Collar Length + Allowance) x (Collar Width + Allowance) x 4] /36 x44 | [(16″ + 5″) × (2″ +1″) × 4/36] / 44=0.159yds |
| Total Consumption for one Garment | 0.541+0.079+0.068+0.05+0.159 = 0.766 yds/per piece |
Marker Planning
The marker shown above has width = 1.55 yds and length = 11.54 yds, so the area of the marker = 17.887 yds2 and has accommodated all the panels of 20 complete Formal Shirts in it.
Also, from the picture we see that the efficiency = 85.75% Now, to find the fabric required for 1 pc of Formal shirt,
Marker efficiency of the above marker = (Area of all the patterns / Area of the marker) x 100% 85.75% = [(Fabric reqd for 1 Shirt x 20) /17.887] x 100%
Fabric reqd for 1 Shirt = 0.766 yds2
Since the width of the marker is 56 inches = 1.55 yds and we will leave 4 inches of allowance at the time of cutting, so we will fabric of 60 inches = 1.66 yds
We found that the area of the fabric required to make 1 Shirt = 0.766 yds So, length of fabric required to make 1 Shirt = 0.766/1.66
= 0.461 yds
Cost of georgette fabric = $2.253/yds.
Total Fabric consumption of 1 Shirt = 0.461 yds
Cost of Fabric required to make 1 Formal Shirt = $2.253 x 0.461 = $1.0386
Cost of Fusible Polyester Interfacing = $0.9/yds. Total Fusing consumption of 1 Shirt = 0.03 yds
Cost of Fusing required to make 1 formal shirt = $0.9 x 0.03 = $0.0270
Cut-Trim Make
CUTTING
Cutting cost = (Cutting of the garment x Minute cost of the labor)/Line efficiency (%)
= (0.5 x 0.6)/0.6
= $0.5
STITCHING
Total SAM of the Shirt = 11.46
Total Stitching Cost to stitch 1 Shirt = $1.205
THREAD
0.25yds of thread is consumed to construct one Shirt and $0.250/yd is the price. So, $0.062 is the cost of thread required.
FINISHING
The average finishing cost per Shirt is approximately about $1.
BUTTONS
Table 14: Buttons Specifications
| Specification Detail | (PB/2H-H) |
| Material Plastic | Material Plastic |
| Size | 16L |
| Holes | 2 Holes (High) |
| Color | Clear |
| Finish | Imitation Corozo |
These specific buttons are used in Shirt which cost $0.036/pcs. 10 buttons are used in the So, to produce 1 Shirt, cost of buttons is $0.360.
LABEL
This H&M Shirt contains the following 3 labels attached to it.
- Main Label (CONSCIOUS 18001) which costs $0.1 per piece
- Care Label (HM30012) which costs $0.01 per piece
- Size Label (Conscious22000) which costs $0.005 per piece
PACKAGING MATERIAL
The following packaging materials are used in 1 Shirt Sleeve Binding = $0.025/pc
Hang Tag = $0.020/pc Poly Bag = $0.002/pc
Carton = $0.05/pc
OVERHEAD
Factory overhead includes both variable and non-variable indirect manufacturing costs. Factory overhead costs are exclusive to each industry; however, they are normally subdivided into:
- Indirect labor
- Factory occupancy costs
- Other overhead
Total Material Cost = Total Fabric Cost + Total Trims Cost + Total Packaging Material Cost
= 1.0386 + 0.0270 + 0.624
=$1.6896
Total Labor Cost = Cutting Cost + Production Cost + Finishing Cost
= 0.5 + 1.205 + 1
= $2.705
Total CMT = Total Material Cost + Total Labor Cost
=$1.69 + $2.705
=$4.395
Even though the Overhead Cost Percentage varies for every manufacturing unit, we have taken an average overhead percentage for Bangladesh Garment Industry i.e. 12%.
So, Overhead Cost of Shirt is:
= 12% of CMT
= 0.12 x $4.395
= $0.5274
OVERALL COST
The Manufacturing cost of the making of a Shirt is:
= CMT + Overhead cost
= $0.5274 + $4.395
= $4.9
Upon adding the Profit Margin of 15% of Mohammadi Group Ltd, we get:
=$4.9 + (0.15 x $4.9)
=$4.9 + $0.753
=$5.653
By applying a multiplier of 4 for H&M’s Brand value, we get the selling price of the H&M Shirt
= $22.612
Cost Sheet
Table 15: Cost Sheet of H&M Shirt
| S No. | Operations | SAM | Cal time(45%) | Labour cost/min | Total labour cost |
|---|---|---|---|---|---|
| PREPARATORY | |||||
| 1 | Pinning of profile | 0.23 | 0.34 | 0.052 | 0.018 |
| 2 | Run stitch collar | 0.22 | 0.32 | 0.052 | 0.017 |
| 3 | Trim collar | 0.29 | 0.41 | 0.0052 | 0.021 |
| 4 | Clip & turn collar | 0.22 | 0.32 | 0.052 | 0.017 |
| 5 | Crease collar | 0.38 | 0.55 | 0.052 | 0.029 |
| 6 | Top stitch collar | 0.42 | 0.6 | 0.052 | 0.032 |
| 7 | Run stitch collar band | 0.29 | 0.42 | 0.052 | 0.022 |
| 8 | Crease collar band | 0.32 | 0.46 | 0.052 | 0.024 |
| 9 | Insert collar in neckband | 0.80 | 1.16 | 0.052 | 0.060 |
| 10 | Turn & crease collar | 0.45 | 0.66 | 0.052 | 0.034 |
| 11 | Attach bias piece to cuff | 0.87 | 1.27 | 0.052 | 0.066 |
| 12 | Crease cuff(left) | 0.46 | 0.66 | 0.052 | 0.035 |
| 13 | Hem cuff | 0.50 | 0.73 | 0.052 | 0.038 |
| 14 | Run stitch cuff | 0.57 | 0.82 | 0.052 | 0.043 |
| 15 | Trim cuff | 0.36 | 0.52 | 0.052 | 0.027 |
| 16 | Turn cuff | 0.53 | 0.76 | 0.052 | 0.040 |
| 17 | Crease cuff bottom | 0.57 | 0.82 | 0.052 | 0.043 |
| 18 | Attach placket to sleeve | 0.80 | 1.15 | 0.052 | 0.060 |
| 19 | Lock & make diamond | 1.03 | 1.49 | 0.052 | 0.077 |
| 20 | Attach front placket | 0.60 | 0.87 | 0.052 | 0.045 |
| 21 | Sew pleats(2) | 0.24 | 0.35 | 0.052 | 0.018 |
| 22 | Hem pocket mouth | 0.28 | 0.41 | 0.052 | 0.021 |
| 23 | Attach pocket to the front | 0.86 | 1.25 | 0.052 | 0.065 |
| 24 | Attach brand & size label | 0.59 | 0.85 | 0.052 | 0.044 |
| ASSEMBLY | |||||
| 25 | Attach yoke to back | 0.48 | 0.69 | 0.052 | 0.036 |
| 25 | Join shoulder | 0.64 | 0.93 | 0.052 | 0.048 |
| 26 | Attach collar | 0.54 | 0.78 | 0.052 | 0.040 |
| 27 | Sleeve attach | 0.86 | 1.25 | 0.052 | 0.065 |
Cutting, Finishing, Trims, Accessories, Fabrics, and Overall
| CUTTING | Labor cost ($) | |||
| 1 | Collar (2) | 0.50 | ||
| 2 | collar band(2) | |||
| 3 | cuff(4) | |||
| 4 | Front(2) | |||
| 5 | Back | |||
| 6 | Yoke(2) | |||
| 7 | ||||
| 8 | Cuff fusing | |||
| 9 | Collar fusing | |||
| 10 | Ticketing & bundling | |||
| FINISHING | ||||
| 1 | Buttonhole | 1.00 | ||
| 2 | Button attach | |||
| 3 | Washing | |||
| 4 | Pressing | |||
| 5 | Folding | |||
| 6 | Packaging | |||
| Total | 2.705 | |||
| TRIMS & PACKAGING MATERIALS | ||||
| S no. | Items | ($)Rate/Pc | Consumption | Cost ($) |
| 1 | Main Label | 0.100 | 1 | 0.100 |
| 2 | Size Tab | 0.005 | 1 | 0.005 |
| 3 | 2-Hole Button | 0.036 | 10 | 0.360 |
| 4 | Thread | 0.250 | 0.25 yds | 0.062 |
| 5 | Sleeve Binding | 0.025 | 1 | 0.025 |
| 6 | Hang Tag | 0.020 | 1 | 0.020 |
| 7 | Poly bag | 0.002 | 1 | 0.002 |
| 8 | Carton | 0.050 | 1 | 0.050 |
| Total | 0.624 | |||
| FABRICS | ||||
| S no. | Items | Rate/yds | Consumption(yds) | Cost ($) |
| 1 | Fabric | 2.253 | 0.461 | 1.0386 |
| 2 | Fusing | 0.900 | 0.03 | 0.0270 |
| Total | 1.0656 | |||
| OVERALL | ||||
| 1 | Total Material Cost | 1.6896 | ||
| 2 | Total Labour Cost | 2.705 | ||
| Total CMT | 4.395 | |||
| Overhead cost | 12% | 0.5274 | ||
| Manufacturing cost | 4.9000 | |||
| Profit % | 15% | 0.753 | ||
| PRICE | $5.635 |
Sourcing
For Mohammadi Group Ltd, fabric and trims are the raw material that needs to be outsourced. Sourcing is basically determining the most cost-efficient vendor of materials, production, or finished goods at the specified quality and service level. It is closely associated and an important part of apparel merchandiser’s responsibility. Materials basically include piece goods that will be cut and converted into garments. Not only does the fabric have to be appropriate and suited to the garment design and end-use but it must also be made available at the precise time when it is needed.
Thus, lead times play an important role in sourcing and placing orders for the materials required for the production. Lead times required from a supplier can vary from as little as two weeks to as much as nine months. Trims are all the materials other than the piece goods that are required to make up a garment. Findings require the same careful planning as the piece goods. As soon as the fabric is in the stores, then only the sourcing of the threads starts because the color of the thread must match the buyer’s requirements. The ordering of the threads must be complete by the time fabric is cut ready to be fed to the sewing lines.
Following is the list of all the Suppliers of Fabric, Trims, and Packaging Materials, from where Mohammadi sources its goods
Fabric Sourcing (Locally)
Table 16: Local Fabric Suppliers
| Supplier Name | Item Name | Country |
|---|---|---|
| Envoy Textile Ltd | Fabric | Bangladesh |
| Shirtex Ltd | Fabric | Bangladesh |
| Amber Denim mills ltd | Fabric | Bangladesh |
| Amber Denim ltd | Fabric | Bangladesh |
| Nassa Taipei Denims ltd | Fabric | Bangladesh |
| Aaron Denim ltd | Fabric | Bangladesh |
Table 17: Global Fabric Suppliers
| Supplier Name | Item Name | Country |
|---|---|---|
| H.W. Textiles Co.Ltd | Fabric | Hongkong |
| Zaozhuang Hiyoung Dynasty Textile Co.,Ltd | Fabric | China |
| Shaoxing Yan Wu Textile Co. Ltd | Fabric | China |
| Prosperity Textile(H.K.) Ltd. | Fabric | Hongkong |
| Artistic Milliners (PVT) Ltd | Fabric | Pakistan |
| Artistic Denim Mill Ltd. | Fabric | Pakistan |
| Artistic Fabric and Garment Industries Pvt. Ltd. | Fabric | Pakistan |
| Soorty Enterprises (PVT) Ltd | Fabric | Pakistan |
| Foshan Blue Denim textile import and Export co l | Fabric | China |
Table 18: Local Sewing Trims Suppliers
| Supplier Name | Item Name | Country |
|---|---|---|
| YKK Bangladesh Pte Ltd | Sewing Trims | Bangladesh |
| Amann Bangladesh | Sewing Trims | Bangladesh |
| American & Efird (Bangladesh) Ltd | Sewing Trims | Bangladesh |
| Coats Bangladesh Ltd | Sewing Trims | Bangladesh |
| Etafil Accessories Ltd | Sewing Trims | Bangladesh |
| TEX ZIPPERS (BD) LIMITED. | Sewing Trims | Bangladesh |
Table 19: Global Sewing Trims Suppliers
| Supplier Name | Item Name | Country |
|---|---|---|
| Golden Cedar Elastic Webbing MFG CO.Ltd | Sewing Trims | Hongkong |
| GEM EXPORTS | Sewing Trims | INDIA |
Table 20: Local Packaging Trims Suppliers
| Supplier Name | Item Name | Country |
|---|---|---|
| GEO Accessories Ind. Ltd. | Packing Trims | Bangladesh |
| Kds Accessories Ltd (Unit -2) | Packing Trims | Bangladesh |
| M&U Packaging Ltd. | Packing Trims | Bangladesh |
| Bengal Plastics Ltd. | Packing Trims | Bangladesh |
| T & S Buttons (Bangladesh) Ltd | Packing Trims | Bangladesh |
| Next Accessories | Packing Trims | Bangladesh |
| Trim Trade | Packing Trims | Bangladesh |
Table 21: Global Packaging Trims Suppliers
| Supplier Name | Item Name | Country |
|---|---|---|
| YKK (Thailand ) Co Ltd | Packing Trims | Thailand |
| Glory Metal Products Mfg Ltd | Packing Trims | Hongkong |
Table 22: Local Finishing Trim Suppliers
| Supplier Name | Item Name | Country |
|---|---|---|
| Yunusco T&A (BD) Limited | Finishing Trims | Bangladesh |
| Methila Enterprise | Finishing Trims | Bangladesh |
Bill Of Materials
Following is a list of all the materials required to make this Harriet H&M Shirt. Also, the vendors are mentioned.
Table 23: Bill of Materials for H&M Shirt
| NAME | QUALITY DETAILS | SUPPLIER | QUANTITY |
|---|---|---|---|
| FABRIC | |||
| Woven GeorgetteMSWN8625 NL-DOFB26 | 100% Polyester / 60.0 in /100GSM / 50X50 ne | Shaoxing Yan Wu Textile Co. Ltd, China | 0.461yds |
| Fusing FU-101FUSING WOVEN WENDLER3610 WHITE 44INC | Shore to Shore Ltd, Bangladesh | 0.03 yds | |
| Button (PB/2H-H) | Plastic Material/ 2 Holes/ High/ 16L | Shore to Shore Ltd, Bangladesh | 10 pcs |
| TRIMS | |||
| Thread Trim MSTT101068MS THREAD GM | A120 – DTM | Vardhman, India | 0.25 yds |
| Brand Label CONSCIOUS 18001 MS MAIN LABEL | SS-14 BLACK | Shore to Shore Ltd, Bangladesh | 1pc |
| Size Label Conscious22000 MS SIZE LABEL | M/39 SS-14-BLACK | Shore to Shore Ltd, Bangladesh | 1pc |
| Care Label HM30012MS W/C LABEL SATIN PRINTED GREEN AW-12 | Shore to Shore Ltd, Bangladesh | 1pc | |
| PACKAGING | |||
| Sleeve Binding MSBLB114MS BELLYBAND | SS-14-CREAM | Shore to Shore Ltd, Bangladesh | 1pc |
| Tag Trim MSTGT377MS HANG TAG | SS-14 CREAM | Rainbow Arts, Bangladesh | 1 pc |
| Bag BG-00002MS PRINTED POLY BAG 9.5x14x2x1 | BAG 9.5x14x2x1 | EXPO PACKAGING INDUSTRIES, Bangladesh | 1pc |
| Box CPBX800026CS Carton Box for Packing | M L S PRINT O PACKPVT. LTD., Bangladesh | 1pc | |
Bangladesh Rmg Export In The Global Rmg Market
Table 25 shows major export destinations for RMG products of Bangladesh by Country-wise markets in value terms including the USA, Germany, the UK, and France, Spain followed by the Netherlands, Italy, Canada, and Poland for the year 2016. And among Bangladesh’s major RMG exporters countries, the compound annual growth rate of export was higher in the Netherlands, Japan, Poland, Spain, Italy, and France’s market in the last 5 years (2012-16), compared to that of the USA, Germany the UK and Canada, indicating that there have to room to realize more export share in those countries.
Table 24: Major Export Market of Bangladesh RMG Sector
| Country | 2016 (Value in US$ billion) | CAGR (Compound Average Growth Rate) (%) (2012-16) |
|---|---|---|
| USA | 5.53 | 5.17 |
| Germany | 5.09 | 7.45 |
| UK | 3.25 | 7.55 |
| France | 2.05 | 10.80 |
| Spain | 2.34 | 15.89 |
| The Netherlands | 2.27 | 37.68 |
| Italy | 1.34 | 11.02 |
| Canada | 1.07 | 1.73 |
| Poland | 0.93 | 16.39 |
| Japan | 0.90 | 16.72 |
| Rest of the world | 8.99 | 11.32 |
Bangladesh Global RMG Export Share in the EU and USA Market
Bangladesh RMG export market is greatly concentrated basically on two markets, one in the EU and another in the USA. Figure 12 shows that the EU accounted for more than 60 percent of global shares of Bangladesh’s total RMG experts over the 5 fiscal years. And in the fiscal year 2017-18, the market share reached 64.12 percent which is 6 percentage points more than the fiscal year 2013-14.
On the other hand, Figure 13 shows that Bangladesh’s export share in the USA market was in decline. In the fiscal year 2017-18, Bangladesh’s RMG export share in the USA market declined by 1 percentage point against the previous fiscal year.
However, from Fig. 12 and 13, it is postulated that in the fiscal year 2017-18, the EU and US, together, accounted for just over 81 percent share of the total global RMG export share of the country.
Challenges Of The Bangladesh Rmg Sector
The sector has some issues and chronic problems that are hindering it from gaining more competitiveness and enhancing export performance. The key challenges to the RMG sector include:
Higher Lead Time
Lead time is a crucial factor for sustaining the competitiveness of Bangladesh’s RMG sector with respect to its competitor countries. In this regard, Hider (2007) gives high emphasis on the reduction in total “production & distribution” time by reducing lead and identifies it as a critical issue for the competitiveness of Bangladesh RMG.
Critical Situation in Ease of Doing Business
İn the case of ease of doing business ranking 2019, Bangladesh ranked 176 with a score of 41.97, whilst the country’s neighboring RMG export competitor countries such as India ranked 77 (with score 67.23); Sri Lanka ranked 100 with a score of 61.22; Pakistan ranked 136 with score 55.31 (World Bank, Doing business 2019, Bangladesh).
Shortages of Industry-ready Skills
In case of skill gaps, the sector is facing the most severe skills gap compared to other sectors of the economy, and the existing skill gap in the RMG industry includes unskilled: 8,577; semi-skilled: 48,130 skilled: 119,479. And as a result of that, the country’s textile and RMG sectors have to depend on foreign employees due to this skills gap and shortages.
Risk in Sourcing Raw Materials
Among the imported raw materials, cotton is the most demanded and crucial raw material. Bangladesh’s RMG sector heavily depends on cotton leading it to be the world’s largest importer of cotton. In the year 2016, Bangladesh imported US$ 5275.67 million worth of cotton from the world cotton market, constituting a 10.8 percent share of world export.
Increasing Competition
In recent years, Bangladesh’s RMG sector is facing fierce competition from South Asian and southeast Asian neighbor countries like Vietnam, India, and Myanmar that are trying to emerge as major RMG exporting countries. Among these countries, India and Myanmar have already taken the necessary strategy to increase their share in the global RMG market.
Lesser Labor Productivity of Bangladesh among the Competing Countries
Asian Productivity Organization (2018) has defined the APO20 as consisting of 20 member economies of the Asian Productivity Organization, i.e., Bangladesh, Cambodia, China, Fiji, Hong Kong, India, Indonesia, Iran, Japan, South Korea, Lao PDR, Malaysia, Mongolia, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, and Vietnam, and measured the productivity of these economies. According to the Asian Productivity Organization (2018), per worker productivities of Bangladesh and its competing countries in apparel manufacturing and exporting are shown in Table 26. From the table, it is observed that Bangladesh’s per-worker productivity (i.e., US$ 8600) is lower than all other competing countries except Cambodia (i.e., US$ 6200).
Table 25: Per Worker Productivity of Bangladesh and Its’ Apparel Exporting Competing Countries
| SI | COUNTRY | Per Worker Productivity (‘000 of US$ as of 2016) |
|---|---|---|
| 1 | Bangladesh | 8.6 |
| 2 | Cambodia | 6.2 |
| 3 | China | 24 |
| 4 | Hong Kong | 110.5 |
| 5 | India | 16 |
| 6 | Indonesia | 24.9 |
| 7 | Myanmar | 10.6 |
| 8 | Pakistan | 16.4 |
| 9 | Sri Lanka | 30.7 |
| 10 | Vietnam | 10.2 |
On the other hand, as shown in Table 27, per hour labor productivity of each worker employed in Bangladesh is US$ 3.45, whereas the close competitors of Bangladesh, i.e., Vietnam, India, Hong Kong, Indonesia have per hour labor productivity per worker of US$ 4.09, US$ 6.41, US$ 44.27, US$ 9.98 respectively. And consequently, the lower labor productivity of Bangladesh hinders the optimal growth in industrial manufacturing thus there are scopes to work with the skills set of workers employed in the RMG sector to improve labor productivity.
Table 26: Per Hour Labor Productivity Per Worker in Bangladesh And Competing Countries
| SI | Country | Per hour Labor Productivity Per Worker (US$ as of 2016) |
|---|---|---|
| 1 | Bangladesh | 3.45 |
| 2 | Cambodia | 2.48 |
| 3 | China | 9.62 |
| 4 | Hong Kong | 44.27 |
| 5 | India | 6.41 |
| 6 | Indonesia | 9.98 |
| 7 | Myanmar | 4.25 |
| 8 | Pakistan | 6.57 |
| 9 | Sri Lanka | 12.30 |
| 10 | Vietnam | 4.09 |
Global Competitiveness Of Bangladesh Rmg Sector
As shown in Table 28, China still dominates global RMG export in terms of market share, but its share drastically fell to 33.75 percent in 2016 compared to other previous years in the same time period. And for Bangladesh, its global RMG market share reached 7.50 percent in 2016 and it increased by 2.72 percentage points from 2012 to 2016, indicating an increase in competitiveness. Whereas in the case of Vietnam, its global RMG market share stood at 5.72 percent in 2016, and it increased by 2.24 percentage points in the last 5 years, making the country the third-largest exporter in the global RMG market.
Though, on the other hand, for India and Spain, their market share increased, but not as rapidly as Bangladesh and Vietnam. At the same time, the countries that have gradually lost their market share over the same period of time including Germany, and Hong Kong. And simultaneously, the countries that have experienced continuous fluctuation in their export market share include Italy, Turkey, and France.
Table 27: Bangladesh and the Major Exporting Countries’ Global Market Share (Value expressed in % term)
| Major exporter | 2012 | 2013 | 2014 | 2015 | 2016 |
|---|---|---|---|---|---|
| China | 36.68 | 37.62 | 36.82 | 36.96 | 33.75 |
| Bangladesh | 4.77 | 4.46 | 5.83 | 6.05 | 7.50 |
| Vietnam | 3.48 | 3.82 | 4.18 | 4.88 | 5.72 |
| Italy | 5.03 | 4.93 | 4.87 | 4.42 | 4.60 |
| Germany | 4.37 | 4.17 | 4.13 | 3.79 | 3.94 |
| India | 3.19 | 3.58 | 3.51 | 3.90 | 3.91 |
| Hong Kong | 5.26 | 4.72 | 4.12 | 3.97 | 3.44 |
| Turkey | 3.43 | 3.41 | 3.45 | 3.38 | 3.40 |
| Spain | 2.30 | 2.52 | 2.56 | 2.71 | 2.83 |
| France | 2.35 | 2.31 | 2.25 | 2.23 | 2.31 |
| Rest of the world | 29.14 | 28.45 | 28.28 | 27.70 | 28.61 |
Geographical Diversification Of Bangladesh Rmg Sector Market
As shown in Figure 14, the export market of Bangladesh’s RMG sector has diversified during 2006 – 2016 as the Trade Entropy index increased by more than two times. But, the value of the Trade Entropy index is not significant, indicating greater infirmity in a few markets. It is worth mentioning that Bangladesh currently exports RMG products to 161 countries across the World (EPB 2018), and in this export span, when it comes to both the export value and share, as mentioned in an earlier section of this paper, the US and EU are the two major export markets.
Abstract
This project is about a brief study on “Merchandising of men’s shirts in Bangladesh”. In the whole procedure of exporting garments to the retailer of abroad and to communicate with them, merchandisers have a great influence and responsibilities. When the order is taken from the buyer the duty comes to the floor of merchandisers and before going production they do almost everything to make the business smooth. So, the work starts with the order taking and making business relationship. Then sample making, planning, booking of every single material for samples, and getting approval are all the key responsibilities of merchandisers. In the case of production, the sample goes in bulk so, the responsibilities become huge and it comes to the relation with operation also.
In the other words, we can say that it is the Merchandiser’s responsibility to develop and deliver the garments properly. The aim of a merchandiser is to fulfill all the requirements of the buyer. After getting the order, the buyer sends a master sample and a BOM (Bill of Material) Sheet to the merchandiser. After that merchandiser sends it to the sampling section and also monitor and give instructions for making the samples correctly. Merchandiser also does sourcing for the Fabric, Accessories, and trims i.e. required for the original samples, and sends it to the sampling section for sample making.
After making the samples properly they send the garment to the Buyer for approval. After approving the product buyers demands the price per garment or per dozen and then the merchandiser prepares the cost sheet for the product and sends it to the buyer. If the price is approved by the buyer, then the merchandiser sends PI (Performa Invoice) to the buyer. Then buyer opens LC (Letter of Credit) Against Factory. After opening the LC the merchandiser goes for bulk production and also gives accessories and trims orders and then finally after finishing the production, products are sent for shipment.
In this project work, I have covered all the above-mentioned roles of merchandiser against the product (Men’s Shirt) with reference to the country, Bangladesh. I have also covered a brief overview of the RMG sector of Bangladesh, the contribution of RMG in total export of Bangladesh, cost of fabric/garments export, cost sheet & BOM sheet preparation for shirts with reference to the ‘MOHAMMADI GROUP LTD, BANGLADESH.’ In the end, I have summarized this document with the ‘Comparison Cost Sheet’ referencing the various countries.
Conclusion
This study reveals the beneficial factors of manufacturing apparel from Bangladesh. US retailers, brands, and importers can be benefited from the results of this study. The findings of this study confirm low labor costs and standard quality of manufactured products are the core strength of Bangladeshi vendors that should be considered by the buyers.
The study indicated low labor cost is the first choice of the buyers when they consider apparel outsourcing and select outsourcing destinations. The continuous search for low-cost products propelled importers to move towards Asian vendors. After Hong Kong, Korea, and China, Bangladesh is now one of the most competitive price providers. Findings support that still a significant percentage of buyers and importers did not experience apparel sourcing from Bangladesh and also a significant percentage are not informed about the services offered by Bangladeshi vendors. Hence, this competitive advantage can influence more business managers to outsource apparel from Bangladesh in the near future.
The results of this study also reveal the product quality aspect of Bangladeshi vendors, which carries a positive influence on outsourcing. This means Bangladeshi vendors can make apparel products maintaining international quality standards. This supports previous findings that development in technology and the global presence of information technology helped developing countries of the far east to match the demand of global quality standards.
Due to the geographical location of Bangladesh, a longer vessel leads time for exporting products to the US is required compared to some other sourcing destinations. Participants in this study directly supported that fact. Despite having geographical distance, there is still scope for lead time reduction by using direct and faster vessels. Moreover, all the Asian countries are in the same situation in terms of vessel lead time to ship products to the US. Hence, this fact should not restrict apparel buyers to outsource apparel from Bangladesh as there are not enough geographically closer alternatives for US importers for apparel outsourcing.
Unlike previous studies, which reveal that higher currency exchange rates positively influence apparel outsourcing destinations, this study showed that a gradual increase in the difference of currency exchange rate between the US dollar and Bangladeshi taka does not have a significant impact on outsourcing apparel from Bangladesh. Hence, it can be predicted that in the future even if Bangladeshi taka gets stronger against the US dollar it should not affect the bilateral apparel trade between Bangladeshi vendors and US importers.
The results of this study provided information about benefit factors associated with outsourcing from Bangladesh by apparel retailers, brands, and importers. Furthermore, it can provide a better understanding of important trade-offs that sourcing managers and apparel buyers face in various outsourcing alternatives.
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An insightful case study that expertly analyzes the dynamic processes behind creating quality apparel. This valuable resource provides crucial understanding of the global supply chain for contemporary menswear.
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