Lead Time Management in Garment Sector

Katja Ruth and Constantine Moros sat facing each other in the empty conference room. Covering the table between them were the latest operational and financial figures from the supply chain optimization pilot Hugo Boss had been running in its global bodywear and hosiery Division.1 Ruth, the director of the division, agreed with Moros, the division’s head of operations and procurement, that the pilot had been a success—better product availability and lower inventory to sales ratios had been observed for the stock-keeping-units (SKUs) involved in it—but was not convinced that expansion of the initiative beyond those

While Tots & Teens, a New Jersey-based clothing retailer, was poised to celebrate a 5% profit increase, their party was cut short by news of a catastrophic disaster in their Bangladesh production facility. Even more devastating was the news that the disaster, which claimed the lives of more than 2,000 workers, was preventable as it had been hastily constructed with substandard building materials. With T&T’s profitable fall line production deadline looming in two weeks, the CEO and COO waste no time traveling to Bangladesh to assess the damage to the facility as well as visit alternative manufacturing sites in the area. Next, they visit China to assess if their existing Shenzhen production facility can accommodate the incremental production needs, taking into account the increased working costs and taxations. With myriad pros, cons, opportunities and threats, the T&T executives are faced with the ultimate question: Should T&T’s production remain in Bangladesh or move to another market?

It is becoming apparent that the ever changing environment in the global marketplace requires a swifter response time from businesses and their supply chains. The era when production was moved overseas, so businesses can take advantage of low-cost labor is coming to an end, because businesses are not only competing on price but also on time. The owner of Zara, a Spanish clothing store knows this first hand, and has turned supply chain management on its ear, making his company the “envy of the industry” (Ferdows, Lewis, & Machuca, 2004).

The use of foreign suppliers has caused a lengthy lead time I the supply chain, however the company is working to improve this and has successfully achieved some good results. There effectors have reduced the average time from placing a component order with a supplier to having those items available at the New Balance warehouses from 12 weeks to 9 weeks.

Lead time involves the manufacturing, timing, supply of raw materials, distribution and sales. Lead time gives an accurate depiction of the overall strength of the supply chain and is an excellent metric in determining the effectiveness of planning and execution of supply chain goals and initiatives.

Over the course of little more than a decade, Vietnam has become a significant exporter of garments to the EU and Japan, and now to the Australia too. Textiles are a vital component of Vietnam, presently accounting for nearly half of the country’s manufactured exports. As clothing is some of the most synchronized operated sectors in the world, it accounted for 16.5% of the total earnings in the year 2002(Nadvi et al. 2004).

Esquel, one of the leading cotton-shirt-manufacturers in the world came from China and it supplies lots of clothing brand such as Banana Republic, Tommy Hilfiger, Hugo Boss, Brooks Brothers, Abercrombie and Fitch, Nike, Nordstrom and Lands’ End, in addition to private companies (Plunkett Research, Ltd.). However, due to the high demand of the US apparel stores for Chinese products, the low cost, which was the main reason why raw materials are being purchased from China, have increased. China’s competition is huge, with Vietnam, the Philippines, Malaysia and Sri Lanka also producing material at cheap prices (Plunkett Research, Ltd.). The US apparel stores can instead purchase from these other Asian countries. It is hard to determine the exact number of suppliers in this industry; but, in general, majority of them are in Asian countries that can provide low-cost raw materials to US-based apparel stores. Therefore, the US apparel stores may acquire higher net profi

Businesses benefit from having a good relationship with their suppliers of raw materials and components. In manufacturing, companies are adopting “Just-in-time” manufacturing. This means that businesses only produce when they have an order, and they only get materials delivered when they are needed. Businesses require reliable and efficient suppliers to be able to order their stock last-minute.

As a result of this and the age of the production equipment turn around for orders can be three to four weeks. If the process takes too long a competitor can take away business. Especially if the competitor has a factory that is more up to date with their technology and processes.

Delivery is a competitive priority because customers are interested in satisfying their needs and wants in the right quantity at the right time. It should be on time with high development speed. Lead time is a time issue where it reflects the accompanying ideas: the quantity of parts of an association's operations; how rapidly an item or administration is conveyed to a client; how dependably the items or administrations are produced and conveyed to the business sector; and the rate at which changes in items and procedures are

In order to have higher profit margin, one of the most effective ways is to cut down production costs. In view of the low labor cost in developing countries, global sourcing seems to be a good choice to reduce costs. With the development of global production networks and the increasing competition, fast all fashion clothing firms have shifted their manufacturing operations to low lost locations over the past decades.

The contributions of this study appear from different observation or views. The contributions of this study mainly from two viewpoints, that include-

I think the major goal of this industry is to create not just comparative advantage but also competitive advantage on a global scale and at the same time largely will contribute to combat the extreme poverty and hunger in Bangladesh. This stimulates economic growth and move towards the marked based economic system (privatization, deregulation, improving the legal system and protect the private property).As part of the above the goal in the textile industry isto move from command economy to market economy and this is evident with the Privatization process of the textile businesses and encouraging the entrepreneurship and investments in technology within the industry. In addition, stimulating businesses that will decrease the import of raw materials and the same will lower the transaction cost and dependency from

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:

Faruqui, M. (2014, July). Nobody can beat Bangladesh in price and quality. Retrieved from http://www.textiletoday.com.bd/magazine/873