Current Challenges of Textile and Apparel Industry in Bangladesh

The ready-made garments industry or Textile Industry is the most influential economic sector of Bangladesh. Because of labor intensity, technological improvements, resourceful workforce, tremendous success, this sector is going upper day by day. This sector faces some challenges these days. Six major challenges are described below. I present the Current Challenges of the Textile and Apparel Industry in Bangladesh.

A good thing is that recent political unrest is not touching the Textile and Apparel Industry in Bangladesh. But the worker’s unrest is the most challenging to face in this sector. However, all the Current Challenges of the Textile and Apparel Industry in Bangladesh in the following:

What are the Current Challenges of the Textile and Apparel Industry in Bangladesh?

1.  Increasing electronics, Motors & high-tech industries:

At present, people want good quality local products at a cheaper cost. Keeping this in mind, so many renowned hi-tech, micro-tech, motors & vehicles, electrical & electronics products & accessories companies have been built up. Among them, Atlas Copco, Walton group, Runner group, Minister group, Philips, Jamuna group, RFL group, Superstar group, My one, Best electronics, Esquire electronics, etc., are doing very well to grab customers.

They are running continuously by embracing new technologies & customer demand. In fact, they are competing with the garments sector by adding more value to the economy of Bangladesh.

2. Order Speed up & Variety Increases:

Nowadays, people’s fashion choices as well as trends are changing rapidly. Classy, fusion & trendy items are top on the choice following Hollywood or Bollywood. The globally competitive market also wants rapid feedback from its suppliers. Order speeds up for this reason. In some cases, buyers want delivery within two weeks, which is a very strict time schedule to follow for our RMG sector.

Here, things are not in ideal condition, so every time it’s not always possible to follow supply chain rules for on-time delivery. Our fashion designers are not too extraordinary experts to give feedback as soon as per buyer’s specifications. We feel comfortable producing T-shirts, Sweatshirts, Hoodies, Jackets, Polo shirts, Pants, shirts, Home tex, etc. On the contrary, our competitor countries produce fancy items with a short lead time. For example, Amazon brings custom-made products with a few hours of delivery time. Our weakness turns into a threat to our growing apparel sector.

3. Recent wage increment:

RMG sector’s recent wage increment will affect our apparel growth. After a 51% wage increment, there was some unrest and demand issues & it was also cleared. From a minimum salary of 5300 takas (Gazette in 2013) for an assistant operator to 8000 takas (Gazette in 2019), and more increased in December 2023 to a minimum of 12500 tk. The monthly salary is a huge increment for about 4.4 million garment workers. With this direct cost increment, the per-minute cost of the companies will also increase. It will raise product-making costs & freight on board value. Foreign buyers will not pay high in accordance with that. So, we may lose an order or sometimes need to do business in the breakeven point.

4. Dependency & grading system:

We have a habit of being dependent on specific buyer orders. In some cases, the company has one or two buyers to depend on for their continuous orders. The business policy needs to change. We should focus on the open market policy rather than our dependency. For this reason, we are adopting their illegal conditions like continuous order or repeat order discount policy, rapid styles push policy, etc. Sometimes they are taking advantage of quality policies by the grading system of the product & reducing payment. China & India have their own code of conduct in these regards & they are not so dependent on any specific regional buyers. We need to develop our negotiation & marketing strategies.

5. Global technological improvements:

We are lagging behind in respect of technological improvements. China uses fully automated machines that take 5 to 6 minutes to complete a jeans pant sewing. On the contrary, we invest in general 15 to 20 minutes to complete it with several machine & manual operations. It is not necessary to grab all the methods, technologies, or techniques suddenly. Our neighboring country, India practicing slowly but rising rapidly. There are so many foreign professionals working in our country.

They follow production-friendly methods, quick changeover steps, lean manufacturing, standardization, TQM tools, TPM systems, MRP tools, Supply chain strategies, minute-based capacity planning tools, precise software-based costing analysis, digital marketing policy, and so on. Instead of learning or adopting, we are just following them, which in turn adds no value when they are not available.

Most of the women workers of the RMG sector are afraid of adopting semi-automation or methodological change. It is necessary to train them, to educate them. When the modern world works for the elimination of non-value-added activities, we are interested in grabbing them by making our efforts easier. Our middle & top management are not trendy in these regards, that’s why they are wasting efficient workers’ capability. They need to be more focused on grabbing modern machinery, technologies, methods, plans, software, etc. to make a successful business globally.

6. Safety & green business policies:

After the Rana Plaza & Tazrin garments incidents, industrial safety has become an important issue for foreign buyers. Every international buyer has their own safety & compliance policy. Sometimes those are just a way of making a hindrance. Accord & Alliance, OHS, WRAP, etc., have become mandatory to get international standards. Safety and compliance rules sometimes become the reason for not getting renowned buyer orders.

A green production system or green business policy is another international requirement. USGBC & LEED certification is mandatory to get top-class buyers’ orders. According to a report on The Daily Star published on 9^th October 2018, there are 73 Bangladeshi LEED Green garment factories certified by the USGBC. There are some 320 factories in the pipeline waiting to get the LEED Green garment factories certificate. The economic zone of the RMG sector is strictly based on these rules & regulations, as well as other sites, factories are willing to certify themselves as safe & environment-friendly organization.

Other Factors create challenges for our Textile and Apparel sector:

There are some weak points of our Textile Industry that make our business challenging. They are:

1. Limitations of modern machinery & automation systems
2. Lack of technology-oriented labor force
3. Fear of short lead-time shipment
4. Limitations of raw material production
5. Time-consuming port services
6. Lack of local professionals
7. Mismatch between planning & implementation
8. Not adopting software-based precise costing & planning
9. Political unrest conditions &natural calamities
10. Lack of marketing tactics & skillful middle management
11. Lack of negotiation power in order taking
12. Lack of a large group of companies to attract foreign buyers

Also, there are some Threat points for our Industry that make our business challenging. They are:

1. Globally competitive export market
2. Rise in the price of raw materials
3. Wage increments of RMG workers
4. Increasing the making cost & FOB cost
5. Speed order increases for all buyers
6. Dependency on the mother buyer of companies
7. Short lead time & fragmented order
8. Product variety & demand for fancy items
9. The products grading system of buyers is a reason for loss
10. Zero traffic facilities of African countries attract buyers
11. China has more technological & infrastructure facilities
12. Bad fame of the country due to political issues& corruption

RMG sector of Bangladesh has passed so many ups & downs, and finally reached its present condition. In accordance to global changes, the Bangladesh RMG sector needs to improve technologically, need to modify traditional methods, enhance marketing strategy & business policy, ensure standard safety & compliance policy, Precise costing & planning, use supply chain strategy, business process excellence technology, training & implementation, research & development, Multi-skilled management systems, practicing industrial engineering tools, etc.