Recent market surveyed showed that speed (lead-time) and flexibility (adapting changes) become more important than low cost for world footwear retailer and manufacturers in order to stay competitive. E-commerce and fast fashion have changed customer’s shopping habits and made them more demanding in all aspect. Customer now-a-days has more option than they had before. As a result, footwear retailer considered factors that slowing down their speed and flexibility in order to take their strategy to remain competitive. And that is somehow threatening Bangladesh footwear industry growth.
How?
For sample development, Bangladesh footwear manufacturer still copy first sample made by China or other country. Sample development from concept/visual design/art-work is impossible who have their development center only in factory. At best case, it takes 3-4 weeks more than China or Vietnam to complete a round of sample. For production, Bangladesh lead-time (from order placement to shipment from port) is 4-5 weeks higher than that of China; 2-3 weeks higher than Vietnam; equal or 1 week higher than Myanmar. And as in terms of productivity Bangladesh is lower than China and Vietnam, actual lead-time impact basically more than that showed in paper. Means, made in Bangladesh shoes is not reaching retail store during peak (beginning of fashion change). Except leather (!?), nearly 100% of footwear materials sourced from China or other country.
Here is my 10 actions proposal to overcome this threat:
- Changing mindset:Sometime I heard that people say today or tomorrow they should come to Bangladesh. Who? Buyer. Why? For low cost. Come on! Today’s low cost opportunity will not exist forever. And opportunity is something that always flies. Myanmar, Cambodia, Ethiopia is coming and they have better advantages of culture (as most of investors of these countries from China), geographical (Myanmar/Cambodia surrounded and collaborator of One Belt Initiative; Ethiopia has great advantages of lead-time to Europe). Vietnam already far ahead from us. And recent studies of Private Label Sourcing Survey showed Bangladesh as a sourcing destination was in positive growth in before but trend is now becoming low. Means, buyer already thinking alternative and they keep thinking.
- Set-up development center in China could be a good short and mid-term solution for fast development till tooling and sample yardage available but factory should have strong monitoring and take it an opportunity to train their technicians. Now a day, some factories in Bangladesh used agent for development and it is not at all a sustainable solution. In long run, they have a clear goal how they could manage it from their factory. They should have ability to develop sample from concept/visual design/art-work and pass the sample in first round.
- Strong materials sourcing team located in China could be another short term solution but again there should have very specific goal to build the system. And this team will not only for responsible for source materials but also ensure materials quality so that there will be no quality check in Bangladesh factory. In long run, a consolidation approaches among a group of manufacturer for same materials may attract investor to invest backward linkage factory in Bangladesh. So united way is best way.
- Strong production planning management will ensure good planning and follow-up in factory. In my experience root cause of most delay from Bangladeshi factories are related to materials and production planning. Some factories uses very good system of production planning but do not have monitoring system. It’s like, I did planning and handover to production; my job done. Work study could be initial stage for monitoring and there are thousands of advanced technologies to do so.
- Develop top and mid management is toughest part in my opinion. Now all parties (buyer/investors/factory owner) focus spotted on lower management or workers. Our owner take all activities among them as buyer also focus to them. Kind of show-off. Off-course workers/operators are very important but we already have a good worker base due to big garments sectors and their awareness level is satisfactory in my opinion. Key to kill speed and flexibility in develop top and mid management skills and capabilities.
- Ensuring performance and accountability management is another key to success. Now there are very few factories that do practice of performance and accountability management. Most factories do not have proper management and KPI system. So most of the case we reward/punish as per perception, not by fact. And this de-motivate to all level.
- Collaborative approaches among factories are another key. It will increase negotiation power against counterpart or stakeholder. Now most of the case, we want to go alone and try to take others business rather bring business. X factory is giving price of 10$, I will give 9.5$; this sort of practice will not bring good at all. Off-course there should have professional competition.
- Technological and methodological adaptation is another key. World is now running very fast. New new technology is introducing not only for production but also management. New method (QMS, LEAN, VSM and lot more) should adapt in fast phase. Evaluate and monitor impact of new implementation technology or method. If works, carry on. If doesn’t work, leave it.
- Proactive than reactive: ensuring fast communication and decision in all aspect. From technical transfer (soft copy) to day to day communication (like price offering, planning sharing etc.) In Bangladesh, we take decision in late. And our system is late. In my experience, most of the reply by mail is not on-time or not very clear. Most of the executive/merchandiser/quality controller in factory waits for buyer’s solution; very few cases give solution first.
- WOW! WOW! WOW! You have to impress everybody now-a-days. To buyer (who give you order), to supplier (who supplied you materials), to employee (who execute orders), to all. It’s a race, first will be rewarded most.
