Due to my job responsibility, lot of time I need to discuss with different people from Bangladesh footwear industry – from investor to top/mid management. Every time I asked them why they can’t outperform or similar to China or Vietnam in manufacturing, they always come-up with some common conclusion like bad infrastructure, corruption, bureaucracy, limitation of backward linkage industry, superiority of Chinese mentality, lack of experienced labor etc etc. I know these are all very relevant but I feel they missed something more than that. Because…
Bad infrastructure? Sure, it’s a problem but what could happen for that? Increase shipping cost and delivery time.
Corruption? Are you a saint! Don’t you know who you need to pay and how much, that’ll become part of operating cost
Bureaucracy? Again, either you should pay somewhere or longer startup time means lower return on investment but it can be calculated, right?
Limitation of backward linkage industry? Yes, right you are. Again, it impacts higher materials lead-time and transportation cost. Lower flexibility and speed fashion. What else? And who come for fashion and speed in Bangladesh?
Superiority of Chinese mentality? It’s normal. They are superior, why don’t you acknowledge that. If you don’t agree, prove your superiority.
Lack of experienced labors? No problem, that’ll factor into capital/startup cost
I know you have your counter logic for above and I respect that. But if I try to read a buyer’s mind! A buyer wants good price, good product and most importantly in right time to catch sell. What do you think? A buyer buys from someone’s product in $3, knowing that the goods will likely be delivered on time with same specification s/he want OR buy from someone who selling price is $2, but have no idea if it is delivered on-time with same specification. In my experience most buyer would buy it for $3, as they are certained and confident to catch selling timing.
Business is all about certainty and with little forecasting. Making money without certainly or forecasting called gambling and business owner don’t like to gamble when they could avoid it.
In Bangladesh, NOTHING IS CERTAIN.
When someone says “yes”, buyer is not sure whether s/he meant yes or no.
When a merchandiser says that “I will come back to you tomorrow’’, buyer have no idea whether he’s one of those who keeps his word, or he’s one of those whom s/he push again tomorrow.
When buyer allocate order to Bangladesh, most of time s/he pray to almighty to make it happen. Take mental preparation of delay or stop order or KPI down.
So, to me, It’s UNCERTAINTY, that doesn’t allow our footwear industry outperformed. Again, don’t look other’s/external factor that create this uncertainty. Can you make sure you fix your internal organization uncertainty?? If yes, then we can discuss next round.