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Page 1: Submission for ISCEA PTAK Prize Global Case Competition
Page 2: Submission for ISCEA PTAK Prize Global Case Competition

PROLOGUE & THE TASK Bangladesh Apparel industry is expected to reach US $50 billion by 2021. While such

predictions have been made by several reputed global organizations, different stakeholders of

this industry must work together with clear agenda for realizing this potential fully.

Few of the major approaches that should be considered include:

Increasing supply chain efficiency and transparency

Building closer and long term relationship with supply chain partners

Improving operational performance and

Developing skilled workforce (particularly in middle management)

On the above context, Sketch a 5 years plan on developing professional Supply Chain

Management practices in the industry.

Today, your organization has US $10 million in its possession to get started with the project.

PROBABLE JUDGMENT CRITERIA Knowledge of Supply Chain Management

Innovativeness

Wise use of money

Feasibility of the plan

Rationale for the project

Impact of such proposal

Case Presentation Style

THE CASE SOLUTION GUIDELINES Study the Apparel Industry of Bangladesh

Find the contribution of Supply Chain in the industry

Find the talent crisis in the mid management particularly

Find the flaws/ problems in Supply Chain due to talent crisis

Find probable solutions to it

Indicate clearly how to develop proper Supply Chain Professionals

Come up with one BIG IDEA that will boost the growth of Apparel Industry in next 5

years

Show rationale & use of money

REMEMBER Your organization is a consultation firm, given an amount to work on, no profit has to

be made out of the given money for your own organization, rather the entire amount

should be used for the development of the Apparel Industry.

Page 3: Submission for ISCEA PTAK Prize Global Case Competition

Team Member -1

Name : Ahamed Najeeb Rahman

Signature :

Team Member - 2

Name : Noushin Wadud Khan

Signature :

Team Member - 3

Name : Sayem Faruk

Signature :

Team Member - 4

Name : Wais Al Karim

Signature :

Last Date of Submission: May 15, 2015

Team: IBAD- 0105-15

SL. No.: To Be Assigned by ISCEA

Page 4: Submission for ISCEA PTAK Prize Global Case Competition

Integrated ERP: Disruptive Innovation in the Apparel Industry

1

INTEGRATED ERP: DISRUPTIVE INNOVATION IN THE

APPAREL INDUSTRY

In December 2014, when the Bangladesh Government and garment’s exporters set a target of

exporting $50 billion worth of garment items in 2021, skepticism and optimism alike filled the

air (UNB, 2015).

The Bangladeshi apparel industry started in the late 1970s, expanded heavily in the 1980s and

boomed in the 1990s. The quick expansion of the industry was possible because of the use of

less complicated technology, cheap and easy to operate sewing machines, and relatively

inexpensive and abundant female workforce. But, apparel firms in the county have moved into

a challenging position in the new millennium. The challenge is now to offer high-quality, low-

cost products within a short lead time; and to meet health, social and environmental

compliances in the face of increasingly stiff competition (Saha, The hidden lever to success,

2011).

Of the many challenges that have been identified for Bangladesh, only a few offer a realistic,

achievable solutions [see Exhibit 1 for specific challenges identified by the Bangladesh

Garment Manufacturers and Exporters Association’s (BGMEA) President]. Supply chain

management, along with rigorous talent management, is a potential avenue that experts agree

can lift the performance of the entire industry. (Saha, The hidden lever to success, 2011) (Saha,

RMG sector faces talent crunch, 2011).

Could it be possible that an integrated industry-wide Enterprise Resource Planning (ERP),

under the supervision of BGMEA, is the way forward towards a sustainable RMG sector? How

will such a high-tech solution be implemented in a technologically-challenged environment?

How can factory owners be educated on the importance of supply chain management when

they don’t even understand it?

Brief History – From Bottomless Basket to a Global Export

Powerhouse

Shift from Primary to Secondary

When Henry Kissinger, the former US Secretary of State, dubbed Bangladesh as an

international bottomless basket case, it was in economic sense by which he wanted to mean

that the country would remain an economic cripple in the years to come (Bayes, 2013). But

Bangladesh is a resilient country. The country bounced back with exceptional determination

focusing on the Three R’s of its economy – Rice, Remittance, and RMG – as quoted by

Mohammed Farashuddin, a leading economist in Bangladesh.

Over the past decades, the share of RMG as a percentage of exports have steadily risen

catapulting Bangladesh to become the second largest RMG exporting country - cashing in over

$25 billion in exports a year [see Exhibit 2 for a detailed breakdown of the sectorial growth].

The industry has now established itself as a global player. Despite numerous challenges in the

growth process, growth rate averaged about 15%+ per year (Islam, 2014). The Dhaka Apparel

Summit held in December 2014 did set some very ambitious goals – Vision 2021.

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Integrated ERP: Disruptive Innovation in the Apparel Industry

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Table: Current and Target Figures for the Apparel Sector

Year 2014 Vision 2021

Export Value $25 billion $50 billion

Total Market Size $450+ billion $650+ billion

Bangladesh’s Market Share ~5% ~7.7%

A research paper by Mc. Kinsey & Company suggests that unit demand growth for RMG in

Bangladesh is expected to be 2x to 2.5x through 2020. But to reach those levels bottlenecks in

productivity have be addressed (McKinsey & Company, 2011). Bangladesh German Chamber

of Commerce & Industry (BGCCI) President Sakhawat Abu Khair said the production

efficiency in Bangladesh is as low as 20% to a ceiling of 40% at a few factories and efficiency

can easily be increased to 50% through some fundamental training sessions (Rahman, 2014).

Bottlenecks in the Current Supply Chain

A quick glance over the value chain analysis will show us where to bet the money:

Table: Value Chain Analysis of a $1.28 T-shirt Produced in Bangladesh

Component Share of

Total Value

Monetary

Value

Raw materials, port charges, accessories 77.96% $ 1.00

Administration (including entrepreneur’s profits) 12.00% $ 0.15

Labor 4.70% $ 0.06

Miscellaneous 5.34% $ 0.07

Using the figures above, it can be calculated then, keeping all other things constant, a doubling

of labor productivity (i.e. a 100 per cent improvement in labor productivity) would result in the

reduction of cost by just $0.03, which is likely to have not much effect on the competitive

position of Bangladesh in the world market (Razzaue & Eusuf, 2007). Focus should rather be

on simplifying and streamlining the sourcing and logistics.

A simplified model of the current apparel supply chain is depicted below.

Image: Configuration of Apparel Supply Chain

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Integrated ERP: Disruptive Innovation in the Apparel Industry

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Problems in the supply chain are multifaceted and intertwined:

1. Supply of raw materials like cotton and chemicals come from countries like Uzbekistan,

India, China etc.. It takes around 20 to 30 days to get cotton from Uzbekistan (Hossain,

2014). High lead times, information asymmetry, and communication gaps often

leads to lack of availability of raw materials to the right place at the right time at the

right price.

2. Manufacturers, merchandisers often delegate their production process to smaller sub-

contractors who at times don’t meet the safety, and quality standards. Sometimes, a

large order gets sub-contracted several times, which makes it difficult for the original

manufacturer to track the order. Foreign buyers are often grieved at the lack of

compliance in smaller factories (Munni, 2014).

3. Inaccurate product costing and dysfunctional inventory management in RMG due

to lack of production planning systems and continuous productivity monitoring

still makes a manager’s job a tedious task (McKinsey & Company, 2011). As a result

manufacturers are sometimes victims of inaccurate costing leading to large losses.

4. Due to the lack of an extensive rail network, much of the transportation is carried out

by trucks. Extortion, arson, life-threaten attacks are just few of the snags disrupting the

transportation of exports and imports to and from the ports. Tracking valuable

merchandise becomes a necessity in situations like these.

Existing challenges will multiply if suppliers aren’t able to fill higher-skill middle

management position. (McKinsey & Company, 2011). The RMG sector will require around

800,000 skilled professionals in mid-level positions by 2021 to lead the organizations,” said

Anwar-Ul-Alam Chowdhury Parvez, former president of BGMEA. Currently, the sector

suffers a shortfall of nearly 200,000 professionals and unfortunately, experienced and

qualified employees from Bangladesh’s neighboring countries are filling the current shortage.

They are around 15 percent of the mid- and senior-level professionals in the entire industry

remitting Taka 4 billion out of the country every year. The main deterrents to talent

development are outlined below (Saha, RMG sector faces talent crunch, 2011):

i. Entrepreneurs' lack the eagerness to spend money to train and develop local talents for

fear of losing trained employees. Only 5% of profits are now being spent of training

and development.

ii. Technical and vocational institutions are inadequate and have back-dated curricula.

iii. Garment jobs lack social recognition.

iv. Managers have poor compensation packages, unfavorable working conditions, and

undefined career path.

Integrated Supply Chain – The Way Forward

To face the challenges ahead, the apparel makers should focus on effective supply chain

management as it will ensure delivering the right product to the right place at the right time at

the right price, according to supply chain experts. “Effective supply chain management is the

way to offer high-quality, low-cost products within the shortest possible lead time as it

integrates the whole apparel supply chain as one,” said Mr. Ejazur Rahman, Managing

Director of Mind Mapper Ltd, a leading management consulting firm. Mr. Rahman also said,

“Supply chain management is the hidden lever that can magically lift the total business

performance of any company.” Bangladesh should consider the whole apparel supply chain

Page 7: Submission for ISCEA PTAK Prize Global Case Competition

Integrated ERP: Disruptive Innovation in the Apparel Industry

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as one, adopt a fact based approach upon thoroughly understanding current realities, invest in

the appropriate skills and constantly monitor and adjust to optimize results in an ever-changing

world (Saha, The hidden lever to success, 2011).

ERP: A High-Tech Solution

The Growing Use of ERP

The ever-erratic political situation of the country poses a major hindrance towards achieving

Vision 2021. The series of blockades and strikes over the past few years has prompted RMG

manufacturers to turn to technology to bring some certainty in an uncertain environment.

Most of the ERP solutions are purchased by RMG manufacturers and large corporations

in Bangladesh (Mirdha, 2009) [see Exhibit 3 for an industry overview of ERP solutions].

BGMEA Integrated ERP

We recommend integrating all the supply chain actors into a common portal. The portal

will connect the ERP modules at different factories and relay capacity information to the

relevant stakeholders when they search for it. Only the contact details of manufacturers with

excess capacity will be shown in the search results. No other confidential information will

be disclosed. Only BGMEA-certified manufacturer, buyers, merchandisers, suppliers and their

managers can access the system. If the system is enforced by BGMEA, then it should solve the

issue of nonchalant manufacturers as non-compliance won’t be a choice. Even unenforced,

few will want to be left out of the bandwagon. Hence, existing manufacturers using ERP will

just need to connect their module to the BGMEA ERP portal and new ERP users will be

supported by BGMEA in their implementation. The goal is to integrate the supply chain to

one.

In order to solve the mid-level management crisis, we suggest incorporating a common

learning platform for all the mid-level managers and interested students in the integrated-ERP

system. Pilot testing of an independent learning platform has already been done by a company

called GreenGrade Solutions which is backed up by UKaid (E-learning software launched for

Bangladesh RMG workers, managers, 2014). Online videos will teach managers basics of

management and hands-on training can be provided on a weekly basis at any of the 23 RMG

training providers (GIZ, BGCCI, BGMEA, BKMEA, 2008) under the Promotion of Social

and Environmental Standards (PSES) by BGCCI and Gesellschaft für internationale

Zusammenarbeit (GIZ) (Rahman, 2014) [see Exhibit 4 for a mockup of the user interface and

Exhibit 5 for functionality features and sample e-learning course outline].

Plan of Action

The implementation for such a system is done in two phases - business process reengineering

(BPR) leading to an ERP implementation. The BPR will make sure that an expensive ERP is

not configured to existing broken processes [see Exhibit 6 for potential contenders in providing

the BGMEA Integrated ERP Portal].

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Integrated ERP: Disruptive Innovation in the Apparel Industry

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Phase 1 Phase 2 Process improvement and

standardization

ERP implementation

Deliverables Process: As-Is Process Maturity

Assessment

Process Improvement & SOP

documentation

Business and operational

performance

Dashboard design

People: Organization structure and role

matrix

Technology: Technology Requirement and ERP

application selection

Assistance with tool selection

Modules: Finance, accounts and costing

Sales and logistics

Procurement management

Production management

Plant maintenance

Quality management

Document management

Business intelligence and analytics

The entire process will take 14 months. Assuming the process starts on January 2016, it will

end on February 2017 – leaving 3 years and 10 months out of allotted 5 years to evaluate the

progress and tweak the system to reach the $50 billion mark.

Table: Financial breakdown of the Recommended Plan

Process Cost

BPR $175,000

ERP Implementation $525,000

ERP Software $2,000,000

E-Learning Platform $1,000,000

Total $3,700,000

Savings $6,300,000

The cost of a full-fledged ERP software costs $2 million (Mirdha, 2009). Whereas a BPR and

ERP implementation will cost $700,000 (figure obtained from a KPMG Advisory Services

Page 9: Submission for ISCEA PTAK Prize Global Case Competition

Integrated ERP: Disruptive Innovation in the Apparel Industry

6

proposal to a RMG producer). E-learning platform’s cost has been overstated since coming up

with quality content will require expensive props, equipment, and teachers with vast practical

experience.

Feasibility and Benefits of the Plan

The system will solve many issues relating to the supply chain.

1. Through the seamless interaction of macro supply chain processes – Customer

Relationship Management (CRM), Internal Supply Chain Management (ISCM), and

Supplier Relationship Management (SRM) - the entire supply chain will become a

more efficient one – maximizing the overall value generated and operational

performance.

2. Problems pertaining to inaccurate costing and inventory management can now be

handled under the newly installed in-house ERPs.

3. Since the system promotes transparency and with BGMEA-certified manufacturers,

buyers can rely on and monitor sub-contractors and avoid any potential public

relations nightmare.

4. Supply chain partners, through effective communication, can forge long-term

relationship with each other.

5. The e-learning platform means manufacturers can share the cost of the training and

develop a skilled workforce. The portal will allow managers to sharpen their skills at

a time of their convenience, while certifications will motivate them to constantly

learn new skills.

6. Overall, the portrayal of a tech-savvy industry will improve the sector’s image and

attract new talents.

Indeed, certain issues need to be resolved as a part of groundwork before launching such an

audacious plan. Problems relating to infrastructure, energy, market access require long-term

systematic changes to produce an organic difference (Islam, 2014). Positive signs are already

being seen across various frontiers of the sector [see Exhibit 7 for details on the positive

signs].

The proposed recommendations have short run application with long term implications.

The RMG sector will be benefited in terms of business, communication and transportation

efficiency. Given the nature of business - race to the lowest cost - in the RMG sector, an

industry-wide integrated solution has been long overdue, it will be needed tomorrow, if not

today.

Page 10: Submission for ISCEA PTAK Prize Global Case Competition

Integrated ERP: Disruptive Innovation in the Apparel Industry

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References Bangladesh Garment Manufacturer and Exporters Association (BGMEA). (n.d.). Trade Information.

Retrieved May 7, 2015, from Bangladesh Garment Manufacturer and Exporters Association

(BGMEA): http://www.bgmea.com.bd/home/pages/TradeInformation#.VVQsV_mqqko

Bangladesh Textile Today. (2013, February). BIM introduces new diploma course on: productivity and

quality management. Retrieved May 14, 2015, from Bangladesh Textile Today:

http://www.textiletoday.com.bd/newsite/bim-introduces-new-diploma-course-on-

productivity-and-quality-management/

BASIS. (n.d.). List of Members. Retrieved May 10, 2015, from BASIS:

http://www.basis.org.bd/index.php/members_area/member_list

Bayes, A. (2013, May 11). Bangladesh: A bottomless political basket case? Retrieved May 4, 2015,

from The Financial Express: http://www.thefinancialexpress-

bd.com/old/index.php?ref=MjBfMDVfMTFfMTNfMV82XzE2OTAxNw==

E-learning software launched for Bangladesh RMG workers, managers. (2014, November 13).

Retrieved May 12, 2015, from bdnews24.com:

http://bdnews24.com/technology/2014/11/13/e-learning-software-launched-for-

bangladesh-rmg-workers-managers

GIZ, BGCCI, BGMEA, BKMEA. (2008). RMG Service Provider Directory. Dhaka.

Hossain, M. (2014, Janurary 5). Warehousing facility for Uzbek cotton. Retrieved May 7, 2015, from

The Financial Express: http://www.thefinancialexpress-bd.com/2014/01/05/12197/print

Hye, H. A. (2012, November 8). RMG exports at a cross-roads. Retrieved May 14, 2015, from The

Financial Express: http://www.thefinancialexpress-

bd.com/old/index.php?ref=MjBfMTFfMDhfMTJfMV82XzE0OTIxNw

Islam, M. A. (2014, December 7). Vision 2021 for RMG: Celebrating the 50th Anniversary of

Independence. Retrieved May 5, 2015, from The Financial Express:

http://www.thefinancialexpress-bd.com/2014/12/07/69749/print

McKinsey & Company. (2011). Bangladesh's Readymade Garments Landscape: The Challenge of

Growth. McKinsey & Company.

Mirdha, R. U. (2009, May 7). Key RMG players shift to automated systems. Retrieved from The Daily

Star: http://archive.thedailystar.net/newDesign/cache/cached-news-details-87064.html

Munni, M. (2014, November 3). RMG subcontractors go unregulated. Retrieved May 7, 2015, from

The Financial Express: http://www.thefinancialexpress-bd.com/2014/11/03/64245

Rahman, T. (2014, November 18). MoU inked to train 300 mid-level RMG officials. Retrieved May 05,

2015, from Dhaka Tribune: http://www.dhakatribune.com/regulation/2013/nov/18/mou-

inked-train-300-mid-level-rmg-officials

Razzaue, A., & Eusuf, A. (2007). Trade, Development and Poverty Linkage: A Case Study of Ready

Made Garment Industry in Bangladesh . Dhaka: Unnayan Shamannay .

Saha, S. (2011, March 7). RMG sector faces talent crunch. Retrieved May 4, 2015, from The Daily

Star: http://archive.thedailystar.net/newDesign/news-details.php?nid=176636

Page 11: Submission for ISCEA PTAK Prize Global Case Competition

Integrated ERP: Disruptive Innovation in the Apparel Industry

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Saha, S. (2011, May 10). The hidden lever to success. Retrieved May 4, 2015, from The Daily Star:

http://archive.thedailystar.net/newDesign/news-details.php?nid=184963

UNB. (2015, March 6). US to help Bangladesh achieve $ 50b RMG export target: Envoy. Retrieved

May 2, 2015, from The Independent:

http://www.theindependentbd.com/index.php?option=com_content&view=article&id=250

230:us-to-help-bangladesh-achieve--50b-rmg-export-target-envoy&catid=108:business-

finance&Itemid=152

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EXHIBIT 1: CHALLENGES & REALITIES IDENTIFIED BY MD. ATIQUL ISLAM

(BGMEA PRESIDENT)

1. Infrastructure - Industrialization and opportunities to grow need road-rail-port

infrastructure, trade financing, etc.. Developing planned Special Industrial Zone is

another important option.

2. Power & Energy - We need to ensure adequate supply of electricity, gas and energy

as these act as the engine behind running the industry.

3. Access to finance at competitive bank interest rate

4. Human Resources - The RMG industry needs skilled human resource in terms of

both skilled workers and mid-level management. The industry is currently

employing 4.4 million workers where our productivity is 77%. This is lower than

our main competitors (India 92%, Vietnam 90%, Pakistan 88%). Though over the

years a good backward linkage has developed we still fall short in forward linkage.

The industry for marketing and design depends on agents and source countries

respectively. About 19,000 expatriates working in the mid-level and high position

at the garment factories of Bangladesh are remitting about Taka 4 billion every year.

5. Environmental Sustainability is also another major challenge for us.

6. Safety & Dignity of Workers - Without ensuring a safe workplace for our workers,

we can’t be able to create a safe and sustainable industry. This is one of the issues

that has attracted much attention.

7. Politics - Over the years, political instability has posed as a difficult challenges.

We need to ensure a stable political situation for the sake of our industry and

economy.

8. Market Diversification - Market diversification, exploration of new markets is

another major area for us to ensure sustainable growth of the industry. Though our

apparel export share to non-traditional markets has increased in recent times we

need to further enhance this momentum.

9. Market Access - There are a number of non-tariff barriers to trade with the SAARC

and other Asian countries region which includes lack of land connectivity, transit

crisis, complex visa system, etc. A regional infrastructure strategy is essential for

tapping economic and commercial opportunities among the Asian countries, while

safeguarding the growth opportunities for underdeveloped countries such as

Bangladesh.

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EXHIBIT 2: COMPARATIVE STATEMENT ON READYMADE GARMENT (RMG) &

TOTAL EXPORT OF BANGLADESH

YEAR

EXPORT OF

RMG

(IN MILLION

US$)

TOTAL EXPORT

OF BANGLADESH

(IN MILLION US$)

% OF RMG TO

TOTAL EXPORT

NUMBER OF

GARMENT

FACTORIES

EMPLOYMENT IN

MILLION

WORKERS

1989-90 624.16 1923.70 32.45 759 0.34

1994-95 2228.35 3472.56 64.17 2182 1.20

1999-00 4349.41 5752.20 75.61 3200 1.60

2004-05 6417.67 8654.52 74.15 4107 2.00

2009-10 12496.72 16204.65 77.12 5063 3.60

2010-11 17914.95 22924.38 78.15 5150 3.60

2011-12 19089.73 24287.66 78.60 5400 4.00

2012-13 21515.73 27018.26 79.63 5400 4.00

2013-14 24491.88 30186.62 81.13 4536 4.00

Source: (Bangladesh Garment Manufacturer and Exporters Association (BGMEA), n.d.)

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EXHIBIT 3: INDUSTRY OVERVIEW OF ERP SOLUTION PROVIDER

Domestic Production

To support rising demands in Bangladesh, there has been a huge upsurge in the number of

software companies providing ERP solutions in Bangladesh in recent years – foreign and

domestic alike. Of the 734 software companies operating in Bangladesh, 164 of them are

currently providing ERP solutions in Bangladesh. All of them provide both “off-the-shelf” and

“tailor-made” software to their clients. These clients range from real estate to the banking

sector. Software developers in Bangladesh have also started to explore foreign markets with

the IT sector and Business Process Outsourcing (BPO) becoming a top contender for a major

export industry. Currently, only 56 of the 164 companies are exporting.

According the data made available by BASIS, till date a total of approximately 1614 ERP

installations have been carried out in Bangladesh. The number of companies providing such

solutions has increased over the years as depicted by the chart below (BASIS, n.d.).

Chart: Number of Companies Providing ERP Solution

Competition Dynamics and Market Structure

The market for ERP software is becoming an increasingly competitive one. The mature

companies have lost their first-mover advantage to many small companies who are now

providing similar support at much more competitive price. In the past five years, a total of 68

companies have started providing ERP software which has dramatically shaped the competitive

landscape of the software industry. Foreign competition operates in Bangladesh but under the

banner of local companies. A number of foreign companies have partnership with local firms

and thus indirectly influence the market as a whole.

What was once an oligopolistic market dominated by a few sellers two decades ago, has now

transformed into a monopolistic market structure where many sellers are vying for the same

customers with their own differentiated products.

0

20

40

60

80

100

120

140

160

180

19

89

19

90

19

92

19

95

19

96

19

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99

20

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20

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20

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20

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20

14

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EXHIBIT 4: BGMEA PORTAL - USER INTERFACE

Simple mock-ups of the Integrated ERP Portal are depicted below.

Image: Login page

Image: Manufacturer’s homepage

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Image: Search results for sub-contracting showing only manufacturers with free

capacity

Image: Sub-contracting requests from merchandisers and other manufacturers.

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Image: Homepage of an enrolled student or mid-level manager

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EXHIBIT 5: FUNCTIONALITY FEATURES AND SAMPLE E-LEARNING COURSE

OUTLINE

Table: Functionality According to User Roles

Supply Chain Actors Available Functions

All Bulletin Board

Manufacturers Sub-contract Orders

Receive Order Requests

Find Suppliers

Merchandisers Find Manufacturers

View Order Requests

Find Suppliers

Buyers Find Merchandisers

Track Order Sub-contracting

Suppliers Send Quotations

Receive Quotations

Mid-Level Managers Take Courses

Receive Certifications

Receive Job Offers

Explore Job Openings

Apply for Job

Table: Tentative Outline for a Course on “Productivity and Quality Management”

Particulars Details

Targeted Towards Production Managers/officers, Industrial

Engineers, Method Study Officers,

Productivity & Quality-related Managers/

officers

Core Focus Production, Productivity, Lean

Manufacturing & Quality Needs of RMG

Export Sector

Modules Covered HRM, OB & Social Compliance,

Introduction to Garment Manufacturing,

Garment Production Management,

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Garments Quality Management , Industrial

Engineering, Lean Manufacturing, Fire

Safety

Duration 6 Months (2 classes per week)

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EXHIBIT 6: MAJOR CONTENDERS IN PROVIDING THE BGMEA INTEGRATED

ERP PORTAL

With over 700 ERP installations, NaviWorld is the perhaps the most experienced ERP solution

provider in Bangladesh. NaviWorld is also leading ERP Consultancy provider in Africa, Asia,

Europe & Middle East regions supplying international and local companies with IT & ERP

consultancy solutions and products. NaviWorld has an outsourcing centre located in

Bangladesh.

Following NaviWorld are The Databiz Software Limited and Advanced ERP (BD) Limited,

each of whom have installed about 100 ERP solutions. Databiz and Advanced ERP have been

operation in Bangladesh for a quite a while – Databiz entered the market in the year 2000 and

Advanced ERP entered in 1996.

With more than 40 years of experience and nearly 50,000 customers, this SAP’s market-leading

ERP software is a proven, trusted foundation – built to support the world’s largest organizations

as well as small and midsize companies in 25 different industries.

Kandaree is an integrated solution that covers the entire process of an apparel manufacturing

unit. From price quote to actual shipment and its proceeds realized, Kandaree manages the

entire business process of the company. Kandaree collects data from the actual business process

execution and not through any data entry operation. This provides authenticity of the data as

well as internal process control at operation point of the process.

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EXHIBIT 7: POSITIVE SIGNS ACROSS THE RMG SECTOR

It’s difficult to say whether Bangladesh will be able to reach its target. Bangladesh will continue

to be to the global hotspot for RMG manufacturing that’s for sure. 89% of Chief Purchasing

Officers (CPO) from leading apparel players in the EU and US chose Bangladesh as one of

their top 3 sourcing countries (McKinsey & Company, 2011). But doubling performance in a

span of 7 years requires participation from all stakeholders and extensive institutional support.

Currently, Bangladeshi garments exporters pay 15.61% duty to the US, whereas China pays

3.08%, Vietnam 8.38%, India 2.29%, Turkey 3.57%, and Indonesia 6.30% (UNB, 2015). Being

subject to a myriad of tariff and non-tariff barrier Bangladesh has diversified away from its

once core market, US, to non-traditional markets.

Bangladesh has also been under rigorous scrutiny by foreigners but the scenario is improving.

According to a recent study out of 3,500 RMG factories over 2,000 are already complying with

the international standard. Many of these factories have obtained international standard

certificates like ISO-series, GFSI and FSSC (Hye, 2012).

The Bangladesh Institute of Management (BIM), in collaboration with the PSES project

implemented by GIZ on behalf of the German Government launched a Diploma Course on

“Productivity and Quality Management” on January 31, 2013. As a first of its kind course in

Bangladesh, the course is designed to meet the technical needs of middle management working

in the RMG and textile sector, with focus on lean manufacturing (Bangladesh Textile Today,

2013). Some organizations in the apparel sector, like Viyellatex Group, have introduced their

management trainee schemes. It is also mandatory for managers at all levels to attend the

management development programs run throughout the year (Saha, RMG sector faces talent

crunch, 2011).

Stories like these signal that the market forces are catching up and that maybe $50 billion is

not that difficult of a goal.