What needs for transformation of Bangladesh textile and apparel industry?

Rahbar Hossain Akash       
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Figure 1: ATM Mahbubul Alam Milton gave keynote speech on ‘Transformation’.
Figure 1: ATM Mahbubul Alam Milton gave keynote speech on ‘Transformation’.
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Bangladesh textile and RMG sector has a target of taking RMG export to 50 billion USD by 2021 set by Bangladesh Garments Manufacturing and Exporters Association (BGMEA) and the government in 2014, which seemed feasible when the target was set. However, at this stage, it seems quite impossible where in 2016-17 fiscal year apparel export was 28.15 billion USD with only 0.2 percent growth from previous year. So the Bangladeshi textile leaders and owners are continuously discussing, thinking and trying to find out the possible way out over the problem. With this continuity, Bangladesh Textile Today organized country’s first ever “Textile Youth Leadership Summit-2018” where textile leaders, young engineers and up-coming engineers gathered under the same roof. The summit adorned with four segments including opening session and in this article, the “Transformation” session is depicted.

ATM Mahbubul Alam Milton, Executive Director(ED) of Masco Group was the keynote speaker of the session. The article has been written based on his presentation and the speeches of other panel members.

Prof. Dr. AyubNabi Khan, Pro-VC of BGMEA University of Fashion & Technology was the moderator and the panelists were Prof. Sayed Fakhrul Hassan Murad, Chairman, Dept. of Textile Engineering, Southeast University; Mohim Hassan, CEO & Managing Director of Northern Tosrifa Group; M R Jamil Tipu, Executive Director of Akij Group; Mohammed Shohel Ahmed, Head of Manufacturing Excellence-BD, QA services Hong Kong Limited (Lidl), Bangladesh Liaison Office; Nure. A. Khan, Head of Laundry Industries Ltd. Envoy Group; Gulshan Ara Munni, Product Manager, Home Supply Chain, BD Region, PULS TRADING FAR EAST LTD. (H&M Bangladesh Liaison Office) and Reajul Hasan, PhD candidate in Textile Technology Management, NC State University, USA.

Figure 2: Distinguished guests in the panel along with the keynote speaker ATM Mahbubul Alam Milton and the moderator Prof. Dr. Ayub Nabi Khan in the session ‘Transformation’.
Figure 2: Distinguished guests in the panel along with the keynote speaker ATM Mahbubul Alam Milton and the moderator Prof. Dr. Ayub Nabi Khan in the session ‘Transformation’.

ATM Mahbubul Alam Milton said, “Textile sector is our growth engine and today it is providing us 28 billion USD export but we want to take it to 50 billion USD. For this, right now we need some transformations to make the target happened. Mckinsey reported in 2011 that Bangladesh was declared as the next hot spot for sourcing in the RMG market next to China. If we want to make transformation, we have to think across.”

Figure 3: Export performance, growth expectation and target of 50 billion USD, Textile & Apparel industry require a major transformation to achieve the goal.
Figure 3: Export performance, growth expectation and target of 50 billion USD, Textile & Apparel industry require a major transformation to achieve the goal.

The global market trends

“For the transformation, it is needed to know about global market and in 2015 total market size was 450 billion USD, in 2016 it decreased to 444 billion USD and in 2020 the expected growth will be 650 billion US,” ATM Mahbubul Alam gave these data and said in his keynote speech that the opportunity for Bangladesh is not only 50 billion it even could be bigger. However there potential challenges which he depicted to move forward. He stressed on the importance of understanding the changes in the global fashion trends. He showed how economies are changing and how consumers and their choices are shifting. ATM Mahbubul Alam Milton said, “Today’s global economy is predictably unpredictable because of global politics and many other causes. Only 21% people who are consumer have positive expedition. Consumer behavior is also shifting; for example, Americans used to prefer the products produced in USA or in the American regional countries over the products coming from other countries. But now, this attitude has been decreased for globalization.”

Figure 4: Major transformations the global fashion industry to see in recent future.
Figure 4: Major transformations the global fashion industry to see in recent future.

“Customers are shifting in many ways like many companies are now giving customized service and making products as per customer requirements. “Need to you”, “need for you” and many other concepts are coming day by day,” he said.

He pointed out another form that is online-based sale, it has seen in a report that in South Asia, the people who spend about 8 hours in online they like to buy their products from online shop and pay their payments in online too. It is predicted that about 20% super malls in USA will shut down and they will go in online based systems. Many companies are employing artificial intelligence instead of salesman for selling like “Sophia” is introduced in Bangladesh few days back in a restaurant.

He said that many companies are making supply chain of a product open for the customer for being more trustworthy. Off price deception is another way to take attention of the consumer. By ‘start up thinking’ and ‘generating new ideas’, many old brand may shut down by new thinking and strategy, Mr. Milton depicted.

Figure 5: The keynote depicted that consumption is increasing in Asia & Elsewhere more than that of in the west.
Figure 5: The keynote depicted that consumption is increasing in Asia & Elsewhere more than that of in the west.

Mr. Milton stressed on the importance of the Asia and other emerging markets. He depicted that more growth and opportunities will come from countries like China, Russia and India.

The most important phenomena highlighted in the keynote is ‘the speed’. Mr. Milton showcased lead time will drastically go down in coming days. The speed of working in the fashion industry will increase significantly, whoever will be able run with that speed will succeed.

Figure 6: The 'Fast Fashion' trend.
Figure 6: The ‘Fast Fashion’ trend.

Transformation in textiles and apparel industry

Before proposing the transformation model Bangladesh should follow, Mr. Milton explained the current position of the country in traditional transformation model of apparel indsutry. He said that Transformation has three phases: ‘T-shirt Phase’, ‘Race to the Top’ and ‘High End of the Spectrum’. T-shirt phase means at the beginning of a country it starts low wage business like textile and buyers keep giving low price. But after time passes, the entrepreneurs can’t accommodate the price and they go for value added products where skilled manpower are needed and this phase is called ‘Race to the Top’. When this is also being matured, then the country starts assembling business or electronic company and this phase is ‘High End of the Spectrum’. In 19th century, America went to ‘High End of the Spectrum’ from ‘Race to the Top’, now China is in between ‘Race to the Top’ and ‘High End of the Spectrum’ and Bangladesh is in between ‘T-shirt Phase’ to ‘Race to the Top’.

Figure 7: The traditional transformation model of textile and apparel industry.
Figure 7: The traditional transformation model of textile and apparel industry.

The keynote summarized that Bangladesh has all sort of potentials to move further forward attaining the transformation towards ‘Race to the Top’ to ‘High End of the Spectrum’.

Transforming major challenges into opportunities

In Mckinsey report, they mentioned five challenges: infrastructure, compliance, skilled manpower, raw materials and economical and political stability for Bangladesh in gaining the expected transformation. Bangladesh’s infrastructure is improving over the days. Our ports have 0.8 million PUS garments handling capacity, if the capacity of ports get double then it will be 1.3 PUS but the target capacity is 1.6 PUS and the shortage is 0.3 PUS. Government is taking initiatives about it, Mr. Milton said.

He also said, “There are also utility problems specially gas problem. By this year, there will be alternative LNG gas for resolving the gas problem. Regarding compliance, there is a significant achievement for Bangladesh that among top 10 ranked LEED certified factories in the world, 7 factories are Bangladeshi.”

 It gives Bangladesh a new branding image and Mr. Milton said that it is the time to say “The Incredible Bangladesh”. He also thanked Bangladeshi entrepreneurs for such a quick investment and acceptance of ACCORD and ALLIANCE.

The ‘Transformation’ model for Bangladesh

For textile and apparel industry transformation, he suggested some solutions like innovation, agility, collaboration, visionary, integrity and impactful.

He said, “For transformation, we need innovative processes, methods, products etc. Agility of work also needed for country like Bangladesh. Collaboration is another important tool for transformation among entrepreneurs.”

Figure 8: The proposed 'Transformation' model for Bangladesh.
Figure 8: The proposed ‘Transformation’ model for Bangladesh.

Mr. Milton told that individually our entrepreneurs have everything which may costs much but if we make an industry zone and work together by business collaboration, and then a big transformation might come. For this, he added, we need visionary people in positive mindset and concept. For long term success, integrity is a must, because without fundamental basics, any success is short term. For those entire things, someone has to be impactful and thus transformation will occur.

 “The solutions will come by the hand of the young’s who have leadership mind. The main leadership attribute is the pro-activeness. Someone may be called pro-active who take responsibilities and initiatives willingly to make something happened. Reactive peoples are those who fear to be changed and wait for others to make the environment suitable. Pro-active people always makes reference which followed by others. If an organization has a group of pro-active people then it will have sustainable growth and transformation will be happened”, he added with informing that Masco group aligned all of its stuff to its goal for transformation and team building culture.

Figure 9: The proposed 'Transformation' model for Bangladesh Textile & Apparel Industry.
Figure 9: The proposed ‘Transformation’ model for Bangladesh Textile & Apparel Industry.

He informed that for process transformation, KAIZEN tools are used. KAIZEN is a continuous improvement process. In China, about 7 million KAIZEN teams are working, in India 55 thousand KAIZEN teams are working, in Japan 52 thousand teams are working but in Bangladesh there is no registered KAIZEN team. In Bangladesh, our garments sector has only 10% value addition activities, but if it increases to 20 percent by KAIZEN, huge transformation is possible here. Value addition in product is another way of transformation.

Panelist Mr. Sayed Fakhrul Hassan also emphasized on value addition of product for transformation. Mohim Hassan said, “Habit of reading is needed for transformation. It is for better understanding and collaboration which helps in transformation.” He also said that companies should be focused on new ideas for transformation.

M R Jamil Tipu said that government should have policies for new industries. “There are no private economic zone for textile industry which is really frustrating. Power problem is acute in Bangladesh mostly electricity and gas problem”, he added. He noted that Bangladesh should have more spinning mills for transformation and government should give subsidies for spinning sector.

Gulshun Ara Munni said, “We should be boosted up and should be innovative, creative and do more research for transformation.” She marked the point that we should be disciplined with time, which will help in real transformation.

Mohammed Shohel Ahmed said, “We are not utilizing our experience which is a great resource for transformation.” He said the young generation has to take responsibility with integrity. Mr. Nure A. Khan said, “We should be resourceful for transformation” and gave consent to Mr. Milton’s suggestion.

Rejaul Hasan said, “Give lesser focus and do hard work for transformation.”

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