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What will be the ‘post COVID-19 scenario’?

Coronavirus disease 2019 (COVID-19) is the name of the pandemic, which shook the global business and economy. Bangladesh’s most export sector including RMG faced its terror. Most of the Buyers canceled the order and few reputed brands said they will not cancel the order but the reality is different.

apparel-fashion-after-COVID-19
Figure 1: Bangladesh RMG sector needs to focus on supply uncertainty management after the pandemic.

“They never said they would pay. They simply said we would not cancel the products, “said Mostafiz Uddin, Managing Director, Denim Expert Ltd.

“It is the same for my workers to cancel or not to buy the product. The workers are not getting money. ”

BGMEA President Rubana Huq said the backward order and both existing and future orders are prevalent in the country’s garment manufacturing sector. “They say, ‘OK, we are taking the goods, but we never know'” It can be anywhere between 120 days to 360 days.

H&M, Inditex and Target responded that they would be committed to their suppliers, but did not provide a deadline to confirm when they would pay for the order or whether they had already paid; C&A says its goal is to “deliver as many orders as are commercially viable”; And the Bestseller says it will do its “best” to survive promisingly.

Before the pandemic of COVID-19, Bangladesh’s RMG supply and demand chain were quite stable. But COVID-19 caused an uncertain supply chain and put $2 billion on hold and more than $1.5 billion worth of garments have been canceled according to data provided by the Bangladesh Garment Manufacturers and Exporters Association.

Currently, both demand (production) and supply chain are stopped. Every pandemic will eventually get a solution like Plague, Spanish Flu, Ebola, etc. Bangladesh has to be ready for future demand and supply chain uncertainty. Before the pandemic of COVID-19, Bangladesh’s RMG supply and demand chain were quite stable.

supply-demand-Before-COVID-19
Figure 2: Before COVID-19 Pandemic.

But COVID-19 caused an uncertain supply chain and put $3 billion worth of garments on hold and more than $2 billion worth of garments have been canceled, according to data provided by the Bangladesh Garment Manufacturers and Exporters Association. Currently, both demand (production) and supply chain are stopped. Every pandemic will eventually get a solution like Plague, Spanish Flu, Ebola, etc. Bangladesh has to be ready for future demand and supply chain uncertainty.

Current-situation-COVID-19
Figure 3: Current situation of COVID-19 pandemic.

RMG manufacturers are waiting for the end of the COVID-19 pandemic. Until then the whole production RMG manufacturers have been stopped. Bangladesh RMG sector has the best business strategy make-to-order, which means products are not made until a confirmed order for products is received. The apparel industry will last until the end of human civilization. Here are the 3 factors solve the demand uncertainty:

Uncertainty Data Analytics Value
What and how much Bangladesh RMG sector will be going to sell in the future? Historical sales, independent variables (demand drivers). Forecasting, predictive analytics for tender demand. High forecast accuracy is key to bringing down inventory, transportation and supply chain cost without hurting customer service. Some see an increase of 5-10 percent inaccuracy.
How many buyers and brands will return?

 

Historical sales, historical returns, customer data Forecasting and predictive analytics. Planning, differentiated returns policies.
What kind of quality problems will my customers experience? Claims, collaboration, IoT Text analytics, predictive analytics, edge analytics. Warranty costs, brand reputation. Some see a 10-15 percent reduction in warranty costs.

Thus, it has been confirmed that no matter how uncertain the RMG sector is, there will always be demand for apparel. But in the near future, Bangladesh RMG sector may face problems with its raw material supplier, which mostly dependable in China.

Bangladesh-RMG-manufacturers

Local fabric and accessories manufactures aren’t enough to cover the Bangladesh garments sector. Currently, around 1,800 factories are producing accessory items and BTMA has 802 fabrics manufacturing mills in the country for 4614 BGMEA members.

Seven-supply-uncertainty-management-strategies
Figure 4: Seven supply uncertainty management strategies.

Bangladesh RMG sector needs to focus on supply uncertainty management. Bangladesh already has a make-to-order strategy to meet demand uncertainty. It needs to come out of this strategy.

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