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Visibility in Supply chain: Way of Reducing risk (Part-1, Supply side)

Apr 22, 2012

Bangladesh is the 4th largest ready-made garments exporter in the world. With the buoyancy of this sector a number of supporting industries has been developed. Textile industry is one of them on which Garments industry depends for quick supply of its raw materials. But a matter of concern that Bangladesh is producing only 70 thousands Bale against total demand of 41 lakh Bale in a year that is only around 2% of total demand. The other 98% is imported from different countries like Uzbekistan, India, Australia, USA etc.
Few days ago when India banned the export of Cotton .With that action of Indian Government Textile Industry of Bangladesh was hit tremendously as around 40% of total cotton is imported from India. If we analyze the broad picture of that decision of Indian Government We see different issues also. This year the weather of Uzbekistan was unfavorable to cotton production that reduces the cotton supply in the international market. China was so aggressive to enrich the cotton stock by importing a large amount of that. This situation may motivate India government to impose ban on cotton export. It was a great threat to Textile industry and obviously RMG Industry of Bangladesh.
Now, the business leaders and responsible government officials of Bangladesh are visiting different countries and searching for other sources of cotton. Just think, if they can’t manage other sources of cotton what impact it will have on textile Industry? On RMG Industry? Will they start to import textile product from India or other countries? What will happen to the Local textile producers? Will the customer ready to sacrifice the time and cost of this replacement?
It’s a difficult time for Textile & Garments Industry indeed! At the same time it’s a great challenge for the business firm to continue with the same sort of offerings to customer even in the difficult times. But how can a firm continue being affected by that sort of difficulties? Marinating visibility within the supply chain can be a solution.
So what is visibility within the supply chain? The most basic definition is the track-ability of products in transit from the manufacturer to the final destination. These could be parts or components used to make a final product or the final product itself. In a broader sense, visibility is the increase of available data that can be analyzed to make recommendations and determine strategies to improve and strengthen a supply chain. There are certainly different levels of visibility, but as risks in the supply chain continue to occur and customer demand continues to be less understanding of disruptions, more companies are recognizing the importance of creating and managing a visible supply chain.
Maintaining visibility needs a periodic review of the environmental situations related to products. It can help to decide proactively what needs to do to manage the customers’ orders within the right time, right price and of right quality. Now let’s think about the facts & situations that need to be analyzed by the textile company owners of Bangladesh with a periodic basis-

1. Production environment of cotton in Exporting countries
2. Type of cotton marketing channel arrangement of those countries
3. Exporting countries’ Government policy regarding cotton export and tax structure
4.Shipping regulations and difficulties and opportunities of shipping cotton from exporting countries
5. Clear understanding of Bangladesh Government’s tax policy regarding cotton.

If the businessmen can analyze these facts and situations efficiently and can decide timely and proactively, they can achieve customer’s satisfaction easily. This is the opportunity to reduce risk that can be found by maintaining visibility within the supply chain.

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Mr. Julfikar Islam is currently studying Marketing (4th year) at University of Dhaka. He is truly an organizational being. He has been working with a number of knowledge-based organizations for last 3 years within the University. His area of specialization is Supply Chain Management. He also has an effective knowledge about Branding, Current Market trends. He has been blogging for last 1 year about these issues in a number of national blog and community website.

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