Garments Industry: A Global Perspective3
Global Trends in Garments3
Garments Industry: A Pakistani Perspective4
FLIGHT TO BANGLADESH8
Application of Porter’s Diamond Model:10
Perspective of a local Garments Importer, Exporter and Distributor16 BENCHMARKING ANALYSIS OF THE GARMENTS SECTOR18
GOOD PRACTICES/RECOMMENDATIONS FOR IMPROVEMENT22
First of all we would like to thank Almighty Allah. We would also like to thank Ms. Khadija Bari, Zahid Aslam - Managing Director BABRI, Mr. Amir Iqbal- Production manager of UNIBRO Textiles, Mr. Ikhtiar Baig- Federal Advisor to PM of Textile, Mr. Mushtaq Vora – ex-Chairman APTMA, Mr. Jawed Bilwani – Chairman PHMA, Mr. Zaheeer A. Hussain – CEO Textile City and Mr. Dawood Zakhura – member of central committee PRGMEA for their valuable help in making this report possible. We greatly appreciate the help.
Garments Industry: A Global Perspective
Textile and Garment can be taken as relatives performing in the same fraternity. Both industries depend on each other however one main difference between these two sibling industries arises at the very grass root level. Textile is more capital-intensive that is it require huge injections of finance and technology while the garments side is more labor-intensive and depends on human resource making it cheaper of the two options (strictly in the case of developing countries where labor is cheaper than machinery). The market for these two industries is colossal, thanks to the basic human necessity of hiding bare bodies. Global garment exports are valued at $ 310 billion and top 15 clothing exporters account for 80% of the exports. EU is the biggest exporter while China is second biggest exporter.
Global Trends in Garments
Geographical shift: Till 2004, there was an international treaty called Multi-Fiber Arrangement (MFA) which had placed quota restrictions and textiles and garments manufacturers among WTO members. On January 1 2005, MFA expired and ended restrictions which had been placed for almost four decades. The main impact of MFA was on the exports from low-cost countries such as India, Pakistan and Bangladesh to regions like EU and US. After the abolition, new doors of business were opened to these low-cost countries and China led the way in grabbing market share internationally.
Lean Retailing: In this day and age, those retailers are considered smart retailers who focus on selling the garments only while depending on the suppliers for rest of the supply chain activities and such a retailer is called ‘Lean Retailer’. This has forced to suppliers to offer a complete package to the retailers which include both the upstream and downstream services. Retailers have adopted methods which have eliminating the need for agents and hence, they deal directly with manufacturers who are required by the company to provide a range of other activities than was traditionally expected of them. In some cases, garment manufacturers may even be asked to track the stock of retailers and arrange for replenishment when need be. This might require them to use advanced technologies such as RFID. This poses a major challenge for Pakistani manufacturers as their know-how is not this advanced that they employ modern technologies to coordinate their activities with huge retailers.
Speed-to-market: Like all industries, garments industry too has become very fast. There was a time when retailers placed orders way before the season started. But now with the help of technologies such as RFID and Barcode, they have adopted practices like Just-In-Time inventory. This trend has put a lot of pressure on the suppliers who have to supply goods fast and irregularly. The supply chain must be highly integrated in terms of information...