Covid-19 outbreak crisis has greatly shaken up worldwidefashion industry in recent days. Apparel manufacturers & their backwardlinkage supply chain (raw material producers, service providers, garmentmanufacturers, shipping agencies, banks etc.) are struggling to survive asbillions of dollar worth orders are hold/cancelled/rephased as well as paymentblocked or rescheduled by the clients. It is becoming worst with differentpercentage of discounts applied by buyers on goods ready for shipment. Because ofvarious exisGng set rules / pracGces in the business, manufacturers dont haveany bargaining or negoGaGon power to protect themselves from this catastrophe.Recently I have published an arGcle how manufacturers are dragged into suchdiscounts & overall helpless situaGon. Post Covid-19 era will not be sameas it is now, and current and exisGng business norms need a complete overhaul.Hence, I have put my thoughts together on what changes must come to establish asustainable fashion supply chain worldwide:
1. True Partnership: RMG manufacturers surely have competitivedisadvantages in current business structure. The most important & desiredpoint is the partnership & trust between the clients and the manufacturers.It is important that the manufacturing side of the supply chain is treated asactual "partners" instead of being pressurized by clients, and theonly way is to be stronger together rather than weaker apart.
2. Change in payment terms:
3. Insurance for situations like Covid-19 outbreak:
4. BGMEA registration for buyers: All brands & retailers are currently conducting their manufacturing /order placement individually to manufacturers where they have their own and separate terms & conditions and payment rules which the manufacturer is obliged to accept without any room for negotiation. There is absolutely no provision for objecting clients purchasing practices. And moreover, a singly manufacturer is not strong enough to take any legal action individually against a USA/ EU retail giant if any conflict arises. Hence, all brand, retailer, importer working with Bangladesh must come under Bangladesh Garment Manufacturers & Exporters Association (BGMEA) registration process by which we can ensure a combined safeguard structure for the manufacturing community. This should ideally cover: i. Checking clients terms & condiGons, supplier agreement, payment terms etc. ii. Establishing and ensuring compliance of ethical purchasing practice of the clients. iii. Enforcing barrier for manufacturers that no one is allowed to manufacture any goods which dont meet the centrally agreed norms & terms. iv. Handling all legal disputes by central a Legal Cell in case of any conflict.
5. Involvement of Govt. to regulate business: Suggested changes mentioned above shall require involvement of the Govt. to change & enforce relevant practices and rules. A single manufacturer or the association of the manufacturers may not be able to ensure all these changes unless there is a strict & combined national policy. We have been in for fear for last 40 years that the client may leave if we do not comply with whatever their demands. But the Covid-19 situation has illustrated it vividly that this industry may not survive despite of acquiescing clients requirements blindly. Other production hubs around the word like China, Vietnam, Cambodia have set their own examples and rules for the same business. In it is time to step out of our fear zone and formulate a strong national policy.
6. Strong association of manufacturing hubs: Effective & strong association of inter country manufacturers can play a vital role in sharing experience and to set combined effort to keep the supply chain sustainable.
7. Neutral supreme authority: One single supreme authority (like WTO) for setting up the business rules & solving disputes in apparel business worldwide shall be very beneficial for the whole supply chain.
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