Armanul Azim, FIPM

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There is no correlation between​capacity enhancement and order flow increase. That means the way we have increased the capacity, the order flow did not increase similarly; so, as a matter of fact, competition became fierce to grab the limited orders, and that ultimately caused a drastic fall in price. On the other hand, the factory owner/management did not give real projections to the brands or buyers that we are increasing such capacity on so and so date and in order to feed that, we require such quantity enhancement from the specific date. That means it was an unplanned capacity enhancement.

As a currency, the Taka has become strong: whether it is artificially done or controlled by the central bank,’ that discussion may be avoided. But for the last 4-5 years, there has not been much deviation in the exchange rate. So, RMG, as an exporting sector, is facing unequal competition from some of the neighboring economies like India and Pakistan. In recent days, lots of orders have gone to Pakistan only for this reason.

Over time, many working areas can ​be automated, ERP needs to be introduced to have real-time data, machines need to be modernized, motion expeditions, and so on, but we are ignoring them!

Wage hikes and price increases in power and gas also played a role, though I personally feel an increase in wages was inevitable and necessary. We could have covered up that by increased efficiency, but we could not. Our country’s man-machine ratio (correlated with efficiency) is also high. On the other hand, in the context of efficiency, we also remain on the lower side.

Hidden costs are really adverse to the cost of business, such as renewal of licensing, transport costs, miscellaneous expenses in different scenarios, the competitiveness of ports, extended time for raw material sourcing, etc.

We could not become a leader in alternative markets other than the USA and EU, which includes the UK. Emerging markets like China, India, Brazil, Mexico, Russia and then the federation Asia Pacific, Part of East Europe etc, are unexplored till now. We couldn’t develop different product ranges also for different countries’ perspectives or strategize marketing.

A few owners (I am not generalizing) diverged funds or over-invested for other purposes, which led to high gearing/leverage and, ultimately, the project’s illness.

Sales of most giant brands went down, but online sales are boosting. Information reveals that a couple of years ago, online garment sales were 5 billion dollars, but now they are more than a trillion dollars. The online brand vendors are shipping garments in 17-25 days’ lead time, but we can’t make them ready.

At the age of the fourth industrial revolution and as the Z-Generation is entering the workforce, both employers and HR Management Professionals should prepare to meet the needs of the economy and face potential challenges positively so that we can regain expected export growth in the RMG sector.

About the Author:

Mr. Armanul Azim FIPM is the Chief Operating Officer of Tosrifa Industries Ltd and Fellow Member & Secretary General of the Institute  of Personnel Management Bangladesh (IPM)

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