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1.

0 INTRODUCTION
Bangladesh is a developing country RMG play a vital role in our economy. Its contribution in
GDP 76%. After introducing this sector in our country unemployment problem solved at
some extent. Though the economy of our country is primarily agro based but without
industrialization it is doubtful, whether a country like Bangladesh can break out its cycle of
poverty and decrease the even loaded foreign loan.
2.0. OBJECTIVE OF THE STUDY
To enhance the knowledge about the value chain analysis by studying an end to end process. I
have chosen the garments manufacturing system end to end process for value chain analysis.
3.0.METHODOLOGY OF THE STUDY
Both primary and secondary data have been collected for the purpose of the study.

Primary Data:

The primary data are collected by following ways:


I.

Talking with few people involved with garments manufacturing

process and selling business


II.
Other informal ways.
Secondary Data:

Secondary data is the main source of information collection for this study
The secondary data are collected by following ways:
I.
II.

Web Sites
Different media like: Newspaper, news articles etc

4.0 VALUE CHAIN ANALYSIS

Michael Porter has identified a set of interrelated generic activities to analyze the firms
competitive advantage. It is useful to model the firm as a chain of value-creating activities.
The value chain is useful to assess the areas of weakness and then strengthen those areas for
companys profitability and competitiveness. The model is useful in determining the ways in
which an organization can implement IT or add value to the products and services. The goal
of these activities is to create value that exceeds the cost of providing product or service, thus
generating a profit margin. The generic chain consists of five Primary activities and four
Support activities.
Value Chain Analysis for Basic T-Shirt
The primary activities will differ as the model of service changes, but the support activities
will not differ. An application of the Porters value chain model is as follows:

Figure: Porters Value Chain Model.

The above figure suggests that garments manufacturer performs a number of operations. The
primary activities at Basic T-Shirt are comprised of ordering, fulfillment, design and
manufacturing, and among these activities, ordering was the most regular, precisely defined,
and standardized around the world.
garments manufacturer has a flat and decentralized decision-making. The store managers at
garments manufacturer had the autonomy to select the inventories at each store rather than
depending on the headquarters to make the decision. The store managers decided items on
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sale, and deal with the customers, property owners, and contractors. The store managers
communicated with the commercials and worked in close proximity. The commercials decide
on the clothes production and design and higher-level managers typically did not review their
decisions.

Garments manufacturer distribution centres manage the inbound logistics of receiving,


warehousing and inventory control of input materials. These centres receive bulk quantities of
each garment and then recombining each garments for shipment to each store. The use of
information systems helps keep track of the stock- keeping units. Garments manufacturer
does not stock inventory and so reduces the inventory risk. There is little inventory anywhere
in the supply chain. The clothes reach from the factories to the distribution centres to the
stores for sale. Garments manufacturer has pioneered its operations, which enables the
constant introduction of new items in short lead times.
The stock-keepings units and the distribution centres manage the outbound logistics where
they match the supply and demand. The production of the items was determined according to
the demand of the item to reduce the overall cost and inventory risk.

Production process is supported by various activities such as procurement, technology


development, human-resource management, and firms infrastructure. Most of the activities
are common to other industries. On the support activities for production, it has an internal IT
department for the development of various applications. This use of information technology
has reduced the overhead costs and has developed a cost advantage.

Manufacturin
g

Recommendation

Yarn (752 KG@212.77)


Knitting
Process loss: 0.5%
Dyeing
Process loss: 5%

15600
64000

Printing

Process loss: 4%

62640

Use JIT to reduce lead time


Use JIT to reduce lead time
Use ERP and Lean manufacturing

Cutting
Sewing
Finishing

Process loss: 3%

50400

Use ERP and Lean manufacturing

Process loss: 4%

180480

Use ERP and Lean manufacturing

10800

Use ERP and Lean manufacturing

Process loss: 3%

70713

5.0 Key Findings


Primary

Current Scenario

Activity
Ordering

Manual checking of

Problem(s)

Solution(s)

Lack of in-store

In-store computers to

inventories for

computers to check

check inventories

ordering

inventories and
sales. Also cannot
match the exact
inventory

Cannot look at
inventories in other
stores

Fulfilment

Commercials cannot

Lack of in-store

match the exact

computers makes it

supply and demand

difficult to check

To make use of IT

which store needs


the items
Design

Commercials decided
on the design

Commercials

Use of IT will help

within the design

track sales data, and

teams make a

ease the

guess of the design

communication with

and communicate

the store managers

it with factories
Manufacturing

Has vertically

Internally developed

Use of universal

integrated

software applications are

compatible software

manufacturing

not compatible with the

operations,

outside applications

which enables
constant
introduction
5

of new items
with short
lead times

Has internally
developed
simple
applications to
plan
production

Distribution
Centres

Distribution Centres

The Internally developed

Use of vendor

use internally

software may not be

compatible software

developed

compatible with the

applications to

vendors

control the
distribution centres
automation often in
collaboration with the
vendors of conveyor
equipment
Stores

The store managers

No in-store networking

In-store networking

manually check the

available

should be available

Problem(s)

Solution(s)

Internally developed

Use of vendor

inventories

Support
Activity
Administrati

Current Scenario

Uses standard

on and
Systems

commercial

applications by the IT

applications for

department may not be

office

suitable for use

compatible software

productivity
(wordprocessing, emails)

IS department
responsible for
the internal
development of
applications

Procurement

There are fewer

Lack of computers in

In-store computers

inventories in the entire stores, makes it difficult to


supply chain

match the exact inventory

Business

Has support areas for

Communication is difficult

Support

Expansion,

Time consuming

Areas

Use of IT for
easy

International,

communication

Logistics,
Raw material,
Manufacturing Plants

Use of IT can
make centralized
operations
possible