Internship Report

On
Supply Chain System of Apparel industry A Case Study on Pacific
Jeans Limited, CEPZ, Chittagong.

This internship report has been submitted in fulfillment the requirements of

the degree of Master of Business Administration in Operations and Supply
Chain Management

Chittagong University Center for Business Administration

Faculty of Business Administration
University of Chittagong

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 Internship Report
On
Supply Chain System of Apparel industry A Case Study on Pacific
Jeans Limited, CEPZ, Chittagong.

Submitted By
Mohammad Sumon Sheikh
ID: EV193071039
Session: 2018-19
Program: MBA

Supervised By
Dr. Mir Hossain Sohel
Professor
Department of Marketing
University of Chittagong

Date of Submission
15th January, 2022

Chittagong University Center for Business Administration

University of Chittagong

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Letter of Transmittal
15th January, 2022

Dr. Mir Hossain Sohel

Professor
Department of Marketing
University of Chittagong.

Subject: Submission of Dissertation Paper.

Dear Sir,

With due respect and modesty, it’s my enormous pleasure in presenting to your good self, the
dissertation paper titled as “Supply Chain System of Apparel industry A Case Study on Pacific
Jeans Limited, CEPZ, Chittagong.” as part of my course requirement. I found this report to be
truly challenging in many aspects, indeed very interesting. Writing this report was truly
comprehensive learning experience.

I have tried my level best to complete the report with respect to the desired requirements.
However, if any explaining is required, I would be honored to oblige. Kindly accept this humble
effort of bringing forward my research and findings on the subject matter.

Sincerely yours

Mohammad Sumon Sheikh

ID No: EV-193071039

Batch: 15th

CUCBA, University of Chittagong.

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 ACKNOWLEDGEMENT

First of all, I am conveying my gratefulness to the Almighty Allah, the most Merciful and the
Compassionate, for his special kindness to give me the opportunity to complete the MBA degree
successfully and prepare dissertation timely.

For this dissertation paper, I would like to show my endless gratitude to dissertation supervisor
Dr. Mir Hossain Sohel, Professor, Faculty of Business Administration, University of Chittagong
for his enormous support and careful guidance. Without his guidance it was almost impossible to
carry out the dissertation work. He has been very helpful and ever affectionate to endure the
mistakes I had committed in the dissertation and always encouraged myself by correcting my
wrong proceedings. It is only the endless support offered by him that enabled me to complete
this mammoth task.

I would also like to express my gratitude to Pacific Jeans Ltd. fellows, seniors who gave me
good advice, suggestions, inspiration and support. I must want to mention the wonderful working
environment and group commitment of this organization that has enabled me to deal with a lot of
things.

At last, however not least, I am very grateful to my entire family members mainly to my father
and mother for their respective support and inspiration to accomplish my dissertation
successfully.

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 EXECUTIVE SUMMARY

This is the era of booming industrial sector in the world especially in developing country like
Bangladesh. Readymade Garment (RMG) industry is one of the largest sectors supporting the
economy of Bangladesh and proper business strategies which must be maintained for its growth.
To grow in apparel industry in the highest level in front of the world the most effective technique
is practicing actual supply chain management in apparel sector right now. In Bangladesh most of
the factory don’t practice an effective and sophisticated supply chain management. It is the time
to establish a technological and fastest supply chain in Bangladesh apparel industry.

The major objectives of the study are exposing supply chain theoretical knowledge and exploring
supply chain system of Pacific Jeans as well as identifying current challenges of apparel in
respect of Pacific Jeans. A qualitative approach has been used to collect data from secondary
sources like books, journal, reports etc. At last, a questionnaire survey has conducted to identify
current challenges of apparel industry and explore supply chain procedure of Pacific Jeans.

First of all, this report briefly discussed on the conceptual and theoretical knowledge of supply
chain management which have collected from different reports, books and journal. It has
identified supply chain features, components, tools and techniques, challenges of current supply
chain practices. Secondly this study has focused mainly on supply chain procedure of Pacific
Jeans Limited and identified some challenges of apparel industry by questionnaire where main
participants are Pacific Jeans employees. The study has explored relationship among supply
chain tools and components like inventory management, purchasing, sourcing and distribution.
At the end the questionnaire survey has identified ten current challenges of apparel industry
which one is most important has been indicated by percentage method.it concluded the most
important challenges are lacking of sophisticated information system as well as poor knowledge
on supply chain activities. By analyzing current challenges, it has proposed some activities and
recommendation which will help to tackle these challenges. As a result, it has recommended to
improve information system for quick sharing of data among supply chain members and arrange
a proper training session for the people who are involved in supply chain activities.

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Table of Contents
Particulars Page
Letter of Transmittal 3

Acknowledgement 4

Executive Summary 5

Table of Content 6-8

Chapter 01 ....................................................................................................................................... 9

Introduction ..................................................................................................................................... 9

1.1 Background of the Study: .................................................................................................... 10

1.2 Objectives of the Study: ...................................................................................................... 11

1.3 Methodology of the study: ................................................................................................... 11

1.3.1 Primary Sources of Information: ................................................................................... 11

1.3.2 Secondary Sources: ....................................................................................................... 12

1.4 Scope of the Study: .............................................................................................................. 12

1.5 Limitation of The Study: ..................................................................................................... 12

Chapter 02 ..................................................................................................................................... 14

Literature Review & Conceptual Framework ............................................................................... 14

2.1 Literature Review: ............................................................................................................... 15

2.1.1 Apparel Industry in Bangladesh: ................................................................................... 16

2.1.2 Supply Chain of Apparel Industry: ............................................................................... 17

2.2 Conceptual Framework of Supply Chain Management (SCM): ......................................... 18

2.2.1 Definition of Supply Chain: ............................................................................................. 18

2.2.2 Essential features of SCM: ............................................................................................... 18

2.2.3 Objectives of Supply Chain Management ........................................................................ 19

2.2.4 Components of Supply Chain Management: .................................................................... 20

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 2.2.5 Common Terms and Documents Using in Supply Chain: ............................................... 24

2.2.6 Global Challenges of Supply Chain Management in Apparel Industry: .......................... 26

Chapter 03 ..................................................................................................................................... 27

Supply Chain Management Procedure of Pacific Jeans ............................................................... 27

3.1 Procurement and Purchasing Process of Pacific Jeans: ....................................................... 28

3.1.1 Authority Structure: .......................................................................................................... 28

3.1.2 Supply Chain Model of Pacific Jeans: .............................................................................. 29

3.1.3 Responsibilities of Supply Chain Department: ................................................................ 29

3.1.4 Interlinked Department to Supply Chain Management: ................................................... 30

3.1.5 Procurement and Purchasing Process of Local Goods at Pacific Jeans: .......................... 32

3.1.6 Procurement and Purchasing Process of Import Goods at Pacific Jeans:......................... 40

3.2 Sourcing Process of Pacific Jeans: ...................................................................................... 43

3.3 Inventory Management System: .......................................................................................... 46

3.4 Distribution System of Pacific Jeans: .................................................................................. 47

Chapter 04 ..................................................................................................................................... 49

Analysis and Findings ................................................................................................................... 49

4.1 The Current Challenges of Apparel industry in the context of Pacific Jeans Ltd.: ............. 50

4.1.1 Response Rate of respondents: ......................................................................................... 50

4.1.2 Demographic Information of Respondents: ..................................................................... 50

4.1.3 Years with the Organization: ............................................................................................ 52

4.1.4 Supply chain positioning of the respondents: ................................................................... 52

4.1.5 Current Challenges of Apparel Industry Supply Chain: ................................................... 54

4.2 Discussion & Findings: ....................................................................................................... 56

Chapter 05 ..................................................................................................................................... 58

Recommendations & Conclusion ................................................................................................. 58

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 5.1 Recommendations: .............................................................................................................. 59

5.2 Conclusion: .......................................................................................................................... 61

References: .................................................................................................................................... 62

APPENDIX ................................................................................................................................... 65

List of Figures
Figure 1: Supply chain stages ....................................................................................................... 17
Figure 2: Steps in the Procurement Process .................................................................................. 22
Figure 3: Basic Supply Chain of Pacific Jeans ............................................................................. 29
Figure 4: Log in Page of ERP ORACLE Application .................................................................. 34
Figure 5: Data Input of Material Stock by ERP ............................................................................ 34
Figure 6: Purchase Requisition Submission and Checking .......................................................... 35
Figure 7: Move Order Transfer Note (Hard Copy) ....................................................................... 35
Figure 8: Final Purchase Requisition (PR) from MCD ................................................................ 36
Figure 9: Comparative Statement (CS) Prepared by Supply Chain Department .......................... 37
Figure 10: Making Purchase Order ............................................................................................... 38
Figure 11: Final Purchase Order ................................................................................................... 38
Figure 12: Goods Receiving Note (GRN) Sample ....................................................................... 39
Figure 13: Inventory stock report ................................................................................................. 40
Figure 14: Stock Summary of Fabrics (Warehouse Report) ......................................................... 46
Figure 15: Response Rate of respondents ..................................................................................... 50
Figure 16: Education level of Respondent .................................................................................... 51
Figure 17: Years with the Organization ........................................................................................ 52
Figure 18: Supply chain positioning of the respondents ............................................................... 53
Figure 19: Current Challenges of Apparel Industry Supply Chain............................................... 55

List of Tables
Table 1: Finished Goods Distribution Methods ............................................................................ 48
Table 2: Education level of Respondent ....................................................................................... 51
Table 3: Supply chain positioning of the respondents .................................................................. 53
Table 4: Current Challenges in Apparel Supply Chain ................................................................ 54

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 Chapter 01
Introduction

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1.1 Background of the Study:

Supply chain is a distribution network which maintains material, money and information flow at
different stages of product chain. The values of supply chain have changed over the decades
from leanness to agility to resilience (Christopher, 2000; Mason-Jones et al., 2000; Chtistopher
and Peck, 2004; Agarwal et al., 2007; Christopher and Towill, 2013). The major part of a
business is Supply chain right now and it is important to company success and customer
satisfaction. Supply chain practices support financial position of a business, increase customer
satisfaction and diminish operating costs (Majumdar & Sinha, 2019).
Supply chain integrates all necessary inputs like raw material sourcing, handling of material,
warehousing, transportation, production, customer satisfaction etc. which makes supply chain
management a valuable part to the readymade garments (RMG) in Bangladesh (Hossain, 2019).
RMG is the largest economic sector in Bangladesh and it has been contributing more than 84%
of country’s total export as well as employing more than 4.5 million people (Karim et al., 2021).
Global textile and apparel industry becoming more competitive in market without effective
supply chain practices it is impossible to survive in future. Bangladesh has an emerging
probability to lead next apparel industry in the world so it is the time to introduce sustainable and
effective supply chain in this sector. There have some difficulties to practice technology-based
supply chain but need to be fixed this problem as early as possible for increasing business in
apparel industry. Labor is the key factor in apparel industry so there should be a standard salary
package for them (Alam et al., 2016). Bangladesh remains the second largest apparel exporter in
the world after China, according to the world trade organization. To become successful in
apparel industry the key factor is supply chain management (SCM) (Hossain, 2019). SCM
focuses on managing organization resources, transporting goods from one place to another place,
supporting logistics and resources of manufacturing and decreasing cost (Prakash et al., 2021).
Manufacturing factor and production factor are also related to SCM practices which controls by
managing resources at every stage of product life (Debnath, 2017).
There are few challenges to meet the demand of global customer, SCM helps to find those
problems and challenges as well as try to add value in product line (Debnath, 2017). The apparel
industry is a large industry manufacturing lots of garments every day. One of the hardest
challenges encountered by this industry is increasing the cost of garments making on the other

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hand price of raw material also increasing (Debnath, 2017). Manufacturers produce garments for
local and international market but industrial scale manufacturing is for international market. We
know the international market is extremely competitive because China, Bangladesh, Vietnam,
India all are aggressive for proposing a better price to the garments buyers to grip the
international market share high (Prakash et al., 2021). To compete in the market first of all, we
must to diminish our direct and indirect cost associated with apparel industry. And the right
explanation is to practice effective supply chain management by which minimize sourcing cost is
possible (Bruce et al., 2004). That is the purpose why supply chain management is significant for
the apparel industry. To develop supply chain apparel manager should be careful enough and
need to have an exact planning which meets modern supply chain needs. Upcoming situation is
greatly competitive for apparel business. Those who manage Supply Chain (SC) appropriately
will get a reasonable advantage over its competitors (Prakash et al., 2021).

1.2 Objectives of the Study:

 To explore conceptual framework of supply chain management
 To explore supply chain procedure of pacific jeans Ltd.
 To identify the current challenges of apparel industry in the context of Pacific Jeans Ltd.

1.3 Methodology of the study:

The study focuses on identifying actual supply chain practices in RMG sector and challenges of
present supply chain in apparel industry. The study had been undertaken on the basis of
qualitative approach based on detailed case study of Pacific Jeans.

1.3.1 Primary Sources of Information:

 Semi structured interview of manager, executive and supplier

 Practical desk work
 Direct observation

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1.3.2 Secondary Sources:

 Company’s own software

 Company website
 Research reports
 Internship reports
 Text Books

Discussion had been conducted with senior manager supply chain department, manager material
control department, manger procurement and store department as well as manager of accounts
department of pacific jeans. As an employee of pacific jeans, I have collected all the data from
the respective department and used my practical observation.

1.4 Scope of the Study:

This study report is about the exploration of supply chain procedure of Pacific Jeans. Overall
supply chain system of Pacific Jeans is a complex process. This report has focused to identify the
structure and the practice of supply chain management through whole company. Also, the
purpose of the study is to identify the current challenges of apparel industry by conducting a
questionnaire survey at Pacific Jeans and analyze the impact of challenges by percentage method
as well as proposed some recommendation to overcome those challenges.

1.5 Limitation of the Study:

While doing this project I had to face some limitations. These are as follows-

 All the Information is not easily accessible or not permitted to disclose according to the
company policy, rules and regulations on the disclosure of confidential information.
 This study has kept limited on analysis. There is no formal test on any hypothesis base as
it is a Supply chain management theme.

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 Time is the key constraints of this report.
 The website of this company does not provide a decent amount of information.
 The internship proposal is conducted based on several secondary data which were rather
inefficient or unreliable.
 In collecting primary data, it is really hard to get correct information from people as they
might not feel comfortable or provide their false feeling.
 Since the research is limited in time and resources, it was impossible to perform in-depth
research into all the aspects for all supply chain activities of all the consumer goods
business companies of Bangladesh. Rather, I had to be contended with focusing on the
supply chain activities of the Pacific Jeans.
 Due to Pandemic situation, it was impossible to perform an in-depth research and collect
sufficient information of supply chain activities of Pacific Jeans

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 Chapter 02
Literature Review & Conceptual Framework

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2.1 Literature Review:

The word 'supply chain management' began developing in the 1980s (Harland, 1996). Within a
short time, this has developed as a phenomenon of special interest due to its use in a widespread
range of domains. Different studies have discovered the ideas of SCM and its importance in
different fields. Supply chain management is a specific number of tasks that ensure the
movement of information, finance, and goods from suppliers to customer (Seuring & Müller,
2008). Lambert et al. (1998) definition refers to SCM as interconnected essential business
actions from suppliers to the customer, which add value to products, services, and information
for the customer and stakeholders. To satisfy Customer and manage logistics effectively the
major drive is value creation among stakeholders and enterprise. Building relationships among
vital stakeholders and enterprise roles is supply chain management (Walters & Lancaster, 2000).
After analyzing research report and study report, it has been found that supply chain
management in Bangladesh apparel industry very entry mode. If this time apparel industry can’t
establish effective supply chain in near future readymade garments (RMG) sector will suffer in
(Hasan, 2017). In 2006, a study has been given that Bangladesh is totally unaware of supply
chain process of apparel industry (Lam and Postle, 2006). In apparel industry there have three
difficult situations: Time-to-Market; Time–to–Serve; Time–to-React. After analyzing of RMG
sector of Bangladesh a researcher has provided data on supply chain of raw materials, inventory
of finished goods, logistics support, operation process and order details as well as made a
conclusion that Bangladesh apparel industry needs actual supply chain system to reduce lead
time of customer and provide efficient product flow for customer satisfaction (Islam,2013).
Manufacturing focused industrialization is labor incentive, in this sense Bangladesh is lucky
enough where labor cost is low, so apparel industry of Bangladesh need to establish supply chain
activities effectively and add value for satisfying foreign customer (Hossain, 2019). Supply chain
management is very essential system for apparel industry which interconnected all value-added
activities in a line and establish a smooth flow up to the end user of product (Prakash et al.,
2021). Lots of study have been indicated that Bangladesh needs to apply proper methodology
and effective flow of supply chain which will drive Bangladesh apparel industry to first phase
manufacturing country in the world (Alam et al., 2016).

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2.1.1 Apparel Industry in Bangladesh:

The apparel industry has played a significant role in Bangladesh’s economy for a long time.
Currently, the apparel industry in Bangladesh covers 45 percent of all manufacturing
employment and contributes to the national income in about 5%. Women employment has been
empowered by this industry almost 5 million people get employed. According to 2018 economic
news 82.3% of the country’s export earnings come from textiles and apparel. More than 5-
billion-dollar exports have been done by Bangladesh to the United States, European Union (EU),
Canada and other countries of the world every year. Bangladesh is the sixth largest apparel
supplier to the United States and EU countries. Globalization has hit the populations of the third
world hard. Unemployment has risen as established industries have been destroyed and poverty
has deepened. Yet the organizations that clear the way for Foreign Direct Investment do have
something to be proud of in Bangladesh-the rapid expansion of the garments industry, which
now employs millions of people. However, for these workers the joy of having a job is marred
by the harsh conditions they endure in the workplace.
Bangladesh began creating Export Processing Zones (EPZs) in 1978 to attract foreign capital and
earn export dollars. In 1993 the Bangladesh Export Processing Zone Authority (BEPZA) was set
up and a ban on trade union activity imposed. This is obviously the most attractive feature for
investors, on top of tax breaks and other incentives on offer. The EPZs now employ more than
million workers, mostly in the garment and shoe-making industries. National labor laws do not
apply in the EPZs, leaving BEPZA in full control over work conditions, wages and benefits.
However, BEPZA ignores not only national standards but its own. The guaranteed minimum
monthly wages of $US 91, $US 85 and $US 70 for skilled, unskilled and probationary workers
respectively is a laughable fiction. As is the entitlement of permanent workers to annual festival
bonuses, medical coverage, and accommodation and transportation allowance. The body has
consistently refused to give out letters confirming employment and does not hire any workers on
a permanent basis. In reality, earnings average about $40 per month- less than half the official
rate-and workers do forced overtime under threat of dismissal. The withholding of pay for
months at a time-a practice common throughout the private sector-is also the norm. Garments
Industries in Bangladesh are a very prospecting industries in Bangladesh. The total demand of
our garments can be fulfilled by the domestic made garments and so also this sector is doing very

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well in the sense of exporting. The major portions of our exports come from the Garments
industry. Even though the major portion of the government revenue comes from this sector but
only few people are thinking about the present situation of the workers of this sector.

2.1.2 Supply Chain of Apparel Industry:

The term “supply chain management" has become a popular phenomenon, possibly first used by
consultants in the late 1980s & then analyzed by the academic community in the 1990s. if one
wants a simple definition, supply chain management links all the supply interacting
organizations in an integrated two-way communication system to manage high quality inventory
in the most effective & efficient manner. The supply chain management reflects those actions &
values responsible for the continuous improvement of the design, development & management
processes of an organization's supply system, with the objective of improving its profitability &
ensuring its survival, as well as the profitability & survival of its customers & suppliers.
Warehouses, retailers, and even customer themselves, each stage in a supply chain is connected
through the flow of products, information and fund. These flows often occur in both directions
and may be managed by one of the stages or an intermediary. Here we can see raw materials
supplier supply industrial product to the manufacturer, and make the product sale to distributor,
distributor sale this product to the retailer by small lot, and final consumer get the product from
the retailer.

Figure 1: Supply chain stages

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2.2 Conceptual Framework of Supply Chain Management (SCM):

2.2.1 Definition of Supply Chain:

“A supply chain is a network of supplier, manufacturing, assembly, distribution and logistics

facilities that perform the functions of procurement of materials, transformation of these material
into intermediate and finished products, and the distribution of these products to customers.”
According to Professor Douglas M Lambert. “Supply Chain Management as the integration of
business process from the end user through original supplier who provide products, services and
information that adds value for the customers.”
According to Ganeshan & Harrison. “A supply chain is a network of facilities and distribution
options that perform the function of procurement of material transformation of these materials
into intermediate and finished products, and the distribution of these finished products to
customers.

2.2.2 Essential features of SCM:

Integrated behavior:
SCM incorporates integrates integration of stakeholders from supplier to customers.
Mutually sharing information:
For effective SCM mutually sharing information among channel members is required, especially
for planning and monitoring processes.
Mutually sharing channel risk and Rewards:
Effective SCM also requires mutually sharing channel risks and rewards that yield a competitive
advantage. Risk and reward sharing should happen over the long-term focus and cooperation
among the supply chain members.
Co-operation:
Co-operation among channel members is required for effective SCM. Co-operation refers to
similar or complimentary coordinated activities performed by firm in a business relationship to
produce superior mutual outcomes or singular outcomes that are mutually expected over time.

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Focus on serving customers
Supply chain succeeds if all the members of supply chain have the same goal and the same focus
serving customers. Establishing the same goal and same focus among Supply chain members is a
form of policy integration.
Integration of Processes:
The implementation of SCM needs the integration of processes from sourcing to manufacturing
and to distribution across the supply chain. The integration can be accomplished through cross
functional terms, in plant supplier personnel and third-party service provide.
Partners to Build and Maintain Long Term Relationship:
Successful relationships aim to integrate channel policy to avoid redundancy and overlap while
seeking a level of co- operation that allow participants to be more effective at lower cost levels.
Policy integration is possible if there are compatible cultures and management techniques among
the chain members.

2.2.3 Objectives of Supply Chain Management

Service Orientation:
The very basis of supply chains has been to provide superior customer service. Service is all
about the value that the customer gets, which in turn depends upon his own perception about
what constitutes value. The design, the alignment, the integration of the companies on the supply
chain and the co-ordination between them are all for the customer- the ultimate customer, and
these are performed as such.
System Orientation:
System orientation is at the existence of any supply chain. Synergy due to co- operation and
coordination is the main gain of a supply chain. This entails that while getting optimal results for
the chain as a whole, results for the partners on the chain may not necessarily be optimal, these
could be less than optimal.

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Competitiveness and Efficiency:
Supply chain is a business organization. It provides value to the customers while being
competitive. Competitiveness is essential for it to healthy sustain itself in order to be able to
provide increasing value to its customer. Efficiency is an important element of competitiveness.
Minimizing the time:
Efficient supply chain is an organization reduces the time required for converting orders into
cash. So, there is minimal time lag and increase in productivity of the organization.
Minimizing Work in Progress:
Supply chain minimizes total work in process in supply chain.
Improving Pipeline Visibility:
Efficient supply chain improves the visibility of each one of the activities of the supply chain by
each one of the partners.
Improving visibility Demand:
Efficient supply chain improves visibility of demand by each one of the partners.
Improving Quality:
Efficient supply chain management helps in improving the quality of operation of the
organization. TQM has become a major commitment throughout all facet of industry. Overall
commitment to TQM is one of the major commitments throughout all facets of industry.
Reduces Transportation Cost.
Reduces Warehousing Cost.

2.2.4 Components of Supply Chain Management:

 Procurement
 Purchasing and sourcing
 Inventory Management
 Distribution

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Procurement:
Procurement is one of the key functional areas in an organization. It is a major cost center
through which all materials are been channeled into the company. It is the organizational center
that handles the buying of all materials, exchange of materials with financial resources for
further processing. This process generates additional revenue to the company without
compromising the values and integrity of the company before its customers. Procurement
process has several definitions which are based on the act of buying goods and services and its
preparation and processing based on demand. Turner (2011) described procurement as a system
or process that supports organization's total needs for the supply of goods, services and processes
that is required to achieve the goals and task established by the organization.
Procurement is also defined as the process of getting the goods and services a company needs to
fulfill its model through various tasks such as quality standards development, financing, price
negotiation, purchasing, value analysis, supplier research and selection, inventory control and
disposal of waste products like material packages.
Also, procurement is the act of finding, acquiring and buying of the appropriate goods, services
or work from external source at the best possible cost to meet the need of the acquirer in terms of
quality and quantity, time and location (Weele 2010). Chartered institute of procurement and
Supply (2013) also described procurement as the business management function that ensures
identification, sourcing access and management of the external resources that an organization
needs to fulfill its strategic objectives.
Procurement is a natural process in which one production step is taking before the other in such a
way that each stages requirement needs to be fulfilled in order to achieve the desired result. It's a
process that explores supply market opportunities and implements resourcing strategies to give
optimum supply outcome to the company, its stakeholders and customers simultaneously.
However, procurement efficiency is determined by its value and on the success of the
organization.

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Figure 2: Steps in the Procurement Process

Purchasing and sourcing:

The Purchasing function is concerned with acquiring goods and services for use by the
organization. These will include, for example, raw materials and components for manufacturing
and also production equipment. The responsibilities of this function usually extend to buying
goods and services for the entire organization.
Sourcing is the process of vetting, selecting, and managing suppliers who can provide the inputs
an organization needs for day-to-day running. Sourcing is tasked with carrying out research,
creating and executing strategy, defining quality and quantity metrics, and choosing suppliers
that meet these criteria.

Factors will be considered in purchasing and sourcing are given below:

Quantity. Buying in large quantities can attract price discounts and prevent inventory running
out. On the other hand, there are substantial costs involved in carrying a high level of inventory.

Quality. There will usually be a trade-off between price and quality in acquiring goods and
services. Consequently, Production, R&D and Marketing Functions will need to be consulted to

22
determine an acceptable level of quality which will depend on how important quality is as an
attribute of the final product or service of the organization.

Price. Other things being equal, the purchasing manager will look for the best price deal when
procuring goods and services, although price must be considered in conjunction with quality and
supplier reliability, in order to achieve best value, rather than lowest price only.

Delivery. The time between placing an order and receiving the goods or services, the lead time,
can be critical for production planning and scheduling and also has implications for inventory
control. Suppliers must therefore be evaluated in terms of their reliability and capability for on
time delivery.

Inventory Management:
Inventory management is a systematic approach to sourcing, storing, and selling inventory—both
raw materials (components) and finished goods (products). In business terms, inventory
management means the right stock, at the right levels, in the right place, at the right time, and at
the right cost as well as price.

Distribution:
Distribution in layman's language means the entire process which oversees movement of goods
from supplier or manufacturer to point of sale. The process includes numerous activities and
processes such as packaging, inventory management, warehousing, supply chain, and logistics.
The process of distribution management is an important aspect of business cycle for distributors
or wholesalers. The profit percentage of the business depends on turn-around time for the goods.
The ore goods the sell, higher are the earnings with increased profits leading to better future of
the business. Having a successful distribution management system is also important for
businesses to remain competitive and to keep customers happy.
Distribution management is very critical for a company or organization successfully attract
customers and operate profitably. Executing a distribution strategy successfully requires
effective management of the entire distribution process. Bigger the organization, or higher the

23
number of supplies points a company has, the more it will need to rely on automation to
effectively manage the distribution process.
Modern distribution strategy in supply chain management more than moving products one point
to another. It also incorporates sharing of required information which is needed to identify key
opportunities for growth and competitiveness in the market. Most progressive companies now
use their distribution strategies to obtain market intelligence which is vital in assessing their
competitive position. A distribution management system also makes things easier for the
consumer. It allows them to visit one location/website for a variety of different products. If the
system didn't exist, consumers would have to visit multiple locations just to get what they need.

2.2.5 Common Terms and Documents Using in Supply Chain:

Purchase order:
A purchase order (PO) is a commercial document and first official offer issued by a buyer to a
seller indicating types, quantities, and agreed prices for products or services. It is used to control
the purchasing of products and services from external suppliers.

Comparative Statement:
A comparative statement is a document used to compare a particular financial statement with
prior period statements. Previous financials are presented alongside the latest figures in side-by
side column, enabling investors to identify trends, track a company’s progress and compare it
with industry rivals.

Audit:
Audit is the examination or inspection of various books of accounts by an auditor followed by
physical checking of inventory to make sure that all departments are following documented
system of recording transactions. It is done to ascertain the accuracy of financial statements
provided by the organization. An audit is an analysis or study of an accounting system that
summarizes its finding with an opinion on the accuracy of the system and its reports. In other
words, an audit is an examination of the processes and procedures put in place by management to

24
ensure that accounting information is recorded accurately and the financial statements are free
from material misstatements.

Supplier Selection:
Supplier selection is the process of selecting a supplier to acquire the necessary materials to
support the outputs of organizations. Selection of the best and/or the most suitable suppliers is
based on assessing supplier capabilities.

There are many documents involved in international trade, such as commercial documents,
financial documents, transport documents, insurance documents and other international trade
related documents.

Quotation:
An offer to sell goods and should state clearly the price, details of quality, quantity, trade terms,
delivery terms and payment terms.

Pro Forma Invoice:

An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of
the kinds and quantities of goods to be sent, their value, and importation specifications (weight,
size and similar characteristics). This is not issued for demanding payment but may be used
when applying for an import license / permit or arranging foreign currency or other funding
purposes.

Packing List:

A list with detailed packing information of the goods shipped. A list providing information
needed for transportation purpose, such as details of invoice, buyer, consignee, country of origin,
vessel / flight date, port / airport of loading, port / airport of discharge, place of delivery,
shipping marks / container number, weight / volume of merchandise and the fullest details of the
goods, including packing information.

25
Bill of Lading (B/L):

Evidence of contract between the shipper of the goods and the carrier. The customer usually
needs the original as proof of ownership to take possession of the goods. There are two types: a
STRAIGHT bill of lading is non-negotiable and a negotiable or shipper's ORDER bill of lading
(also a title document) which can be bought, sold or traded while goods are in transit and is used
for many types of financing transactions.

Letter of Credit (LC):

A Letter of Credit (LC) is a document that guarantees the buyer’s payment to the sellers. It is
issued by a bank and ensures timely and full payment to the seller. If the buyer is unable to make
such a payment, the bank covers the full or the remaining amount on behalf of the buyer. A letter
of credit is issued against a pledge of securities or cash. Banks typically collect a fee, i.e., a
percentage of the size/amount of the letter of credit.

2.2.6 Global Challenges of Supply Chain Management in Apparel Industry:

 Consumer Demand.
 Globalization.
 Competition.
 Information and communication.
 Government Regulation.
 Environment.
 Unrealistic assumptions that supply chain management technologies will fix
everything
 Inattention to potential risks
 Lack of understanding of the full capabilities of suppliers and service partners

26
 Chapter 03
Supply Chain Management Procedure of Pacific Jeans

27
3.1 Procurement and Purchasing Process of Pacific Jeans:

The official name of Supply chain department of pacific jeans is ‘‘Supply Chain & Coordination
Department’’. It is the most dynamic and busiest department in the company. Primarily this
department does the sourcing and procurement of all goods that are directly and indirectly related
to production.

3.1.1 Authority Structure:

Fig: SCM Department Hierarchy

AGM
TOP MANAGER

MANAGER
MIDDLE MANAGER

ASSISTANT MANAGER
MIDDLE MANAGER

Sr. EXECUTIVE
FIRST LINE MANAGER

EXECUTIVE
FIRST LINE MANAGER

Jr. EXECUTIVE
FIRST LINE MANAGER

PURCHASE ASSISTANT
EXECUTIVE ASSISTANT

Supply Chain & Co-ordination Department of Pacific Jeans consists of 45 enthusiastic and
effective personnel. Below figure shows the hierarchy structure of the department. Assistant
General Manager (AGM) is the head of Supply Chain &Co-ordination Department. The AGM
has the responsibility for planning and implementing new supply chain strategies and practices

28
so that supply chain procedure can run effectively and efficiently and at the same time firm can
gain competitive advantages and reduce company's cost. Any document has been prepared by
executives’ needs approval from the AGM. Managers act as the team leader and supervise the
executives. They play the role of middle manager. They do plan with top management and pass
their instruction to first line manager. Any document prepared by executives, must be checked
and approved by the manager and then it is submitted to the AGM. Executives are the heart of
supply chain & co-ordination department. They fulfill most of the routine procurement task
procurement tasks such as; sourcing supplier, making comparative statement, placing order,
arranging payment, meeting with supplier and user, maintaining communications and so on.
Purchase assistants collect ordered goods from supplier and deliver it to the particular
warehouse.

3.1.2 Supply Chain Model of Pacific Jeans:

In pacific jeans, supply chain system starts from sourcing supplier and whole chain maintain an
interconnected relationship with next step.

Figure 3: Basic Supply Chain of Pacific Jeans

3.1.3 Responsibilities of Supply Chain Department:

1. Monitoring& leading team-a for the purpose of procurement.

2. Allocate indent within the team
3. Procured following items:
 Accessories: Clear button, plastic button etc.

29
  Ball bearing: Roller bearing, ball bearing etc.
 Belt: V-belt, timing belt etc.
 Chemical: Machine oil, clear, Unleaded etc.
 Cotton system: Rope plastic etc.
 Corsairs: Electric kettle, tea cup etc.
 Fabrics: Different kind of Fabrics item based on grade & color.
 Zipper: Based on grade.
 Electric: PVC cable, electric mixer, LED office light.
 Fire strategy: Horn, foamed.
 Furniture item: Window, chair etc.
 Hardware items: Air condition, paints, plastic bag etc.
 Photocopy items: Drum, developer etc.
 Sewing parts: Clear lopper, pressure float.
 Stationary items: Eraser, pen, plastic file, pen pod etc.
4. Check goods procure from right source
5. Check price as per quotation & prepare Comparative Statement (CS) accordingly
6. Rate review & complete market analysis in regular interval
7. Visit market as per requirement
8. Issue formal work order where necessary
9. Follow-up about shipment or delivery
10. Submit bill for supplier's payment & adjustment
11. Collect payment clearance from suppliers
12. Keep & maintain various record for reporting purpose
13. Conduct training within the team

3.1.4 Interlinked Department to Supply Chain Management:

Three departments are highly related and depended to supply chain management at pacific jeans

1.Material Control Department (MCD): Warehouse is an integral part of supply chain

practice. Though here in pacific jeans warehousing activities aren’t done by supply chain & Co-

30
ordination Department, it keeps a sound communication with Material Control Department
(which does the warehousing) to make supply chain process effectual.
 MCD creates Goods Receiving Note (GRN) after warehousing the products and send it to
supply chain department with proper authorization.
 If there is any mismatch found in between purchase order receipt and Challan/Bill
receipt, MCD immediately inform SCM department or return the goods to the vendor.

2. Store Department: Proper store management in apparel industry can reduce wastage of
materials and lead time. The main responsibility of this department is to store all the raw material
necessary to produce garments.in pacific jeans store department totally interlinked with material
control department its actually work under MCD.

3. Audit Department: Audit department plays the most important role in supply chain
procedure in Pacific Jeans though there is still an argument if the Audit department should exist
or not in the middle of this supply chain process. It fulfills following duties:
 Audit monitors inventory: When a requisition for an item is raised, Audit tries to
manage the items from another warehouse.
 Audit approves Purchase Requisition (PR): If the PR items doesn’t exist in any
warehouse, it approves the Purchase Requisition (PR) and sends it to the store and sends
it to the SCM department.
 Comparative Statement (CS) is audited by Audit: When a comparative statement is
approved from supply chain department, it is sent to audit department for final
authorization.

4. Accounts Department: After posting bill to the accounts department by supply chain
executives, suppliers collect their payment from their accounts. This department is very
important for supply management because any delay in the payment process, may annoyed the
suppliers and thus he may stop doing business with the firm or stop offering credit sales.

31
3.1.5 Procurement and Purchasing Process of Local Goods at Pacific Jeans:

32
Generally Pacific Jeans follows two procurement process.
1. Common or general procurement and purchasing which domestic based.
2. Special procurement and purchasing which import (Special) based.
Documents, which is needed for circulate the procurement process are, -
1) Purchase Requisition (PR)
2) Suppliers Quotation
3) Comparative Statement
4) Purchase Order (PO)
5) Letter of Credit
6) Bill of Lading
7) Packing List
8) Goods Receiving Note
9) Invoice
10) Bill from Supplier
11) Bill Prepared by SCM Department

General (Domestic) Procurement Process of "Pacific Jeans Ltd," a short description given

1. PR raise from Users Department:

Purchase Requisition (PR) Document generated by a user department or storeroom- personnel to
notify the purchasing department of items it needs to order, their quantity, and the timeframe. It
may also contain the authorization to proceed with the purchase. Written order or a formal
demand by the user of a good or service, which is not made available without a specific request
to the organization's purchase or stores department. It generally includes the brand and model
name or number, description, quantity, and the required delivery date also called purchase
requisition. When raw material is insufficient or not available for production process, the user
departments rise a PR on FUSION (ORACLE based software). On their Enterprise Resource
Planning (ERP) software it is automatically send a notification to Store Department. The
activities which are done before raising PR -
 Justification from user
 Detailed specification
 Required quantity

33
  Check with stock
 Timeline
 Verification by Head of Department (HOD)

Figure 4: Log in Page of ERP ORACLE Application

Figure 5: Data Input of Material Stock by ERP

34
2. PR checking on Store Department:
When Store Department gets information by ERP software, they check the raw material stock. If
required raw material is available on stock, PR will be cancelled and goods will be provided to
the users’ department. On the other hand, if the raw material is not available. They forward the
PR by using oracle software as well as Move Order Transfer (MOT) note hard copy to Material
Control Department.

Figure 6: Purchase Requisition Submission and Checking

Figure 7: Move Order Transfer Note (Hard Copy)

35
3. MCD Department Check and Make Final PR:
MCD department check PR and Move Order Transfer note as well as make final PR which they
forward to Audit Department.

Figure 8: Final Purchase Requisition (PR) from MCD

4. PR checking on Audit Department:

After getting the PR from MCD Department, they check the appropriateness. If the PR is not
significant, it will be cancelled. If the PR is implication, then send it to SCM Department.

5. SCM Department request for quotation:

After getting PR from Audit Department, they request for quotation from potential supplier. If
the supplier is new, they request to send a sample. After getting the sample, send it to User
Department for checking the sample. If it approved by User Department, then request for
quotation. After getting the quotations from various supplier (minimum 3 supplier), they
prepared Comparative Statement (CS). In the CS document, they include all the information
about the product & price. Then, send back it to Audit Department. To prepare comparative
statement (CS) based on offers & take approval from Audit Department. There are several steps
involved:

36
  Rate verification by team leader
 Mode of payment
 Warranty clause
 Prepare CS & keep record accordingly
 Check CS validity
 Maintain lead time
 Transportation Cost

Figure 9: Comparative Statement (CS) Prepared by Supply Chain Department

6. CS Approval by Audit Department:

When Audit Department got the CS from SCM Department, they check everything about the
product and price. It they satisfy with the CS and then they approve the CS. Then send it to SCM
Department.

7. SCM Department Placing PO:

After got the approval from Audit Department, they place the Purchase Order (PO)to the selected
Supplier. The activities SCM department done in this sage are-
 Place purchase order and keep record.

37
  Check goods delivered as per specification.
 Collect delivery challan for bill processing.
 Return sample& maintain record accordingly.
 Maintain warranty record.

Figure 10: Making Purchase Order

Figure 11: Final Purchase Order

38
8. Product Received by Material Control Dep.:

When the selected Supplier got the PO, they deliver the require product to Material Control
Department. After receive the require product Quality Control Department (QC)check the
promising quality. If the quality is good, they certify it. As a certificate MCD department
provides Goods Receiving Note (GRN).

Figure 12: Goods Receiving Note (GRN) Sample

9. Bills Clearance:
After getting the quality certificates. Accounting Department arranges all the related documents
including the bill and send it to the Audit Department.

10. Bills Approved:

On this stage Audit Department check all the documents and clearance certificate. If all the
documents are perfect, then they send it to Accounts Department with approval.

11. Bills Payment:

After getting the approval from Audit Department, Accounts Department pay the bill of the
Suppliers. Most of the time, they pay on Check.

39
Before paying, Accounts Department should be considered some factor some factors are given
below:
 Check bill amount comply with the challan &QC quantity
 Before submission of bill check it is dully approved
 Necessary documents attached as per audit checklist
 Put note in case of any irregularities
 Check payment duly reimburse to suppliers
 Should be checked either it is paid in advance or not

3.1.6 Procurement and Purchasing Process of Import Goods at Pacific Jeans:

1. PR raise from Users Department:

Purchase requisitions arise from users’ department. When raw material is insufficient or not
available for production process, the user departments raise a PR on FUSION (ORACLE based
software). On their ERP software it is automatically send a notification to Store Department.

2. PR checking on Store Department:

When Store Department gets information by ERP software, they check the raw stock. If the
required raw material is available on stock, PR will be cancelled and goods will be provided to
the users’ department. On the other hand, if the raw material is not available. They forward the
PR to Audit Department.

Figure 13: Inventory stock report

40
Procurement and Purchasing Process of Import Goods at Pacific Jeans:

41
3. PR Checking in Audit Department:
After getting the PR from Store Department, they check the appropriateness. If the PR is not
significant, it will be cancelled. If the PR is implacable, then send it to SCM Department.

4. SCM Department request for quotation:

After getting PR from Audit Department, they request for quotation from potential supplier. If
the supplier is new, they request to send a sample. After getting the sample, send it to User
Department for checking the sample. If it approved by User Department, then request for
quotation. After getting the quotations from various suppler, they prepared Comparative
Statement (CS). In the CS shit, they include all the information about the product& price. Then,
send back it to Audit Department.

5. CS Approval by Audit Department:

When Audit Department got the CS from SCM Department, they check everything about the
product and price. if they satisfy with the CS and then they approve the CS. Then send it to SCM
Department.

6. Request for Pro-forma Invoice:

After got the CS Approval from Audit Department, SCM Department request for Pro-forma
Invoice (PI) from the Trader. When Trader send the PI, it submitted to Audit Department for
approving. After approve the PI, send it to Commercial Department.

7. PI send to Commercial Dep.:

When Commercial Department got the PI, they open a Letter of Credit (LC) against the PI.
When the Bank provides the documents of LC, Commercial Department confirm it to the SCM
Department.

8. Placing Order by SCM Department:

When SCM Department got LC and other papers, they send it to the Foreign Trader by Email.
The Potential Supplier confirms the order by replay with Shipping Documents.

42
9. Product Received by Material Control Dep.:
When SCM Department got the Shipping Documents, they send it to the Commercial
Department. Commercial Department help to deliver the require product to Material Control
Department. After receive the require product Quality Control Department check the promising
quality. If the quality is good, they certify it. Then MCD issues Goods Receiving Note (GRN).

10. Bills Clearance:

After getting the quality certificate, SCM Department arranges all the related documents
including the bill and send it to the Audit Department.

11. Bills Approved:

On this stage Audit Department check all the documents and clearance certificate. If all the
documents are perfect, then they send it to Accounts Department with approval.

12. Bills Payment:

After getting the approval from Audit Department, Accounts Department pay the bill to the
Suppliers. Most of the time, payment has made by Online-Banking.

3.2 Sourcing Process of Pacific Jeans:

Outsourcing:
Pacific Jeans outsources its raw materials and components from both local and foreign source.
For export purpose the company outsources transportation facility (Air and Ocean). Pacific Jeans
also uses third party for Export Forwarding and sample forwarding.

Supplier Selection:
Quality is the first consideration for supplier section, Pacific Jeans selects its supplier by two
ways-
a) Direct Negotiations
b) Using Third Party

43
a) Direct Negotiations
Pacific Jeans selects local and foreign supplier based on the following characteristics:
 Lead time
 Reliability
 Quality
 Design capability
 Total cost of doing business with supplier.

b) Using Third Party

Pacific Jeans uses third party in supplier selection because they have specialization and learning,
and likely to be sustainable over the longer term. The third parties have strong relationship with
the suppliers and from this relationship the company also get benefits. Pacific Jeans negotiates
the price with its suppliers. The top management and sometimes third party have done this. It
maintains collaboration negotiation (joint problem solving, searching for creative win- win
solutions to maximize joint outcome). It maintains this because of the following reasons:

 Long term relationship.

 Trust/openness, active listening.
 Parties share information honestly and treat each other with understanding as well as
respect
Competitive advantage in contemporary market flux does not depend solely on firm’s
competency in providing competitive ranges of offerings, conversely, it draws on firm’s skill to
establish superior purchasing strategies in complex inter-organizational settings of numerous
suppliers. Firms are no longer able to develop major product or service innovations alone
because of the dispersion of knowledge and technological resources driven by organizational
competencies, leading to the externalization of the activities to partners. Pacific Jeans maintains
both single and multiple sourcing strategies. It looks for single sourcing strategies when it has
only one supplier for each product and service. It seeks big scale advantages through lower cost
products in a dynamic relationship. Multiple sourcing strategies are adopted when the buyer
systematically utilizes several suppliers for each product and service. Pacific considers quality
here. Those who maintain quality will be patronized by the company.

44
Pacific Jeans procures its raw materials from local and foreign sources. It imports fabrics, stone,
and zipper from China, Japan and Turkey. It imports directly from the manufacturers of raw
materials who ensure quality and its requirements. It also imports by using local third party. In
case of procurement of raw materials, it only focuses on the quality. It does not maintain
partnering, relationship buying or collaborative network with its suppliers. It maintains
transactional exchange here. It maintains the following strategies here:
 Single purchase.
 Focus on quality.
 One time purchasing event.
 Significant purchase.
 After sales experts.
 Maintaining services.

The company procures raw materials from those suppliers who ensure the quality product even if
the price is relatively higher than other suppliers, if any supplier could ensure quality over time it
purchases from that supplier several time. It maintains relationship strategy here. It maintains the
following:
 Long term orientation.
 Repetitive purchase.
 Dynamic partner.
 Diminishing price.
 Win-win situation.
 R&D project.
Otherwise, it purchases from different suppliers in different times by direct bargaining. It
maintains the following strategies here:
 Strategic procurement.
 Key partner network.
 Decreased no suppliers.
 Better knowing of chosen suppliers.
 Updated product versions.
 Mutual knowledge transfer.

45
3.3 Inventory Management System:
Inventory management is a working process where the raw materials is store for future use.
MCD and inventory management are interrelated with each other. Store Department are
responsible for all of the activities' materials are stored by packing system and they attached a
serial number of packets. After finishing to added serial number, management are record to
software and raw materials are keep into warehouse. There are several kinds of items in
warehouse like fabrics, chemical, machinery, zipper, accessories etc. They classifying those
items based on category. Since they prepare a stock summary and give a bin card report. Above
on bin card they attached the serial number of the items. Then it through to the stock requisition
inter unit: Gate pass. All kinds of materials are kept in here and divided those items as per
demand of the company group. Every company member of the pacific jeans Ltd follows the
same strategy of inventory and store management.

Figure 14: Stock Summary of Fabrics (Warehouse Report)

46
3.4 Distribution System of Pacific Jeans:
Pacific Jeans is an export import-oriented garments industry they have their foreign client to
deliver products on time. They have their own transport for delivery to port and inside
Bangladesh but not enough in number. Thus, in this case they go for a contact with third party
Logistics Company to deliver their product to the customer around the world. For outside
Bangladesh they go with buyer's vessel. Basically, they export their product outside Bangladesh
in broad ranges.

Delivery System-
I. Products will be delivered to customers in Bangladesh by covered van to ensure
prevention of damage during transportation.
II. Products will be delivered to port through containers and from port to customer through
covered van / containers to ensure prevention of damage during transportation in case of
oversea delivery.
By maintaining low transport costs through optimization of the transportation model, Pacific
Jeans Ltd. makes significant savings. This optimization is combined with inbound, internal and
outbound movements to deliver maximum value. This is achieved by collaborating with
suppliers and retailers, along with third party logistics providers.

Modes of Transportation:
 Ship Vessel
 Truck
 Flight
 Covered van
 Courier Service

Delivery within Bangladesh

Within 7 days after receipt of Irrevocable Letter of Credit or Foreign Currency Cheque along
with related import documents.

47
Delivery outside Bangladesh
Within 30 days after receipt of Irrevocable Letter of Credit (at sight) or advance TT payment
Telegraphic Transfer payment.

Responsibilities of Logistics Management:

 Planning and scheduling logistics of finished products

 Minimizing transportation cost
 Maintaining lead time

1 Pacific Jeans Limited (PJL) Van to Client

2 PJL Van to Courier to PJL Van to Client

3 PJL Van to Port to Foreign Client

4 PJL Van to Third Party to Client

Table 1: Finished Goods Distribution Methods

48
 Chapter 04
Analysis and Findings

49
4.1 The Current Challenges of Apparel industry in the context of
Pacific Jeans Ltd.:
The primary goal of the research reported in this paper was to identify current challenges of
supply chain management in Pacific Jeans. A questionnaire interview was adopted to explore
present challenges of apparel supply chain.

4.1.1 Response Rate of respondents:

A survey questionnaire was given to the 60 personnel of Pacific Jeans Ltd. Almost 75% of the
respondents were completely filled and this fulfilled the required threshold, since Cooper and
Schindler (2021) state that a study response of 65% and above is significant in facilitating the
analysis of a study.

Response Rate of respondents

Incomplete Response complete Response

80% 75%
70%
60%
50%
40%
30% 25%
20%
10%
0%
Incomplete Response complete Response

Figure 15: Response Rate of respondents

4.1.2 Demographic Information of Respondents:

Education Level:

The respondents were asked to indicate their level of education and according to table given
below, as per table education level of respondents are 40% had university degrees, while 30%

50
had master’s degrees, secondary education level 10%, primary education had 15% and
approximately 5% was illiterate.

Education level of Respondent Percentage

Bachelor 40%
Masters 30%
Secondary Education 10%
Primary Education 15%
No Education 5%
Table 2: Education level of Respondent

Education level of Respondent

45%
40%
40%
35%
30%
30%
percentage

25%
20%
15%
15%
10%
10%
5%
5%
0%
Bachelor Masters Secondary Education Primary Education No Education
Axis Title

Bachelor Masters Secondary Education Primary Education No Education

Figure 16: Education level of Respondent

The educational background of the study area is moderately strong, we see that above bar chat
gives a summery about collected data.

51
4.1.3 Years with the Organization:

The respondents were asked to indicate the number of years they had been with the organization
and according to Figure 4.3 all the respondents had been with the organization for a significant
number of years, since 51.4% had been with the organization for 1-5 years, while 48.6% had
been with the organization for 6-10 years. These results indicate that the respondents had been
with the organization long enough to make them appropriate for the study.

YEARS WITH THE ORGANIZATION

6-10 years 1-5 years

49% 51% 1-5 years
6-10 years

Figure 17: Years with the Organization

4.1.4 Supply chain positioning of the respondents:

In terms of their position in the supply chain, the distribution of the respondents is given in
below Table the proportion of the respondents professing to practice some form of supply chain
management was 90%. These respondents reported including the following components of the
supply chain in their SCM activities as given in Table. The highest proportion is involved with
Store and supply chain management activity. On the other hand, audit department completes
approximately 15% related work for approving supply chain activities. Other department like
accounts and commercial contributes respectively 10% and 5% supply chain related activities.
The largest group of the respondents involves in raw material supply chain and purchasing. Most

52
of our respondents are involved in supply chain activities immediately upstream or downstream
of their position in supply chain.

Supply chain positioning of the respondents Percentage

Material Control Department 20%
Store Department 25%
Audit Department 15%
Supply Chain Department 25%
Accounts Department 10%
Commercial Department 5%
Table 3: Supply chain positioning of the respondents

Supply chain positioning of the respondents

Commercial Department 5%

Accounts Department 10%

Material Control Department

Supply Chain Department 25%
Store Department
Audit Department
Supply Chain Department
Audit Department 15%
Accounts Department
Commercial Department

Store Department 25%

Material Control Department 20%

0% 5% 10% 15% 20% 25% 30%

Figure 18: Supply chain positioning of the respondents

53
4.1.5 Current Challenges of Apparel Industry Supply Chain:

The questionnaire survey had been identified some difficult challenges of apparel industry by
examining Pacific Jeans employee’s response. There are several distinctive issues in future
which will affect supply chain those issues come in front of us after analyzing responses of
respondents. Ten issues and challenges had been analyzed and identified as well as the study
made a list on these most important challenges which are given below:

 Required quality raw materials unavailability

 Lack of sophisticated information system for sharing data among supply chain members
 Lack of ability in managing inventories throughout the entire supply chain
 Firm's lack of leverage within the supply chain
 Lack of trust among supply chain member
 Geographical distance from firm's facilities
 Lack of interest among own suppliers or customers to participate in the supply chain
 Competition from other supply chains
 Customers’ geographical distance from own facilities
 Unskilled people and lack of supply chain knowledge

Current Challenges in Apparel Supply Chain Percentage

Required quality raw materials unavailability 33.33%
Lack of sophisticated information system for sharing data among supply chain members 66.67%
Lack of ability in managing inventories throughout the entire supply chain 41.67%
Firm's lack of leverage within the supply chain 33.33%
Lack of trust among supply chain member 46.67%

Geographical distance from firm's facilities 43.33%

Lack of interest among own suppliers or customers to participate in the supply chain 41.67%
Competition from other supply chains 43.33%
Customers’ geographical distance from own facilities 53.33%
Unskilled people and lack of supply chain knowledge 58.33%
Table 4: Current Challenges in Apparel Supply Chain

54
 Current Challenges in Apparel Supply Chain
70.00%
60.00%
50.00%
40.00%
66.67%
30.00% 53.33% 58.33%
41.67% 46.67% 43.33% 41.67% 43.33%
20.00% 33.33% 33.33%
10.00%
0.00%

Figure 19: Current Challenges of Apparel Industry Supply Chain

From above bar chart we can briefly describe that there have many challenges in establishing
supply chain management efficiently in apparel industry. The majority percentage of respondents
had given importance on sophisticated data transfer system because of their lacking in
communication gap. Approximately 66.67 % believe in improving sharing information is a great
challenge in apparel industry to make supply chain effective. On the other hand, respondents
were indicated on lacking of knowledge on supply chain management who working with supply
chain activities in around 58.33% people answered the same. Another challenge had come into
point “customer geographical distance which covers more than supply chain capable rang” after
analyzing survey questionnaire which established 53.33% response. Trust and believe on supply
chain members another great responded challenge came from survey which covered 46.67%
respondents’ answer. Same proportion roughly 43.33% answer had come from two important
challenges these were geographical distance from firm facilities as well as competition of current
market supply chain.41.67% indicated poor ability of managing inventory and less interest
among suppliers and customers to attend supply chain activities. Respondents had given least

55
importance on two challenges which listed only 20 people among 60 which approximately
33.33%, those challenges were raw material unavailability and firms’ poor leverage on supply
chain.

4.2 Discussion & Findings:

Research outcome shows ten challenges in apparel industry in respect of pacific jeans as well as
supply chain and procurement procedure of Pacific Peans. The study tried to delineate how each
of the tools, components and department related to supply chain activities of Pacific Jeans. On
the other hand, the study had identified 10 current challenges of apparel industry in the context
of survey questionnaire. This study proposed some corrective action to address each challenge,
exposed supply chain activities problem and recommended some action to tackle those problem.
The most important problem is lack of information technology which can result in a lack of
adoption of new technology and processes. The scarcity of information technology and experts in
this particular area hinders the adoption of new technology and operations. The textile and
apparel industry should adapt itself with relevant information technology and prepare experts to
smooth the latest technology transfer, installation, and adaptation to address this challenge.
In store department, there are some problems are created when consignment is reached Raw
materials handling system is too much poor. Sorting process is loosely monitored which
ultimately caused inefficient material distribution poor information of inventory stock to supply
chain department.
Lack of co-ordination among supply chain members can cause materials requisition from
production floor are pending due to delay of approval process. As a result, production could be
delayed, lead time could be much higher, shipment also delayed. Sometime production floor is
stopped due to supply of print/embroidery from subcontract factory. This problem claim goes to
supply chain department because of raw material unavailability.
Website of Pacific Jeans are not well organized, as a result buyers sometimes cannot find proper
information about factory. Supplier also can't find proper information about various department's
head due to backdated website. Internal IT section also not properly skilled, as a result IT related
problems are sometimes remained unsolved.

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Purchasing system sometimes not proper as the per-scheduled shipment demand. Cartons,
polybag, others materials need to in hand before 7 days of shipment, but improper
communication between purchase department & suppliers caused delayed of supply of materials
related finished goods. As a result, packing could be delayed & shipment also be delayed.
Geographical distance of customer and raw material supplier sometimes make huge challenge
because of lacking transportation facilities for factory. For carrying goods Pacific Jeans doesn't
have enough transportation system. They depend on third party logistics system for carrying
finished goods for shipment.
Miscommunication among own supplier or customers can cause supply chain failure like Sales
department is the main department for apparel factory. Basically, merchandisers are assigned in
the sales department. Their main role is to follow up production process & maintain
communication with buyers. All types of supplies are passing throw to floor by the approval of
merchandisers. Sometimes lack of interest in sharing information makes production failure, raw
material unavailability and supply chain inefficiency.
Insignificant firms leverage in supply chain gains breed the effects of lack of resources and
capability and lack of employee motivation. Predisposed concept of less economic turn out from
sustainability endeavor deters organization from acquiring new resource and uplift caliber. High
investment but less turn out, which is true partly initially, which makes apparel industry supply
chain a poor managing body. In the end, financial gains outnumbered the initial cost. The textile
and apparel sector should be well informed about the societal, environmental benefits, and
economic outcome, which may change the organization's perception and facilitate new resource
acquisition and capability enhancement. Trust is the main issue in doing business smoothly in
supply chain every supplier and buyer need to be trustable which make a proper sharing and
negotiation among supply chain beneficiaries. Without building trust it is impossible to survive
in market and get the required raw material on time otherwise production and shipment will be
delayed. Another challenge which has been addressed in this study is competition among
supplier and buyer which make price high and low respectively.to compete in this modern era
everyone needs to use more sophisticated supply chain procedure and current market exposure
which will allow company to survive in market and satisfy customers.

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 Chapter 05
Recommendations & Conclusion

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5.1 Recommendations:
The study has found some supply chain challenges of apparel industry in respect of Pacific Jeans
Company. From the study it concluded some suggestion which may be improved the current
procedure of supply chain as well as will mitigate the future challenges. In this perspective of
study some recommendations are given below:

 The company or apparel industry should improve the current information system which
will decrease the information sharing problem. Big storage of data, modern software and
fastest network should be used to date transfer.
 Apparel industry should offer the admin level employs, some scope of off the job training
to know the basic things about supply chain activities. The organization should take care
of their lower-level employee and user department. Because they are not so educated that,
they can operate software as well as understand supply chain activities.
 Own facilities of supply chain must be decorated based on customer location and should
be installed at the place where customer will be benefitted.
 Building trust among supply chain members like supplier and customer, the organization
should implement continuous supplier relationship management and on time payment.
Reducing supply chain lead time, on time delivery, keep quality as per customer demand
and competitive pricing should be maintained to build trust among customers.
 Geographical distance from firms supply chain facilities to customer or supplier must be
reduced by establishing strong transport and distribution network.
 Competition is increasing day by day in this current dynamic world, so apparel industry
should practice effective and efficient supply chain which reduce lead time as well as
make industry strong to survive in the market.
 Inventory management should be improved by applying modern technique like ABC
classification technique.
 Interest on supply chain management among suppliers or customers should be increased
by arranging workshop on importance of supply chain and publishing magazine on
supply chain effectiveness. Organization should show clear view of profit margin by
practicing effective supply chain.

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  Too much dependent on outsourcing of raw materials is very much risky. To reduce the
risk the organization should go for assessors manufacturing. Reducing raw material
unavailability apparel industry should establish their own raw material manufacturing
plant.
 Financing on supply chain activities should be increased. Firms or organization should
give equal importance increase leverage within the supply chain as like production
expenditure.
 Establishing a strong research and development department for future prospects and
better procurement process. To develop all the department together, it should implication
of benchmarking tool for the improvement overall production and supply chain
management.

Successful SCM requires a change from managing individual functions to integrating activities
into key supply chain processes an example scenario, a purchasing department places orders as
its requirements become known. The marketing department responding to customer demand,
communicates with several distributors and retailers as it attempts to determine ways leveraged
through process integration. Supply chain business process integration involves collaborative
work between buyers and suppliers, joint product development, common systems, and shared
information. Operating an integrated supply chain requires a continuous information flow.
However, in many companies, management has concluded that optimizing product flows cannot
be accomplished without implementing a process approach. The key supply chain processes
which should be maintained to face challenges are given below:

 Customer relationship management

 Customer service management
 Demand management style
 Order fulfillment
 Manufacturing flow management
 Supplier relationship management

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5.2 Conclusion:
The objective of the study was to ensure how pacific jeans limited practice supply chain process
to identify major objectives of supply chain management as well as current challenges of apparel
industry by analyzing questionnaire of Pacific Jeans employees. Their business is related with
export activities. Therefore, Pacific Jeans Limited employees are too much busy with their
official activities. That is why all the time they could not help properly to me. However, they
tried their best to help me to learn about something their activities. The report is not free from its
limitation. The main limitations of the report are period of this study was very limited. The
website of this company does not provide a good deal of information. Lack of opportunity to
visit all factory of Pacific Jeans LTD. The functions and activities of PJL are too vast, so they
change their strategy day by day. As a result, the study can't collect update information &
strategy. The head office employee can't provide all of information due to confidential and other
corporate obligation. It’s not possible to change the current supply chain practice overnight.
Company should develop a process so that it can transform to original supply chain practice.
Forecasting formula should be developed to reduce order placement rate. As supply chain
functions are linked with other departments, internal relationship must be developed to build
effective supply chain system. Business nature and environment is continuously changing. Only
a well-developed training program can assist employees to cope with this changing situation.
Currently, the supplier who offers lowest price or offers best quality gets the full order. This halts
the way to create relationship with another supplier. First a supplier category must be developed
than order must be placed proportionately so that the company can keep a good relationship with
all the supplier. This relationship will give extra negotiating power.

The Garment Industry (Apparel Industry) is an important and fundamental business sector in
Bangladesh. For this ground, companies operating within this industry must then be able to
initiate relevant business strategies that would assist sustainable growth of the clothing sector
through Supply Chain Management (SCM). This resources that by modifying a few of the
existing business actions of the Garment Companies, such as their Supply Chain Management
(SCM) systems, unremitting advancement and expansion in the industry may be observed. This
in turn may facilitate the formulation of a better Supply Chain Management (SCM) that would
make a payment to the unremitting fruition of the Bangladesh Garment industry.

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 APPENDIX
Dear Sir, I am Mohammad Sumon Sheikh, a student of CUCBA, University of Chittagong,
Faculty of Business Administration. Here is my Questionnaire about “Supply Chain
System of Apparel industry, A Case Study on Pacific Jeans Limited, CEPZ, Chittagong.

QUESTIONNAIRE
You are requested to provide answers to the following questions. Please tick (√) where
appropriate or fill in the required information on the space provided.

Section A: General Information

1. Please indicate your highest level of education.

a. Bachelor b. Masters c. Secondary school d. College e. Primary education

Other Specify _____________________

2. How long have you worked for the organization?

a. Less than a year b. 1-5 Years c. 6-10 Years d. 11-15 Years

e. Others Specify _____________________

3. Which one is your department do you work under supply chain management?

a) Material Control Department

b) Store Department

c) Audit Department

d) Supply Chain Department

e) Accounts Department

f) Commercial Department

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 Section B: Supply Chain Management procedure

1. Do you Have supply chain management knowledge?

a) Yes
b) No
2. Do you practice Supply Chain Management in your Organization?

a) Yes
b) No

3. What is your responsibility in the organization? List out below

a) __________________________________
b) __________________________________
c) ________________________________
d) _________________________________

4. What document do you prepare as your responsibility?

a) ______________________
b) ______________________
c) ____________________________

5. Can you show me any office document which I can take picture?

 Yes
 No

6. Do you have any relation to supply chain department?

a) ______________________
b) ____________________________

7. Do you have any specific requirements for the supplies to source the raw materials for
manufacturing products?
a) _________________________

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8. How do you source the supplier from the market?
a) ____________________________
b) _______________________

9. How do you procure goods?

a) __________________________________
b) __________________________________

10. How do you Forecast Demand?

a) ERP
b) Oracle
c) Others_______________________

11. Is there any solutions if the supplies fail to meet up the shipment deadline?

a) __________________________________
b) __________________________________

12. Do you have source the fabric and accessories for order from local?

a) __________________________________
b) __________________________________

Section C: Challenges of Supply Chain Management

13. What Are the challenges faced by the organization in terms of supply chain Management?

a) Yes
b) No

If yes, list the challenges you face as an organization in terms of the adoption of supply chain
management? a) __________________________________
b) __________________________________

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