Productivity of RMG Sector in Bangladesh

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 East West University
Term paper on
“Productivity of RMG Sector in Bangladesh”
Course Tittle: Production Operations Management
Course Code: MGT337
Section: 04

Submitted to
Fatema Tuj Johra
Lecturer
Department of Business Administration
East West University

Submitted by
Name ID Participation
Aupi Saha 2019-1-10-176 25%
S.M. Akib Hassan Leon 2019-1-10-106 25%
MD. Sabbir 2018-3-10-007 25%
Ash Shafi 2018-3-10-006 25%

Submission date: 18th April 2022

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Letter of Transmittal

April 18, 2022

Fatema Tuj Johra

Lecturer
Department of Business Administration
East West University

Subject: Submission of report on “The Productivity of RMG Sector in Bangladesh”.

Dear Ma’am,

With due respect we are pleased to submit the report that you gave us the permission and
opportunity to work on “The Productivity of RMG Sector in Bangladesh”. We tried to give our
best effort in this report.
The main focus of this study is to know about the “To understand the Productivity of different
factors, to analyse the performance Employment rate in RMG sector, to Know about the energy
consumption in RMG sector”. We tried to give our best effort to collect the necessary data. This
report enhanced our experience, and we are thankful to you.
We hope that this report will meet your expectation.

Sincerely,
Aupi Saha
S.M. Akib Hassan Leon
MD. Sabbir
Ash Shafi

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Acknowledgement

We would like to express our special thanks of gratitude to our honorable course instructor Fatema
Tuj Johra (Lecturer, Department of Business Administration, East West University) to give us the
golden opportunity to do this wonderful project on the topic “The Productivity of RMG Sector in
Bangladesh”, which also helped us in doing a lot of Research and we came to know about so many
new things.

We are thankful to our honorable course instructor for his guidance, instruction, and valuable
suggestion during the study made it easy for us to complete this report in a perfect way. Without
her supervision or guidance this term paper would not complete.

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Executive summery

RMG is Bangladesh's largest manufacturing sector, accounting for the majority of the country's
GDP growth. This sector, however, faces several challenges that must be overcome in order to
achieve better results. The garment industry must effectively employ their resources in order to
secure long-term economic growth and compete in the global market. Higher productivity
guarantees that existing resources, such as manpower and raw materials, are better utilized. We
investigated and assessed the productivity of the clothing industry in this article. The study's focus
was on labor productivity and faults on the factory floor. It was discovered that labor productivity
is not up to par with industry standards. Questionnaires and observations were used to identify the
factors that diminish labor productivity and the elements that improve labor productivity.

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Table of Contents
Letter of Transmittal.................................................................................................................................. iii
Acknowledgement ...................................................................................................................................... iv
Executive summery ..................................................................................................................................... 1
Chapter -1 Introduction ............................................................................................................................. 3
1.1 Origin of the Study ....................................................................................................................... 3
1.2 Objectives of the Report ..................................................................................................................... 4
1.3 Scopes of the Study ............................................................................................................................ 4
1.4 Limitation of Study............................................................................................................................. 4
1.5 Methodology of the Study .................................................................................................................. 5
Chapter-2 Literature Review ..................................................................................................................... 6
Chapter-3 Discussion ................................................................................................................................ 10
3.1 Productivity....................................................................................................................................... 10
3.1.1 Labor Productivity..................................................................................................................... 11
3.1.2 Capital Productivity................................................................................................................... 12
3.1.3 Multifactor Productivity ............................................................................................................ 13
3.2 RMG Sector in Bangladesh ............................................................................................................. 14
3.3Energy Consumption in RMG Sector in Bangladesh ...................................................................... 15
Chapter-4 Findings of the study .............................................................................................................. 16
Chapter-5 Recommendation .................................................................................................................... 19
Chapter-6 Conclusion ............................................................................................................................... 20
Bibliography .............................................................................................................................................. 21

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Chapter -1 Introduction

Productivity is a measure of the efficiency and effectiveness with which organizational resources
(inputs) are used to create products and/or services(outputs), according to Marsh, Brush (2002) in
his paper Journal of industrial technology. Productivity is a measure of input utilization as well as
an assessment of whether input usage is growing faster than output.

In the instance of a garment manufacturing plant, "output" refers to the number of products
produced, and "input" refers to the people, machines, and industrial resources required to produce
those products within a specified time frame. The key to improving output – or "productivity" – at
a low cost is to ensure that the input-output connection is correctly balanced. For example, if an
increase in output occurs solely because of a significant increase in intake, there is minimal benefit.
In a perfect world, "input" would be managed and minimized while "output" would be maximized.

Higher productivity results in more products being produced by the same number of employees in
the same amount of time. Because overheads are fixed within that time range, "overhead recovery"
connected to factory costs, such as energy and fuel, improves. As a result, the more items produced
in a particular time frame, the lower the overhead allocation per product, lowering the cost of each
individual item and improving competitive advantage.

Dr. Bheda explains the many methods of assessing productivity in his book "Managing
Productivity in the Apparel Industry." Productivity can be measured in a variety of ways, but the
most common are labor productivity, machine productivity, and value productivity. In a garment
unit, there are three techniques to measure shop floor productivity.

1.1 Origin of the Study

This report was given to us as a part of the partial requirement of the course name Production
Operations Management (MGT337), Bachelor of Business Administration program of East West
University. Our course instructor Fatema Tuj Johra Madam, Lecturer, Department of Business
Administration, East West University, has assigned us this report as a part of the course. Our
honorable Madam has authorized the task of writing this report on a group basis.

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1.2 Objectives of the Report
The main objective of this report is to understand the current situation of garments industry of
Bangladesh and to bring out the measures that can be taken to ensure the performance management
and appraisal system in the organization.

General Objective

The board objective of the report is to realize the productivity condition of Bangladesh’s garment
industries focusing mainly on the performance appraisal.

Specific Objectives

➢ To understand the Productivity of different factors.

➢ To analyse the performance Employment rate in RMG sector.

➢ To Know about the energy consumption in RMG sector.

1.3 Scopes of the Study

People are at the centre of the productivity management process. It is the process of constant
feedback and communication between the management and the employer in order to achieve
organizational objectives. It is an essential instrument in human resource management. Various
types of measures are presented in this study that can be used to deal with productivity management
and appraisal in the garments sector.

1.4 Limitation of Study

➢ Lack of previous research study on the topic: There aren’t enough research done about
this topic as we have lack of time. There were very few numbers of research done on this
topic.
➢ Access to Information: Due to Lockdown Readymade garments were closed and getting
proper information was though enough to manage. On the other hand, for different privacy
obligations of the organizations managing information couldn’t be possible.

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1.5 Methodology of the Study
Information is gathered from various authentic magazines, newspapers, web portals, policy
experts, press releases, media reports and so on. The study aims to provide a brief overview of the
Bangladesh apparel industry. It’s mainly based on the garment industries of Bangladesh. We have
used some ideas and thinking from our own perspective and assumption from practical views. The
Internet is a major source for data collection and literature review. There is no quantitative but
qualitative forecast is shown based on the collected data.

The study that we have done covers garment industry.’ Productivity Management and Appraisal
initiatives that they take for the organization. To gather the information, we have taken help from
some sources.

Secondary Sources

➢ Website

➢ Previous Reports

➢ Articles and Newspaper

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Chapter-2 Literature Review

Bangladesh's garment business needs to change its productivity if it is to continue to develop, but
how can it do so? The DFID-ESRC Growth Research Programme (DEGRP) and the Centre for
Policy Dialogue (CPD) convened a meeting in Dhaka in early 2014 to discuss the "challenges of
economic transformation and growth in Bangladesh." This collection of policy articles draws on
the event's discussions, as well as fresh DEGRP research and case studies from other countries, to
recommend areas where policymakers should concentrate their efforts. (Dirk Willem te Velde)

Bangladesh's ready-made garment business has outperformed the rest of the world in several ways
during the last decade. Over the previous half-decade, output has increased at yearly rates in excess
of 15%, and Bangladesh is now the world's second-largest garment exporter, behind China. The
sector presently accounts for more than 12% of GDP and 80% of exports in Bangladesh. Garments
have also played a key part in the country's 6% annual real GDP growth over the last decade, as
well as the development of labor market opportunities for women, with the employment-to-
population ratio rising from 22% to 34% between 2000 and 2010 (International Labor
Organization (ILO , 2013). Despite a turbulent year, the sector's development remains solid, but
there are some reasons to be cautious. The events of 2013, particularly the collapse of the Rana
Plaza building, have raised global scrutiny on Bangladesh's textile industry. Even before the
accident, the sector's rise was often attributed to its extraordinarily cheap labor costs. Productive
efficiency, on the other hand, is viewed as low, not only in comparison to China, but also in
comparison to other competing countries. Adherence to social compliance requirements is also
perceived as poorer in Bangladesh than in competing countries, whether correctly or not. Because
of disparities in topics like as the standard work week and overtime restrictions, cross-national
salary inequalities are difficult to quantify. According to a recent analysis by the Center for
American Progress (Center for American Progress, 2013), average wages in Bangladesh were 46
percent and 51 percent lower in 2011 than in India and Indonesia, respectively, the third and fourth
largest garment exporters. Furthermore, according to the study's findings, wage rates in
Bangladesh remained unchanged between 2001 and 2011. More recent comparison data are
unavailable, but Bangladesh's 65 percent hike in minimum wages in December 2013 is likely to
have closed the gap with this and other competitors. This salary boost also gives the industry a
chance to focus on enhancing productivity. The Bangladeshi garment industry, according to most
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experts, is less efficient than its main competitors. Again, hard data comparisons are difficult to
come by, but a comparison of the export value per worker in different countries provides one
example. In Bangladesh, each garment worker contributes about $5,300 to exports; in Vietnam,
the amount is closer to $7,000, or about 30% more. The garment industry arose early in the
industrialization process in many nations that are now middle-income or even upper-middle-
income. Organizing any activity in a developing country is, of course, difficult. Infrastructure is
weak, rules are sometimes implemented arbitrarily, contracts aren't enforced, and so forth. The fact
that garment manufacture is very simple to organize is one of the reasons this sector frequently
initiates the growth process. Countries have priced themselves out of garment production as their
national incomes and salaries rise, and have shifted their production to other, more sophisticated
items. China is currently undergoing this shift and is losing its competitiveness in the garment
industry. The following rung on the industrial product ladder is substantially tougher on mistakes.
Why? One explanation is that as industries progress up the industrialization ladder, output becomes
more capital intensive. Because labor efficiency is leveraged with capital, it becomes much more
important. Another factor is that product quality is more vulnerable to errors. A malfunctioning
button on a recently acquired garment is inconvenient; poor wiring on a motor, on the other hand,
has far more significant repercussions. As a result, garment production serves as a testing ground
for management strategies that increase efficiency and quality. The industry has grown because of
low-cost labor. However, Bangladesh's long-term growth will be constrained by its reliance on low
labor prices. Bangladesh is lucky to have a thriving manufacturing industry with hundreds of
significant companies. We find ourselves asking what will serve as a wellspring for needed mid-
level managers in many countries without such industries. As Bangladesh grows, the garment
industry may become a supply of managers for new industries. However, if those managers are to
be effective in either boosting the competitiveness of the garment sector or developing new, more
complicated sectors, they must improve their skills.

Since the 1980s, Bangladesh's garment industry has been a success in international markets. It has
had a significant impact on the national economy, accounting for most overall commodity exports
and employing over 3 million people. As is widely acknowledged, the industry's excellent
competitiveness originates from its low pay level in comparison to other garment-exporting
countries; the average operator wage is significantly lower than in China and India (Staritz, C. and
Frederick, S. , 2012). However, during the past five years, the benefit of a low wage has been

7
fading. The minimum wage was updated in 2005, 2010, and 2013 after a long period of time from
1994. Despite the fact that the minimum wage was increased by more than 80% in 2010, Dhaka
saw several protests pushing for another rise. While Bangladeshi garment exports grew after the
Multi-Fiber Arrangement (MFA) was abolished in 2005 and the 2008 financial crisis, we
discovered that raising the minimum wage had a major impact on the Bangladeshi sector's
competitiveness (Fukunishi, T. , 2014). Profit share, on the other hand, fell to 42 percent in 2008,
well below the Cambodian average (46 percent). Despite the fact that most businesses made profits
in 2008, the drop in profit share implies that businesses have become more vulnerable to price
competition. Wages are a primary driver of the decrease in profit share; in Bangladesh, the average
real wage increased by 43% from 2002 to 2008. In contrast to Bangladeshi enterprises, which saw
no substantial improvement in productivity despite a comparable increased trend in salaries,
Cambodian industry was able to increase its share of profit by increasing total factor productivity
(Fukunishi, T. , 2014). The Bangladeshi industry's significant expansion in exports after the MFA's
termination was maintained by cutting profits. Given the continued push for wage rises and
competition in a liberalized garment market, productivity is becoming a more important factor of
competitiveness even in low-income countries (LICs). In Bangladesh, there is still a persistent
desire for wage hikes, as seen by labor demonstrations. Furthermore, following the recent collapse
of a manufacturing building (Rana Plaza) and a succession of workplace fires, enforcing
compliance with labor standards is becoming increasingly important for the sector. Bangladeshi
businesses must incur expenses in order to improve working conditions. Export prices, on the other
hand, have been declining since the MFA was terminated. As a result, without increased
productivity, the Bangladeshi sector will be unable to maintain its competitiveness. The
Cambodian situation is instructive. Given the relatively high salary level in Better Factories
Cambodia and the severe labor compliance regime, Cambodian enterprises were likely forced to
improve efficiency in order to maintain garment exports. Contrary to popular belief, enterprises in
labor-intensive industries in LICs can improve their technology. It's also worth noting that firm
turnover drove productivity development in the Cambodian sector; that is, unproductive
enterprises were replaced by productive firms (Asuyama, 2013). Productivity rises as processes
and products are improved. Process upgrading refers to boosting production efficiency by, for
example, expanding employees' and managers' abilities or installing the most up-to-date
equipment, whereas product upgrading refers to improving product quality. Both sorts of

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upgrading are possible in Bangladesh's industry. Garment factories are more unskilled and labor-
intensive than those in other exporting countries, owing to lower wages; they use a large number
of helpers to assist machine operators. As a result, substituting unskilled labor with machines or
skilled labor, as well as training those unskilled workers, has a lot of potential for cost reduction
and efficiency gains. Due to excessive labor turnover, one issue is that businesses are not motivated
to train employees. Due to excessive labor turnover, one issue is that businesses are not motivated
to train employees. Because the unit price of textile products shipped from Bangladesh is the
lowest in the world, there is a lot of room for product improvement. Upgrading, on the other hand,
necessitates not only the efforts of garment companies, but also government action to improve the
quality of the business environment. A cross-country analysis reveals that high-wage garment
exporting countries like China and Vietnam, who are thought to export high-quality items, have
better logistics performance (World Bank Incentives, 2010). To maintain expansion, the
Bangladeshi garment industry must address issues such as labor regulation compliance and
productivity improvements. In terms of policy consequences, policies that hinder free entry and
leave should be abolished to maintain productivity development through company turnover, but
the Bangladeshi garment sector has effectively restricted entirely foreign-owned enterprises' entry
(Yunus, M. and Yamagata, T. , 2014). Furthermore, because garment companies are generally
capable of increasing productivity, appropriate updating of minimum salaries and enforcement of
labor compliance will contribute to improved worker welfare and enhanced trust in export markets
without compromising competitiveness. In addition to competitiveness, garment companies, the
government, and related organizations, such as labor unions, must work together to provide public
goods such as worker training, a better business climate, and labor compliance institutions.

9
Chapter-3 Discussion

3.1 Productivity
The Ready-Made Garments industry has huge impact on Bangladesh economy. Bangladesh export
the RMG product all over the world. 83% of total export of Bangladesh is from RMG sector
(BGMEA, 2022). Because Bangladesh has the advantage of low labor cost and availability of the
labor but the challenges of RMG sector is the limited natural resources of Bangladesh. But despite
this limitation Bangladesh is the second biggest RMG industry all over the world. But there is a
question about the productivity of the RMG sector of Bangladesh. There are some statistics we are
showing-

Year Labor Wage Total Employment Number of Capital

Hour Per Rate Per RMG in RMG in Factories Invested
Year Hour Export Millions (Million
(USD) (Million in in USD)
USD)
2018- 48*52=2496 0.50 34133.27 4.50 4621
2019

2017- 48*52=2496 0.50 30614.76 4.00 4560

2018

2016- 48*52=2496 0.32 28149.84 4.00 4482 488.39

2017
2015- 48*52=2496 0.32 28094.16 4.00 4328 364.44
2016
2014- 48*52=2496 0.32 25491.40 4.00 4296 442.92
2015
Source: (Bangladesh Bank) (Mir Sohrab Hossain, August 21, 2018) (BGMEA, 2022)

By depending on the above data, we are showing some calculation to figure out the productivity
of different segment: -

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3.1.1 Labor Productivity

𝑇𝑜𝑡𝑎𝑙 𝑂𝑢𝑡𝑝𝑢𝑡
Labor Productivity =
𝐿𝑎𝑏𝑜𝑟 𝐻𝑜𝑢𝑟∗𝑊𝑎𝑔𝑒 𝑟𝑎𝑡𝑒

Labor Productivity

2018-2019 2017-2018 2016-2017 2015-2016 2014-2015

34133.27 30614.76 28149.84 28094.16 25491.40

2496 ∗ 0.50 2496 ∗ 0.50 2496 ∗ 0.32 2496 ∗ 0.32 2496 ∗ 0.32

= 27.35 = 24.53 = 35.24 = 35.17 = 31.92

In Bangladesh the government change the wage rate after five years. In Bangladesh the wage rate
for RMG workers were 5300 BDT before 2018, but in 2018 Government fix it into 8000 BDT
monthly and when we convert it into per hour it became $0.50 (Moazzem, September 2019). But
when it is the question about productivity it’s not a good indication. Because before increasing the
wage rate the productivity level were in $35.24 but after increasing wage rate in decline in $24.53
in 207-2018 Fiscal Year and in 208-2019 Fiscal year it again increases in $27.35. this decline
happened because of rate of wage increase higher than the rate of export regarding previous year.
The increase of wage rate helps the worker to improve their lifestyle but in terms of productivity
this in not good because the labor productivity was much higher before increase of wage.

𝑂𝑙𝑑 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦− 𝑁𝑒𝑤 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦

Percentage Change in Labor Productivity =
𝑂𝑙𝑑 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦

% Change in Labor Productivity

2018-2019 2017-2018 2016-2017 2015-2016
24.53 − 27.35 35.24 − 24.53 35.17 − 35.24 31.92 − 35.17
24.53 35.24 35.17 31.92

= -0.115 = 0.30 = -0.001 = -0.101

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3.1.2 Capital Productivity

𝑇𝑜𝑡𝑎𝑙 𝑂𝑢𝑡𝑝𝑢𝑡
Capital Productivity =
𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑒𝑑

Capital Productivity

2016-2017 2015-2016 2014-2015

28149.84 28094.16 25491.40

488.39 364.44 442.92

= 57.64 = 77.09 = 57.55

In the case of capital productivity there is an ups and down trend in 2014-2015 fiscal year the
productivity was $57.55 and in the next fiscal year it increases to $77.09 because in this year the
amount of export was higher than the previous year and the investment was lower than the previous
yeas which helps to increase the productivity. But in the next year the productivity decreased in
$57.64 because the amount of export was not much higher than the previous year, but the rate of
investment was much higher, and for this reason the productivity decreased.

𝑂𝑙𝑑 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦− 𝑁𝑒𝑤 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦

Percentage Change in Capital Productivity =
𝑂𝑙𝑑 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦

Percentage Change in Capital Productivity

2016-2017 2015-2016
77.09 − 57.64 57.55 − 77.09
77.09 57.55

= 0.25 = -0.34

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3.1.3 Multifactor Productivity

𝑇𝑜𝑡𝑎𝑙 𝑂𝑢𝑡𝑝𝑢𝑡
Multifactor Productivity =
𝐿𝑎𝑏𝑜𝑟+𝐶𝑎𝑝𝑖𝑡𝑎𝑙

Multifactor Productivity

2016-2017 2015-2016 2014-2015

28149.84 28094.16 25491.40

798.72 + 488.39 798.72 + 364.44 798.72 + 442.92

= 21.87 = 24.15 = 20.53

In the case of multifactor productivity there is ups and down trend because of one factor which is
capital, and another factor is constant because the wage rate was constant in these three fiscal
years. In 2015-2016 fiscal year the productivity was $24.15 which is higher than the previous year.
and in the year of 2016-2017 productivity decreased to $21.87, because the capital investment was
higher than previous year.

𝑂𝑙𝑑 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦− 𝑁𝑒𝑤 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦

Percentage Change in Multifactor Productivity =
𝑂𝑙𝑑 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦

Percentage Change in Multifactor Productivity

2016-2017 2015-2016
24.15 − 21.87 20.53 − 24.15
24.15 20.53

= 0.094 = -0.18

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3.2 RMG Sector in Bangladesh
The Ready-Made Garments (RMG) industry has become one of the major income sources of
Bangladeshi people. This industry started its journey in late 70’s and since then it continued to play
vital role in the growth of economy, also has emerged as the largest export earning sector of the
country. This sector of Bangladesh draws global attention for its unique quality of production and
to create huge employment opportunity semi-skilled and unskilled women workers across the
country. The RMG is the leading sector of Bangladesh in terms of employment, production, and
foreign exchange earnings (World Bank, 1990). In 2016, the RMG sector earned about US $ 28
billion in export income compared to a mere US$12,000 in 1978. Duty-free market access under
the Multi-Fiber Arrangement, zero tariff access to several developed country markets and
competitive labor costs gave Bangladeshi manufacturers a comparative advantage over other
countries. This sector now employs 4 million workers compared to only 120,000 in 1985, and
about 80 percent of garment workers are women from poor rural households. The workers who
left their rural work to take up new jobs in the garment factory earned higher wages than their
previous work. Moreover, part of their earnings from the garment work might be used to improve
their families’ standards of living who were residing in the countryside. Many families are proud
of having their family members’ works in the garment industry because part of their family
members’ income could partially share with the family to improve family’s living condition.
Bangladesh already has various commitments to maintain labor standard such as minimum wage,
maternity leave, discourage child labor and so on.

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3.3Energy Consumption in RMG Sector in Bangladesh
The industrial sector is the biggest energy consumer in Bangladesh. One of the biggest industrial
sectors is Ready Made Garment sector. Electric motors account for more than 45% of the electric
consumption in the industrial sector in the country. It is also found that huge number of emissions
can be reduced for different energy saving strategies applied in garment.

15
Chapter-4 Findings of the study

The Ready-Made Garment sector in Bangladesh has a significant contribution on creating job
opportunities, improvement of living of standards of workers of Bangladesh and economic
development of Bangladesh. The notable findings are:

Labor Productivity in (USD)

$40.00 $35.17 $35.24
Productivity in USD

$35.00 $31.92
$30.00 $27.35
$24.53
$25.00
$20.00
$15.00
$10.00
$5.00
$0.00
2014- 2015- 2016- 2017- 2018-
2015 2016 2017 2018 2019
Productivity in (USD) $31.92 $35.17 $35.24 $24.53 $27.35
YEAR

Productivity in (USD)

➢ In labor productivity it was upward in 2014-2017 fiscal years respectively $31.92, $35.17,
$35.24 and then it decreased to $24.53 in 2017-2018 fiscal year and in next fiscal year it
increased to $27.35.

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 Capital Productivity in (USD)
$100.00
Productivity in USD

$77.09
$80.00
$57.55 $57.64
$60.00
$40.00
$20.00
$0.00
2014-2015 2015-2016 2016-2017
Capital Productivity in (USD) $57.55 $77.09 $57.64
YEAR

Capital Productivity in (USD)

➢ In capital productivity it has ups and down trend in 2014-2015 fiscal year the productivity
was $57.55 and in next year it increased to $77.09 and again it decreased to $57.64.

Multifactor Productivity in (USD)

Productivity in USD

$25.00 $24.15
$24.00
$23.00 $21.87
$22.00
$21.00 $20.53
$20.00
$19.00
$18.00
2014-2015 2015-2016 2016-2017
Multifactor Productivity in
$20.53 $24.15 $21.87
(USD)
YEAR

Multifactor Productivity in (USD)

➢ In Multifactor Productivity it has ups and down trend in 2014-2015 fiscal year the
productivity was $20.53 and in the next year it increased to $24.15 and again it decreased
to $21.87.

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➢ The Ready-Made Garment sector has a remarkable positive impact on individual income,
individual expenditure, and individual savings
➢ The Ready-Made Garment sector helps in child and women education supportive
➢ The Ready-Made Garment has a substantial positive impact on transportation suitable,
health facilities, sanitation, and housing affordable
➢ The Ready-Made Garment sector creates vast work opportunities for illiterate people and
poor people
➢ On the other hand, in this sector sometime salary is not sufficient to the employers needs
and workers want to their salary on time
➢ Workers want healthier and noise free work environment
➢ Workers want comfortable and free transportation facilities
➢ But the good thing is that every year RMG sector of Bangladesh is building a lot of semi-
skilled and full-skilled workers who are working in Bangladesh to get adequate financial
benefits and improve the wheel of economic progress of this country.

18
Chapter-5 Recommendation

1. The government bears some responsibility for improving the situation by establishing proper
policies to protect the garment industry, resolving license issues, providing quick loading facilities
in the port, providing a safe working environment, and keeping the industry free of political issues
and bias. When the industry is in need, credit must be provided.

2.The government should concentrate on domestic production and acquisition of high-quality raw
materials.

3. If Bangladesh wishes to compete regionally, if not worldwide, it must enhance the productivity
of its labor force.

4. The government should concentrate on establishing a separate route for export and import
activity. It could be a highway, a metro line, or more cargo ships, for example.

5. Bangladeshi policymakers study the causes of worker unrest and devise policies to address the
issues in the garment industry.

6. Political parties should refrain from taking any detrimental or destructive actions that might
jeopardize the general welfare of the people.

7. In order to build a garments factory, the government must ensure that the garments industry
complies fully with the Factory Act of 1965. The rights and advantages of workers must also be
protected. The working atmosphere should be conducive to productivity.

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Chapter-6 Conclusion

Quality, Price Competitiveness, and Lead Time are the three most important elements in the RMG
industry. To maintain price competitiveness, we must enhance productivity. We must also maintain
product quality while increasing productivity. If these two goals are met, we will be able to work
with shorter lead times. Otherwise, our global competitors will outperform us with superior quality,
lower prices, and shorter lead times. While RMG is Bangladesh's main manufacturing industry,
other nations (China, India, Vietnam, Cambodia, Sri Lanka, and Pakistan) have performed well in
the worldwide market. Resources must be effectively utilized, and flaws must be reduced in order
to remain competitive in the global market.

20
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