Seminar on

“Factors affecting supply chain management efficiency in cross

border outsourcing”Monir Uz Zaman

8th sem., Textile eng. dept.

Extent of discussion:

Factors affecting SCM efficiency in cross-border outsourcing

Outsourcing Global outsourcing SCM Efficiency of SCM Factors affecting SCM efficiency H&M outsourcing strategy from Bangladesh. Identification of factors playing vital roles for efficient SCM

practice (H&M and Bangladesh)

Outsourcing and Global Outsourcing

Strategic Business Practices

Make it and Serve it to ultimate customers. Don't make but serve to ultimate customers. Don't make and don't serve but still do business. Make partial and serve.

OutsourcingObtain (goods or services) by contract from an outside supplier.

Outsourcing and Global Outsourcing

Generalized business strategy

“You may choose to outsource this function to another company or do it yourself ,,

Outsourcing –Space

Techno craft- Panipat, Kanpur, Salem, Coimbatore. Shahi Exports- Bangladesh. Zebra Fashion (Brazil) – Bangladesh.

Outsourcing and Global Outsourcing

Out –resourcingOnsite sourcingNear shoringOff shoringCrowd sourcingMultisourcingIn-house

Outsourcing-

Terminology

Outsourcing and Global outsourcing:

Why Outsourcing?

Outsourcing & Global Outsourcing

Strategy of outsourcing:

Strategic Assessment Need analysis

Vendor assessment

Contract and negotiation

Project Initiation and transition

Supply Chain Management

Supply chain management (Structure)

Suppliers @Ultimate Raw material producerLevel-2 @ Arvind crops

Suppliers @Raw material dealersLevel-1 @ Jaydip Cotton Fibre Pvt. Ltd

Manufacturers @Arvind Textile Pvt. Ltd

Customers @ Retailers- Wal-Mart, Zara Level-1

Customers @ Ultimate CustomersLevel-2 @ Arvind Life Styles

Supply chain management (Structure)

Service Providers

Finance(Bank)

Logistics(Cargo service) Market

Research

IT

Product Design

Supply Chain management

Actors in supply chain management:

Fields of acting in SCM:

Suppliers

Manufacturers

Customers

Service provider

Logistic

Information sharing

Inventory

Manufacturing

Sourcing

Supply chain management

Suppliers selection Sourcing lead time Inventory decisions Production lead time Utilization of capacity Mode of transportation Communication system Pricing issues

Export/import compliance Standard testing practice Advanced technology Endowment factors Govt. incentives and

regulations Ports facilities etc

Factors affecting actor’s acting in SCM:

Cross border outsourcing and SCM-Case studies:

Cross border outsourcing and SCM-Case studies: (RMG industry In Bangladesh)

Cross border outsourcing and SCM-Case studies:

Supply chain process of H&M in Bangladesh:

Sample development and approval

Order processing, price setting & selection of suppliers

Material sourcing by suppliers

Manufacturing process at suppliers production plant

Compliance auditing

Product quality inspection

Export processing

Analysis: Cross border outsourcing and SCM ( Sample development stage)

Market analysisTrend analysisProto designing

Dhaka

Sweden

Green Tag sample

12 days

Cross border outsourcing and SCM-Case studies

Order processing: GPQ, Visual Audit

Dhaka-Office- H&M(130 suppliers, 30-40 subcontractors)

Suppliers

PriceQualityLead TimeCSRCapacities

Stoc

kholm

offi

ce

6-8 days PO

Cross border outsourcing and SCM-Case studies:

Material sourcing by Suppliers-: (37- 44 days)

Manufacturing at suppliers plant : (20-25 days)

Quality inspection

CSR Auditing

Cross border outsourcing and SCM-Case studies:

CSR VS CRM:

“Europeans and Americans mindset”

Cross border outsourcing and SCM-Case studies: (Export processing)

Customs

Analysis: Cross border outsourcing and SCM

Factors cause efficiency in SCM:

1. Building EPZ.2. World class-industry infrastructure.3. FDI policy.4. Cost effectiveness.5. Natural gas resources.6. Geographical Advantages.7. GSP support

Analysis: Cross border outsourcing and SCM

Identified factors cause inefficiency in SCM:

Unavailability of raw material Lack of utilities supply

Inadequacy of transportation supply Bureaucracy

Port congestion Political unrest

Labour cohesion Inefficient technological support.

References

1. Md. Rajib Hasan and Mohammad Abdul Alim, Factors Affecting Supply Chain Management Efficiency in Cross Border outsourcing: A case study of H&M and its Outsourcing Operations in Bangladesh ,Master Degree Project No.2010:60 , Logistics and Transport management, University of Gothenburg, Sweden.

2. Asli Koprulu, M. Murat Albayrakoglu , Supply chain management in the textile industry: a supplier selection : Model with the analytical hierarchy process , ISAHP 2007, Viña Del Mar, Chile, August 3-6, 2007.

3. Mohammad Ali, Dr. Mamun Habib, Supply Chain Management of Textile Industry: A Case Study on Bangladesh, vol.1 no-2, International Journal Of Supply Chain Management.

If anybody have any question, feel free to ask otherwise I will ask!!!