September 25, 2006	Monday	Ramazan 1, 1427

THE supply chain management is a co-ordinated set of techniques to plan and execute all steps in global networking for acquiring raw materials from vendors, transforming them into finished goods, and delivering goods and services to customers. It includes chain-wide information sharing, planning, resource synchronisation and global performance standards.

The overall objective of the SCM is to reduce the lead time and cost of the product. In saturated markets, like textiles, the issue of lead time is of great importance. It is the main driving factor for business profitability.

And the world trends in textile and fashion business indicate that that the lead time is shrinking day by day.

There are a lot of textile fashion brands which are and can be manufactured in countries like Pakistan, India, Bangladesh and China. The fashion cycles of these brands are mainly once or twice per year, making it possible to some extent for Pakistani market to respond to their lead time.

A decade ago, a young Spanish brand ZARA appeared in European markets. It entered into market to reduce the fashion cycle and cover a mass market by reducing the cost. Nowadays ZARA’s fashion cycle accounts for two weeks. The product and fashion changes from the shelves and new fashion is introduced.

Looking into this change, other volume selling brands like H&M, M&S, Levis, CK, Nike also began to compete with ZARA’s to provide short fashion cycle at reduce costs. Thus a war of lead time and price started. This is the real post-quota scenario to which many manufacturing countries and industries equipped themselves in advance.

The question is: who takes care of this western fashion consciousness. Obviously, the manufacturers and suppliers.

This created a new and an advanced demand and supply market. A market where each key player collaborates with its suppliers and shares with every consumer, market information and risks. The supplier has access to state of the art planning systems, manufacturing systems and SCM which provide confidence to the buyer and compels him to have long-term buying contracts.

Could Pakistan meet the present and future lead time demand and the prices of western markets? Unfortunately, Pakistani textile industry was never prepared for this scenario.

Despite having latest computerised manufacturing machines in Pakistan, there is no production and inventory planning systems. A majority of the industrial planning is done by illiterate and less educated persons holding position of a manager, mainly due to presumed cost saving by executives. Even in the available educational institutions related to industry and textile, less emphasis is given to SCM issue on practical grounds.

This fashion situation in western markets frequently creates changing short run orders. This has a lot of impact and burden on planning. If there are not enough qualified managers and no proper planning systems (ERP), the result will be high cost of operation and late deliveries.

The available road infrastructure is a major element of SCM. The government has spent a lot of money in improving and upgrading the roads and highways which is good for the SCM of textile value chain. Railway logistic infrastructure is in bad shape with a lot of delays in operation and transportation.

The position in regards to merchant navy fleet is also not satisfactory. With few and old flag ship carriers, export mainly depends on foreign ships. The state of operational capabilities at harbours is quite poor with containers lying for days before being transported to ships. The available terminals have less capacity and infrastructure to cope with the incoming containers.

To date, Pakistan has no deep sea container terminal to handle large vessels. International shipping companies frequently change their vessels to bigger-size containers to accommodate large volumes of cargo. Unfortunately, such bigger vessels have no service to Pakistani ports at present. This increases the maritime cost and time.

Thus, Pakistani textile industry is loosing its competitiveness in international market. Buyers get a low quality service which reduces their confidence to do business with Pakistani industry. As such, Pakistani industry could neither meet the lead time demand of highly profitable textile and fashion products nor could meet the low price expectation of western markets.

Despite having state of the art machinery and access to capital, our textile industry is compelled to manufacture and export raw, non-seasonal and low value textile products where high capital is required to manufacture at extremely low margins. This reduces the overall competitiveness.

Supply chain management should be the key focus to enhance competitiveness of our textile industry.It can help enter the arena of high value textile markets.