Course: Strategic Supply Chain Management Course Code: SCM 6405 Prepared for Lt Col Md. Tauhidul Islam (Retd.), Associate Professor, Faculty of Business Studies Bangladesh University of Professionals Prepared by: Md. Adib Ibne Yousuf MBA in Supply Chain Management Bangladesh University of Professionals

1. Strategic issues in
Readymade Garments
Supply Chain Management:
A Study on Mohammadi
Group
Course: Strategic Supply Chain Management
Course Code: SCM 6405
Prepared for
Lt Col Md. Tauhidul Islam (Retd.),
Associate Professor, Faculty of Business Studies
Bangladesh University of Professionals

2. Md. Adib Ibne Yousuf
M17232003

3. Outline
• Introduction
• Organizational Overview
• Strategic Process of RMG SCM on MGL
• Findings and Analysis
• Recommendations

4. Introduction
• RMG is the leading sector in Bangladesh in terms of foreign
currency earnings. Bangladesh is the second largest garments
exporter next to China. It contributes 80% of total export
earnings. In Bangladesh there are 4 million people, working in
around 6000 garments factories.
• Bangladesh market share is 5% of total global RMG market of
450b USD. The major buyers are Wal-Mart, Target, Marks and
Spencer, Tesco, Levi‘s, Zara, JC Penny, GAP, C & A, UNIQLO
etc.
• Mohammadi Group is one of the leading garments manufacturers
in Bangladesh. It is also one of the top sweaters manufacturers in
Bangladesh and customers include many world renowned brands
like H&M, C&A, Zara, Esprit, Sears, Wal-Mart.

5. Methodology
• In this research qualitative method has been used. By using
this method how merchandiser think about the garments
production flow and total supply chain.
• The information’s have collected on primary as well as on
secondary basis. The secondary data were collected from
website of Mohammadi Group, various publications i.e.
books, journals, conference papers, annual and audit reports
Bangladesh Garment Manufactures & Exporters Association
(BGMEA), different websites etc. On the other hand,
interviews of merchandisers of the garment factory were the
primary data source.

6. Objectives of the study
• To highlight about the supply chain of Mohammadi Group.
• To find out the strategic issues of Mohammadi Group RMG
section.
• To find barriers that faced Mohammadi Group and make
recommendations based on these.

7. Organizational Overview
Mohammadi Group is a renowned conglomerate of the
country. The company started its operations in 1986 in the
garments industry with merely 52 workers; today it employees
over 10,000. The company has 7 SBUs:-
1. Woven Garments Manufacturing
2. Sweater Garments Manufacturing
3. Media & Entertainment
4. Power Generation
5. IT Services
6. Real Estates
7. Agriculture Industries

8. Organogram

9. Company Profile : RMG
Products Garments
Main Manufacturing Items T-shirt, Tank Top, Polo Shirt, Rugby Shirt,
Fashionable Knit, Fleece Jacket
Production Capacity 6,70,000 pcs per month
Factory Size 157000 sq ft
Exporting Countries China, USA, UK, Australia, Canada, Italy,
Germany
Machinery Qty 2500 sets operational
Buyer Name H&M, C&A, Zara, Espirit, Sears, Walmart,
Haggar, Primark, Black Berry etc.
Export Percentage 100%

10. RMG units of
Mohammadi
Group
• MG SHIRTEX LIMITED
• MOHAMMADI GROUP LIMITED
(MGL)
• MG Niche Stitch Limited
• THE MOHAMMADI LIMITED
(TML) [Sample]
• MG NICHE FLAIR LIMITED
(WOVEN)

11. Functional Departments
1. Sampling Department.
2. Merchandising department.
3. Commercial department.
4. Accessory supply department.
5. Production department.
6. Distribution department.
7. Shipping Department.

12. Supply Chain of RMG

13. Strategic Process of RMG
Supply Chain on MGL

14. Three Decision Level
• Strategic
• Planning
• Operation

15. Pre-Production Processes
Pre-production process includes sampling, sourcing of raw materials,
Approvals, PP meeting etc. In pre-production process develop sample as per
buyer requirement and also take approval from buyer for bulk production.
In this stage, garment factories also source the material from local or
international market.
1) Order Receive: Garments manufacturer received Purchase order (PO)
from buyer like H&M, Wal-Mart and other RBO’s.
2) Strategic Planning: In this stage management level working with
planning for human labor, building, machineries and material
management to ensure the best use of it. In strategic planning level,
management team decide how many garments will produce in a certain
time period, and how many labor and machines will be use for
production. In this case, MGL follow Level Strategy.

16. Pre-Production Processes
3) Sample Development: In sample development stage,
merchandising department working to prepare sample as per
artwork provided by the buyer. When sample development
completed and merchandising department send the sample to
buyer for approval.
4) Material Sourcing: In this stage, material source as per
strategic plan from domestic or international market and in-house
in warehouse. Most of the procurement will be done from
international market by Outsourcing.

17. Production Processes
All the raw materials stored in MGL store and
they go for bulk production of garments. So
material in-house is the pre requisite for starting
production. Stages for Production :-
a. Cutting, b. Sewing, c. Washing, d. Finishing

18. Decision
Chart of
Production

19. Pre-Production
Processes
Packing
Warehousing
Shipment Audit
Dispatch for Shipment

20. Barriers that MGL face
• Due to multiplicity of the stakeholders or middlemen, it takes a lengthy
process for any decision. Pending approval kills the lead time.
• In the whole supply chain, MGL does the manufacturing job but does not
manufacture basic raw materials. Their competitors like China and India
have their own sources of materials. Countries like Vietnam and
Cambodia need only one week to receive the materials from Shanghai. So,
the lead time is another important issue in the RMG business. Their main
competitiveness is the low wage. Only wage alone cannot guarantee
business growth and sustainability.
• delayed and wrong supply of materials
• delayed approval
• Political instability are affecting the export marketing of garment products
severely

21. Barriers that MGL face
• RMG business of MGL involves a buyer-dominated supply system where
garment makers have a very limited role. Unfortunately, even with a
limited role in the supply chain, a factory has to face tremendous pressure
to meet the lead time.
• In the global or macro-level links, relationship and commitment of
different suppliers, services of banks, ports, customs along with
transportation and documentation are interconnected. It is a difficult job to
ensure an effective coordination among all the parties. In the global supply
chain, crossing borders nearby supply with a multiplicity of general
obstructions to intercontinental business: tariffs, nontariff obstructions,
switch over rates and differences in product necessities, consumer savors
and business observes. Borders also present some impediments in
transportation services.

22. Findings and Analysis
Value Chain Analysis, KSF, SWOT, Company Competitive Situation

23. Value Chain Analysis
As garments factory provide goods and services to foreign buyers, their
success depend on the value they are able to provide to their buyers. So
to analyze its ability to provide value to its buyers I have analyzed
Mohammadi's ability regarding this matter.
Inbound Logistics: MGL’s effectiveness in achieving orders.
Operations: Productivity of personnel, Effectiveness of service control
system to improve quality and reduce costs
Marketing & Sales: Effectiveness of market research to identify
customer segment, Innovation in sales promotion and TVC

24. Value Chain Analysis
Procurement: Procurement of Raw materials on timely basis,
multiple suppliers, sourcing in lowest possible cost.
HRM: Efficiency on recruiting, training, and promoting all level of
employees of MGL.
Outbound Logistics: Timeliness and efficiency on delivery of
Finished goods.

25. Key Success Factors (KSF)
• Good communication skills
• Supervision to maintain desired quality
• Committed to the on time delivery.
• Selection of efficient and honest garment manufacturers as
suppliers.

26. SWOT Analysis
1. Experienced
Management
2. Sufficient
Production
Capacity
3. No outsourcing
for printing,
embroidery,
washing plant
1. Delayed
delivery of Sample
2. They don’t
prepare sample
design by their
own
3. Lack of
automated and
modern equipment
1. Foreign Buyers
are interested
2. Competitors are
not strong
enough to
compete
3. Compliance
factory and
Quality for
business growth
1. Emerging
market of China
and India
2. Lack of
Electricity
3. Increased
competition
with local
garments
Strength Weakness Opportunities Threats

27. Company competitive situation
The 'Five Forces 'Model
of Industry Competition'
developed by Michael
Porter is the most
commonly utilized tool
for examining the
competitive scope of
Mohammadi Group Ltd.
It may describe the
competitive environment
in terms of five Basic
competitive forces.

28. Company competitive situation
The threat of new entrants: As the garment industry in our
country is in the stream of growth the industry provides a good
feed to new entrants. So in this industry Mohammadi Group needs
high strategic stakes to survive.
The bargaining power of the firm's suppliers: Mohammadi
Group enjoy little bargaining tendency of buyers.
The bargaining power of the firm's customers: In our
country garment industry faces a little bargain over the negotiation
as an advantage of quota system in EU countries. As a result the
bargaining power of Mohammadi Group is very little. “RANA
PLAZA” tragedy creates a negative image about Bangladesh in
world market.

29. Company competitive situation
The threat of substitute products: In this industry this
aspect is not considered because there is no perfect substitute
for their provided service like synthetic products, jute or
banana fiber clothes etc.
The intensity of rivalry among competing firms: In this
industry there prevails heavy competition among the existing
garment factories and they compete strongly with each other
for the orders from their buyers. So this aspect is a great
constraint for Mohammadi Group.

30. Recommendations
Mohammadi Group already has a good brand name in the
industry. Some recommendations are-
• They should be careful about timely delivery of the sample.
• They can import some necessary modern and automated
equipment.
• They can require some designers to make sample designs by
themselves.
• Training facilities should be introduced specially for the new
employees.

31. Special Gratitude
Fuad Chowdhury
Merchandiser Manager,
Mohammadi Group
Tariqul Hasan
Senior Maintenance
Manager, Mohammadi Group

32. Thanks for your patience
listening
Any Question?