Textile Industry In Pakistan Essays

Fabric industry has been the rampart of Pakistans economic system. Textile exports were Rs or $ 8.6 Billion in 2004-05, which are 60 % of the entire exports of Pakistan. It is the largest employment sector, accounting for 38 % of entire industrial employment. Garments are the major turning sub -sector of fabrics and history for 25 % in entire fabric exports. The sector is besides the largest employer of work force in industrial sector ( Aftab A. Khan, 2010 ) .

Importance of fabric industry in Pakistan ‘s Economy

2006-07

2007-08 ( July-Feb )

Share in entire exports

61.1

53.8

Share in fabrication

45

46

Share in employment

38

39

Share in GDP

8.5

8.5

Fabric exports

$ 6.6 billion

$ 6.3 billion

Investing in fabric

$ 6.4 billion

$ 7.0 billion

A Beginning: Textile Commissioner ‘s Organization.

Until 2005, the importation states had imposed a fabric quota for states exporting fabrics garments. The remotion of fabric quota has created new chances for viing in planetary market. This besides means that states with inefficient engineerings, hapless supply ironss and inability to pass on with their planetary supply concatenation spouses will be at a great disadvantage.

Pakistani fabric industry will hold to accommodate itself with the new planetary market challenges and make both efficient and antiphonal supply ironss to run into the new concern environment. Many of the forward looking fabric companies have rapidly adapted to these challenges and have installed province of the art machines, developed and acquired information engineerings that can seamlessly incorporate with the planetary clients and benefited from the alteration. The gait of the alterations is nevertheless, far from satisfactory and it is of import to measure the industry to place the public presentation parametric quantities that would find the hereafter success and guarantee a important market portion for Pakistan ‘s fabric garments.

Efficient Supply concatenation direction in the fabric sector requires handiness of the basic natural stuffs, substructure to guarantee cost effectual supply to the industrial centres, and effectual and efficient fabrication, run intoing new engineering challenges to develop merchandises to run into the demand of extremely demanding clients. The information is life blood of any supply concatenation. In a planetary market the quality of this information acquires even greater importance. Ability to make visibleness of the concern to possible clients, incorporating with the clients to find their demands and run intoing their demand with the minimal lead clip are factors that allow the concern to vie in the planetary market.

An probe of fabric supply concatenation to find the public presentation parametric quantities that will be critical to success of the supply concatenation will supply much needed input to the fabric sector and aid in taking some of the barriers to viing in the planetary market.

This survey aims to make full this spread. The research undertaking proposes to dimension the supply concatenation and find the public presentation parametric quantities that can intend success for the Pakistani fabric industry.

1.2 PROBLEM STATEMENT: .

The Purpose of this research is to look into the elements of supply concatenation that would be critical to the success of Pakistan ‘s fabric industry in the competitory planetary market. As discussed in literature reappraisal we have identified the critical parametric quantities as quality direction, technological diverseness, information engineering and client service.. To prove the cogency of these variables we propose the undermentioned hypotheses for the research undertaking

1.3 Hypothesis:

To prove the cogency of the variables we propose the undermentioned hypotheses for the research undertaking

H0:

Quality direction has a important impact on value concatenation public presentation

H1:

Technological diverseness and debut of modern engineering will hold positive consequence on the value concatenation public presentation

H2:

Information engineering is has important impact on value concatenation public presentation

H3:

Customer service has important impact on value concatenation public presentation

1.4 OUT LINE OF THE STUDY:

This undertaking begins with an debut to the job. An intensive literature reappraisal of the elements of supply concatenation and the working of Pakistani industry was so carried out to place countries for the research survey.

It became clear that bulk of the fabric sector companies are go oning with old patterns, utilizing old engineerings and machinery, many do non hold entree to the new supply concatenation information engineerings such as client relationship direction and or endeavors resource be aftering package.

Quality play a really of import portion of any sort of merchandise specially textile merchandise. QM is an incorporate direction doctrine and set of patterns that emphasizes, among other things, uninterrupted betterment, run intoing clients ‘ demands, cut downing rework, long-range thought, increased employee engagement and teamwork, procedure redesign, competitory benchmarking, team-based problem-solving, changeless measuring of consequences, and closer relation-ships with providers ( Ross, 1993 ) .

The quality direction plans are non earnestly implemented and as a consequence the quality of stuff exported frequently suffers and consequences in rejection of supplies and punishments stipulated in export contracts.

Supply concatenation direction is an incorporating doctrine to pull off the entire flow of a distribution channel from supplier to ultimate client. Many companies consider investings in ailment handling as agencies of increasing client committedness and edifice client trueness ( Stephen S. Tax, 1998 ) . Effective declaration of client jobs and relationship selling are linked closely in footings of their common involvement in client satisfaction, trust, and committedness ( Morgan, 1994 ) .

The client service dimensions of the industry in general besides leave much to be desired. The pattern of client service is non a strong point for local industry functioning local clients. In a planetary concern client service dimension has become one of the cardinal drivers for supply ironss and demands to be incorporated into the export scheme.

The literature reappraisal and demands for farther probe identified the hypotheses for roll uping and analysing the information. We developed a questionnaire to study the fabric makers and measure their concerns and experience. The information collected was so analyzed statistically utilizing appropriate research methods.

Chapter 3 describes the importance of research methods and analysis techniques and justifies the statistical technique used for our informations analysis.

The information analysis and consequences are presented in Chapter 4. The last chapter discusses the result of the research undertakings and decisions drawn from the survey and suggests subjects for future research. The auxiliary informations are presented in the Appendixs.

1.5 Definitions:

The definitions used in this thesis are listed and explained in appendix-A1

Chapter 2: LITERATURE REVIEW

Value concatenation public presentation variable used for this survey is the independent variables while Quality direction ( I.S.O 9000 ) , Customer service, Technological Diversity and information engineering are the dependent variables. Now here all the variables are explained in detailed in the context of different writer ‘s positions.

2.1 VALUE CHAIN PERFORMANCE:

A supply concatenation is characterized by the flow of goods, services, money, and information both within and among concern entities including providers, makers, and clients. It besides includes all types of organisations engaged in transit, warehousing, information processing, and stuffs managing. Sourcing, procurance, production programming, fabrication, order processing, stock list direction, repositing, and, eventually, client service are the maps performed throughout the supply concatenation. The ultimate end of SCM is to run into clients ‘ demand more expeditiously by supplying the right merchandise, in the right measure, at the right location, on the right clip, and in the right status ( Asli Koprulu1, 2007 )

As Figure 1 shows, SCM aims four major ends: 1 ) waste decrease: 2 ) clip compaction ; 3 ) flexible response ; and 4 ) unit cost decrease. These ends have been articulated in several contexts associated with SCM, stressing the importance of both intra- and inter-firm coordination. ( Brewer, 2000 )

Every company ‘s concern consists of a aggregation of activities undertaken in the class of planing, bring forthing, and selling, presenting and back uping its merchandise or service. All of the assorted activities that a company performs internally combine to organize a value concatenation. ( Porter, 1985 ) .

Supply ironss are some times referred to as value chains activities a term that reflect the construct that value is added as goods and services advancement through the concatenation. Supply or value ironss are typically comprised of separate concern organisation, instead than merely a individual organisation. Furthermore the supply or value concatenation has two constituents for each organisation: a supply constituent and a demand constituent. The supply constituent starts at the beginning of the concatenation and terminal with the internal operation of the organisation. The demand constituent of the concatenation starts at the point where the organisation end product is delivered to its immediate clients and terminal with the concluding client in the concatenation ( stevenson, 2005-006 )

In textile Supply Chain Management ( SCM ) is the co-ordinated set of techniques to be after and put to death all stairss in the planetary web used to get natural stuffs from sellers, transform them into finished goods, and present both goods and services to clients. It includes value concatenation activities merely like broad information sharing, client services include lead clip and ailment handling and every bit good quality of the merchandise and technological diverseness play an of import role.A The end of supply concatenation direction is to associate all constituents of the supply concatenation so that the market demand is met every bit expeditiously as possible across the full concatenation.

Pakistan ‘s fabric industry ranks amongst the top in the universe. Pakistan is World ‘s 4th largest cotton manufacturer and the 3rd largest consumer of the same. Cotton based fabrics contribute over 60 % to the entire exports, histories for 46 % of the entire fabrication and supply employment to 38 % fabricating labour force. The handiness of inexpensive labour and basic natural cotton as natural stuff for fabric industry has played the chief function in the growing of the Cotton Textile Industry in Pakistan

The current scenario posses challenges foremost to prolong its planetary placement and secondly to increase its market portion by both addition in volume every bit good as addition in unit values. The unit value can be increased merely better primary activities in supply concatenation direction like cut down cost which is associated with natural stuff parts and constituents and consumable points from sellers having storing and circulating inputs from providers review and stock list direction operations activities distribution activities gross revenues selling and clients services play an of import function in textile value concatenation activities. ( jica, 2006-07 )

The Value Chain in Textiles

2.2 QUALITY MANAGEMENT ( I.S.0 900 ) :

Fabric industry has been Premier industry in Pakistan and a major beginning of export gaining and employment. It besides helps in value add-on to the fabrication sector of the economic system. As we mentioned in the debut, although the message of quality has, in the terminal, been really good received and understood by companies, the message of betterment of SCM continues to be comparatively thin ( Chandra, 200 ) .

In this epoch of rapid technological alterations and inventions, every client has become choice witting. Customers now a twenty-four hours desire the confidence of quality either through merchandise design or through image or the personality of the merchandise. In response to this tendency, sellers all over the universe is either offering to the clients, merchandises with

High quality design specifications or they are concentrating on the image selling. Quality means both bring forthing merchandises to specification and run intoing client ‘s outlooks ; the demand of clients becomes a cardinal input to entire quality direction ( Richard Reed, 1996 ) . The ISO 9000 is the reply of every client demand through which the organisations can guarantee clients of their merchandises, high quality. Coping with this many Textile Mills in Pakistan have achieved “ ISO 9002 ” Quality Award. It gives those Textile Mills the international acknowledgment as the manufacturer of High Quality Yarn and Grey Cloth. TQM is a really common attack now a twenty-four hours. It is really popular in Japan and USA. There are many definitions of Entire Quality Management. Philosophy behind quality direction which recognizes those client demand and concern ends are inseparable “ It is the common cooperation of everyone in an organisation and associated concern procedures in order to bring forth merchandises and services which meet and hopefully exceed the demands and outlooks of client ”

2.3 ISO-9000 enfranchisement plan

The ISO 9000 refers to a set of quality direction criterions. IT contains four criterions. ISO 9000:2000, ISO 9001:2000, ISO 9004:2000, ISO 19011:2000 ISO 9000:2000 It describes the basicss of quality direction systems and specifies the nomenclatures for quality direction systems ISO 9001:2000 It specifies demands for a quality direction system where an organisation needs to show its ability to supply the merchandise that fulfills client and applicable regulative demands and purposes to heighten client satisfaction. ISO 9004:2000 It provides guidelines that consider both the effectivity and efficiency of the of quality direction system. The purpose of the criterion is to betterment for the public presentation of the organisation and satisfaction of clients. ISO 19011:2000 It provides counsel for the auditing of quality and environmental direction system All these criterions are process criterions non merchandise criterions ISO enfranchisement impacts the bottom line of a house by bettering merchandise quality, efficiency, productiveness and fight.

2.4 Technological DIVERSITY/INFORMATION TECHNOLOGY:

The application of IT in fabric and garment industry can assist them in bettering the overall public presentation. In state like Pakistan it is really of import that fabric industry remain strong and turn continuously as it is the supplier of highest occupations after agribusiness.

Many large fabric units have already adopted IT in their companies in assorted signifiers. They use machineries with latest engineering available in the universe and these machines utilize IT in many countries such as production monitoring, quality monitoring and control, etc

The fabric industry by and large concentrates on planing or fabrication of apparels and besides the undertaking of distribution and usage of the manufactured fabric.

The fabric industry has changed continuously in the last few old ages. It looks at transporting out their concern in systematic manner. For this ground ERP can be used and it plays an of import function. ERP has helped in increasing the quality and efficiency of the fabrication procedure.

The fabrication processes experiences some jobs quiet frequently because of miscommunication and deficiency of communicating these jobs will make the Bullwhip consequence. Bullwhip Effect in a prognosis goaded supply concatenation is caused by fluctuations in demand driving greater buffer stock as we move up the supply concatenation. The root causes root from behavioural and operational miscues due to a deficiency of coaction and information about merchandises and procedures across the supply concatenation. In order to extinguish the Bullwhip Effect, we need to make a Predictable Supply Network which will enable rapid communicating and coordination across the supply concatenation.The Bullwhip Effect is a important job in broad assortment of companies and industries ( Roger D. H. Warburton, 2004 ) .

The term “ Bullwhip Effect ” where a retail merchant ‘s orders to their providers tend to hold a larger discrepancy than the consumer demand that triggered the orders ( Lee, 1997 )

ERP provides a solution by heightening coordination by maintaining an oculus on the supply concatenation, warehouse and logistic. It helps cut down operating cost because it integrates procedures of the concern across sections onto a individual information system. The job of low stock list or reduced operating cost is ruled out. Whenever resource is needed it is available on clip because everything has already been planned

Rapid alterations in economic and concern conditions, along with go oning displacements in consumer penchants, have led to increased market uncertainness, ensuing in E.R.P going a critical resource ( Roy, 2000 ) . Our research examines how E.R.P affects the value of information. That can assist cut down uncertainness about future demand.

Furthermore, critics argue that the fabric industry has disused equipment E.R.P package and machinery. The inability to seasonably overhaul the equipment and machinery has led to the diminution of Pakistani fabric fight. Due to obsolete engineering the cost of production is higher in Pakistan as compared to other states like India, Bangladesh & A ; China.

Components of ERP

2.5 CUSTOMER Service:

The client service for fabric sector carries great importance like the client service for other sectors carry. Particularly, if it is considered that deriving new clients create four times more costs than protecting bing clients from go forthing, it can be seen that the client service plays a great function for the houses. In this survey the impacting independent variables of client service are chosen as effectual ailment handling. By these independent variable, it is investigated that if any differences exist in perceptual experience of client service harmonizing to the Pakistani fabric consumers in the position of gender. In data analysis of this research the SPSS plan is used.

The significance of good client service can be shown in fiscal footings, as it costs at least five times every bit much to win a new client as it does to maintain a current one.

Many companies consider investings in ailment handling as agencies of increasing client committedness and edifice client trueness. Firms are non good informed, nevertheless, on how to cover successfully with service failures or the impact of ailment handling schemes ( Stephen S. Tax, 1998 ) .

Effective ailment handling can hold a dramatic impact on client keeping rates, deflect the spread of damaging word of oral cavity, and better bottom-line public presentation ( Fornell, 1992 ) .

Effective declaration of client jobs and relationship selling are linked closely in footings of their common involvement in client satisfaction, trust, and committedness ( Achrol, 1991 ) ( Morgan, 1994 ) .

Complaint handling schemes are of import peculiarly in pull offing client relationships in Textile industry. Challenges in pull offing quality, combined with the of import function played by clients in the production procedure and grounds that client trueness drives profitableness, make ailment managing a critical “ minute of truth ” in keeping and developing these relationships ( Dwyer, 1987 )

The higher degree of client service quality means higher degree of client satisfaction and consequences in better client trueness and high degree of profitableness ( Ghobadian, 1993 ) .

To reassign the quality to service agencies to fulfill clients ‘ demands. So that the houses draw a bead oning to follow the client oriented attack should find the client demands and tie in the client demands with client service ( Chow-Chua, 2002 ) .

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Weaknesses, Threats And Issues Of Pakistan Textile Industry

Weaknesses of the textile industry•The government is unwilling to provide further subsidies to the textile industry. The government is of the view that the textile industry has been 'pampered" enough and that they have provided the desired amount of incentives and concessions. They think that it is about time the industry resolve its own issues and bring about significant changes to ensure the sustenance and progress of the industry.

•High cost of production. The cost of doing business is the highest in the south Asian region which comprises of:Excise duty imposed on bank servicesExcise duty increased on insurance premiumsIncreased electricity and gas tariff ratesMinimum wages of workers have increased by 33%Rising of interest ratesPakistan fails to impress in the cost comparisons with the regional competitors. In Bangladesh a 42000 spindle mill has a total gas bill per month of Rs 20 lakhs while in Pakistan it is of Rs 60 lakhs. The minimum wage in Bangladesh is Rs 800 compared to Rs. 4000 in Pakistan which has just been recently announced. Likewise, the normal wage that a garment worker demands is Rs. 1500 in Bangladesh compared to Rs. 7500 of Pakistan respectively.

The rising interest rates which have increased by about 150 % have proved very detrimental to the industry. It has discouraged the firms from taking loans from major financial institutions and gave birth to loan defaults which have become very prominent in the badly hit knitting sector.

Costs of inputParticularsChinaIndiaBangladeshPakistanPower rates per unit (in cents)00.93.48.3Water cost per Kilogram0-3.04.7Gas Tariff per MMBTU in dollars0-1.834.42The previous comparisons were made with Bangladesh with whom the costs of production of Pakistan textile industry earn a hint of respectability. Compared to India and China, the gravity of the situation is realized. China is exempted from electricity and gas tariffs while these rates are very low in India. Because of lower input costs the regional competitors products are cheaper and the Pakistani textile products are unable to compete with them as the quality is also more or less same.

•Lack of significant machinery making capacities. Nearly all types of machinery have to be imported which proves to be a significant burden on the economy. Also most of the machineries which have been previously imported have become obsolete or in the process of becoming obsolete and there is a continuous need for upgradation.

•Unskilled workers still used in the capital intensive part of the industry which leads to greater efficiency and lower productivity. Designing and training institutes have been established by the government and textile associations to train these workers and improve...

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