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The Financial Express

Fair procurement deals for apparels  

| Updated: February 27, 2021 22:19:22


Fair procurement deals for apparels   

Apparel business model has been in need of a reset for quite some time. This is mainly prompted by, among others, the need for a shared responsibility among buyers and sellers, especially when it comes to buying from the supplying countries who are often found to go by the rigid terms of  overseas big buyers. As for Bangladesh, although the country has come a long way in bringing substantial improvements in workplace culture along with fulfilling  a host of compliance needs of the buyers, these improvements seem to have very little or no bearing on the overall RMG business model. Bangladesh readymade garment supply chain still suffers from lack of 'shared responsibility' on the part of global buyers. 

There is now a move to restructure the state of things which many observers believe will bring about this much-needed shared responsibility. A FE report published last week says nine trade bodies from Bangladesh, China, Cambodia, Myanmar, Vietnam and Pakistan agreed to join a new initiative, seeking better procurement practices in the global textile and garment business. These six countries represent more than 60 per cent of the world's apparel exports. The initiative was taken up by the STAR Network, supported by GIZ FABRIC, the International Apparel Federation (IAF) and the Better Buying Institute. The objective is to frame plans to establish a common position on payment and delivery conditions in the apparel industry through joint effort by manufacturers of exporting countries. The initiative dubbed 'Manufacturers Payment and Delivery Terms' is meant to better connect supply and demand, reduce waste and improve profitability. It recognises that buyers and suppliers must strengthen their relationships to both support the pandemic recovery and prepare for possible supply chain disruptions in future. In collaboration with various global stakeholders, the STAR Network and its associates are set to create a safe space for manufacturers to jointly put in place a set of recommendations and best practices related to payment and delivery conditions.

It is pretty well known that even in the pre-pandemic times, apparel manufacturers in Bangladesh had to often give in to unreasonable calls from buyers for discount or order cancellation, besides agreeing to other unfair terms including low prices. There were talks and workshops in the country urging for fair deals and avoidance of unwarranted low price from the buyers, but things have not changed-- mostly for the small and mid-size apparel exporters.

Fair buying practice is the call of the hour. While improvements in purchasing practices are essential for industry-wide change, an equally important aspect is the reliance of millions of workers on apparel manufacturing, most of whom in the developing world are either underpaid or are in a state of job uncertainty due mainly to the prices offered at unreasonable rates. One hopes the initiative gets support from all stakeholders including the buyers for the sake of a healthy and thriving global apparel industry. 

 

 

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