Bangladesh must prepare for shorter production runs

The world has too much clothing. Just recently, the European Union agreed to ban the destruction of unsold clothing as part of a drive towards reducing waste and improving levels of reuse and recycling. The proposed new law arrives amid growing concerns about excess clothing in the EU Bloc, an issue emerging from the rising trend of online purchasing and high rates of product returns.

The EU is not the only trading area where there are concerns about the amount of clothing being imported but not being sold. The argument is that this is a waste of valuable resources, not to mention a source of significant carbon emissions.

While these regulatory developments are happening, suppliers in Bangladesh are seeing another trend that may well be related: requests from customers for shorter production runs. This is a big deal for a country like ours, with its garment industry having built its reputation on the ability to deliver major orders in a relatively short timeframe.

Read more

Environmental compliance may weed out smaller garment factories

For context, a large production run for, say, jeans might be considered to be 10,000-40,000 units (or pairs of jeans). A short run would be more like 500-1,500 units. As one can see, there is a huge difference, with clear implications for garment manufacturers. No manufacturer wants its machinery to be lying idle for long periods of time.

At present, we are already seeing market demand for shorter runs. There is also anecdotal evidence that manufacturers are unwilling to accept such orders for a variety of reasons. For example, they may not make financial sense as larger manufacturers are designed to operate at full capacity (or close to it) in order to leverage the benefits of scale economies.

At present, we are already seeing market demand for shorter runs. There is also anecdotal evidence that manufacturers are unwilling to accept such orders for a variety of reasons. For example, they may not make financial sense as larger manufacturers are designed to operate at full capacity (or close to it) in order to leverage the benefits of scale economies.

There is some irony here. I wrote recently about larger manufacturers being the future of our industry, simply because they will be the only players financially capable of meeting impending requirements related to sustainable production. And yet, we may see more and more of them being asked to accept smaller orders – which they were not designed to handle.

More broadly, there are challenges regarding production and logistics in terms of shorter runs in Bangladesh. We are not geared for such runs in the same way that some manufacturers in Europe are. In countries such as Italy, the implementation of automation and digitisation to facilitate short-batch production is far more advanced than it is in Bangladesh and in other parts of Asia.

Read more

For the RMG industry, being sustainable is easier said than done

Will shorter runs be permanent? It is hard to say right now. For the time being, however, I see the demand for shorter runs becoming more and more common. One reason for that is the rising concerns about the global economy. In much of Europe, we are seeing high inflation rates which are affecting food and energy prices – two necessity products. If people are forced to spend more on energy and food, they have less money for luxury items. To some extent, clothing and fast fashion fall under this category.

The second reason for shorter runs is linked with sustainability and environmental concerns. As outlined previously, the EU is cracking down on this issue and clothing retailers will be looking at their business models to see how they can better handle inventory.

Already, the world's fastest growing fashion retailer, Shein, is using short runs, often of just a few hundred units, to test the market for seasonal items. This keeps inventory levels down, helping to reduce waste in Shein's supply chains. I believe other fashion brands will be looking at this model to see if there aren't any lessons to learn. This model, it should be noted, relies on a flexible, highly responsive garment supply chain close to Shein's headquarters in China.

Read more

There is a way to decarbonise RMG manufacture

I don't think we will see long runs disappear completely, but I do believe we will see more and more demand in the market for shorter runs. This places further pressure on Bangladeshi garment manufacturers to adapt and innovate. We will also need our logistics infrastructure to evolve, becoming more flexible and nimble.

Some see a desire for near-shoring as a threat to Bangladesh, and a move towards shorter runs could be beneficial for our competitors in Europe (or, say, Mexico for the US market). There is some logic to this argument; however, Bangladesh continues to beat most of our competitors on price and this remains a key factor for brand-buying teams.

Finally, there is the issue of garment workers. Could shorter production runs lead to less employment in our industry? All other things being equal, this is likely to be the case. However, our industry can mitigate this by better gearing up for a more streamlined, responsive industry as the future unfolds and fashion brands seek greater efficiencies in their supply chains. Shorter runs could be an opportunity to evolve our industry into something better and more sustainable.

Mostafiz Uddin is managing director of Denim Expert Limited. He is also the founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).