supply chain critical success to Pakistan textile industrys



Textile sector is considered one of the main sources of income for Pakistan's economy. Textile exports were Rs or $ 8.6 Billion in 2004-05, which are 60% of the total exports of Pakistan. It is the largest employment sector, accounting for 38% of total industrial employment. Garments are the major growing sub -sector of textiles and account for 25% in total textile exports. The sector is also the largest employer of manpower in industrial sector (Aftab A. Khan, 2010).

Until 2005, the importing countries had imposed a textile quota for countries exporting textiles garments. The removal of textile quota has created new opportunities for competing in global market. This also means that countries with inefficient technologies, poor supply chains and inability to communicate with their global supply chain partners will be at a great disadvantage.

Pakistani textile industry will have to adapt itself with the new global market challenges and create both efficient and responsive supply chains to meet the new business environment. Many of the forward looking textile companies have quickly adapted to these challenges and have installed state of the art machines, developed and acquired information technologies that can seamlessly integrate with the global customers and benefited from the change. The pace of the changes is however, far from satisfactory and it is important to evaluate the industry to identify the performance parameters that would determine the future success and ensure a significant market share for Pakistan's textile garments.

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Efficient Supply chain management in the textile sector requires availability of the basic raw materials, infrastructure to ensure cost effective supply to the industrial centers, and effective and efficient manufacturing, meeting new technology challenges to develop products to meet the requirement of highly demanding customers. The information is life blood of any supply chain. In a global market the quality of this information acquires even greater importance. Ability to create visibility of the business to potential customers, integrating with the customers to determine their requirements and meeting their demand with the minimum lead time are factors that allow the business to compete in the global market.

An investigation of textile supply chain to determine the performance parameters that will be critical to success of the supply chain will provide much needed input to the textile sector and help in removing some of the barriers to competing in the global market.

This study aims to fill this gap. The research project proposes to dimension the supply chain and determine the performance parameters that can mean success for the Pakistani textile industry.


The Purpose of this research is to investigate the elements of supply chain that would be critical to the success of Pakistan's textile industry in the competitive global market. As discussed in literature review we have identified the critical parameters as quality management, technological diversity, information technology and customer service.. To test the validity of these variables we propose the following hypotheses for the research project


To test the validity of the variables we propose the following hypotheses for the research project


Quality management has a significant impact on value chain performance


Technological diversity and introduction of modern technology will have positive effect on the value chain performance


Information technology is has significant impact on value chain performance


Customer service has significant impact on value chain performance


This project begins with an introduction to the problem. An intensive literature review of the elements of supply chain and the working of Pakistani industry was then carried out to identify areas for the research study.

It became clear that majority of the textile sector companies are continuing with old practices, using old technologies and machinery, many do not have access to the new supply chain information technologies such as customer relationship management and or enterprises resource planning software.

Quality play a very important part of any kind of product specially textile product. QM is an integrated organization thinking and set of practices that facilitate and emphasizes, among other things, constant improvement, conference clientele necessities, reducing revise and rework, long-range thoughts, increased member of staff participation and collaboration and joint effort, process redesign, competitive benchmarking, team-based problem-analysis and its solution, constant depth of results, and close contact with suppliers (Ross, 1993).

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The quality management programs are not seriously implemented and as a result the quality of material exported often suffers and results in rejection of supplies and penalties stipulated in export contracts.

SCM is a kind viewpoint to control the entire current of a distribution channel from vendor to end consumer or customer. A lot of companies believe Investment in dealing with complains as means of building customer faithfulness and increasing commitment to the customers (Stephen S. Tax, 1998). Effective resolution of customer problems and relationship promotion are connected strongly in terms of their mutual concern in client approval, belief, and promise (Morgan, 1994).

The customer service dimensions of the industry in general also leave much to be desired. The practice of customer service is not a strong point for local industry serving local customers. In a global business customer service dimension has become one of the key drivers for supply chains and needs to be incorporated into the export strategy.

The literature review and needs for further investigation identified the hypotheses for collecting and analyzing the data. We developed a questionnaire to survey the textile manufacturers and evaluate their concerns and experience. The data collected was then analyzed statistically using appropriate research methods.

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

The data analysis and results are presented in Chapter 4. The last chapter discusses the outcome of the research projects and conclusions drawn from the study and suggests topics for future research. The supplementary data are presented in the Appendices.


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


Value chain performance variable used for this study is the independent variables while Quality management (I.S.O 9000), Customer service, Technological Diversity and information technology are the dependent variables. Now here all the variables are explained in detailed in the context of different author's views.


A supply chain is characterized by the flow of goods, services, money, and information both within and among business entities including suppliers, manufacturers, and customers. It also includes all types of organizations engaged in transportation, warehousing, information dealing out, and equipment management. Sourcing, procurement, fabrication scheduling, developing, arrange processing, inventory board, warehousing, plus customer service are the functions performed throughout the supply chain. The ultimate goal of SCM is to meet customers' demand more efficiently by providing the right product, in the right quantity, at the right location, on the right time, and in the right condition (Asli Koprulu1, 2007)

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

Every company's business consists of a collection of activities undertaken in the course of designing, producing, and marketing, delivering and supporting its product or service. All of the various activities that a company performs internally combine to form a value chain.(Porter, 1985).

Supply chains are some times referred to as value chains activities a term which reproduce the thought that value is added as goods and services steps forward through the series. Supply or value chains are typically comprised of separate business organization, rather than just a single organization. Moreover the supply or value chain has two components for each organization: a supply component and a demand component. The supply component starts at the beginning of the sequence and finish with the internal operation of the association. The demand section of the chain starts at the point where the association yield is delivered to its instantaneous clients and end with the final customer in the chain (stevenson, 2005-006)

In Pakistan textile SCM is the synchronized set of techniques to prepare and implement all steps in the global network used to get raw materials from vendors, change them into finished goods, and deliver both goods and services to consumers. Under the role of SCM value chain activities just like wide information sharing, customer services include lead time and complaint handling and as well quality of the product and technological diversity play an important role. The goal of supply chain management is to link all components of the supply chain so that the market demand is met as efficiently as possible across the entire chain.

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Pakistan is one the best textile industry of the world. Pakistan is at the rank of 4th in the producing cotton and counted at the rank of 3rd in the consuming of the cotton. companies which based on cotton contribute over sixty (60%) percent of the total export and almost forty six percent (46%) of the total manufacturing products and also it is important in the provision of employment to about thirty eight percent (38%) to those who are the labor for the manufacturing marketplace. As we all know that the availability of the labor which is relatively cheap and the cotton as raw material play a vital role in the expansion of the Pakistan cotton textile industry. The recent circumstances posses' challenges firstly to maintain its global position and secondly to augment its market share by both rises in volume as well as raise in unit values. The unit value can be amplified only improve primary activities in supply chain management like reduce cost which is associated with raw material parts and components and consumable goods from vendors receiving, storing and disseminate inputs from suppliers assessment and inventory management operations activities, distribution activities, sales marketing and customers services play an important role in textile value chain activities. (jica, 2006-07)

The Value Chain in Textiles


One of the leading industry of Pakistan is Textile industry which is considered as a vital supply of export, jobs and earning. It also performs to enhances value addition to the one of the growing sector of the economy, the manufacturing sector.. As we mentioned in the introduction, although the message of quality has, in the end, been very well received and understood by companies, the message of improvement of SCM continues to be relatively sparse (Chandra, 200).

In this period of quick technological changes and innovations, each and every client has become aware of quality of the materials. Now a day consumers and costumers want the guarantee of quality either through which product has designed or the personality of that product which is going to provide you. Due to this inclination all over the world the marketers are offering products with high quality design condition so they are focused on the image of the marketing. Excellence and quality means both producing products to specification and meeting customer's expectations; the need of customers becomes a key input to total quality management (Richard Reed, 1996). The answer for consumer demand has been given by ISO 9000 through which the organizations can give surety to customers for their goods' high quality and by Coping with it "ISO 9002" Quality Award has achieved by many Textile Mills in Pakistan which gives the international recognition to those textile mills as the producer of High Quality Grey cloth and Yarn. TQM is a very common approach now a day. It is very popular in Japan and USA. There are many definitions of Total Quality Management. Philosophy behind quality management which recognizes those customer need and business goals are inseparable "In any association and associated trade processes it is the mutual cooperation of every person to fabricate products and services which meet and hopefully exceed the needs and hope of the client"

2.3 ISO-9000 certification program

The ISO 9000 refers to a set of quality management standards. IT contains four standards. ISO 9000:2000, ISO 9001:2000, ISO 9004:2000, ISO 19011:2000 ISO 9000:2000 It describes the fundamentals of quality management systems and specifies the terminologies for the system which manage the quality ISO 9001:2000 specifies necessities for this system where an organization needs to demonstrate its ability to provide the product that fulfills customer and applicable regulatory requirements and aims to enhance customer satisfaction. ISO 9004:2000 It provides guidelines that consider both the efficacy and competence of the system which manage the quality. The aim of the standard is to improvement for the performance of the organization and satisfaction of customers. ISO 19011:2000 It provides guidance for the auditing of quality and environmental management system All these standards are process standards not product standards ISO certification impacts the bottom line of a firm by improving product quality, efficiency, productivity and competitiveness.


The textile and garment industry can improve the overall performance by using the technique of IT. In Pakistan it is very important that textile industry should grow continuously because it is a big source of jobs after agriculture.

Lots of Pakistan textile units are using IT in their companies in various forms. They use Information Technology in various fields like quality monitoring, production monitoring, and control, etc

The textile industries usually give attention to on scheming or designing of clothes and as well the duty of delivery and use of the manufactured textile products.

In the last few years that industry has changed constantly and performing its tasks in a systematic way. For this cause ERP can be used and it performs an imperative role plus the excellence and effectiveness of the manufacturing procedure has augmented by this ERP.

The Bull Whip problem takes place due to lack of communication the industrialized process experience a few problems quiet often and these problems create the Bull Whip effect. The variation in demand driving greater buffer stock when the inventory is moved up or down.

The behavioral and operational miscues occur because of inappropriate teamwork and information about goods and process across the supply chain management.

In order to eliminate the Bullwhip Effect, We can create rapid communication and coordination across the supply chain that we require to be expected. The Bullwhip Effect is a major problem in wide variety of companies and industries (Roger D. H. Warburton, 2004).

The "Bullwhip Effect" takes place when the retailer orders to their supplier because the retailer does not know the demand of customer that generates the orders (Lee, 1997).

Enterprise resource planning keeps an eye to on the supply chain it provides the solution it all becomes possible by proper coordination such as stockroom and logistic etc.

Enterprise resource planning is helpful to reduce operation cost because it incorporates the process of organization across departments onto a single system. It also saves the operating cost and solves the problem of low inventory. The Enterprises resource planning provides the all information whenever it is required because every thing has already been planned.

Rapid changes in economic and business conditions, along with continuing shifts in consumer preferences, have led to increased market uncertainty, resulting in E.R.P becoming a critical resource (Roy, 2000). Our research examines how E.R.P affects the value of information. That can help reduce uncertainty about future demand.

Moreover, critics dispute that the cloth industry has outdated tools E.R.P software and apparatus. The lack of ability to timely modernize the tools and machinery has led to the decline of competitiveness of Pakistani textile. Due to outdated machinery the price of fabrication is elevated in Pakistan as compared to other Asian countries like china, Bangladesh & India.

Components of ERP


The customer service for textile sector carries great importance like the customer service for other sectors carry. Especially, if it is considered that gaining new customers create four times more costs than protecting existing customers from leaving, it can be seen that the customer service plays a great role for the firms. In this study the affecting independent variables of customer service are chosen as effective complaint handling. By these independent variable, it is investigated that if any differences exist in perception of customer service according to the Pakistani textile consumers in the view of gender. In data analysis of this research the SPSS program is used.

The importance of good quality customer service can be shown in economic terms, as it costs at least five times as much to attract a new customer as it does to keep a existing product.

lots of companies believe that investments in criticism managing as means of rising customer promise and build customer faithfulness. Firms are not well knowledgeable, however, on how to deal effectively with service failures or the effect of criticism managing strategies (Stephen S. Tax, 1998).

Efficient moan behavior can have a remarkable effect on consumer retention rates, turn aside the spread of destructive word of mouth, and get better the bottom-line performance (Fornell, 1992).

Flourishing resolution of purchaser complaints and promotion associations are linked muscularly in terms of their general concern in customer satisfaction, trust, and faithfulness (Achrol, 1991) (Morgan, 1994).

Disapproval or criticism behavior strategies are significant principally in managing customer dealings in Textile industry. Challenges in magnifying the quality, combined with the chief role played by customers in the production process and support that customer loyalty drives profitability, make moan behavior a critical "moment of truth" in maintaining and raising these interactions (Dwyer, 1987)

The higher level of customer service quality means higher level of customer satisfaction and results in better customer loyalty and high level of profitability (Ghobadian, 1993).

To transfer the quality to service means to satisfy customers' requirements. So that the firms aspiring to adopt the customer oriented approach should determine the customer requirements and associate the customer requirements with customer service (Chow-Chua, 2002).