Can Automation Save the Bangladeshi Garment Industry?

Can Automation Save the Bangladeshi Garment Industry?

December 10, 2018
Lisa M. Spencer

Second only to China in the world’s clothing export markets, Bangladesh focuses on efficiency in its textile factories to defend its market in the face of increased competition from Cambodia, Vietnam, Myanmar, and some African countries.

Automation helps Bangladesh modernize apparel factories, with two workers able to do the work of 15.  These improvements help offset increasing costs, as the government mandates a 51% wage hike, and Western brands demand better fire and safety standards in the factories.

Video Spotlight: How Automation Impacts Garment Workers in Bangladesh

This post is based on the Nikkei Asian Review article, Bangladesh fights for future of its garment industry, by Mitsuru Obe, November 4, 2018, and the YouTube video, How Automation Impacts Garment Workers in Bangladesh, by Electric Runway, June 7, 2018. Image source: igor kisselev / Alamy Stock Photo.

Discussion Questions:

1. How does the cost of production in Bangladesh compare to that of other countries, and how does it impact the viability of its apparel industry?

Guidance: Currently, labor costs in Bangladesh remain low by global standards, with an average monthly wage of $101, compared to $518 in China.  However, some African countries like Ethiopia have average Continue reading →

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Tariffs Shake Up the Supply Chain

Tariffs Shake Up the Supply Chain

December 9, 2018
Lisa M. Spencer

U.S. tariffs on $200 billion of Chinese goods may lead to a permanent relocation of manufacturing companies from China to other Southeast Asian countries.

Some American businesses are looking at relocating manufacturing facilities to places like Thailand or the Philippines.  Some Chinese companies are also considering opening up operations outside their homeland.  One such business may build a massive tire factory in the Philippines to avoid U.S. tariffs.

Some speculate that the tariffs may lead to significant and permanent changes in the global supply chain.  Interestingly, however, Chinese exports were up by almost 16% in October, the first full month of tariff implementation, with companies rushing to send goods to the U.S. before the tariffs rise from 10 percent to 25 percent at the end of the year.

Video Spotlight: China’s exports are still soaring despite the trade war

This post is based on the Industry Week post, Manufacturing exit from China to dodge U.S. duties gains pace, by Angus Whitley, November 7, 2018, and the CNN article and video, China’s exports are still soaring despite the trade war, by Daniel Shane, November 8, 2018. Image source: Shutterstock / Nerthuz.

Discussion Questions:

1. How Continue reading →

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