“The impact of efficient sourcing in maximizing productivity

And
Strategies to improve for optimum sourcing in spinning industry”

1
Bangladesh University of Professionals

“The impact of efficient sourcing in maximizing productivity

And
Strategies to improve for optimum sourcing in spinning industry"

Submitted to:
Mohammad Rajib Uddin
Assistant Professor
Department of Business Administration
Bangladesh University of Professionals

Submitted by:
Md. Al-Amin
Roll Number: EV 16013010
MBA (professional) Batch-13
Major in Supply Chain Management
Department of Business Administration
Bangladesh University of Professionals

Submission date- 16th November, 2018

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16th November, 2018
Mohammad Rajib Uddin
Assistant Professor
Supervisor
Faculty of Business Studies (FBS)
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka- 1216

Subject: Submission of Dissertation Paper.

Dear Sir,
With due respect and humble to inform you that it is my pleasure to submit this report on
the impact of efficient sourcing in maximizing productivity and Strategies to improve for
optimum sourcing in spinning industry" as requirement for my Masters of Business
Administration Degree.

This report provides a picture which describes the present situation of raw cotton and
machineries sourcing and strategies to improve for maximizing productivity in Spinning
Industry.
I made sincere efforts to study related materials, documents, observe operations
performed and examine relevant records for preparation of the report.

I would like to give you my gratitude for the help you provided in completion of the report.
I sincerely believe that you will find this report very significant and informative.

Therefore, I pray and hope that you would be kind enough to accept report for evaluation
and oblige thereby.

Your Sincerely,
Md. Al- Amin
Roll No: EV16013010
Batch: 13 (MBA Professional)

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 Declaration of Authenticity

I, Undersigned, Hereby declare that the work presented herein is genuine work done
originally by me and has not been published and submitted elsewhere for the requirement
of degree program. Any literature, Data or works done by others and cited within this
study has been given due acknowledgement and listed in the reference section.

…………………………..
Md. Al- Amin
Roll No: EV 16013010
Batch No: 13th MBA Professional
Bangladesh University of Professionals

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 Certification of the supervisor

This is to certify that the dissertation the dissertation paper on “The impact of efficient
sourcing in maximizing productivity and Strategies to improve for optimum sourcing in
spinning industry” is the eventual record of project done by Mr. Al- Amin for practical
fulfilment of the requirement for the degree of Masters of Business Administration (MBA)
from the Bangladesh University of Professionals (BUP).

This report been carried out under my guidance and is a record of successful work.

Supervisor

…………………………..

Mohammad Rajib Uddin

Assistant Professor
Bangladesh University of Professionals

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 Acknowledgements

First of all, I remember the Almighty Allah for giving me the opportunity to complete this
report with my good health and mind.
I sincerely express my respect with heartfelt gratitude, indebtness and profound
appreciation to my respected teacher and supervisor Mohammed Rajib Uddin, Assistant
professor, Faculty of Business Administration, Bangladesh University of Professionals,
Mirpur Cantonment, Dhaka 1216 for his scholastic guidance, Valuable suggestions,
sincere supervision, encouragement and providing facilities and support to conduct the
research work and preparation of document of the thesis.
I express my heartfelt gratitude and deepest appreciation to all other teachers of the
department of Business Administration for their suggestions and encouragements during
research work.
I am thankful to all the participant who answered the questioner and for their help during
research work.
Finally, I owe a debt of gratitude to my beloved mother Rojina Akter and Father Shohoruf
Uddin who sacrificed all their happiness during the entire period of my study. I am also
grateful to my brothers, sisters and relative whose blessings and inspirations opened the
gate and paved the way to my higher studies. Thanks to friends and well-wishers, for their
cooperation and good wishes.

The Author

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Chapter 1

Introduction

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 “The impact of efficient sourcing in maximizing productivity
And
Strategies to improve for optimum sourcing in spinning industry”

INTRODUCTION

This paper shows the studies conducted on efficient sourcing aiming to make the sourcing
policies more responsive as well as productive. Among all supply chain drivers sourcing
plays crucial role on minimizing production cost and raising profit in a higher extent. To
make this study more reliable and informative I extracted data from different sources like
Supplier Organizations, intermediaries, Procurement professionals and from different
Journals published worldwide.

I have taken under consideration the environmental factors which are highly related to
sourcing and tried to present sourcing strategies in a more sustainable way.

The Spinning industry is highly dependent on RMG industry. I must say, the more
developed the RMG sector is the more likely our spinning sector gets benefited and if our
spinning industry can produce quality yarn so RMG sector don’t have to rely on yarn
import.

This chapter provides a quick introduction of the research and discusses about the
contents of this report.

1.1 Background of the Study:

All starts with a significant decision made by Donald trump in May 29. 2018. The guardian
reports “The White House has taken aggressive new steps in its effort to reduce a $337bn
trade deficit with China, announcing that it will impose a 25% tariff on $50bn of Chinese
goods containing “industrially significant technology”. (Guardian, 2018). In apparel
industry China is the market leader. According to Dhaka Tribune. The global market for
clothing products came down to $444 billion in 2016 from $450 billion in 2015. Although

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China still retains its position as the top exporter of apparel products with $161 billion, its
market share slid to 36.4% from 39.3% last year. (Dhakatribune, 2017). But now, as
production costs increased at significant rate buyers are shifting their Supply Chains from
China. “Lennox International which makes HVAC systems is moving production to
Southeast Asia” (CBS NEWS, 2018)

Bangladesh held on to its status as the second biggest apparel supplier in the world in
2017, accounting for 6.5 percent share of the market, according to data from the World
Trade Organization (WTO). (DailyStar, 2018). Now it’s an opportunity for Bangladeshi
RMG manufacturers that they attract new buyers, fulfill demand and retain business with
them for long time. Here India and Vietnam is also on the verge of capturing this
opportunity. Dhaka tribune reports. Bangladesh's closest competitor, Vietnam, narrowed
the gap to third with a 0.70% year-on-year increase in its market share to 5.5%.
(Dhakatribune, 2017) And India's market share came down to 4% from 4.1%, while
Cambodia and Turkey retained their shares of 1.4% and 3.4% respectively.
(Dhakatribune, 2017)

Bangladesh can bit India and Vietnam in a lot of ways. One way is ensuring high
productivity through minimizing cost of the production. In minimizing cost of the production
efficient sourcing of fabrics and yarn for knit composite is crucial. Spinning Mills deliver
knit composite yarn to apparel industry and if spinning mills can supply quality yarn in a
cheap rate then our ultimate goal of capturing buyers who left china because of high cost
will be successful.

Our RMG industry is already getting more orders from buyers. According to The Daily
Star “Bangladesh is becoming a more popular apparel sourcing destination for Western
retailers thanks to the ongoing US-China trade war, said a latest survey by the Asia
Inspection (AI), a Hong Kong-based global inspection and accreditation body.” (Refayet
Ullah Mirdha, 2018)

“But we cannot grab the market share which China is losing. As a result, Bangladesh's
gap with its close competitors is coming down gradually,” Khondaker Golam Moazzem,
additional research director of Centre for Policy Dialogue. (Dhakatribune, 2017)

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1.2 Problem Statement:

As labor costs (Wages) are rising day by day which mounts production costs, is there
any other way that might help to reduce production costs? This study address the
feasibility of efficient sourcing.

1.3 Research Objective:

The primary objective of this research is to find out the ways that would help to reduce
sourcing expenditure. To achieve the primary objective this research will pursue on the
following secondary objectives.

i. To adopt sustainable sourcing practices in spinning mills.

ii. To find out successful procurement negotiation practice.
iii. To digitalize the process to increase efficiency.

1.4 Research Question:

1. Is there any relationship between productivity and efficient sourcing?

2. What makes sourcing to be more efficient?

1.5 Hypothesis:

H1 Adopting and applying efficient sourcing strategies will minimize overall sourcing cost
and will maximize productivity.

1.6 Limitations

This report is highly dependent on data extracted from secondary sources like
researches, articles, books, TV news and from different websites. As international
sourcing carried out in almost every country but some mode of it varies every national
border. This study needs more time and monetary expenditure to make it more
informative and vivid which leaves some room for possible error.

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 Chapter 2

Literature Review and Theoretical Framework

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Theoretical Framework

To form a framework this study first lists the findings from different related literatures’ and
then annualizes the differences between literature review and objectives.

2.1 Literature review:

The keywords related to the topic discussed first and findings from several related studies
comes up subsequently for better understanding.

2.1.1 Spinning industry:

“Bangladesh is the second largest readymade garment (RMG) exporter country in the
world. The primary textile sector (PTS) is producing yarn and fabric needed for
readymade garment sector (RMG). PTS is the backbone of clothing industries because it
provides the backward linkage for both the woven and knit sector .This sector provides
the yarn towards the clothing industries where yarn is the primary raw material of these
industries to produce fabric” (Khan, 2018)

Vice President of BTMA (Bangladesh Textile Mills Association) Mohamad Ali Khokon
says “Our spinning sector has improved a lot. Now we are producing around 95% yarn
for knit and 35-40% for woven and 100% yarn for terry towel. It is helping our RMG
industry to reduce the dependency of yarn import and to save time in order to meet on-
time delivery of goods. In our total export USD 28 Billion, Primary Textile Sector (PTS)
contribution is around USD 16-17 Billion. We are getting only Cutting and Making (CM)
benefit in our RMG business. Our PTS has a great contribution in this regards. (Khokon:,
2018). Textile sector is contributing more than 12% in GDP and over 81% of the export
earning comes from textiles and textile-related products. Bangladesh Textile Mills
Association (BTMA) is the national trade organization representing yarn, fabric
manufacturers, and textile product processors mills of the country under private sector.
(today, 2018)

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Figure 1: Raw Materials used in 2017 (BTMA, 2018)

Table 2: Bangladesh yarn production and consumption pattern. Sources:

Bangladesh Textile mills Association (BTMA), Fiscal Year: (July- June), Consumption
=Production + Import.

Calendar
year Production (1,000 ton) Consumption (1,000 ton)

2014/15 613 960

2015/16 688 980

2016/17 1,166 1,461

2017/18 1,115 1,394

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Bangladesh mainly imported their required yarn from India to fill the demand-supply gap.
But the spinning sector of our country has been witnessing robust growth over the past
decade due to growing demand for yarn from both the domestic textile market and the
export-oriented ready-made garment (RMG) sector as a result import of yarn is reducing
year on year which states a strong suggestion that our spinning sector is becoming self-
sufficient and carryover of domestic yarns is becoming more strong. After the change
recent change in the GSP rules, the yarn import may increase significantly in the following
years. (Express, 2017)

According to BTMA officials” Bangladesh spinning industries can meet up 90% demand
of knit wear garment industries. On the contrary we are able to meet 35-40% demand
woven oriented demand. Maximum demand is fulfilled by India. As a result we take say
that India is the main Competitor for Bangladeshi spinning Industries’’.

Figure 2: Annual Yarn import report of Bangladesh. (Source, USDA)

“India is our economic competitor. They adopting dumping, anti-dumping policy. When
cotton demand is high then they increase price and when our yarn production is sufficient
then they supply us yarn very low prices. Our government should impose an anti-dumping
law to protect our local spinning industry. The government should take the counter policy
to protect our textile industry” (Khokon:, 2018).

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“We have taken many initiatives to make our business sustainable. We have increased
every factories productivity by adjusting some additional technology with current
machinery. Our productivity is now increased around 10% with almost same overhead
cost. For power saving, we have also instructed some modern machinery and techniques
for less power consumption. Every factory have a capacity of 1,200,000 gallons reserved
water for fire safety and also, have rainwater harvesting facilities.” (Khokon:, 2018)

2.1.2 Sourcing:

Sourcing is the set of business processes required to purchase goods and services.
Managers must decide whether each task will be performed by a responsive or efficient
source and whether the source will be internal to the company or a third party. (Chopra &
Meindl, 2013)

The key element in the development of a successful partnership between a company and
a supplier is the establishment of linkage. The most important linkage is information flow;
companies and suppliers must communicate about product, cost, about quality and so on
in order to coordinate their activates (Russell & Tylor, 2017).

Global sourcing is the practice of sourcing from the global market for goods and services
across geopolitical boundaries. Global sourcing is often designed to deliver products or
services using global efficiencies. These efficiencies include low-cost skilled labor, low-
cost raw materials and other economic factors such as tax breaks and low trade tariffs.
(Wen, 2017). Global sourcing is often associated with a centralized procurement strategy
for a multinational, wherein a central buying organization seeks economies of scale
through corporate-wide standardization and benchmarking (Food., 2018)

Finding a rock-bottom price is not the problem, but landing great costs while avoiding
distance, timing, quality, and language problems can be challenging. If you ignore or
mishandle these risks, they can result in cost penalties and distracting inefficiencies.
(Leong, 2018)

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2.1.3 Knowledge required for efficient sourcing:

A survey conducted by Arla Food ltd. to develop a global sourcing strategy which came
up with 7 steps. (Food., 2018)

1 Preliminary Research
2 Market and Supplier Evaluation
3 Strategy Development
4 Selecting the Sourcing Process and Suppliers
5 Implementation
6 Performance Monitoring and
7 Conclusion

In preliminary research a number of supplier to be set up to pursue the expected results

of the sourcing project. Market and Supplier Evaluation is the stage to identify potential
new global suppliers, the enterprise will develops a detailed list of supplier selection
benchmarks, which is used to select the supplier that best meets the requirements.
Strategy Development is deciding where to buy while minimizing risk and costs is how
you develop the strategic sourcing strategy.

Selecting the Sourcing Process and Suppliers happens during the sourcing process, the
common used method is to use a Request for proposal process for soliciting bids. In
implementation phase the contract is already signed, suppliers are expected to support
the company in making the implementation phase run as smoothly as possible. The
performance of suppliers can be measured by response to the procedures and resources
that are applied by supply partners. Independent measuring is also possible. Supplier’s
performance measurement should be performed periodically and recorded on a regular
basis. (Mawson Global, 2015)

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Global raw cotton producers are presented in the table below:

2.1.4 Sustainable procurement practice

Reflecting broader concerns to achieve sustainable development, sustainable

procurement has recently acquired a high degree of salience in policy circles
internationally (Brammer. S, 2011). Sustainable Procurement is a “process of acquiring
goods, works and services from a supplier that provides the optimum combination of
whole life costs and benefits to meet the customer’s requirements. It is a process whereby
organizations meet their needs for goods, services, works and utilities in a way that
achieves value for money on a whole life basis in terms of generating benefits not only to
the organization, but also to society and the economy, while minimizing damage to the
environment” (Clinton.N, 2017) (CIPS Knowledge Summary December 2008 issue, also
see Greengage Consulting –Sustainable Public Procurement Policy, April 2004. p6, &
Aurora Energy’s Sustainable Procurement Policy Document version 3; September
2008)”.

Comparatively large companies are increasingly putting more emphasis on sustainability

procurement. A global study conducted by Eco Vadis revealed that 97% of 120 supply
chain professionals are placing a higher level of importance on sustainable procurement

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than before. In addition, Fortune 500 companies who have taken the lead in sustainable
procurement have experienced great returns (Clinton.N, 2017). Sustainable procurement
is also an increasing trend to a lot of developed countries, with European countries and
the US having put in place regulations that formulates sustainability in a company’s
operations. Examples of such regulations include the Dodd-Frank Act on Conflict
Minerals. (Act, 2010)

2.1.4.1 Benefits of sustainable sourcing

The ways a sustainable sourcing practice can be beneficial is it helps to have control over
costs by adopting a wider approach to whole life costing, improve internal and external
standards through performance assessments, comply with environmental and social
legislation, manage risk and reputation, build a sustainable supply chain for the future,
involve the local business community, the existence of a defined procurement strategy
and the value outcomes - the improved social, environmental and economic impacts,
compliance with national and international sustainability standards and regulations, to
have a better understanding of risks in the supply chain, contributes to the sustainable
organizational strategy, better commercial/economic decisions from understanding of
issues that impact on the procurement decision, potential benefits in a long term
relationship, innovation, better materials, alternatives, technical advice, emerging
technologies, more effective evaluation of proposals and bid and more ‘sustainable’
source of supply. (Kalubanga, 2011)

The high growth of the human populace is the reason of the depletion of natural resources
and pollution, which resulted in issues such as famine, smaller economies, soil erosion
and water shortage,. On top of that, carbon dioxide emission from the use of coal and fuel
has contributed to climate change. Not only does climate change affect ecosystems and
agriculture, it has a detrimental impact on human health and energy. All these negative
environmental impacts need to be addressed by organizations as they could cause an
economy downfall and societal instability. According to the United Nation Convention to
Combat Desertification, land degradation could bring about a loss of $23 trillion in the
global economy by 2050.

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 2.1.5 Strategies for successful procurement negotiation.

Negotiation is a deliberative process between two or more actors that seek a solution to
a common issue or who are bartering over an item of value. Negotiation skills include the
range of negotiation techniques negotiators employ to create value and claim value in
their deal making business negotiations and beyond. (Harvard, 2017) The importance of
negotiation skills in business deals cannot be understated. Successful negotiation
involves good interpersonal and communication skills and used together to bring the
desired result.

For a good negotiation there is no shortcut to preparation. The more the preparation the
more the likely it is the outcome of the negotiation will be favorable for all parties involved.
There are two most important things to do during negotiation.

a) Make sure to have all the information that you can about the forthcoming
negotiation

b) Think about the negotiation process from the beginning to the end and
be fully prepared for any eventuality.

Usually negotiation is seen as a fight where the stronger team beats the weaker team,
where there is a winner and a loser. In co-operative negotiation conflict is minimized and
the whole idea is to reach a solution where everyone benefits. (Black, 2009)

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2.1.5.1 Positional Negotiation

Rough and Tough Soft and Sweet

Going to conquest Going for agreement

Dig in Suggest deals
Threaten Offer
Go for what you will settle for Go for what they will settle for
Argue for own position Argue for agreement
Push hard Back down
Conceal final position reveal final position
Increase argument Avoid argument
Distrust Trust
Be hard Be soft
Make demands as a condition of Concede in the interests of maintaining the
maintaining the relationship relationship
Source: Harvey, 2008, 13

Table 1. Attitudes and styles of negotiator

Franck Acuff (2008, 39) suggests the following 10 negotiation strategies that will work
anywhere:

1. Plan the negotiation

2. Adopt a win-win approach

3. Maintain high aspirations

4. Use language that is simple and accessible

5. Ask lots of questions, then listen with your eyes and ears

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6. Build solid relationships

7. Maintain personal integrity

8. Converse concessions

9. Be patient

10. Be culturally literate and adapt to the negotiating strategies of the host country
environment

2.1.5.2 Dos and Don’ts in Negotiation

Dos Don’ts
Do conceal your emotions Don’t expect to win them all
Do use experts Don’t be afraid to break off negotiation
Do always maintain the initiative Don’t attack your counterpart – attack the
problem
Do put things in writing Don’t show triumph
Do learn to use high authority Don’t deal with round numbers
Do ask for discount when paying Don’t indicate movement before you need to
cash
Do identify buying signals in Don’t dig your heels in
your negotiations
Do look out for personality Don’t be afraid of risk
mirrors
Don’t succumb to dangerous phrases
Don’t be afraid to make your counterpart work hard
Don’t be afraid to go back and try again
Source: (Oliver, 2010)

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 2.1.6 Digital technologies

Digital sourcing solutions not only create an opportunity to accelerate efficiency; they also
makes the way for procurement teams to play a strategic role in accelerating innovation.

Source: (Chunchbase, 2016)

Artificial intelligence and robotic process automation (RPA) are doing a critical range of
sourcing activities including spend analysis and procure-to-pay (P2P). These tools
improve efficiency, accelerate processes and reduce errors. IBM, for instance, used RPA
to resolve blocked invoices, reducing resolution time to 90 seconds, on average, from 32
minutes previously. At the same time, manual intervention to resolve blocked invoices
dropped 95%. The new tools improved quality, oversight and traceability throughout the
entire transaction. (piterson, 2018)

New technologies have paved the way for collaboration platforms, real-time data
collection, predictive analytics and block chain. These tools allow procurement teams to
easily share data and help cross-functional teams co-develop solutions with suppliers and

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internal stakeholders. Frictionless collaboration accelerates cycle times by improving
internal coordination and supplier performance. Leading companies already are
harnessing these technologies to speed problem solving and generate greater value for
the business.

Leading companies use digital tools for advanced category management, better sourcing
strategies and improved forecasting. The building blocks are richer data sets, optimization
engines, and tools to control demand and enforce compliance.

Digital technologies will help procurement increase collaboration, analytics, and

engagement using a spectrum of tools along the entire procurement value chain, from
planning and sourcing to contract negotiations, order delivery, payment, and supplier
management. Whatever the strategy, we believe “must have” digital procurement
processes include digital requests for quotations, supplier financial analysis, procurement
risk analysis, e-signatures and verification, and digital procurement network collaboration.
(wang, 2015)

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 Chapter 3

Methodology of the Study:

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3.1 Method:

The study I am conducting is an exploratory research, which is also conducted a survey

to measure the impact of efficient sourcing and strategies to improve for optimum
sourcing. The questionnaire is filled up by the people who are connected with
the company or supplier. The form of the questionnaire is filled up both by
hand and online survey.

3.2 Nature of the Study:

The nature of my study is exploratory research and there is small amount of data
available on the internet and published journals. The study is majorly influenced by the
journals published by the supply chain experts and different sourcing and procurement
facilitator websites. I have also use the analysis of my data and try to relate my data with
the other study that has conducted in the past by other researchers.

3.3 Population: My target population are the employees of spinning company and
suppliers who are interconnected with the company.

3.4 Sample size: In consideration of the survey population, I have targeted 20

employees from different spinning companies and suppliers from different countries. I
have prepared both hard copy and virtual questionnaire for the study to get access of the
people who are related with the study.

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3.5 Research Instruments:

I have used questionnaire as the instrument of my survey. I have used both online and
physical questionnaire. In survey questionnaire there are 10 questions which mostly
related with the Sourcing. The questions are mostly focused and direct in quality and
satisfaction, which helps to make quite realistic analysis about the subject.

I have used Google forms to conduct my survey and to collect data. All physical data I
collected from employees and suppliers through hard copy of the questioner, I uploaded
them to google form so that I don’t have to use SPSS software for data analysis. At the
end of inputting all data to google form I got automatically analyzed information.

3.6 Data Type:

I have two types data to conduct my survey. One is primary Data and another one is the
Secondary Data.

3.6.1 Primary Data:

I have collected my primary data by using two different types of communication media.
One is physical survey and another one is virtual survey.

In Physical survey, I talked to employees and suppliers at their office and asked the
questions and I filled up the questionnaire according their answers. On the other hand, in
virtual survey, I have used a method in which the respondent fills up from and send it
online.

3.6.2 Secondary Data:

In the case of secondary data, I had to rely on the online journals that have published by
the different supply chain organizations and sourcing experts. The statistical data that I
have found are given by BTMA and different press release and different organizations
which is available on the internet.

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 Chapter 4

Conceptual Framework

27
Conceptual Framework:

Conceptual framework is a schematic presentation which identifies the variables that

when put together explain the issue of concern (GH, 2000)

Existing
Sourcing
Strategies

Efficient Higher
Sourcing Sourcing Productivity

Sourcing Strategies to improve

1. Adopting Sustainability practices on sourcing

2. Stringent procurement negotiation

3. Apply digital technologies

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 Chapter 5
Data analysis and Results and Findings

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 Experience
Data analysis results.
12.50%,
13%
10%, 10%
Findings from Google form
Experience of the respondents
 77%, 5 years. 77.50%,
77%
 13%, 10 years.
 10% more than 10 years.

1st Qtr 2nd Qtr 3rd Qtr

Q 01. Do you think efficient sourcing has impact on overall productivity?

a. 5.00% I don’t think efficient
Q 01.
sourcing has any impact on
productivity. 5%

b. 32.5% efficient sourcing might 32%

a.
have a little impact on 63%
b.
productivity. c.

c. 62.5% I think efficient sourcing

has a great impact on
productivity.

Q 02.
Q 02. Do you think existing sourcing strategies
should be improved? 0 21%
a. 21% Existing sourcing strategies
46%
are ok.
b. 33% Existing sourcing strategies
33%
should be improved.
c. 46% Existing sourcing strategies
are not ok for efficient sourcing. a. b. c.

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Q 03. Does your firm has alternative supplier for every leverage product?
a. 30% We have
alternative supplier for
Q 03.
0

every leveraged 30%

38.50%
product.
b. 31.5% We have
alternative supplier for
few leverage product.
31.50%
c. 38.5% We don’t have a. b. c.
alternative supplier for
any leveraged product.

Q 04. Does your company do supplier scoring and assessment regular basis?
a. 25% Our company does supplier scoring and assessment on regular
basis
b. 35% Our company frequently does supplier scoring and assessment.
c. 40% Our company doesn’t do supplier scoring and assessment

Q 04

25%
40%
a.
b.
c.
35%

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Q 05. Does your company do supplier scoring and assessment regular basis?
a. 28% Our company
Q 05
does supplier scoring
and assessment on 0

28%
regular basis.
41.50%
b. 30.5% Our company
frequently does
30.50%
supplier scoring and
assessment.
c. 41.5% Our company
doesn’t do supplier a. b. c.

scoring and assessment.

Q 06. Do you think Sustainable sourcing might reduce overall cost of sourcing?
a. 27% No, I don’t think so.
b. 33.5% Yes, It is.
c. 39.5% I strongly believe sustainable sourcing will reduce overall cost of
sourcing.

Q 06.

39.50% 27%

33.50%

a. b. c.

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Q 07. Do you prepare yourself with sufficient information before negotiating with supplier?
a. 14.5% We take preparation
Q 07.
every time.
0 14.50%
b. 33.5% We take preparation
sometimes.
c. 52% We have same supplier 52%
33.50%
every time so we don’t need
any preparation.

a. b. c.

Q 08. Does any of the employees receive any negotiation training arranged by the
company?
a. 25% Every negotiating employees get training on negotiation.
b. 26% Few employees receive training arranged by the company.
c. 49% No. None does.

Q 08.
0
25%

49%

26%

a. b. c.

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Q 09. Does your company use digital technologies for efficient sourcing?
a. 23.5% We use digital
Q 09.
technologies for sourcing.
0
b. 25.5% We hardly use digital 23.50%

technologies for sourcing.

c. 51% We do our all work manually. 51%

25.50%

1st Qtr 2nd Qtr 3rd Qtr

Q 10. Do you think digital technologies should be used by the companies for efficient
sourcing?
a. 25% No I don’t think that digital technologies are needed for efficient sourcing.
b. 34% Digital technologies might be useful for efficient sourcing.
c. 41% For efficient sourcing digital technology is must.

Q 10.

a.
25%
c.
41%

b.
34%

a. b. c.

34
Findings of the study

I Set up the questioner in ascending order so it became easy for the respondents to
answer the question quickly and at the end of it, helps to sort data in a simple way. From
analysis of data we can see that in every question alternative (c) got higher response
which undoubtedly represents the devastating situation of our sourcing strategy. If we can
overcome them and be able to raise option (a) instead of option (c) a lot cost saving will
occur and our spinning industry will get higher productivity through efficient sourcing.

As because companies are not doing sourcing in the right way, if they follow the right
way (option ‘a’ of every question) there will be huge cost saving, So My hypothesis H1 is
proved “Adopting and applying efficient sourcing strategies will minimize overall sourcing
cost and will maximize productivity”.
However, option (b) is the current scenario of a lot of companies. If these companies can
pursue sustainable sourcing with a higher extent, they might be able to reduce cost very
easily.

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 Chapter 6
Conclusion and Recommendation

36
Conclusion

As I had to collect primary data, I meet some procurement professional and asked them
the ways our spinning procurement can be more easy and profitable. They disclosed
some points which are very valuable in a sense of national economy. They said we must
have some international broker originated in Bangladesh then the billion dollar transection
for which we are going to Singapore or Hong Kong based broker will stop and we will get
privilege in transection and BD will get foreign currency first. Second is our inbound
transportation is very fragile and costly with higher lead time, we must put our
concentration on infrastructure development. Where Vietnam can deliver goods in 30days
we take 60, which is not even near to competitive.

Recommendations:

1. Arrange training for efficient international sourcing.

2. Put more emphasis on strategical job rather transactional.
3. Evaluate and score suppliers on a regular basis.
4. For critical products make partnership with supplier.
5. Arrange training on Negotiation for every procurement staff.
6. Digitalize the whole sourcing and procurement department.
7. Introduce sustainable sourcing and procurement strategy.

37
References and Bibliography:

Act, C. (2010). Dodd-Frank Act Extracted from https://www.history.com/topics/21st-century/dodd-frank-

act. Wall Street: Dodd-Frank Act - HISTORY.

Black, A. &. (2009). Negociate Successfully .

Brammer. S, W. A. (2011). sustainable procurement in the public sector: an international comparative

study. Chicago: International Journal of Operations and Production Management,;Vol. 31 No. 4
2011, pp.452- 476, Emerald Publishing Group Limited.

BTMA. (2018). Raw Materials Consumed By Spinning Mills. Dhaka: Bangladesh Textile Mills Association.

CBS NEWS. (2018, November 2). China tariffs causing U.S. price hikes, shifts in manufacturing. NEWS
BROADCAST.

Chopra, S., & Meindl, P. (2013). Supply Chain Management . Delhi: Prentice Hall Inc.

Chunchbase, B. a. (2016). Digital Technology for Sourcing. WTO.

Clinton.N. (2017). Sustainable Procurement. REtrived From

(https://onlinelibrary.wiley.com/doi/full/10.1111/j.1523-1739.2010.01448.x). California :
Lawarance.

DailyStar, T. (2018, August 02). Bangladesh remains the second biggest apparel exporter. Daily.

Dhakatribune. (2017). Bangladesh's share in global clothing jumps to 6.4%. Dhaka: Dhakatribune.

Express, T. F. (2017, January 9). Yarn Production and consumption pattern . The Financial Express .

Food., A. (2018). “6-Step Sourcing Process”. Retrieved

from https://www.arla.com/company/procurement/sourcing-process/, . Management
International Review.

GH, e. a. (2000). Residue 259 is a key determinant of substrate specificity of protein-tyrosine

phosphatases 1B and alpha. Journal Article | Research Support, Non-U.S. Gov't .

Guardian, T. (2018). White House to impose 25% tariff on $50bn worth of Chinese goods . Washington
DC: The Guardian.

Harvard, L. s. (2017). Negotiation Skills. Boston:

https://www.pon.harvard.edu/category/daily/negotiation-skills-daily/?cid=13.

Kalubanga, M. (2011). SUSTAINABLE PROCUREMENT: Concept, and Practical Implications for the
Procurement Process. . UK : International Journal of Economics and Management Science .

Khan, S. I. (2018, april 5). Bangladesh spinning industry focuses to higher capacity utilizatiion and
diversification of yarn. The Textile Today.

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Khokon:, M. A. (2018, october 02). Present Condition Of Our Spinning Sector. Textile Today.

Leong, L. C. (2018). Eight essential steps for an effective global sourcing strategy. Singapore : SPMM.

Mawson Global. (2015). Benefits of Global Sourcing Organisations Can’t Afford to Ignore”. SIPMM.

Moazzem, K. G. (2018). Second Largest exporter . Dhaka: Centre For Policy Dialogue.

Oliver, D. (2010). Creating Success: How to Negotiate Effectively. 3rd Edition. London: GBR: Kogan Page
Ltd.

piterson, D. (2018). Modern Procurement Skills Devlopment. Maksons Global.

Refayet Ullah Mirdha. (2018, October 07). Bangladeshi RMG getting popular for trade war: survey. The
Daily Star.

Review, W. T. (2017). Bangladesh Global Market Share. Newyork: WTO.

Russell, & Tylor. (2017). Operations Management. Virginia: JOHN WILEY & SONS INC.

today, T. (2018, october 05). Our government should impose anti dumping law to protect our local
spinning industry. The textile today.

wang, l. c. (2015). Digital revolution . https://www.strategyand.pwc.com/reports/procurement-4-digital-

revolution.

Wen, T. W. (2017). Key Challenges for effective procurement Negotiation. Singapore: Sipmm.edu.sg.

S. K. (2008). Summary December 2008 issue, also see Greengage Consulting –

Sustainable Public Procurement Policy, April 2004. p6, & Aurora Energy’s Sustainable
Procurement Policy Document version 3; September 2008.

39
 Survey Questioner APPENDIX 1

1. Do you think efficient sourcing has impact on overall productivity?

a. I don’t think efficient sourcing has any impact on productivity.
b. Efficient sourcing might have a little impact on productivity.
c. I think efficient sourcing has a great impact on productivity.

2. Do you think existing sourcing strategies should be improved?

a. Existing sourcing strategies are ok.
b. Existing sourcing strategies should be improved.
c. Existing sourcing strategies are not ok for efficient sourcing.

3. Does your firm has alternative supplier for every leverage product?
a. We have alternative supplier for every leveraged product.
b. We have alternative supplier for few leverage product.
c. We don’t have alternative supplier for every leveraged product.

4. Does your company do supplier scoring and assessment regular basis?

a. Our company does supplier scoring and assessment on regular basis
b. Our company frequently does supplier scoring and assessment.
c. Our company doesn’t do supplier scoring and assessment.

5. Does your company follow sustainable sourcing strategy?

a. Our company follows sustainable sourcing strategy.
b. Our company sometimes follow sustainable sourcing strategy.
c. Our company doesn’t follow any sustainable sourcing strategy.

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6. Do you think Sustainable sourcing might reduce overall cost of sourcing?
a. No, I don’t think so.
b. Yes, It is.
c. I strongly believe sustainable sourcing will reduce overall cost of sourcing
7. Do you prepare yourself with sufficient information before negotiating with
supplier?
a. We take preparation every time.
b. We take preparation sometimes.
c. We have same supplier every time so we don’t need any preparation.

8. Does any of the employees receive any negotiation training arranged by the
company?
a. Every negotiating employees get training on negotiation.
b. Few employees receive training arranged by the company.
c. No. None does.

9. Does your company use digital technologies for efficient sourcing?

a. We use digital technologies for sourcing.
b. We hardly use digital technologies for sourcing.
c. We do our all work manually.

10. Do you think digital technologies should be used by the companies for efficient
sourcing?
a. No I don’t think that digital technologies are needed for efficient sourcing.
b. Digital technologies might be useful for efficient sourcing.
c. For efficient sourcing digital technology is must.

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Real Time Import Data of a Spinning Mill:

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