Factors Affecting Selection Of Location And Suppliers In Global Supply Chain Management Of Readymade Garments(rmg)outsourcing

Global supply chain management is a common phenomenon in the RMG industry around the world.Multinational clothing brands are constantly looking for outsourcing readymade garments(RMG)from a location and a supplier that provides with cheap,better quality products at a minimum lead-time.Despite being a highly-practiced issue in the RMG industry,it is evident from the literature review that studies on factors determining outsourcing location and supplier decision,in RMG per se,are rare or unavailable.For location decision,most of the research were concentrated on mainly two things: determinants of location choice for FDI and make or buy decisions of outsourcing.For supplier decision,most of the research focused on the method to choose supplier rather than on the criteria of determining suppliers.Limited studies in this area resulted in the costly outsourcing and public relation issues for the outsourcers and outsourced.Moreover,available models are incompetent to answer the paradox prevailing in RMG Sector of Bangladesh,where export is rising despite of supply chain disruption.This research strived to pervade this knowledge interstice by proposing models for choosing location and suppliers for RMG outsourcing based on the findings of previous literature and by conducting an empirical study on the RMG sector of Bangladesh,the second largest RMG supplier in the world.For empirical study,a mixed-method research approach,which involved a quantitative survey followed by qualitative field study,has been applied.Survey data were collected from over 100 respondents from 66 international brands using a structured questionnaire.The data were analyzed using the PLS-SEM method.The study obtained qualitative data from in-depth interviews of 10 industry experts.The analysis of the data(through Smart PLS 3.3 software)revealed some interesting findings.This study found that competitive factors,socio-cultural factor and macroeconomic and political factors influences the company motives to select outsourcing location.Another interesting,and novel finding is that company motives fully mediate the relations among the country related factors(macroeconomic and political factors,competitive factors,socio-cultural factors)and location selection.Like location,this study found some interesting findings on supplier determinants.Suppliers for RMG outsourcing are chosen in two step process.First,the suppliers are enlisted in a qualified pool and then among them one or more suppliers are given work order.Criteria for enlistment or order qualification involves supplier competence and supplier competitiveness;whereas criteria for order winner involves: relationship,supplier competitiveness,and supplier competence.Big companies tend to choose suppliers for order allocation based on relationship.However,company origin does not have any moderating effect on supplier selection.Theoretically,this study contributes to the knowledge of global supply chain management by revealing the salient features of location and supplier determinants as well as the models of outsourcing RMG.The unique contributions of this study are many folded.For the first time,this research shed light on the outsourcing location decision variables,especially in the RMG sector.Moreover,this study proves that despite the attractive country related features,company motives mainly plays a vital role in location selection for outsourcing.In addition to that like products,order qualifying criteria are different from order winning criteria for suppliers in RMG outsourcing.The researchers in future can proceed with a couple of things.Firstly,add and remove new variables in location selection as the business environment is constantly changing.Secondly,they can use the model for cross-industry and cross-culture study.Thirdly,they canuse the supplier selecting variables for further study with different supplier choosing methodology in cross-industry and cross-culture and lastly,they can also check whether the differential criteria for supplier qualifier and order winner are valid cross-industry and crossculture.The findings also have practical implications for managers and policy makers.International buying companies must concentrate on the competency factors of suppliers to avoid supply chain risk and public relations issue.For the same reason,the Bangladeshi policy makers should enforce the compliance and help RMG suppliers to gain competencies.The supplier after,attaining the competitiveness,should concentrate on the competence factors and relationship factors because these two elements can win them supply order for RMG.The Bangladeshi policy makers should also focus on maintaining the country related factor,if not improve,to attract more international buyers.Overall the findings of this research again prove that the ultimate goal of the global supply chain management of outsourcing is to get quality product safely at least amount of time and cost.