Analysis of a U.S. Fashion Brand's Outsourcing from Bangladesh: Problems and Proposed Solution

Abstract

<p>This research focused on exploring the role of apparel outsourcing from Bangladesh for the U.S. and the ways to reduce the effect of inefficiency factors to make this outsourcing long-term sustainable. In this research, a sequential mixed case study was conducted. Gary Teng and Jaramillo's (2005) supplier evaluation model was used to evaluate the outsourcing performance of Bangladeshi and Vietnamese suppliers for a U.S. fashion brand (i.e., Phillips Van-Heusen (PVH). The supplier evaluation model has 20 factors under five clusters (i.e., delivery, flexibility, cost, quality & reliability). On the other part of the research, in-depth interviews were taken from three buyers in the Bangladeshi local office of PVH and three Bangladeshi suppliers from three different companies. The supplier evaluation scores revealed that the Bangladeshi supplier had a very competitive position compared to its competitor (Vietnamese supplier). Bangladesh scored 0.410 while Vietnam scored 0.307 out of 1.0. In terms of the five clusters, Bangladesh (0.106) has a great advantage in the cost cluster over Vietnam (0.281). Bangladesh (0.204) is also more advanced in the quality cluster than Vietnam (0.192). For the remaining three clusters, Vietnam has marginal advancement than Bangladesh. Specifically, the Bangladeshi supplier performed higher than expected in the capacity, negotiability, continuous improvement, and certification factors. The Bangladeshi supplier just met the buyer's expectations in information sharing, customization, customer service, feeling of trust, and country's political situation factors. This research gives an overview of the apparel business practice in Bangladesh to the unexplored part of the U.S. fashion industry.</p>