A Detailed Look Into The RMG Process In Bangladesh

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As the impact of recession reaches global proportions, the new mantra of every consumer seems to be _cheaper_. Consequently, manufacturers are on the constant look-out for ways to reduce production cost of their goods or services. The situation is no different for the apparels market relevant to the RMG sector of Bangladesh the country’s primary export earner.

The RMG industry had greatly grown and developed over the past few decades. As a result, today it is the most important sector contributing to Bangladesh’s net exports. While, the RMG sector has greatly contributed to Bangladesh’s economy, discrepancies in their operations have surfaced. Allegations ranging from the lack of social compliance, unethical labour practices to environmental pollution have been made against a number of RMG firms. As a result, foreign buyers are becoming increasingly strict when choosing potential Bangladeshi RMG firms. In addition, many RMG factories do not follow systemic operational functions like forecasting. This lack of structure is hindering growth and preventing these companies from reaching their true potential. Thus, it would be interesting to note the overall operations functions carried out by an RMG company.

RMG Industry Story so far

The garments industry has experienced growth over the past three decades. It all started due to the relocation of production of garments industry from high-wage, hence costly countries to low-wage nations. The gradual transition was aided by the bilateral MFA quota system. These two forces acting together were the driving force behind the growth of RMG in Bangladesh.

The 80s was an important decade for the RMG sector as the Bangladesh Government issued licenses to many entrepreneurs. Bangladesh began exporting its garments to the North American and European markets in the early eighties. This allowed them to import garment production machineries and spare parts duty free. As a result, the garments industry increased rapidly and the number of RMG firms reached 632 in 1984-85. In addition, export increased from US $1.3 million in 1980-81 to US $ 116.2 million in 1984-85.

Consequently, as Bangladeshi-made apparel took over the Western market, the US, Canada and many European countries started to impose MFA Quotas on Bangladesh’s garments exports in 1985. As a result, the RMG industry growth slowed down in 1985. This is best illustrated by the limited increase in the number of firms (744 companies in 1985-86 to 804 firms in 1989-90). Despite this, the industry recovered from 1990 onwards.

Due to protectionist measures like quotas taken in the 1990s, Bangladesh was able to use the cheap labour for increased efficiency. Further assisted by the provision of duty free access to European markets, the export of RMG from Bangladesh rose steadily over the 1990s to stand at approximately 75% of the country’s export basket today. The RMG boom in Bangladesh has not only had an impact on the economy, but also on society as a whole. This industry has created 12 million jobs of which 80% of the RMG workers are female. Today, Bangladesh RMG is mainly for export.

Textile Industry – Backbone of RMG

Bangladesh has a long and glorious history in textiles. The industry has had significant growth since the county’s independence in 1971. Bangladesh produces around 80% of its total fabric required for export purposes. Still, the industry has major weaknesses such as low capacity utilization, low labour and capital productivity. All of these problems lead to poor overall performance, inferior textile quality and high production cost.

In the local markets, India is a major competitor of Bangladesh, particularly since Indian textile mills have easier access to cheap raw cotton. Bangladeshi textile faces particularly strong competition from China. Chinese manufacturers enjoy economy of scale, technological advantages and overall lower costs.

Changing Environment

Until now, the Bangladeshi apparels industry has enjoyed the benefit of cheaper labor which is so low that the industry continued to boom despite an approximate 50% efficiency rate. However, as the market pattern has changed with the recession so must the industry to adapt and stay ahead. The price rates that buyers look for now are so low that we can no longer afford to depend on just cheap labour. In addition, the local market has also become increasingly competitive with neighboring countries like India and China balancing their Labor cost disadvantage with cheaper raw materials and better technology. Thus, the time has come to incorporate modern management techniques to increase the efficiency of the apparels sector.

A case study in production through CPM (Critical Path management)

Before deciding on what can be done, one must understand the process as it is. What we did is focus on the entire production process of a single order of one medium-sized company. By reducing the scale of the production and capacity, the discrepancies and inefficiencies become more visible.

The factory chosen is 25,000 sq. ft. in area, employing around 400 employees with 140 machines spread over 6 lines of production. The monthly production capacity is about 180,000 pieces.
The company has mainly two product categories:

Basic: T-shirt and polo shirts.
Critical: Ladies’ tops, fashion wear with embroidery and printing etc.

The production process considered for the analysis is for a single order of 90,000 pieces of basic T-Shirt in 3 colors and 4 sizes.

Pre-production Stage:

Order Taking

Before the production process begins, the specification of the order needs to be confirmed. This process begins with the buyer sending the specification of the order to the factory. They send it through the buying house that chooses an appropriate factory to fulfil the order. Once the buying house selects the chosen factory, the buyer sends the order specifications. This process takes around a month (30 days). After the order arrives, a paper dummy is made according to the measurement sheet provided by the buyer. This process takes about one day.

Order Confirmation

Until now, the process has been under the purview of the merchandising department. From now on, the process is taken over by the Sample Department. The Sample Department has a pre-stock of a variety of raw materials with which to make the sample. Completing the sample takes about a day. Then this sample and cost quotation is sent to the buyer for approval through popular mail courier (like Fed Ex or DHL). The buyers take about 30 days to check and approve the samples. Then the buyer opens an LC for the garment company. Since MGL has to procure both local and foreign raw materials, it needs to open back-to-back LCs.

Upon conversing with the Head of Merchandising Department, it was revealed that often specifications of new orders are left on the table for days or even weeks due to human error. The department does not use any software assistance in keeping track of their orders and all records are still kept in the age-old method of pen-and-paper. The consequence is often orders are simply _forgot_ resulting in short-term planning for production scheduling. This creates uneven production flow of some machines lying idle and then being operated for 18 hours at end to meet deadlines. What this does is increase the wear-and-tear on the machineries. The first stage can be reduced to 2 weeks on average if simple spreadsheets are used to keep track of orders and used in production scheduling.

Production process:


As soon as the yarn arrives, it is sent to the knitting section for fabric production where there are 3 knitting machines. As soon as sufficient fabric is woven, it is sent to the dyeing section for the next process. Fabric production and t-shirt production goes on simultaneously. For the order of 90,000 units, it takes approximately 20 days to finish the whole fabric production.

Dyeing and cutting

Dyeing is done either by the onsite dyeing machine or outsourced to other companies. The dyed fabric is sent to the cutting department for processing. The cutting section is semi-automated and can cut 1200 pieces per hour. Pieces that are very small and require more attention are hand-cut. Cutting department is very efficient and the cutting for the whole 90,000 units could be finished in 2 days.


The cutting parts are sent to the sewing section. The sewing process is split into 11 sepcific steps.

Here is the core use of the human capital by the industry. The breakdown of the process to such minute details allows for specialization leading to minimal error and astounding speed of work. For an order of 90,000, the company takes 160 days to complete the sewing process.

Quality Check

After the sewing is over for all the parts, the finished T-shirt goes for table QC (quality check). The clothes then move to the finishing section. Here, spots are removed from the clothes. The spot free clothes are then ironed and sent to the packing section.


Little inefficiency exist within the company, however, outsourcing the process reduces control over the quality and costing of their product.


The packing section cannot start working until all the clothes are ready for packaging; because the clothes are packed according to the buyers’ specified ratio. For example, for the order followed, in one box, the packing requirements are as follows:

! 3 red T-shirts (in 4 different sizes)
! 3 blue T-shirts (in 4 different sizes)
! 3 white T-shirts(in 4 different sizes)

Until all the specified colored t-shirts of all the sizes have arrived, packing cannot be started. Since the production concentrates only on the number of T-shirts and not their color and size, prodution is actually completely haphazard. This is the crucial bottle neck of the process, where the packing itself takes only about ten minutes; but since they have to wait for the specified order units; it takes about 2 to 2.5 hours. Infact, the bottleneck is so significant, that the finished T-shirts are packed in poly-bags and left until all the order units are ready to stop them from getting dirty.

The finished goods are then sent to the inventory, and await shipping.


The main problem here is the production process is planned along the sequential activity from start to finish where it should’ve been planned along the opposite direction starting with the specific order of packaging.
One possible solution could be to plan the production according to buyers’ packaging order. For this case it would be:

3 red T-shirts (in 4 different sizes)
3 blue T-shirts (in 4 different sizes)
3 white T-shirts(in 4 different sizes)

Doing so would reduce the packaging period to 1.5 hour per box.

Overall efficiency

If all suggested actions are taken, the whole production process can be reduced by 67 days, with 52 days saved just in the packing process. This would lead to a 30% increase in efficiency and the order being completed 2 months earlier than before.


As this case has shown, most companies may be quite advanced in terms of many of its processes; but still do not actively follow many of the valuable practices of Operations. The company like so many others still does not provide proper attention to many of its practices, such as forecasting and project management. It has a large scope of making its operations more efficient by applying practices suggested by modern operations management specialists. A bit more planned and structured strategies can help the company achieve a rapid growth in sales. If such improvements are made industry-wide then, in the long-run, the ultimate beneficiary would be each and every company in this industry.

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