by Engr Kh Mashiur Rahman | Mar 25, 2021 | Compliance
Child Labour
Child Labour – Although child labour is a global and fundamental ‘human rights issue’, its form and nature vary according to regions and countries. International conventions, universal declarations, laws of the land, social awareness — nothing can keep the child labour at bay.
It is poverty which decides a child’s destination, whether it takes the shape of school, a sweatshop or the street. Poet Sukanto has rightly narrated the pangs of hunger in one of his poems in which the full moon appears to him like a round, freshly-baked bread. In the realm of hunger, it is all prose. There is no place for poetry, the poet observes. You can read about The Safety initiatives of Accord Alliance and Can Trade Unions Really Improve RMG Workers’ Lot?
When it comes to the issue of ‘child labour eradication’, it is said that Bangladesh ready-made garments (RMG) sector has achieved a remarkable success; and its rate of progress is far better than any of its competitor countries. In view of the core issue of social compliance, none of the worker-friendly factories in the country is burdened with the NC (non-compliant) grading. Does this success mean we do not have other critical issues in the context of child labour? The bitter fact is the rate of success in the RMG sector has also resulted in the worst form of child labour in many factories, especially in the non-compliant ones. In cases, it assumes the form of even bonded labour. This situation facilitates exploitative and the worst forms of child labour that violates the basic fundamental human rights of a child.
In today’s globalised world, competitiveness is a vital factor in the context of the consumer-market. Everyone wants to lower production cost and maximise profit by increasing sales. Lower cost has always been equated with cheap labour — in our case child labour. Children do not bargain, argue or complain. On the other hand, they spend long hours in work without asking for any compensation. They are constantly in fear of losing job. This situation favours the employers. In many RMG factories in the country, which are out of the social compliance net, or run mostly on sub-contract basis, adolescent workers are being exploited almost systematically.
In the year 1993, the RMG sector had already reached a level worth $1.4 billion with around 750,000 workers at 1500 factories. Around 10 per cent of the total workforce was below the legal minimum working age i.e. below 14. Seventy per cent of the total under-aged workers were girls. Almost 50 per cent of the total business came from the US market. The single-country dependence compelled BGMEA (Bangladesh Garment Manufacturers and Exporters Association) to initiate, following the Harkin’s bill (first proposed in the US Congress in 1992), a child removal programme from the workplace in conformity with the Bangladesh Factory Act 1965. The Act says that any employment of workers under 14 is illegal.
BGMEA announced a unilateral deadline to make the industry free from child labour by 31 October, 1994. On July 04, 1995, a tripartite agreement was signed among BGMEA, ILO and UNICEF, endorsed by the GoB (Government of Bangladesh). The US embassy in the country played the role of an observer in the job of removal, and rehabilitation of the under-aged workers with basic and technical education and stipend. UNICEF took the lead in the area of education, while ILO engaged in monitoring and verification. The mechanism had been fully functioning by late 1996.
Out of eight fundamental conventions of International Labour Organisation (ILO) Bangladesh ratified six until 2000. The ratified conventions covere ending forced labour, freedom of association, right to organise and collective bargaining, equal remuneration, end to discrimination. In 2001, Bangladesh ratified one more fundamental convention i.e. worst form of child labour, and set the target of eliminating the “worst forms of child labour” by 2015. The country has also ratified the UN convention on the rights of children. The country, however, is yet to ratify a fundamental convention (C 138) on Minimum Age for Employment, which states: “The minimum age. . . should not be less than the age of compulsory schooling and, in any case, shall not be less than 15 years.”
According to Bangladesh Labour Law 2006, “A child means a person who has not completed his fourteen years of age”. No child is allowed to perform any form of work in any industry. On the other hand, “An adolescent means a person who has completed his fourteen years, but has not completed eighteenth years of age”. An adolescent can work in the industries or establishments under certain terms and conditions.
To eliminate child labour from our RMG sector, the factory management bodies have gone one step ahead. They have eliminated adolescent workers as well. The RMG sector has extended the age-limit of a child to 18 on its own definition. In front of garment factories nowadays, a common notice is seen hanging. It reads: “No child labour is allowed here. Workers under 18 years old are not recruited to the factory.” When an established industry like RMG products does not allow a ‘person’ living below poverty line and having no access to education to work, he or she has to choose an unrecognised industry for employment, where the working condition and the form of work are below-standard with low wages or, sometimes, with no wages at all. Only food is provided in this case. When children lose their jobs in garment factories, they get involved in highly hazardous sources of income just to make a living.
Child labour is a fundamental human rights issue. But in the subcontinent, child labour is culturally and traditionally recognised. In the region, the children of farmers help their parents in the field, and household works. The professionals like blacksmiths, potters, weavers and fishermen get assistance from their children in their respective fields. Thus from the very childhood they help generate family income. On the other hand, they gather technical knowledge of many local professions.
When a child helps his/her family without disrupting school education, it is socially appreciated by tradition; because the employment in this case is informal. When a child has to survive by himself/herself who cares about physical fitness, mental growth or educational rights? If the sharply monitored formal sectors, like the RMG, do not allow children to be employed there, those extremely poor or orphaned will rush to non-formal sectors like workshops, garages etc. There, most of them will get caught in the trap of forced and bonded labour. When scopes for job in the non-formal sector even are not available, children opt for begging in the streets, or get involved in trafficking narcotics or sex trade. If the RMG sector is not a safe place for an adolescent girl, then where would she go?
To make our factories compliant, we are throwing thousands of child workers into a complex life. An adolescent girl, who is denied a space by a RMG factory, will find it difficult to lead a life with secure growth and sound health. To get an ever-elusive job at a RMG factory, adolescent boys/girls take recourse to falsehood, hide their actual age and collect fake national identity cards, and thus prove their ‘adulthood’.
According to the latest National Child Labour Survey (NCLS), the total number of child labour in the country is 7.4 million in the bracket of 5-17 age-group. Out of total child employment, 3.1 million are considered risk-prone. According to an ILO survey, about 93 per cent of child workers toil almost 13 hours a day, where their daily ‘income’ comprises only food two times a day or Tk 30.00 a day to Tk 1500 a month. The workers have to undergo physical torture, work in a stifling condition, unhygienic atmosphere without Personal Protective Equipment (PPE).
In our RMG industry, the age of a child has been extended up to “not completed 18 years of age” due to the conditions set for the employment of adolescent workers. To materialise the government’s policy to eradicate the worst form of child labour by 2015, the government, BGMEA and labour leaders should work together. A feasibility study comprising doctors, psychologists and nutritionists can be initiated to measure the physical and mental stress on the adolescents working in RMG factories. If the result of the study is found favourable, then an adolescent can work for eight hours in a decent environment. We can apply this eight-hour work for the persons in the 15 to 18 age-group.
The ILO Convention 138 defines “light work” as work that is not likely to harm the child’s health or development, or prejudice his/her attendance at school. Work in RMG sewing floors is always considered light work. BGMEA/BKMEA can open evening schooling in different industrial zones and can provide training to adolescent boys and girls in different areas.
In a least developed country like Bangladesh where overpopulation, illiteracy and poverty are the major hurdles to achieve sustainable development, it is quite difficult to implement the ‘policy’ mentioned, as it relates to child labour. When the minimum wages of workers in different countries vary according to the countries’ socio-economic realities, one single standard on child labour cannot be justified. When we address the issue of child labour eradication, we need to consider socio-economic conditions of the country concerned.
On the other hand, the forms of labour will not be the same in different industries. Child labour in the ready-made garment industry is different from that in the mines or automobile workshops.
The official acceptance of adolescent RMG workers will surely help us minimise this form of deprivation in the country
by Engr Kh Mashiur Rahman | Mar 25, 2021 | Sewing & Production
Abstract – Supply Chain
Supply Chain – The export-oriented readymade garment (RMG) industry has some distinctive features, which differentiate it from other businesses. Wage, Supply Chain , Time-frame, and Compliance are among the most important features of this business. Each of four features is interrelated and interdependent. Among the features, effective Supply & Chain Management (SCM) is the core. Whatever the wage level or lead time (the period from order confirmation to shipment) without proper management of supply chain business is not viable and sustainable. Supply & chain can categories into two phases – Macro level, part of global supply & chain and Micro level, the supply & chain system within the manufacturing unit. In supply & chain system, it can be materials, it can be information, and even it can be a supply of business (continuation of business). One single and very simple issue like mismatching thread count or wrong button line, incorrect or delayed information can make the whole process jeopardies. Considering the importance, present study has been carried out on supply & chain system in Bangladesh RMG industry. The study revealed the difficulties in supply & chain system and also tried to set some guidelines to improve the system for the sustainable development of the sector.
Supply Chain Management
Supply Chain Management – The export-oriented readymade garment (RMG) sector has some distinctive features, which differentiate it from other businesses. Wage, supply chain, timeframe & compliances are among the most important features of this business. Each of the four features is interrelated & interdependent. Among the features, an effective Supply Chain Management (SCM) is the core one. Whatever the wage level or lead time (the period from order confirmation to shipment) is, without proper supply chain management no business is viable. We can categories the supply chain into two phases – macro level that accounts for part of the global supply chain & the micro level that is the supply chain system within the manufacturing unit.
In the system, it can be materials, information or it can even be supply of business (volume of business). One single & very simple issue like mismatching thread count or wrong button line, a piece of incorrect or delayed information can put the whole process into jeopardy.
In RMG business, there is a very strong correlation between the business value chain & the supply chain. The supply chain is mostly controlled by the buyers who control the business. Only lowest wage cannot ensure the business. Without proper management in the supply chain, it is not possible to comply with the lead time given by a buyer. RMG manufacturing is one of the suitable examples of the SCM.
Apart from the ultimate consumer & manufacturer, there are many other parties involved in the RMG business. In many cases a work order comes to a manufacturer through four to five different h&s or phases. For example, a buyer in the USA (ultimate customer or br& owner) confirms the business with an agent of that country. That agent has another agent in Hong Kong. Now many agents have their offices in India. An agent in India has another agent in Bangladesh. It is called the ‘local agent.’ That local agent communicates with the manufacturer.
Due to multiplicity of the stakeholders or middlemen, it takes a lengthy process for any decision. Pending approval kills the lead time. In the whole supply chain, Bangladesh does the manufacturing job but does not manufacture basic raw materials. Our competitors like China & India have their own sources of materials. Countries like Vietnam & Cambodia need only one week to receive the materials from Shanghai. So, the lead time is another important issue in the RMG business.
One small material missing or delayed just puts the whole order at stake. Schedule failure for one single order delivery jeopardises the whole production plan. Unplanned & earlier importation of materials increases the inventory level. Supply of materials, when delayed in-house, creates a line gap. Both the situations have a negative impact on finance. On the other h&, if the finished goods are not shipped on time due to not getting the approval, the factory has to pay the bills of back-to-back (BTB) L/Cs (letters of credit) against its bank loan at a high interest. So the factory always tries to avoid delayed shipment, even by covering that delay with overtime work, which leads to double production cost. When this overtime work does not help, then they take the recourse to un-authorised sub-contracts. Excessive overtime work & un-authorised subcontracts both amount to violation of compliance, another inevitable feature of the sector.
The RMG sector is now passing through many difficulties it never faced before. A devastating fire at the Tazreen Fashions & the Rana Plaza collapse have raised the question about its capability in terms of compliance, fire safety & building integrity. Only minimum wage competitiveness does not guarantee any international business of this kind. Hundreds of factories are closed, thous&s of workers have lost their jobs, many factories are running under-capacity even after accepting the business at the cost price. For the first time growth in our RMG export has fallen mainly on the compliance ground. So, to ensure compliance there is no way to enforce an effective SCM.
Of the four important features of the sector the proper supply chain management is the key to others. All the factors are interrelated & interdependent. All of our competitors have an advantage in the lead time. They are in a better position in the area of supply chain & compliance. Our main competitiveness is the low wage. Only wage alone cannot guarantee business growth & sustainability.
At the macro level the SCM system involves parties of different companies in different countries like suppliers, manufacturers & br&s. In the global or macro-level links, relationship & commitment of different suppliers, services of banks, ports, customs along with transportation & documentation are interconnected. It is a difficult job to ensure an effective coordination among all the parties. Common interest & business relationship can make a strong bondage in the macro-level SCM. If the parties involved work jointly, then it is possible to render an effective management system. This is a team work. Non-performance by any member of the team is enough to lose the game. Among the factors, beyond the factory control, are –
1. Delayed & wrong supply of materials
2. Delayed approval
3. Style changes after confirmation or even after the start of production
4. Fabrics failing to the test requirement
5. Pilferage of goods or finding them missing during transportation or at ports, especially at airports
There are basically two types of functions at the micro level: a) at the head office where the persons deal with buyers & suppliers involved in documentation etc., & b) at the factory where production operation activities are performed. Even within the production operation there are many departments involved. The links between factories & the head office or among the departments of the factories can be classified as the micro level.
The RMG business involves a buyer-dominated supply system where garment makers have a very limited role. Unfortunately, even with a limited role in the supply chain, a factory has to face tremendous pressure to meet the lead time. In this particular business, suppliers are not static & a large number of suppliers are involved in the process of making a single shirt of a particular style. For the same buyer it is not necessary that the suppliers’ list & items will be the same. The number of suppliers varies depending on style specifications. There are almost 20 items required for a single shirt. A factory dealing with 15 buyers has to h&le at least 100 suppliers. Most of the factories run their operation in the traditional system i.e. not having any modern information system.
To cut the lead time the sector needs to improve the SCM system. A buyer wants everything ready & instantly. Instead of the traditional system, now online costing & orders are now common. In the traditional system it required 120 days in case of solid fabrics & 150 days for yarn dyed. Now a factory is having 60-75 days & 90-120 days respectively. In the case of composite knit garment, a factory keeps the fabrics ready in the grey condition. After having the style details they go for dyeing & thus they can manage to keep the lead time limited to 30-45 days for repeat orders. For any fresh order a buyer does not allow even 60-75 days, though earlier it took 90-120 days.
It is important to mention here that in the category of knit & denim fabrics, Bangladesh is almost self-reliant. It is a positive sign. The skill & productivity of our workers have increased significantly.
Evidence shows that in 70 per cent cases it is buyer’s responsibility & 30 per cent is of the manufacturers. Direct marketing & elimination of middle men can help establish an effective supply chain system. It is very difficult to make a combined & coordinated system among the interest groups involved at present. Miscommunication & misinformation at any point hamper the whole process. Moreover, the impact of political instability & workers’ unrest destabilising the SCM are another concern. Adaptation with changing technologies, undisrupted utility supplies, minimising corruption, elimination of bureaucratic tangles in customs, port management & other concerned government agencies can play a vital role in overcoming the challenges. Without combined efforts & firm commitment from all concerned, a performance-based supply chain system is not possible.
A chain is as strong as all of its rings are. Similarly, a chain is as weak as one of its rings is, i.e. one single ring is more than enough to make the whole chain dysfunctional. The RMG sector in our country has so far been witnessing very clear price competitiveness. The minimum wage in our country is still the lowest among our competitors. But our lead time is under pressure. Cheap labour does not help, if the workers are not efficient. The supply of a small quantity with many styles within a short time is not possible without a functional supply chain system. Reducing the dependence for materials on other countries & elimination of middle men are vital to make the chain strong. Without proper management of the supply chain, only wage competitiveness cannot ensure sustainable business. So, for the sake of the sector, we have no alternative but to make the SCM effective
Sustainable RMG Growth: Improving Supply Chain Management
The export-oriented readymade garment (RMG) sector has some distinctive features, which differentiate it from other businesses. Wage, supply chain, timeframe and compliances are among the most important features of this business. Each of the four features is interrelated and interdependent. Among the features, an effective Supply Chain Management (SCM) is the core one. Whatever the wage level or lead time (the period from order confirmation to shipment) is, without proper supply chain management no business is viable. We can categories the supply chain into two phases – macro level that accounts for part of the global supply chain and the micro level that is the supply chain system within the manufacturing unit.
In the supply chain system, it can be materials, information or it can even be supply of business (volume of business). One single and very simple issue like mismatching thread count or wrong button line, a piece of incorrect or delayed information can put the whole process into jeopardy.
In RMG business, there is a very strong correlation between the business value chain and the supply chain. The supply chain is mostly controlled by the buyers who control the business. Only lowest wage cannot ensure the business. Without proper management in the supply chain, it is not possible to comply with the lead time given by a buyer. RMG manufacturing is one of the suitable examples of the SCM.
Apart from the ultimate consumer and manufacturer, there are many other parties involved in the RMG business. In many cases a work order comes to a manufacturer through four to five different hands or phases. For example, a buyer in the USA (ultimate customer or brand owner) confirms the business with an agent of that country. That agent has another agent in Hong Kong. Now many agents have their offices in India. An agent in India has another agent in Bangladesh. It is called the ‘local agent.’ That local agent communicates with the manufacturer.
Due to multiplicity of the stakeholders or middlemen, it takes a lengthy process for any decision. Pending approval kills the lead time. In the whole supply chain, Bangladesh does the manufacturing job but does not manufacture basic raw materials. Our competitors like China and India have their own sources of materials. Countries like Vietnam and Cambodia need only one week to receive the materials from Shanghai. So, the lead time is another important issue in the RMG business.
One small material missing or delayed just puts the whole order at stake. Schedule failure for one single order delivery jeopardises the whole production plan. Unplanned and earlier importation of materials increases the inventory level. Supply of materials, when delayed in-house, creates a line gap. Both the situations have a negative impact on finance. On the other hand, if the finished goods are not shipped on time due to not getting the approval, the factory has to pay the bills of back-to-back (BTB) L/Cs (letters of credit) against its bank loan at a high interest. So the factory always tries to avoid delayed shipment, even by covering that delay with overtime work, which leads to double production cost. When this overtime work does not help, then they take the recourse to un-authorised sub-contracts. Excessive overtime work and un-authorised subcontracts both amount to violation of compliance, another inevitable feature of the sector.
The RMG sector is now passing through many difficulties it never faced before. A devastating fire at the Tazreen Fashions and the Rana Plaza collapse have raised the question about its capability in terms of compliance, fire safety and building integrity. Only minimum wage competitiveness does not guarantee any international business of this kind. Hundreds of factories are closed, thousands of workers have lost their jobs, many factories are running under-capacity even after accepting the business at the cost price. For the first time growth in our RMG export has fallen mainly on the compliance ground. So, to ensure compliance there is no way to enforce an effective SCM.
Of the four important features of the sector the proper supply chain management is the key to others. All the factors are interrelated and interdependent. All of our competitors have an advantage in the lead time. They are in a better position in the area of supply chain and compliance. Our main competitiveness is the low wage. Only wage alone cannot guarantee business growth and sustainability.
At the macro level the SCM system involves parties of different companies in different countries like suppliers, manufacturers and brands. In the global or macro-level links, relationship and commitment of different suppliers, services of banks, ports, customs along with transportation and documentation are interconnected. It is a difficult job to ensure an effective coordination among all the parties. Common interest and business relationship can make a strong bondage in the macro-level SCM. If the parties involved work jointly, then it is possible to render an effective management system. This is a team work. Non-performance by any member of the team is enough to lose the game. Among the factors, beyond the factory control, are –
1. Delayed and wrong supply of materials
2. Delayed approval
3. Style changes after confirmation or even after the start of production
4. Fabrics failing to the test requirement
5. Pilferage of goods or finding them missing during transportation or at ports, especially at airports
There are basically two types of functions at the micro level: a) at the head office where the persons deal with buyers and suppliers involved in documentation etc., and b) at the factory where production operation activities are performed. Even within the production operation there are many departments involved. The links between factories and the head office or among the departments of the factories can be classified as the micro level.
The RMG business involves a buyer-dominated supply system where garment makers have a very limited role. Unfortunately, even with a limited role in the supply chain, a factory has to face tremendous pressure to meet the lead time. In this particular business, suppliers are not static and a large number of suppliers are involved in the process of making a single shirt of a particular style. For the same buyer it is not necessary that the suppliers’ list and items will be the same. The number of suppliers varies depending on style specifications. There are almost 20 items required for a single shirt. A factory dealing with 15 buyers has to handle at least 100 suppliers. Most of the factories run their operation in the traditional system i.e. not having any modern information system.
To cut the lead time the sector needs to improve the SCM system. A buyer wants everything ready and instantly. Instead of the traditional system, now online costing and orders are now common. In the traditional system it required 120 days in case of solid fabrics and 150 days for yarn dyed. Now a factory is having 60-75 days and 90-120 days respectively. In the case of composite knit garment, a factory keeps the fabrics ready in the grey condition. After having the style details they go for dyeing and thus they can manage to keep the lead time limited to 30-45 days for repeat orders. For any fresh order a buyer does not allow even 60-75 days, though earlier it took 90-120 days.
It is important to mention here that in the category of knit and denim fabrics, Bangladesh is almost self-reliant. It is a positive sign. The skill and productivity of our workers have increased significantly.
Evidence shows that in 70 per cent cases it is buyer’s responsibility and 30 per cent is of the manufacturers. Direct marketing and elimination of middle men can help establish an effective supply chain system. It is very difficult to make a combined and coordinated system among the interest groups involved at present. Miscommunication and misinformation at any point hamper the whole process. Moreover, the impact of political instability and workers’ unrest destabilising the SCM are another concern. Adaptation with changing technologies, undisrupted utility supplies, minimising corruption, elimination of bureaucratic tangles in customs, port management and other concerned government agencies can play a vital role in overcoming the challenges. Without combined efforts and firm commitment from all concerned, a performance-based supply chain system is not possible.
A chain is as strong as all of its rings are. Similarly, a chain is as weak as one of its rings is, i.e. one single ring is more than enough to make the whole chain dysfunctional. The RMG sector in our country has so far been witnessing very clear price competitiveness. The minimum wage in our country is still the lowest among our competitors. But our lead time is under pressure. Cheap labour does not help, if the workers are not efficient. The supply of a small quantity with many styles within a short time is not possible without a functional supply chain system. Reducing the dependence for materials on other countries and elimination of middle men are vital to make the chain strong. Without proper management of the supply chain, only wage competitiveness cannot ensure sustainable business. So, for the sake of the sector, we have no alternative but to make the SCM effective.
Keywords
Supply Chain Management, RMG, FOB, sustainable development, Least Developed Country, Free of Charge, Bangladesh
References
Koprulu, A. & Albayrakoglu, M.M. (2007). Supply & Chain Management in the Textile Industry: A Supplier Selection Model with the Analytical Hierarchy Process, ISAHP, Viña Del Mar, Chile.
Nadeem, K., & Siddiqui, D. (2017). The Effect of Strategic Orientation on Green Supply Chain Practices and Performance: A Case of Manufacturing Companies in Pakistan. Asian Business Review, 7(2), 59-70.
Tanvir, S.I. & Muqaddim, N. (2013). “Supply Chain Management”- Offering the New Paradigm for Bangladesh Garment Industry, Journal of Economics and Sustainable Development, 4(20), 158-167.
RMG in Bangladesh- A Study on Social Compliance
Titus, S., Mburu, T., Koror, J., & Muathe, S. (2012). Environmental Factors that influence Supply & Chain Management Implementation in the Manufacturing Industries in Kenya: A Case of Manufacturing Industries in Nairobi, Kenya. ABC Journal of Advanced Research, 1(2), 42 – 49.
by Engr Kh Mashiur Rahman | Mar 25, 2021 | Sewing & Production
Abstract – Wage Digitization
Wage Digitization – Bangladesh has succeeded in achieving Millennium Development Goal (MDG) set by United Nations Development Program (UNDP), where Readymade Garment (RMG) sector has played an active role. As the highest contributor in export and formal sector employment RMG sector can claim its position at the top in, out of eight goals of millennium development, eradicating extreme poverty, achieving universal primary education, ensuring gender equality and women empowerment. Bangladesh is moving from least developed country to middle-income country. Bangladesh is on its way to achieving Sustainable Development Goal (SDG) set UNDP, where 17 areas have been targeted to fulfill. The government of Bangladesh has declared its vision 2021 and BGMEA, (Bangladesh Garment Manufacturers and Exporters Association) apex body of the industry has set a target of $ 50 ml export within that timeframe. To fulfillment all those targets RMG has to play an important role. Though Bangladesh is in the second position regarding value, after China, in global apparel export, yet the difference between first and second is huge. Bangladesh’s RMG is far behind in efficiency and productivity levels compared to its competing countries. Bangladesh’s RMG is still highly dependent on low waged machine operators mainly females. The government has been working toward digitalization, and the sector is accommodating technology as without enhancement of a comparative and competitive advantage of this very sector, RMG, it is not possible to achieve the dreams of the apex body as well as of the government. Digitization of wage can help to ensure transparency, loss of working hours, implement compliance and women empowerment.
Keywords
Wage digitization, RMG, Women Empowerment, Bangladesh, Social Compliance, Social Competitiveness
References
RMG in Bangladesh- A Study on Social Compliance
Ahmed, N., Nasima, M., & Alam, N. (2013). Socio-Business Consideration of Garment Workers in Bangladesh: A Statistical Review. Wage Digitization ABC Journal of Advanced Research, 2(2), 83-92.
Aktar, M. (2014). Green Insights of Textile Industry in Bangladesh: A Case Study on Wage Digitization Mozart Knitting Ltd.. Global Disclosure of Economics and Business, 3(1), 93-108.
BKMEA (2014).Knit Barta: A three monthly publication of BKMEA. vol02, Description of Bangladesh Apparel Export pp 52-53, Bangladesh Knitwear Manufacturers and Exporters Association: Dhaka.
Chowdhury, M., Begum, M., Reza, M., & Jannath, T. (2013). Micro Credit and Women Empowerment: A Study on Grameen Bank’s Strategy of Poverty Alleviation. Global Disclosure of Economics and Business, 2(2), 209-224.
Chowdhury, S. (2015). The Necessities of HR practices in RMG Sector of Bangladesh. Global Disclosure of Wage Digitization Economics and Business, 4(1), 7-20.
Chowdhury, S., & Rahman, M. (2014). The Potentiality of Women Entrepreneurs in Bangladesh with Special Reference to Sylhet Region. Global Disclosure of Economics and Business, 3(2), 121-130.
Dhaka Tribune, 02 July 2017, over 30m mobile banking accounts inactive, Business Desk. Shariful Islam, Dhaka.
Dhaka Tribune, 25 January 2017, Mobile bank users now over 40m, Tribune Business Desk. Dhaka.
Hossain, T., & Shirazi, H. (2018). Quality of Work Life among Women Employees Working in RMG Sector of Bangladesh. Global Disclosure of Economics and Business, 7(1), 27-40.
Masoom, M. (2017). The Control of Externality among the Street Children and Marginalized People of Dhaka City: A Key Indicator to Ensure Sustainable Livelihood. Asian Journal of Humanity, Wage Digitization Art and Literature, 4(1), 17-24.
Tania, F., & Sultana, N. (2014). Health Hazards of Garments Sector in Bangladesh: The Case Studies of Rana Plaza. Wage Digitization Malaysian Journal of Medical and Biological Research, 1(3), 113-120.
by Engr Kh Mashiur Rahman | Mar 25, 2021 | Sewing & Production
Minimum Wage in Readymade Garments Industry in Bangladesh
Minimum Wage in Readymade Garments Industry – Manufacturing Ready-Made Garment (RMG) is labour intensive and low wage based industry. Nowhere, this industry was static or permanent basically on account of wage. As soon as any country became developed, the apparel and textile industry left that country. RMG is highly focused on the relocation of production. The relocation take place from high wage regions to low cost production regions just like water flows down-stream always. This single sector is dominating Bangladesh economy Since ‘80s. In Bangladesh different sectors have different wage levels according to the nature of job. The Minimum Wages Board recommended or re-recommended minimum wages of the 42 industrial sectors. The minimum wage of this very sector is lower than other sectors within the country and among the RMG manufacturing countries as well. On the contrary, within the country, for the same sector – RMG, there are dissimilarity in the minimum wage. Bangladesh Export Processing Zone Authority (BEPZA) declares the same for the industries inside Export Processing Zones (EPZ) which is higher than the declaration by Minimum Wage Board for outside EPZ factories. Minimum wage board has classified the non-EPZ workforces into seven grades according to their skills with seven different wage levels. Contrary, EPZs workers are divided into five categories. BEPZA has fixed higher wages and benefits compere to non-EPZ factories. Moreover, the study finds that the grading system has many loopholes which is not based on well thought and planned. There are so many posts and positions required to run an RMG factory that are not mentioned in the gazette. There is no guideline on how to measure workers’ competency for a particular grade and for how long a worker will be retained in the same grade. These loopholes are helping the employers to manipulate in determining workers’ grade. Minimum Wage in Readymade Garments Industry structure is applicable for whose positions mentioned in the gazette and entitled to all types of benefits mentioned in the law including overtime (OT) payment at double rate of wage. To avoid extra overtime payment factory management promotes or changes the designations like executive, supervisor etc. who are getting comparatively higher wage to keep them away from OT benefits. All those anomalies need to be addressed for properly.
Keywords
Minimum Wage, RMG, Least Developed Countries, Bangladesh
References
Supply Chain Management in Readymade Garments Industry, Bangladesh
Ahmed, N., Nasima, M., & Alam, N. (2013). Socio-Business Consideration of Garment Workers in Bangladesh: A Statistical Review. ABC Journal of Advanced Research, 2(2), 83-92.
Aktar, M. (2014). Green Insights of Textile Industry in Bangladesh: A Case Study on Mozart Knitting Ltd.. Global Disclosure of Economics and Business, 3(1), 93-108.
Bhuiyan, M. I. (2013). Reasonable Wages for Workers to Eliminate Unrest in Bangladesh’s Ready-made Garments (RMG) Sector. University of Chittagong. Bangladesh Development Research Working Paper Series (BDRWPS) BDRWPS 17
BILS (2016). Labor. A (Bangladesh Institute of Labor Studies) BILS Journal, July – December 2016, Dhaka
Chowdhury, S. (2015). The Necessities of HR practices in RMG Sector of Bangladesh. Global Disclosure of Economics and Business, 4(1), 7-20.
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by Engr Kh Mashiur Rahman | Mar 25, 2021 | Compliance
Importance of Human Resource Planning
Importance of Human Resource Planning – Manufacturing Readymade Garments (RMG) as a labor intensive industry requires a large number of labor force to produce its products and (or) services.
Usually the least developed or developing countries having huge number of
population are the suitable places for labor intensive industries. These industries follow the lowest wage to keep the production cost at a minimum level. Read more about Human Resource Development in RMG factories
Bangladesh and manufacturing ready-made garment (RMG) have been
synonymous to the most of the global brands and buyers of this sector. RMG
sector was considered a start-up industry in many developed economies.
Durations of RMG manufacturing industry in America and UK to Japan to 4-
tiger economies (Singapore, South Korea, Hong Kong and Taiwan) were muchshorter than in Bangladesh. The shifting of the RMG manufacturing industryover the period, from country to country is because of labor-cost. Over the last four decades Bangladesh is heavily dependent on a single industry and that is RMG due to absence of any other alternative sector (s) to cope with so much of unemployment. Among the major garment manufacturing countries, Bangladesh has the lowest labor wages. Low-wages certainly are the key to be considered an importing destination by the buyers. Being the lowest even, among the other sectors of the country, proper utilization and planning on importance of human resource planning had never been an issue of concern.
The workers were identified with the numerical value in a factory, not as a resource. As a result, productivity, efficiency etc. are also low while man-machine ratio is high compared to its competing countries. Low wage does not help to keep the production cost lower if the workforces are not skilled. On the other hand, in managerial and technical positions many of the factories employ foreign staff to manage the production floors to material sourcing and negotiating with the buyers. Over the period, cost of production including the labor wage in Bangladesh has increased. To be competitive and to capitalize on green factories status and improved ethical compliance and structural safety, there is no alternative to a sustainable importance of human resource planning , which had been heavily ignored since its inception. Importance of Human Resources Planning
There is no universal policy on Human Resources (HR) applicable across the
sectors. Rather depending on the nature of business activities Human Resource Management (HRM) formulates the strategies for the organization. Human Resources Planning (HRP) in corporate level and in operation level is not likely the same. Similarly, HR planning, which is effective in service sector, is not necessarily applicable for agriculture sector or manufacturing sector. Even within the manufacturing sector HR planning depends on the uses of technology and work environment, as a whole. The man-machine ratio is not same in the highly technology dependent manufacturing industry like Textiles and labor intensive manufacturing industry, as Readymade Garments (RMG).
Huge population and lack of alternative employment opportunity, comparative lower wage etc. have been keeping the sector at the top in terms of formal sector employment especially for the females. As human resources are considered the cheapest element in this manufacturing process. They are still abundant as required. As a result, at the operation level management has to employ more workers than required as they are not yet costlier. A thoughtful plan is still missing on importance of human resource planning . Mid-level management is still very weak or inefficient to play the role they are supposed to play. With those realities, the industry is losing its competitiveness and it is concentrated on lowpriced volumetric products.
Generally, management always prefers ad-hoc plan instead of a sustainable
strategy. Bangladesh has the highest number of green factory buildings and
most of the factories are now structurally safe and sound. There are many group of companies who have multiple production complexes with modern machinery and equipment.
Interestingly they are not serious to develop their human resources. Their investment in human resource development is almost nil or insignificant. Instead, the industry is now overburdened with no or only lowly skilled operators and with absence of local talents in mid-level managerial positions. If within a decade few production lines can be converted into a group of companies, then how many decades are needed to develop an effective human management system?
Man, machine and materials are considered the basic elements of industrial
production. Among the core elements, managing human being is the most
important and complicated as well. Like any other organization, the activities of readymade garment factories can be divided into two key functions – Line – those are directly involved with production, the key function of the industry and Staff – those who provide assistance to production.
According to the wage grade of Minimum Wage Board employees of the
Readymade Garments (RMG) industry are divided into two categories, A)
Workers – those are differentiated into seven different grades (1-7) and B)
Employees – who are not directly involved in production but help in production, delivering their services, divided into four different grades (1-4). There are many other important functions which have been skipped in the wage grade. Following table can be drawn to explain the past and present status importance of human resource planning department in readymade garments industry in the country.
Bangladesh has the highest number of green RMG factories in the world.
Highly environmentally friendly factories do not have strategic plan on human resources development. As a result, shortage of skilled workforce creates an unhealthy competition among the entrepreneurs who recruit experienced supervisors and workers from the neighboring factories with higher wages and benefits instead of developing their own workers in their respective factories. It’s like readymade garment sector always look for readymade skilled workers. On the other hand, workers always think out their present value of work. To them BDT 500 is more important than their future benefits. As a result, workers’ 1st Phase (From the beginning till 2000)
Time Keeper
To maintain the payroll, a job of “time-keeper” was strongly placed to record workers in-out time and including over time (OT) work, wage disbursement etc. This activity was controlled by the concerned Production Manager (PM), then the most powerful and unchallenged authority. 3rd Phase (From 2007 onward) Human Resources Department (HRD). To maintain the payroll, a job of “time-keeper” was strongly placed to record workers in-out time and including over time (OT) work, wage disbursement
etc. This activity was controlled by the concerned Production Manager PM), then the most powerful and unchallenged authority. 2nd Phase (From 2000 to 2006)
Personnel Department
With the growth of businesses, it was difficult for the production managers to control the activities beyond their capacity. Increased numbers of employees, their payroll, issuing appointment letters, Identity (ID) Cards, calculation of overtime hours, store, security, loader etc. were not possible for a single head and hand. So, the term “time keeping” section got converted to “Personnel Department”. But in many cases functional authority remained in the arena of production manager. migration is a common and chronic problem of the sector. Production costs have gone up and this trend will continue due to periodical wage upgradations, safety improvements, material costs etc. there is no way rather than productivity
improvements and product diversifications. To do so, trained and skilled importance of human resource planning is a must.
The requirement of HRD did not come out from the factories’ side. They
appointed HR people to comply with the requirements of audits. Maximum
responsibility with no or minimum authority made them dissatisfied performing their job. If there were any conflict between human resources department and production department, top management were always in favor of production department, as most of them considered production department on income side and human resources department on expenditure side. Since, HRD was not to shape the business in corporate culture or in a structured form, so necessary authority was not delivered to make the department functional in the sector, except a few exceptions. Lack of required skills, fear of losing jobs and dissatisfaction are common among the HR members.
To understand RMG industry, one has to first try to understand the background of the workforces before knowing about their management. In our RMG industry, it is very significant to consider the background of workforces – who work in the core value stream. The people in core value stream in the industry are from below poverty line, under privileged, less educated i.e. marginal group of the society. The total number of the workers of the factories under the case study are 8830. Out of total manpower, 51% is male and 49% is female. Among the total manpower, around 55% are from Rangpur and Rajshahi divisions. In contrary, the workers from Sylhet and Chittagong are less in number i.e. 0.45% and 3.34% respectively.
The graph shows that the females are more in number from Barisal, Chittagong, Sylhet, Dhaka, Mymenshing divisions, and more number of males are from Rangpur, Rajshahi and Khulna divisions.
Among the various departments and grades, females are mostly employed in sewing section. According to minimum wages Gazette for Bangladesh garment industry grade 7 for helper and grades 6- 3 are for General operator, Junior operator, Operator and Sr. Operator respectively.
Out of total 7786 workers 55% i.e. 3495 workers are female while 45% is male. Females are more in the positions of lower grades. In the grades 7, 6, 5, 4 and 3 females are 62%, 66%, 59% , 52, and 46 respectively. Out of total more than 45% workers are in grade 4 whereas in grade 3 and 5 it is 14.32% and 10.34% which indicate that factories are highly depended on migrated skilled workers. In a garment factory operators are the lifeline both in number and in operation of the industry. The supervisor is the 1st line management in RMG manufacturing unit. They supervise the operators’ functions and are responsible for production targets. They play a very crucial role and make the communication bridge between the workers and the upper management. Normally an experienced male operator is promoted to next higher position Junior Supervisor. In the industry though the females are more in number yet we see very poor numbers of female in supervisory position.
The posts supervisors or line chiefs and above are captured by the males. In
supervisory level, out of total 680 supervisors only 32 are females which is only 5% of total supervisors. In officer category total manpower is 266 and of them 91% i.e. 243 are from male. In managerial position the scenario is the worst than supervisory and officer levels, i.e. only 1 out of 98 managers is female. This is an example of non-functional or absence of human resources planning of the industry. In RMG sector span of service life in a particular factory is very short. More than 41% of total manpower have less than one-year service with the present companies. More than 80% manpower have been working in the same company for less than 4 years.
According to BLA – 2006
1. A worker who has completed ten years of continuous service or more shall be paid at the rate of thirty days (section 27, 4b) wages for every completed year.
2. If the service length is five years more or but below ten-years calculation
should be at the rate of fourteen days (section 27, 4a).
3. There is no provision of service benefits for the workers who serve a
company for less than five years. There is a relationship between the service length and service benefit. Workers presence in the same company after 5 years is alarmingly low. It was known that the situations compel the workers to leave the factory before 10-years services due to legal obligations to pay higher service benefits. Thus experienced workers are to change the factories frequently.
RMG industry is a temporary filed of employment for the employees. It has not any life time plan for its’ workers. A worker can survive till he/she can serve the industry. With a temporary plan with its workers industry’s sustainable development is not possible.
A functional HR hardly exists in the industry. Study revealed, big companies of Bangladesh RMG sector are suffering from lack of modern management
concept. If we fail to address appropriate measures the day is not very far when this sector will be a history as it happened in the case of jute, golden fibre of Bangladesh. Now the question is of survival or be perished. For the survival following measures can be taken –
Industry efficiency is highly depended on the supervisors. When cost is the
biggest concern it will be a luxury to continue with traditional way of doing
things. If a factory can attract technically trained people for the supervisory
posts then it would be easier to compete with its competing countries in regards to efficiency and productivity. To create a congenial working environment and to ensure a long run growth of the sector HRP must initiate the changes from supervisory level.
The focus of discussion on minimum wage gives a perception to the common people that the sector pays as minimum as possible in all of its functional areas.
It is unknown to the many that the sector is the highest payer of wages in
Bangladesh private sector context. This encasing of information backfired to attract talented students to the industry. To reduce dependency on traditional production managers, some of the companies have been, though in limited
Scale, trying to involve the Industrial & Production Engineers (I&PE) in its
production department. But most of the cases the relationship between the
traditional managers and the modern engineers is not functional. As a result, expected outcome is yet to be reached.
Bangladesh RMG business is highly dependent on foreign professionals. The
owners are very polite with foreign staffs simultaneously they are, in many
cases, very rough and tough to the locals. Workers and officers, due to inherited colonial mentality, are more attentive and obedient to the foreigner as a boss rather than local boss. Sometimes buyers get confidence if there is any foreigner in their sourcing factory. A foreigner in senior position prefers to recruit the persons under him from his own country. Most of them have average job skills compared to locals but their better communication skills help them
better manage their customers. Ensuring a working environment, empowering HRD, industry can hunt local talents from all disciplines, as the sectors’ pay and perks are more than any other sector for the deserving ones. This way industry can minimize dependency on foreign nationals.
Identify the KPI (key performance indicators) against each position. Each
achievement will be expressed/transformed into numeric values. Organization will follow transparent appraisal method instead of confidential appraisal system. One can evaluate his/her performance by himself/herself. To achieve better score he/she can make effort. In this process the grievance, dissatisfaction
and frustration will be minimized and a healthy competition will prevail among the members of the organization.
If supervisor is the 1st line management then assistant production manager or floor in-charge is the in-line management. Department heads, production
manager and factory manager are in midlevel management. Soon after any
incident takes place in any factory the top managements’ and association
leaders’ immediate reaction is like “it is the failure of mid management”. This incompetency of mid management story is being told decades after decades.
Have the industry leaders or factory owners taken any noticeable initiative to improve their competency? Incidents are taking place at regular intervals and criticisms also are voiced in similar nature. Then the question is why no improvement efforts can be made? It is the owners’ attitude that they will not delegate their authority that they have been exercising over the decades. The owners will make HR, mid management responsible, for the failure, they will assign work load to a particular person or department but they will not delegate proper authority with the assigned responsibility. Without authority no one can exercise his/her responsibility. For the functional HRD this authorization is extremely needed.
It is commonly remarked by the entrepreneurs that they are not having qualified candidates to recruit though the organization has the number of vacancies. In contrary, students after completing their academic life they remain unemployed, and they think that is due to lack of suitable job opportunities. Both are the harsh realities when education system and industry demand do not match. Most of our students are now enrolling themselves in the business faculty where the number of the student in science faculty is decreasing alarmingly. In Bangladesh, education system could not adopt the changing demand of the industry due to lack of communication between the academicians and the entrepreneurs. Entrepreneurs can share their experience to the students and
academicians can contribute to the industry with their knowledge. Here,
government role is very crucial to make the bridge between the parties. The
entrepreneurs can open up internship opportunities for the students and the government, through policy making, can encourage students to study science more in number.
The RMG sector has flourished in a very scattered way. Unplanned expansion of production capacity without development of importance of human resource planning management has created the dependency on foreign professionals. There was no effective management system for maintaining the labor intensive industry like the RMG. The sector is highly influenced by the theory “X” of Douglas McGregors (1906-1964) where extreme negative approaches towards the workers were perceived. Employee dissatisfaction, absence of job security, low retention rate etc. is very common in the sector. One single department, Human Resources, is responsible for multiple works. They have a huge work load with minimum or no authority. They cannot involve themselves in workers training and development and motivational activities. Moreover, department itself has weakness to manage the functions effectively. importance of human resource planning
Conclusion
Recently the government, apex bodies and some of the brands have taken
different initiatives like Skills for Employment Investment Program (SEIP),
The Centre of Excellence for Bangladesh Apparel Industry (CEBAI) to develop operational and managerial skills for the apparel industry. but Much more is needed to be sustainable as Bangladesh RMG sector will lose LDC-specific benefits in 2027 like duty free access to European Union which is one of the major attractions for the importers. Considering the importance of the problem, an in depth and immediate study is needed in this particular area which is still missing. If the sector fails to address this crucial issue, then importance of human resource planning may lose the present business share.