For BUFT to position itself as a Centre of Excellence in CSR/SRHR, it needs to develop and maintain expertise in state-of-the art CSR/SRHR best practices and supply value propositions to both buyers and suppliers.
The model shown below, reflects the trends & developments of the international market and how BUFT CoE can add value and offer services.The model describes the positioning of the CoE relative to suppliers and international buyers. Due to increasing legislation from EU governments towards their textile brands and retailers, the demand for sourcing RMG without any risks throughout the supply chain is increasing. Besides the government, also NGOs and an increasing number of consumers (approximately 20%) are putting pressure on the EU buyers. Even sector associations – representing the EU textile sector – are engaged in self regulatory schemes to comply with the international CSR frameworks (UN, ILO & OECD). Their members (brands & retailers) are encouraged to do due diligence throughout their supply chain since they are responsible for any misbehavior
and mismanagement in all steps of the supply chain, from fibre to waste (UN Guiding principles on Business and Human Rights, 2011).
This development stimulates a demand for ‘risk free’ RMG. Bangladesh is perceived by stakeholders as a high risk country on CSR, and an increasing number of brands and retailers in the EU are withdrawing from Bangladesh to Eastern European and Northern African countries due to lack of transparency in first tier, second tier and further downstream the supply chain. The practice of sub-contracting is perceived as a major risk for buyers. A growing group of Western brands are assessing the possibilities for sourcing nearby in the Mediterranean region. Somewhat more expensive than Bangladesh, but cheaper in logistics, faster in delivery, less risk in the social domain, and less subcontracting. This trend is called ‘near-shoring’.
The Bangladesh RMG sector can maybe grow for another five years, but withoutinnovative transformation, the sector will end up with a majority of buyers from China and other non-OECD countries, who are less stringent in compliance of international CSR frameworks.
BUFT CoE can play a role in assisting Western buyers to find suppliers who have moved beyond compliance and who can give full transparency acrossthe whole supply chain from fibre to RMG. This could be a transparency benchmark or an annual top 100 list of safeplaces from which to source, and with the potential for matchmaking services. Such instruments alsoapply peer pressure for BGMEA members to be listed next year. In addition disclosing best practices and calculation of the return on investment of CSR& SRHR measures can become part of commercial consultancy offerings to BGMEA members.
Another response toincreasing legislation in the EU, is a growing trendamongst brands and retailers for innovative new business models. Not to ‘take-make-waste’anymore, but to control the whole supply chain in a closed loop system. This thinking in ‘circular’ concepts has already started and becomes more populareach year; especially amongst first moving (business to business) consumers. Eastern European and Mediterranean production countries are lining up for this development and the first experiments with recycled fibres made out of textile wastehave already started.
Other innovationsinclude (mass) customization and printing on demand. The industry is moving from a business model with large orders towards more online tailor made concepts where consumers can co-design their clothes and where it can be printed by piece and ordered by direct mail within some days. These innovations may threaten in the near future the mainstream mass production of fast fashion from Bangladesh.
The demand for new business models and new techniques creates an opportunity for BUFT CoEto offer consultancy and master classesas well as research findings to BGMEA members. BUFT CoE has therefore to develop as an innovation incubator and to facilitate research programmesofferinglabs, technology, support PhD trajectories and pilot innovations for mainstream application in industry. . In addition BUFT CoE can engage with strategic (knowledge) partners, international buyers, experts and donors to provide specialistexpertise and to pilot scientific experimentation.
BUFT CoE can help the Bangladesh RMG sector to position itself competitively relative to existing and upcoming textile producing countries, and to enhance its value-addition. In comparison with other textile producing countries, the current added value of Bangladesh is low and this makes it vulnerable to losing its EU business to other textile producing countries.AsBGMEA Vice President Mr. Faruque Hassan stated during a meeting at his office in Dhaka on May 18th, 2016, a CoE has to start right now in order to develop and to scale Bangladesh innovative capacity.
Based on a preliminary need assessment conducted during a seminar with some BGMEA members in Gazipur on May 2016, leadinggarment manufacturing companies identified the following relevant needs:
- Systematic support on transparency in order to improve the trust and loyalty with customers;
- Joint effort in branding Bangladesh RMG sector as inclusive and responsible sourcing country;
- Technological support in production of circular fabrics and cost reduction;
- Conceptual support on new demands like customization trends and how to profit from that;
- Education and training on CSR and the business case of implementing it.
The companies do not yet have a suitable service provider to meet these needs and many indicated that a CoE would be helpful in innovating business practices towards a more trustworthy, high tech business sector.