Diagnostic analysis of US fashion brand’s Bangladeshi outsourcing

Abstract

ABSTRACT The purpose of this paper is to examine Bangladesh’s performance as an outsourcing destination from the perspectives of buyers and suppliers involved in a representative US apparel company which has outsourced from Bangladesh. This study employed a sequential mixed method research design which consisted of quantitative evaluation and qualitative interviews. The sample was comprised of three buyers and three suppliers in the Phillip’s Van-Heusen (PVH). From the results of quantitative evaluation, it was found that Bangladesh has a greater advantage in the cost and quality clusters than Vietnam. The interviews revealed that the US buyers have some concerns in geographic location, trade restrictions, country’s political situation, warranty policies, and currency exchange situations. To strengthen Bangladeshi capability, Bangladeshi government’s investment to improve facilities, nomination of supplier’s backward linkage, improvement of manufacturing capacity, running improvement programs, negotiation to reduce tariff, and building mutual trust between buyers and suppliers were suggested. These diagnosis results provide the US buyers and the Bangladeshi suppliers with not only valuable information on the current status of Bangladesh’s performance but guidance to successful strategies for improvement of outsourcing performance.