Risks and Their Management in Ready-Made Garment Industry: Evidence from the World's Second Largest Exporting Nation

Abstract

A smooth supply chain is critical for clothing exporters to profit and remain competitive in the global clothing industry. Several risks including the lower profit share, alongside cost reduction pressure from the buyers threaten the survival of the clothing (Readymade Garment) exporters. This paper explores the variety of risks faced by the Ready-Made Garment (RMG) exporters and their management practices in the World’s second largest exporting nations, Bangladesh. Conducting detailed case studies and in-depth interviews on 10 RMG exporters, the paper identifies that the exporters face eight different types of risks, however, have a less-than-par awareness and understanding on formal risk management. Overall findings identify a significant multi-dimensional vulnerability of the RMG exporters in Bangladesh, which serves implications for the other competing nations in the global clothing market.