BUSINESS REPORT

Sourcing from Bangladesh

Executive summary

This study investigates whether we should continue purchasing cloths from Bangladesh or move to another country. This study considers all the factors of the manufacturing laws, the working conditions, wages and also our corporate social responsibility and strategy. The conclusion drawn from the analysis is that we should continue buying cloths from Bangladesh after the recent building collapse since its our social responsibility and also it creates a win-win situation for both of us because the wages are still very less compared to other countries and we also we can maintain our low cost provider strategy.

Table of contents

Executive summary

1. Introduction 2. Background 3. Analysis 4. Conclusion 5. Words citation

1 1 1&2 2 3

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Introduction This business report is about whether we should continue buying cloths from Bangladesh or move to another country to buy them. This report takes into account the factors such as the companies social responsibility, wages, cost to the company and the working conditions.

Background & Analysis This report is written and analysed on the recent event that took place in Bangladesh, its about the Savar building collapse, in Bangladesh, the garment-factory building collapsed and the search for
the dead ended at the site of the worst disaster in the history of the global garment industry. The death toll: 1,127. (AP) which was an outsourced manufacturing facility to major corporates around the

world, so this leads us to making a decision on whether we should buy clothes from Bangladesh or move out to another country, but moving to another country is not the solution, the solution is to work together maintain relationships solve the problems or issues and do business the same way it was done before. Events like this occur because we are partially responsible for not paying enough and pressurising the manufacturer to produce the goods in that cost which then effects the working condition the safety and the salary of the workers. As said in the Bloomberg Weekly At issue is the industrys growing dependence on a business model that encourages some fashion chains to push for the lowest prices from subcontracted factories in countries that already have some of the leanest production costs in the world. To keep their contracts, factories may put concerns about production schedules before those of worker rights or safety." (Dudley, Devnath, and Townsend). With 3.6 million people working in the garment industry, Bangladesh is the world's secondlargest clothing exporter after China. About 60% of exports go to Europe and 23% to the United States. The minimum wage for a garment worker is US$38 a month, though after a massive street demonstration recently, an increase is imminent. (Stefanicki) We can continue doing business by compensating the victims and providing emergency aid and urging the supplier to stop labour slavery by giving them fair pay, healthy and safe working conditions. At the same time we still source clothes at the lowest price considering that Bangladesh has the lowest labour cost compared to china and Vietnam.

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Country United States China India Vietnam Bangladesh

Hourly Wage ($ USA) $8.25-14.00 $0.93 $0.55-0.68 $0.52 $0.21

("Institute for Global Labour and Human Rights ")

This way we also contribute to the developing economy of Bangladesh because the garment industry is a $20 billion-a-year money-generator for Bangladesh. Some 4,500 factories employ 3.6 million workers and account for 77% of the country's exports. Deadly accidents and deplorable conditions are all too common, but pay is still a lure for many in this impoverished country, where the minimum wage is the equivalent of $38 a month. (Ahmed ) Even if the garment workers had won their demand for 5,000 Taka (Bangladesh Currency) a month, this still would only amount to 35 cents which is 24.33 Taka-an hour, which is still lower than any other garment wage in the world. ("Institute for Global Labour and Human Rights") This way we still maintain our low cost provider strategy to source the clothes from Bangladesh and also act socially responsible by giving financial and medical help and making sure that our suppliers are doing the right thing by evaluating our supply chain and performing audits on products and the suppliers, so that they follow the labour laws and stop treating the labour so poorly and also by stopping doing business with suppliers who do not follow the required regulations.

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Conclusion To conclude this discussion looking at the options, all in all it clearly shows that staying back in Bangladesh and sourcing clothes from them is a win win situation for all, the supplier, buyer, workers and the government. The customer would either have to pay more for the products or the corporates will have to reduce their margin to maintain the customers and not let them go to the competitor. In this way our stakeholders, customers, the government and the agencies are all kept happy with our work getting done at the same time.

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Work citation Ahmed, Saeed. "Bangladesh building collapse: An end to recovery efforts, a promise of a new start." CNN. Cable News Network, 14 June 2013. Web. 26 Nov. 2013.

"Bangladesh Garment Wages the Lowest in the World--Comparative Garment Worker Wages." Institute for Global Labour and Human Rights august (2010). Web. 26 Nov. 2013.

Dudley, Renee, Arun Devnath, and Matt Townsend. "The Hidden Cost of Fast Fashion: Worker Safety." Bloomberg Businessweek. 07 Feb. 2013. Web. 26 Nov. 2013.

Stefanicki, Robert. "Rana Plaza victims continue to suffer." Asian Times Online 31 OCT 2013. Web. 4 Dec. 2013. AP. "Bangladesh ends building collapse search; final toll is 1,127." CBS NEWS 13 MAY 2013.Web. 4 Dec. 2013.