Analysis of Research and Survey for Pakistan Apparel Exporters and Buyers March 2017 PPP Task Force for Marketing Strategy

Transcription

1 Analysis of Research and Survey for Pakistan Apparel Exporters and Buyers March 2017 PPP Task Force for Marketing Strategy Project for Skills Development and Market Diversification (PSDMD) of Garment Industry in Pakistan

2 CONTENTS 1. Research Objective 2. Methodology and Samples 3. Finding Summary 3-1 Findings from Pakistan Apparel Exporters Q1. About Your company Q2. About Your Export Q3. Issues in Your Export Q4. Export Promotion Q5. International Competition Q6. Requests for Supports 3-2 Findings from Apparel Buyers Q1. Comparison with other competing Countries Q2. Issues to be Improved and Demands 4. Recommendations All rights Reserved. (c) PSDMD JICA Expert Team 2

3 1. Research Objective The Research and Survey on Apparel Exporters & Buyers was conducted in order to understand the current situation, needs and issues faced by Pakistan apparel industry regarding market expansion and diversification through their export. It aims that the result of the survey will be reflected into the activities of our PPP Task Force for Marketing Strategy and the project implementation to promote Pakistan apparel export in the global market by enhancing public and private collaborations. The research objectives are as follows: For Pakistan Apparel Exporters To find out basic company information of apparel exporters on size, activities, strength, etc. To find out export performance in the apparel exporters business. To find out issues on their export and export promotion. To find out their thoughts and performance in the international comparison. To find out their needs and requests in respect of marketing, product development, production & quality control, tax relief, etc. For buyers To find out import activities of Pakistan apparel products by buyers. To find out issues to be improved and demands on Pakistan apparel products considered by buyers. All rights Reserved. (c) PSDMD JICA Expert Team 3

4 2. Methodology and Samples The survey has two aspects. One is to understand the current situation, issues, and needs of Pakistan apparel exporter which are mainly members of PHMA and PRGMEA respectively. The other is to understand current situation, issues to be improved and demands on Pakistan apparel industry considered by buyers. The survey was conducted through questionnaires to 40 Pakistan apparel exporters under PHMA and PRGMEA as well as 10 buyers in Pakistan. The breakdown of Exporters is as shown below; Breakdown by Turnover Size of Turnover $1 million or less $ 2-5 million $ 5-10 million $ 10 to 50 million $50 to 100 million and above Unknown Total PHMA PRGMEA Total Breakdown by Cities Cities Lahore Sialkot Faisalabad Karachi Total PHMA PRGMEA Total Since the similar research results from Japanese apparel exporters are available, comparison between Pakistani and Japanese apparel exporters is made in 3-1 of 3. Finding Summary as long as Japanese results are available. The Japanese results (from 175 Japanese companies) are quoted from the research report made by SME Support, Japan in All rights Reserved. (c) PSDMD JICA Expert Team 4

5 3. Finding Summary 3-1 Findings from Pakistan Apparel Exporters Q1. About Your company Q2. About Your Export Q3. Issues in Your Export Q4. Export Promotion Q5. International Competition Q6. Requests for Supports 3-2 Findings from Apparel Buyers Q1. Comparison with Other Competitor Countries Q2. Issues to be Improved and Demands All rights Reserved. (c) PSDMD JICA Expert Team 5

6 3-1 Findings from Pakistan Apparel Exporters Q1. About Your Company Summary Questions The most popular answer Q1-1. Purchase of Textile Materials: Purchase from the supplier (65%) Q1-2. Types of Transaction: Selling Out (65%) Q1-3. Scales of Your Turnover : $ 10 to 50 million (38%) Q1-4. Trend of Your Turnover (Recent 3 Years): has increased more than 10% (56%) Q1-5. Trend of Your Profit (Recent 3 Years): is slightly increasing 20 (51%) Out of 40 exporters, 38% of them are in medium large scale companies with annual turnover of USD10-50 mil. Most of them purchase the material from suppliers and have selling out type transaction. More than half of them have more than 10% growth of turnover and slight profit increase. All rights Reserved. (c) PSDMD JICA Expert Team 6

7 Q1-1. Purchase of Textile Materials 70% 60% 50% 40% 30% 20% 10% 0% Purchase from the supplier In-house production of raw material Procurement from the wholesaler, trading company Supplied from Customer for Stitching Process. Pakistan 65% 15% 13% 7% Japan 49% 15% 28% 8% Others The majority of Pakistani companies are purchasing materials from suppliers, while some of them use in-house raw materials. All rights Reserved. (c) PSDMD JICA Expert Team 7

8 Q1-2. Types of Transaction 70% 60% 50% 40% 30% 20% 10% 0% Selling Out Contract Manufacturing deal others Sales transcations with a return policy Pakistan 65% 25% 5% 5% Japan 41% 19% 13% 27% Selling-out transaction is the largest in both Pakistan and Japan. There is a difference on sales transaction with a return policy between Pakistan and Japan. Japanese companies use this type transaction more than Pakistan. All rights Reserved. (c) PSDMD JICA Expert Team 8

9 Q1-3. Scales of Annual Turnover 15 Number of Companies $ 10 to 50 million $ 5-10 million $ 2-5 million $50 to 100 million and above $1 million or less Pakistan The largest group in Pakistani respondents is medium large-sized companies with annual turnover of USD10-50million. It is about 38% of the total respondents. All rights Reserved. (c) PSDMD JICA Expert Team 9

10 Q1-4. Trend of Annual Turnover (Recent 3 Years) 60% 50% 40% 30% 20% 10% 0% has increased more than 10% is slightly increasing unchanged has decreased slightly has decreased more than 10% Pakistan 56% 18% 8% 10% 8% Japan 8% 11% 11.1% 31% 40% The trend shape of annual turnover between Pakistan and Japan is totally reversed. Generally speaking, most of Pakistani companies have increase in turnover, while most of Japanese companies have decrease. All rights Reserved. (c) PSDMD JICA Expert Team 10

11 Q1-5. Trend of Annual Profit 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% is slightly increasing has decreased slightly has increased more than 10% has decreased more than 10% unchanged Pakistan 51.3% 20.5% 15.4% 7.7% 5.1% Japan 12.0% 28.9% 7.7% 41.5% 9.9% Most of Pakistani companies have slight increase of annual profit, while many Japanese companies have more than 10% decrease. Generally speaking, there is no big change of profitability in Pakistani companies. All rights Reserved. (c) PSDMD JICA Expert Team 11

12 Q2. About Your Export Summary Questions The most popular answer Q2-1. Measures of Export: Direct export to the overseas retail business (46%) Q2-2. Regions or Countries for Export: Europe (44%) Q2-3. Items of Exported Products: Men s (26%) Q2-4. Brands for Export: International Brands (70%) Q2-5. Chance of Successful Transaction: Marketing by overseas business Trip (37%) Q2-6. Information Sources for Export: Info exchange with customers abroad (47%) Q2-7. Important Things to Continue Export: Suitable product development (29%) Q2-8. Regions to focus on for further export: Europe (37%) Looking at export performance, it is remarkable that they still heavily reply on Europe market. Men s items with international brands are popular for export. Marketing by overseas business trip is most popular chance of successful transaction. All rights Reserved. (c) PSDMD JICA Expert Team 12

13 Q2-1. Measures of Export 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% direct export to the overseas retail business direct export to the overseas wholesaler export through overseas agent export through domestic agent local sales overseas retail stores of its own Pakistan 46.2% 25.0% 15.4% 11.5% 1.9% Japan 44.4% 18.5% 14.8% 7.4% 14.8% Direct export to the overseas retail business is the largest in measures of export in both Pakistan and Japan. The trend is almost same in two countries. Some Japanese companies have its own outlets in overseas countries. All rights Reserved. (c) PSDMD JICA Expert Team 13

14 Q2-2. Regions or Countries for Export 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Europe North America Middle East Others Asia Pakistan 44.0% 29.8% 10.7% 9.5% 6.0% Japan 32.4% 23.5% 5.9% 14.7% 23.5% The top two of export destinations are Europe and North America in both Pakistan and Japan. Pakistan s dependence on Europe is much bigger. Japan has more exports to Asian region. All rights Reserved. (c) PSDMD JICA Expert Team 14

15 Q2-3. Items of Exported Products 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Men's Lady's Others Baby children's clothing Sports Underwear Pakistan 26.3% 24.6% 23.7% 16.9% 7.6% 0.8% Japan 35.2% 52.8% 8.8% 0.0% 3.2% 0.0% Items of export products in Pakistan are well diversified and men s wear is the largest. In Japan, lady s wear is the largest, and they rather focus on lady s and men s. All rights Reserved. (c) PSDMD JICA Expert Team 15

16 Q2-4. Brands for Export 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% International Brands Others Own brand Partner brand Pakistan 70.5% 15.9% 6.8% 6.8% Japan 0.0% 4.8% 71.4% 23.8% Most of Pakistani companies use International brand, while most of Japanese companies uses own brand. All rights Reserved. (c) PSDMD JICA Expert Team 16

17 Q2-5. Chance of Successful Transaction for Export 40% 35% 30% 25% 20% 15% 10% 5% 0% Marketing by overseas biz Trip Overseas exhibition Buyers came to purchase Product has been evaluated Introduction of the agent Pakistan 37% 24% 18% 12% 9% Japan 5% 30% 26% 18% 7% 14% Pakistan companies thinks marketing by overseas biz trip is most useful for business chance, while Japanese companies think overseas exhibition is most useful. Other All rights Reserved. (c) PSDMD JICA Expert Team 17

18 Q2-6. Information Source for Export 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Info exchange with customers abroad Overseas agent At the booth of the exhibition Info from specialized agencies Others Fashion magazines, etc. Public institutions Pakistan 46.8% 17.7% 17.7% 9.7% 4.8% 1.6% 1.6% Japan 34.4% 21.9% 21.9% 3.1% 9.4% 9.4% 0.0% Top3 of the information sources for export are; 1) Information exchange with customers abroad, 2)Overseas Agent, and 3)At the booth of exhibition. Both Pakistan and Japan are same. All rights Reserved. (c) PSDMD JICA Expert Team 18

19 Q2-7. Important Things to Continue Export 35% 30% 25% 20% 15% 10% 5% 0% Suitable product development Cost reduction Shorter delivery time Obtain appropriate market information Close information exchange with trading partners Cooperation with overseas agent Small-lot Traceability establishment Pakistan 28.6% 22.2% 13.5% 11.9% 9.5% 5.6% 4.8% 3.2% 0.8% Japan 20.4% 14.8% 3.7% 20.4% 20.4% 14.8% 3.7% 1.9% 0.0% Pakistan companies think that important things are 1) suitable product development, 2)cost reduction, and 3)shorter delivery time. Japanese companies think 1) appropriate market information, 2) close info exchange with trading partners, and 3) cooperation with overseas agent are important. Others All rights Reserved. (c) PSDMD JICA Expert Team 19

20 Q2-8. Regions You Want to Focus on for Further Export 80% 70% 60% 50% 40% 30% 20% 10% 0% Europe North America Asia Others Latin America Africa Middle East Pakistan 37% 27% 11% 10% 9% 7% 4% Japan 19% 10% 71% 0% 2% Pakistani companies still stick to Europe and North America. Asia is the next target. Most of Japanese companies look at Asian market. All rights Reserved. (c) PSDMD JICA Expert Team 20

21 Q3. Issues in Your Export Summary Questions The most popular answer Q3-1. Issue on Your Export: Export Conditions (26%) Q3-2. Issues on How to Utilize Exhibitions: Exhibitors expense is high (53%) Q3-3. Issues on Product Development: Prices do not match (74%) Q3-4. Issues on Export System: No system to meet the asking price (26%) Q3-5. Issue on Export Conditions: Price does not meet (61%) Regarding issues in their export, price matter is the largest issue. Most of them think that price does not match in their transactions. In addition, high exhibitor expense is big issue on their participation in exhibitions. All rights Reserved. (c) PSDMD JICA Expert Team 21

22 Q3-1. Issues on Your Export 16 Number of Companies Export conditions High tariff Product development Export agent How to use exhibition Others Pakistan Export system making The biggest issues on export for Pakistani companies are; 1) export conditions, 2) high tariff, and 3) product development. All rights Reserved. (c) PSDMD JICA Expert Team 22

23 Q3-2. Issues on How to Utilize Exhibitions 60% 50% 40% 30% 20% 10% 0% Exhibitors expense is high Don't know which exhibition to participate No agent that will cooperate Don't know the export negotiation points Others Language problems Short preparation period Pakistan 53% 13% 11% 9% 9% 4% 0 Japan 33% 11% 37% 19% Both Pakistan and Japan think that high exhibition expense is big issue. Japan think no knowledge of the export negotiation points is also big issue on how to utilize exhibitions. All rights Reserved. (c) PSDMD JICA Expert Team 23

24 Q3-3. Issues on Product Development 80% 70% 60% 50% 40% 30% 20% 10% 0% Prices do not match Others Don't know the quality suitable for export destinations Don't know the design suitable for export destinations Don't know the size suitable for export destinations Don't know the pattern and color suitable forexport destinations Pakistan 74.4% 9.3% 7.0% 4.7% 2.3% 2.3% Japan 25.0% 5.0% 15.0% 30.0% 20.0% 5.0% In Pakistan, prices (or costs) do not match is the largest issue on product development, while Japan thinks don t know the design suitable for export destinations is a big issue. All rights Reserved. (c) PSDMD JICA Expert Team 24

25 30% Q3-4. Issues on Export System 25% 20% 15% 10% 5% 0% No system to meet the asking price No customers to have frequent information exchange No employee speaking local language of export destinations No agent to cover the practice (export) No system to match the desired delivery time Others No system to supply the desired quantity, size No employees who can cover export practice Pakistan 25.6% 20.9% 14.0% 11.6% 11.6% 11.6% 4.7% 0.0% Japan 9.1% 13.6% 27.3% 15.9% 9.1% 0.0% 9.1% 15.9% Pakistan thinks that no system to meet the asking price is the largest issue, while Japan thinks language issue is the largest. All rights Reserved. (c) PSDMD JICA Expert Team 25

26 Q3-5. Issue on Export Conditions 70% 60% 50% 40% 30% 20% 10% 0% Price does not meet Payment conditions don't meet Delivery time does not meet Lot does not match Others Pakistan 61.5% 25.0% 7.7% 3.8% 1.9% Japan 51.7% 31.1% 10.4% 6.9% 0.0% Both Pakistan and Japan have similar issues such as 1) price does not meet, 2) payment conditions don t meet, and 3) delivery time does not meet. All rights Reserved. (c) PSDMD JICA Expert Team 26

27 Q4. Export Promotion Summary Questions The most popular answer Export Promotion Effects on Exhibitions: Effective to some extent (46%) Necessity of Export Agent (Trading House): Necessary to some extent (48%) Functions of Export Agent(Trading House): New customer development (60%) Pakistan exporters consider that exhibitions and export agents are effective and necessary to some extent. They expect export agent to do new customer development for them mostly. All rights Reserved. (c) PSDMD JICA Expert Team 27

28 Q4-1. Export Promotion Effect on Domestic & Overseas Exhibition 20 Number of Companies Effective to some extent Highly effective Can't say effective or not Not at all effective not very effective Pakistan Most of Pakistani companies think exhibitions are effective to some extent. All rights Reserved. (c) PSDMD JICA Expert Team 28

29 Q4-2. Necessity of Export Agent (Trading House) 50% 40% 30% 20% 10% 0% Necessary to some extent Can't say necessary or not Not very necessary Very necessary Not at all necessary Pakistan 47.6% 19.0% 16.7% 11.9% 4.8% Japan 41.2% 24.6% 10.5% 19.3% 4.4% Both Pakistan and Japan think that export agent is necessary. All rights Reserved. (c) PSDMD JICA Expert Team 29

30 Q4-3. Function of Export Agent (Trading House) 70% 60% 50% 40% 30% 20% 10% 0% New customer development Acting specific marketing activities Attending overseas business trip Holds the sample to sell them to customers Pakistan 60.0% 30.0% 6.0% 4.0% Japan 27.7% 40.8% 12.3% 19.3% Pakistani companies think new customer development is important function on export agent, while Japanese think acting specific marketing activities is important. All rights Reserved. (c) PSDMD JICA Expert Team 30

31 Q5. International Competition Summary Questions The most popular answer Q5-1. What is Pakistan's strength and feature?: Raw materials (30%) Q5-2. Which apparel items are superior?: Men s (26%) Q5-3. Country as a direct competitor to Pakistan: Bangladesh (35%) Q5-4. Good measure to do design dev t for overseas? Modify the domestic design to overseas taste (36%) Q5-5. What is necessary for international expansion?: High standard balance of price and quality (39%) Q5-6. HR required for the apparel export in the future?: Merchandisers familiar with the market (23%) It is considered that Pakistan s strength and superiority is raw material and men s wear. Bangladesh is regarded as their direct competitor. Necessity for international expansion is high standard balance of price and quality. Merchandiser who knows market is most required. All rights Reserved. (c) PSDMD JICA Expert Team 31

32 Q5-1. What is Your Strength and Feature in Apparel Business Comparison with Other Countries? 35% 30% 25% 20% 15% 10% 5% 0% Raw materials Quality management Abundant Workforce Weaving Stability of the physical properties Color and patterns Dyeing and organize Others Postprocessing Pakistan 30% 22% 11% 10% 7% 6% 5% 5% 3% Japan 8% 28% 3% 27% 7% 5% 5% 3% Pakistani companies think that their strengths and features are raw material and quality management. Japanese companies think quality management and stability of the physical properties. All rights Reserved. (c) PSDMD JICA Expert Team 32

33 Q5-2. Which Apparel Items is Superior in Comparison with Other Countries? 30 Number of Companies Men's Denim Sports Lady's Baby children's clothing Work clothes Pakistan Others Underwear Men s, Denim, and Sports are considered as superior items of Pakistan. All rights Reserved. (c) PSDMD JICA Expert Team 33

34 Q5-3. Country to Be Aware as A Direct Competitor to Pakistan 40 Number of Companies Bangladesh China India Viet Nam Turkey Others Indonesia Pakistan Bangladesh, China, India, and Viet Nam are considered as direct competitors for Pakistan. All rights Reserved. (c) PSDMD JICA Expert Team 34

35 Q5-4. What is Good Measure to Do Design Development for Overseas Business Expansion of Apparel Export? 60% 50% 40% 30% 20% 10% 0% Modify the domestic design to overseas taste Commercialize by hiring overseas designer Use the original licensed design as it is Others Use domestic design as it is Pakistan 36.4% 34.1% 18.2% 9.1% 2.3% Japan 48.0% 25.0% 2.7% 2.0% 22.3% Both Pakistan and Japan considered that modify the domestic design to overseas taste is good measure for design development. All rights Reserved. (c) PSDMD JICA Expert Team 35

36 Q5-5. What is Necessary for International Expansion of Pakistani Apparel Export? 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% High standard balance of price and quality Products that are friendly to reassurance, safety, and environment High quality textile Unique and excellent design High quality sewing Functional and excellent pattern making Pakistan 39.0% 17.1% 15.9% 11.0% 8.5% 6.1% 2.4% Japan 21.8% 20.0% 18.2% 14.5% 13.7% 11.1% 0.8% Both Pakistan and Japan have similar results and high standard balance of price and quality is the largest. Others All rights Reserved. (c) PSDMD JICA Expert Team 36

37 30% Q5-6. Which Human Resources Required for The Apparel Export in The Future? 25% 20% 15% 10% 5% 0% Merchandisers who are familiar with the market Marketing staff who can develop overseas markets Designer who can design based on customer needs Management staff who can do strategic management Pattern maker who can produce high quality of the pattern Designer who can make ingenious design Pakistan 23.0% 20.6% 19.0% 17.5% 11.9% 4.8% 3.2% Japan 24.4% 10.4% 22.3% 19.9% 15.0% 7.9% 0.0% Both Pakistan and Japan have similar result, and the largest is Merchandisers who are familiar with the market. Pakistan needs marketing staff who can develop overseas market much more than Japan. others All rights Reserved. (c) PSDMD JICA Expert Team 37

38 Q6. Requests for Supports (1/2) Excerpts from Exporters Comments Q6-1. Support for export approach or marketing Exhibition with affordable cost and also to make possible on business trip to abroad with easy access and low cost. B2B meetings and convincing customers to work in Pakistan. Exploring new regions, especially China and Japan which do have extreme potential. Need product information for the target market. Need suggestion/ recommendation for appropriate exhibition. Q6-2. Support for product Need R&D set up Support in development of designs and engineering processes for export products. By arranging seminars, foreign training sessions, which best suit to our business development, product understanding, capacity building. we need quality/ design/ color information of product & new idea about product price. All rights Reserved. (c) PSDMD JICA Expert Team 38

39 Q6. Requests for Supports (2/2) Excerpts from Exporters Comments Q6-3. Support for production & quality control Technical training of quality assurance staff Implementation of lean manufacturing tools to improve productivity & quality. To upgrade technical training institutes. Sponsored training courses to enhance skill workers. Need the support in international quality standard production which suit to int l market needs. Q6-4. Tax Relief We need tax relief such as zero sales tax on major raw materials, income tax exemption on export, no taxes on machinery & machinery parts for export sector. Refunds and adjustments should be smooth. Apparel export should be seriously promoted with subsidies like other competitors countries. Q6-5. Others It is a good effort and more and more Japanese experts needed for Pakistan apparel industry. It would definitely work once given a due importance and implementation. All rights Reserved. (c) PSDMD JICA Expert Team 39

40 3-2 Findings from Apparel Buyers Q1. Comparison with Other Competitor Countries (1/2) Comments from Buyers 1 Human Resources The labor skill level is not par with other Asian competitors. Good competent middle management is not available. Poor productivity due to piece rate workers. Lack of training and investment in human resources is main cause for non-competitiveness. 2 Products Pakistan apparel industry is competing for lower-end products and the reason is it s a cotton-producing country but market competitive only in the products produced from short staple length fibers. Polyester/ Synthetic fiber products are expensive to be produced in Pakistan, since raw material requires to be imported from other countries. All rights Reserved. (c) PSDMD JICA Expert Team 40

41 Q1. Comparison with Other Competitor Countries(2/2) 3 Production Technology base is good but its management and controls are lacking. Improving the quality control would produce effective results. Production losses are high that impacts on prices. Poor innovation strategies. 4 Market Diversification More than 90% of Pakistan s apparel export relies on Europe and North America, and this is the highest reliance on these areas among Asian apparel exporting countries. More diversification of export destination needed. 5 Country Image Pakistan is at a disadvantage because of travel advisory and poor image of country. Few foreign investment and foreign partners due to security issues and negative country image. All rights Reserved. (c) PSDMD JICA Expert Team 41

42 Q2. Issues to be Improved and Demands (1/3) Comments from Buyers 1 Price Costs must be made more competitive, by minimizing wastages and improving efficiencies if the factories can have functional quality control. Price should be compatible with the international market 2 Processing Technology Improvement in automated technology needs to have better efficiency and accuracy. Processing technology is at par for large mills, however, process controls are required. Processing technology is poor in most of the industry. Bigger set ups have good machinery installed with them but they also lack process controls to reduce wastages and increase efficiencies for minimizing the process costs. Need to develop capability to improve Right First Time ratios in Dyeing All rights Reserved. (c) PSDMD JICA Expert Team 42

43 Q2. Issues to be Improved and Demands (2/3) 3 Quality Factories need to conduct quality cost audits and train workers in producing. Need to meet the buyer's requirement at any cost with no compromise on quality Quality control levels are to be improved through system automations and educated human resource. To improve quality further, lean manufacturing and six sigma knowledge and awareness can be help. 4 Design There is very limited level of innovation and R&D support that drive design enhancement Industry need to meet the buyer's design and also try to launch a new effective design Need to hire professional designers for new and unique developments to compete in the market. Design is a big limitation in export oriented apparel industry and they are copy cads. Designs should be innovated at source base to get a competitive edge into ever changing world apparel market. All rights Reserved. (c) PSDMD JICA Expert Team 43

44 Q2. Issues to be Improved and Demands (3/3) 5 Function More interesting blends and textures required. Performance or active wear apparels need to be added. Products are more basic. There aren't many performance attributes in the products. 6 Delivery Due to poor supply chain control and accountability, the delivery dates are not reliable days needed and development activities need to be improved. Delivery date is big issue in SME sector who is exporting. They do not understand the importance of it in current state of business world. Big manufacturing companies dealing with ethical and world renowned brands are performing well on delivery. 7 Production Lot Generally mills are prepared to run large lots. Very few mills are willing to do small runs. Huge problem in handling small production lots due to cost inefficiency and wastages. Large lots are preferred by most of the manufacturing concerns. All rights Reserved. (c) PSDMD JICA Expert Team 44

45 4. Recommendations (1/3) These are recommendations made by JICA Expert based on the results 4-1 Workforce Pakistan needs to invest in their workforce more through skill development and management development to improve their performance on productivity and quality. 4-2 Diversification Expanding into a diverse market & product should be handled as a prudent national strategy. 4-3 Globalization As globalization strategy and diversification of global value chain, Pakistani firms should invest in overseas countries more that are close to the large target markets. This is also a good access for direct marketing, advanced technology & design, and having excellent workforce. It is also a good occasion to develop global value chain to upgrade the business. All rights Reserved. (c) PSDMD JICA Expert Team 45

46 4. Recommendations (2/3) These are recommendations made by JICA Expert based on the results 4-4 Cost Competitiveness It is necessary to enhance the price competitiveness by increasing the productivity and decrease the cost with the production efficiency. Guidelines and practical consulting for skills development and production & quality control should be facilitated. 4-5 R&D and Design Pakistan should invest in R&D and design enhancement more which helps in maintaining flexibility in terms of responding to market demands and innovative solutions to the prevailing challenges. 4-6 Sustainability Pakistan should invest in sustainable practices, ensure employee safety standards, have strong quality checks in place and so on, as well as following global policies and practices to ensure a positive image and to ensure a distance from scandals. All rights Reserved. (c) PSDMD JICA Expert Team 46

47 4. Recommendations (3/3) These are recommendations made by JICA Expert based on the results 4-7 Quality It is necessary to enhance quality control and inspection to upgrade products to be more high value added. Quality control levels shall be improved through system automations, educated human resource, lean manufacturing, and so on. 4-8 Differentiation Identify and develop its superiority and differentiation to compete in the global market, and it will lead to national brand by focusing on the quality and design rather than competing solely on price. 4-9 FDI Promotion into Apparel Sector It is necessary to bring more foreign investors or business partners into apparel sectors to improve business performance of the apparel industry. Aggressive incentive facilitation made by government is recommended. This shall be made together with improving the country images. All rights Reserved. (c) PSDMD JICA Expert Team 47

48 All rights Reserved. (c) PSDMD JICA Expert Team 48