Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 1 EFFECTIVENESS OF SUPPLY CHAIN MANAGEMENT ON FASHION INDUSTRY Effectiveness of Supply Chain Management on Fashion Industry of Pakistan Muhammad Babar, Muhammad Bilal National University of Sciences and Technology Islamabad, Pakistan.
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 2 Abstract The aim of this paper is to find the effectiveness of supply chain management on the fashion industry of Pakistan. The purpose was to see whether there is any contribution by supply chain in the growth of the fashion industry. A research has been carried out in firms, by applying primary research tools mainly questionnaire. A quantitative research has been carried out which showed that a strong relationship is existing of quality and sourcing and a moderate relationship of on time delivery and planning as independent variables of supply chain on fashion industry in Pakistan. Keywords Supply chain, Fashion industry
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 3 Introduction Supply chain management (SCM) is the synchronized set of procedures to design and implement all the steps which is used in acquiring raw materials from suppliers, process those into finished goods and providing it to end users. It consists of chain-wide information, planning, resource management and universal performance measurement. Main goal of SCM is to minimize the lead time and also reducing cost of the product. There are different variables that affect SCM. Those variables are planning and management of logistics, raw material transportation, better infrastructure, proper warehouses and extremely competent planning and controlling of shipments. All those variables help in lowering the lead time of value chain and cost. If we look at the trends in textile and fashion industries of the world, the thing we notice is that the lead time is decreasing day by day. Textile and clothing is one of the oldest sectors in the history of the industrial development. Textile and clothing is one of the top manufacturing industries throughout the world and it is contributing considerably towards the economic growth of developing countries [1]. Textile industry contributes a good portion of the Pakistani exports and thus helping Pakistani economy. Fashion industry and textile go hand in hand as all the raw material needed in fashion industry comes from textile and clothing industry. As per the Oscar Wilde "Fashion is a form of ugliness so intolerable that we have to alter it every six months." They must do whatever it takes to stay on top of textile and fashion industries [3]. The delivery of products of fashion items in terms of lead-time and cost has changed. The competition has increased and it has become hostile in recent times [3]. The root causes of this situation are high demands, advancements in technology and the globalization process
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 4 [4]. Also, always research the company or individual you will be interviewing with [5]. The objective of this research is to analyze the overall performance of supply chain management of fashion industry in Pakistan. Methodology To conduct this research, primary data was collected in the form of questionnaires as the research tool from Kohinoor mills Rawalpindi Islamabad. A standardized questionnaire was developed and delivered to the respondents to gather data. Primary data was collected from 30 respondents. The theoretical framework was developed to measure the supply chain of fashion industry on the dimensions of planning, quality, sourcing and on time delivery. The statistical tool used for evaluating and interpreting the questionnaires into meaningful information for resulting analysis is Statistical Package for Social Sciences (SPSS). Figure 1: Theoretical Framework Figure 1 explains the theoretical framework used in the study. Four independent variables or dimensions namely quality, sourcing, planning and on time delivery are used to measure the dependent variable supply chain management.
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 5 Discussion TABLE I shows the respective Cronbach alphas of 4 independent variables used in the study. Variables titled are quality, planning, sourcing and on time delivery. Among these four variables sourcing and quality showed high internal consistency of 0.706 and 0.691 respectively, whereas planning and on time delivery showed a relatively lower internal consistency of 0.547 and 0.519 respectively. Table I: Reliability Stats for Independent Variable TABLE II illustrates the mean scores of planning. Among the items used to measure this dimension, defined marketing plan shows the highest mean score of 2.03. The items of underutilized capacity, industrial planning and machine upgrading show relatively lower mean scores of 2.0 each. The rest of items show very low mean scores.table II: Mean Score of Planning
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 6 TABLE III illustrates the mean scores of quality. Among the items used to measure this dimension, imported raw material shows the highest mean score of 2.5. This means the highest dependency of this item on the dimension. On the other hand, the item of compensation comparison show the least mean score of 2.03 which shows the lowest dependency of this item on the dimension of quality
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 7 Table III: Mean Score of Quality TABLE 1V illustrates the mean scores of sourcing. Among the items used to measure this dimension, modes of transportation shows the highest mean of 2.70 among all the items with sourcing as a dimension. Another item that showed a very high mean is transportation in Pakistan which is 2.60 which means that it s contributing a lot to the supply chain management. Order delivery within the lead time however shows the lowest mean score of 1.87. This shows a poor contribution to this dimension and hence to supply chain management. TABLE V illustrates the mean scores of on time delivery as a dimension. Among the items used to measure this dimension, contacting retailers to estimate demand shows the highest mean score of 2.07 which means supply and availability on time is highly contributing to this dimension and so to the supply chain management. Responding to fluctuations in market
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 8 however shows the lowest mean score of 1.77. This shows a poor contribution to this dimension and so to the supply chain management. Table IV: Mean Score of Sourcing Table V: On Time Delivery Table VI illustrates the correlation table between the dependent variable supply chain and the independent variables quality, planning, sourcing and on time delivery. The table shows that correlation is significant between the dependent and independent variables. Quality and sourcing are showing significantly strong correlation with the dependent variable supply chain management. Quality is showing a correlation of 64.9% and sourcing of 64.1%. On
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 9 time delivery is also correlated significantly to supply chain management and showing a value 62.2%. The dimension of planning is showing a relatively lower but good correlation of 50.6%. As a whole, all the independent variables are strongly correlated to the dependent variable. Table VII shows the regression analysis of the dependent variable supply chain management and independent variable quality. The value of the R square comes out to be 0.421 which shows that 42.1 % of supply chain management (dependent variable) is explained by the independent variable quality. Table VI: Correlation Table Table VII: ANOVA of Quality
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 10 Table VIII shows the regression analysis of the dependent variable supply chain management and independent variable sourcing. The value of the R square comes out to be 0.441 which shows that 44.1% of supply chain management (dependent variable) is explained by the independent variable sourcing. Table VIII: ANOVA of Sourcing Table IX shows the regression analysis of the dependent variable supply chain management and independent variable on time delivery. The value of the R square comes out to be 0.387 which shows that 38.7% of supply chain management (dependent variable) is explained by the independent variable on time delivery. Table IX: ANOVA of On Time Delivery
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 11 Table X shows the regression analysis of the dependent variable supply chain management and independent variable planning. The value of the R square comes out to be 0.256 which shows that 25.6 % of supply chain management (dependent variable) is explained by the independent variable planning. Table X: ANOVA of Planning Figure 2 illustrates a scatter plot matrix showing the extent of correlation between all the variables used in the study. The scatter plot proves that a strong correlation exists between the four independent variables with the dependent variable
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 12 Figure 2: Correlation Diagram Figure 3 explains the scatter plot matrix of the regression analysis of the independent variable sourcing and the dependent variable supply chain management. The figure clearly shows the value of R square or coefficient of determination which shows a more realistic and authentic result of the regression coefficient. The value of R square for sourcing is 0.441 which shows that dependent variable supply chain is explained or predicted by a value of 44.1% by the independent variable sourcing. This proves a moderate fit relation between dependent and independent variable.
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 13 Figure 3: Regression of Sourcing Figure 4 explains the scatter plot matrix of the regression analysis of the independent variable on time delivery and the dependent variable supply chain management. The figure clearly shows the value of R square or coefficient of determination which shows a more realistic and authentic result of the regression coefficient. The value of R square for sourcing is 0.387 which shows that dependent variable supply chain is explained or predicted by a value of 38.7% by the independent variable on time delivery. This proves a moderate fit relation between dependent and independent variable.
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 14 Figure 4: Regression of on time Delivery Figure 5 explains the scatter plot matrix of the regression analysis of the independent variable planning and the dependent variable supply chain management. The figure clearly shows the value of R square or coefficient of determination which shows a more realistic and authentic result of the regression coefficient. The value of R square for sourcing is 0.256 which shows that dependent variable supply chain is explained or predicted by a value of 25.6% by the independent variable planning. This proves a modest fit relation between dependent and independent variable.
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 15 Figure 5: Regression of Planning Figure 6 explains the scatter plot matrix of the regression analysis of the independent variable quality and the dependent variable supply chain management. The figure clearly shows the value of R square or coefficient of determination which shows a more realistic and authentic result of the regression coefficient. The value of R square for sourcing is 0.421 which shows that dependent variable supply chain is explained or predicted by a value of 42.1% by the independent variable quality. This proves a moderate fit relation between dependent and independent variable and the strongest than other independent variables. Figure 6: Regression of Quality Conclusion On the basis of the findings, we can conclude that among all the independent variables, sourcing as an independent variable is showing highest reliability i.e. 0.706 and hence proving that the research is a reliable one. Also quality as a dimension showing 0.691 score,
Effectiveness of Supply Chain Management on Fashion Industry of Pakistan 16 proving it`s high reliability. Other two dimensions, namely are planning and on time delivery showing their respective reliabilities of 0.547 and 0.519 respectively as well. Overall, we can infer that the research is a reliable and valid one. Also, on the basis of above findings, it is concluded that the quality showing a correlation of 64.9% and is significantly correlated to our dependent variable supply chain management. Other dimension showing a high correlation of 64.1% is sourcing, hence highly correlated to supply chain management.. Out of the four dimensions, on time delivery showing a correlation of 62.2% and planning with 50.6% showing a bit moderate correlation to supply chain management. On part of the regression analysis, out of the dimensions, sourcing as an independent variable is explaining our dependent variable supply chain management to a value of 44.1%. Second to that quality as an independent variable is explaining the dependent variable to a value of 42.1%. Also on time delivery is explaining to a value of 38.7% and planning is explaining supply chain management with a value of 25.6%. We conclude that as fashion industry in Pakistan has been growing for the past 5, 6 years at reasonably good pace, supply chain is playing a very major role in the growth of fashion industry. We strongly recommend that supply chain must be given the primary importance in order to keep the growing at the rapid speed. Also on the final words, we hope that this research would provide a great deal of help to the prospect scholars and the organizations working for the fashion industry. This knowledge will open the new horizons of study for them.
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