Capability components of supply chain resilience for readymade garments (RMG) sector in Bangladesh during COVID-19

2.1 RMG sector of Bangladesh

The RMG sector of Bangladesh employs more than 4.4 million people, among whom 80–90% is female, and this is an indication of the sector's contribution toward woman empowerment (Akhter et al., 2019; Talapatra et al., 2019). In total, 80% of Bangladesh's exports and around 12% of GDP come from ready-made garment sector, which is the biggest manufacturing division in Bangladesh (Menzel and Woodruff, 2019). The garments sector drastically expanded the share of women working in full-time wage occupations, as growth compounding at a yearly rate of around 15% more than two decades (Menzel and Woodruff, 2019). Majority of the RMG producers are small and medium size enterprises; nearly three-fourths of the factories have less than 500 employees (Talapatra et al., 2019). Most of the factories are located in Dhaka, the capital, with few in nearby Narayanganj and some in the port city Chattogram (former Chittagong) (Talapatra et al., 2019). Of export volume, 60% of the contracts are with the brands from European buyers and the rest with American buyers. The common categories of the products are woven, knitwear, denim and sweater.

Retailers from North America and Europe who source the products from Bangladesh have adopted an innovative approach to improve the working condition by developing the consortium of alliance for Bangladesh workers safety and accord for fire and building safety in Bangladesh (Liu et al., 2019). Government, local and international initiatives along with the accord and alliance in Bangladesh, a cluster has been developed by the global trade union federations, nongovernment organization (NGO) and also multinational apparel companies. They have been working together to improve the internal environment of the factory to make a safer place for workers and to create a better image (Ashraf and Prentice, 2019). The comparative advantages of Bangladeshi RMG industry include low wages, long working hours, extreme overtime, less employment security for the global brands and retailers (Ashraf and Prentice, 2019). Those initiatives have generated more interests on studies related to the RMG industry's supply chain, in order to enhance its performance and sustainability requirements to the market. With the COVID-19 event, the resilience aspect has also begun to be considered as one of the relevant subjects of investigation for the RMG industry.

2.2 Conceptualizing supply chain resilience

Based on an extensive review, Jüttner and Maklan (2011) have summarized four supply chain resilience capabilities: flexibility, velocity, visibility and collaboration, which are strongly impacted by disruptions. During crisis time, for instance in financial crisis, flexibility helps organization switch to alternative cost-effective supply sources; velocity assists in finding unexplored regional demands; visibility helps organization judge the supply chain by sharing information to prepare any potential delivery failure; and collaboration throughout the chain ensure smooth functioning (Jüttner and Maklan, 2011). These capabilities seem equally influential during pandemic like COVID-19. When one or more components of the network like supply of raw materials, production, demand, distribution or transportation become unavailable and as a result it is prompt negative impacts on the supply chain network (Paul and Chowdhury, 2020). It is clearly appearing a require for advancing the supply chain resilience research and practices amid the uncommon and extra-ordinary circumstance due to the COVID-19 outbreak (Ivanov and Dolgui, 2020).

Van Hoek (2020) helps endeavors to center on openings to shut the crevice between supply chain resilience inquire about and industry hone. More focused on, less conceptual and more experimental investigate into occasions encompassing COVID-19 can offer assistance supervisors resolve supply chance challenges and can offer assistance decrease the chance of requiring assisting relearn lessons as of now learned in investigate when the following emergency comes around. (Van Hoek, 2020). The journey toward building up flexibility in supply chains requires structured state of intellect toward danger assessment, joint and common purposes between peoples and the intrigued of resilience and viable streams of materials and information (De Sousa Jabbour et al., 2020). In practical, supply chains, which are looking to end up 4.0 era, are those which can be stronger by the enhancement of higher responsiveness, what can create a better response against conceivable disturbances from COVID-19 episode (Frederico, 2020). Yet, disruptive technologies such as big data analytics plays crucial role on the supply chain resilience (Papadopoulos et al., 2017). Brusset and Teller (2017) recommend that's to supply bits of information for fulfilling versatility by mapping the associations between the sharpens, assets and shapes over which a chief has control.

Organizations and their supply chains must create both proactive and responsive flexible capabilities to extend a specific level of availability, reaction and recuperation capacity amid the pre-disaster and post-disaster stages (Chowdhury and Quaddus, 2017). Papadopoulos et al. (2017) suggest that the comes about of the investigation recommend that swift trust, in-arrangement sharing and public private organization are basic enablers of resilience in supply chain system. A firm with a more inventive environment straightforwardly or by implication, influence to a more resilience to disturbance (Sabahi and Parast, 2019). Ivanov and Dolgui (2020) suggest that when resistance to extraordinary disruptions must be considered at the scale of reasonability, a new angle of supply chain resilience research is very critical. For the garments sector growth in future, both the government and private sector of Bangladesh ought to fortify updating by including of its special benefits (Ahmed, 2009). Garment workers will confront the long-lasting impacts especially related to their health-issues, monetary hardship and failure to pay for fundamentals such as food and future employment opportunities during COVID-19 pandemic (Kabir et al., 2020).

The flexibility of the supply chain depends on the capability of the person involved on its management and on the broader arrangement indeed counting competitors (Scholten et al., 2019). Buyer's discernments of supply disturbance probability are emphatically related to their selection of buffer and process-oriented hazard relief strategies and inclination for process-oriented chance moderation strategies (Vanpoucke and Ellis, 2019). Digital technology can bolster the capability for the concerning the part of resilience practice in progressing patient safety (Rubbio et al., 2019). Resilience does not depend on all organizations within the supply chain but or maybe on the company able to reconfigure the assets to control for the disruption (De Sá et al., 2019).

Jüttner and Maklan (2011) observed that if supply chain resilience decreases the negative consequences of supply chain risk events by ensuring recovery to a better state or the equivalent previous state at least, it should have the potential to decrease vulnerability of supply chain. However, the authors observed that highly vulnerable supply chain may have resilience of any extent, which implies high or low resilience is not necessarily related to the level of vulnerability. Pettit et al. (2010) have argued that not necessarily a returning to pre-disruption supply chain after disruption would be beneficial rather learning how to adapt may be worthy. Researchers from different disciplines are broadly centering their considerations for resilience because it could be a multi-disciplinary concept (Hosseini et al., 2019). Pre-disruption and post-disruption are included in the resilience which is principal perspectives of disaster preparedness and emergency management (Pettit et al., 2019).

Lee (2004) suggested raising three supply chain qualities, commonly known as the Triple-A Supply Chain: agility, adaptability and alignment in order to achieve sustainable competitiveness even after any disruption. Christopher and Peck (2004, cited in Pettit et al., 2010) have suggested four key principles through which supply chain resilience could be created: (1) resilience can be built into a system before a disruption takes place, (2) need for a high level of collaboration to identify and manage risks, (3) quick reaction to unforeseen events and (4) a culture of risk management.

2.3 Current context of RMG sector during COVID-19

The primary initiative government took to address spread of novel COVID-19 was declaring a general holiday which compelled the garments factories to close down immediately on March 24, 2020. The government has requested the owners not to terminate workers. By the end of March 2020, government announced the impetus package of BDT500 billion (equivalent USD 6.25 billion) to help the industry to minimize the impacts from sudden shut down and cancellation of orders. This financial support was intended for the continuation of wages for labors for up to three months. Factory owners are supposed to use this benefit of funding from the stimulus package at the annual rate of two percent. The precondition for availing the fund also included payment of salaries and wages made either to a bank or mobile phone account directly by the government involving Bangladesh Bank, the central bank. In doing so, the manufacturer has to provide the evidence with the salary sheet, workers list and the account number to the disbursing authority. The factory gets six-months of grace period where repayment would start from the seventh month of receiving the money. There were some private initiatives as well, for instance HSBC Bangladesh announced a short-term loan up to one year with a principal moratorium for four months for the owner of the garments which could be used to support miscellaneous payments. Since HSBC does not allow the moratorium period for more than four months, clients do not require to pay any installment within the time and during the crisis moment. The central bank has urged other commercial banks to come up with similar support. Besides, government has also sought USD one billion from the International Monetary Fund (IMF) and the World Bank. The Industriall Bangladesh Council (IBC) has ensured government about workers payment and safety against COVID-19. Government, BGMEA and IBC are monitoring these activities under the leadership of the labor ministry.

On regards supply chain resilience, COVID-19 has put supply chains in a vulnerable situation. Not unlike, RMG industry has been immersed in an unstable environment, with vulnerabilities testing its supply chains, being an unique opportunity to learn how it is being performed amid this recent reality.

2.4 Supply chain vulnerability

Supply chains are becoming more complex as a result of environmental change and globalization, and hence, in order to apprehend the dynamics of turbulence and complexity in supply chain, supply chain resilience research requires a holistic view (Pettit et al., 2010). Supply chain risk management attempts to reduce supply chain vulnerability, while supply chain resilience aims to develop adaptive capacities to prepare for unexpected events and to respond to and recover from subsequent disruptions (Jüttner and Maklan, 2011; Ponomarov and Holcomb, 2009). Supply chain resilience management is a proactive tool which has the potential to complement and enhance usual risk management of organization, although not all risks are preventable (Petit et al., 2010; Jüttner and Maklan, 2011). Pettit et al. (2010) have argued that the foundation of supply chain resilience depends on how to deal with the factors resulting in supply chain disruptions including among others globalized supply chains, specialized factories, increased outsourcing, increased volatility of demand and technological innovations. Supply chain managers are becoming more concerned about vulnerabilities arises from such disruptions although there are instances where disruptions bring opportunities. In order to enhance the performance of supply chains amid those vulnerabilities, it is relevant to understand the aspects related to the capabilities of supply chain's resilience.

2.5 Supply chain resilience capability

In order to perform well both under normal scenario and in quick recovery after disruptions, Tang (2006) suggested nine supply chain strategies: postponement, strategic stock, flexible supply base, make-and-buy, economic supply incentives, flexible transportation, revenue management, dynamic assortment planning and silent product rollover. As an extension, Pettit et al. (2010) have proposed a broader view and explained that supply chain resilience increases as capabilities increase and vulnerabilities decrease (Figure 1), hence, providing two factors for intensive concentration: vulnerability and capability. Developing capabilities that best suits overcoming vulnerability of the supply chain creates a state of balance between investment and risk, referred as “balanced resilience” while eroded profitability and excessive risk are the unbalanced resilience.

Supply chain resilience, a multidimensional and hierarchical construct, consists of three primary dimensions: proactive capability, reactive capability and supply chain design quality (Chowdhury and Quaddus, 2017). Twelve sub-dimensions of these three primary dimensions operationalize the supply chain. Chowdhury and Quaddus (2017) has argued that the supply chain resilience scale better predicts supply chain operational vulnerability and performance, which also conforms fitness criteria of dynamic capability theory.

In terms of measurable variables, supply chain resilience framework is the first to define resilience (Pettit, 2010). Pettit (2010) has identified that the framework recognizes the need to balance managerial capabilities with the inherent vulnerabilities of the supply chain design and environment in which it operates. The author has also identified 14 unique capabilities which contribute to increasing a supply chain's level of resilience. Carvalho et al. (2012) has proposed a mapping framework to improve supply chain resilience, which allows identification of existing supply chain operation and possible transition states, together with points of vulnerability.

While factories would clearly incline toward to have a high capacity for both capability and vulnerability, it is more likely that companies will have a mix of these qualities. In particular, given asset goals and competitive components, companies ought to select where it is best for them to contribute constrained resources. Figure 2 shows the matrix for capability and vulnerability, which characterizes conceivable position that companies might find itself in with regard to changed levels of these characteristics.

4.1 RMG sector's supply chain resilience capacity

The fast spread of COVID-19 has affected businesses around the world making trade officials reexamine and reassess the practicality of their operations. Typically, it is particularly apparent when it comes to those in SCM where companies are continually being forced to guarantee that merchandise and supplies to reach those in require. Having to bargain with request stuns, logistics limitations, local and international shutdowns, the supply chains of companies are being required to be dependable against the scenery of unstable conditions. Most of the companies presently are considering prompt short-term effect of their supply chains with a center on getting their fulfillments done. Some of them are attending to learn a few difficult lessons from COVID-19 which can constrain them to think around the key approach to supply chains with an accentuation on building resilience. Amid the widespread period when producer found their budgetary misfortunes, government and other organizations are all of a sudden taking few activities to play down this disturbance. Producers requested policymaker to open all the industrial facilities with highest level of security for labors and employees. During the lockdown period when other sectors remain closed, they open plant with a few terms and conditions fair to play down their misfortunes.

Table 2 lists the 14 capability factors with their sub-factors (Pettit et al., 2010). This compilation provides the existing and proposed factors, responsible and status of RMG sector of their sub-factors. This gathering gives the primary itemized scientific categorization of flexibly chain strength, permitting the board to build up an arrangement of capacities adjusting their intrinsic example of vulnerabilities, as per the supply chain resilience framework.

4.2 Findings discussion

Garments manufacturers have been trying to find their way to remain resilient during disasters, like pandemic this time. Since there are a lot of uncertainties on both supply and demand sides, which generates tough supply and demand challenges, a combined effort including the support of government, international buyers, local organizations, garments organizations and organizations of labor rights are required. However, a concerted effort including the major stakeholders mentioned above is very unlikely, because level and dimension of interest vary among the stakeholders. Bangladesh's overdependence on clothing sector may end up being its Achilles heel. Large-scale order cancellation and postponement is causing a liquidity emergency over the division, provoking the BGMEA to advance for help, both from global buyers and the government. While the government has over and over been requesting that individuals remain at home in endeavors to contain the spread of the infection during the pandemic period during the lockdown throughout the country, BGMEA and BKMEA announced in a joint statement that factory office can open only for disburse wages and other payments during the period with the help of respective trade bodies and industrial police.

The results were obtained through interview covering the fourteen capability factors of supply chain resilience based on Petit et al. (2010). Respondents have been discussed about extravagantly at their interviews with respect to the components of fourteen sub-factors of capabilities. Table 1 appeared their supposition in see of components, mindful and status of the factors. Results were then structured according to each one of the fourteen capability factors considering the responses gathered. Most of the factors are dependable with the inside partners like buyers and manufactures and a few of them are moreover dependable moreover with the outside partners like organizations, government. All the components of the capability factor have been discussed on the premise of current setting that given by the respondents. It moreover has been analyzed the roles and responsibilities of buyers, manufacturers, suppliers and other outside partner to relieve the emergency conjointly to construct up supply chain resilience.

The supply chain resilience model has extraordinary potential for giving administration knowledge into their strength, weakness, threats and needs. Manufacturers will have detailed information on their strengths by identifying high rated capability factors with their sub-factors and also identity their current resources and strengths for maximizing uses. Figure 1 shows the supply chain resilience framework which shows not only a matter of strength, it represents the balance between capabilities and vulnerabilities of the manufacturing organizations. It also shows that balanced and unbalanced resilience when vulnerabilities and capabilities do not match each other. To create a balanced resilience, it must make strong capabilities in the zones of collaboration, visibility and flexibility in order to effectively manage their interrelated operations between different levels of suppliers and customers. Figure 2 shows the measurement of resilience matrix that possible position that companies find themselves in with regard to varied levels of the quadrants. Supply chain exhibiting low capabilities with high vulnerabilities would have fragile quadrant as a disruption. For example, the current scenarios are all the factories closed due to countrywide lockdown and also orders are canceled from international buyers. Another possible attribute when all the organizations including the Bangladesh government support them whereas world scenarios will not be in favor of them or countrywide situation does not change whereas international support with them. The best possible attributes are hardy where low vulnerable with high capability. For example, the business will get strong support from both national and international, it's easy to get back. There are two other middle positions between fragile and hardy. These two positions can explore the result where the capabilities and vulnerabilities don't match each other.

The ultimate goal of the finished items is for the most part traded to the EU an American market and these rangers are unequivocally influenced and due to countrywide lockdown, even though most of the buyers are not interested to require the items which are requested. Due to eccentric circumstance, buyers made arrange a certainly crushing their one or more season instead of the standard season, as a result chain of the all the sections are influenced. In spite of the fact that a few of the buyers are committed to producers to recuperate their misfortunes mostly in numerous ways like taking the requested products gradually, put arrange more than the standard amount. Bangladesh government, BGMEA president, manufacturers are ceaselessly communicating with the worldwide buyers to share the display scenario as they accept that buyers can moderate the disturbance for the most part. In spite of the fact that governments, a few national and worldwide organizations, labor organizations are attempting to contribute different ways to play down this disturbance. People group from this trade with their encounter have communicated their concerned that it's not so simple to urge back to typical inside a really brief time with the financial and others support.

5.1 Practical and theoretical implications

This research reflects a wide view of the literature review about resilience components of the SCM within the fashion industry, especially related to relation between capabilities and vulnerabilities. From the unbeneficial firms to successful ones, resilience approach was one of the keys. The research identified the capabilities components those can fill this expertise gap and providing the fundamental knowledge to handle those rising disturbances way better. Management in garments industry must advance a center on resilience as well as learning from current occasions to make strides decision-making. Moreover, this study shows the importance in effectively coordinating capabilities and vulnerabilities in SCM to extend competitiveness.

The framework recognized the balanced and unbalanced strength with the capability's components and characteristics vulnerabilities of the supply chain arrange and the environment in which it works. Companies can find themselves with their capability's components and natural vulnerabilities from the resilience network with the four conceivable positions. The evidences from this study may effectively support supply chain's practitioners on a more assertive decision-making with regards capabilities aspects of supply chain's resilience.

In terms of theoretical implications, this research brings relevant contribution with regards the resilience management in supply chains. This lesson learned from the COVID-19 context, especially from RMG industry in Bangladesh, provides insights in terms on how capabilities management in the face of vulnerabilities may impact directly on the supply chain performance. Although this study has its limitations in terms of generalization, it shows important drivers to future empirical and broader studies, being the basis for future quantitative studies related to the aspects of capabilities and vulnerabilities on supply chain' resilience.