The headaches involved in sourcing from Bangladesh have in the past rendered the cost benefits virtually meaningless for some retailers. Yes, labour and manufacturing is cheap, but when you consider the risk of social unrest, ethical question marks, inadequate logistics infrastructure and insufficient power supplies, many retailers have rightly questioned whether it is worth it.
As a sourcing destination, the country has been on retailers’ radar since the 1990s. However, with the plethora of cost pressures facing the supply chain this year, and the added problem of rising labour costs in China, retailers will need to look at ways to reduce those costs – and one of them is bolstering supply in cheaper countries.
So despite its history of problems, could Bangladesh be the answer? Have some of the problems experienced in the past been ironed out? Or is it still a cheap but logistically challenging source of product?
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(Source: Retail Week)