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This report details the results of a study on the impact of transportation and
logistics in the Textile industry. This work takes a comprehensive look at issues related to
the transport and logistics system and how they impact the competitiveness of the textile
sector. The study focuses the provision of trade support services and supply chain
management surrounding the movement of imported inputs and exported finished goods.
It aims to (1) demonstrate the importance of transport and logistics within the context of
increasingly complex demands of the global textile market, and how various constraints
and weaknesses within transport and logistics system can increase transaction costs and
affect competitiveness; (2) highlight critical weaknesses and bottlenecks within the
transport and logistics system, and (3) identify actions to reduce costs, enhance reliability
and increase efficiency.


The textile sector represents almost 25 percent of export revenues and is the one of
the largest single product categories of exports for the country exports. The inherent
uncertainty of demand for fashion goods, their relatively low order volumes, and short
order cycles is bringing new challenges and opportunities to the manufacturers. The new
competitive environment significantly increases the importance of logistics and
transportation management for the export sector. In particular, it requires exporters to (1)
be more adept at managing the inbound flow of goods from international suppliers, (2) be
able to quickly and reliably manage production and delivery schedules over a network of
subcontractors, and (3) ensure timely and reliable distribution to buyers. Improving
performance along the shipment processes will directly impact the costs and
competitiveness for the sector. Issues affecting transport and logistics were analyzed from
several different perspectives: the particular activities that must be performed to meet
buyers’ needs; cost contributors for a sample of imported and exported shipments; the
private and public sector participants involved in the shipment process; and an
examination of a wide range of supply chain models currently prevalent in the industry.

The analysis suggests that the key opportunities for improving transportation and
logistics performance for textile exporters are:

 Increase the capacity and capability of border crossings to handle greater

throughput. Border delays can contribute up to 35 percent of total freight costs on
certain routes.
 Customs procedures for duty exempt goods imported for ultimate re-export need
to be simplified, accelerated, and made more export friendly.
 Exporters have opportunities to reduce costs in key areas such as freight and
shipment consolidation by building tighter linkages with their supply chain
partners and taking a longer-term view to mutual operational challenges.
 All industry participants have a significant opportunity to increase efficiency and
reliability by selectively adopting technologies that improve operations and
provide linkages to upstream and downstream partners.
 Manufacturers must develop transportation and logistics competencies, and use
these capabilities to create value for buyers and compete against global
competitors with lower cost.
 Certain aspects of the physical infrastructure, such as particular roadways and
container ports, are already under capacity and need to be upgraded.

The logistics industry in India is evolving rapidly and it is the interplay of

infrastructure, technology and new types of service providers that will define whether the
industry is able to help its customers reduce their logistics costs and provide effective
services (which are also growing). Changing government policies on taxation and
regulation of service providers are going to play an important role in this process.
Coordination across various government agencies requires approval from multiple
ministries and is a roadblock for multimodal transport in India. At the firm level, the
logistics focus is moving towards reducing cycle times in order to add value to their
customers. Consequently, better tools and strategies are being sought by firms in order to
enhance their decision making.

The textile and clothing industry includes a series of industrial activities that, from
top to bottom of the production chain, are the manufacture of man-made fibres, raw cloth
(spinning, weaving and finishing textiles), other types of textile manufacture (carpets,
nonwovens, etc.), making clothes and, finally, making textiles for the home.

The stages higher up the textiles chain are essentially capital-intensive, while
clothing is more labor-intensive. The end of the industry’s production chain is
distribution, which is not a manufacturing activity, but has increasingly close ties with the
industry. Below is a description of the above activities:
Man-made fibers

The area of man-made fibers is the start of the textile value chain. It is dedicated to
manufacturing fibers that do not occur naturally, whether from oil-derived monomers
(synthetic fibers) or by treating cellulose (artificial fibers). The result or final product is
the fibers subsequently used in the spinning process.

Raw cloth

This refers to spun, woven and finished textiles, and is the basis of the textile
chain. The spinning process consists of processing fibers into yarn using the spinning
processes and machines appropriate to each fiber. Weaving consists of processing a series
of yarns into a smooth surface. The result can be either warp-and-weft, or full-cardigan
fabric, depending on the process followed. Finally, during the finishing process, chemical
and mechanical processes are applied to the fabrics to give them final appearance.


The clothing industries are knitted fabrics and garment making. Garment making
is the process by which fabric is turned into an item of clothing or knitwear, for use and
sale. It includes all activities relating to cutting and joining pieces of weft fabric,
knitwear, leather and fur.

Distribution and logistics

This area covers from supply management to transportation and distribution of

finished garments. In addition to the previous characterization, the industry could be
classified more traditionally, on the basis of the primary materials used and the
corresponding technology. In this case, a distinction is made between the areas of cotton,
wool, silk, dyes and finishes, etc. Although technological developments in the market are
rendering classifications by primary material less suitable, the fact remains that many
business associations and institutions continue to use them, as do many studies and
Finally, the industry can also be classified from the perspective of the labor market, by
identifying various areas in which different types of professional profile can be found.
The following are the main areas of the industry that have been identified:

Garment design and making

This includes all occupations related to designing clothing, as well as the

processes involved during the stages of making it. Design is an activity that adds value to
a product and is one of the industry’s most important options. Fashion designers deserve
special mention here, as do graphic designers specializing in textiles.

Buying, storage and distribution

Distribution has been becoming increasingly important in the textile industry and
is now one of its most strategic activities. This area needs profiles such as purchasing
managers and logistics coordination managers.

Management of productive processes

The new configuration of textile markets and the incorporation of new technologies are
significantly affecting management, production, storage, distribution and logistics
processes. To respond to these changes, the profiles such as integrated management
system managers, production process and time analysts and textile consultants are

Marketing and point-of-sale management

This is an area of great importance in the introduction of non-traditional activities.

Professional profiles with strategically important knowledge who could play a key role in
developing companies’ future plans are needed. Fashion product managers and
commercial expansion specialists are particularly important within this group.
Technical textiles

Innovation in processes and products has been gaining importance in the textile
industry, to the extent that there is now a clear tendency to focus on technical textiles and
there is an area fully dedicated to this activity. Textile research experts and assemblers of
technical textiles are particularly important in this area.

The importance of transport and logistics services has increased dramatically due
to the increasingly complex demands of the international economy. This increasing
complexity stems from (1) integrated global manufacturing and production networks, (2)
an increasing need for just-in-time logistics, (3) growing usage of intermodal transport
involving one or more modes of transportation (road, air, maritime or rail) and (4) new
security considerations. As these demands become more complex, so do the processes
required to complete trade transactions that involve multiple steps, a myriad of players
and a range of legal and regulatory frameworks. With costs added at each step of the
process, the quality, cost and efficiency of transport and logistics services greatly affects
the value of a good at its final destination and thus the manufacturer’s ability to be
globally competitive.

Weaknesses in many developing and transitional countries trade support services

sectors contribute to high transaction costs and a limited ability to meet the transport and
logistical demands of an increasingly complex global economy, thereby undermining the
competitiveness of goods and thus the ability of manufacturers to take advantage of
emerging global market opportunities. With reduction in the tariff and non-tariff barriers
opening access to key industrial markets, countries that are unable to reduce transaction
costs and increase speed to market will find it more difficult to reap the benefits of
expanded exports, foreign investment and economic growth. Since the significance of
weaknesses in the trade support service industry—and their resulting economic costs—
vary from country to country, it is important to evaluate the specific condition and market
environment in which service providers operate prior to developing national initiative.
This should include a constraints analysis covering various modes of transport,
intermodal networks, infrastructure, custom practices and procedures, trade related
banking and financial practices, transport intermediaries and the overall development of
the country’s transport and logistics system. In addition to analyzing the trade support
service industry as a whole, it is crucial to evaluate (1) how particular players within
important export sectors interact amongst themselves; (2) the transport and logistics in
the import of inputs and materials; (3) the export of finished goods. By identifying
weaknesses between these interactions and supply chain management, it is possible to
develop interventions that address sector specific success factors that impact
competitiveness. The textile sector is one of the most dynamic and demanding sectors in
the world, with global sourcing networks based on cost, quality, reliability, and proximity
to market. In past decades, this sector has been an important export market and source of
foreign investment in many developing and transitional economies. By, addressing the
issues surrounding the movement of goods and supply chain management within the
sector, the producers can develop the tools necessary to remain competitive in this critical
export market.


Textile industry plays a significant role in the economy. The Indian textile
industry is one of the largest and most important sectors in the economy in terms of
output, foreign exchange earnings and employment in India. It contributes 20 per cent of
industrial production, 9 per cent of excise collections, 18 per cent of employment in
industrial sector, nearly 20 per cent to the country’s total export earnings and 4 per cent
ton the GDP. The sector employs nearly 35 million people and is the second highest
employer in the country. The textile sector also has a direct link with the rural economy
and performance of major fiber crops and crafts such as cotton, wool, silk, handicrafts
and handlooms, which employ millions of farmers and crafts persons in rural and semi-
urban areas. It has been estimated that one out of every six households in the country
depends directly or indirectly on this sector.

India has several advantages in the textile sector, including abundant availability
of raw material and labor. It is the second largest player in the world cotton trade. It has
the largest cotton acreage, of about nine million hectares and is the third largest producer
of cotton fiber in the world. It ranks fourth in terms of staple fiber production and fourth
in polyester yarn production. The textile industry is also labor intensive, thus India has an

The key advantages of the Indian industry are:

 India is the third largest producer of cotton with the largest area under cotton
cultivation in the world. It has an edge in low cost cotton sourcing compared to
other countries.
 Average wage rates in India are 50-60 per cent lower than that in developed
countries, thus enabling India to benefit from global outsourcing trends in labor
intensive businesses such as garments and home textiles.
 Design and fashion capabilities are key strength that will enable Indian players to
strengthen their relationships with global retailers and score over their Chinese
 Production facilities are available across the textile value chain, from spinning to
garment manufacturing. The industry is investing in technology and increasing its
capacities which should prove a major asset in the years to come.
 Large Indian players such as Arvind Mills, Welspun India, Alok Industries and
Raymonds have established themselves as 'quality producers' in the global market.
This recognition would further enable India to leverage its position among global

The textile industry employs about 40 million workers and 60 million indirectly.
India's overall textile exports during 2015-16 stood at US$ 40 billion. The Indian textiles
industry is extremely varied, with the hand-spun and handwoven textiles sectors at one
end of the spectrum, while the capital intensive sophisticated mills sector at the other end
of the spectrum. The decentralized power looms/ hosiery and knitting sector form the
largest component of the textiles sector. The close linkage of the textile industry to
agriculture (for raw materials such as cotton) and the ancient culture and traditions of the
country in terms of textiles make the Indian textiles sector unique in comparison to the
industries of other countries. The Indian textile industry has the capacity to produce a
wide variety of products suitable to different market segments, both within India and
across the world.

Market Size

The Indian textiles industry, currently estimated at around US$ 108 billion, is
expected to reach US$ 223 billion by 2021. The industry is the second largest employer
after agriculture, providing employment to over 45 million people directly and 60 million
people indirectly. It contributes approximately 5 percent to India’s Gross Domestic
Product (GDP), and 14 per cent to overall Index of Industrial Production (IIP).
The Indian textile industry has the potential to reach US$ 500 billion in size
according to a study by Wazir Advisors and PCI Xylenes & Polyester. The growth
implies domestic sales to rise to US$ 315 billion from currently US$ 68 billion. At the
same time, exports are implied to increase to US$ 185 billion from approximately US$
41 billion currently.


The textiles sector has witnessed a spurt in investment during the last five years. The
industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth
US$ 1.85 billion during April 2000 to March 2016.

Some of the major investments in the Indian textiles industry are as follows:

 Trident Group, one of the leading manufacturers and exporters of terry towel,
home textile, yarn and paper in India, has entered into a partnership with French
firm Lagardere Active Group, to launch a premium range of home textiles under
the renowned French lifestyle brand Elle Décor in India.
 Raymond Group has signed a Memorandum of Understanding (MoU) with
Maharashtra government for setting up a textile manufacturing plant with an
investment of Rs 1,400 crore (US$ 208.76 million) in Maharashtra’s Amravati
 Reliance Industries Ltd (RIL) plans to enter into a joint venture (JV) with China-
based Shandong Ruyi Science and Technology Group Co. The JV will leverage
RIL's existing textile business and distribution network in India and Ruyi's state-
of-the-art technology and its global reach.
 Giving Indian sarees a ‘green’ touch, Dupont has joined hands with RIL and Vipul
Sarees for use of its renewable fiber product Sorona to make an ‘environment-
friendly’ version of this ethnic ladies wear.
 Snapdeal has partnered with India Post to jointly work on bringing thousands of
weavers and artisans from Varanasi through its website. “This is an endeavour by
Snapdeal and India Post to empower local artisans, small and medium
entrepreneurs to sustain their livelihood by providing a platform to popularize
their indigenous products.
 Welspun India Ltd (WIL), part of the Welspun Group has unveiled its new
spinning facility at Anjar, Gujarat - the largest under one roof in India. The
expansion project reflects the ethos of the Government of Gujarat’s recent ‘Farm-
Factory-Fabric-Fashion-Foreign’ Textile Policy, which is aimed at strengthening
the entire textile value-chain.

Size of Indian Textile Market



In order to compete in the today’s global textile market, the sector must be able to
meet critical success factors expected by buyers. Although it is unlikely that Bulgarian
firms will be able to compete with locations such as China in terms of cost, the sector can
use both its ability to produce quality fashion goods and its proximity to International
markets and fabric suppliers to remain an important player in the international garment
supply chain. Within this context, an efficient transport and logistics system is critical to
remaining competitive.

Proximity to market only provides a competitive edge if producers are able to

guarantee rapid and reliable response to orders, including the procurement and delivery
of input materials, production and delivery of finished goods to the destination markets.
If the movement of goods both inputs and finished goods is hampered due to the
bottlenecks at the border, inefficient logistics services or transport problems, proximity is
much less of an advantage. If producers are unable to guarantee or reduce time to
delivery—which can partially compensate for higher cost production— buyers may
work with companies elsewhere.

In a similar sense, transport and logistics are important to capitalize on its ability
to produce high quality fashion goods. Orders for small series fashion goods often require
much shorter periods between order and delivery. In Bulgaria, some producers are able to
deliver finished goods to a retail store or warehouse within 21 days of receiving an order.
Even when all parts of the production process work well, delivery times are tight. If
problems or delays occur along the logistics chain, it is likely that the order will be
delivered late. While buyers will occasionally forgive late shipments, consistent late
shipments will cause a producer to be seen as unreliable, even if it is other players along
the logistics chain (e.g. border agencies, logistics service providers, etc) who are
responsible for the delays.
The cost of transport and logistics is also critical. The exporters cannot afford
additional costs attributed to inefficiencies within the transport and logistics systems. If a
certain producer is already close to the buyer’s threshold of acceptable production cost,
higher transport and logistics costs can cause a buyer to look elsewhere. The way
producers manage their supply chain is also an important determinant of competitiveness.
For example, large producers with sub-contracting networks must have the capacity to
manage the distribution of inputs and pick up of finished goods, coordinating with both
transport and logistics providers and small firms with limited capacity. In order for
producers of to move from CMT into full package or brand manufacturing, they must
develop thecompetence to manage all aspects of their supply chain as opposed to solely
production when producing CMT. This includes procurement of materials and other
inputs, planning production, managing inventory, procuring and coordinating transport
and logistics service providers, and communicating with suppliers, sub-contractors and
customers. Without this superior capability, the firms will be unable to compete in higher
value niche markets that present current opportunities for them.


The transport and logistics is only one component of export competitiveness.

Other issues such as product design capacity, product differentiation, quality upgrades
and production costs will continue to remain critical success factors and require attention
by the textile sector, and when appropriate, policymakers. At thesame time, however,
these players must also view transport and logistics as a success factor, both directly and
indirectly, that will determine the sector’s competitiveness. As such, it is important to
identify bottlenecks, inefficiencies, cost factors and supply chain weaknesses that hamper
abilities of producer to meet buyer’s demands (e.g. just-in-time delivery, rapid response)
and capacity (e.g. supply chain management) to move into full package and brand
manufacturing servicing niche markets, and to develop initiatives that enhance transport
and logistics contribution to export competitiveness.


The Indian logistics sector has typically been driven by the objective of reducing
transportation costs that were (and often continue to be) inordinately high due to regional
concentration of manufacturing and geographically diversified distribution activities as
well as inefficiencies in infrastructure and accompanying technology. Freight movement
has slowly been shifting from rail to road with implications on quality of transfer,
timeliness of delivery and consequently costs except for commodities which over long
distances, predominantly, move through the extensive rail network.

Functional link in the supply chain

Participants in trade process

Participant Function Example of participant

Transportation Move cargo  Trucking Companies
Carriers  Maritime Shipping
 Airlines
 Rail Operators
 Intermodal service
Infrastructure Provide the services to support  Port Operators
Operators the movement of cargo  Airport operators
 Stevedores
 Container Leasing
 Equipment Repair
Logistics services Provides value-added services to  Agents
providers get the right goods to the right  Freight forwarders
place in the right condition at the  Customs agents
right time  Integrated Logistics
 Quality & Inspection
 Warehousing
 Consolidators &
 Packing services
 Ship brokers
 Bonded warehousing
Financial Service Provide financial and insurance  Insurance
Providers services to support the movement  Buyers Bank, Sellers
of cargo Bank
 General Insurer
 Marine Insurer
Governmental and Provide policy level support,  Port Authorities
Regulatory Agencies taxation and oversee  Customs
implementation of  Regional and Local
standards/practices to ensure safe, Authorities
hygienic, and internationally  Ministry of Health,
accepted principles of cargo Environment,
movement  Agriculture, etc.
 Ministry of Labor
 Ministry of Finance
 Ministry of
Textile industry Make up the supply chain that  Buyers
involves a range of roles and  Buyer’s agents
responsibilities related to  Suppliers
procurement, production and  Lead domestic
shipment of final goods. manufacturers
 Small sub-contractor
Due to a liberal transport market, exporters and manufacturers can utilize the
services of trucking companies. In most cases, international trucking companies only
provide services for international transport. Transport service providers offer a wide
range of services to textile producers. This not only includes standard services such as
containerized transport, but also the provision of specialized equipment for the shipment
of hanging garments.

While the high level of competition within the sector helps lead to low cost
transport, some issues exist in the provision of services within the sector:

 While the sector is modernizing, there is a significant proportion of the trucking

fleet that is ageing. Not only does this impact the quality of service, but also it
impacts the flow of traffic, as the older trucks tend to travel much slower than
newer trucks. Given that many transport corridors do not have multiple lanes, this
can create long queues and bottlenecks.
 The segmentation of the sector and small size of most firms has resulted in quality
problems. Some users of transport services complain that it is hard to find good
service providers, particularly among firms with 5 or less trucks. These operators
do not manage adequate fleet capacity to guarantee availability of service for large
customers. They compete instead on price, and customers frequently cite weak
management and poor scheduling as concerns.
 Although users comment that the availability and quality of international transport
is adequate—from both international and domestic service providers—it is harder
to find high quality and reliable services for domestic transport. This caused
distribution difficulties for some supply chains with sub-contractor networks.

In general, there are few operating issues for firms within the sector. Nevertheless,
a key issue facing haulers is the requirement of permits to transit other countries within
the region. According to sector representatives, there are too few transit permits
available, which severely restricts access to markets.
Goods are transported predominantly by road and rail in India. Whereas road
transport is controlled by private players, rail transport is handled by the central
government. With the second largest network in the world, road contributes to 65 per cent
of the freight transport. Road is preferred because of its cost effectiveness and flexibility.
Rail, on the other hand, is preferred because of containerization facility and ease in
transporting ship-containers and wooden crates. Sea is another complementary mode of
transport. Ninety five per cent of India’s foreign trade happens through sea. India has 12
major ports, six each on the West and East coasts and 185 minor ports. There is also
evidence of an, across the board, increase in freight traffic for all modes indicating an
increased logistics activity.

In keeping with the increasing demand for road transportation, the National
Highway Authority of Indian (NHAI) has been strengthening and widening national
highways in multiple phases. As part of the National Highways Development Project, the
work on the development of golden quadrilateral (connecting Delhi, Mumbai, Chennai
and Kolkata) and the North-South and East-West links are started in 1998. It will build
13000 km expressways that would connect the nation. NHAI is investing about $650mn
towards the development of an Intelligent Transportation System (ITS) which will make
transport services on the highways efficient and automating many processes like toll
collection etc. Because of the growing opportunity and potential for high revenue, the
Ministry of Railways has been taking measures to expand the rail connectivity and
recapture the market share of freight business. With the proposed dedicated west and east
freight corridors, the goods trains are expected to run at 100kmph. The West and East rail
corridor of 1469-km and 1232-km will be built and equipped with the latest centralized
traffic control systems. Indian Railways has also decided to collaborate with bulk users of
freight transport to build the rail network in a Public Private Partnership (PPP) mode. The
first project line comprises nine public and private sector companies that are building 82-
km rail line between Haridarpur and Paradip. Recently several steel companies have also
shown interest in linking iron and coal mines in Orissa with a 98-km rail line.
Government policies have been another driver of change in the logistics industry.
The trend towards higher road cargo traffic as compared to rail is going to require better
logistics control and coordination. The golden quadrilateral road project and the east &
west rail corridors are expected to change the reactiveness of Indian firms through shorter
lead times as well as lower maintenance costs on the transport equipment. They also have
the potential of reducing the procedural delays on highways by reducing the number of
checks and related stoppages of vehicles. Its impact on perishable good will be most
significant. Thirteen States and three UTs have already amended the State laws allowing
private sector participation in direct purchases of textile goods from local manufacturers
which is making procurement more efficient and is bringing better technology as well as
products in the rural production and distribution network.

Banks have developed venture capital funds for logistics players. Small Industries
Development Bank of India or SIDBI, for instance, has invested $ 2.3 mn in the Mumbai
based firm Direct Logistics. The unbundling of the logistics supply chain will lead to
business opportunities and add value to the customers. An interesting example is that of
Reliance Connect Service Centers that have been established on Indian highways by
Reliance industry along with petrol stations. The Connect Centers provide a place for
truckers to relax (sometimes with overnight stay facilities), send information (including
data) to parent firms on their location, completed transactions etc., receive
material/instructions from the firm, remit money to parent firm, etc. It has become a one-
stop shop for truckers and their companies to keep in touch. Similarly, once VAT is
introduced, it will simplify the process of goods servicing and will lead to rationalizing of
many operational decisions. At the policy level, the issues of infrastructure and
integration of the national logistics network remain the two most critical areas that
require attention. The growth of infrastructure, since 1991, has been quite extensive
(covering a wide geographical area) as well as strategic – linking the key industrial,
consumption and transshipment centers.
However, some imminent weaknesses need be addressed. Movement beyond the
golden quadrilateral is required to bring goods from up country production sources to
main shipment centers. The rate of growth of expressway has to increase. Poor road
conditions increase the vehicle turnover, pushing the operating cost and reducing
efficiency. National highways are being upgraded but they account for a meager 2
percent of the total road network. More importantly, due to non-contiguous development
of expressways, truck traffic has to frequently move from the expressway on to old
national highways and vice-versa. This is inconvenient and is restricting the utilization of
the excellent road network that is being developed. The pricing of the toll on these
expressways especially for cargo traffic has also been a deterrent to usage perhaps, one
needs to understand the price elasticity of this demand and develop appropriate price
packages for heavy and frequent users. Here, the role of transport technology needs to be
mentioned as well. Once the cost of manufacturing multi-axle trucks comes down, it will
see higher penetration and consequently lower per unit cost of transportation. Volvo is
trying to develop this market but the volumes of high capacity truck continue to be low
(about 7 per cent of the total truck production, IAESI, 2006-2007). The East & West bulk
rail transport corridor will divert some traffic from road provided the secondary
movement (i.e., from the nearest station to the plant/warehouse) can be minimized and
the issue of security of the goods is addressed adequately. Similarly, river navigation in
the North and North-Eastern India can pose useful options for cargo movement in
hinterland where road congestion is high.

The main fields are:

 Procurement Logistics
 Production Logistics
 Distribution Logistics
 After sales Logistics
 Disposal Logistics
Procurement Logistics: It consists of activities such as market research, requirements
planning, make or buy decisions, supplier management, ordering, and order controlling.
The targets in procurement logistics might be contradictory - maximize the efficiency by
concentrating on core competences, outsourcing while maintaining the autonomy of the
company, and minimization of procurement costs while maximizing the security within
the supply process.

Production logistics: The term production logistic is used to describe logistic processes
within The Textile industry. The purpose of production logistics is to ensure that each
machine and workstation is being fed with the right product in the right quantity and
quality at the right time. The concern is not the transportation itself, but to streamline and
control the flow through value-adding processes and eliminate non value-adding ones.
Production logistics can be applied to existing as well as new plants. Manufacturing in an
existing plant is a constantly changing process. Machines are exchanged and new ones
added, which gives the opportunity to improve the production logistics system
accordingly. Production logistics provides the means to achieve customer response and
capital efficiency. It is becoming more important with decreasing batch sizes. In many
Textile industries a batch size of one is the short-term aim, allowing even a single
customer's demand to be fulfilled efficiently. Track and tracing, which is an essential part
of production logistics due to product safety and product reliability issues is also gaining
importance, especially in the automotive and medical industries.

Distribution Logistics: It has, as main tasks, the delivery of the finished products to the
customer. It consists of order processing, warehousing, and transportation. Distribution
logistics is necessary because the time, place, and quantity of production differ with the
time, place, and quantity of consumption.

Disposal Logistics: Its main function is to reduce logistics cost(s), enhance service(s),
and save natural resources.
Business logistics: It can be defined as "having the right item in the right quantity at the
right time at the right place for the right price in the right condition to the right
customer", and is the science of process and incorporates all industry sectors. The goal of
logistics work is to manage the fruition of project life cycles, supply chains and resultant


Transport and distribution in the right place at the right time, with the least
possible cost, is the aspiration of every manufacturer. Logistics requires the following
activities from manufacturers:

 Designing and construction of fashion products should take dimensions of the

product into account.
 The way, the size and shape of packaging.
 Factors of arranging the commercial packaging and its fitting into transport
 Utilization of cargo and storage space.
 Manipulative characteristics of products, commercial and transport packaging.

As the increasing number of textile manufacturers concentrates their production

capacities in certain regions due to large investments in machinery, the distance between
production facilities and customer increases, as well as the appropriate distribution costs.
Transport and distribution are a significant business cost that sometimes goes up to 15%
of total income in industrialized countries, and in garment industry goes up to 40%. The
usage of distribution channels allows clothing manufacturers to increase the efficiency of
placing their fashion products on the market through intermediaries of fashion marketing
their products to market, their contacts, experience and specialization. In practice, there
are a number of distribution channels. Producer-consumer distribution channel (direct
channel) is considered to be the simplest channel but not the most efficient one. Sales of
clothing can be done without an intermediary and the manufacturer can control all phases
of sales operations. Producer-retailer-consumer distribution channel (short channel) is
typical for garment industry (where many producers sell directly to retail chains that have
their own stores). In this distribution retail channel, a consumer is served better than
when a manufacturer sells directly to consumers.
Supply chain

Producer-wholesale-retail-consumer distribution channel is most commonly used

distribution channel. The practical value of this channel gets smaller since garment
producers more often sell their goods directly to consumers. Producer-agents-wholesale-
retail-consumer distribution channel (long channel) goes through three intermediaries. It
is suitable for products with mass distribution. The choice of distribution channels
depends on the product, or collection of products. According to Kotler products that are
aimed at the target consumer group use intensive or selective distribution, where
intensive distribution is used by less famous brands of products, and selective distribution
offers a choice of ways (selection) they are going to be present in a particular market.
Products intended exclusively for consumers of very high purchasing power (products
from haute couture collections - “haute couture”, designer clothes) use exclusive
distribution (very limited), which puts emphasis on limiting the number of intermediaries
involved in the management of products. Such exclusive distribution often happens in the
moment when producers of exclusive products decide to take control of the level of
services they offer and the services offered by their intermediaries. Then it is possible to
make contract on exclusive dealership that automatically enhances the brand image. Most
often it is accompanied by exclusive sales.

Costs of the inbound and outbound logistics processes described above were
gathered through field interviews and surveys with transport and logistics service
providers. The data requested included transportation costs and time for the entire
process, from the supplier through the production, until the first landed point for exports
in the destination market. While it is impossible to estimate the costs of every step in the
process, the data provided gives an accurate picture of transport and logistics costs
surrounding the movement of goods. The study team analyzed and reported the data in
broad categories because transportation costs are often quoted where several services are
bundled together and offered at one price to the buyer. As a result, it is difficult to
segregate the costs of a specific step.

In addition, different service providers offer different configured bundles,

reducing our ability to compare costs across providers. In some cases, the terms of trade
prevent transportation costs from being known or documented in the industry. For
example, when suppliers in Asia offer goods on a “freight on board” basis (FOB terms)
the transportation expenses incurred prior to that shipment arriving at the vessel are
unknown. Similarly, when buyers pay directly for certain services performed by the
overseas supplier of raw materials (such as packaging) these costs are difficult to identify
and quantify. The cost of transportation and logistics activities varied widely among the
producers based on size, destination of shipment, mode utilized, services required, etc.
Depending on the specifics of the shipment (i.e. type and value of textile or apparel
goods), transport and logistics costs ranged from 2% –40% of the value of the goods
being transported. The majority of inbound costs is attributed to international
transportation, representing 60 to 80 percent of the total cost. Pre-shipment costs
generally ranged from 5 to 10 percent of the total transportation cost, whereas domestic
costs are typically 20 to 30 percent.
Textile supply chain management involves working with a number of suppliers to
ensure all inbound products arrive on time and with the correct quantity. This means you
will have the required materials to produce the textile products and ship out to clients,
customers and suppliers on time. Delays and disruptions anywhere along the textile
industry supply chain will result in money being lost, as products are not created or
delivered on time which can lead to clients not paying when deadlines have been missed.
The textile supply chain services can help your business run smoothly by:

 Efficient and reliable delivery reducing inventory pipeline costs by 2 to 4%.

 Line stoppage chances due to transport issues being cut by up to 60%.
 Helping in receiving, sequencing and materials management functions, planning
productivity can be boosted by 3 to 6%.
 Reducing administration costs by up to 50% of handling multiple carriers for
emergency shipments.


Taking into consideration the comments at the start of this paper, from a “swift”
point of view, companies should, among other strategies, apply coordination and
collaboration with customers and suppliers. But however, adopting the “seasonal model”
or “seasonal model with replacement”, as is the case of the majority of the companies
analyzed (albeit with a degree of flexibility), generates increased levels of stocks because
of the uncertainty and variability that the fashion market entails. Furthermore, although in
most companies there is a department specifically responsible for the coordinated
management of all logistics flows of materials and information (widely known as
“operations”), and despite the fact that some companies claim that they have formal
coordination mechanisms available for the adequate management of logistics flows,
almost half of these state that they lack such mechanisms to look for alternatives in the
supply chain with a broader strategic approach to allow them to improve the quality,
service and costs standards offered to the market.

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