英国留学生论文指导：巴基斯坦服装行业的经济分析_英国作业_留学生作业

巴基斯坦服装行业的绩效研究

绩效的意义很广泛,因此很难定义以及用一种清晰的方式去描述。绩效在一些时间与生产力相混淆了。这种混淆会导致理解一个真正意义上的概念有问题。事实上生产力是在一个给定的时间内输出或收集的一些产品或服务,但是绩效是一个广义词,其中也包括生产力的一部分,还包括如质量稳定性的其他因素等等。一个行业或组织的有效性取决于资源的使用和以不同的方式使用的结果。在衡量工业/组织性能和有效性方面有一些常用的方法，即利益相关者法,系统资源的方法,竞争价值法和目标的方法。

绩效考核的因素:

绩效评估的另一种方法是金融措施，如投资回报(ROI)和股本回报率(ROE)。直到1990年初，主要重点还是金融措施。但是人们很快意识到金融措施仅覆盖一些行业或组织的检测值，许多其他重要的因素,如持续改进和创新并没有涉及到这些措施(卡普兰和诺顿,1992)。

The Performance Of Garments Industry Of Pakistan Economics Essay

Performance is very broad in its meaning and thus difficult to define and describe in a clear manner. Performance is some time confused with the productivity. This confusion causes a conceptual problem in understanding in its real sense. As a matter of fact the productivity is the output or volume of any product or service in a given time, but the performance is a broader term, which also include productivity as a part but also consist of other factors like quality consistency and so on. Effectiveness of an industry or organization depends upon the use of resources and the outcome of that usage in different manners. Some commonly used frameworks to gauge the industrial/organizational performance and effectiveness are stakeholders approach, system resource approach, competitive value approach and goal approach.

Performance measurement factors:

The other way to measure performance was financial measures like return on investment (ROI) and return on equity (ROE). Till early 1990’s main focus was on financial measures. But very soon, it was realized that financial measures only covers the monitory values of any industry or organization and many other important factors like continuous improvement and innovation are not covered by these measures (Kaplan & Norton, 1992). Moreover, financial measures were also been criticized as their focus is towards the past activities based on previous transactions and they are unable to guide towards any creativeness regarding present and up coming actions (Kaplan & Norton, 1992). The KSA report (1996;1998) discusses that for SME’s, the benchmark of monitory measures was the centre of attention. Hence, the cost is very basic measure to evaluate the performance but this not all about cost. For example, an organization could be successful in working at very low cost but its lead time, productivity and customer satisfaction may not going well. Bagchi (1996) also discussed the comparison of modern and traditional measures. Where as the traditional measures are about the function based and the modern measures are value-based.

KPI:

Due to these barriers in 1990’s, the experts started looking for a system to measure performance based on cost and the customer responsiveness. Kaplan & Norton (1996a) in their next research paper presented balance score card perspective. According to this performance measurement system, different priorities are allotted different weight age and than analysis is done keeping in view the scores achieved in different categories. Additional factors of non-financial measures such as capability of time and resource utilization, flow of information, performance of supplier and risk management were involved in performance measurement (Beamon 1999). Beamon also describes the elements for the performance systems like all the information required to measure, their versatility (in different situations), and their practicality for measurement. So the right sequence to provide us an initial outline for performance measurement system can be stated as follows.

First we need to identify the performance measures, than classify them in their respective groups and develop a system to measure the performance.

Gunasekaran et al. (2001) discussed the performance measurement system from different point of view. Firstly they discussed the performance measurement system in the value chain. They said that performance can be measured at different functional levels like at planning and product design stage, at production stage, at the time of delivery. This should also be measured with respect to the customer feed back and even from supplier side as well. They also looked it at different levels for example at strategic level and functional level.

When we talk about the industry performance, than we have to consider the things at macro level. An industry is a bunch or group of organization offering/producing similar products or services. If we intend to discuss of an industry’s performance in the context of a specific country than we will measure that industry’s contribution in GDP, its earning from foreign trade in terms of foreign exchange and the number of jobs associated with that industry (for skilled and unskilled workers to share country’s employment percentage).

Legacy factors:

Pakistan’s textile industry has a historical heritage. The Indus valley, situated in Pakistan has an ancient background regarding garments. Almost 3000 BC, people in this valley used to grow, spin and weave cotton into garments. But these activities were being done on smaller scale like cottage industries. Only two textile mills were existed, when Pakistan came into being. But after the independence, the textile sector showed tremendous progress and development was made in almost every field of textile.

Especially garments industry is rampart for the economy of Pakistan. Almost sixty percent of the foreign reserves are generated through textile and 46 percent of GDP consists of textile while using 40 percent of total investment through financial institution of the country. Pakistan is fourth largest producer and third largest consumer of raw cotton. Thirty eight percent of the country’s labor force is associated with the textile. Textile sector’s dominance prevailed for years in the country but during the last two decades this industry as a whole and garment sector specifically is facing some serious challenges domestically and internationally. Pakistan’s garment industry is lacking behind due to its low concentration towards adopting latest and efficient technology to get more productivity and a competitive edge. Garment manufacturing process starts from growing cotton, ginning, spinning, weaving/knitting, dyeing, washing (any special treatments and processes), cutting, sewing, finishing and packing. We have outdated techniques in at some stages especially in backward integrations. Pakistani cotton producers do not concentrate on picking the cotton flower from plants and too many contaminations like hair, jute, dust are mixed o lower down the cotton quality. A little care at the time of picking can improve the quality of cotton dramatically. Man-made fibers have better outputs due to non-cotton product, but have less demand as compare to cotton products world over. An other example is at ginning stage, where Pakistan is producing 8 bales in an hour where as in developed countries this number is 60 bales per hour. At spinning and weaving stages, although latest and modern machines have been introduced in some well established textile companies, but our mass production still dependent on the old and less efficient machines for example power and auto looms (Islam 2006). Pakistan’s garment industry is in trouble due to some severe problems in competing the other rival countries and has no or less competitive advantage as well (Johri & Qazi, 2007).

There are 23 to 28% losses on average have been observed in shape of rejection and wastages from knitting to dyeing, finishing, cutting till stitching (Altaf 2008). Different other factors also influence the performance of garment industry of Pakistan. From recent years, floods have been destroyed the major portion of cotton as there are no dams to store and control the excess water during rain season. And we have to import cotton to match the domestic demands. During session of 2007-2008 Pakistan was second largest country to import cotton (Salam 2008).

In recent past years, there are new regional competitors entered in competition like China, Bangladesh and Sri Lanka in addition to India, Vietnam and Thailand in garment industry. Now it is time to build a strategic relationship with the customers to stop them looking for other substitutes. Needs is to adopt customer’s preferences in shape of flexibility and convenience to provide better service. Pakistani companies are not focusing to obtain knowledge and information about customer’s preferences to produce value added garments to achieve customer satisfaction (Riaz 2008). New markets should be explored to enhance the volume to get awareness of new trends for domestic and off shore markets (Rehman & Ali 2008). At present, international buyers are hesitant to build a long term strategic relationship with Pakistani suppliers because of uncertainty regarding the fulfillment of their orders due to energy crises. No buyer will tolerate to put its retail customers in danger, who believe in JIT (just-in-time) system, where as our industry is based on traditional styles to deal with the customers (Lang, 2009). As a result most of the business is shifting to our neighboring countries, which are more steady, innovative and competitive. Other regional countries are offering better prices and broader product line as compare to Pakistan in garments and apparel (Naqvi et al, 2010;Haider, 2011).#p#分页标题#e#

Low tendency of exporting value addition is a normal trend in Pakistan. There is no doubt that if we export raw materials like cotton, yarn and fabric, we will loose a major

Garments industry has one more constant feature of product diversification due to its nature of use. Rapidly changing fashions and seasonal requirements make this sector ever changing. Where as, Pakistani garments manufacturers prefer to go after routine garments like denim and tee shirts. There is need of product diversification and to expand the product line to capture the broaden export markets and to get maximum customer retention. Ahmed (2010) points out that Pakistan’s 88 percent exports are in regular men’s wear, but women clothing retains more share as compare to men’s clothing in the global market. Arifeen (2010) also expresses same views that Pakistan is the only country which exports other textile items rather than garments and thus looses a handsome amount of revenue. All other competitors are generating most of their revenues from the export of apparel.

With the revolutionary developments in technology, means of transportation and growing trends of trade agreements have boosted the international trades to that level, as it was never before. Setting the universal standards in quality, currency exchange and trade laws have stimulated the process in full pace. Garments and textile, being a universal commodity have shown a steady growth during last two decades. Clothing and textile volume which was $212 billion in 1990 got a rise of $613 billion till 2008. Pakistan was also able to increase its exports in the era of 1990 till 2005, but with a very low pace. However, export numbers show that Pakistan’s share in international trade reduced from 2.23 in 2005 to 1.81% in 2008 (Ahmed, 2010; Siddiqi et al, 2012).

Garment manufacturing unit requires very less funds as compare to the heavy investments for spinning and weaving mills. Returns are very low from spinning and weaving sector due to larger amount of investments. Garments as value added item have much better returns from financial point of view. Pakistan, being a major cotton growing country made having investments in spinning and weaving sectors. On the other hand, countries like Bangladesh, Vietnam and Thailand invested in establishing garments manufacturing units and imported yarn from Pakistan. By the passage of time, those countries shifted to new sources of yarn with better rates and reliability. Now Pakistan is not justifying the poor returns on heavy investments in spinning and weaving sectors (Khan & Khan, 2010).

Economic Factors:

Moreover, Khan and Khan (2010) explain that energy crises have hit the industry badly. The production of all the units has fallen 30% less to the full capacity. International crises also caused to shrink the Pakistan’s textiles volume. 20% decrease has been recorded in demand of textile from Pakistan. This deficiency has affected our domestic market as well as international markets.

Export orders showed a decline due to ambiguity and uncertainty in the Pakistan (Chaudhry, 2012).

Garments industry of Pakistan is battling against multi-faced problems mostly due to financial and administrative mismanagement. Increasing inflation has made it difficult for workers to survive; therefore government recently have increased the minimum wages of worker from 6000 to 7000 which would add up the fixed production cost and would result in higher price. But the customers are expecting lower price which is putting the upcoming orders in danger and neighboring countries are taking advantage of this situation (Tanveer et al, 2012).

The detailed definition of cost consists of economic factors like (equipments, manpower, land facilities, materials and all other resources) essential to perform work activities and obtain an output. (Stewart,1995). Mostly, costs are mentioned in the units of currency, hence the cost is the amount of money spent in the shape of resources to produce any thing. Resources are the physical units, which are needed to accomplish a certain activity or operation. It could be any tool, machine, person or material to produce a product or service. Throughout the product development cycle, every activity cause and determine the cost. Amount of cost also depends upon the decisions taken in product development cycle. Multiple decisions may provide different solutions in terms of money and time, which can be reduced or expand as a result of decision making process. According to the author, the design itself takes the 10 percent of the product cost but it further effects up to 70% of the product cost. Their might be any variation in the said percentage but majority of the experts state the 20 to 30 percent of the total product cost, which is still a significant cost manipulating factor.

Government Legislations:

Government has also tightened the monitory policy and charging high rates of interest to make the situation worst for the industry. State Bank of Pakistan is giving loan at 12% interest, which is further added 5 to 6 percent by commercial banks. That makes the highest interest rates in the region as compare to India with 8.5%, China 6.5% and Bangladesh 5% on textile. In addition, these countries have less inflation and steadier financial environment for working. India offers a further 5% subsidy if loan is granted for the up gradation of technology. Highest interest rates have made it next to impossible for the industry to compete with its competitors (Ahmed, 2012).

Hence the need is to give relief to the industry by offering reasonable rates to tackle with so many challenges. There is a requirement of handsome investments in technology up gradation, energy generation and human skills development to improve productivity, reduce cost and become competitive in the market (Rehman, Fatime & Ahmed, 2012).

Cost:

Cost is the money value used to manufacture or produce any thing and can not be further used or available. From a business perspective, cost is the input of money to acquire the thing or product. There are many types of costs involved in production and manufacturing based on their timing and application might also include the amount of mark-up or interest of that money.

In the process of production or manufacturing there are many phases and tasks for example designing, process planning, production planning and execution. As all these processes needs to be measured financially for calculating the cost of the product. That’s why all the information requires a measure and on the basis of this information there are certain decisions to be made. Because the cost is a necessary element of production so the maximum or adequate information is an important requirement for cost estimation and cost control. To achieve the perfect and closest information of every process, a cost estimation system to generate the cost information and control of cost, should be integrated in the product development cycle.

Integration of engineering activities in the product development process has been the major topic of interest for the researchers since many last years because the product engineering activities can be used as information generation tasks to integrate the processes more perfectly on the basis of that information.

Direct Costs:

(Wierda, 1990) presented a machine design from a German research project as an example to show the link between many departments involved in causing cost. At the beginning of the process cycle, there is no clear or definite cost fixed. Nee (1992) states that algorithm can be used to develop a calculation for process planning. For the purpose of costing, processes can be grouped and classified and manufacturing priorities, technological features can be added to those groups to have a clear idea of cost (Wu, 1992), (Luong, 1989), (Lewis, 1987), (Lewis, 1987). According to Schaal (1993) many companies believe that a rough idea of the process is enough to calculate cost and manufacturing details. It is assumed that the same geometry gives the same results. Little differences can be adjusted by the setting up and down the tolerance (Molengraaf, 1993). The interlinked tasks of development cycle contribute in cost determination. The interlinked activities are also influenced by the decisions about the operations.

An other problem arises when there are a variety of products to be considered for costing. If all the aspects and features of the products are not taken into account, there are chances of wrong estimation of cost. To deal with this problem, group technology (GT) is used. Similar processes and materials handling for different products are arranged together as a unit to cut down the cost (Srikantappa, 1994).

Normally it is thought that there are no hard and fast rules to group and classify the engineering tasks (Agarwal, 1994), (Lewis, 1987), (Bear, 1985). There are many advantages of grouping the similar processes like availability of past information, more accuracy in cost estimation (Schuttert, 1995).

One more element which affects the cost of the product is the environment of the working capacity. There are two approaches, which are hi-tech production and mass production method. In the high-tech production system, amount of cost before production can be about five times higher than the mass production method. And the cost of production is about one fifth of the mass production. As the more focus is on the designing and engineering phase. On the other hand, there is a need to be more accurate in estimation about the cost of production with less focus on design and engineering process. This situation can be described as vice versa to each other from cost point of view.

To obtain the accurate estimation, there is a need of more detailed information. If design stage affects seventy percent of cost, than more accurate information at that stage would result in more accurate estimation during design. But there is one problem, that not too much availability of information at the designing phase as it is almost initial stage. This situation is called cost estimation paradox.

Geiger (1996) presented a time formula to estimate time for each feature designing. The time formula is based on standard of each feature and the rate of machine for that activity. Kiritsis (1996) added that normal machine rates can be applied to calculate the cost. A reference model was presented by Lutters (2001), with respect to actual manufacturing system.

Cost Types:

Total cost of a product is composed of several cost components. There could be multiple cost breakdown structures as well. A general rule for a good cost breakdown structure is that all the costs should be covered and calculated and none of the cost must be repeated or recalculated.

Different cost in a cost breakdown structure are subject to the different resources and the way those resources are linked with the costs might be different. There are two general classifications of costs. One is about the direct and indirect cost, where as the other one is about the fix and variable cost. Direct cost can be assigned directly and the base of allocation is known and clear. The indirect cost is assigned but the base of allocation will have to be defined later on (Cooper, 1991). According to (Shuford,1995), direct cost can be recognized distinctively and continuously by its end purpose such as a function, project, product or service. But the indirect costs are those which cannot be recognized distinctively and consistently by their final purpose.

(Stewart, 1995a) states that variable costs are those which change with the quantity of production or with the amount of service and the fix costs do not change with the volume of production.

(Shuford, 1995) further describes the costs as semi variable cost and step-fixed cost. He notes that the semi variable costs are those which change with the quantity of production but not with the same pace. So the percentage of change can be different from the percentage of increase in volume of production. And the step fixed costs are fixed but have tendency to change their nature as level of activity changes from one stage to an other stage.

Here are some other types of costs frequently used to project the variety of costs.

Development costs:

According to the Stewart (1995a), the cost of a structure at one point where a decision to be taken to get hold of first increase in the units of production or the working system.

Disposal costs:

any cost to dispose of an asset, machinery, waste, or surplus matter is called disposal cost (Stewart, 1995a).

Conversion costs:

Cost of manufacturing the products on the overhead basis from any out source directly or indirectly (Shuford, 1995).

Acquisition costs:

Stewart (1995a), defines it as full expenses anticipated or required to develop, construct or produce physically in intangible shape is called acquisition cost.

Prime costs:

Direct material and direct labor cost of a product (Shuford, 1995).

Life-cycle costs: Total costs invested on a system during its estimated life cycle, including its maintenance, up gradation, estimation, checking and disposing (Stewart, 1995a).Sunk costs: All the costs and expenses which has been made on any project and are not recoverable known as sunk cost (Shuford, 1995).

Opportunity costs:

opportunity costs are considered to be the losses by not choosing the other most beneficial options in the financial terms (Liebers, 1998)(Blommaert, 1998).

Asiedu (1998) also presented a cost break down structure. Weustink (2000) pointed out the different cost drivers for example, type of material, process of production, way of measurement and production planning during the costing of product design. The purpose of production planning from the cost perspective is to reduce the variable costs caused by the production planning decisions (Giebels, 2000).

Cost Control:

The process of controlling the cost is very important and divided into two parts. One part is to identify cost standards and basis of those costs. This can help in setting up a system with the ability to make changes or alterations to reduce the cost and keep it in pre-estimated limits. The other part is to make it possible to match up and evaluate with the actual cost. By these two activities a cost model can be developed. The right and timely feedback is a necessary requirement for this cost control system.

To understand a complex manufacturing system, it is suggested to breakdown the functions into smaller activities. A model can also be set up to represent a complex system. A reference model illustrates an actual system structure, comparatively independent functioning parts, which is described according to internationally defined terms of these parts (Biemans, 1989). There have been a discussion on manufacturing models for many years and many reference models developed to understand the actual systems.

There is another possible way to represent decomposition, which is architecture. Architecture can be described as an outline or structure which explains the workings, that are necessary to execute an activity of a set up, by the inputs and outputs (Arentsen, 1995).

(Lutters, 1997a) states that the chances of communication during the engineering activities are subject to the presence and reach to the information. During the making of the independent cycle of product development, engineering information play a very basic role (Billo, 1987).

To define a relationship between the cost control and process of manufacturing, Liebers (1998) developed a model, which is used in context of manufacturing planning and cost control. This model consists of three main components of planning, execution and control. The planning component further divided into three sub-components as strategic planning, technological planning and logistic planning. This planning part covers the whole resources attaining and allocation required to produce a product. Second part of technology focuses on the process planning and engineering. The third part logistics is about to provide required resources at right place on time. After planning phase, execution of that planning is done to produce the planned product. There are also many problems during execution, as physical product deviates from the planned specifications. This may force to rework and additional planning as well.

The final component of control is also further divided into sub-components like data collection, processing of data, quality control of ongoing process, time and cost control. This is very important to collect information by observation at the time of execution to identify and control the differences between actual product and the decided specifications. On the basis of collected data, functions and activities can be re-designed or adjusted to obtain the desired output.

Lead Time:

Lead time is known as the time from order of a customer till the receipt of goods or service to the customer. This is a very important feature especially from the production point of view and which involves many other attributes like profitability, customer satisfaction, inventory costs and so on. Lead time can be improved or reduced by many ways like flexible manufacturing system, project management, bottle-neck analysis, JIT ( just-in-time) system, product focused organization, EDI (electronic data interchange), scheduling, and BPR ( business process reengineering). Another method to reduce the lead time is to give incentive on shorter lead time. For this, the performance of managers and workers is measured on reduced lead time basis along with better quality and volume of production. Banker et al (1988) presented a connection of lead time and production variability. They stated that there is a relationship between the production volume and inventory holding cost which is non linear. They mentioned that if company’s accounting system is not able to identify the cost of blockage, the company cost increases by increased volume due to higher inventory holding costs. Nandakumar, Datar and Akella (1989) discussed the relation of defected products with the lead time. Production defects cause the blockage in stocks and therefore affect the production lead time. A firm which has ability to response faster can increase the price of their product or service and can also lower its production cost, Dumaine (1989), Stalk and Hout (1990) and Harvard Business School (1990). The firms which can measure their lead time performance can survive and grow competitively.#p#分页标题#e#

Lead time has an affect on both the revenue and the cost of product. Short lead is preferred for the customers as it reduces the consumption time by the consumer and realization of fund from an industrial buyer. In most of the situations, customers are willing to pay comparatively higher prices for the short lead time. Cost wise it is important due to four reasons.

Zero Stock Inventory:

First of all, lead time is directly proportional to the work-in-process inventory. Secondly, it is not easy for firms to produce instant demands. So the lead time plays an important role in forecasting the requirements in hand stocks of materials and goods. If more lead time is required than it is necessary for firms to keep the maximum stocks of materials or finished goods to avoid any uncertain situation. Third, the lead time can be closely connected with the operational costs. For example, if there is a longer time required for fabrication stages, than any defects may arise at the time of assembly, which will cause to increase the cost of quality and production. Fourthly, short lead time also decreases the agency cost. Agency cost is the cost which is related to the control and monitoring.

It has been observed if the lead time is shorter than it is easy for the estimators to work out the more accurate marginal cost. With better marginal cost idea, it helps firms to take accurate production and price decisions. Managers or supervisors wages can also be counted as agency cost, thus any effort from the managers to reduce lead time should be appreciated and must be compensated in money terms. Other wise company may loose the opportunities to reduce the cost.

There are evidences that the production managers do not emphasize on reducing lead time at the time of decision making as much as it is necessary to reap out the benefits of the shorter lead time. Harrison, Holloway and Patell (1990),Karmarkar et al (1985), Zimmerman (1987), and Karmarkar (1989) have discussed this issue in their respective researches. Again there are four reasons to overlook this aspect by the managers. First, there is less attention on short lead time when it is not the priority of the customer and there is no net cost saving on the reduced lead time. Second reason is that the internal culture of the organization is not focused on the importance of the short lead time. If a general manager is not aware of the customer’s value in terms of lead time than there will be less or no emphasize on the short lead time and general manager will be offering product according to the routine schedule of production to the customer.

It is difficult for the general managers to understand if there marginal accounting system is based on the regular accounting system which does not identify the connection between cost and shorter lead time. More over the benefits of better forecast and less agency costs are also ignored in terms of reducing cost. Thirdly, there will be less focus o short lead time if the organization does not have the ability to gain the benefits of short lead time. When there is a central authority to draw out the schedules and to allocate resources than it may not consider the factor of lead time which has to be planned and implemented by local authorities. All above situations restricts the organizations to capture the benefits of the short lead time. Fourth, there might be clash of interests between general manager and the organization. There are two possibilities of such situation. First, general manager will have to put extra efforts to reduce the lead time which is not a very easy job for the general managers all the times. Second, there is no performance based evaluation system to point out the advantages of reduced lead time.

Electronic Inventory:

Karmarkar (1990) studied the similar situations that why managers in MRP (material resource planning) not offered any incentives are not willing to decrease the lead time. MRP plays a very basic role in shortening the lead time. If every required item is well planned and arranged before the standard schedule. The production and operations can start earlier to reduce the lead time. There must be an harmony in upstream and downstream to match the early arrangements by the MRP to take full advantages of better performance.

Womack and Jones (1990), wrote in their research that western industry decided to follow lean production system because Japanese industry achieved outstanding performance through it.

Lederer and Li (1993) presented a model which links the operational advantages to the strategic results. Aguiar and Waston (1993), throw light on process mapping as it is helpful in pointing out and removing non productive activities and thus improving the outputs. Gaither (1994), states that customer satisfaction is more emphasized in the present century. Sohal and Egglestone (1994), describe that Japanese school of thought was named as ‘lean production’ which means production function is not the only stage for improvement. This also includes product design and development, procurement, and even distribution. Harrington (1996) says if processes which do not add value could be discarded and exchange of information could be reorganized than more efficient output would be realized. It is advisable to reduce inventory but this should not be done without rational decision process. First the reason of existence of any inventory should be checked (Karlsson and ?hlstr?m, 1996).

Anjard (1998), wrote in his findings that a process could be broken down into smaller parts for better understanding of the process. Work break down can be from 5 to 15. A process map than could be drawn to mention the linkage between input and output.

Visual representation of the data is used as a process map to find out the points where the process is slow in a chain, repeat of the same process and activities with no productive results (Soliman 1998). There was a methodology introduced by Peterson (1998), which is known as 5S methodology. Work place should be arranged and designed as all the required components and parts should be placed near around the operation area to minimize the time to looking for those things.

There has been a very popular debate that in new e-commerce era, specially in B2B form of transaction, more efficiency could be gained by eliminating the costly “middlemen” or intermediaries. A lot of researchers like Hoffman, 1995;Imparato and Harari, 1995; Schiller

and Zellner, 1994 suggested that direct transaction between buyer and seller in e-commerce with “disintermediation” are more preferable. While to appose this phenomenon, Sarkar et al. (1995), Crowston (1996) 07, Lu (1997a08;1997b)09 and Fox (1999) 10argued that intermediaries are still very important in the internet or electronic commerce and revealed that only the process of intermediary is converted into “reintermediation”.

According to Don Tapscott (1996) 01 describes in ‘The Digital Economy’ that in most of the businesses, role of intermediaries is being eliminated, which is known as ‘disintermediation’.

Don Tapscott counts the agents, distributors, wholesalers, brokers, retailers, and even middle managers in his list of occupations, who perform the middleman functions. Real estate brokers, travel agents, movie theaters and government bureaucrats are all on his danger list.

Nearly every distribution activity...includes a range of intermediate players such as wholesalers, financers, insurers, transporters, and warehouses. These middlemen reduce transaction costs for functions that are outside the firm...as technology reduces transaction costs in the open market, the role of the middleman is on stake.

But this is not end of the world. In the changing world, they have succeeded to found new ways to perform their role. Internet buying and selling sites are one example of such new innovations.

Before we discuss the advantages and disadvantages of intermediaries, first of all we have to see what intermediaries do actually.

Supply Chain Management:

Later on there were new concepts of supply chain management and inventory management with planning horizon. Cachon and Zipkin (1999) are known to be the first researchers who initiated in their paper discussion on contract mechanisms prepared for two firms involved in a long inventory-planning horizon. They present a situation, where having full information under a competition; the retailer has to face a shortage of supply because of limitations on the supplier’s end. And the supplier pays a small piece as a penalty cost to the retailer to compensate the shortage. Lee and Whang (2000) also discussed the same issue of incentives in a serial of supply chain. Porteus (2000) presented the ways, how to execute the policies of the Lee and Whang.

Both of the above say that there is a central authority to formulate the policy while taking into the consideration the optimal inventory control. According to both, details of inventories and amount of incentive are handled by managers at all stages of the supply chain. Central control, full information and monitoring are the essential parts of the supply chain. Especially control of information plays an important role in this. in some situations, a partner has private information. The informed partner can try to use this information to increase their profitability. The other partner with less information on the other hand, may take wrong decision due to lake of information. Cachon and Lariviere (2001), Ha (2001), ?zer and Wei (2006), and Cachon and Zhang (2006) discussed the same situation in their papers. An other study was done by Corbett (2001), who relates the cost of back-order penalty with the information of the retailer’s type and batch size of the supplier. If the supplier has information about retailer’s type, he will use this to information to minimize back order penalty cost and vise versa. According to Askin and Goldberg (2002), Japanese companies were desperate to improve productivity and lead time to rebuild them to come out of losses of war. So the Japanese manufacturing organizations especially in automotive industry got more output with less input (Metall 2002).#p#分页标题#e#

Many research papers on screening in relation to the lead time and supply chain, assume that many suppliers encourage the agents to establish a supply chain on their terms. Cohen et al. (2003) recommends that the management should emphasize on develop the segmentation of the retailers according to the different requirements service-level and should design the supply chain policies separately for each segment to gain the maximum profitability, especially for the service parts suppliers.

In a supply chain, both the supplier and retailer require a replacement time in any case. At both end, inventories are handled according to the planning for a specific time. Supplier expects demand order well before time from the retailer, as he has enough lead time to supply order to avoid any cost of uncertainty in any case. On the other hand, retailer wants the demand ordered in minimum lead time to avoid any backlog at supplier’s end. So the supply chain’s major players want their counter part to bear the cost of any demand uncertainty. Now the main question at both ends is that how should they manage the element of uncertainty to reduce the inventory holding cost.

To resolve this issue in a proper way, there is a need to formulate a promised lead time contract, according to which, both sides decide to share the unexpected cost of inventory in any uncertainty. According to which, the retailer has to place orders in advance to the supplier, and supplier is responsible for the delivery of said demand in full after a decided lead time. A mutually agreed lead time contract removes the chances of any risk element at retailer’s side due to uncertain supply. But in the mean time, it increases the need of retailer’s forecast ability further than its planning horizon standards. For the supplier side, it benefits supplier with orders in advance and that how reduces the risk of any uncertainty in demand. To determine that who paid the inventory costs in result and who took benefits of this promised lead time contract, we have to compare and analyze the contract and results of the transaction.

The relationship in case of single sourcing situation depends upon the factors such as inventory, contingency planning and on-time delivery. So the consideration of promised lead time contract is necessary and relevant. (Hauser 2003). According to the Cohen et al (2003), in most of the contracts, there is a specified lead time to follow. The presence of MRP (Material Resource Planning) makes it necessary to mention delivery lead time. Procurement and purchase managers are driven by the lead time factor at the time of placing orders. And the supplier has to show the agreement with the specified lead time, therefore it is known as promised lead time.

Value stream map (VSM) is a map to sort out the lead time of different parts of an order like value addition time, size of the order, workers available and set up time. First there is a map according to present situation and than a future map can be drawn while keeping in view the present status of work. Value stream map remains only a technique until the desired future targets are achieved (Rother 2003).

Toyota production system was adopted and practiced by many organizations all over the world (Liker, 2004).

Quality:

As defined by ISO 9000, "Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy to state of service or implied needs" . From this definition we can point out the concepts of, value for money, reliability, fitness for purpose, satisfaction of customer and conformance to requirement s. These concepts of quality are neither new nor they are restricted to any culture or age.

Traditionally, however the industry houses have formulated functions related to quality as assessment of product followed by return of what is defective and recommendations for rectification. A quality management system (QMS) can be mentioned as the organizational structures, policies, procedures, processes and resources which are required essentially to implement Quality Management. Introducing of quality management concepts and awareness of quality management systems have been emerged in the garment’s industry in 70’s because of the increasing demand of the garments worldwide. In order to shape them in a universal system a series is introduced as ISO 9000 series.

As the new developments occurred in world trade as globalization and free economy, it became essential to explore and hold the new world markets of garments industry with out loosing the local business. With the passage of time, garments manufacturers understood the need of quality management systems in a sound and effective way in order to fulfillment of quality standards of the customers from different parts of the world. This was realized that with out establishing international quality standards with the help of quality management system, it is not possible to capture and grow in the garments industry world wide. Competition among different manufacturer from different parts of the world triggered the situation.

Quality fitness of the garment depends upon number of factors such as durability, reliability, performance of garment, aesthetic and perceived quality of the garment. The new developments in setting procedures of garments manufacturing and the advantages of the technologies in improvement of quality of product (Edwyn Rodrigues, 2000). 01

There are other elements also to measure the standards of quality such as fiber length, yarn, construction of fabric, color fastness, designing and finishing process of the garment. Testing of quality can be used as an instrument for up gradation of process and improvement in garments quality (Nadiger, 2001).02

Quality phenomenon becomes more critical when it comes to export the garments in global market. This is very necessary to ensure the high standards of quality with a serious commitment as it is matter of country’s prestige from which the company is exporting the garments. Quality control is implied strictly from the very beginning of the garment preparation like sourcing of raw materials till the final finishing stage of garment. It is suggested to keep in view the every pros and cons of the garments making process stages and analyze to maintain the quality aspects before and after every process to present the garment in good shape in front of the customer through value addition(Saumyen Mapdar, 2002).03

Cost factor should also have to be kept under consideration while achieving the quality. As Pakistan and Indian textiles have many things in similar like culture, environment and resources, so Reddy (2002) 04 tried to make SWOT analysis of Indian textiles and garments industry to examine the needs for quality, atmosphere, sense of social responsibility, and recommended a strategy to cop with the global competitiveness. It was aimed on how the organizations may achieve the operational efficiency and more profitability by following the standards of ISO 9000, SA 8000 and ISO 14000. Quality is a mean to gain the customers satisfaction. A good quality garment is helpful in getting the better value of product, strengthens the brand worth and builds up good reputation for the company to finally attain the end consumer satisfaction. It also causes to increase revenues and foreign exchange for the country’s economy. Quality is a result of number of elements putting together to gain the desired level of customer’s satisfaction. That’s why the quality control in pre-sales and post-sales services, pricing and delivery are necessary for all the garments exporters( Gaurav Doshi, 2006). 05

Intermediaries:

Intermediaries have a very basic role in most of the businesses from ages. Their basic role is not limited to an introducer to producers and consumers only. They act in much more capacities and shapes at every stage of the process or transaction in a business. But there is not much literature available on intermediaries as most of the time, the debates were conducted focusing on trade or developments and management while emphasizing on other elements rather than the intermediaries. Here a question rises that how can we measure the performance of the intermediaries. Should it be measured by the strategic management point of view or as the general business function? This multidimensional phenomenon suggests that performance of intermediaries can be measured in more than one ways. At the macro level, their performance can be measured with the percentage of the total business conducted through the intermediaries in local or exports to formulate the policies in national level. At micro level, they can be observed and judged on organizational level that how they can attract the manufacturers to through their different types of services. Moreover, how can they can they achieve greater business volume and increase their profitability. One more reason is that it is difficult to obtain necessary data on the activities of intermediaries as compare to manufacturing organizations (Boddewyn, Halbrich and Perry, 1986).#p#分页标题#e#

The term intermediary is very broad and complicated to define. If we look intermediary only as a middleman between buyer and seller in a specified transaction, than it is comparatively very limited definition. On the other hand, if we take a view from a wider angle than almost every individual or organization works as intermediary if not adding any value to the product or service. But some intermediary also add value to the product, such as an intermediary giving services in dyeing or printing units, specially in garment manufacturing. From ay input of raw material to finished product or service, all the individuals or organizations can be seen as intermediaries. Retailers, distributors and wholesalers are a very good example of that situation. Dell can also be referred as an intermediary, as it is getting hardware and software components from different suppliers and sells after assembling those. Dell’s case may suggest that manufacturing should not be included as intermediary, because it adds value. But all the intermediaries flourish value in market economy. At next stage, any postal service like UPS delivers Dell to any consumer; it also adds as much value as Dell does in transportation rather than physical transformation. But there is one difference of course, which is ownership.

Their existence is found in history from very beginning locally as most of the world businesses were limited to a few miles around. As the ways of transportation and means of communication developed as technology’s advancement by the passage of time, and businesses started crossing boundaries and borders. One more type of intermediaries came in to being as export intermediaries. An example of great development in export intermediaries was the start of East India Company, which was given the charter to monopolies the Indian trade in the 1600’s (Cho, 1987). Other countries in that era of colonial world like United Kingdom, France and Netherland also established similar trading houses (Carlos, 1992). In the United States, the “Yankee traders” were also some sort of intermediaries. Influenced by them, Japanese set up the first intermediary groups like “Mitsui” and “Mitsubishi” in the late 1800’s (Cho, 1987). These and other companies supported Japanese exports especially after the Second World War and so on. Even in the 1980’s when European companies were loosing their dominance on world markets, Japanese exports boosted the Japanese economy continuously. This success was not only due to export friendly policies but also had great contribution by the intermediaries. Many western countries encouraged the same networks of intermediaries in their economies afterwards. That following started a new era of global diffusion. First of all, Brazil did the legislation coping Japanese model of intermediary firms in 1972. After Brazil, South Korea followed this in 1975, Taiwan in 1977, Thailand in 1978, China and Turkey in 1980 and finally the United States in 1982 did the necessary legislation to support the intermediaries firms in shape of tax advantages and other benefits (Amine, 1987, Cho, 1987). More research should be conducted to understand these policies. Denis, (1990), wrote in his article that the most missing part in the research area of export process is about the services provided by the intermediaries. These rules to encourage intermediaries, however, resulted differently in different countries (Brewer, 1993).

When we talk about export intermediaries, they are known as traders or entrepreneurial service companies to connect the local manufacturers with off shore buyers (Oviatt and McDougall, 1994). This is mostly thought that big organizations with big resources have capabilities to handle the unique activities in-house to deal with export and normally small and medium organizations do not consider their self for the export due to lack of resources and foreign exposure. One more element of expected risk and uncertainty is also a hinder in selling their goods to foreign markets. (Ilinitch and Peng, 1994; Eastin, and Paun,1993). Sarkar et al. (1995)described a list of different intermediary services. They differentiated the services that of various intermediaries who give advantage to the customers in searching and evaluation process, in assessing the needs, in matching the products, reducing the risk, and to deliver or distribute the products. Second type of intermediaries is those who benefit the suppliers, for example in making and providing information regarding the product.

Spulber (1996) 11 claimed that intermediaries were the basic unit of economic activities. He suggests intermediary theory of the firm, which describes that organizations or companies survive due to intermediated transactions among groups of suppliers and customers. A firm comes into existence when outcomes from direct trade are less than outcomes through the hintermediaries help setting the prices, assigning resources and choosing markets.

Wigand and Benjamin (1996 ) 12 debated of the impact of internet on the traditional intermediaries as they are being eliminated socially and economically by disintermediation. Bollier (1996)13, Kalakota and Whinston (1997) 14have discussed the development of new intermediaries. Disintermediation is the process of removal of middleman from any transaction. This world was firstly used in 1960’s in financial services industry to express the mention that small investors now investing in monetary institutions directly with out the participation of any commission agents acting as intermediary, for example in a bank saving account, Gellman (1996). 15 As intermediaries are not noticed and regularly followed by the business press analyzing the performance of different business activities neither in private nor in governmental sector. One more hurdle to measure the performance and output of intermediaries is the nature of their intangible services. Most of the studies if conducted were more focused on the innovation, organizational learning and adaptation to provide conceptual framework to elaborate the present export studies for development (Leonidou and Katsikease, 1996).

Bailey (1998) 16 claimed that both of the hypotheses of “intermediation” and “disintermediation” are valid but under the unlike and different situations. He classified the three basic structures of transactions as direct exchange, market and hierarchy. Direct exchange carries no intermediaries (disintermediation). In the market, customer has to visit only one intermediary which have all the products from all suppliers. In hierarchy model of transaction, supplier appoints one intermediary and consumer may visit or consult different intermediaries having different products. He links the basic transaction structure with the number of suppliers. If there are a few or one supplier, than disintermediation is possible. Many suppliers might be preferred in market model and if suppliers are too many, than hierarchy is suitable.

Roles of Intermediaries:

To understand the intermediaries and their role, theories of bargaining, agency and market intermediation are very useful and helpful in the supply chain. Spulber (1999) 17provided the intermediary theory, as a tool to identify and understand the market microstructure. This theory describes the very solid reasons, why intermediaries exist, and how are they more beneficial as compare to direct exchange. It also mentions their contribution in reducing transaction cost, the nature of competition and role in price setting. He further tells that intermediaries actively involved in maintaining the market equilibrium by strategic pricing. Intermediaries also give help by combining and diversifying the risk, reduce the cost of searching, evaluating and matching of required products. Campbell (1999)18 gives a detailed debate on their role in financial markets. Harker and Zenios (2000) 19worked on the performance factors and roles of intermediaries in monetary institutes.

Transaction Cost Theory.

Transaction cost theory is about the firm’s decision making among different choices based on the minimum transaction cost. It concentrates on the rationality of the decision makers with regard to their preferred relation which could be positive or negative. This theory also focuses on the element of ambiguity, complications of the surroundings and uneven flow of information between parties involved in a transaction. As these exchanges are being performed out of the organizational boundaries and even sometimes across the borders.#p#分页标题#e#

In the successful international organizations, they have a very practical approach towards lowering down the transactional costs and different export channels and means are adopted to achieve the minimum cost of a transaction. There are three options for the firms willing to export, either a direct export (Anderson and Coughlan,1987; Majumdar and Ramaswamy, 1995) or indirect export through an intermediary. If an organization chooses to adopt the second option, than there are further two classifications to have domestic based export intermediaries (Perry, 1992) or to look for overseas based import intermediaries[Karunaratna and Johnson, 1997). In both cases, intermediaries must be ability to lower down the cost for their clients as compare to the first option of direct export (Peng, 1998). So the success of an intermediary lies in its ability to perform well in this regard. Transaction cost theory is an accepted paradigm for the marketing experts conducting research as a guideline for the decisions of the forward integration in the distribution channels (Rangan, Corey and Cespedes, 1993 ). Willianson (1985), describes that there are three main components of the transaction cost, which are the search cost, negotiations and handling/monitoring cost. The first two costs occur before the transaction and the third one involves after or during the transaction. So any organization intending to make the transaction through the intermediaries will consider the sum of the above cited three components and will choose the minimum sum as result. Search cost is normally related to the information and knowledge about the concerned market and thus becomes the biggest hurdle most of the time. If the knowledge is not easily available at public level or there is a difference in the organizational structures in the two different markets, the chance of a transaction will be minimum (Peng and Heath, 1996). Vice versa, in two similar markets, there are more possibilities for a transaction. If search cost is about to find a new and unfamiliar market, and is high as well, than are more chances of cultural and procedural differences. As a result, the tougher situation would be to make and secure any business contract. This scenario may force a manufacturer to choose the services of an intermediary to obtain better results. So this can be proposed that more unfamiliar the markets and more are the chance to involve intermediaries in business. There is one more potential risk involved especially with the new comer in the business that their lack of experience in negotiations may become fatal for their own selves. They might not the fully aware of the sensitivity and importance of any necessary part (Weiss, 1993). This misunderstanding may create any embarrassment or frustration in any transaction. Next stage after making a commitment and negotiating is the handling or monitoring cost. The same rule is likely to applicable on the situation that more distant and different the markets are. More would be the potential to take the services of an intermediary to monitor the transaction. This is not irrelevant to mention that monitoring directly may involve the special staff training or other requirements to handle the products. Some other factor like high or low tech products and product differentiation may also effect the decision. Products with low-tech or less differentiation are more likely easy to handle with less specialized intermediaries.

As the transaction cost theory is about to choose the forward integration in distribution channel, thus it is seen from the manufacturer’s point of view(Anderson and Coughlan, 1987; Majumdar and Ramaswamy, 1995; Rangan, et al, 1993). There is need to research this topic from the intermediary’s point of view to discover the missing pieces of the big picture.

Agency Theory:

Like wise the transaction cost theory which focuses on the cost of an exchange either direct or indirect, (firm-market) relations. Agency theory is about the principle (exporter) and the agent (intermediary), where as the principle wants to increase its export volume with the help of existing expenditure of agents and on the other hand, agents try to charge maximum fees while doing minimum efforts for the principle. Agent may misrepresent and misguide the principle about their abilities and capabilities. This conflict of interests forces the principle to invest in the hierarchy of monetary systems to design them in such a way that agent get paid when he performs according to the desired level. So the interests of both parties go together. Such theory is known as agency theory. Ideally intermediaries with less expenditure on agency costs are preferred ones as compare to agents with more expenses.

Presence of intermediaries must be reason to minimize the monitoring the cost of customer’s behavior in addition to monitoring their own attitude and the manufacturer must realize their willingness (Barney, 1991). Participation of intermediaries brings in the probability of agency costs between the relationship of the manufacturer and the intermediary (Bergen, Dutta, and Walker, 1992). Small business organization with limited resources might have difficulty in assessing the performance of an agent to decide either to choose an intermediary or not. There is an option to win the faith of the SME if the intermediary takes the title of the goods. By this a big problem of agency costs can be solved and synchronize the mutual benefits of the principal and the intermediary (Bergen, et al., 1992). In this way a complicated export transaction can be converted into a simple domestic sale to the intermediary and reducing the monitoring and handling costs in an affordable bracket. But there is an exception that not all the intermediaries have the required financial strength or willingness to go into that form of arrangements.

However, intermediaries’ links with off shore markets and their knowledge about specific negotiation and their networks in foreign countries helps the manufacturers to in lowering the cost. They also enhance the ability to reduce the misunderstandings and to resolve the conflicts, may rise due to cultural and language differences. According to Cosimano (1996), if all other things remain equal, the intermediaries are helpful in commencement of a clear and closer deal which decreases the chances of export failure.

Being the intermediaries or agents, there is possibility that they might not always act according to the benefits of their principal. They might hide the important information about the export market patterns, or can keep a hold the converses ions between the buyer and the manufacturer, or do not perform according to the promised and required standards (Sharma 1997).

If the agency cost go beyond the expectations of the manufacturer he may consider three options. First of all, he can try to eliminate the intermediary as go for direct export. Secondly he may switch the domestic intermediary into overseas intermediary. Thirdly he may give up exports. All above situations discourage the existence of the intermediaries in a transaction. So the chances of participation and retention of intermediaries in any business is subject to their ability to assure the manufacturer that the agency cost would be not more than the monitoring and handling cost, manufacturer will have to bear otherwise (Peng, Ilinitch, and Hill 1998).

Resource-Based Theory:

Resource-based theory describes that the competitiveness of an organization also depends upon the scarce and precious resources of that organization. When we talk about the export intermediaries those resources could be their knowledge and their ability of negotiations. These resources are very much helpful in searching the right product and right negotiations to minimize the transaction costs. In addition to this, some intermediaries have financial strength to taking the ownership of the goods to more successfully grip their clients. In this way they also helpful in lowering clients risk. In other words, intermediaries can perform well if there are able to get hold of and install their resources in a better way. If they are not capable enough to do this, the manufacturer or supplier can try to build his own set up, in house to manipulate the situation. This has been practiced by larger manufacturers to develop their in house channels to push the intermediaries towards smaller volumes of business and unattractive markets.

Review of the literature about all the variables included in this research paper shows the different aspects and dimensions about the subject. There has been a lot of research from different angels depicting various situations through which there are many sub topics and further discussions stems out from the data under consideration. Some variables like intermediaries have less availability of literature on the said topic and there is a need for more broaden research according to the latest philosophy of business practices.

Three theories about the intermediaries like transaction cost theory, agency theory and resource based theory have been discussed above, which represent the effectiveness and advantages of intermediary’s existence in a business transaction. Transaction cost theory describes the availability of multiple choices through intermediaries to make a more rational decision about a transaction. Agency theory discusses the mechanism to pay an intermediary with out any conflict of interest between supplier and intermediary. Intermediaries are paid on the base of their performance and also play a significant role in decreasing handling and monitoring cost. Resource based theory reveals that how intermediaries participate in transaction by getting the ownership of goods for a certain period. In this they also reduce the risk of clients. Although all of above three theories represent a different point of view but if we put all the pieces together, than we can complete the picture in result.#p#分页标题#e#

Quality’s literature review mentions that there have been revolutionary developments regarding quality improvements during last few decades. Those developments consist of defining universal quality standards and setting up international bodies to monitor the smooth running of business among nations with out any conflict regarding quality standards. According to researcher’s findings, there is a less focus on quality and social responsibilities regarding atmosphere domestically. They recommend emphasizing more on adopting the modern technique of quality management and follow the international concerns regarding quality in garment manufacturing especially to achieve maximum business and customer satisfaction.

Lead time is also an important variable and as we examine the literature. It comes to our knowledge that there are many methods and techniques to observe and reduce the lead time. Such techniques are known as BPR (business process reengineering), JIT (just-in-time), and EDI (electronic data interchange). In addition to these, MRP (material resource planning) and VSM (value stream planning) are also used to manage the complex situations like product diversification and multiple product line. All these techniques are to improve in productivity and to reduce the lead time as a result. This is also noticed from the literature that short lead time is very attractive feature from the customer’s point of view and can give enormous help to attract more and more business even on higher prices. Lead time cannot be minimized or controlled at the time of production only but it starts from the product design, choosing technology, procurement or inventory control and selecting the right distribution channels. More over it is not the responsibility of the production manager only. It is a combine effort of every individual to participate in reduction of lead time at his level. These efforts only can be fruitful if the entire culture of the organization supports this as a policy.

Cost is very critical variable in any successful business related to manufacturing or producing a product/service. Cost is not only the money invested to produce a product but also other relevant expenses like interest on that money. As there are many processes and other factors are involved so the every activity at every phase and cost of tools, labor and machines should be taken into estimation. To calculate the closest estimation, all the information regarding processes, procedures and their money value should be provided. Each and every step must be taken into account during the product development cycle. Problems can be faced in case of wide variety of products and procedures. GT (group technology) is used to overcome this problem. Similar operation or like activities of different products are combined together in order to minimize the cost and reduce the time required. Two main approaches are used to cut down the cost, which are hi-tech production system and mass production system. First approach keeps more concentration on the designing and engineering phase, while other on the cost of the production.

There are various types of costs like fix and variable cost, direct and indirect cost, which can be further divided into sub groups like semi variable cost and step fixed costs.

According to literature, most important activity is cost control through which a competitive edge can be obtained over the competitors. To control the cost, it is very necessary to have the information about whole process of product development. In case of complex development cycle, researchers presented two approached to have accurate cost estimation. One is reference model and other one is architecture. Reference model contains a system structure of the functioning parts to easily understand the complex original system. While in architecture, the whole process is decomposed into smaller parts to explain the working of actual system and to reduce the complexity of the process. This phenomenon also presents a close relationship between cost control and the manufacturing process.

We have reviewed all above factors in the context of the garments industry of the Pakistan. Intermediaries, being our main subject of interest, to improve the performance of the Pakistani garment manufacturing industry, in terms of cost, quality and lead time. It is possible to improve the quality of the garments by procuring good quality material through intermediaries and at better price to cut down the cost as well. Intermediaries can also be used for shortening the lead time by reducing the search time and multiple options for a rational decision.