Chapter 05

Logistics of Footwear Industry

5.1 Logistics Overview:
Shoppers' shoe addictions are good news for footwear industry in Bangladesh, but for footwear
logistics managers the demand can be hard to meet and specific obstacles hard to overcome. First,
footwear involves operating a global supply chain. Footwear manufacturers typically source raw
materials overseas from a variety of suppliers, and manufacturing often takes place abroad.
Second, the products go through short life cycles and many seasons. Third, the number of styles
and variety of sizes add to the complexity. To get a feel for how footwear companies are keeping
pace with these unique supply chain challenges.

Footwear Industry of
Backward Linkage Forward Linkage
Bangladesh

Raw Manufacturer Buyer

material

Supplier Merchandiser Customer

Sourcing Market

Figure: basic diagram of the logistical relation of footwear industry

Third Party Logistics (3PL): In addition to working with knowledgeable 3PLs, footwear
manufacturers can benefit from collaborating with supply chain partners. One way to achieve this
goal is through Product Lifecycle Management (PLM). PLM helps manage product information
in one central location for real-time viewing by all footwear supply chain participants. PLM also
reduces costs by removing supply chain inefficiencies. In today's economy, footwear
manufacturers can't raise prices, so they save money where they can. In addition, the more
volume footwear shippers move, the more likely they are to get transportation discounts. And
PLM helps avoid stock outs and overstocks.

5.2 Inbound Logistics:

Since the mordenisation, besides Bata, many new footwear-manufacturing industries have
emerged given the easy availability of raw materials. Notable among them are Apex Footwear,
Bay Emporium, Legacy Footwear, and Paragon Leather and Footwear Industries, and many more
are yet to set foot in the market. Among the organised footwear market– obviously Bata is the
biggest and other companies such as Apex, Bay, Jennys, Fortuna and Lotto in Sports Category are
among the big players operating in this sector. Bangladesh around the world is known for two
things, first because of garments, but second because of footwears. But in retailing, first of course
there is Bata, then there is us, then other companies, like Bay’s, Jennys, and a few others who are
trying to establish themselves.

Custom-tailored enterprise resource planning (ERP), warehouse management (WMS), product

lifecycle management (PLM), and inbound logistics software systems helps footwear companies
combat supply chain obstacles. Advances in RFID capabilities, web-based technology, and reverse
logistics applications, among others, also push the industry forward.

Radio Frequency Identification (RFID) Systems: Another way footwear companies attempt to
control costs is through radio frequency identification (RFID) systems. The footwear sector's
critical product visibility requirements and the transient nature of inventory make it a prime market
for item-level RFID and a breeding ground for product innovation. RFID can bring value to the
footwear sector, which is fraught with inventory control issues. Initial RFID pilot testing at
manufacturers including the production unit is radically is used in different company like Apex,
Jennys, Bay Emporium etc.

5.3 Reverse Logistics:

Reverse logistics is for all operations related to the reuse of products and materials. It is "the
process of moving goods from their typical final destination for the purpose of capturing value, or
proper disposal. In the case of reverse logistics, the resource goes at least one step back in the
supply chain. Reverse logistics technology early adopters sometimes face high risks because they
embrace the latest applications before the kinks are worked out. But they often gain a competitive
advantage that comes from pulling ahead of the pack. While many footwear companies are playing
catch-up, Bata was one of the first companies in the industry to implement reverse logistics system
in Bangladesh. Some reason for reverse logistics in footwear industry given below;

 Inaccurate counting during loading

 Misloading (wrong product, right truck, or right product, wrong truck)
 Improper or inaccurate paperwork
 Damage to product as it’s loaded or in transit
  Shrinkage/pilferage
 Delays or misroutes
 Mishandling at destination between the delivery vehicle, the back room, or store shelf
 Customer returns of damaged or unwanted product

Figure: Reverser logistics process of footwear industry.

Finding the right company to support you in meeting your reverse logistics needs is one of the
most important things that you can do to minimise cost whilst managing service and risk that’s
why middle sized footwear industry find it hard to manage the reverse logistics. Many logistics
service providers still treat outbound and return flows as two discrete processes and therefore lack
the ability to optimize the cost of collection and managing returns within their network. Reverse
logistics is more complex than forward logistics, as the process begins at the point of sale, where
a company representative is generally unavailable to effectively sort, classify, and/or evaluate
returns. 3PLs provide expertise, infrastructure, and technology to clients that value these attributes.
Many large companies, including Wal-Mart, Dell, Target, HP, Unilever, and Pfizer, have
outsourced reverse logistics operations, even though they have superior capabilities to manage the
forward supply chain. Finding a 3PL with an agile and efficient reverse logistics network and
operating model is essential to consistently delivering a cost effective and responsive customer
service promise.

5.4 Opportunities toward efficient logistics:

Like RMG or Jute industries, Footwear is not so long history of reputation in world market for
Bangladesh perspective. This is due to lack of technology, skilled manpower, good processing
plants, and communication. Following oppurtunities are existing to footwear industries to
grownup.

Technologies: Technology is the first and foremost important thing to build world standard
footwear processing plant. Now a day there is a number of technologies to process the footwear
like Auto CAD, Automatic machines etc.. So we should adopt the new technologies to build our
processing plants. We could communicate with European and North American countries for
modern technologies.

Skilled Manpower: Skilled manpower is other important parameters for manufacturing of

footwear. Educated, hardworking, creative and innovative minded young generations are the good
sources of skilled manpower. They should trained first about the footwear technologies. In our
country, there is only one leather technology college. To compete globally we should build more
leather technologies related institutes in our country to make our people skilled in leather
technology.

Global market reputation: There are some countries in the world that have global market
reputation for footwear. Italy, France, Germany, USA, Japan and some other European countries
have the global reputation for their footwear. They achieved this global reputation for their modern
technology, processing plants and product related skilled man powers. So to get global reputation,
we should take proper private and govt. initiatives in the field of leather technology.

Branding: Branding is the most important aspect to get the global market reputation in footwear
sector. Nike, Rebook, Hushpuppy and some other is world famous reputation in footwear. So we
should take proper steps to develop world famous brand by ensuring attractive design, price and
quality.

Power and Utilities: Power and utilities are the first requirement to grow any industries. Like
other industries, footwear industry also needs the power and utilities facilities for processing,
manufacturing of footwear. So our govt. should take necessary steps to provide the power and
utilizes for footwear industry.