Challenges in Supply Chain due to the Pandemic: A study on shoe industry of Bangladesh.

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FACULTY OF EDUCATION AND BUSINESS STUDIES DEPARTMENT OF BUSINESS AND ECONOMICS STUDIES

Challenges in Supply Chain due to the Pandemic: A study on shoe industry of Bangladesh

Rubaiya Farheen MD. Zahid-Al-Nayeem

2021

Student thesis, Master degree (one year),15 Credits Business Administration

Master Programme in Business Administration (MBA): Business Management 60 Credits Master Thesis in Business Administration 15 Credits

Supervisor: Ehsanul Huda Chowdhury Examiner: Maria Fregidou Malama

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Abstract

Title: Challenges in Supply Chain due to the Pandemic: A study on shoe industry of Bangladesh.

Level: Final assignment for Masters’ Degree in Business Administration.

Author: Rubaiya Farheen, Md. Zahid - Al – Nayeem.

Supervisor: Ehsanul Huda Chowdhury.

Examiner: Maria Fregidou Malama.

Date: 2021 – January.

Aim

This study has investigated the supply chain of shoe industry in Bangladesh those who does business internationally. The study concentrates on the supply chain of our selected industries and what are the difficulties they have faced during the time of pandemic. We have also discussed about the difficulties faced in general times but those has been mentioned to gain a better understanding and diversity of the difficulties faced during the time of pandemic.

Method

The study has been done by using qualitative approach and Inductive method. Four shoe manufacturing organization were selected and among them twelve staff members has been interrogated in order to generate the primary data. The secondary data has been collected from the published literatures and the considered theories are based on the concept of supply chain process.

Result and Conclusion

The study has been formulated on a platform where supply chain is influenced by supply chain process and the difficulties that we have discussed in regards to the process affects the whole supply chain and these difficulties has been classified into three areas for the purpose of our study. Our investigation regarding the supply chain difficulties in time of pandemic, also projects similar scenario and those difficulties has been also classified according to the three areas. As result of fact the pandemic affected the intensity of the difficulties but it does not arise any kind of new area of difficulties. Though we did not find any diversity in terms of the categorised areas but it has increased the severity of the difficulties among the factors. The

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ii most effected factors have been indicated by the end of the study and projected with the help of a framework.

Contribution

There have been many studies in regards to the supply chain and its challenges. There were also studies were environmental uncertainties were discussed and few recent studies also contributed towards the present situation of (COVID-19). Adding to those studies we have examined the situation further on challenges of supply chain process in shoe manufacturing industries of Bangladesh as this is a very rare area of investigation. In addition to these researchers, other studies discussed challenges in different forms. We have try to synchronize these scattered challenges into particular and precise areas, according to their category of activities. Previously the challenges were discussed with a general view and we have tried to discuss by relating them to the pandemic situation which can add more diversity to the previous researches done on the same situation. The study also contributes to the literature of supply chain in regards to the pandemic situation that the whole world is going through. It investigates the challenges faced due to the pandemic situation and these can contribute to develop managerial aspects of risk management in such diverse situation in future.

Future research suggestions

This study mainly focuses on the effects of (COVID-19) on the supply chain process and how this pandemic situation all around the world has effected the shoe manufacturers of Bangladesh in terms of maintaining their operations in supply chain process. Similar kind of further research can be conducted in relation to other industries or even service industries. From managerial aspect new studies can be formulated in order to develop strategies that could manage this kind of pandemic situations more efficiently.

Keywords

Supply chain, Supply chain process, challenges, pandemic, information, material, product, internal, external.

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Acknowledgement

This is to convey our gratitude to all the organization who has helped us by participating in our study and allocated their valuable time. Without their pleasant participation this thesis would not be possible. We are extremely grateful to those who took the trouble to provide us with the constructive feedbacks throughout the entire journey of the process, specially Dr. Maria Fregidou Malama and our supervisor Dr. Ehsanul Huda Chowdhury. At last but not the least we would like to take the opportunity to thank our family for their unconditional support throughout the process and kept the spirit alive.

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1 Introduction

This chapter portraits an overview of the study in a general manner and it includes background, motivation, problem statement, aim and research question.

1.1 Background

To explain in simple words, supply chain is the system to accumulate and generate the significant resources in order to perform manufacturing process of goods and services in order to reach its final customers. (Ellram, 1991) Nevertheless, important for mentioning the management concept of supply chain is unavoidable as it is an integral part of all the business in order to attain company success and customer satisfaction. (Ellram, 1991) Supply chain management focuses on cost effectiveness of a business by facilitating it with competitive advantage which enhance capacity for a business to run at its success rate without compromising with price or quality. Talking about competitive advantages there are few aspects that supply chain management can depict a positive effect on like, improve customer satisfaction, minimize the cost of operation and enhance the scope of benefits financially.

(Ragu-Nathan, Ragu-Nathan and Rao, 2006)

1.2 Global Concept of supply chain

Global supply chain is quite similar to supply chain concept with some extra features as it talks about conducting business across the national borders. This method is adopted by trans - national companies to spread their business across the globe. Multinationals companies are those organizations who expand their business across the border. It is crucial for them to suppress the cost by the following initiatives logistic management, supply chain coordination and operational management. (Hult, Ketchen and Slater, 2004)

Supply chain differs from business to business (Lambert and Cooper, 2000). Different kinds of business operate differently with different aspects and components, but the most basic version of a supply chain includes three aspects which is company, supplier and customer (Lambert and Cooper, 2000). For larger businesses or globalised companies, the rage of business coverage becomes wider but apart from a wider coverage the main basic aspects remain the same.

The principle aspect of supply chain management national or international requires some basic activities to carry out the operations, and these activities like plan, control and the execution of product flow facilitates the whole process. (Ragu-Nathan, Ragu-Nathan and Rao, 2006) The

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2 basic target of this process is to accumulate raw material for producing goods and distribute the product to its final consumers and to perform this whole activity in very efficient and cost- effective way. (Hult, Ketchen and Slater, 2004) The process of supply chain management is not an individual activity. It is consisting of other supporting factors which can be regarded as partners and combined they manage the supplier, producers and the ultimate consumers. It is a process of maximizing customer value and achieve a competitive advantage in market.

Supply chain management process involves many other fulfilments and among those some of them are irrespectively significant. Which can be mentioned as planning, procurement, forecasting, production and warehouse. (Stadtler, 2005)

1.3 Challenges of supply chain

Supply chain being a complexed process, it is always a challenge to navigate this process successfully. It is not a process which is controlled by any individual operational sector, it is a combination of other contracted manufacturers along with warehouse facilities and mobility ensuring activities (Melnyk, Narasimhan and DeCampos, 2014). In terms of planning supply chain management, proper prediction of product future in terms of customer and market orientation holds a very important role in the process (Garcia and You, 2015). Businesses here struggle to come out of such predictions accurately and therefore in long run it is the supply chain management which pays the price. As a lot of activity is involved in whole process, when one activity faces any disruption, the whole cycle is affected and faces the phase of delaying in other relative sectors (Melnyk, Narasimhan and DeCampos, 2014).

In terms of manufacturing industry, it is a very crucial aspect as the manufacturing process is a combination of different activities which depends on different sectors and alliance companies (Prajogo, Oke and Olhager, 2016). According to the task of supply chain management which is to coordinate the whole process becomes challenging when it comes to a point where one sector of the manufacturing activities gets disturbed (Lambert and Cooper, 2000).

Manufacturing process depends on several factors like availability of raw materials, staffing problem, political issues and even adverse weather. It is the procurement problem where the whole drama starts. Starting from planning to its execution a lot of things comes within the criteria of forecasting.

In order to speak in global terms, the cost of raw materials energy and labour has an unpredictable situation on the supply chain management issues. Predicting these kinds of circumstances are considered as a challenge (Garcia and You, 2015). Uncertain supply of raw

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3 materials can lead to an unstable production activity and it can arise affiliated issues of untimely completion of production, labour crisis and similar operational agendas. These kinds of situation effect the costing of production very significantly. Unstable supply of raw materials can occur due to many reasons. It can either relate to a rigid custom system or slow negotiation process of government and also it can occur due to the alliance companies who supplies the raw materials. In both of this situation, it the production of the product which comes to an effect. Labour crisis also involves in this situation where labour can become scares and also sometimes extra demanding due to the pressure of the task. In all these agendas it is the cost which gets effected and the prediction of the supply chain managers can be at dilemma (Garcia and You, 2015).

1.4 Motivation

The motivation has been formulated in reference to the supply chain process which is one of the main aspect of the supply chain as a whole. Risk management is another aspect of the supply chain which has not been part of our present study. Strategy development with managerial aspects with in the supply chain differentiate the supply chain process from the main concept. This study has been conducted to discussed the difficulties which arises in the process only, keeping the strategical implication on the other side which can formulate an entirely new study on that basis.

How the supply chain works for shoe manufacturer of Bangladesh has been define here and the difficulties in reference to that has been discussed. To point out the relative difficulties and to determine their diversity in the context of pandemic is the principal motive of the study.

1.5 Problem Statement

Till now the world has seen a lot of disasters some of the were environmental or we can describe them as act of God and some of them were rather accidental influenced by human misconducts.

According to (Chopra and Sodhi, 2004), In the year 2000 Ericsson company who is well known manufacturer of technological devices suffer a big loss 400 million dollars due to a fire that was generated at Philips semi-conductor plant. Ericsson being here the main manufacturer was affiliated to other similar companies like Philips as their manufacturing components were being supplied by Philips. Therefore, when Philips was going through a crisis due to this fire it affected not only Philips but also Ericsson at a larger scale the supply chain operation of both these companies were at stake. Both the company suffer from economic loss which did not subsidised in short run.

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4 Similar situations have occurred in different parts of the world and affected with different levels. According to (Pettit, Croxton and Fiksel, 2013) Japan’s earthquake has caused several companies to go through economic crisis and disrupted supply chain process. It is established fact that Japan is situated in such a region of earth where earthquake is matter of daily business.

Due to this occurred fact of the region the countries infrastructures and its operations are all developed according to this fact but still mother nature keeps the ultimate power and can do or undo anything. The earthquake of 2011 cause Japan with very big loss because it affected their nuclear plant and arise tsunami subsequently. These kinds of unpredictable crisis have affected some big name like Toyota. Toyota is worlds one of the most know car production company which suffered heavy loss of 72 million dollar of profit per day due to this natural crisis where manmade nuclear plants accelerated the effect of the natural disaster. Although Japan had a very efficient disaster management precautions and preventions but still, they failed to avoid such situation, and this are the facts that the world has got some lesson to learn.

In reference to the aforementioned review of the studies they all make significant contribution to the supply chain management, but they talk more about in general times and how the risk management should be handled in general crisis and regional basis. We also came across studies where they tried to address the risk of naturel or environmental disasters and how they affect the supply chain of a business. Some of them have targeted the manufacturing industry and some of them have targeted the service industry. In terms of manufacturing industry, the studies were more focused on supply chain and its risk management. Thus, we identified a huge gap between the past studies and our present situation. In our present situation that we are going through is more over an environmental crisis where the whole world is under a threat. We haven’t come through any similar pandemic situation in our past times. These gives us a significant knowledge gap about the challenges faced by the supply chain in manufacturing industries in these days of pandemic.

In today’s time and of course in future, there is no human being leaving in develop society did not come across the term (COVID-19). It is contagious virus which has turn the whole world to go through a situation where the people are forced to experience isolation from the social activities in order to stay safe. It is a very weird kind of a situation and from the past literatures we did not come across any similar one. This contagious virus has stranded the people’s daily life and stop the regular activity of all the business. It is not so that one specific sector has been affected. It has affected all source of business including service and manufacturing. Our study is regarding the shoe manufacturing industry of Bangladesh, so we have formulated our study

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5 on the basis of supply chain difficulties in manufacturing industry in this kind. (COVID-19) is a unique experience and therefore, challenges in reference to these situations especially in the context of Bangladeshi shoe manufacturing industry seems a very rare issue of discussion and our study has been conducted in order to fulfil that gap.

1.6 Aim and Research questions

The aim of the study is to explore the challenges faced by the manufactures in supply chain due to pandemic. After going through previous studies and considering the current situation we have found out that there are not much literatures which can portray the impact of such pandemic and the challenges arise with it. To identify the challenges which have arisen due to the pandemic we have come up with two research questions.

1. What are the challenges generally faced by manufacturer in Supply Chain?

2. How the challenges in supply chain has changed due to global pandemic?

1.7 Scope and Delimitation

To understand the situation deeply we have selected the shoe manufacturing industry of Bangladesh to identify the impacts of (COVID-19) and how it has accelerated the supply chain issues along with new challenges which generated from the pandemic situation. This study will portray the current situation of the supply chain in manufacturing industry. This study will open the scope of further research in this area and can lead to possible method to handle such situation in the future.

We are still going through the pandemic and the elimination is still unpredictable. Conveying any management measures to cope up with this situation is at very immature level. We also did not cover areas such other aspects of supply chain and manufacturing industry. This study only talks about the prospective of Bangladesh other countries scenario may differ to Bangladesh.

In terms of global managements of supply chain, the effect of the pandemic differs country to country and in our study, we did not mention any comparison between other countries.

Therefore, this limitation of our study can be significant in order to form scope for another research.

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1.8 Disposition

Chapter 1: Introduction In this chapter the introduction and motivation of the whole study has been projected in regards to our topic.

Chapter 2: Literature Review In this chapter the related theories have been mentioned based on the supply chain and its difficulties. A theoretical framework has been developed in accordance to this theories.

Chapter 3: Methodology In this chapter the method of doing the thesis and data collection process has been mentioned. It also mentions the motivation behind using this approaches.

Chapter 4: Empirical Findings This chapter is the interpretation of the collected data which is based on the research questions. The data has been mentioned in two parts general and pandemic.

Chapter 5: Analysis In this chapter the gathered empirical data has been discussed in connection to the theoretical aspects. A theoretical framework has also been suggested and reasoning behind the suggestion has also been discussed.

Chapter 6: Conclusion This chapter discusses the research questions and projects the final thoughts on the topic. It also discusses the managerial implications and practical contributions.

Table 1

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2. Literature Review

In this chapter we have summarised the theories regarding the main aspects of our study which is supply chain, global supply chain, supply chain process and supply chain challenges. At the end of this of chapter we portrayed a theoretical framework developed from the theories which would assist us to from the platform of our study.

2.1 Supply Chain

Supply chain is the process where the organization involves people, activity, information and resources in order to develop product or services in order to reach its final consumer. (Zhou and Benton, 2007) It is the activity which involves a transformation process of natural resources or raw materials and other components in order to form finished products and deliver them to the tentative customers. (Zhou and Benton, 2007) A supply chain applies in both aspects of a product or even services. (Cachon, 2003) For products the manufacturing activity is decided according to the nature of the product. (Cachon, 2003) Different products go through different type of manufacturing process. It is not necessary that supply chain only applies for manufacturing goods it is also important part of a business which transforms one product to another. It also plays a crucial part in service industry. (Cachon, 2003)

The primary goal of a business is to reach their product or services to the targeted customers.

Supply chain is the only method for a business where it avails its product or services for a market in order to create and grow retailers prospective and through this retailer, they can reach their ultimate customers. It helps the business grow and spread regardless the type of business.

It is equally important for both products based and service-based business. (Croxton, Garcia- Dastugue, Lambert and Rogers, 2001)

To maintain a production, line a business must go through a series of activities which are dependable on each other and interlinked. This dependency and interlinked activities form a shape of chain and it continuously repeating characteristics gives it the strength of reacting like a chain and that is why it address as supply chain academically. (Croxton, Garcia-Dastugue, Lambert and Rogers, 2001) In planning a business there are a lot of aspects that can be made available directly but in order to develop a business, to enter certain market there are few channels which needs to be maintain in order to gain reorganization (Amini and Li, 2011).

Supply chain concentrates here to develop recognition in the market and establish the business within the market. As it is not an individual activity, it is all interlinked and has to go through

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8 a certain process where the engagement of other components in order to fulfil the process is necessary (Amini, Wakolbinger, Racer and Nejad, 2012).

Every business has got different structure of supply chain depending on the type of product or services. (Fisher,1997) To be more precise on clear about the concept, the structure of the supply chain has a common criterion which every business has to follow regardless it’s kind of product or service. In figure 1, we have tried to demonstrate the formation of the structure and indicated the sectors involved in order to fulfil the supply chain process.

2.1.1 Supply chain Structure

The structure of the supply chain is multi-layer network were other entities participates and work together in order to source a production or even produce a product and deliver the commodity to its tentative buyers. This whole networking chain is consisting of six significant common entities without which the formation of supply chain is not possible. These entities have been explained below.

Raw Material: To produce a particular product the needed components can act as raw materials to that products. These raw materials can be semi processed or even extracted from nature. Depending on the type of the product these raw materials varies from production to production. (Min, Roath, Daugherty, Genchev, Chen, Arndt and Richey, 2005)

Supplier: Supplier plays a crucial role in the supply chain. As they deliver the necessary components or raw materials in order to fulfil a production process. This component can be semi finish goods or extracted resources from nature. (Min, Roath, Daugherty, Genchev, Chen, Arndt and Richey, 2005)

Factory: Is facility where the manufacturer assembles or develop any products. Normally it is equipped with equipment which are necessary to produce the products. (Chen, Daugherty and Landry, 2009)

Distribution: It is the sector where the product gets to reach its necessary sectors. It can be internal or external. (Stock and Boyer, 2009)

Retail: Retailer are the market builders. They introduce the products to the market and make them available to their tentative buyers. (Chen, Daugherty and Landry, 2009)

Customer: Ultimate user of the product. Their demand of any products decides the faith of the business. Buyer of any product or services are regarded as customers (Stock and Boyer, 2009).

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9 If we look at Figure-1 each entity can be directly connected to each other but still the process goes on at a long-term circle where each entity has got a certain pattern of connection to the other and one entity cannot skip another entity and connect to the next stage. (Min, Roath, Daugherty, Genchev, Chen, Arndt and Richey, 2005).

Figure 1: Supply Chain Structure

Source: Developed from: (Min, Roath, Daugherty, Genchev, Chen, Arndt and Richey, 2005), (Chen, Daugherty and Landry, 2009), (Stock and Boyer, 2009).

2.2 Global Supply Chain

Global supply chain mainly discusses about the supply chain process of the organizations who conduct business across the national broader (Manuj and Mentzer, 2008). It is similar to supply chain, but it talks about the border aspects of supply chain. It debates about the business who are multinationals and the process of this supply chain involves more than one country. (Manuj and Mentzer, 2008)

It is described as the trade of goods among two different nation’s companies and there are many factors that should be consider in order to accomplish a successful global supply chain process. The factors are as follows organizational and international. (Manuj and Mentzer, 2008) 2.2.1 International: According to (Arribas, Pérez and Tortosa-Ausina, 2009) international factors are those which arises during the trade between companies who run their operations in two separate nations. The author added that this factors arises in reference to the facts and condition of the other countries where the government policies, currency fluctuations and port delay can influence and develop challenges. (Borchert and Yotov, 2017)

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10 Port delay: In studies like (Gidado, 2015) port delay has been mention as one of the significant issues which hampers the natural flow of the supply chain process directly. It sometimes delays the manufacturing process and sometimes force the work to stop as the supply of required raw materials get hampered and the time frame becomes uncertain due to the complex documentations process of different port or custom. (Zaharudin and Yunus, 2015)

Currency Fluctuations: Most of the international business prefers US dollar as their currency of transection. (Kandil, and Mirzaie, 2003) The currency rate is not a stable factor in business.

(Feinberg, 1986) Change in currency rate and increase the expenses or even decrease the per unit price of the product. (Chen, Rogoff and Rossi, 2010)

Government Policies: International trading policy differs from country to country. (Borrus, Tyson, and Zysman, 1986) In such situation countries who have a complex international trading policy, hampers the supply chain process. It sometimes creates a situation where trading of goods becomes time consuming, expensive and a complex process. (Baldwin, 1984)

2.2.2 Organizational: Organizational factors are more related to the infrastructure of the organizations in terms of doing business globally. (Galeazzo, Furlan and Vinelli, 2017) According to the author the difficulties in organizations while doing business internationally, revolves around three significant aspects and they are mainly affiliated to organizational infrastructure itself.

Supply network design: To fulfil the international buyers’ necessity, the supply network design requires to be more precise in terms of selecting their alliances and maintain the desired quality of the supplied materials. (Ojha, Shockley and Acharya, 2016)

Poor IT Department: To maintain contract internationally the organizations sometimes need to adapt communicational advancement and also need to be aware of the current trends of communication. Each country has different type of software for contracting and generating documents. To handle this kind operation an organization, need a strong IT department. (Hou, 2020)

Workforce: Skilled workforce insures the quality of a product. (Cappelli, 2009) If the organization does not have the skilled workforce it becomes difficult to fulfil customer demand.

If the workforce is not skilled enough it will increase the time and cost of production. (Demeter, Gelei and Jenei, 2006).

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11 Figure-2 demonstrates the two main effecting factors of global supply chain and it also categorises the effecting operations according to their affiliation to the factors.

Figure: 2 Global Supply Chain

Source: Developed from: (Demeter, Gelei and Jenei, 2006), (Hou, 2020), (Cappelli, 2009).

2.3 Supply Chain Process

In reference to the traditional supply chain there are involvement of different activities and process which take place individually but perform in a group combination in order to fulfil the whole supply chain process (Hult, Ketchen and Slater, 2004). In the process the optimization of plan control and execution, is processed in a synchronized streamline, in order to achieve the maximum advantage of cost affectivity to fulfil the production process. (Stadtler, 2005) In particular, supply chain process has to deal with various task which have been mentioned and explained below.

Planning: In the concept of supply chain management planning is the initial stage where a company plan for its upcoming challenges. Activities like demand forecasting, purchase planning and production planning including the preparation of labour and transportation are the basic activities which are done at this stage (Peidro, Mula, Poler, and Verdegay, 2009) (Stadtler, 2005). These processes are mainly managed through supply chain management and

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12 they are as important as operating a successful production line. For demand forecasting it is very important for the producer to figure out the certain demand of the commodity of the certain period of time so that the demand and supply of the product does not go through any uncertainty or imbalance. It is very important that the products that are being produced and sold are all based on the demand of the tentative customers.

To forecast or to evaluate demand production or even labour supply, the supply chain management has to have an active inventory system which can follow the market trend and help the management system to come up with strategies in order to fulfil the increasing demand of the product or even take measures to equalise the demand and supply (Min and Zhou, 2002) (Stadtler, 2005).

Procurement: It is the process which involves the purchasing decisions of a company. It is one of the most important part of the process in supply chain management because it determines some principle factor which could affect the profitability in a business. Procurement does not mean only the purchasing of raw materials; it is a process where each and every activity towards any kind of purchase decision in a company effects the aspects of procurement (Moon, Lee, Jeong, and Yun, 2008) (Stadtler, 2005). It usually involves several stages like purchase requisition, review and approval, order submission to the supplier. In this division of supply chain management, the responsibility is to keep the track record of all kind of purchase done by the business in order to maintain the operation (Stadtler, 2005). It is a continuous process where the forecasting and accusation of goods are done simultaneously which needs to be observed precisely.

Production: In this process the raw materials are turned into finished goods and the involvement of human labour and machines are equally needed. The transition time of raw materials to develop into finish goods, is a very significant phase where the production process can be affected in terms of delay in any aspect of this process. Managing the production process is also a very important part of supply chain management as it directly influences customer dissatisfaction due to any kind of delay of production (Stadtler, 2005). It is therefore very basic in terms of supply chain management that the productivity and the labour performance are observed very carefully with the supply of necessary equipment’s so that the whole process is carried on successfully. (Fassoula, 2006) (Prajogo, Oke and Olhager, 2016)

Warehouse: After the production of the goods they needs to be stored in warehouse. An Efficient warehousing system involves activities like picking, packing, cross docking and stock

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13 taking (Min and Zhou, 2002). In reference to the involvement of this in supply chain management is very significant as it controls the stock of the produced product and it is also interlinked with the process of order fulfilment which is directed to the ultimate delivery and satisfaction of the final consumers (Lummus, Vokurka and Alber, 1998). The transportation and shipment part which can be addressed as logistics is also a very important process in supply chain management. It ensures the balanced supply of the produced products in order to fulfil the demand of the ultimate consumers. In a production business supply chain management ensures that the business runs smoothly by achieving its ultimate advantage of its market and consumers (Stadtler, 2005).

Logistics: It is really important aspect of supply chain it helps to maintain the flow of supply chain process. It plays a crucial role in implementing plans and quality control. It is responsible for connecting the organization with the end users. (Stadtler, 2005)

Customer care: It is a significant part of supply chain. It allows the business to get customers feedback and improvise according to their feedback. Customer care also helps to identify any problem in the supply chain. As the primary goal of supply chain is to listen to customers’

issues and give them solution according to supply chain policy. It can be use in every stage of supply chain process. (Stadtler, 2005) (Chin, Tummala, Leung and Tang, 2004). Figure-3 demonstrates the activities which works in combined way towards the supply chain process.

Figure: 3 Supply Chain Process

Source: Developed from: (Stadtler, 2005), (Peidro, Mula, Poler, and Verdegay, 2009), (Moon, Lee, Jeong, and Yun, 2008).

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2.4 Supply Chain Challenges

Supply chain has several concepts according to different researchers. They focus on specific functions and area of supply chain but not the whole picture of the entire process. Researchers mainly focuses on different aspects and among those aspects challenges is a significant one. In order to define this challenges researcher conducted different methods of identifying the issues and address the challenges in particular field of supply chain process. Talking about these challenges the studies portrayed different sort of challenges, or the researchers have pointed different sort of challenges in various researches. In order to classify this challenges, the researchers have come up with three different areas of challenges and they are information, material and product.

(Zsidisin, 2003) have said that any possibilities of obstacle in the supply chain process can be described as a challenge. It could be influenced by the supplier’s inability to deliver or uncertainty in the market which creates hurdles for the firm to buy desire goods to fulfil customer needs. It is a supply chain challenge which is affiliated with the product flow and material follow. As the need of the firm can be a particular product or raw material of producing the end products. In both of the cases this situation hampers the firm’s efficiency and productivity. In some situation firms had to change the products pattern or design because of unviability of the raw materials and in terms of the product it is a more difficult situation for the firm as they have to look for new or substitute products.

According to (Jüttner, Peck, and Christopher, 2003) the information flow challenge can be dangerous for any business. As in some occasions the middlemen do not provide proper information to the end users which affects the reputation of the manufacturer. In other scenario it is also observed, that the information sharing by the manufacturer to the end user have ruined many businesses as they were serving as middlemen. In supply chain management both of these scenarios can be horrifying. In terms of the manufacturer the reputation of a business will be at stake and it can lead to a situation where the demand of the product decreases. When the supply is more than demand the organization not only faces loss, but it creates various issues in forecasting which ultimately lead to product or material flow issues. In terms of manufacturer industry where the middlemen are a common practise are mostly affected by these sort of misleading information as most of them rely on middlemen to rich their customers (Jüttner, Peck, and Christopher, 2003).

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15 To add more to our findings, (Ellis, Henry, and Shockley, 2010) has addressed a challenge which is affiliated to the supply chain of manufacturing industries. In a manufacturing industry production process depends on various kind of other components which combined together in order to form a product. Among these process other affiliations are also necessary in order to fulfil the required components for the finished goods. In such situations it is very natural to rely on the known channels in order to accumulate raw materials. But when these channel faces disruptions or sometimes fails to produce proper necessary components, that is where the whole drama starts. These kind of unavailability initiates disruptions and uncertainty in production line which directly affects the supply chain of production industry. These challenges cannot be described as general challenges. As it more affects the production unit of an organization. It concerns the supply chain and production department. Other departments of the organization are not affected by this disruption of supply in raw materials as their operations are not related to such issues.

To have a border prospective (Cavinato 2004) has mentioned some significant challenges which can be the performing part of the business and its supply chain. In studies like these aspects like financial, informational, relational and also innovation factors can act as the generation point of relative challenges. In a business financial cash flow is the most important starting point which decides how far the business can take advantage of the market build up and in such point any scare city of financial contribution can hamper a business to reach its ultimate productivity. These kinds of situation are generally sudden and unpredictable. A sudden change of demand or reacquisition can arise such situations where a physically establish business also can struggle to accumulate necessary components in order to attain the changed situation of the market. (Cavinato 2004) also mentions factors like information and relations as effecting factors for supply chain it is not so that these factors are always has to be evaluated as a negative issue but in case of formation of challenges these factors can equally be significant. As an establish fact supply chain process is interdepending process which is related to different operational activity and all these activities are interdependent (Croxton, Garcia- Dastugue, Lambert and Rogers, 2001). In case of manufacturing industry or even other industry passing the right information to their ultimate consumers is very important in order to build a market for a product. Therefore, any kind of miss communication and misinformation can create challenges for a product to create its demand and without the demand there is no supply.

(Croxton, Garcia-Dastugue, Lambert and Rogers, 2001) (Tran, Childerhouse and Deakins, 2016) These types of issues are not only Significant terms of relations with the customers, but

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16 it is also important to maintain a proper informative relation with the component supplier or the alliance companies of a business. If these relation gets messed up, it can directly affect the supply chain of any kind of product because the supply of raw materials and other necessary components are related to these other companies. (New and Brown, 2011) The word innovation sounds very interesting and it holds a creative vibe within, but we also have to think how it can involve in developing challenges. Any innovation or technological development can affect a supply chain directly by changing the infrastructure of a production process (Van Donk, 2008).

These kinds of situation can arise uncertainty and ignorance about the new technical terms among the workforce and these can develop into hurdle for the whole production process.

These situations are not only the part of manufacturing sectors, but it can be also part of service sector. (Khan, Artail, and Niazi, 2014)

In reference to these discussed challenges (Chopra and Sodhi, 2004) also add some more evaluation facts to the discussion. They classify the effects of these challenging factors where the supply chain of a business experiences disruptions, delays, forecasting issues, procurement process and capacity insufficiency. Any sort of unavailability of production process or any shortage of raw materials or intellectual property can cause disruption or delay in production process and that can arise insufficient capacity to fulfil the demand of the market. Estimation of market or production requirements can also cause trouble and challenges in order to forecast diverse situations for a business and these can also arise situations where proper necessity of procurements becomes unstable to calculate in order to operate in difficult situations. Supply chain is a very delicate portion of a business where any kind of inhabitability can affect the whole chain and its process by imposing a negative effect to the profit margin. In different times researchers have mentioned various kind of challenges but to synchronise them, different segregated areas have been developed and it has been portrayed through Figure-4 below.

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17 Figure: 4 Supply chain challenges.

Source: Developed from: (Zsidisin, 2003), (Jüttner, Peck, and Christopher, 2003), (Ellis, Henry, and Shockley, 2010).

2.5 Internal and External Challenges

According to (Christopher and Peck 2004) challenges can be classified as external and internal.

In terms of external challenges, a disruption in the supply chain network arise uncertainty of supply which can result a decreased demand in the market in times. It can also arise threat factor like competitors in the market where the market gap can fulfil by them. Political systems or agendas impacts of an infrastructure of a country very rapidly and this can also affect a business by acting as dilemma for a supply chain by affecting the social structure which can create gaps in market demand. Adding more to the external challenges environmental issues cannot be overlooked. Environmental issues can be unpredictable and completely uncertain from ancient times till now we have seen many environmental crises where the world was bound to learn new things and adapt new structure although it was not much understood. Unlike technological turbulence where a society can navigate to the tentative development and the organization can prepare themselves for such changes, environmental crisis is something which have footsteps, but they are invisible.

In reference to the internal risk supply chain faces challenges like disruption in distribution of goods or services due to the insufficient production or disruption of production due to lack of

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18 control within the organization. Internal relations of departments within the organization designs the control process or strategy where the supply chain management issues take the form of the whole structure in an organization. Internal factors are less vulnerable then the external factors as they can be efficiently handled through a controlled monitoring process.

Although it is a prat of the supply chain, but uncertainty can be assessed through monitoring of the internal department of a business (Christopher and Peck 2004). To have a clearer and synchronize picture of this challenges we have constructed Figure-5 where the aforementioned challenges have been divided into two categories internal and external

Figure 5: General Challenges

Source: Developed from (Christopher and Peck 2004).

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19

2.6 Theoretical Framework

After going through several studies of supply chain we have come across different experience and different challenges. These challenges always existed from time to time although they had different implications in different phase of time. The studies that we found which mentioned supply chain process challenges, have mentioned these challenges in one way or other. We can count them as common challenges of supply chain process which have persisted through time.

These challenges have affected supply chain process time to time, but their impact was different in times.

According to the theories that we have come crossed, we noticed a rhythm and synchronization among them, and the mention theories are generally mentioned on few particular aspects of the process. When we tried to analyse this theory about the challenges deeply, each of these challenges covers a particular area of supply chain. Among these areas we have identify three particular areas like information, material and product which covers all the aspects of supply chain challenges.

2.6.1 Information Challenges

In reference to the theories studies like (Huang, Lau and Mak, 2003) (New, 2010) (Kabelele and Musabila, 2020) figure outs challenges which mostly orients to the information part of supply chain process. There they have mentioned different information distortion supply chain and how it has affected the process. Like supply chain the flow of information also have a process. It flows in both ways from top to bottom and bottom to top. During this information sharing in multiple stages sometimes it faces disruption or miscommunication which affects the flow of information that directly impacts the supply chain process. Adding to more this theories (Jüttner, Peck and Christopher, 2003) also mentioned challenges that created by the miscommunications between manufacturer and end user and how it has raised fall of demand issues of the product. For the sake of simple understanding the challenges in relation to information has been generalized and categorised under the area of information challenge.

2.6.2 Material Challenges

In studies (Berghman, Matthyssens, and Vandenbempt, 2012) (Wong, McFarlane, Zaharudin and Agarwal, 2002) (Alonso, Gregory, Field, and Kirchain, 2007) have mentioned challenges which are mostly affects the material area. The authors have identified different challenges that affects this area mostly. Any disruption in material flow leads to arise challenges in supply

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20 chain process. In theories the authors have mentioned many challenges but most these challenges of the theories directly or indirectly affect this area. Adding to more to theories studies like (More and Basu, 2013) (Bala, 2014) (Garcia and You, 2015) have mentioned various challenges and different issues has been depicted by them. These issues are mainly material or supply of raw material oriented. In order to construct the theoretical framework, we have evaluated the issues and the challenges has been identifying in reference to the area of material in the supply chain process. Therefore, the area material challenges represent the identified issues which has been discussed by the authors as material challenges.

2.6.3 Product Challenge

In studies like (Ballou, Gilbert and Mukherjee, 2000) (Beamon, 1998.) product is the final stage of supply chain process. In this stage the final product gets to reach their buyer and it is also the final stage of the supply chain process. Issues in relating to product is not always compulsory that it will arise at the last stage of the process. Studies like (Lee, 1993) (Shukla, Garg, and Agarwal, 2011) have mentioned some significant issues which can occur in the beginning or middle of the supply chain process. In combination of all the challenges in the past literatures that we came across, we tried to synchronize them in order to our created area.

Therefore, challenges regard to product no matter in which stage of the process it occurs, they depict scenarios which explains product related crisis and the product area represents all those related challenges.

Figure- 6 the theoretical framework illustrates how supply chain process is directly affected by the three areas. In the framework supply chain process is the dependable variable and the independent variables affects it directly. Supply chain process has been portrayed as dependable variables as their existence depends on the other entities. In this study we have discussed about challenges which has been classified into three areas. The three areas of the challenges are the independable variable of the framework. These areas are independable as their existence is not influenced by any such entities which is within the supply chain process and in fact their existence affects the process directly instead. With the help of the arrows which goes from left to right and shows how the independable variables affects an impacts the dependable variables which is the supply chain process. In these way the framework depicts the scenario that we have tried to portrait through our study and it also relates theoretically to the first research question of our study as it shows the different challenge areas of the supply chain process.

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21 Figure 6: Theoretical framework

Source: Self developed

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22

3 Methodology

In this chapter, the methods used for the research has been described precisely and reasoning behind the chosen method has also been mentioned. The selection process of the method has been done according to the aim and research question of the study.

3.1 Ontology

Ontology is referred as the ‘study of being’ which suggests situation which is concerned with the actual existence of things in the world about which people urge to gather knowledge (Fletcher, 2017). It provides recognition of certain existence of objects about which the research is being done. It helps the researchers to accumulate knowledge about the nature and existence of the object that they are studying for. A researcher deals with certain objects in order to perform a study and come across many conflicting ideas of reality (Holden and Lynch, 2004). Ontology here helps to illustrate the existence of one single reality which can be the object of the study and can be used to understand more and experience the knowledge as the truth in reference to the existence of that object in the real world (Holden and Lynch, 2004).

Ontology is based on a philosophy which illustrate that the reality or the truth is nothing but constructed within the human mind and the existence of its reality depends on the experience of the individuals at a given time or place (Fletcher, 2017).

In this study the aim is to find out the challenges of supply chain in shoe manufacturing industry of Bangladesh and to relate this challenges to the time before pandemic and during the pandemic. In reference to the conducted study, these supply chain-oriented challenges are the object of the current research as they all have existence and entities in both the situations which is before pandemic and during pandemic. Therefore, the supply chain challenges can be addressed as an independent entity because their existence never eliminates, which advices the study to take a direction that will examine them with an objective approach.

3.2 Epistemology

Epistemology is the second phase of the research where it illustrates the study of knowledge.

It is a philosophical foundation which examine the knowledge about the nature and it´s justification, and it also relates to the development of the differentiations between opinion and beliefs (Holden and Lynch, 2004). It holds the concept of constructivism where it tells how the research has been constructed with different understanding and explanation gathered from different interviews and they hold different perceptions according to these interviews. It is considered as a reality which is being created by the influence of different people and different

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23 point of view and therefore, it portrays a nature which is similar to a subjective one (Holden and Lynch, 2004).

In this study, from the point of view of constructivism which is considered as another concept of epistemology, the reality has been developed by different people and it is influenced by the different point of view which has immerged from the explanations of the interview. These explanations were then reviewed to determine the nature of knowledge and justification and develop a difference between opinions and beliefs.

3.3 Research Strategy

3.3.1 Quantitative research: It is kind of research in which the reflection of the observations is done with the help of numerical representations of collected data and explanation of different phenomena’s is also done in numerical a manner (Bryman, 2006). According to (Fielding and Schreier, 2001) in quantitative research the empirical statements are expressed in numerical terms and it is most fulfilling when it is conducted with bigger number of respondents. It is a more technical way of representing phenomena where statistical backgrounds get developed (Khalid, Abdullah and Kumar, 2012).

In this study the situation explained are the result of empirical findings which is associate with practical experience of the respondents. To represent the experience, numerical terms are insufficient and the number of respondents are also limited. Therefore, quantitative research is no match for the kind of study we have formulated to conduct.

3.3.2 Qualitative research: It can be addressed as a market research method where it focuses on communication which is more conversational and open ended in terms of obtaining data through them (Sutrisna, 2009). It is the approach where the produced data are nonnumeric and these characteristics focuses more on the topic that produces the data (Sutrisna, 2009). The interpretation of these data can be challenging (Sutrisna, 2009). It is based on the research questions which is formulated in order to reach the aim of the study and answer the research questions. In this method of conducting research, it not only tells what people thinks but also it reveals why the thinking has been addressed or why people think so. It is a narration of the observation which is done on the sample of the research study (Sutrisna, 2009). In this study a qualitative method has been used in order to conduct the study as the data has been accumulated

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24 with a narration approach rather than statistical and numerical concepts. Here the data are the experience of our sample in regard to the topic which has been explained by the relevant theories.

3.4 Research approach

3.4.1 Abductive approach: In this approach the inference or the conclusion is made from a set of observations (Kovács and Spens, 2005). Multiple observation is done in a similar situation in regards to a particular or sometimes unlikely opinion and then a conclusion is established in accordance to those observations. Known facts and observations combined together and form an abductive inference which then regarded as fact.

In this study observation has not been conducted, so the main aspect of this approach is missing as it does not comply with our form of study.

3.4.2 Deductive approach: In this approach the established theories are mainly tasted in the context of the present situation (Hyde, 2000). Past theories combines together and formulate a new concept in order established a new theory. It can also be used to develop conclusions from the existing research literature. Although deductive reasoning is very powerful reasoning approach, but inferences formulated on this basis can sometimes be incomplete if implicated in the reality. From the statements it might look very obvious but in reality some other factors might be involved and therefore the conclusion can be inadequate.

This approach mainly works with the help of existing literatures and their links to each other, which is an insufficient approach for our study to be conducted. Therefore, the use of this approach in this study gets ruled out.

3.4.3 Inductive approach: is a method where current theories are gathered and developed (Thomas, 2006). It is an approach where inductive reasoning is the starting point of the observation and relative theories are proposed by the end of the research process and it is done as the result of the entire observation throughout the research. It is a search which involves a pattern of observation which can reveal developments and explanations of theories of similar pattern which arises or develops new series of hypothesis (Thomas, 2006).

In this approach, the research does not include any irrelevant theory in order to formulate the research questions and objectives. It aims to generate meaning of the collected data through which a pattern can be identified in relation to the formation of a theory. It does not prevent the researcher from utilising and considering the existing theory in order to formulate the

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25 research questions which will be explored in the study. Moreover, inductive method of the research approach illustrates the learning from the experience, and it gives a pattern to the regularities of experiences which helps to observe and reach to a conclusion. This method has been used in order to conduct this study which has facilitated the work by generating meaning and relationship from the collected data in order to link them with the theories. As the research method is a qualitative one, inductive reasoning approach added more value to the research itself.

3.5 Data type

3.5.1 The Primary data: relates to the specific aim and it also chooses the method that works best in order to fulfil the necessity research to reach the research problem (Hox and Boeije, 2005). It is a kind of data which can be easily access and can be easily retrieve different kind of data base (Hox and Boeije,2005). This study has been conducted by gathering both primary and secondary data and they have been described enough in order to generate ideas regarding the research problem area of the study. Primary data here indicates to the interviews that has been conducted in order to fulfil the study and the interview has been conducted through the digital platform. Semi structured qualitative interviews has been taken through internet-based phone calls and professional digital meeting rooms and these interviews has been arranged and structured in order to investigate the specific area that the study emphasises on. As for the study the main object of the research is the supply chain by itself and according to the necessity of the subject, type of industry has been focused which is the shoe manufacturing industry and the data gathering process has started accordance to that. The search of the potential companies has been done in accordance to the type of the supply chain that we have mentioned in the study and the organisations has been selected according to the same criteria’s. Further writing needed after interview.

3.5.2 Secondary data: are very significant in whole research process as it adds values and it helps to improve the prospective of the researched subject (Johnston, 2017). The sources that has been used in order to accumulate this qualitative data which acts as a secondary basis of the data collection source, has to be generated and extracted from reliable websites, libraries and university domains. Internet plays a very significant role in collecting these kind of data and developing a database. In order to portrait a better analysis of the gathered information from the database the research needs to be constructed in a synchronised pattern where these secondary data play a very crucial role to connect the stablished scenario of the past to the accumulated scenario of the present. In this study also the secondary data has worked as the

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26 bridge to connect the literatures and theories to the present situations that has been portrayed throughout the study.

3.6 Operationalization of interview questions

In reference to the study, we have formulated seventeen questions and those questions has been used in order to conduct our relative interviews. As per the concept of the study, it emphasises on the supply chain of the business, supply chain challenges and the effect of pandemic on them. The questions have been formulated with the basis of same concept and the all stand in the same platform. Two research questions have been designed in order to reach the aim and purpose of the study and all other twenty questions has been formulated by keeping those two research questions in the background. The interview questions have got a divisional pattern where they have been divided in three aspects and they are the general question, question about the challenges and questions about the effect on these challenges in different situations. They have been portrayed very clearly with the help of a table below and all the questions are related to the research questions and the theories related to them.

Section Question Theory Purpose RQs

General Questions

I. What is your designation in the company?

II. Since when you are working here?

III. What is the speciality of your company?

IV. Does your company do business

globally?

V. Who are your customers?

VI. Who are your competitors?

---

To get a general overview of the company and their activity.

---

Supply Chain Process

I. Can you explain the supply chain process for your firm?

II. How can your supply chain process create value for your company?

(Stadtler, 2005), (Peidro, Mula, Poler, and Verdegay, 2009), (Moon, Lee, Jeong, and Yun, 2008).

To get their view on their supply chain process.

---

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27 III. How do you make

decisions related to structuring of your supply chain process?

IV. In your opinion which is the most important

component of your supply chain process?

Challenges of Supply Chain

I. What affects your supply chain mostly?

II. What do you think what are the

common challenges of supply chain that manufacturers like you has to go through?

III. What are the general issues you faced in your supply chain while conducting your business globally?

(Zsidisin, 2003), (Jüttner,

Peck, and

Christopher, 2003), (Ellis, Henry, and Shockley, 2010).

To get an idea about the challenges they face in general times.

RQ: 1

The Effects of the

Pandemic (COVID- 19) on Supply Chain

I. Is the supply chain of your firm affected by the current

situation where everyone has forced to maintain a social distance?

II. Does (COVID-19) create any disruption in the supply chain process?

III. What are the supply chain issues to be focused as a result of the (COVID-19) pandemic?

(Pettit, Croxton and Fiksel, 2013), (Chopra and Sodhi, 2004)

To get their opinion on the situation of (COVID-19) and how it has affected them.

RQ:

2

Challenges in Supply Chain due to the Pandemic: A study on shoe industry of Bangladesh.

FACULTY OF EDUCATION AND BUSINESS STUDIES DEPARTMENT OF BUSINESS AND ECONOMICS STUDIES