influence of supplier and demand condition on the...

ISSN: 2249-7196

IJMRR/Dec. 2016/ Volume 6/Issue 12/Article No-1/1632-1643

Biswaranjan Ghosh et. al., / International Journal of Management Research & Review

*Corresponding Author www.ijmrr.com 1632

INFLUENCE OF SUPPLIER AND DEMAND CONDITION ON THE

MANUFACTURING INDUSTRY COMPETITIVENESS: A STUDY AMONGST THE

APPAREL MANUFACTURER AND EXPORTER IN TIRUPUR

Biswaranjan Ghosh*1, Dr. K.Kumuthadevi

2, Dr. D. Jublee

3

1Research Scholar, Department of Management, Karpagam University, Coimbatore, India.

2Professor & Head, Department of Commerce, Karpagam University, Coimbatore, India.

3Professor, Department of Management Studies, Karunya University, Coimbatore, India.

ABSTRACT

The apparel industry in Tirupur is continuously growing both in the pre- and post-MFA

period and providing ample business and job opportunities. For the past five years despite the

global turbulence, the export growth rate of the sector is about 15% CAGR. The study tries to

identify the factors of success in the sector associated with its growth by considering the

suppliers and supporting industries and demand condition as the competitive factors of an

individual apparel manufacturer &exporter as an independent variable and performance in the

form of the profit increase as a dependent variable. The data for the study are collected from

the manufacturers & exporters in Tirupur and statistically tested and analyzed to find the

prime successful factors for the growth of the sector.

Keywords: Apparel manufacturer & exporter, competitiveness, demand condition and

Supplier condition.

INTRODUCTION

Globalization, liberalization, and dynamic customer need putting the apparel manufacturing

organization consistently under pressure to improve the product or process efficiency in terms

of cost, quality, flexibility and timeliness and remain competitive in the global market.

Today‟s apparel manufacturer is continuously focused on the exploring ways to leverage their

supply chains and giving more focus on the role of suppliers and supporting industries in

their value chain. The supplier and supporting industries play a vital role in improving the

efficiency and responsiveness of the apparel supply chain and make the chain more

competitive in the globa lmarketplace. Without their support, a garment manufacturing

company may not be competent enough to produce the desired garment with the right quality,

quantity, time and cost. The development of these industries creates an opportunity and

favourable condition for the large manufacturer to set up their plants with a view to

outsourcing the activities, which are not, linked with the company‟s core activities.

Production of the garment involves several multiple dissimilar processes and multi-varieties

of raw materials such as fabric, button, zipper, hanger, toggles, elastic, laces, ties, etc. Since,

getting all these multi-processes and materials in a company is quite challenging but


Copyright © 2016 Published by IJMRR. All rights reserved 1633

depending on the various specialized supplier and supporting industries is quite obvious to

fulfil the market demand and remain competitive. Demand condition is an external factor and

its volatility depends upon the several socio-economic changes in the market. Cope up with

volatile demand condition by mobilizing the resources and capabilities is a challenging job

for the apparel manufacturer and exporter. Hence it is important to understand the demand

condition along with the supplier and supporting industries with a view to improvise the

effectiveness of the value chain. M. Porter (1990) pointed out that having sophistication in

demand at local market will motivate the firms to acquire the capabilities, which ultimately

put them in a competitive advantage condition. Since Tirupur is in the active apparel export

market for past three decades, where competition is multifaceted, the possibilities of

predicting demand condition, acquiring the capabilities and getting access to the right

supporting industries are essentially required to improve the industry‟s performance. The

present study tries to find the influence of the supplier and demand condition on the firm and

industries performance.

LITERATURE REVIEW

Overview and Current Industry Scenario of India’s Textile Industry

The textile sector of India is one of the important industries contributing 4 percent to India‟s

Gross Domestic Product (GDP), 11 percent of export earnings and 13 percent to the overall

industrial production of the country. The global share of India‟s textile is about 5 percent. It‟s

a labour intensive industries employs around 100 million people. The current market size of

textile is about USD 108 billion, out of which export market size is about USD 40 billion.

The industry is broadly classified into two segments, namely organized sector consisting of

man-made fibre manufacturing units, spinning mill and composite mills etc. and unorganized

sector consisting of weaving, garmenting, wet processing, and handloom etc. The value chain

of the textile manufacturing involves several steps. Fibre production, spinning, weaving or

knitting, dyeing & finishing and garment manufacturing are the major broad stages or

processes of textile manufacturing value chain. The figure (1) depicts the textile value chain.

Fig. 1: Textile Value Chain

The financial year 2015-16, the overall textile export of the country has dipped by 3.20 % to

USD 36,734.79 million as compared to USD 37,140.74 million in FY 2015. The fall is

mainly due to the slump of yarn, fabric, and made-up market. In terms of apparel export, the



growth for the FY 2015-16 is nominal and the export value is about USD16, 987.77 million.

Both the woven and knitted apparel exports have slightly improved their growth rate by 1.44

% and 0.31% respectively in the year 2015-16 (Textile excellence-2016). The USA is the

India's leading market for hosiery garment exports with an exports value of USD1675.07

million followed by the UAE, the UK, and France respectively. T-shirts, vests and ladies

wear are the top most category in the knitted export garments. In the woven apparel exports,

again the USA is India's leading market with an export value of US$ 2186.91 million in

2015-16 and recording a growth of 9.63%. The other major export markets are the UAE, the

UK, Germany and Spain. Women's suits, dresses, skirts, and jackets have been exported in

the woven category. To boost the apparel exports, the Union Government has extended

policy support through 3% Interest Equalization Scheme so that manufacturer exporters get

credit at a reasonable rate, 2% MEIS with a view to make Indian garment as a competitive

one in all countries. The Union Government also allows duty-free import of trimmings and

embellishments for the value added exports as well as basic customs duty-free import for

certain fabrics (Textile Excellence, July-2016).

Overview and Current Industry Scenario of Tirupur Based Garment Industries

Since 1870, Tirupur has been an industrial hub for the apparel sector and predominantly an

export niche knitwear cluster in apparel business. From a small business town in the 80‟s,

it has attracted the attention of both the policy makers and the businessmen at the national

and international levels. It became one of the important garment clusters in India,

providing employment to more than 6, 00,000 people directly and indirectly and earning a

considerable amount of foreign exchange. The knitwear industry has a supplier and

supporting industries as a base in the both forward and backward direction. Over the years,

to cope up with the changing market dynamics, the spinning mills are integrated forward to

set up the knitting plants, wet processing, and garment manufacturing units. The apparel

industries have all types of supplier and supporting units along the value chain of knitwear

starting from the spinning, knitting, wet processing, finishing, garment manufacturing, and

washing. In addition, the presence of trims and accessory industry supports the apparel

units to become a self-sufficient to manufacture the desired export oriented garments more

effectively and efficiently. Almost, the majority of the international apparel brands across

the globe has its presence in Tirupur. It has a wide range of factories that exports all types

of knitted fabrics and garments. As per the report depicted in the website of Tirupur

Exporters Association (TEA), Tirupur knitwear industries comprises of total 6250 units in

the different value chain. The composition of industry is broadly classified and depicted in

Table (1)

Table 1: Composition of Apparel Industry at Tirupur Garment 2500

Knitting Units 1500

Dyeing and / or bleaching units 750

Printing Units 300

Embroidery units 250

Other Ancillary Units 500

Compacting, Raising, Calendaring 300

Total 6250

Source: Tirupur Exporters Association (TEA) website



With Rs. 250 crore exports in the year 1990, the cluster‟s exports reached to Rs. 10,000 crore

in the year 2006-07 with 12% CAGR. Studies reveal that the cluster‟s export touched to Rs.

21,000 crore in the year 2015 and since the last five years, despite having turbulence and

recession in the global market and closer of dyeing units in the year 2011, the apparel

manufacturers and exporters have maintained a good track record of growth of 15% CAGR

(Textile Excellence, April-2016) against the national average growth rate which is less than

9- percent and consistently facing the global challenges to maintain the growth spirit and to

sustain in the business. The growth rate is depicted in the Fig (2 &3). Tirupur's competitive

growth is built on the strength of the flexible production system, a dynamic entrepreneurial

drive and inexpensive sources of the local cotton.

Fig. 2: Tirupur’s Apparel Export (Rs-Crores) Fig. 3: India’s Textile Export in USD Billion

Source: TEA and IBEF (Indian Brand Equity Foundation)

The favorable yarn price, market condition, foreign currency values, foreign trade agreements

coupled with the deployment right technology which are adding competitive advantage to

Tirupur. Despite of all these advantages, the cluster is struggling hard to compete in the cost

front before competing countries such as: Vietnam and Bangladesh. High labour cost,

unskilled &non- availability of labour, lack of modern supporting industries, poor financial

assistance, lack of R&D, poor infrastructure facility and undue price fluctuation in raw

material impeding the growth of the sector. China, Bangladesh, and Vietnam are the major

competitors of Tirupur-based garment exporter. Past studies show, Tirupur is well placed in

the global market in terms of delivering product with right quality and design, but in cost

frontier, it lacks competitiveness. Recent past, Government of India has taken several steps to

overcome the obstacle which impedes the growth of the sector. Among them, implementation

of Goods and Service Tax, signing of FTA with EU and Canada, an increase of duty

drawback rate based on the global market trend and improvement of interest subvention rate

are under process. In July-2016, the Union Government has announced a special package

worth of Rs. 6000 crore to build the necessary capacity for boosting the textile exports and

creating employment of the country. In connection with labour reform program, various

strategies are chalked out to identify the school dropouts and direct them towards the textile



industry, creating labour training infrastructure across the country, creating housing, hostel,

healthcare, education and recreational infrastructure for the outstation worker are the some of

the major initiatives taken by Tirupur based industries in collaboration with the Government

of India.

Competitiveness and Competitive Advantage

The competitiveness at the firm and industry level depends upon the capability of the firm or

industry to mobilize its resources to produce or supply the products superior to those offered

by the competitors and remain in the global market fulfilling the challenges posed. Creating

competitive advantages requires determination of the factors that may put the firm in a better

position. M. Porter (1990) devise a diamond model of competitiveness, where he opinions,

four interlinked broad attributes of the proximate environment of a firm which have the

greatest influence on its ability to innovate, upgrade and put the firm in the competitive

position. These attributes are (1) factor condition, (2) demand condition, (3) related and

supporting industries, (4) firm strategy, structure, and rivalry. In the same vein, the role of the

Government is also an indirect determinant or attribute for the competitive advantageous

condition. Porter (1991) defines competitive advantages as the capability of a company or

industry to make the products to provide more value to the customer than competing

products, such as by offering lower prices or providing quality services or other benefits that,

justify with the higher prices. The strongest competitive advantage is a strategy that cannot be

imitated by other companies.

With reference to the suppliers and supporting industries, M. Porter (1990) quotes that the

special account should be given to the industries which are directly related or support the core

manufacturing industries. The reason for this requirement is that, provided a supplier industry

possesses an international advantage, downstream industries could benefit from it in several

ways. The presence of competitive advantage in the supplier industries could influence the

creation of the downstream industries with the provision of coordination on the part of the

former in terms of linkages with the value chains of the latter. With regards to the demand

condition, Porter (1990) opinions that, the importance of demand conditions as a determinant

influencing the competitive advantage of the firm or industries. In competitive advantage

framework with regardless to other determinants, competitiveness in an industry is achieved

only when demand condition allows successful realization of firms‟ products.

Kannan and Choon Tan (2006) say that supplier and supporting industries indirectly

determine the quality of the final product. There is, therefore,need for the manufacturing

firms to put in place of measures to develop and equip the suppliers and supporting

organization with prerequisite skills in order to ensure the quality supplies. Halle, Guyo, &

Amuhaya, I.M. (2014) say that the buyer/supplier collaboration enhances the procurement

performance hence creating a competitive advantage through sharing information for making

a joint decision and, inter-organizational relationship.

C. Daniele et.al. (2011) consider that at the firm and industry level, competitiveness is

understood in the two different perspectives. The first is the driver responsible for driving the

competitiveness of a firm‟s performance and the second is the firm‟s and industries

competitive performance as an outcome. The drivers are the available or accessible resources



(labor, raw material, technology, finance, knowledge etc.), infrastructure facilities, access to

the market, managerial practices, dynamic capabilities, supplier and related industries, the

presence of the rivalry and Government. The outcome is expressed in the terms of the firm‟s

superior performance such as an increase in the sales revenue, profit, market share etc. JMOP

(2003) points out the measures of the competitiveness at the firm level include firm's

profitability, firm's exports, and market share. Competitiveness, as explained by Porter

(1990), is defined at three levels: firm, industry, and nation. Measure of the competitiveness

at the firm level includes the firm's profitability, firm's exports, and market share.

From the suppliers and supporting industries point of view, the apparel industry in Tirupur

has taken joint initiative among the firms, their associations, and government to generate

necessary support to cope up with the dynamism of the market. Apparel manufacturer and

exporter dependon a large extent on their suppliers and supporting industries to avail for the

right products, with the right quality, quantity and at the right time. Hence, it is important for

the suppliers, firms, industries and other stakeholders in the value chain to integrate

themselves for the creation of a business environment which enhances the relationship among

the stakeholders and creates a competitive advantage condition. On the demand side, knitted

garments have found their markets all over the world and belong to the consumers of the all

age groups. Diversification in the export markets with respect to the varied apparel and non-

apparel products therefore a logical step for the industry to achieve its higher value.

Continuous and consistent cope up with fluctuated demand market through mobilization of

the resources will help the industries to acquire the necessary capabilities, which in long run

will create a competitive advantage.

The literature reveals the fact that among the factors of competitiveness, suppliers and

supporting industries coupled with the demand condition are the two major factors. The

present study intends to analyze the influence of same on the competitiveness and

performance of the apparel industries based in Tirupur.

OBJECTIVES

To study and examine the influence of the supplier and supporting industries on the

performance of the apparel manufacturer and exporter in Tirupur.

To study and examine the influence of the demand condition on the performance and

competitiveness of the apparel manufacturers and exporters.

RESEARCH METHODOLOGY

This is a descriptive study intended to find the influence of the supplier and supporting

industries and the demand condition towards the competitiveness and success of the apparel

manufacturer and exporter operating in Tirupur. Apparel manufacturer cum exporters

registered with Tirupur Exporter Association are considered as the population of the study.

Out of the total 941 registered exporters, 223 exporters are chosen as sample using the simple

random sampling method. Primary data are collected through the personal interview after

administering a well-structured questionnaire to the firm‟s top management officials such as

proprietor or head of the organization. The secondary data are collected from the past

research papers, leading journals, books, conference proceedings etc. Questionnaires are



designed to know the demographic profiles of the apparel manufacturer and exporter, their

relative performance for the past three years and influence of the supplier and demand

condition on the firm performance. Increase of profit and sales revenue are considered as an

indicator of firm‟s and industry‟s performance and relatively measured through a 5- point

Likert Scale (1- worst, 2-worse, 3- no change, 4-better, 5-best). Influence of the supplier and

demand condition are measured through a 5- point Likert Scale (1- strongly disagree, 2-

disagree, 3-neutral, 4- agree, 5- strongly agree).

ANOVA- test and multiple regression analysis tools are applied to validate the significance

of the model and assess the influence of the variables on the firm performance in the terms of

“increase in profit”. Preliminary analyses are made to ensure there is no violation of the

assumptions of linearity and multicollinearity.

RESULTS AND DISCUSSION

Firm performance

Table 2: Performances of firms in the last three years i.e. 2011-12, 2012-13, and 2013-14

Worst

(1)

Worse

(2)

No change

(3)

Better

(4)

Best

(5) Mean Std. Deviation

Sales revenue rise 0.4 % 1.3 % 39.9 % 49.8 % 8.5 % 3.6457 .67455

Increase in Profit 00 % 6.7 % 52.9 % 37.7 % 2.7 % 3.3632 .64925

The Table (2) indicates the mean value of the performance in terms of the rise in the sales

revenue and increase in the profit are 3.65 and 3.37 respectively. It means the performances

of the firms are good for the last 3- years. As per Textile Excellence Magazine (April-2016)

for the last five years, Tirupur exports have grown to CAGR of around 15 percent and the

overall garment exports of the country have increased at a CAGR of less than 9- percent.

Demand condition

Table 3: Respondents Opinion on Demand Condition Towards Competitiveness

5 4 3 2 1

Strongly

agree

Agree Neither agree

nor disagree

Dis

agree

Strongly

disagree

Total

agree %

Total

disagree%

Continuous demand 76.2 17.9 5.4 0.4 -- 94.2 0.4

Adequate order size 19.9 23.6 49.3 7.2 -- 43.5 7.2

Sophisticated demand 24.7 22.9 39.9 9.4 3.1 47.5 12.6

Conductive foreign

trade agreement

2.2 20.6 60.1 17.0

-- 22.9 17.0

Favorable currency

exchange

4.0 12.6 56.5 25.6 1.3

16.6 26.9

Affordable lead time 5.8 20.6 61.9 10.8 0.9 26.5 11.7

The result of the Table (3) shows that 94.2 % respondents agree, 0.4% respondents disagree

and 5.4% respondents are neutral that the continuous demand is a competitive factor. 43.5%

respondents agree, 7.2 % respondents disagree and 49.3% respondents are neutral that the

adequate order size is a competitive factor. 47.5% respondents agree 12.6 % respondents

disagree and 39.9 % respondents are neutral that the sophisticated demand is a competitive

factor. 22.9 % respondents agree, 17.0 % respondents disagree and 60.1% respondents are

neutral that the conductive foreign trade agreement is a competitive factor. 16.6%

respondents agree, 26.9% respondents disagree and 56.5% respondents are neutral that the



favorable currency exchange is a competitive factor. 26.5% respondents agree, 11.7%

respondents disagree and 61.9% respondents are neutral that the affordable lead time is a

competitive factor.

Supplier & Supporting Industries condition

Table 4: Respondents opinion on the Supplier and supporting Industries towards the

competitiveness

Strongly

agree Agree

Neither

agree nor

disagree

Dis

agree

strongly

disagree

Total

agree %

Total

disagree%

Supplier deliver the quality

product 12.1 60.5 23.8 3.6 -- 72.6 3.6

Supplier’s concern to reduce supply

chain cost 12.1 21.0 24.7 2.2 40.0 33.1 42.2

Supplier’s concern on time 8.5 51.6 36.3 3.6 -- 60.1 3.6

Supplier’s expertise inexport

market 3.6 27.4 61.9 6.3 0.9 30.9 7.2

Availability of local supplier 6.3 18.8 63.7 9.9 1.3 25.1 11.2

The result of the Table (4) showsthat72.6 percentage respondents agree, 3.6 percentages

disagree and 23.8 percentages are neutral that, the supplier delivers the quality product is a

competitive factor. 33.1 percentage respondents agree, 42.2 percentages disagree and 24.7

percentages are neutral that, the supplier‟s concern to reduce the supply chain cost is a

competitive factor.60.1 percentage respondents agree, 3.6 percentages disagree and 36.3

percentages are neutral that, the supplier‟s concern towards time is a competitive factor. 30.9

percentage respondents agree, 7.2 percentages disagree and 61.9percentages are neutral that,

the supplier‟s expertise in the export market is a competitive advantage factor. 25.1

percentage respondents agree, 11.2 percentage disagree and 63.7 percentage are neutral that,

the availability of local supplier is a competitive advantage factor

REGRESSION ANALYSIS

Supplier and Supportive Industries’ Influence on Industry Performance

Table 5: Regression, Supplier Condition as Independent Variable and Profit as

Dependent Variable (DV)

Model

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

1 (Constant) 1.423 0.186

7.632 0.000

Supplier deliver the

product as per required

quality 0.191 0.071 0.201 2.686 0.008

Suppliers concern to

reduce supply chain

cost

-0.254 0.072 -0.264 -

3.533 0.001

Suppliers concern

towards time 0.368 0.075 0.390 4.881 0.000

Supplier „s experience

in export market 0.189 0.077 0.195 2.468 0.014

Availability of local

supplier -0.022 0.061 -0.026

-

0.368 0.713

Anova: Significant value. < 0.05; Model R sq.=28%, collinearity diagns: All VIF values <4



The Table (5), the model significant value (p-value) is less than 0.05. This indicates the

suppliers related factors have a significant relationship with the performance of the firm as an

“increase in the profit”. The higher beta value in case of the “supplier‟s concern towards

time” indicates same is more important than “supplier deliver the quality product” and,

“supplier‟s expertise in the export market for competitiveness. Since the garment

manufacturing involves many raw materials and manufacturing of all raw materials is not

possible in one firm owing to dissimilar nature of the material; depending upon the

committed supplier at the back end is quite inevitable for the sustained business and

competitiveness. Since Tirupur is a cluster of knitwear manufacturing and associates with the

active export business for the past three decades, getting required supplier is quite obvious.

The negative beta value (-0.264) in the case of “commitment to reduce supply chain cost”

indicates same is not conducive for the firm performance. In a dynamic demand fluctuating

apparel market, getting right supplier as per the requirement is quite challenging. At many

occasion, a garment apart from the fabric requires various other materials such as trims,

accessories, special effect appliques and ornamentation and same requirement may not

consistent with other styles. Getting all these inconsistent required materials in one place /

supplier with economies of scale and scope is quite challenging. Hence controlling the supply

chain cost for all the material requires close coordination of all the stakeholders in a chain for

a mutual interest. The mutual win-win interest may not be possible for all the occasion since

the influence of one will affect the others in a chain in the either way.

Demand Condition’s Influence on Industry Performance

Table 6: Regression, Demand Condition as an Independent Variable and Profit as a

Dependent Variable (DV)

Model

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

1 (Constant) 1.789 0.210

8.525 0.000

continuous

demand 0.204 0.031 0.379 6.496 0.000

Adequate order

Size

-0.069 0.039 -0.099 -1.782 0.076

Sophisticated

demand

0.089 0.032 0.178 2.765 0.006

Conducive

Foreign trade

agreement

0.083 0.063 0.086 1.319 0.189

Favorable

Currency

exchange

0.165 0.061 0.196 2.725 0.007

Affordable lead

time

-0.142 0.043 -0.193 -3.293 0.001

Anova: Significant value. < 0.05; Model R sq.=34.5%, collinearity diagns: All VIF values <4



The Table (6), the model significant (p-value) value is less than 0.05, indicates “demand

condition” has a significant relationship with the performance of the firm as an “increase in

the profit”. Among the six chosen sub-variables, the relationship is significant (p< 0.05) with

the performance in respect to the continuous demand, sophisticated demand, currency

exchange and affordable lead time, whereas the relationship is insignificant (p> 0.05) in

respect to the order quantity and foreign trade agreement. The beta (standardized coefficients

of regression) value (0.379) in case of the sub-factor “continuous demand” indicates same is

more important than the others. Demand condition is the one which decides success and

failure of a particular industry. Continuous predictable demand and its growth coupled with

the ability of the firm to meet the requirements will decide the success of a firm. Mckinsey &

company (2014) reported that the size of the global apparel business is growing and is

expected to generate a double-digit growth in between 2014 to 2020. The present growth of

Tirupurmay be due to the growth of the global demand, which may be attributed to

continuous demand. Traditionally Tirupur is popular for T-shirt. Today the changing

customer need placed T- shirt as an office wear dress in some of the western country (S.

Kathathasami-2015). In terms of the currency exchange rate, the exporters are benefitted with

the weak rupee against the dollar. The growing and changing demand pattern put lots of

challenge on the exporter to produce nice varieties which ultimately build up the competitive

capacity and makes them competitive. The negative beta value (-0.193) in the case of “lead

time” implies availed lead time negatively influencing the performance and competitiveness.

MAJOR FINDINGS

The mean values of the industries performance in terms of increase in sales revenue and

profit are 3.65 and 3.37 respectively. This indicates exporter‟s performance is moderately

good in the last 3-years.

In terms of demand condition, 94.2 % respondents agree, that the continuous demand is a

competitive factor. 73.5% respondents agree that, the adequate order size is a competitive

factor. 47.5% respondents agree that the sophisticated demand is a competitive factor for the

firm or industries competitiveness.60.1% respondents are neutral that the conducive foreign

trade agreement is a competitive factor, 56.5% respondents are neutral that the favorable

currency exchange is a competitive factor and 61.9 % respondents are neutral that the

affordable lead time is a competitive factor.

In terms of the supplier and supportive industries condition, 94.2 % respondents agree, that

continuous demand is a competitive factor (CF). 73.5% respondents agree, that the adequate

order size is a CF. 47.5% respondents agree that the sophisticated demand is a competitive

factor. 22.9 % respondents agree that, the conductive foreign trade agreement is a CF. 16.6%

respondents agree, that the favorable currency exchange is a CF. 26.5% respondents agree,

that the affordable lead time is a CF.

“Supplier & supporting industries” and “demand condition” have a significant

relationship with the performance of the firm.

The negative beta value (-0.264) in the case of “commitment to reduce supply chain cost”

indicates same is not conducive for the firm‟s performance. The higher beta value (0.360) in

the case of “suppliers concern towards time” is more important than the other variables for

the competitiveness.



The beta (coefficients of regression) value (0.379) in the case of sub factor “continuous

demand” indicates same is more important than the other variable for the competitiveness.

The negative beta value (-0.193) in the case of “lead time” implies availed lead time

negatively influencing the performance and competitiveness of industries.

SUGGESTIONS

The negative beta value in case of the supplier‟s commitment to reduce the supply chain

cost suggests to have measures to reduce the supply chain cost. Measures such as lean

manufacturing system, six sigma tools should be implemented both by the supplier and host

organization to reduce the cost. Implementation ERP system will also help the supply chain

to become more responsive and hence reduce the cost. In line with the above organization

should urge the Union Government to have a preferential trade agreement with EU and

Canada, so as to compete with Bangaldesh and Vietnam on the cost front. Collaborating the

decision-making system with the supplier and supporting industries and assisting the

supporting industries to equip with the modern technology will also help the organization to

reduce the cost.

The prevailing lead time in relation to buyer negatively affecting the performance

suggests to have measures to cope up with the same. Normally in apparel export market lead

time varies from 60 days to 90 days depending upon the type of buyer and garment category.

The majority of these times has been consumed by the pre-production activities of the

vendor. Among the pre-production activities, sampling process and approval is the activities

which consumes more time. Hence it‟s important for the vendors to improvise the process

efficiency of merchandising department in relation to other and to make sure that the samples

should be get approved in one short and comments should be implemented thoroughly for the

subsequent stage of the sample submission. This will avoid the rejection of samples and save

the time, which can utilize for the enhancement of quality and productivity. In addition to

above deployment of right electronic technology coupled with the right purchasing system

will save the times spent for the fabric and trims purchasing. From the buyer side, lead time

duration can be enhanced and unduly delay can be minimized, if buyer takes the vendor to

work on a common platform during the product development and preproduction process

CONCLUSION

The present study focused on the influence of suppliers & supportive industries and demand

condition on performance of apparel manufacturer and exporter operating in Tirupur. Both

the supplier and demand condition have a significant relation with the firm and industry

performance. It has also been found that supplier‟s concern to reduce the supply chain

response time and supplier's expertise in the export market and quality delivery contributes

positively, whereas the supplier concern to reduce the supply chain cost affects negatively to

the competitiveness of the industries. In the case of demand condition, continuous demand,

the sophistication of demand and currency exchange supports positively, whereas the lead

time availability affects negatively towards the competitiveness of the apparel manufacturer

and exporter.



FUTURE SCOPE OF STUDY

There are several factors which influence the competitiveness of industries and create a

competitive advantageous condition. Among the factors, the present study considers only the

external factors related to supplier & supporting industries and demand condition. This study

can further enhance with the consideration of other business environmental factors which are

internal and external to the organization and its influence on the industry competitiveness.

The mediating variables influence on the industry competitiveness may be considered for the

future study. The study may be extended to other textile clusters in India and competing

countries.

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