Traditionally, businesses have focused on finding the cheapest products and short term deals. But now, they’re realizing that there’s more to buying than just price. Strategic sourcing is about looking at the whole picture, not just the cost per item. Instead of just focusing on price, strategic sourcing considers all the costs involved, like shipping, storage, and quality control. By taking a broader view, businesses can find ways to save money in the long run.
The textile industry procure raw materials locally from farmers. By focusing on building strong relationships with first-tier suppliers, textile companies in Pakistan are reaping numerous benefits. These include improved quality and gaining access to high-quality raw materials, shortened lead times, enhanced supply chain resilience, and opportunities for innovation and sustainability throughout the supply chain. Moreover, strategic sourcing can help textile companies mitigate risks associated with supply chain disruptions and by working closely with first-tier suppliers, companies can ensure that their products are produced ethically and responsibly in order to gain competitive advantage
The textile industry has been a cornerstone of Pakistan’s economy for decades, contributing 8.5 percent to its GDP and providing employment opportunities. The industry employs around 40 percent of the manufacturing workforce.The sector’s diverse offerings, ranging from cotton yarn, fabrics, garments, home textiles, denim, knitwear, towels, and bed linens are among the primary products manufactured by the textile sector. The industry is a major producer of yarn and fabric, both for domestic and international markets. A significant portion of the industry’s output is consumed domestically, indicating strong local demand. Pakistan’s strategic location and its competitive pricing have also attracted international buyers, making it a global player in the textile market. Pakistan is also one of the world’s largest exporters of textiles and apparel, with major export destinations including the USA, Europe, and Asia. According to figures from Pakistan’s Bureau of Statistics, the textile industry saw record-high exports for the year ending 30 June 2022, totalling $19.3 billion.
The industry’s success is fueled by a combination of factors, including abundant raw materials, a skilled workforce, and a favourable business environment. In Pakistan, the major cities with textile industries are Karachi, Lahore, Faisalabad, and Multan.
Raw materials play a pivotal role in the textile and apparel industry, representing a significant portion of production costs. The choice of raw materials can greatly impact the entire textile manufacturing process, from production to distribution. For short-staple yarn producers, raw materials can account for 50 percent to 70 percent of total expenses.
While it’s ideal to use flawless raw materials, cotton’s natural properties often introduce challenges that can affect performance. Balancing quality with affordability is crucial, as a perfect cotton fibre would be prohibitively expensive. Pakistan is the fifth largest cotton producer in the world after India, China, USA and Brazil. Pakistan’s share in the world cotton production in 2019-20 was 6.0 percent. Moreover, Pakistan is the third largest consumer of cotton in the world, third largest yarn producer, second largest yarn exporter and third largest cloth exporter.
Cotton is an annual agricultural product and factory owners buy the required amount of cotton once a year directly from farmers or cotton stockists. According to the Country report of Pakistan, the price of cotton in Pakistan is determined by a combination of domestic and international factors. Market forces play the most important role in setting the price. Cotton farmers use a variety of marketing strategies to sell their cotton, whether it is raw or processed. They often sell to cotton ginners or local markets, or work with cotton brokers and merchandisers in other areas to reach a wider audience and get better prices.
To produce high-quality yarn and garments, a deep understanding of raw materials and their behaviour during processing is essential. This knowledge allows producers to navigate the complexities of working with natural fibres and create exceptional products.
This sector also provides a favourable business environment like Lovat Strategic Sourcing, a textile buying hub based in Karachi, which offers comprehensive sourcing and procurement services to the international textile industry.
Strategic sourcing is a powerful tool for Pakistani textile companies like Fateh Textile Mills, Chenab Limited, Gul Ahmed Textile Mills Limited, Husein Industries Limited, Kohinoor Mills Limited, and Nishat Mills Limited, to enhance their competitiveness, reduce costs, and improve quality.
The textile industry procure raw materials locally from farmers. By focusing on building strong relationships with first-tier suppliers, textile companies in Pakistan are reaping numerous benefits. These include improved quality and gaining access to high-quality raw materials, shortened lead times, enhanced supply chain resilience, and opportunities for innovation and sustainability throughout the supply chain. Moreover, strategic sourcing can help textile companies mitigate risks associated with supply chain disruptions and by working closely with first-tier suppliers, companies can ensure that their products are produced ethically and responsibly in order to gain competitive advantage.
