IMPACT OF UNETHICAL PRACTICES IN SUPPLY CHAIN MANGEMENT OF TEXTILE INDUSTRY IN PAKISTAN

Abstract

Textile is Pakistan’s major source of income and the country’s export is one of the largest in the world. Other countries such as China, Bangladesh and India are also contributing to fulfill the demand. Today textile brands want short lead times, quality and low cost from their suppliers. The competition is so high that something has to go wrong down the supply chain. Suppliers are continuously in search of cheaper ways to manufacture textile products in order to keep their price low. Unethical ways are practiced by many manufacturers that include child labor, working of the clock, bad environment and health, forced labor, illegal immigrants, fire safety and low wages are paid to employees. My research is based on the critical issues in the textile industry regarding unethical supply chain network. Unethical supply chain lead to serious problems when social and ethical standard audits are conducted. The consequences of such unethical practices could be the termination of business. The research hypothesis is Non compliance with code of ethics of foreign buyers will lead to non-sustainable business in textile industry of Pakistan. Unethical sourcing is a critical issue as far as social compliance audit is concerned. A sample of 40 reports of 20 textile factories is taken ( SC audit ) from Pakistan. The companies were selected situated in different industrial areas of Pakistan. Secondary data was used in this research to verify the findings based on audits that were conducted directly or by third party during a period from June 2010 to January 2012 of 20 factories. The results and research findings reflect that during this period, forty audit reports of 20 factories showed unethical practices during social compliance audit that can lead to termination of business, this would develop non sustainable business for the textiles.