Bangladesh is one of the fastest-growing economies in the world, with an average annual GDP growth rate of 6.5% in the last decade. The country has made remarkable progress in reducing poverty, improving human development, and diversifying its exports. The manufacturing sector, especially the readymade garments (RMG) industry, has been the main driver of Bangladesh’s economic growth, accounting for about 80% of the country’s export earnings and employing about four million workers.
However, the manufacturing sector of Bangladesh also faces significant challenges, such as rising labor costs, low productivity, quality issues, and global competition. To overcome these challenges and sustain its growth momentum, Bangladesh needs to embrace automation as a key strategy to enhance its productivity and competitiveness. Automation refers to the use of technology to perform tasks that were previously done by humans, such as operating machines, processing data, or providing services. Automation can bring various benefits to the manufacturing sector of Bangladesh, such as increasing output, reducing costs, improving quality, and creating new opportunities.
Automation Adoption in Manufacturing Sector of Bangladesh
In recent years, Bangladesh has witnessed an increasing trend of automation adoption across various industries, such as RMG, pharmaceuticals, food and beverages, plastics, ceramics, and leather. According to a survey by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), about 250 RMG factories have adopted automation in some form, such as sewing machines, cutting machines, finishing machines, or software systems. Some examples of Bangladeshi companies that have implemented automation are:
- DBL Group, a leading RMG manufacturer, has invested in automated sewing machines, cutting machines, and finishing machines, which have increased its production capacity by 25% and reduced its labor cost by 15%.
- Square Pharmaceuticals, the largest pharmaceutical company in Bangladesh, has adopted automation in its production, packaging, and quality control processes, which have improved its efficiency, accuracy, and compliance with international standards.
- PRAN-RFL Group, a leading conglomerate in the food and beverage sector, has introduced automation in its factories, warehouses, and distribution centers, which have enhanced its operational performance, inventory management, and customer service.
The main factors driving automation adoption in Bangladesh are:
- Labor cost optimization: Automation can help reduce the dependence on labor, which is becoming more expensive and scarce due to rising wages, labor unrest, and skill gaps. Automation can also help improve the working conditions and safety of workers, which can reduce absenteeism and turnover.
- Quality control: Automation can help improve the quality and consistency of products, which can increase customer satisfaction and loyalty. Automation can also help comply with the quality standards and regulations of the domestic and international markets, which can enhance the reputation and competitiveness of Bangladeshi products.
- Innovation and differentiation: Automation can help foster innovation and differentiation, which can create new value propositions and market opportunities for Bangladeshi products. Automation can also help integrate with the global value chains and networks, which can increase the access and exposure of Bangladeshi products to the world market.
The main challenges faced in implementing automation in Bangladesh are:
- Skill shortages: Automation requires a skilled and trained workforce that can operate, maintain, and upgrade the automated systems and processes. However, Bangladesh suffers from a lack of skilled workers and professionals in the fields of engineering, technology, and management, which can hamper the adoption and utilization of automation.
- Infrastructure gaps: Automation depends on reliable and affordable infrastructure, such as electricity, internet, and transportation, which can support the smooth and efficient functioning of the automated systems and processes. However, Bangladesh faces significant infrastructure gaps and bottlenecks, such as power shortages, low internet penetration, and poor road connectivity, which can limit the scope and scale of automation.
- Financial constraints: Automation involves a high initial investment and recurring costs, which can pose a financial burden for many Bangladeshi companies, especially the small and medium enterprises (SMEs). The availability and accessibility of financing options, such as loans, grants, and subsidies, are also limited and challenging for many Bangladeshi companies, which can hinder their ability and willingness to adopt automation.
Government Initiatives and Policies
The government of Bangladesh has recognized automation as a key driver of economic growth and development, and has taken various initiatives and policies to promote automation adoption in the country. Some of these initiatives and policies are:
Digital Bangladesh Vision
The government has launched the Digital Bangladesh Vision in 2009, which aims to transform Bangladesh into a digital economy by 2021 and a knowledge economy by 2041. The vision identifies four pillars: human resource development, connecting citizens, digital government, and promotion of the ICT industry. Under this vision, the government has implemented various programs and projects, such as establishing digital centers, providing internet access, developing e-government services, and supporting ICT entrepreneurs and startups.
Tax incentives
The government has provided tax incentives for the automation and modernization of the manufacturing sector, such as tax holidays, tax exemptions, and tax reductions. For example, the government has offered a 10-year tax holiday for the high-tech industries, a 100% tax exemption for the ICT exports, and a 10% tax reduction for the RMG factories that adopt green technology.
Training programs
The government has initiated training programs to develop the skills and competencies of the workers and professionals in the automation and technology fields. For example, the government has launched the Leveraging ICT for Growth, Employment and Governance (LICT) project, which aims to train 65,000 IT/ITeS professionals, 10,000 digital freelancers, and 2,000 IT entrepreneurs. The government has also established specialized labs in all the universities and colleges to provide hands-on training on automation and technology.
The government has also established regulatory bodies and frameworks to ensure the safety and compliance of the automation and technology sectors, such as the Bangladesh Computer Council (BCC), the Bangladesh Telecommunication Regulatory Commission (BTRC), and the Bangladesh Accreditation Board (BAB).
Case Studies of Successful Automation Implementation
To illustrate the benefits and best practices of automation implementation, here are some case studies of Bangladeshi companies that have successfully adopted automation in their operations:
Ananta Group
Ananta Group is one of the leading RMG manufacturers and exporters in Bangladesh, with a turnover of over $250 million and a workforce of over 26,000. The company has implemented automation in its sewing, cutting, and finishing processes, which has increased its production capacity by 30%, reduced its labor cost by 20%, and improved its quality and compliance standards. The company has also invested in a state-of-the-art laundry plant, which uses automation and artificial intelligence to produce various wash effects and finishes for denim products. The company has also adopted automation in its management and administration functions, such as using software systems for payroll, inventory, and accounting.
ACI Limited: ACI Limited is one of the largest conglomerates in Bangladeshhttps://divobd.com/industries/banking-and-finance-digital-transformation/, with diversified businesses in pharmaceuticals, consumer products, agribusiness, and retail. The company has adopted automation in its production, packaging, and distribution processes, which has enhanced its efficiency, accuracy, and customer service. The company has also implemented automation in its quality control and assurance processes, such as using automated testing equipment, barcode scanners, and RFID tags, which have ensured the safety and traceability of its products. The company has also leveraged automation and technology to innovate and differentiate its products, such as launching the first digital inhaler in Bangladesh, which can monitor and record the usage and dosage of the inhaler.
BRAC Bank
BRAC Bank is one of the leading private commercial banks in Bangladeshhttps://divobd.com/deep-dive-into-document-digitization-in-bangladesh/, with a focus on SME banking. The bank has adopted automation in its banking and financial services, such as using automated teller machines (ATMs), mobile banking, internet banking, and agent banking, which have increased its outreach, convenience, and security for its customers. The bank has also implemented automation in its internal processes, such as using robotic process automation (RPA) to automate repetitive and manual tasks, such as data entry, reconciliation, and verification, which have reduced its operational costs, errors, and risks. The bank has also utilized automation and technology to improve its decision making and performance, such as using data analytics, artificial intelligence, and machine learning to analyze customer behavior, preferences, and creditworthiness.
Future Outlook for Automation in Bangladesh
The future outlook for automation in Bangladesh is bright and promising, as the country is expected to witness a rapid growth of automation in the coming years. According to a report by the International Labour Organization (ILO), Bangladesh has the potential to automate 53% of its total employment by 2041, which can increase its GDP by 19%. According to another report by the McKinsey Global Institute, Bangladesh can increase its productivity by 30% by 2030 by adopting automation and technology.
Some of the emerging trends in automation that Bangladesh can leverage are:
Industry 4.0
Industry 4.0 refers to the fourth industrial revolution, which is characterized by the integration of physical, digital, and biological systems, such as the internet of things (IoT), cloud computing, big data, and biotechnology. Industry 4.0 can enable the manufacturing sector to achieve smart and connected production, which can optimize the efficiency, quality, and flexibility of the production processes and products.
Artificial intelligence
Artificial intelligence refers to the simulation of human intelligence and capabilities by machines, such as learning, reasoning, and problem-solving. Artificial intelligence can enable the manufacturing sector to achieve intelligent and adaptive production, which can enhance the innovation, customization, and differentiation of the production processes and products.
Blockchain
Blockchain refers to a distributed and decentralized ledger system, which can record and verify transactions and data without the need for intermediaries or central authorities. Blockchain can enable the manufacturing sector to achieve transparent and secure production, which can improve the trust, traceability, and accountability of the production processes and products.
Automation Opportunities and Challenges in Bangladesh
Some of the opportunities and challenges for Bangladesh in the global automation landscape are:
Opportunities
Automation can create new opportunities for Bangladesh to enhance its economic growth, social development, and environmental sustainability. Automation can help Bangladesh to increase its value addition, diversification, and integration in the global market, which can boost its export earnings and foreign exchange reserves. Automation can also help Bangladesh to create new jobs, improve living standards, and reduce inequalities, which can foster social cohesion and stability. Automation can also help Bangladesh to reduce its carbon footprint, conserve natural resources, and mitigate climate change, which can enhance its environmental resilience and responsibility.
Challenges
Automation can also pose some challenges for Bangladesh to overcome and adapt to the changing dynamics of the global market, society, and environment. Automation can create some risks of job displacement, skill mismatch, and income polarization, which can affect the livelihoods and welfare of the workers and the poor. Automation can also create some threats of cyberattacks, data breaches, and ethical dilemmas, which can compromise the security and privacy of the businesses and the consumers. Automation can also create some pressures of standardization, regulation, and competition, which can challenge the sovereignty and autonomy of the country.
Conclusion
In conclusion, automation is transforming manufacturing sector Bangladesh, by bringing various benefits, such as increasing productivity, reducing costs, improving quality, and creating new opportunities. However, automation also entails some challenges, such as skill shortages, infrastructure gaps, financial constraints, and social and environmental implications. Therefore, Bangladesh needs to adopt a proactive and holistic approach to embrace automation, by developing its human capital, infrastructure, and innovation ecosystem, and by aligning its policies, regulations, and partnerships with the global trends and best practices. Automation can be a game-changer for Bangladesh, if it can leverage its potential and overcome its limitations.
