Integration with supplier : A case study with Ittehad textiles

Abstract: Title: Supplier Integration – a case study with ITI Background: The textile industry is one of the most important sectors of Pakistan. The Pakistan textile industry contributes more than 54% to the country's total exports, which amounts to around 9.57 billion US dollars. The industry contributes around 46% to the total output produced in the country. Internally the increase in cost of utilities, (Power, Gas, Transport, and Petrol) has impacted viability. The power & gas outages have further deteriorated capacity utilization. The shortage of cotton crop in China increased the prices of cotton. The increased demand of yarn export created problem of raw material shortage in the local market. Research Questions: What kind of supplier integration should ITI implement to avoid the raw material shortage in the current situation of Pakistan? What would be the outcomes of having that integration for ITI? Purpose: The purpose of this thesis is to investigate what kind of supplier integration ITI should adopt to avoid raw material shortage in the current situation of Pakistan. Further, the thesis leads toward the possible outcomes of integration which may be positive or negative by keeping in view the theory and practice. Method: The empirical data is based qualitative data. A case study is carried out at the Pakistan textile company ITI Industries Ltd. The thesis is based on the positivistic perspective and with a deductive approach. Conclusions: We suggest the quasi integration rather than the full supplier integration. By having the integration with supplier and making them partners ITI can avoid the raw material shortage. Because than supplier feels the more responsibilities to provide the raw material to its strategic partner rather than to go for other buyers. At that time ITI has a limited approach on integration but integration with suppliers is more valuable than only providing raw material. These are dynamic capabilities and competitive advantages.