The crisis has thrown into sharp focus the inadequacies of the existing system of payment terms within the apparel manufacturing supply chain. Payment terms within the apparel industry are varied and differ sharply from normal trade practices. Under this system, a manufacturer will rely on a Purchase Order (PO) from a customer to execute an order. What is important is that whatever payment term system is adopted by the apparel industry, it needs to be clearly recognized that existing payment terms are no longer fit for purpose. When the world returns to normal, or the new post Covid-19 normal, the apparel industry needs, collectively, to establish a payment system that is endorsed by international agencies and is respected by all participants.

Source: Dhaka Tribune April 28, 2020 14:37 UTC