Impact of Operating Cost Reduction on The Economic Challenges Facing Small-Size Clothing Factories in Saudi Arabia
DOI:
https://doi.org/10.14738/assrj.79.9138Keywords:
operating costs; clothing factories; economic challenges; Saudi Arabia.Abstract
The clothing manufacturing industry in the Kingdom of Saudi Arabia has faced many challenges at the local and international level. The implementation of the rules and regulations of the World Trade Organization (WTO) and the Kingdom’s Vision 2030 have gained particular interest and operating with minimum costs has become one of the main objectives of small-size clothing factories. The impact of operating cost reduction on economic challenges facing the clothing factories has been studied with the aim to identify the challenges and economic factors affecting operating costs. It was concluded that some of the economic challenges are represented in the high operating cost caused by the application of new taxes, including the value-added tax (VAT), imposition of fees on non-Saudi workers and new amendments to the trade law. Minimizing operating costs through cutting-edge manufacturing technologies were found to be a key solution to ensure factories’ survival and sustainability.
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[2]. Al-akkad, J. A. M. A. L. (2018). Aligning the appeal of entrepreneurs to investors: why is there a need for an optimal entrepreneurship training module in the Kingdom of Saudi Arabia to better engage entrepreneurs with investors, Durham University Business School United Kingdom, p,2-295.
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[19]. Cooper, D. & Schindler, P. S. (2001). Business research methods. The McGraw-Hill, Singapore.
[20]. Dang X (2012) Automatic warehousing system: moving forward in exploration. Logistics Technol 18:14–17
[21]. De Carlo F, Arleo MA, Borgia O, Tucci M (2013) Layout design for a low capacity manufacturing line: a case study. Int J Eng Bus Manag 5-35.
[22]. Deep K, Singh PK (2015) Design of robust cellular manufacturing system for dynamic part population considering multiple processing routes using genetic algorithm. J Manuf Syst 35:155 163.
[23]. Elasrag, H. (2007). The future of SMEs in the Egyptian Economy. Munich Personal RePEc Archive, MPRA Paper No. 1856, posted 21. February 2007,1-82.
[24]. Feng, A., & Valero, A. (2020). Skill-Biased Management: Evidence from Manufacturing Firms. The Economic Journal, 130(628), 1057-1080.
[25]. Galí, J., & Van Rens, T. (2020). The vanishing procyclicality of labor productivity. The Economic Journal, 1-43.
[26]. Garbie, I. (2016). Sustainability in small and medium-sized manufacturing enterprises: an empirical study. The Journal of Engineering Research [TJER], 13(1), 42-57.
[27]. Gartner, W. B., & Birley, S. (2002). Introduction to the special issue on qualitative methods in entrepreneurship research. Journal of Business Venturing, 17(17), 387–395.
[28]. General Authority for Statistics, Industrial Activity Survey. (2017), 08: 52, 09/19/2019 https://www.stats.gov.sa/ar/988
[29]. General Authority of Zakat and Income, Indirect Taxes Program, Value Added Tax System.(2017) 01:32.07/07/2019 https://www.vat.gov.sa/sites/default/files/2017-09/SaudiVATlaw-bilingual.pdf
[30]. General Authority of Zakat and Income, Value Added Tax Manual, Saudi Arabia. (2017) 03:17, 07/07/2019 https://www.vat.gov.sa/sites/default/files/2017-11-2/VAT_Manual_Arabic_16_Nov.pdf
[31]. General Authority of Zakat and Income, the general guide for value-added tax. (2019) 06:55, 07/07/2019 https://www.vat.gov.sa/sites/default/files/2018-10/General_VAT_Guide_AR_0.pdf
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[34]. He, L (2015) Push forward supply side reform and foster new dynamics for development of logistics industry. China Federation of Logistics and Purchasing, Published: 2016-05-04 15:25:14 http://www.chinawuliu.com.cn/xsyj/201605/04/311828.shtml.
[35]. Herrmann, C, and Thiede, S. (2009). Process chain simulation to foster energy efficiency in manufacturing. CIRP Journal of Manufacturing Science and Technology, Life Cycle Engineering 1(4): 221–229.
[36]. Jarkas, A. M., & Bitar, C. G. (2011). Factors affecting construction labor productivity in Kuwait. Journal of construction engineering and management, 138(7), 811-820.
[37]. Jovanovic, V. M., & Mann, M., & Katsioloudis, P. J., & Dickerson, D. L. (2014), Enabling Multidisciplinary Perspective in Student Design Project: Fast Fashion and Sustainable Manufacturing Systems Paper presented at 2014 ASEE Annual Conference & Exposition, Indianapolis, Indiana. https://peer.asee.org/20370
[38]. Kannan, B (2011) Reliability/availability of manufacturing cells and transfer lines. Auburn University.
[39]. Neumann CSR, Fogliatto FS (2013) Systematic approach to evaluating and improving the flexibility of layout in dynamic environments. Manag Prod 20(2):235–254
[40]. Kothari, C. R. (2004). Research methodology: Methods and techniques. New Age International.
[41]. Krüger, J, and Nguyen, T. (2015). Automated vision-based live ergonomics analysis in assembly operations. CIRP Annals Manufacturing Technology, 64(1): 9–12.
[42]. Kvale, D. (1996). Interviews, Sage Journal, London.
[43]. Lee, H. Kao and S. Yang (2014) Service Innovation and Smart Analytics for Industry 4.0 and Big Data Environment, Procedia CIRP, vol. 16, pp. 3-8.
[44]. Loannidis, J. P. A. (2005). Why Most Published Research Findings Are False. PLOS Medicine, 2(8), e124.
[45]. Mao Y. (2019) Enterprise Case Analysis. In: Transformation and Upgrading of Chinese Enterprises. Springer, Singapore.
[46]. Mehdi, H. A. S. (2015). Performance Improvement of the Implementation of Concrete Structures in the Construction Sector In Iraq Using The Modern Management Technique “Six Sigma”. Journal of Engineering, 21(1), 13-29.
[47]. Ministry of Labor and Social Development (2019) Working system, 11:58, 11/19/2019 https://mlsd.gov.sa/ar/procedures
[48]. Ministry of Trade and Investment (2017), 00:44, 04/07/2019 https://mci.gov.sa/ar/mediacenter/News/Pages/default.aspx
[49]. Mohammed, D. (2017). The most important methods, samples and tools for scientific research. Al-Hikma Journal for Educational and Psychological Studies: Kunooz Al-Hikma Foundation for Publishing and Distribution, 9, 309 – 325.
[50]. Mukorera, S. Z. (2019). Willingness to formalize: A case study of the informal micro and small-scale enterprises in Zimbabwe. Journal of Developmental Entrepreneurship, 24(01), 1950001.
[51]. Perera, G., & Ratnayake, V. (2019). Mathematical model for dynamic cell formation in fast fashion clothing manufacturing stage. Journal of Industrial Engineering International, 15(1), 1-16.
[52]. Pickles, J., Plank, L., Staritz, C., & Glasmeier, A. (2015). Trade policy and regionalisms in global clothing production networks. Cambridge Journal of Regions, Economy and Society, Volume 8, Issue 3, November 2015, Pages 381–402
[53]. Ramady, M. A., & Mansour, M. (2006). The impact of Saudi Arabia's WTO accession on selected economic sectors and domestic economic reforms. World Review of Entrepreneurship, Management and Sustainable Development, 2(3), 189-199.
[54]. Roberts, Zachary, Rogers, Altovise, Thomas, Candice, Spitzmueller, Christiane (2018) Effects of proactive personality and conscientiousness on training motivation, USA, International Journal of Training and Development.
[55]. Rosli Ibrahim, Ali Boerhannoeddin, Kazeem Kayode Bakare, (2017) "The effect of soft skills and training methodology on employee performance", European Journal of Training and Development, Vol. 41 Issue: 4, pp.388-406.
[56]. Rubin, H. J., & Rubin, I. S. (2011). Qualitative Interviewing: The Art of Hearing Data. Sage Journal, London.
[57]. Saunders, M. N. K., Thornhill, A. & Lewis, P. (1997). Research methods for business students. Pitman, London.
[58]. Shafigh F, Defersha FM, Moussa SE (2017) A linear programming embedded simulated annealing in the design of distributed layout with production planning and systems reconfiguration. Int J Adv Manuf Technol. 88(1–4):1119–1140
[59]. Uhlmann, E., Fürstmann, P., Roeder, M., Richarz, S., & Sammler, F. (2012). Tool wear behaviour of internally cooled tools at different cooling liquid temperatures. In Proceedings of the 10th global conference on sustainable manufacturing (pp. 21-27).
[60]. Walsh, D., & Bull, R. (2011). Examining Rapport in Investigative Interviews with Suspects: Does its Building and Maintenance Work? Journal of Police and Criminal Psychology, 27(1), 73–84.
[61]. Wang, L., Lee, S. J., Chen, P., Jiang, X. M., & Liu, B. L. (2016). Contemporary Logistics in China. Springer, Beijing.
[62]. Ward, Peter T., Alexander R, Ingmar V,. Fügenschuh, A and Jan, C. (2015). How existing technologies can contribute to reduce global emissions. Springer Nature.
[63]. Wiktorsson, M., Do Noh, S., Bellgran, M., & Hanson, L. (2018). Smart Factories: South Korean and Swedish examples on manufacturing settings. Procedia Manufacturing, 25, 471-478.
[64]. Williams, C. C., & Krasniqi, B. (2018). Explaining informal sector entrepreneurship in Kosovo: An institutionalist perspective. Journal of Developmental Entrepreneurship, 23(02), 1850011.
[65]. Yokoyama, I., & Obara, T. (2017). Optimal combination of wage cuts and layoffs-the unexpected side effect of a performance-based payment system. IZA Journal of Labor Policy, 6.
[66]. Yusuf, N., & Albanawi, N. I. (2016). The role of entrepreneurship in economic development in Saudi Arabia. Business and Economics Journal, University of Embu.
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Published
2020-10-07
How to Cite
aldaady, sarah, & Basafar, A. . (2020). Impact of Operating Cost Reduction on The Economic Challenges Facing Small-Size Clothing Factories in Saudi Arabia. Advances in Social Sciences Research Journal, 7(9), 706–730. https://doi.org/10.14738/assrj.79.9138
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