Académique Documents
Professionnel Documents
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(RBL)
1. INTRODUCTION
A supply chain is a network of facilities and distribution options that performs the functions
of procurement of materials, transformation of these materials into intermediate and finished
products, and the distribution of these finished products to customers. Supply chains exist in
both service and manufacturing organizations, although the complexity of the chain may vary
greatly from industry to industry and firm to firm. Supply chain management, then, is the
active management of supply chain activities to maximize customer value and achieve a
sustainable competitive advantage. It represents a conscious effort by the supply chain firms
to develop and run supply chains in the most effective & efficient ways possible. Supply
chain activities cover everything from product development, sourcing, production, and
logistics, as well as the information systems needed to coordinate these activities.
The organizations that make up the supply chain are linked together through physical flows
and information flows. Physical flows involve the transformation, movement, and storage of
goods and materials. They are the most visible piece of the supply chain. But just as
important are information flows. Information flows allow the various supply chain partners to
coordinate their long-term plans, and to control the day-to-day flow of goods and material up
and down the supply chain.
Supply chain management is typically viewed to lie between fully vertically integrated firms,
where the entire material flow is owned by a single firm, and those where each channel
member operates independently. Therefore coordination between the various players in the
chain is key in its effective management. Cooper and Ellram compare supply chain
management to a well-balanced and well-practiced relay team. Such a team is more
competitive when each player knows how to be positioned for the hand-off. The relationships
are the strongest between players who directly pass the baton, but the entire team needs to
make a coordinated effort to win the race.
1.1 Supply Chain
All stages involved, directly or indirectly, in fulfilling a customer request are called supply
chain. It includes manufacturers, suppliers, transporters, warehouses, retailers, and customers.
Within each company, the supply chain includes all functions involved in fulfilling a
customer request (product development, marketing, operations, distribution, finance,
customer service). Customer is an integral part of the supply chain. It includes movement of
products from suppliers to manufacturers to distributors, but also includes movement of
information, funds, and products in both directions. It is more accurate to use the term
supply network or supply web.
Suppliers
Manufacturers
Dealers
Customers
Customers
Retailers
Distributors
Manufacturers
Suppliers
All stages may not be present in all supply chains. So, Supply chain management is the
management of flows between and among supply chain stages to maximize total supply chain
profitability.
1.4 The Goal of a Supply Chain
1. Maximize overall value created:
Supply chain value is the difference between what the final product is worth to the customer
and the effort the supply chain expends in filling the customers request. Value is correlated to
supply chain profitability (difference between revenue generated from the customer and the
overall cost across the supply chain).
2. Maximize total supply chain profitability:
Supply chain incurs costs (information, storage, transportation, components, assembly, etc.).
Supply chain profitability is total profit to be shared across all stages of the supply chain.
Supply chain success should be measured by total supply chain profitability, not profits at an
individual stage. Sources of supply chain revenue: the customer Sources of supply chain cost:
flows of information, products, or funds between stages of the supply chain
Rahimafrooz
Rahimafrooz is one of the respected and reputed business houses in Bangladesh. It has just
crossed 50 years of operation. Rahimafrooz has endured turbulences of the last 50 years and
has been able to transform itself from a small trading company into a leading diversified
business house. This is, indeed, a milestone, which Rahimafrooz has achieved with trust,
support and dedication of all stakeholders, past and present, most importantly, its
customers. Rahimafrooz began its operation as a trading company in 1954. Today
Rahimafrooz has diversified in many areas from storage power solution to automotive
aftermarket to retailing.
Rahimafrooz operates in three broad domains: automotive after market, power and energy,
and retail chain. It sells tyres, batteries, lubricants, emergency power products, diesel as well
as gas generators, lighting products, electrical accessories, solar systems, energy solutions
using compressed natural gas, and power rectifiers. The Group also runs 'Agora' the first
retail chain in Bangladesh. The Groups portfolio includes international tyre brands Dunlop
and Kenda, and its own brand RZ Tyre. Rahimafrooz is the exclusive franchisee of the full
range of worlds leading lubricant brand Castrol in Bangladesh.
Through Rahimafrooz IPS, UPS and Voltage Stabiliser, the Company enjoys clear leadership
of the emergency power products market. The Company brings to Bangladesh leading gas
and diesel generator brands Pramac as well as Mitsubishi. It also markets home and
industrial lighting products from General Electric USA (GE) and electrical accessories from
Hager France. Rahimafroozs Renewable Energy division has been providing Solar solutions
in collaboration with British Petroleum (BP).
The Company, in recognition of its solar efforts, received the McGraw-Hill Platt Global
Energy Award in 2004 and the Global Ashden Award in 2006. Rahimafrooz also offers
comprehensive solution provider for CNG refuelling, conversion, conversion centres, and
maintenance. Rahimafrooz is also endeavouring into tyre retread, besides manufacturing and
marketing emery cloths and abrasive papers. In a joint venture, the Group has enterprised into
the first ever fibre optical commercial networking backbone in Bangladesh in the form of
Metronet Bangladesh Ltd. (MBL).
Rahimafrooz, in 2001, made a breakthrough in the urban lifestyles by launching the first
retail chain in the country Agora. One of the SBUs of Rahiamfrooz Group, Rahimafrooz
Renewable Energy Ltd. distributes solar home systems to underdeveloped rural regions of
Bangladesh. For that, the company received the Ashden Award for Sustainable
Energy in 2006. The Group has strengthened its market leadership at home while reaching
out to international markets. Ranging from automotive after market products, energy and
power solutions, to a world class retail chain the committed team at Rahimafrooz is
determined to ensure best in class quality standards and living the Groups four core values
Integrity,
Excellence,
Customer Delight and
Innovation.
VISION
Be an enterprising Group of Taka 2,000 crore by the year 2010 with a diversified business
portfolio focused on dynamic growth, excellence, innovation, customer delight in enriching
our world.
QUALITY POLICY
Rahimafrooz as a team are totally committed to customer delight through intelligent effort
and continuous improvement.
ASPIRATION
To be the most admired and trusted organization through excelling in everything
Rahimafrooz do, following ethical business practices and adding value to stakeholders.
VALUES
Integrity in all their dealings
Excellence in everything they do
Total commitment to customer satisfaction
Thinking ahead and taking new initiatives
TEAM
Rahimafrooz foster en environment of learning and reward, taking pride in who they are and
what they do.
OUR COMMUNITY
Rahimafrooz strongly believes that doing good business means being good corporate citizen.
The company always takes pride in serving the stakeholders and community in multifaceted
ways.
Global Compact Rahimafrooz is a signatory of the Global Compact, a UN initiative that sets
standard on Human Rights, Labor Relations, Environmental and Ethics.
Environment
Environment Management System (EMS): They have taken comprehensive measures to
protect environment, complying not only to local requirements but also with ISO 14001.
Safe Disposal and Recycling of Used Batteries: Rahimafrooz has undertaken a nation-wide
campaign to promote safe battery disposal and recycling of used battery.
Community Services Rahimafrooz regularly contribute personal, monetary and medical help
to people disadvantaged by natural calamities and serious illness. Rahimafrooz also makes
significant contribution to leading diabetic and cancer hospitals.
2.1 SBUs and Affiliations:
SBUs
Rahimafrooz Batteries Limited
Rahimafrooz Distribution Limited
Rahimafrooz Superstores Limited
Rahimafrooz CNG Limited
Rahimafrooz Energy Services Limited
Excel Retread Limited
01. Rahimafrooz
Limited
02. Rahimafrooz
Limited
03. Rahimafrooz
Limited
05. Rahimafrooz Energy Services Provides uninterrupted and clean power and a fast
Limited
growing power services company; establishes with
objective to meet country's growing demand for power
06. Excel Retread Limited
Brands
Lucas
Optus
Rahimafrooz
Spark
Volta
Battery
Contribution
Battery Production
Sales of Battery
2.2.4 Network
Rahimafrooz markets three major brands of automotive batteries: LUCAS, VOLTA and
SPARK. All the batteries are produced under strict quality controlled plant of the
Rahimafrooz Batteries Ltd. It has introduced new brand SPARK for the taxi cab. This
specially designed to take the load and frequency of the taxi cab.
Lucas Automotive Dry Charge Battery:
12 Volt Battery
German Drive Range
Heavy Duty Range
6 Volt Batteries
Lucas PCM
Special Features:
Excellent cycling ability provides high reliability and exceptionally long life
Large electrolyte reservoir means high tolerance to water loss and minimal maintenance.
High charging efficiency
Low self discharge, dry pre-charged plates
Robust, clear case and rugged construction ensures mechanical durability
The quality, dependability, reliability and long service life of thicker Flat Plate deep cycle
batteries are the result of balanced design of the plates, separators and incorporation of latest
technical developments in lead acid battery technology.
2. Supply Chain Management of RBL
Rahimafrooz Distribution Limited (RDL) involves in the marketing and distribution of a wide
range of products through its nation-wide distribution network. It deals mainly with tyres,
automotive batteries, Instant Power system (IPS), UPS and lubricants. Its batteries are
produced in Rahimafrooz Batteries Limited (RBL), which is ISO 9002 and 14001 certified.
Commitment to quality and customer satisfaction has been a motivating force behind the
success of RDL. RDL markets three major brands of automotive batteries: LUCAS, VOLTA,
VOLTA MF (Maintenance Free) and SPARK. All batteries are produced by RBL.
3.1 Objective
Supply Right products in Right place in Right time. The main objective of RBL supply chain
is to minimize total supply chain cost to meet fixed and given demand, where the total cost is
composed of raw material and other acquisition costs, inbound transportation costs, facility
investment costs, direct and indirect manufacturing costs, direct and indirect distribution
center costs, inventory holding costs, inter-facility transportation costs, and outbound
transportation costs.
3.2 Supply Chain of RBL
A complete and integrated Sales and Distribution network is inevitable to make the products,
services and related information available to the customers. RBL has own strong distribution
network RDL which is highly disciplined and organized Sales and Distribution department to
maintain smooth supply of their products, services and related information to fulfill the
requirement of valued customers. The company virtually covers every single corner of the
rural as well as urban area of Bangladesh. The company has a very large and competent
having 451 dealers and 8 distributors to ensure product availability throughout the country.
Lead
Acid
Supp
lier
Plat
e
Supp
lier
Pack
agin
g
Supp
Acce
lier
ssor
y
Supp
lier
Store
Nakalpara Factory
Information Flow
Finished Goods
Central Warehouse
Product Flow
Customers
Dealers
Distributors
Regional Storehouse
Customer Order
Customer
Replenishment cycle
(Dealer-distributor)
Replenishment
Dealers
Manufacturing cycle
(Distributor-RBL)
Manufacturing
Procurement cycle
(Manufacturer-supplier)
RBL
Procurement
Cycle
Supplier
RBL: An Efficient Supply Chain
Markets
Product
3.3 Supply
Buyer stage
Places
Chainorder
Decisions
RBL Stage
in
Receives
order
RBL
Buyer stage
Deliver
order
RBL Stage
Receives
goods
Buyer stage
Returns if
any flaws
We classify the decisions for supply chain management of RBL into two broad categories -strategic and operational. As the term implies, strategic decisions are made typically over a
longer time horizon. These are closely linked to the corporate strategy the corporate strategy),
and guide supply chain policies from a design perspective. On the other hand, operational
decisions are short term, and focus on activities over a day-to-day basis. The effort in these
types of decisions is to effectively and efficiently manage the product flow in the
"strategically" planned supply chain. In RBL, there are four major decision areas in supply
chain management:
1) Location,
2) Production,
3) Inventory, and
4) Transportation (distribution),
3.3.1 Location Decisions
The geographic placement of production facilities, stocking points, and sourcing points is the
natural first step in creating a supply chain. In RBL, the location of facilities involves a
commitment of resources to a long-term plan. The management established production
facilities in Dhaka with large size production units by which the product flows through to the
final customer. These decisions are of great significance to RBL since they represent the basic
strategy for accessing customer markets, and will have a considerable impact on revenue,
cost, and level of service. RBL determines the decisions an optimization routine that
considers production costs, taxes, duties and duty drawback, tariffs, local content, distribution
costs, production limitations, etc. Although location decisions are primarily strategic, they
also have implications on an operational level.
3.2.2 Production Decisions
The strategic decisions include what products to produce, and which plants to produce them
in, allocation of suppliers to plants, plants to DC's, and DC's to customer markets. As before,
these decisions have a big impact on the revenues, costs and customer service levels of the
firm. These decisions assume the existence of the facilities, but determine the exact path(s)
through which a product flows to and from these facilities. Another critical issue is the
capacity of the manufacturing facilities--and this largely depends the degree of vertical
integration within the firm. Operational decisions focus on detailed production scheduling.
These decisions include the construction of the master production schedules, scheduling
production on machines, and equipment maintenance. Other considerations include workload
balancing, and quality control measures at a production facility.
3.2.3 Inventory Decisions
These refer to means by which inventories are managed. In RBL, inventories exist at every
stage of the supply chain as either raw material, semi-finished or finished goods. They can
also be in-process between locations. Their primary purpose of RBL to buffer against any
uncertainty that might exist in the supply chain. Since holding of inventories can cost
anywhere between 20 to 40 percent of their value, their efficient management is critical in
supply chain operations. The top management of RBL sets goals. However, RBL
management has approached the management of inventory from an operational perspective.
These include deployment strategies (push versus pull), control policies --- the determination
of the optimal levels of order quantities and reorder points, and setting safety stock levels, at
each stocking location. These levels are critical, since they are primary determinants of
customer service levels.
FG: Monthly Order Size Units for Central Warehouse for the Year 2007
FG: Monthly Order Size Units for Distributor Warehouse for the Year 2007
FG: Monthly Order Size Units for dealers for the Year 2007
3.2.4 Transportation Decisions
The mode choice aspects of these decisions are the more strategic ones. These are closely
linked to the inventory decisions, since the best choice of mode is often found by trading-off
the cost of using the particular mode of transport with the indirect cost of inventory
associated with that mode. In Bangladesh, RBL uses Truck as transport modes to send the
batteries to final consumers. They have strong transport modes by which RBL is able to
handle the transport costs efficiently and timely. For exporting batteries in foreign countries,
RBL is shipping by sea, but they necessitate holding relatively large amounts of inventory to
buffer against the inherent uncertainty associated with them. Therefore customer service
levels and geographic location play vital roles in such decisions. Since transportation is more
than 30 percent of the logistics costs, operating efficiently makes good economic sense.
Shipment sizes Lot-for-Lot), routing and scheduling of equipment are key in effective
management of the RBL's transport strategy.
3.4 Supply Chain Model & Achieving Strategic Fit
RBLs supply chain model works on basically aligning the competitive & supply chain
strategies. The Competitive Strategies of RBL are as follows:
Ensuring Lower Cost at all levels
Differentiated products and service with cost efficiency
Based on this RBL has designing their supply chain strategy as follows for achieving
strategic fit:
High quality products
Fast Delivery with cost efficiency
Ensuring High Quality & Safety
RBLs Supply Chain Strategies for
achieving strategic Fit
COMPETITIVE STRATEGIES
Ensuring Lower Cost
at all levels
Differentiated
Service with cost
efficiency
S
T
R
A
T
E
G
I
C
F
I
T
Negotiate Optimal
Construction Cost
Fast Delivery with
cost efficiency
High Quality
& Safety
Design
Sourcing Plan
Negotiate Land in
Strategic Location
with RBL
Efficient
Efficient
Responsive
Supplier
Relationship
Management
(SRM
Customer
Relationship
Management
(CRM)
Customer Service
4. Supplier Relationship Management (SRM)
Those processes focused on the interaction between the enterprise and suppliers that are
upstream in the supply chain. Key processes of SRM are:
Source
Negotiate
Buy
Supply
Collaboration
3.7 The Value Chain:
Linking Supply Chain and Corporate Strategy of RBL
Components of value chain of RBL are
Competitive strategy:
RBL seeks to satisfy customers offering high quality and innovative products with reasonable
price.
Product development strategy:
Product development strategy specifies the portfolio of innovative batteries that the RBL will
try to develop
Marketing and sales strategy: Marketing and sales strategy specifies how the market will
be segmented and product positioned, priced, and promoted. For example, Lucas and Spark
battery for local market and Volta is for international market.
Supply chain strategy:
Supply chain strategy of RBL determines the material procurement, transportation of
materials, transportation of goods, and manufacture of batteries or customer maintenance
service, distribution of product.
New
Product
Development
Marketing
and
Operations
Sales
Distribution
Service
RBL is some what responsive in fulfilling customers demands and some what efficient to
deliver quality products timely with a affordable price. RBL is implied by ability to
respond to wide ranges of quantities demanded
meet short lead times
handle a large variety of products
build highly innovative products
meet a very high maintenance service level
Highly
efficient
Somewhat
efficient
Somewhat
responsive
RBL
Highly
responsive
Orders submission
to distributors
Orders Processing
by ESS
Creating
challan
Preparing
Delivery Package
Delivery by
dealers
Money collection
by dealers
Submission to the
distributors or
regional office
Adjustment by
ERP (If any)
Response time
Product variety
Product availability
Customer experience
Order visibility
Returnability
Inventories
Transportation
Facilities and handling
Information
RBL
Dealers
Product Flow
Information Flow
Distributor/Dealer
Product Flow
Information Flow
RBL
Distributor/Dealer
Product Flow
Information Flow
Region 1
Distributor
Distributor
Region 2
Distributor
Distributor
Demand flow
Forecast flow
Region 3
Distributor
Distributor
Economies of Scale
Supply / Demand
Variability
Seasonal
Variability
Cycle Inventory
Safety Inventory
Seasonal Inventory
Aggregating across products, retailers, or suppliers in a single order allows for a reduction in
lot size for individual products because fixed ordering and transportation costs are now
spread across multiple products, retailers, or suppliers. Benefits getting by RBL through
aggregate planning are - same overall fixed cost, shared over more than one product, effective
fixed cost is reduced for each product, lot size for each product can be reduced All dealers
and distributors of RBL keeps 5% safety inventory for responding customer demand.
CONCLUSION
The supply chain of Rahimafrooz Batteries Limited (RBL) is made up of all the activities
required to deliver products to the customer, from designing product to receiving orders,
procuring materials, marketing, manufacturing, logistics, customer service, receiving
payment and so on. Anyone, anything, anywhere that influences a products time-to-market,
price, quality, information exchange or delivery, among other activities, is part of the supply
chain.
Effectively integrating the information and material flows within the demand and supply
process is what supply chain management is all about. In most companies, however, two
major and very interdependent issues must be simultaneously addressed. The first deals with
delivering products with customer-acceptable quality, with very short lead times, at a
customer-acceptable costwhile keeping inventories throughout the supply chain at a
minimum. The second issue, which tends to be less understood and accepted, is the need for
high-quality, relevant and timely information that is provided when it needs to be known. For
many customers and manufacturers, business processes and support systems will not measure
up to the task of quickly providing planning and execution information from the marketplace
to production and on to vendors so that the customers objectives are consistently met. The
fact is most information supplied is excessive, often late and frequently inaccurate.
As a final point, it is articulated that, Rahimafrooz Batteries Limited (RBL) is following
different strategies, taking different decisions, planning and operation, selecting right
distribution network to make their supply chain efficient and respond to customer demands
timely by delivering quality products and service to customers. To evaluate their supply chain
performance, they follow a checklist and are assessed by top management of RBL.