3.

0) PART A: PHYSICAL SUPPLY CHANNEL

3.1 Determining Supply Requirements (Company Requirements):
Maize seed is the main product of the EON Group along with several types of rice seeds.
The list of products under the EON Group seed category is listed below:

EM Elite

EM Fortune

EM Econo

Bree Dhan 28

Bree Dhan 29

Bree Dhan 41

Bree Dhan 49

BR 11

Beena 7

Maize Seeds

Rice Seeds

The most popular and in demand brand of the company is the maize seeds because these
have the most amount of seasonal demand than the other seed products of the company.
They have three types of maize seeds that are EM Elite, EM Fortune and EM Econo.
These have the seasons starting from mid September to mid December, November to
March and September to May respectively. These seed products, even though have
different respective seasons, their value chain activities have similarities between
themselves. The seasonal demands of the maize seeds are forecasted to be 100MT per
month and the company maintains a buffer stock of around 20MT for the safety purposes.
For their raw materials (parent seeds) they depend on their own selective farmers and
their own R&D team which helps them ensure the adequate supply of the [arent seeds
during the seasonal demands for the cultivation of the maize.

3.1.1Tools used:
EON Group uses Supply-to-Stock strategy to meet the demand of their customers. To get
transportation cost advantages, they prefer to run a supply to stock strategy so that all the
finished products are delivered in respect to the locations of the customers. They need
raw materials for their production. Delaying to get the raw material can be the big crisis
for the company. So they always try to maintain stock of their raw materials up to the
time the raw materials are expired. For achieving the efficiencies in the market they use
supply to stock for their products and raw materials.

3.2 Placing Orders (By the Company):

EON Group Bangladesh ensures the supply of its seed products in two ways- they import
a part of their seeds from several suppliers established in countries like Netherlands,
Finland, Malaysia, Belgium, USA, Singapore, etc. and they also supply the seeds from
the selective local farmers in return for a price paid for their tremendous efforts. The
company places the orders to these selected suppliers and topping their list of suppliers is
the US based company named Monsanto, which has their South Asian dealer point in
India and EON Group is the sole dealer of Monsanto in the Asian region. There is no
involvement of any middle man in the ordering process. EON deals with the suppliers by
the use of their own management. Basically they place their orders for the seeds by their
own employees or selected person.
First of all they decide what amount is demanded for the coming season from
their sales forecasts.
Then the decision is made regarding how much to import and how much to supply
from the local suppliers in order to meet the forecasted seasonal demand.
Then the sales officer places order to the regional distribution offices and then
from these regional points the orders are sent to the central distribution point for
the approval.
After that they also provide parent seeds to their selective local farmers for the
final production of the seeds.

 In the case of the imported seeds, they operate a L/C account in the bank and keep
a LC margin of 10%.
Then they send a copy of the L/C to the supplier along with a request for shipping
documents including material certificate.
After getting the copy of shipping documents, a copy of relevant documents is
sent to the factory warehouse.

3.3 Inbound Logistics Activities & Parties:

Inbound logistics activities consist of aspects such as transportation, inventory
management, order processing & acquisition, protective packaging, materials handling
and information maintenance. EON Group performs these activities efficiently and
effectively with the help of several parties and departments. The inbound logistics chain
of activities starts with the seed supplies from the local farmers (when locally supplied)
and the ports and plants where the imported seeds are packed and processed for the final
distribution.

3.3.1 Transportation:
Since a large portion of the seeds are imported from abroad so EON Group brings
it to their plant by sea and by road.
The local farmers supplies are being transported with the use of the companys
own fleet of transport vehicles like vans, Lorries and trucks.
For the most parts of their products EON is using maritime transportation.
Depending on the cargo to be shipped, maritime transportation can be carried out
on many different choices of vessels, e.g. general cargo, container vessel.
Whenever the shipments of the imported seeds reach Bangladesh by water
container vessels, then those are shifted to the regional warehouses of EON
whereby the large tons of containers are repacked into smaller 1kg, 5kg packets
for the final distribution process. In order to do so EON uses road transportation.
Road transportation offers an advantage to allow point to point service. Road
carriers offer faster and reliable services and can operate on an individually
scheduled timetable depending on the demand and needs of the company. And in
the case of EON, this service is even more convenient and flexible because they
have their own fleets of road vehicles and the schedules of distribution and
transportation can be made quite conveniently and reliably.

3.3.2 Inventory & raw materials management:

Parent seed is raw material of the Maize Seeds. When Parent seeds turn into the ultimate
maize Seeds (i.e. the finished goods) then EON Group preserves it at their regional
distribution points for the transportation convenience and the seeds are maintained here
till the market season. Hereby the storage unit has to follow some rules as follows:
The Warehouses temperature must be 16 o to 25o and humidity must be 40% to
45%
Seed must be cleaned and graded from time to time to ensure its sustainability and
longevity.
Then there must be a check of the level of germination in the seeds. According to
the government standard, this level must be 80%.
In the starting of September, just before the season of the EM Elite seeds, EON
sends a sample of the to-be distributed seeds to their quality control unit for
testing its quality and condition.
When the QC unit gives the desired result then at the final stage EON goes for
packing their products.
Basically they do 1 kg, 2kg and 5kg packets for convenient distribution and
handling purposes and then after that they send their products to the regional
warehouses (mostly rented) according to the market demand.

3.4 Terms & Conditions (Documentation):

As the seeds supply falls under an international import of goods, EON Group has the
need to provide some necessary documents. These are:
Product registration
VAT certificate
Trade license
Import license
TIN certificate

3.5 Vendor Selection &Appraisal

Vendors are one of the most important parties of the supply chain activities so the
selection of them is a very critical task to be carried out by the company. The choice of
vendors will enable the supply and distribution of the seeds to be more reliable and
efficient.
Vendor selection criteria:

Professional, experienced product support

Valid trade license

Bank solvency

Sufficient credit limit

Responsiveness to emergencies

Ability to provide quality product in a timely and consistent manner

Invoice discrepancies Minimal number of discrepancies

Committed pricing

Competitive pricing

Order Accuracy Rate

Delivery lead times