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Supply chain drivers & distribution system


Submitted to: Mohammad Moniruzzaman
Submitted by
Name Md. Russel Shahadat Hossain M.A. Safique Uddin Talukdar Id no 10 27 2-259

[Year]

DATE OF SUBMISSIN:

3/16/2013

Contents
Abstract ......................................................................................................................................................... 3 Methodology ................................................................................................................................................. 4 Benefits ......................................................................................................................................................... 4 Process view of the company ........................................................................................................................ 5 Supply chain drivers ..................................................................................................................................... 5 Facilities: ................................................................................................................................................... 5 Inventory: .................................................................................................................................................. 7 Transportation: .......................................................................................................................................... 7 Information: .............................................................................................................................................. 8 Pricing: ...................................................................................................................................................... 8 Designing distribution network ..................................................................................................................... 8 Forecasting .................................................................................................................................................. 10 Suggestion and recommendation related to supply chain ........................................................................... 11

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Abstract

This report encompasses the functions involving the supply chain processes of Pran mango juice and how their functions and activities worked to maximize their overall value. This report also focuses on the key factors involving supply chain strategy and profitability of Pran mango juice company. Here we tried to understand the essentiality of effective supply chain driver to bring organizational success. We also tried to give outline about the facts involving supply chain. PRAN juice is one of the most popular brands in Bangladesh. In all seasons juice is widely consumed by the customers. But the demand becomes high in the summer. There is a wide demand and high prospects for the juice packs. PRAN juice pack is one of the items to meet this demand. It is manufactured and marketed by Agriculture Marketing Company Ltd. (AMCL) of PRAN group. PRAN juice pack is selling mainly local market (all over Bangladesh) and already it is exporting in Europe, America and Middle East also in India. There is much higher demand for locally produced juice pack in the country than present domestic supply. We see that there is a shortage of PRAN product in our local market. So Bangladesh imports some juice from Pakistan, India and other countries. In this situation AMCL has to face few problems as well as meeting other competing juice company. AMCL has few problem areas such as distribution system, Government policy, and import system and wholesale/retailers sector. In the true sense, marketing management concept is not being implemented in the existing juice marketing system. There is no combination among product, price place and promotion. In spite of few problems, there is increasing demand for PRAN juice pack all over the country. So we can say that PRAN juice pack has a bright prospect in the country. Undeniably juice pack of AMCL would be considered as the most potential juice to give our infrastructure greater longevity. So company should take proper action for the fulfillment of the target of juice pack products of AMCL.

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Methodology
To do all this things we need much information . Therefore we have collected this information form both primary & secondary sources. Primary sources: o Data collect by face to face communication Secondary sources: o Books, some research report . o Lecture sheet

Benefits
As a student we have learned the procedure of supply chain mangement.

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Pran Juice Improving Livelihood PRAN-RFL Center, 105 Progoti Sarani Middle Badda Dhaka 1212, Bangladesh

Process view of the company


PRAN Juice Company uses cycle view of supply chain process. For production it anticipates future demand. First it collects raw materials from the suppliers at a certain amount. After production it distributes PRAN Juice to retailer through distributor. Last customers collect PRAN Juice from retailers.

Customer OrderCycle

Customer

Retailer

Manufacturing and Replishment


Manufacturer

Procurement
Supply chain drivers
Facilities:
1. Own production process: PRAN JUICE Company has own production plant in Bangladesh. They established their own production plant with the capacity of 250 BPM, in addition to newly installed higher

Supplier

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capacity of 500 BPM. So they dont need to depend on others. 1.1. Juice extraction: Firstly the oil is removed. This process is carried out without causing damage to the fruit. It is done to avoid undesirable flavors and obtain the highest possible level of aldehydes. Secondly the juice is extracted. The technology used involves cutting and squeezing the orange and is different to many of the In-line systems used. The HRS process does not damage the peel and therefore avoids contamination of the juice. Thirdly the juice is separated from the husk and the seeds.The resultant juice has a minimum content of the bitter constituents, an agreeable color minimum natural oil content and an increased number of intact juice cells. The Limonina content is also reduced. The average cell size in the pulp is increased with a higher percentage of floating pulp. We must also highlight the fact that the process does not use water during the extraction processes, the energy consumption has been optimized and the contaminants contained in residual water have been minimized. 1.2. CIP CLEANING SYSTEM:The CIP (Clean in Place) cleaning system used by HRS Spiratube is centralized with automatic control of the parameters. An outstanding feature of this design is that it has automated practically all of the cleaning operations required in the plant. 1.3. THE JUICE MIXING ROOM:The principal components are automatic systems for mixing the product, controls for the components and the CIP cleaning operations. Mixing takes place in tanks fitted with agitators in which we can programs the proportions of the various

constituents. The mass transfer of the constituents is carried out using centrifugal.
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1.4. SHIPPING:The shipping area contains the chillers used for loading and unloading the tanks. These chillers use MX and AS type heat exchangers that generate the best heat transfer coefficients. The products must be chilled down to between 0C and +2C. 2. Research & Development: They have well-established research & development department where they research over their existing product concentration & try to develop it. They also do researching on different taste of their products. They have highly qualified employees for their research & development dept.

Inventory:
Inventory means items reserve to meet the future demand. In this section we discuss how manager use inventory to drive supply chain performance: PRAN Agro Ltd has set a target to buy 40,000 metric tons of mangos this season to produce mango juice. Last year the target was to buy mango was 30,000 Metric ton. There are three pulping plants at PRAN factory in Natore where 5,000 local people are working. After processing, the procured mangoes are preserved at cold storage as 'mango pulp'. Later, mango juice and other mango products are produced from the 'mango pulp' at the aseptic, caning and bottling plant at Pran factory in Ghorashal.

Transportation:
Company is collecting their raw materials through supplier. Company carries the raw materials to store house by their own vehicles. And the company sends their products to retailer by their own van. This reects the absence of an adequate logistics chain in Bangladesh. The company also employs a small number of contractors at the plants to handle maintenance and civil works.

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Information:
To collect raw materials at low price form suppliers information plays important role. It helps the company to maintain the low cost policy. The company also collects information about customers demand through retailers.

Pricing:
PRAN juice company selling its juices at price added cost and profit margin and also keep in mind the key competitors price. PRAN juice provides its customers quality fresh juices that provide customer good health and enjoyment. PRAN juice is a big price objective that they provided high quality and taken premium price to its customer. PRICE STRUCTURE Retailers Product name Mango Juice(500ml) Mango Juice(900ml) Orange Juice(500ml) Orange Juice(900ml) 48 25 45 25 Selling Price

Designing distribution network


For designing distribution networks two things are important-

o Customer needs o Cost of meeting customer needs


Some typical customer needs are Page | 8

1. Response Time: defines the amount of time it takes for a customer to receive previously occurred and order. 2. Product Variety: It basically indicates the number of different products that are offered by the distribution network. 3. Customer Experience: It includes how easily the customers deliver and receive the order. 4. Time to Market: It refers how much time it takes to introduce a new product to the market. 5. Order Visibility: It refers the ability of customers to visible their order from placement to delivery. 6. Returnability: It indicate is the ease with which a customer can return unsatisfactory products and how the overall network can handle such returns.

Some typical cost of meeting customer needs are 1. Inventories 2. Transportation 3. Facilities and handling 4. Information Pran primarily use existing distributors for distributing their product.Then make some new channels and assign some distributors to promote their product to all over the country. So pran deal with this chain: Manufacturer > Wholesaler> Retailer> Customer Company uses mobile shop in the shopping malls, offices and crowded areas so that people can purchase the product easily when they like to consume.
So, we can conclude that pran uses Retail storage with Customer pickup as distribution network.

Channel characteristics of PRAN juice pack: The juice industry of Bangladesh generally maintain a four-tier distribution channel. The PRAN Company does not more retail sale directly from the production center, PRAN juice pack move form factory to dealer's agents, agents to wholesalers, wholesalers to retailers and finally retailers to consumers. The industrial buyers mainly sell juice pack to the wholesalers. They also sell juice pack to retailers besides the wholesalers. 'The wholesalers mainly sell juice product to the customers besides the retailers. They also sell juice pack to the customers beside the retailers. The customer mainly collects juice pack from retailers. Wholesalers of the company are trained and contractual. The company divides sales territories among the wholesales. It provides commission and other financial

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facilities to the wholesalers to motivate them. The company does exclusive distribution. It has power of controlling wholesalers.

Forecasting
In Pran, the base for forecasting is previous data about sales, which is provided by sales department. After analyzing the data, the forecast is made. Executive Opinion is also used in forecasting i.e. Opinions, experience & technical knowledge of related managers. So forecasting in Pran is a blend of analysis of data & executive opinion. Patterns of demand Demand for products of Pran follows Seasonal Pattern i.e. repeatable pattern of increases or decreases in demand, depending on the time of season. Factors affecting demand There are two types of factor affecting the demand of the product which are internal and external factors they are given below : External factors Now-a-days, the biggest factor affecting demand of products of Pran is the competitors action, Govt.s rule & regulations about taxes & prices also influence the demand by affecting the price of products. Internal factors

Some internal factors influencing the demand are given below: 1. Price of product 2. Proper advertisement 3. Good distribution channels Unit of forecasting In Pran forecast is made in term of cases where one crate = 24 bottles Type of forecasting technique In Pran forecasting is made for short-term period i.e. for a quarter or 3-monts Aggregate planning

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Aggregate plan is a statement of production rates, work-force levels and inventory holdings on estimates of customer requirements & capacity limitations. Since Pran is a manufacturing co., so its aggregate plan is also called production plan. Unit of aggregation Aggregate plan is expressed in terms of cases, which are also called SKU (stock keeping units) The sales forecast is broken down into the three main revenue streams; direct sales, Web sales, consignment sales. The sale forecast for the upcoming year is based on 30% growth rate. Growth rate for year 2006 to 2010 are based on percentage increases as follows: Direct sales 20% growth rate per year Web sales 50% growth rate per year. Consignment sales 20% growth rate year.

Suggestion and recommendation related to supply chain


The firm should develop a clear cut combination between channel members for proper distribution of PRAN juice pack. The distribution pattern needs to be changed. The company have to added few pickup vans for proper timely distribution. A juice pack is a very necessary product for the customer; demand oriented distribution should be introduced. Firstly it is necessary to estimate the number of customer in a certain area. And then to estimate their annual demand. Then it is necessary to appoint a dealer distributor for a certain area.

References
http://bimtech-retail.com/blog/ www.wikipedia.com www.scribd.com

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