PART 1 ORGANIZATION PART

PART 2 PROJECT PART

PART 3 APPENDIX PART

REPORT ON OVERVIEW OF SUPPLY CHAIN MANAGEMENT OF ETCETERA BANGLADESH PRIVATE LIMITED (ETC)

Submitted To: Md. Hamidul Islam Course Teacher Supply Chain Management

Submitted By: Kazi Homaira Nirjhar # 746 Khandaker Asma Akhter # 747 Mahfuza Khatun # 748

Department of Business Administration Jahangirnagar University Savar, Dhaka

Date of Submission: 07 March, 2009

March 07, 2009

Md. Hamidul Islam Course Teacher Department of Business Administration Jahangirnagar University

Subject: Submission of report on overview of supply chain management of Etcetera Bangladesh Private Limited (ETC) Dear Sir, We hereby with due respect would like to state that we have prepared a report on overview of supply chain management of Etcetera Bangladesh Private Limited (ETC).Basically, we have worked for supply chain management of ETC and done a interview, questionnaire survey on the job holder of ETC who are involved of the work of SCM.I hope your concern and wise judgment on this report. In this report, we had tried to relate our theoretical knowledge with our practical experience. We had tried our level best to put meticulous effort for the preparation of this report. Any shortcomings or fault may arise as our unintentional mistakes. We will wholeheartedly welcome any clarification and suggestion about any view and conception disseminated through this report. Thank you.

Sincerely Yours, _____________________ Kazi Homaira Nirjhar # 746 _________________________ Khandaker Asma Akhter # 747 _____________________ Mahfuza Khatun # 748

Department of Business Administration Jahangirnagar University

Organization Part
2.0 Introduction 2.1 History of Ascent group Ascent group comprises of seven concerns which have all been in operation for the last few years. The first of these companies Scholastica owns and operates the largest private English medium school in Bangladesh. It was established in 1977 with the objective of providing English medium schooling in Bangladesh. Scholastica was founded by the Chairperson, Ms. Yasmeen Murshed. Ms. Murshed began her career in education as a teacher in various institutions such as the Karachi Grammar School, The Islamabad Model School for Girls and the Government College for Women, Islamabad from 1967 to 1971. However after returning to Bangladesh after Liberation war she began teaching small groups of students at home. This led to the establishment of Scholastica Tutorial in 1977 which was the earlier name of the well known school, Scholastica. Currently it maintains active operations in private education, organized retailing, information system and information technology, printing and packaging, interior design & construction and transportation. The sister companies were established over a period of time and although the activities of the group are diverse but mainly focus on education and related services. Most of the sister concern started as a backward linkages and meet the demand of the school operation effectively. Now its serves outsides clients rather than in-house needs. Ms. Murshed is also the Chairperson of other associated companies which have been set up by her son Syed Maher Murshed. These are Etcetera Bangladesh (Pvt.) Ltd., Office and Home Solutions (Pvt.) Ltd., Scholastica Transport Services (Pvt.) Ltd., Print craft Company Limited and a training and development institution known as Services for Professional Education and Enterprise Development (SPEED).

2.2 Background of Etcetera Bangladesh Private Limited: Etcetera Bangladesh Private Limited (ETC) was launched in 2001 with the objective to establish a retail organization in Bangladesh. The initial focus of the company was to obtain a competitive advantage in the retailing of books, stationery and office accessories. Etcetera Bangladesh Pvt. Ltd. benefited from a natural advantage as the group already had experience in procuring the above products with regular frequency in order to supply Scholastica Pvt. Ltd. Etcetera was the first such organized retailer in this sector. Since then, the company mission and vision has evolved in order to allow the company to expand its operations in other sectors of retailing in Bangladesh. 2.2.1 Mission of ETC To become the leading multi-brand retail organization in Bangladesh by 2015. In doing so, to continue to uphold the core values of the Group and to become synonymous with quality and customer satisfaction. 2.2.2. Vision of ETC We believe in listening to customers and constantly evolving to offer better service. We believe in providing an international experience to our customers as a leading retailer in Bangladesh. We believe in providing maximum choice to our customers and in being the first to add value and innovate for enhancement of the customers shopping experience. There is in total eleven Outlays in Dhaka city under ETC. Among them seven outlets are for Coffee World and two Pizza Corner, one book Express and one is for various product such as electronics, mobile, home items, impulse, and cosmetics. They have recently opened Fashion Express for young people in Dhaka City. Another Outlet has been just opened is the Discount Outlet. Training Outlet of Coffee World which is recently started at corporate office of Ascent Group is not only started with the aim of providing training to the workers of CW but also to provide the food item to the officer working at corporate office. So with the increasing business they need to maintain a well organized Supply Chain Management structure which will improve their operating efficiency.

ETC has two wings ETC (Retail) ETC (Food and Beverage).

ETC Retail is running with two outlets for a unique lifestyle product-mix. ETC Food and Beverage (F&B) has franchise right of international Global Franchise Architects (GFA) and it is running with seven outlets of Coffee World and Pizza Corner. At present, ETC has outlets in Dhanmondi and Uttara. The first store was only 7500 sq ft and simply sold books. ETC has grown rapidly from 2001, from a small bookshop to now accommodating over 10 products categories along with introducing the first Coffee shop franchise, from Thailand, into Bangladesh. Expanding into the food & beverage industry is a big step for ETC. Later the same year Pizza Corner, another franchise from Thailand, is set to launch. By 2003, ETC opened its 2nd outlet and expanded its range to become the leading life style outlet in Bangladesh. The 20,000 square foot Dhanmondi outlet comes complete with books, perfumes, clothes from local distributors and chains such as Yellow and Artisti, home furnishings and appliances, gift items such as watches from a range of international brands including Tissot, Pierre Cardin and Rado, music and much more. ETC ushered in a new era in shopping and has become the bench mark for the other retailers. 2.2.3 Product Category of Etcetera Etcetera offer products in the following categories-books, stationary, music, DVD, toys gifts, electronics, clothing, PC peripherals & household items. In 2005 Etcetera introduce a food & Beverage division. 2.2.3.1 Retail Wing Books Express Book Express is the book outlet of ETC. It offers a variety of books which suit all short of customer. ETC has established partnerships with internationally renowned publishing house such as:

1. Oxford University Press 2. Penguin - India / UK / USA 3. Harper Collins 4. Random House 5. Harvard Business Press 6. Rupa & Co. 7. Viva Books 8. Egmont Publications 9. Pan Macmillan 10. Mcgraw Hill / Tata Mcgraw Hill Book express has two outlays; Gulshan Banani.

2.2.3.2 Food Wing Coffee World and Pizza Corner Etcetera introduces a food & Beverage division through Coffee World and Pizza Corner. Coffee World, an international premium coffee chain is a part of Global Franchise Architects (GFA) and is the first international specialty coffee brand to expand through a combination of corporate stores and a network of single unit franchise. In late 1977, fuelled by inspiration, GFA launched the first ever Coffee World. Although international arena is bursting with competition, Coffee World in a short span of time has distinguished itself and come to emerge as one of the market leaders due to its unwavering commitment to quality. Today, the company has over 110 outlets across Asia and plans to reach 150 by the end of 2007.Coffee World is truly the place where the world meets.

Coffee World, the organization takes great care to provide the guests with the finest experience. Apart from the wide range of premium hot and cold coffees, ETC also offer a range of freshly made complementary foods with an international flavor. Their menu includes such favorites as waffles, fresh tossed salads, cakes and sandwiches. Coffee World is renowned for having the best and widest range of Frappes (ice blended coffee or cream) in the world, and is famous for its waffles which are made fresh at the store daily. Coffee world and pizza corner have the following outlets: 1. Coffee World Delvistaa, Gulshan 2. Coffee World ETC, Dhanmondi 3. Coffee World, Banani 4. Coffee World & Pizza Corner, Nilu Square 5. Coffee World & Pizza Corner, Uttara 2.2.4 Organizational Hierarchy of the Group
Chairperson

Vice Chairperson MD/FD

ED Speed

Director Operation & ITL

ED OHS

ED ETC

Head of Admin

Company Secretary

Sr. Manager STS

Sr. Manager Print Craft

Sr. Manager Finance

Manager PCM

Manager Record

Manager Disbursement

Manager Payroll

Figure - 01: Organizational Hierarchy of the Group

2.2.5 SWOT Analysis of Etcetera Bangladesh Private Limited: Strength:

Weakness:

Corporate Identity Brand image (Scholastica, ETC, Book Express & Coffee World) Linkages with International Org.(Cambridge, Franchisee of Thai Food & Beverage Co.) Backward Linkages Business Development Unit and R&D Dept.

Coordination of Various Departments Centralized Decision making process Lack of Marketing Activities Some of the company running at lose

SOWT
Opportunity:

Forward linkages (university) With GDP growth, the served product demand may increase Opportunity to enjoy economics of scale. For additional demand market Expansion may possible (School & Outlay in Various Division) Get International agency Loan for Expansion.

Threats:

Economic slow down could reduce demand. Market may become price Sensitive. Major competitor may enter in Targeted market segment. Declining funding and ability to respond quickly.

Figure: SWOT Analysis of ETC

Project Part

3.0 Introduction Whether it is a manufacturing or service organization, Supply Chain Management system is the fundamental part of that firm. ETC is the retail business of Ascent Group. Supply Chain Management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. SCM is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm and also in those firms where each channel member operates independently. Therefore coordination between the various players in the chain is very important in its effective management. Supply chain management flows can be divided into three main flows:

The product flow The information flow The finances flow

The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial low consists of credit terms, payment schedules, and consignment and title ownership arrangements. 3.1 Area of Supply Chain Management From the following diagram we can easily understand the area of supply chain management. The main task of marketing department is to create demand among the customer. After creating this demand, they give the responsibility to the backend

department i.e. material planning department (material management & inventory control). Basically, the task of supply chain manger starts from here.

S U P P L I E R

Purchasing

Material Mgt. & Inventory Control

Sales & Marketing

Manufacturing

Warehousing

Distribution Channel

C O N S U M E R

Figure - 2: Area of Supply Chain Management ETC operates as a single business unit. It comprises of various departments such as Store Operations, Material Planning, Procurement and Merchandizing, Warehouse, Distribution & Channel, Human Resource, Finance etc. Although ETC maintains multiple retail brands, the central support office for the outlets and the warehousing operation are managed jointly for all brands. This is being done in order to prevent duplication of infrastructure. We had studied the different functional activities of the following sections which are related to ETC. We have concentrated to identify the areas under the process flow of Supply Chain Management of ETC. Thusin the first stage we discussed the areas under product and information flow and thus in the second stage showed the finance flow.

3.2 PRODUCT AND INFORMATION FLOW 3.2.1 Marketing & Customer Care Department: This department can be broadly divided into two units: Marketing & Events and Customer Care. 3.2.1.1 Marketing & Events Unit: The customers of ETC are the upper middle and the rich. They greatly forecast demand with the help of their past experiences that is the trend analysis. Other than they also contact with customer care department for getting the clear idea about the past demand those are not met yet. They can get the idea about the volume of product that is returned With the PRN (Purchase Return Note) that comes to customer care department from the buyer Brand Image of ETC A brand includes a name, logo, slogan, and/or design scheme associated with a product or service. Brand recognition and other reactions are created by the use of the product or service and through the influence of advertising, design, and media commentary. A brand is a symbolic embodiment of all the information connected to the product and serves to create associations and expectations around it. A brand often includes a logo, fonts, color schemes, symbols, and sound, which may be developed to represent implicit values, ideas, and even personality. ETC is maintaining all of relevant works and duties. ETC has its own name, logo, slogan and design scheme associated with a product or service. These logo, fonts, color schemes, symbols, and sound, which has developed to represent implicit values, ideas, and even personality to the customers. Brand loyalty has been proclaimed by some to be the ultimate goal of marketing. In ETC, brand loyalty consists of a consumer's commitment to repurchase under the brand and demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. Its true brand loyalty implies that the consumer is willing, at least on occasion, to put aside their own desires in the interest of the brand. Such loyalty is referred to as "spurious loyalty". ETCs true brand image have a high relative attitude toward the brand which is then exhibited through repurchase behavior. This type of loyalty is a great asset to the firm. Customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For

example, Customers are buying products from ETC though those products are cheaper and available in the market. 3.2.1.2 Customer Care Unit of ETC: Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior, which is potentially of benefit to the firm At ETC we focus on providing good, quality service to all our customers. Service with a smile and customer satisfaction are slogans that all of ETCs Customer Service Officers follow. Customers are treated in a personalized manner and therefore rely on ETC to provide them with full support whenever needed. An integral component of Customer service at ETC is the loyalty program that was launched in September 2002. The program is specifically designed to provide customers with a purchase benefit every time they shop with us. Customers are able to earn points that can be redeemed for products at any ETC outlet. This program has significantly increased the number of repeat customer, thereby driving down mass communication costs. Customers are able to sign on to this program with a minimum purchase of Tk. 500 and by filling out a simple membership form. Accounts are maintained online and redemption of points is instant. Additional value-adds such as regular promotions and instore events for loyalty members are constantly organized. ETC relies heavily on direct communication with customers via and the electronic distribution of monthly newsletters and promotional information. Furthermore, as customer-wise purchase trends are monitored through this software, it is possible to design specific campaigns for targeted customers. This unit also maintains a customer hotline and an online order request and complaint terminal at each outlet. Complaints or orders logged on the terminals are monitored by customer service officers in the central unit and necessary actions are taken. The unit plans to increase customer interaction by launching similar services through the World Wide Web. Additional loyalty programs such as the ETC Kids Club have also been successfully launched through this unit. This innovative concept has proven to be a great success with parents with young children. Every week, activities such as reading sessions, drawing and other childrens activities are arranged in store. Attendance is high and children develop a fondness of the ETC brand. ETC has also launched a privilege card for Coffee World and Pizza Corner outlets. This membership card which

can be bought at a price of Tk. 350 enables a customer to avail of a 10% discount with every purchase. The same card is offered to the students at a price of Tk. 250. The loyalty card is expected to also increase the customer database size significantly. As an organization, the loyalty programs will directly access over 30,000 customers through email or courier by the end of this year.

3.2.2 Material Management & Inventory Control Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business. The word inventory was first recorded in 1601. The French term inventaire or "detailed list of goods" dates back to 1415. There are three basic reasons for keeping an inventory: 1. Time: The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amount of inventory to use in this "lead time". 2. Uncertainty: Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods. 3. Economies of scale: Ideal condition of "one unit at a time at a place where user needs it, when he needs it" principle tends to incur lots of costs in terms of logistics. So bulk buying, movement and storing brings in economies of scale, thus inventory is maintained.

ETC is conscious that as volume increases, there will be a need for constant review of vendors and the prices at which goods are bought. This may well require working in partnership with preferred vendors in order to develop their capability in order to support the companys consumption over the next few years. The procurement team will look to help vendors, develop guidelines in order to meet pre-defined quality standards, reduce costs and ensure sustainable supply. ETC is currently using in-house software to manage sales and procurement activities. This software has already seen considerable development over the last 5 years. There is no doubt that as the number of outlets increase, the demands for additional support from the software will also increase. ETC works very closely with sister concern Imagine

Technologies and continuously looks to upgrade software in anticipation of future demands. Furthermore, as point-to-point connectivity charges continue to reduce in cost, the software will require adapting its functions to be more interactive and provide ecommerce opportunities to customer using the World Wide Web. For material management they also do supply line development: Supply line development & management The Company is conscious that as volume increases, there will be a need for constant review of vendors and the prices at which goods are bought. This may well require working in partnership with preferred vendors in order to develop their capability in order to support the companys consumption over the next few years. The procurement team will look to help vendors, develop guidelines in order to meet pre-defined quality standards, reduce costs and ensure sustainable supply. 3.2.3. Procurement & Merchandising Procurement is the acquisition of goods and services at the best possible total cost of ownership, in the right quantity and quality, at the right time, in the right place and from the right source for the direct benefit or use of corporations, or individuals, generally via a contract. Simple procurement may involve nothing more than repeat purchasing. Complex procurement could involve finding long term partners or suppliers that might fundamentally commit one organization to another. As a retail operation, Procurement & Merchandising is at the heart of ETC. Procurement of goods vary from lifestyle products such as clothing and books to comestible products such as fresh vegetables and milk. The entire procurement process is controlled by inhouse software. Officers interact with the software in order to be able to generate purchase orders, review inventory, enlist suppliers, receive goods and transfer goods from one point to another. All of these processes have an in-built confirmation process. Hence, user access is defined by level of responsibility for officers working in the department and also as per their job description. As a market leader, the ETC procurement team faces many challenges specifically with regards to vendor development and ensuring supply chain consistency. In the lifestyle segment, the majority of the products is not manufactured locally and is imported. This has resulted in ETC focusing on international supply chain development over the last few years. This

has been a painstaking process and the Merchandising team has had to educate our foreign Suppliers about the peculiarities of the import process in Bangladesh. The Procurement department comprises of senior merchandisers who are each responsible for a specific category of products. Their primary responsibility is to manage inventory at each location by planning for new product launches, managing supplier terms and conditions and assisting each outlet with preparing shelving plans and Visual Merchandising guidelines. Purchases plans are generally prepared semi-annually and outlet-wise stocking levels are monitored monthly. Given the fact that foreign imports can take anywhere between 18 90 days, each merchandiser has to ensure that outlets are well stocked and prices remain competitive as per market trends. The Merchandising department works very closely with Finance in forecasting sales targets and preparing vendor payment plans. In this department merchandisers are category specific and not outlet specific. Therefore, if any particular category is carried in multiple retail brands, then they provide support to that concerned outlet regardless of what brand it is. 3.2.3.1 Procurement 3.2.3.1.1 Vendor Development Vendor Development of ETC is done by to keep 5 or 6 suppliers. So, ETC is not
dependent on one vendor. As a result, ETC selects the vendor which gives him more facility then others.

3.2.3.1.2 Purchase Process Though the purchase process is handled by Procurement department, the process is very important for understanding the accounting system: A. Purchase requisition When a need for a material or service is identified, the identifying person will prepare a material request. Guidelines for who may determine the need for a requisition and on what basis are given in the purchase and procurement policy manual. The financial officer will review the purchase requisition for compliance with the policy on procurement in the policy manual and for available budget to cover the cost:

1. Requisition for items that do not meet the requirements stated in the policy are submitted to the finance direction for decision 2. Purchase requisition that meet the policys condition are given and account code from the chart of accounts, approved and returned to the procurement manager for purchasing action. B. Purchasing The authority to purchase material and supplies is established in the responsibilities versus authority matrix (purchase and procurement policy manual).The procurement manager may further delegate certain purchasing function to other personnel, but the authority and responsibility to enforce the procedures under which these activities are carried out will remain to him. Detailed instruction for working with purchase orders are stated in purchase and procurement manual. C. Order tracking and expediting The procurement manager is responsible for tracking the order until it is delivered to the warehouse. The tracking process begins immediately upon issuance of a purchase order. If the procurement manager determines during the order tracking process, that a delay can be expected consults with the store keeper to determine how critical the order is: a. If the forecasted delivery date is unacceptable the procurement manager ascertains what measures can be taken to achieve an acceptable and the cost of such measures. b. The procurement manager also immediately notifies the concerned head of unit and Director Finance, by meme, of potential critical delays and the available options for overcoming the delay. Following consultation, the procurement manager will take necessary action to set a new delivery date. D. Customs Clearance The procurement manager, assisted by the customs broker, is responsible for clearing purchased materials through customs and ensuring delivery to the warehouse. The all other procedures will be followed as per procurement policy.

E. Receiving The procurement manager advises the warehouse keeper that a shipment of material is due to arrive at the store on a particular date and provide the storekeeper with a copy of the purchase order. The ware house keeper will prepare to receive the shipment as per policy mentioned on the purchase and procurement policy. F. Payment When an invoices received for payment, the head of finance will verify hat purchase and procurement and financial delegation policy has been maintained. This purchase process can be easily understood with an example: Let ETC needs to buy a computer for one of its personnel of its IT department. And for this there is requisition form for the computer which must be fulfilled by the person for whom the computer will be purchased. And then it is submitted to the highest authority of that certain department that is the manager of the IT department. And the manager, send it to the procurement department for further processing. Then procurement department asks to Store if that very product may be available or not. If the product is not available in the store then the requisition form is sent to the budget department for approval if enough funds are available to buy the product then budgetary control department approves it for buying. And send the approval to the procurement department to complete the purchase process. Procurement department then wants some quotation from different organization who sells the computer and its accessories to select the best potential supplier for that certain product. And then the purchase decision is taken with the upper authority's demand at some chosen price at a certain chosen quality. Normally there is a purchase committee for taking the decisions about all the terms and conditions of purchasing. After selecting a certain organization to buy the computer let the company is Computer Source, ETC asks them to supply the computer with the Purchase Order (PO) .And then the supplier organization sends the product to the group with delivery challan. All the terms and conditions of Computer Source regarding the selling of the computer are written on that challan. And ETC keeps a Good

receive Note (GRN) for tracking that certain transaction. And now the store keeper with the Purchase order for the computer that sent to him receives the computer on the decision of a responsible person who is a senior officer of that certain department or officers of purchase committee. And according to the challan's terms and conditions and with a payment schedule that is determined by the purchase committee or the directors of ETC, the payment is made to the Computer Source.

The purchase process is thoroughly described with the following figure:

Requisition for a certain product to supply or purchase by the departmental head with an expenditure control form
Procurement department contact with the budgetary control department

Procurement department (corporate)

Budgetary control department

Sees if there is adequate budget for that product & informs

Procurement If budget matches the expenditure then Procurement wants some quotation from the supplier (at least three)

Choose the standard price at a certain class and prepare Purchase order for a certain product and work order for work Goods are delivered by the supplier with a delivery challan of the supply Goods are received with a GRN by the store keeper

Terms and conditions of Purchase order are determined by Purchase committee

Payments are made with a payment schedule that is determined by the purchase terms and conditions

Figure 3: Purchase process of ETC

3.2.3.2 Merchandising As organized retailing is in its infancy in Bangladesh, finding professionals for store-level support in VM remains a challenge. This is an area where developing in-house expertise through training and exposure is the only option. VM plays an important role in generating sales and is an area where the company will focus in the next few years. Initiatives such as VM training workshops with foreign experts and visits from by our merchandising team to similar retail outlets in the region will be necessary. 3.2.4 Manufacturing ETC have two wings. ETC import goods from other country for retail wings (Retail). Locally produces goods For ETC (Food and Beverage) according to their need. 3.2.5 Warehousing Warehouse management system, or WMS, is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, put away and picking. The systems also direct and optimize stock put away based on real-time information about the status of bin utilization. The objective of a warehouse management system is to provide a set of computerized procedures to handle the receipt of stock and returns into a warehouse facility, model and manage the logical representation of the physical storage facilities (e.g. racking etc), manage the stock within the facility and enable a seamless link to order processing and logistics management in order to pick, pack and ship product out of the facility. Warehouse management systems can be stand alone systems or modules of an ERP system or supply chain execution suite. The primary purpose of a WMS is to control the movement and storage of materials within a warehouse. Warehouse Management is not just managing within the boundaries of a warehouse today; it is much wider and goes beyond the physical boundaries. Inventory management, inventory planning, cost management, IT applications & communication technology to be used are all related to warehouse management. The container storage, loading and unloading are also covered by warehouse management today. Warehouse management today is part of SCM and demand management. Even production management is to a great extent dependent on warehouse management. Efficient warehouse management gives a

cutting edge to a retail chain distribution company. Warehouse management does not just start with receipt of material but it actually starts with actual initial planning when container design is made for a product. Warehouse design is also part of warehouse management. The central warehousing facility for ETC is consolidated in one location. The manager is responsible for managing the warehouse, executing transfer orders, receiving goods from suppliers, and coordinating logistics for delivery. The warehousing facility also comprises of a commissary that supports the F&B outlets. The commissary has been built to international standards and operates on a two-shift basis. The warehouse works closely with the merchandising team and the outlets to ensure that deadlines for product transfers are well coordinated and met. 3.2.6 Store Operations The store operations department is charged with the administrative and sales function of each outlet. This is by far the largest unit in terms of manpower. The senior managers for store operations are supported by a small operations unit in the central office. This team works closely with the managers and supervisors of each outlet in order to ensure smooth operations and the achievement of sales forecasts. This is a highly motivated sales team where focus on customer service and satisfaction, profit protection, sales achievement is a priority. As there are multiple outlets, the managers for each store are motivated and trained to be self supervised and are given the capabilities to handle all day to day needs of that outlet. All staff joining this department must undergo a 2-week induction program and monthly performance evaluations for each staff member are mandatory. These evaluations are carried out jointly between store operations and HR and provide feedback on performance at an individual and team level and are the basis of staff transfers and promotions. Store staff works closely with category merchandisers for guidance and sales planning. The managers of each store also have a strong administrative function and again work closely with various support departments such as maintenance, admin and IT on a regular basis. All outlets, regardless of size, are given e-mail access. The central store operations unit is primarily there for troubleshooting and strategic planning. Roll-out of new outlets is coordinated through store operations central unit. Each store maintains a range of policies that allow them to service customers in a uniformed way and prevent discrepancy within service levels from outlet to outlet (policy

documents are attached). The outlet staffs are a vital source of customer feedback. Therefore, regular meetings are held at the central support office between representatives of Store Operations, Merchandising, and Sales & Marketing. These meetings form the basis of short-term action plans that are mutually agreed upon by all. The store operations team also plays a pivotal role in executing store based marketing campaigns and events. Outlet managers work very closely with the marketing team. Frequently, the store operations unit will take initiative to improve or change store layouts, carry out spring cleaning, reconcile inventory, etc. In such instances, these initiatives are coordinated with the concerned departments and respective store managers. To keep motivation high, all outlet staffs are able to benefit from a variable pay scheme. This scheme generally allows for the staff to earn higher pay in ratio to sales achieved. Other than this, regular workshops and training and weekly briefing sessions by the central support unit ensure a well-trained and focused sales team. Another important activity of the central store operations team is to supervise regular store audits. These audits are carried out frequently using the attached format. The audit reports are discussed at the central office and areas for immediate and mid-term improvement are identified. Profit protection is given emphasis at the store level. In fact, acceptable theft and damage parameters are clearly indicated. The staffs are made conscious of this and are expected to remain within permissible limits. As the inventory is live, the store maintains a perpetual inventory management strategy. Therefore, regular sample audits are carried out. Variances are investigated by the central store operations unit and accordingly action is taken. Store operations rely heavily on the HR department for support in handling staff grievances, evaluating staff performance, investigating disciplinary action, and in setting staff rosters. For all procedures requiring interdepartmental coordination, mutual consent is required. As an organization, ETC is geared completely to support the outlets and all support departments place priority on store operations raised issues. This department uses various formats for its day-to-day activities and samples of these formats are attached. 3.2.7 Human Resource HR management for ETC is coordinated by a team of individuals in the HR department. They work very closely with the store operations team in the central office in organizing the induction programs for all new store operations staff and other regular store based

workshops, training programs and briefing sessions. The structure for induction programs and various on-the-job training programs are attached. The HR team also coordinates with store managers and supervisors to conduct monthly performance evaluations of all sales staff which then serve as basis for considerations of transfers and promotions (evaluation forms for customer service officers and floor supervisors are attached). Recruitment drives are carried out at the onset of an outlet opening during which period intensive training is also organized to train the new employees on all the operational areas of an outlet. Besides this, an ongoing recruitment process is managed by the HR team for the intake of additional employees or to fill vacancies. The employee of the month program, also coordinated by the HR team in collaboration with the store operations managers and senior manager in the central office, has been a highly successful tool in increasing the motivation level and morale among the store operations staff in the outlets. At the beginning of each month, the senior management personnel of ETC visits each outlet and hands over the employee of the month award to the nominated employee for his/her outstanding performance in the preceding month. The policy document for this program is attached. The variable pay scheme, maintained and monitored by the HR team also serves as an incentive drive for the employees to increase the sales level. 3.3 FINANCE FLOW The accounting system of ETC is different for their different business organizations of the group for different business requirement. So the Accounting system of ETC is mentioned below. There are five sections in Accounting and finance department. Those are: 1. Collection Section Cash Collection related activities 2. Records Section-Record all the collection and payment of the group 3. Disbursement Section Handle Payment related activities 4. PCM (Planning & cash management)-Bank related activities.

The accounting system of ETC can be represented with the following graph, which is explained then:

Finance Director

Head of Finance

Manager Records

Manager PCM

Manager Collection

Manager Disbursem ent

Manager Payroll

Chief accountant

4 persons under his supervision

1 person under his supervision

4 persons under his supervision

5 persons under his supervision

2 persons under his supervision

Figure - 4: Structure of Accounting and finance department of ETC

Inter-dependent Work Flow Chart of Finance, Procurement and general Administration Department:

Collection

Payroll

Procurement & IS/IT

General Administration

PCM

Disbursement

Collection Report, Intercompany Bill

Summary of payroll adjustment if any

Work order and /or PO and GRN copy

Monthly drinking Water, Gardening, Landscaping, Cleaning Bill, etc.

Bank Reconciliation, Monthly Utility Bill, Bank Charge &Interest statement, etc.

Daily Disbursemen Statement with vouchers, Working Advance & petty cash adjustment, etc.

Manager, Report Record For checking Head of Finance For approval Senior manager For Authorization

For Posting

For Voucher Preparation For authorization Voucher preparation and /or Computer posting

Figure - 5: Work Flow Chart of Finance Department

3.3.1. Collection Section Collection department is responsible for accumulating of the group collection. Normally, the main sources of cash inflows to a business are receipts from sales, increases in bank loans, proceeds of share issues and asset disposals, and other income such as interest earned. Collection section congregates the collection from operation of the following concerns.

Activities of Collection Section: Sorting date wise and branch wise slip collection Deposit Pay order to the Bank Prepare Cheque for final payment and forwards to the section Prepare miscellaneous collection statement Prepare deferred payment statement and forward to record section. Out let bill Collection of ETC/CW/PCZ Inter Company bill Collection VAT payment Collection System of ETC: ETC is a retail service and CW& PZC are food and beverage. In all of the outlets cash is collected against sales. Now sales are made in two ways Cash Credit

Here credit is collected from customers on credit card. But within the group interdepartmental credit are collected on the basis of the decision of Planning and Cash Management (PCM). Now the daily statement of sales are collected in two ways from the outlets. Online Offline

ETC, Uttara and ETC, Dhanmondi outlets are arranged in such a way that they can place all their sales reports online and can inform the corporate office finance time to

time. Thus finance department can get up to date information with each and every transaction at those outlets. Normally group-4 security service is recruited to collect the cash from the outlets and to receive the deposit slip from the bank and place this to the collection department of the finance department. In the case of credit payment, Creditors pay the amount in the bank with their own credit card. Bank sent a bank statement monthly to the outlets those were liable for the certain transaction in before. But this process is time consuming to send the reports to the outlets at first to sales department of corporate office and then to the collection section of the finance department .Now the banks are requested to send the reports to the collection section of the finance department so that transactions can be procured within a small time. And now a day corporate office requested the outlets to provide the Daily query reports to the corporate finance departments so that no fluctuation occurs between the recorded and deposited amount and no difference will remain in the outlet records and collections records. All The eleven Outlets of ETC use an ERM (Enterprise Resource Management) System to compile daily report and Daily Sales Report or DSS (daily sales statement) to the Operations Department of Etc. Operation department prepare a check list report where the VAT number and amount has been written clearly. On the other hand ERM system is being updated by the Outlet supervisor and it can be accessed by the Senior Officers and Manager of Collections. The organizational chart of Finance Department showing the breakdown of responsibilities that is who is responsible for which section. Then officers with the help of senior officer prepare receipt voucher for adjustments. There are three types of voucher. One is Receipt voucher prepared for receipt money form Outlet and other one is Journal voucher which is prepare for adjusting the journal. Then send it to records department for record it and entered it into the TALLY. TALLY is a accounting software used by the department and adjustments also made under the tally report. Then reconciliation is also done simultaneously and after it a monthly report is prepared for Managing Director. As it is important to achieve the sales target after all operating and non-operating expenses. Again reconciliation is also conducted to make the adjustments with bank statement. Every month banks send statement to finance and it

has to be reconciling with their own daily report. A senior officer of Collection is responsible to keep the cash collection which is collected from ERM report. Training Outlet directly reports to collection. The final report about training Outlet comes from HR department. Because employee can place order in this Outlet on credit basis and at the end of the month it will adjust with their salary. So, training Outlet only maintain a hardcopy as Sales Register for their own and send ERM report to HR department. Chair of HR signs the final copy and send it to finance department. Then receipt voucher is also preparing for this report VAT payment System for Collection: ETC uses VAT form to maintain and collect the VAT from its customers. And they use MUSHK-11 for collecting VAT. Here the value means the Value on which VAT will be calculated or assessed, but not the value in Economics or common sense. Added value is the value that a manufacturer or a service render or a businessman adds to his inputs or raw materials or other purchases by the time he sells the product or service. In other words, the added value is the differential amount between the sales price and the input cost. Value addition = Sales price Input cost And VAT = Output price x 15% - Input Price x 15% (if any) According to the Government and Company rule the VAT Deduction/ Collection rate: VAT will collect/deduct on or from: 3.3.2. Planning and Cash Management:. Activities of PCM: Planning and cash management division usually performed the following activities: Preparing and monitoring bank position for the Group Taking steps for clearing cheque issued for disbursement. Retail sales @ 1.50% Restaurant @ 15% Suppliers bills @ 2.25%

Monthly interest statement preparation Collection of bank statement Analysis of loan position Checking the bill for disbursement Preparing the bank reconciliation statement for the group Dealing insurance matters of the group Deal matters for lease arrangement and loan arrangement for the group. Preparing and analyzing group cash flow Making the provision for utilities Preparation monthly house rent statement Deal all bank correspondence Prepare of documents for banks Report prepares and forwards to: Report Loan position statement Bank reconciliation statement Monthly interest forwarded records Group insurance report Monthly house rent statement FDR statement Forward to Need based Records Section Records Section Records Section Records Section Records Section

3.3.3. Disbursement Disbursement department is responsible for all kind of payment for outside supplier or in house payment. Cash Outflow Insurance, includes Salaries Paid and Interest Wages, Taxes Advertising & Promotion Expense, Rental (or Lease) Payments for Equipment, Furnishings, Vehicles, Premises Premiums and Payments to Suppliers .After getting permission from PCM they prepared payment voucher and write down cheque for particular bank account for the concerns. Activities of Disbursement Section: Receiving approval slip and bill for payment

Prepare voucher for payment Prepare memo for outstanding bill payment in Cash Prepare Cheque Daily disbursement statement preparation Maintain advance ledger book Prepare outstanding bill Schedule Make Adjustments Prepare payment and journal Vouchers

Source Documents: Approval slips for payment Bill are the sources document for disbursement department. Reporting: Report Daily disbursement statement Outstanding bill Schedule Monthly Payment Statement Forward to Sn. Manager Finance Sn. Manager-Accounts Self Kept Finance Director

3.3.4. Records Section Record section is responsible to keep records of all the transaction and maintained the records with supporting. After posted the transaction in Tally software, they are maintaining all the documents in file and store it systematically.

Activities of Records Section: Payment voucher collection from disbursement section with statement Collection document from revenue section for voucher preparation except ETC Collection of GRN, Work order , Purchase order from procurement department for payable through journal Voucher Any adjustment, rectification, provision make through record section except working advancement and supplier advance

All voucher posting in accounting software TALLY Purchase register maintain Indexing Bank statement and bank reconciliation statement preservation. Prominent Fund, Security Money, employee advance & loan, Employee and staff income tax statement collection from the payroll department. Daily receipt and payment statement, monthly, quarterly & annual report prepared by record section.

Source Documents: These are the sources of data for maintaining records: Payment voucher Journal Voucher Collection Voucher Salary statement Work order/GRN

Report

Produce:

Records

section

always

prepared

Financial

Reports.

The major financial reports include the income statement, balance sheet, and statement of cash flows. Record section usually shares this snapshot of performance with lenders, equity investors, and board of directors.

4.0 FINDINGS In absence of a Supply Chain Management Department, ETC faces some lack of co - ordinations among the activities of the departments. We have find out the problems of the SCM departments which are: In most of the business organization it is seen that Business development Unit (BDU) is engaged with the marketing activities with some portion of accounting relation. But in ETC, BDU totally involves with accounting and finance department. But new product or business development idea can be generated in limited number only with the financial information. It is a big problem of the Supply Chain Management Process structure of ETC. Disbursement section of Account of ETC does not maintain a formal payment schedule. For making payment to their suppliers they greatly rely on the upper authoritys decision. The budgetary Control Unit of ETC is totally maintained by the General Administration. The General Administration of ETC prepares the budget with the help of procurement and Finance department. ETC has no standard system of maintaining and controlling the stock for its Food and beverage sector. Though they developed a system with their own, it is time consuming and complex to understand. Another problem is time lag between decisions making because all the decision comes from Managing Director. Budget control unit hardly monitor and control any kind of expenditures, though one of their major responsibilities is controlling expenditures. The main problem is that they have not the proper authorization to maintain and control

expenditures. The organization also has not any standard mechanism to control budget. For these initiatives like cost center supervisor can be awarded for maintaining actual budget. It is difficult to maintain sales group that came from different Outlet every day manually. This organization prepared the supporting like Payment Voucher, Collection Voucher, and Journal Voucher manually. It is time consuming and would become difficult as the business is growing. Though the ETC target customer are the upper middle and the rich. So the number of this customer is not large enough.

5.0 Recommendations Under the proper supervision of a well structured Supply Chain Management Department all the problems those are stated earlier can be solved. We have recommended some solutions for improving the Supply Chain Management Process of ETC under the departments those are already handles the different activities of Supply Chain Management Process: ETC can increase the revenue by also includes the middle class. Because its overall strategy is superior. ETC follows the standard format for LC opening. Good relationship exists between the bank and the exporter. This was the advantage of ETC and we have no comments about that because ETC already follows that. Most of the massage of ETC is coming through The Daily Star and the online. So, we think that they should also use the electronic media and print media which is also more effective. For better demand forecast they can use sensitivity analyses or time series analyses.

Budgetary Control and Budget making authority should be given fully in the hand of finance and Supply Chain Management Department as finance and SCM best knows how much to invest and what product will cost how much and how much to spend for a certain product rather than general Administration .

They can decentralize decision process that means some decision making authority should be on the hand of the managers of the departments rather than ED on the basis of the need. This also reduces the time lag between the financial activity and decision making process. ETC must develop their system with the consistent supply and flow of the documents from procurement and other departments so that no departments remain to stop their activities for it.

The company should use customize software to maintain collection book rather than keep it manually. Customize software also helps to save a lot of time and locate desirable data like cash collection at item wise. It is also necessary because the group have a plan to expand their business. ETC should use a computerized system or maintain software that maintains the journal, receipt and payment vouchers in the form of soft copy. This will saves time as well as increase the efficiency by reducing the errors. Business development Unit should be maintained with the proper mix of marketing and accounting activities by combining the two sated departments.

ETC should develop a formal payment schedule by marking the common and frequent supplier at first, then the irregular supplier. And combining the ranking position, the terms and conditions and payment period, a proper payment date is identified.

Operation department which is under the marketing department should cooperate with collections section of Group finance as it will increase the efficiency in operational activity of both departments.

We also proposed a hierarchical organogram for maintaining an efficient Supply Chain Management Department. That is

According to this proposed Organogram we dont change any level of authority. We have just added a structured Supply Chain Management Department in Which the highest authority starts with Executive Director, ETC and then the second highest second authority should be a senior manager who supervises at least six managers who will observe and coordinate the activities of Marketing, Store Operations, and procurement, Finance, Warehouse and Inventory Management. And under each of the manager there should be two senior executives and four executives on the basis of their experience. With this proposed Supply Chain Management department we hope that ETC will operate more effectively and efficiently as they can reduce the distance between the activities of the departments.

6.0.Conclusion The study of Supply Chain Management Activity of an organization is indeed very critical. It entails the most crucial aspects of an organization. Probably no other division of a company faces so many crucial decisions or is burdened with so much varied demand on it. Our study was aimed to unearth the complexities that the SCM division faces. In course of the study, I found that many of the things which are pre-dominant in the textbooks differ a lot from actual field.

An effective SCM is essential to any business organizations success. It helps to improve efficiency in process as well as in decision-making. Finally, It can be said that as a leader in the field of providing retail service, would able to become the market leader in the related concerns with the help of standard Supply Chain Management activities through maintaining an organized SCM department.