Suppy Chain Management at Rahimafrooz Superstore Limited free essay sample

Afrooz is one of the leading business groups in Bangladesh. It is doing business in the country for more than 50 years with fame and reputation. The main strength of the group is its reputation of doing ethical business practice. Throughout its business during last 50 years, it has mainly operated in the automotive industry. Recently it has extended its business in energy and retailing business. It operates in an SBU model. The SBUs of RahimAfrooz are: 1. RahimAfrooz Batteries Limited 2. RahimAfrooz Distributions Limited 3. RahimAfrooz Superstore Limited 4. RahimAfrooz Energy Services Limited . Excel Retreads Limited 6. Super Abrasives Limited 7. Greyfab Limited 8. Arzed Limited 9. RahimAfrooz CNG limited 10. Metronet limited This report is made for RahimAfrooz Superstore Limited. The brand name for this SBU is Agora. It is the leading superstore in the Dhaka city. It has revolutionized the retailing industry of Bangladesh. It is established to provide quality shopping experience for its customers. With four large outlets in Dhanmondi, Gulshan, Maghbazar and Sobhanbagh, it is also the largest retailer in the country. We will write a custom essay sample on Suppy Chain Management at Rahimafrooz Superstore Limited or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It is offering more than 20,000 items under one roof. These items are divided into 11 categories. The categories are: Household, Grocery, Meat, Fish, Vegetable, Fruits, Fast food, Dairy, Bakery, Pharmacy, and Cosmetics. Since the inception of Agora, the modern retailing industry is developing in the country. Now quite a number of modern retailing shops are operating in the country. All of them are mostly Dhaka based. But many of the big players of the industry are thinking going outside of the capital city. Although there are number of modern retailer operating in the country, every does not have the strength and potential to challenge superstore like Agora. But some of them are really competing. The main competition Agora is facing from the following companies: 1. Nandan Mega Shop 2. Meena Bazaar 3. Price, Quality Services (PQS) 4. Shop Save 5. Ko Mart 6. Almas Super Shop Agora has formulated an ambitious plan to be realized by the year 2010. They named it vision 2010. By the year 2010 Agora dreams to be 1000 crore taka company. Presently their yearly turnover is only 70 crore taka. And they are operating with four outlets in Dhaka city. They wish to have about 43 outlets by 2010. They not only want to be in Dhaka city but also expand their business through out the country. Agora operates with six departments. These are: 1. Operations Department 2. Purchase Department 3. Marketing Department 4. Finance and Accounts Department 5. IT department 6. Human Resources Department The operation is divided in to parts. -Head Office based -Outlet based The operation of outlet is under operations department. The operation is centered on the superstore management software agora use. The total procedure is controlled by the database in that software. The software has four modules: 1. Flexsim Back Office 2. Flexsim CPU 3. Flexsim Point of Sales 4. Flexsim Accounts The supply chain is the key business activity of Agora. To move ahead Agora needs to improve its supply chain. This report is mainly originated to search ways of improving supply chain. The two main objectives of the report are: -Find the solution for overstock problem Agora is experiencing -Find the areas in supply chain where special focus is required Due to overstock situation, Agora has experiencing several problems. Some of these problems were: Managing the items are getting difficult -Higher amount of working capital is required for supplier payment -Payment to the suppliers are getting irregular, which resulting dissatisfied suppliers -Wastage is increasing -In an effort to decrease SIH, they are ordering lower amount. As a result some fast moving items are getting out of stock soon. And sales are getting lost. -Managing the self space is getting tougher, resulting lowering of impulse purchase To find out the reasons of overstock problem we have got involved in the very process and found out several loopholes in the procedure. These loopholes are shown below: -GRN is not done in a timely manner -Seasonality is not taken care of properly -Regular monitoring of physical stock is not taken place -Code mismatching takes place while selling the items -Gondola stock is not managed properly -The merchandiser’s activities are not controlled properly -Storage space is not well managed -PR is given to the suppliers before getting approval from the purchase department -Software is slow to encourage checking of stock -Software does not allow purchase department to change the PR generated by back office As the reasons are identified, the task remaining is only to remove the reasons. At least apparently it seems like so. But in reality all the reasons are not removable directly. Like up gradation of software is a very costly and time consuming affair. So some indirect solutions are required. Following are the proposed alternative solutions: -Imposition of order limit -Imposition of order cycle -Removing slow moving items -Removing some category wise suppliers At the same time the importance of continuous monitoring is emphasized. Some of the areas are identified in which continuous monitoring is required. These are: -Checking orders regularly for their authenticity -Regular checking of physical stock -Regular revising of order limit amount -Considering irregular demand pattern during events like Eid, Ramadan, New Year etc. -Considering seasonality while regular revising of order limit amount -Order process specified above is followed strictly Taking the proposed measures and continuous monitoring in the areas identified will add to the betterment of inventory management.