Submitted By

Faysal Ahmed : 191-12-687

Kazi Mesbah Ur Rahman : 192-14-3031
Rifat Hossain Bhuiyan : 192-14-2988

Submitted To
Dr. Md. Mokter Ali
Supply Chain Associate Professor, University of Dhaka

Management used by &

Faculty of Daffodil International University
Swapno Department of Business Administration

Date: 18th April, 2020

01819127030
 Supply Chain Management used by Shwapno

1. Introduction

Today Supply Chain Management (SCM) is the critical backbone to Business Organizations.
Effective Market coverage, Availability of Products at locations which hold the key to revenue
recognition depends upon the effectiveness of Supply Chain Strategy rolled out. Very simply
stated, when a product is introduced in the market and advertised, the entire market in the
country and all the sales counters need to have the product where the customer is able to buy
and take delivery. In recent times super shop business is growing at a high rate in Bangladesh.
A lot of super shop is continued their business in the various cities of Bangladesh. They are also
expanding their business. The shops deliver the customers a huge amount of goods and
products and also various types. The supply process of the goods is really challenging.

To meet the demands of today’s marketing environment, organizations are looking to service
initiatives as a means to create or sustain competitive advantage. A strong brand provides the
leadership framework and umbrella to focus all marketing and resources in a manner that will
generate the greatest results. Now a day’s retailers are turning to brand strategies to
strengthen their marketing programs in an environment that is increasingly characterized by
accelerating rate of changes, variety of products, extreme competitions and superior customer
services etc.

Super market or super shop sector is expanding hand over different marketing events every
day. As the demand for better service increases day by day, they are coming with different
innovative ideas & products. A successful super market not only depends on how it serves its
customers other than its competitors but also how it supply chain strongly and work
effectively and efficiently. A typical supply chain refers the variety of stages.

These supply chain stages include customers, retailers, wholesalers or The super stores are
currently focused in food retailing, ranging from a wide variety of fresh vegetable, fruits, meat
and fish to grocery, bakery, dairy, personal and household products. It provides its customers
with guaranteed quality and freshness. It carries more than 30,000 varieties of products and
has plans to expand its product portfolio to carry other ranges of consumer products in the
coming years. It buys products direct from the growers, which benefits the latter as well as the
customers. The products are procured under the direct supervision of its officials who
maintain strict procurement and marketing standards. Products on the shelves are regularly
monitored for expiry dates. About 2,000 customers use every day in every stores. Customers
prefer using both cash and credit cards. The super shops are open from 8 am to 9 pm every
day. Rush of customers is experienced in the morning and evening. Most of the employees of
these stores are young and well-educated, some with Masters and MBA degrees.

“Shwapno” become the largest retail chain in Bangladesh. With 56 out- lets across Dhaka,
Chittagong, Sylhet, and Cumilla, with a total retail space of 310,000 square feet and a workforce
of over 2,500”. [1] Distribution connects every step of the supply chain. From collecting goods
from suppliers then storing them in a central warehouse. Again, distributing them to
consumers as per their demand. Considering these factors, it can be assumed that distribution
is a key factor to transform the company into a profitable organization as it focuses on both
costs for the supply chain as well as the experience of the valued customer.

2. Objectives

The objective of every supply chain should be to maximize the overall value generated. The
value (also known as supply chain surplus) a supply chain generates is the difference between
what the value of the final product is to the customer and the costs the supply chain incurs in
filling the customer’s request.

Supply Chain Surplus = Customer Value – Supply Chain Cost

Supply chain management is consisting of all parties (including manufacturer, marketer,

suppliers, transporters, warehouses, retailers and even customers) or indirectly involved in
fulfillment of a customer. The main objectives of supply chain management are to improve the
overall organization performance and customer satisfaction by improving product or service
delivery to customers. Supply chain management in falls movement and storage of all materials
including raw materials WIP (Work in progress) and finished goods.

Supply chain management is concerned with the efficient integration of suppliers, factories,
warehouses and stores so that merchandise is produced and distributed:

– In the right quantities

 – To the right locations
– At the right time

In order to

– Minimize total system cost

– Satisfy customer service requirements
– face global competition
– Improve standardization

There are the others objectives of supply chain management which are also applicable for
international logistics and supply chain management.

 To maximize overall value generated

 Solving supplier’s problems and beyond his level.
 Customer service performance improvement.
 Reduction of pre-& post production inventory.
 Minimizing variance by means of activities like standardization, variety reduction, etc.
 Minimum total cost of operation & procurement.
 Product Quantity control.
 Achieving maximum efficiency in using labor, capital & plant through the company.
 Flexible planning and control procedures.

3. Different Types of Supply Chain and Distribution Network

There are existing many different types of Supply Chain model and Distribution Network. Here
we focus 4 types of Supply Chain and 6 types of distribution network model.

 Types of Supply chain

a) INTEGRATED MAKE-TO-STOCK MODEL: The integrated make-to-stock supply chain
model focuses on tracking customer demand in real time, so that the production
process can restock the finished goods inventory efficiently. This integration is often
achieved through use of an information system that is fully integrated (an enterprise
system). Through application of such a system, the organization can receive real-
time demand information that can be used to develop and modify production plans
 and schedules. This information is also integrated further down the supply chain to
the procurement function, so that the modified production plans and schedules can
be supported by input materials.

BUILD-TO-ORDER MODEL: In this model the company begins assembly of the customer’s
order almost immediately upon receipt of the order. This model requires careful
management of the component inventories and delivery of needed supplies along the
supply chain. A solution to this potential inventory problem is to utilize many common
components across several production lines and in several locations

b) CONTINUOUS REPLENISHMENT MODEL: The idea of the continuous replenishment

supply chain model is to constantly replenish the inventory by working closely with
 suppliers and/or intermediaries. However, if the replenishment process involves
many shipments, the cost may be too high, causing the supply chain to collapse.
Therefore, very tight integration is needed between the order-fulfillment process
and the production process. Real-time information about demand changes is
required in order for the production process to maintain the desired replenishment
schedules and levels.
c) CHANNEL ASSEMBLY MODEL: A slight modification to the build-to-order model is
the channel assembly supply chain model. In this model, the parts of the product are
gathered and assembled as the product moves through the distribution channel.
This is accomplished through strategic alliances with third-party logistics (3PL)
firms. These services sometimes involve either physical assembly of a product at a
3PL facility or the collection of finished components for delivery to the customer.

 Different Types of Distribution Network

a) Manufacturer Storage with Direct (Drop) Shipping: In this option, product is shipped
directly from the manufacturer to the end customer, bypassing the retailer (who
takes the order and initiates the delivery request). This option is also referred to as
drop shipping. All inventories are stored at the manufacturer. Information flows
from the customer, via the retailer, to the manufacturer, while product is shipped
directly from the manufacturer to customers.
b) Manufacturer Storage with Direct Shipping and In-Transit Merge: Unlike pure drop
shipping where each product in the order is sent directly from each manufacturer to
the end customer, in-transit merge combines pieces of the order coming from
different locations so that the customer gets a single delivery. Information and
product flows for the in-transit merge network are as shown in Figure 4.5. When a
customer orders a PC from Dell along with a Sony monitor, the package carrier picks
up the PC at the Dell factory, the monitor at the Sony factory and merges the two
together at a hub before making a single delivery to the customer. In most cases,
transportation costs are lower than drop shipping because of the merge that takes
place at the carrier hub prior to delivery to the customer.
c) An order with products from three manufacturers thus requires only one delivery to
the customer compared to three that would be required with drop shipping. Fewer
deliveries save transportation cost and simplify receiving.
d) Distributor Storage with Carrier Delivery: Under this option, inventory is not held by
manufacturers at the factories but is held by distributors / retailers in intermediate
warehouses and package carriers are used to transport products from the
intermediate location to the final customer.
e) Distributor Storage with Last Mile Delivery: Last mile delivery refers to the
distributor / retailer delivering the product to the customer's home instead of using
a package carrier. Webvan, Peapod, and Albertson’s have used last mile delivery in
the grocery industry. Unlike package carrier delivery, last mile delivery requires the
distributor warehouse to be much closer to the customer, increasing the number of
warehouses required.
f) Manufacturer or Distributor Storage with Consumer Pickup: In this approach,
inventory is stored at the manufacturer or distributor warehouse but customers
place their orders online or on the phone and then come to designate pickup points
to collect their orders. Orders are shipped from the storage site to the pickup points
as needed.
g) Transportation cost is lower than any solution : using package carriers because
significant aggregation is possible when delivering orders to a pickup site. Facility
costs are high if new pickup sites have to be built. A solution using existing sites will
lower the additional facility costs.
h) Retail Storage with Consumer Pickup: In this option, inventory is stored locally at
retail stores. Customers either walk into the retail store or place an order online or
on the phone, and pick it up at the retail store. Local storage increases inventory
costs because of lack of aggregation. For very fast moving items, however, there is
marginal increase in inventory even with local storage. Transportation cost is much
lower than other solutions because inexpensive modes of transport can be used to
replenish product at the retail store. Facility costs are high because many local
facilities are required. A minimal information infrastructure is needed if customers
walk into the store and place their order. For online orders, however, a significant
information infrastructure is needed to provide visibility of the order until the
 customer picks it up. Very good response times can be achieved in this case because
of local storage. The main advantage of a network with local storage is that it can
lower the delivery cost and provide a faster response than other networks. The
major disadvantage is the increased inventory and facility costs. Such a network is
best suited for fast moving items or items where customers value the rapid
response.

4. Supply Chain Management used by Shwapno

4.1 Customer Relationship Management (CRM):

CRM-Customer relationship management is the combination of practices, strategies and

technologies that companies use to manage and analyze customer interactions and data
throughout the customer lifecycle, with the goal of improving customer service relationships
and assisting in customer retention and driving sales growth.

How they do it?

 Membership card
 Social Media
 Telephone
 Website
 Telephone
 SMS
 Customer facing staff

Shwapno’s CRM systems compile customer data across different channels, or points of contact
between the customer and the company. In this way they get detailed information on
customers' personal information, purchase history, buying preferences and concerns.

4.2Interacts with customers by setting the product efficiency responsiveness &

other standers:
a) Efficiency: Shwapno purchase most of the product (which are less perishable) direct
from the manufacturer. So in this way they can sell the product with affordable price
 b) Responsiveness: Responsiveness: means how fast you response to the customer.
Shwapno sells mainly daily commodities item. So most of its products are to be
responsive.
c) Managing Perishability: Shwapno handles thousands of SKUs (Stock Keeping Unit)
including grocery products. There are fish, vegetables, meat and grains. This items are
perishable items. The word perishable means a certain types of products which has
fixed lifetime. When lifetime is over they must be discarded. Shwapno follows the
different strategy for perishables. These products are categorized into three types as
follows,

Table -01: Managing Perishability:

Type of Perishable Self-Life Sourcing Points Supply Strategy

Highly Perishable 24-36 hours Around Dhaka Daily basis
( Spinach, Meat ) (Savar, procurement and
Kawranbazar,) placement
Medium Perishable 48 hours Norshingdi, Jessore Daily basis
( Fish, bitter gourd, etc. procurement and
egg) placement

Slow Perishable Equal or more than 7 Where the items are Sessional buying and
(Potato, Onion) days affordable placement

4.3 Distribution Channel:

A distribution channel is a chain of businesses or intermediaries through which a good or
service passes until it reaches the final buyer or the end consumer. Distribution channels can
include wholesalers, retailers, distributors, and even the Internet. Shwapno follows different
distribution channel in Dhaka. Products are supplied from Central Distribution Centre (CDC) to
different distribution channel as follows,
 Table-02: Shwapno Distribution Channel Model

4.4 Shwapno follows Agile Supply Chain Management:

An agile supply chain is focused on speed, cost efficiency, responsiveness, flexibility, and
productivity in the production and delivery of goods. As Shwapno is selling daily commodities
so the service must be responsive it means the lead time is Shwapno is low compare to other.
In a Shwapno shop we can get variety of products but volume is low more ever the demands of
customer most of the time is unpredictable. The management of Shwapno gets real time data
through CRM system as agile supply chains rely on real-time data to help make decisions in
day-to-day operations. On the other hand Shwapno introduce home delivery service its means
of flexibility. As we know when lead time is short, demand unpredictable, low volume but high
variety products and service is flexible that case agile supply chain works best. Considering the
issues we can say Shwapno is using Agile Supply Chain Management strategy.
 5. Findings and Recommendation:

After assess the report we have found some issue for the Shwapno. Managing the distribution
of a retail chain which contains perishable items and uses direct distribution method. An effort
is taken to analyze the policy followed by this retail chain whether they cover profit margin.
Again, an alternate policy for distribution strategy has been suggested which can be worthy
based on cost aspect ratio. To get competitive advantage and to deliver quality service, top
management of these shops should try to adopt the following recommendations:

1. Variety of products is available in SHWAPNO but volume is low, they should establish
more warehouse with large capacity.
2. Demand unpredictable, they should open Research & Development center to survey &
analyze the market.
3. Lack of Outlets: Due to lack outlets in every city they cannot adapt fully home delivery
service.
4. Target Customer: They target moderate customer, they don’t focus high profile
customers.
5. Shwapno approach that is “কষ্টের টাকায়, শ্রেষ্ঠ বাজার” is that the stores may have a middle-
class image in customers mind.
6. Product Quantity control: For the product quantity they rely on farmers, Suppliers,
Intermediaries, Producer etc. they may not full control of product quantity.
7. Store Location: As all the leading retail stores are Dhaka based. Don’t have noticeable
outlet in any other districts of Bangladesh.
8. Company should increase marketing efforts and offering seasonal discount.
9. Strengthen existing resources, add complementary resources, and develop new
resources.
6. Conclusion:

The operation of the supply chain is a continuous process. Where distribution is considered
as a relay race. If one supply takes extra 1minute then the whole system will take extra
100minutes. So, from the planning phase to procurement to Distribution center to Logistics,
everything should go hand in hand. Otherwise, the whole chain will be broken down. For
the smooth operation of this kind of business, Distribution Center should be operated very
efficiently. That is why creating an appropriate distribution strategy is mandatory to
survive in the competitive market. Distribution management always addresses one thing
that, if any organization loses while they are purchasing then there is no point to extract
profit out of it. As the process is all about buying and selling to the ultimate consumer group
so setting parameters to ensure the quality of the product, as well as customer’s
satisfaction, is a must.
 Reference:

1. https://searchcustomerexperience.techtarget.com/definition/CRM-customer-
relationship-management
2. https://www.investopedia.com/terms/d/distribution-channel.asp
3. https://study.com/academy/lesson/what-is-an-agile-supply-chain-definition-
example.html
4. https://www.shwapno.com/

5, https://www.indiaclass.com/

6, http://carl.sandiego.edu/itmg350/types_of_supply_chain.htm

Thank You