In recent times super shop business is growing at a high rate in Bangladesh. But consumers

shopping experience is losing its attraction because of movement issues, traffic, convenience, high

price than the local markets. This case study address a new supply chain solution for super shops

in Bangladesh to meet up the current multi-channel consumer’s expectation.

The study focused on the supply chain management solution of super shops. A system dynamic

approach has been used for preparing the case. For completion of the case data have been

collected from both primary and secondary sources.

The shops deliver the customers a huge amount of goods and products of various types every day.

The supply process of the goods is really challenging. A supply chain management deals with

marketing, human resource, finance, operation, IT, and as a whole the regulator of total business

actions. Bangladeshi Super shops have in an average of 40 outlets located in Dhaka which carries

30000 varieties of products and deal with 2000 customers every day in every store.

Through the analysis of the seven main operation procedures (order, receiving, returning, clearing, payment, obtaining business and searching and marketing operation) in super shops supply chain we found some problems and they are shown below:

All the super shops are Dhaka based.

Lack of online shopping experience

Lack of customer relationship management

It is termed that the super shops only referred to the top class people of the society.

Lack of automation in super shops

Lack of waste management and free return facility.

Poor IT design for SCM.

The total supply chain for super shop is shown below by three individual sections. The sections are

Sourcing design

Company’s internal database management

Supply to the customer

Fig: Sourcing chain

We will source agro disposable products like fish, vegetables, and other grocery items from local market to eliminate the middle men like karwanbazar of Dhaka (Ex. Agora, Swapno) as they make a huge profit from there. Here comes a great deal of supply chain solution and we are proposing that we should collect it from the local market by company’s agents and transportation in order to

• Uphold the quality.

• Reduce total cost.

• A third party is a threat as it can break the

supply chain process.

• Reduce customer or supplier contact.

• Negative reputational impact (Ex. NIKE in 2008).

In our supply chain we will have agents who will bring the suppliers to the procurement department attached to the warehouses. Procurement dept. will select the quality product for warehouse storage and will pay for that. The sourcing procedure will be followed up through assessment, selection of agents, sourcing planning and analysis by procurement department.

Required tools (Sourcing):

Total 5 warehouses in Chittagong, Sylhet, Khulna, Mymensingh, Rangpur.

2 tracks per warehouse. Total 10 tracks.

Men and machine for maintenance of these warehouses.

From these warehouses the products will be transported to Distribution center or in case of agro

products like vegetables, fish meat will be directly transported to the outlets.

Warehouse’s inventory managing plays a great role in supply chain. Inventory exists in the supply chain because of imbalance between supply and demand. Inventory impacts the assets held, the costs incurred, and responsiveness provided in the supply chain. There are certain things in inventories we should remain concern they are:

Cash to cash cycle time in inventory.

Products with more than specified number of day’s inventory.

Average safety inventory.

Seasonal inventory.

Fraction of time out of stock.

Safety inventory. We will try to minimize the safety inventory as it is a key to the success of any supply chain is to figure out ways to decrease the level of safety inventory carried without hurting the level of product availability and for carrying out that we have to keep in mind two factors,

The uncertainty of both demand and supply.

The desired level of product availability.

Fig: Internal Database Management Company’s data management will be totally automated. We will manage company’s data by ERP that will be integrated with ISCM, CRM, SRM modules. ERP will be designed according to the data

flow mentioned above. ERP will be connected with a data exchange server. That server will manage the data receiving and sending to other systems as required. Two way data flow system (sending and receiving) will be connected with warehouses, outlets, distribution center. But call center and website will be connected to server for receiving data as product order. Warehouses, outlets and DC’s ERP users will use their system for balancing their required and supplied products from central distribution center. ERP will get consumers data as order of products in two ways, i.e. website and call center. Website will take online orders. Internet users will order for their product through website. Through our website the variety and list of the products will be shown to customers and they will be able to see and choose their products from there easily. Website is integrated with ERP. Call center is another mean of making product order. It is designed for people who can’t use internet. Call center will take order from direct call and then order will be transferred to the server and ERP by the call center managers.

Fig: Data flow and product flow through online/call center We will also have similar online customer care for those region where we have only inventories or warehouses.

Required tools (Database management):

ERP software

Website

An office space for call center with furniture and other equipment.

60 person to receive order of product from the consumer through direct phone call.

15 persons for others managerial and maintenance work of call center.

60 computers.

As already introduced Distribution Center, Logistics center will use advanced information technology and automated systems including automatic transmission, automatic pallet lifts system, automatic sorting handling system, and the loading and unloading height adjustment plate for cargo platform which will significantly improve Super shops distribution and overall operating efficiency. Super shop will also adopt wireless handheld terminals, bar code reading technology and wireless signal transmission technology and other hi-tech on such main links as receiving, display, warehouse transfer. With real-time handling the passers-delivery vehicles operation it will improve the discharging efficiency of the shop.

The online ordered products will be distributed by our agents for this reason we will have to have 20 persons more in each of our outlets and warehouses. It will be distributed through Milk run buyer location transportation process in 3 shift a day. In order to increase more customer satisfaction each of the minivans will contain a refrigerator so that the agro products remain fresh.

We will have a premium membership service in our super shop. These premium members will get

their certain amount of selected products in each time interval, they can choose time interval of

7 days 15 days or 1 month. They can register as our premium member through outlet call center

or any channels. Their desirable products information will flow to the nearby warehouse or outlet

and we will deliver the products automatically to the consumers with our transports in that time

interval. We will give them these follows facilities:

They will have free return ability

We will keep notifying them through sms about the discounts and fresher product

available in the stores.

We will give them premium cards on full filling some requirements they are,

First of all they have to register as a premium member.

They have to buy products of at least 50 $ for each month.

Fig: Information and product flow for premium member (with free return ability)

Required tools (distribution to customers):

We will have 10 outlets outside the Dhaka.

For distribution through online for existing and new outlets total amount of

transportation we will need about 150.

We will incurred maintenance cost of outlets and transports.

Costing sectors Costing Factor Cost in 1year Cost in 5 years

Warehouses

Installation cost(6 warehouses) $4.2 million $4.2 million

Maintenance and overhead cost

(15%of set up)

$ 0.60 million $ 3.0 million

Transportation cost(12 trucks for 6

warehouses)

$ 0.60 million $ 0.60 million

Maintenance and overhead cost of

transportation

$ 0.09 million $ 0.45 million

Quality control department

installation cost

$0.75 million $0.75 million

Quality control department

maintenance

$ 0.113

million

$0.563 million

Total cost in Installation of Warehouse

$9.563 million

Costing

sectors

Costing Factor Cost in 1year Cost in 5 years

Hardware $.5 million $ 0.5 million

Software licenses(70 users) $90000 $0.45 million

ERP

Software

Implementation $0.12

million

$0.60 million

Overall maintenance $21000 $0.11 million

Total ERP cost $ 1.66 million

Costing sectors Costing Factor Cost in 1year Cost in 5 years

OUTLET

Set up cost (by rent) $90000 $ 0.45 million

Automated mixed skilled pallet

solutions

$.50 million $ .50 million

Overall maintenance $ 0.075

million

$0.375million

Total outlet setup cost $1.325 million

Costing

sectors

Costing factor Cost in 1 year Cost in 5 years

Cost incurred

in Installation

of online

facility

Online facility $6250 $.15 million

Call center set up $1 million $ 1 million

Maintenance $0.09 million $0.45 million

Total cost incurred in Online Facility set up $1.60 million

Distribution

from outlet to

consumer

Transportation 5 covered van in 1

outlet 250 covered van for 50 outlets

(old and new)

$4.81 million

$4.81 million

Maintenance $0.70 million $3.5 million

Total cost in transports for distribution $8.31 million

So the total cost incurred while implementing this supply chain solution for five years is

=$9.563 million+$1.66 million+$1.325 million+$1.60 million + $8.31 million

=22.458 million

Super shops may lose their market to others who are providing online shopping facilities.

In our supply chain we have come out with online shopping experience for consumers

side by side we installed call center for those people who are unable to response through

online and these facility will get us much more consumers than the super shops presently

have.

If we try to have home delivery option for our consumers the major problem we faced is

the price become automatically high. So for sustaining in this competitive market we

have eliminated middle men for sourcing. That will help us keeping our price low

facilitating and capturing consumers with cheaper priced products than other marketers.

We have tried to expand our business and have consumer outside of Dhaka. Where we

have installed warehouses we established an outlet there also. By these we will be able

to make more profit which will help us in case of making profit and subduing warehouses

cost.

We have ensured premium membership service for our premium consumers by giving

them facilities like free return ability, occasional price discounts and always keeping

those notifying about our special offers and with this service we will have more fixed

trusted consumers.

As we tried to cover up whole Bangladesh through establishing warehouses, outlets

while sourcing it will create a brand value. Therefore if we try to expand the business in

future this brand value will help a lot.

Now, the Super shops are still in its development phase in our country and we think the key of improving their competitive capability is improving themselves with establishing integrated Supply Chain. As in our country SCM is newly implemented while suppliers are still using the old system’s style to communicate, it should enforce the collaboration of the supply chain. Aimed at the feature of Bangladeshi Super shops we propose that we should pay attention to several problems when will implement the supply chain solutions. (1) Break the traditional concept and establish the consciousness of win-win (2) Pay attentions to belief, promises and flexibility protocol (3) Enforce the core competitive capability (4) Know and adopt collaboration technology correctly (5) Recombine the supply chain at the right time