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Supply chain management of RAK ceramics Bangladesh ltd.

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Supply chain management of RAK ceramics Bangladesh ltd.

  1. 1. Welcome To Our Presentation 1
  2. 2. 2 Participants:Participants: Mehedi hasan Roll No: 159 MD.Abdur Rakib Roll No: 151 Md. Masudur Rahman Roll No: 147 Sheikh Abdullah al mamun Roll No: 149 Arafat Abdullah Roll No: 71
  3. 3. Topic:Topic: Supply chain management of RAK ceRAmics BAnglAdesh ltd. 3
  4. 4. 11/30/15 OBjectives  An over view on RAK Ceramics  Overall value chain process of RAK Ceramics  Primary activities of RAK Ceramics (like starts from supply chain management to delivering products to the end user)  Support activities of RAK Ceramics.
  5. 5. 5 Mehidi Hasan Roll: 159
  6. 6. Company overview RAK ceramics UAE: RAK a global ceramic multinational is in the Ras Al Khaimah. It is a public shareholding company with H.H. Sheikh Saud Bin Saqr Al Qassimi. He is the Crown Prince & Deputy Ruler of Ras Al Khaimah as the Chairman and Dr. Khater Massaad as the Chief Executive Officer. It has worldwide sales of over USD one billion. To build a world standard for quality and beauty, the company basically starts manufacturing. They start their first production in 1991. Within 19 years it became a world class organization.
  7. 7. Company overview RAK Ceramics (Bangladesh) was incorporated in 26 November, 1998. It is a joint venture company with UAE. It was first incorporated as a public limited company. Now it is public limited company and changed its name from RAK Ceramics (Bangladesh) Private Limited to RAK Ceramics (Bangladesh) Limited on 10 June, 2008. They are now manufacturing ceramics tiles, bathroom sets and all types of sanitary ware
  8. 8. Logistics activities 1. Transportation 2. Inventory management 3. Order processing 1. Warehousing 2. Purchasing 3. Packaging 4. Materials handling Primary activities Secondary activities
  9. 9. Inbound logistics:  Raw materials Acquisition Clay Color Pigment Cerfrit
  10. 10. 10 Abdur Rakib Roll: 151
  11. 11. Raw material Suppliers: 90% of raw materials of RAK ceramics is are imported from outside the country. The main raw materials supplier of RAK is Global Business Association (GBA) and the supplies are dealt in ordering process. GBA is a sister concern of RAK and it also supplies raw materials to other company’s also. RAK places an order of the list of raw materials and GBA supplies the raw materials. Cerfrit a company from Spain supplies “cerfrit” for using in colors. Color pigment is supplied by GBA which is collected from Italy.
  12. 12. Shipment of Raw materials (Transportation): After placing the order to GBA, raw materials are sent by ship to Chittagong port and sometimes in Naryanganj from Chittagong port. From there Cargo trucks are used to carry the clay to their production plant. Spare parts for their machineries are collected from “SACMI” which is a giant of manufacturing machines and completing plants and it’s an Italian company.
  13. 13. Shipment of Raw materials (Transportation):
  14. 14. Transportation cost:
  15. 15. Inventory Management: The inventory management job is mainly assigned to Store department and accounts department. Accounts department is in charge of raw materials inventory. Raw materials are purchased and stored in the amount of 6 to 7 months of production. Store department is in charge of the management of finished goods inventory. RAK takes extra precautions for not damaging or wasting raw materials and extra security for preventing the risk of theft
  16. 16. Inventory Management (continued): RAK ceramics have the most advanced production facility for producing tiles and sanitary ware. They have one production plant for tiles which covers all the production activities. RAK also have a Design Development Program under R&D department which helps to create new design for the customers. In this department, RAK have invested a huge amount to gain advantage over competitors in designing. They are using SACMI technology in their production plant which comes from Italy.
  17. 17. 17 Masudur Rahman Roll: 147
  18. 18. OutbOund LOgistics Outbound logistics deal with distribution of finished goods.  Pull and Push Demands of finished inventory: Rak has push demand philosophy. Normally it determines a steady demand of tiles. According to demand, it supplies tiles to 38 dealer, 38 dealers supply to various sub-dealers and to customers. RAK use forecasting models like moving or weighted moving average to determine their demands. Moreover it uses pull strategy to supply industrial users.
  19. 19. Distribution Process:  RAK ceramics follows simple distribution process to get products to end users by minimizing complications. They follow 4 level distribution channels which consist of manufacturer, dealers, sub dealers, consumers.
  20. 20. Distribution Process:  RAK follows selective distribution which means they distribute products only few distributors. They don’t have their own distribution channel; they use dealers to distribute their products. Currently RAK has 38 dealers all over Bangladesh.
  21. 21. Distribution Process: They directly control their dealers through 4 state managers in six divisions. Dealers are allowed to appoint sub dealers to sell RAK’s product but RAK does not control them.RAK ceramics distribution process starts from stock department. Stock department stores finished goods in the warehouse. Dealers are informed from the warehouse that their goods are ready for delivery and they arrive to receive the delivery from warehouse for distribution.
  22. 22. Supply of finished goods (Transportation)  RAK does not have its own transportation mode for distribute tiles. 38 dealers of whole country uses their own transportation mode. Sometimes it distribute tiles to industrial users using rented truck. It determines transportation cost 4 taka per square feet
  23. 23. Order cycle: RAK has a unique order cycle procedure. It has weekly demands of more than 4,00,000 square feet. That’s why it keeps 2,20,000 square feet safety stock(Calculation is given to next slide). When orders come on hand, it takes 1 or 2 days to process them. Dealers keep 1 day to take inventory to their warehouse. For arriving to customers, it takes another 3 days. So total order cycle time is 7 or 8 days. 1 day Retailer Outlet Dealer Dealer RAK Warehouse 1 day 1 day 1day 3 day Factory 0day 5 days
  24. 24. Safety stock calculation  Average daily demand = 57,143 sqrf per day (4,00,000sqf / 7)  Maximum daily demand = 84,580 sqrf (recorded in 12 October, 2014)  Lead time = 8 days  Safety stock = (Maximum Daily Demand − Average Daily demand) × Lead Time = (84,580 – 57,143) × 8 = 2,19,496 ~ 2,20.000 sqr feet
  25. 25. Logistics product Logistics products three types: convenience product, shopping product and specialty product. Tiles are shopping product as they are purchased after careful investigation and brand comparison. For this reason, RAK makes all information about tiles available on its website
  26. 26. Pricing strategy:  RAK follows uniform pricing strategy. It uses the term ‘maximum retail price (MRP)’ to sell in same all over the country Warehouse: • RAK has two warehouses at Gazipur beside its production house. One for storing raw materials and rest is for storing finished goods. Warehouse is established to conduct indirect sales. Goods are stored into warehouse according to the distributors’ requirement. Supply the goods to the distributors by checking invoice. The local distributor that is the distributors of Dhaka City collects products by their own arrangement
  27. 27. 27 Abdullah al Mamun Roll: 67
  28. 28. Materials handling  In Gres Procellanato (porcelain / fully vitrified tiles), the company produces hundreds of glazed and unglazed porcelain, covering finishes such as polished, unpolished, rustic, Slate etc. In Bangladesh with three fold expansion Drive Company has reach capacity to produce over 8 million square meters of tiles per annum & has over 1000 different tiles models recipe
  29. 29. Latest equipment & technological application: Some unique patterns and finishes: are acquired through new technologies such as Roto Printing, Double charge, Granitech etc. Some unique “antique style” finishes and many specialized finishes in tiles have been possible due to such advanced Gres Procellanto technology
  30. 30. Modern European machinery: Computer controlled guided vehicles transferred semi finished goods from station to station, robots picked and placed semi finished tiles in many production steps as well as in sorting and packing the finished tiles, skilled technicians in sophisticated control rooms monitored raw materials in blending mills, wet and dry grinding vessels, presses, kilns, drying and cooling cycles, and many other operations
  31. 31. Ceramist R& D activity:  Active team of ceramist to challenge customer demand & device cost effective input recipe solutions Recently RAK introduced Robotic Sprayer for glazing on the surface of Tiles. Moreover, Double Flushing, Soft Closing Hinges, Spreader of urinal bowl are the exclusive accessories. RAK is also producing all type of seat & cover ourselves in our factory
  32. 32. Marketing, sales and service:  RAK ceramics is the market leader in ceramics production in Bangladesh.RAK ceramics mainly emphasize on commercial production for meeting domestic demand but they also have industrial production which is not in massive condition due to low demand and huge affordability issue by industries in Bangladesh. But if a company places order for industrial tiles they fulfill their demand. RAK have a good marketing department for marketing which is in the main headquarters in Uttara. RAK ceramics sales force is mainly used to convince owners of industry firms to use RAK ceramics because industry productions of ceramics product have high durability and price.
  33. 33. Marketing, sales and service:  To provide good support to these buyers, the sales force is mainly used for any complaining and ordering and also providing important information. The process mainly starts from industry placing order with specifications to dealers of RAK, sales force contacts with the buyer to provide more specific information and details along with pricing and choice, sales force confirms their specifications and sends it to RAK. RAK ceramics go to the production and send their product via dealer to the desired person. This is the role of sales force which plays a vital role in selling industrial products. RAK ceramic doesn’t use any direct selling in marketing, if a customer place order from RAK head office where they have a showroom, then instead of selling directly to them RAK provides reference of nearby dealers to their location for providing convenient support. As it is mentioned before, RAK ceramics uses sales force for industry buyers and dealers reference for normal customers.
  34. 34. Marketing Research and Planning:  RAK display new design of tiles and sanitary wares in their main head office for getting feedback from customer about the new design. This new design mainly is the reflection of ongoing global trend around the world or the new design of RAK UAE which is a great success worldwide
  35. 35. Advertising and Promoting:  RAK ceramics doesn’t follow massive advertising technique for promoting because of their superior position in the market and huge demand helps to promote their product itself. But RAK still do some advertising via billboards and some promotional activities in Boishakhi TV by sponsoring some shows, because the Managing Director of RAK ceramics is the 25% owner of Boishakhi TV
  36. 36. Support from Dealer:  RAK ceramics have 38 dealers around the country which are handpicked by them after judging their portfolio. These dealers provide great support to RAK for capturing and enabling the product to get available in market. RAK ceramics tries to give full support on their activities for making them more flexible and dealers also provide support for making the product more available in market. From RAK’s point of view, by the support, help and loyalty from these dealers have helped them to spread the product in whole country and they also played a huge role for their current market position
  37. 37. Service:  RAK ceramics doesn’t have a specialized service center for customers because it isn’t required in that extend. But they provide full support to the customers by providing information and details of tiles before purchasing to avoid deceptive selling

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