ASSIGNMENT

Name of the Assignment: The inherent risks of supply chain management

in Furniture companies.

Submitted To
SHARFUDDIN LISAN
Adjunct Faculty

Submitted By
Name: Md. Mohaiminul Islam
Department: Finance & Banking
ID No: 18221027
Session: 2017-18

Bangladesh University of Professionals

Mirpur Cantonment, Dhaka – 1216
 Letter of Transmittal

29 September, 2019

Sharfuddin Lisan

Adjunct Faculty

Faculty of Business Studies,

Bangladesh University of Professionals.

Subject: Submission of the assignment on ‘The inherent risks of supply chain management in
Furniture companies’.

Sir,

With due respect I am reporting you the assignment you assigned us on the topic ‘The inherent
risks of supply chain management in Furniture companies’ for the course ‘Supply Chain
Management’ (ALD-2201). I have tried my best to do the research properly considering every
trifle thing you advised and make the report in a fascinating way.

I, therefore, eagerly believe that this assignment will meet your specification and

contentment.

Sincerely,

Md. Mohaiminul Islam

Roll: 18221027

Section: A

Department of Business Administration in Finance and Banking

 Acknowledgement

First of all, I would like to thank the almighty Allah for whose kindness I have managed
successfully to complete the assignment properly and thoroughly with a sound health.

Then, I would like to give the credit to our course teacher SHARFUDDIN LISAN. Without his
proper guidance and techniques, it would be tough for me to complete the assignment in a
proper way on time. I am also thanking him for assigning us the topic. Actually, this ensured
our dexterity enough regarding this area, that in real case scenario, how the whole system
operates.

Finally, I would like to thank our friends, seniors and different online sources. Without helping
of them, it was pretty tough to create the pattern and accumulate important information in
the assignment paper.

Thanks to all of you

The inherent risks of supply chain
management in Furniture companies.
Abstract: The purpose of this study is to the inherent risks of supply chain management in
furniture. The supply chain is a complex system consisting three or more commercial units
which directly include at least one connected product procedure, financial service, and/or
information from one source to a customer. In fact, in every company and factory, a cycle is
carried out from raw material producing stage to product delivery to final customer. To be
more precise, this cycle itself includes different rings such as provider, producer, and
customer. Actually, in creating present procedures, time factor should be reduced to satisfy
the customer more. In this study, data connected to a furniture company were provided
through supply chain management model. It also helps us to understand the supply chain
system of the furniture companies. We find the inherent risks of supply chain management in
Furniture companies. It will help us to reduce the risks & lacking of supply chain management
in furniture companies of Bangladesh. Furniture sector is one of the high growth potential
small and medium-sized enterprises (SME) sectors of Bangladesh. In a project study
conducted by (PKSF, 2013), it was reported that furniture sector has a growth rate of 19% per
year and contributes 0.29% in the GDP of the country.
Supply chain management (SCM) is the active management of supply chain activities to
maximize customer value and achieve a sustainable competitive advantage. It represents a
conscious effort by the supply chain firms to develop and run supply chains in the most
effective & efficient ways possible. Supply chain activities cover everything from product
development, sourcing, production, and logistics, as well as the information systems needed
to coordinate these activities.

The concept of Supply Chain Management (SCM) is based on two core ideas:

The first is that practically every product that reaches an end user represents the cumulative
effort of multiple organizations. These organizations are referred to collectively as the supply
chain.

The second idea is that while supply chains have existed for a long time, most organizations
have only paid attention to what was happening within their “four walls.” Few businesses
understood, much less managed, the entire chain of activities that ultimately delivered
products to the final customer. The result was disjointed and often ineffective supply chains.

The organizations that make up the supply chain are “linked” together through physical flows
and information flows.

Physical Flows
Physical flows involve the transformation, movement, and storage of goods and materials.
They are the most visible piece of the supply chain. But just as important are information
flows.

Information Flows
Information flows allow the various supply chain partners to coordinate their long-term plans,
and to control the day-to-day flow of goods and materials up and down the supply chain.
Introduction
Supply chain management (SCM) is one of the new scientific and applied issues which has
caused management development in the present century, industrially and commercially. In
the wood business, supply chain management (Supply Chain) is essential. Whether in
furniture, carpentry or construction, the sequence of processes and associated information is
very important.
Compared to other industries (automotive, electronics, …), the design and construction of
products is much simpler. However, because of the variety and multiplicity of options, the
information system is more complicated and requires business software packages.

If you buy a car, you cannot request a specific size, or you cannot choose between open doors
or sliding doors. In the furniture or woodwork, you have all these choices.

The problem for these industries is to have a flexible production tool, but above all an
information system to monitor the activity of design to installation, through the sale, supply,
manufacturing and delivery. Therefore, only one of business software packages and then
specific modules (e.g. 3D Configurator) ensure that supply chain.
The diagram below summarizes the various information used in the case of the furniture.
The steps in the diagram are showed the process of supply chain in furniture industry. The
inherent risks in supply chain management also include in the diagram.

- Major risks in the supply chain management of Furniture Industry:

Any change in the cost of raw materials will impact the whole supply chain.
Bad supplier relationships will impact the manufacturers.
Shortage of raw materials during production will impact the lead time in delivering
there questing goods to the distributors.
Uncertainty in consumer demands leading to more inventories held at the
retailer’s end.
Customer's dissatisfaction in transporting and unpacking the finished goods by the
retailers at the customer end.
They assess the entire supply chain to identify critical areas, including suppliers, logistics
service providers, ports and other potential risks that could disrupt the company's supply
chain.

Simply a supply chain in furniture industry

Cotton Farmer

Upholstery manufacture

Furniture Manufacture

Furniture Store

Final Customer
Literature Review

The companies are only a handful of the leaders that have reached the highest peak of supply
chain performance. The implication for other organisations is that any company can assume
a supply chain leadership position in its respective industry. If an organisation is committed
to supply chain excellence, the model for the specific industry can be defined and the
respective organisation should be able to improve market share.

Now here we discuss some solution of perfect supply chain management practice, to reduce
the inherent risks of supply chain management in furniture companies.

Companies in the furniture sector of the home decor industry encounter some unique
challenges with their order fulfillment supply chain. Due to size and bulk, warehousing
inventory can be costly and complicated to optimize, and shipping presents its own challenges
to protect inventory against damage that can be common without appropriate planning and
packaging. An expert partner for supply chain management can minimize and even eliminate
some of the risks associated with warehousing and managing home goods orders as they
navigate the supply chain.

Warehousing: Since storage of home goods requires a much higher footprint in terms of
warehouse square footage, many home goods manufacturers and retailers have found that
it’s more cost-effective to outsource their product warehousing. They can build warehousing
services to the home goods manufacturing and distribution industry, facilitating optimal
inventory management with strategic placement to minimize product movement and cost,
while maximizing efficiency and access.
Fulfillment & distribution: From standard shipping to white glove order fulfillment, the
criterion for home goods and furniture distribution differs greatly from the standards for
distributing other consumer goods. We can completely customize our fulfillment and
distribution services to meet our customers’ needs with regard to extra protective measures
to avoid damage during shipment, last-minute delivery, and more. We’re the home goods
industry’s ideal partner for fulfillment and distribution.

Packaging: Branding and protection are two vital aspects that home goods manufacturers
and distributors must address with their product packaging, and company offers the
necessary solutions. There packaging services cover everything from repackaging bulk
furniture inventory for individual sale, to adding security packaging such as foam to protect
the home goods products through transportation, to implementing branding elements for
recognition and marketing.
Kitting: For white glove order fulfillment or grouping furniture sets, home goods
manufacturers may require support from an expert partner to coordinate between the
warehouse and distribution station to ensure accuracy. In that situation company go for
kitting services to facilitate the accurate assembly grouping so that grouped product orders
are shipped complete and simultaneously. kitting services range in complexity, allowing to
customize this service completely to customers’ specifications.

Program Management: With a long list special shipping requirements, and other logistics
demands, program management is often an integral part of a successful supply chain for home
goods order fulfillment. Companies program management services offer the support,
communication, and dedicated resources to ensure accuracy and timeliness with every order.
We customize our program management to fulfil the unique needs of each customer, offering
the direct compatibility and full service that each home goods manufacturer or distributor
needs.
Reverse Logistics: Damages in transport or shipment, defective parts, and surplus inventory
are all potential occasions that result in returns. Whether we’re facilitating the reintegration
of your products back to the warehouse to optimize storage of your inventory assets,
coordinating repairs to restore defective or broken products for resale, or managing recycling
or disposal of irreparable items, companies reverse logistics services provide the returns
management support that our customers in the home goods industry require.

Transportation: Due to weight, bulk, and other factors, shipping and transportation are
expensive aspects of doing business in the home goods industry. Company can make a process
which helps to ensure cost-effectiveness and overhead management to minimize this expense
for our customers in this industry. Company can usually ensure delivery to almost any national
destination within two to three days. These strategically located distribution point help to
optimize fuel consumption and shorten transportation timelines as well.
Conclusion

After analyzing some factors and aspects of Furniture company, I can say that it creates a
strong position as it is successfully competing with the other business organization in
Bangladesh. Furniture companies fully utilize their capacity regarding procurement,
production and distribution.

Furniture Company need to hold retail outlets of their own with maximum executive dealer
outlet all over the country. They invest more money for their IT infrastructure to maintain
their supply chain effectively. Still they have more improvement plans in upcoming years, so
someday they might be the largest woods manufacturer in the country. Furniture organization
are currently poised at the edge of new paradigms and business processes that can
dramatically improve the performance of these organization.

Reference

• furninfo.com/furniture-industry-news-archive/12729.
• hollingsworthllc.com/industries-we-serve/furniture
• fgc-consulting.fr
• sakif-solaiman-68165588/?originalSubdomain=bd
• bracu.ac.bd/xmlui/bitstream/handle/10361/801/05304052.pdf?sequence=4&isAllowed=y
• fgc-consulting.fr/en/supply-chain-in-wood-and-furniture-industry
• icmab.org.bd/images/stories/journal/2018/Jan-Feb/04.Theories_of_Supply.pdf
• https://www.academia.edu/people/search?utf8=%E2%9C%93&q=furniture+company+suppl
y+chain+risks