Docsity Supply Chain Management System of Pran Foods LTD

Supply chain management
system of PRAN Foods Ltd.

Supply Management
University of Akron
14 pag.
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Abstract:
The supply chain is the process of getting a product or service to the customer through a network
of companies and suppliers. In e-commerce, supply chain management (SCM) is the backbone.
Ninety per cent of the world's trade is conducted through it. The supply chain includes all the
processes and components related to the product from their collection to finalisation. Effective
supply chain management solutions reduce cost, waste, and time in the production cycle. To
achieve a competitive strategy and improve the supply chain performance, a company must
examine the logistical and cross-functional drivers----facility, inventory, transportation,
information, sourcing, and pricing. Managers must make tradeoffs between efficiency and
responsiveness for each driver. Operating from a few sites centralising tasks can increase
efficiency. It is possible to improve responsiveness by stocking products in multiple locations close
to customers. Stocking inventory in a few key areas could also result in economies of scale and
cost savings. Transportation modes like a truck, air, ship, etc., can help with responsiveness. To
make the supply chain more efficient and responsive, information is essential. Sourcing is the
process of acquiring the appropriate materials in the right quantities. Customers' expectations are
also shaped by their prices for the items they buy.

Table of Contents
Abstract: ........................................................................................................................................................ 1
Introduction:.................................................................................................................................................. 3
Importance of Supply Chain Management: .................................................................................................. 4
Objectives of the study: ................................................................................................................................ 4
Broad Objective: ....................................................................................................................................... 4
Specific Objectives: .................................................................................................................................. 4
Supply Chain Management: .......................................................................................................................... 5
Divers of Supply Chain Management ........................................................................................................... 5
Logistical Drivers: .................................................................................................................................... 6
Facilities: ............................................................................................................................................... 6
Inventory: .............................................................................................................................................. 6
Transportation ....................................................................................................................................... 6
Cross-functional Drivers:.......................................................................................................................... 7
Information ........................................................................................................................................... 7
Sourcing ................................................................................................................................................ 7
Pricing ................................................................................................................................................... 7
Overview of PRAN Foods Ltd...................................................................................................................... 8
How to manage SCM drivers by PRAN Foods Ltd.: .................................................................................... 8
How to achieve strategic fits ....................................................................................................................... 10
Findings ...................................................................................................................................................... 11
Recommendations ....................................................................................................................................... 12
Conclusion .................................................................................................................................................. 12
References ................................................................................................................................................... 13

Introduction:
"The supply chain" refers to the process of getting a product or service to the customer through a
network of companies and suppliers (‫ر ضوي‬, 2020). The supply chain is a dynamic management
system involving manufacturers, suppliers, transporters, and retailers directly or indirectly to fulfil
the customers’ requests (Sunil Chopra, 2003). It is the constant flow of the company's
information, products, and funds in different stages.
SCM manages the complete cycle from the Raw material to the end delivery (Prajapati, 2016).
The supply chain forms a pair through delivering products, providing information and funds. The
flow of goods begins with the manufacturer and proceeds through the supplier, transport agents,
warehouses, retailers, and customers. And the flow of monetary value starts with the customer and
proceeds to the retailer, warehouses, transport agents, suppliers, and manufacturer (Bijawat,

2019). As a result, of upstream and downstream, what is more, links in the different working
processes and activities, supply chain management creates value in the form of products and
services delivered to the end consumer. Quantitative and qualitative measures are generally used
to evaluate supply chain performance (such as order-to-delivery lead time, supply chain response
time, flexibility, resource utilisation, delivery performance etc.). The supply chain network has a
direct relationship with quantitative performance. As a result of an efficient and effective supply
chain network, lead times and prices can be minimised, and product quality and responsiveness
can be enhanced (Azim, 2016).
Importance of Supply Chain Management:

Supply chain management (SCM) is essential for an organisation to be more efficient. In e-
commerce, SCM is the supply chain that drives a significant proportion of the global economic
chain. 90 per cent of the world's trade is conducted through it. Because of this, an efficient supply
chain can help:
 To reduce operating costs

 To enhance the financial situation.
 To increase the country's economy
 To improve the user experience
 To ensure human survival
 Possibilities to create jobs, and so forth (Answers, 2018).
To ensure that every operation in the supply chain runs smoothly, the manager must have a wide
range of skills and expertise. If a single chain fails, its cost will rise, lowering its profitability. So
supply chain management is the most crucial aspect of any company.
Objectives of the study:

Broad Objective:
To know how to become the largest company, achieve responsiveness and efficiency in the supply
chain, and the supply chain management process of PRAN Foods Ltd. Company in Bangladesh.
Specific Objectives:
 To recognise the different stages of supply chain
 To learn how to minimise cost

 To know the decision regarding logistical functions in the supply chain of PRAN Foods
Ltd.
 To understand the cross functions in the supply chain of PRAN Foods Ltd.
 To notice the findings.
Supply Chain Management:

The design, planning, execution, control, and monitoring of supply chain activities to create net
value, build a competitive infrastructure, leverage global logistics, synchronise supply with
demand, and measure performance globally is known as supply chain management (Bokhari,
2020). It includes all the processes and components related to the product from their collection to
finalisation. It is used to maximise the efficiency level of the work and do it more accurately.
Effective supply chain management systems minimise cost, waste, and time in the production cycle
(MyBillBook, 2019).
Divers of Supply Chain Management

The performance of the supply chain is determined by its drivers. Managers must make tradeoffs
between efficiency (cost) and responsiveness (Ora, 2018). To achieve a competitive strategy and
improve the supply chain performance in terms of responsiveness and efficiency, a company must
examine the logistical and cross-functional drivers. The supply chain includes raw materials, work-
in-progress (WIP), and finished commodities.

The following are logistical and cross-functional drivers of supply chain management in the
picture:
Drivers of Supply Chain Performance
Logistical Drivers
• Facilities
• Inventory
• Transportation
Cross-functional Drivers
• Information
• Sourcing
• Pricing
Logistical Drivers:
Facilities: Facilities refers to where the supply chain products are either stored, assembled, or
fabricated. Efficiency may be gained by operating from fewer locations and centralising operations
in common areas, which reduces responsiveness. The facilities’ location, capacity, and flexibility
substantially impact the supply chain's performance (Googlesir, 2021).
Inventory: Inventory refers to all raw materials, work in progress, and finished goods in a supply
chain. Many products can be kept in stock to ensure responsiveness. It is possible to increase
responsiveness by stocking products in multiple locations close to customers and readily available.
Inventory levels of all items, especially those that do not sell as frequently, should be reduced for
efficiency in inventory management. Stocking inventory in a few key locations could also result
in economies of scale and cost savings (Dahiya, 2020).
Transportation: Inventory moves from point to point in the supply chain by using transportation
facilities modes like a truck, air, ship, etc. (Googlesir, 2021). A quick and flexible form of
transportation can help with responsiveness. Many organisations that sell products through
catalogues or the Internet may give high levels of responsiveness by employing carriers to deliver
their goods, which can typically be done within 24 hours. FedEx and UPS are two companies that

can provide pretty responsive transportation services. Transporting products in larger batches and
less frequently can increase efficiency. Ships, trains, and pipelines can all be incredibly efficient
forms of transportation. Transportation can be more efficient if it originates from a central hub
facility rather than multiple branch locations (Scjunction, n.d.).
Cross-functional Drivers:
Information: In the supply chain, data consists of analysis relating to the supply chain's facilities,
inventory, transportation, costs, pricing, and customers. All other drivers are affected by
information, making it the most critical driver in supply chain success. High levels of
responsiveness can be achieved when companies collect and share accurate and timely data
generated by the operations of the other four drivers. Information is essential to make the supply
chain more efficient and responsive (Sunil Chopra, 2003).
Sourcing: Another critical aspect of supply chain management is sourcing. The source refers to a
specific area or business from which items are acquired. Sourcing is the process of purchasing or
obtaining the appropriate materials in the right quantities, in the proper condition, at the right time,
and for the right price from the right provider. There is a difference between the terms outsourcing
and sourcing. Outsourcing is a word used to describe the process of obtaining parts, components,
assemblies, and other services traditionally performed within a company from outside vendors
(Googlesir, 2021).
Pricing: The process of determining how much to charge customers for its goods and services is
known as pricing. Pricing has an impact on the price-sensitive consumer group. Customers'
expectations are also shaped by their prices for the items they buy.
As a result, price impacts supply chains regarding the needed level of responsiveness and the
supply chain’s demand profile. Firms serving this client group can organise their supply chains to
be highly efficient (i.e., low cost), but at the sacrifice of some responsiveness. On the other hand,
other forms may utilise pricing that fluctuates depending on the customer's preferred response
time.
In such instances, the company will adjust its price to reflect the responsiveness or efficiency
demanded by consumers and organise its supply chain to accommodate the two demands.

Overview of PRAN Foods Ltd.:
PRAN-RFL is a conglomerate company. Retired Major General Amjad Khan Chowdhury
established PRAN Company. PRAN means “Programme for Rural Advancement Nationally”, in
1981, he founded PRAN to produce agro products. It is
currently the most significant food & beverage brand in
Bangladesh. As of now, PRAN has more than 200 food
products in ten distinct cats: Juices Juices, Drinks, Mineral
Water, Bakery, Carbonated beverages, Snacks, Culinary,
Confectionery, Biscuits & Dairy (2018). PRAN launched a
subsidiary business in the United Arab Emirates in 2003, with
India, Oman, and Saudi Arabia as its primary markets. PRAN
goods are frequently sold to 106 countries across the world. This firm now employs over 84000
people. To end poverty, they believe that more jobs should be created. Their goal is to make their
product available in every corner of the country, allowing any client to consume it (Skib, 2014).
How to manage SCM drivers by PRAN Foods Ltd.:

The supply chain drivers, which we mentioned previously, interact to determine PRAN Food's
supply chain performance. If and how strategic fit is achieved across the supply chain is determined
by the structure of these drivers. Now we'll look at the influence of each of these supply chain
drivers on PRAN Foods' supply chain performance.
Facilities: The term "facilities" refers to production areas and warehouses. PRAN has various
warehouse facilities all over the country like Ghorashal, Cumilla, Vulta, Natore, Chittagong,
Khulna, Sylhet, etc. The factory is where the production and processing operations take place. In
addition to addressing the cost of manufacturing, transportation and supplies, these storage
facilities are strategically located near key markets. PRAN relies on a highly responsive service
(Wikipedia, n.d.).
Inventory: In a supply chain, inventory includes raw materials, work-in-progress, and finished
goods. PRAN Company focuses on maintaining an amount of safety stock per the market’s needs
to keep the supply chain running smoothly (Studymoose, n.d.). A large quantity of inventory is

held in PRAN's storage facilities for this exact reason. PRAN’s inventory is being reduced to
decrease expenses, but the company must maintain a certain inventory level.
Even the dealers and distributors of PRAN maintain just modest inventories. Although it adds a
tiny amount to the cost, the wide availability and sales offset these costs to some extent.
Transportation: we know that transportation systems are two types which are inbound and
outbound transportation. Inbound transportation of PRAN Company collects and carries raw
materials from different locations to the warehouse. In the outbound transportation systems of
PRAN Company, managers should choose different types of distribution networks to distribute
PRAN Foods.
PRAN uses its transportation (Last-mile delivery channel) to supply its products from the
warehouses to the different locations over the country that help increase responsiveness within its
supply chain and use other transportation agencies (Skib, 2014).
Information: Information is another supply chain system driver that significantly impacts supply
chain performance. PRAN Company requires relevant information on customer satisfaction with
products and comments on any product ideas. Customers place an order to the retailer or
distributor, and they provide the information regarding the products to the manufacturer then
begins their production. In addition, PRAN Company may also collect information through online
marketing.
Sourcing: There are two methods for sourcing. These are outsourcing, in-house sourcing.
Outsourcing is generally used in non-food products, garment products, technological products, etc.
PRAN maintains the quality of products. They operate outside transport agencies like Bashundara
logistics, Bismillah Transport agency, etc., when they collect their raw materials from remote areas
in the country.
Furthermore, Fruits and vegetables are harvested from Farias or Aratdaars in North Bengal's rural
regions. Different suppliers in Dhaka provide essential food colours and other chemicals.
Pricing: Price is a sum of money that pays to have or obtain the products and services. Price is
only one driver of supply chain systems that relates to generating profits, but other drivers relate

to cost. PRAN Food emphasises a cost-based pricing strategy. The wholesalers pricing strategy of
PRAN is shown below:
Wholesaler prices= given price + Labor cost + Transportation cost + Storage cost + other cost +
Profit margin.
PRAN Food Company has a large variety of products and many products with uniform prices for
the given products. They achieve both responsiveness and efficiency in the supply chain.
How to achieve strategic fits

PRAN Foods Company’s competitive strategy is reasonable and fixed price products for a wide
variety of mass consumption, maintaining labour productivity, and increasing sales. For
distributors and retailers, they provide discounts to buy in bulk as incentives, deliver products
using an efficient supply chain and maintain an adequate level of responsiveness. To reach
responsive and efficiency, PRAN must make the right combination between the logistical and
cross-functional drivers, which are visually shown below:

A PRAN start with its competitive strategy decides an efficient supply chain to reach the
performance level supply chain strategy and maximise supply chain profits. How PRAN can
achieve strategic fit with drivers of supply chain performance which is discussed below:
Facilities: With the facility, PRAN has various warehouses at many locations to be achieved
responsiveness.
Inventory: PRAN Company maintains a responsive supply chain using the inventory drivers by
keeping the safety inventory.
Transportation: PRAN company uses distributor storage with customer pickup and retail storage
with customer pickup deliveries y the channel to serve their products to the ultimate customers.
Information: PRAN is taking advantage of the competitors by utilising accurate information in

the supply chain. The company uses this driver to be responsive and bring other driver cost
decreases to be achieved efficiency.
Sourcing: PRAN seeks out the most efficient sources for each product it offers in the sourcing
driver.
Pricing: PRAN maintains an efficient supply chain for the pricing drivers because the price is
reasonable not fluctuate with product variations.
Findings
 As a result of this effort, we have gathered knowledge regarding PRAN from two sources
like the company itself and the general consumers.
 Recognised the importance of supply chain activity.
 Supply chain management significant impact on the success of the organisation.
 Each stage adds value to the supply chain management system.
 PRAN strictly maintains the logistical and cross-functional drivers in its production and
holds from collecting raw materials until arriving the final goods at the ultimate customers.
 PRAN achieves the strategic fit through using the supply chain drivers.

Recommendations
I have some suggestions for the overall company.
1. Internal SCM training: A skilled SCM constantly works swiftly and makes the best
decisions. As a result, I believe that every SCM should get training.
2. Build a proactive plan and roadmap: Before starting work, make a plan for working,
how and which to work with suppliers, manufacturers, and operations managers, and how
to reach the ultimate goal.
3. Comparison of logistics mechanisms: Before shipping, one must compare both
shipments to see better. The logistics system, such as air, sea, and road, are all vital, but
they are dependent on the kind of materials or agencies used to produce commodities. So,
if a firm earns a minimal profit, each comparison is required.
4. In-house strategy: PRAN should have an open invitation policy in its factories so that
clients can see how safe and clean their procedures are.
Conclusion
The supply chain can be defined as the network that manages the flow of goods and services,
including transforming raw materials into the finished goods and then distributing them to the final
consumer. Essential components of the supply chain are sourcing, planning, making delivering,
and returning. For any company, to be successful in the marketplace, it needs to have an efficient
supply chain to deliver goods or services to customers in time. PRAN Foods is the leading food
and beverages manufacturing company, and it believes that customers should enjoy what they eat
and provides the best healthy products to customers.
As we all know, the supply chain is all about relationship management, and PRAN Company has
a supply chain that is innovative, reputable, analytical, etc. which ultimately helps in business
improvements and efficiency. The company had three ways available : sea, road, and air
transportation of its goods to customers, b,ut PRAN has chosen sea freight to aim at reducing its
costs and earning more profits. In that way, the supply chain of PRAN is being considered more
effective.

References
(2018, January 24). Retrieved from https://www.youtube.com/watch?v=v4kgRqpnIYA
Answers. (2018). Retrieved from answers.com:
https://www.answers.com/Q/What_is_the_importance_of_supply_chain_management
Azim, A. (2016). “Process of Supply chain management (SCM). BRAC University, BRAC
Business School. Retrieved from
http://dspace.bracu.ac.bd/xmlui/bitstream/handle/10361/10708/15382007_MPSM.pdf?se
quence=1&isAllowed=y
Bijawat, G. (2019, August 13). Quora. Retrieved from quora.com:
https://www.quora.com/What-is-Supply-Chain-
Management?q=what%20is%20supply%20chain
Bokhari, R. (2020). Operation Management.
Dahiya, S. (2020, July 15). Quora. Retrieved from quora.com:
https://www.quora.com/bookmarks
Googlesir. (2021, July 24). Retrieved from googlesir.com: https://www.googlesir.com/essential-
supply-chain-drivers/
MyBillBook. (2019). Quora. Retrieved from quora.com: https://www.quora.com/What-is-
Supply-Chain-Management?q=what%20is%20supply%20chain%20mana
Ora, S. (2018, May 26). Quora. Retrieved from quora.com: https://www.quora.com/What-are-
the-drivers-of-supply-chain-management
Prajapati, A. (2016, August 17). Quora. Retrieved from quora.com:
https://www.quora.com/What-is-Supply-Chain-
Management?q=what%20is%20supply%20chain
Scjunction. (n.d.). Retrieved from scjunction.com: https://www.scjunction.com/blog/new-
drivers-supply-chain-management-today
Skib, S. (2014, October 14). Scribd. Retrieved from scribd.com:
https://www.scribd.com/doc/242949944/Supply-Chain-Report-of-Pran-Frooto
Studymoose. (n.d.). Retrieved from studymoose.com: https://studymoose.com/supply-chain-of-
pran-essay
Sunil Chopra, P. M. (2003). Supply Chain Management. Library of Congress Cataloging.
Wikipedia. (n.d.). Retrieved from wikipedia.org: https://en.wikipedia.org/wiki/PRAN-
RFL_Group
‫ر ضوي‬, S. M. (2020, April 18). Quora. Retrieved from quora.com:
https://www.quora.com/What-is-a-supply-chain


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Supply chain management

system of PRAN Foods Ltd.

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Importance of Supply Chain Management:

 To reduce operating costs

Objectives of the study:

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Supply Chain Management:

Divers of Supply Chain Management

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Drivers of Supply Chain Performance

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How to manage SCM drivers by PRAN Foods Ltd.:

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How to achieve strategic fits

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Information: PRAN is taking advantage of the competitors by utilising accurate information in

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