Performance of Supply Chain Management Practices in

the Steel Industry: A Comparative study on the GPH

Ispat Limited and Bangladesh Steel Re-Rolling Mills
Limited (BSRM), Bangladesh
(THIS THESIS IS SUBMITTED FOR THE PARTIAL FULFILMENT OF THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION (MBA) WITH A MAJOR IN SUPPLY CHAIN MANAGEMENT)

Supervised by:
Md. Kazi Golam Azam
Assistant Professor, DBA, IIUC

Submitted by
S. M. Tamjeed Bin Alam
ID: R193139
Program: RMBA
Major: Supply Chain Management
Summer 2020

Department of Business Administration Faculty of Business

Administration
International Islamic University Chittagong

1
Performance of Supply Chain Management Practices in
the Steel Industry: A Comparative study on the GPH
Ispat Limited and Bangladesh Steel Re-Rolling Mills
Limited (BSRM), Bangladesh
(THIS THESIS IS SUBMITTED FOR THE PARTIAL FULFILMENT OF THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION (MBA) WITH A MAJOR IN SUPPLY CHAIN MANAGEMENT)

Submitted by
S. M. Tamjeed Bin Alam
ID: R193139
Program: RMBA
Major: Supply Chain Management
Summer 2020

2
 Signature of Supervisor

Department of Business Administration Faculty of Business

Administration
International Islamic University Chittagong

3
20.03. 2021
The Dean Faculty of Business Studies
International Islamic University Chittagong
Subject: Submission of thesis.
Dear Sir,
This is to inform you that, I am submitting herewith my thesis, titled " Performance of
Supply Chain Management Practices in the Steel Industry: A Comparative study on
the GPH Ispat Limited and Bangladesh Steel Re-Rolling Mills Limited (BSRM),
Bangladesh". As of my course requirement and supervisor's suggestion and guidance,
I have closely studied the supply chain activities of GPH Ispat and BSRM for in depth
analysis of supply chain performance. I have tried my best to know about the company
by observing its activities. I believe and hope that you will find this study very
interesting, informative and insightful.
I would therefore like to request you to accept my thesis and oblige thereby.
Yours Faithfully,
S. M. Tamjeed Bin Alam
ID: R193139
Program: R.M.B.A.
Major: Supply Chain Management.
Summer 2020
International Islamic University Chittagong.

4
 AUTHOR DECLARATION

I hereby, declare that the work in this thesis is my own except for quotations
and summaries which have been duly acknowledged.

Date: Signature:

Name: S. M. Tamjeed Bin Alam

ID: R193139
Address: Kumira, Sitakundo, IIUC

5
Table of Contents
AUTHOR DECLARATION.....................................................................................................................................4
Acknowledgment...............................................................................................................................................8
Chapter One: Introduction.................................................................................................................................9
1.1 Background of the study..................................................................................................................10
1.2 Objective of the study:...........................................................................................................................10
1.3 Methodology of the study:.....................................................................................................................10
1.4 Literature Review...................................................................................................................................11
1.5 Scope of the study:.................................................................................................................................12
1.6 Limitations of the study..........................................................................................................................12
Chapter Two: Organizational Overview of GPH Ispat & BSRM Limited...........................................................13
2.0 Overview of GPH:...................................................................................................................................13
2.1 Vision of GPH Ispat.................................................................................................................................13
2.2 GPH Ispat’s Values are:...........................................................................................................................13
2.3 Products of GPH.....................................................................................................................................14
2.4 Process Diagram of GPH Ispat................................................................................................................15
2.6 Product Wise Performance....................................................................................................................16
2.7 Departments in GPH Ispat......................................................................................................................17
2.8 About BSRM...........................................................................................................................................18
2.9 History of BSRM.....................................................................................................................................18
2.10 Vision and Values.................................................................................................................................19
BSRM Values............................................................................................................................................20
Reliability:.................................................................................................................................................20
Trust:........................................................................................................................................................20
Leadership:...............................................................................................................................................20
Social Responsibility:................................................................................................................................20
Customer Satisfaction:.............................................................................................................................21
2.11 Products of BSRM.................................................................................................................................21
2.12 Market Position of BSRM.....................................................................................................................22
2.13 BSRM Landmarks..................................................................................................................................22
2.14 SWOT Analysis of BSRM's.....................................................................................................................23
Strengths:.................................................................................................................................................23

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 Weaknesses:............................................................................................................................................24
Opportunities:..........................................................................................................................................24
Threats:....................................................................................................................................................24
2.15 Contact Address of BSRM.....................................................................................................................24
Chapter: Three : A discussion on the concept of supply chain management...................................................25
3.1: Definition..............................................................................................................................................25
Supply Chain Structure.............................................................................................................................25
3.2: Major Supply Chain Drivers...................................................................................................................26
3.4: Supply Chain Function...........................................................................................................................28
3.5 Supply Chain Cycle.................................................................................................................................28
Chapter Four: Performance Analysis of Supply Chain Activities of GPH and BSRM Limited..........................29
4.1 Supply chain Drivers of GPH Ispat..........................................................................................................29
4.1.1 Facility:................................................................................................................................................29
4.1.2 Inventory:............................................................................................................................................29
4.1.3 Transportation:...................................................................................................................................30
4.1.4 Pricing:.............................................................................................................................................30
4.1.5 Information:........................................................................................................................................31
4.1.6 Sourcing:..........................................................................................................................................31
4.2 Inbound and Outbound Material Flow:..................................................................................................32
4.2.1 Inbound Material procurement diagram of GPH Ispat....................................................................32
4.2.2 Out Bound Material flow (Sales Process Diagram)..........................................................................33
4.3 Manpower Analysis of Supply Chain in GPH Ispat Ltd.: Manpower list:.................................................37
4.4 Supply Chain Activities of BSRM Limited Value Chain - Primary Activities of BSRM Steel Mills Limited.38
4.5 Value Chain - Supporting Activities........................................................................................................38
4.6 Distribution of BSRM..............................................................................................................................41
4.7 Inventory of BSRM.................................................................................................................................43
4.8 Logistics of BSRM...................................................................................................................................45
4.9 Comparison of Supply Chain Management between GPH and BSRM........................................................47
Chapter Five: Summary of the Findings and Recommendation.......................................................................49
5.1 Key Findings...........................................................................................................................................49
5.2 Recommendations for GPH Ispat Ltd.....................................................................................................49
5.3 Recommendations for BSRM..................................................................................................................49
5.4 Conclusion..............................................................................................................................................50

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References.......................................................................................................................................................51

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 Acknowledgment

In performing my thesis, it is successful one I have to take the help and guideline
of some respected persons. First of all, I am grateful to Allah who gives me sound
mind and sound health to accomplish my thesis. The completion of the report
gives me much pleasure. I am immensely pleased and elated to mention to names
of the eminent person who are the real strength behind this report simple
because without their encouragement and support this report would have been
non-existent.

I would like to thank my honorable supervisor Md. Kazi Golam Azam, Assistant
professor Department of Business Administration, International Islamic
University Chittagong for his proper instruction, suggestion and evaluation
which helped me much to write this report in the proper way.

Yours Faithfully,
S. M. Tamjeed Bin Alam

ID: R193139

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Chapter One: Introduction
Steel industry is an established and growing industry in Bangladesh. Predominantly based in the port city of
Chittagong, the industry has emerged as a major contributor to the national economy. According to the
experts, the growth of steel industry in Bangladesh is mainly induced by the rapid expansion of the country's
shipbuilding and real estate sector, as well as the major investments in various infrastructure projects
throughout the country.
History of Steel Industry in Bangladesh
The first ever steel mill was established in 1952 by the H Akberali Group of Industries as the "Bangladesh
Steel Re-rolling Mills (BSRM)". Located at Nasirabad, Chittagong, the plant formed re-enforcing bars and
structural sections. The mill gradually prolonged, adopting new technological know-how by setting up a
cross-nation European mill in 1987 which incorporated a wire-rod mill. The BSRM group added a captive
billet manufacturing plants in 1996 so as to make sure a stable distribution of billets of its plants. In 2006, the
company installed pilot cold rolling mill to make ribbed high strength wires.
By this time, GPH ISPAT LIMITED Steel Plant Ltd emerged. Very recently, they have established Billet
Plant at Chittagong. Their factory situated at Ghoramara, Sitakunda at Chittagong. One of the largest rolling
mills in Bangladesh. Moreover, several other steel companies emerged in the country, most notably GPH
Ispat, The Rani Re-rolling Mills LTD, Kabir Steel Re-rolling Mills, AKS, Anwar ISpat, HKG Steel Mills
Ltd., Rahim Steel Mills LTD, Seema Steel Re-rolling Mills LTD, Bashundhara Steels etc.
Bangladesh Steel industry is emerging as one of the major industrial sectors of the country. It consists of
small up to the largest scale of steel melting and re-rolling factories across the country that mostly produce
deformed bar rod of different grade (40, 60, 500), angel, channel and coil for the construction industry.
Though the history of Steel Industry is not older one but it can make a glorious future. Before 1971
Bangladesh did not have any steel mill and even after the liberation there were only a few steel factories in the
country. In 1990s the actual development began in this sector through a revolution. During that period the
building constructing agencies or developer companies came forward to build modern infrastructure. Then
with the increasing demand, new investors started investing in steel or rod production. In 2012 we have
almost 400 mills across the country including Dhaka, Chittagong. Although most of them are manual steel
plants, 30 mills among them are automated.
Many steel producing companies have gained reputation as a brand. Among them, GPH Ispat, BSRM, RSRM,
RRML, Anwar Steel, HKG Steel, AK Steel, Rahim Steel, Abul Khair Group are worth mentioning. Today the
highest steel producing company is BSRM. They are doing business for 60 years. Their production is almost
six and half lakh ton per year which meets 26% demand of the local market. Now grade 60 rods are being
slowly replaced by g500 rods which a number of rolling mills in our country are now manufacturing. With
g500, the real estate builders and developers can also save minimum 15% further quantity of steel than g60.
Bangladesh Steel Manufacturers Association (BSMA) currently, 45 steel mills are the members of
Bangladesh Steel Manufacturers Association (BSMA) who manufacture over 80% of the steel products in the
country. (Intro)

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 1.1 Background of the study
Basic purpose of this report is to fulfill my MBA Degree. Secondly, to get a broad idea and practical
knowledge about practices of supply chain management in real field. This is an outcome of an experience to
GPH Ispat Limited and Bangladesh Steel re Rolling Mills Limited (BSRM).
GPH Ispat Limited, the largest multi-diversified steel manufacturing unit in South-East Asia. It started its
journey with interest in providing complete solution to its customers in the field of structural steel. Now it is
the Industry leader in the construction steel industry of the country.
This study is divided into five chapters. This chapter provides a broad idea about supply chain management
practice in GPH Ispat Limited and Bangladesh Steel re Rolling Mills Limited (BSRM). In the 1st chapter I
have discussed about its background, scope objective, limitations, and methodology. Second chapter includes
organizational overview of GPH Ispat Limited such as its history, mission, vision etc. In the 3rd chapter
discuss about some relevant concept of theories of supply chain management of and in the 4th chapter I have
covered about main functions of supply chain department of GPH Ispat Limited and Bangladesh Steel re
Rolling Mills Limited (BSRM). And finally, in the last chapter discuss about the key findings and
recommendations.

1.2 Objective of the study:

The main objective of the study is to analyze of the performance of comparative supply chain management
practice in the GPH Ispat Limited and Bangladesh Steel re Rolling Mills Limited (BSRM). More specifically.
a) To give an overview of the company.
b) To expose the supply chain related activities of GPH Ispat Limited and Bangladesh Steel re Rolling
Mills Limited (BSRM).
c) To analyze the performance of supply, distribution, storage, procurement, marketing services of GPH
Ispat Limited and Bangladesh Steel re Rolling Mills Limited (BSRM).
d) To identify contributions and shortcomings of GPH Ispat Limited Mills Limited.
e) Finally, to recommend some steps/measure to overcome those shortcomings.

1.3 Methodology of the study:

This report has been prepared by collecting secondary data on supply chain management of GPH and BSRM
for Last Five years from 2016-2020. Besides, different books, articles, reports, brochures and newspapers
have been reviewed to prepare this report.
The secondary sources are following:

 Annual report of the company

 Website of GPH and BSRM Limited

 Different manuals of GPH Ispat and BSRM Limited
 Brochure of GPH and BSRM Limited
 Different Books related to supply Chain Management Google Search

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1.4 Literature Review
A supply chain is a network that linked the forward integration with its backward integration to deliver
the products and services to the final user that is the customer. The chain also involves two or more
organizations to provide the respective products and services to the final user. Supply Chain Management
(SCM) consists of the entire parties concerned in all directions to fulfill customer appeal. The supply
chain is not limited within the manufacturing industry; its uses also are in the transportation, retailing
activities, warehouse and also the customer as well. Define the service supply chain as the set of
connections with those service-oriented organizations that provide and produce services. In recent eras,
services have taken a vital role in the world. This service economy has good command for the growth of
developed countries in the world. However, regardless of the importance of the service economy, services
now become a big role player in comparison with manufacturing. SCM enhances customer service by
assuring the availability of products and lowering the cost of order cycle time. According to Wikipedia-
Bangladesh Steel Industry (2019), the steel industry is recognized and rising manufacturing in
Bangladesh. Mainly because of a port facility in Chattogram, the business has appeared as the main
contributor for the nation and its economy as well. From the expert opinion, it has been observed that this
growth has spread over the country because of shipbuilding, for project setup and the real estate segment.
The steel industry at this time going through increasing demand in Bangladesh. Fortunately, the country
has a proud heritage for the art of steel making and shaping for a long time. Currently, more than 400
steel, rerolling and auto-re-rolling mills are in Bangladesh.

"Bangladesh Steel Re-rolling Mills (BSRM)" is the first steel mill of Bangladesh that established in 1952.
By this time a good number of steel companies also emerged in this country like RSRM, AKS, GPH
Ispat, Rahim Steel, etc. For distributing these industries product to the customer, dealer plays a big role.
Dealers usually provide the services and sell the respective products to the customers directly and for the
steel industry, it stays as most common. The producers can gain the feedback of the customers through
the dealers as they deal with customers directly. Thus, this research paper will help to measure the
performance of service supply chain management of the Steel Industry mainly for BSRM on dealers'
perspective.

GPH Ispat Limited and Bangladesh Steel Re-Rolling Mills Limited (BSRM) Limited are two renown
company in the steel industry and the also apply the proper supply chain in practical that’s why I chosen
those two company.

Similarities between the two companies: Both of the company is located at Chittagong and those
company is produced different categories of steel Bar, logistics management, inventory process, materials

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 sourcing, customer service, HR Management are almost same. That’s why, I have selected this two
companies.

1.5 Scope of the study:

This thesis covered the Supply Chain the board practices of GPH Ispat Limited and Bangladesh Steel Re-
Rolling Mills Limited (BSRM) Limited. It gives a wide perspective on the setting of production network
rehearses, coordination’s, stock, stockpiling, and other significant issues. It attempted to discover production
chain-related issues and gave recommendations.

1.6 Limitations of the study

Time was the main barrier to complete this study. It was difficult task to complete thesis writing within
short duration.

 Representatives remain so occupied with their responsibility at GPH Ispat Limited and
Bangladesh Steel Re-Rolling Mills Limited (BSRM) Limited. They couldn't stretch out their
participation appropriately in the research work.

 Inability in methodical research of the researcher was a significant bottleneck in the efficient
direct of research on this broadly significant research issue.

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Chapter Two: Organizational Overview of GPH Ispat & BSRM Limited

2.0 Overview of GPH:

GPH Ispat Ltd. One of the heads of Bangladesh in assembling steel guarantees
a very solid future and economy with its a-list items. Primary bar, however
GPH Ispat Ltd. is additionally one of the makers of low and medium carbon and low combination steel
billets in Bangladesh, the principle element of assembling evaluated steel bar. As GPH is guaranteeing
the best items in Bangladesh according to different global and public norms, GPH steel billets and Bars
are getting sent out to different nations subsequent to (GPH) supporting public interest. The
presentation of GPH Ispat Ltd. has every one of the possibilities to move forward to a more grounded,
more splendid tomorrow. (GPH)

2.1 Vision of GPH Ispat

GPH Ispat make sure the quality, service and value they offer are the best available today and tomorrow. They
intend to stay competitive, means innovating, analyzing, taking risks, responding to change and using it
whether in markets, variation in products, internal cost-effective programs or technology adoption. They
dream to be a multinational company someday.
They say, “Our Vision is “to enrich the steel sector of Bangladesh as a beacon of light for others and to help
the country in upcoming (GPH) infrastructural development".

“Our Mission is “to provide customers with excellent services and products resulting in constant
improvement and innovation at the highest level of quality".

2.2 GPH Ispat’s Values are:

 We are committed to provide enjoyable work environment for our employees, our most important
resources. We will continually promote teamwork, quality improvement and excellence in all the places of
business for establishing good governance.
 We will provide products and services of highest quality and value by respond to our customers with
promptness, sensitivity, respect & always with integrity.
 We enrich stakeholders’ interest where employees are our strength, customers are our Brand Ambassador,
and suppliers & service providers are our value chain.
 We meet the challenges of Earthquake with our quality products in strong infrastructure development to
secure the safety of country (Isu) people.
 We will maintain a financially strong, growth – oriented company for the protection of our shareholders &
employees through leadership & innovation.
 We ensure that our production process is free from environmental pollution (Isu).

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2.3 Products of GPH
TWO TYPES OF PRODUCTS ARE MANUFACTURED AT GPH ISPAT LTD.

1. BILLET: Size - 100mm X 100mm, 110mm X 110mm, 130mm X 130mm and as

per customers’ requirements). (Nitro)
2. REBAR:

 Deformed bar (Nitro) (available in sizes 8mm, 10mm, 12mm, 14mm, 16mm,
18mm, 20mm, 22mm, 25mm, 28mm, 32mm, 36mm and as per customers’ requirements).
 Plain bar (available in sizes 8mm, 10mm, 12mm, 14mm, 16mm, 18mm, 20mm, 22mm, 25mm, 28mm,
32mm, 36mm and as per customers’ requirements). (Nitro)

(Gala)

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2.4 Process Diagram of GPH Ispat

1. Complete Pure Steel:

GPH QUANTUM Re-bar is completely waste-free because only the GPH

QUANTUM contains-

 Scrap preheating process: The GPH QUANTUM pre-heating chamber of the arc furnace heats the scrap to
a temperature of 600-degree C. During this process, it removes the paint, rust, moisture, and primary
impurities present in the scrap.
 Oxygen lancing and argon bottom purging: The GPH QUANTUM removes unnecessary carbon and
phosphorus through oxygen lancing and bottom purging in the arc furnace, turning the heated mixture into
a homogenized mixture.
 Flat bath operation and bottom tapping: PURE FLAT BATH OPERATION is done by preparing 60 m: ton
HOT HEEL in GPH QUANTUM arc furnace with the capacity of 150 m: ton so that the chemical reaction
of carbon and oxygen creates FOAMY SLAG, and removes phosphorus and other wastes.

GPH QUANTUM collects 100% waste-free liquid metal ladle by tilting the furnace at a 4-degree angle
through bottom tapping in a siphonic process in an arc furnace.

The GPH QUANTUM arc furnace rebar is much more earthquake-resistant than another rebar in the
market for its 100% refinement. So, the engineers rely on GPH QUANTUM RE-BAR for any
megastructure.

2. Balanced Chemical Mixture:

The chemical composition of GPH QUANTUM Re-bar is balanced because GPH QUANTUM contains-

Ladle Refining Furnace (LRF): Harmful sulfur is removed from the QUANTUM arc furnace by refining
the refined balanced mixture in LRF and the accurate amount of GPH QUANTUM re-bar chemical
ingredients are ensured by mixing the required chemical ingredients.

High-Speed Continuous Casting Machine (CCM): Closed casting is done at its every level which protects
the liquid steel from oxidizing and adding impurities (through the surrounding atmosphere) and maintains
the quality of the steel.

So, the chemical properties are present in a balanced way in all the parts of the prepared re-bar. That is
why construction is more powerful and safer.

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 3. Steel with Higher Ductile (flexible), Firm Bonding Strength:

Billets made from CCM are rolled directly in a state-of-the-art and high-speed endless rolling or win link
method. The GPH QUANTUM rebar is more ductile than any other rebar in the market due to Quantum
and Win link technology.

The state-of-the-art technology’s housing less free-floating rolling stand and Tungsten Carbide Roll ensure
the uniform diameter of the re-bar, the relative rib area, and the right height of the transverse rib that
makes the (Process) installation more secure by establishing a strong bond between the concrete and the re-
bar.

4. Uniform strength, rust-resistant:

Since the fully automatic Quenching Method ensures a uniform martensite ring, there is no difference in
the strength of the GPH QUANTUM re-bar from start to end.

The GPH QUANTUM re-bar has a rust-resistant coating due to its 100% refining and automatic
Quenching Method, (Process)which increases the re-bar's rust resistance, so it can be used safely in any
large installation.

5. Shiny surface:

The use of more tungsten carbide rolls in the rolling process makes the surface of the GPH QUANTUM
re-bar shinier. (Process)

2.6 Product Wise Performance

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18
2.7 Departments in GPH Ispat

There is a structured departmental segregation in GPH Ispat. The departments that exist in GPH Ispat are as
follows:
2.6.1 Human Resource

2.6.2 Administration
2.6.3 Accounts

2.6.4 Production
2.6.5 Mechanical Maintenance

2.6.6 Electrical maintenance

2.6.7 Transport Division

2.6.8 Quality Control

2.6.9 Supply Chain

2.6.10 Ten Finishing

2.6.11 Power Plant Project

2.6.12 Procurement

2.6.13 Store
2.6.14 Marketing Dept. etc. (Gala)

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2.8 About BSRM

BSRM is the leading steel manufacturing company and one of the prominent
corporate houses in Bangladesh. Over the years, BSRM steel products have been
chosen solely for building major National landmarks and infrastructures. To name a few, the Padma
Bridge, Rooppur Neuclear Power Plant, Hatirjheel Project, Zillur Rahman Flyover, Mayor Hanif Flyover
and Shah Amanat Bridge were built with BSRM.

BSRM Xtreme is a product that was introduced when there was no graded steel in Bangladesh. It was a
major change in the steel industry of Bangladesh. The core driver was the belief in evolution in steel
products, which resulted in (Aristotol) bringing the first EMF tested rod, the first steel brand that passed 5
million cyclic loading Fatigue testing in the U.K. and conformed to 10 global standards. With the largest
steel producing factory in the country and employing the best technology from Europe, the company
maintains volume with uncompromising quality. BSRM is dedicated to providing the best solution for the
construction industry. The first ever 50 mm rod was specially designed and rolled for the deep pilling
requirements of Padma Bridge. Various specialized products of BSRM are also designed to meet special
needs for the construction industry.

2.9 History of BSRM

 1952 The BSRM saga began with the first steel re-rolling mills to emerge in the then East Bengal in
1952.
 1984 Introduced high strength cold twisted steel bars (TORSTEEL) to the construction industry.
 1987 Introduced High Strength Deformed reinforcing steel bars conforming to ASTM 615 Grade 60
for the construction industry.
 1996 Commissioned the then largest billet making plant in the country – Meghna
 Engineering Works Limited, now known as (Aristotol)Steel Melting Works (SMW) unit of
Bangladesh Steel Re-rolling Mills Ltd.

 2006 Introduced micro reinforcement wires, below 8mm, for low cost rural construction.
 2008 BSRM Steels Limited commenced production of internationally recognized Grade

 500 steel bars branded as “Xtreme500W” conforming to ISO 6935-2.

 2010 BSRM Iron and Steel Co. Ltd. largest billet making plant in the country started commercial
production on June 01, 2010.
 2015 BSRM Steel Mills Ltd., the largest ever Induction Furnace based Billet making Plant is
commissioned (Aristotol) in September, 2015.

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  Enhanced the capacity of BSRM Steels Limited from 600,000 MT to 700,000 MT per annum.

 Announced a new product “BSRM Maxima” o Increased capacity of Bangladesh Steel Re-Rolling

Mills from 120,000 MT to 450,000

MT per annum which will be the first and largest merchant mill in Bangladesh o Listing of Bangladesh

Steel Re-Rolling Mills Limited with the stock exchanges (DSE & CSE). o Start of trial production of world’s

largest induction furnace-based billet casting project – “BSRM Steel Mills Limited”.

• 2016 – 2017 For first time in the history of BSRM Group, sales of MS Products has crossed one million M.
ton in the year of 2016. o BSRM Steel Mills Limited, a largest billet making plant in the country started
commercial production in June 2016.

o BSRM Ultima – a landmark innovation of BSRM is introduced first time in Bangladesh. o EPOXY coated

bars for corrosion free structure – CENTURA is introduced.

• 2017 – 2018 Start to set-up of a state-of-the-art Galvanized Iron (GI) wire and Low Relaxation Pre-
Stressed Concrete (LRPC) wire manufacturing plant. o Business Intelligence (BI) Analytics Tool for
BSRM Group started on May 2018, which helps senior management and Board Members to take prompt
and prudent decisions.
• 2018 – 2019 Second melting unit of BSRM Steels Limited has successfully announced its commercial
production on April 16, 2019, with a capacity of 430,000 MT billets per annum.

2.10 Vision and Values

Maintain our leadership positions in the steel industry by-producing the best quality steel products,
continuously enhancing customer satisfaction and becoming a reliable business partner of our Customers and
Suppliers. o Be an employer of choice, with focus on nurturing talent and developing future leaders of the
organization.

o Protect the interest of our shareholders through sustainable growth and value creation. o Preserve the
trust of all our stakeholders by adopting ethical business practices. o Support the society through
Corporate Social Responsibility initiatives.

BSRM Values

Sustainable Growth:

21
Consistent improvement in the quality of products and services, efficiency of processes and profitability
of business; continuously anticipating and responding to the changing business and environmental needs
using innovation; sharing knowledge and experience within the organization Quality:

Create products and services valued by our customers; constantly improving our processes through
innovation and adopting best practices; reducing wastage; minimizing costs; investing in systems and
technology and developing our people to build a highly capable workforce.

Reliability:

Be the preferred business partner of our customers and suppliers by offering quality products; providing
our best and timely service before, during and after the business transactions and honoring all our
commitments despite challenges.

Trust:

Preserve the faith and goodwill of all our stakeholders – Customers, shareholders, suppliers, employees,
regulatory bodies and society by-adopting ethical and transparent business practices, being fair and honest
in all our dealings and building robust governance and risk management processes.

Leadership:

Be a role model, setting benchmarks through our products, processes and people; constantly moving
ahead of competition by differentiating our products, innovating our processes, increasing our market
share and nurturing talent to develop leaders within the organization.

Social Responsibility:

Acknowledge and fulfill our obligations towards the society by undertaking initiatives for the general
uplifting of the society, building capability and making facilities available to the underprivileged.

22
 Customer Satisfaction:

Delight our external and internal customers at every stage of our interaction with them by truly
understanding their needs, offering them our best products and services, treating them with respect and
actively seeking and acting on their feedback.

2.11 Products of BSRM

Prominent products of BSRM are as follows- “
i. BSRM Xtreme B500DWR (Feel Safe with Xtreme Inside) BSRM, the most preferred reinforcing
steel of all major national landmark projects in Bangladesh, is committed to building a safer
nation since 1952. As a footstep of continuous research and innovation, we bring-forth another
product XTREME B500DWR which fully conforms to BDS ISO 6935-2:2016. Grade
B500DWR also Conforms B500C of BS 4449:2005 and Fe 500S of IS 1786:2008 – Both British
Standard and Indian Standard.
The new Grade B500DWR has a Tensile Strength to Yield Strength (T/Y) Ratio: 1.25 The
product complies with the provisions of the Bangladesh National Building Code (BNBC).

ii. BSRM Xtreme (Feel Safe with Xtreme Inside) Xtreme is a high strength reinforcing steel for
general purpose construction of low and medium rise commercial and residential buildings and
bridges. It is the steel of choice among home builders. It is used in the design and construction of
Ordinary and Intermediate moment frames of reinforce concrete (RC) Buildings, whenever high
strength for economy and high ductility for safety is required. The most common sizes for home
builders are 8mm, 10mm, 12mm, 16mm, and 20mm. These sizes are available with BSRM
appointed dealers throughout the country. BSRM has the largest steel dealer network, with over
628 Dealers in all the 7 administrative divisions of the country (BP).

iii. BSRM Maxima (The Steel for Mega-Structures) Steel is a ubiquitous and versatile construction
material. It is the backbone of a nation’s infrastructure and used in the tens of millions of tons to
build cities, bridges, and factories. It is either used as a structural material or as a composite in
reinforced concrete (RC). The use of Grade 80 rebar instead of Grade 60 reduces steel
consumption up to 25% in RC structures. BSRM Maxima is exactly (BP) the material for
construction of projects which needs extra strength combined with an extra dose of safety.

23
 iv. BSRM Ultima (Designed for Superior Safety) All vital installations anywhere in the country like
hospitals, schools, airports, railway stations, and bridges cannot be allowed to fail in an
earthquake. In a landmark innovation, BSRM brings forth

BSRM ULTIMA the reinforcing steel with the unique ‘strain hardening’ property for the first
time in the country with superior safety in the time of earthquake.

v. BSRM Strong (Strength in Every Angle) Strong is a high strength structural steel conforming to
standards and grades. Channels and Angles section rolled out of this high strength steel provides
an economic alternative to steel fabricated structures. BSRM makes Angles, conforming to
Grade 50 in different sizes.

vi. BSRM Cantura (Assured for a Century) - Epoxy Coated Rebar for Corrosion Free Structures
Corrosion-induced failures cause severe distress to concrete structures is most common in any
chemically aggressive environments. Repair and rehabilitation of the affected structures not only
cost the exchequer with direct and indirect costs but also cause a lot of inconvenience to the
public. Hence, it is essential to plan proper corrosion protection strategy to combat corrosion for
the durability of structures, (BP) particularly in marine, coastal or industrially polluted areas.
Fusion Bonded Epoxy Coating is providing protection against corrosion for the design life of the
structures.”

2.12 Market Position of BSRM

The current market price of stock of BSRM Limited is BDT Tk.54.30 (8 th Aug,2019, 12:39 AM). BSRM
is the market leader with 25 percent share and produces about 15 lakh tons of steel every year. As per the
Annual Report of 2017-18, revenue amount is tk. 48,289 million, gross profit tk. 4,879 million, operating
profit tk. 3,180 million, net profit after tax tk. 1,800 million, earning per share tk. 5.27, NAV per share tk.
37.48, NOCF per share tk. 2.90.

2.13 BSRM Landmarks

i. Mayor Mohammad Hanif Flyover

ii. Hatirjheel Integrated Development Project

iii. Zillur Rahman Flyover

iv. Saidabad water Treatment Plant, Phase-2

v. Shah Amanat Bridge

24
 vi. Meghna- Gumti Bridge Project

vii. Meghna Bridge

viii. Dhaka Storm Water Drinage Project

ix. Karnaphuly Fertilizer Factory

x. Jamuna Fertilizer Factory

xi. 210 MW Thermal Rangunia Power Plant

xii. Grameen Bank Bhaban

xiii. Teesta Barrage

xiv. CAIRN Energy Sangu Gas Field

xv. Bidyut Bhaban

xvi. Rajarbagh Police Monument

xvii. Apollo Hospital

xviii. North South University

xix. Many other high rises of Chattogram, Dhaka, Bogra,

Cumilla, Sylhet, Brahmanbaria and Cox’s Bazar.”

2.14 SWOT Analysis of BSRM's

SWOT Analysis will expand the quality and weaknesses of BSRM steel, Bangladesh, as well as openings
and hazards. Furthermore, the power and weakness of BSRM will be an issue of internal inquiry and
possibilities and threats will be an issue of external examination. Now, the SWOT investigation of BSRM
is given underneath:

Strengths:

• BSRM is the leader in the market which holds the 12% market share and it has strong distribution
channel all over Bangladesh which helps them to compete easily with competitors.

25
 • It has been providing quality production consistently for the past years. So, it has been grown to a
reputed company.

Weaknesses:

• As BSRM is an overwhelming industry, so it needs loads of gas and power supply every day underway.
Yet, the energy emergency in Bangladesh is gradually growing as the legislature fails to provide
appropriate supplies of gas and intensity.

• As BSRM has taken a huge amount of loan from different banks, so most of their profit goes to the
interest payment.

Opportunities:

• As the interest for BSRM 500grade rods are expanding gradually in the local markets, so BSRM has a
more noteworthy chance to build its benefit.

• There is potentiality for BSRM that they may capture more market share in the near future as their
market share is 12% or more.

Threats:

• Now-a-days some steel companies flourished their steel production. For example, Abul Khayer Steel is
a reputed company who are planning to produce 800000 Metric tons of steel per year. So, competition
will increase day by day.

• Now-a-days, one of the emerging threats to the steel industries is the labor unions.

2.15 Contact Address of BSRM

We have our offices and touch points located all over the country. For any information regarding BSRM
products or any sought of enquiry please visit or contact our offices listed below:

Now you can order online. Please visit order.bsrm.com for placing your order.

Corporate Office
Ali Mansion
1207/1099, Sadarghat Road, Chattogram,
Bangladesh.

26
+880 31 2854901-10 +880 31
610101 mail@bsrm.com

27
Chapter: Three : A discussion on the concept of supply chain management

3.1: Definition
Supply chain management is the management of the progression of merchandise and enterprises and
incorporates all cycles that change crude materials into eventual outcomes. It includes the dynamic smoothing
out of a business' supply-side exercises to augment client worth and gain an upper hand in the commercial
center (Aristotol2006).
SCM addresses an exertion by providers to create and carry out supply chains that are just about as effective
and prudent as could be expected. (Aristotol2006) Supply chains cover everything from creation to item
improvement to the data frameworks expected to coordinate these endeavors.

Supply Chain Structure

(Expand 202)

28
3.2: Major Supply Chain Drivers
Effective supply chain management calls first for an understanding of each driver. There are main 5 major
driven available for supply chain. They are:

(Pos221)

29
3.3: Participants in the Supply Chain
In any given supply chain, there is some combination of companies who perform different functions.
There are companies that are producer’s distributors and wholesaler, retailers and companies or
individuals who are the customers the final consumers of is product. Supporting these companies there
will be other companies that are service providers that provide a range of needed services. (Book101)

a) Producers:
Producers are organization that make a product. This includes companies that are producers of finished
goods.

b) Distributor:
Distributor are companies that take inventory in bulk from producers and deliver a bundle of related
product lines to customers Distributions are also known as whole sales. This kind of distribution performs
mainly the functions of product promotion and sales.

c) Retailers
Retailers stock inventory and sell in smaller quantities to the general public. This organization is closely
tracking the preferences and (Pos221) demands of the customers that it sells to.

d) Customers
Customers or consumers are any organization that purchases and uses a product. A customer organization
may purchase a product in order to incorporate it into another product that they in turn sell to other
customers.

e) Service Providers
These are organization that provide services to producers, distribution, retailer and customers, Service
providers have developed special expertise and skills that focus on a particular activity needy by supply.

30
3.4: Supply Chain Function
On a broader level supply chain management consists of these 4 major functions and key element
component such as:

Integration: This forms of the crux of the supply chain and is meant of co-ordinate communications to
produce effective and timely results.

Operations: This involves management of the day to day operations in the commerce business.

Purchasing: This deals with (Book101) the purchasing decisions and management such as per chasing
raw material.

Distribution: This deals with the management of logistics across whole sales, retailers and customers.
(Book101)

3.5 Supply Chain Cycle

A complete flow of supply chain cycle given below:

(Cycle408)

31
Chapter Four: Performance Analysis of Supply Chain Activities of GPH and BSRM
Limited

4.1 Supply chain Drivers of GPH Ispat

We know that supply chain has its six drivers in operation. Here are those drivers and availability of
those in GPH Ispat flat steel.

Facility: Factory, wear-house, other structures, their location

Inventory: Number of Wear-houses, their capacity
Transportation: Available vehicle, types of transportation,
Pricing: Cost of goods sold.
Information: Information is the key to success in any business
Sourcing: Sourcing of raw materials and other spare parts. (Gala)
4.1.1 Facility: GPH Ispat has a huge facility in and out their factory. They have two factories in
Dhaka and Chittagong. Chittagong factory gives the facility to carry the raw materials easily from the
port. And the Dhaka factory gives the privilege of forwarding the finished products all over the country
easily with less transportation cost. (Expand 202) Both of the factories have huge land properties of
more than 200 accords each. They have 10 ware houses for finished products in al over the country with
a properly calculated location.

4.1.2 Inventory: GPH Ispat has 10 wear-houses for finished products in the country. All these wear-
houses can store more than 2 lakh tons of finished products at a time. And it has also more than 10 other
wear-houses for storing raw materials and spare parts. (Aristotol) It maintains a stock of spare parts of
more than 70 core and 150 cores of raw materials. (Isu) Among the raw materials there are

1. Hot Rolled coil

2. CR Coil

3. GP Coil

4. Zinc

5. Tin
6. Antimony

7. Color

8. Thinner

32
 9. Aluminum

They use perpetual inventory counting system. And all the calculations are done automatically in ERP
software Oracle. The arrangement of materials is also in a scientific manner, maximum inventory is
maintained following the FIFO inventory system. (Expand 202) The material tracking and issue system is
also very good. ABC counting is followed there on regular basis. And Cycle counting is a continuous process
where internal and external audit teams are involved regularly. So, monitoring and reconciliation is very
concrete.

4.1.3 Transportation: GPH Ispat flat steel has a big transportation system. It uses own logistics and the 3 rd
party as well. It has different types of own vehicles like truck, lorry, Dump-truck, Fork lifter, pick-up,
Hydraulic crane, mechanical crane etc. And there are more than 10 out-side permanent suppliers who give
transport facility to the company.

Own vehicle list are as follows:

1. Trucks:15
2. Dump Trucks :5

3. Forklift :6

4. Pick Up:10

5. Lorry:20

6. Hydraulic crane:3

7. Mechanical crane:3

8. Pay Loader:2

4.1.4 Pricing: GPH Ispat has sophisticated ERP software named Oracle. By this software the company set
the prices of its products with a great skill. And they have also numbers of Professional Charter Accountant
do the work of pricing flawless. Sometimes GPH (Aristotol)do aggressive marketing for that they fix their
price at a minimum level. And sometime they minimize the cost according to the requirement of the buyer
(Aristotol2006). But it is an established truth that GPH tries to offer the least price in the market maintaining
their quality. They are price sensitive company we can say.

33
4.1.5 Information: To maintain a flawless information system it has a huge networking of its own with
regular Video conferencing, data transfer, direct verbal talking etc. are done with a swift speed. GPH Ispat has
its own radio link and own DomainName in internet to operate websites and other online activities. And its
ERP software also helps in its information system. And the IT team also supports the information system a
lot. GPH Ispat has a strong IT teams comprising a number of Engineers from BUET and other prominent
engineering colleges from the country and abroad. IT has some foreign IT experts also (Aristotol2006).

4.1.6 Sourcing: Sourcing is another driver of supply chain. In GPH Ispat it also plays a huge role. It has a
skilled team of procurement who sources the raw materials and spare parts in mini.um price and shortest
possible lead time. For sourcing the materials GPH Ispat (Rports) has many agents and offices in abroad.

They have offices in Singapore, India, Malaysia, Africa, and Korea.

Common Sources of Raw materials and spare parts of GPH Ispat are as follows:
1. China 50 %

2. India 30 %

3. Korea 7%

4. Australia 3%

5. Japan 3%

6. Germany 4%

7. Kazakhstan 3%

34
4.2 Inbound and Outbound Material Flow:
GPH Ispat follows a particular series of steps in procuring any material and selling the finished
products. Inbound and outbound materials and finished products flow diagram shows how GPH Ispat
handles its material flow in and out of the factory (Process).

4.2.1 Inbound Material procurement diagram of GPH Ispat

35
4.2.2 Out Bound Material flow (Sales Process Diagram)

36
Sub Sections of Supply Chain Department:

1. Planning Section.

2. Demand Forecasting (Raw materials).

3. Production Planning.

4. Sourcing and Procurement Section.

5. Inventory Management Team.

6. Operations Section.

7. Delivery Team.
Planning section: Planning section under supply chain management is involved in forecasting of
demand and planning of production. There are to sub sections in planning department. One of them
is involved in Raw materials forecasting and another is in production planning.

Demand Forecasting Team: The forecasting team collects the historical data and the demand from the
market. Then they calculate a future demand of raw materials.

They don’t follow any specific formula to forecast the future raw material demand rather they use
sophisticated ERP software named “Oracle”. In doing that all they do just input some data in the
software and run the forecasting process, the result comes automatically. The required data for a
perfect forecasting that the software demands are as follows:

1. Production quantity (Demand, item wise).

2. Chemical composition ratio.

3. Metal composition ratio.

4. Shut down schedule.

5. Other constraints (if Any).

37
Production Planning Team: Production planning team is involved in synchronizing the market
demand with production activities. They work to plan how the products will be produced using the
existing operation facilities. They allot the product details to the work centers which must be
followed by the operations. The major works they do are as follows:

1. Collecting current demand from the marketing team.

2. Evaluating the current ready stock

3. Evaluating the machine capacity

4. Considering the current constraints

5. Finally calculating the production planning for each machine

6. Forwarding that planning to the operations team.

Sourcing and Procurement Team: Sourcing and procurement team is involved in choosing and
selecting the suitable supplier for raw materials and spare parts. The works they do are as follows.

1. Knocking the potential suppliers.

2. Collecting quotation from them

3. Discussion with the suppliers about the terms and condition.

4. Choosing the best suppliers.

5. Giving PO

6. Opening LC

7. Managing the shipment of the materials.

8. Confirming Payment.

9. Closing the LC.

10. Solving the purchase complexities like warranty, mal function etc.

Inventory Management Team: Inventory management team has a huge job in GPH. They are
involved in receiving the materials both physically and in system. They also preserve the materials

38
arrange them in right order, issue them when needed. They also monitor and control the materials’
movement and consumption frequency and quantity (Aristotol2006). They keep the historical data
of consumption, movement history and finally help the planning team and the budget team as well
for future demand forecasting and budgeting of raw materials and spare parts (Expand 202). Only
correctly booked cost by the inventory team from the inventory module in ERP can help calculating
the correct COGS (Cost of Goods Sold) for pricing the products. Main Jobs that are done by the
inventory team are as follows:

1. Receiving the materials (Raw Materials and Spare parts)

2. Making system input for those.

3. Arranging them in right order so that FIFO can be followed.

4. Arranging and counting them on the basis of ABC counting.

5. Cycle counting of the materials.

6. Issuing the materials to the users.

7. Monitoring the consumption allowance ratio by the budget and planning team.

8. Monitoring the material movement ratio.

9. Confirming the cost booked for COGS from inventory module.

10. Keeping the historic data of receiving and consumption.

11. Finally helping the planning and budgeting team by providing data.

Operations Section: This section mainly works at the factory level. They try to establishing the
planning in operation activities. They monitor the production operations and help them
understanding the planning that are served by the planning team. They work as a bridge between
the supply chain planning team and the Production operations team. They monitor whether the
production team is working as per the plan form the supply chain planning team.

Delivery Team: Delivery team works the final activities in the formal supply chain department in
GPH Ispat LTD. They deliver the finished products to the dealers and in the wear-houses in
different sections of the country. The additional work they do is the keeping inventory of finished
products. They do very important job in the cycle of supply in GPH Ispat LTD. Because correct and

39
 on time delivery causes the customer satisfaction. So, they are playing a vital role in GPH Ispat
LTD. supply chain activities.

The works they do are as follows:

1. Arrangement of Finished products in a suitable order

2. Receiving DO from the dealer’s representative.

3. Arranging the required products.

4. Loading them in the vehicle.

5. Dispatching them on time.

6. Giving update of delivery to the higher management regularly.

4.3 Manpower Analysis of Supply Chain in GPH Ispat Ltd.: Manpower list:
Manpower of GPH Ispat Ltd. are showing as follows (Designation wise)-

40
4.4 Supply Chain Activities of BSRM Limited Value Chain - Primary Activities of BSRM
Steel Mills Limited
Incorporates the mechanism of adjustment of vital crude materials into final yield / items including
the transmission of basic crude materials from suppliers and yield/item advertising to customers.
They are assembled into two types of item and market recognized exercises. Item associated
actions are the company's completed activities that contribute value to the items and services. For
instance-

1. Operation Management

Dealing with and handling raw items, coke, calcinated dolomite, pitch bonded magnesia brick,
iron and steel manufacturing, wires, billet, TMT Bar, angles, channels, repair of rolls, and many
other activities are related. Besides, planning, monitoring production, design, assets of production
sites, manufacturing or buying of spares and required items for plant, repairing activities are also
included.

2. Inbound Logistics

Receiving basic raw materials for steel making process, stacking and reclaiming items so also distributing
to various manufacturing sites, etc.

3. Outbound Logistics

Planning and dispatch, distribution management, transportation, warehousing, order fulfillment.

4. Marketing and Sales

Product, price, place and promotion- 4P management, export, domestic export and sales, customized
sales, pricing policy, contract, CRM and many other activities.

5. Customer Service

Quality Aspects, pre/post-sales communication, issue settlement, etc.

4.5 Value Chain - Supporting Activities

These activities do not legitimately contribute in the transformation procedure.
However, they facilitate the essential activities in their capacities. For instance-

1. Material Management

 Purchase includes selection of suppliers, receiving purchase requisitions from plant site,
procuring raw materials, machineries, consumables and other essentials are ensured to be
supplied.

41
 Logistics involves transporting goods and imported items from port, acquiring port facilities,
handling vessels at port and related activities.
 Vendor Development involves performance rating, monitoring, encouraging and interaction
with existing or new suppliers, tracing exploring new sources and many other related activities.
 Warehouse incorporate stock control, issue of spares and consumables to different plant site,
disposal of rejected extras and consumables, custody of raw materials and finished products,
etc.
2. Human Resource Management

Planning, recruiting, executing, human resource development, management services, CSR, and many
other activities.

3. Technology Development

Research and Development (R&D), quality assurance, process automations, etc.

4. Service Management

Includes corporate workplaces, corporate vital administration, corporate correspondences, data

innovation, and so forth.

5. Project Management

Construction and venture monitoring for plant extension, design and engineering for existing or new
plants, project contracts, and so on.

Value Chain- Margin

Margin is the contrast between the all-out worth made at various capacities/activities in the value
chain and summation of expense incurred by the company to make such values. Certain expense is
incurred by the organization for making an incentive for its final merchandise and administration.

a) Production Sites

42
 b) Storage Site BSRM has around eight warehouses all around the country. The notable ones are
BSRM Warehouse (K Rahman); located at Nasirabad, BSRM Steels Limited Warehouse; located at
Fauzdarhat. Besides, for recycling imported scrap, there are two concerns as follows

1) Recycling Insurance Limited (RIL); located at Barawlia, Chattogram. The recycled scrap
from here are used at BSRM Steels (Mill-1); Nasirabad, Chattogram, BSRM Mills (SMW);
Nasirabad, Chattogram.
2) BSRM Steels Limited (SML), (Mill-2); located at Mirasharai, Chattogram. The recycled
scraps from this source issued at this Mill itself so also at BSRM Steels Mill- 2 of Mirasharai,
Chattogram.
4.6 Distribution of BSRM
A chart is given below that illustrates the names and location, (DOB)storage capacity, dispatch capacity
of each distribution center (Warehouse)

Sl. Name and Location of the Distribution Storage Dispatch

Centers Capacit y
No. Capacity
(MT)
(Warehouse) (MT)

01 BSRM Steels Ltd. (Straight 1500+Bent 2,700

1200)

02 45,000 2,500
BSRM WH-K. Rahman, Nasirabad,
Chattogram.

03 Miresharai 25,000 1,200

04 Jungail, Madanpur, Narayangonj 45,000 1,200

05 Mymensingh 1,000

06 Khulna 14,000 600

07 Barisal 1,500 150

08 Benapole 2,500 280

09 Bogra 200

43
 10 Rangpur 1,000 200

Table 1 Name and Locations of Distribution Centers (Warehouses) of BSRM and their
Storage Capacity, Dispatch Capacity

Local Sales against LC/SC:

Figure: Flow Chart of Export Procedure

Deemed Export under International Tender:

Agreement
from Govt/any
International Govt.assigned LC between
Tender Notification Contractor Payment
of Award organization- Released
Notice Foreign and BSRM
Contractor

Figure: Flow Chart of Export Procedure

44
4.7 Inventory of BSRM
Inventory is list of goods and materials or those goods and materials themselves, held available in stock
by an enterprise. On the other hand, store is an establishment that stocks goods for sale to customer or
gathers materials for purpose of using as an input for production processes.

One of the most expensive assets of many companies representing as much as 50% of total invested
capital.
Inventory management is the supervision of non-capitalized assets (inventory) and stock items. A
component of supply chain management, inventory management supervise the flow of goods from
manufacturer to warehouse and from these facilities to point of sale (IB).

Objective of the inventory

i. Minimize investment in inventory

ii. Meet the demand for products by efficiently organizing the production and sales operations.

Tools and techniques of inventory management / control

ABC Analysis, Economic order quantity, Order point problem, Two bin problem, VED classification,
HML classification, SDE classification, FSN classification, Order cycling system, JIT (just in time), SOS
classification (IB).
ABC Analysis:
CATEGORY NO. OF ITEMS ITEM VALUE MANAGEMENT
(%) (%) CONTROL
A 15% 70 % (HIGHEST) MAXIMUM
B 30% 20 % MODERATE
(MODERATE)
C 55% 10 % MINIMUM
(LEAST)
TOTAL 100 100 ……………………………

45
 ABC Classification System

80

70

60

50

40 A B C
NUMBER OF ITEMS
30

20
PRICE OF THE ITEMS

10

Figure.: ABC Classification

46
Types of inventory

i. Raw materials

ii. Work-in-process

iii. Maintenance/repair/operating

iv. Finished goods

Inventory control

Too much inventory can trigger profit losses – whether a product expires, get damaged, or goes out of
season. Key to proper inventory control is a deeper understanding of customer demand for this particular
product.

Hedge Inventory

Some products such as minerals and commodities – for example grains or animals’ products are traded on
a worldwide market. The price for these products fluctuates according to world supply and demand. If
buyers expect price to rise, they can purchase at low price.

Anticipation Inventory

Anticipation inventory are built up in anticipation of future demand. For example, products are created
ahead of a peak selling season, a promotion program, vacation shutdown or possibly the threat of a strike.

4.8 Logistics of BSRM

The Logistics wing ensures the delivery of input items at the manufacturing plant sites and output
products as in finished products and by-products at the designated destinations. It uses truck, trailer
locally for transporting inbound and outbound products. Logistics involves distribution, movement of
goods from one place to another (internally or externally), following and conveyance of products. It takes
the responsibility of planning, managing, controlling and coordination by following some delivery
modes; in order to ensure that the products arrive at the predetermined spot, (LB) at the correct time, for
the correct expense and in an appropriate condition. We can highlight the goals of logistics as follows-

 Handle Customer orders in the most ideal way.

47
  Allocate orders to stock or production.

 Set demanded order’s due dates.

 Generate pick lists at the distribution center.

 Allocate a solicitation to a particular shipment.

 Set conveyance schedules.

 Place restoration/ renewal orders.

Inbound Logistics
Logistics Support

Outbound
Logistics

Figure: Sub-wings of Logistics Wing

The transport modes of logistics department are as follows-

✓ Trailer
✓ Truck
✓ Vessel/Barge
✓ Push Cart
These transport means are used for transporting either straight or bent (U-shaped) products. Followings
are the fundamental types of products transported-

➢ Re-Bar (8 mm to 50mm)
➢ Ribbed Wire
➢ Channel (75 mm ,100 mm and 125 mm)
➢ Square Bar (10mm and 12mm)

➢ Trading Item (Plain Bar, Plate, Pipe, Beam and Section)

48
 ➢ Epoxy Bar (as per demanded size)
➢ Shaft (8mm to 40mm)

4.9 Comparison of Supply Chain Management between GPH and BSRM

49
 Strategic Tactical Operational
Supply
Chain
Process GPH BSRM GPH BSRM GPH BSRM

Plan GPH have BSRM GPH has Planning and GPH has a skilled BSRM receiving
two incorporates different dispatch, team of
basic raw
factories in the types of distribution procurement who
Dhaka and mechanism of own management, sources the raw materials for steel
Chittagong. adjustment of vehicles like transportation, materials and
making process,
Chittagong vital crude truck, lorry, warehousing, spare parts in
factory materials into Dump- order mini.um price and stacking and
gives the final items truck, Fork fulfillment. shortest possible
reclaiming items
facility to including the lifter, pick- lead time.
carry the transmission up, so also
raw of basic crude Hydraulic
distributing to
materials materials crane,
easily from from mechanical various
the port. suppliers and crane etc.
manufacturing
item
advertising to sites, etc.
customers.
Source GPH BSRM has more GPH Ispat has BSRM domestic
Distributor than 10 sophisticated ERP export and sales,
are less than Distribution in software named customized sales,
the BSRM all over the Oracle pricing policy,
country. contract, CRM
and many other
activities.

Make/ Manual and Oracle Based Major Significant GPH BSRM

Assemble Oracle Inventory products items 2020 Revenue: 2020 Revenue:
based System is include steel incorporate steel $111.76 $564.52
Inventory Followed. and steel and steel shapes
System is shapes
Followed.
Deliver GPH is BSRM is GPH has BSRM is not GPH transport BSRM transport
much more flexible almost 90% Established in division, they are division, they are
flexible to than GPH to are in own their depending on their depending on
customer customer transport for transportation. own transport. third party
needs. needs. supplying transport.
Materials.

50
Chapter Five: Summary of the Findings and Recommendation

5.1 Key Findings

Main findings of this thesis are given below
I. Supply chain management cycle that this two company follow include Inventory, Transportation,
Pricing, Information, Sourcing.
II. Factory, wear-house, other structures in GPH Ispat Ltd. is not established position is in process
beside BSRM are well established in factory warehouse and other structure.
III. GPH Ispat Ltd. Inventory system is more effective than the BSRM.

IV. GPH Ispat Ltd. has almost 90% are in own transport for supplying Materials. BSRM is not
established in their transportation. In their transport division they are depends on third party
transport.
V. GPH Ispat Ltd. Distributor is less than the BSRM, BSRM Has More than 10 Distribution in all
over the country.
VI. Main buyer or customer of their products are Construction firm, house building, direct
customers.

5.2 Recommendations for GPH Ispat Ltd.

I. GPH Ispat Ltd. have to develop their factory capacity, warehouse and other structure.
II. Distributor should be increased as the demand of GPH Ispat Ltd. Product in the country.
GPH Ispat Ltd. authority should try more distributors as much as possible.

5.3 Recommendations for BSRM

The following measures can be recommended for the BSRM:
I. BSRM has to establish own transportation system as they depend on third party.
II. BSRM should maintain Manual inventory system beside the oracle-based inventory.

51
5.4 Conclusion
GPH Ispat Ltd. and Bangladesh Steel Re-Rolling Mills Limited (BSRM) Limited are two renowned
companies in the steel industry and they also apply the proper supply chain in practical that’s why, I have
selected this two companies.

Similarities between the two companies: Both of the company is located at Chittagong and those
companies is produced different categories of steel Bar, logistics management, inventory process,
materials sourcing, customer service.

In this thesis discussed about the supply chain driver of GPH Ispat Ltd. and BSRM. GPH Ispat Ltd.
supply chain drivers are Facility, Inventory, Transportation, Pricing, Information, and Sourcing. And also
discussed about the BSRM supply chain management how their inventory is operating, logistics,
distribution etc. after analyzing the derived findings are found and some recommendations are provided
for GPH Ispat Ltd. and BSRM.

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