Rushahed Manzur

ACADEMIC ESSAY TO SUPPORT OUR ARGUMENT WITH APPROPRIATE THEORETICAL DISCUSSION AND REFERENCES. ON SUPPLY CHAIN OF NADIA FURNITURE. SUPPLY CHAIN MANAGEMENT MKT- 418 SEC:1 Submitted to, SUBMITTED BY, MD. ANAMUL HAQUE AFIA NAWRIN ASSISTANT PROFESSOR Business Administration - MD. RUSHAHED MANZUR- SHARIAR IMRAN KHAN- TAFRIN BINTA HASHEM- Submission Date: 6/12/2017 6th december, 2017 Md. Anamul Haque Assistant Professor Department of Business Administration East West University Aftabnagar, Rampura, Dhaka-1212 Subject: Submission of report on Analyzing supply chain policy of Nadia Furniture. Dear Sir, Here is the report regarding supply chain policy of a sales person in furniture sector that you assigned us to conduct. While completing this report we have learned a lot of practical things, and this experience will really help us in the long run. We have followed standard methodological formation to make all our findings and examined all the references to bring the exact output while preparing this report. We would like to thank you for your valuable guidance in every problem that you give us. It will be a great privilege for us if you kindly spend some of your valuable time having seen the full paper and give your valuable opinion. If you should need any query we will be available for any further clarification required, please contact us at-Thank you. Sincerely yours, Afia Nawrin- Md. Rushahed Manzur- Shariar Imran Khan- Tafrin Binta Hashem- Executive summary Supply Chain Management in Furniture Retail Industry tries to determine the current status of an integrated supply chain management in the furniture industry. The importance of the supply chain in the modern economy is discussed as well as the difficult economic conditions for furniture dealers, with consumers spending more on cellphones, the national lottery and transport. The importance of the supply chain as a vehicle to optimize shareholder funds is stressed. The literature study on Nadia Furniture ltd. sets out to prove that as a result of the new paradigm that exists within the organizational system, that the supply chain system needs new ideas, thought process and structures to ensure that the full potential is realized. In order to maximize returns from the supply chain business process, reengineering and design will have to take place. Organizations must be willing and able to radically rethink and re- design the existing process. TABLE OF CONTENTS Introduction ................................................................................................................2 Section 01 ...................................................................................................................5 1.1 Evolution of Supply Chain: ..............................................................................5 1.2 Summary of competitive strategy and supply chain strategy of Nadia furniture in furniture industry: ................................................................................7 Section 02 ...................................................................................................................7 2.1 Competitive Strategy: .......................................................................................7 2.2 Achieving the strategic fit:................................................................................8 2.3 Distribution Network of Nadia Furniture Ltd: ...............................................10 Section 03 .................................................................................................................12 3.1 Evaluation of web-based technologies: ........................................................12 3.2 Information Technology in Nadia Furniture: .................................................13 Conclusion ...............................................................................................................14 Reference..................................................................................................................15 1 Introduction In the present current world, supply chain management is one of the noteworthy and dynamic points of most organizations to meet the requests of their clients. The term store network alludes to the arrangement of exercises engaged with the stream and change of merchandise and the approaches which are utilized to deal with this stream of operations are named as inventory network administration (SCM). SCM successfully coordinates the key partners, for example, providers, makers, merchants and retailers with a specific end goal to limit cost and additionally fulfill client or administration level necessities. Store network includes a two-route process between the providers and clients. Enterprises recognize the hugeness of inventory network administration as a stage towards accomplishing consumer loyalties and to contend all inclusive, in this manner expanding the bond between its providers and clients. Nadia Furniture Since our inception in 1991, NADIA Furniture have gradually emerged as a promising name in the furniture manufacturing arena of Bangladesh. At NADIA, we believe in quality maintenance and a high standard of service to reach out towards both domestic and global customers. Our goal is to mark NADIA Furniture as a highly-repudiated home & office furniture manufacturer in the global market. To do so and simultaneously compete in the furniture market, we have developed Quality Management System (QMS) & comply with all applicable law/s. Modern machineries & technologies paired with experienced designers and technicians enables us to produce word class furniture for our valued customers. All our products go through an intense research, design and quality control after production. Moreover, we also use world class raw materials, hardware and lacquer for our furniture. NADIA offers a unique variety of traditional and contemporary designs at a very competitive price aligned with an excellent after sales service. Thus, strive to gain our customer’s trust and further enhance our brand across border! 2 Mission Creating Better Life. Vision We do product development, create sustainable solution, focus on value for money and establish new stores to make our brand more accessible so that you can enjoy a better life, at home and office. Values People Positive Zero Complexity Meet the Expectation A Powerful We Serve the Society Goal To become "An Excellent Company" — one who is recognized by customers and society as a partner who can create products on a global standard and support them to create values. Products Office: It might be work, but it doesn’t have to feel like it. All it takes is a comfy chair, home office furniture that keeps things organized, and the right lighting for the job. And by making it easier to tackle those to-do, you’ll have more time to spend on your want to-do. 3 Children furniture: It's through playing that children get to develop and learn. That's why all our products, from soft toys to children's bedroom furniture, are designed to spark their imagination and help them discover new things about the world. Living room: a room in a residential house or apartment for relaxing and socializing. Such a room is sometimes called a front room when it is near the main entrance at the front of the house. Bed room: Furniture and other items in bedrooms vary greatly, depending on taste, local traditions and the socioeconomic status of an individual. 4 Section 01 1.1 Evolution of Supply Chain: Supply chain management is the dynamic streamlining of a business' supply-side exercises to augment client esteem and increase upper hand in the commercial center. A Supply Chain comprises of all gatherings specifically and by implication from creation to item advancement. It includes the arranging and administration of all exercises associated with sourcing and acquirement, transformation, and all coordination Management exercises. Along these lines, Supply Chain is "The conveyance of improved client and financial incentive through synchronized administration of the stream of physical products and related data from sourcing to utilization". It helps the business association to contend in the dynamic universal market. The present situation of Supply Chain Management isn't work in late couple of years. It is a continuous procedure began from long decades back. -): Logistics was thought of in military terms. It had to do with procurement, maintenance, and transportation of military facilities, materials, and personnel. Logistic was not considered then as a strategic function. That was known as the “Dormant Years”. -): Changes occurred that could be classified as a first “Transformation.” The importance of logistics increased considerably, when physical distribution management in manufacturing firms was recognized as a separate organizational function. -): The study and practice of physical distribution and logistics emerged within this time. -): Since its introduction in the early 1980s Supply Chain Management has become one of the most popular concepts. A number of journals in manufacturing, distribution, marketing, customer management, transportation, integration, etc. published articles on supply chain management -related topics. 5 -): The evolution of supply chain management continued into the 1990s due to the intense global competition (Handfield, 1998). Drucker (1998) claimed that there is a paradigm shift. Fernie (1995) adopted SCM in the National Health Service. In fact, it was the first paper of Supply Chain Management in the service industry. O’Brien and Kenneth (1996) proposed an educational supply chain as a tool for strategic planning in tertiary education. -): Sampson (2000) explored the customer supplier duality in the service organizations as it pertained to Supply Chain Management in the service industry. Kathawala and Abdou (2003) explored Supply Chain application to the service industry. Cigolini et al. (2004) explored a framework for Supply Chain management based on several service industries including automobile, grocery, computers, book publishing etc. According to the case study conducted at the City University of Hong Kong, Lau (2007) defined educational Supply Chain as the ‘Student’ and the ‘Research’ Supply Chain. Habib (2009a) represents the first large scale empirical study that systematically investigate input of the university, output of the university through educational SCM. Figure: Supply Chain Evolution 6 1.2 Summary of competitive strategy and supply chain strategy of Nadia furniture in furniture industry: Nadia furniture is a well-known organization of Bangladesh. They generally work for big projects with their different kinds of furniture. Competitive strategy defines how a company can satisfy their targeted customers with their product and service compared to their competitors. Nadia furniture offers their furniture in a lower price compared with their quality. They can charge more price because they have a very good quality product. But they don’t do so as they want to satisfy their customer with both product and price. They give 6 month warranty for their product and in this 6 month if anyone comes with defected product they don’t repair it, they just replace it. So, quality, price and the servicing system is the competitive strategy of Nadia furniture’s furniture. Nadia furniture have a good supply chain network. They have 20 plus local and foreign suppliers, they use 80% of the transportation with their own vehicle and only 20% outsourcing transportation. Their product goes through a regular supply chain process. They use both pull and push process. The information system regarding to their supply chain is not up to the mark. They are working on it and they are trying to achieve an ultra-modern information system in 3 years. So, the supply chain process of this company regarding furniture is good but they have to work harder to make it better. Section 02 2.1 Competitive Strategy: Competitive strategy is very important for a company to survive in the market compared with its competitors. Nadia furniture has a good competitive strategy compared with its competitors. It provides a very good quality products with a polished and nice finishing compared with the other products of different companies. They claim to provide the best quality product and a great after 7 sales service. They describe their quality as their strength. But they charge a nominal price for their product so that they can satisfy their customer. They describe their pricing strategy as their weakness. Because they can charge more for their products as they are provided with very good quality. But they can’t do so as they are trying to satisfy customers and achieve a good position in customers mind as well as achieve a strong market share compared with the competitors. Their after sales service strategy is different from their competitors. They provide 1 year warranty for their products and during this 1 year they don’t repair it, they simply just replace the defected product with a new one. This is to be the most effective competitive strategy for the company regarding furniture. 2.2 Achieving the strategic fit: Step 1: Understanding the customer and supply chain uncertainty: To achieve the strategic fit company first needs to understand the customer and supply chain uncertainty. Nadia furniture understands the customer and supply chain uncertainty very nicely.  The quantity of product: The Company can predict the quantity of products they will need in each lot because they have good understanding with the customer demand and most of the customers are loyal to them, so they face less difficult to understand the uncertainty.  The price of the product: They claim that they are offering lower price comparing with the quality of the product. They provide a high quality product which is very much electricity efficient while comparing with the quality the price is less enough.  The variety of products needed: The Company offers varieties of products to the customers so that they can fulfill the various demand of their customer.  The quantity of product needed in each lot: The Company can predict the quantity of products they will need in each lot because they have good understanding with the customer demand and most of the customers are loyal to them, so they face less difficulties to understand the uncertainty.  The service level required: This Company gives a unique after sales service. They don’t repair the defected products; they simply just replace it with a new one within the warranty period. 8  The response time that customers are willing to tolerate: The Company tries to take the shortest possible time to response to the customer demand which is tolerable to the customers.  The desired rate of innovation in the product: The Company also provides innovative products. But in this they are little bit slower as they already provide innovative product. So they bring less innovation in their product. Step 2: Understanding supply chain capabilities: The second stage of achieving strategic fit is to understand the supply chain capabilities. As the supply chain of Nadia furniture is good enough their supply chain capabilities are also good enough.  They are very much responsive to a wide range of quantities that have a great demand.  They deliver their products in shortest possible time and also offer customized product.  They are trying to increase the varieties of products. They offer different types of designs to their customers and still working on it.  The company also tries to build highly innovative products to fulfill the demand of the different types of customers.  They ensure a warrantee of after sales service in a different way than their competitors.  Instead of being the market leader, they are able to handle the supply chain uncertainties very well as they are blessed with lots of loyal customers so that they can cope up with predicting the demand. As they have been doing business for many years, they are pro in these aspects very well through experience. This is how they are responsive. Nadia furniture is not a very good cost efficient company as they are offering very low price but have to maintain the quality, they cannot minimize their production cost and cannot be a cost efficient company. 9 2.3 Distribution Network of Nadia Furniture Ltd: A distribution network is an interrelated arrangement of people, storage facilities and transportation systems that moves goods and services from producers to consumers. Manufacturer INVENTORIES DISTRIBUTORS (1) RETAILERS-1 RETAILERS-2 CUSTOMERS CUSTOMERS DISTRIBUTORS (2) RETAILERS-1 CUSTOMERS RETAILERS-2 CUSTOMERS The Distribution network of Nadia Furniture Ltd is very simple. Collecting raw materials from suppliers is the first step of distribution network for this organization. They collect raw materials from different suppliers. They have both local and foreign raw material suppliers. 80% of total raw materials are provided by local suppliers and approximately 20% of total raw materials are 10 provided by foreign suppliers. After collecting all the raw materials they produce and assemble all the products. This business organization keeps all furniture as inventory in their own warehouse when all of those furniture are completely ready to sell. Different distributors come from different locations and collect that furniture. They deliver those products to many retailers shop from where customers buy their desirable products. Nadia Furniture Ltd invests a lot in big projects. Their main concern is focusing on big projects rather than wholesaling.. Cost Factor Inventory Performance Inventory Cost is Very High. Because of having huge amount of Inventory. Transportation Inbound Transportation cost is low. Facilities and Handling Facility cost is low. Because they keep inventory of their warehouse and doesn’t have to maintain a lot number of outlets. Information IT sector is too weak. So, they needs to invest on it for its development. Service Factor Response Time Performance Response time is moderate. After placing customer order they deliver their product to their retail outlets and then customer can purchase. Product Varity They have low product variety. Product Availability Easy to provide high level of product availability because they have local supplier and manufacturer. Customer Experience Good in terms of their product quality but customer may want their product in more short time. 11 Time to Market Takes too much time. From manufacturer to distributor and from distributor to retail outlet. In this way their product comes to the market. Order Visibility Easy to place order. Return ability No option for general customer but for the whole seller and retailer who bought a large amount of products. Section 03 3.1 Evaluation of web-based technologies: A well-managed supply chain connects the suppliers, manufacturers, distributors and customers by a suitable information system for controlling across boarder in order to achieve optimum productivity, overall satisfaction and joyful relation at cheaper cost. Information technology offers many opportunities for companies to cut cost and improve responsiveness to customer’s needs. Some of the positive points of IT enabled services are:  IT is comparatively less capital intensive.  IT is environmental friendly and clean.  It is not location specific and can be undertaken from anywhere.  It does not require expensive infrastructure facilities. For these reasons IT is now used in many organizations as it is used not only in collection of records but also used in decision making, designing new supply chain structure. 12 3.2 Information Technology in Nadia Furniture: Information technology is used in worldwide but in this sector Nadia Furniture Ltd is a little bit backward. They have introduced a server to collect information from their suppliers to distributors. They have their own inventory system which helps them to reduce the cost. With the help of IT, they can access the calculation of inventory. If inventory is needed they communicate with their suppliers through server and order for more inventories. So with the help of IT, Nadia Furniture Ltd has established an effective relationship between suppliers and manufacturers. Nadia Furniture Ltd uses web-based technologies to communicate with their suppliers through their website (www.nadiafurniture.com) for their consumers. Instead of this, if consumers need any products, they have to contact with retailers directly as they are not so responsive on online. In this aspect, they are staying behind. Even Energypac do not keep any information virtually for their retailers. In this modern era they collect the data manually in papers. So following their website, they have information about suppliers and distributors but do not have any data for wholesalers-retailers and consumers. The organization does not usually deal with their customers directly. They take the work of large projects and serve them with power generating products. This is the reason they did not develop any websites or server for their retailers and consumers. But they should develop their own website for consumers. It will make them more responsive. And as a reputed organization it will create a good image in the mind of consumers which will help Nadia Furniture Ltd in positioning. 13 Conclusion SCM is a significant technique in the world of business, when it followed promptly, improvement in quality, cost, and flexibility of the product and services are evident. It is clear from the evidences cited above that both approaches: (i) furniture business via mail order and (ii) furniture business via retail outlets have unique merits and de-merits. Furniture business which runs its business through online has used pull strategy, maintaining low inventories, and outsourcing the distribution activities to gain a competitive advantage over the traditional business. On the other hand, traditional furniture business is widely accepted by the customers all over the globe due to the visibility and flexibility it provides. Furniture makers like IKEA has well demonstrated the SCM concept in its business and waved the path to success and hence irrespective of the type of business, every company has to identify and adapt the best suitable supply chain management practices in their day to day business to compete in a global environment. At the end we can say that Nadia Furniture Ltd has a strong supply chain management as they achieved strategic fit and also serve their consumers with quality products by keeping the price low, but they need some improvements in their IT sector to grow more as a renowned organization 14 Reference # Sources and outcomes of competitive advantage: an exploratory study in the furniture industryC Dröge, S Vickery, RE Markland - Decision Sciences, 1994 - Wiley Online Library # The globalization of product markets and immiserizing growth: lessons from the South African furniture industry .R Kaplinsky, M Morris, J Readman - World Development, 2002 – Elsevier # Supply chain flexibility: an empirical study..R Calantone, C Dröge - Journal of Supply Chain …, 1999 # http://www.core77.com/posts/43001/Reference-The-Ultimate-Wood-Joint-Visual-Reference-Guide # http://www.theindependentbd.com/printversion/details/104062 # http://www.lightcastlebd.com/blog/2016/01/market-insight-bangladesh-furniture-industry # https://issuu.com/ehsantanim/docs/furniture_industry_of_bangladesh-an # https://bdbanijjo.wordpress.com/tag/furniture-industry/ # https://www.scribd.com/document/-/Furniture-Industry-of-Bangladesh 15