Chapter One: Introduction

Fierce competition, fluctuating market demand and rising customer requirements have resulted in
customers becoming more demanding with increased preferences. This is because of changes in
the market, characterized by shorter product life cycles, more competitive product introductions
and volatility in demand, which make life-cycle demand more uncertain and difficult to predict.
The automotive industry in the twenty-first century, influenced largely by globalization, has
created significant opportunities, and at the same time, placed pressure on manufacturers to
enhance quality, improve styling, increase organizational efficiencies and include innovative
features in their products in an effort to attract customers and expand into new markets. These
challenges imply that if automotive manufacturers wish to succeed, they need to be flexible and
responsive to customer demands.
Supply chain management (SCM) practices started moving towards leaner processapproaches in
an effort to increase supply chain efficiency (reducing costs and eliminatinginefficiencies)
Concepts such as JIT; supplier base rationalization; virtual inventory; outsourcing; customized
and global networks; reduction of buffers in material, capacity and time; and a reduction in the
number of distribution facilities have led to improvements in supply chain performance,
particularly in reducing costs. (Journal of Transport and Supply Chain Management, 2011)
Supply Chain Management is a set of approaches to efficiently integrate suppliers,
manufacturers, warehouses, and stores, so that merchandise is produced and distributed in the
right qualities, to the right locations, and at the right time, in order to minimize system wide costs
while satisfying service level requirements. Handfield and Nichols (2002) defined Supply Chain
Management as the integration of different activities through improved supply chain
relationships, to achieve a sustainable competitive advantage. In fact, SCM requires integration
at strategic, operational and tactical levels. (kamal&Ferdosi, 2009)
Objectives of Study

1. To highlights an overall automobile industry of Bangladesh.

2. To identify the role of Supply Chain Management in Rangs Limited to fulfill customer
needs and demand.
3. To examine the duties and responsibilities of Supply Chain executives to increase
efficiency and effectiveness of Rangs Limited.

1
 4. To provide the recommendations of supply chain management practices more effective at
Rangs Limited.
5. Industrial and Market analysis of Rangs Limited and scope of Triple-A practices in
Rangs Limited.

Scope of Study

Rangs Limited Ltd is the automotive organization carrying operation in Bangladesh and direct
sole distributor of Mitsubishi Motors, Japan. This Study is limited onlyRangs Limited of Rangs
Group. As a student of MBA program, internship report is an important part of academic
program. According to topic, the scope of my report is limited. Because RangsLimited performs
trading business in Bangladesh. I was assigned in Supply Chain department at Chittagong
distribution center. I made discussions with the department head, assistant manager and senior
executivesand collected various information, working and decision making process and studied
other necessary documents needed to prepare the report. The main title of my internship report
is:
“Supply Chain Management practices at Rangs Mitsubishi Limited"

Research Method

For achieving the specific objective of this study, I have collected the related data both from
primary & secondary sources.
Primary data have been collected from:
 Observing different organizational activities.
 Conversation with the staffs of this company.
Secondary data have been collected from:
 Different papers of the Rangs Limited.
 Various records of the Rangs Limited, unpublished data.
 Different textbooks, journals, booklets and
 Web site of Rangs Group.

2
 Limitations of Study

Limitation is one of the great facts for preparing any report. All the term I have faced some
difficulties, which I have considered. In spite of my best effort, I am sure of some leakages
prevailing in this report. These are caused by some limitations that are enumerated below.

 The Project Program was based upon only Rangs Limited, so the report doesn’t show all
department’ activity of Rangs group of companies in depth.

 Although I have obtained wholehearted co-operation from employees of Rangs Limited

but they could not manage enough time to deal with my report.

 The various records and Web page are the main secondary sources of the information but
this information was not enough to complete the report and it was not identified clear
idea about this company.

 The main limitation was collection of relevant data and information due to the
confidentiality of the administration.

 The main supply chain operations are performed at Corporate Office in Dhaka. So there
have lake of information in distribution center, Chittagong.

But behind this limitation, there is more prosperity if we overcome this limitation.

3
 Chapter Two

Rangs Group is a diversified and growing Group of Companies representing Global brands in
Bangladesh. Rangs is a well-known name in business sector in Bangladesh since 1979. Rangs
Group is one of the premier conglomerates in Bangladesh with headquarters in Tejgaon, Dhaka,
they conduct business countrywide. Driven by the passion to be the best and with a team of
unique professionals, it brings trusted brands of the world within the reach of everyone in
Bangladesh.

Rangs Group started its journey as a single business unit in 1979 and now has grown
successfully in multiple sectors. Striving to implement the practical initiatives required achieving
its vision and guided by a relentless focus on values, the group maintains close relations with its
foreign principals thereby guaranteeing quality products and efficient service to their valued
customers. Rangs Group believes in delivering operational excellence to meet commitments. For
the progression of its mission it has diversified and grown to be one of the largest industrial and
trading conglomerates of the country under the same management. With diversification and a
rich variation of products it has earned repute among Bangladeshi people as a distributor of
premium and quality brands and services. (Source: www.rangsgroup.com)

4
Rangs Limited in Chittagong

Since its journey in Chittagong, Rangs Limited has established itself as a premium brand in the
category of Brand new vehicles. As Chittagong vehicle market is mainly based on recondition
vehicles, Rangs Limited has been putting its efforts to penetrate Chittagong vehicle market by
creating awareness for brand new vehicles among the potential customers and recondition
vehicle users. Though Chittagong is fiercely competitive market for vehicles, Rangs Limited is
moving forward and making its mark gradually and steadily in this strategic business area.
It is been observed that the recondition vehicles occupy about 80%-90% of the total market share
and the brand new vehicles such as MITSUBISHI, NISSAN, TOYOTA, ISUZU, HONDA etc.
are chasing rest 10%-20% market share.

Among the brand new vehicle marketers, once market leader MITSUBISHI is pressing hard to
maintain its market share as other Japanese brands are offering their products with lesser prices
in comparison to Mitsubishi in Chittagong.

As awareness among the vehicle users is ever increasing for brand new vehicles and price
difference is shrinking between brand new and recondition vehicles, it can be expected that
MITSUBISHI will be able to increase its market share in the days to come.

Business Segments

 Automobiles  Media & Publications

 Electronics  Petrochemicals

 Finance, Securities & Banking  Pharmaceuticals

 Fisheries  Real Estate

 Garments  Services, Maintenance & Security

 ICT  Telecom

 Insurance

5
Strategic Business Units
 Automobiles Ranks ITT Limited
Rancon Automobiles Limited Insurance
Rancon Imports Limited Reliance Insurance Limited
Rancon Motor Bikes Limited Media & Publications
Rancon Motors Limited DainikShokalerKhobor
Rancon S Ltd Publications Limited
Rancon Service Center Limited Media World Limited
Rangs Limited Petrochemicals
Rangs Motors Limited Gulf Oil Bangladesh Limited
Rangs Workshop Limited Ranks Energy Limited
 Electronics Pharmaceuticals
Rangs Industries Limited Rangs Pharmaceuticals Limited
 Finance, Securities & Banking Real Estate
Bank Asia Limited Rancon Engineering Limited
Premium Securities Limited Rangs Properties Limited
 Fisheries Services, Maintenance & Security
Sea Resources Group of Companies Rancon Services Limited
 Garments
Rancon Sweaters Limited Telecom
 ICT Ranks Telecom Limited
Shield Security Services Limited
Values
Over the years Rangs is providing customers with the very best in product selection and service.
The group continually invests in modernizing its management system and designs specific in-
house training programs targeted towards improving the creative abilities of its people. Rangs is

6
confident that the trust and goodwill of its customers. The vast experience of its management,
and the dedication of its work force, will enable the organization to lead Bangladesh towards a
prosperous future. Its values are-

 Integrity
 Commitment
 Passion
 Determination
 Speed
(Source: www.rangsgroup.com)

7
Products and Services of Rangs Group
As Rangs has multiple business sectors they are providing different category product and
services. Such as Automobile, Real-estate, Construction, Renewable Energy, Servicing, Media &
Publications, Telecommunication etc. Here for product and services we can say about electronic
broadcasting, real estates and automobile sectors in details. Brands OfRangs Group are:

Automobile:

Brand Name Logos Origin Respective Location /

Concern of Distribution
Rangs Group Center
Mitsubishi Japan Rangs Limited Dhaka and
Motors Chittagong

Mercedes Benz Germany Rancon Motors Dhaka and

Lmited Chittagong

Honda Japan DHS Motors Ltd Dhaka and

Chittagong

Mahindra India Rangs Limited Dhaka and

and Rangs Chittagong
Motors Limited

Suzuki India Rancon Motor All over the

Bangladesh Bikes Limited Bangladesh
through
Dealership and
Company’s own
distribution center
in Dhaka and
Chittagong
Eicher India Rancon Motors Dhaka and
Limited Chittagong

8
 Imported all Toyota, Nissan, Japan Rancon Imports Dhaka and
kinds of Honda and Others Limited Chittagong
recondition
vehicles

Rangs Industries Limited:Rangs Industries Ltd (RIL) is one of the biggest players in the
electronics industry in Bangladesh that was established in 1979 had spread its wings all over the
country and has workforce of more than 700 and is a pioneer in the Electronics market. RIL is
one of the sister concerns of Rangs Group of Companies (RGC), which is one of the most
reputed and largest groups in Bangladesh. The company was registered under the Companies Act
of 1913 and was incorporated in Bangladesh on 11th April, 1985. Rangs Industries Limited at
184, Tejgaon I/A ,Dhaka-1208 is the distributor of Toshiba & Samsung Household Appliance in
Bangladesh and engaged in assembling LCD/LED TV (TOSHIBA & SAMSUNG Brand) by
importing those in CKD and SKD form which are being sold in the market on value addition.

It imports and sale the Refrigerator, Freezer, Air Conditioner, Generator, Washing Machine and
other electrical home appliances. All products are being sold through wide range of network 32
Sales centers and more than 150 authorized dealers throughout the country. Rangs Industries
Limited has highly skill, well trained & experienced workforce at all departments who are
working all departments all over Bangladesh.

Rangs Properties Limited: Rangs Properties Limited is a leading property developer of

modernbuildings that are the representations of architecture at its best. Rangs Properties Limited
has built luxurious apartments and commercial complexes in many prime locations of the
country. They do not compromise when it comes to locations, selection of architects, technology,
engineering, eco-friendliness, construction materials, systematic monitoring and reliable after-
sales service. (Source: www.rangsgroup.com)

9
Rangs Workshop Limited
Rangs Workshop Limited (RWL) has two service centers. One of them is in Dhaka and the other
in Chittagong. It has the capacity to provide services about 15000 vehicles annually. RWL not
only caters to Mitsubishi owners, but also well equipped to provide services to the other branded
automobiles.

Rangs Workshop Limited was set up with the intention of providing world class services for the
car owners who really care. To repair the vehicle by the people who actually built it in Japan
with the identical component ‘Genuine Parts’ made in Japan and to set up a standard for vehicle
workshop in Bangladesh. Over the years Rangs Workshop has remained true to providing
customers with the very best in product and services. Engineers are dedicated to quality and their
‘Attention to detail’ can be the source for inspiration for other professionals. Rangs possesses
two of the most well equipped and modern automobile workshop in Dhaka and Chittagong.
Rangs regularly send the engineers and mechanics to Mitsubishi Japan to gain the latest technical
updates. A well-stocked inventory guarantees efficient and cost effective supply of genuine
Mitsubishi spare parts.

10
Services of Rangs Workshop Limited
 Provides state-0f-the-art after sales services for Mitsubishi, Honda, Mercedes Benz and
others vehicles.
 Provides required spare parts from mother company within shortest possible time
 Imports spare parts from Japan and relevant countries to fulfill customer demand
 Towing vehicles from any location in the city to the workshop
 Maintaining every detail and service history of each vehicles till date
 Maintaining good relation with valued clients. (Source: www.rangsgroup.com)

Selected Customer Segment of Rangs Mitsubishi Limited

SL Category Selected Group Selected Area Selected

Product
1 Businessmen / BGMEA, BKMEA, Agrabad C/A, Both Luxury &
Entrepreneur CCCL, CCL BaizidBostami Commercial
I/A, Vehicles
Shagorika I/A,
Fouzdarhat I/A,
Kalurghat I/A
2 Corporate High Corporate Groups, Agrabad C/A, Luxury Vehicles
Official Banks, Leasing, CDA Avenue,
Insurance, Shipping Jamal Khan
Roadd, Jublee
Road.
3 Govt. & Tender CPA, Customs, CDA, Located in Luxury Vehicles
Sale WASA, R&H, T&T, different areas
Oil Companies, KPM.
4 EPZ High officials of CEPZ & KEPZ Luxury Vehicles
different factories in Area
CEPZ & BEPZA
5 Defense Service Army, Navy, BDR, Mainly located in Luxury Vehicles
Air-force, RAB, different defense
Police, DGFI base areas

6 Hotel & Guest House Management Bodies Located in Luxury Vehicles

different areas
7 Educational Institute Governing Bodies & CU, USTC, PU, Both Luxury and
Teachers SU, VU, IIUC & Commercial
different colleges Vehicles

11
 8 Clinic and Hospital Doctors Jamal Khan, O R Luxury Vehicles
Nizam Road,
Mehdibag,
CMCH, USTC
9 NGO Management Bodies Located in Luxury Vehicles
different areas
(Source: Marketing Department, Rangs Limited, Chittagong)

Few vehicles description of Mitsubishi brand available in Bangladesh

Mitsubishi Lancer Ex (Basic)

Engine Type 1.5 L, 4 Cylinder 16 Valve

DOHC MIVEC
Origin Japan
Total Displacement 1499 CC
Transmission 4 speed Automatic
Fuel Petrol / Octane

Mitsubishi Attrage:

Engine Type 1.2 L, 12 Valve, 3 Cylinder,

DOHC MIVEC
Total Transmission 1193 CC
Transmission CVT
Fuel Type Petrol / Octane
Origin Thailand
Others 15 inch alloy wheels, world’s
most Fuel economy vehicle,
compacted Engine.

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 Mitsubishi Outlander

Engine Type 2.0 L, 4 Cylinder 16 Valve

DOHC MIVEC
Transmission CVT
Origin Japan
Total Displacement 1998
(CC)
Fuel Type Petrol / Octane
Wheel Drive Electronically Controlled 4
WD

Mitsubishi L 200 Pick Up (Double Cabin)

Engine Type 4D56 D4 DI C/R

Origin Thailand
Fuel Type Diesel
Displacement 2477 CC
Drive System 4 WD

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 Lancer (Classic)

Engine Type 1.5 L, 4 Cylinder 16 Valve

DOHC MIVEC
Total 1499CC
Displacement
Transmission 4 speed Automatic
Fuel Petrol / Octane
Origin Japan
Others HID Light, Keyless entry system,
Fog light.

Lancer (Elegance)

Engine Type 1.5 L, 4 Cylinder 16 Valve

DOHC MIVEC
Total Displacement 1500 CC
Transmission 4 speed Automatic
Fuel Petrol / Octane
Origin Japan
Others Sunroof, HID Light,
Keyless entry system,
Fog light.

Chapter three Project Plan: Findings and Analysis

A supply chain is a network of facilities and distribution options that performs the functions of
procurement of materials, transformation of these materials into intermediate and finished

14
products, and the distribution of these finished products to customers. Supply chains exist in both
service and manufacturing organizations, although the complexity of the chain may vary greatly
from industry to industry and firm to firm.

Supply chain management consists of developing a strategy to organize, control, and motivate
the resources involved in the flow of services and materials within the supply chain. A supply
chain strategy, an essential aspect of supply chain management, seeks to design a firm’s supply
chain to meet the competitive priorities of the firm’s operations strategy. Supply chain
management encompasses the planning and management of all activities involved in sourcing,
procurement, conversion, and all logistics management. Importantly, it also includes
coordination and collaboration with channel partners. Here the channel partners can be suppliers,
intermediaries, third-party service providers, and customers. In essence, supply chain
management integrates supply and demand management within and across companies.

According to William J. Stevenson “A supply chain is the sequence of organizations – their

facilities, functions, and activities – that are involved in producing and delivering a product of
service. The sequence begins with basic suppliers of raw materials and extends all the way to the
final customer. Facilities include warehouses, factories, processing centers, distribution centers,
retail outlets, and offices.”

According to Mentzer and other “Supply chain management is defined as the systematic,
strategic coordination of the traditional business functions and the tactics across these business
functions within a particular company and across businesses within the supply chain, for the
purposes of improving the long-term performance of the individual companies and the supply
chain as a whole.”

According to Krajewski, Ritzman, and Malhotra“Supply chain management consists of

developing a strategy to organize, control, and motivate the resources involved in the flow of
services and materials within the supply chain. A supply chain strategy, an essential aspect of
supply chain management, seeks to design a firm’s supply chain to meet the competitive
priorities of the firm’s operations strategy.”

15
Supply Chain (SC) Drivers and Obstacles

Performance of the supply chain can be determined with the help of the drivers. The drivers of
the supply chain consist of three logistical drivers and three cross functional drivers.

(A) Logistical Drivers

Facilities:
Facilities are the physical locations where the products stored or assembled. The major types of
facilities are production sites and the storage sites. Economies of scales are used in centralization
of facilities to increase supply chain efficiency.

Inventory:
Inventory consists of the raw materials, work in progress and the finished goods. Changing
inventory policies can largely effect the efficiency and the responsiveness of the supply chain.
Three basic decisions to be taken by the business regarding inventory are: cycle, safety and the
seasonal inventory decisions.

Transportation:
Transportation refers to the modes and routes for moving inventory throughout the supply chain.
Faster transportation ensures more responsiveness but less efficiency of supply chain.
Transportation supports a firm's competitive strategy. The different ways of transportation
includes rail, road, sea water, pope lines and the air ways. Electronic transport is the fastest and
the efficient mode of transportation. Transportation decisions includes mode, routes and in house
or outsourcing the transportation.

16
(B) Cross functional:

Information:
Information connects various supply chain partners and allows them to coordinate activities.
Information is crucial to the daily operations at each stage of the supply chain. An information
system can enable a firm to get a high variety of customized products to customers rapidly and to
understand the changing customers tastes and preferences.

Sourcing:
Sourcing is the process of purchasing the materials required for the production of the final
products. Components of the sourcing decisions are the evaluation and the selection of the
suppliers, in house or outsourcing.

Pricing:
Pricing involves determining the charges for the goods or services offered by the manufacturers.
The price of the product effects the buying patterns of the customers thus effecting the supply
chain performance.
All the above stated drivers are very crucial in determining the success of the supply chain
management process. (Source: Chopra, Meindl&Kalra, 2013)

A Framework for Structuring Drivers

The combined impacts of these drivers determine responsiveness and efficiency of the entire SC.
SC strategy determines how the supply chain should perform with respect to efficiency and
responsiveness. SC then use the supply chain drivers to reach the performance level the SC
strategy dictates.(Source: Chopra, Meindl&Kalra, 2013)

17
 (a) Facilities

Role in the supply chain

 the “where” of the supply chain

 manufacturing or storage (warehouses)

Role in the competitive strategy

 economies of scale (efficiency priority)

 larger number of smaller facilities (responsiveness priority)

Components of facilities decisions

Location

 Centralization (efficiency) vs. Decentralization (responsiveness)

 Other factors to consider (e.g., availability of quality workers, infrastructure, proximity to

customers),

18
  Capacity (flexibility versus efficiency)

 Manufacturing methodology (product focused versus process focused)

 Warehousing methodology (SKU storage, job lot storage, cross-docking)

 Overall trade-off: Responsiveness versus efficiency

(b) Inventory: Role in the Supply Chain

 Inventory exists because of a mismatch between supply and demand

 Source of cost and influence on responsiveness

 Inventory and flow time are “synonymous” in a supply chain

Inventory: Role in Competitive Strategy

 If responsiveness is a strategic competitive priority, a firm can locate larger amounts of

inventory closer to customers

 If cost is more important, inventory can be reducedto make the firm more efficient

Components of Inventory Decisions

 Cycle inventory: It is theaverage amount of inventory used to satisfy demand between

shipments. The size of the cycle inventory is the result of the production, transportation,
or purchase of materials in large lot.

The basic trade off supply chain managers face is the cost of holding large lots of
inventory (when cycle inventory is higher) versus the cost of ordering product frequently
(when cycle inventory is low)

 Safety inventory: It is the inventory held, in case demand exceeds expectation, it is held
to counter uncertainty.

19
Therefore, choosing safety inventory involves making a trade off between the costs of carrying
too much inventory versus cost of losing sales due to not having enough inventory.

 Seasonal inventory: It isbuilt up to counter predictable seasonal variability in demand

The basic trade offiscost of carrying additional inventory versus cost of flexible
production

 Overall trade-off: Responsiveness versus efficiency

 more inventory: greater responsiveness but greater cost

 less inventory: lower cost but lower responsiveness
(c) Transportation

Transportation: Role in the Supply Chain

 Moves the product between stages in the supply chain

 Impact on responsiveness and efficiency

 Faster transportation allows greater responsivenessbut lower efficiency

 Also affects inventory and facilities

Transportation: Role in the Competitive Strategy

 If responsiveness is a strategic competitive priority, then faster transportation modes can

provide greater responsiveness to customers who arewilling to pay for it

 Can also use slower transportation modes for customers whose priority is price (cost)

 Can also consider both inventory and transportationto find the right balance

Components of Transportation Decisions

 Mode of transportation:

 air, truck, rail, ship, pipeline, electronic transportation

20
  vary in cost, speed, size of shipment, flexibility
 Overall trade-off: The fundamental trade off for transportation is between the cost of
transporting a given product (efficiency) and the speed with which that product is
transported (responsiveness). Using fast modes of transportation raises responsiveness
and transportation cost but lowers the inventory holding cost.

(d) Information

Information: Role in the Supply Chain

 The connection between the various stages in the supply chain – allows coordination
between stages

 Good information can help improve the utilization of supply chain assets and the
coordination of supply chain flows to increase responsiveness and reduce costs.

Information: Role in the Competitive Strategy

The right information can help a supply chain better meet customer needs at lowest cost.
he appropriate investment in Information technology improve visibility of transitions and
coordination of decision across the supply chain.

Components of Information Decisions

Push (MPS) versus pull (demand information transmitted quickly throughout the supply
chain)
Coordination and information sharing
Forecasting and aggregate planning
Enabling technologies
 EDI
 Internet
 ERP systems
 Supply Chain Management software

21
Overall trade-off: Responsiveness versus efficiency
Sourcing

Sourcing: Role in the Supply Chain

Set of business processes required to purchase goods and services in a supply chain
Supplier selection, single vs. multiple suppliers, contract negotiation.

Sourcing: Role in the Competitive Strategy

Sourcing decisions are crucial because they affect the level of efficiency and responsiveness in
a supply chain
In-house vs. outsource decisions- improving efficiency and responsiveness
Sourcing decisions are crucial because they affect the level of efficiency and responsiveness in
a supply chain
In-house vs. outsource decisions- improving efficiency and responsiveness

Components of Sourcing Decisions

In-house versus outsource decisions

Supplier evaluation and selection
Procurement process
Overall trade-off: Increase the supply chain profits

Pricing

Pricing: Role in the Supply Chain

Pricing determines the amount to charge customers in a supply chain
Pricing strategies can be used to match demand and supply

Pricing: Role in the Competitive Strategy

Firms can utilize optimal pricing strategies to improve efficiency and responsiveness
Low price and low product availability; vary prices by response times

22
Components of Pricing Decisions

Pricing and economies of scale

Everyday low pricing versus high-low pricing
Fixed price versus menu pricing
Overall trade-off: Increase the firm profits

Obstacles to Achieving Strategic Fit

A company’s ability to find a balance between responsiveness and efficiency that bestmeet the
needs of the targeted customer is the key to achieving strategic fit
Companies face many obstacles in deciding where this balance is to be located on the
responsiveness spectrum

Obstacles

Increasing variety of products: Increased variety (mass customization) tend to raise uncertainty,
and uncertaintyfrequently results in increased cost and decreased responsiveness

Decreasing product life cycles: This makes the job of achieving strategic fit more difficult as
supply chain must constantly adapt to manufacture and deliver new product in addition to coping
with these product’s demand uncertainty

Increasingly demanding customers: Today’s customers are demanding faster fulfillment, better
quality and betterperforming products for the same price they paid years ago means that the
supplychain must provide more just to maintain its business

Fragmentation of supply chain ownership

 Now-a-days most firms have become less vertically integrated

 More members in supply chain for providing goods

23
  Many owners with its own policies and interests, the chain (network) morecomplicated to
coordinate.

Globalization

 Supply chains are more global

 Global supply chains creates many benefits such as ability to source from a globalbase of
suppliers who may offer better or cheaper goods than were available in acompany’s home
nation
 Suppliers are apart making coordination much more difficult
 Removal of trade barrier results in increased competition from global companies
 Companies that once protected has to find time for responding to needs of customer that
arise due to competition
 Now more strain on supply chain better trade-off

Difficulty executing new strategies

 Creating successful strategy is not easy

 Skillful execution of strategy is as important as creating successful strategies
 For instance others could figure out Toyota’s brilliant strategies; the difficulty was
inexecuting that strategy.

Elements of Supply Chain:

Supply chain management involves coordinating activities across the supply chain. Central to
this is taking customer demand and translating it into corresponding activities at each level of the
supply chain. The key elements of supply chain management are listed in the following table

Elements Typical Issues

Customer Determining what products and / or services customers want.
Forecasting Predicting the quantity and timing of customer demand.
Design Incorporating customers, wants , manufacturability, and time to
market
Capacity Planning Matching supply and demand.
Processing Controlling quality, scheduling work.

24
 Inventory Meeting demand requirements while managing the costs of
holding inventory.
Purchasing Evaluating potential suppliers, supporting the needs of
operations on purchased goods and services.
Supplier Monitoring suppliers quality, and flexibility, maintaining
supplier relations.
Locations Determining the location of facilities.
Logistics Deciding how to best move information and materials.

(Source: Supply and Demand survey on automotive components, 2002)

Supply Chain Management Model:

The supply chain management model viewed as a pipeline shows the scope of this definition. It
is important to note that supply chain management is about the co-ordination of product flows
across functions and across companies to achieve competitive advantage and profitability for the
individual companies in the supply chain and the supply chain members collectively.(Source:
Supply and Demand survey on automotive components, 2002)

25
The Need for Supply Chain Management

In the past, most organizations did little to manage their supply chains. Instead, they tended to
concentrate on their own operations and on their immediate suppliers. However, a number of
factors make it desirable for business organizations to actively manage their supply chains.

The major factors are:

 The need to improve operations

 Increasing levels of outsourcing
 Increasing transportation costs
 Competitive pressures
 Increasing globalization
 Increasing importance of e-commerce
 The complexity of supply chains

Supply Chain Management Model:

The supply chain management model is viewed as a pipeline shows the scope of this definition.
It is important to note that supply chain management is about the co-ordination of product flows
across functions and across companies to achieve competitive advantage and profitability for the
individual companies in the supply chain and the supply chain members collectively

Process Measures:
Three major processes related to supply chains are customer relationship, order fulfillment, and
supplier relationship. It is important to monitor the performance these internal processes as well

26
Process Measures:
Three major processes related to supply chains are customer relationship, order fulfillment, and
supplier relationship. It is important to monitor the performance these internal processes as well
as the entire supply chain itself. Supply chain managers monitor performance by measuring
costs, time and quality. Following table contains examples of operating measures for the three
processes.
Supply chain process measures:
Customer Relationship Order Fulfillment Supplier Relationship
1. Percent of orders taken 1. Percent of incomplete 1. Percent of suppliers
accurately. orders shipped. deliveries on time
2. Time to complete the order 2. Percent of orders shipped 2. Suppliers lead times
placement process on tie. 3. Percent defects in services
3. Customer satisfaction with the 3. Time to fulfill the order and purchased materials
order placement process 4. Percent of botched 4. Inventory levels of
services of returned items suppliers and purchased
5. Cost to produce the components
service of item
6. Customer satisfaction with
the order fulfillment process
7. Inventory levels of work-
in-process an finished goods

Successful Supply Chain Management: Required Steps

Integrating information is the first step in supply chain management. Then analyze this
information to determine which actions to take within the context of automated business
processes. Furthermore, to be most effective this information should automatically trigger a
corresponding product transition. The tight coupling of execution and decision-making is an
essential ingredient to effective supply chain management.

27
Today's information technologies remove communication barriers, enabling an improved flow of
information among all members of the supply chain. Early adopters of these technologies have
intensified the competitive marketplace in which all businesses must now operate.

The most successful companies realize they need a step-by-step approach to chart a business's
course toward high-performance supply chain management. Those steps include:
 Achieving execution excellence by fully automating and optimizing business practices.
 Extending the enterprise to embrace all members of the supply chain.
 Integrating business systems with those of customers, suppliers, and partners to create a
common information foundation.
 Deploying real-time decision support to increase responsiveness.
 Investing in re-educating and re-orienting employees, vendors, and other members of the
supply chain on the practices needed to optimize business processes.
 Making a company-wide commitment to creating and managing a more complex
organization capable of tackling global business issues.

Effective coordination and trust based relationship among partners is the key to supply chain
success. To achieve strong bound resulting from effective coordination, supply chain
professionals should focus on the following:
 Obtain top management commitment to coordinate with supply chain partners
 Devote resources for coordination
 Align incentives and goals for all partners
 Improve productivity by reducing duplication or through effective efforts at appropriate
stages
 Design effective conflict resolution mechanisms
 Focus on effective communication at all stages in supply chain
 Use technology to improve connectivity in supply chain
 Share the benefits of coordination equitably among the partners
(Source: Supply and Demand survey on automotive components, 2002)

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Departmental Organogram – RangsMitsubishiLimited

Rangs Mitsubishi Limited’s Supply Chain Function has three departments and their activities are
discussed below:

1. Demand and Supply Planning

2. Procurement

3. Customer Service and Distribution

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How RangsLimited’s Supply Chain Works

30
 1. Demand and Supply Planning: (D&SP)

D&SP is regarded as one of the most critical area in Supply Chain. They perform the primary
sales planning and supply planning at National level. Based on the planning figures prepared by
D&SP all other areas of Supply Chain work.

 National Consensus Demand Planning (CDP) for each vehicle type on 12 months horizon

 National Supply Planning for each product on 12 months horizon.

 Material Requirement Planning (MRP) for all imported spare parts, corporate and
individual customers.

 Ordering the vehicles and spare parts by Purchase Requisition while maintaining agreed
Lead time with Procurement.

 Participation on Monthly Sales Review (MSR) meeting organized by Sales Department

and facilitate the future 12 months demand planning process.

 Participation on Monthly Gap Review (MGR) meeting organized by Finance Department

and checking whether there is any gap on the budget capacity versus demand planned.

 Organizing the Monthly Forecast Review (MFR) with all Department Directors and Sign
off the Consensus Demand Plan (CDP) came through the MSR and MGR meeting.

 Organizing the Monthly Operational Review (MOR) with all Department Heads to check
whether there is any operational issue to meet MFR signed CDP.

 Ensuring that right brand is available at the right time at right location.

 Optimizing Inventory level for all vehicles.

 Demand planning accurately to facilitate Net Working Capital target of the company.

2. Procurement: Procurement is responsible for procuring and ensuring timely arrival of

the vehicles and spare parts that has been ordered or planned by Demand and Supply
Planning Functions with optimizing costs and ensuring higher level of customer
responsiveness. Procurement of Rangs Mitsubishi Limited has three key areas and their
activities are discussed below:
(a) Order Placement (Make to Order, Make to Stock and Assemble to order)

31
 (b) Documentation and LC Operation
(c) Inbound Logistics

(a)Order Placement: In Rangs Mitsubishi Limited order placement has three types. One is
Make to Stock – for Rangs Mitsubishi Stock , another one is Make to Order and final one is
assemble to order.

 Make to Stock: Holding vehicles in stock for immediate delivery, thereby minimizing
customer’s delivery times which is called push supply chain process. It’s a standardized
system of procurement.
 Make to Order:In the make to order procurement system, vehicles are ordered to Mother
Company according to customer specification in small quantity. In case of Rangs
Mitsubishi Limited only Government tender order are placed in make to order
procurement system. It’s also known as customized procurement system.
 Assemble to order:Purchase a wide variety of vehicles from relatively few assemblies
and components after the customer orders are received.Japanese automaker Mitsubishi
Motors assembles two more cars in Bangladesh since 2012 under a joint venture with
state-run Progoti Industries Ltd. Mitsubishi assembles Sedan Car Lancer EX and Pajero
Sports Jeep at Progoti's Chittagong Plant.

(b) Documentation and LC Operation:

 Prepare Letter of Credit (L/C) by authorized Bank and forwarding to the supplier.
 Define the mode of payment, Bank selection etc.
 Collect the necessary documents from Supplier before and after Dispatch like Bill of
Lading, Bill of Entry, Packing List, Certificate of Origin, Commercial Invoice,
Assessment Certificate and Others.
 Define Mode of Dispatch (By Sea).
 Dispatch monitoring by checking in website.
 Ensuring Insurance coverage during transportation.
 LC settlement when product reaches Chittagong port.
 Document submission to Inbound Logistics for further processing from Chittagong port.

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(c)Inbound Logistics: Inbound Logistics is an integral part of Supply Chain Management in
Rangs Mitsubishi Limited. Their tasks start right after getting the final shipment documents from
Head office. Inbound Logistics mainly works to release the imported items from Chittagong port
or Dhaka Airport (Spare parts) or Mongla port. The head of supply chain arrange the Duty
payment to government. After getting the release they also ensure the transportation from port to
warehouse or bridging to customer directly. Their key tasks are:
 Ensuring Supply:
In ensuring supply, vehicles are bought from exporting country to the respective warehouse in
Dhaka or Chittagong. Inbound Logistics maintains production availability throughout the
process. There are two types of imported vehicles: for stock and tender order. Inbound Logistics
basically helps business to bring the imported vehicles at right time and in right place. Its main
operation is monitoring, follow-up the imported product so that supply is ensured. It is done with
ensuring maximum advantage of the business.
 Customs Clearance:
Inbound Logistics monitors customs activity of imported vehicles as per compliance, ensuring
proper commercial value and Duty & Taxes with H.S. Code (Harmonized Coding System). It
facilitates all customs activity getting the important materials within a specified lead time.

 Sea-Transport:

Inbound logistics also look after sea transports related to imported vehicles. It dispatch load to
country of origin to country of destination within the whole process. It contracts with shipping
agents who are carrying goods from one country to another.
 Inland Transport:
Inbound logistics maintain inland transport services carrying the vehicles from different part to
warehousespecially in Dhaka and Chittagong.
 Legal Activity:
Inbound logistics also accomplish legal activity such as resolving disputes at customs end for any
variations of imported vehicles quantity or documents. It settles all disputes as per import Policy
order, Valuation rules, Customs Act and NBR (National Board of Revenue).

33
  Claim Settlement:
Furthermore, inbound logistics facilitates insurance claims of imported vehicles if any damages
occur. It also carries insurance as act retrieved all imported damaged shipments and also any
other damage shipment. These all occurs as per Insurance norms defined for each and every
condition.

3. Customer Service and Distribution (CSD):

To provide after sales service to customer, Rangs group has a specialized concern named Rangs
Workshop Limited which is equipped with competent engineers, machineries, and tools in Dhaka
and Chittagong. It also ensures the genuine motor parts of Mitsubishi, Mercedes Benz, Honda
and other brands. It has own supply department which ensure the availability of this parts. Its
supply chain activities are summarized below:

 Parts Catalogue named ASHA software where each and every parts has its unique ID
number.
 After taking parts ID number, there have another software named SPICE which ensure
about the availability of required parts, production time etc.
 Opening the LC for those required parts after taking approval from Audit, Finance and
Accounts department.
 Arrival of parts at Dhaka central warehouse where they set cost based price of parts and
input data at central ERP software.
 Finally, all the distribution center can get information about required parts from ERP
software and collect from there.

The lead time from order place to receive goods is about 14 days by courier, 30 to 35 days by air.
In addition, Rangs Workshop Limited is committed to provide any unavailable spare parts to its
valuable customers. In that case, customer has to deposit 50 % of total value in advance for
required parts.

Distribution Center:

34
Distribution refers to the steps taken to move and store a product from the supplier stage to a
customer stage in the supply chain. Distribution occurs between every pair of stage in the supply
chain. Distribution is a key driver of overall profitability of a firm because it affects both supply
chain cost and customer value directly.

Factors Influencing distribution network design:

Performance of distribution network should be evaluated along two dimensions:

 Customers’ needs that are met

 Cost of meeting customer needs

Elements of customer service influenced by network structure:

 Response Time
 Product Variety
 Product Availability
 Customer Experience
 Time to market
 Order visibility
 Returnability

Changing the distribution network design affects the following supply chain costs:

 Inventories
 Transportation
 Facilities and Handling
 Information

As the number of facilities in a supply chain increases, the inventory and resulting inventory
costs also increase.

To decrease inventory costs, firms try to consolidate and limit the number of facilities in the
supply chain network.

35
If the number of facilities is increased to a point where inbound lot sizes are also very small

Duties and Responsibilities:

I was assigned to Procurement, Customer Service and Distribution center of Rangs Mitsubishi
Limited Supply Chain department. My major tasks were:

 Maintain Stock Report

 Bridging of all vehicles of Rangs Limited, Rancon Imports, DHS Motors, JMC
 Vehicles Registration and Registration related task
 All vehicles receiving form port
 Vehicles bridging register maintaining
 Maintaining advance requisition
 Maintaining adjustment register
 Vehicles delivery to Government sector like BAF, Army, BGB and so on.
 Liaison maintain with Dhaka
 All procedure of BRTA
 Supervising spare parts procurement of workshop.

Maintain Stock Report

There have two types of stock. One is inbound stock at Rangs Limited’s Chittagong showroom
and another one stock is kept in Oxygen warehouse for sale. Generally at showroom there have
the capacity to show at best 10 vehicles from Mitsubishi, Mahindra, Honda, Mercedes Benz
brand and for imported vehicles like Toyota. After realizing vehicles from port this stock level
need to adjust and there need to send a periodic report to head office about the stock level.

Bridging vehicles of all concern of Rangs Group:

Another important function of Rangs Limited’s supply chain is bridging vehicles of all concern
to direct customer or to Dhaka warehouse. This bridging task is completed with help of Rangs
Limited’s own drivers and port authorized drivers. Generally time schedule of bridging is
determined by head office. Such bridging has two moods. One is by road and another one is by

36
wagon. In case of wagon, there to reserve ticket at Chittagong Railway by paying a fixed
amount.

37
Vehicles Registration and Registration related task:

To register brand new vehicles there need to submit few documents to Bangladesh Road
Transport Authority (BRTA). Like.

 Application in prescribed form

 Two copy passport size photograph.
 Original and duplicate copy of all shipping documents like Bill of Entry, Commercial
Invoice, Packing List, Bill of Lading, Certificate of Assessment,
 Sales intimation letter from both buyer and seller
 TIN Certificate
 In case of foreign citizen, copy of work permit in Bangladesh and copy of VISA.
 Copy of Bank Receipt of registration fee.
 Copy of National ID / Passport / Gas Bill / Electricity bill and others
 Clearance copy from customs and National Board of Revenue (NBR)
 In case of joint ownership, a signed affidavit from each owner.
 In case of ownership of any company, sile and signature of respective person is essential.
 In case of financing by any financial institution, there need to submit a declaration in
respective company’s pad.

In case of Recondition vehicles, following additional documents is needed:

 T.O form, (Signed by buyer) T.T.O form (Signed by Importer)

 Original copy of D-Registration
 Report from BRTA inspector

After submitting all necessary documents the inspector of BRTA will verify all documents and
issue a “Acknowledgement Form” to provide the registration number.

Generally, in Rangs Mitsubishi Limited the registration facility is provided as free service to
their all valuable customers so that the customers can get read off BRTA hassle.

38
All vehicles receiving form port

Rangs Limited’s head office informs Chittagong supply chain department about vehicles
releasing date and time. After that supply chain department contact with respective C & F agent
and take an acknowledgement about the receiving of vehicles and inspect vehicles conditions. If
there found any scratch or damage of any parts, exterior and interior, then it provides a written
report to head office with necessary evidence.

Maintaining advance requisition

One of the most important responsibility of supply chain personnel is to prepare the advance
requisition form with details specification to bridge the vehicles from port to Dhaka warehouse.
In requisition, all necessary breakdowns of expense are mentioned with supporting documents. It
includes Driver charge for bridging, fuel change, and toll charges for a particular lot size.

After preparing it needs to submit in audit department where auditor verified all breakdowns of
expenses and which is approved by director in charge of Chittagong and send to head office
where head of supply chain, head of audit and COO verified and provide final approval.

The estimated amount is deposited to respective executive bank account to perform entire
bridging activities.

Maintaining adjustment register

After completion of bridging of a particular lot, supply chain department is responsible for
maintaining an adjustment to head office where estimated and actual expenses are compared
with necessary evidence like receipt of fuel refill, receipt of using toll of Meghna and
Gumotibridge, Mayor Hanif flyover and others. For non-receipt able expenses, there need to
prepare a “Cost Memo” with the adjustment like driver charge. After submission of all necessary
documents, audit department examine all transactions. If actual expenses are greater than
estimated expanses then balance money is deposited to supply chain department. In case of
reverse situation, supply chain department is responsible to depositbalance amount to finance
department and money receipt is required to send head office.

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Vehicles delivery to Government sector like BAF, Army, BGB

Bangladesh Air Force (BAF), Bangladesh Army, Border Guard Bangladesh (BGB) are the
valuable customers of Rangs Mitsubishi Limited. They call open tender for their required
vehicles and the company which provide the lowest price, win the tender. After that respective
force authority issue a “Work Order” to import the vehicles according to specification of tender
notice. When vehicles arrive at port, it is the responsibility of supply chain department to contact
with respective force continuously and deliver the vehicles within specified lead time.

All procedure of BRTA:

Supply Chain department is also responsible for not only vehicles registration but also have to
perform others task like ownership transfer, ensuring fitness and tax token and others.

Ranhs Mitsubishi Limited offers it valuable customer “Buyback Purchase” facilities. Under this
facility, customers transfer the vehicles ownership to Rangs Mitsubishi Limited with an agreed
price and take another new vehicle by paying balance amount. In such situation, company
provides total ownership transfer facility in free of cost. But it requires to submit following
necessary documents to BRTA:

Duties of Buyer:

 Filling up the T.O form with signature

 Money receipt of ownership transfer fee
 Attested copy of TIN certificate
 Original blue book
 Affidavit about purchase with picture
 Specimen signature of buyer in prescribed form and biography details of buyer, 3 copies
stamp size color picture.


40
Duties of Seller:

 Filling up T.T.O form and signature in sales receipt where need to attach a 10 taka’s
revenue stamp and taking the signature of three attendance.
 Affidavit about sale with picture

Fitness Renew:

To renew the fitness there need to submit the following documents to BRTA:

 Application in prescribed form

 Money receipt of paying necessary fees
 Original Copy of fitness certificate
 Attested copy tax token
 Copy of TIN certificate
 Copy of Income tax payment

Supervising Spare Parts Procurement at workshop

In case of purchase of genuine motors parts, supply chain department at first ensure that the
customer will be eligible to get warranty facility of the specific spare parts or not? If warranty
period cover and terms of purchase favors customer then he / she will be eligible to get warranty
facility. At that time, supply chain department will issue a requisition form in favor of Rangs
Workshop Limited to attach that particular part only. Otherwise, customer has to purchase such
motors pasts from Rangs Workshop Limited by paying asking price or workshop may outsource
that spare parts from outside vendor.

The spare parts purchase procedure is shown in following flow chart:

41
Rangs Limited’s Rangs Workshop’s
Supply Chain Supply Chain
Department Department
Provide spare parts requirements list

Realize demand and Parts are collected by

workshop

Open LC towards principal supplier

and receive parts from port

Department of Supply
Chain at head office
inputs data at ERP
software and set price
based on cost.

Figure: Import procedure of spare parts of Mitsubishi vehicles

42
Chapter Four Findings and Discussion

Automobile industry sector in Bangladesh

While assessing the demand and supply of auto parts and components in Bangladesh, it is
essential to analyze the users, their usage habits and requirements and other related aspects of
auto parts and components. The automotive sector that uses various parts and components in
Bangladesh comprises of both imported and locally assembled vehicles. In estimating the overall
demand and supply of auto parts and components, it is important to critically look into the
existing scenario of automobile industry in Bangladesh since these two things are inter-related
and positively correlated.

Existing scenario of automobile industry in Bangladesh

Bangladesh does not have automobile industry worth the name except the single government
owned agency i.e. Progati Industries Limited involved in assembly of CKD/SKD automobiles.

Over the last two decades, particularly since 1985, the use of various types of vehicles has shown
a definite increased trend. Reasons are many, namely, increased income of particular segment of
people, availability of financial support, improved roads and high ways, increased level of
economic activities, increased mobility of people from one place to another in search of jobs,
increased volume of trade, commerce and export, etc.

It may be mentioned here that only the export oriented ready made garment and textile industries

required a large number of various types of vehicles stating from heavy duty carrier, pickup van,
truck, etc. to motor cars. This single largest sector needs various types of vehicles for various
purposes and account for about 65% of the country’s commercial transport requirements.

Increase in the mobility of individual people has also resulted in a tremendous increase in the use
of various light motor vehicles. There are few assembling houses that assemble small quantity of
vehicles compared to the total demand of the country.

43
Most typical character of Bangladesh automobile sector is that there is a wide variety of brands
and the countries of origin mainly include countries like Japan, India, South Korea, China,
Germany, France, Malaysia, UK and USA. Following brands of vehicles are now available in the
local market that require different types of parts and components on regular basis:

Different brands of vehicles in Bangladesh

Products Category Brand Name

Heavy Bus Hino, Mitsubishi, Isuzu, Volvo, Tata, Ashok Leyland etc.

Mini Bus Hino, Mitsubishi, Isuzu, Toyota, Sawraz, Mazda, Tata, Eicher
etc.

Micro Bus Nissan, Mitsubishi, Toyota etc.

Heavy Truck Hino, Tata, Bed Ford, Isuzu, Ashok Layland.

Mini Truck Hino, Tata, Mitsubishi, Isuzu, Toyota, Eicher, Sawraz, Mazda
etc.

Motor Car Mitsubishi, Toyota, Mercedes Benz, Nissan, Ford, Suzuki,

Dewoo, Proton Saga, Proton Vira, Hyundai, BMW, Maruti etc.

Four Wheels Toyota, Tata, Mitsubishi, Nissan etc.

Auto Tempo Bajaj, Krishan

Scooter Bajaj, Krishan

Motor Cycle Honda, Xingfu, Jialing, Jangshen, Yamaha, Suzuki, Hero, TVS,
Bajaj, Vespa etc.

Light & heavy commercial Nissan, Dewoo, Huyandi, Volvo, Ashok Leyland, Tata,
vehicles
Hino, Mitsubishi, etc.

Farm and agricultural Hyundi, Dewoo, Dongfang, Dongchang, etc.

vehicles

(Source: Supply and Demand survey on automotive components, 2002)

Factors influencing increase in demand of automobile

44
Factors influencing increase in demand of vehicles are as below:

 Government annual development plan has given priority on transport and

communicationdevelopment;
 Government has introduced effective transport policy in its five-year plan;
 Availability of financial support from formal and informal sources. Formal sources are
banks,leasing companies, purchases companies, renal companies etc;
 Encouragement of the private sector to make investments in automobile industry;
 Promulgation of laws to make the importation of vehicles at cheaper price (duty and taxes
reducedto import new vehicles);
 Improved roads and highways and increased number of bridge and culverts;
 Improved life style in the urban areas;
 Alternative and cheaper means of fuel, like natural gas;
 Adaptation of improved technology in agricultural activities/cultivation activities.

There has been an increasing trend in the use of all sorts of automobiles/vehicles in
Bangladesh.However, the increased demand of individual types of automobile varies from case
to case. Forexample, the use of motor cars for personnel and official movement has increased at
a higher rate thanother types of vehicle. Also, the use of urban commercial vehicles has also
increased at a higher rate tomeet increased requirements. These trends are expected to continue
in future.

Import policy and procedures

Government is committed to foster a gradual development of free market economy in the light
ofGATT agreement. In the interest of export promotion and investment in the country,
Bangladesh havelong term, stable, facilitative and liberal Import Policy. Efforts have been made
to make the ImportPolicy easier and more liberal by relaxing or rescinding the regulatory
provisions of the previous

Import Policy. Provisions have already been made to allow import of capital machinery and
industrialraw materials on consignment basis without the cover of the Letter of Credit. In the

45
present ImportPolicy Order second hand / reconditioned machinery are importable subject to
fulfillment of certainconditions. Gradually efforts will be made to classify those machinery under
HS Code.

Rules and regulations on imports

For import purpose, the new ITC Numbers (HS Code) can be uses with at least six digits
correspondingto the classification of goods as given in the Import Trade Control Schedule 1988,
based on theHarmonized Commodity Description and Coding System, shall be mandatory.

(a) Import of any goods or machinery in Bangladesh will be done according to certain rules
andregulations as laid down in the “Imports and Exports (Control) Act, 1950”. Parts, accessories
orcomponent, import of which is otherwise banned or restricted, shall however, be importable
alongwith machinery item is permissible for import.

(b) Manufacturing age of the used reconditioned vehicles must not be more than three years at
the timeof shipment. In case of determining the date/age of the concerned vehicles, the age of the
vehiclesshall start counting from the first day of the next year of manufacturing. In case of
vehicle made inJapan, the date of manufacturing shall be determined from the chassis book,
published by the JapanAutomobile Association. In case of import of vehicles made in other
countries where chassis bookis not published, importer shall submit a certificate regarding the
date of manufacture of vehiclefrom an internationally reputed surveyor firm.

(c) Commercial import of second hands/reconditioned engines and gearboxes of bus, truck, mini
– busand macro bus will be permissible. But such engine and gearboxes shall not be permissible
forimport if they are more than five years old. In this case a certificate regarding age-limit, either
fromexporting country’s recognized Chamber of Commerce & Industry or from internationally
reputed surveyors shall be submitted to the customs Authority at the time of release of the goods.

Following documents along with the LCA must be submitted to the nominated banks by
theimporters:

• L/C application form duly signed by the importer;

46
• Indents for goods issued by indent or a pro forma invoice obtained from the foreign supplier;

• Insurance cover note

Government regulations on imports

(a) Pre-shipment inspection

Unless otherwise specified, pre-shipment inspection of imported goods shall not be obligatoryin
case of import by the private sector importers.

(b) Import procedures

(i) Import License not required: No import License will be necessary for import of any item;

(ii) Import against LCA Form: unless otherwise specified, all imports transacted through a
bank(L/Cs, bank drafts, remittances etc.) shall require LCA form irrespective of the source of
finance;

(iii) Import against L/C: Unless otherwise specified, import shall be made only by openin
irrevocable letter of credit (L/C);However, L/C is not required for import of each consignment,
by road, of easily perishable itemvalued form $US 5,000 to 7,500 and for import of capital
machineries and raw-materials forindustrial use without any price limit. Existing conditions
regarding import on deferred paymentunder L/C shall be applicable in this case also and importer
shall be required to register withBangladesh Bank for importation without L/C

(iv) Import against LCA Form but without opening of Letter of Credit (L/C): Import against
LCAForm may be allowed without opening of letters of credit;

(v) Import on deferred payment basis or against supplier’s credit: Subject to restriction
andprohibitions contained in this order, import on deferred payment basis or against
suppliers.Credit may be allowed on the basis of procedure laid down by the Bangladesh Bank in
this behalf.

47
(vi) Import against direct payment abroad: Only Bangladeshi nationals living abroad may send
anyimportable item irrespective of value ceiling against direct payment abroad in the name of
anyBangladeshi living in Bangladesh. The name and address of the consignee shall be mentioned
inthe import documents. For such import, no permission or import permit from the
ImportControl Authority shall be necessary;

(vii) Document required to be submitted along with LCA Form: Importer in both public sector
andprivate sector shall submit to their nominated banks the following documents along with
theL/C Authorization Form for opening letter of credit:

 L/C application form duly signed by the importer;

 Indents for goods issued by indent or a pro forma invoice obtained from the foreign
suppler, as the case may be;
 Insurance cover note.

(Source: Import Policy Order, 2015)

SWOT Analysis of Rangs Limited

Strength:

1. Sole agent of Mitsubishi Motors, Japan.

2. Not engaged in unfair business

3. Managers and Executives are highly qualified and experienced

4. Efficient management practices in the company

5. Loyal consumer group

6. Effective after sales service with skilled technicians and facilities

Weakness:

1. It takes long time to reach decision of head office to branch office

2. Expensive workshop maintenance fees

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 3. Parts are not available comparing with Competitors

Opportunities:

1. Good customer relation

2. Potential to expand business

3. Growing middle class

4. Increasing Purchasing power of mass people

Threats:

1. Availability of lower priced recondition vehicles

2. Proton a Malaysian brand is going to assemble their vehicles under the supervision of
PHP group Bangladesh.

3. Increased competition in the market

4. Entrance of new competitors

Michel Porters Five Forces Model analysis:

The five forces model developed by Michael Porter has been the most commonly used analytical
tool for examine the competitive environment. It describes the competitive environment in terms
of five competitive forces.

The five forces model is shown below:

49
 Threat of new entrance

Bargaining
Rivalry among industry Bargaining
power of
power of
Customer
Supplier

Threat of Substitute
product and
services

The five forces are:

1. The threat of new entry

2. The bargaining power of buyer

3. The bargaining power of suppliers

4. The threat of substitute products and services

5. The intensity of rivalry among competitors in an industry.

50
The Industrial Analysis of Rangs Limited:

Threat from New Entrance is Low when High Low

Economy of Scale ×

Product Differentiation is ×

Capital requirements are ×

Switching Cost ×

Incumbent’s control of distribution channel is ×

Incumbent’s access to government subsidies is ×

Threat of substitutes high when High Low

The differentiation of the substitute product is ×

Rate of improvement in price- performance ×

relationship of substitute product is

Power of Suppliers is Lowwhen High Low

Concentration relative to buyer industry is ×

Availability of substitute product is ×

Importance to customer to the supplier is ×

Differentiation of the suppliers product and ×

service is

Switching cost of the buyer are ×

Threat of forward integration by the supplier is ×

Power of Buyer is High when High Low

Concentration of buyer relative to supplier is × 

51
 Switching cost are ×

Product differentiation of supplier is ×

Threat of backward integration by buyers is ×

Extent of buyer’s profile is ×

Importance of the supplier’s input to quality of ×

buyer’s final product is

52
 Intensity of Competitive Rivalry is High when: High Low

Number of competitors is × 

Industry growth rate is ×

Fixed Cost is ×

Storage costs are ×

Product differentiation is ×

Switching costs are ×

Exit barriers are ×

So according to Michal Porters five forces model, Rangs Mitsubishi Limited’s Industrial
competitive scenario is -

 The threat of new entry in this is lower

 The bargaining power of buyer is higher
 The bargaining power of supplier is lower
 The revelry among this industry is very higher
 The threat of Substitute product is higher.

The threat of new entry in this is lower:

The economy of scale, product differentiation, switching cost of automobile industry is higher. In
addition, and the control on distribution channel and the requirement of capital is huge to start
the business. So it is not so easy to open a new business in automobile industry. In this
circumstance, Rangs Limited has lower threat from new entrance in market.

The bargaining power of buyer is higher:

Power of buyer is higher when switching cost is lower, extend of buyer profit is low and
concentration of buyer relative to supplier is higher. So the bargaining power of buyer of Rangs
Limited is higher in this regards.

53
The bargaining power of supplier is lower:

As there have many substitute vehicles of Mitsubishi, importance of customer to the supplier is
higher than the power of supplier is lower. The principle supplier has few alternatives to
operate business in Bangladesh. So Rangs have strong power over supplier. In addition, Rangs
Limited is the direct sole agent of Mitsubishi Motors, Japan since 1980 and operating business
till now with higher reputation and selling more than thousand unit Mitsubishi vehicles in
Bangladesh in a year.

The revelry among this industry is very higher:

In automobile industry in Bangladesh, the rivalries among the competitors are very higher.
Because number of competitor of brand new vehicles are many, industry growth is lower, side by
side fixed cost, storage costs are higher, product differentiation, and switching costs are lower.
We can realize the rivalry among the competitors form the following market share analysis.

List of brand new vehicles sales volume in the year 2015 and their respective sole agent in
Bangladesh.

Brand Name Respective sole agent in Sales volume in the

Bangladesh year 2015
Mitsubishi Motors Rangs Limited 1097

Mercedes Benz Rancon Motors Limited 87

Honda DHS Motors Limited 346
Toyota Navana Limited 921
Volkswagen Multi drive Limited 80
Volvo AG Motors 65
Ford Anwar Group 277
MarutiSuzuki Uttara Motors 437
TATA Nitol Motors Limited 91
Subaru REL Motors Limited 95
Proton REL Motors Limited 30
Kia Kia Motors Limited 481
Hyundai Millennium Motors Limited 587
Ssangyong Ssangyong Bangladesh 226
(Source: Head of Sales, Rangs Limited)

54
 Market Share of Existing Brand in Bangladesh
Hundai Subaru
2% Mitsubishi
Kia 12% 22%
10%

Proton
1%
Ford
6%
TATA
2% Toyota
Volvo 18%
1%
Nissan
Mercedes Benz 16%
2%
Honda
7%
BMW
2%

The threat of Substitute product is higher

The differentiation of substitute vehicles is higher and ratio between price and performance is
satisfactory. There have huge threat from substitute vehicles to Mitsubishi brand new vehicles.
The substitute vehicles of Rangs Limited is recondition vehicles in the cheapest price like Toyota
Allion, Premio, Axio, Prado and so on. So the customers have the choice to take quality vehicles
from other sources.

Prospects of Rangs Limited

1. Exchange of foreign training will increase the efficiency of the employee.

2. Mitsubishi, Mercedes Benz and Honda is the richest brand of motor vehicle in Bangladesh.

3. Easy available spare parts of Mitsubishi, Mercedes Benz and Honda vehicle in local market.

4. Consumer satisfaction and confidence over RANGS Limited products in Bangladesh is very
high.

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5. Mitsubishi, Mercedes Benz, and Honda are already tested and proven vehicle in Bangladesh.

6. Maintenance cost of Mitsubishi and Honda vehicle is very low in Bangladesh.

7. Mitsubishi and Honda vehicles are popular for fuel consumption and fuel economy.

8. Mitsubishi and Honda are perfect for all types of road all over the world.

Problems in Merchandising Brand New vehicles of Rangs Limited

1. High Price: The price of Mitsubishi, Honda and Mercedes Benz products are very high
relative to other vehicles distributed in Bangladesh. Rangs Limited cannot reduce its
product’s price because of high quality of the products.

2. Inconsistence Price: Price of Mitsubishi, Honda and Mercedes Benz vehicles are not stable
for long period. The main reason for this is the inconsistency fluctuation of rate foreign
currency.

3. Government Rules and Regulation: Rules and regulation of Government of Bangladesh

about automobile industry are not supporting to grow this industry. In addition, business
persons have to face many bureaucratic problems in government organizations like Sea port,
Custom, BRTA etc. are mentionable.

4. Rate of Duty: The rate of duty imposition on motor vehicle changes every year. So long
term strategic planning is not effective for the Rangs Limited.

5. Malpractice by the Competitors: Sometimes other motor vehicle industries show invalid
statement of pricing. So their selling prices lower than Honda or Mitsubishi vehicles.

6. Government Purchase Policy: When purchasing government organization emphasize on

product price and country of origin. They do not evaluate the quality and durability of motor
vehicle. In that case high quality and high priced Rangs Limited products cannot manage to
sell their product in government organization of Bangladesh.

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7. Bank Unwillingness: Most of the banks in Bangladesh are not willing to give loan into the
transportation sectors because of high risk of this business. So small entrepreneurs are faced
difficulties to get a vehicle loan.

8. High Interest: The rate of bank interest of auto loan (12-13%) in Bangladesh is very high.
But the revenue of motor vehicle service relatively low with respect to total cost. It is too
difficult to continue a bus service with high interest rate burden.

9. Professional Training: Although Rangs Limited arranges training for the employees every
year, they are not participating properly because of time limitations.

10. Political Instability: Political situation in Bangladesh is not normal. Every year political
crisis consumes losses for the business organization. When political parties demonstrate
strike all roads and highways are blocked. So motor vehicle owners are discouraged to
purchase vehicle. In Bangladesh it’s a tradition to destroy innocent vehicles in any political
unrest.

11. Credit Sale Collection: It is another major problem in marketing of Rangs Limited.
Sometimes vehicle owners are not paying their installment of the vehicle in actual period of
time.

12. Unsold Product: Unsold product in port warehouse consume more charges. Sometimes
Rangs Limited bound to pay the penalty fees when products stored more than normal period
in port warehouse.

13. Steal of Parts: In Chittagong and Mangla port sometimes valuable parts of motor vehicle are
stolen.

14. Wrong PSI Certificate: Pre Shipment Inspection (PSI) certificate is an important document
of import business. The amount of other costs in the port depends on it. If the port authority
reports wrong information on PSI certificate the importer must pay the additional charge of
the imported products.

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15. Time Consuming: Normally the time of importing of a product is 120 days to 150 days. It is
difficult to estimate the future market of motor vehicle industry in Bangladesh for that long
period.

Scenario of Vehicle Registration in Bangladesh

Number of vehicle registration in Bangladesh (From the

year 2011 to 2015)
25000

20000

15000

10000

5000

0
2011 2012 2013 2014 2015

Private Car Pick Up Jeep

(Source: Annual registration report of BRTA)

The graph represents the number of vehicles register in BRTA from the year 2011 to 2015 in
three segments like Private Care, Pick Up and Jeep. The trend of private car registration had
reduced in the year 2012 but after that it raised gradually, almost double between the year 2012
to 2015. The buying behavior of Jeep was stable from the year 2011 to 2014 with slight
fluctuation in demand after that it increased little comparing with the previous four years.
Finally, it is noticeable that up to 2013 the trend was down word in the Pick Up vehicles
registration after that it increased and was stable up to the year 2015.

So it is clear from the graph that up to the year 2015, all the three segment (Private Car, Pick Up
and Jeep) has upward trend which is very good news for automobile industry as well as Rangs

58
Mitsubishi Limited. From the above trend it can be estimated that the sale of vehicles will be
increased in upcoming years subject to the favorable rules and regulation of Government.

59
Chapter Four: Discussion, Implications, Recommendations, and Conclusion

Supply chains are also taken as the “value chains” which expands its boundaries from suppliers
to final customers. Supply chain managers have to pay their responsibilities in coordination and
integration of marketing, finance and productions operations with their supply chain partners
through their organizations (Whitten et al. 2012). Success of the organizations lies on the ability
of all concerned supply chains affiliates to concentrate on their ultimate customers and satisfy
their demands by providing them their desired products / services. Lee (2004) contended that
“the success of each of the organizations comprising the supply chain depends upon the ability of
the overall supply chain to respond to changing customer demands, to restructure the supply
chain in response to changing markets and economic environments, and to align production,
marketing, and financial strategies throughout the supply chain”. Successful organizations
respond rapidly while working within the supply chains to any kind of short-term problems to
fulfill the customers’ demands (agility), easily adjusting themselves in long-term by streamlining
in the markets and economies (adaptability), and coordinating business processes by sharing
equitable costs, risks and benefits for all partners associated with it (alignment) (Whitten et al.
2012). Organizational capabilities of Triple-As are considered as dynamic capabilities which
provide the competitive advantage by renewing and developing their strength in accordance to
customer demands, market and needs of economies. Overview of Triple-A supply chain is
presented hereunder.
Agility

Agility in supply chain is considered as significant aspect to get achievement for all supply chain
members (Van Hoek, 2006; Forsberg and Towers, 2007). Lee (2004) referred the agility as “the
ability to respond to short-term changes in demand or supply quickly handle external disruptions
smoothly.” Successful organizations cultivate agility by taking following point into
consideration:

 Build-up long-term relationships with suppliers which are strong and collaborative;
 Promotion of synchronous flow of actual information among the partners;
 Avoid postponement by designing effective production processes;
 Develop inventory buffers of inexpensive but key elements;

60
  Establishing trustworthy logistics partner or system and
 Design unique contingency strategies
 Sketching contingency plans (Lee,2004).

Baker (2008) asserted that agility encompasses the ability to work together with supply chain
partners to respond quickly to the changes in customer demands. The more supply chain partners
coordinated and integrated with each other the more rapidly they can respond to the changes
through their supply chains(Green et al., 2007; Swafford et al., 2008) which is considered as key
of supply chain (Lee et al., 2008; Thomas, 2008). Zhang et al. (2006) said that “the ability to
provide information connections acrossthe supply chain allows supply chain partners to share
knowledge about plans, requirements, and status resulting in improved supply chain
performance”. Olhager and Selldin (2004) argued that sufficient agility can only be achieved if
all supply chain members functioning as dependable partners. Organizations should develop
flexible supply chain so that it can respond effectively with the risk relatedto the likelihood of
customer demands (Ronchi et al., 2007; Tang and Tomlin, 2008).

Adaptability

By maintaining adaptability, members of supply chain can easily cope up with the dynamics
related with supply chain (Stevenson and Spring, 2007). Lee (2004) explained the adaptability as
“the ability to adjust the supply chain’s design to meet structural shifts in markets [and] modify
the supply network [to reflect changes] in strategies, technologies, and products.” To fostering
adaptability, successful organization should follow:

 Identify new markets and supply bases by monitoring the economies;

 For developing logistics infrastructure and fresh suppliers, intermediaries will be used;
 Assessing the immediate and ultimate customers’ needs
 Flexibility in design of the products; and
 Determine the product life cycles and technology used in developing the products (Lee,
2004).

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For supply chain adaptability is an imperative component to change the life cycle of the product
or technologies over the period (Lee, 2004). Supply chain partners should pay greater intentions
to adaptability while working in dynamic environment so that all participating organizations
performed effectively (Richey et al., 2006). Due to uncertain quality, costs and delivery
numerous issues arises among the supply chain partners (Newman, 1992). So, organization
should continuously establish contacts with fresh vendors and suppliers (McCullen et al. 2006).
Whitten et al. (2012) argued that “this uncertainty dictates that organizations focus on
environmental scanning and infrastructure renewal in an effort to develop new supply bases and
markets”. McCullen et al., (2006) claimed that to successful in supply chain organization should
focus on creating flexible designs. As the varieties of products are increasing but the products
and technologies life cycles are shrinking as well (Wang et al., 2008).
Alignment

Alignment defined by Lee (2004) as “the ability of great firms to align the interests of all of the
firms in their supply chains with their own.”Companies want to become successful in the supply
chain by foster alignment through:
 Exchanging information with customers and suppliers freely;
 Define clear rules and regulations, responsibilities forcustomers and suppliers; and
 Equitable sharing costs, risks and obtain improvements
Matthyssens and Vandenbempt (2008) stated that supply chain partners should externally and
internally align with each other’s. As a strategic viewpoint, business functions like
manufacturing, logistics, marketing and purchasing must be internally and externally aligned to
attain competitive advantage as ultimate goal (Bryson, 2004). Coordinated and integrated
information systems played a vital role for better alignment among supply chain partners (Green
et al., 2007; Walters, 2008) which is beneficial for all them (Ballou et al., 2000) because these
partners are sharing risk associated with supply chain (Tang and Tomlin, 2008). Within the
context of supply chain, all partners played their significant role (Chi et al., 2007) which
enhanced the organizational performance (Arend and Wisner, 2005).

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Implications:
Supply chain management is shifting its paradigm constantly and developed itself in accordance
to strategic modifications in the organizations, shift in technology, customers/suppliers demand
and competitive actions by the competitors (Khan and Pillania, 2008). The best value supply
chains are founded in multiple sets of practices and assumptions having primarily focus on
creating “strategicsupply chain management” or to create competitive advantage through the
means of supply chain to enhance organizational performance (Upson, Ketchen, & Ireland, 2007;
Hult, Ketchen, & Slater, 2004). Numerous well renowned firms including Toyota, Dell and Wal-
Mart takentheir supply chain management as key weapon to get and attain competitive advantage
over others (Ketchen and Hult, 2007).
Triple-A supply chain is considered as viable strategy, when successfully implemented, which
directly related with the supply chain and indirectly associated with organizational performance.
Whitten et al., (2012) claimed that “organizational success depends on supply chain success
which depends on the abilities of a supply chain partnering organizations to build a supply chain
that simultaneously exhibits agility, adaptability, and alignment”. Long-term strategic
relationships are considered as key of supply chain management (Heizer and Render, 2006) that
should essentially developed by the managers by taking accurate decisions with respect to all
supply chain partners. Managers should work to build-up adaptable, agile and aligned supply
chain to harvest higher organizational performance (Lee, 2004).

63
Problems and Recommendations:

The main operational barriers are: Delayed registration and complex procedure in BRTA,
Railway and Port, lack of coordination with corporate office, inefficient services by Rangs
Workshop with higher service charges and shortage of warehouse facilities.

The recommendations of Rangs Limited to overcome these problems are mentioned below:

1. In Rangs Limited, there don’t have any structural agreements among the dealing parties
(Port authority, BRTA, Railway) to perform the tasks smoothly and to provide quick
customer service. Rangs Limited is the sole distributor of Japanese automaker Mitsubishi
Motors which provide premium brand and charge premium price from its customer. So
there should have a meaningful deal with related parties ((Port authority, BRTA,
Railway) in supply chain.
2. One of the main purpose of supply chain management to perform the right task in right
time. Rangs Limited doesn’t have any specific time frame to perform task in supply
chain. For example, to get a price approval there need to take signature from respective
sales person, Head of Sales, Director In Charge, Head of Supply Chain, Head of
Operation, COO and Head of Audit and Accounts which is very time consuming and
unnecessary. Such time consuming process should be eliminated.
3. The main supply chain department is located in corporate office in Dhaka. But the main
important drivers of supply chain like facilities – shipping agent, C and F agent, sea port,
insurance - inventory, and transportation are located mainly in Chittagong. So in
Chittagong, there require more concentration of supply chain department with more
facilities like manpower, transportation, and strategic decision making.
4. One of the main objective of supply chain is to provide support the marketing department
so that they can be able to deliver the vehicles in on time. Because to deliver a vehicle
there require few service activities like polishing, pre delivery inspection, washing, fitting
protector, registration and so on. Few of these activities are related with Rangs Workshop
Limited. So there found a clear lack of condition between Rangs Limited and Rangs
Workshop Limited.

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 5. The service charge and quality of service of Rangs Workshop is not up to the mark as its
represents a premium brand in Bangladesh. Proper training and development program
should be taken for workshop’s technicians and workers and a structured service charge
should be provided by higher authority.
6. Warehouse facilities are not enough to hold the stock. Here there have only one
warehouse for Rangs Group where vehicles of all concerns are kept in congested
situation and inventory management system is not followed properly. So proper inventory
management should be maintained with necessary facilities.

Conclusion:

Rangs Limited is one of the leading company in automobile industry in Bangladesh and only
sole distributor of Mitsubishi vehicles in Bangladesh. As it performs indenting and import basis
business, the practices of all tools and techniques of Supply Chain Management is not possible.
In addition, the income statement and balance sheet of this company is highly confidential. As a
result, I couldn’t show any financial analysis which are related with Supply Chain.

In my report I tried to present Rangs Limited’s operation process, products descriptions and
specification, import procedure, the import rules in Import Policy Order of Bangladesh, a detail
analysis of Michael Porters Five forces model in automobile industry and Rangs Limited’s
market position in Bangladesh now. A new concept of Supply Chain Management is Triple-A
(Agility, Alignment and Adaptability) is discussed in brief and how Rangs Limited can adopt
this concept to increase the efficiency in supply chain. As we know that, the competition among
an industry exists is not firm to firm, but supply chain to supply chain department.

65
Chapter Five: Learning from Report

Supply chain management is the management of a network of interconnected businesses

involved in the provision of product and service packages required by the end customers in a
supply chain. Supply chain management spans all movement and storage of raw materials, work-
in-process inventory, and finished goods from point of origin to point of consumption. As Rangs
Mitsubishi Limited is one of the leading Brand new vehicles distributor in Bangladesh. Its supply
chain department is designed by competent and knowledgeable personnel. I am lucky enough to
work with these valuable persons. I am internship period I directly observed total import
procedure of vehicles from Thailand and Japan, functions with clearing and forwarding agent,
bridging vehicles from Chittagong port to warehouse or to Dhaka, requisition and adjustment of
bridging expenses, maintaining stock report, parts and after sales services requisition and others
necessary task.

I tried my level best to present total scenario and activities performed by Rangs Mitsubishi
Limited in this report. By writing this report I learned and analyzed different tools and
techniques of supply chain management, read different journals and articles, go through different
files and document of Rangs Mitsubishi Limited, talked with higher level personnel to collect
data and information which helped me to create a good relationship with them. I think by
acquiring this practical and theoretical knowledge, I will able to continue my career in the area of
Supply Chain.

66
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Website:

http://www.carparts.com/mitsubishi

Books:

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