Supply Chain Management

Top suppliers and other aspects

Every organization needs the vital coordination of business capacities with others whose sole
purpose is to satisfy the demand in the market and for that a continuous supply of products is
mandatory. Every customer anticipates that the product should be conveyed rapidly and on
schedule. The significance of supply chain management is that this procedure builds consumer
loyalty. It diminishes operating costs as well as it helps businesses by lowering the overall
production cost. As for Bata Bangladesh, the supply chain plays a significant part as the greater
part of the raw materials are originated from outside of Bangladesh.

Bata has been provided with raw materials for its products from various suppliers all around the
globe. The company uses the resources of production from foreign countries and local suppliers
of Bangladesh simultaneously. Some of the significant and most essential suppliers of Bata are
from overseas. Countries such as India, Indonesia, China, South Africa, France and Italy play a
substantial role in providing Bata with quality as well as cheap raw materials. Besides their
manufacturing purpose, they are also outsourcing for some of their products. This requires
proper quality control check on the materials or partly finished goods to keep their brand name
unharmed.

The raw materials for the production process of Bata goods are stored in the Warehouses.
When they are needed for the factory's production process, they are moved to the production
area to be processed. After the raw materials are converted into their desired products, they
are transferred or moved to the warehouse again for storage and Proper Quality Inspection.

Dealing with the Bullwhip Effect

Bata is rarely impacted by the bullwhip effect even though it mostly focuses on forecast-driven
supply chain management. Demand for their products usually remains somewhat constant all-
round the year until the occasion time. For that, Bata maintains some strategies and extra effort
to deal with the Bullwhip effect effectively.

 Bata has its own supply chain forecast team where they plan according to the previous
year's demands considering the external factors that might affect raw materials'
requirements. Although maintaining accurate forecasting to reduce the bullwhip effect
is not certain but Bata with their experience supply chain management try to ensure the
right algorithm to protect customer demand for their products.

Fostering the supply chain communication and collaboration with the suppliers, distributors
enable Bata to reduce excessive inventory to pile up and any lack of high customer demand.
The medium of interaction through the software system has made it possible for Bata to make
swift orders and transfer information about the necessary raw materials to their suppliers. The
wide range of software systems in Bata enables visibility into what is happening and what
should be done to reduce the Bullwhip effect at it’s minimal.

Situation during COVID-19

The devastating impact of the COVID-19 situation has crippled the entire supply chain
management of the Shoe manufacturer Bata Bangladesh. The lockdown has disrupted the
production process because the supply of raw materials from overseas has been hindered. The
situation got worse in the factory when the inventory started to pile up because of the lack of
demand due to the COVID-19 lockdown. The company began to operate below their usual sales
expectation, forcing them to retrench the production process. Even further production was not
possible as the raw materials were stuck in their origin country.

Bata brought many changes to avoid retrenching their human resources and production
process and keeping operating at a moderate level. They kept their business operation open
and ongoing mainly through online websites. Although their supply of raw materials from
overseas and within the country was closed down, they had to run their business operation
with the help of pre-built inventory. According to their forecast of raw materials, they stored
inventory consisting of partly finished goods, finished goods and raw materials so that in time
of unavoidable circumstances this inventory can cover up the part for the decreased supply of
raw materials. Bata’s planning and inventory management strategy are good enough to meet
the demand in the lockdown. With enough inventory stored, Bata was able to sell their
products in lockdown time. After lockdown, there were still obstacles to bringing the materials
so Bata used the raw materials from the local supplier.