Report

SCM 310
Logistic and Transportation
Section:2
Prepared for: Meshbaul Hasan Chowdhury

Group Members
Arman Hasan 1430256630
Shayanta Shupan 1711993630
Sadia Nusrat Liza 1620027030
Md.Sohanur Rahman 1821568630
Mahi Fayad Haque 1821326030
Rafat Shahriar 1811771030
 Executive Summary

Premier Cement Mills Limited is one of the biggest and fastest growing cement companies in
Bangladesh. It was incorporated back in October 14, 2001 as a private limited company. Their
motto is to always strive to ensure good quality and They market their product under the brand
name “Premier Cement”. Premier Cement strives for sustainable growth and aligns its
development strategies accordingly.

We had a planned visit at the Premier Cement factory situated in West Mukterpur, Munshiganj but
because of the ongoing health situation we couldn’t make it. We were fortunate enough to talk
with the plant engineer and supply chain manager over the phone calls. Throughout the consulting
session, they behave with us in a friendly manner. By interviewing them we gather a lot of
information about the premier cement. As our report primarily focuses on Supply Chain and
logistic, we have learnt about their logistics channel & relationship, transportation facilities,
warehouse facilities, how they manage their supply chain as well as many other information which
we are going discuss in details in later part of the reports. They throw us a great deal of inward
information about premier cement and talked to us about their future goal for further improvement.
Table of Contents
Company Overview ....................................................................................................................................... 1
Supply Chain Management ....................................................................................................................... 3
Logistic Channel and Relationship ............................................................................................................ 7
Transportation ........................................................................................................................................ 10
Warehousing ........................................................................................................................................... 14
Recommendation........................................................................................................................................ 18
Conclusion ................................................................................................................................................... 20
References .................................................................................................................................................. 21
Company Overview
Premier Cement is one of the biggest and famous cement brand in Bangladesh. It began its
excursion as a private limited company on 14 October 2001 under the Company Act 1994 with the
dedication of assembling top notch cement under the brand name "Premier Cement". Their plant
is situated in a favourable position which is available from both land and waterway. On the front
side of the plant is Dhaka-Munshiganj highway and on the back side is the mighty Shitalakhya.
Because of this favorable position they can move raw materials and completed products in an
effective and financially savvy way. Their corporate office is situated in TK Bhaban in Karwan
Bazar, Dhaka and PCML in Chittagong.

At first the plant was introduced with a manufacturing capacity of 0.6 Million Metric Tons for
every annum. From that point Premier Cement didn't have to think back. The overall demand for
Premier Cement has been expanding day by day since then. So the sponsors came forward to
enlarge it into something bigger, the second unit began in 2011 with a production limit of 0.6
million tons for each annum; the third unit and fourth unit began their production in 2013 with
limit 0.6 million tons each every year. Presently they have an astounding production capacity of
2.4 Million Metric Tons for every annum.

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In 2017, the organization consented to an arrangement with FL Smidth-Denmark for establishment
of Vertical Roller Mill to extend its production ability to 5.16 Million tons for every annum. The
said upgrade will help to reduce overall production cost which will empower the organization to
deliver its products in each niche and corner of the country and thusly help individuals with less
buying capacity to assemble their homes at a moderate cost and develop bridges, flyovers, concrete
streets in the remote territories of the nation. Subsequently the general foundation of the nation
will evolve.

Premier cement offers their product in three different category and they are:

PCC-BM - is a mixing of Clinker (65-

79%), Fly ash, Slag & Limestone (21-
35%), Gypsum (0-5%)

PCC-AM - is a mixing of Clinker (80-

94%), Fly ash, Slag & Lime stone (6-
20%), Gypsum (0-5%)

OPC - is a mixing of Portland Clinker

(95-100%) and Gypsum (0-5%)

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Premier cement has a capacity to produce a total of 10000 MT of cement per day. A total of six
ball mills or grinders are used to achieve this level of production in a single day. Every grinder has
a capacity to produce about 2000 MT per day. Premier cement has clear strategy and objectives.
Their mission, vision and goals also tell us the same. It makes progress toward sustainable
development and adjusts its improvement systems appropriately. Their vision and goals also tell
us that they are focused on what they are doing, and they want to do it in the most ideal manner.

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 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 the premier cement the supply chain plays a significant part as the greater part of the raw
materials are originated from outside of Bangladesh just fly debris comes from the inside and the
demand of concrete is high as a result of our developing economy and infrastructure. The nature
of finished good relies upon the nature of raw materials. Subsequently the issue of acquiring quality
raw materials is of most extreme significance to them. Because of this premier cement apply their
best effort to get quality raw materials at the most minimal conceivable cost. They import materials
from Vietnam, China, Japan, Oman, Thailand and India, and so on. The raw materials required in
delivering the cement are clinker, slag, gypsum, fly debris and limestone. They make no trade off
with the quality of raw materials.

T. K. group who is the main investors of the company deals with the supply chain network. They
forecast their overall demand at regular intervals and in this case, it is done in very four months.
After every forecast they place the orders for raw materials. This whole thing gives us an idea
about their centralized purchasing. They separate their demand and supply for every day and
satisfy that demand accordingly. They additionally determined how much raw materials required
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for every day. Thus, they reach their suppliers from (Vietnam, China, Japan, Middle East ) and
place the desired orders

Minimizing the Bullwhip effect

They take extra measure to eliminate the bullwhip effect. Some of them are:

• Working together with clients and suppliers

A procedure to improve supply network effectivity is through better joint effort with clients and
suppliers. At the point Premier cement work with customers to comprehend their arrangements
and figures, they can incorporate advancements and regularity with the conjecture and afterward
give more information to their suppliers to help forestall the development of accidental stock due
to the bullwhip impact.

• Upgrading the demand forecast accuracy

Regardless of whether an organization attempts to turn out to be more demand driven, it despite
needs a figure of forecasting to cover request from new customers, new items or in-house
advancements. While it's a given that an estimate will be erroneous, there are steps that can
improve precision. In this matter premier cement guarantee that they utilize the correct calculation
for the perfect accuracy of forecast by taking insights from dealers, suppliers as well as consumers
end.

• Enable quick choices with perceivability and insight

The most significant advantage of supply chain management is the perceivability and the
knowledge from insight and premier cement makes the best use of it. Without the correct level of
understanding, a supply chain administrator must depend on mystery or general guidelines to
decide.

• Embracing a demand driven supply chain network

Demand driven supply chain is one of the best approaches to lessen the bullwhip impact. Most
estimates are off base, so when genuine demand appears it is practically sure to vary from the

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actual figures. This makes organizations put in crisis orders on suppliers. Interestingly, a demand
driven system will have less in general stock and be progressively responsive which premier
cement uses to lessen the impact. A diagram of supply chain network is shown below:

Diagram of Supply chain network of Premier cement

Keeping up with the channel partners

They possess zero tolerance with the quality of raw materials. For the principal issue of supply
delay, they stock 10 days of raw materials in their premise. That gives them an upper hand in a
competitive market. Likewise, they keep up a good association and connection with their suppliers

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just as with the contenders as they additionally help when there is a deficiency of raw materials so
that in a brief time-frame they can eliminate the stockpile delay. They ceaselessly audit their
marketing route, incorporating associations with wholesalers, merchants as well as suppliers. They
urge to set up best practices at the merchant end also, to guarantee administrative consistence.They
get materials every day along these lines, if there is a couple of delays they can oversee without
any problem. The following issue is the low quality of raw material. After the offloading of raw
materials in port they check the quality and nature of raw materials. On the off chance that crude
material breezes through this assessment, at that point they are stacked in storage for the next
movement. If there are any issues in the materials, they don’t accept rather they return them to the
provider. Likewise, they research why the suppliers gave them a low quality of materials.

There is no extent of staying away from significance of solid and quick logistic in an exceptionally
calculated industry. Attributable to that, Premier cement deals with the transportation of raw
materials to solidify plants, the conveyance of cement to their customers and accomplices it all in
conceivable time and the quickest way imaginable. Premier Cement guarantees quicker
conveyance of item and it keeps away from wastage of time and materials. They have trucks,
covered vans, bulk carriers as well vessels for co-ordinations and logistic support.

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Logistic Channel and Relationship

Nowadays business organizations prime objective is to reduce lead time. Premier cement relies on
strategic coordination of business functions to fulfill the demand and maintain adequate supply to
reduce lead time. An efficient logistic system is vital for reducing lead time. The logistic system
of premier cement can be divided into two parts:

• Inbound logistics

Raw materials which are imported from abroad mainly china and Indonesia are received from the
mother vessel which is performed by dedicated third parties with yearly service contacts. This
takes about 14 days for the goods to reach the original suppliers in the Chattrogram port from the
mother vessel. Afterwards, the raw materials are transferred in light vessels which are composed
of 20 self-owned dedicated third-party vessels to the Muktarpur facility.

• Outbound logistics

After packaging, the cement is loaded in vans, bulk carriers and vessels. With the help of 357
covered vans and trucks, 54 bulk carriers and 20 vessels the products are transferred to distributors,
retailers and households of any location of Bangladesh within one or two days.They also utilize
reverse logistics to solve problems in cement production and raw materials collection in an attempt
to get competitive edge and reduce lead time.

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 A diagram of logistic network is shown below:

Chattrogram
Port
Raw materials
such as coal from Retailers
Indonesia and
China

Muktarpur Households
Packaging
Raw materials Plant
such as lime stone
clay, gypsum and
iron ore from
Distributors
Bangladeshi
Suppliers
In house
Warehouse

Logistics Channel is mainly about all of the participants of the supply chain who take part in
transportation, receiving, material handling and warehousing.

• Transportation

Premier cement have their own vans, trucks, bulk carriers and vessels to transport raw materials to
factory and to distributors, retailers and household after the production and packaging process.
They rely on third party logistics to send goods to the customers.

• Receiving and handling

Receiving and Handling is done by the dedicated staff on the Muktarpur facility. They receive the
raw materials from small vessels and process them to be used in the manufacturing process.

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 • Warehousing

Premier cement maintains inventory of both raw materials and finished goods. They use the FIFO
method for inventory management. They have a warehouse in Muktarpur for both raw materials
and finished goods. Distributors store the finished goods on both third party and private warehouse
on most of the metropolitan areas of Bangladesh.

• Order Cycle

The distributors and retailers place an order to the purchasing department of premier cement. The
department processes the order and contacts the supply chain officer for approval. After approval,
they order raw materials from abroad as well as Bangladeshi suppliers. They place excess order in
order to get discount and store the excess quantities on the warehouse for future demand. The staff
in the factory processes the raw materials after it reaches the Muktarpur facility. The raw materials
are converted to finished goods and the excess is put aside on the warehouse. By utilizing 357
covered vans and trucks, 54 bulk carriers, 20 vessels the products are transferred to distributors,
retailers and households to any location of Bangladesh within one or two days.

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Transportation
We all know the main potential of Premier Cement is its wonderful logistic system. Without a
proper management of effective and efficient logistic system, a company cannot compete with its
competitors in the long run. And transportation is an effective and essential part of logistic system.
Because without transportation, it is not possible to carry out the raw materials to the industry and
also it is not possible to deliver the products to the customer. So the transportation system is
extremely important for a company. And as a leading company like Premier cement the
transportation is much more needed. The way they produce their product and distribute their
product domestically and internationally is really exemplary. They distribute their product faster
than all its competitors. Premier Cement is recognized internationally as the fastest growing
cement companies in Bangladesh. It is known as a leading cement manufactures in the cement
industry in Bangladesh. It focuses on sustainable growth and adjust the strategies to develop the
company. They follow some rules to maintain their logistic system and transportation system like
deliver the product in a proper way, deliver the product in a minimum time and serve the product
to the doorstep of customer. A good transportation system can minimize the lead time. We can
proudly say that, a highly experienced logistic team manipulate the transportation system perfectly
in premium cement. That’s why it is possible to avoid the wastage of time and also possible to
complete the quick delivery.

• The Transportation Mode & carrier

Premier cement uses different types of transport and carrier for different purpose. They have
potential network vessels, bulk carriers, large trucks, mini vans which are placed near storage river
ghat in a systematic way all around country. .They use these transport to carry the raw materials
and to deliver to the warehouse and so on. They have 357 covered vans and trucks, 54 bulk carriers
and 20 vessels. They use vessels, ship, bulk carrier to bring their raw materials from Indonesia,
China at their Chittagong port. From that place, they use their own ship to send them to Muktarpur
plant. In Muktarpur plant they have cement industry where they complete their all procedure to
make the finish goods. They also use trucks inside the industry to carry raw materials from one
factory to other factory for manufacturing purpose. They use their own trucks to send their finished
goods to the warehouse.

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Different transportation
facilities owned by Premier
Cement

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 • The Use of Third Party Logistic

Premier cement use third party logistic for distribution process. They send their products to
warehouse. From warehouse they send their finished goods to the wholesaler and retailer with the
help of third party logistic to cover the whole country. Premier cement also use third party logistic
company to distribute their product domestically and internationally. They also hire third party
logistic company to bring their raw materials from another country. Another time they use their
own transportation. Their PCML’s logistics support including capacity till 2019 is provided
below:

Quantity
Name of 2019 2018 Capacity in
Vehicles MT
Cover van 158 158 10
Cover van 109 109 20
Open Truck 10 10 05
Open Truck 59 59 10
Open Truck 05 05 20
Open Truck 16 16 30
Bulk Carriers 54 54 25
Bulk Carriers 02 - 40
Vessels 21 20 -
Total number of vehicles owned by Premier Cement

• Domestic & International Shipment

Premier cement has strategically advantageous position for both land and river side. For this reason
there is a quick access for Dhaka plant location. Their front side plant is Dhaka-Munshiganj
highway and their river side is Shitalakhya River. So they have both option for their advantegous
position. They can easily move and transport their raw materials and finished goods by using the
both way. They have Chittagong port and Muktarpur plant. They bring raw materials from China,
Indonesia to Chittagong port. From there they send the raw materials to their Muktadpur plant by
their own vessels. In Muktadpur plant, they have industry where they produce their product by
using the raw materials. After finishing the product, they can distribute the finished goods by using

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the land and river both. In shipment process, they can deliver the finished goods from Muktarpur
plant to Barishal, Chittagong, Sylhet, Rajshahi, Khulna domestically by using river way. In this
process, they use ship vessels, bulk carrier to deliver the finished goods.Premier cement also deliver
their products internationally. From Chittagong port, they send their finished goods to the overseas. They
send their finished goods to India, China and many more countries. That’s why Premier cement is also
recognized internationally.

International Shipment

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Warehousing
Premier cement has three types of inventories, there are -

Raw Materials Inventory Storage

Raw Materials Inventory: Premier Cement want to produce Good quality Cement that’s why
they bring (Import) raw materials from Vietnam,
China, Japan, Oman, Thailand and India etc in
lower price and they store these materials. clinker,
slag, gypsum, fly ash and limestone are important
Raw materials to producing quality Cement.
Ability to source of raw materials are so
much important for Company business
because ordering the raw materials at the
right time at a reasonable price company
can produce best quality product and
make more profit from business. For this Raw Materials
reason, At the time of collection period of
raw materials they never compromise
their raw materials Quality.

Work in progress Inventory: Premier cement has Ball

mills which are using for grinding raw materials (clinker,
slag, gypsum, fly ash and limestone) with maintaining
international standard so that they can easily cover with the
excess demands during the month of January to April. On
that time the product (cement) demand is exceptionally
high.
Grinding Mills
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 Finished Goods Storage
Finished Goods Inventory: When ending of work in progress company finds finished goods and
they store their finished goods in individual silos for different product types (AM, BM, OPC etc).
That means they have accomplished the manufacturing process and they get their finished goods
after finishing the packaging they sell to the customers.

Storage Location- Premier Cement store their finished goods in silos which are also known as
warehouse of this company. They have five Silos and its total capacity is 14500 MT. Silos settled
inside the factory because after finishing the work in progress process they immediately send their
finished goods in different silos, if the cement take time to place in silos it can coagulate which is
very big damage for company.
Inventory Storage Time and Reason- Premier cement keep their inventories in warehouse for 1-
2 days because this company has continuous production process. For this everyday, they need
10000mt-12000mt inventory and they utilize this inventory in production and as a output they get
finished goods(10000mt). If company’s raw material finished or empty they can get their inventory
(raw material) after 14 days because their raw materials come from outside of the country. Then
company get their raw materials as inventory which refill in warehouse and this company keeps
their inventory for 1-2 day then its again use for produce finish goods. Whereas there is continuous
process they can’t stop their production for this reason company reorder their raw materials when
their raw materials quantity is nearly to 20%. Somehow company’s inventory which was store in
warehouse will be finished and inventory can’t come in warehouse for one day company will fall
in great loss because they cannot run their production. Company store their finished goods in ware
house for 1 day because they have order basis production system. when their product is ready,they
try to deliver it immediately if it makes delay they store their finished good in warehouse for one
day after this time they must ensure to deliver their product.

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Inventory Management Technique- premier cement uses mainly 4 types of Inventory
Management Techniques
1.ABC ANALYSIS: Premier cement classified inventory (Raw materials) items into three
categories namely, clinker and fly ash are in category A raw materials, Slag and limestone
are in B category raw materials and Gypsum in C category Raw material. The
classifications are depended on inventories (raw materials) price and essentialness. But in
finished goods inventory OPC is in A category cement (finished goods), PCC-AM is in B
category cement and PCC-BM cement under C category. Company use this analysis
because of better control analysis.

OPC PCC-AM PCC-BM

2.ECONOMIC ORDER QUANTITY (EOQ) MODEL: Premier cement company

reorder their raw materials when their raw materials quantity is nearly to 20%. That means
when 80% of inventory is over, they will reorder their inventory (raw materials).

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 3. VED ANALYSIS: Premier cement higher level inventory is
OPC cement which is required most vital part (Clinker) that are
very essential and costly for production. And another essential
spare parts are fly ash, slag, gypsum and limestone whose
default may slow down the production process but it is required
to maintain such inventory. premier cement uses this technique
for controlling spare parts of inventory.

4. FAST, SLOW & NON-MOVING (FSN) METHOD: All

the inventory are not used in the same order; some are needed
frequently, while some are not needed as like frequently. So
they classified inventory in three types fast-moving inventory
(Clinker and Fly ash, Slag), slow-moving inventory
(Limestone& Gypsum), and non-moving inventory (They
don’t have any non-moving inventory). Premier cement uses
this method for controlling obsolescence.

Logistics Network Helps in Warehousing Facilities- Premier cement raw materials come from
foreign country by their lighter ship and they take time maximum 14 days this time is fixed but
they try to come more earlier. Premier Cement ensures timely delivery of product and thus it
avoids wastage of time and resources. Company know that lead time is important for them for this
they strongly maintain their logistic network and they do not want to make any late because this

late can make a great loss for company. If timely raw materials do not come in warehouse,
company cannot produce customers demanded products

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also cannot deliver their product timely for this reason company faces loss and their reputation
also fall in danger that’s why premier cement maintain their logistics network more strongly.
Besides premier cement logistics network is also tightly maintain for finished goods because
finished goods are stored in warehouse this finished products (cement) cannot deliver to customer
automatically company obviously needs vehicles and ship and they have trucks, vans, bulk carriers
and vessels and ships for logistic and distribution support which are used for fast delivery. That’s
why they maintain their logistics network nicely which helps in warehousing facilities. Premier
cement ware housing facilities are mostly depends on their strong network

Recommendation
The best organizations, fundamentally, keep developing and reevaluating their supply chains,
paying little heed to their situation in the market. Along these lines, these organizations oversee
chances better, react to any new adjustment in a short period of time and endeavor new doors
definitely more effective route than their competitors. Also, the right amount of supply chain
framework enables different opportunities to reinforce development and productivity. In this
matter premier cement is doing quite well but there are areas which can be improved and some of
the are:
• Improving the overall information management system
A modern information management system is definitely beneficiary for any business in a scope of
regions including distribution, supply chain, inventory management tracking the orders, stock
administration and exact conveyance of customer’s demand. So premier cement should take extra
measure to improve their information system, On the off chance if they can't bear the cost of a
custom arrangement, scan for a solid and reasonable distribution center/stock administration
programming that could give them greater perceivability of items and framework and empower to
rapidly process the customer’s requests.
• Changing how the standard operating process works
Premier can improve their standard operating process and they can work on the following things:
1. More data and information sharing across the different chain.
2. Week by week, and month to month investigation report-to lead different departments and
group about the business stream and market conduct patterns.
3. Twofold checking system– people are inclined to blunder and may prompt shipment of
request for second time. This adds more bucks to the expense and yields misfortune. In this
manner, they can initiate twofold checking.

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 • More control over the operational cost
Premier cement can enhance their operational cost and related other things. Different things can
be responsible for inaccurate supplies. Rather than simply adjusting the specific order, it's basic to
scan for the specific point in the process where the disparity emerged to forestall the repeat of a
similar error.
• Redefine the distribution policies
In a competitive market a very important thing is the distribution policies. It decreases item rot,
while improving the after sales service. The more extensive field of supply chain can enable an
association to plant seeds for long haul financial security. This is why Premier cement need to set
up legitimate objectives and goals for the further improvement of distribution policies. They can
et up strategies in a way which can correspond with the general supply chain procedure.

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Conclusion
Today the cement industry is thoroughly dependent on efficient logistic and supply chain network.
Without a powerful and effective coordination of these two, it is unimaginable to expect to flourish
in such a competitive market. Although Premier cement is doing quite well in their market share,
there are always room for further improvements.
Premier cement flaunts a solid and effective supply chain set-up which helps them to convey an
utility to its customers. Premier cement deals with the transportation of raw materials to solidify
plants, the delivery of cement to their customers and accomplices it all in conceivable time and the
quickest way imaginable. They feel the pride wholeheartedly in the way that their supply chain
and logistic is profoundly experienced to alleviate any hole between the ordering time and
conveyance of items. Premier Cement guarantees timely delivery of item and this way it stays
away from wastage of time and assets. Premier cement's Logistics system contains a coordinated
system of vessels, carriers, huge trucks to open small vans to transitory capacity waterway port
found all around the country that is overseen and checked by an effective group of people. The
organization anticipates catching an overall market share of 10% as per their ability by making
appropriate and full usage of their assets. Their excellent distribution channels are basic
empowering agents to their development system, permitting them to turn out advancements on a
major scale. They ceaselessly audit their marketing route, incorporating associations with
wholesalers, merchants as well as suppliers. They urge to set up best practices at the merchant end
also, to guarantee administrative consistence of the cement industry in general.

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References

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