Logistics Channel

The logistics channel followed by Bata Bangladesh is a multi-Echelon Logistics channel. A

multi-Echelon logistics channel is a more complex logistics channel with a market warehouse
and retailers. In a multi-Echelon logistics channel, raw materials from different supply points
come into a manufacturing plant for production. The finished goods from production plant goes
into a warehouse. Then from warehouse the finished goods go into different retail shops in
different locations.

Bata Bangladesh has its suppliers in Bangladesh as well as in different countries. Bata
Bangladesh imports its essential raw materials from countries like China, India, France, and
Italy. The raw material they import include leathers, soles, fabrics, etc. From the local suppliers
in Bangladesh they take materials like leathers, laces, stickers, etc and other raw materials like
rexene, PVC sole, nylon net, rubber, chemicals etc. are imported from China.These raw materials
go into their manufacturing plants that is situated in Dhamrai and Tongi. From their
manufacturing plants, the finished products go into a Central Distribution Center (CDC)
warehouse from where they distribute their finished products to retail shops that are located all
around Bangladesh. The packaging of the finished products is done according to the
specifications of different stores in the Central Distribution Center in Tongi Factory. From the
central distribution center, they transfer the products directly to the retail outlets and other places
through company owned vehicles. And also, they have annual contract with the Third-party
logistics services. And 3PL service are liable to deliver the product on time and responsible for
all the deals related to transportation and delivery process.

Inbound Logistics

Inbound logistics is essentially a part of the manufacturing process where every aspects
manufacturing process related logistics channel is considered. Bata produces more than 150000
pairs of shoes and sandals daily which are operated in two manufacturing facilities. The inbound
logistics of Bata Bangladesh consists of 3 essential parts. These are, sourcing raw materials,
transferring those raw materials to manufacturing plants, and transferring finished products to
Bata’s Central Distribution Center. There are different kinds of raw materials such as - leather,
Rexene, PVC sole, Nylon net, rubber, elastic, lace, chemicals etc. Raw materials come from
tannery facility located at Hajaribag, they give the materials within certain period of time. Also,
they have their own tannery facilities in dhamrai which consists of 20%- 35% of the raw
materials which also help them to allocate the cost effectively. They use just in time inventory
system which is a management strategy that aligns raw-material orders from suppliers directly
with production schedules. The time for the raw materials suppliers to provide the materials is
maximum 7 days. The raw materials are transferred to Bata’s Manufacturing Plants through their
own vehicles. The raw materials are unloaded in the manufacturing plant through Bata’s in-
house vehicles, i.e. forklifts. And the finished goods are transferred to the Central Distribution
Center through Bata’s own vehicles.

Outbound Logistics

Outbound Logistics is referred to the physical distribution of finished goods to serve the
customers. There more than 250 stores in Bangladesh. Despite having many outlets, they make
sure that daily sales records are posted at the end of the workday. The outbound logistics of Bata
include distribution of finished goods from Central Distribution Center (CDC) to different retail
stores of Bata located all around Bangladesh. It helps to deliver products within 24 hours and
customers desired products are provided to customers who live inside Dhaka in less than 24
hours. With the help of inter-transfer systems CDC gets daily updates and the last situation of
retail stores. The distribution process is operated through Bata’s own transportation system and
vehicles like truck, pick-up van and covered van which are dispatched from CDC and since the
company owns vehicle for logistics purposes, it reduces the cost associated with vehicle services.
Logistics Network
Managing Order Cycle

The order cycle of Bata Bangladesh depends on the demand forecast done by the forecast team
of Bata. The inventory management process of Bata is related to the order cycle, which is
controlled by the demand forecast. The demand forecast depends on two major seasons. Those
are the winter season and the summer season. The demand cycle of Bata changes with season.
For example, in winter the demand for shoes are more. So, Bata sources raw material needed for
producing shoes before winter. The order cycle time of Bata for suppliers in other countries is 2
months. Bata tries to maintain an inventory of 1 month – 45 days for their imported raw
materials. On the other hand, for local suppliers Bata maintains a weekly order cycle. They
purchase raw materials from local suppliers every week based on their demand. They always
maintain a just-in time inventory system for local suppliers.

Changes in the Logistics Channel during COVID – 19

The coronavirus or COVID-19 is a global pandemic situation that has affected companies all
around the world. The huge channel of Bata Bangladesh is also being crippled by the devastating
consequences of COVID-19. Bata Bangladesh was able to start its operation in Bangladesh with
skeleton staff in line during the second phase of lockdown due to COVID-19. The logistics
channels of Bata Bangladesh operated at minimal level during the COVID-19. The changes in
their logistics channel included the usage of their inventory according to demand without any
replenishment of inventory, transferring of finished products to CDC, and transferring of finished
products manufactured before COVID-19 to Bata’s specific outlets.

The current situation of logistics channel of Bata Bangladesh improved as they are currently
recovering from the devastating impacts of COVID-19. The supply of raw materials is
continuing at low pace as shipments are delayed due to COVID-19. In a nutshell, currently Bata
Bangladesh is recovering from the impacts of COVID-19 through continuing their normal
manufacturing process.

Transportation
Transportation creates a bridge between suppliers to end customers directly or indirectly. Same
goes with Bata Bangladesh, as they use different kinds of transportation system to ensure a
smooth operation. Collectively, the transportation system of Bata Bangladesh with its suppliers
could be called intermodal transportation. The intermodal transportation system refers to the use
of two or more carriers in the through movement of a shipment.

Bata Bangladesh uses fishy back and birdy back transportation system for importing its raw
material from countries like China, France, Italy. Fishy back transportation system refers to the
use of water carriers and motor carriers, and birdy back transportation system refers to the use of
air carriers and motor carriers. Bata uses motor carriers, i.e. trucks, to get its raw material from
India. For getting supplies from local suppliers, Bata uses trucks as well. For local movement
Bata Bangladesh uses motor carriers, trucks.

Bata Bangladesh uses motor carriers, i.e. truck, to get their supplies from Indian suppliers. As
they have their own vehicles for distribution, so they can easily distribute raw materials as well
as finished goods easily and efficiently. They use water carriers to get their raw materials from
Chinese suppliers and use air carriers to get their supplies from other countries.

The transportation system Bata Bangladesh uses for their local movement is their own
transportation vehicles. The main local transportation of Bata Bangladesh includes transferring
raw material into production plant, transferring of finished goods to the Central Distribution
Center (CDC), and transferring those to retail outlets from CDC. They also use third party
logistics channel for their e-commerce service. The third part logistics channel consists of
different courier services that deliver the products of Bata Bangladesh to specific addresses.

Pipeline is another important transportation mode they use for operating their production
process. The pipeline transport refers to the long-distance transportation of oil and gas through
pipes. Bata Bangladesh has an industrial contract with the government for pipeline shipment.
The pipeline shipment is required in the manufacturing process of Bata Bangladesh as they need
fuel to run their manufacturing plant and machines.

Effects of COVID-19 in Transportation System

The impact of COVID-19 is devastating in every sector of Bata Bangladesh. The to lockdown
the transportation system of Bata Bangladesh was on a long halt. Bata continued its operation
during the second phase of lockdown to a limited extent. They transferred their sales to their
ecommerce service during COVID-19. As a result, they used third party courier services in order
to deliver their products to specific addresses.

Warehousing

Warehousing is a safety storage of raw materials, finished goods, and other necessary products
required for the manufacturing process of Bata Bangladesh. Bata Bangladesh maintains three
types of inventory, these are, raw materials inventory, work-in-progress inventory and finished
goods inventory. Raw material inventory refers to the inventory that are waiting to be worked on,
work-in-progress inventory refers to the inventory that are in the manufacturing plant or are
being worked on, and the finished goods inventory refers to the Central Distribution Warehouse
that is used Bata for distributing finished goods to various retail outlets. The warehouses are
situated near factory so that Bata can minimize their transportation costs.

Inventory Storage Time and Reasons

Bata Bangladesh’s inventory depends on the demand forecast made by the Bata forecasting team.
Bata's inventory management mechanism is connected to the order cycle, which is regulated by
the demand forecast. Two major seasons depend on the demand forecast. These are the summer
season and the winter season. Bata 's demand cycle varies mostly with season. For instance,
demand for shoes is more in winter. So, before winter, Bata sources the raw material required to
manufacture shoes. Bata's order cycle period for manufacturers in other countries is 2 months.
For their imported raw materials, Bata seeks to maintain an inventory of 1 month to 45 days. On
the other hand, for local suppliers Bata maintains a weekly order cycle. So, they replenish the
raw material inventory from local suppliers on a weekly basis. They purchase raw materials from
local suppliers every week based on their demand. They always maintain a just-in time inventory
management system for local suppliers.

Inventory Management Techniques

The demand planners in Bata makes a demand projection for 3 months. On the basis of the
projection Bata Bangladesh creates a purchase order and gets their raw materials from foreign
countries. For the inventory management of their imported raw materials, they use stock review
analysis. They try to maintain an inventory of 30-45 days. For the local supplies, Bata
Bangladesh uses a just in time inventory management technique. The just in time technique of
inventory management is risky but is able to properly execute this technique. As a result, through
this technique Bata is able to minimize its cost and minimize their storing cost. For maintaining
the just in time technique efficiently, Bata Bangladesh replenishes its inventory of local supplies
every week according to demand.

Relationship between Logistics Network and Warehouse Facilities

Warehousing and Logistics channels are a tandem in terms of Bata Bangladesh’s operational
scopes. So, ensuring a smooth collaboration of these components is essential to run a smooth
operation in Bangladesh. Without a smooth collaboration of logistics network and warehouse
facilities, Bata can’t even run its production smoothly let alone continuing its operations. The
logistics and warehousing functions of Bata Bangladesh are assuredly aligned and synchronized
in order to be most effective and efficient. Bata Bangladesh focuses on reducing lead time as
much as possible. As a result, they try to maintain a firm logistics network and replenish their
inventories in a timely manner. With the demand forecast team of Bata Bangladesh, they are able
to project required inventory level according to their demand. As a result, through their strong
logistics network, they are able run their production and warehouse facilities smoothly.

Bata Bangladesh logistics network starts with the sending of raw materials to the manufacturing
plant in Tongi and Dhamrai. The finished goods of Bata Bangladesh are transferred to the
Central Distribution Center in Tongi from the manufacturing plants. And the logistics network of
Bata Bangladesh ends at the distribution process of finished goods from central distribution
center to various retail outlets. This whole process of logistics network of Bata Bangladesh is
directly connected with warehouse facilities of Bata Bangladesh.

Changes in Warehouse Facilities

There were not many changes in the warehousing of Bata Bangladesh. As the warehouses
remained the same during COVID-19, and the raw materials and finished goods were stored
safely in warehouses during lockdown. Bata is able to use the stored materials and goods after
the lockdown, when they started their production. Bata Bangladesh is also able to fulfill its
 customer demands during COVID-19, as they manufacture their goods needed after 2 months
beforehand according to their demand forecast. With this inventory Bata Bangladesh is able to
minimize its losses and continued to deliver value to its customers.

Conclusion

Bata Bangladesh is a family store which manufactures shoes for men, women and children. It’s
also known as the most renowned brand for its quality and better customer service. Bata’s
mission is to help people look and feel good, be the customer's destination of choice,attract and
retain the best people and remain the most respected footwear company. They provide shoes for
everyone, for every season and for every profession. They’re focused on the updated fashion
trend.

Bata uses its own vehicles for delivering the products in the retail stores which indicates cost
efficiency and third party logistics for online stores which ensure fast delivery to the customers.
Bata is very considerate about delivering the product on time which strengthened their
relationship with suppliers and dealers. Both Suppliers and manufacturers get updated inventory
data through a software linked with the BATA’s server which helps to deliver products just in
time and keep the dealers satisfied. Though the COVID-19 situation hits hard in their business,
they are adapting to the current situation and thinking ways to improve their productivity.

Recommendation:-

● During covid Bata should make its work place safe for the employees and make
arrangement to communicate through apps to manage time, safety etc so that social
distancing could be easier for employees.
● Restrict non-essential travel in the work place.
● Assist flexible work schedule.
● Redesign to source locally because majority of the raw materials are imported from abroad
and for pandemic in many countries international shipping are unavailable.
● Controlling cashflow whether suppliers can be paid immediately after delivery.
● Make sure the availability of replacement suppliers as needed.