TERM PAPER

Supply Chain Management of Lafarge Holcim Bangladesh

Ltd
Course Title – Supply Chain Management
Course Code – MKT418
Section- 01

Submitted To
Md. Anamul Hoque
Assistant Professor
Department of Business Administration

Submitted By
Name ID
Fahim Ahmed 2018-3-10-031
Sakib Rahman 2018-3-10-016
Jubaer Alam Abdullah 2017-3-10-137
Nishat Rahman Chowdhury 2018-1-10-085
Abrar Anik Chowdhury 2018-3-10-015

Date of submission: 28th April 2022

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 Letter of Transmittal

28th April 2022

Md. Anamul Hoque

Assistant Professor
Department of Business Administration,
East West University

Subject: Submission of Study and Evaluation of Supply Chain Management on Lafarge

Holcim Bangladesh Ltd
This is to inform you that we have completed the report on supply chain management of Lafarge
Holcim Bangladesh Ltd. as required by you for the course purpose. The report focuses on the
background of the company, the history of supply chain, supply chain strategy, competitive
strategy, the strategic fit, implied demand uncertainty and their product and services and discussion
about our findings
In writing this case, we have followed your instructions for report writing to present our views and
understanding in the easiest way. However, we will be glad to clarify any discrepancy that may
arise.
Thank you.
Sincerely,
Fahim Ahmed
Sakib Rahman
Jubaer Alam Abdullah
Nishat Rahman Chowdhury
Abrar Anik Chowdhury

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Acknowledgement
Theoretical information obtained from an educational institution is insufficient to understand the
subject matter; practical knowledge is required. That is why we were given the task of preparing a
report on “Lafarge Holcim Bangladesh Ltd.’s Supply Chain Management" in order to bridge the
gap between these two domains.
Primarily, we would want to thank Allah for keeping us mentally and physically fit enough to
prepare this report. Again, we would want to express our heartfelt gratitude and appreciation to
those individuals, because without their devotion and contributions, this project would not have
been possible and would not have received the successful completion. I would like to take the
opportunity to express my gratitude to our honorable faculty member
Md. Anamul Hoque
Assistant Professor
Department of Business Administration, East West University
For his valuable suggestion, without his supervision that would have been extremely difficult to
accomplish.
In the process of this, study one person who continuously assisted us to learn numerous aspects of
Supply Chain. One of our talented alumni from the university.
Mehedi Hasan
Former Executive- Management Information System
Supercrete Bangladesh
In Additions, we are also thankful to
Fakhruzzaman Chowdhury
Former Financial Controller of Lafarge Holcim Bangladesh,
Who helped us a lot from time to time and gave us many information about the company.
Finally, we humbly appreciate the sources we found in the web which made our work easier with
their valuable information and easy to browse websites.

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Executive Summary
Bangladesh's cement industry has an installed capacity of 65 million tonnes and can efficiently provide 58
million tonnes. The demand, on the other hand, is roughly 33 million tonnes (The Daily Star, 2020). We
expect that, in the days ahead, demand will increase and cement consumption will surge, thanks to ongoing
and planned infrastructure building activities. Locally, there is no shortage of cement. Notably, some
companies have been selling cement to India, while others plan to export cement to Nepal and Myanmar in
the near future. (IDLC Finance Limited, 2015) The term "supply chain management" refers to the flow of
goods from the manufacturer to the end user via various channels. Various aspects of Supply Chain
Management are extensively covered in this paper. Transportation, distribution, inventory, payment, and
supplier are just a few examples. Along with the hypothetical aspects of these capabilities, this paper also
provides a framework for how " Lafarge Holcim Bangladesh Ltd " operates its cement supply chain.

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Table of Contents
Letter of Transmittal ..................................................................................................................................... 2
Acknowledgement ........................................................................................................................................ 3
Executive Summary ....................................................................................................................................... 4
Introduction ................................................................................................................................................... 7
Supply Chain Management Evolution .......................................................................................................... 8
The Beginning ........................................................................................................................................... 8
Age of Logistical Emergence .................................................................................................................... 8
Technological Revolution ......................................................................................................................... 9
Globalization ............................................................................................................................................. 9
Present of Supply Chain and Logistics ..................................................................................................... 9
Company Profile ......................................................................................................................................... 10
Contribution of Competitive Strategy & Supply Chain Strategy ................................................................ 10
Supply Chain Strategies of Lafarge-Holcim Bangladesh Ltd ..................................................................... 11
LHBL Logistics and Supply Chain ......................................................................................................... 12
Transportation Management of LHBL ................................................................................................... 12
Achieving strategic fit ................................................................................................................................. 13
Step 1: Understanding the Customer and Supply Chain Uncertainty ..................................................... 13
Implied Demand Uncertainty: ............................................................................................................. 13
Step 2: Understanding the Supply Chain ................................................................................................ 13
Step 3: Achieving Strategic Fit ............................................................................................................... 14
LHBL’s Distribution Process .................................................................................................................. 14
Distribution Network .................................................................................................................................. 15
LBHL Inventory Facilities ...................................................................................................................... 16
Shorter Stocks or Damage....................................................................................................................... 16
Employee and Organization of supply chain and Logistics .................................................................... 17
LHBL SUPPLY CHAIN COST AFFECTED BY NETWORK STRCTURE ....................................... 17
DESIGN OPTIONS OF LAFARGE HOLCIM BANGLADESH DISTRIBUTION NETWORK ........ 17
Management of Inventory and Warehouse- ............................................................................................ 20
LHBL INVENTORY FACILITIES- .................................................................................................. 20
LHBL Stocks shortage ........................................................................................................................ 21
Cost cutting in Logistics ..................................................................................................................... 21
SHIPPMENT PROCESS OF LHBL....................................................................................................... 21

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Contribution of Technology in Supply Chain ............................................................................................. 21
Web-Based Technologies for Lafarge Holcim: ...................................................................................... 22
Complete financial management ............................................................................................................. 22
Supply Chain Efficiency ......................................................................................................................... 22
Effective Production Planning & Control ............................................................................................... 23
Dispatch & Sales ..................................................................................................................................... 23
Conclusion .................................................................................................................................................. 24
References ................................................................................................................................................... 25

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Introduction
The flow of commodities, the transportation and storage of raw materials, the placement of finished items,
and the progress of work from the production site to customers are all defined by supply chain management,
which is defined by interconnected and interrelated networks of channels and enterprises. Through his
interview for Financial Time in 1982, "Keith Oliver," a consultant at Booz Allen Hamilton (Booz and
Company), introduced the term "supply chain management" to the corporate world. The word gradually
spread to many groups, and by the mid-1990s, it had become well-known. Operational management,
logistics, procurement, information technology, product development, sourcing, and manufacturing are all
major areas of SCM. "Supply chain operations" include "everything from product creation, sourcing,
production, logistics, and the information systems needed to manage these activities," according to Robert
Handfield Ph.D (2011).
To optimize customer value and generate a lasting competitive advantage, supply chain management
follows a broad approach that includes design planning, execution, control, and monitoring. Creating net
value, building a competitive infrastructure, leveraging global logistics, synchronizing supply with demand,
measuring performance globally, calculating supply chain transactions, managing supplier relationships,
and controlling associated business processes are all goals achieved through SCM.
Cement was initially made in Mesopotamia in the third millennium B.C., and later in Egypt. After a certain
number of miles, a bulk product is produced, which might be hydraulic or non-hydraulic. Lime (Calcium
Hydroxide), Silicate, Belite, Alite, Celite, and Brownmillerite are the basic raw ingredients in cement.
Hydraulic cement is also known as Portland cement, and it is widely utilized across the world. Cement
comes in a variety of designs as well. Cement's main feature is that it's a binder, which means it can bind
materials together. In today's world, cement may be a critical commodity or material for construction
projects. The cement business is one of Bangladesh's most important industries, and it is rather substantial
in comparison to the rest of the globe.
Holcim is a company that works to improve people's lives and the environment. Holcim, as a worldwide
leader in creative and sustainable construction solutions, is helping to create greener cities, better
infrastructure, and higher living standards all over the world. Holcim is on its way to become a net zero
corporation, with its people and communities at the center of its success. As a world leader in recycling,
the firm is pushing the circular economy to produce more with less. Holcim is the parent business of ACC,
Aggregate Industries, Ambuja Cement, Disensa, Firestone Building Products, Geocycle, Holcim, and
Lafarge, which are among the world's most trusted building brands. Holcim employs 70,000 employees in
70 markets and four business segments: cement, ready-mix concrete, aggregates, and solutions & products.

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Supply Chain Management Evolution

The Beginning
The focus of logistics research in the 1940s and 1950s was on how to employ automation (e.g., pallets and
pallet lifts) to enhance labor-intensive material handling procedures, as well as how to make better use of
space through racking and improved warehouse architecture and layout. Pallets were widely used as the
"unit load" idea grew in favor. This approach was expanded to transportation management in the mid-1950s
with the creation of intermodal containers and the ships, trains, and trucks needed to convey them. This was
a precondition for the far later globalization of supply chains. Despite the usage of terminology like
"warehousing" and "materials handling" to characterize many of these endeavors, they may be thought of
as fundamental applications of industrial engineering rather than a separate profession.
By the 1960s, there was a definite trend toward moving more time-sensitive freight transit to trucks rather
than rail. As a result, simultaneous consideration of storage, material handling, and freight transportation
became necessary, and the term "Physical Distribution" was coined. The National Council of Physical
Distribution Management was founded in 1963 to bring industry attention to this issue, and it rapidly
became the industry's leading body. This tendency was followed by academic research and education to
meet the expanding industrial recognition of the demands in this area. Due in large part to the fundamental
paradigm shift that happened in the 1960s and 1970s with relation to computers, this sector got considerably
greater attention in both business and academia. Almost all transactions and record keeping were done
manually before to the 1960s. The computerization of this data opened the door to a plethora of logistical
planning advancements, ranging from randomized warehouse storage to inventory optimization and truck
routing. The technologies that academics had previously only been able to evaluate in theoretical models,
notably those from Operations Research had now moved considerably closer to reality.
In the shift from theory to practice, however, there were numerous tough research questions to overcome.
This led to the establishment of the Production and Distribution Research Center, the Material Handling
Research Center, and the Computational Optimization Center at Georgia Tech in the late 1970s and early
1980s. Each of these centers concentrated on a different facet of what the new computer technology enabled.

Age of Logistical Emergence

In the history of supply chain management, the 1980s saw the start of a major shift in logistics. In the early
1980s, the introduction of personal computers offered planners with much improved computer access as
well as a new graphical environment for planning. This resulted in a rush of new technology, such as
adaptable spreadsheets and map-based interfaces, allowing for significant advancements in logistics
planning and execution. For supply chain design and distribution planning, the Production and Distribution
Research Center was a pioneer in merging map interfaces with optimization models. The Material Handling
Research Center took the lead in creating novel material handling automation control technologies. The
Computational Optimization Center created novel large-scale optimization techniques that allowed
previously intractable airline scheduling issues to be solved. Much of the methods established in these labs
found its way into commercial technologies rather quickly.
Perhaps the most significant change in logistics in the 1980s was that it was beginning to get widespread
notice in industry as a highly expensive, very vital, and extremely complicated process. Company
executives realized that if they were prepared to invest in educated people and modern technology, logistics
might help them considerably increase their bottom line. The National Council of Physical Distribution
Management became the Council of Logistics Management in 1985, after a name change (CLM). The new

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CLM cited "the growing discipline that includes the integration of inbound, outgoing, and reverse flows of
products, services, and related information" as the basis for the name change. Previously, the word
"logistics" was almost solely used to describe the support of military operations.

Technological Revolution
The advent of Enterprise Resource Planning (ERP) technologies in the 1990s drove the logistical boom
even more. These systems were inspired in part by the success of Material Requirements Planning systems
developed in the 1970s and 1980s, in part by a desire to integrate the numerous databases that existed in
almost every company. However, rarely communicated with one another and in part by fears that existing
systems would fail catastrophically due to their inability to handle the year 2000 date. Despite some
considerable difficulties in having, ERP systems installed and operational, most big organizations have
implemented ERP systems by the year 2000. The shift to ERP systems resulted in a significant increase in
data availability and accuracy. The new ERP software also significantly enhanced recognition of the need
for better logistics planning and integration. A new generation of "Advanced Planning and Scheduling
(APS)" software emerged as a result.

Globalization
The phrase "supply chain" has gained broad notoriety because of industrial globalization from the mid-
1990s, notably the rise of manufacturing in China. Imports from China increased from over $45 billion per
year in 1995 to over $280 billion in 2006. The emphasis on globalization has highlighted the necessity for
logistics solutions to cope with complicated networks involving different entities spanning several countries
and under various management. Supply chain management is increasingly being used to refer to strategic
concerns, whereas logistics is used to refer to tactical and operational issues. The Council of Logistics
Management changed its name to the Council of Supply Chain Management Professionals in 2005 to reflect
the growing link of supply chain management with strategy. They distinguish between "Logistics" and
"Supply Chain Management," stating, "Logistics is that part of the supply chain process that plans,
implements, and controls the efficient, effective forward and reverse flow and storage of products, services,
and related information between the point of origin and the point of consumption to suit consumer needs."
Present of Supply Chain and Logistics
Since the 1980s, computer technology has grown at such a rapid pace that it is now well ahead of the supply
and logistics field's capacity to fully employ the new technologies. Given the prevalence of Internet usage
today, it is difficult to realize that Microsoft's Internet Explorer 1.0 debuted in 1995. Communication
capabilities have profoundly altered our perceptions of communication and information exchange.
However, supply chain and logistics planning are still predominantly focused on dispersed models that
arose as a result of the introduction of personal computers. Without a doubt, academic research can allow
a new generation of supply chain and logistics planning technology that is based on centralized planning
with dispersed participation. These technological advancements have the potential to bring enormous value
in conventional supply chain and logistics domains such as storage and distribution, transportation, and
manufacturing logistics. However, many non-traditional sectors, such as health care logistics and
humanitarian logistics, can benefit greatly from expanding on concepts and technology that have previously
proved effective in traditional supply chain and logistics fields. Finally, evaluating the supply chain and
logistics performance of firms across many industries and countries may yield incredibly significant
information.

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Company Profile
LHBL (Lafarge Holcim Bangladesh Ltd.) is a leading cement manufacturer in Bangladesh. It has been in
operation for nearly two decades and has invested approximately US$ 500 million in the construction of
one fully integrated cement plant and three grinding units, making it the sector's largest foreign direct
investment. It is a partnership between Holcim and Cementos Molins. The company manufactures world-
class cement using state-of-the-art equipment and well-trained employees to meet the increased demand
caused by huge infrastructure building plans and improved socioeconomic conditions.
Their plant at Chhatak near Sylhet in northeast Bangladesh is a one-of-a-kind cross-border operation,
sourcing limestone, the basic raw material, from its own quarry in nearby Meghalaya in India. A 17-
kilometer-long overland belt conveyer transports the limestone, assuring a constant supply of raw materials.
This factory saves the country roughly US$ 45 million in foreign exchange each year by generating clinker.
Furthermore, the organization has offered over 3000 employees with direct and indirect work possibilities.
Lafarge Holcim Bangladesh Limited is considered as a trusted solution supplier in construction materials
due to its grasp on global standards and innovative strength. It manufactures and supplies bespoke cement
for some of the country's most high-profile projects.
Their Strength:

• They are the only integrated cement plant in Bangladesh.

• They can ensure consistent quality cement as they produce our own clinker whereas the rest of the
cement companies import from abroad.
• They source limestone from their own quarry.
• They claim that they have state of the art technology and processes and an international standard
24/7 Quality Control and Monitoring system

Contribution of Competitive Strategy & Supply Chain Strategy

Competitive advantage refers to a benefit that a company have that is superior to that of the competitors or
that is unique to that company. There are some customer demands in the target market that a business wants
to meet through its competitive advantage, and they do so by employing competitive tactics. Some of the
tactics are.
Lafarge Holcim has biggest market share in Sylhet. Because of the low-cost transportation from their
facility in Chattak. They can easily supply the demand of that market easily from their facility.
It is a credit-based market. Most of the sales occur on credit. To encourage cash sales company gives
incentives and discounts to distributors who buys in cash.
Supplier plays a major role in final sale. That is why Lafarge gives gifts and incentives to distributors. Such
as holiday trip for their family in the country and abroad. Sometimes they give cars to big distributors.
Retailers gets small incentives and every season they get jackets, raincoats, umbrella etc. keeping good
relationship with distributors is one of their key strategies.
Before there were one big distributor in the market. They had leverage over the companies then Lafarge
Holcim launched a corporate campaign to break that one big distributor to many small ones. That proven
effective and smaller distributor has much less leverage and cannot work as a monopoly.

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Supply Chain Strategies of Lafarge-Holcim Bangladesh Ltd

The general process of supply chain management follows design planning, execution, control and
monitoring to maximize customer value and achieve a sustainable competitive advantage. Through SCM
organizations gain various objectives, like creating net value, building a competitive infrastructure,
leveraging worldwide logistics synchronizing supply with demand, measuring performance globally,
calculating supply chain transactions, managing supplier relationships, and controlling associated business
processes. According to the Council of Supply Chain Management Professionals (formerly the Council of
Logistics Management), Supply Chain Management is the systemic coordination of traditional business
functions and tactics across business functions within a specific company and across business within the
supply chain for the purposes of improving the long-term performance of individual companies and a supply
chain as a whole.

Bottlenecks must be eliminated, and efficiency must be improved. Performance is measured in terms of
total system efficiency and the equitable distribution of monetary rewards among individuals in the supply
chain. Customer criteria must be met by the supply chain system. "Supply Chain Management is the
systemic coordination of traditional business functions and tactics across business functions within a
particular company and across business within the supply chain for the purposes of improving the long-
term performance of individual companies and a supply chain as a whole," according to the Council of
Supply Chain Management Professionals (formerly the Council of Logistics Management). (Cement
Solutions, n.d.)

Figure – 1: Supply chain hierarchy of LHBL (A member of Holcim Group, 2022)

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LHBL Logistics and Supply Chain

Anywhere in Bangladesh, an efficient logistics organization ensures on-time shipping and distribution.
Plant logistics keeps in touch with Packing, Manufacturing, and the Head Workplace Fleet. (Colyle, 2011)

• While the sales group manages orders from the head office, the assistance group manages barges,
trucks, and transports, as well as ship information from the plant logistics group, using the SAP
system.

• After arriving at the plant, the automobile is handed a card with all of its information (ID,
transporter, destination, freight price, and so on) inserted.

• Firstly, empty trucks are evaluated, and then cement luggage is loaded with the assistance of a
robotic loader.

• Two or four laborers load the individual bags in the truck and physically count them for the pass
check.

• Cement, clinker, and aggregate are also loaded on all barges in an automated manner.

Transportation Management of LHBL

On-time product delivery is one of the most important aspects of LHBL's supply chain. LHBL collaborates
with inbound and outbound freight Supply Chain Logistics Procurement in order to maintain and meet this
KPI. Ecology of Industry Transportation Distribution Warehouse Handling of Loads is a term that refers to
the process of Management of River Road 21 operations, including assessing the mood of cargo such as
vehicles and ships, and so forth. They, on the other hand, look at the frequency of shipments, the weight of
the products, and the route taken, among other things.

LHBL employees examine cost-effective transportation while retaining high-quality products, ensuring that
the route and mode of transportation are convenient. LHBL follows four important processes to maintain a
high-quality transportation system, which are outlined below. (Werner Reinartz, 2004)

• Planning & Decision Making: Transportation workers design transportation plans based on user
strategy, with priority and urgency measured. In addition, they examine quality transportation,
danger and hazards, price, shorter lead time, and fewer stoppages while fixing transportation.
• Carryout Transportation: Logistics staff create transportation management systems, and
transportation authorize and accept to carry out this plan with various activities such as rate
acceptance for carriers and carrier dispatching EDI, among others.

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 • Inbound & Outbound Transportation: Transportation tracks physical and administrative
operation issues and location tracking, such as arrival time, documents, customs clearance, invoice
checking, and sends a transportation alert to the destination in the event of any delays, accidents,
robbery, or non-forecast issues, after starting the transportation. (Werner Reinartz, 2004)

Achieving strategic fit

To achieve strategic fit, a company's supply chain strategy should be built around the competitive advantage
that it promises to deliver. Through three processes, they achieve strategic fit.

Step 1: Understanding the Customer and Supply Chain Uncertainty

Lafarge Holcim focuses on efficiency in October to march season because that is the dry season. People
usually buys cement and make buildings in that season because of the lack of rain. Raining hampers the
curing process of cement. In addition, transposition of cement is hampered and the cement faces a chance
of being damaged while transporting because of water level rising in the river due to weather condition.
They response to the demand and make huge amount of product in that season and that is why they make
record amounts of sales in that period. They face uncertainty in the rainy season. Cement price and demand
is also connected with steel rod price. If rod price increases demand for cement decreases.
The facility is responsive at April to September. At that time the make, cement upon getting the order.
Finished cement doesn’t stay good for a long time. It becomes lumpy and unusable. That is why only
clinkers are kept in the silo and made in to finished product upon order.

Implied Demand Uncertainty:

When a single supply chain is attempting to meet a percentage of the total demand, it faces some
uncertainty, which is referred to as implied demand uncertainty. As we discussed before, the demand is not
that much uncertain throughout the year but the correlation with steel rod price makes it somewhat
unpredictable.

Step 2: Understanding the Supply Chain

The Supply chain of Lafarge Holcim is efficient because they have single type of products and produce and
distributes a huge amount of them. It is natural for a company's costs to fall as it becomes more efficient. It

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is challenging to be both responsive and efficient at the same time. Lafarge Holcim is a company that is
both responsive and efficient. Efficient in peak season and responsive the rest of the year. Their raw
materials come from Vietnam and Thailand via ship and from India on a conveyer belt. They use Barge and
Truck. They are the only company who have bulk carrier, which can carry up-to 25 tons. Unlike other
manufactures, they have machine that breaks limestone into clinkers. That is how they can ensure quality
of the clinkers. They have VRM machine, which ensures good production quality and decreases production
time. They have Factory silo stock, which stocks clinkers and sometimes finished product for few days, but
cement is good when it’s freshly made.
They have 14 sources 4 factory throughout the country and 10 berth or ghaat. They outsource most of the
trucks from third party and during peak season, the cost and availability of the trucks become uncertain.

Step 3: Achieving Strategic Fit

After examining the previous phases in this step. Their supply chain has achieved strategic fit between their
competitive strategy and supply chain strategy, according to them. And, on the responsiveness scale, their
supply chain is between highly efficient and somewhat efficient.

LHBL’s Distribution Process

LHBL's distribution network is a big portion of the SCM department, which is an integrated management
system for customers and includes full storage and transportation of goods and services from manufacturers
to consumers. It is one of the most important factors in determining profitability and meeting organizational
goals.

Structured and systematic network distribution can offer profit to a company while also lowering costs and
increasing responsiveness. Customers benefit from network distribution. When a consumer requests a
product, network distribution ensures that the product is available. In today's environment, large
corporations use a network distribution system to meet the needs of their customers. Wal-Mart, for example,
uses this technique. (Marinko, 2016)

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 • Primary Distribution: Primary distribution is when LHBL's logistics team distributes products
from factories to depots or warehouses.
• Secondary Distribution: Secondary delivery refers to the distribution of goods from a port or
warehouse to end users, which is handled by LHBL's logistics team.
• Tertiary Distribution: from the warehouses to the store, LHBL’s logistics team handles tertiary
distribution.

Distribution Network

For a smooth distribution, LHBL has set up ten depots. Kutubpur, Daudkandi, Sylhet, Rajnagar, Nowapara,
Dipnagar, Kapasia, Chittagong, Nagarbari, and Hazigonj are the cities in question.

After receiving the order, logistics employees transfer cement to these locations or depots as stock as soon
as possible. Except for Ghat, which does a third-party contactor, all issues like as a third-party contactor
handles handling, LHBL monitoring, and control, manage. They hired an agency or a contractor to quickly
transport and unload cement. (Chopra & Meindl, 2020)

Figure 2: Distribution network. (A member of Holcim Group, 2022)

LHBL has six depots at Kutubpur, Kanchpur, Sylhet, Nowapara, Mirpur, and Dipnagar to ensure smooth
product distribution. Cement is delivered as stock from the factories to these depots, allowing

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commodities to be delivered to customers as soon as feasible. LHBL owns and operates the Kutubpur
depot; the others are managed by a third party but are monitored and regulated by LHBL. LHBL has a
handling contractor at every stage to ensure that things are loaded and unloaded quickly.
According to Mr Fakhruzzaman Chowdhury (Former Financial Controller of LHBL) Lafarge Holcim
Bangladesh, follow two types of distribution network. They mainly sell to consumer through distributor.
In addition, for government project and real estate industry LHBL directly sell to them. As Real Estate,
industries and government mega projects need huge volume of cement for the reason LHBL directly sell
to them. Also, Mr Fakhruzzaman Chowdhury said that LHBL sell 80% of cement through their distributor
and rest 20% they sell directly.

RESPONSE TIME-
As we know response time means the time gap between customer giving order and receiving order. Mr
Fakhruzzaman Chowdhury said that small house builder get product within 24 hours after giving order.
And Real Estate Industry get within 48 hours and government project gets within 1 week.

PRODUCT VARIETY-
Supercrete- Bangladesh’s only Portland Limestone Cement (PLC) brand, meets the requirements of BDS
EN 197-1: 2003, CEM II/ B-L, 42.5N. Supercrete Cement's consistent quality is ensured by its own
clinker production facilities and usage.
Holcim Strong Structure- As a raw material for concrete and mortar, Holcim (Strong Structure) is ideal
for all types of construction projects. Holcim (Strong Structure) gives a long-term strength development
advantage in concrete since it is a PCC type cement including PFA and slag.
Holcim Red- Holcim (Red) is an Ordinary Portland Cement (OPC) that meets the requirements of BDS
EN 197-1:2003, CEM I, 52.5N. Holcim Red's clinker, which is a major quality aspect, is mostly sourced
from trusted and authentic sources in Vietnam and Thailand.
Holcim Shokti- Holcim Shokti is Bangladesh's first rapid early strength cement, based on the 'Rapid Set'
technology, which improves early strength, provides shorter setting times, and uses the least amount of
water possible to ensure improved workability. It's a specialty cement that adds 50% more strength in just
two days.

LBHL Inventory Facilities

For customer satisfaction, safety and smooth transportation, LHBL keep inventory in its 10(Ten)
Depots/Ghats and plant. They keep the inventory in such a way so that easy transfer is possible. Right after
the production the goods are sent to depots according to free space in each depot. Depots/Ghat size and
location were established based on the demand of customer and easy transfer facility of that area. Sudden
if there is an emergency issues then cement will be stored in the warehouse of plant. (Colyle, 2011)

Shorter Stocks or Damage

When there is a scarcity of warehouse goods or damage occurs during operations at those storage facilities
or dumps. During reconciliation, a stock deficit or damage is discovered in 3rd party warehouse. The depot

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in-authority charges prepare an official letter to the warehouse authority for receiving. Following the
reconciliation, the Depot in-charge will discuss the issues with the warehouse contractor in accordance with
the service agreement, and the value of the stocks will be subtracted from the contractor's bill. If LHBL is
accountable for stock or damage, stock adjustments will be made in accordance with the company's policies.
The LHBL and the transporter contractor will enter into an insurance arrangement. (Werner Reinartz, 2004)

Employee and Organization of supply chain and Logistics

Effective management and their hierarchies are the important aspect of supply chain management, but many
businesses overlook the issue of valuing human resources. Employees that work in supply chain and
logistics in an organization should be well trained, loyal and dedicated to the firm, and motivated and
inspired to accomplish better for the company. The company's productivity should ensure that all of these
concerns are addressed. In addition, when employing employees, organizations should consider whether
they are enthusiastic and engaged in the task they will be doing, as well as their efficiency and relevant
abilities. (Marinko, 2016)

LHBL SUPPLY CHAIN COST AFFECTED BY NETWORK STRCTURE-

Mr Fakhruzzaman Chowdhury said their supply chain cost is affected due to network structure.
Inventory Cost- if the inventory remains in warehouse for longer time as a result it increases the
carrying cost. As it hold inventory and don’t converted to cash flow. No of days of inventory increases
which creates impact on cash conversion cycle. Sometimes quality also hampers due to holding inventory
for long day.

Transportation Cost- Disparaged by truck is higher than barge. Then cost of transport will be
increased. River transport cost is lower than road transportation.

Facility and Handling Cost- If sales from factory directly then handling cost is lower. If it moves to
warehouse then double handling required and cost increases.

DESIGN OPTIONS OF LAFARGE HOLCIM BANGLADESH DISTRIBUTION

NETWORK
Mr Fakhruzzaman Chowdhury said LHBL sometimes sell cement directly to consumer from Plant. And
sometimes consumer buy from distributors. Therefore, the model they follow is Manufacturer Storage
with direct shipping and Distributor Storage with Last Mile Delivery

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Manufacturer Storage with direct shipping of LHBL

LHBL PLANT

DISTRIBUTOR

CONSUMER

Figure 3: Shipping model

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 Distributor Storage with Last Mile Delivery

LHBL PLANT

DISTRIBUTOR

DEALER DEALER DEALER

1 3 6

CUSTOMER 1 CUSTOMER 1
CUSTOMER 1

Figure 4: Distribution Model Based on Last Mile

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As Mr Fakhruzzaman Chowdhury said LHBL sometimes sell cement directly to consumer from Plant.
And sometimes consumer buy from dealers and dealers buy from distributor. So the model they follow is
Manufacturer Storage with direct shipping and Distributor Storage with Carrier delivery.
Manufacturer Storage with direct shipping occurs mainly when customer give order to distributor and
distributor give order to LHBL plant in Chattak. LHBL directly send the goods to consumer from Plant.
As product is delivered from plant as a result inventory cost is low. Transportation cost is high because
LHBL used third party transportation to deliver the product quickly to clients house. There is no facility
cost because product is send directly from Plant and directly delivered to consumers and cost will be very
less as there is no need to store the product in their warehouses. The benefits consumers are getting as
they are directly getting product from LHBL plant so it is highly response. Also consumer can get variety
product from LHBL as consumer will get the product what they demanded for it. Consumer also feels
good because they directly get the product and LHBL has a app by which the consumer can know where
their product is by tracking. Also if there is any default in cement bag consumer can easily return it.
Distributor Storage with Last Mile Delivery occurs mainly when LHBL has its own distributor. And
under a distributor there are many dealers from customer give order and buy cement. Mr Mehedy said
When customer gives order to dealer, then dealer give order to distributor and then distributor give order
to LHBL. Then LHBL send the product to distributor. Then distributor give the product to the dealers and
dealers supplies to the customer. Mr Fakhruzzaman Chowdhury said that Sylhet is the biggest market
place of LHBL it plant is situated in the bank of Surma River in Chhatok in Sunamgong ,Sylhet. And
Sylhet LHBL Distributor was Monayem Khan Babul under his distribution channel there was many
dealer.

Management of Inventory and Warehouse-

Choices in the areas of stock, transportation, offices, and data control the execution of a production
network (responsiveness and productivity). In order to avoid confusion in the middle of supply and
interest, stock is kept up in the store network. Store network system design and exhibiting is a perplexing
framework, and stock adds to the unpredictability, but it also benefits the firm. Stock is a big expense
driver. According to Mr Mehedi Stock is managed and overseen in various ways for various industries
and goods. Expanding stock allows for more responsiveness, but it also increases stock delivery costs. A
supermarket inventory network should use genuine interest instances for common items to reduce weight
on all individuals and provide clients with items during peak interest periods. The store network is
designed in such a way that get together operations are close to businesses, the production network may
be run efficiently without carrying an excessive amount of stock in transit.

LHBL INVENTORY FACILITIES-

Lafarge Holcim Bangladesh limited keeps stock in its six stops and facility to ensure customer safety,
smooth transportation, and loyalty. They keep the stock moving in this direction to the point where simple
exchange is possible (Kibriea). The item is dispatched to stations as soon as it is completed, as evidenced
by free space in each stop. The size and area of the stops were designed with the interest of the client in
mind, as well as the need for a simple exchange office in that zone. At times of crisis, cement is stored in
the plant's capacity location. Concrete bags are stacked in the distribution centers. The stacking is done
deliberately so that the cement bags can easily be removed as necessary. Old concrete packs are
dispatched first from the distribution center, followed by new concrete packs. Old concrete packs are
dispatched first from the distribution center, after by new bags. There are also dump regions where stocks
are held, in addition to distribution facilities.

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LHBL Stocks shortage
Stock shortages or damage in distribution centers may occur during operations at those high-capacity
locations. During settlement, if stock shortages or damage are discovered in third gathering stations
(distribution center/dump), Depot In-control will issue an authority letter to the stockroom/dump
proprietor for joint compromise. Depot's logistics group will raise the issues with the distribution center
supervisor on the basis of administrative assertion, and stock quality will be subtracted from the builder's
bill if a consensual agreement is reached. If LHBL is in charge of stock shortages or damage for whatever
reason (such as protracted stockpiling and subsequently clearing), then stocks will be changed in
accordance with the organization's DOA. LHBL and the transport constructor will resolve any material
protection claims in accordance with the provisions of the contract.

Cost cutting in Logistics

The mentality of traveling by river is three times less ridiculous than traveling by road. That is why
LHBL transports its two third generation of concrete from plants through canal boat through the
temperament of the waterway (Kibriea). Only the concrete required for the Sylhet warehouse is
transported by truck. It is quite difficult to transfer goods from warehouses to customers via freight boat.
When cement is delivered by organized transport, the cost of the longer course increases while the cost of
the shorter course drops. As a result, LHBL saves money by choosing a shorter organization exchange
course and keeping a strategic distance from longer courses. According to Mr Mehedy Another, way to
cut logistical costs is to work out a deal with the transporters and handlers, which often focuses on saving
money and maximizing capacity. The cost of stock fluctuates from time to time. LHBL is always looking
for ways to cut costs without sacrificing quality or administration.

SHIPPMENT PROCESS OF LHBL

The purpose of this operation is to ensure that supplies are emptied from the plant and that the same
goods is delivered to clients via terminals and stations utilizing effective transportation and warehousing
systems while maintaining standard procedure, comfort, and safety. The Logistics Division reports the
overall method to the Supply Chain Director, who approves it. This is an unbreakable guideline for all
logistics personnel. If any changes are required, the entire office will convene to discuss and resolve the
issues, after which the SCD will be consulted.

Contribution of Technology in Supply Chain

Companies are focusing on supply chain strategies as the next frontier in organizational excellence after
two decades of streamlining internal operations through initiatives such as Just-In-Time and Total Quality
Management, boosting plant productivity, improving product quality, and lowering manufacturing costs.
(HENK A. AKKERMANS). Markets are becoming more transparent, customer demands are becoming
more tailored, and the velocity of change in the business world is increasing in general.
Web-based e-procurement has become an important business platform for improving inter-organizational
process efficiency. Its implementation for purchasing direct materials still necessitates the establishment of
a supply chain collaboration mechanism based on the adopted Internet-based infrastructure. In today's
increasingly competitive economic world, supply chains compete against other supply chains, driving
companies to join forces in a partnership. By delivering the correct product to the right customer in full and
on schedule, collaboration like this fosters efficient consumer reaction. Through Web technologies, the
Internet connects Supply Chain partners, allowing SCM networks to achieve new capabilities such as real-
time information sharing for collaborative planning, forecasting, and replenishment, real-time visibility and
management of SC events, SC integration, and collaborative relationships at all levels of the network.
(Adriana & Cristian, 2010)

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Cement is an important component of the construction, housing, and industrial construction industries.
When it comes to the nation's infrastructure development, cement plays a critical role. This is why the
cement business is always in demand, and the supply of cement will never run out. Every major cement
company gives cement to the construction industry in order to help the country flourish. The financial
benefits connected with cement are tremendous, making it one of the most widely utilized materials on the
planet. Cement businesses have a variety of operations and activities that are quite complex in nature so it
requires the development of a solution to streamline the industry's workflow. (lighthouse)
ERP, which is end-to-end supply chain management software, is well-versed in cement manufacturing
processes and places a strong emphasis on formula version control, accuracy, physical property analysis,
and adherence to all regulatory requirements. It enables producers to maintain the optimal temperature,
pressure, and angle in the cement kiln, as well as forecast the pace of chemical reaction based on raw
material quantities to form molten lava and cement clinkers after cooling. It also controls the addition of
intermediates to control the setting time, permeability, resistance to sulfates and severe environmental
conditions, workability, and higher-quality cement finishes. ERP’s planning and scheduling features ensure
timely procurements and minimize waste.

Web-Based Technologies for Lafarge Holcim:

Lafarge Holcim uses SAP (System Application and Products) at the Company Level. It is a costly system.
All the control is conducted through the third party organization. Most of the third party organizations are
from India. Lafarge Holcim is an International company so they have their own IT team in India. Indian
consultant teams are responsible for any kind of SAP maintenance, addition, changes.
ERP stands for Enterprise Resource Planning. ERP software is business-performance software that
improves efficiency and workflow by streamlining a series of processes in an industry. Continuous heating
and melting of limestone, clay, and sand at temperatures up to 1450 degrees Celsius is necessary in the
cement industry. Because the cement sector employs a large number of people, ERP software can help to
improve operations. Through a highly tailored approach in Security Gate, Weighbridge, Quality Control,
Yard Management, Freight Management, and Quality connected Purchase Bill Passing, ERP software
offers full control and error-free and quick operations. For legislative compliances and MIS, ERP accurately
provides Division-by-Division Inventory, Operations, Sales, Profit & Loss, and Balance Sheet. (lighthouse)

Complete financial management

✓ Manage division-specific and consolidated finance records, as well as costing/efficiency, ledgers, and
profitability. Real-time sales and purchase between divisions.
✓ Subcontracting, manufacturing, and other expense analyses
✓ Accounts approval and bill passing for Purchase, Services or Freight scenarios
✓ Material costs, overhead expenses, and process costs; thorough product costing and variation analysis
are used to keep product costs under control.

Supply Chain Efficiency

✓ At the Security Gate, Weighbridge, Quality Lab, and store/yard sites, all inbound and outbound
movement is tracked.
✓ Plant movement: Inward, Outward, Stores-Related, Purchase or Sales Return, Rake Inward, Inter-Yard
Transfers, Waste or Scrap Movement, and so on.
✓ Carry out batch wise semi-finished and WIP pricing while manufacturing
✓ From the receipt of raw materials to the finished product, traceability is essential.

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Effective Production Planning & Control
✓ Sophisticated and Accurate MIS on Production Costing / Plant Performance
✓ Production planning: Item BOM, Material Requirement Plan, Monthly Production Schedule, process
parameters like temperature, pressure etc.
✓ Production by shift, with batch, lot, and godown control
✓ Calculations of standard to actual yields to manage variance analysis
✓ Quality Control: Accurate Management Information on Production Costing and Plant Performance

Dispatch & Sales

✓ Enquiry & Quotation followed by three level order cycle Sales Contract, Sales Order and Delivery
Orders.
✓ Delivery orders can be placed based on the advance payment received and the specifics of the product
to be delivered (with Grade wise, Size wise product details)
✓ By integrating to weigh slips and Delivery Orders, sales e-invoicing is generated instantaneously.
✓ Cash discounts, quantity discounts, fixed-term sales contracts, credit control, and other flexible
pricing options. (lighthouse)
The distributor of Lafarge Holcim uses tally, which is a statistical tool. Tally is used for the retail account
maintenance such as the amount of sale, quantity of sale, delivery of cement or the number of dispatched
cement bags. Some of the distributors use excel for account management. Some Distributors use their
own management software developed by local freelancers. The whole system is integrated and the
information flows in real time.
LafergeHolcim has different sources and factory to deliver their product. They have fully automated
system. The Sales Order (SO) can be recorded through SAP, mobile device as well as PC. The distributor
does not have the access to the SAP. To allow the access to the distributor, Lafarge Holcim has in-house
app name Customer Portal. Login with valid ID and Password from the customer point allows knowing
the SO price, transportation price and the final price. The deposited amount from the distributor to the
company can be instantly done through the system and this system is only own by the Lafarge Holcim in
Bangladesh. Only Lafarge Holcim in Bangladesh has the collection automation in the SAP. This is vital
for the organization to make a smooth transition of the order flow and inventory management. This allows
the company to have the exact information instantly and reduce the mismatch. The system mismatch and
error are less frequent.

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Conclusion
The cement industry's forecast for the futures remains positive, with predicted demand growth driven
mostly by mega projects and the residential sector. Construction of industrial facilities and increased
activity in economic zones are both on the rise. Additionally, the increase is being accelerated.
Simultaneously, huge infrastructure initiatives are underway. Rapid urbanization has resulted in an increase
in the number of people living in cities. industrialization, large-scale infrastructure, and government
development initiatives are all examples of this. Demand for cement is increasing as a result of the
development of various commercial and residential buildings. has risen dramatically over the years, and
this trend is projected to continue in the future. Though there will be high demand but there can also be
uncertainties because profit margins have reduced as the cost of raw materials and fuel has risen. price, the
geopolitics of south east Asia may change in the near future and also climate change can affect the
transportation via waterways inside the country. But there is still hope because the cement sector in the
country has a lot of potential.

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References
A member of Holcim Group. (2022, 4 23). Management Team. Retrieved from https://www.Lafarge
Holcim.com.bd/management-team
Cement Solutions. (n.d.). Retrieved from Larfage Holcim: https://www.Lafarge Holcim.com.bd/cement-
solutions
Chopra, S., & Meindl, P. (2020). Supply Chain Management. USA: PEARSON.
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Marinko, J. (2016). The Role of Human Factors in Supply Chain. Faculty of Transport and Traffic
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Werner Reinartz, M. (2004, 08). The Customer Relationship Management. Journal of Marketing
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Kibriea, M. G. (n.d.). Supply chain management of Lafarge Holcim Bangladesh Ltd. Brac University.
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