During production, manufacturing industries have to go through below steps with given

necessary components:

STEPS Necessary Components

Water
Skilled labor
Casting & Coal/Oil
Molding

Electricity
Water
Semi skilled labor
Machining

Electricity
Skilled and semi skilled labor
Joining (Welding,
Soldering)

Electricity
Skilled and semi skilledlabor

Shearing

Casting and molding is the first step of production where parts of automobiles and electronics are
given its rough shape with proper dimensions. Machining is the part where rough product of
molding is given its proper shape through machine works. Then the proper shaped parts go into
joining. In parts joining or assembling welding and soldering is necessary as per products
standard. Later comes the shearing part where compression or other modifications are done after
assembling as per product requirements.

To summarize, In basic production procedure of every automobile and electronics industries

main key components are electricity, skilled & semi skilled labor, water, coal, oil.
As per strength of Bangladesh Labor cost here is lower compared to other competitor countries
and China. It is shown in below chart:

Average minimum labor cost per day in usd

12.56
10.56

7.6
4.82

5.1
4.7

B an gl ad esh India Th ai l an d Vi et n am Mex i c o China

Source: Blacksmith International

After analyzing the labor cost graph we see labor cost in Bangladesh is lowest compared to other
countries and even one third of China. It is a big prospect as Automobile and electronics
industries need a lot of human resource as key component in every basic steps of production
procedure.

Again electricity cost is lower in Bangladesh compared to other competitor countries and China.
Electricity cost comparison is as below:
 Electricity prices for households, september
2019 (Usd per kwh)

0.12
0.08

0.08

0.08
0.07
0.06

B an gl ad esh India Th ai l an d Vi et n am Mex i c o China

source:
globalpetrolprices.com

electricity prices for industries, september

2019 (usd per kwh)
0.15
0.12
0.1

0.09
0.08

0.08

B an gl ad esh India Th ai l an d Vi et n am Mex i c o China

source:globalpetrolprices.com

After analyzing electricity pricing graph we see electricity price for households is lower in
Bangladesh compared to other competitor countries. But when it comes the priocong abput
industries, the price is a little bit more compared to India, Vietnam and China. So to encourage
foreign investments in automobile and electronics sector, industrial electricity cost must be
deducted. Many power plant projects inside Bangladesh like Matarbari Project, Ruppur Nuclear
Plant etc. need to be paced up. If these projects are done within time, industrial electricity price
will decrease in Bangladesh.

Now lets compare the water price:

Industrial water price by citi es and

countries (usd per cubic metre)
1.35

0.97
0.92

0.84

0.52

0.52

0.46
0.34
0.33

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hi
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ra
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at
) ) d
am g) i)
es an n n a
ad el as
t
u
jr th il
a
tn ij
i gh
gl (D ar
s a ie e an
ia (
G aj Th V B
an ah (R a( Sh
B d ia in a(
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M d ia h n
ia In d C hi
d In C
In

Sources :
1. dhakatribune.com
2. timesofindia.com
3. ceicadata.com
4. tarrif.ib-net
5. en.pwa.co.th

Though water cost varies from city to city, after a whole analysis, t5he result shows water cost is
lowest in Bangladesh compared to its competitor. But according to a report of Dhaka tribune
August 2019, it was proposed to increase the industrial water price from 0.33 to 0.52. It should
not let to be imposed. To attract foreign investment in automobile sector, water pricing is a key
component and as the price is lower we need to keep it that and marketing outside about this low
cost prospect of water.

Then comes another component coal. According to worldometers info 2016, Bangladesh imports
149% of coal which is 3128923 tons. To import this much of coal we mostly need to increase our
port efficiency. As well as we should be attentive to reserve those to deduct cost and that’s why
we need to increase warehouse numbers for industries. Recently, a big coal mine discovered in
Dinajpur. We need to explore for more coal mines to decrease import dependency and marketing
more about resources that we have. For oil, we must increase our oil reserve capabilities. Port
efficiency must be increased so that VLCC ULCC type Crude Carrier can enter our port. We
need to ensure Oil tankers with large capabilities can enter as much as possible to our ports and
can be docked there as many days as necessary. So we also need to increase docking facilities of
ports.

After manufacturing product, supply to customer part comes. In this step Automobiles and
electronics, industries follow 3 types of strategies: 1.MTS 2.MTO 3.MTA
M a n u fa cte rin g S u p p ly

Make to Stock
S tra te g y

Make to Order

Make to Assemble

Diagram: Manufacturing industry strategy.

Make to order (MTO), or made to order, is a business production strategy that typically allows
consumers to purchase products that are customized to their specifications. It is a manufacturing
process in which the production of an item begins only after a confirmed customer order is
received.
In MTS (Make to Stock), products are manufactured based on demand forecasts. Since accuracy
of the forecasts will prevent excess inventory and opportunity loss due to stock out, the issue
here is how to forecast demands accurately.
High-tech makers of industrial machinery typically are ‘Made-To-Order’ processes wherein the
machines are either manufactured or assembled against a firm order and the customer who gives
the order is willing to wait for his delivery. At the other extreme, commodity goods suppliers
generally are “Make-to-Stock” & maintain inventories at multiple echelons in their network, to
ensure they are ready to serve demand from their consumers.

Unfortunately, most industrials and manufacturing based organizations tend to be a mix of MTO
and MTS products. They constantly grapple with the problem of deciding which items to service
from stock and which products to offer but produce only against orders. And this combination of
MTO and MTS is known as Make to Assemble (MTA)

For both MTO and MTS strategy, raw materials of the industries have to be available within due
time. Again they need much more inventory to store raw materials and final product for
necessary time. Last but not the least they must ensure that the delivery time to customer is 100%
right. So to get raw materials in time and sending right product to customer in right time ports
need to be more efficient. And to reserve raw materials and final products more warehouse need
to be setup in an efficient manner.

Then comes the steel industries.

Final product of these steel industries are raw materials of automobile industries. And main raw
materials of steel industry is ship scrapping. So we need to increase our port efficiency so that
many dead and big ships can enter through our ports and get as much raw materials for steel
industries as possible. Thus raw materials of Automobile and Electronics industries will be more
available at nearby place in a low cost.