Value Chain of AST Beverage

Gross Profit Distribution, Dealers & Retailers Warehouse, Inventory Human Resource
1.5%

30%

1%

0.5%

Accounts & Finance Advertisement Sales & Marketing Production Process

3%

5%

1%

R & D, Quality control (QC) Main Raw Materials

58%

Percentage of the total cost required for each division of the value chain Financial year of 2009-2010.

Caffeine & Sugar, Food Grade Color & Flavors (imported)

4. Introducing e-commerce. Online working process within all the divisions of the company. Introducing ERP (Enterprise Resource Planning) software.

Online process will reduce the intermediate order processing Time & Middleman within the divisions. This will increase the efficiency and leads to higher productivity which will ultimately reflect revenue.

Cost Analysis

The total cost of proposed re-engineering is approximately BDT 21.5 crores Sugar refinery Water recycling plant Solar panels installation Digitalization BDT 15.5 crores (only machineries) BDT 2.0 crores BDT 3.5 crores BDT 0.5 crores

TOTAL COST(approx.)

BDT 21.5 crores

Source: Planning & Procurement Director Globe Pharmaceutical Ltd.

Finance
Globes self Finance Investment loans from Financial institutions such as banks, leasing companies. Investment will reach breakeven within 7yrs (approx.)

What I learnt

1. Corporate culture 2. Inventory Management 3. Troubleshooting Management 4. Production Planning 5. New technique of moisture control system 6. Energy saving 7. R & D working procedure 8. Finance & Budgeting

Thank You

Research & Development (R & D)

R & D designed a system to use exhaust gas generator to increase pressure for fractional distillation system. Exhausted gases are condensed using condenser to supply water at 22o C to the Chillers. Replace all fluorescent lights by energy saving lights. To absorb moisture naturally, plants/trees are planted in inside the factory building in some areas where there are transparent roof tops, so that sunlight can enter.

Value chain after Re-Engineering

Gross Profit Distribution, Dealers & Retailers

0.5%

42% 1%

Warehouse, Inventory Human Resource Accounts & Finance Advertisement Sales & Marketing Production Process
3% 5% 1.5%

1%

R & D, Quality control (QC) Main Raw Materials Caffeine & Food Grade Color & Flavors (imported) [SUGAR]

46%

Before re-engineering, total raw material cost for the production was 58% and gross profit was 30%. After re-engineering, new raw material cost is reduced by 12% and now it is 46%. Gross profit increased to 42%