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Supplier Selection and Relation of aarong

0.1 Introduction

To provide a stable and gainful source of employment for the under privileged rural artisans, lift up the traditional identity and the commitment of quality service. On the basis of these principal Aarong started its journey in Bangladesh. Aarong is an organization that is dedicated to change the lives of disadvantages, promoting traditional products from Bangladesh and opening the doors so their products can be exported. The designer and the creators of the product range offered by Aarong, have not only established the organization as leaders in deshi handicraft, but have also reignited interest and popularity for styles and traditional crafts that are native to the country. It is the gracious blend of contemporary and customary that ensures that each product is original and saleable in modern society. Today, few urban consumers will argue that Aarong is the local Mecca for deshi handicraft. The name of the organization Aarong is a Bangla word. It means a village fair or market. The village fair provides craftsmen of all trades a marketplace to display and sell their traditional handicrafts. The naming of Aarong as such upholds the organizations commitment to promote the indigenous goods of our country, which are a part of our rich cultural and artistic heritage. It is the handicraft marketing arm of BRAC (Bangladesh Rural Advancement committee), the largest NGO in Bangladesh. Aarong has created a village fair for the craftsmen of all trades come together to exhibit and sale their traditional handicrafts. It helps vitalize the traditional craftsmanship and find a wider market for their products nationally and internationally. Established in 1978, Aarong is a fair trade organization dedicated to bring about positive changes in the lives of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and craft. Reaching out to weavers, potters, brass workers, jewelers, jute workers, basket weavers, wood carvers, leather workers and more, Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom are women. Today, Aarong has become the foundation upon which independent cooperative groups and family-based artisans market their craft, in an effort to position the nations handicraft industry on a world platform of appreciation and acknowledgement.

0.1.1 Objective of the study

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The core objective of this report is to illustrate the present practice of the supplier selection in Aarong & AAF. But the specific objective of this report is: a) To have a clear view about what is actually happening in the Aarong; b) To collect information and insight about the supplier selection method of the organization. c) Full information about their suppliers; d) To relate the theoretical knowledge with the practices. e) Their traditional factors of quality, delivery, cost and services.

0.2 Background of the Organization


Aarong began as a cause a means to an end for a quiet organization fighting to uphold the dignity of the marginalized. In 1976, when BRAC- a Bangladeshi NGO dedicated to alleviating poverty and empowering the poor, first began encouraging sericulture for women in Manikganj, their only buyers were a few scattered retailers in Dhaka. Weeks, even months would pass between supply and payment, until BRAC intervened. Aarong was born out of a need to ensure that the penniless silk farmers of Manikganj were paid for their goods upon delivery, so that they could feed their families. Today, Aarong's reach has spread beyond Manikganj to the rest of the country. It has grown into a thriving international enterprise showcasing ethnic wear to beautiful crafts from silks, handloom cotton, endi to terracotta, bamboo, jute and much more. From a single shop, Aarong has grown into one of Bangladesh's biggest retail chains, with eight stores spread across the major metropolitan areas of the country - in Dhaka, Chittagong, Khulna and Sylhet and one in London, UK.

0.2.1 History

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1978
-Aarong opened its first retail outlet in Dhaka.

1982 1983
-Opened its first retail outlet in Chittagong.

-Established the Ayesha Abed Foundation, a network of production centers aimed at supporting rural artisans.

1985
-Opened its first retail outlet in Sylhet.

1987
-Entered into the export market.

1995
-Opened its first retail outlet in Khulna.

1999
-Participated in its first international fashion show.

2001
-Launched a retail franchise in London.

2003 2008
-Celebrated Aarong's 30th Anniversary with an Exhibition Series and gala Fashion Show.

-Launched its sub-brand 'Taaga', range of women's western wear fused with traditional elements of Bangladesh.

2010
-Opened its flagship outlet in Dhaka.

2011
-They opened the biggest showrooms at Uttara in Bangladesh (25th march, 2011).

0.2.2 Logo
The logo of Aarong is an image of peacock. It is spectacularly beautiful because of the brilliant, iridescent,

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diversified colorful pattern in its tail. The color of the peacock in the logo is orange because it represents energy. By this logo Aarong communicates that its products are as stunning and as unique as a peacock. Moreover it wants to emphasize its natural, eco-friendly products through the emblem.

0.2.3 Aarongs Mission Statement


To make Aarong the best in the world in providing a unique Bangladeshi lifestyle experience to empower people and promote Bangladesh while protecting our environment.

0.2.4 Vision of the organization


Aarong has a vision to establish them as worlds one of the famous fair trade fashion house, and to remain market leader throughout its business. Aarong expanded its business in international area. Aarong has a dream to develop more artisans of Bangladesh and make them self-dependent and attract more and more international customers towards Bangladeshi culture.

0.2.5 Purpose of aarong


Aarong is a fair trade organization dedicated to bringing about positive changes in the lives of disadvantaged artisans and underprivileged rural women by reviving and promoting their skills and crafts. Among the artisans Aarong reaches out to be weavers, potters, brass workers, jewelers, jute workers, basket weavers, wood carvers, leather workers and more.

0.2.6 Goals of Aarong


Aarong's goals include:

Empowering destitute rural women by providing opportunities for employment and income generation; Ensuring the commercial success of the enterprise of women producers; Reviving the traditional skills of rural artisans.
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0.2.7 Achievements
From its inception as a small initiative protecting livelihoods in one rural community, Aarong has transformed into Bangladesh's biggest retail chain, with 10 stores spread across the major metropolitan cities - Dhaka, Chittagong, Sylhet and Khulna.

While Aarong's trendsetting designs and attention to quality continues to win the loyalty of millions of satisfied customers each year - it has experienced unprecedented sales growth, averaging 20% per year over the last eight years - its greatest achievement has been the transformation in the lives of the hundreds of thousands of poor artisans and their families it supports. In addition, as the most successful social enterprise of development organization BRAC, one of the world's largest development organizations, Aarong has contributed more than one billion TK to BRAC's various poverty alleviation initiatives since 1984. It was Aarong that institutionalized large-scale female participation in the Bangladeshi retail industry - sales as a career choice for women was popularized by the female Aarong store sales associates. Aarong's contribution to Bangladeshi craft heritage goes beyond its retail functions. It is a proactive protector and promoter of traditional craft and designs, housing an extensive design and craft library that preserves age old patterns and motifs. It single-handedly revived the traditional art of Nakshi Kantha by establishing it as a sustainable livelihood for rural women and also brought back many traditional Jamdani patterns. Aarong's consumption sustains numerous artisan communities in Bangladesh - 75% of cotton produced in Madhabdi, the core cotton production area, and over 70% of silk produced in Maldaha, is consumed by Aarong. In 2009, Aarong received the 'Best Brand Award' in the boutique category and 'Most Effective Outdoor Communication Award' from Brand Forum, one of the countries leading authorities on branding and communication. A number of Aarong products have also received the UNESCO Seal of Excellence for Handicrafts.

0.2.8 Services
Free Medical check-up including free eye treatment, eye-glasses and treatment costs for severe illnesses; Advance wage payments for employees in need; Day care services; Workers retirement fund. Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong. Potters, Brass Workers, Jewelers, Jute workers, Basket Weavers, Handloom Weavers, Silk Weavers, Wood Carvers, Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services.

0.2.9 Ayesha Abed Foundation- AAF (Aarong production Centre)


The Ayesha Abed Foundation (AAF) is an organization that aims to provide avenues for employment and income generation for underprivileged rural women. The Foundation provides an appropriate working environment, financial and technical assistance, and training to develop the womens skills in various crafts. The Foundation was established to commemorate the

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memory and work of late Mrs. Ayesha Abed, a co-worker and wife of the Founder and Chairperson of BRAC. The work that is done in the Foundation is a testament to her commitment to the issues of education, training and employment opportunities for disadvantaged women. It was she who in 1976 initiated all the present major activities of AAF in Manikgonj. The AAF aims to work with the most underprivileged women in the society. These women are often the most neglected and are in need of much assistance and support. The AAF plays the role of a facilitator. To support these women Aarong has created 13 production centers in Baniachong, Gorpara, Jamalpur, Jessore, Kushtia, Manikganj, Rajbari, Sherpur, and Pabna, Pollobi, Kurigram, Nilphamary, Jhenaidah and 653 sub Centre spread across in 2000 villages of Bangladesh. Today More than 40000 women work directly for Aarong in its production centers. The women are placed in an enabling environment, with other women of similar socio-economic backgrounds. They are trained and then given the opportunity to generate income. This is where the AAF steps in, helping such marginalized women out of their peripheral existence in society, and giving them the opportunity to become involved in sustainable enterprise. The AAF is closely interrelated with other programs, especially BRAC Development Program (BDP) and Aarong. The women workers of the AAF come from the BDP organized Village Organizations. Working at the AAF thus gives the women access to other BRAC programs. All of the AAFs finished products are sold through Aarong, which additionally provides designs, raw materials and financial support to the AAF. Since AAF supplies exclusively to Aarong, it is treated as Aarong Production Centers.

0.2.10 Organizations Profile


Organization Name Country/ Territory Aarong Bangladesh (London)

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Organizations Head Quarter Aarong Centre (Head Office) 346, Tejgaon I/A, Dhaka-1208 Tel: +880 2 8832139 Fax: +880 2 9898267 Email: export.aarong@brac.net Year of establishment Business line 1978 A fair trade organization Produce traditional Bangladeshi products. Number of artisans Over 65,000 (85% women)

A fashion show for celebrating 30 years of Aarong

0.3 BRAC & Aarong


The Aarong export and marketing project was jointly organized by MCC and BRAC in 1978. It is now directly handled by BRAC. The Bangladesh Rural Advancement Committee is managed entirely by Bangladeshis. It is the largest non-governmental development organization

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in the country. BRAC has initiated education projects in one fifth of the countrys 80,000 villages, and in 2001, they started a university. It is also responsible for thousands of health programs, numerous agriculture and food production businesses, and micro-credit initiatives. Aarong works to empower the poor and strengthen traditional craftsmanship. The organization involves over 30,000 artisans, (85% of whom are women), employed through small community groups. They produce an impressive range of products: terra cotta; silk and cotton textiles; clothes; leather work; brass; wood; candles; basketry, and jewellery. Aarong operates eight retail stores in Bangladesh, which sell about 80% of the crafted items; the remainders of products are exported. The women Aarong employs are among the countries most disadvantaged. Through Aarong they have been offered a way out of destitution and degradation where before they had none. And the benefits that they receive extend well beyond simply the wages they earn for their products, since every single woman who works in Aarong-owned production facilities is also a beneficiary of BRAC's multifaceted development programs. As a support entity of BRAC, a significant portion of Aarongs earnings go directly into financing the NGOs development programs in healthcare, education as well as economic and social development.

0.3.1 A fair trade organization


Aarong symbolizes fairness in the global village. The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas:

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lack of working capital, marketing support and opportunity for skills development. In order to bridge these gaps, Aarong provides a wide range of services to its workers and suppliers:

Spot payment on product delivery to encourage efficiency and productivity; Reach out to producers in remote areas to ensure fair value for their efforts; Marketing communication and information for artisans; Advances against purchase orders where necessary; Training & Education in skills development to raise product quality and marketability; Product Design and Support in Product Development; Quality Control to increase producer awareness of the importance of quality.

A fair showroom for Aarong

These values reflect fair trade principles which have been developed by registered Fair Trade Organizations. Fair Trade is a trading partnership, based on dialogue, transparency and respect that seek greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers especially in the South (IFAT).

0.3.2 Products and services of Aarong


Holding the steadfast to its original Mission, Aarong today supports the lives and livelihoods of thousands of rural artisans and handicraft producers. These producers and artisans create wide range of products for the different types of consumers in home and abroad. The

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products are unique and traditional and appealing to the modern consumers, staring from clothes, accessories to home wares. Aarong designs and creates clothes for women, men and children. There are designers and more than 3000 weavers across the country are involved with the production of Aarong clothing lines. And for the fashionable accessories there is one special department called jewelry department where jeweler creates elegant jewelries that are contemporary yet traditional using gold, silver and jewels like pearl, emerald and diamonds. The other accessories like bag, sandals and produced in AAF centers using leather, jute, bamboo etc. In home ware and decorative Aarong produces pottery vases and sculpture of wood, bamboo, brass and clay etc. For exporting the products Aarong has a separate department in head office and very selective artisans work here to produce fine quality products and these are sent to the production centers as sample of the exporting products. Here is the list of some products Aarong produces:

Clothes & Accessories:


MENS PRODUCTS 1. Traditional 2. Executive Shirts 3. Maanja 4. Fotua 5. Short Kurta 6. Tshirts 7. Stoles/Shawls 8. Sandals

WOMEN'S PRODUCTS 1. Traditional 2. Western 3. Nightwear 4. Shawls/Scarves 5. Shoes 6. Bags 7. Fabrics CHILDREN'S PRODUCTS 1. Clothes 2. Toys 3. Books
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4. Shoes

Jewelry Products 1. Gold 2. Silver 3. Pearl 4. Other

LEATHER PRODUCTS 1. Shoes 2. Bags/Wallets 3. Belts 4. Boxes 5. Photo Frames

NAKSHI KANTHA PRODUCTS 1. Decorative 2. Wall hangings 3. Christmas decorations

Along with the clothes, accessories and home ware Aarong also produces food products like milk, flavored milk (mango & chocolate) juices (mango & tamarind), yogurt drinks (orange, strawberry), curd (sweet & sour), butter and honey. And herbal skincare products like soaps, shampoo, oil and face pack etc.

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Home Wares & Furniture: 1. Curtain 2. Bed cover & cushions 3. Rugs 4. Table Lamps 5. Photo 6. Coasters

Frames 7. Napkin Rings

8. Mats 9. Trays 10. Cutlery 11. Bowls and Platters 12. Photo Frames 13. Bookends 14. Boxes 15. Hammocks 16. Plant 17. Candles

Accessories

0.3.3 Aarong Retail Outlets


Aarong sales its products through its own outlets, Aarong follow zero distribution channel. Around the country Aarong has ten outlets six outlets in Dhaka in six major parts (Dhanmondi, Gulshan, Uttara, Maghbazar, Wari and Mirpur) and outside Dhaka Aarong has two outlets in Chittagong, one in Sylhet and one in Khulna. And outside Bangladesh Aarong has one shop in London, United Kingdom. Aarong Centre (Head Office) 346, Tejgaon I/A, Dhaka-1208 Tel: +880 2 8832139 Fax: +880 2 9898267 Email: export.aarong@brac.net
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Aarong at Gulshan Dhaka 1208 Tel: 8821052, 8825986 Operating Hours: 10:00am 8:00pm Open 7 days a week Aarong at Maghbazar Aarong Plaza 61, Shahid Shangbadik Selina Parveen Sharak Maghbazar Dhaka 1217 Tel: 9334766, 9360260 Operating Hours: 10:00am 8:00pm Open 7 days a week Aarong at Dhanmondi Aarong Dhanmondi 1/1, Block-A, Lalmatia Manik Miah Avenue Mirpur Road Dhaka-1207 Tel: +88-02-8111607 Fax: +880 2 8828576 Email: export.aarong@brac.net Operating Hours: 10:00am 8:00pm Open 7 days a week Aarong at Uttara Aarong Uttara Jasim Uddin, Sector 4 Uttara Model Town Dhaka 1230 Tel: 8916097, 8914125 ext. 501 Operating Hours: 10:00am 8:00pm Open 7 days a week

Gulshan Tejgaon Link Road

Aarong at Wari 36/1 Rankin Street (1st Floor) Wari Dhaka 1203 Tel: 7114244

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Operating Hours: 10:00am 8:00pm Open 7 days a week Aarong in Halishahar, Chittagong House: 1, Lane: 1, Block: L Halishahar Chittagong Tel: 031-2515644-45 Operating Hours: 10:00am 8:00pm Open 7 days a week Aarong in Sylhet 413 Naya Sharak Sylhet Tel: 6017, 0821-815988, 0821-713150 Operating Hours: 10:00am 8:00pm Open 7 days a week Aarong in Nasirabad, Chittagong Golden Plaza (1st Floor) 1692 CDA Avenue Chittagong Tel: 031-654030, 06074485325 Operating Hours: 10:00am 8:00pm Open 7 days a week Aarong in Khulna Plot A43-A44 Majeed Sharani Avenue Shib Bari Khulna Tel: 6016, 041-730547

in London

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Aarong

Aarong sell an assortment of own brand formal and casual wear for both men and women in London. Although Aarong sell its own products but the show room which in London is little bit different from our local shop. Because, the demand of the customers of London. 69 Vallance Rd London, E1 5BS, United Kingdom +44 20 72477727

0.3.4 Promotion
As it is in other avenues, Aarong is a trendsetter in promotional activities as well. Having been one of the first Bangladeshi brands to use professional models and create sophisticated ad campaigns, Aarong continues to set the style and quality standard for promotion by achieving

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greater levels of class and elegance with each campaign. Aarong also selects its promotional mediums carefully to ensure accurate reflection of the brand's values. Aarong's promotional events - such as its carefully orchestrated fashion shows, unique and detailed exhibitions and highly popular sales events have become a significant part of popular culture in urban Bangladesh. Aarong also focuses on in-store promotional activities such as its 'My Aarong Rewards' programmed to enhance customer experience.

0.3.5 Export: Terms and Conditions Beneficiary:


BRAC 66 Mohakhali C/A, Dhaka 1212 Bangladesh Tel: 880-2-9885424, 880-2-8824180 Fax: 880-2-8828576, 880-2-8823614

Payment to:
L/C at sight or 50% Advance* with order & 50% before shipment by T.T. to BRAC Bank Limited 1, Gulshan Avenue, Gulshan-1, Dhaka-1212, Bangladesh Tel: 880-2-8824501; Fax: 880-2-8813543 Account # 150180010606 Account Name: BRAC - Aarong

Delivery:
Between 60 to 120 days, depending on volume of order, on receipt of L/C.

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Port of Dispatch:
By Air: Zia International Airport, Dhaka. By Sea: ICD Dhaka for Full Container Load (FCL); Chittagong for Loose Container Load (LCL).

Packing:
Fragile items are packed individually in 3 ply carton boxes and master packing in 5 or 7 ply carton boxes. Other non-breakable items are packed individually in a ploy bag and master packing in 5 ply carton boxes (20/25 kgs. in a box.).

Freight and Insurance:


Freight and Insurance to be covered by the importer which varies from port to port. *Advance: If 50% is paid in advance against the ordered value, then the documents will be sent to the importers directly. Otherwise the documents will be sent to the bank for collection against Bill of Exchange.

0.3.6 Market
A pioneer in the country's craft industry, Aarong's unique product designs have brought consumer attention back to crafts and materials indigenous to Bangladesh, as its designers blend the traditional with the contemporary in a way that continues to win consumer appeal. Its success revolutionized trends and virtually created the market that has now been taken up by countless

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other boutiques and brands. Aarong caters to this growing urban consumer base through outlets in every major city in the country. Their discerning style and high-quality craftsmanship make every Aarong product unique and demand for them has been consistently rising due to Aarong's focus on innovation, quality, value-based pricing and superior in-store customer service. All these elements, backed by a robust distribution network and strong supply chain, have made Aarong a true household brand in Bangladesh. Just as Bangladeshis living abroad look to Aarong for products that connect them to their heritage, the Aarong experience is an essential part of any trip to Bangladesh by foreign visitors a phenomenon chronicled in the "Lonely Planet" guide to Bangladesh. Aarong products are not only the gift items of choice for every occasion for local and expatriate Bangladeshis but also the quintessential cultural mementos for these visitors. Aarong's growing presence outside Bangladesh - through fair-trade networks in Europe as well as a retail franchise in London - continues to broaden the market for Bangladeshi craft globally.

0.3.7 Producers or suppliers


Aarong embraces and nurtures a diverse representation of 65,000 artisans, 85% of whom are women. More than forty thousand of these women work directly for Aarong in its 13 production centres (Foundations) in Baniachong, Gorpara, Jamalpur, Jessore, Kushtia, Manikganj, Rajbari, Sherpur, and Pabna, Pollobi, Kurigram, Nilphamary, Jhenaidah including 653 sub-centers spread across Bangladesh. Twenty-five thousand independent co-operative groups and traditional family-based artisans also market their crafts through Aarong. Potters, brass workers, jewelers, jute workers, basket weavers, handloom weavers, silk weavers, wood carvers, leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services. The leather workers are various artisans with specialized skills from all over the country.

0.3.8 Brand value


Aarong stands for a unique mix of design, quality and convenience, of the traditional and the contemporary. Aarong is one of a kind globally positioned as a highly successful Bangladeshi craft based retail chain and brand of pride. It also carries the distinction of being BRAC's most successful social enterprise. Aarong's responsibility is therefore two fold delivering unique products with the highest level of quality and service to its customers and the

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strongest level of support and protection of artisans and their craft. To its consumers, Aarong is a household name - a one-stop shop and a trusted brand that inspires pride, promises quality and sophistication, and helps to keep cultural roots alive in everyday life. For the artisans, Aarong represents the endurance of both their age-old art as well as their livelihoods. For consumers and artisans alike, Aarong has become a part of the cultural fabric of their lives.

Those things we didn't know1. In Bengali, 'Aarong' means 'village fair' and 'Taaga' means 'thread' 2. Half of the profit from every purchase you make at Aarong goes towards supporting schools, health services and specific interventions targeted to the ultra poor segment by BRAC. 3. 3 people enter an Aarong outlet every second 4. The amount of fabric consumed by Aarong in a year can wrap around Bangladesh 8 times.

0.3.9 Aarongs Production Centers


1. At Aarong has 8 domestic outlets (5 in Dhaka, 1 in Chittagong, 1 in Sylhet and 1 in Khulna), 1 franchise in London) 2. Aarong has 13 center and (Baniachong, Gorpara, Jamalpur, Jessore, Kushtia, Manikganj, Rajbari, Sherpur, Pabna, Pollobi, Kurigram, Nilphamary, and Jhenaidah) 3. 653 sub-centers spread across Bangladesh. 4. As well as considerable export operation in many European, North American and Asian countries.

Karim Mia is a bamboo tray and basket producer of Aarong. Due to extreme poverty at home, Karim Mia stopped his schooling when he

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0.3.10 Artisans: Karim Mia's Story

was in class 3 and began assisting his father in bamboo crafts weaving. Struck by the untimely death of his father, Karim Mia at the age of 16 had to find an immediate source of income to run his family of five brothers, five sisters and his mother. Initially, Karim Mia commuted from his home district, Tangail (approx. 120 km away from Dhaka city) to sell bamboo products at small crafts shops in Dhaka. At that time, with his meager monthly income of almost $25, he could barely support his family. After struggling for almost three years, Karim Mia came to Aarong in 1988 to show some of his samples. His self-designed samples were immediately chosen and an order was placed for 60 pieces. Since then, Karim Mia has received constant orders from Aarong for its local as well as export market. As part of its mission to assist producers in product development and technical training, Aarong sponsored Karim Mia to attend a bamboo crafts workshop in New Delhi in 2003. The one-week training has helped him to gain better knowledge about bamboo craft. His workmanship has also shown remarkable improvement in quality. Today, Karim Mia supplies exclusively to Aarong and has a steady monthly income of $100-130. On an average, he has ten workers working under him. During the busy season he employs more than fifty workers. Karim Mia is now married with two sons and a daughter all of whom attend school. He hopes that his children will be able to complete their education, which he could not because of financial need. About two years ago, Karim Mia bought 20 decimal lands in Tangail, where he constructed his tin-shed home. Very recently, he has built an extension room that is being used as working space and storage for the bamboo products. Karim Mia feels that Aarongs support during his needy times, the continued assistance in product development and design and a steady flow of orders has helped him carve out a dignified existence for himself and his family.

0.3.11 Others Artisans


Holding steadfast to its original mission, Aarong today supports the lives and livelihoods of nearly sixty five thousand rural artisans and handicraft producers, 85% of who are women. More than forty thousand of these women work directly for Aarong in its 13 production centers in Baniachong, Gorpara, Jamalpur, Jessore, Kushtia, Manikganj, Rajbari, Sherpur, and Pabna, Pollobi, Kurigram, Nilphamary, Jhenaidah and 653 subcentres spread across Bangladesh.

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Twenty five thousand independent cooperative groups and traditional family-based artisans also market their crafts through Aarong. Potters, Brass Workers, Jewellers, Jute workers, Basket Weavers, Handloom Weavers, Silk Weavers, Wood Carvers, Leather workers and various artisans with specialized skills from all over the country come to Aarong for marketing and support services.

0.4

Make or buy of aarong


Traditionally Aarong prefers the make option tended to be favored by ownership of a large range of manufacturing and subassembly facilities. They were largely depends on raw materials, which were processed in house. Specially, buy cant give full perfection. Thats why Aarong prefer make option. Reason for Make Instead of Buy: There are many special reasons in Aarong to prefer make option instead of buy. These include:
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The quantities are too small. Quality requirements may be so exacting or so unusual as to require special processing methods that suppliers cant be expected to provide. Closer coordination of supply with the demand. To preserve technological secrets.

To obtain a lower cost. To advantage of or avoid idle equipment or labor. To avoid sole source dependency. The management of Aarong appears to take pride in size.

Dangers Involved in Decision to Manufacture: To manufacture the various types of product of Aarong dangers involve in decision include: They may have lack administrative or technical experience in the production. The challenges of maintaining ling term technological and economic viability for a noncore activity. Difficult to determine the costs of the make decision. A lack of flexibility in selecting possible sources and substitute items is likely to result.

0.4.1 Sub contraction


The use of subcontract is perfect when placing orders for work which is difficult to define, take a long time and extremely costly. Managing the subcontract is a complex activity which requires knowledge about performance to date as well as ability to anticipate actions needed to ensure the desired end results. Thats why, Aarong dont have the subcontracting policy.

0.4.2 Sources of information about suppliers


Knowledge of information source is primary task for this kind of manufacturing agency. Aarong relay solely on their whole experience and past memory. The normal principal sources of information consist of catalogs, trade journals, advertisements, suppliers and commodity directories, sales interviews, annual report etc. These are given bellow in brief: Catalogs: Aarong have the proper catalog and have the advantage of being a permanent record of whole organization, always in the office of the buyer. Salespeople are not always available, advertisements are frequently forgotten, but the catalog is an ever present reminder. Two types of catalog are here.

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Jobbers catalog: Contains a variety of manufacturing sources an offer, to a certain extent. Equipment and machinery catalog: Provide information of Specification of, location of, supply for replacement parts as well as new equipments of Aarong.

Trade journals: Trade journals are also valuable sources of information of Aarong as to potential suppliers. It is used in two ways. Firstly, use is a study of the text, adds to the buyers general information, suggests new products and substitute materials. Secondly, use has to do with advertising.

Trade Directories: Trade directories are volumes which list leading manufactures, addresses, number of branches, products, supplies, equipment, and other items offered for sale. Sales Representation: In Aarong it is essential to develop good supplier relations which begin with a friendly, courteous, sympathetic, and frank attitude toward the supplier salesperson. Aarong have the policies and procedures guidelines concerning the relations between the purchasing office and suppliers representatives. Suppliers and Commodity file: Such files contain information concerning the address of the Aarongs supplier, past orders placed with the company, data concerning its general fitness, reliability, suppliers willingness to meet particular requirements of them, which product has been purchased in the past, price paid, point of shipment and cross reference of the supplier file.

0.4.3 Aarongs Supplier evaluation


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We know that Aarong is an organization which fully depends on domestic ruler raw product. So the supplier of Aarong will be the ruler people. Aarongs supplier evaluation depends on some important factors. Those are given below: Existing and Potential Sources: The evaluation of suppliers is a continuing purchasing task. Aarong does this very carefully. They monitored to see if expected performance materializes with current suppliers. New sources need to be screened to see if their potential warrants serous future consideration.

Informal and Formal Evaluation: Aarongs current supplier is one which has passed through earlier supplier efforts and subsequently received, at a minimum, one order. Most buyer of Aarong tends to separate current suppliers into at least two categories. Informal Evaluation: Informal evolution includes assessments of personal contract between Aarong and its supplier in the purchaser section in all function where such contract takes place.

0.4.4 Aarongs Additional sources and selection consideration


Aarongs additional sources and selection consideration system causes if supplier had been found who could meet all the requirements, the search would be over. Such it not the case. Shall the buyer, in buying a given item, rely on a single supplier, or utilize several? Shall the buyer directly buy from manufacturers or through distributors? Aarong need quick supply, because customer demand is very high and fast. Aarong need the product as their expectation. In doing so, it shall be assumed that adequate investigation for fairness and capacity to meet the requirements as to quality, quantity, delivery and service, and that prices are not unreasonable. The product of Aarong is much reasonable then other. So Aarong need to maintain this for customer.

0.4.5 Aarongs supplier rating system


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Supplier rating system is very important function for an organization. Aarong evaluate their supplier rating system through some steps. Most formal supplier rating schemes attempt to track actual performance over time. Thus corrective action can be taken as needed. Formal supplier rating schemes track vendor performance on quality, price, delivery and service. It is normal to track a suppliers quality performance very closely and in sufficient deal to enable the pinpointing of corrective action. Delivery performance of a current supplier is fairly easily tracked if good records exist of delivery promises and actual recipients and few modifications

have been made on an informal basis. There is a most effective evaluation system of rating that Aarong follows is weighted point evaluation system. Aarong has different types of supplier that is why this system is successful. Particularly, in cases where several sources supply the same item. Outstanding performance of a supplier can then be rewarded with additional business, while poor performance will, at the least, result in less business, or possibly dropping a supplier altogether. For different product classes, different factors, weight and measure should be used to reflect varying impact on the organization.

Factor

Weight 30

How Measured 1% defective subtracts 6%

Supplier Performance past 12 Months 0.5% defective

Rating (30(100-(0.5 X 6)/100 =29.1 (40(100-(5X2)/100 =36 (20(50/55)X100)/100 =18.18 (10X75)/100 =7.5 90.78

Quality

Delivery Price

40 20 10

Service Total Points 100

1 day late subtracts 2% Lowest price paid Price charged Goods=100% Fair=70% Poor=40%

Average 5 days late $50 $55 Fair=75%

Aarongs supplier weighted point rating system

0.4.6 The Supplier selection decision


The purchasers Perception of the suppliers ability in Aarong to meet satisfactory quality, quantity, delivery, and price and service objectives will govern the selection decision. Its also included their past history, facilities and technical strength, financial status, organization and management, reputation, systems, communication of rural people, labor relations, and location. The nature and the amount of the purchase will influence the selection decision. Aarongs supplier selection decision can be seen as decision making under uncertainty and can be represented by a decision tree. There are three stage decision trees for supplier selection also. In the given figure, shows a decision tree of one stage situation with only two

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suppliers considered and two possible outcomes. To use decision tree effectively, and assess the probabilities of success and failure. This simple tree could apply to a special onetime purchase without expectation of follow on business for some time to come.

Suppli er A

On demand high 100 units Price $30 per On demand medium unit 70 units Price $35 per On demand low 40 unit units Price $40 per unit On demand high 100 units Price $28 per On demand medium unit 70 units Price $40 per On demand low 40 unit units Price $30 per unit

Suppli er B

Solution: Supplier A: High Medium Low

=3000 =2450 =1600 =7000 So, Aarong will choose supplier B.

100 X 30 70 X 35 40 X 40

Supplier B: High Medium Low

100 X 28 70 X 40 40 X 30

=2800 =2800 =1200 =6800

0.4.7 Consumer buyer behavior


CONSUMER DECISION PROCESS MODEL:

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Aarong is the most leading fashionable organization in Bangladesh. Aarong is always looking towards its consumer perceptions. It always creates a different look and patterns in their product. This is the main reason to attract consumer. The process component of the consumer decision making process deals with how consumers make decisions. The product consumer have selected to buy and in order to understand how a consumer makes these decisions in the process component we need to look at the psychological field of the process model which are the internal influences of motivation, perception, learning, personality & attitude and how these influences

affect the decision making process. Aarong the act of making a consumer decision consists of three stages which are need recognition, pre-purchase search & evaluation of alternatives.

Need Recognition: Need recognition occurs when a consumer is faced with a problem. There are many different reasons why someone would decide that they need to buy the product from Aarong. It might be necessary of any product as well as fashionable one Pre-purchase Search: Pre-purchase search is very important for consumer. At first they search their desirable product in the market. After that they decide from where they buy their product. When they think about perfection and fissionable thing they must go through Aarong. Evaluation of Alternative: This means to evaluate the alternative brands of that product. From that evaluation consumer select their product according their perception. Aarong have the ability to fulfill their perception. That is the quality of Aarong.

0.4.8 Purchase-supplier relations


When one organization supplies another with goods or services, the nature of the relationship between the two organizations is a major influence on the ultimate value and customer satisfaction achievable. Aarong maintain a good relationship with their supplier. They maintain the relationship very sincerely. Aarong deals with their supplier several times. All times they maintain their formalities. Good relations with supplier are very important for their supply system. If the relation is well, the supplier supply product as their requirement. In this section the nature of supplier goodwill will be discussed, along with the framework for buyer-seller satisfaction, the qualifications of good and preferred suppliers, partnerships, and strategic alliances.

0.4.9 Aarongs Purchase-supplier satisfaction model


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Aarong is a fair trade organization. Aarong always try to satisfy their selected supplier. One of the major assessments a purchaser must make is whether the current relationship with a supplier is satisfactory or not. This relationship is highly complex and different people inside the purchasing organization may have different perceptions of it. Aarong follow a supplier satisfaction model. This model includes some assumptions. Those are: I. That satisfaction with a current supplier relationship can be assessed, however crudely, at least in macro terms, whether it is satisfactory or not.

II. III. IV. V.


VI.

That an unsatisfied party will attempt to move to a more satisfactory situation. That attempts to move may fall in the win and lose, as well as the lose and lose, lose and win and win and win category. That attempts to move may affect the stability of the relationship. That purchaser and seller may well have different perceptions of the same relationship. That many tools, techniques, and approaches exists which will assist either party in moving position and improving stability.
Complet e satisfacti

C Purchaser dissatisfied Supplier satisfied

A Purchaser dissatisfied Supplier dissatisfied

Marginal satisfacti on Supplier s Satisfac tion

D Purchaser dissatisfied Supplier dissatisfied

B Purchaser satisfied Supplier dissatisfied

Total Dissatisfact ion

Marginal satisfaction Purchasers Satisfaction

Complete satisfaction

0.4.10 Aarongs Reverse supplier development


In supplier selection, it has so far been assured that at least one suitable and willing supplier already exists and that the purchasers problems are primarily one of determining who the best supplier is. In this case Aarong is very serious about their suppliers development. After selecting the best supplier they give better training for their future development. We know that

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Aarong highly depends on rural suppliers. Reverse marketing supplier development implies a degree of aggressive procurement involvement not normally encountered in supplier selection. Reverse supplier development should take a broader point of view. It defines the need for developing new or existing suppliers as follows: The purchase is aware that benefits will accrue to both the supplier and the purchaser, benefits of which the supplier may not be aware.

Aarongs Supplier Development Context


Supplier Sales response Purchaser

Purchasing initiative

Aarong symbolizes fairness in the global village. The organization has identified three basic constraints for gainful employment of the low income and marginalized people in the rural areas: lack of working capital, marketing support and opportunity for skills development. In order to bridge these gaps, Aarong provides a wide range of services to its workers and suppliers: Spot payment on product delivery to encourage efficiency and productivity; Reach out to producers in remote areas to ensure fair value for their efforts; Marketing communication and information for artisans; Advances against purchase orders where necessary; Training & Education in skills development to raise product quality and marketability; Product Design and Support in Product Development; Quality Control to increase producer awareness of the importance of quality. These values reflect fair trade principles which have been developed by registered Fair Trade Organizations. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers in Bangladesh.

Aarongs management and financial evaluation tends toward greater reliance on single sources for a longer time continuous, along with great interest in material requirement and just in time production, potential suppliers management strength takes on added significance. This will require a detailed examination of Aarongs structure, qualifications of managers, management control, the reward-punishment system, training and development system and policies and

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0.4.11 Aarongs Management and Financial Evaluation

procedures. It is also useful to have an explanation as to why the suppliers manager believes it is managing well and an indication of its most notable successes and failures. An evaluation of this suppliers procurement system, organization, procedures, and personnel is vital and can best be carried out by competent procurement staff in the organization like Aarong is letting the contract.

0.4.12 Benefits
Every single woman who works in Aarong-owned production facilities is also a beneficiary of BRAC's (Bangladesh Rural Advancement Committee) multifaceted development programs. As a support entity of BRAC, a significant portion of Aarong's earnings go directly into financing the NGO's (non-governmental organization) development programs in healthcare and education as well as economic and social development. Specific benefits for producers include:

Free medical check-ups including free eye treatment, eye-glasses and treatment costs for severe illnesses Advance wage payments for employees in need Day care services Workers retirement fund Artisans receive an hourly rate which is deemed to be fair with Aarong minimizing its overheads where possible.

Further, AARONG also assists with design and development, market information and quality control, and provides advances against purchase orders as well as spot payment on product delivery to encourage further production.

0.4.13 Competitors Analysis of Aarong


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Competitor analysis in marketing is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats. Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment.

Aarong has its own version of the competitive analysis and its function is clear: to line up your product with other products and show where yours falls short and where yours is superior. Each industry brings a different spin to this old favorite and user experience design has its own set of criteria by which to judge competitors.

Competitors Analysis of Aarong

From the above diagram it is seen that Aarong has competitive advantage over its competitors on almost every factors. Only few companies have ability to chase some sort of advantage like Aarong. Such as Rina Latifs product features, qualities and innovativeness, KayKraft and Anjans

This report has been prepared based on both primary and secondary data. The primary data was collected through observation and information collected from the books, our classes, communication and relation with Aarong. There are data that we collected from secondary sources from reports, publishes documents, internet and articles. Data collected from the organization and other sources were assembled and put down in different part of the report. Based on the collected information analysis and conclusion is performed.

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0.5 Methodology of the study

0.5.1 Limitation of the study


During groundwork of this report some obstacles have come across, which can be termed as the limitation of the project, these reasons did not allow this repot to go in depth of issues hence several parts of the report is not concentrated. Therefore the limitations that were faced: a) The internal and sensitive information was not found properly from the organization b) Lack of sufficient time of the HR personnel which did not allow learning about certain issues or practices deeply. c) Unavailability of enough relevant records and information d) Published information is not up to date. e) Employees are not allowed to provide in depth information about their practices as the information is confidential.

0.5.2 SWOT analysis of Aarong


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SWOT analysis is a powerful technique for understanding organizations strength and weakness and looking for the opportunities and threats it may face. Used in a business context it helps organization crave a sustainable niche in a market. This analysis is mainly based on a current market situation.

Figure: SWOT analysis of Aarong & AAF

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Strength:
Aarong & AAF is the pioneer organization in handicraft. Aarong has more than 68 % market share, which makes it the market leader. And over these years Aarong has built a strong brand name in home and abroad. The products quality maintains a certain standard and it secured Aarong with loyal customers. Aarongs one of the biggest strength is its production centers (AAF). The sale of Aarong is so high that it has almost zero production damage rate which reduces producing costs.

Weakness:
Even though Aarong is the market leader it still has its drawbacks, one of the weakness is Aarong charges higher price for their products on the other hand the competitors charges lower price for the products. It not only reduces Aarongs sale but also similarity in design as boutiques are coming up with similar designs. Aarong has its outlets in Dhaka, Chittagong, Sylhet and Khulna, but they do not have any outlets in Rajshahi, Rangpur, and Jessore etc.

Opportunities:
Aarong can go for new outlets in different cities. They can also start joint venture with other boutiques so that they can have more coverage in home and abroad. Aarong has no seasonal collection; they can start seasonal collection for each season it will give them opportunity to attract new markets.

Threats:
Even though Aarong does not have any big competitors now but the number of completion is ever growing. There is always new competitors threat. And the number of consumer for other boutiques is increasing which will eventually decrease Aarongs market and as well as sales.

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0.5.3 Major Findings of the study


In our report at Aarong we have observer and found different issues, these are: Fair system in recruitment and selection process: Aarong believes in fair recruitment and selection process for their employees. They try to make the whole process unbiased and fair. The transparency in recruitment & selection process is their first priority Hiring the right number of employees in right place: the objective of Aarong & AAF is to make sure that each department has sufficient workforce to get the organization ahead. They have lack emphasize in research and development, means that they are continuous upgrading the work process through technology but not paying enough attention to the employee development and their demand. Competence gap for the employees is noticeable, the gap between the standard and actual performance is noticeable in employees. Compensation and benefits at Aarong & AAF is not attractive comparing to other organizations. Employee turnover rate is high because of the salary structure. Unless Aarong improve their salary Structure they will have hard times finding employees with higher competencies.

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0.5.4 Recommendation
After completing this project, we have come up with some recommendation which Aarong can use for their advancement. These ares They should upgrade their supplier system; Supplier relation should be more flexible; They should give their latest information on website; Aarong should introduce online application for their vacancies, it will help them reducing cyber hunting times in bdjobs and other sites; The compensation package in Aarong is not Attractive they should restructure their salary and other compensation; As there is competency gap in employees Aarong should start employee training and other development programs to develop the employees.

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0.5.5 Conclusion
Aarong is not only a fashion house it is more than that. With times Aarong has evolved itself as one of the most successful lifestyle store in our country maintaining the tradition and the trends. Besides becoming the leading lifestyle chain store in Bangladesh they have cherished the traditional crafts of Bangladesh through Ayesha Abed Foundation and have been able to create employment of thousands of people. As a result Aarong is a fair trade organization reaching global market by representing folklore tradition of Bangladesh. Aarong & AAF plays the role of protector and promoter of traditional Bangladeshi products and designs. The designers and the innovators of the products offered by Aarong have not only established the organization of as leaders in handicrafts but have also reignited interest and popularity for styles and traditional crafts that are native to the country. It is this gracious blend of contemporary and customary, which ensures that each product is original and saleable in a modern society.

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0.5.6 Bibliography
Ayesha Abed Foundation Accounts Customer Service Human Resources Export Marketing My Aarong Rewards Program Textile aaf.aarong@brac.net accounts.aarong@brac.net customerservice.aarong@brac.net hr.aarong@brac.net export.aarong@brac.net marketing.aarong@brac.net myaarongrewards@brac.net textile.aarong@brac.net

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