Supply Chain Management of Rahimafrooz Batteries Limited

(RBL)
1. INTRODUCTION
A supply chain is a network of facilities and distribution options that performs the functions
of procurement of materials, transformation of these materials into intermediate and finished
products, and the distribution of these finished products to customers. Supply chains exist in
both service and manufacturing organizations, although the complexity of the chain may vary
greatly from industry to industry and firm to firm. Supply chain management, then, is the
active management of supply chain activities to maximize customer value and achieve a
sustainable competitive advantage. It represents a conscious effort by the supply chain firms
to develop and run supply chains in the most effective & efficient ways possible. Supply
chain activities cover everything from product development, sourcing, production, and
logistics, as well as the information systems needed to coordinate these activities.
The organizations that make up the supply chain are linked together through physical flows
and information flows. Physical flows involve the transformation, movement, and storage of
goods and materials. They are the most visible piece of the supply chain. But just as
important are information flows. Information flows allow the various supply chain partners to
coordinate their long-term plans, and to control the day-to-day flow of goods and material up
and down the supply chain.
Supply chain management is typically viewed to lie between fully vertically integrated firms,
where the entire material flow is owned by a single firm, and those where each channel
member operates independently. Therefore coordination between the various players in the
chain is key in its effective management. Cooper and Ellram compare supply chain
management to a well-balanced and well-practiced relay team. Such a team is more
competitive when each player knows how to be positioned for the hand-off. The relationships
are the strongest between players who directly pass the baton, but the entire team needs to
make a coordinated effort to win the race.
1.1 Supply Chain
All stages involved, directly or indirectly, in fulfilling a customer request are called supply
chain. It includes manufacturers, suppliers, transporters, warehouses, retailers, and customers.
Within each company, the supply chain includes all functions involved in fulfilling a
customer request (product development, marketing, operations, distribution, finance,
customer service). Customer is an integral part of the supply chain. It includes movement of
products from suppliers to manufacturers to distributors, but also includes movement of
information, funds, and products in both directions. It is more accurate to use the term
supply network or supply web.

1.2 Flows in a Supply Chain

Materials, Information, Invoicing

Suppliers

Manufacturers

Dealers

Customers

After-sales service, Order information, funds

1.3 Supply chain stages:

Customers
Retailers
Distributors
Manufacturers
Suppliers
All stages may not be present in all supply chains. So, Supply chain management is the
management of flows between and among supply chain stages to maximize total supply chain
profitability.
1.4 The Goal of a Supply Chain
1. Maximize overall value created:
Supply chain value is the difference between what the final product is worth to the customer
and the effort the supply chain expends in filling the customers request. Value is correlated to
supply chain profitability (difference between revenue generated from the customer and the
overall cost across the supply chain).
2. Maximize total supply chain profitability:
Supply chain incurs costs (information, storage, transportation, components, assembly, etc.).
Supply chain profitability is total profit to be shared across all stages of the supply chain.
Supply chain success should be measured by total supply chain profitability, not profits at an
individual stage. Sources of supply chain revenue: the customer Sources of supply chain cost:
flows of information, products, or funds between stages of the supply chain

FG: A Schematic of a Supply Chain

2. COMPANY BACKGROUND

Rahimafrooz

Rahimafrooz is one of the respected and reputed business houses in Bangladesh. It has just
crossed 50 years of operation. Rahimafrooz has endured turbulences of the last 50 years and
has been able to transform itself from a small trading company into a leading diversified
business house. This is, indeed, a milestone, which Rahimafrooz has achieved with trust,
support and dedication of all stakeholders, past and present, most importantly, its
customers. Rahimafrooz began its operation as a trading company in 1954. Today
Rahimafrooz has diversified in many areas from storage power solution to automotive
aftermarket to retailing.
Rahimafrooz operates in three broad domains: automotive after market, power and energy,
and retail chain. It sells tyres, batteries, lubricants, emergency power products, diesel as well
as gas generators, lighting products, electrical accessories, solar systems, energy solutions
using compressed natural gas, and power rectifiers. The Group also runs 'Agora' the first
retail chain in Bangladesh. The Groups portfolio includes international tyre brands Dunlop
and Kenda, and its own brand RZ Tyre. Rahimafrooz is the exclusive franchisee of the full
range of worlds leading lubricant brand Castrol in Bangladesh.
Through Rahimafrooz IPS, UPS and Voltage Stabiliser, the Company enjoys clear leadership
of the emergency power products market. The Company brings to Bangladesh leading gas
and diesel generator brands Pramac as well as Mitsubishi. It also markets home and
industrial lighting products from General Electric USA (GE) and electrical accessories from
Hager France. Rahimafroozs Renewable Energy division has been providing Solar solutions
in collaboration with British Petroleum (BP).

The Company, in recognition of its solar efforts, received the McGraw-Hill Platt Global
Energy Award in 2004 and the Global Ashden Award in 2006. Rahimafrooz also offers
comprehensive solution provider for CNG refuelling, conversion, conversion centres, and
maintenance. Rahimafrooz is also endeavouring into tyre retread, besides manufacturing and
marketing emery cloths and abrasive papers. In a joint venture, the Group has enterprised into
the first ever fibre optical commercial networking backbone in Bangladesh in the form of
Metronet Bangladesh Ltd. (MBL).
Rahimafrooz, in 2001, made a breakthrough in the urban lifestyles by launching the first
retail chain in the country Agora. One of the SBUs of Rahiamfrooz Group, Rahimafrooz
Renewable Energy Ltd. distributes solar home systems to underdeveloped rural regions of
Bangladesh. For that, the company received the Ashden Award for Sustainable
Energy in 2006. The Group has strengthened its market leadership at home while reaching
out to international markets. Ranging from automotive after market products, energy and
power solutions, to a world class retail chain the committed team at Rahimafrooz is
determined to ensure best in class quality standards and living the Groups four core values
Integrity,
Excellence,
Customer Delight and
Innovation.

VISION
Be an enterprising Group of Taka 2,000 crore by the year 2010 with a diversified business
portfolio focused on dynamic growth, excellence, innovation, customer delight in enriching
our world.
QUALITY POLICY
Rahimafrooz as a team are totally committed to customer delight through intelligent effort
and continuous improvement.
ASPIRATION
To be the most admired and trusted organization through excelling in everything
Rahimafrooz do, following ethical business practices and adding value to stakeholders.
VALUES
Integrity in all their dealings
Excellence in everything they do
Total commitment to customer satisfaction
Thinking ahead and taking new initiatives
TEAM
Rahimafrooz foster en environment of learning and reward, taking pride in who they are and
what they do.

OUR COMMUNITY
Rahimafrooz strongly believes that doing good business means being good corporate citizen.
The company always takes pride in serving the stakeholders and community in multifaceted
ways.
Global Compact Rahimafrooz is a signatory of the Global Compact, a UN initiative that sets
standard on Human Rights, Labor Relations, Environmental and Ethics.
Environment
Environment Management System (EMS): They have taken comprehensive measures to
protect environment, complying not only to local requirements but also with ISO 14001.
Safe Disposal and Recycling of Used Batteries: Rahimafrooz has undertaken a nation-wide
campaign to promote safe battery disposal and recycling of used battery.
Community Services Rahimafrooz regularly contribute personal, monetary and medical help
to people disadvantaged by natural calamities and serious illness. Rahimafrooz also makes
significant contribution to leading diabetic and cancer hospitals.
2.1 SBUs and Affiliations:

SBUs
Rahimafrooz Batteries Limited
Rahimafrooz Distribution Limited
Rahimafrooz Superstores Limited
Rahimafrooz CNG Limited
Rahimafrooz Energy Services Limited
Excel Retread Limited

01. Rahimafrooz
Limited

Batteries Produces all kinds of automotive and industrial batteries

and one of the largest battery manufacturers in the
SAARC region; exports batteries in more than 19
countries

02. Rahimafrooz

Distribution Maintains nationwide distribution network with more

Limited

03. Rahimafrooz
Limited

than 400 outlets covering entire Bangladesh; distributes

mainly automotive and appliance battery, tyre, IPS, UPS
and lubricants.
Superstores Emerges as leading chain superstore in Bangladesh,
mainly covering Dhaka Metropolitan City area; carries
more than 25,000 varieties of product.

04. Rahimafrooz CNG Limited

Involves in setting up CNG stations; facilitates

establishing CNG conversion centers; converts
automobiles into CNG and provides technical solution
and support.

05. Rahimafrooz Energy Services Provides uninterrupted and clean power and a fast
Limited
growing power services company; establishes with
objective to meet country's growing demand for power
06. Excel Retread Limited

Retreads all types of tyres from cars to buses/trucks; one

of the leading tyre retread centers

2.2 Rahimafrooz Batteries Limited (RBL)

Rahimafrooz Batteries Limited (RBL) is the largest lead-acid battery manufacturer in
Bangladesh and offers an extensive range of automotive & customized industrial battery. It is
one of the respected and reputed business houses in Bangladesh. It produces all kinds of
automotive and industrial batteries. It manufactures over 300 different types of automotive
and industrial batteries. Its plant is ISO 9001 & ISO 14001 certified. RBL has also extended
its product line to secure power solution with UPS, Rectifier and VRLA Batteries with
collaboration of Enersys-USA, Eltek-Norway, AEES-France. RBL has a successful story of
installing solar power in the remote rural areas of Bangladesh. It has successfully installed
more than 10,000 home solar systems in the remote rural areas of Bangladesh.
Rahimafrooz produces and markets a range of battery products automotive, motorcycle, and
appliance batteries, Industrial (deep cycle, traction, VRLA) batteries, IPS and UPS batteries,
and rectifiers. Lucas and Spark are the leading names in the local battery market while Volta,
Optus and Delta batteries are fast gaining equity as International brands.
The company has been serving this market for the past fifty years by introducing innovative
products. Rahimafrooz Batteries Limited (RBL) is one of the key players in South Asia in its
field and one of the largest battery manufacturers in the SAARC region; With undisputed
market leadership at home, exports batteries in more than 35 countries in Asia, Middle East,
Africa & South America. The Company has embarked upon an aggressive growth plan that
includes becoming a significant global player in the international battery market.
Vision 2010:
To be one of the top two storage power companies in SAARC by the year 2010

Brands
Lucas
Optus
Rahimafrooz
Spark
Volta

2.2.1 Plant Capacity:

Rahimafrooz has state of the art manufacturing plant. It is equipped with all latest
technologies with complete air treatment and lead-recycling management. RBL produces
different types of batteries to meet the local and international market. Its capacity in
Automotive Battery is 660,000 (N50) units per annum and Industrial Battery is 41 million
AH/annum. By the end of 2008 production capacity of Industrial Battery will be increase to
120 Million AH. All the products are manufactured under strict quality control and ensured
by international certifications.
2.2.2 Collaboration Agreements
It has different technical collaboration agreements with Lucas Battery Company, U.K,
Technical support Group (TSG), Hawker Batteries, UK, Invensys, UK, Hawker Batteries,
UK, Eltek Norway, AEES France to ensure the quality of battery.
2.2.3 Performance
SBU's Contribution to Group Sales

Battery
Contribution

Battery Production
Sales of Battery

2.2.4 Network

2.5 Product Overview

Rahimafrooz markets three major brands of automotive batteries: LUCAS, VOLTA and
SPARK. All the batteries are produced under strict quality controlled plant of the
Rahimafrooz Batteries Ltd. It has introduced new brand SPARK for the taxi cab. This
specially designed to take the load and frequency of the taxi cab.
Lucas Automotive Dry Charge Battery:
12 Volt Battery
German Drive Range
Heavy Duty Range
6 Volt Batteries
Lucas PCM

Rahimafrooz manufactures specialized Industrial Batteries. The plant is equipped with

modern production machineries and testing facilities including those for tubular plates. It
conforms to international standard ISO 9001 & ISO 14001and to JIS, DIN, BS and IEC
specification. It produces a wide range of lead-acid industrial batteries with capacities from
20AH to 2500AH. The batteries are used for applications in telecommunication, power
station, railway system, electric vehicle, forklift, ship, buoy lighting and solar power system.
Industrial Batteries
Deep Cycle
Electric Car Battery
IPB Battery
Standby Stationary
Traction
Specific features of our industrial battery are:
Long life
Minimum maintenance

Low internal resistance

High rate of discharge performance
High resistance to adverse mechanical and electrical condition
Tolerance to extremes of temperature

Special Features:
Excellent cycling ability provides high reliability and exceptionally long life
Large electrolyte reservoir means high tolerance to water loss and minimal maintenance.
High charging efficiency
Low self discharge, dry pre-charged plates
Robust, clear case and rugged construction ensures mechanical durability
The quality, dependability, reliability and long service life of thicker Flat Plate deep cycle
batteries are the result of balanced design of the plates, separators and incorporation of latest
technical developments in lead acid battery technology.
2. Supply Chain Management of RBL
Rahimafrooz Distribution Limited (RDL) involves in the marketing and distribution of a wide
range of products through its nation-wide distribution network. It deals mainly with tyres,
automotive batteries, Instant Power system (IPS), UPS and lubricants. Its batteries are
produced in Rahimafrooz Batteries Limited (RBL), which is ISO 9002 and 14001 certified.
Commitment to quality and customer satisfaction has been a motivating force behind the
success of RDL. RDL markets three major brands of automotive batteries: LUCAS, VOLTA,
VOLTA MF (Maintenance Free) and SPARK. All batteries are produced by RBL.
3.1 Objective
Supply Right products in Right place in Right time. The main objective of RBL supply chain
is to minimize total supply chain cost to meet fixed and given demand, where the total cost is
composed of raw material and other acquisition costs, inbound transportation costs, facility
investment costs, direct and indirect manufacturing costs, direct and indirect distribution
center costs, inventory holding costs, inter-facility transportation costs, and outbound
transportation costs.
3.2 Supply Chain of RBL
A complete and integrated Sales and Distribution network is inevitable to make the products,
services and related information available to the customers. RBL has own strong distribution
network RDL which is highly disciplined and organized Sales and Distribution department to
maintain smooth supply of their products, services and related information to fulfill the
requirement of valued customers. The company virtually covers every single corner of the
rural as well as urban area of Bangladesh. The company has a very large and competent
having 451 dealers and 8 distributors to ensure product availability throughout the country.

Lead
Acid
Supp
lier
Plat
e
Supp
lier
Pack
agin
g
Supp
Acce
lier
ssor
y
Supp
lier

RBLs Supply Chain

Store
Nakalpara Factory

Information Flow

Finished Goods

Central Warehouse

Product Flow

Customers

Dealers

Distributors

Regional Storehouse

3.2.1 Stages of supply chain

Stages of supply chain in RBL are as follows:
Customers: RBL target customers are automotive after market for battery.
Retailers: RDL has more than 450 dealers all over the country through which RBL distribute
the batteries and sale to final users.
Distributors: RBL has 8 exclusive distributors in the country who are controlling the dealers,
obtaining information related to supply and demand of battery, handling customer companits
etc.
Manufacturers: The main manufacturing plant of Rahimafrooz Batteries Limited (RBL) is
situated in Nakalpara, Dhaka.
Suppliers: RBL has many suppliers for their lead acid, packaging, accessories etc.
3.2.2 The Cycles of Supply Chains
Processes in a supply chain are divided into a series of cycles, each performed at the
interfaces between two successive supply chain stages. Each cycle occurs at the interface
between two successive stages
Customer order cycle (customer-retailer)

 Replenishment cycle (retailer-distributor)

Manufacturing cycle (distributor-manufacturer)
Procurement cycle (manufacturer-supplier)
Cycle view clearly defines processes involved and the owners of each process. Each cycle
specifies the roles and responsibilities of each member and the desired outcome of each
process.
3.2.3 Cycles of Supply Chain of RBL
Customer order cycle
(Customer-dealer)

Customer Order

Customer

Replenishment cycle
(Dealer-distributor)

Replenishment

Dealers

Manufacturing cycle
(Distributor-RBL)

Manufacturing

Procurement cycle
(Manufacturer-supplier)

RBL
Procurement
Cycle

Supplier
RBL: An Efficient Supply Chain

Customer order cycle

Like other cycle, in customer cycle consists of following sub-process
RBL Stage

Markets
Product
3.3 Supply

Buyer stage

Places
Chainorder
Decisions

RBL Stage

in

Receives
order
RBL

Buyer stage

Deliver
order

RBL Stage

Receives
goods

Buyer stage
Returns if
any flaws

We classify the decisions for supply chain management of RBL into two broad categories -strategic and operational. As the term implies, strategic decisions are made typically over a
longer time horizon. These are closely linked to the corporate strategy the corporate strategy),
and guide supply chain policies from a design perspective. On the other hand, operational
decisions are short term, and focus on activities over a day-to-day basis. The effort in these
types of decisions is to effectively and efficiently manage the product flow in the
"strategically" planned supply chain. In RBL, there are four major decision areas in supply
chain management:
1) Location,
2) Production,

3) Inventory, and
4) Transportation (distribution),
3.3.1 Location Decisions
The geographic placement of production facilities, stocking points, and sourcing points is the
natural first step in creating a supply chain. In RBL, the location of facilities involves a
commitment of resources to a long-term plan. The management established production
facilities in Dhaka with large size production units by which the product flows through to the
final customer. These decisions are of great significance to RBL since they represent the basic
strategy for accessing customer markets, and will have a considerable impact on revenue,
cost, and level of service. RBL determines the decisions an optimization routine that
considers production costs, taxes, duties and duty drawback, tariffs, local content, distribution
costs, production limitations, etc. Although location decisions are primarily strategic, they
also have implications on an operational level.
3.2.2 Production Decisions
The strategic decisions include what products to produce, and which plants to produce them
in, allocation of suppliers to plants, plants to DC's, and DC's to customer markets. As before,
these decisions have a big impact on the revenues, costs and customer service levels of the
firm. These decisions assume the existence of the facilities, but determine the exact path(s)
through which a product flows to and from these facilities. Another critical issue is the
capacity of the manufacturing facilities--and this largely depends the degree of vertical
integration within the firm. Operational decisions focus on detailed production scheduling.
These decisions include the construction of the master production schedules, scheduling
production on machines, and equipment maintenance. Other considerations include workload
balancing, and quality control measures at a production facility.
3.2.3 Inventory Decisions
These refer to means by which inventories are managed. In RBL, inventories exist at every
stage of the supply chain as either raw material, semi-finished or finished goods. They can
also be in-process between locations. Their primary purpose of RBL to buffer against any
uncertainty that might exist in the supply chain. Since holding of inventories can cost
anywhere between 20 to 40 percent of their value, their efficient management is critical in
supply chain operations. The top management of RBL sets goals. However, RBL
management has approached the management of inventory from an operational perspective.
These include deployment strategies (push versus pull), control policies --- the determination
of the optimal levels of order quantities and reorder points, and setting safety stock levels, at
each stocking location. These levels are critical, since they are primary determinants of
customer service levels.

FG: Monthly Order Size Units for Central Warehouse for the Year 2007

FG: Monthly Order Size Units for Distributor Warehouse for the Year 2007

FG: Monthly Order Size Units for dealers for the Year 2007
3.2.4 Transportation Decisions

The mode choice aspects of these decisions are the more strategic ones. These are closely
linked to the inventory decisions, since the best choice of mode is often found by trading-off
the cost of using the particular mode of transport with the indirect cost of inventory
associated with that mode. In Bangladesh, RBL uses Truck as transport modes to send the
batteries to final consumers. They have strong transport modes by which RBL is able to
handle the transport costs efficiently and timely. For exporting batteries in foreign countries,
RBL is shipping by sea, but they necessitate holding relatively large amounts of inventory to
buffer against the inherent uncertainty associated with them. Therefore customer service
levels and geographic location play vital roles in such decisions. Since transportation is more
than 30 percent of the logistics costs, operating efficiently makes good economic sense.
Shipment sizes Lot-for-Lot), routing and scheduling of equipment are key in effective
management of the RBL's transport strategy.
3.4 Supply Chain Model & Achieving Strategic Fit
RBLs supply chain model works on basically aligning the competitive & supply chain
strategies. The Competitive Strategies of RBL are as follows:
Ensuring Lower Cost at all levels
Differentiated products and service with cost efficiency
Based on this RBL has designing their supply chain strategy as follows for achieving
strategic fit:
High quality products
Fast Delivery with cost efficiency
Ensuring High Quality & Safety
RBLs Supply Chain Strategies for
achieving strategic Fit

COMPETITIVE STRATEGIES
Ensuring Lower Cost
at all levels
Differentiated
Service with cost
efficiency

S
T
R
A
T
E
G
I
C
F
I
T

Negotiate Optimal
Construction Cost
Fast Delivery with
cost efficiency
High Quality
& Safety
Design
Sourcing Plan
Negotiate Land in
Strategic Location
with RBL

3.5 Rahimafrooz Batteries Ltd (RBL): An Efficient Supply chain

Rahimafrooz Batteries Ltd (RBL) has an efficient supply chain. They focus more on costeffective delivery than faster or quicker delivery. So their customer order cycle or the RBLs
order cycle occurs after they have managed their inventory and other supplies ready to deliver
the productions. Means their manufacturing, procurement & replenishment cycle occurs
before their customer order cycle. The customer order cycle occurs after RBLs replenishment
cycle, manufacturing & procurement cycle. So their Supply chain is efficient.
Logistical & Cross functional Drivers of RBLs Supply Chain:
Based on RBLs corporate strategy RBL
designs their logistical and other crossfunctional drivers strategies. Like any other
supply chain RBL also have 3 logistical
drivers as the facilities, inventory and
transportations and have other 3 cross
functional drivers such h as information
system, sourcing and pricing. As RBLs key
focus is to provide an efficient supply chain
based workflow so they maintain different
levels of efficiency and responsiveness.
Following is the description of the level of
responsive and efficiency for their logistical
and cross functional drivers:
RBL follows efficiency for their facilities
or production levels.

RBLs Corporate Strategy

RBLs Supply Chain Strategy

RBL decision Making

Efficient

RBL tries to maintain responsive

inventory management all through their
supply chain.
RBL has an efficient transportation
system for their supply chain. They have
more than 120 trucks to carry goods.

Efficient

Responsive

For the other cross functional drivers

such as sourcing and pricing RBL is efficient but they maintains responsive information
structure at their supply chain.
Sourcing
Sourcing is the set of business processes required to purchase goods and services. Sourcing
processes include:
Supplier scoring and assessment
Supplier selection
Procurement

 Sourcing planning and analysis

Sourcing: Role in the Competitive Strategy
Firms can utilize optimal pricing strategies to improve efficiency and responsiveness
Low price and low product availability; vary prices by response times
Supplier Assessment Factors
RBL assesses the following factors during selecting suppliers
Replenishment Lead Time
On-Time Performance
Supply Flexibility
Delivery Frequency / Minimum Lot Size
Supply Quality
Inbound Transportation Cost
Pricing Terms
Information Coordination Capability
Exchange Rates, Taxes, Duties
Supplier Viability
Procurement
The process in which the supplier sends product in response to orders placed by the buyer is
called the procurement process. Goal is to enable orders to be placed and delivered on
schedule at the lowest possible overall cost. There are two main categories of purchased
goods:
Direct materials: components used to make finished goods
Indirect materials: goods used to support the operations of a firm
RBL periodically analyze its procurement spending and supplier performance and use this
analysis as an input for future sourcing decisions Procurement spending is analyzed by part
and supplier to ensure appropriate economies of scale.
Information Technology in a Supply Chain
Information Technology (IT) plays the following roles in RBLs Supply Chain:
IT used throughout the supply chain to gather and analyze information
Captures and delivers information needed to make good decisions
Information is the driver that serves as the glue to create a coordinated supply chain.
Information must have the following characteristics to be useful:
Accurate
Accessible in a timely manner
Information must be of the right kind

Information provides the basis for supply chain management decisions

Inventory: demand patterns, carrying costs, stock-out costs, ordering costs
Transportation: costs, customer locations, shipment sizes
Facility: location, capacity, schedules of a facility; need information about trade-offs
between flexibility and efficiency, demand, exchange rates, taxes, etc.
Effective use of IT in the supply chain can have a significant impact on supply chain
performance. IT helps managers in the following ways
Relevant information available throughout the supply chain allows managers to make
decisions that take into account all stages of the supply chain
Allows performance to be optimized for the entire supply chain, not just for one stage
leads to higher performance for each individual firm in the supply chain
3.6 Information Technology Infrastructure of RBL

Supplier
Relationship
Management
(SRM

Internal Supply Chain

Management (ISCM)

Customer
Relationship
Management
(CRM)

Transaction Management Foundation (TFM)

1. Customer Relationship Management (CRM)
This takes place between an enterprise and its customers downstream in the supply chain.
Key processes of CRM of RBL are:
Marketing
Selling
Order management
Maintenance Service center
3. Internal Supply Chain Management (ISCM)
ISCM includes all processes involved in planning for and fulfilling a customer order. ISCM
processes:
Strategic Planning
Demand Planning
Supply Planning
Fulfillment

Customer Service
4. Supplier Relationship Management (SRM)
Those processes focused on the interaction between the enterprise and suppliers that are
upstream in the supply chain. Key processes of SRM are:
Source
Negotiate
Buy
Supply
Collaboration
3.7 The Value Chain:
Linking Supply Chain and Corporate Strategy of RBL
Components of value chain of RBL are
Competitive strategy:
RBL seeks to satisfy customers offering high quality and innovative products with reasonable
price.
Product development strategy:
Product development strategy specifies the portfolio of innovative batteries that the RBL will
try to develop
Marketing and sales strategy: Marketing and sales strategy specifies how the market will
be segmented and product positioned, priced, and promoted. For example, Lucas and Spark
battery for local market and Volta is for international market.
Supply chain strategy:
Supply chain strategy of RBL determines the material procurement, transportation of
materials, transportation of goods, and manufacture of batteries or customer maintenance
service, distribution of product.

New
Product
Development

Marketing
and
Operations
Sales

Distribution

Service

Finance, Accounting, Information Technology, Human Resources

Fig: The Value Chain

Responsiveness Spectrum

RBL is some what responsive in fulfilling customers demands and some what efficient to
deliver quality products timely with a affordable price. RBL is implied by ability to
respond to wide ranges of quantities demanded
meet short lead times
handle a large variety of products
build highly innovative products
meet a very high maintenance service level

Highly
efficient

Somewhat
efficient

Somewhat
responsive
RBL

Fig: Responsiveness Spectrum of RBL

Highly
responsive

3.8 The Transaction Management of RBL

RBL uses an Enterprise Software System (ESS) for maintaining its transactions.
Order collection
by dealers

Orders submission
to distributors

Orders Processing
by ESS

Creating
challan

Preparing
Delivery Package

Delivery by
dealers

Money collection
by dealers

Submission to the
distributors or
regional office

Adjustment by
ERP (If any)

3.9 Distribution Network Design of Rahimafrooz Batteries Limited (RBL)

The steps taken to move and store a product from the supplier stage to the customer stage in a
supply chain is called distribution. Distribution directly affects cost and the customer
experience and therefore drives profitability. Choice of distribution network can achieve
supply chain objectives from low cost to high responsiveness. Distribution network
performance evaluated along two dimensions at the highest level:
Customer needs that are met
Cost of meeting customer needs
Elements of customer service influenced by network structure:

Response time
Product variety
Product availability
Customer experience
Order visibility
Returnability

Supply chain costs affected by network structure:

Inventories
Transportation
Facilities and handling
Information

Distribution Network Design of Rahimafrooz Batteries Limited (RBL) are as follows:

3.9.1 Retail Storage with Customer Pickup
RBL has 450 over dealers in the country who are retailing the RBLs batteries. Customer
collects batteries from dealers. When they sell the customer, they give a CFQ Card for
customer feedback.

RBL

Dealers

Product Flow
Information Flow

3.9.2. Distributor Storage with Carrier Delivery

For electric and industrial batteries RBL requires special storage conditions
RBL

Distributor/Dealer

Product Flow
Information Flow

3.9.3 Manufacturer Storage with Direct Shipping

RBL

Distributor/Dealer

Product Flow
Information Flow

3.9.4 Distribution of RBLs batteries in foreign market

3.10 Forecasting and product Distribution of RBL

Role of Forecasting in a Supply Chain
The basis for all strategic and planning decisions in a supply chain
Used for both push and pull processes. Examples:
Production: scheduling, inventory, aggregate planning
Marketing: sales force allocation, promotions, new production introduction
Finance: plant/equipment investment, budgetary planning
Personnel: workforce planning, hiring, layoffs
All of these decisions are interrelated
Forecasting and product Distribution process of RBL
Monthly forecast for product sales is a top down process in RBL. First local target is place
and then it is distributed to the regions and then to individual depots. But the demand flow is
a bottom up process in RBL which originates from dealers and then goes to distributors. The
estimates of level, trend, and seasonality are adjusted after each demand observation.
National Target

Region 1

Distributor

Distributor

Region 2

Distributor

Distributor

Demand flow

Forecast flow

Region 3

Distributor

Distributor

3.11 Inventory Management

Inventory management process of RBL can be explained by the following diagram
Matching of Supply and
Demand
Improved Forecasting
Reduce Material Flow Time
Reduce Waiting Time
Reduce Buffer Inventory

Economies of Scale

Supply / Demand
Variability

Seasonal
Variability

Cycle Inventory

Safety Inventory

Seasonal Inventory

Aggregating across products, retailers, or suppliers in a single order allows for a reduction in
lot size for individual products because fixed ordering and transportation costs are now
spread across multiple products, retailers, or suppliers. Benefits getting by RBL through
aggregate planning are - same overall fixed cost, shared over more than one product, effective
fixed cost is reduced for each product, lot size for each product can be reduced All dealers
and distributors of RBL keeps 5% safety inventory for responding customer demand.
CONCLUSION
The supply chain of Rahimafrooz Batteries Limited (RBL) is made up of all the activities
required to deliver products to the customer, from designing product to receiving orders,
procuring materials, marketing, manufacturing, logistics, customer service, receiving
payment and so on. Anyone, anything, anywhere that influences a products time-to-market,
price, quality, information exchange or delivery, among other activities, is part of the supply
chain.
Effectively integrating the information and material flows within the demand and supply
process is what supply chain management is all about. In most companies, however, two
major and very interdependent issues must be simultaneously addressed. The first deals with
delivering products with customer-acceptable quality, with very short lead times, at a
customer-acceptable costwhile keeping inventories throughout the supply chain at a
minimum. The second issue, which tends to be less understood and accepted, is the need for
high-quality, relevant and timely information that is provided when it needs to be known. For
many customers and manufacturers, business processes and support systems will not measure
up to the task of quickly providing planning and execution information from the marketplace

to production and on to vendors so that the customers objectives are consistently met. The
fact is most information supplied is excessive, often late and frequently inaccurate.
As a final point, it is articulated that, Rahimafrooz Batteries Limited (RBL) is following
different strategies, taking different decisions, planning and operation, selecting right
distribution network to make their supply chain efficient and respond to customer demands
timely by delivering quality products and service to customers. To evaluate their supply chain
performance, they follow a checklist and are assessed by top management of RBL.