Supply Chain Mgt

Report on Ss Mart Super Shop 1

Report On Business Logistics

Topic: Ss Mart Super Shop

Prepared By Breaking Dawn


1.1 Literature Review:A supply chain is a system of organizations, people, technology, activities, information, and

resources involved in moving a product or service from supplier to customer (Bowersox,

2007).

Supply chain management is a powerful tool to achieve this collaboration. Through supply

chains, producers in developing countries and emerging economies can access market

information and knowledge to hone their value-added activities(Handfield.1999). Developing

cross-border supply chains is complex, however, and requires information and expertise

about how to build chains, as well as communication and commitment from all the chain

partners (Boehlje 1998). The advantages of supply chain management are numerous, like the

reduction of product losses, increase in sales, reduction of transaction costs, a better control

of product quality and safety and the dissemination of technology, capital and knowledge

among the chain partners. Supply chain management tools have been developed and

implemented throughout the chain to guarantee optimal chain performance.

Agri supply chains may include growers, pickers, packers, processors, storage and transport

facilitators, marketers, exporters, importers, distributors, wholesalers, and retailers. Supply

chain development can thus benefit a broad spectrum of society, rural and urban, in

developing countries(Farina 2000).

In order to react effectively and quick to consumer’s demand, supply chain management is

consumer-oriented. It aims at coordination of production processes (Lambert and Cooper

2000). Supply chain management results in lower transaction costs and increased margins.

Because of the many activities and aspects involved it demands a multidisciplinary approach

and sustainable trade relations. Supply chain partnerships are based on interdependence, trust,

open communication and mutual benefits.

A range of new supply chain management tools have been developed over the past decade.

‘Efficient consumer response’ (ECR) has been developed to increase the consumer

orientation and cost-effectiveness of supply chains (Kurt Salmon Associates, 1993). New

management systems have been implemented to improve logistics, increase the use of

information and communications technologies and boost quality management.



The most obvious integration is that of the segments of the supply chain and the information

That flows among the segments. However, there is another type of integration—the

integration of the value chain. Traditionally, the supply chain has been thought of in terms of

purchasing, transportation, warehousing, and logistics. The integrated value chain is a more

encompassing concept. It is the process by which multiple enterprises within a shared market

channel collaboratively plan, implement, and manage (electronically as well as physically)

the flow of Goods, services, and information along the entire chain in a manner that increases

customer perceived value. This process optimizes the efficiency of the chain, creating a

competitive advantage for all stakeholders in the value chain. The supply chain is basically a

description of flows and activities, but the value chain expresses the contributions made by

various segments and activities to the profit and to customers’ satisfaction. (Drickhamer,

2002.)

Another way of defining the value chain integration is as a process of collaboration that

optimizes all internal and external activities involved in delivering greater perceived value to

the ultimate customer. A supply chain transforms into an integrated value chain when it:

Extends the chain all the way from sub suppliers (tier two, three, etc.) to customers.

Integrate back-office operations with those of the front office operations.

Become highly customer-centric, focusing on demand generation and customer

service, as well as demand fulfilment and logistics.

Seeks to optimize the value added by information and utility-enhancing services.

Is proactively designed by chain members to compete as an “extended enterprise,”

creating and enhancing customer-perceived value by means of cross-enterprise

collaboration.

Much importance is attached to the concept of ‘backward linkage’ in development literature.

Commonly it is understood to refer to an industry that produces an output that is used as an

input in the production of another output (it could also refer to positive externalities). (M. A

Taslim 2009).



Ss Mart Super shop:Ss Mart is one of the largest super shops in Dhaka city. It is situated in science lab,

Dhanmondi. It has only one outlet in the city.

Ss Mart focuses on strategic supply chain management, or the use of supply chains as a

means to create competitive advantages and enhance firm performance.

Supply chain of Ss mart for Agricultural products:A supply chain is a system of organizations, people, technology, activities, information, and

resources involved in moving a product or service from supplier to customer. This figure is

an illustration of best value supply chain. The followings are the supply chain of Ss Mart rice,

vegetables, eggs, meats and fishes.

Supply chain of Potato: Ss Mart buys vegetables and potato from the farmer of Neelfamari, Hatidanda. A school

teacher of that place plays the role of broker. He collects vegetables from the farmers and

then delivers it to Ss mart by local bus. The manager of the super store collets those

vegetables from the Mohammadpur bus stand. It costs lower than buying from the retailers of

Kawran Bazar.

Cost


Farmer level (Neelfamari)

Broker (school teacher)

Super store (Ss Mart)

Customer (locality)

Price: 7 Tk. per kg

Price: 9 Tk. per kg

Price: 17 Tk. per kg

Price: 14 Tk. per kg

2 Tk. per kg 2 Tk. per kg 3 Tk. per kg Satisfaction by consumption


ProfitEach day a sack of 75 kg is bought except Friday. In Friday Ss mart buys 2-3 sacks of potato.Supply Chain of Egg:Ss Mart buys eggs from the local wholesale market in Dhaka city, Kawran Bazar. They don’t

get that much profit from the eggs. Because it is one of the most important daily foods, they

have to store eggs. We have read a research paper on that. According to these, poultry

farmers profit 10% from the production cost.

Cost:

Profit:The poultry firm is in Narayanganj from which the wholesaler of karwanbazar bought eggs

by paying 700 tk for each 100 pieces. Ss Mart purchases around 250 eggs per day from the

wholesaler and has to pay 825 tk for 100 pieces.

Supply Chain of Beaf:Prepared By Breaking Dawn

Transportation cost: 3 Tk. per kg

Transportation cost: Tk. 0.05 per piece

Poultry farmers (Narayanganj)


Customer (Locality)

Wholesaler (Kawran Bazar)

Price: Tk. 6.35 per piece

Price: Tk. 8.25 Per piece

Price: Tk. 7 per piece

Price: Tk. 9 per piece

Tk .65 per piece

Satisfaction by consumption

Tk. 0 .7 per pieceTk. 1.25 per piece


Ss Mart collects meats from retailers of Gabtoli. A supervisor is given the task of supplying

meats at the lowest price with best quality. They buy meats from Gabtoli and then brought it

to store via their own logistics.

Cost:

Profit:

Ss Mart purchases beef from Gabtoli at a price of 260 tk per kg and sell at a price of Tk. 280 per kg to customers and bought 25-30 kg each day and 40-60 kg on Friday.Rice:Ss Mart purchases rice from Krishi market, Mohammadpur. It is one of the largest wholesale

markets for rice in Dhaka. They held mainly 2 types of rice. These are:

Naijarshail

Minicat

Between them, there are further several types of qualities remained. According to these

qualities we have presented the supply chain of rice of Ss Mart.

Prepared By Breaking DawnWholesaler Retailer Customers

Wholesaler (Gabtoli)


Customers

Satisfaction by consumption

Tk.15 per kg

Transportation cost: 5 Tk per Kg

Tk. 280 per KgTk. 265 per kgTk. 254 per kg

Tk. 11 per kg


Naijarshail:Naijarshail is the top quality rice in Bangladesh people usually have on a regular basis. There

are two brands of Naijarshail rice that Ss Mart holds. These brands of rice are described

below according to the supply chain of Ss Mart.

1. Rahim & Sons (Special):

Transportation Cost Per kg: TK.0.5

Ss mart purchases this rice brand 100 kg weekly. The estimate is shown according to per kg

cost of Rahim and Sons Naijarshail rice.

2. Nine Star Rice Brand:

Transportation Cost Per Kg: TK.0.5

Ss mart purchases this rice brand 100 kg weekly. The estimate is shown according to per kg

cost of Nine Star Naijarshail rice brand.

Minicat: Prepared By Breaking Dawn

Wholesale Price: TK. 52 Retail Price: TK. 55

Ruff Profit of Ss Mart: Tk.2.5

Wholesale Price: TK. 39.5 Retail Price: TK. 42

Ruff Profit of Ss Mart: Tk.2


Minicat is another renowned brand of rice BD. It is usually two types base on quality. These

are:

Rahman & sons

Rashid & sons

1. Rahim & Sons:

Transportation cost Per Kg. Tk. 0.5

2. Rashid & Sons:

Transportation cost Per Kg. Tk. 0.5

Fish:When Ss Mart orders for fish, farmers from Rangpur, Shatkhira, Khulna send fresh formalin

free fish from their own fish firm through top of the local bus. Then employee of Ss Mart

collects those from bus stop, brought to store with their own logistics and then store it in the

super stores refrigerator for sale.







Shrimp:Transportation Cost per Kg: Tk. 15

Profit From Shrimp ( per Kg )-They usually buy shrimp from Shatkhira and

Bagherhat.

KOI FishTransportation cost Per KG: 13


Farmers Super Store Customers

Farmers Level: Medium Sized Shrimp TK.330 Large Sized Shrimp Tk.750

Retailer level: Medium Sized Shrimp TK.400Large Sized Shrimp Tk.900

Profit of Ss MartMedium Sized Shrimp TK. 55Large Sized Shrimp TK. 135

Farmers Level: Medium Koi FishTK.220Large Koi FishTk.350

Retailer level: Medium koi FishTK.300Large Koi fishTk. 450

Profit of Ss MartMedium Koi Fish TK. 67Large Koi Fish Tk. 87


Profit from KOI Fish: They buy KOI fish from BrammonbariaSs Mart super store’s Value Chain: A value chain is a string of companies or players working together to satisfy market demands

for a particular products. But in case of super stores they work together to satisfy market

demand for customer’s everyday’s necessities.

A value chain analysis of Ss mart:

Inbound Logistics:

Ss Mart collection services depend on time and request processing. They order according to

the demand of the product and estimate future sales through trend analysis. Their order

amount depends on the super store’s capacity to store the products and the time of

replenishment cycle.

Operations:

They provide good quality products. They do not keep any rotten vegetables of yesterdays.

They promise to their customers to provide them with fresh products like vegetables, fishes

etc.


Inbound Logistics

Operations Marketing & Sales

Services


Marketing & sales:

Their main target customers are the middle class and upper middle class of Dhanmondi area.

Those who prefer fresh foods and have less time for buying, Ss Mart is the famous choice to

go there. They price competitively to sustain in the market. They add a favourable mark up to

their cost. They do their advertising through leaflet, posters in the concerned area. They do

market research for that particular area to understand the market demand and then takes

action to fill them.

Services:

Ss Mart ensure after sale service to some sort of products. They provide customers with

accepting ATM cards and visa cards. They response to each customer’s call very politely.

By analyzing the supply chain and value chain of Ss Mart, we came to know that that they are

quit promising and competitive in the market.

Backward Linkage:Much importance is attached to the concept of ‘backward linkage’ in development literature.

Commonly it is understood to refer to an industry that produces an output that is used as an

input in the production of another output (it could also refer to positive externalities). For

example, steel production is a backward linkage industry for a number of commodities such

as corrugated iron sheet, machinery, cutlery etc. The term is simply a description of the place

of the industry in the production chain. However, in Bangladesh it is frequently asserted that

having domestic backward linkage industries is essential or desirable for rapid

industrialisation. The deduction is false as a general proposition.

Ss Mart doesn’t have such backward linkages for any types of products.

Market SurveysPrepared By Breaking Dawn


Constituting mostly of primary data, this portion of the report deals with the behavior,

expectations and what consumers receive from Ss Mart super shop and super shop industry of

Bangladesh. From a survey conducted on 25 consumers and target consumers of the Ss mart,

we have found out their perception and behavior regarding the super shop.

Results of Consumer surveys

This section has been compiled via distributing questionnaires and analyzing the data

collected from the aforementioned questionnaires. In addition several newspaper and internet

articles on the supermarket industry have been utilized.

Age of Super shop consumers

The fact that super shops are more

visited by people of middle age

rather than the younger generation

is evidenced in the survey. We

surveyed among 25 consumers and

among them 32% (8 people) of the

visitors were of 36 to 45 age range

and 24% (6 people) were of 46 to

55 age. Newlywed couples and

bachelors of 26 to 35 age range

also shop from super markets, the percentage of such shoppers is 28% (7 people).

Figure: Pie chart on 25 respondent’s age groupsSource: Primary

Education of Super shop consumers



Figure: Pie chart on 25 respondent’s Educational background

Source: Primary

The fact that super stores are mostly visited by educated people is evident in our survey.

Among 25 respondents, 6 respondents were doctorates, 10 were postgraduates, 7 were

undergraduates and only 2 of them were below H.S.C level.

Occupation of Super shop consumers



Figure: Pie chart on 25 respondent’s Occupation

Source: Primary

Our survey result shows that there are 4 students, 8 service holders, 7 business persons and 6

home makers among 25 persons shopping regularly in supermarkets. So highest percentage is

of service holders (32%) and second highest percentage is of business persons (7%). Students

go to comparatively less frequently in super shops as only 16% students use super markets.

Monthly Income of Super shop consumers

Figure: Pie chart on 25 respondent’s monthly income



Source: Primary

Apparently people having a higher income rate shop mostly at super markets. 56% of people

having income of more than 50,000 BDT buy from such stores. Only 16% consumers having

income less than 35,000 BDT buy from such stores.

Marital status of consumers

Figure: 25 Super Market Customer’s marital status

The following frequency table shows customer opinion about degree of impact Ss Mart has on

consumer status

Frequency Percent

Valid

Percent

Cumulative

Percent

Valid Strongly Agree 2 8% 8% 8%

Agree 7 28% 28% 36%

Neither agree or

Disagree

8 32% 32% 68%

Disagree 6 24% 24% 92%

Strongly Disagree 2 8% 8% 100%

Total 25 100 100

The following frequency table shows customer opinion about store atmosphere and

decoration appeal of Ss MartPrepared By Breaking Dawn


Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 8 32% 32% 44%

Neither agree or

Disagree

7 28% 28% 72%

Disagree 6 24% 24% 96%


Total 25 100 100

The following frequency table shows customer opinion about diversity of products at Ss Mart

Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 7 28% 28% 36%

Neither agree or

Disagree

8 32% 32% 68%

Disagree 6 24% 24% 92%


Total 25 100 100

The following frequency table shows customer opinion about availability of advertised products on

stocks of Ss Mart



Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 8 32% 32% 44%

Neither agree or

Disagree

7 28% 28% 72%

Disagree 6 24% 24% 96%


Total 25 100 100

The following frequency table shows customer opinion about reasonability of price charge at Ss Mart

Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 10 40% 40% 48%

Neither agree or

Disagree

8 32% 32% 80%

Disagree 3 12% 12% 92%


Total 25 100 100

The following frequency table shows customer opinion about physical facilities of Ss Mart



Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 7 28% 28% 36%

Neither agree or

Disagree

8 32% 32% 68%

Disagree 6 24% 24% 92%


Total 25 100 100

The following frequency table shows customer opinion about safety in their transactions with Ss

Mart

Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 14 56% 56% 68%

Neither agree or

Disagree

6 24% 24% 92%

Disagree 2 8% 8% 100%


Total 25 100 100

The following frequency table shows customer opinion about convenience of location of Ss Mart



Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 8 32% 32% 44%

Neither agree or

Disagree

7 28% 28% 72%

Disagree 6 24% 24% 96%


Total 25 100 100

The following frequency table shows customer opinion about swiftness in delivering the ordered

products at Ss Mart

Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 10 40% 40% 48%

Neither agree or

Disagree

8 32% 32% 80%

Disagree 3 12% 12% 92%


Total 25 100 100

The following frequency table shows customer opinion about courteous employee behaviour at Ss

Mart



Frequency Percent

Valid

Percent

Cumulative

Percent


Agree 10 40% 40% 48%

Neither agree or

Disagree

8 32% 32% 80%

Disagree 3 12% 12% 92%


Total 25 100 100

Ss Mart’s Consumer satisfaction level

Figure: Pie chart on 25 respondent’s Satisfaction level with Ss Mart

Source: Primary

It is evident from our research that 48% of the consumers agree that they are satisfied with

the services provided by Ss Mart. However, almost 32% want modifications as they are not

fully satisfied with the services Ss Mart provide.



Competitive Analysis of Super shop Industry in Bangladesh

Preference of market

Figure: Pie chart on 25 respondent’s market selection

Source: Primary

48% buy groceries from super markets. In our country on line business is not wide spread so

only 4% shop from on line. However, survey reveals that consumers buy from a combination

of markets for different products rather than buying from a single market.



Most used super markets by consumers

Figure: Pie chart on 25 respondent’s super market selection

Primary data shows that Agora is the most popular super market of Dhaka city with a

staggering 29% of the entire market share. Next market leader is Meena Bazar with 25% of

the market share. Then comes Nandon serving 17% of the total customers. Ss Mart comes

next while serving 13% of the entire market. Prince Bazar serves only 4% of the entire

market.

Reason For selection of Super markets

Figure: Pie chart on 25 respondent’s reason for super market selection



It is visible that for selecting certain supermarket location is the most important factor having

relative importance of 36%. Secondly there is competitive price having relative importance of

24% and then comes the quality of the product having relative importance of 21%. So these

are the important factors consumers consider while selecting a certain super shop.

References:

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2007). Supply chain logistics management.

New York: McGraw-Hill/Irwin.

Boehlje, M., L. Schrader and J. Akridgel (1998) Observations on formation of food supply

chains. In: Proceedings of the third international conference on chain management in the

agribusiness and the food industry edited by G. W. Ziggers, J. H. Trienekens and P. J. P.

Zuurbier. Wageningen: WHO PUBLISHED.

Drickhamer, D. “Value-Chain Management Moves from Dream to Reality.” Industry Week,

April 2002.

Farina, E.M.M.Q., and T. Reardon (2000) Agrifood Grades and Standards in the Extended

Mercosur: Their Role in Changing Agrifood System, American Journal of Agricultural

Economics, 82(5): 1170-1176.

Handfield, R. B. and E. L. Nichols (1999) Introduction to supply chain management. N.J.:

Prentice Hall.

Kurt Salmon Associates (1993) Efficient Consumer Response: enhancing consumer value in

the grocery industry, Washington DC: Food Marketing Institute.



Lambert, D. M. and M. C. Cooper (2000) Issues in supply chain management. Industrial

Marketing Management 29: 65-83.

M. A. Taslim, 2009-http://opinion.bdnews24.com/2009/12/08/off-the-markbackward-

linkages-and-high-value-products/

Narayanan, V. G., & Raman, A. (2004). Aligning incentives in supply chains. Harvard

Business Review, 82(11), 94−102.

Supply Chain Council (2007). Supply chain operations reference model 8.0. Retrieved from

http://www.supply-chain.org


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