Supply Chain Management system of ‘Aarong’

1. Introduction:

In today’s competitive world of Business competitive advantage can be gain by proper information system and developing that information system. Aarong information system is a sign of the modern business organization of Bangladesh. Supply chain management is the streamlining of a business' supply-side activities to maximize customer value and to gain a competitive advantage in the marketplace. Supply chain management (SCM) represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible.

Supply chains cover everything from production, to product development, to the information systems needed to direct these undertakings.

1.1. Background of the study:

Aarong emanated from BRAC’s core mission of alleviating poverty and empowering people. In the 1970s, BRAC was examining any and all possibilities for alternative forms of productive livelihood, especially for women, and the proper commercialization of art and crafts turned out to be a promising option. In December 1978 when BRAC decided to open its own retail outlet under the brand name Aarong, meaning ‘village fair’, it broadened its arms to include other artisans and master craftsmen throughout Bangladesh who were involved in the making of handicrafts for generations, and were finding it extremely difficult to survive in the newly formed country.

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Ever since then Aarong has been helping to establish market linkages for rural artisans, revive crafts and interpret them for the contemporary marketplace.

1.2. Objective of the Study:

The main objective of the report is to find out the supply chain management system of Aarong by using Management information system.

The main objectives of these reports are,

1. To know Aarong’s information system
2. To know how they use MIS for supply chain management
3. To know the organizational structure of Aarong
4. To know the product promotion of Aarong
5. To know their office management
6. To know the communication structure of Aarong for the management of supply chain.

1.3. Limitation of the Study:

In every research work there exist some limitations that the researcher faces while conducting different activities. In the process of research work, we also come across certain limitations that hampered the actual findings and analysis of our research work. Some of limitations can be identified are: 1. Employees of Aarong are usually busy with their daily work and activities, so it is quite impossible sometime to get time from them for getting information about our report. 2. Sometimes the authority does not provide their internal information which is very difficult to collect from any other sources. 3. This is quite difficult to collect all the data of supply chain management of Arong by using Management Information System.

2. Methodology of the study:
Methodology is the life blood of a report. The methodology of these report’s are,
2.1. Data collection technique:
1. Questionnaire: A structured questionnaire was asked to the different people of different areas where the Aarongs super store is situated. 2. Observation: we were visited Aarong’s Mohammadpur Branch and observed their products prices and their shop’s environment. 3. Secondary information: secondary information has collected by reviewing websites, Journals and some other relevant documents.

2.2. Sources of Data Collection:
1. Primary Source: the primary information is gathered through informal interviews of the employees working over there under management level, their salesman who are directly involved with selling product and also observation while visiting the office premises. 2. Secondary Source: Secondary sources had also used to collect information. Secondary sources include: a. Features and articles published in newspapers and other journals. b. Visiting website of Aarong super store.

3. Current Scenario of Aarong:
Today, Aarong's reach has spread from where it started, Manikganj, to the rest of the country. From a single shop, Aarong has grown into one of Bangladesh's biggest retail chains offering one-stop shopping experience through 10 stores spread across the major

Metropolitan areas of the country - in Dhaka, Chittagong, Khulna and Sylhet and one in London, UK. Aarong showcases over 100 product categories from clothing to household items, gifts and fashion accessories to children’s toys, ethnic wear to beautiful crafts, from silks, handloom cotton, Endi to Terracotta, bamboo, jute and much more. Aarong also plays the role of protector and promoter of traditional Bangladeshi products and designs. It houses an extensive design library where remnants of our rich craft heritage, such as Nakshikantha art and Jamdani patterns, have been widely researched and archived for present as well as future use.

3.1. Aarong’s Mission:
Aarong’s mission is to help sustain rural craftsmanship and find a wider market for their product nationally and internationally.

3.2. Aarong’s Vision:
Aarong has one outlet in London and exporting to other countries of North America, Europe and some Asian countries. Because of migrating Bangladeshis in those areas, they are targeting to make more franchising activities in those North American and European region. They basically are targeting those activities after fulfillment the customer demand in domestic market.

3.3. Products of Aarong:

Some products picture is given below.

4. Aarong’s Supply Chain:

Figure 1: Supply chain system of Aarong
Aarong’s supply chain is the movement of materials as they flow from their source to the end customer. The whole supply chain of Aarong includes purchasing, manufacturing, warehousing, transportation, customer service; demand planning, supply planning and Supply Chain management. It is made up of the employees, activities, information and resources involved in moving a product from Aarong’s supplier to its customer. 4.1. How Aarong’s Supply Chain Management System is build: Aarong’s supply chain management system is a group of things working together. Computers, fax machines, data storage system, operating personals, procedures for the employees and the most vital components of Aarong’s supply chain management system are its telecommunication system.

Cell phones helped Aarong to create a communication network with every suppliers and transportation partners across the country. All this components work together to provide information to collect products, manage the suppliers, to provide services, create report etc. Different computer software’s are also used in the supply

Chain management of Aarong but the main supply chain management software is developed by Aarong. This software is used for both supply chain planning and to help them to execute the supply chain steps. Aarong has hired trained professionals to operate its supply chain management system and keep updating.

Aarong’s supply chain management system can be divided into two systems. Both of this system is vital for Aarong’s business. 1. Supply Chain Planning System and
2. Supply Chain Execution System.

4.2. Supply Chain Planning System:

Aarong’s supply chain planning helps Aarong to create a model for its existing supply chain, its helps management to measure demand forecasts for different products and develop a way to find best source for meeting those demands and manufacturing plans. Aarong have turned to their customers for help. By communicating directly with customers about what they want and by getting their feedback on existing products, management are able to more accurately understand the needs and wants of their target audiences. With this information, they can make a forecast that reflects customer reality. Furthermore, improved technology has of Aarong made it even easier to get their hands on customer feedback. The Website of Aarong for example, makes it possible for organization to communicate with customers in real-time, so they can then use the data immediately in their forecasts. Aarong has developed a central database for all the information and it gives access to suppliers and partners.

These technology improvements along with real-time customer feedback have made it possible to more accurately predict revenue, profit, and sales in the near future. More accurate planning means that Aarong can work together with their vendors and distributors to outline a plan that makes sense based on those forecasts so that no one is put into a negative situation. Overall, supply chain planning is a critical component of Aarong’s supply chain management. Without accurate planning abilities, businesses end up cutting into their revenue unnecessarily and possibly putting vendors and distributors into difficult situations that may strain the supply chain relationships in the long run.

4.3. Supply Chain Execution System:

Aarong’s supply chain execution system is mainly consists of its transportation partners. They manage the flow of products though distribution centers and warehouses to ensure the products are delivered to the right locations in the most efficient manner. Aarong track the physical status of goods, the Management of materials, warehouses, transportation operations and financial information involving all parties.

4.4. Aarong’s Supply Chain Management Process:

1. Planning: Aarong’s supply chain management planning starts at the top of the management. Management tries to balance out the demand and supply to meet Aarong’s sourcing, production, delivery and return requirements.

2. Sourcing: Aarong has large pool of sources to meets it supply. As the demand requires suppliers come up with raw materials and goods. Then it creates a product which we can exploit.

3. Making: Co-operatives comes up with final goods and they deliver them to the final processing section of Aarong. The goods or products are ready to use for the customers.

4. Delivering: Aarong’s delivering process is managed by its own transportation. Aarong directly distributes its product to the consumers. Their job is to distribute shipments properly. “Just-in-time” is followed in delivery process.

5. Returning: Return process is consisting of product returns and post delivery customer support which is done by Aarong. Generally Aarong obtained their products to their consumers within 30days.Its also includes Aarong’s return process.

6. Logistics: Aarong’s top level management plans, supportive relation to their consumers and control of all other factors that have an impact on the supply chain. 4.5. Aarong’s Supply Chain Management Information Flow:

Information flows from customers to Employee or from employees to operating personnel in the information system. Then information goes to the floor manager. Floor manager shows it to the consultants of Aarong. Consultant shows it to the top level management of Aarong. Top level orders its suppliers to modify, improve or create product to meet the customer demand.

4.6. Managerial Skills:

Aarong has trained operating personnel for its accounting department and website. Operating personnel job is to maintain the information system and repair if any error ever occurs. Aarong’s operating personnel are highly qualified in their job sectors. Aarong’s information system is designed to be employee friendly. Employees do not have to know lot about technology to operate its regular applications. Its information system is very secure. Employees strictly follow all the principled rules. All customers’ orders, addresses or any kind of information is remaining private. Accuracy is practiced and monitored by operating personnel’s. Access of employee information is strictly forbidden. So Aarong has the ability to adjust technology strategy alignment to accommodate the use of IT and manage business process. The Internet has emerged in the recent past as a dynamic medium for channeling transactions between customers and firms in virtual marketplace.

In particular, the World Wide Web has emerged as a powerful new channel for supply chain, rendering many intermediaries obsolete, and drastically revamping the value chain. So Aarong has taken the opportunity to expand its business through net. Aarong’s employees can see as an asset for this kind of expansion. But in our country the growth in e-business seems slow although internet is challenging the traditional supply chain structures that firms have employed to get goods and services to market. Aarong has re-evaluated their value proposition to customers, and meet the challenges of more nimble rivals. Aarong seems to be one of the organization which is interested provide online based order and information system to its customer. So Aarong has a very dazzling managerial skill in internet based supply chain.

4.7. Aarong’s performance improvements by Supply Chain Management:

4.8. Competitive Advantage of Aarong’s Supply Chain Management System: 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.

5. Graphical Analysis:

A structured questionnaire was asked to the different people of different areas where the Aarongs super store is situated. We surveyed this questionnaire of Aarongs employees and gather much information about supply chain management. On this basis we made some graphical chart for showing some important issue.

5.1. Systems are currently used in Aarong:

For the calculation see Table no: 2 at page 19

5.2. Facing the problems below when using these systems:

For the calculation see Table no: 2 at page 19

5.3. Competitors Analysis of Aarong:

Aarong has competitive advantage over its competitors on almost every factor. Only few companies have ability to chase some sort of advantage like Aarong. Such as qualities and innovativeness, Kay-Kraft and Anjan’s supplier, Rang’s color and Khubsoorti’s cost. Aarong has gain competitive advantage through its supply chain management system. Aarong has a vast network system with its thousands of suppliers and manufacturers which gave Aarong superior production and resource allocation power. Competitors do not have power that can match Aarong’s production capability so they are losing shelves. SCM keeps track of its supplier and its inventory properly so there less costly and hustle free for the employees. Performance of service has increased more than its competitors so there are more satisfied customers of Aarong.

6. Conclusion:
There is a reason why Aarong is at the forefront of the urban fashion-scene. Their innovative clothing line fuses ethnic wear with global trends using traditional Bangladeshi materials. Aarong is a support enterprise of BRAC. A significant portion of their earnings are invested towards improving the socio-economic standards of disadvantaged artisans and underprivileged rural women of various communities. Aarong organizational vision will be achieved smoothly and that is the women will be empowered through “grass-root level women entrepreneur development” and this empowerment will change the overall scenario of economic condition.

7. Recommendations:

With multiple stores in Dhaka, Aarong is a leader in superstore retail organizations. The combination of quality and price under various brand name offers customers value for their money. We have examined and evaluated the operations of Aarong. We recommended the following in to order to ensure continued success for the future of all Marks and Spencer stores. 1. Find alternative sources to marks and Spencer stores abroad. 2. Increased marketing efforts.