Assignment On Supply Chain Management System Of Aarong

                                            Executive Summary

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. Aarong is a chain of retail outlet located in major cities in Bangladesh an enterprise of BRAC. It established in 1978, Aarong is a fair trade organization dedicated to bring about positive changes in the lives of disadvantages ascertains and underprivileged

rural woman by reviving and promoting their skills and craft. Reaching out to weavers, potters, brass workers, jewellary, jute workers, basket weavers, wood carvers, leather workers and more, Aarong, to embraces and nurtures a diverse representation of 65000 artisans work with the collaboration of 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 nation’s handicraft industry on a world platform of appreciation and acknowledgement. Aarong’s supply chain management (SCM) is the integration and management of supply chain organizations and activities through collaboration, effective business processes and information sharing with women co-operatives. It has become a great tool for Aarong to deal with competition and increasing customer demand for value. To provide complete satisfaction to its domestic and foreign buyers, the information must be available in real time across the supply chain and this is achieved by Aarong’s integrated software system for supply chain management. Web technologies enable Aarong to become more effective, to trade with suppliers and customers over the Internet in real time. Implementation of the supply chain information systems in Aarong’s facilitates an increase in its competitiveness and profits.

Background:

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

Today’s 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.

Today, few urban consumers will argue that Aarong is the local Mecca for deshi handicraft. Aarong’s product designs has brought consumer attention back to the products and styles that are indigenous to Bangladesh, its designers blending the traditional with the contemporary in a manner that has won instant consumer appeal, starting a revolution in trends that has now been taken up by countless other boutiques and stores. Aarong’s product designs focus on the diverse types and textures of crafts and patterns that have been passed along from generation to generation among weavers and artisans in craft hubs around the country.

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.

Aarong’s Mission:

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

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.

Products of Aarong:         

MEN'S PRODUCTS:

Traditional, Executive Shirts, Maanza , Fotua, Short Kurta, T-shirts,               Stoles/Shawls, Sandal  etc.   

                           

               

WOMEN'S PRODUCTS:

Traditional, Western Nightwear,, Shawls/Scarves,  Shoes, Bags , Fabrics. 

CHILDREN'S PRODUCTS:

Clothes, Toys, Books, Shoes

Others:

Home Textile, Home Accessories, Jewellary, Leather Terracotta Bamboo/Cane/Leaf, Metal, Candles, Jute, Ceramics, Nakshi Kantha, Paper, Wood, Glass

Aarong’s Supply Chain:

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.

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. One is Supply Chain Planning System and another one is Supply Chain Execution System.

1.   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.

2. 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.

Aarong’s Supply Chain Management Process

Plan: 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.

Source: 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.

Make: 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.

Deliver: 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.

Return: 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.

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.

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.

Aarong’s Supply Chain Management Backend incorporation:

Aarong’s supply chain management system can exemplify into Upstream portion where the supply chain includes Aarong’s suppliers or co-operatives, and their suppliers who are the raw material providers Aarong’s. Aarong tries stay connected with the raw material providers through telecommunications. Co-operatives have all sorts of facilities. They stay connected though telecommunication. Aarong’s database is open to its suppliers; it provides them with inventory data. And suppliers also can provide information to Aarong through the web. Because of the real time data availability suppliers are at no harm position when they are dealing with Aarong. There is also Downstream portion consists of the Aarong’s processes for distributing and delivering products to the final customers. Aarong has its own internal supply chain processes for transforming materials, components, and services by their suppliers into finished products or intermediate products for their customers and for managing materials and inventory.

Aarong’s wants to satisfy, so Aarong provides operational data to its highly loyal customers and contractors. Aarong’s big buyers can gain data about their order through Aarong’s website or by extracting data from its database. Aarong’s website provides the progress about orders from foreign buyers. Buyers can also get along about the operational process.

Aarong’s suppliers also have the concession to exchange register data. They are aware of what Aarong wants and the price it’s willing to pay. They also get the cut-off date and operational instruction from website. If anything changes they will know because Aarong’s web application automatically incorporated with back office information system and database which they can easily way in.

Aarong has a central database which is updated by the operational employees. So if any changes come Aarong’s Supply Chain Management will send mail to upstream and downstream suppliers its suppliers.

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.

Aarong’s performance improvements by SCM:

1. Accurate information for suppliers and buyers: Because of the proper Supply Chain Management Aarong gets accurate information. Distort information is a major problem of govt. funded organization but Aarong is different because of its supply chain management.

2. Easily stored data & access: SCM has provided easy way to store data.  Information can be easily stored. This made suppliers and front line employees very efficient about their job.

3. Information sharing through Upstream and Downstream: Without network, information sharing would take lots of time. But in Aarong, can share information very easily with its upstream and downstream partners and suppliers.

4. Work efficiencies: Supply Chain Management System has increased Aarong’s work efficiency.

5. Speed: SCM has increased speed of the work. Employees are working with more speed in Aarong.

6. Proper storage system: Supply Chain Management System gave a proper storage system. Employees can store data and also can see it whenever they want. Suppliers can store data too. Any changes can be seen through website. Customers get big help from that.

7. Report making became very easy: Procurement Managers work became easier with information system. Managers can make their marketing and financial plan more easily.

8. Improved working environment: Through establishing an information system Aarong has developed its working environment. Suppliers do not have to wait for hours for their papers of order.

9. Improvement in Training employees: Power point has improved training programmers for employees.

10. Improved customer satisfaction: Aarong has improved customer satisfaction with its supply chain management system. Customers are more satisfied than before. They are getting what they want. Total 83% customers are happy with Aarong’s customer’s services. SCM has given Aarong chance to customize products.

11. Improved product and service quality:  SCM has improved Aarong’s product and service quality. Customers can get their desired products and better service.

12. Improved Employee Satisfaction: Employee satisfaction has increased. Employees are happy with their work and they are clear about what to do & what not to do.

13. Improved communication: Video and teleconferencing has improved communication in Aarong. Employees can communicate with customers, suppliers and their supervisors more easily.

14. Up to date information: Information is up to date because of the proper data entry. Employees gets up to data to work with which bring efficiency.    

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.

                                                                  

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 Latif’s product features, 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. 

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.

Reference:

www.Aarong.org

www.scribd.com

Business and Information Systems by Robert C. Nickerson