SL. No.

: To Be Assigned by ISCEA

2017 ISCEA Ptak Prize

Team: BUET-0104-17

Team Member -1 Team Member - 2

Name : Naimur Rahman Chowdhury Name : Farzana Islam Tamanna

Signature : Signature :

Team Member - 3 Team Member - 4

Name : Shoyeb Raihan Dipto Name : Sampa Halder

Signature : Signature :

Last Date of Submission: May 21, 2017

 INTRODUCTION AND OVERVIEW:

Bangladeshs economy is the second fastest growing major economy of 2016 (Dec), with 7.11
percent GDP growth rate where the growth rate was 6.12 percent in 2015. Export earnings are
having major contributions in this high GDP growth rate which are dominated by the RMG sector.
But things have become a bit different in the past few years. Are not we becoming too much
dependent on only one export sector?
It has been found out that export contribution to GDP is actually declining over the last four
years.

BREAKING DOWN THE MAJOR ISSUES:

Bangladeshs export earnings are driven by Garments sector which contributes more than 10% all
by itself to GDP. This is actually a very big percentage. This sector produces mostly basic and low
rate products. We are giving way too much attention to only one sector where the other resources
are going unnoticed.
Besides, as the time is going by, the Garments sector is facing more and more drawbacks. These
are mainly caused by:
RMG industry is facing increasing competition from Vietnam, India and Pakistan. Recently
the value of garments exported out of India has just surpassed our garments export.
Because of incidents like Tazreen fire, Rana Plaza collapse, political unrest foreign
investors are less and less interested in investing in our country. Many investors have
already stopped doing business here.
Also the Trans-Pacific Partnership Agreement (TPP) and the withdrawal of generalized
system of preference (GSP) by America in 2013 have caused significant problems. Besides,
after Brexit Bangladesh garments will not automatically enjoy duty and quota free access
in the UK market as was the case when the country was a member of EU.
Moreover, the continuous riot of the workers, transportation issues, corruption etc. are
continuously creating adverse effects in Garments sector.
Clearly, it is time that changes should be made. The government has to concentrate on export
diversification now if we want to see Bangladesh enlisted as the new Asian Tiger. Obviously
export diversification is the main goal. But only by diversifying the export will not help. At the
same time the overall business infrastructure must be improved unless diversification alone cannot
change things much. Now improving the infrastructure is certainly going to be challenging. After
choosing the new export products to create diversification there are some factors which must be
gone through properly. These act as catalysts and once ensured will guarantee success. These
sidekicks are:
Improving the transport
Ensuring political stability
Ensuring the rights of the workers
Decreasing the Lead Time
Reducing corruption
Improving government-investor relation
Presence of skilled employees
Improving customs procedure

With a view to reaching the growth rate of 8% by 2020, it is much needed now to establish a
ministry of supply chain management as soon as possible. This ministry will supervise the
entire export system of the country through SCM. The ministry will be responsible in swiping
away all the factors causing impediments, it will drive out the bottlenecks in export sector.
Investigating the current business situation across the globe, this ministry will provide information
to the investors and entrepreneurs. Finally, it will encourage, furnish support and smoothen the
way so that the investors can run their business conveniently.

What the possible diversifications could be:

Analysing the market conditions, some potential export goods have been identified which could
successfully capture the market. These are the Highest Priority Products:
Agro-products and agro-processed products.
Light engineering products (Including auto-parts and bicycles).
Leather and footwear products.
Pharmaceutical products.
Software and ICT products.
Home textile.
Toiletries products.

Now, to watch Bangladesh emerge as The New Asian Tiger, there has to be something that
would investigate to promote these exports and speed up the whole process, therefore, a
formation of a new ministry is needed which will carry out the required functions and processes
in its own way.
 GENERATING THE POTENTIAL SOLUTION:
FORMATION OF MINISTRY OF SUPPLY CHAIN

For maintaining the brand promise of becoming The New Asian Tiger, the Ministries under
Bangladesh Government have already been working on the rapid progress in the economic sectors
involving all the flagship exports and their aspects of gaining momentum in the process. However,
Th reason of still having the negative balance in the total trade in Bangladesh is not bringing all
the departments in a common platform. For that the generation of Ministry of Supply Chain has
become a mandatory, which will incorporate with all the related ministries in formulation and
administration of the rules, regulations and laws relating to all the trades in order to optimize the
whole supply chain process in the country as well as in overseas.
THE COLLABORATIVE APPROACH OF

SUPPLY CHAIN MINISTRY

In this collaborative process Ministry of Supply Chain will conduct following actions:
1. Developing new strategies, policies and plans to enhance the Cross border and internal
supply chain in Bangladesh.
2. Focusing on renovating and developing new infrastructures to accelerate the supply chain
capabilities in Bangladesh with the help of related Ministries.
3. Generating measures to bring innovations in all the supply chain drivers (mostly focusing
on inventory, transportation and information flow)
4. Accelerating and promoting exportation of goods with high opportunities to reach the
apex in the trade market and thus rebranding Bangladesh with rapid supply chain of
various exports.
5. Introducing IT in all the factors of supply chain to create a new paradigm in the trade
procedures of Bangladesh.
 6. Making diverse and more resilient portfolios of the exports as well as splintering their
supply chain.

MINISTRY OF SUPPLY CHAIN:

MEASURES TO BE TAKEN, FUNCTIONS TO BE SERVED AND THE BENEFITS

1.Establishing an integrated Web Supply Chain for the beneficiaries (The Rapid
Flow of information):
To accelerate the flow of information regarding Warehouse Management Systems,
Transportation Management Systems, Enterprise Resource Planning (ERP) platforms and
a myriad of other puzzle pieces of data, the Ministry has to establish an improved information flow
system throughout the country. The task of the ministry is:
a. Connecting all the beneficiaries in a common line with the centralised highspeed
broadband system.
b. Creating the integrated web supply chain for the manufacturers, suppliers and
distributors to help in-
1. Share information about consumer demand.
2. Rapid notifications about adjustment and changes.
3. Increase speed of processing transactions.
4. Reduce cost of handling transactions.

2. The Ministerial Procurement Benefits: In order to accelerate the Process integration

for the suppliers, manufacturers, distributors and retailers, with the help of other ministries
supply chain ministry will establish policies. Major decisions include:
 Customer Procedures Simplifications: Eases customer difficulties in exporting
goods from the countries. Introducing online export licencing for the retailers,
integration of promoting portfolios for different manufacturers, online join
venturing for licenced manufacturers.
Online Property Registration system: with the help of Ministry of Industry an
online platform for the licenced merchandisers will be introduced to register valid
properties and minimise the time.
Removing red tape: in order to expedite to start a business and minimise the
required time.
Issuing construction permits through internet: To minimize the total procedure for
licenced organisations.
Contract Enhancement: Policies to enhance contract under a sponsored agenda.
Faster permission to install small warehouses: totally bringing under online
process to fasten the procedures.

3.Establishing The Supply Chain Research and Geopolitical Support Centre:

Ministrys specialised branch to research on the optimisation of transportation, minimisation in the
lead time and inventory management. Under the department any organisation high end to low end
will get supports on their:
Location and Transportation decisions.
Production decisions
Inventory control
Distribution strategies
Supply chain integration
Access to the research centre for all the parties will be equal and free.
The Geopolitical support centre will help the suppliers and retailers to associate with regional
powers to integrate the trade.

4. The new dimension of logistics framework by supply chain ministry:

In association with ministry of road, transportation and highways, the supply chain ministry is
going to segment the logistics system throughout the country to reduce the lead time of products
supply and also optimise the whole process. This starts with emphasising on the transport system
of core three zones of export goods:
To reduce the shipping time among these areas innovations should be brought with:
System Digital Traffic Signal: By putting sensors in road which can detect the density
of transports in roads and works accordingly to that.
Changes in Railway system: Since 32% of overall area in Bangladesh is covered with
railway Ministry would plan to facilitate the system by
1. Increasing locomotives, wagons there is enough chance to increase
revenue.
2. Establishing double line in most of the long distant communication
from Dhaka.
Promoting Air shipment: there are 13 operational airports and Short Take-off and
Landing (STOL) ports in Bangladesh, so, Air cargo and STOL services should be
handed over to the private sector by the ministry and improve them by
o Designing an effective share data platform that allows for the seamless sharing of
data globally.
o By meeting customer demands for swifter deliveries is to leverage existing e-
freight technology.
o Upgrading GPS solution to track the location of shipments.

5. Rebranding Bangladesh through Branded Supply Chain:

Rise of The New Asian Tiger, the brand promise of Bangladeshs rapid economic growth is
mostly depending on the Dynamic Supply Chain process of the exports. The ministry besides
generating potential solution to enhance the capability of the process, they need to brand the Rapid
supply chain in the world market to attract investors of overseas. This process includes:
Establishing the Branded Supply Chain division to collectively brand the rapid supply
chain process of Bangladesh.
Branding export products that have high opportunities to reach the peak in near future
with the motto Low Tariffs, Fast Supply Chain.
 Supporting different world forum conferences to give an overview of the
multidimensional supply chain of Bangladesh.

6. A new framework for managing inventory:

The ministry of SCM will have an inventory management department which is one of the most
essential assets of business operation. It has a complicated feature since our model includes cross
border supply chain dealing with different countries and multiple warehouses.
The main motto of this department is to minimize the inventory cost. This inventory cost if
optimized can really cause a significant increase in total gain. To do so, this department of
inventory management under the ministry of SCM has undertaken these following measures:
1. Inventory Forecasting:
2. Scheduling supply:
3. Re-evaluate lead times:
4. Introduction of the cloud system (Cloud based ERP platform establishment policies)

To summarize the role of inventory management department in supply chain ministry, a flow
chart is given below showing the framework:

Analyzing the existing supply chain

Classify suppliers and products

Evaluate inventory cost of existing chain

Modify existing chain

Evaluate the new inventory cost

New cost <existing

cost NO

YES
Integrate customer values to the chain

Strive for continuous improvement

 FORECASTING GDP ( THE IMPACT OF SUPPLY CHAIN MINISTRY)
(Amount in Crore Taka)
Updated Budget Plan(2018/19) Plan(2019/20)
forecast(2017/18) estimate(2017/18)

Revenue Import Duty 14669 15027 15413 15859

Export Duty 31 33 37 41
Total revenue 14700 15060 15450 15900

Expense Collaboration (13980) (14340) (14725) (15190)

Logistic
planning
IT expenses
HRM & CRM
expenses
Branding
Surplus before forecast 720 720 725 710
allowance
Forecast allowance (250) (350) (350) (350)
Surplus 470 370 375 360
Economic Real GDP 2.42% 2.45% 2.59% 2.91%
forecast Growth
Nominal GDP 2.49% 2.58% 2.68% 3.12%
growth

This can give a clear visualization that The SCM ministry would definitely boost not only the
dynamic progress in supply forecast but also the GDP contributed from the export and trade
processes.

Financial Assistances the ministry is going to provide for these

Highest Priority sectors:
Since the ministry believes that these Highest Priority products will be the successful alternatives
to the Garments sector, so it will provide some benefits and facilities to these sectors to
encourage the investors and entrepreneurs. These are:
Business loans at reduced interest rates.
Income Tax exemptions.
Call centre to answer any query, provide suggestions.
Possible financial benefits or subsidies consistent with WTO agreement.
Export loans with soft terms and at reduced interest rates.
 Air transport facilities at concessionary rates.
Duty draw-back facilities.
Assistance in production and marketing.
Assistance in searching foreign market.
Necessary initiatives to attract foreign as well as local investments.

The Big Ideas the Ministry Will Implement:

Along with the other tasks, the ministry of SCM will develop and implement these ideas to
expedite the entire process even more. These ideas and plans are comparatively newer and also
unique.
There will be call center for customer services where the keen investors, individuals can
obtain valuable information. The call center will be equipped with employees having
sufficient knowledge so that they can satisfy the customers queries.
Training programs will be organized, seminars will be arranged monthly or at least once in
every two months. It is highly believed that these will be able to bring out more and more
investors and create interest in the minds of individuals as well as boost them up with
courage and confidence so that they can emerge as future investors, entrepreneurs.
Double Taxation Avoidance Agreement (DTAA) can be implemented with other nations.
This will serve two purposes, (i) Reduce the cost while exporting goods and (ii) Draw in
foreign investments.
There will be a website which will contain essential and updated information and the
investors will have free access to it. They can obtain information such as current demand
of other nations, current market price of products. Knowing these they will know what
quantity of products to be produced and adjust cost of production. Besides, the investors
will get the government services online. This will prevent unwanted time loss.
The ministry will be working to reduce the regulatory burden on entrepreneurs. These
include granting permits more quickly or even automatically and making greater use of
digital technology.

Finally, we can conclude that the working principles of the ministry of supply chain management
may be somewhat sophisticated but once established it can bring radical change in our economic
growth. Proper implementation of the process prescribed by this ministry will eventually make our
dream come true; there is no doubt in that. And then Bangladesh can proudly come forward as
The New Asian Tiger making a grand entrance to the modern world.