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ACKNOWLEDGEMENT

At the very outset I would like to pay my solemn gratitude to the “Almighty Creator ’’who has
turned all of my efforts into an end. I am really indebted to my honorable teachers. It is not only
my own credit in this endeavor. I would like to extend my sincere regards & gratitude to my
honorable teachers whose kind’s guidance and assistance have enabled me to prepare this report.
I would like to express my deep appreciation & sincere gratitude and profound respect to our
honorable sir, Md. Abdul Mannan khan, Assistant Professor, Department of Accounting &
Information Systems of Bangabandhu Sheikh Mujibur Rahman Science & Technology
University for his generous help, valuable guidance and useful suggestions in preparation of this
report. Sincere thanks to my friends who had given me necessary supports.
Finally, I am really grateful to all who have helped me directly or indirectly by providing the
information I had sought from them. I strongly say that without their helps it would be difficult
for me to prepare this report within this short time.
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Executive Summary

Supply chain management is the handling of the entire production flow of a good or service
starting from the raw components all the way to delivering the final product to the consumer. To
accomplish this task, a company will create a network of suppliers (the “links” in the chain) that
move the product along from the suppliers of raw materials to the organizations who deal
directly with users. In commerce, supply-chain management (SCM), the management of the flow
of goods and services, involves the movement and storage of raw materials, of work-in-process
inventory, and of finished goods from point of origin to point of consumption. Interconnected,
interrelated or interlinked networks, channels and node businesses combine in the provision of
products and services required by end customers in a supply chain. Supply-chain management
has been defined as the "design, planning, execution, control, and monitoring of supply-chain
activities with the objective of creating net value, building a competitive infrastructure,
leveraging worldwide logistics, synchronizing supply with demand and measuring performance
globally.
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OBJECTIVES OF THE STUDY

The main purpose of the industrial tour is to acquire knowledge about the textile industry and
find out the consistency and inconsistency between theoretical practical knowledge that we
acquired from an industry that is live. We also try to adjust with the gap to be competent at the
modern job market.

The areas on which we will give emphasis are:

1. To know about the Activities of Al Hamedi Textiles Limited.
2. To know about the profile of Al Hamedi Textiles Limited.
3. To know about the Supply chain management, Production and products of the Al
Hamedi Textiles Limited.

METHODOLOGY OF THE STUDY

This industrial tour is conclusive as well as descriptive in nature. Necessary statistical tools have
been applied to carry out the assigned study.

• A visit to the industry’s to know the supply chain management of the Al Hamedi Textiles
Limited.
• Making a formal question to the company officials.
• Discussion with high officials.
• Practical experience gained by studying.
• Finally, the collected data are classified, tabulated, interpreted, analyzed and Presented in the
form of research report thereafter.

SOURCE OF DATA

 Published books, govt. publication.

 Annual report of Al Hamedi Textiles Limited.
 Recent report.
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Limitation of the Study

I tried my best to collect the maximum information from Al Hamedi Textiles Limited. But this
report is not free from short faults. While me preparing this report I faced some problems. These
are as follows:

• My industrial tour is for only one day that is not enough to make a study successfully.
• Lack of adequate time also caused some constraints to my study.
• The rate of success of my study may be limited, as we may have failed to collect proper
information due to lack of our experience.
• Some data could not be collected for their confidentiality and official secrecy.
• Time is not sufficient for such type research.
• It is very difficult to discuss their marketing practices in separately.
• My personal limitation also contributes greatly in making the study less perfect then desired.

I, therefore, hope that the study will be evaluated subject to the recognition of the above-
mentioned shortcomings.
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Abstract
The Textile industry is a long chain including raw materials production; complement production,
clothing production and so on. SCM concept is made possible as a conventional management
tool for all manufactures are to strive to improve their product quality, to reduce their product
and service cost and to shorten their product delivery and response time in a highly competitive
market. This study addresses a descriptive study on the current scenario of Textile industry in
Bangladesh. This paper demonstrates above mentioned scenario in terms of supply chain
management (SCM). The textile industry, an important segment in Bangladesh’s manufacturing
industry, play a critical role in its economic development. The textile sector fulfils almost cent
percent domestic demand apart from the fulfilling the external demand of clothing and apparels
to a large extent in Bangladesh. The Textile industry is a long chain including raw materials
production, complement production, clothing production and so on. SCM concept is made
possible as a conventional management tool for all manufactures are to strive to improve their
product quality, to reduce their product and service cost and to shorten their product delivery and
response time in a highly competitive market. This research developed based on the secondary
data, including online databases, journals, review papers, etc. The effective SCM of textile
industry include lower inventories, lower costs, higher productivity, greater productivity, greater
agility shorter lead times, higher profits and greater customer loyalty. This paper encompasses
the constraints of textile industry in Bangladesh, including ineffective communication,
invisibility of SCM, long lead time, etc. which would unlock further research to develop this
sector.

Key Words: Supply Chain Management, Supplier, Manufacturer, Customer.

Introduction
Supply chain management (SCM) is the oversight of materials, information, and finances as they
move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply
chain management involves coordinating and integrating these flows both within and among
companies. It is said that the ultimate goal of any effective supply chain management system is
to make products available when needed. The overall objective of the supply chain management
is to reduce the lead time and cost of the product. The elements of the Supply Chain
Management includes informational sharing of demand, efficient planning and management of
logistics, transportation of raw materials, availability of better infrastructure of roads and
railways, availability of proper warehouses to store goods, inventory planning and controlling for
optimized solutions, availability of enhanced maritime physical infrastructure, highly efficient
planning and controlling of ports and shipments. These all elements contribute to lower the lead
time of the value chain and also the associated cost.
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Supply chain management flows can be divided into three main flows:
• The product flow
• The information flow
• The finances flow.

The product flow includes the movement of textiles from a supplier to a customer, as well as any
customer returns or service needs. The information flow involves transmitting orders and
updating the status of delivery. The financial flow consists of credit terms, payment schedules,
and consignment arrangements. Supply chain management systems help in reducing inventories,
operational costs, compress order cycle time, enhance asset productivity as well as increase the
companies’ responsiveness to the market. Besides from these benefits, the apparel industry is
able to achieve quick response through efficient supply chain management practices. Quick
response is a concept pertaining to the collaboration and sharing or information among
manufacturers, suppliers and distributors, allowing them to respond more rapidly to the needs of
the Customers.

Textile industry is a long chain including raw materials production, complement production,
clothing production and so on. So it really makes sense to apply supply chain management to
Textile Industry. Supply Chain Management in Textile Industry is not only a new concept, but
also the weakness. However, it is the edge tool for textile industry to enhance its competence.
What’s more, it is the important stage for our textile industry to advance and upgrade its position
in global industry chain. Outsourcing is one the major trends in business for reducing cost and
allows business to concentrate on the core business. Organizations outsource when they decide to
buy the products they had been making in house.

Background of the Al Hamadi Textiles Mills Limited

Basically Al Hamedi Textiles Limited receives order from their customer. They export most of
their product in USA that is almost 99% of total production. USA, Australia and some other
European countries are their customer .Al Hamedi textiles Limited import raw material from
India, Vietnam, and China.

Company Information
AL- Hamadi Textiles Mills Ltd.
Name AL- Hamadi Textiles Mills Ltd.
Founding Year 1987
Membership No A- 04
Primary Information Year of Membership 1991
Business Type Textile

Name Fayej Ahamed Dipu

Contact Information Position Manager (HR & Admin)
Mobile No 01730-025072
Email dipu@aht-bd.com
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Address Plot: 44 & 45, sector: 01, Road No- 4-5,

C.E.P.Z. Chittagong.
Factory Category -----------
Office & Factory Information Phone No 880-741319,741009.
Fax No 88-031-800158
Email dipu@aht-bd.com
Web Address ------------------

Production Type Order Based

Production & Raw Materials
Information
Production Capacity ------------------------
Total Machines 46 from China, 10 from Pakistan and
Australia
Employee 980. 70% of female and 30% of male
Supply Chain Direct Channel
Major Customers Australia, Europe, USA, Medline
Core Raw Material Cotton
Raw Material Import India, Vietnam, China
Yearly Turnover ------------------

Top products

 Towels
 Cotton
 Bath
 Bath Towels
 Cotton Terry.

Top HS Codes

 HS 63 - Textiles, made up articles; sets; worn clothing and worn textile articles; rags
 HS 48 - Paper and paperboard; articles of paper pulp, of paper or paperboard
 HS 52 – Cotton.
Values of AL- Hamadi Textile Mills Ltd

 Honesty
 Passion
 Creativity
 Teamwork.

Mission
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To make continuous improvement in the existing product and service to the customer on timely
basis.
Vision

Contributing to the country’s economy with sustainable growth by producing top quality towel
products within 2020.

Supply Chain Management of Al Hamedi Textile mills Limited

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. Supply chain
activities transform natural resources, raw materials and components into a finished product that
is delivered to the end customer. The supply chain process for manufacturing and service
industries started with suppliers, manufacturers, distributors, retailers, customers and suppliers,
service providers, customers and end with consumers respectively. The customers are the most
vital focal point of the supply chain, since the primary purpose of the existence of any supply
chain is to directly or indirectly satisfy customer needs.

In every manufacturing organization, for their working purpose they follow the basic supply
chain. The following diagram is the basic supply chain for manufacturing organizations.
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Supplier
Fabrics, Accessories, Packaging producers are defined as supplier in textile industry. All the
fabric items can be sourced from around the world but most of the time accessories and
packaging item procure locally. Al Hamedi textiles Limited import raw material from India,
Vietnam, and China.

Manufacturer
Basically Al Hamedi Textiles Limited receives order from their customer. They export most of
their product in USA that is almost 99% of total production. USA, Australia and some other
European countries are their customer. They produced their product on order basis. For this
reason they collect raw material from supplier for production purpose. Manufacturer stored this
raw material as an inventory. Manufacturer Process the raw material through their own
production plant and produced finished goods according to the order which is received from the
customer.

Customer
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(a) Customer Phase 1: Merchandise organization or buying house. In fact, all the
merchandise organization and buying house working as a middleman between buyer and
garments factories and for this service, they earn commission.
(b) Customer Phase 2: Retail Branding Owner (RBO)-H&M, M&S, Tesco etc. All the
garments brands are in this phase. They are the main buyer and acted as a customer and
they merchandise all the garments and distribute it through DC to available for
consumers.

Ultimate Buyer
Consumer (who buys the product for ultimate use) is the most vital point for value chain in
textile industry. All the works have been done for meeting the consumer needs. In this supply
chain, there is another part that provides the service & worked as helping hand for the
manufacturing organization.

Service Provider
Bank, washing centers, printing centers are the service provider.. The entire service providers
also act as a vital part in the value chain. Because all the banks are related with LC, export-
import process, washing plants use for washing the garments, all the printing centers works for
printing design or logo label in the textiles.

Supply Chain Decision

There are four major decision areas in textile supply chain management: 1) location, 2)
production, 3) inventory, and 4) transportation (distribution), and there are both strategic and
operational elements in each of these decision areas.

Location decisions

The geographic placement of production facilities, stocking points, and sourcing points is the
natural first step in creating a supply chain. The location of facilities involves a commitment of
resources to a long-term plan. Once the size, number, and location of these are determined, so are
the possible paths by which the product flows through to the final
customer.

These decisions are of great significance to a firm since they

represent the basic strategy for accessing customer markets, and will
have a considerable impact on revenue, cost, and level of service.
These decisions should be determined by an optimization routine
that considers production costs, taxes, duties and duty drawback,
tariffs, local content, distribution costs, production limitations, etc.
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Although location decisions are primarily strategic, they also have implications on an operational
level.

Production decisions

The strategic decisions include what textiles to produce, and which plants to produce them in,
allocation of suppliers to plants, plants 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 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.

Inventory decisions

These refer to means by which textile inventories are managed. 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 to buffer against any uncertainty that might
exist in the supply chain. Since holding of inventories can cost anywhere between 20 to 40 per
cent of their value, their efficient management is critical in supply chain operations. It is strategic
in the sense that top management sets goals.

However, most researchers have approached the management of inventory from an operational
perspective. These include deployment strategies, 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.

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. While transportation by sea or rail is cheaper, it necessitates 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 per cent of the logistics costs, operating efficiently makes good
economic sense. Shipment sizes (consolidated bulk shipments versus Lot-for-Lot), routing and
scheduling of equipment are key to effective management of the firm's transport strategy.

Conclusion
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The textile industry has played an important role in Bangladesh’s economy for a long time.
Currently, the textile industry in Bangladesh accounts for 45 percent of all industrial employment
and contributes 5 percent to the total national income. The industry employs nearly 4 million
people, mostly women. A huge 78 percent of the country’s export earnings come from textiles
and apparel, according to the latest figures available. Bangladesh exports its apparel products
worth nearly $5 billion per year to the United States, European Union (EU), Canada and other
countries of the world. It is the sixth largest apparel supplier to the United States and EU
countries. Major products exported from Bangladesh include polyester filament fabrics, man-
made filament mixed fabrics, PV fabrics, viscose filament fabrics and man-made spun yarns.
Major garments exported include knitted and woven shirts and blouses, trousers, skirts, shorts,
jackets, sweaters and sportswear, among other fashion apparel.

According to review of current picture of textile industry in different countries, it is visible to us

that textile sector has significant role to improve our economical growth in Bangladesh.
Delivering the finished products on time from suppliers to customer would be possible through
the proper application of supply chain management. In order to improve the business operations
in terms of some factors including fluctuation of inventories, inventory stockouts, late deliveries,
quality problem, etc., SCM is essential for manufacturing industries. Successful supply chain
management requires effective communication, supply chain visibility, event management
capability and performance metrics. It also requires coordination of activities and information
sharing among supply chain partners at three decision levels, namely strategic, planning,
operating levels. This research developed modified supply chain model for textile industry in
Bangladesh by adopting outsourcing to reduce the cost and concentrated on core business.