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10th April, 2012 Jannatul Assistant Professor, Department of Marketing Northern University Bangladesh
Subject: Request to accept the Report on Supply chain Process of Vegetables. Dear Sir: Most courteously to affirm that, here five (05) B.B.A students of your section (A), are suggesting their report on Supply chain Process of Vegetable. It gives enormous contentment to notify you that this group has accomplished its report under your kind hearted direct care. Now, they have positioned the report before you for your authorization. Both the members are hopeful that this report will convince you. Sincerely yours, Abdullahhel Kafi Id# 070202322
TABLE OF CONTENTS
Page Number Transmittal letter Abstract Origin of the Report Report Objectives Restrictions of the Study Introduction SCM & its benefits Functions of intermediaries Dependency Supply chain process of vegetable Where vegetable value changes Problems occurred in process Termination 01 03 04 04 05 06 07 08 10 12 14 15 16
Abstract
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 work on their value-added activities. 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 distribution 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. Supply chain development not only benefits the private sector but also creates spin-offs that stimulate social, economical and environmental sustainable development in the region (employment generation, added value, decreases of product losses, etc.). Public support plays an important role to create an enabling environment for private sector development. Public support might take the form of a public private partnership in a supply chain to share experiences, risks and restricted access. In Bangladesh however, supply chain development is often hampered due to lack of governmental support. Institution building, raising awareness, pilot chain projects and the development of toolkit are important activities to foster supply chain development. This paper reviews issues of the development of supply chains for vegetables in Bangladesh.
submitted on December 29th, 2011. Our honorable course teacher Muhammad Saad Imran Noor, Assistant Professor, Marketing Department, United International University assigned the project.
Report Objectives:
This learning titled as Supply chain Process of Vegetables meant at finding out the proper channel & value changing reasons of vegetables. Large Objectives: The wide principle is to find out the process & the reasons of value changing of vegetables in its sully chain management. Precise Objectives: The exact purpose of the report is mostly paying attention on the lessons whether the students are capable of making the ads effectively or not. Working capability To examine the real business sector Finding out the channel number & members Finding out value changing points
1. Introduction
Efficient agriculture marketing is critically dependent on efficient transport system. Inefficient transport service coupled with poor storage, can lead to losses as certain crops (such as milk, vegetable, fish) deteriorate quickly over time. On the other hand many developing countries like Bangladesh suffer from monopolistic, low volume, syndicate, and high cost transport and marketing system. Weak transport and marketing system are hindering agriculture development means country development. On the other hand vegetable are generally more costly to produce per hector than traditional crop. The value or quality of vegetable will decrease rapidly once they are harvested and will keep decaying when being delivered. The revenue of food supplier will depend on the condition of the products when they are received. Thus timely production and delivery of perishable foods significantly affect the suppliers revenue. In this paper it is tried to address present supply chain system of perishable product (especially vegetable) implication, difficulties to change the present system and suggestion for improvement of supply chain.
3. Function of Intermediaries
The important components of marketing functions at the intermediary level are transportation, storage, grading, financing, market information, pricing etc. the functions of the intermediaries in context of vegetables supply chain in Bangladesh.
Transport:
Intermediaries make connection between consumer and producer. They provide transport to carry locally produced vegetables to distant market. They do the all activities involved in preparation for consignment such as crating and loading. Transportation cost by road is high in Bangladesh. Intermediaries use different types of mode depend on the availability.
Storage:
The storage function is primarily concerned with making goods available at the desired time. It creates time utility. Storage requirement is crop specific. Potato and paddy can be stored for many days. But vegetable need immediate transport to market. As vegetable and fruits are perishable, they need proper post harvesting treatment before reaching market. If seller cannot sell their product in same day, they need to storage these products for the following day.
Grading:
Grading is one of the basic functions of intermediaries and it is defined as the classification of product according to some standard on measure. Grading is a determining factor of buying and selling price. Quality is determined by eye estimation. For vegetables grading is done by bairal.
Packaging:
Packaging is an important job of intermediaries. Wastage largely depends on packaging. Packaging materials depends on type of crops. Vegetables are generally packed in bamboo baskets, plastic crates, plastic bags, or nylon sacks for transportation, in Bangladesh. Sometime, they are transported in an unpackaged form. Binding and packaging is mostly done by bairal and in some case it is also done by bepari.
Financing:
Financing is of crucial important for agro-product marketing like any type of product. The intermediaries face of lacking of sufficient finance. Sometimes intermediaries buy product from farmer on credit. 60% of intermediaries do operate their business by their self finRisk Bearing
Risk Bearing:
Risk bearing facilities are essential in any marketing activities. Insurance policy system has not been developed yet in Bangladesh. It has found that many farmers sell their vegetable field to bairal to shift risk and bairal bear all risk of the orchard. Intermediaries bear the risk of price variation.
4. Dependency on intermediaries
Intermediaries are essential part of vegetable supply chain in Bangladesh. They share profit with producer. But farmer in Bangladesh cannot avoid intermediaries for shifting their product to market. The reasons of dependency on Intermediaries are as follows.
Lack of Education:
It is observed that education has negative impact on agriculture income. But education effect on nonfarm income (wage, trade etc) significantly in Bangladesh. Education is required to raise total income of farmer. Most of the villagers in Bangladesh are illiterate and they are not getting update information. Again also farmer have fear of marketing risk. They rely on intermediaries to send their product to market.
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11
12
Local Consumer
Wholesaler 1
Wholesaler 2
Retailer
Consumer
13
Local mohajon
1 -- 1.5 /16 -- 16.5 /-
Outdoor baperies
1 -- 1.10 /19 -- 19.5 /-
Wholesaler 1
.50 -- 1 /20 /-
Coolie cost = .30/Transportation = 1.20/Police charge = .20/Local Haat charge = .20/Karon Bazar space fee= 50/TOTAL COST = 2.40/Profit approx = 1.10
Wholesaler 2
.50 -- 2 /20.5 -- 22 /-
Retailer
6 -- 8 /28 -- 30 /-
Consumer
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8. Termination
Supply Chain system is not sound in Bangladesh. Growers are not getting full benefit of high vegetable price due to deficient access to market information, illegal activities & practices and undeveloped infrastructure. There are insufficient well equipped wholesale market and many intermediaries between producer and consumer. Inferior communication and transport condition and inadequate financial and information service also contribute to frustrated distribution of perishable food. Direct intervention of government involvement in vegetable marketing is minimal. Price is determined by open bargaining by number of buyer attending in the market. Improving transport system and minimizing the number of intermediaries in supply chain can increase the profit margin of farmer.
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