Supply chain management (SCM) in Bangladesh

Supply Chain management (SCM) means managing the supply of inbound and outbound goods and services in the most cost effective and time sensitive way. This can be done by designing a strategic route plan for the quickest possible pick-up and delivery regimen, from the appropriate suppliers, for all points throughout the assembly line, in order to achieve cost and time related efficiency levels. Then optimum operational smoothness can be guaranteed giving a business an edge over competitors in marketing goods and services by introducing goods and services quicker than established trend.Logistics is used to put this strategy in place physically. All manufacturing, service oriented and progressive companies have logistics departments that execute SCM plans so that goods and services that come in can be made available to the various departments for meeting production schedule and churning out finished goods and services to the clients in the quickest cost effective way possible.Logistics uses various infrastructure and machinery to bring about the execution of the SCM strategy. Such SCM and logistics mechanism can be relevant in the macro sense as well, encompassing the economic activity of the whole country. Therefore, roads, railways, waterways, seaport and airport customs facilities and regulations of a country need to be seamless and free of corruption. All of the above fall in the category of logistical infrastructure and are vital for the economic viability of a country .The preamble of our lead article in the logistics page is always introductory in nature, simply because supply chain management is a subject that is not in the news often and communication on the subject has not been to the desired extent leaving most managers unable to grasp the technicalities of supply chain management though most have to deal with the challenges of managing a supply chain.In Bangladesh, logistical infrastructure has been discussed at length in the media indirectly whenever we have seen news related to port facilities but the significance of supply chain management and the fact that modern logistical infrastructure is a national priority has not gained ground.Here lies the need for a strategic plan commissioned and adopted by the highest authority. A strategic plan for development of logistical infrastructure would be unique opportunity for not only to improve functional infrastructure but also to reap the benefit of creating thousands of jobs by establishing new businesses and to give a fillup to existing companies that would benefit by getting lucrative contracts to work in improving roads, railway lines, ports, airports, and so on.The strategic plan could improve many things .We have heard of suggestions like improving the condition of the Mongla Port, which is currently almost lying idle. Mongla port could be an alternative port to Chittagong port but this option is not explored for a variety of reasons, most of which are hazy in design and context. . What a waste that we are unable to offer an alternative port to ease congestion in the Chittagong port while we have a ready-made port waiting to be re-commissioned. Internal Container Depots (ICD) facilities need to be increased so that goods that can be unstuffed and delivered to destination in and around Dhaka if needed. Other suggestions that can be a part of strategic plan are - riverine ports facilities for moving goods from Chittagong Port through barge-mounted transportation, improvement of Bangladesh Railways, more off-doc facilities in Chittagong port to facilitate quick movement of containers within the port, computerisation of customs to shorten customs formalities and make them more transparent.The term Supply Chain Management (SCM) itself envisages the need for planning and, therefore, national strategic plan can be a great benefit for the whole national economy just as SCM plans are evolved for smaller entities like business organisations. The national strategic plan would have sections that relate to financial requirement needs to implement the plan. Viable financial plan can be drawn up with private sector participation in mind and if the emphasis is placed on transparency and strict supervision of a government team comprising well-known competent and honest officials.The logistics news in Bangladesh is now skewed toward positive sound bites. A prescheduled berthing system known as fixed day window berthing has come into effect in Chittagong port. The system, internationally recognised practice, would mean that arrival and berthing of ships would be fixed one-month back. There are also news items coming thorough that speak of initiatives to work toward finding a solution to the issue of licensing for the logistics companies. The much talked about Terminal Handling Charges (THC) which was abolished recently is also just under the surface with the logistics sector trying to figure out who will ultimately pay this charge which is applicable as per internally accepted shipping inco-terms with the exception of Bangladesh.Supply Chain Management (SCM) and logistics would have to be accepted as integral to the strategic economic planning that is done by economic think-tank of the country. It is actually possible to think of strategic models for economic development that revolve around a Hub-Port that would service regional economies sprouting growth surrounding the activities centered on the port itself. Businesses would grow to cater to the onrush of maritime visitors. Hotels, recreational facilities and restaurants would be a small part of the various kinds of service that would emerge. With new businesses would be financial deals to be stuck and venture capitalists would start emerging, merging with other high flyers to create a versatile environment where sky is the limit. Chittagong is so ideal for a port based development scheme with its natural beauty and potential for tourism. Bangladesh needs to start thinking of a strategic plan based on development of logistics infrastructure centered on a world class port in Chittagong and related development that can happen in a port based economy.

Ershad Khandker

Source: The Financial Express