Inventory & Control Management at Runner Motors Ltd.pdf

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"Supply Chain Impact to Inventory & Control Management at
Runner Motors Ltd"
Prepared By
Md. Yeasser Arafat
Project work of the requirement for the degree of
Post Graduate Diploma in Supply Chain Management
International Supply Chain Education Alliance
MIND MAPPER BANGLADESH
Dhaka - 1213, Bangladesh
January 2023

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Acknowledgement
To begin, we want to express our eternal appreciation to Allah. As part of the PGDSCM curriculum
offered by Mind Mapper Bangladesh, an affiliate of the International Supply Chain Education
Alliance. The famous and prominent commercial vehicle business in Bangladesh, Runner Motors
Limited, provided us with accurate official data that we used in the development of our PGDSCM
project work plan. I would want to express my deep appreciation to our instructor, Mr. Sahariyar
Ferdush COO and Resource Person of Mind Mapper Bangladesh, for all of his valuable feedback,
teaching, and suggestions throughout the writing of this report. As well as Mr. Md. Gaish Uddin
Miron, CSCM, Head of Supply Chain, and the Commercial team and MIS team of Runner Motors,
we owe a debt of gratitude for their assistance in writing this report. So that this report is grounded
in reality and appropriate for the PGDCSM programme and the issue we've chosen to research,
we've had many group talks.

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Abstract
The purpose of this paper is to provide more detail on the Inventory and Control Management of
Supply Chain Management in use at Runner Motors Ltd., a prominent Commercial Vehicle firm
in Bangladesh (RML). Using a theoretical and analytical perspective informed by real-world data,
we'll also aim to cover every angle of each "I & CM" function operating under SCM in Runner
Motors. We'll investigate how various SCM strategies may be put to use in RML. In addition, we
have experimented with the challenges that RML is experiencing in terms of SCM and how to
solve them. In order to construct this realistic study of SCM in RML, we have utilised official data.
This article discusses the most significant concepts covered in the PGDSCM course, how to use
them in a practical manner if SCM is the origin, potential duties and contradictions, and a strategic
strategy for overcoming these anomalies.

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CHAPTER 1: INTRODUCTION 6
1.1 INTRODUCTION 6
1.2 OBJECTIVE 6
CHAPTER 2: ORGANIZATIONAL OVERVIEW 7
2.1 RUNNER MOTORS LIMITED 7
2.2 CORE VALUES: THE VALUES WE BELIEVE IN 8
2.3 MISSION 8
2.4 VISION 9
CHAPTER 3: LITERATURE REVIEW 10
3.1 AUTO INDUSTRY SUPPLY CHAIN MANAGEMENT 10
3.2 BENEFITS OF SUPPLY CHAIN MANAGEMENT IN THE AUTO INDUSTRY 10
3.3 INVENTORY MANAGEMENT 11
3.4 IMPACT OF INVENTORY MANAGEMENT IN THE AUTOMOTIVE INDUSTRY 11
3.5 BENEFITS OF AUTOMOTIVE INVENTORY MANAGEMENT 12
3.5.1 DEMAND PLANNING 12
3.5.2 SUPPLIER MANAGEMENT 12
3.5.3 PRODUCTION SCHEDULING 13
3.5.4 WAREHOUSE MANAGEMENT 13
3.5.5 ORDER FULFILLMENT 14
3.5.6 CUSTOMER SUPPORT 14
3.6 TYPES OF INVENTORY 14
CHAPTER 4: CURRENT INVENTORY & CONTROL MANAGEMENT PRACTICE OF RML 17
4.1 INVENTORY & COST ANALYSIS OF RML 17
4.1.1 INVENTORY COST OF RML 17
4.1.2 COMMERCIAL VEHICLE PICKUP, LMD & HD’S INVENTORY AND COST ANALYSIS 17
4.1.3 MODEL-WISE INVENTORY ANALYSIS 18

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4.1.4 MRO INVENTORY ANALYSIS 18
4.2 PUSH & PULL POLICY 18
4.3 INVENTORY MANAGEMENT KPI 19
4.4 FACTORS TO CONSIDER SETTING UP POLICY 19
4.5 MATERIAL REQUIREMENT PLANNING (MRP) 19
4.6 MRP SYSTEM 20
4.7 ENTERPRISE RESOURCE PLANNING ERP 20
4.8 RUNNER ERP SYSTEM-IFS 21
4.9 ECONOMICAL ORDER QUANTITY 22
4.10 ABC ANALYSIS 23
4.11 FSN ANALYSIS 23
CHAPTER 5: FINDING & RECOMMENDATION 25
CHAPTER 6: CONCLUSION 26
CHAPTER 7: REFERENCES 27

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Chapter 1: Introduction
1.1 Introduction
Without rigorous inventory management across the supply chain, it is hard to have a consistent
flow of items moving through the system. One of the most important responsibilities of inventory
in supply networks is to ensure that demand and supply remain in a stable balance (Stanton, 2021).
The performance of inventory management is impacted positively by the size of the company. One
of the most important and difficult jobs that inventory plays in the supply chain of a firm is ensuring
that there is a constant balance of equilibrium between supply and demand. The process by which
a company ensures that the needs of both its upstream suppliers and its downstream consumers are
satisfied is known as supply chain management. Because of this, firms are required to find a careful
balance between satisfying customer demand, which may be difficult to anticipate with any degree
of accuracy or precision, and maintaining a consistent supply of raw materials and completed
goods. Businesses often turn to the exchange of strategic information for improved inventory
management in order to achieve this delicate balance.
1.2 Objective
This report will utilise the impact of the supply chain that has on the inventory and control
management in Runner Motors Ltd. The objective of this study is-

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Chapter 2: Organizational Overview
2.1 RUNNER MOTORS LIMITED
The Runner Group, with its flagship company Runner Automobiles Limited (RAL), has been a
successful business in Bangladesh since the year 2000. Launched in Dhaka, Bangladesh on
October 12, 2004, Runner Motors Limited (RML) is a major subsidiary of the Runner Group. For
the last 14 years, under the terms of a deal struck in 2004 with Eicher Motors Ltd. of India, RML
has been the only distributor of Eicher brand trucks and pickups in the nation. With its well-
organized dealer network and robust service infrastructure, RML has amassed a 20% market share
in Bangladesh's overall commercial vehicle industry and a 35% market share in the Light and
Medium (LMD) category (Lima, 2021). Overseas distribution company VECV has honoured RML
as its best partner year since the company's inception in 2004-05. Runner has diversified its
business holdings over the years to include not only the auto industry but also oil and gas, lubricant
and energy production, real estate and land development, the production of bricks made using
environmentally friendly technology, the leather and footwear industries, and more.
Figure: Runner Motors Limited Logo, Source: (Team, 2022)
The entrance of Runner Motors Limited (RML) first opened in October, 2004. Eicher Motors Ltd.
of India has appointed RML as the exclusive distributor of Eicher light commercial vehicles
(LCVs) and medium commercial vehicles (MCVs) in Bangladesh. Eicher trucks are made by
Volvo-Eicher Commercial Vehicle (VECV), a partnership between the Swedish Volvo Group and
the Indian truck manufacturer Eicher Motors (India) (Niloy, 2021). The RML company was

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founded on October 12, 2004. Since then, it has expanded its dealer base and servicing
infrastructure throughout the country.
In 2004 and 2005, RML was recognised as having the best performance operation for outstanding
performance. In 2005 and 2006, RML was recognised as having the highest sales of light
commercial vehicles (LCVs) and heavy commercial vehicles (HCVs) in international markets. In
2007 and 2008, RML was recognised as having the highest sales of distributors in international
markets. In 2008 and 2009, RML was recognised as having the highest sales of vehicles in
international markets (2010–2011).
Distributor (2009), Best-Selling Overseas Distributor (2010), Best-Selling Overseas Distributor in
Overseas Market (2011), Best-Selling Overseas Distributor in Overseas Market (2012), Best-
Selling Overseas Distributor in Overseas Market (2013), Best-Selling Overseas Vehicle Dealer
(2014), Best-Selling Overseas Vehicle Dealer (2017-2018), The Highest-Priced CV Range
Available Abroad (2019-2020); The highest volume of LMD truck sales in international markets
(2019–2020); strategic digital and marketing strategies (2021–2022) (Niloy, 2021).
2.2 CORE Values: The Values We Believe In
R = Respect customers’ feelings.
U = Unite together as a team and celebrate success.
N = No wastage is permissible.
N = Never being complacent.
E = Enjoy responsibility.
R = Recognize social and environmental awareness.
2.3 Mission
Runner's goal is to build a positive reputation among consumers by providing them with the
products they need in a way that is both ecologically responsible and profitable for the company's
investors.

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Furthermore, the goal will be realised via the application of efficient and effective human resources
to a lean manufacturing process, resulting in increased output.
Runner's mission is to improve the world by providing services at prices that surpass what
customers expect.
2.4 Vision
Runner’s vision is to establish RUNNER as a trusted brand by satisfying customers’ needs and
offering desired products and services at an affordable price.
SWOT for Runner Motors Ltd.
WEAKNESSES
Single sourcing.
A large amount of operating capital is required.
Credit are the lifeblood of the business.
Import duty is high.
OPPORTUNITIES
The duty fee for CKD/SKD Assembling will be lower.
Developing countries will continue to industrialize, and markets will
remain open in the foreseeable future.
STRENGTHS
Product quality is high.
Less competitor.
Trading business
THREATS
The competitors have the greatest market share.
Political instability.
R&H development and repair projects are progressing slowly.

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Chapter 3: Literature Review
3.1 Auto Industry Supply Chain Management
All the products, services, and components that enter and leave the company go under the umbrella
of the automotive and transportation supply chain. This implies that stable automobile
manufacturing logistics are crucial to the success of any business.
The effectiveness of supply chain management (SCM) in the automotive and transportation
industries depends on a number of factors that may be adjusted to meet your specific requirements
(Stanton, 2021). Among them include the incorporation of technology, the identification and
collection of data, and the creation of thorough logistical strategies. Utilizing cutting-edge,
outsourced logistics companies as key cogs in the machine is another option.
3.2 Benefits of Supply Chain Management in the Auto Industry
Management of the supply chain is very important in the automotive industry. Businesses run the
danger of falling behind on orders, losing money due to delays, and alienating consumers if they
don't have solid supply chain management and logistics in place (Sari, 2017).
Conversely, when it comes to customer happiness, profit, and replacements, automakers who can
depend on their supply networks the most come out on top. Products and services in today's global
market must be delivered on time while also living up to customers' high standards for quality and
value. Continual supply and demand are the lifeblood of many firms in the automotive sector.
Production delays may occur if the car industry's supply chain is not managed effectively. The
arrival of the finished product is always behind schedule because of the significant wait periods
for component delivery. In today's market, delays at any point in the supply chain may have
devastating effects on profitability. Proper supply chain management allows businesses to stay one
step ahead of them.

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Choosing a logistics company that uses cutting-edge technology to send and receive your items
can greatly reduce the likelihood of any delays occurring. Users should be able to electronically
check shipments and get real-time information on where and when the items will arrive.
Software solutions built into supply chain management systems enable businesses to submit a
product, material, and component costs in real-time. Thanks to the web, consumers are able to
examine their pricing online and easily compare them to those of competitors around the globe.
With this knowledge, buyers may choose the best deals, which boosts their own bottom lines.
In the automobile sector, the management of the supply chain may be divided into three main
categories:
First, gathering data, sorting it, then analysing and forecasting it with the help of advanced
software systems.
Keeping all operations, internal and external, to the highest standards achievable at all
times.
Keep an eye on your margins and make sure they stay healthy by justifying all of the
expenditures, both variable and fixed.
3.3 Inventory Management
The stock of products that a firm maintains in preparation for sale or distribution is known as its
inventory. It's possible that a company's human capital is its most valuable asset (Prijic, 2022). It
is crucial for companies to have effective inventory management that avoids the buildup of excess
material while at the same time serving the requirements of their customer base. The primary
emphasis of inventory management is on stocking various places.
3.4 Impact of Inventory Management in the Automotive Industry
In the automobile business, inventory management is more than just counting products; it also
includes organising and monitoring the movement of materials from suppliers to manufacturers to
retailers and, eventually, into the hands of customers. According to the findings of a recent study,
43 per cent of small businesses either manually monitor their inventory or don't track it at all.

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Having an excessive amount of stock on hand restricts a firm from acting rapidly to satisfy the
needs of its customers and locks up cash that may be used in other ways. If companies do not
purchase adequate inventory in advance, they will have to deal with fewer consumers, which will
result in fewer sales. When utilising manual techniques such as spreadsheets, it may be difficult to
find the optimal balance between overstocking and understocking a particular item.
An inventory management system may be beneficial to automotive suppliers since it can provide
them with comprehensive visibility into their inventory across all of their distribution channels.
Because of this, they are able to always have the precise inventory on hand, regardless of when or
where it is required. With the support of an integrated inventory management system that optimises
stock to assure product availability, the supply chain as a whole may be able to run more smoothly.
3.5 Benefits of Automotive Inventory Management
3.5.1 Demand Planning
Poor forecasting of demand may lead to stockouts, unfulfilled orders, and ultimately, lost business.
However, when you have too much stock on hand, you end up with old items that take up valuable
space and resources that may be used elsewhere. Discounts and clearance sales are common ways
for businesses to get rid of unsold stock. Both profit margin and sales volume will suffer under
these conditions (Darby & Fraser, 2019).
Having the correct supplies on hand at the right time is crucial, and this is exactly what good
demand planning helps guarantee. When a business has an inventory management system in place,
it can automatically retain records and collect data so you can make predictions and plans based
on past demand. Improve the precision of company demand planning with the help of a cutting-
edge inventory management system that has IoT and analytics capabilities.
3.5.2 Supplier Management
In order to mitigate the consequences of interruption and decrease supply risks, automotive
suppliers often purchase the same component from many sources. If a company's primary supplier
is unable to meet an order, it may easily raise its order quantity from a secondary supplier to
maintain product availability.

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By using an inventory management system, one can easily see which vendor supplied which
supplies. Instead of recalling everything made during a given time period because of a defective
component, you may narrow it down to only the goods that came from the vendor who provided
the problematic part. Having a clear paper trail helps cut down on waste and expenses. Supplier
quality may be monitored and tracked by an inventory management system, leading to improved
and more trustworthy suppliers overall.
3.5.3 Production Scheduling
A well-thought-out production strategy will reserve machines and work centres, schedule workers,
and strategically place materials at each workstation. Workers and equipment might be set aside
for a manufacturing run without the knowledge that the necessary materials are in stock.
Companies can predict when materials will become available and plan production appropriately
by using the shortfall reports and status updates provided by an inventory management system.
The real-time nature of inventory management system updates means that businesses may make
proactive changes to the production schedule to account for any delays that may occur. Keeping
track of inventory helps streamline the manufacturing cycle and allows workers to allocate
resources more effectively.
3.5.4 Warehouse Management
Without the proper infrastructure in place, it may be far more difficult to streamline automotive
warehousing operations across many sites (Bragg, 2018). In the absence of cross-location visibility
of inventory, each warehouse must be managed independently, necessitating adequate stock levels.
Also, when everything has its own designated spot in the warehouse, it reduces wasted time and
effort spent relocating workers and increases productivity.
Having complete insight into the lifecycle of an item from the first buy order with the supplier to
the final order with the customer is a key benefit of good inventory management. By carefully
fulfilling orders from the warehouse with sufficient stock, businesses may lower the quantity of
stock on hand with the help of an inventory management system that enables you to check
inventory levels across all locations. A better understanding of stock levels allows for more timely
and cost-effective product deliveries.

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3.5.5 Order Fulfillment
A unified approach for fulfilling orders from numerous channels demands that this information be
visible and coordinated throughout the whole business (Blogteam, 2020). The automobile
fulfilment process may become difficult and unprofitable without proper inventory visibility.
Prompt inventory management is a cornerstone of minimising outdated stock and maximising
customer satisfaction throughout all distribution channels.
An inventory management system is useful for fulfilment because it provides insight into the
whereabouts and amounts of goods across several locations. By comparing order details with
worldwide stock levels, orders may be expedited to the nearest warehouse, specific products can
be assigned to a preferred warehouse, and urgent orders can be given higher priority.
3.5.6 Customer Support
Inventory records that can track a product's journey through the supply chain help firms resolve
consumer concerns like order tracking, product swaps, and refund requests more efficiently.
Instead of losing a transaction because a product is out of stock in one place, customer care
representatives may better serve consumers by seeing inventory across channels and locations.
Sales and support staff are equipped to proactively address client concerns in real-time thanks to
inventory management. It's difficult to keep tabs on quality problems, keep suppliers responsible,
and consistently wow customers without an inventory management system that links components
from completed items to client orders.
3.6 Types of Inventory
There is no firm that doesn't rely heavily on its inventory, which is the link between production
and customer delivery. Inventory may be characterised and categorised in a variety of ways, but
in the end, it's the management of inventory that determines how well a company can fulfil
customer orders.
Raw Materials: Raw materials are the basic components from which manufactured goods are
made. By the time a product is finished, its basic elements have been transformed beyond
recognition (Andrew, 2022).

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Components: Similar to raw materials, components are used in the manufacturing process but
may be easily identified in the final product.
Work in Progress (WIP): Materials, components, labour, overhead, and even packaging are all
considered part of the "work in progress" (WIP) inventory.
Finished Goods: Ready-to-sell products are known as "finished goods."
Maintenance, Repair and Operations (MRO) Goods: The term "MRO" refers to materials and
supplies that are kept on hand to aid in the production of goods and the operation of a company.
Packing and Packaging Materials: It's important to know that you may choose from three
distinct packaging options. The product is protected and ready for use thanks to the primary
packaging. The final product is packaged in secondary packaging, which may have barcodes or
price tags. When items are packaged in large quantities for shipping, this is known as tertiary
packing.
Safety Stock and Anticipation Stock: The term "safety stock" refers to the surplus of goods that
a business keeps on hand in case of emergencies. While keeping a safe supply does incur expenses,
it helps ensure happy customers. Like safety stock, anticipation stock is made up of raw materials
or completed goods that a company buys in advance of expected demand. A company may invest
in safety stock if the price of key raw materials is expected to increase or if the timing of peak
sales is near (Akandere & Paksoy, 2020).
Decoupling Inventory: The phrase "decoupling inventory" refers to the surplus materials or
work-in-progress held at each station of a manufacturing line. While it's common practice for
businesses to have an emergency supply on hand, only those engaged in product manufacturing
may benefit from decoupling inventory in the event that separate components of the production
line operate at different rates.
Cycle Inventory: Businesses often purchase their cycle goods in bulk to save money on shelving
space. In the "Essential Guide to Inventory Planning," you may read more about cycle inventory
formulae.

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Service Inventory: The capacity of a company to provide its services over a certain time period
is measured using the management accounting concept of "service inventory." In a motel with 10
rooms, for instance, 70 guests spend a single night per week.
Transit Inventory: Transit inventory is merchandise that is being moved from the factory to the
warehouses and distribution locations. The time it takes for merchandise in transit to be moved
between warehouses might be measured in weeks.
Theoretical Inventory: The theoretical inventory also referred to as "book inventory," is the
minimum quantity of goods required to finish an operation without waiting. The industrial and
food industries make extensive use of theoretical inventory. The formula of "actual minus
theoretical" is used to determine its value.
Excess Inventory: Excess inventory, also known as obsolete inventory, refers to a company's
stock of raw materials and finished items that have not been sold or consumed but are still being
stored at the company's expense.
Figure: Types of Inventory, Source: (Andrew, 2022)

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Chapter 4: Current Inventory & Control Management
Practice of RML
4.1 Inventory & Cost Analysis of RML
4.1.1 Inventory Cost of RML
Acquisition cost: The cost required to obtain one or more units of an item. It is Order
Quantity time’s unit cost. It is also called product cost or purchase price.
Landed Costs: Product cost plus the cost of logistics, such as warehousing, transportation
and handling fees. It is the sum of all direct costs.
Carrying Costs: Percentage of the dollar value of inventory per unit of time. It is a variable
cost and increases with the level of inventory.
Storage Cost: Allocation for rent, operating costs, tax, material handling costs, lease
payment of equipment, depreciation, and power cost.
Ordering Cost: Includes costs related to the clerical work of preparing, releasing,
monitoring and receiving orders, the physical handling of goods, inspection and set up
costs.
4.1.2 Commercial vehicle Pickup, LMD & HD’s inventory and cost analysis
Stock in Hand 587
Pipeline ( LC)[CKD] 12
Ordered ( LC to be issued) 196
795
Cost of Inventory up to Landed 12,961,944
$
1,296,194,365
BDT
Estimated Inventory Holding Cost 654,167
$
Estimated Maintenance Expense 114,460
$
768,627
$
76,862,715
BDT
Segment Qty Landed Cost Holding + Maintenance
Pickup + LMD 530 10,510,585
$ 649,988
$
HD 57 2,451,358
$ 118,639
$
Holding & Maintenance Cost / Unit : LMD 1,226.39
$
116,507
BDT
Holding & Maintenance Cost / Unit : HD 2,081.39
$
197,732
BDT

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4.1.3 Model-wise inventory analysis
4.1.4 MRO Inventory analysis
4.2 Push & Pull Policy
The main difference between push and pull systems is that in a push system, production dictates
how much of the product will be “pushed” to the market while in a pull system, current demand
“pulls” the goods, it dictates when and how much to produce and need.
Sum of Quantity Column Labels
Model HD LMD Pickup Grand Total
1050/3350 24 24
1055/2815-DSD 19 19
1075/3515 9 9
1075AB/3765 30 30
1075/4065 69 69
1080/3515 16 16
1095/3765 12 12
1095/4065 23 23
1112/3800 13 13
1112/4300 25 25
1112/5050 17 17
1114/3765 4 4
1114/4255 45 45
3015/4490 5 5
3015/5490 2 2
1080XPT/2815RDT 93 93
1112XPT/3515RDT 5 5
5025/5000 6 6
5025/4000-RMC 6 6
PRO6031H/6150 9 9
5025/4000-9S T 22 22
PRO6025T/4000 1 1
5040/3485 10 10
1049/2815 9 9
1055/2815 110 110
6025/4000-RMC 3 3
Grand Total 57 368 162 587
BDT 18,678
BDT 64,176
BDT 93,728
BDT 100,301
BDT 205,597
BDT 379,455
BDT 524,658
BDT 1,458,069
BDT 1,964,545
0 500000 1000000 1500000 2000000 2500000
Booklet Itemb
Electric Items
Seat Cover Items
Sticker Items
H.Jack Items
Paint items
Lub Items
Spare Parts
Tyre Items
MRO Inventory
PDIJS - Value
PDIJS - Stock
PDIBL - Value
PDIBL - Stock

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4.3 Inventory Management KPI
‫٭‬ Reduction in Inventory Costs
‫٭‬ Customer Service Target
4.4 Factors to Consider Setting up Policy
‫٭‬ Customer Demand.
‫٭‬ Replenishment Lead times.
‫٭‬ Planning horizon.
‫٭‬ Product Variety.
‫٭‬ Inventory Costs.
‫٭‬ Customer Service Requirements
4.5 Material Requirement Planning (MRP)
A set of techniques that uses Bill of Material data (BOM), inventory data and Master Production
Schedule to calculate requirements for materials.
Months 0 1 2 3 4 5 6 7 8 9 12 13 18 24 28 30 44 Stock Qty. Using
Push Policy
Pull Policy
Pull Policy
440
377
1560
1603
1712
1746
587
608
621
513
464
407
As on 14-07-2019
686 633
39% 36% 1%
405
As on 21-07-2019
590 720
34% 42% 1%
22%
379
As on 01-08-2019
426 786
27% 49% 2%
23%
366
As on 22-08-2019
346 732
22% 47% 2%
29%
448
23%
As on 01-01-2021
276 44
12% 8%
73%
As on 18-01-2021
341 28
78% 6% 6%
As on 03-02-2021
276 65
68% 16% 6%
As on 16-02-2021
344 51
74% 11% 6%
22
23
25
34
25 32
7%
41 30
9%
40 26
10%
40 29
9%
As on 01-10-2022
234 125 144 10
46% 24% 28% 2%
As on 01-11-2022
251 213 147 10
40% 34% 24% 2%
As on 01-12-2022
258 194 146 10
42% 32% 24% 2%
As on 01-01-2023
294 102 177 14
50% 17% 30% 2%

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Independent Demand: Is the demand for finished products, does not depend on the demand of
other products, needs to be forecasted- Vehicles as finished good
Dependent Demand: Is the demand derived from finished products, Is the demand for component
parts based on the number of end items being produced and is managed by the MRP system – Paint
items, Tires, Hydraulic Jacks
4.6 MRP System
4.7 Enterprise Resource Planning ERP
ERP is software designed for organizing and managing business processes. Coordinates business
from supplier evaluation to customer invoicing. We use IFS as ERP System
ERP modules include:
➢ Basic MRP

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➢ Finance
➢ Human resources
➢ Supply chain management (SCM)
➢ Customer relationship management (CRM)
➢ Sustainability
4.8 RUNNER ERP System-IFS

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4.9 Economical Order Quantity
It is sort of fixed order quantity model where most cost-effective number of items to order when
replenishing. EOQ ensures lowest cost of carrying and ordering.
1-Dec-22
Remarks
In Hand + Pipeline
2 + 0.5 Policy
Dec-22 Jan-23 Feb-23 Next 3 Stock Already In LC Ordered Pipeline Total P.L Dec-22 Jan-23 Feb-23 Dec-22 Jan-23 Feb-23 Dec-22 Jan-23 Feb-23 Mar/23 Apr/23 Priority Policy Based RATIONAL Color Recommendation
146 172 161 479 608 0 2 198 200 200 1 120 79 608 463 418 463 418 355 273 233 List 89 0 Code 0
Pickup 1049/2815CBC Chassis 45Days 1 2 1 4 9 0 0 0 0 0 0 0 0 9 8 6 8 6 5 2 2 0 0 0
Pickup 1049/2815-FBT/FSD Chassis 45Days 0 0 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 0 0 Jan-23
Pickup 1050/3350 Chassis 45Days 3 3 3 9 28 0 0 0 0 0 0 0 0 28 25 22 25 22 19 6 4 0 0 0
Pickup 1055/2815-DSD Chassis 45Days 10 9 9 28 31 0 0 0 0 0 0 0 0 31 21 12 21 12 3 9 8 Regular 2 0 0 Jan-23
Pickup 1055/2815CT Chassis 45Days 25 38 35 98 66 0 0 50 50 50 0 30 20 66 41 33 41 33 18 30 30 Regular 17 0 0 Jan-23
39 52 50 141 134 0 0 50 50 50 0 30 20 134 95 73 95 73 45 47 44 21 0 0 0
LD 1075/3515 Chassis 45Days 10 5 6 21 12 0 0 0 0 0 0 0 0 12 2 0 2 0 0 5 9 Very_Urgent 12 0 0 Jan-23
LD 1075AB/3765 Chassis 45Days 3 5 6 14 34 0 0 0 0 0 0 0 0 34 31 26 31 26 20 20 20 0 0 0
LD 1075/4065 Chassis 45Days 2 9 8 19 76 0 0 0 0 0 0 0 0 76 74 65 74 65 57 10 10 0 0 0
LD 1080/3515 Chassis 45Days 15 10 10 35 16 0 0 10 10 10 0 6 4 16 1 0 1 0 0 16 15 Urgent 21 0 0 Jan-23
LD 1095/3765 Chassis 45Days 0 1 0 1 4 0 0 10 10 10 0 6 4 4 4 9 4 9 13 5 6 0 0 0
LD 1095/4065 Chassis 45Days 5 8 10 23 25 0 0 0 0 0 0 0 0 25 20 12 20 12 2 15 10 Regular 6 0 0 Jan-23
LD 1095/4765 Chassis 45Days 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
LD 1112/3800 Chassis 45Days 1 2 3 14 0 0 0 0 0 0 0 0 14 13 13 13 13 11 0 0 0 0 0
LD 1112/4300 Chassis 45Days 4 3 2 9 26 0 0 0 0 0 0 0 0 26 22 19 22 19 17 13 9 0 0 0
MD 1112/5050 Chassis 45Days 2 4 5 11 20 0 0 10 10 10 0 6 4 20 18 20 18 20 19 0 2 0 0 0
MD 1114/3765 Chassis 45Days 0 0 0 0 4 0 0 0 0 0 0 0 0 4 4 4 4 4 4 4 0 0 0 0
MD 1114/4255 Chassis 45Days 12 12 10 34 29 0 0 20 20 20 0 12 8 29 17 17 17 17 15 32 30 Regular 9 0 0 Jan-23
MD 2049/2815 Chassis 45Days 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
MD 2055/2815 Chassis 45Days 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
MD 3015/4490 Chassis 45Days 0 1 1 2 3 0 0 0 0 0 0 0 0 3 3 2 3 2 1 1 6 0 0 0
MD 3015/5490 Chassis 45Days 4 5 5 14 8 0 0 0 0 0 0 0 0 8 4 0 4 0 0 1 1 Very_Urgent 7 0 0 Jan-23
Tipper 1055/2815RDT Tipper 65Days 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Tipper 1080XPT/2815RDT Tipper 65Days 25 30 25 80 121 0 2 58 60 60 1 36 23 121 97 103 97 103 101 55 35 0 0 0
Tipper 1112XPT/3515RDT Tipper 65Days 3 2 2 7 7 0 0 0 0 0 0 0 0 7 4 2 4 2 0 7 1 Regular 4 0 0 Jan-23
86 95 92 273 399 0 2 108 110 110 1 66 43 399 314 292 314 292 260 184 154 59 0 0 0
HD 5025/5000 Chassis 45Days 2 3 0 5 6 0 0 1 1 1 0 1 0 6 4 2 4 2 2 5 6 Regular 1 0 0 Jan-23
HD 5025/4000-RMC Chassis 45Days 5 3 2 10 10 0 0 0 0 0 0 0 0 10 5 2 5 2 0 5 0 Regular 3 0 0 Jan-23
HD PRO6031H/6150 Chassis 45Days 1 2 3 6 11 0 0 0 0 0 0 0 0 11 10 8 10 8 5 5 5 0 0 0
HD 5025/4000-9ST Tipper 65Days 13 12 13 38 33 0 0 39 39 39 0 23 16 33 20 31 20 31 34 20 20 2 0 0 Jan-23
HD PRO6025T/4000 Tipper 65Days 0 0 0 0 1 0 0 0 0 0 0 0 0 1 1 1 1 1 1 5 0 4 0 0 Jan-23
HD PRO6025/4000-RMC Chassis 45Days 0 0 0 0 3 0 0 0 0 0 0 0 0 3 3 3 3 3 3 0 0 0 0
HD 5040/3485 Chassis 45Days 0 5 1 6 11 0 0 0 0 0 0 0 0 11 11 6 11 6 5 2 4 0 0 0
21 25 19 65 75 0 0 40 40 40 0 24 16 75 54 53 54 53 50 42 35 9 0 0 0
TOTAL (Pickup + LMD+ HD) 146 172 161 479 608 0 2 198 200 200 1 120 79 608 463 418 463 418 355 273 233 89 0 0 0 0
Supply
Month
Pickup
Inventory&DemandPlan-Dec 2022
Descriptions Sales Forecast Stock Position Pipeline Inflow Ratio Opening Stock Closing Stock (Plus Pipeline) Sales Forecast SalesRecommendation
LMD
HD
Segment SKU Type LeadTime

23 | P a g e
4.10 ABC Analysis
ABC = Always Better Control
This is based on cost criteria. It helps to exercise selective control when confronted with large
number of items it rationalizes the number of orders, number of items & reduce the inventory.
About 10 % of materials consume 70 % of resources
“A” Items:
Small in number, but consume large amount of resources
Must have:
• Tight control
• Rigid estimate of requirements
• Strict & closer watch
• Low safety stocks
• Managed by top management
“B” Items:
Intermediate
Must have:
• Moderate control
• Purchase based on rigid requirements
• Reasonably strict watch & control
• Moderate safety stocks

24 | P a g e
• Managed by middle level management
“C” Items:
Larger in number, but consume lesser amount of resources
Must have:
• Ordinary control measures
• Purchase based on usage estimates
• High safety stock
4.11 FSN ANALYSIS
Based on utilization.
➢ Fast moving.
➢ Low moving.
➢ Non-moving.
Non-moving items must be periodically reviewed to prevent expiry & obsolescence.
Sl. No: Segment Model Category Sales Contribution %
2636 100%
01 LMD 1080XPT/2815RDT F 407 15%
02 PICKUP 1055/2815 F 379 14%
03 LMD 1114/4255 F 217 8%
04 LMD 1075AB/3765 F 216 8%
05 HD 5025/4000-9S T F 207 8%
06 LMD 1075/4065 F 171 6%
07 LMD 1095/4065 F 141 5%
08 LMD 1112/5050 F 123 5%
09 PICKUP 1055/2815-DSD S 111 4%
10 LMD 1080/3515 S 101 4%
11 LMD 1112/4300 S 88 3%
12 LMD 1075/3515 S 74 3%
13 PICKUP 1050/3350 S 70 3%
14 PICKUP 1049/2815 S 50 2%
15 LMD 1112XPT/3515RDT S 48 2%
16 HD 5025/4000-RMC S 46 2%
17 HD PRO6031H/6150 N 38 1%
18 LMD 3015/4490 N 38 1%
19 LMD 1095/3765 N 27 1%
20 LMD 1112/3800 N 26 1%
21 HD 5025/5000 N 19 1%
22 HD 5040/3485 N 14 1%
23 LMD 3015/5490 N 9 0%
24 LMD 1114/3765 N 5 0%
25 LMD 1095/4765 N 4 0%
26 HD PRO6025T/4000 N 4 0%
27 HD 6025/4000-RMC N 2 0%
28 HD 6049/3485 N 1 0%
FY 2021-2022 Sales & Contribution

25 | P a g e
Chapter 5: Finding & Recommendation
We can figure out the following findings by discussing the overall inventory and control
management system in RML, and the management can pay attention and put some value by making
some changes.
1. Sourcing
RML currently has only one supplier for commercial vehicles. So that is their weakest point. For
having a single source of their mother product, they fall behind in cases of price negotiations,
product mixing, proper inventory control, cost control, a lack of substitute SKUs, and many others.
2. Strategic SCM
Because of single sourcing, they need to depend on VECV regarding their SSCM. They are falling
behind in gaining a competitive advantage over their competitors regarding pricing, quality, an
agile supply chain, and many other segments.
3. Manufacturing, Planning, and Control
As RML doesn’t have any CKD or SKD plants, they don’t get a duty break from customs. If they
can assemble here their top-selling three or four models, their dependency on VECV will decrease
a lot. Then they may maintain short inventories, short lead times, less duty for imports, lower
maintenance costs, and many other competitive advantages.
4. Material Management
Visiting physically, we can figure out that their warehouses, where vehicles are stored, don’t have
plain and smooth surfaces; sometimes there are mud stains and holes in the surface. Vehicles are
sometimes involved in accidents and severely damaged which ultimately involves more
maintenance costs.
5. Logistics & Distribution
Here are some major findings we have made.
There are currently over 1600 vehicles on the road. But currently, the average monthly sale is
about 200 units. So RML currently has eight times more inventory for a single month. They need

26 | P a g e
to keep 2 months' worth of safety stock on hand, and one month’s inventory will be in the pipeline.
So their inventory maximum should be around 500 to 700 units. So this condition, overstock, is
their biggest problem.
Furthermore, they can establish a small warehouse in the Cumilla region where customers from
the South and East can visit and purchase their desired models. Besides, this may also reduce their
transport costs.
These are the major discoveries we made in the RML supply chain. We hope they will emphasise
their attention on the above-mentioned points and overcome them soon.
Chapter 6: Conclusion
In spite of the fact that supply chain management may be used in a variety of contexts, the effect
it has on inventory management is very much since it makes it easier to regulate the amount of a
certain product that is kept on hand. This paper has shown the advantages of having a supply chain,
as well as the various kinds of inventory and the effect that inventory has on the automotive sector.
The RML Inventory and Cost Analysis were provided in this report. This analysis examined the
inventory as well as the costs of Commercial Vehicle Pickup, LMD, and HD. The push and pull
policies, as well as the ABC analysis, have been brought to light by this project.

27 | P a g e
Chapter 7: References
Akandere, G. and Paksoy, T. (2020) “Smart and Sustainable Supply Chain Management in
industry 4.0,” Logistics 4.0, pp. 284–306. Available at: https://doi.org/10.1201/9780429327636-
29.
Andrew (2022) What is inventory? types, examples and analysis, Oracle NetSuite. Available at:
https://www.netsuite.com/portal/resource/articles/inventory-management/inventory.shtml.
Blogteam (2020) Importance of inventory management in Global Supply Chain Management,
IIMU BLOG. Available at: https://www.iimu.ac.in/blog/importance-of-inventory-management-in-
global-supply-chain-
management/#:~:text=The%20importance%20of%20inventory%20management,the%20size%20
of%20the%20company.
Bragg, S.M. (2018) Inventory management. Centennial, CO: AccountingTools®.
Darby, R. and Fraser, J. (2019) “Automotive Industry Management,” 2004 Annual Conference
Proceedings [Preprint]. Available at: https://doi.org/10.18260/1-2--13628.
Lima (2021) Runnerbd.com. Available at: https://www.runnerbd.com/motors/.
Niloy (2021) Runner Motors Ltd.., RUNNER MOTORS LTD. Available at:
https://runnermotors.com.bd/.
Prijic, M. (2022) 6 benefits of inventory management in Automotive Supply Chain, IT
Convergence. Available at: https://www.itconvergence.com/blog/6-benefits-of-inventory-
management-for-automotive-supply-chains/.
Sari, K. (2017) “Exploring the benefits of vendor managed inventory,” International Journal of
Physical Distribution & Logistics Management, 37(7), pp. 529–545. Available at:
https://doi.org/10.1108/09600030710776464.
Stanton, D. (2021) Supply Chain Management. Hoboken, NJ: John Wiley & Sons, Inc.
Team, D.C. (2022) 5 types of inventory costs [explained with examples], Deskera Blog. Deskera
Blog. Available at: https://www.deskera.com/blog/inventory-cost/.

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