This document provides an overview of the supply chain management processes of RAK Ceramics Bangladesh Ltd. It discusses RAK's value chain, including primary activities like procurement, production, distribution and secondary activities like inventory management and transportation. Key aspects of RAK's supply chain covered include importing raw materials from suppliers like GBA, inventory management, production using advanced machinery, distribution through dealers and sub-dealers, order fulfillment timelines, and marketing and sales activities.

1. Welcome To
Presentation
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2. Topic:Topic:
Supply chain management of
RAK ceramics Bangladesh ltd.
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3. 08/01/16
Objectives
 An over view on RAK Ceramics
 Overall value chain process of RAK Ceramics
 Primary activities of RAK Ceramics (like starts from
supply chain management to delivering products to
the end user)
 Support activities of RAK Ceramics.

4. Company overview
RAK ceramics UAE:
RAK a global ceramic multinational is in the
Ras Al Khaimah. It is a public shareholding
company with H.H. Sheikh Saud Bin Saqr Al
Qassimi. He is the Crown Prince & Deputy
Ruler of Ras Al Khaimah as the Chairman and
Dr. Khater Massaad as the Chief Executive
Officer. It has worldwide sales of over USD
one billion. To build a world standard for
quality and beauty, the company basically
starts manufacturing. They start their first
production in 1991. Within 19 years it became
a world class organization.

5. Company overview
RAK Ceramics (Bangladesh) was incorporated in 26 November,
1998. It is a joint venture company with UAE. It was first
incorporated as a public limited company. Now it is public limited
company and changed its name from RAK Ceramics (Bangladesh)
Private Limited to RAK Ceramics (Bangladesh) Limited on 10
June, 2008. They are now manufacturing ceramics tiles, bathroom
sets and all types of sanitary ware

6. Logistics activities
1. Transportation
2. Inventory
management
3. Order
processing
1. Warehousing
2. Purchasing
3. Packaging
4. Materials
handling
Primary activities Secondary activities

7. Inbound logistics:
 Raw materials Acquisition
Clay
Color Pigment
Cerfrit

8. Raw material Suppliers:
90% of raw materials of RAK ceramics is are
imported from outside the country. The main
raw materials supplier of RAK is Global
Business Association (GBA) and the supplies
are dealt in ordering process. GBA is a sister
concern of RAK and it also supplies raw
materials to other company’s also. RAK places
an order of the list of raw materials and GBA
supplies the raw materials. Cerfrit a company
from Spain supplies “cerfrit” for using in colors.
Color pigment is supplied by GBA which is
collected from Italy.

9. Shipment of Raw materials (Transportation):
After placing the order to GBA, raw materials are sent by ship to Chittagong port and
sometimes in Naryanganj from Chittagong port. From there Cargo trucks are used to
carry the clay to their production plant. Spare parts for their machineries are collected
from “SACMI” which is a giant of manufacturing machines and completing plants and
it’s an Italian company.

10. Shipment of Raw materials (Transportation):

11. Transportation cost:

12. Inventory Management:
The inventory management job is mainly assigned to Store department and
accounts department. Accounts department is in charge of raw materials inventory. Raw
materials are purchased and stored in the amount of 6 to 7 months of production. Store
department is in charge of the management of finished goods inventory. RAK takes extra
precautions for not damaging or wasting raw materials and extra security for preventing the
risk of theft

13. Inventory Management (continued):
RAK ceramics have the most advanced production facility for producing tiles and
sanitary ware. They have one production plant for tiles which covers all the production
activities. RAK also have a Design Development Program under R&D department which
helps to create new design for the customers. In this department, RAK have invested a
huge amount to gain advantage over competitors in designing. They are using SACMI
technology in their production plant which comes from Italy.

14. Outbound Logistics
Outbound logistics deal with distribution of finished goods.
 Pull and Push Demands of finished inventory:
RAK has push demand philosophy. Normally it determines a steady demand of tiles.
According to demand, it supplies tiles to 54 dealer, 54 dealers supply to various sub-
dealers and to customers. RAK use forecasting models like moving or weighted
moving average to determine their demands. Moreover it uses pull strategy to supply
industrial users.

15. Distribution Process:
 RAK ceramics follows simple distribution process to get products to
end users by minimizing complications. They follow 4 level
distribution channels which consist of manufacturer, dealers, sub
dealers, consumers.

16. Distribution Process:
 RAK follows selective distribution which means they distribute
products only few distributors. They don’t have their own
distribution channel; they use dealers to distribute their products.
Currently RAK has 38 dealers all over Bangladesh.

17. Distribution Process:
They directly control their dealers through 4
state managers in six divisions. Dealers are
allowed to appoint sub dealers to sell
RAK’s product but RAK does not control
them. RAK ceramics distribution process
starts from stock department. Stock
department stores finished goods in the
warehouse. Dealers are informed from the
warehouse that their goods are ready for
delivery and they arrive to receive the
delivery from warehouse for distribution.

18. Supply of finished goods
(Transportation)
 RAK does not have its own transportation mode for distribute tiles. 54
dealers of whole country uses their own transportation mode. Sometimes it
distribute tiles to industrial users using rented truck. It determines
transportation cost 4 taka per square feet

19. Order cycle:
RAK has a unique order cycle procedure. It has weekly demands of more than
4,00,000 square feet. That’s why it keeps 2,20,000 square feet safety
stock(Calculation is given to next slide). When orders come on hand, it takes 1
or 2 days to process them. Dealers keep 1 day to take inventory to their
warehouse. For arriving to customers, it takes another 3 days. So total order
cycle time is 7 or 8 days.
1 day
Retailer
Outlet
Dealer
Dealer RAK
Warehouse
1 day 1 day
1day
3 day
Factory
0day
5 days

20. Safety stock calculation
 Average daily demand = 57,143 sqrf per day (4,00,000sqf / 7)
 Maximum daily demand = 84,580 sqrf (recorded in 12 October, 2014)
 Lead time = 8 days
 Safety stock = (Maximum Daily Demand − Average Daily demand) × Lead Time
= (84,580 – 57,143) × 8
= 2,19,496 ~ 2,20.000 sqr feet

21. Logistics product
Logistics products three types: convenience product, shopping
product and specialty product. Tiles are shopping product as they
are purchased after careful investigation and brand comparison. For
this reason, RAK makes all information about tiles available on its
website

22. Pricing strategy:
 RAK follows uniform pricing strategy. It uses the term ‘maximum retail
price (MRP)’ to sell in same all over the country
Warehouse:
• RAK has two warehouses at Gazipur beside its production house. One for
storing raw materials and rest is for storing finished goods. Warehouse is
established to conduct indirect sales. Goods are stored into warehouse
according to the distributors’ requirement. Supply the goods to the distributors
by checking invoice. The local distributor that is the distributors of Dhaka
City collects products by their own arrangement

23. Materials handling
 In Gres Procellanato (porcelain / fully vitrified tiles), the company produces
hundreds of glazed and unglazed porcelain, covering finishes such as polished,
unpolished, rustic, Slate etc.
In Bangladesh with three fold expansion Drive Company has reach capacity to
produce over 8 million square meters of tiles per annum & has over 1000
different tiles models recipe

24. Latest equipment & technological
application:
Some unique patterns and finishes: are acquired through new
technologies such as Root Printing, Double charge, Granitic etc.
Some unique “antique style” finishes and many specialized finishes
in tiles have been possible due to such advanced Gres Procellanato
technology

25. Modern European machinery:
Computer controlled guided vehicles transferred semi finished
goods from station to station, robots picked and placed semi
finished tiles in many production steps as well as in sorting and
packing the finished tiles, skilled technicians in sophisticated
control rooms monitored raw materials in blending mills, wet and
dry grinding vessels, presses, kilns, drying and cooling cycles, and
many other operations

26. Ceramist R & D activity:
 Active team of ceramist to challenge customer demand & device cost effective
input recipe solutions
Recently RAK introduced Robotic
Sprayer for glazing on the surface
of Tiles. Moreover, Double
Flushing, Soft Closing Hinges,
Spreader of urinal bowl are the
exclusive accessories. RAK is also
producing all type of seat & cover
ourselves in our factory

27. Marketing, sales and service:
 RAK ceramics is the market leader in ceramics production in Bangladesh.RAK ceramics
mainly emphasize on commercial production for meeting domestic demand but they also
have industrial production which is not in massive condition due to low demand and
huge affordability issue by industries in Bangladesh. But if a company places order for
industrial tiles they fulfill their demand. RAK have a good marketing department for
marketing which is in the main headquarters in Uttara. RAK ceramics sales force is
mainly used to convince owners of industry firms to use RAK ceramics because industry
productions of ceramics product have high durability and price.

28. Marketing, sales and service:
 To provide good support to these buyers, the sales force is mainly used for any
complaining and ordering and also providing important information. The process mainly
starts from industry placing order with specifications to dealers of RAK, sales force
contacts with the buyer to provide more specific information and details along with
pricing and choice, sales force confirms their specifications and sends it to RAK. RAK
ceramics go to the production and send their product via dealer to the desired person.
This is the role of sales force which plays a vital role in selling industrial products. RAK
ceramic doesn’t use any direct selling in marketing, if a customer place order from RAK
head office where they have a showroom, then instead of selling directly to them RAK
provides reference of nearby dealers to their location for providing convenient support.
As it is mentioned before, RAK ceramics uses sales force for industry buyers and
dealers reference for normal customers.

29. Marketing Research and
Planning:
 RAK display new design of tiles and sanitary wares in their main
head office for getting feedback from customer about the new
design. This new design mainly is the reflection of ongoing global
trend around the world or the new design of RAK UAE which is a
great success worldwide

30. Advertising and Promoting:
 RAK ceramics doesn’t
follow massive advertising
technique for promoting
because of their superior
position in the market and
huge demand helps to
promote their product itself.
But RAK still do some
advertising via billboards
and some promotional
activities in Boishakhi TV
by sponsoring some shows,
because the Managing
Director of RAK ceramics is
the 25% owner of Boishakhi
TV

31. Support from Dealer:
 RAK ceramics have 54 dealers around the country which are handpicked by
them after judging their portfolio. These dealers provide great support to RAK
for capturing and enabling the product to get available in market. RAK
ceramics tries to give full support on their activities for making them more
flexible and dealers also provide support for making the product more available
in market. From RAK’s point of view, by the support, help and loyalty from
these dealers have helped them to spread the product in whole country and they
also played a huge role for their current market position

32. Service:
 RAK ceramics doesn’t have a specialized service center for customers because
it isn’t required in that extend. But they provide full support to the customers by
providing information and details of tiles before purchasing to avoid deceptive
selling