Overall Functions of Shovon Group of Companies

Origin of the study

The garments industry is booming in Bangladesh, especially after elimination of the global quota system. Presently Canada exporting garments to more than70 countries including US, EU, Latin America, and Middle East. Last year, garments export was nearly $5300 million and about 700 million pieces. The main competitors of Bangladesh are countries like Chain, India, Sri-Lanka, and Hong Kong etc.

The Ready Mate Garment (RMG) industry dwells in a unique position in the Bangladesh economy. RMG has evolved as the main export earning sector of Bangladesh, which experienced phenomenal growth during the last 30 years. Over the last two decades journey the readymade garment (RMG) industry has secured its position as the main source of growth of our exports, employment and economic development through industrialization in Bangladesh. This industry is directly employing nearly 305 million people and 80% of them are females who are mostly the poorest rural households.

Commercial activates are the most valuable for any Ready Mate Garment industry. Commercial is a process or function for what to buy & how to buy for sale Merchandising is part of marketing process where 4 processes are required to complete the process of marketing: Product, Price, Place and Promotion. Merchandising covers 3 processes: Products, Price, and Place.  Merchandising word has been generated from Merchant or Shopkeeper. The duty of the shopkeeper is to arrange the right products with right price before the consumer decides to buy or knows about the product from promotion or media. If he fails to supply goods on time or fails to supply the right

Packaging his customer will go to other shops & buy the products from competitors who have them in stock.

The word came from the work “Merchandise” and its mean buying and selling something. The person who dealing with the merchandise is called Merchandiser. If it is apparel product then the person is called apparel Merchandiser.

Oxford Advance Learner’s Dictionary – The activity of selling goods, or of trying to sell them.

The BBA program conducted by Bangladesh Islami University of Bangladesh; this program has been designed for the students and the businessman to provide basic information and practical knowledge in the job activities in the context of Bangladesh as well as world wide. Since the BBA program is an integrated, practical and theoretical method of learning the students of the program are required to have practical exposure in any kind of business organization in the last term of the course.  

Objectives of the Study

Main Objective

The main objective of the study is to know A Study on functions of Shovon Group of Companies Limited.  

Specific Objectives

The specific objectives of A Study on functions of Shovon Group of Companies Ltd.

 To gather knowledge about the organization and the Commercial department.

To identify and analysis the steps of Commercial activities of the Shovon Group of Companies Ltd.

• To synthesize the findings and draw recommendations.
• To identity the different process of Commercial activates are taken by Shovon Group of Companies Ltd.
• To know the market demand & position.
• To know about competitors.

Scope of the Study

According to the course requirement of BBA program of Bangladesh Islami University, each student has to prepare a Internship Report. A topic has been selected as discussed with the honorable course coordinator. I took this topic as I have a great desire to work at Commercial Department and as I am a practical internee in the Commercial activities, so, I have a great opportunity to enjoy making a quality report on the topic “Overall Functions of Shovon Group of Companies Limited with special emphasize to marketing”. Basis of my practical experience on the Commercial activities as well as theoretical knowledge, I have completed the report. The report is based on the operational Functions of Shovon Group of Companies Limited with special emphasize to marketing.

Methodology of the study

For smooth and accurate study every one have to follow some rules and regulation. The study impute were collected from two sources:

Primary source

• Face to face conversation with the officers.
• Practical desk work.
• Relevant file study as provided by the concerned officers.
• Direct observation.

Secondary data sources

• Different official circulars issued by the BKMEA.
• Annual reports of the Shovon Group of Companies Ltd.
• Company profile of the Shovon Group of Companies Ltd.
• Files and Folders.
• Various manuals of Shovon Group of Companies Ltd.
• Extensive literature search on the basis of these documents of publication.
• Newspapers, magazines, periodicals, and other pertinent articles.

 Time schedule of the study

For this kind of report paper its need much more time. But I’ve got a very short time for this. So it was so tough for me to know about the proper Commercial. It was not possible to me to know and include all kind of detail information on the report paper within this short time.

Limitations of the study

During the prepared this report, I tried for the best use of my time. My report could be more accurate and effective if I could have overcome the following problems –

Time limitation for this kind of report paper its need much more time. But I’ve got a very short time for this. So it was so tough for me to know about the proper Commercial. It was not possible to me to know and include all kind of detail information on the report paper within this short time.

Limitation of Data Commercial is properly a practical matter. So there is no hues written data, journal, book about Commercial.

Limitation of internet information In the website there is not enough proper data and documents about this topic. So it is very difficult to prepare a report on this topic.

Money Limitation For this kind of report papers its need more time. But I have got a very short time for this. It was not possible to me to know and include all kind of detail information on the report paper within this short time. 

Company Profile of the Shovon Group of Companies Ltd.

Company Background

 Shovon Group is a renowned enterprise since 1991 with import & export right that specializes for deployment of design & production of knitwear & sweater. Shovon Group is located in Narayanganj, one of the industrial cities of Bangladesh. Having an area about 3,80,000 sft, with an employment of over 8,000 people.

Aiming at continuous and steady development, Shovon group has established the development philosophy of deserving the market and development of the company. It seeks co-operation based on credit standing, better service and mutual benefit.

Shovon group dedicated to exploring the wide international clothing market and seeking more international partners for the glory in the 21st century.

Shovon Group is equipped with all modern machineries for Knitting, Fabrics, Dyeing, Yarn Dyeing, Sewing, Embroidery, Woven label, Printing & Packaging, Zipper at the same premises.

Mission & Vision

Our endeavor will continue to ensure quality and high standard in every activity whatever we are engaged with.

Developing and promoting the ready-made apparel sector, Creating customers need through manufacturing and supplying quality products.  

Management

The Management is crowned with vast experienced, energetic, dynamic and dedicated personalities.

• Chairman                             : Abu Ahmed Siddique
• Managing Director                        : Iqbal Yousuf Shovon
• Director                                : Taufiqul Islam Antu
• Former Vice President          : Bangladesh Knitwears Manufacturers and Exporters Associations. (BKMEA)

Business Growth

Shovon Group of Companies Limited has accelerated its growth amazingly- the under mentioned volume is self explanatory.

Focus on the growth                 

Focus on the turnover

Clients

We are proud to have the reputed names of the apparel market in our products of many famous brands, as follows.

Products

• T-Shirt
• Tank Top
• Polo -Shirt

Production Facilities

Modernistic woven apparel manufacturing techniques have been customized to comply with Shovon Group of Companies Limited’s production process and adopted in its facilities to ensure optimum efficiency.

Shovon Group of Companies Limited uses latest machines to ensure its production and is well equipment with all required machines of its own. There are also some specialized machines for special products. Shovon Group of Companies Limited has pocket welt, Blind Stitch, Pressing Puller, Garments press, Bias and clothing, Metal stone Fixing and some other specialized machines.

Shovon Group of Companies Limited employs over 15000 skilled workers and around 300 supervisors and managerial staffs its production facilities for its smooth running.

 Quality Assurance

Our focus is on quality rather than quantity. We are committed to produce at the highest level & never compromised quality with quantity. We have earned a reputation for being maker of quality: Shovon Group of Companies Limited ensures strict quality control measures where each product that has to go through a series of through scrutiny. Here we try to make products that not only meet our clients required criteria but also give them recognition to our Quality Management System. We’ve achieve ISO 9001:2000 Standard Certificate, WRAP Certified, BSCI Standard Audit (Status-Good). This has resulted in better performance for all operators and all supervisory staffs.

Work Place Environment

Environment is an important factor to get the best performance from all employees. Shovon Group of Companies Limited strictly maintains healthy & hygienic provision as per ILO and Bangladesh Labor Laws & regulations. Shovon Group of Companies Limited sures required working space for moving and performing operations smoothly: We also provided a safe, well ventilated and healthy working area. There are proper and sufficient arrangements for dining, safe drinking water, hygienic toilets.  
Regarding work place safety, we take maximum precautions against fire, mechanical and chemical hazards. There are clearly marked evacuation zone and routes to be used in emergencies along with fire safety equipments like fire hydrant, smoke, fire detector, gas musk. The following facilities are available for employees including a daycare center for employees’ children.

• Full time doctors with three beds are available in the factory premises.
• Day care unit for children.
• Free work time medical assistance, medicine, and proper first aid boxes are provided.
• Trained fire fighting team along with training program & drill for fire escaping are fully followed every month.

Incentive & Other Facilities

We are extending facilities to workers to encourage them for better performance. At present we are giving attendance bonus, Efficiency Bonus and employee of The Month Prize in cash commodity for serving 3 years, 5 years, 10 years and 12 years etc. For Minimum of 2 years serving to Shovon Group of Companies Limited, 3 people from all employees and workers will get a chance to participate in the yearly HAJJ program. We are now even planning for workers profit participation scheme.

Compliance & HRD

The company is very much aware of and maintaining the buyer’s as such:

• Adequate working area.
• Well ventilated and well lighted.
• Provision of hygienic toilets facilities.
• Adequate supply of filtered drinking water.
• Adequate fire equipments are provided in all working area.
• Adequate safety exits are provided.

We maintain the local labor laws, rules and regulations for payment of wages.
To keep pace with ever-changing global market demand and make the best use of updated technologies we regularly arrange training on upgrading skill.

We have achieved WRAP certificate and are maintaining its all principles to uphold the rights of workers.

Sister Concerns

• Shovon Silk & Knitting Mills (pvt) Ltd.
• Iqbal Texware Limited
• Shovon Knitting Limited
• Shovon Dyeing Limited
• Taufiq Sweater Limited
• Shovon Yarn Dyeing Limited
• Shovon Labels Limited
• Shovon Embroidery Limited
• Shovon Packaging & Accessories Ltd.
• Shovon Zipper Limited
• AMZ Print House

Conceptual Framework

According to BKMEA (2011) RMG contributes 75% of total exports in Bangladesh. The Bangladeshi garment industry is gaining ground in the world market at breakneck speed, but still not flourished at its fullest extent. Already the resources are available plentiful with a powerful foundation of fabric and spinning sector to support. The key factors behind this low technological development, lower output, cut throat competition, high raw material cost, inadequate infrastructure, traditional productivity, unfavorable regulatory policies, and globalization impact. However, there is a fair list of producers, suppliers, and exporters that are fully acknowledged with regulatory policies and formalities, international marketing policies and procedures. The only concern is in executing their productivity initiatives, and with order deadlines. Merchandiser has to understand the buyer’s requirements after receiving specification in the sample order. In many cases, there are modifications pertaining to the specifications in the order to dispatch on time and the right quality. He has to talk with the in-house veterans on the execution problems of sample orders, as the right information is required in decision making.

Engr. Md. Faruk Hosen (2010) Merchandiser has to manage every single production schedule and order route card that helps to follow-up the execution in the planned way. Merchandiser plans the activities depending on the essential or non-essentials, and top priority is given to the most essential tasks. In a daily schedule, merchandiser has to carry out and categorize is the most significant and urgent task. To get update on the current status on the order, the route cards should be utilized. The latest status can be fed into the computers. In case, the buyer ask for the goods prior to the deadline, then merchandiser has to reorganize the schedules to accomplish tasks, output capacity, no. of pieces to be produced daily, substitute arrangements, time availability, supply time, scheduling

Critical ratio etc. Merchandiser control the mark-up and margins, to cover expenses and to produce a profit in the buying budget

Medule Pal Mantua (2011) Today’s garments Commercial have to move with frequent changes in demand and the developing technologies utilized in manufacturing and production. To find out customer requirements, they regularly visit retail outlets, and come up with latest updates from frontline staff. In order to keep an eye on developments in sourcing, site visits are made every week to mainland factories to meet suppliers and study production. In garment Commercial, there is no specific rule, so it’s important to able to think on one’s feet.  Commercial and Merchandiser follows-up and takes total responsibility of an order form booking to shipment and beyond, for the customer who placed it and for his company’s management.

M.A. Razzaque (2010) the order is the first ‘official’ document that the vendor will receive from the buyer (Customer).  Every order describes the product and orders a certain quantity, at a negotiated price, to be delivered by a certain date.

“Commercial” is termed as the person who trade-offs the goods, especially for export purposes.

Kitty G. Dickerson (2009) A Commercial and merchandiser is the only one who can remove the problems. He studies the P.O. sheets from point to point. Commercial and Merchandisers make key decisions that what can be created for the next years fashion trends. This decision must be based upon an in-depth under standing of their company’s target market. This requires current, accurate and reliable information. Apparel merchandisers must participate in developing the proper marketing mix for their target markets. The primary variables involved in the marketing mix can be expressed by the four ‘P’s of marketing. They are- product, creating the right garment in terms of

silhouette, fabric, color and fit for the current needs of the target market. Product also includes the proper product mix within a line of clothing. 

According to Executive Director of Commercial Department of Shovon Group of Companies Limited: Export processing for the Garments Product Ltd. Commercial Play is a vital role of foreign Exchange Business.

According to Commercial Manager of Shovon Group of Companies Limited;   Export capacity is vital in the Commercial activates. Who Commercial is efficient in the Export capacity this Commercial easily provide garments at a time.  

Commercial Means Something related to buying and selling things here is a sentence; the Commercial future of the company look very promising.

Commercial is the same as commercial, if we are using the word in Spanish or Portuguese. If we are writing in English it means we can not spell.

Commercial Department

In Shovon Group of Companies Limited of Commercial Department has a vital role for developing skilled, efficient, dynamic manpower that easily perform their Commercial activities for just time shipment. Shovon Group of Companies Limited of Industries has goodwill in the market for quality garments provide and just time shipment.

Figure: Commercial Department

Function of a Commercial

When an export order is placed to a Commercial, he has to schedule the following main functions-

•  Fabric & accessories   
• Proforma  Invoice Collection
• Costing.
• Back to Back L/C Open.
• Arrange shipping documents and Collection of inspection certificate.

Distribution Process

The Company supplies its products from its own factory premises at customers’ own risk against delivery order. We may demonstrate the distribution process as follows:

Marketing Strategy

Merchandisers should have a proper marketing strategy. They should examine the factors involved in developing a detailed understanding a target market. Evaluate the importance of market segmentation and alternate marketing and proper methods of data collection and industry information sources. Merchandisers make key decisions that what can be created for the next years fashion trends. This decision must be based upon an in-depth under standing of their company’s target market. This requires current, accurate and reliable information.

Factors of Commercial

Modern apparel mere subtle changes occurring in their target market in environment. Social changes, work ethics, leisure-time activities, music movies, the arts, physical fitness, vacation choice, eating trends, attitudes, philosophies of life, geopolitics, reading habits, language, the global economy and even climatic changes all have an effect on fashion preferences. The Commercial must be able to tune in to all these factors and project how they will affect next years fashion choice.

Require Information Need Inquire About an Order

Inquire means asks for information about specific matter. Before confirming an order Commercial needs some important information from banker, it may be about –

• Proforma Invoice
• Commercial  Invoice
• Packing  List
• Trims & accessories- Types of trims & accessories, also is it nominate or not.

Corresponding

Corresponding is the technique of communication, by corresponding  any body can express about their self, Correspond can done by different way like- Fax, phone, Face to face, mail, E-mail, Live chat by chatting software.

Stages of corresponding-Corresponding needs in different stage about an order, like-

• Inquiry – Inquire about a goods.
• Sourcing- For sourcing raw material.
• Sampling- Any comments about sample also lab test.
• Price- For negotiate price.
• L/C with order confirmation- Any comments for amendment L/C.
• Follow up order- Production per day.
• Final inspection- Inspection time & who will do this inspection.
• Shipment- About ship the goods with freight forwarder also buyer.
•  Draw money- After shipment ask for acceptance for draw money

Different Types of Documents:

1. Commercial  invoice
2. Packing  list
3. Shipping Bill
4. GSP
5. Certificate  of  origin
6. EXP
7. Inspection Certificate etc.

Negotiation with Buyer

A successful negotiation outcome does not generally occur through luck, but by following a clear process. The process reflects the different levels of knowledge of the subject of negotiation, various parties and the way they communicate at various stages in the negotiation. The following is an outline of steps essential to effective negotiation:

Preparation

Effective preparation is also vital to successful communication. It is essential that the banker also has identified the maximum and minimum positions that will accept for a range of factors including:

• Product price
• Order size
• Lead- time

Offer

The buyer and supplier can make specific proposals to set the boundaries of the negotiation.

Counter and Revised Offer

This is the real bargaining where elements of the order, such as number of units, product details, and lead-time are being decided in the context of an overall cost price the buyer should make firm proposals.

 Long Term Business Relation

Buyer need short lead time, Quality full product with reasonable price, If we can full fill buyer requirement, also achieve faith, then we can able to make long term  business relation with buyer.

Process Flow Chart of Commercial

Planning & Controlling

Effective planning and controlling are two important functions of Commercial. These actions encompass all departments of an apparel company. In nearly all the companies surveyed, Commercial is responsible for critical planning and Export functions, such as the following:

• The Commercial plays a vital role in strategic planning along with Export processing, sales, production, finance and administration.
• Commercial must ensure timely line development in accordance with banker needs and the company’s capacity and capability.
• The Commercial must integrate company functions within the total supply chain, which is very complex in connection with global sourcing of both raw materials and Exporting System.
• In large companies, the Commercial coordinates inter company activates with other department.

There are some tools which are the helping agents for proper planning and controlling. Marketing calendar is a base of company planning. It establishes the line preview date, which is the date when management will review proposed style with sales; the line release date, which is when the line will be available for sale or retailers; the sales plan and the shipping plan. The Commercial calendar is the primary control tool in an apparel company. It establishes responsibilities and deadlines for all key events for a session.

• Garments production planning (sample section, production section, quality control section, finishing section, store etc)
• Pre-shipment inspection schedule.
• Final inspection schedule.

 Shipment of garments

• Mode of transportation (Sea, Air)
• Shipping lines (own/buyer)
• FOB/CNF/CIF  (Cost and Freight, Cost Insurance Freight)
• Export documents.

The quantity of fabric which is require to produce a garment is called consumption, we can calculate consumption of fabric by the following system-

Sourcing of Materials

The term sourcing implies the processes involved in procurement of the desired merchandise at the best bargain from the most suitable source, with the objective of optimizing the cost, efforts and time. Sourcing can also be defined as the process of identifying, conducting negotiations with, and forming supply agreements with vendors of goods and services.

Raw Materials and the Name of the Principal Suppliers

Basic raw materials used for production process are yarn and accessories, which are procured from both domestic and foreign sources. Principal raw material suppliers of the Company are as follows:

 Sourcing Options

• Producers (Mills, factories, etc. Large producers will usually sell though through regional sales offices).
• Distributors (Middlemen/ Agent).
• Converters (purchase fabrics from these mills and then print or dye the fabric before selling it).

The activity involves ordering of fabric and its important points to be taken care of during this activity are:

• Accurate computation of the requirement. This is essential to ensure that during bulk production the materials do not fall short nor are they in access and there are leftovers after the order is shipped. An accurate calculation of material requirement can be done if the BOM (bill of materials) as provided by the buyer in the specifications sheet is studied thoroughly. Apart from just ensuring that the quantity is correct the BOM also helps in checking that all materials required in completion of the order are ordered and nothing has been missed out.
• Selecting the best vendor for the materials in terms of Quality, Price, and Delivery

Method of Purchasing Raw Material

After confirm an order first process is perch aging raw materials. So-

• First determined what are the raw materials need for make this product.
• Source supplier if not nominated by buyer.
• Ask for sample from supplier and check quality.
• After check quality if it okay then ask for PI.
• Negotiate the price with supplier.
• Issue a back to back L/C.
• Give supplier a work order.

Above mention process also require in case of imported goods

Process of Production Planning

To make production plan we have to consider below mention thing-

Garments Analysis

Garments analysis is very important to make production schedule & know about the operation capacity, so that the specific job will be complete smoothly.

Balance Load & Capacity

• Load=How much work we are putting on section
• Load= contract size X work content
• Capacity: How much work a section in capable of completing.
• Capacity = No of worker X working minute X Efficiency X percents

Arrange the program of works, so that load can be achieved, after balancing load &            capacity we make a proper production plan that help us achieve production target     within time boundary.

 Sea freight-

Sea freight is charge one a volume (CBM) basic. Firstly, the volume of a carton is calculated by multiplying the length by the width also by the height of the carton. Secondly the freight charges for the delivered merchandise can be calculated by multiplying the volume of a carton by the total number of needed carton by the price charged per cubic meter (CBM).

Sea freight charges = volume per carton in CBM X number of carton X cost of sea freight per CBM

Where volume per carton (CBM)

= (Length (cm) / 100) X (width (cm) / 100) X (Height (cm) / 100)

OR

= length (Inc) X Width (Inc) X Height (Inc) / 1728 X 35032

Air freight

Air freight changed may changed it may weight basic or volume basic, most of the cases it depends which is grater.

Air charged basing on volume weight = Volume weight per carton (Kg) X number of carton x cost of air freight per Kg

Where, Volume weight per carton (kg)

= Length (Cm) X width (cm) x Height (cm) / 6000

Or

= Length (Inc) X weight (Inc) X Height (Inc) / 366

Important Documentations

Proper documentation leads proper management. In garments merchandising, the merchandisers has to maintain all of the documents perfectly. A single mistake or wrong information can hamper a huge production. Every year many of our Bangladeshi garments get defeat of huge amounts because of miss documentation or miss understanding the documents. Some important documentation is described below.

 Sourcing Documents

One of the essential elements of sourcing is the documentation and formulation of agreements involving the parties concerned. A thorough understanding of the documentation involved in sourcing is a key requirement for a merchandiser. Once the buyer and exporter have entered into the Underlying Contract, it is followed by formulation of the Letter of Credit, which acts as the primary document for all further transactions and documentation. There are a couple of additional documents accompanying the Letter of Credit, mentioned hereunder.

• Bill of Lasing
• Insurance Documents
• Invoice
• Certificates of Origin
• Order Confirmation Documents
• Import Documents
• Received Materials Document
• Documentation During Production
• Export Documents
• Weight note or Packing List
• Air Waybill / Shipping  bill 

Problems Facing in Shovon Group of Companies Ltd.

• Decision making power centralized
• Commercial activities critical
• Information not available
• Working process critical
• Data record system manual
• Training department not modernized (not use multimedia)
• Quality justify process are short time
• Not adopting technology

Recommendations

The major recommendations of the study are as follows

1. Decision making power should be decentralized effectively and promptly be enhanced of the Commercial Department of Shovon Group of Companies Limited
2. Analysis of the Commercial activates of Shovon Group of Companies Ltd. should be adopting with current Exporting of other industries.
3. Current data oriented activates should analyzed by the Shovon Group of Companies Ltd. in the Commercial activities Exporting.
4. A handsome number of qualities full Commercial and Assistant Commercial should be appointed very soon for maintaining the normal flow of work.
5. Filing and Records keeping system of the Shovon Group of Companies Ltd.  should be modernized. At present operation system is partially computerized should be started very soon.
6. Training Department should be modernized with projector and multimedia in Shovon Group of Companies Ltd.
7. Shovon Group of Companies Ltd.  should attract the qualified Commercial by appointing them in a short time process.
8. Maximum Commercial should provide proper training for   collecting buyer to foreign country. 
9. Information Technology Department should well equipped and high expertise in Shovon Group of Companies Ltd.
10. Some Commercial should provide adequate knowledge of fiber, yarn, fabric, dyeing, printing, finishing, dyes, color fastness, garments production, etc.
11. Shovon Group of Companies Ltd.  should set up modern scientific tools to collect the Commercial activities related information in time and proper way. 

Conclusion

Shovon Group of Companies Ltd. is a leading player in the RMG sector in Bangladesh. It has a moderate Commercial Department striving for further development. The Commercial Department is well organized and well furnished. It has all sorts of modern facilities like Training materials. The Commercial team highly qualified and competent. The entire Commercial in Shovon Group of Companies Ltd.  is equally treated; there is internal equity as well as external equity. The Commercial at Shovon Group of Companies Ltd. are given incentives and rewards so that motivation and encouragement is expressed. The skills of Commercial are developed through proper training & development phases. This becomes a major factor in the career growth of a Commercial. The Commercial Department is doing a very satisfying job with the Commercial, yet there is always some room for improvement.

We understand that most of the Commercial may technically sound enough. But the main lacking is that they are weak in “Management Skills”. Our main Objective of this program is to open their eyes to areas where they are lacking & to give some important hints do their job in more effective way.