Supply Chain Management Practices in Bangladesh: A Case Study on Meghna Group of Industries (MGI)

Abstract

Meghna Group of Industries (MGI) is a one of the largest Bangladeshi industrial conglomerates. Fast moving consumer goods (FMCG) division is one of the biggest portion revenue earner (2000 crore per year) of Meghna Group of Industries (MGI), which contributes to growth in national economy of Bangladesh. To bring efficiency and effectiveness MGI established supply chain management department in 2011. During that period supply chain management department only control distribution. MGI represents a global enterprise and brand that houses more than 50,000 employees, 6,300 distributors and 15,000 suppliers under its umbrella and has an annual turnover of approximately $2.8 billion. From 2013 procurement, inventory, production, planning, distribution, depot management administer by supply chain management department, to minimize the cost and maximize the profit. The secret to the success and vast expansion of MGI has been diversification. The group has entered a broad array of different markets and industries including Fast Moving Consumer Goods (FMCG), building materials, pulp and paper, LPG, feeds, fiber, power plants, shipping, seeds crushing, chemicals, ship building, dockyard, securities, insurance, media and aviation. The product range of MGI today is truly impressive and the conglomerate markets most of its products under the recognizable brand names of "Fresh", "No.1", "Actifit", "Pure" and "Meghnacem Deluxe". The result of this level of reach and diversification has been that one in every two households in Bangladesh uses MGI products. Internationally MGI has a substantial presence in the Middle East, Southeast Asia, Europe, South Africa, and North and South America. As a result of this relentless process of expansion MGI has become a powerful player within Bangladesh and has become the largest investor in relation to industrial development in Bangladesh over the last few years. MGI became the first company in Bangladesh to establish a private economic zone known as the "Meghna Economic Zone", which has since been followed by the creation of two further economic zones, which are named ―Meghna Industrial Economic Zone‖ and ―Cumilla Economic Zone‖ respectively. The conglomerate has expanded even further since this point, with an unprecedented investment of $451 million in 2020 that has erected nine new industrial units within its multiple economic zones. Throughout this process the unwavering commitment of its visionary leader, Mostafa Kamal, has been pivotal for both the conglomerate and the Bangladeshi Economy. Renowned for his entrepreneurial expertise and patriotism, Mostafa Kamal has played a key role in the development of industry, healthcare, education, sports and social welfare in Bangladesh. The integrity and dedication towards the group that he has played a vital part in the overall success of MGI. To achieve its vision MGI gradually change their traditional system to upgrading system. Though it is quite difficult to adapt the new system among the employee, they should train them in where they are lack behind. In spite of lack behind in few areas, because of SCM they able to provide superior value to their customer. SCM department did tremendous performance during the unstable political situation. As an example for the period of hartal, strike they use rail and cargo trailer to ensure smooth delivery process and instead of day they deliver product at night to the party end from depot in 2013. Throughout the Bangladesh they established 11 depots under SCM department and increase 67 % by value through increase sales order. In some cases if they able to adapt with the change in SCM, then MGI SCM will be the model for Bangladeshi FMCG Industry.