supply chain management of poultry in barisal region

7/25/2019 Supply Chain Management of Poultry in Barisal Region

http://slidepdf.com/reader/full/supply-chain-management-of-poultry-in-barisal-region 1/13

1.Introduction

Poultry (Broiler) firm is a growing industry in Bangladesh. But the real scenario in Barisal is

not satisfactory. Because most of the retailers and wholesalers have to import from Jessore or

Khulna or Satkhira. There were aout !!"" poultry firms in Barisal in #""$ ut now most of

them have closed down ecause of unskilled laor and proper guide lines. %owever& they

follow a supply chain to deliver their products from supplier to consumer. 'ower income

people can fill the need of nutrition ecause its price is relatively lower than other meat.

e visited some firms and retail stores like Janata trading at upatoli& *amun poultry firm at

upatoli&Baishakhi poultry firm at Ba+ar road& Sugandha poultry house at ,atun Ba+ar etc. to

find out the supply chain process and gap of price among different supply chain level in

poultry firm in Barisal. e try to incorporate all of this in our assignment.

2. What is Supply Chain?

- supply chain is a system of organi+ations& people& and activities& information and resources

involved in moving a product from supplier to customer.

Supply chain activities transform natural resources& raw materials and component into a

finished product that is delivered to the end customer.

Page | 1



3. Supply Chain Stage of Poultry Firm in Barisal City

The poultry firms in Barisal city maintain the following stages

• Supplier (chicks& vaccine &feed / other medicines)

• 0armer1 *anufacturer

• holesaler

• etailer

• 2ustomer

Figure Supply 2hain Stages of Broiler.

Page | 2



!. "he Closer #ie$ of %ach Stages of Supply Chain of Poultry &Broiler'

Industry in "erms of Barisal City

Supplier &1' Suppliers are those who produce the chicks in their own firm and also

manufacture food of chicks& necessary medicine. But in Barisal there is no such type of

suppliers. 3n Bangladesh there are some renowned companies like -fta& Ka+i who produces

chicks and they also manufacture food and necessary vaccine for poultry chicks. Beside this

some other company also manufacture food such 4-gata 0eed *ills ltd5. They usually sell

their products to the local suppliers.

(()ote Supplier (6) is not in Barisal city. So we start our supply chain stage of poultry

usiness in Barisal from supplier.

!.1 Supplier

-ctually these suppliers are the main suppliers in Barisal city. Because they purchase chicks

and other necessaries from supplier (6) and sell these directly to the manufacturers or

farmers. -ctually they purchase chicks and other necessaries in a large lot and reak these

down in smaller 7uantities and sell them to the farmers. They often provide vaccination

facility. Sometimes they provide necessary instructions aout how to grow up& or how to take

care of roiler chicks. They provide these chicks to the farmer within one day.

Page | 3



!.2 Farmer*+anufacturer

*anufacturer uys chicks from different supplier and

grows them in their own facility. They usually

nurture the chicks aout 8"98! days. They play the

ma:or role in the supply chain of poultry. Because

they collects the chicks and take care of them up to

sale. They ear the high risk of poultry firm. -fter

8"98! days each chicks ecome 6.! to 6.; kg. Then it

would e sellale.

hen we oserve the poultry firm& the owner of the

firm has given us aout various necessary

information like how they grow up the chicks& how

many days they nurture the chicks& how much e<penditure is needed to grow up their

products. =n the asis of their information we try to calculate their earnings for one piece of

roiler.

,escription "- Purchasing price (>"?6) >"1@

-ssociated cost (68"?6) 68"1@

Total cost 6$"1@

Selling price(6#$?6?6.!) 6A"1@

Profit #"1@

Source Janata Trading& upatoli& Barisal.

=wned y e+a *orshed Karim

2, "6$6;A$!8>$

(()ote %ere we calculate associated cost y adding the cost of transportation& feeding cost&

medicine cost and 'aor cost. -nd we calculate the selling price y assuming that each

roiler is 6.! kg and their selling price is 6#$ taka per kg.

Page | 4



!.3 Wholesaler

holesalers are the person who uy the product in a large 7uantity and sell them to the

retailer. 3n Barisal city they play a limited role in poultry industry& ecause most of the

retailers uy the product directly from the local producers as well as from the producers

outside the city. 3n Barisal city ther are three or four e<isting wholesalers like Sugandha

Poultry& ipu Poultry and 2hicks& *ollik Poultry and Baishakhi Poultry. They usually

purchase Broiler from Jessore& Khulna& Satkhira& Jhenaidah and from some other local

producers. Though they are wholesaler& their main target is to directly sell to the consumers as

a retailer. -s they purchase mostly from the other city like Jessore& we calculate the profit y

deducting the cost of transportation& laor cost& feeding cost& weight fail cost& mortality cost

from the selling price.

We calculate their profit t$o different $ays.

a. hen they act as retailer

,escription "- Purchasing price (6#$?6?6.!) 6A"1@


Total cost #""1@

Selling price(6>!?6?6.!) #6$1@Profit 6$1@

(()ote -ssociated cost include transportation cost& laor cost& feeding cost and risk

management cost (wait fail cost). e assume that the weight of each roiler is 6.! kilogram.

The market price of 6 kg poultry is 6>! Tk on "$."8.#"6!.

. hen they act as a wholesaler

escription TK

Purchasing price (6#$?6?6.!) 6A"1@


Total cost #""1@

Selling price(6>#?6?6.!) #681@

Profit 681@

(()ote e assume that the weight of each roiler is 6.! kilogram. The market price of

wholesaling of 6 kg poultry is 6># Tk on "$."8.#"6!.

Page | 5



Sometimes they purchase roiler from local manufacturer when the emand of poultry is so

high. But their ma<imum product comes from outside the Barisal region.

Source Sugandha Poultry& ,atun Ba+ar& Barisal.

2, "6$6A!;>C;8.

Page | 6



!.! /etailer

etailers are the marketing intermediaries who purchase products from wholesaler sometimes

directly from the producer and sell them to the consumer. *ost of the retailer of poultry

(Broiler) firm in Barisal 2ity purchase their products from the wholesalers and local

producers. 3n Barisal city there are many retailers like San:ida Poultry firm& *amun Poultry

firm& Dnity Poultry firm etc. -ctually they purchase poultry from the local farmers and

wholesalers and carry them in their retail store at own cost& and store them in their own

facility and finally they sell them to the consumer. 3f a retailer uys 6"" pieces Broiler it takes

ma<imum # days to sell.

These are some retail stores in Barisal city

Price of Poultry &Broiler' at different local mar0et in Barisal city

Page | 7



Why price ary from mar0et to mar0et?

hen we oserve different market place in Barisal city we have seen that the price of Broiler

is different from one market to another market. e have identified some reason ehind this

price variation those are given elow

• Transportation 2ost

• Eariation of Purchasing Price

• *arket Position

• emand of Products.

!. Customer

- customer is a person who purchases products for their own consumption. By passing every

stage finally the roiler reaches the customer hand. They purchase this roiler at different

price ecause the price varies from market to market. 'ike the price per kg. Broiler at %atem

-li 2howmatha Ba+ar is 6>" taka and at ,otun Ba+ar is 6>! taka.

. Why Wholesaler Charges igh Price?

holesaler charge high price ecause of the following reasons

Page | 8

)ame of +ar0et Price&ta0a per 0g.'

%atem -li 2howmatha Ba+ar 6>"

,atun Ba+ar 6>!

upatoli Ba+ar 6!"

Bangla Ba+ar 6!"

Battala Ba+ar 6>!

'aunch ghat Ba+ar 6>"



• "ransportation Cost *ost of the manufacturer firms are out of the Barisal city for

that reasons transportation cost is high for wholesalerF like Jessore& Satkhira& *agura

and other places. Beside this poultry chickens are very easily attacked y many

diseases. So they cannot store them for long time. Thus the transportation costincreases.

Facility Cost *a<imum wholesalers are in the city. 0or that reason wholesaler have to

provide high store rent& e7uipment cost. Besides they have to keep the chicken for some

days as #18 days. That5s why the cost of facility increases.

• Feeding Cost -s wholesaler has to keep chicken for some days& they have to pay

additional cost for feeding their chicken.

4aor Cost To ring from manufacturer and to sell the chicken to the retailer and

customer so they have to hire laor. 0or that reason wholesaler have to pay laor cost.holesaler pays laor cost that5s why total cost of them increases. Therefore& they

charge high price to the chickens.

%lectricity Cost 0or maintaining the chicken wholesalers use electricity. Though

wholesalers use less amount of electricity it increases the total cost of wholesalers.

• Profit +a5imi6ation The main purpose of the wholesaler is to ma<imi+e profit. So

they try to charge price as high as possile.

%5cessie ,emand for Broiler ,owadays the demand for roiler is increasing rapidly

in Barisal city.• )ear +onopoly Condition 3n Barisal city there are ma<imum >1! wholesaler e<ist.

But they are not in same market. So they can control the particular market where their

store is. 0or this reason they have a scope to charge high price.

7. /is0s 8ssociated With "he Wholesaler

• ,eath of Chic0en The death rate of roiler chicken is higher in comparison to other

chicken in the market. Sometimes the wholesalers have to face loses for unusual death of

Page | 9



their chickens. So the death of chicken increases the risk of the wholesalers. Because the

location of manufacturer plant in Barisal is so far from the wholesaler store. -s the

wholesaler in Barisal city transport their chicken from different location like Sawrupkathi&

Gournadi F chicken may die at the time of transportation ecause of aggregate chicken in

a carrier. Broiler chicken cannot tolerate high temperature and too low temperature. So

they can die when they are transported from firm to retail store in case of high and low

temperature.

• ,iseases The Boiler chicken often affected y various diseases like chicken po<. 0or

various diseases poultry industry is in very much risk. So wholesaler have to invest

additional money to decrease the diseases rate .0or that reason their total cost increases.

So the risk also increases.

• ,emand Fluctuation Sometimes the fluctuation of demand increases the risk of

wholesaler in Barisal city. 0or many diseases like Bird9flu the demand may decrease. -s

the per capita income of the people in Barisal city increases day y day& they want to

afford meat. 3t increases the risk of the wholesaler.

• Political Instaility The current situation of politics in our country also affects the

increase of price of roiler in Barisal city. 0rom the eginning of the supply chain it

affects the total price ecause supplier cannot supply chicks to the manufacturer in time

due to strike& lockade and other political instailities. -s a result the normal flow of the

supply chain is reaking down. 3t creates the demand and supply gap and also increases

the price of chicken in Barisal city.

9. :ap Bet$een +anufacturer; Wholesaler and /etailer

hen we oserve the supply chain stages of roiler in Barisal city we have seen that there is

a gap of price etween different stages. The main reason of this gap is associated cost and

Page | 10



risk of each stage. By oserving the different stages we try to find out how much the gap and

what is the reason ehind this. ,ow we show these gap y the following 0igure.

0

2

4

6

8

10

12

14

16

Gap (Tk.)

Gap (Tk.)

Figure Price Gap etween *anufacturer& holesaler and etailer.

Page | 11



<. o$ Customer Can Be Benefited

• Conenience customer can easily purchase roiler from the retail store ecause most

of the retail store are located at a convenience place in Barisal city.

• "ime Barisal city is not so much large. There are many local market like ,otun

Ba+ar& %atem -ki 2howmatha& Battala Ba+ar &Port oad etc. and most of the market

has poultry retail store. -s customers easily purchase from the retail stores they have

to pay less time .• 8ailaility -s retail stores are availale in Barisal 2ity with appropriate supply of

poultry& customer can purchase when it is necessary.

• 4o$ Price price of roiler is relatively lower than other meats.

• 4o$ "ransportation Cost -s customer can purchase from the retail stores& they do

not need to go to manufacturer or producer that ma<imi+e their cost at receiving the

product. So it reduces transportation cost.

=. /ecommendation

• There is no association of the retailer and wholesaler. They can improve their sales as

well as profit y forming associations.

• *ost of the producers are low skilled. They can take training on roiler cultivation.

• Should encourage young generations for the cultivation of roiler.

• Should estalish the roiler retail stores in a separate area ecause it produces ad

smell.

• They can properly manage their wastage.

• They can reduce the price gap y mutual agreement or y forming an association.

Page | 12



1>. Conclusion

By oserving the market of poultry chicken in Barisal we can say that the real scenario is not

satisfactory. etail price of roiler is varying from market to market in Barisal city. Through

our oservation we have found that the wholesalers are en:oying more profits than producers

and retailers. The producers and wholesalers are taking high risks for poultry (roiler).

-lthough the poultry industry is not developed& there is a huge opportunity. Because climate

in Barisal is very suitale for poultry cultivation. 3ts climate is not too hot or too cold and it is

very much suitale for roiler cultivation.

Page | 13

supply chain management of poultry in barisal region

Documents