7/25/2019 Supply Chain Management of Poultry in Barisal Region
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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.
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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.
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!. "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.
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!.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.
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!.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@
-ssociated cost (6"?6) 6"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#$?6?6.!) 6A"1@
-ssociated cost (6"?6) 6"1@
Total cost #""1@
Selling price(6>#?6?6.!) #681@
Profit 681@
(()ote e assume that the weight of each roiler is 6.! kilogram. The market price of
wholesaling of 6 kg poultry is 6># Tk on "$."8.#"6!.
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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.
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!.! /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
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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
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)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>"
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• "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
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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
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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.
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<. 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.
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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.
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