A TERM PAPERON

By Shoheli Dil Afroz

&

Nushrat Jahan

DEPARTMENT OF BUSINESS ADMINISTRATIONMANARAT INTERNATIONAL UNIVERSITY

April, 2011

A TERM PAPERON

Production and Operations management practices of

“Beverage Industry in Bangladesh”

PREPARED BY

1. Shoheli Dil Afroz0923 BBA 01087

2. Nushrat Jahan

0923 BBA 00972

SUPERVISED BY

Md. Zahidul Islam

2

Lecturer in Management

DEPARTMENT OF BUSINESS ADMINISTRATION

MANARAT INTERNATIONAL UNIVERSITY

April, 2011

April, 2011

The course Teacher

Dept. of Business Administration

Manarat International University

Subject: Submission of Internship report

Dear Sir,

Subject: Submission of the Report on Production and Operations management practices of “Beverage Industry in Bangladesh”

3

Dear Sir,

We would like to thank you for assigning us this subject to

prepare the report. This task has been given us the

opportunity to explore one of the most important aspect of the

Production and operations management, which is very important

in our practical life.

The report contains a comprehensive study on the Production

and Operations management practices of “Beverage Industry in

Bangladesh”. It was a great pleasure for us to have such type

of opportunity to work on this topic. We have endeavor our

best to come out with a good one and also if we do any mistake

(involuntary), then please try to see it in the eyes of

forgiven.

Finally we would like to thank you for valuable guidance &

support in preparing this report. We will be grateful for any

clarification when required. We will be highly obliged if you

are kind enough to approve this report and provide your

valuable judgment on it.

Sincerely Yours,

1. Shoheli Dil Afroz0923 BBA 010872. Nushrat Jahan0923 BBA 00972Department of Business AdministrationManarat International University

TABLE OF CONTENTS

Chapter/ Topic Pag4

topic No eNo

Cover page 1Title page 2

Letter of transmittal 3Executive summary 6-8

1 INTRODUCTION 9-11

1.1 Statement of the research problem 91.2 Scope nd objective of the study 101.3 Methodology of the study 111.4 Limitations of the study 112 AN OVERVIEW OF BEVERAGE INDUSTRY 12-

222.1 Beverage and its conceptual

analysis12

2.2 Historical background 142.3 Beverage industry of Bangladesh 153 FINDINGS AND ANALYSIS 23-

303.1 Production, operation and

technology23

3.2 Beverage production process 233.3 Production design process 263.4 Product growth and recovery 273.5 Competitiveness 283.6 Operation strategy and competitive

priority28

3.7 Quality control 293.8 Facility location and layout 304 SWOT ANALYSIS 31

4.1 Strengths 314.2 Weakness 314.3 Opportunity 314.4 Threats 31

5

5 RECOMMENDATIONS AND CONCLUSION 325.1 RECOMMENDATIONS 325.2 CONCLUSION 32

APPENDIX 33

6

The soft drink manufacturing industry makes and bottles non-

alcoholic carbonated beverages; the soft drink industry was

historically based on a franchise system which characterized

the soft drink industry worldwide. Our study is based on

mainly carbonated beverage. This study is carried to find the

7

practice of production and operation management of beverage

industry of Bangladesh.

Actually the practice of production and operation management

in any organization is mandatory. The company needs production

and operations management for the smooth operation of whole

organization

Main objective of this study is to evaluate the production and

operations management practice of beverage industry of

Bangladesh This work is based on secondary sources. The

secondary sources of data include internet articles, some

foreign and local websites on beverages.

A drink, or beverage, is a liquid specifically produced for

human consumption. In addition to basic needs, beverages form

part of the culture of human society. Types of beverages are

alcoholic and non alcoholic or cold drink and hot drinks.

There are also Bangladeshi beverages.

Carbonated beverage entered into our industry in the later

part of 1980. At that time there were only few companies in

Bangladesh. But by the change of time and western culture

influences it’s become very popular in Bangladesh. By year

2000 more than 12 Beverage Company operating business in

Bangladesh and most of them are foreign companies

Products, Operations & Technology

The manufacture and distribution of most national soda brands,

including Coke and Pepsi, is a two-tiered process. The primary

manufacturer produces flavored syrup called concentrate that

is sold to local bottlers who manufacture and distribute the

8

finished product. Two types of operations followed batch

operation and inline operation

B everage P roduction P rocess

Firstly water is purified then that is carbonized and then

after adding syrup/flavor finished drink is produced .finally

the drink is packaged.

product design process

Most of beverage companies are following continuous process as

they produce very high volume of a fully standardized product.

Production growth rate and recovery

The change is attributed to the other growing sectors of the

non-alcoholic industry including tea and coffee (11.8%) and

bottled water (9.3%). Sports drinks and energy drinks are

also expected to increase in growth as competitors start

adopting new product lines. Domestic soft drinks market shows

a sign of recovery as manufacturers said they posted higher

sales in the first half of 2008 due mainly to a hot summer and

late arrival of monsoon rain. Industry people also attributed

the recovery to relatively stable price level of soft drinks

restoration of confidence among distribution channels as many

retailers. Transcom, company recorded about 20 percent growth

in the January-June period of 2008. Abdul Monem Ltd’s, soft

drinks supply chain is now recovering. Akij Food and Beverage

Ltd (AFBL) recorded about 22 percent growth in 2007-08 fiscal

years. Partex Beverage secured about 15 percent growth in

January-June period of 2008.

9

Competitiveness

At present Bangladesh has a very competitive industry of

beverageBeverage took the market of Bangladesh in the first

half of 1980. In that time two or three soft drinks were

available in the market. But now lots of beverage found in the

market. Some of them are popular and some are not so popular.

Operations Strategy and Competitive Priority

After developing business strategy, beverage producing firms

develop operation strategies to provide a plan for the design

and management of the operations function in ways that support

the business strategy. As Bangladesh is densely populated

country and most of them lives below poverty line flexibility

of the beverage and cost of the beverage is given much

competitive priorities. There are so many people who are very

concerned about the quality of the product, so it is another

major concern for competitive priority. Once the competitive

priorities have been identi ed, a plan is developed by fi

companies to support those priorities.

Q uality Control

As these quality standards of ISO and BSTI has become

stricter, beverage producers are increasingly called upon to

get products to market faster using fewer resources, while

simultaneously managing ingredient quality, and ultimately,

risk. Quality assurance in the beverage industry starts by

ensuring that top quality gases are used to perform the

carbonation process and continues through the bottling and

10

distributing process with a high-tech quality control

examination

Quality of the Bangladeshi Beverage

True to say quality of the beverages in Bangladesh is not

controlled highly, as in a research to determine the

bacteriological quality of beverages of Bangladesh

contaminants were found in carbonated soft drinks sold in

Bangladesh market.

F acility location and layout

Most of the beverage companies’, factories are located in

rural area and offices are located in suitable place.

Obviously these locations were selected using location for

profitability and minimum cost. Surely, all the resources of

the beverage company are well arranged which is done through

facility layout.

SWOT

There are many strengths (Availability of key raw materials,

cheaper labor costs and presence across the entire value chain

gives Bangladesh a competitive advantage And so on), weakness

(Old technologies and poor work organization and so on.) as

well as opportunities (Young people are widely accepting the

new flavors and so on.)And threats (Water scarcity in

Bangladesh and so on.)

C onclusion

Every beverage production companies in Bangladesh are

practicing production and operations management very

massively, which we can understand very well from this paper.

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In reality the system is weak than other developed

countries.

Recommendations

o Companies of soft drink industry should use new

technologies in their production system

o Products quality should be more user friendly, hygienic

and safe, product should be standardized properly ,price of

the product should be set properly

o Operation strategy should be more effective

o Product should be better designed and flexible.

o New products should be produced and introduced with the

change of tastes and demand of consumers.

o Should utilize the by products and waste management should

be more improved

o Should follow the JIT system ,Value engineering should be

implemented properly

o Inventory hide problems should be eliminated and The

packaging recommendations

CHAPTER ONE: INTRODUCTION1.1 Statement of Research Problem:

The beverage manufacturing industry makes and bottles non-

alcoholic carbonated beverages, including fruit flavored

beverages, colas, ginger ales, iced tea, iced coffee, soda

waters, tonic waters and other mixers. The industry also make

other non-alcoholic beverages, including dairy beverages,

fruit juices and fruit drinks, bottled water, sports drinks

and energy drinks. The soft drink industry was historically 12

based on a franchise system which characterized the soft drink

industry worldwide. The system provided a soft drink bottler

with a defined market area and exclusive manufacturing and

distribution rights within that area. The bottler was

restricted to purchasing the proprietary formula concentrates

and/or syrups from a single source - the franchise company

(franchisor) which held the registered trademarks of a number

of soft drink brands. The franchiser established pricing

policies and provided overall marketing and brand promotion

support. During recent decades, however the major brand-owning

soft drink firms have been buying their former franchisee-

bottlers, so that few independent bottlers remain. The

industry continues to serve primarily the domestic market

After independence the food habit of Bangladeshi people has

been changed a lot. Besides our traditional food consumer of

Bangladesh like to take western food also after 1980s. As a

result of global marketing this was not too hard for the

consumers. Different foreign food companies were established

in Bangladesh. Beverage industry is one of them. But more

interestingly we don’t know beverage is also our cultural food

because beverage doesn’t mean only carbonated drinks. Yoghurt,

soup and lacchi are also beverage of our own tradition which

consumed for the last 100 years in Bangladesh. But carbonated

beverage is new in Bangladesh and today our research is on

carbonated beverage industry in Bangladesh. Carbonated

beverage entered into our industry in the later part of 1980.

At that time there were only few companies in Bangladesh. But

by the change of time and western culture influences it’s 13

become very popular in Bangladesh. By year 2000 more than 12

Beverage Company operating business in Bangladesh and most of

them are foreign companies. (Bangladesh Beverage: 2006)

Our study is based on mainly carbonated beverage. This study

is carried to find the practice of production and operation

management of beverage industry of Bangladesh.

1.2 Scope of the Study

Actually the practice of production and operation management

in any organization is mandatory. The total success of the

company is trusted with the practice of production and

operations management. Any company cannot achieve their

prosperity without maintaining production and operations

management. On the other hand, without production and

operating business properly success is not possible. So the

company needs production and operations management for the

smooth operation of whole organization.

1.2.1 Objectives of the Study

Main objective

To evaluate the production and operations management

practice of beverage industry of Bangladesh.

Specific objectives

To know about beverage industry in Bangladesh.

To know about the practice of production and operations

management in beverage industry of Bangladesh.

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To know about the beverage productions, operation n

technology of beverage industry of Bangladesh

To know about the beverage production process o

To know about the growth n productivity of the beverage

industry of bengledesh

To know about the competitiveness in the industry

To know about the operational strategy n competitive

priority of the industry

To know about the quality control of the beverage

industry of Bangladesh

To know about the quality of Bangladeshi beverage

To know about the facility location and layout of the

beverage industry of Bangladesh

To know about the strengths, weakness, opportunities,

threats of this industry.

1.3 Methodology of the study

1.3.1. Sources of Information:

This work is based on secondary sources. The secondary sources

of data include internet articles, some foreign and local

websites on beverages.

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1.4 Limitations of the Study

The main problem of the study is time constraint, because

it is very short time to know about the industry as well

as of production and operations management practice in the

companies.

Information that is collected beverage company’s website

was not detailed.

The access of the detail information of the companies is

not shared in the mass.

It was difficult to find out the practice of production

and operation management form different websites.

Website of Abul Monem Limited was under construction and

some companies do not have any website at all.

Electricity problem

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CHAPTER TWO: AN OVERVIEW OF BEVERAGE INDUSTRY

2.1 Beverage: Its Conceptual Analysis

2.1. 1 Definition of BeverageA drink, or beverage, is a liquid specifically produced forhuman consumption. In addition to basic needs, beverages formpart of the culture of human society.2.1.2 Types of Beverage2.1.2. a Water

Despite the fact that most beverages, including juice, softdrinks, and carbonated drinks, have some form of water inthem; water itself is often not classified as a beverage, andthe word beverage has been recurrently defined as notreferring to water.2.1.2.b Alcoholic Beverages

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An alcoholic beverage is a drink containing ethanol, commonlyknown as alcohol, although in chemistry the definition of analcohol includes many other compounds. Example: wine, beer,vodka etc.2.1.2.c Non-alcohol BeveragesNon-alcoholic beverages are drinks that would normally containalcohol, such as beer and wine but are made with less than .5percent alcohol by volume. The category includes drinks thathave undergone an alcohol removal process such as non-alcoholic beers and de-alcoholized wines.

2.1.2.d Soft DrinksThe name "soft drink" specifies a lack of alcohol by way ofcontrast to the term "hard drink" and the term "drink", thelatter of which is nominally neutral but often carriesconnotations of alcoholic content. Beverages like colas,sparkling water, iced tea, lemonade, squash, and fruit punchare among the most common types of soft drink.

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2.1.2.e Hot BeveragesHot beverages, including infusions. Sometimes drunk chilled.

Coffee-based Beverages o Cappuccino o Coffee o Espresso o Café au lait o Frappé o Flavored coffees (mocha etc.) o Latte

Hot Chocolate Herbal Teas Tea-based Beverages

o Flavored teas (chai etc.) o Green tea o Pearl milk tea o Tea

2.1.2.f Bangladeshi cultural beverage

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Bangladeshi cultural beverages are:o Borhanio Yougurto Lassio Mathao Sarbat etc.

2.1.2.g OtherSome substances may either be called food or drink, oraccordingly be eaten with a spoon or drunk, depending on solidingredients in it and on how thick it is, and on preference:

o Soup o Yogurt

(Greenhalgh, Alison: March 2001)

2.2 Historical background After independence the food habit of Bangladeshi people hasbeen changed a lot. Besides our traditional food consumer ofBangladesh like to take western food also after 1980s. As aresult of global marketing this was not too hard for theconsumers. Different foreign food companies were establishedin Bangladesh. Beverage industry is one of them. But moreinterestingly we don’t know beverage is also our cultural foodbecause beverage doesn’t mean only carbonated drinks. Yoghurt,

20

soup and lacchi are also beverage of our own tradition whichconsumed for the last 100 years in Bangladesh. But carbonatedbeverage is new in Bangladesh and today our research is oncarbonated beverage market in Bangladesh and consumer reactionto it.

Carbonated beverage entered into our industry in the laterpart of 1980. At that time there were only few companies inBangladesh. But by the change of time and western cultureinfluences it’s become very popular in Bangladesh. By year2000 more than 12 Beverage Company operating business inBangladesh and most of them are foreign companies. (BangladeshBeverage: 2006)

2.3 Beverage industry of Bangladesh

2.3.1 Companies

The beverage Industry of Bangladesh consists mainly of seven companies.

  1. Abdul Monem Limited (Coca-Cola, Sprite, Fanta)  2.   Transcom Beverage (Pepsi, 7up, Mirinda)  3.   Akij Group (Mojo, Lemu, Frutika)  4. Partex Beverage Limited (RC Cola, Lychena) 5. Agriculture Marketing Company Limited [pran] (Pran up, max cola, cloudy lemon)  6. Global Beverage Limited (Virgin)  7. (Uro Cola, Uro Lemon)

Other companies are:

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o The Acme Agrovet & Beverage Ltd.o Shark Energy Drink (Eurydice & Eleftheria Ltd.)o K.Rahman and Companyo MTC Beverage Ltd.o Eastern Beverage Industries Ltd.o Sanowara Drinks and Bev. md. Ltd.o Sunny Foods and Beverage Ltdo Desh Beverage Co. Ltd.o Northern Beverage Ltd.o National Beverage Industries Ltd.o Bridge Corporation Limitedo Tezarat Enterpriseo Southern Beverage Ltd.o Bangladesh Beverage Ind. Ltd.o Dhaka Beverage Industries Ltdo Asia Business Ltd.o Cross World Beverage Ltd.

2.3.2 Profile of Different Beverage Company inBangladesh and their products

2.3.2. a Transcom Beverage LimitedOriginated with tea plantation in 1885, today one of theleading and fastest growing diversified business houses inBangladesh employing over 5000 people. Not many industrialgroups in Bangladesh can claim a history of continuousbusiness pursuits stretching back over 100 years. Initiallytea and jute formed the backbone of the family business.Although these are still part of the activities, theycontribute marginally to the overall group turnover.

The Journey of Transcom Beverage Ltd

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oTranscom today

These early industrial ventures have moved over to businessesinvolved in high-tech manufacturing, international trading anddistribution, forming strong ties with a host of blue chipmultinational companies. In recent years Transcom has emergedas an increasingly significant media house in Bangladesh.

oHistory of Transcom Beverage LimitedOn the basis of an exclusive Franchise for Bangladesh fromPepsico USA, TBL acquired three modern bottling plants atDhaka, Chittagong and Bogra from BBIL, Dhaka; EBIL, Chittagongand NBIL, Bogra; in March 2000. TBL manufactures the famousPepsi range of beverages-Pepsi, 7up, Mirinda Orange, MirindaLemon, Slice and Soda. As a corporate citizen Pepsico believesit has a responsibility to contribute to the quality of lifein our communities. TBL has put into action this philosophythrough support of social agencies, projects and programs andthe scope of this support is extensive and it has not beendifficult to blend with this philosophy since the TRANSCOMgroup also followed such a corporate ideology.oDetails of Transcom Beverage Bangladesh

Started in 1885 with Tea

Plantation

Fastest Growing Business in Bangladesh

Today

Employing over 5000 People in Bangladesh

Contribute Heavily on Economic

Efficiency in Bangladesh

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oLocation of Transcom Beverage Ltd.

o ProductsTBL manufactures the famous Pepsi range of beverages-Pepsi,7up, Mirinda Orange, Mirinda Lemon, Slice, mountain dew andSoda. The main two products of Transcom Beverage Limited are7 up and Pepsi. Though there are three other supportingproducts (Mirinda, Slice, mountain dew and Soda) added later.

Franchise for Bangladesh from Pepsico

USA

Acquired three modern

bottling plants

Produce Pepsi,7up,

Mirinda, Slice and Soda

Contribute highly to the quality of life

in our communities

Give support to social agencies,

projects and programs

Transcom group also followed

corporate ideology

Transcom Beverage Ltd. Bangladesh

Main factory located in Telirchara,Mouchak.

Kaliakair,Gazipur

Also have 2 regional factories in

Chittagong andBogra

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2.3.2.b Abdul Monem LimitedAbdul Monem Limited was established in 1956.Since inception the company has gone a long way. Abdul Monem Limited is the flagship company of itself. Driven with the mission statementthe company gradually increased its activities over the years. During its journey the company has faced a lot of difficulties but with the strong management approach the company managed to survive. Generating more revenue was not the only concern of AML. The motto was to build a dream as described in the mission statement. To achieve the end destination AML has diversified itself and these diversified activities allowed the company to come close to the people and involved in many development activities.

oProductsAbdul Monem Limited (beverage unit) is the bottler of Coca-Cola, Fanta, Sprite, Sunfill Mango Juice & Kinley Drinking Water. Abdul Monem Ltd also has the license to produce and market Coca Cola in the rest of the country. The main

25

products of Abdul Monem Limited are Coca-Cola, Fanta and Sprite.

2.3.2.c Pr an PRAN is one of the leading branded food and beverage producers in Bangladesh. The company produces a wide range ofproducts, which can be categorized into six broad categories: 

- beverages; - culinary products; - confectionery;- dairy; - snacks; and - premium rice. 

Created in 1993, the company enjoys a very strong brand reputation in the country and it also exports to more than 70countries. For the financial year ending 30 June, 2007, the company reported combined sales of $66.8 million and a net profit before minority interest of $4.2 million. “PRAN” is currently the most well known household name among the millions of people in Bangladesh and abroad also. Since its inception in 1980, PRAN Group has grown up in stature and

26

became the largest fruit and vegetable processor in Bangladesh. It also has the distinction of achieving prestigious certificate like ISO 9001:2000, and being the largest exporter of processed agro products with compliance of HALAL & HACCP to more than 70 countries from Bangladesh.PRAN is the pioneer in Bangladesh to be involved in contract farming and procures raw material directly from the farmers and processes through state of the art machinery at our several factories into hygienically packed food and drinks products. The brand “PRAN” has established itself in every category of food and beverage industry and can boost a product range from Juices, Carbonated Drinks, Confectionery, Snacks, and Spices to even Dairy products. Today, our consumers not only value “PRAN” for its authentic refreshing juice drinks products , but also for its mouth watering quality confectionery products with high visual appeal and exciting texture. We intend to expand our presence to every corner of the world and strive to make “PRAN” a truly international brand to be recognized globally.oProducts

PRAN keeps its presence in carbonated soft drink producing cola, Lime and lemon. Its refreshing products are widely accepted in local and international market. . The main

27

products of Pran are Pran Maxx Cola,Pran lemon.Pran -Up and Power energy drink.

2.3.2.d Akij GroupHistory of Akij Group stretches back to later part of the forties. In its infancy, the Group started in humble way withjute trading which was known as the golden fiber of the country, earning highest amount of foreign exchange.Akij Food & Beverage Ltd. has been established at a beautifulsite Krishnapura, Dhamrai of Dhaka. It has come with the bestfood & beverage in Bangladesh. Most of the Raw materials comefrom various foreign countries. The quality is very strictly controlled. At every stage, non standard products are rejected.oProductsThere are various types of drink. Mojo is the brand name of cola, Lemu is the brand name of Lemon and Speed is the brand name of energy drink. Immediately after the introduction of the brand it became very popular among its consumer because of the high quality and intensive distribution in every nook and corner of the country. They have three varieties of fruitjuice under the brand name 'Frutika'. The three varieties of juice -- mango, red grape and red orange

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2.3.2.e Partex Beverage LimitedEstablished in 1959, Partex Group is one of the leading industrial and trading groups in Bangladesh. It consists of 17 concerns. Over 7,000 employees are working in this commercial group. In 2000-2001 it's targeting turnover is Tk.8,000 million and estimated growth rate 15% per annum. Net worth at current market price  is Tk. 7,500 Million. Over 350distributors around the nation are engaged in distributing the products and services. There are over 45,000 outlets where products are marketed. Partex's movement is many-fold. It extends its network in various sectors extended from milk to steel products. Let's be familiar with some of the concerns of Partex Group.oProductsPartex Beverage imports and markets the products of Royal Crown Cola Co. International. It has popularized “RC” beverage brand in every corner of Bangladesh.Although registered as a Public Limited Company, no public offerings have been made as yet by Partex Beverage.

Although registered as a Public Limited Company, no public offerings have been made as yet by Partex Beverage. . The

29

main products of Partex beverage are Rc Cola, Rc orage, upper10,Rc lemon, Rc diet cola and Rc club soda.

2.3.2.f Products of Global Beverage Limited

Global Beverage Limited was first established in 1999, is thesole franchise and bottler of virgin, shark energy drink andzamzam cola.

2.3.2.g Products of Globe Soft Drinks Limited

30

The main products of Globe Soft Drinks Ltd. are Uro Cola, Uroorange, Uro lemon, fizz up and Tiger energy drink

CHAPTER THREE: FINDINGS AND ANALYSIS

3.1 Products, Operations & Technology

Nonalcoholic beverages include sodas (carbonated soft drinks,or CSD), bottled waters, juices, and a large variety ofmixtures. Sodas account for about 60 percent of the market.The manufacture and distribution of most national soda brands,including Coke and Pepsi, is a two-tiered process. The primarymanufacturer produces flavored syrup called concentrate thatis sold to local bottlers who manufacture and distribute thefinished product. In a typical bottling operation, theflavored syrup, corn syrup (sugar), and filtered water aremixed in appropriate proportions, carbon dioxide gas isinjected, and the finished soda product is poured into bottlesor cans, which are capped, labeled, and packaged.(BeverageManufacture and Bottling:2008).3.1. a Batch OperationoMixing of basic ingredients in batches according to

individual recipes oFlexible system connected to a variable number of basic

ingredient components

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oAutomatic production with manual feeding of the basicingredients

3.2. b Inline OperationoIn-line blending of the soft drink products oSyrup variations can individually be produced from the

various ingredients available in the basic ingredient dosing systemoFully automatic production of the individual syrup

ingredients 3.2 B everage P roduction P rocess

Water Purification. Water is treated by a process known as

super-chlorination and coagulation. There, the water is

exposed for two hours to a high concentration of chlorine and

to a flocculants, which removes such organisms as plankton; it

then passes through a sand filter and activated carbon.

Carbon dioxide and carbonation, Carbon dioxide gas given the

beverage its sparkle and targy taste and prevents spoilage.

Carbon dioxide is supplied to the soft drink manufacturer in

either solid from (Dry ice) or liquid form maintained under

approximately 1,200 pounds per square inch pressure in heavy

steel containers. Light weight steel containers are used when

the liquid carbon dioxide is held under refrigeration. In that

case, the internal pressure is about 325 pounds per square

inch. Carbonation is effected by chilling the liquid and

cascading it in thin layers over a series of plates in an

enclosure containing carbon dioxide gas under pressure. The

amount of gas the water will absorb increases as the pressure

is increased and the temperature is decreased.32

Flavoring syrup, Flavoring syrup is normally concentrated

salutation of a sweetener (artificial or sugar), an acidulated

for tartness, flavoring, and a preservative when necessary.

The flavoring syrup is made in two steps; first,”simple syrup"

is prepared by making a solution of water and sugar. This

simple sugar solution can be treated with carbon and filtered

if the sugar quality is poor. All of the other ingredients are

then added in a precise order to make up what is called

“finished syrup”.

33

Finishing. There are two methods for producing a finished

product from the flavoring syrup. In the first, the syrup is

diluted with water and the product then cooled, carbonated,

and bottled. In the second, the maker measures a precise

amount of syrup into each bottle, and then fills it with

carbonated water. In either case, the sugar content is reduced

to 8-13 percent in the finished beverage. The blending of

syrups and mixing with plain or carbonated water, the

34

container washing, and container filling are all done almost

entirely by automatic machinery. Returnable bottles are washed

in hot alkali solutions for a minimum of five minutes, and

then rinsed thoroughly. Single service or "one-tip" containers

are generally air-rinsed or rinsed with potable water before

filling. Automatic filters service from 30 to 2,000 containers

per minute.

3.2. a packaging of beverages

The beverage industry is one among the front-liners where

massive investments are being made for expansion and

technological up gradation. The packaging of beverages both

carbonated and non-carbonated, is a complex technological

branch in the industry. The traditional returnable glass

bottle has given way to newer plastic containers as well as

cartons. The current trend is to improve the conventional

containers, extend their share in the large market, extend the

shelf-life of the products, provide greater consumer

convenience and ultimately to produce economic packages. The

changing Bangladeshi scenario, with implementation of various

technologies and market promotion activities, has changed the

scope for this industry exponentially.

3.2.b Chemical input and associated waste

The following diagrams show the raw materials that may go into

Food and Beverage Manufacturing processes and the pollution

that may come out of each process.

35

3.3 product design process

Most of beverage companies are following continuous process as

they produce very high volume of a fully standardized product.

36

3.4 Production growth rate and recovery

Market size, growth rate and overall profitability are three

economic indicators that can be used to evaluate the soft

drink industry. The market size of this industry has been

changing. The growth rate has been recently criticized due to

the U.S. market saturation of soft drinks. Data monitor

(2005) stated, “Looking ahead, despite solid growth in

consumption, the global soft drinks market is expected to

slightly decelerate, reflecting stagnation of market prices.”

The change is attributed to the other growing sectors of the

non-alcoholic industry including tea and coffee (11.8%) and

bottled water (9.3%). Sports drinks and energy drinks are

also expected to increase in growth as competitors start

adopting new product lines.

Domestic soft drinks market shows a sign of recovery as manufacturers said they posted higher sales in the first half of 2008 due mainly to a hot summer and late arrival ofmonsoon rain. Industry people also attributed the recovery to relatively stable price level of soft drinks restorationof confidence among distribution channels as many retailersand distributors got panicked during the government’s driveagainst illegal roadside outlets. Transcom Beverage, the franchisee of PepsiCo International have had excellent sales. The market is recovering due to rise in demand. Transcom, whose 7up brand controls clear drink segment of the market, company recorded about 20 percent growth in theJanuary-June period of 2008. Overall sales of the company increased by about 15 percent during the 2007-08 fiscal years The country’s soft drinks market, according to insiders, started to pick up since 2003 and hit a record high of over Tk 1000 crore in 2005-06 fiscal year.

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But the market dropped the following year partly because ofpolitical uncertainty, slow down in investment and crackdown on illegal roadside outlets. Abdul Monem Ltd’s (One of the two bottlers of Coca-Cola, the leading brand among cola category drinks) soft drinks supply chain is nowrecovering

The soft drinks market, Akij Food and Beverage Ltd (AFBL) comprising categories such as cola, clear, cloudy lemon andorange, reached about Tk 900 crore in the fiscal year 2007-08 from Tk 800 crore a year ago, This company’s soft drink sales recorded about 22 percent growth in 2007-08 fiscal year. the rising price of the raw materials such as petrochemical affects the overall business.

The market has not recovered of RC brand marketer Partex Beverage, whose RC lemon leads the market in cloudy lemon segment. This company secured about 15 percent growth in sales in January-June period of 2008.

3.5 CompetitivenessAt present Bangladesh has a very competitive industry ofbeverage. Bangladesh has a relatively hot weather and peopletend to be thirstier. So they prefer to take soft drinks mostof the time. Beverage took the market of Bangladesh in thefirst half of 1980. In that time two or three soft drinks wereavailable in the market. But now lots of beverage found in themarket. Some of them are popular and some are not so popular.Companies are trying to take competitive advantage by cost,introducing variety of flavors, quality and also by keepingpace with changes in customers taste.

3.6Oper ations Strategy and Competitive Priority After developing business strategy, beverage producing firmsdevelop operation strategies to provide a plan for the designand management of the operations function in ways that support

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the business strategy. It focuses on speci c capabilities offithe operation that give the company a competitive edge. Thesecapabilities are called competitive priorities. By excellingin one of these capabilities, companies want to become awinner in its market.

As Bangladesh is densely populated country and most of themlives below poverty line flexibility of the beverage and costof the beverage is given much competitive priorities. Thereare so many people who are very concerned about the quality ofthe product, so it is another major concern for competitivepriority. Once the competitive priorities have been identi ed,fia plan is developed by companies to support those priorities.Using operations strategy Company specify the design and useorganization’s resources. It sets forth speci c operationsfirequirements. These can be broken down into two categories 1.Structure—Operations decisions related to the design of theproduction process, such as characteristics of facilitiesused, selection of appropriate technology, and the ow offlgoods and services through the facility.

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2. Infrastructure—Operations decisions related to the planningand control systems of the operation, such as the organizationof the operations function, theskills and pay of workers, and quality control approaches.Together, the structure and infrastructure of the productionprocess determines thenature of the company’s operations function.

3.7 Quality Control As these quality standards of ISO and BSTI has become stricter, beverage producers are increasingly called upon to get products to market faster using fewer resources, while simultaneously managing ingredient quality, and ultimately, risk. Quality assurance in the beverage industry starts by ensuring that top quality gases are used to perform the carbonation process and continues through the bottling and distributing process with a high-tech quality control examination. On the top of the list of gases regulated in the world of drink is carbon dioxide (CO2), one of the main components of many of the beverages produced today. Leading beverage manufacturers in this industry are taking the critical step toensure purity of beverage-grade CO2 by using analytical support gases and quality assurance services. Since ensuring purity of CO2 is such a crucial factor in the beverage production process, choosing a specialty gas company to provide purification, calibration and cross reference servicesfor your products should be a priority.3.7. a Q uality of the Bangladeshi Beverage True to say quality of the beverages in Bangladesh is not

controlled highly, as in a research to determine the

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bacteriological quality of beverages of Bangladesh. A total of

225 carbonated soft drink (CSD) samples from nine brands, from

various locations in five metropolitan cities of Bangladesh

were examined to determine their bacteriological quality,

Bacterial contaminants were found in carbonated soft drinks

sold in Bangladesh market. Most samples were not in compliance

with microbiological standards set by organizations like the

World Health Organization (WHO).Pseudomonas aeruginosa was the

predominant species with an incidence of

95%.Streptococcus spp. and Bacillus stearothermophilus were

the next most prevalent with numbers ranging from 6 to 122 and

9 to 105 cfu/100 ml, respectively. Fifty four percent of the

samples yielded Salmonella spp. at numbers ranging from 2 to

90 cfu/100 ml. Total coliform (TC) and faecal coliform (FC)

counts were found in 68-100% and 76-100% of samples of

individual brands, at numbers ranging from 5 to 213 and 3 to

276 cfu/100 ml, respectively. According to WHO standards 60-

88% of samples from six brands and 32% and 40% of samples from

two other brands belonged to the intermediate risk group with

FC counts of 100-1000 cfu/100 ml. Heterotrophic plate counts,

however, were under the permissible limit in all 225 samples.

These findings suggest that carbonated soft drinks

commercially available in Bangladesh pose substantial risks to

public health.

Another thing is that, the same drink produced in another country is not of same quality in Bangladesh. The quality and taste is very different from the versions sold in other developed countries.

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3.8 F acility location and layout Most of the beverage companies’, factories are located in

rural area and offices are located in suitable place.

Obviously these locations were selected using location for

profitability and minimum cost. Surely, all the resources of

the beverage company are well arranged which is done through

facility layout.

CHAPTER FOUR: SWOT ANALYSIS

4.1 STRENGTH

oRenewal and investment42

oExperience in searching for new markets, niches and partnersoAvailability of key raw materials, cheaper labor costs and presence across the entire value chain gives Bangladesh a competitive advantage.

oComparatively few number of competitors than other developedcountries.oAs summer is the main season of Bangladesh, beverages have very much demand in this country.

4.2 WEAKNESS

oOld technologies and poor work organizationoInsufficient pace of creation and implementation of innovationsoInsufficiently effective activities of small and medium-sized businessesoChange in household consumption patternsoCan not maintain international standard of the product for making the products cheap.

4.3 OPPORTUNITIES

o Presence of a favorable marketo Market globalizationo Foreign direct investment promoting knowledge and

developing export channelso Transfer of production to the areas with smaller labor

costso Well established distribution networko Young people are widely accepting the new flavors

4.4 THREATS

oUnfavorable market trends in energy resourcesoIncreasing competition among exporters and decreasing dependency on oneMarket

oIncreasing competition between the organized and unorganizedsegments anoWater scarcity in BangladeshoImplementation of Goods and Service tax by government.

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oPeople have become very concerned about product and their quality.oMobil court are frequently visiting different production areas for checking the quality

CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS

5.1 Recommendations o Companies of soft drink industry should use new

technologies in their production system

o Products quality should be more user friendly, hygienic

and safe

o Operation strategy should be more effective

o Product should be better designed and flexible.

o New products should be produced and introduced with the

change of tastes and demand of consumers.

o Should utilize the by products and waste management should

be more improved

o Should follow the JIT system

o Inventory hide problems should be eliminated

o Value engineering should be implemented properly

o product should be standardized properly

o price of the product should be set properly

o The packaging requirements for all types of beverages are:

• Absolutely leak-proof and prevent contamination

• Protect the contents against chemical deterioration

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• No pick up of external flavours

• Be hygienic and safe

• Retain carbonation in the case of carbonated beverages

• Economical, easy to use and dispose

• Good aesthetic appearance

5.2 C onclusionEvery beverage production companies in Bangladesh are practicing production and operations management very massively, which we can understand very well from this paper.In reality the system is weak than other developed countries. So the companies should improve their production and operations systems due to more effectiveness and success. They also should use their strength, take their opportunities and eradicate the threats and overcome their weaknesses. These will make the beverage industry of Bangladesh more rich and successful.

APPENDIX

1.http://www.velki.com/yellow/search.asp?category=Beverage2.http://www.bdtradeinfo.com/yellowpages/des_data.asp?subcategory_id=3833.http://www.bangladeshyellowpages.com/search/categories:1102/4.http://www.thefinancialexpress-bd.com/2009/06/02/68519.html5.http://www.pranfoods.net/beverage.html6.http://www.akij.net/index.php?page=afbl.php7.http://www.bgdportal.com/Business-Commerce/Group-of-Company/Partex-Group-l1085.html8.http://resources.alibaba.com/topic/500028656/Soft_drinks_.htm9.http://www.ahlbd.com/gbcl/10.http://EzineArticles.com/1665858

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11.http://media.wiley.com/product_data/excerpt/48/04713472/0471347248.pdf12.http://www.cabdirect.org/abstracts/20093113042.html;jsessionid=C63538BC5F81DD0E53BA54CE22F19ADC13.http://positivebangladesh.wordpress.com/2008/07/11/soft-drinks-market-in-bangladesh-recovering/14.Concepts for Soft Drink Manufacture by krones ag

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