MGT314 – Production Management

Section 6

Group Report on Monno Ceramic

 MGT314.6 – Production Management
Spring 2023

Group Report on Monno Ceramic

Submitted to:
Meshbaul Hassan Chowdhury (MHCw)
Lecturer, Department of Management
School of Business and Economics, North South University

Submitted by:

Name NSU ID
Ahanaf Bin Tarek 2131451630
Farheen Marium 2122093630
Afnan Wazed Sakib 2011817630
Labiba Fairooz Khan 2111360630
Mohammad Fahad 2121990630

Date of Submission: June 11, 2023

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 LETTER OF TRANSMITTAL

MGT314, Section 6
North South University
Plot 15, Block B, Bashundhara, Dhaka – 1229

Date: June 11, 2023

Meshbaul Hassan Chowdhury

Lecturer, School of Business and Economics
North South University
Plot 15, Block B, Bashundhara, Dhaka – 1229

Subject: Submission of Group Report on Monno Ceramics

Respected Sir,

With due respect, we, the undersigned students of section 6 have put together a report on
“Monno Ceramic” under the course MGT314 and we and would like to state that it is a great
pleasure to complete it under your command.

The purpose of the report is to present the detailed scope of strategies, functions, activities and
management of the chosen company. This report has enabled us to gain insight into the core fact
of a company’s successful operation.

We hope our report will meet your expectations and be worthwhile. Thank you for your
cooperation and guidance throughout the entire process.

Sincerely,
Ahanaf Bin Tarek
Farheen Marium
Afnan Wazed Sakib
Labiba Fairooz Khan
Mohammad Fahad

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 ACKNOWLEDGEMENT

First and foremost, praises to the Almighty, for His showers of blessings on the completion of

this group report.

The completion of this report would not have been possible without the cooperation and joint

effort from each individual involved in this project. We would like to specially thank our course

instructor, Meshbaul Hassan Chowdhury sir, for his assistance and persistent support.

Furthermore, we consider ourselves incredibly privileged to have the opportunity to be able to

finish this report under your supervision. Your continuing encouragement enabled us to submit

this report on time.

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 TABLE OF CONTENTS

1. Executive Summary

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2. Industrial Analysis

07

 PESTLE Analysis

08

 Porter’s Five Forces

10

3. Company Overview

12

4. Supply Chain Management

13

5. Forecasting

16

6. Inventory Management

18

7. Operational Performance Analysis

18

8. Recommendations

22

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9. Conclusion

22

10. References

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11. Appendix

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 Appendix A – Interview

24

 Appendix B – Other Miscellaneous Materials

25

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 EXECUTIVE SUMMARY

Monno Ceramic is a well-known exporter and manufacturer of high-quality ceramic

sanitaryware and tiles. With an emphasis on development, quality craftsmanship, and consumer

loyalty, the organization has laid out serious areas of strength for an in both homegrown and

worldwide business sectors. Products from Monno Ceramic include porcelain tiles, ceramic wall

tiles, ceramic floor tiles, and sanitaryware. The company’s advantage lies in their commitment to

innovation of new products, maintenance of international quality standards and true-hearted

customer service. The organization is strategically set up for future development, exploiting the

growing development industry and putting resources into innovative work, item extension, and

market investigation. All-inclusive, Monno Ceramic is perceived for its greatness in the business

and its obligation to maintainability and client centricity.

This report includes a brief overview on the company, as well as an in-depth analysis of the

activities of Monno Ceramic focusing on Industry Analysis, Supply Chain Management,

Forecasting, and Management related information.

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 INDUSTRIAL ANALYSIS

Monno Ceramic falls under the ceramics tableware industry. The company is one of the pioneers

in the ceramics tableware industry of Bangladesh.

Market Condition and Market Share

One of the fastest growing industries in Bangladesh is its ceramic industry. As economic capacity

increases people are more prone to buy tableware or house ware for their increased demand and

improved lifestyle. Today, ceramics are not only used as utility but also as a symbol of

showcases and status.

According to the Wall Street Journal (n.d.), the whole ceramics industry holds a market of total

6,000 crores (BDT), of them the tableware industry shares a significant portion. Monno Ceramic

captured about 4.6 billion or 460 crores (BDT).

Market Leaders and Competitors

There are quite a few tableware manufacturers in Bangladesh. Some leading companies include

Shinepukur Ceramics, Monno Ceramic, Artisan Ceramics, and Bengal Fine Ceramics. However,

these companies are not as historical and experienced as Monno Ceramics. Companies like

R.A.K and Fu Wang are more engaged in tiles and sanitary ceramics production. The consumer

perception about Monno Ceramic is quite positive due to their reasonable and competitive

pricing and also their rich and old history.

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Growth Potential and Business Opportunities

Due to the ceramic and tableware industry's capacity to significantly expand the export basket,

there is enormous opportunity for expanding companies in international markets. These local

ceramic producers currently provide 85% of the local market.

In Bangladesh, ceramic output rose by 200% between 2008 and 2018, according to USAID

research. The tableware sector had 100% growth in the export market from 2018 to 2019.

(Report, 2023b)

Products with High Market Growth and Demand

Steel serving ware, dinner sets, and coffee sets are some of the most well-liked and in-demand

goods on the market. Ceramic house decorations, ornaments, and lights are becoming more and

more fashionable today. During the next five years, it will expand by at least 10–15%.

PESTLE Analysis

Political Factors

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All organizations are influenced by political events when conducting business within or outside
of the country. Political situations can have a positive or negative impact on a company like
Monno Ceramic. Bangladesh's political condition is stable but not consistent. As a result, it is
critical for Monno Ceramic to be aware of any political ups and downs in order to address the
issues constructively. Some factors to consider –

 Government Policies – Includes tax, investment and trade policies within Bangladesh and
other export countries.
 Labor or Employment Laws – The company must comply with these laws to conduct
business in the country.

Economic Factors

Bangladesh's economic situation is not as favorable as it once was, mostly due to the global
economic and political crisis. The global economic situation is hazy, particularly in developing
countries. As a result, difficulties such as the ongoing energy crisis or a gas shortage, which is
used in manufacturing, are becoming more frequent. Shipping and transportation costs for
products and supplies are increasing, as are export and import costs. Therefore, output and
overall business efficiency suffer as a result. Some factors to consider –

 Monitoring inflation and local exchange rates

 Taxation levels
 Local economic indicators
 Building relationships with suppliers

Social Factors

An expansion in the middle class and urbanization are two societal elements that have an impact
on the business and have led to a demand for Monno Ceramic’s products. Along with it, there are
issues like changing consumer preferences who are looking for more cheap products and
sometimes high-quality products at cheap prices. Social media's growth and the wealth of the
populace may both be positive influences.

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Technological Factors

For the Bangladeshi ceramics sector, there has been a significant advancement in technology. By
reducing costs and requiring less labor, it aided in producing items of excellent quality and
durability. To boost productivity, automation is also becoming more popular.

Legal Factors

Monno Ceramic is capable of adhering to all legal requirements, including those that support
company operations. In order to deal with potential insurgencies, they may also need to be
proactive and develop a risk management strategy.

Environmental Factors

In order to maintain sustainability, the new era has seen a need for items that are made from
recycled materials. Growth requires a reduction in pollution and effective utilization of natural
resources.

Porter’s Five Forces

Threat of New Entrants

If only foreign businesses enter the market with stronger cash and investment, the danger of new
entrants will be considerable because only 10 to 12 businesses from the past 20 years have been
operating. They are also hurt by the rise in natural gas prices and the low cost of labor.
Companies like Monno Ceramic have a wide range of opportunities to learn, set up favorable
access to raw materials, and maintain positive relationships with suppliers.

Threat of Substitute Products

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Within this country, the sector faces a lot of rivalry. With both good quality and reasonable costs.
However, because low-cost Chinese items with worse quality are entering the market and
switching costs are also lower, there is a possibility that customers would switch. Sometimes,
confused buyers sacrifice quality and affordability. Even though there is a high demand for these
items, local producers are able to meet it.

Bargaining Power of Customers

Due to competition, buyers' negotiating power might occasionally be rather high. Nonetheless,
since their products are high-quality and reasonably priced, businesses like Monno Ceramic have
devoted customers. In spite of that, there is a chance that potential buyers may choose a different
company's goods.

Bargaining Power of Suppliers

Monno Ceramic has access to both domestic and international raw material suppliers, but
businesses have to cope with tremendous supplier bargaining strength. They import raw
materials to make dinnerware, such as clay, China clay, zinc oxide, liquid gold, and other
numerous and crucial goods.

Competitive Rivalry

Even yet, Monno Ceramic continues to have a substantial market impact, coming in second place
after Shinepukur ceramics in terms of market share. Market growth is strong both domestically
and abroad. As a result, Monno Ceramics is under pressure to compete with its rivals and must
concentrate on a more distinct marketing approach. The level of competition is strong and
growing as a result of rising raw material costs, which raise tableware's selling price. Increasing
the likelihood that Chinese and Indian overseas businesses will participate in the competition.
Thus, can result in pricing wars and fewer earnings.

COMPANY OVERVIEW

Monno Ceramic was established in 1984, and they commenced their journey with the goal of

producing and exporting world grade porcelain tableware from Bangladesh. The firm has proven

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itself as one of the leading brands in the ceramic industry, as well as is the main tableware

supplier to the local market by subsequently opening a Bone China facility to serve to its

premium clients, both locally and internationally.

Harunur Rashid Khan Monno in one of the few individuals in Southeast Asia, who through his

intelligence and earnest efforts, forms a corporation that became widely recognized and admired

across the globe. According to an article by Chowdhury, M. M. (2016), customers all around the

world recognize Monno as a renowned corporation and prominent shopping centers throughout

the world stockpile the company’s branded items for sale in overseas market.

Figure 1: Harunur Rashid Khan Monno at the launch of the firm

After 39 years of thriving experiences, Monno Ceramic is now one of our country’s major

household brands delivering superior porcelain dinnerware to its customer base with its vast

array of items. (Ahmed, 2021)

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Monno Ceramic has two headquarters in Dhaka, one in Dhanmondi and another in Wari.

However, their factory and warehouses are located in Islampur, Dhamrai, Dhaka-1350. Their

factories use industry-leading technology and equipment, and their staff of over 2000 personnel

ensure that the designs are precisely executed every time a product is being produced.

SUPPLY CHAIN MANAGEMENT

Supply chain management is the sequence of an organization’s facilities, activities, and functions

which are combined together to produce and deliver goods or services. It is a comprehensive

approach to deal with the planning and control of the material flow from suppliers to end-users.

Supply chain management is critical for Monno Ceramic, as it is for any other well-established

company.

Generally, the entire process of turning raw materials into finished goods correspond of 8–9 steps

at Monno Ceramic. To produce a single item, the company requires nearly 22–23 different raw

materials, and each element is imported from different suppliers from all over the world since

they are not available in Bangladesh. Monno Ceramic is heavily dependent on suppliers from

India, China, Germany, Thailand and Vietnam. Ball clays [fine-granulated, large pieces of clays

used in the manufacture of ceramic] are imported from a Chinese company called ‘Gilfair Xinhui

Materials Co. Ltd.’ A Vietnamese company known as ‘TLD Vietnam,’ is Monno Ceramic’s

calcium carbonate supplier. On the other hand, 24-karat liquid gold is purchased from a German

company called ‘Ferro’ and other suppliers from India, in order to design the ceramics. Likewise,

quartz and bone ash are also some of the fundamental raw materials required in the brand’s

production process.

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Furthermore, these raw material suppliers interact with Monno Ceramic and other ceramic

manufacturers at Ceramic Expositions held in Bangladesh, China and Germany. For instance,

each raw material supplier would set up their own booth at such fairs. Monno Ceramic’s

Chairman, Managing Director, and/or production team often attend these expos in order to

connect with those suppliers. The company conducts meetings with each supplier to identify how

each of them differ from one another. Once the team returns back in Bangladesh, they finalize 3–

4 suppliers as their enlisted vendors. Monno Ceramic has a separate internal website for

inventory management, which is only accessible by the enlisted vendors and the company

workers. Adverts are often published on the site, according to which, the vendors submit a price

citation and a sample of their material to the company. The sample is then tested and examined at

a lab by experts. The vendor is selected based on ‘best quality meets the best price’ factor.

Monno Ceramic also takes necessary precautions in cases of defective raw materials.

Additionally, in cases of defective raw materials, Monno Ceramic takes essential measures. if the

firm receives low grade quality raw components on rare occasion, suppliers and vendors are

immediately notified. Since Monno Ceramic covers all import costs, the suppliers are charged

with the carrying cost and fare of the materials as compensation. However, when there are severe

quality defects, suppliers are terminated.

Bullwhip Effect

As they produce higher units of products than their demand in order to be safe. This may

sometimes create a bullwhip effect in the supply chain as the original demand might not be as

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huge as the number of raw materials they order from their suppliers. Which is why the suppliers

might also stock more materials. Monno Ceramic prepares their forecast based on judgement.

Figure 1: Supply Chain Diagram of Monno Ceramic

FORECASTING

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Forecasting is the most important factor in Supply Chain Management. It is defined as a

statement about the future value of a variable such as demand. If the forecasting is wrong the

entire supply chain may be in jeopardy. In order to deal with issues like stock shortage or excess

stock, forecasting is used. It can be used to make informed decisions like matching supply to

demand. There are various ways a company can use to do forecasting, such as Judgmental, Time-

Analysis, Associative models. In the case of Monno Ceramic, they forecast based on Judgement.

To elaborate, in January they received an order of 2,00,000 pieces of tableware, they produce 15–

20% more than the demand as some pieces are wasted and become defective during production.

A more effective approach for this will be to use associative models in order for forecasting.

Linear trend equation might be a good option while forecasting which will give more accurate

results than forecasting based on judgement.

Let the demand for 10,00,000 units divided into 5 weeks be 150, 200, 150, 250, 250 thousand

units respectively.

Ft = Forecast for period t

t = Specified number of time periods

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a = Value of Ft at t = 0

b = Slope of the line

t (week) t² y (sales) ty

1 1 150 150

2 4 200 400

3 9 150 450

4 16 250 1000

5 25 250 1250

∑ t = 15 ∑ t² = 55 ∑y = 1000 ∑ty = 3250

(∑ t) ² = 225

b = 5 (3250) - 15 x 1000 = 25
5 (55) - 225
a = 1000 - 25 (15) = 75
5
Ft = 75+25t

For 6th week,

Ft = 75+25(6) = 225 units

INVENTORY MANAGEMENT

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Companies usually keep inventory for smooth production requirements and mainly to prevent

stock out issues. Companies use inventory management techniques such as Periodic System,

Perpetual Inventory System and Economic Order Quantity.

Monno Ceramic uses a Periodic System for managing inventory. They keep track of their

inventory at periodic intervals of three weeks. However, this inventory tracking system is not

entirely efficient as the time between each interval is high.

OPERATIONAL PERFORMANCE ANALYSIS

Quality and service, these two are essential components of Monno Ceramic’s competitive

strategies. Monno Ceramic attempts to provide high-quality items to its consumers while

ensuring outstanding workmanship, perfect durability, and attention to detail in its dinner sets,

cutlery, tea sets, silverware, and other products. The firm identifies its customer value as superior

quality. By prioritizing product quality, Monno Ceramic focuses on consistency across its whole

product range to deliver the same quality products. With those quality establishments, Monno

Ceramic is a reliable and preferred choice for customers.

Besides that, Monno Ceramic prioritizes excellent customer service, aiming to meet and exceed

client expectations by providing a seamless shopping experience, individualized support, and

rapid resolution of any concerns or complaints. Monno Ceramic’s service is a vital key

component of the company's competitive strategy. It gives exceptional customer service a

priority. The company wants to stand out from rivals in the market by strongly emphasizing

providing exceptional customer service. By doing this, it intends to develop lasting connections

and boost client satisfaction.

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Monno Ceramic has a core strategy, which is known as differentiation. It helps Monno Ceramic

to stand out from the competition while achieving its preferable goal. A competitive

differentiation marketing strategy aims to create a special and distinctive market position for a

company with its goods and services. It develops characteristics, qualities, and value

propositions that elaborate to set a company apart from rivals and make it appealing to

customers. The brand’s differentiation strategy focuses on providing customers with something

unique, a kind of piece of art, and challenging to replicate to gain a competitive edge, sometimes

charge higher prices, and maintain customer loyalty. Below are some of the key points regarding

the firm’s core strategy differentiation approach –

 Branding – Placing Monno Ceramic’s image as a unique and authentic identity as a

ceramic Brand. This helps with effective marketing and communication with customer

communities.

 Customer Experience – Monno Ceramic has a few fantastic showroom outlets to give

customers a premium, healthy, mind-refreshing purchasing experience.

For instance,

o Uttara Signature Store – House 29, Sector 07, Sonargaon Janapath Road, Uttara, Dhaka-

1230

o Banani Flagship Store – House 76/B, Road 11, Banani, Dhaka-1213 [below Domino's &

beside Aarong]

 Continuous Innovation – A differentiation strategy must focus on ongoing innovation and

remain one step ahead of the competition. Companies must invest in R&D in order to

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 create new and better goods and services, stay abreast of industry trends, and promptly

adapt to shifting customer demands.

 Unique Value Proposition with Reputation – Monno Ceramic has a strong brand image

and reputation in the ceramic industry market. A customer can easily trust it’s the product

that the color coding is less likely to fade away/change, and will last longer than typical

Bangladeshi ceramic products.

In general, competitive differentiation produces a compelling and unique value offer that Monno

Ceramic from competitors. It calls for a deep comprehension of client needs, a focus on

developing profitable goods and services, effective branding, ongoing innovation, and providing

first-rate customer experiences. Companies that effectively differentiate themselves can have a

long-lasting competitive advantage and succeed in the market over time.

Two crucial marketing tenets are order qualifier and order winner. Order winners are

characteristics of a good or service that influence consumers to prefer it over rivals. Order

qualifiers are the characteristics that customers look for before deciding whether to buy goods or

services. The order winner and the order qualifiers for Monno Ceramic are stated in the list

below –

Order Winner

 Unique design

 High-quality materials

 Durability

 Seasonal Offer

 Excellent craftsmanship

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  Aesthetics

Order Qualifiers

 Unique design

 Convenience

 Availability

 Supportive after-sale services

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 RECOMMENDATIONS

Even though Monno Ceramic was the first exporter of Porcelain and Bone China tableware from

Bangladesh, there is always a room for improvement. Following are some recommendations –

 Monno Ceramic can use the Perpetual Inventory System, which keeps track of inventory

continuously, this will help to maintain inventory more accurately and efficiently.

 Monno Ceramic should use associative models like Linear Trend Equation in order to get

higher accuracy in their forecasting.

 Monno Ceramic can improve their production capacity by using Six Sigma strategy.

CONCLUSION

In conclusion, this report has highlighted the key aspects of Monno Ceramic’s production

process, including their planning, control and quality management. This report has also identified

a bunch of areas where the company can improve its performance. By addressing these issues,

Monno Ceramic can further improve its competitiveness in the market and achieve higher

business objectives. Overall, this report provides valuable insights into the firm’s manufacturing

process and serves as a foundation for future improvements.

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 REFERENCES

Ahmed, M. B. (2021, July 11). Pioneers of Porcelain - ICE Business Times. ICE Business

Times. [Link]

Journal, W. S. (n.d.). [Link] | Monno Ceramic Industries Ltd. Financial

Statements - WSJ. [Link] | Monno Ceramic Industries Ltd. Financial

Statements - WSJ.

[Link]

Monno. (2023, March 1). Home - Monno. [Link]

Monno Ceramic Industries Ltd. (MONNOCERA) Company Report, News, Stock Price &

Profile. (n.d.). AmarStock.

[Link]

Noyon, A. U. (2019, December 5). Ceramics – A rising star in industries. The Business

Standard. [Link]

Read, S. (2016, May 2). Harunur Rashid Khan Monno - The visionary behind local ceramics.

The Daily Star. [Link]

monno-the-visionary-behind-local-ceramics-1217500

Report, T. (2023, February 12). Monno Ceramic becomes Superbrand for second consecutive

year. The Business Standard. [Link]

ceramic-becomes-superbrand-second-consecutive-year-584046

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 APPENDIX

Appendix A: Interview with Mr. Taushif Islam Akash

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Appendix B: Other Miscellaneous Materials

 Business Card

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 Website – [Link]

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