3.1. GEOGRAPHICAL SPREAD & CUSTOMERS OF HEIDELBERG CEMENT BANGLADESH:
Heidelberg Cement has divided their business in 6 divisions in Bangladesh. They have two main branches in Dhaka and Chittagong. They have also sales agents in other four divisions. But most of the sales generate from Dhaka and Chittagong divisions. Then Sylhet and sales in other 3 divisions are approximately same. They do not have any physical export of goods. If they sell goods to EPZ area and if they get paid in dollars, this is termed as export.  The over all market share of Heidelberg Cement is 13%. The industry saturated. Still they have chance to gather more market share in the industry. They are facing some restriction because they are multinational company.

They have 3 types of customers:
1.    Dealers
2.    Corporate customers (e.g. developers, contractors)
3.    Government projects (e.g. Mohakhali Flyover, Lalon Shah Bridge, Karnafuli Bridge, Banani Bridge)
Except these they have also very few retailers who are very close to them. But usually they do not deal with retailers.

3.2. CASH COLLECTION & DISBURSEMENT PROCEDURE:

3.2.1. CASH COLLECTION
Checks/pay order:
Most of the time, they receive payments through checks. They also receive payments by pay order which is very limited. Generally, they do not allow any other ways of payments. They don’t have any cash transaction.

Collection Points , Concentration Banks, Deposit banks, Lock Box:
There are collection points. The customers pay through the local branches of Dhaka Bank, Dutch Bangla Bank and Marcentile Bank. These banks work as collection points. As these local banks have lots of branches in Bangladesh it helps a lot in collection process. Through the online banking system the money from these local Banks are easily accessible from the principal branch.
Then Heidelberg cement collects money from these banks and deposited in the Standard Charted Bank and Citi N.A bank. 95% of collected money is deposited in Standard Charted Bank and rest of the 5% is deposited in Citi N.A. bank. Here Standard Charted Bank and Citi N.A. bank are used as concentration banks. They transfer the money from the collection bank at the end of the month whether the money is collected at 1st week of the month. Because they have ample money in hand they are lazy to transfer the money at concentration banks. But they are very efficient in collecting the money from customers in due date. Because of having no lockbox system in Bangladesh, they do not use lockbox system.

3.2.2 CASH DISBURSEMENT PROCEDURE:

There are mainly two groups who receive money from the Heidelberg cement Bangladesh Ltd. One is the Raw material suppliers and then another is the suppliers of different utilities.
The raw material suppliers are mainly the subsidiary of Heidelberg Group. Generally they take raw materials from Indo Cement; Indonesia, Heidelberg Cement; India and Heidelberg Cement; Japan.

Payment Methods, Disbursement Banks:
They are mainly importing raw materials. So they pay through LC. They do not have any cash payments. They pay through Standard Charted Bank. The Standard Charted Bank works as disbursement bank and processes all the formalities. Sometimes Citi N.A also works as a disbursement bank.

Authorization:
They follow centralized Disbursement policy. All checks are signed in the Head quarter. Payments are made through mainly finance department. If the payment is less than $6 million, it needs the joint signature of head of finance department and in group B consist of three directors from them any one have to sign. But if payments exceed $6 million it needs joint signature of finance department and Manager Director.

Float:
Although directly they do not take the help of floating, sometimes they try to write check on Wednesday/Thursday. As a result, payments can not be transferred to suppliers Banks before Sunday. In directly they are taking the advantage of inefficient banking system in Bangladesh.

3.3. ELECTRONIC METHOD FOR MANAGING HCBL:

Heidelberg Cement Bangladesh Ltd. (HCBL) use an Enterprise application software named Enterprise Resource Planning(ERP) . This software Provide a single information system for organization-wide coordination and integration of key business processes. This is a competitive advantage for Heidelberg cement. ERP connects all key business process (e.g.- manufacturing and production, accounting and finance, human resources, sales and marketing) and connects the suppliers & Dealers  together in a single place. By this all department can share information which helps business increase efficiency or evaluates their output.

3.3.1. COLLECTION METHOD & ERP
HCBL has some Paper information flow attached to invoice. This attachment contains the Order size, order no, time of delivery and the date of payment. The payment is made to the Collection Bank and the dealers get the receipt from the bank. Because the checks are account payee checks, so they can easily track which customer paid the payment. The company by the time get knows about the payment by ERP software which is connected with Banks. The bank process the payment system and it takes a little time for the company to get notified and deposited because all party are connected through ERP software. Bank processing fees are the cost involved in this Process. If the payment is not made by the dealers they realized the bank guarantee after giving two warnings. Basically Credit policy for Government projects are flexible than the usual customers.

3.3.2. ERP INVENTORY MANAGEMENT:
ERP inventory management handles everything from ordering, physical inventory count, scheduling, shipping, receiving, purchasing, and supply chain planning. Changes in inventory are automatically updated. It no longer takes hours (sometimes up to 24) before the changes is recorded. This helps inventory management employees of HCBL to be able to see if an item is currently in stock. Faster service means better customer service. HCBL ERP management uses bar codes to keep up with inventory items. This makes tracking stock much easier. As the bar-coded items leave inventory, they get scanned and their product information is entered into the ERP inventory management system. Placing bar code labels on stock helps HCBL save money because it keeps the list of stock updated. Employees can easily see when certain quantities are low and need to be re-stocked. Customer service also benefits from this because businesses and customers can see what products are immediately available.

3.4. CREDIT POLICY OF HEIDELBERG CEMENT BANGLADESH:

Normally Heidelberg cement Bangladesh Ltd has a conservative credit policy. They are not willing to flexible their credit policies to increase their sales & revenue. They cannot provide smooth credit policy, because as a MNC they cannot collect payments by pressure. Also they have to maintain some Government rules and regulations. They usually emphasize on quality, as a result they maintain premium price. They have to go by the law. That’s why they are not investing that much in A/R. They are not willing to increase the risk.

When collecting payments, they give two warnings after exceeding the credit limit. If they fail to collect payment despite these, then they realize the bank guarantee.
They provide up to 60 => days of credit limit to Government Projects, 30 days to corporate customers. But they maintain more strict credit policy to the dealers, because of reliability. They give credit to the dealers only if they can give bank guarantee.
Only to the renowned developer’s they sale on credit. They have credit term on average of 18-20 days.