Granular material subjected to agitation is encountered in many practical applications of material processing (e.g., cooling, heating, granulation, and clinkering). Furthermore, many of these applications also involve heat transfer whereby solids face cooling or heating surfaces, and heat is exchanged not only between individual particles, but also between the particles and external surfaces throughout the duration of the particle–particle or particle–surface contact. This work focuses on understanding the heat transfer mechanisms in a granular bed inside a rotary drum, which is one of the most commonly used process equipment. All modes of heat transfer are quantified under varying operating conditions to establish a strong understanding of the heat transport. For this, CFD-DEM (using MFIX-DEM, an open source multi-solver suite) simulation techniques are used to analyze the thermal behavior. The heat transfer coefficient of the particles is derived to validate the conduction heat transfer model implemented in MFIX-DEM, and the effects of various parameters are studied.