Project Report on Logistics Analysis in Eastern Region, ACC Cement
ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations are spread throughout the country with 14 modern cement factories, 19 Ready mix concrete plants, 19 sales offices, and several zonal offices. It has a workforce of about 9000 persons and a countrywide distribution network of over 9,000 dealers.
OBJECTIVE OF THE PROJECT:
1. To develop a general understanding of the basic logistics operations of any organization.
2. To create an insight of the existence, structure, functions of various logistics inputs of an organization, taking ACC Cement. as a model organization.
3. To figure out the ways and techniques, using which can be proved to be vital in making the competence of the logistics operations, a competitive advantage to take an edge against competitors.
4. To define plant to market connection of the company’s product on the basis of the logistics inputs, like primary freight, warehousing charges and secondary freight etc.
5. To understand the rational and irrational practices in supply chain so that the reasons and solutions of wastes can be well understood.
6. To draw a comparative analysis of the volume shipped by rail and road both as a mode of primary and secondary transportation.
7. To calculate and analyze the TDC and Contribution of the cement bags of different plants.
Project Report On Logistics analysis IN Eastern region, acc cement
Table of Content
Ch. No. 1.
1.1 1.2 1.3 1.4 1.5 1.6 1.7
Chapter COMPANY PROFILE
About ACC limited History A Strategic Alliance Holcim: A New Partner The National Presence Manufacturing Facilities ACC Plants with manufacturing processes
2.1 2.2 2.3
DESIGN OF THE STUDY
Objective of the Project Methodology of the study Tools Used
3.1 3.2 3.3
DATA INTERPRETATION & ANALYSIS
Data Description. Data Sorting Data Analysis
4.1 4.2 4.3
CONCLUSION & RECOMMENDATIONS
Conclusion Recommendations References
CHAPTER # 1
1.1 About ACC Limited
ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations are spread throughout the country with 14 modern cement factories, 19 Ready mix concrete plants, 19 sales offices, and several zonal offices. It has a workforce of about 9000 persons and a countrywide distribution network of over 9,000 dealers. ACC's research and development facility has a unique track record of innovative research, product development and specialized consultancy services. Since its inception in 1936, the company has been a trendsetter and important benchmark for the cement industry in respect of its production, marketing and personnel management processes. Its commitment to environment-friendliness, its high ethical standards in business dealings and its on-going efforts in community welfare programmes have won it acclaim as a responsible corporate citizen. ACC has made significant contributions to the nation building process by way of quality products, services and sharing its expertise. In the 70 years of its existence, ACC has been a pioneer in the manufacture of cement and concrete and a trendsetter in many areas of cement and concrete technology including improvements in raw material utilizations, process improvement, energy conservation and development of high performance concretes. ACC’s brand name is synonymous with cement and enjoys a high level of equity in the Indian market. It is the only cement company that figures in the list of Consumer Super Brands of India. The company's various businesses are supported by a powerful, in-house research and technology backup facility - the only one of its kind in the Indian cement industry. This
ensures not just consistency in product quality but also continuous improvements in products, processes, and application areas. ACC has rich experience in mining, being the largest user of limestone, and it is also one of the principal users of coal. As the largest cement producer in India, it is one of the biggest customers of the Indian Railways, and the foremost user of the road transport network services for inward and outward movement of materials and products. ACC has also extended its services overseas to the Middle East, Africa, and South America, where it has provided technical and managerial consultancy to a variety of consumers, and also helps in the operation and maintenance of cement plants abroad. ACC is among the first companies in India to include commitment to environmental protection as one of its corporate objectives, long before pollution control laws came into existence. The company installed pollution control equipment and high efficiency sophisticated electrostatic precipitators for cement kilns, raw mills, coal mills, power plants and coolers as far back as 1966. Every factory has state-of-the art pollution control equipment and devices. ACC demonstrates the practices of being a good corporate citizen undertaking a wide range of activities to improve the living conditions of the under-privileged classes living near its factories.
ACC was formed in 1936 when ten existing cement companies came together under one umbrella in a historic merger – the country’s first notable merger at a time when the term mergers and acquisitions was not even coined. The history of ACC spans a wide canvas
beginning with the lonely struggle of its pioneer F. E. Dinshaw and other Indian entrepreneurs like him who founded the Indian cement industry. Their efforts to face competition for survival in a small but aggressive market mingled with the stirring of a country’s nationalist pride that touched all walks of life – including trade, commerce and business. The first success came in a move towards cooperation in the country’s young cement industry and culminated in the historic merger of ten companies to form a cement giant. These companies belonged to four prominent business groups – Tatas, Khataus, Killick Nixon and F E Dinshaw groups. ACC was formally established on August 1, 1936. Sadly, F E Dinshaw, the man recognized as the founder of ACC, died in January 1936. Just months before his dream could be realized. ACC stands out as the most unique and successful merger in Indian business history, in which the distinct identities of the constituent companies were melded into a new cohesive organization – one that has survived and retained its position of leadership in industry. In a sense, the formation of ACC represents a quest for the synergy of good business practices, values and shared objectives. The use of the plural in ACC’s full name, The Associated Cement Companies Limited, itself indicates the company’s origins from a merger. Many years later, some stockbrokers in the country’s leading stock exchanges still refer to this company simply as ‘The Merger’.
1.3 A Strategic Alliance
The house of Tata was intimately associated with the heritage and history of ACC, right from its formation in 1936 upto 2000. Between the years 1999 and 2000, the Tata group sold all 14.45 per cent of its shareholding in ACC in three stages to subsidiary companies of Gujarat Ambuja Cements Ltd (GACL), who are now the largest single shareholder in
ACC. This has enabled ACC to enter into a strategic alliance with GACL, a company reputed for its brand image and cost leadership in the cement industry.
1.4 Holcim - A New Partnership
A new association was forged between ACC and the Holcim group of Switzerland in 2005. In January 2005, Holcim announced its plans to enter into a long-term strategic alliance with the Ambuja Group by acquiring a majority stake in Ambuja Cements India Ltd. (ACIL), which at the time held 13.8 per cent of the total equity shares in ACC. Holcim simultaneously announced its bid to make an open offer to ACC shareholders, through Holdcem Cement Pvt Limited and ACIL, to acquire a majority shareholding in ACC. An open offer was made by Holdcem Cement Pvt. Limited along with Ambuja Cements India Ltd. (ACIL), following which the shareholding of ACIL increased to 34.69 per cent of the Equity share capital of ACC. Consequently, ACIL has filed declarations indicating their shareholding and declaring itself as a Promoter of ACC. Holcim is the world leader in cement as well as being large suppliers of concrete, aggregates and certain construction-related services. Holcim is also a respected name in information technology and research and development. The group has its headquarters in Switzerland with worldwide operations spread across more than 70 countries. Considering the formidable global presence of Holcim and its excellent reputation, the Board of ACC has welcomed this new association.
1.5 The National Presence
1.6 Manufacturing Facilities
1.6.1 ACC's Plant-wise Capacity
State Bargarh Cement Works Cement Nagar, PO Bardol District Bargarh Orissa -768038 Phone: 91- 6646-46191 to 94 Fax: 91-6646-46430 Chaibasa Cement Works P.O. Jhinkpani - 833 215 District Singhbhum Jharkhand Phone: 91-6589-35224 Fax: 91-6589-35250 Chanda Cement Works P.O. Cementnagar Pin - 442 502 Dist Chandrapur Maharashtra Phone: 91-7172-275026 Fax: 91-7172-275165 Damodar Cement Works P.O. Sunuri 723 121 Madhukunda District Purulia West Bengal Phone: 91-341-230671/672 Fax: 91-341-230671 Gagal Cement Works P.O. Barmana - 174 013 District Bilaspur Himachal Pradesh Phone: 91-1978-244041/31 Fax: 91-1978-244067 Jamul Cement Works P.O. Jamul Cement Works Pin- 490 024 District Durg Chhattisgarh Tel:00-91-788-383 082/84 Fax:00-91-788-382 585/643 Kymore Cement Works P.O. Kymore Pin- 483 880 Dist. Katni Madhya Pradesh Phone: 91-7626-272301 Fax: 91-7626-272303 Lakheri Cement Works
Capacity (MTPA) 0.96
3.52 (Gagal I and II)
P.O. Lakheri Pin- 323 603 Dist Bundi Rajasthan Phone: 91-7438-261642/54 Fax: 91- 07438-261504 Madukkarai Madukkarai Cement Works P.O. Madukkarai District Coimbatore Tamil Nadu Phone: 91-422-822282/449 Fax: 91-422-822286 Sindri Cement Works P.O. ACC Colony Pin- 828 124 District Dhanbad Jharkhand Phone: 91-326-2251 054 Fax: 91-326-2251 236 Wadi Cement Works P.O. Wadi Pin- 585 225 District Gulbarga (C. Rly) Karnataka Phone: 91-08476-302406/302239 Fax: 91-08476-302190 0.96
New Wadi Plant Wadi Cement Works P.O. Wadi Pin- 585 225 District Gulbarga (C. Rly) Karnataka Phone: 91-8476-302 406 Fax: 91-8476-302 190 Tikaria Tikaria Cement Grinding and Packing Plant ACC Limited Tikaria Industrial Area P.O. Tehsil Gauriganj District Sultanpur 227 409 Uttar Pradesh Phone: 91-5368-44279 Fax: 91-5368-44479
1.7 ACC Plants with Manufacturing Processes used:
ACC CEMENT PLANTS IN INDIA Name of the Company
Gagal Himachal Pradesh
ACC Ltd. (G)
ACC Ltd. ACC Ltd.
Rajasthan Madhya Pradesh
ACC Ltd. ACC Ltd.
Dry and Semi-Dry Dry
ACC Ltd. – New ACC Ltd.
Karnataka Andhra Pradesh
CHAPTER # 2
Design of the study
2.1 OBJECTIVE OF THE PROJECT:
1. To develop a general understanding of the basic logistics operations of any organization.
2. To create an insight of the existence, structure, functions of various logistics inputs of an organization, taking ACC Cement. as a model organization. 3. To figure out the ways and techniques, using which can be proved to be vital in making the competence of the logistics operations, a competitive advantage to take an edge against competitors. 4. To define plant to market connection of the company’s product on the basis of the logistics inputs, like primary freight, warehousing charges and secondary freight etc. 5. To understand the rational and irrational practices in supply chain so that the reasons and solutions of wastes can be well understood. 6. To draw a comparative analysis of the volume shipped by rail and road both as a mode of primary and secondary transportation. 7. To calculate and analyze the TDC and Contribution of the cement bags of different plants.
2.2 Methodology of the study:
By the virtue of its basic assumption, the project was of analytical nature which mainly directed towards the numerical and strategic analysis of the given primary data of company’s logistics operations in the eastern zone. The analysis was to be done on the
basis of on site practical experience of the processes. During the course of the project, it is especially taken care to maintaining the flexibility and sensitivity between the practical and theoretical aspects of logistics. The study is mainly done in three phases:1. Preliminary understanding of basic practical aspects of logistics operations and inputs. 2. Data sorting and analysis. 3. Drawing conclusions and recommending suggestions. 1. Preliminary understanding of basic practical aspects of logistics operations and inputs. In this phase a visit is made to the warehousing facilities of ACC at sindari in order to have a basic understanding of the logistics done in the organization. This had proved to be very crucial while analyzing the data as the relationship between the different logistics inputs were quite clear in the mind. 2. Data sorting and analysis. In this phase the data which was provided for analysis, was carefully gone through, tried to be understood and all the important components which are required to achieve the research objective are sorted in different excel sheet. Then the required data fields were created and the values are found. For example, Total Distribution Cost was calculated using data of primary freight, secondary freight and warehousing charges. 3. Drawing conclusions and recommending suggestions After the required data fields are created and filled with calculated values, it was the time for drawing conclusion on the basis of the analysis done of the tabulated data.
This is done taking into consideration all the efficiency requirement of any distribution channel for any company, with a special reference of ACC limited.
2.3 TOOLS USED
I had used following tools to get help in designing and conducting the study and for the preparation of project report. • • Microsoft Excel Microsoft Word
CHAPTER # 3
DATA INTERPRETATION & ANALYSIS
3.1 Data Description
The data supplied to me for the project was raw but informative, less organized but sufficiently defined, semi structured and quite comprehensive for calculating TDC and the individual Contribution of plants in the total volume. The data mainly consisted of the following data fields, which can also be seen in the attached worksheet: • • • • • • • • • • • • • • • • • • • • • • • Category State Code State Destination Code Destination District Code Code of transportation Mode of Transportation Brand Code Dispatch Unit Quantity Warehouse Charges Primary Freight by Rail Primary Freight By Road Secondary Freight by Rail Secondary Freight by Road Source Destination Code Source Destination Name Primary Road Distance Primary Rail Distance Secondary Rail Distance Secondary Road Distance Sales Tax
• • • • • • •
Additional Goods Tax Canvassing Agent Commission Average Bill Price TDC Rate TDC Amount Total Distance TDC / Tone / KM
All these data fields were to be used for calculating Total Distribution cost (TDC) and Individual Contribution of the plants in the total volume shipped, which was further used for the comparative analysis for the two main modes of transportation.
3.2 DATA SORTING
All the above data fields are firstly sorted in few more specific and relatively more structured data fields which helped in further calculation and analysis. These are mainly: • • • • • • • • • • • • • Brand Code Dispatch Unit Mode Of Transportation Transportation Code Quantity Lifted from Plants Primary Freight By rail Primary Freight By Road Total Primary Freight Charges Warehouse handling Charges ( C & F Agent Charges ) Secondary Freight By Rail Secondary Freight By Road Total Secondary Freight Charges Total Delivered Cost ( TDC )
• • • • • • • • •
Source Destination Code Source Destination Name Price Sales tax Goods Tax Total Taxes Canvassing Agent Commission Cost To Serve Contribution
The Calculations are done on the basis of following formulae:
• • • Total Delivered Cost (TDC) = Total Primary Freight Charges+ Warehouse Handling Charges + Total Secondary Freight Charges. Contribution = Retail price – Cost to Serve. Cost To Serve = Primary Freight + Warehouse Handling Charges + Secondary Freight Charges + Tax + Packing Charges.
3.3 DATA ANALYSIS
The Data gathered, sorted and generated was then to be analyzed for concluding and recommending improvements. Here, the main analysis was to be done for the total volume shipped by various modes of transportation i.e. rail and road for various plants and their role in increasing the efficiency of the plant’s logistics operations in terms of TDC minimization and increasing contribution.
The analysis was done in a very structured way. • • • • All the analysis is done primarily for every district and hence every plant operating in that district. All the analysis was done plant wise. For every plant, data regarding Quantity and its percentage share in the total volume shipped is shown. For every plant, data regarding Freight charges and its percentage share in the total freight was tabulated for both modes of transportation. This is done for every district and for both the primary and secondary freight.
CHAPTER # 4
CONCLUSION & RECOMMENDATIONS
4.1.1 The Plant Wise Contribution is as follows:
In East Midnapore dist.( Dist. Code = 281 ) • •
DCSL = 146876.55. JAMUL = 429785.52.
In Nadia dist. ( Dist. Code = 283 )
• • DCSL = 168676.71 JAMUL =11208.82
In 24 PGNS dist. ( Dist. Code = 285 )
• JAMUL =175140.32
4.1.2 For Volume shipped by different modes of transportation
In East Midnapore DCSL
• In primary shipments to DCSL, Road dominates with 81.38 % of the quantity shipped costing only 15.3% of transportation cost, whereas the Rail costs more around 84.7% of the total cost incurred, for the shipments of only 18.62% of total volume. • • So, Road seems to be a cost effective mode of transporting raw material to the plant for DCSL in East Midnapore Dist. In secondary shipments for DCSL in East Midnapore, Road is the only preferred mode of transportation.
• In Primary shipments only Rail and for secondary shipments only Road is preferred.
• Road is the dominant mode for shipments in both primary and secondary shipments with 97.995% and 100 % share in terms of quantity shipped costing 73.14% and 100% in the two cases respectively. • Rail contributing only 2.005% of primary shipments, costs much higher with 26.86% share in total cost of primary shipments.
• • Primary shipments are not required, so both the modes have no share at all. In secondary shipments, only Road is preferred thereby having 100% share.
In 24 PGNS
• • In primary shipments Rail is sole dominant mode having 100% share in both quantity shipped and transportation cost. In secondary shipments Road is having monopoly having 100% share in both quantity and cost.
Only better and more cost efficient mode of transportation should be preferred . In East Midnapore dist., from DCSL Rail do only 18.62% of shipments and costs around 84.7% which is very odd for efficient logistics. So, the Railways in this place should be discouraged for shipping goods and shipping through roadways should be encouraged which is far more efficient here.
Again in Nadia dist., from DCSL Rail carries only 2.005% of total quantity shipped and costs around 26.86% of total cost in that. So , here also shipping through roads should be promoted in place of rail.