This work was not submitted previously to any university or any where else
for examination or for any other purpose.
Date :
Place : Kodinar
KARISHMA A. NATHANI
During this training program I have studied how the supply chain management is
done in GACL. What are the different departments that plays their role into it.
I am the student of management and hence, our institute insists on industrial visit
programm for the students during 2 years to increase the knowledge of students in
connection with the management, administration and other matters.
SR. PARTICULARS
PAGE NO.
NO.
1. EXECUTIVE SUMMERY
7
2. IDUSTRY HISTORY & RPOFILE
11
3. SERVICES AND PRODUCTS
8
4 BASICS OF STOCK MARKET
12
5 SHAREKHAN PROFILE
13
6. SHAREKHAN SERVICES IN DETAIL
31
6.1 DIFFERENT TYPES OF ACCOUNT
33
6.2 COMMODITY
37
6.3 MUTUAL FUND
40
6.4 PLATINUM CIRCLE
43
7.1 INTRODUCTION
55
7.2 ORGANISATION CHART
57
7.3 ACCOUNT OPPENING PROCESS
58
8 MARKETING
65
8.1 INTRODUCTION
65
8.2 MARKET SEGMENTATION
66
8.3 ADVERTIESMENT
66
8.4 COMPARISON WITH COMPETITORS
67
9 ON THE JOB TRAINING
75
9.1 OBJECTIVE
75
17 ANNEXURE
103
Ambuja is surging towards more and more innovations to offer nothing but the very best
and the latest CEMENT manufacturing technology to esteemed customers. Thus, Ambuja
is able to monitor the quality from the very beginning till the final product.
This project is a study of value chain analysis of GACL in Gujarat and to Find how
ambuja is creating value for its customer and Supply chain management system
comparison to know where does Ambuja stands in compare to other cement companies,
like Saurastra cement Ltd.
The study is Explorative one using Questionnaire and observation of plants and offices,
and is based on Primary data analysis and secondary data analysis. I have visited all the
departments of GACL as well as SCL to find out the value chain and supply chain
system.
The objectives of my research are Analysis of value chain system in ambuja cement ltd
and comparison of supply chain management system with SCL
The major things that I have found in this project are (a) regarding the effectiveness of
value chain system in GACL. (b) GACL Company is concentrating on consistent quality
delivered to customer and customers full satisfaction. (c)
I, believe this is the beginning of a new pattern of growth for the Indian
economy. The growth momentum is getting into a virtuous cycle. Wherein high
growth attracts large capital inflows, which in turn fuels further growth. We seem to
finally have all the ingredients in place for the country to achieve the status of a global
giant.
This year the monsoon too has been good across the country. Thee is now
a general consensus that the economy will grow by 7% in 2006-2007. This augurs
very well for the cement industry, as after a long spell we are seeing the economy
grow at 7% for 3 consecutive years. This has also brought the country much needed
global attention. Also, the Government has pledged to continue with reforms in
infrastructure and invest in rural development and boost the housing sector as well.
This partnership with holcim will not only help it further strengthen
relationship with ACC, but also give us access to many of Holcim’s strengths like
R&D, Fuel sourcing, information technology etc.
The partnership now give them about 35% equity stake in ACC,which is
the single largest cement producing company with an all-india presence. It will
The company always continue to ensure that the efficiency levels are the
highest in the industry, even as they keep input costs in check. I have no doubt that
their spirit and passion will continue to keep them far ahead of the competition.
With virtually no new capacities on the anvil and demand set to increase.
I believe that the cement industry is always the mirror of a growing economy.
Growth is never a challenge, but to keep adding value along with growth is a
challenge. Growth With A Sustainable Business Model
Man is very ambitious being from the very beginning he has always liked to
innovate & make the things more possible & more comfortable. Firstly he used to stay in
hots made up of straws & mod, then of bricks & later of cement. But then also he didn’t
stopped from there he keep on going more better good, than letter & best out of it.
Cement has been amongst the major industries in India there is now at throat competition
in this stream too. For diverting more people, different types & varieties of cement are
available.
In India, manufacturing of cement was first started in Madras in 1904 first three
companies were started in 19912-1913.when the plans started there were 21 factories with
an annual capacity of 328 million tones.
The real impetus was provided when partial decontrol was announced in 1982.
through this policy all existing cement industry units were required to give up 66.67% of
their installed capacity as levy at controlled price. The most important objective of
decontrol was to eliminate black-marketing and bring down the price in the free market.it
was in follow through that the industry was fully controlled in 1989. in the last decade of
90s cement capacity increased by more than twice. The industry was de-licensed in 1991,
which augmented its production in the very first year.
The Indian cement industry plays a key role in the national economy,generating
substantial revenue for the state and central govt. It is the third highest contribution in
terms of excise duty of over Rs. 3,500 crores a year. Sales to state Govt. Royalties ,octroi
And the other cesses add another 1500 crore the industry employ a work force of over of
1.5 lakh persons and supports a further complement of 12 lakh people
engaged indirectly.
Then the Sekhsaria group decided to setup G.A.C.L. at Kodinar. With the
promotion by Gujarat industrial and Investment Corporation limited, the company lay its
foundation in 1983 at vadnagar in Kodinar. The entire plant design and technology had
been supplied by Krupp Polysiusag West Germany. Company has entered into agreement
with Onada Engineering and consulting company limited at Japan.
G.E.B. granted 20MVA power for the plants and a double circuit 132KVA feeder
with the commencement of construction. The railway service appointed siding from
Kodinar to vadnagar. All the basic procedures were completed by august 1986 while
cement production started in September 1986.
Ambuja produces approx 50.49 lakh tones of cement yearly without causing any
harm to the environment. It has received the award as environment pollution free
company. The company tries to provide maximum facility to its worker. They all
collectively work seeking the progress of the company.
The unit insists in quality of work and quality of system. It aims to achieve highest
place and excellence among the total manufacturing companies. It provides a pollution
free and clean environment by adopting latest technological advancements and judicious
use of human resources.
Today, we can say that the company has spread its branches almost all over India
by establishing their units at the following places:-
Darlaghat - Solan
Him ambuja (himachal)
Ropar - cement ambuja
r. repnagar
Punjab
The company at present has got jetties at MulDwaraka neat Kodinar, Surat,
Magdalla, and at panvel (Mumbai) as well as seven ships under its ownership.
Ambuja cement eastern limited (formally Modi Cement limited) has become a
subsidiary of the company. G.A.C.L. has got various subsidiary companies viz. Concrete
Investment Ltd, IndoNippo Special Cements Ltd, Ganpati Greenfields Ltd, Home Trust
Housing Finance Company Limited, Cement Ambuja International Ltd, Mauritius and
Midigama Cement Ltd, Srilanka and many others.
GACL, since its beginning in 1986 as a large scale unit has recorded good
performance with significant improvement in products, quality and profit.
The strong focus on constant quality improvement has paid handsome dividend
and the division products are today accepted as premium products in domestic as well as
international market.
It has planted over 1,00,000 plants in ambuja nagar. GACL recorded zero (0)
pollution level.
Vision of the company : Give a man orders and he’ll do the task
reasonably well, but let him set his own
targets,give him freedom and authority,and
his task becomes a personal mission : “I
CAN” (It is constant source of motivation
for their people)
Competitors
India’s top 10 cement companies:
Lower energy cost due to imported calorific value coal and use of non
conventional fuels.
Lower transportation cost due to increased transport through sea router fro bulk
shipping.
Very high Brand identity.
Excellent innovation engineering and technological skill useful for operating
excellence.
Very less department on government for coal and power.
Processing own jetty and ships useful for timely and cheap transport
Having major share of Holcim so can take advantage of being MNC.
Excellent management team to cope with changing environment.
The supply chain management system in the ACL is quite focused and good.
Weakness :
Very limited fragmentation of plant, which avoid its presence in very sub regional
market.
Still to span more geographically with compare to competetor.
Opportunity :
Higher agriculture production may result into higher purchasing power,which will
increase demand.
Stability of govermnet may result into higher FDI inflow which will give rise to
MNC’s entry in India, which would require operations in India. Thus large
infrastructure projects and related requirements of housing and accommodation
will boost cement sales.
New product usage of RMC(ready mix concrete would be the demand.
Threat
Threates from the economic cycle i.e. recession or growth
Change in government policies in term of coal,diesel,raw material and
transport.
Exchange rate fluctuation having direct effect on bottom line as wellas on
export.
Capacity expansion by the competition which will lead to the surplus of the
cement.
National Award for outstanding pollution control by the Prime Minister of India.
PRESS RELEASE
April 16, 2004
Excellent Performance By Gujarat Ambuja Cement for the 3rd
quater ending March 2004
Sales Volume Up - 18% at 559.10 Crores
Profit After Tax up - 106% at 145.23 Crores
Declares 50% Interim Divident
The topic was such sensitive that it was asking for high level of attention towards
the research process and every thing related to the research. So, up to possible extent it
has been conducted step by step to cover the whole aspects of the research.
I had been assigned a topic which doesn’t involve only one perspective but it was
focusing on all the activities done by the organization which is depicting in this report
under different headings. Here I have tried my best to synchronize every portion of report
to come up with meaning full information through it. It was our privilege to conduct such
research which had given the chance to look cement industry with quite huge perspective.
So that at the end of project I’m including here, the problems faced by the people.
To make the result more visual, realizing and applicable .
RESEARCH PROCESS
23 A report on Ambuja cement Ltd. Analysis of value chain
FORMULATING
RESEARCH PROBLEM
RESEARCH DESIGN
DETERMINING DATA
SOURCES
DESIGNING DATA
COLLECTION
DETERMINING
SAMPLING DESIGN
&SIZE
ORGANIZING &
CONDUCTING FIELD
SURVEY
PROCESSING &
ANALYSING THE
COLLECTED DATA
INTERPRETATION
PREPARING THE
RESEARCH REPORT
To gather information about all the departments in GACL & SCL that are
concerned for the value chain and in turn supply chain management
system of an organization and the contribution of activities of all the
departments to over all results .
OBJECTIVE
o Research Plan :-
Primary Data: -
The Primary data in the Project is the data collected from the
different heads of the department from GACL & SCL. It has been taken by
directly contacting them and asking them the questions that are in the
survey questionnaire. Their feedback is noted down
Secondary Data: -
o Research Instrument: -
Audience
The head of the department of procurement ,production ,sales &
distribution & marketing , quality control, R&D , Environment protection &
security, port authority etc. all the department concerned for value chain analysis.
Introduction
“Value” is defined as “any activity that increases the market form or function of the product or
service.” And in today’s business climate, you need to maximize the value of every process in
your business.
Value Chain Analysis describes the activities that take place in a business and relates
them to an analysis of the competitive strength of the business. Influential work by
Michael Porter suggested that the activities of a business could be grouped under two
headings:
(1) Primary Activities - those that are directly concerned with creating and delivering a
product (e.g. component assembly); and
(2) Support Activities, which whilst they are not directly involved in production, may
increase effectiveness or efficiency (e.g. human resource management). It is rare for a
business to undertake all primary and support activities.
Value Chain Analysis is one way of identifying which activities are best undertaken by a
business and which are best provided by others ("out sourced").
Primary Activities
Support Activities
Secondary Description
Activity
Procurement This concerns how resources are acquired for a business (e.g. sourcing and
negotiating with materials suppliers)
Human Resource Those activities concerned with recruiting, developing, motivating and
Management rewarding the workforce of a business
Technology Activities concerned with managing information processing and the
Development development and protection of "knowledge" in a business
Infrastructure Concerned with a wide range of support systems and functions such as
finance, planning, quality control and general senior management
Firm Infrastructure
Technology Development
Procurement
Line Operations
Marketing
Inbound Operation Outbound Service
& sales
logistic logistics
These diagram picture all of the firm’s activities and processes from procurement
to after sales services, including also research and development and overhead activities.
29 A report on Ambuja cement Ltd. Analysis of value chain
They are used to enable or encourage a through analysis of how each activity throughout
the firm affects costs and differentiation. They may also be used to identify important
processes or linkages among activities that span several function or are performed through
alliances or by suppliers . which in turn leads to benefit of coordination among firms in a
network to lower the overall cost for customers or enhance the noncost elements of value
delivered.
. Value Chain Analysis is a well known strategic concept which enables you to analyse
your competitive position and establish where you are adding value within the business.
The whole enterprise is 'broken down' into key 'Support' and 'Primary' activities which are
then compared with competitive 'benchmarks' representing best practice.
The concept has been extended beyond individual organizations. It can apply to whole
supply chains and distribution networks. The delivery of a mix of products and services to
the end customer will mobilize different economic actors, each managing its own value
chain. The industry wide synchronized interactions of those local value chains create an
extended value chain, sometimes global in extent. Porter terms this larger interconnected
system of value chains the "value system." A value system includes the value chains of a
firm's supplier (and their suppliers all the way back), the firm itself, the firm distribution
channels, the Empty vessel and the firm's buyers (and presumably extended to the buyers
of their products, and so on).
Capturing the value generated along the chain is the new approach
taken by many management strategists. For example, a manufacturer
might require its parts suppliers to be located nearby its assembly
plant to minimize the cost of transportation. By exploiting the upstream
and downstream information flowing along the value chain, the firms
may try to bypass the intermediaries creating new business models, or in
other ways create improvements in its value system.
Porter's basic model describes an industrial organization buying raw materials and
transforming these into physical products.
30 A report on Ambuja cement Ltd. Analysis of value chain
In 1985, When Porter introduced the Value Chain, around 60% of most western
economies' workforces were active in service industries. In 2006, most service industries
in western countries employ over 80% of the workforce.
Critique on the Value Chain model and its applicability to services organizations has
since been voiced by both academics and practitioners. Porter's focus on 'either or'
strategies and competition as the main driving force in any industry, are not that well
suited to the complexity of most industries today. Collaboration in addition to competition
and differentiation in addition to low cost are common drivers. Furthermore, Porter is
focused on the tangible outcomes of cost, revenue, margin and basic configuration of
business activities. The Value Network may be the mental model that embraces the linear
Value Chain Model and that adds an extra dimension for those seeking to make sense of
complexity as we see it in organizations and their environment today.
Value Chain Analysis or Value Stream Mapping is a useful tool for working out how you
can create the greatest possible value for your customers, as well as your best route to
profit maximization.
In business, we’re paid to take raw inputs, and to “add value” to them by turning them
into something of worth to other people. This is easy to see in manufacturing, where the
manufacturer “adds value” by taking a raw material of little use to the end-user (for
example, wood pulp) and converting it into something that people are prepared to pay
money for (e.g. paper). But this idea is just as important in service industries, where
people use inputs of time, knowledge, equipment and systems to create services of real
value to the person being served - the customer.
Furthermore value chain analysis is particularly useful for new producers – including
poor producers and poor countries – who are trying to enter global markets in a
manner which would provide for sustainable income growth. Finally value chain
analysis is also useful as an analytical tool in understanding the policy environment
which provides for the efficient allocation of resources within the domestic economy,
notwithstanding its primary use thus far as an analytic tool for understanding the way
in which firms and countries participate in the global economy
In most industries, it is rather unusual that a single company performs all activities from
product design, production of components, and final assembly to delivery to the final user
by itself. Most often, organizations are elements of a value system or supply chain.
Hence, value chain analysis should cover the whole value system in which the
organization operates.
Within the whole value system, there is only a certain value of profit margin available.
This is the difference of the final price the customer pays and the sum of all costs incurred
with the production and delivery of the product/service (e.g. raw material, energy etc.). It
depends on the structure of the value system, how this margin spreads across the
suppliers, producers, distributors, customers, and other elements of the value system.
Each member of the system will use its market position and negotiating power to get a
higher proportion of this margin. Nevertheless, members of a value system can cooperate
31 A report on Ambuja cement Ltd. Analysis of value chain
to improve their efficiency and to reduce their costs in order to achieve a higher total
margin to the benefit of all of them (e.g. by reducing stocks in a Just-In-Time system).
• Analysis of own value chain – which costs are related to every single activity
• Analysis of customers value chains – how does our product fit into their value
chain
• Identification of potential cost advantages in comparison with competitors
• Identification of potential value added for the customer – how can our product add
• value to the customers value chain
Inbound Logistics
Taking greater control of inbound logistics is becoming a top priority for many
manufacturers and retailers. Turning attention to inbound logistics will not only reduce
costs, but also a generate more collaborative relationship with internal organizations,
suppliers and logistic providers, which will ultimately result in a more effective business
process from which all parties will benefit. In my study, i tried to exploit a the system
which AMBUJA is using, because efficient and effective inbound logistic performance
would benefit all participants in the value chain. I started by investigating the unique
features of the inbound logistic system with a comparison of the outbound, and this was
then followed by a description of the current inbound logistic operation systems, from
both an information flow and material flow perspective. I found that all inbound
operations can be categorized into that of traditional demand to supply model to that of
the VMI model. In approaching overall supply chain efficiency, a model hypothesis was
therefore created as a future oriented solutions. Parameters were also defined to evaluate
the performance of inbound logistics.
So the main thing in inbound logistics is how material is get into the factory and how it is
managed within the factory.
In a manufacturing firm, the raw materials are obtained from the suppliers and are
stored in the store room. These raw materials are then issued to purchase department and
are moved inside the plant from one process to another till they are converted into
finished goods.
1. Pipelines :
It is mostly used at plant for material handling. Gacl uses pipelines for
handling of various materials from one machine to another. Pipelines are
even used to pass hot gases, which are used to dry up the moisture contents
in the grained materials.
2. Pneumatic conveyor :-
The pneumatic conveyor is used for conveying all types of dry bulk
materials of powdery to fine grained or gritty nature. The pneumatic
conveyor unit designed for dust free operation.
3. Aeropol vertical conveyor :-
The aeropol vertical conveyor is used for continious handling of dusty &
granular materials. This helps in handling the powdered material& passes
it from one process to another.
4. Bucket elivator :
It is the simple volumetric machine used to elevate the bulk material.
5. Tractors :
Used to bring the milestones from mines to plant .These are useful to have
an uninterrupted supply of raw material.
6. Tanks :-
Used to bring the milestones from mines to plant. Trucks are even used to
bring gypsum & coal from the storage area to plant.
Outbound
fininshed
Inbound godds
materials Inventory
Finish
flow in the
WIP Product ed
Suppliers field
uion goood
s
Transit Interme
Depot diatory
Customer
LOGISTICS
Cement, being freight intensive industry, various initiatives had been taken up by GACL to
streamline its logistics.
GACL was one of the first cement producers of the country to introduce an Integrated Logistics
System (ILS). At each manufacturing unit, a cross functional committee was responsible for the
efficient management of logistic functions.
The committee met at regular intervals and reviewed the working of the total system. The
recommendations were forwarded to the top management for immediate action.
Order Processing Systems involved the flow of information about the orders from
34 A report on Ambuja cement Ltd. Analysis of value chain
generation to order fulfilment. Orders once received, had to be processed quickly and
accurately. GACL had linked all the major offices through a Wide Area Network (WAN).
Electronic Data Exchange (EDE) and Material Resources Planning (MRP) systems
facilitated timely and accurate processing of orders...
INVENTORY CONTROL
Inventory control is the process of deciding what and how much of various item
are to be kept in stock. It always determines the time and quantity of various items to be
produced. The basic objective of inventory control is to reduce investment in inventories
and ensuring that production process dose no t suffer at the same time. To attain various
objectives inventory control must.
Gujarat Ambuja Ltd has not its own inventory control department. It is a part of material
department.
MANAGEMENT OF INVENTORIES
Inventories constitute the most significant part of current asset of a large majority
of companies in India. Because of the large size of inventories maintained by firms, a
considerable amount of funds is required to be committed to them. It is therefore
absolutely imperative to manage inventories efficiently and effectively in order to avoid
unnecessary investment.
Operation
Production is the basic activity of all the industrial units. All other revolve around
this activity. We can say that production activity is nothing but the step conversion of one
from of material into another either chemically or mechanically. The end product of the
production activity is the creation of goods or services for the satisfaction of the final
Consumer. The production activity is process by which the goods are produced or utility
enhanced.
According to E. BUFFA,
“Production is the process by which goods or services are created.”
Cement is one of the most important building materials used thought the world. it
was firs discovered by joseph aspdin in England he called it Portland cement.
some of the main cement producing countries of the world are china, japan, united states,
India. In India the most important units for the manufacture of the cement are at
gujart,rajasthan,orissa, Madhya pradesh, tamilnadu etc. annually India is producing nearly
100 million tones of cement.
The raw materials used for the manufacture of Portland cement are lime stone and
clay. Lime stone provides calcium oxide and the clay provides silica, as well as alumina
and ferric oxide. The approximate composition of the cement is
Gacl uses the dry process for cement manufacturing. Selection is based on the fact
that dry process consumes less thermal energy and minimizes the pollution. The
total process the divided into various stages as follow.
MANUFACTURING PROCESS
(1) MINING: - The limestone is mind from open cast quarry by conventional drilling
and blasting method. The blasted material is excavated by hydraulic excavators
and loaded into haulage dumpers having carrying capacity of 35 meters. The
material is hauled from quarry to the crushing plant for size reduction.
Occasionally the limestone is also ripped by hydraulic ripper. Mare is dug out by
ripping as it is very soft and loose.
(3) RAW MATERIAL GRINDING: - The raw materials are fed to vertical roller
mill. The mills are based on KP design and have rated capacity of 220 TPH. The
raw material are grinded from 75mm size to the fineness 85% passing through 90
microns. The grinded raw meal is continuously sampled by pneumatic cylinder
type FLS made sampler.
(5) PYROPROCESSING: - The homogeneous raw meal known as kiln feed is fed
to5 Stage preheated- kiln of polysius design known as dopol. It incorporates a
stage Known as precalciner, where about 50% of the fuel is fried to achieve 90%
Calcinations. The calcined raw meal enters the rotating cylinder known as ‘kiln’
(Size -4m dia * 60m length), where it slides down to burning zone.
About 50% of the fuel is then fired here to sinter the raw meal into the clinker in
burning zone, the thermo chemical reactions take place and all the oxides are
converted into the minerals known as tricalcium silicate, dicalcium silicate,
Tricalcium aluminates and tetra calcium alumina ferrate. Different type of
Refractories is laid to protect the kiln shell.
Hot clinker is discharge into the ‘Great cooler’ where the red hot clinker is cooled
from 1300 degree Celsius to less than 100 degree Celsius by air quenching. The
hot air from the cooler is drawn back as secondary and tertiary air as Recuperating
heat. Induced draft fans draws about 5 lakh M3 per hour air through the kiln and
preheated. This hot gases exchange their heat to incoming raw meal in the
preheated cyclones. As a result the gases cool down and the material gets heated.
The hot gases from preheated exit are used in vertical roller mill for drying the
raw material while grinding.
The cooled clinker is transported to circular stock pile by Deep bucket conveyor.
The storage capacity of circular clinker stock pile is about 40,000 MT. The coal
used in process is pulverized in a vertical roller mill of KP Design. The fine coal
is stored in hopper and transported pneumatically to kiln and Precalciner by
separated FK buckets.
(6) CEMENT GRINDING AND PACKING: - The clinker extracted from the
bottom of storage yard is fed to cement mill supply hopper. Another hopper is
used as supply hopper of gypsum. The mixture of clinker and gypsum is fed in to
the ball mill, operating in closed circuit with polysius design high efficiency
separator.
(7) PLANT OPERATIONS: - The entire plant is operated from central control room
where the process operating personnel closely monitor, the plant operation on
visual display units. The computerized process control system with field
instrumentation ensures the steady and smooth operations of the plant.
Mining
Cement milling
This department is situated in the CCR building. The whole process is computerized ,
where process-operating persons closely monitor the whole plant operation through visual
display. Computerized process control system with the field instrumentation ensures the
steady and smooth operation of unit. The whole process is displayed on the computer and
any change of problem in the process is easily identified so that necessary steps can be
taken immediately.
Product layout :
Selection of location
GACL is situated near vadnagar village in kodinagar. The location of the plant is
very beneficial for its existences as the area is surrounded by lime stone, which is
one of the basic raw materials in the cement production. Company is also
benefited as the area of the plant site is near the sea cost which facilitates the sea
transportation through sea route. Ambuja has also developed its own seaport for
transporting cement to other destinations. This has helped GACL to export their
product easily through seaport directly thereby increasing export figures of the
entire company.
4. Labour :-
On growing modernization of plants, the requirement for skilled manpower
has increased then that of unskilled manpower. The cheap availability of
labour from the near by areas has proved to be great help for the company.
OUTBOUND LOGISTICS
CONCEPT OF DISTRIBUTION
CHANNELS OF DISTRIBUTION
The producer cannot himself go in the market for selling his each unit of
production, because he has no such time and again it cost too much to go in the market
and sell his product. For this difficulty they take the help of middlemen who supply
producer’s goods to consumers. The middlemen include wholesaler, retailers, dealers,
agents, distributors etc. those are middlemen who are well acquainted with the position of
the market and hence they can distribute the companies’ product easily.
Promotional activities.
The company used both direct as well as indirect channels of distribution. Since it
is a consumer oriented product. Beside it is used by all types of people including rich,
middle and poor. So it is necessary to take into consideration from the opinion of all types
of people who are going to use these products. It is a kind of product which is used by all
types of people irrespectively. It has high demand because it has been used for the
construction of building, bridges, dam etc. so the respondent of this product is almost all
types of consumers and most of the sales are done through middlemen like Stockiest, sub-
stockiest, retailers etc and so on.
Almost all the middlemen are involved in distribution channel either directly or
indirectly. It is a product which cannot be sold through direct market. It is being sold
through indirect sale only, because the manufacturer has no direct contact with the
Manufacturer
Stockist/dealer
Sub stockist
Retailer
Consumers
PHYSICAL DISTRIBUTION
MEANING:-
Physical distribution means the distribution of goods and services from the point
of production to the point of consumption. Here the goods are made available to the
ultimate users through proper distribution. Physical distribution of commodity of
commodity represents. Those activities which create time and place. Utilities in the
process of the actual movement of goods from producer to consumer. These activities are
key link between producers and consumers and are performed by the producers,
middlemen, and a buyer is varied degree.
No body can carry out any activity without objectives for e.g. The Company is
incorporate to earn profit after production and sale of goods. The company selects good
pricing policy with the objective of creating monopoly in the market. In other words
objective provides backing to the company by which it try to achieve it objectives.
43 A report on Ambuja cement Ltd. Analysis of value chain
Physical distribution objectives as getting the right goods to the right place at the
right time for the least cost. Following are the main objectives of Gujarat Ambuja Cement
Ltd.
To make goods available to the customer at the right time and place.
The total cost and the selling price can be minimized by controlling the
physical distribution activities.
After noting carious channel alternatives which alternatives would best satisfy the
long term objectives of the firm taking in view the factors which would effect the channel
decision for this purpose, which alternative must be related against eaconomi,control and
adoptive criteria.
1. Economic criteria :
For evaluating the effectiveness of channel of distribution the
economic criterias are most important since it forms the affects the
profit. That how much it will cost.
2. Control criteria :
In evaluating the channel the second main consideration is that of
control i.e. how usual the marketer be in a position. Is it
controllable how to control them.
3. Adoptive criteria :
The next consideration in channel decisions is to see whether the
channel would be suitable to adopt the changing conditions in the
future.
Evolution of physical distribution can be carried out with the help of effectiveness
of each step of physical distribution.
Here in Gujarat Ambuja Cement Ltd first of all, order processing system is
followed, therefore they can devate their times towards orders of buyers. Secondly,
warehouse is available besides the production department which reduce the transportation
cost also, the company has inventory control department which determine inventory level.
The company uses Road, Rail and Sea way of transportation modes.
The major activity of sales and distribution department is to receive order from sales
officer, dispatch cement as per order received through proper transportation mode.
Dispatch procedure:-
Company has adopted following procedure for dispatching of goods for orders received.
Receiving of orders:-
It is the responsibility of marketing officer to collect the orders from the
customer. These orders are collected by phone, letters, e-Mail, fax etc.
Processing of orders:-
Dispatch programme:-
When the transporter gets the copy of order, he sends his vehicle with the
memo. Memo includes information regarding type, quality, quantity of cement and
distance to the place.
Dispatch order:-
When the truck of the transporter comes to the unit, driver has to receive a
dispatch order in which all the information about goods is included.
Loading process:-
After receiving dispatch order, driver which reaches the packing house,
where firstly the empty truck is weighted and then it is loaded with bags and again it is
weighted.
Truck Khoj.com :-
This is also a new process that is followed by G.A.C.L. In this process the driver of the
truck has to stamp a card that is being provided by the company in various locations
where the depot machine is kept.
By following this process company comes to know the time take for the truck to pass a
certain destination and would easily keep a track on the truck.
Transportation process:-
Transportation takes place by three modes which are roadways, Railways,
and sea transportation.
1. Road Transportation:-
46 A report on Ambuja cement Ltd. Analysis of value chain
G.A.C.L has assigned three transport companies which are:-
Rajmoti transport.
Abshiek transport
All the three has been divided and allocated their area of transport.
Transporter
Collection Order receipt and processing
memo
Weidge in
Packing/loading
Security count
Weight out
Ambuja has constructed its own railway siding and it runs from Vadnagar to
Kodinar and from Kodinar it reaches different place. But nowadays G.A.C.L. is not using
this mode of transportation much.
Indent to railway
Payment of wedge and demand registration
Payment of freight
1) AMBUJA KIRTI.
2) AMBUJA SHAKTI.
3) AMBUJA VAIBHAV.
4) AMBUJA SHIKHAR.
5) AMBUJA GAURAV.
6) AMBUJA LAXMI.
7) AMBUJA BHAVANI.
Planning
Factory Muldwarka
(Unloading in
silo)
Domestic Export
Panvel Magdala
49 A report on Ambuja cement Ltd. Analysis of value chain
Mechanical equipment used for import & export purpose in Ambuja to fasten the
movement of goods and have access to the area where labor can’t reach.
• Bucket elevators
• Scru conveyer
• Belt conveyer
• Air slide ( for short distance only)
• Cement Blow pump (for stand by use when other equipment are under
maintenance)
• Tug (to pull/push the loaded ship capacity : 40000 tones at a time)
• Silo (for storing the cement temporary capacity: 5000 tones)
Thus the development of physical distribution facility has made the production
feasible through the year at lower cost of production and distribution.
1. Order fluctuation
2. Non availability of required number of trucks/fluctuation due to
• Less incoming material
• Seasonal effects
• Demand of trucks in nearby areas
• Freight constraints
3. Movement bottlenecks
4. Abnormal detention at unloading point
5. Multiple deliveries
6. Distance exceeding in two point deliveries
7. Too many diversion cases
8. In accessible destinations having poor road conditions
WAREHOUSING FACILITY
Every company must store goods properly until they are sold. Warehousing means
the functions of the company. Here goods produced are brought and packed accordingly.
Then these packed goods are stored in warehouse in such a way that it becomes easy for
the company to supply it to their customers as when required. Some companies possess
their own warehouse while other may use public warehouse for which they have to pay
rent. Warehousing is very important since it preserves the valuable goods of the company
from spoiling, the insects, theft etc.
The Gujarat Ambuja Cement Ltd has three SILOS for the storage of cement at the
nearest place of production. The capacity of each SILO is 5000 tonnes. The company has
50 A report on Ambuja cement Ltd. Analysis of value chain
its own dumps at different places. The cement is stored in dumps when they receive
orders immediately they execute cement from dumps.
TRANSPORTATION
Here from my observation it is clear that AMBUJA is fulfilling all the 7 R’s
# M ode of transportation
• ROAD
• RAILWAYS
• ROPWAYS
• WATER
• AIR
• PIPE LINE
• INTERMODAL
Ambuja is using rail road rop ways and water for transportation out of that it is
very efficient in sea transportation.
Action plans
Objectives
1. To find new & new customers to sell them more & mor of companies product.
2. Try to Convince the customer about better & quality product.
3. To provide a successful distribution of consumer product.
4. To study the market problems according to circumstances & suggest the solutions.
5. To sell their products in new areas to make new customers & satisfy old ones.
6. To encourage the customers & know the fault in their products & then try to make
quality or faultless product.
Due to cut throat competition in market importance of customer has increased .Now a
day sellers are more in numbers while users or consumers are less in numbers.
Therefore, it is essential for producer to know the satisfaction level of his product.
The promoters & service coupled with delivery schedule , high quality, right price &
maintaining customer relation.
In GACL the level of customer satisfaction & as well as dealer satisfaction is very
good. It is due to reason that the product is of high quality services, delivery in time.
PRODUCT PLANNING
The product is the most tangible and important single component of the
marketing programme. The product policy and strategy is the corner stone of a marketing
Good products are key to the market success. Product decision is taken
first by the marketer and these decisions are central to all the other marketing decision
such as price, promotion and distribution. Product is the vehicle by which a company
provides consumer satisfaction. It is the engine that pulls the rest of the marketing
programme.
A product plan is a company plan for marketing its products the company
lay down the product objective, develop a product design to achieve the set objectives and
have a product programme suitable to the product’s position in the life cycle. Product plan
involves a number of issues to be resolved: -
Product mix.
Product item :
A single product the product item of GACL is cement.
Product line
G.A.C.L. is producing mainly Ordinary Portland
Cement (OPC). But as need
arises i.e., according to the demand, it also products other brands of cements.
Packing.
Labeling.
Branding.
Service after sale.
Organizing for product planning and development.
Product research and improvements.
At GACL, quality is given close attention. The test of quality and strength
of their cement is done regularly. The tests have shown that Ambuja Cement has got the
highest comprehensive strength which is above the specification of ISI and is of
international standard.
The quality policy adopted by GACL is “Do it right the first time” on
product planning, the product which has got the highest demand and which is most
profitable one is prepared by the company. Mainly OPC which is very economical is
produced but whenever specific demand arises they produce accordingly. In the recent
past Narmada Project had demanded PPC and it was supplied by GACL.
MARKET PLANNING
GACL also does marketing planning. Usually there are long range plans
covering 5 to 10 even 15 years. The planning period is of 3 to 5 years. The first two years
are covered in details. Also project plan for a period of 1 or 2 years are there which cover
specific projects outside the normal marketing field like introduction of a new product,
launching of a special campaign.
According to the company, planning is important but planning is not their end as it
only a means. It should not be tended to become an end in itself, because in reality
performance is critical and achievement of objectives is the ultimate goal.
MARKET SEGEMENTATION
The behavioral signs have developed multi dimensional concept of buyer behavior
and indicated that all buyers are different. Marketer recognizes the importance of
heterogeneous demands. Hence, they are keenly interested in sub dividing or segmenting
the market is that each segment can be group of people with similar or homogenous
demand and the enterprise can offer tailor- maid marketing mix for each market segment.
GACL also has done market segmentation by considering two different areas.
Firstly on the basis of geographical area and secondly on the basic of consumer.
On the basis on consumer segmentation, GACL has divided the market into three
segments.
1. GOVERNMENT 10%
2. CONTRACTOR SEGMENT 15%
56 A report on Ambuja cement Ltd. Analysis of value chain
3. GENERAL PUBLIC SEGMENT
(i) Institution 13%
(ii) Trade 62%
1. GOVERNMENT
10%
15% 2. CONTRACTOR
(i) Institution
62% 13%
(ii) Trade
1. Government segment:
Govt. & semi govt. agencies are the largest consumer contribution about 25-
30% of all India cement consumption. special quality cement is asked at time for
railways ,ONGC, and irrigation department etc.
2. Contractor :
It is the second largest & very efficient segment in cement marketing of
builders generally purchase in a large quality so price & credit policy plays
a vital role for this segment.
3. Trade segment :
It covers the biggest segment which cover about 60% of Gacl market it is
segment of retailers where brand identification quality of the product play
very important role.
4. Institution :
This segment covers the industrial units and public trusts.so relationship
plays big role for this segment.
1. MUMBAI
2. AHMEDABAD.
Mumbai covers the area of Maharashtra, Madhya Pradesh and Rajasthan. While
Ahmedabad covers the regions in end surrounding Gujarat.
All the districts of Gujarat as well as other states are regularly visited by sales
representative. The vice president (Marketing) at Ahmedabad has to keep coordination
with all the regional offices situated at Rajkot, surat, Baroda, Bhavanagar, Mumbai.
Month wise planning programmes are done.
57 A report on Ambuja cement Ltd. Analysis of value chain
Dispatching of products is controlled by the cement manufacturing association
(CMA). Thus the even segmentation has helped GACL to become the market leader in
cement industry.
CONSUMER BEHAVIOUR
The aim of marketing is to meet and satisfy target customer’s needs and wants.
But knowing customer is very simple. Customer’s may state their needs and wants but act
otherwise. They may not be in touch with their deeper motivation. They may respond to
influence that change their mind at the last minute.
In earlier times marketer could understand consumers through the daily experience
of selling to them. But the growth in the size of the companies and markets has removed
many marketing managers from direct contact with customers. Increasing manager has
led to relay on consumer research for the answer to the question like:-
Moreover the company has got regional offices at Surat, Rajkot, Bhavanagar,
Ahmedabad and Bombay. Where special officers are appointed for remaining constantly
in touch with the consumer in order to understand their needs.
Price as an important element in the marketing mix. Arrival at the right selling
price is essential in a sound market. Right price can be determined through pricing
research and by adopting the rest market technique.
A price policy is the standing answer of the firm to recurring problem of pricing. It
provides guidelines to the marketing manager to evolve appropriate pricing decisions. If
competition is mainly on a price basis then each company generally prices its product at
the same level as its competitors.
During the earlier days cement was under the control of government but now it
has been decentralized. Hence the company is free to set its prices it does not mean that
consumer exploitation is possible because there is always cut throat competition in this
field.
The present price of Ambuja Cement is approx is Rs.200 per 50kg bags. GACL
also follows policy of resale price maintenance is that all the retailers are bound to sell
their brand of goods at a fixed retail price decided by them. No retailer can exceed the
limit fixed by the manufacturer.
Also various incentives and discount are provided to the stockiest by GACL in
order to increase their sales.
Thus GACL follows 2 types of pricing policy.
1. Cost oriented pricing :
It is the simplest method for price. It also says as cost plus & target
pricing Generally retailers are using this method. GACL keeps the
following point in mind while deciding on cost base.
In addition to manufacturing cost the added costs are.
• Sales promotion cost
• Distribution cost
• Advertising cost
• Promotion cost
• Other marketing expenditure
Promotion Mix
3. At a consumer level :
Gacl explain its consumer about different types of cement. They explain
that what are the other cement and what is ambuja cement. Consumers are
ensured with number of benefits when they use ambuja cement and cash
discount also in certain situation many atimes; consumer also gets like
diaries, ball pens,calendars etc.
ADVERTISING
The advertiser or sponsor wants to persuade and induce the reader, viewer or
listener to take some action. To buy the advertise product so that the advertiser can have
profitable sales.
Cement industry has got many competitors. GACL has got a separate advertising
department. This department fixes the advertising budget for every year.
Almost all the Media like print media, news paper, magazines, periodicals,
outdoor Medias; posters etc are used by GACL for the company’s advertisement.
GACL having its own full fledge advertising staff. GACL has given advertising
contract to private agency named “TRIKAYA GREY “, this agency looks after all the
function regarding advertising. When company wants to advertise its product chart of
advertisement and put it before personnel management. The executives select proper chart
form various options and send it to advertisement through a selected media.
• Functions of trakaya grey
Designing the advertisement campaign
Deciding advertisement media and doing media scheduling
Using through various media
Learning more about consumers and dealers and about marketing mix generally is
the heart of marketing research. Marketing research is the systematic and intelligent
investigation or study of the “Who, What, Where, When, Why and How of actual and
potential buyers”.
The company has developed a separate department which carries out marketing
research and development. It even carries out research at regular intervals with the help of
professionals.
Improve quality and productivity is the benefit derived from research and
development.
INTERNATIONAL MARKETING
In the last decade of 20th century many companies all over the world have started
developing global marketing plans. Both time and distance are rapidly shrinking on
account of intensive and faster satellite communication, speedy transport and free
financial flows.
International marketing points out that world market are being driven towards a
converging commonality i.e. consumer demand round the world tends to have similar
needs, desires and expectations for the same product. The global product will be
standardized by ISO, indicating total quality management and there will be reasonably
GACL also does international marketing of cement. It has got jetties at Mul-
Dwaraka, Surat, Panvel, and Magdalla. It exports cement to Sri Lanka, South Africa,
Mauritius, and Gulf countries.
CONCLUSION
EVOLUTION OF CHANNELS
Here in Ambuja Cement Ltd sales orders brought by customers through agent and
then comparison is made and decision is taken that who is performing well and who is
performing poor. Consumer is working intimately and regularly with good manner.
FUTURE PLANS
RECOMMENDATION
Gujarat Ambuja Cement Ltd is profit making company. It works smoothly since
its establishment. Here, the company follows all the principles of physical distribution.
The company follows other processing system, it has own warehouse beside production
department, it has inventory control department as a part of material department etc.
therefore; there is no any recommendation in respect of physical distribution of the
company. However the company is making profit, recommended to the company for the
64 A report on Ambuja cement Ltd. Analysis of value chain
development of own channel members rather than depending on agents. It gives discount
on sales to the channel members.
Company has a wide market in all over India. I recommend to the company to
develop its own channel members for developing and covering own markets.
1. PRODUCT
Technically superior product
2. Promotion
Clear & effective promotion & advertising
3. Price
Uniform prices & better value
4. Place
Streamlined logistics to give fresh & regular supplies
After sales services
Service increase the value of the entire product to the final consumer . specially in
cement like product being commodity quality doesn’t matter much what matters is
product as per specification and after sales services. Competitors too are very sharp in the
cement industry the only way to differentiate and set a bench mark is the after sales
services
Direct customer of sales & distribution is Its transporters who are like blood of
sales & distribution who keeps the product moving ambuja has special arrangements for
them. It has set up special canteen and seating facility form them GACL has arranged its
system such that the drivers don’t have to wait more for loading and unloading too at
discharge station . it provides entertainment facility to truck driver to enjoy their wait
time. This is the only reason why truck drivers are happy to work for GACL at low
charges even because they can do more trips in day due to less wait time and GACL
payment to them is on time.
So we can say GACL has mechanized after sales service the major activities done by
GACL as a tool to enhance its after sales services is as follow :
• Set up complaint redress committee of experts.
• Seasonal seminars by technical experts
Supporting activity
Environment control
ACL is spending more than Rs. 5500 million to install the pollution control equipments,
like glass bag house, hot ESP and bag type pulse jet dust collector at various locations, in
addition to this, we are spending around Rs. 10 million per annum to maintain above
equipments.
These equipments are properly operated and maintained continuously to keep the
emission levels much below the norms, specified by Gujarat pollution control board and
central pollution control board.
All the efforts are done to make the atmosphere environment friendly, we have
planted more than 81000 trees in and around the plant premises to maintain the ecology.
Flourishing rose garden set up in the middle of the plant is an evidence of out efforts and
awareness of environment management and control.
The basic control area
Dust pollution
Diesel generator
Thermal power plant
The 3 main type of pollution
1. Air pollution
To control the air pollution through arising from
1. source emission
2. festive emition
to measure it gravimetric dust sampler , personal sampler and IMR Gas
analyzer is used
to control air pollution technique of spreading water, planting and bag filters at
various station in plant and bag filter for inside plant is used.
2. Noise pollution
For measuring the noise level in plant the sound level meter is used.
For controlling it
Noise barriers
For uncontrolled noise personal protecting equipment for every employee working
in plant is used
3. Water pollution
Sewage water reclamation plant (SWRP) Is used and sludge coming out of
it is used as manure in plantation
Pollution deforestation, green house effect, ozone hole…… Big names for big
problems. But the solutions are not all big & complex.
Small actions can make a difference to these big problems. They alone will not solve
the problem, but they will help.
ACT NOW
ENVIRONMENTAL POLICY
AMUJANAGAR
QUALITY CONTROL
The quality at ACL plays very important in final product that is the only
element for which only it is claiming the premium price it has got many awards for
constancy & homogeneity in the final product. So quality control is very crucial
For quality controlling shift wise hourly checking is done at ACL (A,B,C 3
shift of 8 hours)stages of sampling is given below.
1. Crusher section
2. Row mill before silo filling
3. Silo to Preheater
4. After clinker formation in DBC (Deep bucket conveyer)
5. Silo to packing
In addition it takes auto sample every 3 minute of 20 second
And composite sample is taken of 24 hours
For the sample checking concentration v/s value it has XRF lab which has machines
namely XRD,XRA,XRF
Instruments used for quality checking
1. Water bath
2. Test sieve
3. Hot air own(L.R.)
4. Comp. Stn. M/c 20 kn
5. Humidity control oven no.1 and no.2
6. Auto clave no.1 and no.2
7. Humidity chamber
Cement production requires 27 +/- degree temperature
And cement dispatch requires 90% humidity so the quality control department
also keep track of it that all the temperature requirement are fulfilled to ensure full
valued product to the final consumer the little deviation from the prescribed
quality is not tolerated at ACL.
The management & the employers of Gujarat Ambuja Cements Ltd. Are committed to
achieve. “TOTAL CUSTOMER SATISFACTION SYSTEM” in all spheres of our
activities.
We therefore,
Build quality into every sphere of our activities for achieving excellence in
organizational performance.
• Impact of the measures taken above for reduction of energy consumption and
consequent impact on the cost of production of goods :
The main activity of R&D in any cement company is finding alternate sources
of fuel as they are very scarce in nature. For that ACL R&D has ground nut
husk, rice husk, coconut husk, etc but they are seasonal so R&D is trying to check
the usability of Garbage, cotton stork, jetropha plant leaves, tire crumb , coco shell
, castor cake, fuel brick etc can be used as alternate sources of energy.
Due to increase in price of power a new captive power plant based on multiple
fuels like coal,lignie or agro waste is thanks to its R&d activities which really
adds value to the cement production to the company as well as to the customer and
the society as it is take care of the environment too.
• Expenditure on R&D
Procurement
The procurement is value addition to purchase it is some thing more than
just purchase which just talk about what ,when and how but procurement should
include all the things discussed further in the section.
The procurement process in ambuja cement is systematic as it is process
industry every stage in the process requires approval from the authority.
If material that is to be purchased is less than 200,000 the approval required from
Department head if it is greater than 2,00,000 than the purchase order approval
required from the president.
The main machinery and import related purchase decision is done from the
branch office MUMBAI (kalina) . And specially fast moving items are ordered
locally from the plant level only To minimize the time the freedom given to the
User himself to place the order to the plant level or branch level based on the
emergency of the material. All the fast moving items like lubricant , fuels, welfare
items are ordered from site only this amount in GACL to about 2,50,000.
monthly.The basic raw material & its procurement is done as following
1. Lime stone :-
It is one of the key ingredients of cement. As the company is
situated at the place which have a very rich resources of limestone.
2. Gypsum :-
It is one of the waste products of chemical plants. Gypsum is added
to clinker and grinded to form cement, Gypsum is added in cement
in order to increase the settlement time of cement. Gypsum is
added to clinker in the ratio of 95:5 that is 5%
3. Sand stone/silica :-
Silica is added to cement in order to give the strength to the
cement. silica is generally produced from the mines near chotila
area.
4. Red clay :-
This is also one of the raw materials used to produce cement. Red
clay is produced from nageshwari, which is near to Una.
5. Fly ash :-
It is the waste product, which arise from the burned coal from the
thermal power plants. This is one of the raw materials used to
produce cement. It is generally produced from the thermal power
plants of sabarmati & jamanagar.and to reduce the Fly ash cost and
transportation cost of bringing them to the factory ambuja has
established its own thermal power plant to provide electricity to the
factory as well as fly ash to produce PPC. However this amount is
not enough for the factory so it has to buy from outside.
6. Coal :-
It is generally used in preheater & kiln. It is burned inside the kiln
to give high temperature in which the raw material is burned.Coal
is generally produced from Africa through sea route. Coal is even
produced from the coalmines of kutchh.
The procurement department has work in close coordination wit the stores
department and all other department which may any time be the user. And also
from user for the technical advice and supplier. And great help is required from
the Internet , transportation.
For user and supplier satisfaction store department maintain GRN (goods receipt
Note ) when the user ensure that this is the only material which it has indented the
purchaser don’t fanalize and pay the payment so as to reduce the rejection
In Abuja the Quality, right time delivery and required amount of availability of
quantity is give more emphasis rather than price.
Preparation of comparatice
quotation statement from
various supplier quation
Probable Reasons for the delay in the process can be at the following stages
• Getting approval from the authority
• Supplier price quatation
• Courier delay
• User indentation delay.
From the analysis of the entire process of the procurement I can suggest the following
things.
1. To maintain the relationship with supplier for quick replenishment of the order is
very necessary.
2. To minimize the time in the procurement process the firm can place the order to
the supplier via E-mail or Fax rather through courier which the company is doing
right now.
3. company can keep the records of all the department requirements and
consumption pattern so that prediction of the user order can be done and order
can be placed at the quickest time .
4. Up to date record keeping will help in both time minimization and cost
minimization as the supplier wouldn’t be able to replenish the order as when
placed and if require any how they will charge higher prices and have to
compromise with quality too.
5. One most efficient technique in this aspect is rate contract . which means
yearly consumption of fast moving items is given to the supplier and the supplier
maintain the stock on behalf of ACL. which ACL is having but only after holcim
acquisition but contracts are done at corporate level.
6. Keep record and stock of related literature to show to the user for confirmation so
the enquiry time is reduced and cycle time can be minimized.
ACL is preparing the worksheet about overall charges and expenses incurred
at various level by different supplier. In that worksheet probable excise , VAT, and all is
calculated. And depending on that whether to purchase locally from Gujarat or outside
that is at branch level is decided. So that cost can be minimized and time can be saved.and
quality product can be achieved.
As said earlier the relationship with the supplier is very vital to have good communication
with supplier the ambuja is ensuring that
HR support
The companys most distinctive attribute, however, is its approach to the business. Ambuja
follows a unique homegrown philosophy of giving people the authority to set their own
targets, and the freedom to achieve their goals. This simple vision has created an
environment where there are no limits to excellence, no limits to efficiency. And has
proved to be a powerful engine of growth for the company.
Ambuja believes that out of 4 ps the most important is the 5th P that’s PEOPLE
“The equity of a brand can be exponentially liked by rendering qulity service
delivered through people with a positive attitude & right skills.
EQUATION
Effective people = Attitude * (knowledge + skill)
Impact of quality service =
(a thought fill action which fulfills a consumer need ) * people.
As a result, Ambuja is the most profitable cement company in India, and the lowest cost
producer of cement in the world.
Finally , the company endeavors to offer them just and fair compensation. As a
step in this direction, the company has granted stock options to its employees and whole
time directors during the year, the sixth in succession..
Ambuja believe this all has nurtured a strong sense of belonging among our
people, and is a driving force in he company’s growth and performance.
TECHNOLOGY DEVELOPMENT
The technology is the main driving force to any Business proper use and
absorption of technology can help a lot to the growing business and fasten the goal
achievements.
Ambuja has used the technology at maximum extent from plant level to distribution even
that is only the secret of success of Ambuja
Ambuja has a totally different department set up for this purpose called IT
department in ADM building. It has set up a website called Online.com for the
management of this information and communication to the dealer network. It has Oracle
& Developer 2000 base entire system.
Every branch in GACL is connected through VAST , Local line for easy communication
and back up purpose.
All the Dumps of the company are also computerized so that uptodate stock
information can be managed and inventory and warehousing cost can optimized. Orders
given by the dealer are grouped geographically befor executing so as to minimize the
transportation cost which plays major role in total cost of cement supply chain cycle.
Orders by the dealer are given by the flat file to direct company’s sales and distribution
department rather on phone where there possibility of some error and misunderstanding
every dealer of ambuja is connected with that network.
Truck khoj.com:
77 A report on Ambuja cement Ltd. Analysis of value chain
A truck identification and tracking Punching system wherein the concern
parties viz the company, transporter and customer can track their truck and can make
exact approximation that when they will get the delivery.Ambuja is using this technique
However here truck drivers need to punch the card given to them at every booth which the
illiterate truck drivers not concerned of so this technique is not fully utilized but
AMBUJA is in process of implementing it whereas SCL is even not aware of existance if
this system.
Infrastructure
Over 40% of the production cost of cement is power. It quickly became clear to us that if
we were to run a profitable company, wed need to keep power costs to the minimum. So
we focused our efforts on improving efficiency at our kilns to get more output for less
power.
Next we set up a captive power plant at a substantially lower cost than the national grid.
We sourced a cheaper and higher quality coal from South Africa. And a better furnace oil
from the Middle East.
The result is that today were in a position to sell our excess power to the local state
government.
Our sea-borne bulk cement transportation facilities meanwhile has brought many coastal
markets within the easy reach. It has also made Ambuja India's largest exporter of cement
consistently for the last five years.
CEMENT PLANTS
Annual Capacity
FINANCIAL PLANNING
Planning is very necessary for the smooth running of the business. The firm
should be able to achieve its objectives by minimizing the use of resources. The process
of management is facilitate when management charts its future course of action in
advance and take decision in a professional manner, utilizing the individual and group
efforts in a coordinated and rational manner.
Determine the company’s investment needs and choices, given its growth
objective and overall strategy.
Forecasting the company’s revue and expenses and need for funds based on
its investment and dividend policies.
Analyzing the financial alternatives within its financial policy and deciding its
appropriate means of rising funds.
79 A report on Ambuja cement Ltd. Analysis of value chain
Analyzing the consequence of its financial plans for the long term health and
survival to the company.
Evaluating the consistency of financial policies with each other and corporate
strategy.
At G.A.C.L they prepare two types of financial plans short term financial plans,
and long term financial plans.
The plan having short duration generally of one month is termed as short term
plan. In the company, it is prepared separately for every month and is known as cash
budget which is compared with the actual result obtained at the end of the month. The
actual results are acquired from cash roll which are prepared daily. On completion if any
deviations are found, they are corrected.
Long term financial plans are generally of one year is that they are prepared
annually. They are comparatively in detail. These plans are of greater importance as they
revel the financial strength of the company.
1) Business Model
Owned Infrastructure
Logistic Management
Premium Brand - Only selling in Retail Markets
Environment Friendly operations
Social Corporate Citizen
Low Cost Cement Producer
AMBUJA focus :
Best quality cement
Good packaging
Strong distribution network
Customer service
Costing
From the above listing it is clear that major part of the total cost is Transportation. Again
it is under control of the company by
CONCLUSION
One of the fundamental underpinnings of the new global integration is the stress
on knowledge intensity and the utilisation of information in economic activity. Within
nearly all forms of productive activity the importance value in the final product reaching
to the customer
The following is the result of my research on value chain system used in GACL.
2. GACL is the pioneer in thinking about Environment protection & has done
many activities for Environment prevention it has fitted dusting control bag at
every dust producing stage in production plant and has established green city
near by and GACL is using surface miner rather than blasting technique for
environment protection.
3. GACL has performed its corporate citizenship very well. It has built check
dams and temples and many more things for citizens.
4. GACL is providing excellent after sales services to the customer for that it has
establish all together different department of civil engineer for guiding
customer in construction activity.
GACL always believes in delivering value product to the customer for that it is
doing the following things.
2. Effective differentiation
Ambuja is crating differentiation by the following ways.
Firstly there was no ad in cement industry the trend started with
ambuja it was the pioneer in giving ad of cement like products.the
fist ad was given in news paper. Now they giving more in sports
events.
Ambuja is the first in providing engineering services to the
customer as after sales services.
Firm Infrastructure
Technology Development
MARGIN
Procurement
Line Operations
Inbound
logistic Operation
Outbound Marketing Service
logistics & sales
Thus how the value can be added in the supply chain management system in ambuja
cement company is discussed further in the report. So that following things can be
achieved.
• Quality can be improved
• Time of the entire cycle can be minimized
• Cost of the entire activity can be minimized
• Value to the consumer can be maximized.
The study will include discussion of the role of all the department playing importance in
the chain. And how value can be added at every stage.
Supply chain management system comparison of AMBUJA CEMENT LTD (ACL) with
Saurastra cement ltd. (SCL ) Brand name Hathi cement
Procurement
In cement industry as a whole orders are turn key with delivery schedule
As the procurement process is shown in above sections the time required by both
company at different stage for consumable goods for which company maintains main
max stock is shown below. For basic raw materials orders and relinishments are constant
and done from head offices itself.
Production
Up to clinkerization cement production is continious process so SCL has combined all its
4 plants in coninous process for efficient processing as its having most of row
material(lime stone )
available in bulk from near by mines. The given capacity of ambuja is of its one plant
only however its having 4 plants as mentioned above.
The sales & distribution cycle time of GACL & SCL are as follow
The distribution cycle starts right from where the production finishes so from packer to
destination unloading and reaching back to source. The detail time is as follow.
ANALYSIS
FINDINGS
90 A report on Ambuja cement Ltd. Analysis of value chain
From the above time study I found that GACL On total requires 153 days
and 17 hours to complete the entire supply chain cycle where as SCL requires 223 days
to complete the same cycle this difference of 70 days is due to the following reasons :
1. Indentation system of SCL is more time taking whenever the user department
want to order any material the order takes much time to reach to finally purchase
department because of lack of co-ordination.
2. The order placing process in SCL requires much time because every order greater
than 50000 requires approval from the head office. While in GACL only orders
>100000 requires approval from the head office.
1. SCL is having the mines near by that is only 5 to 7 km distance where as GACL is
having the mines in distance of 15 to 17 km so the lime stone movement requires
more time by GACL.
2. GACL is giving direct feeding in some stages so that no need to put the material in
yard. For that 12 minute is saved . whereas SCL is having low capacity machinery
at continuous process stages so up to lime stone size reduction is simultaneously
co ordinated but after that it have to loose time.
1. GACL is having Auto loader to load the cement so it requires less time to load the
tanker whereas SCL is having only 1 auto loader that too of lease so it requires
less time.
2. GACL is having its own jetty at muddwarka only 12 km away from the factory so
transportation time is saved & special dedication given to GACL transport only
(wait time reduction ) so it fasten the process.
SUGGETION
91 A report on Ambuja cement Ltd. Analysis of value chain
From the above discussion and my exploration I would like to suggest the following
things to company to reduce the time in supply chain process.
For procurement
2. Company should go for more rate contracts with supplier for common purchase in
which the supplier company maintain yearly stock of the material as specified on
specified rate for the specified time on the company’s behalf so that the time in
supplier selection , and negotiation can be saved.
For production
2. SCL is more concentrating on export business and for local in saurastra supplies it
mainly uses road transport & in road transport it is facing the problem from
Porbandar truck drivers association it creates for huddles for the company which
slow down the process so it should concentrate more on road transport for even
domestic supply which is really efficient and faster as GACL is using it at its
optimum extent as it is the pioneer in loose transportation of cement . so SCL
should also start domestic transport form sea ways in bulk.
LIMITATION
3. Because of busy schedule with the head of the departments they are able
to allot less time to management trainees for the project guidance so I
have to suffer a lot to get information.
4.
Bibliography
BOOKS
1. MARKETING MANAGEMENT
BY – PHILIP KOTTLER
2. Research Methodology
By -- C. R. Kothari
3. Business marketing management
By – Michael D. HUTT
Thomas W. Speh
8 th edition
WEBSITES
1. WWW.GUJARATAMBUJ.COM
2. WWW.MEHTAGROUP.COM
3. WWW.CMAINDIA,COM
4. WWW.GOOGLE.COM
5.
ANNEXURE
Annexure 1: Questionnaire for procurement department
Annexure 7: INVOICE
Q 3. How suppliers are notified for product replenishment is there EDI system in use ?
Q 4. How the relationship with suppliers is managed what steps are taken ?
Annexure 2 :
Q 3. What can be done to make mining blast free for environment prevention ?
.Q 5. Import of coal and Furness oil for the last and current year ?
Q 6. Export of cement & clinker for the current and previous year ?.
Annexure 3 :
Q 1 What are the different ways through which the distribution (modes) of final product
is done ?
Q9 What after sales services are provided to increase the satisfaction of the consumer ?
Q 10 What is the status of planned and actual sale and region wise dispatches for last 2
years ?
Q 15 What sort of support required from other departments to achieve the target &
enhance the quality the sales of the final product ?
Q 17 How value can be added in dispatch process at different stage and how price can
be managed and convinced to customer as ambuja is positioned as premium
brand in the market ?
Q 18 Is ambuja having its own channel memebers for distribution or using agents
Q 19 On what bases the modes of transport are decided upon ?
Q 20 Any suggetion to improve the distribution cycle and increse value to final
consumer of the product ?