A framework of supply chain management of hindalco

RAJIV ACADEMY FOR TECHNOLOGY &
MANAGEMENT
SUMMER TRANING PROJECT REPORT
On
A FRAMEWORK OF “SUPPLY CHAIN MANAGEMENT”
Submitted for the Partial fulfillment towards the award
of the degree in MASTER OF BUSINESS ADMINISTRATION
Of
U P Technical University, Lucknow
Submitted By Under the Guidance of
Akanksha Tripathi Dr. Vikas Jain
Roll Number: 0817370002 Department of Management
Session – 2009-10

PREFACE
In its broadest sense summer training project report is necessary to make the students of business school
familiar with the industrial environment prevailing in the world. To be competitive and work aggressive, students
need to know the policies, procedures and the trends going on in the present industrial world.
The purpose and objective of this project report is to find out the
The report is hard intends to reflect some of the basic covered under the “SUPPLY CHAIN
MANAGEMENT” of HINDALCO, EXTRUSIONS a first truly “MNC” of
India. The total aspects have been formulated and presented on the basis of ideas and information
gathered by this investigator during a shorter span of project training i.e. an important portion of the
MBA curriculum leading to an opportunity for the participant to have a practical exposure of the contents
under the topic beyond what has already been studies during the class-room interaction.
This report has been written in response to a comprehensive study, conducted on the “SUPPLY CHAIN
MANAGEMENT” of “HINDALCO INDUSTRIES LIMITED”. The report mentions and evaluates the
various aspects, pertaining to the distribution channel of the company. After a thorough analysis of the
various facts stand figures, a set of recommendations has been given at the end of the report.
Accuracy and precision has been given the prime consideration, while compiling the report, are
authoritative and authentic.
We are confident that anyone who goes through the report will learn how much we have learnt &
benefited
during this period.
H I N D A L C O I N D U S T R I E S L T D .
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ACKNOWLEDGEMENT
At the onset I must bow down in reverence to the almighty that blessed us with the understanding & prevalence
that is needed in this kind of project report.
With great pleasure I express my heartiest thanks to Dr. Mahesh P Kumar (Officiating Director – RATM), Mr.
Vikas Jain (PC – M.B.A. Deptt.). I would like to extend my sincere thanks to Mr. Vikas Jain [Lecturer – Deptt.
of Management Studies], without whose unrelated support and guidance, this project would just not have been
possible. I am very thankful for his invaluable guidance, support, and affable & friendly nature. He/She guided
me at each and every stage of project.
I am equally indebted to my friends who always inspired and motivated me to do something better through out
this project.
At last I would like to extend my sincere thanks to all the respondents to whom I visited for giving their support
and valuable information, which helps me in completing my project work.
AKANKSHA TRIPATHI
M.B.A.III Sem
Roll No. 0817370002
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STUDENT’S DECLARATION
I, Akanksha Tripathi, hereby declare that this work entitled A Framework of “supply chsin managment” is
the result of summer training under taken. The findings and conclusions expressed in this report are genuine,
authentic and are for academic purpose. Any resemblance to earlier research work is purely coincidental.
AKANK
SHA TRIPATHI
M.B.A. VI Sem
Roll No. 0817370002
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TO WHOMSOEVER IT MAY CONCERN
Thi is to certify that Mr./Ms…Akanksha
Tripathi……………………………………… S/o, D/o………Ved Prakash
Tripathi………………. Roll No……0817370002….....…..……… student
of MBA III Semester (Batch 2009-10) of this institution has done
summer training project report titled A Framework of “supply chain
management”………………… …………………..”.
The project has been prepared and submitted by the above named in
partial fulfilment of the Master of Business Administration degree
Programme (MBA) as per the requirement of U. P. Technical
University, Lucknow.
Date : (Dr. Mahesh P. Kumar)
Place : Mathura Officiating Director
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TABLE OF CONTENTS
Preface…………………………………………………………………………...
Acknowledgement………………………………………………………………
Student’s Declaration……………..…………………………………………….
Certificate …………………….…………………………………………………
1.0 Introduction to the Topic.………………………………………………….. 00
2.0 Introduction to the Organization/Industry………………………………… 00
3.0 Objectives of the Study……………………………………………………. 00
4.0 Scope of the Study………………………………………………………… 00
5.0 Literature Review………………………………………………………...... 00
6.0 Research Methodology…………………………………………………… 00
6.1 Universe of the study…………………………….…………………… 00
6.2 Sample Size…………………………………………….………........... 00
6.3 Sampling Method…………………………………………….……….. 00
6.4 Tools for Data Collection……………………………………..………. 00
7.0 Data Analysis & Interpretation……………………………………………. 00
8.0 Findings…………………………………………………………………….. 00
9.0 Recommendations & Suggestions………………………………………. 00
10.0 Conclusion…...…………………………………………………………… 00
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10.1 Limitations of the Study……………………………………………..…… 00
10.2 Scope for further research………………………………………………. 00
Bibliography…………………………………………………………………...... i
Appendix [Questionnaire]……………………………………………………... ii
LIST OF TABLE
S.
No.
TABLE
No.
PAGE
No.
REFRENCE DETAILS
LIST OF CHARTS
S.
No.
TABLE
No.
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No.
REFRENCE DETAILS
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The Winning organizations will be those who regularly outperform competition. They have a stable
consistent strategy. A stable strategy does not mean a static strategy, rather it means following a brand
philosophy and continuous improvement in how strategy is manifested, incorporating the expected
market requirements and the customer needs.”
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(…….KUMAR MANGALAM)
ABOUT
ADITYA BIRLA GROUP
CHAIRMAN: Shri Kumar Mangalam Birla
“People build company’s success; where people grow, profits grow.”
Group vision
“To become a premium conglomerate with clear business focus at each corporate level.”
Group mission
“To deliver value for our customer, shareholders, employees and society at large.”
Group Philosophy
Reset on four pillar
::Customize
:: People-size
::Strategize
::Institutionalize
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Group values
::Integrity
::Speed
::Seamlessness
::Passion
INTRODUCTION TO GROUP
I.1 ADITYA BIRLA GROUP
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A US $28 billion corporation with a market cap of US $31.5 billion and in the league of Fortune 500,
the Aditya Birla Group is anchored by an extraordinary force of 100,000 employees, belonging to 25
different nationalities. In India, the Group has been adjudged "The Best Employer in India and among
the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007. Over 50 per
cent of its revenues flow from its overseas operations.
The Group operates in 20 countries: India, Thailand, Laos, Indonesia, Philippines, Egypt, China,
Canada, Australia, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland,
Malaysia and Korea.
Globally the Aditya Birla Group is:
:: A metals powerhouse, among the world's most cost-efficient Aluminium and Copper producers.
Hindalco-Novelis from its fold, is a Fortune 500 company. It is the largest Aluminium rolling
company. It is one of the three biggest producers of primary Aluminium in Asia, with the largest
single location copper smelter.
:: No.1 in viscose staple fibre
:: The fourth largest producer of insulators
:: The fourth largest producer of carbon black
:: The 11th largest cement producer globally
:: Among the world's top 15 BPO companies and among India's top three
:: Among the best energy efficient fertilizer plants
In India:
:: A premier branded garments player
:: The second largest player in viscose filament yarn
:: The second largest in the chlor-alkali sector
:: Among the top five mobile telephony companies
:: A leading player in life insurance and asset management
:: Among the top three supermarket chains in the retail business
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Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in
the way of the need to keep learning afresh, to keep experimenting.
Beyond business — the Adyta Birla Group is:
:: Working in 3,700 villages
:: Reaching out to seven million people annually through the Adyta Birla Centre
:: Focusing on: health care, education, sustainable livelihood, infrastructure and espousing social causes
:: Running 41 schools and 18 hospitals
Fact file
The world's largest aluminum rolling company
World leader in viscose staple fiber
One of the biggest producers of primary aluminum in Asia
Fastest-growing copper company in Asia
The Adyta Birla Group is the 11th largest cement producer in the world.
Fourth largest producer of carbon black in the world
One of the lowest-cost producers of aluminum in the world
ISO 9001:2000 and 14001 certified
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ADITYA BIRLA GROUP
key products and brands Locations Capacities Country
Hindalco Industries Ltd.
Alumina Chemicals Renukoot (Uttar Pradesh),
Muri (Jharkhand), Belgaum
(Karnataka)
1,160,000 tpa India
Primary Aluminium Renukoot, Hirakud (Orissa),
*Taloja
489,000 tpa
Extrusions Renukoot, Alupuram 27,700 tpa
Rolled products Belur(West Bengal),
Taloja(Maharashtra), Renukoot,
Mauda(Maharashtra)
200,000 tpa
Wire rods Renukoot, Alupuram(Kerala) 64,400 tpa
Aluminium foil Silvassa (Dadra & Nagar Haveli),
Kalwa(Maharashtra)
11,000 tpa
Aluminium Wheels Silvassa (Dadra & Nagar Haveli) 300,000 pcs
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*For Taloja recycling plant
Indal (subsidiary of Hindalco)
Foil Rolling Kollur (Andhra Pradesh) 4,000 tpa
key products and brands Locations Capacities Country
Birla Copper (Hindalco Industries Ltd.)
copper cathodes Dahej (Gujarat) 500,000 tpa India
continuous cast copper rods 97,200 tpa
Sulphuric acid 1,670,000 tpa
phosphoric acid 180,000 tpa
gold (Birla Gold) 15 mt
silver (Birla Silver) 150 mt
DAP and complexes (Birla
Balwan)
400,000 tpa
Hindalco Industries Ltd. (Aditya Birla Minerals Resources Pty. Ltd.)
copper cathodes Nifty mines 25,000 tpa Australia
copper in concentrate Mt. Gordon mines 40,000 tpa Australia
Power Mt. Gordon mines 28mw Australia
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Key products and brands Capacities Country
Grasim Industries Ltd.
white cement Birla White 475,000 tpa India
grey cement UltraTech
Cement (formerly
Birla Plus), Birla
Super
13.12 mtpa
UltraTech Cement Ltd.
ordinary Portland cement, Portland
blast furnace slag cement, Portland
pozzolana cement and grey
Portland cement
17 mtpa
key products and brands Capacities Country
Aditya Birla Nuvo Ltd (Hi-Tech Carbon)
carbon black Birla Carbon 230,000 mtpa India
Thai Carbon Black Co. Ltd.
carbon black Birla Carbon 220,000 mtpa Thailand
Alexandria Carbon Co. S.A.E
carbon black Birla Carbon 285,000 mtpa Egypt
Liaoning Birla Carbon Co. Ltd.
carbon black Birla Carbon 55,000 mtpa China
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key products and brands Capacities Country
Pulp
rayon grade pulp 70,000 tpa India
AV Cell Inc.
softwood / hardwood pulp 122,500 tpa Canada
AV Nackawic Inc.
dissolving pulp 189,000 tpa Canada
Fibre
viscose staple fibre (VSF) Birla Viscose 270,100 tpa India
Thai Rayon Public Company Ltd.
VSF Birla Viscose 110,000 tpa Thailand
PT Indo Bharat Rayon
VSF Birla Viscose 155,000 tpa Indonesia
Thai Acrylic Fibre
acrylic fibre Texlan 100,000 tpa Thailand
Alexandria Fiber Company, S.A.E
acrylic fibre 18,000 tpa Egypt
Yarn
Aditya Birla Nuvo Ltd.
viscose filament yarn Ray One 16,400 tpa India
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Aditya Birla Nuvo Ltd. (Jaya Shree Textiles)
flax yarns 15,340 spindles India
worsted yarns 25,548 spindles
PT Indo Liberty Textiles
rayon yarn, polyester,
blended yarn
45,120 ring spindles Indonesia
PT Elegant Textile Industry
rayon, polyester, rayon-
polyester blended spun
yarn
168,088 spindles Indonesia
PT Sunrise Bumi Textiles
viscose rayon, polyester viscose, spun polyester,
polyester combed cotton, anti pill yarn, sewing
thread, high twist yarn, reverse twist yarn, flame
retardant yarn, rayon cotton blended yarn, micro
denier polyester rayon yarn, rayon silk yarn, slub
yarn, lycra core spun yarn
89,376 spindles Indonesia
Indo Phil Acrylic Manufacturing Corporation
high bulk acrylic dyed yarn, non-bulk acrylic dyed
yarn
3,700 mtpa Philippines
Indo Phil Textiles Mills Inc
poly viscose blended yarn, poly cotton blended
yarn, polyester yarn
13,500 mtpa Philippines
Indo Phil Cotton Mills Inc
cotton yarn 10,000 mtpa Philippines
Indo Thai Synthetics Co. Ltd.
synthetic yarns 98,568 spindles Thailand
Fabrics
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fabric - polyester, viscose, silk and wool blends 146 looms India
Uncrushables, Ice Touch, Purista, and CleanFab 18 million meters
Pure Linen and Linen
Blends
Linen Club 107 looms India
Flame Retardent Fabrics Pyroguard
Branded apparel
Aditya Birla Nuvo Ltd. (Madura Garments)
Ready-to-Wear Garments Louis Philippe,
Allen Solly
Van Heusen, Peter
England
India
Key Products and Brands Capacities Country
Indo Gulf Fertilisers Ltd.
Urea Birla Shaktiman 864,600 mt India
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Birla Copper (Hindalco Industries Ltd.)
DAP/NPK complexes Birla Balwan 400,000 tpa India
Caustic Soda 258,000 tpa India
Caustic Soda 82,125 tpa India
Liquid Chlorine 50,340 tpa
Hydrochloric Acid 5,475 tpa
Tanfac Industries Ltd.
Aluminium Fluoride 17,000 tpa India
Hydrofluoric Acid 17,000 tpa
Bihar Caustic and Chemicals Ltd.
Caustic Soda Lye 92,750 mt India
Liquid Chlorine 65,785 mt
Hydrochloric Acid 29,040 mt
Sodium Hypochlorite 1,800 mt
Compressed Hydrogen 17,42,400 nm3
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Aluminium chloride 12000 tpa
Captive Power Plant 30 mw
Aditya Birla Chemicals (Thailand) Ltd.
Sodium Triployphosphates,
Tetrasodium Pyrophosphate,
Sodium Hexametaphosphate,
Sodium Acid Pyrophosphate,
Monosodium Phosphate,
Disodium Phosphate,
Trisodium Phosphate,
Speciality Phosphates
Epoxy Resins (bis-a and bis-f),
Diluents, Curing Agents
and Allied Products
Sodium Sulphite, Sodium
Metabisulphite,
Sodium Bisulphite
Epichlorohydrin
Caustic Soda
Chlorine
Polyphos®
Epotec
Birlasulf-SS,
Birlasulf-SM,
Birlasol 35
Thailand
Thai Peroxide Co. Ltd.
Hydrogen Peroxide, Peracetic
Acid, Calcium Peroxide
Encare,
Ecare, Aqua-
x,
Birlox 5, Birlox
12, Ocare
15,000 mtpa Thailand
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PT. Indo Raya Kimia
Carbon Disulfide 50,000 tpa Indonesia
Essel Mining & Industries Ltd
Iron and Manganese Ore 15 million tons India
Pan Century Surfactants Inc.
Fatty Acids 55000 mtpa Philippines
Fatty Alcohol 30000 mtpa
Glycerin 6500 mtpa
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Aditya Birla Insulators
Insulators 38,800 tpa India
PSI Data Systems Ltd. (subsidiary of Aditya Birla Nuvo Ltd.)
IT solutions (banking, finance and insurance) India
Aditya Birla Minacs Worldwide Limited (subsidiary of Aditya Birla Nuvo Ltd.)
BPO / ITES 9,089 seats India
Birla Global Finance Company Ltd.
Financial Services India
Birla Sun Life Insurance Company Ltd.
Insurance Solutions India
Birla Sun Life Asset Management Company Ltd.
Mutual Funds India
Birla Sun Life Distribution Company Ltd.
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Investment Planning Services India
Birla Insurance Advisory Services Ltd.
Non-Life Insurance Advisory Services India
Idea Cellular
Cellular Services Idea 21 million subscriber base India
Aditya Birla Retail Limited
Multi-Format stores 170 retail outlets India
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HINDALCO OVERVIEW
INTRODUCTION
Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group, is an industry
leader in Aluminium and copper. A metals powerhouse with a consolidated turnover in excess of US$
14 billion, Hindalco is the world's largest Aluminium rolling company and one of the biggest producers
of primary Aluminium in Asia. Its Copper
smelter is the world’s largest custom smelter at a single location.
Established in 1958, Hindalco commissioned its Aluminium facility at Renukoot in Eastern U.P. in
1962. Later acquisitions and mergers, with Indal, Birla Copper and the Nifty and Mt. Gordon copper
mines in Australia, strengthened the company's position in value-added Alumina,Aluminium and
copper products, with vertical integration through access to captive copper concentration.
In 2007, the acquisition of Novelis Inc. a world leader in Aluminium rolling and can recycling marked a
significant milestone in the history of the Aluminium industry in India. With Novelis under its fold
Hindalco ranks among the global top five Aluminium majors, as an integrated producer with low-cost
alumina and Aluminium facilities combined with high-end rolling capabilities and a global footprint in 12
countries outside India. Its combined turnover of US$ 14 billion, places it in the Fortune 500 league.
Hindalco in India enjoys a leadership position in Aluminium and Copper. The Company's Aluminium
units across the country encompass the entire gamut of operations from bauxite mining, alumina
refining, aluminium smelting to downstream rolling, extrusions, foils and alloy wheels, along with
captive power plants and coal mines. The Birla Copper unit produces copper cathodes, continuous
cast copper rods along with other by-products, including gold, silver and DAP fertilizers.
All of Hindalco's units are ISO 9001:2000, ISO 14001:2004 and OHSAS 18001 certified. The
Renukoot and Taloja units have gone a step further with an Integrated Management System (IMS),
combining ISO 9001, ISO 14001 and OHSAS 18001 into one Business Excellence Model.
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The company has been accorded the Star Trading House status in India. Its aluminium metal is
accepted for delivery under the High Grade Aluminium Contract on the LME (London Metal
Exchange), while its copper quality standards are also internationally recognized and registered on the
LME with Grade “A” accreditation.
Grade “A” accreditation.
Aluminium
Hindalco’s major products include Standard and Speciality Grade Aluminas & Hydrates, Aluminium
Ingots, Billets, Wire Rods, Flat Rolled Products, Extrusions, Foil and Alloy Wheels.
The integrated facility at Renukoot, (Uttar Pradesh) houses an Alumina Refinery
and an Aluminium Smelter along with facilities for production of semi-fabricated
products, namely, Redraw Rods, Flat Rolled Products and Extrusions. The plant
is backed by a co-generation plant and a 742mw captive power plant at
Renusagar to ensure continuous and consistent supply of power for smelter and
other operations.
The aluminium alloy wheels plant is located at Silvassa (Dadra and Nagar Haveli). Hindalco was
among the first few alloy wheels companies to have obtained the ISO/TS 16949 certification to meet
the stringent standard of the automobile industry.
A strong presence across the value chain and synergies in operations has given Hindalco a major
share of the domestic value-added products market. In India, the company enjoys a leadership
position in Speciality Aluminas and Hydrates as well as in Primary Aluminium and downstream semi-
fabricated products. As a step towards expanding the market for value-added products and services,
Hindalco has launched several brands in recent years. These include the Aura Aluminium Alloy
Wheels for cars, Everlast Roofing Sheets and Freshwrapp and Freshpakk household foil for
packaging.
Hindalco's Aluminium Galleries in Mumbai and Gurgaon showcase the versatility of aluminium through
a wide range of applications.Apart from being a major player in the domestic market, Hindalco's
products are well accepted in international markets. Exports account for more than 20 per cent of total
sales of aluminium products.
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Hindalco is a leading domestic player in two metals business segments — aluminium and copper.
The aluminium division's product range includes alumina chemicals, primary aluminium ingots, billets,
wire rods, rolled products, extrusions, foils and alloy wheels.
The company has a significant market share in all the segments in which it operates. It enjoys a
domestic market share of 42 per cent in primary aluminium, 63 per cent in rolled products, 20 per cent
in extrusions, 44 per cent in foils and 31 per cent in wheels.
As a step towards expanding the market for value-added products and services, Hindalco has
launched several brands in recent years, which include Aura for alloy wheels, Freshwrapp for kitchen
foil and Everlast for roofing sheets. Our exclusive showroom, The Aluminium Gallery, seeks to
promote Hindalco products to its customers. It is a platform for the company to showcase quality
products to a quality audience in an appropriate ambience. The exhibits include products like
windows, doors, furniture, ladder, roofing sheets and ceiling and cladding panels.
Hindalco's products are well received not only in the domestic market, but also in the international
market. The company's metal is accepted for delivery under the high grade aluminium contract on the
London Metal Exchange (LME). The company exports about 17 percent of its total sales volume of
aluminium.
The company's alumina chemical business is a leader in manufacturing and marketing of speciality
alumina and alumina hydrate products in the country. It has a major market share in the country.
These speciality products find wide usage in diversified industries including water treatment
chemicals, refractories, ceramics, cryolite, glass, fillers and plastics, conveyor belts and cables,
among others. The company also exports these alumina chemicals to over 30 countries covering
North America, Western Europe and the Asian region.
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Birla Copper, Hindalco's copper division at Dahej in Gujarat, enjoys a leadership position in India,
having built over 40 per cent of the domestic market share within three years of its commissioning. It
has also made successful forays into the export markets of the Middle East, Southeast Asia, China,
Korea and Taiwan.
The copper plant produces world-class copper cathodes, continuous cast copper rods and precious
metals. Sulphuric acid, phosphoric acid, di-ammonium phosphate, other phosphatic fertilizers and
phospho-gypsum are also produced at this plant.
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Some recent milestones
:: In May 2007, Novelis became a Hindalco subsidiary with the completion of the acquisition
process. The transaction makes Hindalco the world's largest aluminium rolling company and one
of the biggest producers of primary aluminium in Asia, as well as being India's leading copper
producer.
:: In May 2006, the company signed a MoU with the Government of Madhya Pradesh for setting up
a Greenfield aluminium smelter and a captive power plant. The company also entered into a joint
venture with Essar Power (M.P.) Ltd. to develop and operate coal mines at Mahan, Madhya
Pradesh. The joint venture will supply coal to the proposed aluminium smelter and power complex
in Madhya Pradesh
:: In May 2006, the company's copper mining subsidiary Aditya Birla Minerals Limited (formerly Birla
Mineral Resources Pty Ltd.) came out with an equity offering and subsequent listing on the
Australian Stock Exchange (ASX)
:: In March 2006, the company acquired an aluminium rolling mill and wire rods facility, from Asset
Reconstruction Company (India) Limited (ARCIL), belonging to Pennar Aluminium Company
Limited
:: In January 2006, the company concluded 4:1 rights issue of its shares on partly paid basis. It was
the largest ever rights issue in the history of corporate India and first one to issue partly paid
instruments
:: In September 2005, the company split its shares in ratio of 10:1 in order to enhance liquidity and
to encourage participation from retail investors
:: In April 2005, the company signed an MoUs to establish a world class integrated aluminium
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project in the state of Orissa
:: In April 2005, the company entered into MoUs with the Orissa and Jharkhand governments for
setting up a Greenfield alumina facility and aluminium facility respectively, in the states
HINDALCO VISION
“To strengthen our position as a premium aluminium company sustaining
domestic leadership and global competitiveness through Innovation Quality and Value added growth”
HINDALCO MISSION
“To pursue the creation of value for our customers, shareholders, employees and society at large”
QUALITY POLICY
We, at Hindalco, shall aim to achieve and sustain excellence in all our activities.
We are committed to total customer satisfaction by providing products and services, which meet or
exceed the customer’s expectations.
Modernization of the manufacturing facilities, stress on technological innovation and training of
employees at all levels shall be a continuous process in Hindalco.
A motivated workforce with a sense of pride in the Organization shall lead us towards total Quality.
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HINDALCO PRODUCT RANGE
1. 2. 3.
Primary Aluminium Alloy ingots Billets
4. 5. 6.
Aluminium sheet Wire rods sheet Slab
7. 8.
Circle Alloy wheel
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-
FLAT ROLLED PRODUCTS (FRPs)
Hindalco is the world's largest Aluminium rolling company with the
acquisition of Novelis, the global leader in value-added high-end
aluminium flat rolled products and aluminium can recycling. The combined
volume of sales of flat rolled products in the world market is about 3
million tones and the market share is more than 20 per cent.
Hindalco is the largest manufacturer of the entire range of flat rolled
products in India. It enjoys nearly 60 per cent of market share and its
rolled products are widely used in various segments such as packaging,
transportation, building and construction, electrical, defense and general
engineering applications.
The company's commitment to quality and service along with its extensive infrastructure has made
Hindalco a prime source for best-selling brands. Continuous improvements in manufacturing,
processes, practices and systems ensure that customers' needs and expectations are fully met.
Efficiency and product quality are ensured by using state-of-the-art equipment and a strong research
and development set-up, supported by dedicated and motivated employees and the Oracle ERP
system. Wag staff Air Slip™ slab casting technology is used to ensure consistent quality and surface
finish of stock feed which in turn ensures quality finished products. The company's capacity in flat
rolled products at present is 2,00,000 tones per annum and new plans are being implemented to
increase the manufacturing capacity.
Of the total production of Hindalco's flat rolled products, around 40 per cent is
exported and customers in more than 50 countries are using the products.
Everlast, a Hindalco brand for aluminium roofing sheets, offers ideal and
economical solutions for all roofing and cladding needs. Colour-coated and
tiled roofing profiles are also offered by Hindalco.
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Hindalco is now world
No.1 in aluminium flat
rolled products

II.1 Basically, there are three kinds of Flat Rolled Products (FRPs) which is being exported by
Hindalco i.e.,
1. Cold rolled Coils
2. Cold rolled Sheets
3. Circle
Hindalco's cold rolled coils are precision-finished to match international standards. They have good
shape, high tolerance, versatility and blemish-free surfaces. They are used in commercial and general
engineering applications such as bus bodies, cladding and fan blades.
The company meets the demands of its ever-growing clientele with continuous upgrades and process
improvement.
Hindalco's cold rolled sheets are precision-finished to match international standards for tight thickness,
tolerance, flatness and dimensional accuracy. Sound metallurgical properties for further fabrication,
anodizing characteristics and a blemish-free surface make it useful in both commercial and general
engineering applications.
ROLLED PRODUCT APPLICATIONS

Circles
:: Pressure cookers, non-stick cookware and hard anodized cookware
:: Milk cans
:: Medical cylinders
Closure stock
:: Pilfer-proof caps
:: Vial seals
:: Cream containers and caps
Cold rolled coils
:: Bus cabins and bodies
:: Insulation
:: Cladding in buildings, aluminium composite panels, false ceilings and
paneling (plain or colour-coated coils)
:: Electrical busbar ducting, flexible, transformer strips, etc
Cold rolled sheets
:: Defense
:: Industrial engineering
:: Transport — road, rail, air, marine
:: Building and construction
:: Fan blades
:: Electrical engineering
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Fin stock
:: Air conditioners
:: Car radiators
:: Automobile heat exchangers
Flooring sheets / tread plates
:: Flooring for buses, trucks and rail coaches
:: Floors for loading bays, kick plates, stair treads and catwalks
Foil stock
:: Parma / confectioneries / cigarette foils
:: Foils
:: Tetra packs
Lamp cap stock
:: GLS lamps and tube lights
Litho stock
:: Offset printing plates
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Pattern sheets
:: Decorative applications like interior paneling for trucks, cabins, etc
Printed Circuit Boards (PCB) entry sheets
:: Electronic circuit boards
Plates
:: Electrical bus bars and ducting
:: Tanks
:: Ships, boats (corrosion-resistant and wieldable plates)
:: Defense and industrial uses (strong alloy plates)
:: Aircrafts
Spiral Fin stock
:: Industrial heat exchangers
FOIL PACKAGING
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Hindalco's foil business and packaging division delivers versatile solutions to meet the multi-pronged needs of customers
round-the-clock. Hindalco's packaging solutions and impressive range of end products are well-accepted all over the world,
thus ensuring sustainable growth in today's intensely competitive and cost-sensitive market.
Applications
Pharmaceuticals
25/30/40-micron thick, soft foil either laminated
to low density polyethylene or coated with heat
seal lacquer (HSL) for sealing as per customer
need.
20/25/30-micron thick, hard foil coated with
heat seal lacquer of varied gram mages.
Compatible with PVC.
45-micron foil, laminated on one side to 25
micron OPA and 60 micron PVC film on the
other side to meet the fast emerging Alu
packaging needs. Hindalco offers a maximum
depth of 9mm.
7/9/12-micron thick, soft foil laminated with
paper, films like polyester (PET), biaxially
oriented polypropylene (BOPP), polyethylene
(poly) and their combinations. Chiefly used for
pouches and sachets. Offered in both surface
and reverse printing.
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Rolled to very fine tolerances for more closures
per ton of stock. Closure caps have high
formability, strength, low earing and printable
surfaces. Widely used for pilfer-proof bottle
caps and vial seals. Offered in both coated and
bare form.
Dairy
9-micron thick, soft foil laminated to grease-
proof paper, used for butter chiplets.
30/38/40-micron thick, soft foil coated with heat
seal laquers (HSL), compatible with PS and PP
containers. Used for cheese spreads, yoghurts
and mineral water.
7/9-micron thick, soft foil laminated to polyester
and poly with reverse printing on polyester.
House foil and semi rigid containers
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Household foil is available in a range from 10
micron upwards. Widths can vary as per
market requirements. Semi rigid containers are
available in a range of sizes and shapes.
Processed food and beverages
9/12-micron thick, soft foil with printing on one
side and heat seal lacquer (HSL) coating or
polythene lamination on the other. Also offered
as a laminate of 9-micron foil with paper and
wax.
9-micron thick, soft foil with printing on foil
surface, laminated to paper and further coated
with wax. Also 7-micron foil printing on foil
surface, laminated to paper and further coated
with wax.
Polyester, foil and polythene laminates for
packing coffee.
7-micron foil with printing on foil surface and
poly laminated to paper.
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Cigarette foil
Cigarette foil for inner packing of cigarettes is
offered in 7-micron thick soft foil laminated to
paper. Foil can be silver or gold lacquered in
matte of bright finish as per customer
requirements.
Personal products
Flexible laminated tubes that utilize 12/20-
micron thick soft aluminium foil laminate.
Extensively used in toothpastes, cosmetics,
ointments, cream and foodstuffs.
7/9-micron thick, soft foil laminated to board
with adhesive or polythene as per customer
demand.
9-micron thick, soft foil or BOPP and heat seal
lacquer (HSL) coated or co-polymer laminated
as per customer demand.
Surgical
The laminates have two components, top —
paper, 40 micron foil, co-polymer structure and
bottom — coated, 50 micron foil, co-polymer
structure
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Heating ventilation and air conditioning (HVAC)
80-160-micron thick foil, soft or partially
annealed temper, offered bare as well as with
hydrophilic and hydrophobic coatings in blue or
gold colour. The coated foil enhances the life
of the air conditioner and improves cooling.
80-160-micron thick foil, soft or in partially
annealed temper, offered bare as well as with
hydrophilic and hydrophobic coatings in blue or
gold colour. The coated foil enhances the life
of the radiator and improves cooling.
OBJECTIVE OF STUDY
This project was undertaken to have an insight into the supply chain management of Hindalco. The
study aims to investigate the minute details of the supply chain management An analysis of the
various facts and figures has been done to arrive at logical recommendations. In short, at it can be
said that this study has two-fold objective of knowing, “what is the present supply chain
management?” And “what should be the future supply chain management?”
SIGNIFICANT AND SCOPE OF STUDY
The development in the field of transportation, communication and information on account of
globalization has found charging the expectations of the customers. It is against this backdrop the
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marketing professionals need to assign due priority to the application of modern marketing principles
in particular.
An efficient “supply chain management” plays a vital role in the success of any organization. A chain
system has to be designed carefully, as it normally takes years to build and is not easily changed. This
study provides a bird’s eye view of distribution channel of Hindalco. This report would do well to the
entire person interested in learning about distribution channel of Hindalco. A general idea about
Hindalco’s presence in aluminium market is also well given by this report. After a thorough analysis of
various facts and figures, a set of recommendations, with regard to the distribution channel, has been
given in the concluding part of the report. The company would find it useful to look into the viability of
the implementation of the recommendations, once implemented, and are expected to fetch immense
benefits to the company. It is thus clear that this report would serve a variety of purposes and its
scope is very wide and open.
RESEARCH METHODOLOGY
RESEARCH DESIGN:
Exploratory research design
SAMPLE DESIGN:
Sample size 71
50 employees
10 suppliers
4 distributors
7 visiting parties
Sample technique: Interview and questionnaire
SOURCE OF DATA:
PRIMARY SOURCE:
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Personal interview
Employees
Mr. Rahul paliwal (asst. sales manager)
Mr.M.C.Mahapatra (sales manager)
Distributors
Mr. Baccha Singh
Questionnaire
Employees of hindalco
SECONDARY DATA:
 Annual report of HINDALCO Fy2006-07, 2007-08 and individual contra sheets of
aluminum and copper for the year 2006-07 and 2007-08.
 Internet.
 Induction guide.
Supply chain management:
Introduction:
Supply chain management is a process responsible for the development and Management of a firm’s
total supply system both the internal and external components. At an operational level, it includes and
expands the activities of purchasing function and the procurement process. Its major focus however is
strategic.
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“Supply Chain is process from the initial raw materials’ to the ultimate consumption of the finished
product linking across supplier-user companies.”
“Value Chain is the functions within and outside a company that enables the value chain to male
products and provides services to the customer.”
Supply chain management (SCM) is the management of a network of interconnected businesses
involved in the ultimate provision of product and service packages required by end customers
(Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-
in-process inventory, and finished goods from point-of-origin to point-of-consumption (supply chain).
Supply chain management (SCM) is the oversight of materials, information, and finances as they
move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain
management involves coordinating and integrating these flows both within and among companies. It is
said that the ultimate goal of any effective supply chain management system is to reduce inventory
(with the assumption that products are available when needed). As a solution for successful supply
chain management, sophisticated software systems with Web interfaces are competing with Web-
based application service providers (ASP) who promise to provide part or all of the SCM service for
companies who rent their service.
Supply chain management flows can be divided into three main flos:
• The product flow
• The information flow
• The finances flow
The product flow includes the movement of goods from a supplier to a customer, as well as any
customer returns or service needs. The information flow involves transmitting orders and updating the
status of delivery. The financial flow consists of credit terms, payment schedules, and consignment
and title ownership arrangements.
There are two main types of SCM software: planning applications and execution applications.
Planning applications use advanced algorithms to determine the best way to fill an order. Execution
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applications track the physical status of goods, the management of materials, and financial information
involving all parties.
Some SCM applications are based on open data models that support the sharing of data both inside
and outside the enterprise (this is called the extended enterprise, and includes key suppliers,
manufacturers, and end customers of a specific company). This shared data may reside in diverse
database systems, or data warehouses, at several different sites and companies.
By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's
clients), SCM applications have the potential to improve the time-to-market of products, reduce costs,
and allow all parties in the supply chain to better manage current resources and plan for future needs.
Increasing numbers of companies are turning to Web sites and Web-based applications as part of the
SCM solution. A number of major Web sites offer e-procurement marketplaces where manufacturers
can trade and even make auction bids with suppliers
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CHANNEL OBJECTIVES:
• Making smooth availability of product to the target market.
• Achievement of the best possible coverage of the target market.
• Ensuring that the consumer incurs the minimum extenuation in procuring the product.
• Safe in quality & accuracy in quantity.
• Quick services.
• Ensuring that the firm is able to carry on with its manufacturing activities, confident that the
channel will take care of the distribution job.
• Ensuring that the distribution is cost effective.
• The primary objective of channel of the distribution is to bridge the gap by resolving spatial
(geographical distance) and temporal (relating to time) discrepancies as to supply and demand.
ROLE OF CHANNEL MEMBERS:
• Channel members are not play only the role of sales the products to the customers but also
play the role as they promote the products, gathering the customer interest, complaints,
suggestion, and information to the organizations – they are work as the co-ordination between
the targeted customers & manufactures.
• Members of the marketing channel perform many key functions as follows:
• Gathering & distributing marketing research and intelligence information about actors & forces
in the marketing environment.
• Helpful in making marketing strategy.
• Developing & spreading the promotional offer of company and promote the sales activity.
• Easily make a sales contact with the customers.
• Intermediaries are taking the title to goods, so they invest the fund.
• Through the intermediaries, manufactures are made physical distribution of goods.
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• Intermediaries are taking various type of risks, in the term of storing, dispatching etc.
CONTRIBUTION OF CHANNEL:
• Make available on time.
• Reduce the cost of distribution
• Save the distribution time.
• Helpful in product design & developments.
• Flow of feedback from consumer.
• Flow of money consumers to manufacture.
VARIOUS TYPES OF CHANNEL LEVELS:
While a marketers wants to sell or marketing about the products or services, requirement of design a
distribution channel to make product & services available to customers in different ways. In the
process of distribution of products, each layer of marketing intermediaries are performs some work in
bringing the product and its ownership closer to the final buyer is a channel level.
Generally two methods of distribution are in the practices.
1. DIRECT MARKETING CHANNEL
2. INDIRECT MARKETING CHANNEL
DIRECT MARKETING CHANNEL:
DMC is a marketing channel that has no intermediary levels. Manufacture or sellers are advertise their
product through the various method of advertising & make awareness about the products, then
contact to the needful customers through their salesmen, internet, e-mail, telephone or by post.
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INDIRECT MARKETING CHANNEL:
IMC is a channel containing one or more intermediary levels. Manufactures or sellers are appointed
various type of marketing intermediaries in the context of nature of the products & segmentation of
markets.
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MANUFACTURING
CONSUMER

TYPES OF CHANNEL MEMBERS
C & F AGENTS:
It means clearing & forwarding agents. They are responsible for storage & transportation of the
company’s products and its distribution to the distributor and some time retailers.
DISTRIBUTORS:
A distributor is usually appointed by the company and does not sell its competitor’s products. He can
also be a distributor of many products of the same company. A distributor is responsible for ensuring
that his company’s product is available at the retail stores. The distributor is very much an extension of
the company as he ensures that the market is properly served. A company has direct control over the
distributors.
Some of the following type of wholesalers:
 MERCHANT WHOLESALERS:
• Purchase and resell merchandise
• He has title to merchandise.
• He provides wide range of services.
 FULL SERVICE WHOLESALERS:
• Perform full range of distribution services.
• Provide trade credit; offer promotion assistance, personal sale force, and communication
of information.
• Provide installation and services.
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 RACK JOBBER:
• Deals with highly promoted items.
• Furnishes rack and shelves, price the goods, keep them fresh, set up point of purchase
displays.
• Sell on consignment.
• Provide services as delivery, shelving, and inventories caring.
 LIMITED FUNCTIONS WHOLESALE
Not provide credit, marketing research information and merchandising assistance.
 MERCANDISING AGENTS & BROKERS:
They usually perform fewer services than merchant wholesalers do. Merchandising agents
and brokers do not take title to product but negotiate sales for manufacture, they represent.
 MANUFACTURER’S AGENTS
• They are free to work for several manufactures.
• They carry non-competitive, complementary products in exclusive territories.
• They do not provide credit facility but at times store and deliver products.
• Also provide research aid and promotion support.
 BROKERS:
• To bring buyer and seller together
• To assist in negotiation.
• They have not title to goods.
• But they provide the facility of financing.
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 COMMISSION MERCHANTS
• Received goods on consignment.
• They have not title to goods.
• To accumulate them from local markets & arrange for their sales.
• Offer credit & storage goods facility.
• To provide sales force & research aid.
• They do not normally promote the goods.
 MANUFACTURER’S SALES FACILITIES
• Established by manufacture.
• It is separate from manufacturing operations.
• It’s performing the wholesaling function himself. Generally used in industrial customers.
Types of manufacturer’s sales facilities:
 MANUFACTURER’S SALES BRANCHES
• Carry inventory Promote
• the sales activities
• Sell to retail outlet.
 MANUFACTURER’S OFFICE (Regional Sales Office)
• It does not carry inventory
• Perform market research, demand forecasting, etc.
• Collect orders from customers.
• Make delivery to customers from manufacturing point
• Collection of payments.
• Dispose all the disputes or claims.Create better relationship.
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MANUFACTURER
DEPOTS OR WARE HOUSES CLEARING &
FORWARDING AGENTS
DISTRIBUTERS OR WHOLE
SALERS
MERCHANT
WHOLESALERS
MANUFACTURER’S
SALES FACILITIES
MERCANDISING
AGENTS OR
BROKERS
Manufacturer’s
Agents
Brokers
Commission
Merchants

STEP-1
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Full Service
Wholesalers
Rack Jobbers
Limited Function
Wholesaler
Manufacturer’s
Sales Branch
Regional Sales
office
Identify Target Consumers
Determining Consumer Buying
Habits For The Types Of
Goods

STEP-2
STEP-3
STEP-4
STEP-5
CHANNEL SELECTION PROCESS
EVALUTION OF THE DISTRIBUTION ENVIRONMENT:
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Locate Potential Customers
Pinpoint Channel
Alternative
Evaluate Channel Alternative
Select Channel Members

Selection of channel model has to be necessarily taking into account the distribution environment
obtaining in the country/ region and in the specific business in which the firm is engaged.
A firm has to evaluate the vital features of the distribution environment and ensures that the channel
model to be adopted is compatible with them. Distribution environment in the border sense includes
the legal environment as well in so far as its implications and distribution are concerned.
EVALUTION OF COMPETITOR’S CHANNEL PARTERNS
The firm should also study the competitors’ channel patterns before deciding its channel. While the
firm may not necessarily follow the competitors it will be worthwhile for the firm to analyze in depth the
plus and minus of the channel patterns adopted by each of the major competitors.
EVALUTION OF COMPANY RESOURCES AND MATCHING THE CHANNEL TO THE
RESOURCES:
On the other hand firm with larger resources and large size marketing operation will be in a position to
go in for highly intensive distribution committing a good deal of resources to the distribution task.
IDENTIFICATION OF ALTERNATIVES CHANNEL & SELECTION OF THE ONE THAT SUITS THE
FIRM BEST:
Two important considerations are cost and efficiency. Often though not necessarily they are directly
proportional. The channel
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that its efficient but relatively less expensive has to be chosen. Two types of evaluations an economic
evaluation and a conceptual evaluation may be necessary. The firm should also examine whether the
channel member s in the desire alternatives would be willing to work enthusiastically for the firm and
the product.
ANALYSING THE PRODUCT CHARACTERSTICS AND LINKING CHANNEL TO THE PRODUCT:
The firm should analyze the characteristics of the product and choose the channel designee that is
most suited to the product. Within each of these broad categories of product channel choice can vary
in relation to specific products/product types. The products futures, after all changes in a graded
manner as on move through the spectrum from the simplest consumer soft to the most complex
among industrial equipment.
NOTES:
 Consumer products Vs Industrial products.
 The case of industrial products.
 The product must have a sizable customer base.
 It must be standardized to a reasonable extent.
 It must be stock able items.
 The unite value should not be too high.
 It should not be complex.
Need for specialized distributor must be appreciated; after considering all such factors, if a given
industrial product lends itself for marketing through distributors, it must still remembered that;
 As a general rule industrial products require specialized distributor and entrusting them with the
general-purpose (consumer product) distributors does not produce the best result.
 Different industrial products need different types of distributors.
 Establish relationship and use problem-solving techniques for prevention of crisis and
preventing customer dissatisfaction.
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 Gather quality intelligence on customer dissatisfaction and provide this information to
management.
ON TIME DELIVERY
Consumer will be happy, if the material is delivered on time. OTD has come into sharper focus,
for it has become a competitive weapon in all most all industries. For example Nissan offers a
guaranteed ten-day delivery to its dealers, Caterpillar deliver replacements parts within 72
hours.99.7% of time
OTD customer satisfaction gap has three components
 Calibration Gap
 Operations Gap
 Organization Gap
CALIBRATION GAP:
The customer may measure OTD in different manner as copier to the supplier. It may so happen that
the supplier may measure OTD by product category but the buyer may measure it in terms of
complete order. The customer may measure OTD in terms of the initial order date whereas then
supplier may measure it from a negotiated date.
OPERATION GAP:
Businesses that face variability from one manufacturing phase to another or from operations to ware
house normally have an operations gap. Operations gap can also result from too many stages in
production process, too many supplier or too many people involved in order filling.
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ORGANISATION GAP:
If people do not have incentives to improve OTD it will probably result into organization gap. In other
words organization gap result from the priority accorded to OTD.
Marketing Head office (Renukoot)
EAST WEST NORTH SOUTH
Vice-President Vice-President Vice-President Vice-president
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Extrusions Rolled Primary
Sales Manager (Territory Manager)
ADVANTAGES
• Cost effective
• Geographical area oriented.
• Focus on all products simultaneously.
DIS ADVANTAGES
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• Product promotion scheme is not applicable.
• Lack of information about a particular product.
• Over work load.
• No more time & scope for a particular product.
• Consumer satisfaction is not appropriate.
The above old structure was not taking much advantage of the new global market. Analysis of the
advantage and disadvantage of the regional based marketing strategy, it is not suitable in modern
marketing specification era. So that, in 2003 company decided to go for opting the new marketing
strategy based on product specification. For this the company transferred its marketing head office
from Renukoot to Mumbai.
The new marketing strategy structure is as follows:-
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MARKE
PRODUCT
HEAD PRIMARY
METALADVANTAGES
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• It’s product based..
• Emphasis on more customer satisfactions.
• Helpful to increasing the sales performance of various products of product line.
• Helpful to production processes to deliver the products.
• Accumulation of small customers.
• Provide quick service to customers.
• Enhance the sales promotion.
DISADVANTAGES
• Cost ineffective.
• More men power required.
MARKET SEGMENTATION OF HINDALCO
The market for Aluminium products in India is very widespread
• Geographically
• By diversified of end user
Further, there are a large number of small and medium consumers and a select a few large
consumers. The smallest consumer would be consuming as little as 1MT/Month. However, the largest
numbers of Hindalco’s customers are in the consumption range of 5-50 Mts./Month.
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Aluminium is being used in around 3000 products in developed countries like USA, Japan, Canada,
etc. Whereas India, only around 350 products find use in aluminium. Moreover, the per capita
consumption of aluminium in the country is very low (1.1 kg/year).
Hence there is large potential for introducing the new uses and the increasing the consumption. As a
strategy therefore, Hindalco decided to cater to as many consumers as possible. Their distribution
system therefore, is designed to the object.
Hindalco manufacture the products with very specification as desired by the various customers.
Hindalco’s market may be segmented in the following manner.
(A)MARKET SEGMENTATION BASED ON THE PRODUCT GROUP
On the basis of product groups, Hindalco market may be segmented in the following manner
• PRIMARY PRODUCTS
• Ingots
• Wire rods
• Billets
• ROLLED PRODUCTS
• Sheets
• Chequered sheets
• Roofing sheets
• Coils
• Hot Rolling plates
• Circles
• EXTRUDED PRODUCTS
• General solid sections
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• Tubings
• Structurals
• Architecturals
• Mouldings
• FOIL
• Cable wrap stock
• Light gauge Foil
• Bare & Coated Fin stock
• Collapsible Insulation Ducts.
• ALLOY WHEELS (“AURA”)
• 12” to 18” diameters.
• MARKET SEGMENTATION ON THE BASIS OF PRODUCT WISE KEE CONSUMERS.
• PRIMARY PRODUCTS:
• Consumers:
• Value added aluminium sheet producer industries.
• Foil Producer Industries.
• Extrusion Producer Industries.
• Electricals Equipment Automobile Industries
• Furrow allows
• Smelter pot lining.
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• ROLLED PRODUCTS
• Consumers:
• Foil & Packing Industries: box, cop, and container.
• Electrical Industries: bulbs, tube lights, fan blade etc
• Transportation industries
• Building & construction sectors –roofing flooring etc.
• Defense & Marine sectors.
• Transportation sectors.
• Consumer durable: flooring & roofing
• General engineering:
• Piper-proof bottle cops
• Pressure cookers, non-stick cookware.
• EXTRUDED PRODUCT
• Consumers:
• Automobile Industries
• Building & construction Sector
• Mines & defense Sector
• Transportation sectors
• Electrical sectors
• Architectural sectors
• Furniture sectors
• Households consumer durable
• FOIL
• Consumers:
• Packing sectors (printed & multi-laminated)
• Pharmaceuticals
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• Dairy products
• Processed food
• Con-fectionery
• Personal care products
• Cigarettes Box rapping
• Air conditioner
• Auto mobile radiator Collapsible Insulation Ducts.
• ALLOY WHEELS
• Consumers:
• Automobile sectors
• Maruti Suzuki
• TATA Motors
• FIAT India
• Hindustan Motors
• Telco Ford India
• Hyundai India
• GM India etc
(B) MARKET SEGMENTATION BASED ON THE DEMAND PATTERN.
Based on size & frequency of order, Hindalco market may be segmented as follows:
 BULK CUSTOMERS
Bulk customers are those customers, whose demand is very high and consistence. Some of the
bulk customers are Howkin, TTK, Foil Division Silwassa, Jugraj Tejraj, Bajaj Auto, etc.
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 SMALL & MIDIUM
Small & medium customers may be bracketed as those customers, whose demand is
comparatively low and not so consistence, some of the small customers of Hindalco included
ITI Allahabad, Defense Organization, and Dockyards etc.
(C) MARKET SEGMENTATION BASED ON THE PRIORTY:
On the basis of priority given to various orders Hindalco market may be segmented in
the following manner:
 ROUTINE CUSTOMERS
Routine customers are those customers, who are regularly sourcing the company. Their orders
are processed in the normal course of working.
 SPECIAL CUSTOMERS
Special customers are those customers, whose orders are for products under developments.
Since their demand is usually urgent in nature they are given priority under routine customers.
Examples: Export Customers, Government organization like Defense, Establishment etc.
continue this category.
(D) MARKET SEGMENTATION BASED ON CONSUMPTION SECTOR.
Uses of aluminium metal are everywhere. It is not easy to categorize in some particular
heads. However, we categorize in the following major sectors.
 Electrical
 Transportation
 Building & constructions
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 Industrial Machinery
 Packing
 Consumer Durable
 Other
(E) MARKET SEGMENTATION BASED ON GEOGRAPHICAL AREAS:
Aluminium consumers are spread all over the country. Different area has different type of
industries, whose are used aluminium in different quantity. Here, segment the market in
geographical areas based on consumption or demand pattern.
TRANSPORTATION FACILITY
Smooth transportation facility is available all over the country all the time. Some area is
affected by flood. Some areas are block in the case of heavy rain etc.
DISTRIBUTION PROCESS AT HINDALCO
There are different tasks involved in distribution process
These are as follows:
 Order processing
 Packing & Insurance, Banking, Bills,
 Ware housing
 Transportation
 Godown sales procedure..
ORDER BOOKING:
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Every purchaser has to book his order giving details which aluminium rolled products they want such
as Plain sheet, Cold rolled coils, milk can sheet, circles, etc. Purchaser should be fully disclose about
the product such as, product name, quality, quantity, technical data, mode of transportation, desire
delivery time, payment mode etc.
Technical wing of Hindalco examines their application and if necessary also make inspection of the
facing and decided quality to be offered. Thereafter, terms of payment finalized and his order is finally
booked. This order is passed to the relevant personnel’s officials with relevant details.
PRIORITY:
A priority list of all categories of consumers has been fixed in consultation with all concerned.
Consumer gets delivery in order to their priority, which is also followed by transporting agents.
ORDER PROCESSING:
Hindalco procure order either directly from the customers or through the agents/stockiest. The order
contains the name of product, quality, size, clearance etc.
After the receipt of orders from the customers or agent Company scrutinizes the order. A production
planning programmed is prepared for rolled production monthly basis. This monthly report is sent to
the respective production department i.e. rolling mills by the end of the preceding month. The
produced material is sent to the inspection and packing department.
WARE HOUSING:
Every has to store to goods while they wait to be sold. A strong function is necessary because
production and consumption cycles rarely match. Ware housing is the responsibility of warehouse in
charge in Hindalco. The work start when warehouse officials receive finished goods from production.
Hindalco warehousing in charge dispatches the material to respective customers on advice of CSMO
and follows the guidelines given to them. The guidelines are:
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At warehouse:
 While taking delivery from inspection & packing to ensure packages are intact & dry.
 If packages are damaged or loose condition, get it repacked.
 If packages are wet, do not accept it.
During loading at warehouse :
 Truck’s floor should be clear and flat.
 There should not be any hole or damage in the floor of the Truck’s
 Floor should be covered with Tarpaulin.
 Packages being loaded should be intact and dry
 Proper stocking of packages should be done while loading.
 Heavy packages to be kept at bottom and lighter packages over heavy.
Packages:
No vertical stoking of packages. After loading truck should be covered with tarpaulin.
During Storage:
 Outdoors storage should be avoided.
 Do not store packages directly on the floor, use wooden pallets.
 Cheek condition of metal every few hours to ensure no water condensation.
DELIVERY OF MATERIAL:
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They deliver the material as per the delivery order. Then they note down the delivered material in the
godown register. Then they send delivery report daily to zonal office.
BANKING INSURANCE BILLS & OTHER DOCUMENTS:
Hindalco enjoys the facilities of three public sector banks & private sector bank in its town Renukoot.
 United Commercial Bank (UCO Bank).
 State Bank of India (SBI).
 Allahabad Bank.
 Industrial Development Bank of India (IDBI).
Banking services at Renukoot is punctual. Banks help the company in carrying the documents to the
party. It helps in quicker payments realization.
INSURANCE
Every material is dispatched duly insured. There are two types of insurance.
 Carrier Risk.
 Owner Risk.
Hindalco arranges insurance facilities for its customers. If there are any damages in transportation
they will issue a damage certificate & the customer can claim its insurance company on the basis of
damage certificate.
GODOWN SALES PROCEDURE
Godown sales procedure describes the sales procedure of Hindalco’s products through its godown.
The respective zonal head exercise control over all activities related to godowns sales. This sales
procedure is followed by all the godown of company situated at Delhi, Faridabad, Chandigarh, Jaipur,
Haryana, Bangalore, Hydrabad, Calcutta Gohati, Mumbai, Silvasa, Taloja … There is a clearing agent
in the godown, which is appointed by Hindalco for the operation & maintenance of the godown.
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VARIOUS MODES OF DISTRIBUTION IN HINDALCO
Hindalco emphasizes on , “Taking the product to the market” Distribution of products in Hindalco is
carried out through a network of zonal offices, Area offices, Agents, Stockiest and company operated
Depots, located through the country. A brief description is given below
1. ZONAL AND AREA OFFICES:
Hindalco has established five zonal offices, in various part of country. There is a network of area
offices, functioning under various zonal offices. Zonal offices carried out various Marketing Sales
functions of company.
They provide following functions:
 Signed a contract between the zonal offices and customers, regarding to details of products such
as quality, packing, transportation, destination, etc.
 Clearly mentions about the mode of payments.
 Eliminating intermediaries.
Make a direct contact with the customers
.
 Help the company to cater to the need of customers.
 Helpful the company to earn additional profits
2. AGENTS
Agents are those persons/institutions, who provide orders to Hindalco, on behalf of the
customers. The company has appointed a number of agents, all around the country to sell the
products. They are paid commission on the generated sales. Agent being a local person/ institution
can use his contacts and influence, to generate sales in a local market. Agents function as an
important mode of distribution, as they enable the company to minimize distribution costs.
Page 4

3. STOCKIESTS
Hindalco appointed a number of stockiest in various geographical areas across the country.
Certain products of the company are sold through the network. Stockiest are made conform sale for
the company.
 Stockiest is free to make sell to any customer
 Free to charge any price from customers
 Helps the company to cover the wide geographical market.
 Helpful in minimizes extra distribution setup costs.
4. DEPOTS
HINDALCO operate 15 depots in various part of the country. Depots send the various
requirements at the work office and thud, maintain suitable inventory to cater to the demand of the
market. This is providing the following advantages to the company & also the customers:
• TAX-SHIELD: In many states, state sales tax is less than the central sales tax. In these states
sales of products through depots, lead to tax saving.
• AT RANDOM DELEVERY: Emergency needs of customers full filled immediately by the depots, at
a premium price small off takes of the scattered customers can also be provided easily by the
depots.
• HELPFUL IN PRODUCTION: Depots provide a foundation to the production department, by
keeping inventory of the various products. For example, in the event of surplus stock, products can
be transferred to the various depots. Similarly, Production –Schedules can be planned with greater
accuracy, with the help of estimated requirements, sent by depots.
HOW THE DEMAND IS BEEN GENRATED
Page 4

Customer to competitor
Page 4

HINDALCO
PRIMARY PRODUCT
CUSTOMER
SELF
EXTRUSION
EXTRUSION ROLLED ROLLED
customer
FLOW OF LOGISTICS PROCESS
Page 4

Logistics is the management of the flow of goods, information and other resources, including energy
and people, between the point of origin and the point of consumption in order to meet the
requirements of consumers (frequently, and originally, military organizations). Logistics involve the
integration of information, transportation, and inventory, warehousing, material-handling, and
packaging.
Logistics management
Logistics management is that part of the supply chain which plans, implements and controls the
efficient, effective forward and reverse flow and storage of goods, services and related information
between the point of origin and the point of consumption in order to meet customers' requirements. A
professional working in the field of logistics management is called a logistician.
Logistics Management Software
Software is used for logistics automation which helps the supply chain industry in automating the work
flow as well as management of the system. There is very few generalized software available in the
new market in the said topology. This is because there is no rule to generalize the system as well as
work flow even though the practice is more or less the same. Most of the commercial companies do
use one or the other custom solution.
But there is various software that is being used within the departments of logistics. Few department in
Logistics are namely, Conventional Department, Container department, Warehouse, Marine
Engineering, Heavy haulage, Etc.
The software that is used in these departments is:
Conventional department: CVT software / CTMS software
Container Trucking: CTMS software
Warehouse: WMS
In Hindalco, all the departments are interconnected with computer network system and the
software on which these department works is on the Oracle 11i platform. This software is
connected with Internet and the working in any department in any region of Hindalco will make
effect in all over India.
Page 4

Business logistics
Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing
complexity of supplying one's business with materials and shipping out products in an increasingly
globalized supply chain, calling for experts in the field who are called Supply Chain Logisticians. This
can be defined as having the right item in the right quantity at the right time at the right place for the
right price and is the science of process and incorporates all industry sectors. The goal of logistics
work is to manage the fruition of project life cycles, supply chains and resultant efficiencies.
In business, logistics may have either internal focus (inbound logistics), or external focus (outbound
logistics) covering the flow and storage of materials from point of origin to point of consumption (see
supply chain management). The main functions of a qualified logistician include inventory
management, purchasing, transportation, warehousing, consultation and the organizing and planning
of these activities. Logisticians combine a professional knowledge of each of these functions so that
there is a coordination of resources in an organization. There are two fundamentally different forms of
logistics. One optimizes a steady flow of material through a network of transport links and storage
nodes. The other coordinates a sequence of resources to carry out some project.
Production logistics
The term is used for describing logistic processes within an industry. The purpose of production
logistics is to ensure that each machine and workstation is being fed with the right product in the right
quantity and quality at the right point in time.
The issue is not the transportation itself, but to streamline and control the flow through the value
adding processes and eliminates non-value adding ones. Production logistics can be applied in
existing as well as new plants. Manufacturing in an existing plant is a constantly changing process.
Machines are exchanged and new ones added, which gives the opportunity to improve the production
logistics system accordingly. Production logistics provides the means to achieve customer response
and capital efficiency.
Production logistics is getting more and more important with the decreasing batch sizes. In many
industries (e.g. mobile phone) batch size one is the short term aim. This way even a single customer
demand can be fulfilled in an efficient way. Track and tracing, which is an essential part of production
logistics - due to product safety and product reliability issues - is also gaining importance especially in
the automotive and the medical industry.
Page 4

Logistics Structure
Order procurement and allocation
Page 4

ORGANIZATION CHART OF LOGISTICS DEVELOPMENT AT HINDALCO:
Page 4
Head Outbound Logistics

Process overview : Loading & dispatch
Page 4
In charge (finished good warehouse) In charge
Bill Processing Transport Complaint Administration
Office
Field
Supporting WCM
QEHS
Product In charge
Area In charge
Rolled Extrusion Wire Rods Ingots
Shift In charge
Clearance Section Group Section Contractor Bill Processing & office
work

CURREN
Chandigarh
Faridabad
FINANCIAL HEALTH OF THE COMPANY
Page 4

The Chairman’s letter to shareholders and the Management’s Discussion &
Analysis, which form a part of this Annual Report, provide the
strategic direction and a more detailed analysis on the performance of
individual businesses and their outlook.
Rs. in Million
Financial Results
for the year ended Standalone Consolidated
31.03.08 31.03.07 31.03.08 31.03.07
Net Sales & Operating
Revenue 192,010 183,130 600,128 193,161
Profit Before Tax 30,256 35,046 29,855 36,616
Provision for Current Tax 6,063 9,841 9,713 9,942
Provision for Deferred Tax 876 (551) (738) (478)
Provision for Fringe
Benefits Tax 114 113 123 121
Tax Adjustment for earlier
years (Net) (5,407) - (5,481) -
Profit before Minority
Interest 28,609 25,643 26,238 27,031
Minority Interest - - 2,206 161
Share in (Profit)/ Loss
of Associates - - 159 12
Page 4

Net profit 28,609 25,643 23,873 26,858
Appropriations
Debenture Redemption Reserve 50 187 50 187
Special Reserve - - 9 13
Dividend on Preference Shares
(Current Year Rs. 0.24 Mio,
Previous Year Nil)
Dividend Tax on Preference Shares
(Current Year Rs. 0.04 Mio,
Previous Year Nil)
Interim Dividend on Equity Shares - 1,773 - 1,773
Tax on Interim Dividend - 249 - 249
Proposed Dividend on Equity
Shares 2,269 - 2,285 16
Tax on Proposed Dividend 386 - 392 6
Transfer to General Reserve 25,611 24,434 25,629 25,496
COMPANY GROWTH VS INDUSTRY GROWTH
Growth Sales (%) Profit (%)
Company 16.35 24.54
Page 4

Industry 15.18 15.65
PRODUCTION PROCESS
The aluminum production process can be categorized into upstream and downstream activities. The
upstream process involves meaning and refining bauxite to alumina while the downstream process
involves smelting and casting and fabricating.
Hindalco refines bauxite primarily obtained from captive mines, to extract alumina, which is smelted
into alumina ingots or billets. Hindalco smelts its entire production of alumina into aluminum and does
not engage in alumina trade.
Production of aluminum can be categories in two stages, namely
• From bauxite to alumina
• From alumina to aluminum
EXTRACTION OF ALUMINA FROM BAUXITE
Alumina is manufactured by conventional buyer’s process i.e. treating bauxite with caustic soda.
Bauxite is brought to the site from mines by means of railways wagon tippler. Primary crushing is done
in cone crusher where bauxite size is reduced form 8”- 12” to 3” - 4” and then stockpiled. Secondary
crushing is done by means of hammer mills
where process liquor known as a spent liquor and 600 psig. Steam is mixed together. This solution of
alumina from bauxite into caustic solution in the form of sodium aluminates is carried out of digesters
at 240 degrees centigrade temperature and 36-kg/sq.cm pressures. The digested slurry is placed
Page 4

flashed and brought to atmosphere pressure; flashed vapors are utilized for pre heating the spent
liquor and condensed returned to boiler hose for generation of steam. Digested flashed slurry is
pumped to clarification area for removal of solid Impurities (red mud). Red mud is separated out, in
solid liquid hydrocyclon and stellar. Separated mud slurry is washed in counter current and washing
Circuit without using water. Washed mud slurry is cauterized by treating with lime slurry to recover
soda. Cauterized mud slurry is filtered on drum filters. Filtrate liquor is taken back into the system and
red mud cake is disposed of by means of dumpers Settler overflow pregnant liquor is filtered in Kelly
presses to remove fine mud particles. Clear pregnant liquor is pumped to precipitators through plate
heat exchanges after exchanging heat with the spent liquor where it is seeded with alumina trihydrate.
Alumina trihydrate is separated out in thickness and pan filter. Alumina trihydrate cake thus obtained is
fed into the gas suspension claimer where furnace oil is burnt for claiming alumina. The reduction
grade alumina thus produced is transported to smelter plant.
Spent liquor generated and separated from precipitation circuit is fed to the evaporation unit for
increasing caustic concentration to the desired level and recalculated to digesters through heaters for
further processing of bauxite and thus the process goes on.
ALUMINA MANUFACTURING PROCESS FLOW CHART:
Page 4

Bauxite from mines Compress Air
Seeding
Liquor Spent Liquor
Filtrate to Process
Liquor
Hot Water for
Washing
Washing
Fuel Oil
Red Mud
ALUMINA TO SMELTER
Flocculants, Filter Cloth, Lime, Hot Water, Starch
Page 4
CRUSHING
WET
GRINDING
DESILICATION
DIGESTION
CLARIFICATION
EVAPORATION
DESILICATED
SWEETENING
SLURRY
PRECIPITATIONN
HYDRATE
CLASSIFICATION
PAN FILTER
CALCINATION
SEED FILTRATION
&WASHING

 EXTRACTION OF ALUMINUM FROM ALUMINA
Alumina from alumina plant is conveyed to the reduction plant. The reduction plant has 11 prebaked
pot – lines which have 1278 pot cells. Each pot has 24/26 carbon anodes and it is lined with carbon
cathode. Alumina is converted to metallic aluminum is these pot cells by the standard “hall herald”
process. The pot cells work at an average 4.3-volt D. C. current of 5800/6300 amperes. Electrolysis of
the alumina takes place in molten bath of coyote at a temperature of 955 to 960 degrees centigrade.
The molten aluminum that collects at the cathodes is siphoned into crucibles periodically. The entire
process is controlled by microprocessor system.
FULLY INTEGRATED OPERATIONS: A SIGNIFICANT STRATEGIC ADVANTAGE
Page 4
Bauxite Mines
Alumina Refinery
Aluminium Smelter
Semi Fabrication Plant
Rolling Mills
Foils
Co-Generation
Renusagar Powder
Plant
Redraw Rod Mills
Caustic Soda from JV
Aluminium fluoride
from
Extrusion Process
Al. Wheel Plant

AVAILABILITY OF BAUXITE FROM MINES:
Bauxite Mines
Shrengdag Samari [20/25 suppliers (small)-2.5 to 3.0 lakh MT/Y]
Gurdari Kudag [3/4 suppliers (big level) - 2/3 rakes/month
Pakhar Tarijhari 1 rake=3953MT (58 wagons)
Jalin & Sanai (5.5-6.0 lakh MT/Y) 67MT Load/wagon
Orsapat
Chirokukud
Pakhar (M&M)
(Minerals & Minerals, Sister concern of Hindalco 100% own subsidy)
Supply-7/8 lakh MT/ Y
MODES OF SALES IN HINDALCO:
Hindalco has quite a good network for distribution of its products. Finished goods is sold and distributed to the
costumers by following means.
Page 4
Own Mines On Purchase (Lease)
Jharkhand Chhattisgarh Jharkhand Madhya Pradesh

 DIRECT SALES FROM MANUFACTURING UNITS:
 SALES THROUGH STOCKISTS:
 SALES THROUGH AGENTS:
 SALES THROUGH DEPOTS:
Page 4
MANUFACTURER CUSTOMERS
MANUFACTURE STOCKISTS CUSTOMERS
MANUFACTURE CUSTOMERSCONSIGNMENT
AGENT
MANUFACTURE DEPOTS CUSTOMERS

Page 4
ACTIVITY FOLW CHART OF HINDALCO-MINES DIVISION, JHARKHAND & CHHATTISGARH

PRODUCTION CAPACITY
ALUMINA
CAPACITY 1.15 MTPA
• RENUKOOT 685,000TPA
• BELGAUM 350,000TPA
• MURI 110,000TPA
• SMELTER (PRIMARY ALUMINIUM)
o CAPACITY 424,000MTP
• HIRAKUND 65,000TPA
• ALPURAM 14,000TPA
• ROLLED PRODUCTS
o CAPACITY 2,00,000TPA
• BELUR 45,000TPA
• TALOJA 45,000TPA
• NAGPUR 30,000TPA
• FOIL
Page 4

o CAPACITY 14,000TPA
• SILVASA 5,000TPA
• KALWA 6,000TPA
• KOLLAR 3,000TPA
• EXTRUSIONS
o CAPACITY 27,700TPA
• RENUKOOT 19700TPA
• ALPURAM 8000TPA
• ALLOY WHEELS
o CAPACITY 3,00,000 Nos. PA
• SILVASA 3,00,000 nos.
MARKET STRUCTURE:
Aluminum production is expensive and requires heavy capital investment. Most of the key producers are major
corporations and the business is concentrated, not fragmented. As indicated above, a recent trend is for major
firms to invest in smelting operations which are closer to power sources. As direct results, older aluminum
operational facilities are closing down as the older sites are no longer cost effective. Norse Hydro, for example
has terminated approximately a quarter million tons of capacity in Northern Europe in favor of cheaper Middle
East based operations. Alco has made similar moves. Industry experts estimate that up to 4 million tons of
annual aluminum capacity from older facilities could be shut down in the next 3 to 4 years. How aluminum is
used.
SEGMENT WISE USEGE OF ALUMINIUM
Page 4

FULLY INTEGRATED OPERATION: SIGNIFICANCE
STRATEGIC ADVANTAGE
Page 4
CAPTIVE POWER

ACTIVITY FLOW CHART FOR ROLLED PRODUCT:
Page 4
CAUSTIC SODA FROM
JV
AL.FLUORIDEFROM
JV
Unloading of lots from Trucks/Trolley in warehouse receiving area by EOT crane
If any lot found in damage condition then
it returns to inspection & packaging deptt.
On nil duty
Party wise & Destination wise coding of allocated lots as per production list generated by product in charge
Sorting & Segregation of coded lots in warehouse receiving area.
Pack wise, Party wise storage of lots in respective storage area.
Grouping of allocated lots for
hiring of trucks.
Export Lots: Segregate lots as per Grouping
Seal the lots & put shipping mark as per
export order requirement
Domestic Lots: On placement of trucks
generate loading slip & send a copy to
loading point
Call the container/Trucks for loading on receipt of loading slipCheck the lots as per loadingLoad the container with the help of fork lift Load the truck with the help of EOT craneAfter loading of lots get lashing and damaging of sheets done and the container selectedAfter loading the truck/container get the loading register signed by loader & verified by shift in chargeEnsure proper covering of lots with tarpaulin in case of truck/trailerSend the truck/container to weigh bridge for weighment

EXTRUSION PRODUCTION PROCESS:
ACTIVITY FLOW CHART FOR EXTRUSION PRODUCT
Page 4
If the products have to be loaded on the same
truck, send the truck to respective loading point
If variations in function gross weight of loading slip, send
the truck back to loading point for correction
Send the truck/container to weigh bridge for
weighment
If gross weigh tallies, generate factory gate pass & send it
to invoice section for clearance
Unloading of racks containing lots from shifting Trucks/Trolley in warehouse receiving area by EOT crane
FINISHED
EXTRUSION
PRODUCT
AGING FURNACE

ACTIVITY FLOW CHART FOR PROPERZI-WIRE RODS
Page 4
If any lot found in damage condition then
it returns to inspection & packaging deptt.
On nil duty
Zone wise coding of allocated lots as per production list generated by product in charge
Sorting & Segregation of coded lots in warehouse receiving area.
Zone wise & party wise storage of lots in fixed racks in respective storage area.
Grouping of allocated lots for
hiring of trucks.Placement of truck as per grouped list
Generate loading slip send one copy of loading copy to loading point
Call the truck on receipt of loading slip
Check the lots as per loading slip & load in truck with the help of EOT crane
After loading the truck/container get the loading register signed by loader & verified by shift in charge
Ensure proper covering of lots with tarpaulin in case of truck/trailer
Send the truck/container to weigh bridge for weighment
If the products have to be loaded on the same
truck, send the truck to respective loading point
If variations in function gross weight of loading slip, then
send the truck back to loading point for correction
Send the truck/container to weigh bridge for
weighment
If gross weigh tallies, generate factory gate pass & send it
to invoice section for clearance
Physical checking of each coil by warehouse operator such as poor cooling cut marks

THE SWOT ANALYSIS OF HIL.
Page 4
If not OK return coil on nil duty
Tally each coil no. with production sheet by warehouse
operator. Total counting of coils received should match
with production sheet.
In case of missing coils report to shift in
charge informs to production
Packing of each coil as per requirement
Check the entries of all the coils in the system and tally with production register by warehouse shift in charge
Check the composition & UTS from PT lab analysis reports against each coil & ensure every coil is acceptable range
Take party wise dispatch schedule from sales,
Co-operation by warehouse shift in charge
If not inform to remelt shop by warehouse shift
in charge then return the same on nil duty to
remelt shop.
Allocate each coil as per dispatch schedule on system by W/H Shift In charge
Group the coils party wise for hiring of trucks
Call the trucks for loading in receipt of loading slip
Check the load coils in truck as per loading list with the help of EOT crane by W/H operator under
supervision of W/H shift in charge.
Ensure proper covering by coils with tarpaulin
Send the truck to weighbridge for weighment
If gross weight tallies, then generate factory gate pass &
send it to invoice section for clearance
If variations are found in gross weight of loading slip &
weighment slip then send the truck back to loading point
for correction

STRENGTH
 Global brand image.
 Cost effective producer.
 Sound financial position.
 A high degree quality consciousness is the core competence of the company, ISO 9001 and ISO 14001 have
added more prestige to the company.
 Integrated production facility at Renusagar power plant.
 Company has a well-established distribution network, covering a geographically wide and scattered market.
 A number of Brownfield & Greenfield projects.
 Industrial peace as, there has been no major strike in last 22 year.
 A well focused human resources development.
 Serve maximum customer satisfaction.
WEAKNESS
 Present production capacity is not adequate to meet the rising high demand.
 Technology is not upgraded to mark as compare to global giants in aluminium industry.
OPPORTUNITY
 R & D collabratation with universities and another research organization.
 More emphasis on downstream production of value added products.
 Recycling should be adopted as routine production.
 Raising more finance from marketing for more acquisition and merger for consolidating position in the
global market.
 Aluminium, continuous to be strong with a growth in transportation sector 16%, construction15%, passenger
car 25%, two wheeler segments 14% respectively during FY07.
THREATS
 Strong domestic and global competitors, such as TATA, POSCO, MITTLE, ESSAR .
Page 4

 Innovative revolution in plastic and steel industry.
 Reduce in Exide duty.
 Fall in price of Al. In neighbor country.
Page 4
THREATS
WEAKNESS
DISTRIBUTIO
N CHANNEL
SOLUTION
STRENGTH
OPPORTUNITY

SWOT ANALYSIS OF SUPPLY CHAIN
STRENGTH
 Product based marketing channel.
 Strong dist. channel based on geographically wide & scattered market of India..
 Flexible distribution process for customers via direct sales and indirect sales.
 Company made more than 50% direct sales.
 Convenient road transportation.
WEAKNESS
 Not tapped all the potential areas especially in eastern and southern zone.
 A 50-40% sale depends on indirect marketing.
 The present distribution system is not adequate to meet the demand of aluminium in the coming years. It is in
this light, that the present dist. system needs to be updated. Certain recommendations, with regard to the
same have been suggested ahead.
OPPORTUNITY
 The demand of the company’s products is rapidly increasing. Thus, there is a necessity to expand the dist.
network to avail the benefits of the fast growing market.
 Indirect sales should be converting in direct sales through TM sales force.
THREAT
Page 4

 The major threat is from the competitors like BALCO, NALCO etc. because the company may lose its
market leader position , if it does not take timely steps to modify its present distribution system in the wake
of fast growing demand
SUGGESTIONS/RECOMMENDATIONS/CONCLUSIONS
Certain recommendations with regard to distribution channel of HIL are as under:
(A) Northern zone offers the most lucrative sales in last financial year.. In the light of such high sales driven by
the factors such as heavy investments in infrastructures and related industries – machinery, transportation
etc. In this zone our more than 65% sales depends on indirect sales. So that our focus should convert indirect
sales to direct sales. Our effort should be here increase the depots in proportionate way, and also made
appointment TM’s and RM’s.
(B) Southern zone is also the fast growing market for the company. The zone offers bright prospects to company
in terms of future demand driven by rapid industrial expansion. In this zone our more than 60% sales
depends on direct sales and also we face cutthroat competition. In maintain the sales need of continuous
market research in regard to distribution channel & appoint stockiest instead of consignment agents.
(C) Western zone is the key market of the company. This zone is the most advanced zone in industrialization in
the country. In this zone our 65%(Approx.) Sales are through direct sales.
Analysis of sales data, present depots, stockiest & consignment agents, 35% of the sales in this zone is
indirectly depending upon consignment agents & stockiest. The demand of this zone is very high. To
optimize in this key zone, the company should established additional depots in that areas- Ahmadabad &
Nagpur for enhancing direct sales.
(D) In eastern zone company’s, indirect sales is approx. 70%. Such a heavy indirect sales reflects that the
company is not indirect contact of its customers and their worries and feedback and these are most essential
factors for improving level of sales.
Page 4

In direct sales is not helpful to create, grow & retain the customers. So making the sales customer oriented
and to improve the sales, the company can take the following initiatives-
 Assign sales representatives to contact all prospects in this area.
 Design a sale promotion complains focusing on brand awareness.
 Appoint a regular sales representative with each stockiest.
 Shift to retail format of business by owning aluminium galleries in malls.
• LIMITATIONS OF STUDY
• The duration of practical training was just of four weeks. It was not sufficient.
• Due to heavy engagement of the top management people and other personnel, many other
information could not be collected within the limited span of time.
• To maintain secrecy, the company people do not provide various types of information, such as
actual sales to various customers, zone wise sales, depot setup cost, depot handling cost etc.
• Their recommendations are the outcome of an analysis made individually.
• Another analysis may arrive at certain other recommendations after using same data.
 So, that it is advisable for the company to examine the various recommendations, before
going ahead with any of their implementations.
Page 4

BIBLIOGRAPHY
MAGAZINES:
• Impex Times
• FIEO News
• Aluminium International Today
• Aluminium Times
• Aluminium Now
• Incale 2
• Incale 3
• Annual report (07-08), Hil
• Induction guide , (training centre )
• Principles of marketing, “kotler & Armstrong”.
• INTERNET:
• http://www.algomtl.com
• http://www.go4worldbusiness.com
• http://www.unzco.com/basicguide
• http://dgftcom.nic.in
• http://www.fieo.org
• http://www.airportsindia.org.in
• http://www.indiandata.com/trade_policy/export_procedures
Page 4

• http://www.wikipedia.com/logistics
• http://www.google.co.in/
• http://www.hindalco.com/products/rolled_products
• http://www.hindalco.com
• http://www.novelis.com
• http://www.adityabirla.com
ANNEXURE
APPLICATION OF ALUMINIUM IN TRANSPORT
SECTOR
Global Aluminium Production Growth forecast (mln tpa)
Country % of consumption
Europe 29%
Japan 30%
US 28%
Canada 28%
Australia 25%
India 16%
Page 4

Year Actual Forecast
1985 15.5
1995 19.7
2005 31.4
2010 41.3
2015 50.2
PRIMARY ALUMINIUM PRODUCTION & CONSUMPTION BY MAJOR COUNTRIES IN 2005
Country Production
(KT)
CONSUMPTION(KT)
Norway 1376 246
Brazil 1499 759
Australia 1903 380
Canada 2894 803
USA 2480 6143
Russia 3647 946
Chain 7806 7119
PER CAPITA CONSUMPTION OF ALUMINIUM
COUNTRY CONSUMPTION
(kg/person)
JAPAN 32.0
Page 4

USA 31.9
GERMANY 31.6
CANADA 31.2
ITLY 29.5
FRANCE 21.4
AUSTRALIA 21.2
UK 15.0
CHAINA 6.5
BRAZIL 4.1
INDIA 1.1
INDIA-User Segment’s Growth FY07 over FY06
Page 4
32 31.9 31.6 31.2
29.5
21.4 21.2
15
6.5
4.1
1.1
0
5
10
15
20
25
30
35
consumption
consumption

User Segment FY05 FY06 Change
%
Electrical 398 490 23
Transport 234 308 32
Built. & Const. 135 165 22
Consumer Durable 46 53 15
Packing 47 51 9
Indus. Machinery 37 41 11
Others 37 41 11
Total 934 1149 23
Major Aluminium Producer Industries in India.
Company Owner
ship
Location Capacity
Hindalco AB
Group
Renukoot
Alpuram
Hirakud
Belgaum
345,000
14,000
65,000
31,000
NALCO Public Angul 345,000
Page 4

Sect.
BALCO Sterlight Korba 350,000
MALCO Sterlig
ht
Mettur 40,000
EXTRUSIONS CAPACITY, PRODUCTION & DEMAND 1991-2020(MT)
Particulars 91-92 99-00 03-04 2010 2020
Capacity 122000 190000 202000 202000 400000
Production 61000 109000 132000 188000 370000
Domestic
Demand
60000 105000 117000 166000 325000
Export Nil 4000 15000 22000 45000
Excess
Capacity
62000 81000 70000 14000 30000
CONSIGNMENT AGENTS & STOCKIEST
ZONE WAREHOUSES No of
CONSIGNMENT
AGENTS
No of
STOCKIEST
EASTERN 2 6 8
NORTHERN 5 - 32
SOUTHERN 3 12 20
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WESTERN 3 26 24
Primary metal customer of Hindalco:-
Primary metal customer are always competitor for Hindalco Industry Because after purchasing of Primary metal
they manufacture Rolled product or Extrusion product. So these company are competitor for Hindalco in
Extrusion product and Rolled product.
Warehouse problems
Major problem
• Dependence on other department
• Transpotation
• Space
Dependence on other department: it is the nature of the warehouse department and it cannot do any
thing for this as any delay in related department can add to problem in warehouse.
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Transpotation: it arises due to following factors
Space constrane: due to above factors space arise as a big problem
Minor problem
• Slowdown
• Defence delay
• Natural calamity
WAREHOUSE ACTIVITES NO ADVANCE PLANNING
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After packing feed the product
Marketing dept. DISTRIBUTION ACCORDING TO ORDER
Grouping MAIN PROBLEMATIC AREA
HIRING SLIP
Transportation section LOADING SLIP
Loading at godown
Factory gate pass
PACKING
To contain To protect to preserve to present to dispense
The product the product the product the product the product
MAJOR PROBLEMS:
NO coordination with the store department.
NO forecasting
Supply chain of hindalco
Page 4

A framework of supply chain management of hindalco

A framework of supply chain management of hindalco

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