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Jaypee Supply Chain Management


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Jaypee Supply Chain Management

  1. 1. Project On SUPPLY CHAIN MANAGEMENT SECTION – A (Marketing)Submitted To: Submitted By:Dr. NaseemAbidi HarshalDhotra(11609147) ParthBhasin(11609035) RishabhDogra(11609171)
  2. 2. Table of Contents1. Brief about Company 3 - Products2. About Supply Chain Management 5 -Definition -Supply Chain operation Decision -Today’s cement Supply Chain3. Jaypee Cement Procurement & Manufacturing Process 74. Distribution Network 11 -Geographical Spread -PMLC Movement5. Reference Page | 2
  3. 3. Brief about Jaypee CementJaypee group is the 3rd largest cement producer in the country. The groups cement facilitiesare located in the Satna Cluster (M.P.), which has one of the highest cement productiongrowth rates in India.The group produces special blend of Portland Pozzolana Cement under the brand name„Jaypee Cement‟ (PPC). Its cement division currently operates modern, computerized processcontrol cement plants with an aggregate installed capacity of 28 MnTPA. The company is in themidst of capacity expansion of its cement business in Northern, Southern, Central, Eastern andWestern parts of the country and is slated to be a 35.90 MnTPA by FY13 (expected) withCaptive Thermal Power plants totaling 672 MW.Keeping pace with the advancements in the IT industry, all the 260 cement dumps arenetworked using TDM/TDMA VSATs along with a dedicated hub to provide 24/7 connectivitybetween the plants and all the 120 points of cement distribution in order to ensure “track –the – truck” initiative and provide seamless integration. This initiative is the first of its kind inthe cement industry in India.In the near future, the group plans to expand its cement capacities via acquisition andgreenfield additions to maximize economies of scale and build on vision to focus on largesize plants from inception.The Group is committed towards the safety and health of employees and thepublic.Company’s motto is “Work for Safe, Healthy, Clean & Green Environment”.Cement BrandsJaypee produces & markets both Portland Pozzolana Cement (PPC) & all grades of OrdinaryPortland Cement (OPC). A brief introduction of each brand is enumerated as below:▪ Portland Pozzolana CementJaypee Cement (PPC) is a market leader among all blended/composite cements in the marketsof U.P, Bihar, M.P., Punjab, Haryana, Delhi& Nepal. Its unique design and blend, with highstrength clinker and superior quality fly ash has made it the popular cement for construction Page | 3
  4. 4. of large number of strong and durable structures in these states.Fine particles of Jaypee Cement (PPC) when mixed with water readily form a smooth paste,which results in a smooth surface. When used with sand and aggregates it yields a very strong& durable concrete.▪ Ordinary Portland Cement33 Grade Conforming to IS: 269-198943 Grade Conforming to IS: 8112-198953 Grade Conforming to IS: 12269-198753 S Grade Conforming to IRST-40(53 S)OPC-43 GradeThis is produced from enriched limestone most suited to make high quality clinker. JaypeeCement (OPC-43 Grade) is available in 50 Kgs HDPE bags of a distinctive design and cover. Ithas emerged as the top choice of Engineers and Engineering Companies engaged inconstruction of mega projects – such as National Highways, Bridges, Transmission lines, powerplants, Industrial and Residential structures.OPC-53 GradeBecause of its fine nature, good particle size distribution, optimal phase composition, impartsthe properties of higher strength to the structures viz., Bridges, prestressed elements,penstocks, precast elements etc. requiring very high strength to negotiate the heavy static &dynamic loads.OPC-53S GradeIt is a used in heavily loaded or pre stressed structures, which are subjected to high dynamicloads due to rapidly moving volumes, be it a train passing on the railway sleepers or a greatvolume of water moving at high speed to generate electricity in a penstock. Page | 4
  5. 5. SUPPLY CHAIN MANAGEMENTDefinition:It encompasses all activities associated with the transformation of goods fromthe raw material stage to the final stage when the goods and services reach the endcustomer.Also, it involves planning, design and control of flow of material, information and financealong the chain in order to deliver value to the end customer in effective and efficient way.Pictorial Representation Page | 5
  6. 6. Supply Chain Operations Decision Demand forecasting Procurement planning Production planning & control Distribution Planning & Control Inventory management Transportation Management Customer Order processing Relationship managementToday’s Cement Supply Chain Page | 6
  7. 7. JAYPEE CEMENT PROCUREMENT &MANUFACTURING PROCESSMining processThe cement manufacturing process starts from the mining of limestone, which accounts foralmost 60% of raw material for making cement. Limestone is excavated from open cast minesafter drilling and blasting and loaded on to dumpers which transport the material and unloadinto hoppers of the limestone crushers.Setting up plants near quarry saves on inbound transport cost proximity to reserve is the singlemost important criteria. Page | 7
  8. 8. Basically Jaypee Cement has their own mines to get limestone which they purchase from localfarmers mainly in Rewa plant but in other regions like Sidhi, Thandaetc they also borrow theland for mining limestone in lease by state government.Mining royalty imposed by state government is paid per ton basis. Dumper sand shovels used inmining consume high quantity of diesel making it the second most important cost driver.The Mining operations are carried out by fully mechanized open cast mining method. Theequipments used include 153 mm drill machines, hydraulic excavators of 3.8 cum & 4.1cumbucket capacities, rock breaker, heavy duty 35 MT carrying capacity dumpers, bull dozersand miscellaneous equipments.The holes drilled for blasting are charged with bottom initiation using NONEL detonators tominimize ground vibration and fly rock & “INSTANTEL – DS 077” Seismograph being used onregular basis to monitor ground vibration.Systematic and scientific mining operations of Jaiprakash Associates Limited are well supportedby mine planning activities done with the help of mining software “SURPAC”.The reclamation and rehabilitation of mined out area is a continuous process in JaiprakashAssociates Limited. The hard overburden generated is used to back-fill the area capped withtopsoil and area is reclaimed in planned way by adopting large scale afforestation.Crushing Stacking & Reclaiming of Limestone The LS Crushers crush the limestone to minus 80 mm size and discharge the material onto a belt conveyor which takes it to the stacker via the Bulk material analyser. The material is stacked in longitudinal stockpiles. Limestone is extracted transversely from the stockpiles by the reclaimers and conveyed to the Raw Mill hoppers for grinding of raw meal.Crushing Stacking & Reclaiming of Coal The process of making cement clinker requires heat. Coal is used as the fuel for providing heat. Raw Coal received from the collieries is stored in a coal yard. Raw Coal is dropped on a belt conveyor from a hopper and is taken to and crushed in a Page | 8
  9. 9. crusher. Crushed coal discharged from the Coal Crusher is stored in a longitudinal stockpilefrom where it is reclaimed by a reclaimer and taken to the coal mill hoppers for grinding of finecoal.Sourcing CoalCoal reserves are found mostly in eastern states. 95% of coal mining is still in control of center orstate government. Steel, power and cement companies are allowed to do captive or contractmining.Government companies mined coal also known as “linkage coal” is 15- 20% cheaper than openmarket coal. Companies try to maximize linkage off take by better liaison with railways and coalmining companiesSince coal reserves are skewed towards the eastern zone, freight cost is the biggest cost driver.Market coal prices are determined by global supply and demand equation.Presently Jaiprakash Associates Ltd has borrowed many coal mines on lease by government, likein Shahdol district they borrow coal mine on lease by Madhya Pradesh government and also onJharkand they take on lease by Ministry of Coal, Central government. Also company purchasedcoal from Coal India Limited to fulfil needs.Raw Meal Drying/Grinding & Homogenization Reclaimed limestone along with some laterite stored in their respective hoppers is fed to the Raw Mill for fine grinding. The hot gasses coming from the clinkerisation section are used in the raw mill for drying and transport of the ground raw meal to the Electrostatic Precipitator / Bag House, where it is collected and then stored and homogenised in the concrete silo. Raw Meal extracted from the silo (now called Kiln feed) is fed to thetop of the Preheater for Pyroprocessing.Clinkerisation Cement Clinker is made by pyroprocessing of Kiln feed in the preheater and the rotary kiln. Fine coal is fired as fuel to provide the necessary heat in the kiln and the Precalciner located at the bottom of the 5/6 stage preheater. Hot clinker discharged from the Kiln drops on the grate cooler and gets cooled. The cooler discharges the clinker onto the pan / bucket conveyor and it is transported to the clinker stockpiles / silos. The clinker is takenfrom the stockpile / silo to the ball mill hoppers for cement grinding. Page | 9
  10. 10. Cement Grinding & Storage Clinker and Gypsum (for OPC) and also Pozzolana (for PPC) are extracted from their respective hoppers and fed to the Cement Mills. These Ball Mills grind the feed to a fine powder and the Mill discharge is fed to an elevator, which takes the material to a separator, which separates fine product and the coarse. The latter is sent to the mill inlet for regrinding and the fine product is stored in concrete silos.Packing Cement extracted from silos is conveyed to the automatic electronic packers where it is packed in 50 Kgs. Polythene bags and dispatched in trucks.Electrical PowerFor total power requirement of 90 MW (JaypeeRewa Plant and JaypeeBela Plant), we have CPP 1 - 25.0 MW CPP 2 - 25.0 MW CPP 3 - 37.0 MW Four DG sets provide an emergency backup.Source of fly ashBurning of coal results into fly ash. Thermal power plants across India produce plenty of goodquality fly ash which can be used by cement industry. Fly ash is used in producing blendedcement grades like PPC.Flyash prices are determined by local demand and supply equation. Since freight cost is themajor component, companies look for nearest source of flyash.Sourcing – GypsumPresently Jaiprakash Associates Ltd source gypsum from “Rajasthan States mines and MineralLimited” and also from Pakistan through middle man.Companies also import it from Thailand. Page | 10
  11. 11. Distribution NetworkJaypee cement has around 156 cement dumps and all are networked using State-of-the-artTDM/TDMA VSATs along with a dedicated hub to provide 24x7 connectivity between the plantsand all the 156 points of cement distribution in order to ensure “track – the – truck” initiativeand provide seamless integration. This initiative is the first of its kind in the cement industry inIndia.JAL has set up new capacities in Northern, Central, Western & Southern parts of the countryand is targeting a capacity of 26 MTPA in 2010 and 32.80 MTPA by 2011, along with CaptiveThermal Power Plants (CPPs) totalling 375 MW.Now the Group have 12 Integrated Cement Plants supported by 375 MW of captive thermalpower, 9 split location plants, 11 Railway sidings and a jetty, giving the Group a pan-Indiapresence in the cement sector.Geographical Spread of the Jaypee Cement Page | 11
  12. 12. PMLC MovementPMLC means Product Movement and Logistic Cell". This department ensures the delivery offinished product to the customer directly and to company stock points for further delivery tothe customer on retail basis.PMLC dispatch clinker to various mini plants and to grinding units as per requirement ofmarketing.Companies invariably hire c & f agents or transport cements to own or governmentwarehouses either via roadway or railways. In case of exports, cement reaches the nearest portvia roadways or railways and is then transferred to the importing country. Domestically, from c& f agents or warehouses the cement is transported to the dealers/distributors and in turn tosub dealers who finally sell it to the end users. There may or may not be physical ownership ofgoods. In the second case, dealers and sub dealers take order from buyers and place it to thecompanies, coordinate and monitor the timely dispatch of said orders, transportation of goodsand final delivery. Distributor network in cement industry is highly dominating and companiesare compelled to hire as they do not really have that rapport and touch with the end consumerof their product. Apart, from this, the distributors have storage facilities as well which helpcontrol well in the entire supply chain as they are the ones who bring orders and therefore aredirectly responsible for the business that a manufacturer would do They ultimately grind clinkerand manufacture cement for sale in market.PlanningBefore PMLC start the function, they should know what type of cement and quantity is to bedispatched to the customers in various markets or to our godowns located in our marketingarea. This target and grade wise dispatch of cement and clinker are fixed in the beginning of themonth and then they review it on daily basis with the Marketing Department to arrangedispatches. Such targets are fixed by department heads level i.e. COO (Cement). President(Com) and President (Mktg) with consultation as per availability of cement stock andproduction plan during the month. In case of constraints, they review the targets from time totime and the targets are reduced or increased accordingly. In this planning, they also plan thatwhat quantity of cement / clinker is to be dispatched by rail and by road. The ratio between railand road dispatches is also reviewed on daily basis depending upon the availability of railtransport and road transport facilities.Considering the targets, Marketing Deptt provides a plan of rakes to be loaded from ourdifferent sidings and road dispatches to the various godowns and to the direct customers. Thisplan is also reviewed with the Marketing from time to time depending upon the variation inMarketing conditions and transport condition. Page | 12
  13. 13. Mode of TransportationRoad TransportRoad Transport means the product is dispatched by trucks, trailers and tankers / bulkers to thecustomers or final destinations. The arrangement of these trucks, trailers and tankers/ bulkersare provided by our authorized transporters. The loading and dispatch of product in the trucksis arranged as given below.When truck arrives at plant for loading the product, the truck driver carries a TransportersBilty, which indicates the final destination, quantity to be loaded and sale/ customer order andthe bilty is produced to the Dispatch Department. The Dispatch Assistant checks theauthentication of the bilty, i.e. whether the bilty issued is signed by the authorized person, typeof vehicle and quantity balance in order before allowing the truck/ trailer/ tanker/ bulker forloading. Once the Dispatch Assistant satisfies with the bilty, he issues Loading Memo/ LoadingInstruction Slip and allow for loading the product. Then the vehicle comes to the Packing Plantvia weighbridge, where we record tare weight of the vehicle. Tare weight is the weight of theempty truck weighbridge provides a secret number on the Loading Instruction in which theweighbridge operator captures the data in to the system. Then the truck comes to PackingPlant, where Tally checker receives the truck and instructs the truck driver to be in queueaccording to the type of product to be loaded in the truck.After loading the product, in case of packed cement the Tallycheker counts the no. of bagsloaded in the truck and in case of bulk cement loading. Tallycheker ensures the sealingarrangement of all manholes or outlets, so the product does not leak from any of the manholesor outlets to avoid theft or adulteration in product through manholes.In case of clinker, after loading, we ensure that the clinker truck is covered with good tarpaulinto avoid damage due to moisture/ rain and spillage of clinker from body. Then he certifies theloading on loading instruction Slip and allows the truck to go weighbridge and net weight,where the weight bridge operator records the gross weight and net weight on the basis of thesecret number provided by the first weighbridge operator at the time of taking tare weight.After ensuring the correctness of the product loaded as per the weighment check, he allowsthe truck to approach to security for their checking and once the security personnel certifiesthat the loading is as per the loading instruction slip, he allows truck to approach DispatchDepttfor obtaining Excise Gate pass cum Delivery Challan by submitting the Loading instruction slipand bilty certified by the Tallychecker, Weighbridge and Security Guard. The DispatchDepttissues Excise Gate pass cum Delivery Challan and other relevant papers required to Page | 13
  14. 14. authorizedriver to move on route up to final destination.After delivering the material to the customer or at godown, truck driver brings the receiptedcopy of the product and submit the same to transporter for collecting freight and subsequentlythe transport, at the interval of 10 days, submit these receipts along with bill to AccountsDeptt. for collecting the payment. In this procedure, in case if the material is not received asper the Delivery Challan, the GDR (Godown Discrepancy Report) is endorsed on the receiptedcopy and the deduction of the value of product is made by the transporter from truck driverand finally company deduct amount from transporters bill, which is known as the cost ofdamage. The reasons for such deduction are on account of (a) Short Receipt of Material in term of Quantity/ Bags and (b) Damage in term of Packing or Quality.Rail Transport To commence the dispatches by Rail transport, we need railway wagons. For that purpose, we have different sidings, which are given below: Bela Railway Siding Turki (6 Km) &Satna (52 Km) Railway Siding: These sidings are outside the rewa plant and 6 km and 52 km away, where we have to take product for rail loading by road transport The use of both the sidings is not only for cement / clinker dispatches, but we use these sidings for receipt of raw material such as coal and gypsum. To dispatch from the above sidings, we have to request Railways for providing the wagons for loading cement/ clinker. This request is known as indent of wagons to Railways and for that purpose we fill our requirement in a Railway Register giving following details. (i) No. of wagons required (ii) Type and no. of wagons (iii) Destination (iv) Consignee details In case of cement, Railway provides us 40 Covered wagons and in case of clinker, Railway provides us 58 Open wagons, which is known as 1 rake and the average quantity to be loaded in these rakes are as under (a) Cement - a rake of 40 wagons- 2500 MT approx. (b) Clinker- a rake of 58 box wagons - 3500 MT approx. Page | 14
  15. 15. The capacity of each wagon, in case of cement varies from 62 MT to 65 MT and in case ofclinker the capacity is about 60 MT. Railways provide us wagons as per the availability ofwagons and once the rake is loaded in the siding, we submit a memo to Railways certifyingthat the loading of rake is completed, because Railways give a specific time for rake loadingand in case rake is not loaded in time, demurrage is charged on hourly basis for the extra timeutilized for loading. The loading time provided by the Railways in our different sidings is asbelow. Siding Cement Loading Clinker Loading Remark Turki&Satna Siding 9 hours 9 hours Manual Loading Bela Siding 7 hours 5 hours Mechanical LoadingThe demurrage is charged on the capacity of the rake if the loading is going on after specifichours and the rate of demurrage is Rs. 7.50 per hour per wagon. However, on a monthly basis,we request Railways to waive off the demurrage by giving the proper reasons on what accountthe demurrage accrued like shortage of labour, break down in the plant, roadtransport strikeetc. and Railways consider and waiver of the demurrage accordingly. This procedure is knownas Demurrage Waiver Application/ Appeal from Railways. The appeal is made to the followingofficers in Railways through concerned in charge Goods Clerk.(A) Assistant Commercial Manager(B) Dy General Manager(C) Sr. Divisional Commercial Manager(D) Divisional Railway Manager(E) Chief Commercial Manager(F) General ManagerThey have specific power to consider the demurrage. Normally the demurrage is waived off upto 40%. The demurrage waiver is done in three stages, for example case file to ACM will befinally disposed of by Sr DCM after passing through DCM, sometimes one or more wagons. Insuch cases we lodge a complaint to the Railways and normally Railways arrange to trace thewagons and deliver the same in a very short time to the destination and in case if they fail todeliver the wagon, the value of product loaded into wagon is paid by Railways to the Sidingowner, i.e. company after loading and settlement of the Railway claim. Here, it is veryimportant to note that Railway deputes commercial staff round the clock our siding forcollecting freight, charging demurrage and freight. Also they verify the loading of wagons andkeep the record for Railways. They are known as Goods Clerk. The salary of these staff postedat Siding by Railways, are paid by the siding owner, i.e. company. Page | 15
  16. 16. Referenceshttp://www.jalindia.com Page | 16