Shreecementpresentation on diversion and cost saving by unconventional methods

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Among the top 10 cement producers in India

A PROJECT WITH SHREE CEMENT LIMITED

PRESENTED BY:-VAIBHAV SETHIYA

ROLL NO : 19RMM (2008-10)

FACULTY GUIDE : Prof. DEEPTHY R.

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OBJECTIVES

1. “LOGISTICS COST SAVING BY ADOPTING DIVERSION AS UNCONVENTIONAL METHODS AND ITS IMPACT OVER MARKETING.”

2. “TO STUDY THE SHORTCOMINGS IN INBOUND LOGISTIC OF CLINKER AT KHUSHKERA GRINDING UNIT.”

“LOGISTICS COST SAVING BY ADOPTING DIVERSION AS

UNCONVENTIONAL METHODS AND ITS IMPACT OVER MARKETING.”

1) SHREE CEMENTS,BEAWAR (RAJASTHAN)

2) SHREE CEMENT, RAS (RAJASTHAN)

3) SHREE CEMENT, KHUSHKERA (RAJASTHAN)

LOCATION OF DIFFERENT SHREE CEMENTS PLANTS AND GRINDING UNITS

BEAWAR LOGISTICS FLOW

RAS LOGISTICS FLOW

RESEARCH METHODOLOGY

STEP I

CHECK EGP IN EGP OFFICE

NOTE TRUCKS GOING TO PARTICULAR DEPOTS

GET DRIVERS/OWNERS MOBILE NUMBER

PERSONAL INTERVIEW OF DRIVER

TELEPHONIC INTERVIEW OF DRIVER/OWNER

FIND OUT THE MAJOR DIVERSION AREAS

STEP II

SELECT MAJOR AREAS FOR FURTHER DETAILED STUDY

PERSONAL INTERVIEW OF:

• C&F AGENTS

• MARKETING OFFICERS AT DEPOTS

• HANDLING AGENTS

• DEALERS/RETAILERS

• TRANSPORTERS

STEP I

PERSONAL INTERVIEW OF THE DRIVERS

• Driver’s mobile number who will unload the truck

•Has he transported cement to that depot before

•If yes, were there any problems faced or complaints regarding depot

TELEPHONIC INTERVIEW OF THE DRIVER’S/OWNERS• Has he unloaded the cement?

• What was the name of unloading site

• If not Depot then what was the name of the party at unloading sit

• What was the distance (in Km.) of unloading site from depot

• Whether the unloading site was forward/backward from depot

• Was there any secondary freight given to you

• What was the amount given to him

• How much was the DALA paid for unloading

• Whether there were any problems faced or complaints regarding depot

ABOVE LOGISTICS FLOW OF DIFFERENT PLACES WERE STUDIED

EGP OFFICE WAS THE FINAL PLACE OF DOCUMENTATION

PERSONAL INTERVIEW WAS EASY TO BE CONDUCTED

DRIVER/CONDUCTER USED TO COME TO COLLECT THE EGP

EASY TO GET ACCESS TO INFORMATION OF THE DISPACH PLACE AND

OTHER REQUIRED INFORMATIONS ( QUANTITY,VEHICAL NO. , FRIGHT

ETC.)

EGP ROOM SELECTED AS DATA COLLECTION POINT

THE ABOVE AREA OF STUDY WERE THE CONCERN OF OUR STUDY WHICH WERE

OUTSIDE RAJESTHAN WHERE THE MAXIMUM DIVERSION WERE TAKING PLACE.

FROM THESE STATE ONLY SELECTED PLACES WERE CHOOSED FOR STUDY

PLACES SELECTED FOR DIVERSION STUDY FROM RAS

PLANT

PLACES SELECTED FOR DIVERSION STUDY FROM

KHUSHKERA GRINDING UNIT

FINDINGS

OUT OF 39 DEPOT SURVEYED 12 DEPOTS WERE FOUND HAVING

DIVERSION MORE THEN 40 %

MALPRACTICES IN DEPOTS

DALA CHARGED FOR LOADING AND UNLOADING

LOGISTICS COST ARE SAVED BY DIVERSION

ON DEALERS REQUEST SECONDARY FRIGHT VEHICALS ARE DIRECTLY SEND TO DEALERS

A PROPORTION OF DALA IS TAKEN BY THE HANDLING AGENT AND REST ARE GIVEN TO THE LABOUR

THERE ARE PARKING CHARGES IN SME DEPOTS BECAUSE OF PARKING PROBLEM

STEP II

MARKETING IMPACT OF DIVERSION

OUT LINE OF STUDY

• CRITERIA FOR SELECTION OF DEPOTS FOR SURVEY

•CHANNEL PARTNER MEET AT DEPOTS.WHY?

•DATA COLLECTION SHEET FOR SURVEY

•SHREE GURGAON

•SHREE BALLABGHAR

•CEMENTO GHAZIABAD

•MATHURA-CEMENTO

•AGRA SHREE

•KARNEL SHREE

•PANIPATH-SHREE

•OUTCOME OF SURVEY

•RECOMMENDATION

SELECTION OF DEPOT

DEPOTS HAVING DIVERSION PERCENTAGE ABOVE 30.

(Mathura Cemento, Agra Shree, Karnal Shree, Panipath Shree, Gurgoan Shree, Ghaziabad Cemento and Ballabhgarh Shree)

MANAGEMENT CONCERN

PROXIMITY FROM DELHI

CHANNEL MEMBER SURVEYED

• C&F - push or by pull?

• MARKETING OFFICER- selling and marketing strategy

• HANDLING AGENT- push or by pull?

• DEALER/RETAILER- selling and marketing strategy

• TRANSPORTER- freight given and malpractices done

DATA COLLECTION SHEET FOR DEPOTS

KEY PARAMETER NOTED

RANK OF BRAND,VOLUME WISE

RANK OF BRAND, BRAND WISE

MONETARY BENEFIT TO DEALER

NAME OF MARKET LEADER

NAME OF CLOSE COMPETITOR

NUMBER OF CEMENT BRAND IN MARKET

KEY PARAMETER NOTED







KEY PARAMETER NOTED







SHREE GURGOAN

SHREE BALLABHGHAR

CEMENTO GHAZIABAD

CEMENTO AGRA

SHREE KARNAL

SHREE PANIPATH

CEMENTO MATHURA

OUTCOME OF SURVEY

• Logistics cost saved by diversion is passed on in the supply chain from depot to retailer to push the sale.

• There is lack of field work and advertisement in almost all the depots, the wall paintings and billboards are not adequately done.

• No dealer, non dealer, architect, mason meetings done to motivate them from last one and half year.

• Major sales are done due to strong image and network of the sales promoter and the dealers.

• The supply of Shree cement is good .

• Handling agent and sales promoter are the same.

RECOMMENDATION

• Reduction In Secondary Freights

• Handling Agents And Sales Promoter Should Be Different

• Dealers, Architect, Meson Meetings Should Be Done

• Advertisements And Other Means Of Communication Should Be Increased

• Depot Practicing Malpractices Should Be Penalized

• Company Should Conduct A Yearly Survey Of Truck Driver .

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LIMITATIONS

• Secondary freight of few unloading sites was not provided. So it was taken to be minimum secondary freight for that depot in such cases.

• No means to validate the response of participants during TI.

• At times drivers used to give wrong number due to certain fear.

• Mobile phone used to come switched off/not answered at times. Call was made to them after a day’s span to recheck.

“TO STUDY THE SHORTCOMINGS IN INBOUND LOGISTIC OF CLINKER AT KHUSHKERA

GRINDING UNIT”

OUT LINE OF THE STUDY

• Method:1. Through Rake from SCL Beawar Plant.2. Through Road from SCL RAS Plant.

• Checkpoints:1. Beawar Railway Siding.2. Khori Open Railway Siding.3. Khushkera Grinding Unit

CHALLENGES AND ISSUES

1. Beawar Railway Siding:-

• Labour Availability and Efficiency.

• Locomotive and Track Utilization.

• Time Optimization.

• Reducing Demurrage.

2. Khori Open Railway Siding:-

• Machine & Labour availability and Contractors’ efficiency.

• Evaluation of Contractors’ Expenses.

• Problems caused by the Locals.

3. Khushkera Grinding Unit:-

• Co-ordination while unloading.

• Shrinkage Calculation and Documentation.

CHALLENGES AND ISSUES CONT…

1. Beawar Railway Siding:

• Labour Availability and Efficiency.

Contract Labour – For unloading Coal = 180 to 200

– For loading Clinker = 35 to 40

Number of Dumpers required – 5

Issue(s):-

Availability of Labour at night.

• Locomotive and Track Utilization.

Number of Locomotives – 3; Capacity – 2000 tons.

Number of Tracks – 9

Issue(s):-

Track 9 can accommodate only 10 wagons.


Labour Availability and Efficiency.

Locomotive and Track Utilization.

• Time Optimization.

3 Dumpers filled by Feed Hopper (300m. From the Ramp)

2 Dumpers filled manually by JCB.

Time required for loading set of 10 wagons = 80 to 90 minutes.

Time required for replacing set of 10 wagons = 30 minutes.

Permissible time for loading Rake = 9 hours

Actual time taken = 12 Hours (approx.)

Issue(s):-

Current employed process of clinker loading is inefficient in loading Rake in allowed time line.

Spillage of Clinker over the tracks.

• Demurrage:-

Beyond 9 hours, Rs. 100/- per wagon for every extra hour.

Issue(s):-

Average monthly amount for Demurrage = 2.5 Lakh Rupees.



• Machine & Labour availability and Contractors’ efficiency.

Number of Labour Employed = 200

Number of JCB’s = 6

Number of Procaine = 1

Contractor’s method used is efficient to free the Rake in allowed time and hence save Demurrage.

• Evaluation of Contractors’ Expenses.

Company’s price = Rs. 60/- per metric ton. (pmt)

The actual expenses and the overheads of the contractor are tabulated in an excel sheet as shown:-

Issue(s):-

Difference in actual pmt cost and company fixed pmt cost.



Beawar Railway Siding:-


Machine & Labour availability and Contractors’ efficiency.

Evaluation of Contractors’ Expenses.

• Problems caused by the Locals.

Cloud of Dust at the time opening dalas of the rake, handling of clinker and loading of trailers.

Cloud of dust effects the health of shopkeepers and hamper their food products, shop hygiene and sales.

Issue(s):-

Disallow work in day hours (9 am to 8 pm).

Manhandle the contractor if work is continued.

Free time of the Rake is extended, increasing demurrage.

Labours and Machines held up for extra time incurring extra cost.

REAL TIME PHOTOGRAPH OF ‘CLOUD OF DUST’


3. Khushkera Grinding Unit:-

• Co-ordination while unloading.

Tipplers employed for unloading Clinker in SILO = 2 + 1(under construction)

Max. Number of Trailers from Khori unloaded in a day = 35 (Limit)

• Shrinkage Calculation and Documentation.

Since there is no weigh bridge employed at Khori; weight of clinker in a trailer is done at KKGU.

Total Net Weight of Clinker of a single Rake is matched with the net weight of Clinker taken at Beawar.

Difference is taken as shrinkage i.e. minuscule.

Net weight per trailer is documented at freight to the transporter is paid accordingly (Rs. 109/- per ton).


• Extension of Conveyor Belt and Feed Hopper to Rake.

• Extra dumpers and JCBs can be employed at manual clinker loading site near SILO.


• Number of JCBs should be reduced from 6 to 4.

• Cost given by SCL to contractor i.e. Rs. 60/- pmt should be reduced.

• Construction of obstruction between railway siding and shop.

• Request Railways to start placement timing after 5 pm or waive off demurrage.

• An alternative location around Khori to be considered. i.e. Pali Railway Siding.

SUGGESTIONS AND RECOMMENDATIONS

ADVANTAGES OF PALI RAILWAY SIDING;-

Dedicated Railway Siding for SCL.

Rake will be shunted into 2 halves and will be placed on two separate tracks.

30 wagons on each track will increase the efficiency of unloading.

Away from residential/commercial area.

Permission from railway to develop site according to need.

DISADVANTAGES OF PALI RAILWAY SIDING:-

7 km. ahead of Khori railway siding. This can cause increase in freight.

SCL has to construct a platform on one side.

Entry and exit path is not developed.

REFERENCES

• About: Inbound Logistics. (2008). Retrieved 06 12, 2009, from Inbound Logistics: www.inboundlogistics.com/

• About: India Cements. (2009). Retrieved 06 15, 2009, from India Cements: www.indiacements.co.in

• Cement: Indian Industry. (2009). Retrieved 07 05, 2009, from Indian Industry: www.indianindustry.com/cement

• Home: Shree Cements. (2009). Retrieved 06 12, 2009, from Shree Cement Ltd: www.shreecementltd.com

• India: Business Standard. (2009). Retrieved 06 19, 2009, from Business Standard: www.business-standard.com/india

46Thank You

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Shreecementpresentation on diversion and cost saving by unconventional methods

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