1

A Training Report

On

Optimum level of transportation cost

With Special reference to
Ambuja Cement.

Submitted for the requirement of partial fulfillment of

The Degree of Master of Business Administration

(Lovely Professional University, Jalandhar)

Under the Guidance of : Submitted by:

Mr. Himesh Janartha Pradeep Kumar

(Deputy Manager commercial) Roll no-RS1802A28

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PREFACE

Learning is like eating food. It is not how much one eats that matters, what
counts how much you digest. Knowledge is potential power wisdom is real power.
Knowledge becomes poor only when it is acted upon.

“On the job training” plays a vital role in any professional course. The six weeks
practical on the job training, which is incorporated in the MBA course, helps the
students to see for themselves how they fit in typical business enterprise.

The training stint at Ambuja cement ltd (Darlaghat), gave me practical insight into
the working of the company especially in the field of Operation, which until now was
limited to books only. But these six weeks have been special and proved to be a
value addition in the field of Marketing and how actually functions are performed in
the organization. This training helped me to get a close look into the concurrence,
and why the summer training is important?

The first part of the report is all about the Company and its different departments,
the functioning, the structure and other important information regarding its
incorporation and current projects in hand and the future plans.

The second part is the project report related to the “Optimum Cost of
Transportation” which represents the financial position of the company.

ACKNOWLEDGEMENT

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Many lives and destinies are destroyed due to the lack of proper guidance,
directions oppurtunities.It is in this respect I feel that I am in much better condition today
due to continuous process of motivation and focuss provided by my guide and
parents.The process of completion of this project was a tedious job and requires
support at all stages.I would like to highlight the role played by individuals towards this.

First of all with the core of my heart, I would like to thank God who is full of
compassion and mercy. He has bestowed me with enough courage to accomplish this
task.

This project is a result of efforts, time and skills contributed by a number of

people. I would like to take this opportunity to thank all of those who have worked
towards successful completion of this project report. At the onset I would like to thank
AMBUJA CEMENT LTD as a whole for providing me the opportunity for doing the
training.

I feel privileged in expressing my deep gratitude and thanks to Mr. Himesh

Janartha (Deputy Manager) for their valuable inputs and ideas supplied in the
beginning. They took great pains to show me the right path and also held the torch for
me to walk that path. Periodic meetings with them during the last six weeks have been
enlightening not just for the purpose of project report but also for my overall intellectual
abilities.

I humbly thank Mr. H.P.S. Sethi (Depty General manager), Mr.Himesh Janartha
and S. S. Sodhi( General Manager), who had constantly helped to learn the way things
were done in the Operation department. Words alone cannot describe immeasurable
gratitude I owe to my parents. Without their help and guidance I would not have
accomplished my project.

Finally, I am grateful to my friends and fellow students currently working in the

organization for facilitating the search of raw data for the purpose of research.

Pradeep kumar

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DECLARATION

I hereby declare that the Research Project Title “ OPTIMUM COST OF

TRANSPORTATION” this report is submitted in the partial fulfillment of requirement for
the degree of Masters of Business Administration. This report is a bonafide research
work carried out by me. No part of this report has been submitted for the award or any
other diploma/degree/fellowship or any other similar title or prize. This report is based
upon my personal opinion. Hence, it cannot be referred to for official or legal purposes.

Pradeep Kumar
MBA IIIrd Semester

CONTENTS

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1. Preface…………………………………………… 2 page
2. Acknowledgement……………………………… 3
3. Declaration………………………………………… 4
4. Executive summary…………………………….. .. 5

Chepter-1

Inroduction of subject

(a) Theretical Foundation………………………6 - 10.

(b) Existing Studies………………………………11-15

Chepter-2

• Overview , Intoduction, history, milestones ,locations &

achievements,Recognisation,Future plans, Technical
Details and The Environment……………15- 25

Chepter-3

• Objectives of study and scope………………26

• Reseach Methodology………………………..27 -28

Chepter-4

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• Analysis and interpretation………………………………..29-37

Chepter-5

• Limitations…………………………………………………38

Chepter-6

• Conclution …………………………………………………39
• Recommodation…………………………………………. 40
• Bibliography………………………………………………. 41
• Questionnaire………………………………………………42-44

EXECUTIVE SUMMARY

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Ambuja Cement Ltd. is one of the leading and most efficient producers of
cement. ACL is the lowest cost producer in the country helped by new plants , better
quality of limestone and innovative energy management efforts. It has been able to
post profits despite the low realizations in Ambuja primarily on account of excellent
operating parameters. It’s predominately retail presence in Mumbai, Gujrat and Punjab
gives the company an edge over its peers in terms of pricing power.

The company is putting up a million ton capacity cement plant at Gadchandur in

Maharastra. The company is also setting up a five lakh ton capacity grinding unit in Sri
Lanka, where the company has already set up packing unit.

Chepter-1

INTRODUCTION OF THE SUBJECT

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My topic of the project report is “ To find the optimum cost of transportation’’.This is the
topic given to me by Mr. Himesh Janartha (Deputy Manager) in the Sales and
Distribution Department. This comes under logistics .Then what is Logistics-

Logistics

The definition of logistics used in this thesis is the one of Council of Supply Chain
Management Professionals, CSCMP: “Logistics management is that part of the Supply
Chain Management process that 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.”

According to CSCMP, Logistics Management activities typically comprise:

“inbound and outbound transportation management, fleet management, warehousing,
materials handling, order fulfilment, logistics network design, inventory management,
supply/demand planning, and management of third party logistics services providers.”

“To varying degrees, the logistics function also includes sourcing and
procurement, production planning and scheduling, packaging and assembly, and
customer service. It is involved in all levels of planning and execution – strategic,
operational and tactical. Logistics Management is an integrating function, which
coordinates and optimizes all logistics activities, as well as integrates logistics activities
with other functions including marketing, sales manufacturing, finance and information
technology.”

SALES AND DISTRIBUTION

A sale is the pinnacle activity involved in selling products or services in return for
money or other compensation. It is an act of completion of a commercial activity.

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A sale is completed by the seller, the owner of the goods. It starts with consent
(or agreement) to an acquisition or appropriation or request followed by the passing of
title (property or ownership) in the item and the application and due settlement of a
price, the obligation for which arises due to the seller's requirement to pass ownership,
being a price the seller is happy to part with ownership of or any claim upon the item.
The purchaser, though a party to the sale, does not execute the sale, only the seller
does that. To be precise the sale completes prior to the payment and gives rise to the
obligation of payment. If the seller completes the first two above stages (consent and
passing ownership) of the sale prior to settlement of the price, the sale is still valid and
gives rise to an obligation to pay.

Distribution (or place) is one of the four elements of marketing mix. An

organization or set of organizations (go-betweens) involved in the process of making a
product or service available for use or consumption by a consumer or business user.
The other three parts of the marketing mix are product, pricing, and promotion

Frequently there may be a chain of intermediaries, each passing the product

down the chain to the next organization, before it finally reaches the consumer or end-
user. This process is known as the 'distribution chain' or the 'channel.' Each of the
elements in these chains will have their own specific needs, which the producer must
take into account, along with those of the all-important end-user.

RELATION OF S&D WITH LOGISTICS

Proposes that many of business and non-business disciplines have much to offer
logistics. Also reveals that there are many theories from other disciplines that are
potentially relevant to the examination and study of logistics. States that becoming a ore

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creative logistics manager is not just a matter of practicing new techniques and
methodologies, but it is also about being aware of the fundamental differences between
the past and current situations. Proposes that managers have to realize that the most
important point is having the right type of atmosphere and environment in which
employees are encouraged to create, coordinate, and improve the entire business,
including facilitating a reliable network of relationships and market channels. States that
total quality management (TQM) and total relationship management (TRM) may make a
fruitful contribution to the logistics and supply chain management

You can use the Document Relationship Browser (DRB) to display linked documents
containing one or more documents from logistics, within a business process.

Currently DRB supports the display of the following object types (documents) from
Sales and Distribution (SD), Material Management (MM), Logistics Execution (LE),
Warehouse Management (WM), Plant Maintenance and Customer Service (PM/CS),
and Production Planning (PP).

Links
• Within Sales and Distribution the links are mapped between sales
documents as well as documents of other applications in the
document flow. Here a document can have several predecessors or
successors. In DRB a document is considered to be directly linked to
another if it is either a direct predecessor or successor of this
document.
• In Materials Management there are further links that are described in
the sections for the object types concerned.

• Some logistics documents can be source documents of predecessors

in Accounting. Consequently they are linked with accounting
documents. Examples include links between billing documents and
accounting documents.

• Links using the general object link are determined by DRB in the SAP
Basis system. An IDoc (Intermediate Document), for example, can be
linked with a logistics document.

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• Links to a workflow instance are likewise determined in the SAP Basis

system and may also be linked to logistics documents.

How to calculate optimum cost:

Basically, to calculate it I have to calculate all the expenses of the transporters

which occurred during their trips of trucks. Means that I have to calculate per KM cost
by the data collected from different-2 transporters.Meaning ihave to set up relevant
price according to expense of transporters .

For example the expenses to calculate are given below:

1. Diesel cost per month

2. Lubricant cost per month

3. Tyre expenses per month

4. Maintenenance cost per month

5. Labour cost per month

6. Tax and insurance per month

7. Average Depreciation per month

8. Installment cost per month acc. to rate of interest (acc. to model)

(b)Existing Studies on this topic:

Supply Chain Management

Supply Chain Management is the design and management of seamless , value added
process across organizational boundaries to meet the real needs of the end customer.
The development and integration of people and technological resources are critical to

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successful supply chain integration. As the corporations strive to focus on core

competencies and become more flexible, they have reduced their ownership of raw
materials sources.

These functions are increasingly being outsourced to other corporations that can
perform the activities better or more cost effectively. The effect has been to increase the
number of companies involved in satisfying consumer demand while reducing the
management control on daily logistics operations. Less control and more supply chain
partners led to the creation of Supply Chain management concepts. The purpose of
Supply chain management is to improve trust and collaboration among supply chain
partners, thus improving inventory visibility and improving inventory velocity.
Supply Chain Management is the process of planning , implementing and controlling the
operations of the supply chain with the purpose of satisfying the customer's
requirement as efficiently as possible. Supply Chain spans all movement and storage
of raw materials , Work-in-process , inventory and finished goods from the point of origin
to the point of consumption.

According to the CSCMP , a professional association, that developed the definition,

Supply Chain Management encompasses the planning and management of all
activities involved in sourcing and procurement, conversion and all logistics
management activities. It also includes coordination and collaboration with channel
partners which can be suppliers, intermediaries, third party etc.

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Supply chain management flows can be divided into three main flows:

1.The product flow

2. The information
flow

3. 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.
In essence, Supply chain management integrates supply and demand management
within and across companies. Some experts distinguish Supply Chain Management with
Logistics while others consider the term to be interchangeable.
From the point of view of an enterprise, the scope of supply chain management is
usually bounded on the supply side to the supplier's supplier and on the customer side
by your customer's customer

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Supply Chain Decisions

We classify the decisions for supply chain management into two broad
categories -- strategic and operational. As the term implies, strategic decisions are
made typically over a longer time horizon. These are closely linked to the corporate
strategy (they sometimes {it are} the corporate strategy), and guide supply chain
policies from a design perspective. On the other hand, operational decisions are short
term, and focus on activities over a day-to-day basis. The effort in these type of
decisions is to effectively and efficiently manage the product flow in the "strategically"
planned supply chain.

There are four major decision areas in supply chain management: 1) location, 2)
production, 3) inventory, and 4) transportation (distribution), and there are both strategic
and operational elements in each of these decision areas.

1. Location Decisions

The geographic placement of production facilities, stocking points, and sourcing

points is the natural first step in creating a supply chain. The location of facilities
involves a commitment of resources to a long-term plan. Once the size, number, and
location of these are determined, so are the possible paths by which the product flows
through to the final customer. These decisions are of great significance to a firm since
they represent the basic strategy for accessing customer markets, and will have a
considerable impact on revenue, cost, and level of service. These decisions should be
determined by an optimization routine that considers production costs, taxes, duties and
duty drawback, tariffs, local content, distribution costs, production limitations, etc. (See
Arntzen, Brown, Harrison and Trafton [1995] for a thorough discussion of these
aspects.) Although location decisions are primarily strategic, they also have implications
on an operational level.

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2. Production Decisions
The strategic decisions include what products to produce, and which plants to
produce them in, allocation of suppliers to plants, plants to DC's, and DC's to customer
markets. As before, these decisions have a big impact on the revenues, costs and
customer service levels of the firm. These decisions assume the existence of the
facilities, but determine the exact path(s) through which a product flows to and from
these facilities. Another critical issue is the capacity of the manufacturing facilities--and
this largely depends the degree of vertical integration within the firm. Operational
decisions focus on detailed production scheduling. These decisions include the
construction of the master production schedules, scheduling production on machines,
and equipment maintenance. Other considerations include workload balancing, and
quality control measures at a production facility.

3. Inventory Decisions

These refer to means by which inventories are managed. Inventories exist at

every stage of the supply chain as either raw materials, semi-finished or finished goods.
They can also be in-process between locations. Their primary purpose to buffer against
any uncertainty that might exist in the supply chain. Since holding of inventories can
cost anywhere between 20 to 40 percent of their value, their efficient management is
critical in supply chain operations. It is strategic in the sense that top management sets
goals. However, most researchers have approached the management of inventory from
an operational perspective. These include deployment strategies (push versus pull),
control policies --- the determination of the optimal levels of order quantities and reorder
points, and setting safety stock levels, at each stocking location. These levels are
critical, since they are primary determinants of customer service levels.

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4. Transportation Decisions
The mode choice aspect of these decisions are the more strategic ones. These
are closely linked to the inventory decisions, since the best choice of mode is often
found by trading-off the cost of using the particular mode of transport with the indirect
cost of inventory associated with that mode. While air shipments may be fast, reliable,
and warrant lesser safety stocks, they are expensive. Meanwhile shipping by sea or rail
may be much cheaper, but they necessitate holding relatively large amounts of
inventory to buffer against the inherent uncertainty associated with them. Therefore
customer service levels, and geographic location play vital roles in such decisions.
Since transportation is more than 30 percent of the logistics costs, operating efficiently
makes good economic sense. Shipment sizes (consolidated bulk shipments versus Lot-
for-Lot), routing and scheduling of equipment are key in effective management of the
firm's transport strategy.

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Chepter-2

INTRODUCTION

Ambuja Cements was set up in 1986. In the last decade the company has
grown tenfold. The total cement capacity of the company is 18.5 million tonnes.

Its plants are some of the most efficient in the world. With environment protection
measures that are on par with the finest in the developed world.

The company's most distinctive attribute, however, is its approach to the

business. Ambuja follows a unique homegrown philosophy of giving people the authority
to set their own targets, and the freedom to achieve their goals. This simple vision has
created an environment where there are no limits to excellence, no limits to efficiency.
And has proved to be a powerful engine of growth for the company.

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As a result, Ambuja is the most profitable cement company in India, and one of
the lowest cost producer of cement in the world.

Ambuja Cements Limited (the Company) is one of the leading producers of

cement in India. The Company is now a part of Holcim Group, which is one of the
largest cement maker in the world with operations in more than 70 countries and
employing almost 90,000 people.

The Company considered Corporate Governance as an integral part of good

management much before the concept evolved in corporate India. The Company’s
phenomenal growth is achieved inter-alia with committed best business practices and
ethical climate. The best business practices and ethical code are ingrained in the
Company culture and its personnel and played a vital role in the success of the
Company.This Code of Conduct establishes a common and consistent framework
across the organization for how we will achieve our mission and goals. It provides
direction and clarification in how we conduct our daily business. High business ethics
and personal integrity ensure our credibility and reputation as a respected corporate
citizen.

Today, Ambuja is the 3 rd largest cement company in India, with an annual plant
capacity of 16 million tonnes including Ambuja Cement Eastern Ltd. and revenue in
excess of Rs.3298 crores.

More importantly, its plants are some of the most efficient in the world. With
environment protection measures that are on par with the finest in the developed world.
But the company’s most distinctive attribute is its approach to the business.

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Ambuja believes its most valuable assets aren’t cement plants.

They are the people who run the plants.

This unique vision is encapsulated in the company’s homegrown philosophy of

giving people the authority to set their own targets, and the freedom to achieve their
goals.

It’s called ‘I can’’

This simple vision has created an environment where there are no limits to
excellence, no limits to efficiency. And has proved to be a powerful engine of growth for
the company.

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As a result, Ambuja has consistently raised the bar in all aspects of the cement
industry. Be it transportation, plant efficiency, brand building or human resource
development.

Take a look:

First plant set up in record time

When Ambuja set up its first plant in 1986, the accepted time period for installing
a plant was 3 years.

Ambuja, did it in less than 2 years. And with a significantly lower capital
expenditure.

In 1993 the company went a step further and bettered its own record. Ambuja's
second plant was installed in a mere 13 months - the quickest time for setting up a one
million tonne cement plant.

A whole new way of transporting cement

In the early 90s, almost all cement in India travelled by rail or road. And in bags.
A mode that involves deterioration of both, the quality and volume of cement.

In 1993, Ambuja Cement set up a complete system of transporting bulk cement

via these a route. Making it the first company in India to introduce bulk cement
movement by sea. Others followed and today, about 10% cement travels by this new
route.

The facility comprises: A dedicated port at the Gujarat plants, capable of berthing
40,000 DWT vessels, three bagging terminals at Mumbai, Surat and Sri Lanka, and
seven special bulk cement vessels.

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This capability has enabled us to supply fresh cement to many coastal markets –
domestic and international.

Branding a commodity

Cement is a commodity, sold largely on price. Ambuja Cement was the first
company to create a brand out of cement and command a premium. It was also the first
to introduce a special cell, providing technical services to consumers and masons.
Today, this has become the norm in cement marketing.

The trick of course was to provide a consistently high quality of cement,

backed by excellent service. This was reinforced by a strong dealer network.

The result is that customers are ready to pay 2-3% premium for Ambuja Cement
for the value they receive. Ambuja Cement is the top brand in Western, Northern,
Central and Eastern India. Exports

Ambuja Cement exports almost 17% of its production in a very competitive

international environment. For the last ten years, Ambuja Cement remains India’s
highest exporter of cement.

This has been possible for two reasons –

One, the quality of cement matches the best in the world.

Two, the dedicated bulk cement transportation capability at our Gujarat plant.

The Environment

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From the outset, Ambuja has believed that a cement plant cannot flourish at the
cost of the environment. That’s why it adheres to the most rigorous international
environmental norms.

The pollution levels at all its cement plants are even lower than the rigorous
Swiss standards of 100 mg/NM 3. At the Gujarat plants, surface miners have been
employed to scrape the surface of the mines. Thus ensuring that all the mining is totally
blast free. There is no noise or air pollution. Similarly at the Himachal Pradesh plant,
Ambuja has employed techniques that have made mining absolutely safe and pollution
free. Not surprisingly then, the company has consistently won awards for its pollution
free plants. Awards as prestigious as the National Award for Outstanding Pollution
Control and The Eco-Gold Star of Tata Energy Research Institute (TERI).

Corporate Social Responsibility

In 1991, the company set up Ambuja Cement Foundation to trigger all-round

development of the people around its cement plants. The Foundation decided to
traverse the difficult but more productive path of helping the people to help themselves.
With great dedication and commitment, the foundation energized the local people to
participate and own their development process. It became a facilitator and catalyst,
rather than a one-time fund provider. It developed easily replicable and sustainable
modules for water management, sustainable agriculture and healthcare.

All this effort in discharging its social responsibility has earned the company recognition
across Asia.

Milestones

Building of a cement plant in record 13 months.

2.8 kilometer conveyor belt running through three hills was constructed in just 9
months. Introduced a completely new system of transporting cement in India – the bulk

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cement transportation by sea. Introduced complete blast free limestone mining by using
the surface miner in limestone mining for the first time in India. Created water reservoirs
in used up mines and raised the water table in arid areas. Our plants have achieved the
lowest pollution levels – comparable with the most strongest Swiss standards.

Recognition

• National Award for commitment to quality by the Prime Minister of India.

• National Award for outstanding pollution control by the Prime Minister of India.
• Eco-Gold Star by TERI
• Best Export Award by CAPEXIL.
• Award for Corporate Social Responsibility by Business World – FICCI
• International Award For Rural Development by Asian Management Institute
(AIM)
• ISO 9002 Quality Certification.
• ISO 14000 Certification for environmental systems.

Technical Details

Established – 1986.

Total Capacity – 15 million tonnes.

Infrastructure – Dedicated port at Gujarat. Capable of berthing 40,000 DWT

vessels with carrying capacity of 20,000 tonnes.

Packing terminals at Mumbai, Surat and Sri Lanka.

Seven dedicated bulk cement ships.

Careers:

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At Ambuja, a simple homegrown philosophy is at work for the last 20 years - 'let
people set their own targets, give them freedom to achieve them and their task
becomes a personal mission : I CAN'

These two words have made our people achieve impossible feats. And, on the
way, have made Ambuja Cement one of world’s most respected cement companies.
Where people push their limits up as if none existed.

Environment protection measure that conform to the worlds best

Achievements

The pollution levels at all our cement plants are even lower than the rigorous
Swiss standards of 100 mg/NM3. The air is so clean that a rose garden flourishes right
next to the main plant.

Benchmarking quality standards for the industry.

Ambuja has received the highest quality award - the National Quality Award. The
only cement company to do so. It’s also the first to receive the ISO 9002 quality
certification.

Reinventing cement transportation.

Almost 90% of cement in India travels by rail or road. And in bags.

Our people realized that the only way to speed up transportation was a
completely different approach. The result: a bulk transporting system via the sea.
Making us the first company to introduce the concept of bulk cement movement by sea
in India.

Name of company Location State Process Used

Ambuja Darlaghat Himachal Pradesh
Ambuja Ropar Punjab Grinding Unit
Ambuja Bhatinda Punjab Grinding Unit
Ambuja Cement Raj. Ltd. Pali Rajasthan Dry
Ambuja Cement Kodinar Gujarat Dry
AMBUJA CEMENTS LTD
Ambuja Eastern Sankrail West Bengal Grinding Unit
Ambuja Eastern- CTG Bhatapara Chhattisgarh Dry
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LOCATION MAP

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Chepter-3

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RESEARCH METHODOLOGY

For the successful research the manipulation of certain things, concepts,

symbols for the purpose of generalization is inevitable. Research is done
so as to verify knowledge. Research is the pursuit of the truth with the help
of the study. In order to conduct a meaningful research the following
procedures were followed.

1. Setting the objectives of the study:

Objective is to find the optimum cost of transportation .

2. Developing Research Plan :

The research is planned in such a way as to give a clear picture by the final
conclusion drawn from the study.

The primary data source was chosen for the study. This was desired so
because it gives the primary information. More over first hand information can easily be
attained by this method. Lastly most important is the latest information which we will not
be gets anywhere else. The method got for caring out the study is discussed here as
under:

Sampling Plan:

This was designed so as to help in making decisions in the following cases:

(a) Sampling Unit :

The respondents were taken to all the transporters in Darlaghat.

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(b) Sampling Size :

A total of hundread respondents were contacted.These numbers include the

A.D.K.M. society Transporters and BLL, GLL and S.D.T.O. transporters.

(c) Sampling Procedure:

All the transporters in darlaghat are personally visited for this research.

3. Data Collection:

The data is maily collected from primary source is called primary data. The primary data
is original in character and is obtained by a study specifically designed to fulfill the data
needs of the problem at hand. It is collected through personal interviews, questionnaires or
observation and by survey method.

The secondary sources of data refer to already publish data or data collected by other
agencies. It is second hand data. It is available in published form.The secondary data used
in this project is obtained from the annual reports of ACL.

NEED OF THE STUDY:-

To know about the Optimum cost of transportation of ACL in its future projects, in order
to set relevant rates in transportation & to compare the data to take analytical overview of
the company.

SCOPE OF THE STUDY

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Different objectives of the ACL & to get information about the future prospectives.Annual
reports of the respective years has to be over vied.

OBJECTIVES OF STUDY

The primary objective of the study is to have a complete knowledge of

Expenditures of trucking and:-

1. To set up relevant rates of transportation .

2. To study optimum level of transport in trucking.

3. To know that the rates given by the company are relevant or not..

4. To have comparative view over its business financial position, measuring changes
in composition and figures of various assets and liabilities.

Chepter-4

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Analysis of the survey

This projectal was allotted to me by Mr.Himesh Janartha (Deputy Manager

commercial) of S & D department so I did my survey in darlaghat. As there are four
societies in darlaghat ADKM, SDTO, BLL & GLL. I collected different views of different
transporters in order to calculate optimum cost of transportation. In order to find that I
have to find the all the expenses inauccred by the transporters as i show in my
questionnaire like as :

(b) Diesel cost per month

(c) Lubricant cost per month

(d) Tyre expenses per month

(e) Maintenenance cost per month

(f) Labour cost per month

(g) Tax and insurance per month

(h) Average Depreciation per month

(i) Installment cost per month acc. to rate of interest (acc. to model)

As there are mainly two things (products) given by Co. to their truck transporters
so as they can load their trucks.

1. Clinker

2. Cement

Transporters societies

There are four transport societies in ACL. . It was established in 1990 by ACL itself
with the help of local villagers and its employees . These are :-

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1..Ambuja- Darlaghat- Kashlog- Mango ( A. D.K.M. )

2. Solan -Darlaghat- Truck-Operator Union (S.D.T.O. )

3. Goldan -Land -Looser ( G.L.L. )

4. Baghal- Land -Looser ( B.L.L )

These societies are divided into four parts so as their work can be managed
separately.These societies works in four steps.

1. Orders

2. Dispatch

3. Freight

4. Maintenance

1. Orders:

Detailed order list is received through On Line system from S & D dept . S & D
are inter-connected through LAN(Local Area Network) with those transporter socities.

The Performa of Order list is given below

Sr. No. Annex Order No. Destination Category Qty. Product

2. Dispatch:

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On receipt of the list of orders allotted to these Societies, these orders are
processed simultaneously the trucks are serially noted in the record book . As the
information received the driver of concerned truck repots to booking office of S & D to
get the printed DO ( Dispatch Order ) for that particular truck with the destination and
hence the truck is loaded for the destination .After loading the truck , these societies
prepares LR on the basis of Challan or Invoice which is prepared by the booking office
Maximum acceptable load by the society is 18 MT. These Societies handling the
functions 24 hours in the shift duty by 4 persons .

3. Frieght:

Frieght is calculated on the basis of per MT capacity as well as Km basis. If the LR is

prepared for TO PAY basis then freight is received on the spot from the dealers and if
the freight is for TO BE BILLED then a separate supporting bill is prepared with an
annexure of those LR’s and received from A/c of ACL. After that it is given to the truck
owner.

4. Maintenance:

The societies has appx 4000 trucks which are assigned an identification codes
like A1,A2……..Earlier the society was having its own workshop for maintenance of
trucks which caused a lot of burden and maximum manpower. Maintenance work was
reducing day to day but the expenses as it were .For avoiding the same it was decided
to abolish the workshop. Now they are getting repaired the vehicles from the Ropar.
Maximum running of a truck in a month 5000-5500 Km. Maintenance cost is Rs 4000 –
4500 per truck per month . Tyres are get replaced after 70000-75000Km

VIEWS OF TRANSPORTERS FOR CLINKER

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No. of Clinker Distance Diesel Av. Lubrica Mainen Labour

tpts trip per covered cost per nt cost ence cost per
Diesal
month per month per cost per month
cons.
month to month( month
(Rs Per trip
ropar Rs180/lt
33.57/ltr)
( 240 km) (ltrs) r)

1. 14 3360 40330.30 85 1080 6500 13500

2. 14 3360 41358.54 88 1100 7500 13400

3. 13 3120 39276.90 85 1150 6500 13000

4. 12 2880 36255.60 90 1100 6300 12500

5. 10 2400 29205.90 87 1080 6000 11000

6. 09 2160 26587.44 88 1100 6000 10600

7. 11 2640 33234.30 90 1150 6600 12000

8. 13 3120 39276.90 90 1100 7200 11000

9. 12 2880 35449.30 88 1080 7000 11500

10. 12 2880 35047.08 87 1080 6800 11000

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No. of Tax Average Model Install Total Total Expens Rate Friegh
tpts and depreci- ment cost load es per -t per
insuran- tion per per per in a MT month
-ce per month mont- month mon /Km/M
month -h -th T
(appx)
acc. (MT)
to
model

1. 2780 10500 2006 21000 89000 196 454 455 453

2. 2780 10700 2006 20500 95000 210 453 454 453

3. 2780 11500 2007 23500 90000 198 455 457 453

4. 2780 10400 2005 19500 88000 193 456 458 453

5. 2780 10900 2007 23500 84500 185 457 459 453

6. 2780 10700 2005 19000 76700 169 454 455 453

7. 2780 11500 2007 24000 88000 195 452 454 453

8. 2780 10700 2006 20000 92000 202 455 456 453

9. 2780 10700 2006 21000 95000 210 453 455 453

10. 2780 10700 2006 20500 10000 220 455 457 453

Optimum Cost should be- 456 MT

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So in the following table we find that what are the monthly expenses of the transporters
when they loaded clinker in their trip. So from that following calculations we find that the
optimum cost for the transporters when they loaded clinker is 456 MT.So all the
expenses are mentioned in the questionnaire which occurred by the transporters on
their trucks.

Some annual details of expenditures of truck operators of himachal Pradesh

Darlaghat ,Distt.Solan

Liabilities of the operators

1. Tokan tax = Rs 2500/-

2. Goods tax = Rs 4840/-

3. Route Permit = Rs 1945/-

4. N.P. = Rs 13,500/-

5. Insurance = Rs 22,209/-

6. Counter sign of Haryana = Rs 5000/-

7. Counter Sign of Panjab = Rs 6000/-

8. H.P. Permit = Rs 500/-

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So,Total cost per Km of the Transporter = Total Expenses / total

distance

No. of
Per Km No.of Per Km No. of Per Km cost
transporter
Cost transporter cost transporters
s s

1. 26 5. 27 9. 29

2. 28 6. 26 10. 27

3. 29 7. 29 Av. Per Km cost 27.50 (appx)

4. 28 8. 26

Views of Transporters for Cement

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No. of Cement Distance Diesel Diesel Lubricant Mainenen Labour

cons.
tpts trip per covered cost acc cost per ce cost cost per
Per
month per to per month( month(Rs per month month
month to month 180/ltr)
different
(Rs
-2
33.57/ltr)
stations.

1. 14 3000 93996 2800 1080 7000 15000

2. 14 2900 87200 2600 1100 7500 14000

3. 13 2800 83900 2500 1150 6500 13000

4. 12 2700 83925 2400 1100 6300 12500

5. 10 2600 77211 2300 1080 6000 11000

6. 09 2500 73854 2200 1100 6000 10600

7. 11 2650 77211 2300 1150 6600 12000

8. 13 2850 67140 2000 1100 7200 12500

9. 12 2900 63787 1900 1080 7000 11500

10. 12 2800 70500 2100 1080 6800 12000

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No. of Tax Average Model Install Total Per Km cost

tpts and depreci- ment cost per
insuran- tion per per month
-ce per month mont-
(appx)
month -h
acc.
to
model

1. 2240 11000 2006 21400 160000 54

2. 2500 10700 2006 20500 155000 52

3. 2240 11500 2007 23500 150000 54

4. 2780 10400 2005 19500 147000 55

5. 2780 10900 2007 23500 144000 56

6. 2240 10700 2005 19000 143000 57

7. 2500 11500 2007 24000 148000 56

8. 2780 105700 2006 20000 150000 58

9. 2780 10700 2006 21000 152000 57

10. 2780 10700 2006 20500 155000 56

Av.Cement cost Per Km = Rs 56/Km

So we find that the per Km cost for the cement should be Rs 56/ Km.

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Chepter-5

LIMITATIONS

1. The company is not willing to disclose all its facts regarding operation strategies
applicable in the organization.

2. The scope of research is limited only to ACL.

3. Due to limited resources my research is confined to a limited scope.

4. The respondents give not proper response due to pressure of work load.

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Chepter-6

CONCLUTION

ACL is Fast growing enterprise. A brief Study of the project gives the
conclution that the optimum per km cost for clinker is Rs 28 approximately and for
cement it should be Rs 56.So according to the survey done by me this should be the
optimum level which should be helpful to both Ambuja Cement Company And for the
transporters.

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REFERENCES

• R C Sharma , Krishan Mohan , “Business Correspondence and report

Writing’’ , Second edition , Tata Magraw Hill

• www.ambujacement.com

Sales And Distribution Mgt Mr.Himesh Janartha

(Deputy manager
copmmercial )

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Recommendation

1. More meetings with the transporters.

2. Try to improve the quality of product so that their is more demand for the
transporters so as they can load their trucks .

3. Reduce the price set according to competitotors.

4. Reduce the price of the fuel so that so that the transporters get the good
income.

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QUESTIONNAIRE FOR OPTIMUM COST OF TRANSPORTATION

This questionnaire is the part of research work conducted by Pradeep Kumar, a

student of MBA at Lovely professional University (Jalandhar). I affirm that the answers
given by the respondent will be used for any other purpose except this research work.

Name: ……………………………………………………………………

Address: ………………………………………………………………………

CEMENT TRIP/ MONTH ………………………………………..,

LOAD OF CEMENT IN A TRIP ………………………………………. ,

LOAD OF RAW MATERIAL IN ATRIP …………………………………….....,

LOAD PER TRIP .......………………………………..,

TOTAL LOAD IN A MONTH ………………………………………. ,

DISTANCE PER TRIP ……………………………………….

, DISTANCE COVERED PER MONTH …………………………………………,

(2) DIESEL

DIESEL COST …………………………………………,

BOTH SIDED LOADED ………………………………………….,

ONE SIDE EMPTY …………………………………………,

AVERAGE CONS. PER TRIP ………………………………………,

DIESEL COST PER MONTH ……………………………………….,

(3) LUBRICANT

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ENGINE OIL CONSUMPTION (LITTER) ……………………………,

TOTAL ENGINE OIL CONSUMPTION/ANNUM ………………………………,

RATE/L (Rs) ……………………………….,

OIL COST PER MONTH (Rs) ………………………………..,

(4) TYRE

Exp. In 1st year

NEW TYRE ……………………………………………………,
1st RETREAD ………………………………,
2nd RETREAD …………………………………………,
3rd RETREAD …………………………......., TOTAL …………………..,
Average cost of 5 year ……………………………………,

(5) MAINTENANCE

PASSING YEARLY ……………………………………..,

COST OF ENGINE OVERHAULING ………….…………………………,
ENGINE O/H PER ANNUM …………………………,
SPARE PARTS PER ANNUM …………………………….,
TOTAL COST PER ANNUM ……………………………….,
MAINTENANCE COST PER MONTH ………………………………,
(6) LABOUR COST

DRIVER SALARY …………………………………,

CONDUCTOR SALARY ………………………………..,
TRIP EXPENSES ………………………………..,
MISC. EXPENSES ……………………………….,.
LABOUR COST / MONTH ……………………………..,

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(7) TAXES AND INSURANCE

ACC. TO MODEL INSURANCE PER YEAR …………………………….,

COUNTERSIGNED PERMIT ……………………………….,
GOODS TAX ………………….............., TOKAN TAX …………………………,
H.P. TAX PER ANNUM ………………………………,
TOTAL ………………………………,
TAX AND INSURANCE / MONTH …………………………….,

(8) DEPRECIATION

Chassis rate …………………………,

Body ……………………………,
TOTAL ……………………………,
RATE OF DEPRECIATION
1st year ………………………………., 2nd year ……………………,
3rd year ……………………………….., 4th year ……………………….,
5th year …………………………………,
Average Depreciation per ANNUM (Rs) …………………………,
AVERAGE PER MONTH …………………………,
(9) INTEREST

CHASSIS COST ………………………………..,

BODY …………………………………,
TOTAL …………………………………,.
RATE OF INTEREST ………………………………….,
INTREST PER ANNUM ….……………………………..,

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(10) TOTAL

TOTAL COST / MONTH …………………………..,

EXPENSES/MT ……………………………,
RATE ……………………………,
FREIGHT RATE/KM/MT …..………………………,

Signature

AMBUJA CEMENTS LTD