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Indira Gandhi National Open University Project Report Sample On MBA OPERATION At
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PROJECT REPORT
ON
SUBMITTED BY
NAME: ……………………
UNDER GUIDANCE OF
……………………………..
In
Operation Management
Maidan Garhi
This is to certify that the project titled “ROLE OF SUPPLY CHAIN MANAGEMENT & INTEGRATION
FOR NEXT GENERATION CONSTRUCTION INDUSTRY AT ESSAR, GUJARAT” is an original
work of the Student and is being submitted SUMEET KUMAR MAISURIA in partial fulfillment for the
award of the “MASTER OF BUSINESS ADMINISTRATION (OPERATION MANAGEMENT)” degree
of INDIRA GANDHI NATIONAL OPEN UNIVERSITY. This report has not been submitted earlier either
to this University or to any other University/Institution for the fulfillment of the requirement of a course of
study.
With Candor and Pleasure I take opportunity to express my sincere thanks and obligation to my esteemed
guide ………………………. It is because of his able and mature guidance and co operation without which it
would not have been possible for me to complete my project.
It is my pleasant duty to thank all the staff member of the computer center who never hesitated me from time
during the project.
Finally, I gratefully acknowledge the support, encouragement & patience of my family, and as always, nothing
in my life would be possible without God, Thank You!
NAME:……………………..
I hereby declare that this project work titled “ROLE OF SUPPLY CHAIN MANAGEMENT &
INTEGRATION FOR NEXT GENERATION CONSTRUCTION INDUSTRY AT ESSAR,
GUJARAT” is my original work and no part of it has been submitted for any other degree purpose or
published in any other from till date.
NAME:………………………
TABLE OF CONTENT
CHAPTER CONTENTS
Certificate of Originality
Acknowledgement
Declaration
Title of the project
1 Introduction
Company Overview
2 Review of Literature
3 Objectives of the study
4 Research Methodology
5 Data Analysis & Interpretation
6 Findings and Recommendation
7 Conclusion and Limitation
References
Questionnaire
Supply chain management is extremely current due to its success in other industries and therefore considered
to be the future in construction industry. Supply chain management has been in use before the recent hype in
the construction industry. Supply chain management (SCM) is a concept that has flourished in manufacturing,
originating from Just-In-Time (JIT) production and logistics. Today, SCM represents an autonomous
managerial concept, although still largely dominated by logistics. SCM endeavors to observe the entire scope
of the supply chain. All issues are viewed and resolved in a supply chain perspective, taking into account the
interdependency in the supply chain. SCM offers a methodology to relieve the myopic control in the supply
chain that has been reinforcing waste and problems.
Strategy supply chain can be considered as comprising the following key components.
1. Sourcing strategy
2. Distribution strategy
3. Inventory strategy
5. Integration strategy
Sourcing Strategy–
Not many organizations go for in-house manufacturing .They rely on sourcing and developing vendors with
elaborate systems to check and control quality. Even firms which decide on in- house manufacturing often do
not go for manufacturing full range of products to meet total market demand but decide on partial sourcing.
Make-and-buy decisions make a significant impact on the cost structure of a company’s products.
Manufacturing Management –
This functional area decides such issues as to how production should be organized and managed. Traditionally
the production planning and control systems have been designed to maximize efficiency of labor and
utilization of machines. These considerations are no longer adequate. In a customer focused business world,
production processes have to optimize balance between satisfaction and efficiency.
More-or-Buy Decisions-
Traditional approaches on make-or-buy decision have considered such factors as cost of in-house
manufacturing. Cost of sourced supplies. Labor cost changes (for reasons of buy decision, sometimes in-house
labour become idle), recovery of overheads, underutilized capacity in plant and machinery, transport
interruptions, etc. It now also calls for considerations of faster deliveries, easy access for service, repairs and
replacements, and customer preferences.
Capacity Management-
This calls for decision to locate plants for in-house processing and suppliers and to fix capacities for both
plants and suppliers. Traditionally, the decision on location of plants were taken based on consideration such
as cost of land, government subsidies. Cost of power, availability of labour and other manpower, government
concessions on sales tax and other statutory levies, industrial relations, etc. Many of these considerations are
equally valid today. But more important considerations have emerged. Proximity to customers, costs of
distribution, supply channel infrastructure availability, access to service facilities, and access to various modes
of transport network, access to IT are the new emerging considerations.
Distribution Strategy-
Evans and Danks (2008) define it as the ‘linkage between the firm’s customers and the sources of its products
or services that the firm provides to the marks place. Strategy decision is not only important as it involves
consideration of distribution cost which form a significant percentage of total marketing costs. But it also calls
for a long-term commitment to certain type of costs associated with a channel of distribution. The distribution
strategy has three elements.
Distribution Strategy
Supply Chain Configuration
Channel Selection
Distribution Planning
Figure -4 Factors of Distribution Strategy
Channel Selection –
A wide choice of Channels is available. These include dealers, manufacturers, stockiest, wholesalers,
distribution, and currently, World Wide Web, etc. Choice of an appropriate channel depends on the products or
services to be marketed, the volume involved the geographical locations to be covered and the long term
business policy of the firm in carrying out marketing functions and exercising controls. Choice of a channel is
important as it can directly influence the level of customer service.
A supply chain has a number of participants. Sources of supplies, storage or stocking stations, and distribution
channels till he supplies reach to end-customer constitute some of the major participants. Decision on
alternatives such as number of participants and their locations have an important bearing on the efficacy of the
organization. Supply chain configuration all for determining numbers and location of each of the participants.
It calls for specifying the role of each of the participants. The answers to these questions will take into
customers and their geographic locations, cost of transportation, distribution so that supplies reach the
destinations on time.
Distribution Planning-
The supplies can be carried through a wide variety of transportation choices. A faster transportation not only
helps to achieve a higher level of customer satisfaction in making the supplies available on time but also helps
to increase the sales by seizing business opportunities, when there is a sudden rise in demand. To meet these
objectives many corporations tend own their own fleet of transport and major factor in a supply chain system.
This factor, therefore, seeks to establish the transport mode capacity, location, routing and the schedules of
distribution so the supplies reach the destinations on time.
Inventory Strategy-
This constitutes the core of SCM. The major costs of a supply chain, the level of customer satisfaction, the
business growth (or fall) are largely influenced by the inventory strategy. There are several issues which are at
conflict with each other and are required to be resolved. Higher inventory at several distribution points may,
for example, helps in making the goods easily available to customers and result in growth of sales but this will
simultaneously increase costs and bring down revenues .Inventory strategy can be considered as comprising
three elements.
Demand Forecasting-
This calls for determination of the demand of the products for the period considered. Many products in the
market have s seasonal demand which is governed by factors such as festivals, weather (seasons), etc. Many
other follow regular cycle. There are products which find market. When there is scarcity of alternatives.
Demand planning is needed as it enables the company to organize its sourcing and stocking policies. The
economics of a total system can go haywire if demand planning finally finds no resemblance to the actual
market conditions. On the other hand an accurate demand forecast will result in totally smooth operations. A
number of forecasting tools are available to carry out demand planning in a systematic manner.
Inventory Planning-
Once the demand has been forecast, the organization is called upon to determine levels of production to
develop an inventory policy. The latter includes fixing of levels of inventory such as minimum stock,
maximum levels of stocks reorder levels, lead time for procurement order level quantities, etc. Inventory
planning also includes setting up of procedures and fixing time schedules for monitoring the inventories and
exercising controls. Inventory planning is required to be carried at all the channels (stock points) of the supply
chain system. In a supply chain system costs of inventory constitute a major overhead. Customer satisfaction
on the other hand exacts delivery of goods from ready stock.
Adequate stocking facilities are needed for keeping stocks at each of the channel stock stations. The storing
facilities should be sufficient to carry the inventory in safe conditions and should be equipped with handling
facilities for easy and quick receipts and issues. Besides, the storage facilities should be situated close to the
rail/road heads so as to minimize the costs of transportation. Proximity to distribution channels is also
desirable as it will reduce the time to carry stock to the sale counters.
ERP
Orders, Items, Routing….
Scheduler
Completions, Materials, Used, Lots, Hours…
Manufacturing Orders, Dispatch Lists….
Execution
Figure-6 Supply Chain Scheduling and Execution Model
Legacy System
ERP
Materials plan, Production Plan
Inventory, Bills, Forecast. Customer Order
Planner
Latest Build Schedule
Constrained Plan
Scheduler
State of Execution on the Shop Floor
Detailed Resource Dispatch List
Execution
Definition
There seems to be a universal agreement on what a supply chain is. Jaya shankar et al. defines a supply chain
to be a network of autonomous or semi-autonomous business entities collectively responsible for procurement,
manufacturing, and distribution activities associated with one or more families of related products.
A supply chain is a network of facilities that procure raw materials, transform them into intermediate
goods and then final products, and deliver the products to customers through a distribution system.
A supply chain is a network of facilities and distribution options that performs the functions of
procurement of materials, transformation of these materials into intermediate and finished products,
and the distribution of these finished products to customers.
The two middle boxes in the lower row of Figure delivery reliability, and delivery times, are both aspects
of customer service, which is highly dependent on the first box, flexibility,and on the last box, inventory.
On the strategic level long term decisions are made. According to Ganeshan and Harrison], these are related to
location, production, inventory, and transportation. Location decisions are concerned with the size, number,
and geographic location of the supply chain entities, such as plants, inventories, or distribution centers. The
production decisions are meant to determine which products to produce, where to produce them, which
suppliers to use, from which plants to supply distribution centers, and so on. Inventory decisions are concerned
with the way of managing inventories throughout the supply chain. Transport decisions are made on the modes
of transport to use.
Decisions made on the strategic level are of course interrelated. For example decisions on mode of transport
are influenced by decisions on geographical placement of plants and warehouses, and inventory policies are
influenced by choice of suppliers and production locations. Modeling and simulation is frequently used for
analyzing these interrelations, and the impact of making strategic level changes in the supply chain.
On the tactical level medium term decisions are made, such as weekly demand forecasts, distribution and
transportation plan, production planning, and materials requirement planning. The operational level of supply
chain management is concerned with the very short term decisions made from day to day. The border between
the tactical and operational levels is vague. Often no distinction is made, as will be the case in this thesis.
If your system is not performing up to this potential, be sure you have implemented each of the following
characteristics of good inventory management:
1. Protect your company against theft – Make sure that the only people in
your warehouse belong in your warehouse. Pilferage is a larger problem
than most distributors realize.
3. Assign and use bin locations – Assign primary and surplus bin locations
for every stocked item. All picking and receiving documents should list
the primary bin location (in either characters or a bar code). With correct
bin locations on documents, order picking is probabl y the least
complicated job in your warehouse. Assign inexperienced people to this
task and your most experienced warehouse workers to receiving inventory
and stock management.
8. Ensure that stock balances are accurate and will remain accurate –
Implement a comprehensive cycle counting program. A good cycle
counting program can replace your traditional year -end physical
inventory.
1. Minimum/Maximum quantities
5. Preseason buys
ABOUT LOGISTICS:
Logistics is the art and science of managing and controlling the flow of goods, energy, information and other
resources like products, services, and people, from the source of production to the marketplace. It is difficult to
accomplish any marketing or manufacturing without logistical support. It involves the integration of
information, transportation, inventory, warehousing, material handling, and packaging. The operating
responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished
inventories where required at the lowest cost possible.
1. Facility structure,
2. Transportation,
3. Inventory,
Facility Structure-
Facilities location
Land cost generally Optimal location of
decisions are not Congestion pollution
not high facilities
professionally taken
Inventory Control-
Strengths Weakness Opportunities Threats
Indigenous supply of Lead time
material possible of Excessive lead time Shortages
Reduction
most case
Materials cost a major
factor
Uncertain Vendors Source development Black-marketing
Knowledge base
Excess variety Vendor rating
exists
Too much dead stock
Low inventory turnover
ratio
Demand uncertainties
Record keeping poor
quality – assurance
problems inflationary
pressures.
Warehouse is the location to or from which the inventory is transported. Warehouses are the key driver of
supply chain performance in terms of responsiveness and efficiency. Before deciding the location of
Warehouses we must consider the following points:
INVENTORY MANAGEMENT
OPERATIONS MANAGEMENT:
COMPANY PROFILE:
CHAPTER – 2
REVIEW OF LITERATURE
CHAPTER – 3
CHAPTER – 4
RESEARCH METHODOLOGY
RESEARCH DESIGN:
The first step in developing any sample design is to clearly define the set of objects, as my study is
exploratory, the sampling design includes three decisions i.e. sampling unit, Sample size & Sampling
procedure.
The data was collected using both by primary data collection methods as well as secondary sources.
The base on which a study rests is the information that is embedded in it. The data for this study was obtained
as a blend of both Secondary and Primary sources.
PRIMARY DATA: Most of the information was gathered through primary source. The methods that were
collected primary data are:
Structured Interview
Internet sites
Universe:
TOOL OF ANALYSIS:
Data collection was done through questionnaire. The Ms-word & Ms-Excel software was used to analyze the
data. Different types of graphs & Charts were used to interpretation the findings diagrammatically. They are:
Pie Charts
Bar Graphs
CHAPTER – 5
Q1. How successful do you think is your company in managing its supply chain in general?
As shown by the pie chart, 40% of respondent Successful think is your company in managing its supply chain
in general, 28% of respondent somewhat successful, 18% of respondent Very successful, 8% not successful
and 6% of not successful at all.
As shown by the graph, 90% of respondent think company has a separate logistics or Inventory department,
10% of respondent not think like that.
Q3. Does your company have a clear SCM and operation strategic plan?
As shown by the graph, 94% of respondent think company has a clear SCM and operation strategic plan, 6%
of respondent not think like that.
Q4. How satisfied are you with the current inventory policy regarding SCM?
As shown by the pie chart, 56% of respondent satisfied with the current inventory policy regarding SCM, 24%
of respondent quite satisfied, 12% of respondent Very satisfied, 12% Somewhat and 6% of respondent Not at
all.
Q5. Is supply chain management having all the address of the developer branches of the company?
As shown by the graph, 78% of respondent think supply chain management having all the address of the
developer branches of the company, 22% of respondent not agrees with it.
Q6. Rate the working strategies of supply chain management department on the basis of the current
programs?
As shown by the pie chart, 48% of respondent feel good working strategies of supply chain management
department on the basis of the current programs, 30% of respondent Average, 12% of respondent Outstanding,
10% Excellent.
Q7. Is the supply chain management department is having sufficient transportation and capacity?
As shown by the graph, 92% of respondent think supply chain management department is having sufficient
transportation and capacity, and 8% of respondent think not sufficient.
Q8. Choose the right option, where the supply chain department is facing problem in taking care of the
raw material?
As shown by the pie chart, 34% of respondent feel during storage, 30% of respondent Packaging, 14% of
respondent Testing of packaging, 22% Evaluation of defective raw material.
Q9. How do you rate the delivery activity and Inventory management of the department?
As shown by the pie chart, 40% of respondent feel Good delivery activity and Inventory management of the
department, 28% of respondent Very effective, 20% of respondent Average, 12% Excellent.
Q10. Is there any case recorded by the supply chain department in which the production department
complained late delivery of raw materials?
As shown by the graph, 84% of respondent think No, and 16% of respondent think yes.
Q11. Choose the right option, where the supply chain department is facing problem in taking care of the
raw material in Essar?
As shown by the pie chart, 34% of respondent choose Testing of packaging, 26% of respondent said during
storage, 22% of respondent choose Packaging, and 18% of respondent choose Evaluation of defective raw
material.
Q12. Is there any case recorded by the supply chain department of Essar in which the production
department complained late delivery of raw materials?
As shown by the graph, 78% of respondent said No, and 22% of respondent said yes.
Q13. According to the current growth process of the Essar, which of the following needs much attention
and progress to boost the production?
As shown by the pie chart, 36% of respondent feel Tactical activities the current growth process of the Essar,
which is needs much attention and progress to boost the production, 34% of respondent said Current
programming strategies, 30% of respondent feel Operational activities.
As shown by the graph, 86% of respondent feel happy with the SCM of Essar and 14% of respondent not
happy with the SCM of Essar.
CHAPTER – 6
The findings of the study of “ROLE OF SUPPLY CHAIN MANAGEMENT & INTEGRATION FOR
NEXT GENERATION CONSTRUCTION INDUSTRY AT ESSAR, GUJARAT”.
94% of respondent think company has a clear SCM and operation strategic plan,
6% of respondent not think like th at.
56% of respondent satisfied with the current inventory policy regarding SCM,
24% of respondent quite satisfied, 12% of respondent Very satisfied, 12%
Somewhat and 6% of respondent Not at all.
78% of respondent think suppl y chain management having all t he address of the
developer branches of the company, 22% of respondent not agrees with it.
40% of respondent feel Good delivery activit y and Inventory management of the
department, 28% of respondent Very effective, 20% of respondent Average, 12%
Excellent.
36% of respondent feel Tactical activities the current growth process of the
Essar, which is needs much attention and progress to boost the production, 34%
of respondent said Current programming strategies, 30% of re spondent feel
Operational activities.
86% of respondent feel happy with the SCM of Essar and 14% of respondent not
happy with the SCM of Essar.
CHAPTER –7
CONCLUSION
LIMITATION OF THE STUDY:
As onl y single area will be surveyed or covered, it does not represent the overall
view of each field.
It is very much possible that some of the respondents may give the incorrect
information.
REFERENCES
4. COX, A., 1999. Power, Value and Suppl y Chain Management. Suppl y
Chain Management: An International journey, 4(4), pp.167 -175.
7. KELLY, J., MOR LEDGE, R., and WILKINSON, S., 2002. Best Value in
Construction. 1st ed. Oxford: Blackwell Publishing.
8. KHALFAN, M. and MCDERMOTT, P., 2007. Integrated Supply Chain –
An Example from the UK Construction Industry. The cons truction and
building research conference of the Royal Institute of Chartered Surveyor,
1(1), pp.1-13.
10.www.essar.com.
QUESTIONNAIRE
DEAR RESPONDENTS
Name : ……………………………….
Age : ……………………………….
Address : ……………………………….
Gender : ……………………………….
Designation : ……………………………….
Q1. How successful do you think is your company in managing its supply chain in general?
Not successful
Somewhat successful
Successful
Very successful
Q2. Does your company have a separate logistics or Inventory department?
Yes
NO
Q3. Does your company have a clear SCM and operation strategic plan?
Yes
NO
Q4. How satisfied are you with the current inventory policy regarding SCM?
Not at all
Somewhat
Satisfied
Quite satisfied
Very satisfied
Q5. Is supply chain management having all the address of the developer branches of the company?
Yes
NO
Q6. Rate the working strategies of supply chain management department on the basis of the current
programs?
Outstanding
Excellent
Good
Average
Q7. Is the supply chain management department is having sufficient transportation and capacity?
Yes
Not sufficient
Q8. Choose the right option, where the supply chain department is facing problem in taking care of the
raw material?
During storage
Packaging
Testing of packaging
Excellent
Very effective
Good
Average
Q10. Is there any case recorded by the supply chain department in which the production department
complained late delivery of raw materials?
Yes
No
Q11. Choose the right option, where the supply chain department is facing problem in taking care of the
raw material in Essar?
During storage
Packaging
Testing of packaging
Yes
NO
Q13. According to the current growth process of the Essar, which of the following needs much attention
and progress to boost the production?
Operational activities
Tactical activities
Yes
No