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Ambuja Cements Overview

Abhiman Bararia (33149) Shoeb Jatu (33156) Aditya Mundada (33166) Punit Rana (33173)

Case Brief
Description of the various initiatives taken
by GACL Management to improve their

Supply chain, due to which Company has


emerged as the most efficient and economic

player in industry.

About Cement Industry


Intensity for Need of SCM

Nature of Business

Profit Margin

Differential

Commodity business Scale of Operation must be high

Less

Price

Very High

STRENGTHS
High quality cement Good packaging Strong distribution network Advanced technologies Eco friendly Differentiation based on branding a commodity Focus more on creating a brand Use of retailers

OPPORTUNITIES
With increase in G.D.P. growth rate, country will need more roads ,ports , houses etc They get a chance to set up their plants at the nearest area of mines Tremendous scope for growth in realty sector Ready Mix Concrete

WEAKNESS
Need of more market expansion Need of international marketing

THREATS
Production cost increases :-due to increases in price of power ,freight ,coal, diesel etc Other cement manufacturer company i.e ACC, Birla etc

Logistics Cross Functional Approach

Warehousing

Transportation

Salient Features
Packaging Inventory Management

Order Processing System

Initiatives in SIPOC improvement


S
Inventory

P
Manufacturing Packaging O

C
Channels Transporting Ware-housing

COMPANYS STRATEGY:
Captive Infrastructure: Ports & Power Plants Retail Focus Premium pricing Transportation primarily through sea - Cheapest Mode One of the Lowest Cost Cement Produce

Logistics and cross functional approach


ILS-Logistics is successfully integrated with

organizational functions for smooth information flow along the supply chain.

Cross Functional Committee at every manufacturing unit

is responsible for efficient management of logistics.

Order Processing Systems


Information regarding orders from the point of generation to point of fulfillment by use of Wide area network (WAN), Electronic Data Exchange (EDE), Material resources Planning ( MRP).

Customer order

Paper processing

warehouse

packaging

Dispatch

Inventory check

Production planning

Inventory Management
GACL monitors inventory level with efforts of various departments. Methods which have reduced inventory cost: Online ordering: Reduction in ordering time Reduction in transaction cost Use of OBC (Overland Belt Conveyor) Buffer stock of 10-20 days based on production site.

Packaging
Use of Polypropylene packaging : Better protection of product Presentation Visibility at point of sale (POS) Use of different colors of packaging for different cement

types

Transportation
Freight cost is 18% of total cement cost.
Mode of transport Road Cost/tonne ( Rs.) 670

Railways Sea

580 190

Setting up of ports and freight handling terminals Acquisition of ships, trucks and railway siding in factory has provided flexibility Periodic route surveys to decide adequate and shortest possible routes for each destination

Warehousing
Two types, online connectivity with marketing office and production units Dumps Trans-Shipment Locations are decided on inputs by marketing team depending on Transportation Facilities, Possible Tax Factory, Availability of Packing Space and Manpower Setting up retailer network to cater to small contractors

Distribution Network
Revolutionized market by setting up a chain of retailers. Large distribution network of around 11500 outlets

Prefers dealers who dealt in other construction materials, hence single point of contact for customers.

Looking Forward
Even though price of fuel, freight and power are increasing the future of GACL is bright and its attention on retail market is increasing. It should enhance its distribution network in regions where it is not strong Indias growing population will increase demand of cement because there is no substitute for cement