24071672 final summer training report on supply chain mangement

RAJIV ACADEMY FOR TECHNOLOGY & MANAGEMENT

SUMMER TRANING PROJECT REPORT

On

A FRAMEWORK OF “SUPPLY CHAIN MANAGEMENT”

Submitted for the Partial fulfillment towards the awardof the degree in MASTER OF BUSINESS ADMINISTRATION

Of

U P Technical University, Lucknow

Submitted By Under the Guidance of

Akanksha Tripathi Dr. Vikas Jain

Roll Number: 0817370002 Department of Management

Session – 2009-10

PREFACE

In its broadest sense summer training project report is necessary to make the students of business school

familiar with the industrial environment prevailing in the world. To be competitive and work aggressive, students

need to know the policies, procedures and the trends going on in the present industrial world.

The purpose and objective of this project report is to find out the

The report is hard intends to reflect some of the basic covered under the “SUPPLY CHAIN

MANAGEMENT” of HINDALCO, EXTRUSIONS a first truly “MNC” of

India. The total aspects have been formulated and presented on the basis of ideas and information

gathered by this investigator during a shorter span of project training i.e. an important portion of the

MBA curriculum leading to an opportunity for the participant to have a practical exposure of the contents

under the topic beyond what has already been studies during the class-room interaction.

This report has been written in response to a comprehensive study, conducted on the “SUPPLY CHAIN

MANAGEMENT” of “HINDALCO INDUSTRIES LIMITED”. The report mentions and evaluates the

various aspects, pertaining to the distribution channel of the company. After a thorough analysis of the

various facts stand figures, a set of recommendations has been given at the end of the report.

Accuracy and precision has been given the prime consideration, while compiling the report, are

authoritative and authentic.

We are confident that anyone who goes through the report will learn how much we have learnt &

benefited

during this period.

H I N D A L C O I N D U S T R I E S L T D .Page 4

ACKNOWLEDGEMENT

At the onset I must bow down in reverence to the almighty that blessed us with the understanding & prevalence

that is needed in this kind of project report.

With great pleasure I express my heartiest thanks to Dr. Mahesh P Kumar (Officiating Director – RATM), Mr.

Vikas Jain (PC – M.B.A. Deptt.). I would like to extend my sincere thanks to Mr. Vikas Jain [Lecturer – Deptt.

of Management Studies], without whose unrelated support and guidance, this project would just not have been

possible. I am very thankful for his invaluable guidance, support, and affable & friendly nature. He/She guided

me at each and every stage of project.

I am equally indebted to my friends who always inspired and motivated me to do something better through out

this project.

At last I would like to extend my sincere thanks to all the respondents to whom I visited for giving their support

and valuable information, which helps me in completing my project work.

AKANKSHA TRIPATHI

M.B.A.III Sem

Roll No. 0817370002


STUDENT’S DECLARATION

I, Akanksha Tripathi, hereby declare that this work entitled A Framework of “supply chsin managment” is

the result of summer training under taken. The findings and conclusions expressed in this report are genuine,

authentic and are for academic purpose. Any resemblance to earlier research work is purely coincidental.

AKANKSHA TRIPATHI

M.B.A. VI Sem

Roll No. 0817370002

H I N D A L C O I N D U S T R I E S L T D .

TO WHOMSOEVER IT MAY CONCERN

Thi is to certify that Mr./Ms…Akanksha

Tripathi……………………………………… S/o, D/o………Ved Prakash

Tripathi………………. Roll No……0817370002….....…..……… student

of MBA III Semester (Batch 2009-10) of this institution has done

summer training project report titled A Framework of “supply chain

management”………………… …………………..”.

The project has been prepared and submitted by the above named in

partial fulfilment of the Master of Business Administration degree

Programme (MBA) as per the requirement of U. P. Technical

University, Lucknow.

Date : (Dr. Mahesh P. Kumar) Place : Mathura Officiating Director


TABLE OF CONTENTS

Preface…………………………………………………………………………...

Acknowledgement………………………………………………………………

Student’s Declaration……………..…………………………………………….

Certificate …………………….…………………………………………………

1.0 Introduction to the Topic.………………………………………………….. 00

2.0 Introduction to the Organization/Industry………………………………… 00

3.0 Objectives of the Study……………………………………………………. 00

4.0 Scope of the Study………………………………………………………… 00

5.0 Literature Review………………………………………………………...... 00

6.0 Research Methodology…………………………………………………… 00

6.1 Universe of the study…………………………….…………………… 00

6.2 Sample Size…………………………………………….………........... 00

6.3 Sampling Method…………………………………………….……….. 00

6.4 Tools for Data Collection……………………………………..………. 00

7.0 Data Analysis & Interpretation……………………………………………. 00

8.0 Findings…………………………………………………………………….. 00

9.0 Recommendations & Suggestions………………………………………. 00

10.0 Conclusion…...…………………………………………………………… 00


10.1 Limitations of the Study……………………………………………..…… 00

10.2 Scope for further research………………………………………………. 00

Bibliography…………………………………………………………………...... i

Appendix [Questionnaire]……………………………………………………... ii

LIST OF TABLE

S. No.

TABLE No.

PAGE No.

REFRENCE DETAILS

LIST OF CHARTS

S. No.

TABLE No.

PAGE No.

REFRENCE DETAILS


The Winning organizations will be those who regularly outperform competition. They have a stable

consistent strategy. A stable strategy does not mean a static strategy, rather it means following a brand

philosophy and continuous improvement in how strategy is manifested, incorporating the expected

market requirements and the customer needs.”


(…….KUMAR MANGALAM)

ABOUT

ADITYA BIRLA GROUP

CHAIRMAN: Shri Kumar Mangalam Birla

“People build company’s success; where people grow, profits grow.”

Group vision

“To become a premium conglomerate with clear business focus at each corporate level.”

Group mission

“To deliver value for our customer, shareholders, employees and society at large.”

Group Philosophy

Reset on four pillar

::Customize

:: People-size

::Strategize

::Institutionalize


Group values

::Integrity

::Speed

::Seamlessness

::Passion

INTRODUCTION TO GROUP

I.1 ADITYA BIRLA GROUP


A US $28 billion corporation with a market cap of US $31.5 billion and in the league of Fortune 500,

the Aditya Birla Group is anchored by an extraordinary force of 100,000 employees, belonging to 25

different nationalities. In India, the Group has been adjudged "The Best Employer in India and among

the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007. Over 50 per

cent of its revenues flow from its overseas operations.

The Group operates in 20 countries: India, Thailand, Laos, Indonesia, Philippines, Egypt, China,

Canada, Australia, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland,

Malaysia and Korea.

Globally the Aditya Birla Group is:

:: A metals powerhouse, among the world's most cost-efficient Aluminium and Copper producers.

Hindalco-Novelis from its fold, is a Fortune 500 company. It is the largest Aluminium rolling

company. It is one of the three biggest producers of primary Aluminium in Asia, with the largest

single location copper smelter.

:: No.1 in viscose staple fibre

:: The fourth largest producer of insulators

:: The fourth largest producer of carbon black

:: The 11th largest cement producer globally

:: Among the world's top 15 BPO companies and among India's top three

:: Among the best energy efficient fertilizer plants

In India:

:: A premier branded garments player

:: The second largest player in viscose filament yarn

:: The second largest in the chlor-alkali sector

:: Among the top five mobile telephony companies

:: A leading player in life insurance and asset management

:: Among the top three supermarket chains in the retail business


Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in

the way of the need to keep learning afresh, to keep experimenting.

Beyond business — the Adyta Birla Group is:

:: Working in 3,700 villages

:: Reaching out to seven million people annually through the Adyta Birla Centre

:: Focusing on: health care, education, sustainable livelihood, infrastructure and espousing social causes

:: Running 41 schools and 18 hospitals

Fact file

The world's largest aluminum rolling company

World leader in viscose staple fiber

One of the biggest producers of primary aluminum in Asia

Fastest-growing copper company in Asia

The Adyta Birla Group is the 11th largest cement producer in the world.

Fourth largest producer of carbon black in the world

One of the lowest-cost producers of aluminum in the world

ISO 9001:2000 and 14001 certified


ADITYA BIRLA GROUP

key products and brands Locations Capacities Country

Hindalco Industries Ltd.

Alumina Chemicals Renukoot (Uttar Pradesh),

Muri (Jharkhand), Belgaum

(Karnataka)

1,160,000 tpa India

Primary Aluminium Renukoot, Hirakud (Orissa),

*Taloja

489,000 tpa

Extrusions Renukoot, Alupuram 27,700 tpa

Rolled products Belur(West Bengal),

Taloja(Maharashtra), Renukoot,

Mauda(Maharashtra)

200,000 tpa

Wire rods Renukoot, Alupuram(Kerala) 64,400 tpa

Aluminium foil Silvassa (Dadra & Nagar Haveli),

Kalwa(Maharashtra)

11,000 tpa

Aluminium Wheels Silvassa (Dadra & Nagar Haveli) 300,000 pcs


http://www.hindalco.com/

*For Taloja recycling plant

Indal (subsidiary of Hindalco)

Foil Rolling Kollur (Andhra Pradesh) 4,000 tpa

key products and brands Locations Capacities Country

Birla Copper (Hindalco Industries Ltd.)

copper cathodes Dahej (Gujarat) 500,000 tpa India

continuous cast copper rods 97,200 tpa

Sulphuric acid 1,670,000 tpa

phosphoric acid 180,000 tpa

gold (Birla Gold) 15 mt

silver (Birla Silver) 150 mt

DAP and complexes (Birla

Balwan)

400,000 tpa

Hindalco Industries Ltd. (Aditya Birla Minerals Resources Pty. Ltd.)

copper cathodes Nifty mines 25,000 tpa Australia

copper in concentrate Mt. Gordon mines 40,000 tpa Australia

Power Mt. Gordon mines 28mw Australia


http://www.hindalco.com/

http://www.birlacopper.com/

http://hindalco.com/about_us/tapping_new_markets.htm

Key products and brands Capacities Country

Grasim Industries Ltd.

white cement Birla White 475,000 tpa India

grey cement UltraTech

Cement (formerly

Birla Plus), Birla

Super

13.12 mtpa

UltraTech Cement Ltd.

ordinary Portland cement, Portland

blast furnace slag cement, Portland

pozzolana cement and grey

Portland cement

17 mtpa

key products and brands Capacities Country

Aditya Birla Nuvo Ltd (Hi-Tech Carbon)

carbon black Birla Carbon 230,000 mtpa India

Thai Carbon Black Co. Ltd.

carbon black Birla Carbon 220,000 mtpa Thailand

Alexandria Carbon Co. S.A.E

carbon black Birla Carbon 285,000 mtpa Egypt

Liaoning Birla Carbon Co. Ltd.

carbon black Birla Carbon 55,000 mtpa China


http://www.birlacarbon.com/

http://www.birlacarbon.com/companies/liaoning_birla_carbon.htm


http://www.birlacarbon.com/companies/alexandria_carbon_black.htm


http://www.birlacarbon.com/companies/thai_carbon_black.htm


http://www.birlacarbon.com/companies/hi_tech_carbon.htm

http://www.ultratechcement.com/

http://www.birlawhite.com/

http://www.grasim.com/

key products and brands Capacities Country

Pulp


rayon grade pulp 70,000 tpa India

AV Cell Inc.

softwood / hardwood pulp 122,500 tpa Canada

AV Nackawic Inc.

dissolving pulp 189,000 tpa Canada

Fibre


viscose staple fibre (VSF) Birla Viscose 270,100 tpa India

Thai Rayon Public Company Ltd.

VSF Birla Viscose 110,000 tpa Thailand

PT Indo Bharat Rayon

VSF Birla Viscose 155,000 tpa Indonesia

Thai Acrylic Fibre

acrylic fibre Texlan 100,000 tpa Thailand

Alexandria Fiber Company, S.A.E

acrylic fibre 18,000 tpa Egypt

Yarn

Aditya Birla Nuvo Ltd.

viscose filament yarn Ray One 16,400 tpa India


http://www.adityabirlanuvo.net/

http://www.thaiacrylic.com/

http://www.thairayon.com/

http://grasim.com/

http://www.adityabirla.com/our_companies/international_companies/av_nackawic.htm

http://www.adityabirla.com/our_companies/international_companies/avcell_canada.htm

http://grasim.com/

Aditya Birla Nuvo Ltd. (Jaya Shree Textiles)

flax yarns 15,340 spindles India

worsted yarns 25,548 spindles

PT Indo Liberty Textiles

rayon yarn, polyester,

blended yarn

45,120 ring spindles Indonesia

PT Elegant Textile Industry

rayon, polyester, rayon-

polyester blended spun

yarn

168,088 spindles Indonesia

PT Sunrise Bumi Textiles

viscose rayon, polyester viscose, spun polyester,

polyester combed cotton, anti pill yarn, sewing

thread, high twist yarn, reverse twist yarn, flame

retardant yarn, rayon cotton blended yarn, micro

denier polyester rayon yarn, rayon silk yarn, slub

yarn, lycra core spun yarn

89,376 spindles Indonesia

Indo Phil Acrylic Manufacturing Corporation

high bulk acrylic dyed yarn, non-bulk acrylic dyed

yarn

3,700 mtpa Philippines

Indo Phil Textiles Mills Inc

poly viscose blended yarn, poly cotton blended

yarn, polyester yarn

13,500 mtpa Philippines

Indo Phil Cotton Mills Inc

cotton yarn 10,000 mtpa Philippines

Indo Thai Synthetics Co. Ltd.

synthetic yarns 98,568 spindles Thailand

Fabrics


http://www.sunrise-textiles.com/

http://www.eleganttextile.com/

http://www.jayashree-iril.com/


fabric - polyester, viscose, silk and wool blends 146 looms India

Uncrushables, Ice Touch, Purista, and CleanFab 18 million meters


Pure Linen and Linen

Blends

Linen Club 107 looms India

Flame Retardent Fabrics Pyroguard

Branded apparel

Aditya Birla Nuvo Ltd. (Madura Garments)

Ready-to-Wear Garments Louis Philippe,

Allen Solly

Van Heusen, Peter

England

India

Key Products and Brands Capacities Country

Indo Gulf Fertilisers Ltd.

Urea Birla Shaktiman 864,600 mt India


http://www.indo-gulf.com/

http://www.maduragarments.com/



Birla Copper (Hindalco Industries Ltd.)

DAP/NPK complexes Birla Balwan 400,000 tpa India



Caustic Soda 258,000 tpa India


Caustic Soda 82,125 tpa India

Liquid Chlorine 50,340 tpa

Hydrochloric Acid 5,475 tpa

Tanfac Industries Ltd.

Aluminium Fluoride 17,000 tpa India

Hydrofluoric Acid 17,000 tpa

Bihar Caustic and Chemicals Ltd.

Caustic Soda Lye 92,750 mt India

Liquid Chlorine 65,785 mt

Hydrochloric Acid 29,040 mt

Sodium Hypochlorite 1,800 mt

Compressed Hydrogen 17,42,400 nm3




http://www.birlacopper.com/

Aluminium chloride 12000 tpa

Captive Power Plant 30 mw

Aditya Birla Chemicals (Thailand) Ltd.

Sodium Triployphosphates,

Tetrasodium Pyrophosphate,

Sodium Hexametaphosphate,

Sodium Acid Pyrophosphate,

Monosodium Phosphate,

Disodium Phosphate,

Trisodium Phosphate,

Speciality Phosphates

Epoxy Resins (bis-a and bis-f),

Diluents, Curing Agents

and Allied Products

Sodium Sulphite, Sodium

Metabisulphite,

Sodium Bisulphite

Epichlorohydrin

Caustic Soda

Chlorine

Polyphos®

Epotec

Birlasulf-SS,

Birlasulf-SM,

Birlasol 35

Thailand

Thai Peroxide Co. Ltd.

Hydrogen Peroxide, Peracetic

Acid, Calcium Peroxide

Encare,

Ecare, Aqua-

x,

Birlox 5, Birlox

12, Ocare

15,000 mtpa Thailand


http://www.thaiperoxide.com/

http://www.adityabirlachemicals.com/

PT. Indo Raya Kimia

Carbon Disulfide 50,000 tpa Indonesia


Essel Mining & Industries Ltd

Iron and Manganese Ore 15 million tons India


Pan Century Surfactants Inc.

Fatty Acids 55000 mtpa Philippines

Fatty Alcohol 30000 mtpa

Glycerin 6500 mtpa



http://www.adityabirla.com/our_companies/international_companies/pan_century_surfactants.htm

http://www.esselmining.com/

Aditya Birla Insulators

Insulators 38,800 tpa India


PSI Data Systems Ltd. (subsidiary of Aditya Birla Nuvo Ltd.)

IT solutions (banking, finance and insurance) India


Aditya Birla Minacs Worldwide Limited (subsidiary of Aditya Birla Nuvo Ltd.)

BPO / ITES 9,089 seats India


Birla Global Finance Company Ltd.

Financial Services India

Birla Sun Life Insurance Company Ltd.

Insurance Solutions India

Birla Sun Life Asset Management Company Ltd.

Mutual Funds India

Birla Sun Life Distribution Company Ltd.


http://www.birlasunlife.com/BirlaSunlife/index.aspx



http://www.birlaglobal.com/

http://www.minacs.adityabirla.com/

http://www.psidata.com/

http://www.adityabirlainsulators.com/

Investment Planning Services India

Birla Insurance Advisory Services Ltd.

Non-Life Insurance Advisory Services India


Idea Cellular

Cellular Services Idea 21 million subscriber base India


Aditya Birla Retail Limited

Multi-Format stores 170 retail outlets India


http://www.ideacellular.com/IDEA.portal

http://www.adityabirla.com/our_companies/indian_companies/birla_insurance_advisory_service.htm

R e n u s a g a r( C P P )

B a u x i t e M i n e s( J h a r k h a n d &C h a t t i s g a r h )

S i la v a s a( F o i l s & W h e e l s )

R e n u k o o t


HINDALCO OVERVIEW

INTRODUCTION

Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group, is an industry

leader in Aluminium and copper. A metals powerhouse with a consolidated turnover in excess of US$

14 billion, Hindalco is the world's largest Aluminium rolling company and one of the biggest producers

of primary Aluminium in Asia. Its Copper

smelter is the world’s largest custom smelter at a single location.

Established in 1958, Hindalco commissioned its Aluminium facility at Renukoot in Eastern U.P. in

1962. Later acquisitions and mergers, with Indal, Birla Copper and the Nifty and Mt. Gordon copper

mines in Australia, strengthened the company's position in value-added Alumina,Aluminium and

copper products, with vertical integration through access to captive copper concentration.

In 2007, the acquisition of Novelis Inc. a world leader in Aluminium rolling and can recycling marked a

significant milestone in the history of the Aluminium industry in India. With Novelis under its fold

Hindalco ranks among the global top five Aluminium majors, as an integrated producer with low-cost

alumina and Aluminium facilities combined with high-end rolling capabilities and a global footprint in 12

countries outside India. Its combined turnover of US$ 14 billion, places it in the Fortune 500 league.

Hindalco in India enjoys a leadership position in Aluminium and Copper. The Company's Aluminium

units across the country encompass the entire gamut of operations from bauxite mining, alumina

refining, aluminium smelting to downstream rolling, extrusions, foils and alloy wheels, along with

captive power plants and coal mines. The Birla Copper unit produces copper cathodes, continuous

cast copper rods along with other by-products, including gold, silver and DAP fertilizers.

All of Hindalco's units are ISO 9001:2000, ISO 14001:2004 and OHSAS 18001 certified. The

Renukoot and Taloja units have gone a step further with an Integrated Management System (IMS),

combining ISO 9001, ISO 14001 and OHSAS 18001 into one Business Excellence Model.


The company has been accorded the Star Trading House status in India. Its aluminium metal is

accepted for delivery under the High Grade Aluminium Contract on the LME (London Metal

Exchange), while its copper quality standards are also internationally recognized and registered on the

LME with Grade “A” accreditation.

Grade “A” accreditation.

Aluminium

Hindalco’s major products include Standard and Speciality Grade Aluminas & Hydrates, Aluminium

Ingots, Billets, Wire Rods, Flat Rolled Products, Extrusions, Foil and Alloy Wheels.

The integrated facility at Renukoot, (Uttar Pradesh) houses an Alumina Refinery

and an Aluminium Smelter along with facilities for production of semi-fabricated

products, namely, Redraw Rods, Flat Rolled Products and Extrusions. The plant

is backed by a co-generation plant and a 742mw captive power plant at

Renusagar to ensure continuous and consistent supply of power for smelter and

other operations.

The aluminium alloy wheels plant is located at Silvassa (Dadra and Nagar Haveli). Hindalco was

among the first few alloy wheels companies to have obtained the ISO/TS 16949 certification to meet

the stringent standard of the automobile industry.

A strong presence across the value chain and synergies in operations has given Hindalco a major

share of the domestic value-added products market. In India, the company enjoys a leadership

position in Speciality Aluminas and Hydrates as well as in Primary Aluminium and downstream semi-

fabricated products. As a step towards expanding the market for value-added products and services,

Hindalco has launched several brands in recent years. These include the Aura Aluminium Alloy

Wheels for cars, Everlast Roofing Sheets and Freshwrapp and Freshpakk household foil for

packaging.

Hindalco's Aluminium Galleries in Mumbai and Gurgaon showcase the versatility of aluminium through

a wide range of applications.Apart from being a major player in the domestic market, Hindalco's

products are well accepted in international markets. Exports account for more than 20 per cent of total

sales of aluminium products.


Hindalco is a leading domestic player in two metals business segments — aluminium and copper.

The aluminium division's product range includes alumina chemicals, primary aluminium ingots, billets,

wire rods, rolled products, extrusions, foils and alloy wheels.

The company has a significant market share in all the segments in which it operates. It enjoys a

domestic market share of 42 per cent in primary aluminium, 63 per cent in rolled products, 20 per cent

in extrusions, 44 per cent in foils and 31 per cent in wheels.

As a step towards expanding the market for value-added products and services, Hindalco has

launched several brands in recent years, which include Aura for alloy wheels, Freshwrapp for kitchen

foil and Everlast for roofing sheets. Our exclusive showroom, The Aluminium Gallery, seeks to

promote Hindalco products to its customers. It is a platform for the company to showcase quality

products to a quality audience in an appropriate ambience. The exhibits include products like

windows, doors, furniture, ladder, roofing sheets and ceiling and cladding panels.

Hindalco's products are well received not only in the domestic market, but also in the international

market. The company's metal is accepted for delivery under the high grade aluminium contract on the

London Metal Exchange (LME). The company exports about 17 percent of its total sales volume of

aluminium.

The company's alumina chemical business is a leader in manufacturing and marketing of speciality

alumina and alumina hydrate products in the country. It has a major market share in the country.

These speciality products find wide usage in diversified industries including water treatment

chemicals, refractories, ceramics, cryolite, glass, fillers and plastics, conveyor belts and cables,

among others. The company also exports these alumina chemicals to over 30 countries covering

North America, Western Europe and the Asian region.


http://www.hindalco.com/media/features/hindalco_aluminium_gallery.htm

http://www.hindalco.com/products/primaryaluminium.htm

http://www.hindalco.com/products/alloywheels.htm

http://www.hindalco.com/products/foil_packaging.htm

http://www.hindalco.com/products/extrusions.htm

http://www.hindalco.com/products/rolled_products.htm

http://www.hindalco.com/products/primaryaluminium.htm#3



http://www.hindalco.com/products/copper.htm

http://www.hindalco.com/products/aluminium.htm

Birla Copper, Hindalco's copper division at Dahej in Gujarat, enjoys a leadership position in India,

having built over 40 per cent of the domestic market share within three years of its commissioning. It

has also made successful forays into the export markets of the Middle East, Southeast Asia, China,

Korea and Taiwan.

The copper plant produces world-class copper cathodes, continuous cast copper rods and precious

metals. Sulphuric acid, phosphoric acid, di-ammonium phosphate, other phosphatic fertilizers and

phospho-gypsum are also produced at this plant.


Some recent milestones

:: In May 2007, Novelis became a Hindalco subsidiary with the completion of the acquisition

process. The transaction makes Hindalco the world's largest aluminium rolling company and one

of the biggest producers of primary aluminium in Asia, as well as being India's leading copper

producer.

:: In May 2006, the company signed a MoU with the Government of Madhya Pradesh for setting up

a Greenfield aluminium smelter and a captive power plant. The company also entered into a joint

venture with Essar Power (M.P.) Ltd. to develop and operate coal mines at Mahan, Madhya

Pradesh. The joint venture will supply coal to the proposed aluminium smelter and power complex

in Madhya Pradesh

:: In May 2006, the company's copper mining subsidiary Aditya Birla Minerals Limited (formerly Birla

Mineral Resources Pty Ltd.) came out with an equity offering and subsequent listing on the

Australian Stock Exchange (ASX)

:: In March 2006, the company acquired an aluminium rolling mill and wire rods facility, from Asset

Reconstruction Company (India) Limited (ARCIL), belonging to Pennar Aluminium Company

Limited

:: In January 2006, the company concluded 4:1 rights issue of its shares on partly paid basis. It was

the largest ever rights issue in the history of corporate India and first one to issue partly paid

instruments

:: In September 2005, the company split its shares in ratio of 10:1 in order to enhance liquidity and

to encourage participation from retail investors

:: In April 2005, the company signed an MoUs to establish a world class integrated aluminium


project in the state of Orissa

:: In April 2005, the company entered into MoUs with the Orissa and Jharkhand governments for

setting up a Greenfield alumina facility and aluminium facility respectively, in the states

HINDALCO VISION

“To strengthen our position as a premium aluminium company sustaining

domestic leadership and global competitiveness through Innovation Quality and Value added growth”

HINDALCO MISSION

“To pursue the creation of value for our customers, shareholders, employees and society at large”

QUALITY POLICY

We, at Hindalco, shall aim to achieve and sustain excellence in all our activities.

We are committed to total customer satisfaction by providing products and services, which meet or

exceed the customer’s expectations.

Modernization of the manufacturing facilities, stress on technological innovation and training of

employees at all levels shall be a continuous process in Hindalco.

A motivated workforce with a sense of pride in the Organization shall lead us towards total Quality.


HINDALCO PRODUCT RANGE

1. 2. 3.

Primary Aluminium Alloy ingots Billets

4. 5. 6.

Aluminium sheet Wire rods sheet Slab

7. 8.

Circle Alloy wheel


-

FLAT ROLLED PRODUCTS (FRPs)

Hindalco is the world's largest Aluminium rolling company with the

acquisition of Novelis, the global leader in value-added high-end

aluminium flat rolled products and aluminium can recycling. The combined

volume of sales of flat rolled products in the world market is about 3

million tones and the market share is more than 20 per cent.

Hindalco is the largest manufacturer of the entire range of flat rolled

products in India. It enjoys nearly 60 per cent of market share and its

rolled products are widely used in various segments such as packaging,

transportation, building and construction, electrical, defense and general

engineering applications.

The company's commitment to quality and service along with its extensive infrastructure has made

Hindalco a prime source for best-selling brands. Continuous improvements in manufacturing,

processes, practices and systems ensure that customers' needs and expectations are fully met.

Efficiency and product quality are ensured by using state-of-the-art equipment and a strong research

and development set-up, supported by dedicated and motivated employees and the Oracle ERP

system. Wag staff Air Slip™ slab casting technology is used to ensure consistent quality and surface

finish of stock feed which in turn ensures quality finished products. The company's capacity in flat

rolled products at present is 2,00,000 tones per annum and new plans are being implemented to

increase the manufacturing capacity.

Of the total production of Hindalco's flat rolled products, around 40 per cent is

exported and customers in more than 50 countries are using the products.

Everlast, a Hindalco brand for aluminium roofing sheets, offers ideal and

economical solutions for all roofing and cladding needs. Colour-coated and

tiled roofing profiles are also offered by Hindalco.


Hindalco is now world

No.1 in aluminium flat

rolled products

II.1 Basically, there are three kinds of Flat Rolled Products (FRPs) which is being exported by

Hindalco i.e.,

1. Cold rolled Coils

2. Cold rolled Sheets

3. Circle

Hindalco's cold rolled coils are precision-finished to match international standards. They have good

shape, high tolerance, versatility and blemish-free surfaces. They are used in commercial and general

engineering applications such as bus bodies, cladding and fan blades.

The company meets the demands of its ever-growing clientele with continuous upgrades and process

improvement.

Hindalco's cold rolled sheets are precision-finished to match international standards for tight thickness,

tolerance, flatness and dimensional accuracy. Sound metallurgical properties for further fabrication,

anodizing characteristics and a blemish-free surface make it useful in both commercial and general

engineering applications.

ROLLED PRODUCT APPLICATIONS

Circles

:: Pressure cookers, non-stick cookware and hard anodized cookware

:: Milk cans

:: Medical cylinders

Closure stock

:: Pilfer-proof caps

:: Vial seals

:: Cream containers and caps

Cold rolled coils

:: Bus cabins and bodies

:: Insulation

:: Cladding in buildings, aluminium composite panels, false ceilings and

paneling (plain or colour-coated coils)

:: Electrical busbar ducting, flexible, transformer strips, etc

Cold rolled sheets

:: Defense

:: Industrial engineering

:: Transport — road, rail, air, marine

:: Building and construction

:: Fan blades

:: Electrical engineering


Fin stock

:: Air conditioners

:: Car radiators

:: Automobile heat exchangers

Flooring sheets / tread plates

:: Flooring for buses, trucks and rail coaches

:: Floors for loading bays, kick plates, stair treads and catwalks

Foil stock

:: Parma / confectioneries / cigarette foils

:: Foils

:: Tetra packs

Lamp cap stock

:: GLS lamps and tube lights

Litho stock

:: Offset printing plates


Pattern sheets

:: Decorative applications like interior paneling for trucks, cabins, etc

Printed Circuit Boards (PCB) entry sheets

:: Electronic circuit boards

Plates

:: Electrical bus bars and ducting

:: Tanks

:: Ships, boats (corrosion-resistant and wieldable plates)

:: Defense and industrial uses (strong alloy plates)

:: Aircrafts

Spiral Fin stock

:: Industrial heat exchangers

FOIL PACKAGING


Hindalco's foil business and packaging division delivers versatile solutions to meet the multi-pronged needs of customers

round-the-clock. Hindalco's packaging solutions and impressive range of end products are well-accepted all over the world,

thus ensuring sustainable growth in today's intensely competitive and cost-sensitive market.

Applications

Pharmaceuticals

25/30/40-micron thick, soft foil either laminated

to low density polyethylene or coated with heat

seal lacquer (HSL) for sealing as per customer

need.

20/25/30-micron thick, hard foil coated with

heat seal lacquer of varied gram mages.

Compatible with PVC.

45-micron foil, laminated on one side to 25

micron OPA and 60 micron PVC film on the

other side to meet the fast emerging Alu

packaging needs. Hindalco offers a maximum

depth of 9mm.

7/9/12-micron thick, soft foil laminated with

paper, films like polyester (PET), biaxially

oriented polypropylene (BOPP), polyethylene

(poly) and their combinations. Chiefly used for

pouches and sachets. Offered in both surface

and reverse printing.


Rolled to very fine tolerances for more closures

per ton of stock. Closure caps have high

formability, strength, low earing and printable

surfaces. Widely used for pilfer-proof bottle

caps and vial seals. Offered in both coated and

bare form.

Dairy

9-micron thick, soft foil laminated to grease-

proof paper, used for butter chiplets.

30/38/40-micron thick, soft foil coated with heat

seal laquers (HSL), compatible with PS and PP

containers. Used for cheese spreads, yoghurts

and mineral water.

7/9-micron thick, soft foil laminated to polyester

and poly with reverse printing on polyester.

House foil and semi rigid containers


Household foil is available in a range from 10

micron upwards. Widths can vary as per

market requirements. Semi rigid containers are

available in a range of sizes and shapes.

Processed food and beverages

9/12-micron thick, soft foil with printing on one

side and heat seal lacquer (HSL) coating or

polythene lamination on the other. Also offered

as a laminate of 9-micron foil with paper and

wax.

9-micron thick, soft foil with printing on foil

surface, laminated to paper and further coated

with wax. Also 7-micron foil printing on foil

surface, laminated to paper and further coated

with wax.

Polyester, foil and polythene laminates for

packing coffee.

7-micron foil with printing on foil surface and

poly laminated to paper.


Cigarette foil

Cigarette foil for inner packing of cigarettes is

offered in 7-micron thick soft foil laminated to

paper. Foil can be silver or gold lacquered in

matte of bright finish as per customer

requirements.

Personal products

Flexible laminated tubes that utilize 12/20-

micron thick soft aluminium foil laminate.

Extensively used in toothpastes, cosmetics,

ointments, cream and foodstuffs.

7/9-micron thick, soft foil laminated to board

with adhesive or polythene as per customer

demand.

9-micron thick, soft foil or BOPP and heat seal

lacquer (HSL) coated or co-polymer laminated

as per customer demand.

Surgical

The laminates have two components, top —

paper, 40 micron foil, co-polymer structure and

bottom — coated, 50 micron foil, co-polymer

structure


Heating ventilation and air conditioning (HVAC)

80-160-micron thick foil, soft or partially

annealed temper, offered bare as well as with

hydrophilic and hydrophobic coatings in blue or

gold colour. The coated foil enhances the life

of the air conditioner and improves cooling.

80-160-micron thick foil, soft or in partially

annealed temper, offered bare as well as with

hydrophilic and hydrophobic coatings in blue or

gold colour. The coated foil enhances the life

of the radiator and improves cooling.

OBJECTIVE OF STUDY

This project was undertaken to have an insight into the supply chain management of Hindalco. The

study aims to investigate the minute details of the supply chain management An analysis of the

various facts and figures has been done to arrive at logical recommendations. In short, at it can be

said that this study has two-fold objective of knowing, “what is the present supply chain

management?” And “what should be the future supply chain management?”

SIGNIFICANT AND SCOPE OF STUDY

The development in the field of transportation, communication and information on account of

globalization has found charging the expectations of the customers. It is against this backdrop the


marketing professionals need to assign due priority to the application of modern marketing principles

in particular.

An efficient “supply chain management” plays a vital role in the success of any organization. A chain

system has to be designed carefully, as it normally takes years to build and is not easily changed. This

study provides a bird’s eye view of distribution channel of Hindalco. This report would do well to the

entire person interested in learning about distribution channel of Hindalco. A general idea about

Hindalco’s presence in aluminium market is also well given by this report. After a thorough analysis of

various facts and figures, a set of recommendations, with regard to the distribution channel, has been

given in the concluding part of the report. The company would find it useful to look into the viability of

the implementation of the recommendations, once implemented, and are expected to fetch immense

benefits to the company. It is thus clear that this report would serve a variety of purposes and its

scope is very wide and open.

RESEARCH METHODOLOGY

RESEARCH DESIGN:

Exploratory research design

SAMPLE DESIGN:

Sample size 71

50 employees

10 suppliers

4 distributors

7 visiting parties

Sample technique: Interview and questionnaire

SOURCE OF DATA:

PRIMARY SOURCE:


Personal interview

Employees

Mr. Rahul paliwal (asst. sales manager)

Mr.M.C.Mahapatra (sales manager)

Distributors

Mr. Baccha Singh

Questionnaire

Employees of hindalco

SECONDARY DATA:

Annual report of HINDALCO Fy2006-07, 2007-08 and individual contra sheets of

aluminum and copper for the year 2006-07 and 2007-08.

Internet.

Induction guide.

Supply chain management:

Introduction:

Supply chain management is a process responsible for the development and Management of a firm’s

total supply system both the internal and external components. At an operational level, it includes and

expands the activities of purchasing function and the procurement process. Its major focus however is

strategic.


“Supply Chain is process from the initial raw materials’ to the ultimate consumption of the finished

product linking across supplier-user companies.”

“Value Chain is the functions within and outside a company that enables the value chain to male

products and provides services to the customer.”

Supply chain management (SCM) is the management of a network of interconnected businesses

involved in the ultimate provision of product and service packages required by end customers

(Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-

in-process inventory, and finished goods from point-of-origin to point-of-consumption (supply chain).

Supply chain management (SCM) is the oversight of materials, information, and finances as they

move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain

management involves coordinating and integrating these flows both within and among companies. It is

said that the ultimate goal of any effective supply chain management system is to reduce inventory

(with the assumption that products are available when needed). As a solution for successful supply

chain management, sophisticated software systems with Web interfaces are competing with Web-

based application service providers (ASP) who promise to provide part or all of the SCM service for

companies who rent their service.

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

• The product flow

• The information flow

• 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.

There are two main types of SCM software: planning applications and execution applications.

Planning applications use advanced algorithms to determine the best way to fill an order. Execution


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http://en.wikipedia.org/wiki/Raw_material

http://en.wikipedia.org/w/index.php?title=End_customers&action=edit&redlink=1

http://en.wikipedia.org/wiki/Service

http://en.wikipedia.org/wiki/Product

http://en.wikipedia.org/wiki/Business

http://en.wikipedia.org/wiki/Supply_chain_network

applications track the physical status of goods, the management of materials, and financial information

involving all parties.

Some SCM applications are based on open data models that support the sharing of data both inside

and outside the enterprise (this is called the extended enterprise, and includes key suppliers,

manufacturers, and end customers of a specific company). This shared data may reside in diverse

database systems, or data warehouses, at several different sites and companies.

By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's

clients), SCM applications have the potential to improve the time-to-market of products, reduce costs,

and allow all parties in the supply chain to better manage current resources and plan for future needs.

Increasing numbers of companies are turning to Web sites and Web-based applications as part of the

SCM solution. A number of major Web sites offer e-procurement marketplaces where manufacturers

can trade and even make auction bids with suppliers


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CHANNEL OBJECTIVES:

• Making smooth availability of product to the target market.

• Achievement of the best possible coverage of the target market.

• Ensuring that the consumer incurs the minimum extenuation in procuring the product.

• Safe in quality & accuracy in quantity.

• Quick services.

• Ensuring that the firm is able to carry on with its manufacturing activities, confident that the

channel will take care of the distribution job.

• Ensuring that the distribution is cost effective.

• The primary objective of channel of the distribution is to bridge the gap by resolving spatial

(geographical distance) and temporal (relating to time) discrepancies as to supply and demand.

ROLE OF CHANNEL MEMBERS:

• Channel members are not play only the role of sales the products to the customers but also

play the role as they promote the products, gathering the customer interest, complaints,

suggestion, and information to the organizations – they are work as the co-ordination between

the targeted customers & manufactures.

• Members of the marketing channel perform many key functions as follows:

• Gathering & distributing marketing research and intelligence information about actors & forces

in the marketing environment.

• Helpful in making marketing strategy.

• Developing & spreading the promotional offer of company and promote the sales activity.

• Easily make a sales contact with the customers.

• Intermediaries are taking the title to goods, so they invest the fund.

• Through the intermediaries, manufactures are made physical distribution of goods.


• Intermediaries are taking various type of risks, in the term of storing, dispatching etc.

CONTRIBUTION OF CHANNEL:

• Make available on time.

• Reduce the cost of distribution

• Save the distribution time.

• Helpful in product design & developments.

• Flow of feedback from consumer.

• Flow of money consumers to manufacture.

VARIOUS TYPES OF CHANNEL LEVELS:

While a marketers wants to sell or marketing about the products or services, requirement of design a

distribution channel to make product & services available to customers in different ways. In the

process of distribution of products, each layer of marketing intermediaries are performs some work in

bringing the product and its ownership closer to the final buyer is a channel level.

Generally two methods of distribution are in the practices.

1. DIRECT MARKETING CHANNEL

2. INDIRECT MARKETING CHANNEL

DIRECT MARKETING CHANNEL:

DMC is a marketing channel that has no intermediary levels. Manufacture or sellers are advertise their

product through the various method of advertising & make awareness about the products, then

contact to the needful customers through their salesmen, internet, e-mail, telephone or by post.


INDIRECT MARKETING CHANNEL:

IMC is a channel containing one or more intermediary levels. Manufactures or sellers are appointed

various type of marketing intermediaries in the context of nature of the products & segmentation of

markets.


MANUFACTURING

CONSUMER

TYPES OF CHANNEL MEMBERS

C & F AGENTS:

It means clearing & forwarding agents. They are responsible for storage & transportation of the

company’s products and its distribution to the distributor and some time retailers.

DISTRIBUTORS:

A distributor is usually appointed by the company and does not sell its competitor’s products. He can

also be a distributor of many products of the same company. A distributor is responsible for ensuring

that his company’s product is available at the retail stores. The distributor is very much an extension of

the company as he ensures that the market is properly served. A company has direct control over the

distributors.

Some of the following type of wholesalers:

MERCHANT WHOLESALERS:

• Purchase and resell merchandise

• He has title to merchandise.

• He provides wide range of services.

FULL SERVICE WHOLESALERS:

• Perform full range of distribution services.

• Provide trade credit; offer promotion assistance, personal sale force, and communication

of information.

• Provide installation and services.


RACK JOBBER:

• Deals with highly promoted items.

• Furnishes rack and shelves, price the goods, keep them fresh, set up point of purchase

displays.

• Sell on consignment.

• Provide services as delivery, shelving, and inventories caring.

LIMITED FUNCTIONS WHOLESALE

Not provide credit, marketing research information and merchandising assistance.

MERCANDISING AGENTS & BROKERS:

They usually perform fewer services than merchant wholesalers do. Merchandising agents

and brokers do not take title to product but negotiate sales for manufacture, they represent.

MANUFACTURER’S AGENTS

• They are free to work for several manufactures.

• They carry non-competitive, complementary products in exclusive territories.

• They do not provide credit facility but at times store and deliver products.

• Also provide research aid and promotion support.

BROKERS:

• To bring buyer and seller together

• To assist in negotiation.

• They have not title to goods.

• But they provide the facility of financing.


COMMISSION MERCHANTS

• Received goods on consignment.

• They have not title to goods.

• To accumulate them from local markets & arrange for their sales.

• Offer credit & storage goods facility.

• To provide sales force & research aid.

• They do not normally promote the goods.

MANUFACTURER’S SALES FACILITIES

• Established by manufacture.

• It is separate from manufacturing operations.

• It’s performing the wholesaling function himself. Generally used in industrial customers.

Types of manufacturer’s sales facilities:

MANUFACTURER’S SALES BRANCHES

• Carry inventory Promote

• the sales activities

• Sell to retail outlet.

MANUFACTURER’S OFFICE (Regional Sales Office)

• It does not carry inventory

• Perform market research, demand forecasting, etc.

• Collect orders from customers.

• Make delivery to customers from manufacturing point

• Collection of payments.

• Dispose all the disputes or claims.Create better relationship.



MANUFACTURER

DEPOTS OR WARE HOUSES CLEARING & FORWARDING AGENTS

DISTRIBUTERS OR WHOLE

SALERS

MERCHANT WHOLESALERS

MANUFACTURER’S SALES FACILITIES

MERCANDISING AGENTS OR BROKERS

Manufacturer’s Agents

Brokers

Commission Merchants

STEP-1


Full Service

Wholesalers

Rack Jobbers

Limited Function

Wholesaler

Manufacturer’s Sales Branch

Regional Sales office

Identify Target Consumers

Determining Consumer Buying Habits For The Types Of Goods

STEP-2

STEP-3

STEP-4

STEP-5

CHANNEL SELECTION PROCESS

EVALUTION OF THE DISTRIBUTION ENVIRONMENT:


Locate Potential Customers

Pinpoint Channel Alternative

Evaluate Channel Alternative

Select Channel Members

Selection of channel model has to be necessarily taking into account the distribution environment

obtaining in the country/ region and in the specific business in which the firm is engaged.

A firm has to evaluate the vital features of the distribution environment and ensures that the channel

model to be adopted is compatible with them. Distribution environment in the border sense includes

the legal environment as well in so far as its implications and distribution are concerned.

EVALUTION OF COMPETITOR’S CHANNEL PARTERNS

The firm should also study the competitors’ channel patterns before deciding its channel. While the

firm may not necessarily follow the competitors it will be worthwhile for the firm to analyze in depth the

plus and minus of the channel patterns adopted by each of the major competitors.

EVALUTION OF COMPANY RESOURCES AND MATCHING THE CHANNEL TO THE

RESOURCES:

On the other hand firm with larger resources and large size marketing operation will be in a position to

go in for highly intensive distribution committing a good deal of resources to the distribution task.

IDENTIFICATION OF ALTERNATIVES CHANNEL & SELECTION OF THE ONE THAT SUITS THE

FIRM BEST:

Two important considerations are cost and efficiency. Often though not necessarily they are directly

proportional. The channel


that its efficient but relatively less expensive has to be chosen. Two types of evaluations an economic

evaluation and a conceptual evaluation may be necessary. The firm should also examine whether the

channel member s in the desire alternatives would be willing to work enthusiastically for the firm and

the product.

ANALYSING THE PRODUCT CHARACTERSTICS AND LINKING CHANNEL TO THE PRODUCT:

The firm should analyze the characteristics of the product and choose the channel designee that is

most suited to the product. Within each of these broad categories of product channel choice can vary

in relation to specific products/product types. The products futures, after all changes in a graded

manner as on move through the spectrum from the simplest consumer soft to the most complex

among industrial equipment.

NOTES:

Consumer products Vs Industrial products.

The case of industrial products.

The product must have a sizable customer base.

It must be standardized to a reasonable extent.

It must be stock able items.

The unite value should not be too high.

It should not be complex.

Need for specialized distributor must be appreciated; after considering all such factors, if a given

industrial product lends itself for marketing through distributors, it must still remembered that;

As a general rule industrial products require specialized distributor and entrusting them with the

general-purpose (consumer product) distributors does not produce the best result.

Different industrial products need different types of distributors.

Establish relationship and use problem-solving techniques for prevention of crisis and

preventing customer dissatisfaction.


Gather quality intelligence on customer dissatisfaction and provide this information to

management.

ON TIME DELIVERY

Consumer will be happy, if the material is delivered on time. OTD has come into sharper focus,

for it has become a competitive weapon in all most all industries. For example Nissan offers a

guaranteed ten-day delivery to its dealers, Caterpillar deliver replacements parts within 72

hours.99.7% of time

OTD customer satisfaction gap has three components

Calibration Gap

Operations Gap

Organization Gap

CALIBRATION GAP:

The customer may measure OTD in different manner as copier to the supplier. It may so happen that

the supplier may measure OTD by product category but the buyer may measure it in terms of

complete order. The customer may measure OTD in terms of the initial order date whereas then

supplier may measure it from a negotiated date.

OPERATION GAP:

Businesses that face variability from one manufacturing phase to another or from operations to ware

house normally have an operations gap. Operations gap can also result from too many stages in

production process, too many supplier or too many people involved in order filling.


ORGANISATION GAP:

If people do not have incentives to improve OTD it will probably result into organization gap. In other

words organization gap result from the priority accorded to OTD.

Marketing Head office (Renukoot)

EAST WEST NORTH SOUTH

Vice-President Vice-President Vice-President Vice-president


Extrusions Rolled Primary

Sales Manager (Territory Manager)

ADVANTAGES

• Cost effective

• Geographical area oriented.

• Focus on all products simultaneously.

DIS ADVANTAGES



• Product promotion scheme is not applicable.

• Lack of information about a particular product.

• Over work load.

• No more time & scope for a particular product.

• Consumer satisfaction is not appropriate.

The above old structure was not taking much advantage of the new global market. Analysis of the

advantage and disadvantage of the regional based marketing strategy, it is not suitable in modern

marketing specification era. So that, in 2003 company decided to go for opting the new marketing

strategy based on product specification. For this the company transferred its marketing head office

from Renukoot to Mumbai.

The new marketing strategy structure is as follows:-


MARKETING STRUCTURE

CHIEF MARKETING

OFFICER

PRODUCT HEAD PRIMARY

METAL

PRODUCT HEAD EXTRUSION

PRODUCT HEAD ROLLED

REGIONAL MANAGER (NORTH)

TERITORRY MANAGERS

CUSTOMER SUPPORT STAFFS

2

REGIONAL MANAGER (SOUTH)

REGIONAL MANAGER

(WEST)

REGIONAL MANAGER

(EAST)

Business Finance Manager

TERITORRY MANAGERS

TERITORRY MANAGERS

TERITORRY MANAGERS

CUSTOMERSUPPORT STAFFS



Note: - Organizational structure of primary metal and rolled products are similar to Extrusions.

ADVANTAGES


• It’s product based..

• Emphasis on more customer satisfactions.

• Helpful to increasing the sales performance of various products of product line.

• Helpful to production processes to deliver the products.

• Accumulation of small customers.

• Provide quick service to customers.

• Enhance the sales promotion.

DISADVANTAGES

• Cost ineffective.

• More men power required.

MARKET SEGMENTATION OF HINDALCO

The market for Aluminium products in India is very widespread

• Geographically

• By diversified of end user

Further, there are a large number of small and medium consumers and a select a few large

consumers. The smallest consumer would be consuming as little as 1MT/Month. However, the largest

numbers of Hindalco’s customers are in the consumption range of 5-50 Mts./Month.


Aluminium is being used in around 3000 products in developed countries like USA, Japan, Canada,

etc. Whereas India, only around 350 products find use in aluminium. Moreover, the per capita

consumption of aluminium in the country is very low (1.1 kg/year).

Hence there is large potential for introducing the new uses and the increasing the consumption. As a

strategy therefore, Hindalco decided to cater to as many consumers as possible. Their distribution

system therefore, is designed to the object.

Hindalco manufacture the products with very specification as desired by the various customers.

Hindalco’s market may be segmented in the following manner.

(A)MARKET SEGMENTATION BASED ON THE PRODUCT GROUP

On the basis of product groups, Hindalco market may be segmented in the following manner

• PRIMARY PRODUCTS

• Ingots

• Wire rods

• Billets

• ROLLED PRODUCTS

• Sheets

• Chequered sheets

• Roofing sheets

• Coils

• Hot Rolling plates

• Circles

• EXTRUDED PRODUCTS

• General solid sectionsH I N D A L C O I N D U S T R I E S L T D .

Page 4

• Tubings

• Structurals

• Architecturals

• Mouldings

• FOIL

• Cable wrap stock

• Light gauge Foil

• Bare & Coated Fin stock

• Collapsible Insulation Ducts.

• ALLOY WHEELS (“AURA”)

• 12” to 18” diameters.

• MARKET SEGMENTATION ON THE BASIS OF PRODUCT WISE KEE CONSUMERS.

• PRIMARY PRODUCTS:

• Consumers:

• Value added aluminium sheet producer industries.

• Foil Producer Industries.

• Extrusion Producer Industries.

• Electricals Equipment Automobile Industries

• Furrow allows

• Smelter pot lining.


• ROLLED PRODUCTS

• Consumers:

• Foil & Packing Industries: box, cop, and container.

• Electrical Industries: bulbs, tube lights, fan blade etc

• Transportation industries

• Building & construction sectors –roofing flooring etc.

• Defense & Marine sectors.

• Transportation sectors.

• Consumer durable: flooring & roofing

• General engineering:

• Piper-proof bottle cops

• Pressure cookers, non-stick cookware.

• EXTRUDED PRODUCT

• Consumers:

• Automobile Industries

• Building & construction Sector

• Mines & defense Sector

• Transportation sectors

• Electrical sectors

• Architectural sectors

• Furniture sectors

• Households consumer durable

• FOIL

• Consumers:

• Packing sectors (printed & multi-laminated)

• Pharmaceuticals


• Dairy products

• Processed food

• Con-fectionery

• Personal care products

• Cigarettes Box rapping

• Air conditioner

• Auto mobile radiator Collapsible Insulation Ducts.

• ALLOY WHEELS

• Consumers:

• Automobile sectors

• Maruti Suzuki

• TATA Motors

• FIAT India

• Hindustan Motors

• Telco Ford India

• Hyundai India

• GM India etc

(B) MARKET SEGMENTATION BASED ON THE DEMAND PATTERN .

Based on size & frequency of order, Hindalco market may be segmented as follows:

BULK CUSTOMERS

Bulk customers are those customers, whose demand is very high and consistence. Some of the

bulk customers are Howkin, TTK, Foil Division Silwassa, Jugraj Tejraj, Bajaj Auto, etc.


SMALL & MIDIUM

Small & medium customers may be bracketed as those customers, whose demand is

comparatively low and not so consistence, some of the small customers of Hindalco included

ITI Allahabad, Defense Organization, and Dockyards etc.

(C) MARKET SEGMENTATION BASED ON THE PRIORTY:

On the basis of priority given to various orders Hindalco market may be segmented in

the following manner:

ROUTINE CUSTOMERS

Routine customers are those customers, who are regularly sourcing the company. Their orders

are processed in the normal course of working.

SPECIAL CUSTOMERS

Special customers are those customers, whose orders are for products under developments.

Since their demand is usually urgent in nature they are given priority under routine customers.

Examples: Export Customers, Government organization like Defense, Establishment etc.

continue this category.

(D) MARKET SEGMENTATION BASED ON CONSUMPTION SECTOR .

Uses of aluminium metal are everywhere. It is not easy to categorize in some particular

heads. However, we categorize in the following major sectors.

Electrical

Transportation

Building & constructions


Industrial Machinery

Packing

Consumer Durable

Other

(E) MARKET SEGMENTATION BASED ON GEOGRAPHICAL AREAS:

Aluminium consumers are spread all over the country. Different area has different type of

industries, whose are used aluminium in different quantity. Here, segment the market in

geographical areas based on consumption or demand pattern.

TRANSPORTATION FACILITY

Smooth transportation facility is available all over the country all the time. Some area is

affected by flood. Some areas are block in the case of heavy rain etc.

DISTRIBUTION PROCESS AT HINDALCO

There are different tasks involved in distribution process

These are as follows:

Order processing

Packing & Insurance, Banking, Bills,

Ware housing

Transportation

Godown sales procedure..

ORDER BOOKING:


Every purchaser has to book his order giving details which aluminium rolled products they want such

as Plain sheet, Cold rolled coils, milk can sheet, circles, etc. Purchaser should be fully disclose about

the product such as, product name, quality, quantity, technical data, mode of transportation, desire

delivery time, payment mode etc.

Technical wing of Hindalco examines their application and if necessary also make inspection of the

facing and decided quality to be offered. Thereafter, terms of payment finalized and his order is finally

booked. This order is passed to the relevant personnel’s officials with relevant details.

PRIORITY:

A priority list of all categories of consumers has been fixed in consultation with all concerned.

Consumer gets delivery in order to their priority, which is also followed by transporting agents.

ORDER PROCESSING:

Hindalco procure order either directly from the customers or through the agents/stockiest. The order

contains the name of product, quality, size, clearance etc.

After the receipt of orders from the customers or agent Company scrutinizes the order. A production

planning programmed is prepared for rolled production monthly basis. This monthly report is sent to

the respective production department i.e. rolling mills by the end of the preceding month. The

produced material is sent to the inspection and packing department.

WARE HOUSING:

Every has to store to goods while they wait to be sold. A strong function is necessary because

production and consumption cycles rarely match. Ware housing is the responsibility of warehouse in

charge in Hindalco. The work start when warehouse officials receive finished goods from production.

Hindalco warehousing in charge dispatches the material to respective customers on advice of CSMO

and follows the guidelines given to them. The guidelines are:


At warehouse:

While taking delivery from inspection & packing to ensure packages are intact & dry.

If packages are damaged or loose condition, get it repacked.

If packages are wet, do not accept it.

During loading at warehouse :

Truck’s floor should be clear and flat.

There should not be any hole or damage in the floor of the Truck’s

Floor should be covered with Tarpaulin.

Packages being loaded should be intact and dry

Proper stocking of packages should be done while loading.

Heavy packages to be kept at bottom and lighter packages over heavy.

Packages:

No vertical stoking of packages. After loading truck should be covered with tarpaulin.

During Storage:

Outdoors storage should be avoided.

Do not store packages directly on the floor, use wooden pallets.

Cheek condition of metal every few hours to ensure no water condensation.

DELIVERY OF MATERIAL:


They deliver the material as per the delivery order. Then they note down the delivered material in the

godown register. Then they send delivery report daily to zonal office.

BANKING INSURANCE BILLS & OTHER DOCUMENTS:

Hindalco enjoys the facilities of three public sector banks & private sector bank in its town Renukoot.

United Commercial Bank (UCO Bank).

State Bank of India (SBI).

Allahabad Bank.

Industrial Development Bank of India (IDBI).

Banking services at Renukoot is punctual. Banks help the company in carrying the documents to the

party. It helps in quicker payments realization.

INSURANCE

Every material is dispatched duly insured. There are two types of insurance.

Carrier Risk.

Owner Risk.

Hindalco arranges insurance facilities for its customers. If there are any damages in transportation

they will issue a damage certificate & the customer can claim its insurance company on the basis of

damage certificate.

GODOWN SALES PROCEDURE

Godown sales procedure describes the sales procedure of Hindalco’s products through its godown.

The respective zonal head exercise control over all activities related to godowns sales. This sales

procedure is followed by all the godown of company situated at Delhi, Faridabad, Chandigarh, Jaipur,

Haryana, Bangalore, Hydrabad, Calcutta Gohati, Mumbai, Silvasa, Taloja … There is a clearing agent

in the godown, which is appointed by Hindalco for the operation & maintenance of the godown.


VARIOUS MODES OF DISTRIBUTION IN HINDALCO

Hindalco emphasizes on , “Taking the product to the market” Distribution of products in Hindalco is

carried out through a network of zonal offices, Area offices, Agents, Stockiest and company operated

Depots, located through the country. A brief description is given below

1. ZONAL AND AREA OFFICES:

Hindalco has established five zonal offices, in various part of country. There is a network of area

offices, functioning under various zonal offices. Zonal offices carried out various Marketing Sales

functions of company.

They provide following functions:

Signed a contract between the zonal offices and customers, regarding to details of products such

as quality, packing, transportation, destination, etc.

Clearly mentions about the mode of payments.

Eliminating intermediaries.

Make a direct contact with the customers

.

Help the company to cater to the need of customers.

Helpful the company to earn additional profits

2. AGENTS

Agents are those persons/institutions, who provide orders to Hindalco, on behalf of the

customers. The company has appointed a number of agents, all around the country to sell the

products. They are paid commission on the generated sales. Agent being a local person/ institution

can use his contacts and influence, to generate sales in a local market. Agents function as an

important mode of distribution, as they enable the company to minimize distribution costs.


3. STOCKIESTS

Hindalco appointed a number of stockiest in various geographical areas across the country.

Certain products of the company are sold through the network. Stockiest are made conform sale for

the company.

Stockiest is free to make sell to any customer

Free to charge any price from customers

Helps the company to cover the wide geographical market.

Helpful in minimizes extra distribution setup costs.

4. DEPOTS

HINDALCO operate 15 depots in various part of the country. Depots send the various

requirements at the work office and thud, maintain suitable inventory to cater to the demand of the

market. This is providing the following advantages to the company & also the customers:

• TAX-SHIELD: In many states, state sales tax is less than the central sales tax. In these states

sales of products through depots, lead to tax saving.

• AT RANDOM DELEVERY: Emergency needs of customers full filled immediately by the depots, at

a premium price small off takes of the scattered customers can also be provided easily by the

depots.

• HELPFUL IN PRODUCTION: Depots provide a foundation to the production department, by

keeping inventory of the various products. For example, in the event of surplus stock, products can

be transferred to the various depots. Similarly, Production –Schedules can be planned with greater

accuracy, with the help of estimated requirements, sent by depots.

HOW THE DEMAND IS BEEN GENRATED


Customer to competitor


HINDALCO

PRIMARY PRODUCT

CUSTOMER

SELF

EXTRUSION

EXTRUSION ROLLED ROLLED

customer

FLOW OF LOGISTICS PROCESS


Logistics is the management of the flow of goods, information and other resources, including energy

and people, between the point of origin and the point of consumption in order to meet the

requirements of consumers (frequently, and originally, military organizations). Logistics involve the

integration of information, transportation, and inventory, warehousing, material-handling, and

packaging.

Logistics management

Logistics management is that part of the supply chain which 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. A

professional working in the field of logistics management is called a logistician.

Logistics Management Software

Software is used for logistics automation which helps the supply chain industry in automating the work

flow as well as management of the system. There is very few generalized software available in the

new market in the said topology. This is because there is no rule to generalize the system as well as

work flow even though the practice is more or less the same. Most of the commercial companies do

use one or the other custom solution.

But there is various software that is being used within the departments of logistics. Few department in

Logistics are namely, Conventional Department, Container department, Warehouse, Marine

Engineering, Heavy haulage, Etc.

The software that is used in these departments is:

Conventional department: CVT software / CTMS software

Container Trucking: CTMS software

Warehouse: WMS

In Hindalco, all the departments are interconnected with computer network system and the

software on which these department works is on the Oracle 11i platform. This software is

connected with Internet and the working in any department in any region of Hindalco will make

effect in all over India.


Business logistics

Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing

complexity of supplying one's business with materials and shipping out products in an increasingly

globalized supply chain, calling for experts in the field who are called Supply Chain Logisticians. This

can be defined as having the right item in the right quantity at the right time at the right place for the

right price and is the science of process and incorporates all industry sectors. The goal of logistics

work is to manage the fruition of project life cycles, supply chains and resultant efficiencies.

In business, logistics may have either internal focus (inbound logistics), or external focus (outbound

logistics) covering the flow and storage of materials from point of origin to point of consumption (see

supply chain management). The main functions of a qualified logistician include inventory

management, purchasing, transportation, warehousing, consultation and the organizing and planning

of these activities. Logisticians combine a professional knowledge of each of these functions so that

there is a coordination of resources in an organization. There are two fundamentally different forms of

logistics. One optimizes a steady flow of material through a network of transport links and storage

nodes. The other coordinates a sequence of resources to carry out some project.

Production logistics

The term is used for describing logistic processes within an industry. The purpose of production

logistics is to ensure that each machine and workstation is being fed with the right product in the right

quantity and quality at the right point in time.

The issue is not the transportation itself, but to streamline and control the flow through the value

adding processes and eliminates non-value adding ones. Production logistics can be applied in

existing as well as new plants. Manufacturing in an existing plant is a constantly changing process.

Machines are exchanged and new ones added, which gives the opportunity to improve the production

logistics system accordingly. Production logistics provides the means to achieve customer response

and capital efficiency.

Production logistics is getting more and more important with the decreasing batch sizes. In many

industries (e.g. mobile phone) batch size one is the short term aim. This way even a single customer

demand can be fulfilled in an efficient way. Track and tracing, which is an essential part of production

logistics - due to product safety and product reliability issues - is also gaining importance especially in

the automotive and the medical industry.


Logistics Structure

Order procurement and allocation


ORGANIZATION CHART OF LOGISTICS DEVELOPMENT AT HINDALCO:


Head Outbound Logistics

Process overview : Loading & dispatch


In charge (finished good warehouse) In charge

Bill Processing Transport Complaint Administration

Office

Field

Supporting WCM QEHS

Product In charge

Area In charge

Rolled Extrusion Wire Rods Ingots

Shift In charge

Clearance Section Group Section Contractor Bill Processing & office work

CURRENT GODOWN LOCATIONS

(HINDALCO)

Chandigarh

Kolkata

Delhi

Jaipur

Ahmadabad

Silvasa

Mumbai

Indore

Hyderabad

Cochin Pondicherry

Bangalore

6

Faridabad

Bhivandi

FINANCIAL HEALTH OF THE COMPANY


The Chairman’s letter to shareholders and the Management’s Discussion &

Analysis, which form a part of this Annual Report, provide the

strategic direction and a more detailed analysis on the performance of

individual businesses and their outlook.

Rs. in Million

Financial Results

for the year ended Standalone Consolidated

31.03.08 31.03.07 31.03.08 31.03.07

Net Sales & Operating

Revenue 192,010 183,130 600,128 193,161

Profit Before Tax 30,256 35,046 29,855 36,616

Provision for Current Tax 6,063 9,841 9,713 9,942

Provision for Deferred Tax 876 (551) (738) (478)

Provision for Fringe

Benefits Tax 114 113 123 121

Tax Adjustment for earlier

years (Net) (5,407) - (5,481) -

Profit before Minority

Interest 28,609 25,643 26,238 27,031

Minority Interest - - 2,206 161

Share in (Profit)/ Loss

of Associates - - 159 12


Net profit 28,609 25,643 23,873 26,858

Appropriations

Debenture Redemption Reserve 50 187 50 187

Special Reserve - - 9 13

Dividend on Preference Shares

(Current Year Rs. 0.24 Mio,

Previous Year Nil)

Dividend Tax on Preference Shares

(Current Year Rs. 0.04 Mio,

Previous Year Nil)

Interim Dividend on Equity Shares - 1,773 - 1,773

Tax on Interim Dividend - 249 - 249

Proposed Dividend on Equity

Shares 2,269 - 2,285 16

Tax on Proposed Dividend 386 - 392 6

Transfer to General Reserve 25,611 24,434 25,629 25,496

COMPANY GROWTH VS INDUSTRY GROWTH

Growth Sales (%) Profit (%)

Company 16.35 24.54H I N D A L C O I N D U S T R I E S L T D .

Page 4

Industry 15.18 15.65

PRODUCTION PROCESS

The aluminum production process can be categorized into upstream and downstream activities. The

upstream process involves meaning and refining bauxite to alumina while the downstream process

involves smelting and casting and fabricating.

Hindalco refines bauxite primarily obtained from captive mines, to extract alumina, which is smelted

into alumina ingots or billets. Hindalco smelts its entire production of alumina into aluminum and does

not engage in alumina trade.

Production of aluminum can be categories in two stages, namely

• From bauxite to alumina

• From alumina to aluminum

EXTRACTION OF ALUMINA FROM BAUXITE

Alumina is manufactured by conventional buyer’s process i.e. treating bauxite with caustic soda.

Bauxite is brought to the site from mines by means of railways wagon tippler. Primary crushing is done

in cone crusher where bauxite size is reduced form 8”- 12” to 3” - 4” and then stockpiled. Secondary

crushing is done by means of hammer mills

where process liquor known as a spent liquor and 600 psig. Steam is mixed together. This solution of

alumina from bauxite into caustic solution in the form of sodium aluminates is carried out of digesters

at 240 degrees centigrade temperature and 36-kg/sq.cm pressures. The digested slurry is placed


flashed and brought to atmosphere pressure; flashed vapors are utilized for pre heating the spent

liquor and condensed returned to boiler hose for generation of steam. Digested flashed slurry is

pumped to clarification area for removal of solid Impurities (red mud). Red mud is separated out, in

solid liquid hydrocyclon and stellar. Separated mud slurry is washed in counter current and washing

Circuit without using water. Washed mud slurry is cauterized by treating with lime slurry to recover

soda. Cauterized mud slurry is filtered on drum filters. Filtrate liquor is taken back into the system and

red mud cake is disposed of by means of dumpers Settler overflow pregnant liquor is filtered in Kelly

presses to remove fine mud particles. Clear pregnant liquor is pumped to precipitators through plate

heat exchanges after exchanging heat with the spent liquor where it is seeded with alumina trihydrate.

Alumina trihydrate is separated out in thickness and pan filter. Alumina trihydrate cake thus obtained is

fed into the gas suspension claimer where furnace oil is burnt for claiming alumina. The reduction

grade alumina thus produced is transported to smelter plant.

Spent liquor generated and separated from precipitation circuit is fed to the evaporation unit for

increasing caustic concentration to the desired level and recalculated to digesters through heaters for

further processing of bauxite and thus the process goes on.

ALUMINA MANUFACTURING PROCESS FLOW CHART:


Bauxite from mines Compress Air

Seeding

Liquor Spent Liquor

Filtrate to Process

Liquor

Hot Water for

Washing

Washing

Fuel Oil

Red Mud

ALUMINA TO SMELTER

Flocculants, Filter Cloth, Lime, Hot Water, Starch


CRUSHING

WET GRINDING

DESILICATION

DIGESTION

CLARIFICATION

EVAPORATION

DESILICATED SWEETENING

SLURRY

PRECIPITATIONN

HYDRATE CLASSIFICATION

PAN FILTER

CALCINATION

SEED FILTRATION &WASHING

EXTRACTION OF ALUMINUM FROM ALUMINA

Alumina from alumina plant is conveyed to the reduction plant. The reduction plant has 11 prebaked

pot – lines which have 1278 pot cells. Each pot has 24/26 carbon anodes and it is lined with carbon

cathode. Alumina is converted to metallic aluminum is these pot cells by the standard “hall herald”

process. The pot cells work at an average 4.3-volt D. C. current of 5800/6300 amperes. Electrolysis of

the alumina takes place in molten bath of coyote at a temperature of 955 to 960 degrees centigrade.

The molten aluminum that collects at the cathodes is siphoned into crucibles periodically. The entire

process is controlled by microprocessor system.

FULLY INTEGRATED OPERATIONS: A SIGNIFICANT STRATEGIC ADVANTAGE


Bauxite Mines

Alumina Refinery

Aluminium Smelter

Semi Fabrication Plant

Rolling Mills

Foils

Co-Generation

Renusagar Powder Plant

Redraw Rod Mills

Caustic Soda from JV

Aluminium fluoride from

Extrusion Process

Al. Wheel Plant

AVAILABILITY OF BAUXITE FROM MINES:

Bauxite Mines

Shrengdag Samari [20/25 suppliers (small)-2.5 to 3.0 lakh MT/Y]

Gurdari Kudag [3/4 suppliers (big level) - 2/3 rakes/month

Pakhar Tarijhari 1 rake=3953MT (58 wagons)

Jalin & Sanai (5.5-6.0 lakh MT/Y) 67MT Load/wagon

Orsapat

Chirokukud

Pakhar (M&M)

(Minerals & Minerals, Sister concern of Hindalco 100% own subsidy)

Supply-7/8 lakh MT/ Y

MODES OF SALES IN HINDALCO:

Hindalco has quite a good network for distribution of its products. Finished goods is sold and distributed to the

costumers by following means.


Own Mines On Purchase (Lease)

Jharkhand Chhattisgarh Jharkhand Madhya Pradesh

DIRECT SALES FROM MANUFACTURING UNITS:

SALES THROUGH STOCKISTS:

SALES THROUGH AGENTS:

SALES THROUGH DEPOTS:


MANUFACTURER CUSTOMERS

MANUFACTURE STOCKISTS CUSTOMERS

MANUFACTURE CUSTOMERSCONSIGNMENT AGENT

MANUFACTURE DEPOTS CUSTOMERS


ACTIVITY FOLW CHART OF HINDALCO-MINES DIVISION, JHARKHAND & CHHATTISGARH

PRODUCTION CAPACITY

ALUMINA

CAPACITY 1.15 MTPA

• RENUKOOT 685,000TPA

• BELGAUM 350,000TPA

• MURI 110,000TPA

• SMELTER (PRIMARY ALUMINIUM)

o CAPACITY 424,000MTP


• HIRAKUND 65,000TPA

• ALPURAM 14,000TPA

• ROLLED PRODUCTS

o CAPACITY 2,00,000TPA


• BELUR 45,000TPA

• TALOJA 45,000TPA

• NAGPUR 30,000TPA

• FOIL


o CAPACITY 14,000TPA

• SILVASA 5,000TPA

• KALWA 6,000TPA

• KOLLAR 3,000TPA

• EXTRUSIONS

o CAPACITY 27,700TPA

• RENUKOOT 19700TPA

• ALPURAM 8000TPA

• ALLOY WHEELS

o CAPACITY 3,00,000 Nos. PA

• SILVASA 3,00,000 nos.

MARKET STRUCTURE:

Aluminum production is expensive and requires heavy capital investment. Most of the key producers are major

corporations and the business is concentrated, not fragmented. As indicated above, a recent trend is for major

firms to invest in smelting operations which are closer to power sources. As direct results, older aluminum

operational facilities are closing down as the older sites are no longer cost effective. Norse Hydro, for example

has terminated approximately a quarter million tons of capacity in Northern Europe in favor of cheaper Middle

East based operations. Alco has made similar moves. Industry experts estimate that up to 4 million tons of

annual aluminum capacity from older facilities could be shut down in the next 3 to 4 years. How aluminum is

used.

SEGMENT WISE USEGE OF ALUMINIUM


FULLY INTEGRATED OPERATION: SIGNIFICANCE

STRATEGIC ADVANTAGE


CAPTIVE POWER

ACTIVITY FLOW CHART FOR ROLLED PRODUCT:


CAUSTIC SODA FROM JV

AL. FLUORIDE FROM JV

Unloading of lots from Trucks/Trolley in warehouse receiving area by EOT crane

If any lot found in damage condition then it returns to inspection & packaging deptt.

On nil duty

Party wise & Destination wise coding of allocated lots as per production list generated by product in charge

Sorting & Segregation of coded lots in warehouse receiving area.

Pack wise, Party wise storage of lots in respective storage area.

Grouping of allocated lots for hiring of trucks.

Export Lots: Segregate lots as per Grouping Seal the lots & put shipping mark as per

export order requirement

Domestic Lots: On placement of trucks generate loading slip & send a copy to loading point

Call the container/Trucks for loading on receipt of loading slipCheck the lots as per loadingLoad the container with the help of fork lift Load the truck with the help of EOT craneAfter loading of lots get lashing and damaging of sheets done and the container selectedAfter loading the truck/container get the loading register signed by loader & verified by shift in chargeEnsure proper covering of lots with tarpaulin in case of truck/trailerSend the truck/container to weigh bridge for weighment

EXTRUSION PRODUCTION PROCESS:

ACTIVITY FLOW CHART FOR EXTRUSION PRODUCT


If the products have to be loaded on the same truck, send the truck to respective loading point

If variations in function gross weight of loading slip, send the truck back to loading point for correction

Send the truck/container to weigh bridge for weighment

If gross weigh tallies, generate factory gate pass & send it to invoice section for clearance

Unloading of racks containing lots from shifting Trucks/Trolley in warehouse receiving area by EOT crane

FINISHED EXTRUSION PRODUCT

AGING FURNACE

ACTIVITY FLOW CHART FOR PROPERZI-WIRE RODS


If any lot found in damage condition then it returns to inspection & packaging deptt.

On nil duty

Zone wise coding of allocated lots as per production list generated by product in charge

Sorting & Segregation of coded lots in warehouse receiving area.

Zone wise & party wise storage of lots in fixed racks in respective storage area.

Grouping of allocated lots for hiring of trucks.Placement of truck as per grouped list

Generate loading slip send one copy of loading copy to loading point

Call the truck on receipt of loading slip

Check the lots as per loading slip & load in truck with the help of EOT crane

After loading the truck/container get the loading register signed by loader & verified by shift in charge

Ensure proper covering of lots with tarpaulin in case of truck/trailer


If the products have to be loaded on the same truck, send the truck to respective loading point

If variations in function gross weight of loading slip, then send the truck back to loading point for correction


If gross weigh tallies, generate factory gate pass & send it to invoice section for clearance

Physical checking of each coil by warehouse operator such as poor cooling cut marks

THE SWOT ANALYSIS OF HIL.


If not OK return coil on nil duty

Tally each coil no. with production sheet by warehouse operator. Total counting of coils received should match with production sheet.

In case of missing coils report to shift in charge informs to production

Packing of each coil as per requirement

Check the entries of all the coils in the system and tally with production register by warehouse shift in charge

Check the composition & UTS from PT lab analysis reports against each coil & ensure every coil is acceptable range

Take party wise dispatch schedule from sales, Co-operation by warehouse shift in charge

If not inform to remelt shop by warehouse shift in charge then return the same on nil duty to remelt shop.

Allocate each coil as per dispatch schedule on system by W/H Shift In charge

Group the coils party wise for hiring of trucks

Call the trucks for loading in receipt of loading slip

Check the load coils in truck as per loading list with the help of EOT crane by W/H operator under supervision of W/H shift in charge.

Ensure proper covering by coils with tarpaulin

Send the truck to weighbridge for weighment

If gross weight tallies, then generate factory gate pass & send it to invoice section for clearance

If variations are found in gross weight of loading slip & weighment slip then send the truck back to loading point

for correction

STRENGTH

Global brand image.

Cost effective producer.

Sound financial position.

A high degree quality consciousness is the core competence of the company, ISO 9001 and ISO 14001 have

added more prestige to the company.

Integrated production facility at Renusagar power plant.

Company has a well-established distribution network, covering a geographically wide and scattered market.

A number of Brownfield & Greenfield projects.

Industrial peace as, there has been no major strike in last 22 year.

A well focused human resources development.

Serve maximum customer satisfaction.

WEAKNESS

Present production capacity is not adequate to meet the rising high demand.

Technology is not upgraded to mark as compare to global giants in aluminium industry.

OPPORTUNITY

R & D collabratation with universities and another research organization.

More emphasis on downstream production of value added products.

Recycling should be adopted as routine production.

Raising more finance from marketing for more acquisition and merger for consolidating position in the

global market.

Aluminium, continuous to be strong with a growth in transportation sector 16%, construction15%, passenger

car 25%, two wheeler segments 14% respectively during FY07.

THREATS

Strong domestic and global competitors, such as TATA, POSCO, MITTLE, ESSAR .


Innovative revolution in plastic and steel industry.

Reduce in Exide duty.

Fall in price of Al. In neighbor country.


THREATS

WEAKNESS

DISTRIBUTION CHANNEL

SOLUTION

STRENGTH

OPPORTUNITY

SWOT ANALYSIS OF SUPPLY CHAIN

STRENGTH

Product based marketing channel.

Strong dist. channel based on geographically wide & scattered market of India..

Flexible distribution process for customers via direct sales and indirect sales.

Company made more than 50% direct sales.

Convenient road transportation.

WEAKNESS

Not tapped all the potential areas especially in eastern and southern zone.

A 50-40% sale depends on indirect marketing.

The present distribution system is not adequate to meet the demand of aluminium in the coming years. It is in

this light, that the present dist. system needs to be updated. Certain recommendations, with regard to the

same have been suggested ahead.

OPPORTUNITY

The demand of the company’s products is rapidly increasing. Thus, there is a necessity to expand the dist.

network to avail the benefits of the fast growing market.

Indirect sales should be converting in direct sales through TM sales force.

THREAT


The major threat is from the competitors like BALCO, NALCO etc. because the company may lose its

market leader position , if it does not take timely steps to modify its present distribution system in the wake

of fast growing demand

SUGGESTIONS/RECOMMENDATIONS/CONCLUSIONS

Certain recommendations with regard to distribution channel of HIL are as under:

(A) Northern zone offers the most lucrative sales in last financial year.. In the light of such high sales driven by

the factors such as heavy investments in infrastructures and related industries – machinery, transportation

etc. In this zone our more than 65% sales depends on indirect sales. So that our focus should convert indirect

sales to direct sales. Our effort should be here increase the depots in proportionate way, and also made

appointment TM’s and RM’s.

(B) Southern zone is also the fast growing market for the company. The zone offers bright prospects to company

in terms of future demand driven by rapid industrial expansion. In this zone our more than 60% sales

depends on direct sales and also we face cutthroat competition. In maintain the sales need of continuous

market research in regard to distribution channel & appoint stockiest instead of consignment agents.

(C) Western zone is the key market of the company. This zone is the most advanced zone in industrialization in

the country. In this zone our 65%(Approx.) Sales are through direct sales.

Analysis of sales data, present depots, stockiest & consignment agents, 35% of the sales in this zone is

indirectly depending upon consignment agents & stockiest. The demand of this zone is very high. To

optimize in this key zone, the company should established additional depots in that areas- Ahmadabad &

Nagpur for enhancing direct sales.

(D) In eastern zone company’s, indirect sales is approx. 70%. Such a heavy indirect sales reflects that the

company is not indirect contact of its customers and their worries and feedback and these are most essential

factors for improving level of sales.


In direct sales is not helpful to create, grow & retain the customers. So making the sales customer oriented

and to improve the sales, the company can take the following initiatives-

Assign sales representatives to contact all prospects in this area.

Design a sale promotion complains focusing on brand awareness.

Appoint a regular sales representative with each stockiest.

Shift to retail format of business by owning aluminium galleries in malls.

• LIMITATIONS OF STUDY

• The duration of practical training was just of four weeks. It was not sufficient.

• Due to heavy engagement of the top management people and other personnel, many other

information could not be collected within the limited span of time.

• To maintain secrecy, the company people do not provide various types of information, such as

actual sales to various customers, zone wise sales, depot setup cost, depot handling cost etc.

• Their recommendations are the outcome of an analysis made individually.

• Another analysis may arrive at certain other recommendations after using same data.

So, that it is advisable for the company to examine the various recommendations, before

going ahead with any of their implementations.


BIBLIOGRAPHY

MAGAZINES:

• Impex Times

• FIEO News

• Aluminium International Today

• Aluminium Times

• Aluminium Now

• Incale 2

• Incale 3

• Annual report (07-08), Hil

• Induction guide , (training centre )

• Principles of marketing, “kotler & Armstrong”.

• INTERNET:

• http://www.algomtl.com

• http://www.go4worldbusiness.com

• http://www.unzco.com/basicguide

• http://dgftcom.nic.in

• http://www.fieo.org

• http://www.airportsindia.org.in

• http://www.indiandata.com/trade_policy/export_procedures


• http://www.wikipedia.com/logistics

• http://www.google.co.in/

• http://www.hindalco.com/products/rolled_products

• http://www.hindalco.com

• http://www.novelis.com

• http://www.adityabirla.com

ANNEXURE

APPLICATION OF ALUMINIUM IN TRANSPORT

SECTOR

Global Aluminium Production Growth forecast (mln tpa)

Country % of consumption

Europe 29%

Japan 30%

US 28%

Canada 28%

Australia 25%

India 16%


Year Actual Forecast

1985 15.5

1995 19.7

2005 31.4

2010 41.3

2015 50.2

PRIMARY ALUMINIUM PRODUCTION & CONSUMPTION BY MAJOR COUNTRIES IN 2005

Country Production

(KT)

CONSUMPTION(KT)

Norway 1376 246

Brazil 1499 759

Australia 1903 380

Canada 2894 803

USA 2480 6143

Russia 3647 946

Chain 7806 7119

PER CAPITA CONSUMPTION OF ALUMINIUM

COUNTRY CONSUMPTION

(kg/person)

JAPAN 32.0H I N D A L C O I N D U S T R I E S L T D .

Page 4

USA 31.9

GERMANY 31.6

CANADA 31.2

ITLY 29.5

FRANCE 21.4

AUSTRALIA 21.2

UK 15.0

CHAINA 6.5

BRAZIL 4.1

INDIA 1.1

INDIA-User Segment’s Growth FY07 over FY06H I N D A L C O I N D U S T R I E S L T D .

Page 4

32 31.9 31.6 31.2 29.5

21.4 21.2

15

6.54.1

1.10

5

10

15

20

25

30

35

consumption

consumption

User Segment FY05 FY06 Change

%

Electrical 398 490 23

Transport 234 308 32

Built. & Const. 135 165 22

Consumer Durable 46 53 15

Packing 47 51 9

Indus. Machinery 37 41 11

Others 37 41 11

Total 934 1149 23

Major Aluminium Producer Industries in India.

Company Owner

ship

Location Capacity

Hindalco AB

Group

Renukoot

Alpuram

Hirakud

Belgaum

345,000

14,000

65,000

31,000

NALCO Public Angul 345,000


Sect.

BALCO Sterlight Korba 350,000

MALCO Sterlig

ht

Mettur 40,000

EXTRUSIONS CAPACITY, PRODUCTION & DEMAND 1991-2020(MT)

Particulars 91-92 99-00 03-04 2010 2020

Capacity 122000 190000 202000 202000 400000

Production 61000 109000 132000 188000 370000

Domestic

Demand

60000 105000 117000 166000 325000

Export Nil 4000 15000 22000 45000

Excess

Capacity

62000 81000 70000 14000 30000

CONSIGNMENT AGENTS & STOCKIEST

ZONE WAREHOUSES No of

CONSIGNMENT

AGENTS

No of

STOCKIEST

EASTERN 2 6 8

NORTHERN 5 - 32

SOUTHERN 3 12 20


WESTERN 3 26 24

Primary metal customer of Hindalco:-

Primary metal customer are always competitor for Hindalco Industry Because after purchasing of Primary metal

they manufacture Rolled product or Extrusion product. So these company are competitor for Hindalco in

Extrusion product and Rolled product.

Warehouse problems

Major problem

• Dependence on other department

• Transpotation

• Space

Dependence on other department: it is the nature of the warehouse department and it cannot do any

thing for this as any delay in related department can add to problem in warehouse.


Transpotation: it arises due to following factors

Space constrane: due to above factors space arise as a big problem

Minor problem

• Slowdown

• Defence delay

• Natural calamity

WAREHOUSE ACTIVITES NO ADVANCE PLANNING


After packing feed the product

Marketing dept. DISTRIBUTION ACCORDING TO ORDER

Grouping MAIN PROBLEMATIC AREA

HIRING SLIP

Transportation section LOADING SLIP

Loading at godown

Factory gate pass

PACKING

To contain To protect to preserve to present to dispense

The product the product the product the product the product

MAJOR PROBLEMS:

NO coordination with the store department.

NO forecasting

Supply chain of hindalco


Mines

Production

Hold

Marketing coordination Release

Warehouse

Dispatch

Logistics

Godown

FINDINGS & RECOMMENDATIONS

Findings

1. Hindalco is the leading exporter of Aluminum Semi-Finished products in India.

2. FIEO (Federation of Indian Export Organization) has awarded Hindalco as a Five Star Trading Houses

on their export achievements.

3. Hindalco is following all the norms as per Central Excise & Customs and other government rules &

regulations in the export process.

4. Hindalco is following positive and proactive approach towards export.

5. Hindalco is exporting all over the world, from underdeveloped countries to advance countries.

6. There are approx. 10,000 employees in Hindalco from top to bottom level, then also company’s main

focus is about safety, security and value as well as proper rules and regulations

7. Having huge network.


8. Easy availability of raw materials.

9. The manufacturing cost is very high because of high utilization of energy. Energy (Oil, Coal,

Electricity) used at Renukoot is 47% of total manufacturing cost, while only electricity is used as

77.67% of total energy consumption.

Present distribution system and production capacity is not adequate to meet the present and near future

demand.

10. Approximately 50% employees at operational level as well as middle are not satisfied by their job but

they do not tell the reason.

11. Findings at Warehouse:

Minor Problems- Nature Calamity

Employee’s health problems

Defense Delay (Inspection)

Customer Denied

Volumetric Problems

Delay Packaging

Changes in Market Scenario

Dependency on other Departments

(Production, Packaging, Transportation)

Major Problems: 1. Space

2. Transportation

Recommendations/Suggestions:

Hindalco is a reputed Aluminum industry in the world and its products are well accepted in the market

but as we know that there is always a scope of improvement.

Following are the recommendations in all areas:

Sometimes order has been delayed due to rejection of partial quantity of the product due to quality

problems and manufacturing defects. So, it is recommended that Hindalco should have to keep advance

stock or backup products in their warehouse to overcome this problem and to execute the order on time.


Some of the Caster product order is being delayed due to limited capacity of the Caster Plant. So, it is

recommended that Hindalco should have to increase the capacity of their Caster Plant.

Hindalco is using Oracle & IVL software system for making export documents. The working of this

software is from Order management to Shipment. This process is time taking due to partly adoption of

the software system. So, it is recommended that this software should have been start from Enquiry

management to Shipment. It would ease in making documents in faster way manual interruption will be

minimized.

Sometimes there is unavailability of containers for any particular destination occurs. This problem have

been overcome by helding a meeting and making a successful negotiation process from the shipping line

companies for the arrangement of empty containers.

Due to no advance planning there is a lot of problems in each department, mainly in warehouse. So, it is

recommended that there should be a prior planning at the time of order booking in beginning.

“Speed of the boss is the speed of the team as well as speed of the organization”.

CONCLUSION:

Business is undergoing a strategic transformation companies require clear vision and an attunement to balance

the need sustainable in doing sum. It is a pointer to the direction in which corporate strategies would need to

change in order to make organization function a truly responsible.

In other words future belongs to only those organizations that undertake and imbibe well defined SCM. The

globalization of SCM with goal of increasing competitive advantage, creating more value-added and reducing

costs through global sourcing. In a highly competitive business environment a well established supply chain

strategy absolutely essential for ensuring competitive edge in the market place. SCM is the most powerful tool

for bringing innovations and maintaining price competitions which is a door step for transferring companies into

a power house.


24071672 final summer training report on supply chain mangement

Documents

partially annealed temper

heat seal lacquer

aditya birla nuvo

viscose staple fibre

gross weigh tallies

london metal exchange

function gross weight

fourth largest producer