36203282 ambuja report

A

Winter Training Report At

GUJARAT AMBUJA CEMENT LIMITEDAmbuja Nagar P.O.

Taluka Kodinar- 362715District Junagadh

Gujarat.

TRAINING PERIOD: 25/12/2006 to 29/01/2007

PREPAREDED BY: - NATHANI KARISHMA MBA II Roll no. 521

SUBMITED TO :- NARMADA COLLEGE OF MANAGEMENT (NCM)BHARUCH

GUIDED BY :- MR. SUBHASH YADAV

1 A report on Ambuja cement Ltd. Analysis of value chain

http://www.ambujaeastern.com/Giant1.jpg

DECLARATION

I, the undersigned Miss KARISHMA A. NATHANI, a student of MBA part II here by declare that the project work presented in this report is my own work & has been carried out under the guidance of professor Subhash yadav of Narmada college of management ,BHARUCH.

This work was not submitted previously to any university or any where else for examination or for any other purpose.

Date :

Place : Kodinar

KARISHMA A. NATHANI


PREFACE

Education consists of two aspects theoretical and practical.

Theatrical aspects are covered during classroom sessions through group discussions. Role playing, case studies , and presentation etc. To understand more deeply the theatrical concepts, practical training in organization becomes essential for full-fledged MBA course.

So being students of M.B.A we have to undergo practical training at any organization as decided by the Institute or by own. We can say that practical knowledge is the best experience for any student and hence practical training plays as much important role as the theoretical study.

During this training program I have studied how the supply chain management is done in GACL. What are the different departments that plays their role into it.

I have taken training at “GUJARAT AMBUJA CEMENT LIMITED” – Kodinar for 2 months and gathered information.

The management of G.A.C.L. gave good response and help me in understanding all the points. I am thankful to all the staff of G.A.C.L. to give me their valuable time.


ACKNOWLEDGEMENT

I am the student of management and hence, our institute insists on industrial visit programm for the students during 2 years to increase the knowledge of students in connection with the management, administration and other matters.

In this regard, I visited “GUJARAT AMBUJA CEMENT LIMITED” located at Kodinar. I am very thankful to Mr. Kapoor (Personnel Manager) for granting me permission to undergo the training Program. Moreover I am in debt of all the officers and staff members of G.A.C.L. for fruitful guidance in their concerned field which not only helped me to prepare this report but also to have a clear picture of functioning of each department.

I specially acknowledge Mr. Mukherjee (S.P.O.), Mr. Sunil Kumar (Personnel Assistant), Mr. M.P. Singh (Sales), Mr. Ripal Shah(Sales), Mr.Modi (Sales), Mr. Tripathi (Port Division), Mr. Vedant mulani (BCT), Mr. K.k. javahar (BCT), Mr. Rama rao (production),Mr. Dhokiya (librarian),Mr. Katare,Mr.firoz mithani(IT), r. Mishra (Packing Division) and all other members of different departments

I am very thankful to “Mr.Joshi (HOD) who gave me an opportunity of M.B.A. training program. I am also very thankful and we express our sense of gratitude towards our learned professors for giving a valuable guidance regarding our practical implementation of principles of management and administration in the industry.And Mr. Yadav sir ( project guide) who guide me throughout the project.

I am finally thankful to my parents and my uncle Mr. Shivani who helped me getting & completing this project.


Index

SR.

NO.

PARTICULARS

PAGE NO.

1. EXECUTIVE SUMMERY 7

2. IDUSTRY HISTORY & RPOFILE 11

3. SERVICES AND PRODUCTS 8

4 BASICS OF STOCK MARKET 12

5 SHAREKHAN PROFILE 13

6. SHAREKHAN SERVICES IN DETAIL 31

6.1 DIFFERENT TYPES OF ACCOUNT 33

6.2 COMMODITY 37

6.3 MUTUAL FUND 40

6.4 PLATINUM CIRCLE 43

7.1 INTRODUCTION 55

7.2 ORGANISATION CHART 57

7.3 ACCOUNT OPPENING PROCESS 58

8 MARKETING 65

8.1 INTRODUCTION 65

8.2 MARKET SEGMENTATION 66


8.3 ADVERTIESMENT 66

8.4 COMPARISON WITH COMPETITORS 67

9 ON THE JOB TRAINING 75

9.1 OBJECTIVE 75

9.2 TARGET AND TASK 76

9.3 STRATEGY 76

9.4 LIMITATION 77

9.5 LEARNING 78

9.6 ACHIEVEMENT 79

10 CUSTOMER PROFILER SURVEY 80

11 RESEARCH METHODOLOGY 81

12 ANALYSIS AND INTERPRETATION 82

13 FINDINGS 99

14 CONCLUSION 100

15 SUGGESTION 101

16 BIBLIOGRAPHY 102

17 ANNEXURE 103


EXECUTIVE SUMMARY

Ambuja is an Old buzzword in Indian CEMENT market. With Strategic Alliance with

world’s largest cement manufacturer, HOLCIM a swiss base company acquires a strong

hold on its quality and know-how that is not second to any other cement manufacturing

company.

Ambuja is surging towards more and more innovations to offer nothing but the very best

and the latest CEMENT manufacturing technology to esteemed customers. Thus, Ambuja

is able to monitor the quality from the very beginning till the final product.

The manufacturing process at Ambuja is of paramount importance. The process uses

state-of-art production technology of the production management. Ambuja is actively

involved in environment protection and product design to assure consistent quality and

optimize the cost for its customers.

This project is a study of value chain analysis of GACL in Gujarat and to Find how

ambuja is creating value for its customer and Supply chain management system

comparison to know where does Ambuja stands in compare to other cement companies,

like Saurastra cement Ltd.

The study is Explorative one using Questionnaire and observation of plants and offices,

and is based on Primary data analysis and secondary data analysis. I have visited all the

departments of GACL as well as SCL to find out the value chain and supply chain

system.

The objectives of my research are Analysis of value chain system in ambuja cement ltd

and comparison of supply chain management system with SCL


Questionnaire is used by me as a tool for the survey. I have referred descriptive

Questions for the Questionnaire. The survey is conducted with all the departments head

in ACL as well as SCL. I have tabulated the data and of GACL & SCL for comparison.

The major things that I have found in this project are (a) regarding the effectiveness of

value chain system in GACL. (b) GACL Company is concentrating on consistent quality

delivered to customer and customers full satisfaction. (c)

My suggestions to the Ambuja Company are


Reasons for selecting cement industry for the winter project

There is a great potential for cement industry in the resent trade. The industry crossed 127 million tones of cement dispatches. Recording an impressive 8.5% growth over the previous year. Similarly the Indian economy as a whole grew by 7% over and above the 8.5% growth that was achieved in 2004-2005.

I, believe this is the beginning of a new pattern of growth for the Indian economy. The growth momentum is getting into a virtuous cycle. Wherein high growth attracts large capital inflows, which in turn fuels further growth. We seem to finally have all the ingredients in place for the country to achieve the status of a global giant.

This year the monsoon too has been good across the country. Thee is now a general consensus that the economy will grow by 7% in 2006-2007. This augurs very well for the cement industry, as after a long spell we are seeing the economy grow at 7% for 3 consecutive years. This has also brought the country much needed global attention. Also, the Government has pledged to continue with reforms in infrastructure and invest in rural development and boost the housing sector as well.

So, we can say about the indian economy as On a Consistent growth path Impetus on Service Sector Changing Demography - A Growth Driver Moved from being an Agrarian Economy to Services & Manufacturing Economy

Agrarian to a Service EconomyGDP Constituent 1997 - 98 2005 - 06

Agriculture 40 22Manufacturing 35 27Services 25 51

thus we can say,Infrastructure & Housing New Drivers of Economic Growth

Future Cement Scenario

Indian economy expected to grow at - 7 to 8% Infrastructure development at an inflection point Housing to be the main driver of cement growth Cement Growth expected to be over 9% After a long gap demand would exceed supply Demand set to outstrip Supply


Reasons for selecting Gujarat Ambuja cement company for the winter project

The BRAND Ambuja cement

Gujarat ambuja cement has been acquired by HOLCIM a swiss base company so it’s a MNC now. Majority shares of ambuja has been purchased by holcim so it has the managing power. In order to firmly grasp the opportunities offered by the growing Indian economy, and realize the full potential of the company, it have been looking at various options for strategic investment in ACC. As it has purchased about a 14% stake in ACC in 1999 from the Tata group of companies.

So ambuja have been partnered with Holcim to consolidate the presence in ACC Holcim is the largest cement producing company in the world. And has been looking to build a presence in India. And with a view to look for a large global cement partner to further consolidate the presence in the Indian cement industry. Therefore it’s a win-win situation for both the companies and their shareholders.

Salient Features of the Partnership

Holcim Investments in India through ACIL only Access to Holcim’s best practices in areas such as waste heat recovery, use of

alternative fuels, human resources and Information technology Opening of new cement trading opportunities in Middle East and Indian Ocean

This partnership with holcim will not only help it further strengthen relationship with ACC, but also give us access to many of Holcim’s strengths like R&D, Fuel sourcing, information technology etc.

The partnership now give them about 35% equity stake in ACC,which is the single largest cement producing company with an all-india presence. It will


now be able to consolidate ACC ‘s working in their financial results. Which until now was not being done.

In terms of size & structure, this was a landmark transaction in corporate India. As far as the performance of the Ambuja is considered it has been very good it has sold 12.75 million tones of cement during the year, a growth of 22%. The company made a consolidated operating profit of Rs. 910 crore as against Rs. 710 crore in the previous year an increase of 28 %.

The company always continue to ensure that the efficiency levels are the highest in the industry, even as they keep input costs in check. I have no doubt that their spirit and passion will continue to keep them far ahead of the competition. With virtually no new capacities on the anvil and demand set to increase.

I believe that the cement industry is always the mirror of a growing economy. Growth is never a challenge, but to keep adding value along with growth is a

challenge. Growth With A Sustainable Business Model

In such a situation how the company is managing the supply chain?How thequality grade cement is manufactured with competition price constraint?And.how efficiently it distributes the final product cement to the final buyer is very interesting and worth studying that is why I have selected the cement industry and specifically the Ambuja cement compaby for the research project .


Industry history and profile

Man is very ambitious being from the very beginning he has always liked to innovate & make the things more possible & more comfortable. Firstly he used to stay in hots made up of straws & mod, then of bricks & later of cement. But then also he didn’t stopped from there he keep on going more better good, than letter & best out of it. Cement has been amongst the major industries in India there is now at throat competition in this stream too. For diverting more people, different types & varieties of cement are available.

Cement is considered to be the basic building material today in construction industry. In 1757 AD, chemical engineer JOHNS SMEATON discovered that by mixing of lime and clay, the resulting product process the property of hydraulicity. This was the discovery of cement. In 1807 AD French chemist Vicart followed Smeaton’s observation to its natural and logical conclusion in making a cement by burning together finally pulverized chalk and clay, after having mixed them into paste.

In India, manufacturing of cement was first started in Madras in 1904 first three

companies were started in 19912-1913.when the plans started there were 21 factories with an annual capacity of 328 million tones.

The real impetus was provided when partial decontrol was announced in 1982. through this policy all existing cement industry units were required to give up 66.67% of their installed capacity as levy at controlled price. The most important objective of decontrol was to eliminate black-marketing and bring down the price in the free market.it was in follow through that the industry was fully controlled in 1989. in the last decade of 90s cement capacity increased by more than twice. The industry was de-licensed in 1991, which augmented its production in the very first year.

INDIAN CEMENT INDUSTRY

India is today world’s second largest cement producing country after china. Spread across the length and breath of the country, there are about 60 cement companies with 134major plants and an installed capacity of about 147 million tones. Besides, there are 60 surviving tiny and mini cement plant with a capacity of 6.3 million tones.

I n India, the per capita cement consumption is abysmally low at 99 kgs as against a world average of 255 kgs and asian average of 200 kgs. These figures indicate good potential for growth of the industry. In essence, cement is a simple business. Unlike other industries it does not suffer rapid technological obsolescence or shifting consumer


trends. Therefore, it constantly attracts new investments. Which results in surplus capacity. This means only the very efficient players can prosper.

Contribution of cement industry to the whole economy

The Indian cement industry plays a key role in the national economy,generating substantial revenue for the state and central govt. It is the third highest contribution in terms of excise duty of over Rs. 3,500 crores a year. Sales to state Govt. Royalties ,octroiAnd the other cesses add another 1500 crore the industry employ a work force of over of 1.5 lakh persons and supports a further complement of 12 lakh people engaged indirectly.

The industry crossed 127 million tones of cement dispatched, recording an impressinve 8.5 % growth over the previous year. similarly Indian economy as a whole grew by 7%, over and above the 8.5% growth that was achieved in 2003-04. this is the beginning of a new economy of growth for the Indian economy the growth momentum is getting into a virtous cycle. Wherein high growth attracts large capital inflows,which in turn fuels further growth. Government has pledged to continue with reforms in infrastructure and invest in rural development and boost the housing sector as well.

As the infrastructure development is the best measure of country’s Development Indian Government is going now for many infrastructural project which proves that Cement industry is booming now a days


Company history

The famous marvadi, sekhsaria group had started the company at Kodinar under the title GUJARAT AMBUJA CEMENT LTD in 1983. Since then till now, the company has gathered great frame under this name due to its ability and performance.

G.A.C.L. is considered to be the company in cement industry in Gujarat. The world wide poll conducted by “Asia Money” in January 1998 has rent the company among the top 4 for best relation with the investor and among the 10 best managed companies in India. The company covers a wide area at vadnagar 10KM away from Kodinar which is known as Ambuja Nagar.

G.A.C.L. was initially being planned to setup near Mahuwa in Bhavanagar district. The entire primaries were done. But due to the non cooperative attitude and legal oppose by villagers, the plan was changed.

Then the Sekhsaria group decided to setup G.A.C.L. at Kodinar. With the promotion by Gujarat industrial and Investment Corporation limited, the company lay its foundation in 1983 at vadnagar in Kodinar. The entire plant design and technology had been supplied by Krupp Polysiusag West Germany. Company has entered into agreement with Onada Engineering and consulting company limited at Japan.

G.E.B. granted 20MVA power for the plants and a double circuit 132KVA feeder with the commencement of construction. The railway service appointed siding from Kodinar to vadnagar. All the basic procedures were completed by august 1986 while cement production started in September 1986.

People of ambuja have achieved yet a another milestone by putting up a 40MW power plant in just 8 months which generates up to 58MW power sufficient to cater the entire need of all the three cement plants. Horticulture department is there in G.A.C.L. which looks after 64 villages.

Ambuja produces approx 50.49 lakh tones of cement yearly without causing any harm to the environment. It has received the award as environment pollution free company. The company tries to provide maximum facility to its worker. They all collectively work seeking the progress of the company.

The unit insists in quality of work and quality of system. It aims to achieve highest place and excellence among the total manufacturing companies. It provides a pollution free and clean environment by adopting latest technological advancements and judicious use of human resources.


Since then all the plants continued to run efficiently at 100% capacity utilization. Gradually the development of 2 more projects so that Gujarat Ambuja line 1& 2 was done.

Today, we can say that the company has spread its branches almost all over India by establishing their units at the following places:-

Ambuja Nagar - Kodinar(Guj)Gaj ambuja plantGaj ambuja line – 2Ambuja palnt

Darlaghat - SolanHim ambuja (himachal)

Ropar - cement ambujar. repnagar Punjab

Raipur - Madhaya Pradesh

The company at present has got jetties at MulDwaraka neat Kodinar, Surat, Magdalla, and at panvel (Mumbai) as well as seven ships under its ownership.

Ambuja cement eastern limited (formally Modi Cement limited) has become a subsidiary of the company. G.A.C.L. has got various subsidiary companies viz. Concrete Investment Ltd, IndoNippo Special Cements Ltd, Ganpati Greenfields Ltd, Home Trust Housing Finance Company Limited, Cement Ambuja International Ltd, Mauritius and Midigama Cement Ltd, Srilanka and many others.

The cement industry continues to face challenges on account of surplus capacity and ever rising input cost. Despite all the economic slowdown adverse external environment and heavy increase in cost of inputs, the company has still maintained its position.

Ambuja cement continues to remain the brand of first choice in all its major markets. The future provides positive signals for the industry.

The following shown is the map of the Gujarat Ambuja Network.


CONTRIBUTION OF THE UNIT TO THE INDUSTRY

GACL, since its beginning in 1986 as a large scale unit has recorded good performance with significant improvement in products, quality and profit.

It provides employment to nearly 950 people and also provide indirect employment to large number of people in froms of transporter and retailers etc. . Before the commencement of GACL, Kodinar was considered to be a village but now due to the company’s effort, Kodinar even has become well known. GACL caries out various activities to bring up the condition of Kodinar.

The company is having top level position in manufacturing companies. This unit is really helpful in the indigenous growth of the company. The location of the unit is to helpful in the growth of the company. On the other hand the amicable and harmonious relationship between the managers and workers also support the progress of the company.

The strong focus on constant quality improvement has paid handsome dividend and the division products are today accepted as premium products in domestic as well as international market.

It has planted over 1,00,000 plants in ambuja nagar. GACL recorded zero (0) pollution level.


Company Profile

Name & address of the unit : Gujarat ambuja cement ltd.Ambujanagar.Taluka : kodinarDist : junagadhGujarat –362 620

Year Of Establishment : September 1986

Mission of the company : To strive for an environment beyond compliance. To adopt environmentally sound technologies and management practices for optimum utilization and conservation of natural resources.

Vision of the company : Give a man orders and he’ll do the task reasonably well, but let him set his own targets,give him freedom and authority,and his task becomes a personal mission : “I CAN” (It is constant source of motivation for their people)

Belief of the company : Transparency,system and controls are essential factors in the success and growth of the company.

Investment : In September 1986 Rs.86 crores.

Promoters Of The Company : Mr. Narotham SekhsariaMr. Suresh Neotia

Auditors : M/s Dalal & Shah.M/s Chaturvedi & Co.M/s P.M.Nanabhoy & Co.

Bankers : Bank Of India.Bank Of Baroda.Dena Bank.ANZ Grindlays Bank.Punjab National Bank.The Hong Kong And Shanghai Banking Co. Ltd (HSBC).Credit Lyonnais.


Registered office : Ambuja nagar Kodinar

Corporate office : Nariman pointMumbai – 400 021.

Form of the organization : Private company ltd.

Production process used : Continuous production process technology

Production technology provider : KRUPY pulsates,A.B. Germany and Kuchting has with onida engineering and consulting co.ltd-japan

Production capacity : Ambuja plant : 4500 TPD Gaj ambuja-1 : 4500 TPA

Gaj ambuja – 2 : 3750 TPA

Competitors India’s top 10 cement companies:

1. Ultratech Increased revenue from cement2. ACC strongest cement company3. GRACIM Consolidating cement business4. GUJARAT AMBUJA Setting new benchmark5. INDIA CEMENTS Market leader in south6. B.K. BIRLA GROUP Entry in cement rewarding7. MADRAS CEMENT Financially sound company8. LAFARGE INDIA First cement MNC in India9. JAYPEE CEMENT Pride of Madhya pradesh10. BIRLA CORP. Cement becomes main stay11. CCI Welcoming new owner

Future OutlookIn line with the company's vision to become the leader in Indian cement industry, GACL had been pursuing a combination of strategies like strategic alliances, capacity expansion,new plants, and aggressive takeovers. The company had set up a two million ton Greenfield cement unit in Maharashtra at an investment of Rs. 500 crores...


SWOT analysis Strength

Lower energy cost due to imported calorific value coal and use of non conventional fuels.

Lower transportation cost due to increased transport through sea router fro bulk shipping.

Very high Brand identity. Excellent innovation engineering and technological skill useful for operating

excellence. Very less department on government for coal and power. Processing own jetty and ships useful for timely and cheap transport Having major share of Holcim so can take advantage of being MNC. Excellent management team to cope with changing environment. The supply chain management system in the ACL is quite focused and good.

Weakness :

Very limited fragmentation of plant, which avoid its presence in very sub regional market.

Still to span more geographically with compare to competetor.

Opportunity :

Higher agriculture production may result into higher purchasing power,which will increase demand.

Stability of govermnet may result into higher FDI inflow which will give rise to MNC’s entry in India, which would require operations in India. Thus large infrastructure projects and related requirements of housing and accommodation will boost cement sales.

New product usage of RMC(ready mix concrete would be the demand.

Threat Threates from the economic cycle i.e. recession or growth Change in government policies in term of coal,diesel,raw material and

transport. Exchange rate fluctuation having direct effect on bottom line as wellas on

export. Capacity expansion by the competition which will lead to the surplus of the

cement.


A chievements

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

Benchmarking quality standards for the industryAmbuja has received the highest quality award - the National Quality Award. The only cement company to do so. Its also the first to receive the ISO 9002 quality certification.

Reinventing cement transportationAlmost 90% of cement in India travels by rail or road. And in bags. Our people realized that the only way to speed up transportation was a completely different approach. The result: a bulk transporting system via the sea. Making us the first company to introduce the concept of bulk cement movement by sea in India.

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

National Award for outstanding pollution control by the Prime Minister of India.

ISO 9002 Quality Certification.ISO 14000 Certification for environmental systems.Best Award for highest exports by CAPEXIL.Economic Times - Harvard Business School Association Award for corporate excellenceThe institute of cost & works accountants of India, a professional body has given the national award (certificate of merit ) “Excellence in cost management 2004” in the private sector.

PRESS RELEASE April 16, 2004

Excellent Performance By Gujarat Ambuja Cement for the 3rd quater ending March 2004 Sales Volume Up - 18% at 559.10 CroresProfit After Tax up - 106% at 145.23 CroresDeclares 50% Interim Divident

20th October 2006Quarter ended September 30, 2006

_ Net sales higher at Rs. 1006 crores, up 50%_ EBIDTA at Rs. 417 crores, up 102%_ Profit After Tax at Rs. 280 crores, up 159%_ Interim Dividend of 75%


Research comprise defining and redefining problems, formulating hypothesis or

suggested solutions; collecting, organizing and evaluating data; making deductions and

reaching conclusions; and at last carefully testing the conclusions to determine whether

they fit the formulating Hypothesis.

In short, the search for Knowledge through Objective and Systematic method of finding solutions to a problem is Research

For the appropriate results one needs to design a research questionnaire

consciously. The basic motto behind organizing this research work was to get intellectual

joy of doing some creative work. The main aim of the research that I have undergone is

to explore the truth.

The topic was such sensitive that it was asking for high level of attention towards

the research process and every thing related to the research. So, up to possible extent it

has been conducted step by step to cover the whole aspects of the research.

I had been assigned a topic which doesn’t involve only one perspective but it was

focusing on all the activities done by the organization which is depicting in this report

under different headings. Here I have tried my best to synchronize every portion of report

to come up with meaning full information through it. It was our privilege to conduct such

research which had given the chance to look cement industry with quite huge perspective.

So that at the end of project I’m including here, the problems faced by the people. To make the result more visual, realizing and applicable .

RESEARCH PROCESS23 A report on Ambuja cement Ltd. Analysis of value chain


PREPARING THE RESEARCH REPORT

INTERPRETATION

PROCESSING & ANALYSING THE

COLLECTED DATA

ORGANIZING & CONDUCTING FIELD

SURVEY

DETERMINING SAMPLING DESIGN

&SIZE

DESIGNING DATA COLLECTION

DETERMINING DATA SOURCES

RESEARCH DESIGN

FORMULATING RESEARCH PROBLEM

o Defining purpose & objective :

To gather information about all the departments in GACL & SCL that are

concerned for the value chain and in turn supply chain management

system of an organization and the contribution of activities of all the

departments to over all results .

OBJECTIVE

My objective of this research is analyzing the value chain system in

GACL and find out what else can be done to improve the value chain

system of it and to find out how is the strength of GACL supply chain

management system with compare to SCL.

o Research Plan :-

Primary Data: -

The Primary data in the Project is the data collected from the

different heads of the department from GACL & SCL. It has been taken by

directly contacting them and asking them the questions that are in the

survey questionnaire. Their feedback is noted down

Secondary Data: -

The secondary data used in the project is the information collected

from the brochures and the Web site of GACL,SCL, information has also

been collected from the books of Marketing Management by Philip Kotler,

Research Methodology by C. R. Kothari .& books regarding value chain

management system. and the different magazines like CMA REPORT etc.


Research Approach: -

I have used the qualitative approach in explorative research to study the

different activities done by GACL to add value to the product to the final

consumer for quantifying it. Qualitative research is primarily exploratory in

nature seeking to identify & clarify issue.

o Research Instrument: -

Questionnaire is the Instrument used for conducting the Research.

Questionnaire is used to get information from procurement , production ,

sales & distribution , quality control , R&D,and at the jetty I have visited the

port authority , distribution incharge , shipment incharge and custom

authority to get the information of sea transport which is the major part of

ambuja’s distribution departments to get information about time required

to complete the supply chain cycle ,and at what stages ambuja is creating

value for its customer.

Questionnaire Design: - The Questionnaire is a set of descriptive open ended

Questions. The Questions are arranged in a sequence and I have used the technical

terms which give me more useful information in less time as the department heads

are not having more time. I have framed my entire project based on answers given

by them.

Audience

The head of the department of procurement ,production ,sales & distribution & marketing , quality control, R&D , Environment protection & security, port authority etc. all the department concerned for value chain analysis.


s t r a t e g y - v a l u e c h a i n a n a l y s i s

Introduction

“Value” is defined as “any activity that increases the market form or function of the product or service.” And in today’s business climate, you need to maximize the value of every process in your business.

Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings:

(1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and

(2) Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities.

Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("out sourced").

Linking Value Chain Analysis to Competitive Advantage

What activities a business undertakes is directly linked to achieving competitive advantage. For example, a business which wishes to outperform its competitors through differentiating itself through higher quality will have to perform its value chain activities better than the opposition. By contrast, a strategy based on seeking cost leadership will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used.

Primary Activities

Primary value chain activities include:

Primary Activity

Description

Inbound logistics

All those activities concerned with receiving and storing externally sourced materials


Operations The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products)

Outbound logistics

All those activities associated with getting finished goods and services to buyers

Marketing and sales

Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.)

Service All those activities associated with maintaining product performance after the product has been sold

Support Activities

Support activities include:

Secondary Activity

Description

Procurement This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers)

Human Resource Management

Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business

Technology Development

Activities concerned with managing information processing and the development and protection of "knowledge" in a business

Infrastructure Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management

The value chain or business system map


Inbound logistic

Operation Outbound logistics

Marketing & sales

Service

Procurement


Human resource management

Firm InfrastructureS

upporting activity L

ine Operations

These diagram picture all of the firm’s activities and processes from procurement to after sales services, including also research and development and overhead activities. They are used to enable or encourage a through analysis of how each activity throughout the firm affects costs and differentiation. They may also be used to identify important processes or linkages among activities that span several function or are performed through alliances or by suppliers . which in turn leads to benefit of coordination among firms in a network to lower the overall cost for customers or enhance the noncost elements of value delivered.

. Value Chain Analysis is a well known strategic concept which enables you to analyse your competitive position and establish where you are adding value within the business. The whole enterprise is 'broken down' into key 'Support' and 'Primary' activities which are then compared with competitive 'benchmarks' representing best practice.

“Buyer-driven commodity chains refer to those industries in which largeretailers, marketers, and branded manufacturers play the pivotal roles in settingup decentralized production networks in a variety of exporting countries,typically located in the third world. This pattern of trade-led industrializationhas become common in labor-intensive, consumer goods industries such asgarments, footwear, toys, housewares, consumer electronics, and a variety ofhandicrafts. Production is generally carried out by tiered networks of thirdworld contractors that make finished goods for foreign buyers. Thespecifications are supplied by the large retailers or marketers that order thegoods.”

The concept has been extended beyond individual organizations. It can apply to whole supply chains and distribution networks. The delivery of a mix of products and services to the end customer will mobilize different economic actors, each managing its own value chain. The industry wide synchronized interactions of those local value chains create an extended value chain, sometimes global in extent. Porter terms this larger interconnected system of value chains the "value system." A value system includes the value chains of a firm's supplier (and their suppliers all the way back), the firm itself, the firm distribution channels, the Empty vessel and the firm's buyers (and presumably extended to the buyers of their products, and so on).

Capturing the value generated along the chain is the new approach taken by many management strategists. For example, a manufacturer might require its parts suppliers to be located nearby its assembly plant to minimize the cost of transportation. By exploiting the upstream and downstream information flowing along the value chain, the firms may try to bypass the intermediaries creating new business models, or in other ways create improvements in its value system.


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

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

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

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

http://en.wikipedia.org/wiki/Product_(business)

http://en.wikipedia.org/wiki/Distribution_(business)

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

When not to apply The Value Chain

Porter's basic model describes an industrial organization buying raw materials and transforming these into physical products.In 1985, When Porter introduced the Value Chain, around 60% of most western economies' workforces were active in service industries. In 2006, most service industries in western countries employ over 80% of the workforce.Critique on the Value Chain model and its applicability to services organizations has since been voiced by both academics and practitioners. Porter's focus on 'either or' strategies and competition as the main driving force in any industry, are not that well suited to the complexity of most industries today. Collaboration in addition to competition and differentiation in addition to low cost are common drivers. Furthermore, Porter is focused on the tangible outcomes of cost, revenue, margin and basic configuration of business activities. The Value Network may be the mental model that embraces the linear Value Chain Model and that adds an extra dimension for those seeking to make sense of complexity as we see it in organizations and their environment today.

Value Chain Analysis or Value Stream Mapping is a useful tool for working out how you can create the greatest possible value for your customers, as well as your best route to profit maximization.

In business, we’re paid to take raw inputs, and to “add value” to them by turning them into something of worth to other people. This is easy to see in manufacturing, where the manufacturer “adds value” by taking a raw material of little use to the end-user (for example, wood pulp) and converting it into something that people are prepared to pay money for (e.g. paper). But this idea is just as important in service industries, where people use inputs of time, knowledge, equipment and systems to create services of real value to the person being served - the customer.

Furthermore value chain analysis is particularly useful for new producers – includingpoor producers and poor countries – who are trying to enter global markets in amanner which would provide for sustainable income growth. Finally value chainanalysis is also useful as an analytical tool in understanding the policy environmentwhich provides for the efficient allocation of resources within the domestic economy,notwithstanding its primary use thus far as an analytic tool for understanding the wayin which firms and countries participate in the global economy

In most industries, it is rather unusual that a single company performs all activities from product design, production of components, and final assembly to delivery to the final user by itself. Most often, organizations are elements of a value system or supply chain. Hence, value chain analysis should cover the whole value system in which the organization operates.

Within the whole value system, there is only a certain value of profit margin available. This is the difference of the final price the customer pays and the sum of all costs 31 A report on Ambuja cement Ltd. Analysis of value chain

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

incurred with the production and delivery of the product/service (e.g. raw material, energy etc.). It depends on the structure of the value system, how this margin spreads across the suppliers, producers, distributors, customers, and other elements of the value system. Each member of the system will use its market position and negotiating power to get a higher proportion of this margin. Nevertheless, members of a value system can cooperate to improve their efficiency and to reduce their costs in order to achieve a higher total margin to the benefit of all of them (e.g. by reducing stocks in a Just-In-Time system).

A typical value chain analysis can be performed in the following steps:

Analysis of own value chain – which costs are related to every single activity Analysis of customers value chains – how does our product fit into their value

chain Identification of potential cost advantages in comparison with competitors Identification of potential value added for the customer – how can our product

add value to the customers value chain

The below given is the department wise performance of ambuja.

Inbound Logistics

Taking greater control of inbound logistics is becoming a top priority for many manufacturers and retailers. Turning attention to inbound logistics will not only reduce costs, but also a generate more collaborative relationship with internal organizations, suppliers and logistic providers, which will ultimately result in a more effective business process from which all parties will benefit. In my study, i tried to exploit a the system which AMBUJA is using, because efficient and effective inbound logistic performance would benefit all participants in the value chain. I started by investigating the unique features of the inbound logistic system with a comparison of the outbound, and this was then followed by a description of the current inbound logistic operation systems, from both an information flow and material flow perspective. I found that all inbound operations can be categorized into that of traditional demand to supply model to that of the VMI model. In approaching overall supply chain efficiency, a model hypothesis was therefore created as a future oriented solutions. Parameters were also defined to evaluate the performance of inbound logistics.

So the main thing in inbound logistics is how material is get into the factory and how it is managed within the factory.


Material Handling system

In a manufacturing firm, the raw materials are obtained from the suppliers and are stored in the store room. These raw materials are then issued to purchase department and are moved inside the plant from one process to another till they are converted into finished goods.

Thus material handling involves movements of materials from one place to another for the purpose of processing. They are moved either manually or mechanically The job tackled by material handling equipment includes lifting, moving, dropping, positioning ,holding, releasing, stacking etc.

In general course machines at installed at one place. Men have limited area of movement they can only moved from one section to another thus having limited on their movement.

Factors affecting material handling1. Types of the product2. plant layout type of production system3. production planning and control4. packaging5. material handling equipment

Material handling equipment used at GACLGACL have efficient material handling system. GACL have selected most appropriate material handling equipment and the plant layout of GACL is such that there is minimum movement of materials. Various materials handling equipment used by GACL are as follow.

1. Pipelines :It is mostly used at plant for material handling. Gacl uses pipelines for handling of various materials from one machine to another. Pipelines are even used to pass hot gases, which are used to dry up the moisture contents in the grained materials.

2. Pneumatic conveyor :-The pneumatic conveyor is used for conveying all types of dry bulk materials of powdery to fine grained or gritty nature. The pneumatic conveyor unit designed for dust free operation.

3. Aeropol vertical conveyor :-The aeropol vertical conveyor is used for continious handling of dusty & granular materials. This helps in handling the powdered material& passes it from one process to another.

4. Bucket elivator :It is the simple volumetric machine used to elevate the bulk material.

5. Tractors :Used to bring the milestones from mines to plant .These are useful to have an uninterrupted supply of raw material.


6. Tanks :-Used to bring the milestones from mines to plant. Trucks are even used to bring gypsum & coal from the storage area to plant.

Logistics involves 2 major operations1) materials management2) Physical distribution management

The entire process of Logistics (scope of logistics) is shown as below.

Cement, being freight intensive industry, various initiatives had been taken up by GACL to streamline its logistics.

GACL was one of the first cement producers of the country to introduce an Integrated Logistics System (ILS). At each manufacturing unit, a cross functional committee was responsible for the efficient management of logistic functions.


Suppliers

Inventory in the field

Transit Depot

Intermediatory

Customer

Inbound materials flow

Outbound fininshed godds

Materials management Phisical Distribution

LOGISTICS

WIP Productuion

Finishedgooods

The committee met at regular intervals and reviewed the working of the total system. The recommendations were forwarded to the top management for immediate action.

Order Processing Systems

Order Processing Systems involved the flow of information about the orders from generation to order fulfilment. Orders once received, had to be processed quickly and accurately. GACL had linked all the major offices through a Wide Area Network (WAN). Electronic Data Exchange (EDE) and Material Resources Planning (MRP) systems facilitated timely and accurate processing of orders...

INVENTORY CONTROL

Inventory control is the process of deciding what and how much of various item are to be kept in stock. It always determines the time and quantity of various items to be produced. The basic objective of inventory control is to reduce investment in inventories and ensuring that production process dose no t suffer at the same time. To attain various objectives inventory control must.

A. Determine the item to be stocked.

B. Determine when and how much to replenish.

C. Keep suitable records.

D. Weed out obsolete items.

Difference companies use various methods of inventories control such as ABC analysis, EOQ, Maximum and minimum level of inventory etc. Gujarat Ambuja Cement Ltd uses the ABC analysis and XYZ analysis for the inventory control.

Gujarat Ambuja Ltd has not its own inventory control department. It is a part of material department.

MANAGEMENT OF INVENTORIES

Inventories constitute the most significant part of current asset of a large majority of companies in India. Because of the large size of inventories maintained by firms, a considerable amount of funds is required to be committed to them. It is therefore absolutely imperative to manage inventories efficiently and effectively in order to avoid unnecessary investment.


An undertaking neglecting the management of inventories will be jeopardizing its long run profitability and may fail ultimately. The reduction in excessive inventories carries a favorable impact on a company’s profitability.

In G.A.C.L. inventories are stock of the product, the company is manufacturing for sale and components that make up the product. The various firms in which inventories exist in the company are:-

Raw material is those basic inputs that are converted into finished products through the manufacturing process. Raw materials inventories are those units which have been purchased and stored for future productions.

Work in progress inventories are semi manufactured products. They represent products that need more work before they become finished product for sale.

Finished goods inventories are those completely manufactured products which are ready for sale. Stocks of raw materials and work in process facilitate production, while stock of finished goods is required for smooth marketing operation.

In the company, an effective inventory management is there which ensure a continuous supply of raw materials to facilitate uninterrupted production, maintain sufficient stocks of raw material in periods of short supply and anticipated price changes, maintain sufficient finished goods inventory for smooth sales operation, and efficient customer service, minimize the carrying cost and time, and control investment in inventories and keep it at an optimum level.

Operation

Production is the basic activity of all the industrial units. All other revolve around this activity. We can say that production activity is nothing but the step conversion of one from of material into another either chemically or mechanically. The end product of the production activity is the creation of goods or services for the satisfaction of the final Consumer. The production activity is process by which the goods are produced or utility enhanced.

According to E. BUFFA,“Production is the process by which goods or services are created.”

Origin and manufacturing of cement

Cement is one of the most important building materials used thought the world. it was firs discovered by joseph aspdin in England he called it Portland cement.


some of the main cement producing countries of the world are china, japan, united states, India. In India the most important units for the manufacture of the cement are at gujart,rajasthan,orissa, Madhya pradesh, tamilnadu etc. annually India is producing nearly 100 million tones of cement.

The raw materials used for the manufacture of Portland cement are lime stone and clay. Lime stone provides calcium oxide and the clay provides silica, as well as alumina and ferric oxide. The approximate composition of the cement is

Cao 60-70%Sio2 20-25%Al2O3 5-10%Fe2O3 2-3%

The detailed manufacturing process is given below.According to the mode of preparing the raw mix three different processes can manufacture cement.

a) Wet processb) Semidey processc) Dry process

Gacl uses the dry process for cement manufacturing. Selection is based on the fact that dry process consumes less thermal energy and minimizes the pollution. The total process the divided into various stages as follow.

MANUFACTURING PROCESS

The manufacturing process for the cement adopted by G.A.C.L. is as follows:-

(1) MINING: - The limestone is mind from open cast quarry by conventional drilling and blasting method. The blasted material is excavated by hydraulic excavators and loaded into haulage dumpers having carrying capacity of 35 meters. The material is hauled from quarry to the crushing plant for size reduction. Occasionally the limestone is also ripped by hydraulic ripper. Mare is dug out by ripping as it is very soft and loose.

(2) CRUSHING & PREBLENDING: - Limestone as blasted is required to be crushed as it is in form of boulders up to 1.2sq.metre. This is dumped into the dump hopper and pushed into the single rotor impact crusher. Its rated capacity is 600 meters per hour. The main crusher is supplied by Elecon in collaboration with SBM, Austria.

The crushed lime stone is conveyed to preblending yard for pregomogenization of raw material. The single boom stacker, travels on the rail to make linear stock piles having capacity of 48000 meters. Continuous pneumatic flap type sampler samples the input material which is tested on hourly basis for full analysis in XRF lab. The material is evenly stacked on alternatively layers of limestone and marl


to make the ‘chevron’ type stock piles.

(3) RAW MATERIAL GRINDING: - The raw materials are fed to vertical roller mill. The mills are based on KP design and have rated capacity of 220 TPH. The raw material are grinded from 75mm size to the fineness 85% passing through 90 microns. The grinded raw meal is continuously sampled by pneumatic cylinder type FLS made sampler.The grinded raw meal is tested every hour in XRF lab. This is operated in conjunction with QLX system, software supplied by raw materials proportioning calculations. The adjustment of weigh feeder setting is done by computer on continuous basis, so as to match with present targeted value.

(4) BLENDING: - The grinded raw meal is conveyed pneumatically by airlift To The blending silo. The raw meal silo has huge capacity of 12,500 meters which also blends the raw meal with blending efficiency of 7:1? The homogeneous raw meal is extracted from the bottom of silo where it is weighed accurately by weighing system viz. Poldos.

(5) PYROPROCESSING: - The homogeneous raw meal known as kiln feed is fed to5 Stage preheated- kiln of polysius design known as dopol. It incorporates a stage Known as precalciner, where about 50% of the fuel is fried to achieve 90% Calcinations. The calcined raw meal enters the rotating cylinder known as ‘kiln’ (Size -4m dia * 60m length), where it slides down to burning zone.

About 50% of the fuel is then fired here to sinter the raw meal into the clinker in burning zone, the thermo chemical reactions take place and all the oxides are converted into the minerals known as tricalcium silicate, dicalcium silicate, Tricalcium aluminates and tetra calcium alumina ferrate. Different type of Refractories is laid to protect the kiln shell.

Hot clinker is discharge into the ‘Great cooler’ where the red hot clinker is cooled from 1300 degree Celsius to less than 100 degree Celsius by air quenching. The hot air from the cooler is drawn back as secondary and tertiary air as Recuperating heat. Induced draft fans draws about 5 lakh M3 per hour air through the kiln and preheated. This hot gases exchange their heat to incoming raw meal in the preheated cyclones. As a result the gases cool down and the material gets heated. The hot gases from preheated exit are used in vertical roller mill for drying the raw material while grinding.

The cooled clinker is transported to circular stock pile by Deep bucket conveyor. The storage capacity of circular clinker stock pile is about 40,000 MT. The coal used in process is pulverized in a vertical roller mill of KP Design. The fine coal is stored in hopper and transported pneumatically to kiln and Precalciner by separated FK buckets.

(6) CEMENT GRINDING AND PACKING: - The clinker extracted from the


bottom of storage yard is fed to cement mill supply hopper. Another hopper is used as supply hopper of gypsum. The mixture of clinker and gypsum is fed in to the ball mill, operating in closed circuit with polysius design high efficiency separator.

The finished product cement is transported to respective silos by bucket elevator. Cement is transported to packing plant for packing and dispatching. 2 rotary packing machines having capacity of 120 mt/ hour are used to pack the cement is dispatched to various destinations by rail, road and sea transport.

(7) PLANT OPERATIONS: - The entire plant is operated from central control room where the process operating personnel closely monitor, the plant operation on visual display units. The computerized process control system with field instrumentation ensures the steady and smooth operations of the plant.

Flow chart of the cement production process

Mining

Crushing & pre blending

Row material grinding

Blending & kiln feed

Pre heating & kiln cooling

Cement milling

Cement storage packing & bulk loading

This department is situated in the CCR building. The whole process is computerized , where process-operating persons closely monitor the whole plant operation through visual display. Computerized process control system with the field instrumentation ensures the steady and smooth operation of unit. The whole process is displayed on the


computer and any change of problem in the process is easily identified so that necessary steps can be taken immediately.

Plant layout of the GACL

Product layout :As GACL is engaged in producing which is one of the basic industry. The

production process of ambuja only involves producing of one commodity i.e. cement. In producing cement the raw material goes through different process step by step in order to get converted into cement.

As ambuja practices continuous flow of production and the process is arranged based on the product to be achieved, it is organized in a product layout form, which facilitates the production of cement in a systematic way or manner.

Selection of location

GACL is situated near vadnagar village in kodinagar. The location of the plant is very beneficial for its existences as the area is surrounded by lime stone, which is one of the basic raw materials in the cement production. Company is also benefited as the area of the plant site is near the sea cost which facilitates the sea transportation through sea route. Ambuja has also developed its own seaport for transporting cement to other destinations. This has helped GACL to export their product easily through seaport directly thereby increasing export figures of the entire company.

Factors affecting layout of the company:

Location factors are very much important in establishing a cement plant.1. Input :-

In terms of input, about 1.5 tons of limestone is required to produce on ton of cement . Hence location of the plant is based on the limestone deposit. The major cash out floe come by way of royalty and cash payments. India’s estimated total reserve of cement grinding stone is about 90 billion tons.

2. Power :-It is used in raw material grinding. Clinkerization of limestone is done in the kiln operation and then clinker is grinding with gypsum to form cement. Thes older plants required 120 to 130 unit per ton of cement produced, while modern energy efficient plants consume 80-90 units per ton. Cement manufacturing is continuous process, so quality of power plants is important.

3. Coal:-Coal is another major input, which along with electricity forms 40% of total cost is used not only as fuel in the kiln but also to burn the lime stone, on an average 250 kg of coal is required to produce one tone of cement. There is a several coal shortage for the industry. The coal is generally imported from certain African countries, which are unloaded at companies muldwarka port that is near to the factory site.


4. Labour :-On growing modernization of plants, the requirement for skilled manpower has increased then that of unskilled manpower. The cheap availability of labour from the near by areas has proved to be great help for the company.

5. Transportation :It is a very important thing to be kept in mind while deciding the location. It cost widely affects the overall cost, the seacoast is one of the important transportation modes for exporting companies, the company has its own jetty at muldwarka. This reduces cost of transportation for the company.

Production planning & control:

Production planning & control are the two main aspects of production. Production planning is prerequisite of production control. Production control cant be imagined without production planning.

Production planning is the function of management to look ahead.,anticipated difficulties and take steps to remove obstacles before they are materialized. Where n unit is contantly evaluated and compared with standards set in advance.

At GACL production planning is jointly done with dispatch department on the bases of order and dispatch for the next month provided by dispatch department production department plans production and its operations. And on the basic of production planning, department strict control on the production activity and continuously evaluated the performance is monitored throughout as the entire system is computerized.

OUTBOUND LOGISTICS

In recent years companies and academic organizations have focused on outbound operations due to their being the customer-oriented part of the business whereas the control of the inbound operations was generally left to the suppliers. But now outbound operations have become streamlined and extracting additional benefits has become more and more difficult.

CONCEPT OF DISTRIBUTION

Distribute means to spread out or discriminate. In the field of marketing channel of distribution indicates routes or wags through which goods and services flow or move from producers to consumers.


We can define formally distribution channel is a set of marketing institution participating in the marketing activity involve in the moment of the flow of goods or services from primer producer to the ultimate consumer.

CHANNELS OF DISTRIBUTION

Channel of distribution is a route or path through which goods transferred from the place of production to the place of consumption. In other words channel of distribution is a pipeline by which customers or users can obtain product which can satisfy their needs.

The producer cannot himself go in the market for selling his each unit of production, because he has no such time and again it cost too much to go in the market and sell his product. For this difficulty they take the help of middlemen who supply producer’s goods to consumers. The middlemen include wholesaler, retailers, dealers, agents, distributors etc. those are middlemen who are well acquainted with the position of the market and hence they can distribute the companies’ product easily.

A distribution channel moves goods from producer to consumer. It overcomes the major time place and possession gaps that separate goods and services from those who would use them. Members of the marketing perform many key functions which are outlined below:-

Help in production mix.

Financing the producers.

Promotional activities.

Stabilizing the price.

Matching demand and supply.

VARIABLES USED IN THE STUDY OF MARKETINGCHANNELS AND DISTRIBUTION OF THE COMPANY

The company used both direct as well as indirect channels of distribution. Since it is a consumer oriented product. Beside it is used by all types of people including rich, middle and poor. So it is necessary to take into consideration from the opinion of all types of people who are going to use these products. It is a kind of product which is used by all types of people irrespectively. It has high demand because it has been used for the construction of building, bridges, dam etc. so the respondent of this product is almost all


types of consumers and most of the sales are done through middlemen like Stockiest, sub-stockiest, retailers etc and so on.

Almost all the middlemen are involved in distribution channel either directly or indirectly. It is a product which cannot be sold through direct market. It is being sold through indirect sale only, because the manufacturer has no direct contact with the customers. Therefore it is necessary to obtain information from various middlemen like dealers, sub-stockiest etc.

Thus, GACL has following organizational chart

PHYSICAL DISTRIBUTION

MEANING AND IMPORTANCE OF PHYSICAL DISTRIBUTION

MEANING:-

Physical distribution means the distribution of goods and services from the point of production to the point of consumption. Here the goods are made available to the ultimate users through proper distribution. Physical distribution of commodity of commodity represents. Those activities which create time and place. Utilities in the process of the actual movement of goods from producer to consumer. These activities are key link between producers and consumers and are performed by the producers, middlemen, and a buyer is varied degree.

Proper physical distribution is to control or distribution increase in sales volume, Co-ordination of demand and supply stabilization of price, effect on size of inventory etc.

Physical distribution includes various activities viz. transportation and storage inventory etc.


Manufacturer

Stockist/dealer

Sub stockist

Retailer

Consumers

PHYSICAL DISTRIBUTION OBJECTIVE

No body can carry out any activity without objectives for e.g. The Company is incorporate to earn profit after production and sale of goods. The company selects good pricing policy with the objective of creating monopoly in the market. In other words objective provides backing to the company by which it try to achieve it objectives.

Physical distribution objectives as getting the right goods to the right place at the right time for the least cost. Following are the main objectives of Gujarat Ambuja Cement Ltd.

To minimize the cost of transportation.

To minimize the cost of handling.

To control over inventory.

To maximize customer service.

To follow good order processing system.

To make goods available to the customer at the right time and place.

IMPORTANCE OF PHYSICAL DISTRIBUTION

In modern business world, the problem of physical distribution is being given more attention than before. Because the cost of distribution is the major part of the total cost.

The total cost and the selling price can be minimized by controlling the physical distribution activities.

Under the efficient system of physical distribution a detail analysis of transportation and storage cost is made in view of controlling or minimizing the distribution cost.

Physical distribution aim at increase the sales volume by inventory control. It reduce the quantity of stock held by the consumer if he is assumed of the regular supply

Physical distribution facilitates the co-ordination between the demand and supply


The industry producing cement having daily demand. The product is produced daily and supplied everywhere.

Check and modern transportation system makes it possible to transport the goods to the consumer place in time

E valuation of channel distribution

After noting carious channel alternatives which alternatives would best satisfy the long term objectives of the firm taking in view the factors which would effect the channel decision for this purpose, which alternative must be related against eaconomi,control and adoptive criteria.

1. Economic criteria :For evaluating the effectiveness of channel of distribution the economic criterias are most important since it forms the affects the profit. That how much it will cost.

2. Control criteria :In evaluating the channel the second main consideration is that of control i.e. how usual the marketer be in a position. Is it controllable how to control them.

3. Adoptive criteria :

The next consideration in channel decisions is to see whether the channel would be suitable to adopt the changing conditions in the future.

Evolution of physical distribution can be carried out with the help of effectiveness of each step of physical distribution.

Here in Gujarat Ambuja Cement Ltd first of all, order processing system is followed, therefore they can devate their times towards orders of buyers. Secondly, warehouse is available besides the production department which reduce the transportation cost also, the company has inventory control department which determine inventory level. The company uses Road, Rail and Sea way of transportation modes.

SALES AND DISTRIBUTION PROCEDURE

The major activity of sales and distribution department is to receive order from sales officer, dispatch cement as per order received through proper transportation mode.Dispatch procedure:-Company has adopted following procedure for dispatching of goods for orders received.

Receiving of orders:-


It is the responsibility of marketing officer to collect the orders from the customer. These orders are collected by phone, letters, e-Mail, fax etc.

Processing of orders:-Whatever orders are collected is send to the unit through E-mail and Fax

total information of the order are stored in the computer. Now this order is send to the booking office and a copy of this is send to transport office.

Dispatch programme:-When the transporter gets the copy of order, he sends his vehicle with the

memo. Memo includes information regarding type, quality, quantity of cement and distance to the place.

Dispatch order:-When the truck of the transporter comes to the unit, driver has to receive a

dispatch order in which all the information about goods is included.

Loading process:-After receiving dispatch order, driver which reaches the packing house,

where firstly the empty truck is weighted and then it is loaded with bags and again it is weighted.

Gate pass receiving:-After loading bags of cement, truck driver receives gate pass which is signed

by authorized securities and then only truck is allowed to go outside the factory.

Vehicle Trip Card:-This is the new kind of process that is followed by G.A.C.L. Under this

process driver of the vehicle is given a form under which he has to submit to the receiver of the goods. The party receiving has to enter the Date and time of receiving the goods and the total time taken to unload the goods and time of dispatch of truck from his destination.

The format of the trip card is given in the annexure:-

Truck Khoj.com :-

This is also a new process that is followed by G.A.C.L. In this process the driver of the truck has to stamp a card that is being provided by the company in various locations where the depot machine is kept.

By following this process company comes to know the time take for the truck to pass a certain destination and would easily keep a track on the truck.

Transportation process:-


Transportation takes place by three modes which are roadways, Railways, and sea transportation.

1. Road Transportation:- G.A.C.L has assigned three transport companies which are:-

Rajmoti transport.

Auto hire transport

Abshiek transport

All the three has been divided and allocated their area of transport.

Rajmoti - Junagadh, Jamnagar, Sabarkantha, Kheda & Mehasana.

Auto Hire - Amreli, Rajkot, Valsad, Surat, Panchamahal, Gandhinigar &Ahmedabad.

Abhishek - Kutch, Bhavanagar and Baruch.

Flow chart of distribution through road


Order through IT/FAX/INTERNET

Order receipt and processingTransporter Collection memo

Security and Booking office

Weidge in

Packing/loading

Security count

Weight out

Loading memo

Security check out

Excise invoice

2. Rail Transport:-

Ambuja has constructed its own railway siding and it runs from Vadnagar to Kodinar and from Kodinar it reaches different place. But nowadays G.A.C.L. is not using this mode of transportation much.

FLOW CHART OF RAIL DISPATCH

Rake programmed Coordination & licensing From mktg

Procedure Bhavnagar Siding Kodinar Packing Plant House

Indent to railwayPayment of wedge and demand registration

Communication to branch priority wise dispatch program

Supply the stock to agaryDistribution through FOR bases to stockist

Loading the wagons

Payment of freight


Movement of loaded rail

Sea Transportation:-Water transportation being a cheapest source of transport, G.A.C.L. has developed its own jetty at Muldwaraka (Kodinar), Panvel (Mumbai), and Magdalla (Surat).

Port Terminal

Muldwarka, Gujarat: All weather port, 8 kms from our Ambujanagar plant. Handles ships with 40,000 DWT. Is also equipped to export clinker and cement and import coal and furnace oil. A fleet of seven ships with a capacity of 20500 DWT ferry bulk cement to the packaging units.

Bulk Cement Terminal

Surat: Bulk Cement Terminal with a storage capacity of 15,000 tonnes has bulk cement unloading facility.Panvel: Strategically located near Indias biggest cement market, has a storage capacity of 17,500 tonnes and a bulk cement unloading facility.Galle: 120 kms from Colombo, Sri Lanka. Handles million tonnes of cement annually. G.A.C.L. transport cement from Muldwaraka to panvel and Magdalla.G.A.C.L. also has its own seven ships namely:-

1) AMBUJA KIRTI.2) AMBUJA SHAKTI.3) AMBUJA VAIBHAV.4) AMBUJA SHIKHAR.5) AMBUJA GAURAV.6) AMBUJA LAXMI.7) AMBUJA BHAVANI.

FLOW CHART FOR DISPATCH THROUGH SEA


Planning

Factory Muldwarka(Unloading in silo)

Mechanical equipment used for import & export purpose in Ambuja to fasten the movement of goods and have access to the area where labor can’t reach.

Bucket elevators Scru conveyer Belt conveyer Air slide ( for short distance only) Cement Blow pump (for stand by use when other equipment are under

maintenance) Tug (to pull/push the loaded ship capacity : 40000 tones at a time) Silo (for storing the cement temporary capacity: 5000 tones)

Thus the development of physical distribution facility has made the production feasible through the year at lower cost of production and distribution.

Reason for the Delay in dispatch

Constraints in sales & distribution

1. Order fluctuation2. Non availability of required number of trucks/fluctuation due to

Less incoming material Seasonal effects Demand of trucks in nearby areas Freight constraints

3. Movement bottlenecks4. Abnormal detention at unloading point5. Multiple deliveries6. Distance exceeding in two point deliveries7. Too many diversion cases

8. In accessible destinations having poor road conditions

WAREHOUSING FACILITY

Every company must store goods properly until they are sold. Warehousing means the functions of the company. Here goods produced are brought and packed accordingly. Then these packed goods are stored in warehouse in such a way that it becomes easy for the company to supply it to their customers as when required. Some companies possess their own warehouse while other may use public warehouse for which


ExportDomestic

Panvel Magdala

they have to pay rent. Warehousing is very important since it preserves the valuable goods of the company from spoiling, the insects, theft etc.

The Gujarat Ambuja Cement Ltd has three SILOS for the storage of cement at the nearest place of production. The capacity of each SILO is 5000 tonnes. The company has its own dumps at different places. The cement is stored in dumps when they receive orders immediately they execute cement from dumps.

TRANSPORTATION

Transportation in value chain refers to efficient and price sensitive movement of final finished goods from source to destination the physical distribution aims at 7 R’S In transportation

RIGHT PRODUCTRIGHT QUALITYRIGHT CONDITIONRIGHT TIMERIGHT PLACERIGHT CUSTOMERRIGHT COST

Here from my observation it is clear that AMBUJA is fulfilling all the 7 R’s

Transportation attempts at fulfilling 3 r”s out of 7 R’s of physical distribution i.e. right product at right time at right place.

# M ode of transportation

ROAD RAILWAYS ROPWAYS WATER AIR PIPE LINE INTERMODAL

Ambuja is using rail road rop ways and water for transportation out of that it is very efficient in sea transportation.

Action plans

To ensure execution of orders within 48 hrs To ensure adequate availability of material at muldwarka terminal as per ship

planning


To plan & monitor the tanker movement to bring down the cycle time to minimum 10 trips per tanker.

Better co-ordination ,fed back with marketing branches. To comply with all statutory requirement/ documentation ,to avoid unnecessary

pressure/ action by Govt. authorities , for non-compliance. Effective liasoning with the concerned Govt. officials. To study the activities of nearby plants To co-ordinate and monitor unloading operation of material trucks for speedy

unloading.

Marketing & sales

Marketing is a comprehensive term and it includes all resources and set of activities necessary to direct and facilitate the flow of goods and services from producer to consumer in the process of distribution. Businessman regards marketing as a management function to plan, promote and deliver products to the clients or customer. Human efforts, financial management constitute the primary resource in marketing.

Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange the satisfy individual an organizational objectives. Marketing management usually represent all managerial efforts and functions to operate the marketing concepts not only in letter but also in spirit. Marketing concept demands customer oriented marketing plans, programme and policy so that the marketer can assure perfect positive correlation between the supply and demand. The survival and growth of any business depends upon profitability and when marketing management becomes a good practitioner or marketing concept profitability and growth are duly assured.

The marketing department is situated in our country as well as in foreign country. The head office of marketing department is at Mumbai and at Baroda, Surat, Ahmedabad, Rajkot and Bhavanagar.

NEED FOR MARKETING OF CEMENT :

Some of the factors like competition create awareness of product to customer, market penetration to achieve goal for selling in particular segment, to establish good image of the brand of product to customer, tec. Are driving force behind marketing task. As additional companies are coming up in the sour then region, and eastern region there is stiff competition among cement producing companies. This companies. This companies need to adjust themselves to changing situation by upgrading


the technology, widening product range, developing new market segments, improving existing channel of distributions etc.

Essentials of cement marketing1. Focus on brand name2. Effective differentiation 3. Effective public relations4. Price differentiation5. Strong distribution network

GACL has created marketing department in Gujarat,maharastra,rajasthan, etc. states of country as well as in foreign countries too. The head office of marketing department is at mumbai, which looks after the marketing of all regions centrally.

In Gujarat GACL has created its own office at rajkot,bhavnagar,baroda,surat and ahmedabad.

To identify the wants and create customer satisfaction through product innovation, product quality and customer service GACL takes assistance of sales representative. The marketing department of GACL is a comprehensive one which helps GACL to withstand the severe competition persisting in cement industry.

Objectives

The following are the objectives of marketing department at GACL

1. To find new & new customers to sell them more & mor of companies product.2. Try to Convince the customer about better & quality product.3. To provide a successful distribution of consumer product.4. To study the market problems according to circumstances & suggest the solutions.5. To sell their products in new areas to make new customers & satisfy old ones.6. To encourage the customers & know the fault in their products & then try to

make quality or faultless product.

Dealers / customers satisfaction

Due to cut throat competition in market importance of customer has increased .Now a day sellers are more in numbers while users or consumers are less in numbers.

Therefore, it is essential for producer to know the satisfaction level of his product. The promoters & service coupled with delivery schedule , high quality, right price & maintaining customer relation.

In GACL the level of customer satisfaction & as well as dealer satisfaction is very good. It is due to reason that the product is of high quality services, delivery in time.


PRODUCT PLANNING

The product is the most tangible and important single component of the marketing programme. The product policy and strategy is the corner stone of a marketing mix. Without a product, there is nothing to distribute, nothing to promote and nothing to price. To the marketer, products are the building blocks of a marketing plan.

Good products are key to the market success. Product decision is taken first by the marketer and these decisions are central to all the other marketing decision such as price, promotion and distribution. Product is the vehicle by which a company provides consumer satisfaction. It is the engine that pulls the rest of the marketing programme.

A product plan is a company plan for marketing its products the company lay down the product objective, develop a product design to achieve the set objectives and have a product programme suitable to the product’s position in the life cycle. Product plan involves a number of issues to be resolved: -

Product mix.Product item :

A single product the product item of GACL is cement.Product line

G.A.C.L. is producing mainly Ordinary Portland Cement (OPC). But as need

arises i.e., according to the demand, it also products other brands of cements.

ORDINARY PORTLAND CEMENT: - It is a chemical product obtained by the preliminary mechanical mixture of carbonate of lime with silica and alumina, which after passing through the succeeding stages of manufacture, results in a combination of silicates and aluminates of lime. This material possesses the delicate grey colour of Portland stone, and thus is known as Portland cement. Its fineness is 2958cm/gm

There are three types under this category:-

A. 33 GRADE: - Compressive strength at the end of 28 days is 330 kg/ cm. Now-a-days this type is considered to be outdated. It is used for normal construction.

B. 43 GRADE: - Compressive strength at the end of 28 days is 430 kg/ cm. usually; this type of cement was in regular use before 5 years. It is also used for ordinary construction.

C. 53 GRADE: - Compressive strength at the end of 28 days is 530 kg/ cm. Due to recent research and develops of cement technology; we can achieve maximum strength within definite period. This type is highly


demanded in the market, so OPC 53 grade production is in usual course for prestressed concreting works.

PORTLAND POZZOLANA CEMENT (PPC):- Pozzolana material like brick powder is added extra in the preparation of it. In this cement, the strength at initial stages up to 28 days is very low but afterwards i.e. near about after 1 year, it will get more strength than OPC. As the initial period is low, it is used only in long course constructions like dams & heavy foundations. Its fineness is 3860 cm/gm.

Packing.Labeling.Branding.Service after sale.Organizing for product planning and development.Product research and improvements.

Mainly GACL produces ordinary Portland cement (OPC) but according to the demand, it produces other types of cement that is Portland pozzoland cement (PPC), high strength ordinary Portland cements (HSOPC) and 53 grade cement and a special brand for railways.

At GACL, quality is given close attention. The test of quality and strength of their cement is done regularly. The tests have shown that Ambuja Cement has got the highest comprehensive strength which is above the specification of ISI and is of international standard.

The quality policy adopted by GACL is “Do it right the first time” on product planning, the product which has got the highest demand and which is most profitable one is prepared by the company. Mainly OPC which is very economical is produced but whenever specific demand arises they produce accordingly. In the recent past Narmada Project had demanded PPC and it was supplied by GACL.

MARKET PLANNING

Marketing management is responsible to formulate comprehensive marketing plan indicating objectives to be achieved and future course of action. To accomplish the predetermined targets.

The marketing plan is the main operational and controlled document of marketing department. It gives intelligent direction of marketing operations. It can inspire marketing staff to reach the target as per plan. Progress can be measured against set goal. There will be no confusion and misunderstanding between marketing executives. All department plans can be integrated with each other.


GACL also does marketing planning. Usually there are long range plans covering 5 to 10 even 15 years. The planning period is of 3 to 5 years. The first two years are covered in details. Also project plan for a period of 1 or 2 years are there which cover specific projects outside the normal marketing field like introduction of a new product, launching of a special campaign.

In the company marketing planning is done in order to have bright future. Its planning process usually begins with the review of current market situation through situation analysis. The marketing process adopted by the company is as follows:-

Marketing opportunity analysis – providing analysis and assessment of marketing opportunity

Preparation of marketing objectives – to match the marketing opportunities in a competitive marketing.

Marketing strategy providing marketing segmentation and market share is prepared.

Marketing mix involving, price, promotion and distribution strategies.

Controlling of the marketing plan is done to achieve accomplishment of marketing objective

According to the company, planning is important but planning is not their end as it only a means. It should not be tended to become an end in itself, because in reality performance is critical and achievement of objectives is the ultimate goal.

MARKET SEGEMENTATION

The behavioral signs have developed multi dimensional concept of buyer behavior and indicated that all buyers are different. Marketer recognizes the importance of heterogeneous demands. Hence, they are keenly interested in sub dividing or segmenting the market is that each segment can be group of people with similar or homogenous demand and the enterprise can offer tailor- maid marketing mix for each market segment.

The marketing segment is a meaningful buyer group having similar wants. Segmentation is a customer oriented marketing strategy. Market segmentation gives formal reorganization to the fact that wants and desire of consumer are diverse and we can formulate a specific market offering to specific category or segment or the market so that supply will have best correlation with demand. Varied and complex buyer is the root cause of market segmentation.

GACL also has done market segmentation by considering two different areas. Firstly on the basis of geographical area and secondly on the basic of consumer.


On the basis on consumer segmentation, GACL has divided the market into three segments.

1. GOVERNMENT 10%2. CONTRACTOR SEGMENT 15%3. GENERAL PUBLIC SEGMENT

(i) Institution 13%(ii) Trade 62%

1. Government segment:Govt. & semi govt. agencies are the largest consumer contribution about 25-30% of all India cement consumption. special quality cement is asked at time for railways ,ONGC, and irrigation department etc.

2. Contractor :It is the second largest & very efficient segment in cement marketing of builders generally purchase in a large quality so price & credit policy plays a vital role for this segment.

3. Trade segment : It covers the biggest segment which cover about 60% of Gacl market it is segment of retailers where brand identification quality of the product play very important role.

4. Institution :This segment covers the industrial units and public trusts.so relationship plays big role for this segment.

Based on the geographical segmentation, there are two parts:-

1. MUMBAI 2. AHMEDABAD.


Mumbai covers the area of Maharashtra, Madhya Pradesh and Rajasthan. While Ahmedabad covers the regions in end surrounding Gujarat.

All the districts of Gujarat as well as other states are regularly visited by sales representative. The vice president (Marketing) at Ahmedabad has to keep coordination with all the regional offices situated at Rajkot, surat, Baroda, Bhavanagar, Mumbai. Month wise planning programmes are done.

Dispatching of products is controlled by the cement manufacturing association (CMA). Thus the even segmentation has helped GACL to become the market leader in cement industry.

CONSUMER BEHAVIOUR

The aim of marketing is to meet and satisfy target customer’s needs and wants. But knowing customer is very simple. Customer’s may state their needs and wants but act otherwise. They may not be in touch with their deeper motivation. They may respond to influence that change their mind at the last minute.

In earlier times marketer could understand consumers through the daily experience of selling to them. But the growth in the size of the companies and markets has removed many marketing managers from direct contact with customers. Increasing manager has led to relay on consumer research for the answer to the question like:-

Who constitutes the market?

What does the market buy?

Why does the market buy?

How does the market buy?

Who, when and where does the market buy?

The buyer’s characteristics and decision process leads to certain purchase decisions. The marketer’s task is to understand what happens in the buyer’s consciousness between the arrival of outside stimuli and the other buyer’s purchase decision.

GACL to understand the importance of consumer behaviour. It always tries to understand the changing needs of consumer. It always manufactures products on the basis of patterns approved by the consumer.


Moreover the company has got regional offices at Surat, Rajkot, Bhavanagar, Ahmedabad and Bombay. Where special officers are appointed for remaining constantly in touch with the consumer in order to understand their needs.

So we can say that good understanding of consumer behavior is the secret of GACL’s great priority.

PRICING POLICY

Price as an important element in the marketing mix. Arrival at the right selling price is essential in a sound market. Right price can be determined through pricing research and by adopting the rest market technique.

A price policy is the standing answer of the firm to recurring problem of pricing. It provides guidelines to the marketing manager to evolve appropriate pricing decisions. If competition is mainly on a price basis then each company generally prices its product at the same level as its competitors.

During the earlier days cement was under the control of government but now it has been decentralized. Hence the company is free to set its prices it does not mean that consumer exploitation is possible because there is always cut throat competition in this field.

Pricing policy formulation is done in this company also. Cost of production, distribution, sales promotion, advertising and market expenses are all considered while framing the pricing policies.

The present price of Ambuja Cement is approx is Rs.200 per 50kg bags. GACL also follows policy of resale price maintenance is that all the retailers are bound to sell their brand of goods at a fixed retail price decided by them. No retailer can exceed the limit fixed by the manufacturer.

Also various incentives and discount are provided to the stockiest by GACL in order to increase their sales.

Thus GACL follows 2 types of pricing policy. 1. Cost oriented pricing :

It is the simplest method for price. It also says as cost plus & target pricing Generally retailers are using this method. GACL keeps the following point in mind while deciding on cost base.In addition to manufacturing cost the added costs are.

Sales promotion cost Distribution cost Advertising cost Promotion cost


Other marketing expenditure

2. Competition oriented pricing :In this policy price is set in accordance with competition prevailing in the market. This method is applied when there is higher competition.In cement market the price of the cement charges time by time. As the owner of cement manufacturing units associated themselves in a group there avails high product of price charge, the associated fixed up price as per cost of the product on, transportation cost, excise duty , 10% profit etc. hence it plays a vital role in pricing policy.

Now a days, government has no any control over the cement prices as a result of this each organization adopts its own pricing policies. In GACL pricing decision are taken by consideration on following aspects.

a. Cost of productb. Add expensesc. Distribution costd. Market conditionse. Sales production cost

This method is applied where there is high competition in market. Credit facility

GACL gives 30 days of credit facility to reputed and regular agency.

DiscountGACL gives 2% of cash discount if the payment is done within 1 week.

Promotion Mix

GACL promotion is combination of two strategies i.e.1. Sales promotion2. Advertisement

Sales promotion :Definition:

To communicate with individuals,groups or organization to directly or indirectly facilitate exchanges by informing and persuading one or more audiences to accept and organization’s product.

With the indent of open market cement as commodity is now shifting towards being new way to convince the customer to purchase their brand. Thy are positioning their products stressing on specific attribute which customer consinder as important e.g. strength,reliability water requirement etc. and are formulating their promotional strategies accordingly.


Objectives to be achieved by the GACL through sales promotion are :1. to stimulate the buyer for purchasing the product2. to consider the type of market,competitive condition of market.3. to give incentive to customers.4. to enhance the value of the product to the custmer.

GACL adopts various types of sales promotion tools like discountsmgiftsmand some other incentives and sometimes company send their dealers and distributors on tour.

GACL has 3 levels of sales promotion: at a Dealer level at a salesmanlevel at a consumer level

1. At a Dealer level :Company prefers dealer who daels with GACL only.Dealer being the direct link between the customer and company,sales promotion applied on them provides fruit full results.GACL provides following schemesl

o Depending upon sales turn over of a particular dealer,certain incentive is provided.

o Company arranges film show for dealer & their families.o Foreign tour is also arranged for them.o Picnic is arranged for all dealers of a particular region.o Calendars,diaries etc. are provided to dealers .

2. At sales man levelDifferent attractive incentives are provided by GACL to its salesman for increase in sales volume to their target. The target is fixed for each and every salesman and he is able to achieve it, he will be awarded some gifts or monetary rewards and thus motivated.

3. At a consumer level :Gacl explain its consumer about different types of cement. They explain that what are the other cement and what is ambuja cement. Consumers are ensured with number of benefits when they use ambuja cement and cash discount also in certain situation many atimes; consumer also gets like diaries, ball pens,calendars etc.

GACL occasionally arranges consumer camp so that they can get information about the company & its product. GACL also arranges training camp masons,architecture,builders etc.

Thus we can say that sales promotion is not expenditure; it is an investment which provides a lot of rich divident. Thus it is integral part of manufacture in efforts.

ADVERTISING


The advertiser or sponsor wants to persuade and induce the reader, viewer or listener to take some action. To buy the advertise product so that the advertiser can have profitable sales.

Advertising can be defined as mass paid communication of goods, service, or ideas by and identified sponsor. It is paid communication because the advertiser has to pay for the space or time in which this advertisement appears. Advertising appear in the recognized media such as news paper, magazines, videos, television, and cinema films etc.

Advertising is non - personal salesmanship performance similar functions like personal salesmanship. It is silent but forceful salesmanship. It is responsible for creating and has made possible tremendous industrialization and economic development in many countries. It is the back bone of modern national and international marketing.

Modern advertising informs, guides, educates as well as protect buyers, so that they can buy intelligently and raise their standard of living. In the marketing programme of a business enterprise, advertising is an indispensable tool supplemented by salesmanship and sales promotion. It is t business what steam, electric or nuclear energy to the industry. The wheels of industry and commerce cannot move with desirable speed without the propelling power of advertising.

Cement industry has got many competitors. GACL has got a separate advertising department. This department fixes the advertising budget for every year.

Almost all the Media like print media, news paper, magazines, periodicals, outdoor Medias; posters etc are used by GACL for the company’s advertisement.

GACL having its own full fledge advertising staff. GACL has given advertising contract to private agency named “TRIKAYA GREY “, this agency looks after all the function regarding advertising. When company wants to advertise its product chart of advertisement and put it before personnel management. The executives select proper chart form various options and send it to advertisement through a selected media.

Functions of trakaya grey Designing the advertisement campaign Deciding advertisement media and doing media scheduling Using through various media

MARKETING RESEARCH AND DEVELOPMENT

Learning more about consumers and dealers and about marketing mix generally is the heart of marketing research. Marketing research is the systematic and intelligent investigation or study of the “Who, What, Where, When, Why and How of actual and potential buyers”.


It deals with research of customers demand e.g.: behavior and attitude of customers and dealers at the market place analysis of sales data, analysis of market share of a firm, etc. market research is primarily concerned with investigation, analysis and measurement of market demand.

Marketing research is directly interested in offering sound alternative solution to all marketing problems relating to exchange of goods and services from producer to consumers. Beginning an end of marketing management is marketing research. In the dynamic economy marketing research acts as the investigative arm of marketing manager.

In GACL, following items of study and analysis are included in marketing research:-

Size of the market.

Geographic location of customers.

Demographic description of customers.

Market segmentation on the basis of age, sex, income, education, nationality, standard of living etc.

Analysis of market demand.

Sales analysis by customers, territories, product.

Consumer needs wants, habits and behavior.

Dealer wants and preferences.

Degree of competition and the market trend.

The company has developed a separate department which carries out marketing research and development. It even carries out research at regular intervals with the help of professionals.

It conducts personal interviews as a part of survey method. Where has channel of distribution, advertising strategy etc. is research by experimental methods?

Improve quality and productivity is the benefit derived from research and development.

INTERNATIONAL MARKETING


In the last decade of 20th century many companies all over the world have started developing global marketing plans. Both time and distance are rapidly shrinking on account of intensive and faster satellite communication, speedy transport and free financial flows.

International marketing points out that world market are being driven towards a converging commonality i.e. consumer demand round the world tends to have similar needs, desires and expectations for the same product. The global product will be standardized by ISO, indicating total quality management and there will be reasonably priced to satisfy substantial market segments covering many countries with common or similar needs and desires.

International marketing follows the same basic principles as domestic marketing. Marketing principles are common and are applicable weather a marketer sells in Bombay, Nairobi, New York, Paris or London.In any market we need the blending of four ingredients of marketing mix so that product, price, promotion and distribution. We must have a good product, fair price, effective promotion and proper distribution.

GACL also does international marketing of cement. It has got jetties at Mul-Dwaraka, Surat, Panvel, and Magdalla. It exports cement to Sri Lanka, South Africa, Mauritius, and Gulf countries.

CONCLUSION

EVOLUTION OF CHANNELS

Evolution of marketing channels implies evolution of channel members. The producer must regularly check middlemen performance against such standard as sales quota, average inventory levels, customer delivery time, treatment of damage and test of goods etc. the company should recognize reward to middlemen who are performing properly should be helpful.

Here in Ambuja Cement Ltd sales orders brought by customers through agent and then comparison is made and decision is taken that who is performing well and who is performing poor. Consumer is working intimately and regularly with good manner.

FUTURE PLANS

1. Minimizing rejection of product.2. Maximizing market share3. Optimizing the use of raw materials4. Giving maximum satisfaction to the workers as well as customers5. Increasing export6. Increasing production capacity.


RECOMMENDATION

Gujarat Ambuja Cement Ltd is profit making company. It works smoothly since its establishment. Here, the company follows all the principles of physical distribution. The company follows other processing system, it has own warehouse beside production department, it has inventory control department as a part of material department etc. therefore; there is no any recommendation in respect of physical distribution of the company. However the company is making profit, recommended to the company for the development of own channel members rather than depending on agents. It gives discount on sales to the channel members.

Company has a wide market in all over India. I recommend to the company to develop its own channel members for developing and covering own markets.

Ambuja has always tried to add value at :

1. PRODUCTTechnically superior product

2. PromotionClear & effective promotion & advertising

3. PriceUniform prices & better value

4. PlaceStreamlined logistics to give fresh & regular supplies

After sales services

Service increase the value of the entire product to the final consumer . specially in cement like product being commodity quality doesn’t matter much what matters is product as per specification and after sales services. Competitors too are very sharp in the cement industry the only way to differentiate and set a bench mark is the after sales services

GACL provides services to customer in tremendously helpful way it has created different departments for that like CUSTOMER SUPPORT department which has number of civil engineers to provide testing facility and technical support to the customer.Recently in earthquake time these engineers has provided technical guidelines in terms of seminars for topics like consistency and strength in construction and also have provided construction guidelines to people free of charge.

Direct customer of sales & distribution is Its transporters who are like blood of sales & distribution who keeps the product moving ambuja has special arrangements for them. It has set up special canteen and seating facility form them GACL has arranged its system such that the drivers don’t have to wait more for loading and unloading too at


discharge station . it provides entertainment facility to truck driver to enjoy their wait time. This is the only reason why truck drivers are happy to work for GACL at low charges even because they can do more trips in day due to less wait time and GACL payment to them is on time.

So we can say GACL has mechanized after sales service the major activities done by GACL as a tool to enhance its after sales services is as follow :

Set up complaint redress committee of experts. Seasonal seminars by technical experts Quality exhibitions Construction guidelines by civil engineers.

Its concrete testing lab and the enginear’s staff is famous in the whole world. The Facility provided by this department is show in the browser given in the annexure…..

Supporting activity

Environment control

ACL is spending more than Rs. 5500 million to install the pollution control equipments, like glass bag house, hot ESP and bag type pulse jet dust collector at various locations, in addition to this, we are spending around Rs. 10 million per annum to maintain above equipments.

These equipments are properly operated and maintained continuously to keep the emission levels much below the norms, specified by Gujarat pollution control board and central pollution control board.

All the efforts are done to make the atmosphere environment friendly, we have planted more than 81000 trees in and around the plant premises to maintain the ecology. Flourishing rose garden set up in the middle of the plant is an evidence of out efforts and awareness of environment management and control.The basic control area

Dust pollution Diesel generator Thermal power plantThe 3 main type of pollution1. Air pollution

To control the air pollution through arising from 1. source emission2. festive emitionto measure it gravimetric dust sampler , personal sampler and IMR Gas analyzer is usedto control air pollution technique of spreading water, planting and bag filters at various station in plant and bag filter for inside plant is used.

2. Noise pollution


For measuring the noise level in plant the sound level meter is used.For controlling it Noise barriersFor uncontrolled noise personal protecting equipment for every employee working in plant is used

3. Water pollutionSewage water reclamation plant (SWRP) Is used and sludge coming out of it is used as manure in plantationFor drinking water cleaning PH,TDS,HEARDNESS,CLORIDE CLORINE etc are checked for safe health of the employee.

For controlling ambient quality monitoring of SPM (Suspended particulate Mattel) is done and steps are taken to control the reparable

I TOO CAN MAKE A DIFFERENCE

Pollution deforestation, green house effect, ozone hole…… Big names for big problems. But the solutions are not all big & complex.

Small actions can make a difference to these big problems. They alone will not solve the problem, but they will help.

Show your concern, Show your care.

ACT NOW

To make a difference for our environment.

ENVIRONMENTAL POLICY Gujarat ambuja cement limited, a large manufacturer of different types of cements is committed to project environment and achieves sustainable development through a well structured environmental management system is all the spheres of our activities at Ambuja Cement plant and captive mines.

We therefore shall strive to: Adopt ecologically sound mining technologies and practices, while

optimizing mineral extraction and rehabilitate mined out areas. Conserve key resources like minerals, coal, petroleum products, water &

energy, wherever feasible. Comply with applicable legal and other requirements. Develop and propagate environmental awareness amongst employees,

surrounding community and enable them to adopt environmentally sound practices.

Document, implement & maintain this policy at all levels.


We commit for continual improvement & prevention of pollution by setting and reviewing appropriate environmental objectives and targets. This environmental policy is communicated to all persons working for or on behalf of G.A.C.L and shall be made available to the public.

Date: June 09, 2005 DIRECTOR

GUJRARAT AMBUJA CEMENTS LTD.

AMUJANAGAR

QUALITY CONTROL

The quality at ACL plays very important in final product that is the only element for which only it is claiming the premium price it has got many awards for constancy & homogeneity in the final product. So quality control is very crucial

For quality controlling shift wise hourly checking is done at ACL (A,B,C 3 shift of 8 hours)stages of sampling is given below.

1. Crusher section2. Row mill before silo filling3. Silo to Preheater4. After clinker formation in DBC (Deep bucket conveyer)5. Silo to packingIn addition it takes auto sample every 3 minute of 20 second And composite sample is taken of 24 hours For the sample checking concentration v/s value it has XRF lab which has machines namely XRD,XRA,XRF

Instruments used for quality checking

1. Water bath 2. Test sieve3. Hot air own(L.R.)4. Comp. Stn. M/c 20 kn5. Humidity control oven no.1 and no.26. Auto clave no.1 and no.27. Humidity chamberCement production requires 27 +/- degree temperatureAnd cement dispatch requires 90% humidity so the quality control department also keep track of it that all the temperature requirement are fulfilled to ensure full valued product to the final consumer the little deviation from the prescribed quality is not tolerated at ACL.


QUALITY POLICY

The management & the employers of Gujarat Ambuja Cements Ltd. Are committed to achieve. “TOTAL CUSTOMER SATISFACTION SYSTEM” in all spheres of our activities.

We therefore,

Provide product & services that meet or exceed customer’s expectation based on agreed specification.

Build quality into every sphere of our activities for achieving excellence in organizational performance.

Do all the activities right the first time.

Commit ourselves for continual improvement.

Review our quality management system periodically for its containing suitability & appropriateness.

We have implemented the above policy by setting appropriate quality objectives & quality planning & review the same from time to time. This quality policy is shared with the public.

GUJARAT AMBUJA CEMENT LIMITED


Energy conservation activities

( A ) Energy conservation measures takeno Modification in preheater cyclones and ducts at darlaght plant to reduce

pressure dropo Replacement of kiln inlet and outlet seals replacement with seals of

improved designs.o Retrofitting and replacement of various fans for optimum sizing to achieve

energy efficient operation.o Variable voltage & variable frequency drives installed on various fans for

speed control to save power.o Installation of FUZZY logic system for operation of cement mills & kilns.o Optimization of grinding media patter in cement mills.o Optimization of water pump and cooling tower operation.o Replacement of existing metallic fans blades with fiber reinforced plastic

blades in air cooled conditioners.

(B) Additional investments and proposals being implemented for reduction of consumption of energy.

o Replacement of existing separators with high efficiency separators in cement mills.

o Installation of high efficiency burners (Duoflex) in kilns.o Replacements of low efficiency fans with high efficiency fans.o Increase in cooler stack height to reduce fan power consumption.o Installation of variable voltage and variable frequency drives on different

fans to save power.o Modification various ducts in cooler, raw mill, and coal mill to reduce

power consumption.Total investment on account of this all is estimated at Rs. 7 crores.

Impact of the measures taken above for reduction of energy consumption and consequent impact on the cost of production of goods :

Measures referred in (A) is expected to result in energy saving of Rs. 3.5 crores per annum and (B) above is expected to result in saving of Rs. 20.5 crores per annum.


The role of R&d section in Ambuja cement

The R&d activity in cement industry is saturated in todays trend tough the ACL is doing following activities.

1. Land identification for availability of lime stoneR&d department in GACL is located in Kodinar plant only other regional branches are not having R&D activity. The Holcim partnership would expand it. For land identification R&D department will design the Row mix and after lab clinkerlization and chemical & physical property checking (which is also called burnability study)it will prepare a report and present it to the management.

2. Using micro scope Lab For checking c3s ,c2s,c4af and c3a for checking phases in proper form and distribution for post settlement of clinker.

3. Using Fuel Lab :For coal & furnace oil analysis in ACL coal is imported for less Ash blowing to keep environment free from pollution sulfur content is checked for that.

4. Using partial size analyzer :To maintain the heat of hydration to analyze & determine how cement will behave.

5. Using oil lab:For checking parameter of oil used to keep environment clean.

The main activity of R&D in any cement company is finding alternate sources of fuel as they are very scarce in nature. For that ACL R&D has ground nut husk, rice husk, coconut husk, etc but they are seasonal so R&D is trying to check the usability of Garbage, cotton stork, jetropha plant leaves, tire crumb , coco shell , castor cake, fuel brick etc can be used as alternate sources of energy.

Due to increase in price of power a new captive power plant based on multiple fuels like coal,lignie or agro waste is thanks to its R&d activities which really adds value to the cement production to the company as well as to the customer and the society as it is take care of the environment too.


Specific areas in which R&D carried out by the company : Fly ash classification and its optimum use. Use of alternative fuels in place of coal. Coal beneficiation studies carried out for use of low grade coal in future.

Benefits derived as a result of above R&D :

Conservation of natural resources viz. limestone and coal. Reduction in fuel cost by use of alternative fuels. Process stabilization and quality improvement.

Future plan of action Phospho gypsum utilization in cement manufacture.Increased use of alternative fuels.

Expenditure on R&D

Capital expenditure 15.01Recurring expenditure 30.21Total expenditure 45.21Total R&D expenditure as % of total turnover 0.02 %

Procurement

The procurement is value addition to purchase it is some thing more than just purchase which just talk about what ,when and how but procurement should include all the things discussed further in the section.

The procurement process in ambuja cement is systematic as it is process industry every stage in the process requires approval from the authority.

If material that is to be purchased is less than 200,000 the approval required from Department head if it is greater than 2,00,000 than the purchase order approval required from the president.

The main machinery and import related purchase decision is done from the branch office MUMBAI (kalina) . And specially fast moving items are ordered locally from the plant level only To minimize the time the freedom given to the User himself to place the order to the plant level or branch level based on the emergency of the material. All the fast moving items like lubricant , fuels, welfare items are ordered from site only this amount in GACL to about 2,50,000. monthly.The basic raw material & its procurement is done as following

1. Lime stone :-It is one of the key ingredients of cement. As the company is situated at the place which have a very rich resources of


limestone. All the requirement of limestone is full filled by the near by mines, which is owned by the company itself.

2. Gypsum :-It is one of the waste products of chemical plants. Gypsum is added to clinker and grinded to form cement, Gypsum is added in cement in order to increase the settlement time of cement. Gypsum is added to clinker in the ratio of 95:5 that is 5%

3. Sand stone/silica :-Silica is added to cement in order to give the strength to the cement. silica is generally produced from the mines near chotila area.

4. Red clay :-This is also one of the raw materials used to produce cement. Red clay is produced from nageshwari, which is near to Una.

5. Fly ash :-It is the waste product, which arise from the burned coal from the thermal power plants. This is one of the raw materials used to produce cement. It is generally produced from the thermal power plants of sabarmati & jamanagar.and to reduce the Fly ash cost and transportation cost of bringing them to the factory ambuja has established its own thermal power plant to provide electricity to the factory as well as fly ash to produce PPC. However this amount is not enough for the factory so it has to buy from outside.

6. Coal :-It is generally used in preheater & kiln. It is burned inside the kiln to give high temperature in which the raw material is burned.Coal is generally produced from Africa through sea route. Coal is even produced from the coalmines of kutchh.

The procurement department has work in close coordination wit the stores department and all other department which may any time be the user. And also from user for the technical advice and supplier. And great help is required from the Internet , transportation.For user and supplier satisfaction store department maintain GRN (goods receipt Note ) when the user ensure that this is the only material which it has indented the purchaser don’t fanalize and pay the payment so as to reduce the rejection In Abuja the Quality, right time delivery and required amount of availability of quantity is give more emphasis rather than price.

The entire process of the procurement of the material is shown below.



Getting signed by authority & send to supplier

Indent from stores department(which include item group no., code ,approximate price, quantity, description)

Enquiry to the supplier

Preparation of comparatice quotation statement from various supplier quation

Preparing purchase order

Signed by authority & send to the supplier

The entire procurement process take maximum 30 days

Probable Reasons for the delay in the process can be at the following stages Getting approval from the authority Supplier price quatation Courier delay User indentation delay.

From the analysis of the entire process of the procurement I can suggest the following things.

1. To maintain the relationship with supplier for quick replenishment of the order is very necessary.

2. To minimize the time in the procurement process the firm can place the order to the supplier via E-mail or Fax rather through courier which the company is doing right now.

3. company can keep the records of all the department requirements and consumption pattern so that prediction of the user order can be done and order can be placed at the quickest time .

4. Up to date record keeping will help in both time minimization and cost minimization as the supplier wouldn’t be able to replenish the order as when placed and if require any how they will charge higher prices and have to compromise with quality too.

5. One most efficient technique in this aspect is rate contract . which means yearly consumption of fast moving items is given to the supplier and the supplier maintain the stock on behalf of ACL. which ACL is having but only after holcim acquisition but contracts are done at corporate level.

6. Keep record and stock of related literature to show to the user for confirmation so the enquiry time is reduced and cycle time can be minimized.

Value addition at procurement level can be done by following ways

ACL is preparing the worksheet about overall charges and expenses incurred at various level by different supplier. In that worksheet probable excise , VAT, and all is calculated. And depending on that whether to purchase locally from Gujarat or outside that is at branch level is decided. So that cost can be minimized and time can be saved.and quality product can be achieved.


Some of the name of the supplier is given below Indian oil Sanjay traders Crital firms Vicky shop & co. Ajit packaging

As said earlier the relationship with the supplier is very vital to have good communication with supplier the ambuja is ensuring that

All the suppliers get their payment on the right time, Invitation to make presentation about the usage of the product and its properties.

So that product rejection come to the lowest level. And the suppliers new product also can be highlighted at the proper platform.

Greeting cards to the main registered suppliers on special occations like diwali and all.

Advance payment in case of Govt supplier.

HR support

The companys most distinctive attribute, however, is its approach to the business. Ambuja follows a unique homegrown philosophy of giving people the authority to set their own targets, and the freedom to achieve their goals. This simple vision has created an environment where there are no limits to excellence, no limits to efficiency. And has proved to be a powerful engine of growth for the company. Ambuja believes that out of 4 ps the most important is the 5th P that’s PEOPLE

“The equity of a brand can be exponentially liked by rendering qulity service delivered through people with a positive attitude & right skills.EQUATION

Effective people = Attitude * (knowledge + skill)Impact of quality service =

(a thought fill action which fulfills a consumer need ) * people.

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

GACL Considers human resource as the MOST PRIZED ASSETThe biggest strength of the company has been its human resource.

The company follows a unique,homegrown philosophy of allowing people to set their own targets and gives them the freedom to achieve them : “I CAN” This philosophy has spread across all the employees and has been a constant source of motivation for the people.


From the beginning the company have followed a progressive policy of taken keen interest in the well being and progress of the people.

To enhance their skills and enrich their experience, the company provides continuous training these includes workshops, courses, overseas seminars and visits to cement plants in India and abroad.

The company , from time to time engages competent and reputed organizations to equip the people with requisite techniques and excerses for personality development and self actualization

A couple of years ago, the people had introduced in-house conferences by different disciplines operating managers of a discipline from all the locations come together in a conference it has become a useful forum for sharing experiences,ideas,innovations and developmental work undertaken at different locations. And also a source of bench-marking of best practices. Besides, it brings people closer and helps them understand each other well.

Finally , the company endeavors to offer them just and fair compensation. As a step in this direction, the company has granted stock options to its employees and whole time directors during the year, the sixth in succession..

Ambuja believe this all has nurtured a strong sense of belonging among our people, and is a driving force in he company’s growth and performance.

TECHNOLOGY DEVELOPMENT

The technology is the main driving force to any Business proper use and absorption of technology can help a lot to the growing business and fasten the goal achievements.Ambuja has used the technology at maximum extent from plant level to distribution even that is only the secret of success of Ambuja

Ambuja has a totally different department set up for this purpose called IT department in ADM building. It has set up a website called Online.com for the management of this information and communication to the dealer network. It has Oracle & Developer 2000 base entire system.Every branch in GACL is connected through VAST , Local line for easy communication and back up purpose.

All the Dumps of the company are also computerized so that uptodate stock information can be managed and inventory and warehousing cost can optimized. Orders given by the dealer are grouped geographically befor executing so as to minimize the transportation cost which plays major role in total cost of cement supply chain cycle. Orders by the dealer are given by the flat file to direct company’s sales and distribution department rather on phone where there possibility of some error and misunderstanding every dealer of ambuja is connected with that network.


Truck khoj.com:A truck identification and tracking Punching system wherein the concern

parties viz the company, transporter and customer can track their truck and can make exact approximation that when they will get the delivery.Ambuja is using this techniqueHowever here truck drivers need to punch the card given to them at every booth which the illiterate truck drivers not concerned of so this technique is not fully utilized but AMBUJA is in process of implementing it whereas SCL is even not aware of existance if this system.

TECHNOLOGY ABSORPTION,ADOPTION AND INNOVATION

Efforts in brief made towards technology absorption and innovation :The technology has been fully absorbed. Company’s personnel from operations, maintenance and developmental activities were deputed for training through seminars and visits.

Benefits derived as a result of the above efforts :Improved quality ,productivity ,operational efficiencies and cost reduction primarily due to conservation of energy and company increased addition of fly ash as Govt. allowed to use.

Information regarding technology imported during last years.Company has not imported any technology during last years.

Council of logistics management defines logistics as follow.“The process of planning,implementing & controlling the efficient , cost

effective flow & storage of raw material , inprocess inventory , finished goods & related information from the point of origin to the point of consumption for the purpose of confirming customer requirements . “

Infrastructure

Over 40% of the production cost of cement is power. It quickly became clear to us that if we were to run a profitable company, wed need to keep power costs to the minimum. So we focused our efforts on improving efficiency at our kilns to get more output for less power. Next we set up a captive power plant at a substantially lower cost than the national grid. We sourced a cheaper and higher quality coal from South Africa. And a better furnace oil from the Middle East.The result is that today were in a position to sell our excess power to the local state government.Our sea-borne bulk cement transportation facilities meanwhile has brought many coastal markets within the easy reach. It has also made Ambuja India's largest exporter of cement consistently for the last five years.

CEMENT PLANTS


Annual CapacityPlant Capacity (mn tons)Gujarat 4.00Himachal Pradesh/ Punjab 3.00Rajasthan 1.50Chhattisgarh/ West Bengal 2.00Maharashtra 2.00Total 12.5Ambujas capacity includes that of Ambuja Cement Rajasthan Limited (ACRL) and Ambuja Cement Eastern Limited. (ACEL). Ambuja also has a strategic investment in ACC through its subsidiary Ambuja Cement India Limited (ACIL)

FINANCIAL PLANNING

Planning is very necessary for the smooth running of the business. The firm should be able to achieve its objectives by minimizing the use of resources. The process of management is facilitate when management charts its future course of action in advance and take decision in a professional manner, utilizing the individual and group efforts in a coordinated and rational manner.

Once systematic approach for attaining effective management performance is financial planning. Financial planning indicates a firm’s performance, investment and requirement of funds during a given period of time, usually 3 to 5 years. It involves the preparation project or Performa profit and loss account, balance sheet and fund flow statement.

G.A.C.L. considering the importance of financial planning carries it out. While doing financial planning, the following steps are involved:-

Analysis of the companies past performance to assembling the relationship between the financial variable, and the companies financial strength and weakness.

Analysis of the company’s operating characteristic product, market, competition, production and marketing policies, control system and operating risk etc.

Determine the company’s investment needs and choices, given its growth objective and overall strategy.

Forecasting the company’s revue and expenses and need for funds based on its investment and dividend policies.


Analyzing the financial alternatives within its financial policy and deciding its appropriate means of rising funds.

Analyzing the consequence of its financial plans for the long term health and survival to the company.

Evaluating the consistency of financial policies with each other and corporate strategy.

At G.A.C.L they prepare two types of financial plans short term financial plans, and long term financial plans.

The plan having short duration generally of one month is termed as short term plan. In the company, it is prepared separately for every month and is known as cash budget which is compared with the actual result obtained at the end of the month. The actual results are acquired from cash roll which are prepared daily. On completion if any deviations are found, they are corrected.

Long term financial plans are generally of one year is that they are prepared annually. They are comparatively in detail. These plans are of greater importance as they revel the financial strength of the company.

Ambuja Growth Plans

Plan to increase capacity by 3 to 4 mn. tonnes in next 2 - 3 years by way of acquisition, upgradation & brown field expansion.

Growth to be funded from free cash flows

1) Business Model

Owned Infrastructure Logistic Management Premium Brand - Only selling in Retail Markets Environment Friendly operations Social Corporate Citizen Low Cost Cement Producer

1) Infrastructure & Logistic Management

200 MW of Captive Power Plants 100% captive power - Reliable & cheap generation Large port handling Export of Cement & Import of Coal 3 Cement receiving terminals 7 Owned Ships for transporting Cement by Sea 35% Cement transport by sea - Cheapest Mode


Largest Exporter of Cement - 15% of Production

Premium Brand

India - A bagged marketIndividual home builder - Key driver of demand

AMBUJA focus : Best quality cement Good packaging Strong distribution network Customer service

Ambuja Cement - Most preferred brand - Fetching higher realisation

1) Environment Friendly Operations2) Use of surface miners - Blast free mining 3) Restoration of mines - green spots & water reservoirs 4) Use of bio-gas, agro waste as alternate fuels5) Rose Garden & Cement Plants - Co-exist6) Many International Awards in Environment Management7) Global Standards for Environmental Measures8) ISO 14001 for Environment Management System

Corporate Social Responsibility

Raising Environment Awareness Building up of check dams, salinity ingress checks Water Harvesting & Ecology Pits - Visit of Siberian Cranes Programs for rural healthcare and women development Asian CSR Awards 2005 for Environmental Excellence among 94 companies

participating from 16 countries


ANALYSIS

Costing

Particular COST PER BAGDirect cost 36.5Indirect cost 18.0Warehousing 03.0Bag cost 06.0Sales cost 5.0Transporting 20.0VAT (12.5 %) 21.0EXCISE 20.0Dealer discount 06.0Advertisement cost 04 04.0Customer service cost 3.5 3.50Admin expenditure 19.0Total 162.00/-Margin 40/-Selling price (invoice price) 202.00/-

From the above listing it is clear that major part of the total cost is Transportation. Again it is under control of the company by CONCLUSION

One of the fundamental underpinnings of the new global integration is the stress on knowledge intensity and the utilisation of information in economic activity. Withinnearly all forms of productive activity the importance value in the final product reaching to the customer

The following is the result of my research on value chain system used in GACL.


ANALYSIS OF COMPANY’S VALUE CHAIN

MEASURES FOR COST REDUCTION USED AT GACL

For Inbound Logistics1. Use of imported coal2. Continue searching for new sources of raw material availability at near by areas.3. Basic raw material order placing at center level to take the advantage of Bulk

ordering .4. Mines in near by areas to reduce the material movement cost.

For production plant

1. High efficiency fans for all process fans.2. Mechanical conveying in place of pneumatic conveying3. Six stage low pressure drop cyclone preheater4. Captive power generation by sets GEB power cost 7.75 per unit while this captive

power plant gives 2.25 per unit.5. Use of agro waste fuels like Ground nut husk (GNH),rice husk, and different types of agro waste, baggase etc.6. Roller press for cement grinding7. In house energy audit for effective monitoring of energy consumption.

For Outbound logistics

1. Sea transport of loose cement. If transporting in packed bags it can transport maximum 200 bags in one trip that is 10 tonne per trip but transporting in loose give 21 to 35 tonnes per trip.

2. Grouping orders areawise to reduce the transportation cost.3. Established Regional and central sales office to transfer the orders of near by area

so as to minimize the transportation cost.4. Established own jetty to speeden the export and documestic distribution of cement 5. Using technique of big vehicle to small vehicle to reach at remote area. and

reduce wait time of Big heavy vehicle to be used at other places.


ANALYSIS OF CUSTOMER’S VALUE CHAIN

1. As the cement industry is one of the most energy and power intensive industry so , GACL is doing the many activities for energy conservation as discussed above for which it has got awards too which no any competitor is doing. Which adds value to the final consumer.

2. GACL is the pioneer in thinking about Environment protection & has done many activities for Environment prevention it has fitted dusting control bag at every dust producing stage in production plant and has established green city near by and GACL is using surface miner rather than blasting technique for environment protection.

3. GACL has performed its corporate citizenship very well. It has built check dams and temples and many more things for citizens.

4. GACL is providing excellent after sales services to the customer for that it has establish all together different department of civil engineer for guiding customer in construction activity.

5. GACL is concerned for giant strength it assures this things to customer customers that their decision is worth.

GACL always believes in delivering value product to the customer for that it is doing the following things.

1. Focus on brand name :“VIRAT COMPRESINVE STRENGTH” ambuja cement has given more focus on Strength. as any cement manufacturing company is supposed to do. One of its ad 100-7 = 0 which means if the 7 th part of the cement is extracted from the concrete that its nothing. This is thoroughly understood to dealers.

2. Effective differentiation Ambuja is crating differentiation by the following ways.

Firstly there was no ad in cement industry the trend started with ambuja it was the pioneer in giving ad of cement like products.the fist ad was given in news paper. Now they giving more in sports events.


Ambuja is the first in providing engineering services to the customer as after sales services.

It is proving many services to the dealer like shocalship & other supportive programs specially designed for its dealer and treating dealer as the family members. Its was the first in proving foreign tours to dealers.

Its using best quality lime stone in manufacturing of cement to provide best strength to the customer.

It has established totally different unit in the plant for controlling the quality of the produced cement hourly checking is done and than only given for dispatch.

It using best quality bags that is HDPE bags to pack the cement which are reusable .

It is the first line name in providing ON TIME delivery to the customer which is very important in cement like product without which entire activity is worth less.

It is the pioneer in giving saving concept to the customer. Added value in skilled labour.

Thus we can say after entry of ambuja the strength has gone double.

3. Effective public relationAmbuja has maintained good relations with the public for that it has organized many seminars done many things for public welfare as corporate governance.

4. Price differenciation :Ambuja has always maintained the premium price which is truly convinced to the customer by the activities listed above.It is pricing on the bases of Supply and demand gap.

5. Strong distribution network :Ambuja has its presents in the entire market in interior level of villages too. In this area too all are direct dealer and reputed personality in town.


The value chain or business system map

Cost/benefit analysis porter’s value chain

Firm infrastructure is good clean


Inbound logistic Operation

Outbound logistics

Marketing & sales

Service

Procurement


Human resource management

Firm Infrastructure

Supporting activity

Line O

perations

MA

RG

IN

Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. 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. The term supply chain management was coined by consultant Keith Oliver, of strategy consulting firm Booz Allen Hamilton in 1982Some experts distinguish supply chain management and logistics, while others consider the terms to be interchangeable.

Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. An example scenario: the purchasing department places orders as requirements become appropriate. Marketing, responding to customer demand, communicates with several distributors and retailers, and attempts to satisfy this demand. Shared information between supply chain partners can only be fully leveraged through process integration.

Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information

Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. An example scenario: the purchasing department places orders as requirements become appropriate. Marketing, responding to customer demand, communicates with several distributors and retailers, and attempts to satisfy this demand. Shared information between supply chain partners can only be fully leveraged through process integration.

Supply chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information

The key supply chain processes stated by Lambert (2004) are: Customer relationship management Customer service management Demand management Order fulfillment Manufacturing flow management


Supplier relationship management Product development and commercialization Returns management

Supply chain management system in a firm lead to the coordination and configuration of supplier and distributor relationships (Network of firms) Which ultimately lead to competitive advantage. Each firm in the network can benefit when the preceding principles of the

Process capacity management Inventory management and Quality improvement

Thus how the value can be added in the supply chain management system in ambuja cement company is discussed further in the report. So that following things can be achieved.

Quality can be improved Time of the entire cycle can be minimized Cost of the entire activity can be minimized Value to the consumer can be maximized.

The study will include discussion of the role of all the department playing importance in the chain. And how value can be added at every stage.

Supply chain management system comparison of AMBUJA CEMENT LTD (ACL) with Saurastra cement ltd. (SCL ) Brand name Hathi cement

Factors of comparison Gujarat Ambuja Cement LtdGACL

Saurastra cement Ltd SCL

Sector ProductionArea of mines 700 hectors 643 hectorsMines distance 17 to 20 km 5 to 7 kmNumber of surface miner 5 in use 1 (on lease) basically using

blastingMines depth 27 meter 6 to 7 meterSilo capacity (for storage) 8800 tonne 8800 tonnePower 70 WT DG se for power

with 60 MW capacityUsing GEB power

Packing Machine 4 Loading m/c-Auto loaderUnloading manually

Loading unloading manually one auto Loader

Sector Sales & DistributionInfrastructureTransporter 06 03Jetty 04 01Distance factory-jetty 12 km away 17 km away


Ship 07 Not anyWare house networking Yes NoBottom discharge system 07 Not any doing manuallyBulker 95 (20% under

maintenance)20

Price 200 196

Time required to complete the cycle from procurement – sales distribution

Procurement

In cement industry as a whole orders are turn key with delivery scheduleAs the procurement process is shown in above sections the time required by both

company at different stage for consumable goods for which company maintains main max stock is shown below. For basic raw materials orders and relinishments are constant and done from head offices itself.

Stage GACL SCL Indent from user department 01 day 04 dayQuotation 15 day 20 dayPurchase order 03 days 8 daysDelivery schedule 30 days 30 daysStores to user department 02 days 04 days

Total 151Days 221Days

Production

Cement production is a continuous process so time calculation of cement production cycle isn’t feasible comparison can be done with machine capacity and time required to move the inprocess material from one stage to another stage that shown as below.

Machinery used at various Stage Capicity of GACL Capacity of SCL

CRUSHER 500 TPH (TON PER HOUR) 650 TPHROW MILL 280 TPH 320 TPHKILN 185 TPH 160 TPHCLINKER GRINDER 30 TPH 100 TPHCEMENT GRINDER 120 TPH 150 TPHPACKER 120 TPH 250 TPH

Up to clinkerization cement production is continious process so SCL has combined all its 4 plants in coninous process for efficient processing as its having most of row material(lime stone )


available in bulk from near by mines. The given capacity of ambuja is of its one plant only however its having 4 plants as mentioned above.

Time required in production process for moving item from one stage to another is as given belowStage GACL SCL

Pile – Row mill hopper 10 MIN 12MINHopper to surge bim 3 min 03 minBim to storage silo 02 min 02 minSilo to kiln *DF 02MINKiln to preheater 02 min 03 mnClinkerization 15 min 19 minCooling 12 min 20 minYard DF 10 minGypsum adding 15 min 20 minStorage silo 05 min 05 minPacker 02 min 05 minTOTAL 1 hour 6 min 2hrs9min

*DF : Direct feedingfor producing 4200 tonne of cement from both of the company

Sales & distribution

The sales & distribution cycle time of GACL & SCL are as followThe distribution cycle starts right from where the production finishes so from packer to destination unloading and reaching back to source. The detail time is as follow.

Stage GACL SCL

Loading the tanker from packer 07 MIN 20Travel from factory to jetty 20 MIN 28Wait at discharge station 10 MIN 30Unloading to silo 15 MIN 20Travel from terminal to jetty 008 MIN 10Load in ship 240 MIN 240Jurney of 600 km(kodinar to surat) 1200 MIN 1200Unload from ship to silo 330 MIN 330Return back 1200 MIN 1200TOTAL 3030 min 3078

ANALYSIS


FINDINGS

From the above time study I found that GACL On total requires 153 days and 17 hours to complete the entire supply chain cycle where as SCL requires 223 days to complete the same cycle this difference of 70 days is due to the following reasons :

In procurement the difference is due to

1. Indentation system of SCL is more time taking whenever the user department want to order any material the order takes much time to reach to finally purchase department because of lack of co-ordination.

2. The order placing process in SCL requires much time because every order greater than 50000 requires approval from the head office. While in GACL only orders >100000 requires approval from the head office.

In production the material movement difference is due to

1. SCL is having the mines near by that is only 5 to 7 km distance where as GACL is having the mines in distance of 15 to 17 km so the lime stone movement requires more time by GACL.

2. GACL is giving direct feeding in some stages so that no need to put the material in yard. For that 12 minute is saved . whereas SCL is having low capacity machinery at continuous process stages so up to lime stone size reduction is simultaneously co ordinated but after that it have to loose time.

3. As shown in the machinery capacity the GACL machine’s capacity is high so it reduces the time in production however now SCL has combined all its .

In sales & distribution the difference is due to :

1. GACL is having Auto loader to load the cement so it requires less time to load the tanker whereas SCL is having only 1 auto loader that too of lease so it requires

less time.

2. GACL is having its own jetty at muddwarka only 12 km away from the factory so transportation time is saved & special dedication given to GACL transport only (wait time reduction ) so it fasten the process.


3. GACL is having fully equipped owned jetty at muddwarka so unloading time at destination is also saved due to latest unloading equipment. However SCL is rank holder in cement export market.

SUGGETION

From the above discussion and my exploration I would like to suggest the following things to company to reduce the time in supply chain process.

For procurement

1. Company should go for E- procurement to fasten the procurement process orders can be placed on net online to save the time in couriers and communication.

2. Company should go for more rate contracts with supplier for common purchase in which the supplier company maintain yearly stock of the material as specified on specified rate for the specified time on the company’s behalf so that the time in supplier selection , and negotiation can be saved.

For production

For sales & distribution

1. company should establish strategic partnership with masonry contractors to get more order on regularly bases to increase the sales and save the time in order getting process.

2. SCL is more concentrating on export business and for local in saurastra supplies it mainly uses road transport & in road transport it is facing the problem from Porbandar truck drivers association it creates for huddles for the company which


slow down the process so it should concentrate more on road transport for even domestic supply which is really efficient and faster as GACL is using it at its optimum extent as it is the pioneer in loose transportation of cement . so SCL should also start domestic transport form sea ways in bulk.

At last I would suggest that company should undergo kazian time study analysis which analyse each & every activity of the company from every perspective and suggest which activity should be modified to improve the supply chain cycle & fasten it.

LIMITATION

1. The biggest limitation of my research project is the time because of time limit I have concise the scope of the project otherwise value chain and supply chain analysis include a wide scope .

2. I have compared the infrastructure and time required in supply chain system by GACL & SCL only which is not sufficient to conclude the best equipped result.

3. Because of busy schedule with the head of the departments they are able to allot less time to management trainees for the project guidance so I have to suffer a lot to get information.

4.

BibliographyBOOKS

1. MARKETING MANAGEMENT BY – PHILIP KOTTLER

2. Research Methodology By -- C. R. Kothari


3. Business marketing managementBy – Michael D. HUTT Thomas W. Speh8 th edition

MAGAZINES

1. CMA REPORT2. ANNUAL REPORT - AMBUJA 2005-063. SOURCING INSIGHT - OCT 2006

WEBSITES

1. WWW.GUJARATAMBUJ.COM 2. WWW.MEHTAGROUP.COM 3. WWW.CMAINDIA,COM 4. WWW.GOOGLE.COM 5.

ANNEXURE

Annexure 1: Questionnaire for procurement department

Annexure 2: Questionnaire for production department

Annexure 3: Questionnaire for sales & distribution & marketing

Annexure 4: Brochure for customer service

Annexure 5: vehicle trip card


http://WWW.GOOGLE.COM/

http://WWW.MEHTAGROUP.COM/

http://WWW.GUJARATAMBUJ.COM/

Annexure 6: shipping bill

Annexure 7: INVOICE

Annexure 7: G.R. form

Annexure 8: Flow chart for AMBUJA cement

Annexure 1:

Questionnaire for purchase & stores department

Q 1. What is safety stock maintained is there JIT system in use ?

Q 3. How suppliers are notified for product replenishment is there EDI system in use ?

Q 4. How the relationship with suppliers is managed what steps are taken ?

Q 5. How the lead time can be minimized ?

Q 6. Is there Any constraint in procurement or store ?

Q 7 What co-odination required from different departments for successful working as purchase department is there for fulfilling other departments need. ?

Q 8 What is inventory level maintained ?


Q9 How cost can be minimized in procurement process ?

Q 10 How the strategic procurement planning is done. ?

Annexure 2 :

Questionnaire for production department

Q 1. What is the status of production compared to capacity ?

Q 2. What can be done for business process reengineering ?

Q 3. What can be done to make mining blast free for environment prevention ?

Q 4. Is MRP(material requirement planning ) done well in advance ? if yes how much Advance

.Q 5. Import of coal and Furness oil for the last and current year ?

Q 6. Export of cement & clinker for the current and previous year ?.

Q 7 What are the changes in working after holcim acquisition ?

Annexure 3 :

Questionnaire for Sales & distribution & marketing department

Q 1 What are the different ways through which the distribution (modes) of final product is done ?

Q 2 The process of distribution for different Dispatch modes

Q 3 Who are the suppliers and the customers ?

Q 4 Which Advertising media are used ?

Q 5 What sort of sales promotion is given and at which level ?

Q 6. What efforts and activities are done for marketing research ?

Q 7. What is the advertising budget for last few years ?


Q 8. How pricing is done ?

Q 9 What after sales services are provided to increase the satisfaction of the consumer ?

Q 10 What is the status of planned and actual sale and region wise dispatches for last 2 years ?

Q 11 Constraints in sales & distribution through different modes ?

Q 12 Is there any change working strategy after holcim acquisition ?

Q 13 How differentiation is done with competitors product and how unique value is created for consumers ?

Q 14 What is the cycle time for dispatching through sea mode ?

Q 15 What sort of support required from other departments to achieve the target & enhance the quality the sales of the final product ?

Q 16 What is the dispatch status of different segments ?

Q 17 How value can be added in dispatch process at different stage and how price can be managed and convinced to customer as ambuja is positioned as premium brand in the market ?

Q 18 Is ambuja having its own channel memebers for distribution or using agentsQ 19 On what bases the modes of transport are decided upon ?

Q 20 Any suggetion to improve the distribution cycle and increse value to final consumer of the product ?


36203282 ambuja report

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