1. Project
On
SUPPLY CHAIN MANAGEMENT
SECTION – A (Marketing)
Submitted To: Submitted By:
Dr. NaseemAbidi HarshalDhotra(11609147)
ParthBhasin(11609035)
RishabhDogra(11609171)
2. Table of Contents
1. Brief about Company 3
- Products
2. About Supply Chain Management 5
-Definition
-Supply Chain operation Decision
-Today’s cement Supply Chain
3. Jaypee Cement Procurement & Manufacturing Process 7
4. Distribution Network 11
-Geographical Spread
-PMLC Movement
5. Reference
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3. Brief about Jaypee Cement
Jaypee group is the 3rd largest cement producer in the country. The groups cement facilities
are located in the Satna Cluster (M.P.), which has one of the highest cement production
growth rates in India.
The group produces special blend of Portland Pozzolana Cement under the brand name
„Jaypee Cement‟ (PPC). Its cement division currently operates modern, computerized process
control cement plants with an aggregate installed capacity of 28 MnTPA. The company is in the
midst of capacity expansion of its cement business in Northern, Southern, Central, Eastern and
Western parts of the country and is slated to be a 35.90 MnTPA by FY13 (expected) with
Captive Thermal Power plants totaling 672 MW.
Keeping pace with the advancements in the IT industry, all the 260 cement dumps are
networked using TDM/TDMA VSATs along with a dedicated hub to provide 24/7 connectivity
between the plants and all the 120 points of cement distribution in order to ensure “track –
the – truck” initiative and provide seamless integration. This initiative is the first of its kind in
the cement industry in India.
In the near future, the group plans to expand its cement capacities via acquisition and
greenfield additions to maximize economies of scale and build on vision to focus on large
size plants from inception.
The Group is committed towards the safety and health of employees and the
public.Company’s motto is “Work for Safe, Healthy, Clean & Green Environment”.
Cement Brands
Jaypee produces & markets both Portland Pozzolana Cement (PPC) & all grades of Ordinary
Portland Cement (OPC). A brief introduction of each brand is enumerated as below:
▪ Portland Pozzolana Cement
Jaypee Cement (PPC) is a market leader among all blended/composite cements in the markets
of U.P, Bihar, M.P., Punjab, Haryana, Delhi& Nepal. Its unique design and blend, with high
strength clinker and superior quality fly ash has made it the popular cement for construction
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4. of large number of strong and durable structures in these states.
Fine particles of Jaypee Cement (PPC) when mixed with water readily form a smooth paste,
which results in a smooth surface. When used with sand and aggregates it yields a very strong
& durable concrete.
▪ Ordinary Portland Cement
33 Grade Conforming to IS: 269-1989
43 Grade Conforming to IS: 8112-1989
53 Grade Conforming to IS: 12269-1987
53 S Grade Conforming to IRST-40(53 S)
OPC-43 Grade
This is produced from enriched limestone most suited to make high quality clinker. Jaypee
Cement (OPC-43 Grade) is available in 50 Kgs HDPE bags of a distinctive design and cover. It
has emerged as the top choice of Engineers and Engineering Companies engaged in
construction of mega projects – such as National Highways, Bridges, Transmission lines, power
plants, Industrial and Residential structures.
OPC-53 Grade
Because of its fine nature, good particle size distribution, optimal phase composition, imparts
the properties of higher strength to the structures viz., Bridges, prestressed elements,
penstocks, precast elements etc. requiring very high strength to negotiate the heavy static &
dynamic loads.
OPC-53S Grade
It is a used in heavily loaded or pre stressed structures, which are subjected to high dynamic
loads due to rapidly moving volumes, be it a train passing on the railway sleepers or a great
volume of water moving at high speed to generate electricity in a penstock.
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5. SUPPLY CHAIN MANAGEMENT
Definition:It encompasses all activities associated with the transformation of goods from
the raw material stage to the final stage when the goods and services reach the end
customer.
Also, it involves planning, design and control of flow of material, information and finance
along the chain in order to deliver value to the end customer in effective and efficient way.
Pictorial Representation
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6. Supply Chain Operations Decision
Demand forecasting
Procurement planning
Production planning & control
Distribution Planning & Control
Inventory management
Transportation Management
Customer Order processing
Relationship management
Today’s Cement Supply Chain
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7. JAYPEE CEMENT
PROCUREMENT &MANUFACTURING
PROCESS
Mining process
The cement manufacturing process starts from the mining of limestone, which accounts for
almost 60% of raw material for making cement. Limestone is excavated from open cast mines
after drilling and blasting and loaded on to dumpers which transport the material and unload
into hoppers of the limestone crushers.
Setting up plants near quarry saves on inbound transport cost proximity to reserve is the single
most important criteria.
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8. Basically Jaypee Cement has their own mines to get limestone which they purchase from local
farmers mainly in Rewa plant but in other regions like Sidhi, Thandaetc they also borrow the
land for mining limestone in lease by state government.
Mining royalty imposed by state government is paid per ton basis. Dumper sand shovels used in
mining consume high quantity of diesel making it the second most important cost driver.
The Mining operations are carried out by fully mechanized open cast mining method. The
equipments used include 153 mm drill machines, hydraulic excavators of 3.8 cum & 4.1
cumbucket capacities, rock breaker, heavy duty 35 MT carrying capacity dumpers, bull dozers
and miscellaneous equipments.
The holes drilled for blasting are charged with bottom initiation using NONEL detonators to
minimize ground vibration and fly rock & “INSTANTEL – DS 077” Seismograph being used on
regular basis to monitor ground vibration.
Systematic and scientific mining operations of Jaiprakash Associates Limited are well supported
by mine planning activities done with the help of mining software “SURPAC”.
The reclamation and rehabilitation of mined out area is a continuous process in Jaiprakash
Associates Limited. The hard overburden generated is used to back-fill the area capped with
topsoil and area is reclaimed in planned way by adopting large scale afforestation.
Crushing Stacking & Reclaiming of Limestone
The LS Crushers crush the limestone to minus 80 mm size and
discharge the material onto a belt conveyor which takes it to
the stacker via the Bulk material analyser. The material is
stacked in longitudinal stockpiles. Limestone is extracted
transversely from the stockpiles by the reclaimers and
conveyed to the Raw Mill hoppers for grinding of raw meal.
Crushing Stacking & Reclaiming of Coal
The process of making cement clinker requires heat. Coal is
used as the fuel for providing heat. Raw Coal received from the
collieries is stored in a coal yard. Raw Coal is dropped on a belt
conveyor from a hopper and is taken to and crushed in a
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9. crusher. Crushed coal discharged from the Coal Crusher is stored in a longitudinal stockpile
from where it is reclaimed by a reclaimer and taken to the coal mill hoppers for grinding of fine
coal.
Sourcing Coal
Coal reserves are found mostly in eastern states. 95% of coal mining is still in control of center or
state government. Steel, power and cement companies are allowed to do captive or contract
mining.
Government companies mined coal also known as “linkage coal” is 15- 20% cheaper than open
market coal. Companies try to maximize linkage off take by better liaison with railways and coal
mining companies
Since coal reserves are skewed towards the eastern zone, freight cost is the biggest cost driver.
Market coal prices are determined by global supply and demand equation.
Presently Jaiprakash Associates Ltd has borrowed many coal mines on lease by government, like
in Shahdol district they borrow coal mine on lease by Madhya Pradesh government and also on
Jharkand they take on lease by Ministry of Coal, Central government. Also company purchased
coal from Coal India Limited to fulfil needs.
Raw Meal Drying/Grinding & Homogenization
Reclaimed limestone along with some laterite stored in their
respective hoppers is fed to the Raw Mill for fine grinding. The
hot gasses coming from the clinkerisation section are used in
the raw mill for drying and transport of the ground raw meal to
the Electrostatic Precipitator / Bag House, where it is collected
and then stored and homogenised in the concrete silo. Raw
Meal extracted from the silo (now called Kiln feed) is fed to the
top of the Preheater for Pyroprocessing.
Clinkerisation
Cement Clinker is made by pyroprocessing of Kiln feed in the
preheater and the rotary kiln. Fine coal is fired as fuel to provide
the necessary heat in the kiln and the Precalciner located at the
bottom of the 5/6 stage preheater. Hot clinker discharged from
the Kiln drops on the grate cooler and gets cooled. The cooler
discharges the clinker onto the pan / bucket conveyor and it is
transported to the clinker stockpiles / silos. The clinker is taken
from the stockpile / silo to the ball mill hoppers for cement grinding.
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10. Cement Grinding & Storage
Clinker and Gypsum (for OPC) and also Pozzolana (for PPC) are
extracted from their respective hoppers and fed to the Cement
Mills. These Ball Mills grind the feed to a fine powder and the Mill
discharge is fed to an elevator, which takes the material to a
separator, which separates fine product and the coarse. The latter is
sent to the mill inlet for regrinding and the fine product is stored in
concrete silos.
Packing
Cement extracted from silos is conveyed to the automatic electronic
packers where it is packed in 50 Kgs. Polythene bags and dispatched in
trucks.
Electrical Power
For total power requirement of 90 MW (JaypeeRewa Plant and JaypeeBela Plant), we have
CPP 1 - 25.0 MW
CPP 2 - 25.0 MW
CPP 3 - 37.0 MW
Four DG sets provide an emergency backup.
Source of fly ash
Burning of coal results into fly ash. Thermal power plants across India produce plenty of good
quality fly ash which can be used by cement industry. Fly ash is used in producing blended
cement grades like PPC.
Flyash prices are determined by local demand and supply equation. Since freight cost is the
major component, companies look for nearest source of flyash.
Sourcing – Gypsum
Presently Jaiprakash Associates Ltd source gypsum from “Rajasthan States mines and Mineral
Limited” and also from Pakistan through middle man.Companies also import it from Thailand.
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11. Distribution Network
Jaypee cement has around 156 cement dumps and all are networked using State-of-the-art
TDM/TDMA VSATs along with a dedicated hub to provide 24x7 connectivity between the plants
and all the 156 points of cement distribution in order to ensure “track – the – truck” initiative
and provide seamless integration. This initiative is the first of its kind in the cement industry in
India.
JAL has set up new capacities in Northern, Central, Western & Southern parts of the country
and is targeting a capacity of 26 MTPA in 2010 and 32.80 MTPA by 2011, along with Captive
Thermal Power Plants (CPPs) totalling 375 MW.
Now the Group have 12 Integrated Cement Plants supported by 375 MW of captive thermal
power, 9 split location plants, 11 Railway sidings and a jetty, giving the Group a pan-India
presence in the cement sector.
Geographical Spread of the Jaypee Cement
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12. PMLC Movement
PMLC means 'Product Movement and Logistic Cell". This department ensures the delivery of
finished product to the customer directly and to company stock points for further delivery to
the customer on retail basis.
PMLC dispatch clinker to various mini plants and to grinding units as per requirement of
marketing.Companies invariably hire c & f agents or transport cements to own or government
warehouses either via roadway or railways. In case of exports, cement reaches the nearest port
via roadways or railways and is then transferred to the importing country. Domestically, from c
& f agents or warehouses the cement is transported to the dealers/distributors and in turn to
sub dealers who finally sell it to the end users. There may or may not be physical ownership of
goods. In the second case, dealers and sub dealers take order from buyers and place it to the
companies, coordinate and monitor the timely dispatch of said orders, transportation of goods
and final delivery. Distributor network in cement industry is highly dominating and companies
are compelled to hire as they do not really have that rapport and touch with the end consumer
of their product. Apart, from this, the distributors have storage facilities as well which help
control well in the entire supply chain as they are the ones who bring orders and therefore are
directly responsible for the business that a manufacturer would do They ultimately grind clinker
and manufacture cement for sale in market.
Planning
Before PMLC start the function, they should know what type of cement and quantity is to be
dispatched to the customers in various markets or to our godowns located in our marketing
area. This target and grade wise dispatch of cement and clinker are fixed in the beginning of the
month and then they review it on daily basis with the Marketing Department to arrange
dispatches. Such targets are fixed by department heads level i.e. COO (Cement). President
(Com) and President (Mktg) with consultation as per availability of cement stock and
production plan during the month. In case of constraints, they review the targets from time to
time and the targets are reduced or increased accordingly. In this planning, they also plan that
what quantity of cement / clinker is to be dispatched by rail and by road. The ratio between rail
and road dispatches is also reviewed on daily basis depending upon the availability of rail
transport and road transport facilities.
Considering the targets, Marketing Deptt provides a plan of rakes to be loaded from our
different sidings and road dispatches to the various godowns and to the direct customers. This
plan is also reviewed with the Marketing from time to time depending upon the variation in
Marketing conditions and transport condition.
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13. Mode of Transportation
Road Transport
Road Transport means the product is dispatched by trucks, trailers and tankers / bulkers to the
customers or final destinations. The arrangement of these trucks, trailers and tankers/ bulkers
are provided by our authorized transporters. The loading and dispatch of product in the trucks
is arranged as given below.
When truck arrives at plant for loading the product, the truck driver carries a Transporter's
Bilty, which indicates the final destination, quantity to be loaded and sale/ customer order and
the bilty is produced to the Dispatch Department. The Dispatch Assistant checks the
authentication of the bilty, i.e. whether the bilty issued is signed by the authorized person, type
of vehicle and quantity balance in order before allowing the truck/ trailer/ tanker/ bulker for
loading. Once the Dispatch Assistant satisfies with the bilty, he issues Loading Memo/ Loading
Instruction Slip and allow for loading the product. Then the vehicle comes to the Packing Plant
via weighbridge, where we record tare weight of the vehicle. Tare weight is the weight of the
empty truck weighbridge provides a secret number on the Loading Instruction in which the
weighbridge operator captures the data in to the system. Then the truck comes to Packing
Plant, where Tally checker receives the truck and instructs the truck driver to be in queue
according to the type of product to be loaded in the truck.
After loading the product, in case of packed cement the Tallycheker counts the no. of bags
loaded in the truck and in case of bulk cement loading. Tallycheker ensures the sealing
arrangement of all manholes or outlets, so the product does not leak from any of the manholes
or outlets to avoid theft or adulteration in product through manholes.
In case of clinker, after loading, we ensure that the clinker truck is covered with good tarpaulin
to avoid damage due to moisture/ rain and spillage of clinker from body. Then he certifies the
loading on loading instruction Slip and allows the truck to go weighbridge and net weight,
where the weight bridge operator records the gross weight and net weight on the basis of the
secret number provided by the first weighbridge operator at the time of taking tare weight.
After ensuring the correctness of the product loaded as per the weighment check, he allows
the truck to approach to security for their checking and once the security personnel certifies
that the loading is as per the loading instruction slip, he allows truck to approach DispatchDeptt
for obtaining Excise Gate pass cum Delivery Challan by submitting the Loading instruction slip
and bilty certified by the Tallychecker, Weighbridge and Security Guard. The DispatchDeptt
issues Excise Gate pass cum Delivery Challan and other relevant papers required to
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14. authorizedriver to move on route up to final destination.
After delivering the material to the customer or at godown, truck driver brings the receipted
copy of the product and submit the same to transporter for collecting freight and subsequently
the transport, at the interval of 10 days, submit these receipts along with bill to Accounts
Deptt. for collecting the payment. In this procedure, in case if the material is not received as
per the Delivery Challan, the GDR (Godown Discrepancy Report) is endorsed on the receipted
copy and the deduction of the value of product is made by the transporter from truck driver
and finally company deduct amount from transporter's bill, which is known as the cost of
damage. The reasons for such deduction are on account of
(a) Short Receipt of Material in term of Quantity/ Bags and
(b) Damage in term of Packing or Quality.
Rail Transport
To commence the dispatches by Rail transport, we need railway wagons. For that purpose,
we have different sidings, which are given below:
Bela Railway Siding
Turki (6 Km) &Satna (52 Km) Railway Siding: These sidings are outside the rewa
plant and 6 km and 52 km away, where we have to take product for rail loading by
road transport
The use of both the sidings is not only for cement / clinker dispatches, but we use these
sidings for receipt of raw material such as coal and gypsum. To dispatch from the above
sidings, we have to request Railways for providing the wagons for loading cement/ clinker.
This request is known as indent of wagons to Railways and for that purpose we fill our
requirement in a Railway Register giving following details.
(i) No. of wagons required
(ii) Type and no. of wagons
(iii) Destination
(iv) Consignee details
In case of cement, Railway provides us 40 Covered wagons and in case of clinker, Railway
provides us 58 Open wagons, which is known as 1 rake and the average quantity to be
loaded in these rakes are as under
(a) Cement - a rake of 40 wagons- 2500 MT approx.
(b) Clinker- a rake of 58 box wagons - 3500 MT approx.
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15. The capacity of each wagon, in case of cement varies from 62 MT to 65 MT and in case of
clinker the capacity is about 60 MT. Railways provide us wagons as per the availability of
wagons and once the rake is loaded in the siding, we submit a memo to Railways certifying
that the loading of rake is completed, because Railways give a specific time for rake loading
and in case rake is not loaded in time, demurrage is charged on hourly basis for the extra time
utilized for loading. The loading time provided by the Railways in our different sidings is as
below.
Siding Cement Loading Clinker Loading Remark
Turki&Satna Siding 9 hours 9 hours Manual Loading
Bela Siding 7 hours 5 hours Mechanical Loading
The demurrage is charged on the capacity of the rake if the loading is going on after specific
hours and the rate of demurrage is Rs. 7.50 per hour per wagon. However, on a monthly basis,
we request Railways to waive off the demurrage by giving the proper reasons on what account
the demurrage accrued like shortage of labour, break down in the plant, roadtransport strike
etc. and Railways consider and waiver of the demurrage accordingly. This procedure is known
as 'Demurrage Waiver Application/ Appeal' from Railways. The appeal is made to the following
officers in Railways through concerned in charge Goods Clerk.
(A) Assistant Commercial Manager
(B) Dy General Manager
(C) Sr. Divisional Commercial Manager
(D) Divisional Railway Manager
(E) Chief Commercial Manager
(F) General Manager
They have specific power to consider the demurrage. Normally the demurrage is waived off up
to 40%. The demurrage waiver is done in three stages, for example case file to ACM will be
finally disposed of by Sr DCM after passing through DCM, sometimes one or more wagons. In
such cases we lodge a complaint to the Railways and normally Railways arrange to trace the
wagons and deliver the same in a very short time to the destination and in case if they fail to
deliver the wagon, the value of product loaded into wagon is paid by Railways to the Siding
owner, i.e. company after loading and settlement of the Railway claim. Here, it is very
important to note that Railway deputes commercial staff round the clock our siding for
collecting freight, charging demurrage and freight. Also they verify the loading of wagons and
keep the record for Railways. They are known as Goods Clerk. The salary of these staff posted
at Siding by Railways, are paid by the siding owner, i.e. company.
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