dynamic of supply chain management of shree cement ltd

THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

NEW DELHI

THESIS ON

DYNAMIC OF SUPPLY CHAIN MANAGEMENT OF SHREE CEMENT LTD

SUBMITTED TO:

PROF. SUMANTA SHARMA

PROF. VIJAY BODDU

UNDER THE GUIDANCE OF:

MR. VARUN MUDGAL

SUBMITTED BY:

POONAM JAIN

ALUMNI ID NUMBER: DF/08/10-M-523

BATCH: FW 08-10

ii

The Indian Institute of Planning & Management, New Delhi

ABSTRACT

This project cover the brief understanding about the Cement sector, I

have collected the primary data from the Cement Industry as the

growing demand of real estate also to understand whether the Shree

Cement has targeted the market right or not, I have concluded this

project with the proper recommendation has been made to that, which

help other research to do some research on the basis of that.

Transportation is the movement of products from one node in the distribution

channel to another. By providing for the swift and uninterrupted flow of

products back and forward through the distribution channel, transportation

provides companies distinct markets on an equal footing. Transportation also

permits wider and deeper penetration of new markets far from the point of

production. In addition, by maximizing vehicle and materials handling

capacities and cargo requirements, effective transportation permits

distributors to leverage economies of scale by lowering the per unit cost of

transporting the product. Efficient transportation enables distributors to reduce

the selling price by holding costs down, thereby providing for more

competitive product positioning. Finally, transportation provides other

business function with essential information concerning products, market

place and time utilities and transit costs, and capabilities necessary for

effective enterprise planning and operational execution. The first step in the

management process is to establish the cost effectiveness of private

transportation fleets and the search for and selection of public carriers. The

goal is to ensure the highest level of customer service at the lowest possible

price. The selection of a carrier is normally a combination of the price of

service, carrier financial stability, reliability and mode availability and

subjective elements. The second step involves the ongoing choice of

BATCH: PGP/FW/2008-10 ALUMNI ID NO.: DF/08/10-M-523

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selected transport mode to meet daily shipment requirements. Modes should

be chosen that will perform the service for the cost, satisfy any special

shipping needs required by the customer, exceed the rates and services

offered by competing carriers and minimize the likelihood of loss, damage or

delivery delay. Once the mode and carrier has been selected, shippers as a

third step must work with carriers to establish an effective schedule and the

proper vehicle routing to ensure timely customer delivery. The fourth step of

the process is the preparation and completion of the necessary shipping

documentation. Finally, managers must be diligent in developing

transportation performance measurements that will provide them with

quantifiable data necessary for increased productivity and competitive

advantage.


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SIGNATORY PAGE

TO WHOMESOEVER IT MAY CONCERN

This is to confirm that Poonam Jain, student of IIPM, NEW DELHI, is doing a

live project(Thesis) on the topic “Dynamic of supply chain

management of Shree Cement Ltd” under my guidance and that the

work being done by the candidate is original and is of the standard expected

by an MBA student.

May god bless her with all success in her career.

Warm regards

Varun mudgal


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ACKNOWLEDGEMENT

It is well-established fact that behind every achievement lays an unfathomable

sea of gratitude to those who have extended their support and without whom

the project would never have come into existence.

I express my gratitude to IIPM, New Delhi for providing me an opportunity to

work on this thesis as a part of the curriculum.

Also, I express my gratitude to Prof. Sumanta Sharma and Prof.Vijay Boddu

on the completion of my project.

Yours Sincerely

Poonam Jain

F-9

FW 08-10


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TOPIC APPROVAL LETTER

Dear Poonam Jain, This is to inform that your thesis proposal on “Supply Chain Management of Shree Cement Ltd.”, to be conducted under the guidance of Mr. Varun Mudgal is hereby approved and the topic registration id number is DF/08/10-M-523 Make it a comprehensive thesis by ensuring that all the objectives as stated by you in your synopsis are met using appropriate research design; a thesis should aim at adding value to the existing knowledge base. You are required to correspond with your internal guide Prof. Vijay Kr. Boddu at [email protected] Ph.-0124-3350714 by sending at least four response sheets (attached along with this mail) at regular intervals before the last date of thesis submission. NB: 1) A thesis would be rejected if there is any variation in the topic/title from the one approved and registered with us.2) The candidate needs to handwrite at least 1200 to 1500 words on the summary of thesis at the time of viva.

Regards,Prof .Sumanta Sharma Dean (Projects) [email protected]: +91 0124 3350701 (D)+91 0124 3350715 (Board)


mailto:[email protected]

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CONTENT

ABSTRACT...................................................................................... ii

SIGNATORY PAGE.........................................................................iii

TOPIC APPROVAL LETTER.......................................................... iv

ACKNOWLEDGMENT.....................................................................v

CONTENTS……………………………………………………………...vi

THESIS SYNOPSIS......................................................................vii

1. INTRODUCTION ………………………………………………………….1

2. COMPANY PROFILE……………………………………………………..11

3. RESEARCH METHODOLOGY…………………………………………..24

4. LITERATURE REVIEW…………………………………………………...26

5. FINDING AND ANALYSIS………………………………………………..51

6. RECOMMENDATION……………………………………………………..61

7. CONCLUSION……………………………………………………………..63

8. BIBLIOGRAPHY…………………………………………………………...66


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THESIS SYNOPSIS

INTRODUCTION

A supply chain is a system of organizations, people, technology, activities,

information and resources involved in moving a product or service from supplier to

customer. Supply chain activities transform natural resources, raw materials and

components into a finished product that is delivered to the end customer. In

sophisticated supply chain systems, used products may re-enter the supply chain at

any point where residual value is recyclable. Supply chains link value chains, Over

the last three years, Shree considerably strengthened its marketing presence. Since the

company is based in Rajasthan, the state is the company’s principal market. Rajasthan

is India’s largest cement producing state and Shree’s is the largest single location

plant in northern India. The company’s northern-most positioning within Rajasthan

makes it the closest among all Rajasthan manufacturers to Delhi, Haryana and some

parts of Punjab, a significant cost edge. The company enjoys a market share of about

11 per cent in north India.

RESEARCH OBJECTIVE

To study Supply chain management concepts and practices in industrial

scenarios.

To carry out supply chain opportunity analysis with particular reference to

Shree cement

To Benchmark the Implementation Of Supply Chain Management Techniques

In Shree Cement

To study how company work out for its lead time, utilization of the transport

effectively and efficiently.

Do the factor analysis through the primary data analysis

i) Cement is extremely heavy, so that transportation must be optimized

through network


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ii) Demand is normally stable, with seasonal trends but very few spikes

iii) Multiple parties in the supply chain make a simple flow more difficult

HYPOTHESIS

H1: Supply chain became more efficient if the product available to the store.

H2: How to develop channel to create more store to sell the product.

RESEARCH METHODOLOGY

PRIMARY DATA: I will collect the primary data though the questionnaire which is

close and open ended both.

SECONDARY DATA: Internet, Book and Journal.

Tool Used: Bar Graph, Pie Diagram

Sampling Method: Random Sampling chosen by the gathering of data

Sample Size:

1. 100 Dealers + customer

SCOPE OF THE WORK

Shree Cement Ltd. is an energy conscious & environment friendly business

organization. Having Nine Directors on its board under the chairmanship of Shri.B.G.

Bangur, the policy decisions are taken under the guidance of Shri. H.M. Bangur,

Managing Director. Shri. M.K.Singhi, Executive Director of the Company, is looking

after all day-to-day affairs. The company is managed by well qualified professionals

with broad vision who are committed to maintain high standards of quality &

leadership to serve the customers to their fullest satisfaction. The board consists of

eminent persons with considerable professional expertise in industry and field such as

banking, law, marketing & finance & general management.

JUSTIFICATION OF THE CHOOSING TOPIC


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It is one way in which I would be able to understand the supply chain wherein the

goods are being delivered from the company to the end consumers, also I would be

able to help the company with my project report, which could become a milestone in

my career path.

DETAILS OF EXTERNAL GUIDE

Name : Mr. Varun Mudgal

Company : Shree Cement ltd, Beawar

SUMMER INTERNSHIP

Company : Dalmia Cement, Ariyalur

Position : Management Trainee


x



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INTRODUCTION

I have divided the problem area basically in two parts first part will cover the

Industrial analysis and followed by this I have done research on the company

specific problem. The objective to doing so is to prove the objective of the

project.

Problem with the Industry consist the competition level that has with retail

channel management cement sector with low entrance risk in last 10 years

almost 20 to 30 new companies came in to this space and trying to earn profit

but it is really the hard for everybody to actually save their cost. The growing

need and demand of the Real estate would also be the factors for increasing

demand of the Cement, and for every good organization has to have the good

distribution network.

BACKGROUND TO THE PROBLEM

CEMENT INDUSTRY

Sector structure/Market size

India is the world's second largest producer of cement with total capacity of

219 million tonnes (MT) at the end of FY 2009, according to the Cement

Manufactuer’s Association. According to the Cement Manufacturer’s

Association, cement despatches during 2009-10 were 159.43 million tonnes

(MT) increasing by 12 per cent over 142.23 in 2008-09. Cement production

during 2009-10 was 160.31 MT an increase of 12.37 per cent over 142.65 MT

in 2008-09. Moreover, the government’s continued thrust on infrastructure will

help the key building material to maintain an annual growth of 9-10 per cent in

2010, according to India’s largest cement company, Shree Cement. In

January 2010, rating agency Fitch predicted that the country will add about 50

million tonne cement capacity in 2010, taking the total to around 300 million

tonne.


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New Investments

Cement and gypsum products have received cumulative foreign direct

investment (FDI) of US$ 1.71 billion between April 2000 and February 2010,

according to the Department of Industrial Policy and Promotion

In January 2010, Swiss cement company Holcim announced plans to

invest US$ 1 billion for setting up 2-3 greenfield manufacturing plants in

India in the next five years. The expansion will take the company’s total

cement-making capacity to 60 mtpa (million tonnes per annum) from 50

mtpa currently.

Jaiprakash Associates Ltd will invest US$ 984.1 million to take its

cement manufacturing capacity from 20 mtpa to 33 mtpa by 2012.

Madras Cements Ltd is planning to invest US$ 178.4 million to

increase the manufacturing capacity of its Ariyalur plant in Tamil Nadu

to 4.5 MT from 2 MT by April 2011.

Monnet Ispat & Energy (MIEL) will set up cement plants in

Chhattisgarh and Gujarat with an investment of about US$ 527.9

million. Work on the two plants will begin in the October-December

quarter under a new division of the company to be christened Monnet

Cement.

Ambuja Cements, the country’s third-largest cement maker, plans to

spend around US$ 756.3 million to expand its capacity to 24 mtpa from

the current 19 mtpa by year-end to meet strong demand from the

infrastructure sector.

Mergers and Acquistions (M&As)

Dalmia Cement has increased its stake in OCL India to 45.4 per cent

from 21.7 per cent at an investment of US$ 38.24 million as part of its

plan to expand its footprint in eastern India.

In April 2010, French cement maker Vicat bought 51 per cent in


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Bharathi Cement.

Ultratech Cement, the country’s second-largest cement maker and a

part of Aditya Birla group is acquiring Dubai-based ETA Star Cement

for an enterprise value of US$ 382.1 million.

Government Initiatives

Government initiatives in the infrastructure sector, coupled with the housing

sector boom and urban development, continue being the main drivers of

growth for the Indian cement industry.

Increased infrastructure spending has been a key focus area. In the

Union Budget 2010-11, US$ 37.4 billion has been provided for

infrastructure development.

The government has also increased budgetary allocation for roads by

13 per cent to US$ 4.3 billion.

India, being the second largest cement producer in the world after China with

a total capacity of 151.2 Million Tones (MT), has got a huge cement industry.

With the government of India giving boost to various infrastructure projects,

housing facilities and road networks, the cement industry in India is currently

growing at an enviable pace. More growth in the Indian cement industry is

expected in the coming years. It is also predicted that the cement production

in India would rise to 236.16 MT in FY11. It's also expected to rise to 262.61

MT in FY12. The cement industry in India is dominated by around 20

companies, which account for almost 70% of the total cement production in

India. In the present year, the Indian cement companies have produced 11

MT cement during April-September 2009. It took the total cement production

in FY09 to 231 MT.


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Industry Background

The history of the cement industry in India dates back to the 1889 when a

Kolkata-based company started manufacturing cement from Argillaceous. But

the industry started getting the organized shape in the early 1900s. In 1914,

India Cement Company Ltd was established in Porbandar with a capacity of

10,000 tons and production of 1000 installed. The World War I gave the first

initial thrust to the cement industry in India and the industry started growing at

a fast rate in terms of production, manufacturing units, and installed capacity.

This stage was referred to as the Nascent Stage of Indian Cement Industry. In

1927, Concrete Association of India was set up to create public awareness on

the utility of cement as well as to propagate cement consumption. The cement

industry in India saw the price and distribution control system in the year

1956, established to ensure fair price model for consumers as well as

manufacturers. Later in 1977, government authorized new manufacturing

units (as well as existing units going for capacity enhancement) to put a

higher price tag for their products. A couple of years later, government

introduced a three-tier pricing system with different pricing on cement

produced in high, medium and low cost plants.

Cement industry, in any country, plays a major role in the growth of the nation.

Cement industry in India was under full control and supervision of the

government. However, it got relief at a large extent after the economic reform.

But government interference, especially in the pricing, is still evident in India.

In spite of being the second largest cement producer in the world, India falls in

the list of lowest per capita consumption of cement with 125 kg. The reason

behind this is the poor rural people who mostly live in mud huts and cannot

afford to have the commodity. Despite the fact, the demand and supply of

cement in India has grown up. In a fast developing economy like India, there

is always large possibility of expansion of cement industry.

CEMENT PRODUCTION AND GROWTH

Domestic demand plays a major role in the fast growth of cement industry in

India. In fact the domestic demand of cement has surpassed the economic


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growth rate of India. The cement consumption is expected to rise more than

22% by 2009-10 from 2007-08. In cement consumption, the state of

Maharashtra leads the table with 12.18% consumption, followed by Uttar

Pradesh. In terms of cement production, Andhra Pradesh leads the list with

14.72% of production, while Rajasthan remains at second position.

The production of cement in India grew at a rate of 9.1% during 2006-07

against the total production of 147.8 MT in the previous fiscal year. During

April to October 2008-09, the production of cement in India was 101.04 MT

comparing to 95.05 MT during the same period in the previous year. During

October 2009, the total cement production in India was 12.37 MT compared to

a production of 11.61 MT in the same month in the previous year. The cement

companies are also increasing their productions due to the high market

demand. The cement companies have seen a net profit growth rate of 85%.

With this huge success, the cement industry in India has contributed almost

8% to India's economic development.

TECHNOLOGY UP-GRADATION

Cement industry in India is currently going through a technological change as

a lot of upgradation and assimilation is taking place. Currently, almost 93% of

the total capacity is based entirely on the modern dry process, which is

considered as more environment-friendly. Only the rest 7% uses old wet and

semi-dry process technology. There is also a huge scope of waste heat

recovery in the cement plants, which lead to reduction in the emission level

and hence improves the environment.

CEMENT DESPATCHES

Cement industry in India has successfully maintained almost total capacity

utilization levels, which resulted in maintaining a 10% growth rate. In 2006-07,

the total despatch was 155 MT, which rose up to 170 MT in 2007-08. The

month of October 2009 saw a cement despatch of 12.22 MT, which was


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almost 9% higher than the total cement despatch of 11.21 MT in the same

month in the previous year.

2008-09 (Apr-Oct) (in

MT)

2007-08 (Apr-Oct) in

MT

Production 101.04 95.05

Despatches (Excluding

Export)100.24 94.33

Export 1.46 2.16

Capacity Utilization (%) 85 93

Major Players in Indian Cement Industry

There are a number of players prevailing in the cement industry in India.

However, there are around 20 big names that account for more than 70%

of the total cement production in India. The total installed capacity is

distributed over around 129 plants, owned by 54 major companies across

the nation.

Following are some of the major names in the Indian cement industry:

Company Production Installed Capacity

Shree Cement 17,902 18,640

Gujarat Ambuja 15,094 14,860

Ultratech 13,707 17,000

Grasim 14,649 14,115


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India Cements 8,434 8,810

JK Group 6,174 6,680

Jaypee Group 6,316 6,531

Century 6,636 6,300

Madras Cements 4,550 5,470

Birla Corp. 5,150 5,113

Mergers and Acquisitions in Cement Industry in India

UltraTech Cement is going to absorb its sister concern Samruddhi

Cement to become biggest cement company in India.

World's leading foreign funds like HSBC, ABN Amro, Fidelity, Emerging

Market Fund and Asset Management Fund have together bought 7.5%

of India Cements (ICL) at a cost of US$ 124.91 million.

Cimpor, a Cement company of Portugal, has bought 53.63% stake that

Grasim Industries had in Shree Digvijay Cement.

French cement company Vicat SA bought 6.67% share of Sagar

Cement at a cost of US$ 14.35 million.

Holcim now holds 56% stake of Ambuja Cement. Previously it held

22% of stake. The company utilized various open market transactions

to increase its stakes. It invested US$ 1.8 billion for that.

Recent Investments in the Indian Cement Industry

In a recent announcement, the second largest cement company in

South India, Dalmia Cement declared that it's going to invest more than

US$ 652.6 million in the next 2-3 years to add 10 MT capacity.


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Anil Ambani-led Reliance Infrastructure is going to build up cement

plants with a total capacity of yearly 20 MT in the next 5 years. For this,

the company will invest US$ 2.1 billion.

India Cements is going to set up 2 thermal power plants in Andhra

Pradesh and Tamil Nadu at a cost of US$ 104 billion.

Anil Ambani-led Reliance Cementation is also going to set up a 5 MT

integrated cement plant in Maharashtra. It will invest US$ 463.2 million

for that.

Jaiprakash Associates Ltd has signed a MoU with Assam Mineral

Development Corporation Limited to set up a 2 MT cement plant. The

estimated project cost is US$ 221.36 million.

Rungta Mines (RML) is also planning to invest US$ 123 million for

setting up a 1 MT cement plant in Orissa.

CEMENT INDUSTRY

The cement industry is one of the vital industries for economic development in

a country. The total utilization of cement in a year is used as an indicator of

economic growth. Cement is a necessary constituent of infrastructure

development and a key raw material for the construction industry, especially

in the government’s infrastructure development plans in the context of the

nation’s socioeconomic development. Cement Industry In India Prior To

Independence The first endeavor to manufacture cement dates back to 1889

when a Calcutta based company endeavored to manufacture cement from

Argillaceous (kankar). But the first endeavor to manufacture cement in an

organized way commenced in Madras. South India Industries Limited began

manufacture of Portland cement in 1904.But the effort did not succeed and

the company had to halt production. Finally it was in 1914 that the first

licensed cement manufacturing unit was set up by India Cement Company Ltd

at Porbandar, Gujarat with an available capacity of 10,000 tons and

production of 1000 installed. The First World War gave the impetus to the

cement industry still in its initial stages. The following decade saw tremendous


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progress in terms of manufacturing units, installed capacity and production.

This phase is also referred to as the Nascent Stage of Indian Cement

Industry. During the earlier years, production of cement exceeded the

demand. Society had a biased opinion against the cement manufactured in

India, which further led to reduction in demand. The government intervened

by giving protection to the Industry and by encouraging cooperation among

the manufacturers. In 1927, the Concrete Association of India was formed

with the twin goals of creating a positive awareness among the public of the

utility of cement and to propagate cement consumption.

After Independence

The growth rate of cement was slow around the period after independence

due to various factors like low prices, slow growth in additional capacity and

rising cost. The government intervened several times to boost the industry, by

increasing prices and providing financial incentives. But it had little impact on

the industry. In 1956, the price and distribution control system was set up to

ensure fair prices for both the manufacturers and consumers across the

country and to reduce regional imbalances and reach self sufficiency.

Period Of Restriction (1969-1982)

The cement industry in India was severely restrained by the government

during this period. Government hold over the industry was through both direct

and indirect means. Government intervened directly by exercising authority

over production, capacity and distribution of cement and it intervened

indirectly through price control. In 1977 the government authorized higher

prices for cement manufactured by new units or through capacity increase in

existing units. But still the growth rate was below par. In 1979 the government

introduced a three tier price system. Prices were different for cement

produced in low, medium and high cost plants.

However the price control did not have the desired effect. Rise in input cost,

reduced profit margins meant the manufacturers could not allocate funds for

increase in capacity. Partial Control (1982-1989) To give impetus to the


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cement industry, the Government of India introduced a quota system in

1982.A quota of 66.60% was imposed for sales to Government and small real

estate developers. For new units and sick units a lower quota at 50% was

effected. The remaining 33.40% was allowed to be sold in the open market.

These changes had a desired effect on the industry. Profitability of the

manufacturers increased substantially, but the rising input cost was a cause

for concern.


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COMPANY PROFILE

Shree Cement is the largest cement manufacturer in North India and among

the top five cement manufacturing groups in the country. The company is

being professionally managed by its promoters Shri B. G. Bangur, Chairman

and Shri H. M. Bangur, Managing Director. Turnover of the company for 2009-

10 was Rs. 3632 Crores and Net profit was Rs. 676 Crores, while in 2008-09

the company posted a turnover of Rs. 2715 crore and generated operating

profit of nearly Rs. 1034 crore . It has more than quadrupled its capacity in the

last 5 years to reach present cement capacity of 12 million tons p.a. with

manufacturing plants at Beawar, Ras, Khushkhera and Suratgarh in

Rajasthan and Laksar (Roorkee) in Uttarakhand. The Company follows a

multi-brand strategy and sells cement under the highly recognized brands of

Shree Ultra, Bangur and Rockstrong. which together enjoy largest market

share in high value markets of Rajasthan, Delhi & Haryana.

Operational excellence and efficiency of the Company gets reflected in one of

the highest operating profit margins in the Industry. High-calibre project

management and execution capabilities have seen the Company compress

project timelines and push rapid capacity expansions. A striking case in point

is the commissioning of Unit VII in a world record of 367 days. Shree is also

into the power sector with a Power generation capacity of 210 MW which is

set to go up to 560 MW by December 2011. It is known to be an energy

efficient and environment friendly company and has received various awards

and accolades at national and international level for excellence in energy

efficiency and environment management. Shree has set up waste heat

recovery projects of 46 MW capacity which is the largest waste heat power

generation capacity in world cement industry excluding China.Shree follows

the triple bottom-line approach of measuring performance against thethree


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benchmarks of Economical, Social and Environmental. Shree is an active

participant at Climate change forums andis the first Indian cement company

to join the Cement Sustainability Initiative of the World Business Council for

Sustainable Development, Switzerland. We differentiate ourselves in a highly

competitive market with continual changes in our marketing & branding

strategy and by aligning our offerings to the customer's needs instead of

forcefully pushing products. This is to

say we do not create customers, we create what customers want.

We believe that our sustained success is because of our highly satisfied

customers and that continuous learning

about their psyche and behavior is the only path ahead. Today, by creating

depth in dealer networks, extensive

brand promotion and opening up new strategic markets, we are able to

absorb a larger sales quantum, ensure

better realizations and increase our competitiveness.

Shree Ultra

Shree Ultra is our flagship brand, contributing to more than half of our sales

volume and is

the first manifestation of our strategic move from commodity to brand

marketing. Its two variants, Shree Ultra OPC and Shree Ultra Jung Rodhak

Cement are distinctly positioned in

the market. Shree Ultra Jung Rodhak Cement through its unique rust

prevention properties, has high acceptance amongst brand influencers

(masons etc.) and high brand recall value.

The brand, while enhancing its presence in highly educated markets of Delhi

has increased

its reach in the interior markets of Madhya Pradesh, Uttrakhand, Uttar

Pradesh and Punjab.


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Bangur Cement

Bangur Cement, launched as a premium brand in the market,is designd to

meet the high end market segment. Its unique brand tagline "Sasta Nahin,

Sabse Achcha", gives it the status of 'top of the market' value brand.

Rockstrong Cement

Rockstrong Cement is the youngest brand from the Shree stable. It has

recorded the highest year on year growth amongst the three brands of Shree

in 2009-10. Its holds a position in the market on the promise of high

performance and ability to withstand exceptionally harsh environment

conditions. Rockstrong promotions are carried out through a series of witty

hoardings on current topics,


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DISTRIBUTION SYSTEM OF SHREE CEMENT LTD

The- company whose operations are concentrated in and around Delhi. It

Franchisees and 15 Distributors- They also have 'instant access personal

care kit counters- Each franchises or distributor can have any number of

dealers under him as long as the person is approved by the Shree cement ltd

authority. Each franchises has to invest Rupees Ten Lakhs. to obtain a

franchise and should employ an officer recruited by ITC. This person acts as

an liaison between the company and the franchises. The franchises can it

any number of dealers as long as their territories do not overlap. But

unfortunately Shree cement ltd has not been very successful in controlling

territorial overlaps of dealers. The franchises can carry out his 1 her own

promotional strategy. For this the. company contributes 75% of the money

and the franchises contributes 25% of the money. The dealers under the

franchisee receive the same commission. The franchises and the dealer

obtain the feedback from the customers and they are sent through the liaison

officer on a day-to-day basis to ITC. The dealer has to invest Rupees. One

Lakh as an initial investment. The dealer of Shree cement ltd are not allowed

to provide any other operators' service.


Company

Distributor Franchisee

Dealers Dealer

Customer Customer

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Target set for distributors and the dealers is 100 -150 activations per month.

Hence the dealers can also go for their own promotions like banners and

discounts on festivals etc. The dealer provides service promptly. The

consumer on providing the bill of purchase for the handset and proof of

residence has only to wait an hour before getting connected. The staff of the

dealers and the franchisees are provided training by the Shree cement ltd

personnel.

Retail Distribution channel for SHREE CEMENT LTD

Markets all over the world have been on a roll in 2003 and the Indian bourses

are no exception having gained almost 60% in 2003. During this period, while

there are sectors that have outperformed this benchmark index, there are also

sectors that have underperformed. Shree cement ltd registered gains of just

33% on the BSE Shree cement ltd Index last year.

At the macro level, Indian economy is poised to remained buoyant and grow

at more than 7%. The economic growth would impact large proportions of the

population thus leading to more money in the hands of the consumer.

Changes in demographic composition of the population and thus the market

would also continue to impact the ITC.

Recent survey conducted by a leading business weekly, approximately 47 per

cent of India's 1 + billion people were under the age of 20, and teenagers

among them numbered about 160 million. Together, they wielded INR 14000

Cr worth of discretionary income, and their families spent an additional INR

18500 Cr on them every year. By 2015, Indians under 20 are estimated to

make up 55% of the population - and wield proportionately higher spending

power. Means, companies that are able to influence and excite such

consumers would be those that win in the market place.

Shree cement ltd market has been divided for a long time between the

organized sector and the unorganized sector. While the latter has been

crowded by a large number of local players, competing on margins, the former

has varied between a two-player-scenario to a multi-player one.


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Unlike the U.S. market for fast moving consumer goods , which is dominated

by a handful of global players, India's Rs.460 billion FMCG market remains

highly fragmented with roughly half the market going to unbranded,

unpackaged home made products. This presents a tremendous opportunity

for makers of branded products who can convert consumers to branded

products. However, successfully launching and growing market share around

a branded product in India presents tremendous challenges. Take distribution

as an example. India is home to six million retail outlets and super markets

virtually do not exist. This makes logistics particularly for new players

extremely difficult. Other challenges of similar magnitude exist across the

Shree cement ltd supply chain. The fact is that Shree cement ltd is a

structurally unattractive industry in which to participate. Even so, the

opportunity keeps Shree cement ltd makers trying.

At the macro-level, over the long term, the efforts on the infrastructure front

(roads, rails, power, river linking) are likely to enhance the living standards

across India. Till date, India's per capita consumption of most Shree cement

ltd products is much below world averages. This is the latent potential that

most Shree cement ltd companies are looking at. Even in the much-

penetrated categories like soaps/detergents companies are focusing on

getting the consumer up the value chain. Going forward, much of the battle

will be fought on sophisticated distribution strengths.

Structural Analysis Of SHREE CEMENT LTD

Typically, a consumer buys these goods at least once a month. The sector

covers a wide gamut of products such as detergents, toilet soaps, toothpaste,

shampoos, creams, powders, food products, confectioneries, beverages, and

cigarettes. Typical characteristics of Shree Cement products are: -

The products often cater to vary distinct but usually wanted for aspects -

necessity, comfort, luxury. They meet the demands of the entire cross section


17


of population. Price and income elasticity of demand varies across products

and consumers.

Individual items are of small value (small SKU's) although all Shree cement ltd

products put together account for a significant part of the consumer's budget.

The consumer spends little time on the purchase decision. He seldom ever

looks at the technical specifications. Brand loyalties or recommendations of

reliable retailer/ dealer drive purchase decisions.

Limited inventory of these products (many of which are perishable) are kept

by consumer and prefers to purchase them frequently, as and when required.

Brand switching is often induced by heavy advertisement, recommendation of

the retailer or word of mouth. Distinguishing features of Indian Shree cement

ltd Business

Retail industries involve the sale of new or used goods to end consumers for

personal or household consumption. Cut-throat competition is becoming

tougher in retail space with growing supply and demand.

Hyper-markets and Super-stores are battling each other on every major

corner while direct marketers (including catalogs and online sites) are stealing

customers from stores. Online selling at deep discounts is even making

immense inroads into consumer purchases of automobiles and travel. Direct

selling through online retailers, catalog companies and home-shopping

television channels continues to increase. Sales via the Internet rose

dramatically in 2005 globally.

To continuously improve on the process and leverage on the core

competencies, there is a need for a foundation that provides accurate

information wherever and whenever required. This calls for a need for

strategic management of supplies and inventory as far as retail industry in

concerned. To change an in-store paper based environment of registering

sales in retail shops to an online shopping environment, there needs an


18


integration of the data to increase customer satisfaction, increase productivity

and liberate sales people from registering chores and extend market beyond

traditional bounds.

Enriching category, item planning, streamlining product introductions and

other business strategies alone are not sufficient to sustain and over-grow in

the market place. Real-time visibility to sales and order status, in-store kiosks,

and service desk enhancements and strategic technologies to track inventory

have become the call of the hour to improve the customer experience and

further differentiate the brand. New efficiencies in managing stock and

collaborative forecasting and replenishment help ensure that the products

customers want are readily available on store shelves.

Strategic methods and tools like Vendor Managed Inventory, ERP and SCM

are recognized very much these days. Several Indian companies have

already come up with either a home-grown ERP or SCM model or they use

packages from well-established firms. There is a need for a strategic

collaboration of the internal process with the business process of the suppliers

and customers. Hence, this paper would aim at answering the question, "How

retailers need to organize their supply chain strategically to compete in

consumer market?"

Our team has, therefore, tried to analyze the present scenario of retail

industry and has come up with some suggestions as possible strategies in

Supply Chain Management for Retail industry. We are proposing the following

model for information integration in a retail industry: -


19


The strategic innovation should ideally start from identifying important supply

chain member with whom it is critical to link, thus, making way for a spatial

convenience. Focusing on providing dynamic visibility to the supplier about

the status of the inventory, and using techniques to gather the consumption

pattern of products, and thereby forecasting to a number nearer to accuracy,

would form part of our suggestions.

Delivering right product at the right time for the right price with the least

possible cost through strategic planning of demand and supply and effective

utilization of inventory, distribution, warehousing and transportation seems like

a complex scenario of unattainable level.

Well, this statement is nothing but the idealistic state. Nearing what is known

as perfection needs continual improvement and timely innovations.

Timely innovations and strategic moves can become disruptive many a times.

Take the case of Shree cement ltd effect. What seemed way back in 1962 as

a small outlet in the remote part of Indian rural area through e choupal, is now

the legend of American retail business. Excellent inventory tracking system


20


and efficient distribution coupled with reduced price for consumers is what

made Shree cement ltd the hallmark of FMCG sector. In this paper, the urge

for a retail industry to go for ways to improvise and maintain its supply chain

along with suggested ways for the same are discussed.

Challenges in Retail

The following are the key areas that may pose a threat to those retail

companies that ignore the impacts of giving less importance to manage their

demand and supply: -

Forecasting and Inventory Management for JIT replenishments of

products.

Peak Season Demand Handling.

Order Management in case of retailers with multiple outlets.

Warehouse Management in case of multiple outlets.

Introducing new products.

Handling variety of items.

Need for Managing Supply Chain

A Supply Chain can be considered as the set of entities that collectively

manufactures a product and sells it to an end-point. (Stern et al, 2001, p.513).

To enhance service through time based delivery and make-to-order a retail

industry should look at ways of building a relationship with suppliers through

enhanced Supply Chain Management. Leveraging information as a service

can enable staff to respond quickly to market opportunities and gain new

insight from existing data.

This calls for a system that efficiently tracks information and which is put to

use strategically. "There is tremendous competition in the retail space,"

explains Ken Dschankilic, Enterprise Architect, Canadian Tire Corporation.


21


"To keep our edge, we must continuously improve our processes and

leverage our core capabilities in new ways. To do this, we need a solid

foundation that provides accurate information wherever and whenever it’s

neede.

The area that has been highlighted would form part of our interest and the

information that need to flow between the whole-saler and the retailer, and the

information between the consumer and the retailer are of importance. The

strategies proposed mainly will deal with how to effectively handle the

available information and utilize them for the enhanced service at customer

level specific to retail industry.

There are three broad categories of distribution channel that are generally

used by cosmetic companies.

1. Distributor or Dealer network.

2. Franchisee.

3. Stand alone stores.

A diagrammatic representation of the distribution channel is as shown below: -


22


Dealer or distributor network channel is the most widely used distribution

channel used by the cosmetic companies. In this distribution channel, the

manufacturer appoints a distributor who is given a certain area in which he will

operate. The distributor purchases goods from the manufacturer. He then

dispatches his salesmen to various retail outlets like malls, departmental

stores, groceries, etc to take order and supply the goods to the outlets.

Companies like Philips , Energetic and Surya use this distribution channel.

The common trends used in the industry regarding the setup of a distribution

channel are as follows: -


23


Trends of the industry

Shree Cement BIRLA CEMENT

Distributor Margin 6% 8%

Retailer Margin 15% 20%

Cash Discount 1-2% NO

Credit Period 15 Days 15 Days

Franchisee Status Performance based Performance based

Replacement 100% replacement is done 100% replacement is done

Standalone stores are another type of distribution channel that is used by

various organizations. In this type, companies open up a retail space where

the entire store is dedicated to their own products. Birla, Lafarge and Shree

Cement.


24



RESEARCH OBJECTIVE

To study Supply chain management concepts and practices in

industrial scenarios.

To carry out supply chain opportunity analysis with particular reference

to Shree cement

To Benchmark the Implementation Of Supply Chain Management

Techniques In Shree Cement

To study how company work out for its lead time, utilization of the

transport effectively and efficiently.

Do the factor analysis through the primary data analysis

iv) Cement is extremely heavy, so that transportation must be

optimized through network

v) Demand is normally stable, with seasonal trends but very few

spikes

vi) Multiple parties in the supply chain make a simple flow more difficult

HYPOTHESIS

H1: Supply chain became more efficient if the product available to the store.

H2: How to develop channel to create more store to sell the product.


PRIMARY DATA: I will collect the primary data though the questionnaire which is close and open ended both.

SECONDARY DATA: Internet, Book and Journal.

Tool Used: Bar Graph, Pie Diagram

Sampling Method: Random Sampling chosen by the gathering of data


25


Sample Size: 100 Dealers + customer

SCOPE OF THE WORK

Shree Cement Ltd. is an energy conscious & environment friendly business

organization. Having Nine Directors on its board under the chairmanship

Shri.B.G. Bangur, the policy decisions are taken under the guidance of Shri.

H.M. Bangur, Managing Director. Shri. M.K.Singhi, Executive Director of the

Company, is looking after all day-to-day affairs. The company is managed by

well qualified professionals with broad vision who are committed to maintain

high standards of quality & leadership to serve the customers to their fullest

satisfaction. The board consists of eminent persons with considerable

professional expertise in industry and field such as banking, law, marketing &

finance & general management.

JUSTIFICATION OF THE CHOOSING TOPIC

It is one way in which I would be able to understand the supply chain wherein

the goods are being delivered from the company to the end consumers, also I

would be able to help the company with my project report, which could

become a milestone in my career path.


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LITERATURE REVIEW

Logistics is about moving materials, information and funds from one business

to another or from a business to the consumer. It is a vital part of the business

economic system and is a major global economic activity. In fact 10-15 per

cent of product costs are logistics related. Worldwide, logistics constitutes

about $2 trillion a year. For any country, the logistics cost is estimated

between 9 and 20 per cent of its GDP. Every company dreams of achieving

the seven R's - delivering the right product in the right quantity and the right

condition, at the right place, at the right time, for the right customer at the right

cost. Effective logistics management alone can make this possible.

Logistics is one of the oldest and also the newest activities of business

management. It involves combining diverse functions and service providers

who may be culturally and objectively different. In the past, quality of products

and services was the key differentiating factor for companies operating in the

same market. In due course, quality and low cost became the winning

combination. Today, responsiveness to the customers' needs is the

determining factor. An enterprise that caters instantly to the needs of the

customer is the winner. Integrated logistics can serve as a potent tool for

success in today's competitive business environment.

Logistics is an organized process of managing the flow of merchandise from

the source of supply - the vendor, wholesaler or distributor - through internal

processing functions like warehousing and transportation, until the

merchandise is sold and delivered to the end customer. Logistics

management aims to reduce inventory-holding costs and improve profits,

while enhancing customer satisfaction. Anything can be ordered online, but

receiving a tangible product is impossible. The difference between e-business

success and failure lies in a company's ability to manage the logistics.

History of Logistics


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The Greeks defined logistics as "the science of correct reasoning by means of

mathematics". The first modern use of the term was in the military to identify

the process of planning and coordinating the movement of army and weapon

support systems. Good logistics brings out the ability to move faster and

accurately to the battlefront. “If one applies the same to the business

organisation, it is one's ability to reach the product to the consumer at the right

time, right place, right quantity and at the lowest cost.” On similar lines, supply

chain management will mean the network of organisations involved in the

process by which goods are moved from producer to consumer and the

counter flow of information, to manage the supply chain as a single entity.

A prominent application of logistics was in World War II where weapon

movements were coordinated to ensure success. A recent instance of

massive logistics initiatives is in the Gulf war. With increasing competition in

the market place, managements started focusing on customer services in the

early 1950s in developed markets such as Europe and the U.S. In late 1960s

some of the logistics concepts were tested. Following the oil crisis of the

1970s and the concept of just in time in manufacturing customer-servicing

standards were given more importance and new integrated logistics models

and solutions were born. The emergence of organized distribution system by

department stores and super fast courier service organisations gave a boost

to logistics concepts and strategies. Today all businesses are looking for

seamless transaction systems to co-ordinate their information and material

requirements along the value chain. At the micro level any manufacturing and

marketing company spends 5 - 35 per cent of sales on logistics. The major

cost components are transportation, warehousing and inventory carrying cost.

Improvements in logistics get reflected in a reduction in inventory levels,

shorter delivery schedules, and improved servicing standards with significant

savings in total costs.

Logistics Management Process


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Michael Porter in his famous book "Competitive Advantage'' has spoken of the

value chain approach and emphasized logistics as one of the most important

tools for competitive advantage.

The various processes and elements that are part of logistics as a discipline

are:

Inbound logistics: Purchasing, Inbound transportation, Inventory

Management.

Manufacturing: Production planning systems, Machine scheduling system.

Outbound logistics: Order booking process, Distribution management,

outbound transportation, and Warehouse management systems.

As customers started demanding improved servicing standards, fast cycle

time has become the key factor for business success, whether it is custom

made tailoring service in Hong Kong or development of a new car in Detroit.

Before delving deep into logistics, a look at the current business scene will be

great help.

Scenario of Logistics in India

At present, companies specialising in logistics operations in India use

traditional technologies and cater to stand alone services like transportation,

warehousing, clearing and forwarding. There is tremendous scope to upgrade

the technology, integrate the entire supply chain, improve productivity levels

and bring down operating costs. Any technology that can improve productivity

in transportation operations will be a great boom to the economy both directly

and indirectly with opportunities for 10-12 per cent reduction in costs. Besides

the savings on downstream users of transport will be much higher and the

cost multiplier effect on the economy will be reduced to that extent.

Given the emerging business and technological trends there are possibilities

for adoption of logistics solutions specifically designed for India. In addition,

there is a requirement for an integrated strategy towards developing logistics

and its related IT infrastructure and also enhancing its industry base.


29


In recognition of the growing need for technology-enabled solutions in

logistics in India and abroad, many companies such as eLogistics are taking

shape. In fact, there are a dozen multinational logistics companies such as

Exel, Bax Global and Menlo which have started operations in India during the

last few years.

Today logistics management in India has become complex with about ten

million related outlets to cater to the needs of 1000 million people.

The logistics market in India is estimated to be Rs. 260,000 crores and

constitutes 13 per cent of the GDP. It is much higher than for the U.S. but

lower when compared to countries like China and Korea.

A reduction in logistics costs by one percentage point will mean a saving of

$4.8 billion or Rs. 21,600 crores annually. Besides significant benefits can be

reaped through the multiplier effect of better logistics on all economic sectors.

About Customer Service

According to LaLonde and Zinszer have researched various ways that

customer service can be viewed: 1) as an activity, 2) in terms of performance

levels, and 3) as a philosophy of management. Viewing customer service in

terms of performance levels has relevancy providing it can accurately

measured. The notion of customer service as a philosophy of management

exemplifies the importance of customer-focused marketing. All three

dimensions are important to understand what is involved in successful

customer service.

A broad definition of customer service should embody elements from all three

perspectives. LaLonde and his associates offer the following definition:

“Customer services are a process for providing significant value-added

benefits to the supply chain in cost-effective way.” This definition illustrates

the trend to think of customer service as a process-focused orientation that

includes supply chain management concepts.


30


It is clear that excellent customer service performance seems to add value for

all members of the supply chain. Thus, a customer service program must

identify and prioritize all activities important to accomplish operating

objectives. A customer service program also needs to incorporate measures

for evaluating performance. Performance needs to be measured in terms of

goal attainment and relevancy. The critical question in planning a customer

service strategy remains, does the cost associated with achieving the

specified service goals represent a sound investment and, if so, for what

customers? Finally, it is possible to offer key customers something more than

high-levels basic service. Extra service beyond the basics is typically referred

to as value- added. Value-added services, by definition, are unique to specific

customers and represent extensions over and above a firm’s basic service

program.

The three fundamental dimensions of customer service were: -

Availability.

Performance.

Reliability.

About Logistics & Customer Service

Logistics contributes to an organization’s success by providing customers with

timely and accurate product delivery. The key question is who is the

customer? For logistics, the customer is any delivery destination. Typical

destination range from consumers’ homes to retail and wholesale businesses

to the receiving docks of a firm’s manufacturing plants and warehouses. In

some cases the customer is a different organization or individual who is taking

ownership of the product or service being delivered. In many other situations

the customer is different facility of the same firm or a business partner at

some other location in the supply chain. Regardless of the motivation and

delivery purpose, the customer being serviced is the focal point and driving


31


force in establishing logistical performance requirements. It is important to

fully understand customer service deliverables when establishing logistical

strategies.

Whereas logistics is not capability that contributes to overall success, it is

fundamental to servicing customers. In a typical marketing situation, the

desired customer service performance changes over time. To plan marketing

strategy in a dynamic will serve to illustrate how logistical customer service

requirement related to a specific product/segment situation will change over

time. The product life cycle structure offers a useful framework for viewing the

dynamics associated with customer service requirements planning.

In terms of overall logistical performance, the basic customer service platform

or program should be the level of support provided to all customers.

Transportation is the most visible of all functions of logistics and high

contributor to logistics cost. We can see trucks, containers and

wagonloads of material being moved from place to place as an activity

directly associated with trade and business. We should also appreciate

that this is an activity that adds highest amount of cost to the activity of

making inputs and outputs available to consumers. Transportation

function moves the products to meet customer expectations at

minimum cost.

Functions of Transportation


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Product movement:-

What is moved?

Raw Material, Semi Finished items, WIP, Finished goods, packaging material,

rejected material - movement is required up or down the supply chain. How is

this done? What Resources are used?

Resources used by transportation:

A. Temporal - product is locked up during transit, hence inaccessible. We

have to spend a positive amount of time in transporting the material. Time is a

resource [temporal resource] that is expended in transportation. During the

time the product is locked up costs are incurred in proportion to the time

B. Financial - several cost elements like administration costs, salaries,

maintenance costs are expended. Loss on account of product loss and

damage also needs to be accounted for. Fuel consumed is a big cost in

transportation

C. Environmental – this activity is a fuel guzzler, eats up natural fuels like oil,

directly and indirectly. - 67% of all domestic fuel usage in the US is by

transportation activity.

Creates congestion, air pollution and noise pollution. Environmental cost is

tangible and substantially intangible. As transportation utilizes temporal,

financial and environmental resources items must be moved only when

product value is enhanced

Product Storage:-


33


Temporary storage in stationary vehicles or Vehicles kept moving on a

circuitous route - Product storage is expensive in a transport vehicle. But

some times keeping overall cost in mind this is adopted.

A. When unloading and loading is more expensive than storage

B. When storage space is limited. [Situation when inventory levels are very

high]

Principles of Transportation

There are two fundamental principles guiding transportation management and

operations. They are economy of scale and economy of distance.

Economy of scale:-

It refers to the characteristic that transportation cost per unit of weight

decreases when the size of the shipment increases. It is common knowledge

that larger the capacity of the transport vehicle more goods can be

transported at a time which will decrease the cost per unit of transport. If

smaller is the capacity of the transport vehicle then to transport a large

amount of goods, more trips will have to be made which will increase the cost

per unit of transport.

Example: Rail or water transport is less expensive in case of bulk transport

than smaller capacity vehicles like motor or air. A transportation economy of

scale exists because fixed expenses such as administrative costs, invoicing

costs, equipment costs associated with moving goods and materials get

spread over the entire weight of the load. This will help to decrease cost per

unit of the goods transported.

Example: Suppose the cost to administer a shipment is Rs. 10.00. Then for a

10 kgs. shipment the cost of transporting per unit of the product becomes

Re.1.00, while for a 1,000 Kgs shipment the cost of transporting per unit of the


34


product Re.0.01. Thus it can be said that an economy of scale exists for the

1000 kgs shipment.

Economy of distance:-

It refers to the characteristic that transportation cost per unit of distance

decreases as distance increases. Transportation economy of distance is also

referred to as a tapering principle since rates or charges taper (decrease) with

distance. The rationale of economies of distance is similar to that for

economies of scale. Longer distances allow the fixed expenses to be spread

over more miles, resulting in lower overall per mile charge. These principles

are important considerations when evaluating alternative transportation

strategies or operating practices. The objective is to maximize the size of the

load and the distance that is shipped while still meeting customer service

expectations.

Example: local trains in Mumbai are of three types’ fast locals, semi-fast

locals and slow locals. Traveling through fast local saves times as it does not

halt at every station, but in case of slow trains it halts at every station which

consumes time more than the fast trains or the semi-fast trains.

Participants in Transportation Decisions

Normal commercial transaction has limited number of parties to the business

decision. They are seller, buyer and directly or indirectly government. But a

transportation decision has number of parties to the decision. These parties

have very important roles to play in transportation environment. Parties to a

transportation decision are those who have a stake in the transportation. They

are

1. Shipper: shipper is a party who wants to transport the goods to his

customer in a business transaction

2. Consignee is the party to whom the goods are sent


35


3. Carrier is the service provider who carries the consignment from shipper to

consignee.

4. Government has a role to play as they are keenly interested in

transportation and have a stake in it. Transportation makes business

happen which is fundamental to the economy of any society. Economic

prosperity to the society is the objective of the government of the day.

Government also collects tax on the transaction. Government represents

general public whose interest they have to protect.

5. General public is another party who has a large stake in the transaction

involving transportation. Public want goods produced at different parts of

not only country but also world. Their demand cannot be met without

transportation.

Roles and perspective of each party

Shipper and consignee:-

Predictable and minimum transit time, minimum cost, minimum taxation,

specified pick up and delivery times, zero loss and damage, timely exchange

of information and invoicing. These are the needs of the above parties. They

look at transportation from this angle. They are the basic elements of

transportation. Business between them initiates the need for transportation

Carrier:-

What do carrier wants? Revenue maximization and cost [labor, fuel and

vehicle costs, taxation] minimization. Flexibility in pick up and delivery times to

consolidate movement. Carrier facilitates the business between shipper and

consignee. He gets paid for his service. He adds value to the supply chain by

moving the material from supplier to the customer. Carriers’ strike in our

country is a repetitive phenomenon to protest against role of government.


36


Government:-

Government while playing their role exercise control on all the players. They

want the business to flourish, at the same time benefits to reach uniformly all

over the country. They also have to provide the necessary infrastructure to

support transportation. It is said that one of the causes that expedited the

break up of Soviet Union was the weak infrastructure on account of which

products could not be transported to far-flung parts of the country. Hunger

deaths in India in spite of self-sufficiency in food production are examples to

illustrate the interest of the government. Government controls carrier rates

and licenses. Government owned carrier service is probably the cheapest

option for transportation available to business. Government supports

transportation by providing a network of roads, Airports and ATC, Ports and

Harbors. Government wants taxes to support above activities in national

interest. Ultimately the consumer, general public, has to bear the burden of

tax.

Public:-

Public as consumers trigger transportation activity by demanding products

and services of high quality from all over the world at minimum cost. They

have concern for safety as accidents of various kind have been a bye product

of transportation. Degradation of the environment is another threat about

which public are concerned as transportation is at the root cause of many

such concerns. Eg. Degradation of atmosphere and water, rise of noise

levels, oil spills due tankers carrying cargo of crude oil. When these parties

with separate and distinct interests interact transportation environment is

created. Conflict of interests raises issues that interrupt smooth transport of

goods in the country. Government as the main arbiter steps in to iron out

these differences in the interests of business.

Modes of Transport

Transportation modes are an essential component of transport systems since

they are the means by which mobility is supported. Geographers consider a


37


wide range of modes that may be grouped into three broad categories based

on the medium they exploit: land, water and air. Each mode has its own

requirements and features, and is adapted to serve the specific demands of

freight and passenger traffic. This gives rise to marked differences in the ways

the modes are deployed and utilized in different parts of the world. Recently,

there is a trend towards integrating the modes through intermodality and

linking the modes ever more closely into production and distribution activities.

At the same time, however, passenger and freight activity is becoming

increasingly separated across most modes.

Types of Transport

The basic modes of transportation are rail, highway, water, pipeline and air.

Rail:-

India has amongst the largest railway network in the world. Every city, town,

village has a rail connection. Through railways very large volumes of goods

can be transported economically over long distances to remote places in the

country. But railways in general incur high fixed costs because of expensive

equipment (i.e. railways must maintain their own rail track meant exclusively

for them) switching yards and terminals. However the railways experience

relatively low variable operating costs. Railways help to transport raw

materials from extractive industries which are located at considerable

distances. Besides this railways also transport massive amount of steel,

automobiles, war equipment, across the country.

Rail roads basically concentrate on the container traffic and are becoming

more responsive of the customer needs, emphasizing bulk industries and

heavy manufacturing. They have expanded their intermodal operations

through alliances and motor carrier ownership. Railroads are even

concentrating on development of special equipment. There are unit trains

which are entire train carrying the same commodity, which are bulk products

such as coal or grain. Unit trains are faster, less expensive to operate and

quick as it can bypass rail yarts and go direct to the product's destination.


38


There are also various different types, such. as articulated cars for extended

Rail chassis, double stack railcars, have 2 levels of containers, thereby

doubling the capacity of each car. It also reduces chances of damage

because of their design. These technologies are being applied by railroads to

reduce weight, increase carrying capacity, and facilitate interchange. The

above examples show the attempts being made by the railways to retain and

improve their share of overall transportation market.

Road Transport:-

Road transport forms an essential part of any transport activity, whether rail,

sea or air. It is essential as a supplementary and complementary mode of

transport to complete movement by other modes of transport. Eg. From one

terminal i.e. the railway station the goods have to be carried to the destination

like an area by road.

Highway transportation has increased rapidly since the end of World War II.

This is because Motor carrier industry results from' door-to-door operating

flexibility and speed of intercity movement. They are even flexible because

they can operate on each and every kind of roadways. In comparison to

railroads, motor carriers have relatively small fixed investments in terminal

facilities and operate on publicly maintained highways. Although the cost of

license fees, user fees, and tolls are considerable, these expenses are

directly related to the number of over-the-road units and miles operated.

The variable cost per mile for motor carriers is high because a separate power

unit and driver are required for each trailer or combination of tandem trailers.

Labor requirements are also high because of driver safety restrictions and the

need for substantial dock labor. Motor carriers are best suited to handle small

shipments moving short distances. The characteristics of motor carriers favor

manufacturing and distributive trades, short distances, and high-value

products. Motor carriers have made significant inroads into rail traffic for

medium and light manufacturing. This is also because of delivery flexibility,


39


that they have captured a major chunk of the market. In short, the prospect for

maintaining a stable market share in highway transport remains bright.

This industry even has a few problems, and one of the primary difficulties

relate to increasing cost to replace equipment, maintenance, driver wages,

and platform and dock wages. Although accelerating, labor rates influence all

modes of transport; motor carriers are more labor-intensive, which causes

higher wages to be a major concern. One more threat for hire-motor carrier

industry is over-the-road transportation by shipper-owned trucks or by

specialized carriers under contract to perform transport services for shippers.

Since 1980, the industry segments have become more definitive since

deregulation, and include truckload (TL), less than truckload (LTL), and

specialty carriers. TL segment includes loads over 15,000 pounds that

generally do not require intermediate stops for consolidation. LTL segment of

the industry loads less than 15,000 pounds that generally requires stops at

intermediate terminals for consolidation. Because of terminal costs and

relatively higher marketing expenses, LTL experiences a higher percentage of

fixed costs then TL.

These characteristics have caused extensive industry consolidation, since

deregulation has resulted in small number of relatively large carriers

worldwide.

Specialty carriers include package haulers such as Federal Express and

United Parcel Service. These firms focus on specific requirements of the

market or product. It is quite apparent that highway transportation will

continue to function as the backbone of logistical operations for the

foreseeable future.

In short Road transport offers certain advantages like

Door to door service to

customers which neither rail nor neither sea nor air transport can offer.


40


On per unit basis, the

cost of making a road is 1/6th that of laying a railway line.

Capital investment in

case of railways is much less then railways designed to carry equivalent

quantum of traffic.

Road transport

provides employment to six million persons (two million direct and four

million indirect)

Road transport faces a number of problems. This is evident from the

following facts:

T

There is an occasional storage of diesel fuel in the country.

V

vehicle availability in the country has been problematic. With the recent entry

of a number of manufacturers, the situation has improved to some extent.

T

The cost of components and accessories, such as tyres and batteries, has

escalated tremendously. The Octroi and police check posts are to many,

resulting in heavy detention to road vehicles.

T

The present Motor Vehicle Act regulating the issue of licenses and permits

and movement of vehicles is very restrictive. It was decades ago to control

and regulate traffic. The current requirements of traffic are for development.

There are persistent demands from various transport associations for


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suitable amendments of the Motor Vehicle act. But they do not seem to

receive due attention.

C

Conditions on Indian road are very bad and hazardous. They tend to reduce

speed of vehicles, which leads to wastage of natural transport capacity.

R

oadside maintenance and service facilities have not developed though found

necessary.

T

he system of national, zonal and state permits restricts free growth of road

transport but the system has to be followed.

Water transport: - _

One of the oldest modes of transportation is water. In terms of time factor,

they may be slow. But, they can carry more shipment, at reduced cost over

longer distance. Water transport could be of inland type or oceanic transport.

Inland water transport

Inland water transport is used mainly for transport; within a country. In our

country Inland water transport through rivers and canals is quite popular

because of the low cost and bulk transport. But here, the inland water

transport system heavily depends upon the rain and in many places on the

tides. So, in our country, we cannot guarantee the functioning of inland water

throughout the year at the same efficiency.


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Oceanic Transport

Oceans act as huge waterways for transport of goods form one country to

another. Oceanic transportation includes import and export of crude and bulky

commodities like materials which are removed from mines, cement, chemical,

crude oil, iron ore, coal, chemicals like sulphur, crude petroleum, and selected

agricultural products, etc.

The main advantages of transport by water are the cost and capability of the

operation. The capability of water to carry large tonnage at low variable costs

-makes it in demand. When a company desire low freight rates and the speed

and the time of transport are secondary, it has the option of selecting water as

a mode of transport.

The main disadvantage of water transport is the limited range of operation

and speed. Unless the origin and destination are adjacent; supplement haul

by rail or truck is required. Water transport isn't all that flexible. Labour

restrictions on loading and unloading at docks create operational problems

and tend to reduce the potential range of available traffic. Also, a highly

competitive situation has developed between railroads and inland water

carriers in areas where parallel routes exist

Air Transport:-

Air transport though new as compared to other modes of transportation, has

gained large popularity in transporting various commodities. The basic

advantage of Air transport is its high speed. By air, the time required may be

just a few hours, which may be days by other modes of transport. However

this being a major advantage,

Air transport also has various disadvantages. These are:


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Air transport is a costly

affair.

Air transport is limited

by 'lift capacity' i.e. goods upto certain load (weight) can be transported by

aircrafts.

Air freight variable cost

is very high due to fuel, maintenance and labour intensity of both in flight and

ground crew. The fixed cost of air transport is low as compared to rails, water

and pipeline. In fact, air transport ranks second only to highway with respect

to low fixed cost. Airways and airports are maintained by public funds and

terminals 'are by local communities. The fixed costs of airfreight are

associated with aircraft purchase and the requirement for specialized handling

systems and cargo containers. But the air freight variable cost is extremely

high as a result of fuel, maintenance, and labour intensity of both in-flight and

ground crews.

Even though it has all these disadvantages, high speed of air transport often

helps in compensating its other disadvantages. No particular commodity

dominates the freight carried by air transport. E.g. big courier companies such

as DHL, Fed Ex have their own air crafts to transport couriers between

different countries within a short time.

Other Modes of Transport:-

Other nodes of transportation includes the freight forwarder who accepts

small shipments and charge less carload (or less truck load or plane load)

rates and consolidates the small shipments into carload truckload, or

planeload tots, which are then sent by the lower quantity rates. Frequently,

the freight forwarder acts as a traffic department for small companies, which

usually ship in less carload lots. Shippers' cooperatives offer much the same


44


services as the forwarder in consolidating small shipments into larger ones,

except that the profits of the business are returned to the members of the

cooperative. Small packages can also be sent via speed post, and can use

some of the, expedited delivery services the Indian Post System now offers.

Transport Costing

Following are the essential elements of transportation to be taken into

account:

Transport Mode:-

The most critical decision is the "selection of appropriate mode of transport.

This fixes two basic elements of distribution function:-

a) Transit time or time lapse between production and sale;

b) Level of transportation costs.

There is an inverse relationship between transit time and transport cost; the

lower the transit time, the higher the transport cost. However, a decision that

takes into account only one cost factor cannot be justified. An evaluation of

the effect of transit time on other costs must also be considered. Unsold

production represents a high cost, and the longer the transit time, the higher

the level of unsold production.

Inventory Costs:-

A first class service to clients often requires immediate delivery and, hence

a higher level of inventory at the market centre. Economy, on the other hand,

calls for minimum inventory. The level of output held in stock is dictated by:-

a) Transit time: If the time lapse between production and sale is longer, the

level of inventory becomes higher.


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b) Sales pattern : If the pattern of sales is unpredictable, higher inventory

levels are caused.

c) Production pattern: If the production pattern is erratic (unpredictable),

higher (inventory levels have to be maintained to prevent stock outs.

Assuming that the sales and production patterns are largely fixed, the

important variable, which can influence stock, levels in transit time. As transit

time is reduced, the level of static (Non moving) stock can be reduced with

accompanying stock reduction.

Transit Capital:-

Capital can be released by changing the proportion" of the total output in

transit. This can be done by adjusting the transit time. As transit time is

reduced, the quantity of goods in transit can be decreased with an associated

reduction in transit inventory costs. By realizing the capital cost of transit

inventory and goods in transit, capital commitments can be reduced, and

more capital can be available for other purposes.

Obsolescence:-

When a slow or erratic mode of transport is employed, a higher level of

inventory is necessary to ensure continuous, prompt delivery to 'the customer.

However, when designs change rapidly, obsolescence reduces the market

value of the products in store. Rapid advances in technology bring about

swifter technical obsolescence. Any goods in the pipeline realize a lower

figure when new models are introduced by a company or its competitors. Air

distribution can overcome this problem, and the effect of such obsolescence

can be minimized.

Packaging:-

The nature of packaging of a products often determined by the mode of its

transport. E.g. Because of the dry conditions of carriage, short transit times


46


and minimum handling, air cargo generally requires much less packaging than

other forms of long distance transport. Goods dispatched by air may require

only a dust cover or even no cover at all. In some cases, savings on the

packaging of sophisticated products may more than pay for the actual

transport charges. Less packaging may lead to other advantages too. These

include lower unpacking costs and lower chargeable weight for freight.

Insurance:-

Insurance risks are based on transit time as well as the possibility of damages

en-route. With faster transit times, skillful handling, substantial reduction in

damage and greater security in transit, insurance premiums tend to fall

substantially.

Breakages:-

Cost of breakages is an important factor in any cost benefit analysis.

Therefore, only that mode of transport must be selected which substantially

reduces real damage in transit. This calls for a selection of the routes which

are more direct and which avoid transshipment, Handling equipment must

also be more sophisticated. Containers can be used by shippers for door-to-

door transportation, thereby avoiding all handling of goods by the carrier.

Pilferage:-

Many expensive administrative problems associated with breakages also

apply to pilferage.

Deterioration:-

In many surface, cargos Deterioration may be avoided only by complicated

and expensive packing to counteract mechanical shock, exposure to weather

or unfavorable temperature etc. Some cannot be stored at all, except at great

expense and others deteriorate slowly.


47


Deterioration can be costly in terms of packing stock losses and expensive

conditioning in store. It can only shut the door on many distant markets. A

high speed of transport and the frequency of services can overcome many of

these problems.

Transport Costs:-

Transport can be divided into 3 phases:

(i) Delivery to docks airport or railway station.

(ii) Transport from one terminal to another.

(iii) Delivery from the terminal to the consignee's place.

Miscellaneous costs:-

Local taxes, octroi, toll taxes etc during transport.

Customer Service Costs:-

Shortage of product when demanded by the customer leads to customer

dissatisfaction and thereby loss of sale for the company. So customer service

should be raised to be able to meet customer expectations. When we try to

raise customer service level costs are incurred conventionally, companies

stockpile to raise service level But the current thinking is to reduce

response time to customer need rather than increase the stock as costs of

inventory are well understood.

Freight rate structure

Freight rates are transportation rates charged by carriers for shipping the

goods to the consignee’s premises. These rates are structured round some

principles. Some of the principles are commercial nature and some of them

are structured by the state.

Principle of freight rates

Should cover actual cost of transportation:-


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Fundamental principle is that the rate should cover the cost without fail.

Factors influencing cost of transportation

A. Fixed costs:

• Interest on capital invested in the fleet

• Depreciation

• Insurance premium

• Administrative overheads and expenses on fixed facilities

B. Semi fixed costs:

• Salaries of the staff

• Miscellaneous maintenance expenses directly related to running of the

transport vehicle.

C. Variable costs:

• Cost of fuel and lubricants

• Maintenance directly attributable to a particular trip. Damage to the vehicle

and also the cargo. E.g. Hilly roads, bad roads, war effected sea routes

Vehicle utilization:-

Carrier likes to gain maximum mileage out of his vehicle. If vehicle is idle it is

a big loss to the carrier organization. Hence the carrier would like to run his

vehicle at top speed to cover max. Distance at min time. While structuring the

rates carrier would like to charge more if opportunity for maximum utilization is

limited.

Quote higher rates if following are not conducive to the above

Road conditions are

bad. Hence vehicle can not be driven fast.


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Terminal detentions

[congestion, formalities, for loading unloading (handling) etc.]: a delay at the

terminal brings down vehicle utilization as the vehicle is idling. If the

destination is known for this kind of delays carrier would charge higher rates.

Obtaining a return load

[market factors]. If the destination does not offer opportunity for a return load

carrier asks for a higher rate as would not be able to utilize his vehicle during

return trip. Normally if the destination is a production center one would always

find return trip to consumption center. But the other way round probability of

return load is very low.

Nature of goods,

hazardous, corrosive [liability, insurance]. Such goods are detrimental to the

safety of the transport vehicle and operating staff. Hence rates are high when

such goods are shipped.

Density, consignment

light by weight: when the consignment is light by weight the truck becomes full

without full load being loaded. Hence the carrier doesn’t get paid for the full

load. So he hikes his rates when the consignment is light.

Storability, shape and

size of the product. When the load has an odd shape speed of the vehicle is

reduced to accommodate the center of gravity. This brings down the utilization

apart from being risky.


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Traffic Bearing Capacity:-

Transportation adds value by making the product available to the customer.

But the cost incurred by the shipper while transporting should not outweigh

the value added. The carrier structures rates keeping this principle in mind.

Public use:-

State introduces the principle that the transportation of essential commodities

should be done at a lower rate.

Government Policy:-

Freight rates are controlled by the state for promotion of certain type of trade

and development of certain type of industry as per the industrial policy

prevalent at that time. Freight rates are hiked or depressed by state the to

meet the objectives of the policy.

Profit:-

Freight rate should cover costs of operation, capital investment and margin

for reasonable return on investment. It should also compensate

entrepreneurial time and efforts.

Business should generate enough funds to provide for future development of

business. The freight is expected to generate enough money to cover all

these requirements.

Transport infrastructure

Infrastructure is the main facilitator for any activity to take place. For

transportation to take place a strong infrastructure is primary. If this

infrastructure is inadequate transportation gets slowed down resulting into a

major obstacle in the growth of trade and business in that area.

Elements of transportation infrastructure


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• Terminal facilities - well maintained loading unloading facilities, space

for movement of vehicles, platforms, railway yards

• Vehicles- trucks, ships or wagons depending on the mode. Their size,

shape & speed

• Right of way- passage to move on. Rails, roads, airways, limitations on

speed, weight, height etc. If we use this particular passage.

• Prime movers – the powerhouses moving the vehicle of transport

shortage of which seriously affect transportation. Shortage of good

locomotives impairs the utility of railway as a mode of transport.

Carrier organizations – are the transportation service providers in

business. Transportation is their core business. Good service provides a

vital fillip to business and trade. Railways, roadways, airlines, shipping

lines are service providers.

FINDING AND ANALYSIS

r 1. What type of Business you deal in

A. Retail B. Wholesaler C. Both


52


Respondent

Retail 45

Wholesaler 36

Both 19

As per the procedure of primary data i have collected the data through the

structured questionnaire from Dealer, Wholesaler who are doing both of them

because those are people who let understand better the product offerings and

there classification. 36% of the people suggested are come from wholesaler

background although 45% data i have collected from the retailers. ‘

2. What All Flooring Brands do you Deal in ?

Company Brand Type of Dealership

Years of

Association


53


Shree

Cement

Cement

Authorized Dealers 10 Years

ACC Cement Authorized Dealers 6 Years

Lafarge Cement Dealers cum Retailers 2 Years

Birla Cement Dealers cum Retailers 3 years

JK lakshmi Cement Dealers cum Retailers 2 Years

As per the study reflects that most of the other company who is providing

Cement to the Indian customer are having Dealers and Retailers both in the

same company. Other companies like ACC, Shree cement are providing all

the cement and other solution to their authorized dealers of the company.

3. Does customer has some preference regarding any brand?

If yes name the brand in order of the preference.


54


- Customer does not have any such brand preference who are first time

buyer and new to the market but second time purchaser has different

brand choice i.e.

- JK Laxmi

- Shree

If no,

i) Name the brand that you recommend to them:

- For some customer it is really new market so the prefer brand suggest by

the dealers is

ACC

JK Laxmi

Shree

4) On what basis Recommendation given to this brand.

A. Quality


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B. Price

C. Users

D. Brand name

E. Any others.

A. Quality 10

B. Price 33

C. Users 38

D. Brand name 20

E. Any others. 5

As per the recommendation given by the dealers on the various basis 36% of

the dealers give the recommendation on the users basis for example


56


customers choice and uses. 31% of the dealers said they recommended

product on the Price basis because customer are very price sensitive.

5. In the last two years do you have some changes in dealership of any

brand?

A. Yes

B. NO

Yes 58

No 42

As per the study 58% of the dealers suggested there were no changes they

found in last two years in the dealership at the same time 42% of the dealers

said yes they have some sense of changes in this industry as well.

6. If yes Rate the reason in order of importance (1 for first importance)


57


A. Quality B. Company support

C. Customer Demand D. Price

E. Profit F. Supply

G. Any others.

Very

Important Important

Not

known

Less

Important

Least

Important

A. Quality 43 39 16 1 1

B. Company

support 32 34 13 12 9

C. Customer

Demand 22 29 16 20 13

D. Price 32 12 17 23 16

E. Profit 28 34 9 8 21

F. Supply 12 36 13 23 16


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As per the study suggested that the most important factor which could be the

changes of dealership is the company supply of the product , price could be

the one reason as well because this is scattered market and the people are

using those product which comes in the budget. As customer awareness is

grown the quality of the product is the one of most important factor to decide

about the dealership and its impacted most of time during the data collection

process.


59


7. In last two years any of the brands has increased its value in terms of

customer preference of selling volume, if yes rate the factors in scale of 1 to 5

where 1 stands for the Most Important factors.

Shree ACC

Birla

Cement Lafarge JK Laxmi

Improvement of

Quality 22 28 45 20 1

Company

Support 16 22 17 12 17

Price 28 24 16 11 12

New Policy 22 17 13 45 14

Any other 12 9 9 12 56

As per the survey result suggested that in the pricing factor there are some

major changes done by the Shree although all five factor as almost in the

equilibrium side of the company so it can be said that company has fair kind

of understanding of the Indian market and the Shree is not only working

towards the better price service but for also the other factors.


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8. Why you buy your Shree Cement from a particular company or Distributor?

A. Credit Facility B. Convenience

C. Availability D. Good Discounts.

E. After Sales Service F. Brand Name

A. Credit Facility 22

B. Convenience 16

C. Availability 12

D. Good Discounts. 22

E. After Sales Service 14

F. Brand Name 14


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As per the study suggested that it depends upon all the factors equality when

it comes to the Shree Cement buying customer are looking for the Good

discount (22%) , because they are price sensitive , the Credit facility is also

impacting lot (22%) because if the real estate customer purchasing in bulk

they prefer to pay after some time. Brand name is also required as the Indian

customer are very particular about the brand name as these days.

9. Do you sell Shree Cement on Credit?

A. Yes B. No

Yes 98

No 2

As per the study reveals that people are selling the Shree Cement in to the

credit (98%) but it depends upon the what kind of customer they are dealing

with as the customer are from the big builders or retail house they will not

even think to not sell on the credit.


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RECOMMENDATION

• There are competitive advantages through enhanced relations with fewer suppliers, resulting in lengthy relationships, which are more likely to include assets dedicated to the partnership. Sharing greater information and assets enable such programmes as just-in-time manufacturing, which will increase the efficiency for benefits to all parties through cooperation and coordination.

• The organisation must focus on empowering designated groups. As such special training and development initiatives should be investigated which focus on providing respondents with the tools for effective decision making. Should pursue empowerment by encouraging employees to develop their own abilities through company sponsored training and development and to accept as much responsibility within their capability.

• A highly important element of this strategy is EDI, an electronic data interchange

system that directly connects customers to the overall distribution system. Point-of -sale information from major accounts provides the ability to generate instantaneous data relevant to reorders, invoices and shipments. This distribution system, while costly and effective, would enable major customers of its products, to avoid having to place orders and coordinate logistical arrangements. It would also help sales to maintain the appropriate product inventory at any given time.

• Low inventory levels can contribute vastly to a firm’s efficiency and cost. Inbound logistics revolve around supplier relationship. Greater collaboration needs to be established with suppliers to support a Just-In-Time system of manufacturing. With overseas suppliers a local warehouse could be established as an intermediate supply.

• Effort is required to reduce work in progress before normal production resumes. If work in progress goes over a pre-determined value, all production needs to stop. The situation needs to be analysed for the reason for the build up and corrective action implemented. Trials need to be conducted for increase in machine speed so as to reduce production time. If the physical


63


properties do not change then the new machine speed to be specified in the specification to load cement faster and reduce the demurrages .

• The marketing and sales segment of the value chain involves such activities as promotion and advertising, sales representation, relationships, technical support as well as pricing strategies. This link is an important aspect of reputation building by serving as the direct interface between the consumer and the product. Advertising encourages people to make purchases. A web site needs to be established with relevant technical support and applications for the various products it offers. Sales representatives have to be familiar with the product that they sell. The product however has to be backed up by one of high quality.

• ‘First off’ is important to ensure the process capability of the production lines. The ‘first off’ is the first sample from the production line that is inspected against the specification. If it conforms then only is the production line allowed to continue. If the product does not conform, then adjustments are made to the process or the machine and another sample is tested. At key points in the production process, quality inspectors need to monitor every production of the process. Extra personnel need not be employed. The current line operators could be multi skilled so that they become aware of the requirements of the product. They will be performing dual functions. Important tests can be performed on the line instead of this sample being tested in the laboratory.. Therefore the relevant equipment needs to be purchased and line personnel trained for effective utilisation and feedback.


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CONCLUSION

1. A cement distribution system comprising: a powdered cement packing

vehicle including a cement accommodating unit for storing powdered cement,

and an automatic packing machine for packing the powdered cement stored

in said cement accommodating unit into containers in predetermined

quantities; and a powdered cement service center for supplying the powdered

cement into said cement accommodating unit of said powdered cement

packing vehicle; wherein said powdered cement packing vehicle is operable

to pack a desired quantity of the powdered cement into containers based on

an order from a cement purchaser, and is operable to directly deliver the

packed cement to the cement purchaser.

2. The cement distribution system of claim 1, wherein said powdered cement

packing vehicle further includes a portable communication terminal; said

cement distribution system further comprising a managing headquarters

including a computer wirelessly connected to said portable communication

terminal of said powdered cement packing vehicle, said managing

headquarters being operable to receive orders from the cement purchaser,

and to transmit powdered cement distribution information to said powdered

cement packing vehicle via said portable communication terminal.


packing vehicle is operable to transmit price settlement data to said computer

of said managing headquarters via said portable communication terminal.


packing vehicle further includes a switching mechanism for feeding the

powdered cement from said powdered cement packing vehicle.


packing vehicle further includes a distribution hose for distributing the


65


powdered cement, said switching mechanism being operable to switch a

distribution of the powdered cement stored in said cement accommodating

unit from said automatic packing machine to said distribution hose.

6. The cement distribution system of claim 1, wherein said automatic packing

machine is operable to pack an adjustable predetermined quantity of

powdered cement into each of a plurality of bags.

7. The cement distribution system of claim 1, wherein said automatic packing

machine is located at a center of said powdered cement packing vehicle.


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BIBLIOGRAPHY

Hugos, Michael, 2003, Essentials of Supply Chain Management, John

Wiley & Sons.

Chopra, Sunil and Peter Meindl, 2001, Supply Chain Management:

Strategy, Planning and Operations, Prentice-Hall Inc.

Fredendall, Lawrence D. and Ed Hill, 2001, Basics of Supply Chain

Management, St. Lucie Press.

Council of Logistics Management, www.clm1.org

Integrated Business Communications Alliance, www.ibcaweb.org


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dynamic of supply chain management of shree cement ltd

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