Supply Chain Management of Jaypee Cement by Jigyasa soni MBA-Banasthali vidyapith,rajasthan

1. 1
ASSIGNMENT ON
SUPPLY CHAIN MANAGEMENT
OF
JAYPEE CEMENT
Submitted to Submitted by:
Mr. Abhinav Nigam jigyasa soni
Assistant professor MBA- 3rd
sem.
Banasthali university ROLL NO. 13667

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Table of Contents: page no.
Brief about Company- 3-5
i. Products
About Supply Chain Management - 6-10
i. Definition
ii. Supply Chain operation Decision
iii. Jaypee cement procurement & manufacturing process
Distribution Network – 11-15
i. Geographical Spread
ii. PMLC Movement
Conclusion- 16
Bibliography- 17

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BRIEF ABOUT JAYPEE CEMENT-
Manufacture of cement has a history, which traces back to millennia. The Romans who were
prolific builders used burnt calcareous (calcium bearing) rocks along with pozzolanic materials
in an era Before Christ. The structures built by them, like the Pantheon, are still there for us to
see proving the goodness of cementitious materials as input material for construction.Post
industrialization and as infrastructure development started globally, demands for cement have
been growing steadily both quantitatively & qualitatively.
India is the second largest cement producer in the world after China and cement consumption has
been growing at a CAGR of over 8% p.a. in the last five years.
Jaypee group is the 3rd largest cement producer in the country. The groups cement facilities are
located in the Satna Cluster (M.P.), which has one of the highest cement production growth rates
in India.
The group produces special blend of Portland Pozzolana Cement under the
brand name-
Jaypee Cement‟ (PPC). Its cement division currently operates modern, computerized process
control cement plants with an aggregate installed capacity of 28 MnTPA. The company is in the
midst of capacity expansion of its cement business in Northern, Southern, Central, Eastern and
Western parts of the country and is slated to be a 35.90 MnTPA by FY13 (expected) with
Captive Thermal Power plants totaling 672 MW.
Keeping pace with the advancements in the IT industry, all the 260 cement dumps are networked
using TDM/TDMA VSATs along with a dedicated hub to provide 24/7 connectivity between the
plants and all the 120 points of cement distribution in order to ensure “track –the – truck”
initiative and provide seamless integration. This initiative is the first of its kind in the cement
industry in India.
In the near future, the group plans to expand its cement capacities via acquisition an green field
additions to maximize economies of scale and build on vision to focus on large size plants from
inception.
The Group is committed towards the safety and health of employees and the public. Company’s
motto is “Work for Safe, Healthy, and Clean & Green Environment”.

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CEMENT BRANDS-
Jaypee produces a wide variety of cements, which are specifically designed to cater to the
customer’s requirements for different types of cements in each of its markets. All the brands,
which the Company produces, are so evolved in their characteristics and properties that they will
surpass BIS Standards. For each brand, the relevant BIS standards are mentioned in enclosed
table along with a comparison with the BIS requirement.
The state-of-the-art cement plants operated by the Jaypee Group are equipped with the most
modern technology from the globally leading technology providers. Extensive Instrumentation &
fully automatic and computerized process control system, custom designed Quality Control
software like QSO Expert and CADES in the Mines, Cross Belt Expert Analyzer using the
Prompt Gamma Neutron Activation Analysis - for the first time in India, X-Ray Fluorescence
and X-Ray Diffraction analyzers and optical microscope, enable production of cement of the
highest quality consistently on a sustained basis. Jaypee Rewa Plant Quality control laboratory is
accredited laboratory from National Accreditation Board for Calibration & Testing Laboratories,
for chemical and mechanical Cement testing.
All brands are marketed in attractive HDPE bags, containing 50 Kgs of quality cement from
Jaypee. Bags are identified with a conspicuous Jaypee Logo, which also over the years has come
to be regarded as a “Hallmark” of quality.
Jaypee produces & markets both Portland Pozzolana Cement (PPC) & all grades of Ordinary
Portland Cement (OPC).
A brief introduction of each brand is enumerated as below:-
PORTLAND POZZOLANA CEMENT (PPC):-
Jaypee Cement (PPC) is a market leader among all blended/composite cements in the markets of
U.P, Bihar, M.P., Punjab, Haryana, Delhi & Nepal. Its unique design and blend, with high
strength clinker and superior quality flyash has made it the popular cement for construction of
large number of strong and durable structures in these states.
Fine particles of Jaypee Cement (PPC) when mixed with water readily form a smooth paste,
which results in a smooth surface. When used with sand and aggregates it yields a very strong &
durable concrete.
ORDINARY PORTLAND CEMENT:-
33 Grade Conforming to IS: 269-1989
43 Grade Conforming to IS: 8112-1989
53 Grade Conforming to IS: 12269-1987
53 S Grade Conforming to IRST-40(53 S)

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OPC-43 Grade:-
This is produced from enriched limestone most suited to make high quality clinker. Jaypee
Cement (OPC-43 Grade) is available in 50 Kgs HDPE bags of a distinctive design and cover. It
has emerged as the top choice of Engineers and Engineering Companies engaged in construction
of mega projects – such as National Highways, Bridges, Transmission lines, power plants,
Industrial and Residential structures.
OPC-53 Grade:-
Because of its fine nature, good particle size distribution, optimal phase composition, imparts the
properties of higher strength to the structures viz., Bridges, prestressed elements, penstocks,
precast elements etc. requiring very high strength to negotiate the heavy static &dynamic loads.
OPC-53S Grade:-
It is a used in heavily loaded or pre stressed structures, which are subjected to high dynamic
loads due to rapidly moving volumes, be it a train passing on the railway sleepers or a great
volume of water moving at high speed to generate electricity in a penstock. Page.

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SUPPLY CHAIN MANAGEMENT:-
Definition:-It encompasses all activities associated with the transformation of goods from the
raw material stage to the final stage when the goods and services reach the end customer.
Also, it involves planning, design and control of flow of material, information and finance along
the chain in order to deliver value to the end customer in effective and efficient way.
Supply Chain Operations Decision
Demand forecasting
Procurement planning
Production planning & Control
Distribution Planning & Control
Inventory management
Transportation Management
Customer Order processing
Relationship management

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JAYPEE CEMENT PROCUREMENT &MANUFACTURING PROCESS:-
Mining process:-
The cement manufacturing process starts from the mining of limestone, which accounts for
almost 60% of raw material for making cement. Limestone is excavated from open cast mines
after drilling and blasting and loaded on to dumpers which transport the material and unload into
hoppers of the limestone crushers.
Setting up plants near quarry saves on inbound transport cost proximity to reserve is the
singlemost important criteria.
Basically Jaypee Cement has their own mines to get limestone which they purchase from local
farmers mainly in Rewa plant but in other regions like Sidhi, Thandaetc they also borrow the
land for mining limestone in lease by state government.
Mining royalty imposed by state government is paid per ton basis. Dumper sand shovels
used in mining consume high quantity of diesel making it the second most important cost
driver.
The Mining operations are carried out by fully mechanized open cast mining method. The
equipments used include 153 mm drill machines, hydraulic excavators of 3.8 cum &
4.1cumbucket capacities, rock breaker, heavy duty 35 MT carrying capacity dumpers, bull
dozers and miscellaneous equipments.
the holes drilled for blasting are charged with bottom initiation using NONEL detonators to
minimize ground vibration and fly rock & “INSTANTEL – DS 077” Seismograph being used on
regular basis to monitor ground vibration.
Systematic and scientific mining operations of Jaiprakash Associates Limited are well
supported by mine planning activities done with the help of mining software
“SURPAC”.The reclamation and rehabilitation of mined out area is a continuous process in
Jaiprakash Associates Limited. The hard overburden generated is used to back-fill the area
capped with topsoil and area is reclaimed in planned way by adopting large scale afforestation.

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Crushing Stacking & Reclaiming of Limestone:-
The LS Crushers crush the limestone to minus 80 mm size and discharge the material onto a belt
conveyor which takes it to the stacker via the Bulk material analyser. The material is stacked in
longitudinal stockpiles. Limestone is extracted transversely from the stockpiles by the reclaimers
and conveyed to the Raw Mill hoppers for grinding of raw meal.
Crushing Stacking & Reclaiming of Coal:-
The process of making cement clinker requires heat. Coal is used as the fuel for providing heat.
Raw Coal received from the collieries is stored in a coal yard. Raw Coal is dropped on a belt
conveyor from a hopper and is taken to and crushed in a crusher. Crushed coal discharged from
the Coal Crusher is stored in a longitudinal stockpile from where it is reclaimed by a reclaimer
and taken to the coal mill hoppers for grinding of fine coal.
Sourcing Coal:-
Coal reserves are found mostly in eastern states. 95% of coal mining is still in control of center
or state government. Steel, power and cement companies are allowed to do captive or contract
mining. Government companies mined coal also known as “linkage coal” is 15- 20% cheaper
than open market coal. Companies try to maximize linkage off take by better liaison with
railways and coalmining companies
Since coal reserves are skewed towards the eastern zone, freight cost is the biggest cost driver.
Market coal prices are determined by global supply and demand equation. Presently Jaiprakash
Associates Ltd has borrowed many coal mines on lease by government, like in Shahdol district
they borrow coal mine on lease by Madhya Pradesh government and also on Jharkand they take
on lease by Ministry of Coal, Central government. Also company purchased coal from Coal
India Limited to fulfill needs

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Raw Meal Drying/Grinding & Homogenization:-
Reclaimed limestone along with some literate stored in their respective hoppers is fed to the
Raw Mill for fine grinding. The hot gasses coming from the clinkerisation section are used in
the raw mill for drying and transport of the ground raw meal to the Electrostatic
Precipitator / Bag House, where it is collected and then stored and homogenized in the concrete
silo. Raw Meal extracted from the silo (now called Kiln feed) is fed to the top of the Preheater
for Pyroprocessing.
Clinkerisation:-
Cement Clinker is made by pyroprocessing of Kiln feed in the preheater and the rotary kiln. Fine
coal is fired as fuel to provide the necessary heat in the kiln and the Precalciner located at the
bottom of the 5/6 stage preheater. Hot clinker discharged from the Kiln drops on the grate cooler
and gets cooled. The cooler discharges the clinker onto the pan / bucket conveyor and it is
transported to the clinker stockpiles / silos. The clinker is taken from the stockpile / silo to the
ball mill hoppers for cement grinding.
Cement Grinding & Storage:-
Clinker and Gypsum (for OPC) and also Pozzolana (for PPC) are extracted from their respective
hoppers and fed to the Cement Mills. These Ball Mills grind the feed to a fine powder and the
Mill discharge is fed to an elevator, which takes the material to a separator, which separates fine
product and the coarse. The latter is sent to the mill inlet for regrinding and the fine product is
stored in concrete silos.

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Packing:-
Cement extracted from silos is conveyed to the automatic electronic packers where it is packed
in 50 Kgs. Polythene bags and dispatched in trucks.
Electrical Power:-
For total power requirement of 90 MW (Jaypee Rewa Plant and Jaypee Bela Plant), we have
CPP 1 - 25.0 MW
CPP 2 - 25.0 MW
CPP 3 - 37.0 MW
Four DG sets provide an emergency backup.
Source of fly ash:-
Burning of coal results into fly ash. Thermal power plants across India produce plenty of good
quality fly ash which can be used by cement industry. Fly ash is used in producing blended
cement grades like PPC.Flyash prices are determined by local demand and supply equation.
Since freight cost is the major component, companies look for nearest source of fly ash.
Sourcing – Gypsum:-
Presently Jaiprakash Associates Ltd source gypsum from “Rajasthan States mines and Mineral
Limited” and also from Pakistan through middle man. Companies also import it from Thailand

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Distribution Network
Jaypee cement has around 156 cement dumps and all are networked using State-of-the-
artTDM/TDMA VSATs along with a dedicated hub to provide 24x7 connectivity between the
plantsand all the 156 points of cement distribution in order to ensure “track – the – truck”
initiativeand provide seamless integration. This initiative is the first of its kind in the cement
industry inIndia.
JAL has set up new capacities in Northern, Central, Western & Southern parts of the countryand
is targeting a capacity of 26 MTPA in 2010 and 32.80 MTPA by 2011, along with
CaptiveThermal Power Plants (CPPs) totalling 375 MW
Now the Group have 12 Integrated Cement Plants supported by 375 MW of captive
thermalpower, 9 split location plants, 11 Railway sidings and a jetty, giving the Group a pan-
Indiapresence in the cement sector.
Geographical Spread of the Jaypee Cement:-

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PMLC Movement:-
PMLC means Product Movement and Logistic Cell". This department ensures the delivery of
finished product to the customer directly and to company stock points for further delivery to the
customer on retail basis.
PMLC dispatch clinker to various mini plants and to grinding units as per requirement of
marketing. Companies invariably hire c & f agents or transport cements to own or government
warehouses either via roadway or railways. xxIn case of exports, cement reaches the nearest port
via roadways or railways and is then transferred to the importing country. Domestically, from c&
f agents or warehouses the cement is transported to the dealers/distributors and in turn to sub
dealers who finally sell it to the end users. There may or may not be physical ownership of
goods. In the second case, dealers and sub dealers take order from buyers and place it to the
companies, coordinate and monitor the timely dispatch of said orders, transportation of good
sand final delivery. Distributor network in cement industry is highly dominating and companies
are compelled to hire as they do not really have that rapport and touch with the end consumer of
their product. Apart, from this, the distributors have storage facilities as well which help control
well in the entire supply chain as they are the ones who bring orders and therefore are directly
responsible for the business that a manufacturer would do They ultimately grind clinker and
manufacture cement for sale in market.
Planning:-
Before PMLC start the function, they should know what type of cement and quantity is to be
dispatched to the customers in various markets or to our go downs located in our marketing area.
This target and grade wise dispatch of cement and clinker are fixed in the beginning of the month
and then they review it on daily basis with the Marketing Department to arrange dispatches. Such
targets are fixed by department heads level i.e. COO (Cement). President (Com) and President
(Mktg) with consultation as per availability of cement stock and production plan during the
month. In case of constraints, they review the targets from time quantity of cement / clinker is to
be dispatched by rail and by road. The ratio between rail and road dispatches is also reviewed on
daily basis depending upon the to time and the targets are reduced or increased accordingly. In
this planning, they also plan that what availability of rail transport and road transport facilities.
Considering the targets, Marketing Deptt provides a plan of rakes to be loaded from our different
sidings and road dispatches to the various go downs and to the direct customers. This plan is also
reviewed with the Marketing from time to time depending upon the variation in Marketing
conditions and transport condition.

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Mode of Transportation:-
Road Transport:-
Road Transport means the product is dispatched by trucks, trailers and tankers / bulkers to the
customers or final destinations. The arrangement of these trucks, trailers and tankers/ bulkers are
provided by our authorized transporters. The loading and dispatch of product in the trucks is
arranged as given below. When truck arrives at plant for loading the product, the truck driver
carries a Transporters Bilty, which indicates the final destination, quantity to be loaded and sale/
customer order and the bilty is produced to the Dispatch Department. The Dispatch Assistant
checks the authentication of the bilty, i.e. whether the bilty issued is signed by the authorized
person, type of vehicle and quantity balance in order before allowing the truck/ trailer/ tanker/
bulker for loading. Once the Dispatch Assistant satisfies with the bilty, he issues Loading Memo/
Loading Instruction Slip and allow for loading the product. Then the vehicle comes to the
Packing Plant via weighbridge, where we record tare weight of the vehicle. Tare weight is the
weight of the empty truck weighbridge provides a secret number on the Loading Instruction in
which the weigh bridge operator captures the data in to the system. Then the truck comes to
Packing Plant, where Tally checker receives the truck and instructs the truck driver to be in
queue according to the type of product to be loaded in the truck. After loading the product, in
case of packed cement the Tally cheker counts the no. of bags loaded in the truck and in case of
bulk cement loading. Tally cheker ensures the sealing arrangement of all manholes or outlets, so
the product does not leak from any of the manholes or outlets to avoid theft or adulteration in
product through manholes. In case of clinker, after loading, we ensure that the clinker truck is
covered with good tarpaul into avoid damage due to moisture/ rain and spillage of clinker from
body. Then he certifies the loading on loading instruction Slip and allows the truck to go
weighbridge and net weight, where the weight bridge operator records the gross weight and net
weight on the basis of the secret number provided by the first weighbridge operator at the time of
taking tare weight. After ensuring the correctness of the product loaded as per the weighment
check, he allows the truck to approach to security for their checking and once the security
personnel certifies that the loading is as per the loading instruction slip, he allows truck to
approach Dispatch Deptt for obtaining Excise Gate pass cum Delivery Challan by submitting the
Loading instruction slip and bilty certified by the Tally checker, Weighbridge and Security
Guard.
authorizedriver to move on route up to final destination. After delivering the material to the
customer or at go down, truck driver brings the receipted copy of the product and submit the
same to transporter for collecting freight and subsequently the transport, at the interval of 10
days, submit these receipts along with bill to Accounts Deptt. for collecting the payment. In this
procedure, in case if the material is not received as per the Delivery Challan, the GDR (Godown
Discrepancy Report) is endorsed on the receipted copy and the deduction of the value of product
is made by the transporter from truck driver and finally company deduct amount from
transporters bill, which is known as the cost of damage.
The reasons for such deduction are on account of :-
(a) Short Receipt of Material in term of Quantity/ Bags and
(b) Damage in term of Packing or Quality.

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Rail Transport
To commence the dispatches by Rail transport, we need railway wagons. For that purpose, we
have different sidings, which are given below:
a) Bela Railway Siding
b) Turki (6 Km) &Satna (52 Km) Railway Siding: These sidings are outside the rewa plant
and 6 km and 52 km away, where we have to take product for rail loading by road
transport
The use of both the sidings is not only for cement / clinker dispatches, but we use these sidings
for receipt of raw material such as coal and gypsum. To dispatch from the above sidings, we
have to request Railways for providing the wagons for loading cement/ clinker. This request is
known as indent of wagons to Railways and for that purpose we fill our requirement in a
Railway Register giving following details.
(i) No. of wagons required
(ii) Type and no. of wagons
(iii) Destination
(iv) Consignee details
In case of cement, Railway provides us 40 Covered wagons and in case of clinker, Railway
provides us 58 Open wagons, which is known as 1 rake and the average quantity to be loaded in
these rakes are as under :-
(a) Cement - a rake of 40 wagons- 2500 MT approx.
(b) Clinker- a rake of 58 box wagons - 3500 MT approx.
The capacity of each wagon, in case of cement varies from 62 MT to 65 MT and in case of
clinker the capacity is about 60 MT. Railways provide us wagons as per the availability of
wagons and once the rake is loaded in the siding, we submit a memo to Railways certifying that
the loading of rake is completed, because Railways give a specific time for rake loading and in
case rake is not loaded in time, demurrage is charged on hourly basis for the extra time utilized
for loading. The loading time provided by the Railways in our different sidings is as below.
Siding Cement Loading Clinker Loading Remark
Turki&Satna Siding 9 hours 9 hours Manual Loading
Bela Siding 7 hours 5 hours Mechanical Loading
The demurrage is charged on the capacity of the rake if the loading is going on after specific
hours and the rate of demurrage is Rs. 7.50 per hour per wagon. However, on a monthly basis,
we request Railways to waive off the demurrage by giving the proper reasons on what account
the demurrage accrued like shortage of labour, break down in the plant, road transport strike etc.
and Railways consider and waiver of the demurrage accordingly. This procedure is knownas
Demurrage Waiver Application/ Appeal from Railways. The appeal is made to the following
officers in Railways through concerned in charge Goods Clerk.

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(A) Assistant Commercial Manager
(B) Dy General Manager
(C) Sr. Divisional Commercial Manager
(D) Divisional Railway Manager
(E) Chief Commercial Manager
(F) General Manager
They have specific power to consider the demurrage. Normally the demurrage is waived off upto
40%. The demurrage waiver is done in three stages, for example case file to ACM will befinally
disposed of by Sr DCM after passing through DCM, sometimes one or more wagons. Insuch
cases we lodge a complaint to the Railways and normally Railways arrange to trace thewagons
and deliver the same in a very short time to the destination and in case if they fail todeliver the
wagon, the value of product loaded into wagon is paid by Railways to the Siding owner, i.e.
company after loading and settlement of the Railway claim. Here, it is very important to note that
Railway deputes commercial staff round the clock our siding for collecting freight, charging
demurrage and freight. Also they verify the loading of wagons and keep the record for Railways.
They are known as Goods Clerk. The salary of these staff posted at Siding by Railways, are paid
by the siding owner, i.e. company.

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CONCLUSION:-
Jaypee Cement (PPC) helps to produce better concrete & compressive strength keeps on
growing with time. Jaypee Cement (PPC) promotes workability in fresh concrete even with less
water and hence yields high strength concrete of low permeability, less bleeding, better pump-
ability and superior finish. Hardened concrete made with Jaypee Cement (PPC) benefits from
long term gain in compressive strength and related properties like low creep & shrinkage etc.
Furthermore, the concrete is very durable and effectively resists aggressive attack of sulphate and
chloride ions. It is also resistant to Alkali aggregate reaction. The concrete is not subjected to
attack by acid rain due to presence of green house gases (GHGs) in higher concentrations in
atmosphere.

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Bibliography:-
http://www.jalindia.com/profile.htm
http://www.jalindia.com/cementbrands.htm
http://www.jalindia.com
http://www.slideshare.net/lordriby/jaypee-supply-chain-management