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Assignment in Strategic Management (Topic :Value Chain Analysis of Your Company (ACC Limited, India
EXECUTIVE SUMMARY ACC Limited (ACC) previously known as Associated Cement Companies Limited is an Old buzzword in Indian CEMENT market. With Strategic Alliance with worlds largest cement manufacturer, HOLCIM a Swiss base company acquires a strong hold on its quality and knowhow that is not second to any other cement manufacturing company. ACC is surging towards more and more innovations to offer nothing but the very best and the latest CEMENT manufacturing technology to esteemed customers. Thus, ACC is able to monitor the quality from the very beginning till the final product. The manufacturing process at ACC is of paramount importance. The process uses state-ofart production technology of the production management. The company is actively involved in environment protection and product design to assure consistent quality and optimize the cost for its customers. This assignment is a study of value chain analysis of ACC and to find how ACC is creating value for its customers. The objectives of this study is to analyze the value chain system in ACC. STRUCTURE OF THE INDIAN CEMENT INDUSTRY Major Players : With an installed capacity of around 258 million tonnes per annum (mtpa) at end-March 2011, large cement plants account for 95% of the total installed capacity of 270 mtpa in India. The installed capacity is distributed across approximately 155 large cement plants owned by around 50 companies. The structure of the industry is fragmented, although, the concentration at the top is increasing. The fragmented structure is a result of the low entry barriers in the post decontrol period and the ready availability of technology. However, cement plants are capital intensive and require a capital investment of over Rs. 5,000-5,500 per tonne (t) of cement, which translates into an investment of Rs. 5 billion for a 1 mtpa greenfield plant.

Major Players in Indian Cement Industry 2008 Installed Production

2009 Installed Production

2010 Installed Production

ACC Ultratech Ambuja Cements Grasim Jaypee Group India Cements J K Cements Century Textiles Shree Cement Birla Corp Madras Cements Others Total

Capacity 22,629 18,200 22,000 16,750 7,000 8,810 4,400 7,800 6,825 5,780 7,990 47,470 175,654

20,836 15,069 17,757 15,363 6,776 9,234 3,997 6,898 6,337 5,277 5,845 54,191 167,580

Capacity 26,169 21,900 22,000 19,650 14,700 12,950 4,871 7,800 9,000 5,780 9,990 50,534 205,344

21,369 15,864 18,828 16,318 7,634 9,111 4,048 7,215 7,765 5,288 6,526 61,434 181,400

Capacity 27,083 23,100 25,000 22,550 19,100 14,050 7,871 7,800 10,200 6,071 10,490 61,948 235,263

21,375 17,639 20,128 9,537 10,516 10,493 4,586 7,583 9,371 5,698 8,026 75,699 200,651

Significant Consolidations : The cement industry has witnessed a number of Mergers & Acquisitions (M&As). The extent of concentration in the industry has increased over the years. This concentration is mainly because of the focus of the larger and the more efficient units to consolidate their operations by restructuring their business and taking over relatively weaker units. The relatively smaller and weaker units have found it difficult to withstand the cyclical pressure of the cement industry. Some of the key benefits accruing to the acquiring companies from these acquisition deals include: a. Economies of scale resulting from the larger size of operations b. Savings in the time and cost required to set up a new unit c. Access to new markets d. Access to special facilities/features of the acquired company e. Benefits of tax shelter The relative market share of large players in the cement industry has changed significantly over the years. Consolidation of capacities has seen UltraTech, Grasim, India Cement and Gujarat Ambuja (renamed as Ambuja Cements) emerge as the leading players apart from ACC, which has been the market leader during the last several years. All the players have resorted to a combination of capacity expansions as well as takeover of existing capacities for growth. Importance to Economy : The cement industry accounts for approximately 1.7% of gross domestic product (GDP) and employs over 0.14 million people. It is a significant contributor to the revenue collected by both the central and state governments through excise and sales taxes. For example, central excise collections from cement industry aggregated Rs. 51.8 billion in FY2010 and accounted for 4.4% of total excise revenue collected by the government. Cement has consistently figured among the top 5-7 commodities. It is a heavily taxed commodity and the duties amount to around 30% of the selling price of cement. Process Technology: While adding fresh capacities, the cement manufacturers are very conscious of the technology used. In cement production, raw materials preparation involves primary and secondary crushing of the quarried material, drying the material (for use in the dry process) or undertaking a further raw grinding through either wet or dry processes, and blending the materials. Cement is generally produced from a feedstock of limestone, clay and sand; which provides the four key ingredients requiredlime, silica, alumina, and iron. Mixing these ingredients and exposing them to intense heat causes chemical reactions that convert the partially molten raw materials into pellets called `clinker. After adding gypsum, the mixture is ground to a fine grey powder called `Portland Cement, a key ingredient of concrete. Portland cement is artificial cement in that its manufacture involves the mixing of raw materials, which allow for uniform composition of the raw material feed to the kiln and which, in turn, allows for uniform properties of the finished cement, regardless of where it has been made. The production of cement clinker from limestone and chalk is the main energy consuming process in the industry, accounting for about 80% of the energy used in cement production. Clinker is produced by burning a mixture of materials, mainly limestone, silicon oxides, aluminum, and iron oxides. There

are two basic types of cement clinker production processes and a number of different kiln types. Clinker production is either `wet or `dry, depending on the water content of the raw material feedstock. Other configurations and mixed forms (semi-wet, semi-dry) exist for both types. The choice among different processes is dictated by the characteristics and availability of raw materials. For example, a wet process may be necessary for raw materials with high moisture content (greater than 15%) or for certain chalks and alloys that can best be processed as a slurry. In the wet process, the crushed and proportioned materials are ground with water, mixed, and fed into the kiln in the form of slurry. The process allows for easier control of the chemistry and is better when moist raw feed stocks are available. However, it has higher energy requirements due to the need to evaporate the 30%+ slurry water before heating the raw materials to the necessary temperature for calcinations, and the generally much larger size of the wet kilns. In the dry process, the raw materials are ground, mixed, and fed into the kiln in their dry state. The dry process avoids the need for water evaporation and is thus much less energy intensive than the wet process. In general, the dry process is much more energy efficient than the wet process, and the semi-wet somewhat more energy efficient than the semi-dry process. The predominant production process for portland cement clinker is the relatively energy efficient dry process. It is gradually replacing the less efficient wet process. The energy efficiency of rotary kilns can be increased significantly by increasing the number of pre-heaters: an increase from 4 to 6 cyclone pre-heaters results in a fuel reduction of about 10%. Efficient dry kilns using pre-heaters use approximately 2.9-3.0 gigajoules (GJ)/t clinker, compared with 5.9-6.8 GJ/t for a wet kiln, and 2.9 GJ/t for a dry kiln with pre-heaters and pre-calciners. The semi-dry process has never played an important role in Indian cement production and accounts for less than 0.2% of total production. Company Profile: ACC Limited Established in 1936, ACC Limited is Indias foremost manufacturer of cement and ready mix concrete with a countrywide network of factories and marketing offices. ACC has been a pioneer and trendsetter in cement and concrete technology. ACCs brand name is synonymous with cement and enjoys a high level of equity in the Indian market. Among the first companies in India to include commitment to environment protection as a corporate objective, ACC has won several prizes and accolades for environment friendly measures taken at its plants and mines. The company has also been felicitated for its acts of good corporate citizenship. ACC Limited is Indias foremost manufacturer of cement and concrete. ACCs operations are spread throughout the country with 14 modern cement factories, 19 Ready Mix Concrete plants, 19 sales offices, and several zonal offices. It has a workforce of about 9,000 persons and a countrywide distribution network of over 9,000 dealers. ACCs research and development facility has a unique track record of innovative research, product development, and specialized consultancy services. Since its inception in 1936, the company has been a trendsetter and important benchmark for the cement industry in respect of its production, marketing, and personnel management processes. Its commitment to environment-friendliness, its high ethical standards in business dealings, and its on-going efforts in community welfare programmes have won it acclaim as a responsible corporate citizen. ACC has made significant contributions to the nation building process by way of quality products, services, and sharing its expertise. PRODUCT PROFILE:

In its product portfolio, ACC offers both products (goods) and services. The product category chiefly comprises of cement and concrete categories while service category encompasses consultancy and allied services. I.PRODUCTS: 1. Cement: ACC manufactures the following types of cement: (a)Ordinary Portland Cements (OPC): (i) 43 Grade Cement (ACC Cement): The most commonly used cement in all constructions including plain and reinforced cement concrete, brick and stone masonry, floors and plastering. It is also used in the finishing of all types of buildings, bridges, culverts, roads, water retaining structures, etc. What is more, it surpasses BIS Specifications (IS 8112-1989 for 43 grade OPC) on compressive strength levels.ACC Cement is marketed in specially designed 50-kg bags with golden yellow bands along the sides. ii)53 Grade Cement (ACC Samrat): It is produced from high quality clinker ground with high purity gypsum. ACC 53 Grade OPC provides high strength and durability to structures because of its optimum particle size distribution, superior crystalline structure and balanced phase composition. This too surpasses the requirements of IS: 12269-53 Grade. It is available in specially designed 50-kg bags with oxford-blue bands along the sides. (b)Blended Cements: i) Fly-ash based Portland Pozzolana Cement (PPC ACC Suraksha): This is a special blended cement, produced by inter-grinding higher strength OPC clinker with high quality processed fly-ash based on norms set by the company's R&D division that imparts a greater degree of fineness to fly-ash based PPC cement, improved workability properties while mixing, and makes concrete more corrosion resistant and impermeable. All of this makes the better long-term strength and improved corrosion resistance and therefore, greater life for constructions. ACC fly ash based PPC is eco-friendly cement. This unique, value-added product has hydraulic binding properties not found in ordinary cements.It is available in specially designed 50-kg bags with parrot-green bands along the sides. ii)Portland Slag Cement (PSC ACC Super): This is slag-based blended cement that imparts strength and durability to all structures. It is the result of blending and inter-grinding OPC clinker and granulated slag in suitable proportions as per the norms of consistent quality. PSC has many superior performance characteristics, which give it certain extra advantages when compared to OPC. It is available in specially designed 50-kg bags with chrome-orange bands along the sides. (c)Bulk Cement: Yet another first in six-decade history of ACC cement in India has been the introduction of Bulk Cement, an alternative to bagged cement, which is of particular advantage to large consumers of cement. Internationally, the trend is to move cement more and more in loose form rather than bagged. In fact, over 90 per cent cement in the USA, and other European countries is transported and sold in bulk, unlike in India, where only one percent is transported in bulk. i)ACC Bulk: ACC in a joint venture with the government of India has set up the most sophisticated bulkunloading terminal at Kalamboli, Navi Mumbai, to bring its cement from the ACC plant at Wadi in

Karnataka. The terminal at Kalamboli has three 5000-tonne-capacity silos to store the cement, which is transported in specially designed railway wagons. The company has its own fleet of 15-tonne roadbulkers in which cement is then brought to the end-user's construction site. The terminal has three modes of evacuation: bulk tanker trucks, jumbo bags (1 and 1.5 tones), and 50-kg bags. The mechanization in the loading/unloading of cement reduces manual intervention to the barest minimum. At the site, the cement is pumped into portable 15-tonne steel silos (supplied by ACC). Not only do these silos require less storage space than conventional bag storage Godowns, but also the silos are designed to facilitate free-flow discharge of the cement. This further underscores another of ACC Bulks characteristic untouched by hand. And dust collecting silos safeguard against dust pollution. ii) Oil Well Cement (OWC): OWC is used for cementing gas and oil wells at high temperatures and pressures. This cement has Class G recognition from the American Petroleum Institute. It helps: Support the axial load of the casing string and strings to be run later. Seal intended production or injection intervals from overlying or underlying permeable sections (zone isolation). Protect the casing from damage or failure. Support borehole through the production interval. (iii)Low Alkali Cement: Low Alkali cement is used to prevent alkali-silica reaction and consequent deterioration of concrete. This cement produces a safe concrete when the aggregates contain reactive silica. The standards prescribe a limit of 0.6 % of total alkalis for this purpose. ACC produces low alkali cement with an alkali content that is very much lower than 0.6 %. The cement conforms to BIS and ASTM specifications. The compressive strength of this cement surpasses 43 grade levels 2.Concrete: a) Ready Mixed Concrete (RMX): Ready Mixed Concrete, or RMX as it is popularly called, refers to concrete that is specifically manufactured for delivery to the customer's construction site in a freshly mixed and plastic or unhardened state. Concrete itself is a mixture of Portland Cement, water, and aggregates comprising sand and gravel or crushed stone. In traditional work sites, each of these materials is procured separately and mixed in specified proportions at site to make concrete (see Figure-4.2). Ready Mixed Concrete is bought and sold by volume usually expressed in cubic meters. RMX can be custommade to suit different applications. It is manufactured under computer-controlled operations and transported and placed at site using sophisticated equipment and methods. ACC's pioneering efforts in introducing RMX coupled with the promotion of bulk cement handling facilities have been responsible for redefining the pace and quality of construction activity in metropolitan cities and in mega infrastructure projects. Numerous landmark structures in India's metro cities have been built using ACC RMX mega housing projects & town ships. Small building projects and individual home builders seeking high levels of quality assurance can also now usher in the same sophistication and value addition into their construction as some of India's mega projects using ACC RMX at virtually no extra cost. II.SERVICES:

ACC basically offers twin services of consulting firms on major engineering projects and offering customer services including educating them on usage of cement and concrete and correct construction practices. 1.Consultancy Services: (a)Project Engineering: ACC is the pioneer of the Indian cement industry with over 70 years of rich experience in prospecting for raw materials, setting up and managing cement plants of different sizes, technologies and processes. This experience is shared by a team of talented scientists, engineers, and technocrats in meeting the needs of the cement industry in India and in many other countries. ACCs Consultancy Services one could have all the services under one roof as: Geological prospecting of cement raw materials. Raw material evaluations and optimization. Feasibility Studies. Engineering Consultancy Services for green field/brown field cement plants. Up gradation and capacity enhancement of existing cement plants. Management and operation of cement plants. Technical training and skills development. Major Achievements: ACCs project engineering consultancy team has successfully handled a diverse range of assignments in different parts of the world from geological prospecting to management and operation of plants as well as modernizing and upgrading old cement plants, and providing technical training. It is fully equipped to serve the needs of the global cement industry. ACCs project engineering consultancy and project management expertise has been tested against the best in the world. Some Significant Projects: i)Saudi Arabia: Operation and management of a cement plant of capacity 4 million TPA (tonnes per annum) owned by Yanbu Cement Company, Saudi Arabia (YCC). This contract was first awarded to ACC in 1979 amid stiff international competition. Since then, annual cement production at the plant has always exceeded guaranteed targets. Project management services to YCC in implementing their new cement manufacturing line of capacity 7000 TPD (tones per day). ii)Nigeria: Comprehensive engineering consultancy services to Dangote Industries Ltd., Nigeria for their new green field cement plants of capacity 3 x 7000 TPD (tones per annum). iii)Sudan: Plant health assessment, de-bottlenecking, operation and management guidance to Atbara Cement Plant, Sudan owned by Sudanese African Company, Saudi Arabia. iv)United Arab Emirates (UAE): Engineering consultancy services to Blue Circle, UK for the 1 million TPA (tones per annum) at Sharjah Cement Plant, Sharjah. 2.Customer Services: ACCs Regional Offices have Customer Service Cells manned by qualified civil engineers. These engineers interact with consumers and customers to assess their requirements and complaints and provide pre-sales, after-sales services and techno-promotion services including educating them on

usage of cement and concrete and correct construction practices. They also provide expert advice on getting the best value from cement and offer assistance on related issues in civil construction projects. Some specific customer-focused initiatives include the following: ACC Help Centers at several locations to help individual homebuilders. Mobile touring vans to visit construction sites to educate users and masons at site and provide certain specialized services like supervision during slab casting on demand. Ask ACC (www.askacc.com) a Website for home-builders and small customers. Customer-friendly booklets on all aspects of construction and home-building. Films and educational literature designed for masons and students. Besides this, technical books/booklets on cement, concrete, and building construction and maintenance are regularly made available for the benefit of customers. PRODUCTS: QUALITY Product Development has always been an important activity at ACC, arising out of a focus on quality and process improvement. It has been a constant partner, driving research, innovation and evaluation. In 1964, a centralized research facility - the Central Research Station (CRS) was established in Thane. The research complex now renamed as ACC Thane Complex, spread over an area of 8000 sq m has modern labs with the latest equipment and manned by highly qualified scientists and technologists who carry out product development work in cement and allied fields

Mission statement of ACC Our core processes exhibit vitality, teamwork and innovativeness which will help the entire organization to move together and seize various growth opportunities that come our way.

SWOT analysis ACC Ltd. Strength Lower energy cost due to imported calorific value coal and use of non conventional fuels. Lower transportation cost due to increased transport through sea router fro bulk shipping. Very high Brand identity. Excellent innovation engineering and technological skill useful for operating excellence.

 Very less department on government for coal and power. Having major share of Holcim so can take advantage of being MNC. Excellent management team to cope with changing environment. The supply chain management system in the ACC is quite focused and good. The all india presence of ACC makes it easy for the company have better customer services. Weakness: Very limited fragmentation of plant, which avoid its presence in very sub regional market. Opportunity : Higher agriculture production may result into higher purchasing power, which will increase demand. Stability of govermnet may result into higher FDI inflow which will give rise to MNCs entry in India, which would require operations in India. Thus large infrastructure projects and related requirements of housing and accommodation will boost cement sales. New product usage of RMC(ready mix concrete would be the demand.

Threat Threates from the economic cycle i.e. recession or growth Change in government policies in term of coal,diesel,raw material and transport. Exchange rate fluctuation having direct effect on bottom line as wellas on export. Capacity expansion by the competition which will lead to the surplus of the cement.

5 Force Model of ACC:

THREAT OF NEW ENTRANTS * Economies of scale * High Capital requirement * Avg gestation period of 2-3 yrs * Access 2 distribution channels * Oversupplied market BARGAINING POWER OF SUPPLIERS * Large and few sellers * Monopolistic control of external cost element * No substitutes * Sellers product is important input

BARGAINING POWER OF BUYERS * Standard product * Rising share of retail purchase and declining share of bulk purchasers * No substitute

THREAT OF COMPETITORS * Large no. of competitors * Marginal product differentiation * High fixed costs * Lack of switching cost * High exit barriers

THREAT OF SUBSTITUTES * Bitumen (construction of roads) * Engineering plastics (construction of buildings)

Strategy - value chain analysis of ACC Ltd. Introduction:

Value is defined as any activity that increases the market form or function of the product or service. And in todays business climate, you need to maximize the value of every process in your business. Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings: (1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and (2) Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("out sourced"). Linking Value Chain Analysis to Competitive Advantage What activities a business undertakes is directly linked to achieving competitive advantage. For example, a business which wishes to outperform its competitors through differentiating itself through higher quality will have to perform its value chain activities better than the opposition. By contrast, a strategy based on seeking cost leadership will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used. Primary Activities: Primary value chain activities include: Primary Activity Description Inbound logistics All those activities concerned with receiving and storing externally sourced materials Operations The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products) Outbound All those activities associated with getting finished goods and services to buyers logistics Marketing and Essentially an information activity - informing buyers and consumers about sales products and services (benefits, use, price etc.) Service All those activities associated with maintaining product performance after the product has been sold Support Activities Support activities include: Secondary Activity Description

Procurement

This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Human Resource Those activities concerned with recruiting, developing, motivating and rewarding Management the workforce of a business Technology Activities concerned with managing information processing and the development Development and protection of "knowledge" in a business Infrastructure Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management

The value chain or business system map Firm Infrastructure

Supporting activity Line Operations

Human resource management Technology Development Procurement

Inbound Operation logistic

Outbound logistics

Marketing & sales

Service

These diagram picture all of the firms activities and processes from procurement to after sales services, including also research and development and overhead activities. They are used to enable or encourage a through analysis of how each activity throughout the firm affects costs and differentiation. They may also be used to identify important processes or linkages among activities that span several function or are performed through alliances or by suppliers . which in turn leads to benefit of coordination among firms in a network to lower the overall cost for customers or enhance the noncost elements of value delivered. . Value Chain Analysis is a well known strategic concept which enables you to analyze your competitive position and establish where you are adding value within the business. The whole enterprise is 'broken down' into key 'Support' and 'Primary' activities which are then compared with competitive 'benchmarks' representing best practice. Buyer-driven commodity chains refer to those industries in which large retailers, marketers, and branded manufacturers play the pivotal roles in setting up decentralized production networks in a

variety of exporting countries, typically located in the third world. This pattern of trade-led industrialization has become common in labor-intensive, consumer goods industries such as garments, footwear, toys, housewares, consumer electronics, and a variety of handicrafts. Production is generally carried out by tiered networks of third world contractors that make finished goods for foreign buyers. The specifications are supplied by the large retailers or marketers that order the goods. The concept has been extended beyond individual organizations. It can apply to whole supply chains and distribution networks. The delivery of a mix of products and services to the end customer will mobilize different economic actors, each managing its own value chain. The industry wide synchronized interactions of those local value chains create an extended value chain, sometimes global in extent. Porter terms this larger interconnected system of value chains the "value system." A value system includes the value chains of a firm's supplier (and their suppliers all the way back), the firm itself, the firm distribution channels, the Empty vessel and the firm's buyers (and presumably extended to the buyers of their products, and so on). Capturing the value generated along the chain is the new approach taken by many management strategists. For example, a manufacturer might require its parts suppliers to be located nearby its assembly plant to minimize the cost of transportation. By exploiting the upstream and downstream information flowing along the value chain, the firms may try to bypass the intermediaries creating new business models, or in other ways create improvements in its value system.

Value Chain Analysis or Value Stream Mapping is a useful tool for working out how you can create the greatest possible value for your customers, as well as your best route to profit maximization. In business, were paid to take raw inputs, and to add value to them by turning them into something of worth to other people. This is easy to see in manufacturing, where the manufacturer adds value by taking a raw material of little use to the end-user (for example, wood pulp) and converting it into something that people are prepared to pay money for (e.g. paper). But this idea is just as important in service industries, where people use inputs of time, knowledge, equipment and systems to create services of real value to the person being served - the customer. Furthermore value chain analysis is particularly useful for new producers including poor producers and poor countries who are trying to enter global markets in a manner which would provide for sustainable income growth. Finally value chain analysis is also useful as an analytical tool in understanding the policy environment which provides for the efficient allocation of resources within the domestic economy, notwithstanding its primary use thus far as an analytic tool for understanding the way in which firms and countries participate in the global economy. In most industries, it is rather unusual that a single company performs all activities from product design, production of components, and final assembly to delivery to the final user by itself. Most often, organizations are elements of a value system or supply chain. Hence, value chain analysis should cover the whole value system in which the organization operates. Within the whole value system, there is only a certain value of profit margin available. This is the difference of the final price the customer pays and the sum of all costs incurred with the production and delivery of the product/service (e.g. raw material, energy etc.). It depends on the structure of the value system, how this margin spreads across the suppliers, producers, distributors, customers, and

other elements of the value system. Each member of the system will use its market position and negotiating power to get a higher proportion of this margin. Nevertheless, members of a value system can cooperate to improve their efficiency and to reduce their costs in order to achieve a higher total margin to the benefit of all of them (e.g. by reducing stocks in a Just-In-Time system). A typical value chain analysis can be performed in the following steps: Analysis of own value chain which costs are related to every single activity Analysis of customers value chains how does our product fit into their value chain Identification of potential cost advantages in comparison with competitors Identification of potential value added for the customer how can our product add value to the customers value chain

The below given is the general value chain analysis of all the plants of ACC Ltd. 1. Inbound Logistics: Taking greater control of inbound logistics is becoming a top priority for many manufacturers and retailers. Turning attention to inbound logistics will not only reduce costs, but also a generate more collaborative relationship with internal organizations, suppliers and logistic providers, which will ultimately result in a more effective business process from which all parties will benefit. So the main thing in inbound logistics is how material is get into the factory and how it is managed within the factory. The inbound Logistics comprises of a. Material Handling system In a manufacturing firm, the raw materials are obtained from the suppliers and are stored in the store room. These raw materials are then issued to purchase department and are moved inside the plant from one process to another till they are converted into finished goods. Thus material handling involves movements of materials from one place to another for the purpose of processing. They are moved either manually or mechanically The job tackled by material handling equipment includes lifting, moving, dropping, positioning ,holding, releasing, stacking etc.In general course machines at installed at one place. Men have limited area of movement they can only moved from one section to another thus having limited on their movement. Factors affecting material handling 1. Types of the product 2. plant layout type of production system 3. production planning and control 4. packaging 5. material handling equipment The following Material handling equipments are used in ACC plants. 1. 2. 3. 4. Pipelines : Pneumatic conveyors Mechanical Conveyors Material shifting Vehicles.

b. Order Processing Systems Order Processing Systems involved the flow of information about the orders from generation to order fulfillment. Orders once received, had to be processed quickly and accurately. ACC have linked all the major offices through a Wide Area Network (WAN). Electronic Data Exchange (EDE) and Material Resources Planning (MRP) systems facilitated timely and accurate processing of orders... c. INVENTORY CONTROL Inventory control is the process of deciding what and how much of various item are to be kept in stock. It always determines the time and quantity of various items to be produced. The basic objective of inventory control is to reduce investment in inventories and ensuring that production process dose no t suffer at the same time. To attain various objectives inventory control must. A. B. C. D. Determine the item to be stocked. Determine when and how much to replenish. Keep suitable records. Weed out obsolete items.

Different companies use various methods of inventories control such as ABC analysis, EOQ, Maximum and minimum level of inventory etc. ACC uses the ABC analysis and XYZ analysis for the inventory control. MANAGEMENT OF INVENTORIES Inventories constitute the most significant part of current asset of a large majority of companies in India. Because of the large size of inventories maintained by firms, a considerable amount of funds is required to be committed to them. It is therefore absolutely imperative to manage inventories efficiently and effectively in order to avoid unnecessary investment. An undertaking neglecting the management of inventories will be jeopardizing its long run profitability and may fail ultimately. The reduction in excessive inventories carries a favorable impact on a companys profitability. In ACC, inventories are stock of the product, the company is manufacturing for sale and components that make up the product. The various firms in which inventories exist in the company are: Raw material is those basic inputs that are converted into finished products through the manufacturing process. Raw materials inventories are those units which have been purchased and stored for future productions. Work in progress inventories are semi manufactured products. They represent products that need more work before they become finished product for sale.

 Finished goods inventories are those completely manufactured products which are ready for sale. Stocks of raw materials and work in process facilitate production, while stock of finished goods is required for smooth marketing operation. In the company, an effective inventory management is there which ensure a continuous supply of raw materials to facilitate uninterrupted production, maintain sufficient stocks of raw material in periods of short supply and anticipated price changes, maintain sufficient finished goods inventory for smooth sales operation, and efficient customer service, minimize the carrying cost and time, and control investment in inventories and keep it at an optimum level. 2. Operation: Production is the basic activity of all the industrial units. All other revolve around this activity. We can say that production activity is nothing but the step conversion of one from of material into another either chemically or mechanically. The end product of the production activity is the creation of goods or services for the satisfaction of the final Consumer. The production activity is process by which the goods are produced or utility enhanced. MANUFACTURING PROCESS: The manufacturing process for the cement adopted by ACC. is as follows:(1) MINING: - The limestone is mined from open cast quarry by conventional drilling and blasting method. The blasted material is excavated by hydraulic excavators and loaded into haulage dumpers having carrying capacity of 25/35 Tonns. The material is hauled from quarry to the crushing plant for size reduction. (2) CRUSHING & PREBLENDING: - Limestone as blasted is required to be crushed as it is in form of boulders up to 1.2sq.metre. This is dumped into the dump hopper and pushed into the single rotor impact crusher. The crushed lime stone is conveyed to preblending yard for pregomogenization of raw material. (3) RAW MATERIAL GRINDING: - The raw materials are fed to vertical roller mill.The raw material are grinded from 75mm size to the fineness 85% passing through 90 microns. The grinded raw meal is continuously sampled by pneumatic cylinder type FLS made sampler. The grinded raw meal is tested every hour in XRF lab. This is operated in conjunction with QLX system, software supplied by raw materials proportioning calculations. The adjustment of weigh feeder setting is done by computer on continuous basis, so as to match with present targeted value. (4) BLENDING: - The grinded raw meal is conveyed pneumatically/mechanically To The blending silo. The homogeneous raw meal is extracted from the bottom of silo where it is weighed accurately by weighing system. (5) PYROPROCESSING: - The homogeneous raw meal known as kiln feed is fed to5 Stage preheated- kiln of polysius design known as dopol. It incorporates a stage Known as precalciner, where about 50% of the fuel is fried to achieve 90% Calcinations. The calcined raw meal enters the rotating cylinder known as kiln (Size -4m dia * 60m length), where it slides down to burning zone.

About 50% of the fuel is then fired here to sinter the raw meal into the clinker in burning zone, the thermo chemical reactions take place and all the oxides are converted into the minerals known as tricalcium silicate, dicalcium silicate, Tricalcium aluminates and tetra calcium alumina ferrate. Different type of Refractories is laid to protect the kiln shell.Hot clinker is discharge into the Great cooler where the red hot clinker is cooled from 1300 degree Celsius to less than 100 degree Celsius by air quenching. The hot air from the cooler is drawn back as secondary and tertiary air as Recuperating heat. Induced draft fans draws about 5 lakh M3 per hour air through the kiln and preheated. This hot gases exchange their heat to incoming raw meal in the preheated cyclones. As a result the gases cool down and the material gets heated. The hot gases from preheated exit are used in vertical roller mill for drying the raw material while grinding. The cooled clinker is transported to circular stock pile by Deep bucket conveyor. (6) CEMENT GRINDING AND PACKING: - The clinker extracted from the bottom of storage yard is fed to cement mill supply hopper. Another hopper is used as supply hopper of gypsum. The mixture of clinker and gypsum is fed in to the ball mill, operating in closed circuit with polysius design high efficiency separator. The finished product cement is transported to respective silos by bucket elevator. Cement is transported to packing plant for packing and dispatching. Rotary packing machines are used to pack the cement is dispatched to various destinations by rail and road trasport. (7) PLANT OPERATIONS: - The entire plant is operated from central control room where the process operating personnel closely monitor, the plant operation on visual display units. The computerized process control system with field instrumentation ensures the steady and smooth operations of the plant.

Flow chart of the cement production process Mining

Crushing & pre blending

Row material grinding

Blending & kiln feed

Pre heating & kiln cooling

Cement milling

Cement storage packing & bulk loading The whole process is computerized , where process-operating persons closely monitor the whole plant operation through visual display. Computerized process control system with the field instrumentation ensures the steady and smooth operation of unit. The whole process is displayed on the computer and any change of problem in the process is easily identified so that necessary steps can be taken immediately. Selection of location Factors affecting layout of the company: Location factors are very much important in establishing a cement plant. 1. Input :In terms of input, about 1.5 tons of limestone is required to produce on ton of cement . Hence location of the plant is based on the limestone deposit. The major cash out floe come by way of royalty and cash payments. Indias estimated total reserve of cement grinding stone is about 90 billion tons. 2. Power :It is used in raw material grinding. Clinkerization of limestone is done in the kiln operation and then clinker is grinding with gypsum to form cement. Thes older plants required 120 to 130 unit per ton of cement produced, while modern energy efficient plants consume 80-90 units per ton. Cement manufacturing is continuous process, so quality of power plants is important. 3. Coal:Coal is another major input, which along with electricity forms 40% of total cost is used not only as fuel in the kiln but also to burn the lime stone, on an average 250 kg of coal is required to produce one tone of cement. There is a several coal shortage for the industry. 4. Labour :On growing modernization of plants, the requirement for skilled manpower has increased then that of unskilled manpower. 5. Transportation : It is a very important thing to be kept in mind while deciding the location. It cost widely affects the overall cost, the seacoast is one of the important transportation modes for exporting companies. 3.OUTBOUND LOGISTICS: In recent years companies and academic organizations have focused on outbound operations due to their being the customer-oriented part of the business whereas the control of the inbound operations was generally left to the suppliers. But now outbound operations have become streamlined and extracting additional benefits has become more and more difficult. CONCEPT OF DISTRIBUTION

Distribute means to spread out or discriminate. In the field of marketing channel of distribution indicates routes or wags through which goods and services flow or move from producers to consumers. We can define formally distribution channel is a set of marketing institution participating in the marketing activity involve in the moment of the flow of goods or services from primer producer to the ultimate consumer. CHANNELS OF DISTRIBUTION Channel of distribution is a route or path through which goods transferred from the place of production to the place of consumption. In other words channel of distribution is a pipeline by which customers or users can obtain product which can satisfy their needs. The producer cannot himself go in the market for selling his each unit of production, because he has no such time and again it cost too much to go in the market and sell his product. For this difficulty they take the help of middlemen who supply producers goods to consumers. The middlemen include wholesaler, retailers, dealers, agents, distributors etc. those are middlemen who are well acquainted with the position of the market and hence they can distribute the companies product easily. A distribution channel moves goods from producer to consumer. It overcomes the major time place and possession gaps that separate goods and services from those who would use them. Members of the marketing perform many key functions which are outlined below: Help in production mix. Financing the producers. Promotional activities. Stabilizing the price. Matching demand and supply.

VARIABLES USED IN THE STUDY OF MARKETING CHANNELS AND DISTRIBUTION OF THE COMPANY The company used both direct as well as indirect channels of distribution. Since it is a consumer oriented product. Beside it is used by all types of people including rich, middle and poor. So it is necessary to take into consideration from the opinion of all types of people who are going to use these products. It is a kind of product which is used by all types of people irrespectively. It has high demand because it has been used for the construction of building, bridges, dam etc. so the respondent of this product is almost all types of consumers and most of the sales are done through middlemen like Stockiest, sub-stockiest, retailers etc and so on. Almost all the middlemen are involved in distribution channel either directly or indirectly. It is a product which cannot be sold through direct market. It is being sold through indirect sale only, because the manufacturer has no direct contact with the customers. Therefore it is necessary to obtain information from various middlemen like dealers, sub-stockiest etc. ACC Thus, has following organizational chart

Manufacturer

Stockist/dealer

Sub stockist

Retailer

Consumers

Evaluation of channel distribution After noting carious channel alternatives which alternatives would best satisfy the long term objectives of the firm taking in view the factors which would effect the channel decision for this purpose, which alternative must be related against eaconomi,control and adoptive criteria. 1. Economic criteria :For evaluating the effectiveness of channel of distribution the economic criterias are most important since it forms the affects the profit. That how much it will cost. 2. Control criteria : In evaluating the channel the second main consideration is that of control i.e. how usual the marketer be in a position. Is it controllable how to control them. 3. Adoptive criteria : The next consideration in channel decisions is to see whether the channel would be suitable to adopt the changing conditions in the future. Evolution of physical distribution can be carried out with the help of effectiveness of each step of physical distribution. In ACC Ltd first of all, order processing system is followed, therefore they can deviate their times towards orders of buyers. Secondly, warehouse is available besides the production department which reduce the transportation cost also, the company has inventory control department which determine inventory level. The company uses Road, Rail and Sea way of transportation modes. SALES AND DISTRIBUTION PROCEDURE: The major activity of sales and distribution department is to receive order from sales officer, dispatch cement as per order received through proper transportation mode. Dispatch procedure:Company has adopted following procedure for dispatching of goods for orders received. Receiving of orders:It is the responsibility of marketing officer to collect the orders from the customer. These orders are collected by phone, letters, e-Mail, fax etc.

Processing of orders:Whatever orders are collected is send to the unit through E-mail and Fax total information of the order are stored in the computer. Now this order is send to the booking office and a copy of this is send to transport office. Dispatch programme:When the transporter gets the copy of order, he sends his vehicle with the memo. Memo includes information regarding type, quality, quantity of cement and distance to the place. Dispatch order:When the truck of the transporter comes to the unit, driver has to receive a dispatch order in which all the information about goods is included. Loading process:After receiving dispatch order, driver which reaches the packing house, where firstly the empty truck is weighted and then it is loaded with bags and again it is weighted. Gate pass receiving:After loading bags of cement, truck driver receives gate pass which is signed by authorized securities and then only truck is allowed to go outside the factory. Transportation process:Transportation takes place by three modes which are roadways, Railways, and sea transportation. Constraints in sales & distribution 1. Order fluctuation 2. Non availability of required number of trucks/fluctuation due to Less incoming material Seasonal effects Demand of trucks in nearby areas Freight constraints 3. Movement bottlenecks 4. Abnormal detention at unloading point 5. Multiple deliveries 6. Distance exceeding in two point deliveries 7. Too many diversion cases 8. In accessible destinations having poor road conditions WAREHOUSING FACILITY Every company must store goods properly until they are sold. Warehousing means the functions of the company. Here goods produced are brought and packed accordingly. Then these packed goods are stored in warehouse in such a way that it becomes easy for the company to supply it to their customers as when required. Some companies possess their own warehouse while other may use public warehouse for which they have to pay rent. Warehousing is very important since it preserves the valuable goods of the company from spoiling, the insects, theft etc.The ACC Ltd has got SILOS of sufficient capacity for the storage of cement at the nearest place of production. The cement is stored in dumps when they receive orders immediately they execute cement from dumps.

4.Marketing & sales: Marketing is a comprehensive term and it includes all resources and set of activities necessary to direct and facilitate the flow of goods and services from producer to consumer in the process of distribution. Businessman regards marketing as a management function to plan, promote and deliver products to the clients or customer. Human efforts, financial management constitute the primary resource in marketing. Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange the satisfy individual an organizational objectives. Marketing management usually represent all managerial efforts and functions to operate the marketing concepts not only in letter but also in spirit. Marketing concept demands customer oriented marketing plans, programme and policy so that the marketer can assure perfect positive correlation between the supply and demand. The survival and growth of any business depends upon profitability and when marketing management becomes a good practitioner or marketing concept profitability and growth are duly assured. NEED FOR MARKETING OF CEMENT :Some of the factors like competition create awareness of product to customer, market penetration to achieve goal for selling in particular segment, to establish good image of the brand of product to customer, tec. Are driving force behind marketing task. As additional companies are coming up in the sour then region, and eastern region there is stiff competition among cement producing companies This companies need to adjust themselves to changing situation by upgrading the technology, widening product range, developing new market segments, improving existing channel of distributions etc. Essentials of cement marketing 1. Focus on brand name 2. Effective differentiation 3. Effective public relations 4. Price differentiation 5. Strong distribution network To identify the wants and create customer satisfaction through product innovation, product quality and customer service ACC takes assistance of sales representative. The marketing department of ACC is a comprehensive one which helps ACC to withstand the severe competition persisting in cement industry. Objectives The following are the objectives of marketing department at ACC 1. To find new & new customers to sell them more & more of companies product. 2. Try to convince the customer about better & quality product. 3. To provide a successful distribution of consumer product. 4. To study the market problems according to circumstances & suggest the solutions. 5. To sell their products in new areas to make new customers & satisfy old ones. 6. To encourage the customers & know the fault in their products & then try to make quality or faultless product. Dealers / customers satisfaction:

Due to cut throat competition in market, importance of customer has increased .Now a day sellers are more in numbers while users or consumers are less in numbers. Therefore, it is essential for producer to know the satisfaction level of his product. The promoters & service coupled with delivery schedule, high quality, right price & maintaining customer relation. In ACC, the level of customer satisfaction & as well as dealer satisfaction is very good. It is due to reason that the product is of high quality services, delivery in time. PRODUCT PLANNING The product is the most tangible and important single component of the marketing programme. The product policy and strategy is the corner stone of a marketing mix. Without a product, there is nothing to distribute, nothing to promote and nothing to price. To the marketer, products are the building blocks of a marketing plan. Good products are key to the market success. Product decision is taken first by the marketer and these decisions are central to all the other marketing decision such as price, promotion and distribution. Product is the vehicle by which a company provides consumer satisfaction. It is the engine that pulls the rest of the marketing programme. A product plan is a company plan for marketing its products the company lay down the product objective, develop a product design to achieve the set objectives and have a product programme suitable to the products position in the life cycle. Product plan involves a number of issues to be resolved: Product mix. ACC. is producing mainly Portland Pozzolana Cement (PPC). But as need arises i.e., according to the demand, it also products other brands of cements such as OPC. PORTLAND POZZOLANA CEMENT (PPC):- Pozzolana material like brick powder is added extra in the preparation of it. In this cement, the strength at initial stages up to 28 days is very low but afterwards i.e. near about after 1 year, it will get more strength than OPC. As the initial period is low, it is used only in long course constructions like dams & heavy foundations. Its fineness is 3860 cm/gm. ORDINARY PORTLAND CEMENT: - It is a chemical product obtained by the preliminary mechanical mixture of carbonate of lime with silica and alumina, which after passing through the succeeding stages of manufacture, results in a combination of silicates and aluminates of lime. This material possesses the delicate grey colour of Portland stone, and thus is known as Portland cement. Its fineness is 2958cm/gm There are three types under this category:A. 33 GRADE: - Compressive strength at the end of 28 days is 330 kg/ cm. Now-adays this type is considered to be outdated. It is used for normal construction. B. 43 GRADE: - Compressive strength at the end of 28 days is 430 kg/ cm. usually; this type of cement was in regular use before 5 years. It is also used for ordinary construction. C. 53 GRADE: - Compressive strength at the end of 28 days is 530 kg/ cm. Due to recent research and develops of cement technology; we can achieve maximum strength within definite period. This type is highly demanded in the market, so OPC 53 grade production is in usual course for prestressed concreting works.

MARKET PLANNING

Marketing management is responsible to formulate comprehensive marketing plan indicating objectives to be achieved and future course of action. To accomplish the predetermined targets.The marketing plan is the main operational and controlled document of marketing department. It gives intelligent direction of marketing operations. It can inspire marketing staff to reach the target as per plan. Progress can be measured against set goal. There will be no confusion and misunderstanding between marketing executives. All department plans can be integrated with each other. ACC also does marketing planning. Usually there are long range plans covering 5 to 10 even 15 years. The planning period is of 3 to 5 years. The first two years are covered in details. Also project plan for a period of 1 or 2 years are there which cover specific projects outside the normal marketing field like introduction of a new product, launching of a special campaign.In the company marketing planning is done in order to have bright future. Its planning process usually begins with the review of current market situation through situation analysis. The marketing process adopted by the company is as follows: Marketing opportunity analysis providing analysis and assessment of marketing opportunity Preparation of marketing objectives to match the marketing opportunities in a competitive marketing. Marketing strategy providing marketing segmentation and market share is prepared. Marketing mix involving, price, promotion and distribution strategies.

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

The aim of marketing is to meet and satisfy target customers needs and wants. But knowing customer is very simple. Customers may state their needs and wants but act otherwise. They may not be in touch with their deeper motivation. They may respond to influence that change their mind at the last minute. In earlier times marketer could understand consumers through the daily experience of selling to them. But the growth in the size of the companies and markets has removed many marketing managers from direct contact with customers. Increasing manager has led to relay on consumer research for the answer to the question like: Who constitutes the market?

What does the market buy? Why does the market buy? How does the market buy? Who, when and where does the market buy?

The buyers characteristics and decision process leads to certain purchase decisions. The marketers task is to understand what happens in the buyers consciousness between the arrival of outside stimuli and the other buyers purchase decision ACC understands the importance of consumer behaviour. It always tries to understand the changing needs of consumer. It always manufactures products on the basis of patterns approved by the consumer. PRICING POLICY Price as an important element in the marketing mix. Arrival at the right selling price is essential in a sound market. Right price can be determined through pricing research and by adopting the rest market technique.A price policy is the standing answer of the firm to recurring problem of pricing. It provides guidelines to the marketing manager to evolve appropriate pricing decisions. If competition is mainly on a price basis then each company generally prices its product at the same level as its competitors. During the earlier days cement was under the control of government but now it has been decentralized. Hence the company is free to set its prices it does not mean that consumer exploitation is possible because there is always cut throat competition in this field.Pricing policy formulation is done in this company also. Cost of production, distribution, sales promotion, advertising and market expenses are all considered while framing the pricing policies. The present price of ACC Cement is approx is Rs.200 per 50kg bags. ACC also follows policy of resale price maintenance is that all the retailers are bound to sell their brand of goods at a fixed retail price decided by them. No retailer can exceed the limit fixed by the manufacturer. Also various incentives and discount are provided to the stockiest by ACC in order to increase their sales. Thus ACC follows 2 types of pricing policy. 1. Cost oriented pricing : It is the simplest method for price. It also says as cost plus & target pricing Generally retailers are using this method. ACC keeps the following point in mind while deciding on cost base. In addition to manufacturing cost the added costs are. Sales promotion cost Distribution cost Advertising cost Promotion cost Other marketing expenditure 2. Competition oriented pricing : In this policy price is set in accordance with competition prevailing in the market. This method is applied when there is higher competition.

In cement market the price of the cement charges time by time. As the owner of cement manufacturing units associated themselves in a group there avails high product of price charge, the associated fixed up price as per cost of the product on, transportation cost, excise duty , 10% profit etc. hence it plays a vital role in pricing policy. Now a days, government has no any control over the cement prices as a result of this each organization adopts its own pricing policies. In ACC, pricing decision are taken by consideration on following aspects. a. Cost of product b. Add expenses c. Distribution cost d. Market conditions e. Sales production cost This method is applied where there is high competition in market. Credit facility ACC gives 30 days of credit facility to reputed and regular agency. Discount ACC gives 2% of cash discount if the payment is done within 1 week.

Promotion Mix GACL promotion is combination of two strategies i.e. 1. Sales promotion 2. Advertisement Sales promotion : Definition: To communicate with individuals, groups or organization to directly or indirectly facilitate exchanges by informing and persuading one or more audiences to accept and organizations product. With the intent of open market cement as commodity is now shifting towards being new way to convince the customer to purchase their brand. They are positioning their products stressing on specific attribute which customer consider as important e.g. strength, reliability water requirement etc. and are formulating their promotional strategies accordingly. Objectives to be achieved by the ACC through sales promotion are: 1. to stimulate the buyer for purchasing the product 2. to consider the type of market, competitive condition of market. 3. to give incentive to customers. 4. To enhance the value of the product to the customer. ACC adopts various types of sales promotion tools like discountsmgiftsmand some other incentives and sometimes company send their dealers and distributors on tour. ACC has 3 levels of sales promotion: at a Dealer level at a salesman level at a consumer level 1. At a Dealer level : Company prefers dealer who deals with ACC only. Dealer being the direct link between the customer and company, sales promotion applied on them provides fruit full results.

ACC provides following schemes o Depending upon sales turnover of a particular dealer, certain incentive is provided. o Company arranges film show for dealer & their families. o Foreign tour is also arranged for them. o Picnic is arranged for all dealers of a particular region. o Calendars, diaries etc. are provided to dealers. 2. At sales man level Different attractive incentives are provided by ACC to its salesman for increase in sales volume to their target. The target is fixed for each and every salesman and he is able to achieve it, he will be awarded some gifts or monetary rewards and thus motivated. 3. At a consumer level : ACC explain its consumer about different types of cement. They explain that what are the other cement and what is ACC cement. Consumers are ensured with number of benefits when they use ACC cement and cash discount also in certain situation many times; consumer also gets like diaries, ball pens, calendars etc. ACC occasionally arranges consumer camp so that they can get information about the company & its product. ACC also arranges training camp masons, architecture, builders etc.Thus we can say that sales promotion is not expenditure; it is an investment which provides a lot of rich dividend. Thus it is integral part of manufacture in efforts.
ADVERTISING

The advertiser or sponsor wants to persuade and induce the reader, viewer or listener to take some action. To buy the advertise product so that the advertiser can have profitable sales. Advertising can be defined as mass paid communication of goods, service, or ideas by and identified sponsor. It is paid communication because the advertiser has to pay for the space or time in which this advertisement appears. Advertising appear in the recognized media such as news paper, magazines, videos, television, and cinema films etc. Advertising is non - personal salesmanship performance similar functions like personal salesmanship. It is silent but forceful salesmanship. It is responsible for creating and has made possible tremendous industrialization and economic development in many countries. It is the back bone of modern national and international marketing. Modern advertising informs, guides, educates as well as protect buyers, so that they can buy intelligently and raise their standard of living. In the marketing programme of a business enterprise, advertising is an indispensable tool supplemented by salesmanship and sales promotion. It is t business what steam, electric or nuclear energy to the industry. The wheels of industry and commerce cannot move with desirable speed without the propelling power of advertising. Cement industry has got many competitors. ACC has got a separate advertising department. This department fixes the advertising budget for every year. MARKETING RESEARCH AND DEVELOPMENT

Learning more about consumers and dealers and about marketing mix generally is the heart of marketing research. Marketing research is the systematic and intelligent investigation or study of the Who, What, Where, When, Why and How of actual and potential buyers. It deals with research of customers demand e.g.: behavior and attitude of customers and dealers at the market place analysis of sales data, analysis of market share of a firm, etc. market research is primarily concerned with investigation, analysis and measurement of market demand. Marketing research is directly interested in offering sound alternative solution to all marketing problems relating to exchange of goods and services from producer to consumers. Beginning an end of marketing management is marketing research. In the dynamic economy marketing research acts as the investigative arm of marketing manager. In ACC, following items of study and analysis are included in marketing research: Size of the market. Geographic location of customers. Demographic description of customers.

Market segmentation on the basis of age, sex, income, education, nationality, standard of living etc. Analysis of market demand. Sales analysis by customers, territories, product. Consumer needs wants, habits and behavior. Dealer wants and preferences. Degree of competition and the market trend.

The company has developed a separate department which carries out marketing research and development. It even carries out research at regular intervals with the help of professionals. It conducts personal interviews as a part of survey method. Where has channel of distribution, advertising strategy etc. is research by experimental methods? Improve quality and productivity is the benefit derived from research and development.
INTERNATIONAL MARKETING

In the last decade of 20th century many companies all over the world have started developing global marketing plans. Both time and distance are rapidly shrinking on account of intensive and faster satellite communication, speedy transport and free financial flows. International marketing points out that world market are being driven towards a converging commonality i.e. consumer demand round the world tends to have similar needs, desires and expectations for the same product. The global product will be standardized by ISO, indicating total

quality management and there will be reasonably priced to satisfy substantial market segments covering many countries with common or similar needs and desires. International marketing follows the same basic principles as domestic marketing. Marketing principles are common and are applicable weather a marketer sells in Bombay, Nairobi, New York, Paris or London. In any market we need the blending of four ingredients of marketing mix so that product, price, promotion and distribution. We must have a good product, fair price, effective promotion and proper distribution. ACC also does international marketing of cement. It exports cement to Sri Lanka, South Africa, Mauritius, and Gulf countries.
CONCLUSION EVOLUTION OF CHANNELS

Evolution of marketing channels implies evolution of channel members. The producer must regularly check middlemen performance against such standard as sales quota, average inventory levels, customer delivery time, treatment of damage and test of goods etc. the company should recognize reward to middlemen who are performing properly should be helpful. Here in ACC, sales orders brought by customers through agent and then comparison is made and decision is taken that who is performing well and who is performing poor. Consumer is working intimately and regularly with good manner. FUTURE PLANS 1. Minimizing rejection of product. 2. Maximizing market share 3. Optimizing the use of raw materials 4. Giving maximum satisfaction to the workers as well as customers 5. Increasing export 6. Increasing production capacity. RECOMMENDATION ACC Ltd is profit making company. It works smoothly since its establishment way back in 1936. Here, the company follows all the principles of physical distribution. The company follows other processing system, it has own warehouse beside production department, it has inventory control department as a part of material department etc. therefore; there is no any recommendation in respect of physical distribution of the company. However the company is making profit, recommended to the company for the development of own channel members rather than depending on agents. It gives discount on sales to the channel members. Company has a wide market in all over India. I recommend to the company to develop its own channel members for developing and covering own markets. ACC has always tried to add value at: 1. 2. 3. 4. PRODUCT Technically superior product Promotion Clear & effective promotion & advertising Price Uniform prices & better value Place Streamlined logistics to give fresh & regular supplies

5. After sales services: Service increases the value of the entire product to the final consumer. Especially in cement like product being commodity quality doesnt matter much what matters is product as per specification and after sales services. Competitors too are very sharp in the cement industry the only way to differentiate and set a bench mark is the after sales services ACC provides services to customer in tremendously helpful way it has created different departments for that like CUSTOMER SUPPORT department which has number of civil engineers to provide testing facility and technical support to the customer. Recently in earthquake time these engineers has provided technical guidelines in terms of seminars for topics like consistency and strength in construction and also have provided construction guidelines to people free of charge. Direct customer of sales & distribution is its transporters who are like blood of sales & distribution who keeps the product moving. ACC has made special arrangements for them. It has set up special canteen and seating facility form them ACC has arranged its system such that the drivers dont have to wait more for loading and unloading too at discharge station . It provides entertainment facility to truck driver to enjoy their wait time. This is the only reason why truck drivers are happy to work for ACC at low charges even because they can do more trips in day due to less wait time and ACC payment to them is on time. So we can say ACC has mechanized after sales service the major activities done by ACC as a tool to enhance its after sales services is as follow: Set up complaint redress committee of experts. Seasonal seminars by technical experts Quality exhibitions Construction guidelines by civil engineers. Supporting activity: 1. Environment control ACC is spending millions to install the pollution control equipments, like glass bag house, hot ESP and bag type pulse jet dust collector at various locations. These equipments are properly operated and maintained continuously to keep the emission levels much below the norms, specified by State Pollution control board and central pollution control board. All the efforts are done to make the atmosphere environment friendly; we have planted millions of trees in and around the plant premises to maintain the ecology. Flourishing rose garden set up in the middle of the plant is an evidence of our efforts and awareness of environment management and control. 1. Air pollution To control the air pollution through arising from 1. source emission 2. fugitive emission To measure it gravimetric dust sampler, personal sampler and IMR Gas analyzer is used to control air pollution technique of spreading water, planting and bag filters at various stations in plant and bag filter for inside plant is used. 2. Noise pollution

For measuring the noise level in plant the sound level meter is used. For controlling it Noise barriers For uncontrolled noise personal protecting equipment for every employee working in plant is used 3. Water pollution Sewage water reclamation plant (SWRP) is used and sludge coming out of it is used as manure in plantation. For drinking water cleaning PH, TDS, HEARDNESS, CLORIDE CLORINE etc are checked for safe health of the employee. For controlling ambient quality monitoring of SPM (Suspended particulate Mattel) is done and steps are taken to control the reparable 2. Energy conservation activities a. Renewable Energy: ACC has been pursuing the scope of widening the usage of renewable energy in applications where currently fossil based energy is being used. a) Waste Heat Recovery System: The Company has under implementation, a project at the Gagal plant to produce power through waste heat recovery. This waste heat recovery system is capable of generating ~45 million units of power per year of green energy, thereby reducing ~37,000 tonnes of CO2 per year. b) Wind Energy: Wind power generation during the year under review from the total installed capacity of 19 MW was 38.89 million units. The wind power generated has been used to substitute part of the fossilbased energy usage at Madukkarai, Lakheri, Thane Office and the Bulk Cement Terminalat Kalamboli. c) Rain water harvesting: Rain water harvesting was taken up in barren and vacant land available in limestone mines, factory and colony areas across the Company. d) Solar Energy: Solar energy is generated throughout the year from 27 KW capacity of PV panels installed at ACC Corporate Office, Thane Office and at the Chanda Control room. b. Energy conservation and efficiency measures undertaken in various areas of the cement plants: Conversion of Separator Dust Collector fan in Raw Mill 1 & 2 from HT to LT and installing LT Variable Voltage Variable Frequency Drive (VVVFD) at Gagal plant; Replacement of Waste Gas Fans with High Efficiency Fans for Line K-3 at Wadi plant; Installation of higher capacity Fuller-Kinyon (FK) pump for transferring the dry flyash into the bin of cement mills at Gagal plant; By carrying out optimization of Cement Mill #3 at Bargarh, the output rate was increased from 90 to 107 TPH. Eliminating FK pump and installation of mechanical conveying system for transportation of Pozzolona Portland Cement was also carried out at Bargarh plant; Thermal imaging of kiln and pre heater was carried out to identify major thermal loss areas and subsequent rectification was carried out at Madukkarai plant; Optimization of VRM and ball mill circuit and taking the ball mill dust collector product as final product at Gagal plant;

Computational Fluid Dynamics (CFD) studies were carried out to improve flow distribution and to reduce pressure drop of VRM cyclones at Chaibasa and Bargarh plants and Pre-heater cyclones at Lakheri and Gagal plants; Variable Voltage Variable Frequency Drives (VVVFD) were installed for Raw Mills 4 & 5 drives at Wadi plant; Kiln and Cement Mill drives at Jamul; Positive Displacement (PD) blower at Lakheri; 3 nos. Filter drums & Cake Besta Feeder DC drives were replaced with new generation AC motor and drive, and 4 nos. Vacuum pumps motor RPM were optimized for Filtration Department of Madukkarai plant; Compressed Air pipe lines were modified & interconnected to a common header for cement mill section to reduce the number of operating compressors at Jamul; 3 nos. Air cooled condenser fans and auxilliary cooling tower fan were replaced with FRP fan blade assembly for 15 MW CPP at Madukkarai plant; Boiler Feed Pump for 15 MW CPP was replaced at Tikaria plant; Microprocessor based multi-step capacity controllers were installed at Jamul and Tikaria plants for various reciprocating compressors to optimize the operating pressure within a narrow band; Detailed Energy Audit was conducted at Thondebhavi plant, and detailed compressed air audit was conducted for Jamul plant. Study to measure fan efficiency was conducted at Jamul, Madukkarai, Chaibasa, Wadi and Bargarh plants; Energy Monitoring System was installed at Wadi and Chanda plant; 330 ton Shredding machine was installed for increased use of biomass in Hot Air Generator at Sindri Plant; Capacitor banks have been added to the system across ACC plants to improve plant power factor; Replacement of conventional lamps with Compact Fluorescent Lamps for plant and colony lighting was done across ACC plants.

c.Green power The Wind Farm installed at Rajasthan generated 13.73 million units of green energy during 2011, as compared to 13.69 million units generated during 2010; The Wind Farm installed at Tamil Nadu generated 21.55 million units of green energy during 2011, as compared to 21.96 million units generated during 2010:

The Wind Farm installed at Maharashtra generated 3.61 million units of green energy during 2011. The units of green energy generated since the inception of the windfarm in April 2010 and upto December 2010 was 3.05 million units.

d.Alternative fuels In 2011, the Company co-processed different types of alternative fuels totaling 29860 tonnes. 3. TECHNOLOGY ABSORPTION: Research & Development (R&D) 1. Specific areas in which R&D is carried out by the Company

a) Improving quality of blended cement through innovative processing utilizing industrial by-products for improved quality performance of ACC Plants b) Conservation of resources through maximizing the use of low-grade limestone for cement manufacture c) Development of application oriented cements with decreased CO2 emissions d) Development of new products or discovering new methods of analysis e) Productivity research for increased efficiency in use of resources f) Recycling of wastes and research for efficient use of scarce materials g) Characterization of industrial wastes and looking into possibilities of environment friendly co-processing of wastes in cement manufacture, leading to thermal substitution and conservation of natural resources h) Development and use of cement grinding aid and accelerators for PPC & PSC for improved performance in concrete and reduced clinker factor in blended cements i) Development of cements tailored for specific market clusters and application segments j) Quality Benchmarking exercise for different market clusters of ACC products 2. Benefits derived as a result of above R&D a) Effective use of marginal quality raw materials and fuels with improved clinker quality b) Increased absorption of blending materials like fly ash and slag in blended cements c) Effective replacement of the costlier natural gypsum by a cheaper by-product phospho gypsum without affecting the quality of cement d) Maintain a lead position in all the market clusters of the country e) Launch of special high performance products like F2R, Concrete+, Coastal+ for specific market segments / market climatic conditions f) Effective use of SPC at each stage of cement manufacture for improving consistency of operations and consistency in product quality g) Fuel efficiency 3. Future plan of action a) Exploratory research works on the above specific areas b) Focus on development of products aimed at enhancing use of cement in various applications and development of application oriented cement based cementitious material c) Use of waste / by-products in cement manufacture as alternative materials d) Improve product quality particularly with respect to long term durability and reduction in cost of manufacture 4. Expenditure on R & D ` Lakhs a) Capital . . . . . . . . 72 b) Recurring (Gross) . . . . . . . . 558 c) Total . . . . . . . . 630 d) Total R&D expenditure as percentage of total turnover . . . . 0.07 4.Procurement: The procurement is value addition to purchase it is something more than just purchase which just talk about what ,when and how but procurement should include all the things discussed further in the section. The procurement process in ACC is systematic as it is process industry every stage in the process requires approval from the authority. If material that is to be purchased is less than 200,000 the approval required from Department head if it is greater than 2,00,000 than the purchase order approval required from the Unit Head. The main machinery and import related purchase decision is done from the Head office MUMBAI (Thane) and specially fast moving items are ordered locally from the plant level only To

minimize the time the freedom given to the User himself to place the order to the plant level or branch level based on the emergency of the material. All the fast moving items like lubricant , fuels, welfare items are ordered from site only. The basic raw material & its procurement is done as following 1. Lime stone:-It is one of the key ingredients of cement. As the company is situated at the places which have a very rich resources of limestone. All the requirement of limestone is full filled by mines, which is owned by the company itself. 2. Gypsum:-It is one of the waste products of chemical plants. Gypsum is added to clinker and grinded to form cement, Gypsum is added in cement in order to increase the settlement time of cement. Gypsum is added to clinker in the ratio of 95:5 that is 5% 3. Sand stone/silica:-Silica is added to cement in order to give the strength to the cement. Sand is procured from sources near to plants. 4. Fly ash:-It is the waste product, which arise from the burned coal from the thermal power plants. This is one of the raw materials used to produce cement. It is generally produced from the thermal power plants located near to cement plants. ACC has established its own tcaptive power plant to provide electricity to the factory as well as fly ash to produce PPC. However this amount is not enough for the factory so it has to buy from outside. 5. Coal :-It is generally used in preheater & kiln. It is burned inside the kiln to give high temperature in which the raw material is burned.Coal is generally produced from Africa/ Australia through sea route. The procurement department has work in close coordination with the stores department and all other department which may any time is the user. For user and supplier satisfaction store department maintain GRN (goods receipt Note ) when the user ensure that this is the only material which it has indented the purchaser dont finalize and pay the payment so as to reduce the rejection In ACC, the Quality, right time delivery and required amount of availability of quantity is give more emphasis rather than price. 5.HR support The companys most distinctive attribute, however, is its approach to the business. ACC follows a unique homegrown philosophy of giving people the authority to set their own targets, and the freedom to achieve their goals. This simple vision has created an environment where there are no limits to excellence, no limits to efficiency. And has proved to be a powerful engine of growth for the company. ACC believes that out of 4 ps the most important is the 5th P thats PEOPLE. ACC Considers human resource as the MOST PRIZED ASSET. The biggest strength of the company has been its human resource.The company follows a unique, homegrown philosophy of allowing people to set their own targets and gives them the freedom to achieve. From the beginning the company has followed a progressive policy of taken keen interest in the well being and progress of the people. To enhance their skills and enrich their experience, the company provides continuous training these includes workshops, courses, overseas seminars and visits to cement plants in India and abroad. The company , from time to time engages competent and reputed organizations to equip the people with requisite techniques and exercises for personality development and self actualization Finally , the company endeavors to offer them just and fair compensation. As a step in this direction, the company has granted stock options to its employees and whole time directors during the years.ACC believe this all has nurtured a strong sense of belonging among our people, and is a driving force in he companys growth and performance.

6.Infrastructure: Over 23% of the production cost of cement is power. It quickly became clear to us that if we were to run a profitable company, we need to keep power costs to the minimum. So we focused our efforts on improving efficiency at our kilns to get more output for less power. Next ACC set up captive power plants at a substantially lower cost than the national grid. We sourced a cheaper and higher quality coal from South Africa/Australia and better furnace oil from the Middle East. The result is that today were in a position to sell our excess power to the local state government.

Cost ANALYSIS of ACC From the below listing it is clear that major part of the total cost is Power & Fuels. Again it is under control of the company by the new initiatives on Energy conservation and R&D activities of the company

Financial Highlights of ACC

201 1 INCOME STATEMENT Financial Analysis of ACC Limited Net Sales 201 0 200 9 8,02 7 2,64 4 2,29 4 1,60 7 6,01 6 567 200 8 200 7 200 6 2005 * 200 4-05 200 3-04 200 2-03

9,4 7,7 39 17 Operating EBITDA 1,9 1,8 Net Sales 21 12 Operating and Other Income 1,5 1,4 Profit before Tax Increase in Stock in trade and Work61 in 40 progress Profit after Tax 1,3 1,1 25 20 Consumption of Raw materials BALANCE SHEET Purchase of Traded Cement Net Worth 7,1 6,4 Personnel Expenses 92 69 Power & Fuel Borrowings 511 524

7,28 6,99 3 2011 1 1,89 1,99 9,438.66 9 3 413.54 1,73 1,93 7 0 -94.39 1,21 1,43 3 1,428.009 4,92 4,15 525.69 8 3 2,183.19 482 306

5,80 Net % of 3,221 3,90 3,28 2,86 3 2 0 Sales 2010 4% of Net Sales 1,71 616 715 496 353 100% 7,717.33 100% 7 4% 684 356.93 254 118 5% 1,62 444 0 -1% 544 -56.58 -1% 1,23 378 200 104 2 15% 1,106.58 14% 3,14 2,13 6% 2 0 23%1,07 771 15% 1 3,48 3,122 5% 1 22% 1,08 348 1% 0

In Crores of Rupees

169.78

2%

Outward Freight charges on Cement etc. 1,401.71 Net Fixed Assets Depreciation & Amortisation 6,6 6,6 6,31 5,07 3,96 475.3 43 45 5 3 Other Expenditure 2,125.594 Cash and cash 2,8 2,2 1,87 1,43 1,48 Interest Expenses 96.91 equivalents 32 88 6 8 9 Profit before Tax 1,540.42

1,58 1,31 461.89 5 9 1,598.67 1,40 1,35 1,070.30 3 8 2,87 2,47 392.68 2 1,864.86 2 57 114

117.63

16%

56.78 1,461.45

1,02 6% 4 21% 1,40 14% 5 2,45 5% 6 24% 35

2%

1% 19%

Current Assets Current Liabilities Capital Employed SIGNIFICANT RATIOS Operating EBITDA / Net sales Return on Capital Employed Return on Net Worth Current Ratio Debt Equity Ratio Price Earning Ratio Dividend Yield Ratio Net worth per Share Dividend per Share Basic Earnings per Share CASH FLOWS Operating activities Investing activities

3,6 18 3,6 64 8,2 21 20 % 19 % 18 % 0.9 9 0.0 7 16. 29 2% 385 28 70. 59 1,5 77 264

2,7 53 3,7 46 7,3 55 23 % 25 % 17 % 0.7 3 0.0 8 18. 04 3% 345 30. 5 59. 66 1,9 35 812 621

2,25 6 3,11 4 6,93 2

2,76 0 2,76 6 5,74 6

2,20 3 2,22 1 4,79 1

1,92 1,21 1 1,421 4 1,67 1,33 1,07 2 5 6 4,23 3,50 3,30 4 8 1

1,04 0 941 2,98 2

891 807 2,72 0

33% 49% 27% 0.72 0.09 10.2 3 3% 320 23 85.6 2,39 7 1,50 5

26% 40% 25% 1 0.1 7.39 4% 263 20 64.6 3

29% 42% 35% 0.99 0.07 13.7 4 2% 221 20 76.7 5

30% 41% 39% 1.15 0.25 16.4 4 1% 168 15 66.0 2

19% 19% 34% 1.06 0.5 17.7 4 2% 115 8 30.0 2

18% 18% 24% 1.13 0.89 17.2 5 2% 89 7 21.2 3

15% 12% 15% 1.11 1.02 21.6 2 2% 74 4 11.6 8

12% 9% 10% 1.1 1.37 23.6 2% 60 2.5 6.08

Financial activities 768 * pertains to 9 months period All the figures are in Crores of Rupees

1,70 2,02 1,42 8 3 2 1,17 0 -824 -483 1,07 -455 -297 5 -423

644 -181 -419

598 -519 -87

478 -415 -33

442 -159 -275

ANALYSIS OF COMPANYS VALUE CHAIN MEASURES FOR COST REDUCTION USED AT GACL For Inbound 1. 2. 3. 4. Logistics: Use of imported coal Continue searching for new sources of raw material availability at nearby areas. Basic raw material order placing at center level to take the advantage of Bulk ordering. Mines in nearby areas to reduce the material movement cost.

For production plant:

1. High efficiency fans for all process fans. 2. Mechanical conveying in place of pneumatic conveying 3. Six stage low pressure drop cyclone preheater 4. Captive power generation by sets SEB power cost Rs/-5 per unit while this captive power plant gives 2.25 per unit. 5. Use of agro waste fuels like Ground nut husk (GNH),rice husk, and different types of agro waste, baggage etc. 6. Roller press for cement grinding 7. In house energy audit for effective monitoring of energy consumption. 8. For Outbound logistics: 1. Grouping orders area wise to reduce the transportation cost. 2. Established Regional and central sales office to transfer the orders of nearby area so as to minimize the transportation cost. 3. Using technique of big vehicle to small vehicle to reach at remote area. and reduce wait time of Big heavy vehicle to be used at other places. ANALYSIS OF CUSTOMERS VALUE CHAIN 1. As the cement industry is one of the most energy and power intensive industry so ACC is doing the many activities for energy conservation as discussed above for which it has got awards too which no any competitor is doing. Which adds value to the final consumer? 2. ACC is the pioneer in thinking about Environment protection & has done many activities for Environment prevention it has fitted dusting control bag at every dust producing stage in production plant and has established green plants. 3. ACC has performed its corporate citizenship very well. It has built check dams and temples and many more things for citizens. 4. ACC is providing excellent after sales services to the customer for that it has establish all together different department of civil engineer for guiding customer in construction activity. 5. ACC is concerned for giant strength it assures this things to customers that their decision is worth. ACC always believes in delivering value product to the customer for that it is doing the following things. 1. Focus on brand name : ACC has given more focus on Strength as any cement manufacturing company is supposed to do. ACC is the most common and known company in India. Effective differentiation ACC is crating differentiation by the following ways. ACC is the first in providing engineering services to the customer as after sales services. It is proving many services to the dealer like shocalship & other

2.

supportive programs specially designed for its dealer and treating dealer as the family members. It was the first in proving foreign tours to dealers. Its using best quality lime stone in manufacturing of cement to provide best strength to the customer. It has established totally different unit in the plant for controlling the quality of the produced cement hourly checking is done and then only given for dispatch. It using a best quality bag that is HDPE bags to pack the cement which are reusable. It is the first line name in providing ON TIME delivery to the customer which is very important in cement like product without which entire activity is worth less. It is the pioneer in giving saving concept to the customer. Added value in skilled labour. 3. 4. Effective public relation ACC has maintained good relations with the public for that it has organized many seminars done many things for public welfare as corporate governance. Price differentiation : ACC has always maintained the premium price which is truly convinced to the customer by the activities listed above. It is pricing on the bases of Supply and demand gap. Strong distribution network : ACC has its presents in the entire market in interior level of villages too. In this area too all are direct dealer and reputed personality in town.

5.

T he Value C hain of A C C L im ited

Firm Infrastructure : Captive Power Plants, Export of Power to SEB, High Efficiency Kilns

Support Activities

Human Resource M anagement: : Freedom to achieve, enriching skills & enhancing experiments, Fair compensation, ESOS Technology Development: R & D activities for new products, conservation of resources, recycling of wastes, reduction in emissions & improved performance of concrete

a Procurement: Purchasing Procedures, Centralized procurement for imported items, local purchase of fast moving items, Purchase of Raw Materials
Inbound Logistics: Efficient Material Handling Systems Order Processing Systems Inventory Control Management of Inventories Operations: Manufacturing Processes Mining Crushing R.M . Grinding Blending Pyro processing Grinding and Packing Outbound Logistics: Marketing & Sales:AfterSales Service: i Distribution Channel Customer Customer Support Sales & Distribution n Satisfaction Departments Procedures Market Planning Complaint Evaluation of Consumer Behavior redressal forums Channel Pricing Policy Seminars Distribution Promotion M ix Construction Ware Houses Advertisement guidelines Quality Exhibitions Facility to drivers

r g

Value What buyers are willing to pay

Primary Activities

Conclusion: In ACC, value is being added in all the stages of primary activities and support activities. Comparing with the value chain of competitors, ACC has clearly got an edge over the competitors and hence the customers are willing to pay more for the products of ACC products and ACC holds the leadership position in Indian Cement Companies. The financial highlights of the company exemplify the same.