Logistics and Supply Chain Related To Cement Industry

Prism cement - logistics 2013
Project Report
Logistics and supply chain related to
cement industry
By-
Sauveer singh
MBA, International Transportation & Logistics
Indian Maritime University
Chennai
1|Page
CONTENT
Subject Page No.
Statement of Submission 4
Acknowledgement 5
Chapter-I: Introduction & Overview 7
(i) Background 8
(ii) Selection of Organisation for Internship 8
(iii) Getting to Work 9
(iv) Schedule of training 9
(v) Methodology 10
(vi) Structure of Report 10
Chapter-II PRISM CEMENT LTD
(i) About prism 11
(ii) Prism-vision & mission 12
(iii) Prism cement-Features 14
About prism 15
(iv) Points provided by ICRA 17
2|Page
Chapter- III The Logistics and supply chain related to cement industry
i. Logistics in India 19
ii. Logistics and supply chain related to cement a global perspective 20
iii. Logistics @prism cement limited 27

-inbound logistics 29
-outbound logistics 32
-the party player view 35
iv. Modes of transport 36

-Road transport 36
-Rail transport 44
v. Salient features of logistics observed- 47
Points for value addition- 48
Docs analyzed during the study 49
3|Page
Statement of Submission of Report
A report entitled “logistics and supply chain related to a cement company”

prepared as a part of the 36days of summer internship of the undersigned with
prism cement ltd, satna during the period from June 2012 to August 2012 is
submitted to the Indian Maritime University, Chennai, as a part of 3rd semester
examination. A copy of the report has been submitted to the Logistics and
Operations Department of prism cement ltd.
Signature
Sauveer singh
MBA, ITL
SMM, Indian Maritime university
August 2012
4|Page
ACKNOWLEDGEMENT
I wish to express my sincere gratitude to the Faculty and Management of the School of
Maritime Management, Indian Maritime University, Chennai who not only enhanced my
knowledge in the field of International transportation and Supply Chain Management.
I’m very grateful to prism cement that gave me the chance to learn and provided me with
the best platform I could wish for to hone my skills. Besides, I would like to thank the authorities
of prism cement and the employees of the same, especially the ones at the company’s dispatch
and core logistics department, for providing me with a good environment and facilities to
complete this internship.
I’m thankful to Mr. Debabrat Mohapatra (vice president– Logistics), who always guided
and helped me to remain focused throughout the period of my internship. I’m also thankful to the
various supervisors and managers in the same Department for taking keen interest in guiding and
educating me about the various logistical operations by sparing their precious time in spite of
their work pressure. It was a very friendly and a wonderful gesture on their part which made me
feel very comfortable in asking questions regarding the project and otherwise. In the process, I
learnt many new concepts and gathered Real Time knowledge of the various aspects of cement
related logistics and Transportation.
Most importantly, I would like to thank Mr. PD Mishra (Manager-despatch) and Mr.
Sunit dubey (Manager- Rail logistics) for giving me the opportunity to intern in this esteemed
organization. The supervision and support I received from them is truly inspirational and highly
knowledge oriented and in every sense, it was of immense help during the progression and
smoothness of the internship program.
5|Page
Besides, this internship program has made me realize the true value of working together
as a team in an environment which was absolutely new to me. Every minute was a challenge! It
is rightly said, “A tune of team can lead to the song of success”. Once again, I would like to
express my gratitude by thanking every member of prism cement ltd who supported me directly
or indirectly in the process of completing the summer internship program 2013 at prism cement
Ltd.
6|Page
Chapter I
INTRODUCTION AND OVERVIEW
Background
Indian Maritime University (I.M.U), a central university was established through an Act
of Parliament on 1st April 2008 located at Chennai, Tamil Nadu. It offers two year M.B.A
programme in Port & Shipping Management and International Transportation & Logistics
Management. The duration of the programme is two academic years, consisting of four
semesters with each year divided into two semesters. The first and the third semester starts from
August through January and second and fourth run from February through June.
M.B.A in International Transportation & Logistics is designed to provide the students

with adequate skill and knowledge in functional areas of Transportation and Supply Chain
sector. The course curriculum is designed in such a manner that its students get thorough
understanding of the Supply Chain operations and the Transportation involved to facilitate the
business.
As per the course curriculum, students undergo an internship for a minimum of 45 days
and not exceeding 60 days during their summer vacation of its first year. On completion of the
internship a report is submitted to the university within 15days from the date of commencement
of the third semester. The report is evaluated jointly by the examiners for a maximum of 75
marks with viva voce for 25 marks- totaling to 100 marks. The same is included in the third
semester marks statement. This is the background for which this report has been prepared
as a part of my internship.
7|Page
SELECTION OF ORGANIZATION FOR INTERNSHIP
Keeping in view the objective that I propose to make my career in the Supply Chain
industry, I applied in advance at PCL for my internship during summer vacation. I got a referral
from Mr.Samrendra singh (vice president) for which I’m truly grateful. I appeared for a
discussion related to logistics related to cement industry at the logistics department of PCL
located at satna and got selected for summer internship in the logistics Division of PCL , located
at village-mankahri , p.o.-Bhathia,dist-satna-485111(M.P.) India. On 26th June 2012, on my
joining PCL, I was assigned with Mr.Debabrat mohapatra, (HOD), Logistics Operations
Division, PCL to study the functioning of the company’s logistical operation which is located at
mankahri on the outskirts of satna on the rewa-satna highway.
8|Page
Getting to Work
First few days were orientation and familiarization with the structure of the organization
and specific division of PCL. It was more of an understanding of the culture of the organization
than the actual working per se. Having had a no past work experience, this was the first time I
had an opportunity to work in an organization which is a well structured organization. I got the
first experience of working in an office with certain degree of responsibility to complete my
project with the overall guidance of Mr.Debaprat mohapatra, vice-president, Supply Chain
Operations . I must admit that it was an enriching and a wonderful practical education for me. It
was learning through work.
After the first week of familiarization in PCl, I was assigned to learn under various
division of logistics of the company on a scheduled basis the project value addition to logistics of
pcl. Whatever I learned about PCL and its logistics operation as an intern during 36 days, I
have tried to put it in a report form.
SCHEDULE OF TRAINING-
Date Division IN c/o

26th june to 9th july Despatch(documentation,yard Mr. P.D. Mishra
management,truck
monitoring,packing plant)
9th july to 16th july Rail transportation Mr. Sunit dubey
17th july to 25th july Logistics Mr. Sharma
25th july to 27th july Fly ash (inbound) Mr. Sanjay bhamri
27th july to 1st aug Secondary logistics Mr. Divakar singh chouhan
9|Page
10 | P a g e
Chapter II
About PCL –
11 | P a g e
VISION AND MISSION-
VISION-
“To be acknowledged as a leading player in the industry

with highest level of integrity”.
MISSION-
The main objective of prism cement is to continuously

improve the quality of its product & services in order to meet
customer satisfaction.
12 | P a g e
13 | P a g e
FEATURES -
 The whole administration in prism cement is handled through the SAP module system for
efficient functioning.
14 | P a g e
PRISM CEMENT LIMITED-
Prism Cement Limited, incorporated is 1992, is leading manufacturer of

building materials like cement, readymix concrete, and ceramic tiles in India.
The Cement division has an installed capacity of 5.6 MMTPA at Satna (MP)
(increased recently from 2.0 MMTPA through a brownfield expansion).
Though the installed capacity is 5.6 MMTPA, the Company has a potential to
sell 6 MMTPA of cement and 0.6 MMTPA of clinker from both the Units at
Satna put together. It manufactures Portland Pozzollana Cement (PPC) under
the ‘Champion’ brand and full range of Ordinary Portland Cement (OPC).
Besides, the company has aggressive expansion plans to add another 4.8
MMTPA capacity at an estimated cost of Rs 1,100 crore through the proposed
greenfield plant Kurnool (AP) by mid FY15, taking its total cement capacity to
10.2 MMTPA by FY15.
15 | P a g e
Erstwhile H&R Johnson India Limited (now TBK division), incorporated in 1958, is a
leading player in the domestic wall, floor and vitrified ceramic tiles industry with
an installed capacity of over 42 million square meter per annum (including JVs),
supported by a strong product profile, premium brand image, geographically
widespread manufacturing facilities and extensive distribution network. Erstwhile
RMC Readymix India Private Limited (now RMC division), incorporated in 1996, is
a leading manufacturer of readymixed concrete with an installed capacity of over
6 million cubic meter per annum through 80 batching plants located across the
country.
Fundamental and Valuation Grades
ICRA Online has assigned the Fundamental Grade ‘4’ and the Valuation Grade ‘B’ to
Prism Cement Limited (PCL). The Fundamental Grade “4” assigned to PCL implies that
the company has “Strong fundamentals”. The Valuation Grade ‘B’ assigned to PCL
implies that the company is “Moderately Undervalued” on a relative basis (as on the date
of the grading assigned).
- Fundamental Grading of ‘4’ indicates “ Strong fundamentals”
-Valuation Grading of ‘B’ indicates “Moderately Underalued” on a relative basis
16 | P a g e
POINTS PROVIDED BY ICRA-
Grading Positives
1) Capacity expansion in cement division and wider market coverage to allow strong growth in
the near term
2) Proximity to raw materials such as captive limestone reserves and fly-ash from near by region
3) Greenfield capacity additions at competitive costs may lead to stronger revenue growth and
profitability besides reducing regional sales concentration
4) Amalgamation of Tiles and RMC businesses may provide marketing and distribution
synergies over the longer term.
Grading Sensitivities
1) Slower than expected recovery in cement demand and low utilisation levels to keep pricing
power subdued
2) sharp increase in input material prices – i.e. power, coal, freight costs may impact margins
3) Intense competition and rise in fuel prices may impact the margins of TBK division
4) Large investments in Tiles business and rapid expansion in commerical concrete business may
moderate the profitability indicators.
17 | P a g e
18 | P a g e
Logistics in India-
India spends about 13.0 percent of its total Gross Domestic Product (GDP) on logistics, as per
2005 estimates. The major logistics functions for the Indian industries include Transportation,
Warehousing, Freight Forwarding, and other Value Added Operations including Management of
Information Systems (MIS). Of these functions, transportation and freight forwarding have been
traditionally outsourced to external service providers with relevant expertise and infrastructure.
The warehousing and MIS functions have been mostly managed in-house by industries.
But the huge diversity in geographic conditions, consumer habits, and infrastructure conditions
across the country make it a major challenge for Indian industries to efficiently manage their
supply chain to reach all parts of the country. Additionally, India’s retail network is very vast,
estimated at about 3.3 million outlets in 2005. The highest priority of all industries in India is to
achieve a consistent presence of their products across maximum possible section of this vast
retail network. This could be achieved through a well knit end-to-end logistics process managed
efficiently by a professional logistics service provider.
Nevertheless, the logistics industry, providing services to fulfill these major logistics needs of the
Indian industries is highly fragmented. The transportation service provider segment is completely
dominated by small trucking companies and individual truckers. The freight forwarding service
provider segment is also represented by thousands of small customs brokers and clearing &
forwarding agents. Similarly, there are a huge number of participants in the warehousing service
segment and MIS service segment also. Few service providers have the capability to provide
more than one service and it is very rare that a single service provider has the capability to
provide all the logistics services. Such fragmentation had lead Indian industries to outsource
packets of individual logistics functions to different service providers while retaining the overall
control of logistics in-house, despite incurring heavy administrative and infrastructural costs.
19 | P a g e
Supply Chain Management in the

Cement Industry-global perspective
Supply chain management (SCM) has traditionally played an operational role within cement companies
missing opportunities for cost reduction and value creation.
KEY INSIGHTS-
1. The cement industry; mature companies focusing on economies of scale, operating in an oligopolistic
market, selling a product with high density and low value-to-weight ratio, has neglected supply chain
management to realize cost reductions.
2. Because the cement industry relies on asset utilization, supply chain management provides
opportunity for market differentiation, cost reduction and value generation.
3. Cement companies must transform their supply chains to be responsive in emerging markets.
Introduction
Cement is produced in more than 150 countries all over the world. Cement, as the most important
ingredient of concrete, is essential in the development of infrastructure and construction in general. The
level of advancement in cement and concrete Supply Chain Management (SCM) can facilitate or
constrain world economic development. The purpose of this study was to understand the unique
characteristics of SCM in the cement industry, to clarify the evolution of supply chain management in
the cement industry, to propose the right supply chain for cement, and to demonstrate that supply
chain management can generate value for cement companies.
To research the global cement industry, I have taken a case study as my source which is based on
interviewe of SCM employees from the three largest cement companies and one medium-size cement
company. Figure 1 below shows the three levels of analysis and the frameworks I used. These are
discussed section by section in this article.
20 | P a g e
STRUCTURE OF THE CASE STUDY-
Figure 1 above shows the three levels of analysis and the frameworks used in
the case study. These are discussed section by section in this report.
Cement Industry Analysis -
Figure 2 presents the graphical summary of Porter’s five forces driving cement industrial
competition. Porter (1979) suggests that when the forces are weak collectively, there is a major
opportunity for superior performance. Therefore, we can conclude that the cement industry is
unattractive in mature markets, but attractive in emerging markets.
21 | P a g e
Largest Cement Companies Supply Chain strategy-
In his article, Lapide (2006), Supply Chain (SC) operational objectives can be classified in three
groups: asset utilization, customer response and efficiency. We believe that the cement industry
is concentrated on asset utilization with some level of efficiency. The main reason for this
location is that cement companies are focused in minimizing cost based on the economies of
scale generated by their investment in large manufacturing plants. This is a given condition for
all large cement companies in the industry. Some cement companies are moving towards the
other two operational objectives to gain differentiation in the market. One key success factor is
the required SC transformation to support this decision.
22 | P a g e
Cement Supply Chain Operating Model (Processes Analysis)-
Figure 3 presents the diagram with the summary of the cement SC characteristics according to
the Supply Chain Council’s SCOR model processes; plan, source, make, deliver and return. In
summary, the cement industry planning process is centralized and optimization oriented. There is
no constraint in the availability of cement main raw materials with the exception of some
countries where subsoil ownership regulations applied. Cement manufacturing is capital and
energy intensive where cement truck delivery is restricted due to its low value-to-weight ratio.
Cement Supply Chain Operating Model (Product Analysis)-
Cement can be characterized as bulk and bagged as shown in Figure 4. Bulk cement is dominant
in developed countries and its demand is generated by large construction companies and
government. Bagged cement is dominant in emerging markets and is generated by Do-It-
Yourself customers and small contractors. Relatively speaking, bulk cement is functional while
bagged cement is innovative. Functional products should have an efficient supply chain while
innovative products should have a responsive supply chain.
23 | P a g e
Configure-To-Order (CTO) SC design is more appropriate for an innovative product like bagged
cement. At present, the cement industry supply chain has a BTS (Build-to-Stock) SC design
where purchase orders are delivered from storage, the lead time to consumer is just the
transportation time and the degrees of customer choice are limited. Cement current supply chain
is shown in Figure 5.
Two alternatives were proposed to migrate from BTS to CTO, moving the push-pull boundary
back in the cement supply chain. First, Grind-to-Order where cement is kept in clicker
(intermediate product of the cement manufacturing process) and then grinded as orders appear.
Second, Pack-to-Order, where cement is kept in bulk and then packed as orders appear. Further
research should be made to confirm the feasibility of these alternatives.
24 | P a g e
SC Innovations in the Commodity Industry -
Finally, three case studies were presented to support the idea that SCM can add value to the
corporate strategy of cement and mineral extraction commodity companies. The first case is the
implementation of a single 3PL (Third Party Logistics Provider) by three of the largest oil
companies in Colombia obtaining a 20% cost reduction in freight forwarding services,
transportation and customs clearance services. The second case is a collaboration project
between concrete and cement supply chain in Cemex Colombia resulting in an increase in
concrete mixers availability to 93% and a reduction in maintenance cost by 25%. The third case
is collaborative port operation contract in the steel industry where loading efficiency increased
by 40% reducer maritime freights and waiting time.
25 | P a g e
FACTORS MOSTLY AFFECTING THE COST-
There are mainly three major factors affecting the cost of cement bags-
1) Raw material cost: Prices of key raw materials viz. limestone, gypsum and
fly-ash have been on an increasing trend over the past few quarters. While
prices of limestone have increased due to increase in royalty payments to
Government from Rs. 18/ton to Rs. 63/ton, its impact is limited as most
players have captive limestone reserves. Apart from that prices of fly-ash
have increased as power plants have started charging for fly-ash, which was
till recently available free of cost for cement makers. Our discussion with
cement players suggest that power producers have started charging a
token amount ranging between Rs. 10-70/t on fly-ash procurement from
cement players.
2) Increase in domestic as well as international coal prices: With power &
fuel cost accounting for 22-25% of the total costs, any fluctuation in coal
prices directly impacts profitability of cement players, particularly during
phase of weakening demand. The international coal prices have increased
by as much as ~20% over the past twelve months. Further, the recent
announcements by Coal India to increase coal prices for all non-power
customers by 30% is likely to result in further increase in fuel cost for
cement players.
3) Freight Costs: In addition to raw material and power & fuel costs, freight
cost is also a major cost contributor for cement companies. With increase
in diesel prices, freight rates have also led to increase in costs for cement
companies. The impact of higher freight cost has been more pronounced
considering the fact some companies had to extend their market coverage
beyond their traditional markets to sell surplus cement, leading to further
increase in average lead distance and freight cost.
26 | P a g e
Logistics @ prism cements
27 | P a g e
LOGISTICS @ PRISM CEMENT LIMITED-

The blueprint of logistics at PCL can be governed under following
classifications, and under following different points -
In the view of procurement of input and ouput-

It can be seen as two divisions-
a) Inbound logistics.
b) Outbound logistics.
In the view of party players-

In this case there are three types of players seen ,they are-
a) 1st party logistics (the supplier- pcl)
b) 2nd party logistics (the consumers)
c) 3rd party logistics (the road transport providing companies)
In view of availability of modes of transportation-

There are two modes used for operations-
1) Rail transportation(65%-70%).
2) Road transportation(30%-35%).
28 | P a g e
The logistics in prism is handled under an efficient system and the nodes of the
supply chain are evenly distributed to cater maximum profits.
Inbound logistics-
The inbound logistics of prism cement is concerned with the procurement of
different types of raw material required for the production of cement. The inbound
logistics is maintained through two types of modes of transportation the road and
rail transport. The inbound logistics of prism deals with the following major raw
materials shown in figure below.
Procurement of different raw material (briefing)-

1) Fly ash- This is one of the major requirement of the cement producing
companies for the production of cement due the usage quantity, if a
company wants to produce any amount of loose cement the fly ash
requirement accounts to about 25% of the amount of cement to be produced.
29 | P a g e
The prism cement logistics department to procure this material pays a nice
sum of amount to the 3rd party roadways company for the bulkers and trucks
used in the transportation of fly-ash , as a point to be noted the main thing is
prism logistics follow a notable practice i.e. it sends bulker full of loose
cement to a packing plant located in Allahabad (nearly 180 km) and in return
journey the bulker carries the fly-ash required for the production of cement,
so in this way the logistics cost is cut down using THE BACKHAUL
CONCEPT of logistics.
2) Coal- The 2nd important raw material used in producing cement is the coal
which is brought to the plant by using both modes of transportation i.e. the
road & rail. The coal majorly is brought from the coal mines nearly located
such as in singrauli (nearly 250 km). To see to the logistics cost the major
amount of coal transport is carried out by using rail.
3) Limestone- It is also one of the important raw material required for the
production of cement as a mixture of limestone and silica (sand) is fed up
into the blast furnace for the procurement of cement. Its procurement cost is
very much related to the logistics cost for cement production. Prism cement
adds a advantage to its logistics as they have a system of procurement of
limestone inside the plant premises through its own mines which are directly
connected to the cement plant through conveyor belt which feeds the
limestone to the furnace directly hence major requirement of limestone is
assembled.
4) Gypsum- It is also a raw material needed in cement production. The need of
gypsum is catered through the use of both modes of transport as decided in
the logistics plan prepared by the logistics department.
30 | P a g e
NOTE :- But regarding the raw material like coal and gypsum the companies
logistics has no role to play as they are the out bound commodities of other
company players so those company handle the logistics regarding the
transportation and delivery. The prism cement’s inbound logistics is only
concerned about the logistics and supply chain related to the procurement of the
fly-ash.
31 | P a g e
Outbound logistics-
The outbound logistics of prism is concerned with efficient flow of output of
company. There are two outputs which are related to this company are loose
cement and clinker. These two outputs are managed to the market through two
modes of transportation i.e. through road and rail transport.
The two output are handled as -

1) LOOSE CEMENT- PCL’s cement division operates a single-location
cement plant at Satna in Madhya Pradesh with a capacity of 5.6 mtpa, With
the recent expansion from 2.4 to 6.0 mtpa, PCL has emerged among the top-
5 cement players (by capacities) in the limestone surplus Satna belt. The
company’s major markets include East U.P, Bihar, and Madhya Pradesh.
32 | P a g e
At present, PCL’s key markets are Eastern Uttar Pradesh, Madhya Pradesh and
Bihar which account for 55%, 35% and 10% respectively of sales.
Before understanding the dispatch of loose cement the process of cement
manufacture could be overviewed by the following diagram.
The transport of loose cement is handled using both rail and road mode of
transportation. The packing plant division of loose cement is fully automated and
33 | P a g e
so it adds a plus point for packing of loose cement. The loose cement is transported
through bulkers and trucks through roads. The capacity of a truck/bulker is 30 mt
(allowed) and when over loaded its 35 tons. The loose cement is forced into the
bulkers through pressure. The bulkers are used to transport cement to Allahabad
where there is another packing plant of Allahabad cements. The loose cement is
stored in SILOs (buffer) in PCL, there are 5 cement silos meant for keeping cement
which are then connected to the packing plant, loose cement is fed to required
means of transport(truck or train) from there.
For transportation through railway the cement bags are directed to the rail yard
directly to the train wagons where labors are there to arrange them in order. The
cement bags from the feeder in the packing plant are directed to various yards
through well automated conveyor belt system.
2) Clinker – It is an intermediate product in the cement making process and it

is an input for some cement plant which treat clinker as their input to
production. The clinker is transported using both modes of transportation i.e.
road and railway.
34 | P a g e
The view of party players-

There can be three classification, they are-
1) 1PL-
A First party logistics provider is a company or an individual that
need a product to be transported from a point A to a point B. Example:
Company A needs its product to be transported to the company B. They are
both 1PL.Here in the case of PCL, it is itself a first party player for its
dealers and customers as being the supplier of cement and clinker.
2) 2PL-
A Second party logistics provider specializes in one particular area of
the supply chain, usually transporting goods from one point to another. This
company owns the means of transportation. Example: Company A delivers
company´s B merchandise with its own means of transportation, Company A is
a 2PL. DHL or UPS are 2PL. Here in the case of PCL, there are various
registered truck companies which will only deliver PCL output on their
availability basis. So these trucking companies are acting as 2nd party players.
3) 3PL-
A Third party logistics provider is a company that can be used to
satisfy most or all the logistics needs of a company. Things that can be
outsourced are transportation, warehousing, packaging, distribution and so
forth. 3PL companies usually hold and transport goods without actually owning
them.
35 | P a g e
DIFFERENT MODES OF TRANPORTATION @ PRISM-

1) Road transportation
2) Rail transportation.
ROAD TRANSPORTATION-
One of the most important modes of transportation and the base for all other
modes of transport is the road in India. Roads are the dominant mode of
transportation in India today. They carry almost 90 percent of the country’s
passenger traffic and 65 percent of its freight. The density of India’s highway
network at 0.66 km of highway per square kilometer of land is similar to that of the
United States (0.65) and much greater than China's (0.16) or Brazil's (0.20).
However, most highways in India are narrow and congested with poor surface
quality, and 40 percent of India’s villages do not have access to all-weather roads.
THE DOCUMENTS INVOLVED IN ROAD TRANSPORTATION ARE
1. Consignor Bill/ Tax Invoice.
2. Waybill
3. Goods Forwarding Note
4. Copy Of Registration Certificate Of Company
5. Consignment Note
 1 Consignor copy – original or negotiable copy
36 | P a g e
 1 Consignee copy - non negotiable
 1 Driver copy- non negotiable
 1 Record copy- non negotiable
 1 File copy- non negotiable
1. CONSIGNOR BILL/ TAX INVOICE: An invoice or bill is a commercial document issued

by a seller to the buyer, indicating the products, quantities, and agreed prices for products the
seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the
payment terms. The buyer has a maximum amount of days to pay these goods and are sometimes
offered a discount if paid before.
CONTENTS:
(a) Name and contact details of consignor
(b) Name and contact details of consignee
(c) Bill number
(d) Date of order
(e) Date of sale
(f) Party order number of consignor.
(g) Destination
(h) Payment terms
(i) Challan number and date
(j) Full description of goods sold
37 | P a g e
(k) Quantity/weight, rate and amount of goods sold
(l) registration certificate number of the consignor;
(m) Rate and amount of tax charged in respect of taxable goods;
(n) Total amount of the invoice taking into consideration all the amount payable under different
heads.
(o) Signature of the selling dealer or his regular employee, duly authorized by him for such
purpose.
2. WAYBILL: This is a permit that is given by the consignor to the carrier and it is issued for
the state to which the consignment will go. Consignee goes to sales tax department and issues
waybill and sends to the consignor and the driver carries it.
3. GOODS FORWARDING NOTE: It is the consignor’s declaration about types of goods and
their present market value which is going to be transported. One copy is given each to the carrier
and the consignee.
CONTENTS –
a) Name and contact details of consignor
b) Name and contact details of consignee
c) Number of packages
d) Method of packing
e) Nature of goods
f) Private mark on goods
38 | P a g e
g) Value of the goods for the carriers risk liability (excluding breakage/leakage risk)
h) Freight (to pay/paid/ due)
i) Weight in kg.
j) Special instruction if any
k) Signature of sender or his agent.
l) Date
m) Invoice number
n) Central tax invoice no.
o) Booking of consignment a) owners risk or b) carrier’s risk.
p) insurance
COPY OF REGISTRATION CERTIFICATE OF COMPANY: Each and every firm or

company operating under the Indian jurisdiction has to be registered under the government of
India. A copy of this certificate has to be provided to the transporter, proving it to be registered
and not a fake company. It is not necessary for local or small transport operators.
CONSIGNMENT NOTE: Document prepared by a consignor and countersigned by the carrier

as a proof of receipt of consignment for delivery at the destination. Used as an alternative to bill
of lading (especially in inland transport), it is generally neither a contract of carriage nor a
negotiable instrument. It is prepared based on the tax invoice.
It has one original (negotiable) copy and four to five copies of it which are not negotiable.
39 | P a g e
ADVANTAGES OF ROAD TRANSPORT OF CARGO:
1. Less capital quality: - Road transport required much less capital investment as compared to
other modes of transport such as railways and sea transport.
2. Door to door services: - The outstanding advantage of road transport is that it provides door
to door or warehouse to warehouse services.
3. Services in rural areas: - Road transport is most suited for carrying goods to and from rural
areas which are not served by rail, water or air transport.
4. Flexible services: - Road transport has a great advantage over other modes of transport for its
flexible services. Its routes and timings can be adjusted and changed to individual requirements
without much inconvenience.
5. Suitable for short distance: - Delays in transit of gods on account of intermediate loading
and handling are avoided. Goods can be loaded direct into a road vehicle and transported straight
to their place of destination.
6. Lesser risk of damage in transits: - Road transport is most suited for transporting delicate
goods like chinaware and glassware, which are likely to be damaged in the process of loading
and unloading.
7. Rapid speed: - If the goods are to be sent immediately are quickly, motor transport is more
suited than the railways or water transport.
8. Saving in packing cost: - As compared to other modes of transport, the process of packing in
motor transport is less complicated. Goods transported by motor transport require less packing or
no packing in several cases.
40 | P a g e
9. Private owned vehicles: - Another advantage of road transport is that big businessmen can
afford to have their own motor vehicles and initiate their own road services to market their
products without causing any delay.
10. Feeder to other modes of transport: - The movement of goods beings and ultimately ends
by making use of roads. Road and motor transport act as a feeder to the other modes of transport
such as railway, ships and airways.
DISADVANTAGES OF ROAD TRANSPORT OF CEMENT:
In spite of various merits road/motor has some serious limitations:
1. Seasonal nature: - Motor transport is not as reliable as rail transport. During rainy or flood
season, roads become unfit and unsafe for use.
2. Accidents and breakdown: - There are more chances of accidents and breakdown in case of
motor transport. Thus, motor transport is not as safe as rail transport.
3. Unsuitable for long distance and bulky traffic: - This mode of transport is unsuitable and
costly for transporting cheap and bulky gods over long distances.
4. Slow speed: - The speed of motor transport is comparatively slow and limited if the distance is
long and if it has to pass through city, town or locality.
41 | P a g e
5. Lack of organization: - The road transport is comparatively less organized. More often, it is
irregular and undependable. The rates charged for transportation are also unsuitable and unequal.
6. Roads are congested and of poor quality: Lane capacity is low; most national highways are
two lanes or less. A quarter of all India's highways are congested. Many roads are of poor quality
and road maintenance remains under funded only around one-third of maintenance needs are
met. This leads to the deterioration of roads and high transport costs for users
7. Restrictions on transport of hazardous cargo.
8. Accidents probability is high.
9. Limited transport volume on how much goods can be transported at a time.
10. Traffic jams.
11. Pollution.
42 | P a g e
BLUE PRINT OF USE OF ROAD AS A TRANSPORT
43 | P a g e
RAIL TRANSPORT –
Rail transport is a commonly used mode of long-distance transportation in India. Almost all
rail operations in India are handled by a state-owned organization, Indian Railways, Ministry of
Railways. The rail network traverses the length and breadth of the country, covering in 2011 a
total length of 64,460 kilometers (40,050 mi).It is the 4th largest railway network in the world,
transporting 7651 million passengers and over 921 million tones of freight annually, as of
2011.Its operations cover twenty eight states and three union territories and also provide limited
service to Nepal, Bangladesh and Pakistan. Both passenger and freight traffic has seen steady
growth, and as per the 2009 budget presented by the Railway Minister, the Indian Railways
carried over 7 billion passengers in 2009.Although rail has traditionally been used for moving
bulk materials, there is a significant market in intermodal containers carrying non-bulk goods.
Generally, exporters use rail when other modes of transport are unsuitable or relatively
expensive.
Rail transports over 100 million tonnes of goods worth around £30 billion every year, while
demand is predicted to grow by 30 per cent through to 2020. The rail industry's move away from
state monopolies and subsidies within the European Union has opened up competition and
resulted in a growing market for rail services, encouraging new rail operators to enter the
marketplace. Rail can be cheaper than other forms of transport, particularly over long distances,
and can offer greater reliability and time savings. However, rail services can take time to arrange
and are not well suited to small consignments.
Rail can be a complex transport solution, but used effectively it can give you a viable option for
moving your goods. The advantages of rail transport include benefits to the environment and less
expensive, quicker and more practical journeys when compared with road transport. Equally,
limited and inflexible routes and timetables can increase costs and slow down the movement of
goods. While loading and marshalling are expensive, you can make economies by moving many
consignments at once. Rail is generally more cost-efficient than road transport if the journey
exceeds 400 kilometres
44 | P a g e
Key rail transport documents

If you transport goods by rail, you need to be aware of the CIM note, forwarders' certificates and
forthcoming changes in legislation that may affect your paperwork. As of 2010, development of
a simplified consignment note is underway at the International Rail Transport Committee (CIT).
Railway receipt-
This document confirms that the rail carrier has received the goods and that a contract of carriage
exists between trader and carrier.
Unlike a bill of lading, a railway receipt isn't a document of title. It doesn't give its holder rights
of ownership or possession of the goods.
Key details to be provided in the note include:
 a description of the goods

 the number of packages and their weight
 the names and addresses of the sender and recipient
The sender is responsible for the accuracy of CIM notes, and is liable for any loss or damage
suffered by the carrier due to inaccurate information. Notes are used to calculate compensation if
goods are lost or damaged..
Forwarders' certificates-
'Forwarders' documents' have been designed for these kinds of transactions. The Forwarders'
Certificate of Receipt (FCR) provides proof that a forwarder has accepted your goods with
irrevocable instructions to deliver them to the consignee indicated on the FCR.
Using an FCR can speed up payment. For example, if you're selling overseas and your contract
with the buyer states that the goods are collected from the factory, an FCR can be issued when
your buyer's forwarder collects goods.
You can then present the FCR for payment, rather than having to wait until a non-negotiable or
negotiable transport document (the proof of the goods having been loaded onto the transport
conveyance for the main international carriage, if any) is issued, which may be some time later.
While an FCR is non-negotiable, another similar document, the Forwarders' Certificate of

Transport (FCT), is negotiable. This means that the forwarder accepts responsibility to deliver to
a destination you specify - not to an unchangeable destination as with the FCR.
45 | P a g e
Prism cements rail mode information flowchart-
46 | P a g e
The salient features of logistics and supply chain in PCL -

1) The whole process of logistics is maintained both manually and is also stated
in form of tables using the dedicated format of daily dispatch reports.
2) Each and every department is efficiently divided and all are non inter-
dependent on each other, so that one’s working would affect other.
3) Due to fully automated facility available @ PCL, it enhances the movement
of flow of good and information and makes it easy for the supply chain to be
in an order.
4) The whole plant is fully modeled under SAP module, so the maintenance for
each and every work with logistics always remain updated from all
departments of logistics.
5) The logistics department practices certain appreciated cost cutting
techniques to tackle the logistics cost, like the back haul practice followed
for the route of packing plant in Allahabad.
6) The problem with the road transport i.e. the unavailability of the vehicles, is
also very nicely handled by ensuring registration amount from the truck
owners and hence engaging them as a permanent part of the prism logistics.
7) To cater with the development and updations regarding the daily dispatch
from the plant, an efficient system of daily sap reports and manual hanling is
maintained across the various departments.
8) The route scheduling decisions are revised on a daily basis to keep the
logistics cost on a desired level.
47 | P a g e
POINTS FOR VALUE ADDITION-

1) The logistics and supply chain department of prism cement can think of
developing a fully integrated and flexible web-portal “cement-online”, to
facilitate order-processing and delivery. This would give a new shape to the
core competency of the company.
2) The company could think of mapping a hub and spoke model for giving a
new direction to its supply chain by increasing a few number of hubs like
packing plant divisions across its prior market location, like the one in
Allahabad can be treated as hub and spokes (dealers& customers) all around
can be well connected through every mode.
3) The fly-ash is a major raw material for prism concerned with the inbound of
the company and its procurement cost is a little concern due to use of road
transport as the only mode, so step should be initiated to procure fly-ash by
switching to rail mode of transportation on a major scale.
4) The supply chain of the satna cement belt could be pumped up to new
heights if the logistics of all cement plant located on this belt start sharing
the logistics services, like for having a common shared truck or bulker unit,
by each company having a share of truck to complete the road logistics unit
and all could have a equally distributed and planned access to the unit.
5) The idle time maintenance system in the company for road transport could
be enhanced even more by advancing the use of GPS-tagging and tracing
technology in the trucks and bulkers used in and around the company.
6) The cement belt in and around satna region consist of 8 major cement
&clinker plants using same two modes of transport and nearly all have a
major share for railways usage, so a proposal of dedicated corridor meant for
48 | P a g e
raw material procurement like the fly ash could be designed if the view for
shared logistics to reduce cost is the aim but rather it’s a conceptual base for
the time-being.
SOME DOCUMENTS ANALYSED DURING THE

STUDY-
A lorry receipt-
49 | P a g e
The dispatch instruction(DI)-
50 | P a g e
Form 38(used in transport to other state)-
51 | P a g e
Commercial road invoice (bill of lading)-
52 | P a g e
Despatch programme railway-
53 | P a g e
54 | P a g e
Railway forwarding note-
55 | P a g e
A railway receipt-
56 | P a g e
A form of daily despatch report-
Fly ash detail form-
57 | P a g e
Desptch advice for railways-
58 | P a g e
Rail-yard timetable
59 | P a g e
Congestion chart-
60 | P a g e
Wagon seal-
61 | P a g e
A wagon weighing machine-
62 | P a g e

Logistics and Supply Chain Related To Cement Industry

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Logistics and Supply Chain Related To Cement Industry

Caricato da

Copyright:

Formati disponibili

Prism cement - logistics 2013

Indian Maritime University

Subject Page No.

Chapter-I: Introduction & Overview 7

(ii) Selection of Organisation for Internship 8

(iii) Getting to Work 9

(iv) Schedule of training 9

(vi) Structure of Report 10

Chapter-II PRISM CEMENT LTD

(i) About prism 11

(ii) Prism-vision & mission 12

(iii) Prism cement-Features 14

(iv) Points provided by ICRA 17

ii. Logistics and supply chain related to cement a global perspective 20

iii. Logistics @prism cement limited 27

iv. Modes of transport 36

v. Salient features of logistics observed- 47

Points for value addition- 48

Docs analyzed during the study 49

Statement of Submission of Report

A report entitled “logistics and supply chain related to a cement company”

INTRODUCTION AND OVERVIEW

M.B.A in International Transportation & Logistics is designed to provide the students

SELECTION OF ORGANIZATION FOR INTERNSHIP

Date Division IN c/o

VISION AND MISSION-

“To be acknowledged as a leading player in the industry

The main objective of prism cement is to continuously

PRISM CEMENT LIMITED-

Prism Cement Limited, incorporated is 1992, is leading manufacturer of

Fundamental and Valuation Grades

- Fundamental Grading of ‘4’ indicates “ Strong fundamentals”

-Valuation Grading of ‘B’ indicates “Moderately Underalued” on a relative basis

POINTS PROVIDED BY ICRA-

Supply Chain Management in the

STRUCTURE OF THE CASE STUDY-

Cement Industry Analysis -

Largest Cement Companies Supply Chain strategy-

Cement Supply Chain Operating Model (Processes Analysis)-

Cement Supply Chain Operating Model (Product Analysis)-

SC Innovations in the Commodity Industry -

FACTORS MOSTLY AFFECTING THE COST-

Logistics @ prism cements

LOGISTICS @ PRISM CEMENT LIMITED-

In the view of procurement of input and ouput-

In the view of party players-

In view of availability of modes of transportation-

Procurement of different raw material (briefing)-

The two output are handled as -

2) Clinker – It is an intermediate product in the cement making process and it

The view of party players-

DIFFERENT MODES OF TRANPORTATION @ PRISM-

THE DOCUMENTS INVOLVED IN ROAD TRANSPORTATION ARE

1. Consignor Bill/ Tax Invoice.

3. Goods Forwarding Note

4. Copy Of Registration Certificate Of Company

 1 Consignor copy – original or negotiable copy

 1 Consignee copy - non negotiable

 1 Driver copy- non negotiable

 1 Record copy- non negotiable

 1 File copy- non negotiable

1. CONSIGNOR BILL/ TAX INVOICE: An invoice or bill is a commercial document issued

(a) Name and contact details of consignor