Table of Contents

1. Introduction ..................................................................................................................................................... 2
i. Vision ............................................................................................................................................................... 2
ii. Mission ............................................................................................................................................................ 2
iii. Our Values ..................................................................................................................................................... 2
iv. Code of Conduct ............................................................................................................................................ 3
2. Corporate Strategy ........................................................................................................................................... 3
3. Procurement: .................................................................................................................................................... 3
4. Company Management: ................................................................................................................................... 4
5. Accounting Information: ................................................................................................................................. 5
i. Costing Methods: ............................................................................................................................................. 5
ii. Budgeting Techniques: ................................................................................................................................... 5
6. Interview Conduction: .................................................................................................................................... 5
7. Conclusion: ...................................................................................................................................................... 8
8. Recommendations: .......................................................................................................................................... 8







1. Introduction
A longtime leader in the cement manufacturing industry, Fauji Cement Company, headquartered in
Rawalpindi, operates cement plants at Jhang Bahtar, Tehsil Fateh Jang, District Attock in the province
of Punjab. The Company has a strong and longstanding tradi tion of service, reliability, and quality
that reaches back more than 15 years. Sponsored by Fauji Foundation the Company was incorporated
in Rawalpindi in 1992.
The Company has been set up with the primary objective of producing and selling ordinary portl and
cement. The finest quality of cement is available for all types of customers whether for dams, canals,
industrial structures, highways, commercial or residential needs using latest state of the art dry
process cement manufacturing process.
i. Vision
To be a role model cement manufacturing Company, benefiting all stake holders and fulfilling
Corporate Social Responsibilities while enjoying public respect and goodwill.
ii. Mission
While maintaining its leading position in quality of cement maximize profitabilit y through reduced
cost of production and enhanced market share
iii. Our Values

Customers
We listen to our customers and improve our product to meet their present and
future needs.
People
Our success depends upon high performing people working together in a safe and
healthy work place where diversity, development and team work are valued and
recognized.
Accountability
We expect superior performance and results. Our leaders set clear goals and
expectations, are supportive and provide and seek frequent feed back.
Social
Responsibility
We support the communities where we do business, hold ourselves to the highest
standards of ethical conduct and environment responsibility, and communicate
openly with public and FCCL employees.



iv. Code of Conduct
It has been said that the essence of a successful and visionary company is the ability to preserve its
core values and to stimulate progress. Corporate ethics is the practice of our shared values. These
shared values define who we are and what we can expect from each other. It is a code which applies
to all employees and consists of standards decided by Allah and His Messenger (PBUH).


2. Corporate Strategy
We shall achieve our vision by maintaining high quality product, relentless pursuit of customer
satisfaction, empowering FCCL employees to lead cement industry and achieve manufacturing
excellence, producing superior returns to our shareholders.
3. Procurement:
Fauji Cement Company has standing requirement for under mentioned items:
1. Coal
a. Imported Coal including Afghani Coal
b. Local Coal

2. Gypsum
3. Laterite
4. Limestone Dust
5. Packing Material
a. Polypropylene Bags
(1) Domestic purpose
(2) For export purpose

b. Paper Sacks
(1) 2-ply paper sacks
(2) 3-ply paper sacks

6. Coal: FCCL uses coal of different regions/countries e.g South Africa, Indonesia, Afghanistan as
well as local coal. Our total consumption is about 40,000-45,000 MT per month.
4. Company Management:


5. Accounting Information:
i. Costing Methods:
There are two types of costing methods:
1: Process costing
2: Specific costing
We use:
Process costing: It includes overall cost of the process, for example: In our factory for the production
of cement, the material is first crushed so we calculate the cost of crushing .After that material is grinded
then it is fired and cooled, so the cost of doing this is included in process costing.
ii. Budgeting Techniques:
There are two types of budgeting techniques
1: Fix Budgeting
2: Variable Budgeting

Fix Budgeting: It is a ordinary budgeting technique in which they fix certain formulas according to their
ease and can make future predictions about certain values e.g. how many units of electricity will be
consumed if they produce 1 ton of cement?, they develop certain formulas which could help them
predict. Similarly, if you talk about engine, they use a formula of specific fuel
consumption (SFC) which helps them predict that how much fuel is required for the production of 1 unit
of electricity. This will help them to place an advance order of required fuel.
Variable Budgeting: They have set certain norms keeping in view that those norms do not change
whatever happens.
iii. Annual Report Formation: There are no certain criteria of forming a report, they do it according to the
standard report forming format.
6. Interview Conduction:
Following questions were asked by the Power Plant manager of Fauji cement:
1. What is the goal of your firm?
Produce quality cement at lowest production cost.
2. How many employees are there in your firm?
About 1000 employees and employed in our firm
3. Which fuel do you use in your power plant?
We use furnace oil to produce electricity in the power plant.
4. What is the basic operation of your company?
The basic operation is manufacturing of ordinary Portland cement.
5. What are the main operations of the firm?
There are two types. One is local operation and other is centrally controlled operation. There are certain
machineries which are operated using local control operations e.g. crusher, reclaimer. And there are
certain machineries like kiln, cement mills and raw mill and coal mill these are operated from central
control.
6. What are the main operations of production department?
There are responsible for the smooth operations of all the machinery.
7. How do you manage all the operations?
Operations are coordinated by all the staff which head of department leads i.e. deputy manager, assistant
manager, shift staff, operators and petrol men they all report to the head of department.
8. What is the layout of production department?
First the material is crushed by using jaw crushers and then it is transferred using conveyers to the
circular store and after the circular store the material goes to feed raw mills where feed is checked and
then it goes to raw mill where it is further grinded and crushed excess material is stored in storage silos
where it is saved, then it is transferred to pre heater where the material is further heated after this is goes
to kiln where there are two burners one is main burner and second is secondary burner, here the material
gets heated up to 1400 degree centigrade, after this process it goes to cooler where it is cooled and it
takes the form of clinker and then it is conveyed to cement mill where it is further crushed and grinded
and 5% gypsum is added giving rise to cement (95% clinker and 5% gypsum) eventually after which it
goes to the packing plant. Before packing, storage silos are there for the storage of cement when the
order is not yet placed.
9. How do you manage your inventory?
First of all we analyze our consumption pattern and then we control the consumption also for non
critical items which are expensive, we extend their salvage value through the repairing techniques which
saves our replacing cost. Further there is min and max level of each item, min level comes for a certain
item our system indicates and we make requisition. We have recently introduced refuse dry fuel (RDF)
which has lowered our cost of buying coal.
10. How do you reduce the cost through managing operations?
Operations are conducted through standard operating procedures and we make our efforts through our
maintenance department and operation department who have good relations and there coordination is
good, so that if there is any break down or stoppage it can be managed in a minimum possible time as
well as predictive maintenance for efficient and reliability of our equipments hence, reducing the cost.


7. Conclusion:
The company is doing a profitable business and their inventory management techniques are quite useful
because after a decade of improvements and hard work their profitability increased to a great level last
year. Also the introduction of refuse dry fuel has helped in burning because coal is less used hence
reducing the cost of coal. They manage their inventory by improvising the critical machinery rather than
replacing them which has also lowered the cost. In Pakistan Fauji cement is considered the best cement
and millions of houses are being constructed by using it as it is the market leader.
8. Recommendations:
1. They should use gas as fuel for the engine of the power plant rather than using furnace oil because by
introducing gas will help produce cheaper electricity which will increase profit margins of the company.
2. They should think of introducing new alternative fuel for better quality burning purposes in kiln free
from smoke and polluted gases i.e. use oxi-hydrogen hence, pollution free burning.














Final Project Report Operations Management


Submitted To: Mr. Omer Ghauri
Submitted By:
Mahum Shizan
Humna Amjad
A.D Qasim
Rauf Satti
Date: 19
th
May, 2014