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Raghvendra Singh - SCM Prject at Renupower Division
Raghvendra Singh - SCM Prject at Renupower Division
Raghvendra Singh - SCM Prject at Renupower Division
ON
“SUPPLY CHAIN MANAGEMENT”
I hereby declare that Summer Training report on the topic “supply chain management” is
factual report to my project work undertaken towards practical fulfilment of the degree of
MBA from “LLOYD BUSINESS SCHOOL, Greater Noida.”The facts and figures
presented here is correct and true to best of my knowledge and belief.
Raghvendra pratap
Date-07-08-2010 Lloyd Business School
(Greater Noida U.P)
(Raghvendra pratap)
Summer training is an integral part of our academic curriculum. During the training a
student gets an opportunity to understand the practical aspect of theory. Training makes
understand us organization behaviour. Training makes the concept clearer and gives
modern skill which helps us to understand the new business concept. During the training
we get opportunity to share our views with a knowledgeable person who help to us solve
our problem, which come in our mind related to topic. Under training we aware that books
gives us only basic knowledge, which is theoretical part but during the training we learn
numerical part as well as theoretical part.
This report is outcome of the summer training that we have undergone at Hindalco
Industries limited for the partial fulfilment of PGDM.
The topic allotted to me by the company is “Supply Chain Management of Hindalco Ind.
Ltd. (RPD)”.
A supply chain is a network of facilities and distribution options that performs the
functions of procurement of materials, transformation of these materials into intermediate
and finished products, and the distribution of these finished product for final uses. Supply
chains exist in both service and manufacturing organizations, although the complexity of
the chain may vary greatly from industry to industry and firm to firm.
Vendor Development
Vendor Rating
Annual Rate Contract
Vendor Waiver
5. OBJECTIVE OF STUDY
6. RESEARCH METHODOLOGY
9. BIBLIOGRAPHY
CHAIRMAN’S FOREWORD
“Time and again, the supremacy of the human element cannot be over
emphasized. The success of failure of an organization depends on people,
on human beings, on their talent, on their initiative, on their ability to lead
and coordinate with others, to work as a team. It also depends on the ability
of the organization, to motivate them to greater heights.
The group’s products and services, offer distinctive consumer solutions. Its 66 state-of-the-
art manufacturing units and sect oral service span throughout the world.
1931-33 - Bharat Sugar, Upper Ganges Sugar, New Swadeshi Sugar, New Delhi Sugar.
By 1947 - Assets wroth Rs. 25 crores in 20 companies.
Thereafter
1954 - Durgapur Iron & Steel
1957 - Gwalior Rayon, Nagda
1962 - Hindalco commencement of production
1966 - Take over of Indian Rayon
In May 2007, Novalis became a Hindalco subsidiary with the completion of the
acquisition process. The transaction makes Hindalco the world's largest aluminium
rolling company and one of the biggest producers of primary aluminium in Asia, as
well as being India's leading copper producer.
In May 2006, the company signed an MoU with the Government of Madhya Pradesh
for setting up a greenfield aluminium smelter and a captive power plant. The
company also entered into a joint venture with Essar Power (M.P.) Ltd. to develop
and operate coal mines at Mahan, Madhya Pradesh. The joint venture will supply
coal to the proposed aluminium smelter and power complex in Madhya Pradesh
In May 2006, the company's copper mining subsidiary Aditya Birla Minerals
Limited (formerly Birla Mineral Resources Pty Ltd.) came out with an equity
offering and subsequent listing on the Australian Stock Exchange (ASX)
In March 2006, the company acquired an aluminium rolling mill and wire rods
facility, from Asset Reconstruction Company (India) Limited (ARCIL), belonging to
Pennar Aluminium Company Limited
In January 2006, the company concluded 4:1 rights issue of its shares on partly paid
basis. It was the largest ever rights issue in the history of corporate India and first
one to issue partly paid instruments
In September 2005, the company split its shares in ratio of 10:1 in order to enhance
liquidity and to encourage participation from retail investors
In April 2005, the company signed an MoU to establish a world class integrated
aluminium project in the state of Orissa
An Executive Summary:
9 Supply Chain Management
ADITYA BIRLA GROUP
The Aditya Birla Group was the first in Indian to venture overseas, by starting a joint
venture in Ethiopia. Thereafter, over the last quarter century, this group has
started 20 very successful and diversified ventures spread through the Asian
region. It has been declared by Euro money that this is the only truly
multinational group of India.
At present, the group has more than 50 manufacturing units, producing a diverse range of
products, financial service, trading and computer consultancy. It is also expanding its
activities in the field of telecom, oil refinery, power generation, copper smelter etc.
In India:
• A premier branded garments player
Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does
not come in the way of the need to keep learning afresh, to keep experimenting.
• • Reaching out to seven million people annually through the Aditya Birla Centre for
Community Initiatives and Rural Development, spearheaded by Mrs. Rajashree Birla
• • Focusing on: health care, education, sustainable livelihood, infrastructure and
espousing social causes
CUSTOMERIZE
PEOPLE- IZE
STRATEGIZE
GROUP VALUES
Particular Details
Manpower statement:-
Total strength-
Staff : 975
Workers: 1790 2765
List of Machinery:-
Installed Capacity in MW : 746
Number of Units : 10
Unit Description:-
a. Boiler : 11 Nos.
b. Turbine : 10 Nos.
Production capacity : 742 MW
RenuSagar Power Division is a division of Hindalco Industries Ltd. for Generating and
supplying uninterrupted Power exclusively to the interact Alumina Complex at Renukoot,
UP. RenuPower is located at RenuSagar, Almost at the pithead of Singrauli Coal Mines of
15 Supply Chain Management
Northern Coal Fields Ltd. In the vicinity of Govind Vallabh Pant Sagar (popularly known
as Rihnad Lake) in the district of Sonebhadra of the State Uttar Pradesh, India. The Total
installed capacity of plant is about 746 MW and comprises of 10 T.G. Set 11 Boilers.
RenuSagar Power Plant is one of the most efficiently operating at a plant load Factor of
around 100.8%.
PERFORMANCE
As the aluminum smelter need continuously and steadily power supply, high plant
availability and operation at rated capacity, is the permanent importance for Renusagar
power plant availability factor (PAF) and plant Load Factor (PLF) of around 100.8% and
more consistently for over two decades (against the national average of 55%) right from its
inception. 11 It has dispelled the misconception that such a high PAF and PLF cannot be
achieved by the thermal power plant using a low-grade coal.
ENERGY CONSERVATION
Renusagar is conscious of energy conservation has made concentrated effort to reduce and
limits its auxiliary power and oil consumption per unit generated has been maintained at
While Induction & Orientation Level Training (IOLT), Technical Skill Development
Programmes, Management and Supervisory Development Programmers, Mock Drills and
Supportive Programmers on ISO-14001 and ISO-9001 and OHSAS 18001 are aimed at
knowledge and skill development. A number of initiatives like departmental Learning
System and Coaching (LSC), Mentoring, Quality Circle, Inter Unit Visits, One Point
Lessons, KAIZENS contributes to creating an open atmosphere and spread the implicit &
explicit knowledge concentrated in different pockets of the organization
Renusagar Power Division is allotted an area measuring 61.2 Hectares (151.25 acres) for
construction of new Ash pond by the Forest Department under Govt. Grant Act after due
approval from MOEF on 10 years lease basis. The State Environment Department while
recommending the case for transfer the land to Renusagar has imposed a condition to
develop a Green Belt of 100 meters on Eastern Side and 50 meters on Southern Side of the
pond which was duly adhered.
The above land is in the form of a valley and uneven hilly terrain. The volume available for
ash storage after construction of the embankment is about 107 Lacs M3. The quantity of
ash produced from all the ten units is around 17.6 Lacs M3 per year which is average of
36% in the coal consumed in a year.
Ash 128kg
Gypsum 16kg
Lime 26kg
Sand 30kg
200kg
“To be one of the best operated and maintained Captive Power Plant, with enviable Plant
Load Factor, to supply uninterrupted power to Hindalco Renukoot at lowest cost.”
RENUSAGAR MISSION
TTMDC VISION
“To create a learning organization to match the technological changes and face
future challenges.”
25 Supply Chain Management
TTMDC MISSION
“To develop TTMDC as a resource center and centre of excellence in power sector
Development.”
HINDALCO VISSION
“To be a premium metals major, global in size and reach, with a passion for
excellence.”
HINDALCO MISSION
“To relentlessly pursue the creation of superior shareholder value by
exceeding customer expectations profitably, unleashing employee potential
and being a responsible corporate citizen adhering to our values.”
perhaps growing at a pace slower than we would otherwise have liked, so be it.
For us, the key to Enduring leadership lies in knowing what we stand for and in
The procurement system encompasses all the material procured by the purchase
department.
Make
Sr.No. Unit Capacity(MW) Turbo Boiler
Generator
The inventory control cell first determines the PR value on the basis of last procurement
rate or quotation and assigns ERP number/ code. It also supplements information in respect
of:
Stock in stores
Pending PR quantity with expected delivery
Consumption pattern for past 3 years, and
Delivery schedule suitability, considering consumption plan.
The industrial engineer associated with the inventory control cell ascertains availability of
material or it’s equivalent with other departments and gets same spares for use. He also
explores possibility of using alternative material which may be available in stock or
purchase value of which would be comparatively lower.
The above report is discussed amongst the HOD’S during MPR (monthly
performance review meeting). These are discussed with the president during
monthly financial review meeting.
Boiler tubes.
Grinding rolls
Bearings
Ariel ropeway spares etc.
AT RENUSAGAR
Comparative bids
Annual rate contract
Proprietary items
Repeat orders
The purchase department work involves:
Making purchases
At RPD various project are being carried out to control the inventory as discussed
earlier & the success story of these analysis are quite satisfactory such as:
Last three years data of non/slow moving items shows declining trend from 161.62
(in lacs) in 2006-2007 to 111.45 in 2007-2008 to 94.32 in 2008 -2009.
In order to keep the stores items as per ROL/ROQ and avoiding stock out position.
Purchase requisition is simplified in terms of no. of destination traveled from
originator to buyers.
35 Supply Chain Management
Purchase requisition is being sent online, hence tremendous time saving
achievement.
PR status is updated on-line.
PR internal lead-time reduced through ERP system.
ERP stands for enterprise resource planning. It is a software solution that helps companies
to gain competitive edge by integrating all business process and optimizing the resource
available.
The traditional application system treats each transaction separately. It is build around
strong boundaries of specific functions that they are meant to cater to. ERP stops treating
these transactions separately as stand alone activities and consider them to be part of inter
linked processes that make up the business. An ERP system stores data generated as a
result of diverse transactions that are confined to any departmental or functional
boundaries, but are rather integrated to be used by multiple users, for multiple purposes
and at multiple places.
ERP should not be mistaken as a magic tool that can transform anything overnight. Its
successful implementation is a long journey towards enterprise excellence.
To support such a diverse system, companies need sophisticated information technology
infrastructure and other important enabling tools like workflow, Workgroup, Groupware’
Internet, Intranet, Data ware housing etc. These entire components together from the ERP
backbone.
1. All the Purchase Requisitions will be routed through Inventory Control Cell (As defined
in the System)
2. The items and values within the sanctioning authority of Sr. Executive President (Refer
Order No. Sr.EP/00/81 dt. 29.08.2003) will be processed in sequential order as under:-
2.1.ICC will submit hard copy of PR to Secretary to Sr. Executive President, who will
obtain approval from Sr. Executive President.
2.2.Shri Kurien Thomas will retain and maintain a file of such approved PRs and will
send a copy to ICC or communicate ICC about the status.
2.3.Routing PR will then be done by ICC.
Note: PR amount above 20 Lacs and items i.e. imported, furnitures, Computers,
Telephones, Decorative electrical goods and House hold items/ House hold electrical
goods and the like are to be got approved by Sr. Executive President.
3. Procurement of IT related items will be done as per Sr. Executive Presidents Office
Order Nos. EP/010/105 dated 21.10.2000, EP/00/44 dated 6.4.2001, SrEP/00/81 dated
29.8.2003 and Director (Whole Time) circular dated 28.12.2001. Hence PR for such
items will be released only from IT department for which all requirements will be sent
to IT department.
Process Requirement:-
5. All the Block sanction & special sanction items has to be processed in Oracle with
appropriate Task Codes as mentioned below:-
5.1.Block Sanction
• Department has to obtain Task Code from Accounts Department
• The entire PR will be raised in G19 organization in Oracle only.
5.2.Special Sanction
• Task Code has been fixed which will be 9500 for all the items & PRs.
• All the PR will be raised in G02, G05, G08, G11, G14 & G17 organization for
units 1-5, 6, 7, 8,9 & 10 respectively in Oracle only.
Note: HOD will contact Technical Cell for procuring the item under Block or
Specia1Sanction..
Note: Rejected forms are kept in database only if they carry potential and are
rejected beacuse of high number of Vendors in the list according to the material.
VENDOR DEVELOPMENT
43 Supply Chain Management
Vendor development has been done and there rating is done on the basis of quality, price
service & lead-time. For new vendors the preliminary survey and revaluation is done in the
quietest possible time.Types of Vendor Development:
from Vendors.
CONCIDERED PRAMETER
44 Supply Chain Management
Sl. Term Parameter Score Weight age
• Catagory OEMS 10
Other Manufacturer 8
Authorized Dealer 6
Sub-Contractor 4
Trader 2 0.20
• Location Kolkata 10
A-Class City(Metro’s) 8
B-Class Cities 6
Others 2 0.20
Part Advance 6
Proforma 2 0.20
• Turnover 500 Cr + 10
1-500 cr 8
50lac-1cr 6
10-50Lacs 4
Rating Weightage
A. Quality - 65%
B. Delivery - 35%
46 Supply Chain Management
Rating according to the Overall Vendor rating:
85-100 - Excellent
65-84 - Good
40-64 - Satisfactory
Below 40 - Poor
Vendor rating Done on The basis of Quality (65%) and Delivery time (35%)
iii. Communication
vii. Commitment
VENDOR MANAGEMENT
We can understand to the vendor management by the following
1- Quantity of vendor
2- Selection
3- Performance
a-vendor rating
b-vendor visit
4- Vendor satisfaction
5- Vendor development
VENDOR QUALITY
• Punctuality in delivery
SELECTION OF VENDOR
• Enquiry of vendor
• Enquiry of vendors goods and brand
• Vendor feedback basis on the other companies
• Selection basis on supply capability ,place ,goods quality, registration
no. etc.
PERFORMANCE OF VENDOR
• Vendor rating
• See vendor goods quality
• Procedure for vendor rating system
VENOR VISITING
I. Vendors, who are supplying A category items.
II. Vendors ,who are supplying critical items of category A and B
III. Original equipment manufactures, who are supplying spare shall
not be visited.
IV. Vendor situated in a particulars area shall be covered at a time.
VENDOR STISFACTION
• Material procured from vendors available in approved suppler.
• The purchase department elect vendors who operate stable processes at
their end and capable to supply material.
• After come vendors satisfaction by following process
I. Search of vendors
II. Quotation
III. Purchase order
IV. Goods received
V. Payment
VI. Vendors rating
VII. Vendors satisfaction
a) Variety of equipments
b) Project surplus
c) High lead time/sources of supply are to for flung
d) Modification/ improvement in design system
e) Obsolescence of machinery
f) Rate inflections (increased)
g) No proper policy to declare insurance spares (high)
h) Long duration of TG survey
i) Propriety spare
PROCUREMENT.
TO CUT SHORT THE PROCUREMENT PROCESS BY INTEGRATING MORE
OF E-PROCUREMENT.
TO ANALYZE THE DATA OF ANNUAL RATE CONTRACT TO STUDY THE
RESEARCH METHODOLOGY:
Descriptive and conclusive types of research is conducted. On the basis of the empasis laid
on the analysis of the information and the data the type of research used in descriptive
research. This kind of research is needed to provide a theoretical framework and
background on which, total knowledge and operational practices can be used and judged.
The major purpose of descriptive research is description of the state of affairs, as it exits at
present.
PRIMARY METHOD
Information gathered from Annual reports and discussions with the employees of various
departments and my project guide/mentor.
DATA ANALYSIS
Data is analyzed on the basis of available information.
PROCUREMENT PROCESS
SHORTENING OF REGISTRATION PROCESS IN VDQC
As we have gone through the long and very time taking period of New registration under
VDQC cell of purchase dept. We need to find out some ways out of the schedule in the
dept and sort this problem.
Analysis of vendors Comments must be particular, as they can help in placing the
vendor.
IMPROVEMENT IN E-PROCUREMENT
In this Purchase Dept,i came to know the working of effective Supply Chain Management.
I learnt all about Procurement from the user to the Vendor. In this long cycle Hindalco
effectively Implemented MIS using ORACLE1Ii. Requisition is Generated on MAXIMO
by the user Dept/Originator. Then requisition is forwarded to the Inventory Control Cell.
From ICC the requistion is automatically transfered Oracle to the Particular Buyer. Then
Purchase Requisition is generated and forwarded to the Enlisted Vendors with the bidding
date or response. Offer sent by vendors are given to buyer on Due date by the system or
HOD.Then buyer sent it to Originator for approval.After Offer is returned the Bidd is
prepared, and this process of Bidding actually takes around 10 days which make the whole
But as we are using MIS to control the Procurement we can link out System with the
official website www.gyanudaya.com we can officially create a safe space in which we can
Open A Tendor and a Mail /Msg will be forwrded to the Vendors/Suppliers of particular
Item code.
There will be specific Page where Each specific vendor can log in and quote there bid for
the further process. And after last date of of Bidding A comparative bid will be prepared
and forwarded to all Originators and Buyer’s respectively.
After bidding Process each buyer can go to a negotiation page where open negotiation will
take place.Which will lead to Price leadership. And we will get the Cheapest(L1), but as
per Company’s Norms we must ensure the qyuality to be(T1).
So if we make this process more Buyer and vendor friendly then we can save valuable 4-
5days in the procurement cycle.
VENDOR RATING
Vendor Rating is Done through a system based on two parameter’s,those are QUALITY &
DELIVERY PERFORMANCE.
VENDOR WAIVER
In our Study of Vendor Waiver we made out many important points,and we know the
importance of Vendor waiver as it will help in shortening the procurement cycle on a
broader sense. As it takes a lot of time in technical scrutnisation when the consignment is
recieved at the Stores. And if we find out a way out in which we give a proper waiver to
the Vendors who fall in our criterion.
3. Vendors Consistency must be checked for Last four years and New Vendors must
only waived after four years of continuous business.
5. Items like Critical, Import and Special category must not be applicable in the Vendor
Waiver.
6. Local dealers in a Reachable Radius must be Waived after Prolonged Service with
Consistency.
LIMITATION’s
While we talk about limitations, we are talking about our real time problems which
can be faced in implementation of this all distinguished new Formulated idea’s.
One of the main limitation was lack of time as i have undergone only 8 weeks of
training.
Some Critical Items are very Crucial for the Power Plants they are always
needed for production and so the Vendors are fixed and mostly they are
OEMS.
Linking huge number of data from Oracle to the Website is not very
easy.
Items like Critical, Import and Special category may not be applicable in the
Vendor Waiver.
It cannot be provided for many items which are really critical in nature and
Number of such item’s is really very high.
Vendor Waiver if not applied wisely it will become a system where local or
daily or highly consumables are bought without any technical test.
So I suggest after a prolonged study all the above plans can be implemented if the
limitations are sorted out. If these plans are put in action then the purchase Process will
become short and more cost-effective. Training Vendors and Buyer’s may make the
Bidding system easy and accessible to each one involved in the Process and will result in
more cost effective Purchases.
So we can say Hindalco ind. Ltd. Renupower division is good place for learning of
efficiency and effectives.
Website’s Referred
www.adityabirla.com
www.hindalco.com
www.google.com
www.renugyansagar.com