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A
PROJECT REPORT
ON
“MATERIAL HANDLING AND LOGISTIC MANAGEMENT”
AT
BHILAI STEEL PLANT
AT BHILAI
BY
B JAGDEESH VARMA
PGDMLM
(2009-2010)
SUBMITTED TO,
UNIVERSITY OF PUNE
SINHGAD INSTITUTE OF MANAGEMENT
PUNE - 411041
1
Sinhgad Technical Education Society’s
Sinhgad Institute of Management S. No. 44/1, Off Sinhgad Road, Vadgaon (Bk), Pune – 411 041
Ph: 020 -2435 8380/2435 8355 Fax: 020-2435 4835
Mob: 9881742711
Email: [email protected]
CERTIFICATE
This is certifying that the project entitled “ Material handling And logistics
Management at Bhilai Steel Plant” is a bona-fide work done under the guidance of
Prof.Mangalgouri Deshmukh by Mr.B Jagdeesh Varma in the partial fulfillment of
requirement for the award of PGDMLM of UNIVERSITY OF PUNE at Sinhgad
Institute of Management, Pune [SIOM].
He has worked under our guidance and direction. His work is found to be
satisfactory and complete in all respect.
GUIDED BY: DIRECTOR:
Prof.Mangalgouri Deshmukh Dr. DaniePenkar
2
ACKNOWLEDGEMENT
This project bears imprint of all those who have directly or indirectly helped and
extended their kind support in completing this project at the time of making this
project. I express my sincere gratitude to all of them. I am highly obliged to Mr.
Sanjeev Nayyar DGM (MM-STORES) Bhilai Steel Plant for his assistance and
guidance. I also express my thanks to Mr. P.K.Tiwari AGM (HRD) Bhilai Steel
Plant for his valuable guidance.
I express my profound gratitude to my college Director Dr. Daniel Penkar for his
constant guidance and encouragement and my project guide Prof.Mangalgouri
Deshmukh for her very kind support and valuable guidance in completing my
project. Once again I express my gratitude to Bhilai Steel Plant For the kind co-
operation and giving the opportunity to work with members.
Finally I take this opportunity to thank all Stores associates & employees for their
encouragement & friendly co-operation.
B JAGDEESH VARMA
PGDMLM (B)
3
DECLARATION
I hereby declare that this project is the record of authentic work carried out by me
during the academic year 2009-10. This project is submitted in partial fulfillment for
the requirement for award of post graduate diploma in Material & Logistics
Management from Sinhgad Institute of Management, Pune.
The content of this report is based on the information collected by me during my
tenure at BHILAI STEEL PLANT.
B JAGDEESH VARMA
PGDMLM ‘B’
4
CONTENTS
SR NO TITLE PAGE NO
1 Executive summary 6
2 Company Profile 9
3 Objective of study 25
4 Theoretical Background 27
5 Research Methodology 39
6 Data Analysis 43
7 Findings 48
8 Suggestions 50
9 Limitations 52
10 Conclusion 54
11 Bibliography 56
12 Annexure 58
5
EXECUTIVE SUMMARY
BSP Precisely forms a part of the manufacturing industry wherein the timely delivery
to the customer is the most important thing which is to be taken into consideration this
makes the task of manufacturing department very difficult and for logistics
department also.
During the project with BSP a got an opportunity to understand the flow of
material inside and outside the company which help me to know about the intricacies
that are evident in the logistics department specially in this type of manufacturing
industry.
Now considering all difficulties there was need to developed a perfect root
plan for the transportation so that the delivery of the materiel would take as much less
time as possible. this was done in addition to the checking of efficiency of the
Machinery or transportation ways which are being use in the company, say, the
efficiency of the diesel, petrol and third party service provider as well the supply of
raw materiel inventory and storage of material needs type control where the
consumption and the criticality is higher “to make the daily require available for
production in right quantity, right quality and right time.
The work that has been done in this project has given some important clues to
the management about the areas which they thought where doing good and not only
this it has also tried to through some light on the possible changes that can be made in
order to achieve more and more efficiency.
The main purpose of selecting is to study the aspect related to supply chain
to ,improve the production line and the aspects related to logistics management and
the cost them is being managed during the working of the company.
It has become increasingly essential for each businessman in the present age of
competition to be extra vigilant towards cost per unit of the things manufactured or
services rendered by his concern. For this, continuous efforts should go on in the
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Concern to reduce cost and to make optimal utilization of material ,labor , plant ,
machinery, vehicle etc. it has made it necessary to pre plan with regard to
accosting ,to act according to it keep its proper accounting. All these activities fall
under cost accounting.
The world is moving from supply chain to business web. The move aims to cut cost
without compromising on quality and still customize offerings. Such a move requires
well developed physical and communication infrastructure. A well developed system
of transportation cost is low and the delay and the damages are minimal. A well
developed communication infrastructure and ensures that goods can be constantly
tracked. Thus not only is quality ensured but timely delivery is also maintained.
The presently study has been divided into four parts.
1. Introductory part - it gives the information about the company and
subsidiary company of SAIL.
2. Objective part- it gives information about the company’s objectives and
corporate plan.
3. Research Methodology- it gives the idea about the format on whose basis
the whole project is done.
4. Conclusion and Recommendation – this part shows my point of views for
logistics system working inside the plant as well as working outside the
plant. It needs to be competitive now and not tomorrow. Tomorrow, there
would be no business. The answered perhaps lies within the business
community. These problems have existed for quite some time now and
different business has tackled them in different ways.
7
8
COMPANY PROFILE
BHILAI STEEL PLANT, BHILAI
(An integrated plant of SAIL)
Steel authority of India Limited
To be a respected world class corporation and leader in India steel business in quality,
productivity, profitability, and customer satisfaction.
Steel Authority of India Limited (SAIL) is the leading steel-making company in India.
It is a fully integrated iron and steel maker, producing both basic and special steels for
domestic construction, engineering, power, railway, automotive and defense
industries and for sale in export markets.
Ranked amongst the top ten public sector companies in India in terms of turnover,
SAIL manufactures and sells a broad range of steel products, including hot and cold
rolled sheets and coils, galvanized sheets, electrical sheets, structural, railway
products, plates, bars and rods, stainless steel and other alloy steels. SAIL produces
iron and steel at five integrated plants and three special steel plants, located
principally in the eastern and central regions of India and situated close to domestic
9
Sources of raw materials, including the Company’s iron ore, limestone and dolomite
mines. The company has the distinction of being India’s largest producer of Iron ore
and having the country’s second largest mines network. This gives SAIL a
competitive edge in term of captive availability of iron ore, limestone, and dolomite
which are inputs for steel making.
Sail’s wide ranges of long and flat steel products are much in demand in the domestic
as well as the international market. This vital responsibility is carried out by Sail’s
own Central Marketing Organization (CMO) and the International Trade Division.
CMO encompasses a wide network of 34 branch offices and 54 stockyards located in
major cities and towns throughout India. With technical and managerial expertise and
know-how in steel making gained over four decades, Sail’s Consultancy Division
(SAILCON) at New Delhi offers services and consultancy to clients world-wide.
SAIL has a well-equipped Research and Development Centre for Iron and Steel
(RDCIS) at Ranchi which helps to produce quality steel and develop new
technologies for steel industry. Besides, SAIL has its own in-house Centre for
Engineering and Technology (CET), Management Training Institute (MTI) and Safety
Organization at Ranchi. Our captive mines are under the control of the Raw Material
Division in Kolkata. The Environment Management Division and Growth Division of
SAIL operate from their headquarters in Kolkata.
Almost all our plants and major units are ISO Certified.
Major Units-
Integrated Steel Plants
1. Bhilai Steel Plant (BSP) in Chhattisgarh
2. Durgapur Steel Plant (DSP) in West Bengal
3. Rourkela Steel Plant (RSP) in Orissa
4. Bokaro Steel Plant (BSL) in Jharkhand
5. IISCO Steel Plant (ISP) in west Bengal
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Special Steel Plants
1. Alloy Steel Plants (ASP) in West Bengal
2. Salem Steel Plant (SSP) in Tamil Nadu
3. Visvesvaraya Iron and Steel Plant (VISL) in Karnataka
4. Maharashtra Elektrosmelt Limited (MEL) in Maharashtra
Joint Ventures
SAIL has promoted joint ventures in different areas ranging from power plants to e-
commerce.
1.NTPC SAIL Power Company Pvt.Ltd
A 50:50 joint venture between Steel Authority of India Ltd. (SAIL) and National
Thermal Power Corporation Ltd. (NTPC Ltd.), it manages the captive power plants at
Rourkela, Durgapur and Bhilai with a combined capacity of 314 (MW).
2. Bokaro Power Supply Company Pvt. Limited
This 50:50 joint venture between SAIL and the Damoder Valley Corporation formed
in January 2002 is managing the 302-MW power generation and 1880 tones per hour
steam generation facilities at Bokaro Steel Plant.
3. Mjunction Services Limited
A joint venture between SAIL and Tata Steel on 50:50 basis, this company promotes
ecommerce activities in Steel and related areas.
4.SAIL-Bansal Service Center Ltd.
SAIL has formed a joint venture with BMW industries Ltd. On 40:60 basis to
promote a service centre at Bokaro with the objective of adding value to steel.
11
5.Bhilai JP Cement Ltd.
SAIL has also incorporated a joint venture company with M/s Jaiprakash Associates
Ltd to set up a 2.2 MT cement plant at Bhilai.
6. SAIL has signed an MOU with Manganese ore India Ltd (MOIL) to set up a joint
venture company to produce ferromanganese and silico-mangenese at Bhilai.
Ownership and Management
The Government of India owns about 86% of SAIL’s equity and retains voting
control of the Company. However, SAIL, by virtue of its ‘Navratna’ status, enjoys
significant operational and financial autonomy.
SAIL’s Background and History
A Rich Heritage the precursor SAIL traces its origin to the formative years of an
emerging nation-India. After independence the builders of modern India worked with
a vision-to lay the infrastructure for rapid industrialization of the country. The steel
sector was to propel the economic growth. The President of India held the shares of
the company on behalf of the people of India.
SAIL Today
SAIL today is one of the largest industrial entities in India. Its strength has been the
diversified range of quality steel products catering to the domestic, as well as the
export markets and a large pool of technical and professional expertise.
Today, the accent in SAIL is to continuously adapt to the competitive business
environment and excel as a business organization, both within and outside India.
12
SAIL- Into the Future
SAIL’s Growth Plan 2010
Much has happened ever since SAIL’s Corporate Plan was announced in 2004.
Investment plans for the three specialty steel plants have been firmed up. Company
has grown in size with the amalgamation of IISCO (now renamed as IISCO Steel
Plant). Production targets have revised from 19 million tones (MT) of steel to about
24 MT. Estimated investments has increased from Rs 25,000 crore to around Rs
40,000 crore. And the time period has been squeezed by two years, bringing the
targeted year of completion of major projects from 2010 to 2012.
STEEL AUTHORITY OF INDIA LTD.
o Steel plants
o Subsidiaries
o Other units
o Indian iron & steel company limited
o Bhilai steel plant
o Bokaro steel plant
o Durgapur steel plant
o Rourkelea steel plant
o Research & development centre for iron & steel
o Dentre for engineering &technology
o Environment management division
o Dentral coal supply organization
o Central marketing organization
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o Management training institute
o Sail consultancy division
o Sail safety organization
o Raw materials division
o Growth division
o Alloy steel plant
o Salem steel plant
o Vishvesvaraya iron & steel plant
o Special steel plant
STORES IN BSP
There are 5 different type of stores in BSP. They are:
1 CENTRAL PLANT STORES
2 REFACTORY STORES
3 DISPOSAL AND BULK STORES
4 BORIA STORES
5 CENTRAL MEDICAL STORES
1. CENTRAL PLANT STORE S
The following materials are stored here:-
- Ferro-vanadium
- Ferro-beron
- Ferro-titanium
- Alum-powder
14
- Ferro-phosphorous
- Ferro-manganese
These raw materials are purchased in bulk and the stock is maintained for three months in advance. The materials are provided as per the requirement in different departments of plant. The above materials are purchased from various parts of world.
2 REFRACTORY STORES :-
The refractory store stored the different type of bricks which are used in many places like in blast furnace, coke oven batteries. Following types of bricks are stored in these stores:-
SMS-1 BRICKS
INSULATION BRICKS
MICA CARBON BRICKS
PROMANCE BASIC BRICKS
3 DISPOSALS AND BULK STORES:-
In this store they stored the waste or scrap materials of plant and they also store unused vehicle which are not in working process. The items are sale through auction.
4 BORIA STORES:-
It is very big store of BHILAI STEEL PLANT which stores the following items:-
OIL AND LUBRICANTS
SPARES PARTS
ALL ELECTRICAL PARTS
PAINTS etc
And these materials are transferred to different department of plant according to
their uses or demands.
15
5 CENTRAL MEDICAL STORES:-
The Medical depot of SAIL is established in BOKARO STEEL PLANT and all medicine are purchased in bulk and stored here. From here all medicines are distributed to different plants of SAIL.
The Central Medical Store is situated in
Pandit Jawaharlal Nehru hospital, which is run by SAIL. The medicines are stored
in the hospital and are issued to patients as well as the employees of BSP. The
BSP medical stores also supply medicines to all the coal mines in Chattisgarh
which are run by sail.
ORGANISATION STRUCTURE BHILAI STEEL PLANT-Bhilai Steel Plant
Seven- time winner of Prime Minister’s Trophy For best Integrated Steel Plant in the
country, Bhilai Steel Plant (BSP) is India’s sole producer of rails and heavy steel
plates and major producer of structural. The Plant is the sole supplier of the country’s
longest rail tracks of 260 meters. With an annual production capacity of 3.153 MT of
saleable steel, the plant also specializes in other products such as wire rods and
merchant products.
Since BSP is accredited with ISO 9001:2000 Quality Management System Standard,
all saleable products of Bhilai Steel Plant come under the ISO umbrella.
At Bhilai ISO:14001 has been awarded for Environment Management System in the
Plant, Township and Dalli mines and it is the only steel plant to get certification in all
these areas.
The plant is accredited with SA: 8000 certification for social accountability and the
OHSAS-18001 certification for Occupational health and safety. These internationally
recognized certifications add value to Bhilai’s products and helps create a place
among the best organizations in the industry.
16
THE BEGINNING
This Leadership of free, India took a visionary decision to set up integrated steel
plants under the exclusive responsibility of the state owing to the massive investment
needed for creating additional Steel capacity, which private industry would not be
able to mobilize and the cardinal role steel would play in rapid economic
advancement as a major step towards this goal, government of INDIA and USSR
entered into an agreement signed at New Delhi on 2nd march 1955, for the
establishment of an integrated Iron and Steel works at Bhilai with an Initial capacity
of one million tones of ingot steel.
The main consideration which responsible for setting up the plant at Bhilai,
was the availability of Iron ore Delhi-Rajhara at a distance of about 90 km from the
site limestone from Nandini at 22 km and dolomite at HIRRI at 41 km. The plant was
commissioned with the inauguration of the first blast furnace by the then president of
India. Dr. Rajendra Prasad on 4th February 1959.
The plant was soon expanded to 2.5 Million tones in September 1967 and in further
expansion to 4Mt was completed in 1988. The main focus in the 4 MT stage was on
the continuous casting unit and the plate mill, a new technology in steel casting and
shaping for any integrated steel plant to India during those times.
BSP’s ORGANIZATIONAL OBJECTIVES
To encage customer satisfaction through:-
Improvement in productivity and product quality.
Skill enhancement of our people by competence commitment.
Production as per customer requirements.
17
SEVEN C’s OF “SAIL”
Consistent quality
Committed delivery
Customized products
Contemporary products
Competitive price
Complaint settlement
Culture of customer service
18
19
PRODUCT PROFILE
Bhilai Steel Plant (BSP) has mainly three types of products:-
1. Semis product
2. Long products
3. Flat products
MARKET SHARE OF BSP’s PRODUCT RANGE:
SAIL BSP
BARS &RODS 8.70% 5.90%
STRUCTURALS 17.90% 13.90%
RAILWAY MATERIALS 89.30% 85.90%
TOTEL LONG PRODUCT 14.80% 11.80%
PLATES 52.90% 23.90%
TOTEL FINISHED STEEL 22.40% 07.70%
TOTEL SEMIS 13.00% 06.10%
TOTEL SALEBLE STEEL 20.00% 07.30%
QUALITY POLICY
Attending market leadership through enhancing customer satisfaction.
Achieving continual improvement in productivity, quality and salability of our
products.
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Quality Management System
ISO 9001 SEAL OF QUALITY
All major production units and earth and basic marketable products in Bhilai steel
plant are covered under ISO 9001:2000 quality management system. This includes
manufacture of blast furnace coke and coal chemicals, production of hot metal and pig
iron, steel making through twin hearth and basic oxygen processes manufacture of
steel stabs and blooms by continuous casting, and production of hot rolled steel
blooms, billets and rails, structural, plates, steel sections and wire rods.
Bhilai’s production comes with a complete assurance of quality. Right from
selection of input material for steelmaking. The process parameters are kept under
close control. Intensive checking of all quality parameters continues throughout the
subsequent operations of casting, reheating and rolling. Express analysis with the help
of sophisticated, direct-reading spectrograph and gas analyzer ensures a narrow range
of chemical composition. Intensive metallographic investigation with modern
instruments like scanning electron microscope, image analyzer and micro hardness
tester is carried out to assess the quality of the product image
Human resource development
Training need assessment is a continuing process,
About 19000 employees are imparted training every year.
The focus is on need-based innovative programs, such as Action collaboration
Multi-Sling
HRD interventions
21
SAIL Chairman
Mr. S K Roongta is the chairman of steel authority of India ltd. The largest steel
producing company in the country and one of the largest in the world . SAIL is one of
the world-class steel \makers amongst major steel producer companies in the world as
assessed by ‘World Steel Dynamics’ for the year 2006
SAIL ranks amongst the biggest corporate in India with a turnover of over Rs 40000
cr. and a workforce of around 1.31 lakh.
SAIL is the first metal company to cross ts, one trilling of market capitalization. An
engineering graduate from BITS, Pilani and a post-graduate in International Trade
from the Indian Institute of FOREIGN Trade (IIFT), New Delhi . Mr. Roongta
started his career in 1972 as a marketing executive in SAIL, and held several vital
Position in the marketing division
Acknowledged for his astute knowledge of the steel industry, analytical skills and
strategic thinking, he was elevated to the SAIL Board as Director (commercial) in
2004 and spearheaded various key marketing initiatives for the company.
As Director (personnel) of SAIL he also headed strategic functions like HR. Business
Planning and Raw Materials. He was at the forefront for up gradation of HR policies,
and led initiatives for strategic alliances for meeting critical raw material needs.
22
Scope of Research
Logistics management
The term “logistics” is derived from military organization and it was in
use in the days of Louis xiv of France.
It was even felt then that the effectiveness of military organization did
not merely depend on the weapons, fighting skills and the fighting spirit
of the soldiers.
It was also effected by the efficiency of transportation and supply of
ammunition and food.
Logistics was the term to mean for this military support (i.e.
transportation and supply of food material and ammunition)
Military successes of that time were attributed to logistics..
Every organization, be it in the manufacturing or non – manufacturing
sector, requires a tool/system for the integration and co-ordination of
different functional activities to smoothen the flow at minimum cost.
Logistics management has been evolved to achieve such an integration.
Logistics management has also been known by various other names
such as total physical distribution, complete flow management, and
supply management.
Another term which is being widely used in USA and is gaining
ground in other countries is integrated logistics management.
Logistics management encompasses all materials flows management,
From the flow of purchased materials into works
Materials planning of raw materials, components and other products,
Transport of materials from suppliers to works
Receiving and inspection
Storage of materials.
Material flow through manufacturing processes i.e. Material issues and
material handling.
Material flow to customer’s i.e. physical distribution
23
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OBJECTIVE OF STUDY
For Just in time delivery of cargo at destination, it is important that the 3 PL service
providers, freight forwarders, shipping lines & the consignor all work hand in hand.
Logistics Management is an all encompassing field in which both international &
local logistics have a level playing field.
The study involved critical analysis of all modes of transport vis-à-vis Bhilai Steel
Plant (with emphasis on road, transport) Entering into long term contracts with 2-3
freight agents, micro level analysis of bottle necks faced by Bhilai Steel Plant in terms
of matching stock level with just in time delivery, devising internal system for the
organization to keep track of critical shpts etc Were the main issues within the
preview of study.
The study involved cost control & choosing the right mode of transportation to deliver the right cargo at the right time at the right place, economically on a long term basis, taking into account all external factors. It was a critical analysis of overall performance of Logistics service providers (including developing new ones) to enhance the import performance of Bhilai Steel Plant. The study also deals upon entering into contracts with local logistics service providers on a long term basis, vis- a-vis imports & exports.
25
26
Theoretical Background
Today's business climate has rapidly changed and has become more competitive as
ever in nature. Businesses now not only need to operate at a lower cost to compete, it
must also develop its own core competencies to distinguish itself from competitors
and stand out in the market. In creating the competitive edge, companies need to
divert its resources to focus on what they do best and outsource the process and task
that is not important to the overall objective of the company.
Material handling and Logistics Management has allowed business nowadays to not
just have productivity advantage alone but also on value advantage. Product life
cycles also can be improved through effective use of Supply Chain Management.
Value advantage also changes the norm of traditional offerings that is 'one-size-fits-
all.' Through Material handling and Logistics management, the more accepted
offerings by the industry to the consumers would be a variety of products catered to
different market segments and customers preferences.
Supply Chain Synchronization is being steadily recognized as the most important
aspect in developing higher levels of Supply Chain competitive advantage. At the
very most on set it is important to understand just what Supply Chain Synchronization
is and how it is implemented.
There are eight different aspects of the supply chain that can be effectively
synchronized to achieve the highest level of true supply chain synchronization and
benefits. These eight dimensions, as they are popularly referred to, are a compendium
of various individual supply chain strategies which are to be now combined on a
multi-company basis for greatest success and effect.
Of all the aspects of Supply Chain Synchronization it is now evident that people or
cultural issues surrounding Supply Chain Synchronization are hugely important.
People communication, co-ordination & education is the first dimension requiring
27
synchronization as a key foundation for the success of the supply chain
synchronization process. Is spite of rapid progress in the latest materials handling, or
logistics systems it is still a people’s business, and only people can make things
happen. Even the best supply chain venture would be collapse in the absence of
motivated, interested and educated people. People become even more critical because
of the cross company, boundary less nature of these synchronization projects.
Once in place, this type of direct communication must be maintained throughout the process in order to make the process of gathering the needed information easier. This leads to the development of the detailed linkages required between the employees of participating firms to ensure success. Direct facilitation between the parties needs to be carried out to ensure that product, ordering and systems information are correctly updated to support the co-ordinate scheduling. In the end, it is people whose persistent and earnest efforts that actually “switches on the supply chain process, with the least number if expectations and interrupts. Without effective synchronization of people failure lurks at every link and success stops at meritocracy.
LOGISTICS MANAGEMENT
Logistics – The Concept
Historically, logistic has primarily been a military activity, the purpose of
which was to provide food, cloth, and supplies and equipment to troops in the
field as well as to transport the troops themselves.
The Gulf war of 1991 for the first time in the history bought the realities of
war into war drawing rooms. In the preparation for the war we saw the necessity if
moving huge amount of men and materials across vast distances in a short period
of time, half a million people and over half a million tons of material and supplies
were airlifted 12000 kames wit a further 2.3 million tones of equipment moved by
sea- all this achieved in a matter of month.
28
In the Second World War logistics also played a major role. The allied
forces, invasion of Europe was highly skilled exercise in logistics, as was the
defeat of Rommel is on the desert. Rommel himself once said that fighting proper
the battle is won by or lost by quartermasters.
In the past, however, top management in most corporate offices did not
always understand the importance and competitive impact of integrated logistic.
More recently, widespread acceptance of operating, philosophies such as Just-In-
Time, Total Quality Management, and Customer Responsive have led to greater
emphasis of the role of logistics in achieving the corporate mission.
Logistics as the discipline not restricted to the war rooms of the general nor
to corporate boardrooms. It is a science which is quite useful to achieve the
maximum utilization of available resources. The pressure of burgling population
and the associated nightmares of providing for them is another case in point for
them is another case in point for the emergence of logistic management in the
public arena.
Logistics Cost
The important element of logistics cost are:
1. Product inventory at source
2. 2. Pipeline inventory
3. Product inventory at warehousing
4. Transit losses/insurance
5. Storage losses/insurance
6. Handling and warehouse operations
7. Packaging
8. Transportation
9. Customers Shopping
29
A rough estimate of the above costs at nation at level was attempted by the RITES
report on commodity flows for the total transport systems study of the planning
commission, govt. of India.
The total logistics cost as estimated above reflects a total of Rs 25,000cr at 1986-87
prices, forming nearly 10% of the GDP for that year.
A recent (2004-05) study by the ministry of foods and civil supplies estimated the
avoidable losses in transport, storage, processing and handling at 10% for food grains
and at 30 % for fruits and vegetables.
The work of logistics
Transportation:-
• Given a facility network and information capability, transportation is the
operational area of logistics that geographically positions inventory.
• Because of its fundamental importance and visible cost, transportation
has received considerable managerial attention over the years.
Organized Sector 1987 1994
Transportation 38% 45%
Inventory 28% 25%
Warehousing & Transportation 20% 30%
Losses 14% 6%
Total Logistics Cost as per a % of GDP 10% 12%
GDP Rs2,50,000 8,00,000
30
• Almost all enterprises, big or small, have manages responsible for
transportation.
• Transportation requirements can be accomplished in three basic ways. First of
all, a private fleet of equipment may be operated
• Second, contracts may be arranged with transport specialists.
• Third, an enterprise may engage the services of a wide variety of
carriers that provide different transportation services on an individual
shipment basis.
• These three forms of transport are typically referred to as private,
contract, and common carriage.
• From the logistical system viewpoint, three factors are fundamental to
transportation performance: cost, speed, and consistency.
• Cost ; the cost of transport is the payment for movement between two
geographical locations and expenses related to administration and
maintaining in – transit inventory.
• Logistical systems should be designed to utilize transportation that
minimizes total system cost.
• This means that the least expensive transportation does not always result
in the lowest total cost of movement.
• Speed ; speed of transportation is the time required to complete a
specific movement.
• Speed and cost of transportation are related in two ways.
• First, transport firms capable of providing faster service charge higher
rates.
• Second, the faster the transportation service, the shorter the time interval
during which inventory is in transit and unavailable.
31
• Thus, a critical aspect of selecting the most desirable method of
transportation is to balance speed and the cost of service.
• Consistency of transportation refers to variations in time required to
perform a specific movement over a number of shipments.
• Consistency is a reflection of the dependability of transportation.
• Any inconsistency in transportation time, once two days and next
delivery taking six days, will affect the safety stock to take care of this
type of variances.
• It is important to understand that the quality of transportation
performance is critical to time sensitive operations.
• Speed and consistency combine to create the quality aspect of
transportation
• In the design of a logistical system, a delicate balance must be
maintained between transportation cost and quality of service .
• In some circumstances low cost, slow transportation may be satisfactory,
in another situation faster service may be essential to achieve
operational goals.
• Finding and managing the desired transportation mix is a primary
responsibility of logistics.
• Three aspects of transportation are to kept in mind.
First, facility selection establishes a network structure that creates the
framework of transportation requirements and simultaneously limits alternatives.
32
Logistics Management in BSP :-
Logistics are of two types.
Inbound logistics Out bound logistics
Inbound Logistics :- The inbound logistics is basically inward flow of the materials
from outside environment to the company. In the Bhilai Steel Plant the inbound logistics is carried out in
following manner. At the first, the raw material is purchased from the overseas market
(e.g. Coal from Australia, Flurodium from Brazil) and then sent to the company stores through inbound logistics sources.
The raw material purchased is then loaded on the ship in respective country and then is shipped to the Vishakhapattanam port in India.
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Then this raw material is unloaded on the port and after the customs clearance, this raw material is loaded in the truck.
These trucks carry raw material up to the railway line from where, it’s carried up to the Bhilai Steel Plant.
Outbound Logistics:- The outbound logistics is the function of the logistics system in
which the Finished Goods are transported from the Factory to the customer.
The finished goods products which are manufactured in the company are Steel Rods , Rail Mills etc.
These are extremely heavy products which require specific material handling equipments.
The equipments which are used to handle such a heavy products are Cranes, Dumpers, Trucks, Pulley Systems and Overhanging Cranes.
Using these Material Handling Equipments, these products are loaded on the truck or the trains depending on the location where it is to be transported.
For the overseas customers ,it’s transported to the Vishakhapattanam port and then shipped.
For Indian customers, it’s transported mainly through the Train and in some cases through Road Transport via Trucks.
Role of Transportation in Logistics
Peter Ducker’s comment on distribution as the ‘last dark continent’ for business to
conquer resulted in an important management function that has multiple strides
ranging from integrated logistics management to supply chain management.
It is virtually inconceivable in today’s economy for a firm to function without the aid
of the transportation. Transportation is an essential and a major sub-function of
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logistics that creates time and place utility in goods. In fact, the backbone of the entire
supply chain is the transportation management that makes it possible to achieve the
seven R’s
The Right Product in
The Right Quantity and
The Right Condition, at
The Right Place, at
The Right Time, for
The Right Customer at
The Right Cost.
Different Modes of Transportation:- Railways Shipping Airways Roadways Pipelines Multimodal Transportation.
The mode of transportation for a product must be weighed against inventory decisions. Quick delivery may mean higher transportation costs and higher inventory cost higher inventories. Uncertain delivery also requires higher inventory
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RESERCH METHODOLOGY
Definition:-
Research methodology is a way to systematically solve the research problem. It may
be understood as a science of studying how research is done scientifically. Why a
research study has been undertaken, how the research problem has been defined, in
what way and why the hypothesis has been formulated, and what data have been
collected and what particular method has been adopted, why particular technique of
analyzing data has been used and a host of similar other questions are usually
answered when we talk of research methodology concerning a research problem or
study.
Research design:-
A research design serves as a bridge between what has been established (the research
objectives) and what is to be done, in the conduct of the study. In this project the
research done is of conclusive nature. Conclusive research provides information that
helps in making a rational decision.
Descriptive design was choose to measure the satisfaction level of production on the
basis of different parameters such as working of machines, quality, skilled workers,
Technology, Intensive to workers etc. This design ensured complete clarity and
accuracy it also insured minimum bias in collection of data and reduced error in data
interpretation. Statically method was followed in this research because the data was
descriptive nature and is also enabled accurate generalization.
Introduction:-
The purpose of this project is to find out the production procedure and the product
line of the company. For the company is essential to know whether the production of
steel is satisfied or not or production of the steel is according to the goals of the
company.
Statement of the problem:-
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The purpose of this project is to get the actual idea about the material handling and
logistics of steel what type of problem they faced in handling raw materials, work in
process and finished goods the purpose of this project is also to find out the logistics
involved in transformation of finished goods and raw materials to right person at right
Primary Data
time in right quality. This was the basically problem that was discovered to conduct
this project i.e. “material handling and logistic management”
SOURCES OF DATA
Prime data are those which are collected a fresh and for the first time, and thus happen
to be original in character it was collected through following ways
1) From Store Dept.
2) From Purchase Dept.
3) From Production Dept.
Secondary data
Secondary data are those which have already been collected by someone else and
which have already been passed through the statically process the data were collected
in the form in company profile and produce profile through following ways
1) Internet
2) Newspapers
3) Journals
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RESEARCH INSTRUMENTS:
Industrial visit were used as it helped to prepare this project. Collecting data through
various stores of plant was time saving and cost factor was also reduced. The
production department and the newspapers were also helpful in collecting data.
SAMPLE DESCRIPTION:
SAMPLE DESIGN
The universe: - This consist the workers, employees and the production department of
stores.
SAMPLE METHOD:-
The sampling method used for the selection of the workers and employees is expert
judgmental sampling
SAMPLE SIZE
A total of 15 respondents were interviewed and it’s also including industrial visits.
METHOD OF COLLECTION:-
Data was collected through questionnaire, stores and from production department.
Questions were of both types open ended and close ended. In these Questionnaire was
not self administered, I asked questions from various people in the store unit and then
I noted all the answers of questions which helped me in accomplishing my project.
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DATA ANALYSIS
BHILAI STEEL PLANT
PERFORMANCE HIGHLIGHTS: 2008 - 09
During 2008-09, after the year of Golden Jubilee, Bhilai Steel Plant
continued to forge ahead in the areas of production, productivity and
techno-economics. With expansion activities picking up pace for
enhancement of production capacities, BSP took up various projects and
chalked out an ambitious road map (production plan). Special emphasis was
also given to the production of Special Steel/ Value added products.
With depleting Iron Ore reserves & constraints in Coal supplies
throughout the year, Coke Oven pushing had to be regulated resulting in
reduced production of Hot Metal. For optimally utilizing the available Hot
Metal, production at SMS-2 was maximized to sustain higher production of
Rails & Plates. The semis component in Saleable Steel was restricted in
order to sustain production in finishing mills.
Against all odds, the Plant continued to operate well above the rated
capacity in all major areas of production and achieved a capacity utilization
of 112.4 % in Hot Metal, 129.1 % in Crude Steel and 140.8 % in Saleable
Steel. This has resulted in a growth of 9.4%, 5.3% and 4.9% respectively
over the last year. In response to increasing market demand all the four
finishing mills viz. RSM, MM, WRM & PM operated well above the rated
capacity and achieved best ever yearly production for the first time since
inception. As regard of Saleable Steel at, the plant operated above the rated
capacity for the fifteenth year in succession and notched a production of
4.43 MT.
The upward trend in production was maintained throughout and several
new records were established. Bhilai Steel Plant registered substantial
growth and achieved best yearly production of Sinter from Sintering Plant-
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3, Total Sinter, Hot Metal, Cast Steel at SMS-2, Cast Slabs, Cast Blooms,
Total Crude Steel, Rails, Total Rails & Structural’s, Merchant Products,
Wire rods, Plates, Total Finished Steel and Total Saleable Steel. Growth was also registered in the areas of production of Limestone from Nandini, Iron Ore from Rajhara, BF Coke, Sinter from Sintering Plant 2, Ingot Steel at SMS-1, Ingots rolled at BBM and Billets from CBM. Several Strategies were adopted & new initiatives were taken up for
enhancing performance and to provide a cutting edge to the organization
during the year, which paved the path for continuous growth and helped in
maximizing our share in the domestic steel market. Some of the initiatives
were:
Optimum utilization of available resources likes operating all
seven Blast Furnaces and three Converters with 3 Casters simultaneously
with the fourth Caster being operated on overlapping sequence.
Maintaining average pushing level at 718 equivalent ovens per
day throughout.
Higher Finished Steel component in Saleable Steel at 81.4 %
registering a growth of 6.3 % over last year.
Greater thrust on value addition of products like gradual switches
over to higher grade, i.e. Fe-500 for both TMT Bars & Rods.
Enhancing customer satisfaction by on-line invoicing of
deliveries by road.
Rolling of different TMT profiles simultaneously from different
strands at WRM.
Charging of Nut Coke with Iron Ore lumps in BF 3 & 4.
Use of Chiller in ASU-3 of OP-2 to increase Oxygen Production.
Maximize Utilization of Grinding facilities for increasing CDI
injection in BF’s.
100 % Utilization of LD slag.
Rolling of 100 % TMT in Fe500 grade in Merchant Mill.
Restarting of Tar Injection in Blast Furnace.
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Record production of 7.23 MT of Total Sinter, surpassing the previous best
of 6.93 MT in ‘05-06 and registering a growth of 8.8 % over previous year.
Best ever Techno-economic parameters achieved:
Highest ever Labor Productivity at 289.1 T/Man/Year against the previous best of 285 T/Man/Year in ‘05-06.
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• Which mode of transportation is used for delivering and receiving
goods?
Transportation Distribution
Mode Of Transport Percentage
Rail 40
Road 35
Water 15
Air 10
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Inventory Stored in the Stores:-
Type Of The Store % inventory in the
store in financial terms
Central Plant Store 55
Refractory Store 15
Disposal Store 7
Boria Store 21
Central Medical Store 2
Which software you use for logistical process and supply chain management?
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SOFTWARE PERCENTAGE
SAP 90
ORACLE 10
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FINDINGS
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Findings of the Study will be produced after the data analysis. It includes proper
application and use of various techniques to optimize Overall SCM Process. Bhilai
context of steel plant (BSP) is unit of the Authority of India limited (sail). Bhilai steel
plant is a pulsating in the glorious India. In last 10 years the company has grown
every year and today is one of the biggest producer and one of the leading exporter of
the steel
They generally use huge amount of paper work not only this the inspection of each and every item that is being imported goes through the huge period of inspection which further is very time consuming and hectic schedule.
Handling of the various documents and maintaining files for each and every cargo is really very difficult and they generally maintain the records manually but the printed data is also used sometimes.
All the export is carried out on the legal basis which is one of the reason for higher
exports of the company. Introduction of the latest machineries and continuous
improvement in the existing products are also the key factor in growth of the
company.
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SUGGESTIONS
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The company should take some effort to make effective transportation arrangements
because it affects producing pricing, on-time delivery performance and customer
satisfaction.
The company should centralized inventory in one place and use fast transportation to
fulfill orders. It reduces warehousing and inventory duplication cost.
Increase the manpower in the department.
The company should shorten the order – to- payment cycle i.e. elapsed time between
order’s receipt, delivery and payment.
The company should manage effective logistics information management because it
helps to link channel partners and share information to make better logistics decision.
Information flows such as customers order, billing, inventories , label and customer
data are closely link with channel performance
Some suggestions to improve:-
The company should centralized inventory in one place and use fast
transportation to fulfill orders. It reduce warehousing and inventory
duplication cost
Increase the manpower in the department
The company should shorten the order-to-payment cycle i.e. elapsed time
between order’s receipt, delivery and payment.
The company should manage effective logistic information management
because it helps to link channel partners and share information to make better
logistic decisions. Information flows such as customer’s orders, billing,
inventories labels and customer data are closely linked with channel
performance.
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LIMITATIONS
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My Study and analysis of “Material handling and Logistics management” in Bhilai
Steel Plant, Bhilai is confined and also did not touch any other aspect of the
operations. The conclusion drawn from the study is solely based on the information
provided by the company’s executives and dealers engaged in process of physical
distribution of company’s product.
The project work is limited to Logistics process only.
Delay in container movement to CFS/Container yards.
Currency adjustment factor, ISPS surcharge, fuel surcharge.
Scarcity of containers, material handling equipments, distant ports.
Semantic distortions in communication between the parties involved in
supply chain management.
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CONCLUSION
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After understanding the ground realities of foreign trade and International trade, it is
crystal clear that the services is a Major factor and should be kept in the mind. Bhilai
steel plant is a very big model of import-export where they use the most reliable
logistics to ensure good results. Here we got the very important knowledge about the
Respective field. We got to know the necessity of safety Equipments in such type of
plant’s so that the no harm Environment can be created.
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BIBLIOGRAPHY
SAIL ANNUAL JOURNAL 2007-08, 08-09
ANNUAL REPORT: BSP 2007-08, 08-09
WEB SITE OF SAIL www.sail.co.in
WEB SITE OF BSP www.bsp.com
OTHER SITES: www.wikipedia.com
MAGAZINES- SAIL NEWS (monthly)
Book by L.C.JHAMB’s “material and logistics management”
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Annexure
During the one month project in Bhilai Steel Plant, the common questions asked during the research were as follows:-
How do you carry out your material handling and Logistics of raw material and finished goods?
Which software you use for logistical process and supply chain management?
Which mode of transportation is used for delivering and receiving goods?
Types of stores and the product they store?
Which techniques are used for inventory control?
Which material handling equipments do you use?
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