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Value Chain Model of A Cement Firm Lafarge Pakistan Cement Pvt. Ltd.
2. 2Company Profile Lafarge Pakistan Cement (LP) is a part of Lafarge, world leader of construction materials. The state-of-the-art plant commenced Commercial Operations in December 2006 with an annual cement production capacity of 2.5m tons, thus becoming the largest production line in Pakistan. LP is proud of its product PAKCEM which is the leader on all quality scales. PAKCEM is the first cement in Pakistan to comply with European Standards (EN 197) and Indian Standards (IS 12269) also far exceeding requirements of Pakistani Standard (PS 232). 3. Value Chain Model 4. Primary Activities 5. Inbounds In terms of input, about 1.5 tons of limestone is required to produce on ton of cement. District Chakwal is based on the limestone deposit. And Lafarge uses its own vehicles for transporting raw materials like lime stone, coal, gypsum and fly ash. The raw materials required to manufacture cement are limestone and clay. Rocks extracted from the quarry are routed to the nearby cement plant on a conveyor belt. Each quarry is subject to a rehabilitation plan adapted to its situation, including promotion of local biodiversity (animal and plant species), creation of a touristic and environmental park, residential or agricultural redevelopment, etc. The use of mobile equipment (forklifts, trucks, mechanical loaders, power shovels, etc.) is a major part of cement plant operations. 6. Operations The entire plant is operated from central control room where the process operating personnel closely monitor, the plant operation on visual display unit. The computerized process control system with field instrumentation ensures the steady and smooth operations of the plant. Flow chart of the cement production process: Mining Crushing & pre blending Raw material grinding Blending & kiln feedPre heating & kiln cooling Cement milling Cement storage packing & bulk loading 7. Outbound Lafarge Cement is one of the most important commodities in construction industry. It is a product which is very high in volume and the sensitivity too is very high. Warehousing is very important component in this business and the cost involved is not small. There is an ample scope of practicing JIT (Just In Time) in cement warehousing operations. Even if practiced in part, it could improve the bottom line of all those companies who practice it. Main tasks within a Lafarge cement plant are cement packaging as well as shipping. The finished cement is either loaded directly onto trucks or railway cars in bulk for distribution to customers or packaged in special cement packaging bags and delivered on standard pallets. Siemens supplies the electronic equipment for all processes. 8. Marketing & Sales Marketing is a comprehensive term and it includes all resources and set of activities necessary to direct and facilitate the flow of goods and services from producer to consumer in the process of distribution 1.Focus on brand name 2.Effective differentiation 3.Effective public relations 4.Price differentiation 5.Strong distribution network To identify the wants and create customer satisfaction through product innovation, product quality and customer service Lafarge takes assistance of sales representative. The marketing department of Lafarge is a comprehensive one which helps them to withstand the severe competition persisting in cement industry 9. Services In the Lafarge Cement Pakistan, Service increases the value of the entire product to the final consumer. Especially in cement like product being commodity quality doesnt matter much what matters is product as per specification and after sales services. Competitors too are very sharp in the cement industry the only way to differentiate and set a bench mark is the after sales services 10. Support Activities 11. Technology Development a) Improving quality of blended cement through innovative processing utilizing industrial by-products for improved quality performance of Lafarge Plants b) Conservation of resources through maximizing the use of low-grade limestone forcement manufacture c) Development of application oriented cements with decreased CO2 emissions d) Development of new products or discovering new methods of analysis e) Productivity research for increased efficiency in use of resources f) Recycling of wastes and research for efficient use of scarce materials g) Characterization of industrial wastes and looking into possibilities of environment friendly co-processing of wastes in cement manufacture, leading to thermal substitution and conservation of natural resources h) Development and use of cement grinding aid and accelerators for PPC & PSC for improved performance in concrete and reduced clinker factor in blended cements i) Development of cements tailored for specific market clusters and application segments j) Quality Benchmarking exercise for different market clusters of Lafarge products 12. Procurement The procurement is value addition to purchase it is something more than just purchase which just talk about what ,when and how but procurement should include all the things discussed further in the section. The procurement process in Lafarge is systematic as it is process industry every stage in the process requires approval from the authority. If material that is to be purchased is less than 200,000 the approval required from Department head if it is greater than 2,00,000 than the purchase order approval required from the Unit Head. 13. Firm Infrastructure Over 23% of the production cost of cement is power. It quickly became clear to us that if we were to run a profitable company, we need to keep power costs to the minimum. So we focused our efforts on improving efficiency at our kilns to get more output for less power. Next Lafarge set up captive power plants at a substantially lower cost than the national grid. We sourced a cheaper and higher quality coal from South Africa/Australia and better furnace oil from the Middle East. The result is that today were in a position to sell our excess power to the local state government 14. HRM Recruitment and Selection Training and Development Performance Appraisal Career Advancement Avenues Wages and Salary Structure Promotion and Transfer Motivational Measures Safety Measures 15. Analysis of Customers Value Chain 1. As the cement industry is one of the most energy and power intensive industry so Lafarge is doing the many activities for energy conservation as discussed above for which it has go towards too which no any competitor is doing. Which adds value to the final consumer? 2. Lafarge is the pioneer in thinking about Environment protection & has done many activities for Environment prevention it has fitted dusting control bag at every dust producing stage in production plant and has established green plants. 3. Lafarge has performed its corporate citizenship very well. It has built check dams and temples and many more things for citizens. 4. Lafarge is providing excellent after sales services to the customer for that it has establish all together different department of civil engineer for guiding customer in construction activity. 5. Lafarge is concerned for giant strength it assures this things to customers that their decision is worth. 16. 16
