Cement is a vital building material that demands well-organised distribution and timely delivery. Logistics forms a critical component of the input cost for cement, accounting for nearly 35 per cent of the total cost of cement sales. Nand Kumar elaborates on how technology was applied to reduce this cost.
ACC uses rail transportation as it is faster and cost efficient. It also relies on road transport to supply cement from its plant to nearby cities and remote towns in India. ACC uses 58 per cent road network and 42 per cent railways.
The company annually handles about 36 million tonnes (mt) of goods, including 12 mt of raw material at its 17 plants in 15 remote locations and to 700 godowns.
In 2012, a new initiative was undertaken by ACC to enhance its logistics and supply chain management. Considering the huge costs involved in road transport as well as time and asset efficiency, ACC has embarked on a new, automated and technologically advanced journey in the field of road logistics.
Technologies like RFID and GPS helped ACC to track and monitor vehicles both within and outside the plant. This in turn contributed in minimising in-plant loading time and in tracking vehicles in transit to end-consumer destinations, thus cutting down delays, enhancing vehicle turnarounds, and bettering service levels up to 40-50 per cent. Fixed costs of assets (trucks) also decreased as the same number of trucks now shipped more cement in lesser time.
Apart from that, the technology ensured 100 per cent safety on roads as the voice enabled GPS installed alerted the driver on possible risks ahead. Within the same amount of fuel, ACC now shipped more cement covering more distance than before, thus cutting its carbon footprint.
Case Study
Modernisation of Tikaria plant
The Tikaria plant of ACC has put in place a novel method to shorten the long queue of trucks lined up for loading at its plant gate. The logistics model not only helped in speeding up the entire process of loading, but it also eliminated the hassles of paperwork.
Often a typical cement plant will have a long queue of transport trucks waiting outside the facility for their turn to load up. Large number of heavy vehicles stalled near the plant increases the risks of possible road accidents and traffic jams. Besides this, there is the matter of the unrestrained movement of truck drivers and helpers around the plant who are busy with their paperwork, etc.
Sensing the need
Technology support to improve operational efficiency and OH&S was clearly required. Realising the need of the hour, the company chalked out a plan to tackle the issue; it had clear objectives of improving safety norms, business sustainability, reduction of congestion inside the plant and at the plant gate and a reduction of SAP process cycle time. This could be achieved by improving traffic visibility of the logistics managers to help in faster decision making.
With these objectives defined clearly, ACC invested time and energy in strengthening its logistics management system and named the project as ACC Speed. The system employed RFID UHF (radio-frequency identification devices with ultra high frequency communication channel) readers and tags, customised software with complete integration with SAP at all key SAP transaction stages. SPEED@ACC was first launched at Tikaria Cement works in Uttar Pradesh. With a successful Go-Live in March? 12, the project has since then been successfully replicated to two more locations, viz., Damodhar Cement Works and Thondebhavi Cement Works. 6 more plants are already in pipe-line for the next phase roll out. The Success of Speed could be gauged by outstanding results delivered by the initiative.
After implementing the new system:
- Number of trucks inside the plant was reduced significantly
- Gate-in to gate-out time reduced by almost 50%
- Parking yard detention reduced by almost 30-40% due to improved scheduling, and
- The parking yard became congestion-free due to quick loading and exit of trucks.
The company annually handles about 36 million tonnes (mt) of goods, including 12 mt of raw material at its 17 plants in 15 remote locations and to 700 godowns.