Operations Management: Operations Excellence of Ambuja Cement LTD

OPERATIONS MANAGEMENT
REPORT
Operations Excellence
of
Ambuja Cement Ltd
Submitted to:
Dr. Harpreet Kaur
Submitted By:
Achint Pal Singh(18DM012)
Akanksha Sharma(18DM016)
Bhavya Bansal(18DM048)
History of Ambuja Cement
The company is known for its easy home building

solutions. The company aims at building customized
solutions suitable for the Indian climate conditions in the
form of strong standing cement brand in India. It aims at
providing best quality home-building solutions since its
inception. The company has grown to the capacity
producing 29 million tonnes with several integrated
manufacturing and grinding units.. It has also introduced
various new products like Roof Special, Cool Walls &
Compocem. The company also aims at reducing carbon
footprints by its latest innovative technologies.
OPERATIONAL EXCELLENCE
Operational efficiency is defined as the ratio between input and

output of a business operation. Input means people, money or
time. On the other hand output is referred as creating new
consumers/ customer loyalty , quality , innovation and production.
The different aspects of operational efficiency of Ambuja Cement

is explained below:
 Plant Location :
The effective location of the plant helped the company
derive advantage of the substantial sales tax and incentives
from the income tax .Punjab, Himachal Pradesh ,Gujarat
plants provide the company with benefit of tax of about
90% of its assets for a period of about 15 years.
 The Chandrapur plant derived benefit of tax for 18
months.
 The Himachal Pradesh palnt prioritized its power supply at
a pre defined cost for 5 years. This region was deficit in
cement at that time. The area had limestone deposits
and great growth prospects. The plant was closer to the
mines hence cost cutting.
 Development of Infrastructure :
The company developed conveyor across valleys on its own
that decreased the travel distance from 20km to just
3km.The conveyor belt had a capacity to move 800 tonne
of limestone.
 Reduction in set up time :
Ambuja Cements Ltd. Developed its very first plant within a
stipulated time of 22 months instead of three years and the
second plant in 13 months only which was an achievement
in its own. The company empowered its workforce and
engineers to define the nature of their own job and gave
them authority to take timely decisions and also to set up
their weekly, monthly and annual targets . Thus showing the
company’s trust in its employees.
 Productivity enhancement :
The company has tried harder to decrease the total amount
of mining expenditure in its day to day activities. The cement
industries tend to operate by their self-owned mines but the
mines were not only destructive, costly but harmful for the
environment too. These activities involved implementing
high quality safety measures. In the late 90s Ambuja Cement
sent its effective team of engineers to Australia to learn
about metal extraction. The team returned and
implemented the Iknowledge so learned for developing
new technologies for the company that would give easy
extraction of limestone even in smaller areas where blasting
was not feasible. Surface miner, an Australian device was
introduced into the system by the company to decrease the
high level of noise and vibrations that took place due to
conventional drilling, crushing , blasting. The engineers of the
company were also sent for training to Japan which
ultimately helped in kiln operations and brought down
power cost from 150units per tonne to 90 units per tonne. The
implementation of a larger pre- heater icreased the
productivity by approximately 13%. It aimed at maintaining
quality standards by reporting the quality related data 48
times a day.
During the early 2000s, a 24hr monitoring system was
introduced to perform weekly checks . It healped the
company achieve approximately more than 100% capacity
utilisation. It also introduced a centrally computerised
control system that was used to evaluate optimum mix of
raw material and improved the desining accordingly.
 Cutting Costs
The company managed the total cost by adopting a two
pronged strategy and aimed at reducing each component
cost an increasing the productivity of the plant. The major
cost components for the company included fuel (22%),
Freight (15%), Raw Materials (20%) and Power (13%).
 Power
It is the major portion of the company’s production costs. It
introduced a captive power plant that was aimed to increase
savings as the previously used method of power grids was
unreliable and very expensive.In 1998, the company set up no 2
captive power plants in Gujrat and Himachal Pradesh that
reduced the power generation costs to 1.50 per KW from Rs. 4.5
per KW. The company not only satisfied its own power requirement
but also sold in excess power generated to the state
governments.
 FUEL
As the imports became cheaper the company imported high
quality of coal from south Africa and better quality furnace oil for
its generators. The company shifted its focus from excessive use of
coal to ground nut husk which ultimately reduced the overall coal
consumption by upto 3 percent. The company also replaced the
V Belt drived by using the flat ones.
 FREIGHT
The company increased the usage of sea route because of
seeting up of new advanced ports and freight handling
terminals at Surat, Panvel and Muldwarka. The sea route
being cheaper decreased the cost of transportation of
cement to Mumbai to Rs400per tonne which earlier by road
costed 1800 per tonne which ultimately let them save
approximately 165 million per year.

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OPERATIONS MANAGEMENT

The company is known for its easy home building

Operational efficiency is defined as the ratio between input and

The different aspects of operational efficiency of Ambuja Cement

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