INDIAN SCHOOL OF BUSINESS
MANAGEMENT & ADMINISTRATION

PROJECT REPORT
On
A FRAMEWORK OF “SUPPLY CHAIN MANAGEMENT”

Submitted for the Partial fulfillment towards the award of the degree in MASTER OF BUSINESS ADMINISTRATION

Submitted By Under the Guidance of SHARATH HS Roll Number: Session – 2013-14

PREFACE
This report has been written in response to a comprehensive study, conducted on the “SUPPLY CHAIN MANAGEMENT” of “HINDALCO INDUSTRIES LIMITED”. The report mentions and evaluates the various aspects, pertaining to the distribution channel of the company.

ACKNOWLEDGEMENT

At the onset I must bow down in reverence to the almighty that blessed us with the understanding & prevalence that is needed in this kind of project report.

With great pleasure I express my heartiest thanks to Dr. Diwakar Shetty without whose unrelated support and guidance, this project would just not have been possible. I am very thankful for his invaluable guidance, support, and affable & friendly nature. He/She guided me at each and every stage of project.
I am equally indebted to my friends who always inspired and motivated me to do something better through out this project.
At last I would like to extend my sincere thanks to all the respondents to whom I visited for giving their support and valuable information, which helps me in completing my project work.

SHARATH HS M.B.A.III Sem Roll No.

STUDENT’S DECLARATION

I, SHARATH HS, hereby declare that this work entitled A Framework of “supply chain managment” is the result of summer training under taken. The findings and conclusions expressed in this report are genuine, authentic and are for academic purpose. Any resemblance to earlier research work is purely coincidental.

SHARATH HS M.B.A. III Sem Roll No.

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr./Ms……………………………………… S/o,D/o………………………. Roll No……….....…..……… student of MBA III Semester (Batch 2012-13) of this institution has done project report titled A Framework of “supply chain management”
The project has been prepared and submitted by the above named in partial fulfillment of the Master of Business Administration degree Programme (MBA). Date: Place : Officiating Director

TABLE OF CONTENTS Preface
Acknowledgement
Student’s Declaration
Certificate

Introduction to the Topic Introduction to the Organization/Industry

Objectives of the Study

Scope of the Study

Literature Review
Data Analysis & Interpretation
Findings
Limitations of the Study
Scope for further research
Recommendations & Suggestions
Conclusion

The Winning organizations will be those who regularly outperform competition. They have a stable consistent strategy. A stable strategy does not mean a static strategy, rather it means following a brand philosophy and continuous improvement in how strategy is manifested, incorporating the expected market requirements and the customer needs.”
(…….KUMAR MANGALAM)

ABOUT
ADITYA BIRLA GROUP CHAIRMAN: Shri Kumar Mangalam Birla
“People build company’s success; where people grow, profits grow.” Group vision
“To become a premium conglomerate with clear business focus at each corporate level.” Group mission
“To deliver value for our customer, shareholders, employees and society at large.”
Group Philosophy
Reset on four pillar ::Customize :: People-size ::Strategize ::Institutionalize
Group values ::Integrity ::Speed ::Seamlessness ::Passion

INTRODUCTION TO GROUP

I.1 ADITYA BIRLA GROUP
A US $28 billion corporation with a market cap of US $31.5 billion and in the league of Fortune 500, the Aditya Birla Group is anchored by an extraordinary force of 100,000 employees, belonging to 25 different nationalities. In India, the Group has been adjudged "The Best Employer in India and among the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007. Over 50 per cent of its revenues flow from its overseas operations.
The Group operates in 20 countries: India, Thailand, Laos, Indonesia, Philippines, Egypt, China, Canada, Australia, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Malaysia and Korea.
Globally the Aditya Birla Group is:
:: A metals powerhouse, among the world's most cost-efficient Aluminium and Copper producers. Hindalco-Novelis from its fold, is a Fortune 500 company. It is the largest Aluminium rolling company. It is one of the three biggest producers of primary Aluminium in Asia, with the largest single location copper smelter.
:: No.1 in viscose staple fibre
:: The fourth largest producer of insulators
:: The fourth largest producer of carbon black
:: The 11th largest cement producer globally
:: Among the world's top 15 BPO companies and among India's top three
:: Among the best energy efficient fertilizer plants
In India:
:: A premier branded garments player
:: The second largest player in viscose filament yarn
:: The second largest in the chlor-alkali sector
:: Among the top five mobile telephony companies
:: A leading player in life insurance and asset management
:: Among the top three supermarket chains in the retail business
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.
Beyond business — the Adyta Birla Group is:
:: Working in 3,700 villages
:: Reaching out to seven million people annually through the Adyta Birla Centre
:: Focusing on: health care, education, sustainable livelihood, infrastructure and espousing social causes
:: Running 41 schools and 18 hospitals

Fact file The world's largest aluminum rolling company World leader in viscose staple fiber One of the biggest producers of primary aluminum in Asia Fastest-growing copper company in Asia The Adyta Birla Group is the 11th largest cement producer in the world. Fourth largest producer of carbon black in the world One of the lowest-cost producers of aluminum in the world
ISO 9001:2000 and 14001 certified One of the lowest-cost producers of aluminum in the world

ZZ

key products and brands Locations Capacities Country
Birla Copper (Hindalco Industries Ltd.)

copper cathodes Dahej (Gujarat) 500,000 tpa India continuous cast copper rods 97,200 tpa
Sulphuric acid 1,670,000 tpa phosphoric acid 180,000 tpa gold (Birla Gold) 15 mt silver (Birla Silver) 150 mt
DAP and complexes (Birla Balwan) 400,000 tpa

Hindalco Industries Ltd. (Aditya Birla Minerals Resources Pty. Ltd.)

copper cathodes Nifty mines 25,000 tpa Australia copper in concentrate Mt. Gordon mines 40,000 tpa Australia
Power Mt. Gordon mines 28mw Australia

HINDALCO OVERVIEW
INTRODUCTION
Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group, is an industry leader in Aluminium and copper. A metals powerhouse with a consolidated turnover in excess of US$ 14 billion, Hindalco is the world's largest Aluminium rolling company and one of the biggest producers of primary Aluminium in Asia. Its Copper smelter is the world’s largest custom smelter at a single location.

Established in 1958, Hindalco commissioned its Aluminium facility at Renukoot in Eastern U.P. in 1962. Later acquisitions and mergers, with Indal, Birla Copper and the Nifty and Mt. Gordon copper mines in Australia, strengthened the company's position in value-added Alumina,Aluminium and copper products, with vertical integration through access to captive copper concentration.

In 2007, the acquisition of Novelis Inc. a world leader in Aluminium rolling and can recycling marked a significant milestone in the history of the Aluminium industry in India. With Novelis under its fold Hindalco ranks among the global top five Aluminium majors, as an integrated producer with low-cost alumina and Aluminium facilities combined with high-end rolling capabilities and a global footprint in 12 countries outside India. Its combined turnover of US$ 14 billion, places it in the Fortune 500 league.

Hindalco in India enjoys a leadership position in Aluminium and Copper. The Company's Aluminium units across the country encompass the entire gamut of operations from bauxite mining, alumina refining, aluminium smelting to downstream rolling, extrusions, foils and alloy wheels, along with captive power plants and coal mines. The Birla Copper unit produces copper cathodes, continuous cast copper rods along with other by-products, including gold, silver and DAP fertilizers.
All of Hindalco's units are ISO 9001:2000, ISO 14001:2004 and OHSAS 18001 certified. The Renukoot and Taloja units have gone a step further with an Integrated Management System (IMS), combining ISO 9001, ISO 14001 and OHSAS 18001 into one Business Excellence Model.
The company has been accorded the Star Trading House status in India. Its aluminium metal is accepted for delivery under the High Grade Aluminium Contract on the LME (London Metal Exchange), while its copper quality standards are also internationally recognized and registered on the LME with Grade “A” accreditation.
Aluminium
Hindalco’s major products include Standard and Speciality Grade Aluminas & Hydrates, Aluminium Ingots, Billets, Wire Rods, Flat Rolled Products, Extrusions, Foil and Alloy Wheels. The integrated facility at Renukoot, (Uttar Pradesh) houses an Alumina Refinery and an Aluminium Smelter along with facilities for production of semi-fabricated products, namely, Redraw Rods, Flat Rolled Products and Extrusions. The plant is backed by a co-generation plant and a 742mw captive power plant at Renusagar to ensure continuous and consistent supply of power for smelter and other operations.
The aluminium alloy wheels plant is located at Silvassa (Dadra and Nagar Haveli). Hindalco was among the first few alloy wheels companies to have obtained the ISO/TS 16949 certification to meet the stringent standard of the automobile industry.
A strong presence across the value chain and synergies in operations has given Hindalco a major share of the domestic value-added products market. In India, the company enjoys a leadership position in Speciality Aluminas and Hydrates as well as in Primary Aluminium and downstream semi-fabricated products. As a step towards expanding the market for value-added products and services, Hindalco has launched several brands in recent years. These include the Aura Aluminium Alloy Wheels for cars, Everlast Roofing Sheets and Freshwrapp and Freshpakk household foil for packaging.
Hindalco's Aluminium Galleries in Mumbai and Gurgaon showcase the versatility of aluminium through a wide range of applications.Apart from being a major player in the domestic market, Hindalco's products are well accepted in international markets. Exports account for more than 20 per cent of total sales of aluminium products.

Hindalco is a leading domestic player in two metals business segments — aluminium and copper.
The aluminium division's product range includes alumina chemicals, primary aluminium ingots, billets, wire rods, rolled products, extrusions, foils and alloy wheels.
The company has a significant market share in all the segments in which it operates. It enjoys a domestic market share of 42 per cent in primary aluminium, 63 per cent in rolled products, 20 per cent in extrusions, 44 per cent in foils and 31 per cent in wheels.
As a step towards expanding the market for value-added products and services, Hindalco has launched several brands in recent years, which include Aura for alloy wheels, Freshwrapp for kitchen foil and Everlast for roofing sheets. Our exclusive showroom, The Aluminium Gallery, seeks to promote Hindalco products to its customers. It is a platform for the company to showcase quality products to a quality audience in an appropriate ambience. The exhibits include products like windows, doors, furniture, ladder, roofing sheets and ceiling and cladding panels.
Hindalco's products are well received not only in the domestic market, but also in the international market. The company's metal is accepted for delivery under the high grade aluminium contract on the London Metal Exchange (LME). The company exports about 17 percent of its total sales volume of aluminium.

The company's alumina chemical business is a leader in manufacturing and marketing of speciality alumina and alumina hydrate products in the country. It has a major market share in the country. These speciality products find wide usage in diversified industries including water treatment chemicals, refractories, ceramics, cryolite, glass, fillers and plastics, conveyor belts and cables, among others. The company also exports these alumina chemicals to over 30 countries covering North America, Western Europe and the Asian region.

Birla Copper, Hindalco's copper division at Dahej in Gujarat, enjoys a leadership position in India, having built over 40 per cent of the domestic market share within three years of its commissioning. It has also made successful forays into the export markets of the Middle East, Southeast Asia, China, Korea and Taiwan.
The copper plant produces world-class copper cathodes, continuous cast copper rods and precious metals. Sulphuric acid, phosphoric acid, di-ammonium phosphate, other phosphatic fertilizers and phospho-gypsum are also produced at this plant.
Some recent milestones

:: In May 2007, Novelis 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 a 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 MoUs to establish a world class integrated aluminium project in the state of Orissa
:: In April 2005, the company entered into MoUs with the Orissa and Jharkhand governments for setting up a Greenfield alumina facility and aluminium facility respectively, in the states

HINDALCO VISION
“To strengthen our position as a premium aluminium company sustaining domestic leadership and global competitiveness through Innovation Quality and Value added growth”

HINDALCO MISSION
“To pursue the creation of value for our customers, shareholders, employees and society at large”
QUALITY POLICY
We, at Hindalco, shall aim to achieve and sustain excellence in all our activities.
We are committed to total customer satisfaction by providing products and services, which meet or exceed the customer’s expectations.
Modernization of the manufacturing facilities, stress on technological innovation and training of employees at all levels shall be a continuous process in Hindalco.
A motivated workforce with a sense of pride in the Organization shall lead us towards total Quality.

HINDALCO PRODUCT RANGE
1. 2. 3. Primary Aluminium Alloy ingots Billets
4. 5. 6. Aluminium sheet Wire rods sheet Slab
7. 8. Circle Alloy wheel

OBJECTIVE OF STUDY

This project was undertaken to have an insight into the supply chain management of Hindalco. The study aims to investigate the minute details of the supply chain management An analysis of the various facts and figures has been done to arrive at logical recommendations. In short, at it can be said that this study has two-fold objective of knowing, “what is the present supply chain management?” And “what should be the future supply chain management?”

SIGNIFICANT AND SCOPE OF STUDY

The development in the field of transportation, communication and information on account of globalization has found charging the expectations of the customers. It is against this backdrop the marketing professionals need to assign due priority to the application of modern marketing principles in particular.
An efficient “supply chain management” plays a vital role in the success of any organization. A chain system has to be designed carefully, as it normally takes years to build and is not easily changed. This study provides a bird’s eye view of distribution channel of Hindalco. This report would do well to the entire person interested in learning about distribution channel of Hindalco. A general idea about Hindalco’s presence in aluminium market is also well given by this report. After a thorough analysis of various facts and figures, a set of recommendations, with regard to the distribution channel, has been given in the concluding part of the report. The company would find it useful to look into the viability of the implementation of the recommendations, once implemented, and are expected to fetch immense benefits to the company. It is thus clear that this report would serve a variety of purposes and its scope is very wide and open.

RESEARCH METHODOLOGY
RESEARCH DESIGN:
Exploratory research design
SAMPLE DESIGN:
Sample size 71
50 employees
10 suppliers
4 distributors
7 visiting parties

Sample technique: Interview and questionnaire

SOURCE OF DATA:
PRIMARY SOURCE:
Personal interview
Employees
Mr. Rahul paliwal (asst. sales manager)
Mr.M.C.Mahapatra (sales manager)
Distributors
Mr. Baccha Singh
Questionnaire
Employees of hindalco

SECONDARY DATA:

 Annual report of HINDALCO Fy2006-07, 2007-08 and individual contra sheets of aluminum and copper for the year 2006-07 and 2007-08.
 Internet.
 Induction guide.
Supply chain management:
Introduction:
Supply chain management is a process responsible for the development and Management of a firm’s total supply system both the internal and external components. At an operational level, it includes and expands the activities of purchasing function and the procurement process. Its major focus however is strategic.
“Supply Chain is process from the initial raw materials’ to the ultimate consumption of the finished product linking across supplier-user companies.”
“Value Chain is the functions within and outside a company that enables the value chain to male products and provides services to the customer.”

Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption (supply chain).

Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service.
Supply chain management flows can be divided into three main flos:
• The product flow
• The information flow
• The finances flow
The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.
There are two main types of SCM software: planning applications and execution applications. Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties.
Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems, or data warehouses, at several different sites and companies.
By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's clients), SCM applications have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs.
Increasing numbers of companies are turning to Web sites and Web-based applications as part of the SCM solution. A number of major Web sites offer e-procurement marketplaces where manufacturers can trade and even make auction bids with suppliers

CHANNEL OBJECTIVES:

• Making smooth availability of product to the target market.
• Achievement of the best possible coverage of the target market.
• Ensuring that the consumer incurs the minimum extenuation in procuring the product.
• Safe in quality & accuracy in quantity.
• Quick services.
• Ensuring that the firm is able to carry on with its manufacturing activities, confident that the channel will take care of the distribution job.
• Ensuring that the distribution is cost effective.
• The primary objective of channel of the distribution is to bridge the gap by resolving spatial (geographical distance) and temporal (relating to time) discrepancies as to supply and demand.

• ROLE OF CHANNEL MEMBERS:

• Channel members are not play only the role of sales the products to the customers but also play the role as they promote the products, gathering the customer interest, complaints, suggestion, and information to the organizations – they are work as the co-ordination between the targeted customers & manufactures.
• Members of the marketing channel perform many key functions as follows:

• Gathering & distributing marketing research and intelligence information about actors & forces in the marketing environment.
• Helpful in making marketing strategy.
• Developing & spreading the promotional offer of company and promote the sales activity.
• Easily make a sales contact with the customers.
• Intermediaries are taking the title to goods, so they invest the fund.
• Through the intermediaries, manufactures are made physical distribution of goods.
• Intermediaries are taking various type of risks, in the term of storing, dispatching etc.

CONTRIBUTION OF CHANNEL:
• Make available on time.
• Reduce the cost of distribution
• Save the distribution time.
• Helpful in product design & developments.
• Flow of feedback from consumer.
• Flow of money consumers to manufacture.

VARIOUS TYPES OF CHANNEL LEVELS:
While a marketers wants to sell or marketing about the products or services, requirement of design a distribution channel to make product & services available to customers in different ways. In the process of distribution of products, each layer of marketing intermediaries are performs some work in bringing the product and its ownership closer to the final buyer is a channel level.
Generally two methods of distribution are in the practices.
1. DIRECT MARKETING CHANNEL
2. INDIRECT MARKETING CHANNEL

DIRECT MARKETING CHANNEL:
DMC is a marketing channel that has no intermediary levels. Manufacture or sellers are advertise their product through the various method of advertising & make awareness about the products, then contact to the needful customers through their salesmen, internet, e-mail, telephone or by post.

INDIRECT MARKETING CHANNEL:
IMC is a channel containing one or more intermediary levels. Manufactures or sellers are appointed various type of marketing intermediaries in the context of nature of the products & segmentation of markets.
TYPES OF CHANNEL MEMBERS
C & F AGENTS:
It means clearing & forwarding agents. They are responsible for storage & transportation of the company’s products and its distribution to the distributor and some time retailers.

DISTRIBUTORS:

A distributor is usually appointed by the company and does not sell its competitor’s products. He can also be a distributor of many products of the same company. A distributor is responsible for ensuring that his company’s product is available at the retail stores. The distributor is very much an extension of the company as he ensures that the market is properly served. A company has direct control over the distributors.
Some of the following type of wholesalers:
 MERCHANT WHOLESALERS:
• Purchase and resell merchandise
• He has title to merchandise.
• He provides wide range of services.
 FULL SERVICE WHOLESALERS:
• Perform full range of distribution services.
• Provide trade credit; offer promotion assistance, personal sale force, and communication of information.
• Provide installation and services.
 RACK JOBBER:
• Deals with highly promoted items.
• Furnishes rack and shelves, price the goods, keep them fresh, set up point of purchase displays.
• Sell on consignment.
• Provide services as delivery, shelving, and inventories caring.
 LIMITED FUNCTIONS WHOLESALE
Not provide credit, marketing research information and merchandising assistance.
 MERCANDISING AGENTS & BROKERS:
They usually perform fewer services than merchant wholesalers do. Merchandising agents and brokers do not take title to product but negotiate sales for manufacture, they represent.
 MANUFACTURER’S AGENTS
• They are free to work for several manufactures.
• They carry non-competitive, complementary products in exclusive territories.
• They do not provide credit facility but at times store and deliver products.
• Also provide research aid and promotion support.

 BROKERS:
• To bring buyer and seller together
• To assist in negotiation.
• They have not title to goods.
• But they provide the facility of financing.
 COMMISSION MERCHANTS
• Received goods on consignment.
• They have not title to goods.
• To accumulate them from local markets & arrange for their sales.
• Offer credit & storage goods facility.
• To provide sales force & research aid.
• They do not normally promote the goods.
 MANUFACTURER’S SALES FACILITIES
• Established by manufacture.
• It is separate from manufacturing operations.
• It’s performing the wholesaling function himself. Generally used in industrial customers.

Types of manufacturer’s sales facilities:
 MANUFACTURER’S SALES BRANCHES
• Carry inventory Promote
• the sales activities
• Sell to retail outlet.
 MANUFACTURER’S OFFICE (Regional Sales Office)
• It does not carry inventory
• Perform market research, demand forecasting, etc.
• Collect orders from customers.
• Make delivery to customers from manufacturing point
• Collection of payments.
• Dispose all the disputes or claims.Create better relationship.

STEP-1

STEP-2

STEP-3

STEP-4

STEP-5

CHANNEL SELECTION PROCESS

EVALUTION OF THE DISTRIBUTION ENVIRONMENT
Selection of channel model has to be necessarily taking into account the distribution environment obtaining in the country/ region and in the specific business in which the firm is engaged.
A firm has to evaluate the vital features of the distribution environment and ensures that the channel model to be adopted is compatible with them. Distribution environment in the border sense includes the legal environment as well in so far as its implications and distribution are concerned.
EVALUTION OF COMPETITOR’S CHANNEL PARTERNS
The firm should also study the competitors’ channel patterns before deciding its channel. While the firm may not necessarily follow the competitors it will be worthwhile for the firm to analyze in depth the plus and minus of the channel patterns adopted by each of the major competitors.
EVALUTION OF COMPANY RESOURCES AND MATCHING THE CHANNEL TO THE RESOURCES
On the other hand firm with larger resources and large size marketing operation will be in a position to go in for highly intensive distribution committing a good deal of resources to the distribution task.
IDENTIFICATION OF ALTERNATIVES CHANNEL & SELECTION OF THE ONE THAT SUITS THE FIRM BEST
Two important considerations are cost and efficiency. Often though not necessarily they are directly proportional. The channel that its efficient but relatively less expensive has to be chosen. Two types of evaluations an economic evaluation and a conceptual evaluation may be necessary. The firm should also examine whether the channel member s in the desire alternatives would be willing to work enthusiastically for the firm and the product.
ANALYSING THE PRODUCT CHARACTERSTICS AND LINKING CHANNEL TO THE PRODUCT
The firm should analyze the characteristics of the product and choose the channel designee that is most suited to the product. Within each of these broad categories of product channel choice can vary in relation to specific products/product types. The products futures, after all changes in a graded manner as on move through the spectrum from the simplest consumer soft to the most complex among industrial equipment.

NOTES:
 Consumer products Vs Industrial products.
 The case of industrial products.
 The product must have a sizable customer base.
 It must be standardized to a reasonable extent.
 It must be stock able items.
 The unite value should not be too high.
 It should not be complex.
Need for specialized distributor must be appreciated; after considering all such factors, if a given industrial product lends itself for marketing through distributors, it must still remembered that;
 As a general rule industrial products require specialized distributor and entrusting them with the general-purpose (consumer product) distributors does not produce the best result.
 Different industrial products need different types of distributors.
 Establish relationship and use problem-solving techniques for prevention of crisis and preventing customer dissatisfaction.
 Gather quality intelligence on customer dissatisfaction and provide this information to management.

ON TIME DELIVERY
Consumer will be happy, if the material is delivered on time. OTD has come into sharper focus, for it has become a competitive weapon in all most all industries. For example Nissan offers a guaranteed ten-day delivery to its dealers, Caterpillar deliver replacements parts within 72 hours.99.7% of time
OTD customer satisfaction gap has three components
 Calibration Gap
 Operations Gap
 Organization Gap

CALIBRATION GAP:
The customer may measure OTD in different manner as copier to the supplier. It may so happen that the supplier may measure OTD by product category but the buyer may measure it in terms of complete order. The customer may measure OTD in terms of the initial order date whereas then supplier may measure it from a negotiated date.
OPERATION GAP:
Businesses that face variability from one manufacturing phase to another or from operations to ware house normally have an operations gap. Operations gap can also result from too many stages in production process, too many supplier or too many people involved in order filling.
ORGANISATION GAP:
If people do not have incentives to improve OTD it will probably result into organization gap. In other words organization gap result from the priority accorded to OTD.

Marketing Head office (Renukoot)

EAST WEST NORTH SOUTH Vice-President Vice-President Vice-President Vice-president

Extrusions Rolled Primary

Sales Manager (Territory Manager)
ADVANTAGES
• Cost effective
• Geographical area oriented.
• Focus on all products simultaneously.

DIS ADVANTAGES

• Product promotion scheme is not applicable.
• Lack of information about a particular product.
• Over work load.
• No more time & scope for a particular product.
• Consumer satisfaction is not appropriate.

The above old structure was not taking much advantage of the new global market. Analysis of the advantage and disadvantage of the regional based marketing strategy, it is not suitable in modern marketing specification era. So that, in 2003 company decided to go for opting the new marketing strategy based on product specification. For this the company transferred its marketing head office from Renukoot to Mumbai.

The new marketing strategy structure is as follows:-

ADVANTAGES

• It’s product based..
• Emphasis on more customer satisfactions.
• Helpful to increasing the sales performance of various products of product line.
• Helpful to production processes to deliver the products.
• Accumulation of small customers.
• Provide quick service to customers.
• Enhance the sales promotion.
DISADVANTAGES
• Cost ineffective.
• More men power required.
•
MARKET SEGMENTATION OF HINDALCO
The market for Aluminium products in India is very widespread
• Geographically
• By diversified of end user

Further, there are a large number of small and medium consumers and a select a few large consumers. The smallest consumer would be consuming as little as 1MT/Month. However, the largest numbers of Hindalco’s customers are in the consumption range of 5-50 Mts./Month.
Aluminium is being used in around 3000 products in developed countries like USA, Japan, Canada, etc. Whereas India, only around 350 products find use in aluminium. Moreover, the per capita consumption of aluminium in the country is very low (1.1 kg/year).
Hence there is large potential for introducing the new uses and the increasing the consumption. As a strategy therefore, Hindalco decided to cater to as many consumers as possible. Their distribution system therefore, is designed to the object.
Hindalco manufacture the products with very specification as desired by the various customers. Hindalco’s market may be segmented in the following manner.

(A) MARKET SEGMENTATION BASED ON THE PRODUCT GROUP
On the basis of product groups, Hindalco market may be segmented in the following manner
• PRIMARY PRODUCTS
• Ingots
• Wire rods
• Billets

• ROLLED PRODUCTS
• Sheets
• Chequered sheets
• Roofing sheets
• Coils
• Hot Rolling plates
• Circles

• EXTRUDED PRODUCTS
• General solid sections
• Tubings
• Structurals
• Architecturals
• Mouldings

• FOIL
• Cable wrap stock
• Light gauge Foil
• Bare & Coated Fin stock
• Collapsible Insulation Ducts.

• ALLOY WHEELS (“AURA”)
• 12” to 18” diameters.

• MARKET SEGMENTATION ON THE BASIS OF PRODUCT WISE KEE CONSUMERS
• PRIMARY PRODUCTS:
• Consumers:
• Value added aluminium sheet producer industries.
• Foil Producer Industries.
• Extrusion Producer Industries.
• Electricals Equipment Automobile Industries
• Furrow allows
• Smelter pot lining.

• ROLLED PRODUCTS
• Consumers:
• Foil & Packing Industries: box, cop, and container.
• Electrical Industries: bulbs, tube lights, fan blade etc
• Transportation industries
• Building & construction sectors –roofing flooring etc.
• Defense & Marine sectors.
• Transportation sectors.
• Consumer durable: flooring & roofing
• General engineering:
• Piper-proof bottle cops
• Pressure cookers, non-stick cookware.
• EXTRUDED PRODUCT
• Consumers:
• Automobile Industries
• Building & construction Sector
• Mines & defense Sector
• Transportation sectors
• Electrical sectors
• Architectural sectors
• Furniture sectors
• Households consumer durable

• FOIL
• Consumers:
• Packing sectors (printed & multi-laminated)
• Pharmaceuticals
• Dairy products
• Processed food
• Con-fectionery
• Personal care products
• Cigarettes Box rapping
• Air conditioner
• Auto mobile radiator Collapsible Insulation Ducts.

• ALLOY WHEELS
• Consumers:
• Automobile sectors
• Maruti Suzuki
• TATA Motors
• FIAT India
• Hindustan Motors
• Telco Ford India
• Hyundai India
• GM India etc

(B) MARKET SEGMENTATION BASED ON THE DEMAND PATTERN.
Based on size & frequency of order, Hindalco market may be segmented as follows:
 BULK CUSTOMERS
Bulk customers are those customers, whose demand is very high and consistence. Some of the bulk customers are Howkin, TTK, Foil Division Silwassa, Jugraj Tejraj, Bajaj Auto, etc.
 SMALL & MIDIUM
Small & medium customers may be bracketed as those customers, whose demand is comparatively low and not so consistence, some of the small customers of Hindalco included ITI Allahabad, Defense Organization, and Dockyards etc.
(C) MARKET SEGMENTATION BASED ON THE PRIORTY:
On the basis of priority given to various orders Hindalco market may be segmented in the following manner:
 ROUTINE CUSTOMERS
Routine customers are those customers, who are regularly sourcing the company. Their orders are processed in the normal course of working.
 SPECIAL CUSTOMERS
Special customers are those customers, whose orders are for products under developments. Since their demand is usually urgent in nature they are given priority under routine customers. Examples: Export Customers, Government organization like Defense, Establishment etc. continue this category.
(D) MARKET SEGMENTATION BASED ON CONSUMPTION SECTOR.
Uses of aluminium metal are everywhere. It is not easy to categorize in some particular heads. However, we categorize in the following major sectors.
 Electrical
 Transportation
 Building & constructions
 Industrial Machinery
 Packing
 Consumer Durable
 Other

(E) MARKET SEGMENTATION BASED ON GEOGRAPHICAL AREAS:
Aluminium consumers are spread all over the country. Different area has different type of industries, whose are used aluminium in different quantity. Here, segment the market in geographical areas based on consumption or demand pattern.
TRANSPORTATION FACILITY
Smooth transportation facility is available all over the country all the time. Some area is affected by flood. Some areas are block in the case of heavy rain etc.
DISTRIBUTION PROCESS AT HINDALCO

There are different tasks involved in distribution process
These are as follows:
 Order processing
 Packing & Insurance, Banking, Bills,
 Ware housing
 Transportation
 Godown sales procedure
ORDER BOOKING:
Every purchaser has to book his order giving details which aluminium rolled products they want such as Plain sheet, Cold rolled coils, milk can sheet, circles, etc. Purchaser should be fully disclose about the product such as, product name, quality, quantity, technical data, mode of transportation, desire delivery time, payment mode etc.
Technical wing of Hindalco examines their application and if necessary also make inspection of the facing and decided quality to be offered. Thereafter, terms of payment finalized and his order is finally booked. This order is passed to the relevant personnel’s officials with relevant details.
PRIORITY:
A priority list of all categories of consumers has been fixed in consultation with all concerned. Consumer gets delivery in order to their priority, which is also followed by transporting agents.

ORDER PROCESSING:
Hindalco procure order either directly from the customers or through the agents/stockiest. The order contains the name of product, quality, size, clearance etc.
After the receipt of orders from the customers or agent Company scrutinizes the order. A production planning programmed is prepared for rolled production monthly basis. This monthly report is sent to the respective production department i.e. rolling mills by the end of the preceding month. The produced material is sent to the inspection and packing department.
WARE HOUSING:
Every has to store to goods while they wait to be sold. A strong function is necessary because production and consumption cycles rarely match. Ware housing is the responsibility of warehouse in charge in Hindalco. The work start when warehouse officials receive finished goods from production. Hindalco warehousing in charge dispatches the material to respective customers on advice of CSMO and follows the guidelines given to them. The guidelines are:
At warehouse:
 While taking delivery from inspection & packing to ensure packages are intact & dry.
 If packages are damaged or loose condition, get it repacked.
 If packages are wet, do not accept it.
During loading at warehouse :
 Truck’s floor should be clear and flat.
 There should not be any hole or damage in the floor of the Truck’s
 Floor should be covered with Tarpaulin.
 Packages being loaded should be intact and dry
 Proper stocking of packages should be done while loading.
 Heavy packages to be kept at bottom and lighter packages over heavy.
Packages:
No vertical stoking of packages. After loading truck should be covered with tarpaulin.
During Storage:
 Outdoors storage should be avoided.
 Do not store packages directly on the floor, use wooden pallets.
 Cheek condition of metal every few hours to ensure no water condensation.
DELIVERY OF MATERIAL:
They deliver the material as per the delivery order. Then they note down the delivered material in the godown register. Then they send delivery report daily to zonal office.
BANKING INSURANCE BILLS & OTHER DOCUMENTS:
Hindalco enjoys the facilities of three public sector banks & private sector bank in its town Renukoot.
 United Commercial Bank (UCO Bank).
 State Bank of India (SBI).
 Allahabad Bank.
 Industrial Development Bank of India (IDBI).
Banking services at Renukoot is punctual. Banks help the company in carrying the documents to the party. It helps in quicker payments realization.
INSURANCE
Every material is dispatched duly insured. There are two types of insurance.
 Carrier Risk.
 Owner Risk.
Hindalco arranges insurance facilities for its customers. If there are any damages in transportation they will issue a damage certificate & the customer can claim its insurance company on the basis of damage certificate.
GODOWN SALES PROCEDURE
Godown sales procedure describes the sales procedure of Hindalco’s products through its godown. The respective zonal head exercise control over all activities related to godowns sales. This sales procedure is followed by all the godown of company situated at Delhi, Faridabad, Chandigarh, Jaipur, Haryana, Bangalore, Hydrabad, Calcutta Gohati, Mumbai, Silvasa, Taloja … There is a clearing agent in the godown, which is appointed by Hindalco for the operation & maintenance of the godown.

VARIOUS MODES OF DISTRIBUTION IN HINDALCO
Hindalco emphasizes on , “Taking the product to the market” Distribution of products in Hindalco is carried out through a network of zonal offices, Area offices, Agents, Stockiest and company operated Depots, located through the country. A brief description is given below
1. ZONAL AND AREA OFFICES:
Hindalco has established five zonal offices, in various part of country. There is a network of area offices, functioning under various zonal offices. Zonal offices carried out various Marketing Sales functions of company.
They provide following functions:
 Signed a contract between the zonal offices and customers, regarding to details of products such as quality, packing, transportation, destination, etc.
 Clearly mentions about the mode of payments.
 Eliminating intermediaries.
Make a direct contact with the customers.
 Help the company to cater to the need of customers.
 Helpful the company to earn additional profits
2. AGENTS
Agents are those persons/institutions, who provide orders to Hindalco, on behalf of the customers. The company has appointed a number of agents, all around the country to sell the products. They are paid commission on the generated sales. Agent being a local person/ institution can use his contacts and influence, to generate sales in a local market. Agents function as an important mode of distribution, as they enable the company to minimize distribution costs.
3. STOCKIESTS
Hindalco appointed a number of stockiest in various geographical areas across the country. Certain products of the company are sold through the network. Stockiest are made conform sale for the company.
 Stockiest is free to make sell to any customer
 Free to charge any price from customers
 Helps the company to cover the wide geographical market.
 Helpful in minimizes extra distribution setup costs.

4. DEPOTS
HINDALCO operate 15 depots in various part of the country. Depots send the various requirements at the work office and thud, maintain suitable inventory to cater to the demand of the market. This is providing the following advantages to the company & also the customers:
• TAX-SHIELD: In many states, state sales tax is less than the central sales tax. In these states sales of products through depots, lead to tax saving.
• AT RANDOM DELEVERY: Emergency needs of customers full filled immediately by the depots, at a premium price small off takes of the scattered customers can also be provided easily by the depots.
• HELPFUL IN PRODUCTION: Depots provide a foundation to the production department, by keeping inventory of the various products. For example, in the event of surplus stock, products can be transferred to the various depots. Similarly, Production –Schedules can be planned with greater accuracy, with the help of estimated requirements, sent by depots.

HOW THE DEMAND IS BEEN GENRATED

Customer to competitor

HINDALCO

PRIMARY PRODUCT

CUSTOMER

SELF
EXTRUSION

EXTRUSION ROLLED ROLLED

customer

FLOW OF LOGISTICS PROCESS

Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers (frequently, and originally, military organizations). Logistics involve the integration of information, transportation, and inventory, warehousing, material-handling, and packaging.

Logistics management
Logistics management is that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. A professional working in the field of logistics management is called a logistician.

Logistics Management Software
Software is used for logistics automation which helps the supply chain industry in automating the work flow as well as management of the system. There is very few generalized software available in the new market in the said topology. This is because there is no rule to generalize the system as well as work flow even though the practice is more or less the same. Most of the commercial companies do use one or the other custom solution.
But there is various software that is being used within the departments of logistics. Few department in Logistics are namely, Conventional Department, Container department, Warehouse, Marine Engineering, Heavy haulage, Etc.
The software that is used in these departments is:
Conventional department: CVT software / CTMS software
Container Trucking: CTMS software
Warehouse: WMS

In Hindalco, all the departments are interconnected with computer network system and the software on which these department works is on the Oracle 11i platform. This software is connected with Internet and the working in any department in any region of Hindalco will make effect in all over India.

Business logistics
Logistics as a business concept evolved only in the 1950s. This was mainly due to the increasing complexity of supplying one's business with materials and shipping out products in an increasingly globalized supply chain, calling for experts in the field who are called Supply Chain Logisticians. This can be defined as having the right item in the right quantity at the right time at the right place for the right price and is the science of process and incorporates all industry sectors. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies.
In business, logistics may have either internal focus (inbound logistics), or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption (see supply chain management). The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation and the organizing and planning of these activities. Logisticians combine a professional knowledge of each of these functions so that there is a coordination of resources in an organization. There are two fundamentally different forms of logistics. One optimizes a steady flow of material through a network of transport links and storage nodes. The other coordinates a sequence of resources to carry out some project.

Production logistics
The term is used for describing logistic processes within an industry. The purpose of production logistics is to ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right point in time.
The issue is not the transportation itself, but to streamline and control the flow through the value adding processes and eliminates non-value adding ones. Production logistics can be applied in existing as well as new plants. Manufacturing in an existing plant is a constantly changing process. Machines are exchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly. Production logistics provides the means to achieve customer response and capital efficiency.
Production logistics is getting more and more important with the decreasing batch sizes. In many industries (e.g. mobile phone) batch size one is the short term aim. This way even a single customer demand can be fulfilled in an efficient way. Track and tracing, which is an essential part of production logistics - due to product safety and product reliability issues - is also gaining importance especially in the automotive and the medical industry.

Logistics Structure

Order procurement and allocation

ORGANIZATION CHART OF LOGISTICS DEVELOPMENT AT HINDALCO:

Process overview : Loading & dispatch

FINANCIAL HEALTH OF THE COMPANY
The Chairman’s letter to shareholders and the Management’s Discussion &
Analysis, which form a part of this Annual Report, provide the strategic direction and a more detailed analysis on the performance of individual businesses and their outlook.

Rs. in Million
Financial Results for the year ended Standalone Consolidated 31.03.08 31.03.07 31.03.08 31.03.07

Net Sales & Operating
Revenue 192,010 183,130 600,128 193,161

Profit Before Tax 30,256 35,046 29,855 36,616

Provision for Current Tax 6,063 9,841 9,713 9,942

Provision for Deferred Tax 876 (551) (738) (478)

Provision for Fringe
Benefits Tax 114 113 123 121

Tax Adjustment for earlier years (Net) (5,407) - (5,481) -

Profit before Minority
Interest 28,609 25,643 26,238 27,031

Minority Interest - - 2,206 161

Share in (Profit)/ Loss of Associates - - 159 12

Net profit 28,609 25,643 23,873 26,858

Appropriations

Debenture Redemption Reserve 50 187 50 187

Special Reserve - - 9 13

Dividend on Preference Shares
(Current Year Rs. 0.24 Mio,
Previous Year Nil)

Dividend Tax on Preference Shares
(Current Year Rs. 0.04 Mio,
Previous Year Nil)

Interim Dividend on Equity Shares - 1,773 - 1,773

Tax on Interim Dividend - 249 - 249

Proposed Dividend on Equity
Shares 2,269 - 2,285 16

Tax on Proposed Dividend 386 - 392 6

Transfer to General Reserve 25,611 24,434 25,629 25,496

COMPANY GROWTH VS INDUSTRY GROWTH
Growth
Sales (%) Profit (%)
Company 16.35 24.54

Industry 15.18 15.65

PRODUCTION PROCESS
The aluminum production process can be categorized into upstream and downstream activities. The upstream process involves meaning and refining bauxite to alumina while the downstream process involves smelting and casting and fabricating.
Hindalco refines bauxite primarily obtained from captive mines, to extract alumina, which is smelted into alumina ingots or billets. Hindalco smelts its entire production of alumina into aluminum and does not engage in alumina trade.
Production of aluminum can be categories in two stages, namely
• From bauxite to alumina
• From alumina to aluminum

MODES OF SALES IN HINDALCO:
Hindalco has quite a good network for distribution of its products. Finished goods is sold and distributed to the costumers by following means.

 DIRECT SALES FROM MANUFACTURING UNITS:

 SALES THROUGH STOCKISTS:

 SALES THROUGH AGENTS:

 SALES THROUGH DEPOTS:

PRODUCTION CAPACITY
ALUMINA
CAPACITY 1.15 MTPA
• RENUKOOT 685,000TPA
• BELGAUM 350,000TPA
• MURI 110,000TPA
• SMELTER (PRIMARY ALUMINIUM) o CAPACITY 424,000MTP
• RENUKOOT 345,000TPA
• HIRAKUND 65,000TPA
• ALPURAM 14,000TPA
• ROLLED PRODUCTS o CAPACITY 2,00,000TPA
• RENUKOOT 80,000TPA
• BELUR 45,000TPA
• TALOJA 45,000TPA
• NAGPUR 30,000TPA
• FOIL o CAPACITY 14,000TPA
• SILVASA 5,000TPA
• KALWA 6,000TPA
• KOLLAR 3,000TPA
• EXTRUSIONS o CAPACITY 27,700TPA
• RENUKOOT 19700TPA
• ALPURAM 8000TPA
• ALLOY WHEELS o CAPACITY 3,00,000 Nos. PA
• SILVASA 3,00,000 nos.

MARKET STRUCTURE:
Aluminum production is expensive and requires heavy capital investment. Most of the key producers are major corporations and the business is concentrated, not fragmented. As indicated above, a recent trend is for major firms to invest in smelting operations which are closer to power sources. As direct results, older aluminum operational facilities are closing down as the older sites are no longer cost effective. Norse Hydro, for example has terminated approximately a quarter million tons of capacity in Northern Europe in favor of cheaper Middle East based operations. Alco has made similar moves. Industry experts estimate that up to 4 million tons of annual aluminum capacity from older facilities could be shut down in the next 3 to 4 years. How aluminum is used.
SEGMENT WISE USEGE OF ALUMINIUM

FULLY INTEGRATED OPERATION: SIGNIFICANCE
STRATEGIC ADVANTAGE

ACTIVITY FLOW CHART FOR ROLLED PRODUCT:

EXTRUSION PRODUCTION PROCESS:

ACTIVITY FLOW CHART FOR EXTRUSION PRODUCT

ACTIVITY FLOW CHART FOR PROPERZI-WIRE RODS

THE SWOT ANALYSIS OF HIL.

STRENGTH
 Global brand image.
 Cost effective producer.
 Sound financial position.
 A high degree quality consciousness is the core competence of the company, ISO 9001 and ISO 14001 have added more prestige to the company.
 Integrated production facility at Renusagar power plant.
 Company has a well-established distribution network, covering a geographically wide and scattered market.
 A number of Brownfield & Greenfield projects.
 Industrial peace as, there has been no major strike in last 22 year.
 A well focused human resources development.
 Serve maximum customer satisfaction.

WEAKNESS
 Present production capacity is not adequate to meet the rising high demand.
 Technology is not upgraded to mark as compare to global giants in aluminium industry.

OPPORTUNITY
 R & D collabratation with universities and another research organization.
 More emphasis on downstream production of value added products.
 Recycling should be adopted as routine production.
 Raising more finance from marketing for more acquisition and merger for consolidating position in the global market.
 Aluminium, continuous to be strong with a growth in transportation sector 16%, construction15%, passenger car 25%, two wheeler segments 14% respectively during FY07.

THREATS
 Strong domestic and global competitors, such as TATA, POSCO, MITTLE, ESSAR .
 Innovative revolution in plastic and steel industry.
 Reduce in Exide duty.
 Fall in price of Al. In neighbor country.

SWOT ANALYSIS OF SUPPLY CHAIN
STRENGTH
 Product based marketing channel.
 Strong dist. channel based on geographically wide & scattered market of India..
 Flexible distribution process for customers via direct sales and indirect sales.
 Company made more than 50% direct sales.
 Convenient road transportation.

WEAKNESS
 Not tapped all the potential areas especially in eastern and southern zone.
 A 50-40% sale depends on indirect marketing.
 The present distribution system is not adequate to meet the demand of aluminium in the coming years. It is in this light, that the present dist. system needs to be updated. Certain recommendations, with regard to the same have been suggested ahead.

OPPORTUNITY
 The demand of the company’s products is rapidly increasing. Thus, there is a necessity to expand the dist. network to avail the benefits of the fast growing market.
 Indirect sales should be converting in direct sales through TM sales force.

THREAT
 The major threat is from the competitors like BALCO, NALCO etc. because the company may lose its market leader position , if it does not take timely steps to modify its present distribution system in the wake of fast growing demand
SUGGESTIONS/RECOMMENDATIONS/CONCLUSIONS
Certain recommendations with regard to distribution channel of HIL are as under:
(A) Northern zone offers the most lucrative sales in last financial year.. In the light of such high sales driven by the factors such as heavy investments in infrastructures and related industries – machinery, transportation etc. In this zone our more than 65% sales depends on indirect sales. So that our focus should convert indirect sales to direct sales. Our effort should be here increase the depots in proportionate way, and also made appointment TM’s and RM’s.

(B) Southern zone is also the fast growing market for the company. The zone offers bright prospects to company in terms of future demand driven by rapid industrial expansion. In this zone our more than 60% sales depends on direct sales and also we face cutthroat competition. In maintain the sales need of continuous market research in regard to distribution channel & appoint stockiest instead of consignment agents.

(C) Western zone is the key market of the company. This zone is the most advanced zone in industrialization in the country. In this zone our 65%(Approx.) Sales are through direct sales.
Analysis of sales data, present depots, stockiest & consignment agents, 35% of the sales in this zone is indirectly depending upon consignment agents & stockiest. The demand of this zone is very high. To optimize in this key zone, the company should established additional depots in that areas- Ahmadabad & Nagpur for enhancing direct sales.

(D) In eastern zone company’s, indirect sales is approx. 70%. Such a heavy indirect sales reflects that the company is not indirect contact of its customers and their worries and feedback and these are most essential factors for improving level of sales.

In direct sales is not helpful to create, grow & retain the customers. So making the sales customer oriented and to improve the sales, the company can take the following initiatives-
 Assign sales representatives to contact all prospects in this area.
 Design a sale promotion complains focusing on brand awareness.
 Appoint a regular sales representative with each stockiest.
 Shift to retail format of business by owning aluminium galleries in malls.

• LIMITATIONS OF STUDY

• The duration of practical training was just of four weeks. It was not sufficient.
• Due to heavy engagement of the top management people and other personnel, many other information could not be collected within the limited span of time.
• To maintain secrecy, the company people do not provide various types of information, such as actual sales to various customers, zone wise sales, depot setup cost, depot handling cost etc.
• Their recommendations are the outcome of an analysis made individually.
• Another analysis may arrive at certain other recommendations after using same data.

 So, that it is advisable for the company to examine the various recommendations, before going ahead with any of their implementations.

BIBLIOGRAPHY

MAGAZINES:
• Impex Times
• FIEO News
• Aluminium International Today
• Aluminium Times
• Aluminium Now
• Incale 2
• Incale 3
• Annual report (07-08), Hil

• Induction guide , (training centre )

• Principles of marketing, “kotler & Armstrong”.

• INTERNET:
• http://www.algomtl.com
• http://www.go4worldbusiness.com
• http://www.unzco.com/basicguide
• http://dgftcom.nic.in
• http://www.fieo.org
• http://www.airportsindia.org.in
• http://www.indiandata.com/trade_policy/export_procedures
• http://www.wikipedia.com/logistics
• http://www.google.co.in/
• http://www.hindalco.com/products/rolled_products
• http://www.hindalco.com
• http://www.novelis.com
• http://www.adityabirla.com

ANNEXURE

APPLICATION OF ALUMINIUM IN TRANSPORT
SECTOR
Country % of consumption
Europe 29%
Japan 30%
US 28%
Canada 28%
Australia 25%
India 16%

Global Aluminium Production Growth forecast (mln tpa)

Year Actual Forecast
1985 15.5
1995 19.7
2005 31.4
2010 41.3
2015 50.2

PRIMARY ALUMINIUM PRODUCTION & CONSUMPTION BY MAJOR COUNTRIES IN 2005

Country Production (KT) CONSUMPTION(KT)
Norway 1376 246
Brazil 1499 759
Australia 1903 380
Canada 2894 803
USA 2480 6143
Russia 3647 946
Chain 7806 7119

PER CAPITA CONSUMPTION OF ALUMINIUM

COUNTRY CONSUMPTION (kg/person)
JAPAN 32.0
USA 31.9
GERMANY 31.6
CANADA 31.2
ITLY 29.5
FRANCE 21.4
AUSTRALIA 21.2
UK 15.0
CHAINA 6.5
BRAZIL 4.1
INDIA 1.1

INDIA-User Segment’s Growth FY07 over FY06

User Segment FY05 FY06 Change %
Electrical 398 490 23
Transport 234 308 32
Built. & Const. 135 165 22
Consumer Durable 46 53 15
Packing 47 51 9
Indus. Machinery 37 41 11
Others 37 41 11
Total 934 1149 23

Major Aluminium Producer Industries in India.

Company Ownership Location Capacity
Hindalco AB Group Renukoot
Alpuram
Hirakud
Belgaum 345,000
14,000
65,000
31,000
NALCO Public Sect. Angul 345,000
BALCO Sterlight Korba 350,000
MALCO Sterlight Mettur 40,000

EXTRUSIONS CAPACITY, PRODUCTION & DEMAND 1991-2020(MT)

Particulars 91-92 99-00 03-04 2010 2020
Capacity 122000 190000 202000 202000 400000
Production 61000 109000 132000 188000 370000
Domestic Demand 60000 105000 117000 166000 325000
Export Nil 4000 15000 22000 45000
Excess Capacity 62000 81000 70000 14000 30000

CONSIGNMENT AGENTS & STOCKIEST

ZONE WAREHOUSES No of CONSIGNMENT AGENTS No of STOCKIEST
EASTERN 2 6 8
NORTHERN 5 - 32
SOUTHERN 3 12 20
WESTERN 3 26 24

Primary metal customer of Hindalco:-
Primary metal customer are always competitor for Hindalco Industry Because after purchasing of Primary metal they manufacture Rolled product or Extrusion product. So these company are competitor for Hindalco in Extrusion product and Rolled product.
Warehouse problems
Major problem
• Dependence on other department
• Transpotation
• Space

Dependence on other department: it is the nature of the warehouse department and it cannot do any thing for this as any delay in related department can add to problem in warehouse.

Transpotation: it arises due to following factors

Space constrane: due to above factors space arise as a big problem
Minor problem
• Slowdown
• Defence delay
• Natural calamity

WAREHOUSE ACTIVITES NO ADVANCE PLANNING

After packing feed the product

Marketing dept. DISTRIBUTION ACCORDING TO ORDER

Grouping MAIN PROBLEMATIC AREA
HIRING SLIP
Transportation section LOADING SLIP

Loading at godown

Factory gate pass

PACKING

To contain To protect to preserve to present to dispense
The product the product the product the product the product
MAJOR PROBLEMS:
NO coordination with the store department.
NO forecasting
Supply chain of hindalco

Mines

Production

Hold
Marketing coordination Release

Warehouse

Dispatch
Logistics
Godown

FINDINGS & RECOMMENDATIONS
Findings
1. Hindalco is the leading exporter of Aluminum Semi-Finished products in India.
2. FIEO (Federation of Indian Export Organization) has awarded Hindalco as a Five Star Trading Houses on their export achievements.
3. Hindalco is following all the norms as per Central Excise & Customs and other government rules & regulations in the export process.
4. Hindalco is following positive and proactive approach towards export.
5. Hindalco is exporting all over the world, from underdeveloped countries to advance countries.
6. There are approx. 10,000 employees in Hindalco from top to bottom level, then also company’s main focus is about safety, security and value as well as proper rules and regulations
7. Having huge network.
8. Easy availability of raw materials.
9. The manufacturing cost is very high because of high utilization of energy. Energy (Oil, Coal, Electricity) used at Renukoot is 47% of total manufacturing cost, while only electricity is used as 77.67% of total energy consumption.
Present distribution system and production capacity is not adequate to meet the present and near future demand.
10. Approximately 50% employees at operational level as well as middle are not satisfied by their job but they do not tell the reason.
11. Findings at Warehouse:
 Minor Problems- Nature Calamity
 Employee’s health problems
 Defense Delay (Inspection)
 Customer Denied
 Volumetric Problems
 Delay Packaging
 Changes in Market Scenario
 Dependency on other Departments
 (Production, Packaging, Transportation)
Major Problems: 1. Space
2. Transportation

Recommendations/Suggestions:
Hindalco is a reputed Aluminum industry in the world and its products are well accepted in the market but as we know that there is always a scope of improvement.
Following are the recommendations in all areas:
Sometimes order has been delayed due to rejection of partial quantity of the product due to quality problems and manufacturing defects. So, it is recommended that Hindalco should have to keep advance stock or backup products in their warehouse to overcome this problem and to execute the order on time.
 Some of the Caster product order is being delayed due to limited capacity of the Caster Plant. So, it is recommended that Hindalco should have to increase the capacity of their Caster Plant.
 Hindalco is using Oracle & IVL software system for making export documents. The working of this software is from Order management to Shipment. This process is time taking due to partly adoption of the software system. So, it is recommended that this software should have been start from Enquiry management to Shipment. It would ease in making documents in faster way manual interruption will be minimized.
 Sometimes there is unavailability of containers for any particular destination occurs. This problem have been overcome by helding a meeting and making a successful negotiation process from the shipping line companies for the arrangement of empty containers.
 Due to no advance planning there is a lot of problems in each department, mainly in warehouse. So, it is recommended that there should be a prior planning at the time of order booking in beginning.

“Speed of the boss is the speed of the team as well as speed of the organization”.

CONCLUSION:
Business is undergoing a strategic transformation companies require clear vision and an attunement to balance the need sustainable in doing sum. It is a pointer to the direction in which corporate strategies would need to change in order to make organization function a truly responsible.
In other words future belongs to only those organizations that undertake and imbibe well defined SCM. The globalization of SCM with goal of increasing competitive advantage, creating more value-added and reducing costs through global sourcing. In a highly competitive business environment a well established supply chain strategy absolutely essential for ensuring competitive edge in the market place. SCM is the most powerful tool for bringing innovations and maintaining price competitions which is a door step for transferring companies into a power house.