PROJECT REPORT ON MATERIAL S MANAGEMENT ESSAR STEEL ORISSA LIMITED PARADEEP, ORISSA 8 MTPA INTEGRATED IRON ORE PELLET PLANT UNDER THE GUIDANCE OF
MR Ravindra Moharana (Sr.Manager )
RAVENSHAW MANAGEMENT CENTRE For the partial fulfilment of Master of Business Administration
Session 2009-11 1|Page
PREPAIRED BY: -
SAYED MUNIR NOOR
Acknowledgement
This project report in its present form and state is the outcome of the study of the “MATERIALS MANAGEMENT IN ESSAR STEEL”, Paradeep, to understand the process of materials management, as part of our summer training.
I am grateful to Mr. ParthaSarthi Mishra, HR (Head), who gave me the golden opportunity to do our project in a company like ESSAR STEEL.
I would like to thank Mrs. Raj Laxmi, HR manager who gave me this opportunity to do my project in ESSAR STEEL.
I am very very much much than thankf kful ul to my guid guidee Mr. Mr. Ravi Ravind ndra ra Moha Mohara rana na Snr.Manager (Stores) who has been a constant source of inspiration and learning. learning. With his guidance and support I could successfully successfully complete my project.
I would like to thank all the members of ESSAR STEEL, Paradeep who gave their valuable time and helped us in completing my project in due time.
I would also like to thank Mr. Sashi Bhusan Mohanty who helped me to do my project in a company like ESSAR STEEL.
Fina Finall lly, y, I like like to than thank k my fami family ly and and frie friend ndss who who help helped ed me in completing this project successfully.
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PREPAIRED BY: -
SAYED MUNIR NOOR
Acknowledgement
This project report in its present form and state is the outcome of the study of the “MATERIALS MANAGEMENT IN ESSAR STEEL”, Paradeep, to understand the process of materials management, as part of our summer training.
I am grateful to Mr. ParthaSarthi Mishra, HR (Head), who gave me the golden opportunity to do our project in a company like ESSAR STEEL.
I would like to thank Mrs. Raj Laxmi, HR manager who gave me this opportunity to do my project in ESSAR STEEL.
I am very very much much than thankf kful ul to my guid guidee Mr. Mr. Ravi Ravind ndra ra Moha Mohara rana na Snr.Manager (Stores) who has been a constant source of inspiration and learning. learning. With his guidance and support I could successfully successfully complete my project.
I would like to thank all the members of ESSAR STEEL, Paradeep who gave their valuable time and helped us in completing my project in due time.
I would also like to thank Mr. Sashi Bhusan Mohanty who helped me to do my project in a company like ESSAR STEEL.
Fina Finall lly, y, I like like to than thank k my fami family ly and and frie friend ndss who who help helped ed me in completing this project successfully.
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CERTIFICATE This is to certify that Mr. Sayed Munir Noor bearing roll no .RMC .RMC-M -MBA BA 02 028/ 8/09 09-1 -11, 1, a firs firstt year year st stud uden entt of Rave Ravens nsha haw w Mana Manage geme ment nt Centr Centre, e, Cutt Cuttack ack has has succe successf ssful ully ly comp comple lete ted d summer summer interns internship hip report report on the projec projectt titled titled,, “MATER “MATERIAL IALS S MANAGEMENT IN ESSAR STEEL” at ESOL Paradeep, for partial fulfilment of the award of MBA degree under my guidance. To the best of my knowledge and belief, the work has not been subm su bmit itte ted d anyw anywhe here re else else for for the the awar award d of any any degr degree ee or discipline.
Date:
Ravindra Moharana
Place: Paradeep
Snr.Manager Snr.Manager (stores) 3|Page
ESSAR STEEL
DECLARATION
I do here hereby by decl declar are e that that this this piec piece e of Proj Projec ectt Repo Report rt enti entitl tled ed “MATERIALS MANAGEMENT IN ESSAR STEEL” is being submitted by me in part partia iall fulf fulfil ilme ment nt of the the MBA MBA prog progra ramm mme e in Rave Ravens nsha haw w Management Centre, Ravenshaw University. Thi This s repo report rt is my orig origin inal al piec piece e of work work done done for for my acad academ emic ic purpose only and no part of it has been submitted for any other purpose nor published anywhere else in any form till date.
Place:
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Date : Noor
Sayed Munir
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Contents ESSAR AT A GLANCE............................................... ....Error! Bookmark not defined. Genesis and evolution.....................................................Error! Bookmark not defined. Corporate profile.............................................................Error! Bookmark not defined. Project.............................................................................Error! Bookmark not defined. Essar Projects Limited drives our businesses in the construction sector. We own one of Asia’s largest banks of sophisticated construction equipment........Error! Bookmark not defined. Power..............................................................................Error! Bookmark not defined. Communications..............................................................Error! Bookmark not defined. Shipping ports & logistics................................................Error! Bookmark not defined. Current status........................................................................Error! Bookmark not defined.
layout of ESSAR paradeep plant...........................................................................................17 MATERIALS MANAGEMENT.................................................Error! Bookmark not defined. Areas of Concentration.......................................................Error! Bookmark not defined. Goals............................................................................... Error! Bookmark not defined. Quality Assurance...........................................................Error! Bookmark not defined. Standards........................................................................ Error! Bookmark not defined. Promoting Sustainability..................................................Error! Bookmark not defined. Improving circulation infrastructure..................................Error! Bookmark not defined. Benefits...........................................................................Error! Bookmark not defined. FUNCTIONS AND DUTIES OF STORES DEPARTMENT:-.......Error! Bookmark not defined. standard operating procedure................................................................................................27 Safety measures.................................................................Error! Bookmark not defined. Perpetual Inventory.........................................................Error! Bookmark not defined. A monthly stock count procedure would involve a complete stock count i.e. counting the entire inventory. A weekly perpetual inventory system on t he other hand would involve 6|Page
counting some of the quantity on a weekly basis such that the entire stocks are counted at least twice a year or once every quarter. Inventory Schedule.. .Error! Bookmark not defined. Inventory Count Sheets...................................................Error! Bookmark not defined. Cut Off Procedures..........................................................Error! Bookmark not defined. Third Party Stocks...........................................................Error! Bookmark not defined. Comparison with System Stock.......................................Error! Bookmark not defined. Variance Analysis............................................................Error! Bookmark not defined. physical verification of capital goods .....................................................................................41 inventory of steel....................................................................................................................54 figures....................................................................................................................................5 6 physical verification of steel..................................................................................................58 inventory of cement..............................................................................................................60 stacking procedure of cement............................................................................................61 inventory of diesel...............................................................................................................64 stacking procedure of diesel...............................................................................................64 problems.............................................................................................................................65 suggestions.........................................................................................................................65 stores credit to management..............................................................................................66 references.........................................................................................................................67
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ESSAR AT A GLANCE
Genesis and evolution The Essar Group was founded in 1969, by brothers Mr Shashi Ruia and Mr Ravi Ruia. The 21st century for the Group has been all about consolidating and growing the businesses
The Ruia family’s origins are in Rajasthan. Sometime in the 19th century, they moved to Mumbai and set up their own business. In 1956, Mr Nandkishore Ruia, father of Mr Shashi Ruia and Mr Ravi Ruia, moved to Chennai, capital of the south Indian state of Tamil Nadu, to begin independent business activities. He mentored his two sons in the intricacies of business. When Mr Nandkishore Ruia passed away in 1969, the brothers laid the foundation of the Group. The Essar Group began its operations with the construction of an outer breakwater in Chennai port. It quickly moved to capitalize on every emerging business opportunity, becoming India’s first private company to buy a tanker in 1976. The Group also invested in a diverse shipping fleet and oilrigs, when the Government of India opened up the shipping and drilling businesses to private players in the 1980s. Then, in the 1990s, Essar began its steelmaking business by setting up India’s first sponge iron plant in Hazira, a coastal town in the western Indian state of Gujarat. The Group went on to build a pellet plant in Visakhapatnam, and eventually a fully integrated steel plant in Hazira. Through the 1990s, with the gradual liberalization of the Indian economy, Essar seized every opportunity that came its way. It diversified its shipping fleet, started oil & gas exploration and production, laid the foundation of its oil refinery at Vadinar, Gujarat, and set up a power plant near the steel complex in Hazira. The construction business helped the Group build most of its business assets. Essar also entered the GSM telephony business, establishing India’s first mobile phone service in Delhi (branded Essar Cell phone) with Swiss PTT as the joint venture partner. The 21st century for the Essar Group has been all about consolidating and growing the businesses, with mergers and acquisitions, new revenue streams and strategic geographical expansion
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The Essar spirit The Essar Group has been foraying into new international markets, and exploring new business areas in a bid to keep its entrepreneurial spirit alive, and to keep growing
VISION we will be a respected global entrepreneur, through the power of positive action. MISSION We are committed to innovative growth, through our personal passion, reinforced by a professional mindset, creating value for all those we touch. Spirit The Essar Group has changed significantly in recent years and continues to evolve, to keep pace with the changing times. We have undertaken a sustainable journey of transformation by foraying into new international markets, and exploring new business areas in a bid to keep our entrepreneurial spirit alive, and to continue growing. To mark the phenomenal growth witnessed over the last four decades, the Group recently unveiled its new brand identity marking a very important milestone in its journey and reflecting a new beginning for the Group. A new brand identity reinforces all the positives to fulfil our vision to be a global entrepreneur through the power of positive action. We aim to have a robust value system comprising positive attitude, positive action and positive achievement. We endeavour to create enduring value for customers and stakeholders in core manufacturing and service businesses, through world-class operating standards, state-ofthe-art technology and the ‘positive attitude’ of our people. Privately owned and professionally managed, the Group is judiciously invested in the 9|Page
commodity, annuity and services businesses. Forward and backward integration, the use of state-of-the-art technology, in-house research and innovation have made Essar Global a force to reckon with in each of its businesses. Finally, the Essar way is all about keeping its entrepreneurial spirit alive, and to keep growing with a passion to progress and the power to succeed with a renewed strength of purpose and commitment.
Corporate profile Moving beyond Indian frontiers, the Essar Group continues to grow internationally through focused strategies
The Essar Group is a multinational conglomerate and a leading player in the sectors of Steel, Oil & Gas, Power, Communications, Shipping Ports & Logistics, Construction and Minerals. With operations in more than 20 countries across five continents, the group employs 60,000 people, with revenues of about USD 15 billion. Essar began as a construction company in 1969 and diversified into manufacturing, services and retail. Over the last decade, it has grown through strategic global acquisitions and partnerships, or through Greenfield and Brownfield development projects, capturing new markets and discovering new raw material sources. Today, the Group continues to expand its global footprint, focusing on markets in Asia, Africa, Europe, the Americas and Australia. Essar invests significantly in the latest technology to drive forward and backward integration in its businesses, and on leveraging synergies between these businesses. It also focuses on in-house research and innovation to be a low-cost manufacturer with high quality products and innovative customer offerings. Alongside its ambitious business pursuits, Essar has been committed to its social responsibility. The Group runs community outreach initiatives in all its plant locations, with a focus on education, healthcare, environmental and agricultural development, and selfemployment. Essar is committed to sustainable business practices. Our HSE (Health, Safety and Environment) management system is on par with global standards. We are also taking climate change initiatives to reduce our carbon footprint. This includes several CDM (Clean Development Mechanism) projects that can earn the company CER (Certified Emission Reduction) credits. A growing number of our businesses with new businesses joining the list every year are certified to international environment standards, like ISO 9001 / 14001, and health and safety standards, like OHSAS 18001. The Essar Group is widely regarded as a responsible and conscientious global employer. It has experience in managing businesses in different geographies with a culturally diverse workforce. This is why its people practices are sensitive to cross-cultural nuances. The Group’s people strategy is focused on promoting a learning culture that continually enhances the professional skills of its employees.
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Board of directors Listed here are the promoter directors of the Essar Group. Each company under the Group is independently run by a team of professionals
promoter Directors
Mr Shashi Ruia Chairman Essar Group
Mr Ravi Ruia Vice Chairman Essar Group
Mr Prashant Ruia Group Chief Executive Essar Group
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Mr Anshuman Ruia Promoter Director Essar Group
Ms Smiti Kanodia Promoter Director Essar Group
Mr Rewant Ruia Promoter Director Essar Group
Management team
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Mr J Mehra — Director, Essar Group Mr Malay Mukherjee — CEO, Steel Business Group Mr Naresh Nayyar — CEO, Energy Business Group Mr Shishir Agarwal — CEO, Exploration & Production Business Mr Sanjay Mehta — CEO, Shipping & Logistics Business Group Mr Rajiv Sawhney — CEO, Telecom Business Group Mr Aparup Sengupta — CEO, Aegis Mr Alwyn Bowden — CEO, Projects Business Group Mr Pradeep Mittal — CEO, Minerals & Mining Business Mr Vikash Saraf — Director, Strategy & Planning, Essar Group Mr VG Raghavan — CFO, Essar Group Mr Adil Malia — Group President, Human Resources Mr SM Lodha — Group President, Assurance and Cost Control Mr Sunil Bajaj — Head, Corporate Relations Group
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Project Essar Projects Limited drives our businesses in the construction sector. We own one of Asia’s largest banks of sophisticated construction equipment With over 5,000 people, we are a global engineering, procurement and construction (EPC) company headquartered in Dubai, with offices in India, China and the Czech Republic. We honed our skills in the construction of industrial plants and infrastructure as the turnkey EPC Company for most of the Essar Group’s world-class projects and supporting infrastructure. Marine construction is one of our special strengths. Indeed, the very origin of the Essar Group was in specialized marine construction. We have built 320,000 bpd of refining capacity and developed over 10 million tons of steel capacity. We have laid more than 5,000 km of pipelines and developed 1,200 MW of power projects, and are developing another 4,800 MW. Our offshore EPCI capabilities currently execute a USD 220 million project for ONGC. We own over 3,000 nos. construction equipment worth over USD 250 million. We have 12,000tpa (tons per annum) of fabrication facility with waterfront load-out facility and also have a dedicated Engineering Centre specializing in Engineering and Design for the Process and Industrial sectors, with over 1,200 engineers. With over USD 6 billion procurement capability, we have global procurement support in the Middle East and China. The ISO 9001:2000 certified pipeline division of our construction business unit is a specialist in onshore, offshore and cross-country pipelines, from construction to commissioning. The pipeline division holds the distinction of building the world’s second longest slurry pipeline – Essar Steel’s 267km Bailadilla-Vizag slurry pipeline. Our customers can rely on our skilled, engineering team, large bank of the latest construction equipments, and our talent for scouting the globe to procure the best materials and equipment at competitive prices. Our long and impressive list of clients includes most major Indian ports, the National Highway Authority of India, the Gujarat Water Supply and Sewerage Board, the Gas Authority of India, Hindustan Petroleum and ONGC. Our expertise is also internationally recognized, whether for the pipelines we laid in Qatar or the cold rolling mill we built in Indonesia. We have won contracts from government agencies through local and international competitive bidding, meeting the stringent requirements of the World Bank and the Asian Development Bank. With four decades of project management expertise, Essar Projects Limited is strategically placed to support the infrastructure explosion in India and abroad
Oil and Gas
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Essar Oil operates a fully integrated oil company of international size and scale in India
Essar Oil's assets include developmental rights in proven exploration blocks, a 10.5 mtpa refinery on the west coast of India and over 1,300 Essar-branded oil retail outlets across India. Plans are under way to increase its exploration acreage in various parts of the globe, expand its refinery capacity to 36 mtpa, and open 3,000 outlets countrywide. Our global portfolio of onshore and offshore oil and gas blocks, with about 70,000 sq km is available for exploration. We have over 300,000 bpd (barrels per day) of crude refining capacity that is being expanded to 750,000 bpd, with a goal to reach a global refining capacity of 1 million bpd. We have a 50 percent stake in Kenya Petroleum Refineries Ltd., which operates a refinery in Mombasa, Kenya, with a capacity of 80,000 bpd. Our Exploration and Production (E&P) business has participating interests in several hydrocarbon blocks for exploration and production of oil and gas. This includes the Ratna and R-Series blocks on Bombay High, and an E&P block in Mehsana, Gujarat, which has currently started commercial production. It has also been awarded a Coal Bed Methane (CBM) block at Raniganj in West Bengal, and two more E&P blocks in Assam, India. The overseas E&P assets include three onshore oil and gas blocks in Madagascar, Africa, and one offshore block each in Vietnam and Nigeria. We have a 10.5 mtpa refinery at Vadinar in Gujarat, which started commercial production on May 1, 2008. It has been built with state-of-the-art technology and has the capability to produce petrol and diesel suitable for use in India as well as advanced international markets. It will also produce LPG, Naphtha, light diesel oil, Aviation Turbine Fuel (ATF) and kerosene. The refinery has been designed to handle a diverse range of crude — from sweet to sour and light to heavy. It is supported by an end-to-end infrastructure setup including SBM (Single Buoy Mooring), crude oil tankage, water intake facilities, a captive power plant (currently 120 MW, being expanded to 1,010 MW), product jetty and dispatch facilities by both rail and road. The refinery is strategically located in Vadinar, a natural all-weather, deep-draft port that can accommodate Very Large Crude Carriers (VLCCs). Vadinar also receives almost 70 percent of India’s crude imports. Post its expansion to 36 mtpa, the refinery will run at a Nelson Complexity of 12.8. This means it will be able to refine all varieties of crude, producing Euro 5 grade fuels. It will also be among the largest single location refineries in the world thus leveraging on economies of scale. .
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Power Essar Power operates four power plants with a combined capacity of 1,220 MW in three locations across India
Essar Power has two gas-based plants, of 500MW and 515MW capacities in Bhander and Hazira respectively, a 120MW co-generation plant in Vadinar and an 85MW plant in Algoma. Work is currently under way to expand the current generation capacity of 1,220MW to 6,100MW by 2012, with a target to reach 11,470MW in the near future. The company will set up three coal-based plants of 1,200MW each in Gujarat, Madhya Pradesh and Jharkhand, aggregating 3,600 MW. An additional 1,280MW is also under construction – 1160 MW in Gujarat and 120MW in Orissa – to supply power and steam to the expanded refinery. An additional 5,370 MW is under development. As the first private company with a license to enter the transmission and power trading segments, we are now a fully integrated, end-to-end player in the power sector. By using the latest technology and equipment, we generate and supply power at very competitive price points. Essar currently has complete fuel linkages secured for all projects under execution. We also have the capability to execute power projects for other companies. Essar power is exploring opportunities for new projects based on thermal, wind and hydro energy. We are also committed to reducing emissions from our plants and earning carbon credits. The 500MW combined cycle power plant at Hazira is eligible for Certified Emission Reductions (CERs) under the Kyoto Protocol's Clean Development Mechanism (CDM). The investments made towards the projects under execution are over USD 4 billion
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Communications Essar Telecom Infrastructure is one of the largest independent telecom infrastructure service provisioning companies in the country.
Vodafone-Essar is a joint venture of Essar Communication Holdings Ltd and the UK-based Vodafone Group. It is one of India’s largest cellular service companies. We have over 100 million telecom subscribers in India and Kenya. We have majority stake in the telecom assets of the Dhabi Group in Uganda and the Republic of Congo. We operate integrated IT enabled services through the Aegis brand name, with a presence in interaction services, back office services and value-added services. Aegis operates in 40 locations and employs over 40,000 employees in India and the US, with expertise in the telecom, insurance, banking and healthcare domains. We have launched India's first countrywide chain of multi-brand and multi-service outlets in the telecom retail space. The MobileStore Ltd currently runs 1,300 outlets, branded “The MobileStore”. In the next two years, over 2,500 outlets will come up across 650 cities. Essar Telecom Infrastructure is one of the largest independent telecom infrastructure service provisioning companies in the country. It builds telecom tower infrastructure and shares it with several telecom operators in India. It has a pan-India presence in telecom tower infrastructure with more than 4,500 telecom towers operational. Essar has a 14 per cent stake in Indus Towers, India’s largest tower company, which has over 100,000 towers. Essar Communications Holdings Limited acquired a 49 per cent stake in Econet Wireless International Limited by subscribing to fresh capital in the company. EWI has a 70 per cent shareholding in Econet Wireless Kenya. Essar and Econet Wireless Kenya have launched 'yu' — Kenya’s third mobile cellular network. This is a GSM-based mobile services network in Kenya with close to a million subscribers.
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Shipping ports & logistics Essar is an end-to-end logistics services provider with investments in ports and terminals, logistics services, sea transportation and oilfield drilling services
Our integrated business model provides opportunities to cater to the complete supply chain management services to clients in oil and gas, steel and power generation industries. We are one of India’s largest operator of ports and, building a cargo handling capacity (both dry and bulk cargo) of over 150 million tons. Our ports and terminals business operates a crude oil and petroleum products terminal at Vadinar and includes the construction of a dry bulk port at Hazira and a coal jetty at Salaya, all in the state of Gujarat. The Vadinar terminal, is an all-weather, deep-draft port, which provides crude oil and petroleum products storage, handling and terminal services. The port has a Single Point Mooring system capable of handling crude capacity of up to 27mmtpa, and marine facility for export of petroleum products of up to 6.5mmtpa. The dry bulk port being constructed at Hazira involves setting up a 30mtpa all-weather, deep-draft port and jetty facility. The port will have a berth of 550 meters length, and an alongside depth of 12.5 meters. The proposed berth will handle the import of iron ore, pellets, coal, limestone and export of finished steel products. The port facility at Salaya comprises setting up a 10mtpa marine material handling facilities to cater to the need of imported coal requirement and export of petroleum coke. Essar's logistics business provides end-to-end logistics services – from ships to ports, lighter age services, intra-plant logistics and dispatch of finished products. We own trans-shipment assets to provide lighter age support services, and onshore and offshore logistics services. We also operate a fleet of 4,200 trucks (38 of which we own) to provide inland transportation of steel and petroleum products. Our sea transportation business provides transportation management services for crude oil and petroleum products, and dry bulk cargo to the global energy, steel and power industries. With an experience of more than 220 ship years, we own a diverse fleet of 25 vessels, and a further 12 new building vessels are on order at an investment of over USD 0.6 billion. Our oilfields drilling business offers onshore and offshore contract drilling, and offshore construction services. We offer contract drilling services to global oil majors, with a fleet of 13 onshore rigs and one super-specialty semi-submersible offshore rig; 2 new jack-up rigs on order 18 | P a g e
STEEL
Essar Steel is a global producer of steel with a f ootprint in India, Canada, USA, the Middle East and Asia
We are a fully integrated flat carbon steel manufacturer — from iron ore to ready-to-market products with a current capacity of 8.6 million tonnes per annum (MTPA). With our aggressive expansion plans in India, as well as Asia and the Americas, we aim to achieve a capacity of 14 MTPA by 2011-12. Our products find wide acceptance in highly discerning consumer sectors, such as automotive, white goods, construction, engineering and shipbuilding. Essar Steel is one of India's largest exporters of flat products, exporting to the highly demanding US and European markets, and to the growing markets of South East Asia and the Middle East. A number of major client companies have approved our steel for their use, including Caterpillar, Hyundai, Swaraj Mazda, the Konkan Railway, and Maruti Suzuki. Essar Steel has acquired extensive quality accreditations. Our lean team gives us one of the highest productivities and lowest manpower costs among steel plants internationally Seamless integration A major strategic advantage is our high level of forward and backward integration. We are totally integrated - from raw material to finished products, adding value at every stage of the manufacturing process. Bailadilla facility: Iron ore beneficiation At Bailadilla, where some of the world's richest and finest ore is available, we have set up a beneficiation plant of 8 MTPA capacities, which ensures the highest quality iron ore. The iron ore slurry is pumped through a 267 km pipeline (the second longest in the world) to the pellet plant, yielding advantages in quality, cost and real time inventory management. Visakhapatnam facility: Pelletisation The slurry is received at our pellet plant at Visakhapatnam, which has a capacity of 8 MTPA, providing vital raw material for the steel plant at Hazira. Hazira facility Our steel complex at Hazira, Gujarat, houses a 5.0 MTPA sponge iron 19 | P a g e
plant, the world's largest gas-based sponge iron plant in single location. The plant provides raw materials for our state-of-the-art 4.6 MTPA hot rolled coil (HRC) plant, the first and largest of India's new generation steel mills. This plant is fed with inputs from four electric arc furnaces and three casters. The complex's sophisticated infrastructure includes independent water supply and power, oxygen and lime plants, a township and a captive port capable of handling up to 8 MTPA of cargo with modern handling equipment like barges and floating cranes Hazira Pipe Mill Hazira Pipe Mill is located at Hazira, Gujarat has a combined capacity of 0.6 MTPA of helical submerged arc welded (HSAW) and longitudinal submerged arc welded (LSAW) steel pipes along with internal and external coating f acilities of up to 2mn square meters annually. This pipe making facility is backed by external and internal anti corrosion coating facilities. Cold rolling complex At the other end of the value chain, our downstream facilities include a 1.4 MTPA cold rolling complex, which adds further muscle to our steel making facilities. The complex comprises two pickling lines of 1.4 MTPA capacity, a reversing mill and a 1.2 MTPA tandem mill, two galvanizing lines of an aggregate capacity of 0.5 MTPA, a batch annealing furnace of 0.7 MTPA, and a skin pass mill of 1.0 MTPA. This enables us to get into the genre of products that are tailor-made for the automotive, white goods, shipbuilding, agriculture and construction industries - segments that had been t he exclusive domain of a few international manufacturers. Essar now holds the leadership position in the cold rolling, galvanizing and pre-coated segments. Pune, Maharashtra We have a 0.6 MTPA cold rolling plant, a 0.5 MTPA galvanising plant, a 0.4 MTPA colour coating plant, and a 0.7 MTPA pickling line. Distribution outlets Essar Steel is the first steel company to set up an end user distribution chain for steel products under the brand name Essar Hypermart. It has a strong network of over 474 steel retail outlets. These outlets are conveniently located across the length and breadth of the country to cater to the customized requirements of small and medium enterprises. The hypermarts offer a comprehensive range of flat steel products for a variety of applications. Other product lines, like longs, structural, and tubular, are also being developed to make Essar Hypermart a one-stop-shop for steel products. Services (across India) Largest Steel Service Centre facilities in India with an annual capacity of 2.6 million tonnes located in Pune (Maharashtra), Hazira (Gujarat), Bahadurgarh (National Capital Region), and Chennai (Tamil Nadu). Canada facility: Essar Steel Algoma Established in 1901, Essar Steel Algoma is an integrated steel producer based in Sault Ste. Marie, Ontario, and Canada. The plant's current production capacity is 4 MTPA. Some of 20 | P a g e
the key equipment at the plant includes a low-cost, technologically advanced Direct Strip Production Complex (DSPC), a slab caster, a 106-inch strip mill (one of the widest in North America), a 166-inch plate mill, a cold mill and blanking facility that helps produce steel customized for client requirements, and a welded beam division. Indonesia facility: PT Essar Indonesia PT Essar is Indonesia's largest private sector flat products company, with a domestic market share of 35 percent and a history of process and product innovation. After a major expansion drive, its CR capacity has been enhanced to 0.4 MTPA and its newly set up galvanizing capacity is 0.15 MTP
Current status Algoma currently is the third largest steel producer in Canada (behind Dofasco and Stelco) both of which proved stronger corporate entities than Algoma. It remains the largest employer in Sault Ste. Marie and currently has 3500 employees at the main plant. Algoma now produces steel strip (i.e. plate and sheet type) which forms its main money maker along with its blanking operations and welded beams. Essar Steel is a worldwide producer of steel selling to countries such as India, Canada, United States and Asia. It is a fully integrated steel producer with a raw steel production capacity of approximately 2.8 million tons per year. Many of its products are sold in consumer sectors, such as automotive, white goods, construction, engineering and shipbuilding. [4] The plant's current production capacity is 4 million tonnes per annum (MTPA). Some of the key equipment at the plant includes a low-cost, technologically advanced Direct Strip Production Complex (DSPC), a slab caster, a 106-inch strip mill (one of the widest in North America), a 166-inch plate mill, a cold mill and blanking facility that helps produce steel customized for client requirements, and a welded beam division. Revenues are primarily derived from the manufacture and sale of hot and cold rolled sheet and plate. Algoma's products are used in the automotive, construction, energy, manufacturing, pipe and tube, and steel distribution industries. [1] The Direct Stripe Production Complex is a new addition to Essar Steel. DSPC is the newest thin slab caster coupled with direct hot rolling in North America. The Heat-Treated Plate facility provides heat treated products for abrasion resistant, ballistic and other specialty plate applications. First stage configured blanks and large profile welded shapes and profiles are also made. [4] Essar Steel Algoma confirmed June 15, 2009 they have successfully started up a new, 70 MW Cogeneration Facility. A final performance test on Saturday, June 13 confirmed the facility meets all necessary operating standards as required by the Ontario Power Authority. The cogeneration facility converts by-product fuels from the coke making and iron making processes into electricity and steam for the steelworks. [3] It features two 375,000 lb/hr boilers and a 105MW turbine combined with other related components such as a generator, a blast furnace gas holder, condensate and feed-water systems, a water treatment plant, a cooling tower, a transformer, and a distributed control system. Essar has set a precedent as the first integrated steel manufacturer in Canada to construct a cogeneration facility fuelled with by-product gas from the operation. [3]
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Essar Steel is the biggest employer in Sault Ste. Marie, Ontario, and Canada. They currently employ around 3,500 workers and have a major effect in the economy.
ESSAR ORISSA: The Essar group plans to invest Rs.15,000 crores for its upcoming steel plant in Orissa, with works for the plant set to start in January, a senior official said. The 6 million tonne integrated steel plant will be commissioned in 2011, B K Panda, project director of Essar Steel Orissa Ltd (ESOL), told reporters. The project would need some 2,000 acres of land. The company is negotiating with local landowners for acquiring some 1,100 acres of land. The Orissa government has given it 103 acres of land and the company expects some 200 acres from the government, Panda said. ESOL general manager Bikram Mohanty said local people have welcomed the plant. The state government and the district administration are also supportive, he said. Panda said the company plans to have socio-economic development programs in the region to help the living standard of the people. Essar also will follow the government guidelines in the rehabilitation of the people. The company would function in an eco-friendly fashion using even low grade iron ore for making pellets, which would be fed in blast furnaces. Currently, steel makers in the country dump low-grade iron ore, which can cause environmental pollution.
PROGRESS OF ESSAR STEEL ORISSA LTD(ESOL) A road has come up which is in its final stage it is expected to be completed within 3months. It will link the plant with the National Highway. A new helipad has been built which allows the landing of the chopper within ESSAR premises. A chimney has come up into existence and the 4mt pallete plant will be operational soon. The laying down of the pipeline is in the final stages. It will facilitate the the flow of slurry from paradip to dabuna which is around 250 kms. A conveyer belt has come into existence. The work of filtration building is in the final stages. The work of BALLI building is in the final stages. The captive power plant will soon be operational it is on its finishing stages. The CRS building has been completed and is operational now. 22 | P a g e
The MRS building work is on the final stages. The land acquisition process is going on at a rapid speed. We will soon acquire most of the land. Essar is paying a handsome amount of rupees 20 lakh per acre of land.
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MATERIALS MANAGEMENT Big text Materials management is the branch of logistics that deals with the tangible components of a supply chain. Specifically, this covers the acquisition of spare parts and replacements, quality control of purchasing and ordering such parts, and the standards involved in ordering, shipping, and warehousing the said parts.
Areas of Concentration Goals The goal of materials management is to consolidate and efficiently handle core services. It creates truck deliveries and service vehicle routes that reduce conflicts for vehicles and pedestrians. Delivery sites and loading docks are more effective and reduce redundancy. Cost is reduced when it comes to solid and hazardous waste removal, storage, and recycling. Utility infrastructure and service equipment relocation can improve aesthetics .
Quality Assurance A large component of materials management is ensuring that parts and materials used in the supply chain meet minimum requirements by performing quality assurance (QA). While most of the writing and discussion about materials management is on acquisition and standards, much of the day to day work conducted in materials management deals with QA issues. Parts and material are tested, both before purchase orders are placed and during use, to ensure there are no short or long term issues that would disrupt the supply chain. This aspect of material management is most important in heavily automated industries, since failure rates due to faulty parts can slow or even stop production lines, throwing off timetables for production goals.
Standards The other major component of materials management will be gradual movement toward compliance. There are standards that are followed in supply chain management that are important to a supply chain's function. For example, a supply chain that uses just-in-time or lean replenishment requires clarity. in the shipping of parts and material from purchasing 25 | P a g e
agent to warehouse to place of destination. Systems reliant on vendor-managed inventories may begin to acquire up-to-date computerized inventories and begin to explore robust ordering systems for outlying vendors to place orders on.
Promoting Sustainability Many business and institutional campuses have cluttered, noisy, and oftentimes inefficient service environments. Delivery trucks compete with pedestrians, loading docks are in plain sight, trash dumpsters sprout up, and lobbies, hallways, and stairwells are cluttered with unplanned storage. With forethought and creativity, these systems can reduce energy use and carbon emissions, minimize traffic congestion, streamline operational flows, and enhance aesthetics.
Improving circulation infrastructure Redundancy can be reduced and effectiveness is increased when service points are clustered to reduce the amount of redundancy. An effective materials management program can also resolve “island” approaches to shipping, receiving, and vehicle movement. Solutions can include creating a new central loading location, as well consolidating service areas and docks from separate buildings into one. Developing better campus circulation infrastructure also means re-evaluating truck delivery and service vehicle routes. Vehicle type, size, and schedules are studied to make these more compatible with surrounding neighbourhoods. This will reduce truck traffic, creating a safer environment for pedestrians and a more attractive environment for other uses.
Benefits An effective materials management plan builds from and enhances an institutional master plan by filling in the gaps and producing an environmentally responsible and efficient outcome. An institutional campus, office, or housing complex can expect a myriad of benefits from an effective materials management plan. For starters, there are long-term cost savings, as consolidating, reconfiguring, and better managing a campus’ core infrastructure reduces annual operating costs. An institutional campus, office, or housing complex will also get the highest and best use out of campus real estate. An effective materials management plan also means a more holistic approach to managing vehicle use and emissions, solid waste, hazardous waste, recycling, and utility services. As a result, this means a “greener,” more sustainable environment and a manifestation of the many demands today for institutions to become more environmentally friendly. In fact, 26 | P a g e
thanks to such environmental advantages, creative materials management plans may qualify for LEED Innovation in Design credits . And finally, an effective materials management plan can improve aesthetics. Removing unsafe and unsightly conditions, placing core services out of sight, and creating a more pedestrian-friendly environment will improve the visual and physical sense of place for those who live and work there.
Introduction - Why Stocks are Held Virtually every enterprise finds it necessary to hold ‘stocks’ (or ‘inventory’ ) of various items and materials. That is because it would be practically impossible to operate with only one of each item to be sold or used in manufacture or used in office work. A ‘reserve’ or a ‘fund’ or ‘inventory’ of each item or material used or sold frequently is therefore ‘maintained’, so that as items or materials are sold or used they can be replaced or replenished from the stocks ‘held in reserve’ . Let us take a footwear shop as an example to make these matters quite clear to you:There will be a variety of different shoes, boots, etc, on display - both in the shop’s windows and inside the shop itself. It would be very inconvenient and time-consuming for a shop assistant to have to remove the footwear from the display each time a customer wished to try on a pair. And, in any case, only one size and colour of each style or type of shoe, boot, sandal, etc., is likely to be on display at any one time. Instead, when a customer expresses interest in a particular style, a shop assistant will ask the size he or she usually wears and the colour preferred, and will then try to find the right size and colour from the pairs of footwear held in reserve. In many cases pairs of popular items in the most commonly asked for sizes will be kept inside the shop itself, on shelves or in cabinets. But other pairs will be kept in another room - or perhaps in more than one room - to which the shop assistant can go to find the footwear concerned; that room is the ‘ store room’ or ‘stock room’ . When a pair of shoes or other footwear is sold from those inside the shop, it must be possible to replace that pair quickly, whenever possible, by another pair held in the store or stock room. No business could operate efficiently if every time it sold an item or used up an item in manufacture, it had to order a replacement from the supplier or manufacturer! Of course, from time to time, items can ‘run out of stock’ but, as you will learn during this Program, efficient stock control will reduce or eliminate such happenings, and ensure that replacements are received in good time, and are available when required to replace those items sold or used
Why Stores are needed In some countries the word “store” is used to refer to a retail outlet - such as a “general store” or a “department store” - from which goods are sold, mainly to individuals, who are commonly called “consumers”. However, in this Program on Stores Management & Stock (Inventory) Control, we define a “Store” (with a capital ‘S’) as an area set aside into which all the items and materials required for production and/or for sale/distribution are received 27 | P a g e
where they are housed for safekeeping, and from which they will be issued as required in only a tiny minority of cases are sales made directly from Stores, and even in such cases those sales are merely a “subsidiary” activity, and are not the primary functions of the Stores, as given in our definition. The various items and materials received into, housed in and issued from Stores are commonly referred to collectively as being ‘stock’ or ‘inventory’, hence the use of the term ‘stock control’ . •
THE TERM STORES, STOREHOUSE, WAREHOUSE ETC REFER TO THE PHYSICAL PLACE BE IT A BUILDING OR A ROOM ETC. WHERE MATERIALS OF ALL VARIETY ARE KEPT.
•
THE FUNCTION OF STORES IS TO RECEIVE, STORE AND ISSUE MATERIALS.
•
STORES ARE NORMALLY DIVIDED INTO VARIOUS SECTIONS SUCH AS -
•
RECEIVING SECTION
•
TOOL STORES
•
GENERAL STORES
•
RAW MATERIALS STORES
•
FINISHED PARTS STORES ETC.
•
STORES PLAYS A VITAL ROLE IN THE OPERATIONS OF A COMPANY
STORES NETWORKS ARE INCREDIBLY OPPORTUNITY OF IMPROVEMENT
COMPLEX
AND
THEREIN
LIES
THE
At this stage, the following serve as a few examples to “introduce” the need for Stores to us:Retail shops such as the footwear shop (or store), need Stores to house reserves of goods for sale to customers and from which to replace those sold. Wholesale businesses (often called simply ‘wholesalers’) purchase goods in large quantities from the producers or manufacturers of them, so they need Stores in which to hold the goods until they are required for supply in smaller quantities to retailers. A manufacturing concern, for example a steel industry, must hold stocks of all the items (materials and components) which are used in making the different types of steel. An office is likely to need stocks of printed and plain paper, envelopes, pins, clips and other items. Even an enterprise which provides a service, like a garage for example, must hold stocks: of spare parts for vehicles, consumables like oil, and, of course, tools for use by its mechanics. In many cases the “Store” might be quite small, perhaps no more than a stock cupboard in a small service concern, such as an estate agency, or a small office. Other enterprises, however, require huge Stores to hold the vast stocks of items, of many different kinds and sizes, which they must have available if they are to be able to run efficiently and successfully. In between the two extremes, there is an enormous range of different enterprises with Stores of 28 | P a g e
different sizes. Whatever the situation, you will find that the Stores of most enterprises fall within the definition we have given you. A Store might be a department or section of an enterprise, and be its ‘Stores Department’; often that name is shortened simply to ‘Stores’ (with a final letter ‘s’). For example, a person might work “in the Stores”.
Stocks The range of items and materials - stocks - which might be held in Stores is huge. The variety and quantity of items and materials held in the Store of a particular enterprise will depend on its size and on its range of activities. Broadly speaking, the various activities of different enterprises can be divided according to the three main groups of enterprises:-
What is involved in Storekeeping:The term storekeeping covers the actual handling of the items or materials received into, held in and issued from the Store. The work involves: receiving items and materials, including the inspection of them storing the various stock items in the most appropriate fashion, binning and/or racking them by the best methods, and placing them in such a way that any item or material in the Store can be located quickly and easily when it is required; ensuring the safety of all items and materials whilst in the Store - that is, protecting them from pilfering, theft, damage and deterioration; Ensuring, when necessary, that items issued from the Store are so packed that they will not be damaged or caused to deteriorate whilst in transit to their destinations.
What is Involved in Stock Control (also known as ‘Inventory Control’ ) What we refer to as stock control comprises mainly the clerical and administrative functions of stores work. It involves: ensuring that the right types and qualities of items needed for production, sale and distribution, are always available when required; ensuring that stock is issued in the correct sequence, that is, “first in first out”, so that “older” stock is not allowed to deteriorate by being kept too long in the Store, for instance because it has been hidden from view by more recently received stock; maintaining records showing the “movement” of items into and out of the Store, controlling and monitoring those movements and maintaining full records of the items in the Store;
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ensuring that the correct “stock levels” of the various items are set and are maintained, that orders and reorders are made (or requested to be made) in good time, and that what is ordered is received; checking, counting or otherwise measuring stock to ensure that records are accurate and that no losses are occurring due to pilfering, theft, damage or poor storage; pricing and valuing the items in the Store
The Importance of Efficient Stores Management In an enterprise with a small quantity of stock, one person might be placed in charge of it, if the owner/manager does not look after it himself. Where the volume of stock is too large to be handled on a part-time basis, one or more storekeepers will be required. Enterprises with large quantities of stock must employ trained stores personnel (storekeepers, clerks, etc) under the control of a Store’s Manager (who might go by the designation of Head or Chief Storekeeper, Stock Controller, stores administrator). It is impossible to state at what stage a Store’s Manager will be appointed by a particular enterprise, as circumstances and sizes vary so greatly. But whatever its size and the volume of its stocks, the success of the enterprise can depend to a large extent on the efficient management of its Store and stocks.
Let us now examine why that is so. All the possessions of an enterprise - that is, what it owns - are called its ‘assets’ . Frequently the value of the stocks of goods and/or materials held in its Store is as great as - if not greater than - the total value of all its other possessions - e.g. land and/or buildings, plant, machinery, motor vehicles, equipment, etc., and, of course, money and investments - added together! The items and/or materials in the Store cost money; if, through bad Stores Management, there are too many held in the Store or if the wrong items or materials are being held, money will be “tied up” - money which might be required to buy other, needed items and/or materials or to pay the many expenses involved in running the enterprise. Conversely, if poor stores management has led to shortages of needed items and materials, there will be hold-ups and interruptions in production, or losses of production and/or losses of sales to customers and, indeed, losses of the customers themselves, and losses of profits which can in turn lead to job losses and - in extreme cases - to the collapse of the enterprise. If items in the Store are lost, stolen or damaged in any way, the enterprise loses money. And it costs money to run the Store - on building maintenance and/or rent, on salaries of stores personnel, on containers and equipment, on heating or cooling, 30 | P a g e
on lighting and power, etc. – and the enterprise must receive a “return” from its expenditure, in terms of efficiency, particularly as its Stores is “non-productive”
FUNCTIONS AND DUTIES OF STORES DEPARTMENT:You will have noted that earlier I stated that the Stores Department has a non-productive Function. I can now explain what I meant. Departments of an enterprise such as its Sales Department and/or its Production department are directly involved in the primary or revenue-earning functions of that enterprise. Their functions - or activities - are designed to bring money into the enterprise as the result of producing and/or selling goods or services. For example, if an enterprise has a Production Department, its function is to make or manufacture goods or other items which will be sold to bring in money. The whole function of the Sales department of an enterprise is to sell goods or other items (whether produced internally or purchased for resale from other enterprises) and/or services, in return for which customers will pay money to the enterprise. In contrast, the Stores Department of an enterprise does NOT make or - in general - sell goods or services to customers. Its function is to: Provide a SERVICE to the rest of the enterprise of which it is part . The SERVICE provided by the Stores Department is ESSENTIAL to all other parts of the enterprise, because it is basically intended to ensure that all other sections or departments of the enterprise are furnished, when required, with the correct items, in the correct quantities and of the correct qualities. As I explained earlier, the standard of the service provided by the Stores Department will affect the efficiency and profitability of the entire enterprise of which it is a part. Obviously, the Stores Department cannot be expected to provide the best service unless it receives adequate information from other departments. Furthermore, it must work closely in co-operation and co-ordination with those other departments. The departments with which the Stores will have contact will, of course, depend on the activities in which an enterprise is engaged. However, we now look briefly at some of the major departments with which close contact by Stores Departments might be necessary.
The complete control on the materials is vested in the Stores Department. The field of materials Management covers the following functions. THE FOLLOWING ARE THE PRINCIPAL FUNCTIONS OF A STORE; •
TO RECEIVE RAW MATERIALS, COMPONENTS, TOOLS, SPARES, SUPPLIES, EQUIPMENTS AND OTHER ITEMS AND ACCOUNT FOR THEM.
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TO PROVIDE ADEQUATE, PROPER AND EFFICIENT STORAGE AND PRESERVATION FOR ALL THE ITEMS.
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•
PHYSICAL CHECKING OF ALL INCOMING MATERIALS AS PER THE DELIVERY CHALLAN / INVOICE AND PROPER MAINTENANCE OF DAILY GOODS RECEIPT REGISTER OR RECORDS.
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ARRANGE FOR INSPECTION OF INCOMING MATERIALS.
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ENSURE THAT GOODS INWARD NOTES (GIN) ARE RAISED AND DISTRIBUTED WITHOUT DELAY
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ISSUE MATERIALS TO THE CONSUMING DEPARTMENTS AGAINST AUTHORISED REQUISITIONS AND ACCOUNT FOR THE SAME.
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MAINTAIN ACCURATE AND UP – TO – DATE RECORDS OF MATERIAL RECEIVED, ISSUED, REJECTED, DISPOSED, AND QUANTITY ON HAND OF ALL THE ITEMS.
•
THE FOLLOWING ARE THE PRINCIPAL FUNCTIONS OF A STORE;
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ENSURE THAT ALL DOCUMENTS RELATING TO RECEIPTS AND ISSUE ARE SENT TO STOCK CONTROL, ACCOUNTS AND OTHER CONCERNED DEPARTMENTS.
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UNDERTAKE STOCK VERIFICATION AS PER APPROVED PROCEDURE.
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TO HIGHLIGHT STOCK ACCUMULATION, DISCREPANCIES AND ABNORMAL CONSUMPTION AND INITIATE APPROPRIATE CONTROL ACTION, WHEREVER NECESSARY.
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TO MINIMISE OBSOLESCENCE, SURPLUS AND SCRAP THROUGH PROPER CODIFICATION, STANDARDIZATION, PRESERVATION AND HANDLING.
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TO ENSURE GOOD HOUSEKEEPING SO AS TO MINIMISE THE NEED FOR MATERIAL HANDLING.
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TO MAKE AVAILABLE A BALANCED FLOW OF MATERIALS SO AS TO ECONOMISE ON CAPITAL TIED UP IN INVENTORY.
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TO ACCEPT AND STORE SCRAP AND OTHER DISCARDED MATERIALS.
•
DEPENDING UPON THE NATURE OF BUSINESS (I.E. MANUFACTURING, TRADING SERVICES, ETC,) ONE OR MORE OF THESE FUNCTIONS MAY GAIN PRIMACY OVER THE REST.
Basically the functions of store are as follows:i) ii) iii) iv) v) vi) vii) viii)
Materials planning and programming of procurement and supplies. Purchasing Inventory control Store keeping and warehousing Materials handling and transportation Codification and standardization Value Analysis Identification, Disposal of supplies, obsolete and scrap materials, etc.
The Production Department: As the Stores Department must ensure that all items, materials and tools, as well as spare parts for machinery, are always available for continuous, uninterrupted production, it requires adequate warning about expected future needs, in terms of types, quantities, 32 | P a g e
qualities (and possibly even colours). Stores might also have responsibility for quality control and for inspection (although these might be the responsibility of a separate department which, again, must work closely with the Stores). The relationship between the Stores and Production Departments
STORE S
PRODUCTION RAW MATERIALS COMPONENTS,
Dept
DEPT
TOOLS ETC.
SCRAP AND BY PRODUCTS FINISHED PRODUCTS REJECT AND DAMAGED PRODUCTS
QUALITY CONTROL INSPECTION
STANDARD OPERATING PROCEDURE An SOP is a written document or instruction detailing all steps and activities of a process or procedure. These should be carried out without any deviation or modification to guarantee the expected outcome. Any modification or deviation from a given SOP should be thoroughly investigated and outcomes of the investigation documented according to the internal deviation procedure. All quality impacting processes and procedures should be laid out in Standard Operating Procedures (SOPs). These SOPs should form the basis for the routine training program of each employee. SOPs should be regularly updated to assure compliance to the regulatory requirements and the working practice. A minimum review schedule of 3 years is recommended Changes of SOPs are in general triggered by process or procedural changes / adjustments. The internal site change-control procedure should manage these changes.
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Part of the activity list of such changes should be to update the related SOP. SOPs should be in place for all quality systems plus the specific operational activities on site. The structure of an SOP System and the total amount of individual SOPs should be carefully taken into consideration too many SOPs could lead to a collapse of the SOP System. System SOPs should not be mixed up to keep systems and interaction between quality systems easy. ISO 22000 essentially requires the documentation of all procedures used in any manufacturing process that could affect the quality of the product.
STANDARD OPERATING PROCEDURE OF Essar Projects India limited (Paradeep) Rejection REJECTI
IS THE QUALITY MATCHINGG Receiving of materials
Document checking
WAREHOUS E
Material weighment
Final weighment
GRN(USING) SAP
FREE VENDOR
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CHRG NO
IS MIN AVAILABLE DEPARTME NT
ISSUED
YES
PHYSICAL
AGEING
VERIFICATION
SLOW MOVING
SALES REPORT
SELF LIFE WEEKL
QUATER
RECONCILATION WITH VENDORS
Layout of ESSAR
RECONCILATION STATEMENT
RECONCILATION WITH DEPT
SOP,LAYOUT.docx
SAFETY MEASURES FOLLOWED IN ESSAR Safety is the state of being "safe" (from French sauf), the condition of being protected against physical, social, spiritual, financial, political, emotional,
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occupational, psychological, educational or other types or consequences of failure, damage, error, accidents, harm or any other event which could be considered nondesirable. This can take the form of being protected from the event or from exposure to something that causes health or economical losses. It can include protection of people or of possessions.
Safety measures Safety measures are activities and precautions taken to improve safety, i.e. reduce risk related to human health. Common safety measures include:
Root cause analysis to identify causes of a system failure and correct deficiencies.
Visual examination for dangerous situations such as emergency exits blocked because they are being used as storage areas.
Visual examination for flaws such as cracks, peeling, loose connections.
Chemical analysis
X-ray analysis to see inside a sealed object such as a weld, a cement wall or an airplane outer skin.
Destructive testing of samples
Stress testing subjects a person or product to stresses in excess of those the person or product is designed to handle, to determining the "breaking point".
Safety margins/Safety factors. For instance, a product rated to never be required to handle more than 200 pounds might be designed to fail under at least 400 pounds, a safety factor of two. Higher numbers are used in more sensitive applications such as medical or transit safety.
Implementation of standard protocols and procedures so that activities are conducted in a known way.
Training of employees, vendors, product users
Instruction manuals explaining how to use a product or perform an activity
Instructional videos demonstrating proper use of products
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Examination of activities by specialists to minimize physical stress or increase productivity
Government regulation so suppliers know what standards their product is expected to meet.
Industry regulation so suppliers know what level of quality is expected. Industry regulation is often imposed to avoid potential government regulation.
Self-imposed regulation of various types.
Statements of Ethics by industry organizations or an individual company so its employees know what is expected of them.
Drug testing of employees, etc.
Physical examinations to determine whether a person has a physical condition that would create a problem.
Periodic evaluations of employees, departments, etc.
Geological surveys to determine whether land or water sources are polluted, how firm the ground is at a potential building site, etc
SAFETY COMPLIANCE 1. THE SERVICE PROVIDER AND HIS MEN SHOULD COMPLY WITH PPE REQUIREMENT DECIDED BY THE ORGANIZATION SAFETY DEPARTMENT LIKE CUT RESISTANT HAND GLOVES, SAFETY HELMETS AND SAFETY SHOES.. 2. ALL THE PPE’S MUST BE WORN WHILE WORKING ON JOB. 3. THE SERVICE PROVIDER SHOULD BE COMPETENT ENOUGH TO SUPERVISE HISMEN.
JOB DESCRIPTION 1. THE SUPERVISOR HAS TO ENSURE PROPER PLANNING OF COMPETENT MANPOWER AS DESIRED BY THE ORGANIZATION. 2. PLANNING OF COIL ON SADDLE AS PER PLAN RECEIVED FROM THE ORGANIZATION. 3. ISSUING AND SHIFTING OF WOODEN PALLETS FROM THE ORGANIZATION AS PER SIZE. 4. SEGMENT REMOVAL AND FIXING AS PER COIL I/D. 5. SHEAR GAP SETTING AS PER THICKNESS. 6. UNLOADING OF PACKETS FROM THE STACKER THROUGH EOT CRANE.
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7. WEIGHMENT OF PACKET AND REPORTING TO THE SHIFT ENGINEER. 8. PACKET SHIFTING AND PROPER STACKING.
9. READINESS AND PLACING OF LOGO ON THE SHEET. 10. BARREL CORRUGATION M/C SETTING AND CORRUGATION COMPLIANCE AS PER IS 277 AND JIS STANDARD. 11. MAINTENANCE KNOWLEDGE OF ALL M/Cs IS MUST.
ESSAR SCOPE OF WORK 1. CRANE, HYDRA & TAILOR FOR SHIFTING, DIS-MANTLING & ERECTION WILL BE PROVIDED BY ESSAR. 2. ALL RAW MATERIALS, POWER & CONSTRUCTION WATER WILL BE PROVIDED BY ESSAR.
GENERAL SAFETY GUIDELINES 1. Service Provider must not operate any equipment in manual mode without permission from authorized engineer. 2. Service Provider must not go to any equipment while moving. 3. No person is allowed to stand on coil car / slitting line. 4. No By-passing of interlocks and no pre assumptions for any equipment operation. 5. Use Proper PPE & Safety platform while packing. 6. Ensure that, fingers should be away from strapping procedure and while working with tensioner. 7. Service Provider trained operator should handle consumables for packing of Coils. 8. Operators should be away from under crane, while crane carrying the Coil/ Plates to packing saddle/ packing area. 9. Service Provider must remove the waste consumables immediately, disposal to specified scrap bin and keep the area NEAT & CLEAN. 10. Service Provider must keep only good quality wooden logs for packing. 11. Service Provider must always wear sufficient PPE’s inside the plants. 38 | P a g e
12. Service Provider must keep safe distance to the coils & packs while packing. 13. Service Provider must not modify any tools or equipments. 14. Service Provider must not touch any movable parts. 15. Service Provider must riggers must be alert while pack stacking procedure in yard. 16. Extra care to taken while packing with fork lifter. The signal should be given to fork lifter driver by standing at least one meter away from pack. 17. Service Provider must keep the packs stack height maximum 6 feet and must not stack the packs more than 6 feet height. 18. Rigger must ensure as coil properly gripped in sling-gofer/c-hook than after give the signal to the crane operator. 19. Service Provider must not put wooden blocks for packing while the crane is moving with load. 20. Service Provider must maintain good housekeeping standards and keep “Yellow pathway” should be neat & clean. 21. Housekeeping is mandatory at each packing area. All loose wooden logs, straps etc to be removed from site in frequent intervals. 22. Ensure sling offer should be locked with bolt in main hoist of crane. 23. Service Provider must not pack the packs very near to the rollers on the floor area in flying shear line. There may be a chance of slipping & falling down. 24. Service Provider must ensure all hooks are properly hooked with chains while lifting with spreader beams. The lifting signal to crane operator to be given after counter checking the hooks position. There may be chance of hooks slipped off from chain. 25. Service Provider must not work near the stacker area in flying shear line.
SPECIAL "OHSAS" AND "ISO" CONDITIONS: All safety rules, codes applied by respective government agencies both in India and foreign countries regarding safety and environmental shall be observed and complied to by the Bidder / service Provider and his workmen without exception. The following Health and Safety points for OHSAS 18001 FOR OCCUPATIONAL HEALTH & SAFETY MANAGEMENT SYSTEM are required to be complied by the bidder /service Provider:
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i. To ensure the health, safety and well being of all workmen and compliance to applicable legislative requirements. ii. To include all resource requirements for accident prevention during preparation of estimates. iii. To ensure proper briefing to workmen. iv. Not to do wilfully any act which may cause injury to himself or to others. v. Not to interfere unless duly authorized, remove or interfere with any moving/ stationary machine/ equipment or facility. vi. To use only the authorized means of access provided in the site. vii. The bidder / service Provider shall have full responsibility and accountability of safe execution of job at work place / site and safety of the personnel conducted inside the premises of ESSAR, Hazira. viii. To maintain up-to-date list of employed workman at the work site and maintain identity cards. ix. To undertake immediate action to correct all unsafe conditions/ practices as identified/ reported. x. To ensure that all sub - service providers are provided the necessary documentation, ISI approved or equivalent standards PPE and informed of t heir obligations. xi. To issue standing instructions for prohibition of drugs and alcohol/ fighting/ gambling/horse play or keeping weapons at various worksite (any violation will result in disciplinary action). xii. Not to employ workmen with epilepsy/ deafness/ color blindness/ night blindness in any site activities. All personnel deployed at their site shall have medical fitness certificate issued by registered medical practitioner. xiii. Ensure that employees are provided with appropriate ISI approved or equivalent standards personal protective equipment PPE’s and these should be at no cost to the employees. These PPE’s should be used in accordance with job requirements and replaced as necessary.
TRAINING & PPE
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• To provide adequate information, training to workmen; safety equipment of Indian standard approved (IS) or any other equivalent specifications and ensure their proper
ENVIVORNMENT, SAFETY, HEALTH RULES, REGULATIONS AND MEASURES TAKEN:Service Provider shall conduct their activities such that the personnel, equipments, working methods, conditions are safe and without risk to health, injury, accidents etc for their own personnel/equipments of our or other business associates at the site.
Service Provider shall ensure that all the employees deputed by Service Provider at our site are medically fit to carry out the activities in order to ensure that the jobs entrusted are completed safely in time and without any hindrances. For this, it is necessary for Service Provider to submit medical fitness certificate for all their employees deputed at our site to our fire and safety department. In case at any time, the persons deputed are found medically unfit, they shall be denied entry in our premises and not allowed to carry out their jobs.
Service Provider shall ensure safety of their personnel & follow all safety measures prescribed. Service Provider shall provide for all safety requirements as per the demands of the services rendered at their own cost.
Service Provider shall ensure that all the tools and tackles deployed by Service Provider are certified by competent authority for use in factory. Such certificate should be duly valid at all points of time.
For the works to be carried out, Service Provider shall be deploying qualified Supervisors who shall be qualified and who shall have knowledge and shall coordinate and supervise all the works including but not limited to the following activities:
i. Lifting and shifting of big vessel/pipes/gear boxes/big armature/motors etc. where chain pulley blocks, cranes, winch machines, loaders etc are used. ii. Activities/works being carried out at critical heights like crane girder levels, false ceiling & roof jobs. iii. Activities/works being carried out at environment having health and/or f ire hazards. iv. Activities/works being carried out in confined space/vessel entry/locations. v. Activities being carried out on gas line/oil cellars/hydraulic stations/cable tunnels/cable galleries/conveyors. 41 | P a g e
vi. Works being carried out near working/running machines.
vii. Excavation works where U.G.C. system (pipes + cables) exist. If their personnel are deployed in dusty/noisy/oily areas, Service Provider must ensure and practice the following:
i. Observe the condition of hoses/o-rings/seals. If it is not in a good condition, then inform the immediate supervisor/concerned officials to prevent t he leakage. ii. Immediately arrest the leakages and recover/collect the maximum amount of spilled oil in the drum during the leakages. iii. Put the filled-in drums at designated storage area. iv. Wear ear plugs/muffs while working in the high dust areas. v. Ensure proper handling of materials like scrap during bucket preparation. vi. Ensure proper handling of materials like lime, dolime etc. while feeding. vii. Ensure materials like scrap, etc are charged into the bucket from lesser height. viii. Keep the fixed and movable elbow 100% clean. ix. Arrest any leakage immediately. x. Ensure proper handling of raw materials to minimize dust emissions xi. Load the materials like lime-stone etc. from lesser height. xii. Ensure periodical cleaning of joints and gaskets. xiii. Ensure proper screening of oxide before charging to hopper. All vehicles entering ESSAR complex must have current and valid P.U.C. certificate without which vehicle shall not be permitted for entry. For jobs carried out in the plant, Service Provider shall obtain proper work permit as per requirements. For all the jobs done, Service Provider shall be compulsorily deploying a qualified competent safety supervisor. All scaffolding should be as per satisfaction of department engineer in-charge should be done. All their employees, worker, staff will have to undergo a safety and environment training. Service Provider/their supervisor should positively attend the safety and environment meeting/other meetings conducted periodically.
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Service Provider should comply with all safety and environment requirements/rules and regulations as per guide lines of fire & safety; environment department. Service Provider shall maintain and ensure continuous availability of First –Aid facilities for all their personnel. Service Provider/Their personnel shall be restricted to the areas required for the performance of their jobs. Wandering of their personnel/representatives through plant areas other than the immediate job area is not permitted except without prior written permission from concerned Head of Department. Service Provider shall provide following personal safety gears and safety equipment with specifications mentioned or as per latest rules and regulations. Also Service Provider shall take adequate steps to ensure proper use by those concerned:Safety goggles - toughened polycarbonate scratch resistant lenses with side shield, Optically correct zero power, impact resistant and approved by BIS specification no. IS: 7524 part -1 and further applicable amendments Hand gloves Safety helmet – of yellow colour - moulded out of high impact, heat and chemical resistant HDPE with brim for additional side protection, with 6 point ergonomic adjustable head band and chin strap; and approved by BIS specification no. IS: 2925 -1984 and further applicable amendments Safety harness with double lifeline - waist belt with shoulder strap, 6 mm thick coated friction buckle and joint less d-ring, 44 mm wide nylon webbing, padded back, nylon stitched along with copper rivets for additional safety, "quick fit" spring loaded hook; and approved by BIS specification no. IS: 3521 Safety shoes - high ankle shoes, made from fine quality plain black leather, padded Collar, D'rings, full below attached tongue, with steel toe cap as per is 5852 with direct Injection P.V.C. nit rile heel sole Orange Fluorescent jackets for personnel deployed for up-keeping, cleaning, Housekeeping jobs Dungarees/Aprons of specified colours and make
For the mobile/heavy mobile equipments deployed, Service Provider shall ensure
following i. Equipments should work for 20 hours in a day/as per requirements & availability for each equipment must be there accordingly. ii. Deduction on pro-rata basis shall be made for breakdown hours or for non-availability of equipment. iii. Copy of a current and valid P.U.C. certificate for the equipment should be provided by Service Provider and operators should have valid driving license. 43 | P a g e
iv. Service Provider shall keep and have all valid documents as per Motor Vehicle Act as applicable in the state/region. v. The above mentioned documents/certificates must be available at all times. vi. Head light, tail light, reverse horn and rear view mirror of the equipment should be in working condition for safe operation. vii. If Service Provider are replacing any regular equipment deployed then Service Provider shall inform the user department in writing. Service Provider shall keep proper supervision round the clock for optimum utilisation. Inside the plant premises, the speed of the vehicle should not exceed 20 KM per hour/the limits defined at various places in the plant.
Service Provider shall comply with the following:Housekeeping/cleaning of the area including cleaning/removing the debris/scrap/waste and shifting the same/surplus materials to the location specified/shown by the engineer-in charge shall be carried out by Service Provider. Disposal of these should not be done to areas which will create environment hazards and the disposal should not create damage to environment – land, water, air presently or in future. Service Provider shall dispose off waste or scrap generated /dust only to designated areas and ensure that these are not disposed off at any area. Minimize pollution at source through environment-friendly processes, techniques and processes Reduce fugitive emission from loading/unloading and transportation of materials (where applicable).
Develop/encourage adequate greenbelt in and around the plant. Educate and develop an environmentally aware contractual workforce at all levels.
ESSAR celebrates this year as the accident free year as no life lost during the commencement of the project and bags the safety award.
SAP IN ESSAR Mill Products The Essar group is one of India’s largest business houses with an asset base of US $ 3 billion and interests in core industries like Steel, Shipping, Oil and Gas, 44 | P a g e
Power, Telecom and Finance. Essar entered the Iron and Steel business in 1989 by setting up a 1.76 million tonnes per annum facility to produce Hot Briquetted Iron (HBI). This plant is the largest in the world. Essar has also set up a 2 million tonne flat products steel plant. Simultaneously, a backward integration project in the shape of a 3.3 million tpa iron ore pelletisation plant has been set up to manufacture and supply high quality iron ore pellets. Essar has emerged as the largest fully integrated manufacturer of high-quality flat products in the western region of India . the hub of industrial activity in the country. Essar needed a fully integrated IT system to manage this huge set up.
The right data at the right place According to Anil Kastuar, C.I.O. Steel Business, Essar had a non-integrated system focused solely on finance. .It was not linked to Production Planning, Materials Management or Sales & Distribution Management. This is not an era when decisions can be taken based on standalone solutions. They must be based on inputs from other business areas. We needed a solution and we looked at SAP.s R/3, which fulfilled our objective.
Integration is of the essence in a Complicated industry To produce high-quality steel with the best ingredients, accuracy in the product mix was crucial. To enable this there was a need for an integrated and live information system. Dr P Bhattacharya, Chief Operations Officer, explains: .We deal with complex products, sizes, 10 grades. The wrong slab in the wrong furnace could create havoc. We needed a system to manage all this. We also had to track everything from raw material to production and finally its shipment. The transportation by road of say, 250 tonnes of steel a day, is dependent on a powerful information system. Essar selected SAP.s R/3 based on the strengths of the system and on its success elsewhere. .Our corporate culture is driven by respect for the best available in the market. SAP.s R/3 turned out to be the most powerful, proven software that could run a complicated business such as ours.. .SAP is able to provide solutions for a variety of industries. It is not an industry-specific solution. It is not a hardware-specific solution. It is an enterprise-wide solution with industry specific components for businesses like ours.
A live system is needed to facilitate each step in production planning Dr Bhattacharya explains: .It is imperative that we know, right from the time we take orders, what our likely delivery schedule will be. All information from raw material procurement to inventory of finished products should be absolutely live. We were looking for a solution that would give us all this.
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.What I like about the SAP R/3 solution is that it binds every individual and every department with one objective- Efficiency. There can be no conflict of data. If there is a problem it surfaces the same day.
Implementation with a Big Bang Anil Kastuar explains why Essar chose to unfold the entire R/3 suite in one goes calling it their Big Bang approach. .Our steel plant was close to being commissioned and we needed to take care of each business process. Which is why we decided to go for the Big Bang approach? Arun K Tiwary, GM Information Technology, explains further: .Our modules included: Finance, AssetManagement, Product Planning, Plant Maintenance, Sales and Distribution, Quality Management, Controlling, Commitment Accounting.. The first 12 months saw the implementation of 3 modules: Finance, Material Management and Controlling. All the production related modules went live in the 2nd phase, 3 months later. .SAP India’s support is fantastic. Sometimes I wonder whether they.re a part of Essar Steel or SAP India.. Essar had the help of their respected business managers in the implementation stages. They also had the assistance of a team of IT professionals and implementation consultants from Coopers & Lybrand. Avers D Ashok, Executive Director, Coopers & Lybrand (India), .We believe this Big Bang implementation was successful, primarily because of the client.s confidence in jointly taking a seeming risk. Our well qualified, dedicated and experienced consultants with guidance from C&L.s global SAP Centre of Excellence . Hamburg, were able to meet the stringent deadline because of team spirit and dedicated client users and IT professionals.. .SAP were supportive and responsive. For example when we had a problem with our Commitment Accounting, they flew down a consultant from Singapore to help.. We can promise much shorter deliveries.. According to Dr Bhattacharya the cycle of customer enquiry to delivery has been reduced. Essar truck turnaround time is reducing. The ERP facility that SAP offers as a part of its production planning module is used extensively. .We are able to accurately plan our procurement of spares and goods, raw materials and stocks. Accounting has become totally decentralised. Every transaction that takes place in the plant updates the book of accounts automatically...For the first time we are likely to close the first half of our balance sheets within 25 days of our closing
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INVENTORIES OF ESSAR Since the ESSAR ORISSA STEEL LTD (ESOL) is in project state the inventories are huge. The inventory basically consists of capital goods, steel items (like bars, angle, beams, channel, and plate), cement and diesel. These items are used for the purpose of the construction of the plant. The inventories are of A category, the capital goods lying in the helipad, crs building, mrs building, balli building, store yard, store shed worth more than 400crores.the steel items like bar, angle channel, plate also worth in crores. Steel items are stacked near crs building, Weigh Bridge, near chimney, etc. Stores department is responsible for the stacking, handling and maintaining this high value items.
THE WORK THAT I UNDER TOOK DURING MY INTERNSHIP
PHYSICAL VERIFICATION OF CAPITAL GOODS PHYSICAL VERIFICATION OF STEEL ITEMS PHYSICAL VERIFICATION OF CEMENT PHYSICAL VERIFICATION OF DIESEL TAGGING OF STORE MATERIALS STORE RACK BINNING
Physical verification of inventory Inventory is physically verified by organizations to ascertain its existence and accuracy. Depending on the size and nature of the organization it is verified either frequently or once 47 | P a g e
annually. Given below are steps which can be used to design the physical verification of inventory process. These need to be fine tuned according to the nature of industry.
Perpetual Inventory Medium to large organizations having high quantity of stocks must design a perpetual inventory count system. Physical verification of inventory on a perpetual basis helps to monitor and control the stocks effectively. A perpetual inventory system can be either weekly or monthly. An annual verification of stocks during year end audits can reveal differences between physical and book quantities which would be difficult to identify and a rectification at that stage may not be possible leading to an excessive write off.
weekly stock take procedure needs to be carried out on the day of the week when the operations are expected to be at a minimum i.e. here is minimum movement of inventory. Monthly physical verification needs to be carried out on the last day of the month after all the invoices have been recorded and the inventory is dispatched
A monthly stock count procedure would involve a complete stock count i.e. counting the entire inventory. A weekly perpetual inventory system on the other hand would involve counting some of the quantity on a weekly basis such that the entire stocks are counted at least twice a year or once every quarter. Inventory Schedule The inventory schedule must be prepared prior to the stock count. It must specify the date and time of the count and the staff who will be participating in the stock count. The schedule must be communicated to the staff involved in the stock take.
Inventory Count Sheets Area wise inventory count sheets must be available for the stock take. The inventory count sheets need to be numbered and should have a complete list of all items in stock as per the stock records on the computer system. The unit of measurement specified on the count sheet should match the unit of measurement in which stock is required to be recorded in the books. This will enable to compare the book stock with the physical stocks counted and would reduce errors of conversion. For example if the book stock is in Cartons and Pieces, the physical stock needs to be counted and recorded as Cartons and Pieces. If the book stock is in kilograms, then the physical stock needs to be weighed and recorded in kilograms. A blind count is always beneficial i.e. the system stock should not be mentioned on the inventory count sheet. The staff involved in the stock count must initial / sign each and every page of the inventory count sheet.
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Cut Off Procedures Adequate cut off procedures need to be followed. For instance, GRN (goods receipt note) for all raw materials received need to be accounted prior to counting and included in the stock count during physical stock take. Similarly finished goods for which invoices are entered need to be segregated and transferred to dispatch section and should not be counted during physical stock take. All pending sales invoices and GRN’s need to be entered before generating the stock count sheets from the system. Summarizing the above all goods just received for which GRN is not prepared and all sales invoices entered which are not yet dispatched should be segregated and not counted during the physical stock take.
Third Party Stocks During stock counts, inventory belonging to third parties in our stores need to be identified. Similarly on a monthly or quarterly basis it is important to obtain a confirmation from third parties with whom our stocks are kept. For example obtaining a confirmation for stocks kept on consignment basis. Comparison with System Stock The physical stock must be entered in the system to compare with the book stock. The stocks must be entered in the same unit of measurement as present on the system. If possible the staff entering the stock needs to be different from the staff involved in the stock count to ensure segregation of duties. This would depend on the size of the organization and the staff available. Entry should be done from the count sheets page by page to ensure all items are entered. Any items which were not present in the count sheets and written manually during physical stock should be entered with care and checked with similar items in the system. Subsequent data entry of sales invoices and GRN can be done only after comparing the system stocks with the physical stock. Variance Analysis After entering the physical stocks, the variances, if any, must be analyzed. Huge variances must be investigated by performing a recount of those items, verifying whether the entry of physical stock was correctly done, whether any errors are present in data entry of invoices, stock receipts and stock issue. The variances need to be accounted for such that the system stock reflects the result of the physical stock count.
CAPITAL GOODS LIST.xlsx
INVENTORY OF STEEL AS ON 31.03.10
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MAIN SHEET OF STEEL.xlsx
QUANTITY OF BEAM
QUANTITY OF CHANNEL
PHYSICAL VERIFICATION OF STEEL
STEEL INVENTORY.xlsx
INVENTORY OF CEMENT AS ON 22.0 4.10
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LOCATION
QUANTITY
GODOWN NO 4
1583 BAGS
BALLING BUILDING
2703 BAGS
GOWODN NO 3
1810 BAGS
GOWODN NO 2
1060 BAGS
ISSUED
400 BAGS
TOTAL
6756 BAGS
GRAPHICAL REPRESENTATION OF INVENTORY IN TERMS OF QUANTITY
GHRAFICAL REPRESENTATION OF INVENTORY IN TERMS OF INR STACKING PROCEDURE OF CEMENT IMPORTANCE OF PROPER STORAGE OF CEMENT The binding property and strength of cement depend upon its capacity for chemical reaction, which can take place in the presence of water. Cement if not stored properly can absorb moisture from the atmospheric air or any other source and react with it chemically. The strength of such type of cement when used would be adversely affected to the extent such reaction would have taken place. For prevention of cement against deterioration and retaining its freshness its storage should 51 | P a g e
be such that no dampness or moisture is allowed to reach cement either from the ground, walls or from the environment. This becomes particularly important during the humid season and in coastal regions when atmospheric air contains higher amount of moisture in it.
CEMENT GODOWN AT SITE In most construction projects godowns are constructed at site for storage of a few days requirement of cement. Even though such godowns are temporary in nature, they must conform to the following requirement. •
The walls must be plastered and made damp proof
•
The roof must be given an appropriate water proofing treatment
•
The floor must be raised by atleast 80 cm above the ground level to prevent any inflow of water. The flooring may consist of a 15 cm thick layer of dry bricks laid in two courses over a layer of earth consolidated to a thickness of 15cm above the ground level.
•
For further protection, cement bags should be stacked at least 10-20 cm clear above the floor by providing wooden battens and planking arrangement. For saving timber concrete may be used.
•
If any windows are provided , these should be few and small and normally kept tightly closed to prevent entry of atmospheric moisture from outside.
•
A newly constructed godown should not be used for storage of cement unless its interior is thoroughly dry.
PROPER METHOD FOR STACKING OF CEMENT BAGS The arrangement should be such that it is convenient both for stacking and removal of cement bags and it also leaves adequate space for movement and inspection of bags for counting purposes etc., No cement bags should be stacked in contact with an external wall. A clear space of at least 60 cm should be left between the exterior wall and the stacks Cement bags should be placed closely together in the stack to reduce circulation of air as much as possible. Cement bags should not be stacked more than ten bags high to avoid lumping or ‘warehouse pack’ under pressure. If the stack is more than seven bags high, arrange the bags in header and stretcher fashion (i.e.) alternately length-wise and cross-wise, to achieve interlocking between them and lessening the danger of toppling over, the arrangement of two stacks with a height of seven bags and ten bags respectively. For extra safety during rainy season, the stacks of cement bags should be enclosed completely in polythene sheets (atleast 700 gauge thick) or similar material if it is anticipated that cement would not be required for a prolonged period. This can be achieved by making a large loose sack of the polythene sheet and arranging cement bags within it with flaps of the
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sheet closing on the top of the pile. Care should be taken to ensure that the polythene sheet is not damaged any time while in use. TEMPORARY STORAGE AT SITE Sometimes cement requirement of a day or two may have to be stored at site in the open. In such cases cement bags should be laid on a dry platform made of wooden planks resting over brick-masonry concrete, dry sand agregates raised about 15 cms above the ground level. The stack must be kept fully covered with tarpaulin or polythene sheet and protected against atmospheric moisture. The covering sheets must overlap each other properly. Temporary storage on open storage should not be adopted in wet weather. PROPER METHOD FOR REMOVAL OF CEMENT BAGS When removing bags from storage, cement bags should be removed from upto two or three tiers on the backside rather than only from one tier on the front as shown in the figure. If the rows are thus stepped back, there is less chance of over-turning of bags.
Stepping of Tiers while Removing Cement Bags When removing bags for use, apply the “First in, First out” (FIFO) principle i.e. take out the oldest cement first. Each consignment of cement should be stacked separately in the godown so as to permit easy access for inspection and to facilitate removal in a proper sequence. It would be desirable to pin a play card on each pile of cement indicating the date of its arrival in the Godown. STORAGE CAPACITY OF A CEMENT GODOWN While working out the inside dimensions of a cement godown for storage of specified quantity of cement filled bags, the following dimensions may be considered. Length of Cement bags :70 cm (average) Width: :35 cm (average) Thickness :14 cm (average) Clearance and passages :60 cm (average) EFFECT OF STORAGE ON STRENGTH OF CEMENT The cement when stored for longer period of time loses its strength characteristics. The strength of cement when used after one year of its production loses its strength by about 4053 | P a g e
50% on application as compared to that of freshly produced cement. The loss of strength characteristic of cement at different interval of times is as given below in the table.
Age of cement
% Reduction in its strength
3Months
20-30
6Months
30-40
12 Months
40-50
TIPS FOR PROPER STORAGE OF CEMENT •
Do not store in a building where walls, roof and floor are not completely weather proof.
•
Do not store in a new warehouse until the interior is thoroughly dried out.
•
Do not make contact with a badly fitted windows and doors and see that they are kept closed.
•
Do not stack against the wall. Always pile on the floor on wooden planks.
•
Do not forget to pile bags together.
•
Do not pile more than 15 bags high and arrange the bags in header and stretcher fashion.
•
Do not take cement from one tier. Step back to three or four tiers.
•
Do not keep dead storage.
•
Do not keep bags on the grounds for temporary storage at work site. Pile on raised dry platform and cover with tarpaulin or Polythene sheets.
INVENTORY OF DIESEL AS ON 22/04/10 OPENING BALANCE-7390 LTRS LOCATION- BROWSER 54 | P a g e
ISSUED-2708 LTRS TOTAL-4682 LTRS
STACKING PROCEDURE OF DIESEL 1. Diesel is kept in an container in ESSAR steel. 2. Then it is transported through a truck. 3. It moves to different areas inside the project site and deliver fuel to the vehicles. 4. It takes the MIN while refuelling the vehicle is done. 5. By this process fuel is efficiently supplied to different department who need it.
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PROBLEMS:1. NO PERMANENT PLACE FOR STACKING OF GOODS 2. ITS NOT ESAY TO PICK UP ITEMS 3. MANY OF THE CAPITAL GOODS ARE EXPOSED TO SUNLIGHT AND MOISTURE, RESULTING IN RUSTING. 4. REGULAR DISPLACEMENT OF ITEMS FROM ONE PLACE TO ANOTHER CAUSING AMBIGUITY IN FINDING THE REQUIRED ITEM. 5. REGULAR CHANGE IN THE POSITION OF GOODS RESULTS IN THE LOSS OF TIME, LOSS OF MONEY, LOSS OF MAN HOUR, AND OPORTUNITY COST IS ALSO INVOLVED. 6. NO SHED FOR STACKING OF MATERIALS. 7. MANY OF THE WOODEN BOXES ARE BROKEN AND THE ELECTRICAL MACHINERY INSIDE IS EXPOSED TO ATMOSPHERE. 8. AS THE MACHINES ARE PACKED IN WOODEN BOX, WE NEVER KNOW THAT WHETHER THEY ARE IN WORKING CONDITION OR NOT.WE ALSO HAVE TO VERIFY THAT THE ITEMS INSIDE THE BOXES ARE NOT MISSING AND THEY ARE NOT PURSUING ANY MERCHANDISE DAMAGE. 9. THE CONTRACTERS PICK UP ITEM WITHOUT MIN, WHICH CAUSES PROBLEM WHILE RECONCILIATION. 10.CEMENT BAGS SHOULD BE ISSUED WITHIN ITS LIFE PERIOD.
SUGGESTIONS:1. ACQUIRING OF SPACE FOR STACKING OF MATERIALS. 2. THERE SHOULD BE SPECIFIC PLACE FOR STACKING DIFFERENT ITEMS, EXAMPLE-ONE AREA FOR STACKING OF CAPITAL GOODS, ANOTHER FOR STEEL, ANOTHER FOR AGGREGATE. 3. REVIEW OF MATERIAL REQUIREMENT PLANNING. 4. WE SHOULD VERIFY THAT PRODUCTS ARE USED AT THE PROJECTED TIME PERIOD. 5. FIXED POSITION LAYOUT SHOULD BE PREPARED. 56 | P a g e
6. A BIGGER WARE HOUSE NEEDED FOR STACKING.
7. ADDITIONAL EMPLOYEES SHOULD BE RECRUITED.
STORES CREDIT TO MANAGEMENT:•
• • •
• • •
•
• • • • • • • •
Complete inventory visibility the most Himalayan task for the management. Judicious use of the inventory. FIFO model used. It’s a cyclone prone area still then stores department is efficient in material management. Packing and stacking of material is done periodically. Reallocation plan is always happening. 24 hr service to facilitate uninterrupted work to drive optimal internal customer satisfaction. Prevention of revenue leakage in term of astringent source of revenue. Satisfying external financial audit Bring in transparent material management practice Helps in knowing obsolete items. Helps in procurement, demand forecasting. Curving practise of inferior suppliers Claim management. Reconciliation with vendors and suppliers. Goods receipt note (GRN) preparation against the actual receipt.
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REFERENCES:WEBSITE- WWW.ESSAR.COM
BOOKS – •
OPERATIONS MANAGEMENT FOR COMPETITIVE STUDY. Manual of instructions for purchase and maintenance of stores of NCSM.
. Price lists and vocabulary of stationery stores and forms issued by the Department of Stationery and Printing, Govt. of India. Books on materials management, Inventory Control by famous authors including publications of National Productivity Council, New Delhi.
•
Introduction to Materials Management by J. R. Tony Arnold, Lloyd M. Clive, Stephen N. Chapman, Ph.D.
Material Flow Management: Improving Cost Efficiency and Environmental Performance by Bernd Wagner (Editor), Stefan Enzler (Editor)
Applied Materials Management by S. Chatterjee
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