Supply Chain Management

at

Rashtriya Chemiles & Fertilizers Ltd. subtitle style Click to edit Master
By Umesh Bagkar ( )
8/30/12

Sameer Govind ( )

Company Introduction

RCF is leading Public Sector Enterprise in Fertilizers & Chemicals

Largest Urea Manufacturing Capacity ( 2 Million MT/Year) in Indian Continent.

Business operations :

Manufacturing and Trading 8/30/12 fertilizers. of

Procuement Strategy

Continuous and reliable supply of raw materials to ensure plants operate at ideal capacity Term contracts for different raw materials viz. annual, half yearly and quarterly depending on the type of product and international market scenario. To obtain price advantage, the Captive and Trading requirement is combined wherever feasible such as in the case of procurement of MOP. The procurement of the Raw materials is done after strategically scheduling the timing of tenders keeping in view the current international demand and supply situation so that RCF achieves the best price advantage in its tenders.

To shorten procurement time pre-qualification of vendors is done for 8/30/12 period of two years. It reduces the procurement and reliability the

Procuement Strategy

All procurements in RCF are being done through tendering system. RCF has setup guidelines for procurement which are called Tender Guidelines. Procurement of all items has to be carried out following the procedures given in the Tender Guidelines. Decision powers, in terms of value, delegated to each level of the hierarchy are specifically enumerated under the Delegation of Power manual. All procurement decisions are taken as per the delegation of power.

8/30/12

e-Procuement

RCF has adopted e-Procurement techniques for all high value procurements. RCF has lined up contract to provide services to conduct eTendering & e-Reverse Auctions for procurements.

Around 300 high value contracts are finalized through eReverse Auctions during last two years, this has resulted in to saving of around Rs. 35 crores. Scrap disposals of RCF is also done through e-Auctions.

8/30/12

Materials Management

RCF has implemented ERP (SAP) in year 2006 for improvement of business functions like Materials Management, Finance, Marketing & Sales. Upgraded to latest version (SAP ECC 6.0) in year 2011. ERP Improved access to cross functional information and able to generate various customized reports for better control over functions of MM. Helping executives to retrieve real time information about inventory level of raw materials and stock position of finished goods at various locations.

8/30/12

Strengthing SCM

RCF is developing & maintaining human relations along with business relations. RCF acknowledge best performing dealers & suppliers by felicitating them on Republic Day every year. RCF ensures timely release of payments to suppliers and timely delivery of fertilizers to its distributors. RCF has benefitted since the distributors provide better service to RCF.

8/30/12

Multiple Supply Chains

Supply Chain of Complex Fertilizers Supply Chain of Urea Supply Chain of Imported Fertilizers

8/30/12

Supply chain for Complex Fertilizers

Rawmaterial : RCF annually imports 5,00,000 MT of raw materials e.g. Rock Phosphate, MAP/DAP, MOP and Sulphur to produce Complex Fertilizers. Present worth : approx. Rs.800 Crores produce complex fertilizers. Use of e-procurement technique for finalization of high value contracts .

8/30/12

Inbound Logistics of Complex Fertilizers

Transportation:
As per the guidelines, all PSUs are required to import on FOB basis and shipments are to be lined up through Ministry of Shipping and Surface Transport (Transchart). For all shipments Transchart is approached to make shipping arrangement. In case of non-availability of vessels through Transchart, the shipments are 8/30/12 arranged on CFR basis through Supplier.

Inbound Logistics of Complex Fertilizers

Internal Handling & Storage:
RCF is having separate department for handling of Raw materials inside the factory premises. Raw materials like Rock Phosphate, MOP, KCL have separate storage silos. Feeding of raw materials from raw materials silo to specific plant is done with the help of conveyer belts & dozers. Final products i.e. Complex Fertilizers are transported to packing section (Bagging 8/30/12 unit) with the help of conveyor belts for

Outbound Logistic
Transportation:

Dispatch through railways : 92% of total dispatch Dispatch through Road : 8% ( local or short distance supplies).

Railway : Railway wagons are hired from Indian Railways for dispatch of fertilizers in bulk across India. The fertilizers dispatched through railway 8/30/12

SCM of Complex Fertilizers

8/30/12

Supply chain for Urea

RCF manufactures Urea at two locations Mumbai & Alibag. Annual production at Alibag unit : 20 Lakh MT and at Mumbai : 3.5 Lakh MT. Raw material : Natural Gas Suppliers : GAIL or RIL. RCF has long term contract with GAIL for supply of gas to RCF.

8/30/12

Inbound Logistics

Natural gas for Urea production is transported from GAIL to RCF through pipeline. GAIL has control room in RCF factory at gas receiving point to monitor & control gas supply to RCF. No storage facility for Natural Gas.

8/30/12

Production of Urea

The gas received from GAIL is processed and Urea is manufactured. Final product i.e. Urea in granular form is transported to packing section (Bagging unit) with the help of conveyor belts for online packing and dispatch. In case of non availability of outward transportation, Urea is stored in silo. Urea is packed in 50 Kg bags.

8/30/12

Outbound Logistic
Transportation:

Dispatch through railways : 92-93% of total dispatch Dispatch through Road : 7-8% ( local or short distance supplies).

Railway : Railway wagons are hired from Indian Railways for dispatch of fertilizers in bulk across India. The fertilizers dispatched through railway 8/30/12

8/30/12

Supply chain for Imported Fertilizers

RCF annually imports 5,50,000 MT of fertilizers for trading. Imported Fertilizers : MOP, DAP, UREA, NPK, Bentonite Sulphur etc. Import ports: Kandla, Vizag, JNPT, Tuticorin, Krishnapattanam, & New Manglore. Imported fertilizers are packed at ports and distributed all over India.

8/30/12

Inbound Logistics

Similar to raw materials, imported fertilizers are also procured on FOB basis Shipments are to lined up through Ministry of Shipping and Surface Transport (Transchart). For all shipments Transchart is approached to make shipping arrangement. In case of non-availability of vessels through Transchart, the shipments are arranged on CFR basis through Supplier.

8/30/12

Handling of Fertilizers at port

RCF has lined up contracts with CHAs to handle imported fertilizers at various ports. CHAs are looking after custom clearance, unloading of fertilizers from vessels , bagging (packing in 50 kg bags) & loading for transportation through Rail or Road. RCF delivers packing material (bags) to CHA for packing of fertilizers. RCF deputed employees at port for 8/30/12 coordination.

Outbound Logistic
Transportation:

Dispatch through railways : 92-93% of total dispatch Dispatch through Road : 7-8% ( local or short distance supplies).

Railway : Railway wagons are hired from Indian Railways for dispatch of fertilizers in bulk across India. The fertilizers dispatched through railway 8/30/12

8/30/12

Thank You

8/30/12