The preliminary stage of the cement production process that enabled to reduce

The preliminary stage of the cement production

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The preliminary stage of the cement production process that enabled to reduce the weight of the material was carried close to the mines. The next step of cement manufacturing (grinding and packaging of raw materials) was carried at facilities close to the market. This enabled the company to respond quickly to any change in market dynamics. The Indian cement industry was majorly dependent on road and rail transport, which accounted for 90 per cent of the shipments. Ambuja Cement introduced sea-borne transportation, which improved costefficiency and allowed the company to tap the under-served domestic coastal markets. Its access to ports has also helped the company to emerge as India s largest exporter since last 15 years1. Furthermore, the company targeted to reduce power costs (25-30 per cent of production cost2). It set up a captive power plant fuelled by quality coal from South Africa and furnace oil from the Middle East that facilitated the power cost to be lower than the national grid. This has made the company self-sufficient with power, while it is positioned to generate extra income by supplying excess power to the national grid. Innovation in manufacturing process can be outbound as well – by involving other stakeholders engaged in the production process. Mahindra & Mahindra (M&M), a
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1 Source: Ambuja Cement website 2 Source: Ambuja Cement website private sector automobile company in India, showcased a successful story with this strategy. M&M introduced a new process (Integrated Design and Manufacturing) while developing its multi-utility vehicle „Scorpio . The process involved cross-functional teams (including Tier I suppliers) which collaborated extensively in the product development process – designing, testing and marketing. The result was a shorter product development cycle. M&M was able to roll out „Scorpio on an investment of USD120 million in the project – one-fifth of the average spent on similar projects globally. 3. Management Innovation Management innovation is a change introduced in a firm s management principles to improvise any area of business activity. The Indian automotive manufacturer Brakes India Limited transformed the management approach for its Foundry division and attained success. The top management s approach to attain Total Quality Management (TQM) was to adopt active leadership roles ensuring that the company s vision was passed down the hierarchy line clearly and encouraged employee participation through various schemes. One of the measures was the “suggestion scheme”, wherein an employee s suggestion was implemented and rewarded with special payments. This innovation led Brakes India Limited to become a recipient of internationally recognized awards for excellence in quality such as the Deming Application Prize and
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TPM Excellence Award in 2003. The ongoing TQM practices led to tangible gains in the business; a few of these are mentioned below: Change in management approach led improvement in Brakes India Limited Foundry Division Metrics Change from 2002-03 to 2006-07 Customer Retunrate – PPM 42 per cent reduction Developmental lead t ime 51 per cent reduced
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