33128132 Materials Management in Essar Steel

8/8/2019 33128132 Materials Management in Essar Steel

1/59

PROJECT REPORT ON MATERIALS

MANAGEMENT

ESSAR STEEL ORISSA LIMITEDPARADEEP, 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 | P a g e


2/59

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 much thankful to my guide Mr. Ravindra Moharana

Snr.Manager (Stores) who has been a constant source of inspiration and

learning. With his guidance and support I could 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.

Finally, I like to thank my family and friends who helped me in

completing this project successfully.

2 | P a g e


3/59

CERTIFICATE

This is to certify that Mr. Sayed Munir Noor bearing roll no

.RMC-MBA 028/09-11, a first year student of Ravenshaw

Management Centre, Cuttack has successfully completed

summer internship report on the project titled, MATERIALS

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

submitted anywhere else for the award of any degree or

discipline.

Date: Ravindra Moharana

Place: Paradeep Snr.Manager (stores)

3 | P a g e


4/59

ESSAR STEEL

DECLARATION

I do hereby declare that this piece of Project Report entitled

MATERIALS MANAGEMENT IN ESSAR STEEL is being submitted by

me in partial fulfilment of the MBA programme in Ravenshaw

Management Centre, Ravenshaw University.

This report is my original piece of work done for my academic

purpose only and no part of it has been submitted for any other

purpose nor published anywhere else in any form till date.

Place:

4 | P a g e


5/59

Date : Sayed Munir

Noor

5 | P a g e


6/59

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 ofAsias 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 the other hand would involve

6 | P a g e


7/59

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 ofsteel....................................................................................................................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

7 | P a g e


8/59

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 familys 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 Indias first private company

to buy a tanker in 1976. The Group also invested in a diverse shippingfleet 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

Indias 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 theGroup build most of its business assets. Essar also entered the GSM telephony business,

establishing Indias 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

8 | P a g e


9/59

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 andreflecting 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-of-

the-art technology and the positive attitude of our people.

Privately owned and professionally managed, the Group is judiciously invested in the

9 | P a g e


10/59

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 leveragingsynergies 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 self-

employment.

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 EmissionReduction) 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

Groups people strategy is focused on promoting a learning culture that continually

enhances the professional skills of its employees.

10 | P a g e


11/59

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 RuiaChairman

Essar Group

Mr Ravi RuiaVice ChairmanEssar Group

Mr Prashant RuiaGroup Chief Executive

Essar Group

11 | P a g e
http://www.essar.com/upload/pdf/Essar_Shashi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Shashi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Shashi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Ravi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Ravi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Ravi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Prashant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Prashant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Prashant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Prashant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Ravi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Shashi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Shashi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Shashi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Shashi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Ravi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Ravi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Ravi_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Prashant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Prashant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Prashant_Ruia_Profile.pdf


12/59

Mr Anshuman RuiaPromoter Director

Essar Group

Ms Smiti KanodiaPromoter Director

Essar Group

Mr Rewant RuiaPromoter Director

Essar Group

Management team

12 | P a g e
http://www.essar.com/upload/pdf/Essar_Anshuman_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Anshuman_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Anshuman_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Smiti_Kanodia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Smiti_Kanodia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Smiti_Kanodia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Rewant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Rewant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Rewant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Rewant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Smiti_Kanodia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Anshuman_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Anshuman_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Anshuman_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Anshuman_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Smiti_Kanodia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Smiti_Kanodia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Smiti_Kanodia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Rewant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Rewant_Ruia_Profile.pdfhttp://www.essar.com/upload/pdf/Essar_Rewant_Ruia_Profile.pdf


13/59

13 | P a g e

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


14/59

Project

Essar Projects Limited drives our businesses in the construction sector. We own one ofAsias 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

Groups 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 specialistin onshore, offshore and cross-country pipelines, from construction to commissioning. The

pipeline division holds the distinction of building the worlds second longest slurry pipeline

Essar Steels 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 thepipelines 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

14 | P a g e


15/59

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 toproduce 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 Indias 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.

.

15 | P a g e


16/59


17/59

Communications

Essar Telecom Infrastructure is one of the largest independent telecom infrastructureservice 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 Indias 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,

Indias 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' Kenyas third mobile cellular network. This is a GSM-based mobile services network

in Kenya with close to a million subscribers.

17 | P a g e


18/59

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 Indias 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


19/59

STEEL

Essar Steel is a global producer of steel with a footprint in India, Canada, USA, the Middle

East and Asia

We are a fully integrated flat carbon steel manufacturer from iron ore to ready-to-marketproducts 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 theiruse, 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 abeneficiation 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


20/59

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 electricarc 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 facilities 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 the 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 beingdeveloped 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
http://www.essar.com/section_level2.aspx?cont_id=3l6C29f7cBI=http://www.essar.com/section_level2.aspx?cont_id=3l6C29f7cBI=


21/59

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 steelcustomized 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 largestemployer in Sault Ste. Marie and currently has 3500 employees at the main plant. Algomanow produces steel strip (i.e. plate and sheet type) which forms its main money maker alongwith 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 productioncapacity of approximately 2.8 million tons per year. Many of its products are sold inconsumer sectors, such as automotive, white goods, construction, engineering andshipbuilding. [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, technologicallyadvanced 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 thathelps 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 sheetand plate. Algoma's products are used in the automotive, construction, energy,manufacturing, pipe and tube, and steel distribution industries. [1] The Direct StripeProduction Complex is a new addition to Essar Steel. DSPC is the newest thin slab castercoupled with direct hot rolling in North America. The Heat-Treated Plate facility providesheat 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, 70MW 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 relatedcomponents such as a generator, a blast furnace gas holder, condensate and feed-watersystems, a water treatment plant, a cooling tower, a transformer, and a distributed controlsystem. Essar has set a precedent as the first integrated steel manufacturer in Canada toconstruct a cogeneration facility fuelled with by-product gas from the operation. [3]

21 | P a g e


22/59

Essar Steel is the biggest employer in Sault Ste. Marie, Ontario, and Canada. They currentlyemploy 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, withworks 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 locallandowners for acquiring some 1,100 acres of land.The Orissa government has given it 103 acres of land and the company expects some 200acres from the government, Panda said.ESOL general manager Bikram Mohanty said local people have welcomed the plant. Thestate government and the district administration are also supportive, he said.Panda said the company plans to have socio-economic development programs in the regionto help the living standard of the people. Essar also will follow the government guidelines inthe 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 countrydump 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


23/59

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 ofland.

23 | P a g e


24/59

24 | P a g e


25/59

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 controlof 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 automatedindustries, 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 usesjust-in-timeor

lean replenishment requires clarity. in the shipping of parts and material from purchasing

25 | P a g e
http://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Quality_controlhttp://en.wikipedia.org/wiki/Quality_controlhttp://en.wikipedia.org/wiki/Quality_assurancehttp://en.wikipedia.org/wiki/Quality_assurancehttp://en.wikipedia.org/wiki/Just_In_Time_(business)http://en.wikipedia.org/wiki/Just_In_Time_(business)http://en.wikipedia.org/wiki/Just_In_Time_(business)http://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Quality_controlhttp://en.wikipedia.org/wiki/Quality_assurancehttp://en.wikipedia.org/wiki/Just_In_Time_(business)


26/59

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, andenhance 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. Vehicletype, 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


27/59

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(orinventory) of various itemsand materials. That is because it would be practically impossible to operate with only one ofeach item to be sold or used in manufacture or used in office work. A reserve or a fundorinventory of each item or material used or sold frequently is therefore maintained, sothat as items or materials are sold or used they can be replaced or replenished from thestocks 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 shops windowsand inside the shop itself. It would be very inconvenient and time-consuming for a shopassistant to have to remove the footwear from the display each time a customer wished totry 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 expressesinterest in a particular style, a shop assistant will ask the size he or she usually wears andthe colour preferred, and will then try to find the right size and colour from the pairs offootwear held in reserve. In many cases pairs of popular items in the most commonly askedfor sizes will be kept inside the shop itself, on shelves or in cabinets. But other pairs will bekept in another room - or perhaps in more than one room - to which the shop assistant cango to find the footwear concerned; that room is the store roomorstock room. When apair of shoes or other footwear is sold from those inside the shop, it must be possible toreplace 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 inmanufacture, it had to order a replacement from the supplier or manufacturer! Of course,from time to time, items can run out of stockbut, as you will learn during this Program,

efficient stock control will reduce or eliminate such happenings, and ensure thatreplacements are received in good time, and are available when required to replace thoseitems sold or used

Why Stores are needed

In some countries the word store is used to refer to a retail outlet - such as a generalstore or a department store - from which goods are sold, mainly to individuals, who arecommonly 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 allthe items and materials required for production and/or for sale/distribution are received

27 | P a g e


28/59

where they are housed for safekeeping, and from which theywill be issued as required inonly a tiny minority of cases are sales made directly from Stores, and even in such casesthose sales are merely a subsidiary activity, and are not the primary functions of theStores, as given in our definition. The various items and materials received into, housed inand issued from Stores are commonly referred to collectively as being stock orinventory, hence the use of the term stock control.

THE TERM STORES, STOREHOUSE, WAREHOUSE ETC REFER TO THE PHYSICALPLACE BE IT A BUILDING OR A ROOM ETC. WHERE MATERIALS OF ALL VARIETYARE 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 COMPLEX AND THEREIN LIES THEOPPORTUNITY OF IMPROVEMENT

At this stage, the following serve as a few examples to introduce the needfor 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


29/59

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; oftenthat name is shortened simply to Stores (with a final letter s). For example, a

person might work in the Stores.

StocksThe range of items and materials - stocks - which might be held in Stores is huge. Thevariety and quantity of items and materials held in the Store of a particular enterprise willdepend on its size and on its range of activities. Broadly speaking, the various activities ofdifferent enterprises can be divided according to the three main groups of enterprises:-

What is involved in Storekeeping:-

The term storekeepingcovers 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, whennecessary, 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 administrativefunctions 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;

29 | P a g e


30/59

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 ManagementIn an enterprise with a small quantity of stock, one person might be placed in charge of it, ifthe owner/manager does not look after it himself. Where the volume of stock is too large tobe 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 Stores Manager(who might go by the designation of Head orChief Storekeeper, Stock Controller, stores administrator).It is impossible to state at what stage a Stores Manager will be appointed by a particularenterprise, as circumstances and sizes vary so greatly. But whatever its size and thevolume of its stocks, the success of the enterprise can depend to a large extent on theefficient 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, ifpoor 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


31/59


32/59

PHYSICAL CHECKING OF ALL INCOMING MATERIALS AS PER THE DELIVERY

CHALLAN / INVOICE AND PROPER MAINTENANCE OF DAILY GOODS RECEIPTREGISTER OR RECORDS.

ARRANGE FOR INSPECTION OF INCOMING MATERIALS.

ENSURE THAT GOODS INWARD NOTES (GIN) ARE RAISED AND DISTRIBUTED WITHOUTDELAY

ISSUE MATERIALS TO THE CONSUMING DEPARTMENTS AGAINST AUTHORISEDREQUISITIONS AND ACCOUNT FOR THE SAME.

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;

ENSURE THAT ALL DOCUMENTS RELATING TO RECEIPTS AND ISSUE ARE SENT TOSTOCK CONTROL, ACCOUNTS AND OTHER CONCERNED DEPARTMENTS.

UNDERTAKE STOCK VERIFICATION AS PER APPROVED PROCEDURE.

TO HIGHLIGHT STOCK ACCUMULATION, DISCREPANCIES AND ABNORMALCONSUMPTION AND INITIATE APPROPRIATE CONTROL ACTION, WHEREVER

NECESSARY.

TO MINIMISE OBSOLESCENCE, SURPLUS AND SCRAP THROUGH PROPERCODIFICATION, STANDARDIZATION, PRESERVATION AND HANDLING.

TO ENSURE GOOD HOUSEKEEPING SO AS TO MINIMISE THE NEED FOR MATERIALHANDLING.

TO MAKE AVAILABLE A BALANCED FLOW OF MATERIALS SO AS TO ECONOMISE ONCAPITAL TIED UP IN INVENTORY.

TO ACCEPT AND STORE SCRAP AND OTHER DISCARDED MATERIALS.

DEPENDING UPON THE NATURE OF BUSINESS (I.E. MANUFACTURING, TRADINGSERVICES, ETC,) ONE OR MORE OF THESE FUNCTIONS MAY GAIN PRIMACY OVER THEREST.

Basically the functions of store are as follows:-

i) Materials planning and programming of procurement and supplies.

ii) Purchasing

iii) Inventory control

iv) Store keeping and warehousing

v) Materials handling and transportation

vi) Codification and standardization

vii) Value Analysis

viii) 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 spareparts for machinery, are always available for continuous, uninterrupted production, itrequires adequate warning about expected future needs, in terms of types, quantities,

32 | P a g e


33/59

qualities (and possibly even colours). Stores might also have responsibility for quality controland for inspection (although these might be the responsibility of a separate departmentwhich, again, must work closely with the Stores).

The relationship between the Stores and Production Departments

RAW MATERIALS

COMPONENTS,

TOOLS ETC.

SCRAP AND

BY PRODUCTS

FINISHED PRODUCTS

REJECT AND DAMAGED

PRODUCTS

STANDARD OPERATING PROCEDU RE

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.

33 | P a g e

STORE

S

Dept

PRODUCTION

DEPT

QUALITY

CONTROL

INSPECTION


34/59

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 (P aradeep)

FREE

34 | P a g e

Rejection

REJECTI

Receiving of

materials

Document

checking

Material

weighment

Final

weighment

GRN(USING)

SAP

IS THE QUALITY MATCHINGGIS THE QUALITY MATCHINGG

WAREHOUS

E

VENDOR
http://en.wikipedia.org/wiki/Quality_systemhttp://en.wikipedia.org/wiki/ISO_22000http://en.wikipedia.org/wiki/Quality_systemhttp://en.wikipedia.org/wiki/ISO_22000


35/59

CHRG

NO

YES

Layout of ESSAR

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,

35 | P a g e

IS MIN AVAILABLE

DEPARTME

NT ISSUED

PHYSICAL

VERIFICATION

WEEKL QUATER

AGEING

SLOW

MOVING

SELF LIFE

SALES

REPORT

RECONCILATION

STATEMENT

RECONCILATION WITH DEPT

RECONCILATION WITH

VENDORS
http://tmp/sve8o.tmp/SOP,LAYOUT.docxhttp://tmp/sve8o.tmp/SOP,LAYOUT.docx


36/59

occupational, psychological, educational or other types or consequences of failure,

damage, error, accidents, harm or any other event which could be considered non-

desirable. This can take the form of being protected from the event or from exposureto 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 ofstandard 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

36 | P a g e
http://en.wikipedia.org/wiki/Root_cause_analysishttp://en.wikipedia.org/wiki/Chemical_analysishttp://en.wikipedia.org/wiki/Destructive_testinghttp://en.wikipedia.org/wiki/Stress_testinghttp://en.wikipedia.org/wiki/Traininghttp://en.wikipedia.org/wiki/Instruction_manualhttp://en.wikipedia.org/wiki/Root_cause_analysishttp://en.wikipedia.org/wiki/Chemical_analysishttp://en.wikipedia.org/wiki/Destructive_testinghttp://en.wikipedia.org/wiki/Stress_testinghttp://en.wikipedia.org/wiki/Traininghttp://en.wikipedia.org/wiki/Instruction_manual


37/59

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 COMPLIANCE1. THE SERVICE PROVIDER AND HIS MEN SHOULD COMPLY WITH PPE REQUIREMENTDECIDED BY THE ORGANIZATION SAFETY DEPARTMENT LIKE CUT RESISTANT HAND

GLOVES, SAFETY HELMETS AND SAFETY SHOES..

2. ALL THE PPES 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.

37 | P a g e
http://en.wikipedia.org/wiki/Government_regulationhttp://en.wikipedia.org/wiki/Regulationhttp://en.wikipedia.org/wiki/Drug_testhttp://en.wikipedia.org/wiki/Physical_examinationhttp://en.wikipedia.org/wiki/Government_regulationhttp://en.wikipedia.org/wiki/Regulationhttp://en.wikipedia.org/wiki/Drug_testhttp://en.wikipedia.org/wiki/Physical_examination


38/59

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 PROVIDEDBY 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 PPEs inside the plants.

38 | P a g e


39/59

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 thesignal 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 stackerarea 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:

39 | P a g e


40/59

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 their 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 PPEs and these should be at no cost to theemployees. These PPEs should be used in accordance with job requirements and replaced

as necessary.

TRAINING & PPE

40 | P a g e


41/59

To provide adequate information, training to workmen; safety equipment of Indianstandard approved (IS) or any other equivalent specifications and ensure their proper

ENVIVORNMENT, SAFETY, HEALTH RULES, REGULATIONS AND MEASURESTAKEN:-

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 ServiceProvider 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 co-

ordinate 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 fire 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


42/59

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 the 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.

42 | P a g e


43/59

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, paddedback, 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


44/59

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 lostduring the commencement of the project and bags the safety

award.

SAP IN ESSAR

Mill ProductsThe Essar group is one of Indias largest business houses with an asset base ofUS $ 3 billion and interests in core industries like Steel, Shipping, Oil and Gas,

44 | P a g e


45/59

Power, Telecom and Finance. Essar entered the Iron and Steel business in 1989by setting up a 1.76 million tonnes per annum facility to produce Hot BriquettedIron (HBI). This plant is the largest in the world. Essar has also set up a 2 milliontonne flat products steel plant. Simultaneously, a backward integration project inthe shape of a 3.3 million tpa iron ore pelletisation plant has been set up tomanufacture and supply high quality iron ore pellets. Essar has emerged as thelargest fully integrated manufacturer of high-quality flat products in the westernregion of India . the hub of industrial activity in the country. Essar needed a fullyintegrated 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-integratedsystem focused solely on finance. .It was not linked to Production Planning,

Materials Management or Sales & Distribution Management. This is not an erawhen decisions can be taken based on standalone solutions. They must bebased on inputs from other business areas. We needed a solution and we lookedat SAP.s R/3, which fulfilled our objective.

Integration is of the essence in aComplicated industry

To produce high-quality steel with the best ingredients, accuracy in the productmix was crucial. To enable this there was a need for an integrated and liveinformation system. Dr P Bhattacharya, Chief Operations Officer, explains: .Wedeal 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 alsohad 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 apowerful information system. Essar selected SAP.s R/3 based on the strengths ofthe system and on its success elsewhere. .Our corporate culture is driven byrespect for the best available in the market. SAP.s R/3 turned out to be the mostpowerful, 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 anindustry-specific solution. It is not a hardware-specific solution. It is anenterprise-wide solution with industry specific components forbusinesses like ours.

A live system is needed to facilitate each step in production planningDr Bhattacharya explains: .It is imperative that we know, right from the time wetake orders, what our likely delivery schedule will be. All information from rawmaterial procurement to inventory of finished products should be absolutely live.We were looking for a solution that would give us all this.

45 | P a g e


46/59

.What I like about the SAP R/3 solution is that it binds every individualand every department with one objective- Efficiency. There can be noconflict of data. If there is a problem it surfaces the same day.

Implementati

33128132 Materials Management in Essar Steel

Documents

Transcript of 33128132 Materials Management in Essar Steel