Instability of supply in cement manufacturing companies
Today, companies operating in the manufacturing industries all over the world are faced with many problems. The challenges range from high competition, rising cost of raw materials and the requirement to observe strict environmental regulations. The challenges affect the ability of these companies to operate efficiently, leading to huge losses and eventually the organization may go bankrupt. The manufacturing industry is comprised of organizations that are involved in manufacture of different commodities such as consumer goods, cement, and automobiles. To survive in the highly competitive world, the companies need to operate inefficiently but this is impossible with the high demand to make huge profits. The issue of balancing the cost of maintenance with throughput has adversely affected many companies in the industry. The quality of products used in most of the processes is not an issue that many companies consider, as they prefer replacing only the worn out parts. In case the whole machine is faulty, most of the companies opt for a cheaper model that performs the same job, even if its quality is low. Eventually, this leads to huge company losses as the whole process is affected by the inefficiency of the new low quality equipment.
In companies that manufacture cement, the whole process involves three steps, all of which are crucial to the success of the business. This implies that the failure of a company to manage one of the phases effectively leads to breakdown of the whole process (Sharma, 2008). The extraction of calcium carbonate, silica and other ores is the forts phase in the process. The next phase involves crashing and burning the raw materials to form clinker. The product cannot go into the market in its current state and it is ground, packed and shipped for consumption. The last phase is the most challenging for most cement manufacturing companies. There are many challenges at this phase ranging from ineffective grinding machines, inadequate work force, and most of all, instability of supplies.
To convert clinker into the product ready for sale, there is need to add some more compounds such as gypsum and cement additives. The lack of constant supply of these products leads to inefficiency of the whole process. The challenge of instability of supplies is concerned with the operations and logistics business unit of the company. The procurement department in the unit is responsible for ensuring smooth flow of goods in and out of the factory, but this is impossible to achieve with the unstable supplies. One of the countries that lead in cement manufacturing is India, but this may not be the case in future if the companies do not work towards efficiency (Panigrahi, 2013). This paper discusses how the instability of supplies in Shree cement manufacturing company affects its efficiency and the methods that the organization may adopt to control the situation. To ensure accuracy of the recommendations, the paper analyzes the system operation issue using the life cycle analysis, reliability predictions and maintenance task analysis.
Overview of Shree Cement Company
The company operates two different portfolios: cement and power. The rapid growth of the company over the years is evident in the way it has been able to expand to the Northern and Eastern parts of India. The company has been keen on developing and maintaining a positive public image and it has achieved this by complying with environmental regulations. It is among the manufacturing companies that are keen on minimizing the amount of pollutants released into the environment (Panigrahi, 2013). Between the two portfolios operated by the organization, the cement portfolio is the most affected by the issues in logistics. The smooth running of activities in the segment is affected by the inability of the suppliers to have the required products on time. The company faces shortage of cement additives and other compounds used in the last phase of the manufacturing process. This threatens the sustainability of the company and with the high rate of competition; there is a need for the company to address the issue amicably.
Analysis of the systems operations
The success of Shree Cement Company is threatened by its inability to have a complete production process. It is evident that the procurement department of the company is inefficient due to the instability of supplies. The employees on the department are responsible for ensuring that all the products used in the manufacturing process are delivered to the company on time to reduce delays. Any delays in the manufacturing process causes disruptions in customer supplies and this may affect their loyalty. In an environment where the number of cement manufacturers is high, companies cannot risk being inefficient. The operations and logistics business unit is responsible for managing the other departments such as procurement effectively to ensure that there is reduced or no incidences of shortage ion supplies.
The issue of unstable supplies of major products is caused by both the internal and external factors that the company cannot control. Some of these factors include unstable money markets, insolvency of the suppliers and natural disasters. The organization cannot control these variables, but it does not justify instability of supplies. The operations and logistics business unit should be in a position to predict future changes in the supply of these commodities. The personnel should have alternative plans to implement in case any of the unforeseen circumstances occurs. The issue of instability of supplies affects almost all the departments and this affects the efficiency and profitability of the companies.
Life cycle analysis
This approach of analysis focuses on the impact of the product on the environment and it is useful in developing solutions for the same. The approach considers all the processes used in the production of a product from the raw material to the product (Williams, 2009). The major product manufactured by the company is cement, which is not a pollutant to the environment. However, the other products used from the initial stage of the process have adverse impacts on the environment. In the initial phase, the extraction of raw materials involves release of carbon monoxide that affects human health. The gas affects the ability of the body tissues absorb oxygen needed for many body processes. During the grinding and burning processes, more pollutants including nitrogen oxide and sulphur dioxide are released into the environment.
Although the manufacture of cement has adverse environmental impacts, the process also conserves the environment through recycling of waste products. The gypsum used in the process of manufacturing cement is recycled, leading to a better and less polluted environment. This implies that the company’s activities are in line with the environmental regulations, thus making its operations sustainable and more appealing to the public. However, although the company is responsible to the public by reducing the amount of waste disposed into the environment, it may not be able to operate profitably due to instability of supplies. The inability of the operations and logistics business unit to procure supplies on time affects the completion of the manufacturing process. To ensure that the company operates profitably, it is important for the business unit to ensure that it has adequate supplies to ensure complete life cycle of the product.
Maintenance task analysis
The primary challenge that the company faces is keeping up with the uncertainty of supply of cement additives and other compounds used in the manufacturing process of the cement. The instability of these supplies affects the operations of the company and threaten the sustainability of the company in the near future. The main issues with the instability of supplies in the company relates to the quality of human resources in the operations and logistics business unit, especially the procurement department. According to the maintenance task analysis, one of the factors that may affect the performance of a company is the quality of skills that the employees possess (Rausand & Vatn, 2008). In the case of Shree Cement Company, the technical skills of the personnel in the procurement department do not correspond with the current demand by the company. The issue of instability of supplies in the company affects the maintenance of the process. The success of the organization can only be achieved when the company is able to meet the need of supplying materials needed to complete the process.
Reliability predictions analysis
The approach is important in defining the chances of success in a company depending on the effect of the current system operation issue. The analysis helps in predicting whether the company is able to expand as well as its ability to meet future needs (Economou, 2004). Currently, the company operates in five states in the Northern and Eastern region and it is unlikely to expand to other regions if it does not change the procurement system of its raw materials. The unstable conditions in the supply of raw materials used by the company affects its ability to serve the customers effectively. With a decline in the number of customers served by the company, it is unlikely to expand its activities. The future needs of the company are also unlikely to be achieved if it does not enhance the skills of the workforce.
Given the current structure, the company’s ability to keep up with the high competition in the market is almost impossible. Although the challenge of unstable market supplies affects everyone in the market, there are better approaches that the company can implement to ensure that it is not short of the supplies. Examples of such tactics include having better demand forecasting methods and ordering the items before they are finished (Randall, Nowicki & Hawkins, 2011). However, although the weakness in the current operation disrupts the flow of the manufacturing process, it can be improved to make the process more effective. The operation has the capability to make the company achieve its future need of supplying cement to more regions, both locally and internationally.
The capability of the operation is likely to succeed if the company implements modern technology in the system. It is evident that the business unit concerned with the procurement of raw materials is inefficient in its operation leading to the current situation of instability of supplies. This implies that the capability of the current operation in enhancing the productivity of the company will only be enhanced by the company’s ability to promote the efficiency of human resources in the procurement department. Among the factors that enhance the effectiveness of the company is the use of modern technology in its operations.
Existing problems and weaknesses in the current maintenance processes
The instability of supplies is the primary problem that the company faces in maintaining the current process of manufacturing. Although the challenge is partly contributed by external factors that the company cannot control such as demand and supply forces, there are internal factors that the company can control. The internal factors include inefficiency of the workforce due to poor training. The lack of stable or constant supply of raw products in the company is a problem because it affects the ability of the company to operate effectively. The issue does not only affect the current supply of cement, but also the future needs of the company to expand its operations to a wider market share.
The main weakness that the company has is the inefficiency of personnel working in the operations and logistics business unit. This implies that the employees are unable to forecast demand and supply changes in the market, leading to the instability of the supplies. Due to this, the work force cannot be able to propose strategies that enhance the production process to the other business units in the company. The maintenance of the current process is dependent on the ability of employees to perform their tasks effectively.
Redesigning the current maintenance of operation
The current problems and weaknesses that the company faces need to be addressed so as to enhance the productivity of the company. The demand for cement is on the rise in the modern days and this has brought about a rise in competition. The high profitability in the industry has attracted other new firms, leading to intensified competition. To survive in the market, the company needs to address the existing problems and weaknesses and come up with an amicable solution. One of the most suitable strategies in maximizing the capability of the current operation is to redesign the current maintenance operation. The redesigning should aim at reducing the cost and time of operation, improving the quality of services offered and enhancing flexibility of the operations. The following is a brief discussion of the desired changes in the company to improve the current maintenance of operation.
The instability of supplies experienced by the company leads to increased cost of operation due to the inefficiencies. The redesign should focus on strategies that minimize the cost of operation (Shepherd & Günter, 2010). One of the strategies that can reduce the cost of operation is enhancing the performance of employees. The inefficiency of employees is the main weakness that the company has and this may be improved by motivating employees to perform their tasks effectively. The staff dealing with the procurement of raw materials should be enlightened about the company objectives so as to align them with their daily activities. The result will be improved efficiency leading to improved maintenance of the operation.
Time is one of the most significant aspects that affect the success of a company. The inability of the company to have company supplies on time affects its operation. Customer loyalty is enhanced by the ability of the company to maintain smooth flow of products in the company (Melnyk, Cooper & Hartley, 2011). This implies that delays in the production process have an adverse impact on customer loyalty. The company should embrace modern technology in its operation so as to reduce time wastage. The redesigning of the current maintenance of operation should focus on implementing technologies such as predictive analysis that allows the employees to understand the market trends.
The level of excellence and efficiency in a company defines the quality of goods and services provided. For Shree Cement Company, the quality of services it provides to the clients is poor due to delays in production process (Lee, Baker & Jayaraman, 2012). This implies that the redesign of the operations in the company should mainly focus on improving the quality of services provided. One of the best ways to ensure this is by implementing total quality management concepts. The company may do this by adopting the concept of continuous improvement that focuses mainly on ensuring that the performance of the company is enhanced.
Flexibility in the current situation implies the ability of the company to change its operations in response to the external forces affecting the company (Stevenson & Sum, 2009). Among the factors that affect the operations of the company is instability of supplies, partly contributed by external forces such as fluctuation in the money markets. To cope with this, the company needs to commit its resources towards making its operations more flexible. Delegation of authority in the company is one of the factors that should be considered in the new company design so as to make the decision-making process easier.
Economou, M. (2004, January). The merits and limitations of reliability predictions. In Reliability And Maintainability, 2004 Annual Symposium-RAMS (pp. 352-357). IEEE.
Lee, Y. J., Baker, T., & Jayaraman, V. (2012). Redesigning an integrated forward–reverse logistics system for a third party service provider: an empirical study. International Journal of Production Research, 50(19), 5615-5634.
Melnyk, S. A., Cooper, M. B., & Hartley, J. L. (2011). Managing operations across the supply chain. New York, NY: McGraw-Hill Irwin.
Panigrahi, A. K. (2013). Cash Conversion Cycle and Firms’ Profitability–A Study of Cement Manufacturing Companies of India. International Journal of Current Research, 5(6), 1484-1488.
Randall, W. S., Nowicki, D. R., & Hawkins, T. G. (2011). Explaining the effectiveness of performance-based logistics: a quantitative examination.The International Journal of Logistics Management, 22(3), 324-348.
Rausand, M., & Vatn, J. (2008). Reliability centred maintenance. In Complex system maintenance handbook (pp. 79-108). Springer London.
Sharma, S. (2008). Analyzing the technical and scale efficiency performance: a case study of cement firms in India. Journal of Advances in Management Research, 5(2), 56-63.
Shepherd, C., & Günter, H. (2010). Measuring supply chain performance: current research and future directions. In Behavioral Operations in Planning and Scheduling (pp. 105- 121). Springer Berlin Heidelberg.
Stevenson, W. J., & Sum, C. C. (2009). Operations management (Vol. 8). Boston, MA: McGraw-Hill/Irwin.
Williams, A. S. (2009). Life cycle analysis: A step by step approach. Champaign, IL: Illinois Sustainable Technology Center