INDUSTRIAL VISIT II - BHILAI STEEL PLANT

On 17th February 2014 a group of 28 students started their journey on what was the second industrial visit this season and this time around the destination was the Bhilai Steel Plant (BSP - the flagship plant of SAIL). 

Located in Bhilai, Chhattisgarh, BSP is India's first and foremost producer of steel rails (It is the sole supplier of the country's longest rail tracks, which measure 260 metres), as well as a major producer of wide steel plates, wire rods and other steel products.

Upon arrival the group was taken to a training room where a brief video describing the various processes involved in the manufacturing of steel was shown. After the session, safety instructions were given and the students were sent off to the plant. The first stop, the blast furnace shop, gave a feel of what it is like to be in a steel plant. See pic below.

The instructor explained the processes that happen inside the furnace which reduces iron ore, coke and limestone into hot metal. Liquid iron is separated from slag when it settles down at the bottom of the furnace and is sent to the Steel Melting Shop (SMS). At the Steel melting shop the impurities are removed and the students were explained and shown how the homogenization of steel takes place. The next stop was to one of the 21 batteries at BSP. A battery is a set of ovens lined up together which heat coal in order to remove unwanted gases from it and transform it to coke, the process lasts for about 16-18 hours after which it is transported to the blast furnace. The final stop was the plate mill rolling shop. The students witnessed the automated process wherein molten billets of steel were rolled into the desired shapes and cut as per the specification.

Performance Measurement of Supply Chain and its Strategic Implications

Introduction

In today’s world technical and competitive factors are changing at an alarming rate. In order to survive these radical changes organizations also need to learn to respond to them. The survival of an organization in today’s ever changing environment depends on its ability to respond to changes. This aspect of being dynamic becomes even more difficult for smaller firms. Over the years companies have also acknowledged that it is not economically viable to develop every part of the final product in-house and therefore outsourcing has become increasingly common. Also, with globalisation logistics have become vital part of any organisation and hence supply chain management has become the key to survival.

Supply chain management is the process of planning, implementing and controlling the operations of the supply chain with a purpose to satisfy customer’s requirements as efficiently as possible. SCM spans all movement and storage of raw materials, work-in- progress and finished goods from point-of-origin to point-of-consumption.

On the other hand performance management is also very important. It should be understood that all businesses need performance management, because without it nobody can actually comment on how well or poor any business is doing. There should be some benchmarks, targets etc. to compare so that performance of an organization can be measured. Supply chains constitute substantial costs to organizations. Hence cost and performance effectiveness become vital. Strength and performance of any process are only as good as its weakest link. Therefore performance measures specific to a firm are needed to enable improvements and to compare it with industry standards and competitors.

This brings us to the very important point that if anything cannot be measured, it cannot be controlled and thereby cannot be managed; finally if we cannot manage something, we cannot improve it.

Need of Metrics and Performance Management

Supply Chain Risk Management should become one of the top concerns of companies and supply chain executives, as the industry gains a greater conceptual understanding of the real costs of supply chain disruptions, combined with recent incidents such as the Mattel toy recall disaster and Boeing’s massive Dreamliner delays have reinforced the point.

Companies have also realised that in order to survive they need to change according to the market. The strength that they can boast of today may become a weakness tomorrow. This point can be made clearer by the example of State Bank of India which at one point in time boasted of its large amount of branches, but with the advent of internet banking these same branches have now become liability. In today’s business change is the only constant.

Some of the issues due to which organizations are not able to successfully integrate and monitor their supply chains are: