Supply Chain Management At Dalmia Cements
Supply Chain Management at Dalmia Cements
Synopsis
Dalmia Cement Limited is a 60-year old company with the cement division contributing around 85% of its revenues. The cement manufacturing plant is located in Dalmiapuram from where it is transported to 7 regional depots, with each depot serving 1 zone. The company operates in only two states—Tamil Nadu and Kerala.
Excess capacities in the northern and western regions are likely to result in price erosion in the south as well. Given the fact that Dalmia is expected to face tremendous pressure on the profitability front in the future, any improvements in the supply chain would be of critical importance and could well define the very existence of the firm in the future.
While the unavailability of the rail link from Dalmiapuram is of short term concern, determining the optimal transport-mode mix and deciding the shifting to pack to order are long-term decisions needed to be made by Dalmia and are the focus of the case.
The case focuses on these two questions:
(a) What is the optimal transport policy that the Dalmia group should follow after the availability of the broad gauge rail link from Dalmiapuram? This decision will have to be taken by comparing the various possible transport mixes and then zeroing in on the most cost-effective one.
(b) Should Dalmia change its business model and start serving the bulk of the demand directly from Dalmiapuram (pack-to-order model), thereby eliminating the need for storage depots? This would have to be done by finding out whether it would be actually possible for Dalmia to service all stockists within 24 hours of receipt of order.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 45
Case Teaching Notes
Case Objectives
The Dalmia case is a comprehensive case for integrating concepts of supply chain optimization and supply chain restructuring. The case is rich with data and provides scope for analysis at various levels. It also poses lot of challenging
Synopsis
Dalmia Cement Limited is a 60-year old company with the cement division contributing around 85% of its revenues. The cement manufacturing plant is located in Dalmiapuram from where it is transported to 7 regional depots, with each depot serving 1 zone. The company operates in only two states—Tamil Nadu and Kerala.
Excess capacities in the northern and western regions are likely to result in price erosion in the south as well. Given the fact that Dalmia is expected to face tremendous pressure on the profitability front in the future, any improvements in the supply chain would be of critical importance and could well define the very existence of the firm in the future.
While the unavailability of the rail link from Dalmiapuram is of short term concern, determining the optimal transport-mode mix and deciding the shifting to pack to order are long-term decisions needed to be made by Dalmia and are the focus of the case.
The case focuses on these two questions:
(a) What is the optimal transport policy that the Dalmia group should follow after the availability of the broad gauge rail link from Dalmiapuram? This decision will have to be taken by comparing the various possible transport mixes and then zeroing in on the most cost-effective one.
(b) Should Dalmia change its business model and start serving the bulk of the demand directly from Dalmiapuram (pack-to-order model), thereby eliminating the need for storage depots? This would have to be done by finding out whether it would be actually possible for Dalmia to service all stockists within 24 hours of receipt of order.
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 45
Case Teaching Notes
Case Objectives
The Dalmia case is a comprehensive case for integrating concepts of supply chain optimization and supply chain restructuring. The case is rich with data and provides scope for analysis at various levels. It also poses lot of challenging