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Supply Chain Management SASAN POWER LIMITED (SPV of Reliance Power Limited) By: 1. Harkunwar Sabharwal (P301412CMG367) 2. Kuldeep Harish Kalia (P301412CMG375) 3. Arpit Baijal (P301412CMG344) 4. Anmol Kothari (P301412CMG339) 5. Vinit Sinha (P301412CMG476) 6. Manik Jain (P301412CMG381) 7. Arkobroto Goswami (P301412CMG343)

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Page 1: Supply Chain Management - Sasan Power (R-Power)

Supply Chain Management

SASAN POWER LIMITED

(SPV of Reliance Power Limited)

By:

1. Harkunwar Sabharwal (P301412CMG367)

2. Kuldeep Harish Kalia (P301412CMG375)

3. Arpit Baijal (P301412CMG344)

4. Anmol Kothari (P301412CMG339)

5. Vinit Sinha (P301412CMG476)

6. Manik Jain (P301412CMG381)

7. Arkobroto Goswami (P301412CMG343)

Page 2: Supply Chain Management - Sasan Power (R-Power)

Contents

1.0 Supply Chain Management .................................................................................................................... 3

2.0 Sasan Power Limited .................................................................................................................................... 6

2.1 About Reliance Power Limited ................................................................................................................. 6

2.2 About Sasan Ultra Mega Power Project .................................................................................................. 6

3.0 Recommendation....................................................................................................................................... 22

4.0 References: ................................................................................................................................................ 25

Page 3: Supply Chain Management - Sasan Power (R-Power)

1.0 Supply Chain Management

What is logistics management in the sense that it is understood today? There are many ways of

defining logistics but the underlying concept might be defined as:

“Logistics is the process of strategically managing the procurement, movement and storage of

materials, parts and finished inventory (and the related information flows) through the

organization and its marketing channels in such a way that current and future profitability are

maximized through the cost-effective fulfillment of orders.”

Logistics is essentially a planning orientation and framework that seeks to create a single plan for

the flow of products and information through a business. Supply chain management builds upon

this framework and seeks to achieve linkage and co-ordination between the processes of other

entities in the pipeline, i.e. suppliers and customers, and the organization itself. Thus, for example,

one goal of supply chain management might be to reduce or eliminate the buffers of inventory

that exist between organizations in a chain through the sharing of information on demand and

current stock levels.

It will be apparent that supply chain management involves a significant change from the

traditional arm’s-length, even adversarial, relationships that so often typified buyer/supplier

relationships in the past. The focus of supply chain management is on co-operation and trust and

the recognition that, properly managed, the ‘whole can be greater than the sum of its parts’.

The definition of supply chain management adopted in this book is:

“The management of upstream and downstream relationships with suppliers and customers in

order to deliver superior customer value at less cost to the supply chain as a whole.”

Thus the focus of supply chain management is upon the management of relationships in order to

achieve a more profitable outcome for all parties in the chain. This brings with it some significant

challenges since there may be occasions when the narrow self-interest of one party has to be

subsumed for the benefit of the chain as a whole.

Whilst the phrase ‘supply chain management’ is now widely used, it could be argued that it should

really be termed ‘demand chain management’ to reflect the fact that the chain should be driven

by the market, not by suppliers. Equally the word ‘chain’ should be replaced by ‘network’ since

there will normally be multiple suppliers and, indeed, suppliers to suppliers as well as multiple

customers and customers’ customers to be included in the total system.

Figure below illustrates this idea of the firm being at the centre of a network of suppliers and

customers.

Page 4: Supply Chain Management - Sasan Power (R-Power)

Extending this idea a supply chain could more accurately be defined as:

“A network of connected and interdependent organizations mutually and co-operatively working

together to control, manage and improve the flow of materials and information from suppliers to

end users.”

Effective logistics and supply chain management can provide a major source of competitive

advantage – in other words a position of enduring superiority over competitors in terms of

customer preference may be achieved through better management of logistics and the supply

chain.

One concept in particular that Michael Porter has brought to a wider audience is the ‘value chain’:

competitive advantage cannot be understood by looking at a firm as a whole. It stems from the

many discrete activities a firm performs in designing, producing, marketing, delivering, and

supporting its product. each of these activities can contribute to a firm’s relative cost position and

create a basis for differentiation … The value chain disaggregates a firm into its strategically

relevant activities in order to understand the behavior of costs and the existing and potential

sources of differentiation. A firm gains competitive advantage by performing these strategically

important activities more cheaply or better than its competitors.

Value chain activities can be categorized into two types – primary activities (inbound logistics,

operations, outbound logistics, marketing and sales, and service) and support activities

(infrastructure, human resource management, technology development and procurement). These

activities are integrating functions that cut across the traditional functions of the firm. Competitive

advantage is derived from the way in which firms organize and perform these activities within the

value chain. To gain competitive advantage over its rivals, a firm must deliver value to its

customers by performing these activities more efficiently than its competitors or by performing

the activities in a unique way that creates greater differentiation.

Page 5: Supply Chain Management - Sasan Power (R-Power)

The implication of Michael Porter’s thesis is that organizations should look at each activity in their

value chain and assess whether they have a real competitive advantage in the activity.

It will be apparent from the previous comments that the mission of logistics management is to

plan and co-ordinate all those activities necessary to achieve desired levels of delivered service

and quality at lowest possible cost. Logistics must therefore be seen as the link between the

marketplace and the supply base. The scope of logistics spans the organization, from the

management of raw materials through to the delivery of the final product.

Page 6: Supply Chain Management - Sasan Power (R-Power)

2.0 Sasan Power Limited

Sasan Power Limited is a Special Purpose Vehicle (SPV) of Reliance Power Limited, set up for the construction of 4000 MW Sasan Ultra Mega Power Project, hereinafter referred as SUMPP/Sasan UMPP. Sasan UMPP is an upcoming 4000 MW pit-head coal-based power plant in Madhya Pradesh. The project is the first domestic coal-based UMPP awarded inthe country by the GOI. Sasan UMPP is a pit-head power project and has been allocated three captive coal mine blocks – Moher, Moher Amlori extension and Chhatrasal – which have reserves in excess 750 million tones. The firm has all necessary approval for development of these mines. The approved mine plan of all three mines put together envisages production of 25 million tonnes of coal per annum making these mines among India's largest.

2.1 About Reliance Power Limited

Reliance Power Limited is a part of the Reliance Group, one of India’s largest business houses. The group operates across multiple sectors, including telecommunications, financial services, media and entertainment, infrastructure and energy. The energy sector companies include Reliance Infrastructure and Reliance Power .

Reliance Power has been established to develop, construct and operate power projects both in India as well as internationally. The Company on its own and through its subsidiaries has a portfolio of over 35,000 MW of power generation capacity, both in operation as well as capacity under development.

The power projects are going to be diverse in terms of geographic location, fuel type, fuel source and off-take, and each project is planned to be strategically located near an available fuel supply or load centre. The company has 1,540 MW of operational power generation assets. The projects under development include seven coal-fired projects to be fueled by reserves from captive mines and supplies from India and elsewhere; two gas-fired projects; and twelve hydroelectric projects, six of them in Arunachal Pradesh, five in Himachal Pradesh and one in Uttarakhand.

Reliance Power has won three of the four Ultra Mega Power Projects (UMPPs) awarded by the Indian Government so far. These include UMPPs in Sasan( Madhya Pradesh), Krishnapatnam( Andhra Pradesh) & Tilaiya(Jharkhand). UMPPs are a significant part of the Indian government's initiative to collaborate with power generation companies to set up 4,000 MW projects to ease the country’s power deficit situation.

Besides these, Reliance Power is also developing coal bed methane (CBM) blocks to fuel gas based power generation. The company is registering projects with the Clean Development Mechanism executive board for issuance of Certified Emission Reduction (CER) certificates to augment its revenues.

2.2 About Sasan Ultra Mega Power Project

Sasan UMPP along with the coal mine would on completion become the largest integrated coal-cum-power plant in the country. The scale of the project can be better appreciated from the fact the project and coal mine together involve almost 10,000 acres of land of which almost 7,000 acres would be coal mines. The project was awarded for development to the company through a competitive bidding process and transferred to the company in August 2007. The project achieved financial closure in April 2009. The lenders for the project are a consortium of almost 14 banks led by State Bank of India, the country's largest bank. The lending was done on

Page 7: Supply Chain Management - Sasan Power (R-Power)

a project finance basis and with an estimated project cost of around Rs. 20,000 crores (US$ 4 billion) with a debt-equity ratio of 75:25, this making it the largest debt on project finance basis across industries in India.

Power generated from the project would be sold to 14 procurers in seven states in the country (Madhya Pradesh, Punjab, Uttar Pradesh, Delhi, Haryana, Rajasthan and Uttarakhand) at a levelized tariff of Rs. 1.196/kwh (Kilo Watt Hour). The low tariff of the project is primarily because of the low cost of generation due to economies of scale, its pit head location and captive mines resulting in better cost control and low financing costs through better financial planning. Further, the project will be employing the advanced ‘super-critical’ technology for its power plant. This results in higher operating efficiencies and also reduces the emissions thereby making it an environment friendly technology.

Sasan UMPP Supply Chain Management

Logistics and Supply Chain Management of Project Cargo involves specialization both in Technical

(Engineering) & Project Management (basically Procurement & Planning). Here we basically deal

with two types of cargo, termed as General cargo and other being Special Cargo. For power

projects, General Cargo includes supply of steel structures, cement, bolted structures, frames,

pressure parts, soil, TMT bars, electric equipments basically towers, cables, insulators, small

transformers, CBs, JBs etc. This cargo arrives as bulk cargo in vessels if imported and are

transported to project sites on trailers. Sometime they may arrive in containers which are very

easy to move to site. Special cargo includes specific equipments of power plant that may be either

Page 8: Supply Chain Management - Sasan Power (R-Power)

huge in size viz. Deaerator, HP heaters, HP/IP/LP turbines, Generator Stator, Generator

Transformers, Cranes etc or may be delicate viz. Current Transformers, Simulator etc that will

specialized techniques and deep planning to take this material to sites. Sometimes it may take an

year for special cargo to reach site depending weather conditions.

The Logistics for a project of this magnitude is extensive and needs to be properly analyzed. The

majority of the materials are being imported from China, discharging at Kolkata. The entire Supply

Chain is directly related to the construction, the importance of this cannot be understated.

2.2a Strategy + Procurement

Procurement in simple words refers to acquisition of goods or services. Corporations and public

bodies often define processes intended to promote fair and open competition for their business

while minimizing exposure to fraud and collusion. While the objectives in procurement have not

dramatically changed, the ability to acquire a product or service at lowest possible costs while

meeting the buyer’s needs in terms of quality, quantity and time, has become increasingly

complex. Similarly the fundamentals of the supply chain are now congruent in many ways with

those of procurement namely to meet customers’ needs in terms of quality, quantity and time

whilst minimizing transport, storage and working capital costs. Both disciplines are key to business

success and their similarity in scope is evidenced within organizational structures globally where

procurement may report into supply chain or vice versa or they may remain as independent

departments with either a seat at the executive table or reporting typically through to the COO or

CFO.

Sasan Power Limited awarded Engineering, Procurement & Construction (EPC) Contract to its

sister group company Reliance Infrastructure Limited (R-Infra) to undertake responsibility of 4000

MW SUMPP. R-Infra broke complete power plant construction in 2 major packages viz. Boiler,

Turbine & Generator (BTG) and Balance of Plant (BOP). BTG contract was awarded to Shanghai

Electric Corporation (SEC), China through International Competitive Bidding process. BOP package

was further divided more than 50 packages, some of which was awarded to domestic players and

rest to foreign players. Domestic players basically included SAIL & Jindal (for steel), ACC &

Ultratech (for cement). Material imported under Ultra Mega Power Projects scheme attract zero

customs duty which is why R-Infra ordered majority of packages to foreign vendors. About 80% of

the supply packages except steel and cement are imported from China and other countries. This

was basically done to take the benefit of custom duty and high quality at low cost from foreign

bidders.

2.2b Flow of Documents

Exporting and importing are two sides of the same coin; both supply customers with products

manufactured outside the country. In internal/inland trade, the commercial parties to a sales

contract agree on a price based on the buyer taking over the goods at the seller's or supplier's

warehouse, or on delivery by the seller to the buyer's warehouse, or delivery by the seller to a

specified rail or road carrier. This is because it is simple for either buyer or seller to arrange to pay

Page 9: Supply Chain Management - Sasan Power (R-Power)

for all formalities involving the movement and insurance of the goods from one place to another

in the same country.

In international trade, the position is a little complicated. There are likely to be three separate

contracts of carriage of the goods, i.e. from the seller's or supplier's warehouse to a place within

the seller's country, from which there will be an international movement of the goods to a place of

arrival within the buyer's country, with a possible internal carriage within the buyer's country to

his warehouse.

The documents are either required by the importer to satisfy the country's trade control

authorities or to enable a documentary credit transaction to be implemented. The importer wants

to ensure that the exporter fulfills these requirements under documentary letter of credit

operations in order for payment to be effected.

Documentation plays a very vital role in Supply Chain Management especially in International

Business. In case of SPL, the figure below describes the flow of documents among the parties.

Various stakeholders involved in the process are Supplier/OEM (SEC, China and other exporters

from China, Europe and Korea) and its bank, Owner SPL (or R-Power) and its bank, RIPUL, an

intermediary (R-Infra arm involved in SCM) and its bank, Logistics team of R-Infra, Logistic Service

Provider (LSP)/Custom Handling Agent (CHA).

Sasan Power Limited has entered into a contract with Shanghai Electric Corporation, through an

intermediate R-Infra for supply of BTG material for 6x660 MW SUMPP. SPL has opened an import

LC with SBI, India for the same. Once the material is ready for dispatch at Shanghai, SEC presents

Page 10: Supply Chain Management - Sasan Power (R-Power)

the documents to its bank, which then arrives at SBI India through SBI Hong Kong (RIPUL Bank).

The documents are the scrutinized by the Logistics team of R-Infra, who shall get the material

cleared at Indian Customs, Kolkata using these documents through LSP.

2.2c Cargo Details and Its Movement

Diagram below shows the flow of the goods.

Table below gives the breakup of the cargo that was imported for the SUMPP.

SUMPP (6X660 MW) + Coal Mining Equipments

General Cargo FRT in Lacs

A BTG 7.34

B Coal Mining Equipments 0.73

C Prefab Structures 0.44

D Miscellaneous 0.10

Total General Cargo 8.61

Pictures below show what actually Project Cargo refers too. Project cargo logistics has always been

a gritty aspect of the supply chain. But increasingly, shippers and service providers are becoming

more sophisticated in how they plan and partner for success when transporting project cargo.

EQUIPMENT COMPANY NAME

COUNTRY OF ORIGIN

BTG SHANGHAI ELECTRIC

CHINA

STEEL STRUCTURES HXSS

CHINA

GT, ICT HYUNDAI

KOREA

CRANES ZOOMLION

CHINA

MINING KOMATSU

CHINA

KOLKATA

PORT

SASAN

SITE

Page 11: Supply Chain Management - Sasan Power (R-Power)

Structures and other parts came with a special packing of iron angles and strips to make unloading

from vessel, stacking at port and site, loading on trailers comfortable using cranes. Sensitive,

delicate cargo, electronic devices were sent either in wooden boxes or containers to ensure

safety. The same can be seen in the pictures. These cargos were transported either on normal

trailers or specialized trailers (mechanical or triple axel) depending on the complexity involved

with the cargo.

Once the material is ready at SEC workshop, it books the vessel accordingly for the dispatch of the

cargo from Shanghai port. SEC appointed DHL for the same. The cargo is carried to Shanghai port

3-4 days prior to the booked date of berthing of vessel. On the booked date, cargo is loaded on

vessel and shipping documents are prepared by the shipping agency and SEC. These documents

are then presented to SEC bank and follow the process already discussed above in flow of

documents section. Normally it takes 15-20 days for the vessel from Shanghai to reach Kolkata

port and a month from a European port. During this transit time Logistics team prepares necessary

documents and arranges approvals for swift clearance of cargo on arrival. Pictures below show

how the cargo is stacked inside the vessel and how unloading of cargo is carried out at Kolkata.

Page 12: Supply Chain Management - Sasan Power (R-Power)

Some cargoes refuse to fit into neat little packages for simple transportation. They’re too big, too

heavy, too awkward, or simply too specialized to fit the norm. When it comes to transporting

over-dimensional or heavy-lift cargo, logistics demands are infinitely greater because they are

unique to each situation. The complexity of moving unwieldy cargo as quickly and economically as

possible requires collaborative partnership, attention to detail, and constant communication

across the supply chain. From pre-planning through execution, shippers and their supply chain

partners need to consider several factors to ensure project cargo moves without a hitch. These

cargos are generally referred as ODC (Over Dimensional Cargo) in Logistics Industry and involve

Page 13: Supply Chain Management - Sasan Power (R-Power)

specialized methods and Engineering for their movement. Breakup of the same is given in the

table below.

Description Weight

(MT)

Size

(Meter)

Total

Quantity

(Nos.)

Barge

Movement

(Nos.)

Mode of

Transport

Generator Stator 345 10.99 x 4.0 x 4.28 6 6 Barge & Road

IC-Transformers 180 7.8 x 4.6 x 5.2 7 7 Barge & Road

Generator

Transformer 230 7.4 x 4.2 x 5.2 19 19 Barge & Road

Deaerator

(Feed Tank) 147 42.6 x 3.86 Dia 6 0 Road

HP Heater – 8 155 14.3 x 2.5 x 2.5 6 0 Road

HP Heater – 7 146 15.1 x 2.5 x 2.5 6 0 Road

HP Heater – 6 105 13 x 2.5 x 2.5 6 0 Road

Reactor – 80

MVAR 94 4.82 x 4.01 x 3.47 10 0 Road

Total

66 32

Moving project cargo on shared roads often raises public safety and environmental concerns. Even

the slightest perception that communities will be impacted deserves attention. Transportation can

sometimes dictate how a product is manufactured—for example, whether it is delivered as one

unit or produced in multiple parts and assembled on-site. Project cargo buyers can conduct

transportation analysis and create routings before equipment is even sourced or manufactured.

Transit times and requirements vary widely for road, rail, air, ocean, or inland barge.

Transportation specialists with in-country knowledge can advise on length, width, height, and

weight restrictions that may necessitate using one mode of transportation over another.

2.2d Route followed

See map below for route.

Page 14: Supply Chain Management - Sasan Power (R-Power)

The above route is followed for transportation of General cargo. During the survey it was found

that the same route cannot be adopted for transportation of ODC cargo. Hence the Logistics team

came with up with an alternative for the same which was Multimodal transport. Some the heavy

sized cargo was moved on barge and road while normally followed road route but on hydraulic

axles.

Page 15: Supply Chain Management - Sasan Power (R-Power)

2.2e Road route for ODC (Deaerator & HP heater)

A- Haldia, B-Bagnan, C-Bardhaman, D-Bagodar, E-Mohania, G-Ramnagar, H-Waidhan

2.2f Multimodal route for ODC (Stator & GT)

Page 16: Supply Chain Management - Sasan Power (R-Power)

2.2g Movement of ODC cargo

Movement of Stator and Generator Transformer:

Stator and Generator Transformer were the two equipments that were transported using

multimodal concept. From Haldia to Zamania Jetty, these were brought on barges. Accurate

planning was done so that the barges don’t stand idle for even a single day after custom clearance

is done. It took about a month for the ODC to reach jetty. Figure below shows the barge

employment schedule.

Page 17: Supply Chain Management - Sasan Power (R-Power)

Once the ODC has reached Zamania Jetty, it has to be loaded on hydraulic axles which shall carry

the ODC out of the barge to land. The ODC was then to cross 3 railway crossings before reaching

river Son. Bridge on the Son river at Robertsganj had capacity to withstand 150 tons of load. GT

and Stator being more than 150 Tons, could not be carried on bridge. So a separate arrangement

was made to croos the river. It was decided to go for construction of bypass on river son using

sand bags and soil. It took about a month for construction. This was one of the big challenge as

there was always local rebels sometime from villagers and sometime by media. Also river Son used

to too violent when Dam behind the river used to release water once a week. Plan of bypass is in

the next page.

Page 18: Supply Chain Management - Sasan Power (R-Power)

Figure below shows the barge operation:

Movement of Deaerator:

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Complete transportation of ODC cargo was IT enabled. Movement of the ODC cargo was tracked

through GPS device attached to the Hydraulic Axles or Barge. Location of the ODC cargo was

monitored on daily basis and reports were published to top management accordingly.

Why not Rail Transport?

Passenger trains take priority over goods trains. So when the lines are busy, for instance during peak hours, the goods trains will have to be put on hold until it is allowed to continue.

The speed of trains in India are a lot slower, especially when carrying heavy goods, they go at approximately 50-60 kmph. This puts the trains almost at a snail’s pace compared to others.

The route the trains have to take is a lot longer (km) than via road, as it has to make many detours to go past stations, even though it is not a passenger train it still has to follow predefined passenger routes.

Goods/Cargo trains cannot go through cities during the day due to regulations this means that the train will continuously have to stop when reaching any mayor built-up areas, on top of already having to wait for passenger trains.

Goods on trains tend to get damaged more, especially in containers, as everything is rubbing against each other as the train rocks side to side on its journey. Therefore special care needs to be taken to stuff the trains accordingly to avoid as much damage as possible.

The cargo is ‘multi-handled’ from the plot to the train; this is incorporated into the time frame. The cargo goes from containers to rakes from rakes to containers etc. furthermore the train tracks are not on-site; therefore further transport is needed to reach the train tracks and load the cargo. The same goes for site, it needs to be moved yet again. In logistics is should always be a priority to minimize cargo handling as much as possible.

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Trains are also prone to robberies; locals tend to steal things from ‘parked’ trains especially in rural India. This is hard to control as there are usually only 2-3 people that have oversight of the whole length of the train.

Only general cargo will be transported via train, all other consignments will have to be transported via road.

Therefore it is better to avoid rail transport over large distances, road transport is more advisable.

In terms if SODC/ODC movement, General Cargo is not that big of an issue. As it will ultimately

safe cost because there is a lot more general cargo, so to transport it all in one go as oppose to

separate trucks will always be more beneficial.

Drivers of Supply Chain

The drivers of supply chain in case of Sasan Power Limited can be explained as under:

Facilities: GOI has provided about 2000 acres of land to SPL for the construction of power

project. SPL itself bought 500 acres additional land for the project thus providing a huge

space for storage of bulk cargo. Specific locations were laid out to store specific material

so that the required material is in vicinity to the required construction site. It had tied

with Kolkata port authorities for 30000 sqft of land and with TMIL port land at Haldia for

efficient unloading, storage of cargo. Site map is also attached in the report at last.

Inventory: The inventory levels at the project site vary as per the planned schedule. It was

a practice by logistics team to make the material available at site at least a week before

its erection or use. Still inventory of Steel and Cement was always demand based. This

was basically to make advantage of costs and avoid damage losses due to rain and rust.

Transportation: Already discussed above.

Information: The company is in process of implementing ERP across all its construction

facilities to make information available at all the steps of the supply chain which would

has helped in increasing the responsiveness of the supply chain.

Sourcing: The Company has strong Procurement and Operations team which take

necessary decision for the firm related to sourcing of goods. Best practices are used to

make supply chain efficient. Best Logistics service providers with market repute are

appointed by the company.

Pricing: Sasan Power Limited, being the part of India largest business house “Reliance”

has an edge at negotiations. As the project is very huge is size, voloume of business

available to LSPs is big hence the prices quoted by them are lowest in industry without

compromising with the quality.

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The Map below displays the storage locations at site.

Page 22: Supply Chain Management - Sasan Power (R-Power)

3.0 Recommendation

“Leading Organizations have long recognized that the key to success in supply chain management

is the information system ...often with tailored products in shorter time frames”

-Martin Christopher, Logistics and Supply Chain Management 4th Edition

The following solution that we provide we will back up with Logistics Literature, which defines

standards within the logistics community, the application of these theories and practices, will

hopefully ensure that the Supply Chain will be run more effectively. The reason why we are

applying it with actual literature is to show that the systems that we propose are available and

applicable to the construction of the SUMPP.

In supply chains each stage tends to feel disconnected from the others. This is because each stage

tries to optimize its own performance. As a result the interface between departments and

organizations need to be buffered. The effect of this is that the end to end pipeline becomes

considerably longer, responsiveness decreases and the total cost increase.

Please see the figure below for an illustration of how a IT system can help in synchronizing the

supply chain:

This figure shows the various departments that would benefit from an IT system; the possibilities

go far beyond this however, the proposed system does not have to be rigid it can be open sourced

to a certain extent. It will also allow for less human error, as parameters can be set within the

database that only allow for certain data types to be entered. Whereas now the bulk of

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information gets sent via spreadsheets, a database would allow for more accurate depictions of

the status of departments, as long as it is kept up to date.

To overcome this it is clear that Reliance needs to re-evaluate its supply chain to act as one

synchronized network not a series of separate ‘islands’. Synchronization implies that each stage in

the supply chain is connected to each other and that they all ‘march to the same drumbeat’. This

can be achieved through a more effective method of sharing information. The figure below

extracted from Martin Christopher’s book, shows an example of the difference between the two

situations described above, the latter being the most suitable.

This concept of synchronization is connected to the theory of the virtual supply chain, which

essentially means that you have another supply chain which cannot be ‘touched’ it illustrates the

current supply chain ‘virtually’. The internet has transformed this theory as it now allows the

virtual supply chain to come into being allowing departments and organizations to interact with

each other in a much more cost effective manner.

One of Britain’s major retailers, Tesco, is using an extranet to link with its suppliers to share point-

of-sale data. At the same time the company is successfully running a home shopping and delivery

system for consumers over the Internet. Within the business, intranets are in place that enables

information to be shared between stores and to facilitate communication across the business. We

are probably even now only scraping the surface in terms of how the Internet and its associated

technologies can be used to further exploit the virtual supply chain. Granted that this example is

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not related to a construction site, it none the less still illustrates the impact it is having upon large

corporations around the world.

In our opinion the best way to connect any Supply Chain is through continuous lines of

communication, this can be achieved through bespoke IT system connected via the internet. By

placing all the information and documents onto one centralized database updated and

coordinated by one department. In the Table below you can see the documents produced by each

department working on the SUMPP.

As you can see the amount of information required is phenomenal, and this is not even all of it,

this only scratches the surface of the actual amount of data needed for the entirety of the project.

However for the purpose of illustrating the scope of the problem this will suffice especially in

terms of the virtual supply chain. Because this is what it encompasses these documents represent

it, they are the back bone to the physical manifestation of the supply chain.

Through better synchronization through the supply chain we can hopefully simplify the flow of

information please see diagram below.

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4.0 References:

Here is list of reference which we used for collecting material apart from individual experience of member in the team.

1. Logistics and Supply Chain Management by Martin Christopher 2. Information survey on Logistics and Supply Chain (Reliance Library) 3. Ballou R 1998 Business Logistics Management: Planning, Organizing, and Controlling

the Supply Chain. Prentice Hall, New York. 4. Bayles DL 2000 E-commerce Logistics and Fulfillment: Delivering the Goods Prentice

Hall, New York. 5. Wikipedia, http://en.wikipedia.org 6. Inbound Logisics, http://www.inboundlogistics.com/cms/article/how-to-ensure-successful-

transportation-of-your-project-cargo/ 7. AllCargo Logictics, http://www.allcargologistics.com/services/project-engineering-and-

equipment-solutions/overview.aspx 8. GAC Logictics, https://www.gac.com/gacen/service.aspx?id=57242 9. Expeditors, http://www.expeditors.com/customer-solutions/project-cargo.asp 10. Reliance Infrastructure Limited, www.rinfra.com 11. Reliance power Limited, www.reliancepower.com 12. Project cargo Network, http://www.projectcargonetwork.com/

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