ORGANISATIONAL MARKETS AND

ORGANISATIONAL BUYING BEHAVIOUR

SUBMITTED BY:

PANKTI SHAH

SECTION B

ENROLL-1546
COMPANY PROFILE

ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's
operations are spread throughout the country with 14 modern cement factories, more than
30 Ready mix concrete plants, 20 sales offices, and several zonal offices. It has a
workforce of about 9,600 persons and a countrywide distribution network of over 9,000
dealers.

Since inception in 1936, the company has been a trendsetter and important benchmark for
the cement industry in many areas of cement and concrete technology. ACC has a unique
track record of innovative research, product development and specialized consultancy
services. The company's various manufacturing units are backed by a central technology
support services centre - the only one of its kind in the Indian cement industry.

Among the first companies in India to include commitment to environmental protection

as one of its corporate objectives, the company installed sophisticated pollution control
equipment as far back as 1966, long before pollution control laws came into existence.
Today each of its cement plants has state-of-the art pollution control equipment and
devices.

ACC plants, mines and townships visibly demonstrate successful endeavours in quarry
rehabilitation, water management techniques and ‘greening’ activities. The company
actively promotes the use of alternative fuels and raw materials and offers total solutions
for waste management including testing, suggestions for reuse, recycling and co-
processing.

ACC has taken purposeful steps in knowledge building. We run two institutes that offer
professional technical courses for engineering graduates and diploma holders which are
relevant to manufacturing sectors such as cement. The main beneficiaries are youth from
remote and backward areas of the country.
RAW MATERIAL REQUIRED

ACC has a countrywide spread of 14 modern cement plants. This large network of
manufacturing units consumes a wide spectrum of inputs – about 60,000 different items
ranging from Coal, Gypsum, Slag, Packaging material (bags), Refractories, Steel,
Grinding Media, Electrodes, Cables, Bearings, Conveyor Belts, Spares of various
mechanical, electrical and instrumentation equipment, Mining Equipment and their
spares and explosives. The main raw materials required are limestone and coal.

SUPPLIERS OF RAW MATERIAL

Limestone

ACC has rich experience in mining, being the largest user of limestone. It has access to
limestone mines from where it extracts limestone required for their cement factories.

ACC acquired 100 per cent of the equity of Lucky Minmat Private Limited. This
company holds limestone mines in the Sikar district of Rajasthan, and helps supplement
limestone supply to its cement plants.

Coal

ACC Mineral Resources Limited has already entered into Joint Venture arrangements for
prospecting, exploration and mining coal from the coal blocks in Madhya Pradesh and
West Bengal. The company is also exploring other opportunities for securing additional
coal and gypsum resources in India and abroad. As the largest cement producer in India,
it is one of the biggest customers of the domestic coal industry.

For its other materials, ACC has a vendor base of more than 6000 suppliers spread across
the country. A team of professionals at Corporate, Regions and Plant Level manages the
procurement function. The function is organized so as to derive maximum value for the
company through economies of scale from central pooling and procurement of some
inputs at the corporate level and thus meeting individual operational requirements at
plant level.
They have implemented a SAP based Enterprise Resource Planning (ERP) system for the
procurement function. Central procurement is divided into the following major groups:

• Raw materials
• Energy, Fuels and Gases
• Maintenance spares
• Wearing parts, Consumable materials
• Administrative & office supplies
• Services
• Packing

The structure provides for procurement managers at regional level and plants. There is a
separate projects head for procurement of capital equipment and purchases.

TRANSPORTATION

ACC is the biggest consumer of Indian Railways, and a considerable user of the
country’s road transport network services for inward and outward movement of materials
and products.

PROCUREMENT MANUAL

The procurement manual describes the processes and sequential and procedures to be
followed in procurement including vendor registration and appraisal, indenting and
tendering. There are detailed guidelines for negotiation, order acceptance, order
processing and execution and payment.
FACTORS AFFECTING VENDOR SELECTION

 Their vendors should be technically and financially sound.

 They should have the intrinsic capacity to serve the demand of ACC on time.
 Preference is given to vendors with with ISO (Quality & Environmental)
certification.
 They also consider factors such as environmental performance, social
responsibility initiatives and employment practices implemented by the vendors.
 Care is taken to ascertain that vendors and contractors, who operate within the
company’s premises, observe and conform to fair labour practices. The
engagement of children and adolescent labour is not permitted.

There is no specific policy for preferring local suppliers. In 2007 as many as 70 per cent
of their suppliers were regionally based and they supplied 30 per cent of total purchase
volume.
Any prospective vendor who wishes to do business with ACC must sincerely fill the
following vendor registration form.
SUPPLIER RELATIONSHIPS

ACC treats its vendors as business associates. All vendors are treated with respect and
dignity. Our vendor base includes reputed manufacturers and trusted brand names,
usually the leading 3-4 vendors of their particular industry segment who are technically
and financially sound and have the intrinsic capacity to supply material of desired quality
and on time. ACC prefers vendors who demonstrate good corporate citizenship and
promote sustainable development.

Adequate care is taken to ensure transparency in procurement processes. Our

procurement policy has a clearly defined code of practice for procurement conduct and
encourages fair and open competition in markets.
FACTORS AFFECTING THE DEMAND OF RAW MATERIALS

Environmental Factors

 Monsoon: During the four months of monsoon, there is a slack in the construction
activity and hence the demand for cement is less.

 During this season only that much cement which is demanded is produced. Since
cement hardens when comes in contact with moisture it cannot be stored in moist
conditions.

Economic Factors

 Freight charges on the inputs like coal, limestone diesel affect the demand.

 If the government spending on infrastructure is high then the demand for cement
is high, consecutively the demand for raw materials is also high.

 If there is an economic slow down and the real estate sector is hit badly then the
demand for cement is low.
PRODUCTS OFFERED

Ordinary Portland Cements

ACC Cement is the most commonly used cement in all constructions including plain and
reinforced cement concrete, brick and stone masonry, floors and plastering. It is also used
in the finishing of all types of buildings, bridges, culverts, roads, water retaining
structures, etc.

What is more, it surpasses BIS Specifications (IS 8112-1989 for 43 grade OPC) on
compressive strength levels.

ACC Cement is marketed in specially designed 50 kg bags.

53 Grade Cement : This is an Ordinary Portland Cement which surpasses the

requirements of IS: 12269-53 Grade. It is produced from high quality clinker ground with
high purity gypsum.

ACC 53 Grade OPC provides high strength and durability to structures because of its
optimum particle size distribution, superior crystalline structure and balanced phase
composition. It is available in specially designed 50-kg bags.

Blended Cements

Fly-ash based Portland Pozzolana Cement : This is a special blended cement,

produced by inter-grinding higher strength Ordinary Portland Cement clinker with high
quality processed fly ash - based on norms set by the company's R&D division. This
unique, value-added product has hydraulic binding properties not found in ordinary
cements.

It is available in specially designed 50-kg bags.

Due to its inherent characteristics, ACC Fly-ash based PPC makes very corrosion
resistant concrete that is superior to concrete made with OPC. It is more impermeable to
oxygen, CO2, chlorides, etc. Leaching of alkalis is reduced and the alkaline environment
around steel is maintained.