A PROJECT REPORT

On
Management Information System
At
ACC Ltd.
Academic Session 2010-12

INTERNATIONAL INSTITUTE FOR SPECIAL

EDUCATION, LUCKNOW

SUBMITTED TO
MR. VIKAS PRASAD
FACULTY MANAGEMENT

SUBMITTED BY
PRAKASH SINGH
1248
PGDM
 ACKNOWLEDGEMENT

The success of any research study depends upon a number of

factors among which the proper guidance from the experts in the
industry and a faculty plays an important role.

We take this opportunity to convey our sincere thanks and gratitude

to all those who have directly or indirectly helped and contributed
towards the completion of this project.

We take here a great opportunity to express our sincere and deep

sense of gratitude to Prof. VIKAS PRASAD for giving us an
opportunity to work on this project. The support & guidance from
Sir, was of great help & it was extremely valuable.

2
 EXECUTIVE SUMMARY

Decision making is an integral part of the functioning of any

organization. To facilitate Decision making in this ever-competitive
world it is imperative that managers have the right information at the
right time to bridge the gap between need and expectation. To
facilitate better flow of information adequate Management
Information Systems (MIS) is the need of the hour. Thus it is
important to have an understanding of the MIS followed in an
organization by all levels of management in order to take effective
decisions.

A management information system collects and processes data

(information) and provides it to managers at all levels who use it for
decision making, planning, program implementation, and control.
The MIS has many roles to perform like the decision support role,
the performance monitoring role and the functional support role.

To get a realistic and holistic view of the MIS, we studied the MIS
of ACC Limited. To get a more detailed understanding of a
particular function of the company, we studied the need, uses and
benefits of MIS with respect to the Material Department of the
company. Inventory Management was of prime focus in our study.

3
ACC Limited is one of the first Indian companies to realize the
potential and importance of information technology and adopt
automation and IT. The organization started computerizing its
systems as early as 1968.

The organization has traveled a long way from the days in 1968
when it was using simple keypunching machines. Significant
improvements have been made in the application systems and
infrastructure. From Batch processing to on-line systems, from
IBM1401 to the latest UNIX and Windows 2003 based machines it
has made timely transitions determined by available technologies
and business requirements. The MIS has greatly facilitated and
synchronized the information flow in the organization and the
management feels that is has played a role in the growth and
increased performance of the company.

4
 INTRODUCTION - DEFINITION OF MIS

Management Information Systems (MIS) is a system consisting of

people, machines, procedures, data bases and data models, as its
components. The system gathers data from Internal and External
sources of an organization; processes it and supplies Management
Information to assist managers in the process in decision making.
Thus it is safe to conclude that an information system is "a system
consisting of the network of all communication channels used within
an organization".

There are many potential benefits of MIS investments

Investing in information systems can pay off for a company in many

ways.

1. It can support a core competency.

2. Enhance distribution channel management.
3. Builds brand equity.
4. IT investment can boost production processes
5. Information systems allow company flexibility in its output
level.

5
An information system comprises of all the components that collect,
manipulate, and disseminate data or information. It usually includes
hardware, software, people, communications systems such as
telephone lines, and the data itself. The activities involved include
inputting data, processing of data into information, storage of data
and information, and the production of outputs such as management
reports.

OBJECTIVE OF THE STUDY

The objective of this project is to study the MIS implementation of

ACC Ltd. and with the help of this domain, to get an insight into the
needs of MIS in business setups on a big scale, various functions
performed by the MIS, benefits derived out of such a system and the
risks involved.

We intend to aim our study at analyzing the business needs of the

organization, key challenges or desired functional requirements of
the MIS, the IT solution that is currently implemented and the
outcome of such a system.

6
ACC Ltd. requires MIS to map internal processes and interaction
with the external environment to the technology and ensure the
solution delivers real benefits to the business.

SCOPE OF THE STUDY

The scope of our study is to understand the reasons behind the need
of MIS in ACC. We will develop knowledge of what information is
needed on a regular basis for decision making purposes and how it is
sought and used by ACC with the help of MIS .We will study the
MIS support to the Company as a whole with special emphasis on
Inventory Management practiced in the Material Stores Department
of the company. Through our interaction with the executives of ACC
Limited, we got an insight about the effectiveness of the MIS in
place at the organization.

METHODOLOGY

7
The Primary Data was collected from SAP Implementation Head IT
Infrastructure Managers in the Information System department of
ACC Limited by conducting telephonic interviews and collecting
documentation which gave an insight into the procedures being
followed with regards to the functioning of MIS.

The Secondary Data was taken from various online sources like the
website of the company www.acccement.com and various reference
books on MIS.

NEED FOR MANAGEMENT INFORMATION SYSTEM

This is a universally accepted fact that all managerial functions are

performed through decision making. For taking rational decisions,
timely and reliable information is essential and is procured through a
logical method of information collecting, processing and
disseminating to decision makers.

In today’s world of ever increasing complexities of carrying out

business, every organization, in order to survive and grow, must
have a properly planned, analyzed, designed and maintained MIS.

8
This need is even more increased because organizations now have to
compete not only locally but also globally.

MIS assist decision makers, by providing the required information

at various stages of decision making and thus greatly help the
organization to achieve its goals and objectives. On the other hand, if
an MIS is poorly planned and constructed, it may provide inaccurate,
irrelevant or obsolete information, which may even prove fatal for
the organization.

TYPES OF MIS AND USES

MIS CLASSIFICATION
MIS is a concept, which is a matter of degree rather than an absolute
one. In management there are perhaps few other areas other than
MIS which gas created so much controversy. We would make an
attempt to try to look into different types of MIS as they have
evolved during the course of time.
1. Transaction Processing System
2. Management Information System
3. Decision Support System

9
 4. Executive Support System
5. Office Automation System
6. Business Expert System

Transaction Processing System: It processes transactions and

produces reports. It represents the automation of fundamental,
routine processing used to support business operations. It does not
provide any information to the user for decision making. TPS uses
data and produces data.

Management Information System: MIS in an information system

that processes data and converts it into information. A management
information system uses TPS for its data inputs. The information
generated by the information system may be used for control of
operations, strategic and long-range planning, short-range planning,
management control and other managerial problem solving.

Decision Support System: A decision support system is an

information system application that assists decision-making. DSS
tends to be used in planning, analyzing alternatives and trial and
error search solutions. They incorporate a variety of decision-making
models and thus area capable of performing what-if analysis.

10
Executive Support System: An ESS is a special kind of DSS. It is
specially tailored for the use of chief executives of an organization to
support his decision-making. Thus ESS is a comprehensive
information system that includes various types of decision support
systems, but it is more specific and person oriented.

Office Automation System: Office automation refers to the

application of computer and communication technology to office
functions. Office automation systems are meant to improve the
productivity of managers at various levels of management by
providing secretarial assistance and better communication facilities.

Business Expert System: A BES is a knowledge based information

system that uses its knowledge about a specific, complex application
area to act as an expert.

ROLES OF MIS

THE PERFORMANCE MONITORING ROLE

11
MIS are not just statistics and data analysis. They have to be used as
an MBO (Management by Objectives) tool. They help:
 to establish relevant and measurable objectives
 to monitor results and performances (reach ratios)
 to send alerts, in some cases daily, to managers at each level of
the organization, on all deviations between results and pre-
established objectives and budgets.

THE FUNCTIONAL SUPPORT ROLE

Business processes and operations support function is the most basic.

It involves collecting, recording, storing, and basic processing of
data. Information systems support business processes and operations
by:
 recording, storing and processing sales data, purchase data,
investment data, payroll data and other accounting records
 recording, storing and processing inventory data, work in
process data, equipment repair and maintenance data, supply
chain data, and other production/operations records
 recording, storing and processing personnel data, salary data,
employment histories, and other human resources records

12
  recording, storing and processing market data, customer
profiles, customer purchase histories, marketing research data,
advertising data, and other marketing records
 recording, storing an processing business intelligence data,
competitor analysis data, industry data, corporate objectives,
and other strategic management records
use of all the above to implement, control, and monitor plans,
strategies, tactics, new products, new business models or new
business ventures.

THE DECISION SUPPORT ROLE

The business decision making support function goes one step further.
It is an integral part of making decisions. It allows users to ask
"What if…?" questions: What if we increase the price by 5%? What
if we increase price by 10%? What if we decrease price by 5%?
What if we increase price by 10% now, then decrease it by 5% in
three months? It also allows users to deal with contingencies: If
inflation increases by 5% (instead of 2% as we are assuming), then
what do we do? What do we do if we are faced with a strike or a new
competitive threat?

13
 COMPANY PROFILE – THE ACC LIMITED

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, 13 Ready mix concrete plants, 19 sales
offices, and several zonal offices. It has a workforce of about 9000
persons and a countrywide distribution network of over 9,000
dealers. ACC's research and development facility has a unique track
record of innovative research, product development and specialized
consultancy services. Since its inception in 1936, the company has

14
been a trendsetter and important benchmark for the cement industry
in respect of its production, marketing and personnel management
processes. Its commitment to environment-friendliness, its high
ethical standards in business dealings and its on-going efforts in
community welfare programs have won it acclaim as a responsible
corporate citizen. ACC has made significant contributions to the
nation building process by way of quality products, services and
sharing its expertise.

In the 70 years of its existence, ACC has been a pioneer in the

manufacture of cement and concrete and a trendsetter in many areas
of cement and concrete technology including improvements in raw
material utilization, process improvement, energy conservation and
development of high performance concretes.

ACC’s brand name is synonymous with cement and enjoys a high

level of equity in the Indian market. It is the only cement company
that figures in the list of Consumer Super Brands of India.

The company's various businesses are supported by a powerful, in-

house research and technology backup facility - the only one of its
kind in the Indian cement industry. This ensures not just consistency
in product quality but also continuous improvements in products,
processes, and application areas.

15
ACC has rich experience in mining, being the largest user of
limestone, and it is also one of the principal users of coal. As the
largest cement producer in India, it is one of the biggest customers of
the Indian Railways, and the foremost user of the road transport
network services for inward and outward movement of materials and
products.

ACC has also extended its services overseas to the Middle East,
Africa, and South America, where it has provided technical and
managerial consultancy to a variety of consumers, and also helps in
the operation and maintenance of cement plants abroad.

ACC demonstrates the practices of being a good corporate citizen

undertaking a wide range of activities to improve the living
conditions of the under-privileged classes living near its factories.

16
ORGANIZATIONAL STRUCTURE OF THE ACC
LTD.

17
Developments & Impact
Weak prices pull down the profits

As usual, cement prices and demand was weak in the monsoon

season (See Chart: Cement Prices in Q2). However, with the
delayed monsoons, the demand was not effected substantially,
as the construction activity continued in the early part of the
monsoon season.

18
Alike any other commodity business, the fortunes of cement
industry depends on the realizations. With the weak
realizations, the margins were under pressure, and the net profit
dipped 83.76 per cent from Rs 17.03 crore in Q2 FY ’02 to Rs
5.12 crore in Q2 FY ’03.

This falling price regime is now under check, and the prices
have improved in the early October by Rs 20 – 25 per bag, or
Rs 400 – 500 per tonne. Cement is a retail businesses, and
these price increase in on the retail level. The company will not
get the benefit of full amount, as the company sells on
wholesales price to the dealers. We believe that the company’s
realizations in coming quarters will increase by Rs 200-250 per
tonne. With the construction activities restarting after monsoon,
the demand will pick up, and the company will perform better
in the coming quarters.

Company retires high cost debt… reduces interest outgo

19
ACC has retired high cost debt of Rs 600 crore. The balance Rs
600 crore will be retired by the year end. ACC’s cost of
borrowing in FY ’02 is 8.87 per cent, and the company’s
interest/sales is 5.01 per cent in FY ’02 and 5.45 fro Q2FY ’02.
The company’s total borrowing as on 31st March ’02 is Rs
1,590 crore, out of which Rs 1,200 crore is high cost debt. In
the current quarter, the interest cost has fallen down to 3.33 per
cent of sales to 22.41 crore in Q2 FY ’03.

Financials
Result Analysis (Figures in Rs Crore)

Particulars Q2FY03 Q2FY02 % Change Q1FY03 % Change FY02

Net Sales 673.50 622.94 8.12 752.89 (10.54) 2,810.63
Other Income 13.95 8.61 62.02 8.58 62.59 39.72
Total Income 687.45 631.55 8.85 761.47 (9.72) 2,850.35
Total Expenditure 621.64 532.53 16.73 657.21 (5.41) 2,394.98
-(Incr)/Decr in stock 2.56 (4.80) (153.33) 21.04 (87.83) 24.77
-Raw Material
Consumption 99.43 81.83 21.51 97.82 1.65 373.39
-Staff Cost 44.45 43.82 1.44 45.71 (2.76) 184.82
-Coal & Oil for kilns 86.98 70.51 23.36 82.38 5.58 292.24
-Power & Fuel 86.25 74.33 16.04 89.06 (3.16) 324.14
-Freight 97.93 85.62 14.38 121.21 (19.21) 411.51
-Purchase of Cement,
etc 42.15 51.36 (17.93) 42.35 (0.47) 184.48
-Other Expenditure 161.89 129.86 24.67 157.64 2.70 599.63
Operating Profit (Excl
of OI) 51.86 90.41 (42.64) 95.68 (45.80) 415.65
Operating Profit (Incl
of OI) 65.81 99.02 (33.54) 104.26 (36.88) 455.37
Depreciation 40.69 35.19 15.63 40.67 0.05 151.14
Gross Profit 25.12 63.83 (60.65) 63.59 (60.50) 304.23
Interest 22.41 33.98 (34.05) 34.26 (34.59) 140.78
PBT 2.71 29.85 (90.92) 29.33 (90.76) 163.45
Tax 0.05 13.47 (99.63) 9.70 (99.48) 33.90
PAT 2.66 16.38 (83.76) 19.63 (86.45) 129.55
Extraordinary Items 2.46 0.65 278.46 0.21 1,071.43 0.88
Net Profit 5.12 17.03 (69.94) 19.84 (74.19) 130.43
Equity 171.08 170.88 0.12 171.10 (0.01) 171.05
Financial Ratios

20
 EPS 0.30 1.00 1.16 7.63
CEPS 2.68 3.06 3.54 16.46
OPM (excl. OI) (%) 7.70 14.51 12.71 14.79
OPM (incl. OI) (%) 9.77 15.90 13.85 16.20
Interest / Sales (%) 3.33 5.45 4.55 5.01
GPM (%) 3.73 10.25 8.45 10.82
Tax / PBT (%) 1.85 45.13 33.07 20.74
NPM (%) 0.76 2.73 2.64 4.64

Analysis of Financials
Strong volume growth results in marginal top line
growth
ACC sold 33.84 lakh tonnes of cement in the second quarter of
the current fiscal year, as against 26.29 lakh tonnes in same
period of the previous year, thus posting a 28.72 per cent
growth. This resulted in company’s cement division’s sales
growing at 11.67 per cent from Rs 635.80 crore in Q2 FY ’02
to Rs 710.00 crore in Q2 FY ’03.

Total net sales (net of excise duty) rose 8.12 per cent, from Rs
622.94 crore in Q2 FY ’02 to Rs 673.50 crore in Q2 FY ’03.
Operating profits down, due to weak realizations

Weak cement prices pulled down the overall profitability of the company by
42.64 per cent, from Rs 90.41 crore to Rs 51.86 crore. OPM fell from 14.51
per cent to 7.70 per cent. Operating profit (incl OI) fell 33.54 per cent from Rs

21
99.02 crore to Rs 65.81 crore or from 15.90 per cent to 9.77 per cent. This
was because, other income increased from Rs 8.61 crore to Rs 13.95 crore.

Net profit down on higher depreciation

Net profit was down 83.76 per cent from Rs 17.03 crore to Rs 5.12 crore.
NPM fell from 2.73 per cent in Q2 FY ’02 to 0.76 per cent in Q2 FY ’03.
Wadi plant went operational last year, thus the provision for depreciation was
up by 15.63 per cent to Rs 40.69 crore, from Rs 35.19 crore.

Segmental Financial Analysis

(Figures in Rs Crore)

Particulars Q2FY03 Q2FY02 Q1FY03

Segment Revenues
Cement 710.00 635.80 804.09
Refractories 49.88 42.84 42.44
RMC 18.43 21.12 21.31
Others 20.50 21.87 19.97
Total 798.81 721.63 887.81
Segment Results (PBIT)
Cement 22.39 89.33 62.80
Refractories 5.83 4.80 4.68
RMC 1.64 0.52 1.89
Others 4.27 2.75 3.93

22
 Total 34.13 97.40 73.30
Segment Capital Empl
Cement 2,179.27 1,797.38 2,238.59
Refractories 85.42 97.70 85.85
RMC 65.71 68.42 65.55
Others 45.89 54.27 47.13
Total 2,376.29 2,017.77 2,437.12
Segment PBIT Margins (%)
Cement 3.15 14.05 7.81
Refractories 11.69 11.20 11.03
RMC 8.90 2.46 8.87
Others 20.83 12.57 19.68
Total 4.27 13.50 8.26
Segment RoCE (%)
Cement 4.11 19.88 11.22
Refractories 27.30 19.65 21.81
RMC 9.98 3.04 11.53
Others 37.22 20.27 33.35
Total 5.75 19.31 12.03

Cement division’s profitability and margins fall

With the weak cement prices, the profitability of the cement
division was under pressure. While revenues of the division
increased from Rs 635.80 Q2 FY ’02 crore to Rs 710.00 crore
in Q2 FY ’03, the PBIT of the division fell from Rs 89.33 crore
to Rs 22.39 crore in the same periods. PBIT margins of the
division fell from 14.05 per cent to 3.15 per cent. Return on
Capital (PBIT/CE) was down from 19.88 per cent in Q2 FY
’02 to 4.11 per cent in Q2 FY ’03.

RMC division posts strong growth

23
Ready Mix Concrete (RMC) constitutes a very small part (2.31
per cent) of the company’s turnover. This division has shown a
degrowth in turnover, with the sales dropping from Rs 21.12
crore in Q2 FY ‘021 to Rs 18.43 crores in Q2 FY ’03. While
the turnover fell, the PBIT of the division surged from Rs 0.52
crore to Rs 1.64 crore. This shows that the division is now
making reasonable profits, with the RoCE (PBIT/Capital
Employed) up at 9.98 per cent in Q2 FY ’03, from 3.04 per
cent in Q2 FY ’02. The RoCE in Q1 FY ’03 was in the same
levels of 11.53 per cent, and has reduced due to fall in turnover
in Q2.

Refractories and Other business divisions are giving

adequate RoCE

RoCE from other divisions – refractories and others have

contributed well to the overall RoCE of the company. While
RoCE of refractories division was up from 19.65 per cent to
27.30 per cent, other businesses’ RoCE was up from 20.27 per
cent to 37.22 per cent.

Valuations
ACC is quoted at a PE of 7.63x of its FY ’02 earnings.

Risk: The risk in ACC’s business from current level is more

industry risk rather than company specific risk.

Growth: The major factors for growth for the company are:

1. Cement prices have increased by Rs 20-25 per bag, and

this price rise in sustainable. Thus, the company will see
strong revenue growth in the coming quarters, backed by
better realizations.

24
 2. Company’s effort to rationalize manpower is yielding
results. The company has reduced 1,000 employees in FY
’02 and will reduce the headcount by the same number in
this fiscal. This will reduce the staff cost substantially.

3. Company retiring debt will result in reducing the

interest burden of the company and improve profitability
in the coming quarters. By the end of the year, the
company will retire all its high cost debt.
Developments & Impact

Market
CMP Cap (RS Market Cap / Sales (RS OPM
Company (RS) PE (x) Cr) Sales (x) Cr) (%) NPM (%)
GACL 160.60 13.36 2,492.19 1.80 1,383.78 22.05 11.79
ACC 154.25 20.22 2,506.62 0.89 2,810.63 15.01 4.61
Grasim 302.50 9.15 2,878.15 0.66 4,371.92 18.37 7.96
L&T 196.45 14.08 4,806.60 0.61 7,891.25 13.97 4.15
Weak prices pull down the profits

As usual, cement prices and demand was weak in the monsoon season (See
Chart: Cement Prices in Q2). However, with the delayed monsoons, the demand
was not effected substantially, as the construction activity continued in the early
part of the monsoon season.

25
Alike any other commodity business, the fortunes of cement industry depends
on the realizations. With the weak realizations, the margins were under
pressure, and the net profit dipped 83.76 per cent from Rs 17.03 crore in Q2 FY
’02 to Rs 5.12 crore in Q2 FY ’03.

This falling price regime is now under check, and the prices have improved in
the early October by Rs 20 – 25 per bag, or Rs 400 – 500 per tonne. Cement is
a retail businesses, and these price increase in on the retail level. The company
will not get the benefit of full amount, as the company sells on wholesales price
to the dealers. We believe that the company’s realizations in coming quarters
will increase by Rs 200-250 per tonne. With the construction activities restarting
after monsoon, the demand will pick up, and the company will perform better in
the coming quarters.

Company retires high cost debt… reduces interest outgo

ACC has retired high cost debt of Rs 600 crore. The balance Rs 600 crore will be
retired by the year end. ACC’s cost of borrowing in FY ’02 is 8.87 per cent, and
the company’s interest/sales is 5.01 per cent in FY ’02 and 5.45 fro Q2FY ’02.
The company’s total borrowing as on 31 st March ’02 is Rs 1,590 crore, out of
which Rs 1,200 crore is high cost debt. In the current quarter, the interest cost
has fallen down to 3.33 per cent of sales to 22.41 crore in Q2 FY ’03.

Financials

Result Analysis (Figures in Rs Crore)

26
 Particulars Q2FY03 Q2FY02 % Change Q1FY03 % Change FY02
Net Sales 673.50 622.94 8.12 752.89 (10.54) 2,810.63
Other Income 13.95 8.61 62.02 8.58 62.59 39.72
Total Income 687.45 631.55 8.85 761.47 (9.72) 2,850.35
Total Expenditure 621.64 532.53 16.73 657.21 (5.41) 2,394.98
-(Incr)/Decr in stock 2.56 (4.80) (153.33) 21.04 (87.83) 24.77
-Raw Material
Consumption 99.43 81.83 21.51 97.82 1.65 373.39
-Staff Cost 44.45 43.82 1.44 45.71 (2.76) 184.82
-Coal & Oil for kilns 86.98 70.51 23.36 82.38 5.58 292.24
-Power & Fuel 86.25 74.33 16.04 89.06 (3.16) 324.14
-Freight 97.93 85.62 14.38 121.21 (19.21) 411.51
-Purchase of Cement, etc 42.15 51.36 (17.93) 42.35 (0.47) 184.48
-Other Expenditure 161.89 129.86 24.67 157.64 2.70 599.63
Operating Profit (Excl of OI) 51.86 90.41 (42.64) 95.68 (45.80) 415.65
Operating Profit (Incl of OI) 65.81 99.02 (33.54) 104.26 (36.88) 455.37
Depreciation 40.69 35.19 15.63 40.67 0.05 151.14
Gross Profit 25.12 63.83 (60.65) 63.59 (60.50) 304.23
Interest 22.41 33.98 (34.05) 34.26 (34.59) 140.78
PBT 2.71 29.85 (90.92) 29.33 (90.76) 163.45
Tax 0.05 13.47 (99.63) 9.70 (99.48) 33.90
PAT 2.66 16.38 (83.76) 19.63 (86.45) 129.55
Extraordinary Items 2.46 0.65 278.46 0.21 1,071.43 0.88
Net Profit 5.12 17.03 (69.94) 19.84 (74.19) 130.43
Equity 171.08 170.88 0.12 171.10 (0.01) 171.05
Financial Ratios
EPS 0.30 1.00 1.16 7.63
CEPS 2.68 3.06 3.54 16.46
OPM (excl. OI) (%) 7.70 14.51 12.71 14.79
OPM (incl. OI) (%) 9.77 15.90 13.85 16.20
Interest / Sales (%) 3.33 5.45 4.55 5.01
GPM (%) 3.73 10.25 8.45 10.82
Tax / PBT (%) 1.85 45.13 33.07 20.74
NPM (%) 0.76 2.73 2.64 4.64

Analysis of Financials

Strong volume growth results in marginal top line growth

ACC sold 33.84 lakh tonnes of cement in the second quarter of the current fiscal
year, as against 26.29 lakh tonnes in same period of the previous year, thus
posting a 28.72 per cent growth. This resulted in company’s cement division’s
sales growing at 11.67 per cent from Rs 635.80 crore in Q2 FY ’02 to Rs 710.00
crore in Q2 FY ’03.

Total net sales (net of excise duty) rose 8.12 per cent, from Rs 622.94 crore in
Q2 FY ’02 to Rs 673.50 crore in Q2 FY ’03.

Operating profits down, due to weak realizations

Weak cement prices pulled down the overall profitability of the company by
42.64 per cent, from Rs 90.41 crore to Rs 51.86 crore. OPM fell from 14.51 per
cent to 7.70 per cent. Operating profit (incl OI) fell 33.54 per cent from Rs
99.02 crore to Rs 65.81 crore or from 15.90 per cent to 9.77 per cent. This was
because, other income increased from Rs 8.61 crore to Rs 13.95 crore.

Net profit down on higher depreciation

27
Net profit was down 83.76 per cent from Rs 17.03 crore to Rs 5.12 crore. NPM
fell from 2.73 per cent in Q2 FY ’02 to 0.76 per cent in Q2 FY ’03. Wadi plant
went operational last year, thus the provision for depreciation was up by 15.63
per cent to Rs 40.69 crore, from Rs 35.19 crore.

Segmental Financial Analysis

(Figures in Rs Crore)

Particulars Q2FY03 Q2FY02 Q1FY03

Segment Revenues
Cement 710.00 635.80 804.09
Refractories 49.88 42.84 42.44
RMC 18.43 21.12 21.31
Others 20.50 21.87 19.97
Total 798.81 721.63 887.81
Segment Results (PBIT)
Cement 22.39 89.33 62.80
Refractories 5.83 4.80 4.68
RMC 1.64 0.52 1.89
Others 4.27 2.75 3.93
Total 34.13 97.40 73.30
Segment Capital Empl
Cement 2,179.27 1,797.38 2,238.59
Refractories 85.42 97.70 85.85
RMC 65.71 68.42 65.55
Others 45.89 54.27 47.13
Total 2,376.29 2,017.77 2,437.12
Segment PBIT Margins (%)
Cement 3.15 14.05 7.81
Refractories 11.69 11.20 11.03
RMC 8.90 2.46 8.87
Others 20.83 12.57 19.68
Total 4.27 13.50 8.26
Segment RoCE (%)
Cement 4.11 19.88 11.22
Refractories 27.30 19.65 21.81
RMC 9.98 3.04 11.53
Others 37.22 20.27 33.35
Total 5.75 19.31 12.03

Cement division’s profitability and margins fall

With the weak cement prices, the profitability of the cement division was under
pressure. While revenues of the division increased from Rs 635.80 Q2 FY ’02
crore to Rs 710.00 crore in Q2 FY ’03, the PBIT of the division fell from Rs 89.33
crore to Rs 22.39 crore in the same periods. PBIT margins of the division fell
from 14.05 per cent to 3.15 per cent. Return on Capital (PBIT/CE) was down
from 19.88 per cent in Q2 FY ’02 to 4.11 per cent in Q2 FY ’03.

RMC division posts strong growth

Ready Mix Concrete (RMC) constitutes a very small part (2.31 per cent) of the
company’s turnover. This division has shown a degrowth in turnover, with the
sales dropping from Rs 21.12 crore in Q2 FY ‘021 to Rs 18.43 crores in Q2 FY
’03. While the turnover fell, the PBIT of the division surged from Rs 0.52 crore

28
to Rs 1.64 crore. This shows that the division is now making reasonable profits,
with the RoCE (PBIT/Capital Employed) up at 9.98 per cent in Q2 FY ’03, from
3.04 per cent in Q2 FY ’02. The RoCE in Q1 FY ’03 was in the same levels of
11.53 per cent, and has reduced due to fall in turnover in Q2.

Refractories and Other business divisions are giving adequate RoCE

RoCE from other divisions – refractories and others have contributed well to the
overall RoCE of the company. While RoCE of refractories division was up from
19.65 per cent to 27.30 per cent, other businesses’ RoCE was up from 20.27 per
cent to 37.22 per cent.

Valuations

ACC is quoted at a PE of 7.63x of its FY ’02 earnings.

Risk: The risk in ACC’s business from current level is more industry risk rather
than company specific risk.

Growth: The major factors for growth for the company are:

1. Cement prices have increased by Rs 20-25 per bag, and this price rise in
sustainable. Thus, the company will see strong revenue growth in the
coming quarters, backed by better realizations.

2. Company’s effort to rationalize manpower is yielding results. The

company has reduced 1,000 employees in FY ’02 and will reduce the
headcount by the same number in this fiscal. This will reduce the staff
cost substantially.

3. Company retiring debt will result in reducing the interest burden of the
company and improve profitability in the coming quarters. By the end of
the year, the company will retire all its high cost debt.

RELATIVE VALUATIONS

Market Cap Market Cap / Sales (RS

Company CMP (RS) PE (x) (RS Cr) Sales (x) Cr) OPM (%) NPM (%)
GACL 160.60 13.36 2,492.19 1.80 1,383.78 22.05 11.79
ACC 154.25 20.22 2,506.62 0.89 2,810.63 15.01 4.61
Grasim 302.50 9.15 2,878.15 0.66 4,371.92 18.37 7.96
L&T 196.45 14.08 4,806.60 0.61 7,891.25 13.97 4.15

Technicals :

Last Price : 152

13 day EMA : 145

29
 50 day EMA : 142

200 day EMA : 146

INVENTORY MANAGEMENT

A product that is in excessive demand is usually extremely difficult

to manage. Supplying the right amount of products implies that an

30
accurate demand forecast is essential. This impacts the entire supply
chain to facilitate efficient consumer response based on consumer
demands it becomes imperative that such companies consider
inventory management seriously. Making accurate demand and
supply predictions is an ideal situation that anyone in the supply
chain management arena could dream off.
By providing timely accurate information pertaining to inventory
location, movement and valuation, receipt of goods, sale and return
of goods and profits you can make sure that your inventory is visible
throughout a network.

With inventory management you can set your product catalog to hide
products that are not in stock, or change prices based on the amount
of products available in the warehouse. The quantity available can be
displayed to the shopper and this can prevent unnecessary confusion
when the shopper adds items not available to a shopping cart. The
store buyer can be automatically notified about low inventory levels.

IT (Information Technology) is a key enabler in the transformation

of purchasing into a strategic business function. The challenge is to
find a way to put these technologies to use and create value and
competitive advantage.

31
The Main Objectives in Inventory Management are:

 Improved customer service

 Reduced inventory investment
 Increased productivity
 Benefits of inventory management applications
 Complete control of inventory.
 Complete information about the value of the inventory
 Complete visibility on Quantities on hand, Quantities
committed and Quantities sold
 Response time to demand changes reduced
 Increased sales
 Knowledge of the exact size of merchandizing inventory
 Taxes and insurance premiums paid on excess
merchandize inventory avoided.

32
MIS AT ACC CEMENT

GENERAL INFORMATION

ACC is one of the first Indian companies to realize the potential and
importance of information technology and adopt automation and IT.
The organization started computerizing its systems as early as
1968.The organization has traveled a long way from the days in
1968 when it was using simple keypunching machines. Significant
improvements have been made in the application systems and
infrastructure. From Batch processing to on-line systems, from
IBM1401 to the latest UNIX and Windows 2003 based machines it
has made timely transitions determined by available technologies
and business requirements.

33
ACC has made a quantum jump from in-house developed systems
using Oracle 9i and Developer 6i to an ERP based solution. This
decision was solely based on its strategic objectives and the business
benefits that are expected to follow. With this move people, business
processes and technologies across the country are aligned.
The implementation of ERP solution for process control is shown in the figure below.

34
 Fig.1 The ERP implementation for process control at ACC Ltd.

IT department is still continuously working on improving the

functionality and removing the errors of the system. As a result
system is becoming better day-by-day, thus improving the
productivity of the company.

NEED FOR AN INTEGRATED MIS

The benefits associated with an integrated MIS are

 Better processing of the large volume of data in an
organization.
 Reducing the Redundancy of Data that occurs in case of
separate packages.
 Availability of all the required information about any
department through a common system.
 Making the system capable of supporting the managers in
making decisions.

35
  Facilitate the communication between the various
regional offices of the company and the corporate office
along with the main plant.
 Use of online data to speed up the information flow of the
organization and facilitate decision-making

FUNCTIONS PROVIDED BY CURRENT MIS

Plant (Manufacturing & Maintenance)

Production
• Break down and Plant performance Module
• MIS Reports and stoppage Module, Stock position
Raw Materials Management System
• Integration with Weigh Bridge and Security Gate
• Daily stock, issue position and bill passing
• Transport Freight Payment Systems
Weigh Bridge
• Integrated with Security Gate

36
 • Stopped one mechanical weigh bridge
• 500 trucks can weigh for gross and tare in single day
500x2 = 1000
• Time Management Reports, Truck Movement reports
• Weighment is integrated with invoice cum challan freight
• Payment
• Truck position inside and outside the plant.
Computerized Preventive Maintenance Software
• Both plant are using this module
• Preventive Maintenance and Break down Module
• Shutdown module and integrated with inventory
• Forecasting of spares and skills usage module

Inward & Outward Materials Security

• Control on returnable goods
Work Order and analysis
• Work Order will be prepared by authorized person
• Provided to all departments. Integrated with Rate Master
• And budget.
Labour Deployment and accounting System
• Daily supply of Contractor Labour deployment

37
 • Against regular, adhoc and shutdown requirements
• Daily/monthly/yearly analysis reports
• Contractor labour Bill passing system
Commercial Applications
Marketing Accounting and analysis System
• Excise module and Sales Tax Module
• Transport Bill passing module
• Order Confirmations and Dispatch Instruction
• Free Market Requirements, Railway Receipt
• Commercial Invoice, Debit Note, Credit Notes.
Stores Inventory & Non Inventory
• On Line indent, Issue and Receipt Materials
• Delivery Schedule
• Controlling the inventory
• Controlling the increased inventory
• Stores Ledger, consumption Summary
• MIS reports, Budget V/s Actual Consumption.
• Integrated with financial Package
• Repair & maintenance inventory, Department Wise Expenses.
Purchase Management System
• Purchase Order integration with indent

38
 • On line enquiry, Party wise information
• Pending list of purchase order
• MIS reports, Purchase / Indent Register
• Payment Advice System (Advance, regular)
Financial Accounting System
• All types of voucher feeding
• Purchase and freight bill passing
• Other Expenses bill passing and TDS Module
• General Ledger, Sub Ledger and Trial balance of two
• Financial years.
• Auto payment advice, Bank forwarding letters, payment
• System, Overhead Analysis reports.
• Integrated with inventory and Payroll module MIS Reports
• Cash Budget,
Vehicle Movement
• Controlling on Taxi, Car etc
On line General information System
• Information provided to Users about
• On line Leave status I.e. opening, availed and closing status
• Electricity Deduction Employee wise, Quarter wise
• Over time Status department wise

39
 • Welfare rules and Regulations, Telephone list, accidental etc
• Actual Consumption against budget, Welfare information
Human Resource Development
• Topic Courses, General Awareness Programme,
• TNA of Workmen, TNA of LCW, Individual record of ext/int
• Training, Pending Training etc.
Payroll & PIS Module
• Payslip of Staff, Worker, School, Badli & Casual Worker
• PF, VPF, Bonus, Gratuity Module
• LIC, CTD, Thrift Society, Co-operative advances Module.
• Recovery & Deduction, PIS and Income Tax Employee wise
• Integrated with Financial Package
• Over Time, C-off Module
• Payroll of Marketing Department (Transferred from HO)
Sales Accounting Systems
• Sales Accounting Systems, Rent Payment System
• Data loading, Expenses Payment System,
• Freight Payment, MIS, Transferring in FAS
Gate Pass System (Returnable &Non-returnable goods)
• All goods send through Computerized Gate Pass
• Integrated with Gate System.

40
• Pending repair items information

41
42
Architecture of MIS at ACC Limited

Weigh Co-operative
Bridge & CMMS Management
Gate (Computerized Mines System
System Management System)

Payroll &
Inventory Leave
System Manage
MAAS ment
(Marketing System
& Analysis
System)

Production
Costing Package
Financial Package
System

43
Inventory Management Module of Current MIS

Current MIS of the company is basically a In-house developed

system, also comprising of few specialized readymade software
packages bought from outside developers. It comprises of 11 main
modules covering all the main functions of the company.
Inventory Management Module is one of the most important
parts of the system. It is highly integrated with the other modules and
capable of functionalities like Auto Alarming when inventory is low.
It is capable of generating more than 200 different types of reports to
help managers in different required ways. Its main parts include
Inventory issue, purchase, bill passing, other OER passing, freight
passing, stock updation etc.

44
DFDs and Data processing diagrams:

Inventory Package Context Level Diagram (CFD):

Inventory Package Issue DFD:

45
Inventory Purchase DFD:

Data Processing (Full Inventory Module)

46
Application used for Work order Preparation at The ACC Ltd.
1. ITEM CODE CREATION

47
• There are 9 types of item group in Non Catalogue Item

– Medicines 806
– Stationary 807
– Repair Order 808
– Transportation Order 809
– Raw materials 810
– Capital Orders 811
– Job Orders 812

48
 – Laboratory Items 813
– Direct book orders 814

2. Indent Posting
3. Indent Sanctioning
4. Indent Type Updation

5. Order Preparation
6. Order Printing

49
IDENTIFICATION OF PROBLEMS

50
After analyzing the system properly, we came to a basic conclusion
that system is working fine at an overall level and consisting of very
minimal problems. These problems can’t be stated as such problems
and instead can be stated as future path. Still we tried to jot down the
few of them, which are as follows: -
• Still lack of system integration after a level. Though
inventory management module is integrated well with all the
other modules like financial system, thus reducing the
redundancy. But still there is need of paper work and manual
intervention when reordering is required. System cannot be
configured to reorder automatically, even for the fast moving
raw material.
• Lack of Web Integration. ACC hasn’t still employed the
concept of taking orders or ordering through web and have no
integration of its system to its website.
• Legacy Network Support. Backbone network used by ACC is
still the same, which they used in 1993. They haven’t upgraded
the network support from then, which has started creating
problems for them already. As MIS of the company is
improving day-by-day including more and more
functionalities, the network has already become very slow.

51
• Lack of training to managers to effectively use the decision
support functionalities of system. This is another problem
that we felt at the company. IT department is basically making
the improvements in the system continuously with new added
functionalities, but there is lack of training to managers to
effectively use these functions in way that can support them to
make better decisions. For example, on an average, a manager
uses only 10-15 types of reports out of more than 200 types of
reports available.

Information Use among Working Women in the

Associated Cement Company (ACC)

52
Introduction

The idea that women in India are best suited to being at home is
gradually changing. With the changing economic environment, more
and more Indian women who were confined to their household
duties are taking up jobs in well-established offices and companies to
ensure a definite income for them. There are others who have their
own business and are engaged in other industrial activities, although
the number of women in this category is comparatively low
(Venkataraman, 1995, p.1).

Working women need constant updating of their knowledge to

demonstrate their skills, abilities, leadership qualities, and job
efficiency, as well as knowledge on their rights, responsibilities, and
limitations. This can occur through continuous reading, adequate
training, education, and effective library facilities to support these
information needs. While the literacy rate of Karnataka state has
increased to 64.04 percent since the year 2001, the male literacy rate
is 76.29 percent while the female literacy rate remains at 57.45
percent, which is far below than state average (Vijayaraghavachar, S
M. 2001, p.70)

Reading not only enriches the mind but sharpens the intellect of the
reader. Reading is necessary for working women to develop their
personality and to find solutions to problems they encounter not only
on the job but also in their day to day life. A library is a service
institution that can justify its existence only when it satisfies the
information requirements of its users. User satisfaction is one of the
basic objectives of the collection of any library. To systematically
plan the organisation and development of library resources and

53
services, as well as to assess the information needs of the users, user
studies are becoming crucial and imperative. The present study,
therefore, evaluates and assesses the information needs and
information-seeking behaviour of working women.

Background of ACC Cements, Wadi

The Associated Cement Company (ACC) was set up in 1968 with an

installed capacity of 4 Lakhs (400,000) per annum of ordinary
Portland cement clinker. Subsequently the capacity was enhanced in
two phases to 20 Lakh tonnes per annum. The current capacity after
the commissioning of new plant is 40 Lakh tonnes per annum. The
factory is situated in the south-central part of India in the state of
Karnataka. It is well connected by railroad and highway. The nearest
important railway junction, Wadi, is on the central railway between
Solapur and Guntakal. Wadi station is about 1.0 kilometer from the
plant site. The plant machineries were originally supplied by M\S.
Taylor and M\S. ABL and were later renovated and upgraded over
ten years (Bhatt, 1998)

It is presently one of the largest cement units in India with net assets
worth Rs. 2843 crores sales amounting to Rs. 2,921 crores (units of
10 million) and annual revenues of Rs 3,322 crores. Its annual
cement production capacity is 15.5 million tons. The company's
enterprises are supported by a powerful in-house research and
technology facility, the only one of its kind in the Indian cement
industry. This ensures not just consistency in product quality but also
continuous improvements in products, processes, and applications.

Wadi Cement Works manufactures ordinary Portland cement Type

43'53 grade (latest version of IS; 8112 and IS; 12269 respectively)
and Portland pozzolana cement (latest version of IS; 1489 PART -I)

54
under the brand name ACC SURAKSHA which makes use of fly ash
up to 25 percent, thereby helping in maintaining a pollution free
environment. The existing colony of ACC, Wadi, is at a distance of
about 1.2 km. Wadi is a main railway junction on the broad-gauge
line connecting Wadi with Mumbai, Hyderabad, Chennai, and
Bangalore.

Employment Profile of ACC Ltd. Wadi

ACC Cements, Wadi, directly and indirectly provides livelihood to

100,000 people. It employs about 1,600 people as permanent
employees and about 500-800 as contract labour. In addition, there
are people working as transporters, drivers, cooks, etc. There are a
large number of businesses flourishing on account of ACC. These
are as diverse as tailoring, pan shops, STD booths, etc.

Hypotheses

One of the positive hypotheses formulated in this study is that

information needs and use behaviour of working women have a
definite relationship with characteristics such as qualifications,
subject specialization, and the amount of time available to each
woman. Also, their domestic burdens, including the responsibility of
nurturing children, might have a substantive influence in keeping the
working women away from continuous reading.

Methodology and Sample

The target population of this study is the working women of ACC

Ltd. Wadi. Since the target population includes rural as well urban
dwellers, and all of them are literate, a questionnaire was used for the
collection of data. The population surveyed included exclusively the
working women of the Associated Cement Company Ltd. Wadi,

55
Gulbarga District. The questionnaire was personally distributed to a
group of selected working women covering different fields of
specialization in the industry. A total of 125 questionnaires was
distributed. One hundred responses were received, a response rate of
69.l93 percent. The data was tabulated and analysed for results and
discussion.

Aims and Objectives

The objectives of the study are:

1. To identify information needs and use behaviour of the working

women in an industrial organization;

2. To discover the amount of time spent in reading and acquiring

information;

3. To identify the libraries and the source(s) of reading materials the

working women depend upon;

4. To identify the information seeking behaviour of the working

women;

5. To identify the major factors that prevent the working women

from continuous reading, as well as the factors those influence their
information use behaviour;

6. To identify the type and form of sources of information they are

interested in; and

7. To suggest appropriate measures for improvement of the existing

library facilities.

Scope and Limitation

56
The study is confined to the working women of Associated Cement
Company Ltd. (ACC) Wadi, Gulbarga District, India. The following
limitations are identified:

1. It investigates the information needs and use behaviour of the

working women (limitation by respondent);

2. It covers the working women of the ACC Ltd. Wadi, Gulbarga

District (by geography);

3. It considers only those working women having a minimum

qualification of matriculation or above (by qualification);

4. It includes only those working women aged 20 or older (by age);

5. It covers both married and unmarried working women (by marital

status);

6. It includes those working women who hold a post not lower than
Class-III employees (by grade);

Women who are unemployed, housewives, paddy workers, holding

Class-IV jobs, having below matriculation levels of education, and
below 20 years of age are excluded from this study.

Sample Characteristics

The questionnaire was distributed among 125 working women of

ACC Wadi, of which only 100 responded, a response rate of 69.93
percent. Among the respondents, 37 percent were 30-40 years old,
followed by 30 percent from 40 to 50 years, with 22 percent aged
20-30. Only 5 percent of the respondents are aged 50-60, and about 6
percent did not indicate their age. Forty-six percent are
postgraduates, 39 percent are graduates, and 12 percent are

57
matriculates. Only 2 percent of respondents held the highest
academic degree, i.e., PhD, and only 1 percent hold an MPhil degree.
Seventy-six percent are married.

Results

The data from the questionnaires were classified and tabulated. The
tabulated data depict the views of the respondents relating to their
information and use behaviour. The chi square (X^sup 2^) test was
used to determine the differences in frequency variations of
responses and the significance of difference between two
independent groups.

Types of Information Needed

Table 1 indicates the ranking order respondents by their information

needs. The study shows that the majority rank information relating to
childcare first, followed by home management. The results imply a
significant difference in the opinion of respondents.

Main Sources of Information

Books are the prime source of information for more than three-
quarters of respondents (Table 5). On the other hand, about two-
thirds acquire information by discussing with their colleagues/
friends; 58 percent stated that they frequently depend on newspapers;
about half use media reports (television, radio). Two-thirds do not
use commercial databases or information brokers at all to meet their

58
information needs. This could be either due to the non-availability of
commercial database and information brokers locally or lack of
knowledge about this source.

Factors Which Prevent Respondents from Reading

Domestic responsibilities keep 25 percent of respondents from

regular reading, while those responsibilities and children's education
combined keep 23 percent from regular reading (Table 6). On the
other hand, domestic plus work responsibilities, domestic and work
responsibilities plus children's education; and only work
responsibilities keep 12 percent in each category from regular
reading. Only 2 percent of respondents do not read due to lack of
personal interest. Interestingly, only 3 out of 100 working women
reported having no problems at all keeping up their reading habits.

Recommendations

The following suggestions are formulated for developing the reading

habits of working women.

1. Every sector of society, especially industry, should have a library

to develop reading interest among working women.

2. A library should be established at a central place to exclusively

accommodate a collection on and about women with membership
facilities open to women.

3. Every institution/organization to which a library is attached, must

earmark one hour as the library hour to encourage reading habits
among the employees (working women).

59
4. The industrial and local library and other relevant agencies should
conduct meetings on information requirements of working women at
frequent intervals.

5. The municipal authorities should establish a library where a

"reader's profile" (information needs and reading interests of
working women) is recorded as guidance for procuring reading
materials for working women.

6. The reading materials should reach the doorstep of every working

woman through local public library bookmobile services once a
week or at regular intervals, to cultivate a habit of reading among
working women.

Conclusion

Information is a vital resource to creating, maintaining, and

developing a reading society. Reading is an art, and the art of reading
is the art of living with books. Reading not only leads to writing, but
also enriches the mind of a reader and sharpens the intellect.
Libraries can help cultivate good reading habits among their readers.
Working women with good reading habits can face any challenge in
their lives and can successfully tackle any problems they encounter,
at work or at home.

60
 RECOMMENDATIONS

Considering the given problems, their analysis and research on

comparative MIS systems used in the similar kind of industries, our
group is presenting following recommendations for the company.
• IT department of the company should now work towards
integrating the system on a higher level and making the
company Paper-Less Office. This should be done by
integrating the system in a way that the manual intervention be
minimized in the day-to-day process.

61
• The company should also start Web-Based ordering and
selling, so that to be able to catch up with the growing industry.
• As more improvements in MIS would be done, and Web-
support to be also incorporated, it is more than sure that current
Network available is going to crash. To cop this, company
needs to upgrade its network. For this purpose, we suggest the
tie-up of company with some outside contractors like IBM or
CISCO to continuously upgrade and maintain their network.

• With each up gradation, we suggest training to the managers of

the company about effectively using the added functionalities
and use of them in a better way. This can be also done by
providing a handbook along with each up gradation.

62
63
GANTTCHART

64
65
 REFERENCES

Secondary Sources
1. Management Information Systems – A Managerial Perspective, D.P. Goyal
2. www.wikipedia.org
3. www.acclimited.com

66
4. www.tcs.com
S5. www.sap.com

67