BACKGROUND OF THE INVENTION
For procuring and / or importing raw materials through neighboring ports, procurement
division of an industry has to request for vessels through a logistics company. The
logistics company can charter cargo and vessels respectively, at the load ports and send
the raw material, received via wagons to the site. The importing company pays
demurrage if vessels are held up beyond the permissible hours at the discharge ports.
However, if vessels are released within time, company earns what is known as dispatch
earning.
The issues involved in raw material import are raw material vessel demurrage due to
congestion at discharge port which can result in considerable drop in dispatch earnings.
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Also the in-bound supply chain of the importing company occasionally experiences
difficulties in management of import process leading to excess of materials that cannot
be consumed and shortage of some other raw materials that are required in works.
This may also result in high inventory and growing levels of raw material imports.
Too many stake holders in the supply chain may also create problems of co-ordination,
communication and information sharing.
There is no off-the-shelf offer of a system that caters to the total need of a metal
industry like steel to handle the process of raw-material planning and import through
vessels.
There is therefore, a need to reduce the net cost of raw material vessel demurrage by
at least 50% through appropriate enablers for improving the dispatch earnings.
A steel plant in eastern India needs to import annually about 3 Million Tonnes of coal,
0.2 Million Tonnes of SP grade limestone and 0.9 Million Tonnes of CP grade limestone
via ports at Paradeep and Haldia.
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Even the supply chain products like SAP, APO, i2 and ERP, like SAP R3 do not support
the functionality of scheduling of vessels and re-arrangement of vessel schedule on the
fly based on the requirement planning, ground reality, exigencies and accommodating
strategic decisions in controlling inventory level.
SUMMARY OF THE INVENTION
The main object of the present invention is to plan and import raw material via vessels
for the metal industry like steel in India. The system aims to improve raw material
availability, control inventory level in the supply chain and eliminate or minimize net
cost of vessels demurrage due to congestion at ports through planning. The system
generates and adjusts the plan of raw material import and vessel schedule continuously
on the time horizon based on the business triggers reflecting the ground reality and
strategy of the company - a significant shift in the traditional model of raw material
import through planning and scheduling dynamically.
The present system is enabler for the continual improvement in raw material planning
and import for the company. It has potential to offer competitive edge and advantage
to the company in the long run through the revamped and refined raw material
planning and import through vessels. With the implementation the company can aim to
control and improve its in-bound supply chain KPIs like raw material availability and
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inventory turn, eliminate or reduce net cost of vessel demurrage due to congestion at
ports through the enablers. It has promise to bring huge savings through freeing
working capital locked in the inventory and avoiding cash outflow through vessel
demurrage which is paid in USD.
Thus the present invention provides a system for planning and import of raw materials
for a metal industry, for example, a steel plant, said system comprising: a subsystem
for planning stock of raw materials for a given duration based on physical ground stock,
consumption plan, safety stock (buffer) and expected receipt of replenishment; a
subsystem for automatically triggering raising of indents for nomination of vessel for
raw materials based on said planned stock and safety stock; a subsystem for
synchronizing the sailing of vessels with respect to arrival at discharge port, showing
transit of said vessels on high sea and for monitoring the expected time of arrival (ETA)
with the objective of minimizing the congestion of vessels at port, said subsystem of
synchronizing is configured for ensuring unloading of vessels on arrival, discharging the
same after completion of customs and other duties at the discharge ports, and for
starting as soon as possible to transfer the received raw materials to works from the
discharged ports; and a GUI based user-friendly screen for providing graphs, on-line
customized reports, etc., for decision making, thereby eliminating or minimizing the raw
material vessels demurrage.
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Monitoring the transit of vessels on high sea and its expected time of arrival (ETA) can
be accomplished with the help of a global positioning system (GPS) installed in the
synchronizing subsystem.
BRIEF DESCRIPTION OF THE ACCOMPANYING DRAWINGS
The invention can now be described in detail with the help of the figures of the
accompanying drawings in which:
Figure 1 shows the supply chain of raw material import for a
steel plant in eastern Indian.
Figure 2 shows the CTQ characteristics of raw material procurement
and information thereon.
Figures 3 to 9 show the process study of raw materials procurement.
Figure 10 shows process drill down of raw material procurement.
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Figure 11 shows problem identification in raw material procurement.
Figures 12 and 13 show cause and effect analysis.
Figure 14 shows processes and stake holders in
raw material procurement.
Figures 15 to 23 show raw material availability and its
management through planning.
Figure 24 shows KPI movement of raw material procurement.
Figure 25 shows savings effective by conversions of
vessels for raw materials procurement
DETAIL DESCRIPTION
Major innovations which have gone in design of the present system are reflected in its
salient ability to address root causes of the problems associated with raw materials
import. These are detailed below:
Given the physical ground stock at disposal, a subsystem of the present invention
comprises planning stock of raw materials in future for any given duration based on the
consumption plan, safety stock (buffer) and the expected receipt on point of
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replenishment. The system keeps on adjusting the plan for any changes whatsoever in
planned consumption, buffer or the expected receipt at point of replenishment. ~aw
material stock scenario in the future helps planning the storage at works and discharge
ports. It also helps in controlling the inventory in the supply chain based on the buffer.
The system further comprises a subsystem for triggering raising of indents for vessels in
future for raw material based on the planned stock and safety stock (buffer)
automatically. The system subsequently adjusts the indents dynamically for any
changes whatsoever in planned stock or buffer. The functionality of a further
subsystem of the present invention is to synchronize the arrival of vessels with
consumption of raw material at works and keeping the stock always above the buffer.
Further it ensures unloading of vessels on arrival, and that transferring of raw material
to works from discharge port starts as soon as vessel is unloaded and discharged with
clearance of customs and other duties at the discharge ports and at the same time
prevents or reduce "feasting and fasting" with respect to stock.
The system of present invention offers functionality of release of indents for nomination
of vessel. The functionality attempts to synchronize the sailing of vessels with respect
to arrival at discharge port. Indent is released for nomination of vessels considering the
planned arrival of all other vessels holistically with the objective of minimizing the
congestion of the company's own vessels. Indents under release are preponed or
postponed or cancelled as appropriate based on the system alerts. The formal process
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of release of vessel indent through the system strengthens co-ordination amongst
several stakeholders and synchronizes the availability of cargo and vessel at the load
port.
Tables 1 and 2 show prioritization of Xs - Control Impact Analysis.
Control/Impact High Impact Medium Impact Low Impact
Out of Control • Limited Berths • Congestion at Load Port • Lead time difference
• 10 days laycan which is difficult to between load and
• Increase in number predict or anticipate 2-3 discharge ports
of raw material months in advance • CNFvessels NOT
vessels • Too many suppliers and nominated by TMILL
• Change in laycan grades of coals / TS-Resource
due to emergency • Suppliers using public • Draft at Haldia, High
for non-availability ports / Low tide etc
of cargo or vessels • Poor vessel performance • Vessel cranes /
• Congestion at Load in loading especially hooks do not
Ports Panamax function or
• Cargo NOT ready at • Limited number of vessel unloading rate lower
load port (Rare) owners than agreed upon
• Non-availability of • Little fleXibility of vessel rate
vessels at desired types • Over size raw
date range • Export vessels take long material slows down
• Mismatch between time to get loaded unloading and
availability of cargo • Poor vessel performance clearance at
and vessels in discharge especially discharge ports
• Steady & substantial Panamax • Failure of unloading
increase of import • Change in RM facilities in the works
and export requirement at works • Works NOT taking
• Paradip port does • Unavailability of more rakes from
not offer any ousting additional rail-bound plots Pradip when
priority at ports available
• Haldia Port's ousting • Availability of
priority does not DEMANDEDEMPTY
include all RM e.g., rakes at Paradip
non-coking coal and
limestone
Table-l
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Control/Impact High Impact Medium Impact Low ImpactCan be 1. Nomination 6. Vessels arrival NOT 8. Congestion at steel
Controlled without in sync with works (BOXN / BOX
considering arrival consumption wagons from Collieries,
pattern of other (Transfer of RM from Ports, Domestic
vessels discharge port does sources)
not start as soon as
2. Accept possible vessel is unloaded /
congestion at ports discharged)
without action
7. Vessel is nominated
3. Increased Import based on the ship
using only Paradip schedule without any
as discharge port consideration of
future stock scenario
4. Std deviation of and requirement at
interval between works
vessels is high
5. Vessels with more
than one RM
results in poor
discharge rate
Table-2
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Details of performance enablers for raw material procurement are shown in Tables 3 and 4
Solution Means Enablers IT Enablers
Preventive: NEW business process All vessels to be indented System for indenting
Avoid / reduce of release of vessel and released after checking and release of vessel
congestion of indents and elimination for overlaps with on-line ALERTS
vessels at ports of indents indicating overlap of
indents - Gantt chart
on the time
Adjust expected Pre-pone or postpone System offering
delivery i.e. laycan of delivery, change of dates in provision for change of
vessels indents of vessels to the dates during release of
extent possible dates in case of
overlaps
Cancel one or more Cancel delivery altogether System offering
overlapping or clashing without sacrificing on RM provision of rejection
indent(s) availability of indent till loading of
vessels as the situation
demands
Table-3
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Solution Means Business Enablers IT Enablers
Corrective: Pro- Monitor all RM loaded TMILL to undertake Online system display
active actions vessels on high sea possible pro-active actions of position and ETA of
for congestion in case of congestion before vessels on high sea
at ports arrival of vessels approaching discharge
ports, On line ALERT
for congestion of
vessels at load and
discharge port based
on laycan
Table-4
The system of the present invention has provision of handling vessel campaign against a
released indent from nomination of vessels to loading at load port, sailing on high sea,
unloading at discharge port. It captures data from the different stakeholders both inside the
organization like coke-sinter-iron making, strategic sourcing, raw material procurement, raw
material handling and the partner organization like TM International Logistics Limited and tracks
the movement of vessels in the circuit.
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The system shows vessels in transit on high sea along with ETA i.e. expected time of arrival at
the discharge port. It has provision to capture exact position of vessels in terms of latitude and
longitude. Knowing the position of vessels gives opportunity to take corrective measures in case
of imminent congestion and helps planning unloading and clearance of cargo and vessels in all
cases at the discharge port.
The system of the present invention oversees raw material planning and import for the
company. It provides various online MIS with graphics on business KPIs and key data,
dashboards and reports to facilitate decision making.
The system automatically sends e-mail ALERTS to users indicating business activities and
scenario. Concerned users come to know about business events, position and scenario across
in-bound supply chain.
The system of the present invention introduces continuous and dynamic planning of raw
material and scheduling of vessels based on the triggers and key decisions driven by physical
reality, market and strategy to ensure raw material availability, control inventory level in the
supply chain and eliminate or minimize net cost of vessel demurrage due to congestion or
bunching at discharge port.
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'.'
Implementing the system institutionalize re-engineered and refined processes to achieve the
best results in import of raw materials based on outcome of 6-sigma green belt project on
improvement of raw material planning and import management.
The system of present invention if hooked with global positioning system (GPS) or websites of
ports can display all the vessels irrespective of company approaching a discharge port predicting
possible congestion. It may open up possibility of re-routing vessel to alternate discharge port
while still on high sea. For example, Paradip-bound vessel can go to Vizag if there is congestion
at Paradip. However it depends on contract with vessels owners, likely vessel demurrage and
additional freight associated with bringing raw material from a distant discharge port.
Graphic user interface (GUI) based user-friendly screens, graphs, on-line customized reports and
dashboard help decision making.
The open system of the present invention can be interfaced with supply chain solutions like i2
and SAP,APO and ERP, like SAP R3.
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Learning, further way forward and future potential of the present invention are given below:
Learning:
• Governance of shifting from legacy to new system
• Change management
• Ownership
• Implementation related issues
• Vessel rerouting strategy - system cost model based approach
• Pull based replenishment in place of push based replenishment
• Adequacy of materials - need for sufficiently check
• Updation of consumption data
• Product conceptualization and design
• Lack of integration of material, information and financial flows
• Necessity and sufficiency check of system enablers
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Benefit Realization - Using RAMP
• Monitor and control raw material availability, inventory turn and vessel demurrage
• Improve reliable replenishment time
System Enhancement - Building on RAMP
• On-line decision support - Scenario-building, simulation, optimization
√ GPSbased tracking of vessels in circuit
√ Logistics cost model for in-bound supply chain
√ Prediction of congestion of vessels at ports using publicly available information in
websites of port authorities
√ Advanced planning system for group to optimize vessel load and route for leastcost
logistics solution
Horizontal Deployment - Leveraging RAMP
• Derive synergistic value across Tata Steel Group
Providing common IT architecture and system to
√ Design optimized supply chain at the group level
√ Deploy common processes and practices across geographies
√ Improve availability (delivery performance), control inventory (inventory turn),
reduce supply chain costs
√ Ease of maintenance and enhancements with time
√ Promote and leverage knowledge, learning and sharing
WE CLAIM
1. A system for planning and import of raw materials for a metal industry, for example,
a steel plant, said system comprising:
- a subsystem for planning stock of raw materials for a given duration based on
physical ground stock, consumption plan, safety stock (buffer) and expected receipt
of replenishment;
- a subsystem for automatically triggering raising of indents for nomination of vessel
for raw materials based on said planned stock and safety stock;
- a subsystem for synchronizing the sailing of vessels with respect to arrival at
discharge port, showing transit of said vessels on high sea and for monitoring the
expected time of arrival (ETA) with the objective of minimizing the congestion of
vessels at port, said subsystem of synchronizing is configured for ensuring unloading
of vessels on arrival, discharging the same after completion of customs and other
duties at the discharge ports, and for starting as soon as possible to transfer the
received raw materials to works from the discharged ports; and
- a GUI based user-friendly screen for providing graphs, on-line customized reports,
etc., for decision making, thereby eliminating or minimizing the raw material vessels
demurrage.
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2. The system as claimed in claim 1, wherein said indent triggering subsystem is
configured to adjusting the indents dynamically for any changes in the planned
consumption, buffer or the expected receipt at point of replenishment.
3. The system as claimed in claim 1, wherein said synchronizing subsystem is provided
with a global positioning system (GPS) for showing transit of vessels on high ·sea
and for monitoring the ETA with the object of minimizing congestion of vessels at
port.
4. The system as claimed in claim 3, wherein based of information on possible
congestion at the discharge port, vessels bound for one port may be rerouted to an
alternative discharge port.
5. A system for planning and import of raw materials for a metal industry, for
example, a steel plant, substantially as herein described and illustrated in the
figures of the accompanying drawings.