Gujarat Ambuja - Redefining Operational Efficiency

            

Details


Themes: Operational Restructuring
Period : 1993 - 2002
Organization : Gujarat Ambuja (GACL)
Pub Date : 2005
Countries : India
Industry : Cement

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Case Code : OPER009
Case Length : 12 Pages
Price: Rs. 300;



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The Future Contd...

Because of these marketing initiatives, GACL was able to maintain its market share in Gujarat, even while commanding a high price. The company posted an increase in sales in the highly competitive and complex Mumbai market even as demand growth slowed down and prices declined. Similarly, this focus on marketing led to an 8% increase in sales in the northern region during 1999-00. GACL continued to seek ways to reduce costs. It planned to use a captive thermal (coal-based) power plant to meet the power requirements of its Chandrapur plant. As the power plant was close to coal mines, the company expected the variable cost of power to be significantly lower.

Refuting the claims that the company's drive for achieving operational excellence was totally market-driven, Singhvi said, "We eat, live and breathe cement and we are completely focused on the business. We try and bring in global best practices into a commodity business. This obsession is important for survival."

Questions for Discussion

1. Study the evolution of GACL from a small start-up to a cement major over the years. How far do you think the company's success can be attributed to its project location, design and implementation decisions?

2. 'GACL's cost management focus was the biggest factor responsible for its success.' Critically comment on the above statement and examine the company's approach to cost reduction and productivity enhancement. How did this approach help it gain a competitive advantage and emerge a leader in the commoditised industry?

3. Do you think that GACL's efforts were more driven by market compulsions than a strategic cost focus? Will GACL be able to sustain its superior performance in the years to come? Give reasons to support your stand.

Exhibits

Exhibit I: GACL - State Wise Plant Capacity
Exhibit II: GACL - Profit & Loss Statements
Exhibit III: Various Awards Won by GACL