Chief Financial Officer
Cementing huge ROI
Jaypee Group gets better margins through improved logistics
The executive team at Jaypee Group investigated ways to improve margins and profitability related to cement production and sales. The cement line of business contributes a significant portion of revenue to the group's overall performance and, with costs such as fuel on the rise, the company turned to SAS® to help optimize its transportation logistics and improve its bottom line.
Jaypee Group is one of India's leading infrastructure industry organizations, with a diverse portfolio of businesses, including engineering and construction, cement, private hydropower, hospitality, real-estate development and highways. It has revenues of US$1 billion. Jaiprakash Associates Limited – the flagship company of Jaypee Group – is the third largest cement producer in the country, operating modern process-control plants, with an aggregate capacity of nearly 20 million tons per year.
Now, faster than ever, we can determine the best combinations of mode and route to ship our products. The net ROI is huge – it's automated decision making in real time.
A route to better logistics
The company chose SAS/OR® to manage a complex shipping matrix that involves shipping product to major markets, from plants across the country, using various modes of transportation. SAS/OR provides a powerful array of optimization, project scheduling and simulation techniques to identify alternative actions and scenarios to better allocate routes and resources and optimize transportation logistics.
"SAS/OR allows us to incorporate a multitude of variables into our analysis," says R.B. Singh, CFO, Jaypee Cement. "Now, faster than ever, we can determine the best combinations of mode and route to ship our products. The net ROI is huge – it's automated decision making in real time."
SAS also provides the executive team with a dashboard to monitor key indicators related to margins and profitability at an enterprise level.
"SAS gives us tremendous visibility into our transportation costs and enables us to analyze and segregate profitable routes from nonprofitable ones," Singh says. "A key result was an optimized plan to ferry our products from our plants and warehouses to the major consumer markets, thereby contributing significant cost savings to the company."
To counter rising transportation and fuel costs, Jaypee Group needed to optimize its logistics to improve margins and profitability of its cement business.
- Reduced transport costs.
- Increased profitability.
- Gained quicker analysis, segmentation of profitable vs. non-profitable routes.
- Enhanced speed, reliability of decision support.