JK Cement presses 'change' button, rolls out plan to understand segments

It has rolled out a plan to better understand segments and applications for more innovative products

Cement maker JK Cements is realigning its customer and go-to-market strategy by moving closer to buyers. It has rolled out a group-wide transformation project — “Nirmaan” — to develop in-depth understanding of various segments and applications to be able to come up with innovative products and solutions.

As part of the project, the company has invested heavily in re-training its people in data tools to further improve its market intelligence capabilities. “With project ‘Nirmaan,’ we aim to enhance our customer base through better-managed leads, focused campaigns and best competitive pricing offers,” says Yadupati Singhania, chief managing director, JK Cement Limited.

Accelerating the process of data gathering, the cement maker has equipped its field executives with data connected tablets. Even before an executive approaches a customer, the company executive has access to the buying history and experience of the customer with the brand. Armed with the information, the focus is more on understanding specific requirements of the potential buyer and at the same time executives push to offer value-added and complementary products to the buyer based on her purchasing history. The company claims this “customer first approach” is helping it achieve incremental sales.

Further, with the access to a huge amount of consumer data and their product preference, JK Cement has introduced product price calibration in a few markets.

For example, this year the company has resorted to price correction of some of its products in the southern market, particularly in Bengaluru. Essentially, on a daily basis, executives now record prices on their mobiles, which are then sent to their managers based on which there is a trend analysis. In Bengaluru, the company effectively corrected prices by up to three to four per cent based on inputs provided by field executives under project Nirmaan.
 

Building on its customer first approach, JK Cement has put in place a “credit administration mechanism”. It now maintains an independent credit history for each customer-vendor and extends the line of credit based on their credit worthiness. This is done by an independent credit cell set up by the company. Credit lines are in the range of seven days and go up to 30 days based on a customer’s credit worthiness.

JK Cement has also embarked on a route calibration exercise with a greater focus on backhauling, ensuring the trucks that bring in raw materials into its factory also carry back finished goods into the market. Following project Nirmaan, there is greater coordination between the procurement, production and marketing teams. With complete integration between inbound and outbound logistics, the cement maker is hopeful of improving its bottom line significantly. Also, JK Cement gets 300 to 600 orders per day for every plant. Now, these orders are directed on an automated basis to the vendors that are in the path of the order. The order is then supplied by the vendor who quotes the lowest price and can fulfil it the fastest. This mechanism further helps in saving logistics cost.

JK Cement has rolled out a plan to better understand segments and applications for more innovative products

“We have implemented real-time tracking of vehicles, in-plant logistics and end-to-end movement of vehicle, and geofencing to ascertain that a specific route is followed. In fact, in some of our plants we have managed to reduce turnaround time by up to 40 per cent,” claims Singhania.

Similarly, on the procurement front the company is looking afresh at deriving benefits of economies of scale by pushing for better governance and transparency. It has set up a procurement organisation department to enable key spend management at the central level and sourcing through a category management approach.

In a capital-intensive business, plant maintenance is critical in maintaining an optimum level of production and keeping costs under control. Recognising this, JK Cement has moved away from yearly plant maintenance and linked the entire exercise to real-time sales and logistics plans. That is, plant maintenance is now taken upon real-time basis linked to market inputs on whether the sales are likely to go up in the next three months or slow down. Such an approach is leading to optimal utilisation of the equipment.

According to the India Brand Equity Foundation, India’s cement production is projected to amount to over 400 million metric tons by last year-end, making it the second largest cement producer globally. The leading players in the industry are UltraTech, ACC, Shree Cements, Indian Cements and Ambuja Cement. With a market share of 45 per cent and 0.5 per cent in grey cement, JK Cements claims to be among the top 10 cement players in India.

Reflecting upon challenges that the company faced during project Nirmaan, Singhania points out that transformation requires change which needs to be delicately managed. Transformation is also not a one-time exercise but needs to be integrated into the culture of the organisation. And hence, the company leaders kept communication channels open and encouraged its employees to implement best practices and improvements as part of the project Nirmaan.