Process Innovation For Better Results

Supply Chain

L&T has a large supply chain network of vendors, contractors, distributors and service providers. Since supply chain is a major cost centre, bringing in functional efficiencies in the area can go a long way in reducing operational expenses. To ensure that this critical area is well-managed, each business is provided with its own procurement and supply chain teams. We aim to source our raw material locally to promote indigenous companies while optimising costs. During FY 2016-17, more than 80% of the Company’s raw material requirements were met by local suppliers.

Environmental & Social Code of Conduct For Suppliers And Capacity Building

L&T’s commitment to environment safety and green practices extend to its supply chain universe too. In line with the Company’s Green Supply Chain Policy, an ‘Environmental & Social Code of Conduct for Suppliers’ was formulated to cover specific clauses on environmental management and compliance, human rights, labour practices, prohibition of child labour, freedom of association and collective bargaining, prohibition of forced and compulsory labour, ethics and transparency, and impact on society. This was applicable during the period 2012-16. Since FY 2016-17, the ‘Environmental & Social Code of Conduct for Suppliers’ has been integrated with the Business Code of Conduct for suppliers. It is mandatory for all new and existing vendors/suppliers to follow the Code. While existing suppliers have been apprised of this combined CoC, new suppliers are introduced to it during the on-boarding process.

Process innovation for better results

Surplus stocks of project sites re-distributed to cut wastage

WET Business – the IT City, Mohali site undertook an initiative to revise the methodology of fixing of manhole covers in slabs. As per the conventional method, slabs were cast in a casting yard and were erected on manholes. The cover fixing was done on the slab at site. This process led to improper bonding between the manhole cover and the slab, which led to the development of cracks. The site revised the method, and now the manhole covers are fixed in the slabs at the time of its casting, which results into a monolithic structure and saves time and cost while delivering proper results.

Turning surplus into savings

Surplus stocks of project sites re-distributed to cut wastage

At Kolkata, L&T’s Metallurgical and Material Handling (MMH) team devised a method of putting surplus materials from project sites nearing completion to good use by transferring them to new projects. The materials covered were steel, tools and tackles, and consumables.

Due to the complexity and involvement of a large quantum of mechanical works, MMH projects involve purchasing a large number of high-value consumables, tools and tackles, and other construction materials for execution. The materials lying at near completion projects can be categorised as:

Surplus Stock: Surplus materials in stores which can be redeployed at other sites.

Used but re-usable stock: The materials are issued, but have a shelf life that is long enough for redeployment at other projects.

Surplus Equals Reusable

The team took stock of the surplus material at the stores. The material list was then circulated in a timely manner, cutting down the need for new procurement. This process is now part of a regular system and online tools in EIP. The online system automatically tags surplus materials in the inventory and tracks the tools.

Initially, 15 project sites were chosen for re-using stock, based on the percentage of work completed. Also, a team of 17 engineers were selected from sites and given an orientation on the process. They travelled across selected sites to assess re-usable material. The material cleared by the team was then sent to new sites for selection.

Result : This initiative helped save Rs. 310 million in the last three years.