Presentation On KPMG

Polycab
Setting up the End to End

Supply Chain
20th Dec, 2014
Contents
Overview of Polycab
Cable and Wire Business
Processes at Polycab
Challenges in Supply Chain
2013 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
Contents
Overview of Polycab
Overview of Polycab
40 year old young organization
Created by four enterprising brothers from the Jaisinghani family

(Girdhari Jaisinghani, Inder T. Jaisinghani, Ramesh T. Jaisinghani and
Ajay T. Jaisinghani)
Began their journey from a small 200 sq. ft. retail electrical store and
then created an empire through forward and backward integration
1968: Commenced sales of Cables in Mumbai
1972: Set up a 1000 sq. ft. factory in Sewree in Mumbai
1984: Set up a larger plant at Halol, Gujarat
1993: Started PVC Compound Manufacturing unit in Daman
2013: With a sales turnover of Rs. 4300 crore and a Market share of
22%, Polycab is Indias No. 1 Cables & Wires Manufacturer
Pan India Presence
Growth Trend
Contents
Overview of Polycab
Market Breakup
Indian Cable & Wire industry is estimated to be around Rs. 22,000

Crores
Total number of manufacturers is estimated to be 1500
65% of the market is in the organized sector

Overview of Cables and Wires
Wires & Cables consist of a metallic conductor over which a

polymeric coating is given to protect the same
All electric cables consist of three essential points:

The conductor for transmitting electrical power
The insulation, an electrical insulating medium, needed to insulate
the conductor from direct contact with the earth or other objects
External protection against mechanical damage, chemical or fire to
the cable
Classification of Cables
Extra High Voltage Cable of 110 KV and above rating for Power
Transmission
High Voltage Cable of 66 KV rating for Power Transmission
Medium Voltage Cable of 11 KV to 33 KV rating for Power

distributions
Low voltage power cable of 650 V/1100 V for Power distribution
House wiring cables
Flexible wires and cables
Cables and Wires
Overview of Cable and Wire Market Segment
Cable and Wire Ecosystem
Cable and Wire Industry Value Chain
Cable and Wire Industry Drivers
Strategic Imperatives for Cable and Wire Industry
Global Business Trends
Consolidation in Cable and Wire industry continues, with growing

number of global companies
New competitive pressure in Cable and Wire industries comes from

low cost entrants through European Union eastward expansion, China
and India
Innovative products
opportunity
Growth of infrastructure development in developing countries is

pushing demand for cable and wire products
Saturation of both capacity and demand in USA and Europe
and
customer
specific
products
seen
as
Contents
Overview of Polycab
18
Manufacturing
Manufacturing of wires & cables consist of number of procedure

stages which are:
1. Heavy Wire Drawing

2. Medium Wire Drawing
3. Fine Wire Drawing
4. Bunching
5. Twisting
6. Insulation coating
7. Stranding
8. Jacket Coating
Manufacturing
Manufacturing
Polycab has State-of-the-art plants spread across 250 acres

comprising of 18 manufacturing units at Daman & Halol. The key
highlights are:
Manufactures more than 15,000 km of cables and 125,000 km of
wires every month
Annual consumption of 50000 MT of Copper and 60000 MT of
Aluminum annually
State of the Art Manufacturing Equipments including 5 CCV Lines
Polycab Group Companies
Make to Stock and Make to Order
Manufacturing lead time of cables is approximately 4 weeks while

that of wire is 2 weeks
The nature of the business is such that 85% of the business is Make
to Stock (Fast Moving Items) while the balance is Make to Order
There are no set rules to classify an item as Make to Stock or Make to

Order. A Make to Stock item may be termed as Make to Order when
the customer provides some specification
Wires and Cables are typically wound on a drum and sold to the
customer inclusive of drum. For example, a 5 km cable may be sold
as 1 drum x 2 km, 2 drums x 1 km, 2 drums x 500 m. This is known
as drum schedule
Demand Flow Process
Business Process Framework for Make to Stock Items
Business Process Framework for Make to Order Items
Drum Selection
Drum Type- Wooden, MS
Cable Outer Diameter
Cable Length
Cable Weight
Drum Carrying capacity
Bending radius
Drum Carrying Capacity > Cable Weight
Max Allowed Length = (((f^2- b^2)* 10.5)* t)/ (OD^2)> Drum Length
Where f=flange, b=barrel, t= traverse, OD = outer Diameter
Procurement
Pricing
Inventory Management
Contents
Overview of Polycab
31
Challenges
Length based planning (Visibility of each length along with drum)
Non-Standard Length (Due to production errors, non-standard lengths

are produced. These need to be marked as Non-Standard Length and
inventory visibility should be available so that they can be sold to the
customer)
How much Copper and Aluminium should be stored based on the

fluctuating London Metal Exchange (LME) prices?
Traceability from Sales Order to Work Order to Raw Material
Stock allocation and drum cutting (If there is an order of 300m and
there is a drum available for 500m, whether it should be cut and the
balance 200m will be wasted as customer will not order such rest
lengths)
How much of forward and backward integration is feasible? (Fans,

lights, switches)
The lead time of wires is quite high and hence how much stock needs
to be kept for supply chain resilience
Challenges
Identification of Fast Moving Items
Safety Stock Calculation
Forecast
Stocking and Pricing Strategy
Visibility of Customer Order in shop floor (Stage of Work Order)
For further information on any aspect of this document

please contact:
Sandeep Chatterjee
Associate Director
KPMG Advisory Services Private Limited
T: +91 90524 41916
E: sandeepchatterjee@kpmg.com

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Polycab

Setting up the End to End

20th Dec, 2014

40 year old young organization

Created by four enterprising brothers from the Jaisinghani family

1968: Commenced sales of Cables in Mumbai

1972: Set up a 1000 sq. ft. factory in Sewree in Mumbai

1984: Set up a larger plant at Halol, Gujarat

1993: Started PVC Compound Manufacturing unit in Daman

Pan India Presence

Indian Cable & Wire industry is estimated to be around Rs. 22,000

Total number of manufacturers is estimated to be 1500

65% of the market is in the organized sector

Overview of Cables and Wires

Wires & Cables consist of a metallic conductor over which a

All electric cables consist of three essential points:

External protection against mechanical damage, chemical or fire to

High Voltage Cable of 66 KV rating for Power Transmission

Medium Voltage Cable of 11 KV to 33 KV rating for Power

Low voltage power cable of 650 V/1100 V for Power distribution

House wiring cables

Flexible wires and cables

Cables and Wires

Overview of Cable and Wire Market Segment

Cable and Wire Ecosystem

Cable and Wire Industry Value Chain

Cable and Wire Industry Drivers

Strategic Imperatives for Cable and Wire Industry

Global Business Trends

Consolidation in Cable and Wire industry continues, with growing

New competitive pressure in Cable and Wire industries comes from

Growth of infrastructure development in developing countries is

Saturation of both capacity and demand in USA and Europe

Manufacturing of wires & cables consist of number of procedure

1. Heavy Wire Drawing

Polycab has State-of-the-art plants spread across 250 acres

Manufactures more than 15,000 km of cables and 125,000 km of

wires every month

Annual consumption of 50000 MT of Copper and 60000 MT of

State of the Art Manufacturing Equipments including 5 CCV Lines

Polycab Group Companies

Make to Stock and Make to Order

Manufacturing lead time of cables is approximately 4 weeks while

There are no set rules to classify an item as Make to Stock or Make to

Demand Flow Process

Business Process Framework for Make to Stock Items

Business Process Framework for Make to Order Items

Drum Type- Wooden, MS

Cable Outer Diameter

Drum Carrying capacity

Drum Carrying Capacity > Cable Weight

Where f=flange, b=barrel, t= traverse, OD = outer Diameter

Length based planning (Visibility of each length along with drum)

Non-Standard Length (Due to production errors, non-standard lengths

How much Copper and Aluminium should be stored based on the

Traceability from Sales Order to Work Order to Raw Material

How much of forward and backward integration is feasible? (Fans,

Identification of Fast Moving Items

Safety Stock Calculation

Stocking and Pricing Strategy

Visibility of Customer Order in shop floor (Stage of Work Order)

For further information on any aspect of this document

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