Cement and rebar are major material in the construction industry and used for civil foundation of equipment. In case of a Solar PV Project, there is no mass concreting but in the Wind Farm Project, WTG (Wind Turbine Generator) civil foundation need around 450 M3 mass concreting where 200 Ton cement and 50 ton rebar is used. Normally cement is OPC53 grade while rebar is Fe500 grade. Rebar are supplied either as full length or cut-bend following a standard drawing. Earlier there was a practice to buy full length and cut-bend was done at site but now it is not in much practice to avoid additional time of labor at site, quality issues, theft possibilities and waste. No-doubt there is an additional cost for cut-bend material which are transportation and cutting bending charges at factory. Proper coordination with project planning or execution and SCM (Supply Chain Management) team is required for smooth supply avoiding additional inventory cost and cost of material linked with market fluctuations.
Various procurement strategies are used both for cement and rebar which includes spot/index-linked procurement, long-term contracts and hedging etc.. Cement can not be stored for long time at site being its early expiration and also it is supplied immediately within 2-3 days after the purchase order from the customer. Rebar supply takes around 8-9 days in delivery including cutting bending work. Vendors are decided based on their location, quality, reliability and off-course the price. Quantity distribution among L1, L2,L3 suppliers is reviewed accordingly. Make of rebar has no issue means changeable among approved suppliers but in case of cement design-mix or mix-design to be performed and approved before site execution in conjunction with other raw material like aggregate, sand, ad-mixer and water etc.
Cement suppliers are Ultra Tech, JK, Shree Cement, Wonder, Hathi, High-Bond, ACC etc, and rebar are supplied by Tata, JSW, SRJ, Shree Om, Gallant, Ectotherm etc...
Hedging strategy is adopted based on market conditions, price fluctuations and risk tolerance of partners involved. Frequency or interval of purchasing rebar and cement depend on project time line, scale means number of WTG foundation to be done in a specific time and financing planning of the company.
I tried to throw some light on this critical cost component which may sometime ignored. This require proper planning and coordination with contractors, purchase deptt. and site team.
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