KEY FUNCTIONS OPERATIONING PROCESSES

Manufacturing, sell and distribute

Twiga ordinary Twiga extra

Procurement Imports raw-materials,

machinery, spare parts and consumables from Scancem International DA.

Manufacture Process limestone into

cementAdvertising and marketinguse of advertising tools such

as resting stands at bus

station; the media example radio, TV stations;

Corporate citizenship, helping schools, orphanages to secure decent buildings through the provision of cement and construction as aids.

OPERATING PROCESSOCESSES

SalesBoost by continuing to

support development in the sub-regional markets

through the appointment of more distributors (35 distributors), Twiga Cement

products are now available to customers across the country. With

an increased professional use of cement and concrete, TPCC has

also implemented enhanced customer services in all regions of Tanzania and beyond borders focusing on the ease of delivery (bag, jumbo bags or bulk) and technical support to its customers.

twiga cement annual report 2010/11

SWOT ANALYSIS

Strength Management and corporate culture Organizational setup Work market leadership Strong regional position Vertical integration as a key factorWeakness Poor infrastructure Weak legal system and corruption

Opportunity Formation of regional integration Open up ubungo siteThreat Environmental issues-pollution High production cost-leads to high prices Health policyPorters 5 forces Intensity of existing rivals-Tanga and Mbeya

cement Threat of new entry-shortage leads to ask support

from Brazill

Threat of new substitute-clay blocks from south Africa.

Buyer bargaining power-complains they need low price

Supplier bargaining power-low availability of raw material

Industrial dynamics refers to the study of the means and processes through which industries change over time, through their own processes of evolution

Dynamics to which cement industry facesIn East Africa setting1. New entry of other cement company such

as Simba cement, Mbeya cement e.t.c.2. Rise in demand with the expansion of

market3. Change in construction technology

Dynamics from 2006 - 2011

The increase in bargaining power of suppliers

Substitute products (Clay blocks) Investment Conserving of environment strategies

employed. Profitability

Supply Chain drivers and Metrics

Facility Twiga cement has arranged well their facilities at Wazo Hill (Dar es salaam) which

make them efficient & responsive. their capacity is increasing approaching to 1.15 tones mil per year. Inventory Use of average inventory to satisfy the customer needs and also they safety

inventoy in case demand exceed the average inventory. Transportation They use agents, outsource like V.G.K trans of Valence Msaky Information Use of day to day or weekly report from marketing department to meet customer

needs Use of push or pull factors Sourcing Use both in house like Tankers and outsourcing like SPUTNIK Pricing Twiga cement has priced their cement according to their package such as 50kg,

150kg and 1500kg. Also they price according to quality such that they have two product of different quality includes Odinal and extra cements.

Financial savings One of the biggest reasons organizations outsources non-core business

functions is cost savings. Growth in revenue through economies of scale, Maintain higher profitability

Strategic focus Since employers cannot pursue excellence in all areas, many will focus on

core competencies, reducing administrative task Acquiring advanced technology Material handling and storage, Communication among employees and

outside firms through emails, Technology also enables a company to reduce transaction time.

Specialized expertise Another rationale of outsourcing is hiring specific expertise. For example, Reduce risk and liabilities.Improvement-driven reasons Improve operating performance from acquiring expertise, skills, and

technologies that would not otherwise be available in the company.

 

Companies outsource to solve a specific problem, improve performance, or

achieve any other goal fitting their needs. At the same time, company

would outsource logistics functions as it is important to their strategic

execution.

Outsourcing Relationship

This means nature and number of outsourced activities as well as length of

outsourcing agreements as necessary features in formal relationships

between a firm and its 3PLs providers.

Types of outsourcing activities

Twiga cement has various outsourcing services such as identified transport

and shipment, warehousing and inventory control, Information system

related, and value added service.

Communication barrier

One more considerable obstacle is the language gap. Because of this

challenge, not many nations are eligible for outsourcing.

Poor Infrastructure

One more outsourcing barrier is a nation's current infrastructure. This

involves the legal system, banking system infrastructure, Poor road condition

and poor telecommunications infrastructure that coordinates everything. .

Issue of confidentiality.

There are many factors service providers don't, or can't, foresee. These

invisibles both manual and automated are nearly impossible to identify.

Outsourcing providers build in a lack of transparency

Some may try to hide their overall margins to give themselves more

profitability over the life of the contract.

MARKET SHARE

TPCC share price increased by 15% in the year 2011: opening at TZS 1,800 per share and closing at TZS 2,080 per share. The market capitalization at the end of 2011 was thus TZS 374 billion; up 15% from the year before. The number of shareholders at the end of the year stood at about 9,700 compared to around 10,400 one year earlier.

FINANCIALLY

According to the annual budget The Company recorded an increase in sales volume of 2%

from 2010 to 2011. The turnover amounted to TZS 217.26 billion, an increase of about 9% compared to 2010. (2010: TZS 199.60 billion). The Company made a total operating profit of TZS 72.8 billion compared to TZS 75.9 billion in 2010, a decrease of 4%.

Profit before taxation increased from TZS 71.9 billion in 2010 to TZS 72.8 billion in 2011. After the effect of income tax of TZS 22.2 billion (TZS 21.7 billion in 2010), the net profit after taxation came to TZS 50.6 billion (TZS 50.2 billion in 2010). Total comprehensive income amounted to TZS 50.8 billion (TZS 50.2 billion in 2010).

Continue financial

Moreover, TPCC is clearly doing better in financial terms regarding 2010 and 2011 due to an incremental increases in revenue and profit though the costs of sale has increased

Time 2011 (TZS ’000) 2010 (TZS ’000)

Revenue 217,258,974 199,600,699

Cost of sales (117,210,962) (97,773,581)

Profit for the year 50,605,262 50,205,052

Supply Chain and Logistics Management

SC drivers and Metrics The company is doing better in the supply

chain drivers and metrics. Cost reduction in production Outsourcing to focus on one activity of

production Customer services

Contributing factors for better performance

Expansion of market Availability of raw material (Limestone

and a 'cement rock’). The experience of the company in the

industry

The following is the key contributing factors if the company is performing well :-

•Market share,A percentage of total sales volume in a market captured by a brand,product ,or companyThe company become the market leader in cement industry in Tanzania in terms of market share,twiga has increase of 0.4 percent, inorder to expand they are market position they have sold non core activities in their respective countries in the longterm.

•Financially, •Most of logistics processes have cost and profit implications involving inflows and outlays of finances to the whole system.The company is selling more since in Tanzania Twiga potland cement is increase is selling hence profitability to the company that will lead to company performing well .

•Supply Chain and Logistics Management,A supply chain includes all the activities, functions and facilities involved (either directly or indirectly) in the flow and transformation of goods and services from the material stage to the end-user. The company have many deport for distribution of their product and use their own truck for transportation of their product to the end user.They have different number of deport for supply of their product such as ubungo deport which lead to efficient and first growing of their company,reducing cost of operation,increase customer satisfaction and effectiveness and efficiency and effectiveness of company transformation process.

The following are the barricades if the performance is poor :-

•Competition,

The company compete interms of price,promotion,product but there other company

likembeacement,tangacement,whichcompete with twigacement.

•Customer Service,levels tailored to each customer Inventory Visibility, demand visibility and Pull systems,Real-time two way information flows,Supply chain relationships - Collaborative planning and Shared risks and rewards

Yes there are (SC drivers etc) that need to be

changed to achieve a superior performance in the

company operations? The following are the

changes?

•Pricing,

•Transportation,

•Sourcing,

•Set of business processes involved in purchasing goods and services in a supply chain.

Group members

Amelia Mbega Julieth Kileo Imaculator Nditi Gloria Kimotui Deus Nyenza Godwin Sanasio Edward J Mwamtambulo