Cement, Energy and Environment

--- • development is not matching what is obt<'lined in other developed or developing countries. We do n ot have adequate road maintenance and rehabi litation, or road management. Is there a n eed for a number of road development authorities? Th e National Highway Authority of India is a joke. In fac t, India has no highways and no one has any authority over them. Rather local bodies boss over it. The 35, 000 km of so-called National Highways are just slightly w ider roads that connect towns and villages which get clogged with the chaotic short-dis tance traffic of cycles, bullock-carts, tractors, cars, buses and trucks plying on them. Extreme weather and poor drainage sys tem accelera te the withering process. The skyrocketing road accident rate is alarming indeed. Traffic mishaps account for a majority of accidents or deaths. There is one death every 2.75 minutes caused by road accidents. Courtesy: INDUSTRIAL HERALD, Vol. 37 N0.3 Mar 2002 P- 46. Fax: 044 - 4332413 E-m ail: motorindia@rediffmail.com HANDING IT OVER S tephan Schol tissek and Reiner Burton, Accenturc, Germany Before con sidering ou tsourcing, cement producers need to fully understand what its role is and why it should be on the CEO growth agenda. One answer to this is of com se the more proscriptive approach taken by regulators, which is forcing cement producers to revisit their cost base with ever-increasing vigour. Accenture contends tha t many cemen t producing companies are ge tting to the end of the line in terms of head-count reduction. There is not nmch left to cut, Ci t least no t w ithout endangering s tandards of service and sa fety, so what next? If support functions have been a soft target in terms of taking costs out of the business, cement producers that keep chipping away a t these functions w ithout rethinking the mould are liable to run into problems, which could end up costing money in the long term. So the alternative to pairing everything to the bone and compromisin g performance is to outsource. The key challenge is to identify what is core, and therefore must stay in-house, and what is non-core and can be outsourced to specialists. When addressed in this context, the view must be that nothing should be considered sacred, be it IT, logistics, engineering, operations logistics, engineering, opera tions or finance. Companies should only keep control of that part of their business tha t is compe titively critical in the marketplace and makes them successful. To date, the cement indus try has tended to view finance an d accounting in this category and on this basis has been rel uctant to give up control. H owever, while being a key business support function, finan ce is largely a transactional processing group supporting basic accounting and reporting activities, so it is a very suitable case for outsourcing. If taken to its most beneficial point in the value chain, the company believes that outsource providers could take over 90% of a cement comp an y finance team, w hil e the cement company retains 10% at the top end. The authors believe that the scope for outsourcing among cement producers has not ye t been exploited. Cement companies should