SUPPLY CHAIN OF CRESCENT STEEL & ALLIED PRDUCTS

What is Supply Chain?

Supply chain is a network between a company and its suppliers to produce and
distribute a specific product to the final buyer. This network includes different
activities, people, entities, information, and resources.
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INTRODUCTION

Crescent Steel and Allied Products Limited is a conglomerate corporation listed on

the Pakistan Stock Exchange as ‘CSAP’. Starting operations with a pipe
manufacturing facility in March 1987, Crescent Steel now has diversified
businesses in four defined sectors – engineering, textiles, capital markets and
power – spread over six campuses.

The Company’s Steel segment manufactures large diameter spiral submerged arc
welded steel line pipes and a pipe coating facility capable of applying multi and
single layer, high density polyethylene internal and external coatings. Both units
are located at Nooriabad. The Steel segment also operates an engineering unit,
capable of fabricating and erecting reliable machinery at par with international
standards. The unit is located in Faisalabad and caters primarily to the sugar,
cement, paper and dairy industries.

CSAPL maintains high quality norms in all its products, striving for excellence in
product quality across all product lines and will continue to remain at the cutting
edge of management practices technology, quality control and quality assurance.

CSAPL is an equal opportunity employer with a strong sense of social

responsibility and passionately supports education, healthcare and environmental
causes.

CORE VALUES

Our core values represent who we are and define how we work together to achieve
success.
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 Being ethically unyielding and honest in the way we carry on business
even when nobody is looking.
 Ownership is acting with stewardship to build a better, stronger and
more dynamic organization.
 Knowing our customers, anticipating their needs, and being
responsive to deliver the best value internally and externally.
 We foster collaboration, innovation and creativity and have a passion
for challenges – as individuals and as teams.
 Making a positive difference in the lives of the people we work with
and in the communities we operate in through impact investments.

CERTIFICATIONS

Crescent Steel and Allied Products Limited has received various certificates for
excellence in quality and its practices and continuously aspire to further improve
the quality of our products.

GROUP OF COMPANIES

 Cotton
 Energy
 Investment and infrastructure development
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 Steel

STEEL

The company began commercial production of steel line pipes in March 1987,
enhancing product suite to add flow efficient and anti-corrosion/protective pipeline
coating in 1993 and has since contributed significantly to Pakistan’s oil and gas
networks.

The Company’s Steel business comprises of a pipe manufacturing plant, pipe

coating facility and an engineering unit providing machinery fabrication. CSAPL is
the industry leader for steel pipe manufacturing and pipeline coatings in Pakistan,
with the capacity to produce up to 200,000 tons of large diameter spiral arc welded
carbon steel pipes and the capability of applying protective and flow efficient
pipeline coatings.

The pipe manufacturing and coating facilities are located approximately 120km
from Karachi Port in Nooriabad, Sindh while the engineering unit is located in
Faisalabad, Punjab.

STEEL PRODUCTS

 MACHINERY FABRICATION.
 STEEL LINE PIPE.
 STEEL TUBULAR PILES.
 STEEL COIL SLITTING LINE.
 UNIVERSAL HARDNESS TESTING MACHINE.
 CHEMICAL ANALYSIS MACHINE.

PROCUREMENT
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Procurement involves buying the goods and services that enable an organization to
operate. They may be responsible for sourcing raw materials from suppliers
worldwide and bringing them into the organization to enable the production of
goods for customers. A company can spend more than two thirds of its revenue on
buying goods and services, so even a modest reduction in purchasing costs can
have a significant effect on profit.

Following are the steps technique which crescent procurement management

performs to successfully achieve its goals.

Step 1: Need Recognition

Crescent knows it needs of a product, whether from internal or external sources.

The product may be one that needs to be reordered, or it may be a new item for the
company.

Step 2: Specific Need

 SUPPLY CHAIN OF CRESCENT STEEL & ALLIED PRDUCTS
The right product is critical for the company. Some industries have standards to
help determine specifications. Part numbers help identify these for some
businesses. Other industries have no point of reference. The company may have
ordered the product in the past. If not, then the business must specify the necessary
product by using identifiers such as color or weight.

Step 3: Source Options

The business needs to determine where to obtain the product. The company might
have an approved vendor list. If not, the business will need to search for a supplier
using purchase orders or research a variety of other sources such as magazines, the
Internet or sales representatives. The company will qualify the suppliers to
determine the best product for the business.

Step 4: Price and Terms

The business will investigate all relevant information to determine the best price
and terms for the product. This will depend on if the company needs commodities
(readily available products) or specialized materials. Usually the business will look
into three suppliers before it makes a final decision.

Step 5: Purchase Order

The purchase order is used to buy materials between a buyer and seller. It
specifically defines the price, specifications and terms and conditions of the
product or service and any additional obligations.

Step 6: Delivery
 SUPPLY CHAIN OF CRESCENT STEEL & ALLIED PRDUCTS
The purchase order must be delivered, usually by personally, email. Sometimes the
specific delivery method is specified in the purchasing documents. The recipient
then acknowledges receipt of the purchase order. Both parties keep a copy on file.

Step 7: Expediting

Expedition of the purchase order addresses the timeliness of the service or

materials delivered. It becomes especially important if there are any delays. The
issues most often noted include payment dates, delivery times and work
completion.

Step 8: Receipt and Inspection of Purchases

Once the sending company delivers the product, the recipient accepts or rejects the
items usually done by an end user in plant. Acceptance of the items obligates the
company to pay for them.

Step 9: Invoice Approval and Payment

Three documents must match when an invoice requests payment - the invoice
itself, the receiving document such as delivery challan and the original purchase
order. The agreement of these documents provides confirmation from both the
receiver and supplier. Any discrepancies must be resolved before the recipient pays
the bill. Usually, payment is made in the form of cash or cheques.

Step 10: Record Maintenance

In the case of audits, the company must maintain proper records. These include
purchase records to verify any tax information and purchase orders to confirm
warranty information. Purchase records reference future purchases as well.
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Purchase of Raw Material

HRC (Hot Rolled Coils):

Hot rolling is a mill process which involves rolling

the steel at a high temperature (typically at a
temperature over 1700° F), which is above the
steel’s recrystallization temperature. When steel is
above the recrystallization temperature, it can be
shaped and formed easily, and the steel can be made in much larger sizes. Hot
rolled steel is typically cheaper than cold rolled steel due to the fact that it is often
manufactured without any delays in the process, and therefore the reheating of the
steel is not required. When the steel cools off it will shrink slightly thus giving less
control on the size and shape of the finished product when compared to cold rolled.
Hot rolled coil is used in the manufacture of general engineering products such as
containers, pipes, wheel rims, agricultural implements and gas cylinders.

Crescent Steel and Allied product purchase HR coils from Taiwan based company
yearly around 24 ~30 thousand ton. All the transaction is done through Taiwan but
the material is ship from China as company plant is situated in China. Products
normally range in thickness from 14.3 mm, to 16 mm and in width from 1500 mm
to 1800 mm, Grade is X70 & X60 PSL 2 and Ungalvanized alloy steel (Hard).
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HMS 1 & 2 (Heavy Melting Steel):

Heavy melting steel (HMS) or heavy melting scrap is

a designation for recyclable steel and wrought iron.
HMS is 'Heavy Melting Scrap'. It is the generic term
for most types of heavy steel scrap, normally cut to
a size not exceeding 1.5m x 0.5m. It may and will
consist of cut lengths of pipe, re-bar, angles, steel
poles, H or I beams, ships plate. HMS 1 is the term
for heavier scrap which has a density of at least 0.7 tons
per cubic meter, whereas HMS 2 would be lighter steel scrap such as thin wall
tubing (eg bicycle frames), sheet scrap less than 3.2mm thick and so on. HMS 2
may contain galvanized and blackened steel whereas HMS 1 does not.

HMS1 and HMS2 are normally sold together with a ratio of 80/20 (or similar)
depending on the price, heavy and light. HMS is the worldwide description used.

Crescent Steel and Allied product purchase HMS 1 & 2 from Unites Arab Emirates
based company yearly around 20 ~ 24 thousand tons of scrap for it Hadith Plant.

Suppliers or Vendors List

1. ORIENT ENGINEERING SERVICES:

Established in 1986 with the aim of providing quality products backed by
professional after-sale services to the industry, Orient proud to have lived up
to our aim ever since and thrive on continuing to meet the challenges of the
changing needs of our clients.

Products include:
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 Industrial Water Treatment Chemicals

 Pneumatic & Hydraulically Actuated Metering Pumps
 Electromagnetic Metering Pumps
 Automatic Water Treatment Controllers
 Automatic Self-Cleaning Water Filters
 Water Testing Kits & Instruments

All products are manufactured by the leading manufacturers of the world,

who are globally recognized as producers of innovative and technologically
advanced products, to deliver effective and economical solutions to their
clients. These manufacturers are exclusively represented by Orient
Engineering Services in Pakistan. Such as MILTON ROY COMPANY,
SOLENIS, ORIVAL Inc. Sensorex etc.

2. AMEEJEE VALEEJEE & SONS (AVS):

AVS was established in 1867 in Karachi, in the then undivided subcontinent.
Initially AVS dealt with the supply of light engineering products. Over the
years, the product line gradually increased and coverage also began to
expand beyond Karachi. The founding fathers and subsequent generations
have since then made their mark on the country's industrial progress by their
entrepreneurship and innovative business activities. AVS represents ABB,
Atlas Copco etc.
SUPPLY CHAIN OF CRESCENT STEEL & ALLIED PRDUCTS
3. HAMZA ENTERPRISES
Hamza Enterprises is a global provider of engineering components, tooling
and industrial solutions to customers in the industrial sector. We Hamza
Enterprises are the leading Indenters, Importers and Exporters of various-
Hardware Tools, Power Tools, Machine Tools, Diamond Tools, Non-
Sparking Tools, Measuring Tools, Welding & Safety Equipment’s, Fire
Fighting Protection Equipment’s, Steel Link Chains, Abrasives &
Adhesives, Grinding & Cutting Disc, Chicago & Cammock Coupling &
Fittings, Wood & Timber ,Technical Spare Parts & Components and all
other Allied Products.

4. MASCO ENERGY SERVICES (MES)

Masco Energy Services (MES) is a renowned company in the supply,
engineering, installation and maintenance of power systems machinery sales
and services occupying a leadership position globally in the respective areas.

 Solar Power Systems

 Diesel & Gas Engines/Generators
 Farm, Construction & Earth Moving Machinery

Masco Energy Services is the pioneer in advanced power systems since the
last 44 years. Masco Energy has a wide range of products for residential,
commercial and industrial applications backed by premium long-term
service support.

5. TARIQ AUTOMATION
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Tariq Automation is located in Karachi, Pakistan. Tariq Automation deals in
various electric parts and components such as Siemens, ABB, Fotek, IFM,
Pepperl+Fuchs, Festo etc.

Operation

The plant manufactures Submerged Arc Welded Helical seam steel pipes with
diameters ranging from 8 inches to 120 inches, wall thickness ranging from 4
millimeters to 25.4 millimeters. It has the capability to manufacture pipes up to 120
inches in diameter for water transmission as per AWWA (American Water Work
Association). The company has been gradually enhancing and upgrading its pipe
production capacity to the present notional capacity of 200,000 tones. The process
is divided into different segments which are mention below:

SPIRAL PIPE MILL

 Hot Rolled Coil is loaded on the de-coiler of the Spiral Pipe machine.
 The strip is straightened and edges are milled to desired joint geometry.
 The strip is then guided into the Forming Station where it is helically formed
into a cylindrical shape.
 Once internal and external welding has been completed the weld seam, HAZ
and the pipe body is examined by the Automatic Ultrasonic Unit for possible
defects.
 The pipes are cut to a predetermined length by an Automatic Plasma Arc
cutting device.
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PIPE FINISHING LINE

 Flux and slag left inside the pipes after welding are cleaned.
 Pipes are visually inspected for any possible imperfections.
 During Fluoroscopic inspection the entire spiral seam of the pipe is analyzed
for the defects identified by the ultrasonic testing machine.
 Both ends of the pipes are beveled to suit site butt welding.
 Individual pipes are hydrostatically tested as per client specifications.
 At the final stage the X-Ray station radiographs the weld seam on each end
of the line pipe.

EXTERNAL SHOT BLASTING LINE

 The bare pipes are received at the incoming racks and are then pre-heated
and shot- blasted to specific surface profiles.
 As each pipe is shot blasted, the blasted profile and depth of anchor pattern
is tested to ensure quality.
 Pipes which are rejected after shot blasting are re worked and shot blasted
again before transferred to coating line.

EXTERNAL COATING LINE

 The shot blasted pipes are acid washed and chromate treated before entering
the induction heater/Gas Furnace where the pipe is heated to a temperature
recommended by the epoxy manufactures.
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 Epoxy powder is sprayed onto the pipes in the Epoxy Booth.
 If three layer coating is required co extruded layers of Co Polymer Adhesive
and Polyethylene/Polypropylene are wrapped on the pipe surface.
 The pipes are subsequently cooled at the Quench station and 100% inspected
for holiday.
 Final Inspection and marking of coated pipes are carried out as required.

INTERNAL SHOT BLASTING LINE

 At the internal shot blasting station bare pipes are shot blasted to achieve
desired surface profile.
 Grits/shots in the pipes are then cleaned through tilting or by blowing air
through the pipe.

INTERNAL COATING LINE

 Internally shot blasted Pipes are transferred to the Coating line.

 Epoxy Paint is pre heated to the temperature recommended by epoxy
suppliers.
 The coating is applied through an automatic airless spray machine to attain
the uniform coating thickness.
 Once coating is completed the pipe is left for curing and is later 100%
inspected for holiday.
 Final inspection of internally coated pipe is carried out.

DISTRIBUTION

The CSAPL outsourced its distribution network to three different companies.

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 The Pak Millat Goods Transport Company.
 M.Aftab Goods Transport Company.
 Metro Goods Transport Company.

The PAK-Millat goods provide the transportation service to CSAPL from Port to
the Factory. It provides the transportation of raw material which CSAPL imports
from Taiwan & UAE. The other two companies provide the transportation services
of the finished goods to their clients and customers. CSAPL provides the fuel card
to their distributors with the set limit of fuel which helps them to reduce the cost of
transportation. The CSAPL focuses on the hiring of certified and registered
supplier. CSAPL warehouse is located at KARACHI PORT & the secondary
warehouse is at their factory situated at Nooriabad.

INTEGRATION

Supply Chain Integration

The SCI uses to connect the departments of all the business process however it
may be the companies own department or their suppliers. Supply Chain Integration
is how everyone in the company and its trading partners work in sync to achieve
the same business objectives via integrated business process and information
sharing.

Internal Supply Chain Integration 

Each department is now connected via the same IT infrastructure to increase the
efficiency in their production. Integrated supply chain is a process wherein every
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phase from procurement of raw materials to production, distribution or supply to
eventual delivery which is mixed up and inseparable.

External Supply Chain Integration

Each company in the same supply chain joins hands and work together to achieve
the same goal to satisfy customer's requirements.

 The Crescent Steel & Allied Products is using Oracle ERP System in there
company to connect with their entire team worker together that help them to
do their job efficiently they use another portal for suppliers in which they
generate RFQ.

Benefits of Integration

 Reduced friction, fewer barriers, and less waste of resources on procedures

that do not add value.
 Increased functional and procedural synergy between participants.
 Faster response to changing market demands.
 Lower cost manufacturing operations.
 Lower capital investment in excess manufacturing capacity.
 Shorter product realization cycles and lower product development costs.
 Increased competitiveness and profitability.