REPORT OF THE SUMMER INTERNSHIP PROJECT Done at STEEL AUTHORITY OF INDIA LTD., COCHIN: 682031
Submitted to the School of Management Studies, Cochin University of Science and Technology, Kochi - 22
In partial fulfilment of the requirements for the award of Degree of MASTER OF BUSINESS ADMINISTRATION (INTERNATIONAL BUSINESS) By ARUN R. Reg.: 85413009 Organisation Guide: Mr Sunil Madhavan ( Sr. Manager (Marketing), steel Authority Of India Ltd.
Faculty Guide: Dr. K. Krishnan Nampoothiri, Associate Professor, School Of Management Studies.
School of management Studies August - 2014
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DECLARATION
I, hereby declare that this report of the Internship done at the STEEL AUTHORITY OF INDIA LTD. (SAIL), my original work. I further declare that this report is based on the information collected by me and has not previously been submitted to academic/ non- academic purposes.
ARUN R. (Reg. No. 85413042) Place: Cochin MBA (International Business) III rd. Semester Date: School Of Management Studies Cochin University of Science and Technology Kochi 682022
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CERTIFICATE
This is to certify that the report of the internship titled Report of the internship done at STEEL AUTHORITY OF INDIA LTD. is a bonafide record of the work done by Arun R. during June July 2014 in partial fulfillment of the requirements for the award of the Degree of Master of Business Administration of the Cochin University of Science and Technology.
Dr. K. KRISHNAN NAMPOOTHIRI Associate Professor School Of Management Studies (Faculty Guide)
Director School Of Management Studies
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Acknowledgement It is great pleasure for me to acknowledge the kind of help and guidance received to me during my project work. I was fortunate enough to get support from a large number of people to whom I shall always remain grateful. I sincerely thank Mr SUNIL MADHAVAN( Sr. Manager (Marketing)),Mr G.RAJESH(Sr. OS)and SMT.BEENA MATHEW(OS), Persons of amiable personality, for assigning such a challenging project work which has enriched my work experience and getting me acclimatized in a fit and final working ambience in the premises of Steel Authority of India Limited (SAIL). I extend my sincere gratitude to Prof Dr M Bhasi, Director SMS, CUSAT for giving this opportunity of organization study. I acknowledge my gratitude to Dr. K. Krishnan Nampoothiri, Assistant Professor, for his extended guidance, encouragement, support and reviews and without whom this project would not have been a success. Last but not the least I would like to extend my thanks to all the employees of Steel Authority of India Limited (SAIL) for their cooperation, valuable information and feedback during my project. ARUN.R
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TABLE OF CONTENTS Chapter Title Page No 1 INTRODUCTION 7 Introduction 8 2 STEEL INDUSTRY IN INDIA AN OVERVIEW 11 3 ORGANISATION PROFILE 14 Company Profile 15 About the company 17 Major units 19 Joint ventures 19 About Metal Junction 21 Major player of steel in India 31 Products 36 4 ORGANIZATION CHART 38 DEPARTMENT 39 Central Marketing organization 40 Function of Branches 43 Functions of marketing Department 44 Marketing activities of SAIL 44 Central sales department 45 About warehouse 46 Advertising in branch sales of SAIL 47 Policies of marketing 47 Pricing policies and sales procedure 48 Distribution 51 Channel 51 Sales promotion 51 Marketing strategies 52 Building customer relationship 53
Market development 53
Production according to market needs 54
Stock reduction 54
Price fixation 54
Dispatch 54 STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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Documentation 54
Channel distribution 55
Function of distribution channel 55
Function of stockyard 56
Raw material division 57
Central coal supply organization 57
Process flow-chart branch sales office 59
Process flow-chart for delivery operation 60
Conclusion 61
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CHAPTER -1 INTRODUCTION
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INTRODUCTION The project on comparison of financial statement of SAIL with other steel sectors in India has been a very good experience. Every manufacturing company faces the problem of Financial Management in their day to day processes. An organizations cost can be reduced and the profit can be increased only if it is able to manage the financial position of its firm. At the same time the company can provide customer satisfaction and hence can improve their overall productivity and profitability. This project is a sincere effort to study and analyze the Financial Management of SAIL and its competitors. The project work was divided into two phases. The first phase was focused on company profile of SAIL, Tata Steel and JSW Steel on the bases on Background, Business Description, Marketing and Distribution Network, CSR Initiatives, etc. and the second phase was conducted a Comparative analysis of SAIL with its competitors TATA Steel and JSW Steel on the bases of Production Performance, Financial Performance, Ratio Analysis, Segmental Break- up and Analysis of Cost and GSR/NSR. The internship is a bridge between the institute and the organization. This made me to be involved in a project that helped me to employ my theoretical knowledge about how the Analysis of Financial Statement is done by the firm. And in the process I could contribute substantially to the organizations growth. The experience that I gathered over the past two months has certainly provided the orientation, which I believe will help me in shouldering any responsibility in future.
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OBJECTIVES OF THE INTERNSHIP
The present internship is carried out in STEEL AUTHORITY OF INDIA LTD. with the following specific objectives. To study the organizational structure of STEEL AUTHORITY OF INDIA LTD. SAIL). To familiarize the departments of STEEL AUTHORITY OF INDIA LTD. (SAIL) and its functions.
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CHAPTER - 2 INDUSTRY ANALYSIS
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STEEL INDUSTRY IN INDIA AN OVERVIEW Steel has been the key material with which the world has reached to a developed position. All the engineering machines, mechanical tools and most importantly building and construction structures like bars, rods, channels, wires, angles etc are made of steel for its feature being hard and adaptable. Earlier when the alloy of steel was not discovered, iron was used for the said purposes but iron is usually prone to rust and is not so strong. Steel is a highly wanted alloy over the world. All the countries need steel for the infrastructural development and overall growth. Steel has a variety of grades i.e. above 2000 but is mainly categorized in divisions steel flat and steel long, depending on the shape of steel manufactured. Steel flat includes steel products in flat, plate, sheet or strip shapes. The plate shaped steel products are usually 10 to 200 mm and thin rolled strip products are of 1 to 10 mm in dimension. Steel flat is mostly used in construction, shipbuilding, pipes and boiler applications. Steel long Category includes steel products in long, bar or rod shape like reinforced rods made of sponge iron. The steel long products are required to produce concrete, blocks, bars, tools, gears and engineering products. After independence, successive governments placed great emphasis on the development of an Indian steel industry. In Financial Year 1991, the six major plants, of which five were in the public sector, produced 10 million tons. The rest of India steel production, 4.7 million tons, came from 180 small 29 plants, almost all of which were in the private sector. India's Steel production more than doubled during the 1980s but still did not meet the demand in the mid-1990s, the government was seeking private-sector investment in new steel plants. Production was projected to increase substantially as the result of plans to set up a 1 million ton steel plant and three pig- iron plants totalling 600,000 tons capacity in West Bengal, with Chinese technical assistance and financial investment. The commissioning of Tata Iron & Steel Company's production unit at Jamshedpur, Bihar in 1911-12 heralded the beginning of modern steel industry in India. At the time of Independence in 1947 India's steel production was only 1.25 Mt of crude steel. Following independence and the commencement of five year plans, the Government of India decided to set up four integrated steel plants at Rourkela, Durgapur, Bhilai and Bokaro. The Bokaro plant was commissioned in 1972. The most recent addition is a 3 Mt integrated steel plant with modern technology at Visakhapatnam. Steel Authority of India (SAIL) accounts for over 40% of India's crude steel production. SAIL comprises of nine plants, including five integrated and four special steel plants. Of these one was STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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nationalized and two were acquired; several were set up in collaboration with foreign companies. SAIL also owns mines and subsidiary companies. DEMAND OF STEEL IN INDIA Driven a booming economy and concomitant demand levels, consumption of steel has grown by 12.5 per cent during the last three years, well above the 6.9 percent envisaged in the National Steel Policy. Steel consumption amounted to 58.45 mt in 2006-07 compared to 50.27 mt in 2005-06, recording a growth rate of 16.3 per cent, which is higher than the world average. During the first half of the current year, steel consumption has grown by 16 per cent. A study done by the Credit Suisse Group says that India's steel consumption will continue to grow by 17 per cent annually till 2012, fuelled by demand for construction projects worth US$ 1 trillion. The scope for raising the total consumption of steel in the country is huge, as the per capita steel consumption is only 35 kgs compared to 150 kg in the world and 250 kg in China. With this surge in demand level, steel producers have been reporting encouraging results. For example, the top six companies, which account for 70 percent of the total production capacity, have recorded a year-on-year growth rate of 13.4 per cent, 15.7 per cent and 11.7 per cent in net sales, operating profit and net profit, respectively, during the second quarter of 2007-08 We expect strong demand growth in India over the next five years, driven by a boom in construction (43%-plus of steel demand in India). SUPPLY OF STEEL IN THE INDIAN MARKET Over the past ten years Indias crude steel output rose nearly 7%per year to 55.3 million tons, while global crude steel output increased by 4% (Germany managed an increase of just under 1%p.a.) Although India is the worlds eighth largest steel producer, its3%-plus share of global steel output is still very low; it is roughly the same as Ukraines share of world steel production. China, the worlds biggest steelmaker, produces nearly ten times as much as India. In 2005 Indias crude steel output of 46.5 million tons was 8%higher than in 2004; only in China was the growth rate considerably higher at 15%. By contrast, production volumes fell in the US and the EU-25 by nearly 5% and roughly 4% respectively. In the first five months of 2006 Indian steel production continued to expand unabated, rising 10% yoy. We forecast a significant increase in output by the Indian steel industry over the medium term. The entire industrys contribution to gross domestic product should rise in the coming years to more than 30% compared to just fewer than 27% at present. The growth drivers are STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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the expanding client industries automotive engineering (production up 16% p.a. between 2000 and 2005), mechanical engineering (up 10% p.a.) and construction (up 6% p.a.).
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CHAPTER - 3 ORGANISATION PROFILE
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COMPANY PROFILE
Steel has been the key material with which the world has reached to a developed position. All the engineering machines, mechanical tools and most importantly building and construction structures like bars, rods, channels, wires, angles etc. are made of steel for its feature being hard and adaptable. Earlier when the alloy of steel was not discovered, iron was used for the said purposes but iron is usually prone to rust and is not so strong. Steel is a highly wanted alloy over the world. All the countries need steel for the infrastructural development and overall growth. Steel has a variety of grades i.e. above 2000 but is mainly categorized in divisions steel flat and steel long, depending on the shape of steel manufactured. Steel flat includes steel products in flat, plate, sheet or strip shapes. The plate shaped steel products are usually 10 to 200 mm and thin rolled strip products are of 1 to 10 mm in dimension. Steel flat is mostly used in construction, shipbuilding, pipes and boiler applications. Steel long Category includes steel products in long, bar or rod shape like reinforced rods made of sponge iron. The steel long products are required to produce concrete, blocks, bars, tools, gears and engineering products. After independence, successive governments placed great emphasis on the development of an Indian steel industry. In Financial Year 1991, the six major plants, of which five were in the public sector, produced 10 million tons. The rest of India steel production, 4.7 million tons, came from 180 small plants, almost all of which were in the private sector. India's Steel production more than doubled during the 1980s but still did not meet the demand in the mid- 1990s, the government was seeking private-sector investment in new steel plants. Production was projected to increase substantially as the result of plans to set up a 1 million ton steel plant and three pig-iron plants totalling 600,000 tons capacity in West Bengal, with Chinese technical assistance and financial investment. The commissioning of Tata Iron & Steel Company's production unit at Jamshedpur, Bihar in 1911-12 heralded the beginning of modern steel industry in India. At the STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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time of Independence in 1947 India's steel production was only 1.25 Mt of crude steel. Following independence and the commencement of five year plans, the Government of India decided to set up four integrated steel plants at Rourkela, Durgapur, Bhilai and Bokaro. The Bokaro plant was commissioned in 1972. The most recent addition is a 3 Mt integrated steel plant with modern technology at Visakhapatnam. Steel Authority of India (SAIL) accounts for over 40% of India's crude steel production. SAIL comprises of nine plants, including five integrated and four special steel plants. Of these one was nationalized and two were acquired; several were set up in collaboration with foreign companies. SAIL also owns mines and subsidiary companies.
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ABOUT THE COMPANY
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STEEL AUTHORITY OF INDIA LIMITED Steel Authority of India Limited (SAIL) is the leading steel-making company in India. It is a fully integrated iron and steel maker, producing both basic and special steels for domestic construction, engineering, power, railway, automotive and defence industries and for sale in export markets. SAIL is also among the seven Maharatnas of the country's Central Public Sector Enterprises. SAIL manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, galvanised sheets, electrical sheets, structural, railway products, plates, bars and rods, stainless steel and other alloy steels. SAIL produces iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials, including the Company's iron ore, limestone and dolomite mines. The company has the distinction of being Indias second largest producer of iron ore and of having the countrys second largest mines network. This gives SAIL a competitive edge in terms of captive availability of iron ore, limestone, and dolomite which are inputs for steel making. SAIL's wide range of long and flat steel products are much in demand in the domestic as well as the international market. This vital responsibility is carried out by SAIL's own Central Marketing Organisation (CMO) that transacts business through its network of 37 Branch Sales Offices spread across the four regions, 25 Departmental Warehouses, 42 Consignment Agents and 27 Customer Contact Offices. CMOs domestic marketing effort is supplemented by its ever widening network of rural dealers who meet the demands of the smallest customers in the remotest corners of the country. With the total number of dealers over 2000, SAIL's wide marketing spread ensures availability of quality steel in virtually all the districts of the country. SAIL's International Trade Division ( ITD), in New Delhi- an ISO 9001:2000 accredited unit of CMO, undertakes exports of Mild Steel products and Pig Iron from SAILs five integrated steel plants. With technical and managerial expertise and know-how in steel making gained over four decades, SAIL's Consultancy Division (SAILCON) at New Delhi offers services and consultancy to clients world-wide. SAIL has a well-equipped Research and Development Centre for Iron and Steel (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies for the steel industry. Besides, SAIL has its own in-house Centre for Engineering and Technology (CET), Management Training Institute (MTI) and Safety Organisation at Ranchi. Our captive mines are under the control of the Raw Materials Division in Kolkata. The Environment Management Division and Growth Division of SAIL operate from their headquarters in Kolkata. Almost all our plants and major units are ISO Certified.
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MAJOR UNITS Integrated Steel Plants Bhilai Steel Plant(BSP) in Chhattisgarh Durgapur Steel Plant (DSP) in West Bengal Rourkela Steel Plant(RSP) in Orissa Bokaro Steel Plant(BSL)in Jharkhand IISCO Steel Plant (ISP) in West Bengal
Special Steel Plants Alloy Steels Plants (ASP) in West Bengal Salem Steel Plant (SSP) in Tamil Nadu Visvesvaraya Iron and Steel Plant (VISL) in Karnataka
NTPC SAIL Power Company Pvt.Limited (NSPCL): A 50:50 joint venture between Steel Authority of India Ltd (SAIL) and National Thermal Power Corporation Ltd (NTPC Ltd); manages SAILs captive power plants at Rourkela, Durgapur and Bhilai with a combined capacity of 814 megawatts (MW). Bokaro Power Supply Company Pvt. Limited (BPSCL): This 50:50 joint venture between SAIL and the Damodar Valley Corporation (DVC) is managing the 302-MW power generating station and 660 tonnes per hour steam generation facilities at Bokaro Steel Plant. Mjunction Services Limited: A 50:50 joint venture between SAIL and Tata Steel; promotes e-commerce activities in steel and related areas. Its newly added services include e-assets sales, events & conferences, coal sales & logistics, publications, etc. SAIL-Bansal Service Centre Limited: A joint venture with BMW Industries Ltd. on 40:60 basis for a service centre at Bokaro with the objective of adding value to steel. Bhilai JP Cement Limited: A joint venture company with Jaiprakash Associates Ltd on 26:74 basis to set up a 2.2 million tonne (MT) slag-based cement plant at Bhilai. STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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Bokaro JP Cement Limited: Another joint venture company with Jaiprakash Associates Ltd on 26:74 basis to set up a 2.1 MT slag-based cement plant at Bokaro. SAIL & MOIL Ferro Alloys (Pvt.) Limited : A joint venture company with Manganese Ore (India) Ltd on 50:50 basis to produce Ferro-manganese and silico-manganese required in production of steel. S & T Mining Company Pvt. Limited: A 50:50 joint venture company with Tata Steel for joint acquisition & development of mineral deposits; carrying out mining of minerals including exploration, development, mining and beneficiation of identified coking coal blocks. International Coal Ventures Private Limited: A joint venture company/SPV promoted by five central PSUs, viz. SAIL, CIL, RINL, NMDC and NTPC (with respectively 28.7%, 28.7%, 14.3%, 14.3% and 14.3% shareholding) aiming to acquire stake in coal mines/blocks/companies overseas for securing coking and thermal coal supplies. SAIL SCI Shipping Pvt. Limited: A 50:50 joint venture with Shipping Corporation of India for provision of various shipping and related services to SAIL for importing of coking coal and other bulk materials and other shipping-related business. SAIL RITES Bengal Wagon Industry Pvt. Limited: A 50:50 joint venture with RITES to manufacture, sell, market, distribute and export railway wagons, including high-end specialised wagons, wagon prototypes, and fabricated components/parts of railway vehicles, rehabilitation of industrial locomotives, etc., for the domestic market. SAIL SCL Limited: A 50:50 JV with Government of Kerala where SAIL has management control to revive the existing facilities at Steel Complex Ltd, Calicut and also to set up, develop and manage a TMT rolling mill of 65,000 MT capacity along with balancing facilities and auxiliaries.
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ABOUT METAL JUNCTION Corporations across the world have realized that in a world without boundaries, certain regions and people with distinct competencies will be more efficient than others and therefore the visible trend in the world today is outsourcing. Companies are outsourcing manufacturing activities, customer services, back office operations and a host of other activities, either because there is someone else who can do the same thing for less, or, there is specialist who can offer services of higher quality. Industry has recognized that whilst it has to concentrate on growth, a prerequisite is to become globally competitive. Industry has to, on the one hand, concentrate on its core competencies of bringing about efficiencies in manufacturing and on the other hand look at bringing about efficiencies in their Supply Chain which is their buying and selling processes. Metal-junction operates at the extreme ends of the value chain and hence it was essential to segregate the organization into two Major Business Units (Commerce-junction and Metal-junction) so as to independently focus on: Specific requirement of clients and customer Specific procedure for both functions Knowledge and information for two systems
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MAJOR PLAYERS OF STEEL IN INDIA:
1. Public Sector
(A) Steel Authority of India Limited (SAIL)
Steel Authority of India Limited (SAIL) is a company registered under the Indian Companies Act, 1956 and is an enterprise of the Government of India. It has five integrated steel plants at Bhilai (Chattisgarh), Rourkela (Orissa), Durgapur (West Bengal), Bokaro (Jharkhand) and Burnpur (West Bengal). SAIL has three special and alloy steel plants viz. Alloy Steels Plant at Durgapur (West Bengal), Salem Steel Plant at Salem (Tamilnadu) and Visvesvaraya Iron & Steel Plant at Bhadravati (Karnataka). In addition, a Ferro Alloy producing plant Maharashtra Electros melt Ltd. at Chandrapur, is a subsidiary of SAIL. SAIL has Research & Development Centre for Iron & Steel (RDCIS), Centre for Engineering & Technology (CET), SAIL Safety Organisation (SSO) and Management Training Institute (MTI) all located at Ranchi; Central Coal Supply Organisation (CCSO) at Dhanbad; Raw Materials Division (RMD), Environment Management Division (EMD) and Growth Division (GD) at Kolkata. The Central Marketing Organisation (CMO), with its headquarters at Kolkata, coordinates the country- wide marketing and distribution network.
(B) RASHTRIYA ISPAT NIGAM LTD. (RINL)
RINL, the corporate entity of Visakhapatnam Steel Plant (VSP) is the first shore based integrated steel plant located at Visakhapatnam in Andhra Pradesh. The plant was commissioned in August 1992 with a capacity to produce 3 million tonne per annum (mtpa) of liquid steel. The plant has been built to match international standards in design and engineering with state-of- the- art technology incorporating extensive energy saving and pollution control measures. Right from the year of its integrated operation, VSP established its presence both in the domestic and international markets with its superior quality of products. The company has been awarded all the three International standards certificates, namely, ISO 9001:2000, ISO 14001: 1996 and OHSAS 18001: 1999. STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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RINL was accorded the prestigious Mini Ratna status by the Ministry of Steel, Govt. of India in the year 2006 and the company is gearing up to complete the ambitious expansion works to increase the capacity to 6.3 mtpa by 2009. RINL has prepared a road map to expand the plants capacity up to 16 mtpa in phases.
(C) Metal Scrap Trade Corporation Ltd. (MSTC)
MSTC Ltd. (formerly Metal Scrap Trade Corporation Ltd.) was set up on the 9th September, 1964 as a canalizing agency for the export of scrap from the country. With the passage of time, the company emerged as the canalizing agency for the import of scrap into the country. Import of scrap was de-canalized by the Government in 1991-92 and MSTC has since then moved on to marketing ferrous and miscellaneous scrap arising out of steel plants and other industries and importing Coal, Coke, Petroleum products, semi-finished steel products like HR Coils and export primarily Iron ore. The Company has also established an e- auction portal and undertakes e-auction of Coal, Diamonds and Steel Scrap and has developed an e-procurement portal in house.
(D) Ferro Scrap Nigam Ltd. (FSNL)
FSNL is a wholly owned subsidiary of MSTC Ltd. with a paid up capital of Rs. 200 lakh. The Company undertakes the recovery and processing of scrap from slag and refuse dumps in the nine steel plants at Rourkela, Burnpur, Bhilai, Bokaro, Visakhapatnam, Durgapur, Dolvi, Duburi&Raigarh. The scrap recovered is returned to the steel plants for recycling/ disposal and the Company is paid processing charges on the quantity recovered at varying rates depending on the category of scrap. Scrap is generated during Iron & Steel making and also in the Rolling Mills. In addition, the Company is also providing Steel Mill Services such as Scarfing of Slabs, Handling of BOF Slag, etc.
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(E) Hindustan Steelworks Construction Ltd. (HSCL)
HSCL was incorporated in June 1964 with the primary objective of creating in the Public Sector an organization capable of undertaking complete construction of modern integrated Steel Plants. HSCL had done the construction work of Bokaro Steel Plant, Vizag Steel Plant and Salem Steel Plant from the inception till commissioning and was associated with the expansion and modernization of Bhilai Steel Plant, Durgapur Steel Plant, IISCO (Burnpur) and also Bhadravati Steel Plant. With the tapering of construction activities in Steel Plants,the company intensified its activities in other sectors like Power, Coal, Oil and Gas. Besides this, HSCL diversified in Infrastructure Sectors like Roads/Highways, Bridges, Dams, Underground Communication and Transport system and Industrial and Township Complexes involving high degree of planning, co- ordination and modern sophisticated techniques. The company has developed its expertise in the areas of Piling, Soil investigation, Massive foundation work, High rise structures, Structural fabrication and Erection, Refractory, Technological structures and Pipelines, Equipment erection, Instrumentation including testing and commissioning. The company has also specialized in carrying out Capital repairs and Rebuilding work including hot repairs of Coke Ovens and Blast Furnaces and other allied areas of Integrated Steel Plants.
(F) MECON LTD.
MECON is one of the leading multi-disciplinary design, engineering, consultancy and contracting organization in the field of iron & steel, chemicals, refineries & petrochemicals, power, roads & highways, railways, water management, ports &harbours, gas & oil, pipelines, nonferrous, mining, general engineering, environmental engineering and other related/ diversified areas with extensive overseas experience. MECON, an ISO: 9001- 2000 accredited company, registered with World Bank (WB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), African Development Bank (AFDB), and United Nations Industrial Development STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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Organization (UNIDO), has wide exposure and infrastructure for carrying out engineering, consultancy and project management services for mega projects encompassing architecture & town planning, civil works, structural works, electric, air conditioning & refrigeration, instrumentation, utilities, material handling & storage, computerization etc. MECON has collaboration agreements with leading firms from the USA, Germany, France, Italy, Russia, etc. in various fields. The authorized share capital of the company is Rs. 10,400 lakh (previous year Rs. 4,100 lakh) against which the paid up capital is Rs. 10,313.84 lakh (previous year Rs. 4,013.84 lakh). All the shares are held by the Government of India. 2. Private Sector
The private sector of the Steel Industry is currently playing an important and dominant role in production and growth of steel industry in the country. Private sector steel players have contributed nearly 67% of total steel production of 38.08 million tonnes to the country during the period April-December, 2007. The private sector units consist of both major steel producers on one hand and relatively smaller and medium units such as Sponge iron plants, Mini Blast Furnace units, Electric Arc Furnaces, Induction Furnaces, Rerolling Mills, Cold- rolling Mills and Coating units on the other. They not only play an important role in production of primary and secondary steel, but also contribute substantial value addition in terms of quality, innovation and cost effective.
(A)TATA STEEL LTD.
Tata Steel has an integrated steel plant, with an annual crude steel making capacity of 5 million tonnes located at Jamshedpur, Jharkhand. Tata Steel has completed the first six months of fiscal 2007-08 with impressive increase in its hot metal production. The hot metal production at 2.76 million tonnes is 4.6%more compared to the corresponding period of the previous year. The crude steel production during the period was 2.43 million tonnes which is marginally lower than the production of 2.45 million tonnes last year. The saleable steel STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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production was at a lower level during the period April September, 2007 (2.34 million tonnes) compared to the corresponding period of last year (2.36 million tonnes). Tata Steel is continuing with its programme of expansion of steel making capacity by 1.8 million tonnes to reach a rated capacity of 6.8 million tonnes. The Project is reported to be moving ahead of schedule and is likely to be commissioned by May 2008 against the original schedule of June 2008. The Company has planned to take the capacity to 10 million tonnes by the fiscal year
2010. Tata Steels Greenfield projects in Orissa and Chattisgarh are progressing on schedule with placement of equipment order for Kalinganagar Project in Orissa and commencement of the land acquisition process. Jharkhand Project is awaiting announcement of Relief & Rehabilitation policy of the State Government.
(B)ESSAR STEEL LTD.
Essar Steel Holdings Ltd. (ESHL) is a global producer of steel with a footprint covering India, Canada, USA, the Middle East and Asia. It is a fully integrated flat carbon steel manufacturerfrom iron ore to ready-to-market products. ESHL has a current global capacity of 8 million tonnes per annum (MTPA). With its aggressive expansion plans in India and other parts of Asia and North America, its capacity is likely to go up to 25 MTPA by2012. Its products find wide acceptance in highly discerning consumer sectors, such as automotive, white goods, construction, engineering and shipbuilding. Essar Steel Ltd., the Indian Company of Essar Steel Holdings Limited, is the largest steel producer in western India, with a current capacity of 4.6 MTPA at Hazira, Gujarat, and plans to increase this to 8.5 MTPA. The Indian operations also include an 8 MTPA beneficiation plant at Bailadilla,
Chattisgarh which has worlds largest slurry pipeline of 267 km to transport beneficiated Iron
Slurry to the pellet plant, and an 8 MTPA pellet complex at Visakhapatnam. The Essar Steel
Complex at Hazira in Gujarat, India, houses the worlds largest gas-based single location sponge iron plant, with a capacity of 4.6 MTPA. The complex also STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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houses the steel plant and the 1.4 MTPA cold rolling complexes. The steel complex has a complete infrastructure setup, including a captive port, lime plant and oxygen plant. Essar Steel produces highly customized value-added products catering to a variety of product segments and is Indias largest exporter of flat products, selling close to half of its production to the highly demanding US and European markets, and to the growing markets of South East Asia and the Middle East. The companys products conform to quality specifications of international quality certification agencies, like ABS, API, TUV Rhine Land and Lloyds Register. Essar Steel is the first
Indian steel company to receive an ISO 9001 and ISO 14001 certification for environment management practices. Essar Steel utilizes Hot Briquetted Iron- Direct Reduced Iron (HBIDRI) technology supplied by Midrex Technology, USA along with four 150 tonnes DC electric arc furnaces imported from Clecim, France. The Hazira unit of Essar Steel is equipped with 5.5 million tonnes per annum (MTPA) hot briquetted iron plant, 4.6 MTPA electric are furnace, 4.6 MTPA continuous caster, 3.6 MTPA hot strip mill and 1.4 MTPA Cold Rolling Mill. During the year 2007-08, Essar was awarded costs ISO/TS 16949 and OHSAS 18000 certification.
(C) JSW STEEL LTD.
JSW Steel is a 3.8 MTPA integrated steel plant, having a process route consisting broadly of Iron Ore Beneficiation Pelletisation Sintering Coke making Iron making through Blast Furnace as well as Corex process Steel making through : BOF- Continuous Casting of slabs Hot Strip Rolling Cold
Rolling Mills. JSW Steel has a distinction of being certified for ISO-9001:2000 Quality Management System, ISO-14001:2004 Environment Management System and OHSAS 18001:1999 Occupational Health and Safety Management System. The capacity as on 1.11.2007 stood at 3.8 MTPA and the capacity is likely to rise to 6.8 MTPA by 2008, and further to 9.6 MTPA by 2010.
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(D) JINDAL STEEL & POWER LTD. (JSPL)
Jindal Steel & Power Limited is one of the fast growing major steel units in the country. The Raigarh plant of JSPL has a present capacity of 1.37 million tonne per annum (MTPA) sponge iron plant, 2.40 MTPA Steel Melting Shop (SMS), 1.0 MTPA plant Mill, 2.30 sinter plant, 0.8 MTPA coke oven and a 330 Mega Watt captive power plant. During the year 2006-07, the company produced 1.19 million tonnes of sponge iron, 0.8 million tonnes of various steel products, 0.57 million tonnes of hot metal and 0.21 million tonnes of rolled products. The performance of JSPL during April-October 2007-08 was 0.68 million tonnes of sponge iron, 0.72 million tonnes of steel products (slabs/blooms/billets/rounds), 0.68 million tonnes of hot metal, 0.27 million tonnes of rolled products and 0.11 million tonnes of plates
( E) ISPAT INDUSTRIES LTD. (IIL)
IIL has set up one of the largest integrated steel plants in the private sector in India at Dolvi in Raigad District, Maharashtra with a capacity to manufacture 3 million tonnes per annum of hot rolled steel coils (HRC). The Dolvi complex also boasts of an ultra modern blast furnace (setup by a group company Ispat
Metallics India Ltd.) capable of producing 2.0 million tonnes per annum of Hot Metal/ Pig Iron, a 2.0 million tonnes capacity Sinter Plant (newly commissioned) and a DRI plant with a capacity of 1.6 million tonnes per annum. The complex boast of an ultra modern captive jetty which meets the plants requirement with regard to import of various raw material. In the coming years, after augmenting necessary infrastructure facility, it has planned to export the goods from the captive jetty. Further, the complex envisages adding a 110 MW captive power plant (which will use the Blast Furnace gas) in near future.
The integrated steel plant is using the converter-cum-electric arc furnace route (CONARC process) for producing steel. In this project, IIL have uniquely combined the usage of hot metal and DRI (sponge iron) in the electric arc furnace for production of liquid steel for the first time in India. For casting and rolling of liquid steel, IIL has the state-of-the art technology called compact strip STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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production (CSP) process, which was installed for the first time in India and produces high quality and specifically very thin gauges of Hot Rolled Coils.
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Market Share of Leading Players in Iron and Steel Industry
COMPANY PRODUCTION OF MARKET SHARE(IN STEEL (IN MILLION PERCENTAGE TERMS) TONNES)
SAIL 13.5 32%
TISCO 5.2 11%
RNIL 3.5 8%
ESSAR,ISPAT,JSWL 8.4 19%
OTHERS 14.5 30%
TOTAL 45.1 100%
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PRODUCTS SAILS MAJOR PRODUCTS SAIL has a wide range of steel products - both Long and Flat. Among Long products are: Structurals, Crane Rails, Bars, Roads &Rebars, and Wire Rods; and Flat products covering the range of HR Coils, Sheets & Skelp, Plates, CR Coils & Sheets, GC Sheets/GP Sheets and Coils, Tinplates, Electrical Steel. SAIL also produces Tubular products and Railway products such as rails, wheels, axles and wheel sets.
Other products of SAIL include Pig iron and Fertilizers such as Calcium Ammonium Nitrate ("Sona"), Ammonium Sulphate ("Raja") and Coal Chemicals like Benzene, Toluene, Xylene etc.
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PRODUCTS HOT ROLLED COILS, SHEETS AND SKELP Hot rolled coils, sheets and skelp (narrow coil), are the largest product category of the company in terms of both sales volume and revenue. Hot rolled coils are primarily used for making pipes and have many direct industrial and manufacturing applications, including the construction of tanks, railway cars, bicycle frames, ships, engineering and military equipment and automobile and truck wheels, frames and body parts. Hot rolled coils are also used as feedstock for cold rolling mills where they undergo further processing. Hot rolled coils are also delivered to the company's own cold rolling mills and silicon sheet mill and pipe plant in a wide range of widths and thicknesses as the feedstock for higher value-added steel products. The company is the largest producer of hot rolled coils, sheets and skelp in India. SEMI-FINISHED PRODUCTS The company produces semi-finished products, including blooms, billets and slabs, which are converted into finished products in the company's processing plant and, to a lesser extent, sold to rerollers for conversion to finished products.
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PLATES Steel plates are used mainly for the manufacture of bridges, steel structures, ships, large diameter pipes, storage tanks, boilers, railway wagons and pressure vessels. The company also produces weatherproof steel plates for the construction of railcars. The company is currently the largest producer of steel plates in India with a domestic market share of more than 80 per cent for these products. The company is the only producer of wide and heavy plate products in India. COLD ROLLED PRODUCTS Cold rolling of hot rolled products produces a superior surface finish, improves the physical properties of the steel, such as tensile strength, and reduces its thickness to precise gauges. As a result, cold rolled products generally command higher prices than hot rolled products. The products of the cold rolling mill include cold rolled sheets and coils, which are used primarily for precision tubes, containers, bicycles, furniture and for use by the automobile industry to produce car body panels. Cold rolled products are also used for further processing, including for colour coating, galvanizing and tinning. The company also produces further processed cold rolled products, including galvanized sheets and tin plates.
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STRUCTURALS Structural steel products are produced through a process of hot rolling in the section or structural mills. They are long steel products with cross sections of various shapes. I-beams, channels and angle steel are used in mining, the construction of tunnels, factory structures, transmission towers, bridges, ships railways and other infrastructure projects. BARS AND RODS The company produces steel bars and rods through a process of hot rolling billets in the finishing mills. Reinforcement steel and wire rods are primarily used by the construction industry. The company is one of the largest producers of reinforcement bars in India which are primarily sold to the construction industry.
SPECIALITY PRODUCTS Speciality products include electrical sheets, tin plates and pipes. Electrical sheets are cold rolled products of silicon steel for electrical machinery. Tin plates are cold rolled steel electrolytically coated with tin for food packaging. Pipes are longitudinally or spirally welded from hot rolled coils for conveying such things as water, oil and gas. STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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ALLOY AND STAINLESS PRODUCTS In addition to the steel products indicated above, SAIL produces a wide range of alloy steel products at ASP, SSP and VISL. Elements including chromium, nickel, vanadium and molybdenum are used in the alloy mixture to impart special properties to steel. These alloy steels are primarily used for sophisticated applications, including in the automobile, railway and defense industries. A wide variety of alloy and stainless steel plates, hot rolled sheets, cold rolled sheets, bars, billets, blooms, forgings and die blocks are manufactured at ASP in an Electric Arc Furnace. SAIL is able to produce different qualities of alloy steels to meet the requirements of its customers. To increase steel's corrosion resistance properties, nickel and chromium are used in the making of stainless steel. SSP produces cold rolled stainless steel coils and sheets with thickness ranging from 0.3 mm to 6 mm and width ranging from 500 mm to 1,250 mm. These materials can be produced in a large number of grades for different applications. Stainless steel products are used for diverse applications including household utensils, automobile trims, conveyor belts, elevators, chemical and food processing equipment, building and interior decoration and pharmaceutical equipment.
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CHAPTER -4 DEPARTMENTS
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ORGANISATION CHART
BRANCH SALES OFFICE/WARE HOUSE KOCHI WAREHOUSE SRI.H.R NARASIHHAN AGM/WHM
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DEPARTMENTS
CENTRAL MARKETING ORGANISATION
The ISO 9001:2000 certified Central Marketing Organization (CMO) is Indias largest industrial marketing set up that markets carbon steel produced by the four integrated steel plants of SAIL.
Headquartered in Kolkata, it transacts business through its network of 34 branch sales offices spread across the four regions, 24 Warehouses equipped with mechanized handling systems, 11 Customer Contact Offices and 15 Consignment Agents. CMOs domestic marketing effort is supplemented by its ever widening network of authorized and rural dealers who meets the demands of the smallest customers in the remotest corners of the country. A strong IT support system enables real time network connectivity within the entire CMO network.
Extensive customer contact, product and segment specialization, close monitoring of order servicing and feedback analysis through the Customer satisfaction Index are established norms at CMO. The customer friendly approach of CMO is backed by practical after sales service.
Through the process of Key Account Management, CMO provides single window service to key customers across the country for every business transaction from enquiry to order booking, order tracking to delivery, and even consultancy after- sales service. STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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Central Marketing Organization (CMO) is India's largest marketing home. It has spread its wings far and wide from Srinagar in the North to Cochin in the South and Dhimapur in East to Ahmedabad in the west. All SAIL Product are marketed in India through C.M.O. to ensure quality and prompt dispatch of product, CMO keeps in touch with producing units as well as the transport and shipping sectors. It operates through the network of stockyards, dockyards, Branch sales offices, consignment agents and Extension counter.
CMO has got responsibility to sell pig iron and mild steel products manufacture by BSL, DSP, RSP, and BSL, having its headquarters at IspatBhavan, 40 Chouringee Road, Kolkata 71. CMO Branches spread throughout the country with stockyards for storing and selling Iron & Steel materials of the plants.
Branch manager having other colleagues including finance executive to help Branch Manager in day-to-day operations. The network of branches is divided into Four regions as given below: -
Regions Branches Attached Northern region, New Delhi Agra, Allahbad, Faridabad, Gaziabad, Kanpur, Lucknow, Delhi, Chandigarh, Jalandher, Jammu Ludhiana and MandiGovindgarh. STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
In addition to above, one zonal office is functioning in Guwahati. CMO has got transport and shipping department at Visakhapatnam to handle the export and import consignment at the different ports.
FUNCTIONS OF BRANCHES:-
I) Booking of orders from the customers on long term and short-term basis. II) Passing on details of booking to the concerned SRM Office. III) Receipt of materials at stockyard by wagons/trucks. IV) Issuance of offers and delivery orders to customers against their booking. V) After sale services to customers. With increasing competition and business scenario, it is their endeavor to increase the market share and customer satisfactions have appointed KAMs- Key Account Managers at the branch level and operations at branch level have been segmented on the type of product-Flat or long. CMO is divided on Long and Flat basis as STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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both types of products have to be dealt in different manner due to nature of application and varied uses. Similarly, for better customer satisfaction, Customer Satisfaction Index (CSI) has to be measured for the Key Account Customers. The Key Account Customer has been identified on branch and national level and TMI and KAM of CMO are following these customer's orders. AT plant level, PAC and PIC are appointed who have full knowledge of products and process. The production and coordination meeting is held in the last week of preceding month to decide the final product mix. FUNCTION OF MARKETING DEPARTMENT 1. To monitor the orders issued by CMO, So that these orders can fulfilled in time. 2. Put pressure on CMO, to get orders for an underutilized mill. 3. To sell all the secondary products directly i.e. directly by BSL and by CMO. 4. On day to day basis it takes care of the dispatches i.e. daily dispatch are checked. MARKETING ACTIVITIES OF SAIL ADVERTISEMENTS Advertising is a paid form of communication where the payment is paid to media which carries the message to the customers. It is the most commonly used tool by the businesses on which company typically spends the greatest portion of its promotional budgets. There are two distinct objectives of advertising, short term and long term objectives.
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SHORT TERM OBJECTIVES: To stimulate traffic building within days of the appearance of an advertisements usually by means of a promotional offer. LONG TERM OBJECTIVES: To increase the number of customers from the identified target market who have natural tendency to think of the identified company as the right choice for the class of the business. CENTRAL SALES DEPARTMENT It is one and only branch sales office of SAIL in Kerala. The products of SAIL are stored in modern warehouse of branch sales of Tripunithura. The sales of products and other operations are undertaken by both in sales office and warehouse. Branch sales office of SAIL is given greater importance to customer service. They provide better customer service by the implantation of Quality Management System Branch sales office of SAIL can achieve something such as: Can give reply to customer queries within three working days. Customer waiting time with respect to issue of delivery order has been reduced. Improvement in working, preservation of document and housekeeping.
ABOUT THE WAREHOUSE The state government of Kerala had acquired 14.93 acres of land at Tripunithura and handed over to SAIL to develop a modern warehouse for its branch sales office, cochin. Originally it was envisaged that warehouse would have railway facility to material directly into it. STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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SAIL has invested around 7.49 crores towards the cost of land and development charge .Out of 14.93 acres ,initially only 5.5 acres had developed with stand for storing materials,roads,buildings etc. The entire land is secured with boundary ,walloverlined with barbed wire fencing. Some infrastructure facilities are available in warehouse. these are: Warehouse office. Substation for HT power supply. 60T electronic weigh bridge. Covered go down of 720 sq.mts. 12.5MT capacity EOT cranes. 15MT capacity of mobile cranes.
ADVERTISING IN BRANCH SALES OFFICE OF SAIL, COCHIN Branch sales office of SAIL always tries to maintain good customer relationship. So that SAIL given a greater importance for advertising. They give advertising indirectly through dealers. SAIL have one dealer in each district of Kerala. The dealers has been undertaken the advertising activities of SAIL. The dealers makes advertisements for SAIL and the branch sales office pay them for advertisements and SAIL also sponsors for the events like basketball game.
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POLICIES OF MARKETING Marketing Planning has responsible function in the working of marketing department. All the risky developments, taking out solution to cripple `situations, this section carries out product pricing and related activities, some of the programmes, policies and procedures are as follows:- I) Positioning the product a value based place in customer mind. II) Finalize annual sales plan and quantity, monthly, weekly, and daily rolling programme of Rolling mills in consultation with CMO and mills. This plan is based on the sales forecast receive from JPU SPL/ Iron and steel controller. III) Optimizing the product-mix by proper utilization of available stocks. IV) Receiving Enquiries and complaints, cancellation of orders etc. V) Coordinating the works of mills and traffic department so as to maximize dispatches. VI) Co-ordinations with CMO from stages of enquiry, for exports, development of new Profiles, sections, modification of product scheduling till the orders are completed. VII) Development of new qualities of steel. VIII) Periodical market surveys of products to analyse the market position. IX) Implementation of suggestions received from the customers feedback. X) Ensure customer satisfaction by meeting customers regularly; provide redress to their problems and fulfilment of demand.
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PRICING POLICY AND SALES PROCEDURE: PRICING: Fixing the price of a product is the most vital function in the whole process of the marketing and it should be done after proper market study and requires decision making ability. If price is too low the company will lose revenue and if the price is too high it will lose customers resulting in loss of revenue valuable customers. Coal chemicals are the main product which is to be marketed by the Marketing Department of Bokaro Steel Plant. Almost all the products are sold on the fixed price basis. This is due to the fact that the company does not enjoy monopoly in the said market and the price is totally market driven.
The policy adopted by the marketing department for pricing of materials is largely guided by the price offered by the bidders during the auction. The various factors taken into consideration while pricing the re-roll able items can be enumerated as follows: - (a) Prices offered in the auction sales. (b) Quantity of material to be lifted. (c) Managing director's approval.
The average of the prices offered by the bidder during auction is taken as the basis to fix the prices of materials to be sold through marketing department. Further the techniques of break-up-pricing are adopted i.e. the larger the quantity purchased lower will be the prices. This technique encourages the buyers to purchase larger quantity. Finally the managing director approves the prices set by the pricing committee. On this basis, a price list is prepared for all the potential buyers. Price STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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list also indicates the sales tax and Excise duty to be levied. Thus the interested parties place their orders with the marketing department on the basis of price list reviewed every month. Every customer is required to have a security deposit amount of Rs.1 lakh. The payment for the material required is to be in advance. The material is supposed to be lifted on the specified date on account of delay the party has to pay the difference in the prices, if there is any increase in subsequent month. STANDING PRICING COMMITTEE: The committee reviews the price of various products and takes decision in favour of maximizing the profit. It holds meeting at least once in a month. But the volatility of the market and pool of different products lead to a number of meeting of the committee in quick succession. The committee consists of: GM (Utility), Chairman GM (Marketing), Convener DGM (Finance), member DGM (Sales Coordination), member DGM (Stores), member DGM (BPP), member For Scrap goods the DGM (SSD) replaces the DGM (BPP). Rests of all the members are always present in all the meetings.
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While deciding the price following points are kept in mind: Dispatch of the last month. Material in stock. Forecast of next month. General market condition. Availability of transport facility.
GM (Marketing), as per the need, decides the frequency and time of meetings to be held. Minute report of all the meetings is prepared and it contains the existing price and the proposed price. The final price is moved to the MD through the official channel including GM (Marketing), Executive Director (MM), GM (Finance and Accounts), and ED (Works). After the MDs approval the price becomes applicable and the circular indicating the revised price is printed, issued and distribution to the customers and all the concerned departments. DISTRIBUTION For the purpose of distribution of steel (as per JPC) policy in fashion, customers are categorized into A, B, C & D. Priority sector customer e.g. Defence, Railways etc. are under category A and about 60% of the product allotted to them. The balance 40% is kept for the category B, C & D. On the other hand for sale of scraps there is no such policy adopted by Bokaro Steel Plant. Customers are served on first come first served basis.
CHANNELS Bokaro steel plant has zero level channels as it directly sells to the customers. There is no intermediate among producer and consumer. Marketing Department STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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always remains in contact with the customers extracts information about the current market situation on the basis of interaction between them. SALES PROMOTION Sales Promotion consists of a diverse collection of incentive tools designed to stimulate quicker or greater purchase of particular product. As a part of promotional activities, BSL is employing following activities: a) Discount slabs is provided to boost the sales, description of which is given below: Up to 10,000 tones ----- No Discount 10,000 to 15,000 ----- 15% Discount Above 15,000 ----- 20% Discount b) To find new customers and to inform customers at far distant areas Tender Notice given in the newspaper for sale of scraps. Best among the application is accepted with a view to get the best revenue. c) Sometimes when new item is to be sold sales notice is given in the newspaper. But most of the time local customers get informed from other customers.
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MARKETING STRATEGIES
Steel being an industrial commodity it is very necessary to maintain customer relationship for profitability and smooth running of company. 1. Customer Satisfaction BSL adopts following practices for customer satisfaction. a. Procedure / process adapted to access current / future expectation of customers. b. It induces market research visiting customer premises attending to customer complaints. c. CMO has Market Management Group where specialists monitor changing demand pattern and development in each Market segment is carried on. d. It has posted market development officers at various locations that are its eyes and ears for monitoring current and future expectation of its customer. e. The Business-planning department is exclusively meant to study customer's changing demand scenario and assess current and future expectation. f. To understand customer needs seminars and workshops are also organized by BSL.
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BUILDING CUSTOMER RELATIONSHIP BSL has adopted the philosophy of recognizing segment of the market and identifying key customer in segment and giving them preferential treatment. CMO sales executives have been trained to use direct selling as tool for building long lasting relationship with the customers. Easy access to customers to seek assistance makes proposals send comments and compliments. MARKET DEVELOPMENT BSL has valued customers group in identifying their specific needs Specific to that group thus segmenting and developing market segment for our products. Major product modifications are done as per their specific needs of the Market segment thereby creating product differentiation packages. PRODUCTION ACCORDING TO MARKET NEEDS BSL is always in touch in market and try to produce according to market needs. BSL tries to produce quality products / new products which fulfil the need of market. STOCK REDUCTION Giving facilities like door delivery, road dispatches, credits facility and rounds the clock stockyard operation. PRICE FIXATION Pricing is done basically by the CMO. Taking into consideration cost of production, government steps on pricing, certain percentage of profit, price of raw material fright charges etc. i.e. pricing is COST PLUS PRICING.
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DESPATCH As the product is manufactured, this department directs the stockyards the mode of transport to the destination with reference to dispatch program and dispatch advice is mode. DOCUMENTATION With the dispatch of product the Finance department calculates the total cost of product as per demand order. Certain receipts and bills quoting the material code, nature, quantity, and all expenses are sent to connected stockyard. The product will be then released to the concerned person after proper and complete payment to the pay-in- authorities is made. CHANNELS OF DISTRIBUTION It refers to the set of interdependent organizations involved in the process of marketing a product or a service available for use or consumption. FUNCTIONS OF DISTIBUTION CHANNEL 1. It solves geographical distance. 2. Helps to move from producers to customers. 3. Helps producers not only in the distribution of goods but also in promoting the sales of products. 4. Assumes risk connected with carrying. 5. It communicates with consumers and producers. 6. It creates various utilities. 7. It ensures success of other marketing activities. 8. It helps to stabilize price by stocking adequate goods. 9. It forecast demand. STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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FUNCTION OF STOCKYARDS
i) Keeping records with regards to receipt of materials with description of size, quality and quantity etc. ii) Issuance of loading slip on receipt of delivery order from the branch. iii) Loading of materials in the customer truck/trailer free of cost. iv) Issuance of delivery challans-cum-invoice for the quantity delivered. v) Handing over Test Certificate to customer along with challans. vi)Submission of stock statement to the branch.
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RMD is planning to expand capacity in view of the enhanced production plans of the steel plants and cope with the requirement of high quality iron ore. The Lime stone quarries under RMD are located at Kuteshwar, Purnapani and Bhawnathpur. Dolomite quarry is at Tulsidamar. RMD has centralized workshop at Bolani for repair/overhauling of engines & transmission of heavy earthmoving machinery operating at the mines. Besides the above, RMD has three customer service office at Rourkela, Durgapur and Bokaro for coordination with the steel plants. Two liaison offices are also maintained at Bhubaneshwar and New Delhi for better coordination with government agencies and other statutory authorities. IRON ORE MINES
Mines State Annual capacity (MT)
Kiriburu Jharkhand 4.25
Meghahatuburu Jharkhand 4.30
Bolani Orissa 3.00
Barsua Orissa 2.01
Kalta Orissa 1.15
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CENTRAL COAL SUPPLY ORGANISATION Situated at Dhanbad in Jharkhand, the Central Coal Supply Organization (CCSO) of SAILs Operations Directorate, is entrusted with the vital responsibility of ensuring daily movement of around 12000 tons each of washed coking coal and power grade coal to all sail steel plants.
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PROCESS FLOW CHART-BRANCH SALES OFFICE SAIL, KOCHI
YES
NO
ANNUAL DEMAND ASSESMENT PLANT PRODUCTION AVAILABILITY OF STOCK MONTHLY DEMAND FORECAST SALES PLAN ORDER STOCK CUSTOMER ENQUIRY CUSTOMER ENQUIRY CUSTOMER CONTACT READY STOCK PLANNING ISSUE OF OL/SO BRQ MP AT SRM STTR DESPATCH FROM OTHER WAREHOUSE DD ORDER MP AT SRM DESPATCH SETTLEMENT OF QUALITY COMPLAINTS ISSUE OF REFUND/CRDDIT NOTES RECEIPT AT WAREHOUSE DELIVERY OF MATERIAL DESPATCH DOCUMENT NEGOTIATION STEEL AUTHORITY OF INDIA LTD. SCHOOL OF MANAGEMENT STUDIES, CUSAT
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PROCESS FLOW CHART FOR DELIVERY OPERATIONS: WAREHOUSE/SAIL/KOCHI
MATERIAL DELIVERY ISSUE OF LOADING SLIP VECHICLE INSPECTION & ENTRY GROSSWEIGHT OF VECHICLE ISSUE OF CHELLAN/INVOICE LOADING IN VECHICLE TYRE WEIGHT OF VECHICLE MATERIAL VERIFICATION RELEASE OF VECHICLE
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CONCLUSION
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CONCLUSION The main objective of the study were to understand marketing activities and distribution channel of branch sales office of SAIL, Cochin. From the study it is clear that the advertising, competitors, customers, product delivery and other processes in delivering the products of SAIL to the customers. As conclude, let us hope that SAIL will become the leader of steel production in near future and may they can their position to the India s largest steel producer.