Marketing Strategic Planning of Secondary Product at Bhilai Steel Plant by Kamal Patil

A PROJECT REPORT ON
MARKETING & STRATEGIC PLANNING OF SECONDARY PRODUCTS

AT STEEL AUTHORITY OF INDIA LTD. BHILAI STEEL PLANT.
SUBMITTED TO UNIVERSITY OF PUNE
BY KAMAL PATIL MBA - II (2004-2006)
VISHWAKARMA INSTITUTE OF MANAGEMENT PUNE - 411037
A PROJECT REPORT ON
MARKETING & STRATEGIC PLANNING OF SECONDARY PRODUCTS

AT
STEEL AUTHORITY OF INDIA LTD. BHILAI STEEL PLANT.
SUBMITTED TO UNIVERSITY OF PUNE
BY KAMAL PATIL MBA - II (2004-2006)
VISHWAKARMA INSTITUTE OF MANAGEMENT PUNE - 411037

I N TR O D U C T IO N TO T O P IC
In today s competitive world where cutthroat competition exists, everyone wants to know their position, their strength an d weaknesses. So it is veryessential to know opportunity to targ et the potential market, capture the market, evaluate and form the marketing strategies. Marketing strategy is anelement of the overall strategy of organization. It is a way through which companies achieve their goal, or in others words, it is the comple te unbeatable plan designed especially for attaining the marketi ng objective ofthe firm. The marketing objective indicates wh at the firm wants to achieve.The marketing strategy provides t he path and design for achieving them. They are normally arranged in accordance with the guidelines provided bythe company objective and company budgets. Bhilai Steel Plant is the steel manufacturing plant. The m ain productsof plant are Rail Tracks, Billets, Blooms, Plates, Wire Rods, and Angles. While the production of primary products there are generatio n of some by-products or secondary products. These secondar y products also sold in the market and make a huge amount of revenue. The quantity of thes e materialsis very high therefore it needs totally different mar keting strategy to sell inthe market.
This project was basically concerned to the trategic Planning of Secondary Product er of
Marketing & S
and collecting view of custom
secondary product, like problems face by them while purchasing these product, what are there expectation from Marketing Department. Overall, this
project suggests in the improvement of the existing marketin g strategy of secondary product and helps in eliminating the flaws in sale pol icy of Bhilai Steel Plant.
CERTIFICATE
This is to certify that this project titled Strategic
Marketing &
Planning of Secondary Productsat Bhilai steel plant, SAIL is a bonafide work carried out by Kamal Patil of MBA-II of Vis hwakarma Institute of Management for fulfillment of MBA degree of U niversity of Pune. He has worked under our guidance and direction. His wo rk is foundto be satisfactory and complete in all respect.
Prof. S. L. Joshi kar (Director) de)Date: Place: VIM, Pune
Prof. Rajesh Vhat (Project Gui Date: Place: VIM, Pune
COMPANY PROFILE
Steel Authority of India Limited (SAIL) is the lea ding steel-making company in India. It is a fully integr ated iron and steel maker, producing both basic and special steels for domes tic construction, engineering, power, railway, automotiv e and defenseindustries and for sale in export markets. Ranked amongst the top ten public sector compani es in Indiain terms of turnover, SAIL manufactures and sells a broad range ofsteel products, including hot and cold rolled sheets and coils, galvanized sheets, electrical sheets, structural, rail way products,plates, bars and rods, stainless steel an d other alloy steels. SAIL produces iron and steel at four integrated plants and thre e special steel plants, located principally in the eastern and centr al regions of India and situated close to domestic sources of raw mater ials, including the Company's iron ore, limestone and dolomit e mines. SAIL's wide range of long and flat steel products ar e much indemand in the domestic as well as the internati onal market. This vital responsibility is carried out by SAIL's own Central Marketing Organization (CMO) and the International Trade Divisio n. CMO encompasses a wide network of 38 branch offices and 47 s tockyardslocated in major cities and towns throughout I ndia.
With technical and managerial expertise and kn ow-how insteel making gained over four decades, SA IL's Consultancy Division (SAILCON) at New Delhi offers services and c onsultancyto clients world-wide. SAIL has a well-equipped Research and Developm ent Centrefor Iron and Steel (RDCIS) at Ranchi which h elps to produce quality steel and develop new technologies for the steel i ndustry.
Besides, SAIL has its own in-house Centre for En gineeringand Technology (CET), Management Traini ng Institute (MTI) andSafety Organization at Ranchi. Our captive mines are under the control of the Raw Materials Division in Calcutta. The En vironment Management Division and Growth Division of SAIL oper ate from their headquarters in Calcutta. Almost all our plants and major unitsare ISO Certified. 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 Special Steel Plants Alloy Steels Plants (ASP) in West Bengal Salem Steel Plant (SSP) in Tamil Nadu Visvesvaraya Iron and Steel Plant (VISL) in Karnatak a Subsidiaries Indian Iron and Steel Company (IISCO) in West BengalMaharashtra Elektrosmelt Limited (ME L) in MaharashtraBhilai Oxygen Limited (BOL ) in New Delhi
Joint Venture
SAIL has promoted joint ventures in different are as rangingfrom power plants to e-commerce. NTPC SAIL Power Company Pvt. Ltd Setup in March 2001, this 50:50 joint venture betwee n SAIL andthe National Thermal Power Corporation ( NTPC) operates and manages the Captive Power Plants-II of the Durgapur a nd Rourkela Steel Plants which have a combined capacity of 240 MW. Bokaro Power Supply Company Pvt. Limited This 50:50 joint venture between SAIL and the Damoda r Valley Corporation formed in January 2002, is managing the 3 02 MW power generation and 1880 tones per hour steam g enerationfacilities at Bokaro Steel Plant.
Bhilai Electric Supply Company Pvt. Limited Another SAIL-NTPC joint venture on 50:50 basis form ed in March 2002 manages the 74 MW Power Plant-II of Bhil ai Steel Plant which has additional capacity of producing 1 50 tones ofsteam per hour. UEC SAIL Information Technology Limited This 40:60 joint venture between SAIL and USX Engin eers &
Consultants, a subsidiary of the US Steel Corporatio n, promotesinformation technology in the steel secto r.
Metaljunction.com Private Limited A joint venture between SAIL and Tata Steel on 50:50 basis, thiscompany promotes e-commerce activities i n steel and related areas. SAIL- Bansal Service Center Pvt. Ltd. SAIL has formed a joint venture with BMW industries Ltd. on 40:60 basis to promote a service centre at Bokar o with theobjective of adding value to steel. North Bengal Dolomite Limited A joint venture between SAIL and West Bengal Mineral Development Corporation ltd on 50:50 basis was form ed for development of Jayanti Dolomite Deposit, Jalpaigur i for supplyof Dolomite to DSP and other plants. Romelt-SAIL (India) Ltd A joint venture between SAIL, National Mineral Devel opment Corporation (NMDC) and Russian promoters for mark eting Romelt Technology developed by Russia for reduc ing of ironbearing materials, which is carried out with carbon in single stage reactor with the use of oxygen. Ownership and Management The Government of India owns about 86% of SAIL's equit y and
retains voting control of the Company. However, SAIL, by virtue ofits "Navratna" status, enjoys significant op erational and financial autonomy.
B A C K G R O U N D & H IS TO R Y O F S A IL
ARichHeritage
The Precursor SAIL traces its origin to the formative years of an emer ging nation - India. After independence the builders of m odern Indiaworked with a vision - to lay the infrastru cture for rapid industrialization of the country. The steel sector was t o propel the economic growth. Hindustan Steel Private Limite d was set upon January 19, 1954. The President of Indi a held the shares of the company on behalf of the people of India. Expanding Horizon (1959-1973) Hindustan Steel Ltd. (HSL) was initially designed to m anage only one plant that was coming up at Rourkela. For Bhil ai and Durgapur Steel Plants, the preliminary work was done by the Iron and Steel Ministry. From April 1957, the super vision andcontrol of these two steel plants were als o transferred to Hindustan Steel. The registered office was originally in New Delhi. It moved to Calcutta in July 1956 and ultimately to
Ranchi in December 1959. A new steel company, Bokaro Steel Limited, was incor porated in January 1964 to construct and operate the steel plant at Bokaro.The 1 MT phases of Bhilai and Rourkela St eel Plants were completed by the end of December 1961. The 1 MT phas e of Durgapur Steel Plant was completed in January 1962 af ter
commissioning of the Wheel and Axle plant. The crude steel production of HSL went up from .158 MT (1959-60) t o 1.6 MT.The second phase of Bhilai Steel Plant was c ompleted in September 1967 after commissioning of the Wire Rod Mill. Thelast unit of the 1.8 MT phase of Rourkela - th e Tandem Mill was commissioned in February 1968, and the 1.6 MT sta ge of Durgapur Steel Plant was completed in August 1 969 aftercommissioning of the Furnace in SMS. Thus, with the completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkelaand 1.6 MT at Durgapur, the total crude st eel production capacity of HSL was raised to 3.7 MT in 1968 -69 andsubsequently to 4MT in 1972-73. Holding Company The Ministry of Steel and Mines drafted a policy state ment to evolve a new model for managing industry. The policy statementwas presented to the Parliament on Decemb er 2, 1972. On this basis the concept of creating a holding company to man age inputs and outputs under one umbrella was mooted. This led tothe formation of Steel Authority of India Ltd. The company, incorporated on January 24, 1973 with an authorized c apital of
Rs. 2000 crore, was made responsible for managing fiv e integrated steel plants at Bhilai, Bokaro, Durgapur, R ourkela and Burnpur, the Alloy Steel Plant and the Salem Steel Pla nt. In 1978 SAIL was restructured as an operating company. Since its inception, SAIL has been instrumental i n laying asound infrastructure for the industrial development of the country. Besides, it has immensely contributed to the
development of technical and managerial exper tise. It has triggered the secondary and tertiary waves of econo mic growth by continuously providing the inputs for the consumi ng industry. The New Millenni um SAIL today is one of the largest industrial entities i n India. Its strength has been the diversified range of quality ste el productscatering to the domestic, as well as the ex port markets and a large pool of technical and professional e xpertise. Having achieved the initial goal of laying the founda tion for theindustrial development of the country, S AIL took up the new challenge of facing the era of liberalized econo my and the emerging competitive scenario in the Steel market. O n the eve ofentering the new millennium, SAIL launch ed its Financial and Business restructuring programme. The strateg y includes a divestment of non-core activities, restructuring of marketing function and a focus on pruning cost of operation. Th e goal forthe company is to emerge as one of the lowe st cost producer inthe global steel market.
PLANT WISE
Bhilai Steel Plant
Blooms, Billets and Slabs bea ms Channels, Angles Crane Rails Plate Rails Pig Iron, Chemicals and Fertili HR Coils and Sheets Plates CR Coils and Sheets GP Sheets and Coils \ GC Sheet s
Bokaro Steel Plant
Durgapur Steel plant
Pig Iron, Chemicals and Fertili Blooms, Billets and Slabs bea ms Joists, Channels, Angles Bars, Rods and Rebar s Skelp Wheels, Axel, Wheel Sets Pig Iron, Chemicals and Fertili HR Coils Plates CR Coils and Sheets GP Sheets\ GC Sheets Tinplates Electrical Steels Pipes Pig Iron, Chemicals and Fertili zers
Rourkela Steel Plant
PRODUCTS Product type wise Semis Long Products Flat Products Blooms, Billets and Slabs Structural, Crane Rails, Bars, Rods And Rebar s, Wire Rods HR Coils, Sheets and Scalp Pla tes CR Coils and Sheets GC Sheets\GP Sheets and Coils Tabular Products Railways Products Tinplates, Electrical Steel Pipes Rails Wheels, Axels, Wheel set s
THE SEVEN C S OF SAIL

Consistent Quality Committed Deliv eryCustomized P roductsCompetit ive Prices Complaint Settlement Contemporary Products Culture of Customer Services
CONTENTS
TITLE E
EXECUTIVE SUMMARY INTRODUCTION TO TOPIC COMPANY PROFILE SCOPE OF WORK OBJECTIVE OF PROJECT WORK RESEARCH METHODOLOGY INFORMATION & ANALYSIS OBSERVATION & FINDINGS LIMITATIONS CONCLUSION SUGGETION BIBLIOGRAPHY ANNEXURE 01-02 03-03 04-21 22-22 23-23 24-24 25-34 35-53 54-54 55-56 57-58 59-59 60-67
PAG
I N TRO D UC TI O N TO TO PI C
EX EC UTI V E SUM M A RY
C O M PA N Y PRO FI LE
www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/
SC O PE O F WO RK
O BJEC TI V E O F PRO JEC T
I N FO RM A TI O N & A N A LYSI S
O BSERV A TI O N & FI N D I N GS
LI M I TA TI O N S
C O N C LUSI O N
RESEA RC H M ETHO D O LO G Y
A N N EX URE
SUG G ETI O N
BI BLI O G RA PH Y
E X E C U T IV E SU M M A RY
Progress is a continuous process. It is relative and absolute. We can t stopat a certain destination and declare that target ha s achieved and we need not go further. The summer training programs are designed to give the man ager of thefuture, a feel of the corporate happening and work cul ture. These real life situations are entirely different from the simulation exercise en acted in an artificial environment in side the classroom and it is precisely b ecause of thisreason that this summer training is a bridge betwee n the institute and organization. Summer training program made us to und erstand howtheoretical knowledge will be applied in pr actical field. It exactly in this context that I was privileged enough to joi n Bhilai Steel Plant, on 30
th
of May 2005, as a summer trainee. STEEL
AUTHORITY OF INDIA (SAIL) is ranked among the top ten pu blic sectorcompanies in India in terms of turnover. Bhilai Ste el Plant is one of steel plants comes under SAIL. It is symbol of Indo Soviet Techn o Economiccollaboration, is one of the first three integrate d steel plant set by the Government of India. It is also the known for its enlig htened andprogressive approach in steel making.
The experience that I have gathered over past eight weeks has certainly provided me with an orientation, which I believe, will help me,shoulder any assignment successfully in futur e.
In today s market where the customers are playing a majo r role andit s extremely necessary for an organization to see t hat their product provides complete satisfaction to their customer by fulfilli ng their needs.During this project I study the marketing stra tegy of secondary products of Bhilai Steel Plant. I was out for customer survey, to know th e problem facing by customers in local region. Also I tried to find out so me differentmarketing tactics and procedures, which will hel pful for Management and customer, both. All the information is not only collected by survey and wo rk visit but also by discussing with different managers in marketing d epartment of Bhilai Steel Plant. Also I have used all the relevant data which wereavailable in Bhilai Steel Plant. The rest of the report was done after a deep comprehensiv e and full-fledged study of the problem and is based on my orig inal research and investigation.
I N TR O D U C T IO N O F B H I LA I S T E EL PL A N T
INTORDUCTION The Bhilai steel plant was described by Late Mr. J L Neh ru randum of understanding) was signed with the Russian government for se tting up of the Bhilai steel plant. The first phase of 1 MT was completed i n 1959 andsubsequently capacity was expanded to 2.5 MT and 4 MT. Five time winner of prime minister s trophy for best integ rated steelplant in the country, Bhilai steel plant (BSP) is Ind ia s sole producer of rails and heavy steel plates and major producer of structur al. With anannul production capacity of 3.153 mt of salea ble steel, the plant also specialized in other products such as wire rods and merchant p roducts. Allsaleable products of Bhilai steel plant are under t he ISO umbrella as per BSP s accreditation with ISO 9001:2000 quality management s ystem standard. Plant s plate mill, Dalli merchandized mines and r ail mill havealso received ISO: 14001 certificates for their environment management system. PLANT LAYOUT An the unit of the plant have been laid in sequential forma tion jewe lin the crown of sail . For production of steel an MOU (memo
according to technological interrelationship, so as to ensure uninterruptedflow of in process material like coke, slag etc a nd to minimize the length of various inter plant connection utilities and services.
RAW MATERIALS BSP is primarily an ore based plant. The requirement of p rincipal ofraw material except coal and manganese ore is met f rom the captive minesof the plant. The plant owns and manage s the mechanized and manual ironore mines, at Dalli rajhara si tuated about 100 km away from Bhilai and a lime stone mine at nandini about 25 km away from plant. The plant alsoowns quarries or hirri, Chhattisgarh (for dolo-mi te), Over a million tones of minerals of mined annually from t he captivemines. SERVICES AND UTILITIES BSP is an integrated steel plant which requires various fo rms of energy like electricity, fuel (solid, liquid and gaseous), st ream, oxygen,compressed air, chilled water, air blast etc. Electricity power is supplied by BESCL (Bhilai elec tric supplycompany limited) a joint venture between Nati onal Thermal Power Corporation and SAIL from korba 250 km away from Bhilai. Water supply comes from a well constructed system of w ater worksof the state government tandula reservoirs, water from nearby rivers arebrought to two huge water reservoirs ( maroda tank 1 & 2) through a well laid canal, 60 km long from BSP. The other utility like gaseous liquid and solid fuels, ch illed water,steam, oxygen and compressed air are provided a t plant by centralized
utility services. There exist an extensive communication system at work a t work place which include an auto telephone exchange, dispatch co mmunicationsystem, gas and fire alarm signal, yard commun ication and automatic
signaling and blocking system of plant, rail transport facility andshop floor loud speaker system. MANAGEME NT Initially BSP was under the administrative control of t he ministryof iron and steel with powers delegated to the ch ief of the plant. Later Hindustan steel ltd. controlled the management which was f th ormed in 19 January, 1954 to manage Rourkela steel plant. Bhilai steel pl ant becomesthe constituent of Hindustan steel ltd. With the f ormation of steel authority of India limited on 24 y, 1973.
th
Januar
In the organization of BSP, the managing director is th e top mostauthority responsible for overall control. There are two executives directors one is for project and another is for works, with f ive generalmanagers. They are in following manner: General Manager General Manager General Manager General Manager General Manager In charge of work Project In charge of work Finance Mines
They have under them Deputy General Manager, Astt. Ge neral Manager, General Manager, Sr. Manager and Manager. Execut ive Directorhas the most important function of the second run
g, in the view of the factthat he is in the entire charge of the pla nt and is directly responsible for production. The Executive Director (project) has the respon sibility for allexpansion and constructive activities.
General Manager (Marketing Management) has the sole authority ofall purchases, stores, inspection, disposal and c onnected activities. General Manager (Finance) is directly responsible for efficie nt management of monitory resources, accounting and internal a udit.
THE QUALITY POLICY OF BSP
Adherence to a quality assurance management system.
Action of improvement of all concerned.
Adequate upgradation of knowledge and skill.
Achieving customer satisfaction if quality and schedule . PRODUCT MIX OF BHILAI STEEL PLANT Steel from BSP have always played a prominent role in f unctioningof ideal engineering industries, small scale steel maker, roller, foundries and forged shops, large scale fabrications, builders, the constructionindustries and Railways. BSP is putting on the market a wide range of rolled produ cts and insome of the products enjoys the status of monopoly. Bhilai has all along maintained its position as the most productive of India s int egrated steelplants. Its different product-mix is as follows
PRODUCT-MIX OF BSP :
Billets/Blooms (MM)
90, 100, 110, 150, 280,320
Slabs (MM)
195x1300, 195x1500 245x1500, 195x1250 , 320x1500
Narrow Slabs (MM)
200x250/320/410, 205x325/405
Rails
45 Kg/m, 52 Kg/m, 60 Kg/m
Crossing Sleeper Bars Angles (MM)
For Broad Gauge 50x50x5/6, 65x65x5/6/8/10, 75x75x5/6/8/10, 200x200x16/20/24
Channels (MM)
75x40, 100x50, 250x82,300x90, 400x100
Rounds (MM)
28, 32, 33, 36, 40, 42, 45, 47, 50, 53, 56, 60, 63, 67
Ribbed/ TOR Steel Bars Wire Rods 1. Plane coils 2. TMT coils Flats (MM)
28, 32, 36, 40
5.5, 6, 7, 8, 10 8, 10, 12 Width: 50 -120 Thick: 8 - 20
Plates (MM)
Width: 900-3200 Thick: 7.1 to 120
Pig Iron sic
Various foundry & Ba Grades.
BY PRODUCTS Coke (MM) 5 Tar & Tar products 0-10, 10-25, 0-25 & +2
HP Napthalens, P itchcreosote oil, Dephenolised oil, So diumphenolate, Anth racene oil,Drained na phthalene oil, Crude anthracene, Lig ht oil
Processed Slag
Granulated Slag, Slag Aggregate
Benzol product
benzene, Toulene, Xylene, Solvent oil, H eavycrude benzol.
Hammer Plates Ammonium Sulphate
MAJORLANDMARKS:
Signing agreement for setting up the Plant 955 Commencement of work at site Feb 2, 1
May 6, 1956 Jan 31,
Commissioning of Coke Oven battery no 1 1959 Commissioning of Blast Furnace no 1 Commissioning of Power Plant no 1 -
Feb 4, 1959 June 4, 1959 Oct 11, Nov 12,
Commissioning of Steel Melting Shop no 1 1959 Commissioning of Blooming Mill 1150 stand 1959 Commissioning of Billet Mill 9 -
Dec 24, 195 Oct 27, 1960 Feb 2, 1961 July 3, 1961 Sep 1, 1967 Mar 31, 198 July 29, 198 Mar 15,
Commissioning of Rail & Structural MillCommissioning of Merchant Mill Commissioning of Sintering Plant no 1 Commissioning of Wire Rod Mill Commissioning of Plate Mill 3 Commissioning of Converter no 1 4 -
Commissioning of continuous Casting shop 1 1986 C o m m i s s i o n i n g o f S M S F i r s t T u r n H e a r t h6 Commissioning of Blast Furnace no 7 7 -
Sep 12, 198 Aug 30, 198
Commissioning of Coke Oven Battery no 9 1988 Commissioning of Second Twin Hearth Commissioning of Third Rwin Hearth 2 -
Mar 31
jan1, 1990 June 29, 199
AWARDS:
National Energy Conservation Award Minister of Power, Mr. S. Prabhu. 99 from Honorable
Best Pollution Control Implementation Gold Award Instit ute of Lal Bahadur Shastri Memorial National Awards for excellence in dustries. Best Performance Award to Dalli Mechanized Mines.
PM s Shram Vir Award 2000 to Shri J. S. William, Sr. o perator, CCS,by Hon ble Prime Minister on 4-02-02 at New De lhi. PM s Shram Bhushan Award ees from Blast Furnace. 2001 to a group of 5 employ
Vishwakarma Rastriya Purashkar 99 th ant on 17 Sep 2001. Prime Minister Trophy 1992-93 1993-94 1995-96 1996-97 1997-98
to employees of the pl
Best Integrated Steel Plant Award
National Level Coal India Productivity Award mant Kumar Desai, Additional Chief Industrial Engineer.
to Shri He
4 Collective & 7 Individual Awardsfor the year 1999 to BSP o n Safety,Health and environment in Steel Industry.
S C O PE O F W O R K
This project is dealing with one of the largest steel plant in India. Although it only concern with marketing department of Bhila i Steel Plantbut it s itself a big opportunity for anyone to cov er the every single corner of marketing department because Bhilai Steel Plant ha s vast number of employees, working in marketing department. The scope of thisproject is not only concentrated on marketing de partment of Bhilai Steel Plant but also deal with its existing industrial customers. SCOPE OF WOR K: MARKETING DEPARTMENT OF BHILAI STEEL PLAN T 15 EXISTING INDUSTRIAL CUSTOMERS WORK VISIT NOTES OF BHILAI STEEL PLANT
ACKNOWLEDGEMENT
I take this opportunity to thank all those individuals and groupswithout whose support this project could never have been completed. I would like to thank our Honorable Director Mr. S. L. Joshi andproject guide Prof. Mr. Rajesh Vhatkar who gave me this opportunity. My special thanks to Mr. D. S. CHAWLA (Sr. Manager, Ma rketing & SP, BSP) and Mr. AYAN MISHARA (Manager, Secondar y Product,BSP) without whom this project could never ha ve been completed. This acknowledgement can never be completed without thanking tothe employees of Marketing & Strategic Plannin g department of Bhilai Steel Plant and all other people who have been associated dire ctly or indirectly with my project and helped me in getting it in the pr esent form.
DATE:
Mr. Kamal Patil
O BJ EC T IV E O F PR O J EC T
The objective of this project is to analyze the working c ondition ina government organization. Apart from this, othe r major objectives are
To Analyses secondaryproducts. To understand Marketing strategy ofsecondary p roducts. To Know theSales planning for secondaryproduc ts. To Know theDistributionmethodsofsecondary p roducts. To Collect theCustomersFeed Back.
R E SEA R C H M E TH O D O LO G Y
BSP had a wide network within country. To analyze t he report certain methodology were used to elaborate the topic in easy way.The design of a research study is based on the pur pose of the study. Methodologies which were used are: SAMPLIN G
An integral component of a research desig n is the
sampling plan. Sample size, which was taken for the rese arch, is sixdepartments in marketing branch of BSP. STRUCTURED QUESTIONNAIRE Structured questionnaire was prepared a nd surveymade with the customers of secondary product of BSP at local region. FORMAL & INFORMAL INTERVIEW Formal and Informal interviews were m ade withthe different managers of marketing department. DATA COLLECTION Various data are collected from different sources.Sources of these data are various government publ ications, trade journal, official website of SAIL, and various publication of BSP.
M A R K E TI N G N E TW O RK
CENTRALMARKETINGORGANIS ATION
Central Marketing Organization (CMO), one of t he largest marketing networks in the country, markets mild steel prod ucts from thefour integrated steel plant of SAIL. The CMO h eadquarter is at kolkata and the commercial directorate is located at New Delhi. A nation-wide network of regional offices, sales offices and several strate gically placed warehouses is further supplemented by consignment agents a nd authorizeddealers to meet the demands of the smallest cust omers in the remotest corners of the country. CMO maintains its aggressive market ing efforts inorder to retain market leadership by meeting cus tomer s requirements andevolving strategies to increase sale s. In order to strengthen the marketingapproach and initiate product and segment specialization, CMO has been reorganized on the basis of long and flat products. Likewise, Key Account Management process (KAM) has been implemented in CMO to provide better service, quality and tailor made products to key Custo mer through asingle windows. This is being followed by the Customer Satisfaction Index (CSI) to increase responsiveness to customer needs. Yet another significant development had been re-oriented of the sales braches andwarehouses. This will enable the marketing t
eam to concentrate on building customer relationship to provide them better servi ce, along withthe best quality. Dealer development, especia lly in rural areas, is being aggressively pursued by CMO to reach out to the farthest co rners of thecountry. This wide network of authorized deale rs also helps meet customers demand for steel in small qu antities.
INTERNATIONALTRADEDIV ISION
International Trade Division (ITD) of CMO manage s exports of mild steel products and maintains close liaison with buyers abroad. ITD has been successful in making SAIL steel, a familiar nam e across the continents. Sail s reputation as a producer of quality steel products hasbeen established in as many as 70 countries ar ound the globe. Notable among them are JAPAN, EGYPT, UK, ITALY, RUSSIA, SRI LANKA,BANGLADESH, TAIWAN, MYANMAR and NEPA L. Transport and shipping division (T&S) of CMO performs the important f unctions ofensuring proper dispatch of export material a nd timely import of rawmaterials to keep SAIL plants goi ng.
BRACH SALESOFFICE/SALESRESIDENTMA NAGERS

This office is related to the sales of the prime produc ts of the Bhilai steel plant, which acts as an interfacing body betwee n the BSP &Centralized Marketing Organization (CMO). Th e different issues relatedto the products and its delivery is d ealt indirectly with BSP through thisdepartment. We can sa y it coordinates about production and dispatch in different Steel plants. CMO has got SRM offices at the follo wing placesi.e. Bhilai, Rourkela, Bokaro, Durgapur.
FUNCTION OF BRACH SALESOFFICE (BSO)

Booking of order from customers on long term and short t erm basis.Passing details of booking to concerned Sales Resident Managers office.
The movement plan of the products which consist all the d etail related to the products quality, quantity and size are s ent by thisoffice to the plant. The meeting related to the sale of the produc t is doneintermittently. The customer complaints are also handled by plant th rough thisbranch sales office with proper channel of meeting.
SALES & DISTRIBUTION OF SECONDARY PRODUCTS
SELLING OF SECONDARY PRODUCTS:

This involves a direct marketing process. The mana gement of BSP in consultation with the officials of the market developm ent and customer service department works as group for the sale of t hese items.There are 2 methods of selling these re-rollable s defective materials. BY FIXED PRICE SA LEBY TENDER BY E-AUCTION
FIXED PRICE SALE

The re-rollable material is sold through marketing department. The percentage of material to be sold by E-auctio n or by marketing department depends upon the management decisio ns. There aredifferent re-rollables materials coming from fo ur different mills that can be sold. The pricing of these materials is carried out by the pri cing committee depending on: The price offered by the customers during auc tion sale.The quantity to be sold The approval of the managing director. The market price of the particular m aterial.The price offered by the com petitors.
BY TENDER
The secondary product which are generated while process ofmanufacturing the primary product is also sold by the tender option. In this way of selling the secondary product, the marketing depar tment of secondary product releases the tender with number of quanti ty to be soldand the minimum price can be offered and accord ing to the application which received against the tender notice, material sell to t he particularcustomer.
BYE-AUCTION
E-AUCTION is the internet based selling method of secondary products. In this method, there is the online biding auction done over the company s website. Applicants can offer their pr ice money with the particular quantity they want. Applicant can be anyo ne across thecountry and can participate in the auction. After closing the date of auction within 5 working days the final customer s name decl ared on thewebsite based on the price money offered by them . They are invited for the further process of purchasing material.
PROCEDUREAPPLIED FOR SALE OF SECO NDARYPRODUCTS

After obtaining approval of quantity and price for sale, Marketing Department scrutinizes the demand from various parti
e s , e x a m i n e t h e p r i o r i t i e s a n d i s s u eO f f e r L e t t e r s espective parties. The
to r
terms and conditions for sale are also enclosed with the Officer Letter .
About one third of the actual quantity of material to be s old duringthe year is offered to the actual users, subjec t to registration of deman d. For the balance quantity to be sold at prices fixed b y pricing committee, preference is given to actual uses over trad ers. If theirgiving preference to registered traders ov er others. First preference is given to the actual users for allotm ent of scrapagainst particular category of users; scrap processing units are given second preference for such all otment. The amount received from the party towards advance pa yment andsecurity deposited is forwarded for finance department by marketing department after recording the details in t he register.Parties are allowed to visit the respectiv e location/disposal sitesand inspect the scrap offere d for sale. Marketing department prepares sale order for the parti es who haveaccepted the offer. Sale orders are issued p arty wise and category wise i.e. individual sale order covers such categories li ke CL scrap,Rerollable, Sludge and waste products. The sale order is carried over to the next ye ar. Based on the deposit made by the party, finance de partment
intimates to marketing department release of requisi te scrap forsupply. Marketing department prepares r elease orders which aretreated by MRD as delivery or der. On receipt of release order, MRD plans number of truck s / trailorsto be entertained each day, after ascertainin g quantum of differenttypes of scrap to be issued per da y, number of trucks / trailors expected loading and weight facilities available e tc. MRD in consultation with marketing intimates to the parties, l ikely date ofcollection so as to deploy their fleet on th e dates.
Weight of each truck / trailors is taken before and aft er loadingunder strict supervision. Gate pass and other related documents are prepared by M RD to helpfacilitate.
REFUND OF SECURITY DEPOSITES

Party has to give an application for closing or canceling sales orderto marketing department. After receiving the application marketing departm ent preparesclosing / cancellation order within thr ee days of receipt of application and issue to all concerned agencies. Concerned department and Central Industrial Security F orce (CISF) issue No Due Certificate (NDC) and send to marketing d epartment.If NDC is not received in marketing departm ent within 10 days, itwill be considered that the concer ned department has no claim on the party and marketing department takes further nec essary stepsaccordingly. After receiving NDC from concerned departments, mark eting department issues letter of refund of security to finance department.Finance department verify documents and e nsure issue of cheques to party against refund of security within 7 working days .
DISTRIBUTION OF SECONDARY PRODUCT
The current procedure being adopted by Bhilai Stee l Plant forthe distribution of Re-rollables against the fixed p rice can be explained as:
Nearly 80% of the material available is offered to the actualcustomers / re-rollers and 20% to scrap processors and others. However, in the event of poor off take by re-roller / scrap processor, the s urplus available is offered to the traders as well but to a very limited extent. Thestatus of actual users/ re-rollers is decided on the basis of the necessary certificate issued by the Director of Industries of the state. W henever there is surplus quantity available and the material is hete rogeneous innature, the same is sold through auction / tend er on all India bases without making any distinction between the actual users and t raders.
M A R K E TI N G S C EN A R IO
Without a perfect market goods can neither be purc hased norcan it be sold. Marketing is one of the major and cru cial department pillars of every organization and it is the case with SAIL. Customer Satisfaction and quality assurance , t hese are the two motives of SAIL for achieving there goals and establ ishing theremarket. SAIL has a wide network across the cou ntry. It is having it s CMO for its marketing division. It s headquarter is situated in kolkata. BHILAI STEEL PLANT is one of the most important integrated steel plants of SAIL, which is earning profits for l ast 45 years.It has established its position through a better se rvice. BSP has several departments among which marketing division play a key role. Every planthas its own Branch Sales Officer (BSO) who looks upon the orders of CMO. These orders are then sent to the plant for checking the availabilityand production for dispatch. All departments ar e linked through Management Information System (MIS) from CMO to eac h and everydivision of plant. The whole procedure of BSP for marketing is, cust omer sendtheir enquiries including their requirement to CM O who looks the orders by order management system, which further send these requir ement to theregional office. Regional office sends the orders
according to different region to the BSO of each region. After checking of materials a gainst TDC booklets by the BSO and marketing division of plant it is send to thecustomers according to the quantity demanded, wi th the same channel through wagons and trucks as the case may be. The copies of i nvoice aresent to the customers and regional office concern ed which is ultimately deposited in the bank to get payment in case of credit sale.
FORMARKETING OF DIFFERENTITEMS THE THRE ETYPE OF POLICY ADOPTED BY BSP ARE:

Memorandum of Understanding (MOU): it is an agreem ent signedbetween the plant and customer foe assured quality and quantity.Annual Booking Selling: it is an i nformal agreement where customer assures the plant for purchase of certain amoun t throughout year. Spot Selling: in this case BSP release the tender an d asks forquotations to different customers.
D IF FER EN T S E C T IO N S O F B S P
DESCRIPTIONOF 2.5MILLION SECTION:

This section deals with the marketing procedure an d functionsof non flatable products. These include Wire Ro d Mill [WRM, merchantMill (MM)], Rail and Structure Mill (R & SM) and Billet and Blooming Mill (BBM). This section is headed by senior manager and his subordinates. This section has the job to look after all t he stages ofmarketing products. This section has to play an important role in the over all management procedure of marketing department. It is an inte grated part ofthe marketing department and contributes a lot t o achieve the laid target effectively. WIRE ROD MILL: This unit of Bhilai steel plant was commissioned on 1967 with a production capacity of 10,000 To 12,000 tones p.a. a s later on ithad gone for expansion with most improve techn ology. Different measurement of rods i.e. plain rods, rods coiled and of varyi ng thicknessare produced in the Wire Rod Mill. The orders ar e placed in every threemonths, semi-annually, quarterly or a s per the demand of the customers from CMO. On this basis the product are dispatched, if no t fully metrevalidated to a further period and if fulfilled then new orders are
entertained.
MERCHANT MILL: This unit of Bhilai Steel Plant was commissioned on 1961. By 1967 this unit was also undertaken for expansion with a targe t productioncapacity to part with 2.5 MT section. Some of the product of this unit is engaged with viz., Rounds, Channels, Angles, Ribbed Rods etc. some ofthe major users are Indian Railways, Local Indu strial Units, Heavy Industrial Units and other concern. These products are mostl y used whilerectifying the wear and tear of heavy equipment s or construction of structural in industries. The production quantity depends u pon the ordersplaced by CMO through DP (Dispatch Program ) which displays the allotment of different programs for each SAIL unit. RAIL & STRUCTURAL MILL: This giant unit of Bhilai Steel Plant was commission ed in1961 with 50,000 tones capacity. Later on the expansion of this unitgave an abundant production capacity of thous and tones of rails per month. From the past many years Bhilai Steel Plant has been th e major supplier of rails, beams, channels and other heavy structural t o the Indian Railways, Export Industry and other heavy industrial units . Bhilai Railsare in the great demand among south-east nati ons and middle-east countries. They have achieved high laurels excellence interna tionally.
Since the ISO certification of Bhilai Plates, the future plans are to set upthe rails on the tracks for ISO standards.
DESCRIPTIONOF 4.0MILLION SECTION:

This section of Marketing Department deals with th e marketing procedures of flattable products. Flattable produ cts viz., platesof varied dimensions, the major functions of t his section is performed by
CMO which assign the program to his section. The programs a re assignedbi-monthly, quarterly, half- yearly or annually a ccording to the demand. This section is a division of Marketing Department of BSP, it i s headed by Senior Manager and having a strength of 25-30 subordinate s. Marketingfunctions of both production units are looked a fter by this section. The production units are : STEEL MELTING SHOP - II (SMS - II) From SMS II the required steel either mild or speci al as perspecifications required is supplied to Plate Mill. He nce forth there is a close link between these two units. Any failure in the suppl y of steel to Plate Mill will hamper the production of plates which i s the majorcontributor to the profits on sale. STEEL MELTING SHOP - II (SMS - II) This shop was commissioned on 1984 with a producti on capacity of 4.0 mt steel, about 3.16 mt of saleable steel is ext racted from 3.25 MT of ingot steel & the remaining as core and by p r o ducts out ofthese 3.16 MT of saleable steel some ratio quant ity will be special steeland the rest mild steel on treatment. Plates of different measurement as per demand are produced from mild steel and special steel. S pecial steel
plates are mostly supplied to key customers and exported. Co re materialsand by- products which can be used to produced o ther products are supplied to concern production unit. Non-usable viz., Fly a sh, Slag, Iron Fillings etc. are dumped out and sold in the loca l market.
PLATE MIL L This shop was commissioned on with a production c apacity ofapproximately 4.0 MT plates per annum. This mill h ad brought high laurels for Bhilai Steel Plant. With its maximum production capacity andproducts of excellent quality it has earned ISO 9001-2000 certification. This unit is among of the production departments in the BS P which hasfully computerized operations. Before the pro duction of plates, it is formed out of thick slabs which are produced with crude stee l. The slabsare exposed to necessary treatment of required c omposition, quality, anddimension. Going through all thes e process, finished plates are finally produce d. DESCRIPTION OF SECONDARY SALES SE CTION Secondary sales section started functioning after th e commissioning of Bhilai Steel Plant. This section controls t he marketing of core products and by- products. These products continuous ly evolve outas no separate productions are made. Some of the by-products viz. slags; fly ash, coke, iron scrap, steel scrap, iron fillings and cutt ings etc. arecontinuously produced out. The potential mar ket is spread out in Maharashtra, Andhra Pradesh, Madhya Pradesh and Chhat tisgarh. This
section also functions a responsible role in selling out these by-productsin the ideal market and some far placed industri es too. Some of the potential buyers of these products are Cement Industr y, chemical Industry, Fertilizer Manufacturing units and some eng ineering and Fabrication units. Some of the products are dumped in hug e amount as such this section holds auction sale for needy customers on spot prices. There is good demand for coke among the other local industri es, engagedwith production of industrial products includin g Railways.
M A R K E TI N G D EP A R T M ENT
The marketing of prime products of all the steel plants of SAIL ishandled by the CMO (Central Marketing Organiza tion). The marketing department of BSP is entrusted with the job of co-ordination b etween the CMO and the plants as well as the marketing of secondary prod ucts and by products for ease of functioning; the department is divided into varioussections.
A.MARKETING AND STRATEGIC PLANNING

Handling of Customer Complaints: in case of any c omplaintby customer. The complaint is sent to GM and the particularmill. The CMO has an applicatio n engineer group for commercial settlement which inspects the mate rial and if found defective; adjustments are made in the paym ents or thematerial is taken back. If the quantity of goods is large, then a plant also inspects the g oods. Customer Feedback : Customer feedback is tak en by thissection on a periodic basis in the form of customer satisfaction feedback reports. A four point feedb ack is takenfor increasing market share and for cu stomer retention. The basis pointers of the report are past performan
ce, sectorgrowth, financial performance and p urchases from othersuppliers of steel. For maj or customers, there is a Key Accounts Manager , who handles them. This i s done to provide a single window service to these c ustomers ISO Activities: the various documents pertaining to ISO activities are handled and managed here.
Training: This section also overviews the training o f new recruits, summer trainees in the marketing departm ent. MIS reports Product Development: The Management Research G roup at CMO (kolkata) studies the market demand and suppl ies, feasibility for which is checked at the plant and fur thered forapproval. Strategic Planning : This section ascertains the pr oduct mix,quantum of exports, monthly tonnage a nd other parameters for the plant according to the demand. Audit Applies : This division also coordinates t he variousaudits that are undertaken.
B.EXPORTS
The International Trade Division of CMO is the main b ody that handles exports of steel in the SAIL. BSP has been a major e xporter inthe past. Rails have been exported to over 50 cou ntries. Currently, plates constitute the major exports item. Some semi fini shed goods,light structural and wire rods are also expor ted. The procedure of
exports is as follows : The International buyer sends an enquiry to the ITD for the availability of goods. This is sent to the plant for c hecking ifthe asked grades and dimensions are fea sible.
If the response to the inquiry is positive then a lette r of creditis issued in the name of the buyer and a dea l is signed specifying all the terms and conditions. The ITD gives a contract to BSP in the form of a work order which is processed here and sent to the mills for prod uction. After production of goods a DISPATCH advice is s ent to theproduction department, after which the g oods are certified and tested. The goods are usually sent to Vizag for e xport. The plant gets exemption from sales tax for goods meant forexports. At the port the various formalities are completed rel ating to : i. m iii. iv. Marine insurance Bill of loading (which gives possession of go ods to theshipping company). After receipt of goods, payment is received throug h the bank.The SAIL overseas account is at SBI kol kata. Export lice GR for
nseii.
COAL CHEMICALS
Ammonium sulphate Benzol products Crude tar and tar products
Overall there are 18 major products of which 3 products i.e. DPO, DNP and HB are sold only to limitedcustomers. Till 1999, the sale of coal chemicals was handl ed by the CMO. The production of Benzol is 1000 tones wh ile the storage capacity is only 300 tones. Therefore for t imely saleof products, sale of coal chemicals are places under the jurisdiction of the individual plants.
PROCEDUREOF SALE :
By February, the availability for the next financial year is estimates. A list of all the customers of coal chemicals is prepa red and the customers intimate the section about their requi rements. According to the requests submitted, the various cu stomers are told the quantities which will be provided to the m. To buy a product, a security has to be deposited. The buyers arrange transport. In case of low sales volumes, to ensure tim
ely sale,products are also sold through MOU. T he advantages of signing MOU are that the quantity of supply is assu red and atthe end of the year a 1% discount is given o n the total sale.
Other methods used for sale are auctions ( throughwww.metaljunction.com) and tenders .
C.SECONDARY PRODUCTS AND BBM:

Some of the secondary products are BF slag, defecti ve, refractory bricks, flue dust, scrap rolls etc. the sale o f secondaryproducts is done by floating tenders and f orward auction. Due tosurplus capacity of blooms and billets, they are sold in the market as semi finished pro ducts. D. R SM, MM AND WRM : All these mills are producers of prime products; th erefore thesale of these products is overseen by the CMO. T he procedure for booking of orders is as follows: The customer contacts the nearest BSO office and pl ace orders. The order is sent to the CMO which sends it to the pla nt for checking availability and other parameters. A contract is signed with the customer for the supply of
goods which gives all the details of the products, di mensions,place and mode of dispatch etc.
After the goods have been produced, they are tran sported tothe stockyard and the CMO asks the cust omer to collect thegoods after payment of the bill s. E. SALES RESIDENT MANAGER : There are four SRM s located at the four integra ted steel plants. The SRM acts as an interface between the CMO an d the steelplant. The roles of the SRM are: To check the availability of materials in the plant an d to oversee the increase in production. To make the final rolling plan. To dispatch materials as per orders To prepare demand forecast every month.
SECONDARY PRODUCT
IN BHILAI STEEL PLANT, THE FINISHED PRODUC TS ARECATEGORIZED IN TO THREE PART. PRIME PRODUCTS: These are actual products which are originally producedfor e.g. Blooms, channels, rounds, angles, TMT ba rs, wire rods, rails, structure etc. BY PRODUCTS: These products are not originally produced by Bh ilai Steel Plant, but are the outcomes while producing the prime product s.
SECONDARY PRODUCTS
This is the defective or rejected materials due to impro per mixingof chemicals components or fails to meet the opti mum requirements. Scrap generated inside Bhilai Steel Plant is termed as second ary products.The secondary products use here is ferrous mate rials generated from various production unit which can either suitably be used for remelting toproduce iron and products or offered for sale if r endered surplus in the production process, for e.g. Defective Heavy Blooms, Def ective Rails,Rail cutting, Rod cutting, scrap etc. DETAILS OF SECONDARY PRODUCTS:
Defective Heavy Blooms. Defective Billet / Billet cutting.
Defective slabs. Plate Mill side shear ing.Defective Rails . Rail cutti ng.Rod cu tting. Plate cutting. Defective plates. Rolled slab from Blo oms.Slags. Coke fraction COAL CHEMICALS. Benzene. Naphthale ne.Xylene . Solvent o il.Pitch. Sodium Phenot ate.Wash oil. Drained Naphthalene oil ( DNO)De penalized oil (D PS) Heavy Benzol ( HB)Toluene. Steel Bottom oil Light creosote oil
Heavy creosote oil Antracence oil
DETAILSOFSCRAPANDTHEIRHAN DLING
PCM SCRA P: This is the scrap generated in the pig casting mac hine and consists of splashing PCM runner, fires and weight ra nge of up to 1.0 tone per pie ce. BF RUNNER SCRA P: Generated in blast furnace cast hous es in theform of runner jams etc. The maximum weight p er piece is up to 2 tones. This scrap contains certain amoun t of slag. UNPROCESSED STEEL SKULL SC RAP: Generated in steel melting shops in slag cups and metal ladles. As the skulls are quite broad in dimension, so me of themare required to be cut into sizes suitable for loa ding into trucks. Theseskulls are in two weight ranges: 7 to 15 tone s. Above 15 tone s. SBIM SCRA P:
This consists of semi broken ingot mould and
bottom plate scrap and is in weight range of up to 2 tones per piece. TURDISH SKULLS: This is generated at bottom of turdish during p ouring ofsteel in continuous casting. The weight of skull vari es 2 to 3 tones.
CAST CHILL S:
At continuous casting, in case of emergency, th e extra
metal ladle is pour into containers and this is termed as cast ch ills. It is rectangular in shape. The weight of each piece range from 7 to 25 tones. CI SKULL SCRAP: These are skulls generated in ladle repairs shop and blastfurnace processing Shop. The skull contains some s lag. Bigger skull require cutting for accommodating in trucks. COBBLED SCRAP: The cobbled scrap arises from wire rod mill and includessome rejected coils and binding wires also. REJECTED ROLLS: Cast iron, rejected steel rolls. MILL CUTTING: Rail and structure mill cutting, Billet cutting, Bloom cutting, Merchants mill cutting, Plate and shearing, rejected slabs cutting,misrolled slabs, wire rod cutting are included i n the type. SECONDARY PRODUCTS CAN BE UTILIZED IN TWO WAY S: By Re-rolling of secondary pro
ducts.By selling of secondary products.
BY RE-ROLLING OF SECONDARY PRODUCTS. NAME OF THE MACHINERIES: The steel Re-rolling mill requires the following ma chineries toproduce re-rollable materials from the mild s teel scrap: - Main motor connected with pulley and V- Delt s. - Fly- wheel as per the requirement and size of t he mill. Pinion gear Box consisting of three gears. Five stands which are situated in the shed fo r rollingof hot scrap up to the finished prod uct. - Furnace the size of the furnace varies from 30 ft. To 40 ft. in length, 6 ft. width and 8 ft. height with acoal chambers or oil fired chamber. MANPOWER REQUIREMENT: In each re-rolling mill a foreman is very nec essary tomaintain the machines and to produ ce a good qualityproduct. To assist him ther e should one section man and one fitter. Furnace requires one worker for pushing the materialinside the furnace two worker for p ulling out the rolls.
From stand 1 to stand 5 nine worker are requ ired forpushing the metal in the rollers. Th ey work for only four hours out of eight hour. So about ei ghteenworkers are needed to work on o ne shift.
PROCESS OF MANUFACTURING: The scrap for the re-rolling is generally from BSP r ailways. These materials are not directly re-rollable so first it is requi red to make are-rollable and of proper size as per the requirem ent of the finished products. In the recent years a number of foundries and re-roll ing mills came into existence throughout the country. These small scal e sector needthe Secondary product l for their production. The company has engaged in educating them how to use secondary p roducts for different kind of end products for consumption. This mat erial is thencontinuously passed from one stand to other uni t till finished product comes out. The rolls are provided with the groove as per the requi rement ofthe finished products. as input, raw materia
P R O D U C T S F O R T H E R E - R O L L I N G MI L L S
Over the year a number of re-rolling mills\ steel proce ssing mills and trading companies have come up in and around Bhil ai. The rawmaterial need of these mills being met by the plant and the availability ofthe re-rollable have increased the re-r olling mills to develop very fast. The plant extends all type of facilities and assistance to thes e small scaleunites which in turn give scope for more employ
ment. M.S .Squares, Angles, Channels, Flats, Rounds, Z-S ections, U-Sections, T-Sections. Cold Twisted Deformed (C .I.D)TOR Steel.
Beams.
Strip s.Hoo ps. Rectangular B ars.Railway Se ctions.Windo w Sections.Pi pes.
NECESSITYOFSELLINGTHE NDARYPRODUCTS
SECO
The net sales realization from all the secondary pr oducts, by products and co- products of Bhilai Steel Plant is around Rs . 600 croreswhich Is quite more than many of the big industri es. Out of which the steel scrap arising itself bring about Rs.150-200 crores of mo ney every year. Re-production of main products these secondary produc ts requires remelting it again for the require composition of the materia ls as per thedesired specification. By selling it to the different mill/ traders/ processors t he plant getsaround Rs.4000 per tone of direct profit then by r eproducing it to the main product. By using these materials traders/ processors/ re-rolle rs makes rawmaterials for different finished product, whic
h also making huge profit and plant is not losing anything. Profit is the aim of the every business, and when the reutilizationof these products for the finished products prov es to be cost lies, the management plans to sell it to the local market.
SYSTEM OF REGISTRATION OF DEMAND IN BHILAI STEEL PLANT

Marketing department of BSP sells homogeneous steel at fixed
pric e.
The procedure of registration is as follows. Preference for sale of secondary products is giv en to localparties. Secondary products are sold f or trade. Sale of material made to re-rolling mills and scrap processingunits. For sale of secondary products er Registration Certificate Final allocation to the party is made on basis on t heir pastperformance. offer lett is issued toparty off
ering quantity, formality is submission of DIC
PROCESS FLOW CHART: BHILAI STEEL PLANT
L IM ITA TIO N
There are certain limitations I had faced during my sum mer project,which are
IT S VERY HARD TO TAKE APPOINTMENTS OF EVER Y MANAGER OF DIFFERENT DEPARTMENT DUE TO THEIRBUSY SCHEDULE. CUSTOMERS ARE SCATTERED OVER A LARGE AREA THEREFORE HARD TO CONTACT. CUSTOMERS ARE RELUCTANT TO PREVAIL THEIRINTERNAL INFORMATIONS.
CONCLUSION
BSP has faced large ups and downs in terms of their produ ctivity and profitability, in these 46 years. Its continuous improve ment in termsof quality is one of the flagships for the SAIL. Bhilai s contribution in terms of materials, money and men has been comm endable. BSP has faced the problem of coal products in last year bu t still it has maintained its productivity as per the plans and schedule s. Believing,the work to be completed with the help of teamw ork. BSP has gained a huge net profit of Rs. 2148 crore in the year 2004 -2005. Thanks to modernization and maintenance that has changed the fort une of BSP. With the new challenges, changing market and environm ent BSP hassufficient capability to look further for the future to gain profits. It is backed up by the chief asset and has a strong and capable team who has acaliber to face any obstacles. BSP has implemented numerous steps for strengthening i ts fundamentals such as continuous cost reduction, technology improvement,lowering borrowing level, persistent efforts t o bring about a positive attitude towards organizational goal among employees thr ough plannedcommunication, training, optimum utilizati on of resources. Commenting on the cost reduction strategy of the organiz ation
Managing Director Mr. Rajendra Prasad Singh says,
As th
e steel horizonbrighten up after a long period of bloom, Bhila i must make the most of itand emerge as a leader. A true leader has to be alert and proactive all the time formulating strategies to Out perform the compe titors cost reduction is one of the such strategies that can give us that c ompetitiveedge.
It is the renowned efforts of the BSP organization which h as success in economizing usage, optimizing resources elimin ating wastageof all kinds, concentrated on growth quality p roduct and service which ultimately helped in cost of product to earn great amount of profit everyyear. Bhilai rededicates itself to the service of the nation, whose hand child it is. A new and glorious era leading to the gold has just begun andhorizon is bright.
S U G G ET IO N
As BSP itself one of the most recognized and leading ste el industryin India. Its products are of high quality and it is s old not only in the domestic area of the country but its products are also exporte d to foreigncountries. Keeping these in view it is not possibl e to give suggestion about BSP as it is one of the leading steel producers of cou ntry. But I would like to give suggestion to BSP only that it should i ncrease its customer s base and market in the domestic area also. Secon dly, BSP ismajor contribution to export is Rail Mill produc ts, so it should also payhis attention to other products also. On the other hand, Marketing of Secondary products need s some attention from top level management. This department is pro ducing greatamount of revenue every year but again there are some problem facing bylocal customers. As per the survey on various consumers of secondary product at local area it shows that BSP s has some drawb ack in itssecondary product s marketing strategy. As per feedback from various local customers of seconda ry product,they think that BSP is not giving the proper attenti on to local customers and ignores their needs. Apart from that refund policy o f secondary product is also not mature; it takes very long time to refund the excess money, given by the customers. Some customers are not sati sfy with the
E-Auction policy, they think that the final declaratio n of selected customers announce in 5 days after the biding close, which is against therule of E-Auction method. Even some customer th inks there is partiality exist in selection of customer in Tender & E-Auction method as they arenot selected many times even after biding high pri ces.
So I would like to suggest marketing department of secon dary product that they should take corrective steps against all abov e problem faced by local customers and gives an extra attention to local c ustomers.
StepstoImprovetheCustomer SatisfactioninLocal r egion (under100 KMradius)
UniformPricingPolicy TightentheRefund Method RegularFeed Back System Reducing theNo.of DayofdeclaringFinalCusto merinEAuctionmethod. Increasethedaily quotaofsale.(which curre ntlyis200tones)
BIBLIOGRAPHY
SAIL News Journals Annual Performance Plan 2004 2005
Information collected by Marketing Department. Work visit notes of BSP Data collected by different customers. Official website of SAIL : www.sail.co.in
QUESTIONNAIRE
What the total num. Of employees working in your company? 1. Less than 50 2. 50 100
3. more than 100 What is the annual requirement of input materials (raw) in tones? 1. Less than 500 tones 2. 500 1000
3. more than 1000 From last how many years your company purchasing materials from BSP? 1. Less than 3 years. 2. 3 7 years
3. more than 7 years Categorized the input materials purchased from BSP and corresponding quantity? 1. Billets & Blooms 2. Wire rods 3. Slabs 4. Scraps 5. Coal Chemicals
Is your company purchase material from other organization if yes then type of materials and quantity? 1. Yes 2. No Whether the company is engaged in other business apart from steel, if yes then what is that? 1. Trading 2. Distribution 3. Production Whether the company prefers purchasing material through fixed price / tender or forward auction? 1. Fixed Price 2. Tender 3. Forward auction Difficulties encountered by the company in conducting business with BSP? 1. Yes 2. No Major drawback of the BSP s sale policy in sale of secondary product and suggestion for any improvement you want? 1. Partiality 2. Ignorance 3. Pricing policy
Apart from purchasing steel what are other input expenses are incurred by your company? 1. Electricity 2. Water 3. Gas 4. Chemical 5. All of above Whether the end product is sold through retail outlets / direct sold to end customer, i.e. marketing network of the organization? 1. Retail outlet 2. Direct sold 3. Auction method Whether the company is engaged in trading also, if yes, then what percentage of steel purchased from BSP is used for production and what percentage is for trading? 1. 10 % to 25% 2. 25% to 50% 3. More than 50% Long term plan of the company, if any (like expansion, capacity enhancement, shifting over to other input materials etc.)? 1. Yes 2. No
List of the end products manufactured and cost of production (rs/tonne) of each end product? Selling price of each end product over the past 2 years?
C o m p a n y p re fe rs p u rc h a s in g m a te r ia l th ro u g h f ix e d p r ic e , te n d e r o r fo rw a rd a u c t io n ?
EAuction
Tender
Fixed Price
Fixed Price Tender E-auction
62 % 20 % 18 %
How many customers faced difficulty during transaction with Bhilai Steel Plant.
YES
NO
No difficulty Yes
71% 29%
M a jo r d ra w b a c k o f B S P s sa le p o li c y in sa le o f se c o n d a ry p ro d u c ts , c u s to m e rs th in k s .
Pricing policy
Partiality
Ignorance
Partiality Ignorance of lo customers cal Pricing policy
57 % 34 % 9%
Categorized the input materials purchased from BSP and corresponding quantity?
Coal Chemicals
Billet & Blooms Slabs Wire Rods
Scraps
Coal Chemicals Billets & Blooms Slabs Wire Rods Scraps
9% 8% 15 % 12 % 56 %
Whether the end product is sold through retail outlets / direct sold to end customer, i.e. marketing network of the organization?
Retail Outlet
Auction Method
Direct Sold
Auction Method Retail Outlet Direct Sold
2% 22 % 71 %
Whether the company is engaged in other business apart from steel, if yes then what is that?
Trading Distribution
Production
Trading Distribution Production
11 % 12 % 77 %

Marketing Strategic Planning of Secondary Product at Bhilai Steel Plant by Kamal Patil

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Marketing Strategic Planning of Secondary Product at Bhilai Steel Plant by Kamal Patil

Uploaded by

Copyright:

Available Formats

A PROJECT REPORT ON

MARKETING & STRATEGIC PLANNING OF SECONDARY PRODUCTS

SUBMITTED TO UNIVERSITY OF PUNE

BY KAMAL PATIL MBA - II (2004-2006)

VISHWAKARMA INSTITUTE OF MANAGEMENT PUNE - 411037

MARKETING & STRATEGIC PLANNING OF SECONDARY PRODUCTS

STEEL AUTHORITY OF INDIA LTD. BHILAI STEEL PLANT.

SUBMITTED TO UNIVERSITY OF PUNE

BY KAMAL PATIL MBA - II (2004-2006)

VISHWAKARMA INSTITUTE OF MANAGEMENT PUNE - 411037

and collecting view of custom

This is to certify that this project titled Strategic

Prof. S. L. Joshi kar (Director) de)Date: Place: VIM, Pune

Prof. Rajesh Vhat (Project Gui Date: Place: VIM, Pune

Bhilai Steel Plant

Bokaro Steel Plant

Durgapur Steel plant

Rourkela Steel Plant

THE SEVEN C S OF SAIL

O BJEC TI V E O F PRO JEC T

of May 2005, as a summer trainee. STEEL

THE QUALITY POLICY OF BSP

Adherence to a quality assurance management system.

Action of improvement of all concerned.

Adequate upgradation of knowledge and skill.

90, 100, 110, 150, 280,320

195x1300, 195x1500 245x1500, 195x1250 , 320x1500

Narrow Slabs (MM)

45 Kg/m, 52 Kg/m, 60 Kg/m

Crossing Sleeper Bars Angles (MM)

For Broad Gauge 50x50x5/6, 65x65x5/6/8/10, 75x75x5/6/8/10, 200x200x16/20/24

75x40, 100x50, 250x82,300x90, 400x100

28, 32, 36, 40

5.5, 6, 7, 8, 10 8, 10, 12 Width: 50 -120 Thick: 8 - 20

Width: 900-3200 Thick: 7.1 to 120

Pig Iron sic

Various foundry & Ba Grades.

Granulated Slag, Slag Aggregate

benzene, Toulene, Xylene, Solvent oil, H eavycrude benzol.

Hammer Plates Ammonium Sulphate

May 6, 1956 Jan 31,

Feb 4, 1959 June 4, 1959 Oct 11, Nov 12,

Commissioning of continuous Casting shop 1 1986 C o m m i s s i o n i n g o f S M S F i r s t T u r n H e a r t h6 Commissioning of Blast Furnace no 7 7 -

Sep 12, 198 Aug 30, 198

jan1, 1990 June 29, 199

Best Integrated Steel Plant Award

Mr. Kamal Patil

An integral component of a research desig n is the

BRACH SALESOFFICE/SALESRESIDENTMA NAGERS

FUNCTION OF BRACH SALESOFFICE (BSO)

SALES & DISTRIBUTION OF SECONDARY PRODUCTS

SELLING OF SECONDARY PRODUCTS:

FIXED PRICE SALE

PROCEDUREAPPLIED FOR SALE OF SECO NDARYPRODUCTS

e s , e x a m i n e t h e p r i o r i t i e s a n d i s s u eO f f e r L e t t e r s espective parties. The

REFUND OF SECURITY DEPOSITES

DISTRIBUTION OF SECONDARY PRODUCT

FORMARKETING OF DIFFERENTITEMS THE THRE ETYPE OF POLICY ADOPTED BY BSP ARE:

DESCRIPTIONOF 2.5MILLION SECTION:

DESCRIPTIONOF 4.0MILLION SECTION:

A.MARKETING AND STRATEGIC PLANNING

C.SECONDARY PRODUCTS AND BBM:

Defective Heavy Blooms. Defective Billet / Billet cutting.

Heavy creosote oil Antracence oil