A PROJECT REPORT ON Marketing and Strategic Planning Of SAIL(BSP) & Customer Satisfaction Index BHILAI STEEL PLANT

STEEL AUTHORITY OF INDIA LIMITED BHILAI STEEL PLANT

SUBMITTED IN PARTIAL FULFILLMENT FOR IISCS (2009-2011)

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GUIDED BY: Rahul Arora

SUBMITTED BY: Vivek Kumar Gupta

STEEL AUTHORITY OF INDIA LIMITED

BHILAI STEEL PLANT

Certificate
This is to certify that the Project Report entitled Marketing And Strategic Planning Of SAIL (BSP) & Customer Satisfaction Index in BHILAI STEEL PLANT submitted by Vivek kumar Gupta for the partial fulfillment of IISCS Indore degree from University Of Sikkim manipal is a bonafide presentation under my guidance and supervision. I wish them the best of luck for future.

Guided By
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RAHUL ARORA INTERNAL GUIDE, BSP

DECLARATION
I VIVEK KUMAR GUPTA Roll no.520942762 student of MBA ivth semester of Department of Management Studies, Indore Indira school of career studies, Indore (MP) hereby declare that the project report on MARKETING AND STRATEGIC PLANNING OF SAIL AT BHILAI STEEL PLANT (BSP), is an original and authenticated work done by me. I further declare that it has not been submitted elsewhere by any other person in
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any of the University for the Award of any degree or diploma.

VIVEK KUMAR GUPTA

ACKNOWLEDGMENT
We would like to take the opportunity for expressing our sincere thanks and gratitude to Mr. Rahul Arora, Dy Mgr (M&SP), for his support and able guidance
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in giving us a detailed insight on marketing of secondary and by-products in Bhilai Steel Plant and for imparting knowledge and skills required for the successful completion of the project. We would also like to thank Mrs.Shusmita Dey (Secondary Product) & Mr.Rahul Arora (Coal chemicals) for their kind cooperation and giving us the detailed information about the marketing practices in the organization which were necessary for the completion of our project.

CONTENTS
CHAPTER -1 . Introduction . Organizational Overview 6 6 10 5

a) About SAIL b) About BSP CHAPTER -2 . Marketing in the organization CHAPTER -3 . By-Products . Secondary Products CHAPTER -4 . Analysis of C.S.I CHAPTER -5 . SWOT Analysis . Conclusion . 83 80 64 40

10 19 29 29

40 56

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80 81 Biblography

CHAPTER 1
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1. Introduction
During the last few years, measuring consumer satisfaction has acquired a very important role in organizational studies conducting by the marketing department of various organizations. Many companies have begun to appreciate consumer satisfaction as a key variable for gaining a competitive advantage.

The importance of studying and understanding consumer satisfaction is principally based on the impact of this variable on brand loyalty. In comparison to the innumerable efforts made to study the satisfaction of end consumers, very little has been done with respect to the study of the industrial buyers satisfaction. The business-to-business activity sector presents a series of particular features; for instance, the purchase decision process is a much more complex and formal than in the case of end consumer one. No further mention is made to a single person deciding, but to a buying center including several persons who bear upon the buying decision process on the other hand, industrial buyers are generally professional buyers who are technically competent.

Therefore, this project investigates the satisfaction of industrial buyers as well as the relationships between their perceptions of the product/service quality and their satisfaction and aims to find out the gaps existent in the current service provided by the plants.

Objective of the Study

The project mainly concentrates on the evaluation of the overall customer satisfaction level with the services provided by BSP to its secondary and byproducts customers.

The project report also aims at analyzing the existing gaps in the services provided by the plant to its customers on the basis of judging the satisfaction and importance level or say expectation level of the customer with that parameter of the service quality.

On the basis of servqual (service quality) model and the IP map the project aims at finding out the parameters which need to be concentrated on by the management in order to improve the satisfaction level of the customers with the overall services provided by the plant.

Research Methodology
a. Sample Selection
The project required gauging the satisfaction level of nearly 200 customers who are directly involved with BSP for the procurement of secondary products and by products produced by the plant in the process of generation of the primary products. For conducting the survey we selected a list of 25 customers as per our convenience with a good mix of customers of secondary as well as by-products so as to reflect the sentiments of the whole sample frame as closely as possible. The sample of 25 local customers in the Bhilai-Raipur region consisted of 15 secondary product based customers and 10 by-products based customers.

b. Data Collection
A questionnaire was developed as part of a larger effort to study the satisfaction of the customers with service levels of the plant provided to secondary and byproducts customers. The questionnaire included the eleven specific parameters identified from the literature which could best reflect the service quality. The respondents were asked to indicate, on a seven-point itemized rating scale, the level of satisfaction of each item in motivating them to have the perception of being satisfied (1 = highly dissatisfied, 7 = highly dissatisfied ) as well as to indicate th level of importance of the parameters on seven point likert scale
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where(1 = low, 7 = high importance level). In addition, they were asked to indicate, on a five-point scale, how satisfied they were with the overall service levels.

The survey required gathering of information about the current perceptions and expectations of the customers so as to have a good idea about the satisfaction level of the customers with the services of BSP and also have a good insight into the parameters that need improvement for improving the services further.

Since all the customers of BSP are linked to BSP through B2B interaction, so for collection of primary data we choose in-depth interview along with a questionnaire as the tool for data collection.

For the collection of secondary data we referred the SAIL website and the information provided by the marketing department along with the data available with the auctioning site which is in a joint venture with SAIL for the purpose of auctioning of secondary and by-products.

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2.Organization Overview
About SAIL

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. Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, galvanized 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 largest
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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 ranges 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 Organization (CMO) and the International Trade Division. CMO encompasses a wide network of 34 branch offices and 54 stockyards located in major cities and towns throughout India. 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), Training Institute (MTI) and Safety Organization 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.

VISION:

To be a respected world-class corporation and the leader in Indian steel business in quality, productivity, profitability and customer satisfaction.

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We still have a number of persons in our country in steel Authority of India Limited (SAIL).. They have the will to excel and transform the country, given a long term vision Dr. A.P.J. ABDUL KALAM

CREDO

We build lasting relationships with customers based on trust and mutual benefit.

Uphold highest ethical standards in conduct of our business. We create and nurture a culture that supports flexibility, learning and is proactive to change.

We chart a challenging career for employees with opportunities for advancement and rewards.

We value the opportunity and responsibility to make a meaningful difference in people's lives.
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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

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

Subsidiaries
Indian Iron and Steel Company (IISCO) in West Bengal

Maharashtra Elektrosmelt Limited (MEL) in Maharashtra Bhilai Oxygen Limited (BOL) in New Delhi

Background & History The Precursor

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SAIL traces its origin to the formative years of an emerging nation - India. After independence the builders of modern India worked with a vision - to lay the infrastructure for rapid industrialization of the country. The steel sector was to propel the economic growth. Hindustan Steel Private Limited was set up on January 19, 1954. The President of India held the shares of the company on behalf of the people of India. Expanding Horizon (1959-1973) Hindustan Steel (HSL) was initially designed to manage only one plant that was coming up at Rourkela. For Bhilai and Durgapur Steel Plants, the preliminary work was done by the Iron and Steel Ministry. From April 1957, the supervision and control of these two steel plants were also 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 incorporated in January 1964 to construct and operate the steel plant at Bokaro. The 1 MT phases of Bhilai and Rourkela Steel Plants were completed by the end of December 1961. The 1 MT phase of Durgapur Steel Plant was completed in January 1962 after commissioning of the Wheel and Axle plant. The crude steel production of HSL went up from .158 MT (1959-60) to 1.6 MT. The second phase of Bhilai Steel Plant was completed in September 1967 after commissioning of the Wire Rod Mill. The last unit of the 1.8 MT phase of Rourkela - the Tandem Mill - was commissioned in February 1968, and the 1.6 MT stage of Durgapur Steel Plant was completed in August 1969 after commissioning of the Furnace in SMS. Thus,
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with the completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela and 1.6 MT at Durgapur, the total crude steel production capacity of HSL was raised to 3.7 MT in 1968-69 and subsequently to 4MT in 1972-73. Holding Company The Ministry of Steel and Mines drafted a policy statement to evolve a new model for managing industry. The policy statement was presented to the Parliament on December 2, 1972. On this basis the concept of creating a holding company to manage inputs and outputs under one umbrella was mooted. This led to the formation of Steel Authority of India Ltd. The company, incorporated on January 24, 1973 with an authorized capital of Rs. 2000 crore, was made responsible for managing five integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and Burnpur, the Alloy Steel Plant and the Salem Steel Plant. In 1978 SAIL was restructured as an operating company.

SAIL Today
SAIL today is one of the largest industrial entities in India. Its strength has been the diversified range of quality steel products catering to the domestic, as well as the export markets and a large pool of technical and professional expertise. Today, the accent in SAIL is to continuously adapt to the competitive business environment and excel as a business organization, both within and outside India.

JOINT VENTURE
SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce.
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NTPC SAIL Power Company Pvt. Ltd.

Set up in March 2001; this 50:50 joint venture between SAIL and the National Thermal Power Corporation (NTPC) operates and manages the Captive Power Plants-II of the Durgapur and 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 Damodar Valley Corporation formed in January 2002 is managing the 302-MW power generation and 1880 tonnes per hour steam generation facilities at Bokaro Steel Plant.
Bhilai Electric Supply Company Pvt. Limited

Another SAIL-NTPC joint venture on 50:50 basis formed in March 2002 manages the 74 MW Power Plant-II of Bhilai Steel Plant which has additional capacity of producing 150 tonnes of steam per hour.
UEC SAIL Information Technology Limited

This 40:60 joint venture between SAIL and USX Engineers & Consultants, a subsidiary of the US Steel Corporation, promotes information technology in the steel sector.
Metaljunction.com Private Limited

a joint venture between SAIL and Tata Steel on 50:50 bases, this company promotes e-commerce activities in 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 Bokaro with the objective of adding value to steel.
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North Bengal Dolomite Limited

A joint venture between SAIL and West Bengal Mineral Development Corporation ltd on 50:50 basis was formed for development of Jayanti Dolomite Deposit, Jalpaiguri for supply of Dolomite to DSP and other plants.
Romelt-SAIL (India) Ltd.

A joint venture between SAIL, National Mineral Development Corporation (NMDC) and Russian promoters for marketing Romelt Technology developed by Russia for reducing of iron bearing materials, which is carried out with carbon in single stage reactor with the use of oxygen.
Ownership and Management

The Govt. of India owns about 86% of SAIL's equity and retains voting control of the Company. However, SAIL, by virtue of its "Navratna" status, enjoys significant operational and financial autonomy.

SAIL - Into the Future

Modernization and Expansion Plan of SAIL Corporate Plan, 2012

Corporate Plan, 2012 (CP12) was formulated in 2004 for 4 integrated steel plants for increase in Hot Metal production to 20 Mt by 2012. After merger of in IISCO Feb 06, the Hot Metal production Plan was revised to 22.5 Mt by 2012. Expansion of Special Steel Plants was also included. Besides capacity
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enhancement, the plan also addresses the need of SAIL Plants towards eliminating technological obsolescence, energy savings, enriching product mix, pollution control, developing mines & collieries to meet higher requirement of key raw materials, introduce customer centric processes and have matching infrastructure facilities in the Plant to support higher production volumes. Investment to the tune of Rs 34,982 crore was envisaged under the Corporate Plan.

Objective of Corporate Plan 2012

100% production of steel through Basic Oxygen Furnace (BOF) route 100% processing of steel through continuous casting Value addition by reduction of semi finished steel Auxiliary fuel injection system in all the Blast Furnaces State-of-art process control computerization / automation State-of-art online testing and quality control Energy saving schemes Secondary refining Adherence to environment norms

Expansion Plan, 2012

The Corporate Plan, 2012 was reviewed by Honble Minister of Steel in Jul06, wherein it was decided to take up the Expansion of Integrated Steel Plants and
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Special Steel Plant in one go basSed on Composite Project Report (CPFR). By that time Expansion of IISCO Steel Plant and Salem Steel Plant was already approved in-principle based on the Techno-Economic Feasibility Report (TEFR) of MECON. For the Expansion of other four integrated Steel Plants, MECON was assigned the job of Preparation of CPFR in Aug06. The CPFR for the four integrated steel plants was prepared by MECON. In principle approval has been accorded by SAIL Board for the expansion plans of IISCO Steel Plant (Jul06), Salem Steel Plant (Jun06), Bokaro Steel Plant (Dec06), Bhilai Steel Plant (Apr07), Rourkela Steel Plant (May07) and Durgapur Steel Plant (Jul07).

2006-07 Item
Hot Metal Crude Steel Saleable Steel

Capacity as per Expansion Plans 2010

26.18 24.59 23.13

(Actual)
14.61 13.51 12.58

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Plant-wise Capacity Envisaged After Expansion (Mtpa) Plant BSP DSP RSP BSL ISP SSP ASP VISL Total Hot Metal 7.5 3.5 4.5 7.44 2.91 0.33 26.18 Crude Steel 7.0 3.0 4.2 7.00 2.5 0.18 0.48 0.23 24.59 Saleable Steel 6.53 2.83 3.8 6.53 2.37 0.34 0.43 0.22 23.13

About Bhilai Steel Plant

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Bhilai Steel Plant (BSP) is a unit of the Steel Authority of India Limited (SAIL).Bhilai Steel Plant is a pulsating giant in the glorious Industrial context of India. It came into existence on10th June 1957.When concreting of the foundation of 1st Blast Furnace, but its original story started on 2nd Feb.1955 when the agreement with USSR Government prove the possibility of dreams come true .BSP the functionary of SAIL is a symbol of Indo-Soviet Techno economic collaboration, is one of the first three integrated steel plant set up by the Government of India to build up a sound base for industrial growth of the country. The agreement signed on 2nd Feb.1955 for 1MT production capacity, which rose to than 2.5 MT (1967) and than to 4MT in 1988. Production of Crude Steel per year. On 4th Feb.1959, our President, Dr.Rajendra Prasad dedicated Bhilai to the Nation, by inaugurating the Blast Furnace No.1 for production. Bhilai has never looked back has steadily grow and modernized day by day.
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Bhilai has all along been giving special attention to the employment to the weaker section. Bhilai has contributed signification to meet the Iron & Steel requirement of the country. The Steel Plant has 10 coke ovens batteries and 7 Blast Furnace. The plants get his requisition of raw material and necessary resources by various adjoining centers. The Iron ore is met from the captive mines, 100 kms. South from BSP. Limestones also come from the manual mines of Nandini about 25 kms. To the North of the plant. The need of Dolomite is fulfilled from the quarries of Hirri in Bilaspur District. Steel plant requires forms of energy, viz electricity, fuel (solid, liquid & gaseous), steam oxygen, compressed air, chilled water, air blast etc. At Bhilai main source of electricity in the C.S.E.B grid from the NTPC Korba Station, about 250 kms away. The steel plant has have their own capacity of generating electricity of 36 MW and 74 MW by power plant 1 & 2 respectively as the alternative source of power supply to meet emergency load in cases of interruption(s). The water source of the Tandula irrigation system from Sheonath River together with the Gondli and kharkhara water reservoirs situated about 70 km. south of the plant. In addition, water works has started on Mahanadi project for meeting the increased requirement of the plant after expansion. There exist extensive communication systems at the works, which include Auto Telephone Exchange dispatched communication system, shop-floor loudspeaker system, gas and fire signaling and blocking system of the plant rail transport facilities etc.Seven times winner of Prime Ministers Trophy for best Integrated Steel Plant in the country,
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Bhilai Steel Plant (BSP) is Indias sole producer of Rail and Heavy steel plates and major producer of structural designs. With an annual production capacity of 3,153 MT of saleable steel, the plant also specializes in other products such as wire rods and Merchant products. All saleable products of Bhilai Steel Plant are under the ISO umbrella as per BSPs accredit ion with ISO 9001:2000 Quality Management System Standard. The plants plate Mill, Dalli Mechanised Mines and Rail Millhave also received ISO:14001 certification for their Environment management system.

Performance highlights
Resolved, charged up and enthused to take their plant forward on its growth path, the Bhilai collective unleashed its potential to scale new heights of performance in 2008-09. Not just in volumes or techno-economics of production and development of new products but also in resource and cost management, knowledge & skill development of human resources, institutionalisation of Internal Customer Satisfaction systems, strengthening the Quality Circle movement and building strong customer-supplier partnerships, spreading the good cheer, all the while, to more homes and families. Operating above rated capacity in Saleable steel for the 16th successive year and surpassing the 5 MT mark in hot metal & crude steel production for the third time, Bhilai recorded its best ever production of 5.4MT Hot Metal, 5.2 MT Crude Steel and 4.5 MT Saleable Steel in 2008-09, registering growth of 2.3%, 2.6% and 1.4%, respectively over 2007-08. Remaining focused on reducing costs and generating surplus, the Plant further improved its techno-economics, reducing its dependence on imported coal, and
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increased volume of special steel grades with higher NSR to 63.3% from 48.5% in the last fiscal.The wisdom of successive leaderships to convert crisis to opportunity and carry out process improvements in a structured manner and a collective determination to stay at the top has ensured that nothing could arrest Bhilais growth path. The Plant has earned profits continuously for the last two decades, even during the last recession. Powered by high-level automation and integration of its business processes, Bhilai is now all set to join an elite club of leaner and smarter world-class manufacturers. Advancing from incremental to large-scale modernization, Bhilai has maintained course in its expansion plans, incurring a CapEx of more than Rs 800 crore in 2008-09.
Main Products Key Segment Railway Track Heavy M/c. Boiler & PV Line-pipe water Plates Line PipeCrude & Gas Construction/Fa brication Export Europe, Bars, Rods & Structurals FE Wire Rods Electrode Qlty Wire drawers Key Customers Indian Railways Thermax Limited Indian Oil Corporation Ltd. Essar,Ispat, Tata Bharat Earth Movers Limited Nagarjunha Construction Co. BPCL Larson & Turbo Ltd. Gammon India Ltd. KEC International 25 27.015 5.3% 5.598 22% Market Size (Million T) Rails 0.776 Market Share 100%

Construction TMT bars & Structurals

Limited National Thermal Power Corporation Ltd. Bharat Heavy Electricals Ltd.

Competitors

Ispat Industries Ltd. Alloyds Steel Ltd. Essar Steel Ltd. Jindal Steel &Power Ltd. Jindal Strips Ltd. Uttam Steel Ltd. Bhushan Steel & Strips Ltd.

National Steel Industries Ltd.

Products of National Importance

BSP has made immense contribution to the national economy by continuously upgrading the quality of its products to meet customer requirements. It is the sole supplier of rails to Indian Railways, and has supplied rails whose total length adds up to more than 7 times the periphery of the earth. It is popularly said that the nation moves on Bhilai Rails. In 2006 the first consignment of 260 meter Rails, the longest rail dispatched by any manufacturer in the world, was sent from Bhilai.

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BSP has developed the UTS -100 High Strength Vanadium Micro-alloyed rails for high density, heavy haulage routes. BSP has also collaborated with the Indian Navy for the development of DMR249A (ABA) grade steel for making the first indigenous Aircraft Carrier. The collaboration with the Navy is expanding and BSP is also making steel for manufacture of submarines. As Bhilai products are primarily catering to Infrastructure segment, they are being used in key applications of infrastructural development for sustaining the growth of the national economy. It is a matter of pride that BSP is key supplier of quality steel to many prestigious mega projects of the country. These infrastructure projects include rail lines, bridges, dams, air / sea ports, refineries, pipelines, stadiums, hospitals, schools, etc. More importantly many of these projects are bold intentions of the nation to make a difference in peoples lives. Some of the mega projects where Bhilai steel is being used are

Mega Infrastructure Projects using Bhilai Steel

Worli Bandra Sea link, 8 lane bridge

340 km J & K Rail link having 64 bridges Tsunami Rehabilitation Social Infrastructure Project

Barh power Project of NTPC (3x650) MW Windmills by Suzlon Lower Subansiri Power Project Assam-Arunanchal border by NHPC
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 Mumbai Airport Irrigation projects

Mahanadi Railway Bridge by Braithwhile Burn & Jessop Construction Company

Mejia Thermal Power station by BHEL in West Bengal

Bansagar Canal Project on Sone river Korba Power Plant

Delhi Metro

Achievements
Bhilai Steel Plant bagged the most prestigious Prime ministers Trophy Award 2004-05 for becoming the best among integrated steel plant. Out of 14 PMs Trophy awarded so far Bhilai Steel Plant has bagged it 7 times.

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5 Employees from Rail & Structural Mill bagged Prime Ministers Shram Ratna The highest Shram award. Out of total 15 awarded so far in the country, 13 awardees are from Bhilai Steel Plant. 11 Employees from Bhilai Steel Plant bagged PMs Shram awards in 2006. A total of 75 BSP Employees awarded with Shram Shree, Shram Veer and Shram Bhusan so far. 20 Employees were honored with the Rashtriya Vishwakarma award for the year 2006 - a total of 352 BSP employees have been awarded since inception. Bhilai Steel Plant bagged the Green Tech Silver Safety award, 2006 instituted by Green Tech Foundation. Bhilai Steel Plant is receiving this award for last 3 years in different sectors i.e. Steel sector in 2003-04, Metallurgical sector in 2004-05 & Mining and Metal Sector in 2006. BSP also bagged the Greentech Environment Excellence Gold Award for 2007 in Metal and Mining Sector.
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BSP bagged Greentech Platinum award in the year 2008 in Metal and Minning Sector. Ispat Suraksha Puraskar for the year 2005 & 2007 awarded to BSP by JCSSI. Bhilai Steel Plant has won Corporate Sustainability prize instituted by CII-ITC Centre of Excellence for the year 2006 & 2007 in the Independent Unit category for exemplary performance in environmental economic and social dimensions of sustainable development. Bhilai Steel Plant bagged the prestigious Indira Gandhi Memorial National Award - 2004 of Excellent Pollution Control Implementation Gold Award for Excellence in Indian Industries, sponsored by the International Greenland Society, Hyderabad. Golden Peacock Eco-innovation award 2006 has also been bagged by Bhilai Steel Plant. Bhilai Steel Plant bagged Golden Peacock Env. Excellence award 2007 BSP bagged Golden Peacock Award for Combating Climate change - 2008 Bhilai Steel Plant received IIM National Quality Award 2005 in the category of Integrated Steel Plant. Golden Peacock Award for the most innovative product was awarded to Bhilai Steel Plant in the 16th World congress on Total Quality (WCTQ 2006) BSP bagged Rajiv Gandhi National Quality Award for 2006 in Best of all categories. BSP bagged Golden Peacock National Quality Award 2006 & 2007. Bhilai Steel Plant was declared winner for HR Excellence Award by CII, Chhattisgarh. Golden Peacock Training Award for the year 2006 & 2008.
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CHAPTER -2
Marketing in the Organization
CENTRAL MARKETING ORGANIZATION(CMO)

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, 25 warehouses equipped with mechanized handling systems, 11 Customer Contact Offices and 16 Consignment Agents. CMOs domestic marketing effort is supplemented by its ever-widening network of authorized and rural dealers who meet 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 [-MO. The customerfriendly approach of CMO is backed by practical after- sales services. Through the process of Key Account Management, CMO provides single window service to key customer across the country for every business transaction from enquiry to

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order booking, order tracking to delivery, and even consultancy and after-sales services. Central marketing organization is the marketing unit of SAIL. The Central Marketing Organization (CMO) of SAIL was formed in 1963 when the public sector steel plants were managed by Hindustan Steel Private Limited. It caters to the domestic market and is responsible for marketing of all the products manufactured by all the steel plants of SAIL in a coordinated manner. The CMO undertakes marketing of materials produced by SAILs plant through a distribution network of 43 Branch Sales Offices (BSO), stockyards, dockyards, consignment agents and extension counters spread all over the country. Central Marketing Organization (CMO) and most of its divisions have their Headquarters at Kolkata and they reports to the Director headquartered at Delhi. However, departments like transport and shipping, export and etc. report to exchange to Executive Director located at Delhi.

Marketing Strategy
a) b) c) d) e) Ensuring dominant position in the Indian steel market Maintaining continuous global presence (around 10 % by sales value) Building & enhancing Brand Value of SAIL products Further thrust on Key Account Management process Gradual shift towards more of customers sales, as against traders sales

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f)

Trading of steel by sourcing from international sources, to enable packaging for key customers

g) h)

Popularizing SAIL products in the rural market Maximizing IT enabled customers service and interactions

Major Function
Market research, Demand Assessment, segment prioritization, product planning, sales and after sales services etc. CMO has a network of sales offices and stockyards within the country for purpose of distribution of materials outlets. The other aspects controlled by CMO are planning, customer services, transport and shipping data information system etc.The distribution of iron & Steel products is done by the CMO through 45 branches and stockyards located in all important steel consuming centers in the country. For administration purposes, the branches are grouped under 6 regions. The distribution through the stockyard is of the order of 69% and through direct dispatches by the plant 31%. They operate various schemes of the products is fast and the customer are satisfied.

Other important functions of (CMO):

CMO has got responsibility to sell Pig Iron & Prime Steel Products manufactured by BSP, DSP, RSP & having its headquarters at Ispat Bhavan, 40, Chowringhee Road, Kolkata-71.CMO has got 43 branches spread throughout the country with stockyard, for storing and selling of iron and steel materials produced by the plants.
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Each branch is headed by a Branch Manager having other colleagues including Finance executives to help Branch Manager in day to day operation. The entire network branches are divided into four regions as given below: Eastern Region Western Region Southern Region Northern Region

CMO has got transport and shopping determinants to handle the export and import consignments at different ports. These offices are at following places. Calcutta Chennai Paradip Haldia Visakhapatanam To coordinate about production and dispatches in different steel plants, CMO has got SRM offices at following places : Bhilai
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 Durgapur Roukela To take care of the exports, CMO has got office at New Delhi, There is separate fertilizers and chemical division to sell fertilizers and chemicals produced by the plants. There are three executives called as product executives for BSP they take care of separate division in BSP the main divisions being: Plate Mill Heavy Structure Structures

The movement plans are generated by BSO only. The main purpose of the movement plan is to give the commercial as well as the quality information of any particular transaction. This information is then sent to the M & SP department of BSP.

Various Divisions Of CMO

The following are the major divisions of the Central Marketing Organization:
1. Central Planning & Products Division:

The main function of the division is to

bring about coordination between the market demand and production of the steel plants. The four Resident Sales Mangers of the CMO located in four
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tonnage plants report to this divisions in respect of matters relating to marketing viz. movement, dispatches etc.
2. Alloy Steel Divisions:

This division looks after marketing of alloy and special

steel product manufactured by alloy Steel Plant, Durgapur and also coordinates sales efforts with Visvesvaraya Iron & Steel Co. Ltd (VISL), SSP and MEL.
3. Pipes, Electrical Steel Sheets & Tin Plates Division:

Headquarters of this set up is

located at Mumbai where majority of the customers for these materials are situated. These materials have to be marketed under highly competitive conditions. This division works out marketing strategies such as pricing, distribution system, storage and delivery facilities etc. This division has a field set up at each of the regional headquarters.
4. Market Management Group:

This group is headed by group market manager.

This group cosistes of market managers. Market managers are responsible for market strategy & planning in terms of sales, market share & profitability in a specific market segment.
5. Salem Steel Products Divisions:

This division headquartered at Chennai by

Salem Steel plant. They have field office at each of the regional headquarters as well as major consumption center.

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6. Marketing Services Divisions(MSD):

This division looks after the management

of this divisions is supported by a computer center where data on marketing operations throughout the country are processed on a regular basis to bring out periodical MIS reports. The responsibility of designing & implementing road movement, handling contract systems etc. is also with them. This division deals with formulation of polices on

7. Commercial Division:

distribution. This division also deals with parliament question on behalf of Central Marketing Organization.
8. Application Engineering Group:

This division deals with application about

selection of best suited raw materials, development of new products required by the market etc. It also undertakes technical inspection on behalf of the CMO wherever needed. The A.E. personal are posed at each regional headquarters.
9. Fertilizers and Chemicals Divisions:

This division is headquartered at Kolkata

and looks after distribution of Ammonium Nitrate products by Roukela Steel Plant and Ammonium sulphate produced by all the steel plants. This division has got offices at field location where the demand for fertilizers is substantial.
10. Market Research Group:

This division undertakes assessment of demand for

Pig Iron & steel products for long term perspective & advice management about the market. This division brings out periodic reports covering various
38

aspects of consumption, market condition, competitors activates etc. They have field representatives for collecting & forwarding market intelligence to the headquarters.

11. Transport & Shipping Department:

The department is headquartered at

Kolkata and has branch offices at major port areas. This division is responsible for handling imports & exports on behalf of SAIL. These divisions clear the coals imported of SAIL, at the ports and forward the same to various steel plants.

12. Finance & Accounts Department:

This department renders financial advice to

the line managers as well as CMO headquarters and maintains the accounts of the Organization covering Home sales, Transport and shipping exports, internal audit, etc.
13. Computerization Division:

This division is headquartered at Delhi and reports

to General Manager, This division is in change of the on going project for total Computerization of CMO at headquarters field offices and SRM in the plant location. At present this division is responsible for hardware and software maintenance also. Software Development Center at Hyderabad is engaged in developing and updating software required for CMO marketing.

39

14. Legal Cell:

This cell deals with all legal matters of CMO like court cases,

arbitration, examination of different documents for giving loans to employees for house building & renders legal advice on various transactions. This is headed by GM (Law) who reports to Director (commercial)

15. International Trade: This

department is headquartered at Delhi is Commercial

Directorate and is in charge of the export and import operations of SAIL.

16. Special Project Division: This

division is headquartered at Delhi and reports to

Director (commercials). This division deals with modernization of stockyards giving technical help and assistance to the stockyard in maintenance of handling equipment etc. This department also deals with construction of office building of CMO and acquisition / construction of residential accommodation etc.

BRANCH SALES OFFICE(BSO)

It is a part of CMO various BSO offices are located all over India which performs the job of marketing of SAIL products throughout the India. It receives the order from various customers, does market research, analyze competitive position, demand pattern etc.
40

SALES RESIDENT MANAGER(SRM)

BSO cannot directly contact with the plant for various dispatches & order, So SRM is basically a coordinator between BSO and plan, each plant has their SRM offices located near the plant premises for access of the orders.

Pricing Done By BSO

The prices for all products at BSP are done by the government of India. These prices are fixed and are quite economical for the customers as it is quite low as compared to the competitors.

Selling Methods
There are two methods for BSP:
1. Tender Pricing 2. E-auction

Types of Customers
There are two types of customers:
1. End user customers:

These customers basically use products in factory,

plants for power projects of other purposes like fabrication.

2. Traders: These

customers buy products from us and again sell them to the

end users.
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INTERNATIONAL TRADE DIVISION (ITD)

CMOs International Trade Division (ITD): In New Delhi manages exports of iron & steel products of Sails four main integrated steel plants and maintains close liaison with buyers abroad. ITD has successfully established SAILs reputations as a producer of quality steel products and a consistent supplier across the five continents. Among the notable destinations are China, Korea, UAE, Europe (UK, Italy, Spain & Germany), Taiwan, Japan, Thailand and Singapore as well as neighboring countries like Sri Lanka, Myanmar, Nepal and Bangladesh, etc. The critical function of ensuring efficient and proper dispatch of export materials and timely import of raw materials to maintain the pace of production of the SAIL plants is performed by CMOs Transport & Shipping Division (T & S) headquartered at Kolkata, T&S has branch offices at Haldia, Paradip and Vizag ports.

PRODUCT PROFILE-Bhilai offers a rich and varied product mix to the

domestic and international markets by different ways. They are divided into two categories, which is: 1. Prime Product 2. Secondary Product

Prime Product

42

 Billets/ square (MM) : 50,60,80,85,100,120,150,280,320

Rails (KG/Mtr) Crane rails (kp) :

: 45,52,60 80,100,120 : 50x50x5/6,65x65x5/6,8/10,75x75x6/8/10, 80x0x6/8/10, 90x90x6/8/10, 50x150x16/20, 200x200x16/20

Angle (MM)

Secondary Product
Coke fraction Slab Cast Iron Scrap Steel Scrap

Coal chemical
Benzene, Toluene, Pitch, Naphthalene, Flukes, Heavy Creosote Oil, Anthracene oil, light creosote oil ,hard granulate and liquid pitch, extra hard pitch, road tar, sodium phenol ate, xylene, fertilizer.

43

CHAPTER -3
4. By-Products
Categories of Coal Chemical Product

44

NBenzol oven Ammonium Light Product gas Benzene Fertilizer Tar Oil 2 Coke Gas Sulphate O2 Naphthalene Toluene Organ DPO Xylene DNO Solvent Oil HB Pitch BF Slag Light crude & Wash Oil Crude coal tar

45

USES OF COAL CHEMICALS PRODUCT

1.

Benzol

Benzene Nitration Grade

Specification (is 534-1974 g-1)

Co lour -not darken then a freshy prepared

Packing and delivery: railway tank wagons road tanker in loose

Common Uses
Lab school college and various laboratories

Various cyclice compound: aniline nitro benzene nylon-6, phenol, dicloro di floro hexa benzene (d.d.t.) benzene hea chloride,mono choloro benzene.

Raw material for various drugs and dye-stuff, synthetic rubber, styrene Nylon intermediates, resin intermediates
46

2. Toluene: Industries Grade

Specification is 536-1967-1

Colour not darken then a freshy prepared

Packing and delivery: railway tank wagons road tankers in loose

Common Uses

Rubber and paint industries as a synthetic enamale

Thinners and varnish Printing ink making

Organic compound : Benzoic acid, sodium benzonates, benzeyle chlorides, Solvent, artificial sweatings

Adhesive, synthetic fibers 3. Xylene

Common

Use

Rubber and paint industries : as a synthetic enamel Thinners and varnish Printing ink
47

 Pathetic & hydride

4. Light

Solvent (Naphtha)

Common Use

Solvent Thinners and varnish Printing ink making Starting material for dyes

5. Solvent Use
Common Uses

Solvent for resins and paints Thinners and varnish 6. Still Bottom oil
Common Use

Mixed with other material and is used for various miscellaneous purpose like Roof tar felting for after roofing Rubber paints industries
48

7. Pitch Packing Pitch is filled in drum Liquid pitch is filled in tankers Granulated pitch is filled in bags
Common Use

Used in smelt plant in aluminum industry as a binder material for anode used in manufacture of electrodes from pitch carbon

8. Hot Pressed Naphthalene

Hot pressed naphthalene is filled in bags. It is analyzed for crystallization temperature moisture content, colour and ash.

Common Use

Dye intermediates Insecticides as a preventive for month in the form of naphthalene balls

Dispersing agent tanning agent H acid

49

 Beta naphtha

Sodium napthionate Alpha napthol

9. Anthracene Oil
Common Use

Anthracene oil is an excellent material as a feedstock for carbon blank and gives better yield and quality of the finished product.

10. Light

Cresote Oil

Common Use

Carbon black feed stock=

11. Heavy Cresote Oil Common Use

Prevention of wooden sleepers by railways Carbon black feed stock

12. Sodium Phenolate

50

Common Use

The phenols liberated from the sodium phenolate are virtually free from neutral oils and pyridine bases and acan be used for synthetic purpose the quality of phenols is also very good for the production of high quality phenyl.

13. Dephenolate Oil Common Use

Naphthalene bearing feed stock Naphthalene and coal tar oils are separated and used for their specific end uses.
14. Drained Naphthalene Oil Common Use

Naphthalene bearing feed stock Naphthalene and coal tar oils are separated and used for their specific end uses.

15. Heavy benzol Common Use

Naphthalene bearing feed stock

51

 Naphthalene and coal tar oils are separated and used for their specific end uses.
16. Ammonium Sulphate Common Use

As a fertilizer

MARKETING STRATEGIES
Any organization before setting up the marketing strategies must be clear with some of the main point such as business, mission, external analysis, internal environment analysis, program formation goal formulation implementation and feedback. The marketing strategy for an industrial product is quit different from that of a consumer product. Therefore, marketing strategy of BSP product is very different. Certain strategies like advertising door-door survey a product demonstration not viable. The main aim is to maximize the recovery of realization. More consideration is given to: Potential Customer Fusible price Production good survey
52

 Thus marketing is a game plan to accomplish the objective of an organization. The various marketing strategy used by BSP are
Sifting Focus from Tonnage to Profit: BSP is now laying emphasis on profit rather

than on mass production. It has taken to production of product / goods according to the customer needs and demand.
1. Cost Control and Cost Reduction:

An intensive cost reduction drive yielded a

saving of Rs.900 cores in fiscal 1998-99 over and above the Rs.732 cr. achieved in the previous year. This was primarily due to improvement in operational year. This was primarily due to improvement in operational efficiencies increase in productivity at all SAIL. Plants and vetter purchase management of critical inputs.
2. Improvement in Techno Economics Better Product Mix, Yield and Quality:

BSP

has brought about improvement in techno economics better product mix yield and quality.
3. Production According to Market Need:

Production is done according to the

need an demand of the market.

4. Production of High Value Products:

Goods of high value are produced in BSP,

which are in great demand by the market.

5. Better Sales Realization:

Goods produced are to be immediately sold for the

smooth functioning of the organization. The marketing department tries to

53

sell most of the goods produces in the stipulated time. The quality and price of the products are good therefore there is better sales realization.
6. Just in time delivery:

BSP is able to make delivery just in time because it

work in pre-planned manner it takes order only after consulting the production unit. So that products can be delivery in the right time.
7. Better Project Management:

Modernization at Bhilai has been integrated with

the business strategy of the composed five projects at cost of approx 153.50 cores was completed during year.
8. Waste Management, Diversification, Joint Venture etc:

Besides the introduction

of environmental friendly. Technology is like coal dust injection system in blast furnace commissioning of centralized dusting system etc for waste management has been carried out by BSP, BSP is also diversifying in the areas like cement and power. It has also launched successfully joint venture in information technology with the USA.
9. Negotiated pricing:

BSP has started this strategy of fixing the price by

negotiation with the customers thus giving due attention to them.

10. Direct Dispatches:

Direct dispatches from the plants constituted 50% of total

sales with over 3.6 millions tones door-deliver to customer.

11. Appointment

of Authorized Dealers: Appointment of authorized dealers to

service the small, far flung & rural demands helped in enlarging the steel marketing & distribution network.

54

12. Marketing of New Product:

Taking advantage of the modern facilities

installed at its plant BSP marketed new product during the year like thinner, gauge, hr coils, 602 kg, rails wit less than 3ppm hydrogen, tuv certified plants, tmt bars etc.
13. Multiple Production Units:

As SAIL has no. of units/ steel industries,

customers can be assured about the delivery. Even if BSP fails to produce what it has promised to the customer, it can get it from its sister concerned and deliver it to the customer.
14. Competitive Price:

BSP prices are very competitive. It produces quality

product and they are priced worth there value.

15. Product Development:

BSP brings about a continuous development in its

product to suit the needs and demand of customer like change in chemistry, specification, composition etc. it also makes use of new technology for production.
16. International Standards:

BSP follows the standard set up by international

standardization organization likeISO: 9000 quality system etc. thus following quality management.
17. Customized Product Mix :

BSP as better product mix, which is also

customize. Therefore, it can easily produce from out side.

18. Export as a Strategy:

The Company has taken to exporting of its products to

create new market and demand for itself. Total export shipments by the

55

SAIL in the year 1998-99 crossed 4.9-lakh tone. Of iron and steel yielding foreign exchange earnings of Rs. 585 cores.
19. Sales Promotion:

The Company offer rebate to its regular customers and the

customer with whom it has mou. But this is not the case always.
20. Market Research:

BSP has its own research laboratory. It is modest but well

equipped research and control laboratory developed many new products during every year.
21. Other measurement:

Other measures includes complete package offering to

project authorities and increasing presence in the cold rolling segment, large dia-pipes segment etc. 22. Marketing of this department is not done by any other department, besides they have their own marketing department center of coal chemical, this department is governed by BSP itself. This department makes all the working like availability of material to the sale of materials. They book order on daily basis or on yearly basis. The department is also fies the price for the product and chooses mode of sale. The committee of BSP decides the prices at the stalling of the year and this price is called reserve price. The members of the committee are GM, DGM, and AGM. One member from plant and one member from finance department. Basically the marketing department of coal-chemicals has four main activities to perform, these are: 1) Direct Sales
56

2) Product development 3) Coordination between CMO & inside plant 4) Market development i. To check the feasibility ii. To look after quality control iii. To keep a track of data iv. To conduct meeting for likely demands.
SELLING PROCEDURE

Chemical products are through the following modes. 1. Memorandum of understanding 2. Fixed price basis 3. Online auction
1. MEMORANDUM OF UNDERSTANDING:

Under this section, an agreement is

signed between party and the regional manager concerned. As per the terms & condition of the agreement, the customer has to purchase the mentioned quantity every year. Tin-scheme is applicable for one to four years.
2. FIXED PRICE BASIS:

In this type selling price is fixed in advance by the

pricing committee, which are different customer. 3. Planning to fixed the price is done in the starting of financial year but it also changed according to the market demand like, if the market is high demand is more so according to price are also high sometime supply of coal chemical is also base on
4.

contact with the coal chemicals department and ask for the quantity he require and as the material availability and price rate. Supply is done. In this
57

selling, preference is given firstly to the government understanding, sister plant and regular customer of BSP.
5. ONLINE AUCTION:

along with all the terms and condition also. At the

starting of auction sale start bid is given by metal junction, which is nearly prevailing price in the market, and afterwards customer who has particular in auction sale can register them giving high prices through their user ID. All the indications of price Bavaria ions are shown in the screen of every customers and the time of auction sale the list of H-1.

Pricing And Promotion

Pricing of coal chemicals is mainly done on 2factors:

(1)Demand &supply

Is this price is decided on the basis of market demand .If the demand is high by charging the high price they make extra profit.
(2)Price of the competitors

Is pricing is done by pricing committee of B.S.P according to the demand of the product and the priced fixed by the competitors. Price revision is done once a month and also according to the fluctuations of the market situation .The committee which decides upon the price , comprises of the people from

58

department of rank not less than A.G.M .Here they are not comprising to sale the products. Coal chemicals product promotion is done through the direct customer contact .It is mainly seller market but sometimes due to shortage in selling, it also becomes a buyer market .However as per the requirements and sale the positions discounts and various schemes are offered to the customers . Broachers are used for ammonium soleplate .It is sold by name RAJA raja is brand name for SAIL fertilizers.

Distribution Channel And Transportation

Distribution is placed directly from BSP to the customers. For some products it is sold through traders also although BSP on its part sells the products directly to the customers, these customers may or may not be the end users of the product. Transportation is mainly done through road or rail. All the transportation charges are beard by the customers only. The customers are wholly and solely responsible loss or damage of the goods once sold. Once the product is sold, The marketing department sends the detailed information of the transportation to be used by the customer to lift the materials to the inside plain. Detailed like truck no. load permitted capacity are sent to the inside department.
59

Understanding The Customers

B.S.P has advantage of its location especially when it comes to sale of coalchemicals product. Raipur a big industrial hub of the chemicals factories.

First of all B.S.P caters the need of its sister concern are as follows: Rourkela steel plant. Durgapur steel plant. If there are any government requirements to government every case gets the priority. Next is the MOU signed customers followed by the regular customers .If alter all these B.S.P is still left with the goods they cater the demands of new customers. The B.S.P gives local customers priority over outside customers. Customer feedback is taken from time to time through telephones .Customer satisfaction has increased in past recent years .Many measures have been taken to realize this increase. Customization in pitch and benzol product has been done. Various modes of payment are as follows: Demand draft Pay order

Bankers cheque

Letter of credit

60

Competitors Of B.S.P In By Product

Tar coal

Vishakhappatanam plant Nilanchal nigam limited

Tata steel
Benzol

Hindustan petrochemicals Reliance petrochemicals Hindustan petrochemicals

Other sister plant of B.S.P

Rourkerla steel plant Bokaro steel plant

Durgapur steel plant TISCO

Foreign Competitors:

Foreign competitor sell their products through low price, credit selling and bulk through sheep. Some factors which affect is low price, product differentiation & credit selling.

The 7C SAIL that promote to the market as follows: Consistent quality

61

 Committed delivery Customized product Competitive price Complaint settlement Contemporary product Culture of customer service
SALES OF COAL CHEMICALS

Year Amt (in Cr.) Year Amt (in Cr.) Year Amt (in Cr.)

198384 16.7 199293 83 200102 90

198485 22 199394 75 200203 106

198586 21.6 199495 84 200304 143

198687 20.7 199596 100 200405 127

198788 25.75 199697 99 200506 140

198889 45.39 199798 83 200607 227

198990 50.53 199899 80 200708 245.7

199091 56.82 199900 80

199192 95 200001 107

62

300 250 200 Amt in 150 Cr. 100 50 0

19 83 -8 4 19 85 -8 6 19 87 -8 8 19 89 -9 0 19 91 -9 2 19 93 -9 4 19 95 -9 6 19 97 -9 8 19 99 -0 0 20 01 -0 2 20 03 -0 4 20 05 -0 6 20 07 -0 8

Year

5.Secondary Products
An Introduction
Secondary section started functioning after the commencing of Bhilai Steel Plant. The secondary product section of the marketing department is solely responsible for the selling of secondary products and by products of BSP. All the defectives/rejected items of this department except the rejected defective plates sells scrape. The defectives plates are sold by CMO (Central Marketing Organization) organization since December 2001. Secondary products are the defectives or rejected materials due to improper mixing of chemicals components or fail to meet the optimum requirements. Scrap generated inside plant is also termed as secondary products. The secondary
63

products used here in after will mean ferrous material generated from various production units which can either suitably be used for re-melting to produce iron and products are offered for sale if rendered surplus in production process for example. Defective heavy blooms, Defective rails, Rails cutting, Rod cutting, Scrap etc. The secondary product section of the marketing department is solely responsible for the selling of secondary products of BSP. All the defective/rejected items of this department except the rejected defective plates are sold by CMO (Central marketing Organization).

Necessity Selling Of The Secondary Product

The net scale realization all the secondary products, by products, and products of BSP is around Rs. 600 Crs. which is much more than from many big industries. Out of this scrap arising itself brings about Rs. 150-200 Crs. of money every year. Re-production of main products from these secondary products requires remitting it against for the required composition of the materials as per desired production. Profit is the aim of every business, and the re-utilization of these products for the finished products proves to costlier, the management plans to sell it to the local markets.

DETAILS OF SCRAP:

64

There are various types of scrap, which is generated from the particular prime products, Some brief summaries are following here:
I PCM SCRAPE

This is a scrape generated in the pig casting machine and consists of splashing, PCM runners and fires and is in the right range of upto 1 tone per piece
II BF RUNNER SCRAPE

Generated in the bf cast house in the form of runner jams etc. the maximum weight per piece is upto 2 tones. This scrape contains amount of slag.
III UNPROCESSED STEEL

Generated in the steel melting shops in slag cups and metal ladles, as the skulls are quite board in dimensions, some of them are required to be cut into sizes suitable for loading into trucks. These skulls are sold in the weight ranges.
IV BSIM SCRAP

The consists of semi broken ingot mould and bottom plat scrape and is in weight range of up to 2 tones per piece.
V COBBLED SCRAP

The cobbled scrap arises from iron rod mill and includes some rejected coils and binding wires also.

VI REJECTED ROLLS 65

Cost iron rolls, rejected steel rolls.

VII MILL CUTTING

Rail and structural mill cutting, merchant mill cutting plate end shearing, rejected slabs, slabs cutting miss rolled slabs, wire rod cutting are included in this type of scrap.

Manufacturing Process
The scrap for the re- rolling is generally received from the BSP railways. These materials are not directly re-reliable, so first is required to make a re-roll able and a paper size as per the requirement of the finished products. In the recent years a number of foundries and re-rolling mills came into existence throughout the country. The small scale sector need the secondary product as input raw materials for their production. The company has engaged in educating them the use of secondary product for different kind of end products for consumption of general
public. This material is then continuously passed from one stand to the other unit of the finished product.

Collection Of Scrap
I.All scraps identity the metallic scrap generated in the production process and lying in the shop. The shops collected the scrap with the help of overhead cranes and stock them for loading into wagons.
66

II.Rejected rails sleepers lying near the railways track inside the plant are collected at such points from here loading and collection by truck is possible. III.Crane facility is provided for loading the scarp into the track whenever cutting or processing not possible on the spot. IV.Marketing recovery department is responsible for over all co-ordination of scrap collection for the entire plant. For this each shop nominate one executive for ensuring the clearance of scrap from the shop. V.Head of the marketing customer service department requires. The progress on scrape collection on weekly basis. VI.MRD make suitable schedule for collection of scrap and intimates the date of collection to respective shops.

Processing Of Scrap
I.All the scrap which collection is not sold. Some of the scrap portion is used for the re-melting purpose, MRD identifies such scrap. It arranges collection handling and processing of all such scrap at various yards before sending in required quantity to the steel melting shop, converter shop and foundry. II.After such processing, MRD arranges supply of required scrap to respective consuming shops.

Planning For Sale Of Secondary Product

67

I. Marketing

recovery department (MRD) works out the quantum of different

types of scrap available for sale on monthly basis this is determined ascertaining the total scrap stock at the beginning of the month. Scrap arising during consumption. The remaining quality is considered for sale. A monthly report on availability of scrap is prepared by MRD and send to marketing department. II.Marketing department finalize the plan for actual quality of scrap to be sold in consultation with MRD. Mode of sale, terms and conditions for sale, locations and commercial aspects are finalize by marketing department. III.The pricing committee as approved by managing director fixes the price of each of the scrap. IV.Marketing department obtains MDs approved on price fixed by pricing committee.

Marketing Scenario
Without a perfect market goods can neither be purchases nor can it be sold. Marketing is one of the major and crucial department pillars of every organization and it is the case it SAIL. Customer Satisfaction and Quality Assurance, these are the two motives of SAIL for achieving their goals and establishing their market SAIL has a wide network across the country. It is having its CMO for its marketing division. Its headquarter is situated in Kolkata. Bhilai steel Plant is one of the most important integrated steel plants of SAIL, which is earning profits for last 45 years. It has established its position through a
68

better service. BSP has several departments among which marketing division play a key role. Every plant has its own branch sales officer (BSO) who looks upon the orders of CMO. These orders are then sent to the plant for checking the availability and production for dispatch. All departments are linked through management information system (MIS) for CMO to each and every division of plant. The whole procedure of BSP for marketing is, customer send their enquiries including their requirement to CMO how looks the orders by order management system, which further send these requirement to the regional office. Regional office sends the orders according to different region to the BSO of each region. After checking of materials against TDC booklets by the BSO and marketing division of plant it is send to the customers according to the quantitative demanded, with the same channel through wagons and trucks as the case may be. The copies of invoice are sent to customers and regional office concerned which is ultimately deposited in the bank payment in case of credit sale.

Secondary Sales Items

1) Defective heavy blooms 2) Defective rolled slabs from blooms & billet mill 3) Defective billet/billet Cuttings 4) Defective/Rejected Rails 5) Rail Cutting Incl. Crop. End 6) Rod cutting 7) Plate Mill side shearing 8) Plate mill end shearing CAT-I
69

9) Plate mill end shearing CAT-II 10)Defective/rejected CCS slab cutting 11)Iron Scrap and Other Items

Selling Of Secondary Products

The secondary products department has taken up the intiative to sell the products via auction only with effect from July 1st 2005.Earlier along with the auction method the fixed price method was also in use.

Online Forward Auction

For the auction sale, the customers have to log on to metal junction.com to bid for the product. There is no time period for the auction until the auction reaches to the high price. Auction sale is started at a fixed price and this price is fixed by Reserve Price fixation committee (RPTF). This committee sits one day of the auction to fixed reserve price. Following are the procedure in online forward auction1) The customer can view the instant bid price on the screen throughout the auction period. 2) Different auction is organized for the two stores. 3) The service of auction is provided by Metal junction.com 4) Items are sold in lot.

70

5) Before the auction money is deposited by all the customers participating in the auction. It is known as earnest money deposit. 6) After the auction the sale order is issued. 7) If the customer does not submit the money within the 7 days of sale order the EMD is not refunded and he is debarred for 3 months for auction.

Sample Selection The project required gauging the satisfaction level of nearly 200 customers who are directly involved with BSP for the procurement of secondary products and by products produced by the plant in the process of generation of the primary products.

For conducting the survey we selected a list of 25 customers as per our convenience with a good mix of customers of secondary as well as by-products so as to reflect the sentiments of the whole sample frame as closely as possible. The sample of 25 local customers in the Bhilai-Raipur region consisted of 15 secondary product based customers and 10 by-products based customers.

CHAPTER -4
71

ANALYSIS OF CUSTOMER SATISFACTION INDEX FOR PRIMARY PRODUCTS

The table below shows the average Customer Satisfaction Index for primary products (LONG Products & FLAT Products) for the last three financial years 2006-07, 2007-08, and 2008-09.

AVERAGE CUSTOMER SATISFACTION INDEX YEAR 200607 200708 200809 AVERA GE

LONG PRODUCTS QUALI DELIV SERVI AVERA TY ERY CE GE FLAT PRODUCTS QUALI DELIV SERVI AVERA TY ERY CE GE

92.69 91.77 93.89 92.78

88.42 87.85 93.82 90.03

93.69 94.89 96.15 94.9 1

91.60 91.50 94.62

97.62 98.82 99.44 98.63

83.55 88.22 84.46 85.41

92.58 91.06 95.76 93.1 3

91.25 92.70 93.22

From the above table, it can be easily concluded that satisfaction level of customer for Quality has increased over a period of three years for the Long as well as Flat Products. In case of Delivery, the satisfaction level of customers of Long Products for Delivery has increased but the customers of Flat products are not satisfied with Delivery process of SAIL (BSP). Satisfaction level of customers for Service, in case of both Long & Flat Products has increased over the period of three years.

C.S.I. Analysis for Long Products (Graphs)

72

1. Graph for average C.S.I. of Long Products for the period of three years.

Above Graph shows the continuous improvement in Customer Satisfaction Index (CSI) for the period of three years. 2. Graph showing the comparison of Satisfaction level of customers for different parameters like Quality, Delivery and Service over a period of three years for Long Products.

Above graph shows that the Satisfaction level for Quality, Delivery and Service has increased over the last three years. Satisfaction level for Quality and Delivery for the financial year 2007-08 was lower than that of the previous year i.e. 2006-07.

C.S.I. Analysis for Flat Products (Graphs) 1. Graph for average C.S.I. of Flat Products for the period of three years.

Above Graph shows the continuous improvement in Customer Satisfaction Index (CSI) for the period of last three years.
73

Graph showing the comparison of Satisfaction level of customers for different parameters like Quality, Delivery and Service over a period of three years for Flat Products Above graph shows that the Satisfaction level for Quality and Service has increased over the last three years. But the Satisfaction level for significantly for the year 2008-09. Delivery came down

Satisfaction level for Service in the year 2007-08 was lower than that of the previous year i.e. 2006-07. OVERALL CONCLUSION Satisfaction level for all the three factors Quality, Delivery and Service for the Long Products are increasing continuously over the last three years. While, in case of Flat Products, Satisfaction level for Delivery decreased significantly. If, we look the overall CSI output, it can be concluded that Delivery is major concern for company which needs immediate attention, as the average CSI for Delivery is around 85-90% which is very less in comparison to Quality and Delivery (92-96%) for both Long and Flat Products. COMPLAINTS OBTAINED THROUGH CUSTOMERS REGARDING QUALITY, SERVICE AND DELIVERY
74

Customer complaints regarding Quality Poor quality of lamination Off chemistry material Problem of cracks in the products Customer complaints regarding delivery: Invoicing problem. Information of the order status. Loading of the materials in the wagon. Customer complaints regarding services: Poor performance of cross functional team. Poor performance of Branch Sales office. Delay in order confirmation. RECOMMENDATIONS AND STEPS TAKEN BY SAIL (BSP) FOR REDUCING THE FURTHER COMPLAINTS For improvement of Quality: Increased inspection of finished products. Improvement requirements. in TMT bars according to customer

Key structured customer meet at branch level(every month) Mason meets.

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For improvement of Delivery: Online service for invoice: From 2008-09 everyday at 6.00 P.M. an email is generated which describes the invoice details. Improvement in wagon loading : loading & unloading time is reduced and Maximum uses of wagon capacity. Introduction of freight operating information system (FOIS): Through this every movement of the dispatched material is traced by all the branches through internet. Provision of Enterprise Resource Planning. Introduction of spot invoicing: Invoice is generated at the same time and at the place of dispatch so that delivery time gets optimised and reduces the unloading time at the customers place. No held up time.

For improvement of Service: Intensify the dealer network: Covered almost all the districts in the country (623/625 in India). Rewarding the dealers. After sales service: Improving the invoice generation process. Increasing the stockyards to handle the complaints quickly.
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SECONDARY PRODUCTS
Scraps generated inside Bhilai Steel Plant are termed as secondary products, in the course of manufacturing process. In every stage of production, always there will be certain percentage of product which do not fit to the standard quality, size & specification, such product are termed as secondary product. Moreover, while shaping the prime product both end & sides are cut, these extra materials are also categorized as secondary product in SAIL (BSP) as they are re-rollable. Secondary section started functioning after the commencing of Bhilai Steel Plant. The secondary product section of the marketing department is solely responsible for the selling of secondary products and by products of SAIL (BSP). All the defective/ rejected items: this department except the rejected/ defective plates sells scrap. The defective plates are sold by Central Marketing Organisation (CMO) since December 2001. The secondary products are sold by online auction sale, tender and fixed price sale. Following items fall under the category of secondary products: Defective Heavy blooms. Defective billets/ billets cutting. Defective/ Rejected slobs. Plate mill side shearing. Plate mill end shearing.
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 Defective/ Rejected rails. Rails cutting. Rod cutting. Defective Rolled slabs from bloom and billet mill. Iron scrap. Spillage slag. Blast furnace granulated slag. Coal rejects, Coal chemicals Bloom end cutting.

Necessity of Selling the Secondary Products

The net sales from all the secondary products, by products and co-products of SAIL (BSP) are around Rs. 1591 crores in FY09 which is quite more than money the big industries. Out of this steel scrap arising itself brings about Rs. 1290 crores of money every year. Re-production of primary product from the secondary product requires re-melting it again for the required composition of the materials as per the desired specification.

By selling it to the different mills/traders/processors the plant earn a decent amount of money which is basically utilized as working capital for day-to-day spending.

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Profit is the main aim of every business and when the realization of these products for the finished products proves to be costlier the management plant decided to sell it to local market. By selling secondary products to the local market new industries are developed for re-rolling the secondary material to make finished product. It has also increased the small-scale industries and employment opportunities.

Marketing of Secondary Products

During the seventies and eighties when the plant was one million-tonnes and 2.5 million-tonnes of capacity respectively arising of secondary products were limited and such arising were recycled for re-melting. Therefore there was no scope for marketing in other words it was not economical. The plant capacity has been increased from 2.5 million tons to 4 million tons in the late eighties. New technology has been adopted while increasing the capacity of the plant where by the use of arising for re-melting drastically reduced. This has given more reasons for the marketing/selling of secondary products. In the nineties we have seen lot of changes in the economic scenario of the country. The concept of more employment in public sector enterprises has changed to more profit. There by the plant also has geared up its strategy towards this end. One of the strategies adopted by the plant for increasing the profit is marketing of secondary product. In the recent years a number of foundries and re-rolling mills come into existence throughout the country. These small-scale sectors need the secondary product
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as input raw material for their production. The company has engaged in educating them the use of secondary products for different kinds of end products for consumption of general public. The plant extends all types of facilities and assistance to these small-scale units which in turn give scope for more employment opportunities. The plant for marketing has adopted following strategy following strategy; 1. 2. 3. 4. Committed delivery. Competitive price. Quick complaint settlement. Culture of customer service.

COMMITTED DELIVERY:Achievement of the goals of 100% fulfillment of contractual obligation of delivery is important as customer must develop confidence that B.S.P. delivers in time. To ensure this appropriate action is to be taken in the following areas: Movement of scraps & other materials from plant to customers. Delivery of documents in time Monitoring. CUSTOMISED PRODUCT MIX:Matching the product mix with the customer requirement is the key to the customer satisfaction. B.S.P. has to ensure what
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type of materials are required by customer and supply the materials the customers needed. COMPETITIVE PRICE:Success in a competitive market depends on competitive advantage in terms of delivery & price. Competition from other steel products is likely to increase in the context of recent changes. This can be achieved only through continuous cost reduction & improvement in pricing policies.

QUICK COMPLAINT SETTLEMENT:-

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In this context the complaint from the customer comes to the Branch Sales Office (BSO) where it is handled in two phases: In the first phase, the minor complaints are solved by the concerned Application Engineer. If the complaint is complicated then it is known as Registered Complaint and is solved in second phase where it is solved by the M & SP department & a meeting is conducted by the M & SP dept., Research & Complaint laboratory & concerned shop. Then the required preventive/corrective actions are taken.

About www.metaljunction.com
Metal junction is now the largest e-marketplace for steel in the world, having sold over 4 million tonnes of steel for its clients and currently selling at an average rate of 150,000 tonnes per month. The buyer community of 5400 plus buyers comprising
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traders, fabricators, re-rollers and end-users have placed their confidence on metal junction because of the operational efficiency, transparency and equal access that the platform provides. Metal junction's clients have experienced significant benefits on migrating to online selling. Immediately on migration, from their traditional sale process, to the metal junction online process, their price realizations increased by up to 23%. INDUSTRY ACCREDITATIONS In its quest for business excellence, rock-solid processes and performance, Metal junction has become a member of many associations and societies and has picked up leading certifications, besides ISO 9001:2000, some of which have been represented here: Nasscom CII IIMM QMS INNOVATION REWARDED Just as energy is the basis of life itself and ideas the source of innovation, so is innovation the vital spark of all human change, improvement and progress. Theodore Levitt At Metal junction, innovation is a way of life and over the years, the company has come up with ground-breaking innovations in every function, be it operations, customer care, technology or administration. Besides having helped the company to improve the processes, reduce costs and increase profitability, continual innovations have succeeded in adding value to the customers as
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well as had a positive impact on the socio-economic progress of the nation as a whole. BENEFITS FOR BUYERS With e-Sales process, steel consumers whether small or large, are assured of the quality delivered to them in the most simple, efficient and transparent manner anywhere in the country. Metal Junction constantly strives to ensure that our buyers remain not more than a click away from fulfilling their steel requirements. Metal Ludhiana, Bangalore, Bengal and junction has had clients from Mandi Gobindgarh, NCR, Kanpur, Raipur, Bhilai, Mumbai, Gujarat, Chennai, Coimbatore, Hyderabad, Orissa, West even Guwahati.

Buying steel on Metal junction brings the following advantages: 1. No time wasted in negotiations with company executives. 2. Transparent pricing based on current market situation, totally free of bias. 3. Increased productivity. 4. Value added services like inspection and finance BENEFITS FOR SELLERS Metal junction not only offered the steel companies the opportunity to cut costs but also to increase revenues and enhance margins. Increased reach enabled Companies to discover new buyers for their products and increased discovery
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of new buyers over the Internet had a significant impact by increasing realizations considerably. Metal junction has brought in about marked improvements in the steel Supply Chain Management through: 1. Efficiency in process 2. Increased Reach
3.

Lower costs to buyers through dis-intermediation.

4. Transparency across the supply-chain.

FORWORD AUCTION Metal Junction is now the largest e-marketplace for steel in the world. Under the aegis of Metal junction the companies have successfully sold over 4 million tonnes of steel for Metal Junctions clients and are currently selling at an average rate of 150,000 tonnes per month! By using technology, primarily the internet, Metal Junction provide the steel companies an opportunity to cut costs and at the same time increase revenue and enhance margins. The internet increases the reach of the companies in discovering new buyers, which in turn bring about quicker realizations. In addition to this the efforts have played a pivotal role in initiating major improvements in the supply chain management process by introducing three distinct product market segments: Commoditized Steel products
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Branded Steel Products Build to Order Steel Products WHAT IS AN E-AUCTION? Auctions are common in markets where the goods sold are valuable (like art) or when their prices can't be easily determined. The process of an auction aims to find a fair price for the goods by identifying buyers who need them the most. Such auctions are called forward auctions. In forward auctions buyers compete with each other by placing bids for the goods to be sold. Metal junction has pioneered the concept of e-Auctions for steel by moving the entire process of auctions to the Internet. With state-of-art technology and unique services to support buyers and sellers in the decision making, financing and logistics stages the auction tools help enterprises realize their sales and procurement goals with considerable cost savings. CUSTOMER SATISFACTION INDEX OF LONG PRODUCTS & FLAT PRODUCTS FOR 2009-10 (MONTHWISE) :

CHAPTER -5
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SWOT ANALYSIS OF THE INDUSTRY Strengths

1. Availability of iron ore and coal 2. Low labour wage rates 3. Abundance of quality manpower 4. Mature production base

Weaknesses
1. Unscientific mining 2. Low productivity 3. Coking coal import dependence 4. Low R&D investments 5. High cost of debt 6. Inadequate infrastructure

Opportunities
1. Unexplored rural market 2. Growing domestic demand 3. Exports 4. Consolidation

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Threats
1. China becoming net exporter 2. Protectionism in the West 3. Dumping by competitors CONCLUSION:The major factors for the purchase decision of the customers are Quality, Delivery & Service. Customers are satisfied with Quality, Availability, Service, but not satisfied with the delivery process of SAIL (BSP). Communication process of SAIL (BSP) is good as most of the customers are satisfied with the timely information about eauction process. Customers are happy & satisfied with the e-auction process for purchasing of secondary products. Most of the customers are not satisfied with the EMD money process. Customers are satisfied with the knowledge and behaviour of SAIL (BSP) executives. Most of the customers did not require the transport facilities provided by SAIL (BSP).

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RECOMMENDATIONS:-

As there is a mismatch between the major factors which are important for making purchase decision and the factors with which they are satisfied, like delivery of the products is one of important factor for customers but they are not satisfied with the delivery process. So, the delivery process must be improved for more satisfied, loyal and increased number of customers.

Another concern here is EMD money process, Rs. 1 lakh is charged by SAIL (BSP) to qualify for e-auction process, which most of the customer are not able to bear as mostly they are small industrialists. So, the EMD must be decreased so that more number of customers can apply for e-auction process, which will ultimately increase the selling price of the products.

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Biblography

www.google.com www.yahoo.com www.sail.co.in www.wikipedia.com

Sail Corporate Brochure The Hindu Business Line Data provided by the company

Times of india

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