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

INTRODUCTION TO TOPIC

In today s competitive world where cutthroat competition exists, every

one wants to know their position, their strength and weaknesses. So it is very

essential to know opportunity to target the potential market, capture the

market, evaluate and form the marketing strategies. Marketing strategy is an

element of the overall strategy of organization. It is a way through which

companies achieve their goal, or in others words, it is the complete

unbeatable plan designed especially for attaining the marketing objective of

the firm. The marketing objective indicates what the firm wants to achieve.

The marketing strategy provides the path and design for achieving them.

They are normally arranged in accordance with the guidelines provided by

the company objective and company budgets.

Bhilai Steel Plant is the steel manufacturing plant. The main products

of plant are Rail Tracks, Billets, Blooms, Plates, Wire Rods, and Angles.

While the production of primary products there are generation of some by-

products or secondary products. These secondary products also sold in the

market and make a huge amount of revenue. The quantity of these materials

is very high therefore it needs totally different marketing strategy to sell in

the market.

This project was basically concerned to the Marketing & Strategic

Planning of Secondary Product and collecting view of customer of

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 marketing strategy of

secondary product and helps in eliminating the flaws in sale policy of Bhilai

Steel Plant.

CERTIFICATE

This is to certify that this project tit led Marketing & Strategic

Planning of Secondary Products at Bhilai steel plant, SAIL is a

bonafide work carried out by Kamal Patil of MBA-II of Vishwakarma

Institute of Management for fulfillment of MBA degree of University of

Pune.

He has worked under our guidance and direction. His work is found

to be satisfactory and complete in all respect.

Prof. S. L. Joshi Prof. Rajesh Vhatkar

(Director) (Project Guide)

Date: Date:

Place: VIM, Pune Place: VIM, Pune

COMPANY PROFILE

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 defense

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 four 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.

SAIL's wide range of long and flat steel products are much in

demand in the domestic as well as the international market. This

vital responsibility is carried out by SAIL's own Central Marketing

Organization (CMO) and the International Trade Division. CMO

encompasses a wide network of 38 branch offices and 47 stockyards

located in major cities and towns throughout India.

With technical and managerial expertise and know-how in

steel making gained over four decades, SAIL's Consultancy

Division (SAILCON) at New Delhi offers services and consultancy

to clients world-wide.

SAIL has a well-equipped Research and Development Centre

for Iron and Steel (RDCIS) at Ranchi which helps to produce

quality steel and develop new technologies for the steel industry.

Besides, SAIL has its own in-house Centre for Engineering

and Technology (CET), Management Training Institute (MTI) and

Safety Organization at Ranchi. Our captive mines are under the

control of the Raw Materials Division in Calcutta. The Environment

Management Division and Growth Division of SAIL operate from

their headquarters in Calcutta. Almost all our plants and major units

are 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 Karnataka

Subsidiaries

Indian Iron and Steel Company (IISCO) in West Bengal

Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

Bhilai Oxygen Limited (BOL) in New Delhi

Joint Venture

SAIL has promoted joint ventures in different areas ranging

from power plants to e-commerce.

NTPC SAIL Power Company Pvt. Ltd

Setup 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 tones 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 tones 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 basis, 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.

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 Government 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.

BACKGROUND & HISTORY OF SAIL

A Rich Heritage

The Precursor

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 Ltd. (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, 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.

Since its inception, SAIL has been instrumental in laying a

sound infrastructure for the industrial development of the

country. Besides, i t has immensely contributed to the

development of technical and managerial expertise. It has

triggered the secondary and tertiary waves of economic growth

by continuously providing the inputs for the consuming industry.

The New Millennium

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.

Having achieved the initial goal of laying the foundation for the

industrial development of the country, SAIL took up the new

challenge of facing the era of liberalized economy and the

emerging competitive scenario in the Steel market. On the eve of

entering the new millennium, SAIL launched its Financial and

Business restructuring programme. The strategy includes a

divestment of non-core activities, restructuring of marketing

function and a focus on pruning cost of operation. The goal for

the company is to emerge as one of the lowest cost producer in

the global steel market.

PLANT WISE

Bhilai Steel Plant Blooms, Billets and Slabs beams

Channels, Angles

Crane Rails

Plate

Rails

Pig Iron, Chemicals and Fertilizers

Bokaro Steel Plant HR Coils and Sheets

Plates

CR Coils and Sheets

GP Sheets and Coils \ GC Sheets

Pig Iron, Chemicals and Fertilizers

Durgapur Steel plant Blooms, Billets and Slabs beams

Joists, Channels, Angles

Bars, Rods and Rebar s

Skelp

Wheels, Axel, Wheel Sets

Pig Iron, Chemicals and Fertilizers

Rourkela Steel Plant HR Coils

Plates

CR Coils and Sheets

GP Sheets\ GC Sheets

Tinplates

Electrical Steels

Pipes

Pig Iron, Chemicals and Fertilizers

PRODUCTS

Product

type wise

Semis Blooms, Billets and Slabs

Long Products Structural, Crane Rails, Bars,

Rods And Rebar s, Wire Rods

Flat Products HR Coils, Sheets and Scalp Plates

CR Coils and Sheets

GC Sheets\GP Sheets and Coils

Tinplates, Electrical Steel

Tabular Products Pipes

Railways Products Rails Wheels, Axels, Wheel sets

THE SEVEN C S OF SAIL

Consistent Quality

Committed Delivery

Customized Products

Competitive Prices

Complaint Settlement

Contemporary Products

Culture of Customer Services

CONTENTS

TITLE PAGE

EXECUTIVE SUMMARY 01-02

INTRODUCTION TO TOPIC 03-03

COMPANY PROFILE 04-21

SCOPE OF WORK 22-22

OBJECTIVE OF PROJECT WORK 23-23

RESEARCH METHODOLOGY 24-24

INFORMATION & ANALYSIS 25-34

OBSERVATION & FINDINGS 35-53

LIMITATIONS 54-54

CONCLUSION 55-56

SUGGETION 57-58

BIBLIOGRAPHY 59-59

ANNEXURE 60-67

INTRODUCTION TO TOPIC

EXECUTIVE SUMM ARY

COMPANY PROFILE

SCOPE OF WORK

OBJECTIVE OF PROJECT

INFORMATION & ANALYSIS

OBSERVATION & FINDINGS

LIMITATIONS

CONCLUSION

RESEARCH METHODOLOGY

ANNEXURE

SUGGETION

BIBLIOGRAPHY

EXECUTIVE SUMMARY

Progress is a continuous process. It is relative and absolute. We can t stop

at a certain destination and declare that target has achieved and we need

not go further.

The summer training programs are designed to give the manager of the

future, a feel of the corporate happening and work culture. These real life

situations are entirely different from the simulation exercise enacted in an

artificial environment in side the classroom and it is precisely because of this

reason that this summer training is a bridge between the institute and

organization. Summer training program made us to understand how

theoretical knowledge will be applied in practical field.

It exactly in this context that I was privileged enough to join Bhilai

Steel Plant, on 30th of May 2005, as a summer trainee. STEEL

AUTHORITY OF INDIA (SAIL) is ranked among the top ten public sector

companies in India in terms of turnover. Bhilai Steel Plant is one of steel

plants comes under SAIL. It is symbol of Indo Soviet Techno Economic

collaboration, is one of the first three integrated steel plant set by the

Government of India. It is also the known for i ts enlightened and

progressive 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 future.

In today s market where the customers are playing a major role and

it s extremely necessary for an organization to see that their product

provides complete satisfaction to their customer by fulfill ing their needs.

During this project I study the marketing strategy of secondary products

of Bhilai Steel Plant. I was out for customer survey, to know the problem

facing by customers in local region. Also I tried to find out some different

marketing tactics and procedures, which will helpful for Management and

customer, both.

All the information is not only collected by survey and work visit

but also by discussing with different managers in marketing department of

Bhilai Steel Plant. Also I have used all the relevant data which were

available in Bhilai Steel Plant.

The rest of the report was done after a deep comprehensive and full-

fledged study of the problem and is based on my original research and

investigation.

INTRODUCTION OF BHILAI STEEL PLANT

INTORDUCTION

The Bhilai steel plant was described by Late Mr. J L Nehru jewel

in the crown of sail . For production of steel an MOU (memorandum of

understanding) was signed with the Russian government for setting up of

the Bhilai steel plant. The first phase of 1 MT was completed in 1959 and

subsequently capacity was expanded to 2.5 MT and 4 MT.

Five time winner of prime minister s trophy for best integrated steel

plant in the country, Bhilai steel plant (BSP) is India s sole producer of

rails and heavy steel plates and major producer of structural. With an

annul production capacity of 3.153 mt of saleable steel, the plant also

specialized in other products such as wire rods and merchant products. All

saleable products of Bhilai steel plant are under the ISO umbrella as per

BSP s accreditation with ISO 9001:2000 quality management system

standard. Plant s plate mill, Dalli merchandized mines and rail mill have

also received ISO: 14001 certificates for their environment management

system.

PLANT LAYOUT

An the unit of the plant have been laid in sequential formation

according to technological interrelationship, so as to ensure uninterrupted

flow of in process material like coke, slag etc and to minimize the length

of various inter plant connection util ities and services.

RAW MATERIALS

BSP is primarily an ore based plant. The requirement of principal of

raw material except coal and manganese ore is met from the captive mines

of the plant. The plant owns and manages the mechanized and manual iron

ore mines, at Dalli rajhara situated about 100 km away from Bhilai and a

lime stone mine at nandini about 25 km away from plant. The plant also

owns quarries or hirri , Chhattisgarh (for dolo-mite),

Over a million tones of minerals of mined annually from the captive

mines.

SERVICES AND UTILITIES

BSP is an integrated steel plant which requires various forms of

energy like electricity, fuel (solid, l iquid and gaseous), stream, oxygen,

compressed air, chilled water, air blast etc.

Electricity power is supplied by BESCL (Bhilai electric supply

company limited) a joint venture between National Thermal Power

Corporation and SAIL from korba 250 km away from Bhilai.

Water supply comes from a well constructed system of water works

of the state government

tandula reservoirs, water from nearby rivers are

brought to two huge water reservoirs ( maroda tank 1 & 2) through a well

laid canal, 60 km long from BSP.

The other util ity l ike gaseous liquid and solid fuels, chilled water,

steam, oxygen and compressed air are provided at plant by centralized

util ity services.

There exist an extensive communication system at work at work

place which include an auto telephone exchange, dispatch communication

system, gas and fire alarm signal, yard communication and automatic

signaling and blocking system of plant, rail transport facility and

shop floor loud speaker system.

MANAGEMENT

Initially BSP was under the administrative control of the ministry

of iron and steel with powers delegated to the chief of the plant. Later

Hindustan steel l td. controlled the management which was formed in 19th

January, 1954 to manage Rourkela steel plant. Bhilai steel plant becomes

the constituent of Hindustan steel ltd. With the formation of steel

authority of India limited on 24t h January, 1973.

In the organization of BSP, the managing director is the top most

authority responsible for overall control. There are two executives

directors one is for project and another is for works, with five general

managers. They are in following manner:

General Manager - In charge of work

General Manager - Project

General Manager - In charge of work

General Manager - Finance

General Manager - Mines

They have under them Deputy General Manager, Astt . General

Manager, General Manager, Sr. Manager and Manager. Executive Director

has the most important function of the second rung, in the view of the fact

that he is in the entire charge of the plant and is directly responsible for

production. The Executive Director (project) has the responsibility for all

expansion and constructive activities.

General Manager (Marketing Management) has the sole authority of

all purchases, stores, inspection, disposal and connected activities.

General Manager (Finance) is directly responsible for efficient

management of monitory resources, accounting and internal audit.

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 functioning

of ideal engineering industries, small scale steel maker, roller, foundries

and forged shops, large scale fabrications, builders, the construction

industries and Railways.

BSP is putting on the market a wide range of rolled products and in

some of the products enjoys the status of monopoly. Bhilai has all along

maintained its position as the most productive of India s integrated steel

plants. 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 For Broad Gauge

Angles (MM) 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 28, 32, 36, 40

Wire Rods

1. Plane coils 5.5, 6, 7, 8, 10

2. TMT coils 8, 10, 12

Flats (MM) Width: 50 -120

Thick: 8 - 20

Plates (MM) Width: 900-3200

Thick: 7.1 to 120

Pig Iron Various foundry & Basic

Grades.

BY PRODUCTS

Coke (MM) 0-10, 10-25, 0-25 & +25

Tar & Tar products HP Napthalens, Pitch

creosote oil ,

Dephenolised oil , Sodium

phenolate, Anthracene oil ,

Drained naphthalene oil ,

Crude anthracene, Light

oil

Processed Slag Granulated Slag, Slag

Aggregate

Benzol product benzene, Toulene,

Xylene, Solvent oil, Heavy

crude benzol.

Hammer Plates

Ammonium Sulphate

MAJOR LANDMARKS:

Signing agreement for setting up the Plant - Feb 2, 1955

Commencement of work at site - May 6, 1956

Commissioning of Coke Oven battery no 1 - Jan 31, 1959

Commissioning of Blast Furnace no 1 - Feb 4, 1959

Commissioning of Power Plant no 1 - June 4, 1959

Commissioning of Steel Melting Shop no 1 - Oct 11, 1959

Commissioning of Blooming Mill 1150 stand - Nov 12, 1959

Commissioning of Billet Mill - Dec 24, 1959

Commissioning of Rail & Structural Mill - Oct 27, 1960

Commissioning of Merchant Mill - Feb 2, 1961

Commissioning of Sintering Plant no 1 - July 3, 1961

Commissioning of Wire Rod Mill - Sep 1, 1967

Commissioning of Plate Mill - Mar 31, 1983

Commissioning of Converter no 1 - July 29, 1984

Commissioning of continuous Casting shop 1 - Mar 15, 1986

Commissioning of SMS First Turn Hearth - Sep 12, 1986

Commissioning of Blast Furnace no 7 - Aug 30, 1987

Commissioning of Coke Oven Battery no 9 - Mar 31 1988

Commissioning of Second Twin Hearth - jan1, 1990

Commissioning of Third Rwin Hearth - June 29, 1992

AWARDS:

National Energy Conservation Award

99 from Honorable Minister of

Power, Mr. S. Prabhu.

Best Pollution Control Implementation Gold Award

Institute of Lal Bahadur Shastri Memorial National Awards for excellence industries.

Best Performance Award to Dalli Mechanized Mines.

PM s Shram Vir Award

2000 to Shri J. S. William, Sr. operator, CCS, by Hon ble Prime Minister on 4-02-02 at New Delhi.

PM s Shram Bhushan Award

2001 to a group of 5 employees from Blast Furnace.

Vishwakarma Rastriya Purashkar

99 to employees of the plant on 17t h

Sep 2001.

Prime Minister Trophy Best Integrated Steel Plant Award

1992-93

1993-94

1995-96

1996-97

1997-98

National Level Coal India Productivity Award to Shri Hemant Kumar Desai, Additional Chief Industrial Engineer.

4 Collective & 7 Individual Awards

for the year 1999 to BSP on Safety, Health and environment in Steel Industry.

SCOPE OF WORK

This project is dealing with one of the largest steel plant in India.

Although it only concern with marketing department of Bhilai Steel Plant

but i t s i tself a big opportunity for anyone to cover the every single

corner of marketing department because Bhilai Steel Plant has vast

number of employees, working in marketing department. The scope of this

project is not only concentrated on marketing department of Bhilai Steel

Plant but also deal with its existing industrial customers.

SCOPE OF WORK:

MARKETING DEPARTMENT OF BHILAI STEEL PLANT

15 EXISTING INDUSTRIAL CUSTOMERS

WORK VISIT NOTES OF BHILAI STEEL PLANT

ACKNOWLEDGEMENT

I take this opportunity to thank all those individuals and groups

without whose support this project could never have been completed.

I would like to thank our Honorable Director Mr. S. L. Joshi and

project guide Prof. Mr. Rajesh Vhatkar who gave me this opportunity.

My special thanks to Mr. D. S. CHAWLA (Sr. Manager, Marketing

& SP, BSP) and Mr. AYAN MISHARA (Manager, Secondary Product,

BSP) without whom this project could never have been completed.

This acknowledgement can never be completed without thanking to

the employees of Marketing & Strategic Planning department of Bhilai

Steel Plant and all other people who have been associated directly or

indirectly with my project and helped me in getting it in the present form.

D A T E : M r . K a m a l P a t i l

OBJECTIVE OF PROJECT

The objective of this project is to analyze the working condition in

a government organization. Apart from this, other major objectives are

To Analyses secondary products.

To understand Marketing strategy of secondary products.

To Know the Sales planning for secondary products.

To Know the Distribution methods of secondary products.

To Collect the Customers Feed Back.

RESEARCH METHODOLOGY

BSP had a wide network within country. To analyze the

report certain methodology were used to elaborate the topic in easy way.

The design of a research study is based on the purpose of the study.

Methodologies which were used are:

SAMPLING

An integral component of a research design is the

sampling plan. Sample size, which was taken for the research, is six

departments in marketing branch of BSP.

STRUCTURED QUESTIONNAIRE

Structured questionnaire was prepared and survey

made with the customers of secondary product of BSP at local region.

FORMAL & INFORMAL INTERVIEW

Formal and Informal interviews were made with

the different managers of marketing department.

DATA COLLECTION

Various data are collected from different sources.

Sources of these data are various government publications, trade

journal, official website of SAIL, and various publication of BSP.

MARKETING NETWORK

CENTRAL MARKETING ORGANISATION

Central Marketing Organization (CMO), one of the largest

marketing networks in the country, markets mild steel products from the

four integrated steel plant of SAIL. The CMO headquarter is at kolkata

and the commercial directorate is located at New Delhi. A nation-wide

network of regional offices, sales offices and several strategically placed

warehouses is further supplemented by consignment agents and authorized

dealers to meet the demands of the smallest customers in the remotest

corners of the country. CMO maintains its aggressive marketing efforts in

order to retain market leadership by meeting customer s requirements and

evolving strategies to increase sales. In order to strengthen the marketing

approach 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 Customer through a

single 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 and

warehouses. This will enable the marketing team to concentrate on

building customer relationship to provide them better service, along with

the best quality. Dealer development, especially in rural areas, is being

aggressively pursued by CMO to reach out to the farthest corners of the

country. This wide network of authorized dealers also helps meet

customers demand for steel in small quantities.

INTERNATIONAL TRADE DIVISION

International Trade Division (ITD) of CMO manages exports

of mild steel products and maintains close liaison with buyers abroad. ITD

has been successful in making SAIL steel, a familiar name across the

continents. Sail s reputation as a producer of quality steel products has

been established in as many as 70 countries around the globe. Notable

among them are JAPAN, EGYPT, UK, ITALY, RUSSIA, SRI LANKA,

BANGLADESH, TAIWAN, MYANMAR and NEPAL. Transport and

shipping division (T&S) of CMO performs the important functions of

ensuring proper dispatch of export material and timely import of raw

materials to keep SAIL plants going.

BRACH SALES OFFICE / SALES RESIDENT MANAGERS

This office is related to the sales of the prime products of the

Bhilai steel plant, which acts as an interfacing body between the BSP &

Centralized Marketing Organization (CMO). The different issues related

to the products and its delivery is dealt indirectly with BSP through this

department. We can say it coordinates about production and dispatch in

different Steel plants. CMO has got SRM offices at the following places

i .e. Bhilai, Rourkela, Bokaro, Durgapur.

FUNCTION OF BRACH SALES OFFICE (BSO)

Booking of order from customers on long term and short term basis.

Passing details of booking to concerned Sales Resident Managers

office.

The movement plan of the products which consist all the detail

related to the products quality, quantity and size are sent by this

office to the plant.

The meeting related to the sale of the product is done

intermittently.

The customer complaints are also handled by plant through this

branch sales office with proper channel of meeting.

SALES & DISTRIBUTION OF SECONDARY PRODUCTS

SELLING OF SECONDARY PRODUCTS:

This involves a direct marketing process. The management of

BSP in consultation with the officials of the market development and

customer service department works as group for the sale of these items.

There are 2 methods of selling these re-rollables defective materials.

BY FIXED PRICE SALE

BY 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-auction or by

marketing department depends upon the management decisions. There are

different re-rollables materials coming from four different mills that can

be sold. The pricing of these materials is carried out by the pricing

committee depending on:

The price offered by the customers during auction sale.

The quantity to be sold

The approval of the managing director.

The market price of the particular material.

The price offered by the competitors.

BY TENDER

The secondary product which are generated while process of

manufacturing the primary product is also sold by the tender option. In

this way of selling the secondary product, the marketing department of

secondary product releases the tender with number of quantity to be sold

and the minimum price can be offered and according to the application

which received against the tender notice, material sell to the particular

customer.

BY E-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 price money

with the particular quantity they want. Applicant can be anyone across the

country and can participate in the auction. After closing the date of

auction within 5 working days the final customer s name declared on the

website based on the price money offered by them. They are invited for

the further process of purchasing material.

PROCEDURE APPLIED FOR SALE OF SECONDARY

PRODUCTS

After obtaining approval of quantity and price for sale, Marketing

Department scrutinizes the demand from various parties, examine

the priorities and issue Offer Letters to respective parties. The

terms and conditions for sale are also enclosed with the Officer

Letter .

About one third of the actual quantity of material to be sold during

the year is offered to the actual users, subject to registration of

demand.

For the balance quantity to be sold at prices fixed by pricing

committee, preference is given to actual uses over traders. If their

giving preference to registered traders over others.

First preference is given to the actual users for allotment of scrap

against particular category of users; scrap processing units are

given second preference for such allotment.

The amount received from the party towards advance payment and

security deposited is forwarded for finance department by

marketing department after recording the details in the register.

Parties are allowed to visit the respective location/disposal sites

and inspect the scrap offered for sale.

Marketing department prepares sale order for the parties who have

accepted the offer. Sale orders are issued party wise and category

wise i .e. individual sale order covers such categories like CL scrap,

Rerollable, Sludge and waste products. The sale order is carried

over to the next year.

Based on the deposit made by the party, finance department

intimates to marketing department release of requisite scrap for

supply. Marketing department prepares release orders which are

treated by MRD as delivery order.

On receipt of release order, MRD plans number of trucks / trailors

to be entertained each day, after ascertaining quantum of different

types of scrap to be issued per day, number of trucks / trailors

expected loading and weight facilities available etc. MRD in

consultation with marketing intimates to the parties, l ikely date of

collection so as to deploy their fleet on the dates.

Weight of each truck / trailors is taken before and after loading

under strict supervision.

Gate pass and other related documents are prepared by MRD to help

facilitate.

REFUND OF SECURITY DEPOSITES

Party has to give an application for closing or canceling sales order

to marketing department.

After receiving the application marketing department prepares

closing / cancellation order within three days of receipt of

application and issue to all concerned agencies.

Concerned department and Central Industrial Security Force (CISF)

issue No Due Certificate (NDC) and send to marketing department.

If NDC is not received in marketing department within 10 days, it

will be considered that the concerned department has no claim on

the party and marketing department takes further necessary steps

accordingly.

After receiving NDC from concerned departments, marketing

department issues letter of refund of security to finance department.

Finance department verify documents and ensure issue of cheques

to party against refund of security within 7 working days.

DISTRIBUTION OF SECONDARY PRODUCT

The current procedure being adopted by Bhilai Steel Plant for

the distribution of Re-rollables against the fixed price can be explained

as:

Nearly 80% of the material available is offered to the actual

customers / re-rollers and 20% to scrap processors and others. However,

in the event of poor off take by re-roller / scrap processor, the surplus

available is offered to the traders as well but to a very limited extent. The

status of actual users/ re-rollers is decided on the basis of the necessary

certificate issued by the Director of Industries of the state. Whenever

there is surplus quantity available and the material is heterogeneous in

nature, the same is sold through auction / tender on all India bases

without making any distinction between the actual users and traders.

MARKETING SCENARIO

Without a perfect market goods can neither be purchased nor

can it be sold. Marketing is one of the major and crucial department

pillars of every organization and it is the case with SAIL.

Customer Satisfaction and quality assurance , these are

the two motives of SAIL for achieving there goals and establishing there

market. SAIL has a wide network across the country. 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 last 45 years.

It has established its position through a 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) from 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 who 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 quantity demanded, with the same channel

through wagons and trucks as the case may be. The copies of invoice are

sent to the customers and regional office concerned which is ultimately

deposited in the bank to get payment in case of credit sale.

FOR MARKETING OF DIFFERENT ITEMS THE THREE TYPE

OF POLICY ADOPTED BY BSP ARE:

Memorandum of Understanding (MOU): it is an agreement signed

between the plant and customer foe assured quality and quantity.

Annual Booking Selling: it is an informal agreement where

customer assures the plant for purchase of certain amount

throughout year.

Spot Selling: in this case BSP release the tender and asks for

quotations to different customers.

DIFFERENT SECTIONS OF BSP

DESCRIPTION OF 2.5 MILLION SECTION:

This section deals with the marketing procedure and functions

of non

flatable products. These include Wire Rod Mill [WRM, merchant

Mill (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 the stages of

marketing products.

This section has to play an important role in the overall

management procedure of marketing department. It is an integrated part of

the marketing department and contributes a lot to 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. as later on it

had gone for expansion with most improve technology. Different

measurement of rods i .e. plain rods, rods coiled and of varying thickness

are produced in the Wire Rod Mill . The orders are placed in every three

months, semi-annually, quarterly or as per the demand of the customers

from CMO. On this basis the product are dispatched, if not fully met

revalidated 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 target production

capacity 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 of

the major users are Indian Railways, Local Industrial Units, Heavy

Industrial Units and other concern. These products are mostly used while

rectifying the wear and tear of heavy equipments or construction of

structural in industries. The production quantity depends upon the orders

placed 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 commissioned

in1961 with 50,000 tones capacity. Later on the expansion of this unit

gave an abundant production capacity of thousand tones of rails per

month. From the past many years Bhilai Steel Plant has been the major

supplier of rails, beams, channels and other heavy structural to the Indian

Railways, Export Industry and other heavy industrial units. Bhilai Rails

are in the great demand among south-east nations and middle-east

countries. They have achieved high laurels excellence internationally.

Since the ISO certification of Bhilai Plates, the future plans are to set up

the rails on the tracks for ISO standards.

DESCRIPTION OF 4.0 MILLION SECTION:

This section of Marketing Department deals with the

marketing procedures of flattable products. Flattable products viz., plates

of varied dimensions, the major functions of this section is performed by

CMO which assign the program to his section. The programs are assigned

bi-monthly, quarterly, half- yearly or annually according to the demand.

This section is a division of Marketing Department of BSP, it is headed by

Senior Manager and having a strength of 25-30 subordinates. Marketing

functions of both production units are looked after by this section. The

production units are :

STEEL MELTING SHOP - II (SMS - II)

From SMS

II the required steel either mild or special as per

specifications required is supplied to Plate Mill. Hence forth there is a

close link between these two units. Any failure in the supply of steel to

Plate Mill will hamper the production of plates which is the major

contributor to the profits on sale.

STEEL MELTING SHOP - II (SMS - II)

This shop was commissioned on 1984 with a production

capacity of 4.0 mt steel, about 3.16 mt of saleable steel is extracted from

3.25 MT of ingot steel & the remaining as core and by

products out of

these 3.16 MT of saleable steel some ratio quantity will be special steel

and the rest mild steel on treatment. Plates of different measurement as

per demand are produced from mild steel and special steel. Special steel

plates are mostly supplied to key customers and exported. Core materials

and by- products which can be used to produced other products are

supplied to concern production unit . Non-usable viz., Fly ash, Slag, Iron

Fillings etc. are dumped out and sold in the local market.

PLATE MILL

This shop was commissioned on with a production capacity of

approximately 4.0 MT plates per annum. This mill had brought high

laurels for Bhilai Steel Plant. With its maximum production capacity and

products of excellent quality it has earned ISO 9001-2000 certification.

This unit is among of the production departments in the BSP which has

fully computerized operations. Before the production of plates, i t is

formed out of thick slabs which are produced with crude steel. The slabs

are exposed to necessary treatment of required composition, quality, and

dimension. Going through all these process, finished plates are finally

produced.

DESCRIPTION OF SECONDARY SALES SECTION

Secondary sales section started functioning after the

commissioning of Bhilai Steel Plant. This section controls the marketing

of core products and by- products. These products continuously evolve out

as no separate productions are made. Some of the by-products viz. slags;

fly ash, coke, iron scrap, steel scrap, iron fill ings and cuttings etc. are

continuously produced out. The potential market is spread out in

Maharashtra, Andhra Pradesh, Madhya Pradesh and Chhattisgarh. This

section also functions a responsible role in selling out these by-products

in the ideal market and some far placed industries too. Some of the

potential buyers of these products are Cement Industry, chemical

Industry, Fertil izer Manufacturing units and some engineering and

Fabrication units. Some of the products are dumped in huge amount as

such this section holds auction sale for needy customers on spot prices.

There is good demand for coke among the other local industries, engaged

with production of industrial products including Railways.

MARKETING DEPARTMENT

The marketing of prime products of all the steel plants of SAIL is

handled by the CMO (Central Marketing Organization). The marketing

department of BSP is entrusted with the job of co-ordination between the

CMO and the plants as well as the marketing of secondary products and

by products for ease of functioning; the department is divided into various

sections.

A. MARKETING AND STRATEGIC PLANNING

Handling of Customer Complaints: in case of any complaint

by customer. The complaint is sent to GM and the particular

mill . The CMO has an application engineer group for

commercial settlement which inspects the material and if

found defective; adjustments are made in the payments or the

material is taken back. If the quantity of goods is large, then

a plant also inspects the goods.

Customer Feedback : Customer feedback is taken by this

section on a periodic basis in the form of customer

satisfaction feedback reports. A four point feedback is taken

for increasing market share and for customer retention. The

basis pointers of the report are past performance, sector

growth, financial performance and purchases from other

suppliers of steel. For major customers, there is a Key

Accounts Manager , who handles them. This is done to

provide a single window service to these customers

ISO Activities: the various documents pertaining to ISO

activities are handled and managed here.

Training: This section also overviews the training of new

recruits, summer trainees in the marketing department.

MIS reports

Product Development: The Management Research Group at

CMO (kolkata) studies the market demand and supplies,

feasibility for which is checked at the plant and furthered for

approval.

Strategic Planning : This section ascertains the product mix,

quantum of exports, monthly tonnage and other parameters

for the plant according to the demand.

Audit Applies : This division also coordinates the various

audits that are undertaken.

B. EXPORTS

The International Trade Division of CMO is the main body that

handles exports of steel in the SAIL. BSP has been a major exporter in

the past. Rails have been exported to over 50 countries. Currently,

plates constitute the major exports item. Some semi finished goods,

light structural and wire rods are also exported. 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 checking if

the asked grades and dimensions are feasible.

If the response to the inquiry is positive then a letter of credit

is issued in the name of the buyer and a deal 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 production.

After production of goods a DISPATCH advice is sent to the

production department, after which the goods are certified

and tested. The goods are usually sent to Vizag for export.

The plant gets exemption from sales tax for goods meant for

exports.

At the port the various formalities are completed relating to :

i . Export license

ii . GR form

iii . Marine insurance

iv. Bill of loading (which gives possession of goods to the

shipping company).

After receipt of goods, payment is received through the bank.

The SAIL overseas account is at SBI kolkata.

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 limited

customers.

Till 1999, the sale of coal chemicals was handled by

the CMO. The production of Benzol is 1000 tones while the

storage capacity is only 300 tones. Therefore for t imely sale

of products, sale of coal chemicals are places under the

jurisdiction of the individual plants.

PROCEDURE OF SALE :

By February, the availability for the next financial year is

estimates.

A list of all the customers of coal chemicals is prepared and

the customers intimate the section about their requirements.

According to the requests submitted, the various customers

are told the quantities which will be provided to them.

To buy a product, a security has to be deposited.

The buyers arrange transport.

In case of low sales volumes, to ensure timely sale,

products are also sold through MOU. The advantages of

signing MOU are that the quantity of supply is assured and at

the end of the year a 1% discount is given on the total sale.

Other methods used for sale are auctions (through

www.metaljunction.com) and tenders.

C. SECONDARY PRODUCTS AND BBM :

Some of the secondary products are BF slag, defective,

refractory bricks, flue dust, scrap rolls etc. the sale of secondary

products is done by floating tenders and forward auction. Due to

surplus capacity of blooms and billets, they are sold in the

market as semi finished products.

D. RSM, MM AND WRM :

All these mills are producers of prime products; therefore the

sale of these products is overseen by the CMO. The procedure for

booking of orders is as follows:

The customer contacts the nearest BSO office and place

orders.

The order is sent to the CMO which sends it to the plant 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, dimensions,

place and mode of dispatch etc.

After the goods have been produced, they are transported to

the stockyard and the CMO asks the customer to collect the

goods after payment of the bills.

E. SALES RESIDENT MANAGER :

There are four SRM s located at the four integrated steel

plants. The SRM acts as an interface between the CMO and the steel

plant. The roles of the SRM are:

To check the availability of materials in the plant and 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 PRODUCTS ARE

CATEGORIZED IN TO THREE PART.

PRIME PRODUCTS:

These are actual products which are originally produced

for e.g. Blooms, channels, rounds, angles, TMT bars, wire rods, rails,

structure etc.

BY PRODUCTS:

These products are not originally produced by Bhilai Steel

Plant, but are the outcomes while producing the prime products.

SECONDARY PRODUCTS

This is the defective or rejected materials due to improper mixing

of chemicals components or fails to meet the optimum requirements.

Scrap generated inside Bhilai Steel Plant is termed as secondary products.

The secondary products use here is ferrous materials generated from

various production unit which can either suitably be used for remelting to

produce iron and products or offered for sale if rendered surplus in the

production process, for e.g. Defective Heavy Blooms, Defective Rails,

Rail cutting, Rod cutting, scrap etc.

DETAILS OF SECONDARY PRODUCTS:

Defective Heavy Blooms.

Defective Billet / Billet cutting.

Defective slabs.

Plate Mill side shearing.

Defective Rails.

Rail cutting.

Rod cutting.

Plate cutting.

Defective plates.

Rolled slab from Blooms.

Slags.

Coke fraction

COAL CHEMICALS.

Benzene.

Naphthalene.

Xylene.

Solvent oil .

Pitch.

Sodium Phenotate.

Wash oil.

Drained Naphthalene oil (DNO)

De

penalized oil (DPS)

Heavy Benzol (HB)

Toluene.

Steel Bottom oil

- Light creosote oil

- Heavy creosote oil

- Antracence oil

DETAILS OF SCRAP AND THEIR HANDLING

PCM SCRAP :

This is the scrap generated in the pig casting machine

and consists of splashing PCM runner, fires and weight range of up to

1.0 tone per piece.

BF RUNNER SCRAP:

Generated in blast furnace cast houses in the

form of runner jams etc. The maximum weight per piece is up to 2

tones. This scrap contains certain amount of slag.

UNPROCESSED STEEL SKULL SCRAP :

Generated in steel melting shops in slag cups and

metal ladles. As the skulls are quite broad in dimension, some of them

are required to be cut into sizes suitable for loading into trucks. These

skulls are in two weight ranges:

7 to 15 tones.

Above 15 tones.

SBIM SCRAP :

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 pouring of

steel in continuous casting. The weight of skull varies 2 to 3 tones.

CAST CHILLS:

At continuous casting, in case of emergency, the extra

metal ladle is pour into containers and this is termed as cast chills. 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 blast

furnace processing Shop. The skull contains some slag. Bigger skull

require cutting for accommodating in trucks.

COBBLED SCRAP:

The cobbled scrap arises from wire rod mill and includes

some 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 in the type.

SECONDARY PRODUCTS CAN BE UTILIZED IN TWO WAYS :

By Re-rolling of secondary products.

By selling of secondary products.

BY RE-ROLLING OF SECONDARY PRODUCTS.

NAME OF THE MACHINERIES:

The steel Re-rolling mill requires the following machineries to

produce re-rollable materials from the mild steel scrap:

- Main motor connected with pulley and V- Delts.

- Fly- wheel as per the requirement and size of the mill.

- Pinion gear Box consisting of three gears.

- Five stands which are situated in the shed for rolling

of hot scrap up to the finished product.

- Furnace the size of the furnace varies from 30 ft . To

40 ft . in length, 6 ft . width and 8 ft . height with a

coal chambers or oil fired chamber.

MANPOWER REQUIREMENT:

- In each re-rolling mill a foreman is very necessary to

maintain the machines and to produce a good quality

product. To assist him there should one section man

and one fitter.

- Furnace requires one worker for pushing the material

inside the furnace two worker for pulling out the

rolls.

- From stand 1 to stand 5 nine worker are required for

pushing the metal in the rollers. They work for only

four hours out of eight hour. So about eighteen

workers are needed to work on one shift .

PROCESS OF MANUFACTURING:

The scrap for the re-rolling is generally from BSP railways.

These materials are not directly re-rollable so first it is required to make a

re-rollable and of proper 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. These small scale sector need

the Secondary product as input, raw material for their production. The

company has engaged in educating them how to use secondary products

for different kind of end products for consumption. This material is then

continuously passed from one stand to other unit till finished product

comes out.

The rolls are provided with the groove as per the requirement of

the finished products.

PRODUCTS FOR THE RE-ROLLING MILLS

Over the year a number of re-rolling mills\ steel processing

mills and trading companies have come up in and around Bhilai. The raw

material need of these mills being met by the plant and the availabili ty of

the re-rollable have increased the re-rolling mills to develop very fast.

The plant extends all type of facilities and assistance to these small scale

unites which in turn give scope for more employment.

M.S .Squares, Angles, Channels, Flats, Rounds, Z-Sections, U-

Sections, T-Sections.

Cold Twisted Deformed (C.I.D)

TOR Steel.

Beams.

Strips.

Hoops.

Rectangular Bars.

Railway Sections.

Window Sections.

Pipes.

NECESSITY OF SELLING THE SECONDARY

PRODUCTS

The net sales realization from all the secondary products, by

products and co- products of Bhilai Steel Plant is around Rs. 600 crores

which Is quite more than many of the big industries. Out of which the

steel scrap arising itself bring about Rs.150-200 crores of money every

year. Re-production of main products these secondary products requires

remelting it again for the require composition of the materials as per the

desired specification.

By selling it to the different mill/ traders/ processors the plant gets

around Rs.4000 per tone of direct profit then by reproducing it to the

main product.

By using these materials traders/ processors/ re-rollers makes raw

materials for different finished product, which also making huge profit

and plant is not losing anything.

Profit is the aim of the every business, and when the re-utilization

of these products for the finished products proves 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

price.

The procedure of registration is as follows .

Preference for sale of secondary products is given to local

parties. Secondary products are sold for trade.

Sale of material made to re-rolling mills and scrap processing

units.

For sale of secondary products offer letter is issued to

party offering quantity, formality is submission of DIC

Registration Certificate

Final allocation to the party is made on basis on their past

performance.

PROCESS FLOW CHART: BHILAI STEEL PLANT

LIMITATION

There are certain limitations I had faced during my summer project,

which are

IT S VERY HARD TO TAKE APPOINTMENTS OF EVERY

MANAGER OF DIFFERENT DEPARTMENT DUE TO THEIR

BUSY SCHEDULE .

CUSTOMERS ARE SCATTERED OVER A LARGE AREA

THEREFORE HARD TO CONTACT .

CUSTOMERS ARE RELUCTANT TO PREVAIL THEIR

INTERNAL INFORMATIONS .

CONCLUSION

BSP has faced large ups and downs in terms of their productivity

and profitability, in these 46 years. Its continuous improvement in terms

of quality is one of the flagships for the SAIL. Bhilai s contribution in

terms of materials, money and men has been commendable.

BSP has faced the problem of coal products in last year but stil l it

has maintained its productivity as per the plans and schedules. Believing,

the work to be completed with the help of teamwork. 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 fortune of BSP.

With the new challenges, changing market and environment BSP has

sufficient 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 a

caliber to face any obstacles.

BSP has implemented numerous steps for strengthening its

fundamentals such as continuous cost reduction, technology improvement,

lowering borrowing level, persistent efforts to bring about a positive

attitude towards organizational goal among employees through planned

communication, training, optimum utilization of resources.

Commenting on the cost reduction strategy of the organization

Managing Director Mr. Rajendra Prasad Singh says, As the steel horizon

brighten up after a long period of bloom, Bhilai must make the most of it

and emerge as a leader. A true leader has to be alert and proactive all the

time formulating strategies to Out

perform the competitors cost

reduction is one of the such strategies that can give us that competitive

edge.

It is the renowned efforts of the BSP organization which has

success in economizing usage, optimizing resources eliminating wastage

of all kinds, concentrated on growth quality product and service which

ultimately helped in cost of product to earn great amount of profit every

year. Bhilai rededicates i tself to the service of the nation, whose hand

child it is. A new and glorious era leading to the gold has just begun and

horizon is bright.

SUGGETION

As BSP itself one of the most recognized and leading steel industry

in India. Its products are of high quality and it is sold not only in the

domestic area of the country but i ts products are also exported to foreign

countries. Keeping these in view it is not possible to give suggestion

about BSP as it is one of the leading steel producers of country. But I

would like to give suggestion to BSP only that it should increase its

customer s base and market in the domestic area also. Secondly, BSP is

major contribution to export is Rail Mill products, so it should also pay

his attention to other products also.

On the other hand, Marketing of Secondary products needs some

attention from top level management. This department is producing great

amount of revenue every year but again there are some problem facing by

local customers. As per the survey on various consumers of secondary

product at local area it shows that BSP s has some drawback in its

secondary product s marketing strategy.

As per feedback from various local customers of secondary product,

they think that BSP is not giving the proper attention to local customers

and ignores their needs. Apart from that refund policy of secondary

product is also not mature; i t takes very long time to refund the excess

money, given by the customers. Some customers are not satisfy with the

E-Auction policy, they think that the final declaration of selected

customers announce in 5 days after the biding close, which is against the

rule of E-Auction method. Even some customer thinks there is partiality

exist in selection of customer in Tender & E-Auction method as they are

not selected many times even after biding high prices.

So I would like to suggest marketing department of secondary

product that they should take corrective steps against all above problem

faced by local customers and gives an extra attention to local customers.

Steps to Improve the Customer Satisfaction in Local region

(under 100 KM radius)

Uniform Pricing Policy

Tighten the Refund Method

Regular Feed Back System

Reducing the No. of Day of declaring Final Customer in E-

Auction method.

Increase the daily quota of sale. (which currently is 200

tones)

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?

Company prefers purchasing material through fixed

price, tender or forward auction?

Fixed Price

Tender

E - Auction

Fixed Price 62%

Tender 20%

E-auction 18%

How many customers faced difficulty during transaction with

Bhilai Steel Plant.

NO

YES

No difficulty 71%

Yes 29%

Major drawback of BSP s sale policy in sale of

secondary products, customers thinks.

Pricing policy

Ignorance Partiality

Partiality 57%

Ignorance of local customers 34%

Pricing policy 9%

Categorized the input materials purchased from BSP and corresponding quantity?

Billet & Blooms

Slabs

Wire Rods

Scraps

Coal Chemicals

Coal Chemicals 9%

Billets & Blooms 8%

Slabs 15%

Wire Rods 12%

Scraps 56%

Whether the end product is sold through retail outlets / direct sold to end customer, i.e. marketing network of the organization?

Auction Method

Direct Sold

Retail Outlet

Auction Method 2%

Retail Outlet 22%

Direct Sold 71%

Whether the company is engaged in other business apart from steel, if yes then what is that?

Trading

DistributionProduction

Trading 11%

Distribution 12%

Production 77%

This document was created with Win2PDF available at http://www.daneprairie.com.The unregistered version of Win2PDF is for evaluation or non-commercial use only.