Beruflich Dokumente
Kultur Dokumente
PROJECT REPORT
Submitted by:
Soumya Shrivastava
JIMI2014B/44
Jaipuria Institute of
Management, Indore
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Authorisation
Date: 24th August, 2015
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Acknowledgement
An endeavor is not complete and successful till the people who make it possible
are given due credit for making it possible. I take this opportunity to thank all
those who have made the endeavor of mine successful for me and for all.
First and foremost I am very thankful to all the officers of Bokaro steel plant
who really helped a lot and guided me throughout my training session, without
their help I would have been unable to complete my project. I would also like to
extend my heartfelt gratitude to the Director, Jaipuria Institute of Management,
Indore, Dr. Harshvardhan Halve, and all the faculty members of the institute for
providing me this opportunity and an excellent infrastructure and facilities
which helped me complete this project. I would like to especially thank my
faculty mentor Prof. Jagdish Bhagwat for his continuous guidance and support.
The completion of my project would not be possible without these people.
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Executive Summary
This study investigates The pricing and Sales of Subsidiary Products and Idle
Assets at Steel Authority of India Ltd. This study is done for SAIL; BSL
The present study was undertaken to see the mode of sale and pricing methods
of Secondary Products of SAIL. Marketing Department is the newest genesis
from the SAIL and attempts to reach their where no corporate has ever ventured
so far.
I was to find how auctions, fixed price and tenders are used for marketing
purposes in BSL.
The various steps involved therein are as follows:
To know about the e-auctions of marketing department.
How they use this technique and 90% marketing and selling is done
through auction and rest will be taken through fixed price selling and
tenders.
I underwent various stages of problems and difficulties to accomplish the task
of my project work but it was a privilege for me to take this opportunity as a
challenge to study and observe " The Pricing and Sales of Subsidiary Products
and Idle Assets at BSL", which is a unit of SAIL.
Bokaro Steel Plant recognizes that leadership is essential for survival in a
competitive environment; it is essential that everyone in the company has a
clear understanding of what customer satisfaction means, if the plant aims to
achieve leadership in customer satisfaction. While improved customer
satisfaction is necessary for ensuring prosperity of the company, it must also be
realized that the companys ability to satisfy its customers would depend on its
ability to continuously improve its profit and growth.
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The basic objective behind the study carried out by me is to study the major
contribution of Secondary products to total sales, which is pre-determines the
success of the company. By selling the Secondary product in local market
company is earning profits. It is also creating an employment in small scale
industries and developing the economy.
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TABLE OF CONTENTS
Authorization
Acknowledgements...
Executive Summary/Abstract.
Introduction 8-9
Core Values...10
Types of Products11-12
Necessity of Selling the ''Secondary Products"..........13
Role of Marketing Department...14-15
Organization Chart of Marketing Department..16
Policies of Marketing17-20
Marketing Strategies of BSL21-22
Planning For Sale of Secondary Product23-24
The Structure of The Process of Sales and Marketing...25
Demand Registration of BSL.26
Sale of Secondary and By-Products27-29
Disposal of Idle Assets..30-31
Sale through Fixed Price...32
E- Auction Sale (Yearly Comparison)33-37
Observations.39-40
Conclusions and Recommendation..41
Bibliography..42
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INTRODUCTION
Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started
taking shape in 1965 in collaboration with the Soviet Union. It was originally
incorporated as a limited company on 29th January 1964, and was later merged
with SAIL, first as a subsidiary and then as a unit, through the Public Sector
Iron & Steel Companies (Restructuring & Miscellaneous Provisions) Act 1978.
The construction work started on 6thApril 1968.
The Plant is hailed as the countrys first Swadeshi steel plant, built with
maximum indigenous content in terms of equipment, material and know-how.
Its first Blast Furnace started on 2nd October 1972 and the first phase of 1.7 MT
ingots of steel was completed on 26th February 1978 with the commissioning of
the third Blast Furnace. All units of 4 MT stage have already been
commissioned and the 90s' modernization has further upgraded this to 4.5 MT
of liquid steel.
The new features added in modernization of SMS-II include two twin-strand
slab casters along with a Steel Refining Unit. The Steel Refining Unit was
inaugurated on 19th September, 1997 and the Continuous Casting Machine on
25th April, 1998. The modernization of the Hot Strip Mill saw addition of new
features like high pressure de-scalers, work roll bending, hydraulic automatic
gauge control, quick work roll change, laminar cooling etc. New walking beam
reheating furnaces are replacing the less efficient pusher type furnaces. A new
hydraulic coiler has been added and two of the existing ones revamped. With
the completion of Hot Strip Mill modernization, Bokaro is producing top quality
hot rolled products that are well accepted in the global market.
Bokaro is designed to produce flat products like Hot Rolled Coils, Hot Rolled
Plates, Hot Rolled Sheets, Cold Rolled Coils, Cold Rolled Sheets, Tin Mill
Black Plates (TMBP) and Galvanized Plain and Corrugated (GP/GC) Sheets.
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Bokaro has provided a strong raw material base for a variety of modern
engineering industries including automobile, pipe and tube, LPG cylinder, barrel
and drum producing industries.
Directions
Bokaro Steel is working towards becoming a one-stop-shop for world-class flat
steel in India. The modernization plans are aimed at increasing the liquid steel
production capacity, coupled with fresh rolling and coating facilities. The new
facilities will be capable of producing the most premium grades required by the
most discerning customer segments.
Brand Bokaro will signify assured quality and delivery, offering value for
money to the customers.
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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Core Values
Customer
Satisfaction
Concern for
People
Consistent
Profitability
Commitment of
Excellence
TYPES OF PRODUCTS
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In Bokaro Steel Plant, the finished products are categorized into three parts:
1. Prime Products: These are the actual products, which are originally produced for example,
blooms, billets, channels, rounds, angles etc.
2. By-Products: These products are not originally produced by Bokaro Steel Plant, but are
outcomes while producing the prime products. Eg. Methane, tar, ammonium
sulphate, slag, etc.
3. Secondary Products: These are the defectives or rejected materials due to improper mixing of
chemical components or failure to meet the optimum requirements. Scraps
generated inside plant are also termed as secondary products. The secondary
products used here in after will mean ferrous materials generated from various
production units which can either suitably be used for re-melting to produce
iron and products or offered for sale if rendered surplus in production process
for example Defective Heavy blooms, Defective Rails, Rail cutting, Rod
cutting, Scrap etc.
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Following Items fall under the category of Secondary Products:(A) REROLLABLE/IRON AND STEEL SCRAP/BFG SLAG
1. MS SLAB END CUTTING WITHOUT FISH TAIL
2. MS THICLE PLATE CUTTING (25-40 MM) MIXED W.FR.
3. SPILLED HOT METAL (10 MT AND BELOW) SMS ARISINGS.
4. LIQUID NITROGEN.
5. FINE IRON CHIPS FROM IMP (FE-70% APP).
6. FERROUS SIELPHATE LOOSE.
7. BE GRNAULATED SLAJ (BOTH BY FIXED PRICE AND TENDER).
8. LIQUID ARGON.
9. PIG TRON.
10.
(B) OTHERS
1. CARBIDE SLUDGE.
2. U/R AMC/MCB BRICKS.
3. U/R MAJ CHROME MAJ BRICKS.
The net sales realization from all the Secondary products, By-Products and coproducts of BSL is around Rs.600 crores which is quite more than the big
industries. Out of this, Steel Scrap itself brings about Rs.15200 cores of money
every year. Re-production of main products from the secondary products
requires re-melting it again for the required composition of the materials as per
the desired specification.
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AGM(Mktg.)
Sec. Steel Ad & Est, QC, ISO,
DCA, Contract Cell(MM)
Sr. Mgr.
(Mktg.)
Slag, Waste,
Manager
(Mktg.)
Reports, Price
Monitoring, MIS
Jr. Mgr.
(Mktg.)
POLICIES OF MARKETING
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various factors taken into consideration while pricing the re-rollable items can
be enumerated as follows: (a)
(b)
(c)
The average of the prices offered by the bidder during auction is taken as the
basis to fix the prices of materials to be sold through marketing department.
Further the techniques of break-up-pricing are adopted i.e. the larger the
quantity purchased lower will be the prices. This technique encourages the
buyers to purchase larger quantity. Finally the managing director approves the
prices set by the pricing committee. On this basis, a price list is prepared for all
the potential buyers. Price list also indicates the sales tax and Excise duty to be
levied. Thus the interested parties place their orders with the marketing
department on the basis of price list reviewed every month. Every customer is
required to have a security deposit amount of Rs.1 lakh. The payment for the
material required is to be in advance. The material is supposed to be lifted on
the specified date on account of delay the party has to pay the difference in the
prices, if there is any increase in subsequent month.
Standing Pricing Committee:
The committee reviews the price of various products and takes decision in favor
of maximizing the profit. It holds meeting at least once in a month. But the
volatility of the market and pool of different products lead to a number of
meeting of the committee in quick succession.
GM (Utility), Chairman
GM (Marketing), Convener
DGM (Finance), member
DGM (Sales Coordination), member
DGM (Stores), member
DGM (BPP), member
For Scrap goods the DGM (SSD) replaces the DGM (BPP). Rests of all the
members are always present in all the meetings.
GM (Marketing), as per the need, decides the frequency and time of meetings to
be held. Minute report of all the meetings is prepared and it contains the
existing price and the proposed price. The final price is moved to the MD
through the official channel including GM (Marketing), Executive Director
(MM), GM (Finance and Accounts), and ED (Works). After the MDs approval
the price becomes applicable and the circular indicating the revised price is
printed, is issued and distributed to the customers and all the concerned
departments.
DISTRIBUTION
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On the other hand for sale of scraps there is no such policy adopted by Bokaro
Steel Plant. Customers are served on first come first served basis.
CHANNELS
Bokaro steel plant has zero level channels as it directly sells to the customers.
There is no intermediate among producer and consumer. Marketing Department
always remains in contact with the customers extracts information about the
current market situation on the basis of interaction between them.
PRICE FIXATION
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DISPATCH
As the product is manufactured, this department directs the stockyards the mode
of transport to the destination with reference to dispatch program and dispatch
advice is mode.
5 DOCUMENTATION
With the dispatch of product the Finance department calculates the total cost of
product as per demand order. Certain receipts and bills quoting the material
code, nature, quantity, and all expenses are sent to connected stockyard. The
product will be then released to the concerned person after proper and complete
payment to the pay-in- authorities is made.
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PRODUCTS
SECONDARY/BY-PRODUCTS
CMO (KOLKATA)
BSL MARKETING
METHOD OF SELLING
E-AUCTION SALE
TENDER
STEEL
IDLE ASSETS
PRICING
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MODE OF SALE
E-auction
Fixed
Price
Inter
Plant
Tender
Transfer
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EMD
@ 2 % of lot value.
Price Fixation
Reserve Price Fixation Committee (RPFC) for Sale through
Electronic Auction / Open Tender
A Reserve Price Fixation Committee (RPFC) constituted with the
approval of the Competent Authority for deciding the Reserve Price.
The RPFC may consist of representatives from the Marketing Department
/ Materials Management /Department, Finance, Dealing Department
/Operations & Chief Executives Nominee, if any.
RPFC may be headed by an executive not below the rank of E-7.
RPFC shall recommend the Reserve Price (RP) for each category of
material, which shall be forwarded in a sealed cover to the head of
Materials Management Department / Marketing Department and kept
confidential
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Observations
Low price, better service and high quality are the major concerns that the
customers looks into for preferring a particular steel plant for secondary and byproducts.
9. Most of the customers are not happy with the volume limit that they
receive from BSL.
10. Most of the customers responded that they are satisfied with the
information provided by BSL about the bids to be taken place but few
customers are also not happy with the information provided by BSL.
11. Majority of the customers responded that they are happy with the
order handling procedures of BSL.
12. Majority of the customers responded that that they are satisfied with
the overall experience while dealing with Bokaro Steel Plant.
The main issue attached with Bokaro Steel Plant secondary and by-products is
that most of the customers finds its price higher than the other brands of
secondary and by-products available in the market. Since, customers are now
conscious about cost cutting measures so they other brands over BSL.
Local market is one of the most important advantages than BSL is
enjoying over a period of time but, due to set up of new steel plants in nearby
places few years from now it will no longer be an advantage for BSL. So, BSL
should have to work on decreasing the price of its secondary and by-products
and also increase its quality.
It was found that most of the customers are purchasing secondary steel
and by-products from BSL. So, BSL should have to work on the increase of
production of these products and also decrease the price of those products to be
competitive in the market.
Most of the customers are also purchasing secondary and by-products
from TATA steel because of the lower price and easy method of purchase
although TATA steel is far from Bokaro district because of better service. So,
Bokaro steel plant should have to work on to provide better service for
customers.
Since, majority of customers dont register complain about the problem
they faced during trading although most of the problem that are registered got
executed. Hence, BSL should have to work on to improve confidence of
customers on them.
Benzene, Toluene and Ammonium sulphate are having highest
consumption among by-products. So, products of mainly these by-products
have to be increased.
The BSL secondary and by-products customers are having faith in the
quality of these products. So, this should be maintained at any cost and BSL
should have to decrease the price of its secondary and by-products to maintain
its customer base.
BIBLIOGRAPHY
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Books referred
Kotler Philip, Keller Kelvin, Koshy Abraham, Jha Mithileshwar;
Marketing Management; New Delhi, Published by Dorling Kindersley
(India) Pvt. Ltd.
Malhotra N.K. ,Marketing Research- An applied orientation, New Delhi,
Prentice Hall of India Private Ltd.
Magazine published by SAIL
Training manual
Books of organization
Websites referred
www.sail.co.in
www.metaljunction.com
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