bijay laxmi project
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A
PROJECT REPORT
ON
ONLINE MARKETING STRATEGY
OF
ROURKELA STEEL PLANT
at
SUBMITTED TO THE
Biju Patnaik University of Technology
IN PARTIAL FULLFILLMENT OF THE
DEGREE OF MASTER IN BUSINESS ADMINISTRATION
BY
Name : Bijay LaxmiUniversity Regn.N0-0906289042
Under The Guidance of
Name of Internal Guide
Ms Nilima Das
(Faculty Marketing,MBA)
TRIDENT ACADEMY OF TECHNOLOGY
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INTERNAL GUIDE CERTIFICATE
DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION
This to certify that the project work titled MARKETING
STRATEGY OF ROURKELA STEEL PLANT is a work of Bijaylaxmi (Regd.
No.090628904) carried out in partial fulfilment of the requirements for awarding the
degree in Master of Business Administration in Trident Academy of Technology under
Biju Patanaik University of Technology (BPUT) during the academic year 2009-2011.
Prof. Partha Sarathi Das Prof. J.K.Joshi
HOD, MBA Director AcademicsTAT, BBSR TAT, BBSR
Ms Nilima Das
Faculty ,MBA, TACT, BBSR
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EXAMINER CERTIFICATE
This is to certify that this piece of work entitled MARKETING STRATEGY OF
ROURKELA STEEL PLANT submitted on partial fulfillment for degree of MBA is a
record of studies and bonafied project work for degree of MBA is a work carried out by
Bijaylaxmi, Regd no(0906289042), student of MBA programme 2009-2011 of Trident
Academy of Technology, Bhubaneswar.
I wish her all success in life.
INTERNAL EXAMINER EXTERNAL EXAMINER
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DECLARATION
I do hereby declare that this project work entitled A detailed study of Marketing
Strategy of Rourkela Steel Plant submitted by me for the partial fulfillment of therequirement for the award of Master In Business Administration (MBA) is a record of my
own research work. The report embodies the finding based on my learning and
surveillance and has not been submitted earlier for the award of any degree or diploma to
any Institute or University
Place: Bhubaneswar
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Date:
ACKNOWLEDGEMENT
It is really a great pleasure to have this opportunity to describe the feeling of gratitude
imprisoned in the core of my heart.
I convey my sincere gratitude for giving me the opportunity to prepare my project
work in Marketing Strategy Of Rourkela Steel Plant . I express my sincere
thanks to all the staff members of Rourkela Steel Plant.
I am thankful to Ms Nilima Das for her guidance during my project work and sparing
her valuable time for the same.
I am thankful to Head of The Department Prof.Partha Sarathi Das and other faculties of
my department.
I am also thankful to my family for their kind co-operation which made my take easy.
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NAME : BijayLaxmi
Regn.no : 0906289042
PREFACE
This project entitled MARKETING STRATEGY OF RSP is undertaken as a
partial completion for my MBA in Trident Academy Of Technology. This project
revolves around the process of how the secondary products are disposed off, in this project
the system as a process for sale of secondary products is studied and gives a ready
reference to one who is interested to take part in this auctioning process.
The main purpose of this project is to sale the secondary steel products of Rourkela
Steel Plant through online auction and how this process is helpful when compared to the
previous system that is Order Booking System.
During the production of prime products some scraps and defective items are
generated. These are generally used by different small-scale industries for different
purposes. Therefore these secondary products are to be marketed in various ways and to all
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type of vendors, and it is very tough task for Rourkela Steel Plant to satisfy all the vendors
by giving equal preferences to all.
This project makes a deep study on the system followed for marketing in Rourkela
Steel Plant so as to make the company as well as the customers (small scale industries)
beneficiary.
TABLE OF CONTENT
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LIST OF TABLES
Chapter No. Contents Page No.
1. Declaration
Acknowledgement
Executive SummaryIntroduction
Significance of the study
Objective of the study
Research design
Research methodology
Limitation of the study
2. Company Profile
Company overview
Introduction of RSP Major units of RSP
Secondary products of RSP
Profile of organisatio n
Organization structure of RSP
3. Theoretical Framework
o Marketing section of RSP
o Online marketing system
o Pricing strategy
o Current status of company
Presentation and Analysis of data
4. Findings,Recommmendation
5.. Conclusion
7. Bibliography
8. Annexture
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Table No. Title of the Table Page No.
Table No. 2.1 Synopsis of Auction Catalogue 38-39
Table No. 3.1 Example For Payment System of Auction 44-45
Table No. 3.2 Performance of Direct Plan Sales From 2003-09 49
LIST OF FIGURES
Figure No. Title of the Figure Page No.
Fig. No. 1.1 Headquarter of SAIL 9
Fig. No. 2.1 Rourkela Steel Plant 15
Fig. No. 2.2 Units of RSP (COKE OVEN) 16
Fig. No. 4.1 Products With Their Applications 24
Fig. No. 4.2 Organizational Structure of RSP (MKTG) 27
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(INTRODUCTION)
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INTRODUCTION
This project consists of a detailed study of one of the important aspect of the Marketing . The
project is all about the Marketing Strategy Of Rourkela Steel Plant being followed at Rourkela Steel
Plant. It gives an idea regarding the the peril for its success as well;as the strategies it follows for
marketing its product with greater customers satisfaction, quality control, less scrap,and better
facility & Adaptability.
This project covers the theoritical aspect of marketing strategies followed by Rourkela
Steel Plant The project gives a scenic of the strategies taken up by RSP to become a giant
among the steel companies of India ,as well as recommendation given after the research
work is finished. The research was limited to the marketing strategies of RSP. Despite ofcertain limiting factors the research was succesfully conducted.
OBJECTIVES
Objective means the laying down the intention of any doings in advance. thus, the
objectives of our study are :-
To find the view of customers on selling methods of secondary products adopted
by RSP. To find the extent to which price affect the sales sales of secondary products.
To find effectiveness of e-marketing to the customer.
To find the procedures of e- marketing at RSP.
Research Methodology
An apposite methodology is the strength of character of any research work. A
reasearch methodology is a means to analytically solve the research problem. It may beunderstood as a science of studying how research is done scientifically. A research
methodology helps to expand comprehension regarding the methods/techniques of research
and the logic behind the particular problem that is being taken up. Thus, when reasearch
methodology is in question, it is not only the research methods but also the logic behind the
methods that we take up in our process of research. It also includes the reason for taking up
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a particular method and sarifice its alternative method so that the results are proficient
enough of being evaluated by the researcher himself or by others. The accomplishment of
any process depends upon the proper method adopted,and this project is completely
collected through secondary data.
SECONDARY METHOD OF DATA COLLECTION:-
The study of marketing strategies, its management and the level of employee satisfaction at
Rourkela Steel Plant is a descriptive one based on data collected through secondary
data. the methodology adopted was systematic and scientific to some extent. Keeping in
mind various circumstances and constraints the study was completed in an methodical and
organized method.
Research Design
After formulating the research problem, it is required to prepare a research design
that is a abstract structure within which the research would be conducted. The preparation
of such design facilitates research to be as resourceful as possible yielding maximal
information. In other words, the function of research design is to provide for gathering of
pertitent facts and data with nominal expenditure of effort, time and money. In other
words, according to the theories till date, a research design must specify the data collection
part, research instrument and sampling plan.
Data Collection
The undertaking of data collection takes part in, after the research problem is specified and
the design has been precise. While deciding the methods to be adopted to collect the data
,two sources always comes into mind. They are primary sources of data collection and
secondary sources of data collection.This dissertation report completely based upon
secondary data.
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Secondary Sources
Secondary sources of data collection or secondary data refer to those data which are
already been collected for some other uses. They are the data which are readily available to
the researcher. A researcher while using the secondary data for the research purpose has to
select it carefully because everything available in the data would not be relevant for the
research purpose. So various secondary sources are: articles, magazines, journals, internet,
various governmental publications, various foreign governmental publications, reports and
publications of various governmental and non-governmental associations, scholars,
economists etc.
In our study the secondary data is collected with the help of :-
1. Corporate profile of Rourkela Steel Plant.
2. Textbooks and references of Marketing.
3. Different websites.
Limitation Of The Study
Present study was limited to the Marketing Strategies of RSP only.
Research and survey is quite limited and could not be explored to various other
process of RSP.
Data are collected only through secondary sources,and this curtails the scope of
extracting deeper and practical knowelege.
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(company profile)
INTRODUCTION
ROURKELA STEEL PLANT (RSP)
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Fig.2.1
Rourkela steel Plant (RSP), the first integrated steel plant in the Public Sector in India, was
set up with German collaboration with an installed capacity of 1 million tones.
Subsequently, the capacity was enhanced to 1.9 million tones.
The plant was modernized in the mid 1990s with a number of new units with state-of -the-
art facilities. Most of the old units have also been revamped for effecting substantial
improvement in the quality of products, reducing the cost and ensuring cleaner
environment.
The present capacity of the Plant is 2 million tones of Hot Metal, 1.9 million tons of Crude
Steel and 1.671 million tones of Saleable Steel. Its wide and sophisticated product range
includes various flat, tubular and coated products.
VISION OF ROURKELA STEEL PLANT
To be a respected world-class corporation and the leader in Indian Steel business in
quality, productivity, profitability and customer satisfaction.
MOTTO OF ROURKELA STEEL PLANT
RSP has several mottoes. But major mottoes are: -
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Customers satisfaction
Quality control
Less Scrap
Better facility & Adaptability
MAJOR UNITS OF RSP
1. ORE BEDDING AND BLENDING PLANT
The Ore Bedding and Blending Plant have a base mix preparation system with on-ground
bedding, blending and conveying facilities. Set up under the modernization programme to
provide pre-mix feedstock to Sinter Plant I & Sinter Plant II, the plant has a dispatch
capacity of 5,00,000T of material per annum.
2. COKE OVENS
The 4.5 MT coke ovens produce metallurgical coke to feed the blast
furnace. The coke oven are equipped with wagon tipplers, automatic-
handling facilities, coal-blending provision, coke to feed the crushing
and coke screening arrangements.
Fig
.2.2
3. BLAST FURNACE
The Blast furnace iron making process basically consists of the conversion of iron oxide to
iron in liquid form. There are four blast furnaces, which provide the required hot metal for
steel production. Blast furnace 1, 2 & 3 having the capacity of 1000 tones while the
capacity of 4th one is about 1500 tones. The 5th unit has been launched recently.
4. STEEL MELTING SHOPS (SMS)
SMS-I
Apart from a computerized LD process, which has enhanced shop capability, the LA
Vacuum Metallurgy Technique, has been also adopted for secondary refining of steel. This
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facilitates production of special steels for application in electrical machines, pipe making,
tinplate, boilers and auto chassis.SMS-1 produces slabs through casting machine.
SMS-II
The Shop is provided with the latest steel making, secondary refining (ladle furnace
and argon rinsing) facilities and two single strand slab casters to produce 1,355,000
tonnes of steel slabs annually. This is the biggest unit set up under the
modernization program. The shop is provided with automation through three levels
of computerized control, LD gas cleaning and recovery, power distribution system,
water and utility services.
5. PLATE MILL
This is 3.1 MT wide, 4 high reversing mills is equipped with on-line thickness
measurement facilities. Facilities for inspection by customer's nominees, on-line ultrasonic
testing and checking ensure the quality of plates dispatched to the customers. A new
walking beam type furnace with a capacity of 100 Tonnes/hour was installed during the
modernization program for slab heating. The mill has a production capacity of 2, 99,000
Tonnes per annum.
6. HOT STRIP MILL
The facilities of the 1.440 Million Tonnes per annum mill were augmented during
modernization with the installation of:
Two new walking beam type reheating furnace (225 TPH)
Roughing/sizing stand RoVo with automation
Automated coil box
Quick roll change system in Roughing Stand-1 and finishing mills
Coil marking, sampling and conveying systems.
7. COLD ROLLING MILL
This features a modern 5-stand tandem mill and a 4-high 1700-mm reversing mill. The
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tandem mill is equipped with automatic gauge control, x-ray gauge, data logging and
thyristorisation. It produces about 6, 78,000 tonne per annum of cold rolled sheet.
8. ELECTROLYTIC TINNING LINE
The continuous electrolytic tinning line produces a shining tin-coated surface in a variety
of coating thickness. The tinplate shearing lines are equipped with sensitive pinhole
detectors and an automatic sorting system.
9. GALVANISING LINES
Two continuous hot-dip galvanizing lines are equipped with jet-coating facilities. There are
2 multi-roller-corrugating machines, which produce corrugated sheets.
10. SILICON STEEL MILLS
This unit produces steel for the electrical industry through various operations carried out in
sophisticated, continuous/semi-continuous processing lines and a 4-high reduction mill.
Advanced process control and product testing facilities ensure product quality.
11. PIPE PLANTSA highly sophisticated Spiral Welded Pipe Plant (SWPP) is equipped with submerged arc
welding process and produces large diameter pipes. Hydrostatic pressure testing, ultrasonic
testing and eddy current testing are some of the features, which ensure quality control. The
Electric Resistance Weld Pipe Plant (ERWPP) caters to the smaller diameter pipe
consumers. This plant has been recently upgraded to enable it to produce API grade pipes.
12. TRAFFIC & RAW MATERIAL
The Traffic and Raw Material department deals with procurement and supply of raw
materials to various user departments, internal movement of in-process and other material
from one unit to another and dispatch of finished products to outside parties or SAIL stock
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yards in railway wagons. The department maintains 350 wagons, 40 locomotives and a
network of 240 kilometers rail tracks all over the plant.
13. COMPUTERISATIONRourkela Steel Plant has introduced an on-line system named as Production Planning and
Control System (PPCS), which connects various functional departments of RSP into a
single network system. Developed and executed in-house by a team of dedicated
professionals of the Information Technology and Production Planning and Control
Department with the support of the Works and Projects units.
SECONDARY PRODUCTS OF RSP
Secondary steel products are generated during the process of primary production. It is
generated at various pieces in the plants. More the production, more the secondary
products would be produced. The defective products are stored in the secondary steel stock
yard and from there they are supplied to the different venders of RSP. The secondary
products generated in the process of steel making which are -
Re-Rollable scrap
Steel Melting scrap
Industrial scrap
Defectives
Re Rollable scrap:
a) Steel plates cutting scraps.
b) Steel plates shearing scrap.
c) Steel crop ends scrap.d) Concast steel short length slab.
e) Concast steel slab crop end.
f) CI skull scrap.
g) URIN/IS.
h) Steel skull scrap Gr-I.
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i) Side trimming.
j) BF fines.
k) BF drums iron.
l) Steel skull scraps.
Steel Melting Scrap:
Steel skull scrap.
Scrap bales (Bundle scarp from rail lines press).
MS turning and boring.
Side trimmimg.
Scrap slab.
Industrial Scrap:
a) CR steel cutting scraps.
b) CR steel coils end scraps.
c) CR steel cut flat end scraps.
d) CR steel bas cut scraps.
e) HR steel cutting scraps.
f)HR steel cut flat end scraps.
g) HR steel small coils scraps.h) HR steel gas cut scraps.
i) Semi Rolled steel plates.
j) R/D tin plates scraps.
k) Steel pipes end cutting scraps.
l) Steel coils end cutting scraps.
m) Steel test piece scraps.
n) Sticker coils.
o) Steel short plates (below 12 mm).
p) Steel short plates (12 mm & above).
q) Rejected/damage tin plates scraps.
Defectives:
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SEMIS:
MS ingots (Non Silicon)
Pig iron.
BF slag:
BF granulated slag (NTL)
Coke Fraction:
Hard coke.
Mixed breeze coke.
Mixed coke.
Nut coke.
The secondary products which are produced from different mills
are as follows: -
Hot strip mill
Def. chequered Plates
Def. Plates/HR Plates
Def. HR Coils
Semi Rolled Plates
Semi Rolled in coil form
Plate mill
Def. Plates
Short plates
Mixed plates
Silicon steel mill
Def. CRNO Sheet
Cold rolling mill
Def. CR Coils
Def. GP Sheets
Def. CR Sheets
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Def. Galvanized Corrugated Sheet
Rejected Tin Plates Scrap
Def. Tin Plates
HR Small Coil CR Coil Ends
CR Cut Flat End
Black Plate Coil End
CR Sheet Cutting
Pipe plant
There are two type of pipe SW and ERW pipe
o SW pipe (spiral welded pipe)
Pipe and Cutting
Pig Iron
o ERW pipe
End Cutting Of Pipes
COAL CHEMICALS
HP Naphthalene
Anthracene Oil
LCO GR-II
Carsolic Oil
Crud Coltar
Extra Hard Pitch(EHP)
Carbolic Oil
PRODUCTS WITH PROPERTIES & ITS APPLICATIONS
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Fig.4.1
PRODUCTS APPLICATIONS
HR Coil
LPG Cylinders,
automobile, railway
wagon chassis and
many types of high-
strength applications
Plates
Pressure vessels, ship
building and
engineering
structures
ChequeredPlates
Flooring and
staircases in
industrial sectors and
railway platforms
CR Sheets and
Coils
Steel furniture, white
goods, railway coach
paneling, drums,
barrels, deep
drawings and extra
deep drawings
GalvanisedSheets
Roofing, Paneling,
industrial sheeting,
air condition ducting
and structural
Electrolytic
Tin Plates
Container for
packaging of variousproducts including
edible oils and
confectionary items
Silicon SteelSheets and
Coils
Small generators,
starters for high
efficiency rotating
equipment and relaysetc.
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MARKETING DEPARTMENT OF RSPThe marketing department of RSP was earlier called as the Order Department. It only deals
with the secondary products of RSP. The Managing Director Mr. S.N Singh heads the
marketing department of RSP, General Manager Mr. D.P Roy and other executives are also
in charge of the department. During past few years the Marketing Department of RSP had
a huge work force of employees. But due to modernization and introduction of the
computer technology the work force have been reduced to less number of employees. After
the implementation of Single Window System the work process is minimized. This
system is a new system and it has been introduced in 1st April 2004 and for last two years it
has been running successfully. There are two major departments under RSP as the
Secondary Steel Stockyard and central disposal yard.
Earlier till 1974 the Central Marketing Department (CMO) was looking after the
marketing of the scrap products. Marketing of the defective products was also handled by
the CMO till 1998, and though they are also responsible for the marketing of primary
products RSP had produced primary products blindly and due to that there was a huge
increase in scrap and defective products. For that huge loss incurred in end nineties. But
later the individual plants were asked to handle the sale of secondary and the scrap
products generated in their respective units. The present annual revenue generated through
sale of secondary items is to the tune of Rs.320 350 crores.
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ORGANIZATIONAL STRUCTURE OF RSP (MKTG)
Mr. S.N SinghManaging Director (RSP)
Fig.4.2
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Mr. S.S. Mohanty ED
(MM)
Mr. D.P. Roy
GM (Marketing)
Mrs. M. Kumar
AGM (Marketing)
Mr. R. Panda
Jr. Manager
(Marketing)
Mr. A. GuptaDGM (Marketing)
Mr. J. Nayak
Jr. Manager (Marketing)
Mr. S. ChatterjeeDGM (Marketing)
Mr. S. Behera
Sr. Manager
(Marketing)
Mr. I.M. Panda
Manager (Marketing)
Mr. S.N Singh
Managing Director (RSP)
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MARKETING SECTION OF RSP
Marketing section of RSP has four major sections they are as follows: --
Auction and disposal.
Secondary Steel Stockyard
Iron and Steel Secondary.
Coal & Chemicals, Waste Products, SPP
1. AUCTION AND DISPOSAL
This section is concerned with the auction and disposal of the scrap and ideal assets and
also deals with the disposal of secondary products. The secondary products are nothing the
scraps those are generated in the process of steel making. A lot of scraps is generated by
capital repair, periodical repair, construction and changing of machineries and also due to
technological obsolescence. These are to be disposed off either by utilizing it in plant or to
be sold to avoid holding huge inventories as obsolete items. This auction and disposal deals
with two with two sections.
(a) Central Disposal Yard.
(b) Idle Assets.
(a) CENTRAL DISPOSAL YARD
Central disposal yard indicates the area where the materials of different shape and size
declared as scrap of unserviceable or absolute are stored. The materials are collected from
different units of plants. As per the order produced by the Executive Director (Works).
These are collected in daily basis and recorded in a registered called DAY BOOK. The
scope of this procedure order is restricted to all arising of RSP except for those which are
sold by marketing department to ancillary industries and unused arising of RSPs own
products.
MARKETING OF SCRAPS THROUGH CDY
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As mentioned above, Used and rejected items like Used Scrap Rolls, Cable, Empty
Containers, Batteries, Tyres, Zinc Dross, and Small Assets etc. are being sold from Central
disposal yard (CDY).
The maintenance scraps are stored in the CDY. The disposal yard indicates the areas where
the materials of different shapes & sizes are declared as scraps or unserviceable or
obsoletes are stored. Efficient storing & disposing of such material brings good result in
terms of money & systematic movement of these material avoiding pile up and mix up.
The materials are collected from different units of plant as per E.D procedure order. These
are collected on daily basis. The scope of this procedure order is restricted to all arising of
RSP except for those which are sold by marketing department to auxiliary industries &
unused arising of RSPS over product. These materials are collected & complete lots are
formed. These lots are offered to disposal. The pricing committee of RSP fixes the prices
for lots.
The Marketing Dept. Of RSP is doing scrap management. The marketing department
disposes through two modes, Melting and Marketing.
Melting deals with recycling of the scraps and idle assets for using it as a raw
material for the production.
Marketing deals with the selling of the scraps and idle assets through auctioning.
(b)IDLE ASSETS
The ideal assets can be defined as the assets, which have outlived its life. These are not
economical viable. These assets have either gone obsolete due to change in technology,
change in demand, and change in material or due to depreciation. Assets can be declared as
ideal for the company by the department, which it belongs, when the department head- in-
charge declared the assts are ideal. A committee is set for identifying the ideal assets
should identify it, this committee is known as the IDEAL ASSETS FIXACTIONCOMMITTEE. The committee has a chairman, who is the rank of a general manager.
The selling of IDEAL ASSETS is also a very tough task for the company. For that,
Rourkela Steel Plant having a tie up with Metallurgical & Engineering Consultancy India
Limited (MECON).
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. SECONDARY STEEL STOCKYARD (SSSY)
The secondary steel stockyard is the main stockyard of RSP where the secondary products
are kept for sale. It is constructed outside the grill gate along the Bisra Road with an initial
investment of about 1.5 cores in the year 1991-92 and it came into operation on
02/03/1992. Subsequently, the yard has been expanded suiting to the requirement and
necessity of RSP.
ALLOTMENT OF MATERIALS AT SSSY
Everyday SSSY sends the lists of plots/lots available for allotment .The plots/lots are fed to
the computer. All the items and valid sale orders of those products are separately
randomized through computer on that day and lists are generated. Based on random list the
senior plot/lot of the senior. Item is allotted to the senior valid sale order. There are certain
things, which are taken into account. After all the customers have been considered the next
round for allotting materials is started.
The following aspects are checked through computer:
The concerned sale order should be valid with respect to expiry date, suspension of
sale order, cancellation etc.
The party should have submitted the revised price acceptance.
The sale order should be sufficient (i.e. minimum 10 tonne) for allotment of one
wagon.
A unique SSSY no. is assigned (5 digits) to the materials on entry to the stockyard.
The materials coming through truck (10 tonne) are allotted lot nos. that is of 4
digits.
The materials coming through wagons are more in quantity and are allotted plot
nos. that are of three digits.
For entry of trucks into the stockyard identification of the driver, helper & R.C no.
of the vehicle is required.
A private contractor is appointed for loading and unloading the material at SSSY.
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After the payments have been made the release order is issued, which is a financial
document of sale. This contains party name , award price , details, and last date of
lifting .
Materials going out of SSSY, an invoice will be made-then dispatch advice will be
given on which one can take out the material.
On the last day lifting the material DCR (delivery completion report) is issued for
each lot, which come to the finance department.
This DCR is required for refunding EMD money to the customer.
SINGLE WINDOW SYSTEM CONCEPT IN SSSY
95% of the secondary products coming to the SSSY are through rail and only rest comethrough road. The lots are provided on the basis of Internal Dispatch Advices carried by
the products from the respective plants. Then prepares the SSSY memo which consists
following details,
- Internal Dispatch Advice No.
- Plot no. /Lot no.
- Location of the plot / lot
Then, SSSY forward it to the marketing department of RSP which gives the
information of material being successfully stored in the secondary steel stockyard. Then
marketing department takes initiative for the auction in the present system, there is a single
auction. Now SSIs are given preference but not at the cost of price. The party taking part in
the auction is required to deposit Rs.1 lakh in the form of Earnest Money Deposit. EMD
initially deposited will be adjusted towards the final payment. In case of failure of the
purchaser to deposit the Security Deposit and first installment of payment as specified in
acceptance letter, the EMD/SD shall stand forfeited. The bidders who back out will be
additionally debarred from participation in future forward auctions for a period of three
months. The payment of the first installment and the Security deposit should be made 15
days from the date of issue of acceptance letter. After this there is a provision of penalty.
There is 7 days time for payment and ten days time for lifting. The H1 parties are required
to pay 102% of the amount. There is an extra 2% of the payment, this is because of
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adjustment of amount if there any extra quantity of material released to them else this 2%
is refunded to them.
The parties who are issued the sales order to lift their allotted materials from the
secondary steel stockyard. They are required to come there with the Sale Order issued by
the RSP along with the demand draft and an authorization letter from the company. These
documents are to be signed by the finance Department and challan is made. The challan is
to be deposited in the cash counter from where a money receipt is issued. The party has to
submit the money receipt to the finance department, for which they get the release order of
their material. After entering of the truck into the SSSY a weighment is required for the
empty truck for which it has to come in the weighbridge. The loaded truck is again
measured in the weighment bridge. After weighment the truck exits from SSSY. Delivery
Completion Report (DCR) is prepared by the stockyard during the process of lifting and
dispatching of the material to their respective parties. DCR is forwarded to the marketing
department and finance department as an intimation of the delivery being completed.
Through this we have come to an end of the auction, allotment and lifting of the materials
under the Single Window System.
3. IRON AND STEEL SECONDARY
Secondary steel products are generated during the process of primary products. It isgenerated at various pieces in the plants. More the production we do, more the secondary
product we will get. These defective products cannot be visible in necked eyes, but they are
defective products. The defective products are stored in the secondary steel stockyard and
from there it is supplied to the different venders of RSP. This section deals with the
marketing of IRON and STEEL secondary products generated in the process of steel
making.
4. COAL & CHEMICALS, WASTE PRODUCTS
The waste products generated is liquid oxygen, liquid hydrogen, rejected fire clay bricks,
blast furnace flue dust, cinder ash and LD slag. Ferrous sulphate is a waste product that is
generated from the cold rolling mill. It is base material for print industry. It is also used as
manure for opium plants.
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LD slag is another waste obtained from SMS. It is the steel slag and its primary customer is
south eastern railways. Fiue dust is also a kind of waste generated from the blast furnace. It
is a mixture of iron dust and coke dust used in small iron factories, coke briquette plants
etc.
COMPANYS OVERVIEW
Steel Authority of India Limited (SAIL) is Indias largest integrated steel manufacturer
with a capacity of 12mn tons with turnover of
Rs.31800crores. The company is ranked amongst
the top ten public sector companies in India in
terms of turnover. It produces both basic and
special steels catering to domestic construction,
engineering, power, railway, automotive and defense industries and for sale in export
markets. SAIL produces iron and steel at its four integrated steel plants and three special
steel plants, located in the eastern and central regions of India. The location gives them
access to domestic sources of raw materials including the companys iron ore, limestone
and dolomite mines. The Government of India owns 86% and retains voting control of the
company. SAIL has a well-equipped research and development center for iron and steel
(RDCIS) at Ranchi, which helps to produce quality steel and develop new technologies for
the steel +industry. Besides, it has its own in-house center for engineering and technology
(CET), management training institute (MTI) and safety organization at Ranchi.
PRODUCT-MIX
Semis : Bloom, Billets and Slabs
Longs : Structurals, Crane rails, Bars rods and Rebars, Wire rods
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Flats : HR coils and plates, CR coil and sheets, GP/GC, Tinplate, Electrical steel
Tubular : Pipes
Rails : Rails, Wheels, Axles
The companys wide range of long and flat steel products is much in demand in the
domestic as well as the international market. The marketing activity is carried out by the
Companys 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.
STEEL DEMAND IN INDIA
The Steel Industry in India is poised for faster growth in the decade ahead as the Industrial
and economic development of the country gains pace. What however cannot be ignored is
that increasing emphasis on globalization and liberalization will closely link the fortunes of
the Indian steel industry to the global market. The domestic outlook for finished steel has
been estimated as follows:
Domestic Market Growth Outlook
Growth
Trajectory
2006-2007
(million tonnes)
2011-12
(million tonnes)
GDP @ 6.5% 39.5 - 40.7 57.8 - 59.9
The total steel consumption of finished steel in India has been estimated to touch 60
million tonnes from the current level of over 40 million tonnes. It is important to note that
despite the near doubling of the consumption level in the country, per capita domestic
Consumption would continue to be substantially below the world average, which is about
145 kg. Amongst the steel consuming segments, transportation of petroleum products,
household appliances, and automobiles are expected to have the fast growth. However,
even a modest growth of 4.4% growth in the construction sector will translate into a large
increase in actual consumption volumes. Thus, construction will contribute towards a high
proportion of incremental demand in future.
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MAJOR PLAYERS IN STEEL SECTOR
1. Steel Authority of India Ltd. 7. Jindal Stainless Ltd.
2. Tata Iron and Steel Company 8. Kalyani Steel Ltd.
3. Jindal Steel and Power Ltd. 9. Rashtriya Ispat Nigam Ltd.
4. Jindal Iron and Steel Ltd. 10. Lloyds steel Ltd.
5. Jindal Vijayanagar Steel Ltd. 11. Nippon dendro Ispat Ltd
6. Ispat Industries Ltd. 12. Essar Steel Ltd.
QUALITY DOES NOT STOP AT SAIL
The quality of steel is just one area being constantly developed by SAIL. The quality
of the life is other. Reaching out to the needy, bringing water to thirsty, knowledge to
the un-schooled, medicine to ailing. Providing training and agricultural input to
farmers, building roads, and bridges to a better brighter future because concern for
people lies nearby.
ENSURING COMPETITIVENESS
Achieving cost competitiveness remains a prime target of SAILs future plans. Today
in SAIL, the focus of the sustained cost control exercise is on shortening cycle time,
reducing specific usage of inputs, eliminating wastages and improving yields. The
work has begun in right earnest. The challenge before SAIL is to ensure that the
projects are implemented without
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.
CORPORATE SOCIAL RESPONSIBILITY(CSR)
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Apart from providing primary medical, health and educational facilities to the people
living in and around its townships, SAIL has been undertaking several initiatives to
promote art and culture of the country ,with four spots academies under its fold, SAIL
continues to promote spots as an integral part of the companys corporate philosophy.
PRESENT STATUS AND FUTURE PLANS OF SAILPRESENT STATUS AND FUTURE PLANS OF SAIL
SAIL today is one the largest industry entities in India. Its strength has been the diversified
range of quality steel products catering to the domestic as well as the export market and a
large pool of technical and professional expertise. The total turnover of thecompany is
around Rs.72,178 crore during 2007-08. The strategy includes a divestment of non-core
activities restructuring of marketing functions 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. Quality steel products from SAIL have carved a niche for themselves in the
global steel market. The company aims at making its global presence felt through export,
joint ventures and strategic alliances with internationally reputed steel makers in a fast
turnaround, which include financial restructuring and business restricting to focus on core
business of making carbon steel and withdrawing from non-core and non viable activities,
making focus on market requirement, ensuring greater involvement of plants on marketing
initiative, achieving cost leadership through rigorous cost cutting drive and rationalizing
manpower to bring down the total no. of employee to competitive levels are some other
facets of the strategy. SAILs ability to continuously grow in different market conditions
reflected the inherent strength of the company to manage its operations under varying and
fast changing business environment over a long span of time.
ONGOING PROJECT
Total expenditure to be expected to be more than Rs.54,000 crore(US. 12.6 billion).
Financing in manner that SAIL remains with in debt equity ratio 1:1.
Total Capex (capital expenditure) for 2007-08 was 2181 crore and the estimated
capex for 2008-09is Rs. 5000 crore. Capex during Q1 FY09 was 737 crore.
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Expenditure thereafter shall grow multifold and shall continue till FY2012.
EXPECTED OUTCOME
Enhancement of Production Capacity and Market Share.
World Class Technology and Products.
Improved Product mix/ proportion of value added products.
Complete elimination of Semi-finished steel.
Enhanced Pollution control measures, with environmental conservation.
Captive Power generation capacity to increase from 872 MW to 1922 MW.
Objective of Growth Plan
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.
SAILs Growth Plan 2010
Much has happened ever since SAILs Corporate Plan was announced in 2004. Investment
plans for the three speciality steel plants have been firmed up. Company has grown in size
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with the amalgamation of IISCO (now renamed as IISCO Steel Plant). Production targets
have been revised from 19 million tonnes (MT) of steel to about 24 MT. Estimated
investment has increased from Rs 25,000 crore to around Rs 40,000 crore. And the time
period has been squeezed by two years, bringing the targeted year of completion of major
projects from 2010 to 2012.
Saleable Steel Capacities (in million tonnes)
PLANT 2010
Bhilai Steel Plant 6.21
Durgapur Steel Plant 2.85
Rourkela Steel Plant 2.90
Bokaro Steel Plant 6.50
IISCO Steel Plant 2.37
Alloy Steels plant 0.43
Salem Steel Plant 0.36
Visvesvaraya Iron & Steel Plant 0.22
CENTRAL MARKETING ORGANIZATION (CMO)
All SAIL s products except alloy, special steels and stainless steels are marketed directly
by CMO through units in co-ordination with rail, roads and shipping sector to ensure
quality and promote dispatch of products. The main functions of CMO are as follows.
Production planning and dispatch co-ordination with plants.
Export of steel.
Import of coal and other consumables.
Market research
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ONLINE MARKETING SYSTEM
Online Marketing is marketing on the Internet. It is a type of e-marketing, which in turn is
a type of e-commerce. While at first the confusion of experiments, beta versions of
websites, search engines and other online devices cause marketers to consider this world ofthe Internet unknowable and perhaps too unpredictable, there is now a growing body of
work to which marketers are now paying attention in order to develop online marketing
programs. The most known tools to marketers in the mid 2000s are currently tools grouped
into 2 fields: Online advertising and search engine optimization. E-marketing tools used
to drive visitors to a web site include.
Purpose of Online Marketing
When marketing online, the general four step process of marketing is still the guiding idea;
in the online world the character of marketing becomes more deeply a conversation
between a marketer and a market-of-one a concept that is central to the clue train
manifesto. In such a role as a communicator, the online marketer is in a position to build
awareness of her/his company or business in more personal terms than otherwise, and in so
doing enables a more human conversation. Such conversations tend to be more warts and
all and should establish confidence of the potential purchaser in the potential vendor Smith
and Chaffey (2001) claim that Internet technology can be used to focus marketing on the
customer, while at the same time linking to other business operations so as to achieve
profitability.
This can be done by:--
Identifying
The Internet can be used for marketing research to find out customers needs and wants.
Anticipating
The Internet provides an additional channel by which customers can access information
and make purchases - understanding this demand is key to governing resource allocation to
e-marketing.
Satisfying
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A key success factor in e-marketing is achieving customer satisfaction through the
electronic channel, this raises issues such as is the site easy to use, does it perform
adequately, what is the standard of associated customer service and how are physical
products dispatched?
Detractors of this concept of human-to-human contact through online conversations
suggest that companies are going to be careful about marketing in this manner and perhaps
will never really have honest and open conversations as the interests of companies and
businesses are not the interests of potential purchasers. The cluetrain manifesto allows for
this type of thinking suggesting that businesses when marketing in this manner need to be
thinking about more than just making money; if a business is thinking only about making
money, it will become apparent in close online conversations and the market will treat that
business in whatever manner it may as markets can now talk to each other through the
same means marketers talk to potential customers.
AUCTION OF THE MATERIALS
The materials after getting their respective plot and lot numbers are placed for the auction.
It includes the secondary and scrap products. For scrap items they are invited open tenders
from the vendors and for the secondary products they are taking the help of the
Metaljunction.com, which is doing auction through, online. Before this online auction
process they used to followed the Order Booking System,
ORDER BOOKING SYSTEM
In this process 50% of the secondary product material is placed for auction to small scale
Industries (SSI) of ORISSA, while the remaining 25% for open sale and 25% for registered
traders. In this system the venders were not in a position to accept the material at any cost
and RSP was forced to sale the less defective secondary product at a chipper rate. Due to
limited capacity of stock RSP sale the chemicals at a very chip rate to the local venders.
RSP still follow the open sale auction in some cases, If secondary items are fails to make
raise any demand then those material are sale through open auctions.
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TERMS AND CONDITIONS OF ORDER BOOKING SYSTEM
SSI auction It refers to the Small-Scale industries in ORISSA. According to the
rule passed by the Directorate of Industries of Orissa, 50% of the material should
be kept for SSI. There was a security deposit of Rs 50,000 to take part in the
auction and that amount will be adjusted from the material price.
Open Sale It refers to all the parties throughout India, so that all the vendors who
are interested in auction can participate. The tender notice issued through leading
newspapers, chambers of commerce, etc. Those customers who bids in auction sale,
they have to deposit Rs 50,000 as security before 7 days of the auction sale.
Registered traders RSP adopted a policy of enlisted registered traders in the
year 1976. During 1979- 80 to 1993 94 there was 59 registered traders. Again in
1994 95 another 58 traders were enlisted. For registered traders 25% of the total
amount availability of the material is kept reserved, and the security of Rs
50,000.
But now the system has changed completely. As it has mentioned that they are followed
online auction to their secondary products. For this system Rourkela Steel Plant has to pay
1% as a commission to it. The system provided by metaljunction.com generates maximum
revenue for Rourkela Steel Plant with least outlay of the materials. This system has been
effect of use to RSP from the year 2003 04. We can compare the revenue generation and
sales of material by the old system without metaljunction.com and the system of
metaljunction.com (new system).
Not only for selling the product but also for buying different items, raw materials
the auction takes place. There are five different system/junction for perform five different
auction system.
They are:-
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Metal junction This system promotes the sale of secondary products. It is a forward
auction. Here price keeps on increasing.
Buy junctionThis system involves for the procurements of materials for SAIL. It is a
reverse auction. Here price keeps on decreasing.
Coal junction This system promotes the sale of coal (refinery form of coke). It is also a
forward auction.
Auto junction - This system is meant for selling of reprocess vehicles. It also comes under
forward auction.
EPS (Electronic piquipment system)- This system is a part of the buy junction. This is
meant for small items whose value is less than 1crore.
But in Rourkela Steel Plant there is only one junction which responsible for the
marketing of the secondary products and other materials is known as metal junction
METALJUNCTION SERVICES LIMITED
Metaljunction.com private, Ltd (MJ) is a 50:50 joint venture ofTATA Steel and SAIL.
Founded in February 2001, it is today India's largest e-commerce company (with e-
transactions worth Rs 9,131 crore) and runs the world's largest e-marketplace for steel. The
steel supply chain in India has been transformed by the company, which has improved the
efficiency, transparency and convenience with the way in which steel, especially secondary
steel, is bought and sold.
Over 3,500 buyers and scores of public sector and private sector companies today buy and
sell products using the convenience, transparency and efficiency offered by metal junction.
In September 2005, metal junction was awarded ISO 9001:2000 certification by Det
Norske Veritas, Netherlands. The certification covers the quality management system
standards of the company for e-sales, e-sourcing, channel financial services and software
solution services.
www.metaljunction.com
Provides e-selling services for the following materials:
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i) Preparing Catalog- Showing/giving least of the secondary product which is included
for auction.
ii) Preparing Pricing least- Showing/giving least of the cost of the respected product.
SYNOPSIS OF CATALOGUE
Table.2.1
FA Number FA/08-09/008
FA Date 15.04.2008(Tuesday)
ItemDescription
Iron & Steel items from SSSY
ItemSpecification
As per lot list
Quantity &
No. of Lots
2754.952 MT in 73 Lots
EMD Amount
& last dateOf
submission
Rs 1,00,000/- to be submitted by 14.04.2008
Bidding Basis Rs/MT(Only basic price is to be quoted)
.Excise Duty @ 14.42% extra.
Sales Tax CST @ 3% against C From/OST@ 4% extra
Entry Tax @ 1% extra for inside State Of OrissaSecurity
Deposit
5% of the lot value
Payment in
Installment(s) One installment
Payment
Date/Schedule
10 days from the day following the date of Issue of Sale Order
Delivery Time 20 days from the day following the date of issue of
Sale order.
Penalty ForLate Payment
In case of delayed payment ,further 7 days time with 1% penaltyand there-after penalty will be 3% for 7days more with prior
permission from SAIL,RSP.Penalty for
late Payment 1% per week or part there of
Special
Remarks
All participants should furnish their PAN/TIN No.s compulsorily
for taking part in the auction.
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2. During-auction process - In this process auction takes place.
Bidders are bidding for different secondary items.
Role Of Bidder
The bidder would participate in the auction with the aim of bidding to secure the
auctioned item in the auction.
The bidder would be provided access to the auction through a User ID protected by a
password. The bidder needs to ensure that the User ID and Password is not
revealed to unauthorized persons.
Bidders are also requested to change the password allocated to them by the service
provider to keep their confidentiality. However it would be bidders sole responsibility
to ensure the security and privacy of the same and he/they would not hold the
client/service provider responsible in any manner whatsoever for any misuse of these
user IDs and /or password .access to the general rules and regulation and the letter of
interest .Payment of Earnest Money Deposit (EMD)as decided by the client before the
start of forward auction will be one of the necessary conditions for participating in the
auction.
BIDDERS hereby confirm that they shall commit to lift the item (being bid for) at the
price entered by them in the auction engine AND at the terms and conditions specified
herein by the Client. All Prices entered shall be legally binding on the bidders. Bidders
are strongly advised to exercise due diligence while placing bids. Failure to honor the
bids placed during online bidding shall render the bidders liable for penal action as
deemed fit by Client/ Service Provider.
In the event of winning an allotment in the auction mechanism, the bidder shall
commit to fulfill outlined obligations under the contract.
The bidders shall bid on the terms specified by the client & place their bid in the
auction engine in the manner specified by Service Provider. The bidders shall not
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stipulate any conditions on their own unless the terms of the client ( the clients terms
& conditions) expressly permit such conditions being stipulated by the bidder. Bids
entered with conditions attached shall be considered Conditional bids & service
provider retains the right of rejecting these bids even without intimating the client.
CONDUCT OF THE AUCTION
Only those bidders who have been approved by the client and handed over
stamped and manually signed General Rules and Regulations governing conduct of on
line auction along with Letter of Interest, required EMD amount and other necessary
documents to the Client/ Service Provider prior to the start of online auction will
be given Login ID and PASSWORD to enable them view and participate in online
auction.
The Auction shall be conducted on pre-specified date. The Key Terms
pertaining to the conduct of Auction such as START TIME, DURATION,
END TIME AND AUTO EXTENSION FACILITY shall be specified
separately for each Auction.
Service Provider retains the right to cancel or reschedule the auction, with
approval of the competent authority of the client
The duration of auction may also vary from the pre-specified period of time either on
account of termination of the auction by service provider on the advice of the client
Or
In case of situation where it is felt that continuance of the auction proceeding is
prejudicial to the smooth conduct and/or the i.e. terms integrity of the auction process.
Or
Due to Auto Extension during the auction, duration may increase from specified
period.
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END TIME
It is the fixed time duration of 30minutes for a normal online auction, but there are
other factors which can affect the end time like inactivity time and auto extension time.
AUTO EXTENSION FACILITY
It shall be specified separately for each Auction. Generally 3 minutes auto extension
facility is given at the last minute to remove any sort of biasness in the auction. This
continues until no bids are paced in the specified period i.e., last 3 minutes. The
customer bidding the highest i.e. H1 price is issued the sales order. However, while
issuing the sales order price matching privilege is done for SSIs and they are given
priority.
3. Post Auction Process
After the online auction is over the H-1 or the Highest Bidder is identified and material is
sold to that bidder But while finding out the highest bidder, there are various other factors
that are considered.
If the amount that the highest bidder has quoted is more than the amount at which the
product was sold last year then the product is sold to the bidder. But if the amount quoted
by the highest bidder is less than the amount at which the product was sold last year then
the product is not sold to the bidder, and the bidding process is again done.
Terms and Conditions for Sale of Materials through Online Auction
from Rourkela Steel Plant
1. MANEGMENT
The management will mean the Managing Director,
Steel Authority of India limited, Rourkela steel plant or any officer authorized by him to
act on his behalf.
2. PURCHASER
The purchaser will mean the successful tenderer whose tender has been accepted under
the terms of the tender.
3. TERMS AND CONDITION
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a) Tenders are accepted on the assumption that the tenders have inspected the materials
and have known that they are tendering for whether they have first inspected the materials
or not and that the principle of Caveat Emptor shall apply. The sale is on the basis of
AS IS WHERE IS & NO COMPLANT BASIS. The material will be lifted from the site
of storage with all faults and errors in description or otherwise if any. Quantity, Quality,
Size measurement, marks and number stated in the tender documents are approximate and
no warranty or guarantee shall be implied. The tenders are advised to inspect the materials
before offering their prices.
b) Inspection Of Stores: Interested parties will be permitted to see the materials from 9AM
to 5PM daily on working days. Necessary entry passes may be obtained from the
Receptionist/CISF.
4. TENDER FORMS
a) Tenders will be submitted in the prescribed forms which will be made available as
appendix to the invitation to tender. The tenders will sing on each page of the tender
documents, terms and conditions of sales, schedule etc. in token of acceptance thereof.
However, the signature on the tender schedule along shall be deemed to be acceptance of
all terms and conditions of sale & schedule and other documents forming parts of the
tender.
b) Earnest Money: Each tender will be accompanied by an Earnest Money Deposit in the
form of Demand Drafts or Bankers Cheques in the name of
Steel Authority of India Limited, Rourkela steel Plant, Rourkela payable at State Bank
of India at their Rourkela Branch or at any of the Nationalized/Schedule Bank at their
Rourkela Branch. The amount of Earnest Money will be stipulated in the invitation to
tender. Cheque will not be accepted towards earnest money deposit, it is not possible to
adjust earnest money from any sum of money due from the Plant , on account of pending
bill security deposit or earnest money paid towards another tender. Tender without earnest
money will be rejected.
5. SUBMISSION OF TENDER
Tenders will be submitted by the date and time stipulated in the invitation to tender to the
appropriate authority in two parts. In one part ,the tenderer shall enclose the Demand
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draft /B.C towards the Earnest Money in a sealed cover duly superscribed with the tender
no. and date . In the other part the tender documents should be enclosed in a separate cover
super scribing with tender no.& date . Both the covers should be sealed in the bigger
envelope.
6. VALIDITY OF OFFERS
The quotation shall remain valid for 30 days from the date of opening of tender.
7. CONDITIONALTenders will not be considered.
8. LATETenders will not be accepted /considered.
9. PAYMENTOn receipt of the sale order ,the purchaser will deposit the amount as per details indicated
in sale order by demand draft
Payment system (taking the following as an example)
Table.3.1
Sale value(Rs in
lakhs )
Open category SSI UNITS
UP TO Rs. 20
LAKHS
-102% for each lot to be
deposited
-EMD of Rs 1 lakh will be adjusted
-5% of lot value as advance
-thereafter102% of value for each lot
-5% advance will be adjusted in the last lotSAY 30 LAKHS -Rs 50,000/- as 5% advance value (+1
lakh EMD)
-thereafter 102% of value for each lot
-Rs 1,50,000/- advance will be adjusted
in the last lot
-Rs 1,50,000/- as advance
-102% of lot value for each lot
-Rs 1,50,000/- advance will be adjusted in
the last lot.
SAY 40 LAKHS -Rs 1,00,000/- as 5% advance value (+
1 lakh EMD)
-thereafter 102% of value for each lot
-Rs 2,00,000/- advance will be adjusted
in the last of lot
-Rs 2,00,000/- as 5% advance
-thereafter 102% of lot value for each lot
-Rs 2, 00,000/- of advance will be adjusted
in the last lot.
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EXTENTON OF DATE OF PAYMENT
Failure to deposit the value of the material within the period stipulated in the sale order,
successful tenderer is liable to pay penalty as hereunder.
After receive the sale order, which contains the detail information about the materials,
vender name, and dispatch date, payment conditions. The venders get some stipulated
period for lifting the materials as followed.
10 Days for lifting - No penalty
Next 7 days with - 1% penalty
Another 7 days with - 3% penalty
In case the last day is holiday as per company calendar then the last date may extended to
next working day.
10. TAXES AND DUTIES
All taxes/excise duty under the local, state ,central or any other law shall be payable by the
purchaser in addition to the sale value as applicable for each item at the prevailing rates as
on the date of delivery.
11. RELEASE ORDER & DELIVERY
On receipt of full payment from the purchaser the management will issue a release order,
which will enable the purchaser to take delivery of the materials from the stockholder. The
bidder who has signed the tender is required to sing the release order. If this is not possible
and if the tenderer desires to take delivery through his authorized representative duly
attested by the tenderer. The management may ,in its entire discretion decline to act on act
on any such authority shall and it shall be in will be at the purchasers sole responsibility &
risk and no claim shall lie against the management on account , whatsoever if delivery is
affected to wrong person .
a) Weighment of the material would be done inside the plant weighbridge. The weighment
taken in above weighbridge will be final and binding for all purposes. The road delivery
procedure being followed in the plant would be strictly applicable and tenderer would lift
the material as directed by the head of the concerned department or his authorized
representative.
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b) Delivery time for removal of goods:
The delivery of the materials will be effected in situ by the management. Time is the
essence of the contract. The goods sold will be removed by the buyer from the site within
the date specified in the delivery order/sale order. Delivery of the materials will be made
during working hours on all working days on presentation of the delivery order/release
order by the purchaser to the officer in charge. Custodian department who may suspend the
delivery for a particular period of time for want of any clarification or other
technical/operational reasons. The buyer will make their own arrangement for collection
/removal and transportation of the items/lots purchased and will not be entitled to claim
any facilities or assistance for the transport/removal of the goods/lots from the plant
premise. The management may subject the availability; extend at its discretion certain
facilities such as cranes etc. on chargeable basis for handling the lot. The fact that such
application has been made to the management or any delays on the part of the management
to grant such facilities dose not entitle the purchaser for any extension of the delivery date.
12. RAILWAY SIDING FACILITIES
The purchasers will have to pay the management in advance the siding charges as
applicable from the time to time. Necessary security deposit payment will be made by the
purchaser on this account, the purchaser will be liable for the payment whenever the plant,
siding is used under their own arrangement or through the plant.
13. SHORTAGE OF GOODS
If goods are sold in lots and not in number or units, any reference to the quantity, quality,
size, measurement, number and weight in the notice or other documents, then the purchaser
shall no claim against the management for refund of whole or any part of the purchasers
money or for loss, of profit, of interest, damage or other-wise.
14. RE-SALE
Re-sale will not be recognized by the management. Sale orders and release orders will
be made out only in the name of actual purchaser
CONDITIONS UNDER REFUND OF MONEY
The EMD has to pay by the customer to take part in the auction. Those who do not get any
allotment for the material their EMD has refunded by RSP, but for those who got allotted of
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material but failed to make payment for them some penalties are there. The penalty will be
charged to the total amount of material left in the stockyard. If the party fails to make
payment in respect to the total amount of material, then the party will be banned for a period
of 3 months to take any part in the online auction plus from the financial aspects 5% will be
charged on the total lot value subject to Rs 1, 00,000 and the rest amount will be refunded to
the vender after deduct the 5% penalty.
PRICING STRATERGY OF RSP FOR ITS SECONDARY AND SCRAP PRODUCT
The various categories of secondary products, which are homogenous in nature, are sold on
a Fixed price basic. A high-powered standing pricing committee fixed the prices. MD
constituted this committee; this committee plays a vital role because the customers are verymuch depend upon their decisions.
While fixing the price of such scraps, a number of factors are taken into account by the
pricing committee.
a) Marketed feedback from 5 RSPs zonal officers located in New Delhi, Mumbai,
Chennai, Kolkata and Bangalore.
b) Order position of individual items.
c) Stock position of all the items in SSSY as well as in mills.
d) Pricing of comparable items of sister steel plants.
e) General feed back from market, including representation, if any receive from
recognized bodies like Rourkela Chamber of commerce and industries, Rourkela.
f) Bids received against plots/lots offered for sale through best offer.
The prices are revised periodically that is usually once every month taking into
consideration the prevailing conditions, feed back from zonal Offices hand feed back from
the local market.
All the above activity are taking place by the help of feed back which are collected through
market analysis.
RESERVE PRICE
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This is the price decided by the pricing committee of RSP and is based on the prices of the
prime products and the prices of the similar products in the other sister plants. The reserve
price does not affect the sales as the customer is not aware of it. Strategies inside the
company may change after viewing the H1 prices offered by the customers through
meetings and discussions. The reserve price committee of RSP will keep RP in secret in
the organization. RP is fixed by studying the market condition and by analyzing the market
feedback given by the metal junction floor.
RESERVE PRICE COMMITTEE determines reserve price on the basis of several thumb
rules. They are,
Price of the last sales, i.e. recent past is taken into consideration.
Price fluctuation in the market, i.e. market trend is considered
Minimum price limit of 24000 must be satisfied otherwise the goods will be given
for recycling
START BID PRICE
This is the start price from where the auction starts. It has been decided by the RSP on the
notions of pre experiences, current market scenario and the cost factor involved for the
product.
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(FINDINGS & RECOMMENDATION)
FINDINGS
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Current Status of the Company
RSP had sold about nine lakh tonnes of saleable steel (average 1.40 lakh tonnes per
month) during first-half of the current financial year, against its annual target ofabout seventeen lakh tonnes and gained net profit of Rs 800 crore till September
2008.
First time in its history the plant crossed the 2 million tonnes mark in the
production of hot metal during the year 2006-07.
The most significant feature of RSP is that all the major units of RSP records more
than 100% capacity utilization on a consistent basis.
Rourkela Steel Plant (RSP), the public sector steel PSU, achieved best ever
production of hot metal and crude steel during the first eight months of the current
fiscal.
Rourkela Steel Plant (RSP), a unit of Steel Authority of India Limited (SAIL) has
successfully implemented e-payment to its vendors by using the SBI online internet
banking service.
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PERFORMANCE OF DIRECT PLAN SALES: 2003-04 TO 2008-09
Table.3.2
In the last five years RSP has awarded contracts in an average
amount of around Rs 500 million per year (around EUR10 million) to small local
enterprises.
Rourkela Steel Plant (RSP), the public sector steel PSU, achieved best ever
production of hot metal and crude steel during the first eight months of the current
fiscal.
RSP had sold about nine lakh tonnes of saleable steel (average 1.40 lakh tonnes per
month) during first-half of the current financial year, against its annual target of
about seventeen lakh tonnes and gained net profit of Rs 800 crores till September
2008
SUGGESTIONS
FINA
NCIA
L
YEA
R
IRO
N &
STE
EL
SPE
CIA
L
PLA
TE
B.F.
SLA
G
COK
E
FRA
CT
FE
RT
FE
RT
INT
ER
COA
L
CHE
M
WAS
TE
PRO
DUC
T
AUCTI
ON
&
DISPO
SAL
IDLE
ASSE
TS
TOT
AL
2003-
04
244.5
6
14.50 18.71 22.00 4.84 _ 39.11 3.14 26.60 6.66 379.12
2004-
05
198.9
3
23.23 19.24 20.17 6.57 _ 39.17 2.51 17.21 2.85 330.42
2005-
06
179.3
1
37.59 23.32 12.18 6.38 _ 40.03 4.96 24.31 3.64 334.70
2006-
07
311.7
3
101.5
2
24.00 7.23 7.64 _ 74.59 5.04 25.06 9.99 567.60
2007-
08
328.4
0
106.9
7
15.90 2.54 9.12 _ 79.73 3.18 21.81 0.70 568.35
2008-
09
350.7
6
83.82 15.20 0.39 11.4
5
_ 92.19 8.76 13.08 40.03 615.6
8
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Considering all the facts, I think that there is a requirement of making changes in
the policy of RSP. Some of the suggestions are given below.
The marketing strategy of RSP should crucially depend upon customers
satisfaction, so it is necessary to improve.
The practicejust in time delivery should be thoroughly internationalized to give
RSP, the strength to grow under the competitive scenario. The dispatch destination
with the railway in this regard should be given priority.
Customer database to develop incorporating goods for product wise / zone wise
requirement.
RSP should be developing their sales promotion or advertising activities for
awareness their product to the costumer which helps them to attract the costumertowards RSP.
It also the duty of RSP to look after the growth of the small scale industries situated
in the peripheral area, who were mainly depends upon the secondary products of
RSP for their production process.
RSP should develop its production units, which will helps to reduce production of
secondary products and produce more primary products.
It should try to reduce inventories or stock and improve the planning and
scheduling of marketing strategy, i.e. always keep adequate amount of inventories,
which avoid the shortage of supply as well as minimizing the losses due to thrift of
tear.
Time period for banning a customer for defaulting should be reduced from 6
months to 2-3 months.
RSP should take proper steps for perfect market segmentation. Efforts should be
made to find out newer, more profitable market for the products.
Proper shedding at stockyard to avoid deterioration of material quality due to rain
and moisture.
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(CONCLUSION)
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CONCLUSION
Rourkela Steel Plant has completed four decades of existence and during this period there
has been complete shift, moving from a monopolistic state to a totally competitive market
environment. Over the years many changes were initiated. It being the pioneer in
production of wide varieties of iron & steel and also produces diversified varieties of
secondary products during the production process. RSP caters to a varied and wide
spectrum of consumers. There is hardly any industry, which does not utilize its products
either directly or indirectly. Customers are the beginning and end all business pursuits.
Total satisfaction of customers requirement in all aspects is therefore the key to success of
any business organization. Hence RSP now aims at devoting it energies towards producing
quality and creating value for customers. Every operation, however small or big is carried
out for keeping the customers and his expectation in mind.
RSP is taking a lot of steps in marketing of steel. New payers were entered into the
steel market. Each player would want to gain in terms of market share. As a forward step,
a lot of innovations of products have been made to occupy an important market share. RSP
gives priorities to various customers problems, its pricing and distribution policy. RSP nowgives emphasis on making market oriented and customer oriented strategies.
The marketing division of RSP is doing a lot of credit worthiness job in handling
various customer oriented problems. Marketing division has acquired a lot of talents and
these talents are able to deal with various customers needs. These various needs are
collected by the talents of marketing department and take proper steps to meet the
requirement of costumers demand as well as face the current challenges of the market.
Greater marketing orientation has percolated across the organization. The marketing set up
itself has undergone change with re-organization along with product lines, bifurcation of
sales & ware housing functions, use of dealer channel and improving its effectiveness. So,
from the above discussions, RSP has a hope of bright and prosperous future from its
marketing division.
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BIBLIOGRAPHY
BOOK REFERED:
Book: Marketing management
Author: Philip Kotler
Publication: Millennium Edition
Book: Research Methodology (C.R. Kothari)
Author: C.R. Kothari
Publication: Vishwa Prakashan New Delhi (3rd Edition)
Orientation Training Manual(RSP)- Volume 1
Volume 2
Annual Report of R.S.P. 2008
URL:
www.sail.co.in
www.rourkela.nin.in
www.metaljunction.com
www.steel.nic.in
www.sailtenders.co.in
www.goog le.com
ANNEXURE
60
http://www.sail.co.in/http://www.metaljunction.com/http://www.steel.nic.in/http://www.sailtenders.co.in/http://www.sail.co.in/http://www.metaljunction.com/http://www.steel.nic.in/http://www.sailtenders.co.in/ -
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GLOSSARY OF THE TERMS
RSP - Rourkela Steel Plant
SAIL - Steel Authority of India Limit
SSIs - Small Scale Industries
EMD - Earnest Money Deposit
OFA - Online Forward Auction
SSSY - Secondary Steel Stockyard
LDP - Lynz Diwitz Process
DCR - Delivery Completion Report
CDY - Central Disposal Yard
RMD - Raw Material Division
IISCO - Indian Iron and Steel Company
PPCS - Production Planning and Control System
CPP - Captive Power Plants
ISO - International Standard Organization
NMDC - National Mineral Development Corporation
CMO - Central Marketing Organization
MT - Million Tones
BOF - Basic Oxygen Furnace
TEFR - Techno-Economic Feasibility Report
CPFR - Composite Project Feasibility Report
DEPB - Duty Entitlement Pass Book
RINL Rashtriya Ispat Nigam Limited
RDCIS - Research and Development Center for Iron and SteelWTO - World Trade Organiza
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