laxmikant bsp project

8/6/2019 Laxmikant Bsp Project

1/91

A

PROJECT REPORT

ON

Marketing and Strategic Planning Of SAIL (BSP) &

Customer Satisfaction Index

BHILAI STEEL PLANT

STEEL AUTHORITY OF INDIA LIMITED

BHILAI STEEL PLANT

SUBMITTED IN PARTIAL FULFILLMENT FOR

IISCS

(2009-2011)

1


2/91

GUIDED BY: SUBMITTED BY:

Rahul Arora Vivek Kumar Gupta

STEEL AUTHORITY OF INDIA

LIMITED

BHILAI STEEL PLANT

Certificate This is to certify that the Project Report entitled

Marketing And Strategic Planning Of SAIL

(BSP) & Customer Satisfaction Index in BHILAISTEEL PLANT submitted by Vivek kumar Gupta

for the partial fulfillment of IISCS Indore degree

from University Of Sikkim manipal is abonafide presentation under my guidance and

supervision.

I wish them the best of luck for future.

Guided By

2


3/91

RAHUL ARORA

INTERNAL GUIDE, BSP

DECLARATION

I VIVEK KUMAR GUPTA Roll no.520942762 student of

MBA ivth semester of Department of Management

Studies, Indore Indira school of career studies,

Indore (MP) hereby declare that the project report on

MARKETING AND STRATEGIC PLANNING OF SAIL

AT BHILAI STEEL PLANT (BSP), is an original and

authenticated work done by me. I further declare that it

has not been submitted elsewhere by any other person in

3


4/91

any of the University for the Award of any degree or

diploma.

VIVEK KUMAR

GUPTA

ACKNOWLEDGMENT

We would like to take the opportunity for expressing our sincere thanks and

gratitude to Mr. Rahul Arora, Dy Mgr (M&SP), for his support and able guidance

4


5/91

in giving us a detailed insight on marketing of secondary and by-products in Bhilai

Steel Plant and for imparting knowledge and skills required for the successfulcompletion of the project.

We would also like to thank Mrs.Shusmita Dey (Secondary Product) &

Mr.Rahul Arora (Coal chemicals) for their kind cooperation and giving us the

detailed information about the marketing practices in the organization which were

necessary for the completion of our project.

CONTENTS

CHAPTER -1 6

. Introduction 6

. Organizational Overview 10

5


6/91

a) About SAIL 10

b) About BSP 19

CHAPTER -2 29

. Marketing in the organization 29

CHAPTER -3 40

. By-Products 40

. Secondary Products 56

CHAPTER -4 64

. Analysis of C.S.I 64

CHAPTER -5 80

. SWOT Analysis 80

. Conclusion 81

. Biblography83

CHAPTER 16


7/91

1. Introduction

During the last few years, measuring consumer satisfaction has acquired a very

important role in organizational studies conducting by the marketing department of

various organizations. Many companies have begun to appreciate consumer

satisfaction as a key variable for gaining a competitive advantage.

The importance of studying and understanding consumer satisfaction is principallybased on the impact of this variable on brand loyalty. In comparison to the

innumerable efforts made to study the satisfaction of end consumers, very little has

been done with respect to the study of the industrial buyers satisfaction. The

business-to-business activity sector presents a series of particular features; for

instance, the purchase decision process is a much more complex and formal than

in the case of end consumer one. No further mention is made to a single person

deciding, but to a buying center including several persons who bear upon the

buying decision process on the other hand, industrial buyers are generally

professional buyers who are technically competent.

Therefore, this project investigates the satisfaction of industrial buyers as well as

the relationships between their perceptions of the product/service quality and their

satisfaction and aims to find out the gaps existent in the current service provided

by the plants.

7


8/91

Objective of the Study

The project mainly concentrates on the evaluation of the overall customer

satisfaction level with the services provided by BSP to its secondary and by-

products customers.

The project report also aims at analyzing the existing gaps in the services provided

by the plant to its customers on the basis of judging the satisfaction and

importance level or say expectation level of the customer with that parameter of

the service quality.

On the basis of servqual (service quality) model and the IP map the project aims at

finding out the parameters which need to be concentrated on by the management in

order to improve the satisfaction level of the customers with the overall services

provided by the plant.

8


9/91

Research Methodology

a. Sample Selection

The project required gauging the satisfaction level of nearly 200 customers who

are directly involved with BSP for the procurement of secondary products and by

products produced by the plant in the process of generation of the primary

products.

For conducting the survey we selected a list of 25 customers as per our

convenience with a good mix of customers of secondary as well as by-products so

as to reflect the sentiments of the whole sample frame as closely as possible. The

sample of 25 local customers in the Bhilai-Raipur region consisted of 15

secondary product based customers and 10 by-products based customers.

b. Data Collection

A questionnaire was developed as part of a larger effort to study the satisfaction of

the customers with service levels of the plant provided to secondary and by-

products customers. The questionnaire included the eleven specific parameters

identified from the literature which could best reflect the service quality. The

respondents were asked to indicate, on a seven-point itemized rating scale, thelevel of satisfaction of each item in motivating them to have the perception of

being satisfied (1 = highly dissatisfied, 7 = highly dissatisfied ) as well as to

indicate th level of importance of the parameters on seven point likert scale

9


10/91

where(1 = low, 7 = high importance level). In addition, they were asked to

indicate, on a five-point scale, how satisfied they were with the overall servicelevels.

The survey required gathering of information about the current perceptions and

expectations of the customers so as to have a good idea about the satisfaction level

of the customers with the services of BSP and also have a good insight into the

parameters that need improvement for improving the services further.

Since all the customers of BSP are linked to BSP through B2B interaction, so for

collection of primary data we choose in-depth interview along with a questionnaire

as the tool for data collection.

For the collection of secondary data we referred the SAIL website and the

information provided by the marketing department along with the data available

with the auctioning site which is in a joint venture with SAIL for the purpose of

auctioning of secondary and by-products.

10


11/91

2.Organization Overview

About SAIL

Steel Authority of India Limited (SAIL) is the leading steel-making company in

India. It is a fully integrated iron and steel maker, producing both basic and special

steels for domestic construction, engineering, power, railway, automotive and

defence industries and for sale in export markets.

Ranked amongst the top ten public sector companies in India in terms of turnover,

SAIL manufactures and sells a broad range of steel products, including hot and

cold rolled sheets and coils, galvanized sheets, electrical sheets, structural, railway

products, plates, bars and rods, stainless steel and other alloy steels. SAIL

produces iron and steel at five integrated plants and three special steel plants,

located principally in the eastern and central regions of India and situated close to

domestic sources of raw materials, including the Company's iron ore, limestone

and dolomite mines. The company has the distinction of being Indias largest

11


12/91

producer of iron ore and of having the countrys second largest mines network.

This gives SAIL a competitive edge in terms of captive availability of iron ore,limestone, and dolomite which are inputs for steel making. SAIL's wide ranges of

long and flat steel products are much in demand in the domestic as well as the

international market. This vital responsibility is carried out by SAIL's own Central

Marketing Organization (CMO) and the International Trade Division. CMO

encompasses a wide network of 34 branch offices and 54 stockyards located in

major cities and towns throughout India.

SAIL has a well-equipped Research and Development Centre for Iron and Steel

(RDCIS) at Ranchi which helps to produce quality steel and develop new

technologies for the steel industry. Besides, SAIL has its own in-house Centre for

Engineering and Technology (CET), Training Institute (MTI) and Safety

Organization at Ranchi. Our captive mines are under the control of the Raw

Materials Division in Kolkata. The Environment Management Division and

Growth Division of SAIL operate from their headquarters in Kolkata. Almost all

our plants and major units are ISO Certified.

VISION:

To be a respected world-class corporation and the leader in Indian steel business

in quality, productivity, profitability and customer satisfaction.

12


13/91

We still have a number of persons in our country in

steel Authority of India Limited (SAIL).. They have thewill to excel and transform the country, given a long term

vision

Dr. A.P.J. ABDUL KALAM

CREDO

We build lasting relationships with customers based on trust and

mutual benefit.

Uphold highest ethical standards in conduct of our business.

We create and nurture a culture that supports flexibility, learning and

is proactive to change.

We chart a challenging career for employees with opportunities for

advancement and rewards.

We value the opportunity and responsibility to make a meaningful

difference in people's lives.

13


14/91

MAJOR UNITS

INTEGRATED STEEL PLANTS

Bhilai Steel Plant (BSP) in Chhattisgarh

Durgapur Steel Plant (DSP) in West Bengal

Rourkela Steel Plant (RSP) in Orissa

Bokaro Steel Plant (BSL) in Jharkhand

SPECIAL STEEL PLANTS

Alloy Steels Plants (ASP) in West Bengal

Salem Steel Plant (SSP) in Tamil Nadu

Visvesvaraya Iron and Steel Plant (VISL) in Karnataka

Subsidiaries

Indian Iron and Steel Company (IISCO) in West Bengal

Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

Bhilai Oxygen Limited (BOL) in New Delhi

Background & History

The Precursor

14


15/91

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 theinfrastructure for rapid industrialization of the country. The steel sector was to

propel the economic growth. Hindustan Steel Private Limited was set up on

January 19, 1954. The President of India held the shares of the company on behalf

of the people of India.

Expanding Horizon (1959-1973)

Hindustan Steel (HSL) was initially designed to manage only one plant that was

coming up at Rourkela. For Bhilai and Durgapur Steel Plants, the preliminary

work was done by the Iron and Steel Ministry. From April 1957, the supervision

and control of these two steel plants were also transferred to Hindustan Steel. The

registered office was originally in New Delhi. It moved to Calcutta in July 1956

and ultimately to Ranchi in December 1959.

A new steel company, Bokaro Steel Limited, was incorporated in January 1964 to

construct and operate the steel plant at Bokaro. The 1 MT phases of Bhilai and

Rourkela Steel Plants were completed by the end of December 1961.

The 1 MT phase of Durgapur Steel Plant was completed in January 1962 after

commissioning of the Wheel and Axle plant. The crude steel production of HSL

went up from .158 MT (1959-60) to 1.6 MT. The second phase of Bhilai Steel

Plant was completed in September 1967 after commissioning of the Wire Rod

Mill. The last unit of the 1.8 MT phase of Rourkela - the Tandem Mill - was

commissioned in February 1968, and the 1.6 MT stage of Durgapur Steel Plant

was completed in August 1969 after commissioning of the Furnace in SMS. Thus,

15


16/91

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 MTin 1968-69 and subsequently to 4MT in 1972-73.

Holding Company

The Ministry of Steel and Mines drafted a policy statement to evolve a new model

for managing industry. The policy statement was presented to the Parliament on

December 2, 1972. On this basis the concept of creating a holding company to

manage inputs and outputs under one umbrella was mooted. This led to the

formation of Steel Authority of India Ltd. The company, incorporated on January

24, 1973 with an authorized capital of Rs. 2000 crore, was made responsible for

managing five integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and

Burnpur, the Alloy Steel Plant and the Salem Steel Plant. In 1978 SAIL was

restructured as an operating company.

SAIL TodaySAIL today is one of the largest industrial entities in India. Its strength has been

the diversified range of quality steel products catering to the domestic, as well as

the export markets and a large pool of technical and professional expertise.

Today, the accent in SAIL is to continuously adapt to the competitive business

environment and excel as a business organization, both within and outside India.

JOINT VENTURESAIL has promoted joint ventures in different areas ranging from power plants to

e-commerce.

16


17/91

NTPC SAIL Power Company Pvt. Ltd.

Set up in March 2001; this 50:50 joint venture between SAIL and the NationalThermal Power Corporation (NTPC) operates and manages the Captive Power

Plants-II of the Durgapur and Rourkela Steel Plants which have a combined

capacity of 240 MW.

Bokaro Power Supply Company Pvt. Limited

This 50:50 joint venture between SAIL and the Damodar Valley Corporation

formed in January 2002 is managing the 302-MW power generation and 1880

tonnes per hour steam generation facilities at Bokaro Steel Plant.

Bhilai Electric Supply Company Pvt. Limited

Another SAIL-NTPC joint venture on 50:50 basis formed in March 2002 manages

the 74 MW Power Plant-II of Bhilai Steel Plant which has additional capacity of

producing 150 tonnes of steam per hour.

UEC SAIL Information Technology Limited

This 40:60 joint venture between SAIL and USX Engineers & Consultants, a

subsidiary of the US Steel Corporation, promotes information technology in the

steel sector.

Metaljunction.com Private Limited

a joint venture between SAIL and Tata Steel on 50:50 bases, this company

promotes e-commerce activities in steel and related areas.

SAIL- Bansal Service Center Pvt. Ltd.

SAIL has formed a joint venture with BMW industries Ltd. on 40:60 basis to

promote a service centre at Bokaro with the objective of adding value to steel.

17


18/91

North Bengal Dolomite Limited

A joint venture between SAIL and West Bengal Mineral DevelopmentCorporation ltd on 50:50 basis was formed for development of Jayanti Dolomite

Deposit, Jalpaiguri for supply of Dolomite to DSP and other plants.

Romelt -SAIL (India) Ltd.

A joint venture between SAIL, National Mineral Development Corporation

(NMDC) and Russian promoters for marketing Romelt Technology developed by

Russia for reducing of iron bearing materials, which is carried out with carbon in

single stage reactor with the use of oxygen.

Ownership and Management

The Govt. of India owns about 86% of SAIL's equity and retains voting control of

the Company. However, SAIL, by virtue of its "Navratna" status, enjoys

significant operational and financial autonomy.

SAIL - Into the Future

Modernization and Expansion Plan of SAIL Corporate Plan, 2012

Corporate Plan, 2012 (CP12) was formulated in 2004 for 4 integrated steel plants

for increase in Hot Metal production to 20 Mt by 2012. After merger of in IISCO

Feb 06, the Hot Metal production Plan was revised to 22.5 Mt by 2012.

Expansion of Special Steel Plants was also included. Besides capacity

18


19/91

enhancement, the plan also addresses the need of SAIL Plants towards eliminating

technological obsolescence, energy savings, enriching product mix, pollutioncontrol, developing mines & collieries to meet higher requirement of key raw

materials, introduce customer centric processes and have matching infrastructure

facilities in the Plant to support higher production volumes. Investment to the tune

of Rs 34,982 crore was envisaged under the Corporate Plan.

Objective of Corporate Plan 2012

100% production of steel through Basic Oxygen Furnace (BOF) route

100% processing of steel through continuous casting

Value addition by reduction of semi finished steel

Auxiliary fuel injection system in all the Blast Furnaces

State-of-art process control computerization / automation

State-of-art online testing and quality control

Energy saving schemes

Secondary refining

Adherence to environment norms

Expansion Plan, 2012

The Corporate Plan, 2012 was reviewed by Honble Minister of Steel in Jul06,

wherein it was decided to take up the Expansion of Integrated Steel Plants and

19


20/91

Special Steel Plant in one go basSed on Composite Project Report (CPFR). By that

time Expansion of IISCO Steel Plant and Salem Steel Plant was already approvedin-principle based on the Techno-Economic Feasibility Report (TEFR) of

MECON. For the Expansion of other four integrated Steel Plants, MECON was

assigned the job of Preparation of CPFR in Aug06. The CPFR for the four

integrated steel plants was prepared by MECON. In principle approval has been

accorded by SAIL Board for the expansion plans of IISCO Steel Plant (Jul06),

Salem Steel Plant (Jun06), Bokaro Steel Plant (Dec06), Bhilai Steel Plant

(Apr07), Rourkela Steel Plant (May07) and Durgapur Steel Plant (Jul07).

Item

2006-07

(Actual)

Capacity as per

Expansion Plans 2010

Hot Metal 14.61 26.18

Crude Steel 13.51 24.59

Saleable Steel 12.58 23.13

20


21/91

Plant-wise Capacity Envisaged After Expansion (Mtpa)

Plant Hot Metal Crude Steel Saleable Steel

BSP 7.5 7.0 6.53

DSP 3.5 3.0 2.83

RSP 4.5 4.2 3.8

BSL 7.44 7.00 6.53

ISP 2.91 2.5 2.37

SSP - 0.18 0.34

ASP - 0.48 0.43

VISL 0.33 0.23 0.22

Total 26.18 24.59 23.13

About Bhilai Steel Plant

21


22/91

Bhilai Steel Plant (BSP) is a unit of the Steel Authority of India Limited

(SAIL).Bhilai Steel Plant is a pulsating giant in the glorious Industrial context of

India. It came into existence on10th June 1957.When concreting of the foundation

of 1st Blast Furnace, but its original story started on 2nd Feb.1955 when the

agreement with USSR Government prove the possibility of dreams come true

.BSP the functionary of SAIL is a symbol of Indo-Soviet Techno economic

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

Government of India to build up a sound base for industrial growth of the country.

The agreement signed on 2nd Feb.1955 for 1MT production capacity, which rose to

than 2.5 MT (1967) and than to 4MT in 1988. Production of Crude Steel per year.

On 4th Feb.1959, our President, Dr.Rajendra Prasad dedicated Bhilai to the Nation,

by inaugurating the Blast Furnace No.1 for production. Bhilai has never looked

back has steadily grow and modernized day by day.

22


23/91

Bhilai has all along been giving special attention to the employment to the weaker

section. Bhilai has contributed signification to meet the Iron & Steel requirementof the country.

The Steel Plant has 10 coke ovens batteries and 7 Blast Furnace. The plants get his

requisition of raw material and necessary resources by various adjoining centers.

The Iron ore is met from the captive mines, 100 kms. South from BSP. Limestones

also come from the manual mines of Nandini about 25 kms. To the North of the

plant. The need of Dolomite is fulfilled from the quarries of Hirri in Bilaspur

District. Steel plant requires forms of energy, viz electricity, fuel (solid, liquid &

gaseous), steam oxygen, compressed air, chilled water, air blast etc. At Bhilai

main source of electricity in the C.S.E.B grid from the NTPC Korba Station, about

250 kms away. The steel plant has have their own capacity of generating

electricity of 36 MW and 74 MW by power plant 1 & 2 respectively as the

alternative source of power supply to meet emergency load in cases of

interruption(s).

The water source of the Tandula irrigation system from Sheonath River together

with the Gondli and kharkhara water reservoirs situated about 70 km. south of the

plant. In addition, water works has started on Mahanadi project for meeting the

increased requirement of the plant after expansion. There exist extensive

communication systems at the works, which include Auto Telephone Exchange

dispatched communication system, shop-floor loudspeaker system, gas and firesignaling and blocking system of the plant rail transport facilities etc.Seven times

winner of Prime Ministers Trophy for best Integrated Steel Plant in the country,

23


24/91

Bhilai Steel Plant (BSP) is Indias sole producer of Rail and Heavy steel plates and

major producer of structural designs. With an annual production capacity of 3,153MT of saleable steel, the plant also specializes in other products such as wire rods

and Merchant products. All saleable products of Bhilai Steel Plant are under the

ISO umbrella as per BSPs accredit ion with ISO 9001:2000 Quality Management

System Standard. The plants plate Mill, Dalli Mechanised Mines and Rail

Millhave also received ISO:14001 certification for their Environment management

system.

Performance highlights

Resolved, charged up and enthused to take their plant forward on its growth path,

the Bhilai collective unleashed its potential to scale new heights of performance in

2008-09. Not just in volumes or techno-economics of production and development

of new products but also in resource and cost management, knowledge & skill

development of human resources, institutionalisation of Internal Customer

Satisfaction systems, strengthening the Quality Circle movement and building

strong customer-supplier partnerships, spreading the good cheer, all the while, to

more homes and families. Operating above rated capacity in Saleable steel for the

16th successive year and surpassing the 5 MT mark in hot metal & crude steel

production for the third time, Bhilai recorded its best ever production of 5.4MT

Hot Metal, 5.2 MT Crude Steel and 4.5 MT Saleable Steel in 2008-09, registering

growth of 2.3%, 2.6% and 1.4%, respectively over 2007-08.

Remaining focused on reducing costs and generating surplus, the Plant further

improved its techno-economics, reducing its dependence on imported coal, and

24


25/91

increased volume of special steel grades with higher NSR to 63.3% from 48.5% in

the last fiscal.The wisdom of successive leaderships to convert crisis toopportunity and carry out process improvements in a structured manner and a

collective determination to stay at the top has ensured that nothing could arrest

Bhilais growth path. The Plant has earned profits continuously for the last two

decades, even during the last recession. Powered by high-level automation and

integration of its business processes, Bhilai is now all set to join an elite club of

leaner and smarter world-class manufacturers. Advancing from incremental to

large-scale modernization, Bhilai has maintained course in its expansion plans,

incurring a CapEx of more than Rs 800 crore in 2008-09.

Main Products Key Segment Key Customers Market Size

(Million T)

Market

Share

RailsRailway Track Indian Railways 0.776 100%

Plates

Heavy M/c.

Boiler & PV

Line-pipe

water

Line Pipe-

Crude & Gas

Construction/Fa

brication

Export Europe,

FE

Thermax Limited

Indian Oil CorporationLtd.

Essar,Ispat, Tata

Bharat Earth Movers

Limited

Nagarjunha Construction

Co.

BPCL

5.598 22%

Bars, Rods &

Structurals

Wire Rods

Electrode Qlty

Wire drawers

Larson & Turbo Ltd.

Gammon India Ltd.

KEC International

27.015 5.3%

25


26/91

Construction

TMT bars &

Structurals

Limited

National Thermal Power

Corporation Ltd.

Bharat Heavy Electricals

Ltd.

Competitors

Ispat Industries Ltd.

Alloyds Steel Ltd.

Essar Steel Ltd.

Jindal Steel &Power Ltd.

Jindal Strips Ltd.

Uttam Steel Ltd.

National Steel Industries Ltd.

Bhushan Steel & Strips Ltd.

Products of National Importance

BSP has made immense contribution to the national economy by continuously

upgrading the quality of its products to meet customer requirements. It is the sole

supplier of rails to Indian Railways, and has supplied rails whose total length adds

up to more than 7 times the periphery of the earth. It is popularly said that the

nation moves on Bhilai Rails. In 2006 the first consignment of 260 meter Rails, the

longest rail dispatched by any manufacturer in the world, was sent from Bhilai.

26


27/91

BSP has developed the UTS -100 High Strength Vanadium Micro-alloyed rails for

high density, heavy haulage routes.

BSP has also collaborated with the Indian Navy for the development of DMR-

249A (ABA) grade steel for making the first indigenous Aircraft Carrier. The

collaboration with the Navy is expanding and BSP is also making steel for

manufacture of submarines.

As Bhilai products are primarily catering to Infrastructure segment, they are being

used in key applications of infrastructural development for sustaining the growth

of the national economy. It is a matter of pride that BSP is key supplier of quality

steel to many prestigious mega projects of the country. These infrastructure

projects include rail lines, bridges, dams, air / sea ports, refineries, pipelines,

stadiums, hospitals, schools, etc. More importantly many of these projects are bold

intentions of the nation to make a difference in peoples lives. Some of the mega

projects where Bhilai steel is being used are

Mega Infrastructure Projects using Bhilai Steel

Worli Bandra Sea link, 8 lane bridge

340 km J & K Rail link having 64 bridges

Tsunami Rehabilitation Social Infrastructure Project

Barh power Project of NTPC (3x650) MW

Windmills by Suzlon

Lower Subansiri Power Project Assam-Arunanchal border by NHPC

27


28/91

Mumbai Airport

Irrigation projects

Mahanadi Railway Bridge by Braithwhile Burn & Jessop Construction

Company

Mejia Thermal Power station by BHEL in West Bengal

Bansagar Canal Project on Sone river

Delhi Metro

Korba Power Plant

Achievements

Bhilai Steel Plant bagged the most prestigious Prime

ministers Trophy Award 2004-05 for becoming the bestamong integrated steel plant. Out of 14 PMs Trophy awardedso far Bhilai Steel Plant has bagged it 7 times.

28


29/91

29


30/91

5 Employees from Rail & Structural Mill bagged PrimeMinisters Shram Ratna The highest Shram award. Out oftotal 15 awarded so far in the country, 13 awardees are fromBhilai Steel Plant.

11 Employees from Bhilai Steel Plant bagged PMs Shramawards in 2006. A total of 75 BSP Employees awarded withShram Shree, Shram Veer and Shram Bhusan so far.

20 Employees were honored with the Rashtriya Vishwakarmaaward for the year 2006 - a total of 352 BSP employees havebeen awarded since inception.

Bhilai Steel Plant bagged the Green Tech Silver Safety award,2006 instituted by Green Tech Foundation. Bhilai Steel Plant isreceiving this award for last 3 years in different sectors i.e.

Steel sector in 2003-04, Metallurgical sector in 2004-05 &Mining and Metal Sector in 2006.

BSP also bagged the Greentech Environment Excellence GoldAward for 2007 in Metal and Mining Sector.

30


31/91

BSP bagged Greentech Platinum award in the year 2008 inMetal and Minning Sector.

Ispat Suraksha Puraskar for the year 2005 & 2007 awarded toBSP by JCSSI.

Bhilai Steel Plant has won Corporate Sustainability prizeinstituted by CII-ITC Centre of Excellence for the year 2006 &2007 in the Independent Unit category for exemplaryperformance in environmental economic and social dimensionsof sustainable development.

Bhilai Steel Plant bagged the prestigious Indira Gandhi

Memorial National Award - 2004 of Excellent Pollution ControlImplementation Gold Award for Excellence inIndian Industries,sponsored by the International Greenland Society, Hyderabad.

Golden Peacock Eco-innovation award 2006 has also beenbagged by Bhilai Steel Plant.

Bhilai Steel Plant bagged Golden Peacock Env. Excellenceaward 2007

BSP bagged Golden Peacock Award for Combating Climatechange - 2008

Bhilai Steel Plant received IIM National Quality Award 2005 inthe category of Integrated Steel Plant.

Golden Peacock Award for the most innovative product wasawarded to Bhilai Steel Plant in the 16th World congress on

Total Quality (WCTQ 2006)

BSP bagged Rajiv Gandhi National Quality Award for 2006 in Bestof all categories.

BSP bagged Golden Peacock National Quality Award 2006 &

2007.

Bhilai Steel Plant was declared winner for HR Excellence Awardby CII, Chhattisgarh.

Golden Peacock Training Award for the year 2006 & 2008.

31


32/91

CHAPTER -2Marketing in the Organization

CENTRAL MARKETING ORGANIZATION( CMO)

The ISO: 9001:2000 certified Central Marketing Organization (CMO) is Indias

largest industrial marketing set-up that markets carbon steel Produced by the four

integrated steel plants of SAIL. Headquartered in Kolkata, it transacts business

through its network of 34 Branch Sales Offices spread across the four regions, 25

warehouses equipped with mechanized handling systems, 11 Customer Contact

Offices and 16 Consignment Agents. CMOs domestic marketing effort is

supplemented by its ever-widening network of authorized and rural dealers who

meet the demands of the smallest customers in the remotest corners of the country.

A strong IT support system enables real-time network connectivity within the

entire CMO network. Extensive customer contact, product and segment

specialization, close monitoring of order servicing and feedback analysis through

the Customer Satisfaction Index are established norms at [-MO. The customer-

friendly approach of CMO is backed by practical after- sales services. Through the

process of Key Account Management, CMO provides single window service to

key customer across the country for every business transaction from enquiry to

32


33/91

order booking, order tracking to delivery, and even consultancy and after-sales

services.

Central marketing organization is the marketing unit of SAIL. The Central

Marketing Organization (CMO) of SAIL was formed in 1963 when the public

sector steel plants were managed by Hindustan Steel Private Limited. It caters to

the domestic market and is responsible for marketing of all the products

manufactured by all the steel plants of SAIL in a coordinated manner. The CMO

undertakes marketing of materials produced by SAILs plant through a distribution

network of 43 Branch Sales Offices (BSO), stockyards, dockyards, consignment

agents and extension counters spread all over the country. Central Marketing

Organization (CMO) and most of its divisions have their Headquarters at Kolkata

and they reports to the Director headquartered at Delhi. However, departments like

transport and shipping, export and etc. report to exchange to Executive Director

located at Delhi.

Marketing Strategy

a) Ensuring dominant position in the Indian steel market

b) Maintaining continuous global presence (around 10 % by sales value)

c) Building & enhancing Brand Value of SAIL products

d) Further thrust on Key Account Management process

e) Gradual shift towards more of customers sales, as against traders sales

33


34/91

f) Trading of steel by sourcing from international sources, to enable packaging

for key customers

g) Popularizing SAIL products in the rural market

h) Maximizing IT enabled customers service and interactions

Major Function

Market research, Demand Assessment, segment prioritization, product planning,

sales and after sales services etc. CMO has a network of sales offices and

stockyards within the country for purpose of distribution of materials outlets. The

other aspects controlled by CMO are planning, customer services, transport and

shipping data information system etc.The distribution of iron & Steel products is

done by the CMO through 45 branches and stockyards located in all important

steel consuming centers in the country. For administration purposes, the branches

are grouped under 6 regions. The distribution through the stockyard is of the order

of 69% and through direct dispatches by the plant 31%. They operate various

schemes of the products is fast and the customer are satisfied.

Other important functions of (CMO):

CMO has got responsibility to sell Pig Iron & Prime Steel Products manufactured

by BSP, DSP, RSP & having its headquarters at Ispat Bhavan, 40, Chowringhee

Road, Kolkata-71.CMO has got 43 branches spread throughout the country with

stockyard, for storing and selling of iron and steel materials produced by the

plants.

34


35/91

Each branch is headed by a Branch Manager having other colleagues including

Finance executives to help Branch Manager in day to day operation.

The entire network branches are divided into four regions as given below:

Eastern Region

Western Region

Southern Region

Northern Region

CMO has got transport and shopping determinants to handle the export and import

consignments at different ports. These offices are at following places.

Calcutta

Chennai

Paradip

Haldia

Visakhapatanam

To coordinate about production and dispatches in different steel plants, CMO has

got SRM offices at following places :

Bhilai

35


36/91

Durgapur

Roukela

To take care of the exports, CMO has got office at New Delhi,

There is separate fertilizers and chemical division to sell fertilizers and chemicals

produced by the plants.

There are three executives called as product executives for BSP they take care of

separate division in BSP the main divisions being:

Plate Mill

Heavy Structure

Structures

The movement plans are generated by BSO only. The main purpose of the

movement plan is to give the commercial as well as the quality information of any

particular transaction. This information is then sent to the M & SP department of

BSP.

Various Divisions Of CMO

The following are the major divisions of the Central Marketing Organization:

1. Central Planning & Products Division: The main function of the division is to

bring about coordination between the market demand and production of the

steel plants. The four Resident Sales Mangers of the CMO located in four

36


37/91

tonnage plants report to this divisions in respect of matters relating to

marketing viz. movement, dispatches etc.

2. Alloy Steel Divisions: This division looks after marketing of alloy and special

steel product manufactured by alloy Steel Plant, Durgapur and also

coordinates sales efforts with Visvesvaraya Iron & Steel Co. Ltd (VISL),

SSP and MEL.

3. Pipes, Electrical Steel Sheets & Tin Plates Division: Headquarters of this set up is

located at Mumbai where majority of the customers for these materials are

situated. These materials have to be marketed under highly competitive

conditions. This division works out marketing strategies such as pricing,

distribution system, storage and delivery facilities etc. This division has a

field set up at each of the regional headquarters.

4. Market Management Group: This group is headed by group market manager.

This group cosistes of market managers. Market managers are responsible

for

market strategy & planning in terms of sales, market share & profitability in

a specific market segment.

5. Salem Steel Products Divisions: This division headquartered at Chennai by

Salem Steel plant. They have field office at each of the regional

headquarters as well as major consumption center.

37


38/91

6. Marketing Services Divisions(MSD): This division looks after the management

of this divisions is supported by a computer center where data on marketingoperations throughout the country are processed on a regular basis to bring

out periodical MIS reports. The responsibility of designing & implementing

road movement, handling contract systems etc. is also with them.

7. Commercial Division: This division deals with formulation of polices on

distribution. This division also deals with parliament question on behalf of

Central Marketing Organization.

8. Application Engineering Group: This division deals with application about

selection of best suited raw materials, development of new products

required by the market etc. It also undertakes technical inspection on behalf

of the CMO wherever needed. The A.E. personal are posed at each regional

headquarters.

9. Fertilizers and Chemicals Divisions: This division is headquartered at Kolkata

and looks after distribution of Ammonium Nitrate products by Roukela

Steel Plant and Ammonium sulphate produced by all the steel plants. This

division has got offices at field location where the demand for fertilizers is

substantial.

10.Market Research Group: This division undertakes assessment of demand for

Pig Iron & steel products for long term perspective & advice management

about the market. This division brings out periodic reports covering various

38


39/91

aspects of consumption, market condition, competitors activates etc. They

have field representatives for collecting & forwarding market intelligence tothe headquarters.

11.Transport & Shipping Department: The department is headquartered at

Kolkata and has branch offices at major port areas. This division is

responsible for handling imports & exports on behalf of SAIL. These

divisions clear the coals imported of SAIL, at the ports and forward the

same to various steel plants.

12.Finance & Accounts Department:This department renders financial advice to

the line managers as well as CMO headquarters and maintains the accounts

of the Organization covering Home sales, Transport and shipping exports,

internal audit, etc.

13.Computerization Division:This division is headquartered at Delhi and reports

to General Manager, This division is in change of the on going project for

total Computerization of CMO at headquarters field offices and SRM in the

plant location. At present this division is responsible for hardware and

software maintenance also. Software Development Center at Hyderabad is

engaged in developing and updating software required for CMO marketing.

39


40/91

14.Legal Cell: This cell deals with all legal matters of CMO like court cases,

arbitration, examination of different documents for giving loans toemployees for house building & renders legal advice on various

transactions. This is headed by GM (Law) who reports to Director

(commercial)

15.International Trade: This department is headquartered at Delhi is Commercial

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

16.Special Project Division: This division is headquartered at Delhi and reports to

Director (commercials). This division deals with modernization of

stockyards giving technical help and assistance to the stockyard in

maintenance of handling equipment etc. This department also deals with

construction of office building of CMO and acquisition / construction of

residential accommodation etc.

BRANCH SALES OFFICE( BSO)

It is a part of CMO various BSO offices are located all over India which performs

the job of marketing of SAIL products throughout the India. It receives the order

from various customers, does market research, analyze competitive position,

demand pattern etc.

40


41/91

SALES RESIDENT MANAGER( SRM)

BSO cannot directly contact with the plant for various dispatches & order, So

SRM is basically a coordinator between BSO and plan, each plant has their SRM

offices located near the plant premises for access of the orders.

Pricing Done By BSO

The prices for all products at BSP are done by the government of India. These

prices are fixed and are quite economical for the customers as it is quite low as

compared to the competitors.

Selling Methods

There are two methods for BSP:

1. Tender Pricing

2. E-auction

Types of Customers

There are two types of customers:

1. End user customers: These customers basically use products in factory,

plants for power projects of other purposes like fabrication.

2. Traders:These customers buy products from us and again sell them to the

end users.

41


42/91

INTERNATIONAL TRADE DIVISION (ITD)

CMOs International Trade Division (ITD): In New Delhi manages exports of

iron & steel products of Sails four main integrated steel plants and maintains

close liaison with buyers abroad. ITD has successfully established SAILs

reputations as a producer of quality steel products and a consistent supplier across

the five continents. Among the notable destinations are China, Korea, UAE,

Europe (UK, Italy, Spain & Germany), Taiwan, Japan, Thailand and Singapore as

well as neighboring countries like Sri Lanka, Myanmar, Nepal and Bangladesh,

etc. The critical function of ensuring efficient and proper dispatch of export

materials and timely import of raw materials to maintain the pace of production of

the SAIL plants is performed by CMOs Transport & Shipping Division (T & S)

headquartered at Kolkata, T&S has branch offices at Haldia, Paradip and Vizagports.

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

domestic and international markets by different ways. They are divided into two

categories, which is:

1. Prime Product

2. Secondary Product

Prime Product

42


43/91

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

Rails (KG/Mtr) : 45,52,60 Crane rails (kp) : 80,100,120

Angle (MM) : 50x50x5/6,65x65x5/6,8/10,75x75x6/8/10,

80x0x6/8/10, 90x90x6/8/10, 50x150x16/20,

200x200x16/20

Secondary Product

Coke fraction

Slab

Cast Iron Scrap

Steel Scrap

Coal chemical

Benzene, Toluene, Pitch, Naphthalene, Flukes, Heavy Creosote Oil, Anthracene

oil, light creosote oil ,hard granulate and liquid pitch, extra hard pitch, road tar,

sodium phenol ate, xylene, fertilizer.

43


44/91

CHAPTER -3

4. By-Products

Categories of Coal Chemical Product

44


45/91

Coke oven gasBenzolTar Product GasFertilizerBenzene

Toluene

Xylene

Solvent Oil

Pitch

Light crude

& Wash Oil

Light Oil

Naphthalene

DPO

DNO

HB

BF Slag

Crude coal tar

Ammonium

Sulphate

N2

O2Organ

45


46/91

USES OF COAL CHEMICALS PRODUCT

1. Benzol

Benzene Nitration Grade

Specification (is 534-1974 g-1)

Co lour -not darken then a freshy prepared

Packing and delivery: railway tank wagons road tanker in loose

Common Uses

Lab school college and various laboratories

Various cyclice compound: aniline nitro benzene nylon-6, phenol, dicloro di

floro hexa benzene (d.d.t.) benzene hea chloride,mono choloro benzene.

Raw material for various drugs and dye-stuff, synthetic rubber, styrene

Nylon intermediates, resin intermediates

46


47/91

2. Toluene: Industries Grade

Specification is 536-1967-1

Colour not darken then a freshy prepared

Packing and delivery: railway tank wagons road tankers in loose

Common Uses

Rubber and paint industries as a synthetic enamale

Thinners and varnish

Printing ink making

Organic compound : Benzoic acid, sodium benzonates, benzeyle chlorides,

Solvent, artificial sweatings

Adhesive, synthetic fibers

3. Xylene

Common Use

Rubber and paint industries : as a synthetic enamel


Printing ink

47


48/91

Pathetic & hydride

4. Light Solvent (Naphtha)

Common Use

Solvent


Printing ink making

Starting material for dyes

5. Solvent Use

Common Uses

Solvent for resins and paints


6. Still Bottom oil

Common Use

Mixed with other material and is used for various miscellaneous purpose

like

Roof tar felting for after roofing

Rubber paints industries

48


49/91

7. Pitch

Packing Pitch is filled in drum

Liquid pitch is filled in tankers

Granulated pitch is filled in bags

Common Use

Used in smelt plant in aluminum industry as a binder material for anode

used in manufacture of electrodes from pitch carbon

8. Hot Pressed Naphthalene

Hot pressed naphthalene is filled in bags. It is analyzed for crystallization

temperature moisture content, colour and ash.

Common Use

Dye intermediates

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

Dispersing agent tanning agent

H acid

49


50/91

Beta naphtha

Sodium napthionate

Alpha napthol

9. Anthracene Oil

Common Use

Anthracene oil is an excellent material as a feedstock for carbon blank and

gives better yield and quality of the finished product.

10. Light Cresote Oil

Common Use

Carbon black feed stock=

11. Heavy Cresote Oil

Common Use

Prevention of wooden sleepers by railways

Carbon black feed stock

12. Sodium Phenolate

50


51/91

Common Use

The phenols liberated from the sodium phenolate are virtually free from

neutral oils and pyridine bases and acan be used for synthetic purpose the

quality of phenols is also very good for the production of high quality

phenyl.

13. Dephenolate Oil

Common Use

Naphthalene bearing feed stock

Naphthalene and coal tar oils are separated and used for their specific end

uses.

14. Drained Naphthalene Oil

Common Use



uses.

15. Heavy benzol

Common Use


51


52/91


uses.

16. Ammonium Sulphate

Common Use

As a fertilizer

MARKETING STRATEGIES

Any organization before setting up the marketing strategies must be clear with

some of the main point such as business, mission, external analysis, internal

environment analysis, program formation goal formulation implementation and

feedback.

The marketing strategy for an industrial product is quit different from that of a

consumer product. Therefore, marketing strategy of BSP product is very different.

Certain strategies like advertising door-door survey a product demonstration not

viable.

The main aim is to maximize the recovery of realization. More consideration is

given to:

Potential Customer

Fusible price

Production good survey

52


53/91

Thus marketing is a game plan to accomplish the objective of an

organization.

The various marketing strategy used by BSP are

Sifting Focus from Tonnage to Profit: BSP is now laying emphasis on profit rather

than on mass production. It has taken to production of product / goods according

to the customer needs and demand.

1. Cost Control and Cost Reduction:An intensive cost reduction drive yielded a

saving of Rs.900 cores in fiscal 1998-99 over and above the Rs.732 cr.

achieved in the previous year. This was primarily due to improvement in

operational year. This was primarily due to improvement in operational

efficiencies increase in productivity at all SAIL. Plants and vetter purchase

management of critical inputs.

2. Improvement in Techno Economics Better Product Mix, Yield and Quality: BSP

has brought about improvement in techno economics better product mix

yield and quality.

3. Production According to Market Need: Production is done according to the

need an demand of the market.

4. Production of High Value Products: Goods of high value are produced in BSP,

which are in great demand by the market.

5. Better Sales Realization:Goods produced are to be immediately sold for the

smooth functioning of the organization. The marketing department tries to

53


54/91

sell most of the goods produces in the stipulated time. The quality and price

of the products are good therefore there is better sales realization.

6. Just in time delivery: BSP is able to make delivery just in time because it

work in pre-planned manner it takes order only after consulting the

production unit. So that products can be delivery in the right time.

7. Better Project Management: Modernization at Bhilai has been integrated with

the business strategy of the composed five projects at cost of approx 153.50

cores was completed during year.

8. Waste Management, Diversification, Joint Venture etc:Besides the introduction

of environmental friendly. Technology is like coal dust injection system in

blast furnace commissioning of centralized dusting system etc for waste

management has been carried out by BSP, BSP is also diversifying in the

areas like cement and power. It has also launched successfully joint venture

in information technology with the USA.

9. Negotiated pricing: BSP has started this strategy of fixing the price by

negotiation with the customers thus giving due attention to them.

10. Direct Dispatches: Direct dispatches from the plants constituted 50% of total

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

11. Appointment of Authorized Dealers: Appointment of authorized dealers to

service the small, far flung & rural demands helped in enlarging the steel

marketing & distribution network.

54


55/91

12. Marketing of New Product: Taking advantage of the modern facilities

installed at its plant BSP marketed new product during the year like thinner,gauge, hr coils, 602 kg, rails wit less than 3ppm hydrogen, tuv certified

plants, tmt bars etc.

13. Multiple Production Units: As SAIL has no. of units/ steel industries,

customers can be assured about the delivery. Even if BSP fails to produce

what it has promised to the customer, it can get it from its sister concerned

and deliver it to the customer.

14. Competitive Price: BSP prices are very competitive. It produces quality

product and they are priced worth there value.

15. Product Development: BSP brings about a continuous development in its

product to suit the needs and demand of customer like change in chemistry,

specification, composition etc. it also makes use of new technology for

production.

16. International Standards: BSP follows the standard set up by international

standardization organization likeISO: 9000 quality system etc. thus

following quality management.

17. Customized Product Mix : BSP as better product mix, which is also

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

18. Export as a Strategy:The Company has taken to exporting of its products to

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

55


56/91

SAIL in the year 1998-99 crossed 4.9-lakh tone. Of iron and steel yielding

foreign exchange earnings of Rs. 585 cores.

19. Sales Promotion:The Company offer rebate to its regular customers and the

customer with whom it has mou. But this is not the case always.

20. Market Research:BSP has its own research laboratory. It is modest but well

equipped research and control laboratory developed many new products

during every year.

21. Other measurement: Other measures includes complete package offering to

project authorities and increasing presence in the cold rolling segment, large

dia-pipes segment etc.

22. Marketing of this department is not done by any other department, besides

they have their own marketing department center of coal chemical, this

department is governed by BSP itself. This department makes all the

working like availability of material to the sale of materials. They book

order on daily basis or on yearly basis.

The department is also fies the price for the product and chooses mode of sale. The

committee of BSP decides the prices at the stalling of the year and this price is

called reserve price. The members of the committee are GM, DGM, and AGM.

One member from plant and one member from finance department. Basically the

marketing department of coal-chemicals has four main activities to perform, these

are:

1) Direct Sales

56


57/91

2) Product development

3) Coordination between CMO & inside plant4) Market development

i. To check the feasibility

ii. To look after quality control

iii. To keep a track of data

iv. To conduct meeting for likely demands.

SELLING PROCEDURE

Chemical products are through the following modes.

1. Memorandum of understanding

2. Fixed price basis

3. Online auction

1. MEMORANDUM OF UNDERSTANDING:Under this section, an agreement is

signed between party and the regional manager concerned. As per the terms

& condition of the agreement, the customer has to purchase the mentioned

quantity every year. Tin-scheme is applicable for one to four years.

2. FIXED PRICE BASIS: In this type selling price is fixed in advance by the

pricing committee, which are different customer.

3. Planning to fixed the price is done in the starting of financial year but it also

changed according to the market demand like, if the market is high demand

is more so according to price are also high sometime supply of coalchemical is also base on

4. contact with the coal chemicals department and ask for the quantity he

require and as the material availability and price rate. Supply is done. In this

57


58/91

selling, preference is given firstly to the government understanding, sister

plant and regular customer of BSP.5. ONLINE AUCTION: along with all the terms and condition also. At the

starting of auction sale start bid is given by metal junction, which is nearly

prevailing price in the market, and afterwards customer who has particular

in auction sale can register them giving high prices through their user ID.

All the indications of price Bavaria ions are shown in the screen of every

customers and the time of auction sale the list of H-1.

Pricing And Promotion

Pricing of coal chemicals is mainly done on 2factors:

(1)Demand &supply

Is this price is decided on the basis of market demand .If the demand is high by

charging the high price they make extra profit.

(2)Price of the competitors

Is pricing is done by pricing committee of B.S.P according to the demand of the

product and the priced fixed by the competitors. Price revision is done once a

month and also according to the fluctuations of the market situation .Thecommittee which decides upon the price , comprises of the people from

58


59/91

department of rank not less than A.G.M .Here they are not comprising to sale the

products.

Coal chemicals product promotion is done through the direct customer contact .It

is mainly seller market but sometimes due to shortage in selling, it also becomes a

buyer market .However as per the requirements and sale the positions discounts

and various schemes are offered to the customers . Broachers are used for

ammonium soleplate .It is sold by name RAJA raja is brand name for SAIL

fertilizers.

Distribution Channel And Transportation

Distribution is placed directly from BSP to the customers. For some products it is

sold through traders also although BSP on its part sells the products directly to the

customers, these customers may or may not be the end users of the product.

Transportation is mainly done through road or rail. All the transportation charges

are beard by the customers only. The customers are wholly and solely responsible

loss or damage of the goods once sold.

Once the product is sold, The marketing department sends the detailed information

of the transportation to be used by the customer to lift the materials to the inside

plain. Detailed like truck no. load permitted capacity are sent to the inside

department.

59


60/91

Understanding The Customers

B.S.P has advantage of its location especially when it comes to sale of coal-

chemicals product. Raipur a big industrial hub of the chemicals factories.

First of all B.S.P caters the need of its sister concern are as follows:

Rourkela steel plant.

Durgapur steel plant.

If there are any government requirements to government every case gets the

priority. Next is the MOU signed customers followed by the regular customers .If

alter all these B.S.P is still left with the goods they cater the demands of new

customers. The B.S.P gives local customers priority over outside customers.

Customer feedback is taken from time to time through telephones .Customer

satisfaction has increased in past recent years .Many measures have been taken to

realize this increase. Customization in pitch and benzol product has been done.

Various modes of payment are as follows:

Demand draft

Pay order

Bankers cheque

Letter of credit

60


61/91

Competitors Of B.S.P In By Product

Tar coal

Vishakhappatanam plant

Nilanchal nigam limited

Tata steel

Benzol

Hindustan petrochemicals

Reliance petrochemicals

Hindustan petrochemicals

Other sister plant of B.S.P

Rourkerla steel plant

Bokaro steel plant

Durgapur steel plant

TISCO

Foreign Competitors:

Foreign competitor sell their products through low price, credit selling and

bulk through sheep. Some factors which affect is low price, product

differentiation & credit selling.

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

Consistent quality

61


62/91


63/91

0

50

100

150

200

250

300

1983

-84

1985

-86

1987

-88

1989

-90

1991

-92

1993

-94

1995

-96

1997

-98

1999

-00

2001

-02

2003

-04

2005

-06

2007

-08

Year

Amtin

Cr.

5.Secondary Products

An Introduction

Secondary section started functioning after the commencing of Bhilai Steel Plant.

The secondary product section of the marketing department is solely responsible

for the selling of secondary products and by products of BSP.

All the defectives/rejected items of this department except the rejected defective

plates sells scrape. The defectives plates are sold by CMO (Central Marketing

Organization) organization since December 2001.

Secondary products are the defectives or rejected materials due to improper mixing

of chemicals components or fail to meet the optimum requirements. Scrap

generated inside plant is also termed as secondary products. The secondary

63


64/91

products used here in after will mean ferrous material generated from various

production units which can either suitably be used for re-melting to produce ironand products are offered for sale if rendered surplus in production process for

example. Defective heavy blooms, Defective rails, Rails cutting, Rod cutting,

Scrap etc. The secondary product section of the marketing department is solely

responsible for the selling of secondary products of BSP. All the defective/rejected

items of this department except the rejected defective plates are sold by CMO

(Central marketing Organization).

Necessity Selling Of The Secondary Product

The net scale realization all the secondary products, by products, and products of

BSP is around Rs. 600 Crs. which is much more than from many big industries.

Out of this scrap arising itself brings about Rs. 150-200 Crs. of money every year.

Re-production of main products from these secondary products requires remitting

it against for the required composition of the materials as per desired production.

Profit is the aim of every business, and the re-utilization of these products for the

finished products proves to costlier, the management plans to sell it to the local

markets.

DETAILS OF SCRAP:

64


65/91

There are various types of scrap, which is generated from the particular prime

products, Some brief summaries are following here:

I PCM SCRAPE

This is a scrape generated in the pig casting machine and consists of splashing,

PCM runners and fires and is in the right range of upto 1 tone per piece

II BF RUNNER SCRAPE

Generated in the bf cast house in the form of runner jams etc. the maximum weight

per piece is upto 2 tones. This scrape contains amount of slag.

III UNPROCESSED STEEL

Generated in the steel melting shops in slag cups and metal ladles, as the skulls are

quite board in dimensions, some of them are required to be cut into sizes suitable

for loading into trucks. These skulls are sold in the weight ranges.

IV BSIM SCRAP

The consists of semi broken ingot mould and bottom plat scrape and is in weight

range of up to 2 tones per piece.

V COBBLED SCRAP

The cobbled scrap arises from iron rod mill and includes some rejected coils and

binding wires also.

VI REJECTED ROLLS

65


66/91

Cost iron rolls, rejected steel rolls.

VII MILL CUTTING

Rail and structural mill cutting, merchant mill cutting plate end shearing, rejected

slabs, slabs cutting miss rolled slabs, wire rod cutting are included in this type of

scrap.

Manufacturing Process

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

materials are not directly re-reliable, so first is required to make a re-roll able and a

paper size as per the requirement of the finished products. In the recent years a

number of foundries and re-rolling mills came into existence throughout the

country. The small scale sector need the secondary product as input raw materials

for their production. The company has engaged in educating them the use of

secondary product for different kind of end products for consumption of general

public. This material is then continuously passed from one stand to the other unit of the finished

product.

Collection Of Scrap

I.All scraps identity the metallic scrap generated in the production process

and lying in the shop. The shops collected the scrap with the help of

overhead cranes and stock them for loading into wagons.

66


67/91

II.Rejected rails sleepers lying near the railways track inside the plant are

collected at such points from here loading and collection by truck ispossible.

III.Crane facility is provided for loading the scarp into the track whenever

cutting or processing not possible on the spot.

IV.Marketing recovery department is responsible for over all co-ordination of

scrap collection for the entire plant. For this each shop nominate one

executive for ensuring the clearance of scrap from the shop.

V.Head of the marketing customer service department requires. The progress

on scrape collection on weekly basis.

VI.MRD make suitable schedule for collection of scrap and intimates the

date of collection to respective shops.

Processing Of Scrap

I.All the scrap which collection is not sold. Some of the scrap portion is used

for the re-melting purpose, MRD identifies such scrap. It arranges

collection handling and processing of all such scrap at various yards before

sending in required quantity to the steel melting shop, converter shop and

foundry.

II.After such processing, MRD arranges supply of required scrap to

respective consuming shops.

Planning For Sale Of Secondary Product

67


68/91

I. Marketing recovery department (MRD) works out the quantum of different

types of scrap available for sale on monthly basis this is determinedascertaining the total scrap stock at the beginning of the month. Scrap

arising during consumption. The remaining quality is considered for sale. A

monthly report on availability of scrap is prepared by MRD and send to

marketing department.

II.Marketing department finalize the plan for actual quality of scrap to be sold

in consultation with MRD. Mode of sale, terms and conditions for sale,

locations and commercial aspects are finalize by marketing department.

III.The pricing committee as approved by managing director fixes the price of

each of the scrap.

IV.Marketing department obtains MDs approved on price fixed by pricing

committee.

Marketing Scenario

Without a perfect market goods can neither be purchases nor can it be sold.

Marketing is one of the major and crucial department pillars of every organization

and it is the case it SAIL.

Customer Satisfaction and Quality Assurance, these are the two motives of

SAIL for achieving their goals and establishing their market SAIL has a wide

network across the country. It is having its CMO for its marketing division. Its

headquarter is situated in Kolkata.

Bhilai steel Plant is one of the most important integrated steel plants of SAIL,

which is earning profits for last 45 years. It has established its position through a

68


69/91

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 theorders of CMO. These orders are then sent to the plant for checking the availability

and production for dispatch. All departments are linked through management

information system (MIS) for CMO to each and every division of plant.

The whole procedure of BSP for marketing is, customer send their enquiries

including their requirement to CMO how looks the orders by order management

system, which further send these requirement to the regional office. Regional

office sends the orders according to different region to the BSO of each region.

After checking of materials against TDC booklets by the BSO and marketing

division of plant it is send to the customers according to the quantitative

demanded, with the same channel through wagons and trucks as the case may be.

The copies of invoice are sent to customers and regional office concerned which is

ultimately deposited in the bank payment in case of credit sale.

Secondary Sales Items

1) Defective heavy blooms

2) Defective rolled slabs from blooms & billet mill

3) Defective billet/billet Cuttings

4) Defective/Rejected Rails

5) Rail Cutting Incl. Crop. End

6) Rod cutting

7) Plate Mill side shearing

8) Plate mill end shearing CAT-I

69


70/91

9) Plate mill end shearing CAT-II

10)Defective/rejected CCS slab cutting11)Iron Scrap and Other Items

Selling Of Secondary Products

The secondary products department has taken up the intiative to sell the products

via auction only with effect from July 1st 2005.Earlier along with the auction

method the fixed price method was also in use.

Online Forward Auction

For the auction sale, the customers have to log on to metal junction.com to bid for

the product. There is no time period for the auction until the auction reaches to the

high price. Auction sale is started at a fixed price and this price is fixed by Reserve

Price fixation committee (RPTF). This committee sits one day of the auction to

fixed reserve price. Following are the procedure in online forward auction-

1) The customer can view the instant bid price on the screen throughout the

auction period.

2) Different auction is organized for the two stores.

3) The service of auction is provided by Metal junction.com4) Items are sold in lot.

70


71/91

5) Before the auction money is deposited by all the customers participating in

the auction. It is known as earnest money deposit.6) After the auction the sale order is issued.

7) If the customer does not submit the money within the 7 days of sale order the

EMD is not refunded and he is debarred for 3 months for auction.

Sample Selection

The project required gauging the satisfaction level of nearly 200 customers who

are directly involved with BSP for the procurement of secondary products and by

products produced by the plant in the process of generation of the primary

products.

For conducting the survey we selected a list of 25 customers as per our

convenience with a good mix of customers of secondary as well as by-products so

as to reflect the sentiments of the wholesample frame as closely as possible. The

sample of 25 local customers in the Bhilai-Raipur region consisted of 15

secondary product based customers and 10 by-products based customers.

CHAPTER -4

71


72/91

ANALYSIS OF CUSTOMER SATISFACTION INDEX

FOR PRIMARY PRODUCTS

The table below shows the average Customer Satisfaction Index

for primary products (LONG Products & FLAT Products) for the last

three financial years 2006-07, 2007-08, and 2008-09.

AVERAGE CUSTOMER SATISFACTION INDEX

YEAR LONG PRODUCTS FLAT PRODUCTSQUALITY

DELIVERY

SERVICE

AVERAGE

QUALITY

DELIVERY

SERVICE

AVERAGE

2006-07

92.69 88.42 93.69 91.60 97.62 83.55 92.58 91.25

2007-08

91.77 87.85 94.89 91.50 98.82 88.22 91.06 92.70

2008-09

93.89 93.82 96.15 94.62 99.44 84.46 95.76 93.22

AVERAGE

92.78 90.03 94.91

98.63 85.41 93.13

From the above table, it can be easily concluded that

satisfaction level of customer for Quality has increased over

a period of three years for the Long as well as Flat Products.

In case of Delivery, the satisfaction level of customers of

Long Products for Delivery has increased but the customers

of Flat products are not satisfied with Delivery process of

SAIL (BSP).

Satisfaction level of customers for Service, in case of bothLong & Flat Products has increased over the period of three

years.

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

72


73/91

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

period of three years.

Above Graph shows the continuous improvement in

Customer Satisfaction Index (CSI) for the period of three years.

2. Graph showing the comparison of Satisfaction level of

customers for different parameters like Quality, Delivery and

Service over a period of three years for Long Products.

Above graph shows that the Satisfaction level for Quality,

Delivery and Service has increased over the last three years.

Satisfaction level for Quality and Delivery for the financial

year 2007-08 was lower than that of the previous year i.e.

2006-07.

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

1.Graph for average C.S.I. of Flat Products for the

period of three years.

Above Graph shows the continuous improvement inCustomer Satisfaction Index (CSI) for the period of last three

years.

73


74/91

Graph showing the comparison of Satisfaction level of customersfor different parameters like Quality, Delivery and Service over a

period of three years for Flat Products

Above graph shows that the Satisfaction level for Quality

and Service has increased over the last three years.

But the Satisfaction level for Delivery came down

significantly for the year 2008-09.

Satisfaction level for Service in the year 2007-08 was lower

than that of the previous year i.e. 2006-07.

OVERALL CONCLUSION

Satisfaction level for all the three factors Quality, Delivery

and Service for the Long Products are increasing

continuously over the last three years.

While, in case of Flat Products, Satisfaction level for Delivery

decreased significantly.

If, we look the overall CSI output, it can be concluded that

Delivery is major concern for company which needs

immediate attention, as the average CSI for Delivery is

around 85-90% which is very less in comparison to Quality

and Delivery (92-96%) for both Long and Flat Products.

COMPLAINTS OBTAINED THROUGH CUSTOMERS

REGARDING QUALITY, SERVICE AND DELIVERY

74


75/91

Customer complaints regarding Quality

Poor quality of lamination

Off chemistry material

Problem of cracks in the products

Customer complaints regarding delivery:

Invoicing problem.

Information of the order status.

Loading of the materials in the wagon.

Customer complaints regarding services:

Poor performance of cross functional team.

Poor performance of Branch Sales office.

Delay in order confirmation.

RECOMMENDATIONS AND STEPS TAKEN BY SAIL (BSP) FOR

REDUCING THE FURTHER COMPLAINTS

For improvement of Quality:

Increased inspection of finished products.

Improvement in TMT bars according to customer

requirements.

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

75


76/91

For improvement of Delivery:

Online service for invoice: From 2008-09 everyday at 6.00P.M. an email is generated which describes the invoice

details.

Improvement in wagon loading :

loading & unloading time is reduced and

Maximum uses of wagon capacity.

Introduction of freight operating information system (FOIS):

Through this every movement of the dispatched material istraced by all the branches through internet.

Provision of Enterprise Resource Planning.

Introduction of spot invoicing: Invoice is generated at the

same time and at the place of dispatch so that delivery time

gets optimised and reduces the unloading time at the

customers place.

No held up time.

For improvement of Service:

Intensify the dealer network: Covered almost all the districts

in the country (623/625 in India).

Rewarding the dealers.

After sales service:

Improving the invoice generation process.

Increasing the stockyards to handle the complaints

quickly.

76


77/91

SECONDARY PRODUCTS

Scraps generated inside Bhilai Steel Plant are termed as

secondary products, in the course of manufacturing process. In

every stage of production, always there will be certain

percentage of product which do not fit to the standard quality,

size & specification, such product are termed as secondaryproduct. Moreover, while shaping the prime product both end &

sides are cut, these extra materials are also categorized as

secondary product in SAIL (BSP) as they are re-rollable.

Secondary section started functioning after the commencing

of Bhilai Steel Plant. The secondary product section of the

marketing department is solely responsible for the selling of

secondary products and by products of SAIL (BSP). All the

defective/ rejected items: this department except the rejected/defective plates sells scrap. The defective plates are sold by

Central Marketing Organisation (CMO) since December 2001. The

secondary products are sold by online auction sale, tender and

fixed price sale.

Following items fall under the category of secondary products:-

Defective Heavy blooms.

Defective billets/ billets cutting. Defective/ Rejected slobs.

Plate mill side shearing.

Plate mill end shearing.

77


78/91

Defective/ Rejected rails.

Rails cutting.

Rod cutting.

Defective Rolled slabs from bloom and billet mill.

Iron scrap.

Spillage slag.

Blast furnace granulated slag.

Coal rejects, Coal chemicals

Bloom end cutting.

Necessity of Selling the Secondary Products

The net sales from all the secondary products, by products

and co-products of SAIL (BSP) are around Rs. 1591 crores in FY09

which is quite more than money the big industries. Out of this

steel scrap arising itself brings about Rs. 1290 crores of money

every year. Re-production of primary product from the secondary

product requires re-melting it again for the required composition

of the materials as per the desired specification.

By selling it to the different mills/traders/processors theplant earn a decent amount of money which is basically utilized

as working capital for day-to-day spending.

78


79/91

Profit is the main aim of every business and when the

realization of these products for the finished products proves to

be costlier the management plant decided to sell it to local

market. By selling secondary products to the local market new

industries are developed for re-rolling the secondary material to

make finished product. It has also increased the small-scale

industries and employment opportunities.

Marketing of Secondary Products

During the seventies and eighties when the plant was onemillion-tonnes and 2.5 million-tonnes of capacity respectivelyarising of secondary products were limited and such arising wererecycled for re-melting. Therefore there was no scope formarketing in other words it was not economical. The plantcapacity has been increased from 2.5 million tons to 4 milliontons in the late eighties. New technology has been adopted while

increasing the capacity of the plant where by the use of arisingfor re-melting drastically reduced. This has given more reasonsfor the marketing/selling of secondary products.

In the nineties we have seen lot of changes in the economic

scenario of the country. The concept of more employment in

public sector enterprises has changed to more profit. There by

the plant also has geared up its strategy towards this end. One of

the strategies adopted by the plant for increasing the profit ismarketing of secondary product. In the recent years a number of

foundries and re-rolling mills come into existence throughout the

country. These small-scale sectors need the secondary product

79


80/91

as input raw material for their production. The company has

engaged in educating them the use of secondary products for

different kinds of end products for consumption of general public.

The plant extends all types of facilities and assistance to these

small-scale units which in turn give scope for more employment

opportunities.

The plant for marketing has adopted following strategy following

strategy;

1. Committed delivery.2. Competitive price.3. Quick complaint settlement.4. Culture of customer service.

COMMITTED DELIVERY:-

Achievement of the goals of 100% fulfillment of contractual

obligation of delivery is important as customer must developconfidence that B.S.P. delivers in time. To ensure this appropriate

action is to be taken in the following areas:-

Movement of scraps & other materials from plant tocustomers.

Delivery of documents in time Monitoring.

CUSTOMISED PRODUCT MIX:-

Matching the product mix with the customer requirement is

the key to the customer satisfaction. B.S.P. has to ensure what

80


81/91

type of materials are required by customer and supply the

materials the customers needed.

COMPETITIVE PRICE:-

Success in a competitive market depends on competitive

advantage in terms of delivery & price. Competition from other

steel products is likely to increase in the context of recent

changes. This can be achieved only through continuous cost

reduction & improvement in pricing policies.

QUICK COMPLAINT SETTLEMENT:-

81


82/91

In this context the complaint from the customer comes to theBranch Sales Office (BSO) where it is handled in two phases:

In the first phase, the minor complaints are solved by theconcerned Application Enginee

laxmikant bsp project

Documents