Project Report On MARKRTING STRATEGY AND DISTRIBUTION CHANNEL in

Jindal industries Ltd., Hisar

Presented By : Ghanshyam Gupta

ghanshyamgupta7@gmail.com

Chapter -1
RATIONALE OF STUDY
The project is intended to study the marketing strategy and distribution channel of Jindal Industries Limited, Hisar. The company is into manufacturing of steel pipes, which comes under the industrial goods. The distribution of industrial goods is very different from distributing a commodity, its simple in structure and are bought for utility, hence were it is bought doesnt play greater role unlike an FMCG product or consumer durables. The required information was gathered through interviews with company people. The channel structure of the company is less hierarchical. The powerful member of the channel is the company provided with the direct sales it makes and the multiple dealer model handled by it. The company has good promotional and encouraging activities to help the dealers do their sales effectively. Moreover with the 5s policy it follows they strive to achieve the quality environment in the organization. Normally the company provides an cash discount of 2% to its dealers. The company transports the products through trucks and containers to regional offices from were they are distributed to the dealers as per their requirements. The company has taken much care to ensure lead time doesnt exceed 15days and 20 days in any worst case. The international marketing is done through agents and also the companies marketing division. They participate in tenders to bag the orders. The transportation is taken care of by the agents, they take care of the shipping dates, warehousing at ports etc Being a manufacturing concern the company is in a position to maintain inventory to ensure smooth functioning or operations. The company has three types of inventory, inventory of

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raw materials, inventory of machineries and inventory of semi finished goods. The company uses material requirement planning to places orders to suppliers and also to decide on the amount of stock to be maintained in inventory. The company keeps semi finished goods in its inventory to have a faster operation and meet any sudden demand, to ensure the policy of minimum lead time to customers. The process has been explained in detail in chapter three. Warehousing is done to ensure enough stock availability to meet any sudden market demands. The ware hose manager decides on lot sizes in which it is stored. The ware housing is interlinked to the inventory processes and material requirement planning. The company has a national wide network which is highly difficult to maintain and conflicts do arise. The company is doing its best to ensure the conflicts dont collapse the entire channels goals. The company communicates to all its members in all respect, even it share its stock positions in ware houses on a weekly basis. It educates its members and encourages through various sales support activities. The company which has excellence in technology has excelled in distribution of its products also. The information inside the report are supported with relevant figures and datas provided by the company. A case study developed on the basis of channel distribution is at the last.

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CONTENTS

CHAPTER 1. Rationale for the study. CHAPTER 2. Objective of the study. Title of the project. Objective of the study. Limitations of the study. CHAPTER 3. Company profile. CHAPTER 4. Theoretical perspective. CHAPTER 5. Research Methodology Research Design Data collection methods Sampling plan CHAPTER 6. Data Analysis and Interpretations. CHAPTER 7. Conclusion CHAPTER 8. Suggestion

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Chapter -2
2.1 Title of the project Marketing strategy and distribution channel at Jindal Industries Limited, hissar 2.2 Objective of the study
The main objective of the study is at first to gain some practical knowledge regarding the functioning of corporation which is very necessary to fully understand the distribution system & hence it fulfill the purpose of the internship under MBA programme.

To understand how effected is the distribution channel of jindal Industries Ltd. To spot out strengths and weakness of company. To give suggestions for the improvement of existing system so that it could be
implemented effectively with minimum cost and time.

To spot out opportunities of jindal Industries Ltd.

2.4 Limitation of the Study

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 respondents. me time respondents were not willing to give exact information. very less for finding out the real facts. sample size was too small to get accurate results from the market. k of awareness on some questions among the respondents. Getting the informations from the respondents is also a tedious task.

Res

earch was conducted for a short time, which was not sufficient to interact with So It

was very difficult to met customers of different area. Duration of project is The Lac

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Chapter 3
Profile of the company

JINDAL GROUP
THE FOUNDER Where others saw walls he saw doors Late Shri O P Jindal BABUJI The Man of Destiny (1930 2005) The Jindal Organization owes its brilliant growth to the dedicated endeavors of its employees with a strong emphasis on quality and on-time delivery to our customers as per their specifications, our progressive as well as successful achievements have made the Jindal Organization a leading name in India
Late Shri O P Jindal

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DETAIL ABOUT DIRECTORS OF THE COMPANY-:

1. smt.savitri jindal w/o lt,shri O.P. jindal, 52 years

Director of the other companies: M/s jindal strips ltd M/s jindal transworld pvt ltd M/s rohit tower building pvt ltd M/s nalwa sponge iron pvt ltd M/s monne uspat ltd M/s monnet ferro alloys ltd

EXPERIENCE: She has a rich experience in steel industry. The flagship company M/s Jindal Strips ltd and associated with steel sector for the last 50 years.

2. Shri Shiv ram jindal, 76 years, industrialist. Directorships of others companies: M/s Ravindera tubes ltd M/s Hisar farms $ investments

EXPERIENCE:

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He is the founder of company and associate with Steel industries for last 55 years. He has also launched the other M/s Ravindra tubes ltd which is also running well under his control and guidance.

3. Shri B.D. Aggrawal,71 years industrialist. Directorship of other companies: M/s surya roshni ltd. M/s Surya fincap ltd. M/s Osram surya pvt. Ltd. He is the founder of the company having the experience of 50 years. His other enterprises Surya Roshni Ltd is performing very well.

EXPERIENCE:

4. Shri M.P jindal,52 years industrialist Directorship of other companies: EXPERIENCE: He is son of shri Shiv ram jindal. He has a working Experience of 26 years under the guidance of his father.He is also managing other concerns in the same line viz. M/s Ravindra tubes Ltd. M/s Ravindra tubes Ltd M/s Hisar metal industries Ltd

5. Shri R.R Aggrawal.62 years industrialist Directorship of other companies:

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M/s Ashok magnetic Ltd M/s Ashok memory Ltd M/s suban industries Ltd He is younger brother of Shri B.D. Aggrawal. He has

EXPERIENCE: experience in law income tax sales and other technical matters.

JINDAL INDUSTRIES LIMITED: A GEM OF JINDAL GROUP

JINDAL INDUSTRIES LIMITED HISAR was incorporated in the year 1952 having its registered office at Delhi road Model Town Hisar. This unit was previously known as JINDAL INDUSTRIES PVT. LIMITED which was converted into a Deemed Public Limited Co. under Section 43(B) of the Company Act 1956 on 12 June 1975. Hence it is now known as JINDAL INDUSTRIES LIMITED. It is a closely held company engaged in the manufacturing of ERW/Galvanized and Black Steel Pipes and Tubes with installed capacity of 1,65,000 MT per annum. This unit is one of the largest and leading pipe manufacturing units in India having modern mills and sophisticated equipments. JINDAL INDUSTRIES LIMITED is a prestigious Company of JINDALs, who have proved their unerring might in Steel sector, having unstinted record of Four decade service to the nation. The group of Jindals and their partners, the unit has steadily grown to become a premium brand in galvanized steel pipes industry. Jindal HISSAR , products have earned the reputation of impeccable quality and total reliability. The name has become synonyms with the BEST in steel tubes. Jindal industries limited manufacturers pipes using state of the art manufacturing facilities in range 15mm to 300 mm NB for use in water transportation, oil and gas transportation ,

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chemical industry , agro based industries , power sector, fire fighting applications etc with a capacity to produce about 2lacs tons per annum . The unit is equipped with modern machinery including 8 rolling mills, 4 galvanizing plants , threading and finsishing equipment . It has full backup power generation facility. It is fully automatated to ensure premium quality and a high degree of dependability. Jindal industries limited has earned a commendable reputation for reliability and quality due to its adherence to uncompromising standards of quality. The objective is to delight costumers at reasonable prices .All pipes have to pass through a series of tests during the various stages of production at our inhouse testing laboratory.Jindal industry limited has adopted the total quality management approach . Its systems confirm to ISO standards viz ISO 9001, ISO 14001 and OHSAS 18000. The pipes are engraved with ISI mark and trade mark JINDAl with the device of the map of India in oval shape and word HISSAR underneath. Keeping in mind the profile of the end users particularly house holders and farmers , company has taken the onus of ensuring quality better than the requirements. Pipes are normally manufactured to closer tolerances and care is further taken enroute to exceed users expectations.

QUALITY CREDENTIALS
The Jindal industries has been awarded the prestigious ISO 9001 certificate by British standards institution (BSI) certifying the quality management system of the company.This certificate is valid for manufactur and supply of ERW black and galvanized steel pipes. Other certifications awarded by BSI are ISO 14001:2004 for environment and OHSAS 18001:1999 for health and safety. Jindal industry is the only steel tube manufacturer to have the integrated management system . INSPECTION AGENCIES 1. TCS Tata projects limited 2. PDIL 3. L &T 36

4. NTPC 5. Engineers India Ltd 6. SGS India Ltd 7. RITES 8. DNV 9. DMRC 10. QSS 11. Bureau Veritas 12. Directorate General of Supplies and Disposals PRODUCTS SPECTRUM 1. Galvanised pipes 15mm to 300mm various national and international standards 2. Jindal HISSAR-ACL Pipes 3. Black Pipes 15mm to 50mm for concealed piping 15mm to 300mm various national and international Standards 4. Rectangle and squares From 25mm x 25 mm to 150mm x 150mm 5. Line pipes From 80mm to 300mm API Pipes.

GRADES

CONFORMING TO STRINGENT SPECIFICATIONS A) Indian standards

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IS:1239 IS:3589 IS:4270 IS:1161 IS:3601 IS:9295 IS:1978

B) International Standards British American European Japanese

MANUFACTURING PROCESS The process utilizes the latest technology and modern equipments for producing high quality ERW pipes. 1. SLIT Preparations HR coils are slitted to predetermined widths for each size of pipe and thickness. Slitted coil is uncoiled at the entry of ERW mill and the ends are sheared and welded one after another to make it single and less strip.

2. FORMING Slitted coils are initially formed into U shape and then into cylindrical shape with open edges using a series of forming rolls.

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3. WELDING The open edges are heated to the required temperature through high frequencies , low voltage , high current and press welded by forge rolls making perfect end strong butt weld without filler materials.

4. DEBEADING Weld flash on top and inside (if needed) is trimmed out through carbide tools .

5. SEAM ANNEALING Whenever required , welding portion and heat affected zone is put to normalizing with medium frequency normalizer and then cooled down in air cooling bed.

6. SIZING AND CUTTING After water quenching , slight reduction is applied to pipes with sizing rolls to give them desired accurate outside diameter . Pipes are cut to required lengths by flying cut off disc /saw cutter .

7. FACING AND BEVELLING The pipe ends are are faced and beveled by the end facer. All the processes are continous with auto arrangements.These plain ended tubes go for further processing as per the customer need like galvanizing , threading, black varnishing etc.

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8. PACKING Finished pipes are bundled in desired number of pieces as per customers requirement and packed properly to ensure freshness till delivery.

Jindal industries Limited (JIL),Hisar incorporated in early sixties, is a leading manufacturer in India for galvanized steel pipes ,Black steel pipes and hollow sections. Over 40 years of Consistent leadership in its chosen markets has made Jindal, Hissar a legend in the steel tube market. Jindal Industries Limited, Hissar - set up in the nineteen sixties manufactures high quality MS Black and Galvanized Pipes/Tubes in the range of 15mm to 300mm as per BIS Standards. The Company is fully equipped with modern manufacturing machineries, Mills, Welding Plants and galvanizing plants. It has full in-house state-of-the-art manufacturing technology and testing equipments to produce the best quality steel pipes besides other infrastructural facilities. Jindal Industries Limited has doubled its production and sales during last Five years. It has achieved this feat by winning a higher share in a very competitive market, which is also flooded with inferior and duplicate quality Pipes. Its strength lies in its all time endeavor to provide higher & higher standards of quality and service to our worthy customers.

1.1 Product Range:

Galvanized pipes Jindal HISSAR-ACL pipes Black pipes Rectangle and squares Line pipes to 12 various national & international standards to 2 for concealed piping to 12 various national & international standards From 25mm x 25mm to 150mm x 150mm From 80mm to 300mm API Pipes

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1.2 Quality:
Jindal industries limited are commmitted to become one of the most quality concious manufacturers of steel tubes maintaining consisitently highest standard of quality confirming to BIS standards and to the satisfaction of our customers. Jindal never compromises on Quality front even under the most adverse market conditions. Mainly SAIL material in Steel and High Grade Zinc from Hindustan Zink Limited is being used to cater to high quality Pipes/Tubes demand in the Market. Its Pipes are engraved with ISI Mark and trade Mark Jindal with the device of the Map of India in oval shape and word HISSAR underneath, which has become synonymous with high quality Steel Pipes. Each Pipe/Tube manufactured by Jindal Industries Limited is a testimony to their commitment to Quality and Service.

Chapter 4
THEORETICAL PERSPECTIVE MARKETING MIX
The main objective of the marketing programming is to put together a set of marketing strategies that will achieve the goals of the firms. This means assembling an ideal mix of products, prices, personal selling, promotion and research and distribution networks for a particular company. Finding the best combination of marketing strategies is not easy

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because of nonlinear relationship between sales and marketing mix variables, interaction among the factors, the largely unknown character of competitive responses and the some time fickle nature of customers. The process is also complicated by changes in general business conditions and modifications in the legal environments made by regularity agencies and the courts. If these conditions are not bad enough, the manager is asked to find a marketing mix that generates adequate profits in the short run and contributes to long run goals of the firm such as growth and stability. The marketing mix refers to amount and kinds of marketing variables the firm is using a particular time and includes price, advertisements, costs and distribution expenditures. This project evaluates the concepts of marketing mix and its main constituent elements and addresses the problem inherent in uniting these unique and distinctive combinations.

In most of the firms marketing mix decisions are led by the marketing department but another functional area play a key role. Research and development management are significantly involved in product mix innovations. Finance, production and other department influence pricing and distribution decisions. Hence management of the marketing mix is unlikely to be effective without marketing orientation forming a common culture throughout the business. Marketing management must decide what level of marketing expenditures is necessary to achieve its marketing objectives. Companies usually establish their marketing budget at some conventional percentage of the sales goal. Companies entering a market try to learn what the marketing budget to sales ratio in the hope of achieving a higher market share. Ultimately the company should analyze the marketing work required to attain a given sales volume or market share and then cost out this work. The result is the required marketing budget.

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The company also has to decide how to divide the total marketing budget among the various tools in the marketing mix. Marketing mix is one of the key concepts in modern marketing theory. According to Philip kotler , marketing mix is set of marketing tools that the firm uses to pursue its marketing objectives is the target market.

McCarthy popularizes a four factor classification of these tools called the 4Ps Product, Price, Place and Promotion. The elements of marketing mix are called as the firms controllable variables. These are activities that organization plans, organize and control. Not all marketing mix variables can be adjusted in the short run. They vary in their adjustability. Typically firms can change its price, sales force size and advertising expenditures in the short run.

PRODUCT MIX Product mix (also called product assortment) is the set of all product lines and items that a particular seller offer for sale to buyers. A companys product mix refers to how many different product lines company carries. The length of product mix refers to the total no. of items in the product mix. The depth of product mix refers to how many variants are offered in the line. A product line is a group of product that are closely related because they perform a similar function, are sold to the some customer groups are marketed through the same channels or make up a particular price range.

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JIL products two grades pipe/tube at Hissar plant. The plant uses modern technology to produce pipes. JINDAL INDUSTRIES LIMITED, HISSAR, manufacture high quality MS Black and galvanized pipes/tubes in the range of 15mm to 250mm as per BIS standard.

The company is fully equipped with modern manufacturing machineries, Mills, Welding plants and Galvanized plants. It has full in house maintenance work shop and testing equipments to produce the best quality steel pipes beside other infrastructural facilities. JIL produces two types of steel pipes:1.) Black pipes:- after cutting HR coil pieces into rolling pipes and after welding, threading, and socketing JIL get Black pipes.

The manufacturing process of black pipes are: H. R. Coil

Rolling Welding

Threading

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Socketing

Black Pipes Galvanised pipe:- galvanized pipe is the some addition to Black pipe. It make use of one more process i.e. galvanization. Manufacturing process of Galvanised pipe is:H. R. Coil

Rolling Welding

Galvanisation

Threading + Socketing JIL, never compromise on quality front under the most adverse market conditions. Only SAIL, material in Steel and high Grade Zinc from HINDUSTAN ZINC LIMITED are being used to cater to high quality Pipes/Tubes demand in market. Our pipes are engraved with ISI Mark and trade mark JINDAL with the deice to the map of INDIA in oval shape and world HISSAR underneath, which has become synonymous with high quality steel pipes. Each Pipe/Tubes manufactures by JINDAL INDUSTRIES Ltd. Are testimonies to our commitment to quality and service. Steel pipes are mainly used in : Building Industries

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 Agriculture. JIL pipes basically service the needs of agriculture and industries for conveyance of water. These pipes can also be used in conveyance of oil, gas, etc. in the construction sector. These pipes are popular for use as scaffolding and tabular structure. Why JIL tubes are more popular? Competitive price. Prompt deliveries. High frequency electric resistance welding process, dependable in quality, manufacture JIL Tubes. Available in every range. which make these more

PLACE MIX Place, another key marketing mix tools, stands for the various activities the company undertake to make the product easily available to target customers. It includes various middle man and marketing facilitators. The company the various types of retailers, whole sellers and physical distribution firm.

Distribution Channel:-

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2.1 Domestic Distribution:

The companies domestic market channel is split up into two portions. Direct distribution (30% of sales) Indirect distribution (70% of sales)

Direct Distribution: With a direct distribution system the Jindal hissar reaches the intended final user of their product by distributing the product directly to the customer. But this mostly the B2B

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segment, the orders obtained are huge. They get the orders mostly through tenders. The customers under this channel are: Institutional sales Government sales project SEZ and EOUs The processes are carried over by marketing department. Institutional sales mean the sale to private companies which undertake big projects, those which issue tenders. Indirect Distribution: The company carries indirect distribution through 8 regional offices especially (Jaipur, Chandigarh, Mandi Gobindgarh, Hyderabad, Bangalore, Ghaziabad, Indore and Delhi). The parent Hissar plant also provides materials direct to dealers who are not covered under any regional office. The dealers decide on their own terms, further how the chain should continue. They sell it both to the retail shops and also to end customers. The intermediaries are also involved in promotional activities. The Company uses mass coverage to distribute products (pipes) widely in nearly all locations in which that type of product is sold.

2.2 International:
The international business is relatively small to domestic operations. The orders are obtained through either agents or through the marketing department. The agents work on commission basis. The marketing department participates in international tenders processes. The shipments are taken care by clearing agents. Theses are people who deal with shipments at ports; they take care of goods lying at port warehouse until they are loaded into ships.

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Transportation Structure
The chart below shows the movement of goods in transportation point of view

Trucks

Trucks/Train containers

Trucks/Train containers

Trucks/ Tempos

Pricing and margin:

The pricing of the product and the profit margins involved in each step are explained with the help of an example. The Jindal Companys cost of production of steel pipes is say up to Rs. 46,500 per tone for black pipe. The company sets a margin of 5%, for itself which makes up the price to 49,000 per tone (approximately) The company delivers the steel pipes to dealers or regional offices by a contract with the transportation company, where in they fix the transportation charges to various destinations

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over a period of one year. These transportation charges are added to the companys selling price. In case of Hyderabad the transportation price is Rs. 1,750 per tone, which makes up the cost to Rs. 50700. The company then bills the goods in the name of its Hyderabad branch office and gives an discount of 2 % on Rs. 50700. The company has to pay excise duty to an extent of 14.42% on Rs. 50700 for transporting goods to Hyderabad. The dealers then according to their requirement purchase the goods from the Hyderabad branch office, and in case they are able to make the payment for purchases within a week time then only they are eligible for 2 % cash discount on Rs. 50700.

Pricing with cash Discount to dealer: Cost of production of steel pipes Company margin approx(5%) Transportation cost to Hyderabad approx. Cash discount 2% Excise duty @ 14.42% VAT 4% TOTAL COST Pricing without cash Discount to dealer: Cost of production of steel pipes Company margin approx(5%) Transportation cost to Hyderabad approx. Excise duty @ 14.42% VAT 4% TOTAL COST 46500 2500 1750 50700 7310 58010 2320 60330 46500 2500 1750 50700 1014 49686 7164 56850 2274 59124

The dealer after purchasing the steel pipes from the branch office in Hyderabad at the above mentioned rates then adds a margin of 2 % and then sales the products to its customers or retailers.

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The company also provides the dealers a turn over discount where in if the dealer lifts a quantity of more then hundred tones in a month then he gets a credit note for Rs.15000.(Rs. 150 per ton as TOD), incase the dealer purchases more then two hundred ton then he gets a TOD of Rs.200 per ton and incase of 300 tons and above he gets a TOD of Rs.350 per ton

2.5 Promotion:
The company on its part does promotional activity through advertisements. It also encourages its dealers to do promotion and provides financial support to those expenditures. Promotional activity normally carried out are, issue of pens, pads dairies and putting up hoardings. Also they share costs of any local or regional advertisement costs. The company had earlier also conducted various promotional activities such as organizing the Architect meet, where in architects from Hyderabad where invited and information about the quality and pipe specifications was discussed with them. Similarly a Plumber meet as well was conducted where plumbers were invited and they were encouraged to use pipes of Jindal Hissar. The company also organizes a Foreign trip once in a year, which depends upon the total sales made by all dealers in India during one year and in case the over all sales of dealers meets the companys sales target or expectations then the company organizes a foreign trip. The company has in order to encourage dealers to undertake more sales provided channel financing schemes to its dealers in Hyderabad, so that the dealers with the help of extra finance available undertake more sale of companys products.

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The marketing communication mix (also called promotion mix) consists of four major tools. Advertising. Sale promotion. Public relation. Personal selling.

Advertising:JIL spends negligible amount in add. JIL is not interested in advertisements through electronic media as TV, radio etc. JIL makes advertising through: Hoardings. Kiosks. Press media.

Sale promotion:To promote sale JIL give cash discount. Charity and donation to various institutions is also given by JIL.

Public relation:JIL Empire enjoys good reputation among not only at national level but at international level too. JIL make charity and donation for social welfare.

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 Company does not experience personal selling. JIL has doubled its production and sale during last five years. It has achieved this feet by winning a higher share in a very competitive market, which is also flooded with inferior and duplicate quality pipes.

Sales Figure of Hyderabad from 1.4.07 to 31.12.07

Dealer Sales Bharat tube Goel Steel Nandkishore Salsar steel Tube Corp APRIL 64.761 252.95 115.89 162.81 MAY 96.532 221.035 149.957 168.065 JUNE 75.067 56.598 106.30 172.79 JULY 121.1 159.67 113.56 78.425 AUGUST 117.461 169.219 134.292 105.016 SEPTE MEBER 151.584 126.894 75.928 31.98 OCTO BER 128.114 178.781 179.682 65.373 NOVE MBER 112.582 151.651 101.851 103.19 84.424 DECE MBER 64.385 164.51 163.31 54.978 98.905 Gross MT 931.586 1481.308 1140.783 942.642 183.329 Avg. Sale 77.6 123.4 95.1 78.6 15.3

2.4
The activities such as architect meet, plumber meet, foreign trips and channel finance, all is provided by the company and the cost of all such activities is borne by the company, but these facilities are provided only when the dealers have made efforts and there is increase in sales volume of the company products.

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Chapter 5
RESEARCH METHODLOGY
Research have been conducted out by visited the HQ & different distributor and dealer. Primary data has been collected out by the personal interview of sales manager of jindal industry limited and different distributor and dealer of different states.

3. Inventory Management
In this industry products are highly customized and tend to operate primarily according to a Make-To-Order (MTO) policy and customer lead time is always low. Hence inventory is highly based on production. There are broadly two types of inventory maintained in the company: inventory of raw materials inventory of work in progress

3.1 Inventory of raw materials:

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Raw material holds the majority of companies inventory. As raw material there exists more than 70 items which the company maintains in its store, some of the important items held in inventory has been shown below in the list, the number Uno position goes to HR coils (Hot Rolled Steel coils) which are the basic raw material to produce the steel pipes. To ensure the continuous flow of operations, the company maintains sufficient stock of HR coils in its inventory. The company for this purpose does material requirement planning. According to this a master schedule developed from a demand analysis of orders, forecast and production plans. It then considers available inventory, parts requirements calculated from the bill of materials, then factors in open purchase orders, lead times, logistical considerations, safety stock and other ordering rules, to develop a materials purchasing and factory schedule to meet planned and actual demand. Here they first look into the amount of finished product, steel pipe, is already available with the company in the warehouse and then they calculate the average daily sale of steel pipe depending on the sales figure of the previous three months, incase the steel pipe available with the company as finished product in the ware house is less than fifteen days of average daily sale of the product then they plan to undertake the production of that product. Now having decided the specific product, this is having a stock less then fifteen days average daily sale, the company looks into the right kind of HR coil which will be needed to produce the specific product. They maintain a stock of different thickness HR coils with them and incase the stock left is less then the place an order for the HR Coils. They make sure that the amount of safety stock of HR coils which they have before they place an order is sufficient enough to carry on production till the next fifteen days (lead time). Example: In case of steel pipe of size 15 MM (*see table :) Size and of medium thickness, the total average sale of previous three months has been 1422 metric tones and if we calculate average daily sale then it comes to approximately 57 metric tones and the current stock of product which the company presently has in its warehouse is 269 tones which tells us that it will be able to meet the demand for next five days , so it has to undertake

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production for this product and hence they look into their stocks of HR coils whether they have the right HR coil with the needed thickness. So the company has realized that in case of inventory of raw materials it is the HR coils which they pay most attention to as its the basic raw material which is needed to manufacture the steel pipe and hence they pay the most attention to it. The raw material being steel can be reprocessed in case of any obsolescence, shrinkage or any other damage. The company also has considerable amount of scrap, which are produced in day to day operations.

3.2 Incase of inventory of work in progress:

Though pre planning and production on order closing, this industry is highly prone to fluctuations in demand. In order to cut short delay in any huge sudden order, the company maintains semi finished goods too in inventory. The company broadly manufacturers two types of products that is Galvanized steel tubes and MS tubes, the company manufactures the MS tubes first and maintains the stock of MS and Galvanized steel tubes in warehouse and then depending upon the quantity left in the warehouse of various of types of pipes and also depending upon the demand the company then converts certain MS tubes into Galvanized steel tubes. Inorder to convert the MS tubes in to Galvanized steel tubes the important material which is needed is the Zinc chloride and sulphuric acid which forms the major material incase of work in progress inventory, and so the company pays special attention to the amount of zinc chloride and sulphuric acid is left in the store and then make arrangements for it. So in case of inventory of raw materials it is HR coils which the company pays attention to and incase of inventory of work in progress it is the zinc chloride and sulphuric acid which the company pays attention to. The maintenance of semi finished goods as inventory incurs higher cost compared to inventory of raw materials.

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3.3 Inventory management software:

Incase of other raw materials which are maintained in inventory, there is SAP software, where in the clients orders are entered in SAP software and which generates reports about the inventory stocks which tell about the materials which have to be ordered in order to maintain a stock of them or to execute the current order. The company also maintains a certain inventory items of machine spare parts, the evaluation of which is done on weekly basis. These are maintained to ensure there is no halt in production due to any breakdown.

List of items in inventory:

Current stock 5516 74517 48771 86200 8721 6060 13068 7200 6475 72490 21354 4666 22761 15454 8751 7145 3438 6264 3505 3800 4000 186414 3191 92448 10788 Current stock value 231,149,084 2,440,207 1,593,283 1,115,271 642,924 531,695 435,218 375,121 255,956 253,715 214,160 170,211 162,070 127,651 99,761 85,428 79,271 69,929 60,687 57,000 48,000 42,404 24,453 24,045 20,850

Short text Raw Material HR Coil FURNACE OIL (GENERATOR) F.OIL (G.I) SULPHURIC ACID M.S FLANGE 4" MOBIL OIL ARGINA NO.40 DIESEL G.I.WIRE 14SWG(THREADING) ZINC CHLORIDE 80-85% G.I. SOCKET 1/2" G.I. SOCKET 1" M.S.FLANGE 3" BLK SOCKET 3/4" G.I. SOCKET 3/4" G.I. SOCKET 1-1/4" PLASTIC RING 4" INNER SIZE G.I. SOCKET 1-1/2" PLASTIC RING 6" BLACK(SPECIAL 168.3MM) PLASTIC RING 6" INNER SIZE PLASTIC RING 8"BLACK SHAKTI SEAL POWDER PLASTIC RING 1/2"BLUE ELECTROD ULTRA NO 8 (90) PLASTIC RING 3/4" BLUE PLASTIC RING 4" BLACK

Unit T L L KG NO L L KG KG NO NO NO NO NO NO NO NO NO NO NO KG NO NO NO NO

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PLASTIC RING INNER CAP 2 1/2" PLASTIC RING 32MM WHITE(OUTER) ELECTROD ULTRA N0 10(150) PLASTIC RING 5" BLACK I.S.I.STICKER (M) 1161 PLASTIC RING 6" BLACK PLASTIC RING 25MM WHITE(OUTER) H.O.C. RED SEAL PLASTIC RING 3/4" WHITE(OUTER) PLASTIC RINGS 3"(Y) ISI STICKER 3589 273.0-7.5 PLASTIC RING 1" BLUE PLASTIC RINGS 3/4" (RED) PLASTIC RING 2" BLUE PLASTIC RING 2"BLUE SPECIAL LENGTH PLASTIC RING 40MM WHITE(OUTER) PLASTIC RING 1"INNER SIZE PVC IDENTIFICATION CARD (H) PLASTIC RING 1-1/4" BLUE PLASTIC RING INNER 11/4" PLASTIC RING INNER 1-1/2" I.S.I STICKER-1161 LIGHT PLASTIC RINGS 1/2" (RED) PVC.IDENTIFICATION CARD P.RING PLASTIC RING 3" BLUE PLASTIC RINGS 1/2"(Y) FIRE CLAY I.S.I STICKER MEDIUM IS 1239 PLASTIC RINGS 2"(RED) PLASTIC RING 1-1/2" BLUE PLASTIC RINGS 1" (RED) I.S.I.STICKER LIGHT IS 1239 CABLE SOCKET 2.5MM PLASTIC RING 1-1/2"(Y) PLASTIC RINGS 2-1/2" (Y) PVC TAG MEDIUM IS-1239 PLASTIC RING 2-1/2" BLUE PLASTIC RINGS 1"(Y) PVC IDENTIFICATION CARD (M) ISI.STICKER IS-4270 219.1-8.4 PVC TAG HEAVY IS-1239 PLASTIC RINGS 3/4"(Y) I.S.I.STICKER HEAVY IS 1239 PLASTIC RINGS 1-1/2"(RED) ACL STICKERS ISI.ISTICKER IS470 Grand Total

4500 7463 4870 8180 10538 5479 6257 5000 7937 8162 6409 43224 48848 16111 4634 3687 7000 8107 24936 3767 4010 6900 41646 8700 5782 41221 4000 81690 10760 16103 26739 76640 4780 11385 5393 5450 4565 19268 3818 3450 4825 15578 35330 7153 12550 5082 1420924

NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO KG NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO NO

20,787 20,510 19,567 16,590 15,385 14,495 14,078 13,750 13,675 13,481 13,395 13,324 12,598 12,092 12,048 11,949 11,620 11,274 10,962 10,844 10,396 10,074 9,393 9,370 9,207 9,093 9,050 8,168 8,148 7,871 7,704 7,664 6,897 6,203 5,782 5,441 5,408 5,392 5,344 5,037 4,641 3,662 3,533 3,441 2,259 830 240,530,833

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Chapter 4
4. Ware Housing
The company has parent warehouse at Hissar from were distribution to other warehouses. It has eight regional warehouses. The warehouses perform variety of operations. At the ware house there is a ware house manager whose first job in the morning is to check the products which are available and the actual figures in tons, this report is then sent to the sale department and the production planning department, so that they can decide which size of pipe should be produced depending upon the shortage, the demand orders and availability of HR coils. Grouping & Racking: Well-defined commodities of a reasonable and stable range could usefully be arranged in a logical sequence by commodity. Commodities needing special storage facilities, such as lubricants are often grouped in this way. So are various kinds of bulk material of similar technical nature are grouped together and stored. The company has different racks with the help of which the pipes of different sizes and thickness are stored. In order to save time and to make loading and execution of order faster at the ware house, they have overhead cranes in their ware house department which helps in movement of goods from the racks to the transport vehicles. Lots:

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The steel pipes are loaded into a vehicle with the help of the crane and the pipes are usually dispatched in lots and not individual pieces. It is the responsibility of the ware house manager and his assistants to check whether the batch sizes have been written on the pipe or not, noting down the measurements and length of the pipe at the time of loading.

The following table gives an idea about how many steel pipes make up one lot. Size of the pipe 015mm 020mm 025mm 032mm 040mm 050mm 065mm 080mm 100mm 125mm 150mm 200mm 250mm 300mm One bundle constitutes 11 pcs make one bundle 7 pcs make one bundle 5 pcs make one bundle 3 pcs make one bundle 3 pcs makeone bundle 3 pcs makeone bundle one lot size 20 bundles make one lot 30 bundles make one lot 30 bundles make one lot 40 bundles make one lot 30 bundles make one lot 25 bundles make one lot 50 pieces make one lot 40 pieces make one lot 30 pieces make one lot 20 pieces make one lot 15 pieces make one lot 10 pieces make one lot 8 pieces make one lot 6 pieces make one lot

The goods are dispatched from the companys warehouse to other regional branches and dealers and at times to the direct customer. Nearly 80% of deliveries is for regional ware houses and dealers where as the other 20% of deliveries constitute direct orders from projects, government orders etc. The regional warehouses after receiving the goods can open the lots and then sell it to the dealers in either lots or bundles, the dealers after getting the goods from regional warehouses can sell goods on per piece basis. The sales department based on the reports given by the warehouse department then confirms the orders which the department gets my emails or fax, if the goods are readily available with the warehouse then the order is confirmed or else the sales department then

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has a word with the production planning manager and then decides the production schedule, and on the basis of this order is confirmed. The production and sales manager usually have previous three months data to look into which product has been moving fast, whose product requirements are usually low, and on the basis of this the company decides the planning schedule, as well the products in ware house which are currently available plays an important role, as on the basis of report generated by ware house department and the orders currently in hand by the sales department, the production planner then decides which product should be produced first. The company currently has eight mills which are producing pipes and the average working hours on a normal working day turnout to be twenty hours. Based on the reports generated by the warehouse department the production planning manager looks into what are the product sizes where in they have large amount of quantity of steel pipes available in their warehouse and among them the quantity having maximum stock, based on this he decides not to undertake production of such product, similarly the products which have the lowest amount of stock in the warehouse are noticed and then among the noted sizes the one having the lowest stock is then set on priority basis, and its production planning is done, here however changes could be seen because of the requirements of the sales department to be met. Dead stock: Inspite of the companies effort to produce goods only to order through production planning, dead stock do form in the companies godown. But it is ensured they do not occupy too much of space and always kept less than 4% of entire stock.

5s Technique: The company uses 5s technique in overall organization to meet the quality standards. The 5S Practice is a technique used to establish and maintain a quality environment in an organization. The 5Ss are a group of techniques to promote workplace organization, ensure

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adherence to standards and foster the spirit of continuous improvement. The maintenance, organization of things etc are made through the 5s methodology.

Chapter 5
5. Transport
The company transports the goods either through various transport trucks or through train containers. The company invites price quotations from various transport companies so that the transportation charges and logistics firm for a particular city could be fixed. Once the company has had negotiations with the logistics firm then it undertakes a contract with the logistics firm that goods will be transported from the company to schedule place at the price agreed upon, and the logistics firm shall provide the company with the necessary transport vehicle as and when needed. Incase of trucks usually the tonnage of materials which can be dispatched is either nine tons or fifteen tons. In case the logistics firm makes a default or does not provide the transport vehicles within a specified period of time agreed upon then, the company has the right to charge a penalty on logistics firm, the company has the right to make a debit note and charge it to the deposit balance which each logistics firm has to maintain with the company. If the delay occurs on company side then company compensates for the delay. The company also owns three trucks, which are used to send materials to near by locations like Delhi. It also uses those trucks for any emergency deliveries also. The international transport is carried on by agents and completely done through middlemen. In case of Hyderabad the consignments are sent through trucks and in some cases when the lot size becomes huge they use trains. These transportation cost are also added to the cost as explained previously in pricing.

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5.1 Transportation Structure

The chart below shows the movement of goods in transportation point of view

Trucks

Trucks/Train containers

Trucks/Train containers

Trucks/ Tempos

The company has a separate department to look after the transportation. They prepare the quotations, selecting contracts etc.

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5.2 Processes involved:

The flow chart, explains the processes involved or that take place in transportation.

Kanta Department weighs the loaded vehicle with pipes

Weightment slip is generated according to pipe size, Signed by Kanta Assistant & Officer

Loading instructions form and weightment slip are sent back to Sales Department

Loading instruction form signed by the head of dispatch dept.

Lorry is sent to the destination

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The explanation of the above flow chart is as follows:1. To deliver the goods to customer, the transporter is contacted to make an arrangement for the transport. The matters about fares are settled. 2. When the lorry arrives, its no. is given in the loading instructions form and the lorry is sent to the Dispatch Department 3. .Loading instruction form is got from sales dept. in which size of pipes, quantity of pipes, name of the party, no. of the lorry, destination etc. are mentioned. 4. Kanta dept. does the weight of empty vehicle and generates weightment slip. This slip is signed by Kanta Assistant & Officer. 5. Driver of the lorry is given the loading instructions form and he is sent to the finished goods godown. 6. Now godown dept. loads the goods in the lorry according to loading instruction form and sends the vehicle again to Kanta dept. 7. Kanta dept. does the weight of loaded vehicle with pipes and generates the weightment slip according to pipe size. This slip is signed by Kanta Assistant & Officer. 8. After the loading is complete, the loading instruction form and weightment slip are sent back to the Sales Department. These slips give details about the quantity and weight of the material loaded in the vehicle. The loading instructions form is signed by the head of the dispatch department. 9. Lorry is sent to the destination.

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Chapter 6
6. Channel Conflict:
Provided the vast network of the company and less hierarchy in channel structure there exists many channel conflicts. In most of the cases the conflict was between the transporter and the company. 6.1 Transporter conflict: As the transporters are contracted for a period and they pledge their freight for particular period. But in the case were company comes up with surprise orders there exists a problem with the transporters, either they are unable to provide the freight vehicles in the stipulated time or they cannot provide the needed number of vehicles. The company levies penalty if the transporter defaults but still the conflict is on the go. 6.2 Dealers Conflict: There exists conflict among dealers to gain margin. The dealers cut on their margins to compete among themselves. The worst case was one of the dealer in Uttar Pradesh went on to incur an loss to bag a huge order, shielding other dealers from bagging it. The company doesnt get into this as it doesnt affect the company in any ways. But overall its not good for the channel. The dealers do so as they have pledge a amount of sale to the company at starting of procurement. 6.3 Channel Power: The company stays atop all the channel members, they control the sale by providing material to various dealers. Provided the high growth in the industry every dealer has huge orders. The company regulates the flow by placing proportionate materials to various people.The company also controls and encourages members through providing them with

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discount in spite of the dealer getting margin on price set to the customer. Also other incentives like foreign trips.

The complete Cycle:

Monthly analysis report generated (why enquiry is closed) Enquiry Closed

Order Confirmation report is generated Enquiry Proceed

Enquiry Entered

Planning

TDC confirmation technical delivery condition

Profitability Analysis

Credit Limit

Schedule Vs Actual analysis report Generated

Pending Order Report show in days Receive the orders from Agent / Tender / Branch and others.

Sales Order Form is Generated Signed by Sales Assistant & Officer

Review the Requirement as per sales order with respect to availability of stock position. In case of any deviation inform the Customer on phone

Loading Instruction Form, Signed by Sales Manager and Godown Incharge

Contact the Transporter and arrange for the Transport

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On arrival of Lorry, give the number in the loading instruction and sends to finished goods godown

Kanta Department does the weight of empty Vehicle and generates weightment slip

Godown Department Load the goods according to Loading Instruction form and send the vehicle to Kanta Dept.

Weightment slip is generated, Signed by Kanta Assistant & Officer

Kanta Department does the weight of loaded vehicle with pipes

Weightment slip is generated according to pipe size, Signed by Kanta Assistant & Officer

After loading completed receive back the loading instruction & Weightment Slip from dispatch section giving detail of material loaded in terms of quantity

Challan is Generated in Triplicate, Signed by Sales Assistant & Sales Officer

Packing list Generated, Signed by sales Officer Bilty is Generated in Triplicate form, Signed by Sales Assistant & Officer Packing list is prepared on the basis of loading instruction

Incase of any changes in the order from party, review the changes with respect to earlier loading instruction cancel the corresponding loading instruction if not handed over to godown Incharge. If already handed over, call back the loading instruction and change as required

Bilty is prepared on the basis of Challan

Invoice is Prepared on the basis of Challan, Bilty, Weightment Slip, Loading Instruction

Invoice Generated in 4 Copies, Signed by Sales Assistant & Bill checker & Sales H.O.D.

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If we are giving debit note to party then we raise the debit note Debit Note is Generated, Signed by Account officer

If bill is sent to out of Haryana and bill amount >20000 then we prepare the Way Bill (ST 38) for VAT. These are collected from the sales Dept. Signed by Sales Assistant

If we are giving the discount of commission, Frt, T.O.D.or rate diff. in bill then we raise the credit note. In case of credit note sometime we adjust his account otherwise issue a check Credit Note is generated, Signed by Sales H.O.D. Gate pass is generated, Signed by Sales H.O.D.

Gate Pass is prepared for Vehicle out from company Gate

Material Sent to the Party. Then he send back the bilty, Signed by material receiver party on bilty. Customer complain register is maintained For Payment Chasing to the party Find out the customer complain is resolved or not, If not then what is the reason, explain

Payment Direct deposited by parties in the nearest Bank or Destination in company account or they send the Draft to the company

We get the payment details of parties from our bank account daily (through web sites) if they deposit the amount Then we credit in parties account

Final Profitability analysis Report Generated (Customer wise, Monthly wise, Year to Date The explanation of the above flow chart is as follows:- wise)

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1. The buyer enquires into the product of the company, prices of the products, discounts, terms and conditions of the company etc. Enquiry of the customer is entered by the sales dept. 2. After entering the enquiry, if it is closed, then monthly analysis report is generated in which it is mentioned why enquiry is closed. If the enquiry of the customer is proceeded, then the following is done:i. Planning is done that how much raw material will be required, at what price the company will be able to procure the raw material, will the company be able to get the material within prescribed time etc. ii. Technical delivery condition (TDC) form is prepared in which following information is available:o Customer Name and address o P.O. no o Destination o Delivery date o Order Details o Chemical Properties o Physical Properties o Dimensions o Marking details iii. Profitability analysis is done on the basis of cost and prices of the products of the company. It is seen that if the company sells its products at a particular price, how much profit it will be able to earn, how much discount the company can give to its customer. How much credit the company can give to its customers, for how many days the credit will be given, it is also determined.

iv.

3. Schedule V/s actual analysis report is generated. In this report, it is mentioned that on what date the customer wants the delivery of his order and will the company be able to deliver the order on time or not. 4. If the company is not able to deliver the order on time, pending order report is generated in which it is mentioned that for how many days the order will be pending. There may be many reasons for the order being pending like shortage of raw material, shortage of man power etc. 5. Orders are received by the company from its agents, branches and customers. Sales order form is generated on basis of the purchase orders received. It is signed by Sales Assistant & Officer. The form contains the information about the description of item ordered by the party, quantity of the item to be supplied, prices, discounts, place of the delivery etc.

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6. The requirement as per sales order is reviewed with respect to availability of stock position that the goods are available with the Co. in the required quantity or not. If the company has not enough stock, the customer is informed on phone that in how much time the stock will be available with the company. If the company has enough stock, loading instruction form is generated which is signed by Sales Manager and Godown Incharge. In the form, the instructions are given that how much quantity is to be loaded in the vehicle. 7. To deliver the goods to customer, the transporter is contacted to make an arrangement for the transport. The matters about fares are settled. 8. When the lorry arrives, its no. is given in the loading instruction and the lorry is sent to the finished goods godown. 9. Kanta dept. does the weight of empty vehicle and generates weightment slip. This slip is signed by Kanta Assistant & Officer. 10. Now godown dept. loads the goods in the lorry according to loading instruction form and sends the vehicle again to Kanta dept. 11. Kanta dept. does the weight of loaded vehicle with pipes and generates the weightment slip according to pipe size. This slip is signed by Kanta Assistant & Officer. 12. After the loading is complete, the loading instruction slip and weightment slip are received back from the dispatch section. These slips give details about the quantity and weight of the material loaded in the vehicle. Three copies of challan are generated and signed by Sales Assistant and Sales Officer. 13. Packing list is prepared on the basis of loading instruction slip and signed by Sales Officer. 14. On the basis of challan, three copies of bilty are generated and signed by Sales Assistant & Officer. 15. Four copies of invoice are generated on the basis of challan, bilty, weightment slip and loading instruction slip. Invoice is signed by Sales Assistant & Bill Checker & Sales H.O.D. Incase of any changes in the order from the party, the changes are reviewed with respect to earlier loading instruction. If the loading instruction form has not been handed over to godown incharge, corresponding loading instructions are cancelled. If it is already handed over, loading instructions are called back and changed accordingly. If we are giving debit note to party, then we raise the debit note which is signed by Account Officer. If we are giving the discount of commission, Frt, T.O.D. or rate diff. in bill then we raise the credit note which is signed by Sales

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H.O.D. In case of credit note sometime we adjust his account otherwise issue a check. 16. If bill is sent out of Haryana and bill amount is greater than Rs. 20000, then we prepare the Way Bill (ST 38) for VAT. These are collected from the sales dept signed by Sales Assistant. 17. Gate pass is prepared for vehicle out from the company gate. Gate pass is signed by Signed by Sales H.O.D. 18. Material is sent to the party. Then the party sends back the bilty, signed by material receiver party. Customer complain register is maintained in which the complaints from the customers are noted down. It is found out whether the complaint has been resolved or not. If not, then the reasons for this are explained. 19. Party is chased for the payment. 20. Payment is direct deposited by parties in the nearest bank or destination in company account or they send the draft to the company as per the instructions given to them by the company. 21. Company gets the payment details of parties from its bank account daily (through web sites) if they deposit the amount in the bank account. Then the company credit in parties account. 22. At last, final profitability analysis report is generated (customer wise, monthly wise, year to date wise) in which the profits earned by the company are mentioned.

BIBLIOGRAPHY
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Past record of jindal industries . www.google.com www.wikipedia.com www.jindalindustries.com.

RESEARCH METHODLOGY

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Research have been conducted out by visited the HQ & different distributor and dealer. Primary data has been collected out by the personal interview of sales manager of jindal industry limited and different distributor and dealer of different states.

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