New Delhi: MetalJunction.com, a joint venture of Tata Steel and Steel Authority of India (SAIL) is ready to offer e-based procurement and selling solutions to corporations that are ready and willing to accept change.
MetalJunction.com Pvt Ltd managing director Viresh Oberoi says Tata Steel and SAIL have achieved considerable savings and greater efficiency in procuring and selling via MetalJunction.com.
1999: the year when the dotcom boom was at its peak and e-commerce was the new buzzword doing the rounds was the time when Dr JJ Irani, managing director, Tata Steel and Arvind Pande, chairman, SAIL, had a spate of offers to join domestic and international e-commerce platforms for the steel industry.
Rather than joining any ill-conceived dotcom, SAIL and Tata Steel independently set up internal e-commerce taskforces to study the various e-commerce models that had sprung up during the dotcom boom of the late '90s.
These two taskforces came to identical conclusions, that whilst e-commerce is definitely the way forward, it would make more business sense for two or three of the largest players in a similar industry or region to come together and consolidate their e-commerce plans on a common platform not just for their mutual benefit, but also for the benefit of the entire steel industry and thus, MetalJunction.com was born.
Strategic shift in focus
Since the dotcom bubble burst in 2000, companies operating in the business space of providing procurement and selling services have had to reinvent themselves to survive and grow in line with market needs.
Corporations around the world - SAIL and Tata Steel included - have realised that in a world without boundaries, certain regions and people with distinct competencies will be more efficient than others. Outsourcing, therefore, is the visible trend in the world today.
Companies are outsourcing manufacturing activities, customer services, back-office operations and a whole host of other activities, either because there is someone else who can do the same thing for less or there is a specialist in the activity and therefore can do the same thing better.
Globally and in India companies are recognising that an Internet marketplace and bulletin board services do not serve the real needs of companies. What companies are really looking for are complete solutions which embrace technology, the Internet and most importantly specific industry domain expertise.
This is leading to the emergence of specialists for procurement services and selling services who are typically called procurement service providers (PSPs) and selling service providers (SSPs) whose scope of work envisages the entire procurement process, selling and fulfilment processes of companies and emphasises importance on both, an online solution backed with a strong offline presence.
Service providers who are quick to innovate and create new products and services, which map the needs of industry, will emerge as winners in this business space.
MetalJunction.com commenced e-selling in February 2002 and has worked with its clients to migrate products from the traditional offline process to the online platform. Till 31 March 2003, MetalJunction.com sold 258,723 MT of steel aggregating Rs 343 crore.
MetalJunction.com offers two types of e-selling services:
- Full Service on a business process outsourcing (BPO) mode
MetalJunction.com takes end-to-end responsibility of selling client's low 'value' and/or standard products.
This service offering entails:
Organising e-selling events
- Identifying products/services that are suitable for e-selling
- Undertaking market research and market-making activities to generate buyer leads
- Creating suitable market lots to ensure maximum participation from buyers
- Conducting the auction event
- Undertaking collection of payments, like earnest money deposit and principal
- Ensuring fast and secure handling of money; MetalJunction.com has tied up with Citibank and HDFC Bank
- Collecting sales tax documents
- Managing customer complaints
- Assisting clients in increasing the productivity of assets by disposing surplus stock, idle and unproductive assets and releasing cash which is otherwise blocked in these assets.
- Process Support Services on an ASP mode
MetalJunction.com takes responsibility of designing, developing, hosting and maintaining web-based applications to support clients' selling processes of its branded and/or high 'value' products.
The objective of providing "process support services" is to enable clients to manage key customer relationships better by providing them web-based applications on an ASP mode.
The applications that it has developed and can be customised to clients needs are:
- Distributor Connect
- Catalog Sales - based on availability check.
MetalJunction.com's e-selling offering is a complete selling solution emphasising importance on both an online and offline presence, by employing cutting-edge technology, the Internet and most importantly industry domain expertise of steel, ferro alloys, minerals and non-ferrous metals.
MetalJunction.com has created a separate business unit called CommerceJunction.com, which provides procurement services through a website called www.commercejunction.com. It commenced e-procurement in end of 2001 and has procured products and services worth Rs 166 crore and brought about savings of Rs 11.54 crore or 6.94 per cent until 31 March 2003.
The team identifies products and services that are suitable for online procurement and provides a full range of services for the products and services so identified. The products and services that CommerceJunction.com has sourced till date are listed below:
|Category || |
|Chemicals || |
|Electrical consumables || |
|Ferro alloys || |
|General consumables || |
|Instruments || |
|Logistics || |
|Mechanical consumables || |
|Non-ferrous metal, iron metallics || |
|Petroleum products || |
|Refractories || |
|Grand Total || |
For low-spend and low-strategic buys CommerceJunction.com provides customised web-based "purchasing applications" on an ASP mode. Besides providing these services and solutions, CommerceJunction.com offers services like Supplier Finance and Vendor Rating services to its clients.
Channel Finance is a service which was initially conceived as a fulfilment service but MetalJunction.com today has identified this service offering as a stand alone service. Since the service was introduced Rs 262 crore of online finance has been arranged for the channel partners of our clients.
Channel finance is offered in association with leading Indian private and foreign banks. This service offering allows companies to reduce their working capital needs by enabling them to sell on cash basis without recourse to them.
For the distributors/channel partners, it offers them access to finance at competitive interest rates. This service is available online on a 24/7 basis and weekends and holidays are no longer a constraint to transact business.
MetalJunction.com's offering has some distinct advantages:
- Can offer finance from multiple banks to a client company's distributors
- Is a single-window interface between client company and banks
- All of the client companies' distributors are likely to be covered by any one of the partner banks
This service has successfully been used for the steel industry and MetalJunction.com is looking to extend this service to the fast-moving consumer goods, cement, petroleum products and other industry verticals that have large distribution networks.
Last man standing
MetalJunction.com has met and overcome challenges and sailed through steadily. This is in contrast to others who had entered this arena earlier, and despite their 'first mover advantage they have either closed shop or are struggling to survive.
The future is bright for MetalJunction.com, and the company is confident that it will be recognised by industry as an important lever in transitioning towards greater efficiency and profitability.