MetalJunction.com Pvt Ltd has brought "considerable benefits" to
Tata Steel during the first full year of its operations. Floated
jointly by Tata Steel and Steel Authority of India (SAIL), MetalJunction.com
has two units, CommerceJunction, which handles e-procurement issues
and MetalJunction, which focuses on e-sales and fulfillment services.
the e-procurement front, Tata Steel sources said the company has
procured materials worth Rs 90.25 crore up to March 31, 2003 through
Company sources claimed that the procurement method resulted in
savings of Rs 5.37 crore (around six per cent). Savings were calculated
by the company as a reduction achieved in online price over the
immediately preceding offline procurement price. They said savings
had been as high as 23.43 per cent in some cases while admitting
that in some other instances "there have been marginal or no savings
On the other hand, CommerceJunction brought in more competition
and "ensured that prices were either reduced or arrested".
Another gain which the company recorded by outsourcing the procurement
of certain products/services to CommerceJunction and by migrating
the process online has been its saving on man-hours and on the procurement-cycle
time, said sources. Its conventional procurement processes involve
considerable time and man-hours.
steel major is now identifying more "spend areas which can swiftly
be moved to online procurement".
Similarly by adopting e-selling, which the company had initiated
in February 2002, it sold around 2,21,259 metric tonnes of steel
worth Rs 291 crore. While online selling "has been reflective of
the market situation", the company had saved on "the entire cycle-time
of selling", they said.
also proved to be a boon to buyers by ensuring the convenience of
making payments online, through a cash management service arranged
in association with Citibank and HDFC, they said.
in association with some leading private and foreign banks, has
been providing credit facilities to Tata Steel's distributors by
way of what is called "channel finance".
sources said this has "ensured that Tata Steel need not offer credit
on sales", while ensuring increase in realisations and lowering
its working capital requirements.
online initiative had seen about Rs 262 crore finance being arranged
till March 31, 2003 for around 58 of its distributors, they said.
According to Tata Steel sources, the success of "channel finance"
has convinced it to extend the online finance facility to original
equipment manufacturers (OEMs) as well during the current fiscal.
A payment gateway is also being enabled to facilitate online payment
in case of online auctions and tenders.