The SAIL and Tata Steel co-promoted e-Commerce initiative, MetalJunction.com Private Limited, has yielded considerable benefits to Tata Steel in its first full year of operations. MetalJunction.com Private Limited has two-business units viz., CommerceJunction, which focuses on e-Procurement, and MetalJunction, which is focused on e-Sales and fulfillment services.

e-Procurement

Tata Steel decided to start using e-Commerce for procurement and has procured materials and services up to March 31st, 2003. The savings that accrued to Tata Steel from these procurements were approximately 5.96%. Savings are calculated as a reduction achieved in online price over the immediately preceding offline procurement price.

Savings have been as high as 23.43% and in some cases there have been marginal or no savings at all. However, Procurement through CommerceJunction brought in more competition and ensured that prices were either reduced or arrested.

Process Efficiecies: Tata Steel's conventional procurement processes, involve a considerable amount of negotiation which take up a lot of time and man-hours. By outsourcing the procurement of certain products/services to CommerceJunction and migrating the process online, Tata Steel has saved precious man-hours and the procurement cycle time has shortened. The entire process is simple and easy and it reduces communication costs significantly

Tata Steel and CommerceJunction are today working together to study new products and services that can be migrated to online procurement. On identifying the spend areas which can be swiftly moved to online procurement Tata Steel will work with CommerceJunction to move the
procurement process online.

e-Selling

Tata Steel has during the last fiscal year worked towards migrating offline sale of steel to online e-Selling. Tata Steel initiated the first online e-Sale through MetalJunction in the month of February 2002 and since then has sold 221,259 MT.

The products that Tata Steel has sold through MetalJunction are: HSM Defectives, HSM POR, GP Coils, LP Defectives, Prime Billets and Secondary Products

The results have been extremely encouraging for Tata Steel with products being sold to customers all over the country.

1) The prices obtained by MetalJunction have been reflective of the market situation.

2) The entire cycle time of selling material is reduced by the speed and efficiency with which on line competitive bidding events can be created and managed.

3) Through intensive market making efforts and the use of technology, MetalJunction is bringing in greater efficiencies to processes and focus to the sale of non-core products of Tata Steel.

Besides the above selling services MetalJunction is offering fulfillment services too.

e-Collection:

MetalJunction has offered buyers the convenience of paying for the material with a click of a mouse.

A cash management service arranged in association with Citibank and HDFC. Expanded the scope of e-Selling to include collection of money.

Tata Steel and MetalJunction are today working together to not only increase the quantities, of the products sold over the last fiscal year but are also identifying new products to be sold through this highly efficient route.

Channel Finance

MetalJunction provides a unique service of arranging finance for the distributors of Tata Steel on an online 24X7 basis. MetalJunction has negotiated with some leading private and foreign banks in India to offer credit to the distributors of Tata Steel. This has ensured that Tata Steel need not offer credit on sales. This has increased realizations and lowered working capital requirements of Tata Steel.

The amount of finance arranged since the inception of this service up to March 31, 2003 has been arise and the number of distributors availing this service has grown to 58.

For the distributors, credit is available anytime, including weekends and holidays. They can pay Tata Steel anytime of the day, have a delivery order issued and take delivery of material. And most importantly the distributors have access to organised sources of finance at competitive interest rates which are usually not available to them.

Buoyed by the success of Channel Finance, MetalJunction is now working with Tata Steel and the banks to extend online finance to OE Manufacturers' as well and this service is expected to be unrolled during the current fiscal year.

A Payment gateway is also being enabled to facilitate online payment by buyers of material through online auctions. This service will ensure smooth transfer of Earnest Money Deposits and final payments by auction winners. The entire system will be integrated with Tata Steel to ensure smooth processes for the issue of Delivery Orders and dispatch of steel.