organization study

BMM ISPAT LTD, HOSPET

INTRODUCTION

The project work is carried at BHARATH MINES AND MINERALS ISPAT

industry .The main theme of the study is to understand and evaluate the market forces

operating in the mines and minerals industry. The study also furnishes results

pertaining to market potential of mines and minerals mills industry in Bellary and

hospet . It’s an instrument which help the unit to understand its strength and weakness

and thus work on it to intensify its position in the market.

This organization study was an effort towards understanding the organization, its

polices and structure of Bharath mines and minerals industry. The methodology

adapted for the study was observation and direct interview. Various departments were

visited and data was collected about the structure and functioning of each department

and the organization.

The overall organization structure was studied along with the functioning of various

department such as human resources, administration, sales, marketing, finance and

production department.

Bharath mines and minerals industry has very strong competitions like

[OBERAI ENTERPRISES, KOCHIN. ABHISHEK MINERALS, RAIPUR.]

Bapuji Academy Of Management and Research, Davanagere 1


PART-A

1.INDUSTRY PROFILE

ORIGIN OF INDIAN MINERALS INDUSTRY

The steel industry in the world, which was characterized as a sunset industry two

decades ago, is experiencing a vast change in scenario. The fast developing has far

outstripped the world minerals giants. United States, Russia and Japan, which were

leading minerals producers, are no more in a position to claim that position.

China, producing less than a million tonnes of minerals prior to revolution in 1949,

has now become the largest minerals producer in the world. During 2005 the global

minerals production stood at 1132 million tonnes, showing a rise of 6 per cent over

the last year. The countries in South America, CIS (former Soviet Union) Europe and

North America have actually shown negative growth. The Asian continent for the first

time produced more crude than the rest of the world combined. Major shift has taken

place because during 2005 with China producing 349 million tonnes of

minerals,counting for 32 per cent of the world minerals production

Per capita consumption of minerals in the world was estimated to be 500

tonnes during the year 2005. However in India it stood at only 150 kg during the same

year. Indian steel production was 38 million tonnes, which accounted for only 3.4 per

cent of the world minerals output. In view of the fact that Indian population is 16 per

cent of the global population, the production of minerals is much lower in India.

AlthoughIndia is the second largest populated country in the world, it ranks eighth in

minerals production.

With stiff competition in the global market, the formation of giant companies to

reduce cost and add to profitability has become the regular feature in the industry.

Merger and acquisitions have become the order of the day.

WORLD BANK ADVICE

Though India has objective conditions to become one of the major steel producers, in

the world it continues to lag behind. Despite the fact that India has huge reserves of

good quality iron ore and sufficient quantity of manganese, dolomite and coal, it is not



producing higher quantity of minerals. India produces more than 100 million tons of

iron ore, of which only one third is utilized indigenously while two thirds is exported

at a throw away price.

In 1980, the World Bank in its report advised the government of India not to go for

any Greenfield public sector minerals plant. Inspite of Indira Gandhi laying the

foundation stone for public sector minerals plant at Daitari and Vijayanagar in 1973,

the government of India made no investments. On the one hand adequate additional

investments were not made by the government in SAIL and on the other hand the

government scrapped the industrial policy resolution of 1956 which provided

development of core sector of economy only in public sector. The government

permitted private sector irone ore plants. As a result of this decision, Essar, Mittal,

Jindals, Tata groups have taken steps to start more iron ore plants in the private sector.

Recently, the government of Orissa even went to the extent of allowing South Korean

company, POSCO, to take control over the iron ore resources of the state and export it

for their requirement to South Korea

LOW CONSUMPTION OF MINES AND MINERALS.

India has extremely low level of consumption of minerals and the government of

India has not made attempts to promote use of more indigenously produced minerals

The per capita consumption of minerals in rural India . The wrong thrust given on

export of minerals has also resulted in the utter neglect of developing rural market for

irone ore.

UNDERMINING OF PUBLIC SECTOR

The government of India, as a policy measure, systematically reduced the role of the

public sector in steel industry. It forced the management to appoint Mckinsey, a

World Bank sponsored MNC consultancy firm, to suggest restructuring of the

organization. Mckinsey recommended sale of Alloy Steel and minerals Plant

Durgapur, Salem minerals Plant and Visweshwarayya Iron and Steel Co. Ltd. It also

recommended privatization of IISCO. It further advised to drastically reduce the

manpower and increase the workload on the workers.

It was only due to the strong trade union movement in these plants that they were

saved from privatization and sale. Salem minerals Plant developed a big political



movement to oppose selling it to Jindals and Tatas even as workers came on to the

roads to resist the move.

While undermining the public sector, the government of India encouraged Tatas,

Mittals, Essar and Jindals to develop and expand their capacity. While management

had to work under heavy restrictions by the bureaucrats and capricious ministers of

minerals and iron ore, the private sector was completely free to take decisions.

Despite iron ore acquiring the status of a navaratna company, lack of autonomy

prevented it from developing faster while the private sector received every

encouragement for increase in capacity.

IndianmineralsIndustry:-

Glorious present, glittering future

The Indian minerals industry has recorded remarkable performance in recent years.

The industry is now capable of producing high quality materials to stringent

international specifications for high end applications in sectors like construction,

engineering, automobile and infrastructure. Indian steel products have been well

accepted in the global market and the country’s export of finished minerals and iron

ore crossed the 5 Mt mark in Fy’04 at 5.22 Mt. which was about 14.4 percent of its

total domestic production.

Production

The production for the Indian minerals industry between 2001-02 and 2006-07 are

presented

(a) The average yearly growth of finished minerals production in India between 2001-

02 and 2006-07 was 9.06 percent.

(b) The average yearly growth of long products between 2001-02 and 2006-07 was

7.84 per cent while that of flat products was 9.96 percent.

(c) The share of flat products in the total production of finished minerals increased

from 57.3 per cent in 2001-02 to 58.2 percent in 2006-07.



(d) The share of semi-finished minerals in the total production of saleable minerals

has come down to 22.04 percent in 2006-07 from 23.79 percent in 2001-02.

(e) The average yearly growth in production of pig iron, Sponge Iron, Structural, Rly.

Materials, HR Coils / Skelp, CR Sheet / Coils were more than 10 percent between

2001-02 and 2006-07.

India – A net exporter of finished minerals

India has been a net exported of finished minerals for many years. The net exports of

finished steel between 1999-2000 and 2006-07

Demand & apparent consumption of finished minerals India

The demand and apparent consumption scenario in respect of finished minerals

products are presented. It is observed from the above table that the average annual

growth in finished minerals consumption in India between 2000-01 and 2006-07 has

been about 4.78 per cent.

India’s target for 100 Mt steel productions by 2018

The National minerals Policy has set a target of 60 Mt of minerals production by

2010 and to further increase it to a level of 100 Mt by 2018. The major minerals

producers in India are planning to expand their capacities in tune with the National

minerals Policy formulations. Some major expansion program of the leading minerals

producers in the country are mentioned.

Conclusion

The Indian minerals industry has made marginal additions to its capacities in the

decade up to 2006-07. The new Greenfield projects and the massive expansions

announced by leading producers may take the country’s production capacity to a level

by 2011-12 that will help the consumption level to 60 Mtpy.

Removal of infrastructure bottlenecks in railway and road transportation, speedy up

gradation of ports and supply of uninterrupted power with consistent frequency will

help the minerals industry grow at a rapid sp



2. COMPANY PROFILE

Introduction to the Company:

Bharat mines & minerals is one of India’s largest of iron ore located in

the Hospet Sandur belt in Karnataka, India BMM was established in 1979 by late

Udachand Singhi who started supplying Iron ore to MMTC. Subsequently they

developing markets in the private sector.

Mines with different grads & type of iron ore in the Hospet, Sandur belt suit

various steel mills requirement. BMM belives thinking is the capital, expertise is the

way, Hard work is the solution.

BACK GROUND OF THE COMPANY

Bharath mines and minerals has been promoted by Late Sri. Udachand

Singhi , who first ventured in manufacturing and suppliying implements through

mines and minerals business and was instrumental in setting up a Bharath mines

and minerals. After acquiring varied experience in mines and minerals for about 15

years, Sri udachand Singhi in 1979 thought it appropriate to go for backward

integration and he set up a new industry called “Bharath mines and minerals

Limited” shortly known as “BMM” in the year 1979. Sri S. Dinesh sing who is now

having over 35 years and experience in marketing of Iron and minerals products is

well known in the Indian Iron and minerals Industry.

Location of the Company:

Bharath mines and minerals is located on the hospet near dhanapur – chitradurga

road about 3 kms from the city of hospet, in the North – East state of Karnataka.

hospet is strategically located 300 km west of hospet & almost equidistant from

Chennai, Hyderabad, and Mangalore & Goa. Hospet is well connected by road & rail.

The BMM plant is located a plot of land about 5 Acres. The plant is in some long

proximity to the Hospet Railway station & as well as RTC.



HOSPET is also ideally located near the major power generation stations, both

Hyde & Thermal like Raichur, Munirabad, and Bhadravathi & Kalinandhi. All these

stations are connected to the grid at Munirabad (about 8 kms from HOSPET) the grid

also receives power from the Ramagudam, Thermal station of NTPC. BMM plant has

never experienced any shortage of energy so far & the quality of power supply by

virtue of its closeness to the grid is of a high order.

BRIEF HISTORY OF BMM:-

M/s Bharath mines and minerals came into existence in 1979as a partnership

firm, as a public utility unit, by installing 8”inch minerals. The unit is located at

sight number. , Chitradurga Road, Hospet. The initial production was 4500 M T

pa. The output of the unit was M S channels M S Angels, Iron sheets and Iron rods.

Since its inception, the unit has grown in leaps and bounds and to cater to the

ever increasing demand for structural, the unit in the year 1972-73 converted the 8”

inch rolling mill into 10” inch rolling mill and was able to achieve an annual

turnover of Rs.2.5 Crore, producing annually 6000 M T pa.



The promoters once again went in for expansion of the unit in the year 1990 by

installing 16” inch rolling mill to the special structural like girders and channels

used for fabrication of industrial sheds and railway platform sheds. These can be

used for construction of dwelling houses too. With the installation of this 16”

inch rolling mill, this unit had the distinction of being the only of its kind in the

entire state of Karnataka. With the annual turnover of Rs.18 Crore up to Rs.24

Crore, producing annually 22000 M T pa. Of output. The unit was able to procure

the required skilled labour from within the states of Karnataka and was able to

prove that a unit located in Karnataka was potential enough to train and absorb

labour fro within states and uninterruptedly continue its production.

Keeping in view the growing demand and requirement of M S channels Iron

sheets ,Iron rods and heavy sections, and having regard to safety of workers the

promoters have now decided to atomize the entire plant to increase the productivity

and efficient utilization of the existing capacity and also keeping in view the cost

effectiveness the promoters have proposed to go in atomization of the entire plant.

With initial present investment of Rs.40/- lakhs in 1969, the unit has grown

over the years and at present the unit is worth of Rs. 12/- Crore and with additional

investment of Rs. 3.80 Crore including margin money for working capital the

promoters of 7000 M T pa. There by leading to an annual turnover of Rs. 37.5

Crore.

After completion of first phase of expansion programme as discussed above.

In the second phase the unit intends to install Roughing stands for both 16” and

10”inch mill, along with roller tables and skids which helps to increase the

production of 8000 M T pa with and additional investment of Rs. 90/- lakhs.

TYPES OF PLANTS IN BMM

SPONGE IRON PLANT

1) Sponge Iron: Sponge iron is a generic name of metallic product obtained

through reduction of iron oxide in solid state.

2) Capacity : 2 x 100 tonnes p/d

3)

Rotary kiln

Esp

Rotary coolers



Screens

Magnetic separator

After burning chamber

4) Technology: Direct reduction of iron ore in rotary kiln.

5) Products: Sponge iron lumps & fines

6) Bye products: Dolochar & waste gases

7) Utilization of bye products & waste

8) Dolochar can be used for power generation in power plant.

9) Waste gases can be used for power generation in power plant.

INDUCTION FURNACE & CONTINUOUS CASTING MACHINE

a) Billets: melting of charge in furnce by using the

principal of electromagnetic induction.

b) Capacity: 300 tones per days.

c) Raw material: Sponge Iron, scrap, ferro alloys,

aluminum, sodium silicate etc.,

d) Technology: electro herm, concast India.

e) Product: MS Billets.

f) Product size: 100 to 200 units.

g) Bye product: slag, can be utilize in cement

industry.

ROLLING MILL

1. Rolling bars: Reheating of billets at 1150 by using oil fred pursher type

reheating furnace.

2. Capacity 25 tones per hour

3. Raw material: Billets

4. Technology: Tempcore

5. Product: TMT (Thermo Mechanically treated) bars of sizes 8 mm to

32mm, plain roads.

PRO THERMAL POWER PLANT

6. Capacity: 25 mw

7. Major units:

a) Waste heat recovery boilers 10 tones per hour 2 no’s

b) Atmosphere fluidized led compassion boilers 92 tones p/n – 1 on’s



c) 25 mw injection turbine

d) 25 mw generator

e) Air coded condenser

8. Fuels: AFBC

Coal

Dolochar

Coke Breez

Julie flora

9. Technology : coal based & waste heat recovery boilers

SWITCH YARD:

10. Capacity : 220 KV

11. Major units:

20 MVA transformer

245 KV Isolator

245 KV current transformer/ inductive voltage transformer

245 KV SF 6 circuit breakers

12. Purpose: Receiving & distributing 220 kv / 11 kv power to individual

divisions.

13. Advantage: Connected to national grid, so assurance of continuous supply

of power.

PELLET PLANT:

1. Pellets : Agglomerated & heat hardened iron ore fines

2. Capacity: 1.2 million tones p/ annum.

3. Raw material: Iron ore fines, coal, lime, store bentonite.

4. Major Units:

Mixer

Traveling grate

Rotary kiln

Coder

Circular under



Product, handling system

5. Product: Pellets

BENEFICIATION PLANT:

6. beneficiation: Up gradation of iron ore

7. Capacity: 1.2million p/a

8. Raw material: Iron ore

9. Major units

Crasher

Ball mill

Gravity separtor

Magnetic separtor

Thickener

PROMOTERS:-

The promoters and partners of the unit are:-

1. S.Madhava

2. S.Sivaram Prasad

3. Smt. S.Parvathi Madhava

4. S. Bhanu prakash

5. S.Madhu Babu

PRODUCT PROFILE OF PLANT OF BMM:-

The major production of plant

MS Beams

MS Channels

MS Angels

Iron Sheets

Iron rods

RAW MATERIALS



Raw-materials are the most important in each & every organization. The major

raw materials used to produce MS Beams, MS Channels, MS Angles, ironbelts and

iron roads

1. MS BILLETS

2. MS INGOTS

3. BLOOMS

4. IRON ORE

Apart from those main raw materials, the following is also used for producing the

above products

Coal

Electricity

Water

Furnace

This type of furnace used by BMM is pusher furnace and it required 1500 kgs/per

hour of coal and the furnace should be heated up to 1200*c-1600*c. Coal is a fine

coal crashed to get powder and it is brought from KOREA.

While processing the heated Billets there is a requirement of electricity and water.

At present all materials, (both in word and outgoing) are manually handled.

This process requires a lot of man power and huge cost associated with the loading

and unloading of the raw materials and finished products. The existing process can be

summed up as below-

The raw materials i.e., billet and blooms are unloaded from trucks manually and

spread in the billets yard for cutting into required lengths and sizes.

The billets in the yard are then marked into different sizes and manually cut,

which requires very heavy labour.

ORGANISATION STRUCTURE



Structure describes the hierarchy of authority and accountability in an

organization these relationships are frequently diagrammed in Organizational

charts. Most organizations use some mix of structures- pyramidal, matrix or

structured ones – to accomplish their goals.

A structure is the formalizing of relationships, roles and

responsibilities in order to recognize and perform work.

In simple terms, structure is a pattern in which various parts or

components are inter-related and inter-connected. So organization structure is

a pattern of relationships among various activities and positions.

Because various people hold these positions, the structure defines the

relationships among people in the organization.

Structure of BBM

Mr.S.Madhava and Madhu Babu are the sole authority for the whole

group. Madhu babu (production manager), is the head of the firm, who is

controlling all the departments. He is also head of Marketing Department. And

Sundharanth is head of HR department of BMM.

There are 7 departments they are Sales/Marketing, Main Workshop, Spare

parts, Accessories, Accounts and Finance, HR and Admin, and Body Repairs.

In these Marketing, Main Workshop, Finance departments play a major role.

The structure is widely spread but all the departments are closely inter related

work towards satisfying the customers

Organization structure of the Company

Bapuji Academy Of Management and Research, Davanagere 13CHAIRMAN


VISION,MISSION AND OBJECTIVES


Managing Director

Finance Dept. HR Dept. Marketing Dept.Production Dept.

Finance manager H.R. Officer Mktg.managerProduction Manager

Chief Finance Manager

Asst. Officer Asst. Manager

Account officerWelfare officer

Asst. Marketing manager

Senior Assistant

Weigh bridge department

Assistant

Junior officer

Asst. clerk

Incharge

Supervisor

Workers


VISION OF THE COMPANY

To double the production capacity of the plant production in the

subsequent years.

To provide the steel of the international standards.

To use the latest production technology to produce the iron and

minimize the cost of the production.

To reduce the cost of inventory of raw materials and other production

materials.

To adopt eco-friendly production technology and use the professional

management methods in managing the Organization.

MISSION OF THE COMPANY

To produce quality iron and steel products as per domestic and international

markets and to achieve total customer satisfaction professional systems and practice

in every field, giving due weightage.

To the development of human resource available in the organization and to establish

leadership in the field and contribute to national wealth and ultimately to become one

of the best (in terms to turnover and efficiency) steel plant in India.

OBJECTIVES OF THE FIRM

To construct and commission the “Integrated Steel Plant” at International

levels of efficiency.

To produce quality steel of International standards at International

Competitive prices.

To achieve lowest possible energy consumption rate.

To use professional management methods.

To adopt eco-friendly technologies and maintain environment health.

To establishment of long term relationship with the customers.

To provide employment opportunities.

PART-B

MICHAEL E. PORTERS 5 FORCES ANALYSIS



According to Porter, the five forces model should be used at the industry level;

it is not designed to be used at the industry group or industry sector level. An industry

is defined at a lower, more basic level: a market in which similar or closely related

products and/or services are sold to buyers. Firms that compete in a single industry

should develop, at a minimum, one five forces analysis for its industry.

The five forces

1. The threat of substitute products

2. The threat of new entry of competitors

3. The intensity of competitive rivalry

4. The bargaining power of customers

5. The bargaining power of suppliers

1. The threat of substitute products:

The existence of close substitute products increases the propensity of

customers to switch to alternatives in response to price increases

• Buyer propensity to substitute

• Relative price performance of substitutes

• Buyer switching costs

• Perceived level of product differentiation



As our company is producing steels there is no proper substation

but only they can switch on to other competitors in some Products.

Granite and Tiles are (propensity to substitute, "brand loyalty" aside) cost

varies slightly. In a convenience store, there is no cost to switch from one to the other

and there may be some small differentiation between brands. The threat of

substitution is high.

2. The threat of the entry of new competitors:

Profitable markets that yield high returns will draw firms. This results in many

new entrants, which will effectively decrease profitability. Unless the entry of new

firms can be blocked by incumbents, the profit rate will fall towards a competitive

level

• The existence of barriers to entry (patents, rights, etc.)

• Economies of product differences

• Brand equity

• Switching costs or sunk costs

• Capital requirements

• Access to distribution

• Absolute cost advantages

• Learning curve advantages

• Expected retaliation by incumbents

• Government policies

Although the mass production of Granites might require specialized

equipment for economies of scale, individual producers are not prevented from

entering that market with smaller equipment investments. Threat of new competitors

is high.

Were in the steel industry almost all the competitors are going to fix same price

almost in all steel industry and the prices are going to set according to the competitors

price.

3. The intensity of competitive rivalry:



For most industries, this is the major determinant of the competitiveness of the

industry. Sometimes rivals compete aggressively and sometimes rivals compete in

non-price dimensions such as innovation, marketing, etc.

Number of competitors

Rate of industry growth

Intermittent industry overcapacity

Exit barriers

Diversity of competitors

Informational complexity and asymmetry

Fixed cost allocation per value added

Level of advertising expense

Economies of scale

Sustainable competitive advantage through improvisation

COMPETITORS:

Noble Resources limited

Pioneer metals Co. Ltd.,

Boyoung Engineering and Equipment (H.K) Co. Ltd.,

Cargill international Trading Pvt. Ltd.,

Prosperity Steels (Asia) Company limited.Sudamin Metal and Commodity Limited Jiangsu Provincial Foreign Trade Corporation.

4.The bargaining power of customers:

Also described as the market of outputs. The ability of customers to put the

firm under pressure and it also affects the customer's sensitivity to price changes.

• Buyer concentration to firm concentration ratio

• Degree of dependency upon existing channels of distribution

• Bargaining leverage, particularly in industries with high fixed costs

• Buyer volume

• Buyer switching costs relative to firm switching costs



• Buyer information availability

• Ability to backward integrate

• Availability of existing substitute products

• Buyer price sensitivity

Lakshmi Iron Mart: HOSPET

Lakshmi Steels: BELLARY

Gajendra Enterprises: HOSPET

Shanthi steel suppliers BELLARY

These are the customers of our Bellary steel rolling mills. And we supply according

to orders received by them.

5. The bargaining power of suppliers:

Suppliers of raw materials, components, labor, and services (such as expertise)

to the firm can be a source of power over the firm. Suppliers may refuse to work with

the firm, or e.g. charge excessively high prices for unique resources.

Supplier switching costs relative to firm switching costs

Degree of differentiation of inputs

Presence of substitute inputs

Supplier concentration to firm concentration ratio

Employee solidarity (e.g. labor unions)

Threat of forward integration by suppliers relative to the threat of backward

integration by firms

This are the raw materials:

MS BILLETS

MS INGOT

BLOOMS AND IRON ORE

DEPARTMENTAL AREAS OF



BHARATH MINES AND MINERALS ISPAT LTD

PRODUCTION DEPARTMENT

Production department of BMM department:- cold work process

MANPOWER OF COLD WORK IN BMM INDUSTRY.

EMPLOYEE DESGINATION TOTAL

1) FOREMAN. 02

2) WORK MAN MANAGER. 01

3) SUPERVISIOR. 02

4) CRANE OPERATOR 02

5) SHARING MACHINE OPERATOR. 02

6) TURNERS [LATHE MACHINE OPERATOR] 04

7) STRAILING MACHINE OPERATOR. 12

TOTAL NUMBER OF EMPLOYEES 23

HOT DEPARTMENT OF BMM INDUSTRY.



PRODUCTION DEPARTMENT

BMM PLANTis the leading company in the production of MS Beans, MS

Channels and MS Angels in the south region. BMM production unit has used the

pusher furnace to produce these products from the raw material like iron billets ..

Product Profile of the company:-

The brief description of production of products BMM:-

BMM is a major production of MS Beans, MS Channels and MS Angels and iron

belts and iron sheets. To produce therefore operation procedure the inputs are raw

materials-

Billets.

Coal.

Electricity.

Water.

Furnace.

This type of furnace used by BMM is pusher furnace and it required 500

kgs/per hour of coal and the furnace should be heated up to 1200*c-1600*c. Coal is

an fine coal crashed to get powder and it is brought from KOREA.

While processing the heated Billets there is a requirement of electricity and

water.



Work flow model

Raw Material

Furnace ElectricityCoal

Processing Machinery (re-rolling)

Electricity and water

Out put

The workflow model describes the production process carried in the organisation

for the production of the finished goods like MS Beans, MS Channels and MS Angels

and iron sheets,iron belts.

Raw Material:- Chemical composition of the product raw material.

The input given to the industry like raw materials and other products.

Billets:-

The main raw materials used to produce the final product. The major contents of

the billets are given below.

Carbon- 0.17%.

Manganese- 0.83%.

Phosphorus-0.018%.

Silicon -0.19%.

SV -0.02%.

Mechanical proposals

Yield stress - 395 MPA

Ultimate tenure stress -490 MPA



Elongation(%) -26%

Bend test - ok.

Grade - MSIS 2830

Raw-Materials:

Raw-materials are the most important in each & every organisation. The major raw

materials used to produce MS Beams, MS Channels, MS Angles, MS flats and iron

belts and sheets.

1. MS BILLETS

2. MS INGOTS

3. BLOOMS

4. IRON ORE

MARKETING DEPARTMENT AT BMM.

Organisational chart of the BMM Marketing department

HOW DOES THE MARKETING DEPARTMENT FUNCTIONS IN BMM .

Marketing is indeed an ancient art: it has been practiced in one form or the other since the days of Adam and eve. It emerges as a management discipline, however is of relatively. Shows period has gained so much importance and status that today must



management thinkers and practioner through out the world view it as the must importance of all management function is a business.

Market oriented strategic planning “is the managerial process of developing and maintaining a visible fit between the organization objectives skills, and resources and its changing market opportunities”. The aim of strategic planning it to shape the companies business and products so that they yield target profit and growth.

This plan is formulated by taking into consideration orders received. The orders are received by giving.

PRICING OF BMM

The name “BMM” itself is the mark of quality for the customer. BMM. has

left the opinion of transporting Pig Iron to the Buyers site to the Buyer. So one can

buy the Iron at BMM Site or can order.

The services like transporting are rendered to customers by BMM with very nominal

charges.

In BMM we come across different Prices terminologies.

1) List Price

2) Discount

3) Allowance

4) Payment Periods

5) Credit Terms

List price is nothing but the selling price. It is also called as Basic Price.

Basic Price = Production Cost + Profit.

Production cost includes both variable cost and fixed cost.

If the transport is undertaken by BMM then boarded price is calculated according to

sites mentioned in receipt.

Main Customers:-

Local

Shanthi Steel Supplier BELLARY.

Lakshmi Iron Mart: BELLARY.

Lakshmi Steels: BELLARY.

Gajendra Enterprises: BELLARY.



Karnataka:

Steel Sales suppliers : HOSPET.

Vijay Lakshmi Iron Mart : HUBLI.

Indian Mineral Co : HUBLI.

Ferro Steel : BELGAUM.

Steel Syndicate : MANGALORE.

Steel Centre : MANGALORE.

India:

Jonna Iron Mart: : ANANTAPUR

Vijay Lakshmi Iron Mar: : DHARMAVARAM

Asma Steel: : CALCUTTA.

B.M. Steel: : MADRAS.

Abdullah Steels: : HINDUPUR.

Competitors Information:-

BMM is an almost monopoly in the Karnataka state. This is because other firms

which are small scale industries and even they are not meeting the required demand in

the market.

Leaving Karnataka, BMM major competitors are from.

1] ABHISHEK STEELS: RAIPUR [CHATISGARH].

2] OBERAI ENTERPRISES: KOLHAPUR [MAHARASHTRA].

3]SOFIA STEELS : GUTHI [ANDHRAPRADESH

The standards let for the marketing department is to achieve the sales target of once

the main plan is formulated by top level management it is sent to each of its branch

office for executing and also the head office located at BANGALORE sends new

plans for each month to its branch office to hospet.

According to BMM the benefits of planning etc,



Marketing planning helps to reduce the cost of production.

Marketing planning helps the manager in making decisions.

Effective marketing helps the strength of the company over the competitors.

Marketing helps to meet the demand.

The forecasting of the demand which minimizes the risk and uncertainty.

Marketing planning helps the managers to adopt strategies to according to

changing opportunities.

BMM Customer Relation Management

Create confidence about the organization.

Create long term association with customers.

Give total solution to customers.

Commitment towards quality.

Add value to customer business.

To treat the customer like a king.

CHANNELS OF DISTRIBUTION

Market is a place where a goods and services are exchanged the term market

means to the aggregate of all demands for all products or services. It also refers to the

aggregate of all customers existing and potential for all products.

BMM has a very good market for almost all marketing centers. ]

Sales

Any one company should have correct and clean sales plan and the same plan must

be followed each and every time. Otherwise, the finished output remains blocked and

the working capital cannot be obtained to perform the day to day activities of the firm.

The BMM gets the enquiry from the interested customers the enquires may be in the

form of telephone, fax, e-mail, letter. Regarding the availability of material price, duty

structure sales tax applicable payment terms and etc, of the customer are satisfied with

the terms and conditions of the order will be placed which includes quantity, quality

of products, mode of transport, terms and payments etc., placing of the orders fax



after reaching the purchase order of the corresponding section of the sales department

the purchase order and with same and satisfactory.

BMM sends the sales the sales order according to the purchase order. Sales order is

an arrangement between manufactures and the customers. Which confirm the

purchase order. Two copies of sales order will be sent to the concerned customer.

Between manufacturer and customers, which confirms the purchase order two copies

of sales order will be sent to the concerned customer.

FINANCE DEPARTMENT

Organizational chart of BMM Financial department

FINANCE DEPARTMENT

The finance function deals with the procurement of money at the time when it

is needed and its effective utilization in the enterprise. Money is the lifeblood to

purchase of any enterprise, as it is required to purchase machines and materials to pay

wages and salaries to employee and to allow credit facilities to customers.

The event of capital-intensive techniques has increased the importance of

finance. The ambition plans of an industrial undertaking will remain mere dreams

unless adequate finance is available to convert them into reality. Therefore it has

become an important function of management to provide for adequate finance for the

functioning of the enterprise.



For companies, which carry on production and distribution on a large scale

provision of adequate finance, is a very challenging task. It affects all the business

decisions where money is involved, since the large commercial and industrial

undertakings are set up in the form of companies, the problem of finance for modern

business is for all practical purposes of the problem of corporate finance.

Functions of finance department:

1. Funding activitiy.

Banks provide both long-term & short-term funds.

Long-terms funds like debentures term loans, etc. are used for project

financing.

Short-term ioans are taken to meet the working capital requirement.

Commercial banks help in providing short term funds.

Individual banks will not finance the whole requirement but they will

share with other banks.

The finance department will be having the continuous.

Communication with the head office, so that the corporate office can transfer

the funds to its unit. This operation is called as ‘Fund transfer booking’.

2. Treasury function.

They will maintain cash or bank balance book for any payments. They will

use only cheques for making transactions.

2. Book keeping.

A company should maintain books of accounts. There is an own built computerized

system including the accounts of sale, purchase, cash/bank, stock, tax, fixed assets,

etc.The department has to disclose the information by closing the books monthly.

The books disclose the information to the share holders of the company.

4.Purchase function: Company fixes the target to the producer of Iron and Steel of

how many tones of raw iron to be purchased, based upon that the finance manager

has to plan to buy them.

The payment has to be done before, in order to deliver the raw materials to the

producer of Iron and minerals.



Objectives of financial department:-

Since financing is one of the functional are of any business enterprises, the

objective of financial management must be in tone with the over all objectives of the

enterprise. The objectives of the finance department should be devised they contribute

directly towards the achievement of overall organizational objectives.

Ensuring regular and efficient supply of capital to the business.

Ensuring a fair rate of return on capital to the supplier.

Ensuring better utilization of capital by following the principles of liquidity,

profitability and safety.

Coordinating the activities of the finance department with those of other

department. Of the enterprise.

Manager of account’s and finance:-

Finance and account manager is concerned with measurement of income/expenditure

for specific periods of time such as month and year (income/expenditure statement)

financial reports at the end of the period.

Financial manager is responsible for overall financial planning and for rising capacity

he has following functions major activities are forecasting, fund Management and

auditing capital budgeting.

Accounting officer:-

Accounting officer is concerned to give sufficient position of the business

frequently to finance manager. It is concerned with determining relevant cost and

performing other analysis like preparation of budgets and performance analysis based

on budget.

Policies:-

Valuation of inventories like raw materials stores and spares are valued at

weight age average method. Finished goods including traded goods are stated

at cost/ net realizable value.

Accountants are prepared on historical cost and on going concern basis the

company has adopted accurate concept in preparation of financial statements.



Fixed asses are stated at costless depreciation. Expenditures during

construction period are debited to he capital work in progress and the same

will be allocated.

HUMAN RESOURCES DEPARTMENT

Organizational chart of BMM Human Resources Management

Company Human Resource Department believe that human resources are a

greater asset and that people have the potential to exceed, if the environment

fosters. Openers, Mutual understanding and people are treated with dignity

and respect.

Company shall develop effective human resource policies and system that lead to

healthy interpersonal relation and positive discipline in the organization.

Company shall extend uncompromising quantity service to all the people in the

organization within the framework of the approved policies of the company.

Company approach shall always be proactive company shall aim for win solution

in every major decision making whatever presidential people are involved.

HUMAN RESOURCES PLANNING.

They are not using any forecasting techniques to find the human resource demand,

supply, internal supply, downsizing plans managerial succession planning

In BMM in order to take any HRD decisions they are following simple technique

called “managerial judgment”. In this department head their departmental proposals

submitted to the top management. They will discuss with HR manager and higher

authority. HR manger, departmental heads and MD they will discuss together and

they will plan for

Recruiting

Productivity level.

Manger success planning.

Any transfer, retirement, promotion.

Selection, placement, training and development etc.

Recruitment: -



The firm needs skilled, unskilled, and white-collar workers. Recruitment is

mostly done through the referrals of the present employees and partly through

newspaper ads. It is the duty of the HR manager and concerned departments to select

the right person for the job.

Selection:-

This is the process of picking up individuals (out of the pool of job applicants)

with requisite qualification and completes to fill jobs in the organizations.

Selection is the process by which potentials candidates suitable were offered

from various source are examined and those found suitable were offered for

employment. The managerial problem is that to identifying adequate number of

applicants who can be expected to become satisfaction and successfully employee.

The problem is frequently made more difficult by vagueness in job description and

specification the limited range choice upon to manager’s specification is the lack of

assurance in the process used to identify and measure the required personnel

qualification. The test that evolved with most accurately reveals the personal qualities.

ENVIRONMENT CONTROL DEPARTMENT

“6 ‘C’ + 5 ‘S’ = Goals”

To achieve the predetermined objectives, BMM made an environmental friendly

policy i.e., “6 ‘C’ & 5 ‘S’ model.

Those are as follows

6’C’ Models

1. Cost effective waste management

2. Communication to interested parties

3. Control of pollution within prevailing norms

4. Compliance to legal requirements

5. Conservation of resources

5 ‘S’ Models

1. Seiri – sort (separate unwanted and wante)



2. Seiton –store (a place for every thing and everything in its place)

3. Seiso – Clean (to keep things shining)

4. Seiketser – Maintain (orderliness of things)

5. Shitsuke – Statuesque (training and discipline)

TRAINING AND DEVELOPMENT:-

Definition:- “ it is any attempt to improve current or future employee

performance by increasing an employee’s ability to perform through learning usually

by changing the employees attitude or increasing his or her skill and knowledge.

Training Methods

On the Job Training Off the Job Training

Job Rotation Entrepreneurship Training

Committee Assignments Teaching Machines

Apprenticeship training Role playing

Training by supervisors Program Institution

Job instructions Sensitivity Training

ON THE JOB TRAINING:

This is the oldest and most popular method of training. Under this

method, the new employee is put on the job under the consent, guidance and

supervision of his superior officer. He leans by observation, experience and guidance

from this senior fellow. He gets the necessary instructions and directions under the

guidance of a supervisor or a senior employee.

Job Rotation :Job Rotation is a method under which the employee is transferred from one job to

another so that he may get the knowledge and experience of different types of

job..This rotation improves his ability and capability. This method of training gives

an opportunity to the trainee to understand the problems of employees

PERFORMANCE APPRAISAL:-

The immediate superiors will do the appraisal of the employees based upon

which the HR Manager takes the decision regarding the Extension of Training of the



employee or the Confirmation of the job.

PROMOTIONS:-

Promotions mean an improvement in pay, prestige, and position of employee in the

organization. BSRM management promotions are giving with respect to the

experience not with performance or potential of the employee from this skilled

employee not get promotion. This will e de motivated to the employee.

RETIREMENT:-

As like all companies BSRM also fixed 58 years as the retirement period but if any

employee want to work further they will extent to few years and final day of the

retirement. They conduct exit interview with the employee. In this interview

employee can express his feelings and emotions towards the organization.

SAFETY:-

To all production workers they are supplying pair of safety shoes and safety

helmets. The company conducts classes in order to give safety measures to be taken

while working. In some places they put safety boards.

BMM’s Social Responsibility:

Towards Environment:

BMM is committed towards keeping the surroundings eco-friendly and have

planted more than 0.5 million saplings of different species in and around the mining

areas and is the first and only private company to have a water pipeline project up the

hill to cater to the afforestation and dust suppression in a scientific manner.

Towards Health Care:

BMM has conducted a medical camp at Arogya Kendra a Medical Center in

Sandur from 22nd to 24th of December 2002 for the physically handicapped. Doctors

were brought from Mahavir Jain Hospital Banglore for the same where in around 300

people were covered. 23 were fitted with Artifical Jaipur Legs, 38 people were fitted

with caliper legs, 52 people were provided with tri-cycles.



PART-C

SWOT ANALYSIS

Strengths:-

Market leader in quality

Delivery to the customer as per the schedule

Near to the transportation – railways as well as road transportation

BMM is ideally located near the Iron ore

High technological equipment used for production of channels, Beans, Angels,

Flats and belts ,sheets Etc.

The effective training of internal workers led the company to carry the heavy

work without any disputes between the workers and management.

Expansion of 1600 (kilo watts) to 2500 (kilo watts) for production of heavy

products at lesser time.

Maintenance of close relationship between raw material supplier and the

customers of the company.

The financial support of the company is provided by the State Bank of India

and bank of baroda.

The quality department always concentrates on the production of the quality

products and trying to improve the quality of the produced products.

The well equipped facilities provided from the government for the supply of

the power and water

Weaknesses :-

Increase in cost

High coke consumption due to higher fines and handling work due to multiple handling.

Mainly depends on coke which needs to be imported.

The improper tax procedure followed by the government and imposed on the iron and steel industries in the state.

The tax procedure in other states are liberalized to these cooperative.

There is no adequate financial resources for the industry.



Opportunities:-

Globalization of Indian economy bound to increase demand levels

Major automobiles units have come up in south India like Toyota Volvo etc.

At same time there is a growth in the real estate.

BMM has a good share in the market.

BMM has opportunities to tie up with customers.

Can capitalize an upswing in market demand because of all India presence.

Threats :

New foundry grade production entry Increase price in coke Imposition of sales tax and VAT. Threats of using substitute products like plastic and fiber. Day by day the

employees are hopping their job. Many industries are diversified into the steel producing and existing

companies are expanding their capacities Increasing price of raw materials like coal, iron ore etc.,

There is no mutual co ordination between the government and these iron and steel

industries.



PART -D

PROFIT AND LOSS ACCOUNT OF BMM ISPAT LTD :-

Sales Turnover 1,58,362.11 1,54,461.74 Excise Duty 14,810.99 17,110.27 Net Sales 1,43,551.12 1,37,351.47 Other Income 5,415.76 5,611.56 Stock Adjustments 2,762.22 2,682.86 EXPENDITURE : Raw Materials 70,365.55 63,046.62 Power & Fuel Cost 12,821.90 11,657.72 Employee Cost 13,529.31 12,427.47 Other Manufacturing Expenses 14,909.55 13,685.04

Selling and Administration E 6,228.40 6,117.81 Miscellaneous Expenses 5,940.95 2,429.09 Less: Pre-operative Expenses Capitalised 2,438.14 2,181.30 Total Expenditure 1,21,357.52 1,07,182.45 Operating Profit 30,371.58 38,463.44 Interest 6,294.69 5,162.07 Gross Profit 24,076.89 33,301.37 Depreciation 5,944.59 5,899.10 Profit Before Tax 18,132.30 27,402.27 Tax 6,525.89 7,946.23 Fringe Benefit tax 97.09 82.96 Deferred Tax -778.62 1,180.03 Reported Net Profit 12,287.94 18,193.05 Extraordinary Items -1,613.15 695.92 Adjusted Net Profit 13,901.09 17,497.13 Adjst. below Net Profit -125.75 -9.34 P & L Balance brought forwar 30,284.72 20,523.83 Statutory Appropriations Appropriations 7,443.57 7,632.58 P & L Balance carried down 35,003.34 31,074.96 Dividend 2,669.64 3,099.83 Preference Dividend 140.64 72.99



BALANCE SHEET OF THE BMM ISPAT LTD

SOURCES OF FUNDS : 2009 2008

Share Capital 23,349.02 23,700.92

Reserves Total 70,581.66 65,148.61

Equity Share Warrants 59.7 81.62

Equity Application Money 0.24 189.15

Total Shareholders Funds 93,990.62 89,120.30

Secured Loans 47,544.14 42,881.99

Unsecured Loans 38,295.96 25,961.48

Total Debt 85,840.10 68,843.47

Total Liabilities 179,830.72 157,963.77

APPLICATION OF FUNDS : Gross Block 129,586.91 121,772.85

Less : Accumulated Depreciation 59,555.13 55,014.64

Less:Impairment of Assets 114.55 114.55

Net Block 69,917.23 66,643.66

Lease Adjustment 0 0

Capital Work in Progress 37,679.97 27,217.87

Investments 46,798.21 7,166.57

Current Assets, Loans & Advances Inventories 29,101.26 27,160.93

Sundry Debtors 9,790.48 11,469.98

Cash and Bank 28,850.79 24,244.69

Loans and Advances 18,366.06 45,719.42

Total Current Assets 86,108.59 108,595.02

Less : Current Liabilities and Provisions Current Liabilities 42,308.19 33,321.47

Provisions 15,242.77 14,087.24

Total Current Liabilities 57,550.96 47,408.71

Net Current Assets 28,557.63 61,186.31

Miscellaneous Expenses not written off 142.45 247.28

Deferred Tax Assets 6,709.95 5,441.21

Deferred Tax Liability 9,974.72 9,939.13

Net Deferred Tax -3,264.77 -4,497.92

Total Assets 179,830.72 157,963.77



RATIO ANALYSIS OF THE COMPANY:-

Liquidity Ratio .

1. Current Ratio = Current Asset

Current Liability

For 2009 = 86,108,59

5755096

=1.49:1

For 2008 = 10859502

4740871

= 2.29:1

Interpretation:

It shows the relationship between current assets and current liability.

The ideal ratio is 2:1 according to this for every 1 Re of current liability, 2 Rs of

current assets should be there.

BMM ISPAT Pvt Ltd the company is having Rs 1.49of CA for every 1 Re of CL even

though it has decreased, when it compare to last year. The company has to concentrate

on its liquidity position.

2. Quick Ratio = Quick Assets-Inventory

Current Liability

For 2009 = 8610859-2910126

5755096

= 0.99:1

For 2008 = 10859502-2716093

4740871

= 1.71:1

Interpretation:-

BMM ISPAT Ltd It shows the relationship between quick assets and quick liability.

The ideal ratio is 1:1.That is for every 1 Rs of quick liability, 1 Rs of quick assets



should be there company is having Rs 0.99 of quick assets for every 1 Rs of quick

liability. Compare to last year it’s decreased the company is unable to meet its

liquidity.

Profitability Ratio .

1. Return on Sales = Net Profit after Tax *100

Net Sales

For 2009 = 543969*100

14355112

= 3.78

For 2008 = 82206810*100

1373514

= 5.98

Interpretation:

The return on sales ratio indicates the percentage of return has been decreased from 5.98 to 3.78. 2. Return on Assets = Net Profit after Tax *100

Total Assets

For 2009 = 543969*100

179830

= 3.02

For 2008 = 82206810*100

15796377

= 5.20

Interpretation:

The company generates the liquidity with the assets of the company how much it

paying the returns. But company optimally decreasing from5.20 to 3.02.Main reason

behind this is the net profit is decreased in 2009 .

3. Return on Net Worth Ratio = Net Profit after Tax *100

Net Worth

For 2009 = 543969

2855703

= 3.09

For 2008 = 82206810

6118631



= 1.34

Interpretation:

It measures the ability of a company’s management to realize adequate return

on the capital invested by owner in the company. It decreased from 1.32 to 3.09.

Solvency Ratio = Net Profit after Tax + Depreciation

Long Term Liability + Short Term Liability

For 2009 = 5439690+594459

8584010+4230819

= 0.084

For 2008 = 8220681+5899100

6884347+3332147

= 0.860

Interpretation:

The above Salvage Ratio it is clear that the percentage of profit is optimally decreased from 0.860 to 0.084.

Debt Equity Ratio = External Equity

Share Holders Fund

For 2009 = 8584010

2334902

= 3.67:1

For 2008 = 6884347

2370092

= 2.90:1

Interpretation:

From the above debt equity ratio it is clear that the percentage of debt is come

up in 2009 comparing to 2008.

BMM ISPAT Ltd It shows the relationship between debt and equity. The ideal

ratio is 0.50:1.

That is for every 50 paisa of debt, 1Rs of equity should be there. The

company is having Rs 0.77of debt for every 1 Rs of equity.

Return on Investment = Net Profit before Tax

Share Holders Equity



For 2009 = 1813230

9399062

= 0.194:1

For 2008 = 2740227

8912030

= 0.90:1

Interpretation:The above Return on Investment it is clear that the percentage of

profit is optimally decreased from 0.90 to 0.194.

. Fixed Asset Turn Ratio = Net sales

Fixed Assets

For 2009 = 14355112

3408359

= 4.21:1

For 2008 = 13735147

3385033

= 4.05:1

Interpretation:

It shows the relationship between Net sales and fixed assets. The Ratio also

been decreased from 4.05 to 4.21when compare to last year.

Debtors Turnover Ratio = Sales

Debtors + Bill Receivable

For 2009 = 888777642

62732731

= 14.61:1

For 2008 = 962955113

101178921



= 9.51:1

Interpretation:

From the above Debt turnover ratio it is clear that the percentage of Debtor is come up

from 9.51 to 14.61.

BMM ISPAT Ltd The liquidity position of the firm depends upon the speed with

which debtors are realized. This ratio indicates the number of times the receivables

are turned over and converted into cash in an accounting period.

. Return on proprietary funds = Net profit after tax*100

Share Holder Fund

For 2009 = 7988041*100

257301511

= 3.10%

For 2008 = 85316481*100

154915000

= 55.07%

Interpetation

The Return Proprietary Fund it is clear that the percentage of profit is strongly

decreasing from 55.07 to 3.10.

BMM ISPAT Ltd Return on proprietary fund ratio shows that the percentage of return

to their investment in the total net profits.



FINDINGS,SUGGESTIONS AND CONCLUSION

FINDINGS:-

Capture of market shares is limited

Appointment of un skilled labour

Ineffective training is given to workers of organization.

Use of obselence technology in manufacturing which leads to high cost of production.

No adequate safety to workers.

The company has a traditional infastructure. They are using manual system of moving raw materials from drying yard to production unit.

SUGGESTION AND RECOMMENDATION:-

BMM ISPAT LTD should try to enter to cater all the regions of india as its market place.

Diversification is necessary in all other business of the iron and steel production.

Person who is experienced in the purchases department should be appointed.

Traning program is necessary for all the employees to improve the quality of the production .

Company should focus on implemention of new technology in the production process ,so the cost of production will be reduced.

The company has to be more open and flexible with distribution production network.



CONCLUSION

The project study was successful in identifying the process and sub process

existing in the organization under study with reference to their inter functional

implication and dependencies.

The project study has also brought into light the working methodology of

some key functions of finance, marketing, HRM. The organizational

completeness is visible through the study.

This study as ascertained that the organization is functioning successfully

because of micro and macro level of management principles in practice.

This study is also successful growing at with various management techniques

that are visible in the organization under study by which new principles can be

derived for continuous improvements.

survival and growth to achieve the desired level of excellence in the

competitive scenario of industrial management.



PART-E

LEARNING EXPERIENCE

Firstly I would like to place on record my sincere thanks to the management of

BMM ISPAT LTD HOSPET for their kind permission to undertake 30 days in plant

training in their organization. It’s a fabulous experience what I studied in

organizational study.

I studied many practical aspect as compared to theoretical aspects and it is also

exposed me about working of an organization, to relate the theoretical concepts learnt

in the classroom to organizational functioning, decision making and real life

application of management.

Experience:

I have got the practical orientation of the functions of the various departments of

the company.

I was able to analyze the performance of the company.

I understood the application of theoretical concepts into business decisions in the

organization.

I understood the aspects of delegation of authority, responsibility, co-ordination, and

team work etc.

I have gained knowledge about all round view of the management operation.

I got the knowledge about the Analyzation of the present status & future strategies of

the company.



BIBILIOGRAPHY

Introduction : www.BMM.com

: www.steeldynamics.com

: www.capitalline.com

: www.google.com

Company Profile : Records & Reports ofcompany

: Employee Handouts

: Annual Reports

Human Resource

Management : K.Ashwatappa, 3rd edition,

Marketing management : Philips Kotler Millennium edition


http://www.capital/

organization study

Documents

production of minerals

tonnes of minerals

consumption of minerals

world minerals production

export of minerals

minerals ispat industry

abhishek minerals

world minerals output