Jindal Steel boosts auctioning with digitization

Jindal Steel had to revise and streamline its auctioning processes. Here is how digitization helped increase efficiency.  

Priyanka Ganwani Dec 20th 2016 A-A+

A part of O.P Jindal Group, headed by Naveen Jindal, Jindal Steel and Power is into the steel and mining sector with its manufacturing, sales and distribution facilities spread across multiple locations. JSPL carries a product portfolio that caters to the steel value chain in a competitive market. The company boasts of producing the world's longest (121-meter) rails and is the first in the country to manufacture large-size parallel flange beams.

The challenge

One of the biggest challenges in smooth warehousing operations entails stock management across locations. This means all the auction processes from each location demand an aligned, and accountable system for stocks and purchases. “The situation before was not a desired one. Each of our locations was using a mixed and matched mode of applications and facilities of auctions available in their vicinity. Most of them were proprietary in nature and had limited business features which created a huge discomfort for our business compute,” says Vipul Anand, group CIO, JSPL.

According to Anand these applications were also not justifying their costs “The costs of subscribing to these systems were high and there was no uniformity or integration with our back-end system,” he says. 

The solution

To streamline an auctioning system for the sale and purchase of a list of warehousing and steel manufacturing items, a digital or electrical auction system was launched in May 2016.

“Our IT teams worked along with the business teams to build a strong platform, which is now effectively used across our business locations,” says Anand. 

The Forward Auction and Reverse Auction Engines were then designed and developed by the company’s in-house IT team with high level of security, access controls and integration with the back-end systems. “Each transaction was audited automatically through high level of built in algorithms and are posted onto the SAP backend,” says Anand. The emailing and following up over phone calls system was replaced with an online portal integrated with the application.

 A reverse auction is where the roles of the buyer and seller are switched. In an ordinary auction, which is the forward auction, buyers compete to obtain goods or services by offering higher prices. In the reverse system, the sellers compete to obtain business from the buyer and the prices subsequently drop down.

Forward auctions are electronic auctions, which are used by sellers to put their items out there for as many potential buyers. These sellers and buyers can be individuals or organizations who transact on the site. The buyers bid for the items they are interested in, eventually the highest bidder wins the item.

The benefits

This integrated system comes with advanced features like keeping a track of the past transactions which further help in taking better business decisions. “This has improved our execution efficiencies and instilled uniformity across locations,” says Anand. The interactions with the various stakeholders involved now carry great transparency and there is a process of timely response in place.  “On an average, in a month we have 500 auctions taking place,” he says.