SUMMER INTERNSHIP PROJECT REPORT

ON

Evaluation Of The e-Auction System Of

Coal India Limited

Submitted to

FOR THE PARTIAL FULLFILMENT OF THE REQUIREMENT FOR THE AWARD OF PGDM-RMM

UNDER THE GUIDANCE OF:

FACULTY GUIDE: Ms Sakina P.

COMPANY GUIDE: Mr. Vineet Singh

Submitted By:

SUMEET KR DASPGDM RMM (2009-2011)

ROLL NO - 04

INSTITUTE FOR TECHNOLOGY AND MANAGEMENT, NAVI MUMBAI

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ACKNOWLEDGEMENT

I would like to take this opportunity to express my sincere gratitude to COAL INDIA LTD for providing me with an invaluable opportunity to work with them. I express my heartfelt thanks to my project guide Mr. Vineet Singh, (Assisstant Manager, Sales & Marketing).

I would also like to thank Mr. A.C.Verma (General Manager, Commercial) and to Mr. R.D.Roy ( Chief Sales Manager ) for providing me with required information needed for this project.

I am also grateful to my faculty guide, Ms. Sakina P. of ITM Business School, Navi Mumbai.

I would also like to thank the customers and the service providers of e-auction who spared their valuable time and gave me interview and responded to my questionnaire for the project.

Thanks and Regards

Sumeet Kr Das

PGDM-(Retail & Marketing)-(2009-2011)

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DECLARATION

I hereby declare that the Summer Internship Project titled ‘Evaluation Of The e-Auction System

Of Coal India Limited’ being submitted for the partial fulfillment of the requirement of the

PGDM-RMM program of ITM Business School , Navi Mumbai has no resemblance with any other

person’s work. I have presented this report to the best of my knowledge and information I got

access from Coal India Ltd, its customers and the service providers.

This project is an outcome of an exhaustive work of duration of four weeks in Coal India Ltd ,

Marketing Division , Kolkata.

Thanks and Regards

Sumeet Kr Das

PGDM-(Retail & Marketing)-(2009-2011)

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CONTENTS

I. Executive Summary……………………………………………………………...05

II. Introduction………………………………………………………………………06

III. History Of Coal India Limited…………………………………………………...13

IV. Indian Coal Industry……………………………………………………………..14

V. Company Profile…………………………………………………………………16

VI. Benefits, limitations &strategic uses of e-auction………………………………22

VII. E-Auction Methodology of Coal India Ltd………………………………………24

VIII. Service Provider-MSTC India Profile……………………………………………26

IX. Service Provider- Metal Junction Profile………………………………………...27

X. Research Objective……………………………………………………………….28

XI. Research Methodology & Design Of The Study…………………………………29

XII. Analysis of the Service Providers’ Response……………………….....................32

XIII. Analysis of the Customers’ Response……………………………………………37

XIV. Main Findings……………………………………………………………………45

XV. Recommendations………………………………………………………………..46

XVI. Limitations of the Study…………………………………………………………48

XVII. Annexure 1………………………………………………………………………49

XVIII. Annexure 2………………………………………………………………………52

XIX. References……………………………………………………………………….54

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EXECUTIVE SUMMARY

This project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. Prior to nationalization entire amount of coal was sold through middle- men or agents on behalf of producers and consumers and their commission was fixed under the colliery control order. After nationalization of coal sector, demand from non-core consumers slowly built up to unrealistic level leading to rationalization of coal demand versus availability. It necessitate introduction of the system of linkage for non-core sector consumers like core sector. But this system for supply of coal to consumers of non- core sector suffered from disadvantages like because of inadequacy in availability of coal new linkage could not be granted after 2001, consumers purchasing from black market etc.

After complete decontrol of coal distribution from 1.1.2004 many traders/consumers challenged the system of linkage/sponsorship in non-core sector in Courts. CIL submitted a special leave petition to evolve a new system based on modern technology. CIL wanted to evolve a transparent and equitable policy of coal marketing to all non-core sector consumers making use of modern technology through electronic auction route. During the year 2005-06, E-marketing was conducted in all the coal producing subsidiaries of CIL. The government in 2007 announced its new policy for distribution of coal (NCDP), which re-introduced e-auction and for the first time made it binding on the producers to deliver assured supplies of coal at the pre-determined price. In 2008 Coal India Ltd introduced forward e-auction of coal. The new instrument was launched on the existing spot e-auction platform to help the users especially the small and medium enterprises (SME) plan their procurement on a long-term basis. Presently CIL is conducting e-Auction through the following service providers MSTC India and Metal Junction.All the topics have been covered in a very systematic way. The language has been kept simple so that even a layman could understand. Through this project I have tried to put forward how Coal India Limited can excel in the field of E-Auctioning by opening their own E-marketing site. I have used both primary and secondary data for my project. From the study it has been concluded that CIL should first build their infrastructure properly to open their own E-Auctioning site by training their employees and educating their clients about it.

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INTRODUCTION

E-marketing or electronic marketing refers to the application of marketing principles and techniques via electronic media specifically the internet. The terms e-marketing, internet marketing and online marketing, are frequently interchanged and can often be considered synonymous. E-marketing is the process of marketing a brand using the internet. It includes both direct response marketing and indirect marketing elements and uses a range of technologies to help connect business to their customers.By such definition, e-marketing encompasses all the activities a business conducts via the worldwide web with the aim of attracting new business, retaining current business and developing its brand identity.

When implemented correctly, the return on investment (ROI) from e-marketing can far exceed that of traditional marketing strategies. Whether you are “bricks and mortar” business or a concern operating purely online, the internet is a force that cannot be ignored. It can be a means to reach literally millions of people every year. It’s at the forefront of a redefinition of way business interact with their customers.

The benefits e-marketing over traditional marketing-

Reach- The nature of the internet means businesses now have a truly global reach. While traditional media costs limit this kind of reach to huge multinationals, e-marketing opens up new for smaller businesses, on a much smaller budget, to access potential consumers from all over the world.

Scope- Internet marketing allows the marketer to reach consumers in a wide range of ways and enables them to offer a wide range of products and services. E-marketing includes, among other things, information management, public relations, customer service and sales. With the range of new technologies becoming available all the time, this scope can only grow.

Interactivity- Whereas traditional marketing is largely about getting a brand’s message out there, e-marketing facilitates conversations between companies and consumers. With a two way communication channel, companies can feed off of the responses of their consumers, making them more dynamic and adaptive.

Immediacy- Internet marketing is able to, in ways never before imagined, provide an immediate impact. Imagine you’re reading your favourite magazine. You see a double-page advertisement for some new product or service, maybe BMW’s latest luxury sedan or Apple’s latest iPod offering. With this kind of traditional media, it’s not that easy for you, the consumer, to take the step from hearing about a product to actual acquisition. With e-marketing, it’s easy to make that step as simple as possible, meaning that within a few short clicks you could have booked a test drive or ordered the iPod. And all of this can happen regardless of normal office hours. Effectively, Internet marketing makes business hours 24 hours per day, 7 days per week for every week of the year. By closing the gap between

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providing information and eliciting a consumer reaction, the consumer’s buying cycle is speeded up and advertising spend can go much further in creating immediate leads.

Chapter 01 - Page 03 - Nov 2006

E-marketing: The Strategic Planning-

Strategic planning is the “managerial process developing and maintaining a viable fit between the organizations objectives, skills, and resources and its changing market opportunities”Strategic planning are long-term plans based on the organizations overall business objectives. Strategic plans are typically multiple years and reach out 5 or 10 years (or more) using Scenarios or other planning methods that identifies assumptions, risks, and environmental factors.

Online firms follow an e-business model and analysis of external factors like legal and technological issues can really help to drive a successful e-business plan.

Dave Chaffey (2006) presents a model of strategic e-marketing on his website davechaffey.com (figure 2.4). He divides the whole e-marketing process into three activities: ‘Defining the online opportunity’, ‘Selecting the strategic approach’ and ‘Delivering results online’.

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(Chaffey)

E-auction

Electronic auctions are on-line auctions where selected bidders submit offers electronically against the purchaser’s specification. All communication following and including the invitation to pre-qualified bidders to submit new prices and/or values must be instantaneous (electronic). Electronic auctions can be used for goods, services and works. Electronic auctions refer to those auctions conducted through the Internet withthe bidders (from one or more locations) simultaneously bidding to be selected forsupplying the item/s on auction. In other words, the venue for the auction is on anInternet website/ platform. The "Service Provider's" website assigned by "ServiceProvider" would constitute venue for the purpose of the online auction.

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Bidding

Bidding is an offer (often competitive) of setting a price one is willing to pay for something. A price offer is called a bid. The term may be used in context of auctions, stock exchange, card games, or real estate transactions. Bidding up means raising a price for an item by a series of rising bids.

Bidder

Contractor, supplier, or a vendor who responds to an invitation to bid (ITB), is also called as offerer or quoter.

Coal India initially introduced this new system of e-auction in Bharat coking coal limited in 2004 and to expand the scope of e-marketing sale of coal, based on the experience gained from the initial e-marketing conducted in BCCL, the Govt. decided to sell 10 million tonnes of coal initially by CIL subsidiaries through e-marketing for the year 2005-06 on trial basis. After watching the performance of sale through e-marketing, another 10 million tonnes has been allocated under this for the remaining period of the current financial year. A total number of 17403 bidders participated in the e-auction and 10526 were successful. The total gain to CIL has been Rs. 565.36crores.The scheme is open to consumers of core and non-core sector as well as traders who can participate and bid for the quantity as per their requirement from their preferred sources. The system would further eliminate the unscrupulous traders and black marketers. Coal Junction and MSTC Limited are the two service providers of Coal India and it follows the two types of e-auctions-

Forward e-auction Spot e-auction

Forward e-auctionForward auction are electronic auctions, which can be used by sellers to sell their items to many potential buyers. Sellers and buyers can be individuals, organizations etc. Items are commonly placed at a special site for auction (e.g. eBay.com). Buyers can continuously bid for the items they are interested in. Eventually the highest bidder wins the item. In this type of auction there is one buyer and a single seller.

In terms new coal sales policy of Ministry Of Coal, a new scheme called “E-AUCTION SCHEME 2007” for forward e-auction has been formulated and circulated for implementation with due approval of COAL INDIA LIMITED BOARD in October 2007.Under this system, all consumers of coal located in India, such as proprietorship/partnership firms registered in India, companies incorporated in India and aiming for supply over a long period can participate for procurement of coal for their own consumption, but not for transfer, resale or export.CIL, on its part, has imposed certain conditions for participation in this type of auction. The conditions have been imposed keeping in mind the fact that coal is a scarce

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commodity, to put a check on any possible blackmarketing and also to ensure that only genuine consumers participated in the auctions.

Objective Coal distribution through forward e-auction is aimed to provide access to coal for such coal consumers who wish to have an assured supply over a long period, say one year, through e-auction mode so as to plan their operation etc.The purpose of forward e-auction is to provide equal opportunities to all intending coal consumers to purchase coal for own consumption through single window services as per requirement and at a price determined by themselves through the process of online bidding.Forward e-auction will facilitate all the consumers of coal across the country with wide ranging choice for booking coal online, enabling them to buy coal through a simple, transparent and customer-friendly system of marketing of coal.

Spot e-auction

In order to provide coal to small companies and those without linkages, the government in 2007 introduced a system called spot e-auction of coal in which coal was offered for sale through the process of online bidding. In this system, any registered entity, including traders, could purchase coal either for its own consumption or for sale to actual consumers.CIL, on its part, has imposed certain conditions for participation in this type of auction. The conditions have been imposed keeping in mind the fact that coal is a scarce commodity, to put a check on any possible blackmarketing and also to ensure that only genuine consumers participated in the auctions.

ObjectiveCoal distribution through e-Auction has been introduced with a view toprovide access to coal for such buyers who are not able to source coal through theavailable institutional mechanism. In the long run it is expected that e-Auction mayhelp in creating spot as well as future market of coal in the country.The purpose of e-Auction is to provide equal opportunity to purchasecoal through single window service to all intending Buyers.E - Auction has been introduced to facilitate across the country wideranging access to book coal on-line for all sections of coal Buyers enabling them tobuy coal through a simple, transparent and consumer friendly system of marketingand distribution of coal.

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Features of normal bidding process

Goods kept on auction floor.

Auction event on fixed date and time and place

Earnest money taken.

Physical presence of bidder and oral bids needed.

Any numbers of bid are allowed but within fixed time. Bidding stops if no bid is

received before three hammer warning.

Bidders remain identified in a physical gathering.

Features of electronic bidding process

Coal is made available at rail heads or pit heads or satellite delivery points.

Auction event on same principle but converted to information technology

platform.

Earnest money is taken.

Anybody can bid from any place.

Bidding continues throughout the whole bidding session. Beyond the fixed time,

the last bid will stop if time elapse is more than 3 minutes of the latest bid

(Provision of auto extension).

Fellow bidders remain unnoticed from each other.

Online Auction Technical RequirementsThere is a great deal of functionality available in today’s online auction tools, so much that it can be overwhelming for the Sourcing Professional. The Sourcing Team should make sure that its e-Sourcing tool has some core, basic functionality. This core functionality helps improve sourcing efficiency through increased speed, improved accuracy and consistency, greater collaboration with stakeholders and suppliers, broader knowledge transfer and security.

Bid management controlsSourcing Professionals need to have control during a live auction. Control helps them manage supplier and system problems that may arise. Important bid management controls include:

pausing auctions resuming auctions canceling auctions erroneous bid removal

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proxy bidding The presence of bid management controls affects speed, accuracy, consistency and security. Configurable lot cascading and overtimeThis functionality allows the Sourcing Team to structure the auction so that all interested suppliers can participate. Suppliers can focus on one or more lots since the ending times are different and dependent on the conclusion of earlier lots. Overtime allows bidding to continue beyond the scheduled lot closing time. Overtime enables all suppliers the opportunity to respond to the most recent bid. With overtime, suppliers do not need to time their best bids to beat the market. Sourcing Teams are secure knowing that they received the best bids. The presence of configurable lot cascading and overtime affects speed, accuracy and consistency.Configurable bid views and reportsTo improve ease of use and access to information for the Sourcing Team, it is important that the user can see the bids as they come in and make adjustments to the graphical display when necessary. The ability to flexibly rank suppliers by lots or bundles of lots helps the Sourcing Team anticipate award scenarios. After an auction, it is important to be able to access bid results for analysis and documentation either via integrated reports or spreadsheets. The presence of configurable bid views and reports affects speed, accuracy, consistency, collaboration and knowledge transfer.

Data import/export capabilityTo improve ease of use and access to information for the Sourcing Team, it is important that information can be easily imported into or exported from the auction tool. The presence of data import/export capabilities affects speed, accuracy, consistency and security.

Integration pointsIntegration helps streamline the entire sourcing process. A user should be able to effortlessly, with few key strokes, move between different sourcing tasks. Some key integration points include:

communication tools – such as an online communication forum for asking and answering questions, email

spreadsheets e-RFx – so a buyer does not need to create a separate, distinct project for an

auction Optimization – so a buyer does not need to export auction data then import it into

an optimization engine for data analysis and scenario building The presence of integration point affects speed, accuracy, consistency, knowledge transfer and security.

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Security and access controlsSecurity and access controls allow companies the ability to limit users to what they can see or do within an e-Sourcing tool. The controls reinforce operational procedures depending on security levels, organizational level or role level. The presence of security and access controls affects speed, consistency and security.

HISTORY OF COAL INDIA LIMITED

YEAR EVENT1774 Warren Hastings initiates commercial coal mining at Raniganj (West Bengal).1815-1820 First Shaft Mine opened at Raniganj.1835 Carr, Tagore & Company takes over the Raniganj Coal mines.1843 Bengal Coal Company.Up to 1900 Minimal development; River transportation used to transport coal to Calcutta, railway

lines at Calcutta leads to expansion of Coal Production.Early 1900s Capacity at 6 million tones per annum.1955-56 Focus on Coal Industry, capacity up to 38.4 Million tones1956 National Coal Development Corporation (NCDC) formed to explore and expand coal

mining in Public Sector.1972 Coking Coal Industry Nationalized, Bharat Coking Coal mines in Jharia Coalfield.1973 Non-coking coal nationalized, Coal Mine Authority Limited set up to manage these

mines, NCDC operations bought under the ambit of CMAL.1975 Coal India Limited formed as holding Company with 5 subsidiaries viz. Bharat Coking

Coal Limited (BCCL), Central Coalfields Limited (CCL), Western Coalfields Limited (WCL), Eastern Coalfields Limited (ECL) and Central Mine Planning and Design Institute Limited(CMPDIL).

1985 Northern Coalfields Limited (NCL) and South Eastern Coalfields Limited (SECL) carved out of CCL and WCL.

1992 Mahanadi Coalfields Limited (MCL) formed out of SECL to manage the Talcher and IB Valley Coalfields in Orissa.

2000 De-regulation of Coal pricing and distribution of coal.

2008 Coal India Ltd has been conferred the Navratna status.

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INDIAN COAL INDUSTRY

India is presently among top three fastest growing economies of the world. As a natural corollary the demand on vital inputs necessary to sustain this growth momentum are also on increase. India’s energy needs too are fast expanding with its increased industrialization. India is both a major energy producer and consumer. India currently as the world’s 11th largest energy producer accounting for 2.4% of the world’s total annual energy production, and sixth largest energy consumer accounting for about 3.3% of the world’s total annual energy consumption.

India has a long history of commercial coal mining covering nearly 230 years starting from 1774 by M/s Sumner and Healthy of East India Company in the Raniganj Coal field along the western bank of river Damodar. However, the growths of Indian coal mining remain sluggish for want of demand, but the introduction of steam locomotives in 1853 gave a flip to it. Within a short span, production rose to an annual average of 1 million tone (mt) and production rose to 6.1 mt in1890. Coal production got a sudden boost from world war 1 (1914-19) with output increasing to 22.4 mt in 1919, but went through a slump in the early 1930s. India’s coal production reached a level of 30 mt by 1946.

Prior to 1956 coal production in India was entirely in the hands of Private enterprises. National Coal Development Corporation (NCDC) was established by Govt. of India in1956 by taking over the collieries owned by Railways. In the same year Singareni Collieries Ltd. (SCCL) transformed into a State Govt. Enterprises. During early 1970s the necessity of nationalization of coal sector was felt because of unscientific mining practices adopted by some of them and poor working conditions of labour in some of the private coal mines. Private Coking Coal companies nationalized in 1971 and placed under Ministry of Steel as Bharat Coking Coal Ltd.(BCCL). Non-coking Coal Mines nationalized in 1973. Both Coking Coal Mines and Non-coking Coal Mines thus nationalized were brought under Ministry of mines.At present, the total coal industry is under Ministry of Coal, Govt. of India.

Essentials of Coal mines (Nationalization) Act, 1973 and subsequent amendments

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Only public sector units allowed to mine coal for non-captive purposes.

Private sector allowed coal mining for their captive consumption for : Power generation Iron & steel production Cement production Coal washing

Private sector allowed only in small & isolated pockets of coal deposits subject to certain conditions.

Coal India currently produces 404 MTPA, 75% of which cater to the power

sector’s demand in the country. About 13% of production satisfies demands from priority

sectors, viz. Cement, Fertilizers, Steel and Captive Power. A miniscule 12% of all that is

required for the Non-core sector which is only 48 MTPA at current of consumption.

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COMPANY PROFILE

MISSION OF COAL INDIA LTD.

The mission of Coal India Limited is to produce the planned quantity of coal efficiently and economically with due regard to safety, conservation and quality.

VISIO N

"To emerge from the position of domestic leader to leading global player in the energy sector by adopting best practices from mine to market with due care to environmental and societal sustenance".

Coal India Ltd. a Schedule - A, Navaratna Company is the single largest coal producing company in the world. During financial year 2008-09, Coal India produced 403.73 million tonnes of coal and has plan to increase it’s production up to 520 million tones by the end of 2011-12.

INDIA is the 3rd largest coal producing country in the world. In terms of hard coal production COAL INDIA LIMITED, is the single largest producing company in the world, employing 4.36lakhs manpower with its headquarter in KOLKATA is a holding company under ministry of coal, GOVT OF INDIA. It was formed as public sector undertaking in 1975 pursuant to nationalization of the coking coal mines in 1971 and non-coking coalmines in for 1973 for recognizing the nationalized coalmines and ensuring integrated development of coal the prime source of energy. Coal India presently contributes 85% of the total coal production in India. It operates through eight subsidiaries. Seven producing companies and one Planning and Design institute. Subsidiaries are as under-

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COAL INDIA LTD. 467 MINES (403.73 MT)

COAL INDIA LTD. 467 MINES (403.73 MT)

ECL 1975 #113 MINES 28.13 MT

ECL 1975 #113 MINES 28.13 MT

BCCL 1973#84 MINES 25.51 MT

BCCL 1973#84 MINES 25.51 MT

WCL 1975 #84 MINES44.70 MT

WCL 1975 #84 MINES44.70 MT

CCL 1975#62 MINES 43.23 MT

CCL 1975#62 MINES 43.23 MT

NNNNCL 1986 #10 MINES63.65 MT

NCL 1986 #10 MINES63.65 MT

SECL 1986#88 MINES102.15 MT

SECL 1986#88 MINES102.15 MT

CMPDIL 1975#CMPDIL 1975#

MCL 1986#26 MINES96.33 MT

MCL 1986#26 MINES96.33 MT

CIL and its subsidiaries

Note - # Year of establishment*Information within brackets represents coal production of respective companies / units during 2008-2009.

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Eastern coalfields limited. (ECL) Asansol, W.B.

Bharat coking coal limited. (BCCL) Dhanbad, Jharkhand

Central coalfields limited. (CCL) Ranchi, Jharkhand

Northern coalfields limited. (NCL) Singruali,M.P.

Western coalfields limited. (Nagpur,Maharashtra)

Southeastern coalfields limited (SECL) Bilaspur,Chattisgarh

Mahanadi coalfields limited. (MCL) Sambalpur, Orissa

Central mine planning & design institute limited (CMPDIL) Ranchi,Jharkhand. (For mine planning, design & engineering consultancy services and exploration activity).

The mines of North Eastern coalfields (Assam & Meghalaya) operate directly under COAL INDIA. Registered office of the Company is Coal Bhawan, 10 Netaji Subhas Road , Kolkata-700 0011, West Bengal, India.

COAL INDIA currently operates 467 mines and 17 washeries (11 coking and 6 non-coking) spread over eight states to produce and beneficiate coal for meeting the demand of the consumers all over the country. 75 % of CIL total production contributes towards electricity generation. COAL INDIA, for over three decades, has been fuelling economic growth of INDIA keeping its wide array of consumers like Thermal power plants, steel plants , cement plants, fertilizer units and innumerable industrial units satisfied with supply of coal.COAL INDIA has played a significant role in securing India’s energy future. The integrated energy policy of the country clearly indicates that coal is the main and cheapest source for Indian

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energy sector. CIL currently accounts for 85% of the total coal produced in the country and Power sector is the largest consumer utilizing 75% of CIL production.Coal based power generation constitutes 75% of power generation in the country and CIL supplies coal to as many as71 power station.

The objectives of the company are as follows –

1. To promote the development and utilization of the coal reserves in the country for meeting the present and likely future requirement of the nation with due regard to need for conservation of non-renewable resources and safety of mine workers.

2. . To raise the productivity of coal mining and related activities through introduction of improved technology, streamlining of organization, management and improving the skills, motivation of the work –forces.

3. Efficiency of operations and adopting appropriate cost reduction and cost control methods.

4. To make efficient arrangements for marketing and supply of coal so that coal, coke and other similar derivatives are available to consumers throughout the country conveniently and at reasonable prices.

5. To promote research and development activities on an continuing basis in the areas of coal mining, beneficiation development of new coal based products or by- products, fuel technology or any other area having a bearing on conservation, development for utilization of the coal reserves of the country.

The ranges of products are as follows-

I. Raw coal

II. Coking & non-coking coal

III. Middling

IV. Soft coke

V. Hard coke

VI. Coal tar

VII. Coal fines

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VIII. Coal chemicals and

IX. Washed & Beneficiated coal

CURRENT PICTURE OF THE COMPANY

Production-

Coal India Limited has been able to maintain its record of growth and excellence in performance in another fiscal 2008-09. Coal India Limited as a whole achieved raw coal production of 402.73 million tones which is 24.27 million tones more than the production achieved previous year, registering a growth of 6.4%.

SalesGross sales of Coal India Limited during the fiscal Rs 45,682Crores registering a growth of 17.54% compared to last fiscal.

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E-auction of coal- The e-auction sale of coal increased sharply during 2008-09. The total quantity allocated during 2008-09 through online bidding by 69.7% to a level of 48.8 million tones from the previous fiscal’s 28.79 million tones.

Profit- Coal India Limited as a whole, on alike to like basis, made a profit (before tax and dividend) of Rs12,103.311Crores provisional during the year 2008-09 as against 8,738.46Crores in 2007-08. However , after taking into account the impact of upward of upward revision of wage for wage board employees with effect from 01.07.2006 and that of executives in 01.07.2007 the PBT is Rs 4,238.58Crores (provisional) for 2008-09. The impact on account of pay revision is estimated at Rs5,410.48crores plus incremental actuarial liability of Rs2,454.25crores.

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BENEFITS, LIMITATIONS & PROCESS OF E-AUCTION

• Benefits of E-Auctions– Benefits to Sellers

• Increased revenues• Optimal price setting• Removal of expensive intermediaries• Better customer relationships• Liquidation• Lower transaction costs• Lower administrative costs

– Benefits of E-Auctions to Buyers• Opportunities to find unique items and collectibles• Lower prices• Entertainment• Anonymity• Convenience

– Benefits to E-Auctioneers• Higher repeat purchases• A stickier Web site• Expansion of the auction business

• Limitations of E-Auctions– Possibility of fraud– Limited participation– Security– Auction software– Long cycle time– Monitoring time– Equipment for buyers– Order fulfillment costs

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The E-Auction Process

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E-Auction Methodology of CIL

1) Coal companies would draw program for at least two e-auctions per month and notify the same minimum seven days in advance for hoisting in Coal Company’s website for wide publicity. The program will be intimated to the service providers accordingly for hoisting the same at their websites also.

2) The service providers would conduct the e-auctions as per the said program on the scheduled date and time.

3) The bidder has to bid for a price equal to or above disclosed reserve price so as to secure consideration in the concerned e-auction.

4) The buyers would bid for basic price and intended quantity only from the desired sources of their choice during such e-auctions. Other charges, taxes & duties will be extra as prevailing from time to time.

5) Following criteria would be adopted in deciding the successful bidders:

i) Preference will be given to the highest bid price in the descending order as long as the offered quantity is available for allocation.ii) If two or more parties bid the same highest price, preference for allotment will be given to the party who has placed the bid for highest quantity.iii) In case two or more parties bid the same price and the same quantity , preference will be given to the party who has placed the bid first with reference to time.

6) There will be a separate auction for dispatch by rail and road. In case of road , the minimum quantity for bidding would be 50 tom whereas in case of rail , the minimum quantity for bidding would be one full rake.

7) After the auction is completed, the successful bidders would be intimated through e-mail/SMS by the service providers.

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8) The successful bidders after having received such intimations will be required to submit coal value with the concerned coal company within a period of 7 working days from the date of intimation. Seven working days would be reckoned as applicable to the respective coal company’s office.

9) EMD of such bidders would be adjusted at the time of depositing coal value if the bidders so desire.

10) In case of road supplies, once the coal value is deposited, delivery orders will be issued by the coal companies after encashment of their financial instruments whereas in case of rail supplies, there shall be two options available. While submitting program, the bidder at his option can deposit 100% BG on the prescribed format or else 100% amount through Demand Draft. In case of BG, however, the 100% coal value will have to be deposited before allotment of rakes.

11) The validity period to complete the lifting of coal by road shall be 45 days from the date of issue of sale/delivery order. No extension of time shall be allowed. The validity period in case of rail, however, shall be guided by the prevailing railway rules.

12) In case the coal could not be made available to the successful bidder from the specific source where he became successful, there will be an option to supply the same grade/size of coal from the neighboring collieries, if available, at that highest bided price of the concerned neighboring colliery. This is to be applicable only if the customer had agreed for the same before participating in the bid.

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SERVICE PROVIDER-MSTC INDIA PROFILE

MSTC India is a customer friendly Government of India Enterprise and is engaged in domestic and international trading activity for over 30 years. Its marketing division largely undertook import and export of Carbon Steel Melting Scrap and now enlarging its import activity in Steel/Coal/Coke as also other nontraditional items like SKO, non ferrous and ferro alloy items. It provides path breaking ecommerce services. The first of its kind in India , MSTC has been credited with creating a web based market across the country through its sales program , procurement transactions , bulk import and supply of a wide range of industrial raw material for Indian industry. MSTC earned the status of a Mini Ratna Grade II in 2002, which was enhanced to Grade I in 2005. Recognizing its capabilities and performance, it was upgraded to Schedule B in 2007. In 2008, it received the ISO certification for its e-commerce services. This entire web based system with latest technological innovations has been set up with technical support from IBM.

MSTC TradeMSTC imports virtually all kinds of raw materials from across the globe for its buyers in India. With more than 30 years experience in international trade, it enjoys excellent goodwill in the international market and shares tremendous confidence of bankers, which ensures obtaining credit / foreign exchange credit at a very competitive rate. Offices in major cities extend unhindered service to the clients.

MSTC e-commerceIt is conducting e-procurement transactions through a web based system, that helps build an efficient vendor base, encourages healthy competition, provides faster service to the buyers, while being completely transparent. The four main modules in this process are : reverse e-auction(price bidding only), reverse e-auction(price & quantity bidding) , e-tendering with multiple bids.

MSTC e-sales

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Through its web based sales program, MSTC has created a virtual market for its 20,000 plus registered clients, which provides an effective set up for disposal of scrap, plant & machinery etc. offering most competitive rates. Most of the transactions are done through e-auction, thereby, ensuring total transparency. At present , e-sales clients include all major PSUs , central and state government departments in India.

SERVICE PROVIDER - METAL JUNCTION PROFILE

METAL JUNCTION Services Ltd is a 50:50 joint venture between Tata Steel and Steel Authority of India Ltd ( SAIL) . The buyer community of 5400 plus buyers comprising traders , fabricators , re-rollers and end-users have placed their confidence on Metal junction because of its operational efficiency, transparency and equal access that the platform provides. Metal junction’s clients have experienced significant benefits on migrating to online selling. Immediately on migration, from their traditional sale process , to the Metal junction online process, their price realizations increased by up to 23%.

Metal junction began operation in 2001 only with steel products while its first year’s turnover was about Rs 94 crore .The turnover grew over Rs 4000 crore in the year 2004-05. In 2005 formally Metal Junction launched its new e-auction coal sales services under the name ‘coal junction’. The new service line intended to leverage the power of internet and e-commerce technologies to make coal available at market driven prices to all consumers , big and small , including traders.

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RESEARCH OBJECTIVE OF THE STUDY

1. To study the e-auction process.

2. To find out whether e-auction is able to fulfill the demands of the customers participating in e-auction.

3. To find out the level of customer satisfaction participating in e-auction of COAL INDIA LTD.

4. To evaluate the quality of the services of the service providers of the e-auction of CIL.

5. To find out the deviations between customer expectations and the services rendered.

6. To uncork the bottlenecks in the total system and provide recommendations to the service providers and to CIL to het a high level of customer satisfaction.

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RESEARCH METHODOLOGY & DESIGN OF

THE STUDY

The service providers of e-auction are just two companies. But there are many customers and the

numbers are increasing every year. The service providers are entrusted with the responsibility of

only the e-services, the financial transactions and all the non physical transactions. But the

quality of the product served comprises an important part of the entire service quality so the

quality of the physical services is important too. Since the service providers are just two in

number , so we designed an open ended questionnaire for them to get an entire information and

behavioral pattern and based on those findings , we designed a close ended questionnaire for the

customers to understand the deviations between the customer expectations and services offered.

We also used certain parameters which are the main dimensions for measuring e-service quality

of an e-auction system and we wanted both the service provider and the customers to rate those

parameters. Those 9 dimensions to measure e-SQ(service quality) are

1. Transparency

2. Reliability

3. Security/privacy

4. Responsiveness

5. User friendliness

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6. Information quality

7. System quality

8. Customization

9. Trust and assurance (A.PARASURAMAN, 2008)

Now these parameters were asked to rate on a scale of 10 by the service providers as they think

the extent of quality of these parameters they provide and these same parameters were asked to

rate by the customers as per their satisfaction on these dimensions. So by this method, we can

evaluate the e-SQ as well as the deviation between the customer expectations and the services

rendered. We can point out the points where the customers are satisfied and dissatisfied.

SAMPLE DESIGN

POPULATION

The target population is all the registered e-auction consumers that is around 15000 and the 2

service providers of COAL INDIA LTD.

SAMPLE SIZE

The survey is conducted among 42 respondents (2 service providers and 40 consumers).

SAMPLING METHOD

The sampling procedure used was simple random sampling and a sample of 40 customers was

taken to understand the behavior of the entire customer base. The mode of survey was of

personal interview, where the respondents filled up the questionnaires.

Duration of Study:The study was carried out for a period of 1 month, from 1st July to 31st July 2010.

METHOD OF DATA COLLECTION

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Instrument for Data Collection

A questionnaire was designed to collect all the data which contained both open ended and

close ended questions.

Drafting of a Questionnaire

A semi structured kind of questionnaire was designed which contained open ended

questions to carry out an elaborate evaluation and analysis and

The questionnaire designed was to provide dual information sharing type, it is seriously

undertaken that anyone who is undergoing the process, should find his interest in filling

the questionnaire.

Analysis Of the Service Providers’ Response

Qualitative Analysis

This analysis is done based on the survey data and response from MSTC India and Metal Junction.

Sales through e-marketing The method used by both for coal auctioning is yankee auction or price quantity method.

Both uses forward auction for sale of goods.

Metal junction has its own business unit coal junction which conducts online auctions for the sale of coal and coal products from clients like CIL.

MSTC India is following B2B and B2C modes.

MSTC has a fixed a sales target of Rs 4780 crore through e-auction for the present year and Metal Junction fixes its target as per CIL’s policy.

Reserve prices for the auctions are fixed by CIL. Auctions are started at these reserve prices , which normally closes at higher prices than the reserve prices.

Customer Growth For MSTC prioritization of customers is done based on volume of business, length of

relationship, future scope and prospects.

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Metal junction has 10,000 registered customers while MSTC has about 6000 customers.

The growth trend of coal auctions of Metal Junction in terms of volume is at CAGR of 7.58 % approximately and that of MSTC is 8-10%.

Product Line MSTC is auctioning manganese ore , ferro manganese, iron ore, raw lignite, ferrous

scrap, non ferrous scrap, vehicles, machinery, items etc. beside coal.

Metal Junction is also auctioning steel and ferrous and non ferrous scrap along with coal.

Pricing MSTC does not play any role in fixing the floor price of the commodities.

Metal Junction provides CIL with MIS regarding e-auction prices, which helps CIL in fixing the floor price.

For Metal Junction the role played by it in fixing prices varies according to product groups/business units.

The cost components for conducting e-auction include hardware and software development and maintenance cost and human resource cost as per MSTC.

Customer Satisfaction Both MSTC and Metal Junction give stress on transparent, smooth, prompt, hassle free

services to their clients.

Metal Junction has introduces an unique service called Coal Movement Services, which intends to take care of the rail logistics requirements of the customers.

Technical Issues Metal junction monitors the e-auction software regularly and upgrades when required.

MSTC upgrades its e-auction software as and when it is necessary to accommodate specific requirements of the clients.

The MSTC e-auction server consumes about 1300 watt of power maximum.

MSTC has a scalability feature which allows them to upgrade the capacity of the server.

Employees

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The technical skills according to MSTC that employees should possess for handling the e-auction site includes, knowledge of web based programming, ability to understand the business logic and write codes for the same and also the package should be user friendly.

For Metal Junction the technical skill varies across different departments, and levels, which constitute the entire team.

Both Metal Junction and MSTC stresses upon training process of employees handling e-auctioning on a regular basis so that there is regular update of technological advancements in the allied fields.

E-Auction security The security aspect of both MSTC and Metal Junction has been taken care of by the way

of ISO 27001:2005 certification.

As per MSTC, e-auction system should be secured from hazards originating fron the internet through preventive firewalls and other software. The hardware should be protected from physical intrusion by way of access control and Data Centre.

Metal Junction has established and is maintaining an Information Security Management System.

Metal Junction is also CMMI Maturity level 3 certified.

Both MSTC and Metal Junction have a DMS(Disaster Management System) in Delhi and Mumbai respectively to get back all the information if the system gets affected badly and the all the data gets lost.

Both have introduced Digital Signature as instructed by CIL.

Content Analysis Inference

Auctioning is done mainly by Yarkee Auction Method. For both MSTC and Metal Junction growth in customer registrations has been considerably high of about 8-10%. Both are auctioning variety of products ranging from coal and coal products to steel, ferrous and non ferrous scraps. Both MSTC and Metal Junction are not directly involved in setting floor prices for the products that are to be auctioned. Customer satisfaction has been given very high importance by both the companies and gives stress on smooth, transparent, prompt and hassle free services to their clients. Where capacity of e-auctioning server is concerned, both the companies upgrades the capacity of the server. Both Metal Junction and MSTC has given stress upon training process of employees handling e-auctioning on a regular basis so that there is regular update of technological advancements in the allied fields. The security aspects that an e-auctioning server should have, has been taken care of with ISO 27001:2005 certification.

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Quantitative Analysis & Interpretations of Service Provider’s Responses

The data which are collected from the survey have been analyzed by graphical representation and the outcomes are interpreted clearly.

SERVICE PROVIDERS

1) The present system is offering only 10% of the total production for sale do you think more amount of coal should be allocated for sale under this system?

Interpretation

Both the Service Provider responded positively to this question. So the response to the above question is that 100% of the service providers saying that the demand for coal will increase under e-marketing and much more amount of coal is needed to be allocated under this system for sale.

2) If Yes, what should be the % of the total production to be sold under e-auction?

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MSTC told they want it to be 30%.

Metal Junction told they want to be 25%.

Interpretation

Both the service providers want the % of coal to be sold under e-auction to be increased drastically due to huge demand of coal.

3) Rank Order Test of the 9 PARAMETERS of e-SQ. ( The scale was of 10 points , 10 being Highest and 1 being Lowest)

Parameters Total Points Number Of Respondents

Average Points Rank

Transparency 18 2 9 2Reliability 19 2 9.5 1Security /Privacy 18 2 9 2Responsiveness 17 2 8.5 3User Friendliness 17 2 8.5 3Information Quality

16 2 8 4

System Quality 18 2 9 2Customization 14 2 7 5Trust & Assurance

19 2 8.5 3

Interpretation

Here the respondents are just 2 as there are only 2 service providers. We can see that on a scale of 10, the ratings are mostly given as 8 , 9 and even 10. Doing Rank Order Test, we see that as per the Service providers’ perception of their service quality regarding those parameters is quite high. In fact though there were 9 parameters, the ratings were equal for many parameters, so we got only 5ranks.

So as per the service providers’ e-SQ’s rank are:Rank 1- ReliabilityRank 2- Transparency, Security/Privacy, System QualityRank 3- Responsiveness, User friendliness, Trust and AssuranceRank 4- Information QualityRank 5- Customization

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Out of the 9 parameters, only Information Quality and Customization has scored little low ratings. This is due to because, service providers believe that CIL’s chain of communication for some important matters is not very efficient , so they cannot provide efficient and correct information to the customers. To talk about Customization , they do not provide much of that.

Analysis Of Customers’ Response

Quantitative Analysis & Interpretations of Customers’ Responses

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1) Quantity of coal you source through e-auction monthly-

The figures are in metric tonnes(MT).

Interpretation

The responses were that 37% of the customers buy less than 5000 metric tones in amonth in e-auction and after that , we can see that 22% customers buy between 10,000 and 15,000 MT in a month and even 18% also buy from 15000-20000 mt per month , so we can see that the demand is quite high.

2) Is the above quantity required for own use or trading or both?

3) Preferable auction type-

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Interpretation

The response is 62% of the consumers prefer forward e-auction who wish to have an assured supply over a long period and 38% prefers spot e-auction.

4) Do e-auction is sufficient to fulfill your demand?

Interpretation

95% of the customers surveyed told that their demand of coal is not satisfied by e-auction , so it can be understood how high the demand of coal is. On asking from where they source their unfulfilled demand of coal , they told they buy it from other traders or sometimes other companies.

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5) Do you think more coal should be allocated for sale under e-auction system?

Interpretation100% of the customers surveyed want more coal to be sold under e-auction , so it can be understood the huge potential for e-auction.

6) If Yes, what should be the % of the total production to be sold under e-auction?

Interpretation

We can see that the maximum numbers of customers are saying that it should be between 20-25%. CIL should see this figure to understand how huge potential e-auction is having though the price of coal under e-auction is more.

7) Do you think that CIL should provide its own service for e-auction?

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Interpretation

Just 37% customers surveyed wanted that CIL should provide its own e-auction service. This means that the customers believe that CIL do not have the necessary infrastructure and technical set up to provide e-auction service on its own. This is a serious note to be looked upon for a Navratna status company.8) Rank Order Test of the 9 PARAMETERS of e-SQ and of some other parameters. ( The scale was of 10 points , 10 being Highest and 1 being Lowest). The customers were asked to rate in terms of their satisfaction with these following parameters.

Parameters Total Points

Number Of Respondents

Average Points

Rank

Price of coal in e-auction 184 40 4.6 12Terms & Conditions for e-auction 265 40 6.625 7Transparency of the e-auction process

266 40 6.65 6

Registration fees of e-auction 358 40 8.95 1EMD amount 230 40 5.75 10Success rate of your bidding 246 40 6.15 9Reliability 333 40 8.325 2Security of the system 322 40 8.05 4Privacy of the customer bidding 332 40 8.30 3Communication of the service provider with you

288 40 7.20 5

User Friendliness 180 40 4.50 14Information Quality 190 40 4.75 11System Quality 182 40 4.55 13Customization 128 40 3.20 15Trust & Assurance 264 40 6.60 8

Interpretation We have given ranking in the average points in descending order because higher the points determines high level of satisfaction, so given higher rank.We can see that the parameter in terms of ranking stands as follows

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Parameters RankRegistration fees of e-auction 1Reliability 2Privacy of the customer bidding 3Security of the system 4Communication of the service provider with you 5Transparency of the e-auction process 6Terms & Conditions for e-auction 7Trust & Assurance 8Success rate of your bidding 9EMD amount 10Information Quality 11Price of coal in e-auction 12System Quality 13User Friendliness 14Customization 15A detailed analysis and interpretation of these ranks of why some parameters have very low satisfaction and why some have high level of satisfaction are given below in the qualitative analysis.

Qualitative Analysis & Interpretations of Customers’ Responses

The analysis is done on the basis of rank.

1) Registration fees of e-auction: Rank 1The Registration fee is :(i) Rs.1000/- for 03 months registration.(ii) Rs.3000/- for 01 year registration.(iii) Rs.10000/- one time. In addition Service Tax @10% and Educational CESS @3% shall be payable on the registration fee.

Almost all the customers were pretty happy with the registration fees and had not much dissatisfaction with it and thus it got highest rating of customer satisfaction.

2) Reliability: Rank 2The word reliability comes with credibility too. Both these service providers are big in their e-commerce operation and both have a credible background. MSTC is a government undertaking and Metal Junction is from the house of TATA. So the factor of reliability also scored high in customer satisfaction.

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3) Privacy of the customer bidding: Rank 3This parameter also scored very high in customer satisfaction because privacy of the customer bidding is maintained at its best and no person comes to know the profile of the customer who is bidding from the other side. So the privacy of the bidder is maintained at very high level

4) Security of the system: Rank 4This parameter also scored very high as the customers are very satisfied with the security of the system as through this system , high magnitude of financial transactions take place.

5) Communication of the service provider with you: Rank 5From this parameter, customers’ little dissatisfaction started. They complained that the service provider do not communicate with them frequently when it is needed. Neither have they ever met physically. Moreover when the service providers need money, they communicate lot but when it comes to communicating some changes or other revisions, communication is very bad. Moreover the complaint that came from customers was that there was no consistency in their communication. Sometime frequent SMS and mails come but sometimes it seems there is no relation between the service provider and the customers.

6) Transparency of the e-auction process: Rank 6Actually the privacy of the bidder is costing the transparency of the e-auction process because the customers feel that since they do not know who are the other customers bidding , their own mental process of bidding is getting disturbed because they feel that there are lot of traders who are bidding at a very high price and eliminating many customers whose budget has been crossed by the new bided price so that the customers cannot buy coal from the coal companies and instead buy from those traders. So the customers feel that though privacy should be maintained but at least they must know something about the person bidding.

7) Terms and Conditions for e-auction: Rank 7

Customers were quite dissatisfied with the terms and conditions of the e-auction process. Mainly because they feel they are simply harassed by extreme documentation which is happening twice creating more problems for the customers. They opined that already they submit more than enough documentation to CIL, then only after lot of verification, they are given username and password to register in the e-auction. But it is their complaint that after they deposit EMD and after they are successful in their bidding and they can get coal from the coal companies , the coal companies are again demanding lot of documents in order to facilitate their delivery of the coal. Those documents demanded are Memorandum & Articles.

8) Trust and Assurance: Rank 8

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Though this is wide term , but here customers talked about their mistrust in the transparency and fairness of the bidding process which is not allowing them to buy coal or buy coal at a much higher price. CIL being a PSU do not provide any assurance to those small customers who are being cheated at the hands of fake bidders and traders who are increasing the bidding price.

9) Success Rate of your bidding: The response from the customers was that, the average success rate of their bidding is just 40-50%. This is because, the price at which mostly bidding takes place goes out of the budget of most of the customers and sometimes even when they bid, the server gets jammed and all the process get hindered.

10) EMD amount : Rank 10The revised EMD amount is Rs 500 per tonne for E grade coal and Rs 400 per tonne for F grade coal. Most of the cuatomers were dissatisfied with it as they want EMD to be somewhere between Rs200-300 per tonne.

11) Information Quality: Rank 11This refers to the information hoisted in the system. The customers are deeply dissatisfied with this parameter as they complained that most of the new revised terms and conditions of revised financial aspects are never communicated to the customers and even never uploaded in the service providers’ websites. Moreover if any new person want to know about the entire process, their website does not have good navigation to quality information which will help new customers.

12) Price of Coal in e-auction: Rank 12Customers are deeply dissatisfied with the price of coal in e-auction because already the bidding starts at 130% of the notified price and then due to traders high bidding , the bidding price mostly on an average goes to 160% of the notified price. Sometimes it even goes to 190% or even more than 200% of the notified price.

13) System Quality : Rank 13Customers were very dissatisfied with the system quality because since this is an e-commerce system and mostly when an e-auction takes place , the quality of the system must be very efficient. But most of the customers told that the system quality of specifically Metal Junction is

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very poor as after successful bidding, mostly the server of Metal Junction gets hanged or jammed destroying the entire bidding process of the successful bidder.

14) User Friendliness: Most customers were of the opinion that the system is extremely non user friendly and only a highly computer literate person can operate this system which mostly is deficient in most of the customers participating in e-auction so they have to hire another person to operate or bid on their behalf which increases their cost further.

15) Customization : All customers are treated equally and there is no customization for separate customers.

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MAIN FINDINGS

1) E – Auctioning is a right step for both CIL which increased their profit considerably and also for the small customers who cannot buy coal through normal procedure.

2) An easy access to place one’s demand of coal3) E – Auctioning is a legitimate channel for supply of coal to non –consumer4) Registered traders also get opportunity in the platform5) More awareness, training and education is needed to be provided to the consumers for

efficiency of transactions and more efficient participation.6) It has high prospect in fulfilling the demand of consumers in future and will help to

shorten the demand-supply gap.7) It has helped to eliminate the middle men and illegal transactions benefiting the buyers

and the sellers.8) Most of the customers are pretty satisfied with most of the aspects of this system.9) The service providers are specialized and unbiased.10) The e-auction software should be able to eliminate jamming and blockade to increase

customer satisfaction level.

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RECOMMENDATIONS

1) More quantity is needed to be allocated for sale under e-auction to satisfy customers’ needs and so they do not need to resort to other source for their unfulfilled demand.

2) More awareness, training and education of e-auction is required for the consumers.3) Auction software should be improved and upgraded to fight with system jamming and

blockade.4) It needs to be cost effective on both the buyers and consumers end. EMD if possible

should be lowered.5) Traders must submit utilization statement.6) The service provider must make some representative for the customers and must meet

them for physical interaction and training to be more efficient on the bidding system7) The service provider if introduces some new technological changes must ensure to train

the customers ( for e.g. : recently introduced digital signature is causing lot of tensions in the entire customers’ segment.

8) CIL should evaluate the e-auction process frequently, the quality of service rendered, the customer satisfactions and excreta.

9) The double documentation should be avoided. If once the customers have been verified and granted username and password, I do not think there is a need for the same documents to submit again at the concerned coal companies. CIL should send those documents so that those coal companies do not need those to be submitted by the customers again.

10) When such a big system is running electronically, documents to be filed electronically to save time and harassment.

11) Logistics system to be monitored by CIL because the customers are paying EMD and even coal value after successful bidding but they are not getting the delivery of coal in time. In fact it is getting delayed by 6 months and above, so the whole logistics system is getting into problem as auction takes place every month. The customers are not very big who buy coal from e-auction so they are losing the interest on their blocked money.

12) Metal Junction must upgrade its system quality so as to avoid getting hanged and jammed in critical time.

13) The service providers need to have an efficient & frequent communication process with the customers through SMS, email.

14) The service providers must look for an efficient and prompt redress of the customers’ complaints.

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15) The service providers must upload important information on their website and must pave for an easy navigation to lot of information for beginners.

16) The system should be made more customer friendly rather than customer compulsion.

17) In this modern world of customization, the service providers must maintain the database of their customers, must try to create customer profiling and must try to package customized service for separate profiles.

18) CIL should see to the extreme increase in the price in the bidding which is not allowing many customers to buy coal under e-auction. CIL must ensure social vision as it is a PSU as well as profitability.

19) The service provider rated all the parameters mentioned quite high on the basis their perceptions about their service quality but we saw in the above analysis in which parameters the customers are satisfied, little dissatisfied, highly dissatisfied and very highly dissatisfied. So the service providers need to understand those dissatisfaction, CIL must ensure that these dissatisfactions are removed and a CIL, the coal companies and the service providers must work towards committing a high level of satisfaction on all those parameters mentioned.

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LIMITATIONS OF THE STUDY

a. Time was the biggest constraint in my research study, since it did not gave me the direction to spend the kind of attention, which I would have otherwise spend.

b. Possibility of error in data collection because some consumers may have not given actual answers of my questionnaire.

c. Some of the people involved in the survey were not co-operative.d. Traveling at various location to collect data was a very tiring and hectic.e. The confidentiality deed between the service providers and CIL was the main hindrance for me

in this project. The service providers were not ready to disclose any information or talk anything about the e-auction system to me but still I with permission from some high authority went to take their interview but they were very reluctant to give any information or answer anything of the questionnaire.

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ANNEXURE 1

(Questionnaire for Service Providers of e-Auction of Coal)

Please Note: The information asked in this questionnaire is not intended to harm your company in any way or to get into your confidentiality. This is purely done for academic purpose. This project report will only be submitted to CIL and to my college and nowhere else.General InformationName of the company: Name of the person interviewed (optional): Designation: Total Number of customers registered at present in your entire e-commerce system: Number of customers registered at present for buying coal under e-auction:The annual growth % of the customers getting registered for e-auction: 1) Kindly name the companies other than CIL for which you usually conduct e-auction and their products:2) What encouraged your company to become e- Service Provider for Coal?

3) As the present system is offering only 10% of the total production for sale under e-auction, Do you think more coal should be allocated for sale under this system?

Yes/No4) If yes, what should be the % of the total production to be sold under e-auction?5) Do you provide any MIS to CIL which help them to fix the floor price of coal?

Yes/No6) What is the chain of communication between you, CIL and the subsidiary coal companies?

7) Has CIL ever done assessment of your service quality?Yes/No

Reliability8) What type of measures is taken so that the site does not crash at any time?

9) What type of measures is taken so that the accuracy and transparency of the bidding process is maintained at its best?

Security/Privacy10) What are the risks involved in e-auction?

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11) What type of special security and safety measures do you take to operate this system as this system encompasses business comprising huge financial wealth?

12) What type of measures do you take to maintain the privacy of the bidders?

Responsiveness13) Have you ever personally interacted with the customers registered in your system?

Yes No14) Do your customers have any grievances against your system?

Yes/No15) If yes, kindly specify those grievances.

16) How do you handle those grievances against your company?

Information Quality17) How frequently do you update the details of the customers registered?

18) How frequently do you upgrade your website?

19) Do you communicate with the customers informing them of revisions made by the CIL regarding e-auction?

Yes/No20) If yes, how do you do it?

E-mail to every customers

SMS to the every customers

Upload in your website as a highlight

Other methods( please specify)

System Quality21) From the inception of e-auction till today, what improvements have you brought in this system to increase customer confidence?

22) What type of technical skills your employees possess for handling the e-auction site?

23) What kind of training is imparted to the employees handling e-auction?

Customization24) Do you provide customization services based on the profile of each customer?

Yes /No25) If yes, what are the services you customize and how do you customize them?

Commitment

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26) Do you think the customers registered to you are loyal to you?Yes /No

27) If yes, how have you measured their loyalty?

28) Rate your own service quality on a scale of 10 (1 being lowest – 10 being highest)Dimensions RatingsTransparency of e-auction processReliability of your systemSecurity / Privacy maintained by your systemResponsiveness User friendlyInformation Quality System QualityCustomizationTrust and Assurance provided

Sumeet DasPost Graduate Diploma in Management (1st Year)Institute for Technology and Management, Navi Mumbai

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Thank You for your co-operation in this research

ANNEXURE 2

(Questionnaire for Customers/Traders of e-Auction of Coal)

1) Quantity of coal sourced through e-auction monthly:

2) Is the above quantity required for own use or trading?(a) Own use (b) Trading (c) both

3) Quantity of coal required/ traded monthly:

4) If e-auction is insufficient to fulfill your demand, from where do you source your unfulfilled demand of coal?

5) Which service provider are you registered with?

6) Kindly state the preferable auction type and reason therefore-(a) forward e-auction (b) spot e-auction

7) As the present system is offering only 10% of the total production for sale under e-auction, Do you think more coal should be allocated for sale under this system?

Yes /No

8) If yes, what should be the increased % of the total production to be sold under e-auction?

9) Do you think that CIL should provide its own service for e-auction?Yes /No

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10) Rate the following parameters of e-auction with regards to your satisfaction on a scale of 10 (1 being lowest and 10 being highest)

Parameters RatingsPrice of coal in e-auctionTerms and Conditions for e-auction laid down by CILTransparency of e-auction processRegistration fees of the e-auctionEMD amount Success Rate of your biddingReliability of the systemSecurity of the systemPrivacy of the customer biddingCommunication of the service provider with youUser friendliness of the systemInformation Quality of the systemSystem Quality of the systemCustomized services provided to you by the service e providerTrust and assurance provided

11) Kindly state the reasons if any parameter’s rating is less than 7.

12) Do you have any suggestions to improve the e-auction system?

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Thank You for your co-operation in this research

REFERENCES

WEBSITESwww.wikipedia.comwww.coalindia,inwww.mstcindia.co.inwww.metaljunction.comChaffey, D. (n.d.). http://davechaffey.com/internet-marketing/C4-Strategy/Internet-strategy-process. Retrieved july 25th, 2010, from davechaffey.com: http://davechaffey.com/internet-marketing/C4-Strategy/Internet-strategy-process

MAGAZINE & Other ArticlesCoal insightsA.PARASURAMAN. (2008). Defining, Assessing, and Measuring Service Quality: A Conceptual Overview. University of Miami.

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