Company Background

Bajaj Steel Industries Limited (BSIL) was established in Nagpur in by Shri Gangabishenji Bajaj
the year 1961. They have a very wide product portfolio ranging from cotton ginning machines
to Electrical Panels to Fire Detectors manufacturing in its four units located in Hingna on the
outskirts of Nagpur. Bajaj Steel is a pioneer in the manufacturing of Double Roller Cotton
Ginning Machine and exports its products to 49 countries located in America, South East Asia,
and Africa. The company has recently entered into a collaboration with Eagle Corporation of
USA to manufacture raw gin, saw gin, etc. in India. It has bestowed with an award for being
the Largest and Modern Cotton Ginning and Pressing Machinery Manufacturer in India by the
Ministry of Textiles, Government of India. The company is awarded Best Performer “Lalit
Doshi Memorial Award 2008-2009” by SICOM Ltd. It has a total of 1045 employees which
includes staff and operators working in its various units and offices. The company has technical
collaboration with the Central Institute for Research on Cotton Technology (CIRCOT), ICAR
of Government of India and M/s. Samuel Jackson Inc.

Timeline for Company milestones

1961: The Company is established in Nagpur by Shri Gangabisenji Bajaj
1965: The first product ever made by the company was steel rollers which marked their entry
into the manufacturing business
1985: The company went public this year.
2008: Ministry of Textiles awarded the company as “Largest and Modern Cotton Ginning and
Pressing Machinery manufacturers in India”
2009: Awarded the best performer “Lalit Doshi Memorial Award” by state industrial and
Investment Corporation of Maharashtra (SICOM) Ltd.

Organization Divisions and Product lines

Broadly, the company has the following four divisions:

MACHINERY DIVISION: Bajaj steel has always concentrated its business around the steel
division and the cotton ginning and pressing machines were their main source of revenue. But
during the past few years, the company’s revenue through the sale of these machines has come
down mainly because of the reduced demand for cotton in the apparel industry.
ELECTRICAL DIVISION: In order to expand the company to various industries, Bajaj steel
has set up an electrical panel manufacturing unit. Through this, the company is able to cater to
the needs of the already existing customers buying the cotton ginning machines that require
electrical panels as well. The products include ACCL Panels, PDBs, and Industrial Electrical
panels.
INFRASTRUCTURE DIVISION: As a part of further expansion, the company has launched
its own infrastructure division. It provides pre-fabricated buildings. This division has
successfully completed 250 steel building projects including both domestic as well as export.

SUPER PACK DIVISION: Superpack division is the last addition to the company’s division.
This division was set up in 1985 and manufactures a wide range of Filler, Colour &
Additive master batches for the Plastic Processing Industry. Product categorization is done in
three types, based on the end-user of the product- Ginning Machinery,IMPCO- Delinting,
Acid-Delinting
Foreign Subsidiary:
1. Bajaj Coneagle LLC, Alabama USA
2. Bajaj Steel Industries (U) Limited, Uganda
The strong vision and dedication of the management and employees has put the Company as
one of the biggest manufacturers of Cotton Ginning and Pressing Machineries with distinction
of having only company in the world with capabilities for manufacturing Cotton Ginning
Machines for all the four major cotton ginning technologies being used in the world and
enjoying more than two - thirds of the market share in India while rapidly expanding in the
other cotton-growing countries of the world. The company also undertakes turnkey projects
including civil in its area of operation. One such project has been completed in Uganda & the
other has been completed in Benin.

THREATS, RISK, CONCERNS, FUTURE TRENDS & OPPORTUNITIES

The cotton scenario in the world is in depression mode and the recovery is likely to take some
time, therefore the core business of the company in respect of Cotton Ginning & Pressing
Machinery is likely to be affected adversely. The Company is trying to compensate this by an
increase in revenue from other segments such as PEB, Electrical Panels, etc. The continuous
improvements in the product quality and enhanced sales efforts are likely to balance the
performance.

In the current global uncertain economic environment, certain risks may gain more prominence
either on a standalone basis or when taken together. The Company has already initiated various
actions in this direction by resorting to manpower review, cutting unnecessary costs, etc.
The challenges ahead are to find out ways and means to bring down the processing costs and
to further increase the productivity and efficiency of machines used for each level of operation
in the Ginning & Pressing Factories, Delinting, Decorticating and other items supplied by the
Company.

Further, the pre-engineered steel buildings division has also been expanded and getting a good
response within and outside India. The growth potential of both these divisions is very high.
The Continental Cotton Ginning & Pressing Machinery Division of the Company has well been
adopted and various equipment is being supplied to advanced countries, such as Australia,
Greece, the USA, etc. apart from substantial supplies to Africa, this is likely to increase further.
Bajaj Steel Ind Ltd is striving for operational excellence by restructuring operations and
adopting world-class practices in their bid to increase profits and become competitive globally

The implementation of lean manufacturing practice helped bajaj steel to cut costs and improve
employee productivity. Bajaj Steel emphasis more on quality and has adopted the Total quality
management(TQM) approach. The use of IT solutions such as ERP and MES has grown over
the last few years as the company was into enhancing its productivity
Besides adopting best practices, it is increasingly deploying technology to enhance operational
excellence. The strong vision and commitment of the management and employees has put the
company as one of the largest manufacturers of Cotton Ginning and Pressing Machineries with
perfection of being the only organization in the world with capabilities for manufacturing
Cotton Ginning Machines for all the four leading cotton ginning technologies being practiced
in the world and having more than two - thirds of the market share in India while quickly
expanding in the other cotton-growing countries of the world.

Findings about the company:

1. Bajaj Steel is an engineering company unlike the mass production based companies
wherein there is no fixed line of work and the manufacturing pipeline is very dynamic.
The products manufactured are custom products as per client requirements.
2. For such manufacturing configuration, planning is the most critical function and
determines the overall financial performance of the company. This includes effective
management of inventory. Currently the company is holding inventory worth 60 crores
because the typical lead time for crucial parts like hydraulic valves, pumps is 1 years
and for motors, it is 6 months. So a Minimum Stock Level (MSL) inventory needs to
be managed to deliver short duration orders typically ranging 1-3 months. Another
reason for managing high inventory level is uncertainty in parts delivery from supplier’s
end.
3. The company is an early adopter in terms of technology and innovation in
manufacturing processes. This gives them a competitive advantage and it also sets a
trend for the overall industry. Company employs state of the art machines to improve
product quality and overall process efficiency leading like in the case of automated
drilling machine.
4. Every investment decision made by the company is aligned with the long term vision
of the organisation. This defines their overall operating strategy. The company invested
in automated drilling machines to replace the manual ones though the investment was
to the tune of Rs 4Cr per machine. Yet the company invested keeping in mind the long
term view of product quality improvement in addition to short term gain in productivity
and cost. Contrarily the company didn’t invest in automating some of the processes as
the investments did not justify the returns.
5. Earlier, the procurement of parts was done from the USA due to the design of the
equipment. But later the company started indigenization in order to save time, cost and
improve ease of procurement. Again, the domestic procurement was dependent on
availability, quality and cost factors.
6. The employees typically work in isolation and are restricted to their domain, role
boundary without interconnecting the different functions. They have to be provided
with proper training and knowledge to get a holistic view of the entire process.
7. There needs to be a combination of competency as well as the intent to achieve the
goal. Capability is the driver behind the intent. BSIL had the intent but lacked the
competencies needed to be the most prominent manufacturers. To build their
capabilities, they underwent some collaborations and acquisitions to enhance the
 quality of the product according to customers’ needs. This was a proactive strategy of
vertical integration. These strategies were

7.1. BSI collaborated with Continental Eagle Corporation (CEC), USA, in 2009, to
introduce the saw-ginning technology-based machinery. Till then, BSI manufactured
only the double-roller technology-based machinery, which was commonly used in India
and some parts of Africa. In 2012, BSI acquired CEC and set up Bajaj Coneagle LLC
as its wholly-owned subsidiary in the USA, mainly to serve the customers in the USA.
CEC was a 180-year-old company that manufactures machinery for ginning,
processing, and handling cotton, and has marketing offices across the world, and a
steady clientele in major cotton-growing nations.

a. The entire product line was transferred to Nagpur from Prattville Facility

b. To ensure that the quality is maintained, Continental assigned a quality control

engineer to oversee the manufacture in India, and engineers from Continental to make
regular visits

c. All machines and parts are built to US standards to maintain continuity of parts for
the installed base and future customers

7.2. Started Manufacturing Bajaj Cotton pre-cleaner in Technical Collaboration With

Central Institute for Research on Cotton Technology (CIRCOT), ICAR, Govt. of India
in order to cater larger value chain

7.3. Manufactured BAJAJ HUMIDIFICATION SYSTEM in Technical Collaboration

with M/s. Samuel Jackson, Inc. USA for moisture restoration in cotton lint by applying
psychometric principles which reduce the pressing force of bale press finishing leading
to lower power consumption per bale.

Manufacturing task for the company (In order of preference):

Quality: Since the company is exporting to the US, the product quality needs to meet the global
standard.

Flexibility: Company provides custom offerings as per client needs and hence showcases high
level of flexibility.

Delivery: The company provides prompt service in terms of delivery of products which are to
be delivered in a short period.

Cost: Since the company provides high quality products and services, they don't have to bother
about the cost.
Manufacturing stages and positioning of Bajaj Steel

1. Stage 1: Internally Neutral- Objective is to minimise the negative impact of operations.

2. Stage 2: Eternally neutral- Objective is for Operations to help the business maintain
parity with competitors.
3. Stage 3: Internally Supportive- Objective is for operations to provide credible support
to business strategy.
4. Stage 4: Externally Supportive- Objective is for operations to provide a source of
competitive advantage.

Based on our analysis, we can classify Bajaj Steel as a stage 4 organisation who are effectively
managing their resources to maintain a competitive advantage in the market.