A FINAL REPORT ON

“CUSTOMER RANKING BASED ON RECENCY

FREQUENCY MONETORY”

By
Aman Chitkara
20172353

JINDAL STAINLESS LIMITED

Internship Period: 04th June 2018 to 26th July 2018

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 A FINAL REPORT ON

“CUSTOMER RANKING”

By
Aman Chitkara
20172353

JINDAL STAINLESS LIMITED

A REPORT SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS OF
MBA PROGRAM OF
JINDAL GLOBAL BUSINESS SCHOOL

Distribution List:
MR. RAJEEV GARG (COMPANY GUIDE)

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 1. ACKNOWLEDGMENT:

This project was an insightful experience of my internship at Jindal Stainless

Limited. I would like to thank my company guide Mr. Rajeev Garg (AVP- Head
Domestic Sales) & Mentor Mr. Vijay Sharma (Sr.VP – Head Sales, Domestic
& Export) for giving me the opportunity to work on this project, and providing me
with sound guidance and the necessary facilities to carry out the project. I thank
them for giving me numerous assignments beyond my project and expose me to
the entire gamut of activities and made me to learn more beyond my project.
Apart from my efforts, the success of this project depends largely on the
encouragement and guidance of many others. I take this opportunity to express my
gratitude to the people without whom this project would not have been a success. I
wish to express my gratitude towards Mr. Rajeev Garg at JSL for guiding and
supporting me as my guide at JSL. He was extremely cooperative and willing to
share his valuable experiences with me and helping me understand the various
aspects of project.

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 TABLE OF CONTENTS:

S.No Topic Page

No
1. Acknowledgement
2. Objective
3. Abstract
4. Executive Summary
5. Introduction
5.1 About Jindal Stainless Group
5.2 Michael Porter Five Force Analysis of Stainless Steel Industry
6. About the company
6.1 About JSL-Jindal Stainless Limited
6.2 JSL Products
6.3 STP and SWOT
6.4 Competitors
6.5 Benefits of Stainless Steel
7. Description of work done
7.1 Collecting data through Primary and Secondary sources-Conducting surveys
7.2 Segmentation of Customers
7.3 Data processed in analytical tool for Value Segment wise, Volume, Payment
Terms, Overdue Debtors & Buying Frequency
8 Conclusion
9 Limitations
10 Recommendations
11 Bibliography
12 References

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 2. OBJECTIVE:

The internship program focuses on “Customer Ranking through Alteryx

(Analytical Tool) to improve major customers visibility in organization to increase
Share of Business with existing customer base.”
Area: Sales

METHODOLOGY:
The complete customer ranking system was done based on below parameters:
 Total Volume (MT) – Segment Wise
 Total Value (INR) – Segment Wise
 Payment Terms – Customer Wise
 Buying Frequency – Customer Wise
 Overdue Debtors – Month Wise
We collected the sales data, customer master data & debtors’ data as per above
parameters for FY 17-18. This is based on RFM (Recency, Frequency &
Monetary) analysis to examine the top important customers, where organization
focus should be more as weigh against to non-profitable customers. This analysis
gives us the top rankers based on prescribed methodology.
RFM (recency, frequency & monetary) analysis is a marketing technique used to
determine quantitatively which customers are the best ones by examining how
recently a customer has purchased (recency), how often they purchase (frequency),
and how much the customer spends (monetary). RFM analysis is based on the
marketing axiom that "80% of your business comes from 20% of your customers."
For more than 30 years, direct mailing marketers for non-profit organizations have
used an informal RFM analysis to target their mailings to customers most likely to
make donations. The reasoning behind RFM was simple: people who donated once
were more likely to donate again. With the advent of e-mail marketing
campaigns and customer relationship management software, RFM ratings have
become an important tool. Using RFM analysis, customers are assigned a ranking
number of 1,2,3,4, or 5 (with 5 being highest) for each RFM parameter. The three
scores together are referred to as an RFM "cell”. The database is sorted to

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determine which customers were "the best customers" in the past, with a cell
ranking of "555" being ideal.
Although RFM analysis is a useful tool, it does have its limitations. A company
must be careful not to over solicit customers with the highest rankings. Experts
also caution marketers to remember that customers with low cell rankings should
not be neglected, but instead should be cultivated to become better customers.

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 3. ABSTRACT:

Internship Proposal: Customer Ranking to increase share of business with

existing customers.
Area: Sales
Duration: 04th June 2018-26th July 2018
Description of work done:
1. Collecting data through Primary and Secondary sources (mainly through
SAP)
2. Segmentation of Customers value wise scoring.
3. Segmentation of Customers volume wise scoring.
4. Overdue Debtors Scoring.
5. Buying Frequency.
6. Payment Terms Scoring.

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 4. EXECUTIVE SUMMARY

Student Name: Aman Chitkara

Enrollment ID: 20172353

Industry Type: Stainless Steel

Address: Jindal Centre, 12 Bhikaji Cama Place, New Delhi.

Project Title

“CUSTOMER RANKING”

Objective of the project

The internship program focuses on “Customer Ranking to increase share of

business with existing customers”
Background

Jindal Stainless Limited (JSL) is India's largest and only integrate Stainless Steel
manufacturer. The main purpose of doing this project is to get customer ranking
based on different assigned parameters (Value, Volume, Buying Frequency,
Payment Terms & Overdue Debtors). To gain a comprehensive experience I
worked with JSL for 7 weeks as a full-time intern in Sales Dept.

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 5. INTRODUCTION

5.1 ABOUT JINDAL STAINLESS GROUP

Founded by Shri O.P Jindal in 1970, Jindal Stainless is one of the largest stainless
steel conglomerates in India and ranks amongst the top 10 stainless steel
conglomerates in the world. It’s not only the magnitude of company’s operations
that determines its credibility and name, but it remains inspired by its vision for
innovation and enriching lives. Jindal Stainless Group has an annual crude steel
capacity of 1.8 MTPA and the group has an annual turnover of Rs 14,500 crores.
Company’s growth has been backed by the excellence of its people, value driven
business operations, customer centricity, adoption of one of the best safety
practices in the stainless-steel industry and a commitment for social responsibility.
 Jindal Stainless Corporate Management Services Pvt. Ltd.(JSCMS)
It provides necessary advisory and back-end support services to the Jindal
Stainless Group Companies.
 Jindal Stainless (Hisar) Limited (JSHL)
Hisar plant was established in 1975 for meeting stainless steel demands. It is
fully integrated Stainless-Steel plant with a capacity of 8,00,000 TPA. It is
world’s largest producer of Stainless-Steel strips for Razor Blades and
India’s largest producer of coin blanks, serving the needs of India and
international mints.
 Jindal Stainless Steelway Limited
The service centre arm of JSHL brings convenient, customized, just in time
services at the doorsteps of its valued customers.
 Jindal Stainless Limited
It is one of the largest integrated manufacturers of stainless steel in India
with a capacity of 1 million tons per annum. A leader and a name
synonymous with Enterprise, Excellence and Success, the company’s ethos
mirrors most characteristics similar to the metal it produces; Akin to
stainless steel Jindal Stainless Limited is innovative and versatile in its
thought process; strong and unrelenting in its operations.
 Jindal Coke Limited
It is a company incorporated on 2nd December, 2014 under the Companies
Act, 2013. It proposes to engage in the business of manufacturing,
processing, finishing and dealing in all kinds and forms of coke and coke
products at a facility with a capacity of 0.43 million metric tons p.a. to be
developed at Kalinganagar Industrial Complex, Duburi, Jajpur, Odisha.
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 Jindal United Steel Limited.
Jindal United Steel Limited is a company incorporated on 1st December,
2014 under the Companies Act, 2013 .It proposes to engage in the business
of manufacturing, processing, refining, smelting, importing, exporting,
marketing and distribution of all kinds and forms of iron and steel including
tools and alloy steels, stainless and all other special steels.

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 5.2 MICHAEL PORTER FIVE FORCE ANALYSIS OF STAINLESS
STEEL INDUSTRY:

Porter's Five Forces model, named after Michael E. Porter, identifies and analyzes
five competitive forces that shape every industry, and helps determine an industry's
weaknesses and strengths. These forces are:
1. Competition in the industry;
2. Potential of new entrants into the industry;
3. Power of suppliers;
4. Power of customers;
5. Threat of substitute products.
Frequently used to identify an industry's structure to determine corporate strategy,
Porter's model can be applied to any segment of the economy to search for
profitability and attractiveness.
S.No. Forces Acting on Description
Industry

1. Degree of Rivalry (high) Although India is the world's second-

largest consumer and third-largest
producer of stainless steel, the nation's
average per capita consumption of
stainless steel is only about 2 kilos,
whereas the global average is 5 kgs. To
address these challenges and meet
development goals, an import duty hike
is really needed to create a level-playing
field for domestic stainless steel
producers because China uses dumping
and other unfair trade practices to enter
foreign markets

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2. Threat of Substitutes Better price/performance of substitutes
(moderate) (Plastic, Aluminum)

3. Buyer Power (low)  Buyer's inability to integrate

backward.
 High economies of scale for
integrated steel plants.
4. Supplier Power (high)  High Raw Material Prices.
 Threat of forward integration by
supplier relative to threat of
backward integration by stainless
steel producers is negligible.

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 6. ABOUT THE COMPANY

6.1 JINDAL STAINLESS LIMITED

It is one of the largest integrated manufacturers of stainless steel in India with a
capacity of 1 million tons per annum. A leader and a name synonymous with
Enterprise, Excellence and Success, the company’s ethos mirrors most
characteristics similar to the metal it produces; Akin to stainless steel Jindal
Stainless Limited is innovative and versatile in its thought process; strong and
unrelenting in its operations.
The state-of-the-art unit of Jindal Stainless is located in the eastern part of India
in the state of Odisha. The plant comprises of 250,000 tons per annum of Ferro
Alloy’s facilities with world class technology and equipment’s sourced from
Siemens VAI, SMS SIEMAG and ANDRITZ SUNDWIG. The complex, equipped
with captive power generation facility, is eventually scalable up to 3.2 million tons
per annum of stainless-steel production.

6.2 JINDAL STAINLESS PRDUCTS

Jindal Stainless group is India’s largest producer of stainless steel in 200, 300, 400
and duplex grades. Combining an experience of over four decades, a clear focus on
customer needs, coupled with cross market expertise, a wide range of products and
modern technology has been the mainstay of their success.
Jindal Stainless Ltd. key Products/Revenue Segments include
 Cold Rolled/Pre-coated Products which contributed ₹ 3676.24 Cr to Sales
Value (51.97 % of Total Sales),
 Hot Rolled Products which contributed ₹ 2624.85 Cr to Sales Value (37.11
% of Total Sales),
 Steel Scraps, M.S.Scraps, Nickel, Stainless Steel etc. which contributed ₹
356.62 Cr to Sales Value (5.04 % of Total Sales),
 Ferro Alloys which contributed ₹ 110.31 Cr to Sales Value (1.55 % of Total
Sales),
 Export Incentives which contributed ₹ 56.46 Cr to Sales Value (0.79 % of
Total Sales),
VISION: The vision is a world that is stainless in every way. Akin to the metal it
produces that adorns the world with its great aesthetics resisting the stains of
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 ‘time’, the people, abided by its core values and principles, helping to build a clean
and flawless society for the stainless world!!

MISSION:
 To Be A Leading Stainless-Steel Company in the World
 Forging Reliable Relationships with the customers, suppliers, employees and
all other stakeholders
 Building strong capabilities driving innovative Practices, High Quality and
Competitive Solutions

6.3 SEGMENT, TARGET GROUP, POSITIONING AND SWOT

STP

JSL Stainless produces a range of products for distribution in the

domestic market for various clients across building construction,
architecture, automobiles, railways, white goods and appliances,
power plants and other industrial sectors. The company exports
products to the US, Europe, Middle-East and South Asia. JSL is
Segment headquartered in New Delhi, India.

Construction, oil & gas, transportation, refining, telecom, ship

building, power, automobiles, capital goods, consumer durables
and infrastructure sector

Target Group

One of the most prestigious and dynamic business groups in the

World

Positioning

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SWOT Analysis

1. Produces economical and efficient stainless steel

2. Sports a product portfolio that caters to varied needs in the
stainless steel market
3. Has force of innovation, adaptation of new technologies and
the collective skills of its 15,000 strong, committed workforce
4. Has an enterprising spirit and the ability to discern future
Strengths trends

1. Shortage of coking coal and is largely dependent upon its

import
2. Weak performance on the back of the higher raw material
Weaknesses cost and the power & fuel cost

1. Venture into new businesses by leveraging its core

capabilities
2. Increase production capacity to meet the global steel demand
Opportunities 3. Diversify investments to distribute risk in business

1. Hike in the export duty on iron ore fines and lumps

2. Project implementation and raw material security
3. Issues related to land acquisition, raw material linkages and
Threats environmental clearances

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 6.4 COMPETITORS:
As per the latest report of March 2018, the competitors of JSL with net profit of
each industry are given below:

Name Last Market Cap. Sales Net Total Assets

Price (Rs. cr.) Profit
Turnover

Star Ferro 140.25 3,115.98 -- 22.7 30.56

Jindal Stainles 64.5 2,896.16 8,311.28 58.34 9,154.63
Mahindra Ugine 573.95 1,877.66 723.01 188.15 357.65
-
Electrosteel St 4.8 1,156.43 2,541.25 1,463.48 9,574.15
Technocraft Ind 437.15 1,149.70 765.52 82.09 772.42
Mukand 69.3 979.94 2,697.41 -41.81 4,582.00
Usha Martin 18.8 572.91 3,447.47 -404.43 4,145.95
Adhunik Ind 105.85 494.99 374.34 2.3 168.38
Vardhman Steels 105.95 327.66 673.81 19.14 471.32
Kamdhenu 108.5 253.89 841.19 8.15 211.48
Rama Steel Tube 139.55 232.13 216.79 5.09 80.14
Lloyds Steels 1.9 170.75 76.15 2.25 -
Bedmutha Ind 45.05 110.51 698.66 -52.3 416.67
OCL Iron 5.05 67.74 367.64 -145.68 1,151.17
SAL Steel 6.65 56.5 338.19 -28.77 40.31
Shah Alloys 18.9 37.42 261.31 124.38 -0.45
Tulsyan NEC 24 36 845.55 -28.66 887.18
Hisar Metal 41.15 22.22 176.13 0.39 71.09
Metkore Alloys 2.8 19.72 45.26 -11.34 160.45
Ramsarup Ind 2.15 7.54 2.75 -55.66 848.39
Varun Ind 2.05 5.97 168.03 -34.48 1,735.48

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6.5 BENEFITS OF STAINLESS STEEL:

 Life Cycle Cost

Life cycle characteristics of stainless steel is the least expensive choice in a life
cycle cost comparison due to its a durability and low maintenance material.
Recyclable stainless steel is easily recyclable and fetches a high scrap value.

 Hygienic Properties
The cleaning ability of stainless steel makes it possible to use in various industries
such as brewery, distillery and pharmaceutical industries.

 Corrosion Resistance
Stainless steel has a high resistance to corrosion media for the processing
industries, pharmaceuticals, chemical industries, mills etc.

 Strength
The cold work hardening properties of stainless steel can be used in design to
reduce material thickness, weight and cost.

 Aesthetic Appeal
Stainless steel is available in many surface finishes resulting in a high quality and
pleasing appearance.

 Fire & Heat Resistance

Special high chromium and nickel-alloyed grade will be able to retain strength at
high temperatures.

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 7. DESCRIPTION OF WORK DONE IN DETAIL:

7.1 Collected below data from SAP with the help of Sales Team &
Associates:

Analysis:

7.2 Segmentation of Customers:

 Collected data of Customers dealing with JSL in various segments
 Sample size - 1107 end customers.
 Collected information such as Name of Customer, segment, sub segment,
and SAP code.

Screenshot of the data collected in excel:

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 7.3 Data processed in analytical tool for Value Segment wise:
Data is aligned according to requirement of tool to perform 1st Value (INR)
analysis. Based on monetary spent with the company, each customer ranked based
on monetary spent within the segment. Below is the screen shot for tool analysis &
excel output.

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Data is processed in analytical tool based on Volume (MT) segment wise:
Data is aligned according to requirement of tool to perform 2nd Volume (MT)
analysis. Based on quantity lifted from company, each customer ranked based
on quantity lifted within the segment. Below is the screen shot for tool analysis
& excel output.

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Data is processed in analytical tool based on Payment Terms segment wise:
Data is aligned according to requirement of tool to perform 3rd Payment Terms
analysis. Based on payment terms with company, each customer ranked based
on payment terms within the segment. For example, if a customer is having
100% advance payment terms, its score is 10 & another customer is having 90
days credit days, its score is least i.e. “1”. Below is the screen shot for tool
analysis & excel output.

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Data is processed in analytical tool based on overdue debtors segment wise:
Data is aligned according to requirement of tool to perform 4th Overdue debtors
analysis. Based on Overdue debtors with company, each customer ranked based
on overdue debtors within the segment. For example, if a customer is having
NIL amounts to payable, its score is 10 & another customer is having debtors
more than 90 days, its score is least i.e. “1”. Below is the screen shot for tool
analysis & excel output.

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23
 Data is processed in analytical tool based on buying frequency segment wise:
Data is aligned according to requirement of tool to perform 5th Buying
Frequency analysis. Based on Sales order data with company, each customer
ranked based on buying frequency within the segment.

Final Rank Analysis

As per above data & screen shots, there are five different scores obtained with
different aspects of parameters as mentioned earlier in the report. This analysis
examined each customer at different aspects. Every individual output must be
cumulate at a single node to obtain single rank for each customer within the
segment. So finally we joined all output to single node, as per below screen shot:

These output joined at single node to obtain single rank for each customer. To get
single rank, we have to assign different weight age for each parameter. Below is
the screen shot for weight age assigned:

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25
Based on above weight age, final rank has been obtained:

Points of Discussion:

As per above screen shot at same level of volume, having different ranking score.
It could be due to difference in payment term score or buying frequency. Company
should focus to increase the “Dy CMM/D/Shell” ranking score by taking required
measures & “EC Blades” having scope to increase business with it. This analysis
could be the reason for better efficiency with same set of customers:

1) If any customer having worst score in payment terms & best score in volume
or value, then management should focus on its payment terms & can take
measures to improve its score in payment terms as well.
This is an eye opener for management for effectiveness in sales with same set of
customer & sales force.

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8. CONCLUSION:

 RFM (Recency, Frequency & Monetary) methodology can be use to analyze

customer ranking with different parameters in Alteryx tool.
 The customer ranking system can be used to improve the effectiveness
within the existing set of sales force.
 By creating eco system with SAP, Ranking model & Tableau, we can get
live rankings for each individual customer according to requirement.
 The management can take required measure to increase the share of business
by Gap analysis between SOB & actual potential of customers.
 There is immense scope of business analytics in corporate these days.

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 9. LIMITATIONS:
In undertaking this study, a number of problems were faced. Thus the study has
several limitations. The limitations are:
 Data is not aligned
I had to align all data columns according to tool requirements, it was time
consuming process.
 Duplicity in data points
I had to clean the duplicates data points at multiple levels.
 Segments not uniformed
For single FY I had to make segments uniform in front of each customers.
 Data Incomplete in SAP
The data was not complete for every customer; approximately 3 to 4 % customers
were left due to tool limitations.

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10.RECOMMENDATIONS:

1. The analysis part is over i.e. “Customer Ranking”, to make worth-full this
analysis, it should be use to increase the business.

2. Gap Analysis - Mapping for top scorers in each segment.

3. Increase in Share of Business activities.
A. Why there is GAP between SOB & Potential of customer
B. How can we minimise this GAP?
C. What are the activities should be part of this exercise?
4. To make live ranking system, data must be aligned according to Alteryx &
must be complete in all sense.

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11.BIBLIOGRAPHY:

For the RFM methodology & Alteryx Tool for trial version
 www.google.com/rfm/methodology
 www.alteryxtool.com

Links:

 www.alteryx.com

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12 REFERENCES:

1) Mr. Rajeev Garg A V P, Sales Head (JSL) 9560584433

2) Mr. Himanshu Saxena Sr. Manager (JSL) 9811910773

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