Capgemini Super Techies Show Season 2: The JSW Challenge presentation
The JSW Challenge
Suggest an approach to provide a solution to meet JSW’s growing
• JSW is a $11 billion company and is headquartered in Mumbai, India
• JSW has diversified interests in Steel, Energy, Cement, Ports, Mining and
• JSW Steel is India’s leading producer of steel with a capacity of 14 million tons
per annum (MTPA) and is typically known for its quality
• World Steel Dynamics has repeatedly ranked JSW as the lowest-cost producer
of steel in the world
Background on Challenge
• JSW effectively uses a homegrown customer network, involving online auction,
for sales of its secondary steel products. This has been a successful program for
over a decade.
• In view of the success of this program, JSW proposes to create a similar system
and network of suppliers to address the procurement process
• Many large enterprises have opted for supplier networks created by leading
players in the market
• JSW has institutionalized a Central Procurement process for high value
procurements and the other procurements happen in a localized
• JSW gets to deal with only a set of approved vendors all the time –
thus, there is no option of price discovery or information on vendors
not used in the past
• This process involves manual steps, which need to be minimized
• Individual business units may tend to work too independently leading
to governance issues and lack of optimality.
• JSW is looking for a volume and scale advantage
The Challenge Statement
JSW is looking for a “Lite” solution — One that could enable them
to start with a small network and then keep growing it
The network should be completely homegrown — no software
licenses required and managed completely internally
• In this scenario, is it better to use a third-party supplier
networks or develop JSW’s own system and grow the network
• What is the right way forward – Buy or Build?
The Challenge Statement - Details
• Multiple solutions are available to enable supplier network in areas of
capital purchase, direct materials, MRO, services, etc.
• Multiple IT-enabling processes, such as sourcing, negotiations, procurement,
POs, invoicing, payment, etc., are available in the industry. Do you suggest a
phased approach or a big bang approach for processes and relevant solutions?
• Should the proposed solution be integrated to existing systems at JSW or be
standalone? Should it be a hosted solution or be maintained behind the JSW
firewall? Should it be a build or a buy scenario?
• Will it be a pure IT solution or come bundled with other services?
• The challenge has to be looked at from the point of view of usefulness,
practicality, scalability, relevance to JSW, cost, etc., and a roadmap/business
case (qualitative) has to be presented to the panel
• The cost and time perspective is of utmost importance to this challenge
Important Points to Remember
• Building a supplier network is a time-consuming process
• Networks available in the market already have a million suppliers
but are expensive
• If it is JSW’s own network, there is the additional advantage of
reasonable confidentiality of transactions, especially on pricing
• A JSW owned network will not incur additional costs when adding
more suppliers or users.