mjunction: Dawn of value-added supply chains Date:   Tuesday , November 03, 2009 Internet nightmares and runaway stock prices haunted every firm in 2001. The casualties in the web sphere began to pile up from the shakeout in eCommerce and financial experts found it easier to liquidate a factory than a Web page. The two competitors, private sector giant TATA Steel and public sector behemoth SAIL (Steel Authority of India Limited), did not expect such a calamity when they joined hands to foray into the internet space during the dotcom boom. The two rivals leveraged on their experience to tight ship the secondary steel transaction via the use of technology and Internet. They had the Rs.20 crore business plan intact with a well-laid cash flow strategy. But their fate had some other plans and before the paper works turned into an actual business, the dot com bubble busted. Investments shrunk and the cash-doomed promoters left their ventures astray. Association of the names like Tata and SAIL could not reverse the trend and the third promoter ditched the foray in the last moment. Left with an actual cash of Rs.8 Crores, the company was destined to be in losses. The competency in the field helped them to remain undeterred and aiding them in the venture, PricewaterhouseCoopers (PWC) re-structured the business model based on revenues to be generated by advertising. How would a business run on advertising, when the market lacks faith in the business platform? The same thought struck the promoters and discarding PWC’s model they shifted their focus from advertisement based to transactional based revenue model. So, emerged mjunction services limited, an eCommerce portal with a core focus on steel transaction and rebuilding supply chain aided by technology. Today, mjunction boasts of an annual transaction value of Rs.15,000 crores and more than Rs.52,000 crores since inception. Had the third promoter contributed his share of Rs.2 crores, in six years it would have grown 60 times to Rs.120 crores. “Innovation became the cornerstone for us to survive. We have created the value in the market without the resources, as we were determined not to offer any free service, unlike our competitors in the sphere,” said Viresh Oberoi, Managing Director and Founder CEO of mjunction. Founded in 2001, the company has re-created the supply chain with the blend of technology through being innovative, fair and transparent to generate and deliver long-term sustainable value to its clients and the industry. The way secondary steel and other commodities like coal are sold is very transparent, convenient and efficient. It has added considerable amount of value not only to the sellers of certain commodities but to the entire constituent of that supply chain, whether they be the buyers, the transporters, the financers amongst several others. Through strategic innovations like the first Online Auction of Vintage & Classic Cars or auction of Indian Steel and Wire Products’ (ISWP) old and used aircraft, the company has unlocked the best price for the sellers. However, the show wasn’t only seller sided. For the classic cars’ auction, the bidders were no ordinary car consumers; rather the company identified 60 collectors and connoisseurs of vintage cars. The process ensured a two-way satisfaction as the seller received the maximum profit, while the car could satiate the buyer’s specific interest. It is this value and credibility, which has helped the company to rope in 52 clients in the country and emerge as one the world’s biggest steel market within a short span of time, successfully outsmarting the likes of Corbus and Areva in the steel market. As an obvious forward integration and offering more value addition for its clients, the company launched fulfillment services involving crucial activities like financing, logistics, inspection, knowledge amongst others. They have spanned across the entire eCommerce spectrum through their different portals. metaljunction facilitates eSelling Services, buyjunction provides eSourcing services and valuejunction for the eSelling of idle assets. Though the core focus is in steel and coal, the company is well aware of the market trends and has aptly ventured into the B2C retail space through their online store straightline.in that caters to electronics and consumer durables. Over the last eight years, as it gained the confidence of the clients, mjunction way exceeded its plan and successfully diversified its business. The motto was not only to diversify but to be the pillar for value added services, which justifies the launch of coaljunction an eAuction service for coal. The step eliminated the middleman and terminated the coal mafia. Today, mjunction has service offerings spanning the entire eCommerce spectrum and operates through – metaljunction.in, buyjunction.in, coaljunction.in, valuejunction.in, financejunction.in, autojunction.in, straightline.in and mjunctionedge. Re-modelling Human Resource For any company to create the valuable impact, human resources stands an undeniable factor and mjunction is empowering its employees, who reigns the base of the company. Its 386 member team, who push for growth through redesigning structures backed by technology, helped the ecommerce firm to refurbish the archaic processes into value-creating ones. The company assists its employees unveiling knowledge management forums, wherein the volunteers get the platform to steer their ideas. The concept of Fun Team, which allows the employees to run their miniature companies within mjunction, helps them to build a strong base in the field of research and analysis in sectors like metals, minerals, steel and scrap. The employee improvement has been an ingrained priority for the promoters, even before the mjunction was formed “When I joined Tata Steel, I had no engineering or a metallurgy background. So, it was like I was a wrong fit in a square bowl. As I brought passion and innovation to the table, my academic lacking fell short and the company assisted in my all-round development, through strengthening the metallurgy knowledge base as well as the management base,” recalls Oberoi. In Oct 2000, Oberoi was selected to be the CEO of Tata Steel’s latest joint venture to eTransform the steel supply chain. He has efficiently managed his role and today mjunction is the world’s largest electronic steel marketplace. The Kolkata headquartered company realized that through innovative utilization of its expertise and infrastructure, it can effectively transform the other side of the supply chain, namely the procurement side. This led the company to launch its eProcurement service, buyjunction, which has now evolved as one of the leading players serving not only the steel industries but industries as diverse as Energy, Chemicals, FMCG. mjunction has established a strong presence within India with its 12 branches spread all across the country. Now, the company is all set to expand its footprint beyond India and by end of 2009, it is sure to rope in foreign clients. Through this effort the company reaffirms its belief in creating value, as it expects to remain informed of the global practices and utilize the learning to serve its clients better.