biicatid may nOt be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means with f e copyright holder. Reproduction of this material is not covered under authorization by any reprod ' \fPage 2 9317E008 R company made every effort to supply its clients with materials that were shipped by barge to locations that were close to ports (see Exhibit 2). Shipping by barge reduced the time needed to transport material and oliered an additional benet of reducing in the company's carbon footprint. STEELMAKING AND LOGISTICS JSW manufactured steel using iron ore, coke, and limestone, either in a blast furnace or in a Corex fumace, which was a more environmentally friendly altemative to the blast fumace. The end products of reduction and melting were hot metal and slag. The hot metal was processed further, by blowing it with oxygen to remove the unwanted carbon. Finer elements, such as vanadium, nickel, cobalt, and titanium, were added to enhance the features of the steel and to make it suitable for specific applications. The steel slabs were rolled through a critical method to manufacture hotrolled coils, which were then shipped to customers who manufactured pipes and tubes. The customer put the hotrolled coils through a tlattener and used a special technique called submerged arc welding to manufacture pipes. This process required clean coils to avoid strains on the pipes and tubes produced. The pipes were further processed and used to connect water resources, natural gas, and fuel lines around the world. The timely supply of these hot-rolled coils to the customers was obviously an important concern for JSW's logistics department. The logistics team used different transportation modes for different locations The customerin this case, JSAWwas located in the Mundra region of Gujarat, so the closest p011 was Mundra, and the closest railway siding was Gandhidham. The material for J SAW products had always been transported by rail route from the time the two companies started doing business together; however, with JSW's recent focus on a responsible supply chain, the sea route was also considered as a viable altemative. Indian Railways charged JSW based on a price list that was approved every year, and .iSW's accounting department shared this price list with all other departments within the company so they could refer to it to make cost-effective shipping decisions (see Exhibit 3). The Indian railway system classified its rake services based on the number of rail wagons attached. For ayvastegan in OMPT-620 at Unknown Organization from 4/11/2023 to 6/26/2023. 6 outside these parameters is a copyright violation. decisions (see Exhibit 3). The Indian railway system classied its rake services based on the number of rail wagons attached. For example, 45 wagons constituted a BOXN rake and 59 a JUMBO rake. A JUMBO rake could carry 3,500 tons (3,175 tonnes),2 While a BOXN rake could carry 2,500 tons (2,267 tonnes), Indian Railways' monopoly gave it the authority to sanction the type of rakes it supplied. The chance of attaining a JUMBO rake on request was just 30 per cent since the railway operated only a small number of JUMBO rakes and availability was limited. Prior to 2014, Kumar's experience had taught him that the railway authorities usually gave permission for the requested number of BOW rakes 80 per cent of the time, and 20 per cent of the time, the allocation was one BOXN rake less than the number requested. Also from experience, Kumar knew that, for a rail shipment, the odds of late arrival were approximately 30 per cent. South West Port Ltd., Goa, operated the nearest port to Bellary. This port was mostly used for the export of hotrolled coils, coldrolled coils, steel plates, and steel sheets to international customers; it was also used for the import of raw materials such as coal and iron ore. Gates 1 to 4 were used for exports, gates 6 and 7 for domestic activity, and gates 8 to 10 for imports. Because South West Port Ltd. was owned by J SW Group, Kumar had always enjoyed the availability of the required number of rakes between the plant and the port. Most of the barges that entered this port for domestic purposes were carrying coal shipments, and thus, a signicant amount of coal and iron dust could damage the surfaces of the coils that were being transported. 21 ton = 2,000 pounds or 0.907 tonnes. 9317E008 Authorized for use only by Araz Payvastega Use outside t Page 3 9817E008 The vendors who supplied barge trans ($30 per ton) beyond the normal del only 30 per cent. portation that offered clean storage space (Class 1) charged a premium ivery charges, but the availability of such clean-storage barges was Kurnar knew that he could place a request with port ofcials to have Class II vendors provide clean storage space on their barges. In such a case, the vendors would charge an additional 325 per ton, and Kumar estimated only a 75 per cent chance that the cleaning would actually be done. He remembered that Class I vendors had a record of 80 per cent timely delivery, whereas the Class II vendors had a record of only 35 per cent. The combined cost oftransporting coils to the port in Goa by rake and then to the Mudra port by barge was approximately 22 per cent cheaper than that of transporting the coils directly by rail. J SW's past records showed some variation in activity times across both modes of transportation (see Exhibit 4). KUMAR'S PROBLEM The quantity of steel ordered by J SAW was 7,000 tons (6,350 tonnes), of which 5,000 tons (4,535 tonnes) had already been produced; the remaining 2,500 tons (2,267 tonnes) was under production and was scheduled to be ready for dispatch by 10 pm. that same day, Sunday. The conditions for delivery of the coils were decided through a memorandum of understanding, and a negotiation document had been drawn up between JSW and JSAW. All terms and conditions were clearly dened for every project (see lixlribit 5). The intricacies of this logistics problem were growing with every minute that passed, and Kumar knew he needed to make his decision in less than 12 hours. Ile was under tremendous pressure since this was the last week of the quarter. As well, timely delivery to JSAW was high on Kumar's list of priorities, but the logistics department could not conrm the availability of JUMBO or BOXN rakes until the next day, Monday, at 10 am. As he pondered the situation, several important questions ran through Kumar's head: Would it be best to wait until Monday morning to get conrmation on the rail rakes? What il'he could not obtain the required type or number he needed? Should he talk to the port ofcials now and at least try to get a confirmation on rastegan in OMPT-620 at Unknown Organization from 4/11/2023 to 6/26/2023. utside these parameters is a copyright violation. \fPage 6 9B17E008 \\ EXHIBIT 5: MEMORANDUM OF UNDERSTANDING BETWEEN JSW STEEL LTD. AND JINDAL SAW LTD. This letter is issued by JSAW Ltd. (henceforth mentioned as the rst party) to JSW Steel Ltd. (henceforth mentioned as the second party) in _ order to put forward the terms and conditions for the material supply at the Gandhidham project. Material to be provided: Hot-Rolled coils (HRC) Grade of Steel: ASTM A53 Packaging conditions: 2 circumfe rential and 2 axial steel straps Labels: 1 on ID ( inner diameter) and 1 on OD (outer diameter) Clause 1: The rst party will receive the material provided by the second party, adhering to the following conditions only: Quantity Full delivery of Delivery between Delivery between Delivery less than delivered ordered quantity 80% to 99% 70% to 79% 70% i Price (in 3) J 30,000/ton 28,000/ton 25,000/ton | Nil | Clause 2: First party claims the rights of acce throughout the supply for the project. An of the goods paid to the second party. pting the material in clean and acceptable conditions y deviation may result in deduction of 10% of the original value Clause 3: The rst party also claims the delivery of material on the mutually accepted dates (12 days from the date of order booking and conrmatio n from second party via email). Any deviation from the above conditions will result in deduction of 10% of the original value of the goods paid to the second party. Clause 4: The material will be received at the factory premises only, and any handling/transportation charges will be borne by the second party. All the invoices and transi t documents should be received by the rst party 2 days before the material reaches. This is for discounting ofthe bills and other nancial follow-ups. l Clause 5: The rst party will pay the second party the entire invoice amount according to the above- mentioned clauses on or before 3 days from the date of material received. Note: 3 = [NR = Indian rupee; 31 = US$0.0165 on September 1, 2014. Source: Company records. Payvastegan in OMPT-620 at Unknown Organization from 4/11/2023 to 6/26/2023. ise outside these parameters is a copyright violation