Buyjunction connect June 2013

June, 2013

volume 3 issue 3

Vinaya VarmaVice President,buyjunction

from thedesk of

With the blistering heat on, the Indian meteorological department has given another forecast for a normal monsoon.While the agri front does not look too good, on manufacturing and industry numbers continue to be bleak. Not only are IIP numbers low, the Markit PMI for April has reported the lowest index since November 2011. The RBI credit data also does not show any pick up in credit for all sectors. Auto sales for the past year posted the first decline in a decade and the numbers for April also show lower sales compared to last year. Governance to stimulate investment has been listed as a critical factor for revival in growth. RBI not set to accommodategovt on dramatic rate cuts, slow steady drop expected this year and stress continues in consumer prices, especially food.

Government is waging a war with inflation. Commodities prices are falling. Free trade agreements are being signed. Competition commission of India is preventing companies from fixing selling prices. This will put a lot of pressure on domestic industry to maintain market share and top line prices. They will have to tighten their belts and become even more cost competitive. Though government is announcing incentives and measures to boost exports companies need to be competitive by controlling their costs.

To survive and to register growth and profit, an increasing number of businesses are now looking at optimising their operations to achieve maximum efficiency on continual basis by outsourcing certain functions to specialist organisations. buyjunction’s array of procurement services aim at delivering immediate, measurable results that can lead to guaranteed savings, reduction in cycle time and significant positive impact on profitability by freeing up the client’s bandwidth.

With the third issue of buyjunction connect we try and bring to you a synopsis of current economic scenario, industry trends, market analysis. The issue offers tactical advice which should help you understand the key focus areas for your procurement needs, given the existing market situation. The newsletter captures a few of buyjunction’s success stories in some of the core procurement categories that we specialise in. We have provided the list of the various categories we cater for our 100 plus clients.

We hope that this newsletter will help you understand how we add value to our client’s businesses through innovation and in-depth analysis of their requirements. We only strive to create win-win deals for you.

Regards,

Vinaya Varma,Vice President, buyjunction

1

Growth is expected to revive gradually going into the next fiscal; with an estimate for GDP growth of 5.9% – 6.0% in FY14. This expectation would ride on the back of normal monsoons giving a good harvest, increase in investments in a favourable interest rate regime and gradual recovery in industrial production. Above all it is assumed that the

government will expedite projects that have been held up and also start spending on capital projects, which has hitherto been held up on account of fiscal constraints. This will also be supported by affirmative action by the RBI, though the timing could be more during the second half of the year.

Indian Economy GDP Growth to see Modest Improvement

Exhibit 1: GDP Growth (%)

Source: CSO, CARE

3.0

5.0

7.0

9.0

6.7

FY 09 FY 10 FY 11 FY 12 FY 13(e) FY 14(f)

3.0

5.0

7.0

9.08.6

9.312.0

6.25.0

6.0

12.0

(e) - Estimate, (f)- Forecast

3.17.1 GDP Growth by sector (%)

Source: CIEC Data Comapny (accessed 23 March 2013)

0.0

3.0

6.0

9.09.3

2007 2008 2009 2010 2011 2012

0.0

3.0

6.0

9.08.6

12.012.0

6.7

9.36.2

5.0

AgricultureIndustryServicesGDP

3.17.1 Fixed Invesment Growth (%)

0

6

12

18

0

6

12

18

2005 2006 2007 2008 2009 2010 2011 2012

Source: CIEC Data Comapny (accessed 23 March 2013)

2

Agriculture to Revert to Normal Trajectory

With several measures taken by the government to improve flow of agri-credit, there is an expectation of more pro-active sowing that could boost growth in agricultural sector to 3.0% in FY14. However, this growth remains contingent upon normal monsoons that impacts both sowing and harvest during the year.

The Indian economy GDP growth slowed to 5.3% for the third quarter in 2012. Despite the instability, HSBC has forecasted the GDP growth at 5.4% in FY’13 (up from 5.1% projected earlier) and 6.2% (unchanged) in FY’14.

Exhibit 2: Growth in Agriculture and Allied Sector (%)

0.0

2.0

4.0

6.0

FY 09 FY 10 FY 11 FY 12 FY 13(e) FY 14(f)

8.0

10.0

0.0

2.0

4.0

6.0

8.0

10.0

0.1 0.8

7.9

3.6

1.83.0

Source: Ministry of Agriculture, CARE(e) - Estimate, (f)- Forecast

Industrial Sector to Revive

Industrial activity is expected to pick up in FY14 and grow by 4.0 – 5.0% with mining projected to grow by about 2.0%, electricity by 7.0% and manufacturing activities in the range of 4.0 – 5.0%. This improvement

in industrial sector would be aided by an increase in government approvals for project investments that are currently in the pipeline and recovery in exports as global demand picks.

-469.01

Jan/ 11

FY 14(f)FY 13(e)FY 12FY 11FY 10FY 09%

Table 1: Growth Industry (%)

Industry 4.1 10.2 8.7 2.7 2.0 4.0-5.0

of which

Mining & Quarrying 2.1 5.9 4.9 -0.6 0.4 2.0

Manufacturing 4.3 11.3 9.7 2.7 1.9 4.0-5.0

Electricity 4.6 6.2 5.2 6.5 4.9 7.0

Source: CSO, CARE (e) - Estimate, (f)- Forecast

3

Moderation in Inflation to continue in FY14

2012

Overall inflation is expected to moderate in FY14, although countervailing forces from an increase in minimum support price (MSP) shall restrict the decline.

WPI is expected to settle in the range of 6.0% – 6.5% (average) and CPI inflation to 8.0% – 9.0% (average) during the year.

Exhibit 3: Annual Trends WPI & CPI (%)

Source: CSO, CARE

3.0

5.0

7.0

9.09.0

FY 09 FY 10 FY 11 FY 12 FY 13(e) FY 14(f)3.0

5.0

7.0

9.0

12.4

11.0 10.5 11.0

(e) - Estimate, (f)- Forecast

13.0 13.0

8.4

109

WPICPI

8.1

3.8

9.68.9

7.56.8

The annual rate of inflation, based on monthly WPI, stood at 4.89% for the month of April 2013 (over April 2012) as compared to 5.96% for the previous month and 7.50% during the corresponding month of

the previous year. Build up inflation rate in the financial year so far was 0.53% compared to a build-up rate of 1.55% in the corresponding period of the previous year.

Source: tradingeconomics.com | Ministry of Commerce & Industry

Jul/12

5.5

6

6.5

7

5

4.5

Jan/13

7.5

8

8.5

Oct/12 Apr/13

India Inflation Rate - Annual change on Consumer Price Index

5.5

6

6.5

7

5

4.5

7.5

8

8.5

4

The Prime Minister's Economic Advisory Council (PMEAC) projected the economy to grow at 6.4% in the new financial year that began on April 1. Controlling the current account deficit (CAD) remains the main concern now, although he estimated it to narrow down to 4.7% of GDP in 2013-14 compared to 5.1% of GDP in the previous year. As inflation comes down, it will create more

space for monetary policy to support growth. Achieving the production and capacity creation targets in the key infrastructure sectors such as coal, power, roads, railways and ports, which are largely in the public sector or on public-private partnership domain, will act as a great stimulus to private investment and faster growth.

5

7.2

7.4

7.6

7.8

7.2

8

8.2

The Indian government will enter into free trade agree-ments with countries to fight domestic inflation. They have signed with Korea and Japan and are planning to sign up with Europe. Thailand and 15 Asia-Pacific partners will start talks in May 2013 on a free trade zone that would cover more than half the world's population.

One could look forward to the broadening and deepen-ing of existing free trade agreements and envision the Regional Comprehensive Economic Partnership (RCEP) to be a platform for future trade and investment integration in Asia and the rest of the world.RCEP covers ASEAN's

10 member countries - Thailand, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Vietnam - as well as Australia, New Zealand, India, China, Japan and South Korea.

The RCEP provides an important platform for building trade liberalisation within the Asia-Pacific, which is the world's fastest growing region. The initiative will be very important as it includes the three major drivers of emerging markets growth - China, India and ASEAN.This will put a lot of pressure on domestic industry to main-tain market share and top line prices.

India Balance of Trade

India’s trade deficit rose in April from the same month a year earlier as imports of gold and silver increased more than twice, underlying an improvement in exports. India's exports rose 1.6% from a year earlier to INR 1314 billion, while imports rose 10.9% from a year earlier to

INR 2281 billion leaving a trade deficit of INR 967.2 billion, according to trade ministry data. Though govern-ment is announcing incentives and measures to boost exports,companies need to be competitive by controlling their costs.

5

7.2

7.4

7.2Free Trade Agreements

5

India Exports - Exports by Months (INR Billion)

Source: tradingeconomics.com | Director General of Commerce

Jul/ 12 Oct/ 12 Jan/ 13

1232.37

1347.53

1390.13

1261.531215.4

1302.14

1215.631221.48

1359.5

1389.82

1678.36

1314

Apr/ 13

1412.06

India Imports - Imports by Months (INR Billion)

Source: tradingeconomics.com | Director General of Commerce

Jul/ 12 Oct/ 12 Jan/ 13 Apr/ 13

1958.9

2218.14

2004.53

2250.8

2078.59

2282.61

2377.59

2277.962325.24

2475.94

2214.49

2239.55

2281.1

0

10000

20000

30000

40000

50000

60000

India Balance of Trade - Balance of trade (INR Billion)

Source: tradingeconomics.com | Ministry of Commerce And Industry

Jul/ 12 Oct/ 12 Jan/ 13

-727.5

-886.05

-577.3

-859.79 -867.98-987.29

-1111.46-1056.48

-965.73-1086.12

-561.19

-967.2

Apr/ 12 Apr/ 13

-802.43

6

7

-1600

-1500

-1400

-1300

-1200

Apr/ 12

-1700

20000

60000

-2600

-2200

Apr/ 12

58

-2600

-2400

-2200

-2000

-1800

The financial year that just ended was tumultuous for the economy, but business is now slowly taking a turn for the better. A government trying hard to revive the economy, moderating headline inflation, and softening interest rates have helped improve business sentiment for the third successive quarter.The Business Confidence Survey for the January-to-March quarter of 2013 found that economic conditions

are picking up thanks to higher demand. On a scale of 100, the confidence level is at 54.5 in the first quarter of 2013, up from 53.8 in the October-to-December period and 52.4 in the three months before that. Market research agency C fore quizzed 500 CEOs and CFOs across 12 cities for the survey. The outlook for the second quarter of 2013 also looks encouraging with more than a third of the respondents expecting better prospects.

Optimism Rises for consecutive Third Quarter – Business Confidence Survey

IN GOODSPRITSBusiness Environment hasimproved for the third quarter in a row.

57.7Jan-Mar 2013

55.5 | 56.8Jul-Sep ‘12 Oct-Dec ‘12

54.2Jan-Mar 2013

51.9 | 52.3Jul-Sep ‘12 Oct-Dec ‘12 50.6

Jan-Mar 2013

49.5 | 50.2Jul-Sep ‘12 Oct-Dec ‘12

Light Industry

Services

Heavy Engineering

BCI by SectorThere is steady improvementin sentiment across all sectors

49.3Apr-Jun 2012

52.4Jul-Sep 2012

53.8 54.5Oct-Dec 2012 Jan-Mar 2013

MONTH

BigBusiness

MediumBusiness

MONTH

SmallBusiness

MicroBusiness

5050.350.9

53.253.4

54.4

54.455.656.7

52.353.754.9

Jul-Sep 2012 Oct-Dec 2012 Jan-Mar 2013

BCI by Size

Business Confidence Index on a scale of 100

According to the business confidence survey, 45% respondents feel the Budget will have a positive impact on their companies in the current quarter. Only 17% say the Budget will hurt them.The survey shows that while 29% expect their business prospects to worsen during the quarter through June compared with the previous three months, 39% expect an improvement.

The March 19 rate cut by RBI has also enthusedcompanies. Nearly a third of the respondents of thesurvey expect to benefit from the reduction in rates.

The Optimism is shared by businesses of all sizes.

8

The survey shows also that about a third of the respondents feel demand conditions will get better. Not everyone is hopeful. In the absence of any major

ROAD TO RECOVERY

Overall EconomicConditionsNearly half felt conditionsstayed the same duringJan-March

24

47

233

Subs

tant

ially

Wor

se

Mod

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ely

Wor

se

Subs

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ially

Be

tter

Mod

erat

ely

Bette

r

Sam

e/N

o C

hang

e

Hiring ConditionsMore than quater said hiring conditions improved

Substantially Worse

Moderately Worse

Substantially Better

Same/No Change

Moderately Better

48

23

5

177

Figures indicate percentageof respondents

Finance AvailabilityA Majority saw no change in availability of funds.

5

1711 14

53

Demand ConditionsOver a third said demand improved

6198

41

26


Substantially Worse

Moderately Worse

Same/No Change

Moderately Better

The Business Scenario improved in the January-March 2013 period over the previous quarter.

investment plans, hiring activity is expected to be muted. The survey shows that 51% respondents expect no major change in recruitment trends in the current quarter.

Profit MarginsA majority felt profit margin stayed the same.

52

21

16

65 Substantially Worse


Moderately Worse

Moderately Better

Same/No Change

9

32

29 10

22

7

Moderately worse

Substantially worse

Moderately Better


Same/no change

THE AUDACITY OF HOPE

Companies look forward to a better April-to-June

quarter.

Nearly two in five expect economic prospects to improve

Economic Prospects

733

Overall Financial Situation

Substantially Worse

Moderately Better

Moderately Worse


Same/No Change 378251911

More than a third expect improvement

Substantially Worse

Moderately Better Moderately Worse


Same/No Change

30 24 6

Productions Levels A third expect output to increase

Availability of FinanceA majorityexpect no change

Same/No ChangeSubstantially Worse

Moderately Worse

ModeratelyBetter


54

1614

12 4

.........

.........

..........

.....

10

The survey shows that 51% respondents expect no major change in recruitment trends in the current quarter.

Order bookA Quarter of respondents feel order bookswill be healthier

Subs

tant

ially

Wor

se

Mod

erat

ely

Wor

se

Subs

tant

ially

Be

tter

Mod

erat

ely

Bette

r

Sam

e/N

o

Cha

nge

Hiring in retail, telecommunications, power and infrastructure industries will take time to recover due to sector-specific problems.

InvestmentsTwo in five do not expect any change

40

27

20

8 5Substantially

Worse

ModeratelyWorse


Moderately Better

Same/No Change

Substantially Worse

Moderately Better

Moderately Worse

Same/No Change

5197

2247

Sales PickupOver three-fourths expect sales to rise or stay stable Substantially Better

SubstantiallyWorse

Moderately Worse


Cost of raw material

Nearly half expect input costs to stay

almost the same 13

4

26

49

8

Same/NoChange

Moderately Better

3

24

9

17

47

Figures indicate percentage of respondents

11

Subs

tant

ially

Wor

se

Mod

erat

ely

Wor

se

Subs

tant

ially

Bette

r

Mod

erat

ely

Bette

r

Sam

e/N

o

Cha

nge

Hiring PickupThe majority expects no uptick inhiring activity

Subs

tant

ially

Wor

se

Mod

erat

ely

Wor

se

Subs

tant

ially

Bette

r

Mod

erat

ely

Bette

r

Sam

e/N

o

Cha

nge

Selling Prices PickupMost feel sellingprices will beunchanged

Profit PickupAlmost three-fourths feel profit will rise or stay stable

5 6 1325

51

8

18

12

23

39

Subs

tant

ially

Wor

se

Mod

erat

ely

Wor

se

Subs

tant

ially

Bette

r

Sam

e/N

o C

hang

e

Mod

erat

ely

Bette

r

58

9 710

16

Impact of Union Budget on corporate performance More than two in five expect to benefit from the budget

38 35 10 11 6

Impact of RBI’s monetary policyNearly a third of respondents expect to benefitfrom rate cuts

Substantially Worse

Moderately Better

Moderately Worse

4730

217

4


Same/No Change

Figures indicate percentageof respondents

Sam

e/N

o C

hang

e

Mod

erat

ely

Bette

r

Subs

tant

ially

Bette

r

Mod

erat

ely

Wor

se

Subs

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ially

Wor

se

12

Big Boost for Infrastructure Development

The Infrastructure is one of the key determinants of economic growth: good public infrastructure spurs productivity and growth, while its absence poses a bottleneck to economic growth.

The current Plan has high stakes in terms of consulta-tions and the public funds being promised for expendi-ture. By far, the most debated and consulted Plan: some 900 civil society groups gave inputs while 165 steering and working groups deliberated over its details for over two years. A key area of growth under the new Plan, private sector will be an equal partner with governments in implementing infrastructure projects. Indian govern-

ment has taken several steps to accelerate implementa-tion of major infrastructure projects making it clear that India remains open and welcoming to foreign investment. India will require $1 trillion investment in infrastructure during the 12th Plan period (April 2012 to March 2017) to sustain over 8% GDP growth.

The 11th Plan spent INR 23,85,980 crore on infrastruc-ture. The new plan proposes to spend INR 56,31,692 crore. Private sector will contribute INR 27,13,853 crore of the proposed amount. It will create new opportuni-ties for competitive companies.

Infrastructure Eleventh Plan Twelfth Plan

Projected* Achieved* (%) Achievement Projection**

Grand Total (` Lac Crores)

20.56 19.08 93 56.32

514@ 477@ 93 1126@@

*` Lakh Crore at 2006 - 07 Prices; **` Lakh Crore at Current Prices

@40` = 1US$; @@50` = 1US$

Grand Total (US $ Billions)

Source: Planning Commission - 12th Plan Document

13

BUDGET ALLOCATIONS

PROJECTED PROJECTED PROJECTED

PROJECTED PROJECTED PROJECTED

PROJECTED

PROJECTED PROJECTED PROJECTED301711

51 40 189

104101300

194

ACHIEVED

ACHIEVED

ACHIEVED

ACHIEVEDACHIEVEDACHIEVED

ACHIEVED ACHIEVED

ACHIEVEDACHIEVED

91

4949155

24 9 77

1376

PROJECTED167ELECTRICITY

PROJECTED63IRRIGATION

PROJECTED66RAILWAYS

PROJECTED79ROADS & BRIDGES

PROJECTED36WATER SUPPLY &SANITATION

PROJECTED22PORTS

PROJECTED65TELECOMMUNICATION

PROJECTED4OIL AND GAS

PROJECTED8AIRPORTS

PROJECTED8STORAGE

TOTALFIGS IN $ BILLION PROJECTED

112612 Plan 11 Plan

ACHIEVED

PROJECTED

447514th th0

6

12

18

14

Procurement Focuses on Innovation in 2013

Procurement teams expect to spend more time on innovation and activities that support new-product development this year.

Of the key procurement performance-related issues identified by organizations participating in the Hackett Group study, 2013 Procurement Key Issues: Going Deeper and Broader to Deliver Borderless Procurement Services, more organizations report that participating in innovation activities now is critical. In fact 76% cite innovation as a major issue in the 2013 Procurement Key Issues study. The figure a year earlier was 44%. Reducing or avoiding purchased costs remains the most critical issue, according to 90% of participating organizations. Expanding procurement’s scope and influence is also critical.

“Procurement is going to be more focused on innovation and other areas that support top-line line growth,” Chris Sawchuk, The Hackett Group's Global Procurement Advisory Practice Leader and Principal, “These types of things have become more prevalent as key issues or focus areas for procurement, and it’s not relegated only to manufacturing businesses.”

Participating in the study are a cross section of organiza-tions in both manufacturing and service industries in North America, Europe and other regions.

The study also outlines four imperatives for procure-ment in 2013.

1) The procurement has to be more flexible to handle the uncertainty that drives volatility in the marketplace. At the same time, procurement is expected to add a lot more value to the organization.

2) The procurement is not as “globalized” as it could be to support the organization’s worldwide operation. Globalized means it is “to have a consistent standard worldwide and to manage it well.”

3) Identifying the trend toward integrating other aspects of the procure-to-pay process within the procurement function. That can mean having procure-ment oversee accounts payable (AP) within the function or having AP report to procurement. “Either way, someone has to have end-to-end accountability for the performance of the end-to-end process,”

4) Demonstrate that procurement is beginning to focus on and build capability around data generated by procurement, i.e., supplier market intelligence. Sawchuk suggests procurement create Centers of Excellence for this expertise so that it can be shared among the team’s category managers.

The buyjunction Solution

Due to the increasing pressure on profit margins, it is necessary for organizations to cut costs and optimise their processes to increase efficiency.

While organisations cannot directly impact macro-economic or external factors, they must bring control where they can. This includes:

Taking help of consultants/experts to learn best practices

Reducing cycle time

Ensuring the best deal to ensure savings

• ••

0

6

12

18 buyjunction has been helping many organisations save considerable cost, improve cash flow, gain efficiency in operations and inventory and achieve flexibility by shortening cycle times.

With its services like Category Management, Assisted Sourcing, Reverse Auctions, Managed Sourcing, buyjunction has handled over INR 21,710 Crores of procurements in FY13, a total in excess of INR 58,000 Crores since inception.

Streamlining existing processes

Outsourcing functions/processes and free bandwidth

Bandwidth management- Improving productivity and re-allocating resources where necessary

Taking help of consultants/experts to learn best practices

• • •

•

15

Packaging All kinds of Packaging related items, Bags, Cartons, Seals, Straps, Wooden Box etc.

organic & inorganic chemicals, Gases,Refractory raw materials & All type of Minerals etc.

Mineral's & Chemical

Surface, Sea, Air, Freight Forwarding etc.Logistics

All types of refractories. Refractory

Electricals Cables, Motors , Electrical Consumables, Electrical Testing Equipment's ,Switches ,panels etc.

Annual Maintenance Contracts etc.Service Contract

Coking & Non Coking Coal, CPC etc.Coal & Coke

Computer, Servers, Office Equipment's , Stationary, Travels etc.IT, Travel & Office

CATEGORY DESCRIPTION

Projects engineering/Capex Item

Engineering & Designing , Civil , Mechanical, Electrical, Infrastructure Projects,Material Handling Equipment, Capital Goods, etc.

Flat , Long, Semi Finished, Alloy, All Ferrous & Non Ferrous Scraps etc.

Steel & Scraps

All Mechanical Consumables, Spares, Assembly, Pipes, Fabrication, Castings, Forging, Electrodes, Valves etc .

MRO- Process Consumable

Ferro Alloys & Non Ferrous MetalFerro Alloys & Non Ferrous Metal

Categories We Sourced

16

Top 10 Categories sourced in the Quarter Jan'13- Mar'13

Elec

tric

alEq

uipm

ent

0

50

100

150

200

250

300

350

400

450

Min

eral

san

dBy

prod

ucts

Mec

hani

cal

Cons

urab

les

and

Spar

es

Refr

acto

ries

Gas

es

Ferr

oA

lloys

Proj

ects

Coal

and

Coke

Cont

ract

Serv

ices

Logi

stic

sTr

ansp

orta

tion

Serv

ices

Total Spend values in INR Crores

Elec

tric

alSp

ares

&..

0%

5%

10%

15%

20%

25%

30%

Cont

ract

Serv

ices

Ferr

oA

lloys

Pack

agin

g

Mec

hani

cal

Equi

pmen

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Item

s fo

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Logi

stic

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ansp

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tion

Average Savings in Percentage

Fabr

icat

ion

Item

s

Proj

ects

Refr

acto

ries

Elec

tric

alEq

uipm

ent

Coal

and

Coke

Top 10 Average % Savings Achieved in the Quarter Jan'13 - Mar'13

17

Case Studies

Bhilai Steel Plant of SAIL mandated buyjunction to procure CNC roll turning lathes for universal rail mill under their modernisation and expansion scheme.

The client expected buyjunction to get the highest possible savings for them.

Procurement of CNC roll turning lathes by BSP

Key challenges

Only three bidders were eligible to participate in the event and it was a challenge to instil the sense of competition in them;

The start bid price, which was provided by the client, was way lower than the L-1 online sealed bid price which was arrived at by the vendors.

Our approach

• We gave the bidders in-depth training regarding modalities of the evaluation and bidding in online events;

• Since it was a high-value order, it was a challenge to make the bidders comfortable with bidding online.

•

•

Benefits

The client achieved a savings of 8.2% on the estimated value of the product.

Procuring ferro vanadium for JSPL

JSPL Raigarh mandated buyjunction to procure 60 tons of ferro vanadium, a type of ferro alloy used as a raw material for crude steel production.

The client expected buyjunction to ensure timely delivery of required quality of material.

.....................................................................................................................................................................................................

Category Management Services

PR to PO Activity Jan-13 Feb-13 Mar-13 Q4 Total

Total No.of PR processed 1877 2033 1814 5724

PR Values(in lakhs) 9254.28 11267.45 7708.45 28230.18

0

6

12

18

18

“We convey our thanks over excellent services and co-operation extended by the MSS team from the date of commencement to make MSS project stabilize. We observed that there was significant improvement in the areas of Lead Time, Delivery Compliance and maximum vendor participation in the last quarter (Jan’13 – Mar’13).”P. K. JhaGM, MMSAIL, IISCO Steel Plant, Burnpur

“7 of the 8 allowed vendors participated actively in the RA and 35 bids were received, resulting in a savings of 2.31% over the last procurement price of Urea in April 2012 in spite of Diesel price increase. We appreciate the effort put in by your operation teams in Kolkata and Chennai to increase the vendor base and achieve this saving.”A. K. RoyDGM I/c (MM)SAIL, Salem Steel Plant

“The involvement of your senior associate posted at Bokaro has helped increase the vendor participation by 91% reduction in lead time by 26.15 days.”Anil KumarAGMSAIL, Bokaro Steel Plant

.....................................................................................................................................................................................................

.....................................................................................................................................................................................................

Business challenges

JSPL's payment terms, price validity and arbitration clauses were such that it was a challenge to explain them to the suppliers and convince them to participate in the auction.

Negotiate with the vendors so that despite huge supplies required by SAIL, they are still able to supply the best quality material of the required quantity.

•

•

Our approach

The service delivery team along with the CRM followed up regularly with the suppliers, going to great lengths to explain all terms and conditions so that there is no scope of any confusion;

The team also followed up and kept in touch regularly with the vendors so that there is no quantity hiccup.

•

•

Benefits

Five bidders participated in the reverse auction, which resulted in a savings of 9.14% on the estimated value of the material.

•

Client Testimonials

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mjunction is the largest ecommerce company in India.It is a 50:50 venture promoted by the Steel Authority of India Limited (SAIL) and TATA Steel.

corporate officemjunction Services Limited Godrej Waterside Tower – I, 3rd Floor, Plot No. 5, Block – DP Sector – V, Salt Lake City, Kolkata – 700091, WB, IndiaTel: +91 33 6610 6100 Fax: +91 33 6610 6187/ 6179 / +91 33 6601 1719 / 1720

registered officeTATA Centre,

43 Jawaharlal Nehru Road,Kolkata 700 071

Tel: +91 33 6610 6100, 2288 2606 Fax: +91 33 2288 2078

[email protected] [email protected]

www.mjunction.inwww.buyjunction.in

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Buyjunction connect June 2013

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Transcript of Buyjunction connect June 2013