Www.dnserp.comE-PROCUREMENT1 e-COMMERCE Models E-PROCUREMENT BY JYOTINDRA ZAVERI E-Business...

www.dnserp.com E-PROCUREMENT 1

e-COMMERCE Models

E-PROCUREMENT BY

JYOTINDRA ZAVERIE-Business Consultant

E-PROCUREMENT BY



E-PURCHASE OR E-PROCUREMENTUSING INTERNET

GLOBAL NETWORKING & OTHER BROADBAND TECHNOLOGIES ARE BEING USED AS COMPETITIVE WEAPONS IN TODAY’S BUSINESS


PROCUREMENT CHALLENGES

Cost: To source raw material and services at the lowest possible price without compromising on quality

Manual purchase processing is slowToo many items and so many suppliers to track

and follow-up Inability to locate relevant supplier in given timeHigher product cost due to small quantitiesMultiple payment cycles for various vendors


Presenting a case study

www.synise.comSynise Technologies Ltd. E-Procurement service provider Synise - leader in Procurement and Selling Services, is a part of

the US$ 2.4 Billion Kalyani Group with interests across Manufacturing and Information Technology.

A trusted partner of the purchasing department, Synise has been delivering consistent results to many large corporate by way of reducing costs and improving their procurement process.


www.synise.com


Synise Technologies Ltd.

Normally companies focus on customers and to improve relationship they deploy CRM software.

Now, let us go one step further and discuss about VRM (OR SRM)

VENDOR RELATIONSHIP MANAGEMENT (SUPPLIER RELATIONSHIP MANAGEMENT)

VRM goals:– More efficiency– Lower costs– Improved bottom line


MAXIMIZE SUPPLIER VALUE…….AND IMPROVE PROFITABILITY

The perception of suppliers is changing, moving from a link in a "chain" to a vital "relationship”.

This involves a new way of doing business, where companies are seeking to get closer to their suppliers to gain deeper, longer, and more profitable relationships.


B 2 Be-SourcingSupply ManagementPurchasing Intelligence


PRE-PURCHASE BUSINESS PROCESS IS AS FOLLOWS

1. RFI– Request for information

2. RFQ– Request for quotation

3. Receive vendors quotation– Purchase quotation is saved

4. Compare prices– Raise purchase order

5. PO– Purchase Order


E-AUCTION / E-PURCHASE SUCCESS STORY

SYNISE has conducted auctions worth crores of Rupees

MRO purchase outsourcingMRO= maintenance, repairs,

overhaul–Spares – v-belts, ball bearing–Electric motors


VRM BENEFITS

Procurement cost reductionTransparent decision makingSupplier discovery from internet – get to know

more vendors world wide Shorten sourcing lead time by 35% to 50%

– REDUCED PROCESS TIME• AUTOMATED AND ACCURATE RAISING OF PURCHASE

ORDER• GOODS INWARD (PURCHASE VOUCHER) IS TIGHTLY

LINKED TO P. O. Pro-actively manage supplier relationships for better pricing,

availability and quality.


VRM BENEFITS….(continued)

Procure at Near or Below Market Price in dynamic markets typically lower by 5-10%.

Reduce Negotiation time by more than 60%. Make informed purchasing decisions with

decision support tools


E-Auction – commodity market

E.G. CARDAMOM MARKET AT KERALA AND TAMILNADU THE ONLINE AUCTIONS HAVE BEEN

WELCOMED BY SMALL TRADERS AND SMALL FARMERS (GROWERS) WHO FEEL IT WILL HELP TO COUNTER THE EFFORTS OF BIG CARTELS


SUCCESSFUL E-BUSINESS BY THERMAX

Using the Procurement Auction Solution, Thermax was able to achieve the following : – Good Sourcing Intelligence helped in identifying new

qualified suppliers – Strategic Market Making helped to get better price

realization on current market prices going upto 28% – Overall reduction in transaction cost to the buyer and

marketing cost to the seller typically low by 30%


SUCCESSFUL USE OF INTERNET BY THERMAX TO SAVE TIME AND MONEY

Item Category: Packaging Materials

Existing Suppliers:10

New Suppliers:12No. of Bids: 144Savings % :12 %

(Rs. 2.48 million)


Case Study – Bharat Forge Ltd., Pune

Bharat Forge Ltd, a flagship company of the Kalyani Group is the largest forging company in Asia and one of three largest and most technologically advanced commercial forge shops in the world

Bharat Forge manufactures a wide range of forgings and machined components for the automotive, diesel engine, railway, earthmoving, cement, sugar, steel, coal, ship building and oilfield industries, as also general engineering equipment


The Challenge

Bharat Forge had three objectives in mind when they embarked on the e-Supply Chain Initiative :

To reduce the overall post-contract transaction cost To improve quality of product delivery and

information To drive time & cost out of their Supply Chain


Success story

Using e-commerce solutions, Bharat Forge was able to leverage on the existing IT Infrastructure to reduce : – Purchase cycle time by 20%– Working Capital Cost by 10% – Document Management Cost by 30% – Communication Cost by 50%


TATA CHEMICALS – CASE STUDY

Tata Chemicals (TCL) is India's leading manufacturer of inorganic chemicals. Incorporated in 1939.

A pioneer and market leader in India's branded, iodised salt segment

It is also among the largest producers of synthetic soda ash in the world.

TCL operates the largest and most integrated inorganic chemicals complex in India, at Mithapur in Gujarat, a state in western India. The company's state-of-the-art fertilizer complex at Babrala in Uttar Pradesh.

The company exports to a variety of world markets including Southeast Asia, the Middle East and Africa.


CASE STUDY – TATA CHEMICALS

SOFTWARE solution would address various Pre & Post Contract processes such as Strategic sourcing, Supply chain management and other related activities.

Seamless integration of these processes with the back-end ERP system would enable Tata Chemicals to move their traditional sourcing and supply management process to an automated, web-based one.


ONLINE PURCHASE

Online request for informationOnline request for quotationOnline order processingDelivery schedule managementMaterial Receipt ManagementMoney Payment managementThe INTERNET BASED SYSTEM is a strategic

relationship management tool with the Suppliers


BENEFITS OF E-PROCUREMENT

1. Helps gain unparalleled knowledge of your purchasing and supply operations by way of which you can quickly identify savings opportunities, improve supplier relationships, optimize operational efficiencies, and make strategic decisions that maximize the profitability of your organization.

2. Helps you better manage your suppliers and increases your negotiating power by providing real-time visibility into key information about your suppliers and purchases.


BENEFITS OF E-PROCUREMENT

3. Improves contract utilization & identifies Opportunities for New Contracts

4. Optimizes your supply base and helps in obtaining the best prices for key commodities.

5. Maximize Efficiencies and Cost Savings in your Purchasing Organization


Railways portal for e-auction of empty wagons in future

E-business will bring more revenue and minimize losses due to wagons are empty or on the empty flow direction. The Railways lose revenue in the movement of freight when a train returns empty after delivering goods

Online website will be used for e-auction– Initially the bid value will be kept low

• Something is better than nothing


E-BUSINESS Conclusion:The ultimate aim of the organization is to

provide total visibility (transparency) to its clients and business partners


VISION STATEMENT – E-ATTITUDE


PRESENTATION BY


email [email protected]

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