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1 R&M-Purchase - H A Goswami. Journey of Purchase Dept of Soda Ash Established in 1984-85 at sutrapada location during plant commissioning stage Moved.

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Presentation on theme: "1 R&M-Purchase - H A Goswami. Journey of Purchase Dept of Soda Ash Established in 1984-85 at sutrapada location during plant commissioning stage Moved."— Presentation transcript:

1 1 R&M-Purchase - H A Goswami

2 Journey of Purchase Dept of Soda Ash Established in at sutrapada location during plant commissioning stage Moved to Veraval office in 1986 Moved to Sutrapada Plant in 1987 Moved from Sutrapada Plant to Ahmedabad Office in June,1992. Moved from Ahmedabad to Sutrapada Plant in Moved from Sutrapada Plant to Ahmedabad Office in June,2009 BaaN ERP system was implemented in 1999 BaaN ERP was upgraded from B2 to C4 in 2001 SAP ERP system implemented from 01 Mar 2010

3 Process Flow for R&M Items: Spend - 40 Crs

4 R & M Procurement- Soda Ash Division TYPES OF PR ( Purchase Requisition) NB-2 : Engg & Spares…. ( Series: 120 & 100…… ) NB-3 : External Services Capital ( Series : 130… ) NB-4 : External Services Revenue ( Series : 140… ) NB-5 : Imported Spares ( Series : 150…. ) NB-6 : Capital Items ( Series : 160… ) NB-7 : Project ( Series : 170… ) NB-8 : Annual Shutdown Items ( Series : 180… ) NB-9 : Rush Requirement ( Series : 190… ) TYPES OF PURCHASE ORDERS 451….. : Raw Material & Pkg material Pos 452….. : Engg & Spares items Pos 453….. : External service PO for Capital 454….. : External service PO for Revenue 455…. : Import Pos 456…. : Capital Pos 457…. : Project Pos 458…. : Annual Shutdown Pos 490….. : Rush Items POs

5 R & M Items Procurement : Annual Shutdown Total Plant Shutdown Activities: Total plant shutdown date & duration are fixed in advance All long lead time items are indented well in advance like high pressure valves, FRP pipes/fittings, Tower spares, Casting Items, CI/CS/MS pipes & fittings, Rollers & pulley, Conveyor Belts, Gear Boxes & general consumables. Total shutdown requirement are approx 5 Crs. Challenges : Delay in long lead time items indenting. Delay in delivery by Vendors. Last minutes requirements. Documentation/IBR certificate, excise invoice etc

6 Rate Contracts/VMI for R&M Items Sr. No. MaterialVendor Avg pa Procurement (Rs. L) Benefits 1Oil & LubricantsIOCL276VMI at Sutrapada works. Same rates for all three Units 2Conveyor Belts Sempetrans Nirlon 100 Alternate vendor development Phoenix ( Yule) 3BearingsSKF135VMI at our stores. Payment from 30 days to 60 days 4Butterfly valvesBray Control70Price Reduced wrt previous rates. VMI at supplier's end 5Pump sparesKirloskar Brothers (OEM)71Discount revised from 22% to 27.5% 6CI Pipes and fittingsNew Janta Metals10No price rise given over last year's rates 7Cartridge filtersSnepal Carewin23No price rise over last year's rates, VMI at supplier's end 8Mixture shaft boltsAanuraj Industries3.5No price rise over last year's rates, VMI at supplier's end 9V belts / Couplings/ toolsPK Transmission Pvt. Ltd.16Consolidation of items to single vendor 10Ball valvesSealmech Valves10No price rise given over last year's rates 11Lab chemicals and glasswaresB Hiten & Co Plough for lime grinding millAnil Engg. Works11.7No price rise given over last year's rates 13Cable trays - FRPAeron Composites34ARC finalised by reversre auction process. 14Siemens motorsSiemens Ltd.25 No change in discount structure 15L&T Switchgear productsLarsen & Toubro Ltd.35 VMI at sutrapada is to be established 16AC drivesLarsen & Toubro Ltd.9 VMI at sutrapada is to be established

7 Rate Contracts/VMI for R&M Items Sr. No. MaterialVendor Avg annual Procurement (Rs. L) Benefits 16 MS/SS Fastners General Engg -Veraval25 No price Rise 17High Tensile FastnersIndustrial Fastners-BBY5 No change in discount structure 18Gear Boxes Premium Transmission10No change in discount structure 19 Welding Electrodes Gujarat Marine(Ador) National Mineral ( L&T) 20 No change in Discount structure. Trying to establish VMI at sutrapada. 20Welding Accessories M P Tools10No price rise given over last year's rates 21Lovejoy couplingsVijay Engineers10No price rise given over last year's rates. 22Roller Chains Desmin Agency5No price rise given over last year's rates. 23 PaintsKansai Nerolac115 Three years contract with 3/5 years performance 24Cotton ThreadRonak Threads20Rate reduced from last year’s price. 25Plug ValvesNational Minerals4 No change in discount structure. 26Industrial GasesMahex Oxygen15No price rise given over last year's rates 27 Fliud Couplings/spares Fluidomat Ltd10No change in discount structure. 28Cable Jointing KitsUrja Enterprise1.5 29ExplosivesKishan & deepak Ferti.35No price rise given over last year's rates Total1120

8 Challenges in R&M Procurement Frequent PRs In-complete Specifications In sufficient Lead time Poor performance of Vendors in terms of delivery Price, Delivery, Inco-terms & advance payment issues Delay in PR to PO conversion In-proper documentation Area of Focus at Present : PR to PO conversion in 15 days time : 80% Target : 90% Delay in delivery of material: 20% Target : 0% Advance payment : 6.25% ( nos of Pos) Target: 0% Lead time reduction for A class Maximize Rate contract & VMIs Delivery Inco terms FOR veraval/sutrapada : 62% Target: 80% R & M Procurement- Soda Ash Division

9 Import Substitutions - Case study Import Substitute Target SavingsRs. 25L Description Liner for casing vanes for Numan Essar mills Expansion Bellows for Grinding mill Drag chain links for Koch conveyor Spare gear box for Steam Turbine Previous Vendor Numan & Essar, Germany FLSmidth, GermanyVoith BHS Previous vendors RateRs. 1,318,144Rs. 4.0 L Euro 330 per m (Rs /-) as per CY 2010 Euro /- (Rs L) (Euro 1 = Rs. 86) New VendorNorthern Alloys Frenzelit Expansion Joint RUD IndiaTriveni Engineering New RateRs. 114,000Rs LRs /-Rs. 39 L Qty Ordered1 Set 150 m1 No. Savings (Rs. L) BuyerVikasMr. Vikas Gupta Mr. Alpesh Patel User Mr. Mayur HedeMr. P SureshMr. DB Vaishnav Implementation month May '13Oct '13Dec '13Jan '14 Total Savings realized (FY 13-14) - Rs. L

10 Alternative Vendor Development Description Gear Box (RMH) Gear Box (Sizer) Flat belt conveyor Current Isolater Impact blade for Crusher Bull ring for mill Pump spares Die for Briquetting M/c Previous Vendor Elecon GMV Projects MTL Inst McNally Sayaji Hans Alloys Goodwins Pumps Indo German Tool Room Previous vendors Rate Rs LRs LRs LRs. 7,200Rs LRs LRs LRs L New VendorPremium Iron Build Eesha Ent. Northern Alloys Deep Ind. New RateRs LRs. 0.79Rs LRs. 2,496Rs LRs. 1.25Rs LRs L Qty Ordered1 No. 1 Set10 Nos.1 Set 5 sets Savings (Rs. L) Implementatio n month May '13 Aug '13 Sep '13 Jan,13 Total Savings realized (FY 13-14) - Rs L

11 11 Thank You


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