1. www.dnserp.comE-PROCUREMENT1 e-COMMERCE Models E-PROCUREMENT BY JYOTINDRA ZAVERI E-Business Consultant E-PROCUREMENT BY JYOTINDRA ZAVERI E-Business Consultant

2. www.dnserp.comE-PROCUREMENT2 E-PURCHASE OR E-PROCUREMENT USING INTERNET GLOBAL NETWORKING & OTHER BROADBAND TECHNOLOGIES ARE BEING USED AS COMPETITIVE WEAPONS IN TODAYS BUSINESS

3. www.dnserp.comE-PROCUREMENT3 PROCUREMENT CHALLENGES Cost: To source raw material and services at the lowest possible price without compromising on quality Manual purchase processing is slow Too many items and so many suppliers to track and follow-up Inability to locate relevant supplier in given time Higher product cost due to small quantities Multiple payment cycles for various vendors

4. www.dnserp.comE-PROCUREMENT4 Presenting a case study www.synise.com Synise 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.

5. www.dnserp.comE-PROCUREMENT5 www.synise.com

6. www.dnserp.comE-PROCUREMENT6 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

7. www.dnserp.comE-PROCUREMENT7 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.

8. www.dnserp.comE-PROCUREMENT8 B 2 B e-Sourcing Supply Management Purchasing Intelligence

9. www.dnserp.comE-PROCUREMENT9 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

10. www.dnserp.comE-PROCUREMENT10 E-AUCTION / E-PURCHASE SUCCESS STORY SYNISE has conducted auctions worth crores of Rupees MRO purchase outsourcing MRO= maintenance, repairs, overhaul –Spares – v-belts, ball bearing –Electric motors

11. www.dnserp.comE-PROCUREMENT11 VRM BENEFITS Procurement cost reduction Transparent decision making Supplier 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.

12. www.dnserp.comE-PROCUREMENT12 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

13. www.dnserp.comE-PROCUREMENT13 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

14. www.dnserp.comE-PROCUREMENT14 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%

15. www.dnserp.comE-PROCUREMENT15 SUCCESSFUL USE OF INTERNET BY THERMAX TO SAVE TIME AND MONEY Item Category: Packaging Materials Existing Suppliers:10 New Suppliers:12 No. of Bids: 144 Savings % :12 % (Rs. 2.48 million)

16. www.dnserp.comE-PROCUREMENT16 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

17. www.dnserp.comE-PROCUREMENT17 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

18. www.dnserp.comE-PROCUREMENT18 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%

19. www.dnserp.comE-PROCUREMENT19 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.

20. www.dnserp.comE-PROCUREMENT20 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.

21. www.dnserp.comE-PROCUREMENT21 ONLINE PURCHASE Online request for information Online request for quotation Online order processing Delivery schedule management Material Receipt Management Money Payment management The INTERNET BASED SYSTEM is a strategic relationship management tool with the Suppliers

22. www.dnserp.comE-PROCUREMENT22 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.

23. www.dnserp.comE-PROCUREMENT23 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

24. www.dnserp.comE-PROCUREMENT24 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

25. www.dnserp.comE-PROCUREMENT25 E-BUSINESS Conclusion: The ultimate aim of the organization is to provide total visibility (transparency) to its clients and business partners

26. www.dnserp.comE-PROCUREMENT26 VISION STATEMENT – E-ATTITUDE

27. www.dnserp.comE-PROCUREMENT27 PRESENTATION BY JYOTINDRA ZAVERI E-Business Consultant email j.zaveri@dnserp.com www.dnserp.com THANKS