E Procurement (NXPowerLite)-SCM
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Transcript of E Procurement (NXPowerLite)-SCM
Introduction to Purchasing/Sourcing
Purchasing is the process of making available product
Right Quality Right Quantity Right Time Right Place Right Packaging Right Price Right Service
This is also known as the 7Rs of Purchasing.
Introduction to e procurement
Use of electronic media to conduct one or more activities involved in purchasing.
Involves B2B, B2C or B2G purchasing.
Involves sale/purchase of Services & Products.
Generally uses a 3rd party software platform to conduct the activity.
Types of Purchases
Indirect Purchases - Do not directly go into production of the finished good or service but are required for running the business.
a) ORM purchases (Operating Resources Management) Non-critical goods & services Low value
b) MRO purchases (Maintenance Repair & Operations) Critical goods and services Required for upkeep and running of the function
Direct Purchases – Directly involved in the production of finished goods. Generally industry specific, standard materials. Mission critical materials and lot of time and effort is spent in the purchasing of these items.
Steps involved in Manual Purchase process
1. Specify Requirements
2. Create Requisition
3. Requisition Approval
4. Obtain offers from Suppliers
5. Evaluate offers from Suppliers
6. Select supplier
7. Complete Purchase Order (PO)
8. Approve PO
9. Send PO to vendor
Cont.
Steps involved in Manual Purchase process
10. Check order status
11. Receive Shipment
12. Review Invoice
13. Process Exceptions
14. Approve Payment
15. Send Payment
16. Process Returns
Limitations in Manual Purchase process
Process inefficiencies
Potential for errors
Non compliance with purchasing policy/maverick buying
Lack of leverage
Sub optimal sourcing effort
Lack of transparency
Advantages over Manual Purchasing
Improved process efficiencies
Reduction in errors
Better compliance
Improved sourcing
Transparency
Structured Approval Matrix
Market Making
Time Saving
Types of E-auction
Reverse Auction – Buying (where sellers compete) Simple Reverse Auction
Rank Only Rank with Lead Bid
Dutch Reverse Auction Index Based Reverse Auction (Amount/percentage) Bid Transformation
Forward Auction – Selling (where buyers compete) Simple Forward Auction Dutch Forward Auction
Continental Carbon India LtdContinental Carbon India Ltd
Bid Summary: DocBid Summary: Doc228325775228325775 – – ““ PTFE Acid Resistant Membrane PTFE Acid Resistant Membrane Filter Bags Requirement for CCIL -Filter Bags Requirement for CCIL -Reverse Auction-2012 ”Reverse Auction-2012 ”
Dec 21, 2012
Simple Reverse Auction- Example 1
11 11
Bid Summary
Total no. of suppliers: 3 (All 3 incumbents, All well approved and qualified by
CCIL) No. of Lots: 1 No. of new suppliers participated: 0 Total no. of bids: 39 Average Responses per supplier: 13 Auction Running Time: 54 minutes No. of Bid Extensions(overtimes): 23 Historical Price: INR 21.45 Lacs ( L1’s price- Pre Auction ) Lowest Bid: INR 20.25 Lacs Savings: INR 1.19 Lacs (5.58%)
Supplier participation / Screenshot – Lot1
12
S.I. Lot
Historic Price (L1's Price Pre
Auction )Leading
Bid
Savings (w.r.t.
Historic) Savings % L1 Supplier L2 Supplier L3 Supplier
1
PTFE Acid Resistant Membrane Filter Bags 2145000 2025400 119600 5.58
Industrial Filters &
Fabrics Pvt. Ltd
Hitemp Filters Pvt.
LtdMahavir
Corporation
Continental Carbon India Ltd.Continental Carbon India Ltd.
Bid Summary: DocBid Summary: Doc223176782223176782 – – Main Event – 1 Inch Globe Control Main Event – 1 Inch Globe Control Valve- Requirement for CCIL”Valve- Requirement for CCIL”
November 29, 2012
Dutch Reverse Auction- Example 2
15 15
Bid Summary
Lot1 Quantity Lot) : 1 Historic Price (INR) : 2.60 Lakh Lower Ceiling Price (INR) : 2.15 Lakh Upper Ceiling Price (INR) : 2.57 Lakh Accepted Price (INR) : 2.40 Lakh Spend : 2.60 Lakh Savings (INR) : .19 Lakh Savings % : 7.39 % L1 Supplier : Emerson Process Management Event type : Dutch
Total Spend(INR) : 2.60 LakhTotal Savings(INR ) : .19 LakhSavings % : 7.39%
Supplier participation/Screenshot – Lot 1
16
S.I. Name of Participant
Pre bid Offers
Lower Ceiling
Price Upper Ceiling
Price Accepted Price
Savings Savings %
1Emerson Process
Management 287872.9
215890 257400
240796 19204 7.39%
2 Koso India 416383.32
3 Dembla Valves 628728.26