Action Plan for Future Procurement through Digital Strategies

Digital Transformation in Business Services refers to improving customer experiences, operational efficiency and agility by fundamentally changing the way business services are delivered using digital technologies as the enabler of holistic transformation”.  New & emerging digital technologies are – Smart Automation: RPA, Cognitive, AI, Machine Learning, Algorithms, Blockchain and Virtual, Augmented & Mixed Reality. Advanced analytics will make possible more accurate forecasting, leading to improvements across the entire sales- and operations planning process. This will also make possible better scheduling of batch production, shorter lead times, and lower safety stocks with a higher level of flexibility. Integrated “no-touch” ordering and scheduling systems will help to stabilize production planning even further. 

Moreover, e-tendering mode is also being implemented for enabling public procurement process in NIC portal. Due to which e-bidding in sale process was adopted for the first time with e-tender floated in the NIC portal. Also for the first time, e-tendering through International Competitive Bidding (ICB) on Spot basis was made to procure a single lot quantity of feed-stock through Import in the month successfully. 

Single e-tendering for the highest ever value of more than Rs. 300 Crores was successfully made for hiring of transportation services for multiple activities at Pan India basis.

Digitization in tendering process has facilitated wider participation of vendors, increase in reliability in sourcing of customers/suppliers/service providers and better realization & accrual benefit to buyers and sellers. 

Other than above, following innovative methods/systems and tools are in place in order to make the procurement process convenient and compatible to the organizational requirements:

  1. Bill Watch System (BWS) to ensure that P2P timeline is maintained and vendors are paid within the contractual period without delay. This process has enhanced the confidence among vendors towards participation in sourcing activities.
  2. In house online system developed and implemented to track the sourcing activities start from requisition (through online mode) till issuance of awards for procurement of supplies and services.
  3. In-house, online system developed and presently used to track the goods receipt and inspection activities at site made by suppliers/vendors to complete the procurement cycle with payment processing.
  4. Online system developed with the technical assistance of IBM to monitor the health of the procurement cycle is in place which automatically records the ordering cycle time and compliances to various statutory obligations according to the law of land.

Engineering administration is one of the vital activities required to be followed on regular intervals to avoid mismatch of part numbers due to continual engineering development/ improvement made through R&D based on the market requirements, after sales feedback and also through concurrent engineering. In order to process the engineering administration effectively, online system is developed and implemented which also supports the MIS activities to all units of the business on real-time basis. The software is titled as DENIS(Design Engineers Information System).

Procurement of goods and services is also made from overseas vendors or establishments. The procurement process is made through e-tendering on either spot basis or international competitive bidding. Facilitating the entire procurement (goods & services) is digitized as detailed above, the tracking of orders (supply or services) post-award activities are also made online to avoid detention/ demurrages at India port, timely execution of supply orders, timely execution of service orders and contracts closures post completion of services.

Contract administration is part of the procurement process and needs close monitoring to avoid delay in execution, budget exceeds, abnormally high rates as against the Bill of Quantity (BOQ) as per the awarded contract(s) and to avoid sub-letting of the contracts. With the support of SAP ERP system, advance level monitoring of contracts are maintained in line with the project management principles. There are various big-ticket contracts being awarded during the project phase of the plant and proper controls on the execution is mandatory to avoid budget exceeds and to comply with statutory requirements and in return meeting organizational objectives.

Presently the focus is on the Big Data and Artificial Intelligence (AI) to achieve the goal of the smart factory as this will enable the development of new operational models based on automation and augmented human activities which rely on predictive analyses for operations and maintenance, production and inventory monitoring, and improving security.

But technology alone isn’t the answer. In the chemicals industry, it’s the use of technology against the right digital strategy that holds the real value. This requires a focus on implementing a true digital core that enables a common system of record through the business. It also requires a corporate mindset that embraces agility, adaptability, and innovation. It requires a mindset that is driven by a customer-first, design-thinking perspective.