Ethical Procurement
Ethical Procurement
Ethical Procurement
What is Ethical Procurement?
The word “ethics” in buying and supply management refers to a wide range of issues. It ranges from trader business dealings. Some major themes that relate to ethics in organizations include fair trade and moral trading. It also includes social liability, social auditing, and corporate citizenship.
Ethical sourcing rules are active norms. An open-sourcing plan should also explain the procedures. It should also explain the methods used at each level of the procurement method. It helps in analyzing and interacting with a supply market to keep supplier relations.
What is the Use of Ethical Procurement?
Ethical procurement is a blend of source-chain dealing skills and satisfying legalities. Various societies have diverse views on the value of their profit.
Ethical procurement requires alertness of a company’s social and lawful tasks. It also needs a planned tactic to remove immoral behaviours from its procurement actions. A bribery outrage, for example, might result in huge penalties. However, long-term damage to a firm’s status might bring it to the doldrums if it loses its consumers’ trust. As a result, ethical procurement must be pursued.
How Does Ethical Procurement Work?
Ethical procurement would be the default state of things for businesses of all kinds and sorts. It is doing the right thing for the firm and society. But, of course, it isn’t fair to suggest that ethics and morals are equal. Instead, being moral is just fine and compatible with one’s beliefs. Real-world procurement experts know that even the strictest code of ethics may be put to the test in a world where conflicts of interest and other immoral events are all on the rise.
Ethical procurement works on the following principles:
- Globally declared human rights should be supported and respected by trades.
- It establishes that they are not implicated in any abuses of human rights.
- Companies should also help the actual salutation of shared trading rights.
- All types of forced and bound labour must be eliminated.
- The effective abolition of child labour.
- The removal of jobs and job discrimination.
- Ecological snags should be approached with prudence by industries.
- Take steps to inspire people to be more globally aware.
- Support creation.
- Support the spread of natural social skills.
- Companies should combat all types of corruption.
What are the Advantages of Using Ethical Procurement?
Integrity: It refers to maintaining expert honesty by refusing any fraudulent business practice. It ensures that information given in the course of work is precise and not misleading. It should never breach the privacy of information received. Our firm should strive for genuine, fair, and clear competition.
Compliance: We should follow the laws of the nations. We should also keep contractual promises.
Protection: This means protecting the profession by refusing to accept inducements or gifts. It means refusing to allow offers of hospitality. It can be perceived to influence any business decision. It fosters awareness of unethical practices. It helps in sensibly managing any business relations where corrupt practices exist.
Proficiency: Continuously learning and using the info to improve personal skills. The working group promotes the highest levels of expert ability among people in charge. It also maximizes the ethical use of funds for the benefit of the group.
An ethical procurement expert is someone who performs his occupation with honesty. He does not engage himself or his concerned business in partial practices. Public sector organizations must ensure the goods they procure are obtained sensitively. The teams that create these items work in a safe and fair environment. Ecological and social costs should always be measured.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Direct Procurement
Direct Procurement
Direct Procurement
What is Direct Procurement?
Direct procurement is a method of acquiring resources to produce a company’s product or service. These acquisitions are usually made in bulk from a pool of vendors to get the highest price from the customers. It also helps maintain the quality and reliability of the products. The goods and services bought through direct procurement quickly make their way to the company’s end consumer or client. Companies cannot manufacture their goods and generate income if direct procurement ceases or encounters challenges. In other words, spending on services, interests, and materials that create profit, performance, and competitive advantage is direct procurement.
In practice, direct procurement consists of a series of related processes that span a product’s entire lifecycle and involve internal and external stakeholders from procurement, logistics, accounts, engineering, the supply chain management team, and the suppliers that comprise the supply chain. Direct procurement is mainly found in manufacturing industries, where raw materials are transformed into physical products.
What are the most significant aspects of direct procurement?
Long-term relationships – Direct procurement teams tend to cultivate long-term, collaborative relationships with their suppliers to boost quality and improve efficiencies over time. Delivery schedules and consistency directly influence production. The quality of raw materials impacts the final product’s quality and, consequently, the organization’s reputation and credibility. In this process, partnerships with suppliers are typically long-term and collaborative. As a result, companies can spend more time developing and managing supplier relationships.
Planning – Direct procurement manages the core supplies that the business requires to run its day-to-day operations. As a result, it requires special attention to ensure resilience. Hence, the companies must carefully plan the budget to avoid supply chain disruptions.
Inventory – Raw materials should be frequently retained in the capital when using direct procurement to enable continuous and defer-free production. It will ensure that the inventory is never empty and that the business grows unhindered.
Centrally automated – Direct procurement is based on a centralized system in which the category managers devote their time and talent to directly purchase specific goods and services. It enables quick acquisition of products without undergoing any hassle.
Saving costs – Direct procurement is carried out by a method in which the actual costs incurred for the offering of direct materials are calculated and compared to the price set during negotiations. This ensures complete transaction transparency.
Deep knowledge – Setting up and orchestrating a global supply network of numerous partners, who collaborate in complex processes, necessitates extensive knowledge and abilities. Because the stakes are high, direct supply chain execution systems must establish connections and visibility between manufacturers, BPO firms, logistics providers, raw material suppliers, banking partners, etc.
Boundaries – Because most businesses are geographically dispersed, the world is a tiny place for direct procurement. A direct procurement system usually operates worldwide and locally (local in terms of language, currency, user connectivity methods, etc.).
Supply chain environment – Direct procurement typically has a considerably larger supplier base, and the procedure sometimes requires longer lead times since more valuable items are at stake. As a result, errors in the case of direct procurement have far more weight, and process inefficiencies can cause significant disruptions in corporate operations and result in revenue losses. Hence, direct procurement management is influenced by supply chain mobility and supplier base health.
Technology – Direct procurement enables businesses to technologically manage their direct product order lifecycles, from funding the supply chain to final delivery. These services connect purchasing organizations with suppliers and provide anticipated billable sales ahead of schedule. They provide more precise and thorough lead-time estimates by offering visibility into the company’s activity and progress. Multiple-level ordering functionality and coordination tools enable enterprises to manage multi-tiered supply chains, making it easier to ship internationally, combine shipments, and keep track of shipping operations.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Chief Procurement Officer (CPO)
Chief Procurement Officer (CPO)
Cheif Procurement Officer (CPO)
Who is the Chief Procurement Officer (CPO)?
A Chief Procurement Officer or CPO is in charge of managing the sourcing and procurement of a business. The primary job of a CPO is to ensure that the supply chain management is functioning smoothly. With the world becoming one giant tech hub, supply market risks, the pressure of compliance, automation in matters of procurement have suddenly put forth numerous challenges for b2b supply chains.
And it gave rise to the growing need for a procurement department with well-trained staff and an executive to oversee things. That executive is the CPO. There has been a rising demand to increase expenses under management and improve the visibility of the procurement division’s specialization to help in better cooperation among employees and departments.
What Are the Skills Required to Be a CPO?
From numerous surveys conducted, it has been observed that certain common skills are found and required in CPOs.
Excellent leadership skills are required to oversee the entire production process. Managing and mobilizing cross-functional teams has to be undertaken by a CPO.
CPOs are in charge of developing new products following the company’s vision and objectives. They have to answer for every new product formulated and manufactured. Thus they need to have a strategic vision for products.
A CPO must have good communication skills as they have to interact and coordinate with stakeholders, manufacturers, and customers. They need to be keenly empathetic to customer demands, grievances, and possible redressal. Due diligence is a make-or-break moment for a developing business.
A CPO has to deal with a lot of data regularly. They might be overseeing revenue and profits, churn rate and retention, product engagement, etc. Making data-driven and objective decisions is not always easy but such has to be the expertise of a CPO
What Are the Functions of a CPO?
The CPO holds an executive position and has to oversee numerous product-related activities as a strategic leader. Usually, a CPO is responsible for the administration as well as supervision of the company’s acquisition programs. They may be in charge of the contracting services and manage supply purchases, equipment, and materials. It is often their pre-defined responsibility to source goods and services and to negotiate for prices and contracts.
Some important functions of a CPO are to oversee product strategy, cultivate creative product designs, research on behavioral patterns and purchase tendencies of end-users, forecast the growth of a product in upcoming markets, advertising and marketability, making product analytics and metrics. It is also the CPO’s responsibility at times to interview, recruit, train and supervise employees in the production department. The CPO has immense responsibilities across the product cycle, from the idea of a new product to, right till it is realized and sold to consumers.
What Are the Other Functions of a CPO?
In a small company, the procurement officer may work alone, but often there is a team that executes the purchasing process. CPOs who work in multinational corporations have to manage a global team with widespread but varied resources. Some CPOs are in charge of finding optimum sources for supplies and services and developing good relations with suppliers.
CPO ensures that records of all vital information regarding purchases and services are preserved. They keep inventory levels up to date and take accountability for forecasting the upcoming supply needs of a business. CPO is the primary leader of the purchasing team and it is their responsibility to ensure that policies of the company regarding procurement are followed.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Advanced Quality Planning
Advanced Quality Planning
Advanced Quality Planning
What is Advanced Quality Planning?
Advanced Quality Planning (AQP) is a set of procedures and techniques to standardize product quality requirements. It aims to ensure customer satisfaction. Advanced quality planning seeks to reduce the complexity of product quality planning by facilitating communication between all stakeholders (customers and suppliers).
It requires that all the identified processes and necessary steps are applied correctly. It also ensures that the expectations and needs of customers are met and that each stage of the product development process is carried out efficiently so that the quality, timing, and cost commitments are also achieved.
Beginning of Advanced Quality Planning
The beginning of AQP dates back to the 1980s when it was developed in the automotive industry. Initially, Ford, Chrysler, and General Motors published it jointly.
It was also included in the QS-9000 Quality Systems Requirement Manual. The intention was to develop universal quality planning principles to provide a common understanding to all their suppliers. The AQP guidelines establish principles and standards to ascertain that customer quality requirements are met.
Phases of Advanced Quality Planning:
There are 5 phases of advanced quality planning (AQP). These are listed below:1. Planning
2. Product Design and Development
3. Process Design and Development
4. Product and Process Validation
5. Feedback, Assessment, and Corrective Action
Why Do We Need Advanced Quality Planning?
Advanced quality planning is more than just establishing standards for quality planning and management. It touches every aspect of business, including suppliers. It detects and mitigates quality issues before they reach customers. Some far-reaching benefits of advanced quality planning include:
1. Better Quality and Standards: AQP allows customers to easily communicate and give feedback. These feedbacks and insights combined with advanced statistical tools, processes, and product parameters help to build quality products. It raises the brand value and provides a competitive edge.
2. Increased Customer Satisfaction: It streamlines the product development process. It helps in incorporating assessment and corrective actions to increase overall customer satisfaction. Disruptions are also avoided by continuously monitoring and implementing identified processes.
3. Faster Delivery: One of the positive outcomes of advanced quality planning is faster product delivery. Understanding the requirements of customers ensures efficient use of resources. The rapid development of products and faster delivery is achieved with minimal costs.
4. Cost Reduction: Strict adherence to advance quality planning eliminates waste. Accurate and efficient production saves money and time. AQP makes it much easier to control, monitor, and improve production operations.
5. Effective Communication: AQP facilitates communication between suppliers and consumers and also involves vendors. It is a basic requirement to maintain product conformity. Effective communication mitigates or reduces risks or misunderstandings.
6. Quicker Detection and Resolution of Problems: AQP helps detect and resolve issues as and when they arise. If problems are not detected in their early stages, they may reach customers and become unmanageable. This situation adversely affects brand value in the long term.
What Advanced Quality Planning is Not?
Almost all organizations have some levels and techniques of advanced quality planning. It is not something new or alien to a business. In some cases, it may be done informally. The aim of reducing problems and gaining customer satisfaction may not be written down, but all organizations are working towards it.
AQP is also not as complex as it is thought. It is not only a standardization practice or a standalone activity, it is also an integral part of business strategy to achieve the final goal of customer satisfaction. It is also not secondary to other business processes or activities.
Industries & Impact
My vision for Moglix is to change the face of industrial commerce: Rahul Garg
Now and Next in the Infrastructure Sector
Moglix enabled Agile MRO Procurement at Scale through Workflow Digitization of large EPC company
Building Infrastructure To Connect India`s Highways to the Global Supply Chain
Building Infrastructure To Connect India`s Highways to the Global Supply Chain
At 14 per cent, India has one of the highest logistics costs relative to GDP. Similarly, India’s power cost as a percentage of GDP is also among the highest in the world. This has limited the competitiveness of India’s products in the past. For India to be a manufacturing global superpower, infrastructure creation is the foundation.
By connecting India’s upcoming cities to better opportunities for domestic trade it will enable business continuity. Infra-building initiatives like the 100 Smart Cities Mission and the PLI scheme covering 13 sub-sectors will enable Indian manufacturing to widen its footprint into tier-2 and tier-3 cities.
Infrastructure creation will enable small and large manufacturers in India to connect to EXIM trade opportunities. Robust infrastructure for EXIM trade such as airports, ports, inland container depots, and logistics parks will allow Indian manufacturing to leverage the untapped potential of MSME suppliers through greater local capacity utilisation. Infrastructure creation alone can contribute 4.5 per cent to India’s GDP growth rate every year.
The lack of visibility into relevant metrics distorts the creditworthiness assessment of MSMEs and slows down the release of working capital. Agile cash flow is the fuel that India’s MSMEs need. A shift from offline to digital credit disbursal can strengthen MSMEs’ balance sheets.
Digital supply chain financing platforms leverage dynamic metrics like cash flow to make credit approvals safer through more accurate underwriting and enable quick on-demand credit injection into MSMEs’ balance sheets.
A switch from cash-based offline credit disbursal to digital supply chain financing can add three percent to India’s GDP every year.
Digital transformation is the multiplier that will bring these together to work seamlessly for us and our partners across the world. The time to make India a manufacturing superpower and create a “community of shared destiny” is now.
B2B Commerce Unicorn Moglix raises $250 Million in Series F funding
B2B Commerce Unicorn Moglix raises $250 Million in Series F funding
Moglix, the industrial B2B startup for manufacturing and supply chain ecosystem, has raised $250 million in its latest Series F funding round, stands at a valuation of $2.6 billion. This round of investment was led by Tiger Global and Alpha Wave Global with Hong Kong based-investment firm Ward Ferry coming on board as a new investor.
Early investors, who had invested in Moglix during the seed stage have seen an 80X return on their investment in this B2B commerce firm. Moglix is one of India’s largest and fastest-growing B2B Commerce companies. It works with manufacturing and infrastructure companies to transform their end-to-end supply chain, from procurement to distribution. In May 2021, Moglix became the first B2B Commerce unicorn or a startup with over $1 billion valuation, in the manufacturing sector, raising $120 million.
“We are happy to have the continued support and faith of our investors, customers, suppliers and team. We are excited to welcome Ward Ferry onboard. We are focused on our mission to enable the creation of a $1 trillion manufacturing ecosystem in India,”
Rahul Garg, CEO & Founder, Moglix
The firm is backed by marquee global investors such as Tiger Global, Alpha Wave Global, Sequoia, Accel Partners, International Finance Corporation and Harvard Management Company Industry stalwart. Also, Ratan Tata, Chairman Emeritus, Tata Sons had invested in the start-up in 2016. Leaders from the start-up and manufacturing communities such as Kalyan Krishnamurthy, Vikrampati Singhania, Shailesh Rao have been investors in Moglix.
Rahul Garg, CEO, Moglix: On A Mission To Impact 100 Million Lives By 2030
Rahul Garg, CEO, Moglix: On A Mission To Impact 100 Million Lives By 2030
Rahul Garg is raring to go. And he wants to do it quickly.
That’s why just a few months after his company Moglix became a unicorn, Garg set up the Mogli foundation, which will work with organizations to bring innovations in areas as diverse as health care, environment, and livelihood in the country. The idea came largely from his own experience in India’s fight with the second wave of Covid-19.
“We want to now become the front and centre of everything manufacturing, procurement, and everything related to supply chain finance”
Rahul Garg, Founder, Moglix
India’s e-commerce B2B market is currently pegged at $1.7 billion, according to a report by consultancy firm RedSeer. It is expected to grow at an 80 percent compound annual rate (CAGR) to reach $60 billion by 2025. By comparison, the B2C e-commerce market is currently worth some $18 billion and is expected to grow at 40 percent CAGR. The country’s offline B2B market itself was estimated to be worth some $700 billion in 2018-19.
“It’s still very early days and I think the idea is can we impact 100 million lives by 2030 in a positive manner across health care, environment, and livelihood,” Garg says. “We have realized there is a larger purpose and larger objective that you can, as an organization, have to create impact.”
The company has already launched operations in the UAE, a market it is now bullish on. It works with over 500 global enterprises to streamline their procurement and supply chain at more than 3,000 plants across infrastructure, metals and mining, oil and gas, chemicals, pharma, auto, and FMCG, among others. In addition, it also boasts a supply chain network of over 16,000 suppliers and over 35 warehouses.
Strategic Acquisition, Expansion and Scaling Up: Moglix Growth Action Plan in line
Strategic Acquisition, Expansion and Scaling Up: Moglix Growth Action Plan in line
Business-to-business (B2B) commerce platform Moglix, which stormed into the unicorn club this year after raising fresh funding at a valuation of $1 billion, expects to breakeven in 18-24 months even as it looks to make acquisitions, expand its categories and double down on its Middle East business.
“We have found that while today on the consumer side there is a lot of capability to get lending access in a fast manner from many platforms, the same thing on the B2B side is missing,”
Rahul Garg said
We believe that India has a $150-200 billion worth of financing need in the B2B space and there is at least $30-50 billion worth of need unfulfilled today. If we execute it properly, we are looking at $2 billion to be disbursed annually as part of the platform in 12-18 months.
Talking about his international plan and expansion in UAE, he added
“We entered the Middle East two months back. We have a team and a warehouse there and we are doubling down in the region. On the one hand, we have shipped to more than 120 countries over the last six years. We were shipping pandemic PPE (personal protective equipment) supplies in more than 25 countries. The other dimension is how our full-stack solutions in India are applicable across emerging markets (and how do we take it there).”
Moglix grew at 3x plus over the last 18 months as a company. We continue to scale our offering across multiple categories and there is always the unpredictability of what happens in the next few months but we are on track to grow 2-3x in this financial year. We have provided liquidity during the last two fundraisers to our employees. We cover 25-30% of our employees as part of the ESOP plan. We are continuing to double down. We would have announced Rs 30-40 crore worth of ESOPs. In the last 12 months, we hired more than 500 people. We aim to hire 300-400 people in the next six months. We didn’t do any layoffs during the pandemic.
How Augmented and Virtual Reality is becoming the future of manufacturing?
How Augmented and Virtual Reality is becoming the future of manufacturing?
The applications of AR and VR in various strata of the manufacturing sector can help it grow out of time-consuming, redundant cycles of functioning. AR is bringing precision to production and empowering workers with state-of-the-art methods for efficiency and ease. Through personalised guidance, automated support,better monitoring and analysis of faults & flaws, this technology assists people in focusing on their work and having an eye for detail. The ability of new-age technologies such as AI, Big Data and IoT to make manufacturing smarter and more inventive has received a lot of attention in recent years. And today, the potential of AR for manufacturing is only beginning to be explored, signalling enormous potential. Because of the development of sophisticated technology, every critical activity previously carried out by a time-consuming, manual method is now automated, simplified and painless. It is yet too early to tell if AR and VR investments indicate a coming revolution that will forever change manufacturing as we know it or if early adopters are experimenting. In any case, virtual technology in production is no longer just hype.
Road to the low-cost transition to Net-Zero lies via Value Engineering
Road to the low-cost transition to Net-Zero lies via Value Engineering
The Glasgow Climate Pact has made it clear that there is a universal mandate to get to net-zero emissions. However, each country will have its own timelines and trajectories. Through their regulatory mandates, governments will start clearing out carbon content from the supply chain, making space for green alternatives. Manufacturers will have to roll out innovative solutions with speed and scale to cash in on the opportunities.
Supply chains are subject to the bullwhip effect, where changes and errors accumulated upstream keep amplifying as we travel downstream. The way to accommodate this characteristic of supply chains is to develop digital solutions which allow flexible reallocation of resources and costs in response to real-time carbon emissions.
Optimizing the logistics planning for the delivery of goods for every procurement and distribution transaction is the first step in reducing the carbon footprint. Businesses will have to leverage data to map critical paths, container capacities, and multiple modes of logistics and choose the least cost-green logistics options.
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