Moglix: How Rahul Garg built an unexpected unicorn
Moglix: How Rahul Garg built an unexpected unicorn
This fortnight, Forbes India has covered an inspiring story of Mr. Rahul Garg and his journey of building an unexpected unicorn. Six-year-old Moglix, which gets nearly 65 percent of its business from Tier II and III towns helps over 500,000 small & medium-sized businesses procure industrial goods.
During the first wave, Moglix did its bit to supply PPE kits and N95 masks, and in the devastating second wave, it managed to procure some 6,000 oxygen concentrators; the startup reckons it has touched half a million lives through these devices. Of course, there’s more to Moglix than Covid-19 relief, deep-dive, into the fascinating story of this B2B venture that has raised $220 million in funding so far written by Manu Balachandran, turn to page 24 of Forbes June’2021 edition.
Read MoreHow Manufacturers Can Save MRO Costs in UAE by 10%?
How Manufacturers Can Save MRO Costs in UAE by 10%?
If your enterprise is searching for solutions to save MRO costs in UAE, here is the catch. MRO costs usually account for somewhere between 5-10% of total costs and may not make up a significant chunk of the cost of goods sold (COGS). However, UAE has a highly competitive manufacturing landscape and even 1-2% of cost efficiencies can make or break your cost advantage.
To assist in a better way, we have outlined some of the steps to help manufacturers in the UAE avoid recurring expenses on MRO. If you are a manufacturer, you can take care of the following points to save MRO costs in UAE.
Manufacturers Must Minimize Return of Items
Delivering a product incurs a cost. Manufacturers price their products inclusive of that cost. However, when anything goes sideways, such as the product not being up to the quality standards as expected or has some defect, the buyer may return it. The return of items will add to the logistics expenses and impact the overall revenue.
Although the irregularities in the product may exist to some extent, manufacturers should try minimizing the double load on logistics by delivering the correct item in the first place. Here are a few points you can keep in check to reduce the rate of return:
- Quality Control Of Goods
- Correct Sizing Information
- Proper Packaging
- Timely Reviews and Feedback
- Round-the-clock Support
Take control of and implement those points to reduce the return of goods sold.
Manufacturers Should Opt for Digital Supply Chain Solutions
What humans can do, automation can do better. It holds in the case of supply chain management processes. It requires diligent work to manage the whole production line, i.e., from procurement to the final product delivery. If we focus just on the initial procurement part, there are different raw materials from various suppliers. On delving deeper, you have separate invoices for every procurement. On top of it, the communication channel is email, which requires regular follow-ups in case of any delays.
If you sum up all this, you will find it takes rigorous manual effort and consumes more time. As a result, your overall production time gets increased. However, if you enable procurement automation, you won’t have to stress repetitive tasks. Below are some notable advantages of relying on P2P automation:
- Easy-to-manage orders and supplies information
- A 50% reduction in TAT
- Easy monitoring of data
- Less hassle
Also, if multiple transactions happen at quick intervals, you can create an SOP and align your process to it. The SOP will help you scale your business. All in all, a refined approach coupled with digital supply chain solutions can create a difference in your final expenses. Thus, helping you boost your profits.
Manufacturers Must Find a Way to Deal with Ad-Hoc Procurement
As a manufacturer, you work on a contractual basis with your partners. You produce a definite amount of goods using the raw materials as decided in the contract. However, there are times when there is an unscheduled requirement of any product. Being a non-recurrent and non-strategic demand, it increases manufacturing enterprises’ expenses.
To solve this issue, manufacturers can take some steps such as:
- Enter into annual rate contracts
- Request for bulk orders
- Regulate your logistics
- Enable Procure-to-Pay solution
- Streamline processes
The main route of escape for manufacturers here is switching to annual rate contracts. In that way, they will be able to fulfill orders in a much better way. It will help them to avoid any unplanned expenses because of no ad-hoc buying.
Manufacturers Should Take Advantage of Data Analytics
The projection of demand and supplies can be difficult to gauge when you rely on static data. For example, an item you are producing may not garner similar interest in the market at a particular time due to various reasons. Since every step in the production line is interconnected, it is critical to have a correct projection right from scratch.
To do so, manufacturing enterprises can use technology and gain valuable insights into the procurement process. New-age technologies such as Artificial Intelligence (AI) and Machine Learning (ML) can help manufacturers create a mathematical model based on inputs from the data collected and facilitate better decision-making.
Some important avenues that AI and ML will open up for manufacturers are:
- Ability to look beyond the static data
- Evaluate the correct demand
- Improved risk management based on collected data
- Flexibility and transparency
P2P software solutions enhanced by AI and ML technologies can unlock opportunities that remain hidden from us. Thus, adding to the MRO costs, which you can save.
Wrapping Up
Summing up what we have learned here is that saving MRO costs for manufacturers in the UAE is a choice. With a careful, proactive approach and use of technology, you can minimize additional expenses and save up to 10% MRO costs, thus maximizing profits in the long run.
Moglix 2.0: Hitting the USD 1 Billion Valuation Mark and Impacting Lives
Moglix 2.0: Hitting the USD 1 Billion Valuation Mark and Impacting Lives
We started with a simple vision: How can we re-imagine B2B commerce and supply chain with technology?
From inception in 2015 to hitting the USD 1 billion valuation mark, the seed to unicorn journey of Moglix has been a tale of fearlessness, innovation, agility, and collaboration. The Moglix story rekindles hope and fires the aspirations of the manufacturing sector in ways that are absolutely unprecedented.
The milestone in our journey is also a testimony to the distance that India’s manufacturing supply chain ecosystem has traversed in these six years, its digital transformation, and the promise it holds for us as we chase the target of a USD 5 trillion GDP manufacturing economy.
Disrupting the Indian Manufacturing Sector with a Tech-first Approach
Technology enablement in the Indian manufacturing supply chain ecosystem in 2015 was at less than 2%. Building an enterprise that would leverage technology to reinvent B2B commerce and supply chains in India and transform a segment that had not seen innovation in a long while. It led to the birth of Moglix, a self-serve e-commerce platform fully equipped to streamline the buying and selling of 3,00,000+ SKUs of industrial goods.
In 2017 when India launched a crucial economic reform in the rollout of the GST, we began institutionalizing the processes needed to simplify our collaboration with all stakeholders in the supply chain. We started building a digital procurement platform with the aim of personalizing the B2B commerce experience for enterprises. Since its rollout, the Moglix Buyer’s Terminal has facilitated enormous ease of procurement of indirect materials, reducing time engagement on supplier collaboration by 80%, enabling 20% cost reduction, and onsite deliveries of 1.5 lac+ SKUs. It has enabled a seamless transition to work from home for 5000+ procurement team employees of our enterprise customers through the pandemic.
Entering the SaaS realm with iCAT and C-Vantage in 2018, we were focused on simplifying contract creation and enabling effective contract management for procurement teams. we were able to create an impact of 80,000 direct procurement contracts worth USD 10 billion by improving the cycle time of contracts.. In addition, the solution assumes tremendous significance in upholding the values of trust, transparency, and equity in OEM-supplier relationships in times of eroding uncertainty and supply chain disruptions amid the COVID19 pandemic.
Solving the Cash Flow Conundrum for MSMEs
As we continued to partner with enterprise buyers, we realized that there awaits a tremendous opportunity for suppliers, especially MSMEs, to connect to relevant growth and capacity expansion opportunities through OTIF order fulfillment and pan India distribution. The Moglix Supplier Central platform has been instrumental in shaping faster technology adoption in our supplier base.
While letting go of traditional manufacturing methods to embrace digital solutions was one challenge, the other was creating access to on-demand collateral free credit. Building a custom digital supply chain financing solution Credlix. Our vision is to provide working capital solutions to a large base of 500,000 MSMEs and 16,000 suppliers as well as improve collaboration between suppliers and buyers.
Our Secret Ingredient?
The people working at Moglix. We have a highly skilled team solving the hardest problems with a tech-first approach. We are grateful for the talent across MRO, Packaging, supply chain finance building smart tech to disrupt the #manufacturing sector.
Expanding into New Geographies
The onset of the pandemic has been an eye-opener for all of us. To match steps with our customers and suppliers, we had first to ensure the health and safety of our employees. Being built from the ground up on the cloud allowed us to pivot to a work-from-home model swiftly.
In hindsight, our technology-first approach has been our savior, enabling us to “do more with less for more.” A powerful testament to this adage is how we turned around our supply chain in 3 days at the pandemic’s peak in April and May last year with just 30 onsite staff.
When we launched Moglix in 2015, B2B startups were just 26% of the total startups in India & #B2Bcommerce was the next big area of innovation. Today we are proud to have built a platform that serves over 7 lac SKUs listed on our e-catalog: the largest in India in the MRO category pic.twitter.com/eFxua9YGp7
— moglix (@moglix) May 17, 2021
Our digital supply chain network is also a key enabler of our efforts to go global and transcend geographical boundaries. Over the past year, we have been able to integrate the UAE and the U.K into our supply chain. We exported PPE kits to 4 locations in the United Arab Emirates and 3 Ply masks to the U.K that were approved by International Quality Certification Services UK Ltd and CE certified.
What’s Next: The Immediate, The Intermediate and the Long-Term
The second wave of the COVID19 pandemic has severely impacted vulnerable communities in India in ways least expected. In the immediate aftermath of the pandemic, we will continue to support communities of people through our PPE supply chain solutions as we have been doing over the last year. While we have enabled PPE kit availability for 10 million people across 120 countries and 500 locations across India, we have now taken an initiative to streamline the oxygen concentrator supply chain through our group sharing model.
We are collaborating with 10 large enterprises, NGOs, and RWAs to enable communities of people to access oxygen concentrators across India through our innovative network-based distribution model. Learn more about our role in solving the oxygen crisis here.
Our focus on First Principles Thinking, how we define the market, and success criteria has led us to create the new operating system of B2B commerce for the manufacturing world. Looking forward to achieving many more such milestones as we continue our quest to build a bigger manufacturing economy.
How Can OEMs Benefit from e-Procurement in UAE
How Can OEMs Benefit from e-Procurement in UAE
e-procurement in UAE is not an isolated scenario; today’s world is running on digital wheels. Every industry is employing its digital skills to reap improved performance. The opportunities are immense.
However, despite continuous evolution, OEMs are slow to adapt to digital tools and techniques. It is because of the over-reliance on traditional skills and methods. As a result, the cycle from indirect procurement to the final delivery to customers, consumes 80% of the time of sourcing teams.
Cutting corners has become the pandemic-enforced trend to maximize profits in a business. At this time, digitalization in the supply chain can be a worthy step. It offers multiple advantages and underlines significant growth in the figures. To best understand its influence, let us unearth some key benefits.
Solving the Challenges in Supply Chain
The world is still recovering from the impacts of the COVID-19 pandemic. If we talk about the manufacturing sector, the virus has piled up on the challenges it was already facing. The COVID-19 induced lockdown dealt a heavy blow to the UAE economy, with businesses, and their supply chain all bearing the brunt. The International Monetary Fund (IMF) projected a 6.6% contraction in the GDP last year. It was mainly due to the impact of COVID-19 on key performance sectors and the fall in oil prices.
Sourcing the raw materials took the backseat, which resulted in a dip in manufactured products. Subsequently, the supplies to the end-users also got hampered. The dampening of business activities posed several challenges for the businesses to overcome.
To resolve the challenges, making a move in the right direction is imminent. With digitalization, businesses can adhere to the COVID-19 guidelines while conducting their business activities. Digital supply chain solutions are the most basic and foremost available methods to revive the lull operational activity.
Aligning with the Economic Growth
The UAE government announced a financial stimulus package to the tune of AED 100 Billion, among other measures to dilute the impact of the lockdown. However, the revival is not as instantaneous as the losses.
The IMF painted a brighter picture of the UAE’s economic recovery with a 3.1% growth, better than its 1.3% projection in October 2020. The positive outlook is a result of the combined efforts of the country and its citizens. OEMs can expedite their transition from traditional competencies to modern ones like adoption of a P2P software solution and supply chain digitization initiatives. Procurement automation, also known as P2P automation is integral to OEMs in UAE to stay on the course to recovery.
Taking a Step Towards Procurement 4.0
Since we live in Industry 4.0 era, we can find the production chain going ostensibly digital in its entirety. The ability to get a bird’s-eye view of your complete production link hands a better chance to minimize losses and maximize productivity. Businesses can acquire the necessary information on their logistics, such as the position of trucks, containers, and even pallets. All this at the click of a button.
To promote digital supply chain transformation, the UAE government is already taking steps under its Smart Government initiative to become a paperless government by 2021. The government is inviting the bid for tenders via electronic mode to facilitate a seamless procure-to-pay solution. Through this, suppliers can monitor their purchase orders and also submit digital invoices. This e-Procurement solution aims at digitizing and automating the complete process.
As digitalization is inevitable, OEMs must deploy it in their operational activities to make progress. e-procurement will enable easy management of complex supply chain processes. It will also allow businesses to use their people’s talent in other critical areas that require human involvement.
Experiencing Improved Decision-Making
Data is the key to gaining visibility into the supply chain. It is enabling digital supply chain solutions to divulge critical information to improve your decision-making capabilities and optimize business growth. With procurement automation in place, businesses can effectively monitor key performance indicators. On its basis, they can identify the improvement areas.
Cost-optimization is a must during this period of economic rebound. P2P automation offers this across the whole supply chain management processes. Digitalization’s other advantages are transparency, more visibility, a safe and neat collection of data, and cost-efficiency. All in all, businesses can streamline their processes and manage them effectively.
The Now and the Next for CPOs of OEMs in UAE
Digital supply chain transformation in the UAE is imminent, as the economy branches out to new-age non-oil verticals. However, it should not be in parts. For OEMs in the UAE to benefit from the adoption of e-procurement, CPOs have to take a unified view of the different but interlinked silos of the supply chain. Therefore, CPOs in UAE need to replace multiple solutions for different procurement functions with an integrated procurement automation system and consolidate supplier base management functions into one centralized control tower.
CPOs and the E-Commerce Boom in Indirect Material Sourcing
CPOs and the E-Commerce Boom in Indirect Material Sourcing
Indirect material sourcing has long been riddled with uncontrolled expenditure, non-compliance, and counterfeit products. Traditionally, these risks have made CPOs of large enterprises opt for a direct approach when dealing with suppliers.
With rising costs, potentially unregulated products, and the COVID19 pandemic-led supply chain disruptions in the UAE, a CPO’s job is becoming increasingly stressful. It is especially true for CPOs of large manufacturing enterprises across the Middle-East and North Africa (MENA) geographies where the pandemic has impacted 60% of freight capacity and multimodal logistics.
Integrated Solutions for Procurement
With the e-commerce boom taking over B2B marketplaces, CPOs are welcoming procurement automation solutions with open arms. These new generation P2P software solutions offer scalability, reliability, and risk assessment — all under the same roof.
Besides providing attribute-rich catalogs of pre-vetted, high-quality vendors of indirect materials, these B2B e-commerce solutions offer a dynamic range of functions. Some of these functions are customization, user-friendly interfaces and search options, real-time pricing, and industry benchmark comparisons. With their AI and ML capabilities, these systems can even generate analytics on KPIs such as price spread and per-category spend.
Benefits of E-Commerce for CPOs
B2B e-commerce offers a series of features that are beneficial across the p2p procurement process. They have multiple payment options available in AED, language translation assistance to Arabic, and easy refunds & return policies.
They also offer filtration of vendors based on their proximity to the manufacturing unit, quick logistics, and competitive shipping rates throughout the emirates. Let’s take a look at some of the key benefits e-commerce systems offer to CPOs.
Agility
B2B e-commerce solutions give enterprises quick and easy access to a robust e-catalog of indirect materials, akin to a B2C e-commerce experience. The products and services are structured and itemized based on several attributes and filtered by a configurable list of business rules. This includes but is not limited to compliances, ratings & reviews, technical specs, availability, and shipping rates. These automated systems have rapid TATs across the p2p pathway and endow the CPOs with greater transparency and market awareness channels to make better decisions.
For instance, the global procurement head of an automotive OEM has said that e-commerce adoption for indirect material sourcing has increased their price competitiveness. “It has expanded our knowledge,” he explained, adding that their enterprise is now planning to digitize their direct material sourcing as well.
Cost Savings
Typically, enterprises spend 15% to 30% of their revenue on indirect material sourcing. It is usually valid for enterprises with fragmented spending structures and limited internal resources for procurements. The human capital spent on the traditional procurement process is perhaps the highest. CPOs spend countless hours in monotonous transactional activities that leave them with little to no time for any value-addition work to the enterprise.
However, with digital procurement automation solutions, operational costs in UAE can be reduced up to 40%. More importantly, they offload CPOs with hours of repetitive work. It unlocks critical free time for CPOs to spend on supply chain management and optimization of the p2p procurement process.
Technology Integration
For large manufacturing enterprises, the integration of an e-commerce marketplace with their existing ERP is the deciding feature of pre-investment. By entangling itself with the enterprise’s p2p procurement process, the e-commerce solution automatizes and simplifies a vital link of the digital supply chain. It enables the system to intelligently monitor inventory, issue purchase orders, execute payments, track deliveries, and receive stock. It also minimizes the hassles of negotiations, contract management, and price comparisons.
Some of the advanced digital procurement systems offered by digital supply chain solutions enterprises can seamlessly integrate with ERPs like SAP, Jagger, and Oracle. These systems successfully streamline the accounting, reporting, and controlling of the procurement process, thus building end-to-end supply chain visibility.
Data Cleaning & Management
A global market study indicates that almost 63% of the items listed in a conventional procurement catalog have incomplete or duplicate information. However, with digital supply chain solutions, CPOs can assess their MRO master data quality using the system’s native AI and ML capabilities. These data analytics tools can also learn user behavior over time and generate optimized results that promote operational excellence.
Reports on purchase, fulfillment data, including buying history, spend limits, and wish lists, make it convenient for procurement teams to increase their work efficiency.
What CPOs Need to Know
With increasing demand, the scale of high-quality suppliers of indirect materials is rapidly growing on B2B e-commerce solutions. Some experts predict that by the end of 2021, 60% of the large enterprises will be using digital procurement methods for indirect material sourcing. It is also aligned with the government’s vision to digitize UAE’s economy in the coming years.
With a rationalized and automated procurement solution in place, the role of the CPO is shifting from being a negotiator to that of a creator. The present-day CPO discovers new marketplaces, innovates new procurement strategies, and collaborates with suppliers. The CPO also draws new digital blueprints for quick approvals and reviews, and smoothens the enterprise’s upstream supply chain operations.
Vendor Managed Inventory
Vendor Managed Inventory
Vendor Managed Inventory
What is Inventory Management?
Inventory management refers to streamlining the maintenance of inventory in all its aspects like ordering, maintaining stocks, handling, and distributing raw materials or finished goods. It can be the backbone of an organization to meet sales, marketing, and revenue generation goals. Oftentimes adopting an inventory management software can help drive improvements in IT software when the databases need to be connected across multiple teams to sync accounting and stocks together.
Good inventory management means that stocks are always maintained at the right levels at the right time. This involves the following components:
- Inventory Types – Businesses should always know exactly what they need.
- Forecasting – To predict demand-supply balance and be ready with stock.
- Purchase Order Management- In line with real-time needs and forecasting, orders must be placed with suppliers.
- Storage of Inventory– Knowing where the stocks are and where to dispatch from.
- Handling and Tracking– Involve processing sales, packing, shipping, and keeping track of additions, removals for order fulfilment and stock levels.
- Inventory Management System– Simplifies tracking and accounting so that analysis and business decisions can be made easily.
What is Vendor Managed Inventory?
In the Vendor Managed Inventory, the inventory management is done by the vendor or supplier for the buyer, the buyer usually being a manufacturer, SME, MSME, or any other customer type.
In traditional supply chain management, the buyer identifies the existing inventory level and determines the stocks of raw material, components, or finished goods that are needed as well as the timeframes for addition and subtraction. The buyer then places purchase orders with various suppliers to source the requisite materials. These suppliers will fulfil the orders and raise invoices with the buyer.
Vendor Managed Inventory takes this process out of the buyer’s hands by identifying the stock levels and the requisite inventory, and supplies everything as agreed upon, and only raises the invoice. The buyer need not concern themselves with managing the inventory and closing any demand-supply gaps. It’s all done by the vendor, often including the sustainable packaging requirements during procurement.
For inventory management by vendors to be successful, some important factors must be in place as follows:
- Very clear communication about the scope of the inventory management and buyer expectations in terms of stocks and timeframes.
- Modes of efficient exchange of information- whether to use apps to communicate needs in real-time or pre-determined needs maintained via sheets, etc.
- Escalation Matrix for when there are emergencies or immediate orders to fulfil.
- Agreed-upon procedures for periodic performance review
- A collaborative approach towards vendors and open information sharing.
The most famous examples of vendor managed inventory include giant retailers where hundreds of suppliers or vendors maintain inventories of their product within the massive warehouses. Closer home, many B2B companies like Moglix, favour vendor managed inventory due to its advantages.
Benefits of Vendor Managed Inventory
Vendor Managed Inventory (VMI) improves the supply chain’s efficiency and contributes to higher sales and faster inventory turnaround.
- VMI takes the trouble of maintaining stock and getting end customers what they need out of the buyer’s hands. The buyer can invest time and other resources in optimizing the sales and development growth aspects of the business.
- It reduces any chances of delay in restocking due to communication or logistics lag between the supplier’s provisions and the buyer’s order. The buyer can potentially never go out of stock if the system is designed well with good forecasting and analysis.
- Vendor Managed Inventory makes it possible for the vendors to gain valuable insights into the sales data and demand-supply. It improves the ability to forecast future requirements for big orders or projects.
- Buyers can cut down carrying, purchasing, and administrative costs by outsourcing inventory maintenance. The need to maintain safety stock and high inventory drops as do warehousing costs.
It can also cut down on the consumption of resources as vendors can be incentivized to adopt sustainable packaging practices at more achievable scales.
Vendor Managed Inventory for Sustainable Packaging
Maintaining large inventories comes with the drawback of packaging waste and pollution for manufacturing industries and FMCG sectors. Companies have historically tried to cut inventory management costs and have faced backlash in recent years due to environmental damage.
Moving to a Vendor Managed Inventory model can help with the global shift towards sustainable packaging for SMEs, MSMEs, and large companies alike. Sustainable packaging solutions providers like Moglix enable lesser consumption and more recycling while mediating vendor managed inventory. They can help procure goods from vendors that will undergo sustainable packaging and then storage at Moglix warehouses before shipping with their freight logistics partners. Contact Moglix for your procurement and sustainable packaging needs.
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
Vendor Management
Vendor Management
Vendor Management
What is Vendor Management?
A vendor is someone that provides goods and services to organizations. A large organization deals with hundreds if not thousands of vendors at a time. Organizations have to select the best vendors after scrutinizing the available options. They have to negotiate vendor contracts, evaluate performances, track supplies, manage relationships, and ensure timely payments. Vendor management is the process when companies do all these activities to manage their vendors effectively.
Benefits of Vendor Management
An organization that manages its vendors effectively and efficiently will enjoy the following benefits:
- Selecting the best vendors
Price shouldn’t be the key metric when selecting vendors. An organization that is serious about vendor management often selects vendors by a variety of metrics. Metrics such as reliability, reputation, turnaround time, etc. are as important as the price. Additionally, organizations must select packaging vendors that use sustainable packaging. Sustainable packaging is great for the environment. Furthermore, sustainable packaging enhances the quality of packages and brings down the cost. - Managing documentation
A large organization has tons of vendors for different geographical locations, raw materials, and so on. Even vendors that supply the same thing in the same place can have different contracts based on how their contracts were negotiated. Other than that, there are a variety of documents that need to be managed. As such, organizations should have a centralized system where all the documents of different vendors should be kept, and all the important information can be seen from the platform itself. - Performance management
To manage vendors effectively, their performances must be compared on Key Performance Indicators (KPI). A system where managers can see all the vendors’ performance on the KPIs would lead to an accurate assessment of vendors, increase efficiency, and improve the company’s performance.
Challenges
Managing vendors is not an easy task; here are the challenges an organization is likely to face:
- Selecting the best vendors for the job
Price shouldn’t be the key metric when selecting vendors. An organization that is serious about vendor management often selects vendors by a variety of metrics. Metrics such as reliability, reputation, turnaround time, etc. are as important as the price. Additionally, organizations must select packaging vendors that use sustainable packaging. Sustainable packaging is great for the environment. Furthermore, sustainable packaging enhances the quality of packages and brings down the cost. - Confusion between vendors
Without a good system in place, chaos can ensue. For example, relying on multiple packaging vendors can result in an increase in supply costs and quality issues. Additionally, through their system, organizations should ensure that their packaging vendors use sustainable packaging. With the increase in global warming, sustainable packaging is the way to go. Sustainable packaging can also bring costs down. - Managing contracts
Organizations enter into a wide range of contracts with different parties. With vendors, organizations often negotiate the terms in a long process and then sign the contract. As such, there are a lot of differences even among similar contracts. As such, a contract management system that helps in negotiating, managing, signing, and renewing contracts is a must these days. - Managing risks
Many things can go wrong when an organization is working with a wide range of vendors. Potential incidents such as breach of contract, a breach in compliance, security issues, to name a few can make things difficult for an organization. They should be able to monitor risks that can result in monetary and reputational loss.
Vendor Management Processes
The following are some vendor management processes:
- Setting up parameters
Organizations need to set up parameters on which vendors should be scrutinized. Vendors that provide products/services of a similar nature should be compared to the same parameters. Organizations should also have business goals in mind when selecting vendors. This will make it easier to gauge the performance of vendors later on. Organizations must have sustainable packaging as one of the parameters. Sustainable packaging is not only great for the environment, but it enhances the reputation of an organization. - Vendor Management Team
A vendor management team is a must for a large organization. This team should have the business acumen to select the most suitable vendors, negotiating contracts, assessing vendor performances, and ensuring timely payments. This team should be responsible for maintaining healthy relationships with all the vendors. - Vendor Database
A database for all information related to vendors will go a long way to improve an organization’s efficiency. Vendors should be categorized based on their type, function, or any other metric the company chooses. This will help in comparing the performances of vendors that serve similar functions. A centralized database will streamline data and provide key insights with the help of Artificial Intelligence.
Conclusion
Organizations are always trying to expand their business. As they grow, they have to deal with a wide range of vendors. To ensure that organizations stay efficient when dealing with vendors, an effective vendor management system is essential. The performance of vendors affects the business of an organization. You should design an apt vendor management process to ensure that your vendors provide value to the organization. For more information, fill the form attached in the footer or contact us.
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
Moglix becomes Latest Startup to Join the Unicorn Club
Moglix becomes Latest Startup to Join the Unicorn Club
Moglix, a B2B e-commerce platform for manufacturing goods, has raised $120 million as a part of its latest series E funding round, led by Falcon Edge Capital and Harvard Management Company (HMC), taking the overall valuation of the company to $1 billion.
Existing investors Tiger Global, Sequoia Capital India and Venture Highway also participated as part of this round.
This is almost a three-time jump in valuation for the company which had last raised $60 million in July 2019, at a valuation of $200 million-$300 million.
Read: Moglix launches supply chain finance platform Credlix
With the current equity infusion, the total funds raised till date by Moglix stands at $220 million.
“We started six years ago with a firm belief in the untapped potential of the Indian manufacturing sector. We are glad that Falcon Edge Capital and Harvard Management Company (HMC) have partnered with us in this journey. Falcon Edge, with its deep roots in the Middle East and Europe and an understanding of public companies will guide us through the next phase of our journey,”
said Rahul Garg, founder and chief executive officer, Moglix.
The six year old startup provides manufacturers with industrial goods through its e-commerce platform, and is building an operating system for manufacturing that provides its customers a full stack service covering procurement, packaging, supply chain financing and highly integrated software.
Supply Chain Management
Supply Chain Management
Supply Chain Management
What is Supply Chain Management?
Supply Chain Management (SCM) is the management of the flow or supply of goods and services from the point of origin to the point of consumption.
SCM involves the movement and storage of goods from raw materials to finished goods. It is done by creating a network chain of a supplier from the manufacturing sites to the companies or the location of point of sale . These supplier’s networks and links are crucial in the SCM to supply goods and services effectively and economically. The economic supply benefits both manufacturers and retailers to reduce inventory costs.
Study shows that 57% of companies believe that SCM provides a competitive edge to their business. The end goal of SCM is to improve the quality and performance of supply. The convenience of this supply chain helps manufacturers in shipment of goods and services, as they can reduce or increase the limit of supply according to the demand.
How Supply Chain Management Works?
The supply chain is a reliable link of suppliers for the smooth flow of goods and services from production till shipment and distribution. Every product that reaches the market is the result of organised and planned efforts of supply chain management. Recent studies show that 65% of executives report changes in the supply process..
These are components that are crucial and responsible for the performance of supply in the SCM system.
- Planning
In the process of supplying goods and services planning is the most crucial stage. It is done before the beginning of the supply chain. While planning the entire supply process the SCM checks all the important factors like manpower required, the demand for product or service, profit, costing, etc. - Sourcing
In this process, SCM chooses the supplier for the supply of goods and services. It is essential to provide good resources to the suppliers for the quality and performance of the whole process. SCM works to maintain a good relationship between suppliers and manage the ordering, receiving, and payment process. - Manufacturing
In this process, SCM works to organise the raw materials and manufacturing of the product. All the required quality checks, the packaging process, and the delivery schedule are done in this stage. - Delivery and Logistics
SCM organizes all the orders and schedules the delivery in this stage. Dispatch of the products, receiving payments, and invoice generation is the key process while delivery. Transportation and logistics account for around 12% of the global GDP. - Returning
A supply network is created to pick the exchange or return products from the customers in this stage.
Importance Of Supply Chain Management
An effective supply chain network helps the organisation to create and maintain the standard and quality of supply for the customers. It helps the manufacturer and companies to cut down the cost of supply from the production to the delivery. With good supply partners and networks, companies can supply the goods and services globally to the International markets.
Supply Chain Management is important to solve the delivery and return/exchange related problems of the customers. It works constantly to improve the quality of service by identifying the potential problems and issues in the supply process. SCM software and analytical tools further organize the ordering and shipment process of products.
Key Features Of Supply Chain Management
There are certain factors in the SCM to make the supply process of the product more effective. These are some of the key features in SCM which is crucial to maintain the good reputation of the organisation.
- Connected :
Managing organised and unorganised data from social media and other internet platforms. - Collaborative
Collaborating with the supply partners to improve the supply performance by using a cloud-based commerce network. - Cyber aware
Protection of the SCM system from hackers and other cyber-related issues. - Comprehensive
All the data and insights are scaled in real-time to avoid future supply errors. 50% of professionals believe technology plays a crucial role in the supply chain industry.
Example Of Supply Chain Management
One of the classic examples of supply chain collaboration is Walmart and Procter & Gamble who started working together in the late 1980s. Retailers and manufacturers used to share limited information before these two companies started working. Because of its good influence and strategy, Walmart formalised the retail link system in the early 1990s.
Another good example of SCM is Walgreens Boots Alliance Inc. which worked effectively to transform its supply chain system in 2016. This company has one of the largest pharmacy chains in the United States.
CONCLUSION
SCM plays an important role to overcome all difficulties in the supply chain. It helps companies to find the solution to all the challenges in the process of supplying products from the production to the marketplace. The organisation needs to have a dependable supply chain network to provide better service to the customers.
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
Supplier Management
Supplier Management
Supplier Management
In today’s fast-paced world, supply chains are continually evolving into multifaceted dynamic models. To accommodate the heavily changing demands of customers, companies need a robust Supplier Management plan.
What is Supplier Management?
Supplier Management is seen as a supporting pillar of the supply chain function that deals with the end-to-end activities of suppliers. Competent suppliers are crucial for the growth of a business, whether a manufacturing unit or a food retail chain.
At some point, every business or organization purchases goods and services from vendors (suppliers) to reduce manufacturing setup costs. Thus, Supplier Management refers to strategically dealing with third-party suppliers who provide essential products and services for your business.
For example: Consider that you are running a car business, in which the exhaust pipe of a specific car model is imported from a third-party vendor in a different county. You have noticed that the quality of those exhaust pipes is steadily getting worse. In such a case, you can establish a Supplier Management office in that country to regularly interact with those vendors and visit their sites from time to time to ensure the reliability of the parts supplied to you.
Why is Supplier Management important?
As most organizations are expanding their businesses globally, the demand for an effective supply chain is increasing rapidly. Supplier Management also safeguards a company’s sales in the international and domestic markets. It makes the activity of purchasing from third-party suppliers more profitable.
A well-structured Supplier Management model is required to develop good relations with suppliers, while handling customer requirements properly, and communicating these requirements to the company’s vendors..
With an efficient Supplier Management, businesses can import low-cost, high-quality goods and services from other countries without changing the current organization structure. You do not need to build a pen factory when you can order them from a third-party supplier at a discount.
Now that we have established the importance of Supplier Management, let’s look at some benefits of Supplier Management.
- Cost Saving:
With a dedicated Supplier Management team, businesses can understand the supply chain process better and focus on improvements. Supplier Management teams can use SRM (Supplier Relationship Management) tools to continually evaluate the performance of each supplier.
They can ask for quotations of required goods and services from multiple suppliers. This will fuel competition among suppliers and help organizations secure the best deals.
- Reduces Price Volatility:
Suppliers usually develop a professional rapport with their clients and establish trust so that their clients continue to purchase from them everytime there is a requirement. . Therefore, for the sake of long-term business associations, suppliers do not increase the prices of their products frequently.
Companies can take advantage of fixed prices and make long-term contracts with suppliers. A business can thus adjust the prices as per market demand without any price fluctuations from the supplier’s end.
- Quality Improvement:
Supplier Management plays a key role in maintaining quality. With onsite Supplier Management teams, organizations can understand how different markets across the globe function. . Based on this knowledge, businesses can build strategic relations with local suppliers.
To acquire more business, suppliers provide the best products and services to their existing customers, and this ultimately improves the quality of the finished goods and services. Buyers and suppliers can also exchange ideas for continuous improvement.
Buyers can implement ERP tools to track their supplies. They can generate MIS for sales, customer feedback, price fluctuations, and monitor profit figures to get the most out of Supplier Management tools.
In conclusion, Supplier Management is essential for businesses that aim to expand rapidly while effectively handling their suppliers. Supplier Management is a practical approach to maintain profits and increase the efficiency of a business. With the help of Supplier Management tools, companies can coordinate well with their suppliers and ensure significant savings. The traditional ways of managing suppliers are now obsolete. Companies need to adopt well-organized systems like Supplier Management to make informed decisions when buying from third-party suppliers.
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
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