Procurement
Procurement
Procurement
Businesses are reinventing their operations to adapt to the new normal and steady the ship. For manufacturing and production units, procurement of raw materials and other essential goods is an integral part of their daily activities.
In the post-pandemic world, businesses witness a makeover, and logistics is one of the critical components. If you are a manufacturing business, learning about procurement nitty-gritty becomes binding.
The more informed you are about the processes, the better decision-making abilities you will possess. Continue reading to learn about procurement in detail.
What is Procurement?
Procurement is the complete spectrum of activities within an enterprise related to purchasing goods, services, and works. It is an essential part of supply chain management in businesses, typically pertaining to manufacturing and production.
Since your business operations require raw materials to manufacture the end product, acquiring these materials at pre-negotiated prices and conditions is called procurement. You must note that procurement happens when one business purchases goods from the other business on a large scale.
Key Principles of Procurement
The procurement team or department of your business should have the following principles as the bedrock of procurement activities:
- Value: While pricing remains the pivotal factor, you must also look for the quality of products or services and overall business experience while procuring.
- Fair Competition: Your business should maintain transparency in the procurement process. It will help you in two ways: one, you won’t fall into any legal troubles. Second, you can find a supplier that provides the best deal.
- Ethics: Ensure that your business does not get involved in unethical practices. It will harm your reputation and skew the vendor selection process. Thus, the overall procurement process will suffer.
- Keeping Records: Accountability becomes easy when you have complete records of the activities.
- Equity: You should follow this principle to present the existing and potential suppliers with a level playing field to thrive.
Components Of A Procurement Plan
Your procurement team needs to include the following components while devising a plan:
- People: Depending upon your business and purchase order size, you can build a procurement team capable of handling the complete procurement process. While small and medium enterprises (SMEs) can prefer a smaller group of people, big firms require dedicated personnel for each stage.
- Processes: Your business should maintain transparency in the procurement process to avoid any legal repercussions and fraud. A well-designed process from placing the order to the final receipt would help you keep track of activities at every stage.
- Records: A comprehensive record-keeping, including transactions, messages, and other mission-critical information, ensures accountability of both buyer and vendor at any stage of the process. Also, your procurement team can analyze the vendor’s performance and relative costs.
Procurement Models
The series of steps associated with procurement defines the procurement model. Your business should follow one of the three procurement models listed below:
- Local Procurement Model: In this model, making decisions is at the local or departmental level. No centralization of the process means no involvement of higher management. It adds agility to the model but risks overspending.
- Centralized Procurement Model: Central management has complete control over procurement processes. Businesses keep overall budget and expenditure in mind before making purchase decisions.
- Hybrid Model: A combination of local and centralized procurement models is called a hybrid model. It gives an edge over both models, as local departments enjoy autonomy under the central management.
Types Of Procurement
You can divide the procurement process into two types: Direct Procurement and Indirect Procurement. Let us understand them in detail.
Direct Procurement
The raw materials your business procures to manufacture the end product is direct procurement. Its input cost and efficiency determine the performance and profitability of your company. Any hindrance to its supply can hamper the manufacturing process.
Indirect Procurement
It refers to the procurement of services not linked with the manufacturing process directly but essential for daily activities. Maintenance services of equipment and office supplies are indirect costs borne by your company. Any challenges to indirect procurement can hamper business 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
Packaging Design
Packaging Design
Packaging Design
What is Packaging Design?
There are many ways for a customer to distinguish your brand, and product packaging is on that list. From selecting product packaging to its design, everything resonates with the customer’s perception of your brand.
The product packaging you choose can establish your brand identity as it acts as a platform to present your products. Customers can look at it as the face of your entire organisation.
You need to brainstorm to develop the right kind of packaging to boost your sales and get an edge over competitors. Merchants have this tendency to overlook packaging; however, it can dent the overall shopping experience of customers.
To save you from those blips, we will cover all about packaging design here.
Things To Consider Before You Design
Conducting research is the key. When you are thinking of establishing your brand’s identity through product packaging design, you need to look beyond colour, shape, size, visuals, among others.
Here are four key points to consider:
- Your Target Audience: You need to put yourself in your audience’s shoes to find out what they would prefer in packaging design.
- Generate The Right Feeling: The way you approach your audience will come in handy with the design you want to develop. For example, skincare products will look good in natural, rustic packaging, but clinically-crafted products may not.
- Support Your Brand: If you have a logo, website, and brand name already garnering attention in the market, your packaging should blend with it.
- Competitor Analysis: You should keep an eye on your competitors. It would help if you understood what the industry trends are.
Types Of Packaging Design
On our website, we have listed three types of packaging design according to the products.
Primary Packaging
This form of packaging is in direct contact with the product. We also call it the Consumer Unit. The primary purpose of this packaging is to safeguard the product from damage, spoilage, and contamination.
Some of the key features of primary packaging are:
- It has direct contact with the product.
- It lets consumers handle products easily.
- It adds an appealing look to the products.
- It contains printed information about the product for consumers.
Examples: Polybags, VCI Bags, Mono Cartons, Food Trays, Vacuum-formed Trays, Paper Bags, Blister Packs, Glass Bottles
Secondary Packaging
It is the second layer of packaging that is outside the primary packaging. Essentially used to create a stock keeping unit or SKU, it groups a certain number of products. This packaging acts as a protective layer for the primary packaging. Also, secondary packaging makes the product easily identifiable in warehouses.
Here are its key features:
- It protects the primary packaging of products.
- It is customisable to give products an identity in warehouses.
- It acts as a shipping container in the e-commerce industry to deliver small shipments.
Examples: Seals & Barcodes, Woven Sacks, PP Flute Boxes, Plastic Crates, Air Cushions, Air Bubble Rolls, Angle Boards, Courier Bags
Tertiary Packaging
We refer to it as bulk or transit packaging to transport large SKUs from one point to another. For instance, if you want to shift units from production to the point of sale. Tertiary packaging makes transportation of heavy loads safe and secure.
Below are its key features:
- It is ideal for shifting heavy loads from one point to another.
- It enables easy handling of distribution units.
- It prevents any damage to SKUs.
- It also facilitates easy storage of goods.
Examples: Wooden Boxes, Corrugated Boxes, Fibreboard Drums, Stretch Films, Strap Rolls, Tapes, Labels & Stickers, Pallets
It is also important to note that packaging design should be environment-friendly to support sustainable development goals. Hence, it would be best if you looked for a packaging solution that ticks all the boxes.
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
Enabling the Future of Oxygen Concentrator Procurement
Enabling the Future of Oxygen Concentrator Procurement
The second wave crisis of COVID-19 in India has sparked the need for oxygen concentrator procurement to meet the shortage of oxygen supply across the health continuum. The demand for concentrators has increased from 40,000 per year to 30,000–40,000 per month. If your NGO or resident’s welfare association (RWA) is looking for reliable oxygen concentrator procurement solutions, we have got you covered.
Why Should Your RWA and NGO Procure Oxygen Concentrators?
As patients battle for bed and medical oxygen supply, oxygen concentrators can play a significant role in moderate and extreme in-home/clinic treatment. Usage of these concentrators can ease the strain on hospitals while providing patients with a much-needed window to plan their medical treatment.
What Are the Benefits of an Oxygen Concentrator Bank?
An Oxygen Concentrator Bank or a streamlined oxygen refilling bank with a standardized operating procedure covering clinical guidelines will be beneficial to smoothen the collection and distribution of oxygen concentrators. It will be an efficient service that can be initiated by the local authorities to help thousands of families in distress and urgently need oxygen.
It will eventually help balance the demand and procurement ratio so that enough oxygen is available to overcome the prevailing demand of hospitals and residents. How can you create an oxygen concentrator bank for your RWA and NGO?
Here are five tips on oxygen concentrator procurement for NGOs and RWAs.
1. When to use oxygen concentrators?
Oxygen concentrators can only be used in mild cases of COVID-19 when the patient’s oxygen levels are dropping and the oxygen requirement is at a maximum of 5 liters per minute. Use an oxygen concentrator only for mild and moderate cases when oxygen saturation is >90%.
Patients with mild COVID-19-induced pneumonia with an oxygen saturation of less than 94 will benefit from extra oxygen administered by an oxygen concentrator, but only before the need for hospitalization arises.
You are not at risk of oxygen poisoning if you follow your doctor’s professional judgment in your oxygen therapy.
2. What should be the order size?
Keep 1%–2% of community strength as the number of oxygen concentrators required. The appointment of police officials and managers to coordinate with the RWAs for the smooth working of the oxygen cylinder bank should be the critical point of the SOP.
Each specified official should be responsible for a specific task to ensure the delivery of the refilled cylinder to the deserving family or candidate, getting the cylinder back when the need for refilling is over, then allocating it to the NGOs and RWAs.
3. How to ensure equitable distribution?
Local authorities should accept all types of oxygen concentrators and cylinders from residents. The refilled oxygen concentrators and cylinders should be given to respective NGOs and RWAs to further lend them for a few days as per the need.
The usage terms to borrow a concentrator for 3–7 days should be part of the SOPs. Moreover, NGOs and RWAs should receive refilled cylinders within 24 to 48 hours, which will help to deal with critical patients in a decentralized manner. The division of specific time slots to procure an oxygen cylinder, collect empty cylinders, send to refill, and allocate a filled cylinder will create an efficient distribution system. A special team can parallelly procure oxygen and collect medical documents and carefully check the prescription of the person needing it to validate the demand.
Additionally, volunteers can help organize home quarantine programs, mental health counseling services, a volunteer SOS task group, insurance coverage, and a COVID support fund for the COVID warriors and workers who keep the vital supply chain going.
4. How to ensure safety and hygiene rules?
Ask the oxygen cylinder suppliers to sanitize and hold back used oxygen concentrators 24 hours before subsequent use. Check for the flow rate capabilities of the oxygen concentrator before distribution so that high and low flow rate concentrators can be collected and distributed separately.
With the help of local government officials, senior colleagues, and administrators, create an oxygen guideline. The SOP should include a training scheme for physicians, nurses, and other oxygen users—implementing the agreed-upon hospital strategy and creating dosage and patient observation sheets to help standardize oxygen therapy.
5. How to track and trace orders and deliveries?
Ask for a dedicated resource for your community from the supplier to act as a single point of contact. Coordinating with the oxygen cylinder bank, oxygen concentrator suppliers and a collaborative effort to make different zones within the specific area for refilling the cylinders will help reach the required facility on time.
With these tips, NGOs and RWAs can make the procurement and distribution of oxygen concentrators efficient. The oxygen supply chain workers and the NGOs and RWAs looking for oxygen cylinder procurement should consider the following points:
- Check for the power consumption, warranty, size, and portability of the oxygen concentrator. The noise level should be between 40 and 58 decibels.
- Avoid being close to open flames while using an oxygen concentrator or tank. Keep a distance of at least 10 feet from open flames. Ensure that cigarettes, lamps, and gas stoves are out of reach.
- When using oxygen treatment, avoid using an electric razor; they have a knack for spitting sparks.
- When using supplemental oxygen, avoid putting on or taking off clothing that is vulnerable to static electricity.
- Since oil- and petroleum-based materials are flammable, please do not use them on the face while using oxygen.
Please contact us at info@moglixbusiness.com if your NGO or residents’ welfare association is looking for oxygen concentrator procurement solutions. We can assist you in establishing comparable group-sharing models for your local community and share our expertise and SOPs with you. Let us collaborate now to make a difference in people’s lives! Contact Us
It takes Rahul Garg’s toolkit to make an industrial goods platform a unicorn
It takes Rahul Garg’s toolkit to make an industrial goods platform a unicorn
Sensing the oncoming storm, Rahul Garg knew that India is heading towards trouble. Within a few weeks in April, Mr. Garg and his team at Moglix began working with manufacturers of oxygen concentrators in India, while also sending charter flights to China and Germany to procure the concentrators. Since then, the company has procured some 6,000 oxygen concentrators, which Moglix has been selling to corporate and industrial houses in India. They, in turn, have been giving them to their employees on a group-sharing model, based on a template developed by Garg and Moglix
“We have probably touched half a million lives through oxygen concentrators,”
Rahul says
Moglix, a company that Garg founded in 2015, is part of a consortium where 10 manufacturers have come together to ramp up oxygen concentrators to make India self-reliant in the segment.
Read More“We are working with them on both the global and domestic supply chain on raw materials,”
Rahul adds
Join our team at Moglix, India’s latest unicorn, and fastest-growing B2B marketplace
Join our team at Moglix, India’s latest unicorn, and fastest-growing B2B marketplace
Work where it matters! Join our team at Moglix, India’s largest and fastest-growing B2B marketplace, which now has joined the unicorn club. With close to 500,000+ SKUs, Moglix has a supply chain network of 16,000+ suppliers, 35+ warehouses, and logistics infrastructure, making its marketplace the largest eCommerce platform in the industrial goods category in India. If you’d like to be part of Moglix’s growth story, these job openings may be for you.
Lessons and Insights From HR Leaders During Pandemic
Lessons and Insights From HR Leaders During Pandemic
On the occasion of International Human Resources Day, Read some interesting insights from the leading HR professionals of India Inc. and the lessons learned from the last 1.5 years, since the pandemic struck.
Read MoreMoglix: 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.
Back