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.
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Startups fight COVID-19: Moglix fights against India’s oxygen crisis
Startups fight COVID-19: Moglix fights against India’s oxygen crisis
As India battles the deadly second wave of the COVID-19 pandemic, startups, corporates, and individuals are all rallying together to ensure that they are doing their bit. The biggest challenge in the second wave is the dearth of oxygen cylinders along with crucial medicines.
“We estimate the need for at least 100,000 oxygen concentrators across India. However, each person buying an oxygen concentrator for themselves is not scalable and will lead to inefficient distribution of precious resources. Most people will find the cost prohibitive and the requirement short-lived (one to two weeks),”
Rahul says.
B2B ecommerce startup Moglix has been supplying PPE, oxygen concentrators, oximeters, thermometers etc. to essential goods and services companies to ensure their employees are protected. It has also distributed 15 million+ PPE kits and safety items amid this pandemic.
The startup has developed a “group sharing model” for increasing the impact of every oxygen concentrator by 100x, and is enabling organisations, NGOs, trusts, and RWAs to create oxygen concentrator banks for patients and providing a safety net for their communities.
Read More“If your organisation would like to join us in this mission to provide a safety network to corona warriors, please write to us at info@moglix.com. We can help you set up similar network-based models for your organisation and share our learning/ SOPs. Let us come together to do our bit in this fight,”
Rahul Adds.
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Procure to Pay
Procure to Pay
Procure to Pay
What is Procure to pay?
Before defining procure to pay, it is important to understand the process of procurement. All types of businesses, big or small, must acquire various goods and services on an ongoing basis. These goods and services may differ from one business to the other. It involves people from both the purchase and account payables department. The number of people and the complexity of the process depends on the size of the organisation. This acquisition activity is also termed as “Procurement.”
The process of procurement encompasses various activities that range from simple to complex and includes the following:
- Identification of the best source for products and services.
- Negotiations and drawing contracts for the supply
- A purchase order for goods and services
- Delivery of goods and services
- Invoice generation
- Managing account payable
With more organisations taking their business to the cloud and increased need for automation, business houses are adapting to digital ways of doing the activity of procurement.
What is “Procure to pay”?
” Procure to pay” is the term used by software companies to label the final act of buying goods; it is called procurement. This portion includes all the activities that occur once the sources or vendors for products and services have been identified. Hence, procure to pay is the component of a more extensive process called procurement.
Why do you need “Procure to pay”?
Procure to pay, also known as P2P or purchase to pay, is the need of the hour. It has become a critical component of the customer value chain. Delivering superior value to the customer is the key to growth. To ensure superior value, a smooth flow of goods and services to produce the final offering is needed. The two important components that aid in this smooth flow are
- Correct ordering from the source
- Timely payment to the source
What are the advantages of “Procure to pay”?
Procure to pay integrates the various activities and sub-activities performed by the purchase and account payable department for managing the supply chain. Procure to pay brings increased transparency and control to the process of procurement. Some of the key advantages are as below.
- Timesaving
- Paperless
- Enhanced control
- Better visibility
- Better fund management
- Enhances efficiency in account payable processes
What are the steps included in” Procure to pay”?
Procure to pay involves the integration of the purchasing department with the accounts payable department. Usually, the procure to pay system involves the following steps:
- Supply management
- Cart or requisition
- Purchase order
- Receiving
- Invoice reconciliation
- Accounts payable
While setting up procure to pay to remember to build flexibility in the system. A good implementation of procuring to pay caters to the current needs of the organisation and is flexible enough to incorporate future changes as they arrive.
What are the steps excluded in “Procure to pay”?
Procure to pay is not directly related to supplying chain management. It has a strong connection with supply management, which is ensuring the flow of goods and services and has a limited scope. Hence the following steps are not included in the procure to pay
- Sourcing
- Production planning
- Forecasting
What are the challenges with “Procure to pay”?
The challenges in setting up procure to pay can be categorised as below:
- Organisation related
- Employee related
Organisation related
Certain organisations have systems and procedures that are difficult to integrate and pose serious challenges. Information and data quality regarding vendors, finance, etc., are essential for successful execution—an organisation’s ability to provide accurate data impacts the success of procure to pay.
Employee related
Procure to pay integrates procurement and account payables and results in higher visibility and transparency in the transactions. These changes, at times, are perceived as a potential threat by the employees. Implementation of procuring to pay breaks the status quo and attracts resistance from employees. Organisations must invest time and money in managing this change from the traditional ways to Procure to pay.
Conclusion
Today organisations are in between shrinking margins and an aware customer with shifting loyalties. With an increase in the number of players, the landscape across the industries has become highly competitive. Creating, communicating, and delivering superior value is the only way to hedge and grow the customer base. Procure to pay system helps organisations in reducing cost, building efficiency, and creating a superior value proposition. A consistent flow of finished goods and services needs a robust and error-free procurement of essential production resources. Procure to pay helps organisations to create competitive differentiation in the market and gain market share. If you are looking for more on “Procure to pay,” you can contact us (either by filling the form attached in the footer or on the contact us page).
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
Packaging
Packaging
Introduction
Packaging can be defined as the technique of protecting the products, articles for storage, distribution, and sale. It means wrapping the products to look attractive or protecting the goods for safe transit. It also means covering the products to save them from damages during transportation and storage. Packaging is the wrapping material around an item to contain, identify, protect, display, and make the product marketable and clean.
However, the term packaging has been interchangeably used for retail as well as transport container. Consumer packaging has some marketing implications, while transport containers are more significant from a logistics standpoint.
Packaging is also closely related to branding and labelling as it appears on the package, and the brand is typically present on the label. It largely defines the product contained inside. The package contents may be pre-weighed, measured, stored, assembled and then carefully placed in a specially designed box, crate, jar, bottle, tube for convenient distribution.
Materials Used
Different types of materials are used for packaging. These materials are:
- Wood
- Paper
- Glass
- Plastics
- Metal
- Polyester
- Gunny bags
- Straw baskets
- Wooden boxes
- China jars
- Earthenware
- Cellophane paper
Objectives of Packaging
1. To provide protection
Packaging ensures that the product inside is protected against vibration, temperature, breakage, wear and tear, light, moisture, precipitation, leakage, and theft.
2. To enhance marketing
Good packaging with attractive labelling helps the sellers to promote the product to potential buyers. The size, colour, appearance, shape of the packaging is designed in such a way to attract the attention of potential buyers.
3. To convey the message
Sometimes manufacturers print essential information on the packaging about the contents inside, such as usage instructions, raw materials, expiry date, manufacturing process, etc. This information is crucial for users.
4. To provide convenience
Good packaging adds to the comfort in handling, display, transportation, opening, and storage.
5. To enable product identification
Packaging allows a product to have a distinct identity. With the effective use of colours, shapes, and graphics, such identification and distinction are essential in times of tough competition.
6. To enhance brand image
The brand image can be improved greatly, with attractive packaging in a consistent manner over a long time.
Functions of packaging
1. Preservation and protection
The core function of packaging is to protect the contents during transit from the manufacturer to the ultimate consumer. It safeguards the product from any damage as this is a loss and inconvenience to the seller and buyer. It protects the product from dust, damage, leakage, pilferage, chemical change, insect attack.
2. Safe containment
Most products need to be contained before they can be moved from one place to the other. This helps to maintain the quality and reachability of the product.
3. Effective communication
A vital function of the packaging is to communicate the product effectively. It tells the consumer about the product, other instructions, and utility information. Information such as quantity, price, inventory levels, packaging date and time, etc., serves as useful information for the consumers.
4. Convenience
Proper packaging ensures that the product needs less space and keeps the product and its content intact.
Essential qualities of packaging
- Attractiveness of the package
- Enhanced product description
- Convenience of storage and display
- Security of the goods
- Convenience of transportation
- Easily disposable
Types of packaging
Packaging can be segregated based on the items it contains.
Bulk/family packaging
A package of a particular manufacturer is packed in an identical manner. The shape, colour, and materials used for packaging will be similar for all the manufacturer’s products.
Reuse packaging
Sometimes the packaging can be used for other purposes after the goods have been consumed. It is known as reuse packaging.
Consumer packaging
This package holds the required volume of the product for ultimate consumption and is more relevant in marketing products such as tobacco, cigarettes, beverages, etc.
Transport packaging
The products traded to different places need to be packed well enough to protect them from damage during transport, handling, and storage.
Problems encountered in packaging
- Costs of packaging
- Convenience
- Reuse purposes
- Appearance
Conclusion
To conclude, packaging is the coordinated system of preparing goods for transport, warehousing, sale, logistics and end-use. Apart from serving a practical purpose of protection and preservation of the product’s quality, it is the aesthetic appeal part of packaging that makes it more interesting. The visual impact of the packaging can be a unique selling proposition of a product, because sometimes you do judge the book by its cover!
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
Indirect Procurement
Indirect Procurement
Indirect Procurement
What is Indirect Procurement?
Indirect Procurement is the process of procuring services or products required to run any business. To ensure that the business runs smoothly, one will need services or products continuously. The goods and services obtained through Indirect Procurement are not the ingredients of the finished goods or services that a business offers to its customers. These will not impact the profitability of the organization directly. It is more to do with inputs getting converted to the desired output effectively. For example; the procurement of an outside vendor for facility management of the office premises or furniture and stationery for the staff. The goods and services brought in through Indirect Procurement are for internal stakeholders’ consumption and not for external customers or vendors. Business houses are seen to have a spending range between 15-27% of their revenue on Indirect Procurement.
What is the difference between Direct and Indirect Procurement?
Direct Procurement
- It involves purchasing raw material and Goods that are used in the manufacturing of the finished products.
- This will have a direct impact on the bottom line of the business and helps organisations to create profits, drive performance and create competitive differentiation in the marketplace.
- Direct Procurement involves purchasing goods from suppliers at the best possible rates, quality, and price, hence; the procurement team needs to be relationship-oriented with the suppliers.
- This involves purchasing goods in bulk to achieve economies of scale.
- Wrongly managed direct procurement can lead to the halt in the manufacturing process of an organisation.
Indirect Procurement
- It involves purchasing goods and services that are required for the smooth functioning of any business and aids in developing and maintaining various operations of the business.
- This does not have a direct impact on the profitability of any organisation.
- Indirect Procurement is all about getting the lowest possible rates as it involves managing expenses; the procurement decisions are more price sensitive.
- This involves identifying procurement sources that are cheapest.
- Wrongly managed Indirect procurement can lead to an increase in expenses and an increase in dissatisfaction of the internal stakeholders as it involves working with a more complex internal stakeholder environment.
What are the Skills and Strategies Involved with Indirect Procurement?
Indirect procurement usually deals with procuring goods from hundreds of categories, multiple suppliers, and category expertise across to procure at the lowest available cost. It involves catering to a much more complex environment of internal customers that are well informed and need the team’s support for procurement. Most of the internal stakeholders see truly little value in indirect procurement as an activity. Indirect Procurement also involves advising the internal stakeholders on their budget availability and spendings in an environment where they have little or no mandate on their spending budgets.
The key skills needed are as below:
- Expertise in a broad range of categories.
- Influencing and advisory skills.
- Identification, sourcing, appointing, negotiating, and managing suppliers.
- Cost management skills.
- Data mining and analysis skills.
- Update on changing technical and supplier environments.
Strategy: Like Direct Procurement, Indirect Procurement involves developing a cost-saving sourcing strategy. The organisation big enough to appoint a procurement team usually follow a system of “Procure to Pay“. This would require the procurement team to do the following:
- Create a detailed list of categories of products and services that they need to procure.
- Source, the various suppliers for each category in the list.
- Identify the best supplier for each category and negotiate the lowest possible rates.
- Decide upon the most preferred cycle for final invoice payment.
For smaller organisations who cannot afford to have an Internal Procurement team, partnering with a group purchasing organisation(GPO) would be the best solution. The group purchasing organisation offers small organisations the advantage of combined purchasing power and access to discount programs from top suppliers that otherwise is out of reach for them.
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
Indirect Cost
Indirect Cost
Indirect Cost
What is Indirect Cost?
In all sorts of departments like production, research, retail, and accounting, a cost is defined as the value of money that has been used up to produce something and also deliver a service.
Most businesses believe that the cost could be defined as one of the acquisitions, in which the amount of money which is expended to acquire the same is being counted as cost.
Generally, in the field of economics, the cost could be referred to as a more generalized version of the field of economics, where cost is a metric that is added up as a result of a process or maybe as a differential that could help make a decision. This cost is further broken down into direct and indirect costs.
What is an Indirect Cost?
Those costs that aren’t accountable directly to an object of cost, like that of a particular project, facility, function, or product, are being referred to as indirect costs. These kinds of costs could be either fixed or variable. Costs like administration, personnel, and security costs are classified as indirect costs.
Indirect costs aren’t related directly to production, and some of these could be overhead as well, where the overhead costs could be directly attributed to a project. Most costs that are usually being allotted indirectly are those costs that are being related to transport, administration, selling and distribution, office and security, shipping, postage, utilities, and rent.
Types of Indirect Costs
Indirect costs could be categorized further under two categories: fixed indirect costs that contain activities or costs that are fixed for a particular project or company, like that of transportation of labor in the site of work, the building of temporary roads. Others in the category could be classified as recurring indirect costs that contain activities that repeat for a particular company like record maintenance or the payment of salaries.
Additionally, indirect costs aren’t directly attributable to a cost object. Even though it may financially not be feasible, indirect costs are mostly allocated to a cost object, such as overhead. For instance, those costs that aren’t directly assignable to the end product are those that are indirect.
About Indirect Cost
Indirect costs could be variable and fixed sometimes. They are mostly not related directly or could be traced to each product unit, but it may vary considering the result of the output. Examples may be cited concerning the manufacturing industry, perhaps the electricity bill.
Also, fixed indirect cost isn’t that traceable or that there’s a direct relationship with each unit of the product, and it doesn’t show much differences output-wise like that of the salary of a nightguard.
Sometimes names like overheads, administrative costs, or facility costs are also called indirect costs. There could be a lot of variation for indirect costs that differ from industry to industry.
Most companies benefit from indirect costs that help them make a significant decision on pricing. Mostly, all the overhead costs would be added together by the accountant. Post that, it would be allocated based on per unit to compute the calculation of per product overhead. It’s mostly found out that an organization makes a profit on each unit after incorporating the overhead costs.
The foundation for the product pricing strategy is determined by this before setting the desired margin of profit. For all businesses and organizations, it’s of utmost importance to carefully evaluate the indirect labor costs and also analyze its impact on overhead costs for the smooth running of the business.
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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