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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

Supply Chain0

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. 

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.

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How Can OEMs Benefit from e-Procurement in UAE

How Can OEMs Benefit from e-Procurement in UAE

e-procurement0

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. 

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CPOs and the E-Commerce Boom in Indirect Material Sourcing

CPOs and the E-Commerce Boom in Indirect Material Sourcing

e-procurement, Supply Chain0

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.

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Moglix becomes Latest Startup to Join the Unicorn Club

Moglix becomes Latest Startup to Join the Unicorn Club

Press release0

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

Press release0

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.

“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

Glossary0

Procure to Pay

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Home Glossary 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).

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My vision for Moglix is to change the face of industrial commerce: Rahul Garg

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