Jaypee Group is ` 30,000-crore well diversified infrastructural industrial conglomerates in India. The group has diversified into construction, EPC contracts, highways, cement, fertiliser, hotels, hospitals, thermal power, hydro power etc. Pratap Singh Rathi, Assistant Manager (Purchase and Store) at Jaypee Group talks about the major buying factors of construction equipment and mistakes a project developer commits while procuring building materials or construction chemicals.
Procurement strategiesJaypee’s centralised purchase section located at head office supported by various small nodal offices across India to undertake efficient procurement activities. Talking about the company’s current procurement strategies, Rathi says, “Some of the key strategic moves of our company are long-term rate contracts, procurement through OEMs, empowered ERP system (SAP) for rate analysis and inventory management, and technical procurement.”
Buying factorsAccording to Rathi following are the points to be considered while making decision of buying construction equipment:• After-sales service support • Ready availability of spare parts • Costing of spare parts • Self-life of the equipment • Efficiency • Capital cost.
Rent or buy?Speaking on whether to rent or buy capital equipment, Rathi observed, “Engagement of equipment for short-term up to one year is preferred on rental. Out of company profile equipment are preferred on rental.”
Things to avoidAs stated by Pratap Singh Rathi, below are the mistakes a project developer may make while procuring building materials or construction chemicals:• Short-term contracts • Consideration of maintenance cost of items in long-term• Brand perception or image in public for procured items. Sometimes good quality may have low perception in public and vice versa. Developer should act smart while selecting branded items for project • Efficiency or life of the products in long term• After-sales warranty support.
Advantages e-ProcurementSharing his opinion on the achievements toward utilising e-procurement technology optimally, Rathi only said, “e-Procurement is best suited for industry procurements.”
———-Engagement of equipment for short term up to 1 year is preferred on rental.
Pratap Singh Rathi, Asst. Manager (Purchase & Store), Jaypee Group