Established over 4 decades ago, Oriental Structural Engineers (OSE) has firmly etched a name for itself as one of India’s foremost EPC and BOT contenders in the roads and highways sector.

Sandeep Agrawal, President – Supply Chain Management of the company highlights the current procurement strategies. Some of the major strategies include:
• Centralised procurement: OSE has a well-established procurement system in which all the execution sites of the company with a wide geographical distribution can procure through a common purchasing organisation. High value procurement is being done directly by the centralised unit whereas execution sites are permitted to make local procurement based on Standard Operating Procedures (SOPs) and Work Instructions (WIs) issued by centralised unit from time to time.
• Import savvy: OSE explores the possibility of importing its requirements. However, according to Agrawal, depreciated rupee is proving to be a spoil sport in this endeavour.
• Supply chain management: OSE takes procurement as part of SCM which also takes care of aspects like logistics, inventory and disposal.
• Green purchasing: Green purchasing refers to the procurement of products and services that have a reduced adverse effect on human health and the environment when compared with competing products or services that serve the same purpose.
• Vendor relationship.

Buying factors
Agrawal highlights some key points which should be considered while making decision of buying construction equipment:
• Brand: Intrinsic quality of equipment is paramount especially when targets of completion are water tight. OSE has a large fleet of CAT, Volvo, Komatsu and JCB equipment.
• After-sales service: The OEM needs to have its service centres and warehouses at all the major points of consumption.
• Reliability: In BOT environment, it’s very important that all the equipment a project developer procures is extremely reliable in terms of its availability and productivity.
• Price: Though pricing is an important factor, OSE opts for overall value for money.

Lease or buy?
Hiring v/s buying has assumed a strategic significance. Agrawal feels, “Complicity of the job also governs the decision. There is no point in buying equipment if the requirement is for a shorter duration. We may go for hiring if requisite funds are not available for procurement; steep interest rate makes it further challenging. If procurement involves long lead time and the equipment is required on priority, we may opt for short term hiring. If we plan to use the equipment very frequently in spite of using it for shorter durations, it makes sense to own the equipment. Availability and competitive hiring rates also incline our decision towards hiring.”

Select quality aspect, not price criterion
Speaking on the mistakes a project developer may make while procuring building materials or construction chemicals, Agrawal believes, “The biggest folly is not giving due consideration to quality and dosage aspect and selecting a product on price criterion alone. Another mistake can be of ordering for the material without threadbare study of technical parameters. Also we should opt for blanket (open) ordering for major raw materials with provision of price revision rather than releasing orders very frequently.”

Another mistake can be of not giving due consideration to shelf life, most of the chemicals have a shelf life and its disposal policy. All the chemicals have strict environment regulations, Agrawal adds

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We expect that e-Procurement shall reduce our overall ordering cost, ensure a competitive environment and elevate supplier’s accountability to meet our standards.

Sandeep Agrawal, President – Supply Chain Management, Oriental Structural Engineers Pvt Ltd