Negotiate, but maintain quality of service

Negotiating for the best rates is important, but QoS (Quality of Service) is the critical factor.

Procurement cutting across all industries has evolved particularly in the last decade. In any organisation today procurement holds as much importance as finance, HR, marketing or sales division. Dharmendra Punjani discusses about importance of maintaining QoS (Quality of Service)despite negotiating on prices.

FTI to help India
Strategically India has always been looked as a procurement hub for the arms and defence companies worldwide. Post 1991 after opening its doors for FDI in this decade India is poised for a massive FTI (Foreign Technology Investment). This procurement of foreign technology combined with Indian manufactured hardware and software and the huge Indian human resource is sure to take India up to becoming a developed nation.

“The process followed for procurement is more process oriented and refined to extract maximum benefits for the organisation thus contributing towards the overall financial net growth,” points out Mr Punjani.

Main challenges
The word procurement is usually associated with ‘good bargaining’ or ‘better negotiating’ to get good pricing or ‘getting equipment/ material at the lowest cost’. However, procurement is not about all the above.

“Negotiating for the best rates is important, but QoS is the critical factor,” says Mr Punjani. Here QoS is having vast meaning that includes ensuring delivery schedules are being met, smooth logistics, paperwork and better warehousing facilities are being provided so that the quality of material supplied is not getting compromised. The emerging trend is to achieve better QoS coupled with competitive pricing.

A timely supply at better rates is again a challenge presently. Therefore procurement community is in dire need of enough warehouses and efficient logistic facility. It needs fresh and realistic outlook from government. To address the issue of inadequate warehouses and logistics will require a lot of sustained efforts to get to the level desired for a smooth end to end transaction.

Logistics and e-Procurement
The logistics supply chain has evolved over the years. Though there are some issues, the company is in the process of putting in the involved tasks for optimisation.

Budget affects spend management
Effective spend management starts with budgeting. Every project budgeted at the initial or planning stage leads to effective spending. Relcon Infraprojects also has understood the logic behind this fact and has incorporated effecting spending as a part of its project management.

Inventory control
The most important work done by Relcon is in the area of ‘inventory control’ i.e. minimum inventory or simply in time delivery. Delay in deliveries also lead to increase in overall project cost. Therefore, especially in procurement, the company works considering
the fact: ‘A penny saved is a penny earned.’

– Dharmendra Punjani, Head Purchase,
Relcon Infraprojects Ltd.