With the opening of economy, there are more markets opening up, this gives purchaser an opportunity to explore new supply markets, alternate products and services, alternate technology.
The Runwal Group believes that it has transformed the real estate scenario in Mumbai with its oriented approach, far sightedness and a keen sense of judging the changing tastes and preferences of the people. Mohan Upadhye analyses the current trends in procurement and highlights the possible growth opportunity through 100 smart cities project.
Current trendsTypically for the construction industry, there are quite a few new trends emerging. Mr Upadhye points out some of them as:• Exploring usage of e-Procurement, either just plain bidding process or a complete e-Auction. This is making procurement more and more transparent moving away from good old secretive nature in the past• Long-term vendor relationship rather than scouting for new sources every time• Benchmarking not just within the same industry but across other industries too.
In addition, one major trend being observed is developing of ‘follow me’ technique instead of scouting for supplier each time. The trend includes taking the supplier on-board and on desired result, trying and using him again and again, project-after-project.
Growth opportunity“With the opening of economy, there are more markets opening up, this gives purchaser an opportunity to explore new supply markets, alternate products and services, alternate technology,” says Mr Upadhye.The Indian govt. is planning to build 100 smart cities which would be a great opportunity, especially for construction sector. Runwal Group senses a huge potential for growth through the said ambitious project. Each city would have to be self-sufficient so there is a scope of expansion across all the sectors; not just residential and commercial but it would mean development of infrastructure, hospitality, retail, hospitals and educational institutions etc.
“There would be lot of benefits that would accrue due to shear economies of scale,” adds Mr Upadhye. “However, there is a word of caution; this may also lead to some scarcity of supplies if supply industry is not able to keep pace with the increased demand.”
ChallengesMr Upadhye observes, “Sourcing of basic building materials like aggregates and sand is a big challenge. This is mainly due to supplier-base being unorganised and also due to involvement of local political entities. “Many times prices that are paid need not be real and quality of supply and suppliers also become questionable,” he adds. “Even though trend is to go for value added products, these all products, at a time are not cost-effective.”
e-Procurement: the future Although, e-Procurement has been in vogue for quite some time now but till recently, it was not being used on a large scale as far as construction industry in India is concerned. However, a big change has been happening in the last couple of years. With a launch of few new software, there is a definitive move towards use of e-Procurement.
 
– Mohan Upadhye, VP – Procurement, Runwal Group