E-Procurement Adoption Amongst Indian SMEs’

Amidst the COVID-19 pandemic, where disruptions to supply chains have become a recurring problem, the importance of a robust and shock-proof supply chain can’t be overemphasised. There are foundries and manufacturing industries involved in producing critical need materials, who need to proactively source raw materials alongside an emphasis on the quality of the materials. The facility of e-tendering and e-contracting ensures speedy fulfilment of the need. Let’s learn why SMEs are adopting raw material procurement in India.

Today, the requirement of e-Procurement solutions is not industry-specific. Large, midsize and growing companies across industry verticals that need cost savings will certainly benefit from the e-procurement system. E-procurement eliminates the cost of procurement resources and empowers the organisations to achieve efficiency, transparency and effectiveness in procurement. Businesses register on these platforms and state their requirements, which has a list of registered vendors who digitally bid for the requirements. And as per the company’s considerations, the contract is given to a vendor.

The Indian manufacturing sector requires a constant supply of quality raw materials for production, and in the conventional approach, there are several risk factors. For instance, the conventional procurement process requires the purchasing department to hold one-on-one interactions with the vendors, where bids are submitted and evaluated manually. This inherently puts a limit to the number of vendors that can bid for a requirement, and this limitation can impact the quality and reliability of the supply chain. Through digital procurement, a lot of complicated and cumbersome processes are either eliminated or become simplified.

Reasons for E-Procurement Adoption Amongst Indian SMEs

#1: E-tendering

Through e-tendering, companies can make the procurement process simpler for specific raw materials and specialised goods, such as machinery, and can easily procure small or large quantities as required.

#2: Vendor management

For any company that requires a steady flow of supplies and raw materials for its operations, vendor management is a core need. This has to be done with a focus on production excellence, cost control, quality assurance, and risk mitigation. Vendor management enhances value from the vendors and contracting speedier and raw material procurement.

#3: Cost Saving

Online procurement of services, equipment and materials is cost saving as there are no middlemen involved. When you are making purchases directly from the government or the source party, the products are authentic and also priced genuinely. This leads to the least chances of fraudulent activities and monetary loss. E-procurement has been beneficial in terms of savings from the cost of sales, administrative costs and staff allocated to logistical tasks.

Technology has replaced all the travel necessary to bid and paper processing. As all the information is now digitally processed, the costs assigned with man-hours requirement for organising the administrative work has reduced drastically.

Conclusion

Manufacturing sector players are now familiar with the role e-procurement can play in resolving their problems and eliminating the supply chain bottlenecks. Advanced AI-driven e-procurement platforms provide constant inputs, analytics and help businesses set parameters for their requirements. By using such platforms to source raw materials, manufacturers can seamlessly focus on productivity and manufacturing without any production and procurement worries. OfBusiness offers raw material procurement for businesses of all sizes. OfBusiness is a one stop solution for all business needs in India.