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Evolution of R&M Purchase Department in Soda Ash Division: A Comprehensive Journey

Established in 1984-85 during the commissioning of the Sutrapada plant, the R&M Purchase Department has undergone significant transitions, moving locations and implementing advanced ERP systems, including BaaN and SAP. This department manages procurement for various categories, from raw materials to capital items, ensuring efficient operation during planned shutdowns. Facing challenges such as vendor delivery delays and incomplete specifications, the team is focused on improving PR to PO conversion times and enhancing vendor performance while optimizing procurement processes.

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Evolution of R&M Purchase Department in Soda Ash Division: A Comprehensive Journey

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  1. R&M-Purchase - H A Goswami

  2. Journey of Purchase Dept of Soda Ash • Established in 1984-85 at sutrapada location during plant commissioning stage • Moved to Veraval office in 1986 • Moved to Sutrapada Plant in 1987 • Moved from Sutrapada Plant to Ahmedabad Office in June,1992. • Moved from Ahmedabad to Sutrapada Plant in 1997. • Moved from Sutrapada Plant to Ahmedabad Office in June,2009 • BaaN ERP system was implemented in 1999 • BaaN ERP was upgraded from B2 to C4 in 2001 • SAP ERP system implemented from 01 Mar 2010

  3. Process Flow for R&M Items: Spend - 40 Crs

  4. R & M Procurement- Soda Ash Division • TYPES OF PR ( Purchase Requisition) • NB-2 : Engg & Spares…. ( Series: 120 & 100…… ) • NB-3 : External Services Capital ( Series : 130… ) • NB-4 : External Services Revenue ( Series : 140… ) • NB-5 : Imported Spares ( Series : 150…. ) • NB-6 : Capital Items ( Series : 160… ) • NB-7 : Project ( Series : 170… ) • NB-8 : Annual Shutdown Items ( Series : 180… ) • NB-9 : Rush Requirement ( Series : 190… ) • TYPES OF PURCHASE ORDERS • 451….. : Raw Material & Pkg material Pos • 452….. : Engg & Spares items Pos • 453….. : External service PO for Capital • 454….. : External service PO for Revenue • 455…. : Import Pos • 456…. : Capital Pos • 457…. : Project Pos • 458…. : Annual Shutdown Pos • 490….. : Rush Items POs

  5. R & M Items Procurement : Annual Shutdown • Total Plant Shutdown Activities: • Total plant shutdown date & duration are fixed in advance • All long lead time items are indented well in advance like high pressure valves, FRP pipes/fittings, Tower spares, Casting Items, CI/CS/MS pipes & fittings, Rollers & pulley, Conveyor Belts, Gear Boxes & general consumables. • Total shutdown requirement are approx 5 Crs. • Challenges : • Delay in long lead time items indenting. • Delay in delivery by Vendors. • Last minutes requirements. • Documentation/IBR certificate, excise invoice etc

  6. Rate Contracts/VMI for R&M Items

  7. Rate Contracts/VMI for R&M Items

  8. R & M Procurement- Soda Ash Division • Challenges in R&M Procurement • Frequent PRs • In-complete Specifications • In sufficient Lead time • Poor performance of Vendors in terms of delivery • Price , Delivery , Inco-terms & advance payment issues • Delay in PR to PO conversion • In-proper documentation • Area of Focus at Present : • PR to PO conversion in 15 days time : 80% Target : 90% • Delay in delivery of material: 20% Target : 0% • Advance payment : 6.25% ( nos of Pos) Target: 0% • Lead time reduction for A class • Maximize Rate contract & VMIs • Delivery Inco terms FOR veraval/sutrapada : 62% Target: 80%

  9. Import Substitutions - Case study

  10. Alternative Vendor Development

  11. Thank You

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