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Online Competitive Bidding for procurement of 2,000 MT of Steam Coal for Jindal Steel & Power Limited

Brief Study:

The client's requirement was for 2000 MT (Grade B) Steam Coal. Scope of work by mjunction included the entire span of activities starting from identifying and preparing and floating RFQ to the shortlisted vendors, providing Market Intelligence Report giving price indications and finally conducting the online event and related activities.

Business Challenge

  • Considering the volatile nature of the market, the major challenge was arriving at realistic market indicative prices and conducting the event keeping in mind the price expectations by client and prevailing market trends.

Our Approach

  • Online Event Strategy: In order to derive competitive prices, considering the market volatility and Demand & Supply situations, a strategy of Online Sealed Bid followed by Dynamic Bidding was adopted.

Benefits

  • The event was conducted successfully with prices derived in line with client's expectations.
  • Savings to the tune of Rs 2 Lacs were achieved through the event.

Business challenges

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  • A 3 years contract covered 20% of items. Price matrix was used consisting of cost of each component that goes into the assembly
  • All Prices used to be fixed for 3 years
  • Remaining 80% of items were procured through spot buys

The CoalJunction approach

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  • Vendors premise were visited to understand the cost elements and the manufacturing process.
  • Cost justification for each element has been defined to accommodate any future price revision
  • Cost break-up was obtained post sealed bid from suppliers who further matched the price matrix

Benefits to the client

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  • A 3 years contract covered 20% of items. Price matrix was used consisting of cost of each component that goes into the assembly
  • All Prices used to be fixed for 3 years
  • Remaining 80% of items were procured through spot buys

Testimonial

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I have noted that mJunction has become the world's largest marketplace for steel, and the goal set to bring in more transformations. mJunction team deserves to be complemented on these achievements. R. Gopalakrishnan Executive Director, TATA Sons Ltd