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Online Competitive Bidding for procurement of 30,000 MT of LAM Coke for M/s SAIL-Bhillai

Brief Study:

The client's requirement was for 30000 MT of LAM Coke. Scope of work by mjunction included the entire span of activities starting from identifying and developing new potential vendors, floating Tender Document to the shortlisted vendors, providing Market Intelligence Report giving price indications and finally conducting the online event and related activities.

Business Challenge

  • The total quantity as required by client was huge for one time procurement which could pose problems in convincing vendors for participation and supply.
  • The target price as communicated by client was on the lower side with respect to the prevailing market rate.

Our Approach

  • Online Event Strategy: The strategy of Online Sealed Bid, followed by Reverse Auction along with Price Match was adopted.

    Benefits

    • The event was conducted successfully with a total eSourcing price of Rs 67 crores.
    • The indicative prices and overall market scenario, as mentioned by mjunction in its Market Intelligence report, provided a good insight into the prevailing market trends which helped the client in fixing up a realistic Start Bid Price in the Online event and thus resulting in deriving satisfactory prices.
    • Prices derived were competitive enough which were also in line with client's expectations. The savings derived with respect to Last Purchase Price were around Rs. 57.00 Lacs (Approx).

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