“We are now more likely to see a transition to fully autonomous procurement. On the B2C side, there has been significant technological adoption in terms of individual purchasing of goods and services. The same trend has accelerated in industrial and business-to-business procurement,” says Naman Shah, CEO and Founder, NowPurchase, in an interaction with CIO AXIS.
What is piqueing people’s interest in a technology-driven procurement platform?
Technology-driven procurement has been discussed for a long time, starting with the advent of personal computers and progressing through enterprise resource planning (ERP), auctioning sites, and e-commerce platforms. Rapid advances in digital technologies, such as low-cost computing and data storage, have enabled advancements in mobile technology and the cloud. Further, constant connectivity and sensors, have brought devices and machines of the Internet of Things to life, redesigning the supply chains of companies and changing the value added in purchases.
This future is enabled by digital procurement solutions, which provide access to previously unavailable data or bring order to massive, unstructured data sets; drive more complex analysis and better supplier strategies; and enable more efficient operations. We are now more likely to see a transition to fully autonomous procurement. On the B2C side, there has been significant technological adoption in terms of individual purchasing of goods and services. The same trend has accelerated in industrial and business-to-business procurement.
What are the challenges in the industry when it comes to industrial P?
When compared to an individual, industrial procurement is extremely complex and has a starkly different side. It entails much more than simply purchasing one item in order to produce another. The majority of issues concern quality, delivery, timeliness, and, to a lesser extent, price. Timeliness is of extreme importance. Although the price must be lower, this is of little value unless quality and delivery assurances are provided.
The quality of the parts and raw materials makes or breaks the finished product. The procurement team ensures that the elements are of specific quality in terms of physical description, metal/chemical composition, correct measurements, and performance specifications. The procurement team also ensures the quality of the finished goods is up the mark.
With increased supply chain integration and lower inventory levels, on-time delivery has become an increasingly important factor for success. Large inventories and production capacities were traditionally required to ensure on-time delivery. However, thanks to advanced information systems, deregulation, agile manufacturing organisations with flexible equipment and tooling, and sophisticated logistics systems, integrated supply chains no longer require large, expensive inventory buffers to respond to unexpected events and variations in demand.
Costs have always been important, and it is not uncommon for SMEs to discover sudden price disparities in today’s increasingly global economy. This is because of the convergence of improved high-speed communications, lower transportation costs, universal access to technology, and effective management practices. Another significant issue when dealing with businesses is, a lot of trade or industrial credit is extended, which is very different from dealing with individuals. Furthermore, the goods purchased are highly technical, and many of them are obtained from a variety of suppliers, some of whom are organised and others who are not.
Simply put, supply variance and quality of supply, credit piece, and ultimately, delivery and timeliness are critical.
In the current procurement scenario, what problem is NowPurchase addressing? What role does NowPurchase technology play in metal manufacturers’ procurement?
NowPurchase is obsessed with transforming industrial procurement and creating a true, autonomous platform that assists metal manufacturers in procuring raw materials. It is important to note that we’re talking about the $140 billion metal manufacturing industry here. This includes iron and steel, non-ferrous metals, and the foundry and castings industries. In view of the fact that the purchase and production departments work in silos, we at NowPurchase believe that the process of procurement has become extremely inefficient. The purchase and production managers are in separate buckets, which is where a lot of money is lost, and it is this gap that NowPurchase is attempting to bridge.
Depending on the manufacturing process, we recommend and deliver the appropriate raw material as a procurement solution. We have our own WhatsApp bot that provides pricing transparency, as well as a proprietary software called MetalCloud that aids in production process optimization.
WhatsApp has seen widespread adoption in terms of technology. Currently, 80 percent of our users use this medium to view prices, track deliveries, raise quotations, and communicate with their account manager, among other things. Furthermore, people have begun to recognise that technology is the future, which has resulted in the widespread adoption of our MetalCloud software. Our proprietary algorithm is being used by factories to optimise the production process. They are taking current inputs, different parameters, putting data into the software, and determining the best way to make that end alloy.