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mjunction Bets Big On Procurement Outsourcing In India
mjunction Bets Big On Procurement Outsourcing In India
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Thursday, July 26, 2012:
After creating the largest steel and coal eMarketplaces, mjunction services limited, India’s largest eCommerce company (promoted by TATA Steel and SAIL) is focusing on procurement outsourcing as the new growth driver. buyjunction, mjunction’s Procurement arm, has emerged as India’s leading service provider clocking over Rs.37, 149 Cr of transaction value since inception in 2002. And a transaction value of Rs. 14,837 Cr in FY’ 11-12 which accounted for 44% of mjunction’s total of Rs 33, 145 Cr.
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mjunction plans to retain its leadership as India’s numero uno eCommerce company with a target milestone of Rs. 50,000 Cr annual transactional value in FY ’13. Considering the economic crisis in the first world countries and the ripple effect of slow growth and high inflation in emerging economies, enterprises are looking at every possible opportunity to cut costs and become leaner. mjunction is betting big on the opening up of the procurement outsourcing market to continue its high growth of 80% CAGR.
buyjunction has two broad offerings through with which it addresses the sourcing and procurement needs of enterprises.
The first is Assisted Sourcing – where we assist clients to source their strategic, critical and large value buys. Clients like Powergrid Corporation of India Ltd (PGCIL) have used this extensively for project procurements. Transaction value for Projects Procurement has been in excess of Rs 700 crore and savings have been in excess of Rs 10 crore. Plans are on to roll out the same solution to their remaining 9 branches all over India.
buyjunction has also implemented what is probably the single largest eProcurement Order of the Country at 41 factories and 3 HQs of Ordnance Factory Board (OFB). A total of 8480 Tenders & 6693 Vendors (which includes 70 Foreign Vendors) have already enrolled in the portal. OFB has also transacted about Rs. 7850 Crores of Materials & Services through the portal.
For Bharat Heavy Electricals Ltd, buyjunction is implementing EPS at 6 Units of BHEL. The system has a potential of handling 20,000+ tenders annually from these 6 units. BHEL intends to implement EPS in its remaining units shortly.
The second service involves Outsourcing the entire process from Source-to-Pay – where the client outsources the entire process with respect to their non-strategic and low-value buys and we are responsible for bringing about savings. This service is used by large corporations that want to completely outsource their non-strategic procurement. buyjunction has delivered average annualised savings of 12% on these non-core buys for clients like IISCO Steel Plant (ISP), Rourkela Steel Plant (RSP) and Bokaro Steel Plant (BSL). For TATA Steel, buyjunction has scaled up its management of procuring MRO items and services from four to across 60 sub-categories currently, out of a total of 90 sub-categories. A total of 6064 purchase orders were processed with a Spend Volume Managed amounting to Rs. 832 Cr.
Another growth opportunity is the global procurement business where buyjunction has sourced materials for clients like Tata Steel Thailand (TSTH) and Nat Steel Singapore Holdings (NSH), and is eyeing to handle more such sourcing mandates in the future. It is exploring opportunities in Europe and has entered into an alliance with EPSA Groupe of France to jointly explore opportunities that will emerge out of Europe. The alliance will give both companies an opportunity to engage and jointly service customers in India and Europe, thus also creating a huge opportunity for knowledge sharing and capability building. This will, in turn, help buyjunctionadd value to the procurement functions of buyjunction’s Indian Clients by implementing the learning to build capabilities for serving them better.
Going forward, buyjunction expects to touch a Transaction Value of Rs. 27,000 Cr in FY’ 13, marking an 80% growth over the last fiscal.
Mr.VireshOberoi, Founder CEO and Managing Director, mjunction services limited said “Procurement Outsourcing has gained prominence in India as the fourth wave of Outsourcing Business after Voice Operations,Human Resource Outsourcing and Facilities Management Outsourcing. There are tremendous opportunities in the Source to Pay space and thus we are building capacity and capability.” |
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