mjunction aids Tata Group companies with aggregated cement buy

buyjunction, the sales and procurement division of mjunction services limited, has facilitated aggregated procurement of as much as 1,76,102 tons of Portland Slag cement for around 30 Tata Group companies located in eastern India.

These companies, which included Tata Steel, Tata Metaliks, Tata Power and Tata Motors, needed the supplies between January and June of this year.

Cement as a commodity is driven by a high degree of cartelization, and manufacturers prefer offline negotiations and prices are buffered accordingly. The main challenge for buyjunction was bringing in primary cement manufacturers on board for online price negotiation as the client was not interested in participation by secondary players.

The geographical spread of the procurement was large and cement companies usually operate from separate branches where the nodal persons are different for different locations.

Keeping in mind these challenges, there was detailed pre-auction activity and a thorough techno-commercial scrutiny of bidders. One of the client’s terms was also that they needed to have on board cement manufacturers who could supply cement of 55 MPA (denoting compressive strength of the material) and above. Based on that, mjunction did quality and capacity assessment of vendors for this high volume buy.

The auction strategy also had to address some of the challenges. For instance, to accomplish the best prices without compromising on locational preferences, the total requirement was segmented into nine markets. Also, a clear message was sent out to participating bidders that no offline negotiations will be entertained and price discovered through the mjunction platform will be considered final for placing orders for this high value buy.

The auction was a huge success and buyjunction was able to achieve, for the clients, a savings of 10.89% (nearly Rs 9.71 crore) from the start bid price.