Ranju Bhattacharjee of Vivanta Guwahati, Assam talks about ideals of effective purchase
In order to do that as a purchase manager my most crucial task is to acquire high grade/quality raw materials in a cost-effective manner
In an interview with Hotelier India, Ranju Bhattacharjee of Vivanta Guwahati, Assam talks about essentials of striking a right purchase deal.
What is the most crucial part of purchasing in today's dynamic market scenario?
In the current market scenario only a firm which can provide maximum satisfaction to the consumers can survive in the long run. In order to do that as a purchase manager my most crucial task is to acquire high grade/quality raw materials in a cost-effective manner, which can be managed only by having a clear idea regarding the products to be purchased, in addition to having strong negotiations skills and access to multiple supply options to conduct cost effective analysis. Furthermore, it is also utmost important to maintain cordial relations with the suppliers since almost every company whether goods or service oriented is dependent on suppliers. The key to develop good relations with the suppliers is by treating them fairly, communicating to them our needs and standards, being demanding and loyal and ensuring timely release of their payments.
What vendor compliance systems did you initiate for cost savings?
Effectively managing our vendors is vital and vendor compliance is a major component of that. In order to ensure cost savings, we have undertaken certain measures. Firstly, we take time to identify strategic vendors and consolidating various product ranges over a few vendors enables us not only to save money but time as well. Consolidation often provides us with volume discounts as well as higher quality because there are fewer suppliers to manage overall in return making the whole process more efficient. Secondly - in addition to the main vendors we also keep certain back up vendors so as to ensure regular supply of goods and services. Third factor we keep in mind is tender management. Thus, providing the vendors with opportunities to bid for their work which in turn enables us to get the best possible deals not just in terms of prices but in quality as well. Fourthly, local vendors are requested to increase their product ranges which enables easy availability and cost effectiveness. Finally, the most important key to a successful vendor compliance management is communication. This is a powerful opportunity to strengthen our relations with our vendors and providing them with clear, unambiguous guidelines. While undertaking the above, we have ensured that all vendors are compliant towards GST and FSSAI.
How do you identify high risk vendors? What are the various measure and procedures introduced to deal with this?
A ‘high risk vendor’ is basically one who supplies us with goods and services which cannot be easily replaced and they are so important for us that a discontinuation of their services would negatively affect our functioning. We have made adequate arrangements to ensure that our high risk suppliers work to their highest potential and provide us with uninterrupted goods and services. To ensure this we seek long term relationships with them and regularly monitor all aspects of their performance including quality issues. We also assess their policies and procedures for their social responsibilities which helps us reduce the risk of issues of non-compliance after the contract has been signed. In a few occasions due to market scenario we need to be flexible and provide interim rate increase relief in sync of rate fluctuation in the market.
How has the domain of purchase changed over the years? Do the purchase managers have to develop certain skills today?
Initially, purchasing focused only on transactional relationship and low costs, however with the passage of time the role of purchase department has changed significantly and changed its focus from cost to organisational competitiveness. Globalisation has forced companies to improve their internal processes to remain successful. Now the primary goal of the purchasing department is to purchase the right item or service, in the right quantity, at the right price and at the right time. This requires a focus on the process improvements instead of short-term relationships and price reductions. In order to meet these changes purchasers must locate the right suppliers for their products and services also they must develop their questioning skills as well. The issue is not so much about locating suppliers with so many suppliers located in a variety of regions around the world but about ensuring that they can meet our business requirements. Also, the job of purchase manager is more challenging since guest requirement has gone up, for the competitive market hotels are experimenting with newer products, hotels are operating more machines, new technologies etc and same time there are pressure to keep the cost in control.
How do you train your team to follow procedures for smooth coordination in supply chain management?
In order to maintain smooth coordination, I personally prefer to focus on training them, further strengthen the already strong aspects of my subordinates instead of focusing more on improving their weaknesses. As management is a group activity, the weaknesses of one individual can be negated by others this will help in developing team work among the colleagues, at the beginning we give our participants an overview of the training session’s objectives in simple term and also encourage them to take initiative as it provides opportunities for free and also opens exchange of views and inter-change of ideas, problems, proposals and solutions. Face-to-face communication enables the members to attain improved understanding of organisation-wide matters and leads to better co-ordination.