Strategy for agriculture

commodities procurement
Divakar
 Cost Competitiveness
Cost reduction/Procurement ROI
• Compare the old costs with the new
costs for the same good. Then break
them down into different supplier
categories and track the ones with the
highest savings
• Calculate the ratio of your annual cost
savings to your internal yearly costs of
procurement
Cost Saving Quality & Inventory
Cost avoidance/Risk management
• Leverage a data-driven demand
forecasting (Salesforce) tool to enhance
decision-making and cost avoidance
• Mitigate supplier risk through effective
contract management (ensuring timely
delivery and adherence to defined
quality standards) and enhanced
supplier relations
Delivery
Negotiation in procurement
Compete Collaborate
Buyer need form low to high

I win – You lose I win – You win

Compromise

I win some you win some

Avoid I lose some you lose some
You win – I lose

I Lose – You Lose

Accommodate
Supplier need from low to high

Cost Saving Quality & Inventory Delivery

Quality KPIs
• Track the ratio of disputed to total invoices
• Track the difference between the paid and quoted prices
• Accuracy in terms of the quantity of goods delivered
• Supplier defect rate

Inventory KPIs
• In case of agriculture commodity inventory aging is a crucial parameter
• Optimum inventory turnover ratio

Cost Saving Quality & Inventory Deliver

Delivery KPIs
• Purchase Order Cycle Time - Total time spent on a purchase order
throughout the procurement process, from its creation to payment
completion
• Keep a track of emergency purchases that are sometimes a necessary last
resort due to unexpected product shortages, can easily result in high
procurement costs
• Reducing logistics costs - Can be achieved through better negotiations with
carriers, and by optimizing delivery routes

Cost Saving Quality & Inventory Delivery

Key Suggestions

01 Inhouse e-Auction platform 04 Effective Contract

Management

Stocking at the time of arrivals

02 05 Enhancing supplier relation

03 Procuring PSF stock in lean
season directly from PSUs
(NAFED & FCI)
Implement sustainable
06 procurement to reduce
carbon emissions through
green logistics and
packaging
Thank you