Hottest information about 4th Annual Strategic Sourcing & Procurement MENA Summit
3 DECEMBER 2018
Dep. General Manager – Procurement
Al Faraa’a Engineering General
3 Questions For Tarun Rochwani
How can artificial intelligence and block chain revolutionize procurement? What innovative procurement tools and techniques are you implementing?
Block chain and artificial intelligence could play a transformational role for the future. The global market for block chain related technologies itself is anticipated to reach billions of dollars, therefore it will be at the fore for any business. A lot has been spoken about the role of block chain along with BIM (Building Information Management) modelling shaping the construction industry. The benefits would be taking off intermediaries, transparency and trust for parties, establishing of efficient smart contracts and an overall transparency for clients. This will certainly contribute towards lean procurement.
A brief of tools and techniques:
We follow an efficient process of having specialized teams to appoint our supplier chain by a concise technical and commercial evaluation. We use less complicated preliminary formats initially leading to a final contract award. We have been persistent with using tools like contract soft software along with Microsoft Excel formats for supplier appointment and administration. Supplier performance, supervision, tracking, and feedback is done accordingly by our project control teams by ensuring our supply chain adheres to strict project milestones (These performance milestones being considered in the supplier contracts.).
What are the main innovative strategies to reduce costs of procurement and purchasing?
We help cost reduction significantly by providing value engineering and providing alternatives for our clients. We constantly work on improving of our payment terms and achieving procurement budgets by pre-qualifying newer capable vendors who are looking to penetrate the UAE market etc. As a conglomerate we have our own in-house divisions that work to satisfy economies of scale and cost. This helps improving our own capabilities and cut down on spending.
What are the specific trends and challenges of procurement strategies in your industry? What is the vision of strategic sourcing and procurement for the upcoming year?
For us the challenges have been very tight cash flow, extremely competitive market with low price war, low procurement spend budgets, dealing with VAT (Value Added Tax), and tracing capable suppliers to perform consistently.
The vision for the upcoming year is working and dealing with small coherent companies/supplier divisions that have low overheads and are ready to take up challenging jobs as the market continues to be more competitive with tight cash flows.