Procurement has transformed itself from a support function to a core strategic function – delivering sustainable business benefits. As a part of this transformation, firms are looking to adopt technology to smooth out the kinks in the process. Akshay Hegde, Director, Shakedeal talks abouthow his firm is using emerging technology to drive value in the procurement function.
How do you think the procurement start-ups are redefining the procurement industry globally?
Start-ups are known for their agility and are catalysts for innovation. The procurement value chain has been disrupted by new offerings in procure to pay, tender management and supplier scouting or onboarding with new age technologies like artificial intelligence, RPA, and IOT. By addressing the inefficiencies across supply chains, and with the help of new age technologies, start-ups are coming up with unique ways of offering real-time insights on procurement processes and expenditures, thereby giving actionable intelligence to key decision makers. The tech innovation, by startup players, is helping procurement leaders make the right decisions for their businesses and adapt quickly to sudden changes in supply and demand economics.
What do you have to say about the on-going procurement practices in India? Could you give examples of the prevalent inefficiencies in the current market scenario?
India loses $65 billion annually on account of inefficiencies in the procurement and supply chain networks. The industry is aware of this overhanging challenge, and there has been broad consensus amongst industry leaders to work together in ensuring supply chain transparency and strengthening supplier partnerships and infrastructure. However, it is becoming abundantly evident that procurement is no longer construed only as a cost based function, and has now transformed into a strategic and value driven function, integral to any organization.
By addressing the inefficiencies across supply chains, and with the help of new age technologies, start-ups are coming up with unique ways of offering real-time insights on procurement processes and expenditures, thereby giving actionable intelligence to key decision makers
As per the industry body Confederation of Indian Industry (CII) report, India ranks 47th on logistics and is lagging behind stalwarts such as Japan, US, Germany and China. The report states that the supply chain costs in India, which deal with the procurement, manufacture and distribution of products and services, are about 12% to 13% of the gross domestic product (GDP) compared with 7% to 8% of GDP in developed countries. For any country, this delta is clearly way too high to be offset by other qualitative factors, thus making us an expensive option for world supply chains. There is a need to bring these costs down to competitive levels. It’s incumbent upon the leaders to drive innovation in this space to make India an attractive destination.
How has ShakeDeal helped optimize procurement for its users? Could you illustrate how firms are leveraging ShakeDeal to perform the procurement function with some examples?
Shakedeal has emerged as the preferred procurement partner for large enterprises by consolidating their vast portfolio of indirect spend. Our core value is delivered by reducing the cost, effort, and time spent on the sourcing and PR->PO cycles. Shakedeal improves visibility in the entire procure-to-pay process by providing real-time insights for every status update from order processing (picking, packing and dispatch) to shipment tracking and intimation. Shakedeal also helps in reducing organizations’ tail spend by 3-5% by taking advantage of aggregate demand across all its clients. Several clients have benefited from our procurement solutions by reducing their off-catalogue spend leakage, and taking advantage of our end-to-end procurement supply chain.
Shakedeal improves visibility in the entire procure-to-pay process by providing real-time insights for every status update from order processing (picking, packing and dispatch) to shipment tracking and intimation
How has ShakeDeal grown over the years? Who are your major customers? What verticals do you largely cater to?
Shakedeal has been growing aggressively over the past three years with a 300% y-o-y growth rate. This is a testament to the quality of our offerings and the demand for such a proposition in India. A lot of our major customers are part of the Nifty 250 across sectors like Automotive, Engineering, FMCG, Pharma, Oil & Gas, etc. We have deliberately been sector-agnostic in line with our conviction that indirect procurement is a horizontal problem statement. We’ve developed capabilities broadly across MRO, Office & Housekeeping, and Packaging verticals, while the entire B & C class spend is within our purview.
How do you differentiate ShakeDeal from your competitors in the online procurement solution space?
ShakeDeal’s foundation has been built on a strong supply chain network of cloud FCs and dedicated FCs. Our operations are optimized to stretch every dollar while ensuring superlative service levels are delivered consistently. We have a very high proportion of recurring business and a strong net promoter score. Our tech is differentiated by our proprietary (patented) sourcing platform and our proprietary pricing intelligence engine that gives us a massive advantage in being price competitive.
Going forward, the need for having actionable real-time business intelligence will pave the way for smarter solutions based on AI and IOT
What role will technology, analytics and E-commerce play in defining the procurement solution of the future?
Going forward, the need for having actionable real-time business intelligence will pave the way for smarter solutions based on AI and IOT. Already, there are solutions deploying these technologies to solve some aspects of supply chain challenges. It won’t be long before companies will be forced to adopt these technologies to stay ahead of their competition for better business outcomes and relevance.
There are various applications of AI in E-commerce – chatbots, personalised search, price optimization, tackling fake reviews, combating counterfeit products, improving logistics by finding the optimal route map and even automating deliveries using drones. Blockchain, as a disruptive and distributed ledger technology, can enthuse trust in the system, reduce transactions costs and prove provenance by tracing the movement of goods across the value chain.
We are using our operations experts to optimize the scheduling and routing of orders amongst our cloud fc’s and vendor partners so as to streamline supply of all orders and backorders (essential and non-essential).
The vast amount of data collected using IoT can also be used to launch pay-as-you-use and subscription-based services, creating an opportunity to transform potential one-time buyers into repeat customers. As per one of the McKinsey reports, “efficient use of IoT can reduce maintenance costs alone by over 40%.”
In the near future, those able to inculcate such novel technology driven solutions, will be the ones to gain wallet share from their respective target audiences.
The Coronavirus pandemic has brought the world to a halt. How will procurement platforms like ShakeDeal help in the post-Covid-19 supply chain resurgence?
Shakedeal has prepared for the spike in demand for various items post relaxation of lockdown, which will invariably lead to supply bottlenecks. We are using our operations experts to optimize the scheduling and routing of orders amongst our cloud fc’s and vendor partners so as to streamline supply of all orders and backorders (essential and non-essential). To enable our customers to practice social distancing, good hygiene and sanitization at workplaces, we’ve quickly developed supply chains with inbuilt redundancies for Covid related products such as disinfectants, sanitizers, disinfecting tunnels and PPE. The lockdown had given us time to revisit and fine tune our processes, which means we’re now able to increase our throughput and improve upon our SLAs. Our main focus in this post lockdown period will be to chaperone our customer partners while helping them achieve their pre-covid capacity utilization in a safe and rapid manner. In many sectors, supply chains were thoroughly disrupted and will incur some latency before recovering to their steady state levels. We’re well poised to plug this gap and ensure operations at factories and plants are brought up to speed as quickly as possible.