Case Study

Procurement
Domain Procurement
Name of the Case: Buying Strategies
Introduction: This case study is to determine the different buying strategies that can be followed for
different types of requirements from the plant.
To discover the potential levers that can be used for better pricing & also ensuring zero disruptions
in the supply chain.

Background: In TSL, all the plants have different types of MRO Spares requirement ranging from
complex MRO spares for critical equipment (high price in Crs) to spares with prices as low as 1000
or even lesser sometimes.

The Buying strategy will depend on the type of material being procured, its criticality to plant, the
number of plants where a material is being consumed.

Problem Statement/Challenges Faced

For the critical spares, generally the vendor base is limited as the manufacturers of these equipment
provide the critical spares. In such a scenario, the prices charged are exorbitantly high and because
of lack of competition, negotiation levers are very limited.

Apart from the above scenario, there are many products which are consumed across multiple plants
and buying requests comes from procurement throughout the year. Also, these items are not very
critical & can be sourced from multiple suppliers.

As a buyer, what are the different buying strategies that can be followed for the above 2 scenarios.

Critical Case Questions

1) What should be done to bring the cost down for the critical spares?
2) For materials which are not very critical, what buying strategy needs to be followed?
3) There are certain materials which are being consumed across multiple departments & buying
requests comes throughout the year. What are the planning techniques that can be
implemented for such items?
4) TSL has already implemented an ERP system. How can the ERP be used to solve the problem
of Q-3?