WESTERN COALFIELDS – STORY OF A BUYING PROCESS

1. PROBLEM RECOGNITION STAGE

Mr. Das, the Mine Manager (Initiator), has observed that the pump is not pumping water out of the mine
satisfactorily. It also breakdowns frequently and repair costs are shooting up.
Mr. Das puts up a letter to his boss the Mine Superintendent recommending & justifying (in terms of repair
costs) the replacement of the old pump.
2. NEEDS DESCRIPTION STAGE
Mine superintendent receives the letter & is convinced of the necessity of replacement.
He approves in principle the replacement of the pump.
3. PRODUCT SPECIFICATION STAGE
As the pump was purchased 10 years ago and in this period, pump technology must have changed drastically, he
appoints a technical committee headed by Engineering Manager to advise him on the type & description of the
replacement pump.
The committee met 3 times & unanimously recommended the purchase of a 200 HP pump.
The chairman (Engineering Manager) puts up a letter to the Mine Superintendent informing him of the decision
& enclosing the pump specifications.
4. SUPPLIER SEARCH STAGE
The Mine superintendent sends all the connected papers to the purchase manager, with a note asking him to
procure the pump.
The purchase manager put an advertisement in the press stating the details of the pump & asking interested
supplier to quote within 15 days.
5. PROPOSAL SOLICITATION STAGE
20 applications are received by post
On a particular day, in the presence of 2 personnel, the quotations are opened and tabulation is made.
6. SUPPLIER SELECTION STAGE
The purchase manager discussed with the mine superintendent & it is decided to appoint a 5 member committee
to go through the quotations, evaluate it techno commercially, negotiate with the suppliers and recommend a
supplier to the mine superintendent.
The members of the committee were:
 Deputy Mine superintendent – Chairman
 Engineering Manager – Member
 Mine Manager – Member
 Finance Manager – Member
 Purchase Manager – Secretary
The committee in its first meeting shortlisted 3 suppliers on the basis of their size / technical reputation. (Called
Technical evaluation)
The 3 shortlisted suppliers were called for negotiations & all agreed to lower prices. All agreed to supply at
identical prices and terms of payment.
The committee in its crucial meeting discussed the subject.
The Mine manager (user) is of the opinion that all the 3 supplier pumps are to the same specification & can
therefore meet his requirements. However he opined that repair services of Kirloskar pumps are faster &
therefore they should be given preference.
The purchase manager (Buyer) was of the opinion that all were willing to supply at identical prices and were
therefore commercially similar.
The finance manager (Influencer) was of the opinion that all were willing to give 90 days’ unsecured credit &
therefore financially equal.
The Engineering manager (Influencer) was of the opinion that Kirloskar pumps are the most reliable with low
downtime and hence should be given preference.
The chairman (Decider) says that we should buy the best, as this is a critical product. He was of the opinion that
as engineering manager certified Kirloskar to be the most reliable in terms of quality and service, the pump
should be purchased from them.
All the members agreed and the secretary put up a letter to the Mine manager stating that the committee has
unanimously recommended the purchase of a Kirloskar pump on Techno Commercial considerations.
7. ORDER SPECIFICATIO STAGE
The purchase manager issued a transactional purchase order to Kirloskar pumps. The purchase order is a
document which contains product specifications, price, terms of payment, terms of delivery, warranty terms etc.
8. PERFORMANCE REVIEW
The pump is delivered and the performance is noted for 90 days. The performance is found satisfactory. The
mine manager reported this to the purchase manager who in turn advised the Finance manager to release the
payment for the pump.

DISCUSSION QUESTIONS
A. Summarize the pump buying process of Western Coalfield.
B. Who were the participants in the Buying process and what were their roles & tasks?
C. Will Western Coalfield buy all products using this buying process? Justify
D. What was the evaluation method used to select the pump supplier?