CASES
Transforming Procurement:
Real Stories, Real Results
Real Stories, Real Results
Discover how leading companies across industries are achieving efficiency, savings, and innovation with Zinit’s AI-powered procurement platform
“White” competitive procurement in seven
days: how we redesigned
processes
days: how we redesigned
processes
Eli Michael
Head of Procurement (technical, chemical, agro)
ASTON - food products and food ingredients
Commercial companies do not have any external regulatory requirements, and you can buy almost anything, from anyone and choose your supplier as you like. And if you are not going to IPO or are not seriously concerned with questions like: “How would the procurement department work more transparently?”, then it is usually a trade-off between simplicity of the procedure and the choice of suppliers. - then it's usually a trade off of procedural simplicity for price. Because you can just call the supplier and just order. Quick, convenient, minimum body movements, but no one knows how much the final price corresponds to the market
simple procedure
= 10% more expensive.
= 10% more expensive.
even simpler procedure
= 15% cheaper.
= 15% cheaper.
We have redesigned the processes so that the procedure remains as simple as possible, but the counterparties actively bargain with each other for the offer.
Aston is one of the largest food and ingredient companies in the country, including being the first to export vegetable oils. We have 20 divisions, production facilities, elevator complexes, port terminals, tankers, bulk carriers, and trading offices in Switzerland, Turkey, Singapore and Dubai. Our indirect purchases include spare parts for equipment, fleet and agricultural machinery, design, construction, equipment repair, road repair and other services.
Quite soon after the formation of the first supplier base we started to have conflicts and misunderstandings after the selection of contractors for supplies. The thing is that we made a request for proposals by mail and phone, received in response options with prices, compared them and chose a supplier. That is, it was an auction with a single step. And not all suppliers knew that it was an auction.
Already after the selection, everyone would call us and say: “Tell us what offer you were given. We will give you a better one.” Communicating with each supplier takes time, everyone gets nervous. As a result, when a certain contractor is chosen, calls with resentment start. Because, as it turns out, someone could have won and was ready to move up the price, but simply did not know that this was the situation. As a result:
- Suppliers are not satisfied with our transparency and non-obvious selection criteria.
- We are not satisfied with the final price, because the suppliers could clearly give lower prices, as they often say after the procedure is completed.
The right solution would be to bring them together in a single negotiation room, but this does not solve all related problems and is time-consuming. The second correct solution would be to send them to an electronic trading platform where they would see each other's offers
But the suppliers did not want to go to the platforms
On the one hand, it was necessary to trade on ETPs, but on the other hand, suppliers simply did not want to enter them. Suppliers simply did not want to deal with any platforms, because they required complicated registration, registration fees, participation fees, and so on. A forum or a messenger group would have been a better fit, perhaps. We even thought about it seriously until we got acquainted with the Zinit service.
Zinit is an electronic trading platform where everything is as simple and intuitive as possible and where there are already suppliers.
At first, we saw it as a place where we could find new suppliers
It's quite simple: since we were just creating processes and just recruiting a supplier base for indirect purchases, we had to either make a lot of cold contacts or find places where there were already suppliers. In some areas, there are sites that bring together professionals (for example, for printed products), but in most cases, small suppliers are not concentrated anywhere. There was already a base on Zinit - not a very large one at the time (it grew later), but we were happy with that.
We came to the site and started organizing our purchases. After the first few procedures, it turned out to be very easy to add our existing contractors, and the site became more of a tool for negotiating them, which saved us a lot of time and nerves.
Procurement is simple, participation is free, and registration takes a couple of minutes: we sent a link and said that proposals should now be submitted here. In the end, everything becomes clear to everyone. There are clear rules for evaluating a proposal. Contractors can see who has won. I can see how suppliers bargain. It is important that it is not the company that wins, but the proposal. All contractors understand whether they could have given cheaper or not, whether they could have taken this lot or not. They have no questions for me as the organizer of the bidding.
