WESTERN
COALFIELDS
Story of a Buying Process
An assignment submitted to,
Mr. M.K. Gandhi
Management of Operations
By,
Paritosh Dhar (C_34)
Prashant Kumar Rai (C_36)
Shambhavi Singh (C_52)
On,
st
31 October 2020
A. Summarize the pump buying process of Western Coalfield.
1. Indenting purchase requirements
Mine Superintendent sends all the connected papers to the Purchase Manager, with a note
asking him to procure the pump.
2. Scrutinizing purchase indents
The Purchase Manager will scrutinize the papers so that an irresponsible purchase is not made.
3. Market study and Selection of Sources of Supply
SUPPLIER SEARCH
As a pump is a capital equipment, the enquiries are advertised in the press (open tenders), and
quotes are requested within 15 days.
PROPOSAL SOLICITATION
In the presence of 2 personnel, the quotations are opened and tabulation is made.
SUPPLIER SELECTION
Based on quotations received, potential sources are selected. Detailed negotiations are held
and finally a qualified source is selected.
A 5-member committee is appointed to go through the quotations, evaluate it techno-
commercially, negotiate with the suppliers and recommend a supplier to the mine
superintendent.
Detailed negotiations were held and finally the committee unanimously recommended the
purchase of a Kirloskar pump.
4. Order Preparation
Having selected the Supplier, the next step is to authorise the selected supplier to supply
material.
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.
5. Receiving Materials
The pump is delivered.
6. Inspection of goods
The performance is noted for 90 days, and is found to be satisfactory. The Mine Manager
reported this to the Purchase Manager.
7. Payment
The Purchase Manager advised the Finance Manager to release the payment for the pump.
B. Who were the participants in the Buying process and what were
their roles?
1. Initiator
They are the ones who initiate or recognize the need of a particular product requirement in the
organization for enhancement or to combat depravation. In this case Mr. Das, the Mine
Manager is the initiator.
2. User
They are the ones who are going to use the product or require it for the smooth functioning of
their operations. The Mine Manager of the Mining Department requires the pump for pumping
water out of the mine satisfactorily. So, he is the user in this case.
3. Influencers
Influencers can be of different levels and the decisions that they influence might differ from
person to person or post to post. These are basically the people who will influence the decision
of which product to buy from where and what suitable price to buy it in. In this case, the
Finance Manager influences the financial parameters of the decision the engineering manager
influences the technical parameters (specifications) of the pump
4. Decider
They decide or have the authority to decide whether to buy a certain product or not. In this
case, the Chairman of the 5-member committee is the Decider. He decides that as Engineering
Manager (influencer) certified Kirloskar to be the most reliable in terms of quality and service,
the pump should be purchased from them.
5. Buyer
They are the once who make the actually purchases from other business. The purchase
manager issued a transactional purchase order to Kirloskar pumps.
C. Will Western Coalfield buy all products using this buying process?
D. What was the evaluation method used to select the pump supplier?
The method used here is Technical Evaluati on. Under Technical Evaluation: -
Each and every tender is opened separately and scores are given to technical and quality
aspects of the product offered.
This method helps in finalizing the product offered if it completes our technical
requirement.
In the case, 3 suppliers were selected as they offered the pump according to our
requirements. i.e. 200 HP pump.
Then discussions were made on the pricing by negotiating, all agreed to supply at identical
prices and terms of payment, and also offered 90 days of unsecured credit.
So, the final decision was made on after sales service and since Kirloskar’s repair services
are faster and hence reducing downtime.
The overall evaluation found Kirloskar to be best and hence order was made to buy it.
