Dabur sourcing of Kashmiri

Saffron
e - Sourcing , e - Procurement and Reverse Auctioning

Submitted To
Prof. Maninder Singh
 Presentation Insight
• History of the • Reverse Auctioning
company • e – Sourcing
• Range of products • Benefits to Dabur
• Products with • Benefits to Farmers
saffron
• Saffron
• Scenario of
production
– World
– India
 History
• 1884 - Dabur came into being
• 1936 - became a full-fledged
company
• 1986 - Public Limited company
• 1996 - Created 3 separate divisions
– Health Care Products
– Family Products Division
– Dabur Ayurvedic Specialities Ltd.
Dabur Range of Products
Dabur Products with Saffron
• Dabur Vatika Saffron Glow Soap
• Dabur Shilajit
• Dabur Drakshavaleha
 Saffron
• The most precious and most
expensive spice in the world.

• The Saffron filaments, or threads, are

actually the dried stigmas of the
saffron flower, "Crocus Sativus
Linneaus".
 Varieties of Saffron
• Kashmiri Saffron is considered to be the world's best
saffron for its distinctive, long and silky threads. The dark
red thread of the saffron has an extraordinary aroma,
powerful coloring and flavoring properties.

• Iranian Saffron Iran is the single largest producer of

saffron, which is called the Iranian or Persian Saffron.
Iranian saffron is known for its exquisite, delectable aroma
and high coloring capabilities.

• Spanish Saffron Not as strong as Kashmiri saffron also

has its own unique aroma, flavor and coloring capabilities.
 Why is saffron expensive?
• Each flower contains only three stigmas.

• These threads must be picked from each flower by hand, and

more than 75,000 of these flowers are needed to produce just
one pound of Saffron filaments, making it the world’s most
precious spice.

• But, because of saffron's strong coloring power and intense

flavor, it can be used sparingly. Saffron is used both for its
bright orange-yellow color and for its strong, intense flavor
and aroma.
Saffron World Scenario
 Indian Scenario

Srinagar
Pulwana
Budgam

Doda
Reverse Auctioning , e - Sourcing
and e - Procurement
 e - Sourcing

• Elimination of the middleman

• Better and easy communication with suppliers
• Widened horizons
 e – Sourcing of Dabur povided by
Ariba
• e – Sourcing options to Dabur were
provided by the hired consultants :
ARIBA
 Prospects for Dabur
• Better prices for saffron
• Elimination of search and negotiation costs
• Best quality raw materials from global
suppliers in a transparent manner
• Minimization of supply risks by increasing
the vendor base
• Elimination on the middleman
• Better social image
• It is able to beat inflation by procuring
inputs needed in the next four months to
two years at a time.
 First Phase Challenges faced
by Dabur
• Lack of an established, standardized and documented
sourcing process.
• How to enable its suppliers both in rural and urban
parts of India to participate in a transparent, dynamic
and interactive negotiation process.
– lack of technological advancements
• Internet
• Connectivity
– very little computer literacy
• Manage the diverse set of suppliers spread across the
globe
 First Phase - Ariba Managed Markets and Ariba
On-Demand Sourcing Basic
• Ariba team assisted with data collection in category-specific data collection
templates, supplier research, data analysis.
– Translated into a lotting strategy based on suppliers’ capabilities, manufacturing
locations, and Dabur’s business needs and other strategic sourcing decision-making
criteria, and building and publishing a category-specific total-cost RFQ to the approved
potential suppliers.

• Ariba also assisted Dabur in the initial managed markets by conducting

supplier management post-RFQ publication final price negotiations and
then awarding the business to the successful suppliers.
– Based on the multiple advantages of the initial managed markets, Dabur ramped up its
spend management journey with the implementation of Ariba On-Demand Sourcing
Basic technology along with full-time Ariba Consulting Services. This further helped
Dabur’s buyers to address both their strategic and indirect expenses, which included
maize derivatives, sugar, logistics, and chemicals to name a few.
 Saffron First Phase
• Traditional Approach:
– Source saffron from several suppliers based in India’s northern-most state
of Jammu & Kashmir.
– The market was a virtual oligopoly and every year suppliers would quote
equal prices with Dabur allocating equal quantities to each of them.

• Ariba Sourcing Basic

– Helped to bring visibility along with cost reduction, whereby the suppliers
and Dabur could see the best quoted prices for the commodity.
– The result was transparency, meritocracy and enhanced efficiency in the
system.
– Since the rollout in December of 2002, Dabur has conducted 520 sourcing
projects via Ariba Sourcing Basic with average savings of 10 percent across
various categories.
– Dabur was able to identify a better supplier base in China, South East Asia
and Eastern European countries for various categories such as honey, air
fresheners, juices, and packing materials to name just a few through Ariba’s
expertise in low-cost country sourcing.
– Ariba has also helped Dabur to avoid onshore inflation while expanding its
supply bases and reducing costs.
 Second Phase - Ariba On-Demand
Sourcing Professional (Category
Management)
• Second Phase
– Focus on category-specific process standardization,
– Visibility into its expenditures,
– Risk monitoring and mitigation,
– Knowledge management and
– Informed decision making on both budgets and pricing.

• Ariba On-Demand Sourcing Professional in August of 2006.

– Enhanced collaboration across
• Departments internally
• Amongst suppliers.
– Decision-making,
– Organizational buy-in, Sourcing visibility,
– Efficiency, Process Standardization,
– Knowledge Capturing and
– Compliance
 Prospects for farmers
• Technically equipped to gain better value out of the
saffron cycle
• Better yield
– Quality
– Quantity
• Elimination of the middleman
• Better prices for the saffron through negotiations
• International market awareness and presence
• Better and easy communication with company