Types of Industrial Customers

Commercial enterprises Manufacturing Non-manufacturing Institutional customers Public/private Hospitals, educational institutions etc Government customers PSUs Govt Departments Electricity, Irrigation etc Cooperative Societies

Classification of Industrial Goods & Services

Raw materials, components and sub-assemblies Capital items Plant & building Heavy equipment (machinery) Light equipment (hand tools) Consumables Operating consumables Maintenance consumables

Services: Legal, advertising, courier etc

Purchasing Orientations

Buying Orientation: Price, quality and availability Procurement Orientation: Strategic focus and proactive Collaborative relationship with supliers SCM Orientation: Deliver to end-user
Outsource non-core activities Support collaborative relationship with major suppliers

Purchasing Practices

In Commercial Enterprises: Initiation from user dept.

Check stock position

Identify potential suppliers

Get quotations, evaluate, negotiate Issue P.O. (quantiy, quality, time) Establish long term relationship

Purchasing Practices

In Government Units: DGS&D for standard products

Competitive bidding Closed bidding/sealed tender Open bidding/open tender (complex projects) Reverse bidding Govt. contracts: Fixed or with PVC; LD clause, special payment terms

Environmental Analysis

Internal:(Strength and Weakness analysis) Company location

Reputation (Brand)

R&D capability
Production facilities Marketing effectiveness Financial resources

Environmental Analysis

Information sources on environmental factors: Business press, govt. publications, trade journals, internet and professional publications External:(Opportunity and Threat analysis) Micro: (Affects a particular firm) Customers Competitors Suppliers

Environmental Analysis

External:(Opportunity and Threat analysis) Macro: (Affects all firms) Economic Demographic Natural Technological Govt., Political, Legal Cultural and Social Public

Environmental Analysis

Strategies for managing External Environment: Independent stategies using own strengths

Cooperative stratgeies through CII, FICCI

Integration strategies to strengthen within the value chain: Backward and Forward Horizontal integration to seek control some of its competitors