INDIAN INSTITUTE OF MATERIALS MANAGEMENT
Hyderabad
ONE DAY NATIONAL SEMINAR ON PUBLIC PROCUREMENT
13th September 2014
Curtain Raiser
-by Dr. V. Venkat Reddy
PROGRAM CONTENTS
● Introduction to Public Procurement –Problems and Prospects
● Public Procurement Bill-2012- Pros and Cons
● International Practices in Public Procurement for World Bank funded
projects
●
Transparency in Public Procurement through e-Procurement (e-Commerce)
PUBLIC PROCUREMENT
-ENHANCING TRANSPARENCY, EFFECTIVENESS AND ACCOUNTABILITY
This program is designed for materials management and allied professionals in the
field of public procurement. The aim of this program is to bring about awareness
among junior managers, enlightenment among the senior executives and facilitate
exchange of ideas among the top ones. It is also proposed to apprise the
participants of the present and future of MM in the field of Public Procurement.
MAJOR CONCERNS IN THE PROCUREMENT REGIME
 Existence of multiple procurement guidelines
 Over emphasis on bureaucratic procedures
 Obscure and obsolete procedures resulting in lack of transparency
 The fear of vigilance
 Frequent updates and Multiple interpretations of manuals
 Poor quality of manpower and inadequate training
 Procurement postings not linked to qualifications
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 Frequent inter-change with other assignments
 Lack of avenues / interest in knowledge building
 Lack of e-procurement
 Lack of centralized data sharing facility:
 Absence of a central authority to oversee procurement related issues
 Absence of an exclusive law governing public procurement
Therefore, in addition to what is being considered by the Government the following
measures are needed:
● Compulsory course on public procurement
● Institutionalization of IFA system
● Strengthening of audit
● Facilities for data sharing among ministries and departments, PSU’s
● Frequent sharing of experiences
The Indian public procurement system is plagued with a number of issues such as
Lack of

Transparency

Effectiveness

Accountability,
Gaps and lack of awareness leading to

Under-utilization and/or

Poor performance in the system.
These issues need to be addressed on an urgent basis.
Public Procurement Bill 2012 is likely to bring in much sought after efficiency,
transparency and accountability in the system to achieve the greater objective of
Value for Money to the people of the country
INTERNATIONAL PRACTICE IN PUBLIC PROCUREMENT
International Institutions support open, multilateral International Trading. The
objectives and functions of World Trade Organisation (WTO), International
Monetary Fund (IMF), The World Bank (WB), the United Nations Conference on
Trade and Development (UNCTAD) and various Trade Agreements that India is
signatory of support transparency and fair play.
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MATERIALS MANAGEMENT - TEAMWORK
 MM in Public Procurement is essentially ‘team’ management.
 Cross-functional coordination and cooperation hold the key to success,
moving from a highly segmented functional approach to a cross - functional
team.
 This calls for greater awareness, goal clarity and role clarity.
 Given the natural resistance to change this becomes quite a challenging task.
 Top management must play a decisive role in forging the culture of
teamwork, openness and transparency.

A wit once defined that
public procurement as collection of various
departments connected more or less by inadequate plumbing
ROLE OF MATERIAL MANAGERS INPUBLIC PROCUREMENT SUPPLY CHAIN
 Supply chain metaphor signifies connectivity and interdependence.

From a conceptual viewpoint, it is difficult to determine which link in the
activities that take place in the public procurement.
 However, certain functions play a decisive role in the success of the
organization.
 The Materials Management (MM) function is an essential component.
 The Materials professionals therefore have to play a crucial role in linking
the supplier and the service provider while maintaining good relationships.

MM professionals should not be content with mere vendor development and
vendor relationships but extend it to customers as well
 MM personnel should graduate from inventory management to integrated
materials management.
 Calls for change in mindset, new attitudes and acquisition of polyvalent
skills.
 Receptivity to new ideas, multidisciplinary skills and teamwork become
essential requirements.
 Purchasing or MM professionals, and other connected functionaries should
be given exposure to a variety of jobs at the horizontal level through job
rotation.
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
Good knowledge of computers and E–commerce will enable the team to work
cohesively and efficiently but will not substitute for business and customer
knowledge.
 Some of the important key result areas where focus is needed are to
minimize uncertainty, reduce lead-time, improve flexibility and process
quality, shorten the links in the chain, setting up multiple supply chains and
competing on service.
 Moving from functions to processes, setting new performance measures and
above all taking initiatives at State and industry level is required.
 India has excellent individual professional managers. What is needed is to
make management professional an excellent teamwork with new work ethics.
 We have to quickly create greater awareness and facilities for training our
managers to visualize opportunities and confidently handle the issues
relating to E–commerce.
 Training workshops can bring about increased awareness of material and
information flows.
 Increased spending on development activities in Government requires both
material and information flows. Inculcation of a strong customer service
ethic and work culture is a prime requisite.
MATERIALS MANAGEMENT – THE FUTURE
 In this second decade of the current century, procurement integration and
management can become instruments for global competitive advantage.
 If executed imaginatively, it can help reduce cost, improve asset utilization
and provide customer satisfaction.
 Integrating the Materials Management with information technology can
enable India to tap global markets through e–commerce.
 Today is confined but tomorrow can be defined.
 To chart and mould our future we have to gauge, engage and manage change.
 Wisdom dictates that this should be done with clear sight, insight and
foresight.
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 Future trends are becoming visible and we need to reckon them. The secular
shift in power from the supplier to the customer is clearly visible.
 Hitherto, the point of purchase was the mart or the shop. Today, the point
of purchase is moving from the shop to the home.
 The ubiquitous personal computer bids to become both the virtual one stop
shop and a factual one – click stop.
 Competition will spur chain innovation to seek wider global sources and
markets.
 Sourcing will be at lowest global cost, while widespread outsourcing will
create many internal supply chains.
 Agility, flexibility, transparency and responsiveness will be determinants of
success in the market place since time will have a premium.
 Customer relationship management all along the material supply chain will
become an imperative.
The professional body like Indian Institute of Materials Management and all
interested parties have to undertake simultaneously the six–fold task of
Adhyayana’
- Learning, ‘Upadhyayana’
- Teaching, ‘Shodhana’
‘Parishodhana’ - Research, ‘Acharana’ - Practice, ‘Pracharana’ -
-
Explore,
Propagation
IIMM has to prepare its members to provide goods and services to customers not
only in India but all over the world. And in this task of visualization of
opportunities, globalization of Indian business and integration of the Indian
economy with the global economy, let us welcome noble thoughts and seek an unison
of thought and action from this distinguished assemblage of leaders, professionals
and thinkers.
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