Total Group has achieved remarkable innovation in Third Party Procurement services. As part of the operation, the company maps, designs and implements the entire supply chain process of the customer using global best practices and TPS concepts like JIT to provide end-to-end solutions to the customer. The company offers the best industry benchmarks and dedicated business units for major verticals like automotive sector, etc.

Total Group undertook a third party procurement (3PP) project for a client, a leading blue-chip electrical products manufacturer engaged in high technology electrical products and services related to power generation, transmission and distribution. The project involved creating a TIER I vendor for 1500 items for the client’s LT Motor division at Ahmednagar.

Objective for outsourcing this crucial function was to

• Rationalize vendor base.
• Reduce Inventory.
• Reduce number of transactions / follow-up with vendors.
• Release store space for production.
• Get parts to production on a JIT basis.
• Reduce overall logistics cost and
• Create base for Kit Supply / Sub Assembly in future.

In the first phase of the project, Total Group purchased goods from about 100 vendors, set up a warehouse close to the client's plant and issued parts everyday to the Assembly line on a Kanban basis. This involved a thorough study of the vendor base, consumption patterns, setting up inventory norms and designing a Two-Bin System backed by strong IT support. The logistics involved collection from vendors, warehousing and delivery to the plant on JIT basis.

The whole exercise enabled the client to establish a single window for 100 vendors and 1500 parts, thus reducing administrative activities, documentation, inventories and overall cost of logistics through outsourcing 3PP activity to Total Group. In addition, the client was able to avoid production-line stoppages and help reduce purchase prices.

With the influx of VAT implementation in India, 3PP outsourcing has become all the more relevant and Total Group anticipates many more progressive industries to follow in lines of the above client.