Digitalisation of procurement at TAGRAS Holding — efficiency increased by around 20%
The transition from a fragmented approach in procurement activities to a unified group-wide procurement management system made it possible to increase efficiency and completely abandon imported software in the management of material and technical resources. Evgeny Terletsky, Head of Production Planning at TAGRAS Holding, spoke about this in more detail.
Why old approaches stopped working
“At the stage of forming the structure of TAGRAS Holding, the divisions included in it had their own, highly fragmented approaches to procurement management. This made procurement management by the parent organisation virtually impossible,” notes Evgeny Terletsky.
The divisions operated in different 1C databases without the ability to access certain shared key procurement information. This, in turn, created additional difficulties in managing procurement activities.
When forming warehouse inventories of these companies within separate 1C databases, only employees working directly in a given company could use this information. Within a unified holding structure, this limited the movement of inventory items between all structural divisions of TAGRAS Holding. As a result of such a system, which lacked transparency for the divisions within the holding structure, the share of inventory not involved in production increased, as did the working capital requirement.
Due to the autonomy of companies in procurement management and their operation in separate 1C databases, product catalogues differed significantly across all companies. Moreover, in some entities, product catalogues were disorganised even within a single division.
In addition, without access to each other’s tender documentation, divisions often conducted tenders for the same product items. This led to increased labour costs and allowed for the possibility of purchasing the same goods at different prices.
Technological solution: automated procurement management system (APMS)
The Holding launched a project to create an automated procurement management system (APMS). The first stage was process unification: a single format for requests, tender committee protocols, warehouse inventory databases, and reporting. The second stage was digitalisation. In each 1C database, an automated workplace for the procurement specialist was created.
A higher-level system — the APMS — was also formed. The APMS accumulates key data on procurement activities of all divisions, including tender committee protocols, data on counterparties, data on available warehouse inventories, and other information.
“The APMS is a unified group-wide working environment and a common database for procurement and warehouse management,” explains Terletsky.
Results
Today, all core procurement activities of the Holding are conducted within a single digital environment. Key results of the APMS implementation:
- Procurement efficiency increased by more than 20%;
- Low-turnover inventory reduced by 23%;
- Full independence from imported software achieved.
Digitalisation of procurement at TAGRAS has ceased to be an abstract concept. It is a functioning system that provides transparency, speed, and efficiency.
