August 9, 2011 2 Comments
Case study on MSEB
The Maharashtra State Electricity Board (MSEB), being one of the biggest electricity boards in terms of installed capacity and consumption, requires huge supplies of materials from vendors. Traditionally, the procurement practice involved a large vendor community from whom the quotes were evaluated and followed by procurement. The vendor community took advantage of the dependencies involved, manipulated the prices and dictated terms. Obtaining a better price and providing a level playing field became prime challenges. To bring transparency and accountability to the procurement process of organization and compliance with the Central Vigilance Commissioners (CVC) guideline (order no. 98/ORD/01), MSEB realized the need to look for an information-technology-driven solution as a way to overcome these problems.
The Solution Proposed and Implemented
The scope of the project encompassed the creation and implementation of the e-tendering application for the activities of all 4 major entities of M.S.E.B. The applications main focus was to automate most of the tasks involved in the entire tendering cycle. Some of the key activities that the system automates and integrates are as follows:
Pre-Tendering Tender publication and communication
- Supplier registration
- Indent preparation/Consolidation
- Tender document generation
- NIT creation
- NIT publication on the web
- Tender communication through e-mails and SMS
- Sale of tender document
- Issue of corrigendum
Tender processing Virtual tender opening
- Bid status tracking
- Filling of bids by suppliers
- Submission of bids by suppliers
- Receipt of bids in electronic tender box
- Tender opening and evaluation
- Preparation of comparative statement (CST)
- Generation of management information system (MIS) reports
Post Implementation training
The MSEBs secured e-tendering solution is a customized solution address ing specific needs and procedure of standard process of tendering in MSEB. Therefore, all the users should have a very good understanding of their roles and responsibilities in the system. Every user performs the same role that they were actually carrying out in their traditional system only the manner in which they will now (electronic) accomplish their duties has been changed.
All the key stakeholders of the system were given comprehensive training through several modes like on-site demonstrations, user manuals, flash-based demonstration and online demonstration of the complete system.
All the prospective users of MSEBs secured e-tendering solution were involved while carrying out the system requirement study and preparation of system requirement study (SRS). During the development and deploy ment phase, the system was tested by prospective MSEB users, and their feedback/suggestions were obtained to further improve the system, which resulted in greater acceptance and convenience of users.
MSEB took another step to support the vendors by helping them in using of the system to accomplish their tasks. An IT cell is set up specifically for the purpose of helping vendors accomplish their tasks and use the e-tendering system. Six computers were specially placed in the IT cells for the purpose of e-tendering; vendors may come and use them freely for tendering pur pose and may get help from the official in case any problem arises while us ing it.
The following table represents a brief view of the situations after adoption of the e-tendering system:
Cost Factors Result after adoption of secured e-tendering system Tender advertising cost 70% reduction (reduction in size of newspaper advertisement) Number of visits of suppliers to MSEB Once in a year for document verification only Number of corrigendum issued due to manual mistakes Number of manual mistakes significantly reduced Stationary and Printing cost Tendering now done in a paperless environment. Increase in registered vendors More than 25% increase Processing time for tender-to-contract cycle Nearly 60% (earlier it took 6 months for one tender to be completed. Now it takes less than 2 months).
Following is the company wise statistics of total tender processed with their cumulative value as on 31st July 2011.
Estimated cost of Tenders Processed (INR)
Total No. of Tenders Processed
1. MAHAGENCO’s Central Purchase Agency
2. MAHAGENCO All power station
3. MAHATRANSO’s Central Purchase Agency
4. MAHADISCOM’s Central Purchase Agency
Figures in Indian Rupees. | *As on 31st July 2011
The e-Tendering application of SETS is beneficial to both, MSEB and Suppliers. SETS reduced the paper chasing and accelerated the tender process thereby reducing the lead time for procurement and reduced the cost of tendering substantially.- MSEB