Digitalization of purchases of RUSH (EVA and VARUS) with SmartTender, economic effect of electronic tenders of ₴ 250 million per year
|scale||11 thousand employees||kpi||Digitalization procurement processes|
|Product||Procurements and logistics||Project time||2 months|
|year of briefcase||2020||geography||Ukraine|
|Industry||RETAIL||customer||RUSH (EVA and VARUS)|
The EVA line of stores is the largest national chain of beauty and health stores offering a wide range of decorative cosmetics, face and body care products, jewelry, accessories, household goods, and child care products. Today, more than 8,000,000 people are users of the EVA MOSAIC loyalty program.
In 17 years, the company has grown to more than 1,000 stores throughout Ukraine, presented more than 30,000 assortment items, and created 42 own brands. Today, the network employs more than 11,000 people. EVA adheres to the highest standards of customer service and a high level of corporate culture, which is reflected in the service model of the company "EVA is the best friend who gives happiness to be yourself."
Digitalization and procurement processes in EVA
RUSH (EVA Store Line) purchases the goods, works, and services needed to support its operations. That covers everything that is purchased not for sale to our customers, but necessary for the full operation of the enterprise and the development of the EVA chain of stores. These are non-commercial purchases.
The choice of suppliers is made exclusively on a competitive basis. To do this, in 2013 a unit was created — the Department of Nonprofit Procurement — with the following tasks:
- systematization and standardization of non-commercial procurement objects;
- organization and holding of tenders for the selection of suppliers;
- control of suppliers' compliance with their tender obligations in terms of prices, terms of delivery, and quality.
"The system is perfectly formalized in the form of simple and clear to each employee "Rules of non-commercial procurement". Due to this, today any purchase requisition is executed and agreed in the form provided in advance in the company's electronic document management system.
Based on the systematization of our experience, the corporate portal has created solutions that allow you to quickly organize a competition for the selection and approval of suppliers of all types of goods, works, and services — from office paper to warehouse equipment. We have extensive experience in conducting non-standard, multi-stage, and even creative tenders.
In the context of further digitalization of these processes, our main goal is to work on systematizing what we want to buy to ensure that companies purchase quality and optimal goods and services with the lowest possible prices in the shortest possible time", — Dmitry Shevchenko, Director of Procurement and Tender Control EVA stores and VARUS supermarket chains, chairman of the tender committee.
The process of moving to online procurement
During the period from 2013 to 2019, the Department of Nonprofit Procurement organized more than 2,000 public tenders for the supply of goods, works, and services. 200-250 participants were invited to each of their tenders. At the same time, the employees of the tender department were obliged to send invitations to everyone, call and remind about the terms of submission of the commercial offer.
Further "gluing" all proposals into one consolidated letter is a time-consuming and responsible process. With a systematic approach to procurement and the use of an electronic platform, it is enough to "download" the query with the basic parameters of procurement and monitor the progress of the online competition. Meanwhile, employees of the department are preparing for new competitions.
The transition to e-procurement was not easy: you can not add something to the online platform late — all components of the tender task, all the conditions of the tender must be first and clearly understood by all participants. To adjust, it took a lot of effort to systematize and standardize procurement.
In general, all tenders are large, technically complex, capacious — and not every online platform could fit. Therefore, before making their final choice, for several years the team of RUSH (EVA Store Line) "monitored" and tested various electronic trading platforms. During this time, 18 different electronic trading platforms (ETMs) were tested.
It turned out that SmartTender best meets the specifics of the company's procurement. The developers of the system and the specialists who support it really understand all the nuances of conducting such complex, long-term tenders. In addition, a free registration is provided for suppliers, which significantly increases competition. And for tender organizers — there is a flexible system of service packages.
Results of work in electronic procurement
We have been working with the SmartTender electronic trading platform not so long ago — from January 1, 2020. Our main achievements during this time are the systematization of procurement and better preparation of technical tasks, as well as attracting more promising suppliers to our tenders. Therefore, the departments that initiate this or that procurement have become even more scrupulous in preparing tenders.
Due to the work on the site, competition in procurement has increased, and with it, our savings have increased.
Advantages of automation of the procurement process
From the experience of RUSH (EVA Store Line), the following unconditional advantages of online procurement over traditional offline tenders are most noticeable and important:
- The speed of the competition is very important in a rapidly developing environment.
- High level of competitive component — more potential suppliers and more chances to get the minimum market price.
- Increased requirements for the quality of tender tasks — this creates the need for systematization of work, which also gives a positive result in itself.
- Transparency of the competition for its participants — increases the level of trust on the part of suppliers and partners.
The economic effect of the online bidding
Example one. One-time tender for the supply of equipment for one of the facilities of the company RUSH (EVA store line). Commercial offers from bidders were executed with a minimum price of UAH 7.4 million.
The second example. Tender for self-purchase of construction materials to be transferred to construction contractors.
Procurement process in EVA
"Systematic administration of non-commercial procurement began 7 years ago. To date, the system and specialists in the organization of this process are the best, and not only in our country. We actively studied the world experience, looked for foreign consultants to improve our work, but more systematically than us, we did not find anyone. Perhaps that is why today, we, the specialists of the company "RUSH", are addressed as experts in the field of non-commercial procurement.
From our experience, I can say that two groups of specialists are needed to successfully organize the process of non-commercial procurement. The first — well understand what product/service they need, know all their intricacies and details. The second is well versed in all the nuances of tender procedures.
In our case, the departments apply for the purchase and must formulate a detailed technical description of its subject. And the specialists of the tender department ensure transparent competition, carry out the post-tender price and technical control. Documentary and electronic formalization of the process significantly facilitates the work.
At the beginning of our work with the online platform, we were faced with a situation where all bidding companies were admitted to bidding. As a result, a completely unknown supplier won the price tender. As it turned out, dumping pursued one goal — to "light up" in a large tender, and not to ensure reliable, long-term supplies. To avoid such situations in the future, we switched to pre-filtering suppliers at the first stage of the tender and final bidding among proven companies,” — Dmytro Shevchenko, Director of Procurement and Tender Control, EVA Store Line and VARUS Supermarket Chain, Chairman of the Tender Committee.