Business Advisory · 02

Every rupee saved in procurement drops directly to the bottom line.

Sales people deliver revenue, which is taxed, taxed again, and arrives at the bottom as profit eventually. A good procurement decision is profit, on the day it is made. This is why the most under-staffed, under-trained, under-respected function in most Indian SMEs deserves more of your attention than it gets.

Request a procurement audit What I look at

2–8%typical addressable spend reduction in a first-pass review

60-90days to first measurable saving in most engagements

SMEtailored for owners who buy materials, services, or capex regularly

For the owner who's tired of being overcharged

You have a feeling your vendors are quietly comfortable.

The same five suppliers, for the same six years. The "trusted relationships". The quotes that always come in 2% lower than the last one. The Diwali gifts. The occasional drink. And the slow, suspicious feeling that somewhere in the middle of all that warmth, you are paying more than you should.

You are not paranoid. You are also not greedy. You are running a business, and you know that the difference between a 7% margin and a 10% margin is the difference between barely making it through a slow quarter and being able to hire your next person.

I am not here to wreck your supplier relationships. I am here to put numbers next to them, so you can decide which ones deserve to last and which ones you've outgrown.

For the procurement head with a brief

A procurement engagement, in detail.

I work from the Kraljic matrix — segmenting spend by supply-market complexity and profit impact — and apply a sourcing strategy appropriate to each quadrant. In practice the work covers:

Spend visibility: Clean spend cube, vendor consolidation map, off-contract spend identification.
Category strategy: Per-category sourcing approach — leverage, strategic partnership, market exploitation, or bottleneck management.
RFx design: Structured RFIs, RFPs and RFQs with clear evaluation criteria — not the unfair-trial format Indian SMEs typically run.
Negotiation prep: Should-cost models, supplier P&L approximation, BATNA design, role-played negotiations.
Contract & payment terms: Pay-when-paid, advance vs LC, milestone-linked release, quality holdback, dispute clauses.
Vendor governance: Scorecards, QBRs, supplier development plans, exit criteria.

Fees are typically ₹1L–₹5L for a category-level engagement, with success-fee structures available for larger spend bases.

Methodology

Where I usually find the money.

In the order I find it, most of the time.

Maverick spend

Purchases happening outside negotiated rates — often 10–20% of total spend, paid at near-list.

Specification creep

You are buying a higher specification than your application actually needs. The supplier did not raise their hand to mention it.

Volume fragmentation

The same item from three vendors. Each one priced at a tier below what your combined volume could have unlocked.

Payment-term mispricing

Advances given to vendors who could have given you credit. Credit taken from vendors who would have given you 1.5% for paying in 15 days.

Tail-spend chaos

Hundreds of small vendors absorbing disproportionate admin cost. Consolidation alone often saves more than the discount.